Ajinomoto : Financial Statements for the Interim Period Ended September 30, 2023

Ajinomoto Co., Inc.

Consolidated Results

IFRS

First Half Ended September 30, 2023

This document has been translated from the original Japanese as a guide for non-Japanese investors. It contains forward-looking statements based on a number of assumptions and judgements made by management considering information currently available. Actual financial results may differ depending on a number of factors, including changing economic conditions, legislative and regulatory developments, delay in new product launches, and pricing and product initiatives of competitors.

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SUMMARY OF FINANCIAL STATEMENTS [IFRS] (Consolidated)

First half results for the fiscal year ending March 31, 2024

Ajinomoto Co., Inc.

Stock Code:	2802
URL:	https://www.ajinomoto.co.jp/company/
Representative:	Taro Fujie
	Representative Executive Officer & President
For inquiries:	Itoomi Watanabe
	Corporate Executive & General Manager
	Global Finance Department

Scheduled date of submission of statutory quarterly financial report: Scheduled date of starting payment of dividend:

Preparation of supplementary materials: Results briefing:

November 6, 2023

Stock exchange listing:

Tokyo Stock Exchange

Telephone:[phone]

November 9, 2023

December 4, 2023

Yes

Yes (for analysts)

1. Consolidated Financial Results for First Half Ended September 30, 2023

(1) Consolidated Operating Results

						(Millions of yen)
			First half ended		First half ended
			September 30, 2023		September 30, 2022
				Change %		Change %
Sales		688,004		4.3	659,853	19.9
Business profit		76,556		3.0	74,316	7.2
Profit before income taxes		70,125		2.9	68,169	(14.5)
Profit		51,261		2.8	49,855	(13.6)
Profit attributable to owners of the parent company		46,457		(1.2)	47,025	(13.2)
Basic earnings per share (yen)		¥88.80		-	¥87.66	-
Diluted earnings per share (yen)		¥88.77		-	¥87.66	-

"Change %" indicates the percentage change compared to the same period of the previous fiscal year.

Note: Upon the adoption of IFRS, the Ajinomoto Group has introduced "business profit" as a new profit level that will better enable investors, the Board of Directors, and the Management Committee to grasp the core business results and future outlook of each business while also facilitating continual evaluation of the Group's business portfolio by the Board of Directors and the Management Committee. "Business profit" is defined as sales and share of profit of associates and joint ventures minus cost of sales, selling expenses, research and development expenses, and general and administrative expenses. Business profit does not include other operating income or other operating expenses.

(2) Consolidated Financial Position

		(Millions of yen)
	As of	As of
	September 30, 2023	March 31, 2023
Total assets	1,644,814	1,511,734
Total equity	873,158	822,968
Equity attributable to owners of the parent company	812,545	768,676
Ownership ratio attributable to owners of the parent
company (%)	49.4%	50.8%

2. Dividends

	Fiscal year ended		Fiscal year ending		Fiscal year ending
			March 31, 2024
	March 31, 2023		March 31, 2024
			(forecast)
Dividend per share
Interim (yen)	¥31.00		¥37.00
Year-end (yen)	¥37.00				¥37.00
Annual (yen)	¥68.00				¥74.00

Note: Revisions from the last forecast released: None

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3. Forecast for the Fiscal Year Ending March 31, 2024

		(Millions of yen)
	Fiscal year ending March 31, 2024
		Change %
Sales	1,465,000	7.8
Business profit	150,000	10.8
Profit attributable to owners of the parent company	100,000	6.3
Basic earnings per share (yen)	¥191.73	-

"Change %" indicates the percentage change compared to the previous fiscal year. Note: Revisions from the last forecast released: Yes

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Notes:

1. Changes in significant subsidiaries during the period (Changes in specified subsidiaries resulting in a change in consolidation scope): None
2. Changes in accounting policies and accounting estimates
3. 1. Changes in accounting policies as required by IFRS: None
   2. Other changes in accounting policies: None
   3. Changes in accounting estimates: None
4. Number of shares outstanding (ordinary shares)

					Shares
		As of September 30, 2023			As of March 31, 2023
Number of shares outstanding at end of period	521,430,854		529,798,154
(including treasury stock)
Number of shares in treasury stock at end of	1,720,133		495,714
period
		April 1, 2023 to September 30, 2023			April 1, 2022 to September 30, 2022
Average number of shares during period	523,171,392		536,438,307

Note: The number of shares in treasury stock at the end of the period includes the Company's shares held by the

director's remuneration BIP trust (As of September 30, 2023: 271,200 shares. As of March 31, 2023: 373,400 shares), which was adopted along with the introduction of stock-based remuneration of executive officers based on the Company's medium-term earnings performance for the directors and others. In addition, these Company's shares are included in the treasury stock which is deducted from the number of shares outstanding at the end of the period when calculating the average number of shares during the period.

The summary of quarterly financial statements is not subject to quarterly review by certified public accountants or an audit firm.

Appropriate use of forecasts and other notes

Disclaimer regarding forward-looking statements and other information

Forward-looking statements, such as business forecasts, included in this document are based on management's estimates, assumptions, and projections at the time of release. These statements do not promise nor represent a commitment by the Company to achieve these forecasts. Actual operating results may differ significantly due to various factors. For more information regarding earnings forecasts, see page 6, "1. Qualitative Information on the First Half Consolidated Results, (1) Overview of Operating Results."

Where to obtain supplementary materials

Supplementary materials will be posted on the Company's website on Monday, November 6, 2023.

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Table of contents
1 Qualitative Information on the First Half Consolidated Results	6
(1)	Overview of Operating Results	6
(2)	Overview of Financial Position	11
2 Condensed Consolidated Financial Statements and Notes	12
(1)	Condensed Consolidated Statements of Financial Position	12
(2)	Condensed Consolidated Statements of Income	14
	For the First Half	14
(3)	Notes to Condensed Consolidated Financial Statements	15
	Going Concern Assumption	15
	Material Accounting Policies	15
	Segment Information	16
	Significant Subsequent Events	19

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1. Qualitative Information on the First Half Consolidated Results

Upon the adoption of IFRS, the Ajinomoto Group has introduced "business profit" as a new profit level that will better enable investors, the Board of Directors, and the Management Committee to grasp the core business results and future outlook of each business while also facilitating continual evaluation of the Group's business portfolio by the Board of Directors and the Management Committee. "Business profit" is defined as sales and share of profit of associates and joint ventures minus cost of sales, selling expenses, research and development expenses, and general and administrative expenses. Business profit does not include other operating income or other operating expenses.

(1) Overview of Operating Results

In the first half ended September 30, 2023, the Company's consolidated sales increased 4.3% year-on-year, or ¥28.1 billion, to ¥688.0 billion. This was due to increases in sales in the Seasonings and Foods segment and the Frozen Foods segment largely resulting from increases in unit sales prices and the effect of currency translation, despite a decrease in sales in the Healthcare and Others segment mainly owing to the impact of lower sales of Functional Materials (electronic materials and others). Business profit increased 3.0% year-on- year, or ¥2.2 billion, to ¥76.5 billion primarily due to the increases in sales in the Seasonings and Foods segment and the Frozen Foods segment, despite the impact of lower sales in the Healthcare and Others segment and other factors. Profit attributable to owners of the parent company totaled ¥46.4 billion, down 1.2% year-on-year, or ¥0.5 billion, primarily as a result of higher profit attributable to non-controlling interests recorded compared with the same period of the previous fiscal year.

Furthermore, the Company has revised the full-year consolidated performance forecast for the fiscal year ending March 31, 2024 announced on May 11, 2023 in light of recent trends in business performance and other factors.

As a result of reviewing the impact of foreign exchange fluctuations, the state of the economy, and other factors under the current business environment, the forecast for sales is unchanged from the previous forecast, despite some per-segment adjustments. The progress rate of sales against the performance forecast is 47.0%. After review under the current business environment, based on the cost situation including foreign exchange fluctuations and raw materials costs, as well as the impacts of sales increases in the Seasonings and Foods segment and the Frozen Foods segment, and of the sales decline in the Healthcare and Others segment, the forecast for business profit is unchanged from the previous forecast, despite some per-segment adjustments. The progress rate of business profit against the performance forecast is 51.0%. The forecast for profit attributable to owners of the parent company has been revised upward by ¥5.0 billion from the previous forecast to ¥100.0 billion, mainly reflecting the impact from the transfer of former factory land in consolidated subsidiary Ajinomoto (Malaysia) Berhad. The progress rate of quarterly profit attributable to owners of the parent company against the revised forecast is 46.5%. The forecast is based on an exchange rate of ¥143 to US$1 (for the second half, a rate of ¥145 to US$1).

Please also refer to Notice of Revision to Full-Year Consolidated Performance Forecast for the Fiscal Year Ending March 31, 2024 released today (November 6, 2023) for more details about the revision of the consolidated earnings forecast.

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Overview by segment

Sales and business profit by segment are summarized below.

Versus previous year results						(Billions of yen)
		Sales			Business profit
	FY2023	YoY change	% change	FY2023		YoY change	% change
	H1	H1
Seasonings and	404.7	31.9	8.6 %	57.1	13.1	29.8 %
Foods
Frozen Foods	136.5	7.9	6.2 %	6.6	6.1		-
Healthcare and	139.5	(12.1)	(0.8)%	10.9	(17.9)	(62.0)%
Others
Other	7.2	0.3	5.7 %	1.7	0.8	92.2 %
Total	688.0	28.1	4.3 %	76.5	2.2	3.0 %
Versus the forecast						(Billions of yen)
		Sales			Business profit
	FY2023	Forecast for	YTD	FY2023		Forecast for	YTD
	H1	the year	progress	H1		the year	progress
Seasonings and	404.7	852.8	47.5%	57.1	105.7	54.0%
Foods
Frozen Foods	136.5	291.4	46.8%	6.6	10.0	66.5%
Healthcare and	139.5	302.2	46.2%	10.9	35.0	31.3%
Others
Other	7.2	18.5	39.1%	1.7	(0.8)	-
Total	688.0	1,465.0	47.0%	76.5	150.0	51.0%

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1) Seasonings and Foods

In the Seasonings and Foods segment, sales increased 8.6% year-on-year, or ¥31.9 billion, to ¥404.7 billion, mainly because of increases in unit sales prices and the effect of currency translation. Segment business profit increased 29.8% year-on-year, or ¥13.1 billion, to ¥57.1 billion, due primarily to the effect of increased revenue.

Main factors affecting segment sales

Sauce & Seasonings: Overall increase in revenue.

Japan: Increase in revenue primarily due to increased unit sales prices.

Overseas: Increase in revenue primarily due to increased sales and the impact of currency translation.

Quick Nourishment: Overall increase in revenue.

Japan: Increase in revenue primarily due to increased unit sales prices.

Overseas: Large increase in revenue primarily due to increased unit sales prices, increased quantity of instant noodles sold, and the impact of currency translation.

Solution & Ingredients: Increase in revenue primarily due to increased sales of food service products in Japan.

Main factors affecting segment profits

Sauce & Seasonings: Overall large increase in profit. Japan: Decrease in profit primarily due to the impact of cost increases, such as for raw materials, despite increased revenue. Overseas: Large increase in profit primarily due to the impact of increased revenue.

Quick Nourishment: Overall decrease in profit.

Japan: Large decrease in profit due to the impact of cost increases, such as for raw materials, despite increased revenue.

Overseas: Increase in profit primarily due to the impact of increased revenue.

Solution & Ingredients: Overall increase in profit primarily from food service products and umami seasonings for processed food manufacturers.

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2) Frozen Foods

Frozen Foods segment sales increased 6.2% year-on-year, or ¥7.9 billion, to ¥136.5 billion, owing to the increase of unit sales prices, the effect of currency translation, and other factors. Segment business profit increased ¥6.1 billion year-on-year, to ¥6.6 billion, because of increased revenue, the effects of structural reforms, and other factors.

Main factors affecting segment profits

Overall increase in revenue.

Japan: Decrease in revenue due to a decline in sales volume, despite the effect of increased unit sales prices.

Overseas: Increase in revenue primarily due to increased unit sales prices and the impact of currency translation.

Main factors affecting segment profits

Overall large increase in profit.

Japan: Increase in profit primarily due to the impact of increased unit sales prices and improved costs despite decreased revenue. Overseas: Large increase in profit primarily due to the impact of increased revenue and structural reform.

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3) Healthcare and Others

Healthcare and Others segment sales decreased 8.0% year-on-year, or ¥12.1 billion, to ¥139.5 billion, owing to a decrease in sales of Functional Materials (electronic materials and others), and amino acids for pharmaceuticals and foods as well as other factors. Segment business profit decreased 62.0% year-on- year, or ¥17.9 billion, to ¥10.9 billion due to lower profit for both Functional Materials (electronic materials and others) and Bio-Pharma Services & Ingredients.

Main factors affecting segment sales

Bio-Pharma Services & Ingredients: Overall decrease in revenue due to decreased sales of amino acids for pharmaceuticals and foods.

Functional Materials (electronic materials and others): Large decrease in revenue primarily due to decreased sales of electronic materials.

Others: Overall decrease in revenue.

Main factors affecting segment profits

Bio-Pharma Services & Ingredients: Large decrease in profit for both amino acids for pharmaceuticals and foods and bio-pharmaservices (CDMO services).

Functional Materials (electronic materials and others): Large

decrease in profit accompanying large decrease in revenue. Others: Overall decrease in profit primarily due to strategic expenses.

4) Other

In the Other segment, sales increased 5.7% year-on-year, or ¥0.3 billion, to ¥7.2 billion. Segment business profit increased 92.2% year-on-year, or ¥0.8 billion, to ¥1.7 billion.

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