Announcement of the Settlement of Accounts for the Year Ending March 2013

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

Our settlement of accounts for the year ending March 2013 was announced on the afternoon of Thursday, May 9 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 2013 (April 1, 2012 to March 31, 2013)

Overview of the FY ending March 2013

The Japanese economy during our business year continued to be challenged with severe economic issues, including prolonged trends of deflation, decrease in trade surplus and stagnating employment, but showed some signs of improvement in economic trends and business outlook following weaker yen and growing stock prices since the end of last year. The future projection of economic trend remains to be opaque globally following the ongoing financial instability in Europe and slowing economic growth of China and other 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.

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 2013, we achieved net sales of 232,161 million yen (decrease of 1.9% y-o-y), operating income of 14,147 million yen (9.0% y-o-y increase), ordinary income of 13,847 million yen (6.4% y-o-y increase) and net income of 8,336 million yen (0.6% y-o-y increase).

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 others lead to decreased net sales for the division. We made efforts to maintain the profitability for coconut oil, palm oil and blended oil, but hard butters for chocolate experienced fall in pricing following the decline in cocoa butter market prices, and the segment overall posted lower sales and profit.

Overseas, hard butters for chocolate shrank in both sales and profits following decreased sales volume in the US, Europe and China together with lower pricing comparable to Japan.

Through these results, this division achieved a sales volume of 90,878 million yen (decrease of 8.4% y-o-y) and an operating income of 3,303 million yen (decrease of 16.2% y-o-y).

<Confectionery and Baking Ingredients Division>
Domestically, sweet chocolates sales volume increased but ice-coating chocolates and ganache products decreased, resulting in decreased sales for chocolates for industrial use. Creams achieved improved sales through Fuji Oil’s acquisition of Omu Milk Products Co., Ltd. shares resulting it to be a consolidated subsidiary. Margarines and filings posted increased sales for products for breads. Imported ingredients achieved increased sales volume for butter products but dropped in overall sales due to decrease in sales volume for milk powder and cocoa products. Both sales and profit posted gains overall for the division 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 Southeastern Asia.

Through these results, this division achieved a sales volume of 104,388 million yen (3.6% y-o-y increase) and an operating income of 9,336 million yen (33.1% y-o-y increase).

<Soy Protein Division>
Soy protein ingredients increased sales for fishery, frozen foods and prepared food, but decreased in health foods and fermentation and culture medium which lead to decrease in sales overall. Food function-enhancing ingredients decreased sales in export and rice-use but increased for beverages, fermentation and culture medium to post gains in sales. Soy protein products sales improved as decrease in sales for products for instant noodles were offset by increase in catering foods and sales in China. The soy protein division achieved increased sales but decreased in profit following weaker profitability impacted by rise in soy prices.

Through these results, this division achieved a sales volume of 36,894 million yen (0.7% y-o-y increase) and an operating income of 1,507 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)

The food industry is expected to continue seeing adverse business environments due to weak consumer spending and lower pricing trends.

The Group has entered its final year of its middle term plan “Global & Quality 2013” (April 2011-March 2014) amid such circumstances, and plans to strengthen its foundations and endeavor on its growth strategies to become a “corporate group that contributes to healthy and rich lifestyles by delivering the ‘Simply Unique’ value through manufacturing products that the world seeks for.”

Upon carrying out the fundamental policies below, we will focus more on strengthening corporate value as a group by becoming a “food ingredient manufacturer acclaimed by customers around the world, delivering niche, special, and global health and good taste.”
▪ “Promotion of global management”
▪ “Promotion of technological management”
▪ “Promotion of sustainable management”

* 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