Consolidated Financial Statements for the First Quarter of
the Fiscal Year Ending March 31, 2024
[Japanese GAAP]
August 2, 2023
Company name: VITAL KSK HOLDINGS, INC.
Stock exchange listing: Tokyo Stock Exchange
Code number: 3151
URL: https://www.vitalksk.co.jp/english/
Representative: Mr. Taisuke Murai, President & CEO
Contact: Mr. Kiharu Takahashi, Executive Officer and General Manager of Corporate PlanningPhone: +81-3-5787-8565
Scheduled date of filing quarterly report: August 9, 2023
Scheduled date of commencing dividend payments: —Preparation of supplementary explanatory materials: Yes
Quarterly financial results meeting: None
(Amounts of less than one million yen are rounded down.)
1. Consolidated Results for the First Quarter of the Fiscal Year Ending March 31, 2024
(April 1, 2023 – June 30, 2023)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Three months ended
Million yen%
Million yen%
Million yen%
Million yen%
144,542
1,167
1,470
917
June 30, 2023
June 30, 2022
143,919
849
1,198
640
(Note) Comprehensive income: Three months ended June 30, 2023: ¥4,000 million [-%]
Three months ended June 30, 2022: ¥3,068 million [-%]
Basic earnings per
Diluted earnings per
share
share
Three months ended
Yen
Yen
17.81
June 30, 2023
June 30, 2022
12.05
(2) Consolidated Financial Position
Total assets
Net assets
As ofMillion yen
Million yen
305,713102,199
June 30, 2023
297,316
100,165
March 31, 2023
(Reference) Equity: As of June 30, 2023: ¥100,996 million
As of March 31, 2023: ¥98,986 million
2.

Equity ratio
%

33.0
33.3

Cash Dividends
1st quarter-end
Yen

Cash dividends per share
2nd quarter3rd quarterYear-end
end
end
Yen

Total

Yen

Yen

Yen

Year ended March 31, 2023
12.00
Year ending March 31, 2024
Year ending March 31, 2024
19.00
(forecast)(Note) Revision to the forecast for dividends announced most recently: None

27.00

39.00

20.00

39.00

3. Forecast of Consolidated Results for the Fiscal Year Ending March 31, 2024
(April 1, 2023 - March 31, 2024)(% indicates changes from the previous corresponding period.)
Net sales
Million yen

Operating profit% Million yen

Ordinary profit% Million yen

Profit attributableto owners of parent% Million yen%

Basic earnings
per share
YenFirst half
290,000
2,400
3,100
2,000
39.07
Full year
576,000
4,700
6,000
5,200
101.57(Note) Revision to forecast of consolidated results announced most recently: None
* The percentage increase/decrease is not shown due to a change in presentation method. For details, please see (3)Notes to Quarterly Consolidated Financial Statements of 2. Quarterly Consolidated Financial Statements andPrimary Notes.

* Notes:(1) Changes in significant subsidiaries during the period under review: None
(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: Yes* For details, please see “(3) Notes to Quarterly Consolidated Financial Statements (Accounting policies adopted
specially for the preparation of quarterly consolidated financial statements)” on page 8 of the attached materials.
(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Total number of outstanding shares (common shares)
1) Total number of outstanding shares at the end of the period (including treasury stocks):
June 30, 2023: 51,902,976 shares
March 31, 2023: 61,224,796 shares2) Total number of treasury stocks at the end of the period:
June 30, 2023: 706,479 shares
March 31, 2023: 9,438,699 shares
3) Average number of shares during the period:
Three months ended June 30, 2023: 51,546,832 shares
Three months ended June 30, 2022: 53,125,895 shares* These quarterly financial results are outside the scope of quarterly review by certified public accountants or audit
corporations.
* Explanation of the proper use of performance forecast and other notes- The earnings forecast and other forward-looking statements herein are based on the information currently available
and certain assumptions deemed reasonable by the Company, and thus actual results may differ significantly fromthese forecasts due to a wide range of factors.

Table of Contents
1. Qualitative Information on Quarterly Financial Results .................................................................................. 2
Explanation of Operating Results ...................................................................................................................... 2
2. Quarterly Consolidated Financial Statements and Primary Notes ................................................................... 4(1) Quarterly Consolidated Balance Sheets ....................................................................................................... 4(2) Quarterly Consolidated Statements of Income and Comprehensive Income ............................................... 6(3) Notes to Quarterly Consolidated Financial Statements ................................................................................ 8(Notes on going concern assumption) ..................................................................................................... 8(Notes in the case of significant changes in amount of shareholders’ equity)......................................... 8(Accounting policies adopted specially for the preparation of quarterly consolidated financial
statements) ............................................................................................................................................. 8(Change in method of presentation) ........................................................................................................ 8(Segment information) .................................................................................................................................... 8

11. Qualitative Information on Quarterly Financial Results
The Group previously recognized income from the provision of sales information to manufacturers as
administrative service fee income under non-operating income but changed the method of presentation and thisincome is included in net sales from the first quarter of the consolidated fiscal year under review. As a result of thischange, the results for the first quarter of the previous fiscal year have been retrospectively adjusted to reflect thechange in method of presentation.
For details, please see (Change in method of presentation) in (3) Notes to Quarterly Consolidated Financial
Statements of 2. Quarterly Consolidated Financial Statements and Primary Notes.

Explanation of Operating Results
The Japanese economy during the three months ended June 30, 2023 saw a resumption of economic
activity as COVID-19 became endemic, fueling expectation of a gradual economic recovery. However, at thesame time, continued global monetary tightening to conquer inflation could trigger a global economic downturn,and poses a downside risk to Japan's economy. In addition, there is still a high degree of uncertainty in theoutlook, with rising prices, supply constraints and financial and capital market volatility, and attention needs tobe paid to economic developments.
In the pharmaceutical wholesale business sector, which is the Group's main business, the drug pricerevisions in April 2023 cut approximately ¥310 billion from national healthcare costs and, going forward,
discussions aimed at radically reforming policies and systems related to people's lives and health such as thesocial security system and the drug pricing system are likely to increase and the policy of curbing drug costs islikely to be maintained. With pharmaceutical market development, manufacturing and distribution operations
also changing dynamically day by day, the solutions to pharmaceutical distribution related problems are also
becoming increasingly complex and the business environment remains challenging.
In light of such changes in the market structure and operating environment, the Group formulated its
Long-term Vision 2035 from the fiscal year ending March 31, 2024, which is "to transform the future of
medical care by transcending boundaries and "acting as a bridge" to cutting-edge medicines." Based on thislong-term vision, the Group will expand medical care-related businesses with the aim of developing asustainable distribution structure for drugs and medical care-related products through independence andcooperation and contributing to the resolution of social issues and the extension of healthy life expectancy.
Furthermore, with "business model innovation looking at next-generation capabilities" as its medium-term
vision, the Group is implementing its fifth Medium-Term Management Plan, spanning the three-year period
from the year ending March 31, 2023 to the year ending March 31, 2025. In the medium-term management
plan, the Company has set out practical tasks to “1. Explore a pharmaceutical distribution model to adapt tochanges in the market structure and meet market characteristics,” “2. Evolve distribution and marketing models
tailored to the advancement of DX in the field of medical care,” and “3. Promote the Group management thatmeets Prime Market requirements.” By steadily solving these issues, we will aim to further evolve as acompany indispensable for local healthcare.
For the three months ended June 30, 2023, net sales were ¥144,542 million (compared with ¥143,919
million for the same period of the previous year), operating profit was ¥1,167 million (compared with ¥849
million for the same period of the previous year), ordinary profit was ¥1,470 million (compared with ¥1,198
million for the same period of the previous), and profit attributable to owners of parent was ¥917 million(compared with ¥640 million for the same period of the previous).
Performance results by business segment are as follows.
1) Pharmaceutical Wholesale BusinessIn the three months ended June 30, 2023, the pharmaceutical wholesale business posted a slight increase2

in sales despite the negative impact of NHI drug price revision and the suspension of handling of certain
manufacturers, with growth in products eligible for the price maintenance premium such as anticancer drugs
and COVID-19 treatments more than offsetting the decline in sales of COVID-19-related products such as test
kits. Meanwhile, profit grew, mainly due to the effect of this sales growth.
As a result of the foregoing, net sales were ¥135,922 million (compared with ¥135,588 million for thesame period of the previous year), and segment profit (operating profit) was ¥1,054 million (compared with
¥783 million for the same period of the previous year).
2) Pharmacy Business
The pharmacy business posted net sales of ¥4,654 million (compared with ¥4,481 million for the same
period of the previous year), reflecting efforts to expand income from dispensing technical fees and income
from pharmaceutical management fees as well as an increase in the number of prescriptions received as a resultof increased movement of people with the downgrading of COVID-19 to a Class 5 infectious disease under the
Infectious Diseases Act. Segment profit (operating profit) was ¥87 million (compared with ¥14 million for thesame period of the previous year) due to the effect of this sales growth as well as a significant decrease inamortization of goodwill.
3) Veterinary Drug Wholesale Business
The veterinary drug wholesale business recorded net sales of ¥2,783 million (compared with ¥2,660
million for the same period of the previous year), driven by sales growth in companion animal operations.
However, segment profit (operating profit) was ¥99 million (compared with ¥121 million for the same periodof the previous year), reflecting the impact of higher purchase prices.
4) Other Businesses
Other businesses reported net sales of ¥1,182 million (compared with ¥1,189 million for the same periodof the previous year) and a segment loss (operating loss) of ¥90 million (compared with a segment loss of ¥69
million in the same period of the previous year), reflecting lackluster performances mainly in the sports facility
management business.

3

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
As of March 31, 2023

As of June 30, 2023

AssetsCurrent assets

Cash and deposits
Notes and accounts receivable - trade
Inventories
Accounts receivable - other
Other
Allowance for doubtful accounts
Total current assets

19,029118,585
30,846
16,466
3,616(41)
188,502

21,371
123,726
29,06914,027
4,464(39)
192,619

20,37024,917
3,736
49,02420,072
24,9184,027
49,018

818
2,558
3,377

784
2,523
3,307

44,642
12,771(1,002)56,411
108,813297,316

48,91812,855(1,006)
60,767113,093
305,713

Non-current assets
Property, plant and equipment

Buildings and structures, net
Land
Other, net
Total property, plant and equipment
Intangible assets

Goodwill
Other
Total intangible assets
Investments and other assets

Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

4

(Million yen)
As of March 31, 2023

As of June 30, 2023

Liabilities
Current liabilities

Notes and accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Other provisions
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity

164,571
990
970
2,095
1,569
8,462
178,659

169,673
990
970
615
2,417
9,464
184,129

6,790
251
855
10,594
18,491
197,150

6,547
252
774
11,81019,384
203,5135,000
12,81067,864(7,575)78,0995,000
5,272
67,380(599)
77,054

19,972

23,119913

822

20,88623,942

1,179
100,165
297,316

1,203
102,199
305,713

Accumulated other comprehensive income

Valuation difference on available-for-salesecurities
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets5(2) Quarterly Consolidated Statements of Income and Comprehensive Income Quarterly Consolidated
Statements of Income
Quarterly Consolidated Statements of Income
Three Months Ended June 30, 2022 and 2023
(Million yen)
For the three months ended
June 30, 2022

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using
equity method
Other
Total non-operating income

For the three months ended
June 30, 2023

143,919
132,786
11,132
10,282
849

144,542
133,079
11,462
10,295
1,167

15
185

13
167

24

18

173
398

147
347

26
20
3
49
1,198

22
19
2
43
1,470

3
3

3
3

55
62
2
119
1,081
406
675
35
640

42
－
0
42
1,431
486
945
27
917

Non-operating expenses

Interest expenses
Rental expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income

Gain on sale of non-current assets
Total extraordinary income
Extraordinary losses

Loss on valuation of investment securities
Soil treatment cost
Other
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

6

Quarterly Consolidated Statements of Comprehensive Income
Three Months Ended June 30, 2022 and 2023
(Million yen)
For the three months ended
June 30, 2022

For the three months ended
June 30, 2023

675

945

2,234

2,726

(89)

(91)

247

419

2,392
3,068

3,055
4,000

3,032

3,973

35

27

ProfitOther comprehensive income

Valuation difference on available-for-salesecurities
Remeasurements of defined benefit plans, net oftax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests7(3) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumption)
For the three months ended June 30, 2023 (from April 1, 2023 to June 30 2023)
Not applicable.
(Notes in the case of significant changes in amount of shareholders’ equity)
For the three months ended June 30, 2023 (from April 1, 2023 to June 30 2023)
Not applicable.
(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements)
Calculation of tax expenses
Tax expenses are calculated by the method in which the effective tax rate on profit before income taxes forthe current consolidated fiscal year after application of tax effect accounting is reasonably estimated, and profit
before income taxes was multiplied by the estimated effective tax rate.
(Change in method of presentation)
The Group previously recognized income from the provision of sales information to manufacturers as
administrative service fee income under non-operating income but changed the method of presentation and thisincome is included in net sales from the first quarter of the consolidated fiscal year under review.
Based on its medium-term vision “business model innovation looking at next-generation capabilities” andunder a basic policy of “evolution of distribution and marketing model in step with progress of DX in healthcare,” the Group positions information provision as an important operating activity given the increasing
importance of information provision services and the purpose of this change in presentation method is toproperly present the results of the Group's operating activities.
The quarterly consolidated financial statements for the first three months of the previous consolidated
fiscal year and the consolidated financial statements for the previous consolidated fiscal year have been restatedto reflect this change in presentation method.
As a result, administrative service fee income of ¥397 million, which had been presented under under nonoperating income, has been restated as net sales, resulting in net sales of ¥143,919 million and operating profitof ¥849 million. Ordinary profit and profit before income taxes are not affected by this change.
In addition, accounts receivable-other of ¥199 million, which had been presented in current assets, hasbeen restated as notes and accounts receivable-trade, resulting in notes and accounts receivable-trade of¥118,585 million.
(Segment information)
1. Overview of reportable segments
The Group’s reportable segments are components of the Group about which separate financial information
is available. These segments are subject to periodic examinations to enable the company’s Board of Directors
to decide how to allocate resources and assess performance.
The Group’s segment is categorized based on the business of its operating company, and thus its main
segments, the “Pharmaceutical Wholesale Business,” the “Pharmacy Business,” and the “Veterinary Drug
Wholesale Business” comprise the Group’s reportable segments.
The “Pharmaceutical Wholesale Business” is engaged in sales of drugs, diagnostic products, medical
devices, materials, etc. to medical institutions, such as hospitals, clinics, and pharmacies. The “Pharmacy
Business” is engaged in sales of drugs, medical devices and equipment, and hygiene materials, etc. to general
consumers. The “Veterinary Drug Wholesale Business” is engaged in sales of veterinary drugs, feeds, etc. tofarms, ranches, veterinary hospitals, clinics, etc.

8

2. Method of measurement for the amounts of net sales, income (loss), assets and other items for each reportablesegment
The method of accounting for the reportable business segments is generally the same as those stated in“Basis for the Presentation of the Consolidated Financial Statements.”
Profit in the reportable segments is based on operating profit.
Inter-segment revenues and transfers are calculated at prevailing market prices.
3. Information on net sales, income (loss), assets and other items by reportable segment
For the fiscal year ended March 31, 2023 (from April 1, 2022 to June 30, 2022)
Reportable segment

Net sales
Net sales to outside
customers
Inter-segment net
sales or transfers
Total
Segment income (loss)

PharmaVeterinary
ceutical Pharmacy
Drug
Wholesale Business Wholesale
Business
Business

Total

135,588

4,481

2,660

142,729

2,777

0

0

2,777

138,365
783

4,481
14

2,660
121

145,507919

Others(Note 1)

Total

1,189 143,919(Million yen)Amountrecorded in
Adjustment Consolidated(Note 2)
Statementsof Income(Note 3)-

143,919

3,404(3,404)-

1,815 147,323
(69)
850

(3,404)(0)

143,919849

626(Notes) 1. “Others” is the segment which is not included in reportable segments, including such businesses as wholesale ofagricultural chemicals, nursing care service business, transportation business, sports facility management business, andconsulting services for medical institutions.
2. Adjustment of segment income (loss) of ¥(0) million refers to elimination of inter-segment transactions.
3. Adjustments are made to reconcile segment income (loss) to operating profit reported on the consolidated statements ofincome.

For the fiscal year ending March 31, 2024 (from April 1, 2023 to June 30, 2023)
Reportable segment

Net sales
Net sales to outside
customers
Inter-segment net
sales or transfers
Total
Segment income (loss)

PharmaVeterinary
ceutical Pharmacy
Drug
Wholesale Business Wholesale
Business
Business

Total

135,922

4,654

2,783

143,360

2,769

3

0

2,772

138,691
1,054

4,657
87

2,783
99

146,132
1,242

Others(Note 1)

Total

1,182 144,542(Million yen)Amountrecorded in
Adjustment Consolidated(Note 2)
Statementsof Income(Note 3)-

144,5423,421(3,421)-

1,830 147,963
(90)
1,151

(3,421)
15

144,5421,167

648(Notes) 1. “Others” is the segment which is not included in reportable segments, including such businesses as wholesale ofagricultural chemicals, nursing care service business, transportation business, sports facility management business, andconsulting services for medical institutions.
2. Adjustment of segment income (loss) of ¥15 million refers to elimination of inter-segment transactions.
3. Adjustments are made to reconcile segment income (loss) to operating profit reported on the consolidated statements ofincome.

9