The original disclosure in Japanese was released on Nov. 9, 2023 at 15:30 (GMT+9)

Consolidated Financial Statements for the Second Quarter Ended September 30, 2023 FY2024 (April 1, 2023 - March 31, 2024) [UNAUDITED]

Company name:

Takara Holdings Inc.

Stock exchange listings:

Tokyo Stock Exchange (PRIME section)

Code number:

2531

URL:

https://www.takara.co.jp/

Company representative:

Mutsumi Kimura, President

Contact:

Masakazu Usami, General Manager of Public Relations& Investor Relations Dept.

TEL：(075)241-5124

Quarterly statement filing date(as planned):

November 13, 2023

Notes:

1. The accompanying financial statements have been prepared in accordance with accounting principles and practices generally accepted

in Japan.

2. Amounts are rounded down to the nearest million yen.

1. Results for the six months ended September 30, 2023 (April 1, 2023 - September 30, 2023)

  1. Consolidated operating results

Note: Percentages indicated changes from the same period of the previous fiscal year.

Six months ended

Six months ended

September 30, 2023

September 30, 2022

(Millions of yen)

(%)

(Millions of yen)

(%)

Net sales

163,172

(0.7)

164,279

16.3

Operating income (loss)

12,464

(36.5)

19,614

(9.3)

Ordinary income (loss)

13,032

(34.7)

19,972

(8.7)

Net income (loss) attributable to owners of the parent

8,043

(26.0)

10,873

8.2

Net income (loss) per share (Yen)

40.69

55.00

Fully diluted net income per share (Yen)

-

-

Note: Comprehensive income (loss)

26,272

(13.0)

30,213

43.5

(2) Consolidated financial position

As of September 30, 2023

As of March 31, 2023

(Millions of yen)

(Millions of yen)

Total assets

420,865

399,174

Net assets

272,071

255,318

Equity ratio (%)

52.2

51.1

(Reference) Equity

219,688

203,951

2. Dividends

Dividend per share (Yen)

Year ended March 31,

Year ending March 31,

Year ending March 31,

2023

2024

2024 (Forecast)

First quarter end

-

-

-

Second quarter end

-

-

-

Third quarter end

-

-

-

Year end

38.00

-

27.00

Annual

38.00

-

27.00

Note: Correction of dividend forecast from the most recent dividend forecast: No

3. Forecast for the year ending March 31, 2024 (April 1, 2023 - March 31, 2024)

Note: Percentages indicated changes from the same period of the previous fiscal year.

Year ending March 31, 2024

(Millions of yen)

(%)

Net sales

341,000

(2.8)

Operating income (loss)

21,700

(42.8)

Ordinary income (loss)

22,500

(41.9)

Net income (loss) attributable to owners of the parent

15,000

(29.3)

Net income per share (Yen)

75.87

Note: Correction of financial forecast from the most recent financial forecast: Yes

4. Others

  1. Material changes in subsidiaries during this period

(Changes in specified subsidiaries that caused a change in the scope of consolidation): No

  1. Accounting procedures specific to quarterly consolidated financial statements ： No
  2. Changes in accounting policies, accounting estimates and retrospective restatement
    1. Changes based on revisions of accounting standard: No
    2. Changes other than ones based on revisions of accounting standard: No
    3. Changes in accounting estimates: No
    4. Restatement: No
  4. Number of outstanding shares (common stock)
    1. Number of outstanding shares at the end of each period (Treasury stocks are included):

As of September 30, 2023 ：

199,699,743 shares

As of March 31, 2023 ：

199,699,743 shares

2)

Number of treasury stocks at the end of each period:

As of September 30, 2023 ：

1,995,673 shares

As of March 31, 2023 ：

1,995,612 shares

3)

Average number of outstanding shares in each period

Six months ended September 30, 2023

：

197,704,122 shares

Six months ended September 30, 2022

：

197,704,145 shares

Contents of the attached document

1. Qualitative Information for the Six Months Ended September 30, 2023 …………………………………………..……

2

(1) Consolidated Financial Results ……………………………………………………………………….………………

2

(2) Consolidated Financial Position ………………………………………………………………………………………

3

(3) Qualitative Information Regarding Consolidated Forecasts …………………………………..………………………

4

2. Consolidated Quarterly Financial Statements and Primary Notes …………………………………………………………

6

(1) Consolidated Balance Sheets ……………………………………………………………………….…………………

6

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ………………………

8

(Consolidated Statements of Income) …………………………………………………………………………..……

8

(For the Six Months Ended September 30, 2023 and 2022)

(Consolidated Statements of Comprehensive Income) ………………………………………………………………

9

(For the Six Months Ended September 30, 2023 and 2022)

(3) Consolidated Statements of Cash Flows…………………………………………………………….…………………

10

(4) Notes to Consolidated Financial Statements …………………………………………………………….……………

11

(Notes on Premise of Going Concern) ………………………………………………………………………………

11

(Notes on Material Changes in Shareholders' Equity) ………………………………………………………………

11

(Segment Information) ………………………………………………………………………………………………

11

(Significant Subsequent Events)

12

○ Supplement for the Consolidated Quarterly Financial Statements

－ 1 －

1. Qualitative Information for the Six Months Ended September 30, 2023

  1. Consolidated Financial Results

In the six months ended September 30, 2023, net sales decreased 0.7% year on year to ¥163,172 million, gross profit decreased 4.2% year on year to ¥55,459 million, and SG&A expenses increased 12.4% year on year to ¥42,995 million. Operating income decreased 36.5% year on year to ¥12,464 million, ordinary income decreased 34.7% year on year to ¥13,032 million, and net income attributable to owners of the parent decreased 26.0% year on year to ¥8,043 million.

Results by business segment were as follows.

[Takara Shuzo]

In the six months ended September 30, 2023, although sales of light-alcohol refreshers and raw alcohol increased year on year, shochu, sake, and Hon Mirin decreased.

As a result, net sales for Takara Shuzo decreased 1.0% year on year to ¥61,190 million. Cost of sales decreased 5.3% year on year to ¥45,216 million, mainly due to a change in the sales mix, despite the continued impact of rising raw material prices. Gross profit increased 13.6% year on year to ¥15,974 million. SG&A expenses were in line with the equivalent period of the previous fiscal year, increasing 0.2% year on year to ¥12,021 million. Operating income was up 91.9% year on year to ¥3,952 million.

[Takara Shuzo International Group]

In the six months ended September 30, 2023, net sales of the Overseas Alcoholic Beverages Business increased year on year mainly due to continued growth in sales of whiskey in the U.S. and U.K. as well as an increase in sales of sake. Net sales of the Japanese Food Wholesale Business in overseas markets also increased as the eating and drinking establishment market continued to perform well, with the development of new business bases also contributing positively.

As a result, net sales for the Takara Shuzo International Group increased 21.1% year on year to ¥77,164 million. Cost of sales increased 20.7% year on year to ¥52,786 million in line with the increase in net sales. Consequently, gross profit increased 22.0% year on year to ¥24,377 million. SG&A expenses were up 26.5% year on year to ¥18,120 million, primarily due to an increase in personnel expenses and transportation costs, and operating income was up 10.6% year on year to ¥6,256 million.

[Takara Bio Group]

In the six months ended September 30, 2023, sales of testing-related reagents decreased due to changes in the legal categorization of COVID-19. As a result, net sales for the Takara Bio Group decreased 41.3% year on year to ¥19,116 million. Cost of sales decreased 45.3% year on year to ¥5,772 million, mainly due to a decrease in net sales. Consequently, gross profit decreased 39.4% year on year to ¥13,343 million. SG&A expenses were up 7.0% year on year to ¥11,933 million, primarily due to increases in personnel expenses and R&D expenses. Operating income decreased 87.0% year on year to ¥1,410 million.

[Other]

In the six months ended September 30, 2023, net sales of the Other segment decreased 4.6% year on year to ¥14,866 million due to decreased sales in the transportation business and the printing business. Cost of sales decreased 5.0% year on year to ¥12,729 million. Consequently, gross profit decreased 2.2% year on year to ¥2,136 million. SG&A expenses increased 0.2% year on year to ¥943 million, and operating income was down 4.0% year on year to ¥1,193 million.

－ 2 －

Breakdown of sales results by product category

Equivalent Period of

Period under Review

Previous Fiscal Year

YoY

Segment

(From April 1, 2023,

(From April 1, 2022,

Comparison

to September 30, 2023)

to September 30, 2022)

Product category

Amount (Millions of yen)

Amount (Millions of yen)

(%)

Takara Shuzo

Shochu

19,998

17,469

(12.6)

Sake

4,697

4,252

(9.5)

Light-alcohol refreshers

20,525

21,782

6.1

Other alcoholic beverages

2,823

2,750

(2.6)

Hon Mirin

4,710

4,546

(3.5)

Other seasonings

4,321

4,447

2.9

Raw alcohol, etc.

4,743

5,941

25.2

Total

61,820

61,190

(1.0)

Takara Shuzo International Group

Overseas Alcoholic

8,287

10,262

23.8

Beverages Business

Japanese Food

Wholesales Business in

56,421

68,084

20.7

overseas markets

Other

2,812

215

(92.4)

Elimination of intra-Group

(3,791)

(1,397)

－

transaction on consolidation

Total

63,730

77,164

21.1

Takara Bio Group

Reagents

27,565

14,949

(45.8)

Instruments

694

411

(40.7)

CDMO

3,183

2,702

(15.1)

Gene therapy

1,144

1,052

(8.0)

Total

32,587

19,116

(41.3)

Reported segment total

158,138

157,471

(0.4)

Other

15,577

14,866

(4.6)

Segment total

173,715

172,338

(0.8)

Sales not allocated to

business segments and

(9,435)

(9,165)

－

intersegment transactions

Total

164,279

163,172

(0.7)

Note: 1. Amounts include alcohol tax.

(2) Consolidated Financial Position

As of September 30, 2023, current assets were ¥240,349 million, a decrease of ¥1,164 million compared with that at the end of the previous fiscal year. This was primarily due to a decrease in cash and deposits of ¥7,453 million, despite increases in notes and accounts receivable-trade and merchandise and finished goods of ¥1,646 million and ¥3,189 million, respectively.

Noncurrent assets were ¥180,516 million, an increase of ¥22,855 million compared with that at the end of the previous fiscal year. This was primarily due to increases in property, plant and equipment of ¥11,856 million, mainly due to increases in buildings and structures and construction in progress, intangible assets of ¥1,048 million, and investments and other assets of ¥9,950 million due to an increase in the market valuation of investment securities.

As a result, total assets were ¥420,865 million, an increase of ¥21,691 million compared with that at the end of the previous fiscal year.

As of September 30, 2023, current liabilities were ¥76,847 million, an increase of ¥9,392 million compared with that at the end of the previous fiscal year. This was primarily due to increases in short-term loans payable of ¥5,160 million, current portion of bonds of ¥5,000 million, and accrued alcohol tax of ¥3,458, despite a decrease in other under current liabilities of

－ 3 －

¥4,698 million due to decreases in accrued payments. Noncurrent liabilities were ¥71,946 million, a decrease of ¥4,454 million compared with that at the end of the previous fiscal year. This was primarily due to decreases in bonds payable of ¥5,000 million and long-term loans payable of ¥4,703 million, despite an increase in other under noncurrent liabilities of ¥5,303 million.

As a result, total liabilities were ¥148,794 million, an increase of ¥4,938 million compared with that at the end of the previous fiscal year.

As of September 30, 2023, total net assets were ¥272,071 million, an increase of ¥16,753 million compared with that at the end of the previous fiscal year. This was primarily due to increases in valuation difference on available-for-sale securities of ¥4,688 million and foreign currency translation adjustment of ¥10,416 million due to the ongoing weakening of the yen.

As a result, the equity ratio totaled 52.2%, compared with 51.1% at the end of the previous fiscal year.

In the six months ended September 30, 2023, net cash provided by operating activities increased ¥7,691 million year on year to ¥14,922 million primarily due to income before income taxes of ¥12,984 million, depreciation and amortization of ¥4,796 million, an increase in accrued alcohol tax of ¥3,458 million, a decrease in other current liabilities of ¥2,453 million, and ¥3,319 million in income taxes paid.

Net cash used in investing activities resulted in expenditure of ¥15,796 million, an increase in expenditure of ¥6,243 million compared to the same period of the previous fiscal year primarily due to purchase of property, plant and equipment and intangible assets of ¥14,540 million.

Net cash used in financing activities resulted in expenditure of ¥9,711 million, a decrease in expenditure of ¥11,913 million compared to the same period of the previous fiscal year primarily due to cash dividends paid of ¥7,497 million.

As a result, cash and cash equivalents as of September 30, 2023, including effect of exchange rate change on cash and cash equivalents, stood at ¥84,446 million, down ¥7,339 million from the previous fiscal year-end.

(3) Qualitative Information Regarding Consolidated Forecasts

The Company has revised the full-year consolidated results forecasts published on May 11, 2023 in consideration of recent performance trends.

With regard to the outlook for each segment for the full year ending March 31, 2024, we expect to fall short of our previous forecast owing to lower than expected sales volumes of Hon Mirin, raw alcohol, etc., for Takara Shuzo. With regard to operating income, although net sales will not meet our targets, we expect to exceed our previous forecast owing to efforts to decrease our SG&A expenses in spite of improvements we have made in terms of advertising expenses which we have achieved through efforts to keep a lid on rising costs and through efficient use of sales promotion expenses.

With regard to the Takara Shuzo International Group, we expect that net sales will fall short of our previous forecast owing to an ongoing slowdown of consumer spending in response to inflation. We also expect operating income to fall short of our previous forecasts owing to a predicted failure to meet our targets for gross profit as a result of a drop in net sales.

With regard to net sales of the Takara Bio Group, we expect that sales from the business for reagents and instruments and the CDMO business (genetic analysis) will fall short of our previous forecast owing to a slump in the global life sciences R&D market in response to prolonged inflation and an economic downturn and because of increased price competition for products and services. We also expect operating income to fall short of our previous forecasts owing to a predicted failure to meet our targets for gross profit as a result of a drop in net sales.

As a result of the above, net sales, operating income, and ordinary income are all expected to fall short of our previous forecasts. We have not made any changes to our previous forecast for net income attributable to owners of the parent as extraordinary income will be recorded due to sales of cross-shareholdings. The details of the consolidated results forecasts and the results forecasts for each segment are described on pages 10/15-13/15 in "Supplement for the Consolidated Financial Statements."

Note: Today (November 9, 2023), the Company subsidiary Takara Bio Inc. (listed on the Prime Market of the Tokyo Stock Exchange with securities code number 4974) also revised its consolidated results forecasts for the full-year consolidated results forecast ending March 31, 2024, published in the financial statements on May 11, 2023.

－ 4 －

(Full-Year Consolidated Results Forecasts for the fiscal year ending March 31, 2024)

Net income

Net sales

Operating income

Ordinary income

attributable to

Net income per

owners of the

share

parent

Previous forecast (A)

(Millions of yen)

(Millions of yen)

(Millions of yen)

(Millions of yen)

(Yen)

355,000

26,300

26,800

15,000

75.87

(Published May 11, 2023)

Revised forecast (B)

341,000

21,700

22,500

15,000

75.87

Difference (B - A)

(14,000)

(4,600)

(4,300)

－

－

Difference (%)

(3.9)

(17.5)

(16.0)

－

－

Reference：Business

results for previous fiscal

350,665

37,945

38,706

21,206

107.26

year (Ended March 31,

2023)

－ 5 －

2. Consolidated Quarterly Financial Statements and Primary Notes

  1. Consolidated Balance Sheets

(Millions of Yen)

As of Mar. 31, 2023

As of Sept. 30, 2023

Assets

Current assets

Cash and deposits

96,820

89,367

Notes and accounts receivable-trade

69,717

71,363

Merchandise and finished goods

57,812

61,002

Work in process

1,718

2,132

Raw materials and supplies

7,372

7,577

Other

8,765

9,589

Allowance for doubtful accounts

(694)

(684)

Total current assets

241,513

240,349

Noncurrent assets

Property, plant and equipment

88,890

100,747

Intangible assets

Goodwill

10,668

11,505

Other

5,262

5,474

Total intangible assets

15,931

16,980

Investments and other assets

Investment securities

30,573

37,373

Other

22,328

25,478

Allowance for doubtful accounts

(64)

(63)

Total investments and other assets

52,838

62,789

Total noncurrent assets

157,661

180,516

Total assets

399,174

420,865

－ 6 －

(Millions of Yen)

As of Mar. 31, 2023

As of Sept. 30, 2023

Liabilities

Current liabilities

Notes and accounts payable-trade

21,775

22,126

Short-term loans payable

4,919

10,079

Current portion of bonds

－

5,000

Accrued alcohol tax

5,815

9,274

Accrued expenses

6,368

6,019

Income taxes payable

2,220

2,824

Provision

3,622

3,488

Other

22,733

18,035

Total current liabilities

67,454

76,847

Noncurrent liabilities

Bonds payable

20,000

15,000

Long-term loans payable

15,186

10,482

Net defined benefit liability

8,925

8,872

Other

32,288

37,591

Total noncurrent liabilities

76,401

71,946

Total liabilities

143,856

148,794

Net assets

Shareholders' equity

Capital stock

13,226

13,226

Capital surplus

1,994

1,994

Retained earnings

163,825

164,356

Treasury stock

(1,682)

(1,682)

Total shareholders' equity

177,363

177,893

Accumulated other comprehensive income

Valuation difference on available-for-sale securities

12,974

17,663

Deferred gains or losses on hedges

286

290

Foreign currency translation adjustment

13,686

24,103

Remeasurements of defined benefit plans

(359)

(261)

Total accumulated other comprehensive income

26,588

41,795

Noncontrolling interests

51,366

52,382

Total net assets

255,318

272,071

Total liabilities and net assets

399,174

420,865

－ 7 －

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

(Consolidated Statements of Income)

(For the Six Months Ended September 30, 2023 and 2022)

(Millions of Yen)

FY2022

FY2023

(Apr. 1, 2022 -

(Apr. 1, 2023 -

Sept. 30, 2022)

Sept. 30, 2023)

Net sales

164,279

163,172

Cost of sales

106,400

107,713

Gross profit

57,879

55,459

Selling, general and administrative expenses

38,264

42,995

Operating income

19,614

12,464

Nonoperating income

Dividends income

445

496

Other

452

551

Total nonoperating income

898

1,048

Nonoperating expenses

Interest expenses

149

184

Share of loss of entities accounted for using equity

113

－

method

Foreign exchange losses

113

－

Provision for loss on litigation

－

109

Other

163

185

Total nonoperating expenses

539

480

Ordinary income

19,972

13,032

Extraordinary income

Gain on sale of noncurrent assets

252

28

Gain on sale of investment securities

－

8

Insurance claim income

652

－

National subsidies

63

－

Total extraordinary income

967

36

Extraordinary loss

Loss on sale and retirement of noncurrent assets

45

84

Loss on tax purpose reduction entry of noncurrent

63

－

assets

Other

16

－

Total extraordinary losses

125

84

Income before income taxes

20,815

12,984

Income taxes-current

5,405

4,290

Income taxes-deferred

580

(337)

Total income taxes

5,985

3,953

Net income

14,829

9,031

Net income attributable to the noncontrolling interest

3,956

988

Net income attributable to owners of the parent

10,873

8,043

－ 8 －

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Takara Holdings Inc. published this content on 28 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 November 2023 08:11:16 UTC.