August 4, 2022

Consolidated Financial Statements - Summary

(Three months ended June 30, 2022)

This document is an English translation of the Japanese-language original. All financial information has been prepared in accordance with accounting principles generally accepted in Japan.

Company Name:

GUNZE LIMITED

Securities Code:

3002

Stock Market Listings:

Tokyo

URL:

https://www.gunze.co.jp/

Representative:

Toshiyasu Saguchi, President and Representative Director

Contact:

Junko Nakashima, General Manager, Corporate Communications

Tel:

+81 (6) 6348-1314

Filing of Quarterly Securities Report (Shihanki hokokusho) (Scheduled):

August 10, 2022

Start of Distribution of Dividend (Scheduled):

-

Preparation of Supplementary Materials for Quarterly Financial Results:

No

Holding of Presentation of Quarterly Financial Results:

No

1. Consolidated Operating Results for the three months ended March 31, 2023 (April 1, 2022 to June

30, 2022)

(1) Consolidated operating results

(Amounts less than one million yen are omitted)

(Percentages represent year-over-year changes)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Three months ended

¥ millions

%

¥ millions

%

¥ millions

%

¥ millions

%

June 30, 2022

31,868

12.6

1,252

(19.5)

1,570

(8.8)

1,171

4,991.3

June 30, 2021

28,291

-

1,555

-

1,722

-

23

-

Note: Comprehensive income

Three months ended June 30, 2022: ¥2,642 million [-%]

Three months ended June 30, 2021: ¥(317) million [-%]

EPS

Diluted EPS

Three months ended

¥

¥

June 30, 2022

67.80

67.63

June 30, 2021

1.35

1.35

Note: GUNZE has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and other related standards. Accordingly, year-over-year increases/decreases (%) of the figures for the first quarter of the fiscal year ended March 31, 2022 are not provided.

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

¥ millions

¥ millions

%

¥

As of June 30, 2022

156,676

115,009

72.1

6,541.80

As of March 31, 2022

158,216

114,790

71.4

6,535.42

Reference: Total equity

As of June 30, 2022: ¥113,012 million

As of March 31, 2022: ¥112,903 million

2. Dividends

Annual dividends per share (¥)

1st quarter-end

2nd quarter-end

3rd quarter-end

Year-end

Total

FY2021

140.00

140.00

FY2022

FY2022 (projected)

145.00

145.00

(Note) Revision to the projected dividends announced most recently: None

3. Projected results for FY2022 (April 1, 2022 to March 31, 2023)

Net sales

Operating profit

Ordinary profit

¥ millions

%

¥ millions

%

¥ millions

%

FY2022 full year

136,000

9.4

6,000

23.0

6,000

11.1

Profit

EPS

¥ millions

%

¥

FY2022 full year

3,700

25.9

214.18

(Note) Revision to the projected results announced most recently: None

Notes

  1. Changes in significant subsidiaries during the period (changes in specified subsidiaries during the period accompanied by changes in the scope of consolidation): No
  2. Application of an accounting method specific to the preparation of quarterly consolidated financial statements: Yes
  3. Changes in accounting policies, changes in accounting estimates, and restatement after error corrections
    1. Changes in accounting policies due to revisions to accounting standards and other regulations: No
    2. Changes in accounting policies due to other reasons: No
    3. Changes in accounting estimates: No
    4. Restatement after error corrections: No
  4. Number of shares issued and outstanding (common stock)
    1. Number of shares at the end of period (including treasury stock):

As of June 30, 2022: 18,293,516 shares

As of March 31, 2022: 18,293,516 shares

  1. Treasury stock at the end of period: As of June 30, 2022: 1,018,010 shares As of March 31, 2022: 1,017,897 shares
  2. Average number of shares during the period:

Three months ended June 30, 2022: 17,275,560 shares

Three months ended June 30, 2021: 17,598,878 shares

  • This summary of quarterly consolidated results is exempt from the quarterly review procedures by certified public accountants or an audit corporation.
  • Notes regarding the proper use of projections of the results and other matters
    Projections of results and future developments are based on information available to the Company at the current time, as well as certain assumptions judged by the Company to be reasonable. Various factors could cause actual results to differ materially from these projections. For the assumptions that form the basis of the projected results and notes regarding the use of projections, see "(3) Explanation of Consolidated Financial Results
    Forecast and Other Forward-looking Information" of "1. Qualitative Information on Quarterly Financial Results" on page 3 of attached materials.

(Attachment)

Table of Contents

1. Qualitative Information on Quarterly Financial Results for the Period under Review ...............................

2

(1)

Explanation of Business Results ..........................................................................................................

2

(2)

Explanation of Financial Position ........................................................................................................

3

(3)

Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information

..... 3

2. Quarterly Consolidated Financial Statements and Primary Notes ..............................................................

4

(1)

Quarterly Consolidated Balance Sheets ...............................................................................................

4

(2)

Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of

Comprehensive Income ........................................................................................................................

6

(3)

Notes to Quarterly Consolidated Financial Statements ........................................................................

8

(Notes regarding assumptions of continuing operations) ..................................................................

8

(Notes in the case of significant changes in shareholders' equity) ....................................................

8

(Application of an accounting method specific to the preparation of quarterly consolidated financial

statements) .........................................................................................................................................

8

(Changes or restatement of accounting estimates) ..............................................................................

8

(Additional information) ...................................................................................................................

8

(Significant subsequent events) .........................................................................................................

9

1

1. Qualitative Information on Quarterly Financial Results for the Period under Review

  1. Explanation of Business Results

(Overview of the quarterly period under review)

During the three months ended June 30, 2022 (April 1, 2022 - June 30, 2022), the Japanese economy was largely on a recovery track, as social and economic activities returned toward normal primarily owing to the progress of COVID-19 vaccinations. The economic outlook, however, remains unclear, what with the hike in crude oil prices chiefly attributable to the aggravating situation in Ukraine and rising prices due to the yen's rapid depreciation.

Amid this operating environment, the GUNZE Group set about pursuing four basic strategies of "Creation of new value," "Capital cost-focused management," "Evolution of corporate constitution," and "Environmentally responsible management" to kick off its new medium-term management plan, "VISION 2030 stage 1." By segment, the functional solutions business fared well overall, although soaring raw materials prices has had an enduring impact on its mainstay plastic films subsector. The apparel business experienced a decline in profitability on the back of the weak yen and skyrocketing raw materials prices, despite the recovery trend in sales. The lifestyle creations business, on the other hand, achieved revenue growth owing to the brisk performance of the real estate subsector.

As a result of the above, for the quarterly period under review, net sales increased by 12.6% year-on-year to ¥31,868 million, operating profit decreased by 19.5% year-on-year to ¥1,252 million, ordinary profit decreased by 8.8% year-on-year to ¥1,570 million, and profit attributable to owners of parent increased by 4,991.3% to ¥1,171 million on a consolidated basis.

(Results by Business Segment)

[Functional Solutions]

In the plastic films subsector, sales of packaging films remained steady. The engineering plastics subsector, too, performed strongly, buoyed by increased demand for products aligned with the semiconductor market and a recovery in sales of products for office equipment as workers return to offices. In the electronic components subsector, touch screens sold well in the Chinese market. Meanwhile, the medical materials subsector gave a good showing owing to new product launches and strong exports to the Chinese market.

As a result of the above, the functional solutions business recorded net sales of ¥14,163 million (up by 11.0% year-on-year) and operating profit of ¥1,995 million (up by 14.2% year-on-year).

[Apparel]

The apparel business saw its sales grow overall as the market began recovering now that the declared state of emergency and pandemic-related restrictions have all been lifted for now and e-commerce and SPA channel sales did well, but experienced a decline in profitability owing to rising raw materials prices and the weak yen. In the innerwear subsector, the differentiated product line of foundation garments and Femtech ("female" + "technology") lines performed briskly. The legwear subsector, on the other hand, recorded a year-on-year sales growth as the market recovered, though its profitability needs to be bolstered.

As a result of the above, the apparel business recorded net sales of ¥14,062 million (up by 9.2% year-on-year) and operating loss of ¥26 million (operating profit of ¥407 million for the corresponding period of the previous fiscal year).

[Lifestyle Creations]

The real estate subsector recorded revenue growth as sales of an idle land redevelopment project were recorded. Both the shopping center business and the sports club subsector are back on the recovery track following the lifting of pandemic restrictions.

2

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Gunze Ltd. published this content on 05 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 August 2022 04:10:06 UTC.