Consolidated Financial Results for the Fiscal Year Ended December 31, 2019
(Japanese GAAP)
February 14, 2020
Company name:Nishimoto Co., Ltd
Listed exchange:
Tokyo
Code:
9260
URL: https://www.wismettac.com/
Representative:
Takayuki Kanai, President
Contact:
Atsuhiko Kimura, Director and CFO(Phone) 03-6870-2015
Scheduled date of the Annual General Meeting of Shareholders: March 26, 2020
Scheduled date of commencement of dividend payments:
March 12, 2020
Scheduled date of submission of the annual securities report:
March 27, 2020
Preparation of supplementary materials for financial results:
Yes
Holding of financial results presentation meeting:Yes(For institutional investors and analysts)(Amounts are rounded down to the nearest million yen)
1. Consolidated financial results for the fiscal year ended December 31, 2019(from January 1, 2019 to December 31, 2019)(1) Consolidated results of operations
Net sales(Percentages denote year-on-year changes)
Profit attributable toOrdinary income
owners of parent

Operating income

Million yen%

Million yen%

Million yen%

Million yen%

FY ended December 31, 2019
182,603
0.2
4,343
FY ended December 31, 2018
182,220–
6,703(Note) Comprehensive income
FY ended December 31, 2019: 2,179 million yen (-39.2%)
FY ended December 31, 2018: 3,582 million yen (–%)

(35.2)
–

4,543
6,569

(30.9)
–

2,493
4,624

(46.1)–Net income per
share

Diluted net income
Ordinary income to Operating income
Return on equity
per share
total assets
to net sales

Yen

Yen

%

%

%

FY ended December 31, 2019173.71
–
4.8
5.0
2.4
FY ended December 31, 2018322.18
–
9.1
7.8
3.7
(Reference) Equity in earnings of affiliates
FY ended December 31, 2019: 29 million yen
FY ended December 31, 2018: (15) million yen(Note) From the fiscal year ended December 2019, we changed the method for calculating the net defined benefit liability of ourdomestic consolidated subsidiaries from the simplified method from the projected benefit obligations (PBO) method andapplied the new method retroactively. Hence, the figures stated for the fiscal year ended December 2018 are those after the
retroactive application. Year-on-year percentage changes for the fiscal year ended December 31, 2018, are not shown as thischange has been applied retroactively.

(2) Consolidated financial position
Total assets
Million yen

Net assets

Equity ratio

Million yen

Net assets per share%Yen

FY ended December 31, 2019
96,58752,33754.2
3,646.41
FY ended December 31, 2018
83,71951,521
61.5
3,589.58(Reference) Shareholders' equity
FY ended December 31, 2019: 52,337 million yen
FY ended December 31, 2018: 51,521 million yen(Note) From the fiscal year ended December 2019, we changed the method for calculating the net defined benefit liability of ourdomestic consolidated subsidiaries from the simplified method from the projected benefit obligations (PBO) method andapplied the new method retroactively. Hence, the figures stated for the fiscal year ended December 2018 are those after the
retroactive application.

(3) Status of consolidated cash flows
Cash flows fromoperating activities
FY ended December 31, 2019
FY ended December 31, 2018

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at the end of
the period

Million yen

Million yen

Million yen

Million yen

843
5,587

(1,832)(1,215)

11,472(6,843)38,84428,516(Note) From the fiscal year ended December 2019, we changed the method for calculating the net defined benefit liability of ourdomestic consolidated subsidiaries from the simplified method from the projected benefit obligations (PBO) method andapplied the new method retroactively. Hence, the figures stated for the fiscal year ended December 2018 are those after the
retroactive application.

2. Dividends
Annual dividends
First
SecondThird
Year-endquarter-end quarter-end quarter-end
Yen

Yen

Yen

Yen

Total amount
Dividends
Payout ratioof dividends (Consolidated) on net assets

Total(Total)Yen(Consolidated)

Million yen%%

FY ended December 31, 2018
–
40.00
–
55.00
95.00
1,363
29.5
2.7
FY ended December 31, 2019
–
40.00
–
55.00
95.00
1,363
54.7
2.6
FY ending December 31, 2020
–
25.00
–
35.00
60.00
–
(Forecast)(Note) From the fiscal year ended December 2019, we changed the method for calculating the net defined benefit liability of ourdomestic consolidated subsidiaries from the simplified method from the projected benefit obligations (PBO) method andapplied the new method retroactively. Hence, the payout ratio (consolidated) and the ratio of dividends on net assets(consolidated) for the fiscal year ended December 2018 are those after the retroactive application.

3. Consolidated financial results forecast for the fiscal year ending December 31, 2020 (from January 1, 2020 to
December 31, 2020)

Net sales
Million yen

First half of FY ending
December 31, 2020
FY ending December 31, 2020

Operating income% Million yen(Percentages denote year-on-year changes)
Profit attributable Net income per
Ordinary income
to owners of parent
share% Million yen% Million yen– companies

Yen

99,1027.5

1,360(47.0)

1,380(48.2)

1,212(35.4)

84.50

205,835

12.7

3,052

(29.7)

3,143(30.8)

2,836

13.8

197.64* Notes(1) Changes in significant subsidiaries during the period (Changes in specified subsidiaries
resulting in changes in the scope of consolidation):
New%(Company name)/

Excluded

Yes

Wismettac(Company name) Foods,
Inc.

1 company(Note) For details, please see the section titled "(5) Notes to the consolidated financial statements (Changes in significant
subsidiaries during the current consolidated fiscal year)" under the chapter titled "3. Consolidated financial statements andmajor notes" on page 12 of the attachment.

(2) Changes in accounting policies, changes to accounting estimates, and restatements(i) Changes in accounting policies due to revisions of accounting standards: Yes(ii) Changes in accounting policies other than (i) above:Yes(iii) Changes in accounting estimates:None(iv) Restatements:

None(3) Number of shares outstanding (common stock)(i) Number of shares outstanding at the end of
the period (including treasury shares)(ii) Number of treasury shares at the end of theperiod(iii) Average number of shares during the period

December 31,
2019

14,353,140 shares

December 31,
2018

14,353,140 shares

December 31,
2019

112 shares

December 31,
2018

112 shares

December 31,
2019

14,353,028 shares

December 31,
2018

14,353,072 shares

(Reference) Overview of respective financial results
1. Respective financial results for the period ended December 31, 2019 (from January 1, 2019 to December 31,
2019)(Percentages denote year-on-year changes)(1) Respective operating results
Net sales
FY ended December 31, 2019
FY ended December 31, 2018

Operating income

Ordinary income

Net income

Million yen%

Million yen%

Million yen%

Million yen

%

3,215
2,910

10.5
56.0

1,392
1,201

15.9
498.3

1,400
1,173

19.4
–

1,381
1,153

19.8
768.6

Net income per share
FY ended December 31, 2019
FY ended December 31, 2018

Diluted net income
per share

Yen

Yen

96.28
80.37

–
–

(2) Respective financial position
Total assets
Million yen

FY ended December 31, 2019
35,987
FY ended December 31, 2018
16,685(Reference) Shareholders' equity
FY ended December 31, 2019: 12,900 million yen

Net assets

Equity ratio

Net assets per share

Million yen%

Yen

12,90012,88035.8
77.2

898.82897.42

FY ended December 31, 2018: 12,880 million yen* These financial results are not audited by certified public accountants or an audit corporation.
* Explanation of the proper use of financial results forecasts and other notes(Notes on forward-looking statements)
The forward-looking statements such as financial results forecasts contained in this document are based on information
currently available to the Company and certain reasonable assumptions. Thus, these statements are not intended for
management to promise the achievement of the forecast. Actual financial results may differ materially due to various factors.
For conditions of the assumptions in the forecast and notes to use of the forecast, please see the section titled "(4) Futureforecasts" under the chapter titled "1. Overview of operating results, etc." on the page 4 of the attachment.

(How to obtain supplementary explanatory materials for the financial results)
On Friday, February 14, 2020, supplementary explanatory materials for the financial results will be disclosed via TDnet andposted on the Company's website. On Tuesday, February 18, 2020, based on these materials, a meeting will be held to brief
institutional investors and analysts on the financial results.

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019

Attachment: Table of Contents
1. Overview of operating results, etc. ............................................................................................................................. 2(1) Overview of operating results for the current period .......................................................................................... 2(2) Overview of financial position for the current period ........................................................................................ 3(3) Overview of cash flows for the current period ................................................................................................... 3(4) Future forecasts.................................................................................................................................................. 4
2. Basic approach on selection of accounting standards .............................................................................................. 5
3. Consolidated financial statements and major notes .................................................................................................. 6(1) Consolidated balance sheet ................................................................................................................................ 6(2) Consolidated statements of income and comprehensive income ....................................................................... 8(3) Consolidated statement of changes in equity ................................................................................................... 10(4) Consolidated statement of cash flows .............................................................................................................. 12(5) Notes to the consolidated financial statements ................................................................................................ 13(Notes to assumption of going concern) .......................................................................................................... 13(Changes in significant subsidiaries during the current consolidated fiscal year) ............................................ 13(Changes in Accounting Policies) .................................................................................................................... 13(Changes in presentation methods) .................................................................................................................. 14(Segment information) ..................................................................................................................................... 14(Per share information) .................................................................................................................................... 18(Significant subsequent events) ....................................................................................................................... 19-1-

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019

1. Overview of operating results, etc.
(1) Overview of operating results for the current period[Overview of the current consolidated fiscal year]
During the current consolidated fiscal year, the world economy as a whole continued to recover moderately. However, the paceof recovery has slowed since a high degree of uncertainty remains about trade issues persisting from the previous fiscal year,
the outlook for the Chinese economy, the U.K.'s withdrawal from the E.U., and conditions in financial and capital markets.
Meanwhile, the overall Japanese economy remained on a moderate recovery track as the employment and income
environments continue to improve, although exports weakened and companies, mainly manufacturers, became more cautious
in determining their views on business conditions.
Under these circumstances, the Company Group worked to improve its operating results by running two main businesses: theAsian Food Global Business that distributes Asian food products and ingredients such as Japanese food around the world witha focus on North America, as well as in Europe, China, South East Asia, Australia, etc., and the Agricultural & Seafood
Products Trading Business that distributes fruits and vegetables, fishery products, etc., in domestic markets, as well as overseas
markets through exports and offshore trading.
In the Asian Food Global Business, the Company distributes Japanese and other Asian foods and ingredients in overseas
markets with a focus on North America through restaurants and supermarkets as the main distribution routes, while also
engaging in integrated operations, covering from product planning and development, purchases, and import customs clearance
through to storage and delivery. In addition, to keep pace with market expansion driven by the global Japanese food boom, theCompany Group has built a sales network comprised of 24 sites in North America and 14 sites outside North America. In thecurrent consolidated fiscal year, in addition to efforts to realize stable growth and structural reforms in North America, theCompany Group has been aggressively developing markets and has set the strengthening of business bases in other regions as
one of the Company Group's growth strategies.
In the Agricultural & Seafood Products Trading Business, the Company imports and wholesales fruits, and vegetables, fisheryproducts, etc. to the domestic wholesale market, mass retailers, restaurant chains and home-meal replacement industries, food
manufacturers, etc., while also exporting domestic fruits and vegetables and conducting offshore trading. With the current
consolidated fiscal year seeing the domestic import market level-off, in addition to the wholesale market, which is its existing
main distribution route, the Company Group has been working to develop other distribution routes (mass retailers, restaurant
chains, home-meal replacement industries, etc.) and overseas distribution routes (export of domestic fruits and vegetables,
offshore trading in fruits and vegetables, wholesale business in China, etc.).
As a result, with respect to the financial results for the current consolidated fiscal year, net sales stood at 182,603 million yen(0.2% increase year-on-year), operating income amounted to 4,343 million yen (35.2% decrease year-on-year), ordinary
income amounted to 4,543 million yen (30.9% decrease year-on-year) and profit attributable to owners of parent totaled 2,493
million yen (46.1% decrease year-on-year).
Financial results by segment are as follows: It is noted that net sales of segments are net sales to external customers.
[Overview of financial results by segment](i) Asian Food Global BusinessIn regard to financial results of the Asian Food Global Business for the current consolidated fiscal year, net sales stood at
128,820 million yen (3.0% increase year-on-year) and operating income amounted to 4,108 million yen (24.0% decreaseyear-on-year).
While net sales grew steadily in the North America region, costs rose, mainly due to higher additional tariffs on imports
from China and price hikes of national brand products, which the Company has responded to by appropriately reflecting
the hikes in sales prices. However, operating income decreased due to personnel and logistics unit expenses remaining
high, following on from the previous fiscal year, and the recording of expenses for structural changes. In this region, we
will further bolster our ongoing efforts on restructuring (profitability improvement and logistics expenses restraint),
thereby working to deliver increased profitability.
In regions outside of North America, profits were squeezed, and in particular, a U.K. subsidiary, Wismettac Harro Foods
Limited, was affected by the continuous rise in purchase prices due to fluctuations in currency exchange rates. Overall,
profits decreased due to costs associated with the reinforcement of management, purchasing and procurement personnel toexpand the business platform.

-2-

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019(ii) Agricultural & Seafood Products Trading BusinessWith respect to financial results of the Agricultural & Seafood Products Trading Business for the current consolidated
fiscal year, net sales stood at 49,805 million yen (5.8% decrease year-on-year) and operating income amounted to 765
million yen (25.9% decrease year-on-year).
Net sales were affected by sluggish sales and falls in unit prices of citrus and tropical commodities in the domestic market
and poor sales of commodities produced in North America in China. Profits declined, affected by the decrease in sales offruits and vegetables as a whole in both Japan and China, the increase in costs, and other negative factors.
(iii) Other businesses
As to financial results of other businesses for the current consolidated fiscal year, net sales stood at 3,977 million yen(5.8% decrease year-on-year) and operating income amounted to 173 million yen (33.2% decrease year-on-year).
Sales and operating income decreased due to a slowdown in character products and event products for the domestic
market and a significant increase in logistics expenses.

(2) Overview of financial position for the current period(Assets)
Total assets as of December 31, 2019 stood at 96,587 million yen, an increase of 12,868 million yen compared to
December 31, 2018, and was mainly attributable to the following.
Total current assets as of December 31, 2019 amounted to 87,960 million yen, an increase of 13,020 million yen compared
to December 31, 2018. The increase in total current assets was due to an increase of 10,610 million yen in cash anddeposits and an increase of 1,247 million yen in inventories, despite a decrease of 140 million yen in notes and accounts
receivable—trade.
Total non-current assets as of December 31, 2019 came to 8,627 million yen, a decrease of 152 million yen compared to
December 31, 2018. The decrease in total non-current assets was due to a decrease of 671 million yen in goodwill and adecrease of 484 million yen in customer-related assets, despite an increase of 751 million yen in buildings and structures(net) and an increase of 282 million yen in leased assets (net).
(Liabilities)
Total liabilities as of December 31, 2019 stood at 44,250 million yen, an increase of 12,052 million yen compared to
December 31, 2018, and was mainly attributable to the following.
Total current liabilities as of December 31, 2019 amounted to 19,058 million yen, a decrease of 1,117 million yen
compared to December 31, 2018. The decrease in total current liabilities was due to a decrease of 1,547 million yen innotes and accounts payable—trade, despite an increase of 485 million yen in others in current liabilities, including accrued
expenses.
Total fixed liabilities as of December 31, 2019 amounted to 25,191 million yen, an increase of 13,170 million yen
compared to December 31, 2018. The increase in fixed liabilities is attributed to an increase of 12,864 million yen in longterm loans payable.
(Net assets)
Total net assets as of December 31, 2019 amounted to 52,337 million yen, an increase of 815 million yen compared to
December 31, 2018. The increase in net assets was mainly due to an increase of 1,129 million yen in retained earnings
despite a decrease of 328 million yen in foreign currency translation adjustments.

(3) Overview of cash flows for the current period
Cash and cash equivalents (hereinafter referred to as "funds") as of December 31, 2019 amounted to 38,844 million yen, an
increase of 10,327 million yen compared to December 31, 2018.
The status of respective cash flows for the current consolidated fiscal year and its main factors are as follows:(Cash flows from operating activities)
Cash flows from operating activities were positive at 843 million yen and major factors are as follows. The major factors
included payments for 2,668 million yen in income taxes, an increase of 1,471 million yen in inventories, 3,753 million
yen in profit before income taxes, and 1,281 million yen in depreciation and amortization, a non-cash expense.

-3-

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019

The amount of funds obtained decreased by 4,744 million yen (84.9% decrease year-on-year) compared to in the previous
consolidated fiscal year. The major factors included a decrease of 1,244 million yen in inventories, a decrease of 1,036
million yen in notes and accounts receivable—trade, an increase of 3,268 million yen in expenditures for notes andaccounts payable—trade, a decrease of 2,671 million yen in net profit before income taxes, and an increase of 1,380
million yen in payment for income taxes.
(Cash flows from investing activities)
Cash flows from investing activities were negative at 1,832 million yen and major factors are as follows. The major
factors included proceeds of 261 million yen from refunds of guarantee deposits, expenditure of 1,455 million yen for thepurchase of property, plant and equipment, and expenditure of 268 million yen due to a net change in time deposits.
The amount of funds spent increased by 617 million yen (50.8% increase year-on-year) compared to in the previous
consolidated fiscal year. Major factors included a decrease of 655 million yen in expenditures due to payments forguarantee deposits, an increase of 1,327 million yen in expenditures due to the purchase of property, plant and equipment,
and an increase of 285 million yen in expenditures due to a net change in time deposits.
(Cash flows from financing activities)
Cash flows from financial activities were positive at 11,472 million yen. The major factors included a payment of 1,363
million yen for dividends, expenditure of 208 million yen due to repayments of finance lease obligations, and income of
13,000 million yen from long-term loans payable.
The amount of funds obtained increased by 18,315 million (6,843 million yen in funds was spent in the previous
consolidated fiscal year) compared to in the previous consolidated fiscal year. The major factors included an increase of
149 million yen in expenditures due to repayments of finance lease obligations, an increase of 13,000 million yen inincome from long-term loans payable, a decrease of 3,223 million yen in expenditures due to repayment of long-termloans payable, and an increase of 2,027 million yen in income due to an increase in short-term loans payable.

(4) Future forecasts(Millions of yen)
FY ended
December 31, 2019
(Actual)
Net sales

FY ending
December 31, 2020
(Forecast)

Increase(decrease)

Increase(decrease) rate

182,603205,835

23,231

12.7

Operating income

4,343

3,052

(1,290)(29.7)

Ordinary income

4,543

3,143

(1,399)(30.8)

Profit attributable toowners of parent

2,493

2,836

343

13.8

In the Asian Food Global Business, we will continue to grow stably in existing markets such as for Japanese foods in the North
American region while further expanding our business platform in other regions. In the North American region, we will further
seek to acquire new distribution routes for non-Japanese food products (corporate customers) and develop products actively tothis end. In the Agricultural & Seafood Products Trading Business, we will continue to maintain sales to the Japanesewholesale market, and work on expanding distribution routes to mass retailers, home-meal replacement industries, restaurant
chains and food product manufacturers as well as overseas distribution routes.
Meanwhile, for the external environment, we anticipate a drastic change in the global food distribution industry. We willcontinue to actively recruit professionals with specialized skills and invest in digitalization to respond to ongoing and futureenvironmental changes, which should serve as the seeds for growth. In the North American region, we will develop our
logistics and operations and seek to acquire new distribution routes (corporate customers). In other regions, we will build astructure to perform management on an area-by-area basis. For the Group as a whole, we will promote digitization and recruit
specialized professionals to further promote efforts to broaden our product lineup and develop and bolster our logistics andoperations across the Group.
Accordingly, we expect that net sales will stand at 205,835 million yen (an increase of 23,231 million yen year-on-year),
operating income will amount to 3,052 million yen (a decrease of 1,290 million yen year-on-year), ordinary income willamount to 3,143 million yen (a decrease of 1,399 million yen year-on-year), and profit attributable to owners of parent will
total 2,836 million yen (an increase of 343 million yen year-on-year).

-4-

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019

[Prerequisites for the forecast]
The exchange rate is assumed to be 108 yen/U.S. dollar.

2. Basic approach on selection of accounting standards
The Company Group prepares the consolidated financial statements in accordance with Japanese Generally Accepted Accounting
Principles ("Japanese GAAP"), taking into consideration the workload for establishing the system for the preparation of theconsolidated financial statements in accordance with International Financial Reporting Standards (IFRS).

-5-

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019

3. Consolidated financial statements and major notes(1) Consolidated balance sheet(Millions of yen)
FY 2018(As of December 31, 2018)

FY 2019(As of December 31, 2019)

Cash and deposits
Notes and accounts receivable—trade28,52019,547

39,13019,407

Inventories
Other

25,425
1,604

26,672
2,925

AssetsCurrent assets

Allowance for doubtful accounts
Total current assets

(158)

(175)

74,93987,960

1,857
374

2,609
438

75
185

208
467

Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net
Leased assets, net
Other, net

279

186

2,771

3,910

671
168
303

–
417
12

Customer-related assets
Other

815
69

330
62

Total intangible assets

2,028

823

Investments and other assets
Investment securities
Guarantee deposits
Deferred tax assets

1,255
1,058
1,035

1,164
926
1,092

Other
Allowance for doubtful accounts

810
(178)

777
(67)

Total investments and other assets

3,979

3,893

Total property, plant and equipment
Intangible assets
Goodwill
Software
Software in progress

Total non-current assets
Total assets

-6-

8,779

8,627

83,71996,587

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019

(Millions of yen)
FY 2018(As of December 31, 2018)

FY 2019(As of December 31, 2019)11,540
2,640

9,993
2,890

140

143

52
2,740

206
2,592

700
538

144
641

–

137

Provision for shareholders' benefits
Other

5
1,816

7
2,301

Total current liabilities

20,176

19,058Non-current liabilities
Long-term loans payable

Liabilities
Current liabilities
Notes and accounts payable—trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Accounts payable—other
Income taxes payable
Provision for bonuses
Provision for directors' bonuses

9,351

22,215

Lease obligations

135

265

Deferred tax liabilities
Provision for directors' bonuses

126
–

66
58

Provision for directors' retirement benefits
Net defined benefit liability
Other

560
1,467
378

645
1,527
413

Total non-current liabilities

12,021

25,19132,19744,2502,646
6,531
41,983

2,646
6,531
43,112(0)(0)

Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares

51,16052,290

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans

Total shareholders' equity

6
(3)
360
(2)

8
6
31
0

Total accumulated other comprehensive income

360

46

51,521

52,337

83,71996,587

Total net assets
Total liabilities and net assets-7-

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019(2) Consolidated statements of income and comprehensive income
Consolidated statement of income
FY 2018(January 1, 2018 to
December 31, 2018)
182,220(Millions of yen)
FY 2019(January 1, 2019 to
December 31, 2019)
182,603

Cost of sales

150,361

150,495

Gross profit

31,85832,108Selling, general and administrative expenses

25,15527,764

Operating income

6,703

4,343

Interest and dividend income
Share of profit of entities accounted for using equity
methodInsurance benefits received

158

242

–

29

176

0

Reversal of allowance for doubtful accounts
Other

–
38

8
58

Total non-operating income

373

339

Net sales

Non-operating income

Non-operating expenses
Interest expenses

160

122

Loss on equity-method investments
Foreign exchange losses
Provision of allowance for doubtful accounts

15
214
58

–
17
–

Other

57

0

Total non-operating expenses

506

139

6,569

4,543

1

1

1

1

0
146

3
788

146

791

Profit before income taxes

6,424

3,753

Income taxes—current
Income taxes—deferred

1,753
47

1,386
(126)

Total income taxes

1,800

1,259

Net income
Profit attributable to non-controlling interests

4,624

2,493

–

–

Profit attributable to owners of parent

4,624

2,493

Ordinary income
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Total extraordinary losses-8-Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019

Consolidated statement of comprehensive income

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income

FY 2018(January 1, 2018 to
December 31, 2018)
4,624(Millions of yen)
FY 2019(January 1, 2019 to
December 31, 2019)
2,493

(8)

2

(11)
(945)

9
(287)

(2)

3

(72)

(40)

(1,041)

(314)

3,582

2,179

3,582

2,179

–

–

(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-9-

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019(3) Consolidated statement of changes in equity
Previous consolidated fiscal year (from January 1, 2018 to December 31, 2018)(Millions of yen)
Shareholders' equity
Capital stock
Beginning balance
Cumulative effects ofchanges in accounting
policies
Restated balance

2,646

Capital surplus

Retained earnings

Treasury shares

Total shareholders'equity6,531

39,173(0)48,351

(235)
2,646

6,531

(235)

38,937(0)

48,115

Changes during the period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
sharesChanges in items otherthan shareholders'equity, net
Total changes during theperiodEnding balance(1,578)(1,578)

4,624

4,624
(0)

(0)

–

–

3,045

(0)

3,045

2,646

6,531

41,983(0)51,160

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities
Beginning balance
Cumulative effects ofchanges in accounting
policies
Restated balance

15

Deferred gains orlosses on hedges

Foreign currencytranslation
adjustment

Remeasurements ofdefined benefit
plans

Total accumulated
othercomprehensive
income

8

1,378

–

1,402

Total net assets

49,753
(235)

15

8

1,378

–

1,402

49,517

Changes during the period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
sharesChanges in items otherthan shareholders'equity, net
Total changes during theperiodEnding balance(1,578)
4,624
(0)
(8)

(11)

(1,018)(2)(1,041)(1,041)(8)(11)(1,018)(2)(1,041)

2,003

6

(3)

360

(2)

360

51,521- 10 -

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019

Current consolidated fiscal year (from January 1, 2019 to December 31, 2019)(Millions of yen)
Shareholders' equity
Capital stock
Beginning balance

2,646

Capital surplus

Retained earnings

Treasury shares

Total shareholders'equity6,531

41,983(0)51,160Changes during the period
Dividends of surplus
Profit attributable toowners of parent
Changes in items otherthan shareholders'equity, net
Total changes during theperiodEnding balance(1,363)(1,363)

2,493

2,493

–

–

1,129

–

1,129

2,646

6,531

43,112(0)52,290

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities
Beginning balance

6

Deferred gains orlosses on hedges

Foreign currencytranslation
adjustment

Remeasurements ofdefined benefit
plans

Total accumulated
othercomprehensive
income

(3)

360

(2)

360

Total net assets

51,521

Changes during the period
Dividends of surplus
Profit attributable toowners of parent
Changes in items otherthan shareholders'equity, net
Total changes during theperiodEnding balance(1,363)
2,493

2

9

(328)

3

(314)

(314)

2

9

(328)

3

(314)

815

8

6

31

0

46

52,337- 11 -

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019(4) Consolidated statement of cash flows(Millions of yen)
FY 2019(January 1, 2019 to
December 31, 2019)

FY 2018(January 1, 2018 to
December 31, 2018)
Cash flows from operating activities
Profit before income taxes

6,424

3,753

Depreciation and amortization

1,104

1,281

146

788

Impairment loss
Increase (decrease) in allowance for doubtful accounts

54

6Interest and dividend income

(158)

(242)

Interest expenses
Share of (profit) loss of entities accounted for using equity
methodForeign exchange losses (gains)

160

122

15

(29)

38

74

Decrease (increase) in notes and accounts receivable—trade(1,041)(5)

Decrease (increase) in inventories(2,716)(1,471)

Increase (decrease) in notes and accounts payable—trade

1,807(1,461)

Increase (decrease) in accounts payable—other

436

(136)

Increase (decrease) in provision for bonuses

21

107

Increase (decrease) in provision for directors' bonuses
Increase (decrease) in provision for shareholder benefit
programIncrease (decrease) in net defined benefit liability

–

194

5

2

162

147

Other

233

(47)

Subtotal

6,692

3,084

168

317

Interest and dividend income received
Interest expenses paid
Income taxes paid
Income taxes refunded

(170)

(115)

(1,288)(2,668)

184

226

5,587

843

Purchase of property, plant and equipment(127)(1,455)Purchase of intangible assets

(337)

(88)

Expenditures due to payment for guarantee deposits

(728)

(72)

13

261

Payments of loans receivable

–

(138)

Net decrease (increase) in time deposits

17

(268)

Other

(52)

(70)

(1,215)(1,832)

Cash flows from operating activities
Cash flows from investing activities

Proceeds from refunds of guarantee deposits

Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable(1,823)

203

Repayments of long-term loans payable–

13,000

Repayments of long-term loans payable(3,383)

(159)

(0)

–

Purchase of treasury shares
Repayments of finance lease obligations

(58)

(208)

Cash dividends paid

(1,577)(1,363)

Cash flows from financing activities(6,843)

11,472

(299)

(156)

Net increase (decrease) in cash and cash equivalents(2,770)

10,327

Cash and cash equivalents at beginning of period

31,28628,516

Cash and cash equivalents at end of period

28,516

38,844

Effect of exchange rate change on cash and cash equivalents- 12 -

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019(5) Notes to the consolidated financial statements(Notes to assumption of going concern)
No relevant items.

(Changes in significant subsidiaries during the current consolidated fiscal year)
During the current consolidated fiscal year, an absorption-type merger was implemented between the Company's consolidated
subsidiaries, Nishimoto Trading Co., Ltd., as the surviving company, and Wismettac Foods, Inc., as the absorbed company.
Due to this absorption-type merger, Wismettac Foods, Inc., has been excluded from the scope of consolidation from the current
consolidated fiscal year. Nishimoto Trading Co., Ltd., the surviving company, changed its trade name to Wismettac Foods, Inc.
as of January 1, 2019.

(Changes in Accounting Policies)
Changes in the method for calculating retirement benefit obligations
From the current consolidated fiscal year, the Company has changed its method of calculating retirement benefit obligations
for its domestic consolidated subsidiaries, from the simplified method to the standard method. In order to respond to changes inthe business environment, two domestic consolidated subsidiaries were merged in January 2019. The number of employees is
expected to increase due to further expansion of operations in the future. In light of this, the Company verified the reliability ofretirement benefit estimates based on actuarial calculations and concluded that adopting the standard method will improve theaccuracy of the calculation of retirement benefit obligations and enable more appropriate periodic accounting of profit and loss
regarding retirement benefit expenses, because of which the Company has applied such a change.
This change in accounting policies has been applied retroactively. Consolidated financial statements for the consolidated fiscal
year ended December 31, 2018, have been adjusted retroactively.
As a result, compared with before the retroactive change, "Deferred tax assets" and "Net defined benefit liability" on the
consolidated balance sheet for the fiscal year ended December 31, 2018, increased by 131 million yen and 380 million yen,respectively. "Operating income," "Ordinary income," and "Profit before income taxes" on the consolidated statements ofincome for the fiscal year ended December 31, 2018, each decreased by 15 million yen. The cumulative effect on net assets atthe beginning of the fiscal year was to decrease the retained earnings balance at the beginning of the fiscal year by 235 million
yen.
"Profit before income taxes" decreased by 15 million yen and "Increase (decrease) in net defined benefit liability" increased by
the same amount on the consolidated statement of cash flows for the fiscal year ended December 31, 2018.
The impact on per share information is described in the relevant section.
Application of International Financial Reporting Standard 16 "Leases"
From the current consolidated fiscal year, some of the Company's overseas consolidated subsidiaries that adopt International
Financial Reporting Standard have applied International Financial Reporting Standard 16 "Leases" (hereafter referred to as"IFRS 16"). As a result, a lessee of leases is, in principle, required to record all leases as assets and liabilities on the
consolidated balance sheet.
For the adoption of IFRS 16, in accordance with the transitional treatment, the lease liability is measured at the present value ofthe remaining lease payments, discounted using the lessee's incremental borrowing rate at the date of initial application. The
right-of-use asset is recognized in the same amount.
As a result, "Property, plant and equipment" and "Others" in current liabilities, and "Others" in non-current liabilities on the
consolidated balance sheet for the fiscal year ended December 31, 2018, increased by 325 million yen, 156 million yen, and
172 million yen, respectively.
The impact of the application of this accounting standard on the statement of income and per share information for the current
consolidated fiscal year is minimal.
For the consolidated statement of cash flows for the current consolidated fiscal year, cash flows from operating activities
increased by 155 million yen and cash flows from financing activities decreased by the same amount.

- 13 -

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019

(Changes in presentation methods)(Changes associated with the application of the Partial Amendments to Accounting Standard for Tax Effect Accounting)Starting from the beginning of the current consolidated fiscal year, the Partial Amendments to Accounting Standard for Tax
Effect Accounting (ASBJ Statement No. 28, February 16, 2018) has been applied. As a result, the presentation methods fordeferred tax assets and liabilities have been changed, including deferred tax assets in the category of investments and otherassets and deferred tax liabilities in the category of non-current liabilities.
Consequently, 185 million yen that was previously recorded in "Deferred tax assets" in the category of "Current assets" is now
included in 1,035 million yen of "Deferred tax assets" in "Investments and other assets."(Consolidated cash flow statements)
From the current consolidated fiscal year, "Proceeds from refunds of guarantee deposits," which was included in "Others" ofthe cash flows from investment activities in the previous consolidated fiscal year, was reported as an independent accountbecause it has become more financially important. The consolidated financial statements for the previous consolidated fiscal
year were rearranged to reflect this change in the presentation method.
As a result, (38) million yen, indicated in "Others" of the cash flows from investment activities in the consolidated cash flow
statements in the previous consolidated fiscal year, was reallocated to 13 million yen for "Proceeds from refunds of guarantee
deposits" and (52) million yen for "Others."(Segment information)[Segment information]
1.

Overview of reporting segments
A reporting segments of the Company Group is one of the structural units of the Company Group, in which segregatedfinancial information is available, and is subject to review on a regular basis so that the Board of Directors could determine theallocation of management resources and evaluate the operating results.
The Company Group has a holding company structure, in which the Company is the holding company. The Company
formulates the Group's business strategies and performs general management and the subsidiaries conduct business activities.
The Company Group consists of business segments that are classified, in consideration of similarities in economic
characteristics, etc., into one of three reportable segments: the Asian Food Global Business, the Agricultural & Seafood
Products Trading Business, and the Other business.
The details of services that are included in each reporting segment are as follows:
Segment

Asian Food Global Business
Agricultural & Seafood Products
Trading Business
Other business

2.

Major products or business details
Wholesaling and distribution business of Asian food products and ingredients with afocus on Japanese food around the world, etc.
Import and wholesaling of perishable and frozen processed fruits and vegetables, marine
products, etc. to wholesale markets, volume sellers, restaurants, home-meal replacement
industry, food manufacturers, etc. in Japan, export of domestically produced vegetables
and fruits, triangular trade, and so forth.
Original product sales business using foreign brand foods and characters, sales ofsupplements, catalog mail order business, etc.

Method of calculation of the amount of sales, profit or loss, assets, liabilities and other items for each reporting segment
The accounting treatment for the reported business segments is basically the same as that adopted in the preparation of theconsolidated financial statements.
The profit of the reporting segment is a figure on an operating income basis. The amount of intersegment sales and transfers
are based on market prices.
As stated in "Changes in Accounting Policies," starting from the current consolidated fiscal year, the method for calculating
retirement benefit obligations for the Company's domestic consolidated subsidiaries has been changed from the simplified
method to the standard method, which has been retroactively applied.
As a result of this change, compared with before the retroactive change, segment profit decreased by 5 million yen in the Asian
Food Global Business, by 8 million yen in the Agricultural & Seafood Products Trading Business, and by 2 million yen in the
Other business, respectively. Segment assets increased by 43 million yen in the Asian Food Global Business, by 68 million yen
in the Agricultural & Seafood Products Trading Business, and by 19 million yen in the Other business respectively.

- 14 -

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 20193.

Information on the amount of sales, profit or loss, assets, liabilities and other items for each reporting segment

Previous consolidated fiscal year (from January 1, 2018 to December 31, 2018)(Millions of yen)
Reporting segment
Agricultural &Asian Food
Seafood Products Other business
Global BusinessTrading Business

Total

Adjustment(Note 1)

Amount recorded on
the Consolidated
Financial Statements(Note 2)

Net sales
Sales to external customers

125,11252,886

4,221

182,220–

Intersegment sales or transfers

9,423

227

0

9,651

(9,651)–

134,536

53,113

4,221

191,872(9,651)

182,220

Total

182,220

Segment profit

5,404

1,032

259

6,697

6

6,703

Segment assets

58,136

11,666

1,862

71,666

12,05383,719

937

11

7

957

72

1,030

1,158

–

–

1,158

–

1,158

169

8

19

196

269

465

Other items
Depreciation
Investments in entities accounted forusing equity method
Increase in property, plant andequipment as well as intangible assets(Note) 1. Adjustments are as follows:(1) "Adjustment" for segment profit in the amount of 6 million yen includes (1,195) million yen for elimination ofintersegment transactions and 1,201 million yen for company profit/loss not allotted to reporting segments (netcompany profits and net company expenses). Company profits consist mainly of dividend income from reporting
segments, and company expenses mainly comprise general and administrative expenses not attributed to reporting
segments.
(2) "Adjustment" for segment assets in the amount of 12,053 million yen includes 18,836 million yen for company assets
not allotted to reporting segments and so forth. The company-wide assets are mainly surplus funds (cash and deposits)
that are not attributable to any reporting segments.
(3) The depreciation adjustment of 72 million yen is mainly depreciation concerning company-wide assets.
(4) The adjustment of 269 million yen in relation to the increase in property, plant and equipment as well as intangible
assets is the increase in non-current assets concerning the company-wide assets.
2. Segment profit is adjusted with operating income in the consolidated financial statements.
Current consolidated fiscal year (from January 1, 2019 to December 31, 2019)(Millions of yen)
Reporting segment
Agricultural &Asian Food
Seafood Products Other business
Global BusinessTrading Business

Total

Adjustments(Note 1)

Amount recorded on
the Consolidated
Financial Statements(Note 2)

Net sales
Sales to external customers

128,820

49,805

3,977

182,603–

Intersegment sales or transfers

8,382

32

–

8,415

(8,415)–

137,20349,837

3,977

191,019(8,415)

182,603

Segment profits

4,108

765

173

5,048

(704)

4,343

Segment assets

59,466

9,077

1,849

70,393

26,19396,587

990

8

9

1,008

199

1,207

1,065

–

–

1,065

–

1,065

1,139

15

13

1,168

862

2,031

Total

182,603

Other items
Depreciation
Investments in entities accounted forusing equity method
Increase in property, plant andequipment as well as intangible assets(Note) 1. Adjustments are as follows:(1) "Adjustment" for segment profit in the amount of (704) million yen includes (1,396) million yen for elimination ofintersegment transactions and 692 million yen company profit/loss not allotted to reporting segments (net company
profits and net company expenses). Company profits consist mainly of dividend income from reporting segments, andcompany expenses mainly comprise general and administrative expenses not attributed to reporting segments.
(2) "Adjustment" for segment assets in the amount of 26,193 million yen includes 35,530 million yen for company assets
not allotted to reporting segments and so forth. The company-wide assets are mainly surplus funds (cash and deposits)
that are not attributable to any reporting segments.
(3) The depreciation adjustment of 199 million yen is mainly depreciation concerning company-wide assets.
(4) The adjustment of 862 million yen in relation to the increase in property, plant and equipment as well as intangible
assets is the increase in non-current assets concerning the company-wide assets.
2. Segment profit is adjusted with operating income in the consolidated financial statements.

- 15 -

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019

[Related information]
Previous consolidated fiscal year (from January 1, 2018 to December 31, 2018)
1.

Information on respective products and services
Similar information is disclosed in the "Segment information," and therefore descriptions are omitted.

2.

Information for each region(1) Net sales(Millions of yen)Japan

North America
59,623

Other

106,668

Total
15,928

182,220(Note) Of North America, 92,699 million yen is for the U.S.
(2) Property, plant and equipment(Millions of yen)Japan

North America
77

Other
1,821

Total
872

2,771

(Note) 1. Of North America, 1,770 million yen is for the U.S.
2. "Other" includes 845 million yen for the U.K.
3.

Information for major customers
With respect to net sales to external customers, there are no customers that accounts for 10% or more of the net sales on the
consolidated statement of income, and therefore descriptions are omitted.

Current consolidated fiscal year (from January 1, 2019 to December 31, 2019)1.

Information on respective products and services
Similar information is disclosed in the "Segment information," and therefore descriptions are omitted.

2.

Information for each region(1) Net sales(Millions of yen)Japan

North America
57,762

Other

109,647

Total
15,193

182,603(Note) Of North America, 95,577 million yen is for the U.S.
(2) Property, plant and equipment(Millions of yen)Japan

North America
807

Other
1,909

Total
1,193

(Note) 1. Of North America, 1,850 million yen is for the U.S.
2. "Other" includes 957 million yen for the U.K.

- 16 -

3,910

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 20193.

Information for major customers
With respect to net sales to external customers, there are no customers that accounts for 10% or more of the net sales on the
consolidated statement of income, and therefore descriptions are omitted.

[Information regarding impairment losses on non-current assets for each reporting segment]
Previous consolidated fiscal year (from January 1, 2018 to December 31, 2018)(Millions of yen)
Asian Food Global
Business

Agricultural &Seafood Products
Trading Business

146–

Impairment loss

Company-wide/
Eliminations

Other business
–

Total
–

146

Current consolidated fiscal year (from January 1, 2019 to December 31, 2019)(Millions of yen)
Asian Food Global
Business

Agricultural &Seafood Products
Trading Business

788–

Impairment loss

Company-wide/
Eliminations

Other business
–

Total
–

788

[Information on amortization of goodwill and unamortized balance for each reporting segment]
Previous consolidated fiscal year (from January 1, 2018 to December 31, 2018)(Millions of yen)
Asian Food Global
Business

Agricultural &Seafood Products
Trading Business

74

–

–

–

74

671

–

–

–

671

Amortization forthe current period
Balance at end ofcurrent period

Company-wide/
Eliminations

Other business

Total

Current consolidated fiscal year (from January 1, 2019 to December 31, 2019)(Millions of yen)
Asian Food Global
Business

Agricultural &Seafood Products
Trading Business

73

–

–

–

73

–

–

–

–

–

Amortization forthe current period
Balance at end ofcurrent period

Company-wide/
Eliminations

Other business[Information on gain on bargain purchase for each reporting segment]
Previous consolidated fiscal year (from January 1, 2018 to December 31, 2018)
No relevant items.
Current consolidated fiscal year (from January 1, 2019 to December 31, 2019)
No relevant items.

- 17 -Total

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019

(Per share information)
FY 2018(January 1, 2018 to December 31, 2018)

FY 2019(January 1, 2019 to December 31, 2019)

Net assets per share

3,589.58 yen

3,646.41 yen

Net income per share

322.18 yen

173.71 yen(Note) 1.
2.

3.

A description of diluted net income per share is omitted as there are no diluted shares.
As stated in "Changes in Accounting Policies," starting from the current consolidated fiscal year, the method for
calculating retirement benefit obligations for the Company's domestic consolidated subsidiaries has been changed fromthe simplified method to the standard method, which has been retroactively applied to the consolidated financial
statements for the previous fiscal year.
As a result, compared with before the retroactive change, net assets per share and net income per share decreased by
17.34 yen and 0.71 yen, respectively.
The basis for calculating net income per share is as follows:

Profit attributable to owners of parent (million yen)Amount not attributable to common shareholders (million yen)
Profit attributable to owners of parent concerning common shares(million yen)
Average number of common shares during the period (shares)- 18 -FY 2018(January 1, 2018 to
December 31, 2018)

FY 2019(January 1, 2019 to
December 31, 2019)

4,624

2,493

–

–

4,624

2,493

14,353,072

14,353,028

Nishimoto Co., Ltd. - Consolidated Financial Results for the Fiscal Year Ended December 31, 2019

(Significant subsequent events)(Business combination by acquisition)
A consolidated subsidiary of the Company, NTC Wismettac Europe B.V., acquired an additional 80% stake of common shares
in SSP Konsumgüter TRADE & CONSULT GmbH (hereafter "SSP"), an equity method affiliate, on February 1, 2020. As aresult, SSP became a consolidated subsidiary of NTC Wismettac Europe B.V.
(1)

Outline of business combination(i) Name of the acquired company and its business lines
Name of the acquired company: SSP Konsumgüter TRADE & CONSULT GmbHBusiness lines: Import and distribution business of Japanese and Asian food products and ingredients(ii) Main reasons for the business combination
One of the Company's growth strategies for the Asian Food Global Business is to "expand our business platform inregions outside of North America." Among those regions, Europe in particular is a market with great growth potential overthe medium to long term, not to mention in the near term, since the number of Japanese restaurants is growing, and in
addition, Asian foods and ingredients, mainly Japanese foods, are being used in various distribution routes there. SSP is an
import and wholesale company of Asian foods and ingredients with a focus on Japanese food. It has a long history ofbusiness activities in Europe, mainly in Germany, for about 30 years since its establishment in 1990, and it maintains
strong customer relationships with many local companies and restaurants.
SSP and the Company have had close business ties for many years, with the Company acquiring a 20% stake in SSP in
2017. After that, through a collaboration for sales and product supply in the area, SSP's value in our Europe Strategy wasconfirmed, and an agreement was reached with SSP's management on the acquisition. Consolidating SSP into the Groupwill also enable us to further increase our market share in Germany, and we expect SSP's collaboration with our sites in
Europe and our business development into Eastern Europe and Russia.
In light of these factors, we have determined that the acquisition of additional shares of SSP will greatly contribute toincreasing the Company Group's corporate value.
(iii) Date of business combination
February 1, 2020(iv) Legal form of the business combination
Through acquisition of shares for cash consideration(v) Name of the controlling entity after the business combination
The name remains unchanged(vi) Percentage share of voting rights acquired
Percentage share of voting rights owned before the business combination: 20%
Percentage share of voting rights additionally acquired at the date of business combination: 80%
Percentage share of voting rights after the acquisition: 100%(vii) Main reason for deciding to acquire the company
As the Company acquired shares of SSP for cash.
(2)

Acquisition cost of the acquired company and breakdown

The details have not been finalized at this time, but they are scheduled to be finalized by the end of March 2020.
(3)

Goodwill, reason for recognizing goodwill, amortization method and amortization period

They have not been finalized at this time.
(4)

Amounts of assets and liabilities acquired on the day of the business combination and breakdown

They have not been finalized at this time.

- 19 -