Results of Operations for the First Half of the Fiscal Year Ending March 31, 2022

(Tokyo Stock Exchange, First Section / Stock code: 3341)

Results of Operations for the First Half of the Fiscal Year Ending March 31, 2022 (April 1, 2021

to September 30, 2021)

November 5, 2021

©︎2021 NIHON CHOUZAI Co., Ltd. All rights reserved.

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Financial

Highlights

©︎2021 NIHON CHOUZAI Co., Ltd. All rights reserved.

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1	Financial Highlights

Financial Highlights

Dispensing

Pharmacy

Business

Pharmaceutical

Manufacturing

and Sales

Business

Medical

Professional

Staffing and

Placement

Business

Net sales and operating profit rose on higher prescription volumes and drug fee revenues, as well as contributions from 29 pharmacies newly opened in the previous fiscal year.

Net sales increased mainly driven by drugs newly NHI-listed from FY2020 onward, while operating profit fell on the impact of product recalls and manufacturing delays stemming from quality issues at Choseido Pharmaceutical Co., Ltd.

Net sales and operating profit both fell due to lower pharmacist staffing demand, despite higher physician placements fueled by continued demand for services to support Japan's COVID-19 vaccination efforts.

©︎2021 NIHON CHOUZAI Co., Ltd. All rights reserved.

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1	Financial Highlights

Consolidated Statement of Income

Despite the ongoing impact of the pandemic, increase in prescription volumes at existing pharmacies and performance of 29 pharmacies newly opened in the previous fiscal year led to a 7.5% YoY increase in net sales. However, operating profit was down 12.9% YoY, coming in 19.5% below plan owing to lower profits in the Pharmaceutical Manufacturing and Sales Business.

	1HFY3/20	1HFY3/21	1HFY3/22	1HFY3/22	ChangeVs.	Vs.Forecast	YoYgrowth
（Millionsofyen）	Results	Results	Forecast	Results	Forecast	rate
Net sales	130,297	135,999	142,200	146,202	4,002	2.8%	7.5%
Cost of sales	107,858	112,726	116,200	121,007	4,807	4.1%	7.3%
Gross profit
22,439	23,272	25,900	25,194	(705)	(2.7%)	8.3%
% to sales	17.2%	17.1%	18.2%	17.2%	―	―	―
SG&A expenses	18,373	20,498	22,800	22,778	(21)	(0.1%)	11.1%
% to sales	14.1%	15.1%	16.0%	15.6%	―	―	―
Consumption taxes	6,890	9,109	9,700	9,900	200	2.1%	8.7%
R&D expenses	1,372	1,349	1,700	1,793	93	5.5%	32.9%
Operating profit	4,066	2,774	3,000	2,416	(583)	(19.5%)	(12.9%)
% to sales
3.1%	2.0%	2.1%	1.7%	―	―	―
Ordinary profit	4,001	2,665	3,000	2,528	(471)	(15.7%)	(5.1%)
% to sales	3.1%	2.0%	2.1%	1.7%	―	―	―
Profit attributable to owners of parent	2,094	1,555	1,400	1,340	(59)	(4.2%)	(13.8%)
% to sales
1.6%	1.1%	1.0%	0.9%	―	―	―
Net income per share (Yen) Note	69.85	51.89	46.69	44.71	(1.98)	(4.2%)	(13.8%)

Note ： On April 1, 2020, the Company conducted a two-for-one stock split of common stock.

Net income per share has been calculated as if this stock split had taken place at the beginning of the fiscal year ended March 31, 2020.
©︎2021 NIHON CHOUZAI Co., Ltd. All rights reserved.	3

1	Financial Highlights

Consolidated Balance Sheet

Changes in assets primarily consisted of a 5.1 billion yen decrease in cash and deposits. Changes in liabilities mainly consisted of a 10.1 billion yen decrease in long-term borrowings.

	End of Mar. 2020	End of Mar. 2021	End of Sep. 2021	YoY change	YoY change
（Millions of yen）	(FY3/20)	(FY3/21)	(1H FY3/22)	(%)

	Current assets	87,414	89,246	87,088	(2,158)	(2.4%)
	Cash and deposits	32,254	32,893	27,758	(5,135)	(15.6%)
	Non-current assets	98,137	97,015	97,275	259	0.3%
	Property, plant and equipment	66,082	64,785	64,383	(402)	(0.6%)
	Intangible assets
	19,425	18,952	18,909	(43)	(0.2%)
	Investments and other assets	12,628	13,277	13,982	704	5.3%
	Total assets	185,551	186,262	184,363	(1,899)	(1.0%)
	Current liabilities	70,107	87,720	93,931	6,210	7.1%
	Current potion of long-term loans payable	9,406	27,966	26,766	(1,200)	(4.3%)
	Non-current liabilities	68,370	48,673	39,587	(9,086)	(18.7%)
	Long-term loans payable	62,963	42,997	34,014	(8,983)	(20.9%)
	Total liabilities	138,478	136,394	133,518	(2,875)	(2.1%)
	Total net assets	47,072	49,868	50,844	976	2.0%
	Shareholders' equity	47,072	49,868	50,844	976	2.0%
	Equity ratio	25.4%	26.8%	27.6%	―	―

©︎2021 NIHON CHOUZAI Co., Ltd. All rights reserved.

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