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Earnings presentation4553TOWA PHARMACEUTICAL CO.,LTD.Pharmaceuticals

Supplementary Explanatory Materials for the Fiscal Year Ending March 2026 Results

For the fiscal year ended March 2026, revenue increased, while operating income and net income declined. The company also fell short of its plan for revenue, operating income and net income. It recorded an approximately ¥14.7 billion goodwill impairment loss related to 三生医薬, and plans higher revenue and higher profit for the fiscal year ending March 2027.

Worth reading
74In focus
0–100. This measures how worthwhile something is to read, not how good or bad the company is.
Direction
Mixed performance
Direction inferred from the company’s description.
Scale
147
¥100 million (goodwill impairment loss)
Wording
Conditional
How definitive the wording is.

Contents of this document

Earnings presentationFiscal year ending March 2026, full year10 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales273,710 million yen+5.4%
Operating profit23,102 million yen-0.6%
Ordinary income28,079 million yen+7.4%
Net income5,250 million yen-72.3%
Gross Profit Margin36.2 %
Operating profit margin8.4 %
Selling, general and administrative expenses76,001 million yen
Full-year earnings forecast
Fiscal year ending March 2027
Net Sales
304,000 million yen
Gross profit
114,000 million yen
Operating profit
32,000 million yen
Ordinary income
30,000 million yen
Profit attributable to owners of the parent
21,500 million yen
Progress against full-year forecast　通期の予想に対して、いまどこまで進んだかの割合です。
Revenue for the fiscal year ended March 202697.8 %
Gross profit for the fiscal year ended March 202695.3 %
Operating profit, fiscal year ended March 202685.6 %
Ordinary income for the fiscal year ended March 2026111 %
Net income attributable to owners of the parent for the fiscal year ended March 202629.7 %
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
Plan not achieved
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Increase in gross profit due to growth in sales volumes and unit prices¥37.7 100 million
  • Decrease in gross profit due to a higher cost of sales ratio¥-12.6 100 million
  • Increase in Research and Development Expenses¥-17.3 100 million
  • Increase in other SG&A expenses¥-9.6 100 million
  • Decrease in goodwill amortization expense for 三生医薬¥25.1 100 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
  • Assumed euro exchange rate for March 2027177 yen
  • Assumed dollar exchange rate for March 2027154 yen
New initiatives
  • 東和薬品 standalone plans to launch 16 products containing 8 active ingredients in March and June 2026
  • Establishment of a contract manufacturing and mutual backup system with Adragos Pharma Kawagoe
  • Establishment of a contract manufacturing and backup production system with 三和化学研究所
  • Launch of new products by Towa INT in European B2C markets and the United States
  • 三生医薬 and other businesses: develop new customers, strengthen sales, launch new products and improve pricing
Key KPIsA metric the company considers important as a management benchmark.
  • Sales volume (東和薬品 standalone, tablets and capsules)157.1 100 million tablets
    Year on year against the same period last year+2.8%
  • Production volume (東和薬品 standalone, tablets and capsules)164.3 100 million tablets
    Year on year against the same period last year+14.4%
  • Number of products under restricted shipment92 Instrument
    Year on year against the same period last yearDown 153 products from the end of March 2025
  • Number of individual IR meetings108 Engagements
  • ROIC5.3 %
  • PBR1.1 times
Unit price and quantity metricsThese figures show sales broken down by price and volume.
  • Sales volume157.1 100 million tablets
    Year on year against the same period last year+2.8%
  • Production volume164.3 100 million tablets
    Year on year against the same period last year+14.4%
Segment results
  • Domestic segment
    Net Sales216,976
    Revenue unitmillion yen
    Year-on-year change in revenue5.3
    Segment profit27,097
    Profit unitmillion yen
    Year-on-year change in profit-0.4
  • 東和薬品 and other businesses
    Net Sales188,102
    Revenue unitmillion yen
    Year-on-year change in revenue6
    Segment profit26,236
    Profit unitmillion yen
    Year-on-year change in profit4.2
  • 三生医薬 and other businesses
    Net Sales28,873
    Revenue unitmillion yen
    Year-on-year change in revenue0.9
    Segment profit861
    Profit unitmillion yen
    Year-on-year change in profit-57.9
  • Overseas segment
    Net Sales57,630
    Revenue unitmillion yen
    Year-on-year change in revenue7
    Segment profit458
    Profit unitmillion yen
    Year-on-year change in profit2
  • Europe
    Net Sales38,432
    Revenue unitmillion yen
    Year-on-year change in revenue15.4
    Segment loss-700
    Profit unitmillion yen
  • United States
    Net Sales19,197
    Revenue unitmillion yen
    Year-on-year change in revenue-6.7
    Segment profit1,159
    Profit unitmillion yen
    Year-on-year change in profit-27.2
Medium-term management plan targets
Plan nameSixth Medium-Term Management Plan 2024-2026 PROACTIVE Ⅲ
Target fiscal yearFiscal year ending March 2026
Targets and results
Net Sales
TargetConsolidated revenue of ¥300 billion
OutlookConsolidated revenue of ¥304 billion
Operating profit
TargetConsolidated operating income of at least ¥80 billion (cumulative)
OutlookConsolidated operating income of ¥78.3 billion
ROIC
TargetAt least 6% (including goodwill impact), at least 7% (excluding goodwill impact)
Outlook5.3% (including goodwill impact), 5.9% (excluding goodwill impact)
Research and development costs
TargetConsolidated R&D expenses of at least ¥55 billion (cumulative)
Outlook¥55.4 billion
Capital Expenditure
TargetConsolidated capital expenditures of at least ¥60 billion (cumulative)
Outlook¥79.3 billion
Financial targets
  • ROIC target (including goodwill impact)
    Target value6
    Actuals and outlook5.3
  • ROIC target (excluding goodwill impact)
    Target value7
    Actuals and outlook5.9
Capital expenditures
¥203 100 million actual for the fiscal year ended March 2026
Contents of this document
ItemDetails
Document typeEarnings presentation
Fiscal Period CoveredFiscal year ending March 2026, full year
Net Sales273,710 million yen (YoY +5.4%)
Operating profit23,102 million yen (YoY -0.6%)
Ordinary income28,079 million yen (YoY +7.4%)
Net income5,250 million yen (YoY -72.3%)
Gross Profit Margin36.2 %
Operating profit margin8.4 %
Selling, general and administrative expenses76,001 million yen
Full-year earnings forecastSubject Fiscal year ending March 2027 / Net Sales 304,000 million yen / Gross profit 114,000 million yen / Operating profit 32,000 million yen / Ordinary income 30,000 million yen / Profit attributable to owners of the parent 21,500 million yen
Progress against full-year forecastRevenue for the fiscal year ended March 2026 97.8 % / Gross profit for the fiscal year ended March 2026 95.3 % / Operating profit, fiscal year ended March 2026 85.6 % / Ordinary income for the fiscal year ended March 2026 111 % / Net income attributable to owners of the parent for the fiscal year ended March 2026 29.7 %
Self-assessment against the planPlan not achieved
Segment resultsSegment Domestic segment / Net Sales 216,976 / Revenue unit million yen / Year-on-year change in revenue 5.3 / Segment profit 27,097 / Profit unit million yen / Year-on-year change in profit -0.4, Segment 東和薬品 and other businesses / Net Sales 188,102 / Revenue unit million yen / Year-on-year change in revenue 6 / Segment profit 26,236 / Profit unit million yen / Year-on-year change in profit 4.2, Segment 三生医薬 and other businesses / Net Sales 28,873 / Revenue unit million yen / Year-on-year change in revenue 0.9 / Segment profit 861 / Profit unit million yen / Year-on-year change in profit -57.9, Segment Overseas segment / Net Sales 57,630 / Revenue unit million yen / Year-on-year change in revenue 7 / Segment profit 458 / Profit unit million yen / Year-on-year change in profit 2, Segment Europe / Net Sales 38,432 / Revenue unit million yen / Year-on-year change in revenue 15.4 / Segment loss -700 / Profit unit million yen, Segment United States / Net Sales 19,197 / Revenue unit million yen / Year-on-year change in revenue -6.7 / Segment profit 1,159 / Profit unit million yen / Year-on-year change in profit -27.2
Breakdown of Factors Affecting the ChangeFactors Increase in gross profit due to growth in sales volumes and unit prices / Amount ¥37.7 100 million, Factors Decrease in gross profit due to a higher cost of sales ratio / Amount ¥-12.6 100 million, Factors Increase in Research and Development Expenses / Amount ¥-17.3 100 million, Factors Increase in other SG&A expenses / Amount ¥-9.6 100 million, Factors Decrease in goodwill amortization expense for 三生医薬 / Amount ¥25.1 100 million
Key KPIsIndicator name Sales volume (東和薬品 standalone, tablets and capsules) / Value 157.1 100 million tablets / Year on year against the same period last year 2.8 100 million tablets, Indicator name Production volume (東和薬品 standalone, tablets and capsules) / Value 164.3 100 million tablets / Year on year against the same period last year 14.4 100 million tablets, Indicator name Number of products under restricted shipment / Value 92 Instrument / Year on year against the same period last year Down 153 products from the end of March 2025, Indicator name Number of individual IR meetings / Value 108 Engagements / Year on year against the same period last year Not disclosed, Indicator name ROIC / Value 5.3 % / Year on year against the same period last year Not disclosed, Indicator name PBR / Value 1.1 times / Year on year against the same period last year Not disclosed
Unit price and quantity metricsIndicator name Sales volume / Value 157.1 100 million tablets / Year on year against the same period last year 2.8 100 million tablets, Indicator name Production volume / Value 164.3 100 million tablets / Year on year against the same period last year 14.4 100 million tablets
Assumptions Underlying the Business OutlookIndicator name Assumed euro exchange rate for March 2027 / Value 177 yen, Indicator name Assumed dollar exchange rate for March 2027 / Value 154 yen
Medium-term management plan targetsPlan name Sixth Medium-Term Management Plan 2024-2026 PROACTIVE Ⅲ / Target fiscal year Fiscal year ending March 2026 / Targets and results Net Sales Target Consolidated revenue of ¥300 billion / Outlook Consolidated revenue of ¥304 billion / Operating profit Target Consolidated operating income of at least ¥80 billion (cumulative) / Outlook Consolidated operating income of ¥78.3 billion / ROIC Target At least 6% (including goodwill impact), at least 7% (excluding goodwill impact) / Outlook 5.3% (including goodwill impact), 5.9% (excluding goodwill impact) / Research and development costs Target Consolidated R&D expenses of at least ¥55 billion (cumulative) / Outlook ¥55.4 billion / Capital Expenditure Target Consolidated capital expenditures of at least ¥60 billion (cumulative) / Outlook ¥79.3 billion
Financial targetsIndicator name ROIC target (including goodwill impact) / Target value 6 % / Actuals and outlook 5.3 %, Indicator name ROIC target (excluding goodwill impact) / Target value 7 % / Actuals and outlook 5.9 %
Capital expenditures¥203 100 million (actual for the fiscal year ended March 2026)
New initiatives東和薬品 standalone plans to launch 16 products containing 8 active ingredients in March and June 2026, Establishment of a contract manufacturing and mutual backup system with Adragos Pharma Kawagoe, Establishment of a contract manufacturing and backup production system with 三和化学研究所, Launch of new products by Towa INT in European B2C markets and the United States, 三生医薬 and other businesses: develop new customers, strengthen sales, launch new products and improve pricing
Items this document does not state (10)
Results for the three months of the current quarterNumber of stores and locationsNumber of employeesRisk amount incorporated into the outlookAnnual DividendPayout ratioAcquisition of treasury sharesOrders received and order backlogMarket Size / ShareKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

Revenue increased on growth in sales volumes and unit prices at 東和薬品 and other businesses, as well as expansion of Towa INT's European business. Operating income declined because the increase in the cost of sales ratio caused by a deterioration in the business mix at 三生医薬 and other businesses could not be fully offset. Net income decreased due to the recognition of an approximately ¥14.7 billion goodwill impairment loss related to 三生医薬. The shortfall against the plan was due to sales after the lifting of restricted shipments at 東和薬品 and other businesses not increasing as much as expected, and a decline in the new application business at 三生医薬 and other businesses.

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Supplementary Explanatory Materials for the Fiscal Year Ending March 2026 Results | TOWA PHARMACEUTICAL CO.,LTD. (4553) timely disclosure | Komori