Financial Results for FYE May 2024
July 11, 2024
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

FYE May 2024 Results
1. Consolidated Financial Highlights
2. Consolidated Statement of Income
3. Consolidated Balance Sheet
4. Consolidated Statements of Cash Flows
5. Store Openings/Closings
6. Performance Highlights

FYE May 2025 Plan
1. FYE May 2025 Full Year Plan
2. Store Opening/Closing Plan
3. FYE May 2025 Initiatives
4. Capital Investment and Dividends
5. Revision to Medium-term Management Plan
6. Sustainability Management

2

FYE May 2024 Results31. Consolidated Financial Highlights

Consolidated Results for FYE May 2024
Net sales

Ordinary profit

422.3 billion yen

20.8 billion yen(110.9% YoY)(107.5% YoY)

Ordinary profit margin: 4.9%

Business Overview◆ Existing store customer numbers and sales increased
significantly due to success of everyday low price (EDLP) strategy◆ Despite lower gross profit margin, achieved increased sales andprofits by securing gross profit through net sales growth andcontrolling SG&A expenses
4

2. Consolidated Statement of Income for FYE May 2024
FYE May 2024
Results

FYE May 2023
Results(Millions of yen)

Share(%)(Millions of yen)

Share(%)

YoYchange(%)

Vsplan(%)

Net sales

Net sales

380,963100.0

422,330

100.0

110.9

99.7

Gross profit

102,98727.0

110,187

26.1

107.0

99.6

SG&A expenses

84,07522.1

89,95921.3107.0

100.3

Operating profit

18,912

5.0

20,227

4.8

107.0

96.4

In addition to increased opportunities togo out thanks to reclassification of
COVID-19 as a Class 5 disease, EDLP
strategy saw continued success from theprevious fiscal year

Gross profit
Due to a reactionary decline in highgross profit products such as masks, adrop in prescriptions gross profit
margin, and changes in the gross profitmix

YoY difference: –0.9pts
Ordinary profit

Profit attributable toowners of parent

19,42812,925

5.1

3.4

20,882
13,691

4.9

3.2

107.5

105.996.7

SG&A expenses

98.1

Rise in utility expenses contained
through government subsidies andpersonnel costs controlled

YoY difference: –0.8pts
53. Consolidated Balance Sheet for FYE May 2024
May 31, 2023
Total assets
194,941

May 31, 2024
Total assets
216,481(+21,540)

Total
Current liabilities
assets78,532
99,631

Noncurrent
assets95,310Total net
assets
116,409

Current
assets107,191(+7,559)

Noncurrent
assets109,290(+13,980)

Total
liabilities
86,238(+7,706)

Total net
assets130,243(+13,833)(Millions of yen)

■ Current assets+7,559

Increase in cash and deposits+686

Increase in accounts receivable+2,118

Increase in merchandise+3,518■ Non-current assets +13,980
Distribution center deposits, etc.

+5,083

Buildings and structures+8,730■ Total liabilities+7,706

Increase in accounts payable+5,872■ Total net assets+13,833

Retained earnings+10,277

Disposal of treasury sharesthrough share options+3,2616

4. Consolidated Cash Flows for FYE May 2023
■ Consolidated Statements of Cash FlowsFYE May 2023

FYE May 2024
Change(Millions of yen)

(Millions of yen)

18,98521,034+2,049Net cash used in investing
activities–20,491–20,207+284

Net cash used in financing
activities–3,034–140+2,893

Net increase (decrease) incash and cash equivalents–4,541686+5,227

Cash and cash equivalents
at end of period

37,12637,812+686

Net cash provided byoperating activities■ Depreciation and amortizationFYE May 2023

FYE May 2024
Change(Millions of yen)

(Millions of yen)

Capital investment

21,55821,143–415

Depreciation andamortization

4,195

4,847+651
7

5. Store Openings/Closings■ Store openings/closings and renovations
No. of store openings
Kanagawa
in FYE May 2024
Drug stores
Storeopening Prescription
drug storesTokyo

Shizuoka

Chiba

Aichi

OtherAnnual20

2411334324

27104148

・Store closings: 8 drug stores (1 scrap and build, 5 after completion of contract, and 2 to improve management efficiency)
・Renovations: 34 stores (18 revised merchandising, 13 follow-up after prescription drug store openings, 2expansion/renovation, and 1 renovation to expand prescriptions)■ No. of stores at year end
Kanagawa

TokyoShizuoka

ChibaAichi

Other

AnnualDrug stores

4201139765

2334752

In-store
pharmacies
Rate of in-store
pharmacies
Dedicated prescription
drug stores
Supermarkets / Freshproduce stores

22555

3538

1710380

53.6%

48.7%

36.1%

58.5%

73.9%

29.4%

50.5%

27

7021138

6000006453

12097672435796

Total no. of stores86. Performance Highlights■ YoY net sales comparison at all existing stores: 106.1% (H1: 106.6%; H2: 105.5%)└ OTC: 105.3% Prescriptions: 111.5%

Successful EDLP strategy amid rising prices and increasing need for households to save money
More people going out and greater movement with reclassification of COVID-19 as a Class 5 disease
Strong results in summer seasonal
products due to heat wave

Prevalence of acute illnesses suchas colds and influenza

Leap year

96. Performance Highlights■ Net sales by segment
FYE May 2023
Results
Net sales(Millions of yen)

Medical andhealth products

FYE May 2024
Results

Share (%)

Net sales(Millions of yen)

Share (%)

YoYchange(%)

104,59027.8

111,686

26.7

106.8

OTC61,110

16.2

61,16914.6

100.1Prescriptions

43,47911.6

50,517

12.1

116.2

44,51911.8

47,768

11.4

107.3

Cosmetics
Food products

151,71940.3

176,791

42.3

116.5

Daily products

57,17215.2

62,070

14.9

108.6

Other*

18,134

4.8

19,787

4.7

109.1

Total

376,135

100.0

418,104

100.0

111.2

Medical and health products
OTC
Strong sales of cold-related products
such as cold medicines despite a dropin sales of masks and antigen test kits,etc.
Prescriptions
Increased number of prescriptions
filled from promotion of in-store
pharmacies
Prescriptions as a percentage of sales
up 12.1% (+0.5 pts)
Cosmetics
Demand for makeup cosmetics onrecovery trend due to more people
going out and greater movement
Food products
Increased sales due to better foodproduct lineup primarily at largescale stores, and successful EDLP
strategy* “Other” includes stationery, baby products, clothing, pet products, and gardening products.

116. Performance Highlights■ Prescription drug store department
FYE May 2023
Results
Sales at all stores

FYE May 2024
Results

YoYchange(%)

43,47950,517116.2(thousands)

4,605

5,491

119.2

Prescription unit
price (yen)

9,221

9,032

97.9

43,372

48,370111.5(thousands)

4,592

5,224

113.8

Prescription unit
price (yen)

9,227

9,100

98.6

(millions of yen)

No. of prescriptions

Sales at existing stores(millions of yen)

No. of prescriptions

Home-based dispensing
sales (millions of yen)

1,334

1,420

106.5

No. of stores offeringhome-based
dispensing services

187

192

+58991

103.1

42.8

40.7

–2.1

No. of prescriptions(thousands)

Gross profit margin at all
stores (%)

No. of prescriptions
・Promotion of in-store pharmacies andcooperation with medical institutions
・Increase in acute prescriptions due tothe prevalence of colds and influenza
・Reclassification of COVID-19 as aClass 5 disease, and recovery from thereluctance to seek medical attention
Prescription unit price・Downward trend due to the impact of
medical fees and drug pricerevisions, as well as an increase inacute prescriptions
Gross profit margin
・Dispensing technical fee reduced due
to revision of medical fees in April 2022
(Basic fee reduction: From April 2023 at theCompany)

・Impact of April 2023 drug pricerevisions126. Performance Highlights■ Gross profit margin / SG&A ratioFYE May 2023
Results

FYE May 2024
Results

YoY Change

Result(millions of yen)

Share

Result(millions of yen)

Share

Amount of sales

376,135–

418,104––111.2

Gross profit

102,28327.2

109,531

26.2

–1.0

107.1

FYE May 2023
Results

Change(%)

FYE May 2024
Results

YoY (%)YoY Change

Result(millions of yen)

Share

Result(millions of yen)

ShareChange(%)

YoY (%)

Total personnel
expenses

46,47812.4

49,743

11.9

–0.5

107.0

Utility expenses

3,947

1.0

3,943

0.9

–0.1

99.9

Gross profit margin
・Reactionary drop in high gross profit
products such as masks anddisinfecting products, and antigen
test kits・Continued promotion of EDLP
strategy・Decrease in prescriptions gross profit
margin due to prescription medical
fees and drug price revisions
・Change in gross profit mix due to ahigher proportion of food sales
YoY difference: –1.0pt
SG&A ratio
Personnel expenses
・Control of personnel costs throughappropriate allocation of personnel
・Employee performance-linked bonus(introduced from the end of May 2024)

Depreciation andamortization

4,097

1.14,768

1.1+0.0

116.4

Commissions paid

4,725

1.3

5,104

1.2

–0.1

108.0

Land/office rent

16,582

4.4

17,332

4.1

–0.3

104.5

Selling, generaland administrative
expenses

84,63922.5

90,949

21.8

–0.7

107.5

Utility expenses
・Rise contained through government
subsidies
Land/office rent
・Lower percentage of sales due toincrease in company-owned properties
YoY difference: –0.7pts

13

FYE May 2025 Plan

14

1. FYE May 2025 Plan (Consolidated)FYE May 2024 Results
Full-year(Millions of yen)

Share

FYE May 2025 Plan
(Millions of yen)(%)

Share(%)

YoYchange(%)(%)(Millions ofyen)

Net sales

422,330100.0

457,600

100.0

108.4

+35,270

Gross profit

110,18726.1

119,100

26.0

108.1

+8,913

SG&A expenses

89,95921.3

97,100

21.2

107.9

+7,141

Operating profit

20,2274.8

22,0004.8

108.8+1,773

Ordinary profit

20,882

4.9

22,4004.9

107.3+1,518

Profit attributableto owners ofparent

13,691

3.2

14,4003.1

105.2+709

Preconditions:■ Existing store sales (YoY)
Company-wide: 102.7% (H1: 103.1%, H2: 102.4%)
OTC: 101.7% (H1: 102.3%, H2: 101.2%)
Prescriptions: 110.5% (H1: 109.7%, H2: 111.3%)■ Store openings/closings and renovations
Store openings: 45 drug stores 40 prescription
drug stores
Store closings: 8 drug stores
Renovations: 20 stores15

2. Store Opening/Closing Plan
■ New store openings
Drug stores: 45 stores (Previous year: 43 stores)
Prescription drug stores: 40 stores

No. of stores
No. of stores as
as of May 31,
of May 31, 2025
2024

(Previous year: 48 stores)

・Strengthen dominant position in existing storeareas

Drug storesIn-storepharmacies‣ Promotion of different types of store openings
Rate of in-storepharmacies‣ Focus on developing highly competitive large-scale stores
Dedicated‣ Collaboration/cooperation with other business types
prescription drug... Collaborate with local supermarkets, attract medicalstores
institutions, open in shopping centers, etc.
Supermarkets /・Promote in-store pharmacies■ Store closings
Drug stores: 8 stores (Previous year: 8 stores)

Fresh produce
storesTotal no. of stores

752

789

380

420

50.5%

53.2%

3838

65796832‣ Scrap and build for new and large-scale stores‣ Concentrate human capital and other management resources... Close small stores in dominant areas upon completion of contracts

16

3. FYE May 2025 Initiatives■ Drug store department
・Control gross profit margin while increasing number of customers and items
purchased‣ Continued promotion of EDLP strategy‣ Secure gross profit through gross profit mix on sales floor and creative ways ofselling‣ Develop new and update private brand products■ Prescription drug store department
・Increase demand for prescriptions by promoting in-store pharmacies andstrengthening family pharmacy functions‣ Strengthen interpersonal work and customer service for pharmacists‣ Promote home-based demand and strengthen collaboration with neighboring
medical institutions‣ Promote use of prescription pick-up app and develop system for online
prescriptions■ Control SG&A expenses
・ Rigorous low-cost operations‣ Promote appropriate personnel allocation and control personnel expenses‣ Reduce utility costs by installing solar panels‣ Streamline logistics by establishing and reallocating distribution centers174. Capital Investment and Dividends■ Trend in capital investment
Plans to continue aggressive capital investment⇒ Continuing on from the previous fiscal year, we plan to open 45 stores, increase thenumber of large-scale stores, and expect to invest 7 billion yen in distribution
centers, planning record high investment of 26.5 billion yen

26.5(Billions of yen)

11.6

21.7
9.9

11.1

21.1

11.3

(Projected)

18

4. Capital Investment and Dividends■ Dividends per share
Continuous dividend increase over past 13 years…Stable and continuous dividend increase⇒ For FY May 2024, dividend increased by 12 yen, up 10 yen frominitial plan+12

Stock split in December 2015
Figures before FYE May 2016
calculated after stock split(Yen)(Forecast)(Revisedplan)

19

5. Revision to Medium-term Management Plan
Medium-termManagementPlan

FYE May 2025

FYE May 2028

Revised July 2023

Revised July 2023

FYE May 2025

FYE May 2028

Revised July 2024

Revised July 2024

(Millions of yen)

(Millions of yen)

457,600

550,000

Ordinary profit
margin

4.9%

5.0%

1,000

No. of stores

832

950

65.0%

In-store
pharmacy rate

53.2%

65.0%

(Millions of yen)

(Millions of yen)

430,000

520,000

Ordinary profit
margin

5.0%5.0%

No. of stores

850

In-store
pharmacy rate

55.0%

Net sales

Medium-termManagementPlan

Net sales

Key points for revising Medium-term Management Plan
▶ Due to efforts to control SG&A expenses, such as promoting EDLP strategy, expanding
food product lineup, establishing in-store pharmacies, and reviewing sales promotion
methods, sales are expected to significantly exceed plan while the ordinary profit
margin is anticipated to be slightly lower▶ The number of stores and the rate of in-store pharmacies fell short of plan due to larger
store sizes and delays in store openings▶ Continue to open stores in dominant areas without compromising precision, while also
focusing on growth through expanding store opening areas and pursuing M&A20

6. Sustainability Management■ Reducing CO2 emissions
・Set environmental KPIs (indicators and targets)(Scope 1 and 2)
CO2 emissions reduction target

Fiscal year of target
achievement

Indicator and target

FY2030

Reduce emissions per sales floor area by
50% (compared to 2014)

・Progress in CO2 emissions reduction trends* Scope of calculation: Create SD Holdings Scope 1 and 2 onlyIndicator

FY2014FYE May2015

FY2019FYE May2020

FY2020FYE May2021

FY2021FYE May2022

FY2022FYE May2023

FY2023FYE May
2024

Average sales floorarea/store (tsubo [3.3 m2])

218.3

221.2

222.1

222.7

225.6

235.5

CO2 emissions/tsubo (t-CO2)

0.470

0.451

0.435

0.432

0.434

Disclosed in Aug
2024 Securities
Report* Reaction to better power-saving measures in FYE May 2022

・Initiatives to reduce emissions▶ Plan to increase number of stores with solar panels installed on rooftops (21 storesas of end of FYE May 2024)▶ Switch/update to energy-saving fixtures/equipment such as store lighting (LED),
refrigeration cases, air conditioning, etc.

21

6. Sustainability Management■ Creating a comfortable and rewarding work environment
・Introduction of performance-linked bonus (from FYE May 2024)... Returned portion of profits to employees to improve motivation
・Industry leader in terms of shortest total working hours... Continued shorter business hours, encouraged taking of paid leave and childcare
leave, five-day holiday system, etc.
・Improved ratio of female managers, including store managers and pharmacy managers... FYE May 2023: 17.7% →FYE May 2024: 19.3%■ Proactive dialogue with investors and better information disclosure (enhancedIR&SR)
・Issued analyst report by Shared Research (published in April 2024)... Reports and timely disclosure materials translated into English
・Management with an awareness of capital costs and return oncapital, such as ROE/ROIC
・Improved shareholder returns

22