Nippn : Consolidated Financial Results for FY2022 and Forecast for FY2023 536 KB

Consolidated Financial Results for FY2022 and Forecast for FY2023 [J-GAAP]

				May 13, 2022
Listed company name:	NIPPN CORPORATION
Listing:	The Prime Market of Tokyo Stock Exchange
Code number: 2001	URL:	https://www.nippn.co.jp/	TEL:	03-3511-5307
Representative:	Toshiya Maezuru, President and Chief Operating Officer
Contact:	Koichiro Fukuyama, General Manager of Corporate Communications Group

Date of the general meeting of shareholders:	June 29, 2022
Payment date of cash dividends:	June 30, 2022
Filing date of financial statements:	June 29, 2022
Supplementary materials prepared:	Yes
Results information meeting held:	Yes
	*Amounts less than one million yen have been rounded down.

1. Consolidated financial results for the year ended March 31, 2022 (From April 1, 2021 to March 31, 2022)

(1) Consolidated operating results

(Millions of yen, percentage figures show the rates of change from the previous year.)

	Net Sales		Operating Income		Ordinary Income	Profit Attributable to
				Owners of Parent
FY2022	321,317	11.4%	11,282		8.8%		14,270		12.7%		9,327	8.0%
FY2021	288,324		-%	10,370		-%		12,659		-%		8,636	-%
(Note) Comprehensive income:	FY2022: ¥12,514 million (-6.1%)	FY2021: ¥13,322 million (-%)
	Profit per Share	Fully Diluted Profit	ROE (%)		Ordinary Income to	Operating Income to
	(Yen)		per Share (Yen)			Total Assets (%)	Net Sales (%)
FY2022		121.59		106.02			5.5				4.5		3.5
FY2021		112.62		98.25			5.4				4.2		3.6
(Reference) Equity in earnings of affiliated companies: FY2022: ¥237 million	FY2021: ¥200 million

(Note) The figures for FY2021 presented are the figures after retrospective application of changes in accounting policies. The rate of change from the previous year is not presented for FY2021 because of the retrospective application.

(2) Consolidated financial position

						(Millions of yen)
		Total Assets	Net Assets	Equity Ratio		Net Assets per Share
		(%)		(Yen)
FY2022		325,869	178,697	53.4		2,268.30
FY2021		307,813	169,063	53.3		2,141.16
(Reference) Equity capital:	FY2022: ¥174,120 million	FY2021: ¥164,209 million

(Note) The figures for FY2021 presented are the figures after retrospective application of changes in accounting policies.

(3) Consolidated cash flows

(Millions of yen)

	Cash Flows from	Cash Flows from	Cash Flows from	Cash and Cash
	Equivalents at the End of
	Operating Activities	Investing Activities	Financing Activities
	the Year
FY2022	11,975	(10,103)	(4,278)	31,215
FY2021	14,804	(12,585)	2,553	35,320

2. Dividends

		Dividends per Share			Total Amount	Dividend	Dividends on
			(Yen)				of Cash	Payout Ratio	Net Assets
	1Q-end	2Q-end	3Q-end	Year-end	Full Year		Dividends	(Consolidated)	(Consolidated)
		(Millions of yen)	(%)	(%)
FY2021	―	17.00	―	19.00	36.00	2,767	32.0	1.7
FY2022	―	18.00	―	20.00	38.00	2,923	31.3	1.7
FY2023 (Forecast)	―	19.00	―	19.00	38.00			35.1

(Note) Breakdown of year-end dividends for FY2021: Ordinary dividend of ¥17.00 and commemorative dividend of ¥2.00 (commemorating change of the company name)

3. Forecast of consolidated business results for FY2023 (From April 1, 2022 to March 31, 2023)

(Millions of yen, percentage figures show the rate of changes from the same period of the previous year.)

	Net Sales	Operating Income	Ordinary Income	Profit Attributable to	Profit per Share
	Owners of Parent	(Yen)
Half Year	173,000	9.8%	4,600	(21.6)%	5,700	(22.6)%	3,900	(25.5)%	50.81
Full Year	355,000	10.5%	10,100	(10.5)%	12,200	(14.5)%	8,300	(11.0)%	108.13

* Notes

1. Significant changes in subsidiaries during the term (changes in specified subsidiaries in accordance with changes in the scope of consolidation): None
2. Changes in accounting policies, accounting estimates and retrospective restatements

1)	Changes in accounting policies due to revisions of accounting standards:	Yes
2)	Changes other than 1):	None
3)	Change in accounting estimates:	None
4)	Retrospective restatements:	None

(3) Number of shares issued and outstanding (common stock)

1. Number of shares outstanding at the end of each period (including treasury shares):
2. Number of treasury shares at the end of each period:
3. Average number of shares:

FY2022	78,824,009 shares	FY2021	78,824,009 shares
FY2022	2,021,404 shares	FY2021	2,093,223 shares
FY2022	76,712,872 shares	FY2021	76,680,700 shares

• These consolidated financial results are outside the scope of audit.
• Explanation regarding the appropriate use of projected financial results and other special instructions
  Descriptions regarding the future, including the financial outlook contained in this material, are based on certain information currently available to the Company and particular assumptions, which are, at the discretion of the Company, deemed reasonable, and actual financial results may significantly vary due to various factors. Please refer to "1. Overview of Financial Results (1) Overview of business results for the fiscal year under review 2) Future outlook" on page 4 for information on preconditions underlying the above outlook and other related information.

NIPPN CORPORATION (2001) Consolidated Financial Results for FY2022

Contents
1. Overview of Financial Results ......................................................................................................................	2
(1)	Overview of business results for the fiscal year under review ...............................................................	2
(2)	Overview of financial position for the fiscal year under review ............................................................	5
(3)	Basic policy on profit distribution and dividends for the year ended March 31, 2022 and the year
	ending March 31, 2023 ...........................................................................................................................	7
2. Basic Approach to the Selection of Accounting Standards...........................................................................	7
3. Consolidated Financial Statements...............................................................................................................	8
(1)	Consolidated balance sheets ...................................................................................................................	8
(2)	Consolidated statements of income and comprehensive income..........................................................	10
	(Consolidated statements of income)....................................................................................................	10
	(Consolidated statements of comprehensive income) ..........................................................................	12
(3)	Consolidated statements of changes in net assets.................................................................................	13
(4)	Consolidated statements of cash flows .................................................................................................	15
(Segment information, etc.) ........................................................................................................................	17
(Revenue recognition) ................................................................................................................................	18
(Per share information)...............................................................................................................................	19
(Important subsequent events)....................................................................................................................	19

1

NIPPN CORPORATION (2001) Consolidated Financial Results for FY2022

1. Overview of Financial Results

1. Overview of business results for the fiscal year under review
2. 1. Business results for the fiscal year under review

				(Millions of yen)
	Fiscal 2021	Fiscal 2022	Difference	Change
Net sales	288,324	321,317	32,993	111.4%
Operating income	10,370	11,282	911	108.8%
Ordinary income	12,659	14,270	1,611	112.7%
Profit attributable	8,636	9,327	691	108.0%
to owners of parent

During the fiscal year ended March 31, 2022, amid the ongoing COVID-19 pandemic, the rising vaccination rate helped economic activity in Japan start returning to normal. However, the emergence of a new variant of the COVID-19 virus caused a resurgence of infection. As a result, prospects for the Japanese economy have remained uncertain.

In the food industry, the spread of COVID-19 brought about significant changes in consumer behavior, such as growth of delivery services and an increase in eating at home, and an increase in demand for products for consumption at home. Moreover, the impact of soaring prices of raw materials is a concern.

The Group is reinforcing the existing business by reducing costs and strengthening sales while, at the same time, vigorously investing in promising fields to strengthen the business foundation based on a flexible approach in an unprecedented business environment.

In February 2022, the Company announced its plan to construct a new flour mill on the site in Chita City, Aichi Prefecture. The plan also calls for expansion of facilities of the Kobe-Konan Mill in the ongoing reorganization of the production structure. This reorganization will increase the Company's ratio of waterfront milling from 83% to 95%. The Company aims to realize a state-of-the-art flour mill that will be resilient to natural disasters and take the Sustainable Development Goals (SDGs) into consideration, including through energy saving and environmental friendliness, while enhancing the new mill's productivity by combining the latest automation technology with the Company's accumulated technological expertise.

In our environmental protection efforts, we have gradually changed the best-before date labeling of pasta for home use to "year and month" labeling to contribute to the reduction of food loss. Other initiatives include the use of paper trays made from environmentally friendly raw materials, such as PEFC-certified paper (indicating that the product is derived from timber sourced from sustainably managed forests), and ecо paper trays made from unbleached wood pulp for frozen foods for home use, as well as switching of the packaging of some home-use wheat flour to paper.

The system failure brought about by the cyberattack in July 2021 caused great inconvenience to our stakeholders. To prevent a recurrence, we have strengthened our information security measures and completed the restoration of our main mission-critical systems in January 2022.

Although the Group recorded expenses related to the system failure as an extraordinary loss, net sales and profits were both higher than the levels for the previous year, because the frozen food category's brisk performance continued owing to increasing demand for products for consumption at home and a recovery in demand for food in the professional-use category and for ready-made meals that exceeded expectations following sluggishness in 2020. Consolidated net sales for the fiscal year under review increased by 11.4% year on year to ¥321,317 million, operating income increased by 8.8% to ¥11,282 million, ordinary income increased by 12.7% to ¥14,270 million, and profit attributable to owners of parent increased by 8.0% to ¥9,327 million.

2

NIPPN CORPORATION (2001) Consolidated Financial Results for FY2022

The performance of individual business segments was as follows.

Flour Milling

				(Millions of yen)
	Fiscal 2021	Fiscal 2022	Difference	Change
Net sales	92,595	96,934	4,339	104.7%
Operating income	5,133	6,211	1,078	121.0%

The Group is strengthening quality control in response to the growing preoccupation with the safety and security of food throughout society. At the same time, the Group promoted sales initiatives with a view to resolving the issues that concern customers in order to meet diverse customer needs, utilizing technologies cultivated for many years.

Despite operating in an environment in which the impact of COVID-19 was expanding, we strove to strengthen initiatives in partnership with customers, and enhance sales capabilities and brand power, and promoted sales activities.

As a result, sales of wheat flour and sales of wheat bran, a by-product, were higher than the levels for the previous year.

In line with the increase of government sales prices (tax inclusive) of imported wheat by 5.5% on average for the five key products in April 2021 and by 19.0% in October 2021, we revised the prices of our products in June 2021 and December 2021, respectively.

As a result, net sales for the Flour Milling segment increased by 4.7% year on year to ¥96,934 million, and operating income increased by 21.0% to ¥6,211 million.

Food

				(Millions of yen)
	Fiscal 2021	Fiscal 2022	Difference	Change
Net sales	160,751	185,911	25,160	115.7%
Operating income	4,272	4,068	(203)	95.2%

In the professional-use category, demand showed a tendency to recover compared with the previous year and sales of products in this category were higher than the level for the previous year despite a significant impact, mainly on the restaurant sector, of the government's request for large-scale commercial facilities to suspend operations and for restaurants to suspend operations or reduce opening hours, following the declarations of a state of emergency.

On the other hand, in the home-use product category, sales were lower than the level for the previous year because of a dip in demand following surging demand in the previous year for products for consumption at home because people refrained from going out.

In the frozen foods category, sales were far higher than the level for the previous year. In addition to solid demand for frozen pasta, demand for the One Plate Meal series of complete meals consisting of a main dish and staples and demand for the Imadoki Gohan series of rice dishes, which allow consumers to have trendy rice dishes easily at home, were brisk. These results not only reflected continued high demand for products for consumption at home but also the fact that the COVID-19 pandemic prompted more consumers to pursue ease and convenience in meals. Vigorous advertising and sales promotion, including airing of TV commercials, also contributed to the results.

In the ready-made meals business, despite the COVID-19 pandemic's adverse impact on demand, it showed a tendency to recover compared with the previous year and sales were higher than the level for the previous year.

As a result, net sales of the Food segment increased by 15.7% year on year to ¥185,911 million, while operating income decreased by 4.8% to ¥4,068 million.

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