Post-Merger Integration Following the Acquisition of LAA Co.

「Net income attributable to owners of the parent was ¥338 million, down 66.3% year on year, as the current period incurred ¥166 million in business structure improvement expenses related to the integration of the management systems of the European and U.S. subsidiaries, whereas the previous period included proceeds from insurance.」

「Net income attributable to owners of the parent was ¥253 million, down 56.1% year on year, as the current period incurred ¥148 million in business structure improvement expenses related to the integration of the management systems of the European and U.S. subsidiaries, whereas the previous period included proceeds from insurance.」

「The gain on liquidation of a subsidiary resulted from the completion of the liquidation of 立力科阿克賽諾(北京)医薬研発咨詢有限公司 (Linical Accelovance China Ltd.).」

「Quarterly net income attributable to owners of the parent was ¥3 million, down 95.4% year on year, as the current period incurred ¥104 million in business structure improvement expenses related to the integration of the management systems of the European and U.S. subsidiaries, whereas the previous period included proceeds from insurance.」

「The gain on liquidation of a subsidiary resulted from the completion of the liquidation of LINICAL ACCELOVANCE EUROPE HOLDING LTD.」

「In Europe, we carried out an intra-group reorganization integrating LAA's European subsidiary into LINICAL Europe Holding GmbH. Although reorganization costs were incurred, the effectiveness of group management and the speed of decision-making improved substantially.」

「Quarterly net income attributable to owners of the parent was ¥398 million, down 12.1% year on year, due to legal fees and other costs incurred in connection with arbitration in the United States, as previously announced in the 18 October 2019 “Notice Regarding the Filing of Arbitration against an Overseas Subsidiary of the Company,” as well as costs related to an intra-group reorganization integrating LAA’s European subsidiaries into LINICAL Europe Holding GmbH to strengthen the effectiveness of group management and accelerate decision-making.」

「In the United States, the effects of strengthening management, expanding sales capabilities and restructuring initiatives carried over from the previous fiscal year began to emerge, laying the groundwork for a V-shaped recovery from the second half onward.」

「Following the acquisition of LAA, we have worked to establish control over its management structure, including dispatching one of our directors to serve as the head of LAA. As part of establishing a management structure appropriate for a group company of a listed company, we are pursuing proactive post-merger integration focused on LAA's future business development, including streamlining and consolidating functions that overlap with our existing U.S. and European divisions, reorganizing sites in the United States, rationalizing surplus personnel, particularly at the manager level in administrative divisions, and integrating systems. This is an integration process intended to maximize the benefits planned at the time of the acquisition.」

「Following the acquisition of LAA, we are working to take control of its management structure, including by dispatching one of our directors to serve as the person responsible for LAA. We are also pursuing proactive post-merger integration, namely, an integration process intended to maximise the integration benefits initially planned for the acquisition, in anticipation of LAA's future business development. This includes reviewing the consolidation and integration of overlapping functions with our existing U.S. and European divisions, considering the consolidation and integration of locations in the United States, and streamlining surplus personnel, mainly at the manager level in administrative departments, as part of establishing an administrative structure appropriate for a group company of a listed company.」