Yakult Honsha : Financial Report for the third quarter Ended December 31, 2022 (1.10 MB)

Consolidated Financial Results for the 3rd Quarter ended December 31, 2022 (Japanese Generally Accepted Accounting Principles)

February 10, 2023

Name of company

Yakult Honsha Co., Ltd.

Stock exchange listing

Prime Market in Tokyo Stock Exchange

Code number

2267

URL

https://www.yakult.co.jp

Representative

President and Representative Director

Hiroshi Narita

Contact person

Managing Executive officer

Shuichi Watanabe

TEL [phone]

Scheduled date of filing Statutory quarterly financial report

February 10, 2023

Scheduled date of payment of dividends

Preparation of support documentation of results : Yes

Holding of briefing for analysts and institutional investors : Yes

(Figures less than 1 million yen have been rounded down)

1. Consolidated financial results for the 3rd quarter of FY2022, ended December 31, 2022 (April 1, 2022 - December 31, 2022)

(1) Consolidated Financial Results (Accumulated)

(Percentage figures presents year-on-year changes)

Net Sales

Operating Profit

Ordinary Profit

Profit attributable to

owners of parent

million yen

%

million yen

%

million yen

%

million yen

%

3Q FY2022

367,868

16.2

58,342

25.1

68,478

17.1

46,283

10.1

3Q FY2021

316,539

6.9

46,634

16.4

58,499

10.0

42,022

12.5

(Note) Comprehensive income for 3Q FY2022 110,536 million yen 䡗98.0%䡙 3Q FY2021

55,819 million yen 䡗162.6%䡙

Basic earnings per Share

Diluted earnings per Share

yen

yen

3Q FY2022

296.16

3Q FY2021

261.96

(2) Consolidated Financial Position

Total Assets

Net Assets

Equity to Asset Ratio

million yen

million yen

%

3Q FY2022

770,194

562,061

66.2

FY2021

672,855

484,935

66.3

(Ref.) Equity for 3Q FY2022 509,941 million yen FY2021 446,068 million yen

2. Dividends

	Dividends per Share
1st Qtr.	2nd Qrt.	3rd Qrt.	Year End	Total
yen	yen	yen	yen	yen
FY2021	36.00		36.00	72.00
FY2022	45.00
FY2022			45.00	90.00
(Forecast)

(Note) Revision of the latest dividend forecast : No

3. Forecast for consolidated financial results for FY2022 (April 1, 2022 - March 31, 2023)

(Percentage figures presents year-on-year changes)

	Net Sales		Operating Profit	Ordinary Profit	Profit attributable to	Basic earnings per
		owners of parent	Share
	million yen		%	million yen	%	million yen	%	million yen	%	yen
Annual	481,000		15.9	64,000	20.3	79,000	15.2	50,000	11.3	320.52

(Note) Revision of the latest financial forecast : No

*Notes

1. Changes of important subsidiaries during the period : No
   (Change in specified subsidiary with change in scope of consolidation)
2. Special Accounting Treatment for Preparation of the Quarterly Consolidated Financial Statements : Yes (Note) Details are stated on pg. 10 under "Notes on Quarterly Consolidated Financial Statements."
3. Change in accounting policies and estimates, correction of prior period errors

(a) Change in accounting policy with revision of accounting standard :	No
(b) Change in account policy other than (a) :		No
(c) Change in accounting estimates :		No
(d) Correction of prior period errors :		No
(4) Shares issued (common stock)
(a) Number of shares issued (including treasury stocks)
3Q FY2022	171,045,418
FY2021	171,045,418
(b) Number of treasury stocks	15,049,976
3Q FY2022
FY2021	12,450,484
(c) Weighted average of number of shares (cumulative figure for quarter)
3Q FY2022	156,278,780
3Q FY2021	160,417,739

• This financial report is not included in quarterly reviews by our external auditors.
• Explanation for the appropriate use of the financial forecast and other comments Note concerning statements about the future, etc.
  The statements about the future, including earnings projections, contained in this report are based on information currently available as well as certain assumptions considered reasonable. Actual results may vary considerably from these projections owing to a range of factors.
  Assumptions upon which the forecast is based and notes on the use of the forecast are stated on pg. 5 under "Disclaimer on Future Outlook Including Consolidated Financial Results Forecast."

Procedure for obtaining supplementary information on financial results

We plan to hold a conference call for analysts and institutional investors on February 10, 2023. Materials used in the conference call will be posted on the company's website.

Yakult Honsha Co., Ltd. (2267) Financial Report for the 3rd Quarter of FY2022 Ended December 31, 2022

Table of Contents

1. Qualitative Information Regarding Quarterly Consolidated Financial Results	2
(1)	Business Performance Overview	2
(2)	Financial Position	5
(3) Disclaimer on Future Outlook Including Consolidated Financial Results Forecast	5
2. Quarterly Consolidated Financial Statements and Notes	6
(1)	Quarterly Consolidated Balance Sheet	6
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	8
	Quarterly Consolidated Statement of Income	8
	Quarterly Consolidated Statement of Comprehensive Income	9
(3)	Notes on Quarterly Consolidated Financial Statements	10
	(Notes Related to Going Concern Assumption)	10
	(Notes on Significant Changes in the Amount of Shareholders' Equity)	10
	(Special Accounting Treatment for Preparation of the Quarterly Consolidated Financial
	Statements)	10
	(Notes to Quarterly Consolidated Statements of Income)	10
	(Segment Information)	11

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Yakult Honsha Co., Ltd. (2267) Financial Report for the 3rd Quarter of FY2022 Ended December 31, 2022

1. Qualitative Information Regarding Quarterly Consolidated Financial Results

(1) Business Performance Overview

1 Performance Overview

During the third quarter of the fiscal year ending March 31, 2023, despite expectations of a recovery in economic conditions as economic and social activities proceeded to return to normal, the Japanese economy remained susceptible to downward risks due to global monetary tightening and other factors and to the impacts of rises in the cost of living and other factors.

Against this background, the Yakult Group worked to build awareness and understanding of the probiotics that constitute the bedrock of our operations, while striving to communicate the superiority of our products. The Group also sought to improve its performance by enhancing its sales organization, conducting research and development for new products, upgrading its production facilities, and actively engaging in its international and pharmaceutical businesses.

Following these efforts, consolidated net sales for the nine months of this fiscal year rose 16.2% from the same period of the previous year to 367,868 million yen. Operating profit increased 25.1% to 58,342 million yen, while ordinary profit increased 17.1% to 68,478 million yen. Profit attributable to owners of parent increased 10.1% to 46,283 million yen.

2 Overview by Segment Food and Beverages (Japan)

In dairy products, Yakult focused on broadening recognition of the science behind its proprietary living Lactobacillus casei strain Shirota1 and Bifidobacterium breve strain Yakult by proactively conducting grassroots value dissemination initiatives, while also taking measures to prevent novel coronavirus infection.

In our home delivery channel, we utilized evidence in initiatives to encourage customers to drink Yakult products, focusing on the fermented milk drink Yakult 1000 and the Yakult 400 series. Further, we strengthened our customer contact points through our online ordering service, Yakult Delivery Net, and through the dissemination of information on our website and other means.

As for the retail store channel, we worked to improve visibility in store by introducing winter packaging for the New Yakult fermented milk drink series. We also conducted social media campaigns in our efforts to increase revenue.

In product-specific initiatives, we addressed in-store stock shortages of the fermented milk drink Y1000 by increasing production capacity from November 2022. In addition, we aimed to increase product recognition of Yakult 400W with the airing of TV commercials featuring Shiro Ito and Yo Oizumi. We also sought to boost the hard-type yogurt brand Sofuhl by launching Sofuhl Grape as a limited-time item in November.

In other beverages, we implemented price revisions in November in response to rising raw material costs and the sudden sharp rise in logistics, fuel, and other costs.

In addition, we conducted activities to commemorate the Tokyo Yakult Swallows winning the Central League championship and to thank everyone for their support.

As a result of these efforts, consolidated net sales for the Food and Beverages (Japan) segment

1 Classified as Lacticaseibacillus paracasei strain Shirota as of April 2020.

2

Yakult Honsha Co., Ltd. (2267) Financial Report for the 3rd Quarter of FY2022 Ended December 31, 2022

increased 16.8% from the same period of the previous fiscal year, totaling 179,733 million yen.

Food and Beverages (Overseas)

Yakult's operations outside Japan commenced in March 1964 with the establishment of Yakult Taiwan Co., Ltd., and now the manufacture and sale of Yakult outside of Japan spans 39 countries and regions centered around 29 companies and one research center, with average daily bottle sales of approximately 27.66 million bottles in December 2022.

Average daily bottle sales for January to December 2022, which is the accounting year for the overseas companies, was 31.54 million bottles.

The impact of the novel coronavirus varies across countries and regions depending on the extent of the infection's spread, as well as the policies and official guidance of local and national governments, among other factors. We are therefore taking measures appropriate to each location and following the instructions of governmental agencies as we conduct our operations and manufacturing activities.

a. The Americas

In the Americas, the fermented milk drink Yakult and other products are manufactured and sold by Yakult S/A Ind. E Com. (Brazil), Yakult S.A. De C.V. (Mexico), and Yakult U.S.A. Inc.

At Yakult U.S.A. Inc., introducing holiday packaging for Yakult and Yakult Light from October 2022, as well as boosting support for sales through publicity campaigns and other initiatives, resulted in a steady increase in sales figures.

As a result of these efforts, consolidated net sales in the Food and Beverages (The Americas) segment increased 36.1% from the same period of the previous year to 47,768 million yen.

b. Asia and Oceania

In Asia and Oceania, the fermented milk drink Yakult and other products are manufactured and sold by Hong Kong Yakult Co., Ltd.; Yakult (Singapore) Pte. Ltd.; PT. Yakult Indonesia Persada; Yakult Australia Pty. Ltd.; Guangzhou Yakult Co., Ltd.; Yakult (Malaysia) Sdn. Bhd.; Shanghai Yakult Co., Ltd.; Beijing Yakult Co., Ltd.; Yakult (China) Corporation; Yakult Vietnam Co., Ltd.; and Yakult Danone India Pvt. Ltd.; among others. In addition, Yakult Middle East FZCO and other companies import Yakult and other products for sale. At Yakult Myanmar Co., Ltd., we have temporarily suspended our sales and manufacturing activities in light of the political situation, among other considerations.

At PT. Yakult Indonesia Persada, we made efforts to increase sales revenue by launching sales of Yakult Light in the retail store channel in October 2022.

Meanwhile, Guangzhou Yakult Co., Ltd., Shanghai Yakult Co., Ltd., Beijing Yakult Co., Ltd., and Yakult (China) Corporation were impacted by the effects of lockdowns and other measures in response to the spread of the novel coronavirus, and activities in many districts were restricted.

As a result of the above, consolidated net sales in the Food and Beverages (Asia and Oceania) segment rose 10.6% from the same period of the previous year to 110,354 million yen.

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