Gunze : Consolidated Financial Results for FY2023

Business Report

Consolidated Financial Statements

for FY2023

(Ending March 31, 2024)

GUNZE LIMITED

TSE Prime (Code:3002)

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Contents

• Financial Statements for FY2023

• Business Summary by Subsector
• Forecast for FY2024
• Medium-termManagement Plan "VISION2030 stage1" Progress and Direction

for the Next Medium-Term Management Plan

2

Ⅰ. Financial Statements

for FY2023 (Ending March 31, 2024)

3

Business restructuring expenses

I-1. Consolidated Financial Statements for FY2023

Consolidated operating results

	FY2023		FY2022		Y over Y
	Bottom			Bottom		Increase	Change
	profit margin		profit margin
			(Decrease)	(%)
Net sales	132,885			136,030		(3,144)	(2.3)
Operating profit	6,777			5,812		965	16.6
5.1%			4.3%
Ordinary profit	6,774			6,021		753	12.5
5.1%			4.4%
Profit attributable to	5,109			4,501		608	13.5
owners of parent	3.8%			3.7%
Consolidated financial position
	FY2023				FY2022		Increase
					(Decrease)
Total assets	161,971				165,927		(3,956)
Net assets	118,642				115,757		2,885
Equity ratio	73.2%				69.8%		3.4%
Interest-bearing		9,004				15,426		(6,421)
debt
BPS (JPY)	7,112.73				6,789.78		322.95

(Millions of yen)

Extraordinary income/Losses: Gain on sales of securities 2,009

Electronic

components, sports clubs, etc. (2,801) Settlement for under-reporting of water amount (534)

Income taxes:

Income taxes-deferred 2,575

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I-2. FY2023 Segment Summary

Net sales decreased due to transfer of electronic components business and real estate development project factors in previous fiscal year.

Operating profit increased due to profit improvement in apparel business.

Highlights of segment performance

Functional

Solutions

Medical

Sales and profits of the materials businesses declined due to sluggish market conditions and lower demand in the office automation market.

Plastic Films: Strong sales of packaging films in the U.S., but affected by stagnant demand in Japan and Asia.

Engineering Plastics: Sales of office automation equipment were flat, but sales of semiconductors and general industrial applications remained strong.

Electronic Components：Affected by economic slowdown in China and slump in PC market.

Increased in sales and decreased in income due to higher human capital investment costs for future growth.

Market penetration of new products such as anti-adhesive materials will increase with the recovery of the main domestic medical application market.

Bioabsorbable products grew in China due to increased efforts with new distributors.

Orders for medical lasers declined due to a decrease in the number of cosmetic medical institutions opening after Corona, etc.

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I-3. FY2023 Segment Summary

Apparel

Lifestyle Creations

Highlights of segment performance

Seasonal products struggled due to the prolonged summer heat and mild winter, but annual products with differentiated apparel appealed to customers.

Strong performance and significant profit increase due to improved profitability resulting from price revisions, including higher value-added products, and business restructuring.

Continued growth in EC and directly managed store routes, which are being strengthened, and will continue to work on growth strategies through a shift to D-to-C.

Innerwear: Value-added products that meet customer needs performed well.

Legwear: Sales of hosiery and pantyhose were strong due to the impact of the renewal of the mainstay Sabrina products.

The real estate business declined due to the impact of sales from the land reclamation project in the previous fiscal year. Shopping center business and sports club business both showed recovery trend and profit increased.

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I-4. FY2023 Performance by Segment

Consolidated Results				(Millions of yen)
			Net sales		Operating profit
				Bottom: profit margin
	FY2023		FY2022	YoY	FY2023	FY2022	YoY
Functional	48,975		49,555	(1.2%)	6,028	6,835	(11.8%)
Solutions		(580)	12.3%	13.8%	(807)
Medical	11,697		10,957	6.8%	1,991	2,082	(4.4%)
	740	17.0%	19.0%	(90)
Apparel	60,114		60,986	(1.4%)	1,465	(222)	-
	(872)	2.4%	(0.4%)	1,688
Lifestyle	12,826		156,327	(16.3%)	833	705	18.2%
Creations		(2,501)	6.5%	4.6%	127
Total	132,885		136,030	(2.3%)	6,777	5,812	16.6%
	(3,144)	5.1%	4.3%	965

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I-5. Consolidated Financial Statements for FY2023 by Segment

(Millions of yen)

Lifestyle Creations

	9%		Functional Solutions
	12,826
		8%		37%
	Net sales	Operating
	833
	14%	profit
		48,975
	1,465	Net sales	58%
		¥132.8billion
Apparel
1%	Operating profit
	¥6.7 billion	6,028
44%	1,991

45%

60,114

9%

11,697

Medical

Total includes corporate expenses not included in segment profit	8

I-6. Net sales for FY2023

Net sales ¥132,885 YoY(2.3%)

(Millions of yen)

136,030

123,649 124,314

132,885

	136,030
	132,885
123,649	124,314

25,689 28,291

32,378 31,099

31,868

35,481

1Q

31,706

2Q

33,447

		49,556	48,975	Functional
		Solutions
41,379	45,597
8,294		10,957	11,697	Medical
10,541

34,562 33,359 36,493

36,296 3Q

62,640	57,197	60,987	60,114	Apparel

31,018 31,563 32,186

31,435

4Q

11,976	11,576	15,328	12,826	Lifestyle
Creations

FY 2020

FY 2021

FY 2022

FY 2023

Transfer of electronic component film business in the previous fiscal year.

Decrease due to real estate development project factors.

FY 2020

FY 2021

FY 2022

FY 2023

Medical net sales increased.

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I-7. Operating profit for FY2023

Operating profit ¥6,777 YoY +16.6%

(Millions of yen)

Operating profit ratio (%)

5.1

6,777

3.8		4.3
	3.9
	5,812
	4,880
4,673		1,252

1,515

1Q

5,812

4,880

6,777

315	1,555
956	1,554
	1,784

1,714 2Q

4,673

4,023

5,973 6,835

Functional

solutions

6,028

2,497	1,980

2,937

3Q

829

482

1,991 Medical

Lifestyle

			2,108
						1,024
	904
				-568
FY 2020	FY 2021	FY 2022

609 4Q

FY 2023

2,306

FY 2020

2,059	2,082
453	705
-577	-222
FY 2021	FY 2022

833 creations

1,465 Apparel

FY 2023

Apparel profit improved. Profit increased by ¥950M

Apparel profit increased due to the improved activities. Functional solutions profit decreased due to low demand.

Total includes corporate expenses not included in segment profit.	10