Kusuri No Aoki Holdings Co.,ltd. · TSE:3549
Kusuri No Aoki Holdings Co.,ltd — H1 FY May 2024 Earnings Presentation
42 slides from Kusuri No Aoki Holdings Co.,ltd's earnings presentation, Jan 10, 2024
Slide 1: Financial Results Briefing for the Second Quarter of Fiscal Year Ending May 2024
Financial Results Briefing for the Second Quarter of Fiscal Year Ending May 2024 KUSURI NO AOKI HOLDINGS CO., LTD. (TSE Prime Section Code 3549) January 10, 2024 Hironori Aoki
Slide 2: Agenda
1 Summary of Financial Results for the First Half of the Fiscal Year Ending May 2024 and Earnings Forecast for the Fiscal Year Ending May 2024 2 Progress Status of the Third Medium-term Management Plan (for five years) Copyright2024 KUSURI NO AOKI HOLDINGS CO.LTD. All Rights Reserved. 2
Slide 3: Summary of Financial Results for 1H FY May 2024 and Earnings Forecast
1 Summary of Financial Results for the First Half of the Fiscal Year Ending May 2024 and Earnings Forecast for the Fiscal Year Ending May 2024 Summary of Financial Results for the First 1 Half of the Fiscal Year Ending May 2024 Earnings Forecast for the Fiscal Year 2 Ending May 2024 Copyright2024 KU
Slide 4: Store Opening/Closing Results
Store Opening/Closing Results Store opening and closing results First half of FY May 2024 No. of No. of stores at stores at Opening end of 1H end of FY Hokushinetsu Tohoku Kanto Tokai Kansai Closing FY May May 2023 total 2024 [1] Drugstores 896 8 1 5 1 3 18 3 911 [2] Attached dispensing 526 13 5 9 8
Slide 5: Year-on-Year Change in Sales by the Month
Year-on-Year Change in Sales by the Month All stores for current year Existing stores for current year Year-on-year change in All stores for previous year Existing stores for previous year sales for cumulative 1H 125.0% All stores: 117.1% Existing stores: 110.7% 120.6% 120.0% 117.9% 117.8% 116.3% 11
Slide 6: Change in Number of Customers and Average Spending per Customer
Year-on-Year Change in the Number of Customers and Average Spending per Customer by the Month at Existing Stores Year-on-year change at existing The number of customers for current year Average spending per customer for current year The number of customers for previous year Average spending per cust
Slide 7: Consolidated Profit and Loss Statement (Year-on-Year Change)
Consolidated Profit and Loss Statement (Year-on-Year Change) FY May 2023 FY May 2024 FY May 2024 Reference: 1H results (excluding stock- 1H results 1H results based compensation expense) Million yen Sales ratio Million yen Sales ratio YoY change Million yen Sales ratio YoY change Sales 184,281 100.0
Slide 8: Consolidated Profit and Loss Statement (Versus Plan)
Consolidated Profit and Loss Statement (Versus Plan) FY May 2024 FY May 2024 FY May 2024 Reference: 1H results (excluding stock- 1H plan 1H results based compensation expense) Million yen Sales ratio Million yen Sales ratio vs. Plan Million yen Sales ratio vs. Plan Sales 200,000 100.0% 215,622 100.0
Slide 9: Results by Area
Results by Area FY May 2023 FY May 2024 1H results 1H results Ratio of Ratio of Composition Number Composition YoY Number Million yen ratio stores with Million yen ratio stores with of stores dispensaries change of stores dispensaries Hokushinetsu 87,722 47.6% 345 68.3% 99,255 46.0% 113.1% 364 70.0%
Slide 10: Results by Product Division
Results by Product Division FY May 2023 FY May 2024 1H results 1H results Composition Composition Composition Million yen Million yen YoY change ratio ratio difference Health 19,380 10.5% 20,730 9.6% -0.9% 107.0% Beauty 26,130 14.2% 28,415 13.2% -1.0% 108.7% Daily commodities 37,351 20.3% 41,042 19.
Slide 11: Results of SGA Expenses (Year-on-Year Change)
Results of SGA Expenses (Year-on-Year Change) FY May 2023 FY May 2024 FY May 2024 Reference: 1H results (excluding stock- 1H results 1H results based compensation expense) Million yen Sales ratio Million yen Sales ratio YoY change Million yen Sales ratio YoY change Labor cost 18,419 10.0% 25,654 11.
Slide 12: Results of SGA Expenses (Versus Plan)
Results of SGA Expenses (Versus Plan) FY May 2024 FY May 2024 FY May 2024 Reference: 1H results (excluding stock- 1H plan 1H results based compensation expense) Million yen Sales ratio Million yen Sales ratio vs. Plan Million yen Sales ratio vs. Plan Labor cost 19,544 9.8% 25,654 11.9% 131.3% 19,639
Slide 13: Consolidated Balance Sheet
Consolidated Balance Sheet As of May 20, 2023 As of November 20, 2023 Composition Composition Change from Increase/ Million yen ratio Million yen ratio May 20, 2023 Decrease Cash and deposits 42,870 15.6% 41,888 15.0% 97.7% -982 Inventory assets 45,498 16.6% 46,639 16.7% 102.5% 1,141 Current assets
Slide 14: Cash Flow Statement
Cash Flow Statement (Million yen) Increase/ FY May 2023/1H FY May 2024/1H Decrease Cash flows from operating activities 18,066 14,812 -3,254 Cash flows from investing activities -10,176 -11,567 -1,391 Cash flows from financing activities -2,930 -4,227 -1,297 Cash and cash equivalents at the 31,307 4
Slide 15: Summary of Financial Results and Earnings Forecast
1 Summary of Financial Results for the First Half of the Fiscal Year Ending May 2024 and Earnings Forecast for the Fiscal Year Ending May 2024 Summary of Financial Results for the First 1 Half of the Fiscal Year Ending May 2024 Earnings Forecast for the Fiscal Year 2 Ending May 2024 Copyright2024 KU
Slide 16: Store Opening/Closing Plan
Store Opening/Closing Plan No. of Store opening and closing plan FY May 2024 No. of stores at Opening stores at end of FY Hokushin end of FY Tohoku Kanto Tokai Kansai Closing May 2023 etsu total May 2024 [1] Drugstores 896 18 3 10 4 10 45 5 936 [2] Attached dispensing 526 15 13 20 11 11 70 2 594 pha
Slide 17: Capital Investment Plan
Capital Investment Plan (Million yen) FY May 2023 FY May 2024 FY May 2024 Full-year results Initial full-year plan Revised full-year plan Lease Lease YoY Lease YoY Acquisition Total Acquisition Total Acquisition Total assets assets change assets change Store investment 23,124 2,709 25,832 17,028 2,0
Slide 18: Full-Year Earnings Forecast
Full-Year Earnings Forecast FY May 2023 FY May 2024 FY May 2024 Full-year results Initial full-year plan Revised full-year plan Million yen Sales ratio Million yen Sales ratio YoY change Million yen Sales ratio YoY change Sales 378,874 100.0% 410,000 100.0% 108.2% 435,000 100.0% 114.8% Gross profit
Slide 19: Full-Year Earnings Forecast (Excluding Stock-based Compensation Expense)
Full-Year Earnings Forecast (Excluding Stock-based Compensation Expense) FY May 2023 FY May 2024 FY May 2024 Reference: Revised full-year plan Full-year results Initial full-year plan (excluding stock-based compensation expense) Million yen Sales ratio Million yen Sales ratio YoY change Million yen
Slide 20: Plan by Area
Plan by Area FY May 2023 FY May 2024 FY May 2024 Full-year results Initial full-year plan Revised full-year plan Number Ratio of Number Ratio of Composition Composition Composition YoY Million yen ratio of stores with Million yen ratio Million yen ratio of stores with dispensaries change dispensarie
Slide 21: Plan by Product Division
Plan by Product Division FY May 2023 FY May 2024 FY May 2024 Full-year results Initial full-year plan Revised full-year plan Sales Sales Million Composition Million Composition YoY Million Composition YoY ratio ratio ratio ratio ratio yen yen change yen change difference difference Health 41,021 10.
Slide 22: SGA Plan
SGA Plan FY May 2023 FY May 2024 FY May 2024 FY May 2024 Reference: Revised full-year plan Full-year results Initial full-year plan Revised full-year plan (excluding stock-based compensation expense) YoY YoY Million yen Sales ratio Million yen Sales ratio Million yen Sales ratio Million yen Sales ra
Slide 23: Progress Status of the Third Medium-term Management Plan
2 Progress Status of the Third Medium-term Management Plan (for five years) 1 Overview Results of Efforts Made in the First Half 2 and Outlook for the Second Half Copyright2024 KUSURI NO AOKI HOLDINGS CO.LTD. All Rights Reserved. 23
Slide 24: Vision2026: Make Life More Convenient, Smile All the Times
Vision2026 Make Life More Convenient, Smile All the Times あなたの町で、「便利な暮らし」と「笑顔につながる健康」を Aiming to become a drugstore that supports “convenient life” 支えるドラッグストアを目指して and “health that makes you smile” in your town Copyright2024 KUSURI NO AOKI HOLDINGS CO.LTD. All Rights Reserved. 24
Slide 25: Three Priority Measures to Fulfill Vision 2026
Strategy: Three Priority Measures to Fulfill Vision 2026 1 Transformation to Food & Drug 2 Parallel establishment rate 70% 3 Shift toward the dominant strategy Copyright2024 KUSURI NO AOKI HOLDINGS CO.LTD. All Rights Reserved. 25
Slide 26: Numerical Target: Sales of ¥500 billion for FY May 2026
Numerical Target Sales for FY May 2026 ¥500 billion (¥100 Million) 5000 1st 2nd 3rd 4350 3788 3283 3001 3058 2508 2212 1887 1616 1349 1144 931 761 647 539 * Effective from the beginning of the fiscal year ended May 2022, the Company adopted the “Accounting Standard for Revenue Recognition”. Copyrigh
Slide 27: Results of Efforts in First Half and Outlook for Second Half
2 Progress Status of the Third Medium-term Management Plan (for five years) 1 Overview Results of Efforts Made in the First Half 2 and Outlook for the Second Half Copyright2024 KUSURI NO AOKI HOLDINGS CO.LTD. All Rights Reserved. 27
Slide 28: Format Renewal (2020 Model)
Format Renewal (2020 Model) - Starting from October 2020, the 400-tsubo-format has been added as a next-generation format. 450-tsubo-format concessionary NEW (From 2014) 400 tsubo (From 2020) ► Large-size store ► Store opening rate: 10% 300 tsubo ► Suburb, countryside (From 2010) ► Medium-size store
Slide 29: Strong Point of 400-tsubo-format
Strong Point of 400-tsubo-format - Offering fresh food has enabled our customers to enjoy one-stop shopping. - Covering the drugstore market as well as the dispensing and supermarket markets (markets exceeding 30 trillion yen) - Standardized format that allows for multiple store expansion Copyright2
Slide 30: Fresh Food Roll-out in Existing Stores
Fresh Food Roll-out in Existing Stores - Fresh food know-how acquired through the development of the 400-tsubo-format has been applied to the 300-tsubo-format - Renovation plan to introduce fresh food into existing 300-tsubo stores over 3 years (approx. 600 stores) 400 tsubo 300 tsubo Produce Meat N
Slide 31: Percentage of Produce and Meat Sections Introduced
Percentage of Produce and Meat Sections Introduced - Renovate 300-tsubo format and introduce produce and meat sections. - By the end of FY May 2025, make all stores, except small stores, food and drug stores. 約 Ratio of stores with produce and meat sections to total number of stores 100% 90% 80% 70%
Slide 32: Semiannual Trend for Year-on-Year Change in Sales
Semiannual Trend for Year-on-Year Change in Sales All stores Existing stores 120.0% 116.3% 117.1% 115.4% 114.8% 112.9% 115.0% 109.9% 110.0% 110.7% 105.0% 102.8% 108.6% 106.5% 98.0% 103.7% 100.0% 99.8% Year-on-year change at 95.0% existing stores for 96.5% cumulative 1H 90.0% 94.8% Existing stores: 1
Slide 33: Low-cost Operation: Transition from High-Low to EDLP
Low-cost Operation - Review store man-hours (shift initiative from headquarters to store operations department) to lower labor cost ratio - Reduce man-hours required for sales floor changes by shifting to EDLP and strengthening regular item sales floors Sales promotion measures Transition from High-
Slide 34: Accelerating Opening of Dispensing Pharmacies
Accelerating Opening of Dispensing Pharmacies - Aim to achieve ratio of stores with dispensaries of 70% by fiscal May 2026. - 42 dispensing pharmacies opened in the first half of fiscal May 2024 (ratio of stores with dispensaries: 62.2%), 70 dispensing pharmacies are planned to be opened in the whol
Slide 35: Trends in Newly Opened Stores and Store Opening/Closing Rate
Trends in Number of Newly Opened Stores and Store Opening/Closing Rate - Revised downward the full-year store opening plan to 45 (-25 stores). - Announced unplanned M&A of 4 companies (SM/HC +20 stores). - Planned to install solar panels at 500 stores (at the end of FY May 2024). Rate of net increas
Slide 36: Recent M&A Status
Recent M&A Status - Four M&A transactions are underway in the first half of the fiscal year (No. of stores: 20). - The acquisition of shares in Mamai (to be converted into an equity-method affiliate) enables our first entry into the Shikoku area. Nakao Mamai Head office location : Nomi, Ishikawa Rep
Slide 37: M&A Execution
M&A Execution - Since fiscal May 2021, M&A transactions with local supermarkets have been executed. - The purpose is to strengthen fresh food merchandizing in each area and to secure well-located properties. - Total sales of 12 companies: 37.3 billion yen, total number of stores: 58 December 2022 Ma
Slide 38: Store Opening Results for the First Half
Store Opening Results for the First Half of FY May 2024 - Strengthened dominant strategy in our sales areas. - Higher store opening rates in the Hokushinetsu and Kanto areas. 1H of FY May 2024: No. of stores newly opened / No. of stores at year end by area All areas Newly Year Hokushinetsu area Open
Slide 39: Full-Year Store Opening Plan (Revised)
Full-Year Store Opening Plan for FY May 2024 (Revised Initial Plan) - Revised downward the number of new drugstores to be opened to 45 from the initially planned 70. - Announced unplanned M&A of 4 companies (20 stores in total). FY May 2024: No of stores newly opened / No. of stores at year end by a
Slide 40: Introduction of Solar Power Generation System
Introduction of Solar Power Generation System - Initiatives for environmental conservation and measures to address rising electricity costs - The system will be introduced to 800 stores over three years (by the end of FY May 2026). - Operated at 247 stores as of the end of the first half of FY May 2
Slide 41: Sustainability
Sustainability - Disclosure of sustainability-related information - Identification of material issues (Materiality) and implementation of ESG initiatives ► CO2 emissions reduction by installing solar panels ► Use of highly energy-efficient equipment (Refrigerated/frozen stockers, air conditioning, l
Slide 42: Forward-looking statements
Make Lifeもっと便利に、ずっと笑顔で。 More Convenient, Smile All the Times The forward-looking statements in this document, including earnings forecasts, are based on information currently available to the Company and certain assumptions that the Company believes to be reasonable and are not intended as a guarant
Kusuri No Aoki Holdings — H1 FY May 2024 Earnings Presentation on 6ix