Nihon Tokushu Toryo : Consolidated Financial Results for the Fiscal Year Ended March 31,2022

Disclaimer: This document is an English translation of the original document in Japanese and has been prepared solely for reference purposes. In the event of any discrepancy between this English translation and the original in Japanese, the original shall prevail in all respects.

Consolidated Financial Results

for the Fiscal Year Ended March 31, 2022

[Japanese GAAP]

May 11, 2022

Company name: NIHON TOKUSHU TORYO CO., LTD.

Stock exchange listing: Tokyo Stock Exchange

Code number: 4619

URL: https://www.nttoryo.co.jp

Representative: Hiroshi Onda, President, COO

Contact: Yosuke Rikitake, Corporate Officer, General Manager of Financial & Accounting Division and General Manager of General Administration Division, Operation Planning & Coordination Group

Phone: [phone]

Scheduled date of ordinary general shareholders meeting: June 22, 2022

Scheduled date of commencing dividend payments:	June 23, 2022
Scheduled date of filing annual securities report:	June 22, 2022

Availability of supplementary explanatory materials on annual financial results: No

Schedule of annual financial results briefing session: Yes (for analysts and institutional investors)

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 - March 31, 2022)

(1) Consolidated Operating Results		(% indicates changes from the previous corresponding period.)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
Fiscal year ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
March 31, 2022	54,779	14.1	1,482	72.6	2,625	9.2	1,300	(0.1)
March 31, 2021	48,004	(16.1)	858	(69.6)	2,403	(44.1)	1,301	(43.9)

Note: Comprehensive income	Fiscal year ended March 31, 2022: ¥3,614 million [6.4%]
		Fiscal year ended March 31, 2021: ¥3,396 million [49.7%]
	Basic earnings	Diluted		Return on		Ratio of		Ratio of
	earnings per		ordinary profit	operating profit
	per share	equity
	share			to total assets	to net sales
Fiscal year ended		Yen		Yen		%		%	%
March 31, 2022		59.90		-		3.0		3.4	2.7
March 31, 2021		59.27		-		3.1		3.3	1.8
Reference: Share of	profit (loss) of entities accounted for using equity method
		Fiscal year ended March 31, 2022: ¥369 million
		Fiscal year ended March 31, 2021: ¥923 million
(2) Consolidated Financial Position
		Total assets	Net assets	Equity ratio	Net assets per share
		Million yen		Million yen	%		Yen
As of March 31, 2022		79,792		49,725	55.5		2,038.07
As of March 31, 2021		75,502		47,154	56.4		1,961.12

Reference: Equity As of March 31, 2022: ¥44,266 million

As of March 31, 2021: ¥42,566 million

(3) Consolidated Cash Flows

Cash flows from

Cash flows from

Cash flows from

Cash and cash

equivalents

operating activities

investing activities

financing activities

at end of period

Fiscal year ended

Million yen

Million yen

Million yen

Million yen

March 31, 2022

5,019

(1,266)

(1,699)

8,931

March 31, 2021

3,085

(5,636)

1,059

6,518

2. Dividends

Annual dividends per share

Total

Ratio of

Payout ratio

dividends to

1st

2nd

3rd

Year-

dividends

Total

(consolidated)

net assets

quarter-

quarter-

quarter-

end

(annual)

end

end

end

(consolidated)

Fiscal year ended

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

-

17.00

-

21.00

38.00

833

64.1

2.0

March 31, 2021

Fiscal year ended

-

18.00

-

22.00

40.00

872

66.8

2.0

March 31, 2022

Fiscal year ending

March 31, 2023

-

20.00

-

22.00

42.00

28.5

(forecast)

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 - March 31, 2023)

(% indicates changes from the previous corresponding period.)

							Profit attributable to	Basic
	Net sales	Operating profit	Ordinary profit	earnings
	owners of parent
							per share
First half	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
28,600	14.0	850	499.3	1,800	131.1	1,000	746.8	46.05
Full year	61,000	11.4	3,000	102.4	4,800	82.8	3,200	146.0	147.36

* Notes:

1. Changes in significant subsidiaries during the period under review: No (Changes in specified subsidiaries resulting in changes in scope of consolidation)

Newly included: -	(Company name: - )
Excluded: -	(Company name: - )

1. Changes in accounting policies, changes in accounting estimates and retrospective restatement
2. 1. Changes in accounting policies due to the revision of accounting standards: Yes
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No

1. Total number of issued and outstanding shares (common shares)
   1) Total number of issued and outstanding shares at the end of the period (including treasury shares):

March 31, 2022:	23,611,200 shares
March 31, 2021:	23,611,200 shares
2) Total number of treasury shares at the end of the period:
March 31, 2022:	1,891,100 shares
March 31, 2021:	1,905,857 shares
3) Average number of shares during the period:
Year ended March 31, 2022:	21,714,840 shares
Year ended March 31, 2021:	21,960,512 shares

(Reference) Summary of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 - March 31, 2022)

(1) Non-consolidated Operating Results		(% indicates changes from the previous corresponding period.)
	Net sales	Operating profit	Ordinary profit	Profit
Fiscal year ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
March 31, 2022	38,217	3.8	(481)	-	1,759	32.4	1,720	25.6
March 31, 2021	36,832	(17.0)	(614)	-	1,329	(37.1)	1,369	(16.3)

	Basic earnings	Diluted earnings
	per share	per share
Fiscal year ended	Yen	Yen
March 31, 2022	78.89	-
March 31, 2021	62.10	-
(2) Non-consolidated Financial Position
	Total assets	Net assets	Equity ratio	Net assets per share
	Million yen	Million yen	%	Yen
As of March 31, 2022	55,642	32,373	58.2	1,484.15
As of March 31, 2021	54,345	31,674	58.3	1,453.25

(Reference) Equity: As of March 31, 2022: ¥32,373 million As of March 31, 2021: ¥31,674 million

• These consolidated financial results are outside the scope of audit by certified public accountants or an audit firm.
• Explanation of the proper use of financial results forecast and other notes

(Cautionary statement regarding forward-looking statements, etc.)

The forward-looking statements in this document, including the financial results forecast, are based on information currently available to the Company and certain assumptions that the Company considers reasonable, and the Company does not promise that it will achieve such results. Actual results may differ significantly due to various factors. Please refer to "1. Overview of Operating Results, etc. (4) Future Outlook" on page 3 of the attached materials for the assumptions used in forecasting financial results and precautionary statements regarding the use of financial results forecasts.

Table of Contents of the Attachments
1. Overview of Operating Results, etc. ............................................................................................................. 2
(1)	Overview of Operating Results for the Fiscal Year under Review ..........................................................	2
(2)	Overview of Financial Position for the Fiscal Year under Review ..........................................................	3
(3)	Overview of Cash Flows for the Fiscal Year under Review ....................................................................	3
(4)	Future Outlook .........................................................................................................................................	3
(5)	Basic Policy on Profit Allocation and Dividends for the Current and Following Fiscal Years ................	4
2. Basic Policy on Selection of Accounting Standards .....................................................................................	4
3. Consolidated Financial Statements and Principal Notes ...............................................................................	5
(1)	Consolidated Balance Sheet .....................................................................................................................	5
(2)	Consolidated Statements of Income and Comprehensive Income ...........................................................	7
(3)	Consolidated Statement of Changes in Net Assets ....................................................................................	9
(4)	Consolidated Statement of Cash Flows .................................................................................................	11
(5)	Notes to Consolidated Financial Statements ..........................................................................................	12
	(Notes on going concern assumption) ....................................................................................................	12
	(Changes in accounting policies) ............................................................................................................	12
	(Segment information) ............................................................................................................................	13
	(Per share information) ...........................................................................................................................	16
	(Significant subsequent events) ..............................................................................................................	16

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1. Overview of Operating Results, etc.

(1) Overview of Operating Results for the Fiscal Year under Review

In the fiscal year ended March 31, 2022 (the "fiscal year under review"), the Japanese economy showed signs of a gradual recovery as the normalization of economic activities gradually developed due to progress in vaccination against COVID-19. However, there are strong concerns about the re-spread of infectious diseases caused by new variants of COVID-19, and the outlook for the economy remained even more uncertain due to soaring raw material prices, global semiconductor shortages, and supply chain stagnation, in addition to the impact of the situation in Ukraine on the economy.

Under these circumstances, NIHON TOKUSHU TORYO CO., LTD. (the "Company") and its subsidiaries (collectively, the "Group") have been striving to enhance its corporate value by focusing on strengthening its revenue base, developing new technologies and products, and promoting sustainability management, as set forth in the basic strategies of the new medium-term management plan, while taking thorough measures to prevent the spread of COVID-19.

As a result, in the fiscal year under review, net sales totaled 54,779 million yen (up 14.1% year on year), a significant recovery from the previous year.

On the profit front, operating profit was 1,482 million yen (up 72.6% year on year) due to the recovery in net sales and the promotion of cost reduction activities and expense reduction measures, despite the impact of soaring raw material prices and other factors. Ordinary profit totaled 2,625 million yen (up 9.2% year on year) due to the impact of share of profit of entities accounted for using equity method and foreign exchange fluctuations, and profit attributable to owners of the parent totaled 1,300 million yen (down 0.1% year on year).

Performance by reportable segment is as follows (sales for each segment exclude inter-segment net sales).

Paints & coatings-related business

With domestic demand on the road to recovery, sales of paints for buildings and structures, especially waterproofing materials, our main product line, remained steady. In particular, construction-related sales, such as large-scale renovation work for condominiums, increased by 81.5% year on year, contributing significantly to the increase in both sales and profit. In addition, amid the impact of soaring raw material prices, the Company thoroughly implemented cost reduction activities and cost-cutting measures, and reviewed the selling prices of some products.

As a result, net sales for the paints & coatings-related segment totaled 19,351 million yen (up 30.3% year on year), while segment profit totaled 373 million yen (up 87.0% year on year).

Automotive products-related business

Although the outlook remained uncertain due to the global shortage of semiconductors and supply chain disruptions, including the impact of COVID-19, among automobile manufacturers, which are the Company's major customers, sales increased mainly in sound-absorbing,sound-insulation materials due to a certain level of demand recovery. In this segment, the Company has also promoted multifaceted cost reduction activities and expense reduction measures in order to build an efficient production system amid the impact of soaring raw material prices.

As a result, net sales for the automotive products-related segment totaled 35,412 million yen (up 6.8% year on year), while segment profit totaled 1,100 million yen (up 69.2% year on year).

Other business

Net sales of the insurance agency business totaled 15 million yen (down 0.3% year on year).

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