Towards realization of healthy and prosperous society

Financial Results for the First Nine Months of theFiscal Year Ending March 31, 2023 (the 14th term)
February 2023

I am Taisuke Murai, President & CEO of VITAL KSK HOLDINGS, INC.
I would like to present to you a summary of the financial results for the firstnine months of the fiscal year ending March 31, 2023.

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1Financial Highlights for the First Nine Months ofthe Fiscal Year Ending March 31, 2023

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First of all, I will provide an explanation with respect to financial highlights forthe first nine months of the fiscal year ending March 31, 2023.

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▍ Summary of Income for the First Nine Months of the Fiscal Year Ending March 31, 2023
(Million yen, %)Year ending March 31, 2023
FY2022 3Q Results

Previous year's results

AmountRatio to netsales‒

AmountNet sales

439,329

443,190

Operating profit

2,086

0.47

1,866

Ordinary profit

4,220

0.96

Profit attributable toowners of parent

2,448

0.56

Ratio to netsales‒

Achievement
rate*

YoY

100.9

78.1

0.42

89.5

96.2

4,302

0.97

101.9

87.8

2,433

0.55

99.4

55.3

* Achievement rate is rate of achievement of forecast announced on November 8, 2022
3Net sales for the period under review were ¥443,190 million, 100.9% of thelevel a year earlier and 78.1% of the full-year forecast, mainly due toincreased sales of COVID-19-related products.
Operating profit amounted to ¥1,866 million, 89.5% of the level a year earlier
and 96.2% of the full-year forecast. Operating profit was below the level ayear earlier mainly due to the recording of an allowance for doubtful accounts
in the second quarter because receivables held by the Group may become
impossible to collect.
Ordinary profit stood at ¥4,302 million, 101.9% of the level a year earlier and87.8% of the full-year forecast, due to the recording of gain on investments ininvestment partnerships in the second quarter.
As a result, profit attributable to owners of parent was ¥2,433 million, 99.4%of the level a year earlier and 55.3% of the full-year forecast.

3▍ Profit by segment
Prescription drugs

99.5%

Reagents and medical devices

120.7%OTC drugs

108.7%

Pharmaceutical Wholesale Business*1
Results

Ratio to netsales

Net sales

418,262

Gross profit

Pharmacy Business*2
YoY(Million yen, %)Veterinary Drug Wholesale
Business*3
Results

YoY

Other Businesses*4

YoYResults

Results

YoY‒

100.8

13,769

99.8

8,157

103.9

3,000

107.5

28,080

6.71

106.2

3,571

97.8

1,264

102.6

2,825

99.6

Selling, general andadministrative
expense26,457

6.33

106.9

3,494

100.1

988

108.2

3,061

103.6

Operating profit

1,623

0.39

96.1

77

47.5

276

86.8-236‒*1: VITAL KSK HOLDINGS, INC. VITAL-NET, INC., KSK Co., Ltd.
*2: OHNO CO. LTD., Goodneighbor Inc., Kenkodo Pharmacy Co., Ltd.
*3: AGRO-JAPAN, Inc.
*4: Agricultural chemicals wholesale business, nursing care business etc.
*5: The sum total of the SG&A expenses and operating income of each segment may not match the total amounts shown in the previous section as intersegment adjustments of SG&A expenses are omitted.

4I would now like to explain income by segment.
Starting with the Pharmaceutical Wholesale Business, the growth rate of reagentsand medical devices was 120.7% due to solid sales of mainly COVID-19-related
medical devices and clinical laboratory reagents, and net sales in this segment cameto ¥418,262 million, which is 100.8% of the level a year earlier. Gross profit
amounted to ¥28,080 million, which is 106.2% of the level a year earlier. SG&A
expenses came to ¥26,457 million, which is 106.9% of the level a year earlier, due tothe recording of an allowance for doubtful accounts because receivables held by theGroup may become impossible to collect. As a result, operating profit amounted to
1,623 million yen, 96.1% of the level a year earlier.
Next, I will discuss the Pharmacy Business. Aiming to realize the family pharmacies
sought by the Japanese government, we endeavored to determine relevant
dispensing fees but were negatively impacted by the NHI drug price revisions, andnet sales in the segment amounted to ¥13,769 million, which is 99.8% of the level ayear earlier, and gross profit was ¥3,571 million, which is 97.8% of the level a year
earlier. SG&A expenses were ¥3,494 million, which is 100.1% of the level a year
earlier. As a result, operating profit totaled ¥77 million.

4Next, I will explain the results of the Veterinary Drug Wholesale Business.
Net sales amounted to ¥8,157 million, which is 103.9% of the level a year
earlier, due to increased sales of high profit products. The segment also
posted gross profit of ¥1,264 million yen, which is 102.6% of the level a yearearlier. SG&A expenses were ¥988 million, which is 108.2% of the level ayear earlier. As a result, operating profit amounted to ¥276 million, which is86.8% of the level a year earlier.
Turning finally to the Other Businesses segment, sales in the agriculturalchemicals wholesale business were strong; however, other operations suchas the nursing care business and the sports facility management businesswere lackluster due to the COVID-19 pandemic and, as a result, thesegment recorded an operating loss of ¥236 million.

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Full-year Earnings Forecasts for theFiscal Year Ending March 31, 2023

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I will now move on the earnings forecasts for the fiscal year ending March 31,2023.

5▍ Full-year Earnings Forecasts for the Fiscal Year Ending March 31, 2023
(Million yen, %)Year ending March 31, 2023Full-year Earnings Forecasts

Previous year's results

AmountRatio to net sales‒Amount

Ratio to net sales

567,300‒

YoYNet sales

577,249

98.3

Operating profit

2,945

0.51

1,940

0.34

65.9

Ordinary profit

5,834

1.01

4,900

0.86

84.0

Profit attributable toowners of parent

4,770

0.83

4,400

0.78

92.2

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Our full-year earnings forecasts for the fiscal year ending March 31, 2023 arecurrently unchanged from those announced on November 8, 2022.

63(Reshown) From materials released on October 28, 2022

Strengthening of shareholder returns

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Finally, I would like to once again explain the "strengthening of shareholder
returns" as announced on October 28, 2022.

7▍ We have adopted dividend on equity (DOE) as an index andour future dividend policy is to maintain a DOE of 2% or more.
Change in forecast dividend per share for the current fiscal year (ending March 31, 2023)
Before revision
Dividend pershare

After revision

An annual dividend of 24 yen(an interim dividend of 12 yen and a year-enddividend of 12 yen)

→An annual dividend of 39 yen*(an interim dividend of 12 yen and a year-end
dividend of 27 yen)

▍ A total return ratio of 50% or moreYear ended
March 31, 2020
Results

Year ended
March 31, 2021
Results

Year ended
March 31, 2022
Results

Year ending
March 31, 2023
Forecast

Policy from the year
ending March 31,2024

Cash dividends
per share

24.0 yen

12.0 yen(includes special dividend of
2.0 yen)39.0 yen

Maintain a DOE of
2% or more

Purchases oftreasury stock

1,400,000 shares(1,498 million yen)‒

2,000,000 shares(1,559 million yen)

1,450,000 shares(998 million yen)

TBD

Total return ratio

61.0%

56.4%

62.0%

68.7%

50.0% or more

26.0 yen

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The Company is strengthening efforts towards corporate value enhancement
and will also endeavor to strengthen shareholder returns policy as part of
this.
Starting with the dividend policy, the Company has decided to adopt dividendon equity (DOE) as an index for dividends starting in the fiscal year underreview, replacing the previous target of a dividend payout ratio of 25% or
more, because DOE is relatively immune to changes in single-year businessresults. The Company also set a target of maintaining a DOE of 2% or more.
Based on this policy, we changed our initial dividend forecasts of an interim
dividend of 12 yen and year-end dividend of 24 yen, making an annual
dividend of 24 yen, to an interim dividend of 12 yen and a year-end dividendof 27 yen, making an annual dividend of 39 yen.

Next, I will explain our shareholder return policy.
As the shareholders' equity ratio is not at a particularly high level, currently ataround 30%, the Company will need to continuously maintain its financial

8soundness. However, the Company has set the total shareholder returntarget at 50% or more based on the maximum consideration for shareholders
and will make returns to shareholders accordingly.

8▍ Shareholder Returns Policy for Year Ending March 31, 2023◼

Changes in net profit

Profit attributable to owners ofparent◼

Year ended March 31, 2021

Year ended March 31, 2022

Year ending March 31, 2023
(forecast)

1,171 million yen

4,770 million yen

4,400 million yenYear ended March 31, 2021

Year ended March 31, 2022

Year ending March 31, 2023
(forecast)

21.3 yen

87.9 yen

84.4 yen

Year ended March 31, 2021

Year ended March 31, 2022

Year ending March 31, 2023
(forecast)

Changes in basic earnings per share

Basic earnings per share◼

Changes in shareholder return policy

12 yen26 yen39 yenInterim dividend of 12 yen + year-end
dividend of 0 yen

Interim dividend of 12 yen + year-end
dividend of 14 yen(includes special dividend of 2 yen)Interim dividend of 12 yen +year-end dividend of 27 yen

Payout ratio

56.4%

29.6%

46.0%

Purchase of treasury shares‒

2,000,000 shares(1,559 million yen)

1,450,000 shares(998 million yen)

Total payout ratio

56.4%

62.0%

68.7%

Dividend per share

9This shows a summary of our shareholder returns policy for the year ending
March 31, 2023 based on the foregoing.

As explained earlier, we changed our dividend policy to "Maintain a DOE of
2% or more" starting from the current fiscal year. Accordingly, we decided topay a year-end dividend of 27 yen, bringing the annual dividend to 39 yen.
As a result, the consolidated payout ratio will be 46.0%. As the Company
acquired 1,450,000 shares of treasury stock in June 2022, total shareholder
return that incorporates the annual dividend will be 68.7%.

9▍ Note on Forward Looking Statements

The Company's current plans, strategies, earnings forecasts and other forward-looking statements inthese materials are based on information currently available to the Company, and include potential
risks and uncertainties.
Please be aware that there is a possibility that actual business activities and performance will differ
greatly from these outlooks due to changes in the economic situation, market conditions and various
other factors.
For this reason, please do not rely entirely on these forward-looking statements alone when
considering aspects of the Company such as its performance and corporate value.
Furthermore, none of the information contained in these materials is intended to induce you to buy orsell the Company's stock or recommend investment in the Company's stock.
Final decisions on investment should be made at your own discretion.

10Please refer to the note on forward-looking statements shown here.

10▍ Contact for Inquiries

Corporate Communications Department
TEL:

03-5787-8550

Mail:

ir@vitalksk.co.jp

Contacts:

Sato, Nanjo

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Finally, I would like to ask you to direct any inquiries your might have about
today's presentation to our Corporate communications Department.

This brings me to the end of my financial results presentation.

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