Meiji : Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2023

Consolidated Financial Results

for the First Quarter of the Fiscal Year Ending March 31, 2023

[Based on Japanese GAAP]

August 9, 2022

Name of Listed Company:

Meiji Holdings Co., Ltd.

Listed exchange: Prime Market, Tokyo Stock Exchange

Code Number:

2269

URL: www.meiji.com

Representative:

Kazuo Kawamura, CEO, President and Representative Director

Inquiries:

Masashi Tanaka, General Manager of Corporate Communication Dept.

Telephone: [phone]

Submission of quarterly report: August 10, 2022

Dividend payment commencement: -

Preparation of explanatory materials for quarterly financial results: Yes

Holding of a briefing on quarterly financial results: Yes (a briefing for analysts and institutional investors)

(Amounts are rounded down to the nearest million yen.)

1. Consolidated Financial Results for the First Three Months of the Fiscal Year Ending March 2023

(April 1, 2022 to June 30, 2022)

1)

Consolidated operating results

(% of change from the previous fiscal year)

Net Sales

Operating Profit

Ordinary Profit

Profit attributable to

owners of parent

First three months ended

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

June 30, 2022

247,131

4.8

18,044

-3.1

18,414

-3.5

16,015

28.2

June 30, 2021

235,921

-16.1

18,621

-19.6

19,091 -18.8

12,491

-6.6

(Note) Comprehensive income: First three months ended June 30, 2022: JPY 26,062 million (45.6%)

First three months ended June 30, 2021: JPY 17,901 million (29.9%)

Profit per Share

Diluted Profit per

Share

First three months ended

Yen

Yen

June 30, 2022

113.73

-

June 30, 2021

86.09

-

2)

Consolidated financial position

Total Assets

Net Assets

Equity Ratio

Net Assets per Share

Millions of yen

Millions of yen

%

Yen

As of June 30, 2022

1,144,335

725,374

60.0

4,874.92

As of March 31, 2022

1,117,459

713,021

60.3

4,781.52

(Reference) Shareholders' equity: As of June 30, 2022: JPY 686,486 million

As of March 31, 2022: JPY 673,336 million

2. Dividends

Cash Dividends Per Share

1Q

2Q

3Q

Financial year end

Annual

For the fiscal year ended

Yen

Yen

Yen

Yen

Yen

March 31, 2022

-

80.00

-

90.00

170.00

March 31, 2023

-

March 31, 2023

85.00

-

85.00

170.00

(Projected)

(Note) Amendment to projected dividends recently announced: None

Disclaimer: These financial statements have been prepared in accordance with generally accepted accounting principles in Japan.

This English translation is prepared for the reader's convenience. When there are any discrepancies between the original Japanese version and English translation

version, the original Japanese version always prevails.

3. Forecasts of Consolidated Financial Results for the Fiscal Year Ending March 31, 2023

(April 1, 2022 to March 31, 2023)				(% of change from the previous fiscal year)
	Net Sales			Operating Profit	Ordinary Profit	Profit attributable to	Profit per
			owners of parent	Share
	Millions of yen	%		Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
1st half	507,000	1.3		41,000	-18.5	41,500	-19.9	31,000	-15.4	215.15
Full year	1,035,500	2.2		92,500	-0.5	93,500	-0.5	62,500	-28.6	433.76

(Note) Amendment to forecasts of consolidated financial results recently announced: None

Notes

1. Changes in significant subsidiaries during the current fiscal year under review (Changes in subsidiaries affecting the scope of consolidation): None
2. Application of specific accounting treatments in the preparation of quarterly consolidated financial statements: Yes

For details, refer to page 17 of 2. Quarterly Consolidated Financial Statements 4) Notes Concerning Quarterly Financial Statements (Adoption of Special Accounting Methods for Preparation of Quarterly Consolidated Financial Statements)

1. Changes in accounting policy, changes in accounting estimates, restatements
2. 1. Changes in accounting policy due to revisions of accounting standards: Yes
   2. Other changes in accounting policy: None
   3. Changes in accounting estimates: None
   4. Restatements: None

For details, refer to page 17 of 2. Quarterly Consolidated Financial Statements 4) Notes Concerning Quarterly Financial Statements (Changes in Accounting Practices)

4) Number of shares outstanding (common stock)

1.	Number of shares outstanding at end of	As of Jun. 30, 2022	148,369,500 shares	As of Mar. 31, 2022	148,369,500 shares
	period (including treasury stock)
2.	Number of treasury stock at end of period	As of Jun. 30, 2022	7,549,511 shares	As of Mar. 31, 2022	7,548,999 shares
3.	Average number of shares during period	As of Jun. 30, 2022	140,820,194 shares	As of Jun. 30, 2021	145,098,054 shares

• The earnings summary is not subject to audit.
• Forward-lookingstatements and other special notes

(Notice concerning forward-looking statements)

The forward-looking statements described in this document, such as business forecasts, are based on information available at the time of the release of these materials and reasonable assumptions made by the Company, and do not represent a commitment from the Company that they will be achieved. For earnings forecasts assumptions and other related items, refer to page 11 of 1. Qualitative Information 3) Forecasts for the Fiscal Year ending March 31, 2023

(Explanatory material for financial results)

Explanatory materials for financial results are disclosed through TDnet together with these financial statements. This information also is posted on our website on the same day.

(Presentation material for conference call)

The conference call for analysts and institutional investors is scheduled on August 9, 2022. An audio recording (Japanese only) and presentation materials of the conference will be posted on our website.

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1. Qualitative Information

1) Explanation Concerning Operating Results

The Meiji Group is aiming at realizing both profit growth and sustainability activities in line with the basic concept of our 2023 Medium-Term Business Plan "Promote the Meiji ROESG®* Management Effectively".

Below is the key issues of 2023 Medium-Term Business Plan.

1. Business strategy Food segment

・Recover from the slump in our core business ・Accelerate growth in our business overseas Pharmaceutical segment

・Strengthen vaccine business ・Expand CMO/CDMO business Overall group

・Venture into new domains

1. Improve business management using ROIC effectively
2. Investing to grow business while constructing strong financial base
3. Promote the Meiji Group Sustainability 2026 Vision

*ROESG is a registered trademark for a management indicator developed by Kunio Ito, a professor at Hitotsubashi University.

FYE March 2023 is expected to see the continued impact of COVID-19 pandemic on the global economy and domestic consumer trends as well as the continued increase in raw material prices and energy costs due to the Russian-Ukrainian conflict and yen depreciation.

In the food segment, we will raise prices and reduce product volume to absorb rising raw material and energy costs. We will then work to minimize the impact of price hikes on sales volume by enhancing marketing activities focusing on the value of each product. Overseas, we will continue to expand production and sales capacity in China. We will expand sales areas and our line of high value-added products. Through such efforts, we work to foster overseas businesses that will become new growth pillars.

In the pharmaceutical segment, we will focus management resources in the infectious disease domain, one of the Meiji Group's strengths, as we work to strengthen our competitive advantage as a top company for vaccines and infectious disease drugs. Additionally, we will fulfill our plan of addressing domestic NHI drug price revisions by cost reduction and expansion of overseas CMO/CDMO business. We will apply our Group's advanced technology, vast facilities, and solid track record in infectious diseases to enhance the ability to create new drugs.

These factors resulted in net sales of JPY 247.131 billion (up 4.8%, year on year), operating profit of JPY 18.044 billion (down 3.1%, year on year), and ordinary profit of JPY 18.414 billion (down 3.5%, year on year) during the first three months of FYE March 2023. Profit attributable to owners of parent was JPY 16.015 billion (up 28.2%, year on year).

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													(Billions of yen)
	For the first three months			2021			2022			Change			Main factors for Change
	ended June 30
	Net sales	235.9	247.1	11.2		Details indicated on segment-specific overview
	Operating profit	18.6	18.0	-0.5			Details indicated on segment-specific overview
	Non-operating profit	1.0	1.0	0.0		－
	Non-operating expenses	0.5	0.7	0.1		－
	Ordinary profit	19.0	18.4	-0.6			－
	Extraordinary income											- Gain on sales of non-current assets (+4.2)
	0.6	5.5	4.9		- Gain on sales of shares of subsidiaries and
													associates (+1.0)
	Extraordinary losses	0.6	0.7	0.1		－
	Profit before income taxes	19.0	23.1	4.0		－
	Income taxes-total	5.8	7.0	1.1		－
	Profit (loss) attributable to	0.7	0.1	-0.5			－
	non-controlling interests
	Profit attributable to	12.4	16.0	3.5		－
	owners of parent

The Meiji Group is engaged in the following initiatives for development and supply of potential COVID-19 vaccines.

Currently, Group subsidiary KM Biologics is developing an inactivated vaccine for COVID-19. In April 2022, we launched Phase III Clinical Trials (multi-regional), the final stage prior to approval, as well as domestic pediatric Phase II/Phase III Clinical Trials.

In December 2021, we completed a new facility for testing of inactivated vaccine that will enable rapid provision in Japan for the inactivated vaccine. Also, the construction of manufacturing equipment has been completed as planned. We continue working towards beginning provision during the FYE March 2023.

Regarding the COVID-19 vaccine of AstraZeneca PLC, allocated for Japan, Group subsidiary Meiji Seika Pharma is handling product storage, transporting and collecting safety management information of the COVID-19 vaccine.

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The status of operations by segment and business are as follows.

(1) Food segment

・Net sales increased year on year. Net sales of B to B business and overseas business increased significantly year on year. Net sales of nutrition business, chocolate and gummy business, other and domestic subsidiaries increased year on year. Net sales from frozen dessert and ready meal business were largely unchanged. Net sales of yogurt and cheese business, and drinking milk business decreased year on year.

・Operating profit decreased significantly year on year. In addition to decreased sales in the yogurt and cheese business, raw material costs, energy costs, and depreciation costs all increased.

									(Billions of yen)
	For the first three months		2021			2022			% Change
	ended June 30
Net sales			199.8			204.3	2.3%
Operating profit			19.4			14.5	-25.3%

Analysis of Consolidated Operating Profit					(Billions of yen)
Q1 Results - FYE March 2022	19.4
							+0.4
Due to increased/decreased sales
									-2.9
Changes in costs of goods sold
						-1.0
Changes in other SG&A expenses
Other (incl. change in results of				-1.4
subsidiaries)
Q1 Results - FYE March 2023	14.5

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