MEDIPAL HOLDINGS (7459): FY2025 Results Summary — Record Net Sales and Ordinary Profit, PALTAC to Become a Wholly Owned Subsidiary

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

MEDIPAL HOLDINGS reported net sales of ¥3,817.3 billion (up ¥146.0 billion, or 4.0%, year on year) and ordinary profit of ¥75.7 billion (up ¥10.4 billion, or 16.0%) for the fiscal year ended March 31, 2026, which the company describes as achieving record-high net sales and ordinary profit. Profit attributable to owners of parent rose ¥2.2 billion, or 5.6%, to ¥42.5 billion, while operating profit declined ¥2.4 billion, or 4.4%, to ¥53.1 billion as SG&A expenses increased on strategic growth investments. Net sales increased in all three business segments, and the company raised its year-end dividend by ¥2 to ¥34 per share for a full-year dividend of ¥66.

Note on fiscal-year labels: in this presentation the company defines the fiscal year ended March 31, 2026 (April 1, 2025 to March 31, 2026) as “FY2025” and the fiscal year ending March 31, 2027 as “FY2026”. This article follows the labels used in the materials.

Consolidated Results (Full-Year Actual)

Gross profit grew ¥5.2 billion (2.0%) to ¥260.9 billion on sales expansion, but SG&A expenses rose ¥7.6 billion (3.8%) to ¥207.8 billion, including increased business investment expenses, so operating profit fell to ¥53.1 billion. Excluding business investment expenses and the amortization of goodwill and intangible assets arising from the growth investments set out in the 2027 MEDIPAL Medium-Term Vision, adjusted operating profit rose ¥0.5 billion (0.9%) to ¥59.5 billion. Ordinary profit was lifted by a ¥12.8 billion year-on-year improvement in non-operating income and expenses, including a ¥7.6 billion increase in profit of entities accounted for using the equity method and a ¥4.8 billion contribution from gain on investments in investment partnerships. Extraordinary income and losses were a net ¥6.1 billion in FY2025 against ¥11.4 billion in FY2024, a decrease of ¥5.3 billion (46.7%); among the change factors, gains on sales of investment securities increased by ¥9.3 billion, while business restructuring expenses related to the transfer of logistics employees between group companies added ¥4.5 billion.

Results also exceeded the company’s own forecast on every line: net sales were ¥32.3 billion (0.9%) above forecast, ordinary profit ¥6.7 billion (9.7%) above, and profit attributable to owners of parent ¥8.0 billion (23.3%) above.

Item (¥ billion)	FY2025	FY2024	YoY Change	% of Change
Net Sales	3,817.3	3,671.3	+146.0	+4.0%
Gross Profit	260.9	255.7	+5.2	+2.0%
SG&A Expenses	207.8	200.1	+7.6	+3.8%
Operating Profit	53.1	55.6	(2.4)	(4.4%)
Operating Profit excluding business investment expenses and goodwill / intangible asset amortization	59.5	59.0	+0.5	+0.9%
Ordinary Profit	75.7	65.2	+10.4	+16.0%
Profit before income taxes	81.8	76.7	+5.1	+6.7%
Profit Attributable to Owners of Parent	42.5	40.2	+2.2	+5.6%

Segment Results

In the Prescription Pharmaceutical Wholesale Business (MEDICEO Business), net sales rose ¥95.8 billion (4.0%) to ¥2,466.1 billion, outpacing the market: on an NHI drug price basis the prescription pharmaceutical market grew 3.5% in FY2025 while MEDIPAL grew 4.4% (calculated in-house based on data from Encise Inc.). Gross profit increased ¥1.9 billion, although the gross profit-to-sales ratio fell from 6.34% to 6.18% (down 0.17pp) on rising purchasing costs and changes in product mix. Operating profit declined ¥0.9 billion (3.6%) to ¥24.2 billion as business investment expenses increased by ¥2.9 billion, while operating profit excluding those items rose ¥2.0 billion (7.8%) to ¥28.6 billion.

In the Cosmetics, Daily Necessities and OTC Pharmaceutical Wholesale Business (PALTAC Business), net sales grew ¥49.7 billion (4.2%) to ¥1,237.8 billion on expanded transactions, new product line-ups and higher unit prices, and gross profit rose ¥3.3 billion. Operating profit fell ¥1.5 billion (5.6%) to ¥26.4 billion because SG&A expenses increased ¥4.9 billion on higher delivery unit prices, personnel investment and the operating costs of externally rented centers secured for logistics capacity.

In the Animal Health Products and Food Processing Raw Materials Wholesale and Related Business (AGRO&FOOD Business), net sales edged up ¥0.4 billion (0.4%) to ¥117.3 billion. Gross profit declined ¥0.07 billion on intensified price negotiations in the livestock and fisheries sector and higher costs in the food sector due to exchange rates, and operating profit slipped ¥0.1 billion (4.9%) to ¥2.3 billion.

Segment	Metric (¥ billion)	FY2025	FY2024
MEDICEO Business	Net Sales	2,466.1	2,370.2
MEDICEO Business	Gross Profit	152.3	150.3
MEDICEO Business	SG&A Expenses	128.0	125.1
MEDICEO Business	Operating Profit	24.2	25.2
MEDICEO Business	Operating Profit excluding the two items above	28.6	26.5
PALTAC Business	Net Sales	1,237.8	1,188.0
PALTAC Business	Gross Profit	92.3	88.9
PALTAC Business	SG&A Expenses	65.8	60.9
PALTAC Business	Operating Profit	26.4	28.0
AGRO&FOOD Business	Net Sales	117.3	116.8
AGRO&FOOD Business	Gross Profit	16.3	16.4
AGRO&FOOD Business	SG&A Expenses	14.0	14.0
AGRO&FOOD Business	Operating Profit	2.3	2.4
AGRO&FOOD Business	Operating Profit excluding goodwill / intangible asset amortization	4.3	4.5

FY2026 Forecast

For FY2026 (the fiscal year ending March 31, 2027) the company presents a provisional forecast of net sales of ¥3,944.0 billion (up 3.3%) and operating profit of ¥55.0 billion (up 3.4%), while ordinary profit is projected to fall 5.6% to ¥71.5 billion and profit attributable to owners of parent to fall 8.3% to ¥39.0 billion. The materials state that this forecast does not take into account the impact of making PALTAC a wholly owned subsidiary, and does not include any gains from sales of investment securities. The company anticipates a positive impact on net income, EPS and ROE from the incorporation of net income attributable to minority shareholders of PALTAC, and says it will announce an earnings forecast after PALTAC becomes a wholly owned subsidiary at an appropriate time.

Item (¥ billion)	FY2026 Forecast	[% of Net Sales]	FY2025 (Actual)	% of Change
Net Sales	3,944.0	—	3,817.3	+3.3%
Gross Profit	269.5	[6.83%]	260.9	+3.3%
SG&A Expenses	214.5	[5.44%]	207.8	+3.2%
Operating Profit	55.0	[1.39%]	53.1	+3.4%
Ordinary Profit	71.5	[1.81%]	75.7	(5.6%)
Profit Attributable to Owners of Parent	39.0	[0.99%]	42.5	(8.3%)

Shareholder Returns

MEDIPAL raised the FY2025 year-end dividend by ¥2 to ¥34 per share, taking the annual dividend to ¥66, and plans an annual dividend of ¥68 for FY2026 (¥34 at the second quarter and ¥34 at year-end). The materials note dividend increases for 14 consecutive periods since FY2012. The dividend policy is to maintain or increase the dividend payout ratio on earnings before amortization of goodwill and amortization of intangible assets arising from the growth investments set forth in the Medium-Term Vision. The company also reports a total shareholder return ratio of 40% on a cumulative basis for the four years from FY2022 to FY2025, measured against profit before deduction of goodwill amortization and intangible asset amortization arising from growth investments outlined in the Medium-Term Vision.

Dividend per share	FY2024	FY2025	FY2026 (Forecast)
2Q	¥30	¥32	¥34
Year-end	¥32	¥34	¥34
Total	¥62	¥66	¥68

On strategic shareholdings, the policy is to reduce them to 10% or less of net assets and to ¥50 billion or less by March 31, 2027. The amount of strategic shareholdings as of March 31, 2026 was ¥96.7 billion.

Medium-Term Plan / Topics

The company is converting PALTAC into a wholly owned subsidiary, citing structural changes in the business environment — the shift from hospital-centric models to community and home-based support, severe labor shortages and surging logistics costs, and accelerated restructuring and consolidation of the retail industry — and the aim of evolving from a collection of individual entities into a unified corporate group, leveraging management resources across the group to generate strategic synergies in solutions, next-generation logistics models, data-driven operations and personnel exchanges.

For FY2026 the company is driving five growth strategies under the 2027 MEDIPAL Medium-Term Vision: expansion of overseas business; expansion of the preventive and pre-disease business and the AGRO&FOOD business; enhancement of the business with and in digital; building a sustainable logistics business; and value co-creation in community healthcare. Specific initiatives cited include the joint development and commercialization agreement for the new drug candidate JR-479 concluded with JCR Pharmaceuticals Co., Ltd. in August 2025 and the acceleration of three ultra-rare-disease pipelines (JR-446, JR-471 and JR-479) acquired from JCR Pharmaceuticals; the completion of the share acquisition of Cygni Holdings, Inc. by MP AGRO CO., LTD. in January 2026 to expand the companion animal market; and in the PALTAC business the decision to construct a new logistics center, “RDC Kaizuka (tentative name),” in Kaizuka City, Osaka Prefecture, with total planned investment of ¥34.9 billion and an expected start date of March 2030.

On cash flows, cash and cash equivalents at the end of FY2025 were ¥286.5 billion, up from ¥259.3 billion at the end of FY2024, with cash flows from operating activities of ¥46.5 billion.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.