Tsuruha Holdings (3391) Investor presentation summary

Market environment and group vision

• Drugstores have evolved into essential social infrastructure, expanding in both scale and quality, with a nationwide network comparable to post offices in Japan.

• The group leverages over 5,600 stores, 3,000+ dispensing pharmacies, and 50,000+ professionals to support customers across all life stages.

• The vision is to become a "life store," providing comprehensive products and services for every life stage, focusing on accessibility, personalization, and reliability.

• A two-phase growth approach aims to build a value creation base by FY2/29 and fully operate it by FY2/32, targeting ¥3.0 trillion in net sales.

Numerical targets and financial strategy

• By FY2/29, targets include net sales of ¥2.7 trillion, EBITDA of ¥202.5 billion (7.5% margin), and operating income of ¥135.0 billion (5.0% margin).

• ROE target is set at 7.0%, with a focus on synergy creation totaling ¥40 billion by year three post-integration.

• Cash allocation will prioritize renovations, DX, overseas growth, and human capital, with 46% for growth investment, 34% for overseas, and 20% for shareholder returns.

• Dividend policy aims for a progressive payout ratio of at least 35%.

Key strategies for growth and integration

• Store strategy shifts from quantity to quality, focusing on renovations, regional tailoring, and co-location with caregiving services.

• Dispensing strategy aims to be the first point of contact for health, optimizing regional operations and integrating digital support.

• MD strategy integrates private brands (PB) and joint development, targeting a PB net sales composition rate of 15%.

• DX strategy includes a unified app, integrated point program, AI-powered customer support, and operational efficiency improvements.

• Overseas strategy focuses on strengthening ASEAN HQ, local talent development, and expanding store count to 100 in key countries.