First Half FY3/2018

Financial Results Presentation

November 17, 2017

The Nisshin OilliO Group, Ltd.

1

Summary of Consolidated Financial Results for First Half FY3/2018 and Progress Report

on Medium-Term Management Plan

Takahisa Kuno, Representative Director and President

2

Net sales 166,761 155,032 11,729 +7.6%

Operating income 4,706 5,540 -834 -15.1%

Ordinary income 4,485 5,122 -637 -12.4%

Net income

attributable to the

parent’s shareholders3,471 3,964 -493 -12.4%

First Half

FY3/2018

YoY

Change Change (%)

First Half

FY3/2017（Million yen）

Consolidated Financial Results for First Half FY3/2018

3

4

Net sales 340,000 324,909 +15,090 +4.6%

Operating income 10,000 10,234 -234 -2.3%

Ordinary income 10,000 10,334 -334 -3.2%

Net income

attributable to the

parent's shareholders6,500 7,569 -1,069 -14.1%

FY3/2018 Forecasts

YoY

Change Change (%)

FY3/2017 Results(Million yen)

FY3/2018 Consolidated Earnings Forecasts

Progress Report on Medium-Term Management Plan

5

Globalization Strategic Marketing Technological Innovation

Growth strategies

Reinforcement

Basic policies

□ Carry on business structure reforms while shifting focus to growth trajectory

Increase investment to accelerate globalzation and strengthen cooperation between sites

Deploy strategies that rally the group’s comprehensive competencies in the edible oils for commercial-use and edible oils for food processing domains

Strengthen our marketing capability to create new additional value

Strengthen the OilliO brand and create a new market in the household-use domain

Globally expand the Health Science Business, which contribute to society through "the power of health and energy"

Structure reforms for oil milling and fortification of production platforms

ESG management

*Health Science Business: This business contributes to society by providing consumers with "the power of health and energy" that are essential at each stage of life through wellness recommendations developed using proprietary technologies

Global Strategy for Intercontinental Specialty Fats (ISF) (Malaysia) Which is

the Core of the Processed Oil and Fat Business

ISF (Malaysia) European and US customers

Main requirements of European customers

• Sustainability and social responsibility • Rigorous traceability of raw materials • Strict quality controls

The Nisshin OilliO Group’s oil and fat technologies

• Subtle oil and fat analysis technology • Palm oil fractionation and processing technology • System for stable supply of high quality oil and fat

Solving customers issues through our

technological capabilities

Oil and fat processing technology

+ high quality and

reliability

6

Globalization

Progress Report on Medium-Term Management Plan

・Expansion of ISF’s Global Supply Chain

Acquiring a production site in Europe • ISF is taking steps to acquire a production site in Italy. • Having a production site close to customers will enable a flexible response to

customers and sales expansion of specialty fat to the highly quality- sensitive European market.

Established sales and logistics bases in China

• Established a sales base in Shanghai, China to enhance customer support in

the Chinese market, where sales of processed oil and fat products are expanding.

・Sales expansion of the Fine Chemical Business in China

Steadily expanded sales of raw materials for cosmetics in China by enhancing customer support using the local sales subsidiary of the Fine Chemical Business

7

Globalization

Progress Report on Medium-Term Management Plan

・Proposals for Energizing and Expanding the Household-Use Market

Proposed edible oil uses and products to help create new markets

• Proposed new ways of using edible oil, such as pouring directly over dishes at the table, and processed foods using high quality olive. (left photo)

• Developed and launched products that meet demand for easier meal preparation driven by the rise of households where both partners work. Proposed solutions for cooking at home. (below photo)

Dissatisfaction with Deep Fried Chicken Cooking

Research by The Nisshin OilliO Group MA／N=348

Cooking skill９％

Other (running out of oil , etc.)

１５％

Preparation, clean up

６０％

Odor１３％ 0.0

1.0

2.0

2012年 2014年 2016年 2012 2014 2016

Growth in market for oils directly intaken, such as those poured over dishes

The market has more than doubled

Estimated by The Nisshin OilliO Group based on research by INTAGE Inc. SCI, Shoku MAP Inc. 8

Technological Innovation Strategic Marketing

Progress Report on Medium-Term Management Plan

・Disseminate information to increase recognition of MCT(medium-chain triglyceride), expand market for edible oil, and increase its value

Disseminate information related to the good flavor provided by oil & fat health benefits for wide age groups

• Disseminate information about lifestyles that actively incorporate oil for health

• Hold experience-style events for establishing and widening recognition of new uses for edible oils other than frying and stir-frying, such as enjoying the flavor when poured onto food.

• Expand the area of development for MCT beyond the existing target of elderly people suffering from dementia and poor nutrition. Contribute to the health of people of wider age groups.

9

Technological Innovation Strategic Marketing

Progress Report on Medium-Term Management Plan

Operating income 10.2 10.0 13.0 Billion

yen

ROE 6.3 5.2 7.0 %

EPS growth rate 222 190 300 Yen per

share

Operating cash

flow13.7 11.5 50.0 Billion

yen

FY3/2018 FY3/2021FY3/2017

Four-year total through FY3/2021

CAGR of 8%

Targets

10

Summary of Consolidated Financial Results for First Half FY3/2018

Kenji Matsuura, General Manager, Financial Department

11

Net sales 166,761 155,032 ＋11,729 ＋7.6%

Operating income 4,706 5,540 - 834 - 15.1%

Ordinary income 4,485 5,122 - 637 - 12.4%

Net income attributable to the parent’s shareholders

3,471 3,964 - 493 - 12.4%

（Million yen）

Summary of Consolidated Financial Results

First Half FY3/2018

First Half FY3/2017

YoY

Change Change (%)

12

(Million yen)

Consolidated Results by Business Segment

Oil, Meal, and Processed Food 109,245 1,771 106,355 2,641 ＋2.7% - 33.0%

Processed Oil and Fat

46,709 2,429 38,537 2,419 ＋21.2% ＋0.4%

Fine Chemical 9,012 613 8,426 651 ＋7.0% - 5.8%

Other/Corporate 1,794 - 107 1,712 - 171 ＋4.8% ―

Consolidated total

166,761 4,706 155,032 5,540 ＋7.6% - 15.1%

First Half FY3/2018

Net sales Operating income

First Half FY3/2017

Change (%)

Percentage of overseas sales

21.4% 18.6% ＋2.9

13

Net sales Net sales Operating income

Operating income

Factors Impacting Operating Income (Results)

14

The Chicago market price for

soymeal softened, while rapeseed

meal also encountered an adverse

environment, partly due to the

impact of a fall in raw material

prices for formulated feed.

However, the Company maintained

an appropriate price and strove to

expand sales.

Raw material costs rose year on

year. The price of soybeans was

level year on year; however, the

price of rapeseed increased due to

weather in production areas and

strong demand.

Key Points

Status of Oil, Meal, and Processed Food (1)

Source：Bloomberg

Source：Yushitokuho Source ：Bloomberg

Procurement Environment for Raw

Materials

Sales Environment for Meal

Market prices for raw materials

(￠/Bu) Soybeans (Chicago)

Rapeseed (Winnipeg) (CAD/t)

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2015年度 2016年度 2017年度

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2015年度 2016年度 2017年度

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2015年度 2016年度 2017年度

(JPY/＄)

Foreign Exchange Rate (Yen/US Dollar)

30

40

50

60

70

80

20,000

40,000

60,000

80,000

100,000

Soybean meal Rapeseed meal

菜種粕ﾚｼｵ Rapeseed meal ratio

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2015年度 2016年度 2017年度

(JPY/t) Average price in the

meal industry

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2015年度 2016年度 2017年度

(%) (%)

Meal Value Trends

15

Key Points

FY3/2016 FY3/2017 FY3/2018

FY3/2016 FY3/2017 FY2018

FY3/2016 FY3/2017 FY3/2018

FY3/2016 FY3/2017 FY2018

FY3/2016 FY3/2017 FY3/2018

FY3/2016 FY3/2017 FY3/2018

FY3/2016 FY3/2017 FY3/2018

・Strong sales of high value-added products such as flaxseed oil and sesame oil ・Expanded sales of high functional oils such as “Nisshin Healthy-Off” and “Ｎisshin Canola Oil Natyu-Made” ・Cultivate new partners for ready-made meals and restaurant sectors, among others ・Sales prices failed to reach anticipated level. Initiatives to continue in the second half.

Status of Oil, Meal, and Processed Food (2)

Edible oil for commercial use and processing use 34.6 33.9 ＋0.70 ＋2.1%

Household-use 26.0 25.8 ＋0.20 ＋0.7%

Wellness food 1.4 1.4 ＋0.05 ＋3.4%

Total 62.1 61.2 ＋0.95 ＋1.5%

First Half FY3/2018

Change First Half FY3/2017 Amount Change (%)

Net sales

Sales of Oil and Fats and Processed Food

Edible oil for commercial use and processing use ＋0.45 - 1.00

Household-use ＋0.20 - 0.25

Wellness food ＋0.00 ＋0.05

Total ＋0.65 - 1.20

Increase in sales volume

Change in unit

prices (sales)

Soybean ＋0.05 ＋0.10 - 0.15 - 0.00

Rapeseed - 0.95 ＋0.10 - 0.15 - 1.00

Other products and manufacturing costs, etc.

＋0.70

Total - 0.90 ＋0.20 - 0.30 - 0.30

Ｃ＆Ｆ Foreign

exchange

Raw materials procurement Meal sales

Total

Increase in sales volume +0.65 billion Change in unit prices -1.50 billion Impact on segment

income

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2015年度 2016年度 2017年度

Nikkei Market Price Trends: Oils

(Billion yen)

16

150

170

190

210

230

250

270

290

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Soybean oil (18 liter drum)

Soybean oil (bulk)

Rapeseed oil (bulk)

(JPY/kg)

(JPY/ 18 liter drum)

FY3/2016 FY3/2017 FY3/2018

Key Points

Status of Processed Oil and Fat

Source：Bloomberg

Net sales 46.7 38.5 +8.15 +21.2%

Operating income 2.4 2.4 +0.00 +0.4%

First Half FY3/2018

Change First Half FY3/2017 Amount Change (%) (Billion yen)

*Foreign currency conversion effect (Net sales - 2.05billion , Operating income – 0.10billion ）

Margarine, shortening, and others

Specialty fats

Chocolate products

Confectionery ingredients

(premix products)

・In Japan, strong performance in chocolate products and confectionery ingredients (premix products) ・Overseas, solid sales of high value-added products for the European market, despite impact from an increase in palm oil market prices

Key Points

Japan

Overseas

Japan

38%

44%

18% For Europe

Malaysia

Other regions

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2015年度 2016年度 2017年度

(MYR/t)

Raw material market price: Palm oil

Japan Processed oil and fat products(※) - 0.10

+ 0.10 Chocolate products ＋0.05

Confectionery ingredients (premix

products) ＋0.15

Overseas Processed palm products - 0.10 - 0.10

Total ＋0.00

Impact on segment income

Billion yen（YoY）

（※）margarine, shortening, specialty fats and others

Overseas * Value (net sales) basis Sales mix

17 FY3/2016 FY3/2017 FY3/2018

Status of Fine Chemical

Net sales 9.0 8.4 +0.6 +7.0%

Operating income 0.6 0.6 - 0.05 - 5.8%

First Half FY3/2018

Change First Half FY3/2017 Amount Change (%)

Japan Asia

Europe

• Raw materials for cosmetics sold briskly to a

major customer in Japan, while overseas sales

declined to South Korea and Europe.

• Strong operating results at The Nisshin OilliO

(Shanghai) International Trading

• Sales of MCT continued to be strong, especially

for use in pharmaceutical products.

• IQL continued to experience an adverse sales

environment.

Raw materials for

cosmetics

Detergents, etc.

Food and chemicals, and others

Raw materials for cosmetics - 0.05

Detergents, etc. - 0.00

Food and chemicals, and others - 0.05

Consolidation adjustment ＋0.05

Total - 0.05

Impact on segment income

Sales mix

18

(Billion yen)

Billion yen（YoY）

Key Points

* Value (net sales) basis

*Foreign currency conversion effect (Net sales - 0.05billion , Operating income – 0.0billion ）

Americas and other

42 43 44 48 27

37 37 42

48

28

21 21 24

26

12

FY3/2014 FY3/2015 FY3/2016 FY3/2017 FY3/2018

Trend in Profit in High Value-Added Categories

Fine Chemical Processed Oil and Fat

Oil, Meal, and Processed Food

＊Profit represents profit on sales, a profit indicator for internal management purposes, calculated as gross profit less direct operating expenses and certain other items.

100 110

122

Prior-year results and forecasts for the current fiscal year, with results for FY3/2014 indexed as 100

High value-added products as a percentage of profit from household-use products

Status of Profit in High Value-Added Categories

101

Forecast

130

High value-added products as a percentage of consolidated profit

Standard products and others High

value-added products

First Half FY3/2018

First Half

Standard products and others

67

(17%)

* Figures in parentheses represent year-on-year changes

(18%)

(9%)

(61%)

(57%)

(39%)

19

Factors Impacting Operating Income(Forecasts)

20

【Reference materials】

21

* Figures for The Nisshin OilliO Group, Ltd.

Trends in Raw Materials and Meal Prices : Soybean

22

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

Soybean raw material prices（USD/ｔ） Soybean raw material prices（¥/ｔ） Soybean meal selling prices（¥/ｔ）

Indexed with April-September 2012 set as 1.0.

Trends in Raw Materials and Meal Prices: Rapeseed

23

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

Rapeseed raw material prices（USD/ｔ） Rapeseed raw material prices（¥/ｔ） Rapeseed meal selling prices（¥/ｔ）

Indexed with April-September 2012 set as 1.0.

* Figures for The Nisshin OilliO Group, Ltd.

Trends in Selling Prices for Main Oil and Fat Products

24 * Figures for The Nisshin OilliO Group, Ltd.

Indexed with April-September 2012 set as 1.0.