MATSUDA SANGYO : 1-2Q Annual Financial Statements Briefing (Script)

Matsuda Sangyo Co., Ltd.

Q2 Financial Results Briefing for the Fiscal Year Ending March 2022

November 25, 2021

Event Summary

[Company Name]	Matsudo Sangyo Co., Ltd.
[Company ID]	7456-QCODE
[Event Language]	JPN
[Event Type]	Earnings Announcement
[Event Name]	Q2 Financial Results Briefing for the Fiscal Year Ending March 2022
[Fiscal Period]	FY2021 Q2
[Date]	November 25, 2021
[Number of Pages]	15
[Time]	13:30 - 14:00
	(Total: 30 minutes, Presentation: 27 minutes, Q&A: 3 minutes)
[Venue]	1st Seminar Room, Nikkei Kayabacho Bekkan B1F, 2-6-1 Kayabacho
	Nihonbashi, Chuo-ku, Tokyo 103-0025
[Venue Size]	238 m2
[Participants]	50
[Number of Speakers]	3
	Yoshiaki Matsuda	President
	Koji Tsushima	Executive Vice President
	Yoshinori Tanaka	Executive Officer, General Manager of IR
		Department

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Japan	03.4405.3160	North America	1.800.674.8375
Tollfree	0120.966.744	Email Support	[e-mail]

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Presentation

Moderator: Now that the time has come, we will begin Matsuda Sangyo Co., Ltd.'s financial statements briefing for Q2 of the 73rd fiscal year ending March 2022.

First of all, I would like to introduce 3 people from the Company. Mr. Yoshiaki Matsuda, President; Mr. Koji Tsushima, Executive Vice President; and Mr. Yoshinori Tanaka, Executive Officer and General Manager of IR Department. Mr. Matsuda, President, and Mr. Tanaka, Executive Officer, will give a presentation today. After the presentation, we will take time for a question-and-answer session.

You will find a questionnaire in your handouts. Please fill in this form when you have time. Now, let us begin.

Matsuda: I am Matsuda, President of Matsuda Sangyo. I would like to explain the financial results for Q2 of the 73rd fiscal year ending March 2022.

Thank you very much for taking time out of your busy schedules to attend our financial statements briefing today. In response to the coronavirus, the Group will continue its business activities while placing the highest priority on the safety of its employees and all other related parties and working to prevent infection.

I will now provide an overview of the financial results for Q2 of the fiscal year ending March 2022.

This is a summary of the consolidated financial figures for Q2 of the fiscal year ending March 2022.

Consolidated net sales for H1 of the current fiscal year rose 21.8% YoY, to JPY136 billion, as transaction volumes in both the precious metals and food businesses exceeded expectations. Operating profit increased by 98.1% to JPY7.2 billion, and ordinary profit increased by 112.7% to JPY7.8 billion, including subsidy income and equity in earnings of affiliates of Nippon Micrometal, in which we hold a 30% stake.

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As a result, profit attributable to owners of parent increased by 99.9% YoY to JPY5.4 billion, and both net sales and each profit for H1 of the fiscal year were the highest ever recorded. The following is a summary of the consolidated financial results for H1 of the fiscal year ending March 2022.

At this point, I would like to reiterate the earnings forecast that we announced on November 5. For the fiscal year ending March 2022, we are forecasting net sales of JPY260 billion, operating profit of JPY12.2 billion, ordinary profit of JPY13 billion, and profit of JPY9.1 billion, aiming for record highs in both net sales and each profit for the full year.

Next, I will explain the business results by segment. The first is the precious metals business.

Sales in this segment increased by 32.4% YoY to JPY96.7 billion, and operating profit increased by 80.7% YoY to JPY5.9 billion.

In the electronics industry, which is the main customer base for this business, although there are concerns about a decline in production in the automobile market and other sectors due to a shortage of semiconductors, production activities in the electronic components and devices field are on a recovery trend against the backdrop of a recovery in the smartphone market and the expansion of telecommunications infrastructure in line with the progress of 5G.

Therefore, in addition to an increase in the volume of precious metal recycling handled by the Group and the sales volume of gold and silver products, there was also an overall rise in the market price of precious metals, resulting in a significant increase in both sales and profits YoY.

In the environmental business, the volume of industrial waste treated by the Company increased.

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Next is the food business.

Net sales in this segment increased by 1.7% YoY to JPY39.3 billion, and operating profit increased by 239.7% YoY to JPY1.3 billion.

The food manufacturing industry, which is the main customer base for this business, continued to face difficult conditions due to the decline in demand for professional use caused by the effects of the coronavirus and rising resource prices. In this environment, the Group saw an increase in the sales volume of seafood, livestock, and agricultural products, thanks to the development of products that meet diversifying customer needs and the stable supply of safe and secure products.

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Japan	03.4405.3160	North America	1.800.674.8375
Tollfree	0120.966.744	Email Support	[e-mail]

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