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, 2022
(Japanese GAAP)

January 10, 2023
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 13, 2023
February 6, 2023
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, 2023 (June 1, 2022 to November 30, 2022)(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
187,392
7.8
9,235
4.4
9,451
November 30, 2022
Six months ended
173,823
3.1
8,843
–8.7
9,088
November 30, 2021
(Note) Comprehensive income: Six months ended November 30, 2022: ¥6,432 million (4.2%)
Six months ended November 30, 2021: ¥6,171 million (–8.9%)
Earnings per share
Six months ended
November 30, 2022
Six months ended
November 30, 2021%

Millions of yen

%

4.0

6,412

4.0

–8.3

6,167

–8.4

Diluted earnings per share

Yen

Yen

101.43

－

97.55

－

(2) Consolidated Financial Position
Total assets

Total net assets

Millions of yen

Equity ratio

Millions of yen%

As of November 30, 2022
185,601
111,301
As of May 31, 2022
176,910
106,323(Reference) Net assets: As of November 30, 2022: ¥111,301 million
As of May 31, 2022: ¥106,323 million

60.0
60.1

2. Dividend Payments
Dividends per shareFirst quarter

Second quarter
Yen

Yen

Fiscal year ended
23.00－
May 31, 2022
Fiscal year ending
25.00－
May 31, 2023
Fiscal year ending
May 31, 2023 (forecast)(Note) Revisions to most recently announced dividend forecast: None

Third quarter

Year-end

Annual

Yen

Yen

Yen

－

23.00

46.00

－

25.00

50.00

3. Consolidated Financial Forecast (From June 1, 2022 to May 31, 2023)
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%

Yen

Full-year
376,800
7.4
18,9504.3
19,380(Note) Revisions to most recently announced financial results forecast: Yes%

Millions of yen%

3.8

12,7000.8

200.89

Notes(1) Significant changes of subsidiaries in six months ended November 30, 2022 (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, 2022
Six months ended
November 30, 2022
Six months ended
November 30, 2022

66,819,342 shares
3,600,815 shares
63,218,553 sharesFiscal year ended
May 31, 2022
Fiscal year ended
May 31, 2022
Six months ended
November 30, 2021

66,819,342 shares
3,600,755 shares
63,218,600 sharesThis financial summary is not subject to a quarterly review by certified public accountants or audit firms.
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 and certain
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 supplementary material for theunderlying 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 ………………………………………………………………………………………… 3(3) Overview of Consolidated Financial Results Forecast and Future Expectations ……………………………………… 3
2. Consolidated Financial Statements and Notes……………………………………………………………………………… 4(1) Consolidated Balance Sheet………………………………………………………………………………………………4(2) Consolidated Statements of Income and Comprehensive Income ……………………………………………………… 6(3) Consolidated Statements of Cash Flows………………………………………………………………………………… 8(4) Notes to Consolidated Financial Statements………………………………………………………………………………9Going concern assumption………………………………………………………………………………………………9
Notes in case of significant changes in shareholders’ equity……………………………………………………………9Application of specific accounting treatment in the preparation of consolidated financial statements…………………9
Changes to accounting policies………………………………………………………………………………………… 9
Changes in accounting estimates ……………………………………………………………………………………… 9
Additional information………………………………………………………………………………………………… 9
3. Supplemental Information……………………………………………………………………………………………… 10(1) Production, Orders Received, and Sales ……………………………………………………………………………… 10-1-1. Qualitative Information Related to Consolidated Financial Results(1) Overview of Operating Results
During the first six months of the fiscal year ending May 31, 2023, although there were moves toward normalization of economic
activities amid the ongoing impact of COVID-19 on the Japanese economy, the economic future remained uncertain due to the risingcost of living brought about by rising raw material and crude oil prices, fluctuations in the financial and capital markets, and otherfactors.
The business environment in the drug store industry remains harsh due to the entry of new competitors from other industries andan increase in consolidation and restructuring on top of new store openings by competitors and intensification of price competition.
Under these circumstances, the Group will promote comprehensive health care support for regional contribution in the domains ofdaily life, prevention, medical care, and nursing care.
Drug Stores
In the drug store business, while promoting everyday low prices (EDLP), we focused on enhancing our fresh and frozen food offerings,
promoting in-store prescription drug stores, and improving convenience and expertise in small trade areas in order to address the needfor one-stop shopping in which the necessities for daily life are available in one place. We also reviewed the business hours of all drug
stores, which were reduced all across the country in the early days of the pandemic, in line with any changes in the local area andcustomer needs, extending them at more than 130 stores.
During the first six months of the fiscal year ending May 31, 2023, there was increased demand for antiviral products, antigen test
kits, and common cold medicines amid the COVID-19 pandemic. In addition, our EDLP measures, including those for daily necessities,
were successful against a backdrop of a further increase in economizing as the cost of living continued to rise. These factors pushed
net sales higher than the same period of the previous year and the plan. In regard to expenses, we made efforts to curb them bythoroughly implementing measures to save as much electricity as possible and optimizing man-hours at workplaces despite the impact
of soaring utility costs arising from rising crude oil prices and increased labor costs arising from the promotion of in-store prescription
drug stores and an increase in the minimum wage.
During the period, we opened 16 new drug stores. Meanwhile we also closed one for which the contract expired. Moreover, we
opened 26 new in-store prescription drug stores and closed one dedicated prescription drug store for which the contract expired.
Supermarkets
We operate Yuri Store supermarkets in Asao Ward and Tama Ward, Kawasaki City, Kanagawa. We are gradually renovating andconverting existing supermarkets into combination drug store/fresh produce stores in order to enhance the competitiveness of
individual stores and create synergy with our drug store business. During the first six months of the fiscal year ending May 31, 2023,
we converted one store into a combination drug store/fresh produce store as in the previous fiscal year and closed one supermarket
from the standpoint of improving management efficiency.
Nursing Care
As society ages, we are operating paid assisted living facilities characterized by delicious meals for elderly people who want to live
safely and securely under the care of nursing staff as well as adult day care centers characterized by functional maintenance andrecovery training for muscle strength and other physical performance for those who want to live at home as long as possible. We tookcare to prevent the spread of COVID-19 in our paid assisted living facilities and adult day care services while also pouring effort into
customer service, which is one of the distinctive characteristics of our Group, to increase user satisfaction and improve occupancy
rates. During this period, we closed two adult day care centers from the standpoint of improving management efficiency.
Owing to the efforts above, as of November 30, 2022, the number of the Group’s drug stores came to 701, the number of dedicatedprescription drug stores to 35, and the number of in-store prescription drug stores to 301, for a total of 336 stores. The Group also has
two supermarkets and two fresh produce stores in the supermarket business as well as two paid assisted living facilities and 37 adultday 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, 2023 were as follows: Net
sales came in at 187,392 million yen (up 7.8% year on year), operating profit was 9,235 million yen (up 4.4%), ordinary profit was
9,451 million yen (up 4.0%), and profit attributable to owners of parent was 6,412 million yen (up 4.0%).

-2-

(2) Overview of Financial Position
Total assets as of November 30, 2022 were 185,601 million yen, up 8,690 million yen from the end of the previous fiscal year. The
main factors were a 1,321 million yen increase in accounts receivable - trade, a 1,636 million yen increase in merchandise, and a
10,774 million yen increase in non-current assets as well as a 5,219 million yen decrease in cash and deposits.
Total liabilities as of November 30, 2022 were 74,299 million yen, up 3,712 million yen from the end of the previous fiscal year.
The main factors were a 1,864 million yen increase in accounts payable - trade, a 294 million yen increase in accrued income taxes, a
1,089 million yen increase in accounts payable- other included in “Other” under current liabilities, and a 382 million yen increasein accrued expenses.
Net assets as of November 30, 2022 were 111,301 million yen, up 4,978 million yen from the end of the previous fiscal year. The
main factor was recording 1,454 million yen in dividends paid and 6,412 million yen in profit attributable to owners of parent.
Cash Flows
Cash and cash equivalents as of November 30, 2022 were 36,447 million yen, down 5,219 million yen from the end of the previous
fiscal year.
Cash flows as of November 30, 2022 were as follows:
Cash flows from operating activities
Net cash provided by operating activities amounted to 8,248 million yen, up 2,027 million yen year on year. The main factors were
profit before income taxes of 9,440 million yen, depreciation of 2,028 million yen, income tax refunds of 799 million yen, an
increase in inventories of 1,644 million yen, an increase in trade payables of 1,864 million yen, and income taxes paid of 3,965
million yen.
Cash flows from investing activities
Net cash used in investing activities amounted to 12,013 million yen, up 6,445 million yen year on year. This was mainly due to9,298 million yen for the purchase of property, plant and equipment associated with the store openings and 2,934 million yen for
store openings in progress.
Cash flows from financing activities
Net cash used in financing activities amounted to 1,454 million yen, down 0 million yen year on year. This is the result of dividends
paid of 1,454 million yen.

(3) Overview of Consolidated Financial Results Forecast and Future Expectations
The forecasts for the fiscal year ending May 31, 2023 announced on July 11, 2022 have been revised in light of trends in consolidated
operating results in the first six months of the fiscal year.
Refer to the “Notice concerning Difference between Forecasts and Results for the First Six Months of the Fiscal Year Ending
May 31, 2023 and Revision of Full-Year Consolidated Earnings Forecast” published today (January 10, 2023; in Japanese only) for
details.

-3-

2. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet(Millions of yen)
FY2021(As of May 31, 2022)

2Q of FY2022(As of November 30, 2022)

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade

42,067
11,15836,847
12,480

Merchandise
Other

35,615
9,274

37,252
9,451

Total current assets

98,11596,031

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

23,166

24,742Land
Other, net

17,196
4,407

24,1694,511

Total property, plant and equipment

44,77053,423

593

533

918

954

1,511

1,487

Long-term loans receivable
Leasehold and guarantee deposits

9,868
11,251

9,718
11,349Other
Allowance for doubtful accounts

11,436(43)

13,633(42)

Total investments and other assets

32,51334,658Intangible fixed assets
Goodwill
Other
Total intangible assets
Investments and other assets

Total non-current assets

78,79589,570176,910

185,601

44,2283,070

46,092
3,365

357

317

145

72

164
4

173
40

Other

14,62816,000Total current liabilities

62,59866,062

Net defined benefit liability
Asset retirement obligations

3,150
3,417

3,338
3,492

Provision for loss on subleasing
Other

37
1,383

34
1,372

Total non-current liabilities

7,988

8,237

70,58774,299Total 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

Non-current liabilities

Total liabilities-4-

(Millions of yen)
FY2021(As of May 31, 2022)

2Q of FY2022(As of November 30, 2022)

Net assets
Equity capital
Share capital
Capital surplus

1,000
934

1,000
934

Retained earnings
Treasury shares

108,850(4,393)

113,808(4,393)

Total shareholders’ equity

106,391

111,349

23

29

(91)

(77)

(68)

(47)

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets

106,323

111,301

Liabilities and net assets

176,910

185,601-5-

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
First six months of the fiscal year ending May 31, 2023

Net sales
Cost of sales

1H of FY2021(From June 1, 2021
to November 30, 2021)
173,823
126,854(Millions of yen)
1H of FY2022(From June 1, 2022
to November 30, 2022)
187,392
136,402

Gross profit

46,96850,989146
16,012173
17,009Provision for bonuses
Provision for directors’ bonuses

269
65

289
68

Retirement benefit expenses
Depreciation and amortization

223
1,841

406
1,962

Land/office rent
Other

7,864
11,704

8,243
13,601

Total selling, general and administrative expenses

38,12541,754

8,843

9,235

Interest income
Dividend income

46
0

44
0

Rent income
Other

149
134

161
122

Total non-operating income

331

329

84

83

Selling, general and administrative expenses
Provision for point card certificates
Salaries and allowances

Operating profit
Non-operating profit

Non-operating expenses
Rental expenses
Other

1

29

Total non-operating expenses

85

112

9,088

9,451

3

7

—

3

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

3

10

Profit before income taxes

Total extraordinary losses

9,084

9,440

Income taxes

2,917

3,028

Profit

6,167

6,412

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

-6-

－

－

6,167

6,412

Consolidated Statement of Comprehensive Income
First six months of the fiscal year ending May 31, 2023

ProfitOther comprehensive income

1H of FY2021(From June 1, 2021
to November 30, 2021)
6,167(Millions of yen)
1H of FY2022(From June 1, 2022
to November 30, 2022)
6,412

(1)
5

5
14

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

4

20

6,171

6,432

6,171

6,432

－

－

Comprehensive income attributable to:
Owners of parent
Non-controlling interests-7-(3) Consolidated Statements of Cash Flows(Millions of yen)
1H of FY2022(From June 1, 2022
to November 30, 2022)

1H of FY2021(From June 1, 2021
to November 30, 2021)
Cash flows from operating activities
Profit before income taxes

9,084

9,440

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

1,919
(0)

2,028
(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

(29)

(40)

(53)

(72)

19

8

8

(3)

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

177
(46)

209
(45)

Decrease (increase) in trade receivables
Decrease (increase) in inventories(512)(1,541)(1,321)(1,644)

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

(233)
166

1,864
85

Other

562

904

Subtotal

9,522

11,412

Interest and dividends received

1

1

Income taxes paid
Income taxes refund(4,227)924(3,965)799

Net cash provided by operating activities

6,220

8,248

Cash flows from investing activities
Purchase of property, plant and equipment(2,750)(9,298)Purchase of intangible assets
Payments into time deposits

(103)
(400)

(118)
(400)

Proceeds from withdrawal of time deposits
Long-term loan advances
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

—
(258)

400
(158)

490

497

(88)

(21)

71

74

(18)

(27)

(2,370)(137)(2,934)
(29)

(0)

1

(5,567)(12,013)Purchase of treasury shares
Dividends paid

(0)
(1,454)(0)(1,454)

Net cash used in financing activities(1,454)(1,454)

Net increase (decrease) in cash and cash equivalents(801)(5,219)Cash and cash equivalents at beginning of period

39,282

41,667

Cash and cash equivalents at end of period

38,48136,447

Payments for store openings in progress
Payments into deposit money
Other
Net cash used in investing activities
Cash flows from 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(Calculation of tax expenses)
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, 2023, 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
Additional Information
There are no significant changes to the assumptions regarding the impact of COVID-19 described in (Additional Information)and (Accounting Estimates for Impact of COVID-19) in the securities report for the previous fiscal year.

-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, 2023 were as follows:
1H of FY2022(From June 1, 2022
to November 30, 2022)
Product division

Amount(millions of yen)

YoY change (%)

Drug Stores
Medical and health products

51,050111.6

OTC30,588108.2

Prescription drug stores

20,461

117.1

Cosmetics

22,286

106.6

Food products

73,549108.5

Daily products

28,907

104.0

Other

8,811

105.9

Subtotal

184,605

108.2

1,681

76.3

Paid assisted living facilities

356

93.5

Adult day care services

689

100.7

Subtotal

1,046

98.1

Revenue from contracts with customers

187,333

107.8

Other revenue (Notes)

58

—

Total

187,392

107.8

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, 2023 were as follows:
1H of FY2021(From June 1, 2021
to November 30, 2021)
Amount(millions of yen)

1H of FY2022(From June 1, 2022
to November 30, 2022)

Share (%)

Amount(millions of yen)

Share (%)

Kanagawa

107,97862.1

116,461

62.1

Tokyo

24,87814.3

27,258

14.5

Shizuoka

19,755

11.4

20,529

11.0

Chiba

12,296

7.1

13,574

7.2

Other

8,915

5.1

9,569

5.1

Total

173,823

100.0

187,392

100.0- 10 -

(2) Purchase results
Purchase results by product division during the first six months of the fiscal year ending May 31, 2023 were as follows:
1H of FY2022(From June 1, 2022
to November 30, 2022)
Product division

Amount(millions of yen)

YoY change (%)

Drug Stores
Medical and health products

29,888109.4

OTC

17,931

107.7

Prescription drug stores

11,957

109.4

Cosmetics

14,466

106.9

Food products

63,752

108.8

Daily products

20,530

105.0

Other

7,125

107.0

Subtotal

135,763

108.0

1,270

75.4

Paid assisted living facilities――

Adult day care services――

Subtotal――

137,034

107.6

―

―

137,034

107.6

Supermarkets
Nursing Care

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