［Code Number: 7979］［Code Number: 7979］

Briefing Materials
Financial Results and Forecasts
for 1Q FY March 2025
August 2, 2024

Financial Summary

Consolidated Financial Results for
1Q FY March 2024
Financial Forecasts for FY March 2025

1

■ Financial Summary

Financial Summary
FY3/25 1Q results
Net sales
Operating income¥9,457mn¥1,550mn（Overseas sales 60.5%）➢

Net sales increased 14.4% YoY due to sales expansion of existing products overseas, a pickup in
CAD/CAM-related machinery in Japan, firm demand for SHOFU Block PEEK which is now fully covered byhealth insurance and the impact of forex (yen depreciation )➢Operating income increased 35.5% YoY due to sales growth, improved gross margin covering high SG&A,
and the effect of yen depreciation¥38,395mn¥5.293mn

Shareholder returns➢

Dividend policy: Payout ratio of 40%+ and DOE of 3.0%+ on a consolidated basis➢

Dividend forecast for FY3/25 is ¥88/share, an increase of ¥26 YoY*➢

Dividend amounts will be reviewed as appropriate based on the policy*A two-for-one stock split of shares of common stock is scheduled to take effect on October 1, 2024.

The dividend forecast of ¥88/share is based on a pre-split basis.

2

Financial Summary

Consolidated Financial Results for
1Q FY March 2024
Financial Forecasts for FY March 2025

3

■Consolidated Financial Results for 1Q FY3/25

Key earnings highlights for 1Q FY3/25(¥mn, ％)
1Q FY3/24
Actual1Q FY3/25
ActualRevised plan announced
on August 2, 2024

Change YoY

1-2Q FY3/25
Forecast(% of sales)(% of sales)(% change)(1Q % change)

Net sales

8,265 ( 100.0)

9,457 ( 100.0)

1,192 ( 14.4)

18,996 ( 49.8)(Domestic sales)

3,507 ( 42.4)

3,738 ( 39.5)

231( 6.6)

7,787 ( 48.0)(Overseas sales)

4,757 ( 57.6)

5,719 ( 60.5)

961 ( 20.2)

11,209 ( 51.0)

Gross profit

4,942 ( 59.8)

5,690 ( 60.2)

748 ( 15.2)

11,459 ( 49.7)（SG&A）

3,797 ( 45.9)

4,140 ( 43.8)

342( 9.0)

8,538 ( 48.5)

Operating income

1,144 ( 13.9)

1,550 ( 16.4)

405 ( 35.5)

2,921 ( 53.1)

Ordinary income

1,367 ( 16.5)

1,812 ( 19.2)

445 ( 32.6)

3,189 ( 56.8)

1,120

433 ( 63.2)

2,598 ( 43.1)

Net income

686

EPS

38.77

63.12

24.35

146.38

ROE

1.9％

2.7％

0.8ppt--( 8.3)( 11.8)

Forex
＄
€
RMB

138.11150.35156.53168.37

18.42
18.02

149.45160.50

19.33

20.54

1.21

21.06

*Effect of forex fluctuations: Net sales ＋¥538ｍｎ (vs previous FY)*Net income = net income attributable to owners of parent

4

■Consolidated Financial Results for 1Q FY3/25

Operating income (YoY)
Units: ¥mn, (% of total)

9,457

8,265

Net sales: +¥1，192mn (+14.4％)
Net sales

3,766(39.8%)
3,322(40.2%)

Operating income:+¥405mn(+35.5％)
Increased due to sales growth
Margin improved, absorbing an increase in
SG&A expenses.

Cost of sales

SG&A

OperatingincomeNet sales growth and forex effects.

3,797(45.9%)

1,144(13.9%)
1Q FY3/24
Actual4,140(43.8%)

1,550(16.4%)
1Q FY3/25
ActualCost of sales ratio: -0.4ppt
Overseas sales growth
Improved sales mix

SG&A ratio: -2.1ppt
SG&A almost in line with forecast
SG&A ratio decreased due to revenue
increase5

■Consolidated Financial Results for 1Q FY3/25

Net sales by product category (YoY)
Net sales +1,192 （+14.4％）

CementProd.

93
Artificial
Teeth Prod.

37

74 Abrasive
Prod.

Metal
Prod. 466

9

Chemical
Prod.

Nail Care& OtherBusiness

(¥mn)

538

190

Forex
49 impact
Machinery,
Equipment&Other Prod.

8,265

Dental Business +703（+9.2％）

1Q
FY3/25
ActualArtificial Teeth
人工歯類
Products
Abrasive
研削材類
Products
Metal Products
金属類
Chemical
化工品類
Products
Cement
セメント類他
Products

Change YoY(%)

Composition \ basis

Localcurrency
basis

1,771

18.7% 102.8%

95.7%

1,394

14.7%

110.3% 103.0%

38

0.4%

79.3%

79.3%

3,079

32.6% 127.9%

119.4%

885

9.4% 120.2%

112.7%

113.1%

Actual

9,457

1Q
FY3/24
Actual1Q FY3/25

Machinery,
Equipment& Other
機械器具類他
Products

1,692

17.9%

116.0%

Dental Business
total

8,862

93.7%

116.0% 109.2%

Nail Care & Other
Business
Total

595

6.3%

9,457

100.0%

95.1%

92.1%

114.4% 107.9%✓

Chemical Products: Filling and restorative materials and CAD/CAM resin blocks supply constraints were✓Machinery, Equipment & Other Products: Demand for CAD/CAM machinery in Japan recovered. Sales

resolved. Significant YoY increase due to proactive sales promotions and strong demand, especiallyoverseas. In Japan, demand for SHOFU Block PEEK, which is now covered by health insurance for CAD/CAM
crowns for all molars, was strong.
of the Eye Special C-V (digital dental cameras) were also strong.

6

■Consolidated Financial Results for 1Q FY3/25

Net sales by region (YoY)
Net sales +1,192 （+14.4％）(¥mn)
Change YoY(%)

1Q FY3/25

Forex
impactChina

ActualComposition￥ basisEuropeLocal currency
basis

Japan

3,738

39.5%

106.6%

106.6%

Overseas

5,719

60.5%

120.2%

108.9%

North ＆
Latin
America
金属類

1,257

13.3%

126.0%

111.5%

Europe

2,046

21.6%

114.5%

102.1%

China

1,345

14.2%

126.7%

119.3%

Asia
ex-China &Oceania
機械器具類他

1,070

11.3%

117.3%

107.3%

9,457

100.0%

114.4%

107.9%

Japan
North &
Latin
America

Asia exChina &Oceania

化工品類

セメント類他

Overseas（local currency basis）+422（+8.9％）

Total*Europe ： Includes Middle East and Africa✓✓

Japan: Solid demand for SHOFU Block PEEK and CAD/CAM related machinery recovered
North & Latin America: Temporary increase in channel inventories of abrasive products was resolved✓

Europe: A lull in demand after initial inventory for new business development in the Middle East, which has✓

China: Significant YoY increase mainly in filling and restorative materials (chemical products)

and demand recovered to normal levels. Direct sales to laboratories started in earnest.
been a focus since the previous fiscal year.

7

■Consolidated Financial Results for 1Q FY3/25

Operating income swing factors (YoY)

Sales
growth371

Increase inpersonnel
expenses71
Decrease incost of sales
ratio

90

(¥mn)
Increase inadvertisingexpenses22

Increase in
R&D
expenses27

13
Decrease indepreciation

Increase inotherexpenses

24

114
Forex
impact・Commissions: -25

1,550

1,144

・Operating income of overseas subsidiaries: ＋98

・Parent imports and exports: ＋196
・Consolidation adjustments: -180

SG&A +150 (+3.9％)
1Q FY3/24
Operatingincome1Q FY3/25
Operatingincome✓Cost of sales ratio declined due to increase in overseas sales ratio and improvement in sales mix. Cost of
sales ratio improved due to high production utilization ratio✓

In line with expansion of overseas business, mainly overseas stepped-up allocation of staff✓

Strengthened sales activities as well as upfront investments in R&D etc

8■Consolidated Financial Results for 1Q FY3/25

Balance ｓheet
Assets50,093Liabilities and net assets

50,578

9,716

9,394

Cash anddeposits

10,29011,339Inventories

11,553

10,838Investment
securities

18,53319,005

FY3/24

1Q FY3/25(¥mn)

50,09350,578

281

500

8,202

8,017

Other
liabilities

41,60942,060Net assets

FY3/24

1Q FY3/25

Loans payable

Other assets

High equity ratio (82.9%)：
Aim to achieve capital efficiency-conscious management and maintain strong financial position✓

Total assets (+¥484mn): Increase in notes and accounts receivable-trade and merchandise andfinished goods.

✓

Net assets (+¥450mn): Increase in retained earnings and foreign currency translation adjustments.

9

Financial Summary

Consolidated Financial Results for
1Q FY March 2024
Financial Forecasts for FY March 2025

10

■Financial Forecasts for FY3/25

Summary of ｆull-year forecasts◼
◼
◼

Solid growth is planned for overseas operations. Capacity utilization rates are expected to remainhigh as in the previous year due to continued strong demand for chemical products and cement,
particularly in emerging countries
Aim to grow centered on chemical products, achieving both margin expansion and topline growth
The yen has weakened compared to our initial assumptions, and we have revised our forex
assumptions→On August 2, 2024 we revised up our financial forecasts, and expect our fourth consecutive fiscal
year of sales and profit growth, and to mark record highs◼

Active investment in human resource development and facilities to enhance corporate value◼

Strengthen sales activities in Japan and overseas after eliminating bottlenecks in existing productsupply◼

Focus on cultivating new business areas and accompanying new product development (R&D)◼

Set strategic investment framework to enable dynamic corporate activities→Bold and continuous investment for future expansion of corporate value and business growth◼

Improve production efficiency in light of opportunity losses due to supply constraints in FY3/24◼

Establish a production system capable of speedily increasing production when demand surges◼

Establish an organization that is able to flexibly respond to change in pharmaceutical regulations
and policies in various countries and regions, and avoid business gaps

→Establish a system and structure that can respond to future increases in demand and business risks

11

■Financial Forecasts for FY3/25

Comparison of key metrics(¥mn, ％)

Revised plan announced on August 2, 2024

FY3/24 Actual

FY3/25 Forecast(% of sales)

Change YoY(% of sales)(% change)

Net sales

35,080( 100.0)

38,395( 100.0)

3,315( 9.4)(Domestic sales)

14,892 ( 42.5)

15,912( 41.4)1,020( 6.8)(Overseas sales)

20,188 ( 57.5) 22,483 ( 58.6)

2,295( 11.4)Gross profit

20,995 ( 59.8)

23,081( 60.1)

2,086( 9.9)（SG&A）

16,286 ( 46.4)

17,787( 46.3)

1,501( 9.2)

Operating income

4,709 ( 13.4)

5,293( 13.8)584( 12.4)

Ordinary income

5,118 ( 14.6)( 14.6)486( 9.5)Net income
EPS
ROE

3,655 ( 10.4)

5,604
4,434

( 11.5)170.87
10.4％

778( 21.3)206.189.5％－ （*)
0.9ppt

Forex
＄
€
RMB

144.40156.80145.09155.65

0.69
-1.15

19.80

20.11

0.31

Effect of forex fluctuations (YoY): Net sales -¥49mn
Net income = net income attributable to owners of parent
FY3/25 EPS forecast on a pre-stock-split basis would be ¥249.74
FY3/25 Forecast = revised plan announced on August 2, 2024.

12

■Financial Forecasts for FY3/25

Net sales by product category (YoY)
Units: ¥mn

Net sales +3.315 （+9.4％）

FY3/25Composition\ basisLocal
currency
basis

7,400

19.3%

108.1%

108.1%

5,666

14.8% 107.7% 107.7%

167

0.4% 104.2% 104.2%

Forecast

Cement
Prod.
461

Metal
Prod. 1,303

Artificial
Teeth Prod.
553

402

Abrasive
Prod.

6

Chemical
Prod.

Nail Care& OtherBusiness Forex

437

199

impact49

Machinery,
Equipment&Other Prod.

38,39535,080Dental Business +3,164（+9.7％）

FY3/24
Actual

✓✓✓FY3/25
Forecast

Artificial Teeth
人工歯類
Products
Abrasive
研削材類
Products
Metal Products
金属類
Chemical
化工品類
Products
Cement
セメント類他
Products

Change YoY

11,91231.0%

112.5%

112.3%

3,553

9.3%

114.8%

114.9%

Machinery,
Equipment& Other
機械器具類他
Products

7,099

18.5% 106.5% 106.6%

Dental Business
total

35,799

93.2% 109.7% 109.7%

Nail Care & Other
Business

2,595

Total

38,395

6.8% 105.7%

108.1%

100.0% 109.4% 109.6%

Solid growth in all businesses and product categories. Notably expect 10% growth in real terms(excluding forex) for chemical products and cement
Full-scale integrated production of the Diamond Point series, a mainstay abrasive product at
Vietnam production subsidiary. Shipments to US and Asia, where demand is expected to recoverafter the completion of channel inventory adjustments
Expect sales expansion of machinery and equipment (SHOFU S-WAVE CAD/CAM system) following
the broadening of the scope of CAD/CAM crown insurance coverage in FY3/24

13

■Financial Forecasts for FY3/25

Net sales by region (YoY)
Net sales +3,315 （+9.4％）

China
EuropeJapan

Asia exChina &Oceania Forex
323 impact

794

FY3/25

49

569
656

1,020 North& LatinAmerica

35,080

Units: ¥mn

38,395￥ basisLocal currency
basis

41.4%

106.8%

106.8%

22,48358.6%

111.4%

111.6%

North ＆
Latin
America
金属類

4,986

13.0%

115.5%

115.2%

Europe

7,737

20.2%

107.0%

107.9%

China

5,650

14.7%

118.5%

116.7%

Asia exChina &Oceania
機械器具類他

4,107

10.7%

106.1%

108.4%

38,395100.0%

109.4%

109.6%

forecast

Composition

Japan

15,912

Overseas

化工品類
セメント類他

Overseas（local currency basis）+2,344（+11.6％）

Total
FY3/24
Actual

FY3/25
forecast

Change YoY(%)*Europe ： Includes Middle East and Africa✓

Japan: Expect further growth in SHOFU Block PEEK (CAD/CAM crowns for all molars) and related✓

North & Latin America: Complete adjustment of abrasive materials channel inventory, plan to✓

China: High demand, mainly for filling and restorative materials is expected to continue this year against✓

peripheral materials and instruments
strengthen sales of filling and restorative materials
a backdrop of high market growth rates

India (Other Asia): Particularly strong demand for ceramic materials (artificial teeth) and cement. Aim toincrease market share there by strengthening our production system

14

■Financial Forecasts for FY3/25

Operating income swing factors (YoY)

216

2,011

Sales
growthDecrease incost of sales
ratio

Increase inpersonnel
expenses

563

Units: ¥mn
Increase inadvertisingexpenses

195

Increase in
R&D
expenses

225

74

Increase in otherexpenses94
Decrease indepreciation

・Freight and packing costs： - 71
・Travel and transportation expenses: - 59
・Rent expenses: - ４０
・Strategic investment expenses: - 395

639
Forex
impact

5,293

4,709
・Operating income of overseas subsidiaries: ＋8
・Parent imports and exports: +24
・Consolidation adjustments: -１２７

SG&A +1,548 (+9.5％)
FY 3/24
ActualOperatingincome✓✓FY3/25
Forecast
OperatingincomeImproved sales mix due to a higher proportion of overseas sales and high margin products (chemical
products) and an improved cost of sales ratio due to high production capacity utilization of the back ofstrong product demand
Active investment in growth, including the recruitment and utilization of global human resources, advertisingand promotional expenditure for the purpose of strengthening sales, and R&D for the development of next
generation products. Set strategic investment framework to enable dynamic corporate activities

15

■Financial Forecasts for FY3/25

Forex impact
FY3/25 Forecast※Revised plan announced on August 2, 2024

Forex rate

Consolidated
earnings impact

Units: ¥mn

Per yen of yen
strength

FY3/24

FY3/25
Forecast

USD

144.40145.09

29

44

-43

-21

EUR

156.80155.65

-51

11

-44

-16

RMB

19.80

20.11

85

-2

-275

-179

Sales

OperatingincomeSales

Operatingincome✓The main forex assumptions for the second quarter (cumulative) and the full year forecasts of the
fiscal year ending March 2025 are the average rates for the period, based on the previously
announced assumptions of ¥140/＄, ¥150/€, and ¥19/RMB from the second quarter of the fiscal
year ending March 2025.

✓

Overseas sales ratio is on an upward trend; yen appreciation will have a negative impact on
performance ($: Every ¥1 of yen appreciation hits sales by ¥43mn and operating income by ¥21mn）

16Forecasts in this document are based on information and data available
at the time of release as well as on assumptions concerning uncertain
factors that might affect the company’s future business performance.
Depending on various factors, actual business performance could
differ substantially from the forecasts contained in this document.

SHOFU INC.
11 Kamitakamatsu-cho, Fukuine,
Higashiyama-ku, Kyoto 605-0983, Japan
URL: https://www.shofu.co.jp
E-mail: ir@shofu.co.jp
Contact: Corporate Planning Department1718