Announcement of the Settlement of Accounts for the Year Ending March 2012

(Note) Figures shown have been rounded down to the nearest million yen

Our settlement of accounts for the year ending March 2012 was announced on the afternoon of Tuesday, May 8 at the Tokyo Stock Exchange and Osaka Securities Exchange Press Clubs. An outline of the accounts is presented below.

Consolidated Results for the Year Ending March 2012 (April 1, 2011 to March 31, 2012)

Overview of the FY ending March 2012

The Japanese economy during the year, although showing some signs of recovery from the March 11 earthquake, continued to be challenged with prolonging problems of power shortages and radioactive material contamination in the aftermath of the nuclear plant accident, with trends of deflation and the rising yen continuing, together with decrease in trade surplus and stagnating employment conditions. The future projection of economic trend remains to be opaque both within Japan and globally following the ongoing financial instability in Europe and damages caused by the flood in Thailand.

The food industry in which our group is placed continued to face adverse business conditions challenged with thrifty consumer spending and lower pricing trends, and with high key standards of raw material and fuel prices. Amid such environment, we carried out measures from our new middle term business plan “Global & Quality 2013”, engaging in product development fitting the needs of customers, delivering high-functionality ingredients and reducing production costs upon positioning “promotion of global management”, “promotion of technological management” and “promotion of sustainable management” as our fundamental policies.

As a result, for the annual term ending March 2012, we achieved net sales of 236,594 million yen (6.2% y-o-y increase), operating income of 12,983 million yen (decrease of 21.7% y-o-y), ordinary income of 13,017 million yen (decrease of 19.9% y-o-y) and net income of 8,290 million yen (decrease of 15.3% y-o-y).

Overviews by division are as follows:

<Oils and Fats Processing Division>
Domestically, rising prices of key raw material lead to decreased profitability of hard butters for chocolate, but steady sales of coconut oil, palm oil and fats for frying lead to improved sales and profit of the division.

In our overseas subsidiaries, hard butters for chocolate shrank in sales and profits following drops in its sales prices impacted by the decreased market price of cocoa butter. Palm oil recorded improved sales compared to the previous year due to the rise in raw material prices, but the overseas division posted increased sales and decreased profit overall.

Through these results, this division achieved a sales volume of 99,217 million yen (10.7% y-o-y increase) and an operating income of 3,942 million yen (decrease of 39.8% y-o-y).

<Confectionery and Baking Ingredients Division>
Domestically, decrease in colored chocolates sales resulted in decreased sales for chocolates for industrial use. Margarines and shortenings for breads posted increased sales, but creams and margarines fell in profits following higher raw material prices. Imported confectionery and baking ingredients achieved gains in sales after improving sales of milk powder, cocoa and butter products. The division posted gains in sales but decrease in profit overall domestically.

Our subsidiary overseas posted increase in sales year-on-year following good sales of chocolates for industrial use and margarines in China and Southeastern Asia, but rising raw material prices hampered profitability to mark a fall in profit.

Through these results, this division achieved a sales volume of 100,737 million yen (5.2% y-o-y increase) and an operating income of 7,015 million yen (decrease of 14.4% y-o-y).

<Soy Protein Division>
Domestically, soy protein ingredients posted decrease in sales for fishery and health foods following the termination of joint venture agreement with Solae, LLC in the US, but frozen foods, prepared foods and processed foods posted steady sales.

Food function-enhancing ingredients increased sales volume for fermentation and culture medium and export products, but decreased sales in beverages, noodles and rice to mark a drop in sales overall.

Soy protein products grew in sales after products for instant noodles and catering foods market increased.

Soy milk improved sales year-on-year and grew in profit.

Through these results, this division achieved a sales volume of 36,640 million yen (decrease of 1.9% y-o-y) and an operating income of 2,024 million yen (9.7% y-o-y increase).

Predictions for the Next Fiscal Year (April 1, 2012 to March 31, 2013)

The food industry is expected to continue seeing adverse business environments due to prolonged deflation and the lackluster economy in addition to high standards of key raw material and fuel prices.

The Group has formulated the middle term plan “Global & Quality 2013” (April 2011-March 2014) amid such circumstances to establish competitive advantage through our unique technological capabilities and strengths in the overseas market to grow the business globally.

Going in to the second year, we position FY2012 as the year to accelerate changes to materialize qualitative growth globally. While the business environment changes every moment, we will secure the scale, profit and value to prevail as a global company upon carrying out the following fundamental policies:
▪ ”Promotion of global management”
▪ ”Promotion of technological management”
▪ ”Promotion of sustainable management”

We forecast sales of 248,500 million yen (5.0% y-o-y increase), operating income of 15,500 million yen (19.4% y-o-y increase), ordinary income of 15,000 million yen (15.2% y-o-y increase), and net income for the term of 9,300 million yen (12.2% y-o-y increase) for the full year.

* Explanation and other notes regarding appropriate utilization of the predictions
The forecasts above have been made based on information available at the time of this announcement, and the actual results may differ from these forecasts due to various factors.

End of report