［Code Number: 7979］

Briefing Materials
Financial Results and Forecasts
for 3Q FY March 2024
February 2, 20240Consolidated Financial Results for
1-3Q FY March 2024
Financial Forecasts for
FY March 2024
TOPICS（Oct-Dec 2023）

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■Consolidated Financial Results for 1-3Q FY March 2024

Highlights
Financial Results for 1-3Q FY March 2024
Net sales
Operating income¥25,403mn（Overseaｓ sales ratio 57.4%）¥3,409mn【YoY】
Sales rose 7.0% following the launch of next-gen dental cameras, sales growth in existingproducts overseas, and forex effects

Operating income turned up YoY, rising 3.6% despite a sharp increase in SG&A due toupfront investments and efforts to bolster marketing, on the back of the sales growth.

【 FY March 2024 outlook】
Expecting record-high sales and profits for the third straight year The achievement rate (vs the revised plan on October 24, 2023) for sales and operating
income is 72.8% and 79.1% respectively.
 Chemical product supply shortages and order backlogs were an ongoing issue since theprevious fiscal year, but were largely resolved during 3Q. Efforts to improve profitability bycapturing steady overseas demand were stepped up. We also focused on expanding sales
in the domestic market of dental cutting resin materials and related products (newlycovered by insurance), as well as self-care toothpaste (exclusively sold at dental offices),and other new products.

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■Consolidated Financial Results for 1-3Q FY March 2024

Key earnings highlights for 1-3Q FY March 2024
Units: ¥mn, ％1-3Q FY3/23

1-3Q FY3/24(% of sales)(% of sales)

Change From
Previous Period(% change)

Net sales

23,742 ( 100.0)

25,403 ( 100.0)

1,661( 7.0)

34,888 ( 72.8)(Domestic sales)

10,772 ( 45.4)

10,812 ( 42.6)

39( 0.4)

14,851 ( 72.8)(Overseas sales)

12,969 ( 54.6)

14,590 ( 57.4)

1,621 ( 12.5)

20,037 ( 72.8)

Gross profit

14,008 ( 59.0)

15,219 ( 59.9)

1,211( 8.6)

20,614 ( 73.8)（ SG&A expenses ）10,717 ( 45.1)

11,809 ( 46.5)

1,091 ( 10.2)

16,306 ( 72.4)

Operating income

3,290 ( 13.9)

3,409 ( 13.4)

119( 3.6)

4,308 ( 79.1)

Ordinary income

3,664 ( 15.4)

3,692 ( 14.5)

28( 0.8)

4,572 ( 80.8)

Net income

2,796 ( 11.8)

2,747 ( 10.8)- 48 ( -1.7)

3,204 ( 85.7)

Net income per share
Return on shareholders'equity

FY3/24 Forecast(% of sales)

157.29154.97-2.32

180.70

8.2％

7.4％

-0.8P

8.8％

Forex
USD
EUR
RMB

135.40140.4219.32

142.76155.19
19.65

7.36
14.77
0.33

141.31153.51
19.65* Effect of forex fluctuations 【Change from previous period】: Net sales ＋¥802ｍｎ* Net income in the table refers to "net income attributable to owners of parent".
* Full-year forecast for FY3/2024 is the revised plan announced on 10/24/2023.

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■Consolidated Financial Results for 1-3Q FY March 2024

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

25,40323,742

Net sales: +¥1,661mn (+7.0％)

Net sales

Overseas sales growth and forex effects.

10,184
9,734(40.1%)(41.0%)
Cost of sales

OP increased due to sales growth
OPM fell slightly due to higher SG&A,(particularly personnel expenses)

10,717
SG&A

Operatingincome

Operating income: +¥119mn(+3.6％)(45.1%)

3,290

11,809

Cost of sales ratio: -0.9pt(46.5%)

Improved sales mix, yen depreciation.

3,409(13.9%)(13.4%)

1-3Q FY3/23

1-3Q FY3/24

SG&A ratio: +1.4pt
Higher SG&A ratio due to growthinvestment and bolstered marketing.

4

■Consolidated Financial Results for 1-3Q FY March 2024

Sales by product category (YoY)
Units: ¥mnNet sales +1,661 （+7.0%）

590
179

1(+3.9％)(+0.0％)

802

208(+10.4％)40140(△2.9％)(+2.3％)(+8.9％)
22(△15.3％)

25,40323,742

Dental Business +818 （+3.7％）

1-3Q
FY3/23

ArtificialTeeth
Products

Abrasive
Products

Metal
Products

Chemical
Products

CementProducts

Machinery,Equipment& Other
Products

Nail Care
Businessand Other
BusinessForex
impact1-3Q
FY3/24

Resumption of aggressive sales promotions for chemical products as supply constraints eased.

Special demand in the previous year for new CAD/CAM equipment in Japan fell back.

Favorable inquiries for various new products including “EyeSpecial C-Ⅴ” (digital dental cameras)

5■Consolidated Financial Results for 1-3Q FY March 2024

Sales by region (YoY)
Units: ¥mnNet sales +1,661 (+7.0%)802425(+7.0％)

26139173(14.5％)(+0.4％)

40(+5.8％)
25,403(-1.3％)

23,742

Overseas（local currency basis）+819 （+6.3％）

1-3Q FY3/23

Japan

North ＆Latin America

EuropeChina

Asia ex-China Forex impact 1-3Q FY3/24& Oceania

North & Latin America on a recovery track since 3Q FY3/24. Sales recovered to flat YoY due to sales
growth in “EyeSpecial C-V” (digital dental cameras) and chemical products, despite inventory
adjustments in abrasive products.

Exports from Japan to India, temporarily suspended from this fiscal year, resumed as regulatory
approval filings were completed.

6

■Consolidated Financial Results for 1-3Q FY March 2024

Operating income swing factors (YoY)
Units: ¥mn

212
487

Increase indepreciation
Decrease incost of sales
ratio

Sales
growth248

53

Increase inpersonnel Increase in
expenses advertisingexpenses40

Increase inotherexpenses93

Increase in
R&D
expenses

347

203

Effects offoreign
currency
fluctuation・Commissions: -131

3,290

・Travel expenses: -100

3,409

・Operating income of overseas subsidiaries: ＋132

・Parent imports and exports: ＋219
・Consolidation adjustments: -149

SG&A expenses +783 (+7.3％)
1-3Q FY3/23
Operatingincome

1-3Q FY3/24
Operatingincome



Improvement in cost of sales ratio due to higher overseas sales ratio and better sales mix

Ongoing upfront investments for growth, such as bolstering personnel and more R&D initiatives

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■Consolidated Financial Results for 1-3Q FY March 2024

Balance Sheet
Units: ¥mnTotal assets

Total liabilities and net assets
43,72745,72443,72745,724362

8,668

Cash anddeposits

10,043Inventories

9,578

8,392

9,793

9,049

1,189

17,219FY3/23

1-3Q FY3/24

6,649

7,022

Investment
securities

35,515

16,706Loans payable

38,712Otherliabilities

Net assets

Other assets

FY3/23

1-3Q FY3/24

Maintained strong financial position and high equity ratio (84.3%)
Total assets （＋1,997） ： More inventories, increase in investment securities amid rising market
prices.

Net assets （＋3,197）: Higher valuation difference on securities and larger foreign currencytranslation adjustment.

8Consolidated Financial Results for
1-3Q FY March 2024
Financial Forecasts for
FY March 2024
TOPICS(Oct-Dec 2023)

9

■Financial Forecasts for FY March 2024

Summary of Full-Year Forecasts
 Expect global dental market growth and strong demand, particularly inemerging countries
 Look for expansion in overseas business and improving sales mix→ Sales and income to reach a record high for the third consecutive year Aggressive investment in R&D, human resource development
and facilities to enhance corporate value, Strengthening sales activities amid normalization of global
economic activity
 Rising costs due to higher raw material and energy prices→ Continue to invest for future business growth→ Measures to address high costs include improving production
and sales efficiency and revising product prices.
 Expect to clear backorders taken in the previous fiscal year, when
production could not keep up with the surge in demand, in the current
fiscal year.
→ Establish a system to deal with future demand growth and address
business risks.
10■Financial Forecasts for FY March 2024

Comparison of key metrics
Units: ¥mn, ％FY3/23 Actual

FY3/24 Forecast(% of sales)(% of sales)

Change From
Previous Period(% change)

Net sales

31,678( 100.0)

34,888( 100.0)

3,209( 10.1)(Domestic sales)

14,282 ( 45.1)

14,851( 42.6)568( 4.0)(Overseas sales)

17,396 ( 54.9) 20,037 ( 57.4)

Gross profit

18,699 ( 59.0)

20,614( 59.1)

1,914( 10.2)（ SG&A

14,874 ( 47.0)

16,306( 46.7)

1,431( 9.6)

expenses ）2,641 ( 15.2)

Operating income

3,824( 12.1)

4,308( 12.3)

483( 12.6)

Ordinary income

4,238 ( 13.4)

4,572( 13.1)

333( 7.9)

Net income

3,135

3,204( 9.2)

68( 2.2)

Net income per share
Return on shareholders'equity( 9.9)

176.10180.70

4.60

9.2％

8.8％

-0.4P

Forex
USD
EUR
RMB

134.95141.2419.38

141.31153.51
19.65

6.36
12.27
0.27

*Effect of forex fluctuations (YoY): Net sales +¥940mn*Net income = net income attributable to owners of parent11■Financial Forecasts for FY March 2024

Segment forecasts (net sales & operating income)Units: ¥mnDental
Business
Nail Care
Business
Other
Businesses
Total before
consolidation
adjustment
Consolidated

Net sales

FY3/23
Actual

FY3/24
ForecastAmount(% of sales)

Amount(% of sales)

Operating income

29,238
3,719(Operating income margin)( 12.7)

Net sales
Operating income

2,34593(Operating income margin)( 4.0)

Change from
Previous Period

32,325－

3,087－

2,460－

115－

102－

2－

34,888－3,204－

Operating income

31,6783,824

34,8884,308

3,209483(Operating income margin)( 12.1)( 12.3)( 0.3)Net sales
Operating income

1005(Operating income margin)( 5.4)Net sales
Operating income

31,684
3,818(Operating income margin)( 12.1)

Net sales

12■Financial Forecasts for FY March 2024

Sales by region (YoY)
Net sales +3,209 (+10.1%)

Units: ¥mnOverseas（local currency basis）+1,701 (+9.8％)

277
728
214
567

(5.3％)

481

940(+8.4％)(18.4％)

34,888(+7.9％)(4.0％)

31,678

FY3/23

Japan

North ＆Latin America

EuropeChina

Asia ex-China& Oceania

Forex
impactFY3/24
forecast

Domestic sales to remain solid amid stable demand

Expect organic growth of ¥1,701mn (+9.8%) YoY for overseas sales (currency-neutral basis)

Steady business growth in China and Europe (& Middle East) expected to contribute to overseas sales

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■Financial Forecasts for FY March 2024

Forex impact
FY3/24 Forecast(Units: \mn)

Forex rate

Consolidated
earnings impact

Per yen of yenstrength

FY3/23

FY3/24Forecast

USD

134.95141.31

255

132-40-17

EUR

141.24153.51

517

221-42-17

RMB

19.38

19.65

64

10-240-150

Sales

OperatingincomeSalesOperatingincome

FY3/24 forex assumption used are actual rates from 2Q FY3/24 (USD: ¥6.36 depreciation YoY)

Overseas sales ratio is increasing so yen depreciation has a positive impact on earnings

14Consolidated Financial Results for
1-3Q FY March 2024
Financial Forecasts for
FY March 2024
TOPICS（Oct-Dec 2023）

15

■ TOPICS

Dividend forecast revised
We revised our annual dividend forecast for FY3/2024 as follows (Feb 2, 2024)

Dividends per share
End ofsecond quarter

Previousforecast

Year-end

AnnualConsolidated
dividendpayout ratio¥27.00¥47.0026.0％¥38.00¥58.0032.1％¥42.00¥57.0032.4％

DOE(Released on May 10, 2023)

Currentforecast
FY3/2024¥20.00FY3/2023¥15.00

3.0%(Notes) Year-end dividends for FY3/2023 included a commemorative dividend of ¥10.00(100th anniversary of company’s founding)Annual dividend forecast raised by ¥11 vs previous forecast
Policy:Target:

Maintain stable dividends on an ongoing basis
Consolidated dividend payout ratio of 30% or more
Dividend on equity (DOE) ratio of 1.7%

(May 10, 2023)

16■ TOPICSSHOFU BLOCK PEEK
Material for CAD/CAM crowns (V) now covered by health insurance

SHOFU BLOCK PEEK can be used for all molars
Scope of crown restorations using CAD/CAM crowns
covered by health insurance expanded (from Dec. 1, 2023)
Only SHOFU BLOCK PEEK approved for healthinsurance for CAD/CAM crowns on all molars.

Featuresupper jaw

Reduced risk of failure

High toughness

Applicable

Exceptional

Biocompatibility
Gentle on natural teeth

Applicable

lower jaw

Thin structure
PEEK：Poly Ether Ether Ketone
A high-performance engineering thermoplastic thatbelongs to the family of polyketones

17■ TOPICS

Published SHOFU INC. Integrated Report 2023
SHOFU INC. Integrated Report 2023
https://pdf.irpocket.com/C7979/gX9u/T6Wc/MyGh.pdf

18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: http://www.shofu.co.jp
E-mail: ir@shofu.co.jp
Contact: Corporate Planning Department

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