August 11, 2020

Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2021

(Three Months Ended June 30, 2020)

ROHTO Pharmaceutical Co., Ltd.

[Japanese GAAP]

Company name:

Stock Exchange listing: TSE, First Section

Stock code:

4527

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

Representative:

Masashi Sugimoto, President and COO

Contact:

Masaya Saito, Vice President and Director

Telephone:

81-(0)6-6758-8223

Scheduled date of filing of Quarterly Report:

August 12, 2020

Scheduled date of dividend payment:

-

Supplementary materials for quarterly financial results:

Yes

Quarterly financial results meeting:

Yes (for institutional investors and analysts)

(All amounts are rounded down to the nearest million yen.)

1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2021 (April 1, 2020 - June 30, 2020)

(1) Consolidated results of operations

(Percentages represent year-on-year changes.)

Net sales

Operating income

Ordinary income

Profit attributable to

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Three months ended Jun. 30, 2020

38,641

(7.8)

3,878

0.4

4,105

4.6

1,937

(12.6)

Three months ended Jun. 30, 2019

41,910

3.1

3,860

(23.7)

3,924

(25.8)

2,217

(35.5)

Note: Comprehensive income (Millions of yen):

Three months ended Jun. 30, 2020:

721 (51.8%)

Three months ended Jun. 30, 2019:

1,498 (64.4%)

Basic net income

Diluted net income

per share

per share

Yen

Yen

Three months ended Jun. 30, 2020

16.99

16.94

Three months ended Jun. 30, 2019

19.46

19.38

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen

%

As of Jun. 30, 2020

206,492

139,269

66.9

As of Mar. 31, 2020

215,301

140,032

64.5

Reference: Shareholders' equity (Millions of yen):

As of Jun. 30, 2020: 138,224

As of Mar. 31, 2020: 138,899

2. Dividends

Dividend per share

1Q-end

2Q-end

3Q-end

Year-end

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended Mar. 31, 2020

-

13.00

-

13.00

26.00

Fiscal year ending Mar. 31, 2021

-

Fiscal year ending Mar. 31, 2021

13.00

-

14.00

27.00

(forecast)

Note: Revisions to the most recently announced dividend forecast: None

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2021 (April 1, 2020 - March 31, 2021)

(Percentages represent year-on-year changes.)

Net sales

Operating income

Ordinary income

Profit attributable to

Net income per share

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

Full year

183,000

(2.8)

21,800

(5.6)

22,100

(2.8)

14,000

(9.2)

122.73

Note: Revisions to the most recently announced consolidated forecast: None

* Notes

  1. Changes in significant subsidiaries during the period (changes in specific subsidiaries resulting in change in scope of consolidation): None
  2. Application of special accounting methods for preparation of quarterly consolidated financial statements: Yes

Note: Please refer to page 8 of the attachments "2. Quarterly Consolidated Financial Statements and Major Notes, (3) Notes to Quarterly Consolidated Financial Statements" for further information.

  1. Changes in accounting policies and accounting estimates, and restatements
    1. Changes in accounting policies due to revisions in accounting standards: None
    2. Changes in accounting policies other than 1) above: None
    3. Changes in accounting estimates: None
    4. Restatements: None

Note: Please refer to page 8 of the attachments "2. Quarterly Consolidated Financial Statements and Major Notes, (3) Notes to Quarterly Consolidated Financial Statements" for further information.

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

As of Jun. 30, 2020:

118,089,155 shares

As of Mar. 31, 2020:

118,089,155 shares

2) Number of shares of treasury shares at the end of the period:

As of Jun. 30, 2020:

4,018,988 shares

As of Mar. 31, 2020:

4,018,988 shares

3) Average number of shares outstanding during the period:

Three months ended Jun. 30, 2020:

114,070,167 shares

Three months ended Jun. 30, 2019:

113,971,083 shares

Note 1: This summary report is not subject to the quarterly review conducted by certified public accountants or audit firms.

Note 2: Cautionary statement with respect to forward-looking statements and other special items

Forecasts regarding future performance in these materials are based on assumptions judged to be valid and information available to the Company at the time the materials were created. These materials are not promises by the Company regarding future performance. Actual results of operations may differ significantly from the forecasts depending on various factors. For discussion of the assumptions and other factors considered by the Company in preparing the above projections, please refer to page 3 of the attachments "1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements."

ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the First Quarter of FY3/21

Contents of Attachments

1. Qualitative Information on Quarterly Consolidated Financial Performance

2

(1)

Explanation of Results of Operations

2

(2)

Explanation of Financial Position

3

(3)

Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements

3

2. Quarterly Consolidated Financial Statements and Major Notes

4

(1)

Quarterly Consolidated Balance Sheets

4

(2)

Quarterly Consolidated Statements of Income and Comprehensive Income

6

(3)

Notes to Quarterly Consolidated Financial Statements

8

Going Concern Assumption

8

Significant Changes in Shareholders' Equity

8

Additional Information

8

Segment Information

8

1

ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the First Quarter of FY3/21

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

In the first quarter of the current fiscal year, the global spread of Covid-19 sharply highlighted the economic sluggishness in Japan. In foreign countries as well, uncertainty about the future grew rapidly due to restrictions on economic activity resulting from orders to stay at home, discontinued corporate activity, and free mobility restrictions.

Under these circumstances, the Rohto Group has created the slogan of "Connect for Well-being," suggesting people around the world living energetically and happily each day, both physically and mentally, throughout the various stages of their lives. We are endeavoring to further increase corporate value.

In total, net sales decreased 7.8% year-on-year to 38,641 million yen. In Japan, sales of sunscreens, lip balm and contact lens products decreased partially because people stayed at home. On the other hand, high value-added products sold well and sales of a new subsidiary Nitten Pharmaceutical Co., Ltd. contributed to an increase as well. Overseas sales decreased due to the impact of the global spread of Coronavirus pandemic.

Profits benefited from an efficient use of selling, general and administrative expenses despite lower sales. As a result, operating income increased by 0.4% year-on-year to 3,878 million yen, ordinary income increased by 4.6% to 4,105 million yen, and profit attributable to owners of parent decreased 12.6% to 1,937 million yen.

Results by reportable segment are as follows.

Japan

Sales to customers decreased 1.6% year-on-year to 25,943 million yen.

There was a decline in demand from foreign tourists visiting Japan and also sales dropped for sunscreens, lip balm and contact lens products because people stayed at home. On the other hand, the beauty serum "Obagi C25 Serum Neo" and "Deoco" sold well. In addition, Nitten Pharmaceutical Co., Ltd., which became a subsidiary in the previous fiscal year, and another group company for pharmaceutical drugs contract development and manufacturing performed strongly.

Segment profit (operating income) rose 60.1% year-on-year to 2,890 million yen. The significant increase despite sluggish sales came from efforts to reduce costs and make efficient use of selling, general, and administrative expenses. As other factors, the fees of structural reforms, which we have been working on since 2018, were all paid out. Additionally, Nitten Pharmaceutical Co., Ltd., a new subsidiary to the Group, also contributed to profits.

America

Sales to customers decreased slightly, 0.5% year-on-year, to 2,130 million yen.

Although sales of eye drops were sluggish because people refrained from going out due to Covid-19, "Mentholatum Ointment" and e-commerce sales increased.

Segment profit (operating income) slightly bounced back to 69 million yen (from 172 million yen loss in prior first quarter) due to steady sales and efficient use of selling, general, and administrative expenses.

2

ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the First Quarter of FY3/21

Europe

Sales to customers decreased 21.0% year-on-year to 1,852 million yen.

Sales of the leading anti-inflammatory analgesic products and cosmetics significantly decreased due to lockdown for Covid-19.

Segment profit (operating income) was 58 million yen (compared with 21 million yen loss in prior first quarter) due to lower sales promotion and advertising expenses.

Asia

Sales to customers decreased 21.7% year-on-year to 8,295 million yen.

Although higher sales were achieved in ASEAN countries such as Indonesia and Vietnam, China market, our core revenue source, experienced a significant decline due to Covid-19. As a result, the total Asia segment ended up with a large fall in sales.

Segment profit (operating income) decreased 50.1% year-on-year to 1,054 million yen despite efforts to reduce sales promotion and advertising expenses in a difficult sales environment.

Others

In "Others," excluded from reportable segments, sales to customers decreased 7.7% year-on-year to 419 million yen. Segment profit (operating income) decreased 18.7% year-on-year to 29 million yen.

Note: The above amounts do not include consumption taxes.

(2) Explanation of Financial Position

Total assets at the end of the first quarter decreased 8,808 million yen from the end of the previous fiscal year to 206,492 million yen. This was mainly due to decreases of 889 million yen in cash and deposit, 4,818 million yen in notes and accounts receivable-trade, 6,088 million yen in electronically recorded monetary claims-operating, while there were increases of 1,836 million yen in merchandise and finished goods, 1,074 million yen in raw materials and supplies.

Total liabilities decreased 8,045 million yen from the end of the previous fiscal year to 67,223 million yen. This was mainly due to decreases of 3,267 million yen in accrued expenses, 2,773 million yen in income taxes payable, 1,427 million yen in provision for bonuses and 1,477 million yen in other current liabilities, while there was an increase of 1,189 million yen in notes and accounts payable-trade.

Net assets decreased 763 million yen from the end of the previous fiscal year to 139,269 million yen. This was mainly due to decreases of 199 million yen in foreign currency translation adjustment, while there was an increase of 454 million yen in retained earnings and 739 million yen in valuation difference on available-for-sale securities.

(3) Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements

There is no change in the full-year consolidated earnings forecast that was released on May 12, 2020. Results of operations for the first quarter trended generally in line with our plan.

Note: The forecasts are based on information available at the time this report was prepared. Actual results of operations may differ from the forecasts depending on various factors.

3

ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the First Quarter of FY3/21

2. Quarterly Consolidated Financial Statements and Major Notes

(1) Quarterly Consolidated Balance Sheets

(Millions of yen)

Prior Fiscal Year End

Current First Quarter End

(As of Mar. 31, 2020)

(As of Jun. 30, 2020)

Assets

Current assets

Cash and deposits

45,307

44,418

Notes and accounts receivable-trade

32,900

28,082

Electronically recorded monetary claims-

17,893

11,805

operating

Merchandise and finished goods

16,504

18,340

Work in process

3,218

2,895

Raw materials and supplies

10,903

11,977

Other

3,757

4,905

Allowance for doubtful accounts

(377)

(351)

Total current assets

130,108

122,074

Non-current assets

Property, plant and equipment

Buildings and structures, net

20,048

20,259

Other, net

28,412

27,722

Total property, plant and equipment

48,460

47,982

Intangible assets

Goodwill

3,373

3,162

Other

1,945

1,860

Total intangible assets

5,318

5,032

Investments and other assets

Investment securities

23,880

24,155

Other

10,258

10,046

Allowance for doubtful accounts

(2,725)

(2,788)

Total investments and other assets

31,413

31,412

Total non-current assets

85,192

84,418

Total assets

215,301

206,492

4

ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the First Quarter of FY3/21

(Millions of yen)

Prior Fiscal Year End

Current First Quarter End

(As of Mar. 31, 2020)

(As of Jun. 30, 2020)

Liabilities

Current liabilities

Notes and accounts payable-trade

11,324

12,514

Electronically recorded obligations-operating

2,919

2,791

Short-term loans payable

2,105

2,463

Accrued expenses

25,629

22,361

Income taxes payable

4,555

1,782

Provision for bonuses

2,643

1,216

Provision for directors' bonuses

40

7

Provision for sales returns

557

425

Provision for sales rebates

2,178

1,802

Other

10,161

8,684

Total current liabilities

62,117

54,050

Non-current liabilities

Long-term loans payable

5,190

5,224

Net defined benefit liability

4,317

4,298

Provision for loss on guarantees

1,957

1,926

Other

1,685

1,723

Total non-current liabilities

13,151

13,172

Total liabilities

75,269

67,223

Net assets

Shareholders' equity

Capital stock

6,504

6,504

Capital surplus

5,661

5,661

Retained earnings

131,985

132,440

Treasury shares

(4,935)

(4,935)

Total shareholders' equity

139,215

139,670

Accumulated other comprehensive income

Valuation difference on available-for-sale

4,144

4,883

securities

Foreign currency translation adjustment

(2,617)

(4,526)

Remeasurements of defined benefit plans

(1,843)

(1,803)

Total accumulated other comprehensive

(316)

(1,446)

income

Subscription rights to shares

382

382

Non-controlling interests

749

661

Total net assets

140,032

139,269

Total liabilities and net assets

215,301

206,492

5

ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the First Quarter of FY3/21

(2) Quarterly Consolidated Statements of Income and Comprehensive Income

Quarterly Consolidated Statements of Income

(For the Three-month Period)

(Millions of yen)

Prior First Quarter

Current First Quarter

(Apr. 1, 2019 - Jun. 30, 2019)

(Apr. 1, 2020 - Jun. 30, 2020)

Net sales

41,910

38,641

Cost of sales

17,551

16,412

Gross profit

24,359

22,229

Provision for sales returns

59

-

Reversal of provision for sales returns

-

132

Gross profit-net

24,299

22,361

Selling, general and administrative expenses

20,438

18,483

Operating income

3,860

3,878

Non-operating income

Interest income

113

93

Dividend income

211

186

Share of income of entities accounted for using equity

-

29

method

Gain on investments in partnership

2

-

Other

133

164

Total non-operating income

459

473

Non-operating expenses

Interest expenses

33

32

Share of loss of entities accounted for using equity

205

-

method

Foreign exchange losses

112

49

Provision for doubtful accounts

-

62

Loss on investments in partnership

2

71

Other

42

30

Total non-operating expenses

395

246

Ordinary income

3,924

4,105

Extraordinary income

Gain on sales of fixed assets

153

-

Total extraordinary income

153

-

Extraordinary losses

Impairment loss

125

Loss on valuation of investment securities

748

987

Loss on valuation of shares of subsidiaries and

92

-

associates

Provision for doubtful accounts

50

-

Provision for doubtful accounts for subsidiaries and

3

-

associates

Total extraordinary losses

894

1,112

Profit before income taxes

3,183

2,992

Income taxes

959

1,045

Profit

2,224

1,947

Profit attributable to non-controlling interests

6

9

Profit attributable to owners of parent

2,217

1,937

6

ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the First Quarter of FY3/21

Quarterly Consolidated Statements of Comprehensive Income

(For the Three-month Period)

(Millions of yen)

Prior First Quarter

Current First Quarter

(Apr. 1, 2019 - Jun. 30, 2019)

(Apr. 1, 2020 - Jun. 30, 2020)

Profit

2,224

1,947

Other comprehensive income

Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans, net of tax Share of other comprehensive income of entities accounted for using equity method

Total other comprehensive income Comprehensive income (Comprehensive income attributable to)

Comprehensive income attributable to owners of parent

Comprehensive income attributable to non-controlling interests

(414)

738

(379)

(1,998)

43

40

25

(5)

(725)

(1,225)

1,498

721

1,484

807

14

(85)

7

ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the First Quarter of FY3/21

(3) Notes to Quarterly Consolidated Financial Statements Going Concern Assumption

No reportable information.

Significant Changes in Shareholders' Equity

No reportable information.

Application of Special Accounting Methods for Preparation of Quarterly Consolidated Financial Statements

Calculation of tax expense

Tax expense was calculated by first reasonably estimating the effective tax rate after the application of tax effect accounting with respect to income before income taxes for the fiscal year, and multiplying that rate by the quarterly income before income taxes.

Additional Information

Influence of Covid-19

There are no significant changes to the accounting estimates assumptions, including the future spread of Covid-19 and the timing of its convergence, described in (Additional information) in the annual securities report for the previous fiscal year.

Segment Information

I. Prior First Quarter (Apr. 1, 2019 - Jun. 30, 2019)

1. Information related to net sales and profit or loss for each reportable segment

(Millions of yen)

Reportable segment (Note 1)

Reported in

quarterly

Others

Total

Adjustment

consolidated

Japan

America

Europe

Asia

Subtotal

(Note 2)

(Note 3)

statement of

income

(Note 4)

Net sales

(1) Sales to customers

26,377

2,140

2,346

10,591

41,456

453

41,910

-

41,910

(2) Inter-segment

864

268

8

896

2,038

12

2,050

(2,050)

-

sales and transfers

Total

27,242

2,408

2,354

11,488

43,494

466

43,960

(2,050)

41,910

Segment profit (loss)

1,805

(172)

(21)

2,114

3,726

35

3,761

98

3,860

Notes: 1. "America" includes the business activities of overseas entities in the U.S. and Canada, and others; "Europe" those in the U.K., Poland and South Africa; and "Asia" those in China, Taiwan, Vietnam, and others.

  1. "Others" is the business that is excluded from reportable segments, and includes the business activities of entities in Australia.
  2. "Adjustment" to segment profit (loss) of 98 million yen indicates elimination for intersegment transactions.
  3. Segment profit (loss) is adjusted with operating income reported in the quarterly consolidated statement of income.

2. Information concerning impairment loss on non-current assets or goodwill by reportable segments

No reportable information.

8

ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the First Quarter of FY3/21

II. Current First Quarter (Apr. 1, 2020 - Jun. 30, 2020)

1. Information related to net sales and profit or loss for each reportable segment

(Millions of yen)

Reportable segment (Note 1)

Reported in

quarterly

Others

Total

Adjustment

consolidated

Japan

America

Europe

Asia

Subtotal

(Note 2)

(Note 3)

statement of

income

(Note 4)

Net sales

(1) Sales to customers

25,943

2,130

1,852

8,295

38,222

419

38,641

-

38,641

(2) Inter-segment

776

184

11

797

1,769

8

1,778

(1,778)

-

sales and transfers

Total

26,720

2,315

1,863

9,092

39,992

427

40,419

(1,778)

38,641

Segment profit (loss)

2,890

(69)

58

1,054

3,933

29

3,963

(85)

3,878

Notes: 1. "America" includes the business activities of overseas entities in the U.S. and Brazil, and others; "Europe" those in the U.K., Poland and South Africa, and others; and "Asia" those in China, Taiwan, Vietnam, and others.

  1. "Others" is the business that is excluded from reportable segments, and includes the business activities of entities in Australia.
  2. "Adjustment" to segment profit (loss) of (85) million yen indicates elimination for intersegment transactions.
  3. Segment profit (loss) is adjusted with operating income reported in the quarterly consolidated statement of income.

2. Information concerning impairment loss on non-current assets or goodwill by reportable segments

Impairment loss on fixed assets was recognized in "Japan" segment. The amount of impairment loss was 125 million for the three months ended June 30, 2020.

  • This financial report is solely a translation of "Kessan Tanshin" (in Japanese, including attachments), which has been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers who prefer an English translation.

9

Attachments

  • Original document
  • Permalink

Disclaimer

Rohto Pharmaceutical Co. Ltd. published this content on 12 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 August 2020 08:02:14 UTC