Nissin Foods : Financial Results for FY 3/2022 3Q

Financial Results for FY 3/2022 3Q

Announced on February 3, 2022

NISSIN FOODS HOLDINGS CO., LTD.

(TSE Stock Code: 2897)

Financial Results Presentation: February 4, 2022

Management Policy for FY 3/2022

Reboot and Make a Fresh Start

In the first year of our new management plan, we will sprint ahead with three growth strategies, as well as organizational and human resource reforms

Domestic Existing Businesses

• Instant Noodles Business: Reform our supply chain structure, create new categories and channels, and transition to a new sales approach
• Non-InstantNoodles Business: Accelerate group synergies in both supply and demand (mainly in the confectionery business) to build a foundation for growth and improved profitability

Overseas Existing Businesses

• Accelerate deeper global branding, which has already begun to produce results. Further solidify competitive advantage as a growth driver
• Pursue steady progress in multi-category and multi-area strategies to leverage business in China and Brazil

New Businesses

• Launch businesses with a sense of urgency to gain recognition towards wider acceptance of complete nutritional foods
• Launch businesses across five touch points and conduct proof-of-concept tests:
• 1. subscription home delivery service (DC2: intensive program), (2) corporate cafeterias, (3) seniors, (4) retail sales, and
  1. smart cities

Group Overall

• Leverage the lessons of COVID-19 to transition both work styles and business structures to a new normal through the maximum use of digital technologies
• Respond accurately to consumer behavior and awareness to turn increased demand under the COVID-19 pandemic into sustainable growth drivers

* China (Incl. H.K.) strategy and related targets, financial results forecasts are established independently by NISSIN FOODS HOLDINGS

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FY 3/2022 3Q Financial Results Highlights

FY 3/2022 3Q Results

Revenue

Core Operating Profit of

Existing Businesses

Domestic Instant Noodles Business

Domestic Non-Instant Noodles Business

Overseas Business

Summary

(Institutional accounting basis)

Institutional accounting		Management accounting	Target level
	basis				basis*1,*2	for FY 3/2022
424.8	Bil. yen	+13.6%		417.1	Bil. yen	+ 15.8%	Double Digit
43.5	Bil. yen		(5.0%)		42.9	Bil. yen	+ 16.8%	Double Digit
			(3.9%)				+ 18.5% Mid single Digit
			+6.5%				+ 26.8%	Double Digit
			(16.8%)				(3.5%)	Double Digit

• Revenue: Increased in all three businesses, even before deducting the impact of COVID-19
• Core Operating Profit of Existing Businesses: Decreased in YoY due to the effect of COVID-19 despite steady growth compared to FY 3/2020 3Q*3

(Management accounting basis) Steady progress toward Make a Fresh Start

• Revenue: Increased in all three businesses and grew by 15.8% on a consolidated basis
• Core Operating Profit of Existing Businesses: The growth rate of 16.8% on a consolidated basis YoY, exceeding the medium-tolong-term target

*1	Growth rates are calculated by converting foreign currency amounts into yen at the same rate as the previous year, in order to emphasize real fluctuation / growth on a local currency basis excluding effect of exchange rate at the
	time of consolidation.
*2	Actual YoY change / growth rate excluding the impact of foreign exchange rates and the impact of COVID-19, which had a significant impact on FY 3/2021 results (i.e. increase in demand, reduction in selling expenses, unused	2
*3	expenses, etc.).
Core operating profit of existing businesses vs. FY 3/2020 +8.3 Bil. yen (+23.5%)

Consolidated Financial Summary

• Institutional accounting basis: Increase in revenue and decrease in profits, but continued to maintain high growth compared to FY 3/2020 3Q

• Management accounting basis: Higher YoY in all categories

		Institutional accounting basis
	FY 3/2022	FY 3/2021	YoY change	FY 3/2020	vs. FY 3/2020
Bil. Yen
3Q	3Q	Amount	Ratio	3Q	CAGR
	①	②	③=①-② ④=③÷②	⑤	⑥
Revenue	424.8	373.9	+ 50.9	+ 13.6%		348.0	+ 10.5%
Core operating profit	43.5	45.8	(2.3)	(5.0%)		35.2	+ 11.1%
of existing businesses
Operating profit	42.6	50.0	(7.4)	(14.8%)		35.5	+ 9.5%
Profit attributable to owners of	30.7	36.3	(5.5)	(15.3%)		25.6	+ 9.5%
the parent
Core OP margin of existing	10.2%	12.2%	(2.0pt-)			10.1%
businesses
OP margin	10.0%	13.4%	(3.3pt-)			10.2%
Profit attributable to owners of	7.2%	9.7%	(2.5pt-)			7.4%
the parent margin

Management accounting basis

（Constant currency basis, Less COVID-19)

FY 3/2022	FY 3/2021	YoY change
3Q	3Q	Amount	Ratio
⑦=① -Fx impact	⑧＝②-C-19	⑨=⑦-⑧	⑩=⑨÷⑧
417.1	360.3	+ 56.8	+ 15.8%
42.9	36.7	+ 6.2	+ 16.8%
42.0	40.9	+ 1.1	+ 2.7%
10.3%	10.2%	+ 0.1pt
10.1%	11.4%	(1.3pt-)

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the U.S., etc.

- Increased in China (Incl. H.K.) and the Americas, etc.

- Impact of COVID-19in the previous fiscal year and increased in personnel costs, etc.

- Impact of COVID-19in the previous fiscal year and increased in raw material costs, etc.

Analysis of Core OP of Existing Businesses (YoY, Institutional accounting basis)

	Bil. yen	Major Factors: Domestic		Major Factors: Overseas
Decrease	Increase

A： Revenue

(including the impact of change in selling expense ratio)

(Domestic)

(Overseas)

+0.7	+ Increased in revenue in instant noodles
+9.0	business, etc.

• Increase in selling expense ratio, etc.

+ Increased in revenue across all regions,

etc. (Including the impact of the Americas

price revisions)

Increase/decrease of

marginal profit

Increase/decrease of

fixed expenses

B： CoGS ratio

C： Distribution cost ratio

D： Depr. & amort.

E： Ad. expenses

(Domestic)

(Overseas)

(Domestic)

(Overseas)

(Domestic)

(Overseas)

(Domestic)

(Overseas)

+0.4

(6.5)

+0.2

(1.2)

(0.6)

(0.7)

(0.4)

+0.1

• Product mix impact, etc.

• Increased due to continuous soaring raw material costs, etc.

• Distribution efficiency improvement, product mix impact, etc.

• Rising distribution costs
• Increased due to renewal of equipment, etc.
• Impact of new products in the beverages business and COVID-19 in the previous fiscal year, etc.

- Increased due to soaring raw materials

costs in the Americas, EMEA and China

(Incl. H.K.) , etc.

- Increased in distribution costs, mainly in

Others

F： G&A expenses

G： Gain (loss) on investment accounted for using the equity method

H： Impact relating to business combination

(Domestic)

(Overseas)

(Domestic)

(Overseas)

(Domestic)

(Overseas)

(0.5)

(1.4)

(0.4)

(1.4)

+0.8

- Impact of COVID-19 in the previous fiscal year, etc.

- Impact of KOIKE-YA (Equity method) (The previous fiscal year: 11 months, current fiscal year: -)

+ Impact of KOIKE-YA (Consolidated subsidiary)

(The previous fiscal year: 1 month,

current fiscal year: 9 months)

Increase/decrease	(Domestic)
in core OP of existing businesses	(Overseas)

+0.2

(2.2)

* In addition to the above, there is a year-on-year

difference in "Reconciliations" of -0.3 Bil. yen.

【Method of calculating increase/decrease factors】	①	Marginal Profit（A,B,C）	= (Revenue in the current fiscal year x Ratio of revenue in the previous fiscal year)
				- Expenses in the current fiscal year.
	②		（D,E,F）		* The analysis of marginal profit is based on the amount obtained by adding selling expenses to revenue.	4
	Fixed Costs	=	Expenses in the previous fiscal year - Expenses in the current fiscal year.
	③	Others	（G）	=	Results in the previous fiscal year - Results in the current fiscal year.
			（H）	= Changes in core operating profit of newly consolidated company for the current fiscal year.