Shinnihonseiyaku : Consolidated Financial Results for the Three Months Ended December 31,2021

Consolidated Financial Results

for the Three Months Ended December 31, 2021

[Japanese GAAP]

					February 4, 2022
Company name:	Shinnihonseiyaku Co., Ltd.	Stock exchange listing:	Tokyo Stock Exchange
Code number:	4931	URL:	https://corporate.shinnihonseiyaku.co.jp
Representative	Takahiro Goto, President & Representative Director of the Board and Chief Executive Officer
Contact:	Tetsuya Ono, Corporate Officer, General Manager of Corporate Administration
Div. and Finance & Accounting Dept.				(TEL) [phone]
Scheduled date of filing the quarterly securities report:		February 9, 2022
Scheduled date of commencing dividend payments:		-
Availability of supplementary briefing material on quarterly financial results	Yes
Schedule of quarterly financial results briefing session:		Yes (for institutional investors and analysts)

(Amounts less than 1 million yen are rounded down.)

1. Consolidated Financial Results for the Three Months Ended December 31,2021 (October 1, 2021 to December 31, 2021)

(1) Consolidated Operating Results (Cumulative)

(% indicates the change from the corresponding period of the previous fiscal year.)

			Net Sales					Operating profit	Ordinary profit			Profit attributable to
										owners of parent
			Million yen		%			Million yen		%		Million yen		%			Million yen		%
Three months ended		9,273		-		825		-		831		-		547		-
December 31, 2021
Three months ended		-		-		-		-			-		-			-		-
December 31, 2020
(Note) Comprehensive income	Three months ended December 31, 2021	544 million yen (-%)
			Three months ended December 31, 2020	- million yen (-%)
			Basic earnings per		Diluted earnings per
			share						share
					Yen						Yen
Three months ended				25.56							25.35
December 31, 2021
Three months ended				-						-
December 31, 2020
(Note) As the Company began preparing quarterly consolidated financial statements in the third quarter of the fiscal year ended
	September 2021, the figures for the first quarter of the fiscal year ended September 2021 and the rate of change from the
	same quarter of the previous year are not presented.
(2)	Consolidated Financial Position
			Total assets					Net assets			Equity ratio
				Million yen				Million yen						%
As of December 31, 2021			22,419						16,041						70.9
As of September 30, 2021			23,197						16,174						68.9
(Reference) Equity As of December 31, 2021					15,895 million yen
	As of September 30, 2021					15,990 million yen
2.	Dividends
											Annual dividends
			1st quarter-end	2nd quarter-end		3rd quarter-end		Year-end		Total
				Yen					Yen					Yen				Yen			Yen
Fiscal year ended			-					0.00					-				32.50	32.50
September 30, 2021
Fiscal year ending			-
September 30, 2022
Fiscal year ending													-
September 30, 2022								0.00									30.00	30.00
(Forecast)

(Note) Revision from the most recently announced dividend forecast: No

3. Consolidated Financial Results Forecast for the Fiscal Year Ending September 30, 2022 (October 1, 2021 to September 30, 2022)

(% indicates changes from the previous fiscal year.)

Net Sales

Operating profit

Ordinary profit

Profit attributable

Basic earnings per

to owners of parent

share

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

Full year

37,000

－

3,095

－

3,020

－

2,067

－

96.60

(Note) 1.

Revision from the most recently announced financial results forecast: No

• 2. As the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29) and other standards have been applied since the beginning of the fiscal year ending September 30, 2022, the financial result forecast reflects figures based on the above standards. Accordingly, percentage changes presenting the year-on-year increase (decrease) from financial results prior to the application of the standards are not presented.

• Notes

1. Significant changes to subsidiaries during the first three months of the fiscal year under review (transfers of

specific subsidiaries with changes in the scope of consolidation)	No
New company	__ company(ies) (company name)
Excluded company	__ company(ies) (company name)
(2) Accounting policies adopted specially for the preparation of the consolidated quarterly financial statements:	No

1. Changes in accounting policies, changes in accounting estimates and retrospective restatement

1)	Changes in accounting policies due to the revision of accounting standards:		Yes
2)	Changes in accounting policies other than 1) above:			No
3)	Changes in accounting estimates:				No
4)	Retrospective restatement:				No
(3) Total number of shares issued (common stock)
1)	Total number of shares issued at the end of	As of December	21,855,200	As of September	21,855,200 shares
	the period (including treasury shares)	31, 2021	shares	30, 2021
2)	Total number of treasury shares at the end	As of December	415,385 shares	As of September	451,385 shares
	of the period	31, 2021	30, 2021
3)	Average number of shares during the	Three months ended	21,423,040	Three months ended	21,483,713 shares
	period (cumulative)	December 31, 2021	shares	December 31, 2020

• These quarterly financial results are outside the scope of quarterly review by certified public accountants or auditing firms.
• Explanation on the proper use of financial results forecast and other notes
  Financial results forecasts and other forward-looking statements herein are based on currently available information and certain assumptions that the Company deems as reasonable, and actual results, etc. may differ significantly from these forecasts due to various factors.
  (How to obtain the Supplementary Briefing Material and the contents of the financial results briefing)
  The Shinnihonseiyaku Group plans to stream online the financial results briefing for institutional investors and analysts on Friday, February 4, 2022. The supplementary briefing material used in this briefing is disclosed today on TDnet and is posted on the Company's website.

Table of Contents
1.	Qualitative Information for Quarterly Financial Results for the Period Under Review .............................................	2
	(1)	Explanation on Business Results ..........................................................................................................................	2
	(2)	Explanation on Financial Position ........................................................................................................................	2
	(3)	Explanation on Consolidated Financial Results Forecast and Other Forward-Looking Information ...................	2
2.	Quarterly Consolidated Financial Statements and Primary Notes ..............................................................................	3
	(1)	Quarterly Consolidated Balance Sheet .................................................................................................................	3

1. Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of

Comprehensive Income ........................................................................................................................................	5
(3) Notes to the Quarterly Consolidated Financial Statements...................................................................................	7
(Notes on going concern assumption).........................................................................................................................	7
(Notes when there was a substantial change in the amount of shareholders' equity)..................................................	7
(Changes in accounting policies) ................................................................................................................................	7
(Segment information, etc.) ........................................................................................................................................	8

- 1 -

1. Qualitative Information for Quarterly Financial Results for the Period Under Review

1. Explanation on Business Results
   During the first quarter under review, the Japanese economy was expected to show signs of recovery in economic activities in light of the progress of vaccination against COVID-19 and a decrease in the number of infections. But the outlook remained uncertain due to concerns about new waves of infections caused by mutated strains.
   In this market environment, the Group worked to promote key challenges in accordance with "VISION2025," the four-yearmedium-term management plan starting from the fiscal year under review.
   Mail orders drove net sales due to the successful acquisition of new customers through aggressive advertising focused on "Perfect One Grow & Cover Cushion Foundation." In addition, up-selling to "PERFECT ONE Wrinkle Stretch Gel" targeting existing customers continued to be strong, and this contributed to an increase in spending per customer.
   In direct store sales and wholesale sales, the number of customers continued to decline due to the impact of COVID- 19. However, we made steady progress in expanding sales at drugstores and sales promotion activities for "PERFECT ONE FOCUS," a skincare brand for young people, and "BODY AURA BOOSTER drink" and "BODY AURA ENERGY tablet," newly launched from the BODY AURA brand. As a result, we were able to expand contact with new customer bases.

In overseas sales, as we engaged in business activities while closely monitoring the status of economic activities in each region, we have been steadily expanding our brand awareness in the Chinese market as sales at W11, an EC shopping event held in China (on November 11, designated as single's day), exceeded those in the previous year.

As a result of the foregoing, for the first three months of the fiscal year under review, net sales were 9,273 million yen, operating profit was 825 million yen, ordinary profit was 831 million yen, and profit attributable to owners of parent was 547 million yen.

As the Company began preparing quarterly consolidated financial statements in the third quarter of the fiscal year ended September 2021, the rate of change from the same period of the previous fiscal year is not presented.

The Group's business segments consist of Mail Order, Direct Store Sales/Wholesale, and Overseas Sales of cosmetics and merchandise related to healthcare. As the ratio of Direct Store Sales/Wholesale and Overseas Sales to overall sales is insignificant, and their materiality as disclosed information is low, a description by business segment has been omitted.

1. Explanation on Financial Position
   Total assets as of the end of the first quarter under review were 22,419 million yen, a decrease of 778 million yen from the end of the previous fiscal year. This was mainly due to a decrease of 1,347 million yen in cash and deposits, despite an increase of 544 million yen in merchandise.
   Liabilities totaled 6,377 million yen, a decrease of 645 million from the end of the previous fiscal year. This was mainly due to a decrease of 511 million yen in income taxes payable.
   Net assets totaled 16,041 million yen, a decrease of 132 million from the end of the previous fiscal year. This was mainly due to a decrease of 144 million yen in retained earnings.
2. Explanation on Consolidated Financial Results Forecast and Other Forward-Looking Information
   The forecast for the fiscal year ending September 2022 has not changed from the forecast announced in "Non- Consolidated Financial Results for the Fiscal Year Ended September 30, 2021" dated November 12, 2021.
   Financial results and other forward-looking statements herein are based on information available to the Company and certain assumptions deemed reasonable at the date of publication of this document. Actual results, etc. may differ significantly from these forecasts due to various factors.

- 2 -

2. Quarterly Consolidated Financial Statements and Primary Notes

(1) Quarterly Consolidated Balance Sheet

(Unit: Million yen)

	Previous consolidated fiscal year	First quarter of the current
	fiscal year
	(As of September 30, 2021)
	(As of December 31, 2021)
Assets
Current assets
Cash and deposits	13,652	12,304
Accounts receivable - trade	3,196	3,068
Merchandise	1,264	1,808
Other	483	633
Allowance for doubtful accounts	(67)	(66)
Total current assets	18,528	17,747
Non-current assets
Property, plant and equipment	2,157	2,142
Intangible assets
Goodwill	1,107	1,079
Other	327	393
Total intangible assets	1,435	1,473
Investments and other assets	1,075	1,056
Total non-current assets	4,669	4,671
Total assets	23,197	22,419

- 3 -