FY3/23 2Q Consolidated Financial Statements[J-GAAP]
November 10, 2022
Matsuda Sangyo Co., Ltd.
Exchanges listed on:
Tokyo Stock Exchange (Prime Market)
7456
URL:
https://www.matsuda-sangyo.co.jp
President
Yoshiaki Matsuda
Executive Officer/
Inquiries:
General Manager of CSR IR Yoshinori Tanaka
TEL: +81-3-5381-0728
Dept.
Filing date of quarterly report:
November 11, 2022
Date to start dividends distribution:
December 6, 2022
Supplementary quarterly materials prepared:
Yes
Results briefing for quarterly financial resultsYes (Video to be posted on Company website on November 25,
2022)
held:
Company name:Company code:
Representative:(Figures are rounded down to the nearest million yen)

1. FY3/23 2Q consolidated results (April 1, 2022 – September 30, 2022)(1) Consolidated results
Net sales(millions of yen)

FY3/23 2Q

176,004

FY3/22 2Q

136,041(Note) Comprehensive income:(Percentages are year-on-year changes)

Operating profit(%) (millions of yen)

Profit attributable toowners of parent

Ordinary profit(%) (millions of yen)(%) (millions of yen)

(%)

29.4

7,953

9.4

8,128

3.7

5,634

3.0

21.8

7,269

98.1

7,834

112.7

5,469

99.9

FY3/23 2Q: ¥7,735 million (+13.7%)

Earnings per share

FY3/22 2Q: ¥6,805 million (+155.6%)

Diluted earnings per share
(yen)

(yen)

FY3/23 2Q

215.99－FY3/22 2Q

209.66－(2) Consolidated financial position
Total assets

Shareholders’ equity ratio(millions of yen)(millions of yen)(%)

135,708

81,52860.0

74,42064.2

End-FY3/23 2Q
End-FY3/22(Reference) Shareholders’ equity:

Net assets

115,797
End-FY3/23 2Q: ¥81,367 million

End-FY3/22: ¥74,297 million

2. Dividends
1Q

Annual dividends
3Q

2Q
(yen)

(yen)

FY3/22－

22.00

FY3/23－25.00

FY3/23 (Projections)

(yen)

4Q

Annual
(yen)

(yen)

－

24.00

46.00

－

25.00

50.00

(Note) Revisions to the most recently announced projections of dividends: Yes

3. Consolidated earnings projections for FY3/23 (April 1, 2022 – March 31, 2023)(Percentages are year-on-year changes)

Net sales(millions of yen)

FY3/23330,000

Operating profit(%) (millions of yen)(%) (millions of yen)

21.2

0.9

12,800

Profit attributable to Earnings perowners of parent
share

Ordinary profit
13,300(%) (millions of yen)

(3.2)

9,300

(%)

(yen)

(2.7)

356.51(Note) Revisions to the most recently announced projections of consolidated earnings: Yes* Notes(1) Material changes in subsidiaries during the period (changes in specified subsidiaries resulting fromchanges in scope of consolidation): No(2) Application of special accounting treatment in preparing the quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates and restatement of revisions
1) Changes in accounting policies with revision of accounting standards: No
2) Changes in accounting policies other than the above:No3) Changes in accounting estimates:
No4) Restatement of revisions:No(4) Number of issued shares (common shares)
1) Number of issued shares(including treasury shares)
2) Number of treasury shares
3) Average number of shares
during the period

End-FY3/23 2Q

26,908,581 shares End-FY3/22

28,908,581 shares

End-FY3/23 2Q

822,848 shares End-FY3/22

2,822,619 shares

26,085,818 shares FY3/22 2Q

26,086,442 shares

FY3/23 2Q* This quarterly kessan tanshin document is outside the scope of audit procedures conducted by certified public
accountants and the independent auditor.
* Explanation of the proper use of earnings projections and other notes
This document contains earnings projections and other information that constitute forward-looking statements. Thesestatements are based on reasonable assumptions and information currently available to the Company and provide
no guarantee of future performance. Actual results may differ materially from forward-looking statements due to anumber of factors. For more information about earnings projections, please refer to “1. Qualitative information on
consolidated results during the period, (3) Qualitative information on consolidated earnings projections” on page 3 ofthe attached documents.

Contents of Attached Document
1. Qualitative information on consolidated results during the period .................................................. 2(1) Qualitative information on consolidated results ............................................................................................. 2(2) Qualitative information on consolidated financial position ............................................................................ 2(3) Qualitative information on consolidated earnings projections ...................................................................... 3

2. Quarterly consolidated financial statements and related notes ........................................................ 4(1) Quarterly consolidated balance sheets ............................................................................................................ 4(2) Quarterly consolidated statements of income and comprehensive income ................................................. 6(3) Quarterly consolidated statements of cash flows ........................................................................................... 8(4) Notes on quarterly consolidated financial statements ................................................................................. 10(Notes on premise of a going concern) ................................................................................................................ 10(Notes on significant changes in the amount of shareholders’ equity) ................................................................. 10(Segment information, etc.) .................................................................................................................................. 10

1

1. Qualitative information on consolidated results during the period(1) Qualitative information on consolidated results
In the first six months of the fiscal year ending March 31, 2023, the global economy showed signs of a modest pickup,
but concerns about downside risks persisted due to inflation worldwide and supply-side disruptions caused by supplychain constraints. The Japanese economy also continued to face an uncertain outlook amid rising procurement costs
caused by the steep drop in the yen and signs of sluggish consumer spending and slowing corporate production
activity due to the impact of China’s zero-COVID policy, among other factors.
Against this backdrop, the Matsuda Sangyo Group’s precious metals business segment leveraged its uniquestrengths – integrated capabilities in resources recycling and high-performance electronic materials development –to step up marketing activities, while also actively using production sites in Japan and overseas to secure precious
metals materials, boost sales of products such as precious metal chemical products and expand its industrial waste
treatment outsourcing business. In addition, the food business segment responded dynamically to disruption in foodsupplies and rising procurement prices worldwide, aiming to increase sales volumes by sourcing products that meetincreasingly diverse customer needs and by ensuring stable supplies of safe and reliable food products.
As a result of the above, for the first six months of the fiscal year ending March 31, 2023, consolidated net sales
were ¥176,004 million (up 29.4% year on year), operating profit was ¥7,953 million (up 9.4% year on year), ordinary
profit was ¥8,128 million (up 3.7% year on year), and profit attributable to owners of parent was ¥5,634 million (up3.0% year on year).
Performance in the Matsuda Sangyo Group’s business segments was as follows.
Precious metals business segment
In the electronics sector, the key market for the precious metals business segment, automotive and smartphone
output was sluggish due to factors such as China’s zero-COVID policy and a shortage of semiconductors, but
production activity was strong in the semiconductor and electronic devices field, supported by continued firm demand,
particularly for data center applications. In addition, market prices for gold and other precious metals rose, spurredby accelerating inflation worldwide and heightened geopolitical risks.
In this operating environment, sales and operating profit both increased compared with the same period of theprevious fiscal year, reflecting higher volumes for precious metal recycling and industrial waste treated on an
outsourcing basis, as well as an increase in sales volumes for gold, silver and platinum group products and a rise insales prices in step with higher prices for gold and other precious metals.
As a result, net sales for the precious metals business segment totaled ¥126,985 million (up 31.3% year on year),and operating profit was ¥6,610 million (up 12.0% year on year).
Food business segment
In the food processing sector, the key market for the food business segment, there were signs of a pickup in demand
from food services and other industries as restrictions on mobility to control the spread of COVID-19 were lifted, butconditions continued to be challenging overall as consumers remained budget-conscious amid a string of price hikeannouncements in response to rising raw material prices and the sharp slide in the yen.
Against this backdrop, the food business segment reported higher sales compared with the same period of theprevious fiscal year, supported by an increase in sales volumes for seafood products and agricultural products andby broadly higher sales prices. However, operating profit declined compared with the same period of the previous
fiscal year due to increases in shipping costs and storage fees.
As a result, net sales for the food business segment were ¥49,058 million (up 24.6% year on year), and operating
profit was ¥1,343 million (down 1.8% year on year).

(2) Qualitative information on consolidated financial position(1) Assets, liabilities and net assets
AssetsTotal assets as of the end of the first six months were ¥135,708 million, an increase of ¥19,910 million from theprevious fiscal year end. This mainly reflected increases for notes and accounts receivable – trade, inventories, andproperty, plant and equipment such as land and buildings.
Liabilities
Total liabilities as of the end of the first six months were ¥54,179 million, an increase of ¥12,802 million from theprevious fiscal year end. This primarily reflected increases for accounts payable – trade and long- and short-termloans payable.

2Net assets
Net assets as of the end of the first six months were ¥81,528 million, an increase of ¥7,108 million from the previous
fiscal year end. This was mainly due to an increase in retained earnings.
Treasury shares were retired on August 22, 2022 in accordance with a resolution approved by the Board of
Directors on August 10, 2022. As a result, retained earnings and treasury shares each declined by ¥2,418 million.

(2) Cash flows status
As of the end of the first six months under review, the balance of cash and cash equivalents (hereafter, “cash”) stoodat ¥11,248 million, a decrease of ¥130 million from the previous fiscal year end.
Cash flows from operating activities
Operating activities used net cash of ¥3,754 million. This primarily reflected the difference between cash provided
from profit before income taxes, depreciation and increase in accounts payable – trade on the one hand, and cashused for increase in notes and accounts receivable – trade, increase in inventories, and income taxes paid on theother. Compared with the same period in the previous fiscal year, when operating activities provided net cash of¥8,475 million, cash from operating activities decreased by ¥12,230 million.
Cash flows from investing activities
Investing activities used net cash of ¥9,492 million. This was mainly due to the purchase of property, plant andequipment such as land and buildings. Compared with the same period in the previous fiscal year, when investing
activities used net cash of ¥1,188 million, cash used by investing activities increased by ¥8,303 million.
Cash flows from financing activities
Financing activities provided net cash of ¥12,379 million. This largely reflected increases in long- and short-termloans payable. Compared with the same period in the previous fiscal year, when financing activities used net cashof ¥5,114 million, cash from financing activities increased by ¥17,493 million.

(3) Qualitative information on consolidated earnings projections
For details about the Group’s consolidated earnings projections, please refer to the press release issued on
November 10, 2022, "Notice on the Differences Between Projections and Actual Resultsof the Consolidated Earnings for the Second Quarter of the Fiscal Year Ending March 31, 2023, andRevision of Consolidated Earnings Projections for the Full Year."Also, regarding dividends from surplus, the Company revised its forecast for the FY3/23 year-end dividend to ¥25
per share (increase of ¥1 per share). As a result, together with the interim dividend, the Company now forecasts anannual dividend of ¥50 per share. For further details, please refer to the press release issued on November 10, 2022," Notice of Decision on the Distribution of Interim Dividends and Revision of Year-end Dividend Forecast."3

2. Quarterly consolidated financial statements and related notes(1) Quarterly consolidated balance sheets(millions of yen)
End-FY3/22(As of March 31, 2022)

End-FY3/23 2Q(As of September 30, 2022)

AssetsCurrent assets
Cash and deposits

11,37911,248Notes and accounts receivable – trade26,10430,068Merchandise and finished goods

27,202

34,177Work in process

614

654

Raw materials and supplies

13,962

13,697

Accounts receivable - other

1,938

1,699

Others

4,918

5,722

(45)

(27)

86,073

97,241

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

12,633

13,854

Accumulated depreciation(6,061)(6,431)

Buildings and structures, net

6,572

7,423

Machinery, equipment and vehicles

12,65913,153

Accumulated depreciation(9,294)(9,956)

Machinery, equipment and vehicles, net

3,365

3,197

Land

8,768

16,929Leased assets

1,723

1,743

Accumulated depreciation

(899)

(982)

Leased assets, net

824

761

Construction in progress

994

809

1,537

1,634

(1,285)(1,388)252

246

20,77729,367

Others772

912

Total intangible assets

772

912

Investment securities

5,484

5,714

Deferred tax assets

819

638

Others
Accumulated depreciation
Others, net
Total property, plant and equipment
Intangible assets

Investments and other assets

Others

1,895

1,855

Allowance for doubtful accounts

(25)

(21)

Total investments and other assets

8,174

8,187

Total non-current assets

29,724

38,467

Total assets

115,797

135,7084

(millions of yen)
End-FY3/22(As of March 31, 2022)

End-FY3/23 2Q(As of September 30, 2022)

Liabilities
Current liabilities
Accounts payable – trade

11,231

12,946

Short-term loans payable

9,724

10,953Current portion of long-term loans payable

1,588

3,302

Lease obligations

302

266

Income taxes payable

3,128

2,739

Provision for bonuses

1,012

1,268

Accounts payable - other

1,312

645

Others

5,292

4,080

Total current liabilities

33,592

36,203

4,239

14,524535

508

Non-current liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities

12

9Provision for directors’ retirement benefits

742

765

Provision for executive officers’ retirement
benefits

25

18

2,111

2,050

117

100

7,784

17,976

41,37754,179Common stock

3,559

3,559

Capital surplus

4,008

4,008

Retained earnings

69,94072,529Treasury shares(3,413)(995)

Total shareholders’ equity

74,095

79,102

Valuation difference on available-for-salesecurities

580

533

Deferred gains or losses on hedges

(766)

(147)

Foreign currency translation adjustment

1,311

2,650

Remeasurements of defined benefit plans

(923)

(770)

Total accumulated other comprehensive income

202

2,265

122

160

74,42081,528

115,797

135,708

Net defined benefit liability
OthersTotal non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income

Non-controlling interests
Total net assets
Total liabilities and net assets5(2) Quarterly consolidated statements of income and comprehensive income[Quarterly consolidated statements of income](millions of yen)
FY3/22 2Q(April 1, 2021 –September 30, 2021)

FY3/23 2Q(April 1, 2022 –September 30, 2022)

Net sales

136,041

176,004

Cost of sales

120,316

158,404

Gross profit

15,725

17,600

Selling, general, and administrative expenses

8,456

9,646

Operating profit

7,269

7,953

Interest income

44Dividend income

20

21

-

40

213

296

Purchase discounts

77Foreign exchange gains

Non-operating income

Gain on sale of investment securities
Share of profit of entities accounted for using
equity method

2-

Subsidy income

326-

Others27

47

Total non-operating income

601

418

Non-operating expenses
28

95

Foreign exchange losses-

116

Others732

Total non-operating expenses

36

244

Ordinary profit

7,834

8,128

Profit before income taxes

7,834

8,128

Interest expenses

Income taxes – current

2,505

2,611

Income taxes – deferred

(151)

(141)

Total income taxes

2,354

2,470

Profit

5,480

5,657

10

23

5,469

5,634

Profit attributable to non-controlling interests
Profit attributable to owners of parent

6

[Quarterly consolidated statements of comprehensive income](millions of yen)
FY3/22 2Q(April 1, 2021 –September 30, 2021)
ProfitFY3/23 2Q(April 1, 2022 –September 30, 2022)

5,480

5,657

Valuation difference on available-for-salesecurities

74

(47)

Deferred gains or losses on hedges

773

618

Foreign currency translation adjustment

317

1,182

Remeasurements of defined benefit plans

141

151

Share of other comprehensive income ofentities accounted for using equity method

17

173

1,324

2,077

6,805

7,735

6,795

7,696

9

38

Other comprehensive income

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to ownersof parent
Comprehensive income attributable to noncontrolling interests7(3) Quarterly consolidated statements of cash flows(millions of yen)
FY3/22 2Q(April 1, 2021 –September 30,
2021)

FY3/23 2Q(April 1, 2022 –September 30,
2022)

Cash flows from operating activities
Profit before income taxes

7,834

8,128

Depreciation

1,024

1,111

Increase (decrease) in allowance for doubtful accounts

(69)

(21)

Increase (decrease) in provision for bonuses

223

256

Increase (decrease) in net defined benefit liability

132

154

Increase (decrease) in provision for directors’ retirement benefits

19

22

Increase (decrease) in provision for executive officers’ retirement
benefits

3(7)

Interest and dividend income

(24)

(25)

Interest expenses

28

95

Share of (profit) loss of entities accounted for using equity method

(213)

(296)

Subsidy income

(226)

-

Decrease (increase) in notes and accounts receivable – trade(638)(3,546)

Decrease (increase) in accounts receivable - other

(630)

245

Decrease (increase) in inventories

3,101(6,278)

Increase (decrease) in accounts payable – trade

(100)

1,399

Others(516)(2,121)

Subtotal

9,949

(884)

Interest and dividend income received

113

190

Interest paid

(29)

(89)

Income taxes paid

(1,558)(2,970)Net cash provided by (used in) operating activities

8,475(3,754)(985)(9,383)

2

0

(167)

(223)

(7)

(9)

-

57

(30)

64

(1,188)(9,492)

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
OthersNet cash provided by (used in) investing activities8

(millions of yen)
FY3/22 2Q(April 1, 2021 –September 30,
2021)

FY3/23 2Q(April 1, 2022 –September 30,
2022)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable(3,625)

1,150

Proceeds from long-term loans payable-

13,500

Repayments of long-term loans payable(794)(1,501)

Cash dividends paid

(521)

(626)

(0)

(0)

(171)

(143)

(5,114)

12,379154

737

Purchase of treasury shares
OthersNet cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents

2,327

(130)

Cash and cash equivalents at beginning of period

8,803

11,379Cash and cash equivalents at end of period

11,131

11,2489

(4) Notes on quarterly consolidated financial statements(Notes on premise of a going concern)
There is nothing to report.

(Notes on significant changes in the amount of shareholders’ equity)
There is nothing to report.

(Segment information, etc.)
I. FY3/22 2Q (April 1, 2021 – September 30, 2021)
1. Information for net sales and profit/loss for each reportable segment(millions of yen)Amountrecorded onquarterly
consolidated
statements ofincomeReportable Segments
Precious
metalsbusinesssegment

Adjustments
Food businesssegment

Note 1

Total

Note 2

Net sales
Net sales to external
parties
Net sales &remittances between
segments

96,701

39,339136,041-

136,041

-

38

38

(38)

-

Total

96,70139,378136,079(38)

136,041

Segment profit

5,901

1,368

7,269

-

7,269

(Notes)1. Adjustments correspond to the elimination of transactions and remittances between segments.
2. Total segment profit matches operating profit recorded on the quarterly consolidated statements
of income.

II. FY3/23 2Q (April 1, 2022 – September 30, 2022)
1. Information for net sales and profit/loss for each reportable segment(millions of yen)Amountrecorded onquarterly
consolidated
statements ofincomeReportable Segments
Precious
metalsbusinesssegment

Adjustments
Food businesssegment

Note 1

Total

Note 2

Net sales
Net sales to external
parties
Net sales &remittances between
segments

126,985

49,018176,004-

176,004

-

40

40

(40)

-

Total

126,985

49,058176,044(40)

176,004

Segment profit

6,610

1,343

7,953

-

7,953

(Notes) 1. Adjustments correspond to the elimination of transactions and remittances between segments.
2. Total segment profit matches operating profit recorded on the quarterly consolidated statements
of income.

10