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Fiscal year ending May 2023Summary of financial results for the second quarter (Japanese standards) (consolidated)

December 20, 2022

Listed company name

Tsuruha Holdings Co., Ltd.

Listed exchange東

Code number

3391

URLhttp://www.tsuruha-hd.com

Representative

(Title)

President and CEO

(family name)Jun Tsuruha

Contact person

(Title)

Executive Officer General Manager of Administration Headquarters

(family name)Makoto Murakami

TEL011-783-2755

Scheduled quarterly report submission date

December 28, 2022

Scheduled payment start date

January 6, 2023

Whether or not supplementary explanatory materials for quarterly financial results have been created:Yes

Whether or not a quarterly Financial results announcement is held:Yes

(For institutional investors and analysts)

(Rounded down to the nearest million yen)

1. Consolidated financial results for the second quarter of the fiscal year ending May 2023 (May 16, 2022 to November 15, 2022)

(1) Consolidated business results (cumulative)

(% Display is the rate of increase / decrease from the same quarter of the previous year)

	amount of sales		Operating income		Ordinary profit		Attribution to the shareholders of the parent company Quarterly net income
	One million yen	％	One million yen	％	One million yen	％	One million yen	％
Second Quarter of the Fiscal Year Ending May 2023	484,106	4.7	24,700	8.8	24,820	9.7	14,631	14.9
Second Quarter of the Fiscal Year Ending May 2022	462,512	2.0	22,709	△18.9	22,622	△20.1	12,739	△23.2

(Note) Comprehensive income

Second Quarter of the Fiscal Year Ending May 2023

20,829

One million yen

（31.8％）

Second Quarter of the Fiscal Year Ending May 2022

15,809

One million yen

（△21.6％）

	Per share Quarterly net income	After adjusting for potential stock Per share Quarterly net income
	Yen	Yen
Second Quarter of the Fiscal Year Ending May 2023	301.27	300.40
Second Quarter of the Fiscal Year Ending May 2022	262.46	261.62

(2) Consolidated financial position

	Total assets	Net worth	Capital adequacy ratio	Net assets per share
	One million yen	One million yen	％	Yen
Second Quarter of the Fiscal Year Ending May 2023	530,850	299,661	51.4	5,618.66
May 2022	562,363	284,046	45.9	5,314.48

(Reference) Equity

Second Quarter of the Fiscal Year Ending May 2023

273,076

One million yen

May 2022

258,035

One million yen

2. 2. Dividend status

	Annual dividend
	End of first quarter	End of second quarter	End of third quarter	Term end	total
	Yen	Yen	Yen	Yen	Yen
May 2022	－	83.50	－	83.50	167.00
Fiscal year ending May 2023	－	116.50
Fiscal Year Ending May 2023 (Forecast)			－	116.50	233.00

(Note) Whether or not there is any revision from the recently announced dividend forecast:Nothing

3. Consolidated earnings forecast for the fiscal year ending May 2023 (May 16, 2022 to May 15, 2023)

(% Display is the rate of increase / decrease from the previous period)

	amount of sales	Operating income	Ordinary profit	Attribution to parent company shareholders Net income	Per share Net income
	One million yen	％	One million yen	％	One million yen	％	One million yen	％	Yen
Full year	968,800	5.8	42,700	5.3	42,571	6.3	22,640	5.9	466.29

amount of sales

Operating income

Ordinary profit

Attribution to parent company shareholders

Net income

Per share

Net income

One million yen

％

One million yen

％

One million yen

％

One million yen

％

Yen

Full year

968,800

5.8

42,700

5.3

42,571

6.3

22,640

5.9

466.29

(Note) Whether or not there is any revision from the latest announced business forecast:Nothing

* Notes

(1) Changes in significant subsidiaries during the current quarterly consolidated cumulative period (changes in specified subsidiaries due to changes in the scope of consolidation):Nothing

(2) Application of accounting treatment specific to the preparation of quarterly consolidated financial statements:Yes

(3) Changes in accounting policies, changes in accounting estimates, and restatements of revisions

① Changes in accounting policies due to revisions to accounting standards, etc .:Nothing

(2) Changes in accounting policies other than (1):Nothing

③ Change of accounting estimateNothing

④ Correction redisplayNothing

(4) Number of issued shares (common stock)

① Number of issued shares at the end of the period (including treasury stock)	2Q of May 2023	49,488,468	stock	May 2022	49,439,968	stock
② Number of treasury stock at the end of the period	2Q of May 2023	886,721	stock	May 2022	886,655	stock
③ Average number of shares during the period (cumulative quarterly)	2Q of May 2023	48,566,414	stock	2Q of May 2022	48,539,312	stock

* Quarterly financial statements are not subject to quarterly reviews by certified accountants or audit corporations.

* Explanation of proper use of business forecasts and other special notes

The forecast figures contained in this document are forecasts based on currently available information and contain many uncertainties. Actual results may differ from the above figures due to changes in business conditions. Please refer to page 3 of the attached materials for matters related to the above forecasts.

○ Contents of attached materials

1. Qualitative Information on Quarterly Financial Results ……………………………………………………………………………………	2
(1) Explanation of operating results ………………………………………………………………………	2
(2) Explanation of financial position ……………………………………………………………………………………………	2
(3) Explanation of future forecast information such as consolidated earnings forecasts ………………………………………………………………	3
2. Quarterly Consolidated Financial Statements and Major Notes ……………………………………………………………………………………	4
(1) Quarterly Consolidated Balance Sheet ………………………………………………………………………………………	4
(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income	6
Quarterly Consolidated Income Statement
Second Quarter Consolidated Cumulative Period ………………………………………………………………………	6
Quarterly Consolidated Statement of Comprehensive Income
Second Quarter Consolidated Cumulative Period ………………………………………………………………………	7
(3) Quarterly Consolidated Statement of Cash Flows ……………………………………………………………………	8
(4) Notes to Quarterly Consolidated Financial Statements ……………………………………………………………………	10
(Note regarding going concern assumption) ………………………………………………………………………………………	10
(Note when there is a significant change in the amount of shareholders' equity) …………………………………………………………	10
(Application of special accounting treatment to the preparation of quarterly consolidated financial statements)	10

1. Qualitative information on quarterly financial results

(1) Explanation of operating results

During the second quarter of the current consolidated cumulative period (May 16, 2022 to November 15, 2022), the economic situation will continue to be affected by the new coronavirus infection, but various restrictions on movement will be eased and the flow of people will recover. However, the economy showed signs of a gradual recovery. However, there are downside risks due to the deterioration of the situation in Ukraine, soaring resource prices, fluctuations in the financial and capital markets, etc., and income growth is sluggish amid continued price increases. It is difficult to predict the situation for the time being. In the drugstore industry, competitors are continuing to open more stores in pursuit of improved convenience while taking advantage of the price advantage compared to other formats, and the business environment surrounding the Company continues to be severe. increase.

Under these circumstances, the Group aims to achieve the goals of the new medium-term management plan. The store strategy is to improve the accuracy of store openings and promote renovations. We have worked to increase the sales composition ratio, and in the DX strategy, we have been working on sales promotion utilization of customer data, development of our own payment service, and IT system development. In addition, we have worked to improve profitability and reduce selling, general and administrative expenses by establishing a performance management system.

With regard to store development, we worked to further strengthen our dominance in existing areas and proceeded with the renovation and closure of unprofitable stores in order to strengthen competitiveness. From the beginning of the fiscal year, we opened 76 new stores, took over the business of one store, and closed 48 stores. . As a result, the number of group stores as of the end the 2nd quarter was 2,551 directly managed stores.

The store openings and closings of the Group are as follows (unit: store)

	End of the previous fiscal year Number of stores	branch store	Subsidiary etc.	closed	Net increase	Number of stores at the end of the second quarter	home Dispensing pharmacy
Hokkaido	422	9	－	12	△3	419	117
East and North	570	19	1	12	8	578	132
Kanto Koshinetsu	520	13	－	9	4	524	211
Chubu / Kansai	247	9	－	5	4	251	141
China	326	14	－	1	13	339	115
Shikoku	220	6	－	－	6	226	66
Kyushu / Okinawa	217	6	－	9	△3	214	34
Domestic store total	2,522	76	1	48	29	2,551	816

In addition to the above, we have 17 overseas stores and 6 franchise stores.

As a result, the performance for the second quarter consolidated cumulative period was 484,106 million yen in sales (up 4.7% year-on-year), 24.7 billion yen in operating income (up 8.8% year-on-year), and 24,820 million yen in ordinary income. ¥14,631 million (up 14.9% year on year). .

(2) Explanation of financial position

(Status of assets, liabilities and net assets)

Total assets at the end of the current second quarter consolidated accounting period decreased by 31,513 million yen from the end of the previous consolidated fiscal year to 530,850 million yen.

Total liabilities decreased by 47,128 million yen from the end of the previous consolidated fiscal year to 231,189 million yen.

The main reason for the decrease in total assets and total liabilities was the decrease in cash and deposits and accounts payable, etc., due to the fact that the end of the previous consolidated fiscal year was a holiday for financial institutions.

Total net assets increased by 15,615 million yen from the end of the previous consolidated fiscal year to 299,661 million yen.

As a result of the above, the equity ratio increased by 5.5 percentage points to 51.4%.

(Cash flow situation)

Cash and cash equivalents (hereinafter referred to as “funds”) for the current second quarter consolidated cumulative period decreased by 44,698 million yen from the end of the previous consolidated fiscal year to 82,194 million yen. The main reason for the decrease in funds was a decrease in trade payables due to the fact that the end of the previous consolidated fiscal year was a holiday for financial institutions.

The status of each cash flow and their factors in the current second quarter consolidated cumulative period are as follows.

(Cash flow from operating activities)

Net cash used in operating activities for the current second quarter consolidated cumulative period was 19,710 million yen (down 25.5% year-on-year). This was mainly due to positive factors such as income before income taxes of ¥25,460 million and depreciation of ¥5,640 million, as the end of the previous consolidated fiscal year was a holiday for financial institutions. This was due to the negative factors of 46,642 million yen in decrease in trade payables and 4,388 million yen in income taxes paid.

(Cash flow from investment activities)

Funds used for investment activities during the current second quarter consolidated cumulative period amounted to 16,291 million yen (up 15.5% year on year). This was mainly due to expenditure of 13,091 million yen for the purchase of property, plant and equipment associated with new store openings and expenditure of 4,038 million yen for guarantee deposits.

(Cash flow from financing activities)

Funds used for financing activities during the current second quarter consolidated cumulative period were 8,696 million yen (up 1.5% year-on-year). This was mainly due to cash dividends paid of 4,054 million yen and repayment of long-term loans payable of 3,600 million yen.

(3) Explanation of future forecast information such as consolidated earnings forecasts

There is no change in the full-year earnings forecast announced on June 21, 2022.

2. 2. Quarterly consolidated financial statements and main notes

(1) Quarterly consolidated balance sheet

		(Unit: million yen)
	Previous consolidated fiscal year (May 15, 2022)	Current second quarter consolidated accounting period (November 15, 2022)
Assets
current assets
Cash and deposits	127,026	82,327
accounts receivable	49,155	44,010
Product	132,314	138,148
Raw materials and supplies	121	82
Short-term loans receivable	1	1
others	19,895	18,161
Total current assets	328,514	282,732
Fixed asset
Tangible fixed assets
Buildings and structures (net)	52,948	58,814
Mechanical equipment and carriers (net amount)	0	0
Tools, utensils and equipment (net)	14,702	15,511
land	14,435	14,504
Lease assets (net amount)	7,098	8,044
Construction in progress	2,113	2,164
Total property, plant and equipment	91,299	99,040
Intangible fixed assets
Goodwill	34,281	32,218
Software	2,494	2,936
Telephone subscription right	104	104
others	1,145	1,293
Total intangible assets	38,025	36,552
Investments and other assets
Investment securities	26,723	32,793
Long-term loan	9	9
Deferred tax asset	6,647	6,508
Deposit deposit	65,481	67,652
others	5,723	5,623
Allowance for doubtful accounts	△62	△62
Total investment and other assets	104,523	112,525
Total fixed assets	233,849	248,118
Total assets	562,363	530,850

		(Unit: million yen)
	Previous consolidated fiscal year (May 15, 2022)	Current second quarter consolidated accounting period (November 15, 2022)
Debt section
Current Liabilities
Accounts payable	155,660	109,017
Long-term borrowing scheduled to be repaid within one year	7,200	10,700
Accounts payable	20,347	16,560
Lease debt	551	599
Income taxes payable, etc.	5,278	9,827
Contract liability	10,418	12,378
Bonus reserve	5,996	6,240
Reserve for directors' bonuses	680	323
Point reserve	291	293
others	7,188	5,187
Total current liabilities	213,613	171,126
Fixed liabilities
Long-term borrowing	39,475	32,375
Lease debt	8,294	9,355
Deferred tax liability	5,204	6,925
Retirement Benefit Revenue	4,119	3,049
Asset retirement obligations	3,847	3,976
others	3,763	4,380
Total fixed liabilities	64,704	60,062
Total debt	278,317	231,189
Of Net Assets
Shareholders' equity
Capital	11,322	11,433
Capital surplus	29,375	29,486
an earned surplus	205,714	216,291
Treasury stock	△5,312	△5,313
Total shareholders' equity	241,098	251,897
Accumulated other comprehensive income
Valuation difference on other securities	16,988	21,214
Accumulated adjustment for retirement benefits	△52	△35
Total other comprehensive income	16,936	21,178
Stock acquisition right	2,269	1,627
Non-controlling interests	23,740	24,957
Total net assets	284,046	299,661
Total liabilities and net assets	562,363	530,850

(2) Quarterly consolidated income statement and quarterly consolidated income statement

(Quarterly consolidated income statement)

(Second quarter consolidated cumulative period)

		(Unit: million yen)
	Previous second quarter consolidated cumulative period (Own May 16, 2021 To November 15, 2021)	Second quarter consolidated cumulative period (From May 16, 2022 To November 15, 2022)
amount of sales	462,512	484,106
Cost of sales	325,695	338,767
Gross profit	136,817	145,339
Selling, general and administrative expenses	114,107	120,638
Operating income	22,709	24,700
Non-operating income
Interest income	67	63
Dividend income	180	186
Equipment donations	350	280
Rent received	114	118
Compensation received	191	24
Insurance money received	62	24
others	234	239
Total non-operating income	1,201	937
Non-operating expenses
Interest expense	356	546
Premature cancellation penalty	261	133
Closed store related expenses	472	75
others	197	61
Total non-operating expenses	1,288	817
Ordinary profit	22,622	24,820
Extraordinary benefit
Gain on sales of fixed assets	0	26
Gain on reversal of stock acquisition rights	－	801
Subsidy income	29	－
others	0	－
Total extraordinary profit	30	827
Extraordinary loss
Loss on retirement of fixed assets	97	24
Impairment loss	22	110
Loss due to disaster	－	52
Total extraordinary loss	119	187
Income before tax adjustment	22,534	25,460
Income Taxes	8,225	8,885
Quarterly net income	14,308	16,574
Quarterly net income attributable to non-controlling interests	1,569	1,943
Quarterly net income attributable to owners of the parent company	12,739	14,631

(Quarterly Consolidated Comprehensive Income Statement)

(Second quarter consolidated cumulative period)

		(Unit: million yen)
	Previous second quarter consolidated cumulative period (Own May 16, 2021 To November 15, 2021)	Second quarter consolidated cumulative period (From May 16, 2022 To November 15, 2022)
Quarterly net income	14,308	16,574
Other comprehensive income
Valuation difference on other securities	1,460	4,236
Adjustment amount for retirement benefits	39	17
Total other comprehensive income	1,500	4,254
Quarterly comprehensive income	15,809	20,829
(breakdown)
Quarterly comprehensive income for parent company shareholders	14,212	18,873
Quarterly comprehensive income for non-controlling interests	1,596	1,955

(3) Quarterly Consolidated Statement of Cash Flows

		(Unit: million yen)
	Previous second quarter consolidated cumulative period (Own May 16, 2021 To November 15, 2021)	Second quarter consolidated cumulative period (From May 16, 2022 To November 15, 2022)
Cash flow from operating activities
Income before tax adjustment	22,534	25,460
Depreciation	4,641	5,640
Impairment loss	22	110
Loss due to disaster	-	52
Amortization of goodwill	2,158	2,163
Increase (decrease) in allowance for doubtful accounts	△7	-
Increase (decrease) in provision for bonuses	617	243
Increase (decrease) in reserve for directors' bonuses	△246	△357
Increase (decrease) in net defined benefit liability	173	△1,069
Increase (decrease) in accrued points	△4,113	2
Interest and dividend income	△247	△249
Compensation received	△191	△24
Insurance money received	△62	△24
Interest expense	356	546
Equipment donations	△350	△280
Loss on retirement of fixed assets	97	24
Loss on sales of fixed assets (△ indicates gain)	△0	△26
Gain on reversal of stock acquisition rights	－	△801
Decrease (increase) in trade receivables	10,015	5,145
Decrease (increase) in inventories	△2,532	△5,795
Increase (decrease) in accounts payable	△50,715	△46,642
Increase (decrease) in contract liabilities	7,648	1,959
Increase (decrease) in accrued consumption tax, etc.	△1,885	69
others	△4,716	△1,161
subtotal	△16,806	△15,016
Amount of interest and dividends received	181	188
Amount of compensation received	191	24
Amount of insurance money received	62	24
Amount of interest paid	△356	△542
Amount of corporate tax, etc. paid	△9,744	△4,388
Cash flow from operating activities	△26,471	△19,710

		(Unit: million yen)
	Previous second quarter consolidated cumulative period (Own May 16, 2021 To November 15, 2021)	Second quarter consolidated cumulative period (From May 16, 2022 To November 15, 2022)
Cash flow from investing activities
Expenditure from time deposits	△0	△0
Expenditure for acquisition of property, plant and equipment	△10,529	△13,091
Proceeds from sales of property, plant and equipment	8	103
Expenditure for acquisition of software	△592	△955
Payments for acquisition of investment securities	△163	-
Proceeds from sales of investment securities	28	18
expenditure on loans	△3	△0
Income from loan collection	2	7
Payment of security deposit	△4,440	△4,038
Return of security deposit	1,724	1,917
others	△134	△250
Cash flow from investing activities	△14,100	△16,291
Cash flow from financing activities
Expenditure for repayment of long-term borrowings	△3,600	△3,600
Expenditure for repayment of lease obligations	△261	△304
Proceeds from issuance of new shares	1	1
Payment for acquisition of treasury stock	△0	△0
Dividend payment amount	△4,052	△4,054
Amount of dividends paid to non-controlling shareholders	△652	△738
Cash flow from financing activities	△8,565	△8,696
Increase (decrease) in cash and cash equivalents	△49,137	△44,698
Beginning balance of cash and cash equivalents	116,398	126,892
Quarterly balance of cash and cash equivalents	67,260	82,194

(4) Notes to Quarterly Consolidated Financial Statements

(Notes on going concern assumption)

Not applicable.

(Note when there is a significant change in the amount of shareholders' equity)

Not applicable.

(Application of special accounting treatment to the preparation of quarterly consolidated financial statements)

(Calculation of tax costs)

Tax expenses are calculated by reasonably estimating the effective tax rate after applying tax effect accounting to income before income taxes for the consolidated fiscal year including the second quarter of the fiscal year under review, and multiplying quarterly net income before income taxes by the estimated effective tax rate. is calculated.

However, if the calculation of tax costs using the estimated effective tax rate results in a significantly unreasonable result, the statutory effective tax rate is used.

The amount of corporate tax adjustment is included in the corporate tax.