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 . Consolidated Financial Results for the Three Months Ended June 30 , 2026 ( Under Japanese GAAP ) Company name : Menicon Co. , Ltd. Listing : Tokyo Stock Exchange , Nagoya Stock Exchange Securities code : 7780 Representative : Koji Kawaura URL : https://www.menicon.com Inquiries : Hideki Koga Telephone : + 81-52-935-1515 Scheduled date to commence dividend payments : - Preparation of supplementary material on financial results : Yes Holding of financial results briefing : Yes August 7 , 2026 President and CEO Senior Executive Officer , Corporate Management , CFO FASF ( Yen amounts are rounded down to millions , unless otherwise noted . ) 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 . ) Profit attributable to owners of parent Net sales Operating profit Three months ended June 30 , 2026 Millions of yen 32,376 % June 30 , 2025 Note : Comprehensive income 30,251 7.0 0.3 Millions of yen 3,429 % 1,961 74.9 ( 26.9 ) Ordinary profit Millions of yen 3,361 % Millions of yen % 1,768 90.1 ( 35.6 ) 2,230 124.9 991 ( 43.8 ) For the three months ended June 30 , 2026 : For the three months ended June 30 , 2025 : ¥ 3,182 million [ 180.6 % ] ¥ 1,134 million [ ( 76.7 ) % ] Basic earnings per share Diluted earnings per share Three months ended June 30 , 2026 June 30 , 2025 Yen 30.05 13.05 Yen 29.89 12.99 ( 2 ) Consolidated financial position As of June 30 , 2026 March 31 , 2026 Total assets Net assets Equity - to - asset ratio Millions of yen 203,359 194,640 Millions of yen 96,246 % 47.0 95,106 48.5 ¥ 95,535 million ¥ 94,349 million Reference : Equity As of June 30 , 2026 : As of March 31 , 2026 :
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2. 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 - 0.00 - 28.00 28.00 March 31, 2026 Fiscal year ending - March 31, 2027 Fiscal year ending March 31, 2027 (Forecast) 0.00 - 28.00 28.00 Note: Revisions to the forecast of dividends most recently announced: None 3. Consolidated financial result forecasts for the fiscal year ending March 31, 2027 (from April 1, 2026 to March 31, 2027) (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Full year 133,000 5.9 11,000 7.5 10,500 (4.7) 6,500 9.9 87.52 Note: Revisions to the financial result forecast most recently announced: None * Notes (1) Significant changes in the scope of consolidation during the period: Yes Newly included: 1 company( Inter-Optical Co., Ltd. ) Excluded: 1 company( Meni-one China Co., Ltd. ) (2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: Yes (3) Changes in accounting policies, changes in accounting estimates, and restatement (i) Changes in accounting policies due to revisions to accounting standards and other regulations: None (ii) Changes in accounting policies due to other reasons: None (iii) Changes in accounting estimates: None (iv) Restatement: None (4) Number of issued shares (common shares) (i) Total number of issued shares at the end of the period (including treasury shares) As of June 30, 2026 76,771,488 shares As of March 31, 2026 76,761,888 shares (ii) Number of treasury shares at the end of the period As of June 30, 2026 2,515,524 shares As of March 31, 2026 2,565,424 shares (iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year) Three months ended June 30, 2026 74,225,971 shares Three months ended June 30, 2025 76,014,200 shares (Note) The Company’s shares held by the “Employee Shareholding Association Support Trust ESOP ” are included in treasury shares, which are used in calculating the total number of treasury shares at the end of the period and deducted in calculating the average number of shares during the period.
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* 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 forecast figures stated above are forward -looking statements based on information available to the Company as of the date hereof and involve a number of uncertainties. Accordingly, actual results may differ materially from these forecast figures d ue to changes in business performance and other factors. For matters concerning the business performance forecast, please refer to "Explanation of Consolidated Financial Results Fore cast and Other Forward-looking Information" on Page 4 of the attached materials.
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―1― Table of contents of appendix 1. Qualitative Information on Quarterly Financial Results for the Period under Review ..................... 2 (1) Explanation of Business Results ................................................................................................................. 2 (2) Explanation of Financial Position ............................................................................................................... 3 (3) Explanation of Consolidated Business Results Forecast and Other Forward-looking Information ........... 4 2. Quarterly Consolidated Financial Statements and Notes ................................................................... 5 (1) Quarterly Consolidated Balance Sheet ....................................................................................................... 5 (2) Quarterly Consolidated Statements of Income and Comprehensive Income .............................................. 7 Quarterly Consolidated Statements of Income ............................................................................................. 7 (For the three months ended June 30) ........................................................................................................ 7 Quarterly Consolidated Statements of Comprehensive Income ................................................................... 8 (For the three months ended June 30) ........................................................................................................ 8 (3) Notes to Quarterly Consolidated Financial Statements .............................................................................. 9 Going concern assumption ........................................................................................................................... 9 Significant changes in amount of shareholders’ equity ................................................................................ 9 Application of Special Accounting Treatments for Preparing Quarterly Consolidated Financial Statements ..................................................................................................................................................... 9 Additional information ............................................................................................................................... 10 Notes to segment information..................................................................................................................... 11 Notes on consolidated statements of cash flows......................................................................................... 12
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―2― 1. Qualitative Information on Quarterly Financial Results for the Period under Review (1) Explanation of Business Results Under our Medium-Term Management Plan “Vision 2030,” we are promoting two growth strategies to realize our slogan, “New Vision of ‘Miru’ for the World”. With (i) the “1-DAY Strategy,” we aim to become a leading global player in the 1-DAY contact lens market through original products and services, and with (ii) the “Orthokeratology -related (Myopia Control-related) Strategy,” we aim to become a leading company in the orthokeratology-related (myopia control-related) field by creating new value in myopia control. Performances in each business are as follows. [Vision Care Business] Regarding the 1 -DAY lens Strategy, the global contact lens market is experiencing increasing demand for daily disposable contact lenses made of high-safety silicone hydrogel materials, driven by factors such as the increasing myopic population. In Japan, we are implementing promotional initiatives for daily disposable contact lenses with the aim of expanding sales volume working to increase the proportion of daily disposable contact lenses among MELS Plan members . Overseas, based on sales strategies tailored to the characteristics of each region, we are promoting the expansion of business with major retail chains. In addition, we are working to expand the production capacity of daily disposable contact lenses at Menicon Malaysia Sdn. Bhd., our new manufacturing base. During the three months ended June 30, 2026,, in Japan, supported by increased product supply, we strengthened product sales of daily disposable contact lenses through retail sales channels , opened new directly operated stores, and strengthened our sales base through the acquisition of shares of Inter -Optical Co., Ltd., which operates a contact lens business in Sendai City. In Europe, we expanded business for daily disposable contact lenses with major retail chains. In Southeast Asia, we launched sales of these lenses in Vietnam. In China, we improved the product lineup of these lenses through specialized online contact lens retailers. Regarding the Orthokeratology-related (Myopia Control-related) Strategy, although competition in China has intensified due to the economic slowdown, the emergence of alternative products, and increasing competition in the market , we have continued efforts to strengthen sales of orthokeratology lenses and care products used with orthokeratology lenses. On the other hand, demand has been expanding in Japan, other Asian countries, and Europ e, and further growth is expected. We offer a broad lineup of orthokeratology lenses , including "Alpha Ortho-K" (marketed as "Menicon Ortho -K" in the Japanese market), which has achieved steady sales in Japan and other Asian countries, "Menicon Z Night," for which we are strengthening sales in Europe and Asian countries, and "Menicon Bloom Night," which bears the CE Mark for myopia control and is expected to achieve further sales growth primarily in Europe, we aim to expand sales together with care products. During the three months ended June 30, 202 6, in China, we worked to maintain our market share by strengthening relationships with our business partners. In Japan, we expanded our sales base by leveraging our subscription model. In Southeast Asia, we launched sales of orthokeratology lenses in Vietnam. [Other Business] The Healthcare and Life Care Business is engaged in the healthcare field centered on self -assembling peptide gel technology, the life care field centered on the green infrastructure business, and the food business. During the first quarter under review, in the Healthcare field, we launched "Seers," an ophthalmic surgical visualization aid developed using self -assembling peptide gel technology. In the Life Care field, we continued to engage in the production and sale of turf grass as part of the green infrastructure business.
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―3― As a result of the initiatives described above, the consolidated operating results for the three months ended June 30, 2026 were as follows. Net sales increased 7.0% year on year to ¥32,376 million, driven by higher sales of daily disposable contact lenses through both retail channels and the MELS Plan in Japan and overseas. Operating profit amounted to ¥3,429 million, an increase of 74.9% year on year, reflecting an increase in gross profit resulting from higher net sales, as well as adjustments to the cost structure within selling, general and administrative expenses. Ordinary profit increased 90.1% year on year to ¥3,361 million, mainly due to the recognition of foreign exchange gains. As a result of the above factors, profit attributable to owners of parent increased 124.9% year on year to ¥2,230 million. Business results by segment are as follows: 1) Vision Care Business Net sales in the Vision Care Business amounted to ¥ 30,211 million, a 7.1% increase year on year, while segment profit amounted to ¥5,187 million, a 42.7% increase year on year. Details are as follows. Net sales in the Vision Care Business increased by ¥ 1,993 million year on year .Net sales of daily disposable contact lenses increased by ¥1,113 million, reflecting higher product sales in Japan and overseas and an increase in the number of MELS Plan members using daily disposable contact lenses. Net sales of orthokeratology -related products increased by ¥486 million, mainly due to higher sales of orthokeratology lenses in China and the impact of the depreciation of the yen. Net sales of Other Contact lenses and Lens care products increased, mainly due to expanded sales of monthly replacement contact lenses in Europe and increased sales of care products in Japan and North America. Segment profit increased by ¥1 ,551 million, reflecting an increase in gross profit resulting from higher net sales, primarily of daily disposable contact lenses. 2) Other Net sales in Other Businesses amounted to ¥2,165 million, a 6.5% increase year on year, mainly due to increased overseas sales in the food business. Segment loss amounted to ¥146 million (compared with a segment loss of ¥102 million in the same period of the previous year). (2) Explanation of Financial Position (Assets) Total assets as of the end of the three months period ended June 30, 2026 amounted to ¥203,359 million, an increase of ¥8,718 million from the end of the previous fiscal year. Current assets increased by ¥5,003 million to ¥83,982 million, mainly due to an increase in notes and accounts receivable - trade and an increase in cash and deposits as a result of additional borrowings . Non-current assets increased by ¥3,715 million to ¥119,376 million, mainly reflecting capital investment in contact lens manufacturing facilities at the Company. (Liabilities and net assets) Liabilities increased by ¥7,579 million from the end of the previous fiscal year to ¥107,113 million, mainly due to an increase in borrowings. Net assets increased by ¥1,139 million from the end of the previous fiscal year to ¥96,246 million, mainly due to the recording of profit attributable to owners of parent, despite the payment of dividends, as well as an increase in foreign currency translat ion adjustments related to overseas subsidiaries resulting from the depreciation of the yen. As a result, the equity ratio was 47.0%.
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―4― (3) Explanation of Consolidated Business Results Forecast and Other Forward-looking Information Regarding the consolidated business results for the first quarter of the fiscal year ending March 31, 2027, the performance was generally in line with expectations underlying the full-year consolidated financial forecasts. From the second quarter onward, we will continue to expand net sales, primarily of daily disposable contact lenses, and strive to achieve the full- year consolidated financial forecasts. Therefore, there are no changes to the full-year consolidated earnings forecasts for the fiscal year ending March 31, 2027, as announced on May 13, 2026.
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―5― 2. Quarterly Consolidated Financial Statements and Primary Notes (1) Quarterly Consolidated Balance Sheet (Millions of yen) As of March 31, 2026 As of June 30, 2026 Assets Current assets Cash and deposits 32,608 34,070 Notes and accounts receivable - trade 14,794 16,744 Merchandise and finished goods 19,744 20,975 Work in process 2,186 2,262 Raw materials and supplies 4,514 4,774 Other 6,118 6,136 Allowance for doubtful accounts (987) (980) Total current assets 78,978 83,982 Non-current assets Property, plant and equipment Buildings and structures 62,473 62,802 Accumulated depreciation (17,966) (18,533) Buildings and structures, net 44,506 44,269 Machinery, equipment and vehicles 39,039 40,493 Accumulated depreciation (21,817) (22,533) Machinery, equipment and vehicles, net 17,222 17,959 Tools, furniture and fixtures 13,981 14,270 Accumulated depreciation (10,570) (10,869) Tools, furniture and fixtures, net 3,411 3,401 Land 5,708 5,739 Leased assets 5,998 6,004 Accumulated depreciation (1,900) (2,042) Leased assets, net 4,098 3,961 Right of use assets 9,085 9,669 Accumulated depreciation (5,925) (6,124) Right of use assets, net 3,160 3,545 Construction in progress 16,679 19,493 Other 46 46 Accumulated depreciation - - Other, net 46 46 Total property, plant and equipment 94,833 98,417 Intangible assets Goodwill 2,768 2,927 Other 10,855 10,710 Total intangible assets 13,624 13,637 Investments and other assets Investment securities 1,135 1,323 Deferred tax assets 3,572 3,474 Other 3,048 3,093 Allowance for doubtful accounts (552) (569) Total investments and other assets 7,204 7,321 Total non-current assets 115,661 119,376 Total assets 194,640 203,359
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―6― (Millions of yen) As of March 31, 2026 As of June 30, 2026 Liabilities Current liabilities Notes and accounts payable - trade 5,753 5,979 Short-term borrowings 1,868 6,558 Current portion of bonds payable 1,167 1,083 Current portion of long-term borrowings 1,635 3,740 Lease liabilities 1,807 1,717 Accounts payable - other 6,110 5,489 Income taxes payable 2,076 1,355 Provision for bonuses 2,327 1,390 Provision for point card certificates 50 55 Other 6,410 8,895 Total current liabilities 29,206 36,267 Non-current liabilities Bonds payable 45,000 45,000 Long-term borrowings 17,288 17,783 Lease liabilities 5,414 5,669 Retirement benefit liability 628 638 Deferred tax liabilities 1,543 1,329 Other 451 424 Total non-current liabilities 70,326 70,845 Total liabilities 99,533 107,113 Net assets Shareholders' equity Share capital 5,650 5,659 Capital surplus 7,673 7,687 Retained earnings 68,226 68,365 Treasury shares (3,066) (2,994) Total shareholders' equity 78,484 78,718 Accumulated other comprehensive income Valuation difference on available-for-sale securities 577 704 Foreign currency translation adjustment 15,286 16,112 Total accumulated other comprehensive income 15,864 16,816 Share acquisition rights 696 649 Non-controlling interests 61 62 Total net assets 95,106 96,246 Total liabilities and net assets 194,640 203,359
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―7― (2) Quarterly Consolidated Statements of Income and Comprehensive Income Quarterly Consolidated Statement of Income (For the three months ended June 30) (Millions of yen) For the three months ended June 30, 2025 For the three months ended June 30, 2026 Net sales 30,251 32,376 Cost of sales 14,144 14,811 Gross profit 16,107 17,565 Selling, general and administrative expenses 14,146 14,136 Operating profit 1,961 3,429 Non-operating income Interest income 27 25 Dividend income 14 18 Foreign exchange gains - 62 Insurance contract change gain 70 - Other 82 67 Total non-operating income 195 173 Non-operating expenses Interest expenses 200 217 Foreign exchange losses 133 - Other 54 23 Total non-operating expenses 388 240 Ordinary profit 1,768 3,361 Extraordinary income Gain on sale of non-current assets 0 0 Reversal of foreign currency translation adjustment 15 1 Total extraordinary income 15 2 Extraordinary losses Loss on sale of non-current assets - 0 Loss on retirement of non-current assets 6 4 Total extraordinary losses 6 4 Profit before income taxes 1,776 3,359 Income taxes 784 1,128 Profit 992 2,231 Profit attributable to non-controlling interests 0 0 Profit attributable to owners of parent 991 2,230
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―8― Quarterly Consolidated Statement of Comprehensive Income (For the three months ended June 30) (Millions of yen) For the three months ended June 30, 2025 For the three months ended June 30, 2026 Profit 992 2,231 Other comprehensive income Valuation difference on available-for-sale securities 14 126 Foreign currency translation adjustment 127 825 Total other comprehensive income 141 951 Comprehensive income 1,134 3,182 Comprehensive income attributable to Comprehensive income attributable to owners of parent 1,133 3,182 Comprehensive income attributable to non-controlling interests 0 0
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―9― (3) Notes to Quarterly Consolidated Financial Statements Going concern assumption Not applicable. Significant changes in amount of shareholders’ equity Not applicable. Application of Special Accounting Treatments for Preparing Quarterly Consolidated Financial Statements (Calculation of tax expenses) Tax expenses are calculated by reasonably estimating the effective tax rate after applying tax-effect accounting to profit before income taxes for the full fiscal year including the quarterly period under review and multiplying profit before income taxes by the estimated effective tax rate. However, for companies where applying the estimated effective tax rate would lead to a significantly unreasonable outcome, the statutory effective tax rate is used instead, taking into account material additions and subtractions.
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―10― Additional information (Transaction to grant the Company’s shares to employees, etc. through a trust) We conducted transactions to grant the Company’s shares to the Employee Shareholding Association through a trust with the purpose of enhancing employee benefits and providing incentives for improving the Company’s corporate value. 1. Overview of Transaction We reintroduced the Employee Shareholding Association Support Trust ESOP (hereinafter, the “Plan”) for the Employee Shareholding Association in June 2024. It is an employee incentive plan similar to the Stock Benefit Trust (Employee Shareholder Association Purchase-Type) introduced in September 2021. The Plan is an employee benefit program designed mainly with reference to the Employee Stock Ownership Plan (ESOP), an employee compensation package widely used in the U.S. as part of an employee incentive plan, and the “Report on Company Stock Holding Sch emes” released by the Ministry of Economy, Trade and Industry of Japan on November 17, 2008. We will establish a trust in which members of the Shareholding Association who satisfy a certain set of requirements are beneficiaries, and the trust will acquire the number of the Company’s shares that the Shareholding Association is expected to acquire during the trust period within the predetermined share -acquisition period. Then, the trust will sell the Company’s shares to the Sharehold ing Association on the same day every month. If the trust has generated profits due to a rise in share prices or otherwise at the time of expiration of the trust, cash will be distributed to employees who satisfy the beneficiary requirements. If, on the other hand, the trust incurred a loss on transfer due to a decline in share prices and a debt pertaining to trust assets remains, there will be no additional burden on the part of employees as we will pay off the outstanding loan balance en bloc to the bank pur suant to warranty provisions of the non -recourse loan agreement. 2. Residual Company’s Shares Held in the Trust The residual Company’s shares held in the Trust are recorded at the book value in the trust (excluding incidental expenses) as treasury shares under net assets. The book value and number of shares of such treasury shares are ¥ 666 million and 512 thousand shares, respectively, for the previous fiscal year, and ¥ 624 million and 480 thousand shares, respectively, for the first quarter of the fiscal year under review. 3. Book Value of Borrowings Recorded Through the Application of Total Amount Method ¥645 million for the previous consolidated fiscal year, ¥595 million for the first quarter of the fiscal year under review
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―11― Notes to segment information For the three months ended June 30, 2025 1. Information on net sales and profit (loss) by reportable segment (Millions of yen) Reportable segment Others (Note) Total Vision Care Business Subtotal Net sales Net sales to external customers 28,217 28,217 2,034 30,251 Inter-segment net sales or transfers － － 0 0 Total 28,217 28,217 2,034 30,251 Segment profit (loss) 3,636 3,636 (102) 3,533 (Note) “Others” is a business segment not included in the reportable segment and includes the healthcare and life care businesses. 2. Differences between the total amount of profit or loss of the reportable segment and the amount stated in the consolidated statement of income, and major breakdown of such differences (Reconciliation) (Millions of yen) Profit Amount Reportable segment total 3,636 “Others” loss (102) Corporate expenses (Note) (1,572) Operating profit stated in the consolidated statement of income 1,961 (Note) Corporate expenses are mainly general and administrative expenses not attributable to the reportable segment. 3. Information on impairment loss of non-current assets, goodwill, etc. for the reportable segment (Significant impairment loss on non-current assets) Not applicable. (Significant change in amount of goodwill) Not applicable. (Significant gain on bargain purchase) Not applicable.
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―12― For the three months ended June 30, 2026 1. Information on net sales and profit (loss) by reportable segment (Millions of yen) Reportable segment Others (Note) Total Vision Care Business Subtotal Net sales Net sales to external customers 30,211 30,211 2,165 32,376 Inter-segment net sales or transfers － － 0 0 Total 30,211 30,211 2,165 32,376 Segment profit (loss) 5,187 5,187 (146) 5,041 (Note) “Others” is a business segment not included in the reportable segment and includes the healthcare and life care businesses. 2. Differences between the total amount of profit or loss of the reportable segment and the amount stated in the consolidated statement of income, and major breakdown of such differences (Reconciliation) (Millions of yen) Profit Amount Reportable segment total 5,187 “Others” loss (146) Corporate expenses (Note) (1,612) Operating profit stated in the consolidated statement of income 3,429 (Note) Corporate expenses are mainly general and administrative expenses not attributable to the reportable segment. 3. Information on impairment loss of non-current assets, goodwill, etc. for the reportable segment (Significant impairment loss on non-current assets) Not applicable. (Significant change in amount of goodwill) Not applicable. (Significant gain on bargain purchase) Not applicable. Notes on consolidated statements of cash flows Quarterly consolidated statements of cash flows for the three months ended June 30, 202 6 have not been prepared. Depreciation (including amortization pertaining to intangible assets excluding goodwill) and amortization of goodwill pertaining to the three months ended June 30, 2026 are as follows. (Millions of yen) For the three months ended June 30, 2025 For the three months ended June 30, 2026 Depreciation 2,242 2,447 Amortization of goodwill 158 147