Medipal : Summary of Consolidated Financial Statements for the Interim Period of the Fiscal Year Ending March 31, 2017

October 31, 2016 These financial statements have been prepared for reference only in accordance with accounting principles and practices generally accepted in Japan.

Code number: 7459 http://www.medipal.co.jp

Representative: Shuichi Watanabe, President and CEO Phone: +81-3-3517-5171 Contact: Mamoru Tsuchishio, Manager of Corporate Communications Department

Filing of Quarterly Report (scheduled): November 11, 2016

Start of Distribution of Dividends (scheduled): December 2, 2016

Preparation of Supplementary Materials for the Quarterly Financial Results: Yes

Presentation Meeting for Quarterly Financial Results: Yes (For institutional investors and analysts)

(All amounts are rounded down to the nearest million yen.)

1. Consolidated Results for the Interim Period of the Fiscal Year Ending March 31, 2017 (April 1, 2016 to September 30, 2016)

2. Sales and Income (Percentages represent change compared with the corresponding period of the previous fiscal year.)

   Net sales (¥ million)	Year-on-year change (%)	Operating income (¥ million)	Year-on-year change (%)	Ordinary income (¥ million)	Year-on-year change (%)
   Six months ended September 30, 2016 Six months ended September 30, 2015	1,530,406 1,485,725	3.0 5.8	20,836 18,441	13.0 26.8	26,908 24,384	10.4 23.3

   Note: Comprehensive income: Six months ended September 30, 2016: ¥16,370 million (+15.5%);

   Six months ended September 30, 2015: ¥14,171 million (-27.8%)

   Net income attributable to owners of the parent (¥ million)	Year-on-year change (%)	Earnings per share (¥)	Earnings per share (diluted) (¥)
   Six months ended September 30, 2016 Six months ended September 30, 2015	14,066 12,636	11.3 23.0	62.12 55.80	- -

3. Financial Position

4. Total assets (¥ million)	Net assets (¥ million)	Net worth ratio (%)
   As of September 30, 2016 As of March 31, 2016	1,487,791 1,497,310	501,847 488,328	28.6 27.7

   (Reference) Net worth: As of September 30, 2016: ¥425,509 million; As of March 31, 2016: ¥414,939 million

5. Cash Dividends

   Dividends per share (¥)
   1st Quarter	2nd Quarter	3rd Quarter	Year-end	Full year
   Year ended March 31, 2016	-	13.00	-	15.00	28.00
   Year ending March 31, 2017	-	15.00
   Year ending March 31, 2017 (est.)	-	15.00	30.00

   Note: Revisions to projected dividends during the second quarter: None

6. Forecast of Consolidated Results for the Fiscal Year Ending March 31, 2017 (April 1, 2016 - March 31, 2017)

   (Percentages represent change compared to the previous fiscal year)

   Net sales		Operating income		Ordinary income		Net income attributable to owners of the parent		Earnings per share
   (¥ million)	(%)	(¥ million)	(%)	(¥ million)	(%)	(¥ million)	(%)	(¥)
   Fiscal year	3,090,000	2.0	40,000	(5.4)	53,500	(3.0)	30,500	(0.9)	134.69

   Note: Revisions to forecast of consolidated results during the second quarter: Yes

   *Notes

7. Changes in significant subsidiaries during the period (changes in specified subsidiaries during the period accompanied by change in scope of consolidation): None

   New: - companies ( - ) Excluded: - companies ( - )

8. Application of accounting methods specific to preparation of the quarterly consolidated financial statements:

   None

9. Changes in accounting policies and changes in/restatements of accounting estimates

10. Changes in accounting policies due to revisions of accounting standards: Yes

11. Changes in accounting policies other than (a) above: None

12. Changes in accounting estimates: None

13. Restatements: None

    Note: For details, please see "2. Summary Information (Notes) (3) Summary of Changes in Accounting Policies and Changes in/Restatements of Accounting Estimates" on page 5 of the attached materials.

    Six months ended September 30, 2016	244,524,496	Year ended March 31, 2016	244,524,496
    Six months ended September 30, 2016	18,085,433	Year ended March 31, 2016	18,085,160
    Six months ended September 30, 2016	226,439,189	Six months ended September 30, 2015	226,440,971

14. Number of shares issued and outstanding (common stock)

15. ) Number of shares at the end of the period (including treasury stock)

16. ) Number of treasury shares at the end of the period

17. ) Average number of shares outstanding (cumulative with earlier quarters)

18. *Items Regarding the Implementation of Quarterly Review Procedures

    This summary of quarterly consolidated results is exempt from the quarterly review procedures based on the Financial Instruments and Exchange Act. Review procedures for the quarterly financial statements based on the Financial Instruments and Exchange Act had not been completed at the time of disclosure of this summary of quarterly consolidated results.

    *Cautionary Remarks Regarding Proper Use of Projected Results and Other Items

    The forecast of consolidated results announced on May 16, 2016 has been revised. For details, please refer to the "Notice of "Revision to Full-Year Results Forecast" released on October 31, 2016.

    Table of Contents of Attached Materials

19. Qualitative Information on Quarterly Financial Results

20. Description of Results of Operations

21. Description of Financial Position

22. Description of Future Outlook including Projected Consolidated Results

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1. Summary Information (Notes)

2. Summary of Changes in Significant Subsidiaries during the Period

3. Summary of Accounting Methods Specific to Preparation of the Quarterly Consolidated Financial Statements

4. Summary of Changes in Accounting Policies and Changes in/Restatements of Accounting Estimates

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1. Quarterly Consolidated Financial Statements

2. Quarterly Consolidated Balance Sheets

3. Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income

4. Quarterly Consolidated Statements of Cash Flows

5. Notes to the Quarterly Consolidated Financial Statements (Notes Regarding Assumptions of Going Concern)

6. Quarterly Consolidated Statements of Income

   Quarterly Consolidated Statements of Comprehensive Income

   (Notes in the Event of Significant Changes in Shareholders' Equity) (Segment Information)

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1

1. Qualitative Information on Quarterly Financial Results
1. Description of Results of Operations

   During the interim period of the fiscal year ending March 31, 2017, the six months ended September 30, 2016, Japan's economy recovered gradually due to factors including the effects of the government's economic policies and improvement in employment and income, despite concerns about a downturn in overseas economies.

   In these economic conditions, the MEDIPAL Group formulated the "2019 MEDIPAL Medium-Term Vision: Change the Oroshi next - Innovate and Create," which covers the three years starting April 1, 2016 and is aimed at a new oroshi business model that benefits society with distribution in the fields of medical care, health and beauty. The MEDIPAL Group will expand its earnings foundation and achieve the sustainable growth of the Group by further increasing the efficiency and enhancing the functions of existing businesses, continuing to expand new businesses using its nationwide infrastructure and human resources, and developing business in growth fields by making full use of the functions and resources of Group companies.

   As part of this vision, MEDIPAL FOODS CORPORATION (Chuo-ku, Sapporo-shi), which conducts the food processing raw materials wholesale business, was established in April 2016, and SPLine Corporation (Chuo-ku, Tokyo), which develops plans and solutions for the distribution of specialty pharmaceuticals (such as orphan drugs), was established in May 2016. In June 2016, MEDIPAL HOLDINGS concluded a capital and business tie-up with MTI Ltd. (Shinjuku-ku, Tokyo), a mobile app development firm with strengths in the field of digital healthcare, and in July, PRESUSCUBE Corporation (Minato-ku, Tokyo), which conducts businesses including management support services for health insurance pharmacies, was established as a joint venture.

   For the interim period, consolidated net sales were ¥1,530,406 million (a 3.0 percent increase compared with the same period of the previous fiscal year), operating income was ¥20,836 million (a 13.0 percent increase), ordinary income was ¥26,908 million (a 10.4 percent increase) and net income attributable to owners of the parent was ¥14,066 million (an 11.3 percent increase).

   A summary of results by principal business segment follows below.

   Prescription Pharmaceutical Wholesale Business

   Despite the MEDIPAL Group's focus on sales of generic drugs, for which demand is increasing, and on sales of new drugs, conditions for sales of prescription pharmaceuticals were challenging due to the impact of National Health Insurance (NHI) drug price reductions implemented in April 2016 and a decline in sales due to the tapering off of demand for new hepatitis C treatments, which had expanded in the previous year. On the other hand, the MEDIPAL Group worked to secure profits by negotiating purchase prices for individual pharmaceutical products and negotiating selling prices with customers based on those prices.

   In this business, the MEDIPAL Group has been taking various measures to fully utilize its wholesale functions, with the idea of optimizing and raising the efficiency of the overall supply chain from pharmaceutical manufacturers to patients as social infrastructure that supports safe, secure medical treatment.

   In strengthening its distribution infrastructure, the MEDIPAL Group is taking steps for the nationwide expansion of high-quality, high-function, and disaster-ready ALCs.1 Including the next-generation Fukuoka ALC (Higashi-ku, Fukuoka-shi), which was completed in June 2016, ALCs are currently in operation in seven major metropolitan areas nationwide. Two additional ALCs in Misato-shi, Saitama Prefecture and Tsukubo-gun, Okayama Prefecture are scheduled to begin operation at the end of the fiscal year ending March 31, 2017. The MEDIPAL Group is also establishing FLCs2 in areas where ALCs are already operating. In addition, the MEDIPAL Group is progressively rolling out PRESUS®,3 a new operations support system it developed for dispensing pharmacies. This system offers advantages such as prevention of stock-outs and improvement of operating efficiency through linkage with ALCs.

   To strengthen sales, the MEDIPAL Group is also taking a new approach to promotion activities, using approximately 1,800 highly skilled and knowledgeable Assist Representatives (ARs)4 with medical representative (MR) certification.

   In addition, the MEDIPAL Group is operating a new business in which it provides certain Post-Marketing Surveillance (PMS) services under contract with pharmaceutical companies using its nationwide operating bases and its ARs and other human resources.

   As a result, sales of the Prescription Pharmaceutical Wholesale Business were ¥1,026,949 million (a 1.1 percent decrease compared with the same period of the previous fiscal year), and operating income was ¥9,139 million (a 1.5 percent increase).

   Definition of Terms:

2. ALC (Area Logistics Center): A state-of-the-art logistics center that supplies prescription pharmaceuticals, medical supplies and other items primarily to dispensing pharmacies, hospitals and clinics.

3. FLC (Front Logistics Center): A combined sales and logistics base that is located near customers and supports stable supplies of products in coordination with ALCs.

4. 2