February 12, 2021

Consolidated Financial Results
for the Nine Months Ended December 31, 2020
(Japanese Accounting Standards)
Name of the Listed Company: Nitta Gelatin Inc.
Listing:First Section of Tokyo Stock Exchange
Stock code:
4977
URL:
http://www.nitta-gelatin.co.jp
Representative:
Koichi Ogata, Representative Director and President
Contact Person:
Norifumi Nagaoka, Director and Executive Officer;
General Manager of General Management Division
Tel: +81-72-949-5381
Scheduled date to file Quarterly Securities Report: February 12, 2021
Scheduled date to commence dividend payments: —Supplementary explanatory materials prepared:No
Explanatory meeting:
No(Millions of yen with fractional amounts discarded, unless otherwise noted.)

1. Consolidated financial results for the nine months ended December 31, 2020
(April 1, 2020 to December 31, 2020)(1) Consolidated operating results(Percentages indicate year-on-year changes.)

Net sales
Nine months ended
December 31, 2020
December 31, 2019

Millions of yen%

Operating income

Ordinary income

Net income
attributable toowners of the parent

Millions of yen

Millions of yen%

Millions of yen%(33.3)
234.2

600
(733)

—
—

%

23,139(13.0)
1,111(20.2)
1,059
26,594
(1.8)
1,393
166.5
1,588
Note: Total comprehensive income
For the nine months ended December 31, 2020: ¥838 million (up 18.4%)
For the nine months ended December 31, 2019: ¥708 million (down 7.6%)

Net income per
share
Nine months ended
December 31, 2020
December 31, 2019

Diluted net income
per share

Yen

Yen

33.13
—
(39.90)—Note: Diluted net income per share is not disclosed due to the absence of latent shares with dilution effect.

(2) Consolidated financial position
As ofDecember 31, 2020
March 31, 2020

Total assets

Net assets

Millions of yen

Millions of yen

34,06233,551

17,85817,461

Reference: Equity
As of December 31, 2020:
As of March 31, 2020:¥15,909 million¥15,667 million

Equity ratio
%

46.7
46.7

2. Cash dividends
Cash dividends per shareFirst quarter

Second quarter

Yen

Fiscal year ended
March 31, 2020
Fiscal year ending
March 31, 2021
Fiscal year ending March
31, 2021 (Forecasts)

Third quarter

Yen

Fiscal year-end

Yen

—

6.00

—

—

6.00

—

Annual

Yen

Yen

6.00

12.00

6.00

12.00

Note: Changes to most recent dividend forecasts: None

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2021
(April 1, 2020 to March 31, 2021)(Percentages indicate year-on-year changes)

OperatingincomeNet sales

Full-year

Ordinary income

Net income
attributable toowners of theparentMillionsof yen%Millionsof yen%Millionsof yen%Millionsof yen%31,500

(8.8)

1,300

(23.1)

1,200(33.3)

800—

Net income
per share
Yen

44.26

Note: Changes to most recent consolidated financial forecasts: None

Notes:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in achange in the scope of consolidation): None
New:
None
Excluded:None(2) Adoption of special accounting methods for the preparation of quarterly consolidated financial
statements: None
(3) Changes in accounting policies, changes in accounting estimates, and restatement of revisions
a. Changes in accounting policies due to revisions to accounting standards and other guidelines:
Noneb. Changes in accounting policies due to reasons other than a. above: Nonec. Changes in accounting estimates: None
d. Restatement of revisions: None
(4) Number of common shares issued
a. Total number of issued shares at the end of the period (including treasury stock)
As of December 31, 2020:
18,373,974 shares
As of March 31, 2020:
18,373,974 sharesb. Number of shares of treasury stock at the end of the period
As of December 31, 2020:
299,467 shares
As of March 31, 2020:
167 sharesc. Average number of shares
For the nine months ended December 31, 2020:
18,117,457 shares
For the nine months ended December 31, 2019:18,373,811 shares* This financial report falls outside the scope of quarterly review procedures by Certified Public Accountantsor the independent auditor.
* Proper use of earnings forecasts, and other special matters(Note concerning forward-looking statements)
The forward-looking statements, including earnings forecasts, contained in these materials are based on information
currently available to the Company and on certain assumptions deemed to be reasonable. These statements do notguarantee that the Company will achieve its earnings forecasts. In addition, actual business and other results may differ
substantially due to various factors. For details on the conditions assumed and the cautionary notes and items in thefinancial forecasts, please refer to “(3) Description of Consolidated Business Forecasts and Other Forward-looking
Information” in “1. Qualitative Information Concerning Quarterly Financial Statements” on page 4 of the Attachment tothis report.

Contents
1. Qualitative Information Concerning Quarterly Financial Statements ········································ 2(1)Description of Business Results ············································································ 2(2)Description of Financial Position ·········································································· 3(3)Description of Consolidated Business Forecasts and Other Forward-looking Information ········ 4

2. Quarterly Consolidated Financial Statements and Key Notes ················································· 5(1)Consolidated Balance Sheets ··············································································· 5(2)Consolidated Statements of Income and Consolidated Statements of Comprehensive Income··· 7
Consolidated Statements of Income(Third quarter consolidated cumulative accounting period) ············································ 7
Consolidated Statements of Comprehensive Income(Third quarter consolidated cumulative accounting period) ············································ 8(3)Notes to Quarterly Consolidated Financial Statements ················································· 9(Note Concerning Going Concern Assumption) ························································· 9(Note Concerning Significant Changes in Shareholders’ Equity) ····································· 9(Additional Information) ···················································································· 9(Segment Information) ······················································································ 9(Subsequent Events) ······················································································· 10

11. Qualitative Information Concerning Quarterly Financial Statements(1) Description of Business Results
In the first nine months of the fiscal year ending March 31, 2021 (April 1 to December 31, 2020),
the state of the global economy became even more tumultuous amid the stagnation ofsocioeconomic activities caused by the resurgence of COVID-19 cases in developed countries.
The Japanese economy was in the process of recovery mainly thanks to the restart of economic
activities and measures to spark demand for tourism, but the resurgence of COVID-19 cases
nationwide caused another economic slowdown, resulting in an even cloudier outlook for the
future.
The Group believes that preventing the spread of infection to business partners and employees
is a top priority. Accordingly, the Group worked hard to maintain and enhance various businessactivities such as production, sales and distribution while proactively adopting telework, flexible
work arrangements and web conferences in order to avoid the so-called three Cs: closed spaces,
crowded places, and close-contact settings. In addition, to achieve the commitment of supporting
athletes through the collagen business, the Group concluded a sponsorship agreement with auniversity team appearing in the 2021 Hakone Ekiden long distance relay and provided products
to sports teams. Furthermore, to further focus on core domains, the Group passed a resolution on
November 19, 2020 to execute an absorption-type merger of its wholly owned subsidiary Nitta
Biolab Inc. and another resolution on December 17, 2020 to transfer its adhesives business(manufacturing) to Bostik-Nitta Co., Ltd., an associate accounted for using the equity method.
In this environment, the food and health food industries, the Group’s main business partners,
were impacted substantially due to the entrenchment of working from home and the loss of
in-bound tourism demand. Meanwhile, there were signs of a recovery in the food-service industry
due to the Go To campaign by the national government to promote leisure activities, but demand
for foods from hotels, restaurants and cafes (HORECA market) declined mainly due to reduced
business hours caused by the resurgence of infections. The Group’s net sales declined 13.0% year
on year to ¥23,139 million due to the impact of its withdrawal from the collagen casing businessin the previous year and other reasons. Additionally, due to the decline in net sales, operating
income fell 20.2% to ¥1,111 million and ordinary income dropped 33.3% to ¥1,059 million,
while net income attributable to owners of parent totaled ¥600 million, compared to a net loss
attributable to owners of parent in the previous year of ¥733 million.
The Nitta Gelatin Group’s collagen business has become the Company’s only reporting
segment, but an overview of the performance of each sales category is as follows:
Food solutions
In the food solutions category, net sales declined due the impacts of lower sales in Japan and thewithdrawal from the collagen casing business.
In Japan, sales of gelatin for use at home in confectioneries and cooking continued to increase2

amid rising demand for making sweets at home due to stay-at-home demand caused by the
COVID-19 pandemic. However, sales declined for gelatin for gummy candy eaten by people
when out or on the go, gelatin for soups and seasonings for food-service industry, and gelatin foruse in delicatessen items for convenience stores mainly because demand continued to decline dueto the entrenchment of working from home, voluntary restraint from going out, and reduced
business hours in the food-service industry.
Overseas, sales to the markets for gummy candy, jelly confectioneries and other applications
were solid in the North America due to the increased stay-at-home hours, but there was asubstantial decline in net sales in the first nine months of the fiscal year caused by the withdrawal
from the collagen casing business in the previous fiscal year.
As a result, overall sales in the food solutions category fell 24.8% year on year to ¥8,519
million.
Health support
In the health support category, net sales were largely on par with the same period of the previous
fiscal year as the increase in sales of collagen peptide for health and beauty applications in Asia
helped to offset the decline in sales in Japan.
In Japan, sales of gelatin for capsules and collagen peptide for health and beauty applications
declined due to the loss of in-bound tourism demand and the decline in in-store sales at
drugstores and others caused by the COVID-19 pandemic.
Overseas, in North America sales of gelatin for capsules increased on people’s risingawareness toward health upkeep and prevention caused by the COVID-19 pandemic, but in-store
sales of collagen peptide health and beauty products declined, causing net sales to decline overall.
In Asia, in addition to sales promotions to advertise the functionality of collagen peptide forhealth and beauty applications, sales of Halal-certified gelatin for capsules increased. In India,
sales of capsules for pharmaceutical and health food applications declined.
As a result, overall sales in the health support category increased 0.2% year on year to ¥10,892
million.
Specialties
In the specialties category, overall sales decreased 15.2% year on year to ¥3,726 million due to adecrease in sales of packaging adhesives and a decrease in sales of gelatin for photography
applications caused by people’s voluntary restraint from going out.

(2) Description of Financial Position(Assets)
Total assets amounted to ¥34,062 million at December 31, 2020, ¥510 million higher than at
March 31, 2020. This was mainly attributable to an increase in cash and deposits of ¥1,477
million compared to a decrease in inventories of ¥597 million and property, plant and equipment3

of ¥375 million.
(Liabilities)
Total liabilities stood at ¥16,203 million at December 31, 2020, ¥113 million higher than at
March 31, 2020. This was mainly attributable to an increase in long-term loans payable of ¥961
million compared to decreases in notes and accounts payable-trade of ¥309 million, short-termloans payable of ¥184 million and other current liabilities of ¥372 million.
(Net assets)
Total net assets amounted to ¥17,858 million at December 31, 2020, ¥397 million higher than at
March 31, 2020. This was mainly attributable to increases in retained earnings of ¥381 million,
remeasurements of defined benefit plans of ¥71 million, and non-controlling interests of ¥155
million, which offset a decrease of ¥199 million in purchase of treasury stock.
As a result, the equity ratio stood at 46.7% at December 31, 2020, the same ratio as at March
31, 2020.

(3) Description of Consolidated Business Forecasts and Other Forward-looking
Information
The consolidated earnings forecast for the fiscal year ending March 31, 2021 is unchanged fromthe consolidated earnings forecast announced on June 24, 2020 in the “Consolidated Financial
Results for the Fiscal Year Ended March 31, 2020.”
Actual business and other results may differ substantially from projections due to various
factors.

4

2. Quarterly Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheets(Millions of yen)

Fiscal 2020
(As of March 31, 2020)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable–trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

5

3Q Fiscal 2021
(As of December 31, 2020)

1,414
7,677
5,674
1,284
2,786
499
(15)
19,322

2,891
7,734
5,611
1,127
2,409
463
(14)
20,224

3,354
2,779
3,049
9,183

3,106
2,452
3,248
8,808

300
220
521

252
210
462

2,883
1,746
(105)
4,524
14,22933,551

2,947
1,719
(100)
4,566
13,83734,062

(Millions of yen)

Fiscal 2020
(As of March 31, 2020)
Liabilities
Current liabilities
Notes and accounts payable–trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Net defined benefit liability
Other
Total noncurrent liabilities
Total liabilities
Net Assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on other available-for-salesecurities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6

3Q Fiscal 2021
(As of December 31, 2020)

3,617
1,844
2,358
107
219
2,525
10,672

3,308
1,660
2,390
189
134
2,152
9,835

3,225
1,647
545
5,417
16,090

4,186
1,646
535
6,368
16,203

3,144
2,966
9,166
(0)
15,278

3,144
2,966
9,548
(200)
15,459

920

932

(47)
(346)
(137)
389
1,793
17,461
33,551

(10)
(407)
(65)
449
1,949
17,85834,062

(2) Consolidated Statements of Income and Consolidated Statements ofComprehensive Income
Consolidated Statements of Income(Third quarter consolidated cumulative accounting period)(Millions of yen)

Nine Months Ended
December 31, 2019
(From April 1, 2019 to
December 31, 2019)
26,59420,904

Net sales
Cost of sales

Nine Months Ended
December 31, 2020
(From April 1, 2020
to December 31, 2020)
23,13918,397Gross profit on sales

5,689

4,741

Selling, general and administrative expenses

4,296

3,630

Operating income

1,393

1,111

Non-operating income
Interest income
Dividend income
Foreign exchange gains
Equity in earnings of affiliates
Other

5
42
53
150
93

4
40
50
92

Total non-operating income

345

186

Non-operating expenses
Interest expenses
Foreign exchange losses
Other

133
16

83
146
8

Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sales of noncurrent assets
Reversal of allowance for doubtful accounts
Gain on sales of stocks of subsidiaries and associates
Total extraordinary gains
Extraordinary losses
Loss on retirement of noncurrent assets
Loss on sales of stocks of subsidiaries and associates
Impairment loss

149

238

1,588

1,059

18
29
6

-

54

-

4
2,752
-

4
44

Total extraordinary losses
Income (loss) before provision of income taxes

2,757

48

(1,113)

1,011

Income taxes

(551)

248

Net income (loss)

(562)

762

Net income attributable to non-controlling interests

171

162

Net income (loss) attributable to owners of the parent

(733)

600

7

Consolidated Statements of Comprehensive Income(Third quarter consolidated cumulative accounting period)(Millions of yen)

Nine Months Ended
December 31, 2019
(From April 1, 2019
to December 31, 2019)(562)

Net income (loss)
Other comprehensive income
Valuation difference on other available-for-salesecurities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Pension liability adjustment
Share of other comprehensive losses of associates
accounted
using equity method
Total otherfor
comprehensive
incomeTotal comprehensive income
Comprehensive income attributable to:
Owners of the parent
Non-controlling interests

8

Nine Months Ended
December 31, 2020
(From April 1, 2020
to December 31, 2020)
762

(70)

13

(14)
(440)
1,817
(21)
1,270
708

87
(85)
67
(7)
75
838

621
86

660
177

(3) Notes to Quarterly Consolidated Financial Statements(Note Concerning Going Concern Assumption)
None(Note Concerning Significant Changes in Shareholders’ Equity)
The Company purchased 299,300 shares of treasury stock based on a resolution at the Boardof Directors meeting held on March 27, 2020. As a result, treasury stock increased ¥199
million in the first nine months of the year ending March 31, 2021, resulting in a balance of¥200 million as of December 31, 2020.
The purchase of treasury stock in accordance with the aforementioned resolution ended on
May 29, 2020.
(Additional Information)
The Group assumed as of March 31, 2020 that the impacts of the COVID-19 pandemic would
begin to be reined in around summer, but as of December 31, 2020, there was a high degree of
uncertainty caused by the growing impacts of COVID-19 and its protraction. COVID-19 is an
event that has had wide-reaching impacts on economic and corporate activities. As a result, it
is difficult to predict the future spread of the virus and when it will be reined in. The Group
expects that heading into the end of this fiscal year in March 2021 the management
environment will gradually return to normal prior to the spread of the pandemic. For thisreason, the Company will not change its assumption that the impacts will ease in the fiscal
year ending March 31, 2022 and has performed its accounting estimates accordingly,
including evaluation of the recoverability of deferred tax assets.
(Segment Information)
I. Nine Months Ended December 31, 2019
(From April 1, 2019 to December 31, 2019)
The Nitta Gelatin Group’s collagen business has become the Company’s only reporting
segment, so information is omitted.
II. Nine Months Ended December 31, 2020
(From April 1, 2020 to December 31, 2020)
The Nitta Gelatin Group’s collagen business has become the Company’s only reporting
segment, so information is omitted.

9

(Subsequent Events)
Business divestiture
The Company carried out a company split effective February 1, 2021 in which Bostik-Nitta
Co., Ltd. was the successor company and the Company’s adhesives business (manufacturing)
was the splitting company, pursuant to the resolution passed at the Board of Directors meeting
held on December 17, 2020.
1. Outline of Business Divestiture(1) Name of company that succeeded the divested business
Bostik-Nitta Co., Ltd.
(2) Business description of divested business
Adhesives business (manufacturing)(3) Primary reason for business divestiture
The Company divested its adhesives business (excluding manufacturing) to Bostik-Nitta
Co., Ltd. on August 1, 2018 by executing a simple absorption-type split as the first stageof transferring the Company’s adhesives business to Bostik-Nitta Co., Ltd., with the goalof pursuing the greater growth of the adhesives business. Afterwards, construction of anew plant for the adhesives business was completed at the site of the plant that was soldby the Company, and the new plant is now in full commercial operation.
As a result, as the second stage for transferring the Company’s adhesives business to
Bostik-Nitta Co., Ltd., an agreement was reached between the Company and Bostik-Nitta
Co., Ltd. to transfer assets and liabilities related to the manufacturing aspect of theCompany’s adhesives business; contractual status, rights and obligations; and employees
mainly engaged in manufacturing to Bostik-Nitta Co., Ltd. using a company split.
(4) Date of business divestiture
February 1, 2021
(5) Outline of the transaction including legal format
A business transfer in which consideration is received solely in assets such as cash
2. Outline of accounting treatment(1) Amount of loss on transfer of business (planned)¥ 0 million

10(2) Appropriate book values of assets and liabilities of business transferred and major
components (planned)
Current assets¥454 million
Noncurrent assets
1
Total assets
455
Current liabilities
10
Noncurrent liabilities
96
Total liabilities
117(3) Accounting treatment
The difference between the consideration for the transfer and the amount equivalent toshareholders’ equity related to the transferred business will be booked in the fourth
quarter of the fiscal year ending March 31, 2021.
3. Name of reporting segment in which the divested business was included
The Nitta Gelatin Group’s collagen business has become the Company’s only reporting
segment, so there are no relevant items to disclose.
4. Estimated net sales and operating loss attributable to the divested business recorded on the
consolidated statement of income for the period under review
Third quarter cumulative accounting period
Net sales¥1,842 million
Operating loss
¥123 million

11