Takara Bio : Consolidated Financial Statements for the Third Quarter Ended December 31, 2021

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The original disclosure in Japanese was released on February 10, 2022 at 15:00 (GMT+8)

Consolidated Financial Statements for the Third Quarter Ended December 31, 2021 FY2022 (April 1, 2021 - March 31, 2022) [UNAUDITED]

February 10, 2022

Takara Bio Inc.

Tokyo Stock Exchange (1st section) 4974 https://www.takara-bio.co.jp Koichi Nakao, President & CEO

Takuya Kakemi, Executive Officer, Head of Corporate Management Division

Tel. [phone]

February 14, 2022

-

Yes

Financial results information meeting:No

Notes: 1. The accompanying financial statements have been prepared in accordance with accounting principles and practices generally accepted in Japan.

2. Amounts are rounded down to the nearest million yen.

1. Results for the nine months ended December 31, 2021 (Apr. 1, 2021 - December 31, 2021)

1. Consolidated operating results

(Percentages indicate changes from the same period of the previous fiscal year.)

						Nine months ended			Nine months ended
						Dec. 31, 2021			Dec. 31, 2020
				(Millions of yen)	(%)		(Millions of yen)	(%)
	Net sales			45,659	54.5		29,549	20.3
	Operating profit			19,926	126.7		8,791	126.6
	Ordinary profit			20,154	126.0		8,919	128.9
	Net income (loss) attributable to owners of			14,364	150.8		5,726	111.4
	parent
	Net income per share (in yen)			119.29			47.56
	Fully diluted net income per share (in yen)			-			-
	(Note) Comprehensive income			17,080	245.7		4,940	226.6
(2) Consolidated financial position
						As of Dec. 31, 2021		As of Mar 31, 2021
								(Millions of yen)		(Millions of yen)
	Total assets			106,116			89,750
	Net assets			89,455			74,302
	Equity ratio (%)			84.1			82.7
	Net assets per share (in yen)			741.35			616.05
	(Reference) Equity			89,270			74,181
2. Dividends
									Annual dividends per share in yen
		Year ended			Year ending		Year ending
		Mar. 31, 2021			Mar. 31, 2022		Mar. 31, 2022 (Forecast)
	First quarter end	-				-
	Second quarter end	0.00		0.00
	Third quarter end	-				-
	Year end	16.00						30.00
	Annual	16.00						30.00

(Note) Revision of dividend payment forecast since the most recently announced payment forecast: Yes

The original disclosure in Japanese was released on February 10, 2022 at 15:00 (GMT+8)

3. Forecast for the year ending March 31, 2022 (Apr. 1, 2021 - Mar. 31, 2022)

(Percentages indicated changes from the same period of the previous fiscal year.)

	Year ending Mar. 31, 2022
	(Millions of yen)	(%)
Net sales	65,000	41.0
Operating profit	26,000	86.3
Ordinary profit	26,200	85.0
Net income attributable to owners of the parent	18,500	93.8
Net income per share (in yen)	153.63

[Note] Revision of financial forecast since the most recently announced payment forecast: Yes

• Others
• 1. Changes in subsidiaries during the nine months ended December 31, 2021 (Changes in specified subsidiaries resulting in change of scope) ： No Newly included: － (Name)
     Excluded: － (Name)
  2. Application of special accounting methods to the consolidated quarterly financial statements: No
  3. Changes in accounting policies, changes in accounting estimates, and retrospective restatement
  4. 1. Changes based on revisions of accounting standard： Yes
     2. Changes in accounting policies other than 1)： No
     3. Changes in accounting estimates： No
     4. Restatement： No

NOTE: For details, please refer to "(4) Notes to Consolidated Quarterly Financial Statements (Changes in Accounting Policies)" of "2. Consolidated Quarterly Financial Statements and Primary Notes" on page 9 of the attached material.

1. Number of outstanding shares (Common stock)

1. Number of outstanding shares at year end (Treasury stocks are included)

	As of December 31, 2021	120,415,600
	As of March 31, 2021	120,415,600
2)	Number of treasury stocks at year end
	As of December 31, 2021	-
	As of March 31, 2021	-
3)	Average number of outstanding shares
	As of December 31, 2021	120,415,600
	As of December 31, 2020	120,415,600

• These quarterly financial statements are not subject to auditing.
• Comment regarding appropriate use of earnings forecasts and other special notes
  Forward-looking statements contained in this document are determined by the Takara Bio Inc. (the "Company") based on information currently available to the Company and include a number of uncertainties. Actual results could differ from these forecasts due to changes in conditions that occur in the future. For information regarding the above, please refer to "1. Overview of Financial Results for the nine months ended December 31, 2021 (4) Qualitative Information Regarding Consolidated Forecasts", on page 2 of the attached document.

The original disclosure in Japanese was released on February 10, 2022 at 15:00 (GMT+8)

Contents of the attached document
1. Overview of Financial Results for the nine months ended December 31, 2021……………………………………………...	2
(1) Overview of Financial Results……………………………………………………….………….………….………….....	2
(2) Overview of Financial Position………………………………………………...…………………………...…….............	2

1. Overview of Cash Flows…………………………………………………………….…………………………….……... 2
2. Qualitative Information Regarding Consolidated Forecasts..…………………………………………………………….. 2

2. Consolidated Quarterly Financial Statements and Primary Notes............................................................................................	4
(1) Consolidated Quarterly Balance Sheets………………………………………………………………………...................	4
(2) Consolidated Quarterly Statements of Profit or Loss and Consolidated Quarterly Statements of Comprehensive Income..........	6
(Consolidated Quarterly Statements of Profit or Loss)
(For the nine months ended December 31, 2021)………………………………………………………………….....	6
(Consolidated Quarterly Statements of Comprehensive Income)
(For the nine months ended December 31, 2021)…………………………………………………………………….	7
(3) Consolidated Quarterly Statements of Cash Flows ……………………………………………………………………….	8
(4) Notes to Consolidated Quarterly Financial Statements…………………………………………………………………...	9
(Notes on Premise of Going Concern) …………………………………………………………………………………..	9
(Notes in case of Changes in Marked Amount of Shareholders' Equity)………………………………………………..	9
(Changes in Subsidiaries during the nine months ended December 31, 2021) ………………………………………....	9
(Changes in Accounting Policies) ………………………………………………..…………..…………..………….….	9
(Additional Information)………………………………………………..…………..…………..…………..…………...	9
(Segment Information)……………………………………………………………………………..……………….…...	9

3. Supplementary Information………………………………………………………………………………………………….. 10

1. Trends in Key Indicators for Business Management…………………………………………………………………….. 10
2. Comparative Consolidated Statement of Income ……………………………………………………………………….. 11
3. Comparative Statement of Income Relating to Consolidated Financial Forecasts………………………………………. 12

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The original disclosure in Japanese was released on February 10, 2022 at 15:00 (GMT+8)

1. Overview of Financial Results for the nine months ended December 31, 2021

(1) Overview of Financial Results

The outlook for the global economy in the third quarter of the current fiscal year is uncertain due to the prolonged trade friction between the U.S. and China and the impact of the new Coronavirus disease (COVID-19).

Against these circumstances, Takara Bio Group is promoting initiatives to advance the development of fundamental biologics development technologies and become a biologics development company that continuously creates new modalities through the Reagents and Instruments and CDMO business under the six-yearLong-Term Management Plan FY2026, which ends in fiscal 2026, and the three-yearMedium-Term Management Plan FY2023, which ends in fiscal 20231.

In the third quarter of the fiscal year under review, although sales of Instruments and Gene Therapy decreased year on year, sales of Reagents and CDMO increased year on year. Especially in Reagents, in addition to sales of reagents for general research which are on a recovery trend, PCR test-related products for the new Coronavirus increased. Net sales increased to ¥45,659 million (up 54.5% year on year). Cost of sales increased to ¥11,559 million (up 39.3% year on year) due to such as an improvement in the cost of sales ratio in CDMO, and gross profit increased to ¥34,100 million (up 60.5% year on year). Selling, general and administrative (SG&A) expenses were ¥14,174 million (up 13.8% year on year), mainly due to an increase in personnel expenses and R&D expenses. Operating profit was ¥19,926 million (up 126.7% year on year).

As a result of the increase in operating profit, ordinary profit increased to ¥20,154 million (up 126.0% year on year), income before income taxes and others increased to ¥20,114 million (up 140.6% year on year), and net income attributable to owners of the parent increased to ¥14,364 million (up 150.8% year on year).

Since our group is a single segment, the disclosure by segment is omitted.

(2) Overview of Financial Position

Total assets at the end of the third quarter under review were ¥106,116 million, an increase of ¥16,365 million from the end of the previous fiscal year. This was mainly due to an increase of ¥9,358 million in cash and deposits and an increase of ¥5,609 million in property, plant and equipment resulting from interior finishing work for a new office building of Takara Bio USA, Inc. and our acquisition of manufacturing facilities.

Total liabilities at the end of the third quarter under review were ¥16,660 million, an increase of ¥1,212 million from the end of the previous fiscal year. This was mainly due to an increase of ¥1,971 million in other current liabilities, despite a decrease of ¥769 million in notes and accounts payable trade.

Total net assets at the end of the third quarter under review were ¥89,455 million, an increase of ¥15,153 million from the end of the previous fiscal year. This was mainly due to an increase of ¥12,437 million in retained earnings and an increase of ¥2,615 million in foreign currency translation adjustments due to the yen's depreciation.

(3) Overview of Cash Flows

Net cash provided by operating activities amounted to ¥15,401 million, an increase of ¥7,423 million from the same period of the previous fiscal year. This was mainly due to attributable to income before income taxes and others of ¥20,114 million, cash inflow from depreciation and amortization of ¥2,606 million, income taxes paid of ¥5,532 million, and cash outflow from an increase in inventories of ¥1,322 million.

Net cash used in investing activities amounted to ¥13,380 million, an increase of ¥11,705 million from the same period of the previous fiscal year. This was mainly due to payments into time deposits of ¥10,781 million, purchase of tangible and intangible fixed assets of ¥8,732 million, and proceeds from subsidies received of ¥3,960 million and withdrawal of time deposits of ¥2,215 million.

Net cash used in financing activities amounted to ¥2,034 million, an increase of ¥966 million from the same period of the previous fiscal year, mainly due to cash dividends paid of ¥1,923 million.

As a result of the above, the balance of cash and cash equivalents at the end of the third quarter of the current fiscal year, including the effect of exchange rate changes on cash and cash equivalents, increased by ¥626 million from the end of the previous fiscal year to ¥23,935 million.

(4) Qualitative Information Regarding Consolidated Forecasts

The financial forecast announced in the second quarter consolidated financial statements on November 9, 2021 have been revised. For details, please refer to "Notice Concerning Forecast Revisions of Financial Results and Dividend (Dividend Increase)" announced today (February 10, 2022).

1 FY2026 and FY2023 refer to the fiscal year ending March 31, 2026 and 2023, respectively.

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The original disclosure in Japanese was released on February 10, 2022 at 15:00 (GMT+8)

For comparison of the revised consolidated financial forecasts with the previous fiscal year's results and the previous financial forecasts, please refer to the "Comparative Statement of Income Relating to Consolidated Financial Forecasts" on page 12.

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