Supplementary Material to Financial Results
Second Quarter of the Fiscal Year Ending December 2020

Nishimoto Co., Ltd.
August 13, 2020
2020 Nishimoto Wismettac Group All rights reserved.

Contents• Summary of Financial Results
for the Second Quarter of the Fiscal YearEnding December 2020

P. 2

• Revision to Forecasts of Financial Results
for the Fiscal Year Ending December 2020

P. 7

• Medium-term Business Plan

P. 9

• Policy of Returning Profits to Shareholders

P. 17• Corporate Profile

P. 19

2020 Nishimoto Wismettac Group All rights reserved.

1

Summary of Financial Results
for the Second Quarter of the Fiscal Year Ending
December 2020

2020 Nishimoto Wismettac Group All rights reserved.

Summary of Financial Results for the Second Quarter of the Fiscal YearEnding December 2020
Sales following the novel coronavirus pandemic decreased significantly year-on-year, mainly for restaurant chains,due to the impact of restrictions on going out and on business operations. Profits also decreased significantly.
 Sales to restaurant chains decreased significantly due to the restrictions on going out and on business operations since mid-March.
Sales to take-out, food delivery and retail businesses remained good. Sales to restaurant chains decreased 13.4% year-on-year to79.8 billion yen despite a moderate recovery since May.
 Efforts were made to reduce SG&A but could not cover the decreases in profit due to the significant decreases in sales. Furthermore,with the provision of allowance for doubtful accounts and the valuation loss on inventories (approximately 1.7 billion yen in total forthe first and second quarters) in consideration of the impact of the novel coronavirus pandemic being recorded, the operating loss
was 1.2 billion yen.
 The impact of foreign currency rates in converting to the yen for consolidated financial statements caused net sales to decrease by 1
billion yen year-on-year with almost no impact on operating income.
(Unit: billions of yen)

FY ended December 2019
Second quarter results

FY ending December 2020
Second quarter results

Changes year-on-year

Net sales

92.1

79.8

−12.3

Gross profit

15.8

12.5

−3.2

Operating income(Excluding policy expenses)

2.8

−0.2

−3.0

Operating income or loss

2.5

−1.2

−3.7

Ordinary income or loss

2.6

−1.5

−4.1

Net income or loss attributable toowners of parent

1.8

−0.9

−2.8

Yen/Dollar exchange rate
(Average rate during the period)

110.05 yen

108.27 yen−1.78 yen

Quarterly net income or loss per share

130.86 yen−65.43 yen−196.29 yen

Operatingresults

2020 Nishimoto Wismettac Group All rights reserved.

3

Operating Results by Segment for the Second Quarter of the Fiscal YearEnding December 2020
Profits from the Asian Food Global Business decreased year-on-year due to a significant decrease in sales to restaurant chainsbecause of restrictions on business operations and going out. Profits from the Agricultural & Seafood Products Trading
Business decreased year-on-year due to a significant decrease in demand for eating-out and a drop in sale prices.
Asian Food Global Business (hereinafter called “GAF”)
 Sales to restaurant chains, our main customers, significantly decreased due to the lockdowns in each country. Sales to retail businesses remained
good but could not cover the drop in sales to restaurant chains, whereby revenue decreased. Since May, sales recovered moderately with thegradual lifting of restrictions on take-out, food delivery and eating in shops.
• In the North American region, it decreased 17.8% year-on-year (or 16.5% in a local-currency basis).
• In regions outside of North America, it decreased 7.8% year-on-year (or 19.9% excluding SSP, which was not consolidated in the previous
year, or 15.2% in a local-currency basis).
 The operating loss was 1 billion yen due to the valuation loss on inventories and the provision of allowance for doubtful accounts, in addition to thesignificant decrease in sales.
• In the North American region, the operating loss was 480 million yen due to the valuation loss on inventories in the second quarter, in
addition to the decreases in sales.
• In regions outside of North America, operating losses were 550 million yen due to the provision of allowance for doubtful accounts and thevaluation loss on inventories in the second quarter, in addition to the decreases in sales.
Agricultural & Seafood Products Trading Business Net sales fell 7.5% year-on-year because of a significant decrease in demand at restaurant chains and price falls for our main products, centeredon citrus fruits, for which there is an excess inventory. Profits decreased 71.3% year-on-year due to the decrease in sales. Inventory adjustment
for the citrus fruits was completed by the end of June.
(Unit: billions of yen)

GAF
Agricultural & Seafood
Products Trading Business
Other

Adjustment items
Total

Net sales
Operating income or loss
Net sales
Operating income or loss
Net sales
Operating income or loss
Net sales
Operating income or loss
Net sales
Operating income or loss

2020 Nishimoto Wismettac Group All rights reserved.

Second quarter of FY
ended December 2019
results

Second quarter results

Changes year-on-year

63.5
2.4
26.8
0.1
1.8
0.0

53.1
−1.0
24.8
0.0
1.8
0.0

-

-

−0.0
92.1
2.5

−0.3
79.8
−1.2

−10.3
−3.4
−2.0
−0.1
0.0
0.0
−0.2
−12.3
−3.7

FY ending December 20204

Consolidated Balance Sheet (Summary)(Unit: billions of yen)

End ofDecember 2019

End ofJune 2020

Amount/rate ofincrease (decrease)

Main changes

87.9

83.9

−4.0

Notes and accounts receivable—trade−4.3, Inventories −2.0, Cash anddeposits 3.1

8.6

10.9

+2.3

Goodwill +2.7

96.5

94.9

−1.6

Current liabilities

19.0

15.1

−3.8

Accounts payable −3.2

Non-current
liabilities

25.1

30.1

+4.9

Long-term loans payable +4.3

Total liabilities

44.2

45.2

+1.0

Total net assets

52.3

49.6

−2.6

Total liabilities and net
assets

96.5

94.9

−1.6

Shareholders’ equity
ratio

54.2%

52.3%

−1.9 pt

Current ratio

461.5%

553.2%+91.6 pt

Current assets
Non-current assets
Total assets

2020 Nishimoto Wismettac Group All rights reserved.

Retained earnings from net
loss/dividend −1.7

5

Consolidated Statement of Cash Flows (Summary)(Unit: billions of yen)First half of FY
ended December
2019First half of FY
ending December
2020

Changes
year-on-year

Cash flows from operating activities

1.1

3.3

2.1

Working capital +4.0 (Cash increase)

Cash flows from investing activities

−0.7

−3.1

−2.4

Acquisition of shares of subsidiaries−2.5 (including SSP)

Cash flows from financing activities

−0.8

3.3

4.1

Translation adjustments

−0.4

−0.3

0.0

First half of FY
ended December
2019First half of FY
ending December
2020

Changes
year-on-year

Beginning balance

28.5

38.8

10.3

Changes during the period

−0.8

3.1

3.9

Closing balance

27.7

42.0

14.3

Cash and cash equivalents

2020 Nishimoto Wismettac Group All rights reserved.

Main changes(Year-on-year difference)Long-term loans payable +4.5

Notes

6

Revision to Forecasts of Financial Results
for the Fiscal Year Ending December 2020

2020 Nishimoto Wismettac Group All rights reserved.

Forecasts of Financial Results for the Fiscal Year Ending December 2020
We reviewed our financial results forecasts on the assumption that sales will gradually recover from the impact of
the novel coronavirus pandemic.
We will move into the black in the second half by reducing SG&A, etc. to build a foothold for recovery into the nextterm and beyond.
Considering our accumulated business results up until the second quarter (i.e. the first half) and our future prospects, we have revised thefinancial results forecasts for the fiscal year ending December 2020.



We assume that, since May, sales to restaurant chains have been gradually recovering from the impact of the novel coronavirus pandemic
due to the lifting of restrictions on business operations in each country.



The following situations were not included and there is a risk of a downward swing if any of them takes place.
• Large-scale lockdowns or restrictions on business operations due to a second wave of the novel coronavirus pandemic. Extreme
weakness in consumer sentiment.
• Purchase costs rise due to an extension in the trend for the yen to appreciate against a background of anxiety over the future of U.S.
and world economies.
(Unit: billions of yen)

FY ended December
2019

Operating results

Full-year results

FY ending December 2020
First-half results

Second-half forecast

Full-year forecast

Full-year changes ofprevious year

Net sales

182.6

79.8

88.2

168.0

−14.6

Gross profit

32.1

12.5

14.9

27.4

−4.6

Operating income or loss

4.3

−1.2

0.6

−0.6

−4.9

Ordinary income or loss

4.5

−1.5

0.5

−1.0

−5.5

Net income or loss attributableto owners of parent

2.4

−0.9

0.4

−0.5

−2.9

Yen/Dollar exchange rate
(Average rate during the period)

109.05 yen

108.27 yen

108.00 yen

108.00 yen−1.05 yen

Quarterly net income or loss
per share

173.71 yen−65.43 yen

30.57 yen

−34.84 yen−208.55 yen

2020 Nishimoto Wismettac Group All rights reserved.

8

Medium-term Business Plan

2020 Nishimoto Wismettac Group All rights reserved.

Vision for Nishimoto Wismettac GroupOne-stop solution company aiming for afusion of healthcare and foodWhatbusiness wewant to do

Create customers by providing and unifying“manufacturing” and “services” in the fields of healthcare
and foods.

Manufacturing

Healthcare

2020 Nishimoto Wismettac Group All rights reserved.

Service

Food

10Strengths of Nishimoto Wismettac – Three Areas of Breadth
Having accumulated more than a century of history, we have built a global foundationon the three axes of goods, logistical functions and human resources in the field offood.

1
Breadth ofhandledgoods

2

 Handling of more than 8,000 kinds of foods andingredientsWorldwide fruits & vegetables and seafood products
Processed foods, including Asian foods and delicacies
Supplements and amenity foods

 Consistent supply chain management
Breadth ofservicefunctionsRetaining data for optimal global production areas andfactories
Ability to develop our own PB products ( development
ability)
A base that ensures the safety and traceability of food forimport and export ( intellectual property)
Our own distribution infrastructure ( last one mile)

Growth into
a globalfoodcompany

3
Breadth ofhuman
resourcesand network 49 bases in 13 countries worldwide and global
trade with the main players in foodNetwork with growers, suppliers and producers
Complete cold chain network with distribution providers
Long-years of global business relationships (credit) withrestaurants and retailers

2020 Nishimoto Wismettac Group All rights reserved.

11

A Gearshift in Food
Companies will be required to achieve an “entirely (globally) optimal production ofmany kinds in small quantities” instead of the current “partially (nationally) optimal
production of few kinds in large quantities.”

Sources of change

DigitalCentenarian
life-spans

Resource
depletingsociety2020 Nishimoto Wismettac Group All rights reserved.

Long-term trend (Hypothesis)
More convenientand more selfindulgent“My” meals

Longer andhealthier“My” healthy
dietary life andhealthcare

Richer andcleverer (moreeconomical)

A symbiosis ofcompatibility
betweenpersonalizationand ecology

12Next Stage for Nishimoto Wismettac – Pursuing Two Areas toDeepen and Expansion
As consumer needs change, by enhancing the required functions and widening ourfields of business, we will not only be chosen by customers but also create customers
ourselves.

Until now1

Deepening
manufacturingfunctions

Dependence on producers forthe development and productionof many products
Pursuit of balance between“price and quality”

From now Internalization of productplanning/design and production control
functions Cloud migration of development andproduction structures
 Pursuit of highly value-added products Utilization of food technology

2

Deepening
services

Supplier of foods andingredients
 Competitive with excellent
operations
 Flexible ordering anddelivery, prices, and productknowledge of salespersons

 Provision of a total solution for foods
 Not a supplier, but a solution partner forcustomers
 Platformer using the know-how ofdifferent industries, not sticking to inhouse production

3
Expansion of
medical field(healthcare)Only sale of supplements

2020 Nishimoto Wismettac Group All rights reserved.

 Development, production and sale ofdifferentiated goods (medical foods)
responding to an increasingly elderly
population and expanding home healthcare

13

Manufacturing Business: For Consumers Whose Behaviors andPreferences Will Change
We will discover (hidden and visible) customer needs and maximize our advantages inorder to “manufacture” on the basis of unique product development.

Needs

Changedconcepts ineating Changed concepts in eating after andwith Covid
 Eat in, Ready to eat, and PreparedFoods
 More health-oriented
 Japanese foods have gone fromfollowing booms and trends to becoming
household fare
 Expansion of sales channels andlocalization of Asian foods

Developmentof foodtechnology

 Attention to excellent food processing
and manufacturing technologies andingredients from various parts of theworld, including Japan Commitment to ingredients(healthy/green-oriented)

Entry into
medical field Tasty meals (meals for the elderly, fromhome medical diets to food for Quality ofLife) From healthy food to medical diets Diversified choice for elderly carefacilities, etc. and cost reduction
pressures2020 Nishimoto Wismettac Group All rights reserved.

Manufacturing Focusing on Asian foods, we will achieve
consistent fabless manufacturing, fromdevelopment and ingredient procurement tomanufacturing of all processed foods, and will
deliver and develop excellent
processing/manufacturing technologies.
 By collaborating with worldwide producers
and contract manufacturers, we willdevelop and procure goods that meetcustomer needs (by utilizing existing
networks).
 We will streamline our productdevelopment and manufacturing
department structures and enhance ourtechnological department.
 In addition to existing Japanese restaurants, wewill enhance local mainstream retailers andrestaurant chains. Furthermore, we will develop
home meals online and in real time.
 We will lead collaboration between the medical
field and food manufacturers to develop,
manufacture and sell medical foods.
 Aiming for an open platform fromdevelopment to sale.
14Service Business: For Businesses on Our Supply Chain
We will create a platform that is sustainable and accessible to small-sized businesses
and sole proprietors in the food and medical food fields.

Needs

Services (Solution)

Rigid supply
chain

 A global supply chain is basicallywasteful and expensive.
 Demands for food safety and traceability,
etc. are increasing.

 We will make efforts to lower the costs of ourglobal supply chain.

Developmentof
digitalization

 Too much burden on digital investment
may pose the threat of unique products
and services being lost.
 This industry has many small andmedium-sized businesses that do notnecessarily have sufficient financial
strength.

 We will provide a common digitalized platform.

Consumers
who change
behaviorsandpreferences Increasing providers that cannot meet
consumers’ changing behaviors andpreferences
 Shortening life of products and trends
 Diversified drinking and eating
scenarios
 Genuinely healthy foods = Increasing
demand for medical foods

 We will systematically collect and analyze
information on the supply chain down to “eachplayer’s customers (and their customers’
customers)” to enable more accurate productand service development with players.
 Feed back this information speedily to
improve the platform.

2020 Nishimoto Wismettac Group All rights reserved.

15

Group PL Plan
Steady recovery of existing businesses from the impact of the coronavirus catastrophe
Active investment in new businesses
Planning assumption

Unit: billions of yen
Entirecompany

Assumption of normalization from the impact of the coronavirus pandemic during the first half of FY 2021

ResultFY 2019

Estimate
FY 2020Plan
FY 2021Plan
FY 2022

Sales

182.6

168.0

193.2

222.4

Profit

4.3

−0.6

2.5

6.5

Sales

180.5

165.3

184.8

205.2

Profit

5.4

1.4

4.8

8.0

Sales

128.8

115.7

131.8

150.3

Profit

4.5

1.0

4.0

7.0

Sales

47.7

46.0

49.1

50.8

Profit

0.8

0.3

0.6

0.8

Sales

3.9

3.6

3.9

4.1

Profit

0.1

0.1

0.2

0.2

Sales

2.1

2.7

8.4

17.2

Existing

GAF

Agricultural& Seafood
Products

Domestic
BtoC

New

Assessment
The operating income target for FY 2021
in the previous medium-term businessplan will be achieved with a one year
delay.
Sales growth will be delayed due to theimpact of the coronavirus but, after
improvements in profitability, the target in
the previous medium-term business plan
will be achieved with a one year delay.
Earning capacity will recover steadily
due to improvements in profitability inNorth America and growth in otherregions.
Earning capacity will be steadilyenhanced by the strengthening ofdomestic and international businesses.

Profitability will be kept stable with ourdiversified sales channels.

New businesses will further accelerate.

Profit−1.1

Note: The plan shows administrative accounting figures.
2020 Nishimoto Wismettac Group All rights reserved.

−2.0

−2.2

−1.5
16

Policy of Returning Profits to Shareholders

2020 Nishimoto Wismettac Group All rights reserved.

Policy of Returning Profits to Shareholders
Basic Policy
 The Company’s basic policy for returning profits to shareholders is to continue
providing stable dividends while striving to maintain retained earnings to develop
its businesses in the future and to improve its financial strength.

Dividend for the Current Year
 With a net loss of 939 million yen being recorded due to significant decreases insales, etc. associated with the novel coronavirus pandemic, we sincerely regret
having to omit the interim dividend.
 The year-end dividend estimate will be determined on the basis of an exhaustive
consideration of future business performance, internal reserves, and so on.
[Reference] Dividend for the previous year (Fiscal year ended December 2019): 95 yen (a 40 yen
interim dividend and a 55 yen year-end dividend)

2020 Nishimoto Wismettac Group All rights reserved.

18

Corporate Profile◆ Two spheres symbolizing the Earth and Globalism Red is used to show innovation, green represents
nature Expresses the Company’s “lasting commitment tocreating healthier and richer lives through food”◆ Incorporates the letters “W” “M” and “C” from theCompany name2020 Nishimoto Wismettac Group All rights reserved.

<Wisdom>(Western knowledge)<Metta>(Eastern knowledge)(Metta means kindness or empathy in Pali, anancient Indian language)<Creativity>(Ability to create value)

Nishimoto Wismettac: Corporate Profile
Founded in 1912, Nishimoto Wismettac has grown into a global company supplying
food ingredients and food products to markets worldwide
Company nameNishimoto Co., Ltd.

Head office

15th Floor, Nihonbashi Muromachi Mitsui Tower, 3-2-1, Nihonbashi Muromachi, Chuo-ku,
Tokyo

EstablishedMay 1912

Representative directors

Yoshiro Susaki, Chairman & President CEO

Number of employees

1,671(including 1,374 in the Asian Food Global Business) [As of December 31, 2019]
 Development and sales of Asian food worldwide

Business

Subsidiaries and affiliates

Business sites

 Imports and sales of fruit, vegetables and related processed products, and supply offood ingredients to food manufacturers and the restaurant sector
15 subsidiaries, 1 affiliate
49 worldwide (including 24 in North America)
Locations in Japan, the U.S., Canada, Singapore, Australia, Netherlands, U.K., Germany,
France, China, Hong Kong, Thailand, Vietnam and South Korea

Consolidated net sales

182.6 billion yen (FY ended December 2019)

Consolidated ordinary
income4.5 billion yen (FY ended December 2019)

Shareholders’ equity ratio
2020 Nishimoto Wismettac Group All rights reserved.

* Overseas sales ratio 67.7%

54.2% (FY ended December 2019)20

Nishimoto Wismettac: Domestic and Overseas Business Sites
Developing businesses in all continents with 49 global locations in North America, Europe,
Australia and Asia, among which North America (U.S. and Canada) has 24 locations
accounting for the majority of sales
・COMPTOIRS DES 3 CAPS SARL
13・COMPTOIRS OCEANIQUES|・CAP CAVALLY
16
・TROPIC FISH
12 SSP Konsumgüter TRADE & CONSULT GmbH

Calgary OfficeDenver Office

10 Harro Foods Limited
Wismettac Asian Foods,
4Inc. (Canada)
1 Nishimoto Co., Ltd.
WF Seoul Representative Office

Las Vegas Office

2 Wismettac Foods, Inc.

Seattle Office

7 NTC Wismettac Europe B.V.

WF Paris Representative Office8

Wismettac Foods
Shanghai Co., Ltd.

9

Shanghai IPM Co., Ltd.

Sacramento Office
San Francisco Office3

11 Nippon Foods Co., Ltd.

Hawaii Office

17 Sim Ba Trading Co., LTD
WF Ho Chi Minh Representative Office

Wismettac Asian Foods,
Inc.

WF Bangkok Representative Office

San Diego Office

WF Naha Representative Office

Toronto OfficeMontreal Office
Boston Office
New York Office
Washington, DC Office
Ohio OfficeMiami Office

WF Kobe Office
WF Kobe Branch

Chicago Office

Arizona OfficeOrlando OfficeAtlanta Office

Houston Office
5 NTC Wismettac Singapore Pte.Ltd.

Dallas Office
NTC Wismettac Australia Brisbane Office
6 NTC Wismettac Australia Pty Ltd.

NTC Wismettac Australia Perth Office
NTC Wismettac Australia Melbourne Office“WF” shown in the figure is an abbreviation for “Wismettac Foods”

2020 Nishimoto Wismettac Group All rights reserved.

21