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

Summary of Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2017

July 29, 2016

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

MEDIPAL HOLDINGS CORPORATION Stock exchange listing: Tokyo

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

Representative: Shuichi Watanabe, President and CEO Phone: [phone] Contact: Mamoru Tsuchishio, Manager of Corporate Communications Department

Filing of Quarterly Report (scheduled): August 10, 2016 Start of Distribution of Dividends (scheduled): - 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 First Quarter of the Fiscal Year Ending March 31, 2017 (April 1, 2016 to June 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 (%)
   Three months ended June 30, 2016	771,644	3.9	11,638	43.6	14,965	33.9
   Three months ended June 30, 2015	742,330	7.2	8,102	16.1	11,174	13.0

   Note: Comprehensive income: Three months ended June 30, 2016: ¥11,401 million (+30.4%)

   Three months ended June 30, 2015: ¥8,745 million (+14.0%)

   Net income attributable to Year-on- owners of the year change parent (%) (¥ million)	Earnings per share (¥)	Earnings per share (diluted) (¥)
   Three months ended June 30, 2016 Three months ended June 30, 2015	8,498 60.2 5,304 5.0	37.53 23.43	- -

3. Financial Position

4. Total assets (¥ million)	Net assets (¥ million)	Net worth ratio (%)
   As of June 30, 2016 As of March 31, 2016	1,513,975 1,497,310	496,861 488,328	27.9 27.7

   (Reference) Net worth: As of June 30, 2016: ¥422,399 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	-
   Year ending March 31, 2017 (est.)	15.00	-	15.00	30.00

   Note: Revisions to projected dividends during the three months ended June 30, 2016: 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 interim period or fiscal year, as applicable)

   Net sales		Operating income		Ordinary income		Net income attributable to owners of the parent		Earnings per share
   (¥ million)	(%)	(¥ million)	(%)	(¥ million)	(%)	(¥ million)	(%)	(¥)
   Interim period Fiscal year	1,531,000 3,103,000	3.0 2.5	21,200 42,500	15.0 0.5	27,300 55,500	12.0 0.7	15,000 31,000	18.7 0.7	66.24 136.90

   Note: Revisions to forecast of consolidated results during the three months ended June 30, 2016: None

   *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 4 of the attached materials.

    Three months ended June 30, 2016 244,524,496	Year ended March 31, 2016	244,524,496
    Three months ended June 30, 2016 18,085,350	Year ended March 31, 2016	18,085,160
    Three months ended June 30, 2016 226,439,272	Three months ended June 30, 2015 226,441,346

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 projected results are based on information available at the time of this announcement. Actual results may differ from the figures in the projection owing to a wide range of factors in the future. See page 4 of the attached materials for items concerning the projected results.

    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 Information on Outlook, Including Projected Consolidated Results

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4

4

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

4

4

4

4

1. Quarterly Consolidated Financial Statements

2. Quarterly Consolidated Balance Sheets

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

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

5. Quarterly Consolidated Statements of Income

   Quarterly Consolidated Statements of Comprehensive Income

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

6

6

8

8

9

10

10

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10

1

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

3. In the first quarter of the fiscal year ending March 31, 2017, the three months ended June 30, 2016, Japan's economy continued to recover gradually, reflecting the effects of government economic policies and improvements in employment and income, despite concerns about a downturn in overseas economies.

   In these economic conditions, the MEDIPAL Group newly formulated "2019 MEDIPAL Medium-Term Vision: Change the Oroshi Next - Innovate and Create," which 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, expanding 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, a reorganization was carried out in the MEDIPAL Group. MEDIPAL FOODS CORPORATION (Chuo-ku, Sapporo-shi), which conducts the food processing raw materials wholesale business, was established on April 1, 2016, and SPLine Corporation (Chuo-ku, Tokyo), which develops plans and solutions for the stable supply of specialty pharmaceuticals, was established on May 20, 2016.

   For the first quarter of the fiscal year ending March 31, 2017, consolidated net sales were ¥771,644 million (a 3.9 percent increase compared with the same period of the previous fiscal year), operating income was ¥11,638 million (a 43.6 percent increase), ordinary income was ¥14,965 million (a 33.9 percent increase) and net income attributable to owners of the parent was ¥8,498 million (a 60.2 percent increase).

   A summary of results by principal business segment follows below.

   Prescription Pharmaceutical Wholesale Business

   Despite the effect of National Health Insurance (NHI) drug price reductions implemented on April 1, 2016, sales of prescription pharmaceuticals were at the level of the same period of the previous fiscal year as a result of the MEDIPAL Group's focus on sales of generic drugs, for which demand is increasing, and sales of new drugs eligible for the price premium to promote the development of new drugs and eliminate off-label use. In addition, 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 aiming 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 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. Furthermore, the MEDIPAL Group is promoting 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 has appointed approximately 1,800 highly skilled and knowledgeable Assist Representatives (AR)4 with medical representatives (MR) certification to undertake new promotional activities.

   In addition, the MEDIPAL Group is operating a business in which it provides 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 ¥522,571 million (a 0.3 percent increase compared with the same period of the previous fiscal year) and operating income was ¥6,401 million (a

   74.5 percent increase).

   Definition of Terms:

   2