August 4, 2023

Consolidated Financial Statements – Summary(Three months ended June 30, 2023)
This document is an English translation of the Japanese-language original. All financial information has been
prepared in accordance with accounting principles generally accepted in Japan.
Company Name:GUNZE LIMITED

Securities Code:3002

Stock Market Listings:

Tokyo

URL:

https://www.gunze.co.jp/

Representative:

Toshiyasu Saguchi, President and Representative Director

Contact:

Junko Nakashima, General Manager, Corporate Communications

Tel:+81 (6) 6348-1314

Filing of Quarterly Securities Report (Shihanki hokokusho) (Scheduled):

August 10, 2023

Start of Distribution of Dividend (Scheduled):–

Preparation of Supplementary Materials for Quarterly Financial Results:

No

Holding of Presentation of Quarterly Financial Results:

No

1. Consolidated Operating Results for the three months ended June 30, 2023 (April 1, 2023 to June 30,2023)(1) Consolidated operating results(Amounts less than one million yen are omitted)(Percentages represent year-over-year changes)

Net sales

Operating profit

Three months ended¥ millions%¥ millions%
June 30, 2023
31,706 (0.5)
1,515 21.0
June 30, 2022
31,868 12.6
1,252 (19.5)
Note: Comprehensive income
Three months ended June 30, 2023: ¥2,587 million [(2.1)%]
Three months ended June 30, 2022: ¥2,642 million [−%]EPS
Three months ended
June 30, 2023
June 30, 2022

¥

93.05
67.80

Ordinary profit

Profit attributable toowners of parent¥ millions¥ millions

%

1,640
1,570

%

4.5
(8.8)

1,586
35.4
1,171 4,991.3

Equity ratio

Net assets per share

Diluted EPS
¥
92.84
67.63

(2) Consolidated financial position
Total assets

Net assets¥ millions¥ millions%¥

As of June 30, 2023
163,255
As of March 31, 2023
165,927
Reference: Total equity
As of June 30, 2023: ¥115,788 million

117,767
117,691

70.9
69.8

6,791.69
6,789.78

As of March 31, 2023: ¥115,757 million

2. Dividends
Annual dividends per share (¥)
1st quarter-end

2nd quarter-end

3rd quarter-end

Year-end

Total

¥

¥

¥

¥

¥

FY2022−−−147.00
FY2023−
FY2023 (projected)−−
150.00(Note) Revision to the projected dividends announced most recently: None

147.00150.003. Projected results for FY2023 (April 1, 2023 to March 31, 2024)
Net sales
FY2023 full year

Operating profit%¥ millions%¥ millions%

140,000

2.9

7,500

29.0

7,500

24.6

Profit attributable toowners of parent
FY2023 full year

Ordinary profit¥ millions

EPS¥ millions

%

¥

4,800

6.6

281.55(Note) Revision to the projected results announced most recently: None

Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries during the period
accompanied by changes in the scope of consolidation): No(2) Application of an accounting method specific to the preparation of quarterly consolidated financial
statements: Yes(3) Changes in accounting policies, changes in accounting estimates, and restatement after error corrections(a) Changes in accounting policies due to revisions to accounting standards and other regulations: No(b) Changes in accounting policies other than (a) above: No(c) Changes in accounting estimates: No(d) Restatement after error corrections: No(4) Number of shares issued and outstanding (common stock)(a) Number of shares at the end of period (including treasury stock):
As of June 30, 2023: 17,293,516 shares
As of March 31, 2023: 17,293,516 shares(b) Treasury stock at the end of period:
As of June 30, 2023: 244,980 shares
As of March 31, 2023: 244,692 shares(c) Average number of shares during the period:
Three months ended June 30, 2023: 17,048,701 shares
Three months ended June 30, 2022: 17,275,560 shares* This summary of quarterly consolidated results is exempt from the quarterly review procedures by certified
public accountants or an audit corporation.
* Notes regarding the proper use of projections of the results and other matters
Projections of results and future developments are based on information available to the Company at the current
time, as well as certain assumptions judged by the Company to be reasonable. Various factors could cause
actual results to differ materially from these projections. For the assumptions that form the basis of the projected
results and notes regarding the use of projections, see “(3) Explanation of Consolidated Financial Results
Forecast and Other Forward-looking Information” of “1. Qualitative Information on Quarterly Financial
Results for the Period under Review” on page 3 of attached materials.

(Attachment)
Table of Contents
1. Qualitative Information on Quarterly Financial Results for the Period under Review ................................2(1) Explanation of Business Results ...........................................................................................................2(2) Explanation of Financial Position .........................................................................................................3(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information ......3
2. Quarterly Consolidated Financial Statements and Primary Notes ...............................................................4(1) Quarterly Consolidated Balance Sheets ................................................................................................4(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements ofComprehensive Income .........................................................................................................................6(3) Notes to Quarterly Consolidated Financial Statements .........................................................................8(Notes regarding assumptions of continuing operations) ...................................................................8(Notes in the case of significant changes in shareholders’ equity) .....................................................8(Application of an accounting method specific to the preparation of quarterly consolidated financial
statements) ..........................................................................................................................................8(Changes in accounting policies, changes or restatement of accounting estimates) ..........................8(Segment information, etc.) ................................................................................................................9(Significant subsequent events) ........................................................................................................10

1

1. Qualitative Information on Quarterly Financial Results for the Period under Review(1) Explanation of Business Results(Overview of Results for the Period under Review)
During the three months ended June 30, 2023 (April 1, 2023 - June 30, 2023), the Japanese economy showedsigns of moderate recovery, as social and economic activities progressed toward normal primarily owing to theeasing of restrictions on activities resulting from the downgrade of COVID-19 to the Category V. The economic
outlook, however, remains unclear, with the yen’s depreciation due to the differences in monetary policies in Japanand overseas and rising prices associated with soaring raw material and energy prices against a backdrop of the
prolonged situation in Ukraine.
Amid this operating environment, the GUNZE Group continued to pursue four basic strategies of “Creation of
new value,” “Capital cost-focused management,” “Evolution of corporate constitution,” and “Environmentally
responsible management” in the second year of its new medium-term management plan, “VISION 2030 stage 1.”
By segment, the functional solutions business performed strongly overall, although the stagnant demand infilms due to the rising prices and the soaring costs of utilities had an impact on the business. In the medical
business, while sales of new products of bioabsorbable medical materials were brisk, sales of medical lasers
struggled. In the apparel business, with the ongoing recovery trend in sales, profitability improved as the Company
proceeded with the price revision including adding value on its products. The lifestyle creations businessperformed strongly thanks to the lifting of restrictions on activities.
Consequently, for the period under review, net sales decreased by 0.5% year-on-year to ¥31,706 million,
operating profit increased by 21.0% year-on-year to ¥1,515 million, ordinary profit increased by 4.5% year-onyear to ¥1,640 million, and profit attributable to owners of parent increased by 35.4% year-on-year to ¥1,586
million on a consolidated basis.
(Results by Business Segment)
Categories of the reportable segments have been changed starting from the first quarter of the fiscal year ending
March 31, 2024. The following year-on-year comparison has been made using the figures for the corresponding
period of the previous fiscal year that were reclassified based on the revised reportable segments.
[Functional Solutions]
In plastic films, sales of packaging films in the US remained strong, although the stagnant demand due to therising prices had an impact on the business in Japan and Asia. In engineering plastics, products for thesemiconductor and the general industry performed strongly. Electronic components bore the brunt of stagnant
market conditions in its touch panel products for China.
As a result of the above, the functional solutions business recorded net sales of ¥11,326 million (down by 0.9%
year-on-year) and operating profit of ¥1,423 million (up by 2.4% year-on-year).
[Medical]In the medical business, although an adhesion prevention agent, a new product, and products for China
performed strongly, orders for medical lasers decreased primarily due to the decreased number of medical
institutions’ opening and their reduced capital investments after the COVID-19 pandemic.
As a result of the above, the medical business recorded net sales of ¥2,420 million (down by 12.8% year-onyear) and operating profit of ¥463 million (down by 23.3% year-on-year).
[Apparel]
The apparel business saw its sales grow overall as social and economic activities moved toward normal resulting
in the recovery of the market, as well as brisk sales in e-commerce and the SPA channel, and the Company has
2been continuing to work on the price revision to improve profitability. In innerwear, high value-added products
such as molded boxers and the innerwear with bra cups performed strongly. In legwear, while sales increased dueto the recovery of the market, the Company has been continuously advancing structural reforms in an effort toimprove profitability.
As a result of the above, the apparel business recorded net sales of ¥14,583 million (up by 3.7% year-on-year)
and operating profit of ¥343 million (compared to operating loss of ¥26 million for the corresponding period of
the previous fiscal year).
[Lifestyle Creations]
The real estate category recorded revenue decline due to the effect of the recording of sales of an idle land
redevelopment for the corresponding period in the previous fiscal year. However, both the shopping center andthe sports club businesses are back on the recovery track following the lifting of pandemic restrictions.
As a result of the above, the lifestyle creations business recorded net sales of ¥3,557 million (down by 5.3%
year-on-year) and operating profit of ¥172 million (up by 36.5% year-on-year).
(2) Explanation of Financial Position
As of June 30, 2023, total assets were ¥163,255 million, a decrease of ¥2,671 million compared to the end of
the previous fiscal year. The main components of the increase included a ¥981 million increase in work in process,while the main components of the decrease were a ¥2,891 million decrease in investment securities primarily due
to sale of cross-shareholdings and a ¥1,606 million decrease in notes and accounts receivable - trade, and contract
assets.
Total liabilities were ¥45,487 million, a decrease of ¥2,747 million compared to the end of the previous fiscal
year. The main components of the decrease included a ¥1,212 million decrease in notes and accounts payable trade and a ¥816 million decrease in provision for bonuses.
Net assets were ¥117,767 million, an increase of ¥75 million compared to the end of the previous fiscal year.
The main components of the increase included the recording of profit attributable to owners of parent amounting
to ¥1,586 million, while the main components of the decrease included dividends paid of ¥ 2,505 million.
(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information
Because the consolidated financial results for the period under review have been almost in line with expectations,the Company has decided not to change its earlier consolidated financial results forecast for the fiscal year ending
March 31, 2024, which was announced on May 12, 2023.

3

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
As of March 31, 2023
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, and contract
assetsMerchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

4

As of June 30, 2023

11,547

12,054

27,12925,52324,114
7,128
7,054
6,622
(16)
83,58024,911
8,109
6,578
7,095
(16)
84,25636,657
10,39810,446
5,614
63,117
1,446

36,285
10,16010,451
5,962
62,8591,410

11,6986,151(67)
17,782
82,346
165,927

8,806
5,989
(66)
14,72978,998163,255

(Million yen)
As of March 31, 2023
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Commercial papers
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Retirement benefit liability
Long-term leasehold and guarantee deposits received
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

5

As of June 30, 2023

10,010
6,077
−
438
263
1,353
11,90730,052

8,798
2,392
4,000
437
551
537
11,15827,875

8,638
4,494
4,220
830
18,183
48,235

8,242
4,487
4,093
788
17,61245,487

26,071
6,566
78,972(1,044)
110,566

26,071
6,566
78,053(1,045)
109,645

2,464
(144)
(13)
2,941
(56)
5,191
124
1,808
117,691
165,927

2,926
108
(13)
3,165
(45)
6,142
124
1,853
117,767
163,255

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements ofComprehensive Income
Quarterly Consolidated Statements of Income
For the three months ended June 30(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rental income from non-current assets
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Rental expenses on non-current assets
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Other
Total extraordinary income
Extraordinary losses
Loss on sale and retirement of non-current assets
Other
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

For the three months ended
June 30, 2022
31,86822,293
9,574
8,322
1,252

For the three months ended
June 30, 2023
31,706
21,708
9,997
8,482
1,515

11
237
139
134
88
611

18
218
146
35
36
456

33
134
125
293
1,570

94
140
95
330
1,640

0
0
7
8

3
657
−
661

26
40
66
1,512
312
1,200
28
1,171

49
−
49
2,252
646
1,606
20
1,586

6

Quarterly Consolidated Statements of Comprehensive Income
For the three months ended June 30(Million yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

For the three months ended
June 30, 2022
1,200

For the three months ended
June 30, 2023
1,606

405
48
985
2
1,442
2,642

462
253
254
11
981
2,587

2,528

2,537

114

49

7

(3) Notes to Quarterly Consolidated Financial Statements(Notes regarding assumptions of continuing operations)None applicable(Notes in the case of significant changes in shareholders’ equity)
None applicable(Application of an accounting method specific to the preparation of quarterly consolidated financial statements)(Calculation of income tax expenses)
The Company calculates income tax expenses by reasonably estimating the effective tax rate expected to be
imposed on profit before income taxes for the fiscal year ending March 31, 2024 and then multiplying profit before
income taxes for the three months ended June 30, 2023 by the effective tax rate thus estimated.
However, in cases where calculating tax expenses using the estimated effective tax rate yields a result that isnotably lacking rationality, tax expenses will be calculated using the statutory effective tax rate.
(Changes in accounting policies, changes or restatement of accounting estimates)
None applicable8

(Segment information, etc.)[Segment Information]
Three Months Ended June 30, 2022 (April 1, 2022 - June 30, 2022)
1. Information on Net Sales and Profit/Loss of Each Reportable Segment(Millions of yen)
Reportable segments
Functional
solutions

MedicalLifestylecreationsApparelTotal

Adjustment(Note 1)

Consolidated(Note 2)

Net sales
Sales to customers
Intersegment sales andtransfers
Total
Segment profit (loss)

11,3292,774

14,022

3,742

31,868−31,868

95

0

40

13

150

(150)

−

11,4252,775

14,062

3,755

32,019(150)

31,868

1,390

604

(26)

126

2,095

(842)

1,252

Notes:
1. The ¥(842) million segment profit (loss) adjustment consists of overall costs not allocated to reportable segments. Overall costs
refer to SG&A expenses not allocated to reportable segments.
2. Segment profit (loss) total was adjusted to be consistent with the operating profit recorded on the Quarterly Consolidated
Statements of Income.

Three Months Ended June 30, 2023 (April 1, 2023 - June 30, 2023)
1. Information on Net Sales and Profit/Loss of Each Reportable Segment(Millions of yen)
Reportable segments
Functional
solutions

MedicalApparelLifestylecreations

Total

Adjustment(Note 1)

Consolidated(Note 2)

Net sales
Sales to customers

11,1902,420

14,5503,545

31,706−31,706

Intersegment sales andtransfers

136

0

32

12

182

(182)

−

Total

11,3262,420

14,583

3,557

31,888(182)

31,706

Segment profit

1,423

463

343

172

2,403

(888)

1,515

Notes:
1. The ¥(888) million segment profit adjustment consists of overall costs not allocated to reportable segments. Overall costs refer to
SG&A expenses not allocated to reportable segments.
2. Segment profit total was adjusted to be consistent with the operating profit recorded on the Quarterly Consolidated Statements ofIncome.

2. Matters on Changes in Reportable Segments, etc.
To clarify its position as a growth driver in the ongoing medium-term management plan, “VISION 2030 stage
1,” the medical business, which was previously included in the “Functional solutions” segment, has become aseparate the “Medical” segment starting from the first quarter of the fiscal year ending March 31, 2024. As a result,
the reportable segments of the GUNZE Group comprise “Functional solutions,” “Medical,” “Apparel,” and“Lifestyle creations.”
Segment information for the three months ended June 30, 2022 has been prepared based on the revised
reportable segments.
9

(Significant subsequent events)
None applicable10