Announcement of the Settlement of Accounts for the First 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 first quarter of the year ending March 2014 was announced on the afternoon of Friday, August 2. An outline of the accounts is presented below.

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

Overview of the first quarter for FY ending March 2014

The Japanese economy during the company’s first quarter period revealed modest signs of recovery in economic indexes and company earnings, as well as in terms of positive effects resulting from weaker yen and growing 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 ongoing sluggish economic growth of emerging markets.

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 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 quarter of the year ending March 2014, we achieved net sales of 58,831 million yen (increase of 5.1% y-o-y), operating income of 3,521 million yen (increase of 18.8% y-o-y), ordinary income of 3,542 million yen (increase of 22.7% y-o-y) and net income of 2,109 million yen (increase of 12.2% 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, palm oil among other products, as well as decreased sales of coconut oil, palm oil, blended oil, hard butters for chocolate led to lower net sales for the division, but efforts to maintain profitability resulted in increased profit.

Overseas, hard butters for chocolate increased in sales volume in the US, Europe and Southeast Asia, and higher converted prices from weaker yen also contributed to growth in both sales and profit.

Through these results, this division achieved a sales volume of 23,716 million yen (increase of 8.0% y-o-y) and an operating income of 763 million yen (increase of 37.2% 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 chocolates for industrial use. Creams achieved improved sales following robust results from creams for desserts, and fillings increased sales as a result of improved sales volume for fillings for bread. Modified products saw increase in sales after sales volume 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 China and Southeast Asia.

Through these results, this division achieved a sales volume of 25,477 million yen (increase of 2.5% y-o-y) and an operating income of 2,373 million yen (increase of 25.5% y-o-y).

<Soy Protein Division>
Soy protein ingredients increased sales for frozen foods, prepared foods, processed foods and fermentation and culture medium to post gains in sales. Food function-enhancing ingredients improved in sales following increase in sales for beverages, fermentation and culture medium and exports. Soy protein products sales saw lower revenue as catering foods and instant noodles accumulated lower sales. The soy protein division overall was impacted by the rise in soy prices and suffered worsened profitability, and resulted in increased sales but lower profit.

Through these results, this division achieved a sales volume of 9,638 million yen (increase of 5.3% y-o-y) and an operating income of 384 million yen (decrease of 25.5% 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