Nippon Sanso : Consolidated Financial Results for the First Quarter of Fiscal Year Ending March 31, 2023 (Based on IFRS)

Consolidated Financial Results

for the First Quarter of Fiscal Year Ending March 31, 2023

	(Based on IFRS)
	July 29, 2022
	Stock exchange listing: Tokyo (Prime)
Company name:	Nippon Sanso Holdings Corporation
TSE Code:	4091 URL: https://www.nipponsanso-hd.co.jp
Representative:	Toshihiko Hamada, Representative Director, President CEO
Inquiries:	Keita Kajiyama, General Manager, Investor Relations
Tel.:	[phone]

Scheduled date to file Securities Report: August 8, 2022

Scheduled date to commence dividend payments: -

Supplementary materials on quarterly financial results: Yes

Quarterly results explanatory meeting: Yes (For institutional investors and analysts)

(Amounts less than ¥1 million are omitted)

1. Financial results for Q1 FYE2023 (April 1, 2022 - June 30, 2022)

(1) Operating results

(Percentages indicate year-on-year change)

					Core operating						Net income	Total
	Revenue		Operating income	Net income	attributable to	comprehensive
		income
											owners of the parent	income
	(¥ million)		%	(¥ million)		%	(¥ million)		%	(¥ million)	%	(¥ million)	%	(¥ million)		%
Q1	276,006		26.4	30,274		23.2	27,472		11.8	17,959	9.5	17,285	7.6	62,653		207.3
FYE2023
Q1	218,303		18.3	24,572		74.6	24,572		74.6	16,403	115.0	16,062	116.0	20,387		14.3
FYE2022
(Reference) Income before income taxes
	Q1 FYE2023: ¥25,540 million [15.0%]
	Q1 FYE2022: ¥22,202million [93.1%]
	Core operating income is calculated as operating income excluding certain gains and losses attributable to
	non-recurring factors (non-recurring items).
				Basic earnings		Diluted net income
				per share (Yen)		per share (Yen)
Q1					39.95			-
FYE2023
Q1					37.12			-
FYE2022

(2) Financial position

	Total assets	Total equity	Equity attributable to owners	Equity attributable to owners
	(¥ million)	(¥ million)	of the parent (¥ million)	of the parent ratio (%)
FYE2023	2,082,539	715,123	681,748	32.7
(June 30, 2022)
FYE2022	1,977,026	661,137	628,714	31.8
(March 31, 2022)

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2. Dividends

			Annual Dividend
	End of 1st quarter	End of 2nd quarter	End of 3rd quarter	Term	Total
				end
	(Yen)	(Yen)	(Yen)	(Yen)	(Yen)
FYE2022	-	16.00	-	18.00	34.00
FYE2023	-
FYE2023 (est.)		18.00	-	18.00	36.00

Note: No revisions have been made to recently announced forecasts.

3. Forecasts for business operations for FYE2023 full term (April 1, 2022 - March 31, 2023)

(Percentages indicate year-on-year change)

				Core operating					Net income		Basic
	Revenue		Operating income	Net income	attributable to owners	earnings
		income
									of the parent		per share
	(¥ million)		%	(¥ million)		%	(¥ million)	%	(¥ million)	%	(¥ million)		%	(Yen)
Full term	950,000		(0.7)	107,000		4.2	105,000	3.8	67,000	0.5	65,000		1.4	150.18

Note: Revisions have been made to recently announced forecasts: Yes (Reference) Income before income taxes

FYE2023 full term: ¥94,500 million [3.2%]

• Notes

1. Changes in significant subsidiaries during the period: None
   (Transfer of specified subsidiaries resulting in changes in the scope of consolidation)
2. Changes in accounting policies, changes in financial forecasts

1. Changes in accounting policies required by IFRS: None
2. Changes in accounting policies other than 1.: None
3. Changes in accounting estimates: None

1. Number of outstanding shares (common shares)

1.	Number of outstanding shares at the end of	As of	433,092,837	As of	433,092,837
	the period (including treasury stock)	Jun.30, 2022	shares	Mar. 31, 2022	shares
2.	Number of treasury stocks at the end of the	As of	230,555	As of	344,870
	period	Jun.30, 2022	shares	Mar. 31, 2022	shares
3.	Average number of shares during the period	Jun.30, 2022	432,702,592	Jun.30, 2021	432,750,371
shares	shares

• Financial reports are out of the scope of audit by certified public accountants or audit corporations.
• Explanation on the appropriate use of the forecasts of financial results and other comments
  The forward-looking statements such as the forecasts of financial result stated in this document are based on the information currently available on the Company and certain assumptions that the Company judges as rational. The Company is under no obligation to guarantee their achievement. Actual financial results may vary significantly due to various reasons. For details on the assumptions of the forecasts and related matters, please see page 5, "(3) Explanation Concerning Predictive Information Such as Forecasts for Business Operations" in "1. General Information Relating to Q1 Results."

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○ Contents
1. General Information Relating to Q1 Results ........................................................................................................................	4
(1)	Explanation Concerning Business Results ......................................................................................................................	4
(2)	Explanation Concerning Financial Position ....................................................................................................................	5
(3) Explanation Concerning Predictive Information Such as Forecasts for Business Operations .........................................	5
2. Condensed Consolidated Financial Statements and Main Notes ..........................................................................................	6
(1)	Condensed Consolidated Statement of Financial Position ..............................................................................................	6
(2)	Condensed Consolidated Statement of Profit or Loss and Condensed Consolidated Statement of Comprehensive
		8
	Income ............................................................................................................................................................................
(3)	Condensed Consolidated Statement of Changes in Equity .............................................................................................	10
(4)	Condensed Consolidated Statement of Cash Flows ........................................................................................................	12
(5)	Notes to the Condensed Consolidated Financial Statements...........................................................................................	13
	(Note regarding going concern assumption) .................................................................................................................	13
	(Segment information)..................................................................................................................................................	13

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1. General Information Relating to Q1 Results

1. Explanation Concerning Business Results (General overview)
   In the business environment surrounding the Nippon Sanso Holdings Group (NSHD Group) in the first quarter of the fiscal year under review (from April 1, 2022 to June 30, 2022), although there were differences in market conditions within each region, overall market conditions remained stable. As a result, shipment volumes of air separation gases (oxygen, nitrogen, and argon) were on par with those a year earlier. Higher prices such as for electricity, crude oil, and liquefied natural gas as well as supply chain disruptions continued to drive up costs. However, we responded in each segment by revising selling prices and making efforts to reduce costs and overhead expenses.

Against this backdrop, the NSHD Group achieved the following results for the first quarter of the fiscal year under review. Revenue on a consolidated basis increased 26.4% year-on-year to ¥276,006 million, core operating income increased 23.2% to ¥30,274 million, operating income increased 11.8% to ¥27,472 million, and net income attributable to owners of the parent increased 7.6% to ¥17,285 million.

As for the impact of foreign exchange rates year-on-year, the Yen depreciated against the USD from ¥109.76 to ¥131.25 (+¥21.49, or +19.6%), against the Euro from ¥132.44 to ¥138.75 (+¥6.31, or +4.8%), and against the AUD from ¥84.15 to ¥92.52 (+¥8.37, or +9.9%). As a result, overall revenue and core operating income were favorably impacted by approximately ¥16.3 billion and ¥2.1 billion respectively.

Core operating income is calculated by excluding from operating income certain gains and losses attributable to non- recurring factors such as losses arising from business withdrawal or downsizing.

(Overview of business performance by reportable segment)

A breakdown of business performance by reportable segment is as follows. Segment income represents core operating income.

• Gas Business in Japan

In the industrial gas-related business, revenue from air separation gases, a core product, increased sharply year-on-year, mainly due to the effect of price pass-through and price revision based on existing contracts, despite a decrease in shipment volume. In addition, LP gas revenue increased, despite a decline in shipment volume, as unit sales prices rose in conjunction with a significant increase in purchase prices. In equipment and installation, industrial gas-related revenue was on par with that of a year earlier. In the electronics-related business, the revenue from electronic material gases and related equipment and installation increased.

As a result, in the Gas Business in Japan, revenue increased 14.5% year-on-year to ¥95,150 million, and segment income decreased 7.6% to ¥6,011 million.

• Gas Business in the United States

In the industrial gas-related business, revenue from air separation gases, a core product, increased. In addition, revenue from carbon dioxide gases was strong. In equipment and installation, revenue from welding and cutting equipment increased sharply. Furthermore, revenue from sales in the electronics sector increased in both gas and equipment and installation. The increase in revenues was due to the progress of price pass-through against the backdrop of rising costs.

As a result, in the Gas Business in the United States, revenue increased 33.4% year-on-year to ¥68,891 million, and segment income increased 32.4% to ¥9,325 million. Moreover, revenue and segment income were favorably impacted by the depreciation of the Yen.

• Gas Business in Europe

In the industrial gas-related business, revenue from air separation gases, a core product, increased sharply year-on-year

due to the effect of price revision, and a slight increase in shipment volume. In equipment and installation, the revenue from gas-related equipment increased substantially, but welding and cutting equipment revenue decreased. Another factor contributing to the increase in revenues was the progress made in price pass-through and cost recovery in response to the steep rise in energy costs that began in the second quarter of the previous fiscal year.

As a result, in the Gas Business in Europe, revenue increased 36.8% year-on-year to ¥64,976 million, and segment income increased 32.8% to ¥8,816 million. Moreover, revenue and segment income were favorably impacted by the depreciation of the Yen.

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• Gas Business in Asia & Oceania

In the industrial gas-related business, air separation gas revenue, a core product, increased due to a steady increase in production activity in related industries. In LP gas, a large portion of whose sales are in the Australia region, revenue increased due to steady volume as well as pass through from purchase prices to selling prices. Revenue from equipment and installation increased mainly in Singapore and Australia. In the electronics-related business, revenue from electronic material gases increased significantly in East Asia, while equipment and construction increased in Taiwan.

As a result, in the Gas Business in Asia & Oceania, revenue increased 34.2% year-on-year to ¥39,286 million, and segment income increased 52.0% to ¥4,615 million. Moreover, revenue and segment income were favorably impacted by the depreciation of the Yen.

• Thermos Business

In Japan, strong sales during the new school season without COVID-19 related restrictions on activities as well as a short rainy season and rising temperatures led to a recovery in shipment volumes of portable mugs and sports bottles from the previous fiscal year, resulting in a significant increase in revenue year-on-year. Furthermore, the revenue from frying pans continued to be strong from the previous year, in connection with the widespread adoption of new lifestyles where consumers spend longer periods at home. Overseas, shipping volume increased due to the recovery of business conditions in various regions.

As a result, the Thermos Business revenue increased 13.9% year-on-year to ¥7,679 million, and segment income increased 30.7% to ¥1,961 million.

(2) Explanation Concerning Financial Position

Total assets amounted to ¥2,082,539 million as of June 30, 2022, an increase of ¥105,513 million from March 31, 2022. The impact of foreign exchange rates resulted in an increase in total assets of approximately ¥105.0 billion. This mainly reflected foreign exchange rate changes, such as the Yen depreciation of ¥14.29 against the USD and that of ¥5.97 against EUR as of June 30, 2022, compared with the rates as of March 31, 2022.

[Assets]

Total current assets amounted to ¥447,552 million as of June 30, 2022, an increase of ¥25,058 million from March 31, 2022, mainly reflecting increases in inventories and trade receivables.

Total non-current assets were ¥1,634,987 million, an increase of ¥80,454 million from March 31, 2022, mainly reflecting increases in property, plant and equipment and goodwill.

[Liabilities]

Total current liabilities were ¥370,682 million, an increase of ¥39,086 million from March 31, 2022, mainly due to increases in bonds and borrowings and other financial liabilities.

Total non-current liabilities were ¥996,734 million, an increase of ¥12,441 million from March 31, 2022, mainly due to an increase in deferred tax liabilities and other financial liabilities.

[Equity]

Total equity amounted to ¥715,123 million, an increase of ¥53,985 million from March 31, 2022. The main factors were an increase in exchange differences on translation of foreign operations and quarterly income attributable to owners of the parent. The equity attributable to owners of the parent ratio stood at 32.7%, up 0.9 percentage points from the previous fiscal year-end.

(Cash flow analysis)

[Cash flow from operating activities]

Net cash provided by operating activities increased 28.0% year-on-year to ¥31,801 million. The main components were profit before income taxes, depreciation and amortization, and income taxes paid (refund).

[Cash flow from investing activities]

Net cash used in investing activities increased 18.9% year-on-year to ¥19,897 million. The primary use of cash was for purchasing of property, plant and equipment.

[Cash flow from financing activities]

Net cash used in financing activities increased 11.4% year-on-year to ¥16,876 million. The main components were repayment of long-term borrowings, a net increase (decrease) in short-term borrowings, and dividends paid.

As a result of the Company's operating, investing, and financing activities, the balance of cash and cash equivalents as of June 30, 2022, after considering the effects of exchange rate changes, was ¥90,537 million.

(3) Explanation Concerning Predictive Information Such as Forecasts for Business Operations

The Company has revised its forecasts for business operations for the full term of the fiscal year ending March 31, 2023. For details, please refer to the "Notice Regarding Earnings Forecast Revisions" released today (July 29, 2022).

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