Nisshin Seifun Group Inc. TSE:2002

Nisshin Seifun : Consolidated Financial Results for the First Quarter of Fiscal 2025 (Reviewed by independent account auditors)

Published August 19, 2024 at 5:30 a.m. UTC

Source: MarketScreener

August 7, 2024

To whom it may concern,
Company Name:	Nisshin Seifun Group Inc.
Representative:	Kenji Takihara,
	Representative Director and President
Code:	2002
	(Registered on Tokyo Stock Exchange)
Contact:	Reiko Adachi,
	Executive Officer and General Manager,
	Public Communications Department
	(General Administration Division)
	Tel.: +81-3-5282-6650

Consolidated Financial Results for the First Quarter of Fiscal 2025 [Japanese GAAP] (Reviewed by independent account auditors)

The Company released its "Consolidated Financial Results for the First Quarter of Fiscal 2025 [Japanese GAAP]" on July 31, 2024. This serves as notice that the quarterly consolidated financial statements were reviewed by independent account auditors. No changes have been made to the quarterly consolidated financial statements announced on July 31, 2024.

Disclaimer: This document is a translation of the Japanese original. The Japanese original has been disclosed in Japan in accordance

with Japanese accounting standards and the Financial Instruments and Exchange Act. This document does not contain or constitute any guarantee and the Company will not compensate any losses and/or damage stemming from actions taken based on this document. In the case that there is any discrepancy between the Japanese original and this document, the Japanese original is assumed to be correct.

Consolidated Financial Results for the First Quarter of Fiscal 2025 [Japanese GAAP]

		August 7, 2024
Listed Company Name: Nisshin Seifun Group Inc.	Registered on Tokyo Stock Exchange
Code:	2002
URL:	https://www.nisshin.com
Representative:	Kenji Takihara, Representative Director and President
Contact:	Reiko Adachi, Executive Officer and General Manager, Public Communications Department
	(General Administration Division)
	Tel.: +81-3-5282-6650	-
Date to start distributing dividends:
Supplementary materials for these consolidated financial results:	Yes
Results briefing for financial results:	None

(Figures shown are rounded down to the nearest million yen.)

1. Consolidated Financial Results for the First Quarter of Fiscal 2025 (April 1, 2024 to June 30, 2024)

Consolidated Business Results

(The percentages indicate	the rates of increase or decrease compared	with the same	period of	the previous fiscal	year.)
	Net sales		Operating profit			Ordinary profit		Profit attributable to
					owners of parent

First three months	Millions of yen		%	Millions of yen		%	Millions of yen		%		Millions of yen		%
213,874		2.7	13,220		11.5		14,516		10.8		10,845		24.0
of Fiscal 2025

First three months	208,191		10.0	11,860		33.9		13,099		32.1		8,742		38.6
of Fiscal 2024

(Note) Comprehensive income: First three months of Fiscal 2025: ¥16,740 million (down 46.7%)
	First three months of Fiscal 2024: ¥31,434 million (up 73.7%)

	Earnings per share	Fully diluted earnings
	per share

First three months			Yen			Yen
		36.46			-
of Fiscal 2025

First three months			29.40			-
of Fiscal 2024

(2) Consolidated Financial Position

	Total assets		Net assets	Equity ratio
	Millions of yen		Millions of yen	%
June 30, 2024	828,508		525,862	61.4
March 31, 2024	826,702		516,381	60.5
(Reference) Equity capital:	June 30, 2024: ¥509,053 million	March 31, 2024: ¥500,302 million

2. Dividends

					Dividend per share
		1Q End		2Q End	3Q End	Year-End	Annual
			Yen	Yen	Yen	Yen	Yen
Fiscal 2024	-	21.00	-	24.00	45.00
Fiscal 2025	-
Fiscal 2025 (forecast)			25.00	-	25.00	50.00

(Note) Revision to the latest forecast of dividends: None

3. Forecast of Consolidated Financial Results for the Year Ending March 31, 2025 (April 1, 2024 to March 31, 2025)

(The full-year percentages indicate the rates of increase or decrease compared with the previous fiscal year, the percentages for the first half are comparisons with the same period of the previous fiscal year.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings
		owners of parent	per share

	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
First half	430,000	0.7	25,500	(0.0)	26,500	(0.0)	20,000	8.4	67.24
Full year	870,000	1.4	51,000	6.7	53,000	6.0	38,000	19.7	127.76

(Note) Revision to the latest forecast of financial results: Yes

* Notes

Significant changes in the scope of consolidation during the first three months of the fiscal year ending March 31, 2025: None
Adoption of special accounting treatment for preparing quarterly consolidated financial statements: Yes

Note: For details, please refer to "2. Quarterly Consolidated Financial Statements and Related Notes (3) Notes on Quarterly Consolidated Financial Statements [Notes on Special Accounting Treatment for Preparing Quarterly Consolidated Financial Statements]" on page 10 of the Attachment.

Changes in accounting policies, changes in accounting estimates and revisions restated
1) Changes in accounting policies associated with the revisions of accounting standards, etc.: None

2) Changes in accounting policies other than the above:	None
3) Changes in accounting estimates:	None
4) Revisions restated:	None
(4) Number of shares issued and outstanding (common stock)

Number of shares issued and outstanding (including treasury shares)
Number of treasury shares
Average number of shares outstanding

As of June 30,	304,357,891	As of March 31,	304,357,891
2024	2024
As of June 30,	6,931,842	As of March 31,	6,931,745
2024	2024
First three months	297,426,100	First three months	297,379,840
of Fiscal 2025	of Fiscal 2024

Review of the attached Quarterly Consolidated Financial Statements by certified public accountants or independent account auditors: Yes (voluntary)
Statement regarding the proper use of financial forecasts and other special remarks
1. The statements contained in this document are based on various assumptions and do not constitute any guarantee or definite promise that projections of future performance or related business policies will actually be realized. For details of assumptions for financial forecasts and other related matters, please refer to "1. Qualitative Information for the Period under Review (3) Forecast of Consolidated Financial Results and Other Forward- looking Information" on page 5 of the Attachment.
2. Supplementary materials for this report can be found on the Company's website.

Contents of the Attachment
1. Overview of Business Performance, etc	2
(1)	Overview of Business Performance for the Period under Review	2
(2)	Overview of Financial Position for the Period under Review	5
(3)	Forecast of Consolidated Financial Results and Other Forward-looking Information	5
2. Quarterly Consolidated Financial Statements and Related Notes	7
(1)	Quarterly Consolidated Balance Sheets	7
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	9
	[Quarterly Consolidated Statements of Income]	9
	[Quarterly Consolidated Statements of Comprehensive Income]	10
(3)	Notes on Quarterly Consolidated Financial Statements	11
	[Notes on the Premise of a Going Concern]	11
	[Notes on a Significant Change in Shareholders' Equity]	11
	[Change in Scope of Consolidation or Scope of Application of the Equity Method]	11
	[Notes on Special Accounting Treatment for Preparing Quarterly Consolidated Financial
	Statements]	11
	[Notes on Quarterly Consolidated Statements of Cash Flows]	11
	[Notes on Segment Information, etc.]	12

1. Overview of Business Performance, etc.

Overview of Business Performance for the Period under Review [Overview of the Period under Review]

During the first three months of the fiscal year ending March 31, 2025, the Japanese economy continued to see bright spots return to the business environment surrounding the Nisshin Seifun Group, largely atop an increase in foot traffic, particularly from inbound travel to Japan. This improvement came despite a noted slowdown in recovery for individual consumption, as belt- tightening behavior intensified due to high prices for goods. This trend itself came amid higher prices for raw materials and energy alongside historically low valuation levels for the yen on foreign exchange markets.

Under these conditions, the Group strives to fulfill its corporate mission of ensuring a stable supply of foods involving wheat flour and the delivery of safe and reliable products in each business area. At the same time, in a push to achieve goals set out in "The Nisshin Seifun Group Medium- Term Management Plan 2026," set to conclude in the fiscal year ending March 31, 2027, the Group gave highest priority to efforts to stimulate its ability to grow by restructuring the business portfolio, promote measures to spur a performance recovery in the Australia flour milling business and the yeast business in India, realize tangible results from our R&D strategy, and showcase benefits from automation and labor-saving measures.

As part of efforts to stimulate the Group's ability to grow by restructuring the business portfolio, we are continuing construction at flour milling subsidiary Nisshin Flour Milling Inc. of the Mizushima Plant ahead of an operational start sometime in May 2025. This move is accompanied by the scheduled closure of the subsidiary's Okayama and Sakaide plants. Meanwhile, at U.S.-based subsidiary Miller Milling Company, LLC, expansion work continues at the Saginaw Plant, with an operational start set for early 2025. A decision was also made in May 2024 to further expand the 47,000-ton capacity raw wheat silo on the grounds of Nisshin Flour Milling's Tsurumi Plant. The Group will continue to aggressively invest for future growth going forward.

With respect to R&D, we are moving ahead with addressing the commercialization of research results. In the flour milling business, we are seeking to expand recognition of and develop the market for high-fiber wheat flour (Amuleia). We also decided to build in Yoga, a neighborhood in Tokyo's Setagaya Ward, a new development site based on an "Our 'kitchen' - where we co-create the future" concept, with construction scheduled to start in the fiscal year ending March 31, 2027. In these ways, we aim to further highlight the Group's development capabilities, while also creating Group synergies.

With respect to performance, consolidated net sales for the first three months of the fiscal year ending March 31, 2025, increased 2.7% year on year to ¥213,874 million. Factors driving growth included effects from foreign currency translation in the overseas flour milling business and sales growth in the yeast and biotechnology business. On the profit side, operating profit increased 11.5% year on year to ¥13,220 million, and ordinary profit rose 10.8% to ¥14,516 million. Growth was spurred by firm performance from the overseas flour milling and mesh cloths businesses, which came amid rising costs for raw materials, transportation, and labor in all businesses. Profit attributable to owners of parent for the period came to ¥10,845 million, up 24.0% year on year, primarily from posting of a gain on sale of investment securities.

(Year-on-year Comparison)

				(Millions of yen)

	First three months of	First three months of	Difference	Change
	Fiscal 2024	Fiscal 2025

Net sales	208,191	213,874	5,682	2.7%
Operating profit	11,860	13,220	1,359	11.5%
Ordinary profit	13,099	14,516	1,416	10.8%
Profit attributable to	8,742	10,845	2,102	24.0%
owners of parent

[Business Overview by Segment] 1) Flour Milling Segment

				(Millions of yen)

	First three months of	First three months of	Difference	Change
	Fiscal 2024	Fiscal 2025

Net sales	111,672	114,912	3,240	2.9%
Operating profit	6,870	7,733	862	12.6%

In the flour milling business in Japan, shipments were higher year on year, mainly reflecting a recovery in demand for restaurant dining due to increased foot traffic, including from inbound travel to Japan, in addition to benefits from sales expansion measures. Initiatives to expand sales for high-fiber wheat flour (Amuleia) are also gaining traction.

In July 2024, we implemented price revisions for commercial wheat flour in response to revised government prices for five classes of imported wheat. This move reflected that on average, the government's price for imported wheat declined 0.6% in April 2024, as well as rising transportation costs.

In the overseas flour milling business, sales were higher year on year, primarily due to the effects of foreign currency translation.

As a result, net sales of the Flour Milling Segment increased 2.9% year on year to ¥114,912 million. Operating profit climbed 12.6% to ¥7,733 million, lifted by firm performance from the overseas flour milling business, and despite flat performance year on year from the flour milling business in Japan.

2) Processed Food Segment

				(Millions of yen)

	First three months of	First three months of	Difference	Change
	Fiscal 2024	Fiscal 2025

Net sales	49,756	51,303	1,547	3.1%
Operating profit	2,281	2,226	(55)	(2.4)%

In the processed food business, while belt-tightening behavior among consumers in Japan continues, shipments of Ma•Ma Quick Cook Spaghetti and other pasta in household-use products held firm. Overseas, prepared mix shipments were also higher, lifting sales higher year on year.

In the yeast and biotechnology business, sales were up year on year, reflecting increased shipments of cultivation medium in the biotechnology business and higher sales volume in the yeast business in India.

In the healthcare foods business, sales were lower year on year due to lower shipments of raw materials for pharmaceuticals and consumer products.

As a result, net sales of the Processed Food Segment increased 3.1% year on year to ¥51,303 million. Operating profit, however, declined 2.4% to ¥2,226 million, attributable mainly to lower shipments in the healthcare foods business.

3) Prepared Dishes and Other Prepared Foods Segment

				(Millions of yen)

	First three months of	First three months of	Difference	Change
	Fiscal 2024	Fiscal 2025

Net sales	37,370	37,973	602	1.6%
Operating profit	1,438	1,558	120	8.4%

In the Prepared Dishes and Other Prepared Foods Segment, net sales increased 1.6% year on year to ¥37,973 million, mainly reflecting robust sales due to increased demand from inbound travel to Japan. Operating profit increased 8.4% to ¥1,558 million, largely atop sales growth and improved productivity, which offset rising costs for raw materials and labor.

4) Others Segment

				(Millions of yen)
	First three months of	First three months of	Difference	Change
	Fiscal 2024	Fiscal 2025

Net sales	9,391	9,683	292	3.1%
Operating profit	1,154	1,697	542	47.0%

In the engineering business, sales were lower year on year, reflecting a decline in large-scale plant projects.

In the mesh cloths business, sales rose year on year atop the continuation of favorable shipments of screen printing materials for solar panels.

As a result, net sales of the Others Segment increased 3.1% year on year to ¥9,683 million, with operating profit up 47.0% to ¥1,697 million. The rise in profit came mainly from growth in shipments in the mesh cloths business.

(2) Overview of Financial Position for the Period under Review

			(Millions of yen)

	As of March 31, 2024	As of June 30, 2024	Difference
Current assets	365,072	364,833		238)
				(
Non-current assets	461,629	463,674		2,044
Total assets	826,702	828,508		1,806
Current liabilities	163,571	154,512	(	9,058)
Non-current liabilities	146,749	148,133	1,383
Total liabilities	310,321	302,646	(	7,674)
Total net assets	516,381	525,862	9,481
Total liabilities and net assets	826,702	828,508		1,806

The status of assets, liabilities and net assets on a consolidated basis at the end of the first three months of the fiscal year ending March 31, 2025 was as follows.

Current assets decreased ¥238 million from the previous fiscal year-end to ¥364,833 million. Non-current assets increased ¥2,044 million to ¥463,674 million, primarily accompanying an increase in property, plant and equipment. As a result, total assets rose ¥1,806 million from the previous fiscal year-end to ¥828,508 million.

Also, current liabilities decreased ¥9,058 million to ¥154,512 million, mainly accompanying a decrease in income taxes payable. Non-current liabilities increased ¥1,383 million to ¥148,133 million. As a result, total liabilities decreased ¥7,674 million from the previous fiscal year-end to ¥302,646 million. Net assets increased ¥9,481 million to ¥525,862 million, mainly reflecting an increase in retained earnings due to profit attributable to owners of parent for the period, a decrease due to the payment of dividends, and an increase in accumulated other comprehensive income.

(3) Forecast of Consolidated Financial Results and Other Forward-looking Information

With respect to the outlook for the fiscal year ending March 31, 2025, in light of strong first- quarter performance and progress in shrinking cross-shareholdings, we have revised upward our initial forecasts for the first half and full year. Accordingly, we are projecting consolidated net sales to grow 1.4% to ¥870,000 million, operating profit to increase 6.7% to ¥51,000 million, ordinary profit to increase 6.0% to ¥53,000 million, and profit attributable to owners of parent to be 19.7% higher at ¥38,000 million.

Revisions to Forecast of Consolidated Financial Results for First Half of the Fiscal Year Ending March 31, 2025 (April 1, 2024 to September 30, 2024)

	Net sales	Operating profit	Ordinary profit	Profit attributable	Earnings
	to owners of	per share
					parent

Previous Forecast (A)	Millions	of yen	Millions of yen	Millions of yen	Millions of yen	Yen
(Announced May 15,
	420,000	24,000	25,000	16,500	55.48
2024)

Revised Forecast (B)		430,000	25,500	26,500	20,000	67.24
Difference (B-A)		10,000	1,500	1,500	3,500	-
Change (%)		2.4	6.3	6.0	21.2	-
(Reference) Previous
Results (First Half of		426,881	25,511	26,511	18,446	62.04
the Fiscal Year Ended

March 31, 2024)

Revisions to Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2025 (April 1, 2024 to March 31, 2025)

			Net sales	Operating profit	Ordinary profit	Profit attributable	Earnings
			to owners of	per share
							parent

Previous Forecast (A)	Millions	of yen	Millions of yen	Millions of yen	Millions of yen	Yen
(Announced May 15,
	850,000	48,000	50,000	33,000	110.95
2024)

Revised Forecast (B)		870,000	51,000	53,000	38,000	127.76
Difference (B-A)			20,000	3,000	3,000	5,000	-
Change (%)			2.4	6.3	6.0	15.2	-
(Reference) Previous
Results	(Fiscal	Year		858,248	47,791	49,992	31,743	106.74
Ended	March	31,

2024)

With respect to dividends, as initially projected, the Company plans to pay a full-year dividend of ¥50 per share, up ¥5 from the previous fiscal year.

With a long-term stance of continuing to pay a stable dividend in mind, beginning from the current fiscal year, we are excluding any gains or losses due to non-recurring extraordinary factors from profit attributable to owners of parent, and have set as a basic policy a consolidated payout ratio of 40% or more as the baseline standard in the payment of dividends. Accordingly, while the payout ratio for the current fiscal year is projected to be 39.1% on a consolidated basis, excluding non-recurring factors from income, the ratio is 43.0%.

In terms of numerical targets for the fiscal year ending March 31, 2027, the final year of "The Nisshin Seifun Group Medium-Term Management Plan 2026," we are targeting net sales of ¥900,000 million, operating profit of ¥48,000 million, and earnings per share (EPS) of ¥110. However, in light of progress in business performance this term, and following consideration of whether to revise these targets, we intend to announce the outcome of this consideration together with second-quarter financial results for the fiscal year ending March 31, 2025.

2. Quarterly Consolidated Financial Statements and Related Notes

(1) Quarterly Consolidated Balance Sheets

(Millions of yen)

	Fiscal 2024	Fiscal 2025
	First Quarter
	(As of March 31,
	(As of June 30,
	2024)
	2024)


Assets
Current assets
Cash and deposits	109,470	105,175
Notes and accounts receivable - trade, and contract	114,536	116,895
assets

Securities	-	1,437
Inventories	124,878	125,397
Other	16,729	16,609
Allowance for doubtful accounts	(541)	(681)
Total current assets	365,072	364,833
Non-current assets

Property, plant and equipment
Buildings and structures, net	72,092	73,089
Machinery, equipment and vehicles, net	66,504	68,664
Land	53,393	53,802
Right-of-use assets, net	18,471	20,189
Other, net	25,354	29,421
Total property, plant and equipment	235,815	245,167
Intangible assets

Goodwill	6,212	5,904
Other	15,350	16,264

Total intangible assets	21,563	22,168
Investments and other assets
Investment securities	185,445	176,699
Other	19,014	19,831
Allowance for doubtful accounts	(208)	(192)

Total investments and other assets	204,250	196,338

Total non-current assets	461,629	463,674

Total assets	826,702	828,508