This document is an English translation of a statement written originally in Japanese. The Japanese original should
be considered as the primary version.

Consolidated Financial Results for Six Months Ended November 30, 2023
(Japanese GAAP)
January 9, 2024
Name of Listed Company: CREATE SD HOLDINGS CO., LTD.
Listing: Tokyo Stock Exchange
Securities code: 3148
URL: https://www.createsdhd.co.jp/English/tabid/129/Default.aspx
Representative: Taizo Hirose, Representative Director and President
Contact: Tetsuya Yamazaki, Executive Officer and General Manager, Finance andTel: +81-45-914-8241
Accounting Dept.
Scheduled filing date of Securities Report:
Scheduled date of start of dividend payment:
January 12, 2024
February 5, 2024
Supplementary materials for the financial results: Yes
Quarterly results briefing sessions: Yes(For institutional investors and securities analysts)(Figures are rounded down to the nearest million yen)

1. Consolidated Second Quarter Results for Fiscal Year Ending May 31, 2024 (June 1, 2023 to November 30, 2023)(1) Consolidated Operating Results(Figures in percentages denote the year-on-year change)
Profit attributable toOperating profit
Ordinary profit
owners of parent

Net sales
Millions of yen%

Millions of yen%

Millions of yen

Six months ended
207,451
10.7
9,852
6.7
10,191
November 30, 2023
Six months ended
187,392
7.8
9,235
4.4
9,451
November 30, 2022
(Note) Comprehensive income: Six months ended November 30, 2023: ¥6,876 million (6.9%)
Six months ended November 30, 2022: ¥6,432 million (4.2%)
Earnings per share
Six months ended
November 30, 2023
Six months ended
November 30, 2022%

Millions of yen

%

7.8

6,875

7.2

4.0

6,412

4.0

Diluted earnings per share

Yen

Yen

108.76102.90101.43－(2) Consolidated Financial Position
Total assets

Total net assets

Millions of yen

Equity ratio

Millions of yen%

121,607
116,409

59.9
59.7

As of November 30, 2023
203,023
As of May 31, 2023
194,941(Reference) Net assets: As of November 30, 2023: ¥121,578 million
As of May 31, 2023: ¥116,409 million

2. Dividend Payments
Dividends per shareFirst quarter
Yen

Second quarter Third quarter
Yen

Fiscal year ended
25.00－
May 31, 2023
Fiscal year ending
27.00－
May 31, 2024
Fiscal year ending May 31,
2024 (forecast)(Note) Revisions to most recently announced dividend forecast: None

Year-end

Annual

Yen

Yen

Yen

－

27.00

52.00

－

27.00

54.00

3. Consolidated Financial Forecast (From June 1, 2023 to May 31, 2024)
Summary of consolidated financial forecast
Net sales
Millions of yen(Figures in percentages denote the year-on-year change)
Profit attributable toEarnings per
Ordinary profit
owners of parent
share

Operating profit%

Millions of yen

Millions of yen%

Millions of yen%

Yen

Full-year
404,100
6.1
19,2401.7
19,800(Note) Revisions to most recently announced financial results forecast: None%

1.9

13,0000.6

205.64Notes(1) Significant changes of subsidiaries in six months ended November 30, 2023 (changes in specific subsidiaries
accompanied by a change in the scope of consolidation): None
Newly consolidated: ― companies (company name(s));

Deconsolidated: ― companies (company name(s))(2) Application of accounting treatments specific to preparation of quarterly consolidated financial statements: Yes(3) Changes in accounting policies, changes of accounting estimates and restatement(i) Changes in accounting policies due to amendments to accounting standards: None(ii) Other changes in accounting policies: None(iii) Changes in accounting estimates: None(iv) Restatements: None(4) Issued shares (common shares)(i) Issued shares (including treasury shares) at
period-end:(ii) Treasury shares at period-end:(iii) Average issued shares during period:

Six months ended
November 30, 2023
Six months ended
November 30, 2023
Six months ended
November 30, 2023

66,819,342 shares
3,600,857 shares
63,218,485 sharesFiscal year ended
May 31, 2023
Fiscal year ended
May 31, 2023
Six months ended
November 30, 2022

66,819,342 shares
3,600,857 shares
63,218,553 shares

Note on issued sharesThis financial summary is not subject to a quarterly review by a certified public accountant or audit firm.
Cautionary statement regarding business results forecasts and special notes(Notes concerning forward-looking statements, etc.)
The financial forecasts and other forward-looking statements contained herein are based on currently available information andcertain assumptions considered by the Company to be reasonable. Actual financial results may differ materially due to various
factors. Refer to “(3) Overview of Consolidated Financial Results Forecast and Future Expectations” on page 3 of the supplementarymaterial for the underlying assumptions and proper use of the forecasts.

Contents
1. Qualitative Information Related to Consolidated Financial Results ........................................................................................2(1) Overview of Operating Results ..........................................................................................................................................2(2) Overview of Financial Position ..........................................................................................................................................4(3) Overview of Consolidated Financial Results Forecast and Future Expectations ................................................................4
2. Consolidated Financial Statements and Notes .........................................................................................................................5(1) Consolidated Balance Sheet ...............................................................................................................................................5(2) Consolidated Statements of Income and Comprehensive Income ......................................................................................7
Consolidated Statement of Income ......................................................................................................................................7
First six months of the fiscal year ending May 31, 2024 ..................................................................................................7
Consolidated Statement of Comprehensive Income .............................................................................................................8First six months of the fiscal year ending May 31, 2024 ..................................................................................................8(3) Consolidated Statements of Cash Flows ...........................................................................................................................9(4) Notes to Consolidated Financial Statements ....................................................................................................................10
Going concern assumption .................................................................................................................................................10
Notes in case of significant changes in shareholders’ equity .............................................................................................10
Application of specific accounting treatment in the preparation of consolidated financial statements ..............................10
Changes to accounting policies ..........................................................................................................................................10
Changes in accounting estimates........................................................................................................................................10
3. Supplemental Information...................................................................................................................................................... 11(1) Production, Orders Received, and Sales ........................................................................................................................... 11―1―

1. Qualitative Information Related to Consolidated Financial Results(1) Overview of Operating Results
During the first six months of fiscal year ending May 31, 2024, Japan’s economy proceeded to recover in line with the reclassificationof COVID-19 as a Class 5 disease, but the outlook still remains uncertain due to raw material and energy prices remaining high and afall in consumer sentiment caused by the rise in the cost of living.
In the drug store industry, while there were signs of an increase in demand for cosmetics thanks to the easing of restrictions on
movements and an increase in demand for medical and health products with the spread of colds and the flu, there is less demand for
products to contain the spread of the coronavirus and a growing need for households to save money owing to the rising cost of living.
In addition, there are impacts from from lower prescription unit prices as a result of the revisions to medical fees and drug prices, newstore openings by competitors from other industries, and intensification of price competition. Due to these factors, business conditions
for the Group remain harsh.
Under these circumstances, the Group is promoting comprehensive health care support for regional contribution in the domains ofdaily life, prevention, medical care, and nursing care as we continue to strengthen our dominant position in existing areas, mainly inin-store prescription drug stores, to achieve the Medium-term Management Plan.
Drug Stores
Amid the further rise in the cost of living for consumers and the growing need for households to save money due to raw material andenergy prices remaining high, the Group has continued to promote its everyday low price (EDLP) strategy, offering products ataffordable prices at all times to serve as a lifeline supporting the health and lifestyles of local customers and patients. We also continued
our efforts to realize quick, one-stop shopping by promoting in-store prescription drug stores and improving convenience and expertisein small trade areas by expanding the lineup of fresh foods and other food products.
Sales and the number of customers at existing stores remained steady during the first six months of fiscal year ending May 31, 2024.
This was a result of an increase in demand for common cold medicines and cosmetics products and the continued success of EDLP
measures, including for daily necessities, despite the drop in demand for products to contain the spread of the coronavirus. In theprescriptions division, the number of prescriptions filled remained steady as a result of efforts to promote in-store prescription drug
stores and enhance interpersonal work, despite the impact of regulatory revisions to medical fees and drug prices. As a result, both net
sales and profit were up, exceeding projections and those of the previous year.
During the period, we opened 16 new drug stores. On the other hand, we closed three stores, two due to expiration of contracts andone from the standpoint of improving management efficiency. New prescription drug store openings included 18 new in-store
prescription drug stores and one dedicated prescription drug store in a medical mall.
Supermarkets
We worked on such aspects as the delivery and sale of delicatessen dishes and fresh meats prepared in Yuri Store drug
store/supermarkets to drug stores in the Group and continued our efforts to improve convenience in small trade areas to generatesynergies with the drug store business. The number of stores as of November 30, 2023 remained unchanged from the end of theprevious fiscal year at five stores. This includes two food supermarkets (one of which is temporarily closed for renovation) and threecombination drug store/fresh produce stores.
Nursing Care
As society ages, we are operating two paid assisted living facilities characterized by delicious meals for elderly people who want tolive safely and securely under the care of nursing staff as well as 37 half-day rehabilitative adult care centers for those who want tocontinue living at home. For our paid assisted living facilities and adult day care services we have put every effort into customer
service, which is one of the distinctive characteristics of our Group, to increase user satisfaction and improve occupancy rates.
Owing to the efforts above, the number of the Group’s drug stores reached 730 as of November 30, 2023, and the total number ofprescription drug stores reached 389, including 37 dedicated prescription drug stores and 352 in-store prescription drug stores. The
Group also has two supermarkets and three combination drug store/fresh produce stores in the supermarket business as well as two
paid assisted living facilities and 37 half-day adult care centers in the nursing care business.
As a result of the above, the financial results for the first six months of the fiscal year ending May 31, 2024 were as follows: Net―2―

sales came in at 207,451 million yen (up 10.7% year on year), operating profit was 9,852 million yen (up 6.7%), ordinary profit was
10,191 million yen (up 7.8%), and profit attributable to owners of parent was 6,875 million yen (up 7.2%).

(2) Overview of Financial Position
Total assets as of November 30, 2023 were 203,023 million yen, up 8,081 million yen from the end of the previous fiscal year. The
main factors were a 632 million yen increase in accounts receivable - trade, a 1,534 million yen increase in merchandise, and a 9,566
million yen increase in non-current assets as well as a 3,487 million yen decrease in cash and deposits.
Total liabilities as of November 30, 2023 were 81,415 million yen, up 2,883 million yen from the end of the previous fiscal year.
The main factors were a 1,461 million yen increase in accounts payable - trade, a 152 million yen increase in accrued income taxes, a
350 million yen increase in accounts payable - other included in “Other” under current liabilities, and a 369 million yen increase inaccrued expenses.
Net assets as of November 30, 2023 were 121,607 million yen, up 5,198 million yen from the end of the previous fiscal year. The
main factor was recording 1,706 million yen in dividends paid and 6,875 million yen in profit attributable to owners of parent.
Cash Flows
Cash and cash equivalents as of November 30, 2023 were 33,638 million yen, down 3,487 million yen from the end of the previous
fiscal year.
Cash flows as of November 30, 2023 were as follows:
Cash flows from operating activities
Net cash provided by operating activities amounted to 9,843 million yen, up 1,595 million yen year on year. The main factors were
profit before income taxes of 10,163 million yen, depreciation of 2,272 million yen, income tax refunds of 832 million yen, an
increase in inventories of 1,563 million yen, an increase in trade payables of 1,461 million yen, and income taxes paid of 4,257
million yen.
Cash flows from investing activities
Net cash used in investing activities amounted to 11,646 million yen, down 366 million yen year on year. This was mainly due to6,416 million yen for the purchase of property, plant and equipment associated with the store openings and 5,442 million yen for
store openings in progress.
Cash flows from financing activities
Net cash used in financing activities amounted to 1,684 million yen, up 229 million yen year on year. This is the result of dividends
paid of 1,706 million yen.

(3) Overview of Consolidated Financial Results Forecast and Future Expectations
At this time, no changes have been made to the forecast for the fiscal year ending May 31, 2024 announced on July 10, 2023.

―3―

2. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet(Millions of yen)
FY2022(As of May 31, 2023)

2Q of FY2023(As of November 30, 2023)

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade37,526
13,312

34,038
13,945Merchandise
Other38,497
10,29540,031
10,133

Total current assets

99,631

98,148Non-current assets
Property, plant and equipment
Buildings and structures, net

27,762

31,487Land
Other, net

25,211
4,858

25,464
8,036

Total property, plant and equipment

57,83264,988Intangible fixed assets
Goodwill

473

413

Other

1,055

886

Total intangible assets

1,529

1,299

Long-term loans receivable
Leasehold and guarantee deposits

9,654
11,576

9,902
11,680Other
Allowance for doubtful accounts

14,759(40)

17,042(40)

Total investments and other assets

35,94838,585Investments and other assets

Total non-current assets

95,310104,874

194,941

203,023

50,485
3,386

51,947
3,539

378

341

145

78

171
89

160
76

Provision for loss on store closings
Other

8
15,487－
16,521

Total current liabilities

70,152

72,666

Non-current liabilities
Net defined benefit liability

Total assets
Liabilities
Current liabilities
Accounts payable - trade
Accrued income taxes
Accrued bonuses
Provision for bonuses for directors (and otherofficers)
Provision for point card certificates
Asset retirement obligations

3,310

3,464

Asset retirement obligations
Provision for loss on subleasing

3,579
30

3,758
27

Other

1,459

1,498

Total non-current liabilities
Total liabilities

―4―

8,379

8,749

78,53281,415

(Millions of yen)
FY2022(As of May 31, 2023)

2Q of FY2023(As of November 30, 2023)

Net assets
Equity capital
Share capital
Capital surplus

1,000
934

1,000
934

Retained earnings
Treasury shares

118,741(4,393)

123,910(4,393)

Total shareholders’ equity

116,282

121,451

Valuation difference on available-for-sale securities
Remeasurements of defined benefit plans

39
87

43
83

Total accumulated other comprehensive income

Accumulated other comprehensive income

126

127

Share options－

29

Total net assets¥116,409

121,607

Liabilities and net assets

194,941

203,023―5―

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
First six months of the fiscal year ending May 31, 2024

Net sales
Cost of sales

1H of FY2022(From June 1, 2022 toNovember 30, 2022)
187,392
136,402(Millions of yen)
1H of FY2023(From June 1, 2023 toNovember 30, 2023)
207,451
153,485

Gross profit

50,98953,965

Provision for point card certificates
Salaries and allowances173
17,009160
17,893

Provision for bonuses
Provision for directors’ bonuses

289
68

309
74

Retirement benefit expenses
Depreciation and amortization

406
1,962

384
2,198

Land/office rent
Other

8,243
13,601

8,567
14,525

Total selling, general and administrative expenses

41,754

44,113

9,235

9,852

Interest income
Dividend income

44
0

42
0

Gain on receipt of donated non-current assets
Rent income

18
161

12
175

Subsidy income
Other

27
76

117
91

Total non-operating income

329

439

0

4

Rental expenses
Other

83
29

81
14

Total non-operating expenses

112

100

9,451

10,191－
7

26
1

Loss on store closings

3－

Total extraordinary losses

1028

Profit before income taxes

9,440

10,163

Income taxes

3,028

3,287

Profit

6,412

6,875

－

－

6,412

6,875

Selling, general and administrative expenses

Operating profit
Non-operating profit

Non-operating expenses
Compensation expenses

Ordinary profit
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current assets

Profit attributable to non-controlling interests
Profit attributable to owners of parent―6―

Consolidated Statement of Comprehensive Income
First six months of the fiscal year ending May 31, 2024

ProfitOther comprehensive income

1H of FY2022(From June 1, 2022 toNovember 30, 2022)
6,412(Millions of yen)
1H of FY2023(From June 1, 2023 toNovember 30, 2023)
6,875

5
14

4
(4)

Valuation difference on available-for-sale securities
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income

20

0

6,432

6,876

6,432

6,876

－

－

Comprehensive income attributable to:
Owners of parent
Non-controlling interests―7―(3) Consolidated Statements of Cash Flows(Millions of yen)
1H of FY2023(From June 1, 2023 toNovember 30, 2023)

1H of FY2022(From June 1, 2022 toNovember 30, 2022)
Cash flows from operating activities
Profit before income taxes

9,440

10,163

Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts

2,028
(0)

2,272
(0)

Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for
directors (and other officers)
Increase (decrease) in provision for point cardcertificates
Increase (decrease) in provision for loss on subleasing

(40)

(36)

(72)

(66)

8

(10)

(3)

(3)

Increase (decrease) in retirement benefit liability
Interest and dividend income

209
(45)

148
(43)

Decrease (increase) in trade receivables
Decrease (increase) in inventories(1,321)(1,644)(632)(1,563)

Increase (decrease) in trade payables
Increase (decrease) in advances received

1,864
85

1,461
182

Other

904

1,394

Subtotal

11,412

13,266

Interest and dividends received

1

1

Income taxes paid
Income taxes refund(3,965)799(4,257)832

Net cash provided by operating activities

8,248

9,843

Cash flows from investing activities
Purchase of property, plant and equipment(9,298)(6,416)

Purchase of intangible assets
Payments into time deposits

(118)
(400)

(13)
(400)

Proceeds from withdrawal of time deposits
Long-term loan advances

400
(158)

400
(222)

Proceeds from collection of long-term loans receivable
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee
deposits
Purchase of long-term prepaid expenses

497
(21)

516
(9)

74

71

(27)

(59)

(2,934)(29)(5,442)(109)

Payments for store openings in progress
Payments into deposit money
Other
Cash flows from investing activities

1

38(12,013)(11,646)(0)(1,454)－(1,706)

Net cash used in financing activities
Purchase of treasury shares
Dividends paid
Other

－

22

(1,454)(1,684)

Net increase (decrease) in cash and cash equivalents(5,219)(3,487)

Cash and cash equivalents at beginning of period

41,667

37,126

Cash and cash equivalents at end of period

36,447

33,638Net cash used in financing activities―8―(4) Notes to Consolidated Financial Statements
Going concern assumption
Not applicable

Notes in case of significant changes in shareholders’ equity
Not applicable

Application of specific accounting treatment in the preparation of consolidated financial statements
We make a reasonable estimate of the effective tax rate to be imposed on profit before income taxes in the fiscal year ending May
31, 2024, including the first six months, after applying tax effect accounting and perform the calculation by multiplying profit
before income taxes by the estimated effective tax rate.

Changes to accounting policies
Not applicable

Changes in accounting estimates
Not applicable―9―3. Supplemental Information(1) Production, Orders Received, and Sales
1) Sales results(i) Sales results by product division
Sales results by product division during the first six months of the fiscal year ending May 31, 2024 were as follows:
1H of FY2023(From June 1, 2023 toNovember 30, 2023)
Product division

Amount (millions of yen)

YoY change (%)

Drug Stores
Medical and health products

54,654107.1

OTC30,497

99.7

Prescription drug stores

24,157118.1

Cosmetics

24,038

107.9

Food products

86,056

117.0

Daily products

30,965

107.1

Other

9,571

108.6

Subtotal

205,286

111.2

1,012

60.2

Paid assisted living facilities

342

95.9

Adult day care services

727

105.5

Subtotal

1,069

102.2

Revenue from contracts with customers

207,368

110.7

Other revenue (Notes)

83

141.5

Total

207,451

110.7

Supermarkets
Nursing Care

(Note) Other revenue includes rent income based on the Accounting Standard for Lease Transactions (ASBJ Statement No. 13).
(ii) Sales results by region
Sales results by region during the first six months of the fiscal year ending May 31, 2024 were as follows:
1H of FY2022(From June 1, 2022 toNovember 30, 2022)
Amount(millions of yen)

1H of FY2023(From June 1, 2023 toNovember 30, 2023)

Share (%)

Amount(millions of yen)

Share (%)

Kanagawa

116,46162.1

127,074

61.3

Tokyo

27,258

14.5

29,596

14.3

Shizuoka

20,52911.0

22,880

11.0

Chiba

13,574

7.2

17,340

8.4

Other

9,569

5.1

10,558

5.1

Total

187,392

100.0

207,451

100.0

―10―

2) Purchase results
Purchase results by product division during the first six months of the fiscal year ending May 31, 2024 were as follows:
1H of FY2023(From June 1, 2023 toNovember 30, 2023)
Product division

Amount (millions of yen)

YoY change (%)

32,468108.6

OTC

17,57498.0

Prescription drug stores

14,893

124.6

Cosmetics

15,140104.7

Food products

75,470118.4

Daily products

22,459

109.4

Other

7,712

108.2

Subtotal

153,252

112.9

758

59.7

Paid assisted living facilities――

Adult day care services――

Subtotal――

154,011

112.4

―

―

154,011

112.4

Drug Stores
Medical and health productsSupermarkets
Nursing Care

Purchases for revenue from contracts
with customers
Other revenue
Total―11―