Nakabayashi : ［Delayed］Consolidated Financial Results for the Year Ended March 31, 2022

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Consolidated Financial Results for the Year Ended March 31, 2022

(Based on Japanese GAAP)

Company name:	NAKABAYASHI CO.,LTD
Stock exchange listings:	Tokyo
Stock code:	7987	URL https://www.nakabayashi.co.jp/
Representative	President and Representative Director	Hideaki Yumoto
Inquiries:	Managing Executive Officer and General	Kazunari Sakuta
Manager of Administration Division
Scheduled date of ordinary general meeting of shareholders:	June 24, 2022
Scheduled date to file Securities Report:	June 24, 2022
Scheduled date to commence divined payments:	June 27, 2022
Preparation of supplementary material on financial results:	No
Holding of financial results meeting:		No

May 13, 2022

TEL [phone]

					(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
(1)Consolidated Operating Results				Percentages indicate year-on-year changes
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
		Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Year ended March 31, 2022		63,118	(0.8)	1,818	(28.7)	2,336	(22.7)	1,018	(34.4)
Year ended March 31, 2021		63,644	(2.5)	2,550	8.7	3,023	10.5	1,552	(0.6)
(Note) Comprehensive income:	Year ended March 31, 2022:	¥1,218million ［(51.3%)］
	Year ended March 31, 2021:	¥2,502million ［(85.4%)］

		Diluted earnings per	Profit attributable	Ordinary profit/total	Operating profit/net
	Earnings per share	to owners of
	share	assets	sales
		parent/equity
	Yen	Yen	%	%	%
Year ended March 31, 2022	39.26	-	3.9	4.1	2.9
Year ended March 31, 2021	60.20	-	6.2	5.4	4.0

(Reference) Equity in earnings of affiliates	Year ended March 31, 2022	-million yen
			Year ended March 31, 2021	-million yen
(2)Consolidated financial position
			Total assets		Net assets				Equity Ratio	Net assets per share
					Millions of yen		Millions of yen			%		Yen
As of March 31, 2022					58,225		28,504			46.1		981.29
As of March 31, 2021					57,113		28,046			45.2		1,000.80
(Reference) Equity:	As of March 31, 2022	¥26,861million
	As of March 31, 2021	¥25,821million
(3)Consolidated Cash flows
		Cash flows from	operating		Cash flows from			Cash flows from	Cash and cashequivalents
			activities		investing activities			financing activities	at end of period
					Millions of yen			Millions of yen				Millions of yen		Millions of yen
Year ended March 31, 2022				2,226			(283)					(299)		8,076
Year ended March 31, 2021				2,407			(518)				(2,269)		6,426
2. Cash dividends
					Annual dividends per share				Total cash		Dividend payout	Ratio of dividends to
															net assets
		1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end		Total	dividends (Total)		ratio (Consolidated)	(Consolidated)
			Yen		Yen		Yen	Yen			Yen	Millions of yen		%	%
Year ended March 31, 2021		-		10.00			-	12.00		22.00	567			36.5	2.3
Year ended March 31, 2022		-		10.00			-	12.00		22.00	586			56.0	2.2
Year ending March 31, 2023		-		10.00			-	12.00		22.00				35.4
(Forecast)

3. Forecast of consolidated financial results for the year ending March 31, 2023 (from April 1, 2022 to March 31, 2023) Percentages indicate year-on-yearchanges

	Net sales		Operating profit		Ordinary profit		Profit attributable to	Earnings per share
				owners of parent
	Millions of yen		%	Millions of yen		%	Millions of yen		%	Millions of yen	%	Yen
Six months ending	29,000		1.2	400		34.5	600		2.3	250	119.2	9.13
September 30, 2022
Full year	65,000		3.0	2,550		40.2	3,000		28.4	1,700	66.9	62.10
4. Notes
(1) Changes in significant subsidiaries during the nine months ended March 31, 2022			No
(changes in specified subsidiaries resulting in the change in scope of consolidation):
(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:	Yes
Changes in accounting policies due to other reasons:						No
Changes in accounting estimates:									No
Restatement of prior period financial statements:						No

(3) Number of issued shares (common shares)

Total number of issued shares at the end of the period (including treasury shares)

	As of March 31, 2022	28,794,294 shares	As of March 31, 2021	28,794,294 shares
Number of treasury shares at the end of the period
	As of March 31, 2022	1,420,245 shares	As of March 31, 2021	2,993,787 shares
Average number of shares during the period
	Year ended March 31, 2022	25,944,995 shares	Year ended March 31, 2021	25,789,510 shares

• This financial results report is not subject to the audit by a certificated public accountant or an auditing firm.
• Explanation and other special notes concerning the appropriate use of business performance forecasts. (Cautionary Statement with Respect to Forward-Looking Statements)
  The earnings forecasts and other forward-looking statements herein are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Actual results, etc. may differ materially from the forecasts due to various factors. For notes on the assumptions underlying the earnings forecasts and the earnings forecasts, please refer to "1. Overview of Operating Results, (4) Future Outlook" on page 4.

○Accompanying Materials - Contents
1.Overview of Operating Results. ................................................................................................................................................	2
(1)	Overview of Operating Results for the Fiscal Year under Review......................................................................................	2
(2)	Overview of Financial Position for the Fiscal Year under Review......................................................................................	4
(3)	Overview of Cash Flows for the Fiscal Year under Review..…………….................. ..…………….................................	4
(4)	Future Outlook....................................................................................................................................................................	4
2. Basic Concept Regarding Selection of Accounting Standards………………………………………………………………..	5
3. Consolidated Financial Statements and Major Notes................................................................................................................	6
(1)	Consolidated Balance Sheets...............................................................................................................................................	6
(2)	Consolidated statements of income and consolidated statements of comprehensive income.............................................	8
	Consolidated Statements of Income.................................................................................................................	8
	Consolidated statements of comprehensive income...........................................................................................................	10
(3)	Consolidated statements of changes in equity……………………………………………………………………………. 11
(4)	Consolidated statements of cash flows................................................................................................................................	13
(5)	Notes to Consolidated Financial Statements.......................................................................................................................	15
	(Notes on the Going Concern Assumption)......................................................................................................................	15
	(Changes in Accounting Policies).....................................................................................................................................	15
	(Segment Information)......................................................................................................................................................	16
	(Per Share Information).............................................................................................................................. ......................	18
	(Significant Subsequent Events)………………………………………………………………………………………... 19
4. Others ………………………………………………………………………………………………………………………...	20

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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 under review, the Japanese economy saw a decline in the number of new infectious diseases and the resumption of socio-economic activities due to the cancellation of the declaration of an emergency, as a result of the prolonged vaccination of COVID-19. However, the outlook remains uncertain, including in the global economy, due to factors such as soaring crude oil prices, the situation in Russia and the Ukraine, and a shortage of semiconductors due to the stagnant supply chain.

In the environment surrounding our group, consumer spending and corporate activities have been stagnant for a prolonged period due to the impact of COVID-19.

The business environment remains challenging due to the consequent restraint on purchasing by individuals, cost reductions by companies, and rises in raw material prices and personnel costs.

Under these circumstances, we formulated our third medium-term management plan (April 1, 2021 to March 31, 2024), "add+ venture 70" (Adventure 70). As conventional business models and processes change dramatically depending on the New normal and DX, we have set 70 new targets to increase corporate value and are working to achieve the targets. To this end, we are working to optimize the allocation of management resources and create synergies among business segments and Group companies as a whole. As a concrete policy required in the era of post-corona, our Group aims to become a leading company in the "Life-related industry" (Note), an industry field that will play a central role in the future, and will advance initiatives to strengthen existing businesses and enter new businesses. Specifically, it refers to the following five fields (1) health and medical care (2) environment (including renewable energy) (3) life and welfare (4) agriculture (5) culture.

(NOTE)"Life-related industries" is a concept advocated by Professor Yoshinori Hiroi of Kyoto University

On July 1, 2021, Sunlemon Co., Ltd., which manufactures and sells stuffed toys in the mid-tohigh-priced range, was made a subsidiary. As a result of the Company's efforts to expand its new product categories that will lead to mental comfort and health by leveraging its planning and design capabilities, results were favorable, including the synergy effect with Nakabayashi. In the future, we will further strengthen the (3) lifestyle and welfare fields of the life-related industry.

In addition, on April 4, 2022, we shifted to the "prime market" in the new market segment of the Tokyo Stock Exchange. The status of compliance with the listing maintenance standards of the prime market as of our transition record date does not satisfy the standards for the average daily trading value. However, we believe that moving to the prime market is essential to enhancing our business value, achieving sustainable growth and enhancing corporate value over the medium to long term. Based on this belief, we will take measures to satisfy the listing maintenance standards with respect to the average daily trading value.

As a result, Kokusai Chart Corporation which had been a consolidated subsidiary, became a wholly owned subsidiary through a share exchange with an effective date of March 1, 2022.

We will strive to increase corporate value by improving the efficiency of our production system, strengthening existing areas, developing new products, utilizing human resources, accelerating decision-making, and reducing listing maintenance costs.

Net sales remained unchanged from the previous fiscal year, but Operating profit and Ordinary profit declined due to a worsening cost of sales ratio caused by rising raw material prices and labor costs, as well as increased Selling, general and administrative expenses. Extraordinary income recorded 354 million yen, including Gain on sale of non-current assets, and Extraordinary losses recorded 639 million yen, including a loss related to the Anti-Monopoly Act.

As a result, net income attributable to owners of the parent was 1,018 million yen.

Our Group's operating results for the fiscal year under review are as follows.
Net sales	63,118 million yen	(Down 0.8% year on year)
Operating profit	1,818 million yen	(Down 28.7% year on year)
Ordinary profit	2,336 million yen	(Down 22.7% year on year)
Net profit attributable to owners of parent	1,018 million yen	(Down 34.4% year on year)

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Operating results by segment are as follows.

① Business Process Solutions Business

In the BPO (business process outsourcing) business, orders recovered due to the resumption of various trial operations and active sales promotion campaigns following the cancellation of municipal grant operations and the declaration of an emergency situation related to COVID-19. Sales of packaging materials such as paper containers and packaging grew due to a recovery in consumer sentiment. In the library solutions business, outsourcing services, such as counter operations from public libraries, and materials digitization operations remained firm, but sales in the library binding business declined. In addition, orders for corporate notebooks and forms declined due to trends associated with the adoption of DX by companies and other entities.

The performance of Hiroda Shiko Co., Ltd., which became a consolidated subsidiary through an M&A in May 2021, contributed.

Consequently, Net sales in this project amounted to 32,791 million yen (down 0.6% year-on-year), while Operating profit amounted to 889 million yen (up 33.7% year-on-year).

②Consumer Communications Business

Sales of airborne-reduction products and remote work-related products have run their course. Stationaries such as files and notebooks remained strong. Olympic-related products underperformed the sales plan originally planned and we disposed of inventories.

In addition to planning and sales of products such as the Meguri-ing business the Group has begun initiatives as a new tourism support measure, and the Group's operating business is gradually showing results as the Emergency Declaration has been lifted. However, Operating profit declined due in part to rising raw material prices, the impact of a worldwide shortage of semiconductors, and the weak yen in foreign exchange rates.

The performance of Sunlemon Co., Ltd., which became a consolidated subsidiary through an M&A in July 2021, contributed. Consequently, Net sales in this segment amounted to 21,247million yen (down 0.2% year-on-year), and Operating profit

amounted to 643 million yen (down 54.1% year-on-year).

③Office Appliances Business

Demand for office shredders continued to be sluggish due to companies restraining capital investment and the shift to DX in the Corona disaster. However, maintenance and inspection operations recovered due to a recovery in the rate of employee attendance at offices. Sales of large shredders and crushers grew due to replacement demand.

Layout changes aimed at improving the office environment and taking measures to reduce spills have been brisk, and low-party sales have been favorable.

Consequently, Net sales in this segment amounted to 7,488 million yen (down 1.0% year-on-year), and Operating profit amounted to 544 million yen (down 4.2% year-on-year).

④Energy Business

Sales and operating profit of wooden biomass power generation declined due to a decrease in unit selling prices with premiums. Solar power generation performed well.

As a result, net sales in this business amounted to 1.527 million yen (down 10.4% year on year) and operating profit amounted to 71 million yen (down 68.5% year on year).

⑤Others

The Vegetable Plant Business and the Garlic Farm Business, etc. posted net sales of 63 million yen(down 34.0% year on year) and an operating loss of 41 million yen (an operating loss of 36 million yen for the previous year).

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