FY3/20 2Q Consolidated Financial Statements[J-GAAP]
November 11, 2019
Company name: Matsuda Sangyo Co., Ltd.
Exchanges listed on:
Tokyo Stock Exchange (First Section)
Company code:
7456
URL:
http://www.matsuda-sangyo.co.jp
Representative:
Yoshiaki Matsuda, President and Representative Director
Inquiries:
Atsushi Kinoshita, Director in Charge of IR
TEL: +81-3-5381-0728
Filing date of quarterly report:
November 13, 2019
Date to start dividends distribution:
December 4, 2019
Supplementary quarterly materials prepared:
Yes
Quarterly results information meeting held:
Yes (for institutional investors and analysts)(Figures are rounded down to the nearest million yen)

1. FY3/20 2Q consolidated results (April 1, 2019 – September 30, 2019)(1) Consolidated results
Net sales(millions of yen)

FY3/20 2Q

101,644

FY3/19 2Q

102,721(Note) Comprehensive income:Operating income(%) (millions of yen)

(Percentages are year-on-year changes)(%) (millions of yen)

(1.0)

3,211

28.1

9.0

2,505

13.7

FY3/20 2Q: ¥1,866 million (+27.9%)

Earnings per share

Profit attributable toowners of parent

Ordinary income(%) (millions of yen)

(%)

3,254

19.5

2,283

23.0

2,722

12.3

1,856

13.1

FY3/19 2Q: ¥1,459 million (-8.2%)

Diluted earnings per share
(yen)

(yen)

FY3/20 2Q

86.72

－

FY3/19 2Q

70.49

－

(2) Consolidated financial position
Total assets(millions of yen)(millions of yen)(%)

84,75660,44071.2

58,96872.8

End-FY3/20 2Q
End-FY3/19

80,915(Reference) Shareholders’ equity:

Shareholders’ equity ratio

Net assets

End-FY3/20 2Q: ¥60,347 million

End-FY3/19: ¥58,889 million

2. Dividends
1Q

Annual dividends
3Q

2Q
(yen)

(yen)

FY3/19－15.00

FY3/20－17.00

FY3/20 (Projections)

4Q

(yen)

Annual
(yen)

(yen)

－

15.00

30.00

－

17.00

34.00

(Note) Revisions to the most recently announced projections of dividends: No

3. Consolidated earnings projections for FY3/20 (April 1, 2019 – March 31, 2020)(Percentages are year-on-year changes)

Net sales(millions of yen)

FY3/20203,000

Operating income(%) (millions of yen)

(2.6)

5,700

Ordinary income

Profit attributable to Earnings perowners of parentshare(%) (millions of yen)(%) (millions of yen)

(%)

(yen)

15.2

13.9

18.0

151.905,800(Note) Revisions to the most recently announced projections of consolidated earnings: No

4,000

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries in accordance withchanges in the scope of consolidation): No(2) Application of special accounting treatment in preparing the quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates and restatement of revisions
1) Changes in accounting policies with revision of accounting standards: Yes
2) Changes in accounting policies other than the above:No3) Changes in accounting estimates:
No4) Restatement of revisions:No(4) Number of issued shares (common shares)
1) Number of issued shares(including treasury shares)
2) Number of treasury shares
3) Average number of shares
during the period

End-FY3/20 2Q

28,908,581 shares End-FY3/19

28,908,581 shares

End-FY3/20 2Q

2,575,877 shares End-FY3/19

2,575,791 shares

FY3/20 2Q

26,332,717 shares FY3/19 2Q

26,332,956 shares* These quarterly financial statements are outside the scope of audit procedures conducted by certified public
accountants and the independent auditor.
*Notes on appropriate use of earnings projections and other special remarks
Earnings projections and other forward-looking statements in this document are based on reasonable assumptions andinformation available to the Company at the time of release and provide no guarantee of future performance. Actual results may
differ materially from forward-looking statements due to a number of factors. For more information about earnings projections,please refer to “1. Qualitative information on consolidated results during the period, (3) Qualitative information on consolidated
earnings projections” on page 3 of the attached documents.

Contents of Attached Document

1. Qualitative information on consolidated results during the period .................................................. 2(1) Qualitative information on consolidated results ............................................................................................. 2(2) Qualitative information on consolidated financial position ............................................................................ 2(3) Qualitative information on consolidated earnings projections ...................................................................... 3

2. Quarterly consolidated financial statements and related notes ........................................................ 4(1) Quarterly consolidated balance sheets ............................................................................................................ 4(2) Quarterly consolidated statements of income and comprehensive income ................................................. 6(3) Quarterly consolidated statements of cash flows ........................................................................................... 8(4) Notes on quarterly consolidated financial statements ................................................................................. 10(Notes on premise of a going concern) ................................................................................................................ 10(Notes on significant changes in the amount of shareholders’ equity) ................................................................. 10(Changes in accounting policy) ............................................................................................................................ 10(Segment information, etc.) ...................................................................................................................................11

1

1. Qualitative information on consolidated results during the period(1) Qualitative information on consolidated results
In the first six months of the fiscal year ending March 31, 2020, the Japanese economy recovered at a moderatepace, supported by improving employment and income conditions, despite some weakness in exports andproduction activity. However, the outlook remained uncertain due to factors such as the impact of trade issues on
the global economy and the impact of the consumption tax hike on the domestic economy.
Against this backdrop, the Matsuda Sangyo Group’s precious metals business segment stepped up marketing
activities and actively used production sites in Japan and overseas to secure precious metals materials, boost
sales of products such as precious metal chemical products and expand its industrial waste treatment outsourcing
business. The food business segment worked hard to develop and provide products that address customer needs
and actively implemented marketing activities, which included expanding the use of overseas business, as well as
domestic business sites, in order to increase sales volume.
As a result of the above, for the first six months of the fiscal year ending March 31, 2020, consolidated net sales
were ¥101,644 million (down 1.0% year on year), operating income was ¥3,211 million (up 28.1% year on year),ordinary income was ¥3,254 million (up 19.5% year on year), and profit attributable to owners of parent was ¥2,283
million (up 23.0% year on year).
Performance in the Matsuda Sangyo Group’s business segments was as follows.
Precious metals business segment
In the precious metals business segment, key customers in the electronics sector faced challenging conditions
amid a decline in production of electronic parts and devices compared with the same period of the previous fiscal
year. Against that backdrop, the volume of precious metal recycling and the amount of industrial waste treated on
an outsourcing basis by the segment was flat overall. However, precious metal product sales volume fell due to adrop in the amount of precious metal bullion purchased, leading to a decline in sales overall compared with thesame period of the previous fiscal year, despite an increase in selling prices. However, operating income rose year
on year, supported by lower costs and higher selling prices amid steep rises in precious metal prices.
As a result, net sales for the precious metals business segment totaled ¥60,617 million (down 8.5% year onyear), and operating income was ¥2,364 million (up 45.5% year on year).
Food business segment
In the food business segment, production activity at key customers in the food processing sector was firm overall
amid rising demand for processed food products. Against that backdrop, the segment reported higher sales year on
year, supported by increases in sales volume for seafood products, livestock products and agricultural products, aswell as higher selling prices. However, operating income declined slightly compared with the same period of theprevious fiscal year, partly due to higher shipping costs and storage fees.
As a result, net sales for the food business segment were ¥41,063 million (up 12.5% year on year), andoperating income was ¥847 million (down 3.8% year on year).

(2) Qualitative information on consolidated financial position(1) Assets, liabilities and net assets
AssetsTotal assets as of the end of the first six months were ¥84,756 million, an increase of ¥3,841 million from theprevious fiscal year end. This mainly reflected increases in notes and accounts receivable – trade and inventories.
Liabilities
Total liabilities as of the end of the first six months were ¥24,316 million, an increase of ¥2,369 million from theprevious fiscal year end. This was mainly attributable to an increase in short-term loans payable to provide funds
for working capital.
Net assets
Net assets as of the end of the first six months were ¥60,440 million, an increase of ¥1,471 million from theprevious fiscal year end. This mainly reflected an increase in retained earnings, which outweighed year-end cash
dividends paid of ¥394 million.

2(2) Cash flows status
As of the end of the first six months under review, the balance of cash and cash equivalents (hereafter, “cash”)
stood at ¥8,496 million, an increase of ¥680 million from the previous fiscal year end.
Cash flows from operating activities
Operating activities provided net cash of ¥277 million. This mainly reflected the difference between cash provided
from profit before income taxes on the one hand, and cash used for increase in notes and accounts receivable –trade and increase in inventories on the other. Compared with the same period in the previous fiscal year, when
operating activities provided net cash of ¥5,713 million, cash from operating activities decreased by ¥5,435 million.
Cash flows from investing activities
Investing activities used net cash of ¥1,131 million. This was mainly due to the purchase of property, plant andequipment related to the installation and upgrade of equipment at the Group’s plants. Compared with the same
period in the previous fiscal year, when investing activities used net cash of ¥556 million, cash used by investing
activities increased by ¥575 million.
Cash flows from financing activities
Financing activities provided net cash of ¥1,565 million. This mainly reflected cash provided by proceeds fromloans payable, which outweighed cash used for year-end cash dividends paid. Compared with the same period in
the previous fiscal year, when financing activities used net cash of ¥4,226 million, cash from financing activities
increased by ¥5,791 million.

(3) Qualitative information on consolidated earnings projections
The Company has revised its consolidated earnings projections for net sales, operating income, ordinary income
and profit attributable to owners of parent for the fiscal year ending March 31, 2020, as sales and profits for the firstsix months of the fiscal year were expected to exceed start-of-year projections. Projections were raised to reflect
upside from the first six months of the fiscal year.
For more details, please refer to the news release, “Revisions to Earnings Projections,” dated November 6, 2019.
Revisions to consolidated earnings projections for FY3/20 (April 1, 2019 – March 31, 2020)
ProfitOperating
Ordinary
attributable to
Net sales
incomeincomeowners ofparentPrevious projections(A)
Revised projections(B)
Change (B – A)
Change (%)
Reference: Results for
FY3/19Earnings per
share(millions of yen)(millions of yen)(millions of yen)(millions of yen)

(yen)

200,000

5,000

5,100

3,450

131.01203,000
3,000
1.5

5,700
700
14.0

5,800
700
13.7

4,000
550
15.9

151.90208,338

4,948

5,094

3,391

128.773－－

2. Quarterly consolidated financial statements and related notes(1) Quarterly consolidated balance sheets(millions of yen)
End-FY3/19(As of March 31, 2019)

End-FY3/20 2Q(As of September 30, 2019)

AssetsCurrent assets
Cash and deposits

7,816

8,496

Notes and accounts receivable – trade20,522

22,348Merchandise and finished goods

16,702

18,481Work in process

542

527

Raw materials and supplies

6,942

6,384

Others

4,440

4,186

(4)

(8)

56,96160,416

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

9,177

9,355

Accumulated depreciation(5,131)(5,279)Buildings and structures, net

4,045

4,075

Machinery, equipment and vehicles

8,800

9,005

Accumulated depreciation(7,158)(7,408)

Machinery, equipment and vehicles, net

1,642

1,596

Land

9,036

9,034

Leased assets

1,181

1,484

Accumulated depreciation

(449)

(625)

Leased assets, net

731

858

Construction in progress

1,303

1,749

Others

1,302

1,370

Accumulated depreciation(965)(1,028)Others, net

337

342

17,09817,657

Others642

641

Total intangible assets

642

641

Investment securities

4,512

4,342

Deferred tax assets

115

171

Total property, plant and equipment
Intangible assets

Investments and other assets

Others

1,601

1,545

Allowance for doubtful accounts

(16)

(19)

Total investments and other assets

6,212

6,041

Total non-current assets

23,95324,340Total assets

80,91584,756

4

(millions of yen)
End-FY3/19(As of March 31, 2019)

End-FY3/20 2Q(As of September 30, 2019)

Liabilities
Current liabilities
Accounts payable – trade

8,170

8,262

Short-term loans payable

3,081

5,584

Current portion of long-term loans payable

755

661

Lease obligations

271

330

Income taxes payable

914

1,001

Provision for bonuses

818

979

Others

3,803

3,781

Total current liabilities

17,81420,601

2,480

2,190

Lease obligations

524

583

Provision for directors’ retirement benefits
Provision for executive officers’ retirement
benefits
Net defined benefit liability

625

649

28

9

185

189

Deferred tax liabilities

220

66

Non-current liabilities
Long-term loans payable

Others

68

27

4,132

3,715

21,94624,316

Common stock

3,559

3,559

Capital surplus

4,008

4,008

Retained earnings

52,86554,754

Treasury shares(3,010)(3,010)Total shareholders’ equity

57,42259,311

Valuation difference on available-for-salesecurities

585

493

Deferred gains or losses on hedges

Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income

41

(255)

Foreign currency translation adjustment

855

806

Remeasurements of defined benefit plans

(15)

(7)

1,466

1,036

79

92

58,96860,44080,91584,756

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets5(2) Quarterly consolidated statements of income and comprehensive income[Quarterly consolidated statements of income](millions of yen)
FY3/19 2Q(April 1, 2018 –September 30, 2018)

FY3/20 2Q(April 1, 2019 –September 30, 2019)

Net sales

102,721

101,644

Cost of sales

92,92090,694Gross profit

9,801

10,950

Selling, general, and administrative expenses

7,295

7,739

Operating income

2,505

3,211

Interest income

48Dividend income

1617Gain on sales of investment securities

12

27

Share of profit of entities accounted for using
equity method

160-

Purchase discounts

65Compensation income-

32

Foreign exchange gains

30-

Others32

42

Total non-operating income

263

134

Non-operating income

Non-operating expenses
Interest expenses

28

33

Share of loss of entities accounted for using
equity method-

7

Foreign exchange losses-

7

Others19

43

Total non-operating expenses

47

91

Ordinary income

2,722

3,254

Profit before income taxes

2,722

3,254

Income taxes – current

839

989

Income taxes – deferred

17

(30)

Total income taxes

856

959

1,865

2,294

8

11

1,856

2,283

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

6

[Quarterly consolidated statements of comprehensive income](millions of yen)
FY3/19 2Q(April 1, 2018 –September 30, 2018)
ProfitFY3/20 2Q(April 1, 2019 –September 30, 2019)

1,865

2,294

Valuation difference on available-for-salesecurities

(54)

(91)

Deferred gains or losses on hedges

(93)

(297)

Foreign currency translation adjustments

(264)

(23)

Remeasurements of defined benefit plans

6

7

Share of other comprehensive income (loss) ofentities accounted for using equity method

1

(23)

Other comprehensive income

Total other comprehensive income (loss)
Comprehensive income

(405)

(428)

1,459

1,866

1,459

1,853

0

13

Comprehensive income attributable toComprehensive income attributable to ownersof parent
Comprehensive income attributable to noncontrolling interests7(3) Quarterly consolidated statements of cash flows(millions of yen)
FY3/19 2Q(April 1, 2018 –September 30,
2018)

FY3/20 2Q(April 1, 2019 –September 30,
2019)

Cash flows from operating activities
Profit before income taxes

2,722

3,254

Depreciation

647

723

Increase (decrease) in allowance for doubtful accounts

(46)

7

Increase (decrease) in provision for bonuses

127

160

Increase (decrease) in net defined benefit liability

22

12

Increase (decrease) in provision for directors’ retirement benefits

(30)

(15)

Increase (decrease) in provision for executive officers’ retirement
benefits

(0)

(18)

Interest and dividend income

(21)

(26)

Interest expenses

28

33

Share of (profit) loss of entities accounted for using equity method

(160)

7

Decrease (increase) in notes and accounts receivable – trade988(1,802)

Decrease (increase) in inventories

2,140(1,200)

Increase (decrease) in accounts payable – trade

(618)

72

Others930(200)

Subtotal

6,728

1,008

Interest and dividend income received

103

36

Interest paid

(27)

(33)

Income taxes paid

(1,091)(733)

Net cash provided by (used in) operating activities

5,713

277

(542)

(1,112)

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment-

2

Purchase of intangible assets

(31)

(82)

Purchase of investment securities

(5)

(6)

Proceeds from sales of investment securities

18

30

Others

4

37

(556)

(1,131)

Net cash provided by (used in) investing activities8

(millions of yen)
FY3/19 2Q(April 1, 2018 –September 30,
2018)

FY3/20 2Q(April 1, 2019 –September 30,
2019)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable(6,244)2,509

Proceeds from long-term loans payable

3,000

-

Repayments of long-term loans payable

(497)

(383)

Cash dividends paid

(368)

(394)

Others

(115)

(165)

Net cash provided by (used in) financing activities(4,226)

1,565

Effect of exchange rate change on cash and cash equivalents

(84)

(30)

Net increase (decrease) in cash and cash equivalents

846

680

Cash and cash equivalents at beginning of period

7,571

7,816

Cash and cash equivalents at end of period

8,418

8,496

9

(4) Notes on quarterly consolidated financial statements(Notes on premise of a going concern)
There is nothing to report.

(Notes on significant changes in the amount of shareholders’ equity)
There is nothing to report.

(Changes in accounting policy)
Group subsidiaries that have adopted International Financial Reporting Standards (IFRS) have applied IFRS
standard 16 for leases (IFRS 16), effective from the first quarter of the fiscal year under review. As a result, inprinciple, lessees now recognize all assets and liabilities arising from a lease on their balance sheets. In
accordance with transitional measures, the Company has adopted a method to recognize the cumulative impact ofapplying IFRS 16 as of the date of initial application.
As a result, as of the end of the second quarter of the current fiscal year, property, plant and equipment
increased ¥145 million, lease obligations under current liabilities increased ¥38 million, and lease obligations under
non-current liabilities increased ¥113 million. The change in accounting standard had an immaterial impact on
profits for the first six months of the current fiscal year.

10

(Segment information, etc.)
I. FY3/19 2Q (April 1, 2018 – September 30, 2018)
1. Sales and income or losses by reportable segments(millions of yen)Amountrecorded onquarterly
consolidated
statements ofincomeReportable Segments
Precious
metalsbusinesssegment

Adjustments
Food businesssegment

Note 1

Total

Note 2

Net sales(1) Net sales to external
parties(2) Intersegment sales
and transfers
Total
Segment income(Notes)

66,26636,454

102,721-102,721

-

43

43

(43)

-

66,26636,498102,765(43)

102,721

1,625

880

2,505

-

2,505

1. Adjustments correspond to the elimination of transactions and transfers between segments.
2. Total segment income matches operating income recorded on the quarterly consolidated statements
of income.

II. FY3/20 2Q (April 1, 2019 – September 30, 2019)
1. Sales and income or losses by reportable segments(millions of yen)Amountrecorded onquarterly
consolidated
statements ofincomeReportable Segments
Precious
metalsbusinesssegment

Adjustments
Food businesssegment

Note 1

Total

Note 2

Net sales(1) Net sales to external
parties(2) Intersegment sales
and transfers
Total
Segment income

60,61741,026

101,644-

101,644

-

36

36

(36)

-

60,61741,063

101,680(36)

101,644

2,364

847

3,211

-

3,211

(Notes) 1. Adjustments correspond to the elimination of transactions and transfers between segments.
2. Total segment income matches operating income recorded on the quarterly consolidated statements
of income.

11