Takara : Consolidated Financial Statements for the First Quarter Ended June 30, 2021

The original disclosure in Japanese was released on August 3, 2021 at 15:30 (GMT+9)

Consolidated Financial Statements for the First Quarter Ended June 30, 2021 FY2022 (April 1, 2021 - March 31, 2022) [UNAUDITED]

Company name:	Takara Holdings Inc.
Stock exchange listings:	Tokyo Stock Exchange (1st section)
Code number:	2531
URL:	https://www.takara.co.jp/
Company representative:	Mutsumi Kimura, President
Contact:	Masakazu Usami, General Manager of Financial & Investor Relations Dept.
	TEL：[phone]
Quarterly statement filing date (as planned):	August 11, 2021

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 three months ended June 30, 2021 (April 1, 2021 - June 30, 2021)

1. Consolidated Operating results

Note: Percentages indicated changes from the same period of the previous fiscal year.

	Three months ended	Three months ended
	June 30, 2021		June 30, 2020
	(Millions of yen)	(%)	(Millions of yen)	(%)
Net sales	68,806	-	65,378	(2.9)
Operating income (loss)	12,339	538.6	1,932	(45.5)
Ordinary income (loss)	12,742	482.6	2,187	(44.1)
Net income (loss) attributable to owners of the parent	5,349	362.7	1,156	(41.3)
Net income (loss) per share (Yen)	27.06		5.85
Fully diluted net income per share (Yen)	-		-
Note: Comprehensive income (loss)	13,237	-	3	(99.8)

Since the "Accounting Standard for Revenue Recognition" (Corporate Accounting Standard No. 29), etc. has been adopted from FY2022, the above results is the amount after applying the accounting standard. Therefore, the rate

	of increase and decrease concerning sales compared to the previous year and is not stated.
(2) Consolidated Financial position
					As of June 30, 2021		As of March 31, 2021
						(Millions of yen)		(Millions of yen)
	Total assets			322,180		306,918
	Net assets			197,987		191,535
	Equity ratio (%)			49.8		51.1
	(Reference) Equity			160,418		156,884
2. Dividends
						Dividend per share (Yen)
		Year ended March 31,		Year ending March 31,	Year ending March 31,
2021				2022		2022(Forecast)
	First quarter end	-		-
	Second quarter end	-				-
	Third quarter end	-				-
	Year end	21.00				24.00
	Annual	21.00				24.00

Note: Correction of dividend forecast from the most recent dividend forecast : Yes

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

	Note: Percentages indicated changes from the same period of the previous fiscal year.
	Six months ending September 30,	Year ending March 31,
	2021		2022
	(Millions of yen)	(%)	(Millions of yen)	(%)
Net sales	140,000	-	275,000	-
Operating income (loss)	18,100	213.0	28,600	32.4
Ordinary income (loss)	18,200	206.4	29,000	32.2
Net income (loss) attributable to owners of the parent	7,800	182.4	13,400	26.7
Net income per share (Yen)	39.45		67.78

Note: Correction of financial forecast from the most recent financial forecast : Yes

Since the "Accounting Standard for Revenue Recognition" (Corporate Accounting Standard No. 29), etc. has been adopted from FY2022, the above forecast is the amount after applying the accounting standard. Therefore, the rate of increase and decrease concerning sales compared to the previous year and is not stated.

4. Others

1. Material changes in subsidiaries during this period

(Changes in specified subsidiaries that caused a change in the scope of consolidation) ： No

1. Accounting procedures specific to quarterly consolidated financial statements ： No
2. Changes in accounting policies, accounting estimates and retrospective restatement
3. 1. Changes based on revisions of accounting standard ： Yes
   2. Changes other than ones based on revisions of accounting standard ： No
   3. Changes in accounting estimates ： No
   4. Restatement ： No
4. Number of outstanding shares (common stock)
5. 1. Number of outstanding shares at the end of each period (Treasury stocks are included):

	As of June 30, 2021 ：	199,699,743 shares
	As of March 31, 2021 ：	199,699,743 shares
2)	Number of treasury stocks at the end of each period:
	As of June 30, 2021 ：	1,995,490 shares
	As of March 31, 2021 ：	1,995,468 shares
3)	Average number of outstanding shares in each period
	Three months ended June 30, 2021	：	197,704,261 shares
	Three months ended June 30, 2020	：	197,704,620 shares

Contents of the attached document

1. Qualitative Information for the Three Months Ended June 30, 2021………………………………………………………	2
(1) Consolidated Financial Results ……………………………………………………………………….………………	2
(2) Consolidated Financial Position ………………………………………………………………………………………	4
(3) Qualitative Information Regarding Consolidated Forecasts…………………………………..………………………	5
2. Consolidated Quarterly Financial Statements and Primary Notes…………………………………………………………	7
(1) Consolidated Balance Sheets……………………………………………………………………….…………………	7
(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income………………………	9
(Consolidated Statements of Income) …………………………………………………………………………..……	9
(For the Three Months Ended June 30, 2021 and 2020)
(Consolidated Statements of Comprehensive Income) ………………………………………………………………	10
(For the Three Months Ended June 30, 2021 and 2020)
(3) Notes to Consolidated Financial Statements…………………………………………………………….……………	11
(Notes on Premise of Going Concern) ………………………………………………………………………………	11
(Notes on Material Changes in Shareholders' Equity) ………………………………………………………………	11
(Changes in Accounting Policies) ……………………………………………………………………………………	11
(Segment Information) ………………………………………………………………………………………………	12
(Revenue Recognition) ………………………………………………………………………………………………	13
(Significant Subsequent Events) ……………………………………………………………………………………	13

○ Supplement for the Consolidated Quarterly Financial Statements

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1. Qualitative Information for the Three Months Ended June 30, 2021

The Accounting Standard for Revenue Recognition, etc. have been adopted from the beginning of the three months ended June 30, 2021. As a result, net sales in the three months ended June 30, 2021 have been recorded in accordance with the standard which is different from the standard applied to net sales in the three months ended June 30, 2020. Therefore, concerning explanation on net sales, gross profit, and SG&A expenses on a consolidated basis and of the Takara Shuzo segment, which were significantly impacted by the change in the standard, the rate of increase and decrease compared to the same period of the previous fiscal year is not stated. The impact on income items from operating income onwards is immaterial. The effect of the application of the Accounting Standard for Revenue Recognition, etc. is described in "2. Consolidated Quarterly Financial Statements and Primary Notes (3) Notes to Consolidated Financial Statements (Changes in Accounting Policies)."

1. Consolidated Financial Results
   In the three months ended June 30, 2021, driven by the favorable performance of the Takara Bio Group, net sales were ¥68,806 million, gross profit was ¥28,335 million, and SG&A expenses were ¥15,995 million yen. Operating income grew 538.6% year on year to ¥12,339 million, while ordinary income rose 482.6% year on year to ¥12,742 million, increasing both sales and income, absorbing the impact of the Accounting Standard for Revenue Recognition, etc. In addition, net income attributable to owners of the parent increased 362.7% year on year to ¥5,349 million, although loss on voluntary product recall of ¥1,576 million was posted under extraordinary loss.
   Results by business segment were as follows.

[Takara Shuzo]

In the three months ended June 30, 2021, excluding the effect of application of the Accounting Standard for Revenue Recognition, etc., sales of shochu increased due to favorable performance of ko-type shochu, while sales of raw alcohol, etc. and sales of light-alcohol refreshers which were impacted by voluntary product recall decreased.

As a result, net sales for Takara Shuzo were ¥29,794 million, including the effect of the application of the Accounting Standard for Revenue Recognition, etc. of ¥(7,370) million. Cost of sales was ¥22,203 million, and gross profit was ¥7,590 million. SG&A expenses were ¥6,112 million due to efforts for cost reduction in addition to the effect of the application of the Accounting Standard for Revenue Recognition, etc. of ¥(7,209) million. Operating income was up 102.1% year on year to ¥1,478 million.

[Takara Shuzo International Group]

In the three months ended June 30, 2021, net sales of the Overseas Alcoholic Beverages Business increased 34.2% year on year to ¥3,299 million, mainly due to continued growth in sales of whiskey in the U.K. and the U.S. as well as an increase in sales of sake which had decreased in the previous fiscal year, affected by the coronavirus crisis. Net sales of the Japanese Food Wholesale Business in overseas markets increased 10.0% year on year to ¥18,064 million, primarily due to increased sales of products for home delivery and takeout in Europe.

As a result, net sales for the Takara Shuzo International Group increased 13.2% year on year to ¥21,068 million. Cost of sales increased 8.3% year on year to ¥14,333 million. Consequently, gross profit increased 25.2% year on year to ¥6,735 million. SG&A expenses were down 4.8% year on year to ¥4,995 million, primarily due to a decline in personnel expenses, and operating income was up 1206.8% year on year to ¥1,740 million.

[Takara Bio Group]

In the three months ended June 30, 2021, although sales of gene therapy decreased year on year, sales of reagents, instruments, and CDMO increased year on year. In sales of reagents and instruments, PCR testing-related products for the new coronavirus contributed to the increase.

As a result, net sales for the Takara Bio Group increased 120.1% year on year to ¥15,272 million. Cost of sales decreased

4.5% year on year to ¥2,133 million due to a change in sales mix and an improvement in the production utilization rate. Consequently, gross profit increased 179.3% year on year to ¥13,138 million. SG&A expenses were up 15.6% year on year to ¥4,633 million, primarily due to an increase in personnel expenses and R&D expenses. Operating income increased 1125.5% year on year to ¥8,504 million.

[Other]

In the three months ended June 30, 2021, net sales of the Other segment increased 10.5% year on year to ¥7,578 million. Cost of sales increased 7.7% year on year to ¥6,499 million. Consequently, gross profit increased 30.7% year on year to ¥1,078

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million. SG&A expenses fell 4.0% year on year to ¥453 million, and operating income was up 77.4% year on year to ¥624 million.

Breakdown of sales results by product category

		Equivalent Period of	Period under Review
		Previous Fiscal Year	YoY
	Segment	(from April 1, 2021,
	(From April 1, 2020,	Comparison
		to June 30, 2021)
		to June 30, 2020)
	Product category	Amount (Millions of yen)	Amount (Millions of yen)	(%)
Takara Shuzo
	Shochu	12,445	10,654	85.6
	Sake	3,507	2,500	71.3
	Light-alcohol refreshers	11,886	9,109	76.6
	Other alcoholic beverages	1,352	1,319	97.6
	Hon Mirin	3,127	2,131	68.1
	Other seasonings	2,461	2,053	83.4
	Raw alcohol, etc.	2,821	2,025	71.8
	Total	37,601	29,794	79.2
Takara Shuzo International Group
	Overseas Alcoholic	2,458	3,299	134.2
	Beverages Business
	Japanese Food
	Wholesales Business in	16,427	18,064	110.0
	overseas markets
	Other	28	16	57.6
	Elimination of intra-Group	(297)	(310)	－
	transaction on consolidation
	Total	18,616	21,068	113.2
Takara Bio Group
	Reagents	5,515	12,873	233.4
	Instruments	166	390	234.9
	CDMO	1,137	1,955	171.9
	Gene therapy	119	53	44.7
	Total	6,938	15,272	220.1
	Reported segment total	63,156	66,134	104.7
Other	6,858	7,578	110.5
	Segment total	70,014	73,712	105.3
Sales not allocated to
business segments and	(4,635)	(4,906)	－
intersegment transactions
	Total	65,378	68,806	105.2
Notes: 1. Amounts include alcohol tax.

2. From the three months ended June 30, 2021, the names of the product categories of Takara Bio Group have been changed from "Research reagents," "Scientific instruments" and "Contract services" to "Reagents," "Instruments" and "CDMO."

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