Towa Pharmaceutical : FY2025 Consolidated Financial Results for the Year Ended March 31, 2026(Based on Japanese GAAP) (224K／22P)

Company name: TOWA PHARMACEUTICAL CO., LTD.

Stock exchange listing: Tokyo

Stock code: 4553 URL https://www.towayakuhin.co.jp/ Representative: President and Representative Director Itsuro Yoshida

May 14, 2026

Inquiries: Director Toshikazu Kokubun TEL 06-6900-9102 Scheduled date of ordinary general meeting of shareholders: June 24, 2026

Scheduled date to file Securities Report: June 22, 2026

Scheduled date to commence dividend payments: June 25, 2026 Preparation of supplementary material on financial results: Yes

Holding of financial results meeting: Yes (for analysts and institutional investors)

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the year ended March 31, 2026 (from April 1, 2025 to March 31, 2026)

   1. Consolidated operating results Percentages indicate year-on-year changes

      	Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent
      	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
      Year ended March 31, 2026	273,710	5.4	23,102	(0.6)	28,079	7.4	5,250	(72.3)
      Year ended March 31, 2025	259,594	13.9	23,242	31.7	26,152	6.8	18,986	17.4

      Note : Comprehensive income For year ended March 31, 2026 : ¥10,413 million [(44.1)%]

      For year ended March 31, 2025 : ¥18,645 million [(15.1)%]

      	Earnings per share	Diluted earnings per share	Profit attributable to owners of parent/equity	Ordinary profit/total assets	Operating profit/net sales
      Year ended March 31, 2026 Year ended March 31, 2025	Yen 106.66 385.71	Yen - -	% 3.0 11.6	% 5.9 5.8	% 8.4 9.0

   2. Consolidated financial position

      	Total assets	Net assets	Equity ratio	Net assets per share
      	Millions of yen	Millions of yen	%	Yen
      As of March 31, 2026	475,290	178,103	37.5	3,617.95
      As of March 31, 2025	470,823	171,625	36.5	3,486.40

      Reference : Equity As of March 31, 2026 : ¥178,103 million

      As of March 31, 2025 : ¥171,625 million

   3. Consolidated cash flows

      	Cash flows from operating activities	Cash flows from investing activities	Cash flows from financing activities	Cash and cash equivalents at end of period
      	Millions of yen	Millions of yen	Millions of yen	Millions of yen
      Year ended March 31, 2026	30,429	(25,660)	(6,828)	44,811
      Year ended March 31, 2025	23,401	(31,287)	21,567	45,460

2. Cash dividends

   	Annual dividends per share					Total cash dividends (Total)	Dividend payout ratio (Consolidated)	Ratio of dividends to net assets (Consolidated)
   	1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end	Total
   Year ended March 31, 2025 Year ended March 31, 2026	Yen - -	Yen 30.00 40.00	Yen - -	Yen 40.00 40.00	Yen 70.00 80.00	Millions of yen 3,445 3,938	% 18.1 75.0	% 2.1 2.3
   Year ending March 31, 2027 (Forecast)	-	40.00	-	45.00	85.00		19.5

3. Forecast of consolidated financial results for the year ending March 31, 2027 (from April 1, 2026 to March 31, 2027)

   Percentages indicate year-on-year changes

   	Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent		Earnings per share
   	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
   Six months ending September 30, 2026	145,700	11.7	12,700	21.6	11,700	(2.3)	8,100	(1.4)	164.54
   Full year	304,000	11.1	32,000	38.5	30,000	6.8	21,500	309.5	436.75

4. Notes

   1. Changes in significant subsidiaries during the year ended March 31, 2026

      (changes in specified subsidiaries resulting in the change in scope of consolidation):

      None

   2. Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements Changes in accounting policies due to revisions to accounting standards and other regulations: None Changes in accounting policies due to other reasons: None

      Changes in accounting estimates: None

      Restatement of prior period financial statements: None

   3. Number of issued shares (common shares)

Total number of issued shares at the end of the period (including treasury shares) Number of treasury shares at the end of the period

Average number of shares during the period

[Reference] Overview of non-consolidated financial results

Non-consolidated financial results for the year ended March 31, 2026 (from April 1, 2025 to March 31, 2026)

1. Non-consolidated operating results Percentages indicate year-on-year changes

   	Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent
   	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
   Year ended March 31, 2026	182,736	6.1	24,945	5.3	31,644	14.9	(1,483)	-
   Year ended March 31, 2025	172,269	15.4	23,688	18.7	27,532	1.1	21,100	7.7

   	Earnings per share	Diluted earnings per share
   	Yen	Yen
   Year ended March 31, 2026	(30.14)	-
   Year ended March 31, 2025	428.66	-

2. Non-consolidated financial position

Reference : Equity As of March 31, 2026 : ¥163,414 million

As of March 31, 2025 : ¥168,739 million

* This report of financial results is unaudited.

*Explanation Concerning the Appropriate Use of Financial Results Forecasts and Other Special Instructions (Caution regarding forward-looking statements)

The forecast of financial results and forward-looking statements contained in this report are based on information currently available to the Company as well as certain assumptions that it judges to be reasonable. Actual results may differ materially due to a variety of factors. For the assumptions used in forecasts and precautionary statements regarding the use of the forecasts, please refer to "1.

Overview of Operating Results and Financial Position (4) Future outlook" on page 7 of the accompanying materials.

(Method of Obtaining Financial Results Supplementary Materials)

Financial results supplementary materials are posted via TDnet on the date of disclosure.

Contents

1. Overview of Operating Results and Financial Position 2

   1. Overview of operating results for the fiscal year under review 2

   2. Overview of financial position for the fiscal year under review 6

   3. Overview of cash flows for the fiscal year under review 7

   4. Future outlook 7

2. Basic Approach to the Selection of Accounting Standards 8

3. Consolidated Financial Statements and Key Notes 9

   1. Consolidated balance sheets 9

   2. Consolidated statements of income (cumulative) and consolidated statements of comprehensive income (cumulative) 11

      Consolidated statements of income (cumulative) 11

      Consolidated statements of comprehensive income (cumulative) 12

   3. Consolidated statements of changes in equity 13

   4. Consolidated statements of cash flows 14

   5. Notes to consolidated financial statements 16

(Notes on going concern assumption) 16

(Consolidated Statements of Income) 16

(Notes on segment information) 16

(Notes on per share information) 19

(Notes on significant subsequent events) 19

- 1 -

The forward-looking statements in this document are those determined as of the end of the current consolidated accounting period.

With the corporate philosophy of "Contribute to people's health and dedicate ourselves to people's genuine smiles," the Group has been working on various issues. The aim is to establish a foundation in new markets and new businesses and realize group synergies with each subsidiary while making the domestic generic drug business its core business in accordance with the "6th Medium-term Business Plan 2024-2026 PROACTIVE III" announced in June 2024.

As a result, operating results for the fiscal year under review are as follows.

Consolidated earnings (Millions of yen)

Net sales were up due to an increase in sales volume as well as unit price at Towa Pharmaceutical and growth in sales in the European B2B and B2C businesses at Towa Pharma International Holdings, S.L. (hereinafter referred to as "Towa INT"). Operating profit, on the other hand, declined as it failed to offset a rise in the cost of sales ratio at Sunsho Pharmaceutical Co., Ltd. (hereinafter "Sunsho Pharmaceutical") resulting from a worsening sales mix.

Net sales were 273,710 million yen (up 5.4% year on year), operating profit came to 23,102 million yen (down 0.6% year on year), ordinary profit was 28,079 million yen (up 7.4% year on year) due to a gain of 5,384 million yen on valuation of derivatives, but profit attributable to owners of parent totaled 5,250 million yen (down 72.3% year on year). This decline was due to the recording of impairment losses of 14,729 million yen as a result of the future cash flow review, in light of the deteriorating performance of Sunsho Pharmaceutical.

- 2 -