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

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

(Changes to disclosed information and the completion of a review by independent account auditors)

The Company released its “Consolidated Financial Results for the Third Quarter of Fiscal 2025 [Japanese GAAP]” on January 28, 2025. This serves as notice of changes to the quarterly consolidated financial statements and the completion of a review of the financial statements by independent account auditors.

The changes to the quarterly consolidated financial statements released on January 28, 2025, are as follows.

1. Changes to the Consolidated Financial Results for the Third Quarter of Fiscal 2025 [Japanese GAAP]

The information on the acquisition and cancellation of treasury shares noted in the Significant Subsequent Events section has been changed. The changes are as follows.

[Significant Subsequent Events]

(Acquisition and cancellation of treasury shares)

At a Board of Directors meeting held on January 28, 2025, the Company passed a resolution on the acquisition of treasury shares in accordance with Article 459, Paragraph 1 of the Companies Act and Article 41 of the Articles of Incorporation. The Company also resolved to cancel treasury shares pursuant to Article 178 of the Companies Act.

For more information, please refer to the notice on the acquisition of treasury shares through the off-floor trading system, ToSTNeT-3 (Tokyo Stock Exchange Trading NeTwork System), and the cancellation of treasury shares announced today.

[Significant Subsequent Events] (Acquisition of treasury shares)

At a Board of Directors meeting held on January 28, 2025, the Company passed a resolution on the acquisition of treasury shares in accordance with Article 459, Paragraph 1 of the Companies Act and Article 41 of the Articles of Incorporation. Following the resolution, the Company acquired treasury shares. The details are as follows.

1. Reason for acquiring treasury shares

The Company acquired treasury shares to enhance shareholder returns, improve capital efficiency, and implement capital policies in line with the business environment.

(Cancellation of treasury shares)

At a Board of Directors meeting held on January 28, 2025, the Company resolved to cancel treasury shares pursuant to Article 178 of the Companies Act.

1. Reason for canceling treasury shares

The Company will cancel treasury shares to relieve concerns about any dilution of shares.

2. Reasons for the changes

The Company released its “Consolidated Financial Results for the Third Quarter of Fiscal 2025 [Japanese GAAP]” on January 28, 2025. Subsequently, the Company acquired treasury shares, and the number of treasury shares to be canceled was determined.

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 Third Quarter of Fiscal 2025

[Japanese GAAP]

(Reference) Equity capital: December 31, 2024: ¥510,365 millionMarch 31, 2024: ¥500,302 million

2. Dividends

(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)

(Percentages represent year-on-year changes.)

(Note) Revision to the latest forecast of financial results: None

* Notes

1. Significant changes in the scope of consolidation during the first nine months of the fiscal year ending March 31, 2025: None
2. 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.

1. 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

• 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. Overview of Business Performance, etc. (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 .

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1. Overview of Business Performance, etc.

1. Overview of Business Performance for the Period under Review
   Overview of the first nine months of the consolidated fiscal year under review

During the first nine months of the fiscal year ending March 31, 2025, the Japanese economy saw a rise in inbound tourism demand. However, consumers’ belt-tightening behavior continued due to high prices for goods, as raw material and energy prices remained high primarily because of the weaker yen and higher logistics costs. Consequently, consumer spending did not pick up. Meanwhile, there were signs of change in the framework for international cooperation. The Nisshin Seifun Group is facing an uncertain business environment.

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. In July 2024, Vietnam Nisshin Seifun Co., Ltd. and Vietnam Nisshin Technomic Co., Ltd., subsidiaries in the processed food business, started selling household- use products in Vietnam. 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 continuing striving to expand recognition of and develop the market for high-fiber wheat flour (Amuleia). We are building a new development site based on an “Our ‘kitchen’ – where we co-create the future” concept, with construction scheduled to be completed 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.

Nisshin Seifun Welna Inc., a subsidiary in the Processed Food Business, entered into an agreement with Shohei Otani of the Los Angeles Dodgers in November last year to feature him in a commercial.

Consolidated net sales in the first nine months of the fiscal year under review declined 0.5% year on year to ¥647,441 million, chiefly due to a revision to the prices of commercial wheat flour because of changes in the government’s pricing for imported wheat in the domestic flour milling business and a decrease in shipments in the healthcare foods business. On the profit front, operating profit decreased 5.8% year on year to ¥39,470 million, and ordinary profit fell 3.2% to ¥41,940 million. This decline was primarily due to the rising cost of raw materials, transportation, and labor across all businesses and a decrease in shipments in the healthcare foods business, despite strong performance in the overseas flour milling business. Profit attributable to owners of parent came to ¥30,538 million, up 3.5% year on year, primarily from posting of a gain on sale of investment securities due to a decrease in cross-shareholdings.

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(Year-on-year Comparison)

[Business Overview by Segment] 1) Flour Milling Segment

In the flour milling business in Japan, shipments were higher year on year, mainly reflecting an increase in demand for restaurant dining due to increased foot traffic, including from inbound tourism, in addition to benefits from sales expansion measures.

In July 2024 and January 2025, we revised the prices of commercial wheat flour due to changes in the government’s pricing for five classes of imported wheat. The government’s price was lowered 0.6% on average in April 2024 and 1.8% in October. Additionally, transportation and power costs rose.

In the overseas flour milling business, sales decreased from the same period in the previous year, primarily due to a decline in wheat market prices, despite firm shipments.

As a result, net sales of the Flour Milling Segment decreased 2.0% year on year to ¥339,756 million. Operating profit declined 5.8% to ¥22,953 million, chiefly reflecting a rise in manufacturing costs in the domestic flour milling business, despite the firm performance of the overseas flour milling business.

2) Processed Food Segment

In the processed food business, while belt-tightening behavior among consumers in Japan continued, shipments, primarily of household-use wheat flour, prepared mixes, and pasta, were firm, reflecting active promotions. Overseas, commercial-use prepared mix shipments were solid, lifting sales higher year on year.

In the yeast and biotechnology business, sales were up year on year, reflecting increased shipments of yeast, etc. 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.

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As a result, net sales of the Processed Food Segment increased 2.5% year on year to ¥156,039 million. Operating profit declined 17.4% to ¥6,331 million, attributable mainly to rising costs, including for raw materials and transportation due to foreign currency translation effects in the processed food business, along with lower shipments in the healthcare foods business.

3) Prepared Dishes and Other Prepared Foods Segment

In the Prepared Dishes and Other Prepared Foods Segment, net sales increased 0.8% year on year to ¥119,855 million, reflecting firm sales. Operating profit decreased 1.5% to ¥5,597 million, largely due to rising costs for raw materials and labor, which more than offset sales growth and improved productivity.

4) Others Segment

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 due to the favorable shipments of screen printing materials for solar panels.

As a result, net sales of the Others Segment fell 2.7% year on year to ¥31,789 million. Operating profit increased 15.2% to ¥4,585 million. The rise in profit was mainly attributable to growth in shipments in the mesh cloths business and an increased profit in the engineering business.

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

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

Current assets increased ¥3,677 million from the previous fiscal year-end to ¥368,750 million, chiefly due to an increase in securities. Non-current assets declined ¥745 million to ¥460,884 million, primarily accompanying a decrease in the market valuation of investment securities. As a result, total assets increased ¥2,932 million from the previous fiscal year-end to ¥829,634 million.

Current liabilities decreased ¥5,915 million to ¥157,656 million, mainly accompanying a decrease in short-term borrowings. Non-current liabilities declined ¥2,944 million to ¥143,804 million, chiefly reflecting a decrease in deferred tax liabilities. As a result, total liabilities decreased ¥8,860 million from the previous fiscal year-end to ¥301,461 million. Net assets increased ¥11,792 million to ¥528,173 million, mainly reflecting an increase in retained earnings due to profit attributable to owners of parent, a decrease due to the payment of dividends, and a decrease in accumulated other comprehensive income.

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

The consolidated results forecast for the fiscal year ending March 31, 2025 remains unchanged from those published on October 30, 2024. The forecasts for net sales, operating profit, and ordinary profit are ¥870,000 million (up 1.4% year on year), ¥51,000 million (up 6.7%), and ¥53,000 million (up 6.0%), respectively. Profit attributable to owners of parent is forecast to be ¥39,000 million (up 22.9%).

The Company plans to distribute an annual dividend of ¥55 per share (up ¥10 from the previous fiscal year) as published on October 30, 2024, following its policy of raising the target for the consolidated dividend payout ratio to approximately 50% (after the exclusion of gains or losses from non-recurring extraordinary factors) by the final fiscal year of “Medium-Term Management Plan 2026.” This is projected to result in actual dividend growth for a twelfth consecutive term. The payout ratio on a consolidated basis for the fiscal year under review is 41.9%, or 47.2% with the exclusion of gains or losses from non-recurring extraordinary factors.

At a Board of Directors meeting on January 28, 2025, the Company resolved to repurchase treasury shares through ToSTNeT-3 (Tokyo Stock Exchange Trading NeTwork System-3), an off- auction trading system, and cancel them to enhance shareholder returns, improve capital efficiency, and implement capital policies aligned with the business environment.

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2. Quarterly Consolidated Financial Statements and Related Notes

(1) Quarterly Consolidated Balance Sheets

(Million yen)

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