Cellsource Co., Ltd. · TSE:4880
Cellsource — FY10/2023 Earnings Presentation
64 slides from Cellsource's earnings presentation, Dec 15, 2023
Slide 1: Financial Result Presentation Fiscal Year Ending October 2023
Financial Result Presentation Fiscal Year Ending October 2023 CellSource Co., Ltd (TSE Prime: 4880) December 15, 2023
Slide 2: Table of Contents
Table of Contents 1 Topics 2 Financial Results for FY10/2023 3 KPIs 4 Current Assessment of Contract Processing Services and Future Policy 5 Business Highlights 6 Earnings Forecast for FY10/2024 01 CellSource Co., Ltd. All Right Reserved
Slide 3: Topics
Topics 02 CellSource Co., Ltd. All Right Reserved
Slide 4: Topics
Topics Changed listing to the Prime Market of the Tokyo Stock Exchange (October 6, 2023) Paid the first dividends and revised the dividend policy FY10/2023 Year-end dividend per share of 20 yen for FY10/2023 (commemorative dividend of 15 yen + ordinary dividend of 5 yen) Basic policy is to pay conti
Slide 5: New Management Structure
New Management Structure Enter a new value creation phase, supported by explosive growth of existing businesses and new business development Candidate for Representative Director & Chief Executive Officer (CEO) Takashi Sawada Candidate for Representative Director Sales promotion & Chief Transformati
Slide 6: Achieving Discontinuous Growth
Achieving Discontinuous Growth Exosome business Egg freezing and storage business Global business Present Regenerative medicine business 05 CellSource Co., Ltd. All Right Reserved
Slide 7: New Management Structure
New Management Structure Candidate for Representative Director & Chief Executive Officer (CEO) Takashi Sawada 1981 Joined ITOCHU Corporation 1998 Vice President, Fast Retailing Co., Ltd. 2005 Founded Revamp Corporation Representative Director and President , Revamp Corporation 2016 Representative Di
Slide 8: Financial Results Fiscal Year Ending October 2023
Financial Results Fiscal Year Ending October 2023 07 CellSource Co., Ltd. All Right Reserved
Slide 9: Performance Highlights for FY10/2023
Performance Highlights for FY10/2023 Net Sales Operating Profit Profit JPY 4.51 +5.5 % YoY billion JPY 1.22 -22.2 % YoY billion JPY 923 -9.3 % YoY million Operating Profit Number of Contract Number of Partner Margin Processing Orders Medical Institutions 27.1 -9.7 pp YoY 26,633 +15.0 % YoY 1,749 +37
Slide 10: Performance Highlight
Performance Highlight Q4 FY10/2022 Q4 FY10/2023 YoY FY10/2022 FY10/2023 YoY Forecast Achievement Millions of yen rate Net sales 1,400 1,104 - 21.2% 4,273 4,510 + 5.5% 4,806 93.8% Gross profit 1,026 753 - 26.6% 3,064 3,185 + 3.9% - - Gross profit margin 73.3 % 68.2% - 5.1 pt 71.7% 70.6% - 1.1 pt - -
Slide 11: Executive Summary
Executive Summary Sales from the mainstay contract processing services grew steadily, increasing 13% YoY. Net sales, however, were up 5% YoY, in reaction to the sharp growth in B2B cosmetics sales seen a year ago Sales and profits fell short of the forecast, because sales of contract processing serv
Slide 12: Net Sales
Net Sales Full- year net sales were up YoY, with growth in contract processing services offsetting the impact of lower sales in cosmetics sales. For details on contract processing service sales, please see Slide 25, Current Assessment of Contract Processing Services and Future Policy Millions of yen
Slide 13: SG&A Expenses
SG&A Expenses SG&A expenses increased YoY, mainly due to investment in personnel expansion, office relocation, and new production facility acquisition Millions of yen Other SG A expenses have significantly FY10/2022 FY10/2023 YoY increased mainly due to office relocation 500 Personnel expenses + out
Slide 14: Impact of Office Relocation and New Production Facility Acquisition
Impact of Office Relocation and New Production Facility Acquisition Rent sharply increased in FY10/2023, as we temporarily paid rent for both the new and old office and acquired a new production facility. However, we do not expect to pay double rent from FY10/2025 onward as we completely move out fr
Slide 15: Number of Employees
Number of Employees Continued building human capital to achieve growth Number of employees Design FTE Support growth in corporate 200 value with creativity Business Development / R&D 150 149 Develop and promote new businesses 7 that can help realize discontinuous growth 10 109 40 Corporate 5 100 90
Slide 16: Operating Profit
Operating Profit Operating profit in Q4 FY10/2023 declined YoY, due to an increase in SG&A expenses aimed at driving growth Millions of yen 632 600 FY10/2023 500 JPY 1,221million 448 - 22.2% YoY 383 Operating profit margin 27.1 % 400 351 313 308 300 242 256 244 246 200 180 178 FY10/2022 100 JPY 1,57
Slide 17: Balance Sheet
Balance Sheet Financial position remained strong Millions of yen 452 Cash and deposits Current liabilities Other current asset Non -current liabilities 225 6,000 Non -current assets Net assets Equity and cash/deposits increased due to public offering of shares at the 4,500 4,781 time of stock listin
Slide 18: KPIs
KPIs 17 CellSource Co., Ltd. All Right Reserved
Slide 19: Business KPI Highlights for FY10/2023
Business KPI Highlights for FY10/2023 Number of partner Blood-derived product ASC contract medical institutions contract processing orders processing orders 1,749 +371 YoY 24,550 +14.1% YoY 2,083 +25.9% YoY 18 CellSource Co., Ltd. All Right Reserved
Slide 20: Number of Partner Medical Institutions
Number of Partner Medical Institutions The network of partner medical institutions is steadily expanding No. of partner medical institutions 1,749 1,654 1,557 1,500 1,455 1,378 1,301 1,204 1,109 1,028 Cumulative total 1,000 910 (FY10/2023) 767 653 1,749 500 +371 YoY 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 21: Number of Contract Processing Orders for Blood-derived Products
Number of Contract Processing Orders for Blood-derived Products The number of contract processing orders from medical institutions specializing in self-funded care fell QoQ 80,000 Cumulative orders 73,670 Quarterly orders 70,000 68,052 61,483 60,000 55,120 5,618 6,000 No. of cumulative orders 49,120
Slide 22: Number of Contract Processing Orders for Adipose-derived Stem Cells (ASCs)
Number of Contract Processing Orders for Adipose- derived Stem Cells (ASCs) Number of contract processing orders from medical institutions specializing in self-funded care declined QoQ 8,000 Cumulative orders 7,620 700 Quarterly orders 7,189 7,000 6,572 600 6,000 6,057 5,537 500 No. of cumulative or
Slide 23: Daily Average Number of Contract Processing Orders
Daily Average Number of Contract Processing Orders Daily average number of orders 90 87.0 82.5 79.0 78.8 80.2 77.5 78.5 76.3 75.4 76.0 74.8 69.9 69.1 68.668.6 66.2 65.9 64.2 62.8 59.2 60.1 60 50.949.8 50.8 47.4 47.948.648.5 46.0 45.4 44.0 43.7 41.8 42.0 35.2 36.3 32.1 33.6 31.3 26.9 27.3 30 25.0 23.
Slide 24: Operational KPI Highlights for FY10/2023
Operational KPI Highlights for FY10/2023 CellSource Growth Rate (CSGR) Sales Growth Rate EBITDA Margin 34.4 5.5 28.9 CellSource Growth Rate = Sales Growth Rate + EBITDA Margin YoY Human Capital ROI Number of Employees EBITDA per employee (FTE-based) (FTE-based) 104.0 182 JPY 7,167k Human Capital ROI
Slide 25: Quarterly Results
Quarterly Results FY10/2021 FY10/2022 FY10/2023 M i lli o ns o f yen Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net Sales 622 720 761 817 820 876 1,175 1,400 1,059 1,111 1,235 1,104 Contract processing services 381 429 495 527 549 581 757 887 743 735 873 793 Consulting services 75 82 83 70 59 59 111 125 11
Slide 26: Current Assessment of Contract Processing Services and Future Policy
Current Assessment of Contract Processing Services and Future Policy 25 CellSource Co., Ltd. All Right Reserved
Slide 27: Contracting Processing Service Sales
Contracting Processing Service Sales While sales from medical institutions specializing in self-funded care,which account for over half of total sales in orthopedics, declined in Q4, sales from hybrid medical institutions steadily grew in line with an increasein the number of partner institutions Sa
Slide 28: Future Policy for Contract Processing Services in Orthopedics
Future Policy for Contract Processing Services in Orthopedics Sales from hybrid medical institutions are steadily expanding, demonstrating potential for substantial growth going forward. We aim to achieve stable sales growth, by forging partnerships with a greater number of hybrid institutions while
Slide 29: Growth in Hybrid Medical Institutions
Growth in Hybrid Medical Institutions There exists substantial potential for growth in both the number of partner institutions and contract processing orders per institution Present Medium-term growth potential Initiatives aimed at increasing KPIs No. of partner institutions 1,500 3,500 Expand sales
Slide 30: External Environment
External Environment Ever-increasing social security expenditures External environment surrounding medical institutions Social security expenditures FY1990 11.5 15.9 7.0 20.6 14.3 69.3 Local allocation taxes, etc. Public works expenses Treatment fees for medical care, elderly Other Education and sci
Slide 31: Transition from Insurance-covered to Self-funded Treatments
Transition from Insurance- covered to Self-funded Treatments Amid changes in the external environment, the number of medical institutions specializing in self-funded care is expected to grow, with hybrid medical institutions increasingly offering more self-funded treatment options Present Future Sel
Slide 32: Business Highlights
Business Highlights 31 CellSource Co., Ltd. All Right Reserved
Slide 33: ZERO LAB Haneda Global CPC Overview
ZERO LAB Haneda Global CPC Overview Location 3-25-22 Tonomachi, Kawasaki-ku, Kawasaki-shi, Kanagawa Quality Standard (planned) Specified Cell Processing Facility Facilities that have acquired the former GMP standards Total floor area 2,303 Service to be Transferred Processing (blood, adipose, synovi
Slide 34: Growth Strategy
Growth Strategy FUJIFILM Corporation MOCHIDA PHARMACEUTICAL CO.,LTD. Product Z University of Toyama Yokohama F. Marinos Aoyama Gakuin University Ekiden Team Fukuoka University Football Team Orthopedics Gynecology Plastic Surgery Neurology Pulmonology Medical Specialty Exosome Japan Malaysia India Ta
Slide 35: Development of Contract Processing Services
Development of Contract Processing Services FUJIFILM Corporation MOCHIDA PHARMACEUTICAL CO.,LTD. Product Z Yokohama F. Marinos Aoyama Gakuin University Ekiden Team Fukuoka University Football Team Orthopedics Gynecology Plastic Surgery Neurology Pulmonology Medical Specialty Exosome Japan Malaysia I
Slide 36: Paper on PFC-FD Published in International Academic Journal for the First Time
™ Paper on PFC-FD Published in International Academic Journal for the First Time Research paper on knee arthritis treatment prepared using CellSource s blood-derived product contract processing service was published in an international academic journal for the first time Published in KSSTA (Official
Slide 37: Progress in Development of Synovium-derived Stem Cell Contract Processing Service
Progress in Development of Synovium-derived Stem Cell Contract Processing Service Clinical application began Partner medical institutions (8) Clinical application began at Tokyo Tokyo Medical and Dental Medical and Dental University University Kobe University Hospital Awareness of the service has be
Slide 38: Therapeutic potential of synovium-derived stem cells
Progress in Development of Synovium-derived Stem Cell Contract Processing Service Synovium-derived stem cells from the knee are effective in Therapeutic potential of treating knee joint injuries and disorders synovium-derived stem cells Synovium-derived stem cells have excellent chondrogenic potenti
Slide 39: Growth Strategy
Growth Strategy Product Z Orthopedics Gynecology Plastic Surgery Neurology Pulmonology Medical Specialty Exosome Japan Malaysia India Target Country We continue to operate businesses in the plastic surgery area, marketing support, and data utilization, but there is no businessprogress that would hav
Slide 40: Egg Freezing and Storage Service
Egg Freezing and Storage Service A recurring -revenue business We have an advantage in the newly developing market, backed by a proven track record in contract processing anticipated to generate Expect an increase in public subsidies, as was the case in stable earnings Tokyo External factors, includ
Slide 41: The need for egg freezing is growing as an option in life planning
Egg Freezing and Storage Service About 1 out of 4.4 couples are being tested or treated for The need for egg freezing infertility, and this ratio is continuing to rise Egg freezing is gaining much attention as a life planning option is growing as an option for women in life planning Tokyo metropolit
Slide 42: Egg Freezing and Storage Service: four strengths
Egg Freezing and Storage Service 1 Contracts with 238 ob- gyn clinics out of total 619 registered infertility treatment centers nationwide Utilizing our four strengths, 2 Ability to provide in- house contract operations using ultra- low temperature long - term storage technology developed in the Cel
Slide 43: Growth Strategy
Growth Strategy Product Z Orthopedics Gynecology Plastic Surgery Neurology Pulmonology Medical Specialty Exosome Japan Malaysia India Target Country We continue to operate businesses in the plastic surgery area, marketing support, and data utilization, but there is no businessprogress that would hav
Slide 44: Launch of PFC-FD Services in India and Malaysia
Launch of PFC-FD™ Services in India and Malaysia Transferring technology to local operating company in India, with an eye to launching the business in Q1 FY10/2024 Japan Total population 125 million people (2020) 1 Elderly population ratio 28.9 % 38.4 % (2020) (2065) 1 India License agreement that a
Slide 45: Growth Strategy
Growth Strategy Product Z Orthopedics Gynecology Plastic Surgery Neurology Pulmonology Medical Specialty Exosome Japan Malaysia India Target Country We continue to operate businesses in the plastic surgery area, marketing support, and data utilization, but there is no businessprogress that would hav
Slide 46: Entry into Vet Medicine, Partnership with Anicom Holdings
Entry into Vet Medicine, Partnership with Anicom Holdings Since forging a partnership in June 2022, won the first order in December after conducting clinical research in veterinary medicine Number of animals dogs and cats Anicom Pet Insurance Animal Hospital Group No.1 share of the animal insurance
Slide 47: Exosome Strategy for Achieving Discontinuous Growth
Exosome Strategy for Achieving Discontinuous Growth 46 CellSource Co., Ltd. All Right Reserved
Slide 48: Growth Strategy
Growth Strategy Product Z Orthopedics Gynecology Plastic Surgery Neurology Pulmonology Medical Specialty Exosome Japan Malaysia India Target Country We continue to operate businesses in the plastic surgery area, marketing support, and data utilization, but there is no businessprogress that would hav
Slide 49: Overview of Exosome
Overview of Exosome Overview of exosomes 1 Research has suggested therapeutic effects Exosomes are extracellular vesicles that are 50-150nm for various disorders (nanometer; one billionth of a meter) in diameter and released from cells Studies have suggested that exosomes may have therapeutic effect
Slide 50: Exosome Drug Discovery Platform
Exosome Drug Discovery Platform Patients Orthopedics Pharmaceutical company B Obstetrics Gynecology License out Raw materials procurement network Pharmaceutical company Blood IP Strategy C Neurology Adipose Synovium R&D IP Pharmaceutical company D Pulmonology 49 CellSource Co., Ltd. All Right Reserv
Slide 51: Drug Discovery Roadmap with Kaken Pharmaceutical
Drug Discovery Roadmap with Kaken Pharmaceutical Feasibility study underway with Kaken Pharmaceutical toward discovering Japan s first exosome-based drugs Aim to enter the clinical study phase in two to four years Exploratory Non -clinical Early -stage Late -stage Approval Sales research study clini
Slide 52: Earnings Forecast for FY10/2024
Earnings Forecast for FY10/2024 51 CellSource Co., Ltd. All Right Reserved
Slide 53: Earnings Forecast for FY10/2024
Earnings Forecast for FY10/2024 FY10/2023 FY10/2024 YoY Notes Millions of yen (Actual) (Forecast) Expects steady growth in sales of contract processing services for both blood - derived products and ASCs Net sales 4,510 5,368 + 19.0% Synovium - derived stem cell contract processing services are expe
Slide 54: Factors affecting EBITDA
Factors affecting EBITDA Millions of yen Investments in exosome drug discovery, R&D investment, primarily related overseas business, and egg freezing to exosome drug discovery platform 396 and banking business 77 1,417 1,302 -255 -44 -59 1,130 -287 Plan to increase headcount, Capital increase throug
Slide 55: Appendix
Appendix 54 CellSource Co., Ltd. All Right Reserved
Slide 56: Company Overview
Company Overview Company name CellSource Co., Ltd. Location 11F, Shibuya Cast, 1-23-21 Shibuya, Shibuya-ku, Tokyo, Japan CEO and President Date of establishment November 30, 2015 Representative Masato Tsumamoto Masato Tsumamoto Fiscal year end October No. of Employees 151 (present as of October 31,
Slide 57: Governance
Governance Director External Director External Director Masayuki Yamakawa Norio Murakami Takashi Sawada 1989 Graduated from Faculty of Medicine, Tottori University 1970 Graduated from Faculty of Engineering, Kyoto University. 1981 Graduated from Sophia University Faculty of Science and Technology 19
Slide 58: Purpose / Mission / Values
PURPOSE / MISSION / VALUES PURPOSE MISSION CHANGE OUR FUTURE FREEDOM OF LIFE WITH MEDICAL REVOLUTION VALUESE 1. IDEAS INTO REALITY 4. SIMPLE AND CLEAR 2. ISSUE DRIVEN 5. RESPECT AND FUN 3. ZERO-BASED DECISION 6. BE HAPPY, MAKE HAPPINESS 57 CellSource Co., Ltd. All Right Reserved
Slide 59: Legal Changes Gave Birth to Regenerative Medicine Market
Legal Changes Gave Birth to Regenerative Medicine Market We captured the opportunity of expanding legal landscape in regenerative medicine market to found CellSource Implementation of Research Category Treatment Category the Regenerative Medicine 2013 Act on the Safety of Regenerative Medicine Promo
Slide 60: Overview of Regenerative Medicine-related Business
Overview of Regenerative Medicine-related Business CellSource is a one-stop shop offering medical institutions comprehensive services to conduct regenerative medicine Medical Institutions Patients Treatment Regenerative Medicine Center Processing Banking Consulting Treatment Service Blood-derived pr
Slide 61: Overview of Regenerative Medicine-related Business: Sales by Service
Overview of Regenerative Medicine-related Business ™ Platelet-derived factor concentrate freeze dry (PFC-FD ) Sales by Service Adipose-derived stem cell processing service (ASC) Contract processing Synovial-derived stem cell processing outsourcing service Cosmetics services FatBank service sales, et
Slide 62: Processing Business Scheme
Processing Business Scheme Serving as a central kitchen for regenerative medicine ™ Medical Institutions Patients Platelet derived factor concentrate freeze dry (PFC-FD ) Lyophilized product can be stored at room temperature for a long time at medical institutions Whole Blood Patent Blood processing
Slide 63: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements The materials and information provided in this presentation contain so-called "forward-looking statements." These statements are based on current expectations, forecasts, and assumptions accompanying risks, and they may involve uncertainties that
Slide 64: CellSource
CellSource