NIHON CHOUZAI : Summary of Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2023

		July 29, 2022
	Summary of Consolidated Financial Results for the First Quarter
	of the Fiscal Year Ending March 31, 2023
	(Three Months Ended June 30, 2022)
		[Japanese GAAP]
Company name:	NIHON CHOUZAI Co., Ltd.	Listing: Tokyo Stock Exchange, Prime Market
Stock code:	3341	URL: https://www.nicho.co.jp
Representative:	Yosuke Mitsuhara, President & CEO
Contact:	Masahiro Tojo, Executive Officer and General Manager of Corporate Tel: [phone]
Planning Department
Scheduled date of filing of Quarterly Report:	August 12, 2022
Scheduled date of payment of dividend:	-
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results meeting:	None

Note: The original disclosure in Japanese was released on July 29, 2022 at 15:00 (GMT +9).

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

1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2023 (April 1, 2022 - June 30, 2022)

(1) Consolidated results of operations						(Percentages represent year-on-year changes)
	Net sales		EBITDA		Operating profit	Ordinary profit	Profit attributable
			to owners of parent
	Million yen		%	Million yen		%	Million yen	%	Million yen	%	Million yen	%
Three months ended Jun. 30, 2022	74,709		4.0	3,002		2.5	892	(4.8)	913	(8.0)	391	(8.5)
Three months ended Jun. 30, 2021	71,851		5.2	2,929		24.0	936	118.1	993	194.8	427	20.1

Note: Comprehensive income (million yen)

Three months ended Jun. 30, 2022:	395	(down 8.8％)
Three months ended Jun. 30, 2021:	433	(up 19.8％)

	Net income per share	Diluted net income per share
	Yen	Yen
Three months ended Jun. 30, 2022	13.05	－
Three months ended Jun. 30, 2021	14.27	－
Note: EBITDA = Operating profit + depreciation + goodwill amortization

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio
	Million yen	Million yen	%
As of Jun. 30, 2022	195,341	52,897	27.1
As of Mar. 31, 2022	178,753	52,876	26.8

Reference: Shareholders' equity (million yen) As of Jun. 30, 2022: 52,897 As of Mar. 31, 2022: 52,876

2. Dividends

				Dividend per share
		1Q-end	2Q-end		3Q-end		Year-end	Total
		Yen	Yen		Yen		Yen	Yen
Fiscal year ended Mar. 31, 2022		－	12.50		－		12.50	25.00
Fiscal year ending Mar. 31, 2023		－
Fiscal year ending Mar. 31, 2023 (forecasts)			12.50		－		12.50	25.00

Note: Revisions to the most recently announced dividend forecast: None

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 - March 31, 2023)

(Percentages represent year-on-year changes)

	Net sales		EBITDA		Operating profit	Ordinary profit	Profit attributable to	Net income per share
			owners of parent
	Million yen		%	Million yen			Million yen	%	Million yen	%	Million yen	%	Yen
First half	156,000		6.7	6,900		6.5	2,600	7.6	2,500	(1.1)	1,000	(25.4)	33.35
Full year	321,400		7.4	17,600		17.5	8,500	29.0	8,400	24.1	4,400	18.7	146.73

Note: Revisions to the most recently announced consolidated forecast: None

• Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): None
2. Application of special accounting methods for presenting quarterly consolidated financial statements: None
3. Changes in accounting policies and accounting-based estimates, and restatements

1. Changes in accounting policies due to revisions in accounting standards, others: None
2. Changes in accounting policies other than 1) above: None
3. Changes in accounting-based estimates: None
4. Restatements: None

1. Number of outstanding shares (common stock shares)

1. Number of shares outstanding at the end of period (including treasury shares)

As of Jun. 30, 2022:	32,048,000 shares	As of Mar. 31, 2022:	32,048,000 shares
2) Number of treasury shares at the end of period
As of Jun. 30, 2022:	2,061,175 shares	As of Mar. 31, 2022:	2,061,175 shares
3) Average number of shares outstanding during the period
Three months ended Jun. 30, 2022:	29,986,825 shares	Three months ended Jun. 30, 2021:	29,986,894 shares

Note 1: The quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.

Note 2: Cautionary statement with respect to forward-looking statements and other special items

1. Note concerning forward-looking statements
   Forecasts and other forward-looking statements in this document incorporate risks and uncertainties because these statements are based on Nihon Chouzai's judgments and assumptions using information that is currently available. These materials are not promises by Nihon Chouzai regarding future performance. Actual results may differ significantly from these forecasts for a number of reasons.
2. How to view supplementary materials for financial results
   Supplementary materials for quarterly financial results will be disclosed at the Timely Disclosure network (TDnet) as appropriate, and also will be available on the Nihon Chouzai website.

	Nihon Chouzai Co., Ltd. (3341) First Quarter of FY3/23 Financial Results
Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Financial Position	4
(3)	Explanation of Consolidated Forecast and Other Forward -looking Statements	4
2. Quarterly Consolidated Financial Statements and Notes	5
(1)	Quarterly Consolidated Balance Sheet	5
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	7
(3)	Notes to Quarterly Consolidated Financial Statements	9
	Going-concern Assumption	9
	Significant Changes in Shareholders' Equity	9
	Segment and Other Information	10

1

Nihon Chouzai Co., Ltd. (3341) First Quarter of FY3/23 Financial Results

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

During the first quarter of the fiscal year ending March 31, 2023 (April 1-June 30, 2022), the Japanese economy showed signs of picking up as difficulties caused by COVID-19 abated and socioeconomic activities gradually returned to normal. The economic outlook, however, remained unclear due to various factors, including a resurgence of COVID-19 infections in July, steady depreciation of the yen, steeply rising raw material prices, and volatility in financial and capital markets.

Under these conditions, the Nihon Chouzai Group thoroughly implemented infection-prevention measures while striving to provide quality healthcare services and pharmaceutical products in line with its mission "to give people the closest possible support" as a healthcare group. At the same time, all companies of the Group continued their efforts to reduce costs.

The Group's Dispensing Pharmacy Business made the Nihon Chouzai Online Medication System, branded as NiCOMS, available to medical patients throughout Japan, as patients were given the choice to acquire drugs using online medication guidance systems, including patients receiving treatment directly from medical facilities, due to a relaxation of regulations concomitant with the government's revision of medical fees in April 2022. In July of the same year, the Group launched an online diagnostic search service called NiCO Navi, providing a nationwide and comprehensive service spanning from diagnoses to medication guidance and deliveries of drugs. Meanwhile, the number of registered users of the Group's electronic medication notebook service, Okusuri Techo Plus, surpassed the 1.1 million mark, reflecting the efforts of this business to enhance convenience and medical quality for patients.

The Pharmaceutical Manufacturing and Sales Business worked to raise productivity and increase sales of products it manufactures in-house, including those newly listed in the national health insurance (NHI) drug price list, through investment in R&D, while placing priority on managing the quality and ensuring a stable supply of generic drugs.

In the Medical Professional Staffing and Placement Business, results gradually improved in the pharmacist staffing and placement business, even though it continued to face declining demand due to the impact of the COVID-19 pandemic. The physician placement business also recorded growth in the number of physicians placed.

Net sales for the first three months of the current consolidated fiscal year were 74,709 million yen (+4.0% YoY), operating profit was 892 million yen (-4.8% YoY), ordinary profit was 913 million yen (-8.0% YoY), and profit attributable to owners of the parent was 391 million yen (-8.5% YoY).

Looking ahead, the Group will take all necessary measures to prevent the spread of COVID -19 so that customers and patients can continue to safely use its quality healthcare services and products.

Segment-specific earnings are as indicated below.

1) Dispensing Pharmacy Business

In the first three months of the current consolidated fiscal year, the Dispensing Pharmacy Business reported net sales of 66,375 million yen (+5.5% YoY) and operating profit of 2,062 million yen (+9.2% YoY).

The total number of pharmacies at the end of June came to 713 stores (including one merchandise store) as a result of 19 new store openings and 3 store closures during the period. Despite the ongoing impact of the Covid-19pandemic, net sales and operating income increased due to the contribution of store openings in the previous fiscal year and growth in the number of prescriptions filled. The Group met the government's target of having generic drugs account for over 80% of all drugs (on a sales volume basis) in each prefecture of the country by the end of FY2023, as its sales volume of generic drugs exceeded 80% in every prefecture as of the end of March 2022. The group-wideaverage was 88.5% (discontinued products have been excluded from calculations). In addition, the percentage of the Group's pharmacies that provide at-homemedical care (at least 12 visits annually) was 93.1%.

2

Nihon Chouzai Co., Ltd. (3341) First Quarter of FY3/23 Financial Results

2) Pharmaceutical Manufacturing and Sales Business

In the first three months of the current consolidated fiscal year, the Pharmaceutical Manufacturing and Sales Business reported net sales of 10,027 million yen (-17.5% YoY) and operating profit of 270 million yen (-40.1% YoY).

Despite brisk sales of products that have been included in the NHI drug price list since 2019, the decreases in net sales and operating profit were mainly because sales prices of existing products were reduced due to the government's drug price revisions in April 2022, and product shipments required adjustments to ensure stable supply. In June 2022, the Group launched five new products that were added to the NHI price list, bringing the total number of listed products to 641 (including two over-the-counter drugs) as of the end of June 2022.

3) Medical Professional Staffing and Placement Business

In the first three months of the current consolidated fiscal year, the Medical Professional Staffing and Placement Business reported net sales of 2,066 million yen (8.7% YoY) and operating profit of 355 million yen (+27.7% YoY).

These increases reflected a rebound in demand for pharmacist staffing and placements, which had fallen due to the impact of the COVID-19 pandemic, as well as steady growth in physician placements.

3