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.

August 5, 2021

Consolidated Financial Results
for the First Quarter of the Term Ending March 31, 2022
(Under Japanese GAAP)
Company name: TSUMURA & CO.
Listing:
Tokyo Stock Exchange
Securities code:
4540
URL:
https://www.tsumura.co.jp
Representative:
Terukazu Kato, President Representative Director and CEO
Inquiries:
Ritsuko Inukai, Head of Corporate Communications Dept.
Telephone:+81-3-6361-7100
Scheduled date to file quarterly securities report: August 6, 2021
Scheduled date to commence dividend payments: Preparation of supplementary material on quarterly financial results: Yes
Holding of financial results briefing: Yes (for institutional investors and securities analysts)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated business results for the first quarter of the term ending March 31, 2022 (from April 1, 2021
to June 30, 2021)(1) Consolidated operating results (cumulative)
Net sales
Three-month period
ended(Percentages indicate year-on-year changes.)

Operating profit

Millions of yen%

Millions of yen

Profit attributable toowners of parent

Ordinary profit%

Millions of yen%

Millions of yen%

June 30, 2021

31,771

11.9

6,152

8.7

7,247

27.7

5,389

34.2

June 30, 2020

28,396

－

5,657

－

5,674

－

4,016

－

Note: Comprehensive income

Three-month period ended June 30, 2021:
Three-month period ended June 30, 2020:

Basic earnings per share

Diluted earnings per share

Yen

Yen

Three-month period
endedJune 30, 2021

¥9,263 million¥2,529 million

70.44[266.2 %][ － %]－－
June 30, 2020
52.50
Note:
(ⅰ)The Company has determined the provisional accounting treatment for business combinations in the fiscal year ended March 31,
2021, and figures for the first quarter of the term ended March 31, 2021 reflect the contents of the determined provisional accounting
treatment.
(ⅱ) The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. has been applied from the
beginning of the first quarter under review, and figures for the first quarter of the fiscal year ended March 31, 2021 are those after
retroactively applying the Accounting Standard, etc. Therefore, the ratio of year-on-year change is not stated for the first quarter of the
fiscal year ended March 31, 2021.

(2) Consolidated financial position
Total assets
As of

Net assets

Equity-to-asset ratio

Millions of yen

Millions of yen%

June 30, 2021

326,956

239,938

68.4

March 31, 2021

319,063

233,169

68.3

Reference:

EquityAs of June 30, 2021:
As of March 31, 2021:¥223,621 million¥217,786 million

2. Dividends
Annual dividends per shareFirst quarter-end

Second quarter-end Third quarter-end

Yen
Fiscal year ended
March 31, 2021
Fiscal year ending
March 31, 2022－

Yen

Fiscal year-end

Yen

Total

Yen

Yen

32.00

－

32.00

64.00

32.00

－

32.00

64.00

－

Fiscal year ending
March 31, 2022 (Forecast)

Note: Revisions to dividends projection published most recently: No

3. Projections of consolidated business results for the term ending March 31, 2022
(From April 1, 2021 to March 31, 2022)(Figures in percentage show the rate of increase or decrease from the previous fiscal year for full-year
and from the second quarter of the previous fiscal year for second quarter (aggregate).)Profit attributable to
Net sales
Operating profit
Ordinary profit
Profit per shareowners of parent
Million yen% Million yen% Million yen% Million yen

First half
59,4004.3
8,700 (20.3)
9,000 (17.5)
Full-year
122,500
5.2
19,5000.6
20,000(4.2)
Note: Revisions to projections of consolidated business results published most recently: No

6,900
14,200%(13.8)
(7.4)

Yen

90.19
185.60* 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
Note: For details, see “2. Quarterly Consolidated Financial Statements and Key Notes (4) Notes to the
Quarterly Consolidated Financial Statements (application of specific accounting treatment to the preparation ofquarterly financial statements)” on page 10 of the material attached hereto.
(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: Yes(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: None(iv) Restatement: None
Note: For details, see “2. Quarterly Consolidated Financial Statements and Key Notes (4) Notes to the
Quarterly Consolidated Financial Statements (Changes in accounting policies)” on page 10 of the material attachedhereto.
(4) Number of issued shares (common shares)(i)

Total number of issued shares at the end of the period (including treasury shares)
As of June 30, 2021

76,758,362 shares

As of March 31, 2021

76,758,362 shares(ii) Number of treasury shares at the end of the period
As of June 31, 2021

250,502 shares

As of March 31, 2021

250,402 shares(iii) Average number of shares outstanding during the period
Fiscal year ended June 30, 2021

76,507,898 sharesFiscal year ended June 30, 2020

76,508,303 shares* This Consolidated Financial Results is not subject to audit procedures performed by a certified public
accountant or audit corporation.

*Explanation about the proper use of financial projections and other important notes(Note about forward-looking information)
Forward-looking statements such as financial projections, which are stated in this document, are based on
information currently available to the Company and certain assumptions deemed reasonable. There is apossibility that actual results, etc. will differ materially from forecasts due to various factors. Please see “1.
Qualitative information on quarterly results (3) Description of projections of consolidated business results” onpage 3 for information regarding the forecast of consolidated financial results.

○Contents of accompanying materials
1. Qualitative information on quarterly results ·····························································································

2(1) Description of operating results ········································································································

2(2) Description of financial position ······································································································

3(3) Description of projections of consolidated business results ········································································

3

2. Quarterly Consolidated Financial Statements and Key Notes ··········································································

4(1) Quarterly Consolidated Balance Sheets ······························································································

4(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ···················

6

Quarterly Consolidated Statements of Income
For the First Quarter Consolidated Accumulative Term···········································································

6

Quarterly Consolidated Statements of Comprehensive Income
For the First Quarter Consolidated Accumulative Term···········································································

7(3) Consolidated Statements of Cash Flows ·····························································································

8(4) Notes to the Consolidated Financial Statements ····················································································

10(Notes on premise of a going concern) ······························································································

10(Notes on case of extreme change in shareholder's equity amount) ····························································

10(Application of specific accounting treatment to the preparation of quarterly financial statements) ······················

10(Changes in accounting policies) ·····································································································

10(Business combinations) ·············································································································

10

- 1 -

1. Qualitative information on quarterly results
The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. from the
beginning of the first quarter under review and makes a comparative analysis with the first quarter of the previous fiscal year and theprevious fiscal year, using figures after retroactively applying the Accounting Standard, etc.
In addition, for business combination with Ping An Tsumura Pharmaceutical Co., Ltd. and its five subsidiaries conducted on March 30,
2020, the purchase price allocation (PPA) was not completed in the first quarter of the previous fiscal year but was completed at theend of the previous fiscal year. Therefore, amounts reflecting the PPA are used for the comparative analysis with the first quarter of theprevious fiscal year.
(1) Description of operating results
Consolidated business results for the first quarter under review were as follows:[Consolidated business results]
FY 3/2021 1Q(Million yen)
YoY Change
Percent Change

FY 3/2022 1Q

28,396

31,771

3,375
11.9％

Domestic sales

27,41329,513

2,100
7.7％

Overseas sales

982

2,257

1,274
129.7％

Cost of sales

13,457

15,298

1,840
13.7％

Selling, general and administrative expenses

9,281

10,321

1,039
11.2％

Operating profit

5,657

6,152

494
8.7％

Ordinary profit

5,674

7,247

1,572
27.7％

Profit attributable to owners of parent

4,016

5,389

1,372
34.2％

Net sales

Net sales increased 11.9% year on year, to 31,771 million yen.
Domestic net sales were 29,513 million yen. In sales of prescription Kampo products of the Group, prescriptions for products to treat
common cold symptoms dropped, reflecting a decline in upper respiratory inflammation and other infections, but prescriptions for
products to treat other conditions such as mental illness and skin conditions grew due to changing living environments. Among “Drugfostering”*1 program formulations, which are the Company's mainstay items, sales of Daikenchuto grew 1.9% year on year. The
Company is continuing activities to win new markets, focusing on a sense of abdominal flatulence, which is viewed to produce a low
level of satisfaction with treatment at general clinics among constipation symptoms. In Growing formulations*2, Hochuekkito, Goreisan,
Kamishoyosan and Shakuyakukanzoto performed strongly. As a result, sales for 129 prescription Kampo products increased 7.8%
year on year.
Overseas net sales were 2,257 million yen.

In the crude drug platforms provided by Ping An Tsumura Pharmaceutical Co., Ltd. and

SHENZHEN TSUMURA MEDICINE CO., LTD., sales of crude drugs and crude drug pieces for decoction grew.
Cost of sales increased 13.7% year on year, to 15,298 million yen, reflecting the growth in net sales. The cost-to-sales ratio rose 0.8
percentage points year on year, to 48.2%.
Selling, general and administrative expenses increased 11.2% year on year, to 10,321 million yen. This was mainly due to a rise in
expenses for activities associated with e-promotions. The SGA ratio fell 0.2 percentage points year on year, to 32.5%.
As a result, operating profit increased 8.7% year on year, to 6,152 million yen. The operating profit margin was 19.4%, falling 0.5
percentage points from a year ago. Ordinary profit rose 27.7% year on year, to 7,247 million yen, thanks to the impact of foreignexchange gains, and profit attributable to owners of parent increased 34.2% year on year, to 5,389 million yen.
*1 five “Drug fostering” program formulations:
Formulations the Company is addressing by looking hard at the structure of diseases in recent years, targeting diseases that are difficult
to treat with new drugs for which prescription Kampo preparations prove specifically effective in domains where demand for medical
treatment is high, and calling the establishment of evidence “drug fostering”- 2 -*2 five “Growing” formulations:
Growth drivers aimed at registration in clinical practice guidelines as strategic formulations after five drug fostering program
formulations by constructing evidence (such as data on safety and effectiveness) in domains where the degree of satisfaction with medical
treatment and the degree of drug contribution are low[Initiatives in response to COVID-19 pandemic]
In response to the COVID-19 pandemic, the Company ensured prevention of transmission to employees and business associates
throughout the year and focused on the stable supply of products to fulfil its responsibility as a pharmaceuticals company.
There was no impact on product supply either in Japan or overseas.
Whilst the business environment remains uncertain, the Company will continue to monitor the changing situation and focus on infection
control measures and the stable supply of products.
(2) Description of financial position
The financial position at the end of the first quarter under review was as follows:
Total assets at the end of the first quarter increased 7,892 million yen from the end of the previous fiscal year, to 326,956 million yen.
Current assets increased 6,764 million yen from the end of the previous fiscal year, mainly due to a rise in inventories. Non-current
assets increased 1,128 million yen from the end of the previous fiscal year, mainly due to an increase in buildings and structures,
offsetting a decrease in investment securities.
Total liabilities were 87,017 million yen, an increase of 1,123 million yen from the end of the previous fiscal year. Current liabilities
increased 1,653 million yen from the end of the previous fiscal year, mainly due to an increase in notes and accounts payable-trade,which offset a decrease in income taxes payable. Non-current liabilities decreased 530 million yen from the end of the previous fiscal
year.
Net assets totaled 239,938 million yen, an increase of 6,769 million yen from the end of the previous fiscal year. Shareholders’ equity
rose 2,940 million yen from the end of the previous fiscal year, mainly reflecting an increase in retained earnings. Accumulated othercomprehensive income climbed 2,894 million yen from the end of the previous fiscal year, chiefly due to an increase in foreign
currency translation adjustment. Non-controlling interests increased 933 million yen from the end of the previous fiscal year.
As a result, the equity ratio rose 0.1 percentage point, to 68.4%.
Cash flows in the first quarter under review were as follows:
At the end of the first quarter under review, cash provided by operating activities was 3,360 million yen, cash used in investing
activities was 3,101 million yen, and cash used in financing activities was 2,371 million yen.
Cash provided by operating activities was 3,360 million yen. Looking at its breakdown, a major cash inflow item was profit before
income taxes of 7,153 million yen, while a major cash outflow item was income taxes paid of 3,720 million yen. Compared to theprevious fiscal year, cash inflow decreased 2,142 million yen.
Cash used in investing activities was 3,101 million yen. Looking at its breakdown, a major cash outflow item was the purchase ofproperty, plant and equipment of 2,957 million yen. Compared to a year ago, cash outflow rose 4,316 million yen.
Cash used in financing activities was 2,371 million yen. Looking at its breakdown, a major cash outflow item was dividends paid of
2,354 million yen. Compared to a year ago, cash outflow rose 560 million yen.
As a result, cash and cash equivalents decreased 390 million yen from the end of the previous fiscal year, to 59,278 million yen.
(3) Description of projections of consolidated business results
The projections of consolidated business results for the fiscal year ending March 31, 2022, which were published on May 11, 2021,
remain unchanged.
.

- 3 -

3. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
As of March 31, 2021
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets

As of June 30, 2021

61,31048,623
13,93913,39653,41913,63760,99551,78010,194
14,33659,94013,869(53)(78)

204,273

211,038

Non-current assets
Property, plant and equipment
Buildings and structures
Other

74,533
97,252

Accumulated depreciation(87,609)76,28399,193(90,323)

84,17685,153

7,881
3,561

8,273
3,595

Total intangible assets

11,443

11,869Investment and other assets
Investment securities
Retirement benefit asset
Other

11,4452,252
5,472

10,127
2,361
6,406
(0)

Total property, plant and equipment
Intangible assets
Goodwill
Other

Allowance for doubtful accounts(0)

Total investment and other assets
Total non-current assets
Total assets- 4 -19,17018,895

114,789

115,918

319,063

326,956

(Million yen)
As of March 31, 2021
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Other

As of June 30, 2021

8,593
10,472
12,3804,057
12,876

10,12910,482
12,3862,543
14,492

Total current liabilities

48,38050,034Non-current liabilities
Bonds payable
Retirement benefit liability
Other

30,00061
7,452

30,00059
6,924

Total non-current liabilities

37,51336,983

Total liabilities

85,89487,017

Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings

30,142
13,789168,989

30,142
13,789171,930

(679)

(679)

212,241

215,182

3,180
1,233
2,673

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(1,130)

2,264
1,238
2,673
2,669

Remeasurements of defined benefit plans

(412)

(406)

5,544

8,439

Non-controlling interests

Total accumulated other comprehensive income

15,382

16,316

Total net assets

233,169

239,938

319,063

326,956

Total liabilities and net assets- 5 -(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income / For the First Quarter Consolidated Accumulative Term
(Million yen)Three-month period ended
June 30,2020(From April 1, 2020
to June 30, 2020)Three-month period ended
June 30,2021(From April 1, 2021
to June 30, 2021)

Net sales
Cost of sales

28,396
13,457

31,771
15,298Gross profit

14,93816,473

Selling, general and administrative expenses

9,281

10,321

Operating profit

5,657

6,152

153
132

85
126

107

－

Foreign exchange gains

－

836

Other

42

96

Total non-operating income

435

1,144

68
346

44

3

4

Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodNon-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses

－

418

49

5,674

7,247

0
0

13

Gain on sales of investment securities
Total extraordinary income

013

Ordinary profit
Extraordinary income
Gain on sales of non-current assets－

Extraordinary losses
Loss on sales of non-current assets

0－Loss on retirement of non-current assets

9

107

9

107

Profit before income taxes

Total extraordinary losses

5,665

7,153

Total income taxes

1,798

1,831

Profit

3,867

5,321

Loss attributable to non-controlling interests

(149)

(67)

Profit attributable to owners of parent

4,016

5,389

- 6 -

Quarterly Consolidated Statements of Comprehensive Income / For the First Quarter Consolidated Accumulative Term
(Million yen)Three-month period ended
June 30,2020(From April 1, 2020
to June 30, 2020)
ProfitOther comprehensive income

Three-month period ended
June 30,2021(From April 1, 2021
to June 30, 2021)

3,867

5,321

Valuation difference on available-for-sale securities

207

(915)

Deferred gains or losses on hedges

(76)

5

(1,478)

4,817

22

5

(12)

29

(1,338)

3,941

2,529

9,263

2,874

8,284
979

Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income (loss) of entities
accounted for using equity method
Total other comprehensive income (loss)
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests

(344)

- 7 -

(3) Quarterly Consolidated Statements of Cash Flows(Million yen)Three-month period ended
June 30,2020(From April 1, 2020
to June 30, 2020)
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts

Three-month period ended
June 30,2021(From April 1, 2021
to June 30, 2021)

5,665
1,826
102
0

7,153
2,155
107
21

(286)

(212)

68

44

(107)

－

9

93

440

(2,864)

Decrease (increase) in inventories(2,495)(923)

Increase (decrease) in trade payables(2,498)1,025

Loss (gain) on sales of short-term and long-term investment
securities(0)－

Decrease (increase) in retirement benefit asset

(72)

(104)

Increase (decrease) in retirement benefit liability
Other

3
5,844

0
441

Subtotal

8,501

6,940

Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using equity
methodLoss (gain) on sales and retirement of property, plant andequipment
Decrease (increase) in trade receivables

Interest and dividend income received

312

213

Interest paid

(77)

(72)

(3,233)(3,720)

5,503

3,360

2,336

26

(600)

(2,957)

4

13

Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets

(44)

(19)

Purchase of short-term and long-term investment securities(12,169)(3,275)

Proceeds from sales and redemption of short-term and longterm investment securities

12,1703,274

Purchase of investments in capital of subsidiaries

(451)

－

(1)

－

Loan advances
Collection of loans receivable

0

0

Other

(29)

(163)

Net cash provided by (used in) investing activities

1,214(3,101)- 8 -(Million yen)Three-month period ended
June 30,2020(From April 1, 2020
to June 30, 2020)Three-month period ended
June 30,2021(From April 1, 2021
to June 30, 2021)

Cash flows from financing activities
Proceeds from short-term borrowings
Dividends paid

1,249

－

(2,348)(2,354)Purchase of investments in capital of subsidiaries that do
not result in change in scope of consolidation

(699)

－

Other

(12)

(17)

Net cash provided by (used in) financing activities(1,810)(2,371)

Effect of exchange rate change on cash and cash equivalents

(744)

1,722

Net increase (decrease) in cash and cash equivalents

4,163

(390)

Cash and cash equivalents at beginning of period

57,69259,668

Increase in cash and cash equivalents resulting from inclusionof subsidiaries in consolidation

3,519

－

Cash and cash equivalents at end of period

65,37559,278- 9 -(4) Notes to the Consolidated Financial Statements(Notes on premise of a going concern)
There are no applicable matters.
(Notes on case of extreme change in shareholder's equity amount)
No relevant items.
(Application of specific accounting treatment to the preparation of quarterly financial statements)(Deferment of cost variance)
Cost variance caused by seasonal changes in operation rates, etc. is expected to be eliminated for the most part by the end of the costaccounting period, which is, therefore, deferred as “current assets (other) or current liabilities (other).”(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition, etc.)
The Company has decided to apply the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020;
hereinafter the "Revenue Recognition Accounting Standard"), etc. from the beginning of the first quarter under review and recognize
revenue from goods or services which the Group promised to provide at an amount expected to be received in exchange for the goods
or services at the time when control over the promised goods or services has been transferred to a customer.
As a result, some expenses which were recorded in cost of sales and selling, general and administrative expenses in the past are
deducted from net sales.
In addition, provision for sales returns, which was recorded in current liabilities in the past, is presented in "Other" under current
liabilities as refund liabilities.
This change in accounting policies is applied retroactively, in principle, and quarterly consolidated financial statements andconsolidated financial statements for the first quarter of the previous fiscal year and the previous fiscal year are those after
retroactively applying the change.
Accounting Standard is applied.

However, the following method stipulated in Paragraph 85 of the Revenue Recognition(1) For contracts in which the amounts of almost all revenues were recognized in accordance with the previous accounting treatment
prior to the beginning of the previous fiscal year, comparative information shall not be adjusted retroactively.
As a result, net sales for the first quarter of the previous fiscal year decreased 3,372 million yen, cost of sales increased 3 million yen,and selling, general and administrative expenses decreased 3,375 million yen, compared to before retroactive application. However,this does not have an impact on operating profit, ordinary profit and profit attributable to owners of parent.
on the balance of retained earnings at the beginning of the previous fiscal year.

There is also no impact(Application of Accounting Standard for Fair Value Measurement, etc.)
The Company has decided to apply the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019;
hereinafter the "Fair Value Measurement Accounting Standard"), etc. from the beginning of the first quarter under review and apply
the new accounting policy stipulated in the Fair Value Measurement Accounting Standard, etc. according to the provisional treatment
stipulated in Paragraph 19 of the Fair Value Measurement Accounting Standard and Paragraph 44-2 of the Accounting Standard for
Financial Instruments (ASBJ Statement No. 10, July 4, 2019) into the future. The application of the Fair Value Measurement
Accounting Standard and others mentioned above does not have no impact on quarterly consolidated financial statements.
(Business combinations)
Material review in the initially allocated amounts of acquisition costs in comparative information
With respect to the business combination with Ping An Tsumura Pharmaceutical Co., Ltd. and its five subsidiaries, which took placeon March 30, 2020, the Company applied provisional accounting treatment in the first quarter of the previous fiscal year, but it was
finalized at the end of the previous fiscal year.
Associated with the finalization of the provisional accounting treatment, a material review is reflected on the initially allocatedamounts of acquisition costs in comparative information that is included in quarterly consolidated financial statements for the firstquarter under review.
As a result, operating profit, ordinary profit, profit before income taxes and profit decreased 75 million yen, respectively, and profit
attributable to owner of parent declined 28 million yen in the quarterly consolidated statement of income for the first quarter of theprevious fiscal year.

- 10 -