FY4/19 1Q
IR PRESENTATION

September 2018

Results Overview© 2018 AIN HOLDINGS INC. All Rights Reserved.

1

Consolidated P/L
Net sales decreased 1.6% year on year to ¥65,013 million, operating income declined 12.9% to ¥3,450
million, ordinary income dropped 12.7% to ¥3,610 million, and profit attributable to owners of parent
decreased 12.7% to ¥1,851 million.

FY4/18 1Q
results

FY4/19 1Q
plan

FY4/19 1Q
results

66,09565,90065,013(1,082)

(1.6)

(1.3)

Gross profit

11,06010,98010,687

(373)

(3.4)

(2.7)

% of net sales

16.7

16.7

16.4

7,096

7,670

7,236

+140

+2.0

(5.7)

10.7

11.6

11.1

3,963

3,310

3,450

(513)

(12.9)

+4.2

6.0

5.0

5.3

4,135

3,430

3,610

(525)

(12.7)

+5.2

6.3

5.2

5.6

2,120

1,760

1,851

(269)

(12.7)+5.2% of net sales

3.2

2.7

2.8

Earnings per
share(¥)

66.88

49.68

52.27

(14.61)(21.8)+5.2(¥ million)

Net
sales
（単位：百万円）

SG&A expenses% of net sales

Operating income% of net sales

Ordinary income% of net sales

Profit attributableto owners of parent

YoYchangeYoYchange(%)

Vs plan(%)

Figures in the table are rounded down
© 2018 AIN HOLDINGS INC. All Rights Reserved.

2

Dispensing Pharmacy Business (Consolidated)
In spite of contribution of stores that are opened in the previous year, net sales decreased 3.1 % year on
year and 1.7% against the plan due to the lagging of new store openings behind the plan. Segment
income dropped 17.4% year on year and 6.7% against the plan due to dispensing fee revisions.

FY4/18 1Q
results

FY4/19 1Q
plan

FY4/19 1Q
results

Net sales

58,92958,10057,090(1,839)

(3.1)

(1.7)

Gross profit

8,218

7,880

7,416

(802)

(9.8)

(5.9)

% of net sales

13.9

13.6

13.0

3,577

3,770

3,576

(1)

(0.0)

(5.1)

6.1

6.5

6.3

4,640

4,110

3,839

(801)

(17.3)

(6.6)

7.9

7.1

6.7

4,821

4,270

3,984

(837)

(17.4)(6.7)% of net sales

8.2

7.3

7.0

Number ofpharmacies

1,054

1,044

1,024

(30)

(2.8)

(1.9)

(¥ million)

SG&A expenses% of net sales

Operating income% of net sales

Segment income

YoYchangeYoYchange(%)

Vs plan(%)

Figures in the table are rounded down
Segment income is adjusted to ordinary income shown on the quarterly consolidated statements of income
Prescription volume: +0.2% YoY© 2018 AIN HOLDINGS INC. All Rights Reserved.

Average prescription price: (2.9)%YoY

3

Cosmetic and Drug Store Business (Consolidated)
Net sales increased 11.6% year on year and 2.3% against the plan due to the contribution of stores thatare opened in the previous year and improvement of ability to attract customers in same stores.
Segment income increasing 883.8% year on year and 56.2% against the plan due to improvement ofgross margin by active development of original brand and by an overhaul of procurement activities.

FY4/18 1Q
results

FY4/19 1Q
plan

FY4/19 1Q
results

Net sales

5,827

6,360

6,505

Gross profit

2,105

2,340

2,403

% of net sales

36.1

36.8

36.9

2,077

2,110

2,057

% of net sales

35.6

33.2

31.6

Operating income

27

230

345

% of net sales

0.5

3.6

5.3

Segment income

37

233

364

% of net sales

0.6

3.7

5.6

Number ofstores52

48

48(¥ million)

SG&A expenses

YoYchangeYoYchange(%)

Vs plan
(%)

+678

+11.6

+2.3

+298

+14.2

+2.7

(20)

(1.0)

(2.5)

+318 +1,177.8 +50.0

+327
(4)

+883.8 +56.2
(7.7)

0.0

Figures in the table are rounded down

Segment income is adjusted to ordinary income shown on the quarterly consolidated statements of income
Number of customers: +3.6% YoY
Average spending per customer: +7.8% YoY© 2018 AIN HOLDINGS INC. All Rights Reserved.

4

Consolidated B/S
Net cash was ¥43,281 million and shareholders’ equity ratio became 53.0%. We are maintaining asound financial structure.
(¥ million)(¥ million)

End-FY4/19 1Q

End-FY4/18
AssetsCurrent assets
Cash on hand andin banks

Fixed assets
Investments insecurities

Deferred
assetsTotal assets

AssetsLiabilities

94,557 Current liabilities
63,779

Short-term debt
Lease obligations

88,718Long-term
liabilities

69,950Current assets

6,717
443

Cash on hand andin banks

16,696

Fixed assets

2,375

Long-term debt
Lease obligations

11,511
632

Investments insecurities

103

Total net assets

96,733

Deferred
assets183,380

Total liabilities
and net assets

183,380

Total assets

Net cash
Shareholders’ equity
ratio(%)

44,474
52.7

Liabilities

94,685 Current liabilities
61,725

Short-term debt
Lease obligations

87,885Long-term
liabilities

70,7397,486
399

15,1062,320

Long-term debt
Lease obligations

10,052504

92

Total net assets

96,816

182,663

Total liabilities
and net assets

182,663

Net cash
Shareholders’ equity
ratio(%)

43,281
53.0

Figures in the table are rounded down

Net cash = Cash on hand and in banks – Interest-bearing debt (Long- and short- term debt + Lease obligations)
The company has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” from FY4/19. Results forthe previous FY have been adjusted to reflect this change in presentation.
© 2018 AIN HOLDINGS INC. All Rights Reserved.

5

Assets
The balance of total assets decreased ¥717 million from the end of the previous fiscal year due to thedecreasing in cash on hand and in banks and in goodwill, though inventories increased.
(¥ million)

End-FY4/18 1Q

End-FY4/18

End-FY4/19 1Q

Change29,5009,656
12,68864,24915,342
9,871

63,77910,466
9,580
94,557
14,934
10,041

61,725
11,511
11,227
94,685
14,773(2,054)+1,045+1,647+128(161)

10,197

+156

1,122

824

733

(91)

28,22927,853

27,884+31

40,43838,011

37,26616

1142,5832,476
3,305
10,76340,132
2,375
3,772
11,33910
39,285
2,320
3,819
11,414

(745)
(1)
(847)
(55)
+47
+75

20,513

20,732

20,715(17)

Total assets

91,326
155,576

88,718103
183,380

87,885
92
182,663

(833)
(11)
(717)

Figures in the table are rounded down

Change:End-FY4/19 1Q compared with End-FY4/18

Cash on hand and in banks
Notes and accounts receivable
Inventories
Total current assets
Buildings and structures,net

Land
Lease assets
Total property,plant andequipment
Goodwill

Lease assets
Total intangible fixed assets
Investments in securities
Deferred tax assets
Deposits and guarantees
Total investments and otherassetsTotal fixed assets
Total deferred assets

Capital expenditures (Property, plant and equipment and intangible fixed assets + Deposits and guarantees) totaled ¥1,257 million

The company has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” from FY4/19. Results forthe previous FY have been adjusted to reflect this change in presentation.
© 2018 AIN HOLDINGS INC. All Rights Reserved.

6

Liabilities and Net Assets
The balance of liabilities decreased ¥800 million from the end of the previous fiscal year due to therepayment of debts etc.
(¥ million)

End-FY4/18 1Q

End-FY4/18

End-FY4/19 1Q

ChangeAccounts payable

41,77938,72841,646+2,918

Short-term debt

8,520
560

6,717
443

7,486
399

+769
(44)

73,213

69,95070,739+789

16,376
911

11,511
632

10,052504(1,459)(128)

21,645
94,858

16,696
86,646

15,10685,846(1,590)
(800)

8,682
6,367
45,822

21,89420,50054,26821,89420,50054,34900+8160,45360,717

96,662
96,73396,743
96,816+81+83

155,576

183,380

182,663(717)

Lease obligations
Total current liabilities
Long-term debt
Lease obligations
Total long-term liabilities
Total liabilities

Common stock
Capital surplus
Retained earnings
Total shareholders’ equity
Total net assets
Total liabilities and net
assetsFigures in the table are rounded down

Change : End-FY4/19 1Q compared with End-FY4/18
The company has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” from FY4/19. Results forthe previous FY have been adjusted to reflect this change in presentation.
© 2018 AIN HOLDINGS INC. All Rights Reserved.

7

FY4/19 Plan (Consolidated)
The group forecasts net sales for the fiscal year ending April 30, 2019 of 272,870 million, increase
1.7% year on year by openings new stores (100 pharmacies and 7 Cosmetic and drug stores) ,ordinary income decrease 10.6% due to the dispensing fee revisions.
FY4/17
results

FY4/18results

FY4/19plan

YoYchange248,110
42,092

268,385
47,993+4,485

+1.7

+47

+0.1

17.0

17.9

272,870
48,04027,52928,370+2,170

+7.6

11.1

10.6

14,563

19,622(2,122)(10.8)

5.9

7.3

15,08020,129(2,129)(10.6)

6.1

7.5

7,949

10,5679,260(1,307)(12.4)% of net sales

3.2

3.9

3.4

Earnings per
share(¥)

250.71310.08261.38(48.70)(15.7)

50.00

50.00

55.00

+5.00

+10.0

（¥ million）

Net sales
Gross profit% of net sales

SG&A expenses% of net sales

Operating income% of net sales

Ordinary income% of net sales

Profit attributable toowners of parent

Annual dividend (¥)

Figures in the table are rounded down
© 2018 AIN HOLDINGS INC. All Rights Reserved.

YoYchange (%)

17.6

30,54011.2

17,5006.4

18,000
6.6

YoY change :FY4/19 plan compared with FY4/18 results
8

1Q Review© 2018 AIN HOLDINGS INC. All Rights Reserved.

9

Review①（Vs FY4/18 Results）■ Net sales(¥ million)
Net sales
Gross profit% of net
sales
SG&A
expenses% of net
sales
Operatingincome% of net
sales
Ordinary
income% of net
sales

FY4/18 1Q FY4/19 1Q
results
results

YoYchange66,095 65,013 (1,082)
11,060 10,687
16.7

(373)

AYURA

YoY
change
(%)

(1.6)
(3.4)

+¥0.08billion+¥0.09 Mail order etc.
billion¥(1.8)New storesbillionExisting stores+¥2.0
billionFull contribution ofprevious year’s
openings¥(1.45)billion

16.4

7,096

7,236

10.7

11.1

3,963

3,450

6.0

5.3

4,135

3,610

6.3

5.6

Figures in the table are rounded down

+140

+2.0

Close ofunprofitable
stores

FY4/18 1Q
results

FY4/19 1Q
results¥(1.08)billion(1.6)%■ Ordinary income+¥0.05billion(513) (12.9)+¥0.5
billion(525) (12.7)

Increase ofprescription
volume¥(0.7)Net sales
increased by
Retail, etc.

FY4/18 1Q
results

FY4/19 1Q
resultsbillion
Impact ofrevision¥(0.5)
billionIncrease of (12.7)%¥(0.35)billionlabor costs,
operation costand head
office expense© 2018 AIN HOLDINGS INC. All Rights Reserved.

10

Review②（Vs plan）■ Net sales(¥ million)
Net sales

FY4/19 1Q FY4/19 1Q
plan
results

Vs planVs plan(%)+¥0.2
billion

FY4/19 1Q
results

Existing stores

65,900 65,013

(887)

(1.3)

FY4/19 1Q
plan¥(1.1)
billionGross profit% of net
sales
SG&A
expenses% of net
sales
Operatingincome% of net
sales
Ordinary
income% of net
sales

10,980 10,687
16.7

16.4

7,670

7,236

11.6

11.1

3,310

3,450

5.0

5.3

3,430

3,610

5.2

5.6

Figures in the table are rounded down

Unachieved
openings ofthis year

(293)

(2.7)

(434)

(5.7)

+140

+4.2 ■ Ordinary income+¥0.2
billion

+180

+5.2
+¥0.4
billionIncrease of
averageprescription
price

Net sales
increased by
Retail, etc.

FY4/19 1Q
plan© 2018 AIN HOLDINGS INC. All Rights Reserved.

¥(0.9)
billion(1.3)%¥(0.4)
billion
Unachieved
openings ofthis year+¥0.2
billion+5.2%

FY4/19 1Q
results
11

Top-line①
Although M&A fell below the plan in FY4/19 1Q, the group has decided to acquire Kom-Medical and
ABC Pharmacy in Sep 2018, and the group is expect to reach the 107 new store openings in thisfiscal year.
■ Total number of stores

1,072 (Dispensing pharmacy:1,024 Cosmetic and drug store:48)■ PlanFY4/19 1Q

Sep. 2018

FY4/19Prospect

Plan

Plan

Results

Organic

2

2

5

30

M&A

23

3

59

70

Cosmetic and drug store

-

-

2

7

Total

25

5

66

107

Dispensing
Pharmacy

-

10

17

Cosmetic anddrug store

-

-

0

-

10

17

Dispensing

Pharmacy

Close

Total of closed store

Koshinetsu
66
Chugoku,
Shikoku91

M&A
EV/EBITDA ratio

ClosedNo. of total storesTohoku135

Hokuriku
17
Kanto
364

Kinki
131
Kyusyu, Okinawa
49■ Transition of dispensing pharmacies
Organic

Hokkaido
120

Tokai
99
End-FY4/19 1Q

FY4/10FY4/11

FY4/12

FY4/13

FY4/14

FY4/15

FY4/16

FY4/17

21

18

27

38

36

40

32

27

25

2

3
3.45
2
397

35
5.60
5
448

28
5.51
9
494

38
5.09
10
560

26
3.94
6
616

119
4.77
21
754

110
5.37
15
881

182
5.50
24
1,066

11
3.96
73
1,029

3
3.40
10
1,024

EV/EBITDA ratio=EV(Purchase price)/EBITDA(Operating income + Depreciation and amortization)© 2018 AIN HOLDINGS INC. All Rights Reserved.

FY4/18 FY4/191Q

No. of stores include temporary closed stores from FY4/11
12

Correspondence to Dispensing Fee Revisions of 2018
Objects: 1,016 stores, which including same stores and stores that were opened in previous year Basic dispensing fee Community support system premiums

Fee 1（41pts）

Fee 2（25pts）

Fee 3-Ⅱ（15pts）

Fee SP（10pts）

100%

100%

50%

0%

35.7%
0.6%

35.7%
0.6%

62.4%

62.4%

1.3%

1.3%

Apr.2018

Jul.2018

 GE premiums
Premum 1（18pts）

Premium 2（22pts）

Premium 3（26pts）

14.1%
33.4%

50%

0%

22.5%

50%

26.4%

27.4%

73.6%

72.6%

Apr.2018

Jul.2018

2 stores that otherthan basic dispensingfee 1 achieved
premiums0% Transition of GE premiums

No premiums

100%

Community support system premiums(35pts)
No premiums（Points）

20.0

The group

4 main subsidiaries

18.9

21.4%
35.3%

Other

15.8

17.7

15.0

15.4

14.8

17.7%

30.0%

25.6%

Apr.2018

Jul.2018

Share of GE quantity：78.8%（July 2018）© 2018 AIN HOLDINGS INC. All Rights Reserved.

16.9
15.9

13.4
12.4

10.0
Apr.2017

Jul.

Oct.

Jan.2018

Mar.

Apr.

Jul.

GE average premiums per a reception
13

FY4/19 Plan（Dispensing Pharmacy Business）■ Net sales
FY4/18results

FY4/19plan

YoYchange（¥ million）
Net sales

238,645 239,800 +1,155

Gross profit

36,030% of net sales

15.1

SG&A
expenses% of net sales

Operatingincome% of net sales

Segment
income% of net sales

14,03434,500 (1,530)
15,200 +1,166

22,668

(4.2)

+8.3

6.3

19,300 (2,695) (12.3)

9.2+¥12.1¥(11.9)billionbillionNew 100
store¥(4.0) billion

20,000 (2,668) (11.8)

Figures in the table are rounded down

8.3

Store Closing in current
and previous year+¥4.9 billion+¥1.1
billion+0.5%

Full contribution of storesthat opened in previous year

FY4/18results

FY4/19plan■ Segment income¥(2.3) billion
Impact of revision

8.0

9.5

Impact ofrevision

+0.5

14.4

5.9

21,995YoYchange(%)¥(1.6) billion+¥6.3 billion

Store closing in current
and previous year

Contribution of stores that
opened in current andprevious year

FY4/18results¥(4.4) billion

FY4/19

Increase of laborplan
costs and operation
cost by recruitment¥(2.6)and new store
billionopening¥(0.6)
billion(11.8)%

Head office
expense, etc.
© 2018 AIN HOLDINGS INC. All Rights Reserved.

14

Expansion of AINZ & TULPEHIGASHI IKEBKURO

Location

Toshima-ku, TokyoOpen

Aug 3, 2018

Sales floor

800㎡

OLINASKINSHICHO
Location

Sumida-ku, TokyoOpen

Sep 13, 2018
(plan)

Sales floor

290㎡© 2018 AIN HOLDINGS INC. All Rights Reserved.

15

FY4/19 Plan（Cosmetic and Drug Store Business）

FY4/18results

FY4/19plan

YoYchange（¥ million）
Net sales

24,117 27,000 +2,883

YoYchange(%)+12.0■ Net sales+¥1.2 billion
New 7¥(0.7) billion
stores+¥0.7 billion
Full contribution of
opening in previous year＋¥1.6 billion

Gross profit% of net sales

SG&A expenses% of net sales

Operatingincome% of net sales

Segment
income% of net sales

8,925 10,060 +1,135
37.0

37.3

8,317

9,060

34.5

33.6

+12.7

Closed in previous year stores+¥2.8
Billion+12.0%

Growth of existing
stores

FY4/18results+743

FY4/19plan+8.9■ Segment income+¥0.07 billion

608

1,000

2.5

3.7

657

1,020

2.7

3.8

+392

+64.5

Improvement of grossmargin¥(0.78) billion
Cost of new opening store
Cost of product development

+363

+55.3

Growth of net sales+¥0.36billion+55.3％

FY4/18results

FY4/19plan+¥1.07 billion

Figures in the table are rounded down

© 2018 AIN HOLDINGS INC. All Rights Reserved.

16

Supplementary Information© 2018 AIN HOLDINGS INC. All Rights Reserved.

17

Dispensing fee revision of 2018
Before revisionBasicdispensing
fee

1

Except following

2

Over 4,000 times & 70%
or Over 2,000 times & 90%
or Over 4,000 times from specifichospital

3

Same group over 40,000 times /month and over 95% or Lease
contract with medical institution

Point
41
25

20

After revision

Point

1

Pharmacy which located at few medical resources area or except 2,3 & S

41

2Over 4,000 times & 70%
or Over 2,000 times & 85%
or Over 4,000 times from specific hospital(In the case of Medical mall or 2nd
store, the prescriptions is added up)

25

3

Ⅰ. Same group over 40,000 times / month and over 85% or lease contract withmedical institution
Ⅱ. Same group over 400,000 times / month and over 85% or lease contract withmedical institution

15

Same premises(lease contract etc.) and over 95%

10

SPStandards
fordispensing
systempremiums

Basic dispensing fee 41points &Inventory 1,200 items & Home
healthcare services(1 case / year) &Notification of primary care pharmacists& Supervising pharmacists having
operational experience for at least 5
years and enrollment for at least 1 year

Generic drug 65-75%
dispensing
Over 75%
systems
Premiums
Basic dispensing fee 1 & Patients’
Drug use
handing over medication notebook &history
Patients’ visiting within 6 months
management
andExcept the above
guidance fee

Primary carepharmacists
instruction
feeOperational experience for at least 3
years, Working over 32 per week,
Belongs to pharmacy at least 0.5 year,
Certified pharmacists, Participation ofcommunity activity© 2018 AIN HOLDINGS INC. All Rights Reserved.

Basic dispensing fee 1 : follow the standards for dispensing system
Other than basic dispensing fee 1 have to fulfill all the following
achievements per pharmacist①Night・holiday addition 400 times②Duplicate medication・Interaction prevention addition 40 times③Medication adjustment support addition 1 time
④Home healthcare services for single building 1 person only 12 times⑤Medication information providing fee 60 times⑥Narcotic drug management guidance addition 10 times⑦Primary care pharmacists instruction fee 40 times⑧Outpatient medication support fee 12 times

20

32

Community
supportsystempremiums

1875-80%

1822

80-85%

22

Over 85%

26

38

Basic dispensing fee 1 & Patients’ handing over medication notebook & Patients’ visiting
within 6 months

41

50

Except the above

53

70

Operational experience for at least 3 years, Working over 32 hours(or 24 hours &working more than 4 days) per week, Belongs to pharmacy at least 1 year, Certified
pharmacists, Participation of community activity

73

35

18

Company Profile
Trade name
Representative
EstablishedMarket capitalization
Net sales andoperating income
Sales composition
Number of employees

AIN HOLDINGS INC
Kiichi Otani, President and Representative Director
August 1969
¥301,134 million As of August 31, 2018
Net sales: ¥268,385 million Operating income: ¥19,622 million

As of FY4/18

Dispensing Pharmacy : ¥238,645 million, Cosmetic and Drug Store : ¥24,117 million,
As of FY4/18
Others : ¥5,623 million
9,603 (including pharmacists：4,457)
As of April 30, 2018
《Dispensing pharmacy》

AIN PHARMACIEZ Inc. and other 65 companies.

Group companies《Staffing services》 《Consulting services》 MEDIWEL Corp., Medical Development Co., Ltd. etc.
《Generic drug wholesales》 WHOLESALE STARS Co., Ltd
As of FY4/18

Number of stores

1,077 (1,029 dispensing pharmacies, 48 cosmetic and drug stores) As of FY4/18

Cosmetic and DrugStore 9.0%
© 2018 AIN HOLDINGS INC. All Rights Reserved.

FY4/18 Consolidated
net sales¥268,385 million

Dispensing Pharmacy
88.9%
19

Comparison to Other Companies（%）
8.0

B company

7.0

Operating margin

6.0

AIN HOLDINGS
A company

E company

5.0

Net sales：¥268,385 million
Operating margin：7.3%

C company

Market capitalization：

4.0

D company¥301,134 million

3.0

2.0

1.0

0.0
0

40,00080,000120,000

160,000

200,000

240,000

280,000 （¥ million）

Net sales
Based on each company’s summary of financial statement for FY 3/18 (Ain HD: FY4/18)
Size of circle is proportional to market capitalization on Aug 31, 2018
© 2018 AIN HOLDINGS INC. All Rights Reserved.

20Inquiries related to this presentation should be addressed to

AIN HOLDINGS INC.
Corporate Planning Division
TEL(81)11-814-0010
FAX(81)11-814-5550
http://www.ainj.co.jp/
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