February 14, 2022

Consolidated Financial Results
for the Nine Months Ended December 31, 2021
(Japanese Accounting Standards)
Name of the Listed Company:
Listing:
Stock code:
URL:
Representative:
Contact Person:

Nitta Gelatin Inc.

First Section of Tokyo Stock Exchange4977
http://www.nitta-gelatin.co.jp
Koichi Ogata, Representative Director and President
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 14, 2022
Scheduled date to commence dividend payments: —Supplementary explanatory materials prepared:No
Explanatory meeting:
No(Millions of yen with fractional amounts discarded, unless otherwise noted.)

Consolidated financial results for the nine months ended December 31, 2021
(April 1, 2021 to December 31, 2021)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
Net sales
Nine months ended
December 31, 2021
December 31, 2020

Millions of yen%

Operating income

Ordinary income

Net income
attributable toowners of the parent

Millions of yen

Millions of yen%

Millions of yen%

12.5(33.3)

622
600

3.7
—

%

23,095
(0.1)
1,010
(9.1)
1,192
23,122—
1,111(20.2)
1,059
Note: Comprehensive income
For the nine months ended December 31, 2021: ¥1,349 million (61.0%)
For the nine months ended December 31, 2020: ¥838 million (–18.4%)

Earnings per share
Nine months ended
December 31, 2021
December 31, 2020

Diluted earnings per
share

Yen

34.39
33.13

Yen

—
—

Notes 1. Diluted net income per share is not disclosed due to the absence of latent shares with dilution effect.
2. The Company has applied “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29; March 31,2020) from the beginning of the first quarter. Numerical indicators for the first nine months ended December 31,
2020 have been calculated after retroactively applying this accounting standard. For net sales, the year-on-year
rate of change has been omitted.

(2) Consolidated financial position
As ofDecember 31, 2021
March 31, 2021

Total assets

Net assets

Millions of yen

Millions of yen

35,857
34,915

19,96918,873

Reference: Equity
As of December 31, 2021:
As of March 31, 2021:

Equity ratio
%

49.3
48.1

¥17,681 million¥16,794 million

2. Cash dividends
Cash dividends per shareFirst quarter

Second quarter

Yen

Fiscal year ended March
31, 2021
Fiscal year ending March
31, 2022

Third quarter

Yen

Fiscal year-end

Yen

—

6.00

—

—

7.00

—

Fiscal year ending March
31, 2022 (Forecasts)

Annual

Yen

Yen

6.00

12.00

7.00

14.00

Note: Changes to most recent dividend forecasts: None

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2022
(April 1, 2021 to March 31, 2022)
OperatingincomeNet sales

Full-year(Percentages indicate year-on-year changes.)
Net income
Earnings per
attributable toOrdinary income
owners of theshareparentMillionsof yen%Millionsof yen%Millionsof yen%Millionsof yen%29,500

(3.3)

1,350

(0.5)

1,350

(1.0)

900

21.3

Yen

49.71

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: Yes
b. 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, 2021: 18,373,974 shares
As of March 31, 2021:
18,373,974 sharesb. Number of shares of treasury stock at the end of the period
As of December 31, 2021:
268,739 shares
As of March 31, 2021:
299,467 sharesc. Average number of shares
As of December 31, 2021: 18,092,966 shares
As of December 31, 2020: 18,117,457 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. Thesestatements do not guarantee that the Company will achieve its earnings forecasts. In addition, actual businessand other results may differ substantially due to various factors. For details on the conditions assumed andthe cautionary notes and items in the financial 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 to this 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. Basic Approach to Selection of Accounting Standard ······················································4
3. 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) ········································7Consolidated 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(Changes in Accounting Policies) ······································································9(Additional Information) ·············································································· 10(Segment Information) ················································································· 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, 2022 (April 1 to December 31, 2021), theglobal economy experienced a strong recovery, amid economic expansion in the United States, Europe
and China, despite a resurgence in COVID-19 cases caused by new variants. The Japanese economy
experienced a temporary recovery after signs of an end to the COVID-19 pandemic, but amid ongoing
logistics disruptions around the world uncertainty about the future increased due to not only soaring raw
materials and transportation costs, but also growing instability in crude oil prices and foreign exchange
markets.
In this environment, the Group launched a new three-year medium-term management plan in May 2021.
The management policies for the Group set out in this medium-term management plan are presented
below.
1. Strategic allocation of management resources to key markets to create a high-profit enterprise
2. Strengthening of the organizational foundation to face challenges positively
3. Strengthening ties with stakeholders to be a valuable company
Under this management policy, we worked to expand sales of high value-added products in mainstay
markets in each domain including the core categories of food solutions, health support, and biomedical.
Additionally, we worked to improve the visibility of our company and products by increasing advertisingof products geared toward general consumers, sharing information on social media, and actively
addressing media requests from TV news programs. Following the decision by the Tokyo Stock Exchange(TSE) to reorganize into new market segments in April 2022, the meeting of the Board of Directors held
on December 16, 2021 resolved to select the Prime market category andwe submitted the “Plan forCompliance with the Continued Listing Requirements for New Market Segments” to TSE.
As a result, net sales decreased 0.1% year on year to ¥23,095 million due to the decline in sales
associated with the transfer of the adhesives business in the previous fiscal year, which offset sales growthof food solutions and health support. Operating income decreased 9.1% to ¥1,010 million due to theimpacts of an increase in raw materials and transportation costs, etc., ordinary income increased 12.5% to¥1,192 million attributed to the booking of foreign exchange gains, and accordingly, net income
attributable to owners of the parent increased 3.7% to ¥622 million.
The Nitta Gelatin Group's collagen business is the Company’s only reporting segment. An overview ofthe performance of each sales category is as follows:2

Food Solutions
In the food solutions category, sales were strong in Japan and rose in North America, resulting in an
increase in overall sales for the segment.
In Japan, sales of products for use in gummy candies increased, driven by the consistently strong salesof new products by customers. In addition, net sales were buoyed by the success of increased sales of
products for use in frozen foods amid stronger demand and for use in direct marketing sales in the
food-service industry. Meanwhile, sales of products for delicatessen items for convenience stores were on
par with the same period of the previous year.
Overseas, net sales increased on robust demand for food applications in North America.
As a result, overall sales in the food solutions category increased 8.8% year on year to ¥9,254 million.
Health Support
In the health support category, sales from exports of gelatin for capsules declined due to ongoing
disruptions in maritime container transportation, but sales of collagen peptide for health and beauty
applications increased overseas and in Japan, and there was sales growth of biomedical products,
resulting in a net increase in sales for the segment.
In Japan, there was a recovery in in-store sales while sales of new collagen products for customers
remained strong, helping to boost net sales of collagen peptide for health and beauty applications andgelatin for capsules. Additionally, net sales of collagen and gelatin for medical applications increased due
to new sales expansion geared toward medical devices.
Overseas, net sales of collagen peptide products for health and beauty applications in North America
were on par with the previous 3Q, and in Asia, sales of collagen peptide for health and beauty
applications that advertise functionality increased, resulting in higher net sales. Meanwhile, net sales ofgelatin for capsules declined amid disruptions in maritime container transportation, despite strong demand
from rising health consciousness and infection prevention needs during the COVID-19 pandemic. In India,
net sales increased due to firm sales for capsules for pharmaceutical and health food applications andexpanded sales of collagen peptide.
As a result, overall sales in the health support category increased 3.2% year on year to ¥11,244
million.
Specialties
In the specialties category, overall sales decreased 30.3% year on year to ¥2,596 million. This was due tothe decrease in net sales from the completion of the transfer of the adhesives business in the previous
fiscal year, despite an increase in net sales of gelatin for photography applications due to the easing of thestay-at-home trend.

3(2) Description of Financial Position(Assets)
Total assets amounted to ¥35,857 million at December 31, 2021, ¥942 million higher than at March 31,
2021. This was mainly attributable to a decrease in cash and deposits of ¥1,312 million compared to anincrease in trade notes and accounts receivable of ¥471 million, inventories of ¥1,003 million, property,
plant and equipment of ¥520 million, and investment securities of ¥377 million.
(Liabilities)
Total liabilities stood at ¥15,888 million at December 31, 2021, ¥153 million lower than at March 31,
2021. This was mainly attributable to decreases in and in trade notes and accounts payable of ¥331
million and long-term loans payable of ¥452 million (including loans repayable within one year),compared to an increase in other current liabilities of ¥768 million.
(Net assets)
Total net assets amounted to ¥19,969 million at December 31, 2021, ¥1,095 million higher than at March
31, 2021. This was mainly attributable to increases in retained earnings of ¥386 million, valuationdifference on other available-for-sale securities of ¥209 million, foreign currency translation adjustmentsof ¥237 million, and non-controlling interests of ¥208 million.
As a result, the equity ratio stood at 49.3% at December 31, 2021, compared to 48.1% at March 31,
2021.

(3) Description
InformationofConsolidated

Business

Forecasts

and

Other

Forward-looking

The consolidated earnings forecast for the fiscal year ending March 31, 2022 is unchanged from theconsolidated earnings forecast announced on May 13, 2021 in the “Consolidated Financial Results for the
Fiscal Year Ended March 31, 2021.”
Actual business and other results may differ substantially from projections due to various factors.

2. Basic Approach to Selection of Accounting Standard
The Nitta Gelatin Group plans to prepare its consolidated financial statements based on Japanese
accounting standards in the near future. This is in consideration of the need to ensure that the consolidated
financial statements can be readily compared between different periods and different companies.
Looking ahead, considering its management policies and various conditions in Japan and abroad, Nitta
Gelatin plans to examine the adoption of International Financial Reporting Standards (IFRS). In doing so,
the Group will take into account trends such as the adoption of IFRS by its peer companies.

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

Fiscal 2021
(As of March 31, 2021)

3Q Fiscal 2022
(As of December 31, 2021)

4,024
6,944
5,069
1,201
2,582
459
(15)
20,266

2,711
7,415
5,712
1,280
2,863
546
(15)
20,514

3,311
2,670
3,127
9,109

3,370
2,374
3,884
9,630

257
244
502

230
235
466

3,205
1,938
(106)
5,036
14,64834,915

3,582
1,774
(110)
5,246
15,34235,857

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

(Millions of yen)

Fiscal 2021
(As of March 31, 2021)

3Q Fiscal 2022
(As of December 31, 2021)

2,953
1,964
2,080
194
209
2,228
9,630

2,621
2,006
2,054
118
141
2,997
9,938

3,925
1,598
886
6,410
16,041

3,499
1,605
844
5,949
15,888

3,144
2,966
9,690
(200)
15,601

3,144
2,965
10,077(179)
16,008

1,125

1,335

3
(82)
145
1,192
2,079
18,87334,915

(5)
155
187
1,672
2,288
19,96935,857

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

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

Nine Months Ended
December 31, 2020
(From April 1, 2020
to December 31, 2020)
23,122
18,397

Nine Months Ended
December 31, 2021
(From April 1, 2021
to December 31, 2021)
23,095
18,113Gross profit on sales

4,725

4,981

Selling, general and administrative expenses

3,613

3,970

Operating income

Net sales
Cost of sales

1,111

1,010

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

4
40
25
50
66

2
45
43
143
40

Total non-operating income

186

274

Non-operating expenses
Interest expenses
Foreign exchange losses
Equity in losses of affiliates
Other

83
146
8

75
10
6

Total non-operating expenses

238

92

1,059

1,192

-

0

-

0

4
44

0
52
-

48

52

Ordinary income
Extraordinary gains
Gain on sales of noncurrent assets
Total extraordinary gains
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of noncurrent assets
Impairment loss
Total extraordinary losses
Income before provision for income taxes

1,011

1,140

Income taxes

248

322

Net income

762

817

Net income attributable to non-controlling interests

162

195

Net income attributable to owners of the parent

600

622

7

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

Net income
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 for using equity method

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

Nine Months Ended
December 31, 2021
(From April 1, 2021
to December 31, 2021)
817

13

209

87
(85)
67

(6)
219
33

(7)

75

75
838

531
1,349

660
177

1,102
247

Total other comprehensive income
Total comprehensive income
Comprehensive income attributable to:
Owners of the parent
Non-controlling interests8(3) Notes to Quarterly Consolidated Financial Statements(Note Concerning Going Concern Assumption)
None(Note Concerning Significant Changes in Shareholders’ Equity)
The Company disposed of 30,800 shares of treasury stock effective July 30, 2021 as restricted
share-based remuneration based on a resolution at the Board of Directors meeting held on July 15, 2021.
As a result, both capital surplus and treasury stock decreased by ¥0 million and ¥20 million, respectively,in the first nine months of the fiscal year ending March 31, 2022, resulting in balances of ¥2,965 and¥179 million, respectively, as of December 31, 2021.
(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition, etc.)
The Company applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29,
March 31, 2020, ASBJ; below, “Accounting Standard for Revenue Recognition”) from the start of thefirst quarter. The Company now recognizes revenue in the amount expected to be received in exchange
for goods and services at the point in time when the control of the promised goods and services aretransferred to the customer.
As a result, sales commissions and sales promotion costs conventionally recorded in selling, generaland administrative expenses have been deducted from net sales.
This change in accounting policy is applied retroactively, in principle, and the quarterly consolidated
financial statements and consolidated financial statements reflect this change for the previous quarters andprevious fiscal year. However, the following methods are applied as stipulated in Paragraph 85 of the
Accounting Standard for Revenue Recognition.
I.

Information for comparison within contracts that recognized the amount of nearly all revenue
following the previous handling until the start of the previous fiscal year will not be revised
retroactively.

II.

Information for comparison regarding the amount of variable consideration included in contracts
that recognized the amount of nearly all revenue following the previous handling until the start ofthe current fiscal year will be revised retroactively using the amount at the time the uncertainty
concerning the amount of the variable consideration is eliminated.

III. Consolidated quarterly financial statements for the previous fiscal year will not be revised
retroactively regarding contracts that were started and ended within the previous fiscal year.
IV. Information for comparison will be revised retroactively for contractual changes made prior to thestart of the previous fiscal year by using accounting treatment based on the contractual conditions
after reflecting all contractual changes.
9As a result, compared to prior to retroactive application, net sales decreased by ¥16 million in theprevious nine months ended December 31, 2020 and selling, general and administrative expenses
decreased by ¥16 million, but operating income, ordinary income, and income before provision forincome taxes were not affected. Furthermore, in accordance with the transitional handling stipulated in
Paragraph 28-15 of the "Accounting Standard for Quarterly Financial Statements" (ASBJ Statement No.
12; March 31, 2020), the Company does not include information that breaks down revenue arising fromcontracts with customers pertaining to the previous nine months ended December 31, 2020.
(Application of Accounting Standard for Fair Value Measurement, etc.)
The Company applied the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30,
July 4, 2019, ASBJ; below, “Accounting Standard for Fair Value Measurement”) from the start of the firstquarter. Following the transitional handling stipulated in Paragraph 19 of the Accounting Standard for
Fair Value Measurement and Paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ
Statement No. 10, July 4, 2019), the Company will apply the new accounting policy set forth in the
Accounting Standard for Fair Value Measurement for all future years. There are no impacts on the
Company’s quarterly consolidated financial statements as a result of this change.
(Additional Information)
There are no major changes to the assumptions about the impacts of the COVID-19 pandemic that were
included in the “Important Accounting Estimates” section of the Annual Securities Report for the Fiscal
Year Ended March 31, 2021.
(Segment Information)
I. 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.
II. Nine Months Ended December 31, 2021
(From April 1, 2021 to December 31, 2021)
The Nitta Gelatin Group's collagen business has become the Company’s only reporting segment, so
information is omitted.

10