Overview of Results of Operations

In the fiscal year under review, Japanese economy experienced a mild recovery trend as corporate profits and the employment situation improved. However, the outlook remains uncertain due to concerns about the situation overseas including a slowdown in the emerging economies led by China, political risk in Europe, U.S. policy trends and other factors.

The Rohto Group has moved into new fields with customer-oriented product development and marketing activities. In its existing categories, the Group has developed high value-added products in response to changing consumer needs and endeavored to reinvigorate markets.

In total, net sales decreased 7.4% year-on-year to 154,599 million yen. In Japan, hay fever products and high-value-added eye drops sold well. Overseas, sales fell due to the effect of the yen's appreciation and the strong impact of China's economic slowdown.

Regarding profits, operating income decreased 1.5% year-on-year to 15,451 million yen, due to ongoing up-front investments to enter new business fields, despite efficient use of selling, general and administrative expenses. Ordinary income increased 4.1% to 15,964 million yen and profit attributable to owners of parent rose by 10.0% to a record-high of 10,011 million yen.

Regarding dividends, following the auditing of accounts carried out in accordance with the Companies Act and the resolution by the Board of Directors, the Company plans to distribute a year-end dividend of 11 yen per share for the fiscal year ended on March 31, 2017. Added to the interim dividend of 10 yen, which has been distributed already, this will bring the annual dividend to 21 yen per share.

Outlook for the fiscal year ending Mar. 31, 2018

Regarding the economic outlook, despite an overall slow recovery trend, uncertainty about the future is likely to remain high due to such factors as concerns for the slowdown in the Chinese economy, stagnation in the emerging economies, and the impact of a downturn in the global economy accompanied by increasing geopolitical risk.

Under such conditions, the Rohto Group will adapt to the changes in the business environment, aiming to expand business further and improve earnings by creating new products and brands that respond appropriately to changing customer needs. The Group is also taking on the challenge of various innovations including alliances with a wide range of companies.

In the fiscal year ending March 31, 2018, we anticipate that net sales will rise 2.5% year-on-year to 158.5 billion yen. In Asia, especially, we expect a sales recovery in China in addition to strong sales in Vietnam. We expect operating income to rise 1.0% to 15.6 billion yen, and ordinary income to rise 0.2% to 16 billion yen. We expect profit attributable to owners of parent to rise 1.9% to 10.2 billion yen.

These forecasts are based on an exchange rate of 110 yen to the U.S. dollar.

For the fiscal year ending on March 31, 2018, with our gratitude to all the shareholders who support us on a regular basis, we plan to pay interim dividends of 11 yen per share, year-end dividends of 11 yen per share bringing the annual total to 22 yen per share.