日本酸素ホールディングス（4091） – [Delayed] Consolidated Financial Results for Fiscal Year Ending March 31, 2022 (Based on IFRS)

Consolidated Financial Results for Fiscal Year Ended March 31, 2022 (Based on IFRS) Stock exchange listing: Tokyo (Prime) May 11, 2022 Company name: Nippon Sanso Holdings Corporation TSE Code: 4091 URL: https://www.nipponsanso-hd.co.jp Representative: Toshihiko Hamada, Representative Director, President and CEO Inquiries: Takayoshi Umehara, General Manager, Investor Relations Tel.: +81-3-5788-8512 Scheduled date to hold Ordinary General Meeting of Shareholders: June 17, 2022 Scheduled date to file Securities Report: June 20, 2022 Scheduled date to commence dividend payments: June 20, 2022 Supplementary materials on financial results: Yes Financial results explanatory meeting: Yes (For institutional investors and analysts) 1. Consolidated financial results for FYE2022 (April 1, 2021 – March 31, 2022) (1) Consolidated operating results Revenue Operating income Net income Core operating income (Amounts less than ¥1 million are omitted) (Percentages indicate year-on-year change) Net income attributable to owners of the parent Total comprehensive income (¥ million) % (¥ million) % (¥ million) % (¥ million) % (¥ million) % (¥ million) % FYE2022 957,169 17.0 102,710 17.7 101,183 13.9 66,637 17.2 64,103 16.1 132,363 11.3 FYE2021 818,238 (3.8) 87,251 (3.4) 88,846 (5.4) 56,863 3.3 55,214 3.5 118,924 888.9 (Reference) Income before income taxes FYE2022: ¥91,611 million [17.9%] FYE2021: ¥77,706 million [(1.8) %] Core operating income is calculated as operating income excluding certain gains and expenses attributable to non-recurring factors (non-recurring items). Basic earnings per share (Yen) Diluted net income per share (Yen) Return on equity attributable to owners of the parent (%) Income before income taxes to total assets ratio (%) Core operating income to revenue ratio (%) FYE2022 FYE2021 148.13 127.59 － － 11.2 12.0 4.8 4.3 10.7 10.7 (Reference) Share of profit (loss) of associates and joint ventures accounted for using the equity method FYE2022: ¥3,512 million FYE2021: ¥5,602 million (2) Consolidated financial position Total assets (¥ million) Total equity (¥ million) Equity attributable to owners of the parent (¥ million) Equity attributable to owners of the parent ratio (%) Equity attributable to owners of the parent per share (yen) 1,977,026 1,836,294 661,137 543,900 628,714 513,164 31.8 27.9 1,452.84 1,185.82 FYE2022 (March 31, 2022) FYE2021 (March 31, 2021) – 1 – (3) Consolidated cash flows FYE2022 FYE2021 2. Dividends Cash flows from operating activities (¥ million) Cash flows from investing activities (¥ million) Cash flows from financing activities (¥ million) Balance of cash and cash equivalents at term-end (¥ million) 148,760 149,231 (70,858) (59,686) (77,946) (103,159) 93,697 91,058 End of 1st quarter End of 2nd quarter Annual Dividend End of 3rd quarter (Yen) (Yen) (Yen) Term end (Yen) Total (Yen) Total amount of dividends (¥ million ) Payout ratio (consolidated) (%) Ratio of dividends to equity attributable to owners of the parent (consolidated) (%) FYE2021 FYE2022 FYE2023 － － － 14.00 16.00 18.00 － － － 16.00 18.00 30.00 34.00 18.00 36.00 12,987 14,718 23.5 23.0 23.3 2.8 2.6 (est.) 3. Forecasts for consolidated business operations for FYE2023 full term (April 1, 2022 – March 31, 2023) (Percentages indicate year-on-year change) Revenue Operating income Net income Core operating income Net income attributable to owners of the parent Basic earnings per share (¥ million) % (¥ million) (¥ million) % (¥ million) % (¥ million) % (Yen) Full term 950,000 (0.7) 107,000 107,500 6.2 69,000 3.5 67,000 4.5 154.82 % 4.2 (Transfer of specified subsidiaries resulting in changes in the scope of consolidation) (Reference) Income before income taxes FYE2023 full term: ¥97,000 million [5.9%] * Notes (1) Changes in significant subsidiaries during the period: None (2) Changes in accounting policies, changes in financial forecasts 1. Changes in accounting policies required by IFRS: None 2. Changes in accounting policies other than 1.: None 3. Changes in accounting estimates: None (3) Number of outstanding shares (common shares) 1. Number of outstanding shares at the end of the period (including treasury stock) 2. Number of treasury stocks at the end of the period Mar.31, 2022 As of As of Mar.31, 2022 3. Average number of shares during the period FYE2022 433,092,837 shares 344,870 shares 432,749,204 shares Mar. 31, 2021 As of As of Mar. 31, 2021 FYE2021 433,092,837 shares 342,332 shares 432,752,228 shares * Financial reports are out of the scope of audit by certified public accountants or audit corporations. * Explanation on the appropriate use of the forecasts of financial results and other comments The forward-looking statements such as the forecasts of financial results stated in this document are based on the information currently available to the Company and certain assumptions that the Company judges as rational. The Company is under no obligation to guarantee their achievement. Actual financial results may vary significantly due to various reasons. For details on the assumptions of the forecasts and related matters, please see page 4, “(4) Future Outlook” in “1. Overview of Business Results.” The Company plans to hold a briefing of results for institutional investors and analysts on Friday, May 20, 2022. Financial results disclosed at that briefing will be posted on the Company website in a prompt manner following the briefing. – 2 – ○ Contents 1. Overview of Business Results ……………………………………………………………………………………………… (1) Overview of Business Results for the Fiscal Year Under Review ……………………………………………………… (2) Overview of Financial Position for the Fiscal Year Under Review ……………………………………………………… (3) Overview of Cash Flows for the Fiscal Year Under Review …………………………………………………………… (4) Future Outlook …………………………………………………………………………………………………………… (5) Basic Policy on Profit Distribution and Dividends for FYE2022 and FYE2023 ………………………………………… 2. Basic Policy on Selection of Accounting Standards ………………………………………………………………………… 3. Consolidated Financial Statements and Main Notes ………………………………………………………………………… 4 4 5 5 6 7 7 8 (1) Consolidated Statement of Financial Position …………………………………………………………………………… (2) Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income …………………… 8 10 (3) Consolidated Statement of Changes in Equity …………………………………………………………………………… 12 14 (4) Consolidated Statement of Cash Flows ………………………………………………………………………………… (5) Notes to the Consolidated Financial Statements ………………………………………………………………………… (Note regarding going concern assumption) …………………………………………………………………………… 16 16 16 (Segment information) ………………………………………………………………………………………………… (Per-Share Information) ………………………………………………………………………………………………… 19 (Significant Subsequent Events) ……………………………………………………………………………………… 19 – 3 – 1. Overview of Business Results (1) Overview of Business Results for the Fiscal Year Under Review (General overview) During fiscal year April 1, 2021 to March 31, 2022, revenue was strong. This was a result of strong economic recovery with underlying volume improvement in all business segments. Shipment volume of air separation gases (oxygen, nitrogen, and argon) all increased significantly compared to last fiscal year. Also contributing significantly to the performance was the high cost recovery, pass through, and surcharges that were implemented to recover the increasing cost of electricity, diesel, liquefied natural gas, supply chain disruptions, and other inflationary factors on a global level. The NSHD Group achieved the following results for the fiscal year under review: revenue on a consolidated basis increased 17.0% year on year to ¥957,169 million; core operating income increased 17.7% to ¥102,710 million; operating income increased 13.9% to ¥101,183 million; and net income attributable to owners of the parent increased 16.1% to ¥64,103 million. Core operating income is calculated as operating income excluding certain gains and expenses attributable to non-recurring factors (non-recurring items) such as losses arising from business withdrawal or downsizing. (Overview of business performance by reportable segment) A breakdown of business performance by reportable segment is as follows. Segment income represents core operating income. From the fiscal year under review, the NSHD Group has changed its reportable segments. Therefore, to facilitate the year-on-year comparisons shown below, the figures for the previous fiscal year have been reclassified based on the changes to the reportable segments. ① Gas Business in Japan In the industrial gas-related business, revenue from air separation gases, a core product, increased sharply year on year, mainly due to a general recovery in production activity in relevant industries. Additionally, revenue from LP gas rose as a result of higher cost pass through while underlying volumes were down slightly. In addition, revenue from electronic material gases and related businesses increased; industrial gas-related equipment and installation improved; medical-related equipment sales were also positive. As a result, in the Gas Business in Japan, revenue increased 8.8% year on year to ¥372,033 million and segment income increased 3.5% to ¥30,939 million. ② Gas Business in the United States In the industrial gas-related business, revenue from air separation gases, a core product, significantly increased year on year, driven by a recovery in production activity, with growth centered on bulk gases. In addition, sales of carbon dioxide gases were strong. In equipment and installation, demand for welding and cutting equipment recovered after weakness in the previous fiscal year, with revenue increasing sharply. In the electronics-related business, revenue also increased and remained strong. In addition, high distribution surcharges and energy pass-through occurred throughout the fiscal year further increasing revenues. As a result, in the Gas Business in the United States, revenue increased 18.3% year on year to ¥224,801 million and segment income increased 18.1% to ¥27,314 million. ③ Gas Business in Europe While the previous fiscal year was seriously impacted by the spread of COVID-19, this fiscal year has seen a consistent and solid economic recovery. In addition, the sharp rise in record energy costs that began in the second quarter accelerated through the fourth quarter, but we responded through price pass-through and cost reduction efforts. And, much of the increase in revenue was due to our efforts to pass on prices. As a result, in the Gas Business in Europe, revenue increased 31.1% year on year to ¥209,778 million and segment income increased 25.2% to ¥26,303 million. ④ Gas Business in Asia & Oceania In the industrial gas-related business, air separation gas revenue, a core product, increased driven by a recovery in production activity in related industries. In LP gas, which makes up a large portion of sales in the Australia region, revenue increased due to increased volume as well as higher cost pass through of LP gas prices. In the electronics-related business, revenue increased in electronic material gases in East Asia. In equipment and installation, revenue increased in the industrial gas-related business. – 4 – As a result, in the Gas Business in Asia & Oceania, revenue increased 21.1% year on year to ¥123,533 million and segment income increased 43.9% to ¥12,837 million. ⑤ Thermos Business In Japan, revenue significantly increased year on year due to a recovery in shipment volumes of portable mugs and sports bottles from the previous fiscal year. Furthermore, sales volumes of frying pans and tumblers also increased, continuing from the previous fiscal year, in connection with the widespread adoption of new lifestyles where consumers spend longer periods of time at home. Overseas, shipping volume increased due to the recovery of business conditions in various regions. As a result, revenue increased 12.0% year on year to ¥26,849 million, and segment income increased 24.6% to ¥6,441 million. (2) Overview of Financial Position for the Fiscal Year Under Review Total assets amounted to ¥1,977,026 million as of March 31, 2022, an increase of ¥140,731 million from March 31, 2021. Foreign exchange rates resulted in an increase in total assets of approximately ¥105.5 billion. This mainly reflected foreign exchange rate changes, such as the yen’s depreciation of ¥11.68 against the U.S. dollar and the yen’s depreciation of ¥6.90 against the euro as of March 31, 2022, compared with the rates as of March 31, 2021. In the fiscal year, trade receivables increased as a result of increased revenues from economic recovery and price revision activities, etc. In addition, the Company proceeded with the planned repayment of interest-bearing debt with a focus on continued debt reduction and financial soundness. The Company will continue to communicate openly and appropriately with the bond market and financial institutions to improve our liquidity and funding capacity. The hybrid financing raised in January 2019 and March 2019 totaled ¥250 billion, and the rating agencies (Japan Credit Rating Agency and Rating, Ltd. and Investment Information, Inc.) have approved 50% of this financing as “equity”. The Company has referred to this as equity-type debt. As a financial soundness indicator that considers this hybrid financing, the Company has established the Adjusted net D/E ratio* as one of our key performance indicators and strives for the optimal composition of debt and equity. The Adjusted net D/E ratio achieved was 0.94 times, an improvement of 0.21 points from the end of the previous fiscal year. (Note) Adjusted net D/E ratio: (Net interest-bearing debt – Equity-type debt) / (Equity attributable to owners of the parent + Equity-type debt) [Assets] Total current assets were ¥422,493 million, an increase of ¥53,592 million from March 31, 2021. The main changes were an increase in trade receivables, cash and cash equivalents, and the impact from yen depreciation against major currencies. Total non-current assets were ¥1,554,532 million, an increase of ¥87,139 million from March 31, 2021, mainly reflecting increases in plant, property and equipment, goodwill and the impact from yen depreciation. [Liabilities] Total current liabilities were ¥331,595 million, an increase of ¥5,575 million from March 31, 2021. The main changes were a decrease in bonds and borrowings, an increase in trade payables, and the impact from yen depreciation. Total non-current liabilities were ¥1,315,888 million, an increase of ¥17,918 million from March 31, 2021. The main factors were an increase in deferred tax liabilities, a decrease in bonds and borrowings, and the impact from yen depreciation. [Equity] Total equity amounted to ¥661,137 million, an increase of ¥117,237 million from March 31, 2021. The main factors were an increase due to the recording of profit attributable to owners of parent, a decrease due to retained earnings paid as dividends, and an increase in foreign exchange differences on translation of foreign operations. The equity attributable to owners of the parent ratio stood at 31.8%, up 3.9 percentage points from the previous fiscal year-end. (3) Overview of Cash Flows for the Fiscal Year Under Review [Cash flow from operating activities] Net cash provided by operating activities decreased 0.3% year on year to ¥148,760 million. The main components were profit before income taxes, depreciation and amortization, and increase in trade receivables. [Cash flow from investing activities] Net cash used in investing activities increased 18.7% year on year to ¥70,858 million. The main use of cash was for the purchase of property, plant and equipment. [Cash flow from financing activities] Net cash used in financing activities decreased 24.4% year on year to ¥77,946 million. The main changes were repayment of – 5 – long-term borrowings, proceeds from issuance of bonds, and net variation in short-term borrowings. As a result of the Company’s operating, investing and financing activities, the balance of cash and cash equivalents as of March 31, 2022, after accounting for the effects of exchange rates, increased 2.9% year on year to ¥93,697 million. As of Mar. 31, As of Mar. 31, As of Mar. 31, As of Mar. 31, As of Mar. 31, 2018 2019 2020 2021 2022 Ratio of equity attributable to owners of the parent (%) Ratio of equity attributable to owners of the parent on a market value basis (%) Interest-bearing debt to cash flow (years) Interest coverage ratio (times) 41.5 74.9 3.9 16.7 23.0 41.2 10.2 15.3 23.4 39.6 6.7 12.8 27.9 49.6 6.4 12.9 31.8 51.1 6.2 13.7 Notes: Ratio of equity attributable to owners of the parent: Equity attributable to owners of the parent / total assets Ratio of equity attributable to owners of the parent on a market value basis: Market capitalization / total assets Interest-bearing debt to cash flow: Interest-bearing debt / operating cash flow Interest coverage ratio: Operating cash flow / interest payments 1. Each indicator is calculated based on consolidated financial data. 2. Market capitalization is calculated by multiplying the closing year-end share price by the number of shares outstanding at year-end. 3. Operating cash flow is from cash flow from operating activities in the Consolidated Statement of Cash Flows. Interest-bearing debt includes all debt on which interest is paid among liabilities recorded on the Consolidated Statement of Financial Position. Interest payments are from interest paid in the Consolidated Statement of Cash Flows. (4) Future Outlook The Company has formulated a medium-term management plan “NS Vision 2026: Enabling the Future” for the four-year period from FYE2023 to FYE2026. Based on the “four global regions + Thermos” management structure, the five business segments of the NSHD Group, the plan sets forth five key strategies: “Sustainability Management,” “Exploring New Businesses Toward Carbon Neutrality,” “Total Electronics,” “Operational Excellence,” and “DX Initiatives.” Through the plan, the Company aims to strengthen the Group’s comprehensive capabilities and achieve further growth to provide a bright and comfortable future for people, society, and the Earth. The business environment is generally favorable across the regions where the Company operates, and demand for industrial gases continues to grow strongly in FYE2022 and beyond. However, the business environment is uncertain. Price of energy, commodities and other resources are soaring against a backdrop of heightened geopolitical risks, in addition to prolonged inflation and supply chain disruptions. Actual results may differ from the outlook in the medium-term management plan due to these factors. For FYE2023, the Company expects growth in the industrial gases business through continued growth in the field of electronics and a focus on resilience markets such as food, beverage, pharmaceuticals, and healthcare. The Company foresees the global energy price spike that began in FYE2022 to continue at least through to the second quarter of FYE2023, especially in Europe and the United States. But the prices are expected to gradually return to more normal levels from the third quarter onward, pushing revenue down slightly from the previous fiscal year. Meanwhile, core operating income is expected to increase through increased sales volume, continued aggressive price revisions, productivity improvements, and cost reduction measures. Revenue from the Thermos Business had been severely affected by restrictions on consumers’ outdoor activities due to COVID-19, but earnings are expected to improve in FYE2023 as a result of improved consumer confidence following the lifting of such restrictions. The consolidated earnings forecast for the fiscal year ending March 31, 2023 is as follows. Assumed exchange rates against major currencies used in the forecast are 115 yen per U.S. dollar, and 125 yen per euro. – 6 – Revenue Core operating income Operating income Net income Net income attributable to owners of the parent Year ending Mar. 31, 2023 (¥ billion) Year ended Mar. 31, 2022 (¥ billion) Change (%) 950.0 107.0 107.5 69.0 957.1 102.7 101.1 (0.7) 4.2 6.2 66.6 3.5 67.0 64.1 4.5 (5) Basic Policy on Profit Distribution and Dividends for FYE2022 and FYE2023 The Company’s basic policy is to maintain a stable and reliable dividend, while remaining mindful of the need to retain an internal reserve to enhance and strengthen the business structure. The Company will strive to return profits to shareholders through a dividend policy linked to consolidated business performance. In accordance with this policy, the Company plans to set the year-end dividend for the fiscal year under review at ¥18 per share, an increase of ¥2 per share compared to the previous fiscal year. Therefore, the Company plans to pay an annual dividend of ¥34 per share, including an interim dividend of ¥16 per share. For the fiscal year ending March 31, 2023, the Company plans to pay an annual dividend of ¥36 per share, including an interim dividend of ¥18 per share. 2. Basic Policy on Selection of Accounting Standards From the fiscal year ended March 31, 2017, the NSHD Group has adopted International Financial Reporting Standards (IFRS) primarily for the purpose of improving the international comparability of financial statements in the capital markets and to unify accounting procedures within the NSHD Group. – 7 – 3. Consolidated financial statements and main notes (1) Consolidated Statement of Financial Position (Millions of yen) As of Mar. 31, 2021 As of Mar. 31, 2022 Assets Current assets: Cash and cash equivalents Trade receivables Inventories Other financial assets Other current assets Total current assets Non-current assets: Plant, property and equipment Goodwill Intangible assets Investments accounted for using the equity method Other financial assets Retirement benefit asset Other non-current assets Deferred tax assets Total non-current assets Total assets 91,058 182,077 69,613 6,710 19,441 368,901 685,733 455,036 237,751 32,295 49,739 2,467 1,120 3,249 1,467,393 1,836,294 93,697 218,480 80,064 7,310 22,940 422,493 729,658 485,190 241,320 35,700 55,410 2,468 1,163 3,619 1,554,532 1,977,026 – 8 – (Millions of yen) As of Mar. 31, 2021 As of Mar. 31, 2022 96,093 131,721 11,022 58,428 469 28,284 326,019 780,895 29,453 14,037 3,870 19,359 118,757 966,374 1,292,394 37,344 55,901 (273) 422,838 (2,646) 513,164 30,736 543,900 115,123 110,595 9,746 65,228 1,068 29,832 331,595 779,749 31,231 14,165 5,107 20,918 133,120 984,292 1,315,888 37,344 55,945 (281) 476,589 59,115 628,714 32,423 661,137 1,836,294 1,977,026 Liabilities and equity Liabilities Current liabilities: Trade payables Bonds and borrowings Income taxes payable Other financial liabilities Allowance Other current liabilities Total current liabilities Non-current liabilities: Bonds and borrowings Other financial liabilities Retirement benefit liabilities Allowance Other non-current liabilities Deferred tax liabilities Total non-current liabilities Total liabilities Equity Share capital Capital surplus Treasury stock Retained earnings Other components of equity Total equity attributable to owners of parent Non-controlling interests Total equity Total liabilities and equity – 9 – (2) Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income (Consolidated Statement of Profit or Loss) (Millions of yen) Year ended Mar. 31, 2021 Year ended Mar. 31, 2022 Revenue Cost of sales Gross profit Selling, general and administrative expenses Other operating income Other operating expense Share of profit of investments accounted for using the equity method Operating income Finance income Finance costs Profit before income taxes Income taxes Net income Profit attributable to: Owners of parent Non-controlling interests Earnings per share Basic earnings per share (Yen) 818,238 (500,799) 317,439 (233,276) 3,949 (4,867) 5,602 88,846 1,424 (12,564) 77,706 (20,842) 56,863 55,214 1,648 127.59 957,169 (598,597) 358,572 (259,204) 2,241 (3,937) 3,512 101,183 2,192 (11,765) 91,611 (24,973) 66,637 64,103 2,534 148.13 – 10 – (Consolidated Statement of Comprehensive Income) (Millions of yen) Year ended Mar. 31, 2021 Year ended Mar. 31, 2022 56,863 66,637 Net income Other comprehensive income Items that will not be reclassified to profit or loss Financial assets measured at fair value through other comprehensive income Remeasurements of defined benefit plans Share of other comprehensive income of investments accounted for using the equity method Total of items that will not be reclassified to profit or loss Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations Effective portion of net change in fair value of cash flow hedges Share of other comprehensive income of investments accounted for using the equity method Total of items that may be reclassified subsequently to profit or loss Total other comprehensive income, net of tax Comprehensive income Comprehensive income attributable to: Owners of parent Non-controlling interests 7,617 710 (31) 8,296 53,841 56 (133) 53,764 62,060 118,924 116,598 2,325 6,773 607 70 7,451 55,994 299 1,979 58,273 65,725 132,363 129,325 3,038 – 11 – (3) Consolidated Statement of Changes in Equity FYE2021 (April 1, 2020 to March 31, 2021) Share capital Treasury stock Capital surplus (Millions of yen) Retained earnings Balance at April 1, 2020 37,344 56,387 (268) 379,322 Net income Other comprehensive income Comprehensive income Purchase of treasury stock Disposal of treasury stock Dividends Changes in ownership interest in subsidiaries Business combinations or business divestitures Transfer from other components of equity to retained earnings Change in scope of consolidation Other changes Total transactions with owners Net income Other comprehensive income Comprehensive income Purchase of treasury stock Disposal of treasury stock Dividends Changes in ownership interest in subsidiaries Business combinations or business divestitures Transfer from other components of equity to retained earnings Change in scope of consolidation Other changes Total transactions with owners － － － － － － － － － － － － － － － － － － － － － － 53,141 53,141 55,214 － 55,214 － － － － (12,121) 588 (166) － (11,699) － 682 682 － － － － － － － － (485) (485) － － － － 0 － － － － － 19 － 52 52 － － － － － － － － － 71 － － － (5) 0 － － － － － － (5) － 7,507 7,507 － － － － － 93 － － 93 – 12 – Balance at March 31, 2021 37,344 55,901 (273) 422,838 Other components of equity Exchange differences on translation of foreign operations Effective portion of net change in fair value of cash flow hedges Financial assets measured at fair value through other comprehensive income Remeasurements of defined benefit plans Total Total equity attributable to owners of parent Non-controlling interests Total equity Balance at April 1, 2020 (71,170) 7,709 － (63,441) 409,344 31,349 440,693 － 61,383 55,214 61,383 61,383 116,598 2,325 118,924 (12,121) (681) (12,803) (485) (2,787) (3,273) (5) 0 － － (166) － 1,648 677 – － 54 － – 476 56,863 62,060 (5) 0 54 － (166) 476 － － － － － － － (682) (588) (12,778) (2,939) (15,717) (682) (588) Balance at March 31, 2021 (18,029) 15,310 (2,646) 513,164 30,736 543,900 FYE2022 (April 1, 2021 to March 31, 2022) Share capital Treasury stock Capital surplus (Millions of yen) Retained earnings Balance at April 1, 2021 37,344 55,901 (273) 422,838 Net income Other comprehensive income Comprehensive income Purchase of treasury stock Disposal of treasury stock Dividends Changes in ownership interest in subsidiaries Business combinations or business divestitures Transfer from other components of equity to retained earnings Change in scope of consolidation Other changes Total transactions with owners Net income Other comprehensive income Comprehensive income Purchase of treasury stock Disposal of treasury stock Dividends Changes in ownership interest in subsidiaries Business combinations or business divestitures Transfer from other components of equity to retained earnings Change in scope of consolidation Other changes Total transactions with owners － － － － － － － － － － － － － － － － － － － － － － 57,457 57,457 － － － － 0 － 43 － － － － 43 － 296 296 － － － － － － － － － － － － (7) 0 － － － － － － (7) － 6,844 6,844 － － － － － － － 64,103 － 64,103 － － － － 41 － 3,459 (13,853) (10,352) － 623 623 － － － － － － － － – 13 – Balance at March 31, 2022 37,344 55,945 (281) 476,589 Other components of equity Exchange differences on translation of foreign operations Effective portion of net change in fair value of cash flow hedges Financial assets measured at fair value through other comprehensive income Remeasurements of defined benefit plans Total Total equity attributable to owners of parent Non-controlling interests Total equity Balance at April 1, 2021 (18,029) 71 15,310 － (2,646) 513,164 30,736 543,900 － 65,222 64,103 65,222 2,534 503 66,637 65,725 65,222 129,325 3,038 132,363 － － － － － － － (7) 0 43 － － 41 － (7) 0 － － 46 14 – － － － 5 14 (13,853) (991) (14,844) (379) (335) (2,836) (623) (3,459) (2,836) (623) (3,459) (13,775) (1,350) (15,126) Balance at March 31, 2022 39,428 368 19,319 59,115 628,714 32,423 661,137 (4) Consolidated Statement of Cash Flows (Millions of yen) Year ended Mar. 31, 2021 Year ended Mar. 31, 2022 Cash flow from operating activities Profit before income taxes Depreciation and amortization Impairment losses Interest and dividends income Interest expenses Share of (profit) loss of investments accounted for using the equity method Loss (gain) on sale and retirement of property, plant and equipment, and intangible assets (Increase) decrease in trade receivables (Increase) decrease in inventories Increase (decrease) in trade payables (Increase) decrease in retirement benefit asset Increase (decrease) in retirement benefit liabilities Other Subtotal Interest received Dividends received Interest paid Income taxes refund (paid) Net cash provided by operating activities Cash flow from investing activities Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Purchase of investment Proceeds from sale and redemption of investments Payments for acquisition of subsidiaries Proceeds from sale of subsidiaries Payments for acquisition of businesses Other Net cash used in investing activities 77,706 86,380 2,022 (821) 12,554 (5,602) (295) 2,248 (766) (938) (394) 764 (529) 172,328 195 6,117 (11,548) (17,860) 149,231 (60,075) 1,434 (633) 252 (119) － (608) 64 (59,686) 91,611 92,435 1,216 (965) 11,601 (3,512) 449 (28,158) (6,764) 14,264 (580) 1,095 4,756 177,451 201 3,720 (10,842) (21,770) 148,760 (74,478) 1,516 (1,560) 6,083 (520) 0 － (1,900) (70,858) – 14 – (Millions of yen) Year ended Mar. 31, 2021 Year ended Mar. 31, 2022 Cash flow from financing activities Net increase (decrease) in short-term borrowings Net increase (decrease) in commercial papers Proceeds from long-term borrowings Repayment of long-term borrowings Proceeds from issuance of bonds Redemption of bonds Repayment of lease obligations Purchases of investments in subsidiaries not resulting in change in scope of consolidation Dividends paid Dividends paid to non-controlling interests Other Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Balance of cash and cash equivalents at beginning of fiscal year Increase (decrease) in cash and cash equivalents resulting from change of scope of consolidation Increase in cash and cash equivalents resulting from merger Balance of cash and cash equivalents at term-end (22,924) (3,000) 58,106 (101,049) － (10,000) (8,688) (2,834) (12,121) (681) 34 (103,159) 4,543 (9,070) 100,005 105 19 91,058 8,016 (10,000) 25,105 (86,466) 25,000 (15,000) (9,437) (276) (13,853) (991) (43) (77,946) 2,416 2,371 91,058 266 － 93,697 – 15 – (5) Notes to the Consolidated Financial Statements (Note regarding going concern assumption) Not applicable. (Segment information) (1) Outline of reportable segments The NSHD Group’s reportable segments are components of the NSHD Group about which separate financial information is available and which are evaluated regularly by the Board of Directors in deciding how to allocate management resources and in assessing performance. No grouping of operating segments has been carried out for reporting purposes. The NSHD Group conducts gas businesses in Japan and overseas, mainly for customers in the steel, chemical and electronics industries, and has built production and sales structures for its main products in Japan, the United States, Europe, and Asia & Oceania. In addition, the NSHD Group conducts the manufacture and sales of housewares such as stainless steel vacuum bottles. Therefore, the Company has established the following five reportable segments: Gas Business in Japan, Gas Business in the United States, Gas Business in Europe, Gas Business in Asia & Oceania, and Thermos Business. (Changes to reportable segments) In conjunction with its transition to a holding company structure, from the fiscal year under review, the Group has changed the reportable segments and adjustment amounts of the Company and certain consolidated subsidiaries to facilitate more appropriate evaluation of the management results of each segment. Furthermore, to facilitate the year-on-year comparisons, the figures for the previous fiscal year have been reclassified based on the changes to the reportable segments. * The Gas Business in Japan reportable segment has changed its name in Japanese, but the name remains the same in English. The principal products and services included in the five reportable segments are shown in the table below. Reportable segment Main products and services Gas Business in Japan Oxygen, nitrogen, argon, carbon dioxide, helium, hydrogen, acetylene, gas-related Gas Business in the United States Gas Business in Europe equipment, specialty gases (electronic material gases, pure gases, etc.), electronics-related equipment and installation, semiconductor manufacturing equipment, cutting and welding equipment, welding materials, plants and machinery, liquid petroleum gas (LPG) and related equipment, medical-use gases (oxygen, nitrous oxide, etc.), Gas Business in Asia & Oceania medical equipment, stable isotopes Thermos Business Houseware and consumer goods The accounting methods adopted for the reported operating segments are the same as the methods adopted to prepare the consolidated financial statements. Revenue from inter-segment transactions and transfers is based primarily on prevailing market prices. – 16 – (2) Figures of revenue and income (loss) by reportable segment FYE2021 (April 1, 2020 to March 31, 2021) (Millions of yen) Reportable segment Gas Business in Japan Gas Business in the United States Gas Business in Europe Gas Business in Asia & Oceania Thermos Business Total Adjustments (Note 1) Amounts on the Consolidated Statements of Income 341,990 189,994 160,035 102,036 23,964 818,021 217 818,238 13,675 18,182 42 2,179 25 34,105 (34,105) － Total 355,665 208,177 160,077 104,215 23,989 852,126 (33,887) 818,238 Segment income (Note 2) 29,889 23,129 21,015 8,921 5,168 88,124 (872) 87,251 19,534 29,106 28,962 7,379 1,328 86,310 Impairment losses 155 － － 765 － 921 69 － 86,380 921 Revenue Revenue from external customers Revenue from inter-segment transactions and transfers Other items Depreciation and amortization Share of profit (loss) of investments accounted for using the equity method 193 348 (11) (49) 2,360 2,842 0 2,842 Notes: 1. The (¥872) million negative adjustment for segment income is comprised of (¥49) million of intersegment eliminations and companywide expenses of (¥823) million that were not allocated to any particular reportable segment. These companywide expenses mainly comprise Group administration expenses at the Company that are not attributable to reportable segments. 2. Segment income represents core operating income, which is calculated as operating income excluding certain gains or losses attributable to non-recurring factors (non-recurring items) such as losses arising from business withdrawal or downsizing. – 17 – FYE2022 (April 1, 2021 to March 31, 2022) (Millions of yen) Reportable segment Gas Business in Japan Gas Business in the United States Gas Business in Europe Gas Business in Asia & Oceania Thermos Business Total Adjustments (Note 1) Amounts on the Consolidated Statements of Income 372,033 224,801 209,778 123,533 26,849 956,996 173 957,169 10,929 17,020 148 3,314 18 31,432 (31,432) － Total 382,963 241,822 209,926 126,848 26,867 988,428 (31,258) 957,169 Segment income (Note 2) 30,939 27,314 26,303 12,837 6,441 103,837 (1,127) 102,710 Revenue Revenue from external customers Revenue from inter-segment transactions and transfers Other items Depreciation and amortization Impairment losses Share of profit (loss) of investments accounted for using the equity method 4 298 － － 19,351 31,987 31,736 7,935 1,315 92,326 108 92,435 － 136 － 140 － 140 41 184 3,159 3,683 0 3,684 Notes:1. The (¥1,127) million negative adjustment for segment income is comprised of ¥102 million of intersegment eliminations and companywide expenses of (¥1,229) million that were not allocated to any particular reportable segment. These companywide expenses mainly comprise Group administration expenses at the Company that are not attributable to reportable segments. 2. Segment income represents core operating income, which is calculated as operating income excluding certain gains or losses attributable to non-recurring factors (non-recurring items) such as losses arising from business withdrawal or downsizing. – 18 – Reconciliation of segment income with profit before income taxes is shown in the table below. FYE2021 FYE2022 (April 1, 2020 to March 31, 2021) (April 1, 2021 to March 31, 2022) (Millions of yen) Segment income Share of profit (loss) of investments accounted for using the equity method Impairment losses Other Operating income Finance income Finance costs Profit before income taxes (Per-Share Information) Net income attributable to owners of the parent (¥ million) Average number of shares (thousand shares) Basic earnings per share (Yen) (Significant Subsequent Events) Not applicable. Note: Diluted earnings per share are not listed as there are no dilutive shares. 87,251 2,759 (1,100) (64) 88,846 1,424 (12,564) 77,706 55,214 432,752 127.59 Basic earnings per share and the basis for share appraisal are as follows. FYE2021 (April 1, 2020 to March 31, 2021) FYE2022 (April 1, 2021 to March 31, 2022) 102,710 (172) (1,075) (278) 101,183 2,192 (11,765) 91,611 64,103 432,749 148.13 – 19 –