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

February 10, 2022

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

(Nine Months Ended December 31, 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:	February 14, 2022
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 Third Quarter of the Fiscal Year Ending March 31, 2022 (April 1, 2021 - December 31, 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	%
Nine months ended Dec. 31, 2022	144,022	-	23,548	-	23,740	-	16,933	-
Nine months ended Dec. 31, 2021	129,611	△6.2	16,452	△9.2	16,816	△6.9	10,707	△14.8

Note: Comprehensive income (Millions of yen):	Nine months ended Dec. 31, 2022:	19,897	(-%)
		Nine months ended Dec. 31, 2021:	10,382	(10.0%)
	Basic net income	Diluted net income
	per share	per share
		Yen	Yen
Nine months ended Dec. 31, 2022		148.45	148.02
Nine months ended Dec. 31, 2021		93.87	93.60

Note 1: The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020 ), etc. from the beginning of the first quarter of the current fiscal year, and the figures for the third quarter are after the application of the said accounting standard, etc. Therefore, the percentage change from the same period of the previous year is not stated.

Note 2: The provisional accounting treatment for business combinations has been finalized at the end of the fiscal year endedMarch 31, 2022. The figures for the third 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 Dec. 31, 2022		265,056	177,395		64.5
As of Mar. 31, 2021		225,790	156,612		68.9
Reference: Shareholders' equity (Millions of yen):	As of Dec. 31, 2022: 171,028	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	-	15.00		-
Fiscal year ending Mar. 31, 2022						21.00		36.00
(forecast)
Note: Revisions to the most recently announced dividend forecast: Yes

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	195,000		7.6	28,000	21.8	28,000	17.1	19,500	16.5	170.95

Note: Revisions to the most recently announced consolidated forecast: Yes

* 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 Dec. 31, 2022:

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 Dec. 31, 2022:	4,019,198 shares	As of Mar. 31, 2021:	4,019,044 shares
3) Average number of shares outstanding during the period:
Nine months ended Dec. 31, 2022:	114,070,072 shares	Nine months ended Dec. 31, 2021:	114,070,149 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 Third Quarter of FY3/21

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	4
2. Quarterly Consolidated Financial Statements and Major Notes	5
(1)	Quarterly Consolidated Balance Sheets	5
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	7
(3)	Notes to Quarterly Consolidated Financial Statements	9
	Going Concern Assumption	9
	Significant Changes in Shareholders' Equity	9
	Application of Special Accounting Methods for Preparation of Quarterly Consolidated Financial Statements	9
	Changes in Accounting Policies	9
	Segment Information	11

1

ROHTO Pharmaceutical Co., Ltd. (4527) Financial Results for the Third Quarter of FY3/21

1. Qualitative Information on Quarterly Consolidated Financial Results

(1) Explanation of Operating Results

During the first nine months of the current fiscal year, the Japanese economy continued to face difficulties due to the impact of COVID-19, but economic activity showed signs of a gradual recovery following the lifting of the state of emergency declaration in October.

Under these circumstances, the Rohto Group is working toward the realization of the "Management Vision 2030" to further enhance its corporate value under the slogan of "Connect for Well-being" which suggest people around the world can enjoy happy and fulfilling lives in various stages of life with vigor and vitality both physically and mentally.

Net sales increased significantly to 144,022 million yen

In the same period of the previous fiscal year, net sales fell sharply due to the impact of COVID-19, but in the current fiscal year, vaccinations have progressed, economic activities have resumed in many countries, and a recovery trend have been shown in consumer sentiment.

The Company achieved a significant increase in all profit levels, with operating income of 23,548 million yen, ordinary income of 23,740 million yen, and net income attributable to owners of the parent of 16,933 million yen, as a result of the significant increase in sales and efforts to efficiently utilize selling, general and administrative expenses. Note: From beginning of 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 that of the previous consolidated cumulative third quarter. Therefore, the year-on-year changes are not stated here. Assuming that the new accounting standards had been applied in the fiscal year ended March 31, 2021, the year-on-year change would be: 16.9% increase in net sales, 1.74% improvement in the cost of sales ratio, 44.1% increase in operating income, 42.2% increase in ordinary income, and 59.9% increase in net income attributable to owners of the parent. Sales and all profit levels achieved record highs.

Results by reportable segment are as follows.

Japan

Sales to customers totaled 88,449 million yen.

Demand for eye drops rose as more people complaining of eye strain due to increased screen time in the COVID-19 pandemic. Therefore, Sales grew especially for high-end eye drops, while sales of "Melano CC," "Hada Labo," "Deoco" and "Rohto V5 Grain" continued to be strong. Moreover, the COVID-19(SARS-CoV-2) antigen rapid test kit also contributed to the increase in sales.

In addition, Nitten Pharmaceutical Co., Ltd. and Qualitech Pharma Co., Ltd, as well as Amato Pharmaceutical Products, Ltd., which became a subsidiary in August 2021, also contributed to the increase in sales.

Segment income (operating income) increased significantly to 15,253 million yen due to the substantial increase in sales and efficient use of selling, general and administrative expenses.

Note : As described in the (Note) for "(1) Explanation of Operating Results," assuming that the new accounting standards had been applied in the fiscal year ended March 31, 2021, the percentage changes year-on-year were 14.5% increase for net sales and 56.3% increase for operating income.

America

Sales to customers significantly increased 15.4% year-on-year to 6,751 million yen.

Eye drops contributed to sales growth, mainly due to a recovery in consumer sentiment as the number of people infected with COVID-19 decreased.

Segment income (operating income) was 162 million yen (down 4.3% year-on-year) due to an increase in procurement costs for raw materials and supplies as well as a deterioration in the cost of sales ratio due to the impact of labor shortages.

2