Takara Bio : Consolidated Financial Statements for the First Quarter Ended June 30, 2021 FY2022 (April 1, 2021 － June 30, 2021) 〔UNAUDITED〕

The original disclosure in Japanese was released on August 3, 2021 at 15:00 (GMT+8)

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

		August 3, 2021
Company name:	Takara Bio Inc.
Stock exchange listings:	Tokyo Stock Exchange (1st section)
Code number:	4974
URL:	https://www.takara-bio.co.jp
Company representative:	Koichi Nakao, President
Contact:	Takuya Kakemi, Executive Officer, President of Corporate
	Management Division
	Tel. [phone]
Scheduled date of quarterly statement filing:	August 6, 2021
Scheduled date of starting delivery of dividends:	-
Supplementary documents of the financial results:	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 three months ended June 30, 2021 (Apr. 1, 2021 - Jun. 30, 2021)

1. Consolidated operating results

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

						Three months ended				Three months ended
						Jun. 30, 2021				Jun. 30, 2020
	Net sales		(Millions of yen)	(%)		(Millions of yen)	(%)
				15,272	220.1		6,938	(19.8)
	Operating profit			8,504	-		693	(69.2)
	Ordinary profit			8,579	-		745	(66.1)
	Net income (loss) attributable to owners of			6,025	-		404	(74.6)
	parent
	Net income per share (in yen)			50.04			3.36
	Fully diluted net income per share (in yen)			-			-
	(Note) Comprehensive income			8,210	(-%)		(48)	(-%)
(2) Consolidated financial position
						As of Jun. 30, 2021			As of Mar 31, 2021
	Total assets				(Millions of yen)			(Millions of yen)
				99,658				89,750
	Net assets			80,586				74,302
	Equity ratio (%)			80.7				82.7
	Net assets per share (in yen)			668.01				616.05
	(Reference) Equity			80,438				74,181
2. Dividends
									Annual dividends per share in yen
		Year ended			Year ended			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							20.00
	Annual	16.00							20.00

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

The original disclosure in Japanese was released on August 3, 2021 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.)
	Six months ending	Year ending
	Sep. 30, 2021		Mar. 31, 2022
Net sales	(Millions of yen)	(%)	(Millions of yen)	(%)
29,700	70.8	54,200	17.6
Operating profit	11,400	205.1	17,000	21.8
Ordinary profit	11,400	198.4	17,100	20.8
Net income attributable to owners of the parent	7,900	247.3	11,900	24.6
Net income per share (in yen)	65.61		98.82

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

• Others
• 1. Changes in subsidiaries during the three months ended June 30, 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 other than ones based on revisions of accounting standard： 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 June 30, 2021	120,415,600
	As of March 31, 2021	120,415,600
2)	Number of treasury stocks at year end	-
	As of June 30, 2021
	As of March 31, 2021	-
3)	Average number of outstanding shares	120,415,600
	As of June 30, 2021
	As of June 30, 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 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. Qualitative Information for the three months ended June 30, 2021 (4) Qualitative Information Regarding Consolidated Forecasts on page 2 of the attached document.

The original disclosure in Japanese was released on August 3, 2021 at 15:00 (GMT+8)

Contents of the attached document

1. Overview of Financial Results for the three months ended June 30, 2021…………...........…………………………..........

2

1. Overview of Financial Results……………………………………………………….………….………….…………...... 2
2. Overview of Financial Position………………………………………………...…………………………...…….............. 2
3. Overview of Cash Flows…………………………………………………………….…………………………….…….... 2
4. 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 Three Months Ended June 30, 2021)…………………………………………………………………...........	6
(Consolidated Quarterly Statements of Comprehensive Income)
(For Three Months Ended June 30, 2021)…………………………………………………………………………….	7
(3) Consolidated Quarterly Statements of Cash Flow ………………………………………………………………………..	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 three months ended June 30, 2021) ………………………………………………	9
(Changes in Accounting Policies) ………………………………………………..…………..…………..………….….	9
(Additional Information)………………………………………………..…………..…………..…………..…………....	9
(Segment Information)……………………………………………………………………………..……………….……	9
(Significant Subsequent Events) ………………………………………………………………………………………...	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 Profit Relating to Consolidated Earnings Forecast…………………………………………... 12

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The original disclosure in Japanese was released on August 3, 2021 at 15:00 (GMT+8)

1. Overview of Financial Results for the three months ended June 30, 2021

(1) Overview of Financial Results

The outlook for the global economy in the first 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 (the Group) is promoting the initiatives to advance the development of fundamental bio-drug discovery technologies and become a drug discovery company that continuously creates new modalities through the reagents, instruments and the CDMO business under the six-yearLong-Term Management Plan FY2026, which ends in fiscal 2026, and the three-yearMedium-Term Management Plan 2023, which ends in fiscal 20231.

In the first quarter of the fiscal year under review, although the sales of Gene Therapy decreased year on year, the sales of Reagents, Instruments, and CDMO increased year on year. In Reagents and Instruments, PCR testing-related products for the new Coronavirus contributed to the increase. As a result, net sales increased to ¥15,272 million (220.1% compared with the same period of the previous fiscal year). The cost of sales decreased to ¥2,133 million (95.5% compared to the same period of the previous fiscal year) due to a change in the sales mix and an improvement in the production utilization rate. As a result, gross profit increased to ¥13,138 million (279.3% compared to the same period of the previous fiscal year). Selling, general and administrative (SG&A) expenses amounted to ¥4,633 million (115.6% compared with the same period of the previous fiscal year), mainly due to an increase in personnel expenses and R&D expenses. Operating income increased to ¥8,504 million (1225.5% compared with the same period of the previous fiscal year).

As a result of the increase in operating income, ordinary income increased 1150.8% to ¥8,579 million, income before income taxes and minority interests increased to 1162.3% to ¥8,561 million, and net income attributable to owners of the parent increased 1491.0% to ¥6,025 million.

Since the Group is a single segment, the description by segment is omitted.

(2) Overview of Financial Position

Total assets at the end of the first quarter under review were ¥99,658 million, an increase of ¥9,907 million from the end of the previous fiscal year. This was mainly due to an increase of ¥5,492 million in cash and deposits, and an increase of ¥3,151 million in property, plant and equipment resulting from interior finishing work of Takara Bio USA, Inc.'s new office buildings and our acquisition of manufacturing facilities.

Total liabilities at the end of the first quarter of the current fiscal year were ¥19,071 million, an increase of ¥3,623 million from the end of the previous fiscal year. This was mainly due to an increase of ¥4,385 million in other current liabilities and a decrease of ¥761 million in income taxes payable.

Total net assets at the end of the first quarter under review were ¥80,586 million, an increase of ¥6,283 million from the end of the previous fiscal year. This was mainly due to an increase of ¥4,099 million in retained earnings and an increase of ¥2,145 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 ¥5,604 million, an increase of ¥2,193 million from the same period of the previous fiscal year. This was mainly due to the balance of cash inflow and outflow. Cash inflow were from income before income taxes and minority interests of ¥8,561 million and depreciation and amortization of ¥808 million. Cash outflow were from income taxes paid of ¥3,105 million and a decrease in other current liabilities of ¥948 million.

Net cash provided by investing activities was ¥2,403 million, an increase of ¥3,178 million from the same period of the previous fiscal year, mainly due to purchase of property, plant and equipment and intangible assets of ¥2,241 million, proceeds from withdrawal of time deposits of ¥1,357 million, and proceeds from subsidy receipts of ¥3,349 million.

Net cash used in financing activities amounted to ¥1,881 million, an increase of ¥936 million from the same period of the previous fiscal year, mainly due to cash dividends paid of ¥1,846 million.

As a result of the above, the balance of cash and cash equivalents at the end of the first quarter of the current fiscal year, including the effect of exchange rate changes on cash and cash equivalents, increased by ¥6,656 million from the end of the previous fiscal year to ¥29,965 million.

(4) Qualitative Information Regarding Consolidated Forecasts

The earnings forecast announced in the financial results summary on May 13, 2021 has been revised. For details, please refer to "Notice of Revision of Financial Forecast and Dividend (Dividend Increase)" announced today (August 3, 2021).

For a comparison of the revised consolidated earnings forecasts with the results of the previous fiscal year and the previous

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

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The original disclosure in Japanese was released on August 3, 2021 at 15:00 (GMT+8)

earnings forecasts, please refer to the "Comparative Statement of Profit Relating to Consolidated Earnings Forecasts" on page 12 and later.

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