Consolidated Financial Results

for the Six Months Ended August 31, 2021

[Japanese GAAP]

October 6, 2021

Company name: WELCIA HOLDINGS CO., LTD.

Stock exchange listing: Tokyo Stock Exchange

Code number: 3141

URL: https://www.welcia.co.jp/

Representative: Tadahisa Matsumoto, President and Representative Director

Contact: Norimasa Sato, Vice President, Director, Executive Officer and Chief Financial Officer

Phone: +81-3-5207-5878

Scheduled date of filing quarterly securities report: October 6, 2021

Scheduled date of commencing dividend payments: November 5, 2021

Availability of supplementary briefing material on quarterly financial results: Available

Schedule of quarterly financial results briefing session: Scheduled (for institutional investors)

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Six Months Ended August 31, 2021 (March 1, 2021 - August 31, 2021)

(1) Consolidated Operating Results (cumulative)

(% indicates changes from the previous corresponding period.)

Net sales

Operating income

Ordinary income

Net income

attributable to

owners of parent

Six months ended

Million yen

%

Million yen

%

Million yen

%

Million yen

%

August 31, 2021

508,295

6.6

22,735

(14.1)

25,145

(9.8)

15,527

(10.3)

August 31, 2020

476,656

11.5

26,481

44.0

27,886

42.0

17,300

45.9

(Note) Comprehensive income: Six months ended August 31, 2021: ¥15,495 million [(10.8)%]

Six months ended August 31, 2020: ¥17,378 million [47.9%]

Net income

Diluted net income

per share

per share

Six months ended

Yen

Yen

August 31, 2021

74.58

74.52

August 31, 2020

82.80

82.72

(Note) A two-for-one stock split of the Company's common stock was executed on September 1, 2020. "Net income per share" and "diluted net income per share" are calculated assuming that the stock split was executed at the beginning of the fiscal year ended February 28, 2021.

(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

Million yen

Million yen

%

As of August 31, 2021

424,680

194,247

45.5

As of February 28, 2021

435,685

180,351

41.2

(Reference) Equity: As of August 31, 2021: ¥193,063 million As of February 28, 2021: ¥179,490 million

2. Dividends

Annual dividends

1st quarter-end

2nd quarter-end

3rd quarter-end

Year-end

Total

Fiscal year ended

Yen

Yen

Yen

Yen

Yen

-

27.00

-

15.00

-

February 28, 2021

Fiscal year ending

-

15.00

February 28, 2022

Fiscal year ending

February 28, 2022

-

15.00

30.00

(Forecast)

(Notes) 1. Revision to the forecast for dividends announced most recently: None

2. A two-for-one stock split of the Company's common stock was executed on September 1, 2020. The figure for the "2nd quarter-end" of the fiscal year ended February 28, 2021 is the actual dividend amount paid before the stock split was executed. The annual dividend for the fiscal year ended February 28, 2021 is not presented, because it is impossible to simply aggregate the amounts for each quarter-end due to the stock split. In pre-split terms, the year-end dividend would come to ¥30, making the annual dividend for the year ¥57.

3. Consolidated Financial Results Forecast for the Fiscal Year Ending February 28, 2022 (March 1, 2021 - February 28, 2022)

(% indicates changes from the previous corresponding period.)

Net income

Net income

Net sales

Operating income

Ordinary income

attributable to owners

per share

of parent

Full year

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

1,021,000

7.5

44,300

3.1

47,600

3.9

27,000

(3.6)

129.79

(Note) Revision to the financial results forecast announced most recently: None

* Notes:

(1) Changes in significant subsidiaries during the period under review: None (Changes in specified subsidiaries resulting in changes in scope of consolidation):

Newly included: - (

), Excluded: - (

)

  1. Accounting methods adopted particularly for the preparation of quarterly consolidated financial statements: None
  2. Changes in accounting policies, changes in accounting estimates and retrospective restatement
    1. Changes in accounting policies due to the revision of accounting standards: None
    2. Changes in accounting policies other than 1) above: None
    3. Changes in accounting estimates: None
    4. Retrospective restatement: None
  4. Total number of issued and outstanding shares (common shares)
    1. Total number of issued and outstanding shares at the end of the period (including treasury stock):

August 31, 2021:

209,633,676 shares

February 28, 2021:

209,633,676 shares

2) Total number of treasury stock at the end of the period:

August 31, 2021:

1,270,204 shares

February 28, 2021:

1,606,772 shares

3) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year):

Six months ended August 31, 2021:

208,189,249 shares

Six months ended August 31, 2020:

208,949,421 shares

(Notes) 1. The number of shares of the Company held in the Employees' Stock Ownership ESOP Trust (February 28, 2021: 1,050,200 shares; August 31, 2021: 817,300 shares) and the number of shares of the Company held in the Directors' Remuneration BIP Trust (February 28, 2021: 502,238 shares; August 31, 2021: 440,442 shares) were included in the total number of treasury stock at the end of the period. The number of shares of the Company held in the Employees' Stock Ownership ESOP Trust and the Directors' Remuneration BIP Trust, was included in the number of treasury stock, which was to be deducted from the calculation of the average number of shares outstanding during the period (August 31, 2020: 628,432 shares; August 31, 2021: 1,419,638 shares).

2. A two-for-one stock split of the Company's common stock was executed on September 1, 2020. The figures for the "total number of issued and outstanding shares (common shares)" are calculated assuming that the stock split was executed at the beginning of the fiscal year ended February 28, 2021.

* These quarterly consolidated financial results are outside the scope of quarterly review by certified public accountants or an audit firm.

  • Explanation of the proper use of financial results forecast and other notes
    The earnings forecasts and other forward-looking statements provided herein are based on information available to the Company and certain assumptions deemed reasonable, and the Company does not promise the achievement of those forecasts. Actual results may differ significantly from these forecasts due to a wide range of factors. For the assumptions underlying the forecasts and the notes on the use of the forecasts, please refer to "1. Qualitative Information on Quarterly Financial Results (3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information" on page 4 of the attached document.

Table of Contents - Attachments

1. Qualitative Information on Quarterly Financial Results .........................................................................

2

(1)

Explanation of Operating Results ........................................................................................................

2

(2)

Explanation of Financial Position .......................................................................................................

3

(3)

Explanation of Consolidated Financial Results Forecast and Other Forward-lookingInformation

....4

2. Quarterly Consolidated Financial Statements and Principal Notes .........................................................

5

(1)

Quarterly Consolidated Balance Sheets ..............................................................................................

5

(2)

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

7

Quarterly Consolidated Statements of Income

Six Months Ended August 31 .....................................................................................................

7

Quarterly Consolidated Statements of Comprehensive Income

Six Months Ended August 31 .....................................................................................................

8

(3)

Quarterly Consolidated Statements of Cash Flows .............................................................................

9

(4)

Notes to Quarterly Consolidated Financial Statements .....................................................................

11

(Notes on going concern assumption) ..........................................................................................

11

(Notes in case of significant changes in shareholders' equity) .....................................................

11

(Significant subsequent events) ....................................................................................................

11

1

1. Qualitative Information on Quarterly Financial Results

(1) Explanation of Operating Results

During the six months ended August 31, 2021 (from March 1, 2021 to August 31, 2021), the Japanese economy continued to face difficulties amid the impact of the spread of the coronavirus disease (COVID-19), although it remained on a recovery path. While COVID-19 vaccinations have been progressing, there is a downside risk associated with a potential resurgence of infections, and uncertainty continues to prevail with no prospect in sight for the containment of the pandemic.

In the drugstore industry, the primary market for the Group's business, competition intensified, as the industry underwent reorganization even among the major players and entrants from other industries entered the market. Moreover, while demand grew for products to prevent infectious diseases as well as for foods and other products stemming from the voluntary restraints on going out due to the spread of COVID-19, impacts of the outbreak such as a drop in demand for cosmetics in response to the continuation and establishment of teleworking, fewer people catching colds as a result of regularly wearing masks and washing their hands, and people refraining from visiting doctors persist.

Under such circumstances, the Group made efforts to operate its business to provide products and services, while continuing to implement measures to prevent COVID-19 infections and thorough hygiene management. In terms of the sale of goods, the Cosmetics segment has not recovered the levels prior to COVID-19, while the Food Products segment reported a reactionary decline from a spike in special demand in the previous fiscal year. In terms of dispensing pharmacy sales, the number of prescriptions handled increased due primarily to the increase in the number of stores with dispensing pharmacies (1,747 stores as of August 31, 2021), despite the effects of the NHI drug price revision. Additionally, the Group managed to optimize selling, general and administrative expenses, mainly in terms of its labor costs by thoroughly managing store man-hours and improving store operational efficiency through the promotion of automatic ordering, while seeking to standardize the dispensing business by adding dispensing pharmacies to stores that did not already have them.

The Group also made efforts toward the improvement of business efficiency by carrying out an absorption- type merger, effective March 1, 2021, whereby Neo Pharma Co., Ltd. and Summit Co., Ltd., wholly-owned subsidiaries engaged in the dispensing business in Shikoku area mainly in Ehime Prefecture, were absorbed and WELCIA YAKKYOKU Co., Ltd., a consolidated subsidiary became the surviving company.

As for store openings and closures, the Group as a whole opened 82 stores and closed 13 stores, for a total of 2,287 stores Group-wide as of August 31, 2021.

(Unit: No. of Stores)

No. of

Increase

Increase/

No. of

resulting

decrease

stores as of

stores as of

from

resulting

Openings

Closures

February

August 31,

transfer of

from

28, 2021

2021

business

mergers

WELCIAYAKKYOKU

1,899

1

13

76

6

1,983

(Note 1)

Marudai Sakurai

87

-

-

3

1

89

Pharmacy

SHIMIZU YAKUHIN

62

-

-

1

1

62

Marue Drug

58

-

-

-

1

57

YODOYA

25

-

-

-

1

24

Kanamitsu Yakuhin

28

-

-

-

2

26

MASAYA

35

-

-

1

-

36

Neo Pharma (Note 2)

10

-

(10)

-

-

-

Summit (Note 3)

3

-

(3)

-

-

-

Total in Japan

2,207

1

-

81

12

2,277

Welcia-BHG

10

-

-

1

1

10

2

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Welcia Holdings Co. Ltd. published this content on 13 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 October 2021 06:11:10 UTC.