November 11, 2020

Consolidated Financial Results
for the Six Months Ended September 30, 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: November 12, 2020
Scheduled date to commence dividend payments: December 4, 2020
Supplementary explanatory materials prepared:
Yes
Explanatory meeting:
No(Millions of yen with fractional amounts discarded, unless otherwise noted.)

1. Consolidated financial results for the six months ended September 30, 2020
(April 1, 2020 to September 30, 2020)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
Net sales
Six months ended
September 30, 2020
September 30, 2019

Millions of yen%

Operating income

Ordinary income

Net income
attributable toowners of the parent

Millions of yen

Millions of yen%

Millions of yen

648
981

(33.9)
64.8

351
654

%

15,205(18.4)
647(23.5)
18,6273.4
845
97.2
Note: Comprehensive income
For the six months ended September 30, 2020: ¥534 million, 50.2%
For the six months ended September 30, 2019: ¥355 million, (76.0)%

Earnings per share
Six months ended
September 30, 2020
September 30, 2019

Diluted ernings
per share

Yen

Yen

19.41
—
35.63
—
Note: Diluted net income per share is not disclosed due to the absence of latent shares with dilution effect.

(2) Consolidated financial position
As of
September 30, 2020
March 31, 2020

Total assets

Net assets

Millions of yen

Millions of yen

33,58333,551

17,663
17,461

Reference: Equity
As of September 30, 2020:
As of March 31, 2020:

15,766
15,667

Equity ratio
%

46.9
46.7

%

(46.2)(48.5)

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

—

6.00

—

6.00

Fiscal year-end

Yen

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, 2020)(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—

Dilutedernings 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 September 30, 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 September 30, 2020:
299,467 shares
As of March 31, 2020:
167 sharesc. Average number of shares
For the six months ended September 30, 2020:
18,135,865 shares
For the six months ended September 30, 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. (Method for obtaining supplementary financial results explanatory materials) Financial results explanatory
materials are scheduled to be made available on the Company’s website on December 4, 2020.

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 ······················································· 5
3. Quarterly Consolidated Financial Statements and Key Notes ············································ 6(1)Consolidated Balance Sheets ··············································································· 6(2)Consolidated Statements of Income and Consolidated Statements of Comprehensive Income··· 8Consolidated Statements of Income(First half consolidated cumulative accounting period) ···················································· 8Consolidated Statements of Comprehensive Income(First half consolidated cumulative accounting period) ················································· 9(3)Consolidated Statements of Cash Flows ································································ 10(4)Notes to Quarterly Consolidated Financial Statements ··············································· 12(Note Concerning Going Concern Assumption) ······················································· 12(Note Concerning Significant Changes in Shareholders’ Equity) ··································· 12(Additional Information) ·················································································· 12(Segment Information) ···················································································· 12

11. Qualitative Information Concerning Quarterly Financial Statements(1) Description of Business Results
In the first half of the fiscal year ending March 31, 2021 (April 1 to September 30, 2020), theglobal economy experienced a moderate recovery, amid measures in countries to strike a balance
between slowing the spread of COVID-19 and economic activities. The Japanese economy
experienced uncertainty about the future given concerns about a rebound of COVID-19 cases inJapan and abroad, despite a bottoming out seen in certain parts of the economy due to the phased
restart of social and economic activities.
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 continue various businessactivities such as production, sales and distribution while proactively adopting telework, flexible
work arrangements and web conferences in order to help its business partners and employees
avoid the so-called three Cs: closed spaces, crowded places, and close-contact settings.
In this environment, the food and health food industries, the Group’s main business partners,
were impacted substantially by expanded telework as well as the loss of demand from in-boundtourism. Meanwhile, there were signs of a recovery in the food-service industry due to the end of
reduced operating hours and measures to spur consumption by the Japanese government, such as
the Go To campaign to promote leisure activities. As for our Group, net sales decreased 18.4%
year on year to ¥15,205 million due to the impact of its withdrawal from the collagen casing
business in the previous year. In addition, mainly due to the decline in net sales, operating income
decreased 23.5% to ¥647 million, ordinary income decreased 33.9% to ¥648 million, and net
income attributable to owners of parent decreased 46.2% to ¥351 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 Japan, sales of gelatin for use in confectioneries and cooking and of food ingredients forchilled desserts rose amid increased demand for eating at home and greater opportunities to makedesserts at home due to the spread of COVID-19. On the other hand, sales of products for use ingummy candies and cup jelly products dropped reflecting on the stay-at-home trend, and sales of
products for use in delicatessen items declined due to declining demand for lunch at convenience
stores in urban areas caused by the increased shift to working from home. Sales for seasonings
and for soups for the food-service industry (hotels, restaurants and cafes [HORECA]) also
declined.
Overseas, sales to the markets for gummy candy, jelly confectioneries and other applications
were solid in the North America region due to the increased stay-at-home hours. Net sales in thefirst six months of the period declined year on year, due to the substantial impact fromwithdrawal from the collagen casing business in the previous fiscal year.
2

As a result, overall sales in the food solutions category decreased 29.4% year on year to¥5,859 million.
Health support
In Japan, sales of products for beauty supplement applications decreased due to the decline insales at drugstores and other outlets and loss of demand from in-bound tourism caused by the
spread of COVID-19.
Overseas, sales of collagen peptide decreased due to the impacts of COVID-19, in addition to
the stagnant market growth rate in the North America region. Meanwhile, sales of gelatin for soft
capsules increased due to robust demand for capsules used in health food applications. The Asia
region saw net sales increase due to strong sales of Halal products for capsules and sales
expansion activities to advertise the functionality of collagen peptide for health and beauty
applications. In India, net sales were down slightly year over year due to decreased sales forcapsules for pharmaceutical and health food applications.
As a result, overall sales in the health support category decreased 8.1% year on year to ¥6,805
million.
Specialties
Overall sales decreased 13.2% year on year to ¥2,540 million mainly due to a decrease in sales of
packaging adhesives.

(2) Description of Financial Position
1. Assets, Liabilities and Net Assets(Assets)
Total assets amounted to ¥33,583 million at September 30, 2020, ¥31 million higher than at
March 31, 2020. This was mainly attributable to an increase in cash and deposits of ¥882 million
and increase in merchandise and finished goods of ¥294 million, which offset decreases in tradenotes and accounts receivable of ¥378 million, raw materials and supplies of ¥557 million, andproperty, plant and equipment of ¥189 million.
(Liabilities)
Total liabilities stood at ¥15,920 million at September 30, 2020, ¥170 million lower than at
March 31, 2020. This was mainly attributable to decreases in trade notes and accounts payable of¥318 million and other current liabilities of ¥316 million, compared to an increase in long-termloans payable of ¥500 million.
(Net assets)
Net assets amounted to ¥17,663 million at September 30, 2020, ¥202 million higher than at
March 31, 2020. This was mainly attributable to increases in retained earnings of ¥241 million,
remeasurements of defined benefit plans of ¥49 million, and non-controlling interests of ¥1033

million, which offset a decrease of ¥199 million in purchase of treasury stock.
Furthermore, the equity ratio stood at 46.9%, compared with 46.7% at March 31, 2020.
2. Cash Flows
Cash and cash equivalents (“cash”) as of September 30, 2020 was ¥2,267 million, up ¥885
million from March 31, 2020.
Cash flows for each activity for the six months ended September 30, 2020 and reasons are as
follows.
(Cash flows from operating activities)
Operating activities provided net cash of ¥1,486 million, compared to ¥1,022 million in theprevious six months ended September 30, 2019. The main components were income before
income taxes of ¥599 million, depreciation and amortization of ¥629 million, and decrease intrade notes and accounts receivable of ¥357 million.
(Cash flows from investing activities)
Investing activities used net cash of ¥607 million, compared to ¥539 million in the previous six
months ended September 30, 2019. This was mainly attributable to ¥605 million in purchase ofproperty, plant and equipment.
(Cash flows from financing activities)
Financing activities provided net cash of ¥14 million, compared to the use of net cash of ¥538
million in the previous six months ended September 30, 2019. The main components were
proceeds from long-term loans payable of ¥1,700 million, repayment of long-term loans payableof ¥1,205 million, purchase of treasury stock of ¥199 million, cash dividends paid of ¥110
million, and repayments of lease obligations of ¥107 million.

(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. 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 theconsolidated financial statements can be readily compared between different periods and different
companies.
Looking ahead, considering its management policies and various conditions in Japan andabroad, Nitta Gelatin plans to examine the adoption of International Financial ReportingStandards (IFRS). In doing so, the Group will take into account trends such as the adoption of
IFRS by its peer companies.

53. 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

6

1H Fiscal 2021
(As of September 30, 2020)

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

2,296
7,299
5,969
1,222
2,229
533
(14)
19,536

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

3,188
2,600
3,204
8,994

300
220
521

269
217
486

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

2,929
1,741
(104)
4,567
14,04733,583

(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-sale securities
Deferred 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

7

1H Fiscal 2021
(As of September 30, 2020)

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

3,299
1,745
2,338
202
190
2,208
9,984

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

3,726
1,660
548
5,935
15,920

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

3,144
2,966
9,408
(200)
15,320

920
(47)
(346)
(137)
389
1,793
17,461
33,551

950
(11)
(404)
(87)
446
1,897
17,66333,583

(2) Consolidated Statements of Income and Consolidated Statements ofComprehensive Income
Consolidated Statements of Income(First half consolidated cumulative accounting period)(Millions of yen)

Six Months Ended
September 30, 2019
(From April 1, 2019
to September 30, 2019)18,627
14,766

Net sales
Cost of sales

Six Months Ended
September 30, 2020
(From April 1, 2020
to September 30, 2020)
15,205
12,139Gross profit on sales

3,861

3,065

Selling, general and administrative expenses

3,015

2,418

Operating income

845

647

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

1
23
16
128
66

3
23
28
63

Total non-operating income

237

119

Non-operating expenses
Interest expenses
Foreign exchange losses
Other

92
9

61
51
5

Total non-operating expenses

102

118

981

648

0

-

0

-

4
-

4
44

Ordinary income
Extraordinary gains
Gain on sales of noncurrent assets
Total extraordinary gains
Extraordinary losses
Loss on retirement of noncurrent assets
Impairment loss
Total extraordinary losses
Income before income taxes

4

48

976

599

Income taxes

229

156

Net income

747

443

Net income attributable to non-controlling interests

92

91

Net income attributable to owners of the parent

654

351

8

Consolidated Statements of Comprehensive Income(First half consolidated cumulative accounting period)(Millions of yen)

Six Months Ended
September 30, 2019
(From April 1, 2019
to September 30, 2019)
747

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

9

Six Months Ended
September 30, 2020
(From April 1, 2020
to September 30, 2020)
443

(195)

30

(20)
(269)
111

82
(47)
49

(17)

(24)

(391)
355

90
534

354
1

408
125

(3) Consolidated Statements of Cash Flows(Millions of yen)

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in net defined benefit liability
Interest and dividends income
Interest expenses
Foreign exchange losses (gains)
Equity in losses (earnings) of affiliates
Loss (gain) on sales of property, plant and equipment
Loss on retirement of noncurrent assets
Impairment loss
Loss (gain) on sales of investment securities
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accrued consumption taxes
Other
SubtotalInterest and dividends income received
Interest paid
Income taxes (paid) or refund
Net cash provided by operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from the sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from the sale of investment securities
Other
Net cash used in investing activities

10

Six Months Ended
September 30, 2019

Six Months Ended
September 30, 2020

(From April 1, 2019
to September 30, 2019)(From April 1, 2020
to September 30, 2020)

976
755
23
3
(52)
34
(25)
92
61
(128)
(0)
4
(2)
305
(871)
209
126
(147)
1,365
25
(84)
(284)
1,022

599
629
22
0
(27)
5
(26)
61
21
(28)
4
44
(5)
357
272
(277)
(148)
(80)
1,425
28
(59)
92
1,486

(17)
20
(534)
0
(7)
(4)
3
1
(539)

(7)
10
(605)
0
(14)
(4)
13
0
(607)

(Millions of yen)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from sale-and-leaseback transactions
Repayments of lease obligations
Cash dividends paid
Purchase of treasury stock
Cash dividends paid to non-controlling interests
Net cash (used in) provided by financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

11

Six Months Ended
September 30, 2019

Six Months Ended
September 30, 2020

(From April 1, 2019
to September 30, 2019)(From April 1, 2020
to September 30, 2020)

(172)
1,200
(1,313)
66
(120)
(183)
(14)
(538)
(25)
(80)
2,051
1,971

(84)
1,700
(1,205)
43
(107)
(110)
(199)
(21)
14
(6)
885
1,381
2,267

(4) 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 half of the year ending March 31, 2021, resulting in a balance of ¥200
million as of September 30, 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 September 30, 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. Six Months Ended September 30, 2019
(April 1, 2019 to September 30, 2019)
The Nitta Gelatin Group's collagen business has become the Company’s only reporting
segment, so information is omitted.
II. Six Months Ended September 30, 2020
(April 1, 2020 to September 30, 2020)
The Nitta Gelatin Group's collagen business has become the Company’s only reporting
segment, so information is omitted.

12