H.u.group Holdings, Inc. · TSE:4544
H.u.group — Investor Presentation (January 2021)
27 slides from H.u.group's investor presentation, Jan 14, 2021
Slide 1: Company Overview & Future Outlook
Company Overview & Future Outlook Shigekazu Takeuchi President and Group CEO H.U. Group Holdings, Inc. (TSE: 4544) January 14, 2021
Slide 2: Disclaimer
Disclaimer Disclaimer regarding forward-looking statement: The performance forecast provided in this document is prepared by the management based on currently available information and various hypotheses and ideas including significant risks or uncertainties. Please be aware that the actual performa
Slide 3: Rebranding (as of July 2020)
Rebranding (as of July 2020) Move forward from “Supporting the medical field by providing clinical tests” to “Provide the best healthcare to all people” ⚫ “Healthcare” ：Expand business domain from “Medical” to “Healthcare” ⚫ “for You” ：Provide healthcare to individual (B2C) 3
Slide 4: Our Business
Our Business • A unique business model: CLT and SR offer services, and IVD develops instruments and reagents • Contribute to healthcare by expanding businesses related to the medical field Medical treatment Surgery Specimens Sterilization Test results services, etc. Instruments/ reagents Clinical La
Slide 5: Net Sales/EBITDA by Segment
Net Sales/EBITDA by Segment • CLT and IVD are the two main pillars of our business FY2019 Net Sales FY2019 EBITDA ENB SRENB SR 4% 9%2% 12% 1 1 CLT IVD $1,797 $219 CLT 48% 21% Million IVD Million 62% 40% 5 1. Exchange rates: 1 USD=105 JPY
Slide 6: Our Position and Strengths: CLT Business
Our Position and Strengths: CLT Business 1 Our market share in Japanese CLT market Japanese CLT market $5.5 billion (5 years CAGR*: 1.6%) 2 1 20.4% *from 2014 to 2019 Our strengths • Coverage of large hospitals in Japan3: over 80% No.1 • Focus on advanced genetic testing ✓ In-house NGS4 testing ✓ Ex
Slide 7: Our Position and Strengths: IVD Business
Our Position and Strengths: IVD Business 2 Established 23.3% Immunoassay reagent market in Japan $1.8 billion (5 years CAGR*: 3.7%) market share in Japanese 3 immunoassay market based on installed 1 *from 2013 to 2018 instruments Strengths of Lumipulse® series in immunoassay field • # of installatio
Slide 8: Our Unique Strengths in the Clinical Testing Field
Our Unique Strengths in the Clinical Testing Field • Having two strongly positioned businesses within one group • Accelerating group unification centered around H.U. Group Research Institute CLT IVD Testing services to medical Developing instruments and institutions reagents for immunoassay Research
Slide 9: Global Footprint
Global Footprint Fujirebio Europe N.V. Fujirebio Diagnostics, Inc. Ping An SRL Medical Baylor Genetics (Baylor Miraca Genetics Laboratories Laboratories, LLC) Headquarters Main subsidiary Equity method affiliates 9
Slide 10: Baylor Genetics
Baylor Genetics 1 2 • Uniquely positioned to become the market leader in NICU/PICU and pediatric health by establishing Whole Genome Sequencing Strong reputation Commercial lab and R&D capabilities expertise in genetic testing 60% 40% Established in 2015 1. NICU: Neonatal Intensive Care Unit 2. PICU
Slide 11: Ping An SRL Medical Laboratories
Ping An SRL Medical Laboratories Instruments/ reagents sales 60% 40% Ping An SRL Medical Laboratories Consultation for Testing labs lab operation nationwide in China Imaging centers Shenzhen Tests from medical checkup applicants • Employees of Ping An Medical checkup clinics • Insurants of Ping An i
Slide 12: Our initiatives for fighting against COVID-19
Our initiatives for fighting against COVID-19
Slide 13: Our Services and Products for Detecting SARS-CoV-2
Our Services and Products for Detecting SARS-CoV-2 We provide a comprehensive testing service and products for SARS-CoV-2 detection CLT IVD High-sensitive PCR Rapid antigen test antigen test Lumipulse SARS-CoV-2 Ag ESPLINE SARS-CoV-2 Lumipulse L2400 13
Slide 14: Advantage of Automated High-Sensitive Antigen Test over PCR
Advantage of Automated High-Sensitive Antigen Test over PCR PCR High-sensitive antigen test High-throughput flow testing • Up to 240 test/hour Batch processing • Within 30 min/test Inefficient for mass-screening tests Ideal for mass-screening tests 14
Slide 15: High-Sensitive Antigen Testing Service at Major Airport Quarantines
High-Sensitive Antigen Testing Service at Major Airport Quarantines • 8 major Japanese international airport quarantines chose Lumipulse for mass- screening tests for entrants 3 strengths Airport quarantines Flow testing Saliva 40 units CTS Equivalent to PCR 8 airports SDJ + FUK KIX HNDNRT Detects S
Slide 16: Global Expansion of High-sensitive Antigen Test
Global Expansion of High-sensitive Antigen Test • Approved as CE Marked product in Aug 2020 which made EMEA an addressable market • Aiming to expand business in the US upon FDA approval • Initial demand kicked • Partnership with Centogene off in Italy • Antigen test offered in Hamburg (HAM), (over 3
Slide 17: Rapid Antigen Test (ESPLINE SARS-CoV-2)
Rapid Antigen Test (ESPLINE SARS-CoV-2) • Steady sales in Japan, emerging sales opportunity outside Japan • Superiority of ESPLINE’s sensitivity over domestic competitors1 was proven by a third-party evaluation2 Easy • No instruments Rapid • Within 10 to 30 minutes 3 Usability • POCT 1. QuickNavi-CO
Slide 18: Future of COVID-19 Testing
Future of COVID-19 Testing When vaccines/treatments become widely available, cost benefit, ease of use, and speed will become important in testing Today Future (vaccine/medicine in development) (vaccine/medicine have penetrated) High-sensitive/ PCR rapid antigen test 18
Slide 19: Summary of New Medium-term Plan 'H.U. 2025'
Summary of New Medium-term Plan “H.U. 2025 ~Hiyaku & United~”
Slide 20: 5 Year Medium-term Plan 'H.U. 2025'
5 Year Medium-term Plan “H.U. 2025” • Key milestone will be the launch of the New Central Lab in CY2022 • With the coming startup of the New Central Lab, the medium-term plan will be divided into two phases FY2020 FY2021 FY2022 FY2023 FY2024 Phase I Phase II COVID-19 Contribution Return on Investmen
Slide 21: Key Initiatives of 'H.U. 2025'
Key Initiatives of “H.U. 2025” 1 Launch of New Central Lab 2 OEM business enhancement 3 Healthcare × ICT 21
Slide 22: New Central Lab in Akiruno, Tokyo
New Central Lab in Akiruno, Tokyo Operation start Testing capacity expansion General test: Jan. 2022 300,000ID/day (tripled) Esoteric test: May 2022 Averaged COS • Full automation of lab 1 reduction/ID in FY2024 operation General test: -15% • Renewal of IT system Esoteric test: -7% 22 1. Impact from
Slide 23: Fixed Cost Reduction and Profitability Improvement
Fixed Cost Reduction and Profitability Improvement • Establish 3-site operation centered around the New Central Lab Profitability improvement • Small regional labs cover emergency needs through cost optimization New Central Lab •Consolidate general tests in Kanto area •Consolidate esoteric tests nat
Slide 24: OEM Business Enhancement
OEM Business Enhancement • Making a strategic shift towards growing OEM business • Strengthening OEM business utilizing our domestic Lumipulse track record and our ability to develop high quality raw material and reagents for immunoassay Sales growth of OEM business Supply from 3 sites (MUSD) 159 1
Slide 25: Healthcare × ICT
Healthcare × ICT • Provide an ICT solution leveraging customer base as Japan’s largest clinical lab 1 2 • Operate SaaS support system for GP 3 • Connect PHR with SaaS for GP Largest clinical lab Prevention Medical in Japan （Mailing test, etc.） checkup Test data Test data Operating Test data Test res
Slide 26: Medium-term Consolidated Financial Targets
Medium-term Consolidated Financial Targets FY2024 For 5 years cumulative Net sales Operating CAGR1 6% or more cash flow ¥150 billion or more EBITDA Free cash margin 18% or more flow2 ¥50 billion or more OP margin 10% or more Annual free cash flow to turn ROE 12% or more positive in FY2022 ROIC 8% or
Slide 27: Key Takeaways
Key Takeaways Maximizing synergy between CLT and IVD to drive growth Providing comprehensive services & products to fight against COVID-19 Creating value through the execution of “H.U. 2025” Expand into the healthcare arena 27
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