Hello, everyone. Thank you for the introduction.
I am Taisuke Murai, President & CEO of VITAL KSK HOLDINGS, INC.
Thank you for taking the time out of your busy schedules to attend our financial results briefing forthe fiscal year ended March 31, 2024.

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Here is what we will discuss today.
I will begin with an explanation with respect to financial highlights for the fiscal year ended March
31, 2024.
I will then give details of efforts towards corporate value enhancement and finally, I will explain our
full-year earnings forecasts for FY2024.
After that, I would like to answer your questions for as long as time permits.
Thank you very much.

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

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Net sales for the period under review were ¥587,481 million, up ¥6,154 million from the previous
period. Revenue increased, attributable to favorable sales of anti-cancer drug and anti-coronavirus
agents, in addition to growth of the overall market for prescription pharmaceuticals, althoughtransactions with certain foreign pharmaceutical companies were discontinued.
Operating profit increased ¥1,532 million year on year, to ¥5,556 million. This increase reflects theabsence of allowance for doubtful accounts for certain major customers which was posted in theprevious fiscal year, in addition to the effect of the increased revenue described above.
Ordinary profit increased ¥597 million year on year, to ¥6,557 million, mainly due to an increase inoperating profit.
Profit attributable to owners of parent rose ¥1,012 million year on year, to ¥5,843 million. This
increase is mainly attributable to the aforementioned reasons as well as a gain on sales of crossshareholdings.
As a result, ROE for the fiscal year under review came to 5.7%, an improvement of 0.8 percentage
points from 4.9% the previous fiscal year.

4I would now like to explain profit by segment.
Firstly, the pharmaceutical wholesale business posted an increase in sales, with growth inproducts eligible for the price maintenance premium such as anticancer drugs and COVID-19
treatments more than offsetting the decline in sales due to the negative impact of NHI drug pricerevision and the suspension of handling of certain manufacturers. In addition, the Company
negotiated prices while paying attention to transaction costs with each of its customers, recorded
revenue from the delivery of new corona vaccines commissioned by the national and local
governments, and recorded a gain on reversal of a portion of the allowance for doubtful accounts
for major customers recorded the previous year, resulting in significantly higher profits than in theprevious year. As a result, net sales climbed ¥5,267 million, to ¥552,870 million, and operating
profit grew ¥1,316 million, to ¥4,913 million.
Next, the pharmacy business posted net sales of ¥19,115 million, an increase of ¥754 million fromthe previous year, reflecting an increase of one store due to business acquisition plus 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 result of increased
movement of people with the downgrading of COVID-19 to a Class 5 infectious disease. Operating
profit grew ¥204 million, to ¥310 million, due to the effect of higher sales as well as a significant
decrease in amortization of goodwill.
Next, the veterinary drug wholesale business recorded net sales of ¥11,027 million, an increase of¥138 million from the previous year, driven by sales growth in companion animal operations.
However, gross profit dropped ¥61 million year on year, to ¥1,610 million under the impact of5higher purchase prices, while SG&A expenses fell ¥63 million year on year, to ¥1,259 million due toa decrease in the allowance for doubtful accounts. As a result, the segment posted operating profitof ¥350 million, mostly unchanged year on year.
And finally, we have the other businesses segment. Net sales sank ¥5 million, to ¥4,468 million,
reflecting lackluster performances mainly in the sports facility management business. Gross profit
rose by ¥170 million year on year, to ¥4,092 million due mainly to the improvement in the
profitability of the nursing supplies rental business. SG&A expenses climbed ¥74 million year on
year, to ¥4,201 million, due to rising electricity charges and gas prices, despite cost-cutting efforts.
As a result, the segment posted an operating loss of ¥109 million, representing a year-on-year
improvement of approx. ¥100 million.

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Next, I will explain the main reasons for the increase or decrease in net sales compared to theprevious year.
Firstly, we have been focusing for some time on sales of products eligible for the pricemaintenance premium, which allows products to maintain higher prices for longer. These efforts
have paid off, and our sales in this category increased by ¥17,900 million. Sales of original drugs
also increased by ¥12,300 million. However, sales of long-term listed drugs fell by ¥21,700 million,
largely due to the impact of NHI drug revisions.
In addition, the suspension of transactions with one foreign pharmaceutical manufacturer had theeffect of reducing sales by ¥13,300 million.
An increase of ¥9,500 million as a result of growth in sales of COVID-19 treatments and increased
sales in the Pharmacy Business and the Veterinary Drug Wholesale Business also contributed,
and ultimately net sales amounted to ¥587,400 million, up ¥6,100 million year on year.

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Next, I would like to explain the balance sheet.
As of March 31, 2024, total assets were ¥317,258 million, an increase of ¥19,942 million from theend of the previous fiscal year. This is attributable to an increase of ¥14,801 million in current
assets due to a rise of ¥15,683 million in cash and deposits reflecting unsettled notes andaccounts payable-trade as a result of the end of March being a bank holiday. Meanwhile, noncurrent assets also climbed ¥5,141 million, mainly reflecting an increase in unrealized gains on
investment securities due to rising stock prices.
Total liabilities came to ¥211,317 million, up ¥14,167 million from the end of the previous fiscal
year. This is attributable to a rise of ¥14,603 million in notes and accounts payable-trade due tothe impact of the March-end bank holiday.
Net assets were ¥105,940 million, an increase of ¥5,775 million from the end of the previous fiscal
year. This is because the decrease due to implementation of the shareholder return policy was
more than offset by the increase resulting from the recording of net profit and unrealized gains on
investment securities.

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I will now explain our efforts toward corporate value enhancement.

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I would like to start by looking back once again at the "Roadmap toward Achieving a PBR of 1.0"
based on materials presented on December 26, 2023.
We have made all kinds of efforts to implement management based on an awareness of cost ofcapital and stock price. As a result, our stock price, which stood at ¥639 on October 3, 2022,
almost doubled to ¥1,231 as of April 30, 2024.
We will continue working to enhance our corporate value going forward, with the implementationof various measures that will lead to improvement of ROE and PER, which are components of
PBR uppermost in our mind.

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To improve our ROE, we must take action on the following three fronts as shown above:
improvement of the net profit to net sales ratio, increase in the asset turnover, and control offinancial leverage.
I will now introduce several of our efforts in more detail.

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The first was improving the net profit to net sales ratio.

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In addition to existing initiatives, we are implementing new initiatives with a wider scope, toachieve further evolution in our core pharmaceutical wholesale business.
Starting with our existing initiatives, in addition to "Negotiation of the right prices with emphasis on
the contribution margin," "Increased sales to hospitals," "Expansion of information business withdrug manufacturers" and "Development of sophisticated supply chain," in April this year, weestablished the Women’s Health Care Solutions Dept., which is focused on supporting women's
health, and further strengthened the sales structure.
Furthermore, we have broadened the scope of activities in downstream domains that are close topatients and local communities, releasing okusuri-aun as a new tool that will help improve thequality of care for patients with intractable diseases and also further increasing collaboration withgovernments. Positive examples are also increasing in the rental business, which is anotherbusiness we are putting effort into.
Meanwhile, we are also making investments in upstream domains that will lead to growth in the
future, such as the construction of a new logistics center to expand 3PL business with drug
manufacturers, and participation in a new business model aimed at eliminating drug loss, which is
an issue in Japanese society.
In the coming slides, each of these initiatives is explained in more detail.

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Let me begin with our emphasis on the contribution margin, which is an area we have long been
focusing on.
I think you can see from the analysis of transactions at both Vital-Net and KSK with the top 30
customers (hospitals and pharmacies) by sales that the contribution margin improved for manycustomers compared with the previous year.
We have ensured we negotiated the right prices based on the value of individual pharmaceuticalproducts and have also carefully and courteously discussed transactions with customers based on
distribution costs. As a result, the frequency of urgent deliveries fell by 16% and customer returns
dropped by 14%. In addition, through a review of our logistics structure we also succeeded in
reducing MS deliveries by 11%.
To maintain a stable drug distribution structure going forward, we will work to ensure reasonableprofits and control costs, while at the same time continuing to invest in information systems andhuman resources, striving for sustainable corporate value enhancement.

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Increased sales to hospitals, which was an important issue under the Fifth Medium-Term
Management Plan, is also steadily paying off but we intend to go even further.
We have continued to focus on strengthening the expertise of MS. And we recently started tocultivate brand-new cancer liaison human resources, aiming to expand our share of new drugs
and priority items in the cancer market, which is expected to grow more and more in the future.
We will build a more sophisticated training structure and, in collaboration with the MRs ofmanufacturers, we will aim to increase our presence in the hospital market.
In addition, MAPs who are experts in medication and medical care are also starting to get on
track, giving rise to a succession of new transactions. As a result, hospital sales amounted
to ¥187,000 million, which is 101.9% of the level a year earlier, and hospitals' share of our sales
also grew from 32% in FY2021 before the launch of the Fifth Medium-Term Management Plan, to33.1% in FY2023.

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Next we have the expansion of information business with drug manufacturers.
In our activities to date, our sales force, which has in-depth access to healthcare settings such as
hospitals, clinics and pharmacies, has been our unique strength as a regional wholesaler.
Our substantial sales structure that enables such finely tuned activities is now once again
attracting attention. Our activities to support patient access to the right medical treatment,
including raising disease awareness, encouraging medical consultation and disseminating
information about ADRs in place of MRs, and feeding the high quality information collected fromclinical settings back to drug manufacturers, are starting to be appreciated by drug
manufacturers. As a result, fees from information activities are also increasing, and there is a real
sense that the information business is moving up a gear.
With limited distribution drugs on the rise recently, we have been focusing on improving not only
logistics quality but also information quality, aiming to be the wholesaler that is the first choice ofdrug manufacturers and customers in all respects.

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The next slide deals with the development of a more sophisticated supply chain.
In addition to the development of a logistics structure that is GDP compliant, we will also further
encourage joint deliveries with other companies to address the 2024 logistics problem.
At a total of five logistics centers: Vital Net's Miyagi and Niigata logistics centers and KSK's
Hyogo, Osaka and Kyoto logistics centers, we aim to further improve logistics quality and plan toobtain ISO9001 in the course of this year. KSK‘s three centers that were previously certified willobtain their certification again.
Furthermore, in response to the increasing frequency of disasters in Japan, we are also putting
effort into developing a crisis management logistics structure, including drone demonstration
experiments and the introduction of additional disaster response vehicles, in order to deliver drugs
at any time and in any situation.
In addition to these initiatives, we have also decided to build a new distribution center in
Kanagawa Prefecture as part of our investment in future growth. I will share details of this matter
later.

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Furthermore, in April this year, KSK established the new Women’s Health Care Solutions Dept.
focused on supporting women's health.
Recently, women's advancement in society and changing work styles have brought womenspecific diseases and health issues to the fore.
The Kinki District, where KSK operates, is home to more than 10 million women. With the aim ofproviding solutions to women-specific health issues, KSK is deploying female MS and has justlaunched a training program to develop them into specialists in the women-specific diseasedomain and femtech products.

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Next, I would like to explain the release of "okusuri-aun", a system developed through joint
research between Vital-Net and Tohoku University Hospital. It integrates an educational programwith a chat function connecting patients with pharmacists and their doctors.
Through the system, pharmacists who understand prescription intentions and have advanced
expertise interpose themselves between patients and their doctors, achieving seamlesscollaboration, with the aim of improving treatment quality.
We have launched the collaboration tool initially for inflammatory bowel disease (IBD) and Crohn's
disease, and plan to gradually expand the diseases covered and the areas in which the app isavailable.

18This is the text issued jointly with Tohoku University on April 23.
More details can be accessed via the QR Code in the top right hand corner.

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We are also strengthening collaboration with government.
I would like to talk about our Collaboration Agreement Concerning Health Promotion with Morioka
City in Iwate Prefecture as one example. Vital-Net is now working with Morioka City to implement
initiatives aimed at improving the health of city residents including cancer measures, lifestyledisease prevention and control of infectious diseases. Already, in June this year, we will hold acervical cancer vaccine awareness raising event.
By implementing such initiatives, we will not only help solve regional health care issues but will
also access new business opportunities, with the creation of opportunities to sell vaccines, forexample.

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This is the flyer for the event to be held in June.
Going forward, we will continue further strengthening collaboration with local governments andmedical associations, to support regional health care.

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Meanwhile, in the rental business also, there has been a number of positive examples, and I
would like to highlight two of these today.
The first is where a combination of team sales using MAPs and rental solutions led to new
business. When our MAPs and drugs MS visited a core hospital, they were told that expensive
equipment had broken down but the hospital could not afford to repair or replace it, causinginconvenience to patients. After this information was fed back internally and discussed as a teamincluding Medical MS and those in charge of rental, it was decided to propose the introduction ofequipment on a rental basis. This proposal was accepted by the hospital, which decided to
introduce the equipment immediately. This is a business opportunity that arose because there wasan alternative solution to selling products i.e. rental, and both the hospital and patients were very
pleased with the outcome.
The second example is the development of new sales channels. Also in our Long-Term Vision
2035, we affirmed that we would also expand the sales channels of the rental business beyond
medical institutions. We have now succeeded in delivering 100 rental AEDs to private companies
with which we have had absolutely no dealings in the past. I believe this is a business opportunitythat arose precisely because we are a Group with close links to local communities.
Moving forward, we will continue rapidly creating new business opportunities by thinking outside
the box.

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Furthermore, as part of our investment for growth, we recently decided to establish a new logistics
center in Kanagawa Prefecture, with the aim of expanding the 3PL business with drugs
manufacturers.
This center will be very favorably located, almost midway between the head offices of Vital-Net
and KSK and around 2 hours from Narita Airport. With the future development of the expressway
network, access to regions all over Japan is expected to improve even further.
The center will also have an ambient warehouse where some drug manufacturing processes suchas packaging, labelling and storage can be carried out and is expected to make a significant
contribution to expanding revenue opportunities in the drug distribution business in the future.

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Next, I will explain the Notice Regarding Participation in New Business Model Aiming to Eliminate
Japan’s Drug Loss released on February 14 this year.
As you know, drug loss whereby drugs used in medical settings in the US and Europe are notauthorized for use in Japan is becoming a major social issue. In fact, 72% of drugs newly
approved in the US and Europe are not approved for use in Japan and this percentage has been
trending upward in recent years.
Looking at the current status of new drug development globally, around 70% of the new drugs
approved in the US and Europe are developed by emerging biopharma or EBP. Many of the drug
products created by overseas EBP which do not have development or sales capabilities in Japanare not introduced to the Japanese market and this is a major cause of Japan's drug loss.
So why are overseas EBP reluctant to enter the Japanese market? Broadly speaking, there arethree causes.
First, overseas EBP, which operate with limited funds, prioritize the development of drugs for salein the US and European markets, where they can expect the most sales and the fastest market
introduction. The second cause is that differences in language and culture mean that the barriers
to entry to the Japanese market are high. The third cause is down to domestic drug
manufacturers. New drug products for rare or intractable diseases or pediatric use which thoughhighly effective and promising will not generate large sales are not very profitable and so are notactively developed.

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We recently decided to participate in a new business model that will eliminate such causes and areworking to eliminate Japan's drug loss problem.

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This is an outline drawing of the business model.
Firstly, MIJ, a venture capital firm specializing in therapeutic areas, is responsible for searching forpromising EBPs in Japan and overseas and providing them with the funds for market entry.
In collaboration with the CareNet Group, seed incubator LinDo will realize a development andsales structure that will be highly efficient compared to existing drug manufacturing businessmodels.
Together with Forest Holdings, Inc., we will be responsible for the supply chain for new drugs
developed in Japan, thereby quickly making drugs available to patients with rare diseases orintractable diseases across Japan at minimum cost.
The effect that our participation in this business model has on our future performance is expected
to be insignificant for the time being. That said, I believe it will give a considerable boost to theGroup's corporate value in the medium and long run.

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Moving on, I would like to explain the disposal of cross-shareholdings that will help increase ourasset turnover.

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We have announced a schedule for reducing the ratio of cross-shareholdings to net assets to lessthan 10% by FY2031.
Although we have pushed ahead with the disposal of cross-shareholdings during FY2022 andFY2023 in line with this schedule, the balance of cross-shareholdings at the end of FY2023
increased under the impact of recent high stock prices. Consequently, we changed the schedule,
increasing the amount of cross-shareholdings to be disposed of each fiscal year going forward
while leaving our target of a ratio of cross-shareholdings to net assets of less than 10% by the final
fiscal year (FY2031) unchanged.
The funds raised from the disposal of cross-shareholdings will be used for capital investment andbusiness investment to improve our corporate value in the future and will also be used forshareholder returns as appropriate.

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Next, let me explain the strengthening of our shareholder returns policy as a measure to control
financial leverage.

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In terms of our shareholder returns policy, as explained before, with the "Notice Regarding
Strengthening Efforts Toward Corporate Value Enhancement" released in October 2022, we set
our total shareholder return target at 50% or more based on the maximum consideration forshareholders and are making returns to shareholders accordingly.
At the same time, we also changed our dividend policy, replacing the previous target of a dividend
payout ratio of 25% or more with a target of dividend on equity (DOE) of 2% or more.
As a result, for the two years outlined in red in the chart (the fiscal year ended March 31, 2023 andthe fiscal year ended March 31, 2024), the dividend amount and the total return ratio increased.

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Next, in other topics, I would like to talk about our promotion of human capital management
practices.

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We are focusing as a priority on the development of a company environment in which diverse
human resources can demonstrate their capabilities.
Firstly, both Vital-Net and KSK were certified as a "2024 Health & Productivity Management
Outstanding Organization (Large Enterprise Category)".
In addition, we have taken recent inflation into consideration and increased base pay to improve
compensation for employees and have also focused on work-style reform with emphasis on worklife balance.
Furthermore, KSK introduced a new personnel system that attaches importance to the value
created by each employee from April this year. Further improvement in the motivation of
employees can be expected as a result.
We also conducted an engagement survey last fiscal year. By accurately monitoring employee
engagement and using our findings in management strategies, we will further improve theretention rate and help strengthen organizational capabilities.

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Finally, I will explain our full-year earnings forecasts for FY2024.

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First, we forecast net sales of ¥590,000 million, which is 100.4% of the level a year earlier, on
expectation of the impact of NHI drug price revisions in April 2024, the absence of revenue fromCOVID-19 vaccine deliveries with the end of COVID-19 subsidies, and significant decline in salesof COVID-19 treatments and other COVID-19 treatment-related products.
Moving onto operating profit, we expect a boost of around ¥1,200 million from the effect ofincreased sales as well as the implementation of various sales measures including those targeting
hospitals and prescribing doctors and thoroughgoing management of the contribution margin
through price negotiations in accordance with the distribution improvement guidelines as revisedin March. However, the absence of revenue from the delivery of COVID-19 vaccines and thereversal of the allowance for doubtful accounts for certain major customers which was posted in
the fiscal year ended March 31, 2024 will likely have a combined negative impact of ¥1,100
million. We also expect SG&A expenses to increase by ¥200 million mainly due to information
investment including investment in the Open Data Revolution, and as a result, our operating profit
forecast is ¥5,500 million, 99.0% of the level a year earlier.
Our ordinary profit forecast is ¥6,400 million, 97.6% of the level a year earlier, in anticipation ofslightly lower operating profit, and declines in dividend income and investment returns due to thedisposal of cross-shareholdings.
Profit attributable to owners of parent is expected to be ¥6,000 million, 102.7% of the level a year
earlier, due to increased disposal of cross-shareholdings.
Finally, our ROE target is 5.8%, an improvement of 0.1% from the previous fiscal year.

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As just explained, our ordinary profit forecast for the fiscal year ending March 31, 2025 is ¥6,400
million, slightly down year on year.
However, excluding irregular factors included in the previous fiscal year's results such as revenue
from COVID-19 vaccine deliveries and the reversal of a provision for doubtful accounts for major
customers, around ¥1,100 million, this represents a profit increase in real terms.

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Finally, we come to shareholder returns for the current fiscal year.
Firstly, based on our dividend policy of maintaining a DOE of 2% or more, we plan to pay aninterim dividend of ¥21 and a year-end dividend of ¥22, bringing the annual dividend to ¥43, which
represents an increase of ¥1.
Next, since we plan to acquire 2 million treasury shares, up to a total value of ¥3,000 million, thetotal payout ratio is expected to reach an all-time high of 84.5%.

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

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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 concludes my presentation.
Thank you for your attention.

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