Ain : Summary of Financial Statements for Fiscal Year Ended April 2023

Summary of Financial Statements for Fiscal Year Ended April 2023

【Japan GAAP】(Consolidated)

June 2, 2023

	Name of listed company:	AIN HOLDINGS INC.
	Exchange listed on:	Prime Market of Tokyo Stock Exchange and Sapporo Securities Exchange
	Code number:	9627			URL: https://www.ainj.co.jp/
	Representative:	Kiichi Otani, President and Representative Director
	Inquiries:	Toshihide Mizushima, Representative Senior Managing Director
		TEL: [phone]
	Date of the ordinary general meeting of shareholders:	July 28, 2023
	Date of scheduled payment of dividends:			July 31, 2023
	Date of filing securities report:			July 31, 2023
	Supplementary documents for this summary of financial statements:	Yes (Supplementary materials are disclosed on the
					Company's website appropriately as the financial
					statements.)
	Explanation meeting for financial results:			Yes (for institutional investors and analysts)
						(Amounts are rounded down to the nearest million yen.)
1. Consolidated results for the fiscal year ended April 2023 (from May 1, 2022 to April 30, 2023)
(1) Consolidated operating results				(Percentage figures show year-on-year changes.)
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
		Million yen	%	Million yen	%	Million yen	%	Million yen	%
	Year ended April 30, 2023	358,742	13.4	16,004	5.7	17,064	6.4	9,234	30.2
	Year ended April 30, 2022	316,247	6.4	15,139	38.5	16,041	26.8	7,092	5.9

	(Note) Comprehensive income:	Year ended April 30, 2023: ¥9,446 million (+32.5%)
		Year ended April 30, 2022: ¥7,126 million (+5.1%)	Ordinary profit to
		Earnings per	Diluted earnings	Return on equity		Operating profit
		share	per share	total assets	to net sales
		Yen	Yen	%		%	%
	Year ended April 30, 2023	262.87	-	7.5		7.7	4.5
	Year ended April 30, 2022	201.47	-	6.0		7.7	4.8

(Reference) Share of profit of entities accounted for using equity method: Year ended April 30, 2023: ¥- million
				Year ended April 30, 2022: ¥2 million
(2) Consolidated financial position
		Total assets	Net assets	Shareholders' equity	Net assets per share
			ratio
		Million yen		Million yen	%		Yen
	As of April 30, 2023	231,750		126,546	54.6	3,599.47
	As of April 30, 2022	212,461		119,010	56.0	3,385.51
	(Reference) Equity capital:	As of April 30, 2023: ¥126,449 million	As of April 30, 2022: ¥118,923 million
(3) Consolidated cash flows
		Cash flows from	Cash flows from	Cash flows from	Cash and cash
			equivalents
		operating activities	investing activities	financing activities
			at end of year
		Million yen		Million yen		Million yen		Million yen
	Year ended April 30, 2023	20,267		(22,292)	(11,237)	46,217
	Year ended April 30, 2022	26,156		(13,943)	(7,753)	59,470
2. Dividends

		Dividends per share
	1Q-end	2Q-end	3Q-end	Year-end
	Yen	Yen	Yen		Yen
Year ended April 30, 2022	-	0.00	-		55.00
Year ended April 30, 2023	-	0.00	-		60.00
Year ending April 30, 2024	-	0.00	-		60.00
(forecast)

Annual

Yen

55.00

60.00

60.00

Total	Dividends	Dividends on
dividends	payout ratio	net assets
(annual)	(consolidated)	(consolidated)
Million yen	%	%
1,932	27.3	1.7
2,107	22.8	1.7
	25.5

3. Consolidated financial forecast for the fiscal year ending April 30, 2024 (from May 1, 2023 to April 30, 2024)

(Percentage figures show year-on-year changes.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings
		owners of parent	per share
	Million yen		%	Million yen	%	Million yen	%	Million yen	%	Yen
First half	183,459		7.2	6,087	(10.3)	6,421	(11.8)	3,185	(16.3)	90.66
Full year	375,000		4.5	15,663	(2.1)	16,302	(4.5)	8,250	(10.7)	234.84

* Notes

(1) Major changes in subsidiaries during the fiscal year (changes in specified subsidiaries resulting in change in scope of consolidation): No

Newly consolidated: - Excluded: -

(2) Changes in accounting principles, changes in accounting estimates, and restatement of revisions

1)	Changes in accounting principles as a result of revisions to accounting standards, etc.:	Yes
2)	Changes in accounting principles other than 1):	No
3)	Changes in accounting estimates:	No
4)	Restatement of revisions:	No

(3) Number of outstanding shares (common stock):

1. Number of outstanding shares (including treasury stock):
2. Number of shares held in treasury:
3. Average number of shares outstanding:

As of April 30, 2023	35,428,212	shares	As of April 30, 2022	35,428,212	shares
As of April 30, 2023	298,188	shares	As of April 30, 2022	300,911	shares
Fiscal year ended	35,129,116	shares	Fiscal year ended	35,202,302	shares
April 30, 2023			April 30, 2022

*This Summary of Financial Statements is outside the scope of audit procedures.

*Statement regarding the proper use of financial forecasts and other special remarks

(Caution concerning forward-looking statements)

The above forecasts are calculated based on the information available as of the publication date of this material, and actual financial results may vary due to change in future economic conditions and others.

AIN HOLDINGS INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2023

Contents of Attachment
1. Operating Results and Other	2
(1)	Overview of operating results for the fiscal year under review	2
(2)	Overview of financial position for the fiscal year under review	3
(3)	Overview of cash flows for the fiscal year under review	3
(4)	Future outlook	5
2. Basic Stance on Selection of Accounting Standards	5
3. Consolidated Financial Statements and Major Notes	6
(1)	Consolidated balance sheet	6
(2)	Consolidated statement of income and comprehensive income	8
	Consolidated statement of income	8
	Consolidated statement of comprehensive income	10
(3)	Consolidated statement of changes in net assets	11
(4)	Consolidated statement of cash flows	13
(5)	Notes to consolidated financial statements	15
(Notes on the premise of a going concern)	15
(Changes in accounting policies)	15
(Changes in presentation of financial statements)	15
(Segment information, etc.)	16
(Per-share information)	20
(Material subsequent events)	20

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AIN HOLDINGS INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2023

1. Operating Results and Other

(1) Overview of operating results for the fiscal year under review

During the fiscal year under review (May 1, 2022 to April 30, 2023; fiscal 2023), the COVID-19 pandemic continued to have an impact on the Japanese economy, but there were signs of a moderate pickup due to an easing in mobility restrictions and other factors. However, the outlook remains uncertain amid rising prices and fluctuations in financial and capital markets.

In this economic environment, the AIN HOLDINGS Group (the Group) rigorously implemented measures to prevent the spread of COVID-19 and worked to provide healthcare and retail services. To help solve various social issues through its business activities, AIN HOLDINGS aims to be a company that "people welcome to their communities."

We have identified six issues material to the AIN Group (materiality): "Contribute to local healthcare," "Provide beauty and happiness," "Safety, peace of mind and trust," "Protect the environment and reduce environmental impact," "Ensure sound management base," and "Cooperate with local communities and businesses." We have also publicly disclosed KPIs and fiscal 2025 targets for initiatives in each area of materiality.

In July 2022, the Group endorsed the final report of the Task Force on Climate-related Financial Disclosure (TCFD)* and adopted four disclosure items from the TCFD recommendations and published them on its website. In September 2022, as part of efforts to enhance communication with stakeholders, the Group published a new Integrated Report with information on specific steps it is taking to address materiality, as well as human resources strategy, DX strategy and other measures to increase value over the medium and long term. In November 2022, the Group formulated the CSR Procurement Policy and Guidelines in order to realize one of the Group's materiality goals: Cooperate with local communities and businesses. The Group also signed the United Nations Global Compact and joined the Global Compact Network Japan.

In March 2023, for the second consecutive year, the Group received certification as an Outstanding Health and Productivity Management Organization for 2023 (large enterprise category) under a program run jointly by the Ministry of Economy, Trade and Industry (METI) and Nippon Kenko Kaigi that recognizes leading companies in health and productivity management. In addition, from the standpoint of human capital management, we are working to improve the health of employees to reduce the staff turnover rate and lift productivity by harnessing the performance of every employee, as part of our efforts to "Ensure sound management base."

By implementing a range of measures, the Group is working to realize sustainability management in order to generate sustainable growth and create social, environment and economic value.

TCFD :Task Force on Climate-related Financial Disclosures, established by the Financial Stability Board (FSB) at the request of the G20 finance ministers and central bank governors. The task force published its recommendations in its final report in June 2017.

Results for fiscal 2023 (May 1, 2022 to April 30, 2023) are as follows.

		(Million yen)	Fiscal 2022	Fiscal 2023	Change	Change (%)
	Net sales		316,247	358,742	42,494	13.4
	Operating profit		15,139	16,004	864	5.7
	Ordinary profit		16,041	17,064	1,022	6.4
	Profit attributable to owners of parent	7,092	9,234	2,142	30.2
Results by segment are as follows.
		(Million yen)	Fiscal 2022	Fiscal 2023	Change	Change (%)
	Dispensing	Sales	283,111	321,577	38,465	13.6
	pharmacy business	Segment profit	25,082	24,135	(946)	(3.8)
	Cosmetic and drug	Sales	20,558	25,685	5,127	24.9
	store business	Segment profit	(1,764)	1,214	2,978	－
	Other businesses	Sales	12,677	11,540	(1,136)	(9.0)
	Segment profit	(146)	135	282	－

(Note) Segment sales include intersegment transactions.

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AIN HOLDINGS INC. (9627) Summary of Financial Statements for Fiscal Year Ended April 30, 2023

(Dispensing pharmacy business)

The Group is working to leverage the primary care capabilities of its pharmacists and dispensing pharmacies to help patients access medical services in their local community with peace of mind. Specifically, the Group is cooperating with medical institutions, using patient medication notebooks to ensure integrated and continuous monitoring of patient medication, and providing services for home-based healthcare.

Ahead of the start of the Ministry of Health, Labour and Welfare's (MHLW) new digitalelectronic prescriptions management service in January 2023, the Group took part in a MHLW pilot project launched at the end of October 2022 to establish operational processes, implement advanced initiatives, build up good practice and develop guidelines. The Group's pharmacies nationwide are now progressively upgrading operating environments to ensure compatibility with the new digital prescriptions. Going forward, we will adapt our business to these and other developments in the sector to ensure patients can continue to reliably access prescription medication with peace of mind.

In business development, earnings were supported by new store openings and growth in store openings compared with the previous fiscal year, including the consolidation of approximately 100 stores operated by Pharmacy Holdings Co., Ltd. in May 2022. We continue to target further business expansion through a strategy of actively opening large pharmacies and pursuing M&A deals that emphasize investment returns, while also improving pharmacy operating efficiency.

During the fiscal year, the Group opened a total of 141 dispensing pharmacies, including those acquired through M&A deals, and closed 24 dispensing pharmacies and sold 7, resulting in a total of 1,209.

(Cosmetic and drug store business)

In the cosmetic and drug store business, the COVID-19 pandemic continued to impact performance, but we reviewed and overhauled our portfolio of original brands and optimized costs. In the fiscal year under review, the business moved into profit, supported by steady growth in the number of customers after mobility restrictions were eased, and by measures to optimize costs.

During the same period, the Group opened 8 cosmetic and drug stores and closed 8 stores, resulting in a total of 78 cosmetic and drug stores at the end of the fiscal year.

(2) Overview of financial position for the fiscal year under review

The balance of total assets at the end of the fiscal year increased ¥19,288 million from the end of the previous fiscal year to ¥231,750 million. This mainly reflected increases for goodwill, merchandise and other assets due to the opening of new stores and dispensing pharmacies, including locations acquired through M&A.

The balance of liabilities at the end of the fiscal year under review increased by ¥11,753 million to ¥105,204 million.

The balance of short- term and long-term debts increased by ¥233 million to ¥8,691 million.

Total net assets increased by ¥7,535 million to ¥126,546 million and the shareholders' equity ratio decreased

1.4 percentage points to 54.6%.

1. Overview of cash flows for the fiscal year under review

In the fiscal year under review, cash on hand and in banks ("cash") decreased ¥13,252 million year on year to ¥46,217 million.

Cash flows from each category and their relevant factors are as follows.

(Cash flows from operating activities)

Net cash provided by operating activities was ¥20,267 million, compared with net cash provided of ¥26,156 million in the previous fiscal year.

The main items that were positive for cash flow were income before income taxes of ¥15,882 million, as well as depreciation and amortization of ¥5,529 million and amortization of goodwill of ¥4,310 million related to

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