FY2014 (6/13-5/14) Interim Results Explanatory Meeting
January 17, 2014
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. Kasakawa or Mr. Tamura(045-914-8241) in the Corporate Planning Office.

1

2

1. 1H FY2014 Consolidated Profit and Loss Statement
1H FY2013(consolidated)(million yen)

Share
(%)

1H FY2014(consolidated)(million yen)

Share
(%)

YoY
change(%)% ofprojection(%)

Net sales

90,461

100.0

95,913

100.0

106.0

99.0

Gross profit

23,92926.5

25,022

26.1

104.6

99.0

SG&A expenses

19,026

21.0

20,631

21.5

108.4

100.2

Operating profit

4,903

5.4

4,391

4.6

89.6

93.8

Recurring profit

5,083

5.6

4,677

4.9

92.0

96.5

Net profit

3,024

3.3

2,821

2.9

93.3

98.8

3

2. 1H FY2014 Consolidated Balance Sheet(million yen)
May 31, 2013(consolidate)

Total assets

November 30, 2013(consolidated)

Change74,795 77,796 +3,000

Current assets

45,02045,471+451

Fixed assets

29,77532,325+2,54934,041 34,978+937

Total liabilities
Current liabilities

31,866

32,839+973

Fixed liabilities

2,174

2,139

-35

Total net assets
Total liabilities
and net assets

Main
Maincauses
causesof
ofchanges
changes

40,754 42,817 +2,063
74,795 77,796 +3,000

Total
Totalassets
assets・・Merchandise
Merchandise+1,247+1,247million
millionyen
yen

・Opening
・Openingofof19
19newnewstores,
stores,etc.
etc.
Fixed assets +1,552 million yen
Fixed assets +1,552 million yen

Total
Totalliabilities
liabilities

・Accounts
・Accountspayablepayable+1,032+1,032million
millionyen
yen・Incometaxes
payable・Income taxes payable-389-389million
millionyen
yen

Total
Totalnet
netassets
assets・・Decline
due
Decline duetoto757
757million
millionyenyeninindividends
dividends
・Net
・Netprofit
profit2,821
2,821million
millionyen
yen4

3. 1H FY2014 Consolidated Statement of Cash Flows(million yen)

November
30 2012

November
30 2013(consolidated)(consolidated)

Major
Majorbreakdown
breakdown
ChangeCash flow fromoperatingactivities

2,832

2,860

+28

Cash flow frominvestingactivities-1,907-4,321-2,414

Cash flow fromfinancing
activities

-688

-774

-85

Change in cash
and cashequivalents

237-2,234-2,472

Openingbalance of cash
and cashequipments

16,635

19,785 +3,149

Closingbalance of cash
and cashequipments

16,873

17,550・Net profit before taxes 4,691 million yen
・Net profit before taxes 4,691 million yen
・Depreciation
1,014 million yen
・Depreciation
1,014 million yen
・Corporate taxes paid
2,689 million yen
・Corporate taxes paid
2,689 million yen

Purchase of fixed tangible assets
Purchase of fixed tangible assets
2,092 million yen
2,092 million yen
Negotiable deposit
1,000 million yen
Negotiable deposit
1,000 million yen

・Dividends
・Dividends

757 million yen
757 million yen

+677

5

6

Create SD

1.1H FY2014 Profit and Loss Statement(Create SD)
1H FY2013(million yen)

1H FY2014
Share
(%)

Net sales

89,856100.0

Gross profit

23,896

SG&A
expenses(million yen)

Share
(%)

YoY
change(%)% ofprojection(%)

95,215 100.0 106.0

99.1

26.6

24,98026.2 104.5

99.1

19,20421.4

20,83921.9 108.5 100.3

Operatingprofit

4,692

5.2

4,140

4.3

88.3

93.4

Recurringprofit

4,828

5.4

4,383

4.6

90.8

96.2

Net profit

2,886

3.2

2,637

2.8

91.4

98.6

7

2. Sales by Segment

Create SD

1H FY2014

1H FY2013
Sales(million yen)

Share
(%)

YoY
change(%)

Sales(million yen)

Share
(%)

YoY
change(%)

Medical andhealth products

19,683

21.9

107.7

21,228

22.3

107.9

(O T C)

15,944

17.7

105.6

16,485

17.3

103.4

(Prescription)

3,739

4.2

117.4

4,743

5.0

126.9

Cosmetics

14,871

16.5

105.8

15,398

16.2

103.5

Food products

32,595

36.3

112.2

34,861

36.6

106.9

Daily products

16,877

18.8

105.4

17,851

18.7

105.8

Other

5,827

6.5

97.6

5,875

6.2

100.8

Total

89,856

100.0

107.8

95,215

100.0

106.0

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

8

3. Sales

Create SD

Sales
Salesininfirst
firsthalf
halfforecast:
forecast:existing
existingstoresstores100.1%
100.1%year
yearononyearyear

Set
Setstrongstrongprices
pricesfor
forhighly
highlyconsumableconsumablegoods
goodssuch
suchasasdaily
dailyfoods,
foods,
beverages
beveragesandanddailydailyproducts,
products,in
inorderordertotoimprove
improvesales
salesandandincrease
increasethethenumbernumberof
ofcustomer
customerMonthly change in sales and number of customers
in existing stores compared to the previous year
(％)

Sales
Salesfromfromexisting
existingstoresstores99.4%
99.4%year
yearononyear
year

104.0
103.0

Number ofcustomers

102.0
101.0

Strengtheningof pricing

100.0
99.0
98.0

Sales

97.0
J un.

Sales
Number ofcustomers

J uly

Aug.

S ep .

Oct .

Jun．

July．

Aug．

1Ｑ

Sep.

Oｃｔ.

100.0%
99.3%

98.5%
99.2%

98.9%
99.0%

99.1%
99.1%

97.9%
98.6%

98.0%
98.0%

Nov.

Nov .

2Q

103.2% 99.7%
103.4% 100.0%

1H FY2014

99.4%
99.5%
9

3. Sales
Future measures

Create SD

1.
1.Measures
Measuresfor
forthetheimpact
impactof
ofconsumption
consumptiontax
taxincrease
increase・Capture the special demand before the consumption tax increase◆
Ensurethe
thestockstockofofpopular
populargoods
goods◆Ensure◆◆Implement
Implementsales
salespromotion
promotionactivities
activitiesto
toincrease
increasethethenumbernumber ofofcustomer
customer visits
visitsininMarchMarch・Motivate customers to buy goods after the consumption tax increase◆Display◆Displayproductproductprices
pricesin
inaalarger
larger font
fontthanthanthetheprices
pricesincluding
includingaaconsumption
consumptiontax,
tax,
suggestingsuggestingthe
thegoods
goodsasasthe
thebestbestbuy
buy◆◆Implement
Implementmeasures
measuresin
inMarchMarchininorderordertotoincrease
increasethethenumbernumber ofofrepeat
repeatcustomers
customersafter
afterApril
April
10

3. Sales
Future measures

Create SD

2.
2.PromotePromotethe
therenovation
renovationof
ofexisting
existingstoresstores・Promoting in-store pharmacies
NumberNumberofofin-store
in-storepharmacies
pharmacies
FY2013
FY201364
64storesstores

1H
1HFY2014
FY201473
73storesstores

FY2014FY2014(projection)(projection)89
89 stores
stores・Revamp the product line-up
EnhanceEnhancethe
theline-up
line-upof
ofgoods
goodsbased
basedononthe
thesalessalesbreakdown
breakdown

・Improvement of the convenience
Increase
Increasethe
thesalesaleofof
packaged
packagedmeat
meat

EnhanceEnhancethe
themodelmodelofofstoresstoresininsmall
smalltrade
tradeareas
areas
with
frequent
customer
visits,byintroducing
with frequent customer visits, by introducing
newnewgoods
goodsandandenhancing
enhancingthe
theline-up
line-upof
ofexisting
existing
Goods.
Goods.

FY2014FY2014(projection)(projection)

38
38 stores
stores

FY2014(projection)
FY2014(projection)

40
40storesstores11

3. Sales
Future measures

Create SD

3.3.Increasing
Increasingthe
thenumbernumberof
ofstoresstoresthat
thatofferofferaahome
homedelivery
deliveryservice
serviceforforcustomers
customers
The
Thenumbernumberofofthetheintroduction
introductionstoresstores

FY2013
FY201349
49storesstores

1H
1HFY2014
FY2014108
108stores
stores

FY2014FY2014(projection)(projection)

248
248 storesstoresmeasurement
measurementof
ofeffectivenesseffectiveness・Average・Averagespending
spendingper
percustomer
customerincreased
increasedwhen
whenusingusingthethedelivery
deliveryservice
service・The
numberandfrequencyofvisiting
customers
increased
・The number and frequency of visiting customers increased

EnhanceEnhancethe
theperformance
performanceof
ofexisting
existingstoresstoresby
byintroducing
introducing
newnewservices
servicesconsistentconsistentwith
withthethemodelmodelofofstoresstoresininsmallsmalltrade
tradeareas
areaswithwithfrequent
frequentcustomer
customervisits
visitsthat
thathandle
handleaawidewidevariety
varietyof
ofgoods
goodsincluding
includingfood
foodproducts
products
12

4. Gross profit

Create SD

ProfitProfitimprovement
improvement

・price◆◆AdjustAdjustthe
theline-up
line-upandandtarget
targetprices
pricesof
ofgoods
goodsononhand-distributed
hand-distributedandandyear-end
year-endflyers
flyers◆◆Set
Setaapricing
pricingpolicy
policyfor
fornew
newstores
storesaccording
accordingto
toopening
openingareas
areas
and
andcompetitivecompetitiveclimate
climate・Product◆◆Concentrate
Concentrateon
onthe
theadvanceadvancesalesaleofofhay
hayfever-related
fever-relatedgoods
goods
◆
◆Sale
Saleofofhealth
healthandandbeauty
beautygoods
goodsbased
basedononthe
theseek
seekforforthethebestbestvaluevalue◆◆Narrow
Narrowdown
downthetheregular
regularproducts
productsthat
thathavehaveaapricepriceappeal
appeal13

5. SG&A Expenses

Create SD

OffsetOffsetincreases
increasesininutilities
utilitiesand
andconstruction
constructioncosts
costswithwithotherothercosts
coststhatthatwere
werebelow
belowforecast
forecast

Utilities
Utilitiesexpenses
expenses((Increase
Increasefactor
factor))buildingbuildingexpense
expense(Increase(Increasefactor)
factor)10.1%
10.1%higher
higherthan
thanforecast
forecast (Rose(Rose33.0%
33.0%year
yearononyear)year)
・・Difference
fromprojection+95
millionyen
Difference from projection+95 million yen
・・Previous
yearlyvariation+257
Previous yearly variation+257 million
millionyen
yen・・Electricity
usage
increased
due
to
a
heat
wave
Electricity usage increased due to a heat wavethis
thissummer
summer・・Fuelcosts
increased
due
to
fuel
price
adjustments
Fuel costs increased due to fuel price adjustments
・・An
Anincrease
increasedueduetotohigherhigherbasic
basicrates
rates
・The
・Theunit
unitcost
costper
pertsubo
tsuborequired
requiredfor
forconstruction
constructionincreased
increasedby
by
8%
from
the
previous
year,
due
to
the
demands
fromearthquake
8% from the previous year, due to the demands from earthquake
disasterdisasterreconstruction
reconstructionand
andconsumption
consumptiontax
taxincrease
increase

Personnel
Personnelexpenses
expenses

0.8%
0.8%lower
lowerthanthanforecast
forecast (Rose(Rose7.9%
7.9%year
yearononyear)year)

Advertising
Advertisingexpenses
expenses

8.4%
8.4%lower
lowerthanthanforecast
forecast(Rose(Rose2.6%
2.6%year
yearononyear)
year)

・More
・Moreeffective
effectiveman-hour
man-hourcontrol
controlby
byimplementing
implementing
strictershiftmanagement
stricter shift management
Man-hours
Man-hoursfalling
falling1.4%
1.4%compared
comparedto
tothe
theprevious
previousyear
yearforfor
existing
storesexisting stores

・The・Theintroductory
introductoryeffecteffectof
ofaanew
newpoint
pointcard
cardsystemsystem・Reviewed
the
areas
and
numbersofflyer
distribution
・Reviewed the areas and numbers of flyer distributionfor
for
newstoresnew stores
・Improved
・Improvedthe
thespecification
specificationof
ofsalessalespromotion
promotionmaterials
materials
1414

6. New Store Openings

Create SD

19
19new
newOTCOTCstores
storesandand10
10ethical
ethicalpharmacies
pharmacieswere
wereopened
opened(of(ofwhichwhich11were
werededicateddedicatedprescription
prescriptiondrug
drugstores)
stores)

New store openings by area

OTC
New stores
opened in
FY2014in-store
pharmacies
dedicatedprescription
drug stores

Kanagawa

Tokyo

Shizuoka

Chiba

Aichi

Other

Total

11
5
1

5
1
0

1
1
0

1
0
0

1
1
0

0
1
0

19
9
1

NumberNumberof
ofnew
newstores
storesby
byOTC
OTCtypetype(19(19stores)
stores)Suburban
Suburbanstand
standalone:15
alone:15 In
Infontfontofoftraintrainstation:1
station:1 Urban
Urbancenter
center:3:3
22storesstoreswere
wereclosed
closed(1(1ininKanagawa,Kanagawa,11ininShizuoka)
Shizuoka)
Total
number ofstores asof the end
of 1H
FY2014

Kanagawa

Tokyo

Shizuoka

Chiba

Aichi

Other

Total

OTC

228

in-store
pharmacies

43
14

61
11
6

60
12
0

19
0
3

3
3
0

25
4
1

396
73
24

dedicatedprescription
drug stores15

6. New Store Openings

Create SD

Acquisition
Acquisitionof
ofthe
theshares
sharesofofNew
NewDrug
DrugCo.,Co.,Ltd.
Ltd.(which(whichbecame
becameaasubsidiary)
subsidiary)

Establish
Establishaanew
newstore
storemodel
modelthatthatcancanenable
enablemulti-store
multi-store
operations
operationsin
insmallsmalltrade
tradeareas
areasinincitycitycenters
centersin
inaashort
shorttime
time
Wasedastore（Composition

Usigome
Kitamati
store

juxtaposition）

Wakamatutyou
store

Ichigayastore（Composition
juxtaposition）

Ichigaya
Honntennstore（Composition
juxtaposition）

16

Create SD

6. New Store Openings
Develop
Developthe
thestructure
structureof
ofsmallsmallstoresstoreslocatedlocatedin
inurbanurbanareas
areas

Drugstore
Drugstore++Composition
Composition++Convenience
Conveniencestore
store
Increase
Increasestoresstoreswith
withfloor
floorareas
areasofof30-100
30-100tsubo
tsubohaving
havingananin-store
in-storepharmacy,
pharmacy,asaswellwellasasintroducing
introducingnew
newgoods
goods
andandservices
servicesin
inthesethesestoresstoresCity-type
City-typesmall
smallstoresstoresStationStationside
side

Business
Businessdistrict
district

The
Theshopping
shopping
inconvenienceinconveniencegroundgroundExpandExpandthe
thetypes
typesofoflocations
locationsto
toopenopennew
newstores
stores17

7. Prescription Operations

Create SD

10
10newnewstores
storesopened
opened(9 in-store pharmacies and97
97storesstoresat
atthe
theend
endof
of1H
1H

(24
(24dedicateddedicatedprescription
prescriptiondrug
drugstoresstoresandand73
in-store
pharmacies)
73 in-store pharmacies)

in-store pharmacies and1(91dedicateddedicatedprescription
prescriptiondrug
drugstore)
store)

Sales in prescription operations and the number ofprescriptions issued
Graph:

1H FY2014(million yen)

Share
(%)

YoY
change(%)

Bar graph: Sales(million yen)
12,000

Number of prescriptions issued(unit: 10,000)
150

130

11,000130
10,000106

9,000

Net sales

4,743

100.0

126.9

8,000
7,000

Gross profit

1,901

40.1

133.9

80

(Home service
operations)

9 ,9 2 2

6,000

Net sales

4,000

8 ,2 2 6(million yen)

349

100.0

6 ,8 6 5
4 ,6 5 87050

5 ,5 9 33,000

30
FY2010FY2011FY2012FY2013

FY2014（projection）

1H FY2014
Share
(%)

90

71

5,000

Existing
Existingstoresstorescomparisonscomparisons
Sales
15.7%
Prescriptions
Sales 15.7% Prescriptions6.2%
6.2%

110

92

YoY change
(%)

132.2

Medication
Medicationguidance
guidanceby
byvisitvisit
Collaboration
with58
nursing
Collaboration with 58 nursing
facilities
facilities(demand(demandfrom
from1313new
newfacilities)
facilities)

188. Action for the future

Create SD

Improve
Improveservices
servicesby
bymaking
makinguse
useof
ofthe
theEC
ECwebsite
websiteProvideProvidegoods
goodsincluding
includingthose
thosethat
thatarearenotnotsold
soldatatthe
thestores,
stores,targetingtargetingthe
thereward
rewardcard
cardmembers
members
・・Grant
Grantpoints
pointsininthethesamesameway
waywhenwhencustomers
customerspurchasepurchasegoods
goodsatatstoresstores・・Allow
Allowcustomers
customersto
toreceivereceivepurchased
purchasedgoods
goodsatatstoresstoresasaswellwellasashomehome
Correlation
chart

19

8. Action for the future

Create SD

ExpandExpandthe
theapplication
applicationof
ofthe
theassisted
assistedorderingorderingsystemsystem・・Improve
Improvethe
theaccuracy
accuracyof
oforderingorderingand
andreduce
reducethethetimetimeofoforderingorderingprocesses
processes
・・Achieve
Achievelower
lowercosts
costsandandeasiereasiercustomization
customization
bybyin-housein-housedevelopment
development

・introduction effects
・Reduce・Reduceworking
workinghours
hours
・Reduce・Reducedead
deadstockstock
・Prevent
・Preventaastock
stockout
out・Improvement
・Improvementof
ofthe
thecustomer
customersatisfaction
satisfactionby
bythe
theincrease
increaseof
ofthethewaiting
waiting on
oncustomers
customerstime
time
・Realization
・Realizationof
ofthe
thelowlowcostcostoperation
operation

209. Fee-charging Nursing Home andPreventive Nursing BusinessWelllife
SALON DAY

1H FY2014(million yen)

Net sales
Operating profit
Recurring profit
Net profit

698
25
23
3

Share
(%)

100.0
3.6
3.4
0.4

YoY change(million yen)

+94
+13
+11
+24

* The income statement is based on the simple addition of figures for Welllife Co., Ltd. and SALON DAY CO., LTD.

Preventive nursing business (SALON DAY)
Openedcenters
Opened2a2day
dayservice
service
centers
creating
networkof
32
creating a network of 32centers
centers
Long-termLong-termcare
caresupport
supportcenter
center11center
centerNumber of day service centersat the end of 1H FY2014

Stand-alone
Stand-alonecenters:
centers:24
24
In-store
centers:
8
In-store centers: 821

FY2014 Forecasts (Consolidated)
No
Norevisions
revisionswere
weremademadetotoforecasts
for
the
full
fiscalyear
forecasts for the full fiscal year

FY2013(consolidated results)(million yen)

Net sales

Share
(%)

FY2014(consolidated projection)(million yen)

181,966 100.0 196,300

Share
(%)

YoY Change
(%)

100.0

107.9

Gross profit

48,51026.7

52,040

26.5

107.3

SG&A expenses

38,46721.1

41,870

21.3

108.8

Operating profit

10,043

5.5

10,170

5.2

101.3

Recurring profit

10,3295.7

10,5005.3

101.7

Net profit

5,965

3.3

6,189

3.2

103.8
22