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

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

Our settlement of accounts for the year ending March 2014 was announced on the afternoon of Friday, 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 2014 (April 01, 2013 to March 31, 2014)

Overview of the FY ending March 2014

The Japanese economy in this consolidated accounting year saw a correction in the value of the yen and increasing share prices as well as improvements in corporate income and individual consumption due to the economic policies and monetary easing implemented by the government and the bank of Japan, which resulted in a moderate recovery. Overseas, however, while the US economy saw a recovery there were also concerns of a downward trend in the global economy due to factors including slower growth in China and other developing countries, which lead to progress in a state of uncertainty.

The domestic 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 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 2014, we achieved net sales of 253,004 million yen (9.0% y-o-y increase), operating income of 15,241 million yen (7.7% y-o-y increase), ordinary income of 14,798 million yen (6.9% y-o-y increase) and net income of 8,164 million yen (2.1% y-o-y decrease).

Overviews by division are as follows:

<Oils and Fats Processing Division>
Domestically, a decreased sales volume of coconut oil, palm oil and blended oil led to lower net sales for the division.

Overseas, hard butters for chocolate increased in sales volume in the US, Europe and Southeast Asia which resulted in increased revenue, and lower costs as well as higher converted amounts from weaker yen also contributed to growth in both sales and profit.

Through these results, this division achieved a sales volume of 102,345 million yen (12.6% y-o-y increase) and an operating income of 5,076 million yen (53.7% y-o-y increase).

<Confectionery and Baking Ingredients Division>
Domestically, ganache products decreased in sales but sweet chocolates, ice-coating chocolates, colored chocolates, and molded chocolates posted gains, resulting in increased sales for chocolates for industrial use. Creams achieved increased 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 rise in dairy products pricing. Reduced profitability due to the impact of increased raw material costs resulting from a weakened yen lead to increased income but lower profits 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 and creams in Southeastern Asia.

Through these results, this division achieved a sales volume of 111,444 million yen (6.8% y-o-y increase) and an operating income of 9,432 million yen (1.0% y-o-y increase).

<Soy Protein Division>
Soy protein ingredients increased sales for frozen foods, prepared foods, health foods and fermentation and culture medium to compensate for reductions in the meat market and post gains in sales, but was impacted by the rise in raw material prices following weaker yen and decreased profitability. Functional food ingredients improved in sales following increase in sales for exports and products for rice. Soy protein products sales saw lower sales in products for retailers 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, and resulted in significantly lower profit.

Through these results, this division achieved a sales volume of 39,213 million yen (6.3% y-o-y increase) and an operating income of 731 million yen (51.5% y-o-y decrease).

Predictions for Consolidated Results for the Year Ending March 2015 (April 1, 2014 to March 31, 2015)

In the current environment faced by the food industry, we are aware that how changes in the domestic market where there are an increasing number of elderly persons and fewer children as well as an increasing number of women in the workforce are dealt with, and how growth in developing countries in Asia and other areas where there is an increasing middle class overseas are handled is very important.

In order to achieve a scale that gives the group a presence on the global stage and secure high profit margins through technological innovation and become a group that contributes to health, abundance, and good tasting food, we have defined the position we would like to be in by 2030 and the position we should have achieved by 2020, and have formulated the middle term business plan "Renaissance Fuji 2016" (April 2014 - March 2017) as an activity plan for the forthcoming three years to achieve these goals. The Renaissance Fuji 2016 plan that aims for the establishment of a global management structure in three years defines the following basic approach, and will carry it forward at an increasing pace.

1) Global management (global business promotion, organizational reforms, improved decision making speed through delegation of authority)
2) Technological management (creation of cutting edge food product materials through core technologies, increased activity from R&D department)
3) Sustainable management (HR development, diversity promotion, environmental vision, sustainable procurement)

* 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

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