カンロ（2216） – [Delayed] Supplementary Materials: Financial Results for the Three Months Ended March 31, 2022

Supplementary Materials: Financial Results for the Three Months Ended March 31, 2022 April 28, 2022 (TSE: 2216) Index Review for FY2022 Q1 Page – 1-4 – 8 – 9 (Supplementary Materials 1) 【Summary of Financial Results】 – 5 (Supplementary Materials 2) 【Non-consolidated Statements of Income/Three Months Ended March 31】 – 6 (Supplementary Materials 3)【Financial Indicators FY2018－FY2022/Plan】 – 7 (Supplementary Materials 4)【Market Trends】 (Supplementary Materials 5) 【Hard Candy+ Gummy Markets Trends by Business Category】 (Supplementary Materials 6)【Reference Information】 – 10 Review for FY2022 Q1(Jan. to Mar. 2022)Copyright 2020 Kanro Inc.Copyright ©2022 Kanro Inc.Copyright ©2020 Kanro Inc. Summary of FY2022 Q1◆Market environment◆Status of company business◼◼◼◼◼◼◼The candy market in Q1 (Jan.–Mar.) showed a recovery trend year on year (hard candy was up 6.0%, gummies were up22.5%).*1Year-on-year increases in net sales and incomes (net sales were up 31.0%, operating income was up 609.7%, ordinary income was up 634.3%, and net income was up 338.6%).Candy category: Rebound from the decline in throat drops in the previous year. Year-on-year increase along with marketrecovery. Sales were up 14.3%.Gummy category (including Kanro’s marshmallow products):Strong performance of at-home consumption by households, with gummies fitting well with the enjoyment and offering ahealthy feeling. Sales were up 66.4% to exceed market growth.Market share (Jan.–Mar. [figures in parentheses indicate results in previous year]): Hard candy (21.0% [20.7%]), gummies(15.6% [16.1%]).*2Concluded “Commitment Line Syndicated Loan Agreement” based on “ESG/SDGs assessment” (Feb. 10)Certified as “Health and Productivity Management Outstanding Organization 2022”(Ministry of Economy, Trade and Industry): recognized for health management initiativesthat lead to maintenance and promotion of employees’ health*1 INTAGE Inc. SRI + Hard candy and gummies markets YoY change in sales amount by type from Jan. to Mar. 2022 total*2 INTAGE Inc. SRI + Hard candy and gummies markets Kanro’s share in sales amount by type from Jan. to Mar. 2022 totalCopyright ©2022 Kanro Inc.Copyright ©2020 Kanro Inc. Copyright ©2022 Kanro Inc.1Summary of FY2022 Q1 performanceUnit: million yen (New revenue recognition standard)FY2022 Q1FY2021 Q1Net salesOperating incomeOrdinary incomeNet incomeActualActualYoYYoY %5,9924,5761,41631.0%70073949998602609.7%100638634.3%113385338.6%Copyright ©2022 Kanro Inc.Copyright ©2020 Kanro Inc. * The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29) and related guidance is applied from the fiscal year ending Dec. 31, 2022. Accordingly, certain items that were recorded as selling expenses, including agent fees, are deducted from net sales. (The same applies to the subsequent slides.)Revision to forecast FY2022 1HFY2022 Full yearFY2021Initial forecastInitial forecast(Revised)YoY(Revised)YoY1HFull-yearUnit: million yenFull-year YoY2022 vs. 2021Net sales 10,600 11,90012.3% 22,600 24,2007.1%9,784 21,58912.1%OperatingincomeOrdinaryincomeNet income280290170900221.4%1,1401,53034.2%4401,25421.9%950227.6%1,1601,59037.1%4611,29123.1%650282.4%8201,08031.7%37087922.9%First half: Marginal profit to increase due to higher net sales.Full year: Despite decline in operating income margin in the second half due to rise in raw material costs and increase in factory overhead costs attributable to factors including the Ukraine situation, impact of income increases in the first half to be larger and lead to income increases for the full year.Copyright ©2022 Kanro Inc.Copyright ©2020 Kanro Inc. 2Overview of selling, general and administrative expensesin FY2022 Q1FY2022 Q1FY2021 Q1FY2022 (Revised)ActualYoYYoY%Actual1H forecastFull-year forecastUnit：million yenNet salesCost of salesFreight/warehousing costsAdvertising expensesOther selling expensesPersonnel expensesGeneral expensesOperating income5,992 1,4163,5266557315212919391875582840370031.0%22.8%23.0%21.4%63.6%3.6%5.2%602609.7%4,5762,87031871337993839811,900－－－－－－90024,20014,8671,5432495923,4681,7521,530Copyright ©2022 Kanro Inc.Copyright ©2020 Kanro Inc. Factors of changes in OP （ FY2021/Q1 Result Vs. FY2022/Q1 Result）Unit: million yenFY 2021 Q1 Result 98FY 2022 Q1 Result 700Copyright ©2022 Kanro Inc.Copyright ©2020 Kanro Inc. 3Increase factorsDecrease factors(V):Variable cost(F):Fixed costRevision to dividend forecastAnnual dividend2nd quarter-endYear-endTotal152025252025404050Unit: YenDividend payout ratio32.0%34.4%32.7%FY2021FY2022 (Initial forecast)FY2022(Revised forecast)〇 The return of profits to shareholders is an important policy; the Medium-term Corporate Strategy 2024 provides for enhancement of shareholder return, raising dividend payout ratio gradually to 40% by FY2024.〇 With respect to dividend forecast for the fiscal year under review, interim and year-end dividends will both be increased by ¥5 per share in line with upward revision of earnings forecast as described above, to bring interim dividend to ¥25, year-end dividend to ¥25, and annual dividend to ¥50.Copyright ©2022 Kanro Inc.Copyright ©2020 Kanro Inc. Topics of January-March (April)◼◼–––Puré Gummy: 20th anniversary celebration, including start of TVadvertising campaign in AprilSpecial website for Puré Gummy 20th anniversary:https://kanro.jp/blogs/campaign/20tokimeki/Kanro official YouTube channel：https://www.youtube.com/channel/UCAmDicnfH-LXIrNBTKokeyALaunch of three products against the backdrop of increasinghealth awareness (Mar. 7)“Supports maintenance of the immune system in healthy individuals”Product that is registered as food with functional claims for immunesystem, Kenko Nodoame iMUSE, Lactococcus Lactis Strain PlasmaThat Fights– A handy way to improve digestive health, anytime!• Oishii Oligotol Candy, product approved as food for specific health use– Developed jointly with medical university!• Kakishibu Care Candy containing high-purity persimmon tanninCopyright ©2022 Kanro Inc.Copyright ©2020 Kanro Inc. 4(Supplementary Materials 1) 【Summary of Financial Results】QuarterlyFY2021FY2022Q1Q2Q3Q4Full yearQ1Q2Q3Q4Full yearYoYYoY%Net sales4,5765,2075,0586,74621,5895,99224,2001,41631.0%Operating incomeOrdinary incomeNet income981001133413602567484677397454411,2541,291879700739499*Quarterly results are simple differences. The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and related guidance is applied from the fiscalyear ending Dec. 31, 2022. Accordingly, certain items that were recorded as selling expenses, including agent fees, are deducted from net sales. The figures from the fiscal year endingDecember 31, 2021 are after retroactive application of said accounting standard.Unit: Million yenFY2021 Q1 vs. FY2022 Q11,5301,5901,080602609.7%638634.3%385338.6%1H/2HNet salesOperating incomeOrdinary incomeNet incomeFY2021 FY2022（Plan）Unit: Million yenFY2021 vs. FY20221H2HFull year1H 2H Full year1H2H9,78411,80521,58911,90012,30024,20021.6%4.2%4404613708148305081,2541,2918799009506506306404301,5301,5901,080104.5% (22.7)%106.0% (22.9)%75.5% (15.5)%*Results and plan for 2nd half are simple differences. The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and related guidance is appliedfrom the fiscal year ending Dec. 31, 2022. Accordingly, certain items that were recorded as selling expenses, including agent fees, are deducted from net sales. The figures from thefiscal year ending December 31, 2021 are after retroactive application of said accounting standard.Composition of net salesFY2021 Q13.9%FY2022 Q12.6%34.0%Net sales4,576million yen62.1%Hard candyGummiesHealthy snacks43.2%Net sales5,992million yen54.3%Hard candyGummiesHealthy snacks[Net sales amount by type from Jan. to Mar. (YoY%)]Hard candy*GummiesHealthy snacksTotalFY2021 Q1FY2022 Q1YoY%Unit: Mil. yen2,8431,5551774,5763,2512,58714.3%66.4%153(13.3)%5,99231.0%* The data is included marshmallow products.*The values displayed in these materials are truncated at the million-yen level, so the totals and ratios may not always match completely. ５(Supplementary Materials 2) 【 Non-consolidated Statements of Income/Three Months Ended March 31】FY2021 Q1FY2022 Q1FY2021 Q1 vs. FY2022 Q1Amount%Amount%YoYYoY%【Unit: Million yen】Net salesCost of salesGross profitFreight/warehousing costsAdvertising expensesOther selling expensesSelling expensesPersonnel expensesGeneral expensesGeneral and administrative expensesSelling, general and administrative expensesOperating incomeNon-operating incomeNon-operating expensesNon-operating income and expensesGain on sales ofinvestment securitiesExtraordinary incomeLoss on retirement ofnon-current assetsImpairment lossExtraordinary lossesExtraordinary income and lossesIncome before income taxesTotal income taxesNet income4,5762,8701,70531871334237993831,1821,606984218383217196316450113100.0%62.7%37.3%7.0%1.6%0.7%9.3%17.5%8.4%25.8%35.1%2.2%0.1%0.1%0.0%2.2%1.8%1.8%0.1%0.4%0.4%1.4%3.6%1.1%2.5%5,9923,5262,46639187555348284031,2311,76570040138–01111(11)728228499100.0%58.8%41.2%6.5%1.5%0.9%8.9%13.8%6.7%20.6%29.5%11.7%0.7%0.0%0.6%—0.0%0.2%0.2%12.2%3.8%8.3%Ordinary income 10073912.3%1,41665576111073152129194815960235(0)36638(83)(83)(2)(5)(8)(74)56317838531.0%22.8%44.6%23.0%21.4%63.6%26.0%3.6%5.2%4.1%9.9%609.7%791.5%(32.3)%1880.1%634.3%—(95.1)%(33.5)%(42.2)%343.3%354.0%338.6%*The values displayed in these materials are truncated at the million-yen level, so the totals and ratios may not always matchcompletely. ６(Supplementary Materials 3) 【Financial Indicators FY2018－FY2022/Plan】(FY2022 figures planned; all others actual)Non-consolidatedPlanUnitFY2018FY2019FY2020FY2021FY2022*1◎ million yen19,29320,14619,64621,589Fiscal YearNet sales Net sales YoYGross profitGross profit to net salesOperating incomeOrdinary incomeOrdinary income YoYNet incomeNet income YoYNet assetsTotal assetsEquity ratioROEPER%%%%◎ million yen◎ million yen◎ million yen◎ million yen◎ million yen◎ million yenyenyen%%timesCash and cash equivalents at endof period◎ million yenNumber of employeesAverage numbers of temporaryemployees, excluded from thenumber of employeesCapital investmentDepreciationR&D expensespersonspersons◎ million yen◎ million yen◎ million yenTotal number of issued shares atthe end of the period(not including treasury shares)*2,3,5numberof sharesDividends per share*2,4yenPayout ratio%－7,27937.71,0011,0421,009－－10,63520,03353.19.812.29491,8005421182,850933603( 2.5)7,18936.6834858( 14.8)608( 6.6)11,15119,81856.35.517.4( 48)1,2536011322,0901,1826299.98,35338.71,2541,29150.487944.311,75021,20055.47.712.7( 770)2,0996081379141,11571024,20012.1－－1,5301,59023.11,08022.9－－－－－－－－－－－－－－－Net assets per shareBasic earnings per share*2,3*2,31,484.271,532.461,581.521,666.46140.9192.3486.36124.66152.98Cash flow from operating activities◎ million yen1,4422,620Cash flow from investing activities◎ million yen(1,743)(1,572)(1,002)Cash flow from financing activities◎ million yen271(1,411)7,165,2367,051,5527,051,4127,051,1687,051,16832.523.03032.53237.04032.05032.7◎： *The values displayed in these materials are truncated at the million-yen level.The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and related guidance is applied from the fisyear ending Dec. 31, 2022. Accordingly, certain items that were recorded as selling expenses, including agent fees, are deducted from netsales. The figures from the fiscal year ending December 31, 2018 are after retroactive application of said accounting standard.*1:Net sales do not include consumption taxes, etc.*2:Kanro conducted a share consolidation of common stock at a ratio of two share for one share effective as of July 1, 2019. Dividendsper share, net assets per share, basic earnings per share, and total number of issued shares at the end of the period (not includingtreasury shares) are calculated on the assumption that the share split was carroed out at the fiscal year ended December 31, 2018.*3:The Company’s own shares remaining in the trust that were recorded as treasury shares in shareholders’ equity onward are includedin treasury shares that are deducted from the total number of issued shares at the end of the period when calculating net assets pershare. In addition, these shares are included in treasury shares that are deducted when calculating the average number of sharesduring the period for the calculation of basic earnings per share.*4:Dividends per share of FY2018 includes a special dividend of 2.5 yen per share.*5: Total number of issued shares at the end of the period (not including treasury shares) is the number of shares at the end of the previofiscal year.4.47,46737.19231,007( 3.4)651( 35.4)10,80619,20756.36.117.42,013(971)1,4305781211,7211,102664 ７(Supplementary Materials 4) 【Market Trends】【Market trends】 Hard candy＋Gummy sales amount (Yearly)*GummiesHard candyUnit: Bln. yenINTAGE Inc. SRI+: hard candy and gummy 104.5106.998.691.460.6’1861.9’1956.9’2063.5’21101.655.5’17【Market trends】 Hard candy＋Gummy sales amount (Monthly)*GummiesHard candyUnit: Bln. yenINTAGE Inc. SRI+: hard candy and gummy 7.97.56.96.56.36.58.18.48.78.78.65.55.75.15.45.35.05.85.35.85.75.4’21/04’21/098.76.9’22/03【Sales amount from Jan. to March. (YoY%)】Unit: Bln. yen200.0180.0160.0140.0120.0100.080.060.040.020.00.018.016.014.012.010.08.06.04.02.00.0Sales amountJan. to Mar.2021Jan. to Mar.2022Hard candyGummiesTotal24.514.739.226.018.044.0YoY%6.0%22.5%12.2%* INTAGE Inc. SRI+: hard candy and gummy markets Sales amount by type ８%3020100(10)(20)(30)(Supplementary Materials 5)【Hard Candy+Gummy Markets Trends by Business Category】【Business category】 Hard candy+Gummy markets YoY% (Monthly)*Grocery storeConvenience storeDrug storeDIY storeINTAGE Inc. SRI+: hard candy and gummy markets ’21/4’21/5’21/6’21/7’21/8’21/9’21/10’21/11’21/12’22/1’22/2’22/3【Sales amount from Jan. to Mar. (YoY%)】Unit: Bln. yenSales amountJan. to Mar.2021Jan. to Mar.2022Grocery storeConvenience storeDrug storeDIY storeTotal17.313.57.60.839.218.915.48.71.044.0* INTAGE Inc. SRI+: hard candy and gummy marketsSales amount by business categoryYoY%9.2%14.3%14.5%18.4%12.2% ９(Supplementary Materials 6)　 【Reference Information】■　IR Informationhttps://www.kanro.co.jp/en/ir/■　IR Newshttps://www.kanro.co.jp/en/ir/news/■　Medium-term Corporate Strategy 2024https://ssl4.eir-parts.net/doc/2216/ir_material3/181759/00.pdf■　Annual Reporthttps://www.kanro.co.jp/en/ir/library/ir-ar/10MEMO Disclaimer Forward-looking statements related to Kanro’s current plans, outlook and strategy, etc. contained within these materials are based on judgments made by Kanro management using information available at hand at the time of writing. A variety of material factors that could result in actual performance differing significantly from earnings forecasts include, but are not limited to, economic conditions, particularly trends in personal consumption, as well as the industry environment in which the company conducts its business activities. The information contained within these materials is provided to facilitate understanding of Kanro, and does not necessarily constitute encouragement to invest. Moreover, information contained herein is not continuously updated, and the reader should be aware that the content may be revised or withdrawn without prior notice. Inquiries related to these materials should be directed to Kanro Inc. at tel. +81-3-3370-8811 ■ Company URL: https://www.kanro.co.jp/en/ ■ QR code for the above: