FY 2023

Financial Presentation

May 16, 2023
＜Cautionary Statement Regarding This Document＞

Forward-looking statements are based on the information available to Valor and its consolidated subsidiaries
when preparing this presentation. Various factors in the future may cause our actual results to be materiallydifferent from any future results expressed or implied by these forward-looking statements.

Message from Acting President & Director
Creating an overwhelming company presence as a destination company.
The impact of the COVID-19 pandemic has changed consumer behavior. The effects of these changes have spread
without exception to the food distribution industry, to which our group belongs, as well as to surrounding
industries, and each company continues to endeavor to adapt to environmental changes in order to survive.

Approximately five years ago, we began trials of a new store model, and based on the direction its transformation
has taken, we have been adapting stores quickly to ongoing environmental changes such as the decrease inpopulation and the COVID-19 pandemic. The pillar of this transformation is the transition to “destination stores.”Our group believe that it is necessary to convert our stores to a model where the unique product and category mix
itself would be the motivation for customer visits. We therefore moved forward on the renovation and expansion of
fresh food sections, and strived to improve product appeal by renewing private brands. This management policy,
based on “undertaking a paradigm shift from expanding standardized stores to enhancing the appeal of products,”
has been enabling us to enhance store competitiveness and go beyond market areas to acquire customers thatwould not normally be the targets, while growing the support that they offer.
The strategic goal of the FY2021-2023 strategic plans is “Connect 2030:
Connecting Products, Customers, and Society,” and through the implementationof this goal we seek to achieve growth into a destination company. These plans
were established as the first step to clarify our vision for the future as “ValorGroup Vision 2030” and “Sustainability Vision 2030”.
On April 4, 2022, we moved to the Prime Market in accordance with the market
reclassification of the Tokyo Stock Exchange. The Prime Market, as our newmarket category, is positioned as the market for companies that have a market
capitalization (liquidity) large enough to be the investment target of many
institutional investors, have higher standards of governance, and are committed
to sustainable growth and medium- to long-term enhancement of corporate value
by focusing on constructive dialog with investors. We will also be more consciousof our balance sheet in order to achieve the management paying attention to thecost of capital and the stock price.
We, Valor Holdings will continue to strengthen its governance system andcontinue to grow together with all stakeholders. We would like to ask ourshareholders and investors for your continued support. Please look forward toseeing us tackle further challenges.
©2023 Valor Holdings Co.,Ltd.

Acting President & Director

Takayuki Koike
2

Contents
Ⅰ．Summary of FY2023 Financial Results
Ⅱ．FY2024 Forecast
Ⅲ．Valor Group’s Growth Strategy
Ⅳ．(Reference) Segment Overview©2023 Valor Holdings Co.,Ltd.

3

Key Points of Financial Presentation➢ Summary of FY2023 Financial Results
・ Operating revenues exceeded the plan and reached a record highfor the 28th consecutive fiscal year.
・ The increase in SG&A expenses, mainly utility costs, was offset by the growth of
the top line in main businesses, and profits recovered in the second

half (up ¥1.7 billion) compared to the first half (down ¥2.8 billion), when
there was a large reactionary decline, but profits for the full year were slightly
down.
・ Net income decreased due to impairment loss and other extraordinary losses.

➢ FY2024 Forecast¥772.0 billion in Operating revenues, ¥20.5 billion in Operating income¥23.3 billion in Ordinary income, and ¥9.3 billion in Net income
attributable to owners of parent are expected.
(Quantitative goals have been revised in response to changes in the businessenvironment since FY2021-FY2023 strategic plans were established.)©2023 Valor Holdings Co.,Ltd.

4

Ⅰ．Summary of FY2023 Financial Results
Ⅱ．FY2024 Forecast

Management Director

Akira Shinohana©2023 Valor Holdings Co.,Ltd.

5

FY2023 Consolidated Business Results➢➢➢

Record-high operating revenues
Sales increased in 3 main businesses (SM, DgS, HC)
Profits recovered in the second half (up ¥1.7 billion) compared to the first half
(down ¥2.8 billion), when there was a large reactionary decline.
(Yen in millions, except for EPS）

FY23

FY21

FY22

Results

Results

Forecast

Results

Operating
Revenues

730,168

732,519750,000

７５９,９７７

+3.7%

1.3％

Operatingincome25,64821,20522,70020,062- 5.4％- 11.6％

Ordinary
income28,397

24,14025,00023,049- 4.5%- 7.8％

12,592

9,014

11,5007,603- 15.7%- 33.9％*Net income
attributable toowners of parent

YoY

vs. Plan*EBITDA is calculated based on operating income + amortization (CF basis)

EBITDA*

43,882

41,434-40,754EPS

234.52167.87214.17141.61©2023 Valor Holdings Co.,Ltd.

(Yen）
6

Factors of Increase/Decreasein Operating Income➢ Gross operating profit (GOP) increased ¥7.7B due to the top-line growth.
➢ Approx. ¥3.5B increase in utility costs due to soaring electricity prices.
(Yen in millions）

Decreasein selling
costs
Increase ingross operating
profitIncreasein labor
costs

Increasein utility Increase
costs
in facility
costs

Increase inother admin.
costs

FY22
Results©2023 Valor Holdings Co.,Ltd.

FY23
Results7

Quarterly Results➢

Profit increased YoY in Q3 and Q4 (profit picked up from Q1 and Q2, when
there was a significant reactionary decline), but income decreased for the fullyear due to higher cost rate (labor and facility costs).
(Yen in millions）
Results

YoY

Operatingrevenues

374,661

199,890

185,424759,977

+2.4%

+6.5%

+3.7%

+3.7%

Net sales

362,317

193,485

179,581735,385

+2.4%

+6.6%

+3.7%

+3.8%

Gross profit

96,04951,05848,314

195,422

+2.7%

+5.4%

+4.4%

+3.8%

GOP

108,393

57,46354,157220,014

+2.6%

+5.2%

+4.2%

+3.7%

Total expenses

98,82550,62250,503

199,951

+6.0%

+4.1%

+2.6%

+4.7%

Operating income

9,567

6,840

3,654

20,062 △23.2%+13.8%+33.5%△5.4%

Ordinary income

11,106

7,289

4,653

23,049 △20.9%+12.6%+28.4%△4.5%

Ratio to operating revenues

Difference for YoY

Gross profit（vs. Net sales)

25.6%

26.4%

26.9％

26.6%

△0.6%

△0.3%

+0.2%

0.0％

GOP

28.9%

28.7%

29.2%

29.0%

0.0%

△0.2%

+0.1%

0.0%

Total expenses

26.4%

25.3%

27.2%

26.3%

+0.9%

△0.6%

△0.3%

+0.2%

Operating income

2.6%

3.4%

2.0%

2.6%

△0.8%

+0.2%

+0.5%

△0.3%

Ordinary income

3.0%

3.6%

2.5%

3.0%

△0.8%

+0.2%

+0.5%

△0.3%

©2023 Valor Holdings Co.,Ltd.

8

Operating Results by Segment※ For details, see p.36 ➢➢➢➢In SM, sales increased due to strong sales of new stores and contribution from last year's M&A, but income decreased due
to higher SG&A expenses.
Drugstore operations recorded higher revenues and income due to strong sales of pharmaceuticals and the prescription
section and improved merchandise gross profit margins.
In the home improvement center business, profit decreased due to a decline in the number of customers, despite an
improvement in gross profit margin resulting from an increase in the percentage of PB products sold.
Losses in the sports club business increased, partly due to higher utility costs.

* “Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29) and others have been applied from the beginning of FY2022

Operating revenues
FY21

FY22

Results

Results

Results

Supermarket
business

396,248405,537

Drugstore business

150,575

Home improvement
center business(Yen in millions）

Segment profit
FY21

FY22

YoY(%)

Results

Results

Results

421,838+4.0%

16,103

14,90813,374- 10.3%

152,474

160,947

+5.6%

3,978

2,950

4,317

+46.3

130,177

122,947

124,962

+1.6%

7,327

5,061

4,620

△8.7%

Sports club business

9,146

9,847

9,439

- 4.1%- 1,933- 559- 1,159

ｌoss increase

Distribution-related
operations

11,26910,451

11,373

+8.8%

3,210

3,206

3,296

+2.8%

Others32,752

31,26031,414

+0.5%

2,703

2,510

1,635

- 34.7%- 5,740- 6,872- 6,022

25,64821,20520,062.

FY23

Elimination or
corporate expenses

Total

730,168©2023 Valor Holdings Co.,Ltd.

732,519759,977

+3.8%

FY23

YoY(%)- 5.4%
9Changes in Management Indicators➢➢

Stability indicators continued to improve, partly due to the reduction ofinterest-bearing debt (¥125.4 billion → ¥118.7 billion, -¥6.7 billion).
Profitability indicators are to be focused on improvement.

FY21

FY22

FY23

Results

Results

Results

ROA

7.2%

5.9％

5.6％

ROR

3.9%

3.3％

3.0%

Total Asset Turnover

1.9

1.8

1.8

ROE

9.2%

6.2％

5.0%

ROIC*

6.0

4.1%

3.7%

Equity ratio

35.3%

36.2％

36.6%

D/E ratio

0.8

0.8

0.7

Net D/E ratio

0.6

0.6

0.6

*ROIC is calculated by dividing operating income after tax (using the effective tax rate) by (interestbearing debt + net worth + noncontrolling interests).
©2023 Valor Holdings Co.,Ltd.

10

Contents
Ⅰ．Summary of FY2023 Financial Results
Ⅱ．FY2024 Forecast
Ⅲ．Valor Group’s Growth Strategy

Ⅳ．(Reference) Segment Overview©2023 Valor Holdings Co.,Ltd.

11

FY2024 Forecast➢ Supermarket: Opening 5 new stores to create new flagship stores.
➢ Drugstores: Accelerating the reinforcement of the health & beauty
dispensing business.
➢ Home improvement centers: Improving the gross profit margin further
with a target of 18% of PB ratio.
（Yen in millions）

FY22

FY23

Results

Results

FY24
Plan

YoY

Operating revenues

732,519759,977

772,000+1.6％

Operating income

21,20520,062

20,500+2.2％

Ordinary income

24,14023,04923,300+1.1％

Net income
attributable to owners ofparent

9,014

7,603

9,300

+22.3％

Existing stores sales growth rate
Supermarkets+1.1%- 0.1％±0％Drugstores- 1.9%

+2.9%

+1.5%

Home improvement centers- 3.0%- 0.7％±0%©2023 Valor Holdings Co.,Ltd.

12

Number of Stores and Capital Investment Plan
➢ In store investment, focusing on investment for new stores.
➢ In infrastructure investment, planning to invest in Hokuriku livestock
Process Center (PC) & Fukusi Fisheries PC.
FY22

FY23

FY endFY end

312

316

５

-

321

33

42

12

-

54

Drugstores

478

495

15

5

505

Home improvement centers

158

161

6

2

165

Sports clubs
(FC)

193

184
（52）

5

181

（59）

2
(1)

Pet shops

１１５

１１9

6

1

124

5

5

-

-

5

1,294

1,322

46

13

1,355

30,94725,99522,838New investment

14,484

13,464

12,121

Existing stores investment

15,158

11,726

6,645

1,304

805

4,065

（Number of stores）
Supermarkets
Delicatessen Specialty Stores

Others
Total

Capital investment

Others©2023 Valor Holdings Co.,Ltd.

FY24

Open

ClosedFY end(48)（Yen in millions）※payment basis

13

Management to Enhance Corporate Value➢ Generating stable CF and continuing investment by multiple
businesses.
Distribution of OCF and CFI
over the past 10 years.
35,000(Yen in millions)

25,000【CF breakdown】

Defensive（divestiture) 15,000(Yen in millions)

FY21

FY22

FY23

5,000

CFO

44,13824,361

36,397-5,000

CFI- 28,137- 26,729- 25,885

FCF

16,001- 2,367

10,511

CFF- 10,472- 4,115- 12,329

CCE
End of Period

29,34922,867

20,973(CFI)-15,000
Offensive（investment） -25,000-35,000-50,000 -30,000 -10,000 10,000 30,000 50,000(CFO)

Struggling in
main businesses

Steady in
Main businesses

Main businesses generate stable cash flow, continuing investment generally within CFO.
©2023 Valor Holdings Co.,Ltd.

14

Cost of Capital- & Stock Price-Conscious
Management➢➢➢

We recognize corporate value comprises “future growth,” “profitability," and“stability.”
The weighted average cost of capital, calculated by CAPM, is estimated to beapproximately 2.4 to 3.3.
ROIC, a key component of corporate value creation, continues to exceed WACC.

Corporate Value Components
FuturegrowthDriverHigh sales growth
rate

Sales growth rate

High profit ratio

Profit rate

Profitability

Stability

ROIC

ROC

Invested capitalBusiness risk

Cost of capital

ROIC
WACC

Achieved
ROIC
over
WACC

FY18

FY19

FY20

FY21

FY22

FY23

Ave.

4.4%

4.1%

3.6%

6.0%

4.1%

3.7%

4.3%

WACC
©2023 Valor Holdings Co.,Ltd.

2.4～3.3%
15

Shareholder Return (Dividend Forecast for FY23）➢➢➢

Pｌanning to pay an annual dividend of ¥60 (interim dividend: ¥28; year-end dividend: ¥32）.
Maintaining stable and continuous dividends with a target dividend payout ratio of 25%.
Maintaining an increase in dividends while paying attention to the balance between
investment and shareholder returns.

（%）

（¥）

（%）

6

60

50
45

5

50

4

40

40

35
30

3

30

25
20

2

20

1

10

15
10
5

0

0

0
10/3

11/3

12/3

13/3

14/3

15/3

16/3

Interim dividend per share (¥)
DOE (left axis)©2023 Valor Holdings Co.,Ltd.

17/3

18/3

19/3

20/3

21/3

22/3

23/3 24/3eYear-end dividend per share (¥)
Dividend payout ratio (right axis)
16

Contents
Ⅰ．Summary of FY2023 Financial Results
Ⅱ．FY2024 Forecast
Ⅲ．Valor Group’s Growth Strategy
Ⅳ．(Reference) Segment Overview©2023 Valor Holdings Co.,Ltd.

17

Valor’s Growth Strategies➢ “Double cropping” management.
Both continuous improvement and strengthening of the three main
businesses (SM, DgS, HC), and expanding new business areas leveraging theGroup's resources. (From the statement of belief upon assuming office as Acting President in August 2022.)

Main Businesses

Double Cropping

Solidifying the foundation for ¥1
trillion in operating revenues bystrengthening the three main
businesses (SM, DgS, HC).

Building a co-creation model deeply
rooted in the community by expanding
the market through data utilization,
non-store operations, andcollaborations with local governments.

6 Projects
HRD

Increasing product appeal &Producing strong items.

Management①Improving productivity③Promoting SPA development⑤Developing MBO②Developing human resources④Developing private brand⑥Developing marketing policy©2023 Valor Holdings Co.,Ltd.

18

Strengthening Main Businesses：
Supermarket ①➢ The destination store (DS), which enhance fresh food products andimprove customers' purpose of visits to our stores is responding well.
➢ 70 destination stores out of 240. (52 stores as of last April)＜Verification of DS effectiveness＞（Yen in millions)Comparison of fresh food section composition

140

14.5%
52.1%

5.2%

130

10.4%

110

9.9%

120

39.8%

+16％

100
90
80

19.2%

14.3%

DS店舗(高辻店)
畜産

160
150

6.0%

12.4%

+27％

Monthly sales

170

20/3

全店平均
水産

野菜

果物

DS改装店舗©2023 Valor Holdings Co.,Ltd.

22/3

23/3

ほか

Comparison of existing store sales with those
before the Pandemic (FY19)

Valor
SM

Whole fish are sold at a fish
section

21/3

4月

5月

6月

7月

8月

9月

104.5

106.3

100.2

110.4

106.3

104.7

10月

11月

12月

1月

2月

3月

111

108.1

115.7

115.1

102.5

103.3

Appealing its volume at avegetable section
19

Strengthening Main Businesses：
Supermarket ②➢ Challenges for future DS development①Increase in man-hours ②Expansion to smaller stores＝ Challenge to Neo DS＜Neo DS＞
・Low-cost operation
・Infrastructure utilization

Expanding to small stores withsales of less than ¥1 billion

Cashier employees helping
with baking

Profitability by size of Valor SM

Size

Sales
Composition

Low

Approx.

25%

Small stores

MiddleApprox.

50%Mid-sized stores

High

Approx.

25%

Large stores©2023 Valor Holdings Co.,Ltd.

Profitability

Central processing function(PC) supporting low-cost
operations
ProfitabilityHigh

Neo DS

DS

No.1
store
Size
Large

Low profit
stores20

Strengthening Main Businesses：
Supermarket ③➢ Continuing growth strategies. Building up challenges and outputs.
➢ Acceleration of store openings➢= Expanding to Kansai area + opening the group’s SM.

＜Strategies：Keeping creating new No.1 stores＞
Developing our store strategy bykeeping creating new No.1 stores.

・Becoming new No.1 stores
Sakaitoyota（Osaka）、Nakaotai（Aichi）、
Yao（Osaka）（schedule to open）
Proceeding the construction of logistics andother infrastructure.

・ Intercompany good practices
in SM
Conducted cross-training among SM groupｓ
and exchanged personnel with cross-culturalDNA.

No.1 store 10years ago
Stores that surpass©2023 Valor Holdings Co.,Ltd.

Interchnage
training about
fisheries by
Yaosen andValor.

21

Strengthening Main Businesses：
Drugstores ①➢➢

Strengthened financial position by improving profitability. Moving on to future
growth strategies.
Urban-type stores performed well, partly due to the recovery of people flow
and inbound demand.

＜GPM improvment＞＜Productivity improvement＞

・Growth of Health & Beauty care
108% in FY23, 120％ target for FY25
120%

※FY22=100

110%

108%

・New automated ordering system
AI forecasting model analyzes external
environments such as productinformation and weather. (From June 2023)
Goal: Automated order placement ratefrom 80% to 100%.

・Policy review depending on sales scale
22/3

23/3

24/3(目標) 25/3(目標)・Expanding PB
Target group PB rate: 15%（including 10% of V check)
Original PB “V check”
Approx.200 items now.
©2023 Valor Holdings Co.,Ltd.

Completed developing increase in refrigerated
products in all stores.
Renovation criteria were set and the number ofrefrigerated and frozen shelves was changed toan appropriate number to reduce electricity
costs and workload.

Flexibly changing policies to maximize profits,rather than taking a one-size-fits-all approach.

22

Strengthening Main Businesses：
Drugstores ②➢➢

Attached dispensing stores and attracting doctors expanded in dominant areas.
157 dispensing stores. (21 more stores to be opened FY24)
Preparing for current trends, such as telemedicine.

＜Impact of dispensing business＞＜Attracting clinics＞（Yen in millions） Sales in dispensing division

25,00020,000Five-year average growth
rate: 14.6％

15,00010,000
5,000
0
18/3

19/3

20/3

21/3

22/3

23/3

A clinic is housed in a V drug store building.

©2023 Valor Holdings Co.,Ltd.

23

Strengthening Main Businesses：
Home Improvement Centers （＋Pet Shops)➢➢

To achieve "Challenge 3000" (operating revenues of 300 billion and ordinary
income rate of 5.0%), we will expand its product and store appeal with a focus
on PB products.
Backed up by DX initiatives such as digital sales promotion.

＜Growth strategies with a focus on PB＞
Improvement of
product appeal↓
PB composition rate to18%↓
GPM improved＜PB rate＞

18%

13.20%
10.70%

2022/2

Improvement of
store appeal

Differentiation
strategy↓
New stores & renovationof existing stores↓Open 6 stores
Renovate 11 stores↓
Strengths not found inother HC companies↓
Pet shop businessstrategyStore openings in core cities across Japan.
The prototype sales floor is approx. 8891 sq ft.
Comprehensive pet shops.
Store openings in major metropolitan areas
near Tokyo.
The prototype sales floor is approx. 7116 sq ft.
Some stores do not handle live cats and dogs.

2023/2©2023 Valor Holdings Co.,Ltd.

2024/2eStore openings in commercial facilities in the Tokyo
metropolitan area.
The prototype sales floor is approx. 3558 sq ft.
High-priced product policy, and strength in trimming knowhow.

24Double Cropping：EC➢➢➢

Although the growth rate will be reduced in the post-pandemic, the sales have been stable in each ecommerce area.
Collaboration with other companies continues such as that with Shokubun Co., Ltd. in the ainoma
business in addition to Amazon.
The mobile vending business, a measure to help people who have limited access to shops, has also
expanded to 25 vehicles.

＜ainoma＞
Collaboration with Shokubun Co., Ltd., which has
a distribution network in Kansai area.

ainomaOpening ceremony with
Shokubun Co., Ltd.

Stores on wheels

Sharing know-how in the development of delivery
vehicles and meal kits.
We will expand joint efforts with the common
keyword of “time-saving needs from busy
housewives".
（Yen in 100 millions）

Merits for both companies

Ref.：EC total sales ofValor Group92
Expansion in Kansai

Sales of Valor’s products

Distribution in Osaka

Increase in meal kit sales

Acquisition of new
customers

Effective use of empty
vehicles

74
54
21/3

©2023 Valor Holdings Co.,Ltd.

22/3

23/3
25

Double Cropping：DX➢ Valor group’s DX ： Faster communication between “manufacturing
and sales,” “the headquarter and stores, & “customers and us.”➢ Most recently, LuVit credit card service was launched. (April 11, 2023)＜LuVit credit card＞
Creating new businesses+
Creating Valor economic zone
Changes in cashless payment forthree main businesses

Change in number of members
for LuVit App (FY23)
800,000

60.0%
SMバロー

40.0%

600,000

Vドラッグ

HCバロー

20.0%
18/3

19/3

©2023 Valor Holdings Co.,Ltd.

20/3

21/3

22/3

400,000（person）

4月 5月 6月 7月 8月 9月 10月 11月 12月 1月 2月 3月

26

Double Cropping：
Collaboration with Local Governments①➢➢

Signed a comprehensive regional cooperation agreement with Gifu prefecture. In
our company, a cross-group cooperative council with local governments was set up.
Initiatives to address environmental issues have begun involving the supply chain.

＜ Comprehensive regional
cooperation agreement ＞＜ Valor PPA Solar Alliance Agreement ＞

Following Tajimi City and Ena City, acomprehensive cooperation agreement was
concluded with Gifu Prefecture. (March 2023)

Signing ceremony for comprehensive
cooperation agreement with Gifu prefecture©2023 Valor Holdings Co.,Ltd.

Launched a CO2 reduction model
project in collaboration with i-Grid
Solutions, Inc. (From April 2023)Started
CO2 reduction throughout the entire
supply chain. This is the first initiative inthe distribution and retail industry inJapan.

An image of Valor PPA Solar Alliance27

Double Cropping：
Collaboration with Local Governments②➢➢

Reinforcing sustainability promotion activities in collaboration with local
governments.
Actively promoting the installation of food drive posts at the Valor stores.
Planing to install them in 25 stores in the next FY.

＜Sustainability promotion activities＞

・ Councils of social welfare
Collaboration with councils of social
welfare and local governments ineight prefectures in addition to Gifu.
⑭

・Children’s cafeteria

Number of partnerchildren's cafeterias
75 locations → 161⑨

Children’s cafeteria eventat Matsumoto store③

Installation of food drive
posts at the Valor stores
15 stores → 40
(planning in FY24)

⑩

⑥

⑤
⑯
④

⑫
①
⑮

②
⑪
⑧

⑦
⑬

(FY23)

A food drive post in a store
FY23, Locations for sustainable activities©2023 Valor Holdings Co.,Ltd.

28

6 Projects
➢
➢

HDR

Improving productivity： Reduced operations by improving the accuracy of automatedordering for daily delivery, and improved operations by increasing logistics efficiency.
Developing human resources： Promoted young store managers and increased the ratio of
female managers. Realization of cross-sectional personnel management across the group.

＜Productivity improvement＞＜Set HR Personnel Dept.(Feb.2023)＞

・Improved logistics efficiency

・ Next generation leader development

Changed livestock PC productdelivery into that with dollies.

Listing and fixed-point observation ofpotential executive employees.

Improved display operations.

Aiming for job rotation across the group.

・Improving working environments
Starting salary ¥207,000→¥217,000（college graduate）

Redesigning HR evaluation system & careerplans.

Delivery with dollies at livestock PC・& displaying.
©2023 Valor Holdings Co.,Ltd.

29

6 Projects➢➢

Increasing product appeal &Producing strong items.

Promoting SPA development：Modeling the vertical integration with
manufacturing, distributing, and sales; and facilitating information linkage
between manufacturing companies.
Private brand： Mainly SM and DgS work together to eliminate cannibalization.

＜SPA development＞
・Spring and fall product launch
Make use of the product launch asopportunities that lead to the next
step.

・Expanding vertical integration（Valor’s “絶品肉焼売”(steamed dumplings）

Meat from Chubu Meat Co., Ltd., whichused to be delivered in a process center
is now directly delivered to the factoryof Keirinkaku Co., Ltd.

©2023 Valor Holdings Co.,Ltd.

＜Private Brand＞
・Organizing info. at the productdeveloping stage
Organizing how to share the information ofdevelopment of products among groups.

・PB development and procurement
across the group
Align direction in purchasing products among
SM, DgS, and HC.
Fixed-point observation of sales volume.

30

6 Projects

Management➢ MBO： Setting objectives and working toward them. Sharing goodpractices horizontally.
➢ Marketing policy： Creating sales floors showing the “affordability” ofthe products, and formulating a “sell-out model” based on store sizes.

＜MBO＞
・SM gross profit margin to increaseby 1%.
Set a target of 1% increase in gross profit
margin.
Sharing cases in which the goal wasachieved horizontally.

Made a video of a day of Fisheries Department
Manager at Ryoge store©2023 Valor Holdings Co.,Ltd.

＜Marketing policy＞
・Review the balance between value andprice
Review the balance between product value andprice in an environment of price increases.

・Loss reduction by sell-out model
Created sales-floor-change models for eachstore size.
Improvement costs: Approx. ¥17 million.
(March 2023).

Products at the end insmall and medium-sized
storesA POP sign for sale (Whenchanging the sales floor)
31Distribution-related Operations①➢➢

Acquired Showa Film Co., Ltd. and Unido Pack Co., Ltd., both of which produce flexible
packaging materials, as subsidiaries.
Developing SPA further, vertically integrating design and packaging functions.
1) Consumable materials for stores (¥5 billion), 2) Packaging materials for manufacturing (¥2 billion),3) Supply of PB and NB packages (¥900 million)＜ Vertical integration of flexible packaging supply chain ＞＜Manufacturer＞ ＜Wholesale＞ ＜Manufacturer＞＜Wholesale＞ ＜Manufacturer＞

Raw
Material

Raw
Material

Flexible
packagingprocessing

Flexible
packaging

Cosmetics
Goods
Foods

Retailing＜Manufacturer＞ ＜Wholesale＞ ＜Manufacturer＞ ＜Wholesale＞ ＜Manufacturer＞

Raw
Material

Showa
Film

©2023 Valor Holdings Co.,Ltd.

Unido
Pack

Flexible
packagingValor
manufacturer

Valor
SM
DgS
HC

32

Distribution-related Operations②➢➢

FDC achieves greater efficiency. Dried noodle category was added to further
secure profit.
Launching a joint distribution center for rice to improve the loading rate anddelivery efficiency in FY24 .

＜FDC＞
・Beverage FDC（May 2022-）
Storing and managing the inventory at
manufacturer and wholesaler
warehouses, and picking by eachcenter.

＜Rice joint distribution center(May 2023-)＞
Significantly improved loading rate,a challenge for rice delivery

・Noodles FDC（Feb. 2023-）
Efficient loading realized by stacking
beverages and dried noodles in thevehicle.

Joint DC
Rice vendor

Volor’s DC

Delivering beverages and dried noodles together,avoiding overloading.
©2023 Valor Holdings Co.,Ltd.

33

Sportｓ Club Business➢➢➢

Revised into customer-oriented services through revitalization PJ under the new management
structure.
Aiming to acquire 63,000 members per year and achieve a net increase of over 11,000 members
Not price competition, but enhancing specialty (e.g. schools) to optimize earnings ASAP.

＜Map of sports club market＞
High priceSpecialtyenhanced type
sports clubs
Swimming school
Self

Athletic ability
improvement school

School24-hourgyms＜Change in number of members＞(person)

130,000

Will_G etc.
125,000

Low price
120,000
2022.1Q 2022.2Q 2022.3Q 2022.4Q 2023.1Q©2023 Valor Holdings Co.,Ltd.

34

Future Initiatives➢➢

Turning into profitable businesses, focusing on business reorganization.
Managers visit group companies with unprofitable businesses and holdregular meetings, developing a performance management system.
Promoting GX initiatives. Achieving SDGs through the recycling model
within the group.

＜Business integration＞
・From manufacturing plant to process center
Constructed Valor’s fishery process center by using
the site of Fukui Chuo Tsukemono Co., Ltd.

＜Recycling model＞
・Identifying and developing recycling
models in our group.
Seeking our own resource recycling model.
Valor
Pork residue

Use

Sales

Pork
residuemodelCollecting
Transporting

Manufacturing
specific
fertilizer

An example of recycling model at Chubu
Meat Co., Ltd.（License application in progress.）©2023 Valor Holdings Co.,Ltd.

35

Contents
Ⅰ．Summary of FY2023 Financial Results
Ⅱ．FY2024 Forecast
Ⅲ．Valor Group’s Growth Strategy
Ⅳ．(Reference) Segment Overview©2023 Valor Holdings Co.,Ltd.

36

【Ref.】➢

Management Plan by Segment

Assuming improvement in gross profit and higher utility and labor costs due tothe promotion of Neo DS, increase in PB composition rate, etc.
(Please note that the breakdown of sales and profit in the segment plan is an estimate.）(Yen in millions）

Operating revenues

Segment profit

FY22

FY23

FY24

FY22

FY23

FY24

Results

Results

Plan

Results

Results

Plan

Supermarket business

405,537

421,838

427,500

14,90813,37414,000Drugstore business

152,474

160,947

164,200

2,950

4,317

4,320

Home improvement
center business

122,947

124,962

127,000

5,061

4,620

4,700

Sports club business

9,847

9,439

9,800

- 559

- 1,159- 700

Distribution-related
operations

10,451

11,373

11,500

3,206

3,296

3,500

Others※31,26031,41432,000

2,510

1,635

※ 880

- 6,872- 6,022- 6,200

21,20520,062

20,500.

Elimination or corporate
expenses

Total

732,519759,977

772,000※ Includes credit card-related expenses.
©2023 Valor Holdings Co.,Ltd.

37

【Ref.】➢

Increase in profit of about ¥4.2 billion compared to the full year of 2020
before the pandemic.
Expanding horizontally the successful destination store model at the Valor
stores to the group supermarket companies.

(Yen in 100
millions）

SM segment profit
Analyses of full-year results

180(factors of the change from the plan and from theprevious year)

161.03160

149.08132.13

140

120
100

94.33 90.50

Operatingrevenues➢

Supermarket Businessvs. plan◎

New stores such as Sennonji
and Kyotanabe exceeded thebudget.

YoY◎

New stores + M&A (Yaosen,
Yamata) contributed.

vs. plan△Labor costs under control.
Increased utility costs.

YoY△

Valor's facility expenses,
YoY +¥1.8 billion

60
40

20
0

Operatingincome80※◎：increase、○：in line with the plan、△：decrease©2023 Valor Holdings Co.,Ltd.

38

【Ref.】➢➢➢

Drugstore BusinessProfit level almost flat compared to the full year 2020 before the pandemic.
Existing store sales exceeded 100% since July, reaching 102.9% for the full year.
With the prospect of improving the financial structure in sight, we are moving onto the next growth investment strategy.

DgS segment profit

50
43.17

45
40

Analyses of full-year results(factors of the change from the plan and from theprevious year)

vs. plan◎Captured the 7th and 8th
wave of Omicron variant
epidemic demand; existing
store sales have been
positive since July.

YoY◎

Renovating the sales floors of
23 stores.

vs. plan◎

Decrease in sales expenses(flyers changed to bi-weekly);
personnel expenses(pharmacists) increased dueto the attaching dispensing
stores.

YoY◎

Gross margin improvement+0.5%.
Implemented PB campaign.

43.17
39.78

34.88

35
30
25

29.5

Operatingrevenues(Yen in 100
millions）

20

10
5
0

Operatingincome15※◎：increase、○：in line with the plan、△：decrease©2023 Valor Holdings Co.,Ltd.

39

【Ref.】➢

Home Improvement Center Business

Increase in profit of about ¥１.2 billion compared to the full year of 2020
before the pandemic.
Continuing to open specialty stores (for professionals, pet shops, etc.).
PB composition rate to 18%.

HC segment profit
Analyses of full-year results

80(factors of the change from the plan and from theprevious year)

73.27

70
60
50.61
46.04

50
40
30

34.65

Operatingrevenues(Yen in 100
millions）

26.16

20
10
0

Operatingincome➢➢vs. plan◎

Demand for restoration andreconstruction from the
Fukushima earthquake,centered on Daiyu Eight Co.,
Ltd.

YoY

◎

Opening new stores.

vs. plan△

SG&A expenses increased
mainly in utilities.

YoY△

SG&A expenses increased
due to initial store opening
expenses.

※◎：increase、○：in line with the plan、△：decrease©2023 Valor Holdings Co.,Ltd.

40

【Ref.】(Yen in 100
millions）

10
8
6
4
2
0
-2
-4
-6
-8
-10
-12
-14
-16
-18
-20
-22

SpC segment profit
Analyses of full-year results
6.72(factors of the change from the plan and from theprevious year)

5.56

Operatingrevenues➢

Decrease in profit of about ¥１.6 billion compared to the full year of 2020
before the pandemic.
Continue to focus on 3 pillars: member acquisition PJ (revision of businesshours, etc.), member retention PJ (individual programs, acquisition of app
members), and specialty enhancement PJ (enhancement of schools).

vs. plan△

Decrease in the number ofstores （193→184）.

YoY△

Decrease in year-end
membership.

vs. plan△

Top line unachieved.

YoY△

Increase in utility costs.

-5.59-11.58-19.33©2023 Valor Holdings Co.,Ltd.

Operatingincome➢Sports Club Business※◎：increase、○：in line with the plan、△：decrease41

【Ref.】➢

Increase in profit of about ¥0.5 billion compared to the full year of 2020
before the pandemic.
Ahead of the 2024 issue, we have begun reviewing the working hours of store
delivery drivers.

(Yen in 100
millions）

Distribution segment
profit34(factors of the change from the plan and from theprevious year)

33.05

33

32.10 32.06

32
31
30

Analyses of full-year results

29.10

Operatingrevenues➢

Distribution-relate Businessvs. plan◎

Severe business environment
continues due to soaring fuelcosts.

YoY◎

Strong sales outside thegroup in wholesale.

vs. plan◎Thorough control of highexpenses.

YoY◎

Improved procurement oflogistics material handling.

28

27.93

27
26
25

Operatingincome29※◎：increase、○：in line with the plan、△：decrease©2023 Valor Holdings Co.,Ltd.

42

【Ref.】➢Breakdown of Impairment Losses

In accordance with the "Accounting Standard for Impairment of Fixed Assets,"
Valor Holdings and its group recognized signs of impairment of some of its
fixed assets, such as stores, due to a decline in profitability, etc. As a result,
we examined the possibility of future recovery and recorded an impairment
loss of ¥5,939 million as an extraordinary loss.
(Yen in millions）

FY21

FY23

FY22

1,218

768

1,178

Drugstore business

659

1,057

1,016

Home improvement center business

198

698

92

Sports club business

410

324

3,192

-

144

-

Others

356

314

459

Total

2,843

3,308

5,939

Supermarket businessDistribution-related operations©2023 Valor Holdings Co.,Ltd.

43

【Ref.】

Sustainability KPI（to 2050）
FY23
Standard

Realizing adecarbonized society

Final year of
current
strategic plans

FY26

FY29
Sustainability
Vision 2030

FY49
Referece（FY19 results*)(FY19 rate)(FY20 rate)

CO2 emissions at own sites

CO2 emissions at own sites（Electricity-derived）（Including nonelectrically derived）

Total greenhousegas emissions in the
supply chain

Total greenhousegas emissions inthe supply chain

10％

40%

ZERO

reduction

reduction(FY16 rate)(FY16 rate)

CO2 emissions
Greenhouse gas emissions

233,486t

Reducing food waste（FY16 results**)

Food waste generated

18,983t(FY16 rate)

35％

45%

55%

reduction

reduction

reduction

Note： * Calculated for 16 companies comprising 84% or more of consolidated operating revenues.
** Calculated by Valor, Tachiya, and Shokusenkan Taiyo, and will be expanded to cover the entire
supermarket business.

Solar panels to be installed to create anduse renewable energy.
©2023 Valor Holdings Co.,Ltd.

Promoting food waste reduction and foodrecycling.
44

【Ref.】 Cost of Capital Calculation Assumptions➢➢

CAPM-based cost of equity is 4.82% and WACC is 2.42%, based on thefollowing assumptions.
Estimated WACC of 2.4% to 3.3%, taking other assumptions into account.
(Calculated based on the "Guidelines for Corporate Valuation" (JICPA, revised July 3, 2013))(Yen in millions)

Note
Average at beginning and end¥122,118of period(1)

Interest-bearing debt

(2)

Interest expenses¥746

FY23 results(3)

Debt cost

0.61%(2)/(1)(4)

Total number of issued stocks

53,987,499 shares

End of FY23

(5)

Number of treasury stock

429,374 shares

End of FY23

(6)

Stock price¥1,926

Closing price 3/31/2023(7)

Market cap¥103,153

As of 3/31/2023(8)

Income tax, etc.

¥8,055End of FY23

(9)

Current benefit before
adjustment for taxes, etc.

¥17,331

End of FY23

(10)

Effective tax rate35%

35%<(8)/(9)(11)

Market risk premium

6%

Assumption(12)

Risk-free rate

0.32% As of 3/31/2023 10-year JGB yield(13)

Beta value

0.75 Compared with TOPIX Weekly, 5-year©2023 Valor Holdings Co.,Ltd.

Cost of Equity

4.820%

WACC

2.42%
45

Disclaimer•

This material is provided for informational purposes only
and is not intended as a solicitation to take any action. This
material (including performance plans) has been preparedby Valor Holdings based on reliable information currently
available, but it contains risks and uncertainties. We
assumes no responsibility for its accuracy or completeness.

•

The copyright of this material belongs to Valor Holdings
Reproduction or distribution of this material for any reason
without our permission is strictly prohibited.

•

Please use this information at your own discretion. Valor
Holdings assumes no responsibility for any losses that may
be incurred by making investment decisions based solely on
the forecasts, target figures, etc. contained in this material.

©2023 Valor Holdings Co.,Ltd.

46

https://valorholdings.co.jp/