Fiscal Year Ended February 2019 Results Briefing From March 1, 2018 - PowerPoint PPT Presentation

Fiscal Year Ended February 2019 Results Briefing From March 1, 2018 to February 28, 2019 WARABEYA NICHIYO HOLDINGS CO., LTD. (2918) April 17, 2019 (2918) 2016 年 4 月 15 日

Overview of Financial Results for FY2/19 and Full-year Forecast for FY2/20 (Consolidated Basis) 2

Consolidated financial results for FY2/19 (Millions of yen) FY2/18 FY2/19 Vs. Revised YoY Revised forecast Results Results forecast (Announced in Sep. 2018) 219,103 217,700 215,696 -3,406 -2,003 Net sales (100.0) (100.0) (100.0) <-1.6> <-0.9> 3,731 1,500 1,526 -2,205 26 Operating profit (1.7) (0.7) (0.7) <-59.1> <1.8> 4,023 1,750 1,766 -2,256 16 Ordinary profit (1.8) (0.8) (0.8) <-56.1> <0.9> 2,093 580 610 -1,483 30 Profit (attributable to (1.0) (0.3) (0.3) <-70.9> <5.2> owners of parent) EPS (Yen) 119.40 33.05 -84.62 1.73 34.78 (attributable to owners of parent) 4.8 – 1.4 -3.4 pt – ROE (%) * Figures in ( ) show sales ratio, and figures in < > show change (%). Revised forecast announced on September 25, 2018. 3

Consolidated net sales by segment (YoY) Temporary staffing and Contracting (Millions of yen) Food Engineering * Figures in < > show change (%). Logistics Food Ingredients FY2/18 FY2/19 Change Change factors Food Products (Millions Total net -3,406 219,103 215,696 5,089 of yen) 219,103 sales <-1.6> 5,562 215,696 1,698 2,390 14,721 200,000 14,429 Made Prime Deli a 2,738 Food 24,473 17,455 173,119 175,858 consolidated subsidiary Products <1.6> (+¥2.68 billion) Decline in volume of 150,000 -7,017 Food 24,473 17,455 processed marine Ingredients <-28.7> products handled -292 Return of Seven-Eleven 14,721 14,429 Logistics 100,000 <-2.0> store distribution routes 175,858 173,119 691 Growth in orders for rice Food 1,698 2,390 Engineering <40.7> preparation equipment 50,000 Increase in orders in Temporary 473 temporary staffing and 5,089 5,562 staffing and <9.3> technical intern training Contracting business 0 FY2/18 FY2/19 4

Consolidated operating profit by segment (YoY) (Millions of yen) * Figures in < > show change (%). Inter-segment transactions 3,731 Temporary staffing and Contracting FY2/18 FY2/19 Change 250 Food Engineering Total operating -2,205 286 3,731 1,526 (Millions of yen) Logistics 122 profit <-59.1> 3,500 443 Food Ingredients -1,695 Food Products 3,207 1,512 Food Products <-52.9> -327 1,526 Food Ingredients 443 115 <-74.0> 268 2,000 -206 392 Logistics 122 -84 3,207 <-169.2> 115 106 286 392 Food Engineering <37.0> 1,512 18 500 Temporary staffing 250 268 ＜ 7.4 ＞ and Contracting -84 -99 Inter-segment -577 -577 -677 -677 transactions <-> FY2/18 FY2/19 -1,000 FY2/18 FY2/19 ¥3.73 billion FY2/18 operating profit Improvement due to price hikes, changes to product standards, etc. +¥0.48 billion Change in product mix +¥0.10 billion YoY -¥2.20 billion Part-time personnel expenses -¥0.48 billion Change factors Full-time personnel expenses -¥0.87 billion Capital investment (initial startup costs, depreciation) -¥0.38 billion Increase in logistics costs -¥0.43 billion Increase in utilities costs -¥0.32 billion Food Ingredients and Logistics Businesses -¥0.53 billion Other +¥0.22 billion ¥1.52 billion FY2/19 operating profit 5

Non-operating profit/expenses and extraordinary income/losses (YoY) (Millions of yen) FY2/18 FY2/19 Change 3,731 1,526 -2,205 Operating profit (1.7) (0.7) <-59.1> FY2/18 689 611 -78 Non-operating Extraordinary losses ¥0.99 billion income (0.3) (0.3) < -11.4> • Nichiyo: Provision of allowance related to Nichiman ¥0.55 billion 398 370 -27 Non-operating • Warabeya Nichiyo: Impairment losses expenses (0.2) (0.2) <-6.9> for Kushiro Plant ¥0.44 billion 4,023 1,766 -2,256 Ordinary profit (1.8) (0.8) <-56.1> FY2/19 – 903 903 Extraordinary Extraordinary income ¥0.90 billion income (–) (0.4) ＜ – ＞ • Nichiyo: Gain on reversal of allowances for 995 1,721 725 doubtful accounts and for losses on loan Extraordinary guarantees for Nichiman ¥0.77 billion losses (0.5) (0.8) < 72.9> • Gain on sale of former head office land 3,027 948 -2,078 Profit before income ¥0.12 billion taxes (1.4) (0.4) <-68.7> Extraordinary losses ¥1.72 billion 933 306 -627 Total income taxes (0.4) (0.1) <-67.1> • Warabeya Nichiyo: Impairment losses on some business assets ¥1.04 billion – 31 31 Profit • Warabeya Nichiyo: Loss on sale of Iruma (attributable to non- Plant ¥0.67 billion (–) (0.0) <–> controlling interests) 2,093 610 -1,483 Profit (attributable to owners (1.0) (0.3) <-70.9> of parent) * Figures in ( ) show sales ratio, and figures in < > show change (%). 6

Consolidated balance sheets (YoY) (Millions of yen) (Millions of yen) [Liabilities and [Assets] End-FY2/18 End-FY2/19 Change End-FY2/18 End-FY2/19 Change net assets] 26,053 -1,566 24,487 Current liabilities 30,952 -3,010 27,941 Current assets Non-current 16,548 15,906 -642 Non-current liabilities 55,936 56,694 757 assets [Interest-bearing [14,708] [14,176] [-531] debt] [Property, plant [48,830] [49,625] [794] and equipment] 42,602 40,393 -2,208 Total liabilities [Intangible [904] [1,112] [208] assets] 44,286 44,242 -43 Total net assets [Investments and [6,202] [5,957] [-245] [Retained other assets] [28,247] [28,254] [6] earnings] Total liabilities 86,888 84,635 -2,252 Total assets 86,888 84,635 -2,252 and net assets Total assets as of end-FY2/19: approx. ¥2.2 billion decrease Total liabilities/net assets as of end-FY2/19: approx. ¥2.2 billion decrease  Decrease in current assets (cash and deposits, notes and accounts receivable – trade, etc.): approx. ¥3.0 billion  Decrease in current liabilities (notes and accounts payable – trade, accounts payable – other, etc.): approx. ¥1.5 billion  Increase in non-current assets (buildings and structures, etc.): approx. ¥0.7 billion  Decrease in non-current liabilities (long-term lease obligations, etc.): approx. ¥0.6 billion  Decrease in net assets : approx. ¥0.04 billion 7

Consolidated statements of cash flows (Millions of yen) FY2/19 Profit before income taxes 948 Depreciation 5,472 Decrease (increase) in notes and accounts receivable – trade 1,043 Decrease (increase) in inventories -478 Increase (decrease) in notes and accounts payable – trade -879 Increase (decrease) in accounts payable – other 75 Other 727 Subtotal 6,908 Income taxes paid -1,161 Other 227 Cash flows from operating activities 5,974 Purchase of property, plant and equipment -5,736 Other 3 Cash flows from investing activities -5,733 Cash flows from financing activities -3,311 Effect of exchange rate change on cash and cash equivalents -18 Net increase (decrease) in cash and cash equivalents -3,089 Cash and cash equivalents at the beginning of period 5,203 Increase in cash and cash equivalents from newly 325 consolidated subsidiary Cash and cash equivalents at the end of period 2,439 8

Consolidated financial forecast for FY2/20 (Millions of yen) FY2/19 Results FY2/20 Forecast Change 215,696 219,500 3,803 Net sales (100.0) (100.0) <1.8> 1,526 2,500 973 Operating profit (0.7) (1.1) <63.8> 933 Ordinary 1,766 2,700 profit <52.8> (0.8) (1.2) Profit 610 700 89 (attributable to (0.3) (0.3) <14.7> owners of parent) EPS (Yen) 34.78 39.88 5.10 (attributable to owners of parent)  Net sales: Increase in delivery point stores, stronger product lineup  Operating profit: (Positive factors) Sales growth +0.36, changes to product standards / price hikes +0.95, Change factors reduction in business costs +0.11, overseas operations +0.09, absence of special factors booked in previous fiscal year +0.34, (Billions of yen) other +0.24 (Food Ingredients, Logistics, and Other Businesses) (Negative factors) Increase in part-time personnel expenses -0.44, increase in full-time personnel expenses -0.37, increase in depreciation costs -0.32 * Figures in ( ) show sales ratio, and figures in < > show change (%). 9

Targeting Sustained Growth 10

Current business environment Major changes in Internal issues to address operating environment to achieve growth  Competition intensifying in ready-to-  Increase plant capacity utilization eat meal market  Respond to rising production costs  Slower pace of store openings by  Move into new growth regions and Seven-Eleven Japan categories  Accelerating shift to chilled rice meal products  Rising personnel and logistics costs  Higher prices for ingredients (rice, dried seaweed) Accelerate measures to generate sustained growth 11

Accelerate measures to generate sustained growth Improve productivity and restore profitability in 1 existing domestic businesses  Maintain healthy margins  Rebuild the production system  Carefully examine investment decision criteria Expand overseas businesses 2  Prime Deli  Beijing Want-Yang Foods  WARABEYA U.S.A. 12