Slide 1: FYE 5/2019 (6/18-5/19) Results Explanatory Meeting
FYE 5/2019 (6/18-5/19) Results Explanatory Meeting July 11, 2019 The earnings forecasts appearing in this material are based on the business environment at the present time, and there is the possibility that actual earnings may differ from forecasts for various reasons. Furthermore, only inquiries i
Slide 2: FYE 5/2019 Results and FYE 5/2020 Forecasts agenda
FYE 5/2019 Results 1. Profit and Loss Statement (Consolidated) 2. Balance Sheet (Consolidated) 3. New Store Openings 4. Renovation of Existing Stores 5. Performance Highlights 6. Profit and Loss Statement (Create SD) FYE 5/2020 Forecasts 1. New Store Openings 2. Revitalization of Existing Stores 3.
Slide 3: FYE 5/2019 Results
FYE 5/2019 Results 3
Slide 4: 1. Profit and Loss Statement (Consolidated)
1. Profit and Loss Statement (Consolidated) FYE 5/2018 FYE 5/2019 (consolidated) (consolidated) % of Share Share YoY change adjustment in projection (million yen) (million yen) (%) (%) (%) (%) Net sales 268,161 100.0 286,299 100.0 106.8 98.4 Gross profit 73,681 27.5 78,953 27.6 107.2 98.1 SG&A expen
Slide 5: 2. Balance Sheet (Consolidated)
2. Balance Sheet (Consolidated) End of FYE 5/2018 End of FYE 5/2019 Change (Consolidated) (Consolidated) Total assets 121,412 133,315 +11,902 Current assets 71,212 75,763 +4,551 Fixed assets 50,200 57,551 +7,351 Total liabilities 52,035 56,426 +4,391 Current liabilities 47,019 50,718 +3,699 Fixed li
Slide 6: 3. New Store Openings
3. New Store Openings OTC: 44 store openings (plan: 52 stores) / Prescription drug stores: 25 store openings (plan: 25 stores) Kanagawa Tokyo Shizuoka Chiba Other Total FYE May 2019 OTC 23 6 7 4 4 44 Number of In-store store openings pharmacies 15 5 2 1 2 25 Store closures OTC: 4 stores Contract e
Slide 7: 3. New Store Openings: Cremo and Joint Store Openings
3. New Store Openings ■Cremo: 2 stores ■ Joint Store Openings with Other Types of Business: 2 stores ・ Attract specialty stores handling 3 types of perishables inside Create stores 7
Slide 8: 4. Renovation of Existing Stores
4. Renovation of Existing Stores OTC: 30 stores • Focus on health & beauty: 11 stores (1) Renovation of non-food stores and shopping center stores (2) Renew old types of MD • Optimization of perishables sections: 19 stores Increase or decrease perishables sections flexibly depending on store l
Slide 9: 5. Performance Highlights: Net Sales
5. Performance Highlights Net Sales 106.8% vs. previous year (98.4% vs. plan), 99.7% vs. previous year for existing stores • Reverse effect owing to discount coupon-based sales promotion in previous June/December • Slump in sales of seasonal products due to adverse weather, including heatwave and
Slide 10: 5. Performance Highlights: Net Sales by Category
5. Performance Highlights Net Sales ・ Sales by segment are driven by specialties (prescriptions) and convenience (foods) ・ Prescription Department’s sales composition ratio increased 0.6 points to 8.7% FYE 5/2018 FYE 5/2019 Net sales Share Net sales Share YoY change (million yen) (%) (million yen) (
Slide 11: 5. Performance Highlights: Gross Profit Ratio
5. Performance Highlights Gross Profit Ratio Gross profit ratio 27.8% +0.1 point vs. previous year, 0.0 points vs. plan <Improvement factors> • Review of sales promotion measures (switch from discount coupon-based sales promotion to points- based sales promotion to maintain frequency of store vis
Slide 12: 5. Performance Highlights: SG&A Ratio
5. Performance Highlights SG&A Ratio SG&A ratio 23.08% +0.31 points vs. previous year, -0.05 points vs. plan Personnel expense ratio: 11.94%, +0.19 points vs. previous year, -0.14 points vs. plan Other expense ratio: 11.14%, +0.12 points vs. previous year, +0.10 points vs. plan <Personnel expense
Slide 13: 5. Performance Highlights: Prescription Department
5. Performance Highlights Prescription Department • Prescription drug unit prices fell due to the NHI price revisions • The number of prescriptions remained strong due to the widespread acceptance of prescriptions • Gross profit ratios are improving due to dispensing fee revisions FYE May 2018 FYE M
Slide 14: 5. Performance Highlights: Prescription Department
5. Performance Highlights Prescription Department ■ Number of stores with local support system premiums: 71stores（+19stores vs. previous year ） March 30, 2018 FYE May 2018 FYE May 2019 55 52 71 125 133 137 32点 32points 0点 0points 35points 35点 0points 0点 35points 35点 0points 0点 ■ Generics usage rate:
Slide 15: 5. Performance Highlights: Prescription Department
5. Performance Highlights Prescription Department Promotion of regional medical collaboration • Attract regionally required medical institutions Increase in the number of • Obtain externally dispensed prescriptions prescriptions per store • Follow-up activities after the closure of pharmacies loca
Slide 16: 6. Profit and Loss Statement (Create SD)
6. Profit and Loss Statement (Create SD) FYE 5/2018 FYE 5/2019 % of Share Share YoY change adjustment (million yen) (million yen) in projection （％） （％） (%) (%) Net sales 266,233 100.0 284,270 100.0 106.8 98.4 Gross profit 73,663 27.7 78,915 27.8 107.1 98.1 SG&A 60,619 22.8 65,612 23.1 108.2 98.2 exp
Slide 17: FYE 5/2020 Forecasts
FYE 5/2020 Forecasts 17
Slide 18: 1. New Store Openings
1. New Store Openings OTC: 45 stores • Carry out dominant store openings in areas where existing stores are located (1) 50% in Kanagawa (2) Focus on Tokyo, Chiba, and eastern Shizuoka • Continue to open new types of stores 2 Cremo stores/2 joint store openings with other types of business Pr
Slide 19: 2. Revitalization of Existing Stores
2. Revitalization of Existing Stores Renovation: 35 stores • Improve lineups at old types of stores Change retail space allocations and lineups to those for new stores Retail space allocations that are suitable for locations and in line with regional needs • In-store prescription drug stores • R
Slide 20: 3. Sales Measures
3. Sales Measures Promote cashless transactions and handle consumption tax hikes • Introduce “Osaifu Hippo,” a points card with e- money functions Improve customer convenience and reduce money management burdens (1) Attract and keep good customers (2) Increase customer visit frequencies and mont
Slide 21: 4. Productivity Improvement
4. Productivity Improvement Measures to improve the productivity of OTC operations • Continue to enhance accuracy of computer-assisted ordering • Expiration date management system Improve expiration date management and reduce the burden of carrying out confirmations by introducing the system at
Slide 22: 5. Initiatives by Prescription Drug Stores
5. Initiatives by Prescription Drug stores Strengthen health care support functions • Train family pharmacists Increase family pharmacists who can add consultancy fees and applicable stores • Increase stores that are added to the regional support system Collaboration with reginal medical insti
Slide 23: 6. FYE 5/2020 Forecasts (Consolidated)
6. FYE 5/2020 Forecasts (Consolidated) FYE 5/2019 FYE 5/2020 (consolidated) (consolidated) YoY Share Share (million yen) (million yen) change （％） （％） (%) Net sales 286,299 100.0 307,600 100.0 107.4 Gross profit 78,953 27.6 85,050 27.6 107.7 SG&A expenses 64,711 22.6 70,080 22.8 108.3 Operating profi