Rohto Pharmaceutical : 【Delayed】Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2023

(Percentages represent year-on-yearchanges.)

August 9, 2022

Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2023

(Three Months Ended June 30, 2022)

Company name:	ROHTO Pharmaceutical Co., Ltd.
Stock code:	4527
Representative:	Masashi Sugimoto, President and COO
Contact:	Masaya Saito, Vice President and CFO
Telephone:	81-(0)6-6758-8223

Scheduled date of filing of Quarterly Report: Scheduled date of dividend payment:

Supplementary materials for quarterly financial results: Quarterly financial results meeting:

[Japanese GAAP]

Stock Exchange listing: Tokyo Stock Exchange

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

August 10, 2022

-

Yes

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, 2023 (April 1, 2022 - June 30, 2022)

(1) Consolidated results of operations

	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, 2022	52,255		23.5	8,302	37.8	9,655	47.7	6,994	47.3
Three months ended Jun. 30, 2021	42,315		-	6,026	-	6,539	-	4,749	-

Note: Comprehensive income (Millions of yen):	Three months ended Jun. 30, 2022:	13,422	86.6%
		Three months ended Jun. 30, 2021:	7,194	- %
	Basic net income	Diluted net income
	per share		per share
		Yen	Yen
Three months ended Jun. 30, 2022		61.32	61.14
Three months ended Jun. 30, 2021		41.64	41.52

Note 1: The Company adopted the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) from the beginning of the first quarter of the previous fiscal year, and the figures for the first quarter of the fiscal year ended March 31, 2022 are after the adoption of these accounting standards, therefore, year-on-year percentage changes are not shown.

Note 2: The provisional accounting treatment for the business combinations was finalized at the end of the fiscal year ended March 31, 2022. The figures for the first quarter of the fiscal year ended March 31, 2022 have been restated accordingly.

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio
	Millions of yen	Millions of yen	%
As of Jun. 30, 2022	293,159	194,847	64.4
As of Mar. 31, 2022	274,627	183,832	64.8
Reference: Equity (Millions of yen):	As of Jun. 30, 2022: 188,749	As of Mar. 31, 2022: 177,905

2. Dividends

				Dividend per share
	1Q-end		2Q-end	3Q-end	Year-end	Total
		Yen	Yen	Yen	Yen	Yen
Fiscal year ended Mar. 31, 2022		-	15.00	-	21.00	36.00
Fiscal year ending Mar. 31, 2023		-
Fiscal year ending Mar. 31, 2023			20.00	-	20.00	40.00
(forecast)
Note: Revisions to the most recently announced dividend forecast: Yes

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 - March 31, 2023)

(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	225,000		12.7	30,000	2.2	31,000		6.6	21,500		2.3	188.48
Note: Revisions to the most recently announced consolidated forecast: Yes

* 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
2. 1. Changes in accounting policies due to revisions in accounting standards: Yes
   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
2. 1. Number of shares outstanding at the end of the period (including treasury shares):

As of Jun. 30, 2022:	118,089,155 shares	As of Mar. 31, 2022:	118,089,155 shares
2) Number of shares of treasury shares at the end of the period:
As of Jun. 30, 2022:	4,019,390 shares	As of Mar. 31, 2022:	4,019,262 shares
3) Average number of shares outstanding during the period:
Three months ended Jun. 30, 2022:	114,069,828 shares	Three months ended Jun. 30, 2021:	114,070,111 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 FY3/23

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
	Application of Special Accounting Methods for Preparation of Quarterly Consolidated Financial Statements	8
	Changes in Accounting Policies	8
	Additional Information	8
	Segment Information	9

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ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the First Quarter of FY3/23

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

During the first three months of the current fiscal year, the Japanese economy showed signs of a gradual recovery, although conditions remained challenging due to the impact of the COVID-19 pandemic. In the overseas markets, the situation remains unpredictable due to soaring crude oil prices and high raw material costs resulting from China's zero-COVID-19 policy and Russia's invasion of Ukraine.

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. To this end, we are working toward the realization of the "Management Vision 2030".

Consequently, the consolidated net sales increased significantly to 52,255 million yen (up 23.5% year-on-year). In Japan, sales increased due to the progress of vaccination and the recovery of consumer confidence with the resumption of economic activities, and product proposals that meet customers' needs. Overseas, sales also increased due to a recovery in economic activity, despite surging raw material prices and sharp exchange rate fluctuations.

Regarding profits, in addition to a significant increase in revenue, efforts to efficiently use selling, general and administrative expenses resulted in substantial increases in all profit categories: operating income amounted to 8,302 million yen (up 37.8% year-on-year), ordinary income amounted to 9,655 million yen (up 47.7% year-on-year), and net income attributable to owners of the parent company amounted to 6,994 million yen (up 47.3% year-on-year).

Results by reportable segment are as follows.

Japan

Sales to customers significantly increased 19.2% year-on-year to 31,449 million yen.

Sales of eye-drops for contact lenses were robust due to an increase in opportunities to go out as a result of the easing of restrictions on activities, and sales of high-value eye drops remained steady, due in part to an increase in the number of people complaining of eyestrain as a result of longer contact time with digital devices, etc.

"Skin Aqua," a sunscreen with new functions, continued to perform well and contributed to revenue growth. In addition, sales of "Hada-Labo," "Obagi," "Melano CC" and "Rohto V5 Grain" continued to be strong. Lip balm, where sales had been sluggish due to the mask-wearing lifestyle, began to recover. In addition, COVID-19(SARS-CoV-2) antigen rapid test kits also contributed to the increase in sales.

In addition to the ROHTO pharmaceutical Co., Ltd. standalone, Rohto Nitten Co., Ltd., which newly launched "lacrimal duct tube" in the previous fiscal year, and Amato Pharmaceutical Products, Ltd., which has "Borraginol®," as its main product and became a subsidiary in August 2021, also contributed to the increase in sales.

Segment income (operating income basis) increased significantly to 5,195 million yen (up 32.2% year-on-year) due to a significant increase in sales and efficient utilization of selling, general and administrative expenses.

America

Sales to customers significantly increased 86.9% year-on-year to 3,778 million yen.

Hydrox Laboratories, which became a subsidiary in October 2021 and manufactures and sells medical disinfectants and other products, contributed significantly to the increase in sales.

Segment income (operating income basis) increased to 135 million yen (up 26.9% year-on-year) mainly due to increased capacity utilization and a review of product prices, despite increased procurement costs of raw materials and supplies, higher transportation costs, and higher factory labor costs due to labor shortages resulting in aggravated manufacturing cost ratio.

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ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the First Quarter of FY3/23

Europe

Sales to customers significantly increased 19.4% year-on-year to 3,081 million yen.

Sales of the main-stayanti-inflammatory analgesic products performed well, contributing to revenue growth. "Hada-Labo Tokyo" also

performed well thanks to advertising utilizing social networking services. In addition, the Company continues to develop the eye drop

market with Rohto Dry Aid, a dry eye ophthalmic solution that launched in May 2021 after obtaining the CE marking.

Segment income (operating income basis) increased significantly by 316 million yen (34.3% increase year-on-year) mainly due to an increase in capacity utilization, despite an increase in procurement costs of raw materials and supplies as well as factory labor costs due to labor shortages resulting in higher manufacturing cost ratio.

Asia

Sales to customers significantly increased 23.5% year-on-year to 13,394 million yen.

China continued to grow sales despite the impact of city lockdowns under the zero-COVID-19 policy in March, which affected the market and lifestyle aspectsof the country. Vietnam also achieved V-shaped recovery thanks to the economic recovery from the COVID- 19 pandemic, while Indonesia also maintained a strong performance.

As for product sales, sales of eye drops were favorable in Hong Kong and Southeast Asia. Sales of cosmetics for men increased due to the launch of new products in China, Hong Kong and Taiwan. In addition, "50 Megumi" contributed to sales increase in Hong Kong. Segment income (operating income basis) increased significantly to 2,720 million yen (up 69.6% year-on-year) due to strong sales.

(2) Explanation of Financial Position

Total assets at the end of the first quarter of the current fiscal year were 293,159 million yen, an increase of 18,532 million yen from the end of the previous fiscal year. This was mainly due to an increase of 4,464 million yen in cash and deposits, an increase of 4,135 million yen in merchandise and finished goods, and an increase of 2,932 million yen in other under property, plant and equipment, while electronically recorded monetary claims-operating decreased by 699 million yen.

Total liabilities increased 7,517 million yen from the end of the previous fiscal year to 98,312 million yen. This was mainly due to a decrease of 1,303 million yen in provision for bonuses, while notes and accounts payable-trade and accrued expenses increased by 4,459 million yen and 2,653 million yen, respectively.

Net assets increased 11,014 million yen from the end of the previous fiscal year to 194,847 million yen. This was mainly due to increases of 5,905 million yen in foreign currency translation adjustment and 4,599 million yen in retained earnings.

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

(Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2023)

	Net sales	Operating	Ordinary	Profit attributable to	Net income per
		income	income	owners of parent	share
	Millions of yen	Millions of yen	Millions of yen	Millions of yen	Yen
Previous forecast (A)	218,000	28,000	28,000	19,500	170.95
Revised forecast (B)	225,000	30,000	31,000	21,500	188.48
Change (B - A)	7,000	2,000	3,000	2,000	-
Percentage change (%)	3.2	7.1	10.7	10.3	-

With regard to the consolidated earnings forecast, the Company expects the Japan segment to perform well in the second quarter and beyond, as in the first quarter of the current fiscal year, despite the continuing impact of COVID-19. In addition, factoring in the impact of foreign currency translation due to yen depreciation mainly in Asian subsidiaries, the Company has revised its consolidated earnings forecast announced on May 12, 2022. Net sales, operating income, ordinary income, and profit attributable to owners of the parent are all expected to increase over the previous forecast. The Company keeps an exchange rate assumption at 125 yen to the US dollar.

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.

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