Interim report
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Note : This document has been translated from the Japanese original for reference purposes only . In the event of any discrepancy between this translated document and the Japanese original , the original shall prevail . sawai Consolidated Financial Results for the Three months Ended June 30 , 2026 August 10 , 2026 Accounting Financial Ac Standards Tokyo Stock Exchange ( Under IFRS ) Company name : Sawai Group Holdings Co. , Ltd. Listing : Securities code : 4887 URL : Representative : Inquiries : Telephone : https://www.sawaigroup.holdings Mitsuo Sawai , President and Representative Director Taku Nakaoka , Director , Senior Executive Officer and Group Chief Financial Officer + 81-6-6105-5818 Scheduled date to commence dividend payments : N / A Preparation of supplementary material on financial results : Yes Holding of financial results briefing : Scheduled ( for institutional investors and analysts ) FASF MEMBERSHIP ( Amounts are rounded to the nearest millions of yen ) 1. Consolidated financial results for the three months ended June 30 , 2026 ( from April 1 , 2026 to June 30 , 2026 ) ( 1 ) Consolidated operating results ( cumulative ) ( Percentages indicate year - on - year changes . ) Revenue Operating profit Profit before tax Profit Three months ended June 30 , 2026 June 30 , 2025 Millions of yen 51,622 49,511 % 4.3 11.7 Millions of yen 4,953 6,979 % Millions of yen % Millions of yen % ( 29.0 ) 14.6 4,445 6,802 ( 34.7 ) 2,429 ( 50.3 ) 14.5 4,891 ( 68.4 ) Profit attributable to owners of parent Total comprehensive Basic earnings Diluted earnings income per share per share Three months ended June 30 , 2026 June 30 , 2025 Millions of yen 2,429 4,891 % Millions of yen % Yen Yen ( 50.3 ) ( 68.4 ) 2,318 4,938 42.36 20.97 42.22 Note : The Company has classified its U.S. Business as a discontinued operation . Therefore , in this summary , revenue , operating profit and profit before tax include the amount only from the Company's continued operation while profit for the period and profit attributable to owners of parent include the amount from the Company's continued and discontinued operation . ( 53.1 ) 21.04 21.1 ( 2 ) Consolidated financial position Total assets As of June 30 , 2026 March 31 , 2026 Millions of yen 368,979 359,919 Total equity Equity attributable to owners of parent Ratio of equity attributable to owners of parent to total assets Millions of yen 177,653 178,556 Millions of yen 177,653 178,556 % 48.1 49.6
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2. Cash dividends Annual dividends per share First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Yen Yen Yen Yen Yen Fiscal year ended March 31, 2026 － 27.00 － 28.00 55.00 Fiscal year ending March 31, 2027 － Fiscal year ending March 31, 2027 (Forecast) 28.00 － 28.00 56.00 3. Forecast of consolidated financial results for fiscal year ending March 31, 2027 (from April 1, 2026 to March 31, 2027) (Percentages indicate year-on-year changes.) Revenue Operating profit Profit before tax Profit attributable to owners of parent Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen First six months ending September 30, 2026 101,000 2.2 13,100 53.5 12,500 57.0 8,900 52.3 77.08 Fiscal year ending March 31, 2027 208,400 3.3 27,200 71.1 26,000 82.2 18,600 78.2 161.08 Note: 1. Revisions to the forecast most recently announced: None
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Notes (1) Significant changes in the scope of consolidation during the period: None Newly included: None Excluded: None (2) Changes in accounting policies and changes in accounting estimates (i) Changes in accounting policies required by IFRS: None (ii) Changes in accounting policies due to other reasons: None (iii) Changes in accounting estimates: None (3) Number of issued shares (ordinary shares) (i) Total number of issued shares at the end of the period (including treasury shares) As of June 30, 2026 115,487,137 shares As of March 31, 2026 115,487,137 shares (ii) Number of treasury shares at the end of the period As of June 30, 2026 1,503 shares As of March 31, 2026 1,503 shares (iii) Average number of shares outstanding during the period Three months ended June 30, 2026 115,465,714 shares Three months ended June 30, 2025 115,451,314 shares * Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: None * Proper use of earnings forecasts, and other special matters The First Quarter earnings conference for institutional investors and analysts is scheduled for August 10, 2026. Presentation and related materials of the conference will be promptly posted on our website.
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―1― Attachment Index 1．Financial Highlights the three months ended June 30, 2026 ............................... ................................ ................................ ................. 2 (1) Operating Results ............................... ................................ ................................ ................................ ................................ .................. 2 (2) Financial Position ............................... ................................ ................................ ................................ ................................ .................. 5 (3) Cash Flow ............................... ................................ ................................ ................................ ................................ ............................ . 6 (4) Forecast of Consolidated Financial Results and Other Forward-looking Statements ............................... ................................ ............ 6 2．Condensed Quarterly Consolidated Financial Statements and Selected Notes ............................... ................................ ..................... 7 (1) Condensed Quarterly Consolidated Statements of Income and Condensed Quarterly Consolidated Statements of Comprehensive Income ............................... ................................ ................................ ................................ ................................ ................................ ........ 7 (2) Condensed Quarterly Consolidated Statements of Financial Position ............................... ................................ ................................ ... 9 (3) Condensed Quarterly Consolidated Statements of Changes in Equity ............................... ................................ ............................... . 11 (4) Condensed Quarterly Consolidated Statements of Cash Flows ............................... ................................ ................................ ........... 12 (5) Selected Notes to Condensed Quarterly Consolidated Financial Statements ............................... ................................ ...................... 13 (Significant Uncertainty Regarding Going Concern Assumption） ............................... ................................ ................................ ......... 13 (Discontinued Operation） ............................... ................................ ................................ ................................ ................................ ....... 13 (Segment Information） ............................... ................................ ................................ ................................ ................................ ........... 14 (Events after Reporting Period) ............................... ................................ ................................ ................................ ............................... . 15
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―2― 1．Financial Highlights for the three months ended June 30, 2026 (1) Operating Results Sawai Group Holdings Co., Ltd. (the “Company”) and subsidiaries (collectively, “Sawai”) have adopted International Financial Reporting Standards (IFRS) in order to increase the international comparability of its financial information within the capital market. The Company has classified its U.S. Business as a discontinued operation since the third quarter of FY2023, and the Company lost control of Sawai America Holdings Inc. (SAH), a holding company of Sawai’s U.S. Business, after transferring all shares it had held in that U.S.-based subsidiary, as well as its interests in Sawai America LLC (SAL) and interests in Upsher-Smith Laboratories, LLC (USL) on April 2, 2024. Therefore, in this summary, revenue, operating profit and profit before tax include the amount only from the Company’s continued operation, while the amounts of profit for the period and profit attributable to owners of parent total those of both the continued and discontinued operations. During the three months ended June 30, 2026, revenue increased to JPY 51,622 million (by 4.3%), operating profit decreased to JPY 4,953 million (by 29.0%), profit before tax decreased to JPY 4, 445 million (by 34.7%), and profit attributable to owners of parent decreased to JPY 2,429 million (by 50.3%) compared to the three months ended June 30, 2025. (Millions of yen, except percentages) Three months ended June 30, 2025 Three months ended June 30, 2026 Change Change (%) Revenue 49,511 51,622 2,111 4.3 Operating profit 6,979 4,953 (2,026) (29.0) Profit before tax 6,802 4,445 (2,357) (34.7) Profit attributable to owners of parent 4,891 2,429 (2,461) (50.3) Under a holding company structure, Sawai Group drew up a vision for the future that we would like to aim for by fiscal year 2030, “Sawai Group Vision 2030” and in June 2024, has formulated and announced the three-year medium-term management plan, “Beyond 2027” (hereinafter, the “Medium-term Plan”). Sawai Group Vison 2030 defines the world Sawai wants to build by 2030 as “A world where more people receive healthcare services and live a full life with peace of mind among society” and the ideal state it hopes to reach by 2030 as “A company with a strong presence that continues to contribute to people’s health by providing a multifaceted mix of products and services based on scientific evidence that meets individual needs.” Envisioning that Sawai will further grow, building on “Establishing a trusted corporate foundation,” the Medium-term Plan indicates the key business strategy themes of (1) Achieving steady growth in the generics market, (2) Establishing sustainability of the generics business, and (3) Continuing investment in growth areas and key management base themes of (1) Creating talent that underpins sustainable growth, (2) Working on sustainability initiatives, and (3) Improving capital efficiency. The “Basic Policy on Economic and Fiscal Management and Reform 2021,” approved by the Japanese Cabinet in June 2021, states, “With the aim of ensuring the reliability of the quality and stable supply of generic drugs as the main pillar, the Government and the private sector will work together to strengthen the manufacturing control system, strengthen the supervision of manufacturing sites, and implement quality inspections of commercial products. The goal is to increase the volume share of generic drugs to 80% or more in all Japanese prefectures by the end of FY2023.” On the occasion of the April 2022 medical fee revision, the evaluation standards were revised in favor of pharmacies dispensing a high percentage of generic drugs and medical institutions using a high percentage of generic drugs in order to further encourage the use of generic pharmaceuticals. Furthermore, in September 2024, the Medical Insurance Subcommittee of the Social Security Council of the Japanese Ministry of Health, Labour and Welfare (MHLW) revised the Roadmap for Promoting Further Use of Generic Drugs, with a monetary value target added to the target of increasing the nationwide use of generic drugs to 80% or more in volume. Also, since October 2024, a system for patient-selected additional medical services has been adopted so that additional financial burdens are imposed on patients who use long-listed drugs to which generic alternatives are available, leading to the likelihood of an accelerating shift to generic drugs. As a result, according to a preliminary report on the September 2025 government drug price survey, the quantity
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―3― share of generic drugs reached 88.8%. Meanwhile, violations against the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices committed by some Japanese generic drug companies were reported successively from the end of 2020, leading to concern still remaining about the overall pharmaceutical supply. Under these circumstances, MHLW's Study Group on the Ideal Industrial Structure for Achieving a Stable Supply of Generic Drugs was formed in July 2023 and discussed a wide range of subjects, from the evaluation of companies that were stably supplying products, through initiatives to optimize the number of products and to reorganize the industry, to governmental measures to develop a foundation for a stable supply of generic drugs. The study group’s discussions were compiled into a report in May 2024. In June, the Japanese Cabinet approved the government’s Basic Policies for Economic and Fiscal Management and Reform 2024, which clearly states: “We will work to allay the current concern about the supply of pharmaceuticals, and with a stable supply of pharmaceuticals as a fundamental requirement, we will also promote the generic pharmaceutical industry’s structural reforms, which may involve its reorganization, with an eye to achieving the ideal state of the industry, while developing a legal framework for a stable supply.” To achieve this, in the FY2025 NHI drug price revisions, drug prices were revised by product category, and the minimum drug prices were increased, as measures to reduce the burdens on citizens and ensure a stable supply of pharmaceuticals. Furthermore, the Basic Policy on Economic and Fiscal Management and Reform 2025 also included promoting the reorganization of the generic drug industry to resolve the issue of its high-mix low-volume production structure, and a draft Basic Policy on Economic and Fiscal Management and Reform 2026 envisions that a stable supply of generic drugs will be achieved through the promotion of industrial structural reform, while proposing specific initiatives toward a stable supply of generic drugs. In this context, the Japanese government has been promoting initiatives to ensure that the pharmaceutical industry will break away from its inefficient generic drug production system, including creating the Fund for Generic Drug Manufacturing Infrastructure Development to support companies’ efforts to improve productivity and establishing a legal framework to ensure a reliable system for a stable supply of generic drugs. Additionally, in the FY2026 NHI drug price revisions, a new system was introduced to ensure that the prices of authorized generic drugs as of the time of their inclusion in the drug price list equal the prices of the original drugs. This system is expected to contribute to improved accuracy of the supply planning of new market entrants, thereby ensuring a stable supply of drugs. In this business environment, Sawai, as a leading generic drug manufacturer in Japan, works according to its Medium-term Plan to achieve steady growth and establish the sustainability of the generics business while establishing a trusted corporate foundation with the aim of making a valuable contribution to society in a sustainable manner as social infrastructure. Given that the Japanese generic drug industry has seen serious quality control violations committed by certain companies, Sawai Pharmaceutical Co., Ltd. (“Sawai Pharmaceutical”), the core company in the Sawai Group, has focused on several issues such as ensuring the good quality of active pharmaceutical ingredients (APIs) in compliance with Good Manufacturing Practice (GMP) standards, maintaining the effectiveness of the quality control system through constant checks on GMP compliance at manufacturing facilities, and exerting manufacturing and quality control based on the internationally accepted Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme (PIC/S) GMP Guide. (The PIC/S is a non-binding, informal cooperative arrangement between Regulatory Authorities in the field of GMP of medicinal products for human or veterinary use.) Furthermore, Sawai has implemented various initiatives to ensure that medical professionals are able to use its products without concern, including disclosing the names of all its manufacturing subcontractors and API suppliers and the dates of audits performed over their operations since FY2021. Sawai also released a video introducing its efforts to improve quality control. However, Sawai Pharmaceutical revealed that Teprenone Capsules 50 mg “Sawai” manufactured at its Kyushu Plant was inappropriately tested in the dissolution test for stability monitoring for a long time. In addition, in December 2023, Sawai received an administrative penalty from MHLW, Osaka Prefecture and Fukuoka Prefecture, for a violation against the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices. The continued inappropriate testing is primarily attributed to human and structural factors. The human factors include (1) a prevalent disregard for stability monitoring; (2) an inclination to unquestioningly follow superiors’ instructions; (3) a lack of understanding of GMP among those conducting the tests. The structural factors include (1) an inadequate supervisory system for quality control and assurance; (2) insufficient
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―4― management of test records; and (3) overwork and understaffing in the quality control department responsible for overseeing these processes. We have developed the following measures aimed at preventing any recurrence and are dedicated to rebuilding trust; (1) commence a corporate culture reform project under the direct leadership of the president, (2) re-evaluate existing market products in terms of manufacturing and quality and implement corrective measures and (3) implement recurrence prevention measures in the production division including reintroduction of GMP education for all employees, clarification of the roles and responsibilities of managers and supervisors and recruitment both internally and externally for the quality control and quality assurance divisions within the plant. We are devoting Group-wide efforts to implementing these measures. In December 2024, we established the Kobe Analytical Research Center, which specializes in analytical research on carcinogenic nitrosamine drug substance-related impurities (NDSRIs). From among NDSRIs that can be contained in a minute amount in drugs, the center will focus on those for which testing methods are difficult to develop and those that are high priorities in terms of the need for analysis, and it will develop testing methods for them and use the methods to test them. The center also plans to transfer those testing methods to outside analysis contractors and internal analysis departments. We are also pursuing even higher efficiency and lower cost for our production and supply systems by utilizing the unique characteristics of each of six factories of Sawai Pharmaceutical throughout Japan with the aim of eliminating the uncertainty of generic drug supply by accommodating growing demand, as well as addressing soaring energy and raw material prices. As part of such efforts, in September 2022, we completed the construction of an injection production facility at the Kyushu Factory site. In July 2024, we also completed the construction of a new solid formulation building, with a maximum production capacity of 3.5 billion tablets, on the premises of the Daini Kyushu Factory site. Additionally, Trust Pharmatech Co., Ltd. (“Trust Pharmatech”), a Sawai Group company established by taking over assets related to production activities from Kobayashi Kako Co., Ltd., including the staff of the relevant departments, has begun the contract manufacturing of products of Sawai Pharmaceutical, working to improve its operating rate. This new company is planning to make a capital investment in Seima Plants No. 2 and No. 3 in order to expand its overall annual production capacity by 2.5 billion tablets. We will therefore continue to work on building a solid production system with a view to enabling our group to manufacture 25 billion or more tablets a year as soon as possible. Moreover, on May 22, 2026, the Board of Directors resolved that the Company conduct an absorption-type merger (hereinafter, the “Merger”) effective April 1, 2027. Under the Merger, Sawai Pharmaceutical, a consolidated and wholly owned subsidiary of the Company, will be the surviving company, and Trust Pharmatech, also a consolidated and wholly owned subsidiary of the Company, will be the dissolving company. This Merger is aimed at building a more robust production system. In conjunction with these efforts, Sawai opened and began to operate the East Japan Daini Distribution Center and the West Japan Daini Distribution Center in FY2021 with the aim of further strengthening its product supply system from the aspect of distribution. In addition, in June 2024, Sawai Pharmaceutical disclosed information on its initiatives to maintain a stable product supply in accordance with MHLW’s Guidelines for Disclosures Related to the Stable Supply of Generic Drugs. Furthermore, in September 2025, Sawai Pharmaceutical reached an agreement with Nichi-Iko Pharmaceutical Co., Ltd. to collaborate mainly in integrating both companies’ lineup of generic products, and in June 2026, we obtained the first approval through this collaboration in the expedited review of specific manufacturing process changes. Through these initiatives, we aim to build a system for a stable product supply for the entire generic drug industry. Additionally, in January 2026, we developed dirt-resistant and stably durable parts of manufacturing equipment in collaboration with Yamashita Works Co., Ltd. and Yuken Industry Co., Ltd to minimize problems in the manufacturing process and improve manufacturing efficiency, thereby ensuring a stable product supply. In terms of marketing, as a countermeasure against the steep rise in costs, we have passed on the cost increases to the prices of some of the products we sell to wholesale distributors, mainly low-priced ones, while working to further improve production efficiency. In addition, in March 2025, Sawai Pharmaceutical concluded an agreement with Eisai Co., Ltd. to take over Eisai’s rights to approval for manufacturing and marketing Warfarin, an oral anticoagulant, in the Japan market and completed the procedure for that takeover in April 2026. Through this takeover, we aim to expand our product lineup in the cardiovascular field, thereby strengthening our business foundation in that field. Also, in June 2026, nine products containing six active ingredients, including Bilastine Tablets and Bilastine OD Tablets, were added to the NHI drug price list. In the field of product development, Sawai Pharmaceutical has selected six (6) technologies in five (5) categories from technologies that can add value to medicines and create harmony in their formulation, such as technologies for making medicines more comfortable to take and for increasing the efficiency of pharmaceutical production. These original formulation technologies are
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―5― collectively named “SAWAI HARMOTECH®” and have been publicly disclosed. As part of our efforts to help achieve a sustainable society, we are implementing environmentally friendly initiatives, such as introducing mechanically recycled PET film, which is made through the mechanical recycling process of crushing used PET bottles, washing the crushed pieces, melting them at high temperature, decompressing and filtering the resulting substance, etc., as a packaging material for some of our pharmaceutical products. As an initiative for the personal health record (PHR) business, since 2022, we have been collaborating with a variety of organizations, including universities, local governments, companies, and medical institutions, to promote the utilization of PHRs. We will leverage the specialist human resources and know-how of FrontAct Co., Ltd. (“FrontAct”), a wholly owned subsidiary of ours acquired from Sumitomo Pharma Co., Ltd. in June 2025, to expand our product lineup and strengthen and grow our business foundation in the digital healthcare business, thereby changing people's lifestyles and health in a better direction through the utilization of digital technology. We will therefore continue to utilize digital technology to further enhance people’s lifestyles and well-being. Additionally, in October 2025, FrontAct entered into a partnership agreement with the Tokyo Metropolitan Government, four municipalities in Tokyo (Shinagawa City, Setagaya City, Toshima City, and Chofu City), and the Tokyo Metropolitan Geriatric Hospital on the Project for Mobile App-Assisted Health Promotion among the Elderly with the aim of achieving enhancement and improvement in frailty prevention and health promotion. Furthermore, we concluded a licensing agreement with CureApp, Inc. to gain the right to develop and sell digital therapeutics (DTx) in the field of non-alcoholic steatohepatitis (NASH) in August 2022. In August 2024, we also concluded a sales licensing contract with CureApp for an alcoholism treatment DTx app and commenced sales in September 2025 with the aim of utilizing apps in this field to not only enhance digital-healthcare technology and expertise but also deliver IT-based solutions directly to patients and healthcare professionals. In the medical device business, we focus on Relivion®, a non-invasive neuromodulation device, for which we obtained manufacturing and marketing approval for use in the acute-stage treatment of migraine from the MHLW in December 2023. As a result, the Sawai Group achieved net sales of JPY 51,622 million (an increase of 4.3% year on year) and an operating profit of JPY 4, 953 million (a decrease of 29.0% year on year). (2) Financial Position Assets As of June 30, 2026, current assets amounted to JPY 203,697million, an increase of JPY 3,352 million from March 31, 2026. As detailed in “(3) Cash Flow” below, the primary factors behind this increase were an increase of JPY 7,970 million in inventories caused mainly by our production capacity expansion measures toward a stable supply, a decrease of JPY 2,930 million in cash and cash equivalents, and a decrease of JPY 1,362 million in trade and other receivables resulting from considerable progress in the collection of receivables despite an increase in revenue. Non-current assets as of June 30, 2026 amounted to JPY 165,282 million, an increase of JPY 5,708 million from March 31, 2026. The increase was mainly due to an increase of JPY 5,276 million in property, plant and equipment resulting from the construction of a new solid formulation building at Sawai Pharmaceutical's Daini Kyushu Factory. Total assets as of June 30, 2026 were JPY 368,979 million, an increase of JPY 9,060 million compared to the balance as of March 31, 2026. Liabilities As of June 30, 2026, current liabilities amounted to JPY 101,657 million, an increase of JPY 20,723 million from March 31, 2026. The increase was mainly due to an increase of JPY 25,147 million in short-term borrowings in accordance with funding plans, while a decrease of JPY 1,292 million in trade and other payables. Non-current liabilities as of June 30, 2026 amounted to JPY 89,670 million, a decrease of JPY 10,760 million from March 31, 2026, primarily due to a decrease of JPY 11,203 million in bonds and borrowings resulting from the reclassification to current liabilities. Total liabilities as of June 30, 2026 were JPY 191,326 million, an increase of JPY 9,963 million compared to the balance as of March 31, 2026. Equity Total equity as of June 30, 2026 was JPY 177,653 million, a decrease of JPY 903 million compared to the balance as of March
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―6― 31, 2026, primarily due to the net profit for the period ended June 30, 2026 and the payment of dividends. As a result, the ratio of equity attributable to owners of parent to total assets as of June 30, 2026 became 48.1% (down from 49.6% as of March 31, 2026). (3) Cash Flow Cash and cash equivalents as of June 30, 2026 decreased by JPY 2,930 million to JPY 26,059 million, compared to the balance as of March 31, 2026. The results of cash flow for each activity are as follows: Cash flows used in operating activities was JPY 427 million for the current period (usage of JPY 13,405 million in the same period of the previous year) which mainly consists of profit before tax (JPY 4,445 million), depreciation and amortization (JPY 4,347 million), increase in inventories (JPY 7,970 million), and decrease in trade and other receivables (JPY 1,372 million). Cash flows used in investing activities was JPY 12,706 million for the current period (usage of JPY 8,598 million in the same period of the previous year) which mainly consists of the acquisition of property, plant and equipment (JPY10,584 million) and the acquisition of intangible assets (JPY 2,023 million). Cash flows generated from financing activities was JPY 10,197 million for the current period (generation of JPY 10,545 million in the same period of the previous year) which mainly consists of net increase of short-term borrowings (JPY 15,647 million), repayments of long-term borrowings (JPY 1,711 million), and payments of dividends (JPY 3,234 million). (4) Forecast of Consolidated Financial Results and Other Forward-looking Statements Regarding the forecasts of consolidated financial results for the fiscal year ending March 31, 2027, as announced on May 15, 2026, we expect revenue of JPY 208,400 million, operating profit of JPY 27,200 million, profit before tax of JPY 26,000 million, and profit attributable to owners of parent of JPY 18,600 million. In terms of the forecasts of consolidated financial results for the fiscal year ending March 31, 2027, as follows. Revenue Operating profit Profit before tax Profit attributable to owners of parent Basic earnings per share Millions of yen Millions of yen Millions of yen Millions of yen Yen Fiscal year ending March 31, 2027 208,400 27,200 26,000 18,600 161.08
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―7― 3． Condensed Quarterly Consolidated Financial Statements and Selected Notes (1) Condensed Quarterly Consolidated Statements of Income and Condensed Quarterly Consolidated Statements of Comprehensive Income （Condensed Quarterly Consolidated Statements of Income） Millions of yen (except per share data) Three months ended June 30, 2025 Three months ended June 30, 2026 Continued Operations Revenue 49,511 51,622 Cost of sales (34,074) (36,546) Gross profit 15,438 15,076 Selling, general and administrative expenses (6,032) (7,020) Research and development expenses (2,420) (2,974) Other income 20 102 Other expenses (26) (230) Operating profit 6,979 4,953 Finance income 131 54 Finance expenses (308) (562) Profit before tax 6,802 4,445 Income tax expenses (1,947) (1,582) Profit for the period from continued operations 4,856 2,863 Discontinued Operation Profit (Loss) for the period from the discontinued operation 35 (433) Profit for the period 4,891 2,429 Profit attributable to: Owners of parent 4,891 2,429 Earnings (loss) per share (Yen) Basic earnings per share Continued operations 42.06 24.79 Discontinued operation 0.30 (3.75) Basic earnings per share 42.36 21.04 Diluted earnings per share Continued operations 41.92 24.71 Discontinued operation 0.30 (3.74) Diluted earnings per share 42.22 20.97
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―8― （Condensed Quarterly Consolidated Statements of Comprehensive Income） Millions of yen Three months ended June 30, 2025 Three months ended June 30, 2026 Profit for the period 4,891 2,429 Other comprehensive income Items that will not be reclassified to profit or loss: Changes in fair value of financial assets measured at fair value through other comprehensive income 48 (112) Items that may be reclassified to profit or loss: Exchange differences on translation of foreign operations (1) 1 Other comprehensive income for the period, net of tax 47 (112) Total comprehensive income for the period 4,938 2,318 Total comprehensive income attributable to: Owners of parent 4,938 2,318
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―9― (2) Condensed Quarterly Consolidated Statements of Financial Position Millions of yen As of March 31, 2026 As of June 30, 2026 Assets Current assets Cash and cash equivalents 28,989 26,059 Trade and other receivables 51,555 50,193 Inventories 117,607 125,577 Other financial assets 348 374 Other current assets 1,847 1,494 Total current assets 200,345 203,697 Non-current assets Property, plant and equipment 115,633 120,909 Intangible assets 29,667 29,921 Other financial assets 4,593 4,456 Other non-current assets 501 582 Deferred tax assets 9,180 9,414 Total non-current assets 159,574 165,282 Total assets 359,919 368,979
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―10― Millions of yen As of March 31, 2026 As of June 30, 2026 Liabilities and equity Liabilities Current liabilities Trade and other payables 49,088 47,797 Borrowings 14,675 39,822 Income taxes payable 1,781 2,059 Refund liabilities 1,155 1,596 Provisions 90 92 Other financial liabilities 6,022 6,077 Other current liabilities 8,123 4,215 Total current liabilities 80,934 101,657 Non-current liabilities Bonds and borrowings 90,348 79,145 Provisions 107 107 Other financial liabilities 9,285 9,747 Other non-current liabilities 673 654 Deferred tax liabilities 16 16 Total non-current liabilities 100,429 89,670 Total liabilities 181,363 191,326 Equity Share capital 10,079 10,079 Capital surplus 4,564 4,577 Retained earnings 161,589 160,785 Treasury shares (3) (3) Other component of equity 2,327 2,215 Equity attributable to owners of parent 178,556 177,653 Total equity 178,556 177,653 Total liabilities and equity 359,919 368,979
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―11― (3) Condensed Quarterly Consolidated statements of Changes in Equity Three months ended June 30, 2025 Millions of yen Equity attributable to owners of parent Total equity Share capital Capital surplus Retained earnings Treasury shares Other component of equity Total Balance at April 1, 2025 10,053 37,767 157,257 (33,243) 2,020 173,854 173,854 Profit for the period 4,891 4,891 4,891 Other comprehensive income 47 47 47 Total comprehensive income － － 4,891 － 47 4,938 4,938 Retirement of treasury shares (33,240) 33,240 － － Dividends (3,117) (3,117) (3,117) Transfer to retained earnings from other component of equity 62 (62) － － Total transactions with owners － (33,240) (3,056) 33,240 (62) (3,117) (3,117) Balance at June 30, 2025 10,053 4,527 159,092 (3) 2,005 175,674 175,674 Three months ended June 30, 2026 Millions of yen Equity attributable to owners of parent Total equity Share capital Capital surplus Retained earnings Treasury shares Other component of equity Total Balance at April 1, 2026 10,079 4,564 161,589 (3) 2,327 178,556 178,556 Profit for the period 2,429 2,429 2,429 Other comprehensive income (112) (112) (112) Total comprehensive income － － 2,429 － (112) 2,318 2,318 Dividends (3,234) (3,234) (3,234) Share based payment － 13 13 13 Total transactions with owners － 13 (3,234) － － (3,221) (3,221) Balance at June 30, 2026 10,079 4,577 160,785 (3) 2,215 177,653 177,653
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―12― (4) Condensed Quarterly Consolidated Statements of Cash Flows Millions of yen Three months ended June 30, 2025 Three months ended June 30, 2026 Cash flows from operating activities Profit before tax 6,802 4,445 Profit (loss) before tax from the discontinued operation 35 (473) Depreciation and amortization 3,859 4,347 Impairment loss － 525 Financial income (44) (59) Financial expenses 356 471 Loss(gain) on sales of shares of subsidiaries and affiliates (35) 473 Profit on sale and disposal of property, plant and equipment and intangible assets 37 128 Decrease (increase) in trade and other receivables (2,441) 1,372 Increase in inventories (3,480) (7,970) Increase (decrease) in trade and other payables (160) 1,180 Increase in refund liabilities 643 440 Increase (decrease) in provisions (16,823) 2 Increase (decrease) in other financial liabilities 91 (42) Other (744) (3,481) Subtotal (11,905) 1,357 Interest received 0 0 Dividends received 41 52 Interest paid (276) (493) Income taxes paid (1,265) (1,343) Cash flows used in operating activities (13,405) (427) Cash flows from investing activities Acquisition of property, plant and equipment (2,399) (10,584) Sale of property, plant and equipment 6 0 Acquisition of intangible assets (5,983) (2,023) Proceeds from the sale of investment securities 107 － Purchase of shares of subsidiaries resulting in change in the scope of consolidation (301) － Payments from the sale of subsidiary shares involving a change in the scope of consolidation － (52) Other (28) (48) Cash flows used in investing activities (8,598) (12,706) Cash flows from financing activities Increase (decrease) in short-term borrowings 15,199 15,647 Repayments of long-term borrowings (1,086) (1,711) Payments of lease liabilities (438) (498) Dividends paid (3,117) (3,234) Others (13) (6) Cash flows generated from financing activities 10,545 10,197 Effect of exchange rate change on cash and cash equivalents (48) 6 Net decrease in cash and cash equivalents (11,505) (2,930) Cash and cash equivalents at beginning of the period 38,785 28,989 Cash and cash equivalents at end of the period 27,280 26,059
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―13― (5) Selected Notes to Condensed Quarterly Consolidated Financial Statements (Significant Uncertainty Regarding Going Concern Assumption) Not applicable (Discontinued Operation) The Company has recorded profit/loss related to the U.S. Business under the category of “discontinued operation.” (1) Discontinued Operation Millions of yen Three months ended June 30, 2025 Three months ended June 30, 2026 Discontinued Operation Revenue *1 35 － Expenses*1 － (473) Profit (loss) before tax on the discontinued operation 35 (473) Income tax expenses*2 (0) 39 Profit (loss) for the period on the discontinued operation 35 (433) Profit (loss) on the discontinued operation attributable to: Owners of parent 35 (433) *1 A gain of JPY 35 million on the transfer of the Company’s shares and interests in the U.S. subsidiary and affiliates was included in the first quarter of the fiscal year ended March 31, 2026, and expenses include a loss of JPY 473 million on the transfer of the Company’s shares and interests in the U.S. subsidiary and affiliates, which has been recorded in the first quarter of the fiscal year ending March 31, 2027. *2 Income tax expenses include tax expense related to gain (loss) on the transfer of the Company’s shares and interests in the U.S. subsidiary and affiliates of JPY 0 million in the first quarter of the fiscal year ended March 31, 2026 and JPY (39) million in the first quarter of the fiscal year ending March 31, 2027. (2) Cash flows from discontinued operation Millions of yen Three months ended June 30, 2025 Three months ended June 30, 2026 Cash flows from operating activities － － Cash flows from investing activities * － (52) Cash flows from financing activities － － Total － (52) * On April 2, 2024, the procedure of transferring all corresponding shares was completed. The following table shows the relationship between income and expenditure from the share transfer.
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―14― Millions of yen Three months ended June 30, 2025 Three months ended June 30, 2026 Consideration for the transfer * － (52) Proceeds from the transfer of shares in the consolidated subsidiary involving changes in the scope of consolidation － (52) * As for the consideration for the transfer, the final amount may change since the price adjustment clause and contingent consideration, are stipulated in the Share Transfer Agreement. (Segment Information) The operating segments of Sawai are the components for which separate financial information is available, and the Board of Directors, regularly examines the financial information in deciding how to allocate management resources, assessing the Group’s past performance and forecasting its future performance. The segment for the manufacturing and sale of pharmaceutical and other products mainly consist of five consolidated subsidiaries: Sawai Pharmaceutical, Kaken Shoyaku Co., Ltd. and Trust Pharmatech, which manufacture and sell generic pharmaceutical products, Medisa Shinyaku Inc., which sells generic pharmaceutical products, and FrontAct, which mainly manufactures and sells medical devices. The following table shows revenue for our key therapeutic category: Millions of yen Products Three months ended June 30, 2025 Three months ended June 30, 2026 Cardiovascular drugs 11,547 11,714 Other metabolic drugs 5,791 7,729 Central nervous system drugs 6,993 7,450 Gastro-intestinal drugs 5,570 5,373 Blood/body fluid pharmaceutical products 5,088 5,043 Antiallergic drugs 2,155 2,252 Antibiotics drugs 2,535 2,088 Antineoplastic agents 1,632 1,941 Vitamin preparations 1,801 1,783 Drugs for urogenital organs and the anus 1,350 1,584 Drugs for respiratory organs 1,925 1,457 Other 3,125 3,210 Total 49,511 51,622
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―15― (Events after Reporting Period) (1) Issuance of Unsecured Bonds On July 30, 2026, the Company issued its 4th Unsecured Bonds (with a limited inter-bond pari passu clause) as social bonds as follows: 1. Date of issuance: July 30, 2026 2. Total amount of bonds: JPY 10,000 million 3. Amount to be paid: 100 yen per bond with a face value of 100 yen 4. Interest rate: 3.441% per annum 5. Redemption method: Lump-sum redemption at maturity 6. Maturity date: July 30, 2036 7. Planned uses of funds: We plan to use the proceeds from bond sales to invest in and finance Trust Pharmatech, one of our subsidiaries, which in turn plans to use the entire amount by the end of September 2028 to fund capital investments (new expenditures and refinancing of existing expenditures) in production capacity expansion planned at Seima Plants No. 2 and No. 3 (Awara City, Fukui Prefecture). Furthermore, on May 22, 2026, the Board of Directors resolved that the Company conduct an absorption-type merger effective April 1, 2027, with Sawai Pharmaceutical, a consolidated and wholly owned subsidiary of the Company, as the surviving company, and Trust Pharmatech, also a consolidated and wholly owned subsidiary of the Company, as the dissolving company.