2784.T

Overall 25-27 Medium-Term Plan Growth Strategy

• The plan focuses on strengthening competitiveness in the core base business, allocating 70 billion yen in total investment to new and growth areas, with growth segments expected to drive consolidated operating profit growth going forward.

Core Base Business (医療用医薬品卸売事業)

• Executed the Neo-Primary strategy for specialty pharmaceuticals that treat rare indications but have relatively large patient populations and are prescribed across both specialty and primary care settings.
• Growth of the prescription pharmaceutical wholesale business has significantly outpaced overall market growth, securing the company the position of overwhelming industry No.1 market share.
• 10 business locations have already obtained ISO 9001 certification, with ongoing group-wide certification efforts to improve product quality.
• Expanded the logistics network via the newly operational Tsukuba, Yamaguchi Ube, and Shikoku Logistics Centers to meet stakeholder logistics requirements.

Growth Area Progress

• Healthtech solutions Mydodes and NOVUMN both grew member counts and adopting facility numbers by ~40% year-over-year, aiming to improve convenience for patients and medical institutions, and increase profit via solutions for pharmaceutical companies.
• Strengthened the national medical product wholesale network via a business integration with a specialized wholesale player this half-year period.
• Expanded the pharmaceutical manufacturing pipeline: gained manufacturing and marketing approval for Nefy Nasal Spray, an adjuvant anaphylaxis treatment that enables simple rapid nasal administration, in September 2025.
• Construction of the new formulation building at the Gunma Factory is progressing on schedule, with operations targeted to start in April 2026. Over 30 new CMO (contract manufacturing) orders (including for high pharmacological activity formulations) have been received as of end-September, with over 40 orders expected before operations launch; steady growth is forecast for the CMO business.

New Area Progress

• Joint application for the Japanese Ministry of Health, Labour and Welfare's medical facility infrastructure subsidy with Kids Web Bio and Kainom Biosciences was accepted in May 2025. The company reached a basic agreement to establish a 4-party joint venture (with Misenax Biotech) to build a domestic biosimilar (bio similar/bio successor) manufacturing stable supply system for economic security purposes.

Financial and Capital Strategy

• Allocates 120 billion yen in total capital from operating cash flow and asset sales to investment (focused on new and growth areas) and shareholder returns, targeting improved capital efficiency with a focus on capital costs and share price performance.
• Actively reducing policy-held shareholdings: the ratio of policy holdings to net assets is expected to fall below 10% this fiscal year, with active reductions continuing going forward.
• Maintains a progressive dividend policy targeting a DOE (dividend on equity) of 2.5% or higher, and will consider flexible, timely opportunistic share buybacks to enhance shareholder returns.

• Management revised upward the full fiscal 2026 (ending March 2026) consolidated net profit attributable to parent shareholders guidance to 36.0 billion yen (representing 31.4% year-over-year growth, and 1.16% of forecast revenue).
• All individual operating segment (医療用医薬品等卸売事業, セルフメディケーション卸売事業, 医薬品等製造事業, 調剤薬局等事業, 再生医療関連事業) full-year guidance is maintained at initial forecast levels, no changes were made.
• Full-year annual dividend per share guidance was increased to 68 yen, a 5 yen increase from prior guidance, aligned with the company's DOE 2.5%+ progressive dividend policy.

1. 医療用医薬品等卸売事業: Revenue of 1.3672 trillion yen, up 5.4% year-over-year; Gross profit of 79.4 billion yen, up 4.7% YoY; Operating profit of 14.7 billion yen, up 16.6% YoY, contributing 89.4% of total consolidated revenue. By category, new drug innovation add-on products + patented products/others account for 82.9% of segment revenue (up 2.4pp YoY), long-listed drugs 6.3% (down YoY), and generic drugs 10.8% (up YoY).
2. セルフメディケーション卸売事業: Revenue of 135.5 billion yen, up 2.4% YoY; Gross profit of 13.9 billion yen, up 2.6% YoY; Operating profit of 1.7 billion yen, up 1.8% YoY, contributing 8.9% of total consolidated revenue.
3. 医薬品等製造事業: Revenue of 25.5 billion yen, down 5.3% YoY; Gross profit of 5.4 billion yen, down 11.6% YoY; Operating loss of 98 million yen, contributing 1.7% of total consolidated revenue.
4. 調剤薬局等事業: Revenue of 18.2 billion yen, down 0.5% YoY; Gross profit of 6.7 billion yen, down 0.6% YoY; Operating profit of 0.1 billion yen, contributing 1.2% of total consolidated revenue.
5. その他事業 (再生医療関連事業): Newly established this fiscal year, with upfront R&D and SG&A expenses for infrastructure development ahead of future revenue growth.

• Mid-year drug price revision created negative downward pressure on revenue and profit across pharmaceutical-related segments.
• Rising logistics and personnel costs have increased operating cost pressure across wholesale segments.
• Drug price revision and the October 2024 introduction of the co-payment selection system for long-listed drugs caused sales declines in the pharmaceutical manufacturing segment, alongside weakening demand for diagnostic agents leading to an operating loss in the half-year period.
• The dispensing pharmacy business faces headwinds from drug price revision impacts, rising raw material costs, and increased SG&A from personnel and depreciation expenses leading to lower revenue and profit.
• New growth areas (regenerative medicine, domestic biosimilar manufacturing) require significant upfront infrastructure, R&D, and payroll investments before revenue generation begins.

No Q&A section was included in the provided earnings call transcript.