This material is supplemental material for the financial results for thefirst three months (April-June) of the fiscal year ending March 31, 2024
(the 15th term) of Vital KSK Holdings, Inc.
Please read this material together with the Consolidated Financial
Statements for the First Quarter of the Fiscal Year Ending March 31,
2024 released on August 2, 2023.

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First of all, I will provide an explanation with respect to financial
highlights for the first three months of the fiscal year ending March 31,2024.

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Net sales for the first three months under review rose slightly, up from¥143,919 million a year earlier, to ¥144,542 million, mainly due to growthin sales of products eligible for the price maintenance premium such as
COVID-19 treatments, which offset NHI drug price revision and thesuspension of handling of certain manufacturers. Operating profit
increased from ¥849 million a year earlier to ¥1,167 million chiefly due
to the effect of these increased sales and a significant decrease inamortization of goodwill. Ordinary profit climbed from ¥1,198 million ayear earlier to ¥1,470 million due to the increase in operating profit, andprofit attributable to owners of parent also grew from ¥640 million a year
earlier to ¥917 million for the same reason.
The Group previously recognized income from the provision of sales
information to manufacturers as administrative service fee income under
non-operating income but changed to the method of including thisincome in net sales from the fiscal year under review. As a result of thischange, year-on-year comparisons are omitted.

3I would now like to explain profit by segment.
Let me start with our core Pharmaceutical Wholesale Business. Net salesrose from ¥135,588 million a year earlier to ¥135,922 million. The
Pharmaceutical Wholesale Business posted a slight increase in sales
despite the negative impact of the April 2023 NHI drug price revision andthe suspension of handling of certain manufacturers, with growth in salesof prescription pharmaceuticals (sales growth rate of 100.9%) driven by
growth in sales of 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 (sales
growth rate of reagents and medical devices was 95.2% of the level a year
earlier while sales growth rate of OTC pharmaceuticals was 96.6% of thelevel a year earlier), which had pushed up sales the previous year. Grossprofit rose from ¥9,245 million a year earlier, to ¥9,572 million, mainly due
to the effect of these increased sales, and SG&A expenses grew from
¥8,461 million a year earlier, to ¥8,517 million owing to an increase inintegrated system-related investment and electricity charges. As a result,operating profit increased from ¥783 million a year earlier, to ¥1,054
million.
Moving on to the Pharmacy Business, net sales rose from ¥4,481 million ayear earlier, to ¥4,654 million. The sales growth reflects efforts to expand
income from dispensing technical fees and income from pharmaceuticalmanagement fees as well as an increase in the number of prescriptions
received largely as a result of increased movement of people. Gross profit
climbed from ¥1,165 million a year earlier, to ¥1,184 million due to theeffect of increased sales, which offset the negative impact of NHI drug4

price revision. SG&A expenses fell from ¥1,150 million a year earlier, to¥1,096 million, reflecting significant decrease in the amortization of
goodwill from the fiscal year under review as a result of the recognitionof an impairment loss for goodwill at the end of the previous fiscal year.
As a result, operating profit rose from ¥14 million a year earlier, to ¥87million.
In the Veterinary Drug Wholesale Business, net sales climbed from
¥2,660 million a year earlier, to ¥2,783 million, reflecting growth incompanion animal operations. However, gross profit decreased from¥443 million a year earlier, to ¥428 million under the impact of higher
purchase prices and although SG&A expenses were mostly unchanged
year on year, operating profit fell from ¥121 million a year earlier, to ¥99
million.
Finally, Other Businesses saw lackluster performances mainly in thesports facility management business and reported net sales of ¥1,182
million, compared with ¥1,189 million a year earlier, gross profit of ¥961
million, compared with ¥933 million a year earlier, and SG&A expensesof ¥1,052 million, compared with ¥1,002 million a year earlier. As aresult, the segment reported an operating loss of ¥90 million, comparedwith a segment loss of ¥69 million a year earlier.

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Next, I will explain our sustainability initiatives.

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We have set GHG emissions as an indicator and evaluate and manage theimpact of our activities on climate change, aiming to realize sustainablemanagement. We recently calculated our Scope 1 and Scope 2 emissions
for the period from April 2021 to March 2022.
Meanwhile, to conform to the long-term goal set out in the ParisAgreement of holding the increase in the global average temperature tobelow 2°C above pre-industrial levels and pursuing efforts to limit thetemperature increase to 1.5°C above pre-industrial levels, as well as theJapanese Government’s goal of reducing greenhouse gas emissions to
net-zero, that is, to realize carbon neutrality by 2050, we have set thetarget of achieving a 30% reduction in the Group’s total GHG emissions
compared to the FY2021 level by FY2030.
To achieve this target, we are implementing a range of initiatives
including switching to LED lighting, going paperless by digitizing
documents, installing solar panels and introducing HVs and EVs.

6We believe that creating an environment in which human resources withdiverse values feel comfortable is an important management issue. Our
indicators of policies for developing human resources and enhancing theinternal environment and our targets and results based on these
indicators are as follows.
Firstly, the percentage of female employees in management positions
was 14.0% in the most recent fiscal year but we aim to increase this to20.0% by the end of March 2030. Meanwhile, the percentage of male
employees taking childcare leave was 28.6% in the most recent fiscal
year and we are aiming for 80.0% by the end of March 2030. In addition,
we are endeavoring to close the wage gap between male and female
employees by continuing to appoint female employees to senior positions
and raising their salaries through support for individual employees todevelop their skills and proper implementation of the performance
evaluation system.

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We are also promoting the diversity of the Board of Directors.
As of the end of June 2022, our Board of Directors consisted of a totalof 10 Directors, two of whom were Outside Directors and all of whomwere male. However, as of the end of June 2023, our Board of Directors
consisted of a total of 14 Directors, five of whom were Outside Directors
and we also have two female Directors.
Furthermore, our Board of Directors is also now much younger, with theaverage age of Directors down from 66.7 years of age to 58.5.
Going forward, we will continue striving to further strengthen ourcorporate governance and working to enhance our corporate value by
increasing the diversity of our Board of Directors in terms of experience,
age and gender.

8Finally, I would like to highlight some other topics.

9We recognize that increasing shareholder returns is an importantmanagement issue and are focusing on doing this.
On June 30, 2023, we cancelled around 9.32 million treasury shares,
which is the equivalent of 15.23% of the total number of outstanding
shares, all in one go. We are additionally purchasing another one million
treasury shares before the end of the purchase period on September 30,2023.

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

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I would like to ask you to direct any inquiries your might have about thismaterial to our Corporate communications Department.

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