Financial Results for Q2 of FYE May 2021
(June 1, 2020 to November 30, 2020)
January 20, 2021
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: Hironori Abe or Ryota Kimura (hdinfo@create-sd.co.jp), Corporate Planning Office.

1

Consolidated Results for H1 of FYE May 2021
1. Statement of Income
2. Balance Sheet
3. Store Openings/Closings (Non-Consolidated)
4. Performance Highlights (Non-Consolidated)

Initiatives in H2 of FYE May 2021
1. New Store Openings/Renovation of Existing Stores
2. Our COVID-19 Response

3. Productivity Improvement
4. Enhanced Professionalism
5. Promotion of Digital Transformation (DX)

Revised FYE May 2021 Plan
1. Key Points of Revised Plan for Consolidated Performance

2. Revised FYE May 2021 Plan (Consolidated)2

Consolidated Results for H1 ofFYE May 2021

3

1. Consolidated Statement of Income for H1 of FYE May 2021
FYE May 2020
H1 Results(Millions of yen)FYE May 2021
H1 ResultsShare(%)(Millions of yen)

Share(%)

YoYchange(%)

Vs plan(%)

Net sales

153,305

100.0

168,671

100.0

110.0

101.9

Gross profit

42,02727.4

46,407

27.5

110.4

102.8

SG&A expenses

34,98522.8

36,724

21.8

105.0

98.7

Operating profit

7,041

4.6

9,683

5.7

137.5

122.0

Ordinary profit

7,219

4.7

9,907

5.9

137.2

121.7

Profit attributable toowners of parent

4,912

3.2

6,731

4.0

137.0

121.1

4

2. Consolidated Balance Sheet for H1 of FYE May 2021
(Millions of yen)

May 31, 2020

Nov. 30, 2020

Change153,423

157,194+3,770Current assets

87,16287,285+123

Non-current assets

66,261

69,908+3,64766,64664,972–1,674Current liabilities

59,59557,666–1,929Non-current liabilities

7,050

7,306+255

86,776

92,221+5,444

153,423

157,194+3,770Total assets

Total liabilities

Total net assets

Total liabilities and net assets

53. Store Openings/Closings (Non-Consolidated)
Store openings/closings and renovations
・Store openings: 19 drug stores / 8 prescription drug stores

Storeopening

Kanagawa

TokyoChiba

IbarakiAichi

TotalDrug stores

11510219

Prescription drugstores

430108Store closings: 3 drug stores (1 for S&B* and 2 to improve management efficiency) /1 in-store prescription drug store (to improve management efficiency)

・Renovations: 16 drug stores / 1 prescription drug store*scrap and build

No. of stores at year end

Nov. 30,
2020
No. ofstores

Kanagawa

Tokyo

Shizuoka

Chiba

Aichi

OtherTotal

Drug stores

360

104

8845

1826

641

In-store
pharmacies
Rate of in-store
pharmacies
Dedicated prescription
drug stores

12335

181285201

34.2%

33.7%

20.5%

26.7%

44.4%

19.2%

31.4%

266020236Supermarkets

5000005

Total no. of stores

3911108847

18286826

3. Store Openings/Closings (Non-Consolidated)
Store openings in collaboration with fresh produce category
One of these was converted from existing■Store openings: 3 stores (8 stores as of November 30, 2020) Note:format
through expansion and renovation.

Kohoku Tsunashima-Higashi (Kanagawa)Shin-Yokosuka Kamoi (Kanagawa)

Tsukuba Mirai* (Ibaraki)* Converted from existing format through expansion and renovation.

74. Performance Highlights (Non-Consolidated)
Net sales —Monthly trend in sales at existing stores—■All stores: Up 8.7% YoY (Up 1.9% vs. target)
Existing stores: Up 4.1% YoY (OTC: Up 3.8%; prescription: Up 6.8%)
・Sales per customer up due primarily to increased demand for products related to preventing infection and bulk
buying of food and daily necessities (Up 7.2% YoY)
・Number of customers down due primarily to bulk buying, reduced hours of operation, and voluntary suspensionof sales promotions (Down 3.1% YoY)（％）

115Net sales

Monthly trend in YoY sales at existing stores

No. of customers

Sales per customer

110105100
95
9085

Reduced hours ofoperation
Voluntarysuspension ofsales promotions

June

Addition of EDLP*

Reactionary drop following previous
year’s consumption tax hike

items

July

Aug.

Sept.

Oct.

Nov.

June

July

Aug.

Sept.

Oct.

Nov.

H1 total

Net sales

102.7%

108.5%

108.6%

87.4%

111.8%

107.1%

103.8%

No. ofcustomers
Sales percustomer

96.3%

97.2%

100.0%

90.0%

99.3%

99.0%

96.9%

106.6%

111.7%

108.6%

97.1%

112.6%

108.2%

107.2%* Every day low price8

4. Performance Highlights (Non-Consolidated)
Net sales —Net sales by segment—
・Increased demand in categories related to COVID-19
・Prescriptions up 0.1 pts to 9.2% as a percentage of sales
FYE May 2020

FYE May 2021

H1 Results

H1 Results

Net sales(millions of yen)

Share (%)

36,811OTC

Prescriptions

Medical and health products

Cosmetics

Net sales(millions of yen)

Share (%)

24.2

44,446

26.9

120.7

22,98615.1

29,228

17.7

127.2

13,824

9.1

15,2189.2

110.1

20,78013.7

20,43712.4

98.3

YoY change (%)

Food products

60,94740.0

64,707

39.1

106.2

Daily products

25,39916.7

27,511

16.6

108.3

Other*

8,289

5.4

8,333

5.0

100.5

Total

152,227100.0

165,437

100.0

108.7

Masks, sanitizers,
etc.
Products related topreventing infection

Decreased demandassociated withlifestyle changes

Increased demand
due to consumers
staying home

* “Other” includes stationery, baby products, clothing, pet products, and gardening products.

94. Performance Highlights (Non-Consolidated)
Gross profit margin/SG&A ratio■Gross profit margin: 27.7% Up 0.1 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 products to prevent infection■SG&A ratio: 22.2% Down 1.1 pts YoY Down 0.7 pts vs target

Personnel expense ratio: 11.8% Down 0.3 pts YoY Down 0.4 pts vs target
Other expense ratio: 10.4% Down 0.7 pts YoY Down 0.3 pts vs target
・Lower personnel expenses resulting from reduced hours of operation and voluntarysuspension of sales promotions
・Lower expenses for sales promotions and points due to voluntary suspension of sales
promotions10

4. Performance Highlights (Non-Consolidated)
Dispensing department—Net sales/No. of prescriptions/prescription unit price —■Sales at all stores: Up 10.1% YoY Sales at existing stores: Up 6.8% YoY
・Number of prescriptions down due to fewer exams and longer-term prescriptions, but
prescription unit prices up
FYE May 2020
H1 Results

FYE May 2021
H1 Results

YoY change(%)

13,824

15,218110.1

No. of prescriptions (thousands)

1,531

1,572

102.7

Prescription unit price (yen)

8,891

9,523

107.1

13,766

14,697106.8

No. of prescriptions (thousands)

1,525

1,509

98.9

Prescription unit price (yen)

8,886

9,590

107.9

685

701

102.3

132

152+2045

46

103.2

40.7

43.1+2.4

Sales at all stores (millions of yen)

Sales at existing stores (millions of yen)Home-based dispensing sales(millions of yen)
No. of stores offering home-based dispensing

services
No. of prescriptions (thousands)

Gross profit margin at all stores (%)

No. of prescriptions
down due to fewer
exams, but unit
prices up

No. of patientschoosing homebased dispensing
up due to COVID-19

Up as result ofnegotiations after
drug price revision11

4. Performance Highlights (Non-Consolidated)
Prescription drug store department—Home-based dispensing services/premiums—■Expansion of home-based dispensing services
・No. of stores offering home-based dispensing services at year end: 152 stores (up 20 fromprevious year)
・No. of patients supported by home-based services: 3,581 people (Up 133 from previous year)(Stores)■Premiums for local support system
No. of stores at year end

・No. of stores with premiums at year end: 84 stores(up 17 from previous year)

No. of stores at year end

213237■Premiums for generics dispensing system
・Pct. of stores with premiums at year end: 88.6%(up 3.6 pts from previous year)
・Rate of generics use: 80.9% (up 1.7 pts fromprevious year)

85.0%

88.6%

12

Initiatives in H2 of FYE May 2021

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1. New Store Openings/Renovation of Existing Stores
Store openings/closings and renovations—H2 forecast—■Drug stores: 21 stores(Full-year total: 40 stores)・Continue pursuit of dominance in existing areas■Prescription drug stores: 28 stores(Full-year total: 36 stores)

Drug stores

641

In-store pharmacies

201

Rate of in-store pharmacies

31.4%

Nov. 30, 2020
Dedicated prescription
No. of stores
drug stores
Supermarkets

5All stores

682

・Store openings in collaboration with regional medical
Drug stores
FYE May
institutions
2021 H2
In-store pharmacies
・In-store openings leveraging drug stores’ ability toNo. of store Dedicated prescription
attract customers
openings
drug stores・Reassign OTC pharmacists to dispensing department(Forecast)■Renovations: 18 stores(Full-year total: 35 stores)
・Review merchandising according to location andregional needs
・In-store prescription drug stores・Convert large stores into collaborative stores withfresh produce category
・Switch from supermarket to combination drug store
category

36

21
27
1All stores

22

Drug stores

662

In-store pharmacies

228

May 31, 2021
Rate of in-store pharmacies
No. of stores Dedicated prescription
drug stores(Forecast)

34.4%

37

Supermarkets

4All stores

703

Closings: 4 drug stores / 1 in-store prescription drug store142. Our COVID-19 Response
Peri-/Post-COVID-19 Sales Measures■Strengthening of EDLP and PB

Lowering ofprices

Prevention of“three Cs”

・Price of around 1,500 items lowered gradually
starting in July
⇒Plan is to continue gradually expanding items
・Continue voluntary suspension of sales
promotions that bring in customers on specificdays
・New development and revamping of private brand(PB) products■Utilization of digital tools
・Promote shift to non-contact cashless transactions
・Promote habitual use and secure regular customers

Non-contact(cashless)Original electronic money

Osaifu Hippo transaction ratio
No. of official smartphone app
downloads
Ratio of usage of prescription
transmission app

Nov. 30, 2020

20.6%

May 31, 2021 (Target)⇒

0.97 million ⇒5.0%⇒23.5%
1.15 million
6.5%

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3. Productivity Improvement
Efforts to improve operational efficiency■Enhancement of productivity through introduction ofsemi-self-checkout registers
・Introduced at 22 stores as of November 30, 2020, will continue topromote further introduction■Optimization of working hours through control of man-hours
・Allocate human resources according to review of operating hours andsales promotions
・Strengthen management of working hours and overtime by checking
progress at each store

Shift to online internal training■Implementation of remote training utilizing tablets
・Train dispensing medical assistants in operations
・Utilize as educational tool for new employees■Implementation of training and workshops using Zoom
・Customer service training, manager skill development training,
qualified employee workshops, etc.
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4. Enhanced Professionalism
Prescription drug store department■Expansion of pharmacies partneredwith regional medical institutions・Train “family pharmacists”
・Establishment of structure for expandinghome-based dispensing services
・Expansion of premiums for local supportsystem

Nov. 30, 2020

May 31, 2021 (Target)"Family pharmacists"

118

Stores offering homebased services

152 stores ⇒Premiums for local
support system⇒

200Achieved(Initial target of 142 stores)

84 stores ⇒90 stores(Initial target of 110 stores)■Efforts to shift to online operations
・Introduce online instructions for taking prescriptions at all stores
・Promote use of prescription transmission app
・Phone-based instructions for taking prescriptions (0410 support)
・Introduce online qualification checks (use of MyNumber card as healthinsurance card) at all stores■Efforts to realize non-face-to-face delivery of medicines
・Participation in field tests for locker-based prescription drug delivery service
through collaboration between Kanagawa Prefecture and SPACER⇒Tests launched at 4 stores in Kanagawa in December 202017

5. Promotion of Digital Transformation (DX)
Improvement of customer experience using digital tools
Respond to changes in society and develop stronger, longer lasting relationships byproviding optimal methods/services to each customer and patient■Establishment of new department specializing in customer service
・Promote sales promotion measures utilizing digital tools in addition totraditional sales promotions
・Link with online shop and order/back-order function■Launch of interdepartmental project to promote DX
・Promote better customer experiences by strengthening crosscompany collaboration and implementing DX
Promotion of use of Osaifu Hippo and official smartphone app, 1-to-1
marketing,online shop and order/back-order function, BOPIS initiative, semiself-checkout registers,
online instructions for taking prescriptions, utilization of prescription
transmission app, etc.

18

Revised FYE May 2021 Plan

19

1. Key Points of Revised Plan for Consolidated Performance
Assumptions of revised plan
■Initial plan・Impact of COVID-19 expected to remain (even if decreasing) through H1 (November 2020)■Revised plan・Impact of COVID-19 will continue beyond H2, and situation will remain uncertain

Revised full-year forecasts
Net sales

333.7 billion yen ⇒ Revised plan: 338.3 billion yen (up 4.6 billion yen)

Operating profit

16.5 billion yen ⇒ Revised plan: 17.8 billion yen (up 1.3 billion yen)

Ordinary profit

16.9 billion yen ⇒ Revised plan: 18.2 billion yen (up 1.3 billion yen)

Profit attributable toowners of parent

11.3 billion yen ⇒ Revised plan: 12.3 billion yen (up 1.0 billion yen)20

2. Revised FYE May 2021 Plan (Consolidated)FYE May 2020

FYE May 2021

(Results)(Revised plan)(Millions of yen)

Share(Millions of yen)

(%)

Share

YoY change

(%)

(%)

Net sales

319,588100.0

338,330

100.0

105.9

Gross profit

88,98627.8

93,000

27.5

104.5

SG&A expenses

71,19222.375,140

22.2

105.5

Operating profit

17,793

5.6

17,8605.3

100.4

Ordinary profit

18,2105.7

18,2805.4

100.4

Profit attributable toowners of parent

12,2543.8

12,3003.6

100.4

21