Consolidated Financial Results for the Six Months Ended September 30, 2021 [Japanese GAAP]

Note: This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

Consolidated Financial Results

for the Six Months Ended September 30, 2021

[Japanese GAAP]

												November 12, 2021
Company name: Menicon Co., Ltd.
Stock exchange listing: Tokyo, Nagoya
Code number: 7780
URL: https://www.menicon.com
Representative: Hidenari Tanaka					CEO
Contact: Motonari Watanabe					Senior Executive Officer, Corporate Management
Phone: [phone]
Scheduled date of filing quarterly securities report: November 12, 2021
Scheduled date of commencing dividend payments: -
Availability of supplementary briefing material on quarterly financial results: Yes
Schedule of quarterly financial results briefing session: Yes
								(Amounts of less than one million yen are rounded down)
1. Consolidated Financial Results for the Six Months Ended September 30, 2021 (April 01, 2021 to September 30, 2021)
(1) Consolidated Operating Results					(% indicates changes from the previous corresponding period.)
		Net sales			Operating profit	Ordinary profit		Profit attributable to
					owners of parent
Six months ended		Million yen		%		Million yen		%	Million yen		%	Million yen	%
September 30, 2021		48,395		16.6		5,059		12.5	5,060		6.8	3,401	6.4
September 30, 2020		41,521		(3.0)		4,497		(1.3)	4,738		3.8	3,196	6.8

(Note) Comprehensive income:	Six months ended September 30, 2021:
	Six months ended September 30, 2020:

¥	3,692 million	[	5.3%]
¥	3,506 million	[	34.6%]

	Basic earnings		Diluted earnings
	per share		per share
Six months ended		Yen	Yen
September 30, 2021		44.99	41.48
September 30, 2020		42.35	42.04

(Note) 1. The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29 issued March 31, 2020), etc. has been applied from the beginning of the first quarter of the current fiscal year. The figures for the Six Months Ended September 30, 2021 are after the application of the said accounting standards.

1. 2. Effective October 1, 2021, we conducted a 2-for-1 stock split of common stock. Accordingly, the basic earnings per share and the diluted earnings per share are calculated on the assumption that the said stock split was conducted at the beginning of the previous fiscal year.

2. Consolidated Financial Position

	Total assets	Net assets	Capital adequacy ratio
As of	Million yen	Million yen	%
September 30, 2021	128,668	62,468	47.1
March 31, 2021	127,153	60,985	46.5

(Reference)
Equity:	As of September 30, 2021:	¥	60,538 million
	As of March 31, 2021:	¥	59,144 million
(Note) 1.	The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29 issued March 31, 2020), etc. has been applied
	from the beginning of the first quarter of the current fiscal year. The figures for the Six Months Ended September 30, 2021
	are after the application of the said accounting standards.

2. In the first quarter ended June 30, 2021, we finalized the provisional accounting treatment for business combinations. The figures for the fiscal year ended March 31, 2021 reflect the finalization of the provisional accounting treatment.

2. Dividends

			Annual dividends
	1st	2nd	3rd		Year-end	Total
	quarter-end	quarter-end	quarter-end
	Yen	Yen	Yen		Yen	Yen
Fiscal year ended March 31, 2021	-	0.00	-		35.00	35.00
Fiscal year ending March 31, 2022	-	0.00
Fiscal year ending March 31, 2022			-		17.50	17.50
(Forecast)
(Note) 1. Revision to the forecast for dividends announced most recently:	No

2. Effective October 1, 2021, we conducted a 2-for-1 stock split of common stock. The dividend forecast for the fiscal year ending March 31, 2022 takes into account the said stock split. The year-end dividend per share for the fiscal year ending March 31, 2022 (forecast) without taking into account the stock split will be 35.00 yen.

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2022(April 01, 2021 to March 31, 2022)

(% indicates changes from the previous corresponding period.)

		Net sales	Operating profit	Ordinary profit	Profit attributable	Basic earnings per
		to owners of parent	share
		Million yen	%	Million yen	%	Million yen		%	Million yen	%	Yen
Full year		99,200	15.1	9,000	11.0	8,800		5.4	5,700	(4.2)	75.42
(Note) 1.	Revision to the financial results forecast announced most recently: No

• 2. Effective October 1, 2021, we conducted a 2-for-1 stock split of common stock. The basic earnings per share in the consolidated financial result forecast for the fiscal year ending March 31, 2022 takes into account the stock split. The basic earnings per share in the consolidated financial result forecast for the fiscal year ending March 31, 2022 without taking into account the stock split will be 150.83 yen.

• Notes:

(1) Changes in significant subsidiaries during the six months ended September 30, 2021
(Changes in specified subsidiaries resulting in changes in scope of consolidation):	No
(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements:	No

1. Changes in accounting policies, changes in accounting estimates and retrospective restatement
2. 1. Changes in accounting policies due to the revision of accounting standards: Yes
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
3. Total number of issued shares (common shares)
4. 1. Total number of issued shares at the end of the period (including treasury shares):

September 30, 2021:	76,201,288	shares
March 31, 2021:	76,154,888	shares
2) Total number of treasury shares at the end of the period:
September 30, 2021:	681,868	shares
March 31, 2021:	575,752	shares

3) Average number of shares during the period:
Six months ended September 30, 2021:	75,588,816	shares
Six months ended September 30, 2020:	75,475,855	shares

(Note) Effective October 1, 2021, we conducted a 2-for-1 stock split of common stock. Total number of issued shares at the end of the period and treasury shares at the end of the period and average number of shares during the period are calculated on the assumption that the said stock split was conducted at the beginning of the previous fiscal year.

• This summary of financial results is exempt from audit procedures.
• Explanation regarding appropriate use of business results forecasts and other special instructions
• • Forecasts regarding future performance presented in this material include the outlook for the future, assumptions on which the plan is based, and projections as of the date of announcement of this material. Actual results may differ from the forecasts presented in this material due to various factors.
  • For matters concerning the forecast of business results, please refer to "1. Qualitative Information on Quarterly Financial Results for the Period under Review (3) Explanation of Consolidated Business Results Forecast and Other Forward-looking Information" on Page 5 of the appendix.

Table of contents of appendix
1. Qualitative Information on Quarterly Financial Results for the Period under Review .....................	2
(1)	Explanation of Business Results .................................................................................................................	2
(2)	Explanation of Financial Position ...............................................................................................................	4
(3)	Explanation of Consolidated Business Results Forecast and Other Forward-looking Information ...........	5
2. Quarterly Consolidated Financial Statements and Notes...................................................................	6
(1)	Quarterly Consolidated Balance Sheets......................................................................................................	6
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income..............................................	8
(3)	Quarterly Consolidated Statements of Cash Flows...................................................................................	10
(4)	Notes to Quarterly Consolidated Financial Statements ............................................................................	11
(Notes on going concern assumption) ........................................................................................................	11
(Notes on significant changes in amount of shareholders' equity).............................................................	11
(Changes in accounting policies)................................................................................................................	11
(Additional information).............................................................................................................................	12
(Segment information)................................................................................................................................	13
(Significant subsequent events) ..................................................................................................................	16

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

(1) Explanation of Business Results

During the period under review, the overall global economy was on a recovery trend, but the conditions vary among countries, depending on the effect of fiscal stimulus measures and the status of vaccination in each country. Although the economic environments recovered to levels higher than before the spread of COVID-19 in some countries including China, some Southeast Asian and other countries saw economic activities being restricted due to the continuing spread of infections. While there are some positive signs in general, the environment surrounding companies remains unstable, as evidenced by soaring global logistics expenses, surging raw material prices, and the fluctuations of financial markets in anticipation of the rising long-term interest rates in the United States. In Japan, economic activities were restricted due to an increase in COVID-19 cases, but expectations are high for economic activities to recover going forward, as the state of emergency declaration was lifted nationwide at the end of September with a rapid spread in vaccine acceptance.

Under these circumstances, the overseas contact lens market continued on a recovery trend as with the case of the first quarter of the fiscal year under review and robust demand for orthokeratology lenses is continuing, particularly in China. The domestic contact lens market was affected by the spread of COVID-19, but it is expected to recover along with vaccination progress in future.

Performances in individual businesses are as follows. [Domestic Vision Care Business]

The domestic contact lens market is expected to recover to a level close to that of fiscal year 2019, although there still remains the impact of COVID-19. The demand for daily disposable contact lenses is increasing due to the expanded product lineup of safe silicone hydrogel materials and switching from other types of contact lenses. Furthermore, as the problem of presbyopia became obvious owing to aging of users and increased near work stemming from more time spent at home, the sales of multifocal contact lenses continued to grow.

The Domestic Vision Care Business aims to expand the market share of daily disposable contact lenses, increase the number of MELS Plan members, and optimize members' lifetime value.

Regarding product strategy for the period under review, under such market conditions and policies, we have added a new design to the "2 WEEK Menicon Premio multifocal contact lenses." With respect to the MELS Plan membership composition, two-week contact lenses have a lot of users, so it is important to maintain these members' continuous customer satisfaction. Thanks to the addition of a new design, we can provide better support for vision suitable for customers' life scenes, which is expected to improve customer satisfaction of the MELS Plan and acquire new members.

As promotional measures, the recovery from the COVID-19 pandemic has enabled us to engage in more active sales promotion activities than in the same period of the previous fiscal year, and thus we have proceeded with activities to acquire prospective customers as planned. In the period under review, we rolled out the "1 Day MELS Start-of- Summer Campaign" to increase our market share of daily disposable contact lenses and MELS Plan members. In addition, we made an original drama in commemoration of the 20th anniversary of the MELS Plan with the aim of improving the recognition of the MELS Plan among young people and started to stream it online in July. "MENICOiN" is granted as the campaign benefits for various promotion activities from this spring, and is convenient for the reason that it allows points to be exchanged for WAON points and nanaco points, etc. as well as lens care products, thereby contributing to an improved level of member satisfaction.

• The name of the Domestic Contact Lens Business segment has been changed to the Domestic Vision Care Business as of the first quarter of the fiscal year under review.

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