Tsumura : Business Results for FY 2022

Business Results for Fiscal 2022 and Earnings Forecast for Fiscal 2023

Director, and CFO

Muneki Handa

Agenda

01

FY 2022 Business Results Overview

2

Roadmap for the Realization of the TSUMURA VISION

"Cho-WA" 2031

1st stage

FY2022-2024

-Germination-

2nd stage

FY2025-2027

-Growth-

3rd stage

FY2028-2031

-Flowering-

Prescription Kampo

Products

Standardization of Kampo treatments

Personalized Kampo treatments

Over 50% physicians write 10 or more Kampo prescriptions

50% of physicians write basic

prescriptions in all treatment areas

R&D

Personalized Kampo

treatmentsResearch Scientific study of pre-

symptomatic diseases

Development

Social

implementation

Chinese

operations

Formulation

platform

Crude drug

platform

Research

platform

Traditional Chinese medical products business

Crude drugs, drug pieces and Yakushokudogen products

Traditional Chinese Medicine Research Center

Market

entry

Sales

expansion

Establishment

Build

foundations

Establish brands

Function

expansion

Establish brands

Lead industry development

Evidence-building for traditional

Chinese medical products

Smart factory

Expand scope of

automation

Shift to oversight/management

Realize smart factories

Labor

productivity

Sales

Production

Crude drugs

Sales per MR (Yen/MR)

Physical labor productivity

Personnel expenses per crude drug arranging volume

Double productivity
(vs. FY2021)	3

FY2022 Business Results Overview

【Million yen】	FY 2022	FY 2022	Achievement	YoY
Plan	Results
	rate	Amount	Change

Sales	138,500	140,043	101.1% +10,497	+8.1%
Domestic business	124,300	124,698	100.3%	－	－
China business	14,200	15,345	108.1%	－	－
Operating profit	20,800	20,916	100.6%	(1,460)	(6.5)%
Domestic business	21,200	21,190	100.0%	－	－
China business	(400)	(273)	－	－	－
Ordinary profit	21,200	23,453	110.6%	(2,451)	(9.5)%
Profit	15,000	16,482	109.9%	(2,354)	(12.5)%
attributable to owners of parent
PL translation rate (CNY)	19.50	19.55	－	+2.51	－

*Forex rate at the time overseas subsidiaries' PLs were incorporated; differs from the import rate for raw material crude drugs

Ratio to total sales

Prescription

Kampo Products

85.2%

External sales by consolidated subsidiaries 11.6%

OTC Kampo etc 2.9%

Other prescription pharmaceuticals 0.3%

4

Key Points in Performance

Achieved plans for sales and at each profit level.

Net sales	140,043 million yen Achievement rate 101.1% YoY +8.1%
◼ Domestic business	Total sales for the 129 prescription Kampo products: 119,362 million yen, rose 4.6% year-on-year

Total sales of the OTC Kampo formulations and other healthcare products: 3,966 million yen, grew 3.2% year-on-year

• China business sales: 15,345 million yen

Operating profit	20,916	million yen	Achievement rate	100.6%	YoY	(6.5)%
Operating profit margin	14.9	%	vs. Plan	(0.1)pt	YoY	(2.4)pt

• Cost-to-salesratio: 51.2％, up 0.8pt vs. plan and a rise of 2.5pt year-on-year;

Versus plan: Mainly due to negative impact from soaring energy and raw material expenses

◼ SG&A ratio: 33.8%, down 0.8pt vs. plan and a fall of 0.2pt year-on-year;

Versus plan: Implemented cost control in response to a rise in cost-to-sales that outperformed the plan

Ordinary profit

23,453 million yen Achievement rate 110.6% YoY (9.5)%

• Foreign exchange gain primarily related to loans to overseas subsidiaries: 1,508 million yen, down 965 million yen year-on-year;foreign exchange impact

Profit attributable to	16,482 million yen Achievement rate	109.9% YoY	(12.5)%
owners of parent
◼ Extraordinary income: Refund margin owing to a reduction in paid-in capital at affiliates: 463 million yen
◼ Extraordinary loss: Impairment loss in tandem with revision to construction plans for the Traditional Chinese Medicine Research	5
Center: 597 million yen