Slide 1: Financial Results for FYE May 2020
Financial Results for FYE May 2020 July 17, 2020 The earnings forecasts in this document are based on the business environment as of the time of writing. Actual results may differ from projections due to a variety of factors. Note also that inquiries should be submitted in Japanese. Inquiries: Hiron
Slide 2: Agenda
Impact of COVID-19 1. Trends in Demand 2. Impact on Operations and Store Openings 3. Actions Taken for Employees and Support for Regional Hospitals FYE May 2020 Results 1. Statement of Income 2. Balance Sheet 3. Store Openings/Closings 4. New Format Stores 5. Cashless Transactions 6. Performance Hig
Slide 3: Impact of COVID-19
Impact of COVID-19 3
Slide 4: 1. Trends in Demand
1. Trends in Demand ■Drug stores Product demand Location ・Products related to preventing infection (masks, disinfectant products, hand soap) Positive Suburban type ・Food and other shut-in products factors Residential area ・Surging demand from hearsay, etc. (paper products, women’s products, etc.) Ur
Slide 5: 2. Impact on Operations and Store Openings
2. Impact on Operations and Store Openings ■Store operations ・Shortening of operating hours (1) April 8 onward: Almost all stores closed at 8 p.m. (9 p.m. beginning on June 1) (2) May 11 onward: Some prescription drug stores shortened operating hours and added non-business days — 72 stores (back to
Slide 6: 3. Actions Taken for Employees and Support for Regional Hospitals
3. Actions Taken for Employees and Support for Regional Hospitals ■ Actions taken for employees ・ To prevent spread of infection at stores/drug stores: (1) Distribution of masks to employees (2) Measures to prevent infection at registers and dispensing counters Sneeze guards, no direct passing of ca
Slide 7: FYE May 2020 Results
FYE May 2020 Results 7
Slide 8: 1. Consolidated Statement of Income for FYE May 2020
1. Consolidated Statement of Income for FYE May 2020 FYE May 2019 FYE May 2020 Results Results YoY Share Share Vs target (Millions of yen) (%) (Millions of yen) (%) change (%) (%) Net sales 286,299 100.0 319,588 100.0 111.6 103.9 Gross profit 78,953 27.6 88,986 27.8 112.7 104.6 SG&A expenses 64,711
Slide 9: 2. Consolidated Balance Sheet for FYE May 2020
2. Consolidated Balance Sheet for FYE May 2020 (Millions of yen) May 31, 2019 May 31, 2020 Change Total assets 133,315 153,423 +20,108 Current assets 75,763 87,162 +11,398 Non-current assets 57,551 66,261 +8,709 Total liabilities 56,426 66,646 +10,220 Current liabilities 50,718 59,595 +8,877 Non-cur
Slide 10: 3. Store Openings/Closings
3. Store Openings/Closings ■Store openings/closings, etc. ・Openings: 28 drug stores (45 planned) / 23 prescription drug stores (30 planned) ・Subsidiary acquisitions: 5 food supermarkets from acquisition of Yurigaoka Sangyo Kanagawa Tokyo Shizuoka Chiba Aichi Total Drug store 15 1 5 5 2 28 Store open
Slide 11: 3. Store Openings/Closings: Number of stores at year end
3. Store Openings/Closings ■Number of stores at year end Kanagawa Tokyo Shizuoka Chiba Saitama Aichi Other Total Drug stores 351 100 88 44 15 16 11 625 In-store pharmacies 122 32 18 12 2 8 2 196 Rate of in- May 31, store 34.8% 32.0% 20.5% 27.3% 13.3% 50.0% 18.2% 31.4% 2020 pharmacies No. of Dedicate
Slide 12: 4. New Format Stores
4. New Format Stores ■ Cremo openings: 2 stores Year end: 8 stores Across Plaza Ichihara Sarashina Store (Chiba) Hamamatsu Plaza Frespo Store (Shizuoka) ■ Store openings in collaboration with other business categories: 2 stores Year end: 5 stores Hadano Taishincho Store (Kanagawa): Abiko Tennodai St
Slide 13: 5. Cashless Transactions
5. Cashless Transactions ■Promote use of Osaifu Hippo ・Switchover/introduction completed at all stores by end of August 2019 ・Refill and payment possible using official app as of November 2019 ■QR code payment ・Available at all stores as of May 2020 Percentage in brackets is total cashless 40.2% 42.
Slide 14: 6. Performance Highlights: Net sales
6. Performance Highlights Net sales ■ Up 11.2％ YoY (Up 3.5% vs target) Up 5.1％ YoY at existing stores ・1H at existing stores: Up 2.4% YoY 2H at existing stores: Up 7.7% YoY ・Prescriptions were down sharply due to drug price revisions and the spread of COVID-19, but double-digit growth was maintained
Slide 15: 6. Performance Highlights: Net sales
6. Performance Highlights Net sales ・By segment, sales were up in specialized prescription and infection-related categories ・Prescriptions were up 0.5 pts to 9.2% as a percentage of sales FYE May 2019 Results FYE May 2020 Results Net sales Net sales YoY change Share (%) Share (%) (millions of yen) (
Slide 16: 6. Performance Highlights: Gross profit margin/SG&A ratio
6. Performance Highlights Gross profit margin/SG&A ratio ■Gross profit margin: 28.0％ Up 0.2 pts YoY Up 0.2 pts vs target ・Prescriptions were up as a percentage of sales ・Gross profit margin improved with voluntary suspension of sales promotions ・Gross profit margin improved with increase in sales of
Slide 17: 6. Performance Highlights: Dispensing department
6. Performance Highlights Dispensing department ・Prescriptions were down due to two drug price revisions and the spread of COVID-19, but double-digit growth was maintained Sales at all stores: Up 17.6% YoY Sales at existing stores: Up 12.8% YoY FYE May 2019 FYE May YoY FYE May YoY FYE May 2020 YoY F
Slide 18: 6. Performance Highlights: Dispensing department, home-based services
6. Performance Highlights Dispensing department ■Expansion of home-based dispensing services ・No. of stores offering home-based dispensing services at year end: 135 stores (up 13 from previous year) ・No. of at-home patients supported: 3,432 people (May 2020 results, up 79 from previous year) ■ Premi
Slide 19: 6. Performance Highlights: Dispensing department, family pharmacist
6. Performance Highlights Dispensing department ■“Family pharmacist” initiative ・Shift of focus from objects to people ・No. of “family pharmacists” with track records: 90 (up 52 from previous year) ■Initiative to shift to online operations ・Medicinal e-pocketbook app with prescription transmission f
Slide 20: 7. Dividends
7. Dividends (Yen) (Planned) Initial target 38 yen ・Continuous increase of dividend per share Up 2 yen vs target in FYE May 2020 and up 4 yen from previous year to 40 yen 20
Slide 21: FYE May 2021 Plan
FYE May 2021 Plan 21
Slide 22: 1. New Store Openings/Renovation of Existing Stores
1. New Store Openings/Renovation of Existing Stores ■Drug stores: 43 stores Drug stores 625 ・Pursuit of dominance in existing areas In-store pharmacies 196 ・Collaboration with different business categories May 31, 2020 Rate of in-store pharmacies 31.4% No. of Stores Dedicated prescription drug 34 ■P
Slide 23: 2. Peri-/Post-COVID-19 Sales Measures
2. Peri-/Post-COVID-19 Sales Measures Changes ・Lowering of prices ・Prevention of “three Cs” (in sales promotions) ・Non-contact (cashless) ■Strengthening of EDLP and PB ・Price of around 200 items lowered starting in July ・Level out sales by switching from sales promotions that attract customers on sp
Slide 24: 3. Productivity Improvement
3. Productivity Improvement ■Drug stores ・Increase accuracy of assisted orders with better demand prediction utilizing AI ・Expand introduction of semi-self-checkout registers at stores ■Prescription drug stores ・Introduction of dispensing equipment ・Promote active roles for medical assistants (suppo
Slide 25: 4. Enhanced Professionalism
4. Enhanced Professionalism ■Health care/dispensing promotion ・Achieve 50% rate of in-store pharmacies quickly ・Promote active role of nutritionists ⇒ Train nutritionists as health care staff ■Expansion of pharmacies partnered with regional medical institutions ・Train “family pharmacists” – No. of “
Slide 26: 5. Targets for Consolidated Performance for FYE May 2021
5. Targets for Consolidated Performance for FYE May 2021 Impact of COVID-19 is expected to remain (even if decreasing) through 1H (November 2020). FYE May 2020 FYE May 2021 (Results) (Targets) Share Share YoY change (Millions of yen) (Millions of yen) (%) (%) (%) Net sales 319,588 100.0 333,700 100.