FYE 5/2017 (6/16-5/17) Results Explanatory Meeting
July 14, 2017
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. Kasai or Mr. Tamura (045-914-8241) in the Corporate Planning office.

1

FYE 5/2017 (6/16-5/17) Results Explanatory Meeting■ FYE 5/2017 Consolidated Results
1. FYE 5/2017 Consolidated Profit and Loss Statement
2. FYE 5/2017 BS (Consolidated) 3. FYE 5/2017 CF (Consolidated)
4. Changes in ROE 5. Changes in dividends■Result of a main business company
1. FYE 5/2017 Profit and Loss Statement (Create SD) 2. Store openings
3. Addition of merchandise lineups and functions in line with customer needs
4. Net sales 5. Segmental sales 6. Prescription Department
7. Gross profit ratio 8. Selling and administrative expense ratio
9. Activities to enhance productivity■Growth Strategies
1. Store openings 2. Opening of new types of stores
3. Policies for store openings / merchandise lineups
4. Personnel cultivation 5. Activities to enhance productivity
6. Activities at prescription pharmacies 7. Nursing care business
8. FYE 5/2018 Forecasts (Consolidated)
2

FYE 5/2017
Consolidated Results(06/2016 – 05/2017)3

1. FYE 5/2017 Consolidated Profit and Loss Statement
FYE 5/2016

FYE 5/2017(consolidated)(consolidated)(million yen)

Net sales

Share
(%)

231,892 100.0% ofadjustment inprojection

Share
(%)

YoY
change(%)

247,341

100.0

106.7

99.9

(million yen)(%)

Gross profit

63,42327.4

68,149

27.6

107.5

100.6

SG&A
expenses
OperatingprofitRecurringprofit49,46921.3

53,707

21.7

108.6

101.3

13,9546.0

14,441

5.8

103.5

98.2

14,314

6.2

14,768

6.0

103.2

98.5

Net profit

9,274

4.0

10,119

4.1

109.1

104.3

4

2. FYE 5/2017 BS (Consolidated)(Millions of yen)
End of FYE
5/2016End of FYE
5/2017(Consolidated)(Consolidated)

Total assets

99,334110,480+11,145

Current assets

60,87967,798+6,918Fixed assets

38,45542,682+4,226

Total liabilities

45,74948,578+2,828Current liabilities

41,76044,157+2,396

Fixed liabilities

3,989

4,420

+431

ChangeTotal net assets

53,58561,901+8,316

Total liabilities
and net assets

99,334110,480+11,145

Main
Mainfactors
factorsininchangechangeTotal assets
Total assets•Increase of 4,682 million yen in•Increase of 4,682 million yen in
cash, bank deposits and accounts
cash, bank deposits and accounts
receivable
receivable•Increase of 1,598 million yen in•Increase of 1,598 million yen inmerchandise
merchandise•Increase of 4,226 million yen in•Increase of 4,226 million yen in
fixed assets due to new store
fixed assets due to new store
openings, etc.
openings, etc.

Total liabilities
Total liabilities•Increase of 2,420 million yen in•Increase of 2,420 million yen inaccounts payableaccounts payable•Increase of 324 million yen in•Increase of 324 million yen in
asset retirement obligations
asset retirement obligations

Total net assets
Total net assets•1,896 million yen dividend•1,896 million yen dividend
payment
payment•Posted net income of•Posted net income of
10,119 million yen.
10,119 million yen.

5

3. FYE 5/2017 CF (Consolidated)(Millions of yen)

FYE 5/2016

FYE 5/2017(Consolidated)(Consolidated)

ChangeCash flow fromoperating activities

11,843

Cash flow frominvesting activities-4,282 -10,814

Cash flow fromfinancing activities-1,475-1,896-421

Change in cash andcash equivalents

6,085

166

-5,918Cash and cash
equivalents at
beginning of year

20,26812,878 +1,034-6,532

26,354 +6,085

Main
Maincomponents
components• Net income before tax:
• Net income before tax:
14,513 million yen
14,513 million yen• Depreciation expenses:• Depreciation expenses:
2,955 million yen
2,955 million yen• Corporate taxes paid:• Corporate taxes paid:-5,909 million yen-5,909 million yen• Acquisition of fixed tangible assets• Acquisition of fixed tangible assets
due to store openings anddue to store openings andrenovation: -4,722 million yen
renovation: -4,722 million yen• Certificates of deposit*:• Certificates of deposit*:-4,000 million yen-4,000 million yen• Joint loans for construction:• Joint loans for construction:-1,276 million yen-1,276 million yen• Construction in progress:• Construction in progress:-1,289 million yen-1,289 million yen• Dividend: -1,896 million yen• Dividend: -1,896 million yen* Certificates of deposit are actually cash
Cash and cash
equivalents at endof year26,354

26,521+166

equivalents. Investment expenditure andchange in cash equivalents for FYE
5/2017, inclusive of certificates ofdeposit, amounted to 6,814 million yen
and 4,166 million yen, respectively.

6

4. Changes in ROE
IntendIntendROE
ROEMoreMoreThanThan15%
15%
operatingprofit margin （%）

Changes in ROE · operating profit margin
ROE（%）

1 2 .02 0 .015.6%
1 5 .0

18.6%

17.5%

14.1%

9 .0

14.4%

ROE

13.5%
6 .0

1 0 .0

5.4%

6.0%

5.5%
4.6%

5.8%

5.0%
3 .0

5 .0
operatingprofit margin

0 .0

FYE 5/2012

FYE 5/2013

FYE 5/2014

FYE 5/2015

FYE 5/2016

FYE 5/2017

0 .0
7

5. Changes in dividends
FYE
FYE5/2017
5/2017Actual
ActualDividend
payoutDividend payoutratio:
ratio:19.4%
19.4%
Dividendonequityratio:
Dividend on equity ratio:3.4%
3.4%

Stable,Stable,continuous
continuousdividend
dividendgrowth
growthChanges in dividends per share

35

[Yen]

Shares were split in December 2015.
The share split is reflected in dividends for
FYE 5/2016 and earlier.

30

26.6 yen25
20

31.0 yen

21.6 yen
16.6 yen

18.0 yen

19.3 yen15
10
5
0
FYE 5/2012

FYE 5/2013

FYE 5/2014

FYE 5/2015

FYE 5/2016

FYE 5/20178Results of a main businesscompany91. FYE 5/2017 Profit and Loss Statement (Create SD)
FYE 5/2016(million yen)

FYE 5/2017

Share
(%)

(million yen)

Share
(%)

YoY
change(%)% ofadjustment inprojection(%)

Net sales

230,145100.0

245,466

100.0

106.7

99.9

Gross profit

63,45827.6

68,107

27.7

107.3

100.6

SG&A
expenses
OperatingprofitRecurringprofit50,13621.8

54,431

22.2

108.6

101.3

13,321

5.8

13,676

5.6

102.7

98.1

13,672

5.9

13,992

5.7

102.3

98.3

Net profit

8,966

3.9

9,750

4.0

108.8

105.8

10

2. Store openings
OTC:
OTC:Record
Recordhighhighofof43
43storestoreopenings
openings
Prescription
Prescriptiondrug
drugstores:
stores:18
18storestoreopenings
openings

Total number ofstores at year-end

541(In-store(In-storepharmacies:
pharmacies:16
16storestoreopenings;
openings;dedicateddedicatedprescription
prescriptiondrug
drugstores:
stores:22store
storeopenings)
openings)

Store openings by region

FYE 5/2017 Accumulated
number of store
openings

OTC
In-store
pharmacies
Dedicatedprescription drug
storesKanagawa

Tokyo

Shizuoka

Chiba

Total

31
11
2

3
2
0

4
1
0

5
2
0

43
16
2

Store closure - OTC: Scrap & Build 3 stores Contract expiration 1 store Business type change 1 store
Dedicated prescription drug stores: Closed due to Monzen Hospital closure 2 stores In-store
pharmacies: Relocated and expanded 1 store

Kanagawa

Tokyo

Shizuoka

Chiba

OthersTotal

In-store
pharmacies

290
77

83
21

70
13

30
5

36
9

509
125

Ratio of in-store
pharmacies

26.6%

25.3%

18.6%

16.7%

25.0%

24.6%

21

6

0

2

3

32

OTC
FYE 5/2017 Number ofstores at yearend

Dedicatedprescription drug
stores11

3. Addition of merchandise lineups and functions in line withcustomer needs
ActiveActiveenhancement
enhancementof
ofconvenience
convenienceandandexpertise
expertisein
inlinelinewithwithregional
regionalcustomercustomerneeds
needs
Expansion
Expansionofofmerchandise
merchandiselineups
lineups
Convenience
Convenience×

Addition
Additionof
ofhealth
healthsupportsupportfunctions
functions
Expertise
Expertise

OTC: Expansion of merchandise
lineups/Renovation 19 stores•• Renovation
Renovationin
inpursuitpursuitof
ofconvenience
conveniencemainly
mainlythroughthroughthe
thestrengtheningoffoodmerchandise
lineupsstrengthening of food merchandise lineups•• Renovation
Renovationmainly
mainlypursuing
pursuingoverwhelmingly
overwhelminglystrengthened
strengthenedbeauty
beautymerchandise
merchandiselineups
lineups

Renovation of prescription drug stores: 10 stores•• Addition
Additionof
ofprescription
prescriptionfunctions
functionsin
incooperationcooperationwith
withnearby
nearbymedical
medicalinstitutions:3
storesinstitutions: 3 stores•• Renovation
Renovationpursuing
pursuingenhanced
enhancedprofitability
profitabilityand
andoperational
operationalefficiency
efficiencyof
ofexisting
existingpharmacies:
pharmacies:77storesstores12

4. Net sales
YOY:
YOY:106.7%;
106.7%;Compared
Comparedwith
withplan:plan:99.9%
99.9%
Net
Netsalessalesofofexisting
existingstoresstoreswere
wereononpar
parwith
withthetheplanplan
andand101.1%
101.1%year-on-year.
year-on-year.

OTC:
OTC: Solid
Solidandand100.7%
100.7%year-on-yearyear-on-yearthanks
thanksto
torenovation
renovationand
andexpanded
expandedmerchandise
merchandiselineups
lineupsdespite
despitethe
theoccurrence
occurrenceof
ofininhouse
housecompetitioncompetition
Prescription:
Prescription: 106.5%
106.5%year-on-year;
year-on-year;thethegrowth
growthrate
ratedecreased
decreasedduedueto
torevisedrevisedmedical
medicalfees,
fees,decreased
decreasedprescription
prescriptionof
oftherapeutic
therapeuticagentsagentsfor
forhepatitis
hepatitisC,C,andandless-dispersed
less-dispersed
pollenpollenAll
Allstores
storesNet
Netsalessalesofofall
allstores
storeswere
wereslightly
slightlybelow
belowplannedplannedfigures
figuresbecause
becausenewnewstoresstoreswere
wereopened
openedininananunbalanced
unbalancedmannermanner(70%(70%ininthe
thesecondsecondhalf
half
of
ofthe
theyear,year,including
including50%
50%inin4Q).
4Q).
13

5. Segmental sales
Traction
Tractionexpertise
expertiseof
ofthethepharmacy
pharmacybusinessbusinessand
andthetheconvenience
convenienceof
ofgrocerygrocery

FYE 5/2016

FYE 5/2017
Share
(%)

YoY change
(%)

Sales
(million yen)

Share
(%)

Sales
(million yen)

Medical andhealth products

54,19523.5

58,130

23.7

107.3

(O T C)37,487

16.2

39,693

16.2

105.9

(Prescription)

16,7087.3

18,4377.5

110.3

Cosmetics

33,66914.6

35,643

14.5

105.9

Food products

88,72738.6

95,528

38.9

107.7

Daily products

39,81017.3

41,739

17.0

104.8

Other

13,742

6.0

14,423

5.9

105.0

Total

230,145100.0

245,466

100.0

106.7

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

14

6. Prescription Department
Sales:
Sales:110.3%
110.3%YOY,
YOY,96.2%
96.2%compared
comparedwith
withplanplan
FYE 5/2017 Actual<Millions of yen>

Composition ratio
(%)

YOY
(%)

Net sales

18,437

100.0

110.3

Gross profit

7,450

40.4

113.9

New store openings: 18 stores
Store openings aiming to build
regional medical cooperation (e.g.,store openings linked with thedivision of labor or aiming to attract
medical institutions)

Compliance
Compliancewith
withthetherevision
revisionof
ofmedical
medicalfees
fees•Promoted•Promotedthe
theuseuseof
ofgenericgenericmedical
medicalandandhealthhealthproducts
products
The
Therate
rateofofgenericgenericmedical
medicalandandhealthhealthproductproductuseuseisis70.9%
70.9%(+5.4pt(+5.4ptYOY)
YOY)ononaaquantity
quantitybasis.
basis.
•Acquisition•Acquisitionof
ofpremiums
premiumsfor
forstandard
standardprescription
prescriptionsystemsystem56
56stores
storesbefore
beforerevision
revision
Decreased
Decreasedto
to22storesstoresafter
afterrevision,
revision,butbutrecovered
recoveredto
to23
23storesstoresas
as
of
ofthe
theyear-end.
year-end.
Achieved
Achievedthe
theprior
prioryear
yearpremium
premiumlevel
levelininJanuary.
January.
15

7. Gross profit ratio
Gross
Grossprofit
profitratio:
ratio:27.7%
27.7%YOY:
YOY:+0.1pt+0.1ptComparedComparedwith
withplan:plan:+0.2pt+0.2pt•• SalesSalesofofseasonalseasonalmerchandise
merchandiseyielding
yieldingaahighhighgrossgrossprofit
profitratio
ratio
were
werepoor
poorbut
butunderpinned
underpinnedby
bythe
thesalessalesofofhigh-value
high-valueadded
added
merchandise
merchandiseandandthethelaunchlaunchof
ofnew
newPB.
PB.
•• CostCostreduction
reductionand
andhigher
higherrebates
rebatesthroughthroughdelivery
deliverypricepricenegotiations
negotiations•• There
Therewaswasan
anincreased
increasedcomposition
compositionratio
ratioof
ofthe
thePrescription
Prescription
Department
Departmentyielding
yieldingaahighhighprofit
profitrate.
rate.
•• The
ThePrescription
PrescriptionDepartment’s
Department’sgross
grossprofit
profitratio
ratioimproved
improvedthanks
thankstotorecovery
recoveryafter
afterthetherevision
revisionof
offees.
fees.

16

8. Selling and administrative expense ratio
Selling
Sellingand
andadministrative
administrativeexpense
expenseratio:
ratio:22.2%
22.2%YOY:
YOY:+0.4pt+0.4pt Compared
Comparedwith
withplan:plan:+0.3pt+0.3ptPersonnel expenses  YOY: +0.5pt• Addition of health support functions, and streamlining of pharmacist
assignment aiming for personnel cultivation• Pay raises through review of various allowances• Miscellaneous pay raises by changing work style and adopting higher
hourly wages
 Helped those who extended work hours play active roles by encouraging
them to acquire qualifications or appointing them as store managers.
• Improved the workforce stability rate by streamlining the recruitment
processes and making efforts to delay retirement, with store openings inmind.

Utility expenses  YOY: -0.1pt
Power saving effects through the use of in-store LED lighting; reduction of basic
charges by changing electricity suppliers; decrease in unit fuel expenses thanks tocheaper crude oil prices17

9. Activities to enhance productivity
Improvement
Improvementof
ofstorestoreoperations
operations•• System
Systemestablishment
establishmentfor
forperishables,
perishables,and
andreduction
reductionof
oflosseslossesandandworkload
workloadat
atstoresthat
have
expandedtheselling
spacesfor
perishables
stores that have expanded the selling spaces for perishables•• Reduction
Reductionof
ofinspection
inspectionworkload
workloadat
atstoresstoresby
bygoing
goingvoucher-lessvoucher-lessEstablishment
Establishmentof
oflogistics
logisticssystemsystem
Improvement
Improvementof
ofshelf-stacking
shelf-stackingefficiency
efficiencyby
bychanging
changingthe
thedelivery
deliverymethod
methodActivities
Activitiesat
atprescription
prescriptionpharmacies
pharmacies•• Improvement
Improvementof
ofinventory
inventoryefficiency
efficiencythroughthroughthe
theintegration
integrationof
ofgenericgenericmedical
medicalandandhealthhealthproducts
products•• Inventory
Inventorycontrol
controlthroughthroughthe
theinter-store
inter-storetransfer
transferof
ofimmobile
immobileinventory
inventory

18

Growth Strategies

19

1. Store openings
OTC:
OTC:5050storesstoresUpwardUpwardrevision
revisionof
ofmid-term
mid-termplan
plan(45(45stores)
stores)・・ Strengthened
Strengtheneddominancedominancethroughthroughstore
storeopenings
openingsmainly
mainlyin
inKanto
Kantoandand
Tokai
Tokaiareas
areas(especially(especiallyin
inKanagawa).
Kanagawa).
・・ Expanded
Expandedthe
theextent
extentof
ofstorestoreopenings
openingsusing
usingaavariety
varietyof
ofstorestoreformats.
formats.
OpenedOpenedhighly
highlyconvenientconvenientstoresstoresmeeting
meetingregional
regionalneeds,
needs,newnewtypes
typesofof
storesstoresthroughthroughSM
SMcollaboration,
collaboration,and
andstores
storesinside
insideSCs
SCsandandstation
stationbuildings.
buildings.
LargeLargestoresstoresbuilt
builtononlargelargeconstruction
constructionsites,
sites,including
includinglandlandacquisitionacquisition

Prescription
Prescriptiondrug
drugstores:
stores:25
25storesstoresIn-store
In-storepharmacies:
pharmacies:20
20storesstores/ /Dedicated
Dedicatedprescription
prescriptiondrug
drugstores:
stores: 55storesstores・・ Mainly
Mainlyopened
openeddrugstore
drugstorepharmacies
pharmacieshaving
havinghealthhealthsupport
supportfunctions.
functions.
・・ Stores
Storesthat
thatcancanmeetmeetmultiple
multipleneeds
needsusing
usingOTC’s
OTC’sability
abilityto
toattract
attractcustomers
customers
・・ Attracted
Attractedmedical
medicalinstitutions
institutionsaiming
aimingfor
forthethecreation
creationof
ofregional
regionalmedical
medicalcooperationcooperationsystems.
systems.
・・ Dedicated
Dedicatedprescription
prescriptiondrug
drugstoresstorespromoted
promotedthe
thecreation
creationof
ofmedical
medicalmalls
malls
consisting
consistingof
ofmultiple
multipledepartments.
departments.
20

1. Store openings
Changes
Changesin
inthethenumbernumberofofOTC
OTCstore
storeopenings
openings

Upward revision of
mid-term plan

[Stores]60

Scaled-down
Scaled-downbusinessbusinessregions
regionsand
anddiversified
diversifiedformats
formatshave
havecreatedcreatedmore
more
room
for
store
openings.
room for store openings.

62
56

43 store openings(record high)

50

43

42

40

50

34

30

22

27

28

28

28

20

21

2. Opening of new types of stores
Cremo
Cremo
CreateCreate++more
more
New
Newformat
formatbased
basedononthe
theconcept
conceptof
ofmaking
making“Create”“Create”moremoreenjoyable,
enjoyable,which
whichconsists
consistsof
of“healthcare“healthcareproducts”
products”(core(coredrug
drugstore
storeproducts)
products)andand“miscellaneous“miscellaneousfashion
fashiongoods”
goods”thatthatcancanmakemakeshopping
shoppingenjoyable,
enjoyable,asaswellwellasasoverwhelming
overwhelminglineups
lineupsofof“beauty“beautycare”
care”products
products
Departmental
composition of“Cremo”

Departmental
composition of
conventional stores
Cosmetics
Food products
Medical andhealthproducts
Daily
necessities

Miscellaneous
fashion
goods

Daily
necessities

Cosmetics

Medical andhealthproducts

22

2. Opening of new types of stores
Store
Storeconcept
conceptofof“Cremo”“Cremo”
Come
Comeand
andenjoy
enjoy
 Creation
Creationof
ofan
anextraordinary
extraordinaryatmosphere
atmospherethat
thatisisenjoyableenjoyableenoughenoughto
tomakemakecustomers
customersforget
forgettime,
time,unlike
unlikeconventional
conventional
drugstores
drugstores
See
Seeandandenjoy
enjoy


Selling
Sellingspaces
spacesthat
thatcancangive
givecustomers
customersopportunities
opportunitiesto
to
find
new
discoveries
at
all
times
throughtheofferingoffind new discoveries at all times through the offering ofadequate
adequatemerchandise
merchandiselineups
lineupsincluding
includingtrendy
trendynew
newmerchandise
and
with
the
use
of
uniquePOPmerchandise and with the use of unique POP

Try
Tryandandenjoy
enjoy


Selling
Sellingspaces
spacesthat
thatcancangive
givecustomers
customersopportunities
opportunitiesto
totry
try
products
productseasily
easilywith
withthetheuseuseof
ofadequate
adequatetesters
testersand
andplenty
plentyofofamenities
amenities•• SetSetup
upselling
sellingspaces
spacesthat
thatcancangive
givecustomers
customerschanceschancesto
tocheck
checkactual
actualmerchandise,merchandise,which
whichisisan
anadvantage
advantageof
ofactualactualstores,
stores,while
whileEC
ECsitessitesareare
being
beingusedusedmoremoreextensively.
extensively.
•• Accelerated
theopening
Accelerated the openingof
ofstoresstoresin
inmediummedium-andandlarge-sizedlarge-sizedbusinessbusinessregions,ratherthan
focusingondominanceinsmallbusinessregions.
regions, rather than focusing on dominance in small business regions.
23

3. Policies for store openings/merchandise lineups
Expansion
Expansionof
ofmerchandise
merchandiselineups
lineupsin
inlinelinewithwithregional
regionalneeds
needs
and
andstore
storelocations
locations•• Stores
Storesemphasizing
emphasizingperishables
perishablesand
andotherotherfoods
foodshave
havemademadetheirtheirmerchandise
merchandiselineups
lineupsappropriate
appropriatein
inlinelinewith
withcompetitivecompetitive
situations
situationsand
andlocations.
locations.
•• Merchandise
Merchandiselineups
lineupsfocusing
focusingonly
onlyononbeauty
beautyasasaanew
newlinelineofofbusinessbusinessin
inSCs
SCsandandlocations
locationsfor
forSM
SMcollaboration
collaboration•• Integration
Integrationof
oftwo
twoessence
essenceitems
itemsininlargelargestoresstoresAddition
Additionof
ofmerchandise
merchandiselineups
lineupsin
inlinelinewith
withchanges
changesinincustomer
customerneeds
needs

Enhancement
Enhancementof
ofconvenience
conveniencethroughthroughexpansion
expansionof
ofmerchandise
merchandise
lineupslineupscontaining
containingnewly
newlydiscovered
discoveredmerchandise
merchandisethat
thatisisin
indemanddemandduedueto
tolifestyle
lifestylechanges,
changes,etc.
etc.

24

4. Personnel cultivation
Strengthened
Strengthenedhuman
humanresources
resourcesin
inlinelinewith
withthetheaccelerated
acceleratedopening
openingof
ofstores.
stores.
Hired
Hired500
500persons
personsthis
thisyear,
year,including
including400
400new
newgraduates.
graduates.
HelpedHelpedpartners
partnersplay
playactive
activeroles.
roles.
•• Promoted
Promotedthe
theacquisitionacquisitionof
ofqualifications
qualificationsand
andimprovement
improvementof
ofskills,
skills,andandcultivatedpersonnel
to
help
them
becomeregisteredsellersor
storemanagers.
cultivated personnel to help them become registered sellers or store managers.
•• Adopted
Adoptedflexible
flexibleemployment
employmentpolicies
policiesto
toexpandexpandthe
theplaces
placeswhere
whereemployees
employeescan
can
play
more
activeroles.
play more active roles.

Gave
Gavefemale
femaleemployees
employeessupport
supportfor
forworkplace
workplacesuccess.
success.
•• Actively
Activelypromoted
promotedthe
theappointment
appointmentof
ofemployees
employeesas
asareaareamanagers,
managers,store
store
managers,orheadquarters
staff.
managers, or headquarters staff.
•• Adopted
Adoptedwomen’s
women’sviews
viewsand
andreflectedreflectedthem
themininselling
sellingspaces
spacesandandmerchandise
merchandise
lineups.
lineups.
25

5. Activities to enhance productivity
Establishment
Establishmentof
oflogistics
logisticssystemsystem
Optimization
Optimizationof
ofdelivery
deliveryoperations
operationsthroughthroughthe
theestablishment
establishmentof
ofaanew
newlogistics
logistics
centercenterin
inlinelinewithwithstore
storeopenings.
openings.
•Established•Establishedthe
the“Shinfuji“ShinfujiCenter”
Center”totocarry
carryout
outlogistics
logisticsactivities
activitiescovering
coveringperishable,
perishable,
dried
and
chilledfoods
inan
integrated
manner.
dried and chilled foods in an integrated manner.
•Scheduled•Scheduledto
toestablish
establishaanew
newlogistics
logisticscenter
centerhaving
havingthe
thesamesamefunctions
functionsin
inaa
dominant
dominantarea
areanext
nextyear.
year.

Improvement
Improvementof
ofworkworkefficiency
efficiency•• Reduced
Reducedworking
workinghours
hoursbybyimplementing
implementingassisted
assistedorders
ordersatatall
alldivisions
divisionsof
ofall
all
stores.
stores.
•• Implemented
Implementedassisted
assistedorders
ordersat
atnew
newstores.
stores.
Reduced
Reducedworking
workinghours
hoursbybyimplementing
implementingassisted
assistedorders
orderswhen
whenopening
openingstores,
stores,rather
than
half
a
year
later.
rather than half a year later.
•• Improved
Improvedshelf
shelfstacking
stackingefficiency
efficiencyat
atstoresstoresby
byclassifying
classifyingdelivereddeliveredmerchandise
merchandise
into
more
detailed
categories.
into more detailed categories.
•• Reduced
Reducedmerchandise
merchandisechecking
checkinghours
hoursbybyimplementing
implementingan
anexpiration
expirationdate
date
management
managementsystem.
system.
•• Improved
Improvedoperations
operationsthroughthroughdispensing
dispensingat
atpharmacies
pharmaciesbased
basedononpredictions
predictionsof
ofcustomer
visits,andshelving
allocation
in
line
with
the
frequencyofuse.
customer visits, and shelving allocation in line with the frequency of use.
26

6. Activities at prescription pharmacies
Meeting
Meetingmore
moreprescription
prescriptiondemand
demand•• CreatedCreatedaaregional
regionalmedical
medicalcooperationcooperationsystemsystemby
byattracting
attractingmedical
medicalinstitutions
institutions
andpromotingthedivisionoflabor.
and promoting the division of labor.
•• Reduced
Reducedwaiting
waitingtime
timebybyimproving
improvingoperations
operationswith
withthetheuseuseof
ofequipment.
equipment.

Addition
Additionof
ofhealth
healthsupport
supportfunctions
functions•• Increased
Increasedthe
thenumbernumberof
ofstoresstoresproviding
providingservice
service24
24hours
hoursaadayday
55
55storesstoresprovideprovidesuch
suchservice
serviceas
asof
ofyear-end
year-end(+28(+28stores)
stores)•• Increased
Increasedthe
thenumbernumberof
ofstoresstoresmeeting
meetinghome-carehome-carepatients’patients’demand
demand118
118stores
storesprovidesuch
serviceasofyear-end(+50
stores)provide such service as of year-end (+50 stores)•• Increased
Increasedthe
thenumbernumberof
ofstoresstoresholding
holdinghealthhealthconsultations
consultations120
120stores
storesheld
held
such
consultations
this
year
(+16
stores)such consultations this year (+16 stores)

Aggregation
Aggregationof
ofgenericgenericmedical
medicalandandhealthhealthproducts
products
Reduced
Reducedexcess
excessinventory
inventoryand
andimproved
improvedcost
costrates
ratesbybyaggregating
aggregatinggenericgenericmedical
medicalandhealthproducts.
and health products.
27

7. Nursing care businessFee-based
Fee-basednursing
nursinghome
homebusinessbusiness•• Improved
Improvedoccupancy
occupancyrates
ratesby
bystrengthening
strengtheningmarketing
marketingability.
ability.

Aim
Aimto
toachieve
achieveaa 80%
80%occupancy
occupancyrate.
rate.
•• Reduced
Reducedcosts
costsbybyperforming
performinginventory
inventorycounts
countsandandpreparing
preparingmanuals.
manuals.

Day-careDay-careservice
servicebusinessbusiness
Focused
Focusedon
onimproving
improvingprofitability
profitabilityof
ofexisting
existingfacilities.
facilities.
•Converted•Convertedfrom
from10-person
10-personcapacity
capacityto
to16-person
16-personcapacity:
capacity:55facilities
facilities
Converted
Convertedto
to22-person
22-personcapacity:
capacity:11facility
facility•Improve•Improvethe
thecapacity
capacityutilization
utilizationof
ofexisting
existing16-person
16-personcapacity
capacityfacilities
facilitiesto
to
80%
by
the
end
of
year
80% by the end of year
•Newly•Newlystarted
starteddementia
dementiaprevention
preventiontraining.
training.

28

8. FYE 5/2018 Forecasts (Consolidated)
FYE 5/2017(consolidated results)

FYE 5/2018(consolidated projection)(million yen)

Share
(%)

Net sales

247,341100.0

271,200

100.0

109.6

Gross profit

68,14927.6

74,700

27.5

109.6

SG&A expenses

53,70721.7

59,300

21.9

110.4

Operating profit

14,441

5.8

15,4005.7

106.6

Recurring profit

14,7686.0

15,7005.8

106.3

Net profit

10,1194.1

10,4003.8

102.8(million yen)

Share
(%)

YoY Change(%)

29