Financial Results for the Fiscal Year Ended (FYE) March 15, 2023 [Japanese GAAP] (Consolidated)
April 28, 2023
Company Name
Security Code
Representative

CAWACHI LIMITED
2664(Title)President

Contact(Title)URL

Exchange listed on:
https://www.cawachi.co.jp/(Name) Shinji Kawachi

Corporate Officer
Director Administration
Manager

Scheduled date of the Ordinary General Meeting of
Shareholders
Scheduled commencement date of dividend payment
Scheduled filing date of the securities report
Supplemental information for financial results:
Investor meeting presentation:(Name)

Tokyo Stock Exchange

Hiroshi Asuke(TEL) 0285 (32) 1131

June 14, 2023
June 15, 2023
June 15, 2023
Available
Scheduled (for securities analysts and institutional
investors)(Amounts rounded down to the nearest millions of yen.)

1. Consolidated Financial Results for the FYE March, 2023 (From March 16, 2022 to March 15, 2023)(1) Consolidated Operating Results(Percent represents comparison changes from the previous year.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
million yen% million yen%
million yen%
million yen%
FYE March,
281,871
6,611
7,672
4,177
2023
FYE March,
279,462(1.8)
7,709(27.0)
8,698(24.9)
4,830 (32.0)
2022(Note) Comprehensive income: FYE March, 2023
¥4,193 million (-%)
FYE March, 2022
¥4,832 million (-32.2%)
Profit per share

Profit per share –dilutedProfit toShareholders’equity%Ordinary profit to
AssetsOperating profit
to Net sales

yen
yen
%
%
FYE March,
187.06186.85
3.9
4.0
2.3
2023
FYE March,
216.44216.07
4.7
4.5
2.8
2022
(Reference) Equity method investment gain (loss): FYE March, 2023 ¥ - million
FYE March, 2022 ¥ - million(Note) Effective from the beginning of the fiscal year under review, the Company began to apply the “AccountingStandard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), etc., and the numbers for theFYE March, 2023 are ones after applying it. Therefore, percentage changes compared with the previous fiscal
year are not indicated.
(2) Consolidated Financial Positions
Total assets

Net assets

Shareholders’ equity
ratio%

million yen
million yen
FYE March,
194,496
107,7252023
FYE March,
191,721104,649
2022(Reference) Shareholders’ equity: FYE March, 2023
¥107,627 million
FYE March, 2022
¥104,523 million

Net assets per share
yen

55.3

4,818.93

54.5

4,682.61

(3) Consolidated Cash Flows

million yen

million yen

million yen

Cash and cash
equivalents at the endof the year
million yen

9,817(5,840)(4,485)38,4506,868(4,536)(4,607)

38,959Cash flows fromoperating activitiesFYE March,
2023
FYE March,
2022

Cash flows frominvesting activities

Cash flows fromfinancing activities

2. Dividends
End of
1Q
FYE March, 2022
FYE March, 2023
FYE March, 2024
(forecast)yen-

Annual dividends per share
End of
End of End of
the
2Q
3Q
year
yen
yen
yen
0.00
50.00
0.00
50.00

-

0.00

-

Total
yen
50.00
50.00

50.00

Total
Ratio of
Dividend
amount ofdividends topayout ratio
annualnet assets(consolidated)
dividends(consolidated)
million yen
%
%
1,116
23.1
1.1
1,116
26.7
1.1

50.00

26.6

3. Forecast of Consolidated Results for FYE March, 2024 (March 16, 2023 to March 15, 2024)(Percentage represents changes from the previous year for Full year, and on YoY basis for Quarterly results.)
Profit attributable
Profit per
Net sales
Operating profit
Ordinary profit
to owners of
shareparent2Q (cumulative)
Full year

millionyen%

millionyen%

millionyen%

million
yen

%

yen

146,100
286,500

2.5
1.6

3,700
6,000

(8.2)
(9.2)

4,200
7,000

(8.1)
(8.8)

2,550
4,200

(9.3)
0.5

114.17188.05

*NOTES(1) Changes in major subsidiaries during the cumulative quarter under review (Change
in specific subsidiaries that will accompany a change in scope of consolidation):
Newly consolidated:- company (companies)(name of company)
Excluded:- company (companies)(name of company)(2) Change in accounting policies or estimates and retrospective restatements
1) Change in accounting policies in accordance with revision of accounting
standards:
2) Change in accounting policies other than item 1) above:3) Change in accounting estimates:
4) Retrospective restatements:(3) Number of shares issued (common stock)1) Number of shares issued at the end of theperiod (including treasury stock)2) Number of shares of treasury stock at the endof the period
3) Average number of shares issued during theperiodFYE March,
2023
FYE March,
2023
FYE March,
2023

24,583,420
shares2,249,122
shares
22,334,298
shares

None

Yes
None
None
None
FYE March,
2022
FYE March,
2022
FYE March,
2022

24,583,420
shares2,261,722
shares22,318,733
shares* This summary of consolidated financial results is not subject to audit by certified public accountants or an audit firm.
* Explanation for appropriate use of operating results forecasts, other special notes
Forward-looking statements, including business forecasts, contained in this document are based on information
available to Cawachi Ltd. and certain assumptions deemed reasonable as of the date of this document, and actual
performance and results may differ significantly from the forecasts described here due to various factors. Pleaserefer to “1. Overview of Results of Operations, etc. (1) Overview of Results of Operations for the Current Fiscal
Year” of the attached documents for the assumptions underlying the forecasts and cautions when using the forecasts.

○Contents of Attached Documents
1. Overview of Results of Operations, etc. ....................................................................................................................... 2(1) Overview of Results of Operations for the Current Fiscal Year .............................................................................. 2(2) Overview of Financial Position for the Current Fiscal Year .................................................................................... 4(3) Principles of Appropriation of Profits and Dividend Payment for the Current Fiscal Year and the Next Fiscal
Year ......................................................................................................................................................................... 5
2. Basic Policy on Selecting Accounting Standards ......................................................................................................... 5
3. Consolidated financial statements ................................................................................................................................ 6(1) Consolidated balance sheets .................................................................................................................................... 6(2) Consolidated statements of income and consolidated statements of comprehensive income ................................. 8
Consolidated statements of income ......................................................................................................................... 8
Consolidated statements of comprehensive income ................................................................................................ 9(3) Consolidated statements of changes in equity ....................................................................................................... 10(4) Consolidated statements of cash flows .................................................................................................................. 12－ 1 －1. Overview of Results of Operations, etc.
(1) Overview of Results of Operations for the Current Fiscal Year
(Results of operations for the current fiscal year)
During the fiscal year ended March 15, 2023, the Japanese economy showed signs of recovery in activity due to aneasing of restriction on personal activities, among other factors, amid continued impacts from the spread of COVID19. However, uncertainty over the economic outlook remained, affected by soaring resource prices and foreignexchange movements as well as heightened geopolitical risks.
A budget-minded trend in consumer spending has become even more widespread due to, for example, a rising cost ofliving prompted by merchandise price hikes stemming from increased utility bills and higher raw material prices.
The drugstore sector, to which the Cawachi Group (“the Group”) belongs, remained in a tough environment due tocross-segment competition brought on by price hikes on various goods and to continued opening of new stores bycompetitors, despite expanding business through in-store dispensing pharmacy installation and seeing signs ofrecovery in inbound tourism-related demand.
Under these circumstances, the Group kept opening new in-store dispensing pharmacies as a way to enhance ourexpertise and strove to sell infection-prevention products as a measure to deal with infections. Moreover, the Groupendeavored to enhance customer convenience through refurbishing stores, extending opening hours, and expanding
vegetable-selling stores, among other measures. In an effort to remain relatively competitive amid a series of pricehikes stemming from soaring raw material prices, we worked to promote sales while seeking to secure merchandise
and lower selling prices by conducting bulk purchasing that leveraged our logistics system. Meanwhile, to streamline
its store operations, the Group moved to introduce self-checkout machines at the end of the previous fiscal year. We
strove to curb personnel expenses by improving their utilization rates. In addition, we restrained power consumption
by taking power-saving measures such as reducing lighting at stores. However, as utility bills climbed due to higher
fuel adjustment costs, selling, general & administrative expenses went up accordingly.
In terms of new store openings, the Group opened a total of 11 stores: two stores each in Yamagata, Ibaraki, Tochigi,
and Chiba, and one store each in Saitama, Niigata, and Nagano, all of which are areas it currently operates. The Groupalso opened a total of 13 in-store dispensing pharmacies: three each in Ibaraki and Tochigi, two each in Miyagi andYamagata, and one each in Fukushima, Chiba, and Niigata. The Group closed a total of two stores—one in Tochigi
and another in Niigata (in-store dispensing pharmacy type)—for the purpose of relocation as well as one dispensing
pharmacy.
Accordingly, the Group has a total of 364 stores (of which 144 have an in-store dispensing pharmacy).
As a result, the Group recorded net sales of 281,871 million yen (279,462 million yen for the previous fiscal year) on aconsolidated basis for the current fiscal year under review. The Group recorded operating profits of 6,611 million yen(7,709 million yen for the previous fiscal year), ordinary profit of 7,672 million yen (8,698 million yen for the previous
fiscal year), and profit attributable to owners of parent of 4,177 million yen (4,830 million yen for the previous fiscal
year).
Effective from the beginning of the fiscal year under review, the Group began to apply the “Accounting Standard for
Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), etc. As our revenue accounting treatment for the
fiscal year under review thus differed from that for the previous fiscal year, no percentage changes compared with theprevious fiscal year are indicated in the business performance briefing.

－ 2 －(Sales)
The Group’s net sales by segment are as follows.
Previous consolidated fiscal year Current consolidated fiscal year
Segment(From March 16, 2021

(From March 16, 2022

to March 15, 2022)

to March 15, 2023)

AmountAmount(%)(Mil. yen)(Mil. yen)(%)

Pharmaceuticals

50,83918.3

52,78018.8

Cosmetics

20,816

7.5

21,421

7.6

Sundries

78,34428.1

77,581

27.6

General food

128,54446.1

129,16446.0

278,544100.0

280,948

100.0

Total

(Notes) 1. Number of units sold is omitted because the Company’s has an extensive product range.
2. Amounts above do not include rent revenue from real estate.
3. Effective from the beginning of the fiscal year under review, the Company began to apply the “AccountingStandard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), etc., and the numbers for the
fiscal year ended March 15, 2023 are ones after applying it.
(Outlook for the next fiscal year)
For the fiscal year ending March 15, 2024, economic activity in Japan is predicted to recover moderately, helped bysuch factors as increased people flows and rebounding inbound tourism-related demand as a result of COVID-19
being downgraded as a class 5 disease. There is, however, persistent uncertainty about the future due to continued pricehikes stemming from rising geopolitical risks, foreign exchange movements, higher fuel prices, and soaring raw
material prices, among other factors. The consumer spending climate is forecasted to remain more challenging amid,
among other factors, the budget-minded trend pushed by economic situation concerns and future worries in the face ofcontinuously growing inflation and the cost of living.
In these circumstances, in order to cope with the rapidly changing business environment, the Group will work on
systemization and mechanization based on DX promotion measures for the purpose of improving productivity andstepping up overall efficiency through a new logistics framework in order to further strengthen its business
infrastructure. We will rein in rapidly rising utility bills by introducing power-saving equipment, among other steps, inorder to deal with them.
Further, as a differentiation measure against increasingly fierce competition, we will continue to open dispensing
pharmacies in our new stores. At the same time, we will make progress with measures for enhancing our expertise bystrengthening functions that enable qualified specialists to provide counseling in order to maintain and step up people’s
health, including disease prevention and beauty, and extend their health longevity while enhancing our product lineup
catering for people’s growing health awareness as a measure to enhance their health and beauty care. Furthermore, wewill make every effort to improve the quality of consumers’ living and customer satisfaction by making further
progress in building local community-based stores with functions as local infrastructure. We will do this while
focusing on offering products that value safety at reasonable prices in an effort to respond to the consumption
environment where people are increasingly conscious about protecting their living.
Regarding new store openings and closings, the Group plans to open 16 stores mainly in the areas where it currently
operates, and to close two stores. Furthermore, to further make progress on measures for expertise enhancement, theGroup plans to launch 11 in-store dispensing pharmacies at new and existing stores and to close two.
From the above, the Group forecasts, for the fiscal year ending March 2024, that the net sales will be 286,500 million
yen, operating profit 6,000 million yen, ordinary profit 7,000 million yen, and profit attributable to owners of parent
4,200 million yen.
－ 3 －(2) Overview of Financial Position for the Current Fiscal Year
1) Assets, liabilities and net assets
Assets increased 2,775 million yen compared with the end of the previous fiscal year, to 194,496 million yen. Thiswas due primarily to an increase in merchandise.
Liabilities decreased 300 million yen compared with the end of the previous fiscal year, to 86,771 million yen.
Net assets increased 3,075 million yen compared with the end of the previous fiscal year, to 107,725 million yen.
This was due primarily to an increase in retained earnings.
Equity ratio increased to 55.3% (year-on-year increase of 0.8 point).
2) Cash flows
Cash and cash equivalents as of the end of the fiscal year under review (hereinafter referred to as “fund”) amounted
to 38,450 million yen (509 million yen decrease compared with the end of the previous fiscal year).
(Cash flow from operating activities)
Net cash provided by operating activities amounted to 9,817 million yen (year-on-year increase of 2,948 millionyen). This was due primarily to the fact that profit before income taxes was 6,572 million yen (year-on-year
decrease of 1,115 million yen), depreciation was 4,350 million yen (year-on-year decrease of 73 million yen).
(Cash flow from investing activities)
Net cash used in investing activities amounted to 5,840 million yen (year-on-year increase of 1,304 million yen).
This was due primarily to the fact that purchase of property, plant and equipment associated with the opening of newstores amounted to 5,252 million yen (year-on-year increase of 1,279 million yen).
(Cash flows from financing activities)
Net cash used in financing activities amounted to 4,485 million yen (year-on-year decrease of 121 million yen).
This was due primarily to the fact that while proceeds from long-term borrowings were 6,500 million yen (year-onyear decrease of 1,150 million yen), repayments of long-term borrowings were 9,869 million yen (year-on-year
decrease of 1,271 million yen), dividends paid were 1,116 million yen (year-on-year increase of 0 million yen).
(Trends of Cash Flow-related Indicators)
Equity ratio (%)
Equity ratio on
market value (%)

FYE3/2019

FYE3/2020

FYE3/2021

FYE3/2022

FYE3/2023

50.7

50.3

51.9

54.5

55.3

23.0

20.9

33.6

27.5

25.3

4.7

2.4

1.7

3.3

2.0

84.4

178.8

246.8

138.0

235.1

Ratio of interestbearing debts tocash flows(years)Interest coverage
ratio (multiples)

Equity Ratio: Shareholders’ equity/Total assets
Equity ratio on market value: Market capitalization/Total assets
Ratio of interest-bearing debt to cash flow: Interest-bearing debt/Cash flow
Interest coverage ratio: Cash flow/Interest expenses
Note 1: All figures are calculated based on consolidated financial results.
Note 2: Market capitalization is calculated based on number of shares issued excluding treasury stock.
Note 3: Cash flows are based on operating cash flows.
Note 4: Interest-bearing debt represents debt posted on the consolidated balance sheet and accompanied by interest
payments.

－ 4 －(3) Principles of Appropriation of Profits and Dividend Payment for the Current Fiscal Year and the Next Fiscal Year
The Group recognizes that returning profit to shareholders is a top-priority management issue. Our basic policy calls
for continuous and stable dividend payments, taking into account the future business prospects as well as theenhancement of internal reserves to ensure stable growth of the Group.
The Group is planning to propose an ordinary dividend of 50 yen per share for the current fiscal year in the 56th
Ordinary General Meeting of Shareholders scheduled to be held on June 14, 2023.
The Group also plans to distribute an ordinary dividend of 50 yen per share in the following fiscal year.
Internal reserves will be used as funds primarily for opening of new stores and renovation.

2. Basic Policy on Selecting Accounting Standards
The Group has adopted Japanese accounting standards to ensure that its operating results are comparable withcompetitors in Japan.

－ 5 －3. Consolidated financial statements(1)Consolidated balance sheets(Millions of yen)
As of March 15, 2022

As of March 15, 2023

AssetsCurrent assets
Cash and deposits

38,95938,450Accounts receivable - trade
Merchandise

5,850
31,402

6,604
32,961

Supplies
Other

30
5,179

32
5,474

Total current assets

81,422

83,523

112,585(72,758)

114,911(74,785)

Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation

39,82640,126Land
Construction in progress

Buildings and structures, net

49,601
8

49,292791

Other
Accumulated depreciation

25,019(21,589)

25,016(21,839)

Other, net

3,430

3,177

92,867

93,388

Other

5,087

5,243

Total intangible assets

5,087

5,243

Investment securities
Leasehold and guarantee deposits

79
7,832

101
7,633

Deferred tax assets
Other

4,082
348

4,285
321

Total property, plant and equipment
Intangible assets

Investments and other assets

Total investments and other assets
Total non-current assets
Total assets－ 6 －12,343

12,342110,298

110,973

191,721

194,496(Millions of yen)
As of March 15, 2022

As of March 15, 2023

Liabilities
Current liabilities
Accounts payable - trade
Current portion of long-term borrowings

40,6259,200

41,923
7,909

Income taxes payable
Provision for bonuses

1,217
1,188

1,424
1,204

Provision for point card certificatesContract liabilities

1,352
–

–
2,046

Other

7,081

7,927

Total current liabilities

60,66562,435Long-term borrowings
Retirement benefit liability

13,7198,217

11,640
8,693

Provision for point card certificates
Asset retirement obligations

524
2,996

–
3,078

Non-current liabilities

Other

948

922

26,40624,33587,071

86,771

Shareholders' equity
Share capital

13,001

13,001

Capital surplus
Retained earnings

14,90181,00814,902
84,070Treasury shares(4,387)(4,362)

Total shareholders' equity

104,524

107,612Valuation difference on available-for-sale securities

(0)

15

Total accumulated other comprehensive income

(0)

15

Total non-current liabilities
Total liabilities
Net assets

Accumulated other comprehensive income

Share acquisition rights
Total net assets
Total liabilities and net assets

－ 7 －

126

98

104,649

107,725

191,721

194,496

(2)Consolidated statements of income and consolidated statements of comprehensive income(Consolidated statements of income)(Millions of yen)
Fiscal year ended
March 15, 2022

Fiscal year ended
March 15, 2023

Net sales
Cost of sales

279,462
216,313281,871
217,824

Gross profit

63,14964,047

Selling, general and administrative expenses

55,43957,435

Operating profit

7,709

6,611

Interest income
Dividend income

24
2

21
2

Sponsorship money income
Commission income

149
807

152
824

Revenue from sales of electric power
Other

195
218

186
254

Total non-operating income

1,399

1,442

Non-operating income

Non-operating expenses
Interest expenses

49

41

Commission expenses
Depreciation

156
65

142
59

Other

137

137

Total non-operating expenses

409

381

8,698

7,672

Gain on sale of non-current assets
Insurance claim income

0
–

10
137

Total extraordinary income

0148

Extraordinary losses
Loss on sale of non-current assets

21

9

33
944

64
911

5
6

230
33

Ordinary profit
Extraordinary income

Loss on retirement of non-current assets
Impairment losses
Loss on disaster
Other

1,011

1,248

Profit before income taxes

Total extraordinary losses

7,687

6,572

Income taxes - current

2,922

2,604

Income taxes - deferred

(65)

(209)

Total income taxes

2,857

2,394

Profit

4,830

4,177

Profit attributable to owners of parent

4,830

4,177

－ 8 －

(Consolidated statements of comprehensive income)(Millions of yen)

ProfitFiscal year ended

Fiscal year ended

March 15, 2022

March 15, 2023
4,830

4,177

1

15

1

15

Comprehensive income

4,832

4,193

Comprehensive income attributable toComprehensive income attributable to owners of parent

4,832

4,193

Other comprehensive income
Valuation difference on available-for-sale securities
Total other comprehensive income－ 9 －(3)Consolidated statements of changes in equity
Fiscal year ended March 15, 2022
(Millions of yen)
Shareholders' equity
Share capital
Balance at beginning of period

Capital surplus

13,001Retained earnings

14,899Treasury shares

77,293

Total shareholders' equity(4,411)

100,782

Changes during period
Dividends of surplus(1,115)(1,115)Purchase of treasury shares
Disposal of treasury shares

1

Profit attributable to owners ofparent

(0)

(0)

24

26

4,830

4,830

Net changes in items other thanshareholders' equity
Total changes during period
Balance at end of period

–

1

3,715

24

3,741

13,001

14,90181,008(4,387)

104,524

Accumulated other comprehensive income
Valuation difference on
available-for-sale securities
Balance at beginning of period

Share acquisition rights

Total accumulated othercomprehensive income

(2)

(2)

Total net assets

76

100,857

Changes during period
Dividends of surplus(1,115)Purchase of treasury shares(0)

Disposal of treasury shares

26

Profit attributable to owners ofparent4,830

Net changes in items other thanshareholders' equity

1

1

49

51

Total changes during period

1

1

49

3,792

Balance at end of period

(0)

(0)

126

104,649－ 10 －

Fiscal year ended March 15, 2023
(Millions of yen)
Shareholders' equity
Share capital
Balance at beginning of period

Capital surplus

13,001Retained earnings

14,901

Treasury shares

81,008

Total shareholders' equity(4,387)

104,524

Changes during period
Dividends of surplus(1,116)

Disposal of treasury shares(1,116)

1

24

Profit attributable to owners ofparent

26

4,177

4,177

Net changes in items other thanshareholders' equity
Total changes during period
Balance at end of period

–

1

3,061

24

3,088

13,001

14,902

84,070(4,362)

107,612

Accumulated other comprehensive income
Valuation difference on
available-for-sale securities
Balance at beginning of period

Share acquisition rights

Total accumulated othercomprehensive income

(0)

(0)

Total net assets

126

104,649

Changes during period
Dividends of surplus(1,116)

Disposal of treasury shares

26

Profit attributable to owners ofparent4,177

Net changes in items other thanshareholders' equity

15

15

(28)

(12)

Total changes during period

15

15

(28)

3,075

Balance at end of period

15

15

98

107,725－ 11 －

(4)Consolidated statements of cash flows(Millions of yen)
Fiscal year ended

Fiscal year ended

March 15, 2022

March 15, 2023

Cash flows from operating activities
Profit before income taxes
Depreciation

7,687
4,424

6,572
4,350

Impairment losses
Loss on retirement of non-current assets

944
9

911
9

Increase (decrease) in provision for bonuses
Increase (decrease) in retirement benefit liability

(176)
498

16
476

Increase (decrease) in provision for loss on disaster
Interest and dividend income

(134)
(27)

–
(24)

Interest expenses
Loss (gain) on sale of non-current assets

49
21

41
2

Increase (decrease) in provision for point card certificates
Increase(decrease) in contract liabilities

175
–

–
169

Decrease (increase) in trade receivables
Decrease (increase) in inventories

(482)
(670)

(753)
(1,560)

Increase (decrease) in trade payables
Other, net

(594)
167

1,297
1,019

11,891

12,527

3
(49)

3
(42)

Income taxes paid

(4,977)(2,671)

Net cash provided by (used in) operating activities

6,868

9,817

Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment(3,973)
109(5,252)50

Purchase of intangible assets
Purchase of long-term prepaid expenses

(526)
(58)

(455)
(55)

Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee deposits

(116)
27

(244)
112

SubtotalInterest and dividends received
Interest paid

Cash flows from investing activities

Other, net

1

4(4,536)(5,840)7,650(11,140)

6,500(9,869)

(0)
0

–
0

Dividends paid
Other, net(1,115)(1)(1,116)–

Net cash provided by (used in) financing activities

Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from long-term borrowings
Repayments of long-term borrowings
Purchase of treasury shares
Proceeds from disposal of treasury shares(4,607)(4,485)

Net increase (decrease) in cash and cash equivalents(2,276)(509)

Cash and cash equivalents at beginning of period

41,23538,959Cash and cash equivalents at end of period

38,95938,450－ 12 －