Supplementary Material to Financial Results
First Quarter of the Fiscal Year Ending
December 2019

Nishimoto Co., Ltd.
May 14, 20192019 Nishimoto Wismettac Group All rights reserved.

Contents• Corporate Profile

P. 2• Summary of Financial Results
for the First Quarter of the Fiscal Year Ending
December 2019P. 9
• Forecast of Operating Results
for the Fiscal Year Ending December 2019

P. 13

• Policy of Returning Profits to Shareholders

P. 18

2019 Nishimoto Wismettac Group All rights reserved.

1

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 name2019 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 is a …

A solution company that resolves various foodissues to create and provide new value
Nishimoto Wismettac imports and sells foods composed mainly of fruits and vegetables fromall regions of the world. When Asian foods developed into widespread global foods, ourcompany catered to customer demand for them along with meeting the various needs andrequirements of customers in countries throughout the world. We evolved from a food trading
company into an enterprise also equipped with functions including growing fruits andvegetables along with planning, development, logistics, sales and risk management of foods.
Currently, we are in the process of building an internal framework that can flexibly apply
external solutions including the newest technologies in a variety of domains.

Nishimoto Wismettac will resolve customer’s needs and issues by using its own and its
partners’ broad-based solutions. We will continue to evolve and grow as an eco-platform
company that creates and provides these types of new value.
2019 Nishimoto Wismettac Group All rights reserved.

3

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

Head Office

Onward Park Building, 3-10-5 Nihonbashi, Chuo-ku, Tokyo

EstablishedMay 1912

Representative directors

Yoshiro Susaki, Chairman & CEO, Takayuki Kanai, President & COO

Number of Employees

1,676(including 1,404 in the Asian Food Global Business) [As of December 31st, 2018.]
 Development and sale of Asian food worldwide

Business

Subsidiaries and Affiliates

Business Sites

 Importation and sale of fruit, vegetables and related processed products, and supply offood ingredients to food manufacturers and the restaurant sector
10 subsidiaries, 5 affiliates
47 worldwide (including 23 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

182.2 billion yen (FY ended December 2018)

Ordinary income

6.5 billion yen (FY ended December 2018)

Shareholders’ equity ratio

2019 Nishimoto Wismettac Group All rights reserved.

* Overseas sales ratio 67.3%

61.5% (FY ended December 2018)4

Nishimoto Wismettac: Domestic and Overseas Business Sites
 Developing businesses worldwide with 47 global locations
 23 locations in the North American region (the U.S. and Canada)

13 COMPTOIRS DES 3 CAPS SARL・COMPTOIRS OCEANIQUES| ・CAP CAVALLY
16 ・TROPIC FISH
12 SSP Konsumgüter TRADE & CONSULT GmbH

Calgary Office

10 Harro Foods Limited

Denver Office
Wismettac Asian Foods,

4 Inc. (Canada)
1 Nishimoto Co., Ltd.
WF Seoul Representative Office

2 Wismettac Foods, Inc.

7 NTC Wismettac Europe B.V.
WF Paris Representative Office

San Francisco Office

9 Shanghai IPM Co., Ltd.

Wismettac Asian Foods,

3 Inc.

11 Nippon Foods Co., Ltd.

WF Bangkok Representative Office

Seattle Office
Sacramento Office

Wismettac Foods
8 Shanghai Co., Ltd.

WF Ho Chi Minh Representative Office

Las Vegas Office

Chicago Office

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

Hawaii OfficeMiami Office

WF Kobe Office
San Diego Office

WF Kobe Branch
WF Naha Representative 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”

2019 Nishimoto Wismettac Group All rights reserved.

5

Major Business Segment: Asian Food Global Business Distribution of Asian food ingredients and food products with a focus on Japanese food around the world
centering on North America. Successful implementation of its own integrated operations from productdevelopment and planning to sales and distribution.
←Compliance with related laws and regulations→
Product development
and planning

Developing new
private brandproducts
and expanding
the private brandrange“Shirakiku”
accounts forabout 40%in terms of sales(North Americanbusiness
performance, 2018)

Purchasing andProcurement

Wide rangeof sourced
products anddiversesupplier base(about 8,000 items)

Customs
Clearance

Storage

Sales

Sortingand delivery

Logistics capabilities and systems

 Select the best producing region throughout the world Working with producers to develop products tailored tocustomer needs
 Implementing production and quality control systems
that comply with local regulations

Marketing network
and North
Americanbusiness locations(23 locationsin North America)(37 locations
globally)

Developing products in line with customer needs

2019 Nishimoto Wismettac Group All rights reserved.

6

(Reference) Product Portfolio of the Asian Food Global Business
We import and procure Asian food products and ingredients, with a focus on Japanese food, including fromthe U.S., Japan, China and South East Asia, and distribute approximately 8,000 items on a global basis,principally in North America.

Main Products

Chopsticks,
containers, etc.

Alcohol

Rice

Confectionery
Agricultural
products

Seafood products

Sauces andseasoning

Processed
food products

2019 Nishimoto Wismettac Group All rights reserved.

7

Major business segment: Agricultural & Seafood Products Trading Business Import and sale with a focus on fresh fruits and vegetables in the Japanese market.
 As a sole import agent of Sunkist Growers Inc. in Japan, maintain high market share of imported citrus.
In particular, the market share* of lemon is about 50% and orange is about 30%.

Main Products
Seafood
Domestic
market share:roughly 50%

Seafood

Frozen Fruit andVegetables,
Canned Goods etc.

Frozenstrawberries

Other

Citrus fruit

Other
Other

LemonsPineapples
BananasOrangesBananasDomestic
market share:roughly 30%

Other
Grapefruit

Asparagus
Peppers

Other

Other

Vegetables

Avocados

GrapesCherries

Tropical fruit

Kiwi
fruit

* In-house company calculation based on Ministry of Finance trade statistics
2019 Nishimoto Wismettac Group All rights reserved.

8

Summary of Financial Results
for the First Quarter of the Fiscal Year Ending
December 20192019 Nishimoto Wismettac Group All rights reserved.

Summary of Financial Results for the First Quarter of the Fiscal YearEnding December 2019
 Net sales of the Asian Food Global Business increased 4.1% year-on-year and net sales of the Agricultural &Seafood Products Trading Business decreased 2.7% year-on-year. Total net sales increased 2.2% from a year
earlier to 43.7 billion yen.
 Operating income for both the Asian Food Global Business and the Agricultural & Seafood Products Trading
Business decreased from the previous year. Total operating income decreased 13.1% year-on-year.
 The impact of exchange rates (the yen depreciated against the US dollar by 1.90 yen from the previous year)
when converting to yen for consolidation purposes was plus 0.46 billion yen in terms of net sales and plus 0.01
billion yen in terms of operating income compared to the same period of the previous year (for North America).
(Unit: billions of yen, Percentage to net sales is stated in parentheses)

FY ended December
2018First quarter results*
Net sales
Gross profit
Operating Operating income
results

Ordinary income
Net income attributable to ownersof parent
Yen/Dollar exchange rate
(Average rate during the period)
Quarterly net income per share

FY ending December 2019
First quarter results

42.8

43.7

(100.0%)(100.0%)

7.7

7.9(18.1%)(18.1%)

1.6

1.4(3.8%)(3.3%)

1.5

1.4(3.6%)(3.3%)

Changes year-on-year
+2.2%
+2.2%

-13.1%
-5.2%

1.1

1.0

(2.6%)(2.3%)

108.30 yen

110.20 yen+1.90 yen

77.73 yen

70.90 yen

-8.8%

-8.8%

* Starting from the first quarter of the fiscal year ending December 2019, we changed the method for calculating the net defined benefit liability of our domestic consolidated subsidiaries fromthe simplified method from the projected benefit obligations (PBO) method, and applied the new method retroactively. Hence, the figures stated for the first quarter of the fiscal year ended
December 2018 are those after the retroactive application.

2019 Nishimoto Wismettac Group All rights reserved.

10

Operating Results by Segment for the First Quarter of the Fiscal YearEnding December 2019
Overall The Company added up costs for developing an internal organization to put in place various new solution functions (strategic expenses).

Asian Food Global Business Overall net sales increased 4.1% from a year earlier [4.1% increase from a year earlier in the North American region (2.3% on a local currency
basis). 3.8% increase year-on-year in other regions on a consolidated yen basis and 8.9% weighted-average increase in other regions on a local
currency basis].
 Operating income decreased 9.9% year-on-year. Operating income in North America declined slightly year-on-year due to persistently highpersonnel and logistics expenses and a posting of strategic expenses among other factors. Overall operating income decreases slightly year-onyear as in other regions, our U.K. subsidiary struggled (Foreign exchange fluctuations stemming from the Brexit issue caused procurement costs torise temporarily which pressured profits.).

Agricultural & Seafood Products Trading Business Net sales decreased 2.7% year-on-year. Our Chinese subsidiary was affected by sluggish sales of U.S.-made citrus fruits due to the effect from
U.S.-China trade tensions. Operating income decreased 50.8% year-on-year due mainly to lackluster markets for citrus fruits and vegetables fordomestic sales.

(Unit: billions of yen)

Sales to external customers
First Quarter of FY ended
December 2018 results
Asia Food Global Business
Agricultural & Seafood Products
Trading Business
Other business
Total

FY ended December 2019
First Quarter results

Changes year-on-year

29.86

31.07

+4.1%

11.80

11.47

-2.7%

1.14
42.81

1.18
43.74

+3.4%
+2.2%

Operating income
First Quarter of FY ended
December 2018 results*
Asia Food Global Business
Agricultural & Seafood Products
Trading Business
Other business
Total

FY ended December 2019
First Quarter results

Changes year-on-year

1.33

1.20

-9.9%

0.25

0.12

-50.8%

0.07
1.64

0.11
1.42

+47.8%-13.1%* Starting from the first quarter of the fiscal year ending December 2019, we changed the method for calculating net defined benefit liability of our domestic consolidated subsidiaries
from the simplified method from the projected benefit obligations (PBO) method, and applied the new method retroactively. Hence, the figures stated for the first quarter of the fiscal
year ended December 2018 are those after the retroactive application.

2019 Nishimoto Wismettac Group All rights reserved.

11

Operating Income for the First Quarter of the Fiscal Year Ending December 2019
(Compared to the same period in the previous year)

Compared to same
period in previous year
Existing North
America

Other than North
America

+0.09

-0.05

[Exchange rate (US$)]
1Q of FY 2018: 108.30 yen
1Q of FY 2019: 110.20 yen

Agricultural &Seafood
Products
Trading
Business

-0.13

Other

Adjustment

FX (North
America)

Strategic expenses

+0.03

-0.02

+0.01

-0.15
(Unit: billions of yen)

∙ Operating income on an existing basis with the exclusion of strategic expenses in North America
in the Asian Food Global Business was higher than a year earlier. Although logistics department
expenses such as personnel expenses remained persistently high, gross profit margin was on an
improvement trend from the previous term.

1.64∙ As for other regions in the Asian Food Global Business, the U.K. subsidiary struggled year-on-year.
Foreign exchange fluctuations stemming from the Brexit issue caused procurement costs to rise
temporarily to pressure profits.

1.42∙ Operating income in the Agricultural & Seafood Products Trading Business decreased year-onyear due to lackluster markets for citrus fruits and vegetables for domestic sales.

∙ Strategic expenses are mainly for personnel investments (recruitment of top management andsenior management professionals equipped with specialized skills in logistics, new sales channel
acquisitions, systems or product development).
(Matters for which spending for strategic expenses for business restructuring is factored into aplan)

1Q of FY ended
December 2018
results

This page shows figures from which strategic expenses were extracted for the purpose of clarifying the effect fromstrategic expenses. Hence, the combined operating income fluctuation amounts in “Existing North America” and“Other than North America” as shown in the table above do not match the segment operating income fluctuation
amount for the Asian Food Global Business as shown in the Consolidated Financial Results report.

2019 Nishimoto Wismettac Group All rights reserved.

1Q of FY ending
December 2019
results

12

Forecast of Operating Results
for the Fiscal Year Ending December 2019
Consolidated financial results forecast for the fiscal year ending December, 2019 were
unchanged from results released on February 14, 20192019 Nishimoto Wismettac Group All rights reserved.

Forecast of Financial Results for the Fiscal Year Ending December 2019
 Net sales will increase 5.9% against the previous year. Asian Food Global Business will grow by 5.9%, andAgricultural & Seafood Products Trading Business will grow by 5.6%. The outlook for continued stable growth in net
sales and gross profit remains unchanged.
 Operating profit will decline by 10.5% against the previous year. We are anticipating an increase in costs for thegroup overall from future proofing against changes in the external environment.
 We are anticipating decreases in net income attributable to parent company shareholders by 6.2%, amounting to
4.3-billion yen.
(Unit: billions of yen, Percentage to net sales is stated in parentheses)

FY ended December
2018
Full-year results*1
Net sales
Gross profit
OperatingOperating income
results
Ordinary income
Net income attributable toowners of parent
Percentage of North America(Net sales)
Group
Percentage of North America
KPI(Operating income)
ROWC *2
Yen/Dollar exchange rate
(Average rate during the period)
Net income per share

FY ending December 2019
Changes yearChanges yearFull-year forecast
on-yearon-yearFirst-half forecast

182.2

96.0

(100.0%)(100.0%)

31.8

16.4

(17.5%)(17.1%)

6.7

2.9(3.7%)(3.1%)

+6.4%
+6.9%
-3.3%

193.0
(100.0%)33.6(17.4%)

6.0(3.1%)+5.7%-10.5%

6.5

2.9(3.6%)(3.1%)

4.6

2.1(2.5%)(2.2%)

58.5%

-

-

57.9%

-0.6 pt

66.5%

-

-

76.8%

+10.3 pt

20.5%

-

-

17.4%

-3.0 pt

110.43 yen

110.00 yen+1.32 yen

110.00 yen-0.43 yen322.18 yen

148.27 yen-2.3%

302.20 yen

-6.2%

-2.8%
-2.3%

6.0

+5.9%

(3.1%)

4.3(2.2%)

-7.9%
-6.2%

*1) Starting from the first quarter of the fiscal year ending December 2019, we changed the method for calculating the net defined benefit liability of our domestic consolidated subsidiaries
from the simplified method from the projected benefit obligations (PBO) method, and applied the new method retroactively. Hence, the figures stated for the first quarter of the fiscal year
ended December 2018 are those after the retroactive application.
* 2) Operating income / ((Working capital at the end of the previous fiscal year + Working capital at the end of the current fiscal year) / 2)2019 Nishimoto Wismettac Group All rights reserved.

14

Forecast of Operating Results by Segment for the Fiscal Yearending December 2019
Asian Food Global Business The Company will maintain stable growth (acquisition of new customers and expansion of sales from existing customers) in existing markets,
centered around the North American region with a focus on Japanese food, and engage in initiatives to further expand its business base inregions outside of North America.
 In the North American region, the Company will also strive to develop new sales channels (corporate accounts, etc.) for non-Japanese foods.

Agricultural & Seafood Products Trading Business The Company will protect net income by maintaining its business in the domestic wholesale market, while aggressively engaging in initiatives toexpand sales channels to volume sales, home meal replacement and eating out, food manufacturers and overseas accounts.

Strategic Expenses associated with Group measures
 The Company anticipates an expenditure of 0.95-billion yen for costs associated with measures for the group overall.

Sales to external customers

Asia Food Global Business
Agricultural & Seafood
Products Trading Business
Other business
Total(Unit: billions of yen)

FY ended December
2018
Full-year results

First-half forecast

Changes year-on-year

Full-year forecast

Changes year-on-year

125.11

64.73

+6.9%

132.49

+5.9%

52.88

29.21

+5.0%

55.82

+5.6%

4.22
182.22

2.07
96.02+11.9%+6.4%

4.68
193.00+11.0%+5.9%

FY ending December 2019

Operating income
FY ended December
2018
Full-year results*

First-half forecast

Changes year-on-year

Full-year forecast

Changes year-on-year

5.40

2.50

-0.8%

5.61

+3.9%

1.03

0.63

+21.1%

1.07

+4.3%

0.25

0.05

+206.5%

0.25

-1.3%

-

-0.25

-

-0.95

-

6.70

2.95

-3.3%

6.00

-10.5%

Asia Food Global Business
Agricultural & Seafood
Products Trading Business
Other business
Strategic Expense forGroup Measures, etc.
Total

FY ending December 2019

* Starting from the first quarter of the fiscal year ending December 2019, we changed the method for calculating the net defined benefit liability of our domestic consolidated
subsidiaries from the simplified method from the projected benefit obligations (PBO) method, and applied the new method retroactively. Hence, the figures stated for the first quarterof the fiscal year ended December 2018 are those after the retroactive application.

2019 Nishimoto Wismettac Group All rights reserved.

15

Supplement to Forecasts of Operating Results for Fiscal YearEnding December 2019
External environment ischanging drastically

Increasing personnel and distribution costs, climate change
and the exploding population, volatile foodstuff costs, the tightening of food related
regulations, changing consumer behavior, such as online purchasing, diversification andlocalization of Japanese cuisine, logistics innovation and expanding IoT…

With these in mind, the Company will maintain growth in existing businesses during
the 2019 business year while proceeding to implement measures for the future

Major Expenditure for Future Growth
Investment in North American region (recruitment)• Experts in optimizing and strengthening distribution infrastructure, and human resources for developing newsales channels (corporate accounts, etc.) (Inclusive of funds required to develop new sales channels)
Investments outside the North American region (recruitment)• Human resources for the formation of area management organization in the European, Asian and Chinese
regions.
Investments in product content and platforms (recruitment and IT investment, etc.)• Experts in food products and foodstuffs to enhance product content, experts in food technology.
• Recruitment and investment to develop and strengthen platforms (the distribution and system infrastructure of
the entire group)
Relocation of the Tokyo office• Relocation of the Tokyo office is planned for the second-half of 2019. Consolidating the office space currently
spread out over 4 floors into a single floor should promote active communication, the integration of ourworkers, organization and products, and increasing operational efficiency.
(The current lease of the Nihonbashi office is due to expire by November 2019.)
2019 Nishimoto Wismettac Group All rights reserved.

16

Factors of Changes in Operating Income for Fiscal Year Ending
December 2019
Comparison toPrevious Period
North
America
MarginOther thanNorth America
Margin+0.31

Agricultural &Seafood
Margin

+0.23

Other
Margin(1)
Existing
Increases in
Sales &
Administration
Costs

+0.06

-0.77

+1.18

6.70

(2)
Strategic(3)
Expenses for Group Strategic
Sales &
Expenses for
Administration
Sales &
by Segment
Administration

-0.78

-0.95

↑
(ExistingExpenses)(Policy
Expenses)↓• Margin, Comparison to Previous Period: 106%• Sales & Administration Costs, Comparison to Previous
Period: 110%
(Existing Sales & Administration Cost (1) alone
accounts for only 103% comparison to previous period)(Unit: billions of yen)

Strategic Expenses
Hiring and expanding strategic talent (to set up North
American distribution infrastructure, develop new sales
channels in North America, develop area management,
reinforce content and platforms), IT investment, officerelocation, etc.

6.00

• Strategic Expenses by Segment (2): expenses included insegment income & expenditure plan
• Group Strategic Expenses (3): expenses outside segment
income & the expenditure plan

FY ended December
2018 results

FY ending December
2019 forecast* Starting from the first quarter of the fiscal year ending December 2019, we changed the method for calculating the net defined benefit liability of our domestic consolidated
subsidiaries from the simplified method from the projected benefit obligations (PBO) method, and applied the new method retroactively. Hence, the figures stated for the firstquarter of the fiscal year ended December 2018 are those after the retroactive application.

2019 Nishimoto Wismettac Group All rights reserved.

17

Policy of Returning Profits toShareholders

2019 Nishimoto Wismettac Group All rights reserved.

Policy of Returning Profits to Shareholders
Policy The Company’s basic policy for returning profits to shareholders is to continue providing stable dividends while striving tomaintain retained earnings to develop its businesses in the future and to improve its financial strength.
 The Company considers the payout ratio to be an important index and aims at maintaining a consolidated payout ratio of
about 30% every year.
 The Company schedules to make a dividend payment twice a year (interim and year-end).
 The annual dividend for the fiscal year ending December 2019 is forecast to be 95 yen (forecasts of 40 yen interim
dividend and 55 yen year-end dividend).

Dividend per share
(yen)

100

95 yen95 yen75

55

55

Year-end
dividend

Year-end
dividend40

40

Interimdividend

Interimdividend

FY ended December
2018 (Results)

FY ending December
2019 (Forecast)

50

25

Payout ratio
ofAbout 30%

02019 Nishimoto Wismettac Group All rights reserved.

19

Disclaimer
These materials are intended to provide financial information, management information, etc. of Nishimoto Co.,
Ltd. and its affiliated companies (hereinafter collectively referred to as “the Company”), but the Company
makes no representation or warranty regarding the content of these materials.
The plans, strategies, operating results forecasts, etc. of the Company in these materials may include
information on forward-looking statements, which are based on information currently available to the Company,
and include risks and uncertain elements in relation to economic trends, competition in the industry, market
demand, foreign exchange rates, taxation system, various systems, etc. Therefore, actual operating resultsthat will be published in the future may differ due to these elements, and the Company does not assume any
liability for any damage arising from the use of information in these materials. Furthermore, the Company isunder no obligation to revise and publish future forecasts in these materials based on new information or future
events.
The Company pays close attention when preparing these materials; however, if there are any errors in theinformation presented, falsification of data by a third party, or any failure arising from download of data, etc.,
the Company does not assume any liability for any damage caused by such actions for any reason
whatsoever. We appreciate your understanding regarding this matter.
The information in these materials is not intended to solicit investments. When any investment is actuallymade, please refrain from completely relying on the information in these materials to make an investment
decision, and make the decision based on your own judgment.
[Contact]
Nishimoto Co., Ltd.
Corporate Planning Dept.
TEL: 03-6870-20152019 Nishimoto Wismettac Group All rights reserved.