Ain Holdings Inc. · TSE:9627

Ain — Q2 FY4/17 Earnings Presentation

35 slides from Ain's earnings presentation, December 2016

  1. Slide 1: IR Presentation December 2016

    IR PRESENTATION December 2016

  2. Slide 2: Results Overview

    Results Overview © 2016 AIN HOLDINGS INC. All Rights Reserved. 1

  3. Slide 3: Consolidated P/L

    Consolidated P/L Net sales increased 9.3% year on year and decreased 7.3% against the plan reflecting 48 new store openings including M&As. Ordinary income decreased 12.1% year on year and decreased 15.8% against the plan due to the impact of dispensing fee revisions. FY4/16 2Q FY4/17 2Q FY4/17 2Q Y

  4. Slide 4: Dispensing Pharmacy Business (Consolidated)

    Dispensing Pharmacy Business (Consolidated) Net sales increased 8.7% year on year reflecting new store openings including M&As and full-year contribution of stores opened in the previous year. Net sales decreased 7.1% against the plan due to the decrease of average sales per prescription. Segment in

  5. Slide 5: Drug and Cosmetic Store Business (Consolidated)

    Drug and Cosmetic Store Business (Consolidated) Net sales increased 1.8% year on year by new store openings and sales growth of flagship stores. The ratio of gross profit to net sales year on year is improved by the active development of original products, however, segment income became ¥(384) milli

  6. Slide 6: Consolidated B/S

    Consolidated B/S Net cash became ¥1,559 million and shareholders’ equity ratio became 40.1% due to the decrease of debts from the end of FY4/16. (¥ million) (¥ million) End-FY4/16 End-FY4/17 2Q Assets Liabilities Assets Liabilities Current assets Current liabilities 66,744 Current assets Current lia

  7. Slide 7: Assets

    Assets Cash on hand and in banks increased and notes and accounts receivable decreased by the liquidation of receivables. Total asset decreased ¥3,041 million from the end of FY4/16. (¥ million) End-FY4/16 2Q End-FY4/16 End-FY4/17 2Q Change Cash on hand and in banks 30,806 22,647 23,012 +365 Notes a

  8. Slide 8: Liabilities and Net Assets

    Liabilities and Net Assets Total liabilities decreased ¥4,678 million from the end of FY4/16 due to the decrease of accounts payable, etc. (¥ million) End-FY4/16 2Q End-FY4/16 End-FY4/17 2Q Change Accounts payable 36,279 39,987 37,693 (2,294) Short-term debt 17,607 5,690 7,584 +1,894 Lease obligatio

  9. Slide 9: Consolidated C/F

    Consolidated C/F (¥ million) End-FY4/16 2Q End-FY4/17 2Q Change Net cash provided by operating activities 9,221 6,090 (3,131) Profit before income taxes 5,825 5,298 (527) Depreciation and amortization 1,417 1,753 +336 Amortization of goodwill 1,339 1,660 +321 Increase (decrease) in accounts receivab

  10. Slide 10: Business Value Analysis

    Business Value Analysis End-FY4/16 2Q End-FY4/16 End-FY4/17 2Q Change Shareholders’ equity ratio (%) 37.6 38.1 40.1 +2.5 Market value equity ratio (%) 136.6 121.0 164.3 +27.7 PER (times) - 21.39 - - EPS (¥) 103.93 249.69 90.07 (13.86) PBR (times) 3.65 3.19 4.11 +0.46 BPS (¥) 1,584.87 1,679.69 1731.6

  11. Slide 11: FY4/17 Plan (Consolidated)

    FY4/17 Plan (Consolidated) We will absorb the non-achievement of first half of the year by acceleration of new openings and response to dispensing fee revisions. We expect the achievement of FY4/17 plan. FY4/15 FY4/16 FY4/17 YoY YoY (¥ million) results results plan change change (%) Net sales 187,90

  12. Slide 12: Operating Outlook

    Operating Outlook © 2016 AIN HOLDINGS INC. All Rights Reserved. 11

  13. Slide 13: 2Q Review

    2Q Review © 2016 AIN HOLDINGS INC. All Rights Reserved. 12

  14. Slide 14: 2Q Review: Net Sales and Ordinary Income vs Plan

    2Q Review Net Sales vs Plan Dispensing Pharmacy Business (6.4)% ¥(7.98)billion (7.3)% Average prescription price (4.8)% Prescription volume (1.2)% Drug and Cosmetic Store Business ¥(9.15)billion (0.4)% ¥(0.55)billion Other Business (0.5)% ¥(0.62)billion Ordinary Income vs Plan Dispensing Pharmacy Bu

  15. Slide 15: Non-Achievement of Net Sales Factors

    2Q Review Non-Achievement of Net Sales : Factor① (¥ billion) Hepatitis C Drugs 2.0 Net sales 1.5 FY17/4 Plan 1.0 FY17/4 Results Decrease of drug prices due to special drug price revisions 0.5 FY16/4 Results Decrease of hepatitis C drugs usage 0.0 May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar

  16. Slide 16: For Achievement of FY4/17 Plan

    For Achievement of FY4/17 Plan © 2016 AIN HOLDINGS INC. All Rights Reserved. 15

  17. Slide 17: Acceleration of New Store Openings and Dispensing Fee Increase

    For Achievement of FY4/17 Plan Acceleration of New Store Openings Vs plan 1,102 stores +101stores (April 2017, forecast) Opening : +115 stores Closing : (14) stores Increase of Dispensing Fee Technical fee Vs plan +3.6% +¥1.6billion © 2016 AIN HOLDINGS INC. All Rights Reserved. 16

  18. Slide 18: New Store Openings in Dispensing Pharmacy

    For Achievement of FY4/17 Plan Acceleration of New Store Openings Vs plan 1,102 stores +101stores (April 2017, forecast) FY4/17 Forecast No. of new store openings 250 235 In dispensing pharmacy 195 200 159 142 Vs plan 150 +115 stores 100 76 120 53 55 62 50 27 24 FY4/17 Plan 0 FY4/09 FY4/10 FY4/11 FY

  19. Slide 19: Basic Dispensing Fee per Prescription

    For Achievement of FY4/17 Plan Increase of Dispensing Fee Increase of Store Openings (¥ billion) 5.0 FY4/17 Results・Forecast 4.5 Technical fee 4.0 FY4/17 Plan 3.5 FY4/16 Results 3.0 0 2.5 May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Aggregated the data from all pharmacies in AIN GROUP

  20. Slide 20: Dispensing System Premiums and Generic Drug Premiums

    For Achievement of FY4/17 Plan Increase of Dispensing Fee Standards for Dispensing System Premiums (¥) 180 FY4/17 Results・Forecast Average price of standards for 160 dispensing system premiums FY4/16 Results 140 FY4/17 Plan 120 100 80 60 0 Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb.

  21. Slide 21: FY4/17 Plan (Consolidated)

    For Achievement of FY4/17 Plan FY4/17 Plan (Consolidated) FY4/15 FY4/16 FY4/17 YoY YoY (¥ million) results results plan change change (%) Net sales 187,904 234,843 265,000 +30,157 +12.8 Gross profit 28,961 38,535 44,200 +5,665 +14.7 % of net sales 15.4 16.4 16.7 SG&A expenses 17,509 23,915 27,900 +3

  22. Slide 22: AINZ & TULPE New Stores

    AINZ＆TULPE ainz & tulpe KITASENZYU MARUI Location Adachi-ku,Tokyo Open day December 9, 2016 413㎡ Sales floor 1 floor No.of Items 15,000SKU ainz & tulpe Colette Mare SAKURAGICHO Yokohama-shi, Location Kanagawa Open day December 15, 2016 1,030㎡ Sales floor 1 floor No.of Items 22,000SKU © 2016 AIN HOLD

  23. Slide 23: AINZ & TULPE Model Change

    AINZ＆TULPE Model Change ainz & tulpe ainz ■LIPS & HIPS (L&H) 3 stores 17stores 8 stores 42stores 47stores FY4/14 FY4/17 Plan FY4/14 FY4/15 FY4/16 December,2016 FY4/16 Forecast No.of store openings 3 3 5 5 12 ・MARUI CITY ・Colette Mare ・GINZA2 YOKOHAMA SAKURAGICHO-B1 ・SANNOMIYA ・SHINJUKU ・SANNOMIYA ・S

  24. Slide 24: AINZ & TULPE Changes in Profit Structure

    AINZ＆TULPE Changes in Profit Structure Vs FY4/14 Gross profit improvement rate +6.0% (¥ billion) 0.2 20% Average inventory amount Gross profit improvement ratio Average inventory amount (15)% Average monthly sales 0.15 0.13 0.1 0.1 10% 0.07 Average monthly sales +40% Gross profit 0 improvement ratio

  25. Slide 25: AINZ & TULPE Plan of Store Openings

    AINZ＆TULPE Plan of Store Openings (¥ billion) Net sales 50.0 50.0 100.0% 41.0 to net sales Ratio of gross profit 40.0 80.0% 33.0 Net sale 30.0 60.0% 20.8 22.5 42.0% 17.8 40.0% 20.0 40.0% 37.1% 39.2% 10.0 33.1% 34.6% Ratio of gross 20.0% profit to net sales 0.0 0.0% FY4/15 FY4/16 FY4/17 FY4/18 FY4/19

  26. Slide 26: Supplementary Information

    Supplementary Information © 2016 AIN HOLDINGS INC. All Rights Reserved. 25

  27. Slide 27: Validation of Net Sales & Ordinary Income

    Validation of Net Sales & Ordinary Income  Year-on-Year  Vs Plan FY4/16 2Q FY4/17 2Q YoY FY4/17 2Q FY4/17 2Q Vs plan (¥ million) results results change(%) (¥ million) plan results (%) Net sales 106,924 116,844 +9.3 Net sales 126,000 116,844 (7.3) Ordinary income 6,084 5,346 Ordinary income 6,350 5

  28. Slide 28: Validation of Net Sales by Period of Store Openings

    Validation of Net Sales by Period of Store Openings  Dispensing Pharmacy Business (YoY)  Dispensing Pharmacy Business (Vs plan) Average Average Prescription Prescription Net sales prescription Net sales prescription (%) volume (%) volume price price Same store(719) (3.6) (0.9) (2.7) Same store(719

  29. Slide 29: Dispensing Fee Revisions of 2016

    Dispensing Fee Revisions of 2016 Before Points After Points Except following 41(31) 1 Except following 41(31) Over 4,000 times and over 70% 2 or Over 2,000 times and over 90% 25(19) Basic dispensing fee Over 4,000 times and over 70% 25(19) or Over 4,000 times from specific hospital Over 2,500 times

  30. Slide 30: Response to Dispensing Fee Revisions ①

    Response to Dispensing Fee Revisions ① (¥) After Points March April Change October Change After (March 2017) Change Promotion to Except following 41 receive 1 prescriptions (31) from hospitals that are not Over 4,000 times and over 70% located near our Basic dispensing or Over 2,000 times and over 9

  31. Slide 31: Response to Dispensing Fee Revisions ②

    Response to Dispensing Fee Revisions ②  Ratio of stores that receive basic dispensing fee  Ratio of stores that receive standards for dispensing system premiums March,2017 March,2017 March,2016 April October (Plan) March,2016 April October (Plan) Basic Basic dispensing 567 dispensing 353 361 395 1

  32. Slide 32: FY4/17 Plan (Dispensing Pharmacy Business)

    FY4/17 Plan (Dispensing Pharmacy Business) FY4/16 FY4/17 YoY YoY Breakdown of plan results plan change change(%) (¥ million) Net sales 211,009 236,100 +25,091 +11.9 ■ Net Sales FY4/17 YoY (¥ million) plan change(%) Gross profit 30,268 32,480 +2,212 +7.3 Same store(730) 191,745 (1.0) Dispensing pharm

  33. Slide 33: FY4/17 Plan (Drug and Cosmetic Store Business)

    FY4/17 Plan (Drug and Cosmetic Store Business) FY4/16 FY4/17 YoY YoY Breakdown of plan results plan change change(%) (¥ million) Net sales 20,884 22,500 +1,616 +7.7 ■ Net Sales FY4/17 YoY (¥ million) plan change(%) Gross profit 7,236 8,350 +1,114 +15.4 % of net sales 34.6 37.1 Same store(47) 17,700

  34. Slide 34: Inquiries: AIN HOLDINGS INC. Corporate Planning Division

    Inquiries related to this presentation should be addressed to AIN HOLDINGS INC. Corporate Planning Division TEL(81)11-814-0010 FAX(81)11-814-5550 http://www.ainj.co.jp/ This document may not be reproduced or distributed to any third party without prior approval of AIN HOLDINGS INC. This document has

  35. Slide 35: AIN GROUP

    AIN GROUP

AIN Holdings — Q2 FY4/17 Earnings Presentation on 6ix