プレミアアンチエイジング（4934） – Summary of Financial Results for the third quarter 2022

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 Nine Months Ended April 30, 2022 (Under Japanese GAAP) June 13, 2022 Premier Anti-Aging Co., Ltd. Tokyo Stock Exchange 4934 https://www.p-antiaging.co.jp/ Kiyoshi Matsuura, President and Representative Director Takahiro Toya, Managing Executive Officer and Director +81-3-3502-2020 Company name: Listing: Securities code: URL: Representative: Inquiries: Telephone: Scheduled date to file quarterly securities report: Scheduled date to commence dividend payments: Preparation of supplementary material on quarterly financial results: Yes Holding of quarterly financial results briefing: June 13, 2022 – Yes (for institutional investors and analysts) (Yen amounts are rounded down to millions, unless otherwise noted.) 1. Consolidated financial results for the nine months ended April 30, 2022 (from August 1, 2021 to April 30, 2022) (1) Consolidated operating results (cumulative) (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of the parent Nine months ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % April 30, 2022 April 30, 2021 25,896 23,766 9.0 – 1,957 (55.8) 2,141 (51.5) 1,222 (56.8) 4,428 – 4,416 – 2,827 – Note: Comprehensive income For the nine months ended April 30, 2022: For the nine months ended April 30, 2021: 1,248 million yen [(55.9)%] 2,827 million yen [ – ] Earnings per share Diluted earnings per share Nine months ended April 30, 2022 April 30, 2021 Yen 140.18 333.15 Yen 139.97 332.65 Note: 1. Since the consolidated financial statements are prepared from the second quarter of the fiscal year ended July 31, 2021, the percentage change from the same period of the previous year for the third quarter of the fiscal year ended July 31, 2021 is not shown. 2. Diluted earnings per share for the third quarter of the fiscal year ended July 31, 2021 is calculated based on the average share price from the initial listing date to the end of the third quarter of the fiscal year ended July 31, 2021, since the Company was listed on the Tokyo Stock Exchange Mothers section on October 28, 2020. 3. On August 29, 2020, a 20-for-1 stock split of shares of common stock was conducted. Therefore, earnings per share and diluted earnings per share are calculated on the assumption that the stock split was conducted at the beginning of the fiscal year ended July 31, 2021. 4. The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and others were applied from the beginning of the first quarter of the current fiscal year. The figures for the third quarter of the fiscal year ending July 31, 2022 have been retroactively adopted to the above accounting standards. (2) Consolidated financial position Total assets Net assets Equity-to-asset ratio As of April 30, 2022 July 31, 2021 Millions of yen Millions of yen 12,755 13,071 8,142 6,903 % 63.8 52.8 2. Cash dividends Fiscal year ended July 31, 2021 Fiscal year ending July 31, 2022 Fiscal year ending July 31, 2022 (Forecast) 2022) Reference: Total shareholders’ equity As of April 30, 2022: As of July 31, 2021: 8,142 million yen 6,903 million yen Note: The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and others were applied from the beginning of the first quarter of the current fiscal year. The figures for the third quarter of the fiscal year ending July 31, 2022 have been retroactively adopted to the above accounting standards. First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Annual dividends per share Yen – – Yen 0.00 0.00 Yen – – Yen 0.00 0.00 Yen 0.00 0.00 Note: Revisions to the forecast of cash dividends most recently announced: None 3. Consolidated earnings forecasts for the fiscal year ending July 31, 2022 (from August 1, 2021 to July 31, (Percentages indicate year-on-year changes.) Profit attributable to owners of the parent Earnings per share Net sales Operating profit Ordinary profit Fiscal year ending Millions of yen % Millions of yen % Millions of yen % Millions of yen % July 31, 2022 34,000 – 2,300 – 2,500 – 1,380 – Yen 158.25 Note: 1. Revisions to the earnings forecasts most recently announced: Yes 2. The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and others were applied from the beginning of the first quarter of the current fiscal year. The figures for the above consolidated earnings forecasts are after the application of the aforementioned accounting standards. As a result, the percentage change from the actual results before the application of these standards, etc., is not shown. * Notes (1) Changes in significant subsidiaries during the current period (changes in specified subsidiaries resulting in change in scope of consolidation): None (2) Adoption of accounting treatment unique to the preparation of quarterly consolidated financial statements: Yes (3) Changes in accounting policies, changes in accounting estimates, and restatements i. ii. iii. iv. Changes in accounting policies associated with the revision of the accounting standard: Yes Changes in accounting policies other than those stated above: Yes Changes in accounting estimates: None Restatements: None (Note) For details, please refer to “2. Consolidated financial statements and major notes (3) Notes to consolidated financial statements (Changes in accounting policies)” on page 7 of the attached document. (4) Number of shares outstanding (common shares) i. Total number of shares outstanding at the end of the period (including treasury shares) ii. Number of treasury shares at the end of the period 3Q of FY2022 FY2021 3Q of FY2022 FY2021 3Q of FY2022 3Q of FY2021 8,720,543 shares 8,720,000 shares 89 shares 89 shares 8,720,216 shares 8,488,045 shares iii. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year) (Note) On August 29, 2020, a 20-for-1 stock split of shares of common stock was conducted. Therefore, the number of shares outstanding at the end of the period and the average number of shares during the period were calculated assuming that the stock split was conducted at the beginning of the fiscal year ended July 31, 2021. * The quarterly financial results are not subject to quarterly review by a certified public accountant or an auditing firm. * Explanation on the proper use of earnings forecasts and other special matters The forward-looking statements in this document are based on information currently available to the Company and certain assumptions that the Company deems reasonable and are not intended as a promise by the Company that they will be achieved. Actual results may differ from these forecasts due to a variety of factors. For assumptions used in forecasting earnings and precautions regarding the use of earnings forecasts, please refer to “1. Qualitative information for the third quarter of the fiscal year ending July 31, 2022 (3) Explanation of consolidated earnings forecasts and other forward-looking information” on page 3 of the attached document. Attached Materials Contents Consolidated statement of income Nine months ended April 30, 2022 …………………………………………………………………. 5 1． Qualitative information for the third quarter of the fiscal year ending July 31, 2022 …………………….. 2 (1) Explanation on the consolidated financial results …………………………………………………… 2 (2) Explanation on the consolidated financial position ………………………………………………….. 2 (3) Explanation on consolidated earnings forecasts and other forward-looking information …………….. 3 Consolidated financial statements and major notes ……………………………………………………….. 4 2. (1) Consolidated balance sheet …………………………………………………………………………… 4 (2) Consolidated statement of income and consolidated statement of comprehensive income …………. 5 Consolidated statement of comprehensive income Nine months ended April 30, 2022 …………………………………………………………………. 6 (3) Notes to the consolidated financial statements ………………………………………………………. 7 (Notes on going concern assumption) ……………………………………………………………….. 7 (Notes in the event of significant changes in the amount of shareholders’ equity) ………………….. 7 (Application of accounting treatment unique to the preparation of quarterly consolidated financial statements) …………………………………………………………. 7 (Changes in accounting policies) …………………………………………………………………….. 7 8 (Additional information) …………………………………………………………………………….. (Segment information and others) …………………………………………………………………… 8 1 1. Qualitative information for the third quarter of the fiscal year ending July 31, 2022 (1) Explanation on the consolidated financial results During the first nine months of the current fiscal year, the Japanese economy continued to face a highly uncertain environment due to soaring global raw material prices, escalating tensions in Ukraine, and sharp exchange rate fluctuations, although the long-implemented action restrictions to prevent the spread of COVID-19 were finally eased in late March and there were signs of normalization in economic activities. Under these circumstances, Premier Anti-Aging Co., Ltd. (hereinafter called the “Company”) and its consolidated subsidiaries (hereinafter called the “Group”) have been committed to “being unique” since its establishment and have promoted the expansion of anti-aging related business by launching multiple brands in new categories by combining our strengths in “product planning capability” and “marketing capability” with our ” subscription sales model”. In the “DUO” brand, the competitive environment intensified due to the introduction of a series of inexpensive balm products by competitors, in addition to the slowdown of the record-setting “DUO The Cleansing Balm Black Repair.” Meanwhile, the “CANADEL” brand, which is being nurtured as the second earnings pillar following the “DUO” brand, achieved a record high single-month sales in April, surpassing 700 million yen, thanks to increased sales mainly of the high-priced “CANADEL Premier Zero” and “CANADEL Barrier Fix”, a quasi-drug containing niacinamide, which is effective against skin spots and wrinkles, launched in April, under the strategy of “offering all-in-one cosmetics for younger customers.” In late March, the Company horizontally deployed the brand nurturing know-how gained from “DUO” and “CANADEL” to launch a new brand, “clayence,” targeting gray hair in the younger generation. The “clayence” brand has surpassed 10,000 new weekly acquisitions in the first week since its launch, and we have high expectations of this brand to grow as a new revenue pillar. The number of new subscription sales customers acquired in mail-order sales remained at a high level, with a total of approximately 120,000 new acquisitions for all brands. What is distinctive compared to the past is the progress in diversification from “DUO” centered acquisitions to acquisitions of multiple brands, and the stabilization of business is steadily advancing. As a result of the above activities, net sales for the period amounted to 25,896,891 thousand yen (up 9.0% year-on-year), operating profit was 1,957,490 thousand yen (down 55.8% year-on-year), ordinary profit was 2,141,632 thousand yen (down 51.5% year-on-year), and profit attributable to owners of the parent was 1,222,406 thousand yen (down 56.8% year-on-year).of the above activities, net sales, operating profit, ordinary profit, and profit attributable to owners of the parent for the third quarter of the current fiscal year totaled 25,896,891 thousand yen, 1,957.490 thousand yen, 2,141,632 thousand yen, and 1,222,406 thousand yen, respectively. As the Group consists of a single business segment of manufacturing and sales of cosmetics, the description by segment is omitted. (2) Explanation on the consolidated financial position Assets, liabilities and net assets at the end of the third quarter of the current fiscal year were as follows. (Assets) Total assets at the end of the third quarter of the current consolidated fiscal year decreased 316,265 thousand yen from the end of the previous consolidated fiscal year to 12,755,067 thousand yen. Current assets decreased 551,289 thousand yen from the end of the previous fiscal year to 11,928,590 thousand yen. This was mainly due to a decrease of 2,507,477 thousand yen in cash and cash equivalents, a decrease of 656,493 thousand yen in accounts receivable, an increase of 1,729,665 thousand yen in products, an increase of 429,090 thousand yen in raw materials and supplies, and an increase of 295,222 thousand yen in prepaid expenses included in “Others” under current assets. Non-current assets increased 235,023 thousand yen from the end of the previous fiscal year to 826,476 thousand yen. This was mainly due to a 124,952 thousand yen increase in software included in intangible assets and an increase of 160,514 thousand yen in lease deposits included in investments and other assets. (Liabilities) Total liabilities at the end of the third quarter decreased by 1,555,395 thousand yen from the end of the previous fiscal year to 4,612,819 thousand yen. 2 Current liabilities decreased 1,349,641 thousand yen to 4,242,189 thousand yen. This was mainly due to a decrease of 463,363 thousand yen in accounts payable, an increase of 900,000 thousand yen in short-term borrowings, a decrease of 1,721,202 thousand yen in accrued income taxes, and a decrease of 521,607 thousand yen in accrued consumption tax included in “Others” under current liabilities. Non-current liabilities decreased 205,754 thousand yen to 370,630 thousand yen. This was mainly due to a decrease of 205,818 thousand yen in long-term borrowings. (Net Assets) Net assets at the end of the third quarter of the current consolidated fiscal year increased by 1,239,130 thousand yen from the end of the previous consolidated fiscal year to 8,142,247 thousand yen. This was mainly due to an increase in retained earnings of 1,206,701 thousand yen. As a result, the equity ratio was 63.8%. (3) Explanation of consolidated earnings forecasts and other forward-looking information We have revised our full-year earnings forecasts for the fiscal year ending July 31, 2022, based on currently available information and forecasts, taking into consideration market trends for cosmetics, the Group’s main sales products, and the progress of our business performance in the first three quarters of the current fiscal year. For details, please refer to the “Notice of Revision of Consolidated Earnings Forecasts for the Fiscal Year Ending July 31, 2022” separately released today (June 13, 2022). 3 2. Consolidated financial statements and major notes(1) Consolidated balance sheetAssetsCurrent assetsCash and cash equivalentsAccounts receivableProductsRaw materials and suppliesOthersTotal current assetsTangible assetsIntangible assetsInvestments and other assetsTotal non-current assetsNon-current assetsTotal assetsLiabilitiesCurrent liabilitiesAcconts payableShort-term borrowingsCurrent portion of long-term borrowingsAccrued paymentsAccrued income taxesProvision for bonusesProvision for pointsProvision for returned goodsOthersTotal current liabilitiesNon-current liabilitiesLong-term borrowingsAsset retirement obligationsTotal non-current liabilitiesTotal liabilitiesNet assetsShareholders’ equityShare capitalCapital surplusRetained earningsTreasury sharesTotal shareholders’ equityAccumulated other comprehensive incomeForeign currency translation adjustmentTotal accumulated other comprehensive incomeTotal net assetsTotal liabilities and net assetsAs of July 31, 2021As of April 30, 2022(Thousands of yen)6,061,0563,399,5642,391,946307,203320,10912,479,879120,503149,605321,343591,45313,071,332810,024-365,5621,968,5091,721,20253,92559,6428,491604,4715,591,830545,85030,535576,3856,168,2151,348,1301,348,1304,213,510(1,120)6,908,650(5,533)(5,533)6,903,11713,071,3323,553,5782,743,0714,121,612736,293774,03411,928,590127,592247,598451,285826,47612,755,067346,661900,000292,2402,364,960-26,735–311,5924,242,189340,03230,598370,6304,612,8191,351,5441,351,5445,420,212(1,120)8,122,18120,06520,0658,142,24712,755,0674(2) Consolidated statement of income and consolidated statement of comprehensive income(Consolidated statement of income)(Nine months ended April 30, 2022)3rd quarter of FY2021(From August 1, 2020to April 30, 2021)(Thousands of yen)3rd quarter of FY2022(From August 1, 2021to April 30, 2022)Net salesCost of salesGross profitReversal of provision for returned goodsTransfer amount from provision for returned goodsNet gross profitSelling, general and administrative expensesOperating profitNon-operating profitInterest incomeRefund from insurance cancellationForeign exchange gainsMiscellaneous incomeTotal non-operating profitNon-operating expensesInterest expensesListing related expensesMiscellaneous expensesTotal non-operating expensesOrdinary profitProfit before income taxesIncome and other taxesProfit for the periodProfit attributable to owners of the parent23,766,1044,527,03219,239,0715,9357,48519,237,52114,809,4524,428,0682920,045-5,20525,28011,59822,0513,31936,9694,416,3804,416,3801,588,6292,827,7512,827,75125,896,8915,235,02320,661,867–20,661,86718,704,3771,957,49096735,693134,17428,120198,95611,674-3,13814,8132,141,6322,141,632919,2251,222,4061,222,4065(Consolidated statement of comprehensive income)(Nine months ended April 30, 2022)Profit for the periodOther comprehensive incomeForeign currency translation adjustmentTotal other comprehensive incomeComprehensive income for the period(Breakdown)Comprehensive income attributable to owners of the parent3rd quarter of FY2021(From August 1, 2020to April 30, 2021)(Thousands of yen)3rd quarter of FY2022(From August 1, 2021to April 30, 2022)2,827,751(144)(144)2,827,6062,827,6061,222,40625,59925,5991,248,0051,248,0056 (3) Notes to the consolidated financial statements (Notes on going concern assumption) Not applicable. (Notes in the event of significant changes in the amount of shareholders’ equity) Not applicable. (Application of accounting treatment unique to the preparation of quarterly consolidated financial statements) (Calculation of tax expense) Tax expenses are calculated by reasonably estimating the effective tax rate after applying tax effect accounting to profit before income taxes for the consolidated fiscal year, including the third quarter under review, and multiplying profit before income taxes by the estimated effective tax rate. (Changes in accounting policies) (Change in inventory valuation method) The Group previously stated inventories at cost determined by the weighted average method. However, the cost method has been changed to the cost method based on the moving average method effective from the first quarter of the current fiscal year. The purpose of this change is to calculate periodic profit and loss more promptly and appropriately in conjunction with the introduction of the core system. Since the impact of this change is immaterial, the change has not been applied retroactively. The effect of this change on the consolidated financial statements for the third quarter of the current fiscal year is not material. (Application of accounting standard for revenue recognition and others) The Group adopted the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020. (hereinafter referred to as the “Accounting Standard for Revenue Recognition”) from the beginning of the first quarter of the current fiscal year, and recognized revenue at the amount expected to be received in exchange for the promised goods or services when control of the promised goods or services has been transferred to the customer. In accordance with the alternative treatment prescribed in Paragraph 98 of the “Guidance on Accounting Standard for Revenue Recognition,” revenue is recognized upon shipment if the period from the time of shipment to the time when control of the product is transferred to the customer is a normal period of time for the sale of the product. The main changes resulting from the application of the Accounting Standard for Revenue Recognition are as follows. (1) Revenue recognition on sales with right of return The “provision for returned goods,” which was previously recorded in current liabilities based on the gross profit equivalent of the portion of sales expected to be returned, has been changed to not recognize the sales and cost of sales equivalent of the products expected to be returned, and the refund liability is included in “Others” under current liabilities and the returned goods asset is included in “Others” under current assets. (2) Revenue recognition related to point system With respect to the point system, in which points are awarded to customers based on their purchases, the Group previously accounted for the amount expected to be used in the future as a “Provision for points” in order to prepare for future use of points. However, when such points provide customers with significant rights, the Company has changed its method of identifying them as performance obligations and deferring the recognition of revenue, and contract liabilities are now included in “Others” under current liabilities. In accordance with the transitional treatment prescribed in the proviso of Paragraph 84 of the Accounting Standard for Revenue Recognition, the cumulative effect of retrospective application of the new accounting policy prior to the beginning of the first quarter of the current fiscal year is added to or deducted from retained earnings at the beginning 7 of the first quarter of the current fiscal year, and the new accounting policy is applied from such beginning balance. As a result, net sales decreased 75,858 thousand yen, cost of sales increased 764 thousand yen, gross profit decreased 82,255 thousand yen, and operating profit, ordinary profit and profit before income taxes decreased 54,239 thousand yen, respectively. The balance of retained earnings at the beginning of the period decreased by 7,895 thousand yen. In accordance with the transitional treatment prescribed in Paragraph 89-2 of the Accounting Standard for Revenue Recognition, no reclassification has been made for the previous fiscal year using the new presentation. Furthermore, in accordance with the transitional treatment prescribed in Paragraph 28-15 of the “Accounting Standard for Quarterly Financial Statements” (ASBJ Statement No. 12, March 31, 2020), information disaggregating revenue from contracts with customers for the third quarter of the previous fiscal year is not presented. (Application of accounting standard for calculation of fair value and others) The “Accounting Standard for Calculation of Fair Value” (ASBJ Statement No. 30, July 4, 2019. (hereinafter referred to as the “Accounting Standard for Calculation of Fair Value”) and others are applied from the beginning of the first quarter of the current fiscal year, and in accordance with the transitional treatment set forth in Paragraph 19 of the Accounting Standard for Calculation of Fair Value and Paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019), the Group has decided to apply prospectively the new accounting policies established by the Accounting Standard for Calculation of Fair Value and others. This change has no impact on the quarterly consolidated financial statements. (Additional information) (Accounting estimates associated with the spread of COVID-19) There have been no significant changes in assumptions and accounting estimates regarding the impact of COVID-19, as described in (Critical accounting estimates) of the Annual Securities Report for the previous fiscal year. It is assumed that economic activity will resume and gradually recover to pre-corona levels as the number of infected patients declines and vaccination rates increase. The Group assumes a limited impact of COVID-19 on its accounting estimates, including the valuation of inventories, the calculation of refund liabilities and returned assets, and the determination of the recoverability of deferred tax assets. However, the timing of the end of COVID-19 and its future impact remains uncertain, and future results based on actual results may differ from these estimates and assumptions. (Segment information and others) (Segment information) This information is omitted because the Group has a single business segment, the manufacture and sale of cosmetics. 8