Megmilk Snow Brand : 【Delayed】Supplementary Information Three months ended June 30, 2020 (April 1,2020 to June 30, 2020)

August 12, 2020

Supplementary Information

Three months ended June 30, 2020

(April 1, 2020 to June 30, 2020)

	Table of Contents for Attachments
		Page
	Front cover	1
〈Consolidated Financial Results〉	2
1.	Quarterly Consolidated Statements of Income
2.	Quarterly Consolidated Statements of	2
	Comprehensive Income	3
3.	Quarterly Consolidated Sales and Operating Profit
	by Product of Each Segment
4.	Causes of Net Changes in Consolidated Operating	4
	Profit
	5
5.	Quarterly Consolidated Balance Sheets
6.	Quarterly Consolidated Statements of Cash flows	5
〈Consolidated Financial Forecast〉	6
1.	Consolidated Earnings Forecast for the Fiscal Year
	Ending March 31, 2021	6
2.	Consolidated Sales by Product of Each Segment and
	Operating Profit by Segment
〈Other〉		8
1.	Non-consolidated Net Sales by Business Segment

Earnings forecasts contained in this supplementary material are forward-looking statements and include uncertain factors. Please note that actual results may differ from forecasts due to various unknown or unpredictable factors.

This material has not been prepared to solicit investment.

This document has been translated from a part of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original,

the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

MEGMILK SNOW BRAND Co., Ltd.

1

〈Consolidated Financial Results〉

1. Quarterly Consolidated Statements of Income

(Unit: 100 million yen) (Amounts rounded down to the nearest 100 million yen)

	Three months ended	Three months ended	Net change
	June 30, 2019	June 30, 2020
		Vs. Sales		Vs. Sales		Year-on-
	Result	Result	Amount	year
	(%)	(%)	change
						(%)
Net sales	1,546	100.0	1,562	100.0	16	1.0
Cost of sales	1,172	75.8	1,201	76.8	29	2.5
Selling, general and administrative	324	21.0	311	19.9	(12)	(3.9)
expenses
Operating profit	50	3.3	50	3.2	(0)	(0.8)
Non-operating income	10	0.7	6	0.4	(3)	(31.9)
Non-operating expenses	1	0.1	2	0.2	0	26.6
Ordinary profit	58	3.8	54	3.5	(4)	(7.1)
Extraordinary income	0	0.0	0	0.0	(0)	(71.1)
Extraordinary loss	5	0.3	7	0.5	2	45.9
Profit before income taxes	54	3.5	47	3.0	(6)	(12.1)
Income taxes	14	0.9	15	1.0	0	5.7
Profit (loss) attributable to non-	1	0.1	0	0.0	(0)	(84.3)
controlling interests
Profit attributable to owners of parent	38	2.5	31	2.0	(6)	(16.9)

2. Quarterly Consolidated Statements of Comprehensive Income

(Unit: 100 million yen) (Amounts rounded down to the nearest 100 million yen)

	Three months ended	Three months ended	Net change
	June 30, 2019	June 30, 2020
				Year-on-
	Result	Result	Amount	year
	change
				(%)
Profit	39	31	(7)	(18.8)
Total other comprehensive income	(7)	5	12	－
Comprehensive income	31	37	5	17.0
(of which, comprehensive income	1	(0)	(1)	－
attributable to non-controlling interests )

2

3. Quarterly Consolidated Sales and Operating Profit by Product of Each Segment

(Unit: 100 million yen) (Amounts rounded down to the nearest 100 million yen)

			Three months ended		Three months ended	Net change
			June 30, 2019	June 30, 2020
								Year-on-
			Result	Result	Amount	year
			change
								(%)
[Net sales]
		Butter	53		57		3	6.5
		Margarine	31		33		2	6.5
		Cheese	191		193		1	0.8
		Other	75		78		3	4.5
		Subsidiaries and other	258		295		36	14.1
	Dairy Products	610		657		47	7.7
		Milk and milk-based beverages	219		205		(14)	(6.5)
		Other beverages	105		97		(8)	(7.6)
		Yogurt	155		150		(5)	(3.5)
		Desserts and fresh cream	60		62		1	2.9
		Other	9		6		(2)	(29.6)
		Subsidiaries and other	172		174		1	0.8
	Beverage and Dessert	723		695		(27)	(3.8)
		Feedstuffs	89		83		(5)	(6.6)
		Seed products	34		34		0	2.0
	Feedstuffs and Seed	123		118		(5)	(4.3)
	Other	89		90		1	1.8
	Total	1,546		1,562		16	1.0
[Operating profit]
	Dairy Products	27		32		4	17.9
	Beverage and Dessert	14		8		(5)	(40.0)
	Feedstuffs and Seed	6		7		0	11.8
	Other	2		2		0	17.6
	Total	50		50		(0)	(0.8)

(Notes) 1. Main types of goods traded by business segment

Dairy Products: Dairy products (cheese, butter, milk powder, etc.); margarine Nutrition business (functional food products, infant formula, etc.), etc.

Beverage and Dessert: Beverages (milk drinks, fruit juice beverages, etc.); yogurts; desserts; fresh cream, etc.

Feedstuffs and Seed: Cattle feed; pasture forage and crop seed; vegetable seeds; landscaping, etc.

Other: Joint distribution center services; real estate leasing, etc.

2. The net sales for each segment list the figures for external customers.

Note that figures for external customers are also used in the year-on-year comparisons.

3. Subsidiaries and other include the sales by subsidiaries and the total effects from accounting for consolidation (intercompany elimination, etc.).

Feedstuffs and Seed are on a consolidated basis (after intercompany elimination, etc.).

Nutrition Business of Dairy Products	(Unit: 100 million yen) (Amounts rounded down to the nearest 100 million yen)
	Three months ended		Three months ended	Net change
	June 30, 2019	June 30, 2020
						Year-on-
	Result	Result	Amount	year
	change
						(%)
Functional food products	12		14		1	13.6
Powdered milk and other	34		31		(3)	(8.9)
Total on a consolidated basis	47		46		(1)	(2.8)

(Note) These figures are on a consolidated basis (after intercompany elimination, etc.)

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4. Causes of Net Changes in Consolidated Operating Profit

Three months ended June 30, 2019

5.0 billion yen

+600 million yen - Decrease in advertising and promotional costs +500 million yen - Decrease in fixed costs

+100 million yen - Changes in sales unit prices

+100 million yen - Decrease in raw materials costs

-500 million yen - Increase in operating costs

-300 million yen - Changes in product composition

-200 million yen - Decrease in profit caused by decrease in sales volumes -300 million yen - Other

5.0 billion yen

Three months ended June 30, 2020

Details of Consolidated Operating Profit by Segment

(Unit: 100 million yen) (Amounts rounded down to the nearest 100 million yen)

	Factors behind changes	Total	Dairy	Beverage	Feedstuffs	Other
	products	and dessert	and seed
	Changes in sales unit prices	1	(1)	3	0	(1)
	Decrease in profit caused by	(2)	7	(8)	(1)	0
	decrease in sales volume
Marginal	Changes in product composition	(3)	(1)	(2)	0	0
profit	Decrease in raw materials costs	1	1	0	0	0
	Increase in operating costs	(5)	0	(5)	0	0
	Other	(3)	(3)	0	0	0
	Subtotal	(11)	3	(12)	(1)	(1)
Fixed	Decrease in advertising and	6	(1)	7	0	0
cost	promotional costs
and	Decrease in fixed costs	5	2	0	1	1
others	Subtotal	11	1	7	1	1
Total		(0)	4	(5)	0	0

4

5. Quarterly Consolidated Balance Sheets (Unit: 100 million yen) (Amounts rounded down to the nearest 100 million yen)

	Year ended	Three months	Amount
	March 31,	ended	of net
	2020	June 30, 2020	change
(Current assets)	1,511	1,586	74
Cash and deposits	155	181	25
Receivables	718	756	37
Inventory assets	589	605	15
Other	47	43	(4)
(Non-current assets)	2,192	2,252	59
Property, plant and equipment	1,710	1,756	46
Intangible assets	37	35	(1)
Investment securities	348	361	13
Deferred tax assets	30	29	(0)
Other	66	68	2
Total assets	3,704	3,838	133

	Year ended	Three months	Amount
	March 31,	ended	of net
	2020	June 30, 2020	change
(Current liabilities)	1,203	1,220	16
Payables	607	620	12
Short-term loans payable	181	181	(0)
Other	413	418	4
(Non-current liabilities)	720	827	106
Bonds payable	100	100	－
Long-term loans payable	351	449	97
Net defined benefit liabilities	100	101	1
Other	168	176	7
Total liabilities	1,923	2,047	123
Shareholders' equity	1,751	1,761	10
Non-controlling interests	29	29	(0)
Total net assets	1,780	1,791	10
Total liabilities/net assets	3,704	3,838	133

6. Quarterly Consolidated Statements of Cash Flows

	(Unit: 100 million yen) (Amounts rounded down to the nearest 100 million yen)
	Three months ended	Three months ended	Amount of
	June 30, 2019	June 30, 2020
	net change
	Result	Result
Ⅰ Cash flows from operating activities	86	20	(65)
Ⅱ Cash flows from investing activities	(35)	(62)	(27)
Ⅲ Cash flows from financing activities	(32)	68	101
Ⅳ Effect of exchange rate on cash and	0	(1)	(1)
cash equivalents
Ⅴ Net increase (decrease) in cash and	18	25	7
cash equivalents
Ⅵ Cash and cash equivalents at	143	155	12
beginning of period
Ⅶ Increase in cash and cash
equivalents from newly	1	－	(1)
consolidated subsidiaries
Ⅷ Cash and cash equivalents at end of	162	181	18
period
(Ref.) Free cash flow (I + II)	50	(41)	(92)

5

〈Consolidated Financial Forecast〉 (There are no revisions from the latest earnings forecasts released on May 13, 2020)

1. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2021

(Unit: 100 million yen) (Amounts rounded down to the nearest 100 million yen)

					Year Ending March 31, 2021
				April 1, 2020	April 1, 2020
				-September 30, 2020	-March 31, 2021
						Year-on-			Year-on-
				Forecast			year	Forecast			year
						change		change
						(%)			(%)
		Net sales	3,120		0.1	6,200		1.1
		Operating profit	94		(11.6)	190		5.6
		Ordinary profit	102		(13.1)	205		4.2
		Profit attributable to owners of parent	64		(16.9)	130		6.9
2. Consolidated Sales by Product of Each Segment and Operating Profit by Segment
				(Unit: 100 million yen) (Amounts rounded down to the nearest 100 million yen)
					Year Ending March 31, 2021
				April 1, 2020	April 1, 2020
				-September 30, 2020	-March 31, 2021
							Year-on-				Year-on-
				Forecast		year	Forecast		year
					change		change
							(%)				(%)
	[Net sales]
			Butter	108		3.1	234		2.8
			Margarine	59		(0.4)	119		(0.4)
			Cheese	378		2.4	777		4.1
			Other	146		(4.6)	304		(0.4)
			Subsidiaries and other	538		0.9	1,133		4.0
		Dairy Products	1,230		0.8	2,570		3.2
			Milk and milk-based beverages	435		(1.3)	840		(1.7)
			Other beverages	214		(2.7)	397		(1.8)
			Yogurt	314		2.8	617		3.5
			Desserts and fresh cream	123		1.4	245		0.5
			Other	18		(0.0)	38		0.7
			Subsidiaries and other	363		(0.4)	690		(1.4)
		Beverage and Dessert	1,470		(0.2)	2,830		(0.3)
			Feedstuffs	168		(4.4)	335		(1.6)
			Seed products	61		(1.6)	94		(1.6)
		Feedstuffs and Seed	230		(3.7)	430		(1.6)
		Other	190		2.9	370		0.9
		Total	3,120		0.1	6,200		1.1
	[Operating profit]
		Dairy Products	50		(4.0)	121		4.7
		Beverage and Dessert	30		(15.7)	51		(2.5)
		Feedstuffs and Seed	11		(3.6)	9		(13.2)
		Other	3		(57.7)	9		428.1
		Total	94		(11.6)	190		5.6

(Notes) 1. The net sales for each segment list the figures for external customers.

Note that figures for external customers are also used in the year-on-year comparisons.

2. Subsidiaries and other include the sales by subsidiaries and the total effects from accounting for consolidation (intercompany elimination, etc.).

Feedstuffs and Seed are on a consolidated basis (after intercompany elimination, etc.).

6

Nutrition Business of Dairy Products	(Unit: 100 million yen) (Amounts rounded down to the nearest 100 million yen)
		Year Ending March 31, 2021
	April 1, 2020	April 1, 2020
	-September 30, 2020	-March 31, 2021
		Year-on-		Year-on-
	Forecast	year	Forecast	year
	change	change
		(%)		(%)
Functional food products	29	10.6	60	9.5
Powdered milk and other	62	(11.4)	130	0.3
Total on a consolidated basis	91	(5.4)	190	3.0

(Note) These figures are on a consolidated basis (after intercompany elimination, etc.)

7

〈Other〉

1. Non-consolidatedNet Sales by Business Segment

		(Unit: 100 million yen) (Amounts rounded down to the nearest 100 million yen)
		Three months ended	Three months ended
		June 30, 2019	June 30, 2020	Amount of
			Year-on-		Year-on-
		Result	year	Result	year	net change
		change	change
			(%)		(%)
Dairy Products		352	0.1	362	3.0	10
Butter		53	1.5	57	6.5	3
Margarine		31	(3.0)	33	6.5	2
Cheese		191	1.5	193	0.8	1
Beverage and Dessert		550	(0.4)	521	(5.2)	(28)
Milk and milk-based beverages	219	1.0	205	(6.5)	(14)
Other beverages		105	(6.3)	97	(7.6)	(8)
Yogurt		155	1.3	150	(3.5)	(5)
Desserts and fresh cream		60	(1.9)	62	2.9	1
Other		4	4.6	5	5.1	0
Total		907	(0.2)	889	(2.0)	(17)
(For reference) Market share (of household consumption) for the first three months of the
fiscal year ending March 31, 2021
Source: SCI (up to 79 years old), in value terms
Butter:	29.3%
Margarine:	35.6%
Cheese:	15.7%
Milk:	6.1%
Milk beverage:	18.1%
Yogurt:	10.6%
Chilled desserts:	12.4%

8