IR PRESENTATION

June 2016

Results Overview© 2016 AIN HOLDINGS INC. All Rights Reserved.

1

Consolidated P/L
For the fiscal year under the review, the Group reported net sales of ¥234,843 million, an increase of 25.0% year
on year, reflecting the opening of 147 new stores and M&As. Ordinary income rose 29.6% to ¥15,158 million andprofit attributable to owners of parent increased 27.8% year on year to ¥7,917 million.

FY4/15
results

FY4/16plan

Gross profit

187,904
28,961

218,280 234,843 +46,939
34,290 38,535 +9,574% of net sales

15.4

15.7

17,50920,8909.3

9.6

11,452

13,400

6.1

6.1

11,697

13,700

6.2

6.3

6,197

7,230

% of net sales

3.3

3.3

Earnings per
share(¥)

195.45228.02(¥ million)（単位：百万円）

Net sales

SG&A expenses% of net sales

Operating income% of net sales

Ordinary income% of net sales

Profit attributable toowners of parent

FY4/16
results

YoYchangeYoYchange(%)

Vs plan
(%)

+25.0

+7.6

+33.1

+12.4

+36.6

+14.5

+27.7

+9.1

+29.6

+10.6

+27.8

+9.5

+27.8

+9.5

16.4

23,915 +6,406
10.2

14,619 +3,167
6.2

15,158 +3,461
6.5

7,917 +1,720
3.4

249.69 +54.24

Figures in the table are rounded down

© 2016 AIN HOLDINGS INC. All Rights Reserved.

2

Dispensing Pharmacy Business（Consolidated）
Net sales rose 8.6% against our plan to ¥211,009 million reflecting the opening of 142 new dispensing
pharmacies and M&As and the growth of prescription volume and average sales per prescription.
Segment income rose 33.0% year on year to ¥19,219 million by promoting wider use of generic drugs,
receipt of technical fees and improvement of operational efficiency.

FY4/15
results

FY4/16plan

Gross profit

169,063
23,090194,280 211,009 +41,946
26,720 30,268 +7,178% of net sales

13.7

13.8

9,069

10,340

5.4

5.3

14,02016,3808.3

8.4

14,44916,650% of net sales

8.5

8.6

9.1

Number ofpharmacies

754

874

881

(¥ million)

Net sales

SG&A expenses% of net sales

Operating income% of net sales

Segment income

FY4/16
results

YoYchangeYoYchange(%)

Vs plan
(%)

+24.8

+8.6

+31.1

+13.3

+28.2

+12.5

+32.9

+13.8

+33.0

+15.4

+16.8

+0.8

14.3

11,629 +2,560
5.5

18,639 +4,619
8.8

19,219 +4,770+127

Figures in the table are rounded down
Segment income is adjusted to ordinary income shown on the quarterly consolidated statements of income
Prescription volume: +18.7% YoY
Average prescription price: +5.3% YoY© 2016 AIN HOLDINGS INC. All Rights Reserved.

3

Drug and Cosmetic Store Business(Consolidated)
Net sales increased 17.3% year on year to ¥20,884 million by the opening of 5 new stores, renovation offlagship stores and inbound demand. However, net sales decreased 6.1% against our plan due to the closingof 9 stores. Segment income became ¥(459) million due to the increase of sales promotion expenses for
2 new large store openings.

FY4/15
results

FY4/16plan

FY4/16
results

Gross profit

17,803
5,898

22,2507,450

20,884 +3,081
7,236 +1,338% of net sales

33.1

33.5

5,859

7,460

% of net sales

32.9

33.5

38.0

Operating income

38

(10)

(694)

% of net sales

0.2

‐

‐

117

24

(459)

% of net sales

0.7

0.1

‐

Number of stores

56

60

52

(¥ million)

Net sales

SG&A expenses

Segment income

YoYchangeYoYchange(%)

Vs plan
(%)

+17.3

(6.1)

+22.7

(2.9)

+35.4

+6.3

(732)

‐

‐

(576)

‐

‐

(4)

(7.1)

(13.3)

34.6

7,931 +2,072

Figures in the table are rounded down
Segment income is adjusted to ordinary income shown on the quarterly consolidated statements of income
No. of customers: +5.3% YoY
Average spending per customer: +11.4% YoY© 2016 AIN HOLDINGS INC. All Rights Reserved.

4

Consolidated B/S
Net cash became ¥236 million despite the increase of debt due to financial arrangements of M&A.

(¥ million)(¥ million)

End-FY4/15
AssetsLiabilities

Current assets

46,365

Cash on hand andin banks

19,553Fixed assets
Investments insecurities

Deferred
assetsTotal assets

End-FY4/16

67,783Current liabilities
Short-term debt
Lease obligations

Long-term liabilities
Long-term debt

2,872

Lease obligations

Assets54,433Current assets

6,330
628

Cash on hand andin banks

11,669Fixed assets

7,640
1,341

Investments insecurities‐

Total net assets

48,046

Deferred
assets114,149

Total liabilities andnet assets

114,149

Total assets

Liabilities

56,59322,647

83,294
2,677

Current liabilities
Short-term debt
Lease obligations

66,744
5,690
668

Long-term liabilities

19,818Long-term debt

14,854
1,198

Lease obligations‐

Total net assets

53,324

139,888

Total liabilities andnet assets

139,888

Net cash

3,613

Net cash

236

Shareholders’ equity ratio(%)

42.0

Shareholders’ equity ratio(%)

38.1

Figures in the table are rounded down
Net cash = Cash on hand and in banks – Interest-bearing debt (Long- and short- term debt + Lease obligations)© 2016 AIN HOLDINGS INC. All Rights Reserved.

5

Assets
The balance of total assets increased by ¥25,739 million year on year to ¥139,888 million.
(¥ million)

End-FY4/14

End-FY4/15

End-FY4/16

ChangeInventories

18,846
6,718
9,759

19,5538,369
9,909

22,647
12,385
10,984

Total current assets

44,33446,36556,593 +10,228

9,962
6,698
1,342

11,678
7,931
1,388

14,6949,537
1,352+3,016+1,606(36)

19,58322,47228,153+5,681

47

28

13

(15)

Total intangible fixed assets

21,12927,62335,586+7,963

Investments in securities

2,559
1,068
8,081

2,872
984
9,710

2,677
2,038
10,013(195)+1,054+303

16,33457,048101,382

17,68867,783
114,149

Cash on hand and in banks
Notes and accounts receivable

Buildings and structures,net
Land
Lease assets
Total property,plant and equipment
Lease assets

Deferred tax assets
Deposits and guarantees
Total investments and other assets
Total fixed assets
Total assets+3,094+4,016+1,075

19,555+1,867
83,294 +15,511
139,888 +25,739

Figures in the table are rounded down
Capital expenditures(Purchases of property, plant and equipment and intangible fixed assets + Deposits and guarantees) totaled ¥11,209million
Change(¥):End-FY4/16 compared with end-FY4/15© 2016 AIN HOLDINGS INC. All Rights Reserved.

6

Liabilities and Net Assets
The balance of liabilities increased ¥20,460 million to ¥86,563 million due to the financial arrangementsof M&A.
.
End-FY4/14
End-FY4/15
End-FY4/16
Change(¥ million)

Total long-term liabilities

28,002
6,535
566
50,349
4,502
1,454
8,793

Total liabilities
Common stock

Accounts payable
Short-term debt
Lease obligations
Total current liabilities
Long-term debt
Lease obligations

Capital surplus
Retained earnings
Total shareholders’ equity
Total net assets
Total liabilities and net assets

31,826
6,330
628

39,987
5,690
668+8,161(640)+40

54,43366,744+12,311

7,640
1,341

14,854
1,198+7,214(143)

59,142

11,66966,103

19,818+8,14986,563 +20,460

8,682
7,872
26,0078,682
7,872
31,6398,682
6,367
38,60542,14642,240101,382

47,77648,046
114,149‐(1,505)+6,96653,237+5,46153,324+5,278139,888 +25,739

Figures in the table are rounded down
Change(¥):End-FY4/16 compared with End-FY4/15© 2016 AIN HOLDINGS INC. All Rights Reserved.

7

Consolidated C/F
Net cash provided by operating activities increased ¥6,513 million to ¥21,352 million due to the increase ofprofit and accounts payable as the expansion of business scale.
(¥ million)

End-FY4/15

End-FY4/16

ChangeNet cash provided by operating activities

14,83921,352+6,513

Income before income taxes and minority interests

10,832

13,949+3,117

Depreciation and amortization

2,553

3,259

+706

Amortization of goodwill

2,278

2,938

+660

Decrease in accounts receivable

455

236

(219)

Decrease in inventories

969

495

(474)

Decrease (increase) in other accounts receivable

414

(600)

(1,014)

1,544

3,031

+1,487(14,560)(20,877)(6,317)(3,775)(9,916)(6,141)(10,024)(10,954)(930)

Net cash provided by financing activities

374

2,028

+1,654

Net increase in cash and cash equivalents

653

2,503

+1,85019,38921,892+2,503

Increase in accounts payable

Net cash used in investing activities
Payments for purchases of property, plant andequipment and intangible fixed assets
Purchase of shares in affiliated companies

Cash and cash equivalents at end of the period
Figures in the table are rounded down
© 2016 AIN HOLDINGS INC. All Rights Reserved.

8

Business Value Analysis
End-FY4/14
Shareholders’ equity ratio (%)
Market value equity ratio (%)
PER (times)
EPS (¥)PBR (times)
BPS (¥)ROA (%)ROE (%)EBITDA (¥ million)
EV/EBITDA (times)

Net D/E ratio (times)
Net cash (¥ million)
Shareholders’ value (¥ million)
Market capitalization (¥ million)

41.5
70.3
13.62
165.041.70
1,328.43
5.3
13.1
14,4054.49(0.14)
5,787
70,407
71,264End-FY4/15

42.0
117.9
21.72
195.452.82
1,511.57
5.8
13.8
16,2847.98(0.08)
3,613
133,605
134,598

End-FY4/16

38.1
121.0
21.39
249.693.19
1,679.69
6.2
15.6
20,8168.08(0.00)
236
168,520
169,318

Change(3.9)+3.1(0.33)+54.24+0.37+168.12+0.4+1.8+4,532+0.10+0.08(3,377)+34,915+34,720

Figures in the table are rounded down
Change：End-FY4/16 compared with End-FY4/15
Net D/E ratio = (Interest-bearing debt – Cash on hand and in banks) / Shareholders’ equity
Shareholders’ value = EV – Net interest-bearing debt
Market capitalization：Except treasury stock
Share prices used to calculate market capitalization:
End-FY4/14 ¥4,495 (End-Apr 2014), End-FY4/15 ¥4,245 (End-Apr 2015), End-FY4/16 ¥5,340 (End-Apr 2016).
Net cash = Cash on hand and in banks – Interest-bearing debt (Long- and short- term debt + Lease obligations )On October 1, 2014, the Company conducted a 2-for-1 stock split of common shares. EPS (¥) and BPS (¥) are calculated by deeming stock
splits to have occurred at the beginning of the previous fiscal year.
© 2016 AIN HOLDINGS INC. All Rights Reserved.

9

FY4/17 Plan (Consolidated)
We forecast net sales of ¥265,000 million, up 12.8% year on year and ordinary income of ¥16,700 million, up
10.2% year on year for the fiscal year ending April 30, 2016.

FY4/15
results

FY4/16
results

FY4/17plan

Gross profit

187,904
28,961

234,843
38,535265,000 +30,157
44,200 +5,665% of net sales

15.4

16.4

16.7

17,50923,91527,900

9.3

10.2

10.5

11,452

14,61916,300

6.1

6.2

6.2

11,69715,15816,700

6.2

6.5

6.3

6,197

7,917

9,000

% of net sales

3.3

3.4

3.4

Earnings per
share(¥)

195.45249.69

30.00

40.00

(¥ million)

Net sales

SG&A expenses% of net sales

Operating income% of net sales

Ordinary income% of net sales

Profit attributable toowners of parent

Annual dividend (¥)

YoYchangeYoYchange (%)

+12.8
+14.7

+3,985+16.7+1,681+11.5+1,542+10.2+1,083+13.7

283.84+34.15

+13.7

50.00

+10.00+25.0

Change (%):FY4/17 plan compared with FY4/16 results
Change:FY4/17 plan compared with FY4/16 results
Figures in the table are rounded down
On October 1, 2014, the Company conducted a 2-for-1 stock split of common shares. Earnings per share is calculated by deeming stock splits to haveoccurred at the beginning of the previous fiscal year.
© 2016 AIN HOLDINGS INC. All Rights Reserved.

10

Operating Outlook© 2016 AIN HOLDINGS INC. All Rights Reserved.

11

Review

Revisions of 2016
Growth strategy© 2016 AIN HOLDINGS INC. All Rights Reserved.

12

Review
Net sales increased 25.0% year on year reflecting the new store openings and increase of averageprescription price. Ordinary income rose 27.7% year on year by the increase of sales, improvement ofoperational efficiency, and cost reduction.
■ Year-on-year■ Vs plan(¥ million)

FY4/15
results

FY4/16
results

Net sales

187,904

234,843

Operatingincome11,452

14,6196.1

6.2% of net sales

YoYchange(%)(¥ million)

FY4/16plan

FY4/16
results+25.0

Net sales

218,280

234,843+27.7

Operatingincome13,40014,6196.1

6.2% of net sales

YoYchange(%)

+7.6
+9.1

27.7%UP
25.0%UP+6.5%

OthersReduction of laborcosts and operation
costs

+7.8%

+4.0%

New open
147 stores

Promotion of GE drugs
and home healthcare+1.6%

9.1%UP
7.6%UP+0.6%+8.2%
Increase of averageprescription price by
new drugs, etc+7.4%

FY4/16
results

Full contribution ofprevious year’s store
openings

FY4/15
results

Net sales© 2016 AIN HOLDINGS INC. All Rights Reserved.

Others+2.3%+17.2%

Opening more 22
stores than plan

Increase of
net sales

FY4/16
results
OperatingincomeFY4/16plan+4.3%
Reduction of laborcosts and operation
costs

+1.6%
Promotion of GE drugs
and home healthcare

+4.7%

+3.2%

Increase of averageprescription priceby new drugs, etc

Increase of
net sales

Net sales

Operatingincome13

Transition of Dispensing Fee Revisions
2014 68.7%¥7.2 trillion

8

Dispensing pharmacy
market (¥trillion)(¥million)

Non-hospital
dispensing ratio(%)

Dispensing
pharmacy sales

Segment income

80.0%(¥million)
20,000

2010

7

70.0%

63.1%
2004
6

60.0%

●1956: Law creating non-hospital
dispensing system was enacted

200,000●1994: Promoting non-hospital
dispensing system was started

53.8%●1997: consumption tax raised to 5%¥6.0 trillion●2014: consumption tax raised to 8%

15,0005

調
150,000
剤
Dispensing
売Pharmacy上sales
高100,000

50.0%●1886: Standard number of hospital bed system
was introduced (regulation of No. of bed)
4

●1996: Forecasted non-hospital dispensing ratio 2000
would be 60%
39.5%●1989: 3% consumption tax was introduced

40.0%

1993
・Non-hospital dispensing
ratio15.8%
・Market ¥0.85 trillion

32

No. of pharmacies

10,000● 2003: AIN PHARMACIEZ became largest
dispensing pharmacy company in Japan

26.0%

20.0%

5,000
2008
Dispensing
pharmacy sales¥100,000 million¥1.6 trillion
Dispensing pharmacy sales¥296 million

Segment
income30.0%●2002: Regulation of long-term prescriptions
was abolished10¥2.7 trillion

1997

50,000Year¥4.1 trillion

2015
Dispensing
pharmacy sales
207,142 million

10.0%

0

0

0.0%

56
56
-

Revision ratio on dispensing fees (%)
Revision ratio on dispensing fees (%)
Revision ratio on drug prices (%)(Drug prices base)

92
92
-

93
93

94
94

95
95

+5.0
+1.9
▲8.1

▲6.6

96
96

1

11

29

34

+3.3
+2.0

+1.5
+0.1

+3.4
+1.3

-

▲6.8

97
97

98
98

99
99

39

48

58

+1.25
+1.15
▲3.0

+1.5
+0.7

+1.9
+0.8

▲1.3
▲1.3

±0
±0

▲1.36
▲0.6

+0.38
+0.17

+1.55
+0.52

+1.38
+0.46

▲9.7

▲7.0

▲6.3

▲4.2

▲6.7

▲5.2

▲5.75

▲6.0

*1

00
00

01
01

75

92

02
02

03
03

04
04

05
05

148

148

193

218

06
06

07
07

247

356

08
08

09
09

375

397

10
10

11
11

448

494

12
12

13
13

560

616

14
14

1515

Plan
1616 計画

754

881

1001

+0.73
+0.22 *2
▲2.65
*3

+0.49
+0.17
▲7.77
→
→

Basic dispensing fee
1972
New
8 points

1990
31 points

1994(2 divisions)
40 points：
5,000 times or less
33 points：
Over 5,000 times

1996(4 divisions) 1997
45
→
46
40
→
41
35
→
36
20
→
20

→
→
→
→

1998
2004(3 divisions) 2006(2 divisions) 20082010→
49 points ：4,000 times or less and 70% or less 49 points
40 → 40 points：4,000 times or less42
44 points ：Over 4,000 times and 70% or less
70% or less
39 points→
39 points ：4,000 times or less and over 70%
1918 → 24 points：over 4,000 times and
21 points ：Over 4,000 times and over 70%
21 points
over 70%

2014(Subtraction due to non-settlement) 2016(Additional division)
41 points(31)：Except following

41points(31)：Except following
25points(19)：Over 4,000 times and over 70%

25 points(19)：Over 4,000 times andover 70%
Over 2,500 times andover 90%

Over 2,000 times and over 90%
Over 4,000 times from specifichospital
20points(15)：Same group over 40,000
times and over 95%

or lease contract withmedical institution

Standards for dispensing system premiums
1994
1992
1990
12 points 14 points
New：9 points
Stock 500 items
Concentration ratio: 90% or lessBasicdispensingfee

1996(Additional condition)
1998(Changed condition)
20 points
In case of over 600 times:70% or lessConcentration ratio: 70% or lessLicense to sell narcotic drugs
Services for after-hours(Multiple pharmacies approved)

2002(2 divisions) (Additional condition)
10 points：Stock 500 items
30 points：Stock 700 items
Conduct of training

2012(Additional condition)
10 points：700 items
30 points：1,000 items
Open time2014(Additional condition)

2016(1 division)

32points：Basic dispensing fee 41points,
12 points：24-hour rotation support,
home healthcare support supervising pharmacists having operational
experience for at least 5 years and
36 points：24-hour own support ,result of home healthcare enrollment for at least 1 year, 24-hour support,
result of home healthcare services (1case / year)
services

Premiums for generic drug dispensing systems
2006
2008(Dispensing 2010(Volume base)
6 points：20%
Started promoting GE
ratio)
13 points：25%
drugs by changing style 4 points：30%
17 points：30%
of prescription

Drug use history management and guidance fee (Instruction fee)
1992
1986
1994
1990
15 points
New：5 points 11 points
21 points

1996
30 points

1997
32 points

2000
22 points

2002
17 points

2006
22 points

2008(2 divisions)2010(1 division)

30 points
30 points
35 points:：For the elderly
aged over 75

2012
5 points：22%
15 points：30%
19 points：35%

2014(New standards)
18 points:55%
22 points:65%

2016
18 points:65%
22 points:75%

2012
41 points

2014(2 divisions)
41 points
34 points:
No notebooks

2016(Changed condition)
38 points：Basic dispensing fee 41 points,
handing over medication notebook,patients’ visiting within 6 months
50 points：Except the above

Pharmacists at the heart of local
communities instruction fee
2016 70 points：Consent from patients,
pharmacists having operational
experience for at least 3 years andenrollment for at least a half year

Drug management instruction fee for home medical care patients

Pharmaceuticalmanagement fee

1994
1996
New：550 points
550 points(Up to once a month) (Up to 2 times a month)

2008
2002
2012(Additional condition)
350 points： Resident in same facility / house Within 16㎞
500 points： Up to once a month
Except the above
300 points： After 2 times to 4 times 500 points： (Upin principle
to 4 times a month)

2014(Additional condition) 2016(Changed condition)
40 times a week
300 points
650 points(Up to 5 times a pharmacist a day)

Drug information provision fee (for patient medication notebook)2000
No. of basic dispensing fee is equal to No. ofPremiums by revisions are excerpted from Japan
monthly average receptions of prescriptions
Pharmaceutical Association
Includingthecorrespondence
to consumption tax
The income after FY 2008 is(※1:+1.4%、※2：+0.18%、※3:+2.99%)
operating income
Points inside of parentheses of 2014 and 2016 are the subtracted points© 2016 AIN HOLDINGS INC. All Rights Reserved.

2004

2006(1 division)

2008(2 divisions) 2010(1 division)

2012

15 points：Issue of notebooks
15 points：
15 points
Integrated into
17 points 15 points(Excluding the elderly (including the elderly instruction fee
10 points：Provide of drug information
10 points Drug information is(once a month)
integrated into instruction fee aged over 75)
aged over 75)

Premiums for special instruction
2000
2002
20 points
30 points

2004
28 points

2006
22 points

2008
Integrated into instruction fee

Premiums for specific drug management instruction
2010
2016
4 points
10 points

14

Dispensing Fee Revisions of 2016
BeforeExcept following

Points41(31)

After
1

Except following

Points41(31)

Over 4,000 times and over 70%
2
Basic dispensing fee

Over 4,000 times and over 70%
Over 2,500 times and over 90%

3Standards forsupport12

premiums

24-hour own support, result of homehealthcare services

Premiums for genericSame group over 40,000 times / month and over 95%
or Lease contract with medical institution

36

20(15)

Basic dispensing fee 41points & Inventory 1,200 items &Home healthcare services (1 case / year) & Notification of
Kakaritsuke-pharmasists & supervising pharmacists having

dispensing system

25(19)or Over 4,000 times from specific hospital

25(19)

24-hour rotation support, home healthcare

or Over 2,000 times and over 90%

32

operational experience for at least 5 years and enrollment for
at least 1 year

55%-65%1865-75%

18

Over 65%

22

Over 75%

22

Except following

41

No notebooks

34

drug dispensing
systems

Drug use history
management andguidance fee

Basic dispensing fee 41 points, handing over medication

notebook, patients’ visiting within 6 months

38

Except the above

50

Kakaritsuke-pharmacists instruction fee

70Specific drug management instruction

10

Premiums for specificdrug management

Specific drug management instruction

4

instruction

Items and requirements mentioned above is a part of dispensing fee revisions
Requirements for Kakaritsuke-pharmacists are mentioned at the other page
© 2016 AIN HOLDINGS INC. All Rights Reserved.

Points inside of parentheses are the subtracted points

15

Response① Basic Dispensing Fee
Due to the special measures of dispensing fee revisions in 2016, the number of pharmacies that gain basic
dispensing fee 1 decreased. We will respond to new rule and increase the number of those pharmacies.

■ No. of pharmacies that gain basic dispensing fees
March 2016

April 2016

820

533

52

40

－

299

Basic dispensing fee 1(41 points)
Basic dispensing fee 2(25 points)
Basic dispensing fee 3(20 points)■Pharmacies distribution map

Basic dispensing fee 3(Concentration rate)

299 pharmacies

95%
90%
Basic dispensing fee 2
40 pharmacies

70%

Basic dispensing fee 1
533 pharmacies

Target : 872 pharmacies© 2016 AIN HOLDINGS INC. All Rights Reserved.

2,000 times

4,000 times(monthly average of prescription
reception)
16

Response② Standards for Dispensing System Premiums
By the revisions in 2016, percentage of pharmacies that gain standards for dispensing system premiums
became 35.9%, and average premiums for generic drug dispensing systems became 14.7 points.

■ Percentage of pharmacies that gain standards for dispensing system premium
March 2016
Premium2(36points)
Premium1(12points)
No point

20.2%
69.8%
10.0%

April 2016

March 2017

Premium(32points)

35.9%

58.2%

No point

64.1%

41.8%

■ Progress of GE drugs use
No premiums

70.0%

64.8%

18.3
65.3%

18.6

19.0

19.0

64.2%

65.9%

67.4%

70.3%

60.0%

14.7

50.0%

126

40.0%

364

397

428

442

20.0%
10.0%
0.0%

98

105
91

93
81

91
76

15.3

18.7

71.5%

128

117

750
500

422

328

250
94

January
April
July
OctoberJanuary
April
May
October
2015
2016
Before January 2016：GE dugs share(volume) is calculated by old standards before revisions
Average premiums : Price per reception of prescriptions
Object :616 same stores (As of April 2016 )© 2016 AIN HOLDINGS INC. All Rights Reserved.

71.9%

171

177
81
75

1,000

17.4

345
362

124

70.5%

460

30.0%

GE drugs share (stores)

Premium2(22points)
Average premiums(Point)

Stores

GE drugs share(volume)

80.0%

17.9

Premium1(18points)

We will promote homehealthcare services andstrength the function of
Kakaritsuke-pharmacy.

120
74
March
2017

0
Plan

17

Kakaritsuke-Pharmacists
From revision of 2016, new condition about Kakaritsuke-Pharmacists is established. We will continue to take various
measures to strength the function of Kakarituke-Pharmacists, and make effort to respond new rule immediately.

■ Conditions and measures of Kakaritsuke-Pharmacists guidance fee
Usual operations• Operations about drug use history
management and guidance fee• Integrated management of patients’ visit toother department and drug information• 24-hour support• Feed back patients’ information to doctors• Management of surplus drugs

Additional condition

We will continue to strength the function of Kakaritsuke-Pharmacists
Efficient use of drug use history and notebooks
We have enhanced convenience of IT. We implement
continuous medical history management, promotion of
medication notebooks, and service of electronic medication
notebooks from April 2012.
24-hour support
Phone-based support and dispensing services where
necessary
Prescription question & suggestion, information
feedback
Addition to conventional prescription question, we strength
the education about drug information etc.
We will actively promote the measures such as proper staffing, community activities, andpromotion of Kakaritsuke-Pharmacists.

■No. of Kakaritsuke-Pharmacists• Operational experience for at least 3 years

March 2017 plan

3,899

3,899

3,322

3,322

3 years / 6 months / 32 hours

1,653

1,782

Kakaritsuke-Pharmacists

1,115

1,782

As of April 30,2016

March 2017 plan

672

2,156

All pharmacists• Belongs to pharmacy over 6 months

Working at pharmacies• Working over 32 hours per week
• Certified pharmacists, participation ofcommunity activity• Agreement from patients

May 2016■No. of certified pharmacists
No. of certified pharmacists

No. of Kakaritsuke-pharmacists is No.of accepted applications© 2016 AIN HOLDINGS INC. All Rights Reserved.

Conditions of certified pharmacists will effective on April 1, 201718

Growth process
Our group’s growth strategy is to consistently increase sales by new openings nationwide, to employ and cultivate
human resources, and to improve quality of pharmacies and drug and cosmetic stores.
(¥billion)
Net sales

Transcend 2000(¥billion)

FY4/11～FY4/14
Net sales ¥200 billion
Ordinary income ¥13.5 billion

250
25

Ordinary income

Challenge1000

2,500
250
2,000
200

Victory2005

1,500
150

FY4/01～FY4/05
Net sales ¥40 billion
Ordinary income ¥2.1 billion

1,000
100

200
20

FY4/06～FY4/08
Net sales ¥100 billion
Ordinary income ¥5 billion

150
15
100
10

550

500
50

Ordinary income

Net sales

300
3,000

0

0

4/93 4/94 4/95 4/96 4/97 4/98 4/99 4/00 4/01 4/02 4/03 4/04 4/05 4/06 4/07 4/08 4/09 4/10 4/11 4/12 4/13 4/14 4/15 4/16 4/17 (FY)V2005 4/05

4/93

4/95

4/97

4/99

4/01

4/03

Net sales

52

107

259

261

195

353

400

Ordinary
income

3

4

▲15

▲1

8

13

21

4/11 T2000 4/14

4/17
Plan

4/06

C1000

4/08

570

763

1,000

1,062 1,254 1,293 2,000 1,702 1,879 2,348 2,650

30

30

50

43

4/10

63

82

135

105

4/15

116

4/16

151

167

Our Growth Strategy

FY4/95

FY4/01

FY4/06

FY4/11■ Opening stores inconvenient location■ Hiring pharmacists■ New dispensing system■Dispensing in drugstores■ A nationwide network■ Safety and efficiency indispensing pharmacy
business■ Restructuring of drug andcosmetic store business■ Active new openings andM&A■ Efficient pharmacy
operation■ Efforts to promote wider
use of generic drugs■ Expansion of ainz &tulpe■ Opening strategy■ Improvement of profitability
GE drugs Automation
Home healthcare service■ Cost control in drug andcosmetic store division© 2016 AIN HOLDINGS INC. All Rights Reserved.

19

Growth strategy
From FY16/4, we started various measures for strengthening the function as Kakaritsuke-pharmacy inaddition to conventional safety and secure dispensing drugs. In drug and cosmetic store division, we will
introduce original product and change for further growth.

■ Growth of top line
Opening stores in convenient location and active M&A.

■ Strength function of Kakaritsuke-Pharmacists
To be local infrastructure by strengthening
pharmacies’ function continuously.

■ Human resources
Recruitment activity and development of humanresources with the energy of the entire company.
■ Growth of AINZ&TULPE
Differentiation by original products and increase of margin.

© 2016 AIN HOLDINGS INC. All Rights Reserved.

20

Top-Line
We opened 147 pharmacies including M&A in FY4/16, and plan 126 new openings in FY4/17.
We forecast the number of stores will be 1,059 in the end of FY4/17.
■ Number of stores
Hokkaido
114

933 (Dispensing pharmacy:881 Drug and cosmetic store:52）■ PlanFY4/16

FY4/17Plan

Nearhospital

47

22

42

mall

9

10

5

M&A

64

110

73

Drug andCosmetic store

4

5

6

Total

124

147

126

Dispensing

Results

pharmacy

Plan

Tohoku106

No. of stores(Forecast)
End-FY4/17

1,059

Kanto,Koshinetsu
389
Hokuriku,Tokai,Kinki
220

Total number of stores includes the two franchise stores
82 properties secured

Kyusyu,others
End-FY4/16
104
FY4/06 FY4/07 FY4/08 FY4/09 FY4/10 FY4/11 FY4/12 FY4/13 FY4/14 FY4/15 FY4/16■ Transition of dispensing pharmacies
Organic

16

14

23

24

21

18

27

38

36

40

32

M&A

17

18

91

3

3

35

28

38

26

119

110

5.30

7.54

4.82

2.21

3.45

5.60

5.51

5.09

3.94

4.77

5.37

8

3

5

8

2

5

9

10

6

21

15

218

247

356

375

397

448

494

560

616

754

881

EV/EBITDA ratio

Close
No. of total
storesEV/EBITDA ratio=EV（Purchase price）/EBITDA（Operating income + Depreciation and amoritization）© 2016 AIN HOLDINGS INC. All Rights Reserved.

No. of stores include temporary closed storesfrom FY4/11
21

New Hiring of Pharmacists
To strength the function of Kakaritsuke-Pharmacists, is necessary to recruit pharmacists. New 548 employees (pharmacists
375 and general staff173) joined our company in 2016 April, and it reached a record-high .
■ The transition of No. of national examination passers and new qualified pharmacists in AIN GroupNo. of newly qualified
pharmacists hired in AIN
Group
No. of pharmacists’national examination
passers (Pass rate)
Rate of newly qualified
pharmacists hired in AINGroup (Ratio※1)

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

159

174

284

259

97

42

189

251

251

229

375

8,202

9,154

10,487

11,301

3,787

1,455

8,641

8,929

7,312

9,044

11,488(74.3%)(75.6%)(76.1%)(74.4%)(56.4%)(44.4%)(88.3%)(79.1%)(60.8%)(63.2%)(76.9%)

1.9%

1.9%

2.7%

2.3%

2.6%

2.9%

2.2%

2.8%

3.4%

2.5%

3.3%

(7.0%）(7.0%)(8.8%)(7.5%)

( - )

( - )

(5.7%)(7.0%)(8.0%)(8.0%)( - )※1 : Ratio of newly qualified pharmacists hired in AIN Group to those that are hired in pharmacies in Japan.

Estimates : based on the result in AIN Group, and data from the Ministry of Health, Labour and Welfare, Council on Pharmaceutical Education.
600

General Staffs

Pharmacists
375

500

300

400
300

284

251

259

200
159

189

174
97

100
0

229
251

39

44

32

44

78

42
27

47

53

28

2006

2007

2008

2009

2010

2011

2012

2013

2014

No. of hired pharmacists increased© 2016 AIN HOLDINGS INC. All Rights Reserved.

No newly qualified
pharmacists

93

173

160

2015

2016

2017(Plan)

six-year pharmacy students graduated22

PJ－AIN GROUP
From 2009, we have made effort to improve operation, and in BPR2015, the economic benefits became¥1,033 million. By pharmacy-led project, adjustment of stock amount ¥4,897 million and stock periods
became 16.3 days in the end of 2016.
FY2009FY2012-FY2013

FY2014FY2015

BPR1

BPR2

BPR3

BPR2015

Effect amounts

Effect amounts

Effect amounts

Effect amounts: ¥700 million: ¥682 million: ¥645 million: ¥1,033 million

Same goal in the group
Economies of scale by thegroup purchasing

Pharmacy-led project PJ

Head office-led

Branches and store-led
September 2014 : ・Adjustment of obsolete inventory(No payout over 6 months)
・Start of transferring inventory
between pharmacies

August 2012 : Announcement of“New AIN Declaration”
October 2012 : Mr. Mikutsu’s PJ
April 2013 : ・Setting a goal of triple3+1
・Handling 30 prescription

・3 minutes dispensing ・3 days inventory
・Reduction of job separation rate

■ Transition
Amount of stock in stores

Amount of stock adjustment

Stock days

As end of April 2016
Estimated stock amount¥13,549 million

(day)
25.0

13,00011,000

20.6

9,000

2,331

18.2

7,000
8,356

5,000
April 2013

7,141
July

October

April

20.0

16.3

8,401

January
2015
Estimated stock amount： Calculated by the amount of stock per store in the end of April 2013.
© 2016 AIN HOLDINGS INC. All Rights Reserved.

April 2014

4,897

3,195

8,651
July

Stock days

Amount of stock(¥million)
15,00015.0

OctoberJanuary
April
2016
Amount of stock adjustment：Estimated stock amount －Amount of Stock in stores23

FY4/17 Plan （Dispensing Pharmacy Business）
We forecast net sales increase 11.9% year on year by contribution of the previous year’s 120 new
store openings including M&A. Meanwhile, we forecast segment income increase 4.1% year on year by
the measure of productivity improvement continuously.
YoYchangeYoYchange(%)

211,009 236,100 +25,091+11.9

FY4/16
results

FY4/17plan

Analysis(¥ million)
Net sales■ Net sales(¥ million)% of net sales

SG&A
expenses% of net sales

Operatingincome% of net sales

Segment
income% of net sales

30,268 32,480
14.3+2,212+7.3

13.8

11,629 12,780
5.5+1,151+9.9

5.4

Dispensing
pharmacy

Gross profit

FY4/17plan

YoY change(%)

Same store(730)

191,745▲1.0Stores opened in theprevious year(141)

28,892+131.1

New store(120)

9,460

‐

Others : 10 stores (FC:2stores, temporary closed: 8 stores)

18,639 19,700
8.8

Figures in the table are rounded down
Prescription volume:+11.9% YoY
Average prescription price: (1.1%)YoY© 2016 AIN HOLDINGS INC. All Rights Reserved.

+5.7■ Segment income+4.1(Decrease of gross profit margin)
We will actively take measures to responddispensing fee revisions, but forecast that grossprofit margin will be (0.5) points to 13.8%.

8.3

19,219 20,000
9.1+1,061

8.5+781(Reduction of SG&A expenses)

We forecast (0.1) points to 5.4% by reduction ofhome office costs.

24

Transition of original products’ sales composition
By development and sales of our original product, sales composition ratio and gross profit margin are goingup. We forecast sales composition ratio will be 36.0％ and gross profit margin will be 46.6% in FY 4/20.
■ Original products’ sales composition and Gross profit margin

46.6%

products’ sales composition

35.0%

45.0%
39.0%

Gross margin
37.2%

36.0%

10.0%
30.0%

35.0%
’

products

37.0%

5.0%

0.0%

7.0%

32.7%

33.0%

2.6%
April
2015

Gross profit margin

sales composition

15.0%

0.0%
31.0%
May

June

July

AugustSeptember OctoberNovember December

January
2016

February

March

April

May

FY4/20(Plan)

Gross profit margin：Ainz & Tulpe 42stores

Products

Brand name

VP

LIPS and HIPS

cocodecica

On-sale dateNovember 2013

July 2015

July 2015

SKU

21

88

1,193

SKU：As of the end of April 2016
© 2016 AIN HOLDINGS INC. All Rights Reserved.

25

FY4/17 Plan（Drug and Cosmetic Store Business）
We forecast net sales of ¥22,500 million, up 7.7% year on year by 6 new store openings.
We plan gross profit margin improve 2.5%, but segment income will be ¥(224) million due
to the increase of SG&A expenses by development cost of original product.

Net sales
Gross profit% of net sales

SG&A
expenses% of net sales

Operatingincome% of net sales

Segment
income% of net sales

YoYchange(%）

20,884 22,500 +1,616+7.7

FY4/17plan

7,236

8,350 +1,114

34.6

37.1

7,931

8,700

38.0

38.7

▲694

▲350

‐

‐

+769

+344

+15.4

+9.7

‐

Analysis■ Net sales(¥ million)
Drug and Cosmetic
Store Business(¥ million)

YoYchangeFY4/16
results

FY4/17plan

YoYchange(%）

Same store（47）17,700+2.0Stores opened in theprevious year（5）

3,530

+65.7

New store（6）

1,270

‐

■ Segment income（Improvement of gross profit margin）

▲459

▲224

‐

‐

+235

‐

We will improve gross profit margin +2.5
points to 37.1% by development of original
products.

Figures in the table are rounded down

© 2016 AIN HOLDINGS INC. All Rights Reserved.

26

FY4/17 Plan (Consolidated)
We plan that net sales increase12.8%, and ordinary income increase10.2%.

(¥ million)

FY4/16
results

FY4/17plan

YoYchangeGross profit

234,843
38,535265,000
44,200% of net sales

16.4

16.7

23,91527,90010.2

10.5

14,61916,300

6.2

6.2

15,15816,700

6.5

6.3

7,917

9,000

3.4

3.4

249.6940.00

283.8450.00

Net sales

SG&A expenses% of net sales

Operating income% of net sales

Ordinary income% of net sales

Profit attributable toowners of parent% of net sales

Net income per share(¥)

Annual dividend (¥)

YoYchange(%)+30,157+12.8+5,665+14.7+3,985+16.7+1,681+11.5+1,542+10.2+1,083+13.7+34.15+10.00

+13.7
+25.0

Figures in the table are rounded down

© 2016 AIN HOLDINGS INC. All Rights Reserved.

27

Inquiries related to this presentation should be addressed to

AIN HOLDINGS INC.
Corporate Planning Division
TEL(81)11-814-0010
FAX(81)11-814-5550
http://www.ainj.co.jp/
This document may not be reproduced or distributed to any third party without
prior approval of AIN HOLDINGS INC. This document has been prepared for
information purpose only and does not form part of a solicitation to sell orpurchase any securities. Information contained herein may be changed orrevised without prior notice. This document may contain forecastingstatements as to future results of operations. No forecast statement can be
guaranteed and actual results of operations may differ from those projected.

© 2016 AIN HOLDINGS INC. All Rights Reserved.

28