This material is supplemental material for the financial results for thefirst nine months (April-December) 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 Nine Months of the Fiscal Year Ending March 31,
2024 released on February 7, 2024.

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

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During the first nine months of the fiscal year under review, net salesrose ¥4,500 million from the year-ago level to ¥448,900 million,
attributable to favorable sales of anti-cancer drug, anti-coronavirus
gents, and flu treatment in the mainstay pharmaceutical wholesaling
business, in addition to growth of the overall market for prescription
pharmaceuticals.
Operating profit increased ¥2,600 million, to ¥5,600 million, chiefly due
to the increase in net sales, price negotiations in consideration oftransaction costs with each customer, and the absence of an allowancefor doubtful accounts for certain major customers posted in the same
period of the previous fiscal year.
Ordinary profit climbed ¥2,200 million, to ¥6,500 million, reflecting therise in operating profit.
Finally, profit attributable to owners of parent rose ¥2,600 million, to¥5,000 million, due to the increase in ordinary profit and the disposal ofcross-shareholdings recorded in extraordinary income.

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I would now like to explain profit by segment.
First, net sales in the pharmaceutical wholesale business increased¥3,700 million year on year, to ¥423,200 million, attributable to higherthan-expected growth in sales of anticancer drugs, COVID-19treatments, flu treatments, etc. as I described earlier, which more thanoffset the negative impact of a decrease in revenue that mainly reflecteddrug price revisions in April 2023, the suspension of the handling ofcertain drugs by certain manufacturers and decreased sales of COVIDrelated test agents, equipment, etc. Operating profit rose ¥2,400 million
from the same period of the previous fiscal year, to ¥5,200 million, due
to the increase in net sales, diligent negotiations on prices inconsideration of transaction costs with each customer, and the absenceof an allowance for doubtful accounts for certain major customers
posted in the same period of the previous fiscal year.
Next, the pharmacy business posted net sales of ¥14,200 million, anincrease of ¥500 million from the same period of the previous year, due
to one extra store as a result of business acquisition in August 2023, as
well as efforts to expand income from dispensing technical fees andincome from pharmaceutical management fees and an increase in thenumber of prescriptions received as a result of increased movement ofpeople with the downgrading of COVID-19 to a Class 5 infectious disease4

under the Infectious Diseases Act. Operating profit increased ¥180
million from the year-earlier level, to ¥250 million, chiefly due to asignificant decrease in the amortization of goodwill.
Next, the veterinary drug wholesale business recorded ¥8,400 million,
an increase of ¥300 million, driven by sales growth in companion animaloperations. Operating profit stood at ¥280 million, which is roughly thesame as the year-earlier level. A decrease in gross profit due to higherpurchase prices was offset by a reduction in SG&A expenses (due to areduction in the allowance for doubtful accounts from the same period
from the previous fiscal year).
And finally, we have the other businesses segment. Net sales declined¥80 million year on year to ¥2,900 million due to the lack of temporary
demand in the agricultural chemicals and materials wholesale business inthe year-ago period. The operating loss was reduced by ¥70 million fromthe same period of the previous year to ¥160 million, reflecting
increased revenue in the sports facility management and nursing carebusinesses mainly due to greater movement of people.

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Now let me explain a revision to our full-year earnings forecasts for thefiscal year ending March 31, 2024.

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The Group’s mainstay Pharmaceutical Wholesale Business showed steadyprogress, attributable to higher-than-expected growth in the sales of
COVID-19 treatments, flu treatments, etc. which more than offset
negative impact of a decrease in revenue that mainly reflected drug pricerevisions in April 2023, the suspension of handling by certain
manufacturers and decreased sales of COVID-related test agents,equipment, etc.
In addition to the effect of these increased sales, as the Company
negotiated prices with each of its customers with an awareness oftransaction costs, all the forecasts for net sales, operating profit,ordinary profit and profit attributable to owners of parent are expected
to surpass the previously announced levels. In light of this situation, theCompany decided to review the full-year consolidated earnings forecasts
for the fiscal year ending March 31, 2024 announced on May 12, 2023.
The Company announced the revised forecasts, which are shown on thisslide, on February 7, 2024.

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Now let me move on to measures to implement management based on anawareness of cost of capital and stock price.

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At a meeting of the Board of Directors held on December 25, 2023, weanalyzed and assessed the current status of measures for theimplementation of management based on an awareness of the cost ofcapital and the stock price, and passed a resolution on policies forimprovement, targets and other matters. We have posted the details on
our website.
Please visit our website using the links on the slide.

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Next, let me explain shareholder returns.

9Looking at shareholders returns, we changed our dividend policy to DOE
of 2% or more last fiscal year and accordingly our full-year dividend
forecast for the fiscal year under review is ¥39 comprising an interim
dividend of ¥19 and a year-end dividend of ¥20.
We forecast a total payout ratio of 65.4% for this fiscal year. This
calculation takes into account the acquisition of treasury shares
implemented this fiscal year and the revised profit attributable to ownersof parent forecast announced on February 7, 2024.
We recognize that the return of profit to shareholders is a key
management issue and are committed to strengthening shareholder
returns.

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Lastly, let me describe the situation of the Noto Peninsula after theearthquake hit the area on January 1, 2024, and the actions the Group
took in response.

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On January 1 at 16:10, a magnitude 7.6 earthquake hit the Noto
Peninsula in Ishikawa prefecture. Finese Co., Ltd., an equity-method
affiliate of the Company, has a number of business sites in Ishikawa
prefecture.
Immediately after the earthquake, the executives of Finese began tocontact the company’s business sites. By the next day, January 2, all of
the logistics facilities were restored except for the Nanao branch, which
is close to the epicenter.
From January 3, emergency supplies and disaster response vehicles fromGroup companies gradually arrived at affected areas. Many of Finese’semployees have been affected by the earthquake. However, the company
has gradually resumed operations and is now delivering pharmaceuticalproducts to many different locations to support regional healthcare witha strong sense of mission.
The Group is carefully assessing the losses caused by the 2024 Noto
Peninsula Earthquake. At present, we estimate that the impact on theconsolidated results will be minor and insignificant.

12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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