Chori : FY03/2024 Q2 Financial Results Materials (Highlights)

Translation ― Original text in Japanese

FY03/2024 Q2

(April 1, 2023 to September 30, 2023)

Financial Results

Materials

(Highlights)

October 27, 2023

FY03/2024 Q2 Financial Results Summary

Key Points of the Summary

POINT Promoted the first year of The Medium-Term Management Plan "Chori Innovation Plan 2025"

• Steadily implemented the plan to achieve its full-year forecast of financial results for the fiscal year ending March 31, 2024
• Posted ordinary profit of 7.6 billion yen, profit before income taxes of 7.8 billion yen, and net profit attributable to owners of the parent of 5.0 billion yen in FY03/2024 Q2, which

		were all record highs for a second straight year
Business		⚫ Despite a year-on-year decline in sales, profit increased due to improved profitability.
	results		⚫ The Fibers, Textiles and Garments business grew substantially. The Chemicals business
summary		also performed well.
Financial		⚫ Equity-to-asset ratio: 53.2% Maintained at a high level.
	⚫ ROE (net income/annual basis) 13.3％
	base
		⚫ ROIC (annual basis) 12.8％
			⚫ The company-wide business transformation project (mission critical system (SAP)
			implementation project, called CARAT) transitioned to system development in the
	Topics		implementation phase and is progressing as planned towards full scale operation from
		FY2025.
			⚫ Having established the Sustainability Promotion Preparation Committee, the Company
			is considering materiality candidates.	1
			CHORI CO., LTD.

FY03/2024 Q2 Financial Results Summary

Business Results Breakdown (YoY Comparison)

POINT ⚫ The global economy sees no end to geopolitical risks symbolized by the conflict in Europe and faces an economic slowdown in China, which is accompanied by a downturn in the

real estate market. They are causes for concern with respect to economic growth.

• The Japanese economy is on a recovery trend, thanks to a pickup in manufacturing such as automobiles and increased inbound tourism demand.
• Despite a decrease in net sales due to lower sales in the Chemicals business outside Japan, substantial growth in the Fibers, Textiles and Garments business thanks to a rebound in the Japanese apparel market led to increases in profit at each stage.

Unit: billions of yen	FY03/2023	FY03/2024	Difference	Ratio
Apr.-Sep.	Apr.-Sep.
Net sales	168.5	152.9	-15.6	-9.2%
Gross profit	18.7	19.3	+0.6	+3.4%
Selling, general and administrative expenses	11.9	11.5	-0.4	-3.4%
Operating profit	6.8	7.8	+1.0	+15.2%
Ordinary profit	7.4	7.6	+0.2	+3.3%
Profit before income taxes	7.8	7.8	+0.0	+0.0%
Net profit attributable to owners of the parent	4.8	5.0	+0.2	+4.8%

CHORI CO., LTD.

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FY03/2024 Q2 Financial Results Summary

Segment Results

		Net sales	■ Fibers, Textiles and Garments
	FY03/2023	FY03/2024
Unit: billions of yen	■ Chemicals ■ Machinery ■ Others	Unit: billions of yen	Difference
Apr.-Sep.	Apr.-Sep.
70.0		70.3			Fibers, Textiles	70.0	70.3	+0.3
							and Garments
								Chemicals	95.6	81.6	-14.0
95.6		81.6	1.0	Machinery	2.9	1.0	-1.9
				2.9	Others	0.0	0.0	+0.0
				0.0		0.0
					Total	168.5	152.9	-15.6
			FY03/2023		FY03/2024
			Apr.-Sep.		Apr.-Sep.

Profit (loss) before income taxes

Unit: billions of yen	■ Fibers, Textiles and Garments
	■ Chemicals ■ Machinery ■ Others*

2.0		4.3
5.3	0.3	4.3
	0.1
			-0.0
FY03/2023		FY03/2024	-0.8

Apr.-Sep.Apr.-Sep.

Unit: billions of yen	FY03/2023	FY03/2024	Difference
Apr.-Sep.	Apr.-Sep.
Fibers, Textiles	2.0	4.3	+2.3
and Garments
Chemicals	5.3	4.3	-1.0
Machinery	0.3	-0.8	-1.1
Others*	0.1	-0.0	-0.2
Total	7.8	7.8	+0.0

*Adjusted amounts for Others are included.

Fibers, Textiles and Garments

Significant increased profit

Strong	Overall
Expansion	Domestic apparel-related

	Chemicals			Machinery
	Decreased sales and profit		Decreased sales and segment loss
	Steady		Fine chemicals		Loss		Foreign exchange loss
	Sluggish		Overall decrease in demand

and poor market conditions

CHORI CO., LTD.

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FY03/2024 Q2 Financial Results Summary

Net sales by Operation

POINT	⚫ Trade ratio: 67.8% (-1.4pt YoY)
		⚫ Overseas sales decreased primarily in the China business and the Chemicals
		business .

Unit: billions of yen

Net sales	168.5
Overseas	116.7
transactions
（Trade ratio）	(69.2%)

	51.8
Domestic
Import	49.0

Export

19.5

Overseas

48.1

	Net sales	152.9
	Overseas	103.6
	transactions
（Trade ratio）	(67.8%)

-2.549.3

-0.348.7

-1.717.8

-11.037.1

			Net sales	-15.6
Diff.		Overseas	-13.0
	transactions
			（Trade ratio）	(-1.4pt)
		Domestic	Amount of domestic sales
		sales	from domestic suppliers
			Overseas transactions
			Import	Amount of net sales from
			sales	overseas to Japan
			Export	Amount of net sales from Japan
			sales	to overseas
			Overseas	Amount of net sales from
			sales	overseas business

FY03/2023 Apr.-Sep.

FY03/2024 Apr.-Sep.

CHORI CO., LTD.

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FY03/2024 Q2 Financial Results Summary

Financial Position

■ Total assets	■ Net interest-bearing debt
■ Total equity		Equity-to-asset ratio
Unit: billions of yen
143.2	147.2

53.2%

50.4%

Financial soundness

Unit: billions of yen	31-Mar-23	30-Sep-23	Difference
Total assets	143.2	147.2	+4.0
Net interest-bearing debt	-13.9	-13.2	+0.7
Total equity	72.2	78.4	+6.2
Equity-to-asset ratio	50.4%	53.2%	+2.8pt

72.2

78.4

Profitability/Capital efficiency

-13.9-13.2

31-Mar-2330-Sep-23

	31-Mar-23	30-Sep-23*	Difference
ROA	5.9%	6.9%	+1.0pt
(Net income basis)
ROE	11.8%	13.3%	+1.5pt
(Net income basis)
ROIC	10.8%	12.8%	+2.0pt
(Reference) ROA	9.0%	10.5%	+1.5pt
(Ordinary income basis)
* Annual basis

CHORI CO., LTD.

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FY03/2024 Q2 Financial Results Summary

Cash Flows

POINT	⚫ Cash and cash equivalents remained at a high level of ¥17.0 billion.
		Operating activities: Provided ¥1.5 billion due to profit before income taxes and others
		Investing activities : Used ¥1.3 billion mainly due to the acquisition of intangible assets
		associated with the introduction of a mission-critical system
		Financing activities: Used ¥2.8 billion mainly due to dividend payments, repayments of
		short-term borrowings and others

Unit: billions of yen	FY03/2023	FY03/2024	Difference
Apr.-Sep.	Apr.-Sep.
Cash flows from operating activities	2.7	1.5	-1.2
Cash flows from investing activities	0.2	-1.3	-1.5
Cash flows from financing activities	0.3	-2.8	-3.1
Effect of exchange rate changes on cash and cash equivalents	1.0	0.6	-0.4
Total cash flows	4.2	-1.9	-6.1
Cash and cash equivalents at end of period	16.3	17.0	+0.7

CHORI CO., LTD.

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FY03/2024 Q2 Financial Results Summary

FY03/2024 Business Results Forecast

POINT ⚫ The progress rate for full-year profit estimates at each stage is over 50%.

• The Company advances standardization and streamlining of company-wide operations, strengthening of compliance, promotion of DX, utilization and development of human resources, etc. towards the business transformation through the implementation of SAP (FY2025). The organizational transformation project has also started.

	FY03/2024	FY03/2024	FY03/2024
Unit: billions of yen	Apr.-Sep.	Apr.-Mar.
Progress
	Result	Forecast
Net sales	152.9	340.0	45.0%
Operating profit	7.8	14.2	54.9%
Ordinary profit	7.6	14.0	54.5%
Profit before income taxes	7.8	14.0	55.4%
Net profit attributable to owners of parent	5.0	9.4	53.4%

FY03/2023

Result

329.4

12.7

12.4

12.8

8.1

CHORI CO., LTD.

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FY03/2024 Q2 Financial Results Summary

FY03/2024 Dividend

Basic dividend policy

FY03/2024 Annual dividend forecast

• Recognizing the return of profits to shareholders as one of its most important management issues, the Company's policy is to provide performance-based dividends in accordance with the levels of net profit attributable to owners of parent with a view to continuously and stably returning profits to shareholders and ensuring stable management and finances.
• Dividend policy: Consolidated dividend payout ratio of 30% and dividend on equity ratio (DOE) of 3.5% or more (FY03/2024~)

Based on the business results forecast announced on April 28, 2023, and the policy above, an interim dividend of ¥58 per share will be paid. The annual dividend forecast is ¥116 per share (year-end dividend of ¥58 per share).

Trends in per share dividend (Annual)

■ ■ Dividends ( ) Consolidated dividend payout ratio EPS: Net profit per share

Unit: yen	229	248

円

51

Consolidated dividend payout ratio of 30% or more

	DOE of 3.5% or more
330	382
Annual ¥116
277
Annual ¥105		（30%）
（32%）	58
55	（Fiscal year-end
	forecast）
（Fiscal year-end）
84

60

63

（30%）

58

(26%)（25%）

37

（73%）

50	（Interim）
（Interim）

FY03/2019

FY03/2020

FY03/2021

FY03/2022

FY03/2023

FY03/2024

CHORI CO., LTD.

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Making your dreams come true

Forecasts of operational performance, as well as future predictions described in this document, were prepared based on information available as of the day on which this document was released. This document in no way guarantees the condition and operational performance of the company in the future.