Consolidated Financial Results for the First Quarter of the Fiscal Year Ending May 15, 2019 [J-GAAP]

Transcription

1 Consolidated Financial Results for the First Quarter of the Fiscal Year Ending May 15, 2019 [J-GAAP] September 18, 2018 Name of listed company: TSURUHA Holdings, Inc. Listed on: Tokyo Stock Exchange, 1st Section Securities code: 3391 URL: Representative: Masashi Horikawa, President and Representative Director Contact: Makoto Murakami, Executive Officer and Chief Administrative Officer TEL: Scheduled date of filing quarterly financial report: September 28, 2018 Scheduled date to start dividends distribution: Supplementary quarterly materials prepared: Yes Quarterly results information meeting held: Yes (for institutional investors and financial analysts) (Figures shown are rounded down to the nearest million yen.) 1. Consolidated financial results for the first quarter ended August 15, 2018 (May 16, 2018 August 15, 2018) (1) Consolidated operating results (Percentage figures show changes from the same period in the previous year.) Net Sales Operating Income Ordinary Income Net Income Attributable to Owners of the Parent Millions of yen % Millions of yen % Millions of yen % Millions of yen % August 15, , , , , August 15, , , , , Note: Comprehensive income: August 15, 2018: 7,416 million yen (-22.8%) August 15, 2017: 9,601 million yen (90.4%) Net Income per Share Diluted Net Income per Share Yen Yen August 15, August 15, (2) Consolidated financial position Total Assets Net Assets Equity Ratio Net Assets per Share Millions of yen Millions of yen % Yen As of August 15, , , , As of May 15, , , , Reference: Equity capital: As of August 15, 2018: 194,869 million yen As of May 15, 2018: 190,847 million yen 2. Dividends Annual Dividends (Yen) First Quarter-end Second Quarter-end Third Quarter-end Year-end Annual Year ended May 15, Year ending May 15, 2019 Year ending May 15, 2019 (Forecast) Note: Revisions to the most recently announced dividend forecast during the period: None

2 3. Consolidated financial forecasts for the year ending May 15, 2019 (May 16, 2018 May 15, 2019) (Percentage figures show changes from the same period in the previous year.) Net Sales Operating Income Ordinary Income Net Income Attributable to Owners of the Parent Net Income per Share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen First six months 369, , , ,790 (1.9) Full year 743, , , , Note: Revisions to the most recently announced earnings forecasts during the period: None Notes (1) Significant changes to subsidiaries during the period (Transfers of specific subsidiaries with changes in the scope of consolidation): None (2) Application of the specific accounting methods for preparing the quarterly consolidated financial statements: None (3) Changes in accounting policies, accounting estimates and restatement of revisions 1) Changes in accounting policies due to revision of accounting standard, etc.: None 2) Changes in accounting policies other than 1): None 3) Changes in accounting estimates: None 4) Restatement of revisions: None (4) Number of shares issued and outstanding (common shares) 1) Number of shares issued and outstanding (including treasury stock) As of August 15, ,203,568 shares As of May 15, ,091,568 shares 2) Number of treasury stock As of August 15, ,038 shares As of May 15, ,038 shares 3) Average number of shares issued and outstanding in each period (quarterly consolidated cumulative period) August 15, ,224,964 shares August 15, ,064,555 shares * This financial results report is outside the scope of audit procedures conducted by certified public accountants or the independent auditor. * Explanation of appropriate use of financial forecasts and other special items This document contains projections of performance based on information currently available. Actual performance may differ from these projections due to changes in the economic environment and other uncertainties. Please refer to page 2 of the supplementary materials for further details about the above financial forecasts.

3 Contents 1. Qualitative information on quarterly financial results... 2 (1) Explanation of consolidated financial results... 2 (2) Explanation of consolidated financial position... 2 (3) Explanation of consolidated financial forecasts and other forward-looking statements Quarterly consolidated financial statements and related notes... 3 (1) Quarterly consolidated balance sheets... 3 (2) Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income... 5 (Quarterly consolidated statements of income)... 5 (Quarterly consolidated statements of comprehensive income)... 6 (3) Notes on quarterly consolidated financial statements... 7 (Notes on premise of a going concern)... 7 (Notes on significant changes in the amount of shareholders equity)... 7 (Additional information)

4 1. Qualitative information on quarterly financial results (1) Explanation of consolidated financial results In the first three months of the current fiscal year (May 16, 2018 to August 15, 2018), the Japanese economy continued to recover at a moderate pace and consumer confidence showed signs of picking up, despite an uncertain outlook in overseas economies, fluctuations in financial markets and other concerns. In the drugstore sector, the operating environment remained challenging, with the pace of consolidation and realignment accelerating, as competition to open stores and reduce prices continued to intensify. Against this backdrop, the TSURUHA Group continued to offer a high level of customer service mainly through advicebased sales, and implemented a number of strategic business initiatives. Specifically, in addition to focusing on advice-based sales of high value-added products that satisfy customer needs, the Group improved convenience for customers through store renovations centered on food sales areas in order to address the shrinking market caused by Japan s aging population and intensifying competition. Also, in the Group s private brands, M s one and Medis one, we overhauled the product lineup to improve efficiency and increased quality by updating products and implementing other initiatives. In store openings, the Group targeted specific areas for multiple store openings as part of its area dominance store-opening strategy and implemented a scrap and build approach for existing stores. In the first quarter under review, the Group opened 32 new stores and closed 25 existing stores. B&D HOLDINGS Co., Ltd. (B&D HD) became a subsidiary of the Company on May 22, As a result, 65 drugstores and dispensing pharmacies in Aichi Prefecture operated by B&D Co., Ltd., a subsidiary of B&D HD, became part of the Group, resulting in a total of 2,003 directly managed stores at the end of the first quarter. TSURUHA Group store openings and closures (Number of stores) End of previous fiscal year Store openings Became subsidiary Store closures Net change End of current period Of which dispensing pharmacies Hokkaido Tohoku Kanto, Koshinetsu (2) Chubu, Kansai Chugoku Shikoku (2) Kyushu Total 1, , (The figure at the end of the current period excludes 19 overseas stores and two franchise stores.) As a result of the above, in the first three months of the current fiscal year, TSURUHA Holdings reported net sales of 190,968 million (up 22.4% year on year), operating income of 11,289 million (up 5.0%), ordinary income of 11,645 million (up 4.3%), and net income attributable to owners of the parent of 7,222 million (up 3.4%). (2) Explanation of consolidated financial position As of the end of the first quarter, assets totaled 358,427 million, an increase of 20,677 million compared with the end of the previous fiscal year. This mainly reflected an increase in assets due to the acquisition of shares in B&D HOLDINGS Co., Ltd. Liabilities totaled 150,093 million, an increase of 16,333 million compared with the end of the previous fiscal year. This mainly reflected an increase in liabilities due to the acquisition of shares in B&D HOLDINGS Co., Ltd. Net assets totaled 208,333 million, an increase of 4,344 million compared with the end of the previous fiscal year. As a result, the equity ratio was 54.4%, down 2.1 points from the previous fiscal year-end. (3) Explanation of consolidated financial forecasts and other forward-looking statements The full-year financial forecasts announced on June 18, 2018 are unchanged

5 2. Quarterly consolidated financial statements and related notes (1) Quarterly consolidated balance sheets (Millions of yen) As of May 15, 2018 As of August 15, 2018 Assets Current assets Cash and deposits 44,262 39,249 Accounts receivable-trade 23,178 23,908 Merchandise 85,019 89,912 Raw materials and supplies Short-term loans receivable 12 2 Others 14,255 13,345 Total current assets 166, ,470 Non-current assets Property, plant and equipment Buildings and structures, net 28,122 34,840 Machinery, equipment and vehicles, net 3 4 Tools, furniture and fixtures, net 9,431 9,857 Land 9,804 11,969 Leased assets, net 3,829 4,145 Construction in progress 2, Total property, plant and equipment 53,365 60,840 Intangible assets Goodwill 28,233 38,739 Software Telephone subscription right Others Total intangible assets 29,251 39,869 Investments and other assets Investment securities 33,837 34,035 Long-term loans receivable Deferred tax assets 4,560 4,412 Guarantee deposits 45,833 48,393 Others 4,200 4,473 Allowance for doubtful accounts (90) (87) Total investments and other assets 88,360 91,247 Total non-current assets 170, ,957 Total assets 337, ,

6 (Millions of yen) As of May 15, 2018 As of August 15, 2018 Liabilities Current liabilities Notes and accounts payable - trade 78,568 88,233 Short-term loans payable - 2,750 Current portion of long-term loans payable 1,206 2,323 Accounts payable-other 11,530 12,130 Lease obligations Income taxes payable 6,993 3,324 Provision for bonuses 4,132 2,359 Provision for directors bonuses Provision for point card certificates 3,841 4,415 Others 4,897 7,429 Total current liabilities 112, ,752 Non-current liabilities Long-term loans payable 2,909 5,953 Lease obligations 4,062 4,427 Deferred tax liabilities 7,239 7,742 Net defined benefit liability 1,892 2,357 Provision for directors retirement benefits Asset retirement obligations 2,491 2,715 Others 2,429 3,145 Total non-current liabilities 21,438 26,341 Total liabilities 133, ,093 Net assets Shareholders equity Capital stock 9,492 9,883 Capital surplus 27,545 27,935 Retained earnings 137, ,823 Treasury stock (5,311) (5,311) Total shareholders equity 168, ,330 Accumulated other comprehensive income Valuation difference on available-for-sale securities 21,924 21,605 Remeasurements of defined benefit plans (73) (67) Total accumulated other comprehensive income 21,850 21,538 Subscription rights to shares 1,128 1,057 Non-controlling interests 12,013 12,406 Total net assets 203, ,333 Total liabilities and net assets 337, ,

7 (2) Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income (Quarterly consolidated statements of income) August 15, 2017 (Millions of yen) August 15, 2018 Net sales 156, ,968 Cost of sales 111, ,128 Gross profit 44,855 53,839 Selling, general and administrative expenses 34,100 42,549 Operating income 10,754 11,289 Non-operating income Interest income Dividends income Gain on donation of equipment Rent income Compensation income Insurance income 1 3 Others Total non-operating income Non-operating expenses Interest expenses Early withdrawal penalty Others 2 0 Total non-operating expenses Ordinary income 11,159 11,645 Extraordinary income Gain on sales of non-current assets - 8 Gain on reversal of subscription rights to shares - 47 Others 4 - Total extraordinary income 4 55 Extraordinary losses Loss on retirement of non-current assets Loss on sales of non-current assets - 35 Others 0 - Total extraordinary losses Income before income taxes 11,118 11,645 Income taxes-current 2,879 2,793 Income taxes-deferred 940 1,109 Total income taxes 3,819 3,902 Income 7,298 7,742 Net income attributable to non-controlling interests Net income attributable to owners of the parent 6,985 7,

8 (Quarterly consolidated statements of comprehensive income) August 15, 2017 (Millions of yen) August 15, 2018 Income 7,298 7,742 Other comprehensive income Valuation difference on available-for-sale securities 2,294 (333) Remeasurements of defined benefit plans 7 6 Total other comprehensive income 2,302 (326) Comprehensive income 9,601 7,416 (Breakdown of comprehensive income) Comprehensive income attributable to owners of the parent 9,288 6,910 Comprehensive income attributable to non-controlling interests

9 (3) Notes on quarterly consolidated financial statements (Notes on premise of a going concern) There is no related information. (Notes on significant changes in the amount of shareholders equity) There is no related information. (Additional information) (Application of Partial Amendments to Accounting Standard for Tax Effect Accounting ) Effective from the first quarter of the current fiscal year, the Company has applied Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ Statement No. 28, February 16, 2018). As a result, the Company now classifies deferred tax assets as investments and other assets, and deferred tax liabilities as non-current liabilities