Itoham Yonekyu : Consolidated Financial Results for the Three Months Ended June 30, 2022 (Japanese Accounting Standards)

August 03, 2022

Consolidated Financial Results

for the Three Months Ended June 30, 2022 (Q1 FY 2022)

(Japanese Accounting Standards)

Company name:	Itoham Yonekyu Holdings Inc.
Stockexchange listing:	Tokyo Stock Exchange
Stock code:	2296
URL:	https://www.itoham-yonekyu-holdings.com
Representative:	Isao Miyashita, President and Representative Director
Contact:	Masaru Kato, General Manager, Public &Investor Relations Office
	Tel. [phone]
Scheduled date for filing of securities report:	August 10, 2022
Scheduled date of commencement of dividend payment: -
Supplementary documents for financial results:	Yes
Quarterly results briefing:	No

(Amounts of less than one million yen are truncated)

1. Consolidated Financial Results for the Three Months Ended June 30, 2022 (April 1, 2022-June 30, 2022)

(1) Consolidated Results of Operations (Accumulated Total)		(% figures show year-on-year change)
	Net sales	Operating profit	Ordinary profit	Profit (loss)
	attributable to owners
Three months ended	Million Yen	%	Million Yen	%	Million Yen	%	Million Yen	%
June 30, 2022	212,325	4.8	7,114	-5.8	7,698	-8.6	5,129	-13.2
June 30, 2021	202,607	―	7,554	―	8,425	―	5,908	―
(Note) Comprehensive income:		Three months ended June 30, 2023			8,265	million Yen (26.0%)
		Three months ended June 30, 2022			6,560	million Yen (－%)
	Profit (loss)	Diluted net profit
	per share	per share
Three months ended		Yen		Yen
June 30, 2022		17.60		17.59
June 30, 2021		20.18		20.17

(Note) As the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29), etc. has been applied from the beginning of the first quarter of the fiscal year ending March 31, 2022, therefore the percentage change from the same period of the previous year is not stated.

(2) Consolidated financial position
		Total assets	Net assets	Equity ratio
		Million Yen	Million Yen		%
As of June 30, 2021		433,421	262,941		60.5
As of March 31, 2021		413,123	262,740		63.4
(Reference) Shareholders' equity:		As of	March 31, 2023	262,300	million	Yen
		As of March 31, 2022	262,023	million Yen

2. Dividends

				Dividend per share
	First		Second	Third	Fiscal	Total
	quarter-end		quarter-end	quarter-end	quarter-end
For the fiscal year ended		Yen	Yen	Yen	Yen	Yen
March 31, 2022		－	0.00	－	23.00	23.00
March 31, 2023		－
For the fiscal year ending
March 31, 2023			0.00	－	24.00	24.00
(Forecast)

(Note) Changes to most recent dividend forecast: None

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2023

(April 1, 2022 to March 31, 2023)

(% figures show year-on-year change)

	Net sales		Operating profit	Ordinary profit	Profit (loss)	Profit (loss) per share
		attributable to owners
	Million Yen		%	Million Yen	%	Million Yen	%	Million Yen	%	Yen
Second quarter-end	430,000		2.9	13,500	-6.8	15,000	-9.3	10,000	-15.3	34.48
(Cumulative)	865,000			21,000		24,000		15,000
Full year		1.2	-14.7	-16.1	-21.5	51.72

(Note) Changes to most recent financial results forecast: Yes

* Notes

1. Changes in significant subsidiaries during the term (changes in specific subsidiaries accompanied by a change in the

scope of consolidation):

None

1. Application of special accounting treatment in the preparation of the quarterly consolidated financial statements: None

1. Chaneges in accounting policies,chaneges of accounting estimates and restatement

(i)	Changes in accounting policies due to amendments to accounting standards:	None
(ii) Other Chaneges in accounting policies:	None
(iii) Chaneges in accounting esteimates:	None
(iv)	Restatement:	None

(3) Numbers of shares outstanding (common stock)

1. Numbers of issued shares at end of period:

Three Months Ended June 30, 2022:	292,335,059 shares
Year ended March 31, 2022:	297,335,059 shares

1. Numbers of treasury shares at end of period:

Three Months Ended June 30, 2022:	2,315,162 shares
Year ended March 31, 2022:	5,458,762 shares

1. Average number of shares outstanding during period (quarterly cumulative period):

Three Months Ended June 30, 2022:	291,513,184 shares
Three Months Ended June 30, 2021:	292,738,808 shares

• This Summary of Consolidated Financial Results is outside the scope of the external audit.
• Explanation for using the forecasted informaiton and the other special notes

(Notes concerning forward-looking statements, etc.)

This summary financial report contains forward-looking statements and forecasts are made based on information available to the company at the time of preparation and certain assumption deemed to reasonable and actual result may significantly due to various factors.

For assumptions used for earnings forecasts and notes on the use of earnings forecasts, please refer to "(3) Information on the consolidated earnings forecasts and other future forecasts" under "1. Qualitative Information on Financial Results " on page "3".

(Access to Supplementary Explanations)

Explanatory materials for quarterly financial results will be published on TDnet for viewing in Japan and on our website.

Contents
1. Qualitative Information on Consolidated Operating Results for the Three Months Ended June 30, 2022 .......................	2
(1)	Description of operating results ..................................................................................................................................	2
(2)	Description of financial position .................................................................................................................................	4
(3)	Information on the consolidated earnings forecasts and other future forecasts ...........................................................	4
2．Consolidated Financial Statements and Key Notes.........................................................................................................	5
(1)	Consolidated balance sheets ........................................................................................................................................	5
(2)	Consolidated statements of income and comprehensive income.................................................................................	7
(3)	Notes on the quarterly consolidated financial statements............................................................................................	9
(Notes on going concern assumptions) .........................................................................................................................	9
(Notes in the case of significant changes in shareholders' equity) ................................................................................	9
(Segment information) ..................................................................................................................................................	9

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1. Qualitative Information on Consolidated Operating Results for the Three Months Ended June 30, 2022

(1) Description of operating results

During the first three months of the fiscal year under review, the Japanese economy showed some signs of recovery due to the normalization of social and economic activities, but soaring resource prices and the sharp depreciation of the yen against the backdrop of unstable international conditions, exerted upward pressure on prices. The outlook remains uncertain, as consumers are becoming increasingly wary of price hikes, especially for daily necessities.

The food industry is also facing a challenging business environment, due to the effects of the rapid depreciation of the yen, while costs continue to rise due to soaring raw materials and energy prices. In addition, the Company is required to respond to rapidly changing and diversifying consumer needs and values, such as change in consumer behavior and accelerating digitalization and growing interest in sustainability.

Under these circumstances, the Group continues to implement product and sales strategies that accurately and promptly respond to changes in the world. To fulfill the Group's supply responsibilities as a food manufacturer, the Company continues to take thorough measures against infectious diseases to create an environment where each and every employee can practice safe, secure, and diverse work styles and conduct business activities. In addition, the Medium-Term Management Plan 2023 has four priority policies: "Strengthening the Management Base," "Strengthening the Earnings Base," "Initiatives for New Businesses and Markets" and "Initiatives for Sustainability." Specifically, the Company takes measures in accordance with its priority action policies, including reorganization into strategic business segment units to maximize the effects of the integration, promotion of operational efficiency through digital strategies, strengthening of the healthcare business through the acquisition of the animal-derived blood products business, and reinforcement of the structure through the establishment of the Sustainability Promotion Office.

Focusing on return on invested capital (ROIC) as a quantitative indicator in the Medium-Term Management Plan 2023, the Group targets to improve it to 6.8% during the subject period. The Group has also decided to implement shareholder return policies in consideration of financial soundness and capital efficiency to maximize shareholder value and has a dividend policy of increasing dividends steadily, with the payout ratio ranging from 30% to 50%, aiming for a payout ratio of around 40%, and has set a limit of 5 billion yen for share repurchases and cancelled 5 million shares during the first quarter under review.

As a result of above efforts to respond to changes in the business environment, consolidated net sales for the first quarter increased 9,718 million yen to 212,325 million yen (up 4.8% YoY), operating profit decreased 440 million yen to 7,114 million yen (down 5.8% YoY), ordinary profit decreased 726 million yen to 7,698 million yen (down 8.6% YoY), and net profit attributable to owners of the parent decreased 778 million yen to 5,129 million yen (down 13.2% YoY).

The following is a summary of business results by reportable segment.

With regards to hams and sausages, net sales increased due to efforts to expand sales of mainstay products for home use such as The GRAND Alt Bayern, Asano Fresh Series, Pork Bits, Ibushi Kobo Series, Gotenba Kogen Arabiki Pork and Genkei Bacon Block Series by launching TV commercials and conducting consumer campaigns, in addition to sales growth of commercial-use products such as roast beef.

In cooked and processed foods, net sales decreased due to lower sales volume despite effort to strengthen sales of products that meet diversifying consumer needs, such as the Butcher's Prepared Foods Series and Quick Dinner Series, which are prepared in a convenient manner, and the Like Meat! series using soybean meat, and other products, in addition to pizzas such as La Pizza and Pizza Garden, chicken, hamburgers, and meatballs.

As a result, net sales in the processed food division for the first quarter increased 2,455 million yen year-on-year to 87,792 million yen (up 2.9% YoY), due in part to the effect of product price revisions. Ordinary profit decreased 1,140 million yen year-on-year to 2,828 million yen (down 28.7% YoY) due to further cost increases, including higher raw materials and energy prices.

As for domestic meat business, while the market price of imported meat surged due to the unstable international situation and sales volume of imported chicken and other products to mass merchandisers decreased, net sales increased due to higher unit sales prices and steady sales of domestic beef, mainly due to recovery in the restaurant industry. Profit

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declined due to higher procurement prices resulting from high market prices and a rapidly depreciating yen, as well as the effects of continued congestion in marine container transport.

As for the overseas businesses, both net sales and profits increased due to ANZCO Foods Ltd.'s efforts to focus on profitability for procurement and sales, as well as higher sales prices reflecting steady overseas demand for meat products. As a result, net sales in the meat division increased 7,211 million yen year-on-year to 123,416 million yen (up 6.2% YoY), and ordinary profit increased 533 million yen year-on-year to 5,255 million yen (up 11.3% YoY ) in the first quarter under review.

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