Japan Lifeline : FYE March 2024 1Q Financial Results

FYE March 2024

Q1 Financial Results

Date of Release	：August 2, 2023
Financial Results Briefing	：August 3, 2023

Japan Lifeline Co., Ltd.

TSE Prime Market Ticker 7575

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Summary of Financials FYE March 2024 Q1

		Net sales		Operating Profit	Net Profit
			YoY			YoY			YoY
	Q1	12,954	(14)		3,176	+468	2,330		+384
	¥mln*1	Down 0.1%		¥mln	Up 17.3%	¥mln		Up +19.7%
	P/L Highlights
	✓ Net sales slightly decreased; the market bounced back and neurovascular sales progressed
		more than anticipated, offsetting the sales-decreasing factors that we were expecting.
		✓ OP and quarterly NP increased greatly; strong in-house sales and decreased inventory
		disposal and valuation losses contributed.
		Cardiac Rhythm Management Up 11.4% YoY	EP/Ablation Down 5.9% YoY
		(+) Strong S-ICD sales		(−) Contract change for Baylis products*2
	Sales Highlights	(+) Steady pacemaker sales		(+) AF*3 cases increased (YoY+9%)
	By Product	Cardiovascular Up 9.2% YoY		Gastrointestinal Down 36.4% YoY
		(+) Strong abdominal stent graft sales	(−) CI*5 business downsizing
		(+) NV*4 exceeding the plan by far	(+) New biliary-pancreatic product

Guidance

• No change to the initial full-year guidance disclosed on May 10, 2023

*1 Amounts less than one million yen are rounded down (same for subsequent slides)

*2 Exclusive distribution agreement with Baylis ended in March 2023. Since April 2023, we are in a sales partnership with Boston Scientific Japan. We provide sales support services and receive a 2 commission based on sales performance at facilities collaborating with BSJ.

*3 Atrial Fibrillation *4 Neurovascular *5 Coronary Intervention

Overview of Financials FYE March 2024 Q1

	FY 3/2024		FY 3/2023	Net Sales Down 0.1% YoY
¥mln	Q1	Yo Y	％	Q1	(−) Contract change for Baylis product [-¥914mln]
	Actual	Actual	(−) CI business downsizing [-¥302mln]
Net Sales	12,954	(14)	(0.1)	12,969	(+) AF-relatedin-house sales*1 grew to accomplish a
					record high on the quarterly basis [+¥633mln]
Gross Profit	7,887	+428	+5.8	7,458
(+) Strong CRM sales [+¥352mln]
Gross Profit %	60.9%			57.5%	(+) New area (NV&GI) sales progressing [+¥195mln]
SG&A	4,711	(39)	(0.8)	4,751	Operating Profit Up 17.3% YoY
SG&A %	36.4%			36.6%
		(+) Gross margin improved by 3.4pt to be 60.9% as in-
	3,176			2,707
Operating Profit	+468	+17.3	house sales ratio rose by 5.2pt to be 59.8%
					(+) A loss on disposal and write-downs of inventories
Operating Profit %	24.5%			20.9%
		decreased by ¥118mln
Quarterly net profit Attributable	2,330	+384	+19.7	1,946
(+) SG&A expenses decreased by ¥39mln
to Owners of Parent
Quarterly net profit Attributable	18.0%			15.0%	Quarterly Net Profit Up 19.7% YoY
to Owners of Parent%
In-house sales ratio	59.8%			54.6%
*1 EP catheter(EP Star), internal atrial cardioversion catheter (BeeAT), esophageal temperature monitoring catheter (Esophastar)	3

Operating Profit Analysis FYE March 2024 Q1

• Operating profit grew significantly; sales in both existing and new areas saw excellent progress, offsetting the negative impact from the contract change with Baylis Medical and the increase in sales-related expenses.

¥mln								YoY
	Loss on disposal and	Sales growth
	(new area)	One-off		Decrease in			Up +17.3%
	write-downs of	(GI 57, NV 42)	miscellane-
	inventories decreased		R&D expenses
	+99	ous income*1			(80)	(84)	+468
Sales growth
(existing area); Gross	+118	(251)	+149	+45	+11
margin improvement
(Excl. Baylis products)		Contract change				Increase in	Others
	+462	Decrease in depreciation	3,176
	sales-related
	for Baylis products
		expenses*2	expenses

Note: Impact on net sales was ¥914mln

+296

2,707

Sales & COGS-related Factors	SG&A-related Factors
FY3/2023 Q1 Actual	+428	+39	FY3/2024 Q1 Actual
Operating Profit			Operating Profit

*1	Miscellaneous income related to inventory transfer of Baylis products due to termination of distribution agreement.	4
*2	Changed depreciation method from declining-balance method to straight-line method since FYE March 2024

Consolidated Balance Sheet FYE March 2024 Q1

✓ Current Assets	Cash and deposits decreased due to income tax and dividend payments,
	acquisition of treasury shares
✓ Fixed Assets	Increased due to the acquisition of investment securities
✓ Net Assets	Decreased due to dividend payments and acquisition of treasury shares

Total Assets

Total Assets

¥mln

74,641

71,322

	Current Liabilities
	14,381
Current Assets	Fixed Liabilities 4,063
47,130

	Retained
Inventory
Earnings
13,142
42,741

Fixed Assets

27,510Net Assets

56,195

6,883

Interest-

bearing debt

Capital-to-Asset

Ratio

75.3％

		Current Liabilities
Current Assets	12,392
42,989		Fixed	Liabilities 3,948
Retained
Inventory
		Earnings
13,157
		42,106
Fixed Assets
28,332
Net Assets
		54,981

6,637

Interest-

bearing debt

Capital-to-Asset

Ratio

77.1％

End of March 2023

End of June 2023

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