Shin Nippon Biomedical Laboratories (2395) investor relations material

Executive summary

• Q1 revenue set a first-quarter record at ¥7.868B, up 21.5% YoY; operating profit swung to ¥521M from a ¥340M loss, and profit attributable to owners rose to ¥1.064B.

• Nonclinical CRO orders hit a first-quarter record of ¥9.961B and backlog reached ¥44.06B, supported by overseas demand.

• Results benefited from CRO projects shifting from FY3/26 into Q1 FY3/27, while some TR expenses moved to Q2 and later periods.

Financial highlights

• Revenue was ¥7.868B, gross profit ¥4.047B, operating profit ¥521M, ordinary profit ¥1.433B and profit attributable to owners ¥1.064B.

• Gross margin improved to 51.4% from 47.4%, reflecting higher CRO facility utilization; SG&A-to-revenue ratio improved to 44.8% from 52.6%.

• Ordinary profit rose 177.9% YoY and profit attributable to owners rose 308.6%; foreign-exchange gains were ¥172M versus ¥121M.

• Equity-method profit was ¥831M, including ¥718M from PPD-SNBL; comprehensive income was negative ¥116M, including a ¥1.897B decline in available-for-sale securities valuation.

Outlook and guidance

• Revised H1 forecast: revenue ¥17.154B, operating profit ¥1.24B, ordinary profit ¥2.988B and profit attributable to owners ¥1.917B; operating profit increased ¥770M from the initial forecast.

• FY3/27 forecast unchanged: revenue ¥38.0B, operating profit ¥3.0B, ordinary profit ¥6.0B and profit attributable to owners ¥3.5B; revenue is forecast to set a fifth consecutive record.

• CRO is expected to deliver double-digit revenue and profit growth; the nonclinical orders plan is ¥37.8B, based on an assumed US$1=¥150 exchange rate.

• A ¥1 depreciation against the U.S. dollar is estimated to increase revenue by ¥70M and operating profit by ¥100M.