Takara Holdings Inc.TSE: 2531

4Q Results, ended 03/31/24 FS

Jun 5, 2024 at 6:18 AM UTC · Issued by Takara Holdings Inc.

The original disclosure in Japanese was released on May 10, 2024 at 15:30 (GMT+9)

Consolidated Financial Statements for the Year Ended March 31, 2024

FY2024 (April 1, 2023 - March 31, 2024)	[UNAUDITED]
Company name:	Takara Holdings Inc.
Stock exchange listings:	Tokyo Stock Exchange (PRIME section)
Code number:	2531
URL:	https://www.takara.co.jp/
Company representative:	Mutsumi Kimura, President
Contact:	Masakazu Usami, Public Relations& Investor Relations Dept.
	TEL：(075)241-5124
Annual statement filing date (as planned):	Jun 27, 2024

Notes:	1. The accompanying financial statements have been prepared in accordance with accounting principles and practices generally accepted
	in Japan.

2. Amounts are rounded down to the nearest million yen.

1. Results for the year ended March 31, 2024 (April 1, 2023 - March 31, 2024)

Consolidated operating results

Note: Percentages indicated changes from the same period of the previous fiscal year.

	Year ended March 31, 2024	Year ended March 31, 2023
	(Millions of yen)	(%)	(Millions of yen)	(%)
Net sales		339,372	(3.2)	350,665	16.5
Operating income (loss)		22,242	(41.4)	37,945	(12.5)
Ordinary income (loss)		23,336	(39.7)	38,706	(10.5)
Net income (loss) attributable to owners of the parent		16,176	(23.7)	21,206	2.1
Net income (loss) per share (Yen)		82.09		107.26
Fully diluted net income per share (Yen)		-		-
Return on equity			7.5		11.0
Ordinary income to total assets ratio			5.6		10.2
Operating income to net sales ratio			6.6		10.8
Note: Comprehensive income (loss)	37,666	(8.8)	41,278	3.2
(Reference) Income (loss) from equity method investment	62		(49)

(2) Consolidated financial position
			As of March 31, 2024	As of March 31, 2023
			(Millions of yen)	(Millions of yen)
	Total assets	437,468	399,174
	Net assets	280,465	255,318
	Equity ratio (%)	52.3	51.1
	Net assets per share (Yen)	1,171.10	1,031.60
	(Reference) Equity	228,665	203,951
(3) Consolidated Cash flow
			Year ended March 31, 2024	Year ended March 31, 2023
			(Millions of yen)	(Millions of yen)
	Cash flow from operating activities	29,178	45,478
	Cash flow from investing activities	(19,993)	(10,474)
	Cash flow from financing activities	(13,448)	(22,215)
	Cash and cash equivalents, end of year	90,184	91,785

2. Dividends
			Dividend per share (Yen)
		Year ended March 31,	Year ended March 31,	Year ending March 31,
		2023	2024	2025 (Forecast)
	First quarter end	-	-	-
	Second quarter end	-	-	-
	Third quarter end	-	-	-
	Year end	38.00	29.00	31.00
	Annual	38.00	29.00	31.00
	Total dividend (Millions of yen)	7,512	5,662
	Payout ratio (%)	35.4	35.3	35.2
	Dividend on equity (%)	3.9	2.6

Note: Correction of dividend forecast from the most recent dividend forecast: Yes

3. Forecast for the year ending March 31, 2025 (April 1, 2024 - March 31, 2025)

Note: Percentages indicated changes from the same period of the previous fiscal year.

	Six months ending	Year ending March 31, 2025
	September 30, 2024

	(Millions of yen)	(%)	(Millions of yen)	(%)
Net sales	171,000	4.8	362,000	6.7
Operating income (loss)	10,400	(16.6)	25,700	15.5
Ordinary income (loss)	10,800	(17.1)	26,300	12.7
Net income (loss) attributable to owners of the parent	8,600	6.9	17,200	6.3
Net income per share (Yen)	44.04		88.09

4. Others

Material changes in subsidiaries during this period

(Changes in specified subsidiaries that caused a change in the scope of consolidation): No

Changes in accounting policies, accounting estimates and retrospective restatement
1. Changes based on revisions of accounting standard: No
2. Changes other than ones based on revisions of accounting standard: No
3. Changes in accounting estimates: No
4. Restatement: No
Number of outstanding shares (common stock)
1. Number of outstanding shares at year end (Treasury stocks are included):

	As of March 31, 2024	197,252,043 shares
	As of March 31, 2023	199,699,743 shares
2)	Number of treasury stocks at year end:
	As of March 31, 2024	1,995,688 shares
	As of March 31, 2023	1,995,612 shares
3)	Average number of outstanding shares:
	Year ended March 31, 2024	197,052,118 shares
	Year ended March 31, 2023	197,704,141 shares

Contents of the attached document

1. Overview of Financial Results………………………………………………………………………………………………...	2
(1)	Overview of Financial Results for the Fiscal Year under Review………………………………………….……………	2
(2)	Overview of Financial Position for the Fiscal Year under Review………………………………………………………	5
(3)	Overview of Cash Flows for the Fiscal Year under Review……………………………………………….………….…	5
(4)	Future Outlook…………………………………………………………………………………………………..…….…	5
2. Basic Concept on Selection of Accounting Standards…..…………………………………………………………….………	6
3. Consolidated Financial Statements and Primary Notes…...…………………………………………………………..………	7
(1)	Consolidated Balance Sheets…………………………………………………………………………………...………	7
(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income………………..………	9
	Consolidated Statements of Income……………………………………………………………………………….……	9
	Consolidated Statements of Comprehensive Income.………………………………………………………………….	10

Consolidated Statements of Changes in Net Assets……………………………………………………………………. 11
Consolidated Statements of Cash Flows……………………………………………………………………………….. 13

(5) Notes to Consolidated Financial Statements……………………………………………………………………………	14
(Notes on Premise of Going Concern).………………………………………………………………………………….. 14
(Segment Information).…………………………………………………………………………………………………..	14
(Per Share Information).…………………………………………………………………………………………………	17

(Significant Subsequent Events).………………………………………………………………………………………... 17

○Supplement for the Consolidated Financial Statements

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1. Overview of Financial Results

Overview of Financial Results for the Fiscal Year under Review
In the fiscal year under review, ended March 31, 2024, the U.S. economy remained steady, as shown by such factors as increased consumption against the backdrop of increasing employment and rising real wages. The economy in Europe showed signs of weakness, such as deteriorating consumer confidence due to monetary tightening. The Japanese economy continued its gradual recovery amid the trend of loosening constraints on social and economic activities that were in place due to the COVID-19 pandemic, despite the impact of rising raw material prices. However, the economic outlook remains uncertain mainly due to concerns about the impact of global monetary tightening and the standstill in the Chinese real estate market.
Under these economic circumstances, the Group has upheld the vision of "Smiles in Life -Smiles are Life's Treasure-" as part of its long-term management vision, TaKaRa Group Challenge for the 100th, aimed at 2025, which is the centennial of the Group's foundation. The Group has continued taking on the challenge of filling the lifestyles of people around the world, living, and the life of others with smiles as an enterprise group providing alcohol and Japanese food as well as diverse values safely and securely in life sciences through technology that pursues good taste and revolutionary biotechnology.
In addition, the Group launched the Takara Group Medium-Term Management Plan for 2025. As a conclusion to TaKaRa Group Challenge for the 100th, the Plan adopts a management policy to increase enterprise value over a three-year period by accelerating investments in growth and high-priority fields, focusing on utilizing products and services to solve social issues and creating long-term and sustainable growth capital to raise our earning capacity, all while enhancing our value chain for solving social issues.
As a result, in the fiscal year under review, ended March 31, 2024, net sales decreased 3.2% year on year to ¥339,372 million, gross profit decreased 5.0% year on year to ¥113,933 million, and SG&A expenses increased 11.8% year on year ¥91,691 million. Operating income decreased 41.4% year on year to ¥22,242 million, ordinary income decreased 39.7% year on year to ¥23,336 million, and net income attributable to owners of the parent decreased 23.7% year on year to ¥16,176 million.
Results by business segment were as follows.

[Takara Shuzo]

Takara Shuzo gave the highest priority to supplying safe and secure products as a food manufacturer and focused on developing new products that provide a completely unprecedented quality of alcohol and added value and on nurturing products positioned as key brands, by uncovering latent consumer needs. In response to soaring raw material and energy prices, Takara Shuzo has committed to Company-wide cost reductions and efficiency improvement, as well as improving profit margins by revising product prices.

The segment's sales and other information are as shown below.

In shochu, sales decreased due to a decline in sales of large-volume products of ko-type shochu. In sake, although sales of Sho Chiku Bai Gokai and Sho Chiku Bai Subaru increased, sales of such products as Sho Chiku Bai Ten decreased, resulting in a decline in overall sales. In light-alcohol refreshers, sales grew as sales of Takara Shochu Highball, which is positioned as a key brand, continued to increase, and Takara Dry Zero Ball also increased. In seasonings, sales increased due to an increase in sales of alcohol-based seasonings, including Hon Mirin, and an increase in sales of food seasonings. In raw alcohol, etc., sales also increased.

As a result, net sales for Takara Shuzo increased 0.7% year on year to ¥123,786 million. Cost of sales decreased 1.7% year on year ¥92,057 million, and gross profit increased 8.4% year on year to ¥31,728 million. As SG&A expenses increased 7.5% year on year to ¥26,225 million due to an increase in strategically used advertising expenses, operating income increased 12.5% year on year to ¥5,503 million.

[Takara Shuzo International Group]

The Takara Shuzo International Group engages in the Overseas Alcoholic Beverages Business, which entails exports from Japan and the manufacture and sale of alcoholic beverages in overseas locations, and the Japanese Food Wholesale Business in overseas markets, through which it sells Japanese food ingredients to Japanese food restaurants, retailers, etc. outside Japan.

The segment's sales and other information are as shown below.

The Overseas Alcoholic Beverages Business engaged in expanding exports mainly by launching sales of TaKaRa Chu-Hi and sparkling sake Sho Chiku Bai Shirakabegura Mio NIGORI and CRISP exclusively for the U.S. in cooperation with Takara Shuzo. These Can Chu-Hi products are exclusively for overseas markets and capture local needs. Regarding whiskey, sales of

－ 2 －

Blanton's, the premium single-barrel bourbon, remained brisk. Sales of Overseas Alcoholic Beverages Business grew as sales of sake and other Japanese alcohol also increased.

The Japanese Food Wholesale Business in overseas markets engaged in diversification of sales channels and expansion of the range of products handled, focusing on expanding business bases in the U.S. Sales in the Japanese Food Wholesale Business in overseas markets also grew as a result mainly of excellent performance by a company welcomed to the Group and efforts to develop a supply system.

As a result, net sales for the Takara Shuzo International Group increased 16.7% year on year to ¥160,427 million. Cost of sales increased 14.3% year on year to ¥108,711 million, and gross profit increased 22.0% year on year to ¥51,715 million. As SG&A expenses increased 24.9% year on year to ¥39,423 million due to an increase in personnel expenses and warehouse rent expenses, operating income increased 13.6% year on year to ¥12,291 million.

[Takara Bio Group]

The Takara Bio Group is developing reagents/instruments that support research and development activities using biotechnology and providing them to biotech researchers around the world as such activities become increasingly widespread. Furthermore, we are developing CDMO business to support the development and manufacture of regenerative and cellular medicine and gene therapy, which have been actively developed by pharmaceutical companies in recent years. CDMO refers to the business of contracting out the processes of pharmaceuticals from formulation development to manufacturing, and the Takara Bio Group is focusing on the field of gene therapy drugs, etc. In addition, in the gene therapy business, the Takara Bio Group is working to maximize the value of our proprietary platform technology for biologics discovery by manufacturing and selling manufacturing aids for gene therapy products, creating new modalities (therapeutic means), and advancing new clinical development projects.

Net sales in this segment decreased as sales of testing-related products declined due to changes in the legal categorization of COVID-19 and there was a slump in the life sciences research market.

As a result, net sales for the Takara Bio Group decreased 44.3% year on year to ¥43,505 million. Cost of sales decreased 50.3% year on year to ¥16,597 million, and gross profit decreased 39.9% year on year to ¥26,908 million. SG&A expenses were down 1.3% year on year to ¥23,905 million primarily due to decreases in R&D expenses. Operating income decreased 85.4% year on year to ¥3,003 million.

[Other]

The Other segment includes the cargo transportation business, the wine import and sale business, and the real estate rental business. Net sales of the Other segment decreased 2.2% year on year to ¥30,271 million due to a decrease in the cargo transportation business despite an increase in the import and sale of wine. Cost of sales decreased 2.8% year on year to ¥26,011 million, and gross profit increased 1.9% year on year to ¥4,260 million. SG&A expenses rose 0.6% year on year to ¥1,897 million, and operating income was up 3.0% year on year to ¥2,363 million.

－ 3 －

Breakdown of sales results by product category

		Previous Fiscal Year	Fiscal Year under Review	YoY
	Segment	(From April 1, 2022	(From April 1, 2023
	Comparison
		to March 31, 2023)	to March 31, 2024)


	Product category	Amount (Millions of yen)	Amount (Millions of yen)	(%)

Takara Shuzo
	Shochu	36,597	34,324	(6.2)
	Sake	12,145	11,548	(4.9)

	Light-alcohol refreshers	40,069	42,290	5.5
	Other alcoholic beverages	5,328	5,434	2.0
	Hon Mirin	9,477	9,562	0.9
	Other seasonings	8,780	9,223	5.0
	Raw alcohol, etc.	10,522	11,402	8.4
	Total	122,921	123,786	0.7
Takara Shuzo International Group
	Overseas Alcoholic	18,253	20,926	14.6
	Beverages Business

	Japanese Food
	Wholesales Business in	121,354	141,816	16.9
	overseas markets
	Other	2,847	249	(91.3)
	Elimination of intra-Group	(4,972)	(2,564)	－
	transaction on consolidation

	Total	137,483	160,427	16.7
Takara Bio Group
	Reagents	65,925	31,961	(51.5)
	Instruments	1,375	892	(35.1)
	CDMO	8,200	7,997	(2.5)
	Gene therapy	2,640	2,653	0.5
	Total	78,142	43,505	(44.3)
	Reported segment total	338,547	327,720	(3.2)
Other	30,950	30,271	(2.2)
	Segment total	369,498	357,991	(3.1)
Sales not allocated to
business segments and	(18,832)	(18,619)	－
intersegment transactions
	Total	350,665	339,372	(3.2)
Note: Amounts include alcohol tax.

－ 4 －

Overview of Financial Position for the Fiscal Year under Review (Assets)
At the end of the fiscal year under review, current assets totaled ¥245,213 million, an increase of ¥3,700 million compared with that at the end of the previous fiscal year. This was primarily due to increases in electronically recorded monetary claims- operating of ¥1,175 million, merchandise and finished goods of ¥4,022 million, and other current assets of ¥1,003 million, despite a decrease in cash and deposits of ¥1,734 million.
Noncurrent assets were ¥192,254 million, an increase of ¥34,593 million compared with that at the end of the previous fiscal year. This was primarily due to increases in property, plant and equipment of ¥15,991 million, mainly due to increases in construction in progress, intangible assets of ¥2,404 million, and investments and other assets of ¥16,197 million due to an increase in the market valuation of investment securities.
As a result, total assets were ¥437,468 million, an increase of ¥38,293 million compared with that at the end of the previous fiscal year.

(Liabilities)

At the end of the fiscal year under review, current liabilities totaled ¥80,657 million, an increase of ¥13,202 million compared with that at the end of the previous fiscal year. This was primarily due to increases in short-term loans payable of ¥5,089 million, current portion of bonds of ¥5,000 million, accrued alcohol tax of ¥2,358 million, and accrued expenses of ¥2,457 million despite a decrease in other current liabilities of ¥2,713 million.

Noncurrent liabilities were ¥76,345 million, a decrease of ¥55 million compared with that at the end of the previous fiscal year. This was primarily due to decreases of ¥5,000 million in bonds payable and ¥4,763 million in long-term loans payable, despite increases in lease obligations of ¥2,917 million, deferred tax liabilities of ¥3,950 million, and other noncurrent liabilities of ¥3,030 million.

As a result, total liabilities were ¥157,003 million, an increase of ¥13,146 million compared with that at the end of the previous fiscal year.

(Net Assets)

At the end of the fiscal year under review, total net assets were ¥280,465 million, an increase of ¥25,146 million compared with that at the end of the previous fiscal year. This was primarily due to increases in retained earnings of ¥6,084 million, valuation difference on available-for-sale securities of ¥9,537 million, and foreign currency translation adjustment of ¥8,702 million.

As a result, the equity ratio totaled 52.3%, compared with 51.1% at the end of the previous fiscal year.

Overview of Cash Flows for the Fiscal Year under Review
Net cash provided by operating activities decreased ¥16,299 million year on year to ¥29,178 million primarily due to income before income taxes of ¥26,238 million, depreciation and amortization of ¥9,999 million, gain on sale of investment securities of ¥3,971 million, accrued alcohol tax of ¥2,358 million, a decrease in accrued consumption taxes of ¥3,031 million, an increase in other current liabilities of ¥2,264 million, and income taxes paid of ¥8,459 million.
Net cash used in investing activities resulted in expenditure of ¥19,993 million, an increase in expenditure of ¥9,518 million compared with that of the previous fiscal year primarily due to payments into time deposits of ¥4,592 million, proceeds from withdrawal of time deposits of ¥5,530 million, purchase of property, plant and equipment and intangible assets of ¥19,210 million, proceeds from sale of investment securities of ¥4,874 million, and purchase of shares of subsidiaries resulting in change in scope of consolidation of ¥5,441 million.
Net cash used in financing activities totaled ¥13,448 million, a decrease in expenditure of ¥8,766 million compared with that of the previous fiscal year primarily due to expenditure for purchase of treasury stock of ¥2,999 million, cash dividends paid of ¥7,503 million, and dividends paid to noncontrolling interests of ¥2,004 million.
As a result, cash and cash equivalents at fiscal year-end, including effect of exchange rate change on cash and cash equivalents, stood at ¥90,184 million, down ¥1,601 million from the previous fiscal year-end.
Future Outlook
In the fiscal year ending March 31, 2025, Takara Shuzo expects to increase profits by compensating for cost increases due to the effects of exchange rates with cost reductions and an improved product mix.
Takara Shuzo International Group expects to increase profits in both the Overseas Alcoholic Beverages Business and Japanese Food Wholesale Business in overseas markets by further cultivating existing sales channels, diversifying sales
- 5 －

channels, and expanding business bases, against the backdrop of the spread of Japanese food overseas.

The Takara Bio Group also expects to increase profits in all categories by strengthening sales under glocal strategies for each region and further utilizing Center for Gene and Cell Processing II.

As a result, regards the outlook for results for the year ending March 31, 2025, the Group expects to see an increase in profits in all major segments.

Therefore, for the following fiscal year, the year ending March 31, 2025, the Group is forecasting net sales of ¥362,000 million, operating income of ¥25,700 million, ordinary income of ¥26,300 million, and net income attributable to owners of the parent of ¥17,200 million. The details of the consolidated results forecasts and the results forecasts for each segment are described on pages 10/15-13/15 in "Supplement for the Consolidated Financial Statements."

2. Basic Concept on Selection of Accounting Standards

The Takara Group has a policy to prepare the Consolidated Financial Statements in accordance with the Japanese GAAP for the time being, taking into consideration comparability of the Consolidated Financial Statements across periods and companies.

As regards the application of the International Financial Reporting Standards, the Takara Group will take appropriate actions, taking into account the situations in Japan and other countries.

－ 6 －

3. Consolidated Financial Statements and Primary Notes

Consolidated Balance Sheets

		(Millions of Yen)
	As of Mar. 31, 2023	As of Mar. 31, 2024

Assets
Current assets
Cash and deposits	96,820	95,085
Notes and accounts receivable-trade	61,624	60,854
Electronically recorded monetary claims-operating	8,093	9,268
Merchandise and finished goods	57,812	61,834
Work in process	1,718	1,659
Raw materials and supplies	7,372	7,558
Other	8,765	9,768
Allowance for doubtful accounts	(694)	(817)
Total current assets	241,513	245,213
Noncurrent assets
Property, plant and equipment
Buildings and structures	76,265	80,477
Accumulated depreciation	(39,487)	(42,178)
Buildings and structures, net	36,778	38,298
Machinery, equipment and vehicles	90,919	92,456
Accumulated depreciation	(75,654)	(76,436)
Machinery, equipment and vehicles, net	15,265	16,019
Land	20,861	21,665
Lease assets	1,520	1,438
Accumulated depreciation	(731)	(757)
Lease assets, net	789	681
Construction in progress	3,662	12,796
Other	28,496	35,749
Accumulated depreciation	(16,962)	(20,328)
Other, net	11,533	15,420
Total property, plant and equipment	88,890	104,882
Intangible assets
Goodwill	10,668	12,154
Other	5,262	6,181
Total intangible assets	15,931	18,336
Investments and other assets
Investment securities	30,573	43,597
Net defined benefit asset	1,054	1,510
Deferred tax assets	2,170	1,913
Other	19,103	22,078
Allowance for doubtful accounts	(64)	(62)
Total investments and other assets	52,838	69,036
Total noncurrent assets	157,661	192,254
Total assets	399,174	437,468

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		(Millions of Yen)
	As of Mar. 31, 2023	As of Mar. 31, 2024

Liabilities
Current liabilities
Notes and accounts payable-trade	21,775	22,315
Short-term loans payable	4,919	10,008
Current portion of bonds	‒	5,000
Accrued alcohol tax	5,815	8,174
Accrued expenses	6,368	8,826
Income taxes payable	2,220	2,600
Provision for bonuses	3,380	3,470
Other	22,975	20,262
Total current liabilities	67,454	80,657
Noncurrent liabilities
Bonds payable	20,000	15,000
Long-term loans payable	15,186	10,422
Lease obligations	4,452	7,369
Deferred tax liabilities	4,855	8,806
Net defined benefit liability	8,925	8,735
Other	22,980	26,010
Total noncurrent liabilities	76,401	76,345
Total liabilities	143,856	157,003
Net assets
Shareholders' equity
Capital stock	13,226	13,226
Capital surplus	1,994	2,716
Retained earnings	163,825	169,909
Treasury stock	(1,682)	(2,103)
Total shareholders' equity	177,363	183,749
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	12,974	22,511
Deferred gains or losses on hedges	286	3
Foreign currency translation adjustment	13,686	22,389
Remeasurements of defined benefit plans	(359)	12
Total accumulated other comprehensive income	26,588	44,915
Noncontrolling interests	51,366	51,799
Total net assets	255,318	280,465
Total liabilities and net assets	399,174	437,468

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