M3, Inc. · TSE:2413

M3 — H1 FY2019 Earnings Presentation

45 slides from M3's earnings presentation, October 2019

  1. Slide 1: M3, Inc. Presentation Material

    M3, Inc. Presentation Material October 2019 Copyright © 2019 M3, Inc. All rights reserved.

  2. Slide 2: Forward-looking statements notice

    The following presentation contains forecasts, future plans, management targets and other forward-looking projections relating to M3, Inc. and/or its group. These statements are drawn from assumptions of future events based on data currently available to us, and there exist possibilities that such a

  3. Slide 3: FY2019 H1 Consolidated Results

    FY2019 H1 Consolidated Results IFRS (mn yen) FY2018 H1 FY2019 H1 YoY Sales 53,275 61,545 +16% Operating Profit 13,875 16,549 +19% Pre-tax Profit 13,993 16,597 +19% Net Profit 9,626 11,312 +18% Copyright © 2019 M3, Inc. All rights reserved. 2

  4. Slide 4: FY2019 H1 Consolidated Results by Segment

    FY2019 H1 Consolidated Results by Segment (mn yen) FY2018 H1 FY2019 H1 YoY Medical Sales 18,403 22,269 +21% Platform Profit 6,134 7,404 +21% Evidence Sales 10,975 10,739 -2% Domestic Solution Profit 2,764 2,209 -20% Career Sales 7,711 8,760 +14% Solution Profit 2,750 3,150 +15% Other Emerging Sales

  5. Slide 5: Consolidated Operating Profit Change Analysis

    Consolidated Operating Profit Change Analysis Unit: mn yen Temporary dip Expansion across due to ending of multiple businesses, VC investment large project with profit contribution valuation from StemRim increase Gradual contribution from Growth 16,549 previous upfront remains investment 208 healthy

  6. Slide 6: FY2019 H1 Overview

    FY2019 H1 Overview  Aggressive upfront investments beginning to contribute. Marketing service orders grew 41% yoy in H1, with newly consolidated Ultmarc Medical also contributing Platform  Upfront investment in Y’s impacted profits negatively by 220 mn yen; profit growth would otherwise have been

  7. Slide 7: M3's Growth: Medical Platform

    Medical Platform Evidence Solution Career Solution M3’s Growth Emerging Businesses Copyright © 2019 M3, Inc. All rights reserved. 6

  8. Slide 8: Doctor's Time Allocation vs Pharma's Budget Allocation

    Doctor’s Time Allocation vs Pharma’s Budget Allocation Doctors spend the most time collecting information via the Internet. However, pharmaceutical firms operating in Japan spend the majority of their marketing budget on off-line sales rep related costs. Time Allocation Marketing Budget Allocation o

  9. Slide 9: Medical Platform Growth Potential in Japan of 4~5x

    Medical Platform Growth Potential in Japan Currently Full Potential (approx.) Main 70 100 CLIENTS Companies Companies Growth Potential ¥1 bn ~ ¥1.5 bn of 4~5x SALES (approx.) per client current levels drivers: per ¥500 mn  # of products CLIENT  # of opt-in MDs  Added value of contents In addition

  10. Slide 10: Recovery in Marketing Support Service Orders

    Recovery in Marketing Support Service Orders Marketing Support Service Orders  New staff +41% development and orders both accelerating in tandem  Double digit sales growth expected in FY19 with expansion in both personnel and project scale FY18 FY19 H1 H1 Copyright © 2019 M3, Inc. All rights reser

  11. Slide 11: M3's Growth: Evidence Solution

    Medical Platform Evidence Solution Career Solution M3’s Growth Emerging Businesses Copyright © 2019 M3, Inc. All rights reserved. 10

  12. Slide 12: Sales and Profit Trend of Evidence Solution

    Sales and Profit Trend of Evidence Solution (mn yen) Sales FY19 FCT Segment Profit 22,313 22,633 24 bn yen 22,084 19,992  Ongoing projects continue steadily, while completion of large projects created a 13,195 momentary dip 10,739  Backlog remains steady at 24 bn yen. Upfront 6,554 5,985 personnel

  13. Slide 13: M3 Group: Accelerated Trial Completion

    M3 Group: Accelerated Trial Completion  Mr. Finder finds highly motivated doctors at sites with potential patients  Trial process management executed in similar fashion to web based marketing (High speed PDCA, conversion management, IT tools utilization) Global Trial: Domestic Trial: Endocrinology

  14. Slide 14: M3's Growth: Career Solution

    Medical Platform Evidence Solution Career Solution M3’s Growth Emerging Businesses Copyright © 2019 M3, Inc. All rights reserved. 13

  15. Slide 15: Sales and Profit Trend of Career Solutions

    Sales and Profit Trend of Career Solutions (mn yen) Sales FY19 FCT Segment Profit 16 bn yen 13,710 Business scope 10,880 expansion from increase in staff and 8,631 8,760 productivity 6,925 Fully absorbed hiring 5,712 impact, resulting in 4,594 accelerated growth 3,847 rate 3,235 2,871 3,150 2,191

  16. Slide 16: M3's Growth: Emerging Businesses

    Medical Platform Evidence Solution Career Solution M3’s Growth Emerging Businesses Copyright © 2019 M3, Inc. All rights reserved. 15

  17. Slide 17: Sales and Profit Trend of Emerging Businesses

    Sales and Profit Trend of Emerging Businesses (mn yen) Sales Segment Profits FY19 FCT 16 bn yen 12,692  Each business on steady growth path, with expansion in next growth drivers 7,140  Seeds rocket 6,903 investment StemRim IPO gained high valuation 2,484  Overall profits grew 1,697 +36% despite

  18. Slide 18: M3's Growth: Overseas

    Medical Platform Evidence Solution Career Solution M3’s Growth Emerging Businesses Copyright © 2019 M3, Inc. All rights reserved. 17

  19. Slide 19: 5.5+ million Physician Members and Panelists (Global)

    Number of Physician Members and Panelists (Global) (thousand) 5,500 Other Nations (M3 Global Research, 5,000 4,500 5.5+ million MDLinx, Russia) members worldwide Korea (Medigate) 4,000 India (m3india.in) 3,500 3,000 China (Medlive) 2,500 2,000 France, Germany, Spain 1,500 (VidalGroup) 1,000 U.K. (Do

  20. Slide 20: Sales and Profit Trend of Overseas

    Sales and Profit Trend of Overseas (mn yen) Sales FY19 FCT Segment Profit 25,124 30 bn yen 22,425 80% of profit growth was from Asia, 20% was from U.S. clinical 16,338 trials and career 13,977 business 13,810 10,980 Business expansion acceleration in all APAC countries 6,661 (China, India, and 4,0

  21. Slide 21: China: Membership Expansion

    China: Membership Expansion Number of Physician Members in China (thousands) Marketing services 2,869 for drug companies 2,784 2,657 starting with MR-kun, 2,561 and research 2,406 services showed 2,243 steady growth 2,147 1,9852,026 MR-kun is now being 1,908 1,838 utilized by 15 pharma 1,753 compa

  22. Slide 22: New Initiatives Update

    New Initiatives Update Copyright © 2019 M3, Inc. All rights reserved. 21

  23. Slide 23: Business Scope Expansion and Growth Potential

    Business Scope Expansion and Growth Potential 2010 2014 2018 2022 Country ： 3 → 5 (1.5x) → 10 (3x) → Similar pace Business Types ： 6 → 10 (1.5x) → 26 (4x) → of growth expected Business Units (Type x Country) ： 10 → 18 (2x) → 41 (4x) → over the next 4 years Sales (bn) ： 140 → 370 (2.5x) → 945 (7x) →

  24. Slide 24: Business Scope Expansion and Growth Potential

    Business Scope Expansion and Growth Potential Recent Strategic 2010 2014 2018 Development Country ： 3 → 5 (1.5x) → 10 (3x)  Stream-I  CaNoW Business Types ： 6 → 10 (1.5x) → 26 (4x)  1P1Y Fund  Entry into Business Units (Type x Country) ： 10 → 18 (2x) → 41 (4x) EHR business in France Sales (bn) ：

  25. Slide 25: Business Scope Expansion and Growth Potential

    Business Scope Expansion and Growth Potential Recent Strategic 2010 2014 2018 Development Country ： 3 → 5 (1.5x) → 10 (3x)  Stream-I  CaNoW  1P1Y Business Types ： 6 → 10 (1.5x) → 26 (4x) Fund  Entry into Business Units (Type x Country) ： 10 → 18 (2x) → 41 (4x) EHR business in France Sales (bn) ：

  26. Slide 26: Comparing Healthcare to Typical Businesses

    Comparing Healthcare to Typical Businesses Typical Business Healthcare Business Product Product Provider Client Provider Client User Patient User Decision- Decision- Doctor maker maker Insurance Payer Plan / Payer Companies Simple “Make & Sell” world A world where “Win-win” solutions are required to

  27. Slide 27: 4Ps of Marketing is not enough

    4Ps of Marketing is not enough Product Place Price Promotion There is a limit to the 4P theory when dealing with Medical issues… Copyright © 2019 M3, Inc. All rights reserved. 26

  28. Slide 28: 7Ps of Healthcare Business

    7Ps of Healthcare Business 3: 7P 7 P’s Description Example Performance Target  Performance  Concrete  Patient reduction Target directionality of  Medical cost redux solution Technology Place /  Philosophy  Fundamental  Overall optimum over Platform Process principle local optimum  Technology

  29. Slide 29: Stream-I, Inc.

    Establishment of Stream-I, Inc. with Shionogi & Co., Ltd. 51% 49% Stream-I, Inc. (CEO: Takuko Sawada (Director, Executive Vice President of Shionogi & Co., Ltd.) Mission: Reduce as many patients who suffer from disease as possible 2020~: 2025~: Provide holistic solutions to Global expansion influenz

  30. Slide 30: Strategic Significance of the JV

    Strategic Significance of the JV  Provide holistic disease solutions through not only pharmaceuticals, but via merging of technology and peripheral services (such as AI, LINE healthcare, drug delivery, etc.)… A true “7P” project  A large step in commitment towards creating solutions to medical iss

  31. Slide 31: Expansion of M3's Addressable Market

    Expansion of M3’s Addressable Market Former Market 7P Project Market National Healthcare Expenditure (Japan) National Healthcare Expenditure (Japan) 42.4 trillion yen 42.4 trillion yen Target Market Going Forward Other Other 31.8 Ocular tn yen Diabetes Fracture Former Neurological Target Market Rena

  32. Slide 32: Business Scope Expansion and Growth Potential

    Business Scope Expansion and Growth Potential Recent Strategic 2010 2014 2018 Development Country ： 3 → 5 (1.5x) → 10 (3x)  Stream-I  CaNoW  1P1Y Business Types ： 6 → 10 (1.5x) → 26 (4x) Fund  Entry into Business Units (Type x Country) ： 10 → 18 (2x) → 41 (4x) EHR business in France Sales (bn) ：

  33. Slide 33: CaNoW is… Can + Now

    CaNoW is… A project to grant the wishes of patients through corporate sponsorship Can + Now “I wish to visit my workplace where I haven’t been to since I became ill.” “I wish to attend the wedding of my grandchild, who lives far away.” “I wish to visit the diner where I frequented when I was a stude

  34. Slide 34: CaNoW Concept

    CaNoW Concept “Find the passion to live by bringing dreams to reality” Common Issues Aspired Direction ・Solely focused on ・Focus on the treatment from illness “passion” to live ・Feel “defeated” ・A life with joy is a life without recovery or of “victory” improvement ・Support to make the ・Difficult to

  35. Slide 35: CaNoW Solutions

    CaNoW Solutions Problem CaNoW Support  Support from 460,000 qualified medical staff, over 200 support Where can I find staff across Japan, and M3 appropriate group’s 900 medical certificate supporters holders  Arrangement according to required medical care and execution (cost consciousness)  Car

  36. Slide 36: CaNoW aims to fulfill over 1000 patient wishes

    CaNoW aims to fulfill over 1000 patient wishes over the next 3 years Creating a social movement to “overcome illness, and illuminate lives” Copyright © 2019 M3, Inc. All rights reserved. 35

  37. Slide 37: Business Scope Expansion and Growth Potential

    Business Scope Expansion and Growth Potential Recent Strategic 2010 2014 2018 Development Country ： 3 → 5 (1.5x) → 10 (3x)  Stream-I  CaNoW  1P1Y Business Types ： 6 → 10 (1.5x) → 26 (4x) Fund  Entry into Business Units (Type x Country) ： 10 → 18 (2x) → 41 (4x) EHR business in France Sales (bn) ：

  38. Slide 38: Establishment of Internal CVC "1P1Y Fund"

    Establishment of Internal CVC* “1P1Y Fund” M3’s Mission: “Making use of the Internet to increase, as much as possible, the number of people who can live longer and healthier lives, and to reduce, as much as possible, the amount of unnecessary medical costs” Investment Line 10 billion yen Investment

  39. Slide 39: Advantages of the 1P1Y Fund

    Advantages of the 1P1Y Fund Traditional CVC 1P1Y Fund Predominant and Depends on the private extensive medical eco- Sourcing network of the venture system that attracts (Project Excavation) capitalist several hundred proposals Investment Process annually Limited number of CVCs Substantial synergy Va

  40. Slide 40: Business Scope Expansion and Growth Potential

    Business Scope Expansion and Growth Potential Recent Strategic 2010 2014 2018 Development Country ： 3 → 5 (1.5x) → 10 (3x)  Stream I  CaNoW  1P1Y Business Types ： 6 → 10 (1.5x) → 26 (4x) Fund  Entry into Business Units (Type x Country) ： 10 → 18 (2x) → 41 (4x) EHR business in France Sales (bn) ：

  41. Slide 41: Overview of Weda S.A.S.

    Overview of Weda S.A.S.  Headquarters: Montpellier (France)  Established: 2010  Description of Business: Development and sales of cloud based electronic health records (EHR) Paris • Over 50% EHR market share in France’s - Over 90% of GPs use EHRs in France - Continued migration to cloud based EHR

  42. Slide 42: Significance and Aim of Acquisition

    Significance and Aim of Acquisition ＋  Business Expansion in France: entry into cloud based EHR business • First entry into new business outside of anglo-phone countries • Low risk entry by vertical integration of long-standing customer base  Expansion through complementary businesses synergies of

  43. Slide 43: Business Scope Expansion and Growth Potential

    Business Scope Expansion and Growth Potential 2010 2014 2018 2022 Country ： 3 → 5 (1.5x) → 10 (3x) → Similar pace Business Types ： 6 → 10 (1.5x) → 26 (4x) → of growth expected Business Units (Type x Country) ： 10 → 18 (2x) → 41 (4x) → over the next 4 years Sales (bn) ： 140 → 370 (2.5x) → 945 (7x) →

  44. Slide 44: Annual Results & Forecast for FY2019

    Annual Results & Forecast for FY2019 Sales Operating Profit & Net Profit (mn yen) 130,000 (mn yen) 35,000 30,800 113,059 Operating Profit Net Profit 27,486 94,471 25,050 24,000 21,346 78,143 20,022 19,225 64,660 16,938 16,061 51,346 13,738* 13,493 10,428 36,759 9,294 8,878* 7,648 26,007 6,031 5,598

  45. Slide 45: Creating New Value in Healthcare

    Creating New Value in Healthcare M3 Medicine Media Metamorphosis Healthcare sector is enormous… “Making use of the Internet to increase, as much as possible, the number of people who can live longer and healthier lives, and to reduce, as much as possible, the amount of unnecessary medical costs” - t

M3 — H1 FY2019 Earnings Presentation on 6ix