COSMOS Pharmaceutical : Consolidated Financial Results for the Fiscal Year Ended May 31, 2022

Disclaimer: This document is an English translation of the original document in Japanese and has been prepared solely for reference purposes. In the event of any discrepancy between this English translation and the original in Japanese, the original shall prevail in all respects.

Consolidated Financial Results

for the Fiscal Year Ended May 31, 2022

[Japanese GAAP]

July 11, 2022

Company name: Cosmos Pharmaceutical Corporation

Stock exchange listing: Tokyo Stock Exchange

Code number: 3349

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

Representative: Hideaki Yokoyama, President

Contact: Futoshi Shibata, Director and Corporate Planning Department Manager

Phone: [phone]

Scheduled date of general shareholders' meeting: August 23, 2022

Scheduled date of commencing dividend payments: August 24, 2022

Scheduled date of filing securities report: August 30, 2022

Availability of supplementary explanatory materials on annual financial results: Available

Schedule of annual financial results briefing session: Scheduled (for the media, analysts and institutional investors)

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Fiscal Year Ended May 31, 2022 (June 1, 2021 - May 31, 2022)

(1) Consolidated Operating Results			(% indicates changes from the previous corresponding period.)
		Net sales			Operating profit		Ordinary profit		Profit attributable to
						owners of parent
	Fiscal year ended	Million yen	%	Million yen	%	Million yen	%		Million yen	%
	May 31, 2022	755,414		-	29,796	-			32,861	-			23,155	-
	May 31, 2021	726,424	6.1	33,147	13.9			35,835	13.5			27,156	26.7
(Note) Comprehensive income: Fiscal year ended May 31, 2022: ¥23,198 million [-%]
		Fiscal year ended May 31, 2021: ¥27,179 million [26.6%]
		Basic earnings			Diluted	Return on			Ratio of	Ratio of
				earnings		ordinary profit	operating profit
		per share			equity
				per share			to total assets	to net sales
	Fiscal year ended	Yen			Yen				%			%		%
	May 31, 2022	584.76			-			12.8			9.3		3.9
	May 31, 2021	685.80			-			17.2			10.8		4.6

(Note) The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and other standards from the beginning of the fiscal year ended May 31, 2022. The figures for the fiscal year ended May 31, 2022 reflect these accounting standards, and therefore, changes from the previous corresponding period are not shown.

(2) Consolidated Financial Position

	Total assets	Net assets	Equity ratio	Net assets per share
	Million yen	Million yen	%	Yen
As of May 31, 2022	363,052	190,507	52.5	4,810.92
As of May 31, 2021	341,318	170,578	50.0	4,307.63

(Reference) Equity: As of May 31, 2022: ¥190,507 million As of May 31, 2021: ¥170,578 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

Fiscal year ended

Million yen

Million yen

Million yen

Million yen

May 31, 2022

32,194

(43,717)

(6,222)

37,362

May 31, 2021

27,875

(19,381)

(5,507)

55,108

2. Dividends

Annual dividends

Total

Ratio of

Payout ratio

dividends to

1st

2nd

3rd

Year-

dividends

quarter-

quarter-

quarter-

Total

(consolidated)

net assets

end

(annual)

end

end

end

(consolidated)

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

Fiscal year ended

-

27.50

-

42.50

70.00

2,771

10.2

1.8

May 31, 2021

Fiscal year ended

-

40.00

-

40.00

80.00

3,167

13.7

1.8

May 31, 2022

Fiscal year ending

May 31, 2023

-

42.50

-

42.50

85.00

14.5

(Forecast)

3. Consolidated Financial Results Forecast for the Fiscal Year Ending May 31, 2023 (June 1, 2022 - May 31, 2023)

(% indicates changes from the previous corresponding period.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
		owners of parent	per share
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
First half	400,000	7.8	14,920	(0.4)	16,420	(0.5)	11,100	(1.3)	280.31
Full year	813,500	7.7	30,000	0.7	33,000	0.4	23,200	0.2	585.87

* Notes:

1. Changes in significant subsidiaries during the period: None
   (Changes in specified subsidiaries resulting in changes in scope of consolidation) Newly included: - (Company name: -)
   Excluded: - (Company name: -)
2. Changes in accounting policies, changes in accounting estimates and retrospective restatement
3. 1. Changes in accounting policies due to the revision of accounting standards: Yes
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatement: None
4. Total number of issued shares (common shares)
5. 1. Total number of issued shares at the end of the period (including treasury shares):

May 31, 2022:	40,000,800 shares
May 31, 2021:	40,000,800 shares
2) Total number of treasury shares at the end of the period:
May 31, 2022:	401,885 shares
May 31, 2021:	401,704 shares
3) Average number of shares during the period:
Fiscal year ended May 31, 2022:	39,599,008 shares
Fiscal year ended May 31, 2021:	39,599,096 shares

(Reference) Summary of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended May 31, 2022 (June 1, 2021 - May 31, 2022)

(1) Non-consolidated Operating Results			(% indicates changes from the previous corresponding period.)
		Net sales			Operating profit	Ordinary profit	Profit
	Fiscal year ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
	May 31, 2022	755,413		-	29,765	-	32,839	-	23,141	-
	May 31, 2021	726,423	6.1	33,120	13.9	35,817	13.5	27,145	26.7
		Basic earnings		Diluted earnings
		per share			per share
	Fiscal year ended	Yen			Yen
	May 31, 2022	584.40			-
	May 31, 2021	685.52			-

(Note) The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and other standards from the beginning of the fiscal year ended May 31, 2022. The figures for the fiscal year ended May 31, 2022 reflect these accounting standards, and therefore, changes from the previous corresponding period are not shown.

(2) Non-consolidated Financial Position

	Total assets	Net assets	Equity ratio	Net assets per share
	Million yen	Million yen	%	Yen
As of May 31, 2022	362,630	190,106	52.4	4,800.79
As of May 31, 2021	340,892	170,235	49.9	4,298.96

(Reference) Equity: As of May 31, 2022: ¥190,106 million As of May 31, 2021: ¥170,235 million

• These consolidated financial results are outside the scope of audit by certified public accountants or an audit firm.
• Explanation of the proper use of financial results forecast and other notes

The statements about future projections contained in this document, including the outlook for financial results, are based on information currently available to the Company and certain assumptions that the Company considers reasonable, and actual financial results etc. may significantly differ from the projections due to various factors. As for the conditions assumed in the financial results forecast, please see "Future Outlook" on page 4 of the attachments.

Table of Contents - Attachments
1.	Overview of Operating Results, etc. .................................................................................................... 2
(1)	Overview of Operating Results for the Fiscal Year under Review ..................................................	2
(2)	Overview of Financial Position for the Fiscal Year under Review .................................................	3
(3)	Overview of Cash Flows for the Fiscal Year under Review ............................................................	3
(4)	Future Outlook ................................................................................................................................	4
(5)	Basic Policy on Distribution of Profits and Dividends for the Fiscal Year under Review and the
		Next Fiscal Year ................................................................................................................................	4
2.	Basic Policy on Selection of Accounting Standards ............................................................................	5
3.	Consolidated Financial Statements ......................................................................................................	6
(1)	Consolidated Balance Sheets ..........................................................................................................	6
(2)	Consolidated Statements of Income and Comprehensive Income ..................................................	8
(3)	Consolidated Statements of Changes in Equity ............................................................................	10
(4)	Consolidated Statements of Cash Flows .......................................................................................	12

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1. Overview of Operating Results, etc.

1. Overview of Operating Results for the Fiscal Year under Review
   During the fiscal year ended May 31, 2022, the Japanese economy experienced persistently weakening business activities and personal spending with the prolonged impact of the COVID-19 pandemic. Furthermore, due to increasing inflationary pressures caused by the depreciation of the yen and the surge in the prices of energy and raw materials, the economic outlook is expected to remain uncertain.
   It was exactly because of these circumstances that the Group endeavored to make our drugstores "low priced, close and convenient" for consumers by strengthening price competitiveness through pursuing low cost- operations.
   As for the Group's store opening strategy, the Group deployed new stores one after another with no concern about stores cannibalizing each other's sales that may result in a temporary decline in profitability. At the same time, the Group expanded its store networks in new catchment areas. As a result, the number of newly opened stores stood at 38 in Kanto region, 25 in Chubu region, 15 in Kansai region, 8 in Chugoku region, 8 in Shikoku region and 26 in Kyushu region, totaling 120. As 6 stores were closed, the number of stores at the end of the fiscal year under review became 1,244 in total.
   As a result of the above measures, the Group's consolidated operating results for the fiscal year under review were net sales of 755,414 million yen (726,424 million yen a year earlier), operating profit of 29,796 million yen (33,147 million yen a year earlier), ordinary profit of 32,861 million yen (35,835 million yen a year earlier) and profit attributable to owners of parent of 23,155 million yen (27,156 million yen a year earlier).
   Segment information is omitted because the Group is comprised of a single business segment.
   In addition, the Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and other standards from the fiscal year under review. As a result, the accounting treatment for revenue recognition applied to the fiscal year under review differed from the one applied to the previous fiscal year and therefore, information regarding year-on-year changes of amount and percentage are not stated in the explanation of the operating results stated above.
   The details are described in (5) Notes to Consolidated Financial Statements (Changes in accounting policies) on page 11 of the Japanese version.

(Store opening and closure)			(Unit: number of stores)
	Number of				Number of
	stores	Number of	Number of		stores
Region	at end of fiscal	newly opened	Net increase	at end of fiscal
closed stores
	year ended	stores		year ended
	May 31, 2021				May 31, 2022
Kanto	25	38	―	38	63
Chubu	73	25	―	25	98
Kansai	171	15	1	14	185
Chugoku	183	8	1	7	190
Shikoku	118	8	―	8	126
Kyushu	560	26	4	22	582
Total	1,130	120	6	114	1,244

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