Announcement of the Settlement of Accounts for the Second Quarter of the Year Ending March 2014

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

Our settlement of accounts for the second quarter of the year ending March 2014 was announced on the afternoon of Friday, November 1 at the Tokyo Stock Exchange and Osaka Securities Exchange Press Clubs. An outline of the accounts is presented below.

Consolidated Results for the Second Quarter of the Year Ending March 2014 (April 1, 2013 to September 30, 2013)

Overview of the first half for FY ending March 2014

The Japanese economy during the company’s first half of the fiscal year revealed modest signs of recovery in economic trends and company earnings as well as maintained strong stock prices, but continued to be challenged with unstable economic conditions due to prolonged trends of deflation, decrease in trade surplus and stagnating employment. Although the US economy displayed recovery, the future projection of economic trends remains to be opaque both within Japan and globally following the dwindling economic growth of emerging markets.

The domestic food industry in which our group is placed continued to face adverse business conditions challenged with lower pricing trends, and suffered from rise in raw material prices following the depreciating yen.

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 first half of the year ending March 2014, we achieved net sales of 118,628 million yen (increase of 6.3% y-o-y), operating income of 6,431 million yen (increase of 14.3% y-o-y), ordinary income of 6,373 million yen (increase of 17.3% y-o-y) and net income of 3,894 million yen (increase of 20.8% y-o-y).

Overviews by division are as follows:

<Oils and Fats Processing Division>
Domestically, lower pricing following the declining key raw material market prices of coconut oil and palm oil among other products, in addition to decreased sales of coconut oil, palm oil, blended oil and hard butters for chocolate led to lower net sales and profit for the division.

Overseas, the volume for hard butters for chocolate increased in the US and Europe for improved net sales. Higher converted price due to weaker yen also contributed to growth in both sales and profit.

Through these results, this division achieved net sales of 47,796 million yen (increase of 9.2% y-o-y) and an operating income of 1,736 million yen (increase of 39.2% y-o-y).

<Confectionery and Baking Ingredients Division>
Domestically, ganache products decreased in sales but sweet chocolates, ice-coating chocolates and colored chocolates posted gains, resulting in increased sales for overall division of chocolates for industrial use. Creams achieved improved sales following robust results for products for desserts and drinks. Fillings also increased in sales as a result of improved sales volume for fillings for bread. Prepared products saw increase in sales after sales for milk powder improved. The confectionery and baking ingredients division posted gains in sales and profit overall domestically.

Overseas, the division posted increase in both sales and profit year-on-year following strong sales of chocolates for industrial use, creams, margarines and shortenings in Southeastern Asia.

Through these results, this division achieved a sales volume of 51,540 million yen (increase of 4.0% y-o-y) and an operating income of 4,184 million yen (increase of 16.4% y-o-y).

<Soy Protein Division>
Soy protein ingredients increased sales after frozen foods, prepared foods, health foods and fermentation and culture medium improved to post gains in sales, but was impacted by the rise in raw material prices following weaker yen and decreased in profitability. Food function-enhancing ingredients improved in sales following increase in sales for beverages, fermentation and culture medium and exports. Soy protein products saw lower sales in instant noodles but increased in revenue overall as sales in China were favorable. The soy protein division overall achieved improved sales but was impacted by struggling profitability of soy protein ingredients following the rise in soy prices, and resulted in significantly lower profit.

Through these results, this division achieved a sales volume of 19,290 million yen (increase of 5.8% y-o-y) and an operating income of 511 million yen (decrease of 34.9% y-o-y).

Predictions for Consolidated Results for the Year Ending March 2014 (April 1, 2013 to March 31, 2014)

*Qualitative information regarding forecast consolidated figures
No revisions have been made for the full-year forecast announced on May 9, 2013. Revisions will promptly be announced if deemed necessary after determining the changes that may arise in the Company’s business environment.

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

End of report