Interim report
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Summary of Consolidated Financial Statements for the First Half of the Fiscal Year Ending March 31, 2026 November 5, 2025 The financial statements herein have been prepared in accordance with accounting principles and practices widely accepted in Japan, and are for reference purposes only. MEDIPAL HOLDINGS CORPORATION Stock exchange listing: Tokyo Stock Exchange Stock exchange code: 7459 Website: https://www.medipal.co.jp/english/ Representative: Shuichi Watanabe, Representative Director, President and CEO Contact: Yuji Sakon, Managing Director, General Manager of the Administration Division Telephone: +81-3-3517-5171 Scheduled date of semi-annual securities report submission: November 13, 2025 Start of distribution of dividends (scheduled): December 2, 2025 Supplementary materials for the financial statements: Yes Presentation to explain the financial statements: Yes (For institutional investors, securities analysts and media) (All amounts are rounded down to the nearest million yen.) 1. Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2026 (April 1, 2025, to September 30, 2025) (1) Sales and Profits (The year-on-year change refers to the same period of the previous fiscal year.) Net sales (Millions of yen) Year-on-year change (%) Operating profit (Millions of yen) Year-on-year change (%) Ordinary profit (Millions of yen) Year-on-year change (%) Six months ended September 30, 2025 1,897,562 4.0 25,083 (7.7) 34,269 (2.3) Six months ended September 30, 2024 1,824,672 2.6 27,162 31.7 35,080 19.7 Note: Comprehensive income decreased by 29.0% year on year to ¥25,040 million in the six months ended September 30, 2025, and increased by 14.2% year on year to ¥35,271 million in the six months ended September 30, 2024. Profit attributable to owners of parent (Millions of yen) Year-on-year change (%) Earnings per share (Yen) Earnings per share (diluted) (Yen) Six months ended September 30, 2025 22,090 1.7 106.80 － Six months ended September 30, 2024 21,727 26.7 103.94 － (2) Financial Position Total assets (Millions of yen) Net assets (Millions of yen) Net worth ratio* (%) Net assets per share (Yen) As of September 30, 2025 1,907,622 766,138 32.7 3,037.32 As of March 31, 2025 1,824,984 757,947 33.9 2,979.39 * Calculated based on net worth of ¥623,679 million as of September 30, 2025, and ¥619,564 million as of March 31, 2025.￥
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(3) Consolidated Cash Flows Cash flows from operating activities (Millions of yen) Cash flows from investing activities (Millions of yen) Cash flows from financing activities (Millions of yen) Cash and cash equivalents at end of period (Millions of yen) Six months ended September 30, 2025 25,501 5,283 (15,962) 274,163 Six months ended September 30, 2024 41,832 (6,520) (14,376) 249,016 2. Dividend Payments Dividends per share (Yen) 1st quarter 2nd quarter 3rd quarter Year-end Full year Paid for the year ended March 31, 2025 － 30.00 － 32.00 62.00 Paid for the year ending March 31, 2026 － 32.00 Planned for the year ending March 31, 2026 － 32.00 64.00 Note: Revisions to planned dividend payments announced on May 13, 2025: None
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3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2026 (April 1, 2025 - March 31, 2026) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Earnings per share (Millions of yen) YoY change (Millions of yen) YoY change (Millions of yen) YoY change (Millions of yen) YoY change (Yen) Full fiscal year 3,785,000 3.1% 52,000 (6.5%) 69,000 5.7% 34,500 (14.3%) 167.28 Note: Revisions to forecast announced on May 13, 2025: None Note: Pursuant to a decision by the Board of Directors in a meeting held on May 13, 2025, the Company acquired its own shares during the period under review. The forecast of earnings per share, above, was calculated in consideration of the impact of this share buyback. Notes (1) Significant changes in scope of consolidation in the six months ended September 30, 2025: Yes Subsidiaries added to the scope of consolidation: None Subsidiaries removed from the scope of consolidation: 1 (MVC Co., Ltd.) Note: MVC Co., Ltd., was removed from the scope of consolidation because it was absorbed by the Company’s wholly owned subsidiary, ATOL Co., Ltd. (the surviving company of the merger) effective from April 1, 2025. (2) Application of accounting methods specific to preparation of the consolidated financial statements: None (3) Changes in accounting policies and estimates, and restatements of accounting estimates (a) Changes in accounting policies due to revisions of accounting standards: None (b) Changes in accounting policies other than (a) above: None (c) Changes in accounting estimates: None (d) Restatements: None (4) Number of shares issued and outstanding (common stock) (a) Number of shares issued at the end of the period (including treasury stock) As of September 30, 2025 219,226,042 As of March 31, 2025 219,226,042 (b) Number of treasury shares at the end of the period As of September 30, 2025 13,887,292 As of March 31, 2025 11,275,805 (c) Average number of shares outstanding during the period April 1 to September 30, 2025 206,838,708 April 1 to September 30, 2024 209,027,860 Note: Financial results for the first six months of the fiscal year are not subject to review by certified public accountants or an audit firm. Disclaimer Regarding Forward-Looking Statements The forecast of consolidated financial results is based on information at the time of the publication of this report. Results may differ from the forecast amounts owing to a wide range of factors. Availability of Supplemental Materials Covering the Financial Results Supplementary materials are made available in the “IR Library” section of the Company’s website.
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- 1 - Table of Contents 1. Overview of Financial Results (1) Overview of Results of Operations for the First Six Months 2 2 2. Consolidated Financial Statements (1) Consolidated Balance Sheets (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income Consolidated Statements of Income Consolidated Statements of Comprehensive Income (3) Consolidated Statements of Cash Flows (4) Notes to the Consolidated Financial Statements Segment Results Notes in the Event of Significant Changes in Shareholders’ Equity Notes Regarding Assumptions of Going Concern Changes in the Scope of Consolidation and Application of the Equity Method Notes Regarding Significant Subsequent Events 5 5 7 7 8 9 10 10 11 11 11 11
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- 2 - 1. Overview of Financial Results (1) Overview of Results of Operations for the First Six Months Consolidated financial results for the first six months ended September 30, 2025, are as follows. (Millions of yen, rounded down to the nearest million) Six months ended September 30, 2024 Six months ended September 30, 2025 Difference YoY change Net sales 1,824,672 1,897,562 +72,889 +4.0% Gross profit Percentage of net sales 126,441 6.93% 130,279 6.87% +3,838 (0.06pp) +3.0% Selling, general and administrative expenses Percentage of net sales 99,278 5.44% 105,196 5.54% +5,917 +0.10pp +6.0% Selling, general and administrative expenses excluding (i) and (ii) below 97,844 100,661 +2,816 +2.9% (i) Business investment and other expenses 337 3,369 +3,031 +899.0% (ii) Amortization of goodwill and intangible assets* 1,096 1,165 +68 ＋6.3% Operating profit Percentage of net sales 27,162 1.49% 25,083 1.32% （2,079） （0.17pp） （7.7%） Operating profit excluding (i) and (ii) above 28,596 29,618 +1,021 +3.6% Ordinary profit 35,080 34,269 （811） （2.3%） Net extraordinary income 4,693 5,539 +846 +18.0% Profit before income taxes 39,774 39,809 +34 +0.1% Profit attributable to owners of parent 21,727 22,090 +363 +1.7% * Amortization of goodwill and intangible assets associated with growth investments set forth in the 2027 MEDIPAL Medium-Term Vision Net sales Net sales rose by ¥72,889 million [4.0%] year on year to ¥1,897,562 million. • All business segments posted net sales growth compared with the same period of the previous fiscal year, with increases of ¥48,163 million [4,1%] in the Prescription Pharmaceutical Wholesale Business segment, ¥24,708 million [4.1%] in the Cosmetics, Daily Necessities and OTC Pharmaceutical Wholesale Business segment, and ¥6 million [0.0%] in the Animal Health Products and Food Processing Raw Materials Wholesale Related Business segment. Operating profit Operating profit decreased by ¥2,079 million [(7.7%)] year on year to ¥25,083 million. • Gross profit increased by ¥3,838 million [3.0%] on the back of net sales growth. The ratio of gross profit to net sales came to 6.87%, down 0.06 of a percentage point from 6.93% in the same period of the previous fiscal year. • Selling, general and administrative (SG&A) expenses rose by ¥5,917 million [6.0%], mainly due to a year-on-year increase in business investment* and other expenses in the Prescription Pharmaceutical Wholesale Business segment, along with rising logistics expenses and proactive investment in human resources in the Cosmetics, Daily Necessities and OTC Pharmaceutical Wholesale Business segment. The ratio of SG&A expenses to net sales stood at 5.54%, up 0.10 of a percentage point from 5.44% in the same period of the previous fiscal year. * The amount of this business investment made during the period under review has been reflected in the Company’s forecast of financial results announced on May 13, 2025. Ordinary profit Ordinary profit decreased by ¥811 million [(2.3%)] year on year to ¥34,269 million. • This decrease in ordinary profit was comparatively smaller than the year-on-year decrease in operating profit, mainly because net non-operating income increased by ¥1,267 million compared with the same period of the previous fiscal year mainly as a result of a gain on investments in affiliated companies (recorded as “share of profit of entities accounted for using equity method”). Profit attributable to owners of parent Profit attributable to owners of parent increased by ¥363 million [1.7%] year on year to ¥22,090 million. • Net extraordinary income amounted to ¥5,539 million, up ¥846 million compared with the same period of the previous fiscal year. Among the main factors underlying this result, a gain on sale of investment securities of ¥9,938 million was recorded under extraordinary income, while ¥4,291 million in expenses for business restructuring associated with the logistics operations of the Prescription Pharmaceutical Wholesale Business was recorded under extraordinary losses.
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- 3 - Prescription Pharmaceutical Wholesale Business Segment (Millions of yen, rounded down to the nearest million) Six months ended September 30, 2024 Six months ended September 30, 2025 Difference YoY change Net sales 1,167,635 1,215,799 +48,163 +4.1% Gross profit Percentage of net sales 74,123 6.35% 75,563 6.22% +1,439 (0.13pp) +1.9% Selling, general and administrative expenses Percentage of net sales 62,268 5.33% 65,889 5.42% +3,620 +0.09pp +5.8% Selling, general and administrative expenses excluding (i) and (ii) below 61,862 62,382 +519 +0.8% (i) Business investment and other expenses 337 3,369 +3,031 +899.0% (ii) Amortization of goodwill* 68 137 +68 +100.0% Operating profit Percentage of net sales 11,854 1.02% 9,673 0.80% (2,180) (0.22pp) (18.4%) Operating profit excluding (i) and (ii) above 12,260 13,180 +919 +7.5% * Amortization of goodwill associated with growth investments set forth in the 2027 MEDIPAL Medium-Term Vision Net sales Net sales rose by ¥48,163 million [4.1%] year on year to ¥1,215,799 million. • Despite falling demand for diagnostic reagents for COVID-19, net sales increased on the back of growth in the medical supplies market, higher sales from dispensing pharmacies’ channels, and the Company’s success in stepping up marketing of medical equipment and products designated as having potential for growth. Operating profit Operating profit fell by ¥2,180 million [(18.4%)] year on year to ¥9,673 million. • Gross profit increased by ¥1,439 million [1.9%] year on year mainly as a result of the increase in net sales. The ratio of gross profit to net sales came to 6.22%, down 0.13 of a percentage point year on year from 6.35%. This reflected changes in the product mix resulting from declining sales of diagnostic reagents for COVID-19. • SG&A expenses rose by ¥3,620 million [5.8%] to ¥65,889 million, primarily due to a year-on-year increase in business investment and other expenses. The ratio of SG&A expenses to net sales came to 5.42%, up 0.09 of a percentage point from 5.33% in the same period of the previous fiscal year. Cosmetics, Daily Necessities and OTC Pharmaceutical Wholesale Business Segment (Millions of yen, rounded down to the nearest million) Six months ended September 30, 2024 Six months ended September 30, 2025 Difference YoY change Net sales 600,427 625,135 +24,708 +4.1% Gross profit Percentage of net sales 44,181 7.36% 46,532 7.44% +2,350 +0.09pp +5.3% Selling, general and administrative expenses Percentage of net sales 30,203 5.03% 32,637 5.22% +2,433 +0.19pp +8.1% Operating profit Percentage of net sales 13,977 2.33% 13,894 2.22% (82) (0.11pp) (0.6%) Net sales Net sales rose by ¥24,708 million [4.1%] year on year to ¥625,135 million. • Although consumers tended to economize amid rising prices of goods and services, this business boosted sales as it applied consumer purchasing data in sales activities to clearly identify growing demand from inbound tourism and changes in purchasing behavior associated with growing awareness of health and demand for leisure outings. It also handled a larger volume of food deliveries and expanded its lineups of high value-added products, particularly cosmetics. As a result, the business kept sales volume in line with the previous year and increased product selling prices, thereby boosting net sales.
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- 4 - Operating profit Operating profit edged down by ¥82 million [(0.6%)] year on year to ¥13,894 million. • Gross profit increased by ¥2,350 million [5.3%] year on year to ¥46,532 million, backed by the net sales growth and expanded lineups of high value-added products. The ratio of gross profit to net sales increased by 0.09 of a percentage point from 7.36% to 7.44%, reflecting the Company’s efforts to boost sales of high value-added products tailored for consumer needs. • SG&A expenses rose by ¥2,433 million [8.1%] to ¥32,637 million, resulting from proactive investment in human resources as well as rising logistics expenses, which reflected higher delivery fees and changes in demand caused by weather conditions. The ratio of SG&A expenses to net sales came to 5.22%, up 0.19 of a percentage point from 5.03% in the same period of the previous fiscal year. Animal Health Products and Food Processing Raw Materials Wholesale and Related Business Segment (Millions of yen, rounded down to the nearest million) Six months ended September 30, 2024 Six months ended September 30, 2025 Difference YoY change Net sales 58,607 58,613 +6 +0.0% Gross profit Percentage of net sales 8,164 13.93% 8,213 14.01% +49 +0.08pp +0.6% Selling, general and administrative expenses Percentage of net sales 6,995 11.94% 6,859 11.70% (136) (0.23pp) (1.9%) Selling, general and administrative expenses excluding the following: 5,967 5,831 (136) (2.3%) Amortization of goodwill and intangible assets* 1,028 1,028 — — Operating profit Percentage of net sales 1,168 1.99% 1,353 2.31% +185 +0.32pp +15.8% Operating profit excluding the above amortization 2,197 2,382 +185 +8.4% * Amortization of goodwill and intangible assets associated with growth investments set forth in the 2027 MEDIPAL Medium-Term Vision Net sales Net sales edged up by ¥6 million [0.0%] year on year to ¥58,613 million. • The Animal Health Products Wholesale Business boosted its sales by actively releasing new products and expanding its partnerships with manufacturers, despite the negative impact of changes in product distribution in the companion animal* health products industry, specifically the direct sale of certain products by their manufacturers. In the livestock and fish farming market, although price competition has been intensifying, sales were up thanks to rising demand for fish vaccines and ingredients for cattle feed. In contrast, however, the Food Processing Raw Materials Wholesale and Related Business posted a decrease in sales to the food market despite its progress in creating new business opportunities and expanding sales to the chemical products market. *An animal that has a companion-like presence and a close relationship with people in daily life. Operating profit Operating profit jumped by ¥185 million [15.8%] year on year to ¥1,353 million. • Gross profit increased by ¥49 million [0.6%] year on year to ¥8,213 million. The ratio of gross profit to net sales came to 14.01%, up 0.08 of a percentage point from 13.93% in the same period of the previous fiscal year. Although increasingly tough price competition was experienced in the livestock and fish farming markets by the Animal Health Products Wholesale Business and in the food market by the Food Processing Raw Materials Wholesale and Related Business, the latter business boosted its sales to the chemical products market, thereby contributing to the increase in gross profit. • SG&A expenses decreased by ¥136 million [(1.9%)] to ¥6,859 million, and the ratio of these expenses to net sales improved by 0.23 of a percentage point from 11.94% to 11.70%. This was mainly due to lower personnel expenses in the Food Processing Raw Materials Wholesale and Related Business Note: Segment sales include inter-segment transactions.
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- 5 - 2. Consolidated Financial Statements (1) Consolidated Balance Sheets (Millions of yen, rounded down to the nearest million) As of March 31, 2025 As of September 30, 2025 ASSETS Current assets Cash and deposits 261,407 276,633 Notes and accounts receivable – trade 763,541 816,296 Merchandise and finished goods 178,100 190,503 Other 79,739 85,769 Allowance for doubtful accounts (42) (41) Total current assets 1,282,746 1,369,160 Non-current assets Property, plant and equipment: Buildings and structures, net 103,180 103,599 Land 117,285 117,284 Other, net 48,098 44,425 Total property, plant and equipment 268,564 265,309 Intangible assets Goodwill 13,150 12,525 Customer-related intangible assets 16,392 15,761 Other 10,356 9,931 Total intangible assets 39,898 38,218 Investments and other assets Investment securities 199,078 194,739 Other 35,341 40,836 Allowance for doubtful accounts (644) (642) Total investments and other assets 233,774 234,933 Total non-current assets 542,237 538,462 Total assets 1,824,984 1,907,622
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- 6 - (Millions of yen, rounded down to the nearest million) As of March 31, 2025 As of September 30, 2025 LIABILITIES Current liabilities Notes and accounts payable – trade 932,474 1,002,231 Income taxes payable 13,329 19,757 Provision for bonuses 7,854 7,616 Provision for loss on disposal of fixed assets 167 167 Provision for loss on Anti-Monopoly Act 2,233 － Other 53,387 58,204 Total current liabilities 1,009,447 1,087,977 Non-current liabilities Retirement benefit liability 16,057 14,051 Other 41,532 39,456 Total non-current liabilities 57,590 53,507 Total liabilities 1,067,037 1,141,484 NET ASSETS Shareholders’ equity Share capital 22,398 22,398 Capital surplus 100,010 100,020 Retained earnings 463,071 477,279 Treasury shares (22,193) (28,569) Total shareholders’ equity 563,286 571,129 Accumulated other comprehensive income Valuation difference on available-for-sale securities 66,060 63,166 Deferred gains or losses on hedges (37) 6 Revaluation reserve for land (13,518) (13,518) Foreign currency translation adjustment 2,646 1,984 Remeasurements of defined benefit plans 1,126 910 Total accumulated other comprehensive income 56,277 52,549 Share acquisition rights 1 1 Non-controlling interests 138,381 142,457 Total net assets 757,947 766,138 Total liabilities and net assets 1,824,984 1,907,622
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- 7 - (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income Consolidated Statements of Income (Millions of yen, rounded down to the nearest million) Six months ended September 30, 2024 Six months ended September 30, 2025 Net sales 1,824,672 1,897,562 Cost of sales 1,698,231 1,767,283 Gross profit 126,441 130,279 Selling, general and administrative expenses Salaries and allowances 36,918 37,893 Welfare expenses 7,413 7,486 Provision for bonuses 7,197 7,273 Retirement benefit expenses 1,412 1,188 Distribution expenses 11,858 12,547 Rent expenses on land and buildings 2,493 2,824 Depreciation 6,732 6,722 Other 25,251 29,260 Total selling, general and administrative expenses 99,278 105,196 Operating profit 27,162 25,083 Non-operating income Interest income 12 88 Dividend income 1,565 1,690 Research fee income 4,260 4,316 Rental income from real estate 1,223 1,275 Share of profit of entities accounted for using equity method 606 2,220 Other 1,241 1,357 Total non-operating income 8,909 10,948 Non-operating expenses Interest expenses 3 6 Rental expenses on real estate 826 1,157 Loss on investments in investment partnerships 24 453 Other 137 144 Total non-operating expenses 991 1,762 Ordinary profit 35,080 34,269 Extraordinary income Gain on sale of non-current assets 1 0 Gain on sale of investment securities 4,912 9,938 Other 69 481 Total extraordinary income 4,983 10,419 Extraordinary losses Loss on sale and retirement of non-current assets 28 24 Impairment losses ] 168 369 Expenses for business restructuring Other － 93 4,291 193 Total extraordinary losses 290 4,879 Profit before income taxes 39,774 39,809 Income taxes – current 19,982 19,286 Income taxes – deferred (7,777) (6,962) Total income taxes 12,204 12,324 Profit 27,569 27,485 Profit attributable to non-controlling interests 5,842 5,394 Profit attributable to owners of parent 21,727 22,090
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- 8 - Consolidated Statements of Comprehensive Income (Millions of yen, rounded down to the nearest million) Six months ended September 30, 2024 Six months ended September 30, 2025 Profit 27,569 27,485 Other comprehensive income Valuation difference on available-for-sale securities 6,165 (1,793) Deferred gains or losses on hedges (55) 51 Remeasurements of defined benefit plans, net of tax (156) (259) Share of other comprehensive income of entities accounted for using equity method 1,748 (442) Total other comprehensive income 7,701 (2,444) Comprehensive income 35,271 25,040 Comprehensive income attributable to Comprehensive income attributable to owners of parent 29,333 18,363 Comprehensive income attributable to non-controlling interests 5,938 6,677
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- 9 - (3) Consolidated Statements of Cash Flows (Millions of yen, rounded down to the nearest million) Six months ended September 30, 2024 Six months ended September 30, 2025 Cash flows from operating activities Profit before income taxes 39,774 39,809 Depreciation 8,508 8,577 Amortization of goodwill 638 625 Increase (decrease) in provision for bonuses (677) (237) Increase (decrease) in allowance for doubtful accounts (61) (3) Increase (decrease) in provision for loss on disaster (403) － Increase (decrease) in provision for loss on the Anti-Monopoly Act － (2,233) Increase (decrease) in retirement benefit liability (105) (2,006) Decrease (increase) in trade receivables (13,703) (52,760) Decrease (increase) in inventories (25,556) (12,440) Increase (decrease) in trade payables Other 56,666 (13,417) 69,756 (12,478) Subtotal 51,660 36,608 Interest and dividends received 2,608 2,829 Interest paid (2) (2) Proceeds from compensation － 478 Payments associated with disaster loss (406) － Payments related to Anti-Monopoly Act Income taxes paid － (12,027) (1,573) (12,838) Net cash provided by (used in) operating activities 41,832 25,501 Cash flows from investing activities Purchase of property, plant and equipment (7,070) (4,733) Proceeds from sale of property, plant and equipment 2 1 Purchase of investment securities (356) (486) Proceeds from sale and redemption of investment securities 5,943 12,759 Purchase of shares of subsidiaries resulting in change in scope of consolidation (3,403) － Other (1,635) (2,258) Net cash provided by (used in) investing activities (6,520) 5,283 Cash flows from financing activities Purchase of treasury shares (5,068) (6,420) Purchase of shares of subsidiaries not resulting in change in scope of consolidation (1,503) (951) Dividends paid (6,300) (6,654) Dividends paid to non-controlling-interest shareholder (1,518) (1,639) Other 14 (296) Net cash provided by (used in) financing activities (14,376) (15,962) Effect of exchange rate changes on cash and cash equivalents (4) 3 Net increase (decrease) in cash and cash equivalents 20,931 14,825 Cash and cash equivalents at beginning of period 228,084 259,337 Cash and cash equivalents at end of period 249,016 274,163
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- 10 - (4) Notes to the Consolidated Financial Statements Segment Results I. Results for the six months ended September 30, 2024 Breakdown of Net Sales and Profit by Segment (Millions of yen, rounded down to the nearest million) Prescription Pharmaceutical Wholesale Business Cosmetics, Daily Necessities and OTC Pharmaceutical Wholesale Business Animal Health Products and Food Processing Raw Materials Wholesale Related Business Total Adjustment (Note 1) Amount reported in consolidated statements of income (Note 2) Net sales Sales to customers 1,165,840 600,226 58,606 1,824,672 － 1,824,672 Intersegment sales and transfers 1,795 201 1 1,998 (1,998) － Total 1,167,635 600,427 58,607 1,826,671 (1,998) 1,824,672 Segment profit 11,854 13,977 1,168 27,001 161 27,162 Notes: 1. The adjustment of segment profit amounting to ¥161 million is the net balance of ¥1,506 million in inter-segment eliminations and ¥1,344 million in group-wide expenses that are not allocated to reportable segments. 2. Segment profit is adjusted to operating profit as reported in the quarterly consolidated statements of income. II. Results for the six months ended September 30, 2025 Breakdown of Net Sales and Profit by Segment (Millions of yen, rounded down to the nearest million) Prescription Pharmaceutical Wholesale Business Cosmetics, Daily Necessities and OTC Pharmaceutical Wholesale Business Animal Health Products and Food Processing Raw Materials Wholesale Related Business Total Adjustment (Note 1) Amount reported in consolidated statements of income (Note 2) Net sales Sales to customers 1,213,953 624,996 58,612 1,897,562 － 1,897,562 Intersegment sales and transfers 1,846 139 1 1,987 (1,987) － Total 1,215,799 625,135 58,613 1,899,549 (1,987) 1,897,562 Segment profit 9,673 13,894 1,353 24,922 160 25,083 Notes: 1. The adjustment of segment profit amounting to ¥160 million is the net balance of ¥1,586 million in inter-segment eliminations and ¥1,425 million in group-wide expenses that are not allocated to reportable segments. 2. Segment profit is adjusted to operating profit as reported in the quarterly consolidated statements of income.
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- 11 - Notes in the Event of Significant Changes in Shareholders’ Equity None applicable Notes Regarding Assumptions of Going Concern None applicable Changes in the Scope of Consolidation and Application of the Equity Method MVC Co., Ltd., was removed from the scope of consolidation because it was absorbed by the Company’s wholly owned subsidiary, ATOL Co., Ltd. (the surviving company of the merger) effective from April 1, 2025. Notes Regarding Significant Subsequent Events Corporate Acquisition The Company’s consolidated subsidiary, MP AGRO CO., LTD., has concluded an agreement to acquire all shares of Cygni Holdings, Inc., the sole owner of Cygni Corporation, which operates an e-commerce business targeting veterinary clinics. The shares will be acquired from BCM-V Investment Limited Partnership, which is operated by Cygni Holdings’ parent company, Basic Capital Management, Limited, through a share transfer. Acquisition Overview 1) Company to be acquired and its main business Company to be acquired: Cygni Holdings, Inc. Main business: Sales of essential medical supplies alongside administrative support services for medical institutions (animal hospitals, hospitals, and care facilities, etc.), and sales of pet supplies to pet stores and pet owners. 2) Reason for the acquisition Having positioned the expansion of businesses targeting the AGRO&FOOD sector as one of its growth strategies for realizing its 2027 MEDIPAL Medium-Term Vision, the Company aims to strengthen and expand its businesses involved in companion animal-related products and food processing raw materials. By making Cygni Corporation, which sells to veterinary clinics throughout Japan, a subsidiary of MP AGRO, the Company intends to leverage the strengths of both companies to generate synergies, recognizing the potential for boosting sales to major markets, expanding online sales channels, and speeding up the growth of its businesses involved in companion animal- related products. 3) Planned acquisition date December 19, 2025 4) Equity stake following the acquisition 100% of Cygni Holdings’ shares The English version of this document is a translation of the Japanese original and is provided for information purposes only. While reasonable efforts have been made to provide an accurate translation, no liability is assumed by MEDIPAL HOLDINGS CORPORATION for any errors, omissions, or ambiguities in the translation. In the event of any inconsistency or conflict between the English version and the Japanese original, the Japanese original shall prevail.