Takara Bio : Consolidated Financial Statements for the First Quarter Ended June 30, 2023

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Aug 4, 2022

	Consolidated Financial Results
	for the Three Months Ended June 30, 2022
	(Under Japanese GAAP)
Company name:	Takara Bio Inc.
Listing:	Tokyo Stock Exchange
Securities code:	4974
URL:	https://www.takara-bio.co.jp
Representative:	Koichi Nakao, President & CEO
Inquiries:	Takuya Kakemi, Executive Officer, Head of Corporate Management Division
Telephone:	[phone]
Scheduled date to file quarterly securities report:	Aug. 10, 2022
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results briefing:	None

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the three months ended Jun. 30, 2022 (from Apr. 1, 2022 to Jun. 30, 2022)

(1) Consolidated operating results (cumulative)		(Percentages indicate year-on-year changes.)
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
	Three months ended	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
	Jun. 30, 2022	14,102		(7.7)	4,537	(46.6)	4,593	(46.5)	3,907	(35.1)
	Jun. 30, 2021	15,272		120.1	8,504	-	8,579	-	6,025	-

Note: Comprehensive income	For the three months ended Jun. 30, 2022:	¥6,334 million	(22.8%)
			For the three months ended Jun. 30, 2021:	¥8,210 million	(-%)
		Basic earnings		Diluted earnings
			per share		per share
	Three months ended			Yen	Yen
	Jun. 30, 2022			32.45	-
	Jun. 30, 2021			50.04	-
(2) Consolidated financial position
			Total assets		Net assets	Equity-to-asset ratio	Net assets per share
	As of		Millions of yen	Millions of yen	%	yen
	Jun. 30, 2022		111,488	98,425	88.1	815.46
	Mar. 31, 2022		115,712	96,064	82.9	796.18
Reference: Equity
	As of Jun. 30, 2022:	¥98,194 million
	As of Mar. 31, 2022:	¥95,873 million

2. Cash dividends

		Annual dividends per share
	First quarter-end	Second quarter-end	Third quarter-end		Fiscal year-end	Total
	Yen	Yen	Yen		Yen	Yen
Fiscal year ended	-	0.00	-		33.00	33.00
Mar. 31, 2022
Fiscal year ending	-
Mar. 31, 2023
Fiscal year ending
Mar. 31, 2023	-	0.00	-		33.00	33.00
(Forecast)

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Forecast for the year ending March 31, 2023 (Apr. 1, 2022 - Mar. 31, 2023)

(Percentages indicate year-on-year changes for the full year and year-on-year changes for the quarter.)

		Net sales		Operating profit	Ordinary profit	Profit attributable to	Net income per
			owners of parent	share (in yen)
		Millions of yen		%	Millions of yen	%	Millions of	%	Millions of	%	yen
			yen	yen
	Six months ending	27,744		(12.1)	8,641	(38.7)	8,726	(38.7)	6,354	(36.5)	52.77
	Sep. 30, 2022
	Year ending Mar.	55,300		(18.3)	15,000	(48.1)	15,100	(46.9)	10,600	(46.6)	88.03
	31, 2023
Note: Revisions to the financial forecast since the most recent announced: None

• Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None

Newly included:	- companies (Company name)
Excluded:	- companies (Company name)

1. Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None
2. Changes in accounting policies, changes in accounting estimates, and restatement
3. 1. Changes in accounting policies due to revisions to accounting standards and other regulations: None
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates:None
   4. Restatement: None
4. Number of issued shares (common shares)
5. 1. Total number of issued shares at the end of the period (including treasury shares)

As of Jun. 30, 2022	120,415,600 shares
As of Mar. 31, 2022	120,415,600 shares

(ii) Number of treasury shares at the end of the period

As of Jun. 30, 2022	-	shares
As of Mar. 31, 2022	-	shares

1. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

Three months ended Jun. 30, 2022	120,415,600 shares
Three months ended Jun. 30, 2021	120,415,600 shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.

• Comment regarding appropriate use of earnings forecasts and other special notes
  Forward-looking statements contained in this document are determined by the Takara Bio Inc. (the "Company") based on information currently available to the Company and include a number of uncertainties. Actual results could differ from these forecasts due to changes in conditions that occur in the future. For information regarding the above, please refer to "1. Overview of Financial Results (4) Future Outlook on page 2 of the attached document.

Contents of the attached document

1. Overview of Financial Results for the three months ended Jun. 30, 2022……………………………………………………	2
(1) Overview of Financial Results……………………………………………………….…………..………….………….....	2
(2) Overview of Financial Position………………………………………………...…………………………...…….............	2

1. Overview of Cash Flows…………………………………………………………….…………………………….……... 2
2. Future Outlook……………………………………………………………......................................................................... 2

2. Consolidated Quarterly Financial Statements and Primary Notes............................................................................................	3
(1) Consolidated Quarterly Balance Sheets……………………………………………………………..................................	3
(2) Consolidated Quarterly Statements of Profit or Loss and Consolidated Quarterly Statements of Comprehensive Income.........	5
(Consolidated Quarterly Statements of Profit or Loss)...................................................................................................	5
(Consolidated Quarterly Statements of Comprehensive Income)..................................................................................	6
(3) Consolidated Quarterly Statements of Cash Flows ……………………………………………………………................	7
(4) Notes to Consolidated Quarterly Financial Statements………………………………………………………...................	8
(Notes on Premise of Going Concern) ………………………………………………………………………………….	8
(Notes in case of Changes in Marked Amount of Shareholders' Equity)………………………………………………..	8
(Additional Information)………………………………………………..…………..…………..…………..…………...	8
3. Supplementary Information…………………………………………………………………………………………………..	8
(1) Trends in Key Indicators for Business Management……………………………………………………………………..	8
(2) Comparative Consolidated Statement of Income ………………………………………………………………………..	9

- 1 -

1. Overview of Financial Results for the three months ended June 30, 2022

(1) Overview of Financial Results

The outlook for the global economy in the fiscal year under review is uncertain due to the impact of the new Coronavirus disease (COVID-19), the prolonged trade friction between the U.S. and China, and Russia's invasion of Ukraine.

Under these circumstances, Takara Bio Group is promoting initiatives to advance the development of fundamental biologics development technologies and become a biologics development company that continuously creates new modalities through the Reagents and Instruments and CDMO business under the six-yearLong-Term Management Plan FY2026, which ends in fiscal 2026, and the three-yearMedium-Term Management Plan FY2023, which ends in fiscal 20231.In addition, the Group worked aggressively to ensure a stable supply of testing-related products for the new Corona Virus and to establish a manufacturing system for regenerative medicine and other products.

In the fiscal year under review, although sales of Gene Therapy increased year on year, sales of Reagents, Instruments and CDMO decreased year on year due to a decrease in demand related to the new Coronavirus. As a result, net sales decreased to ¥14,102 million (down 7.7% year on year). Cost of sales increased to ¥3,977 million (up 86.4% year on year) due to changes in the sales mix, Gross profit decreased to 10,124 million (down 22.9% year on year). Selling, general and administrative (SG&A) expenses were ¥5,586 million (up 20.6% year on year), mainly due to an increase in personnel expenses and R&D expenses. Operating profit was ¥4,537million (down 46.6% year on year). As a result of the decrease in operating profit, ordinary profit decreased to ¥4,593 million (down 46.5% year on year), income before income taxes and others decreased to ¥5,479 million (down 36.0% year on year), and net income attributable to owners of the parent decreased to ¥3,907 million (down 35.1% year on year).

From the first quarter of the fiscal year under review, due to a review of management classifications, sales of reagents and other products of GMP grade (for the manufacture of regenerative medicine products), which were previously included in Reagents, are included in Gene Therapy. As a result, net sales for the first quarter of the previous fiscal year have been reclassified based on the new classification. In the first quarter of the previous fiscal year, ¥352 million, which was included in "reagents," has been reclassified as Gene Therapy.

Since our group is a single segment, the disclosure by segment is omitted.

1. Overview of Financial Position
   Total assets at the end of the first quarter under review were ¥111,488 million, it was a decrease of ¥4,224 million from the end of the previous fiscal year. This was mainly due to an increase of ¥690 million in merchandise and finished goods and a decrease of ¥5,111 million in trade receivables.
   Total liabilities at the end of the first quarter under review were ¥13,062 million, it was a decrease of ¥6,585 million from the end of the previous fiscal year. This was mainly due to a decrease of ¥4,682 million in accrued income taxes and ¥1,682 million in other current liabilities.
   Total net assets at the end of the first quarter under review were ¥98,425 million, an increase of ¥ 2,361 million from the end of the previous fiscal year. This was mainly due to an increases of ¥2,375 million in foreign currency translation adjustment due to the yen's depreciation.
2. Overview of Cash Flows
   Net cash provided by operating activities amounted to ¥3,766 million, a decrease of ¥1,838 million from the previous fiscal year. This was mainly due to balance between cash inflow from profit before income taxes and others of ¥5,479 million, decrease in trade receivables-trade of ¥5,375 million and cash outflow from income taxes paid of ¥5,164 million, decrease in other current liabilities of ¥1,554 million.
   Net cash used in investing activities was minus ¥294 million, an increase of ¥2,697 million from the previous fiscal year. This was mainly due to proceeds from withdrawal of time deposits of ¥496 million and purchase of property, plant and equipment and intangible assets of ¥970 million.
   Net cash used in financing activities amounted to ¥3,854 million, an increase of ¥1,973 million from the previous fiscal year,
   mainly due to cash dividends paid of ¥3,821 million.
   As a result of the above, the balance of cash and cash equivalents at the end of the first quarter under review, including the effect of exchange rate changes on cash and cash equivalents, increased by ¥309 million from the end of the previous fiscal year to ¥22,469 million
3. Future Outlook
   Consolidated results from the three months ended Jun 30, 2022 were recorded virtually as planed against all such net sales and each earning item (operating profit, ordinary profit and net income attributable to owner of the parent). Accordingly, the Company is not revising the consolidated forecast announced May 12, 2022 at present.

1 FY2026 and FY2023 refer to the fiscal year ending March 31, 2026 and 2023, respectively.

• 2 -