Takara Bio : Consolidated Financial Statements for FY Ended March 31 2023

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

May 11, 2023

	Consolidated Financial Results
	for the Fiscal Year Ended March 31, 2023
	(Under Japanese GAAP)
Company name:	Takara Bio Inc.
Listing:	Tokyo Stock Exchange
Securities code:	4974
URL:	https://www.takara-bio.co.jp
Representative:	Koichi Nakao, President & CEO
Inquiries:	Takuya Kakemi, Executive Officer, in charge of PR & IR Department
Telephone:	[phone]

Scheduled date of annual general meeting of shareholders:	June 23, 2023
Scheduled date to commence dividend payments:	June 26, 2023
Scheduled date to file annual securities report:	June 29, 2023
Preparation of supplementary material on financial results:	Yes
Holding of financial results briefing:	Yes

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the fiscal year ended March 31, 2023(from April 1, 2022 to March 31, 2023)

(1) Consolidated operating results				(Percentages indicate year-on-year changes.)
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
	Fiscal year ended	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
	Mar. 31, 2023	78,142		15.4	20,541	(28.9)	20,682	(27.3)	16,012	(19.3)
	Mar. 31, 2022	67,699		46.9	28,902	107.1	28,459	101.0	19,849	107.9

Note: Comprehensive income

For the fiscal year ended Mar. 31, 2023:

¥20,363 million

(14.0%)

For the fiscal year ended Mar. 31, 2022:

¥23,689 million

173.1%

Net income

Fully Diluted net

Return on equity

Ratio of ordinary

Ratio of operating

per share

income per share

profit to total assets

profit to net sales

Fiscal year ended

Yen

Yen

%

%

%

Mar. 31, 2023

132.97

-

15.4

16.9

26.3

Mar. 31, 2022

164.84

-

23.3

27.7

42.7

Reference:

Share of profit (loss) of entities accounted for using equity method

For the fiscal year ended Mar. 31, 2023:

¥- million

For the fiscal year ended Mar. 31, 2022:

¥- million

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

As of

Millions of yen

Millions of yen

%

Yen

Mar. 31, 2023

129,202

112,454

86.9

931.93

Mar. 31, 2023

115,712

96,064

82.9

796.18

Reference:

Equity

As of Mar. 31, 2023:

¥112,219 million

As of Mar. 31. 2022:

¥95,873 million

(3) Consolidated cash flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash
	equivalents at end of
	operating activities	investing activities	financing activities
	period
Fiscal year ended	Millions of yen	Millions of yen	Millions of yen	Millions of yen
Mar. 31, 2023	36,897	(6,693)	(4,119)	49,058
Mar. 31, 2022	6,985	(7,071)	(2,070)	22,160

2. Cash dividends

		Annual dividends per share		Total cash		Ratio of
						Payout ratio	dividends to
	First	Second	Third	Fiscal		dividends
	Total	(Consolidated)	net assets
	quarter-end	quarter-end	quarter-end	year-end	(Total)
			(Consolidated)
	Yen	Yen	Yen	Yen	Yen	Millions of yen	%	%
Fiscal year ended	-	0.00	-	33.00	33.00	3,973	20.0	4.7
Mar. 31, 2022
Fiscal year ended	-	0.00	-	42.00	42.00	5,057	31.6	4.9
Mar. 31, 2023
Fiscal year ending	-	0.00	-	17.00	17.00		37.2
Mar. 31, 2024
(Forecast)

3. Consolidated financial forecasts for the fiscal year ending March 31, 2024 (April. 1, 2023 - March. 31, 2024)

								(Percentages indicate year-on-year changes.)
								Net income	Net income per
	Net sales		Operating profit	Ordinary profit	attributable to
		share
								owners of the parent
	Millions of yen		%	Millions of yen	%	Millions of	%	Millions of	%	Yen
		yen	yen
Second quarter	22,800		(30.0)	2,100	(80.7)	2,100	(80.8)	1,200	(85.9)	9.96
(cumulative)
Full year	53,300		(31.8)	8,000	(61.1)	8,200	(60.4)	5,500	(65.7)	45.67

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None

Newly included:	- companies (Company name)
Excluded:	- companies (Company name)

1. Changes in accounting policies, changes in accounting estimates, and restatement
2. 1. Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
   4. Restatement: None

(Notes) For details, please refer to "(5). Notes to Consolidated Financial Statements (Changes in Accounting Policies)" of "3. Consolidated Financial Statements and Primary Notes" on page 10 of the attached material.

1. Number of issued shares (common shares)
2. 1. Total number of issued shares at the end of the period (including treasury shares)

As of Mar. 31, 2023

As of Mar. 31, 2022

120,415,600 shares

120,415,600 shares

(ii) Number of treasury shares at the end of the period

As of Mar. 31, 2023

As of Mar. 31, 2022

• shares
• shares

(iii) Average number of shares outstanding during the period

Fiscal year ended Mar. 31, 2023

Fiscal year ended Mar. 31, 2022

120,415,600 shares

120,415,600 shares

(Reference) Summary of Non-consolidated Financial Results

1. Non-consolidated results for the year ended March 31, 2023 (April 1, 2022 - March 31, 2023)

1. Non-consolidatedResults of Operations

	Year ended		Year ended
	Mar. 31, 2023		Mar. 31, 2022
	(Millions of yen)	(%)	(Millions of yen)	(%)
Net sales	57,280	13.7	50,398	48.7
Operating profit	14,553	(33.6)	21,931	126.3
Ordinary profit	17,444	(30.4)	25,063	118.0
Net income	14,313	(22.6)	18,485	112.9
Net income per share (in yen)	118.87		153.51
Fully diluted net income per share (in yen)	-		-

1. Non-consolidatedFinancial Position

		As of Mar. 31, 2023	As of Mar 31, 2022
		(Millions of yen)	(Millions of yen)
Total assets	108,607	101,386
Net assets	96,544	86,204
Equity ratio (%)	88.9	85.0
Net assets per share (in yen)	801.76	715.89
(Reference) Equity	96,544	86,204

non-consolidated results>

In the fiscal year under review, although net sales increased due to the strong performance of reagents, the cost of sales ratio rose due to changes in the sales mix and other factors, resulting in a difference between the actual value for the previous fiscal year and the actual value for the current fiscal year.

• Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters

Forward-looking statements contained in this document are determined by the Takara Bio Inc. (the "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. Overview of Financial Results for the year ended March 31, 2022, (4) Future Outlook on page 3 of the attached document.

The Company will hold a briefing for institutional investors and analysts on Tuesday, May 16, 2023. The material handed out at this briefing and a review of questions and answers will be posted on our website after the briefing

Contents of the attached document
1. Overview of Financial Results for the year ended March 31, 2023	2
(1)	Overview of Financial Results	2
(2)	Overview of Financial Position	2
(3)	Overview of Cash Flows	2
(4) Future Outlook	3
2. Basic Concept on Selection of Accounting Standards	3
3. Consolidated Financial Statements and Primary Notes	4
(1)	Consolidated Balance Sheets	4
(2)	Consolidated Statements of Profit or Loss and Consolidated Statements of Comprehensive Income...	6
	(Consolidated Statements of Profit or Loss)	6
	(Consolidated Statements of Comprehensive Income)	7
(3)	Consolidated Statements of Change in Net Assets	8
(4)	Consolidated Statements of Cash Flows	9
(5)	Notes to Consolidated Financial Statements	10
	(Notes on Premise of Going Concern)	10
	(Significant Accounting Estimates)	10
	(Changes in Accounting Policies)	10
	(Segment Information)	10
	(Per-Share Information)	10
	(Significant Subsequent Events)	11
4. Supplementary Information	11
(1) Trends in Key Indicators for Business Management	11
(2)	Comparative Consolidated Statement of Income	12
(3)	Comparative Statement of Income Relating to Consolidated Financial Forecasts	13

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1. Overview of Financial Results for the year ended March 31, 2023

(1) Overview of Financial Results

The outlook for the global economy in the fiscal year under review is uncertain due to the outbreak of the new Coronavirus disease (COVID-19), prolonged trade friction between the U.S. and China, and Russia's invasion of Ukraine.

Under these circumstances, Takara Bio Group is promoting initiatives to advance the development of fundamental biologics development technologies and become a biologics development company that continuously creates new modalities through the Reagents and Instruments and CDMO business under the six-yearLong-Term Management Plan FY2026, which ends in fiscal 2026, and the three-yearMedium-Term Management Plan FY2023, which ends in fiscal 20231. In addition, the Group worked aggressively to ensure a stable supply of testing-related products for the new Coronavirus and to establish a manufacturing system for regenerative/cellular medicine and gene therapies products, including vaccines for COVID-19.

In the fiscal year under review, although sales of Instruments and CDMO decreased year on year, sales of Reagents and Gene Therapy increased year on year. In particular, sales of COVID-19 antigen test and other reagents related to the new Coronavirus testing grew significantly. As a result, net sales increased to ¥78,142 million (up 15.4% year on year), while the cost of sales increased to ¥33,377 million (up to 80.5% year on year), reflecting a rise in the cost of sales ratio due to changes in the sales mix and other factors. As a result, gross profit decreased to ¥44,765 million (down 9.0% year on year). Selling, general and administrative (SG&A) expenses were ¥24,224 million (up to 19.3% year on year) due to an increase in personnel expenses, research and development (R&D) expenses, etc., and operating profit decreased to ¥20,541 (down 28.9% year on year). As a result of the decrease in operating profit, ordinary profit was ¥20,682 million (down 27.3% year on year), profit before income taxes and others was ¥21,224 million (down 22.9% year on year), and net income attributable to owners of the parent was ¥16,012 million (down 19.3% year on year).

From the first quarter of the current fiscal year, due to a review of management classification, sales of reagents and other reagents of GMP grades (for manufacturing products such as regenerative medicine) that were previously included in "Reagents" are included in "Gene Therapy." As a result, net sales for the previous fiscal year have been reclassified based on the new classification, and the ¥2,126 million included in "Reagents" has been reclassified as "Genetic Therapy."

Since our group is a single segment, the disclosure by segment is omitted.

(2) Overview of Financial Position

Total assets at the end of the fiscal year under review were ¥129,202 million, an increase of ¥13,489 million from the end of the previous fiscal year. This was mainly due to an increase of ¥28,214 million in cash and deposits and an increase of ¥4,560 million in property, plant and equipment mainly due to the acquisition of our manufacturing facilities, despite a decrease of ¥12,717 million in merchandise and finished goods and a decrease of ¥5,277 million in trade receivables.

Total liabilities at the end of the fiscal year under review were ¥16.747 billion, a decrease of ¥2,900 million from the end of the previous fiscal year. This was mainly due to a decrease of ¥4,826 million in accrued income taxes, despite an increase of ¥1,338 million in other current liabilities and ¥364 million in notes and accounts payable-trade.

Total net assets at the end of the fiscal year under review were ¥112,454 million, an increase of ¥16,389 million from the end of the previous fiscal year. This was mainly due to an increase of ¥12,038 million in retained earnings and ¥4,471 million in foreign currency translation adjustment due to the yen's depreciation.

(3) Overview of Cash Flows

Net cash provided by operating activities amounted to ¥36,897 million, an increase of ¥29,911 million from the previous fiscal year. This was mainly due to cash inflow from income before income taxes and others of ¥21,224 million, a decrease in inventories of ¥13,510 million, a decrease in trade receivable of ¥5,718 million and depreciation and amortization of ¥4,050 million, and cash outflow from income taxes paid of ¥9,902 million.

Net cash used in investing activities amounted to ¥6,693 million, a decrease of ¥377 million from the previous fiscal year. This was mainly due to proceeds from withdrawal of time deposits of ¥16,554 million, payments

1 FY2026 and FY2023 refer to the fiscal year ending March 31, 2026 and 2023, respectively.

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