Business Report
Consolidated Financial Statements
for the First Quarter of FY2024(Ending March 31, 2025)

GUNZE LIMITEDTSE Prime (Code:3002)
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Contents
Ⅰ. Financial Statements for the First
Quarter of FY2024
Ⅱ. Business Summary for the First Quarter

Ⅲ. Forecast for FY2024

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Ⅰ. Financial Statements for
the First Quarter of FY2024(Ending March 31, 2025)3

I-1. Consolidated Financial Statements for FY2024 1Q
Consolidated operating results
FY2024 1Q

FY2023 1Q

Bottomprofit margin

Bottomprofit margin(Millions of yen)
Y over Y
Increase(Decrease)

Change(%)

Net sales

33,382

31,706

1,676

5.3

Operating profit

2,083

1,515

568

37.5

6.2%

4.8%

Ordinary profit

2,272

1,640631

38.5

6.8%

5.2%

1,600

1,586

14

0.9

4.8%

5.0%

Profit attributable toowners of parent

Consolidated financial position
FY2024 1Q

End of FY2023

FY2023 1Q
Extraordinary income:Gain on sales of securities

657

FY2024 1Q
Extraordinary income:Gain on sales of securities

144

Increase(Decrease)

Total assets

165,028

161,971

3,057

Net assets

118,665

118,64223

Equity ratio

71.9%

73.2%

(1.3%)

Interest-bearing debt

12,998

9,004

3,994

BPS (JPY)

7,114.32

7,112.73

1.594

I-2. FY2024 1Q Segment Summary
In addition to the favorable performance of the Functional Solutions business, where the materials-related
business is on the road to recovery, and the Medical business, where new products and sales to China areexpanding, sales and profit increased due to structural reforms in the Apparel business and Sports club business.

Highlights of segment performance
Increase sales and profit
FunctionalSolutions

Plastic films were affected by sluggish demand in the U.S., but domestic sales remained strong.
In addition to a recovery in the market for Engineering plastics for office automation equipment,
demand for semiconductor-related products remained strong.

Increase sales and profit
MedicalIn Japan, market penetration of new products such as absorbable adhesion barrier sheets
increased.
Overseas, sales to China increased, particularly for bioabsorbable reinforcement felt.

Slight increase in sales and profit
ApparelDespite the impact of foreign exchange, profit increased due to the effects of business restructuring
and other factors.
Annual products were sluggish, but seasonal products performed well.
D-to-C sales such as EC and direct managed store continued to perform strongly.

Lower sales and profit
LifestyleCreations

The Real Estate business, sales decreased due to the impact of sales from the underutilized land
redevelopment project in the previous period and the impact of depreciation on shopping malls.
The Sports Club business, sales declined due to the closure of underperforming stores, butprofitability improved.

5I-3. FY2024 1Q Performance by Segment
Consolidated Results(Millions of yen)
Operating profit

Net salesFY2024
1Q

FY2023
1Q

Bottom: profit margin

YoY

FY20241Q

FY2023
1Q

YoY

FunctionalSolutions

12,65011,326

11.7%
1,323

1,665
13.2%

1,423
12.6%

17.0%
242

Medical

3,109

2,420

28.5%
689

594
19.1%

463
19.1%

28.2%
130

Apparel

14,795

14,583

1.5%
211

563
3.8%

343
2.4%

64.0%
219

LifestyleCreations

3,024

3,557

(15.0%)
(532)

150
5.0%

172
4.8%

(13.0%)
(22)

Total

33,382

31,706

5.3%
1,676

2,083
6.2%

1,515
4.8%

37.5%
568
6I-4. Consolidated Financial Statements for FY2024 1Q by Segment(Millions of yen)Lifestyle Creations
9%
3,024

38%

Functional Solutions

5% Operating

Net sales

150

19%
563

profit12,650Net sales¥33.3billion

56%

Operating profit

Apparel

20%

1,665

¥2.0billion

44%
594

44%
14,795

9%
3,109

MedicalTotal includes corporate expenses not included in segment profit7I-5. Net Sales & Operating Profit for FY2024 1Q(Millions of yen)

Net sales 33,382 YOY +5.3%
Operating profit 2,083 YOY +37.5%＜Sales by Business Segment >31,868＜Operating profit by Business Segment>
2,083

33,38231,706

6.2

Profit Margin:%

28,191
11,424

11,326

12,650Functional
Solutions

1,515
1,555

5.5

38%

3.9

10,371
2,775

2,420

3,109

Medical9%

4.8

1,252594

Medical20%

563

Apparel
19%

1,423

1,351

2,384

1,665

FunctionalSolutions
56%

1,391

14,062

14,583

12,87914,795

Apparel
44%

463

396

2,793

3,755

3,557

3,024

FY2021

FY2022

FY2023

FY2024

LifestyleCreations
9%

604

343

407
102

126

FY2021

FY2022-26172150

FY2023

FY2024

LifestyleCreations5%

Total includes corporate expenses not included in segment profit.

Continued growth in Functional Solutions and Medical

Growth in Functional Solutions and Medical, as well as the impact ofstructural reforms in Apparel, profits are on track to increase.

8I-6. Details of Changes in Assets(Unit: Billions of yen)

*Difference from the endof the previous period

Investments in securities

1.6

(0.3)

Increase of 3

0.2
OthersOthers(0.1)
Accounts receivable

0.5

1.3

Property, plant and equipment(0.2)

Cash and deposits

165

Inventories

162

End of FY2023
Total assets<Current assets 1.5>

<Fixed assets 1.5>

End of June,2024
Total assets

9Ⅱ. Business Summary for the First Quarter10Ⅱ-1. Business Review for the First Quarter◆ Functional Solutions 1

Plastic films
Category

Market inventories have been exhausted and demand is recovering.
The resource recycling factory is in full operation and recycling centers are being
established.
Main Products

Beverage sales were strong, supported by good weather andinbound demand but product price increases tend to
discourage purchases.
“GEOPLAS® “ the most lightweight shrink film
adopted for beverage shrink labels.

Flexiblepackaging

The products have excellent gas barrier
and pinhole resistance for food industry.

In Japan, sales of seasonal products were strong due to theprolonged hot weather.
Exports saw a recovery in orders for balloons and otherproducts as inventory adjustments continued.

Industrial
Packaging

For semiconductor manufacturing , EVbatteries, and wallpaper industry etc.

Semiconductor sales are strong as the PC and smartphonemarkets recover.

OPP films

Shrinkfilm
overseas

Profitincreased

TopicsHybrid styrene shrink film is made bycoextrusion of PET and PS.
It has both well shrinkage andshrink characteristics.
Olefin shrink film has a low specificgravity and easy to recycle.

Shrinkfilm
domestic

Position

Shrink film domestic

Excellent anti-fog characteristic for foodpackage.

Strong sales of bagged vegetables like bean sprouts and cut
vegetables.

Shrink films can be supplied world wide. The
company has three production site in USA, China,and Vietnam.

USA: Inflation affected purchases of big ticket items.
Vietnam: Amid sluggish consumption, competing local
manufacturers attacked prices.
China: Sluggish demand for household goods was offset bydemand for beverages.

Flexible packaging
Industrial Packaging
OPP Films

Shrink film Overseas

11Ⅱ-2. Business Review for the First Quarter◆ Functional Solutions(2)While building on the foundation of products for the OA market, strive tostrengthen non-OA categories such as semiconductors and medical
markets to achieve business growth.

Engineering plastics◆ Category

Main Products

OA Functionalproducts

Fluorine thin film tubes for fusing belts/rolls.
The intermediate transfer belt has the top share inthe global market.

Sales of office MFPs were stable as economic activities
normalized, reflecting the recovery
trend in the printer market.

Non-OAproducts

Functional parts used in manufacturing processes
in the industrial market.

Semiconductor products were covered even in a stagnant
market through new sales channels such as China.

Position
Profitincreased

TopicsOA Functional
products
Non-OA products■Seamless belt

■Fluorine thin-walled tubing

Electronic components◆ Category

Touch screens■Filter support materials■Tear-resistant fluoropolymer tubing

Shares in a Chinese subsidiary and the commercial rights to the touch
panel in Japan and the U.S. are expected to be transferred in October 2024.
Main Products

Assembly and sales of capacitive touch panels.

Position
Profitimprovement

TopicsAffected by the slowdown of the Chinese economy
in the industrial equipment market.

12Ⅱ-3. Business Review for the First Quarter◆ MedicalPosition

Medical◆ category

Aim to provide innovative "biomaterials × devices".
Expand the ratio of overseas sales of in-house products, the ratio of domestic inhouse products, and the ratio of domestic sales of new products.
Main products

TopicsBioabsorbablereinforcement
felt

Suitable for reinforcing sutures andpreventing air leakage during surgery.
Effective as a scaffold material
for tissue regeneration.

China: Sales are progressing well, with increased
cooperation with distributors and increased use in hospitals.

Bone fixation
devices

Bioabsorbable bone grafting
Material with special processing.

Japan: Market share increased due to new product launches.
China: Affected by the impact of people's reluctance tospend due to high medical costs.

Absorbable artificial skin using
collagen.

Japan & USA: New business development is progressing
and sales are increasing.

Artificial
dermisGrowth&expansionDomesticOverseas

Absorbableadhesionbarrier sheet
Purchased
products like
medical laserand so on

Absorbable anti-adhesion material
consisting of gelatin in film form
with an uneven surface.

Increased local sales in Japan.
Respond to increased competition from our competitorsand strengthen sales in the Tokyo metropolitan area.

Medical devices for cosmetics, plastic
surgery, wound care and so on.

Human amniotic membrane skin prosthesis: Expanding into
the treatment of recalcitrant ulcers.
Medical Lasers: Recovery driven by replacement demand.

13Ⅱ-4. Business Review for the First Quarter◆Apparel 1
Promote a comprehensive brand strategy through a cross-industry organizational restructuring aimed at improving
competitiveness and attracting new customers with products that meet customer needs in addition to the shift toDtoC business. Strengthen the production system to support the growth of differentiated technologies and expand
automation efforts.

Position
Profitincreased

Innerwear⚫ EC and directly managed stores continue to perform well.

Men'sASEDORON: Strong sales as a brand to meet summer demand by strengthening sales promotion.
YG: "in/T", innerwear for T-shirts, remained strong mainly throughEC channels.
BODY WILD: SPA sales steady, but mass retailers struggle.

Women's

KIREILABO: Sales of "Fitte" and "Yutarila," differentiated seasonal
innerwear with cups, grew.
Tuché: Sales of bras and panties were steady, but innerwear struggled, especially in mass retailers.
Sales trend in 1Qs

Men's
Women's

ASEDORONYG

KIREILABO

14

Tuché

FY2021

FY2022

FY2023

FY202414Ⅱ-5. Business Review for the First Quarter◆Apparel 2Legwear⚫ Continue structural reforms to improve profitability.

The main product "SABRINA" is promoted as a total brand by strengthening the range of socks available.
Pantyhose: Affected by the response to the renewal of new products for 23SS.
Stylish bottoms and leggings: Struggling due to changing trends and lower demand for indoor wear.

Sales trend in 1Qs

FY2021

FY2022

FY2023

FY2024SABRINA
foot-cover

Collaboration Leggings(Ballelite)15Ⅱ-6. Business Review for the First Quarter

Position
Profitimprovement◆ Lifestyle Creations
Real estate business

Promote improved profitability of commercial facilities andstrengthen property-specific management with a focus on
investment efficiency.

⚫ Shopping center businessTsukashin (Amagasaki, Hyogo): The number of visitors is coming due to the recovering flow of people
and the effects of the Renewal.

⚫ Real estate leasing business
Decrease due to sales of the Nagai City Station Development Project (Yamagata) recordedin the previous fiscal year.

Sports club businessTsukashin shopping center

Turn around underperforming stores and restore profitability bygrowing the school business and differentiating the fitness business.

Close 5 underperforming stores (Feb-Jun) to improve profitability.
The school business will work to increase membership, and the fitness business will focus on
differentiating itself from 24-hour fitness clubs.
Work on school swimming and health promotion projects for local governments on a contract basis.
School businessGreen business

Aggressive efforts to increase fixed volume to meet greening demand for
Osaka Expo and other events and reduce CO2 emissions.

Tree sales have been stable due to the delivery of large projects such as the Osaka Expo.

Soil from underwear manufacturing waste material

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Ⅲ. Outlook for FY202417

Ⅲ-1. FY2024 ForecastNo revision of forecast

Item

FY2024
Forecast

FY2023
Profit ratio

Results

Net sales

140,000

Operatingprofit

9,000

6.4%

6,777

Ordinary
profit

9,000

6.4%

Profitattributable toowners of parent

7,500

5.4%

(Millions of yen)

ChangeProfit ratio

132,885

Amount%

7,115

5.4%

5.1%

2,223

32.8%

6,774

5.1%

2,226

32.9%

5,109

3.8%

2,391

46.8%

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Ⅲ-2. FY2024 Forecast by Segment(Millions of yen)No revision of forecast

Operating Profit
Bottom: Profit margin

Net sales
FY2024FY2023

ChangeFY2024FY2023

ChangeFunctionalSolutions

49,70048,975

725

7,200

6,028

1,172

1.5%

14.5%

12.3%

19.4%

Medical13,00011,697

1,303
11.1%

2,500

1,991

509

19.2%

17.0%

25.6%

Apparel

65,20060,114

5,086
8.5%

1,900

1,465

2.9%

2.4%

435
29.7%

LifestyleCreations

12,90012,826

74
0.6%

1,100

833

267

8.5%

6.5%

32.1%

Total

140,000

132,885

7,115
5.4%

9,000

6,777

2,223

6.4%

5.1%

32.8%

19Ⅲ-3. Distribution of Earnings to Shareholders
Dividend per share and dividend payout ratio
ordinary dividend

160.0

100.0

95.1%

commemorative dividend

140.0
120.0

0.0%
44.7%

10.0

60.0

75.0

75.0

75.0

2014/3

2015/3

2016/32017/3

50.8%

34.9%

147.0

153.0

157.0

2023/32024/32025/3

82.9%

56.2%

140.0

2022/3

47.5%

45.2%

75.0

Forecast

46.9%

48.8%

Dividend payout ratio

57.3%

80.0
40.0

(Unit: JPY)

90.0

110.0

115.0

115.0

2019/32020/32021/320.0
0.0

Treasury Stockacquisition
3,000※Gunze carried out consolidation of its shares in which every ten shares of the Company’s common stock would be consolidated into
one share effective October 1, 2017. Accordingly, dividends before the end of March 2017 are converted by reflecting this share consolidation.

cancellation

Treasury stock ratio

Number of treasury stock at end of period

2,297

2,500

2,000

2018/3

1,825

1,831

2,727

(Unit: thousands of shares)

260 ▼1,700

1,843

1,605

20.0%

1,546

1,500

247 ▼1,000

100

1,000
8.7%

8.7%

8.8%

10.9%

13.0%

1,220

421
8.0%

1,018

2015/3

2016/32017/3

2018/3

2019/3

5.6%
2020/3

15.0%
10.0%

386
613
3.6%

0
2014/3

613

8.3%

6.3%
2013/325.0%

535 ▼1,000

340

10.9%

30.0%

2,297

500

500

100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%

2021/32022/3244
2023/31.4%

3.6%2024/35.0%
0.0%

2024/6

Under the new medium-term management plan “VISION 2030 Stage 1”, the company will 100% total return ratio (until ROE exceeds cost of shareholders' equity).
Dividend on Equity Ratio (DOE): Policy of returning profits to shareholders with a target of 2.2% or higher.

20The information contained in this document, including profit forecasts, is based on
judgments made in accordance with information currently available, and does notguarantee any future planned figures or measures.

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