Financial Results for Third Quarter of Fiscal Year Ending March 31, 2023
[Japanese GAAP] (Consolidated Data)
February 10, 2023
Company Name: Nikko Co., Ltd.
Stock Code:6306
URL http://www.nikko-net.co.jp
Representative: Representative Director and President
Senior Managing Director/
For inquiries:
General Manager of Administrative Division
Scheduled date for filing the quarterly report: February 13, 2023
Quarterly earnings supplementary explanatory materials: Yes

Stock Exchange Listing: Tokyo Stock Exchange
Masaru Tsuji
Hiroshi Fujii

Tel: +81-78-947-3141

Scheduled date for cash dividends: –Quarterly financial results briefing session: Yes (for institutional investors, analysts, and newspaper reporters)(Amounts rounded down to the nearest million yen)
1. Consolidated Performance for Third Quarter of Fiscal Year Ending March 31, 2023 (April 1, 2022 - December 31,2022)(1) Consolidated Operating Results (cumulative)(% represents year-on-year change rate from the same period)
Quarterly net income
Net sales
Operating income
Ordinary income
attributable to ownersof parent
million yen%million yen%million yen%million yen%
Nine months ended27,129(0.1)
367 (64.2)
529 (55.7)
224 (74.6)
December 31, 2022
Nine months ended
27,165
10.3
1,027
13.5
1,194 (20.3)
883
(8.6)
December 31, 2021
Note: Comprehensive income: Nine months ended December 31, 2022

214 million yen (-76.2%)

Nine months ended December 31, 2021

899 million yen (-29.6%)

Quarterly net income
per share

Diluted net income0
per share

yen

yen

5.86

-

23.13

-

Total assets
million yen
52,62752,079Net assets
million yen
31,15032,050Nine months ended
December 31, 2022
Nine months ended
December 31, 2021
(2) Consolidated Financial Position

As of December 31, 2022
As of March 31, 2022

(Reference) Capital: As of December 31, 2022

Equity ratio

Net assets per shareyen
813.77837.22

%
59.2
61.5

31,148 million yen

As of March 31, 2022

32,003 million yen

2. Dividends
Annual dividends
End of 1Q

End of 2Q

End of 3Q

Year-end

Total

yen

yen

yen

yen

yen

Fiscal year ended March 31, 2022

-15.00-15.0030.00

Fiscal year ending March 31, 2023
Fiscal year ending March 31, 2023
(forecasts)-15.00

15.00

30.00

(Note) Revision of previously announced dividend targets during this reporting period: None

3. Consolidated Performance Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 - March 31, 2023)(% represents year-on-year change)
Net income
attributable toowners of parent
million yen% million yen% million yen% million yen%
Full year
42,0008.1
1,700 (17.2)
1,850 (18.6)
1,200 (27.2)(Note) Revision of previously announced earnings forecasts during this reporting period: NoneNet sales

Operating incomeOrdinary income

Net income
per shareyen
31.39*Notes(1) Changes in important subsidiaries during the period under review (changes in specific subsidiaries which involve
changes in the scope of consolidation): None
Newly added companies: None (Company names: -) / Excluded companies: None (Company names: -)(2) Use of special accounting methods for preparation of quarterly consolidated financial statements: None

(3) Changes in accounting policy, changes in accounting estimates, and retrospective restatements(i) Changes in accounting policy arising from revision of accounting standards, etc.: Yes(ii) Changes in accounting policy other than those noted in (i) above: None(iii) Changes in accounting estimates: None(iv) Retrospective restatements: None

(4) Shares issued (common stock)(i) Number of shares issued at end ofperiod (including treasury stock)

As of December 31,
2022

40,000,000 shares

As of March 31,2022

40,000,000 shares(ii) Number of shares held in treasury at
end of period

As of December 31,
2022

1,723,105 shares

As of March 31,
2022

1,774,135 shares(iii) Average number of shares
outstanding during the period(quarter-to-date)Nine months ended
December 31, 2022

38,255,736 shares

Nine months ended
December 31, 2021

38,211,943 shares*This report is not subject to quarterly review procedures by certified public accountants or an auditing firm.

*

Explanation of the appropriate use of earnings forecasts, and other special notes(Cautionary statement with respect to forward-looking statements)
Any forecasts and forward-looking statements given herein are based on information available as of this report’s
publication and on certain assumptions that are deemed reasonable and these forecasts are not guarantees of futureperformance.
Actual results may differ significantly from forecasts due to various factors. For the assumptions underlying theforecasts herein and other notice on the use of earnings forecasts, please refer to “1. Qualitative Information on
Quarterly Results: (3) Explanation About Forward-Looking Statements, Including Forecast of Consolidated FinancialResults” on page 2 in the accompanying materials.
(How to obtain quarterly earnings supplementary explanatory materials)
The Company is scheduled to post the quarterly earnings supplementary explanatory materials on its website onFriday, February 10, 2023.
The Company has scheduled a financial results briefing session (live streaming) for securities analysts on Friday,March 3, 2023.

Accompanying Material – Table of Contents

Qualitative Information on Quarterly Results ............................................................................................................................. 2

1.
(1)
(2)

Explanation About Operating Results ..................................................................................................................... 2
Explanation About Financial Position ...................................................................................................................... 2(3)

Explanation About Forward-Looking Statements, Including Forecast of Consolidated Financial Results ............... 2
Quarterly Consolidated Financial Statements and Notes ........................................................................................................ 3

(1)
(2)

Quarterly Consolidated Balance Sheet ................................................................................................................... 3
Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of2.

Comprehensive Income .......................................................................................................................................... 5(Quarterly Consolidated Statement of Income)(Nine Months Ended December 31, 2022) ........................................................................................................ 5(Quarterly Consolidated Statements of Comprehensive Income)(3)(Nine Months Ended December 31, 2022) ........................................................................................................ 6
Notes to Quarterly Consolidated Financial Statements........................................................................................... 7(Going Concern Assumption) .................................................................................................................................. 7(Notes on significant changes in the amount of shareholders’ equity) .................................................................... 7(Use of special accounting methods for preparation of quarterly consolidated financial statements) ..................... 7(Changes in Accounting Policy) .............................................................................................................................. 7(Additional Information) ........................................................................................................................................... 7-1-1. Qualitative Information on Quarterly Results(1) Explanation About Operating Results
During the nine months ended December 31, 2022, a strong sense of uncertainty swept over the global economy
as inflation fears intersected sharply with concerns over recession due to the continued record price increases andas financial authorities in the U.S. and Europe took the stance of active financial tightening and implementedinterest rate hikes. Further, the yen depreciated rapidly from 115 yen to the dollar at the beginning of the year to150-yen levels in October due to differences in the financial policies, with the rate recovering to 130 yen to thedollar following a policy correction by the Bank of Japan in December.
Under such circumstances, Nikko Group has been affected by the rising prices of raw materials and supplies aswell as prolonged delivery times. At the same time, road pavement companies, who are the main users of asphalt
plants, continue to take a wait-and-see attitude towards capital investment due to uncertainties over economictrends and the impact of rising crude oil prices. As a result, consolidated net sales of the Group in the period underreview came to 27,129 million yen (down 0.1% from the same period a year earlier).
In terms of profits, consolidated operating income totaled 367 million yen (down 64.2% from the same period ayear earlier) due to rising raw material prices and the impact of increases in expenses for research anddevelopment towards decarbonization and development of global products as well as an increase in personnel
costs. Consolidated ordinary income came to 529 million yen (down 55.7% from the same period a year earlier),while quarterly net income attributable to owners of parent totaled 224 million yen (down 74.6% from the same
period a year earlier).
Operating results by segment are as follows.
(i) Asphalt Plant-Related BusinessNet sales of both products and the maintenance business in Japan decreased compared with the same period ayear earlier. Overseas net sales increased compared with the same period a year earlier. As a result, net sales ofthe business declined 2.1% to 13,085 million yen from the same period a year earlier. New orders received andorder backlog in the period under review declined compared with a year earlier.
(ii) Concrete Plant-Related BusinessNet sales of products in Japan and abroad declined compared with the same period a year earlier. Net sales of themaintenance business in Japan increased compared with the same period a year earlier. As a result, net sales ofthe business declined 8.7% to 6,644 million yen from the same period a year earlier. New orders received in theperiod under review declined compared with a year earlier, while order backlog increased year on year.
(iii) Environment- and Conveyor-Related BusinessNet sales of both environmental products and conveyer products declined compared with the same period a yearearlier. As a result, net sales of the business declined 2.6% to 2,138 million yen from the same period a year earlier.
New orders received and order backlog in the period under review declined compared with a year earlier.
(iv) Other BusinessNet sales of hand tools and crushers increased from the same period a year earlier. Net sales of temporary
construction materials declined compared with the same period a year earlier. As a result, net sales of the businessincreased 21.6% to 5,259 million yen from the same period a year earlier. New orders received and order backlog
in the period under review increased compared with a year earlier.
(2) Explanation About Financial Position
Total assets at the end of the reporting period were 52,627 million yen, increasing 547 million yen from the end of
the previous fiscal year.
Current assets were 33,927 million yen, declining 200 million yen from the end of the previous fiscal year. Main
factors contributing to the change are increases of 1,806 million yen in work in process and 1,339 million yen inmerchandise and finished goods as well as decreases of 2,459 million yen in accounts receivable-trade and 1,518
million yen in cash and cash equivalents. Noncurrent assets came to 18,699 million yen, up 748 million yen fromthe end of the previous consolidated fiscal year. Factors contributing to the change include increases of 362 millionyen in construction in progress, 259 million yen in land, and 136 million yen in buildings and structures as well as
declines of 139 million yen in deferred tax assets and 56 million yen in software in progress.
Liabilities totaled 21,476 million yen, up 1,447 million yen from the end of the previous fiscal year. Main factors
contributing to the change are increases of 896 million yen in long-term loans, 751 million yen in short-term loans,and 745 million yen in contract liabilities as well as decreases of 327 million yen in income taxes payable, 309
million yen in provision for bonuses, and 305 million yen in notes and accounts payable-trade.
Net assets came to 31,150 million yen, decreasing 899 million yen from the end of the previous fiscal year. Main
factors contributing to the change are an increase of 44 million yen in valuation difference on available-for-salesecurities and a decline of 923 million yen in retained earnings.
As a result, equity ratio dropped to 59.2% from 61.5% as of the end of the previous fiscal year.

(3) Explanation About Forward-Looking Statements, Including Forecast of Consolidated Financial Results
There is no change in the performance forecast for the year ending March 31, 2023 that was disclosed on
September 29, 2022.

-2-2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(million yen)
As of March 31, 2022
AssetsCurrent assets
Cash and cash equivalents
Notes receivable-trade
Accounts receivable-trade
Electronically recorded monetary claims
Merchandise and finished goods
Work in process
Raw materials and supplies
Other business
Allowance for doubtful accounts
Total current assets
Non-current assets
Property and equipment
Intangible assets
Investments and other assets
Investment securities
Investments in capital
Long-term loans receivable
Deferred tax assets
Other business
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets-3-

As of December 31, 2022

12,436
2,163
7,275
1,594
990
6,970
1,695
1,002
(0)
34,127

10,917
2,163
4,815
1,746
2,330
8,776
1,511
1,665
(0)
33,927

10,6691,036

11,419
1,088

4,336
15
8864
1,152(131)6,246
17,951
52,0794,383
159725
1,188(131)6,192
18,69952,627(million yen)
As of March 31, 2022
Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations
Accounts payable-factoring
Short-term loans payable
Income taxes payable
Accounts payable-other
Advances received
Contract liabilities
Provision for bonuses
Provision for directors' bonuses
Provision for loss on order received
Other businessTotal current liabilities
Long-term liabilities
Long-term loans payable
Deferred tax liabilities
Provision for directors' retirement benefits
Retirement benefit-related liabilities
Other businessTotal noncurrent liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Accumulated retirement benefit-related adjustment
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-4-

As of December 31, 2022

3,132
868
2,783
2,229
518
664
17
4,405
483
76
35
559
15,774

2,827
1,164
2,732
2,980
191
385
17
5,150
174
39
54
573
16,291

1,583
7
182
2,126
354
4,254
20,029

2,480
0
219
2,146
339
5,185
21,476

9,197
7,925
13,755(784)
30,093

9,197
7,934
12,832(760)
29,203

1,453
560
(104)
1,910
46
32,05052,079

1,498
541
(94)
1,944
1
31,15052,627

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income(Quarterly Consolidated Statement of Income)(Nine Months Ended December 31, 2022)(million yen)
Nine month ended
Nine month ended
December 31, 2021
December 31, 2022
(from April 1, 2021 to(from April 1, 2022 toDecember 31, 2021)
December 31, 2022)
Net sales
27,16527,129
Cost of sales
19,89419,924Gross profit
7,271
7,204
Selling, general and administrative expenses
6,244
6,837
Operating income
1,027
367
Non-operating income
Interest income
12
Dividends income
120
100
Foreign exchange gains
1386
Other business
115
43
Total non-operating income
250232
Non-operating expenses
Interest expenses
3555
Compensation for damage
74Expenses for dismantling and removal
24
Other business
1510
Total non-operating expenses
83
70
Ordinary income
1,194
529
Extraordinary income
Gain on sales of investment securities
255
0
Total extraordinary income
255
0Extraordinary loss
Loss due to the spread of COVID-19
23
Loss on valuation of investment securities
22
Loss on sales of investment securities
0
Total extraordinary loss
2323
Quarterly income before income taxes
1,425
506
Income taxes-current
437
209
Income taxes-deferred
112
113
Total income taxes
550
322
Quarterly net income875
183
Quarterly loss attributable to non-controlling interests(8)(41)
Quarterly net income attributable to owners of parent
883
224-5-

(Quarterly Consolidated Statements of Comprehensive Income)(Nine Months Ended December 31, 2022)

Quarterly net income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Retirement benefit-related adjustment
Total other comprehensive income
Quarterly comprehensive income(Breakdown)
Quarterly comprehensive income attributable toowners of parent
Quarterly comprehensive income attributable tonon-controlling interests-6-

Nine month ended
December 31, 2021
(from April 1, 2021 to
December 31, 2021)
875(million yen)
Nine month ended
December 31, 2022
(from April 1, 2022 toDecember 31, 2022)
183

(100)
118
5
23
899

44(23)
930
214

905

259(5)(44)

(3) Notes to Quarterly Consolidated Financial Statements(Going Concern Assumption)
Not applicable(Notes on significant changes in the amount of shareholders’ equity)
Not applicable(Use of special accounting methods for preparation of quarterly consolidated financial statements)
Not applicable(Changes in Accounting Policy)(Application of Implementation Guidance on Accounting Standard for Fair Value Measurement)
The Company has applied the “Implementation Guidance on Accounting Standard for Fair Value Measurement”(ASBJ Guidance No. 31, June 17, 2021; hereinafter “Fair Value Measurement Guidance”) from the beginning of
the first quarter under review. In accordance with the transitional treatments prescribed in Article 27-2 of theFair Value Measurement Guidance, the Company plans to apply the new accounting policies prescribed in theFair Value Measurement through the future. The application of the said accounting standard does not affect thequarterly consolidated financial statement.
(Additional Information)(Application of Practical Solution on the Accounting Methods and Disclosure Under the Group Tax SharingSystem)
The Company and its domestic consolidated subsidiaries have transitioned from the consolidated taxation
system to the group tax sharing system from the first quarter ended June 30, 2022. Accordingly, corporate andlocal corporate income taxes, and tax-effect accounting are accounted for and disclosed in accordance with
“Practical Solution on the Accounting Methods and Disclosure Under the Group Tax Sharing System” (PITF No.
42, August 12, 2021; hereinafter referred to as “PITF 42”). In addition, based on Article 32 (1) of PITF 42, theeffects of the change in accounting policies due to the adoption of PITF 42 are deemed negligible.

-7-