Slide 1: FYE 5/2018 (6/17-5/18) Results Explanatory Meeting
FYE 5/2018 (6/17-5/18) Results Explanatory Meeting July 13, 2018 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 5/2018 Results and FYE 5/2019 Forecasts agenda
FYE 5/2018 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 5/2019 Forecasts 1. Store Opening Strategy 2. Store Openings and Renovation 3.
Slide 3: FYE 5/2018 Results
FYE 5/2018 Results 3
Slide 4: FYE 5/2018 Consolidated Profit and Loss Statement
1. FYE 5/2018 Consolidated Profit and Loss Statement FYE 5/2017 FYE 5/2018 (consolidated) (consolidated) % of YoY Share Share adjustment in (million yen) (million yen) change projection (%) (%) (%) (%) Net sales 247,341 100.0 268,161 100.0 108.4 99.8 Gross profit 68,149 27.6 73,681 27.5 108.1 99.3 S
Slide 5: FYE 5/2018 BS (Consolidated)
2. FYE 5/2018 BS (Consolidated) Main causes End of FYE 5/2017 End of FYE 5/2018 Change of changes (Consolidated) (Consolidated) ■Total assets Total assets 110,480 121,412 +10,932 ・ Increase of 2,961 million yen in merchandise Current assets 67,798 73,013 +5,214 ・ Increase of 1,112 million yen in cas
Slide 6: New Store Openings; Renovation of Existing Stores
3. New Store Openings OTC: 51 store openings /Prescription drug stores: 29 store openings (in-store pharmacies: 24 stores and dedicated prescription drug stores: 5 stores) Kanagawa Tokyo Shizuoka Chiba Other Total Number of OTC 24 12 7 6 2 51 store openings in In-store pharmacies 13 5 3 3 0 24 FYE
Slide 7: Performance Highlights: Net Sales
5. Performance Highlights Net Sales 108.5% vs. previous year, 99.7% vs. revised plan Implemented measures to increase customers •Launched new sales promotion using coupons. Added more food and everyday household items to EDLP. Number of customers at existing stores was 100.2% of the previous year
Slide 8: Performance Highlights: Sales by Segment
5. Performance Highlights Net Sales ■ Sales by Segment FYE 5/2017 FYE 5/2018 YoY Net sales Share Net sales Share change (million yen) (%) (million yen) (%) (%) Medical and health products 58,130 23.7 65,044 24.4 111.9 (O T C) 39,693 16.2 43,388 16.3 109.3 (Prescription) 18,437 7.5 21,655 8.1 117.5 C
Slide 9: Performance Highlights: Gross Profit Ratio, SG&A Ratio
5. Performance Highlights Gross Profit Ratio Gross profit ratio 27.7% 0.0% vs. previous year, -0.1% vs. revised plan <Factors behind the decline in H1> <Improvement factors for H2> -0.5% vs. previous year +0.3% vs. previous year • Focus on EDLP • Adjustment in balance between EDLP and • Implemen
Slide 10: Performance Highlights (Dispensing Department)
5. Performance Highlights (Dispensing Department) FYE May 2017 FYE May 2018 Change Sales of prescriptions in all stores （million yen) 18,437 21,655 117.5 Number of prescriptions (1,000 cases) 2,067 2,410 116.6 Prescription drug unit price (Yen) 8,757 8,837 100.9 Sales of existing stores (million yen
Slide 11: FYE 5/2018 Profit and Loss Statement (Create SD)
6. FYE 5/2018 Profit and Loss Statement (Create SD) FYE 5/2017 FYE 5/2018 % of Share Share YoY adjustment in (million yen) (million yen) change projection （％） （％） (%) (%) Net sales 245,466 100.0 266,233 100.0 108.5 99.7 Gross profit 68,107 27.7 73,663 27.7 108.2 99.4 SG&A 54,431 22.2 60,619 22.8 111
Slide 12: FYE 5/2019 Forecasts
FYE 5/2019 Forecasts 5/2019 12
Slide 13: Store Opening Strategy
1. Store Opening Strategy Dominant store openings in areas with a growing population. • Seven prefectures have seen their population increase. (Tokyo, Kanagawa, Saitama, Chiba, Aichi, Fukuoka and Okinawa) Gunma Concentrate new stores openings in parts with an 5 stores inflow of people of existin
Slide 14: Store Openings and Renovation
2. Store Openings and Renovation Store Openings Trends in store openings (Plan) FYE May 2015 FYE May 2016 FYE May 2017 FYE May 2018 FYE May 2019 New openings 34 28 43 51 52 Closures 7 3 5 1 3 No. of stores at end of FY 446 471 509 559 608 • Open various types of stores in existing areas with a gro
Slide 15: Improvement of Gross Profit
3. Improvement of Gross Profit Return to reinforcement of expertise as drug stores • Review merchandise lineups Specialty • Review sales promotional methods • Optimize food floor Health＆Beauty • Strengthen health care section Health support function • Introduce Cremo essence Self‐medication • Prom
Slide 16: Cost Reduction
4. Cost Reduction Productivity Improvement Logistics improvement and systemization • Enhance the accuracy computer-assisted ordering • Refine classifications of delivered goods • Introduce the system for checking expiration dates Implement the above according to store characteristics to reduce wo
Slide 17: Prescription Department
5. Prescription Department Establishment of Coordinated Health-care System Trends in Store Openings (Plan) FYE May 2015 FYE May 2016 FYE May 2017 FYE May 2018 'FYE May 2019 Number of store openings 26 6 18 29 25 Number of stores at the end of FY 139 142 157 185 210 • The opening of mainly in-store
Slide 18: Prescription Department: Response to Dispensing Fee Revision
5. Prescription Department Response to Dispensing Fee Revision Basic dispensing fee • The impact is small because End of End of 6 Target 4 the majority of prescriptions March May 2018 for end of are received from multiple 2018 May 2019 medical institutions. • Try to solve this issue by 180 179 206
Slide 19: Nursing-Care Business
6. Nursing-Care Business Well Life (fee-based nursing home business) Capture new residents • Double down on working on local welfare facilities and hospitals, etc. • Improve services including enhancing events Salon Day (Day-care service business) Opening of large-scale facilities • Open one-day
Slide 20: FYE 5/2019 Forecasts (Consolidated)
7. FYE 5/2019 Forecasts (Consolidated) FYE 5/2018 FYE 5/2019 (consolidated) (consolidated) YoY Share Share (million yen) (million yen) change （％） （％） (%) Net sales 268,161 100.0 290,900 100.0 108.5 Gross profit 73,681 27.5 80,480 27.7 109.2 SG&A 59,819 22.3 65,900 22.7 110.2 expenses Operating profi
Slide 21: FYE 5/2019 Forecasts: Investment Value and Dividends
7. FYE 5/2019 Forecasts (Consolidated) ■ Changes in investment value ■ Changes in dividends investment value (hundred million yen) Changes in dividends per share (yen) 140 40 36 120 34 120 31 100 97 30 27 80 77 22 60 56 52 20 40 20 10 FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE 05/2015 05/2016 05/2017 0