February 8, 2018

Consolidated Financial Results
for the Nine Months Ended December 31, 2017
(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
Toru Tamaoka, Director and Executive Officer;
General Manager of Administration Division
Tel: +81-72-949-5381
Scheduled date to file Quarterly Securities Report: February 9, 2018
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, 2017(from April 1, 2017 to December 31, 2017)(1) Consolidated operating results
Net sales
Nine months ended
December 31, 2017
December 31, 2016

Operating income

Millions of yen%

Millions of yen%

(Percentages indicate year-on-year changes.)
Net income
Ordinary income
attributable toowners of the parent
Millions of yen

28,2664.3
848(36.9)
998
27,100(2.6)
1,343
47.91,652
Note: Comprehensive income
For the nine months ended December 31, 2017: ¥1,141 million, (19.5%)
For the nine months ended December 31, 2016:¥954 million, (56.8%)

Net income
per share
Nine months ended
December 31, 2017
December 31, 2016%

Millions of yen(39.6)
97.6

528661

Diluted net income
per share

Yen

Yen

28.77
36.02
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, 2017
March 31, 2017

Total assets

Net assets

Millions of yen

Millions of yen

40,77140,41018,673
17,736

Reference: Equity
As of December 31, 2017:
As of March 31, 2017:¥16,633 million¥15,727 million

Equity ratio
%

40.8
38.9%

(20.1)
63.7

2. Cash dividends
Cash dividends per shareFirst quarter

Second quarter

Yen

Fiscal year ended March 31,
2017
Fiscal year ending March 31,
2018

Third quarter

Yen

Fiscal year-end

Yen-

6.00

--

6.00

-

Fiscal year ending March 31,2018 (Forecasts)
Note: Changes to most recent dividend forecasts: None

AnnualYen

Yen

6.0012.00

6.00

12.00

3. Consolidated financial forecasts for the fiscal year ending March 31, 2018(from April 1, 2017 to March 31, 2018)
OperatingincomeNet sales

Fiscal year ending
March 31, 2018

(Percentages indicate year-on-year changes.)
Net income
Net income
attributable toOrdinary income
owners of theper shareparentMillionsof yen%Millionsof yen%Millionsof yen%Millionsof yen%37,4002.3

1,100(32.0)

1,000(45.4)600(13.5)

Yen

32.66

Note: Changes to most recent consolidated financial forecasts: Yes
For details on the revision of consolidated business forecasts, please refer to the press release entitled NoticeConcerning Revision of Consolidated Business Forecasts (February 8, 2018).

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: No(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: Nob. Changes in accounting policies due to reasons other than a. above: Noc. Changes in accounting estimates: Yes
d. Restatement of revisions: NoNote: For details, please refer to “(3) Notes to Quarterly Consolidated Financial Statements(Changes in Accounting Estimates)” in “2. Quarterly Consolidated Financial Statements andKey Notes” on page 9 of the Attachment to this report.
(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, 201718,373,974 shares
As of March 31, 201718,373,974 sharesb. Number of shares of treasury stock at the end of the period
As of December 31, 2017
162 shares
As of March 31, 2017
162 sharesc. Average number of shares
For the nine months ended December 31, 2017
For the nine months ended December 31, 2016

18,373,812 shares
18,373,812 shares* This report falls outside the scope of quarterly review procedures.
* Proper use of earnings forecasts, and other special matters
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 and thecautionary 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.

Attachment 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 ·············· 42. Quarterly Consolidated Financial Statements and Key Notes ············································· 5(1) Consolidated Balance Sheets ····················································································· 5(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ········· 7Consolidated Statements of Income(Nine months ended December 31) ·············································································· 7Consolidated Statements of Comprehensive Income(Nine months ended December 31) ·············································································· 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 Estimates)·············································································· 9(Segment Information) ·························································································· 1011. Qualitative Information Concerning Quarterly Financial Statements(1) Description of Business Results(a) Business Performance for the Period under Review
In the first nine months of the fiscal year ending March 31, 2018, the global economy overall
continued to expand gradually, with robust economies in the U.S., China, India and elsewhere.
The Japanese economy continued on a moderate recovery trend, supported by special demand
for semiconductors and investment in automation, among other factors, against the backdrop offavorable global economic conditions.
The Nitta Gelatin Group celebrated its 100th anniversary in 2018. Aiming for further growth
going forward, the Nitta Gelatin Group formulated a new corporate vision.

New Vision“To stay healthy and feeling young”
Nitta Gelatin Group fulfills this desire of people worldwide through our relentless pursuit of
meeting collagen’s enormous potential.
1. We will provide products and services that meet our customers’ expectations of continued
improvement.
2. We will broaden the range of collagen applications through our ongoing efforts in R&D
and production innovation.
3. We will pioneer and create new markets by fostering a corporate culture that encourages
facing and overcoming challenges.
Under this corporate vision, the Nitta Gelatin Group focused on providing products thatcreate new value, and on research and development in the fields of health and beauty andregenerative medicine. It also worked to strengthen its competitive capabilities by exploringnew manufacturing methods and by ensuring optimal production and optimal sales.
As a result, in the first nine months of the fiscal year ending March 31, 2018, net sales
increased 4.3% year on year to ¥28,266 million. However, operating income decreased 36.9%
to ¥848 million, mainly due to the increase in raw material prices for gelatin in North America.
Ordinary income declined 39.6% to ¥998 million, and net income attributable to owners of theparent decreased 20.1% to ¥528 million.

(b) Status by Segment(Collagen Material Business)
In the gelatin field, in Japan sales of gelatin for use in delicatessen items sold in convenience
stores and gelatin for soft capsules used in supplements, remained firm. Profits declined inNorth America, mainly reflecting persistently high raw material costs.
In the collagen peptide field, sales in the supplement market remained firm thanks to acontinued boost in recognition of functionality in Japan. In China, sales were favorable because2sales promotion activities and suchlike generated results.
Collagen casings saw profits increase due to improved productivity, supported by continued
solid sales in North America.
As a result, net sales in this segment increased 5.0% to ¥20,722 million, while segment profit(operating income) decreased 31.2% to ¥1,064 million.
(Formula Solution Business)
Food material sales increased year on year; however, profits declined, mainly due to an increase
in selling, general and administrative expense. Furthermore, in November 2017, some of Nitta
Gelatin’s R&D personnel appeared on a TV program that was interested in Nitta Gelatin’s
technological development capabilities from the viewpoint of seeking out new food textures.
Nitta Gelatin demonstrated its technological capabilities and, to much acclaim, produced achilled dessert with a new texture that fit in with the program’s theme. Looking ahead, Nitta
Gelatin will continue to develop products that accurately capture customer needs, andproactively make customer proposals for these products.
In adhesives, sales for hygiene products remained strong, and profits increased due toimproved productivity, although sales remained level year on year.
As a result, net sales in the segment were up 2.6% year on year to ¥7,544 million andsegment profit (operating income) increased 2.3% year on year to ¥812 million.

(2) Description of Financial Position(Assets)
Total assets amounted to ¥40,771 million at December 31, 2017, ¥360 million higher than at
March 31, 2017. This was mainly attributable to increases in merchandise and finished goods
and investment securities.
(Liabilities)
Total liabilities stood at ¥22,097 million at December 31, 2017, ¥577 million lower than at
March 31, 2017. This was mainly attributable to decreases in income taxes payable andlong-term loans payable.
(Net assets)
Net assets amounted to ¥18,673 million at December 31, 2017, ¥937 million higher than at
March 31, 2017. This was mainly attributable to increases in retained earnings and valuationdifference on other available-for-sale securities.
As a result, the equity ratio stood at 40.8% at December 31, 2017 compared with 38.9% at
March 31, 2017.

3

(3) Description of Consolidated Business Forecasts and Other Forward-looking
Information
The consolidated financial forecasts for the fiscal year ending March 31, 2018 have beenrevised from the forecasts announced on May 10, 2017 in the Consolidated Financial Results
for the Fiscal Year Ended March 31, 2017 (Japanese Accounting Standards).
Please refer to the press release entitled Notice Concerning Revision of Consolidated
Business Forecasts (February 8, 2018) for details of the revision.
Actual business and other results may differ substantially from projections due to variousfactors.

4

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

Fiscal 2017
(As of March 31, 2017)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
OtherAllowance 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 2018
(As of December 31, 2017)

2,662
8,923
5,043
1,163
2,997
918
(22)
21,686

1,559
9,391
5,570
1,176
3,039
909(13)
21,633

4,339
4,882
4,688
13,910

4,184
4,952
4,649
13,786

454
405
859

423
402
825

3,052
902
(0)
3,954
18,72440,410

3,572
954
(0)
4,526
19,137
40,771

(Millions of yen)

Fiscal 2017
(As of March 31, 2017)
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 (loss)
Valuation difference on other available-for-salesecurities
Deferred gains on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income(loss)
Non-controlling interests
Total net assets
Total liabilities and net assets

63Q Fiscal 2018
(As of December 31, 2017)

4,347
2,866
2,432
509
2592,622
13,037

4,268
2,953
2,566
131
149
2,627
12,696

5,425
2,851
1,359
9,636
22,674

5,131
2,870
1,399
9,401
22,097

3,144
2,966
10,042(0)
16,153

3,144
2,966
10,393(0)
16,505

1,107

1,464

43
331
(1,907)6502(1,844)

(426)

128

2,009
17,736
40,4102,040
18,673
40,771

(2) Consolidated Statements of Income and Consolidated Statements ofComprehensive Income
Consolidated Statements of Income(Nine months ended December 31)(Millions of yen)

Nine Months EndedDecember 31, 2016
(From April 1, 2016to December 31, 2016)
27,10020,869
6,230
4,886
1,343

Net sales
Cost of sales
Gross profit on sales
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary losses
Disposal costs for noncurrent assets
Loss on retirement of noncurrent assets
Total extraordinary losses
Income before provision of income taxes
Income taxesNet income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

7

Nine Months Ended
December 31, 2017
(From April 1, 2017
to December 31, 2017)28,26622,472
5,794
4,946
848

1731
275
112
70
507

945
93
124
56
328

177
20
198
1,652

156
21
177
998

346
346
1,305
570
735
73
661

1
1012986
392
593
65
528

Consolidated Statements of Comprehensive Income(Nine months ended December 31)(Millions of yen)

Nine Months Ended
December 31, 2016
(From April 1, 2016
to December 31, 2016)
735

Net incomeOther 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 income (loss) of
associates accounted for using equity method
Total other comprehensive income
Total comprehensive income
Comprehensive income attributable to:
Owners of the parent
Non-controlling interests

8

Nine Months Ended
December 31, 2017
(From April 1, 2017
to December 31, 2017)
593

10035795
113
66(70)
184
64(157)

11219
954

547
1,141

878
76

1,08258

(3) Notes to Quarterly Consolidated Financial Statements(Note Concerning Going Concern Assumption)
None(Note Concerning Significant Changes in Shareholders’ Equity)
None(Changes in Accounting Estimates)(Change in the useful life)
The machinery and equipment owned by certain consolidated subsidiaries had been
estimated to have a useful life of eight years for depreciation purposes, based on its usage
status. In the fiscal year ending March 31, 2018, the useful life has been revised based on theactual number of years of use and other factors in conjunction with plan to operate newmachinery and equipment, and is now clearly expected to be longer than the previous
estimate. From the first quarter of the fiscal year ending March 31, 2018, the useful life has
therefore been changed to 10 years.
As a result, for the first nine months of the fiscal year ending March 31, 2018 the amountof depreciation and amortization has declined by ¥33 million compared to the previous
estimation method, and operating income, ordinary income, and income before provision ofincome taxes have all increased by the same amount.

9

(Segment Information)
I. Nine months ended December 31, 2016 (From April 1, 2016 to December 31, 2016)
1. Information on net sales, income and loss by reporting segment(Millions of yen)
Reporting segment

Net sales
Sales to third parties
Inter-segment sales andtransfers
Total
Segment income(Notes)

Adjustments*1

Amounts in theconsolidated
income statement*2

Collagenmaterial
business

Formulasolution
business

Total

19,744

7,355

27,100-27,100

1,396

7

1,403

(1,403)-

21,141
1,548

7,362
794

28,503
2,343(1,403)(999)

27,1001,343

1. Adjustment for segment income of ¥(999) million comprises elimination ofintersegment transactions of ¥6 million and unallocated expenses of ¥(1,005) million.
2. Segment income is adjusted against the operating income recorded in the consolidated
income statement.

2. Information on impairment loss on noncurrent assets and goodwill by reporting segments(Significant changes in the amount of goodwill)In the Collagen Material Business segment, Vyse Gelatin, LLC was newly established, andthe new company took over a portion of the business of Vyse Gelatin Company, resulting in
the recording of goodwill.
The increase in goodwill due to these events was ¥379 million in the nine months ended
December 31, 2016. The amount of goodwill is a provisional estimate, as the allocation of theacquisition cost has not yet been completed.
II. Nine months ended December 31, 2017 (From April 1, 2017 to December 31, 2017)
1. Information on net sales, income and loss by reporting segment(Millions of yen)

Reporting segment

Net sales
Sales to third parties
Inter-segment sales andtransfers
Total
Segment income(Notes)

Adjustments*1

Amounts in theconsolidated
income statement*2

Collagenmaterial
business

Formulasolution
business

Total20,722

7,544

28,266-28,266

1,515

5

1,521

(1,521)-

22,238
1,064

7,550
812

29,7881,877(1,521)(1,029)28,266848

1. Adjustment for segment income of ¥(1,029) million comprises elimination ofintersegment transactions of ¥10 million and unallocated expenses of ¥(1,040) million.
2. Segment income is adjusted against the operating income recorded in the consolidated
income statement.

2. Information on impairment loss on noncurrent assets and goodwill by reporting segments
None10