Nippon Sanso : Consolidated Financial Results for the First Three Quarters of Fiscal Year Ending March 31, 2022 (Based on IFRS)

Consolidated Financial Results

for the First Three Quarters of Fiscal Year Ending March 31, 2022

(Based on IFRS)

		February 2, 2022
Company name:	Nippon Sanso Holdings Corporation	Stock exchange listing: Tokyo (1st section)
TSE Code:	4091 URL: https://www.nipponsanso-hd.co.jp/
Representative: Toshihiko Hamada, Representative Director, President CEO
Inquiries:	Takayoshi Umehara, General Manager, Investor Relations
Tel.:	[phone]

Scheduled date to file Quarterly Securities Report: February 9, 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 the first three quarters of FYE2022 (April 1, 2021 - December 31, 2021)

(1) Operating results

																		(Percentages indicate year-on-year change)
																			Net income	Total
				Core operating												attributable to
	Revenue	Operating income		Net income		comprehensive
		income			owners of the
																income
																			parent
	(¥ million)		%	(¥ million)	%	(¥ million)		%			(¥ million)		%		(¥ million)	%	(¥ million)		%
First three
quarters of	691,535		16.8	76,316	26.2	76,256		20.7			52,008		35.9		50,136		34.3	73,151		10.8
FYE2022
First three
quarters of	592,256		(6.5)	60,468	(11.4)	63,154		(12.2)		38,275		(10.0)		37,318		(9.8)	66,032		131.6
FYE2021
(Reference)	Income before income taxes
	First three quarters of FYE2022: ¥68,991 million [26.1%]
	First three quarters of FYE2021: ¥54,721 million [(10.2) %]
	Core operating income is calculated as operating income excluding certain gains and expenses attributable
	to non-recurring factors (non-recurring items).
			Basic earnings		Diluted net income
			per share (Yen)			per share (Yen)
First three quarters of			115.85					－
FYE2022
First three quarters of			86.24					－
FYE2021
(2) Financial position
					Total assets			Total equity		Equity attributable to		Equity attributable to
							owners of the parent		owners of the parent
						(¥ million)				(¥ million)
												(¥ million)		ratio (%)
First three quarters of FYE2022			1,880,388			602,473				570,443			30.3
(December 31, 2021)
FYE2021 (March 31, 2021)			1,836,294			543,900				513,164			27.9

2. Dividends

				Annual Dividend
	End of 1st		End of 2nd	End of 3rd		Term	Total
	quarter		quarter	quarter		end
	(Yen)		(Yen)	(Yen)		(Yen)	(Yen)
FYE2021		－	14.00	－		16.00	30.00
FYE2022		－	16.00	－
FYE2022 (est.)						16.00	32.00

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

3. Forecasts for business operations for FYE2022 full term (April 1, 2021 - March 31, 2022)

										(Percentages indicate	year-on-year change)
				Core operating			Net income	Net income	Basic
	Revenue		Operating income	attributable to owners	earnings
		income
									of the parent	per share
	(¥ million)		%	(¥ million)		%	(¥ million)	%	(¥ million)	%	(¥ million)		%	(Yen)
Full term	932,000		13.9	101,000		15.8	101,000	13.7	69,000	21.3	67,000		21.3	154.82

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

FYE2022 full term: ¥91,000 million [17.1%]

• Notes

1. Changes in significant subsidiaries during the nine months ended Dec.31, 2021: 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)	Dec.31, 2021	shares	Mar. 31, 2021	shares
2.	Number of treasury stocks at the end of the	As of	344,467	As of	342,332
	period	Dec.31, 2021	shares	Mar. 31, 2021	shares
3.	Average number of shares during the period	Nine months ended	432,749,531	Nine months ended	432,752,699
	(quarterly cumulative)	Dec.31, 2021	shares	Dec.31, 2020	shares

• Quarterly financial reports are out of the scope of quarterly review 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 results stated in this document are based on the information currently available to 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 6, "(3)
  Explanation concerning predictive information such as forecasts for business operations" in "1. General information relating to the first three quarters results."

Contents
1. General information relating to the first three quarters 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 ...........................	6
2. Condensed consolidated financial statements and main notes.................................................................................	7
(1)	Condensed Consolidated Statement of Financial Position.........................................................................	7
(2)	Condensed Consolidated Statement of Profit or Loss and Condensed Consolidated Statement of
	Comprehensive Income .........................................................................................................................	9
(3)	Condensed Consolidated Statement of Changes in Equity ......................................................................	11
(4)	Condensed Consolidated Statement of Cash Flows ................................................................................	13
(5)	Notes to the Condensed Consolidated Financial Statements ...................................................................	14
	(Note regarding going concern assumption) ...................................................................................................	14
	(Segment information) ....................................................................................................................................	14

NIPPON SANSO Holdings Corporation ( Ticker : 4091.T )

Consolidated Financial Performance for the first three quarters of FYE2022

1. General information relating to the first three quarters results

1. Explanation concerning business results General overview
   In the business environment surrounding the Nippon Sanso Holdings Group (NSHD Group) in the first three quarters of the fiscal year under review (from April 1, 2021 to December 31, 2021), the COVID-19 pandemic continued from the previous fiscal year, without any indication of when it might end. Nevertheless, the economy appeared to recover in nearly all business segments and the shipment volume of air separation gases (oxygen, nitrogen, argon) increased significantly compared to the previous fiscal year. The negative impact of the COVID-19 pandemic on the first three quarters revenue and core operating income has been less severe than the previous fiscal year. While there is a continuing impact on some business activities, the Company has maintained its reliable supply structure for air separation gases in its global geographic hubs.
   Against this backdrop, the NSHD Group achieved the following results for the first three quarters of the fiscal year under review. Revenue on a consolidated basis increased 16.8% year on year to ¥691,535 million, core operating income increased 26.2% to ¥76,316 million, operating income increased 20.7% to ¥76,256 million and net income attributable to owners of the parent increased 34.3% to ¥50,136 million.
   Core operating income is calculated as operating income excluding certain gains and expenses attributable to non-recurring factors (non-recurring items).

(Overview of business performance by reportable segment)

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

From the first quarter of the fiscal year under review, the NSHD Group has changed its reportable segments. Therefore, to facilitate the year-on-year comparisons shown below, the figures for the first three quarters of the previous fiscal year have been reclassified based on the changes to the reportable segments.

• 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 a general recovery in production activity in relevant industries. Additionally, in LP gas, revenue rose from an increase in unit sales prices due to an increase in the purchasing price, although shipment volume declined. Meanwhile, in the electronics-related business, revenue from electronic materials gases increased. In industrial gas-related equipment and installation, medical-related equipment sales performed favorably, and revenue in the electronics-related business also grew year on year.
  As a result, in the Gas Business in Japan, revenue increased 9.0% year on year to ¥266,755 million and segment income increased 15.0% to ¥22,474 million.
• Gas Business in the United States

In the industrial gas-related business, revenue from air separation gases, a core product, significantly increased year on year, driven by a recovery in production activity, with growth centered on bulk gases. In addition, sales of carbon dioxide gas were strong. In equipment and installation, demand for welding and cutting equipment recovered after weakness in the previous fiscal year, with revenue increasing sharply. In the electronics-related business, revenue also increased.

As a result, in the Gas Business in the United States, revenue increased 17.8% year on year to ¥164,236 million and segment income increased 28.5% to ¥20,439 million.

• Gas Business in Europe

In the previous fiscal year, demand dropped sharply overall in the key region of Iberia, Germany and Italy as the serious impact of COVID-19 caused a general halt in production activity there. However, from the second half of the previous fiscal year, demand in the region continued to recover, leading to an increase in sales.

As a result, in the Gas Business in Europe, revenue increased 28.7% year on year to ¥149,249 million and segment income increased 34.4% to ¥19,430 million.

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NIPPON SANSO Holdings Corporation ( Ticker : 4091.T )

Consolidated Financial Performance for the first three quarters of FYE2022

• Gas Business in Asia & Oceania
  In the industrial gas-related business, air separation gases, a core product, saw an increase in revenue driven by a recovery in production activity in related industries. In LP gas, which makes up a large portion of sales in the Australia region, revenue increased atop an increase in unit sales prices due to an increase in the purchasing price and steady shipment volume. In the electronics-related business, revenue increased in electronic materials gases in East Asia. In equipment and installation, revenue increased in the industrial gas-related business.
  As a result, in the Gas Business in Asia & Oceania, revenue increased 21.9% year on year to ¥90,782 million and segment income increased 27.2% to ¥9,734 million.

• Thermos Business
  In the Thermos Business, in Japan revenue significantly increased year on year due to a recovery in shipment volumes of portable mugs and sports bottles from the previous fiscal year. Furthermore, sales volumes of frying pans and tumblers also increased, continuing from the previous fiscal year, in connection with the widespread adoption of new lifestyles where consumer spend longer periods of time at home. Overseas, shipping volume increased due to the recovery of business conditions in various regions.
  As a result, in the Thermos Business, revenue increased 15.5% year on year to ¥20,361 million, and segment income increased 40.8% to ¥4,953 million.

1. Explanation concerning financial position
   Total assets amounted to ¥1,880,388 million as of December 31, 2021, an increase of ¥44,093 million from March 31, 2021. Due to the impact of foreign exchange rates, total assets were stated approximately ¥24.9 billion higher than they otherwise would have been reported. This mainly reflected foreign exchange rate changes such as the yen's depreciation of ¥4.31 against the U.S. dollar and the yen's depreciation of ¥0.71 against the euro as of December 31, 2021, compared with the rates as of March 31, 2021.

[Assets]

Total current assets were ¥398,272 million, an increase of ¥29,371 million from March 31, 2021. The main changes were an increase in trade receivables and a decrease in cash and cash equivalents.

Total non-current assets were ¥1,482,115 million, an increase of ¥14,722 million from March 31, 2021, mainly reflecting increases in other financial assets and plant, property and equipment.

[Liabilities]

Total current liabilities were ¥310,853 million, a decrease of ¥15,166 million from March 31, 2021. The main changes were a decrease in bonds and borrowings and an increase in trade payables.

Total non-current liabilities were ¥967,061 million, an increase of ¥686 million from March 31, 2021. The main factors were an increase in deferred tax liabilities and a decrease in bonds and borrowings.

[Equity]

Total equity amounted to ¥602,473 million, an increase of ¥58,573 million from March 31, 2021. The main factors were an increase due to the recording of profit attributable to owners of parent, a decrease due to retained earnings paid as dividends, and an increase in exchange differences on translation of foreign operations.

The equity attributable to owners of the parent ratio stood at 30.3%, up 2.4 percentage points from the previous fiscal year-end.

(Cash flow analysis)

(Cash flow from operating activities)

Net cash provided by operating activities amounted to ¥97,364 million. The main components were income before income taxes, depreciation and amortization, and an increase (decrease) in trade receivables.

(Cash flow from investing activities)

Net cash used in investing activities was ¥47,207 million. The main use of cash was for the purchase of property, plant and equipment.

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