FY4/18
IR PRESENTATION

June 2018

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

1

Consolidated P/L
Net sales increased 8.2% year on year and 0.3% against the plan due to business growth in same storesand stores that were opened in previous year. Ordinary income increased 33.5% year on year and 8.8%
against the plan due to the increase of net sales and the decrease of costs by improving operations.
(¥ million)

FY4/17
results

FY4/18plan

FY4/18resultsNet
sales（単位：百万248,110

267,500

268,385 +20,275

+8.2

+0.3

Gross profit

42,09247,40047,993+5,901

+14.0

+1.3

% of net sales

17.0

17.7

17.9

27,52929,40028,370

+841

+3.1

(3.5)

11.1

11.0

10.6

14,56318,00019,622+5,059

+34.7

+9.0

5.9

6.7

7.3

15,08018,50020,129+5,049

+33.5

+8.8

6.1

6.9

7.5

7,949

9,200

10,567+2,618

+32.9

+14.9

% of net sales

3.2

3.4

3.9

Earnings per
share(¥)

250.71

269.96

円）

SG&A expenses% of net sales

Operatingincome% of net sales

Ordinary income% of net sales

Profit attributableto owners of parent

YoYchangeYoYchange(%)

Vs plan(%)

310.08 +59.37 +23.7 +14.9

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

2

Dispensing Pharmacy Business (Consolidated)
Net sales increased 7.6% year on year and 0.3% against the plan due to the increase of prescription
volume and average prescription price in same stores and stores that were opened in the previous year.
Segment income increased 18.6% year on year and 7.9% against the plan due to the increase of net
sales and the decrease of costs by improving operations.
FY4/17
FY4/18
FY4/18YoY
YoY
Vs plan(¥ million)(%)
change change(%)
resultsplan
results

Net sales

221,801

237,900

238,645 +16,844

+7.6

+0.3

Gross profit

32,09035,26036,030+3,940

+12.3

+2.2

% of net sales

14.5

14.8

15.1

13,432

14,86014,034

+602

+4.5

(5.6)

6.1

6.2

5.9

18,65820,40021,995+3,337

+17.9

+7.8

8.4

8.6

9.2

19,11021,00022,668+3,558

+18.6

+7.9

% of net sales

8.6

8.8

9.5

Number ofpharmacies

1,066

1,078

1,029

(37)

(3.5)

(4.5)

SG&A expenses% of net sales

Operatingincome% of net sales

Segment income

Figures in the table are rounded down
Segment income is adjusted to ordinary income shown on the quarterly consolidated statements of income
Prescription volume: +7.6% YoY© 2018 AIN HOLDINGS INC. All Rights Reserved.

Average prescription price: +0.2% YoY

3

Cosmetic and Drug Store Business (Consolidated)
Net sales increased 12.8% year on year and 2.2% against the plan due to contribution of stores that are
opened in the previous year and improvement of ability to attract customers in same stores. Segment
income increasing ￥1,523million year on year to ¥657 million due to improvement of gross margin by
active development of original brand and by an overhaul of procurement activities and due to thedecrease of costs by raising operating efficiency.
FY4/17
FY4/18
FY4/18YoY
YoY
Vs plan(¥ million)(%)
change change(%)
resultsplan
results

Net sales

21,38323,60024,117+2,734

+12.8

+2.2

Gross profit

7,623

8,680

8,925

+1,302

+17.1

+2.8

% of net sales

35.6

36.8

37.0

8,583

8,430

8,317

(266)

(3.1)

(1.3)

40.1

35.7

34.5

(959)

250

608

-

1.1

2.5

(866)

280

657

% of net sales

-

1.2

2.7

Number ofstores52

49

48

SG&A expenses% of net sales

Operatingincome% of net sales

Segment income+1,567- +143.2+1,523- +134.6

(4)

(7.7)

(2.0)

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: +4.9% YoY
Average spending per customer: +7.5% YoY© 2018 AIN HOLDINGS INC. All Rights Reserved.

4

Consolidated B/S
Net cash increased by ¥42,103 million to ¥44,474 million and shareholders’ equity ratio became
52.7% by fund-raising through a public offering and private placements.
(¥ million)(¥ million)

End-FY4/18

End-FY4/17
AssetsCurrent assets
Cash on handand in banks

Fixed assets
Investments insecurities

liabilities
65,420 Current
Short-term debt

29,775

Lease obligations

90,902Long-term
liabilities

72,955Current assets

7,596
594

Cash on hand andin banks

23,188Fixed assets

2,435

Long-term debt
Lease obligations

18,254958

Investments insecurities‐

Total net assets

60,178Deferred
assets156,323

Total liabilities
and net assets

156,323

Total assets

Deferred
assetsTotal assets

AssetsLiabilities

Net cash
Shareholders’ equity
ratio(%)

2,371
38.4

Liabilities
liabilities
96,169 Current
Short-term debt

63,779Lease obligations

87,162Long-term
liabilities

70,235
6,717
443

16,4672,375Long-term debt
Lease obligations

11,511
632

103

Total net assets

96,733

183,435

Total liabilities
and net assets

183,435

Net cash
Shareholders’ equity
ratio(%)

44,47452.7

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)© 2018 AIN HOLDINGS INC. All Rights Reserved.

5

Assets
The balance of total assets increased ¥27,112 million from the end of the previous fiscal year due tofund-raising through a public offering and private placements.
(¥ million)

End-FY4/16

End-FY4/17

End-FY4/18

Change22,647
12,385
10,98429,775
9,990
11,66863,77910,466
9,580+34,004+476(2,088)56,59365,42096,169+30,749

14,694
9,537
1,352

15,365
9,958
1,166

14,934
10,041
824

(431)
+83
(342)

28,15328,46427,853(611)

33,337
13

40,9398

38,01111(2,928)+3

Total intangible fixed assets

35,586

43,10940,132(2,977)

Investments in securities

Deposits and guarantees

2,677
2,038
10,013

2,435
2,167
10,443

2,375
2,216
11,339

(60)
+49
+896

Total investments and otherassets

19,55519,32919,176(153)

83,294
139,888

90,902
156,323

87,162
103
183,435(3,740)+103+27,112

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

Deferred tax assets

Total fixed assets

Total deferred assets
Total assets

Figures in the table are rounded down

Fundraising

Change:End-FY4/18 compared with End-FY4/17

Capital expenditures (Property, plant and equipment and intangible fixed assets + Deposits and guarantees) totaled ¥5,311 million© 2018 AIN HOLDINGS INC. All Rights Reserved.

6

Liabilities and Net Assets
The balance of liabilities decreased ¥9,442 million from the end of the previous fiscal year due to therepayment of debts etc.
(¥ million)

End-FY4/16

End-FY4/17

End-FY4/18

ChangeAccounts payable

39,98739,32538,728(597)

Short-term debt

5,690
668

7,596
594

6,717
443

(879)
(151)

66,744

72,95570,235(2,720)14,854
1,198

18,254958

11,511632(6,743)(326)

19,81886,56323,18896,144

16,46786,702(6,721)(9,442)

8,682
6,367
38,6058,682
6,367
45,286

21,89420,50054,268+13,212+14,133+8,982

53,23753,324

59,91860,17896,662
96,733+36,744+36,555

139,888

156,323

183,435+27,112

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
assetsRepaymentof debts

Fundraising

Figures in the table are rounded down
Change : End-FY4/18 compared with End-FY4/17© 2018 AIN HOLDINGS INC. All Rights Reserved.

7

Consolidated C/F
The change of net increase in cash and cash equivalents became ¥33,999 million due to fundraising through a public offering and private placements, etc.
(¥ million)

FY4/17

FY4/18Change18,40921,656+3,247

14,307

17,852+3,545

Depreciation and amortization

3,687

3,596

(91)

Amortization of goodwill

3,654

3,937

+283

(Increase) decrease in accounts receivable

5,369

(25)

(5,394)

449

2,278

+1,829(Increase) decrease in other accounts receivable(2,820)1,685+4,505

Increase (decrease) in accounts payable(4,340)(1,076)+3,264(11,183)(5,281)+5,902(3,448)(3,709)(261)(9,697)(1,310)+8,387

Net cash provided by financing activities

116

17,623+17,507

Proceeds from issuance of common sharesand sales of treasury shares-

27,631+27,631

7,342

33,998+26,656

29,234

63,233+33,999

Net cash provided by operating activities
Profit before income taxes(Increase) decrease in inventories

Net cash used in investing activities
Payments for purchases of property, plantand equipment and intangible fixed assets
Purchase of subsidiaries’ shares resulting
in obtaining controls

Net increase in cash and cash equivalents
Cash and cash equivalents at end of the year
Figures in the table are rounded down
© 2018 AIN HOLDINGS INC. All Rights Reserved.

8

Business Value Analysis
FY4/16

FY4/17

FY4/18ChangeNet cash (¥ million)

38.1
121.0
21.39
249.693.19
1,679.69
6.2
15.6
20,8168.08(0.00)
236

38.4
156.6
30.79
250.71
4.09
1,895.63
5.4
14.0
21,90511.07(0.04)
2,371

52.7
141.0
23.54
310.082.67
2,729.44
6.2
13.5
27,1567.90(0.46)
44,474+14.3(15.6)(7.25)+59.37(1.42)+833.81+0.8(0.5)+5,251(3.17)(0.42)+42,103

Shareholders’ value (¥ million)

168,520

244,828

258,928+14,100

Market capitalization (¥ million)

169,318

244,782258,620+13,838

Shareholders’ equity ratio (%)
Market value equity ratio (%)
PER (times)
EPS (¥)PBR (times)
BPS (¥)ROA (%)ROE (%)EBITDA (¥ million)
EV/EBITDA (times)
Net D/E ratio (times)

Figures in the table are rounded down
Change：End-FY4/18 compared with End-FY4/17
Net D/E ratio = (Interest-bearing debt – Cash on hand and in banks) / Shareholders’ equity
Shareholders’ value = EV – Net interest-bearing debt
Market capitalization：Treasury stock is excepted
Share prices used to calculate market capitalization:
End-FY4/16 ¥5,340 (End-Apr,2016), End-FY4/17 ¥7,720 (End-Apr,2017), End-FY4/18 ¥7,300 (End-Apr,2018).
Net cash = Cash on hand and in banks – Interest-bearing debt (Long- and short- term debt + Lease obligations )© 2018 AIN HOLDINGS INC. All Rights Reserved.

9

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
10Review
Revision of 2018

Growth Strategy© 2018 AIN HOLDINGS INC. All Rights Reserved.

11

Review© 2018 AIN HOLDINGS INC. All Rights Reserved.

12

Review①（Vs FY4/17 Results）+¥0.7■ Net sales +¥3.8 billion billion
New stores(¥ million)
Net sales
Gross profit% of net
sales
SG&A
expenses% of net
sales
Operatingincome% of net
sales
Ordinary
income% of net
sales

FY4/17
results

FY4/18results

YoYchange248,110 268,385 +20,275
42,092

47,99317.0

17.9

27,52928,370

11.1

10.6

14,563

19,622

5.9

7.3

15,08020,1296.1

7.5+5,901+841

YoY
change(%)+¥4.5 billion
Existing stores+¥20.2billion+8.2%+8.2 +¥16.4 billion
+14.0

+3.1

¥(5.2) billion

Close of
AYURA
Mail order unprofitable stores
etc.

Full contribution ofprevious year’s
openings

FY4/17
results

FY4/18results■ Ordinary income+5,059+34.7+5,049+33.5+¥1.5 billion
Improvement of
Cosmetic anddrug stores, AYURA,
and Mail order+¥3.5 billion
Net sales
increased bydispensing
pharmacy, etc.

+¥5.0 billion+33.5%

FY4/17
results

FY4/18results

Figures in the table are rounded down

© 2018 AIN HOLDINGS INC. All Rights Reserved.

13

Review②（Vs plan）■ Net sales+¥1.2 billion ¥(1.3) billion

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

FY4/18results

267,500 268,385

Vs planVs plan(%)

Existing stores

Unachieved
openingsof this year¥(0.6) billion

+885

+0.3

Close of Unprofitable stores
Other+¥1.5 billion
Previous year’s
openings

47,40047,99317.7

17.9

29,40028,370 (1,030)

11.0

18,000

+1.3

(3.5)

10.6

19,622 +1,622

6.7

18,500+593

FY4/18plan

FY4/18results■ Ordinary income+9.0+¥0.5 billion

7.3

20,129 +1,629

6.9

7.5

Figures in the table are rounded downControl of SG&A
expenses+8.8+¥0.4 billion
Improvement of
Cosmetic anddrug stores+¥0.7 billion+¥1.6 billion+8.8%

Net sales rose by dispensing
pharmacy, Control ofoperating cost

FY4/18plan© 2018 AIN HOLDINGS INC. All Rights Reserved.

+¥0.8
billion+0.3%

FY4/18results
14

Revision of 2018

© 2018 AIN HOLDINGS INC. All Rights Reserved.

15

Dispensing Fee Revisions of 2018
 Basic dispensing fee（New classification requirements ）1
2

41 pts
25 ptsOver 4,000 times & 70% or Over 2,000 times & Over 85% or Over 4,000 times
from specific hospital3-Ⅰ 20 pts Same group over 40,000 times / month & Over 85% or lease contract withmedical institution
3-Ⅱ 15 pts Same group over 400,000 times / month & Over 85% or lease contract withmedical institution
Companies with annual net
S
10 pts Same premises（lease contract） & Over 95%
sales of approximately 43
billion yen or more
 Community support system premiums（New）35 pts
Basic dispensing fee 1, Inventory 1,200 items & Home healthcare services & Primary carepharmacists & Supervising pharmacist having experience 5 years, staying 1 year, 32h/week
Other than basic dispensing fee 1, have to fulfill all the following achievements

 GE Premiums（Requirements changed）
75-80% 18pts, 80-85% 22pts, Over 85% 26pts

Per pharmacists per year
①Night・Holiday addition 400 times②Narcotic drug management guidance addition 10
times③Duplicate medication・Interaction prevention
addition 40 times④Primary care pharmacists instruction fee 40 times⑤Outpatient medication support fee 12 times⑥Medication adjustment support addition 1 time
⑦Home care services 12 times⑧Medication information providing fee 60 times

 Drug use history management and guidancefee （3 classifications）
41pts BDF 41pts & handing over medication
notebook & visiting within 6 months
53pts Except the above
13pts handing over medication notebook
ratio under 50%
 Primary care pharmacists instruction fee（Requirements changed）
73pts Patient’s consent & 3 years experience・Staying 1 year・32h/week, etc.
© 2018 AIN HOLDINGS INC. All Rights Reserved.

16

Basic dispensing fee・Community support system premiums
Work actively to improve basic dispensing fee and community support system premiums due toincrease prescriptions from other hospitals and clinics.
■ Basic dispensing fee

April 2018

April 2019change1（41pts）

362 stores

409 stores+47

2（25pts）

4 stores4 stores-3-Ⅰ（20pts）

0 store0 store-3-Ⅱ（15pts）

639 stores

596 stores

(43)

S

13 stores

9 stores(4)（10pts）

Object：1,018 stores excluding the recent M&A stores■ Community support system premiums
Although the number of stores became 247 after the revisions, the group will undertakes suchas satisfy the requirements for supervising pharmacists and accumulate the necessary
achievements for the stores that other than basic dispensing fee 1, aim to increase 52 stores to
299 stores in April 2019.
52
Basic dispensing fee 1
Other

2
May.

6
Jun.

2018
© 2018 AIN HOLDINGS INC. All Rights Reserved.

11

Jul.

17

18

20

Aug.

Sep.

Oct.

24

29

35

36

38

6

6

6

Jan.

Feb.

Mar.

(store)

15

1

Nov.

Dec.

Apr.

2019

Object：1,018 stores excluding the recent M&A stores

17Generic drug dispensing system premiums
The GE average premiums fell from 17.7 to 14.8 points and the figure that excluding 4 main
subsidiaries is 12.4 points. The group will keep going for promotion of the use of GE then try
to recover to the pre-revision level as soon as possible.
■ Transition of GE premium

GE average premiums（Points）
20.0

The group

4 main subsidiaries

Other

18.9

17.7
15.0

15.4

17.7
15.8

17.0
15.0

14.8
12.4

10.0
Apr.
2017

Jul

Oct

Jan.
2018

Mar.

Apr.

Jul.

Oct.

Jan.
2019

Apr.

4 main subsidiaries：AIN PHARMACIEZ, AIN MEDIO, DAICHIKU, ASAHI PHARMACY

April 2018

April 2019

Change1（18points）

191 stores

159 stores(32)

2（22points）

319 stores

371 stores+52

3（26points）

149 stores

259 stores

+110

Total

659 stores

789 stores+130

Object：1,018 stores excluding the recent M&A stores© 2018 AIN HOLDINGS INC. All Rights Reserved.

18

Growth strategy© 2018 AIN HOLDINGS INC. All Rights Reserved.

19

Growth Process
The business environment and the role of dispensing pharmacy are changing greatly year by year.
Our group continue to grow adapting to the changing environment with setting 4 followings as a
growth strategy, to improve of Top-line, to strength the function of pharmacies, to recruit and train
human resources and to expand AINZ & TULPE.
71.7%
80. 0%（¥ million）
3,000

0.0 1

Net sales¥6.0 trillion

1,500¥1.6 trillion

0.0 0

30. 0%

20. 0%

Victory2005
0.0 %Promoting Non-hospital
dispensing

0

200
150
100

10. 0%

1994

0.0 0

250

40. 0%

Challenge1000

0.0 0

500

Transcend 2000
Promotinggeneric drugs

0.0 0

1,000

50. 0%

2006¥2.7 trillion

26.0%

60. 0%

Primary careservices50
04/93 4/94 4/95 4/96 4/97 4/98 4/99 4/00 4/01 4/02 4/03 4/04 4/05 4/06 4/07 4/08 4/09 4/10 4/11 4/12 4/13 4/14 4/15 4/16 4/17 4/18 4/19（FY）

4/93

4/95

4/97

4/99

4/01

4/03

V2005

4/05

Net sales

52

107

259

261

195

353

400

570

763 1,000

Ordinary
income

3

4

(15)

(1)

8

13

21

30

30

（¥ million）

4/06

C1000

4/08

4/10

4/11

T2000

4/14

4/16

4/18

4/19

1,062

1,254

1,293

2,000

1,702

2,348

2,683

2,728

43

63

82

135

105

151

201

180

50

（Plan）

TopicsFY 4/95

FY 4/01■ Opening stores inprime location■ Nationwide network■ Securing pharmacists■ Restructuring ofdrug and cosmetic
store business■ Construction of new
dispensing system■ Dispensing in
drugstores■ Safety and efficiency
in dispensing
pharmacy business© 2018 AIN HOLDINGS INC. All Rights Reserved.

FY 4/06

FY 4/11FY 4/19■ Active new store
openings and M&As

■ Development
sales model■ Boosting efficiency ofpharmacy operation■ GE / automation /Yubari model■Top-line
Opening stores in prime
location / M&A■Strengthening the function ofpharmacies■ WHOLESALE STARS■ Cost management■Recruiting and training humanresources■ Expansion of AINZ &TULPE■Expansion of AINZ & TULPE
20

Ordinary income

2,000

0.0 0

2016

¥4.1 trillion

39.5%

0.0 1

70. 0%¥7.5 trillion

53.8%

Ordinary income

Net sales

63.1%

Non-hospital dispensing ratio

Dispensing pharmacy market

0.0 1

2,500

（¥ million）

0.0 1

Growth Strategy
With a drastic reduction in drug prices and further reduction of points aimed at major dispensing
pharmacy chains, the dispensing fee revisions in 2018 gotten severe. We will continue to strengthen
pharmacy functions in anticipation of strict system changes and deregulation in the future.

■Top-line
Expanding of business by active new store openings inprime location and by secure M&As

■ Strengthening the function of pharmacies
Strengthening the function of pharmacies focusing on KPI,
evaluating the quality of the non-hospital dispensing, such as
Community Support System and Primary Care Functions, etc.

■ Recruiting and training human resources
Recruiting activity and development of human resources
with the energy of the entire company■ Growth of AINZ & TULPE
Improving the ratio of original products and gross profit byactive store openings in the metropolitan area and bystrengthening our brand equity© 2018 AIN HOLDINGS INC. All Rights Reserved.

21

Top-line①
We opened 40 stores including M&As and closed 81 stores in FY4/18. We forecast 107 new storesopening by active new store openings and promotion of M&A and 17 stores closing in FY4/19.
■ Total number of stores

1,077 (Dispensing pharmacy:1,029 Cosmetic and drug store:48)■ PlanFY4/18Organic

Dispensing

Pharmacy

Plan

Results

Plan

29

25

30

43

11

70

Cosmetic and drug store

4

4

7

Total

76

40

107

Dispensing
Pharmacy

60

73

17

Cosmetic anddrug store

7

8

0

67

81

17

Close

M&A

Total of closed store

Hokkaido120

FY4/19■ Transition of dispensing pharmacies

Koshinetsu
67
Chugoku,
Shikoku
91

Tohoku136

Hokuriku
17
Kanto
365

Kinki
133

Tokai
98

Kyusyu, Okinawa
50

End-FY4/18

FY4/09 FY4/10 FY4/11 FY4/12 FY4/13 FY4/14 FY4/15 FY4/16 FY4/17 FY4/18
Organic
M&A
EV/EBITDA ratio

ClosedNo. of total stores

24

21

18

27

38

36

40

32

27

25

3
2.21
8
375

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

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

No. of stores include temporary closed stores from FY4/11
22

Top-line②
Due to the failure of successor, shortage of pharmacist, dispensing fee revisions in 2018 and anxiety
about business continuity, the number of projects both of private and corporate pharmacy that meet
our M&A standards is increasing. We will continue aggressive M&A towards expanding the top line.
■ Transition of M&A
FY4/09FY4/10FY4/11

FY4/12

FY4/13

FY4/14

FY4/15

FY4/16

FY4/17

FY4/18

3

3

35

28

38

26

119

110

182

11

2.21

3.45

5.60

5.51

5.09

3.94

4.77

5.37

5.50

3.96

No. of M&A
EV/EBITDA ratio■ M&A Targets and standards of AIN Group
Our targets

Dispensing pharmacy
market（59,000 pharmacies）

Annual net sales
more than ¥120
million（26,000 pharmacies）¥6.2 trillion¥7.5 trillion
Annual net sales
less than ¥120
million(33,000 pharmacies)

Store size

Our M&A standards

FY4/19 Plan

Private pharmacy:
Annual net sales
more than ¥200 million

70 Stores

Corporate pharmacy:
Annual net sales
more than ¥120 million
EV/EBITDA ratio

5 times - 7 times

ProfitContribute fromnext FY

Risk

On-site pharmacy
Compliance

FY4/19Net sales up¥10 billion(FY4/20)
Net sales up¥14 billion¥1.3 trillion
Estimated by Recent trend of national dispensing medical expenses(2017) from Ministry of Health, Labor and Welfare© 2018 AIN HOLDINGS INC. All Rights Reserved.

23

Strengthening the function of pharmacies①¥7.5 trillion（¥ million）

調剤

売

Dispensing pharmacy market
Dispensing pharmacy sales

250,000
7

200,000

6

Non-hospital dispensing ratio
Segment income

80. 0%

234,528
71.7%

55.8%

60. 0%

5

4

上 100,000
高25,00070. 0%

22,668150,000

15,000¥4.7 trillion

40. 0%

30. 0%

66,392

20. 0%

50,0004,081

0（Year）

20,00050. 0%

3

2（¥ million）

1

10. 0%

0

0.0 %

06

07

Revision ratio on
dispensing fees (%) (0.6)
Revision ratio on
drug prices (%)(Drug prices base) (6.7)

08
+0.17
(5.2)

09

10
+0.52
(5.75)

11

12
+0.46

13

(6.0)

14
+0.22
(2.65)

15

16
+0.17
(7.77)

17

10,0005,000

Segment income

Dispensing pharmacy sales8018（Plan）+0.19(7.48)

2006 Establishment of WSS 2009 “Yubari model” started 2016 Primary Care Services establishedStrengthening the function
for the GE use promotion© 2018 AIN HOLDINGS INC. All Rights Reserved.

Strengthening the home-based
healthcare function

Strengthening the primary care services function

24Strengthening the function of pharmacies②
（%）
80.0

GE drugs share (Volume)

GE average premiums

60.0
12.4

40.0

12.9

15.0

12.4

16.3

18.3

19.3

18.2

77.4

30.0

18.9

20.0

14.7

23.7

14.7

10.0

20.0
6.4
0.0

0.0

4/10

4/11

3/12

4/12

4/13

3/14

4/14

4/15

3/16

4/16

4/17

GE average premiums

GE drugs share (Volume) The promotion of the use of generic drug（monthly）

3/18（m/y）Aggregate the data from 4 main subsidiaries (AIN PHARMACIEZ, AIN MEDIO, DAICHIKU, ASAHI PHARMACY) Primary care pharmacist instruction fee（No. of times）

93.3

86.8

Inplemented store ratio

80.0

20,00016,00014,76460.0

12,000

31.0

8,000

20.0 3,690

4,000

0.0

0

40.0

4/14

4/15

4/16

Object : 1,018 stores excluding the recent M&A stores© 2018 AIN HOLDINGS INC. All Rights Reserved.

4/17

3/18（m/y）

Exclude the case that only delivery（monthly）（thousand）
Accumlated No.
200（No. of ‘000 times）
171 160

No. of consent form

150

120

94

No. of times

Implemented store ratio

100.0

Accumlated No.

No. of home-based health care（%）

No. of consent form

 Home-based health care（monthly）

100

80

50

40

0

0
3/18（m/y）

5/16

10/16

4/17

10/17

Object : 1,018 stores excluding the recent M&A stores
25

Strengthening the function of pharmacies③
In terms of functions such as promotion of GE use, home-based health care and primary care services, which havebeen demanded by the country and patients, we have accumulated high achievements compared with national
pharmacies. we will focus on strengthening medical cooperation by making full use of the strength of being close to
medical institutions.

 Comparison of results (As of March 2018)
Basic dispensing fee

No. ofstores

１（41）

２（25）

３（20）

Standards
fordispensing
systempremiums

Premiums for GE drug
dispensing systems

１(18)

２(22)

(32)

Japan

%

AIN Group%

No. ofNo. of Homenotification based healthof primary care Over 10
caretimes perpharmacists
year

57,989 51,871

1,770

89.4

3.1

5.3

31.3

28.3

39.8

51.5

24.5

747

43

228

546

163

695

910

716

73.4

4.2

22.4

73.1

16.0

68.3

89.4

70.3

1,018

3,066 16,253 16,436 23,074 29,859

14,217

The group estimated. % of Standards for dispensing system premiums is from the No. of stores that applicable to Basic dispensing fee1

 Medication adjustment support addition（125 pts）
(Requirements)
In the occasion that more than 6 types of internal medicine
prescribed, if the pharmacist make a proposal document tomedical institutions and two or more types of them havedecreased, it is calculated only once a month.

© 2018 AIN HOLDINGS INC. All Rights Reserved.

In 2018 dispensing fee revisions, further collaboration
with medical institutions is required. We will accumulateachievements of medical collaboration such as
Medication adjustment support addition making full useof the strength of being close to medical institutions.
26

Recruiting of Pharmacists
In April 2018, new 431 employees (pharmacists : 279, general staff : 152) joined our company.
We plan to recruit 400-450 pharmacists and 210 general staff in April 2019.
■ The transition of No. of national examination passers and new qualified pharmacists in AIN Group2010（People）
No. of newly qualified
pharmacists hired in
AIN Group
No. of pharmacists’national examination
passers (pass rate)
Rate of newly qualified
pharmacists hired in
AIN Group

2011

2012

2013

2014

2015

2016

2017

2018

2019

97

42

189

251

251

229

375

307

279

3,787

1,455

8,641

8,929

7,312

9,044

11,488

9,479

9,584

400ｰ450-（56.4%） （44.4%） （88.3%） （79.1%） （60.8%） （63.2%） （76.9%） （71.6%） （70.6%）

2.6%
（

-

）

2.9%
（

-

）

2.2%

2.8%

3.4%

（5.7%）（7.0%）（8.0%）

2.5%

3.3%

3.2%

（8.0%） （11.7%） （10.0%）

2.9%
（

-

）

（

-

）

（

-

）

Estimates : based on the result in AIN Group, and data from the Ministry of Health, Labor and Welfare, Council on Pharmaceutical Education.

（People）

700

No. of newly-hired
employees

600

Pharmacists

General staff

500
400-450

400

375

300
200
100
0

189

97

251

251

78

42
27

47

53

28

10

11

12

13

14

307

279

229
93

15

173

174

152

16

17

18

210

19 （Year）（Plan）© 2018 AIN HOLDINGS INC. All Rights Reserved.

27

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

FY4/19plan

YoYchange（¥ million）
Net sales
Gross profit% of net sales

SG&A
expenses% of net sales

Operatingincome% of net sales

Segment
income% of net sales

238,645 239,800
36,03034,500 (1,530)

15.1

14.4

14,034

15,200

5.9

6.3

21,995

1,166

(4.2)

+8.3

8.0

20,000 (2,668) (11.8)

9.5

Figures in the table are rounded down

8.3+¥12.1¥(11.9)billionbillionNew 100
store

Impact ofrevision+0.5

19,300 (2,695) (12.3)

9.2

22,668

1,155

YoYchange(%)¥(4.0) billion
Store Closing in current
and previous year+¥4.9 billion
Full contribution of storesthat opened in previous year

FY4/18results+¥1.1
billion+0.5%

FY4/19plan■ Segment income¥(2.3) billion
Impact of revision+¥6.3 billion¥(1.6) billion

Store Closing in current
and previous year
Full contribution of¥(4.4) billion
stores that opened in
FY4/19previous year andIncrease of labor
plan
contribution of new store
costs and operation
cost by recruitment¥(2.6)
FY4/18and new store
billionopening
results¥(0.6)
billion(11.8)%

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

28

Expansion of AINZ & TULPE①Existing store in Tokyo metropolitan area contributed significantly to the profitability in FY4/18.
Earnings also improve by an increase in the gross margin due to active efforts to develop private
brands and an overhaul of procurement activities.
■ Area verify
Honshu (The main island)

Hokkaido（¥ million）

FY4/17

FY4/18YoYchange(％)

YoYchangeFY4/17

FY4/18YoYchangeYoYchange(％)

8,787
659

+179
+281

+2.1
+74.3

12,775

15,329+2,554+20.0

Segment income

8,608
378

(586)

334

+920

‐

% of net sales

4.4

7.5

‐

‐

‐

2.2

‐

‐

Net sales■ Development of private brands and improvement of gross margin（¥ million）
2,500

Net sales of PB% of PB

31.5%

33.1%

500
0

473

222
1.2%
FY4/14

15

1,616
1,436

861

1,000

37.0%

6.7%

9.0%
6.7%

4.1%

© 2018 AIN HOLDINGS INC. All Rights Reserved.

10
5

2.7%
FY4/15% of PB

1,500

34.6%

35.6%

20

37.3%
% of gross profit

Net sales

2,000

2,430

% of gross profit0

FY4/16

FY4/17

FY4/18

FY4/19 Plan
29

Expansion of AINZ & TULPE②
The group have been decided to open new store in Ikebukuro, Kinshicho and Shibuya until this 2Q
of FY4/19. The group will actively seek to open AINZ & TULPE in the area that can attract numberof customers such as metropolitan area.
Ikebukuro 2 nd store

Kinshicho 2nd store

Shibuya 2nd store

Open

Aug.2018（Plan）

Sep.2018（Plan）

Oct.2018（Plan）

Sales floor

800.3 ㎡

292.9 ㎡

465.1 ㎡（2 floors）

Annual net
sales

1,500 million

700 million

1,500 million© 2018 AIN HOLDINGS INC. All Rights Reserved.

30

Expansion of AINZ & TULPE③
Gross profit has been turn to profitability due to the expansion of net sales, reviews ofprocurement activities and greater operation efficiency in FY4/18. The group also stated its goalof reaching net sales ¥50 billion, gross profit 42% and operating income 7% in FY4/22 throughopen new stores in metropolitan area.
（¥ billion）

Net sales

50.0

Net sales

40.0% of gross profit

31.6

30.0

34.6

31.5

30.0
20.0

20.8

17.9

15.3

13.6

（%）

% of operating income

42.0
37.0

37.3

24.1

27.0

40

50.0

2.5

7.0

3.7

0.0

Net
sales

4/11

4/12

4/13

4/14

30
20

10.0

4/10

50

4/15

4/16

4/17

4/18

4/19

4/20

4/21

10

0
(FY)
4/22

% of gross profit, operating income■ Mid-term plan

13.6 14.8 15.3 16.7 17.9 17.8 20.8 21.3 24.1 27.0 32.0 40.0 50.0

（billion）

No. of
Store

49

53

56

© 2018 AIN HOLDINGS INC. All Rights Reserved.

61

59

56

52

52

48

55

65

80

100

31

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

+¥2.8
Billion+12.0%

Growth of existing
stores

FY4/18results+743

Closed in previous year stores

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.

32

FY4/19 Plan（Consolidated）

FY4/18results

FY4/19plan

YoYchange（¥ million）
Net sales

Gross profit% of net sales

SG&A expenses% of net sales

Operatingincome% of net sales

Ordinary
income% of net sales

268,385 272,870 +4,485
47,99348,04017.9

17.6

28,37019,622

+1.7

+47

+0.1

+¥13.3 billion
New 107
stores

Impact of revision

Full contribution of previous
year’s openings stores

6.4

18,000 (2,129) (10.6)

Figures in the table are rounded down

© 2018 AIN HOLDINGS INC. All Rights Reserved.

6.6Stores closing inprevious year, etc.

Growth of existing stores by
Cosmetic and Drug Store+¥4.4
billion+1.7%

FY4/19plan+7.6

17,500 (2,122) (10.8)

7.5¥(4.2) billion+¥5.6 billion■ Ordinary income+¥0.14 billion
Mail-order, etc.

+¥0.36 billion
Cosmetic and Drug Store

20,129¥(11.9) billion

FY4/18results

11.2

7.3■ Net sales+¥1.6 billion

30,540 +2,170

10.6

YoY
change(%)

FY4/18results

FY4/19plan¥(2.6)
billion¥(2.1)
billion
Impact of(10.6)％
revision,etc.

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

34

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
¥265,003 million As of June 7, 2018
Net sales: ¥268,385 million

Operating income: ¥19,622 million

As of April 30, 2018

Dispensing Pharmacy : ¥238,645 million, Cosmetic and Drug Store : ¥24,117 million,
As of April 30, 2018
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 April 30, 2018

Number of stores

1,077 (1,029 dispensing pharmacies, 48 cosmetic and drug stores) As of April 30, 2018

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

FY4/18 Consolidated
net sales¥268,385 million

Dispensing Pharmacy
88.9%
35

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¥265,003 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 June 7, 2018
© 2018 AIN HOLDINGS INC. All Rights Reserved.

36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/
This document may not be reproduced or distributed to any third party without
prior approval of AIN HOLDINGS INC. This document has been prepared for
information purpose only and does not form part of a solicitation to sell orpurchase any securities. Information contained herein may be changed orrevised without prior notice. This document may contain forecastingstatements as to future results of operations. No forecast statement can be
guaranteed and actual results of operations may differ from those projected.

© 2018 AIN HOLDINGS INC. All Rights Reserved.

37