Rohto Pharmaceutical : Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2022

August 10, 2021

Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2022

(Three Months Ended June 30, 2021)

	ROHTO Pharmaceutical Co., Ltd.	[Japanese GAAP]
Company name:	Stock Exchange listing: TSE, First Section
Stock code:	4527	URL: https://www.rohto.co.jp/
Representative:	Masashi Sugimoto, President and COO
Contact:	Masaya Saito, Vice President and Director
Telephone:	81-(0)6-6758-8223

Scheduled date of filing of Quarterly Report:	August 11, 2021
Scheduled date of dividend payment:	-
Supplementary materials for quarterly financial results:	Yes
Quarterly financial results meeting:	Yes (for institutional investors and analysts)
	(All amounts are rounded down to the nearest million yen.)

1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2022 (April 1, 2021 - June 30, 2021)

(1) Consolidated results of operations							(Percentages represent year-on-year changes.)
		Net sales	Operating income			Ordinary income		Profit attributable to
					owners of parent
		Millions of yen	%		Millions of yen			%	Millions of yen	%		Millions of yen	%
	Three months ended Jun. 30, 2021	42,315	-		6,008			-		6,521	-		4,731	-
	Three months ended Jun. 30, 2020	38,641	(7.8)		3,575		(7.4)		3,802	(3.1)		1,747	(21.2)
	Note: Comprehensive income (Millions	of yen):	Three	months ended	Jun. 30,	2021:	7,176	1,250.7%
			Three months ended Jun. 30, 2020:	531	(64.5%)
		Basic net income		Diluted net income
		per share		per share
			Yen				Yen
	Three months ended Jun. 30, 2021		41.48				41.36
	Three months ended Jun. 30, 2020		15.32				15.27

Note 1: Beginning with the first quarter of the fiscal year ending on March 31, 2022, the Company has applied Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020). All figures for the first quarter incorporate this accounting standard and comparisons with the first quarter of the previous fiscal year are omitted.

Note 2: The provisional accounting treatment for business combinations has been finalized at the end of the fiscal year ended March 31, 2021. The figures for the first quarter of the fiscal year ended March 31, 2021 have been restated accordingly.

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio
	Millions of yen	Millions of yen	%
As of Jun. 30, 2021	232,431	161,166	68.9
As of Mar. 31, 2021	225,790	156,612	68.9
Reference: Equity (Millions of yen):	As of Jun. 30, 2021: 160,036	As of Mar. 31, 2021: 155,525

2. Dividends

				Dividend per share
	1Q-end		2Q-end		3Q-end		Year-end	Total
		Yen	Yen		Yen		Yen	Yen
Fiscal year ended Mar. 31, 2021		-	13.00		-			15.00		28.00
Fiscal year ending Mar. 31, 2022		-
Fiscal year ending Mar. 31, 2022			15.00		-			15.00		30.00
(forecast)
Note: Revisions to the most recently announced dividend forecast: None

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2022 (April 1, 2021 - March 31, 2022)

(Percentages represent year-on-year changes.)

	Net sales		Operating income	Ordinary income	Profit attributable to	Net income per share
		owners of parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	182,000		0.4	23,100	0.5	23,900	(0.0)	17,100	2.1	149.91

Note: Revisions to the most recently announced consolidated forecast: None

* Notes

1. Changes in significant subsidiaries during the period (changes in specific subsidiaries resulting in change in scope of consolidation): None
2. Application of special accounting methods for preparation of quarterly consolidated financial statements: Yes

Note: Please refer to page 8 of the attachments "2. Quarterly Consolidated Financial Statements and Major Notes, (3) Notes to Quarterly Consolidated Financial Statements" for further information.

1. Changes in accounting policies and accounting estimates, and restatements
2. 1. Changes in accounting policies due to revisions in accounting standards: Yes
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Restatements: None

Note: Please refer to page 8 of the attachments "2. Quarterly Consolidated Financial Statements and Major Notes, (3) Notes to Quarterly Consolidated Financial Statements" for further information.

1. Number of common shares issued
2. 1. Number of shares outstanding at the end of the period (including treasury shares):

As of Jun. 30, 2021:

118,089,155 shares

As of Mar. 31, 2021:

118,089,155 shares

2) Number of shares of treasury shares at the end of the period:
As of Jun. 30, 2021:	4,019,044 shares	As of Mar. 31, 2021:	4,019,044 shares
3) Average number of shares outstanding during the period:
Three months ended Jun. 30, 2021:	114,070,111 shares	Three months ended Jun. 30, 2020:	114,070,167 shares

Note 1: This summary report is not subject to the quarterly review conducted by certified public accountants or audit firms.

Note 2: Cautionary statement with respect to forward-looking statements and other special items

Forecasts regarding future performance in these materials are based on assumptions judged to be valid and information available to the Company at the time the materials were created. These materials are not promises by the Company regarding future performance. Actual results of operations may differ significantly from the forecasts depending on various factors. For discussion of the assumptions and other factors considered by the Company in preparing the above projections, please refer to page 3 of the attachments "1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements."

ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the First Quarter of FY3/22

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Financial Position	3
(3)	Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements	3
2. Quarterly Consolidated Financial Statements and Major Notes	4
(1)	Quarterly Consolidated Balance Sheets	4
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	6
(3)	Notes to Quarterly Consolidated Financial Statements	8
	Going Concern Assumption	8
	Significant Changes in Shareholders' Equity	8
	Application of Special Accounting Methods for Preparation of Quarterly Consolidated Financial Statements	8
	Changes in Accounting Policies	8
	Segment Information	9

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ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the First Quarter of FY3/22

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

In the first quarter of the current fiscal year, the economic situation remained severe due to the impact of COVID-19. The outlook is expected to improve as measures to prevent the spread of the infection are implemented, but close attention must be paid to the danger that downside risks might increase should infections rise. The future of consumer spending is also uncertain.

Under these circumstances, the Rohto Group has created the slogan of "Connect for Well-being," suggesting people around the world living energetically and happily each day, both physically and mentally, throughout the various stages of their lives. We are endeavoring to further increase corporate value. To this end, we are working toward the realization of the "Management Vision 2030".

In total, net sales were 42,315 million yen. In Japan, sales rose despite a resurgence of COVID-19 infections as consumers got tired of self-restraint and began to spend more. Overseas, while the risk of the coronavirus variants spread is still imminent, COVID-19 vaccination rates increased and signs of economic recovery were seen in some regions.

Regarding profits, there was a sharp increase at all levels. Due to higher sales and efficient use of selling, general and administrative expenses, operating income, ordinary income and profit attributable to owners of parent increased to 6,008 million yen, 6,521 million yen and 4,731 million yen, respectively.

Note: Beginning with the first quarter of the fiscal year ending on March 31, 2022, the Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29). As a result, the accounting treatment for revenue differs from the first quarter of the previous fiscal year. The rate of change from the prior first quarter year was not given in the narrative. If we were to apply the new revenue recognition standard to the prior first quarter, the rate of change was as follows: sales rose 15.4%, operating income 67.6%, ordinary income 71.1%, and profit attributable to owners of parent 169.3% year-on-year.

Results by reportable segment are as follows.

Japan

Sales to customers were 26,380 million yen.

Although the third state of emergency was declared, sales of sunscreens, contact lens and contact lens care solution increased, and "Melano CC" and "Deoco" continued to perform well. "Rohto V5 Grain" and the Chinese herbal medicine brand "Wakansen" also sold well.

Segment profit (operating income) was 3,913 million yen due to efforts to make efficient use of selling, general and administrative expenses.

Note: As described in the note for "(1) Explanation of Results of Operations," if we were to apply the new revenue recognition standard to the prior first quarter, sales rose 10.1% and operating income 50.7% year-on-year.

America

Sales to customers decreased 5.1% year-on-year to 2,021 million yen.

Sales of eye drops and sunscreens performed well as falling COVID-19 infections increasingly led people to venture outdoors, while sales of Mentholatum Ointment decreased following extraordinary demand related to the coronavirus last year.

2

ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the First Quarter of FY3/22

Despite slow sales, segment profit (operating income) turned profitable at 106 million yen (compared with 69 million yen loss in prior first quarter) due to reductions in advertising expenses.

Europe

Sales to customers sharply increased 39.3% year-on-year to 2,580 million yen.

Sales of the leading anti-inflammatory analgesic products and "Hada-Labo" performed well. There were also signs of recovery at Dax Cosmetics Spolka Z Organiczona Odpowiedzlalnoscia, which posted sluggish cosmetics sales in the previous fiscal year due to the COVID crisis.

Segment profit (operating income) sharply increased 300.1% year-on-year to 235 million yen due to strong sales.

Asia

Sales to customers significantly increased 30.7% year-on-year to 10,844 million yen.

Sales of sunscreens, lip balms, and eye drops recovered and performed well as a fall in COVID-19 infections led to greater opportunities to go outside. Additionally, demand for the "Acnes" a treatment for acne surged due to skin problems associated with mask use. In our core market of China, sales grew strongly as the market steadily recovered from the impact of COVID-19.

Segment profit (operating income) significantly increased 52.1% year-on-year to 1,603 million yen due to higher sales.

Others

In "Others," excluded from reportable segments, sales to customers increased 16.7% year-on-year to 488 million yen. Segment profit (operating income) increased 26.9% year-on-year to 37 million yen.

(2) Explanation of Financial Position

Total assets at the end of the first quarter increased 6,640 million yen from the end of the previous fiscal year to 232,431 million yen. This was mainly due to increases of 5,379 million yen in cash and deposit, 1,948 million yen in other under property, plant and equipment, and 1,577 million yen in merchandise and finished goods, while there was a decrease of 5,628 million yen in electronically recorded monetary claims-operating.

Total liabilities increased 2,086 million yen from the end of the previous fiscal year to 71,264 million yen. This was mainly due to decreases of 7,629 million yen in accrued expenses and 2,705 million yen in income taxes payable, while there were increases of 10,451 million yen in other current liabilities and 3,938 million yen in notes and accounts payable-trade.

Net assets increased 4,553 million yen from the end of the previous fiscal year to 161,166 million yen. This was mainly due to increases of 2,108 million yen in retained earnings and 2,787 million yen in foreign currency translation adjustment, while there was a decrease of 387 million yen in valuation difference on available-for-sale securities.

(3) Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements

There is no change in the full-year consolidated earnings forecast that was released on May 12, 2021. Results of operations for the first quarter trended generally in line with our plan.

Note: The forecasts are based on information available at the time this report was prepared. Actual results of operations may differ from the forecasts depending on various factors.

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