FY2011 (6/10-5/11) Interim Results Explanatory Meeting
January 21, 2011
The earnings forecasts appearing in this material are based on the business environment at the present
time, and there is the possibility that actual earnings may differ from forecasts for various reasons.
Furthermore, only inquiries in Japanese are handled.
Inquiries should be direct to Mr. Nakaura or Mr. Ohno (045-979-3711) in the Corporate Planning Office.

1

1H FY2011
Consolidated Results(06/2010 – 11/2010)2

1. 1H FY2011 Consolidated Profit and Loss Statement
Profits
Profitsrose
rosealthoughalthoughthey
theywere
wereinitially
initiallyforecast
forecastto
todecline
decline
1H FY2011

1H FY2010(consolidated)(million yen)

Net sales
Gross profit
SG&A expenses
Operating profit
Recurring profit
Net profit* Accounting period(consolidated)
Share
(%)

(million yen)

75,019 100.0
19,703 26.3
15,639 20.8
4,063 5.4
4,242 5.7
1,793 2.4
CREATE SD HOLDINGS CO., LTD.
CREATE SD CO., LTD.
Welllife Co., Ltd.
SALON DAY CO.,LTD

Share
(%)

YoY
change(%)% ofprojection(%)

75,350 100.0 100.4 96.9
20,592 27.3 104.5 100.3
16,258 21.6 104.0 96.8
4,333 5.8 106.7 115.9
4,476 5.9 105.5 114.6
2,466 3.3 137.5 120.5

June 1-November 30, 2010
June 1-November 30, 2010
April 1-September 30, 2010
June 1-November 30, 20103

2. 1H FY2011 Consolidated Balance Sheet(million yen)

Main
Maincauses
causesofofchanges
changes
May 31, 2010
(consolidate)November 30, 2010
(consolidated)

ChangeTotal assets

56,721

57,723 ＋1,001

Current assets

33,23733,619＋382

Fixed assets

23,484

24,103＋619

Total liabilities

27,73927,276▲462

Current liabilities

25,261

24,391

▲870

2,477

Total net assets

28,98230,446 ＋1,464

Total liabilities
and net assets

56,721

57,723 ＋1,001*End of 1H CREATE SD HOLDINGS CO., LTD.
CREATE SD CO., LTD.
Welllife Co., Ltd.
SALON DAY

2,885

＋407

Fixed liabilities

Total
Totalassets
assetsFixed assets +619 million yen
Fixed assets +619 million yen

Total
Totalliabilities
liabilities

Accounts payable
Accounts payable-1,391 million yen-1,391 million yen
Asset retirement obligations
Asset retirement obligations+424 million yen+424 million yen

Total
Totalnet
netassets
assetsDecline due to 1,002 million yen
Decline due to 1,002 million yen
in dividends
in dividends
Net profit 2,466 million yen
Net profit 2,466 million yen

November 30, 2010
November 30, 2010
September 30, 2010
November 30, 20104

3. 1H FY2011 Consolidated Statement of Cash Flows(million yen)

November30, 2010(consolidated)

Major
Majorbreakdown
breakdown

Net profit before taxes for 2Q 4,316 million yen
Net profit before taxes for 2Q 4,316 million yen
Depreciation
898 million yen Depreciation
898 million yen
 Corporate taxes paid
2,056 million yen
 Corporate taxes paid
2,056 million yen

Cash flow from operating
activities

2,700

Cash flow from investing
activities▲1,119Cash flow from financing
activities▲1,051Cash flows related to opening new stores:
Cash flows related to opening new stores: Purchase of fixed tangible assets
 Purchase of fixed tangible assets
718 million yen
718 million yen

Change in cash and cash
equivalents

529

Opening balance of cash
and cash equivalents

12,525

Closing balance of cash andcash equivalents

13,054* Accounting period

CREATE SD HOLDINGS CO., LTD.
CREATE SD CO., LTD.
Welllife Co., Ltd.
SALON DAY CO.,LTD



Repayment of long-term loans 49 million yen
Repayment of long-term loans 49 million yen
Dividends
1,002 million yen
 Dividends
1,002 million yen
June 1-November 30, 2010
June 1-November 30, 2010
April 1-September 30, 2010
June 1-November 30, 20105

Results for Each BusinessCompany61. 1H FY2011 Profit and Loss Statement(Create SD)
1H FY2010(million yen)

1H FY2011
Share
(%)

(million yen)

Share
(%)

YoY
change(%)

74,965 100.0 100.4% ofprojection(%)

Net sales

74,653100.0

Gross profit

19,57926.2

20,50827.4 104.7 100.3

SG&A expenses

15,75721.1

16,37721.8 103.9

Operating profit

3,821

5.1

4,131

5.5 108.1 118.2

Recurring profit

3,948

5.3

4,235

5.6 107.3 116.9

Net profit

2,235

3.0

2,324

3.1 104.0 119.8

96.9

96.6

7

2. Gross profit

Create SD

Gross
Grossprofit
profitmargin
marginimproved
improved1.2
1.2percentage
percentagepoints
pointstoto27.4%
27.4%year
yearononyear.
year.
Focus
Focuswaswason
onsecuring
securingprofits
profitsduring
during1H.
1H.
Actual measures undertaken
1.1. TerminatedTerminatedbudget
budgetpleasingpleasingsales
sales

2.2. Carefully
Carefullyexaminedexaminednew
newstore
store
flyersflyers3.3. NegotiatedNegotiatedselling
sellingpricepriceWorkedWorkedwith
withsuppliers
suppliers

4.4. Efforts
Effortsat
atstoresstoresWorkedout
Worked outdisplay
displaymethods
methodsand
and
sales
floor
presentation
sales floor presentation

Quarterly Gross Profit Margin (%)
28.0
27.0
26.0
25.0
24.0
1Q FY2010

2Q FY2010

3Q FY2010

4Q FY2010

1Q FY2011

2Q 20118

3. Net sales

Create SD

1H
1Hexisting
existingstoresstoressales
salesfell
fell5.1%;
5.1%;thethenumbernumberof
ofcustomers
customersalso
also
contracted
contracted5.1%
5.1%year
yearononyear.
year.
The
Thedecline
declinewas
wasdueduetotoaafalloff
falloffin
indemanddemandfor
forfluflurelated
relatedproducts
products
comparedcomparedto
tothe
theprevious
previousyear
yearandandaarevision
revisionof
ofbusinessbusinessmeasures
measuresYear-on-year change in existing stores sales (%)

Year-on-year change in existing stores sales

106.0
104.0

Jun.-Jul.:
Jun.-Jul.:
-1.0%
-1.0%

FY2011102.0＋

Aug.-Nov.:
Aug.-Nov.:
-7.1%
-7.1%

100.0
98.0

1H
1Hoverall:overall:-5.1%
-5.1%

96.0
94.0
92.0
FY2010

90.0
88.0
Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Efforts
Effortswill
willbebefocusedfocusedon
onsalessalesandandrecapturing
customers
during2H.
recapturing customers during 2H.

94. Sales by Segment

Create SD

Gross
Grossprofit
profitmargin
marginrose
rose1.2
1.2percentage
percentagepoints
pointsyear
yearononyearyeardueduetotoaabusinessbusinessmeasure
measurerevision.
revision.
Rose
4.7%
year
on
year
on
a
value
basis
(0.3
percentage
pointsgreaterthanforecast).
Rose 4.7% year on year on a value basis (0.3 percentage points greater than forecast).
Gross profit
margin1H FY2011

Sales(million yen)

Share
(%)

YoY
change(%)

YoY change(percentage
points)Medical andhealthproducts

17,098

22.8

98.1

38.1

- 1.4

Cosmetics

13,295

17.7

101.7

30.6

＋0.2

Food
products

24,053

32.1

104.4

18.8

＋2.9

Daily
products

14,621

19.5

100.1

28.0

＋2.1

Other

5,895

7.9

90.6

21.8

＋2.6

Total

74,965

100.0

100.4

27.4

＋1.2

Medical and health products
Medicaland healthproducts
Even thoughpharmacy
related sales grew, sales for the overall
Eventhoughpharmacy
relatedsales(-6.8%
grew, onsales
the overall
segment declined 1.9% year
on yearan forexisting
segment
declined
1.9%
year
on
year
(-6.8%
onan
existing
stores basis), as a result of a falloff in sales of flu related
stores basis),
as aparticularly
result of a falloff
sales
of flu related
products
which wasstronginfrom
Augustthroughproductswhich
wasparticularly
strongfromAugustthroughNovember FY2010.
November
FY2010.
Gross profit margin also contracted 1.4 percentage points year
onGross
year.profit margin also contracted 1.4 percentage points year
on year.
Cosmetics
Cosmetics
Sales of skincare products such as sunscreen and antiperspirant
Salesof because
skincare of
products
as sunscreen
antiperspirant
were
firm
the hotsuch
weather,but sales andof bathrelatedwere
firm
becauseofthehot
weather,
but
sales
of
bath
products stagnated following the discontinuation of budgetrelated
productssales.
stagnatedfollowing
discontinuationbudgetpleasing
For theoverall thesegment,
sales roseof1.7%
year
pleasingsales.
For
theoverallsegment,
sales
rose
1.7% year
on year (-3.3% on an existing stores basis).
on year(-3.3%
on rosean existing
stores basis).
Grossprofitmargin0.2 percentage
points.
Gross profit margin rose 0.2 percentage points.
Food products
Food
products
Sales
increased 4.4% year on year (-2.3% on an existing stores
Salesasincreased
4.4%
yearbudget
on year(-2.3% sales.
on an existingbasis)a result ofendingpleasing
Existing stores
basis)asaresultofendingbudgetpleasingsales.
Existing
stores sales were particularly weak, falling year on year
for fourstoressales
wereparticularly
weak,falling
year
onyear for four
straight months since August.
straight
monthssinceAugust.
Onthe otherhand,
the grossprofit margin dramatically rose 2.9
On
the
other
hand,
the
gross profit margin dramatically rose 2.9
percentage points.
percentage points.
Daily products
Daily
products
Sales
grew 0.1% year on year (-5.1 on an existing stores basis).
Salesgrewmargin
0.1% year
on yearon an existingbasis).
Gross profit
improved
2.1(-5.1
percentage
points stores
since budget
Grossprofitmarginimproved
2.1
percentage
pointssincebudgetpleasing sales were terminated.
pleasing sales were terminated.

* “Other” includes items such as baby products, clothing, pet products, gardening products, and film development services.

10Create SD

5. SG&A Expenses
SG&A
SG&Aexpenses
expenseswere
wereininlinelinewith
withprojections.
projections.

SG&A
SG&Aexpenses
expenseswere
were573
573million
millionyen
yen(3.4%)(3.4%)lesslessthanthanforecast.
forecast.
Cause for the better-than-forecast SG&A expenses (573 million yen)
Personnel
Personnelexpenses
expenses368
millionyen
368 million yenlesslessthanthanprojected
projected

Advertising
Advertisingexpenses
expenses157
millionyen
157 million yenlesslessthanthanprojected
projected

Packaging
Packagingexpenses
expenses
99millionyen
million yenlesslessthanthanprojected
projected

Man-hours
Man-hourswere
weremaintained
maintainedatatan
anappropriate
appropriatelevel
level
for
each
store.
for each store.
Existing
Existingstoresstoresman-hours
man-hoursdeclined
declined180,000
180,000year
yearon
on
year,
which
resultedina200
millionyen
reduction
year, which resulted in a 200 million yen reductioninin
personnel
personnelexpenses.
expenses.

InInaddition
additionto
toreviewing
reviewingthe
thecostcostofofproducing
producingflyers,
flyers,thefrequency
andnumberofflyerswere
also
revised.
the frequency and number of flyers were also revised.

AAcampaign
campaignto
toencourage
encouragecustomers
customersto
tobringbringtheir
their
own
shoppingbags
was
implemented.
own shopping bags was implemented.
* *TheThepercentage
percentageof
ofcustomers
customersdoing
doingsosoroserosetoto13.1%.
13.1%.

1111

6. New Store Openings

Create SD

13
13newnewstores
storeswere
wereopened
opened(of(ofwhichwhich33were
werededicateddedicatedprescription
prescriptiondrug
drugstores)
stores)
New store openings by area
Kanagawa
New stores opened
in 1H FY2011

6（1）Figures in parenthesis are dedicated prescription drug storesTokyo Shizuoka Saitama

Chiba

Gunma

Ibaraki

Total

2（1）

1(1)

0

0

13（3）

4

0

NumberNumberof
ofnew
newstores
storesby
byOTC
OTCtypetype(10(10stores):stores):88suburban
suburbanstand
standalone
aloneandand22in-store
in-store
22storesstoreswere
wereclosed
closed(1(1ininKanagawa,Kanagawa,11ininIbaraki)
Ibaraki)Kanagawa
Total number ofstores as of the endof 1H FY2011

Tokyo Shizuoka Saitama

188（11） 49（4） 53

Chiba

13 15（1）

Gunma

Ibaraki

Total

6

7

331（16）* Of the 315 OTC stores,
30 have an attachedpharmacy12

7. Prescription Operations

Create SD
46
46storesstoresat
atthe
theend
endof
of1H
1H

55new
newstores
storesopened
opened(16(16dedicateddedicatedprescription
prescriptiondrug
drugstoresstoresandand30
in-store
pharmacies)
30 in-store pharmacies)(3(3dedicateddedicatedprescription
prescriptiondrug
drugstoresstoresandand22in-store
pharmacies)
in-store pharmacies)

1H FY2011(million yen)

Share
(%)

YoY change(%)

Net sales

2,542

100.0

116.2

Gross profit

973

38.3

114.5

(Home
service
operations)

Existing
ExistingstoresstorescomparisonscomparisonsSales
109.0%
Sales
109.0%
Prescriptions
106.6%
Prescriptions
106.6%

1H FY2011(million yen)

Share
(%)

YoY
change(%)

Net sales

152

100.0

154.7

Gross profit

85

55.9

157.4

Medication
Medicationguidance
guidanceby
byvisitvisit
Collaboration
with
16
nursing
Collaboration with 16 nursing
facilities
facilities

138. Fee-charging Nursing Home andPreventive Nursing BusinessWelllife
SALON DAY

Spun
Spunoff
offthethedaydayservice
servicebusinessbusinessinto
intoaaseparate
separatecompany
company
Fully
Fullybegan
beganthetheprocessprocessto
toincrease
increasethe
thenumbernumberof
ofstoresstores1H FY2011(million yen)

384
58
57
21

Net sales
Operating profit
Recurring profit
Net profit

Share
(%)

100.0
15.2
15.1
5.5

% of projection
(%)

100.9
83.4
83.9
73.4

AAdrugstore
drugstorewith
withananattachedattacheddaycare
daycarecenter
centerwas
wasopened
openedininShimokuzawa,
Shimokuzawa,
Sagamihara,
Sagamihara,Kanagawa
Kanagawa
CreatedCreatedaasystemsystemto
tofully
fullysupport
supportthehealthoflocal
customers
the health of local customers* Accounting period

Welllife Co., Ltd.
SALON DAY CO.,LTD

April 1-September 30, 2010
June 1-November 30, 201014

FY2011 Forecasts(Full Fiscal Year)15

2H Sales Related Measures

Create SD

Increase
Increasesales
salesandandthethenumbernumberof
ofcustomers
customersusing
usingthethe600600million
millionyen
yenin
insavings
from
1H.
savings from 1H.
While profit margins improved during 1H as a result of various efforts such as revising sales
promotions, both sales and the number of customers have been on a downward trend.
Implement
Implementmeasures
measuresthat
thatwill
willleadleadtotoan
anincrease
increaseininsales
salesandandthethenumbernumberof
ofcustomers.
customers.
1.1. Reduce
Reducethe
theprice
priceofofproducts
productswith
withaahighhighprice
priceelasticity.
elasticity.

Started fromJanuary.

2.2.Effectively
Effectivelypromote
promotesales
salesusing
usingflyers
flyersthat
thatreflectreflectthethecharacteristics
characteristicsof
ofthe
theparticularparticularmarket.
market.
3.3. Introduce
Introduceeffective
effectiveshelf
shelfallocation
allocationdeveloped
developedininnew
newstores
storesinto
intoexisting
existingstoresstoresandandexpandexpandthe
product
lineup.
the product lineup.

Earnings projections for the full year were unchanged.

16
16

FY2011 Forecasts (Consolidated)
No
Norevisions
revisionswere
weremademadetotoforecasts
for
the
full
fiscalyear
forecasts for the full fiscal year
FY2010(consolidated results)(million yen)

FY2011(consolidated projection)

Share
(%)

(million yen)

Share
(%)

YoY Change(%)

Net sales

149,081100.0

157,224

100.0

105.5

Gross profit

38,71326.0

41,835

26.6

108.1

SG&A expenses

31,43421.1

34,140

21.7

108.6

Operating profit

7,279

4.9

7,695

4.9

105.7

Recurring profit

7,610

5.1

8,027

5.1

105.5

Net profit

3,686

2.5

4,395

2.8

119.2

Capital expenditures

4,500 million yen (+26.3% YoY)

Depreciation expense

1,969 million yen (-4.5% YoY)17