August 10, 2021

Consolidated Financial Results
for the Three Months Ended June 30, 2021
(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: August 10, 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 three months ended June 30, 2021
(From April 1, 2021 to June 30, 2021)(1) Consolidated operating results(Percentages indicate year-on-year changes.)

Net sales
Three months ended
June 30, 2021
June 30, 2020

Millions of yen%

Operating income

Ordinary income

Net income
attributable to ownersof the parent

Millions of yen

Millions of yen%

Millions of yen

297
304

(2.1)
(17.3)

213
212

%

7,581
2.3
268
(21.8)
7,409
—
343
(8.5)
Note:
Comprehensive income
For the three months ended June 30, 2021: ¥413 million (37.1%)
For the three months ended June 30, 2020: ¥301 million (491.9%)

Earnings per share
Three months ended
June 30, 2021
June 30, 2020

Yen

%

0.8
(16.3)

Diluted earnings per
share
Yen

11.84
—
11.68
—
Notes: 1. Diluted earnings per share is not disclosed due to the absence of latent shares with dilution effect.
2. The Company applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020,
ASBJ) from the start of the first quarter. Numerical indicators for the first three months ended June 30, 2020 havebeen 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 ofJune 30, 2021
March 31, 2021

Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen

34,39334,915

19,17018,873

%

49.7
48.1

Reference: Equity
As of June 30, 2021:¥17,089 million
As of March 31, 2021: ¥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
Fiscal year ending
March 31, 2022 (Forecasts)

Third quarter

Yen—

Fiscal year-end

Yen

Annual

Yen

Yen

6.00

—

6.00

12.00

7.00

—

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
(From April 1, 2021 to March 31, 2022)(Percentages indicate year-on-year changes.)

OperatingincomeNet sales

Six months ending
September 30, 2021
Fiscal year ending
March 31, 2022

Ordinary income

Net income
attributable toowners of theparentEarnings per
share

Millionsof yen%Millionsof yen%Millionsof yen%Millionsof yen%14,200

(6.6)

600

(7.3)

600

(7.5)

300

(14.8)

16.59

29,500

(3.3)

1,350

(0.5)

1,350

(1.0)

900

21.3

49.74

Yen

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 June 30, 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 June 30, 2021:
299,467 shares
As of March 31, 2021:
299,467 sharesc. Average number of shares
As of June 30, 2021:
18,074,507 shares
As of June 30, 2020:
18,181,882 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 itemsin 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 4of 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. 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(First quarter consolidated accounting period) ························································· 7
Consolidated Statements of Comprehensive Income(First quarter consolidated 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 Policy) ············································································ 9(Additional Information) ·················································································· 10(Segment Information) ···················································································· 10(Subsequent Events) ························································································1111. Qualitative Information Concerning Quarterly Financial Statements(1) Description of Business Results
In the first quarter of the fiscal year ending March 31, 2022 (April 1 to June 30, 2021), the stateof the global economy showed signs of recovery, amid the economic recovery in North America,
Europe and China, etc., where progress was made with the rollout of COVID-19 vaccinations. In
contrast, the Japanese economy continued to face uncertainty toward the future, amid the ongoingstate of emergency and the time needed to roll out vaccinations, despite a recovery seen in certain
industries.
In this environment, the Group launched a new three-year medium-term management plan in
May 2021. The Group’s management policy as indicated in this medium-term management planis 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, the Group worked to increase sales of high value-added productsin the mainstay markets of its core food solutions, health support, and biomedical domains. In
April 2021, the Company established a direct sales team for consumers within the Health Support
Division through the absorption-type merger of Nitta Biolab Inc., which was a sales subsidiarytargeting consumers, and the Company established a department for promoting new productdevelopment within the Food Solutions Division. Both of these moves were intended tostrengthen the organizational foundation.
Based on the above policy, net sales increased 2.3% year on year to ¥7,581 million, buoyed by
the recovery of sales in Japan and expanded sales of collagen peptide overseas, which offset thedecrease in sales associated with the transfer of the adhesives business in the previous fiscal year.
In addition, operating income decreased 21.8% to ¥268 million and ordinary income declined
2.1% to ¥297 million, due to rising raw materials and transportation costs, and as a result, net
income attributable to owners of parent increased 0.8% to ¥213 million.
The Nitta Gelatin Group's collagen business is the Company’s only reporting segment. An
overview of the performance of each sales category is as follows:
Food Solutions
In the food solutions category, overall sales increased driven by increased sales in Japan and theNorth America region.
In Japan, net sales rose for gummy candy and delicatessen items amid the recovery in sales atconvenience stores and other establishments in urban areas. Professional-use products recorded2

an increase in net sales underpinned by the growth in sales for direct marketing, despitesluggishness in sales for food service industry establishments. Meanwhile, sales of gelatin for use
at home in confectioneries and cooking were roughly the same as the previous year.
Overseas, net sales increased amid strong demand for gummy candy in the North America
region.
As a result, overall sales in the food solutions category increased 7.9% year on year to ¥3,070
million.
Health Support
In the health support category, export sales of gelatin for capsules declined due to a slowdown inseaborne container shipments, but sales of collagen peptide for health and beauty applications inJapan and overseas grew, which helped to increase net sales overall.
In Japan, net sales of collagen peptide for health and beauty applications and gelatin for
capsules increased driven by strong sales of new collagen products for customers and therecovery in in-store sales.
Overseas, sales of collagen peptide increased due to a recovery in demand for health andbeauty applications in addition to sales growth of functional collagen peptide in the North
America region. In Asia, net sales of collagen peptide for health and beauty applications which
advertised the functionality increased. Meanwhile, net sales of gelatin for capsules declined dueto the slowdown in seaborne container shipping, despite strong demand amid rising awarenesstoward health upkeep and promotion of health due to the COVID-19 pandemic. In India, sales ofcapsules for pharmaceutical and health food applications recovered, resulting in increased net
sales.
As a result, overall sales in the health support category increased 11.5% year on year to ¥3,674
million.
Specialties
In the specialties category, net sales decreased 34.1% year on year to ¥837 million due to adecrease in sales from the completion of the transfer of the adhesives business in the previous
fiscal year 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 ¥34,393 million at June 30, 2021, ¥521 million lower than at March 31,
2021. This was mainly attributable to decreases in cash and deposits of ¥469 million andmachinery, equipment and vehicles, net of ¥219 million, which offset the increase in investment
securities of ¥227 million.

3

(Liabilities)
Total liabilities stood at ¥15,222 million at June 30, 2021, ¥818 million lower than at March 31,
2021. This was mainly attributable to decreases in other current liabilities of ¥247 million andlong-term loans payable of ¥604 million.
(Net assets)
Total net assets amounted to ¥19,170 million at June 30, 2021, ¥296 million higher than at March
31, 2021. This was mainly attributable to increases in retained earnings of ¥105 million, valuationdifference on other available-for-sale securities of ¥120 million, and foreign currency translation
adjustments of ¥63 million.
As a result, the equity ratio stood at 49.7% at June 30, 2021 compared with 48.1% at March
31, 2021.

(3) Description of Consolidated Business Forecasts and Other Forward-looking
Information
The consolidated earnings forecast for the fiscal year ending March 31, 2022 is unchanged fromthe consolidated 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.

4

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

Fiscal 2021
(As of March 31, 2021)
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

1Q Fiscal 2022
(As of June 30, 2021)

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

3,555
6,827
5,235
1,235
2,575
271
(15)
19,685

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

3,296
2,451
3,151
8,898

257
244
502

245
241
487

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

3,432
1,996
(106)
5,321
14,70834,393

(Millions of yen)

Fiscal 2021
(As of March 31, 2021)
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

1Q Fiscal 2022
(As of June 30, 2021)

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

2,860
2,057
2,111
140
315
1,980
9,466

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

3,321
1,584
849
5,755
15,222

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

3,144
2,966
9,795
(200)
15,707

1,125

1,246

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

(12)
(19)
167
1,382
2,081
19,17034,393

(2) Consolidated Statements of Income and Consolidated Statements ofComprehensive Income
Consolidated Statements of Income(First quarter consolidated accounting period)(Millions of yen)Three Months Ended
June 30, 2020
(From April 1, 2020
to June 30, 2020)
7,409
5,838

Net sales
Cost of sales

Three Months Ended
June 30, 2021
(From April 1, 2021
to June 30, 2021)
7,581
6,020

Gross profit on sales

1,570

1,561

Selling, general and administrative expenses

1,227

1,292

Operating income

343

268

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

0
19
8
5
18

0
21
14
10
0
12

Total non-operating income

52

60

36
54
1

29
1

91

31

Non-operating expenses
Interest expenses
Foreign exchange losses
Other, net
Total non-operating expenses
Ordinary income

304

297

Extraordinary losses
Loss on sale of noncurrent assets
Loss on retirement of noncurrent assets

000

Total extraordinary losses
Income before provision for income taxes

0

0

304

297

Income taxes

66

43

Net income

237

253

Net income attributable to non-controlling interests

25

39

Net income attributable to owners of the parent

212

213

7

Consolidated Statements of Comprehensive Income(First quarter consolidated accounting period)(Millions of yen)Three Months Ended
June 30, 2020
(From April 1, 2020
to June 30, 2020)
237

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 gains (losses) 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

Three Months Ended
June 30, 2021
(From April 1, 2021
to June 30, 2021)
253

11

120

57
(23)
38

(27)
(4)
19

(19)

51

63
301

159
413

257
43

403
9

(3) Notes to Quarterly Consolidated Financial Statements(Note Concerning Going Concern Assumption)
None(Note Concerning Significant Changes in Shareholders’ Equity)
None(Changes in Accounting Policy)(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 the first 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 thecontrol of the promised goods and services are transferred to the customer.
As a result, sales commissions and sales promotion costs conventionally recorded in selling,
general and 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 forthe previous quarter and previous 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 incontracts that recognized the amount of nearly all revenue following the previous
handling until the start of the current fiscal year will be revised retroactively using theamount 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 berevised retroactively regarding contracts that were started and ended within the previous
fiscal year.
IV. Information for comparison will be revised retroactively for contractual changes madeprior to the start of the previous fiscal year by using accounting treatment based on thecontractual conditions after reflecting all contractual changes.
As a result, compared to prior to the retroactive application, net sales for the previous firstquarter declined by ¥4 million and selling, general and administrative expenses declined by ¥4
million, but operating income, ordinary income, and income before provision for income taxes
were not impacted.

9

(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”) fromthe start of the first quarter. Following the transitional handling stipulated in Paragraph 19 of
the Accounting Standard for Fair Value Measurement and Paragraph 44-2 of the AccountingStandard 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. Three Months Ended June 30, 2020
(From April 1, 2020 to June 30, 2020)
The Nitta Gelatin Group's collagen business has become the Company’s only reporting
segment, so information is omitted.
II. Three Months Ended June 30, 2021
(From April 1, 2021 to June 30, 2021)
The Nitta Gelatin Group's collagen business has become the Company’s only reporting
segment, so information is omitted.

10

(Subsequent Events)
The Company disposed of treasury stock as follows based on a resolution at the Board of
Directors meeting held on July 15, 2021 regarding the disposal of treasury stock as restricted
share-based remuneration.
1. Summary of disposal(1) Disposal dateJuly 30, 2021

(2) Class and number of shares for
disposal

The Company’s common stock; 30,800 shares(3) Disposal price¥637 per share(4) Total disposal amount¥19,619,600(5) Eligible persons for the allotmentof shares, number of eligible
persons, and number of shares tobe allocatedDirectors (excluding outside directors):
persons; 20,800 shares
Executive Officers: 7 persons; 10,000 shares(6) Other

The Company has submitted a securities
notification regarding this disposal of treasury
stock pursuant to the Financial Instruments andExchange Act.

5

2. Purpose and reason of disposal
The Company passed a resolution at the meeting of the Board of Directors held on June 1,
2021 to introduce a new restricted share-based remuneration plan (“the Plan”) for theCompany’s directors (excluding outside directors; below, “Eligible Directors”) and Executive
Officers (below, “Eligible Directors, etc.” to collectively refer to both Eligible Directors andExecutive Officers) in order to increase incentives more so than before toward the sustained
enhancement of corporate value and to further share value with shareholders.
In addition, at the 82nd Ordinary General Meeting of Shareholders held on June 29, 2021,
approval was obtained pursuant to the Plan regarding the establishment of an annual cap of¥80 million for the total monetary remuneration paid to Eligible Directors, a cap of 80,000
shares on the number of restricted shares allocated in each fiscal year to Eligible Directors, andthe period from the issuance of restricted shares to the day of retirement from the position ofeither the Company’s director, Executive Officer, or employee as the restriction period of therestricted shares.
For the restricted share-based remuneration during the period from the 82nd Ordinary
General Meeting of Shareholders held on June 29, 2021 to the 83rd Ordinary General Meetingof Shareholders that is scheduled to be held in June 2022, at the meeting of the Board of
Directors held on July 15, 2021, a resolution was passed to pay monetary remuneration claimsof ¥19,619,600 to the Eligible Directors, etc., and allot 30,800 of the Company’s common
11stock as specified restricted shares by having the Eligible Directors, etc. pay all said monetary
remuneration claims according to the method of in-kind contribution.

12