First Half of the Fiscal Year Ending February 2020 (1H FY2/20) - PowerPoint PPT Presentation

First Half of the Fiscal Year Ending February 2020 (1H FY2/20) Results Briefing From March 1 to August 31, 2019 WARABEYA NICHIYO HOLDINGS CO., LTD. (2918) October 8, 2019 (2918) 2016 年 4 ⽉ 15 ⽇

Overview of Financial Results for 1H FY2/20 and Full-year Forecast for FY2/20 (Consolidated Basis) 2

Consolidated financial results for 1H FY2/20 (Millions of yen) 1H FY2/19 1H FY2/20 Vs. initial YoY Initial forecasts Results Results forecasts 111,575 112,000 109,816 -1,758 -2,183 Net sales (100.0) (100.0) (100.0) <-1.6> <-1.9> 1,694 1,600 1,974 279 374 Operating profit (1.5) (1.4) (1.8) <16.5> <23.4> 2,011 1,860 2,118 107 258 Ordinary profit (1.8) (1.7) (1.9) <5.3> <13.9> Profit 900 590 674 -226 84 (attributable to (0.8) (0.5) (0.6) <-25.1> <14.2> owners of parent) EPS (Yen) 51.33 33.61 -12.93 4.79 38.40 (attributable to owners of parent) * Figures in ( ) show sales ratio, and figures in < > show change (%). Initial forecasts were announced on April 12, 2019. 3

Consolidated net sales by segment (YoY) 合計 (Millions of yen) Temporary staffing and Contracting * Figures in < > show change (%). Food Engineering Logistics 1H 1H Change Change factors Food Ingredients FY2/19 FY2/20 111,575 109,816 Total net -1,758 (Millions 2,698 111,575 109,816 2,940 sales of yen) <-1.6> 1,371 1,172 7,431 7,031 100,000 9,034 8,428 Food -796 Lower sales in rice meal 91,040 90,243 Products <-0.9> range Drop in eel and Food -605 9,034 8,428 processed chicken Ingredients <-6.7> volumes -399 Decline in deliveries to Logistics 7,431 7,031 50,000 <-5.4> Seven-Eleven stores 91,040 90,243 Food -198 Drop in orders for large 1,371 1,172 Engineering <-14.5> projects Increase in orders in Temporary 242 temporary staffing and staffing and 2,698 2,940 <9.0> technical intern training Contracting business 0 1H FY2/19 1H FY2/20 4

Consolidated operating profit by segment (YoY) * Figures in < > show change (%). (Millions of yen) 1H FY2/19 1H FY2/20 Change Change factors (Billions of yen) Total operating 279 1,694 1,974 profit <16.5> Impact of lower sales -0.10 Increase in personnel expenses -0.39 Increase in utilities, logistics costs and -0.07 other costs 856 Improvement due to changes in product +0.80 Food Products 1,509 2,366 standards <56.7> Productivity gains +0.30 Absence of special factors booked in +0.23 previous fiscal year Overseas operation +0.09 -172 Booking of inventory valuation losses (0.12), lower Food Ingredients 84 -87 <-203.3> sales -44 Logistics 48 3 Lower sales, higher personnel expenses <-92.2> -535 Decline in sales to the Food Products Business, Food Engineering 345 -189 <-154.9> provision of allowance for doubtful accounts (0.20) Temporary -120 Decline in sales to the Food Products Business, staffing and 183 63 <-65.6> increase in personnel expenses Contracting Inter-segment 296 -477 -180 Drop in inter-segment transactions transactions <-> 5

Reasons for difference with initial forecasts (Millions of yen) 1H FY2/20 [Difference factors] (Billions of yen) Vs. Initial Food Products Business -1.59 forecast Result forecast Bento meal boxes, chilled bento meal boxes -1.50 -2,183 112,000 109,816 Net sales Onigiri rice balls, sushi -0.60 (100.0) (100.0) <-1.9> Other delicatessen items +0.65 Food Ingredients Business -0.53 Logistics Business -0.22 (Millions of yen) 1H FY2/20 [Difference factors] (Billions of yen) Vs. Initial Food Products Business +0.82 forecast Result forecast Changes in product standards +0.40 Productivity gains +0.30 1,600 1,974 374 Operating Overseas businesses +0.15 profit (1.4) (1.8) <23.4> Food Ingredients Business -0.18 Booking of inventory valuation losses Food Engineering Business -0.20 Provision of allowance for doubtful accounts for some receivables * Figures in ( ) show sales ratio, and figures in < > show change (%). Initial forecasts were announced on April 12, 2019. 6

Non-operating profit/expenses and extraordinary income/losses (YoY) (Millions of yen) 1H FY2/19 1H FY2/20 Change 1,694 1,974 279 Operating profit (1.5) (1.8) <16.5> Non-operating -65 484 418 income (0.4) (0.4) <-13.6> Non-operating 167 274 106 expenses (0.1) (0.2) <63.9> 2,011 2,118 107 Ordinary profit 1H FY2/19 (1.8) (1.9) <5.3> Extraordinary losses ¥0.70 billion － Extraordinary 126 -126 • Warabeya Nichiyo: impairment losses ( － ) income (0.1) <-100.0> on some business assets ¥0.70 billion Extraordinary 706 664 -42 losses ( 0.6 ) ( 0.6 ) < -5.9 > 1H FY2/20 Extraordinary losses ¥0.66 billion Profit before income 1,431 1,454 23 • Warabeya Nichiyo: Impairment losses taxes (1.3) (1.3) <1.6> for Kagawa Plant ¥0.63 billion 506 732 226 Total income taxes (0.5) (0.7) <44.7> Profit 24 47 23 (attributable to non- (0.0) (0.0) < 96.9 > controlling interests) Profit 900 674 -226 (attributable to owners (0.8) (0.6) <-25.1> of parent) * Figures in ( ) show sales ratio, and figures in < > show change (%). 7

Consolidated balance sheets (vs. end-FY2/19) (Millions of yen) (Millions of yen) [Liabilities and End-1H End-1H [Assets] End-FY2/19 Change End-FY2/19 Change net assets] FY2/20 FY2/20 4,416 Current liabilities 24,487 28,903 6,562 Current assets 27,178 33,740 Non-current Non-current -1,192 15,906 14,713 57,457 53,941 -3,516 liabilities assets [Interest- [14,176] [12,182] [-1,994] [Property, plant bearing debt] [-3,463] [49,625] [46,161] and equipment] 3,223 Total liabilities 40,393 43,616 [Intangible [1,112] [995] [-117] assets] -177 Total net assets 44,242 44,064 [Investments [Retained and other [64] [6,720] [6,784] [-34] [28,254] [28,220] earnings] assets] Total liabilities 3,045 84,635 87,681 3,045 Total assets 84,635 87,681 and net assets Total assets as of end-1H FY2/20: Total liabilities/net assets as of end-1H FY2/20: approx. ¥3.0 billion increase approx. ¥3.0 billion increase  Increase in current assets (cash and deposits, notes and  Increase in current liabilities (notes and accounts payable – accounts receivable – trade, etc.): approx. ¥6.5 billion trade, accounts payable – other, etc.): approx. ¥4.4 billion  Decrease in non-current assets (buildings and structures, etc.):  Decrease in non-current liabilities (long-term lease obligations, approx. ¥3.5 billion etc.): approx. ¥1.1 billion  Decrease in net assets : approx. ¥0.17 billion 8

Consolidated statements of cash flows (Millions of yen) 1H FY2/20 Profit before income taxes 1,454 Depreciation 2,738 Decrease (increase) in notes and accounts receivable – trade -3,937 Decrease (increase) in inventories -143 Increase (decrease) in notes and accounts payable – trade 2,154 Increase (decrease) in accounts payable – other 1,970 Other 1,755 Subtotal 5,991 Income taxes paid -123 Other 253 Cash flows from operating activities 6,122 Purchase of property, plant and equipment -1,219 Proceeds from sales of property, plant and equipment 1,399 Other 78 Cash flows from investing activities 258 Cash flows from financing activities -3,039 Effect of exchange rate change on cash and cash equivalents -24 Net increase (decrease) in cash and cash equivalents 3,316 Cash and cash equivalents at the beginning of period 2,439 Cash and cash equivalents at the end of period 5,756 9

Consolidated financial forecast for FY2/20 Initial net sales forecast revised down by ¥5.5bn, no change to profit forecasts (Millions of yen) FY2/19 FY2/20 Change Results Revised forecasts -1,696 215,696 214,000 Net sales (100.0) (100.0) <-0.8> 1,526 973 2,500 Operating profit (0.7) (1.2) <63.8> 1,766 933 2,700 Ordinary profit (0.8) (1.3) <52.8> 610 700 89 Profit (attributable to owners of (0.3) (0.3) <14.7> parent) EPS (Yen) 34.78 5.10 39.88 (attributable to owners of parent) ◆ Net sales: Lower sales in rice meal range in Food Products Business, weaker Change factors sales in Food Ingredients Business and Logistics Business ◆ Operating profit: Food Products Business +1.33, other businesses -0.36 (Billions of yen) See slide 18 for details. * Figures in ( ) show sales ratio, and figures in < > show change (%). Revised forecasts were announced on October 4, 2019. 10

PROGRESS IN 1H FY2/20 AND FUTURE MEASURES 11

Measures in 1H Major changes in operating Internal issues to address to environment achieve growth Competition intensifying in ready-to-eat meal Increase plant capacity utilization   market Respond to rising production costs  Slower pace of store openings by Seven-Eleven Move into new growth regions and categories   Japan Accelerating shift to chilled rice meal products  Rising personnel and logistics costs  Higher prices for ingredients (rice, dried  seaweed) Measures to generate sustained growth 1 Improve productivity and restore profitability in existing domestic businesses Positive impact, steady recovery in profits 2 Expand overseas businesses Sales and profits both strong 12