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.

Consolidated Financial Results
for the Three Months Ended February 29, 2024
(Under Japanese GAAP)

April 12, 2024

Company name: Lacto Japan Co., Ltd.
Listing:
Tokyo Stock Exchange
Securities code: 3139
URL:
https://www.lactojapan.com/en/
Representative: Motohisa Miura, President
Inquiries:
Kenji Bundo, Executive Vice-President
Scheduled date to file quarterly securities report:
April 12, 2024
Scheduled date to commence dividend payments:－
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results briefing:
None(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the three months ended February 29, 2024 (from December
1, 2023 to February 29, 2024)(1) Consolidated operating results (cumulative)
Net sales(Percentages indicate year-on-year changes.)

Operating profit

Profit attributable toowners of parent

Ordinary profit

Three months ended

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

February 29, 2024

39,720

2.5

1,251

23.5

1,116

50.1

819

61.1

February 28, 2023

38,745

22.0

1,013

36.9

743

3.5

509

(2.8)

Note: Comprehensive income For the three months ended February 29, 2024: ¥ 1,316 million [105.0%]
For the three months ended February 28, 2023: ¥ 642 million[(4.6)%]
Earnings
per share

Diluted earnings
per share

Three months ended

Yen

Yen

February 29, 2024

82.20

81.61

February 28, 2023

51.45

50.88

(2) Consolidated financial position
Total assets
As of

Net assets

Equity-to-asset ratio

Millions of yen

Millions of yen

February 29, 2024

78,93725,826

32.7

November 30, 2023

72,03824,724

34.2

Reference: Equity
As of February 29, 2024:
As of November 30, 2023:¥ 25,793 million¥ 24,655 million

1%2. Cash dividends
Annual dividends per share

Fiscal year ended
November 30, 2023
Fiscal year ending
November 30, 2024

First quarter-end

Second quarterend

Third quarter-end

Fiscal year-end

Yen

Yen

Yen

Yen

Yen

－

Total

24.00

－

24.00

48.00

31.00

－

31.00

62.00

－

Fiscal year ending
November 30, 2024
(Forecast)

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Forecast of Financial Results for Fiscal Year Ending November 30, 2024
(December 1, 2023 through November 30, 2024)
Net sales
Million yen

Net income attributable toowners of parent

Ordinary income％

Million yen％

Fiscal year ended
80,000
(0.6)
1,800
33.8
May 31, 2024
Fiscal year ended
160,000
1.1
3,400
19.4
November 30, 2024
Note: Revisions to the forecast of financial results most recently announced: Yes

2

Earnings per share

Million yen

％

Yen

1,300

40.9

130.44

2,400

17.2

240.90* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in
the change in scope of consolidation): None
(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial
statements: Yes(3) Changes in accounting policies, changes in accounting estimates, and restatement:(i) Changes in accounting policies due to revisions to accounting standards and other regulations:None(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: None(iv) Restatement: None
(4) Number of issued shares (common shares)
(i)

(ii)

Total number of issued shares at the end of the period (including treasury shares)
As of February 29, 2024

10,021,600 shares

As of November 30, 2023

9,961,200 shares

Number of treasury shares at the end of the period
As of February 29, 2024

5,052 shares

As of November 30, 2023

5,052 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the
fiscal year)
Three months ended February 29, 2024

9,974,748 shares

Three months ended February 28, 2023

9,894,422 shares* Quarterly financial results reports are exempt from quarterly review conducted by certified public
accountants or an audit corporation.
* Proper use of earnings forecasts, and other special matters(Cautionary Statement)
The consolidated business results forecasts contained in this report are based on information available
at the present time and certain premises thought to be reasonable. Accordingly, the final results maychange substantially due to various factors.
(How to obtain supplementary materials for financial results)
Supplementary materials for financial results will be posted on our website.
(https://www.lactojapan.com/en/ir)(Changes to monetary unit)
Previously, the monetary unit used for items and other matters contained in the Company's quarterly
consolidated financial statements were recorded in thousands of yen. However, the monetary unit has
been changed to be shown in millions of yen from the current first quarter consolidated accounting andcumulative period. For ease of comparison, figures for the previous consolidated fiscal year andcumulative first quarter have also been changed to units of millions of yen.

3

Table of Contents of Attachment
1. Qualitative Information on Quarterly Financial Results ........................................................................ 5(1) Operating Results ........................................................................................................................... 5(2) Financial Position ........................................................................................................................... 6(3) Consolidated Earnings and Other Forecasts .................................................................................. 7
2. Quarterly Consolidated Financial Statements and Significant Notes ................................................... 8(1) Quarterly Consolidated Balance Sheet........................................................................................... 8(2) Quarterly Consolidated Income Statements ................................................................................. 10
Consolidated Statement of Income ................................................................................................ 10First Quarter Consolidated Cumulative Period............................................................................ 10
Consolidated Statement of Comprehensive Income ....................................................................... 11First Quarter Consolidated Cumulative Period............................................................................. 11(3) Notes on Quarterly Consolidated Financial Statements ............................................................... 12(Going Concern Assumption) ......................................................................................................... 12(Significant Changes in Shareholder’s Equity) ............................................................................... 12(Adoption of Accounting Treatment Specific to Preparation of the Quarterly Consolidated Financial
Statements) .................................................................................................................................... 12(Significant Subsequent Events) .................................................................................................... 124

Qualitative Information on Quarterly Financial Results(1) Operating Results
During the current first quarter consolidated cumulative period (the “first quarter”), despite the continued rise in the cost ofliving, Japan's economy experienced a moderate recovery trend due to normalization of economic activity and an increase
in inbound tourism consumption. On the other hand, the outlook for the global economy remained uncertain due to theeconomic downturn in China and rising geopolitical risks among other factors.
In the domestic food industry, demand for various food products remained strong against the backdrop of economic
recovery. Among foods made from dairy products, while consumption of some products such as yogurt was sluggish due
to successive price increases, there were some products, such as ice cream, confectionery, and proteins, that saw strong
consumption, so overall demand for dairy ingredients was steady. Since the COVID-19 pandemic, excess inventory ofdomestically produced skim milk powder, which has been a problem in the dairy farming and dairy industries, has beenadjusted. Consequently, demand for imported dairy products is expected to recover relatively quickly.
Under these circumstances, the Lacto Japan Group continued to implement various measures with the aim of achieving
its Corporate Business Plan titled, NEXT-LJ 2025. In the Group’s domestic business during the first quarter, demand forfood products in a wide range of fields was on a recovery trend. As such, both sales volume and net sales in all divisions
were higher than the previous year’s first quarter. In our Asian business, despite a significant decline in business related
to the export of skim milk powder from Japan in the Dairy Ingredients Sales Division (trading company), the Cheese
Manufacturing & Sales Division (manufacturer) saw growth in terms of both sales volume and net sales as signs of recovery
began to appear in regional economies outside of China.
In sales of dairy ingredients in Japan, profits for the first quarter were better than expected. This is thanks to stronger than
expected sales at the beginning of the fiscal year of our mainstay powdered milk mixtures, and higher than expected profit
margins on sales of dairy ingredients in Asia. Furthermore, profit margins in cheese manufacturing & sales improved due
to lower cheese ingredient prices and the effect of revised selling prices.
As a result of the above, net sales for the first quarter were 39,720 million yen (up 2.5% year on year). Operating income
was 1,251 million yen (up 23.5% year on year), ordinary income was 1,116 million yen (up 50.1% year on year), and net
income attributable to owners of parent was 819 million yen (up 61.1% year on year).
Performance by division is as follows:(Dairy Ingredients and Cheese Business Division)
In dairy ingredients, sales of ingredients for ice cream and chocolate were strong. And while dairy manufacturers continued
to prioritize the use of domestic ingredients in an effort to control inventories of skim milk powder in Japan, sales of imported
powdered milk mixtures to non-dairy manufacturers showed a faster than expected recovery thanks to the decrease inskim milk stock.
In terms of cheese sales, demand for cheese ingredients has not yet fully recovered due to the impact of the previous
year's price increases on both commercial and household use. And although there were supply chain disruptions andsignificant changes in international market prices since the COVID-19 pandemic, we expanded business with multiple
major clients by leveraging our procurement capabilities to continue to supply ingredients in a timely manner, resulting in
steady sales.
As a result, first quarter sales volume for the Dairy Ingredients and Cheese Business Division was 45,583 tons (up 12.3%
year on year) with net sales of 28,124 million yen (up 1.9% year on year).
(Meat and Ingredients Division)
In the Meat and Ingredients Division, sales volumes of both meat and processed meat products increased compared tothe same quarter last year. In meat sales, pork sales grew thanks to increased demand for frozen pork from North America.
In addition, in sales of chicken and processed chicken products, which we have been working to expand since last year,
sales volume increased due to steady progress in existing business and developing new sales channels.
As a result, first quarter sales volume for the Meat and Ingredients Division was 7,766 tons (up 29.3% year on year) with5net sales of 5,111 million yen (up 25.8% year on year).
(Functional Food Ingredients Division)
In the Functional Food Ingredients Division, sales of milk proteins, which are ingredients for protein products, continued togrow, with increased sales volume compared to the same quarter last year. There is strong demand for protein products,
especially in the field of sports nutrition, helping to expand the market in Japan. As well as maintaining a stable supply of
dairy products by utilizing our procurement network cultivated through the import of dairy products, business is steadily
growing with more business partners thanks to recipe ideas that meet customer needs and additional proposals forfunctional ingredients.
As a result, first quarter sales volume for the Functional Food Ingredients Division was 584 tons (up 42.7% year on year)with net sales of 744 million yen (up 19.1% year on year).
Please note that sales volume and net sales for this division were included in the Asian Business, Others up until theprevious fiscal year. However, from the first quarter of this year, sales volume and net sales will be disclosed as a separate,
independent division.
(Asian Business, Others)
In the Asian Dairy Ingredients Sales Division (trading company), both net sales and sales volume decreased year on year
due to a significant drop in transactions for the export of skim milk powder from Japan and large one-off sales in theprevious fiscal year. However, owing to the Group's solid capability to procure ingredients and address needs locally, sales
in local markets have been steady with the acquisition of new business and the sale of competitive products to major
suppliers. Profit margins also increased due to improved product mix.
As a result, first quarter sales volume was 8,286 tons (down 20.1% year on year) with net sales of 4,207 million yen (down
19.8% year on year).
In the Asian Cheese Manufacturing & Sales Division (manufacturer), sales of processed cheese to China remainedsluggish due to the continued impact of the economic downturn. However, sales volume increased in the first quartercompared to the previous year due to a gradual recovery in demand for processed cheese in Thailand, where the economy
has seen an upturn, and increased demand for processed natural cheese products for pizza chains and Japaneserestaurants, in addition to steady sales to bakeries in Singapore and Malaysia. Moreover, in addition to an improved costof sales ratio due to a drop in raw material cheese prices, the division’s profit margin increased owing to the effects of pricerevisions implemented in the previous fiscal year.
As a result, first quarter sales volume was 1,228 tons (up 6.4% year on year) with net sales of 1,264 million yen (up 16.3%
year on year).
As a result, sales in the Asian Business, Others for the first quarter amounted to 5,739 million yen (down 11.2% year onyear).

(2) Financial Position
Total assets at the end of the first quarter increased by 6,898 million yen from the end of the previous consolidated fiscal
year to 78,937 million yen.
(Current assets)
The balance of current assets at the end of the first quarter was 73,753 million yen, an increase of 6,685 million yen
compared to the end of the previous consolidated fiscal year. This was mainly due to an increase of 3,092 million yen inmerchandise and finished goods.
(Non-current assets)
The balance of non-current assets at the end of the first quarter was 5,183 million yen, an increase of 213 million yen

6compared to the end of the previous consolidated fiscal year. This was mainly due to an increase of 236 million yen inproperty, plant and equipment.
(Current liabilities)
The balance of current liabilities at the end of the first quarter was 44,006 million yen, an increase of 6,973 million yen
compared to the end of the previous consolidated fiscal year. This was mainly due to an increase in short-term borrowingsof 6,005 million yen and accounts payable of 867 million yen due to an increase in merchandise and finished goods.
(Non-current liabilities)
The balance of non-current liabilities at the end of the first quarter was 9,103 million yen, a decrease of 1,177 million yen
compared to the end of the previous consolidated fiscal year. This was mainly due to a decrease in long-term borrowingsof 1,128 million yen.
(Net assets)
The balance of net assets at the end of the first quarter was 25,826 million yen, an increase of 1,102 million yen comparedto the end of the previous consolidated fiscal year. This was mainly due to increases of 580 million yen in retained earnings,
252 million yen in deferred gains or losses on hedges, and 183 million yen in foreign currency translation adjustments.

(3) Consolidated Earnings and Other Forecasts
In light of the recent business environment and performance trends, net sales, ordinary income, and net income attributableto owners of parent in the consolidated earnings forecast for the second quarter of the fiscal year ending November 30,
2024 have been revised from the figures previously announced on January 12, 2024. Please note that there will be norevisions to the dividend forecast in conjunction with this revision to the earnings forecast. Additionally, the forecast figures
for the full-year consolidated results remain unchanged.
For details, please see the “Notice Regarding Revisions to Consolidated Earnings Forecast for the First Half of the Fiscal
Year Ending November 2024” released on April 12, 2024.

7

Consolidated Financial Statements(1) Consolidated Balance Sheet(Millions of yen)
FY2023

1st Quarter of FY2024
As of February 29, 2024

As of November 30, 2023

AssetsCurrent assets
Cash and deposits

7,779

9,399

Notes and accounts receivable

18,70020,426Merchandise and finished goods

38,79841,890Raw materials and supplies

1,008

963

Other

783

1,074

Allowance for doubtful accounts

(1)

(1)

67,06873,753

2,185

2,421

73

132

2,731

2,650

Allowance for doubtful accounts

(21)

(21)

Total investments and other assets

2,710

2,629

4,969

5,183

72,03878,937

Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets
Other

Total non-current assets
Total assets

8Consolidated Balance Sheet(Millions of yen)
FY2023

1st Quarter of FY2024
As of February 29, 2024

As of November 30, 2023

Liabilities
Current liabilities
Accounts payable
Short-term borrowings

14,033
14,38014,901
20,386

Commercial papers
Current portion of long-term borrowings

3,000
4,402

3,000
4,402

Income taxes payable
Other

252
964

387
928

Total current liabilities

37,03344,006

Non-current liabilities
Long-term borrowings

9,125

7,997

Retirement benefit liability
Asset retirement obligations

432
55

445
59

Other

667

602

Total non-current liabilities

10,281

9,103

47,314

53,110Share capital
Capital surplus

1,178
1,179

1,209
1,210

Retained earnings
Treasury shares

20,066(14)

20,647(14)

Total shareholders' equity

22,40923,051

276

337

(56)
2,025

195
2,208

2,245

2,741

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total accumulated other comprehensive income
Share acquisition rights
Total net assets
Total liabilities and net assets

9

68

33

24,72425,82672,03878,937

(2) Quarterly Consolidated Income Statements
Consolidated Statement of Income
First Quarter Consolidated Cumulative Period(Millions of yen)Three months ended
February 28, 2023

Three months ended
February 29, 2024

Net sales
Cost of sales

38,74536,63839,72037,145Gross profit

2,106

2,575

Selling, general and administrative expenses

1,093

1,323

Operating income

1,013

1,251

Interest income
Dividend income

2
2

19
3

Share of profit of entities accounted for using equity method
Insurance return

5
0

4
5

Miscellaneous income

105Total non-operating income

22

37

42

63

3
242

9
88

Non-operating income

Non-operating expenses
Interest expenses
Commission expenses
Foreign exchange losses
Miscellaneous losses

3

11

291

172

Ordinary income

743

1,116

Income before income taxes

743

1,116

Income taxes

234

296

Net income

509

819

Net income attributable to owners of parent

509

819

Total non-operating expenses

10Consolidated Statement of Comprehensive Income
First Quarter Consolidated Cumulative Period(Millions of yen)Three months ended
February 28, 2023

Net income
Other comprehensive income

Three months ended
February 29, 2024

509

819

Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

(9)
232

60
252

Foreign currency translation adjustment
Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income

(91)

183

1

0

133

496

Comprehensive income

642

1,316

(Breakdown)Comprehensive income attributable to owners of parent

642

1,316

－

－

Comprehensive income attributable to non-controlling interests11(3) Notes on Quarterly Consolidated Financial Statements(Going Concern Assumption)
Not applicable(Significant Changes in Shareholder’s Equity)
Not applicable(Adoption of Accounting Treatment Specific to Preparation of the Quarterly Consolidated Financial Statements)
Tax expenses are calculated by reasonably estimating the effective tax rate after the application of tax effectaccounting on net income before taxes for the consolidated fiscal year (that includes the first quarter under review)and by multiplying quarterly net income before taxes by the estimated effective tax rate.
(Significant Subsequent Events)(Purchase of Treasury Shares)
At the Board of Directors meeting held on January 23, 2024, Lacto Japan resolved to acquire its own shares inaccordance with Article 156 of the Companies Act, which is applied by replacing terms pursuant to Article 165.3 of
the Companies Act.
1. Reasons for share repurchase
To enhance shareholder returns and improve capital efficiency, as well as implement a flexible capital policy.
2. Details of acquisition(1) Type of shares acquired:

Common stock(2) Total number of sharesacquired:

70,000(3) Total acquisition price:¥165,830,000(4) Acquisition date:

March 15, 2024

(5) Acquisition method:

Purchases through off-auction share(ToSTNeT-3) on the Tokyo Stock Exchange

repurchasetransactions(Disposal of Treasury Shares as Restricted Stock Compensation)
At the Board of Directors meeting held on March 14, 2024, Lacto Japan resolved to and disposed of treasury
stock as restricted stock compensation as follows.
Outline of disposal(1) Disposal date:

April 12, 2024

(2) Type and number of shares disposed:

11,861 shares of common stock(3) Disposal price:¥2,350 per share(4) Total value of share disposal¥27,873,350(5) Grantees of shares and number thereof;
number of shares to be allotted:

4 directors, 11,861 shares

12