Euglena : Summary of Consolidated Financial Results for the Year Ended December 31, 2021 (Based on Japanese GAAP)

Translation

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

Summary of Consolidated Financial Results

for the Year Ended December 31, 2021

(Based on Japanese GAAP)

															February 10, 2022
Company name:	Euglena Co., Ltd.
Stock exchange listing:	Tokyo
Stock code:	2931	URL	http://www.euglena.jp/
Representative:	Representative Director, President		Mitsuru Izumo
Inquiries:	Executive Officer, CFiO		Tomohiro Wakahara	TEL	03(3454)4907
Scheduled date of ordinary general meeting of shareholders:	March 26, 2022
Scheduled date to file Securities Report:				March 28, 2022
Scheduled date to commence dividend payments:		-
Preparation of supplementary material on financial results:		Yes
Holding of financial results meeting:					Yes	(for analysts and institutional investors)
									(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the year ended December 31, 2021 (from October 1, 2020 to December 31, 2021)
(1) Consolidated operating results									Percentages indicate year-on-year changes
			Net sales		Adjusted EBITDA*		Operating profit		Ordinary profit	Profit attributable
						to owners of parent
			Millions of yen		%	Millions of yen	%		Millions of yen	%		Millions of yen		%	Millions of yen	%
Year ended December 31, 2021		34,420		-	1,368	-		(6,565)	-		(6,354)		-	(5,038)	-
Year ended September 30, 2020		13,317		(4.7)	(732)	-		(1,807)	-		(1,457)		-	(1,486)	-

• Because management has shifted its focus to cash flow management, the Company now presents adjusted EBITDA as a key performance indicator to show its capacity for generating free cash flows.

Note 1: Comprehensive income Year ended December 31, 2021	¥(5,853)	million	[-%]
Year ended September 30, 2020	¥(1,483)	million	[-%]

Note 2: The fiscal year ended December 31, 2021 is an irregular 15-month period due to the change in the fiscal year end. Consequently, year- on-year changes are not presented.

Earnings per share

Diluted earnings per

Profit attributable to

Ordinary profit/total

Operating profit/net

share

owners of

assets

sales

parent/equity

Yen

Yen

%

%

%

Year ended December 31, 2021

(49.07)

-

(34.1)

(16.5)

(19.1)

Year ended September 30, 2020

(16.00)

-

(14.7)

(9.0)

(13.6)

Reference: Share of profit (loss) of entities accounted for using equity method

Year ended December 31, 2021

¥58 million

Year ended September 30, 2020

¥(27) million

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen

%

Yen

As of December 31, 2021

61,007

20,588

33.0

181.35

As of September 30, 2020

15,351

9,386

61.0

100.58

Reference: Equity

As of December 31, 2021

¥20,355 million

As of September 30, 2020

¥9,363 million

(3) Consolidated cash flows

Cash flows from

Cash flows from

Cash flows from

Cash and cash equivalents

operating activities

investing activities

financing activities

at end of period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Year ended December 31, 2021

1,378

(10,338)

12,062

9,820

Year ended September 30, 2020

(1,217)

(350)

162

6,253

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2. Cash dividends

			Annual dividends per share			Total cash	Dividend payout	Ratio of dividends
							to net assets
	1st quarter-end	2nd quarter-end	3rd quarter-end	4th quarter-end	Fiscal year-end	Total	dividends (Total)	ratio (Consolidated)	(Consolidated)
	Yen	Yen	Yen	Yen	Yen	Yen	Millions of yen	%	%
Year ended September 30, 2020	-	0.00	-	-	0.00	0.00	-	-	-
Year ended December 31, 2021	-	0.00	-	-	0.00	0.00	-	-	-
Year ending December 31, 2022	-	0.00	-	-	0.00	0.00		-
(Forecast)

3. Forecast of consolidated financial results for the year ending December 31, 2022 (from January 1, 2022 to December 31, 2022)

Percentages indicate year-on-year changes

	Net sales		Adjusted EBITDA*	Operating profit	Ordinary profit		Profit attributable to	Earnings per
			owners of parent	share
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen		%	Millions of yen	%	Yen
Full year	48,000		-	2,100	-	-	-	-		-	-	-	-

Reference: Adjusted EBITDA = EBITDA (Operating profit + Amortization of goodwill and Depreciation) + Subsidy income + Stock-related remuneration + Inventory step-up effect.

4. Notes

(1)	Changes in significant subsidiaries during the year ended December 31, 2021	Yes
	(changes in specified subsidiaries resulting in the change in scope of consolidation):
(2)	Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
	Changes in accounting policies due to revisions to accounting standards and other regulations:	No
	Changes in accounting policies due to other reasons:	No
	Changes in accounting estimates:	No
	Restatement of prior period financial statements:	No

(3) Number of issued shares (common shares)

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

	As of December 31, 2021	111,161,886	shares	As of September 30, 2020	93,153,322	shares
Number of treasury shares at the end of the period
	As of December 31, 2021	20,431	shares	As of September 30, 2020	56,459	shares
Average number of shares during the period
	Year ended December 31, 2021	102,692,699	shares	Year ended September 30, 2020	92,900,464	shares

• Financial results reports are exempt from review conducted by certified public accountants or an audit corporation.
• Proper use of financial results forecast, and other special matters
  The forward-looking statements, including the earnings forecasts, shown in this document are based on information currently available to the Company and on certain assumptions deemed to be reasonable.

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Consolidated financial statements

Consolidated balance sheets

			(Thousands of yen)
		As of September 30, 2020	As of December 31, 2021
Assets
Current assets
Cash and deposits	6,253,900	9,900,624
Notes and accounts receivable - trade	1,076,070	3,182,255
Securities	-	285,340
Merchandise and finished goods	805,920	4,572,465
Work in process	44,636	744,762
Raw materials and supplies	949,842	1,144,292
Other	669,477	673,020
Allowance for doubtful accounts	(8,292)	(64,383)
Total current assets	9,791,554	20,438,377
Non-current assets
Property, plant and equipment
Buildings and structures	3,068,137	7,314,680
Machinery, equipment and vehicles	1,488,471	3,375,030
Tools, furniture and fixtures	391,575	1,396,667
Land	900,520	2,499,773
Leased assets	25,946	109,588
Construction in progress	6,253	5,457
Accumulated depreciation	(2,576,423)	(7,849,249)
Total property, plant and equipment	3,304,480	6,851,949
Intangible assets
Goodwill	961,239	13,034,671
Customer-related assets	285,941	17,011,026
Other	312,416	1,858,079
Total intangible assets	1,559,597	31,903,777
Investments and other assets
Investment securities	319,946	397,252
Guarantee deposits	283,979	317,686
Deferred tax assets	8,291	740,246
Other	83,248	395,616
Allowance for doubtful accounts	-	(37,173)
Total investments and other assets	695,465	1,813,629
Total non-current assets	5,559,543	40,569,356
Total assets		15,351,098	61,007,734

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			(Thousands of yen)
		As of September 30, 2020	As of December 31, 2021
Liabilities
Current liabilities
Notes and accounts payable - trade	260,402	1,082,104
Short-term borrowings	547,425	2,287,746
Accounts payable - other	935,975	3,715,753
Lease obligations	291	8,898
Income taxes payable	8,500	486,483
Provision for bonuses	28,800	267,344
Provision for point card certificates	22,200	1,202,169
Provision for business restructuring	-	31,319
Asset retirement obligations	24,620	-
Other	332,185	1,552,228
Total current liabilities	2,160,401	10,634,047
Non-current liabilities
Long-term borrowings	3,216,532	22,598,636
Lease obligations	24	14,285
Provision for retirement benefits for directors (and other	-	52,647
officers)
Retirement benefit liability	19,839	390,482
Asset retirement obligations	399,080	427,027
Deferred tax liabilities	164,805	6,297,173
Other	3,656	4,574
Total non-current liabilities	3,803,938	29,784,827
Total liabilities	5,964,339	40,418,874
Net assets
Shareholders' equity
Share capital	7,323,548	13,888,478
Capital surplus	2,229,643	11,602,445
Retained earnings	(84,993)	(5,273,240)
Treasury shares	(94,737)	(34,282)
Total shareholders' equity	9,373,460	20,183,400
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	(1,802)	(2,121)
Foreign currency translation adjustment	(8,227)	(20,625)
Remeasurements of defined benefit plans	-	(5,035)
Total accumulated other comprehensive income	(10,029)	(27,782)
Share acquisition rights	13,556	427,696
Non-controlling interests	9,771	5,545
Total net assets	9,386,758	20,588,859
Total liabilities and net assets		15,351,098	61,007,734

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Consolidated statements of income and consolidated statements of comprehensive income Consolidated statements of income

			(Thousands of yen)
		Fiscal year ended	Fiscal year ended
		September 30, 2020	December 31, 2021
Net sales	13,317,316	34,420,387
Cost of sales	3,825,098	12,951,062
Gross profit	9,492,218	21,469,324
Selling, general and administrative expenses	11,299,938	28,034,551
Operating loss	(1,807,720)	(6,565,226)
Non-operating income
Interest income	2,008	379
Subsidy income	329,227	334,268
Commission income	12,000	45,705
Foreign exchange gains	2,054	5,121
Share of profit of entities accounted for using equity method	-	58,412
Surrender value of insurance policies	-	143,160
Other	43,949	107,706
Total non-operating income	389,239	694,753
Non-operating expenses
Interest expenses	8,957	306,315
Share issuance costs	-	160,160
Share of loss of entities accounted for using equity method	27,492	-
Other	2,759	17,385
Total non-operating expenses	39,208	483,861
Ordinary loss	(1,457,689)	(6,354,334)
Extraordinary income
Gain on reversal of share acquisition rights	1,662	12,296
Gain on sale of non-current assets	365	299
Gain on sale of investment securities	36,278	-
Gain on change in equity	12,856	-
Gain on step acquisitions	-	174,000
Total extraordinary income	51,162	186,596
Extraordinary losses
Loss on sale of non-current assets	-	256
Impairment losses	26,672	54,896
Loss on change in equity	-	5,791
Loss on valuation of investment securities	1,027	42,542
Loss on extinguishment of tie-in shares	-	4,275
Provision for business restructuring	-	461,952
Total extraordinary losses	27,699	569,715
Loss before income taxes	(1,434,226)	(6,737,453)
Income taxes - current	153,443	492,342
Income taxes - deferred	(101,170)	(1,392,464)
Total income taxes	52,272	(900,121)
Loss	(1,486,498)	(5,837,331)
Profit (loss) attributable to non-controlling interests	188	(798,390)
Loss attributable to owners of parent		(1,486,686)	(5,038,941)

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