Euglena : Summary of Consolidated Financial Results for the Six Months Ended June 30, 2022 (Based on Japanese GAAP)

Translation

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results for the Six Months Ended June 30, 2022 (Based on Japanese GAAP)

					August 10, 2022
Company name:	Euglena Co., Ltd.
Stock exchange listing:	Tokyo
Stock code:	2931	URL http://www.euglena.jp/
Representative:	Representative Director, President	Mitsuru Izumo
Inquiries:	Executive Officer, CFiO	Tomohiro Wakahara	TEL [phone]
Scheduled date to file Quarterly Securities Report:	August 10, 2022
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results meeting:	Yes	(for analysts and institutional investors)

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the six months ended June 30, 2022 (from January 1, 2022 to June 30, 2022)

(1) Consolidated operating results (cumulative)							Percentages indicate year-on-year changes
		Net sales	Adjusted EBITDA*	Operating profit	Ordinary profit	Profit attributable
		to owners of parent
		Millions of yen	%	Millions of yen	%	Millions of yen		%	Millions of yen	%	Millions of yen		%
Six months ended June 30, 2022		21,584	179.0	2,220	929.1	(1,422)		-	(597)	-	(465)		-
Six months ended March 31, 2021	7,737	27.2	215	1.65	(511)		-	(130)	-	(196)		-
* Because management has shifted its focus to cash flow management, the Company now presents adjusted EBITDA as a key performance
indicator to show its capacity for generating free cash flows.
Note 1: Comprehensive income	Six months ended June 30, 2022	¥(481) million	[-%]
	Six months ended March 31, 2021	¥(199) million	[-%]

Note 2: Commencing the previous fiscal year, the Company has changed the last day of the accounting period from September 30 to December

31. Accordingly, the first six months of the fiscal year ended December 31, 2021 was the period from October 1, 2020 to March 31, 2021, and the percentage of year-on-year change indicates a comparison against that period.

	Earnings per share	Diluted earnings per share
	Yen	Yen
Six months ended June 30, 2022	(4.18)	-
Six months ended March 31, 2021	(2.10)	-

Note: The provisional accounting treatment associated with a business combination was finalized in the third quarter of the fiscal year ended December 31, 2021, and the figures for the six months ended March 31, 2021 are the figures after reflecting significant changes in the initial allocation of acquisition costs due to the finalization of the provisional accounting treatment.

(2) Consolidated financial position

			Total assets			Net assets	Equity ratio
			Millions of yen			Millions of yen	%
As of June 30, 2022			58,648		19,861	33.1
As of December 31, 2021		61,007		20,588	33.0
Reference: Equity	As of June 30, 2022	¥19,429	million
	As of December 31, 2021	¥20,155	million

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2. Cash dividends

			Annual dividends per share
	1st quarter-end	2nd quarter-end	3rd quarter-end	4th quarter-end	Fiscal year-end	Total
	Yen	Yen	Yen	Yen	Yen	Yen
Year ended December 31, 2021	-	0.00	-	-	0.00	0.00
Year ending December 31, 2022	-	0.00
Year ending December 31, 2022			-	-	0.00	0.00
(Forecast)

Note 1: Revision to cash dividend forecasts most recently announced: No

Note 2: As the fiscal year ended December 31, 2021 was a transitional period for the change in fiscal year that consisted of 15 months (from October 1, 2020 to December 31, 2021), the fourth quarter-end is indicated.

3. Forecast of consolidated financial results for the year ending December 31, 2022 (from January 1, 2022 to December 31, 2022)

Percentages indicate year-on-year changes

	Net sales		Adjusted EBITDA*	Operating profit	Ordinary profit		Profit attributable to	Earnings per
			owners of parent	share
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen		%	Millions of yen	%	Yen
Full year	44,000		-	2,100	-	-	-	-		-	-	-	-

Note: Revision to financial results forecast most recently announced: Yes

Reference: Adjusted EBITDA = EBITDA (Operating profit + Amortization of goodwill and Depreciation) + Subsidy income + Stock-related remuneration + Inventory step-up effect.

4. Notes

1. Changes in significant subsidiaries during the six months ended June 30, 2022 (changes in specified subsidiaries resulting in the change in scope of consolidation):
2. Application of special accounting methods for preparing quarterly consolidated financial statements:

No

No

(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:	Yes
Changes in accounting policies due to other reasons:	No
Changes in accounting estimates:	No
Restatement of prior period financial statements:	No

(4) Number of issued shares (common shares)

Total number of issued shares at the end of the period (including treasury shares)

	As of June 30, 2022	111,308,860	shares	As of December 31, 2021	111,161,886	shares
Number of treasury shares at the end of the period
	As of June 30, 2022	20,473	shares	As of December 31, 2021	20,431	shares
Average number of shares during the period (cumulative from the beginning of the fiscal year)
	Six months ended June 30, 2022	111,204,435	shares	Six months ended March 31, 2021	93,464,484	shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of financial results forecast, and other special matters
  The forward-looking statements, including the earnings forecasts, shown in this document are based on information currently available to the Company and on certain assumptions deemed to be reasonable. These statements do not purport that the Company pledges to realize such statements.

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Quarterly consolidated financial statements

Consolidated balance sheets

			(Millions of yen)
		As of December 31, 2021	As of June 30, 2022
Assets
Current assets
Cash and deposits	9,900	9,471
Notes and accounts receivable - trade	3,182	2,902
Securities	285	282
Merchandise and finished goods	4,572	3,669
Work in process	744	562
Raw materials and supplies	1,144	1,226
Other	673	1,373
Allowance for doubtful accounts	(64)	(52)
Total current assets	20,438	19,435
Non-current assets
Property, plant and equipment
Buildings and structures	7,314	7,367
Machinery, equipment and vehicles	3,375	3,465
Tools, furniture and fixtures	1,396	1,354
Land	2,499	2,499
Leased assets	109	104
Construction in progress	5	5
Accumulated depreciation	(7,849)	(8,053)
Total property, plant and equipment	6,851	6,743
Intangible assets
Goodwill	13,034	12,629
Customer-related assets	17,011	16,335
Other	1,858	1,726
Total intangible assets	31,903	30,691
Investments and other assets
Investment securities	397	516
Guarantee deposits	317	321
Deferred tax assets	740	884
Other	395	94
Allowance for doubtful accounts	(37)	(38)
Total investments and other assets	1,813	1,778
Total non-current assets	40,569	39,213
Total assets		61,007	58,648

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			(Millions of yen)
		As of December 31, 2021	As of June 30, 2022
Liabilities
Current liabilities
Notes and accounts payable - trade	1,082	974
Short-term borrowings	2,287	2,495
Accounts payable - other	3,715	3,622
Contract liabilities	-	1,721
Lease obligations	8	8
Income taxes payable	486	817
Provision for bonuses	267	191
Provision for point card certificates	1,202	-
Provision for business restructuring	31	-
Other	1,552	1,164
Total current liabilities	10,634	10,995
Non-current liabilities
Long-term borrowings	22,598	21,323
Lease obligations	14	12
Provision for retirement benefits for directors (and other	52	17
officers)
Retirement benefit liability	390	407
Asset retirement obligations	427	429
Deferred tax liabilities	6,297	5,593
Other	4	8
Total non-current liabilities	29,784	27,792
Total liabilities	40,418	38,787
Net assets
Shareholders' equity
Share capital	13,888	13,949
Capital surplus	11,602	11,663
Retained earnings	(5,273)	(6,102)
Treasury shares	(34)	(34)
Total shareholders' equity	20,183	19,477
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	(2)	0
Deferred gains or losses on hedges	-	(0)
Foreign currency translation adjustment	(20)	(42)
Remeasurements of defined benefit plans	(5)	(5)
Total accumulated other comprehensive income	(27)	(47)
Share acquisition rights	427	427
Non-controlling interests	5	3
Total net assets	20,588	19,861
Total liabilities and net assets		61,007	58,648

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Consolidated statements of income (cumulative) and consolidated statements of comprehensive income (cumulative)

Consolidated statements of income (cumulative)

			(Millions of yen)
	Six months ended		Six months ended
	March 31, 2021		June 30, 2022
Net sales	7,737	21,584
Cost of sales		2,073	6,417
Gross profit		5,664	15,166
Selling, general and administrative expenses		6,175	16,589
Operating loss		(511)	(1,422)
Non-operating income
Interest income	0	0
Foreign exchange gains	0	82
Subsidy income	325	688
Commission income	1	17
Surrender value of insurance policies	24	255
Share of profit of entities accounted for using equity method	-	35
Other		53	49
Total non-operating income		405	1,130
Non-operating expenses
Interest expenses	14	275
Share of loss of entities accounted for using equity method	8	-
Share issuance costs	0	-
Other		0	29
Total non-operating expenses		24	305
Ordinary loss		(130)	(597)
Extraordinary income
Gain on reversal of share acquisition rights	12	0
Gain on sale of non-current assets		0	3
Total extraordinary income		12	3
Extraordinary losses
Loss on sale of non-current assets		0	0
Total extraordinary losses		0	0
Loss before income taxes		(117)	(595)
Income taxes - current	74	714
Income taxes - refund	-	(102)
Income taxes - deferred		1	(745)
Total income taxes		76	(133)
Loss		(194)	(462)
Profit attributable to non-controlling interests		1	3
Loss attributable to owners of parent		(196)	(465)

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