FY2015 (6/14-5/15) Interim Results Explanatory Meeting
January 23, 2015
The earnings forecasts appearing in this material are based on the business environment at the present time, andthere 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. Kasakawa or Mr. Tamura.
(045-914-8241) in the Corporate Planning Office.

1

FY2015 (6/14-5/15) Interim Results
Explanatory Meeting■1H FY2015 Consolidated Results
1. Profit and Loss Statement
2. Balance Sheet
3. Statement of Cash Flows■Results for Each Business Company
1. Profit and Loss Statement
2. Sales by Segment
3. Sales4. Gross Profit
5. SG&A Expenses
6. New Store Openings
7. Prescription Operations
8. The second half of the efforts
9. Fee-charging Nursing Home and Preventive Nursing Business■FY2015 Forecasts (Consolidated)

2

1H FY2015
Consolidated Results(06/2014 – 11/2014)3

1. 1H FY2015 Consolidated Profit and Loss Statement
1H FY2014(consolidated)(million yen)

1H FY2015(consolidated)

Share
(%)

YoY change
(%)

% of
projection(%)

104,559 100.0 109.0

98.3(million yen)

Share
(%)

Net sales

95,913100.0

Gross profit

25,022

26.1

27,335

26.1

109.2

96.7

SG&A expenses

20,631

21.5

23,085

22.1

111.9

98.5

Operating profit

4,391

4.6

4,250

4.1

96.8

87.8

Recurring profit

4,677

4.9

4,457

4.3

95.3

89.7

Net profit

2,821

2.9

2,750

2.6

97.5

94.5

4

2. 1H FY2015 Consolidated Balance Sheet(million yen)
May 31, 2014(consolidated)

Total assets

November 30, 2014(consolidated)

81,140 81,010

Change-129

Current assets

46,88945,056-1,832

Fixed assets

34,25035,954+1,703

Total liabilities
Current liabilities
Fixed liabilities

36,015 38,182 +2,167
33,8502,164

36,0502,132

Main
Maincauses
causesof
ofchanges
changes+2,199-32

Total net assets

45,125 42,828 -2,297

Total liabilities andnet assets

81,140 81,010

Total assets
・Decrease in cash and cash
equivalents due share buybacks-3,101 million yen
・Merchandise+609 million yen
・Opening new stores, etc.
Fixed assets +1,703 million yen
Total liabilities
・Accounts payable+1,551 million yen

Total net assets
・Share buyback-4,392 million yen
・Dividend payment-668 million yen
・Net profit
2,750 million yen-1295

3. 1H FY2015 Consolidated Statement of Cash Flows(million yen)

Cash flow fromoperatingactivities
Cash flow frominvesting activities

November30, 2013

November30, 2014(consolidated)(consolidated)

2,860

5,148

+2,287-4,321-2,979+1,341

ChangeCash flow fromfinancing
activities-774-5,269-4,495

Change in cash
and cashequivalents-2,234-3,101-866

Opening balanceof cash and cash
equipments

19,785

19,335-449

Closing balance of
cash and cash
equipments

17,550

16,234-1,316

Major breakdown◆Cash flow from operating activities
・Increase in depreciation 287 million yen
・Decrease of increase width of inventories
550 million yen
・Increase in trade payables
621 million yen
・Payment reduction of corporate tax
737 million yen◆ Cash flow from investing activities
Loss the previous year content of the spending

・Negotiable certificates of deposit, etc.
1,555 million yen
・Reduction of expenditure by tangible fixed
assets
308 million yen
・Increase in construction in progress-263 million yen◆Cash flow from financing activities
・Dividend payment-668 million yen
・share buyback-4,392 million yen

6Results for Each BusinessCompany7

Create SD

1.1H FY2015 Profit and Loss Statement
1H FY2014(million yen)

1H FY2015
Share
(%)

(million yen)

Share
(%)

YoY change
(%)

% of
projection(%)

Net sales

95,215

100.0

103,788

100.0

109.0

98.3

Gross profit

24,98026.2

27,333

26.3

109.4

96.8

SG&A expenses

20,83921.923,331

22.5

112.0

98.5

Operating profit

4,140

4.3

4,002

3.9

96.7

87.7

Recurring profit

4,383

4.6

4,173

4.0

95.2

89.0

Net profit

2,637

2.8

2,586

2.5

98.1

93.9

8

Create SD

2. Sales by Segment
1H FY2014

1H FY2015

Sales(million yen)

Share
(%)

YoY
change(%)

Sales(million yen)

Share
(%)

YoY
change(%)

Medical and healthproducts

21,228

22.3

107.9

23,250

22.4

109.5

(O T C)

16,485

17.3

103.4

17,037

16.4

103.3

(Prescription)

4,743

5.0

126.9

6,213

6.0

131.0

Cosmetics

15,398

16.2

103.5

15,845

15.3

102.9

Food products

34,861

36.6

106.9

39,698

38.2

113.9

Daily products

17,851

18.7

105.8

18,799

18.1

105.3

Other

5,875

6.2

100.8

6,194

6.0

105.4

Total

95,215

100.0

106.0

103,788

100.0

109.0

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

93. Sales

Create SD

The
Thedemand
demandrush
rushbefore
beforeandandrecoilrecoilafter
afterthetheconsumption
consumptiontax
taxincrease
increase
Increase
Increasein
inthe
theconsumption
consumptiontax
taxrateratetoto8%
8%in
inApril
April20142014→→ MarchMarch20142014tax
taxincrease
increasebefore
beforethethelast-minutelast-minutedemand
demand
(％)

1 2 5 .0・・Sales
Salesincrease
increaseof
of123.2%
123.2%from
fromthetheprevious
previousyear
yearduedueto
tothe
thedemand
demandrush
rushbefore
beforethethetaxtaxhikehike・・Stockpiling
Stockpilingof
ofcosmetics
cosmeticsand
and
other
otherhigh-priced
high-priceditems
itemsand
and
products
oflong-term
use
products of long-term use

Monthly changes in the May 2014 season second half
existing store sales year-on-year

1 2 0 .0
1 1 5 .0
1 1 0 .0・・Over-the-counter
Over-the-counterdrugs
drugs・・Cosmetics
Cosmetics ・・Daily
Dailynecessities
necessities etc.
etc.

1 0 5 .0
1 0 0 .0
9 5 .09 0 .0

Ｓａｌｅｓ

Dec.
12月
2013

Jan.
1月
2014

Feb.
2月

Mar.
3月

Apr.
4月

May.
5月

101.8

102.7

101.9

123.2

90.7

95.6

Reactionary
Reactionarydecline
declineininlastlastminute
minutedemand
demand10Create SD

3. SalesPlanning
Planningratio
ratio98.3%
98.3%, ,Year-on-year
Year-on-year109.0%
109.0%
Sales
atexisting
stores:
99.6%
year
on
Sales at existing stores: 99.6% year onyear
year(First(Firstquarter:
quarter:98.8%;
98.8%;Second
Secondquarter:
quarter:100.4%)
100.4%)First
Firstquarter
quarter:Recoil:Recoilremains
remainsin
incosmetics
cosmeticsand
andover-the-counter
over-the-counterdrugs
drugs
Secondquarter：Pharmacies
andgroceryistowing,recoverytrend
Second quarter：Pharmacies and grocery is towing, recovery trend
(％)
104.0
103.0

Monthly changes in the existing store sales year-on-year
Grocery recovers early, remained strong

Recovery
trend

102.0
101.0

Sales of cosmetics and a grocery goods and over-thecounter drugs has decreased in recoil to the bad weather
and special demand

100.0※Unseasonable
weather at the time offlyer promotional

99.0
98.0
97.0
96.0
J un.

Sales

J ul.

Aug.

S ep.

Oct .

Nov .

Jun.
2014

Jul.

Aug.

1Q

Sep.

Oct.

Nov.

2Q

1H FY2015

99.3

98.0

99.0

98.8

100.1

101.5

99.7

100.4

99.6

11

3. Sales

Create SD

Promotion
Promotionof
ofrenovation
renovationof
ofexisting
existingstoresstores→→Renovation
Renovationofof39
39storesstores(annual(annualplan:
plan:75
75stores)stores)The
Thedispensing
dispensingpharmacy
pharmacyin
inexisting
existingstoresstoresDepartment
Departmentrevamped
revampedto
tomatchmatchthethesalessalesmix
mix⇒⇒ implemented
implementedat
at12
12storesstoresExpansion⇒ implemented
Expansionof
ofthe
thenumbernumberof
ofstoresstoreshandling
handlingfresh
freshmeat
meat⇒
implementedatat27
27storesstores

Improvement
Improvementof
ofassortment
assortment
Expanded
Expanded
introduction
introductionofofmeat
meat

Expanded
Expanded
introduction
introductionofofwine
wine

Expansion
ExpansionofofThe
Thedispensing
dispensingpharmacy
pharmacy

FY2014FY2014149
149stores
stores

1H
1HFY2015
FY2015204
204 storesstores

Improved
Improvedtotal
totalgross
grossprofit
profitof
ofthe
theentire
entirecategory
categoryby
bysales
salesincrease
increasein
inthe
thenumbernumberofofwinewine
FY2014FY2014113
113stores
stores

1H
1HFY2015
FY2015130130 storesstores12

4. Gross profit
Planning
Planningratio
ratio96.8%,
96.8%,Year-on-year
Year-on-year109.4%
109.4%First
Firstquarter
quarter
Down
Down0.5
0.5points
pointsfrom
fromthethelastlastyear
year

Create SD
Comparing the same period last year gross profit margin

FY2015

1Q
26.7
26.2

2Q
25.7
26.5

1H
26.2
26.3

T he pr evi ous
fi s c a l y e a r
d e ffe r e n c e

-0.5

+0.8

+0.1

FY2014

Unfavorable
Unfavorablesales
salesofofover-the-counter
over-the-counterdrugs,
drugs,cosmetics,
cosmetics,andandotherotherseasonalseasonalitems
itemswithwithhigh
highprofit
profit
rates
due
to
the
recoilfromthedemandrush
andinfluence
of
the
cool
summerrates due to the recoil from the demand rush and influence of the cool summer

SecondSecondquarter
quarterUp
0.8
pointsUp 0.8 pointsfrom
fromthethelastlastyearyear
In-depth
In-depthstudy
studyofofactualactualsales
salesatatnew
newstores
storesandandthethesituation
situationas
asregards
regardscompetition,competition,and
andcorresponding
revisionofthestoresinvolvedinfold-inflyer
campaigns
andofprice-appeal
corresponding revision of the stores involved in fold-in flyer campaigns and of price-appealproducts
products
While
Whilecontinuing
continuingthe
theEDLPEDLPandandsingle
singleitem
itemprice
priceappeal,
appeal,totostrengthen
strengthenthe
thedevelopment
developmentof
ofprofit
profitgoods
byconcentratingsale
goods by concentrating sale
Expansion
ExpansionofofThe
Thedispensing
dispensingpharmacy
pharmacy
Contribution
Contributionto
tothetheratio
ratioofofgross
grossprofit
profitto
tosalessalesdue
dueto
tothe
theriseriseininthe
theshareshareofofall
allsalessales
occupiedbytheprescription
operations
occupied by the prescription operations
13

Create SD

5. SG&A Expenses
Planning ratio 98.5%, year-on-year 112.0%
First quarter : Planning ratio 99.8%, year-on-year 115.1%

Second quarter : Planning ratio 97.3%, year-on-year 109.0%
・Factor of planning ratio 98.5% plan advantageous difference -355 million yen

Advertisingexpenses

Planning ratio 80.0% year-on-year 99.7% plan difference-381 million yen
・Reduction through revision of sales promotion using flyers
and reward cards

・Year-on-year 112.0%, factor in the same period last year difference +2,491 million yen
LED ofthe store lighting

New storesincrease

・Repair costs, year-on-year 187.0% the previous year difference+208 million yen
・Labor costs, year-on-year 110.2 %The previous fiscal year difference +1,044 million yen
・Depreciation, year-on-year 127.9 %The previous fiscal year difference +278 million yen
・Rents, year-on-year 112.0%,
the previous year difference +502 million yen
14

Create SD

5. SG&A Expenses
Cost of utilities

Other

Planning ratio 105.2%, year-on-year 107.6%
First quarter : Planning ratio 113.8%, year-on-year 114.7%
Second quarter : Planning ratio 97.4%, year-on-year 101.1%
・Contribution by the cost-reducing effects of the switch to
LED bulbs at the start of the year in the second quarter, inspite of the rise in the adjusted unit fuel cost

・Suppression of construction investment
・Reduce expenses by charging for delivery service
1H FY2015
The number of delivery service
introduction stores 203 stores
Charge for the number of stores 122 stores15

6. New Store Openings

Create SD

19 new OTC stores and 17 ethical pharmacies were opened(of which 2 was dedicated prescription drug store)

New store openings by area
Kanagawa

Tokyo

Shizuoka

Chiba

Aichi

Other

Total

7
10
0

3
3
1

3
0
0

3
0
0

2
1
1

1
1
0

19
15
2

OTC
New stores
opened in
1H FY2015

in-store
pharmacies
dedicatedprescription
drug stores

Number of new stores by OTC type (19 stores)
Suburban stand alone:16 Urban store:2 In-shop :1
4 stores were closed(2 in Kanagawa,1 in Tokyo, 1 in Shizuoka)

OTC
Total
number ofin-store
stores as of pharmacies
the end of
dedicated

1H FY2015 prescription
drug stores

Kanagawa

Tokyo

Shizuoka

Chiba

Aichi

Other

Total

241

74
19
8

63
12
0

23
1
3

6
5
1

27
5
1

434
103
27

61
14

Rate ofpharmacy
establishment
in OTC stores

23.7
％

16

7. Prescription Operations

Existing stores comparisons

1H FY2015
Share
(%)

YoY
change
(%)

6,213

100.0

131.0

2,556

41.1

(million yen)

Net sales
Gross profit(Home service
operations)

Net sales

Share

456

Sales year-on-year
117.0%
Prescription year-on-year 111.5%
Sales in prescription operations and the number ofprescriptions issued
Graph:
Number of prescriptions issued(unit: 10,000)

Bar graph: Sales(million yen)

134.5

(%)

100.0

15,000

180

149

160

13,0001H FY2015(million yen)Create SD125
YoYchange106

11,000

120

92

(%)

130.5

140

9,000

100

71

80
12, 674

Medication guidance by visit
Collaboration with 65 nursing
facilities(demand from 6 new facilities)

7,000

60

10, 45840

8, 2265,000

6, 86520

4, 6583,000

FY2011FY2012FY2013

FY2014FY2015（projection）

017

8. The second half of the efforts

Create SD

MarketingMarketingstrategies
strategies
Intensive
Intensivesales
salesofofseasonalseasonalproducts
productsand
andprofit
profitproducts
products

Promotion
Promotionof
ofstorestorevisits
visitswith
withincreased
increasedfrequency
frequencydue
dueto
to
sales
salespromotion
promotionusing
usingreward
rewardcards
cards
Early
Earlydeployment
deployment ofofpollen-related
pollen-relatedmerchandise
merchandise
Improvement
Improvement ofofassortment
assortmentwith
withrenovated,renovated, dispensing
dispensing
pharmacy
pharmacyin
inexisting
existingstoresstoresConvenience
Conveniencestrengthening
strengtheningof
ofstorestorebybyutilizing
utilizingthe
theEC
ECsitesite

18

8. The second half of the efforts

Create SD

Reduction
Reductionof
ofexpenses
expenses
Suppression
Suppressionofof construction
constructioncosts
costs
Reduction
Reductionof
ofadvertising
advertisingexpenses
expensesby
byreviewing
reviewingflyer
flyer
promotional
promotional
ReduceReduceexpenses
expensesby
bycharging
chargingfor
for delivery
deliveryservice
service
Improved
Improvedproductivity
productivitythroughthroughoperation
operationstandardization
standardizationofof automatic
automaticorderingordering

199. Nursing Home andPreventive Nursing BusinessWelllife
Welllife

1H FY2015(million yen)

Share
(%)

Welllife
SALON DAYYoY change(million yen)

Net sales

770

100.0

110.4

Operatingprofit-10--

Recurringprofit21

2.7

Rise in the occupancy rate
Tokyo
73.2%
(Up 7.1 points from the end of last year)

Hachioji

68.3%(Up 5.8 points from the end of last year)-•The income statement is based on the simple addition of figures for Welllife Co., Ltd.
and SALON DAY CO., LTD.

Day service centers 4 facilities opened⇒Day service centers 38 facilities
Home care support office 1 facility
opened⇒Care support center 2 facilities

SALON
SALONDAYDAY・Switch from a 10-person
system to a 15-person system
・Development of SALON DAY
Refre, a massage-type day
service20

FY2015 Forecasts(Consolidated)

21

FY2015 Forecasts (Consolidated)
FY2014(consolidated results)(million yen)

Share
(%)

Full-year
Full-yearforecast
forecastdoes
doesnot
notchangechangeFY2015(consolidated projection)(million yen)

Share
(%)

YoY Change(%)

197,483 100.0 216,200

100.0

109.5

Gross profit

52,00426.3

57,652

26.7

110.9

SG&A expenses

42,99721.8

47,407

21.9

110.3

Operating profit

9,006

4.6

10,245

4.7

113.7

Recurring profit

9,470

4.8

10,5004.9

110.9

Net profit

5,779

2.9

6,100

2.8

105.5

Net sales22