FY2013 (6/12-5/13) Results Explanatory Meeting
July 19, 2013
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. Ohno (045-914-8241) in the Corporate Planning Office.

1

FY2013
Consolidated Results(06/2012 – 05/2013)2

1. FY2013 Consolidated Profit and Loss Statement
ReturnReturnononassets
assets [ROA][ROA] 14.5%
14.5%
Returnonequity[ROE]
15.6%
Return on equity [ROE] 15.6%

FY2012(consolidated)(million yen)

Net sales
Gross profit
SG&A expenses
Operating profit
Recurring profit
Net profit

169,790
45,12335,999
9,124
9,441
4,824

* Accounting period

FY2013(consolidated)

Share
(%)

100.0
26.6
21.2
5.4
5.6
2.8

CREATE SD HOLDINGS CO., LTD.
CREATE SD CO., LTD.
Welllife Co., Ltd.
SALON DAY CO.,LTD(million yen)

181,966
48,51038,467
10,043
10,329
5,965

Share
(%)

YoY
change(%)% of initialprojection
(%)

100.0

107.2

99.2

26.7

107.5

99.5

21.1

106.9

98.6

5.5

110.1

103.3

5.7

109.4

103.2

3.3

123.7

107.1

June 1-May 31, 2013
June 1-May 31, 2013
June 1-May 31, 2013
June 1-May 31, 20133

2. FY2013 Consolidated Balance Sheet(million yen)
May 31, 2012
(consolidated)

Main
Maincauses
causesof
ofchanges
changes

May 31, 2013(consolidated)

ChangeTotal
Totalassets
assetsTotal assets

68,03074,795+6,764Current assets

39,77045,020+5,249・・Merchandise
Merchandise+1,208+1,208million
millionyen
yen
・Openingof29
newstores,etc.
・Opening of 29 new stores, etc.
Fixed
Fixedassets
assets+1,515+1,515million
millionyen
yen

Fixed assets

28,26029,775+1,515

Total
Totalliabilities
liabilities

Total liabilities

32,12934,041+1,911

Current liabilities

30,07931,866+1,786

Fixed liabilities

2,050

2,174

+124

Total net assets

35,90040,754+4,853

Total liabilities
and net assets

68,03074,795+6,764* Accounting period

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

・Accounts
・Accountspayablepayable+1,492+1,492million
millionyen
yen・Allowancefor
points858
millionyen
・Allowance for points 858 million yen

Total
Totalnet
netassets
assets・Decline・Declinedueduetoto1,113
1,113million
millionyenyeninindividends
dividends
・・Net
Netprofit
profit+5,965+5,965million
millionyenyenJune 1-May 31, 2013
June 1-May 31, 2013
June 1-May 31, 2013
June 1-May 31, 20134

3. FY2013 Consolidated Statement of Cash Flows(million yen)

FY2012FY2013(consolidated)(consolidated)

Major
Majorbreakdown
breakdown
ChangeCash flow fromoperating activities

6,997

8,001 +1,003

Cash flow frominvesting activities-4,297-3,698+599

Cash flow fromfinancing activities-1,527-1,153+373

Change in cash andcash equivalents

1,172

3,149 +1,977

Opening balance of
cash and cash
equipments

15,463

16,635 +1,172

Closing balance of
cash and cash
equipments

16,635

19,785 +3,149* Accounting period

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

・Net profit before taxes
・Net profit before taxes
・Depreciation
・Depreciation
・Corporate taxes paid
・Corporate taxes paid

10,067 million yen
10,067 million yen
2,141 million yen
2,141 million yen
5,266 million yen
5,266 million yen

Cash flows related to opening new stores:
Cash flows related to opening new stores:
・Purchase of fixed tangible assets 2,629 million yen
・Purchase of fixed tangible assets 2,629 million yen
・Joint loans for construction
732 million yen
・Joint loans for construction
732 million yen

・Dividends
・Dividends

1,113 million yen
1,113 million yen

June 1-May 31, 2013
June 1-May 31, 2013
June 1-May 31, 2013
June 1-May 31, 20135

Results for Each BusinessCompany61. FY2013 Profit and Loss Statement (Create SD)
FY2012(million yen)

Net sales

FY2013Share(%)(million yen)

Share
(%)

YoY
change(%)

168,711 100.0 180,709 100.0 107.1% ofprojection
(%)

99.2

Gross profit

45,15526.8

48,42626.8 107.2

99.4

SG&A
expenses

36,301

21.5

38,82921.5 107.0

98.6

Operatingprofit

8,853

5.2

9,597

5.3 108.4 102.7

Recurringprofit

9,076

5.4

9,791

5.4 107.9 102.5

Net profit

4,765

2.8

5,717

3.2 120.0 106.6

7

2. Sales

Create SD

Improve
Improveprices
pricesin
inorderordertotoensure
ensureaayear-on-yearyear-on-yearincrease
increasein
inthe
thenumbernumberof
ofcustomers
customers
Intensified
Intensifiedpricepricewar
war
withcompetitorswith competitors

Generate
Generateprofit
profitby
byrevising
revisingthe
thehealthhealthandandbeauty
beautysegment,
segment,
the
core
of
drug
storesthe core of drug storesMonthly change in sales, number of customers, andaverage spending per customer in existing storescompared to the previous year
106.0 (％)
Strengtheningof pricing

104.0

Break free of price competition and review the healthand beauty segment, the core of drug stores

Number ofcustomers

Sales
102.0

100.0

98.0

Average spending
per customer

96.0

94.0
Jun.
2012

July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

Feb.

May

Apr.

May

2013

8

Create SD

3. Sales by Segment

ExpandExpandthe
themedical
medicalandandhealthhealthproducts
productssegment
segmentby
bymoving
movingforward
forwardwith
withthetheconstructionofin-store
pharmacies
construction of in-store pharmacies

FY2012
Sales(million yen)

FY2013

Share
(%)

YoY
change(%)

Sales(million yen)

Share
(%)

YoY
change(%)

Medical and healthproducts

37,703

22.3

105.7

41,184

22.8

109.2

(O T C)

30,838

18.3

102.5

32,958

18.2

106.9

(Prescription)

6,865

4.0

122.7

8,226

4.6

119.8

Cosmetics

27,934

16.6

106.2

29,335

16.2

105.0

Food products

59,791

35.4

117.9

65,463

36.2

109.5

Daily products

31,402

18.6

106.4

33,092

18.3

105.4

Other

11,878

7.1

99.9

11,633

6.5

97.9

Total

168,711

100.0

109.5

180,709 100.0

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

94. SG&A Expenses

Create SD

Continue
Continueworking
workingto
toreduce
reducecosts
costsand
andrestrain
restrainthe
theincrease
increasein
inSG&A
SG&Aexpenses
expensestotolesslessthanthanthethegrowth
growthin
innet
netsalessales◆Efforts to reduce costs

Personnel
Personnelexpenses
expenses

0.4%
0.4%higher
higherthan
thanforecast
forecast (Rose(Rose9.0%
9.0%year
yearononyear)
year)

・More
・Moreeffective
effectiveman-hour
man-hourcontrol
controlby
byimplementing
implementing
strictershiftmanagement
stricter shift management
Man-hours
Man-hoursfalling
falling1.6%
1.6%compared
comparedto
tothe
theprevious
previousyear
yearforfor
existing
storesexisting stores・End・Endmid-career
mid-careerhires
hiresbybylowering
loweringthe
theturnoverturnoverrate
rateforfor
pharmacist
pharmacist
Reduced
Reducedrecruiting
recruitingcosts
coststoto82.5%
82.5%fromfromthetheprevious
previousyear
year

Advertising
Advertisingexpenses
expenses

15.5%
15.5%lower
lowerthanthanforecast
forecast(Fell(Fell8.9%
8.9%year
yearononyear)
year)

Other
Other

・Reduced・Reducedthe
thecosts
costsofoffacilities,
facilities,equipment
equipmentand
andfixtures
fixturesfor
fornewstoresnew stores・Reduced・Reducedcommunication
communicationcosts
costs
・Reviewed
systemmaintenance・Reviewed system maintenancecosts
costs

・Changed
・Changedthe
thereward
rewardcard
cardsystemsystematatall
allstores
stores・Changedthenumberofhand-distributed
・Changed the number of hand-distributedflyers
flyers・Reviewed
the
areas
and
numbersofflyer
distribution
・Reviewed the areas and numbers of flyer distributionfor
for
newstoresnew stores
・Improved
・Improvedthe
thespecification
specificationof
ofsalessalespromotion
promotionmaterials
materials

10Create SD

5. New Store Openings

29
29new
newstores
storeswere
wereopened
opened(of(ofwhichwhich11were
werededicateddedicatedprescription
prescriptiondrug
drugstores)
stores)
New store openings by area

OTC
New stores
opened in
FY2013in-store
pharmacies
dedicatedprescription
drug stores

Kanagawa

Tokyo

Shizuoka

Chiba

Aichi

Other

Total

18
14
0

4
4
1

2
3
0

2
0
0

2
2
0

0
2
0

28
25
1

NumberNumberof
ofnew
newstores
storesby
byOTC
OTCtypetype(28(28stores)
stores)Suburbanstandalone:22
Shop-in-shop:2
Suburban stand alone:22 Shop-in-shop:2 NSC
NSC:1:1 InInfront
frontofoftraintrainstations:1
stations:1 Urban
Urbanarea
area:2:2
33storesstoreswere
wereclosed
closed(1(1ininKanagawa,Kanagawa,22ininShizuoka)
Shizuoka)

Total numberof stores asof the end of
FY2013OTC
in-store
pharmacies
dedicatedprescription
drug stores

Kanagawa

Tokyo

Shizuoka

Chiba

Aichi

Other

Total

218
38
13

56
10
6

60
11
0

18
0
3

2
2
0

25
3
1

379
64
23
11

6. Prescription Operations
26
newstoresopened26
newstoresopened(25 in-store pharmacies andCreate SD
87
87storesstoresat
atthe
theendendof
ofFY2013
FY2013(64 in-store pharmacies and 23 dedicatedin-store pharmacies and1(251dedicateddedicatedprescription
prescriptiondrug
drugstore)
store)(64 in-store drug
pharmacies )and 23 dedicatedprescription
prescription drugstoresstores )Sales in prescription operations and the number ofprescriptions issued

FY2013Share(%)(million yen)

Net sales
Gross profit

YoYchange(%)

8,226 100.0 119.8
3,149 38.3 114.4

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

Bar graph: Sales(million yen)

10,000

106

9,000

92

8,000
7,000

100

80
71

80

6,000
5,000

＊Gross profit does not include the portion related to items forwhich drug price related negotiations have not been concluded

4,000

Existing
Existingstoresstorescomparisonscomparisons
Sales
11.4%
Prescriptions
Sales 11.4% Prescriptions7.6%
7.6%

2,000

60

3,000

4 ,6 5 8

5 ,5 9 3

6 ,8 6 5

8 ,2 2 6
40

20

1,000
0

(Home service
operations)
Net sales

FY2013(million yen)

120

Share
(%)

544 100.00FY2010YoY change
(%)

128.5

FY2011FY2012FY2013

Medication
Medicationguidance
guidanceby
byvisitvisit
Collaboration
with45
nursing
Collaboration with 45 nursing
facilities
facilities(demand(demandfrom
from16
16new
newfacilities)
facilities)

127. Assisted-living fee-charging nursing home
and Preventive Nursing BusinessWelllife
SALON DAYFY2013(million yen)

YoY change(million yen)

Share
(%)

Operating profit

1,256
42

100.0
3.4

+178
+122

Recurring profit

46

3.7

+122

Net profit

-23

－

+123

Net sales* 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)
OpenedOpened66day
dayservice
servicecenters
centers
creating
creatingaanetwork
networkof
of30
30centers
centers
Long-termLong-termcare
caresupport
supportcenter
center11center
centerNumber of day service centersat the end of FY2013

Stand-alone
Stand-alonecenters:
centers:22
22
In-store
centers:
8
In-store centers: 813

8. Social contribution & regional contribution
Social contribution
1. The 8th “Let’s walking” event in the Minatomirai
・Walking 8km in the Minatomirai area in Yokohama
・Holding health advice services in the goal meeting place

2. The “Let’s walking” event in Lake Sanaru in Hamamatsu
・Hosting the event in areas other than Kanagawa prefecture
・Cooperation with administration

Regional contribution
1. Be-a-pharmacist event for children
・Held events for children to try being a pharmacist before pharmacies opened and on holidays

2. Class on how to brush one’s teeth
・Held a class on how to brush one’s teeth at elementary schools

3. Health fair・Held a health fair, which was centered on lectures by medical specialist

14

Growth Strategy

15

1. Growth Strategy – Create SD
1. Opening new stores■40 new drug stores
・Develop stores with focus on Kanagawa, Tokyo, and Shizuoka
・Open urban stores in various types of areas including business areas, shopping
districts, in front of stations, and urban areas where shopping is inconvenient■25 in-store pharmacies
・Move forward with opening new pharmacies with the goal of 25% of stores
having an in-store pharmacy and make use of dominant position■7 dedicated prescription drug stores

2. Improving profitability of existing stores■99.8% or more increase in sales year on year
・Increasing the number of stores that offer a home delivery service for customers
・Renovate 50 stores■Improve gross profit
・Improving product line-up
・Develop new PB products and review existing PB products

16

1. Growth Strategy – Create SD
3. Develop the medical and nursing fields
with a view toward a gray society■Open 30 new facilities that undertake home deliveryof medication
・Implement efficient development based on the area strategy⇒Develop the area within 5 km of core pharmacies
make it possible for each pharmacy to handle 40 patients■Promote development through ties with OTC・Deliver products to users at nursing homes and facilities
・Hold health seminars for the staff and users of facilities

4. Responding to IT society■Promote omni-channel
Eliminate the barrier between Internet and the real world
・Use the Internet and video calls to increase convenience for customers who visit stores
・Hold consulting seminars and events at stores that do no rely on point sales promotion

17

2. Growth Strategy – Nursing Operations
Assisted-living fee-charging nursing home
1. Measures to increase occupancy rates
・Offering a more flexible price system including the “zero entry fee” plan
(responding to legal changes)
・Provide added value⇒Supply entertainment, hold health seminars, and deliver products・Strengthening marketing promotion and advertising

Preventive nursing business
1. Opening of new centers
・Opening of 10 centers40 centers

2. Improving profitability ofexisting centers・Achieving higher operating rates
by enhancing sales capability
・Converting highly operational centers
into “centers with a capacity of 15 people”
・Enhancing the functional training menu18

3. Collaboration of four operations
Drug stores × Pharmacies

・Raise the overall level ofthe Healthcare Division

Drug store operations

・Shop while prescription

・Shop at stores as a partis being filled

・Provide total support byhighly specialized
pharmacists

Prescription
operations
Pharmacies
×Fee-charging nursing homes

・Provide medication
guidance to facility
users during their visit

・Hold medication
seminars for the staff
of facilities

Drug stores × Day servicesof skill training
Pharmacies × Day services

・Accept prescriptions
Hand over the medication at theend of the day
Drug stores×
Fee-charging nursing homes

Preventive nursing
business

・Deliver daily products
and products for facilities

・Hold consulting meetingsand nutrition education
seminars

Day services×
Fee-charging nursing homes

・Improve QOL

Assisted-living fee-charging
nursing home19

4. Create Group Medium-term Vision
Creating
Creatingaasystemsystemto
tocontributecontributeto
tosocietysocietyas
asaacomprehensive
comprehensivehealthcare
healthcare
supportsupportcompany
companyin
incooperationcooperationwith
withcommunity
communitymedical
medicalfacilities
facilities
Operations in each field
Planned number of stores in FY2016
Daily life

Medical treatment

Pharmacies

Drug storesDay
services

Feecharging
nursinghomes

Prevention

Nursing

OTC

498

Dedicated prescription
pharmacies
In-store pharmacies

47
139

Salon Day
60
Fee-charging nursing home 2

Business indicators that the company emphasizes
Recurring
Recurringprofit
profitmargin
marginTarget:5%ormoreTarget: 5% or more

ReturnReturnononassets
assetsTarget:15%
Target: 15%

ReturnReturnononequityequityTarget:15%
Target: 15%
20

5. FY2014 Forecasts (Consolidated)
FY2013(consolidated results)(million yen)

Net sales

Share
(%)

FY2014(consolidated projection)(million yen)

Share
(%)

YoY Change(%)

181,966 100.0 196,300 100.0 107.9

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

21