M3, Inc. · TSE:2413

M3 — Q1 FY2024 Earnings Presentation

45 slides from M3's earnings presentation, Jul 26, 2024

  1. Slide 1: M3, Inc. Presentation Material July 2024

    M3, Inc. Presentation Material July 2024 Copyright © 2024 M3, Inc. All rights reserved. 0

  2. Slide 2: Forward-looking statements disclaimer

    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: FY2024Q1 Consolidated Results

    FY2024Q1 Consolidated Results Unit: JPY MM FY2023 Q1 FY2024 Q1 YoY YoY growth in business excluding COVID Revenue 57,396 64,209 +12% related revenues, sales +16% Operating Profit 18,004 16,899 -6% Profit before tax 19,831 18,784 -5% Profit 13,554 12,750 -6% The first half started in line with the ex

  4. Slide 4: Consolidated Revenue Trend and COVID Impact

    Consolidated Revenue Trend and COVID Impact Unit: JPY MM 64,209 COVID related (clinical trials, ～1,000 56,996 57,396 vaccination support, promotion of ～3,000 therapeutic drugs and ～8,100 46,403 +16% vaccines, etc.) ～2,200 35,478 Regular businesses FY2020 FY2021 FY2022 FY2023 FY2024 Q1 Q1 Q1 Q1 Q1 In

  5. Slide 5: FY2024 Q1 Consolidated Results by Segment

    FY2024 Q1 Consolidated Results by Segment  Revenue +2% excluding FY2023 FY2024 COVID Unit: JPY MM YoY Q1 Q1  Pharma marketing: The impact of a decline in COVID- Revenue 21,947 20,969 -4% related sales became Medical apparent, but the Platform Profit 8,904 7,924 -11% fundamental DX is still progres

  6. Slide 6: FY2024Q1 Forecasts vs. Actuals

    FY2024Q1 Forecasts vs. Actuals Revenue Operating profit Initial Forecasts ～62.5 Bn ～14.0 Bn Medical Platform Evidence Solutions Career Solutions Site Solutions Overseas Other / Adjustments FY2024Q1 Act. 64.2 Bn 16.9 Bn Both revenue and operating profit are off to a solid start, partly due to the con

  7. Slide 7: Relationship between Growth Rate and COVID

    Relationship between Growth Rate and COVID Before COVID During COVID Repercussion Normalized Organic Growth Rate 10km/h 10km/h 10km/h 10km/h COVID-19 Impact 10km/h 10km/h 10km/h 20km/h 0km/h 10km/h In Total… Current MPF CS Status per Overseas Segment ES SS Currently, each segment and business is in

  8. Slide 8: M3's Triple Growth Engine + CSV

    M3’s Triple Growth Engine + CSV 1. Ecosystem 2. Individual 3. Ecosystem Expansion Business Synergy (Sagrada Familia) Development Creation Regions (12 areas) Regions (12 areas) Regions (12 areas) １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 ＭＰ ＭＰ ＭＰ Businesses (30 - 50) Bus

  9. Slide 9: Growth Engine 1: Ecosystem Expansion (Sagrada Familia)

    Growth Engine 1： Ecosystem Expansion (Sagrada Familia) Regions (12 areas) Regions (12 areas) Regions (12 areas) １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 ＭＰ ＭＰ ＭＰ Businesses (30 – 50) Businesses (30 – 50) Businesses (30 – 50) CS ＳＳ ＥＳ CS ＳＳ ＥＳ CS ＳＳ ＥＳ Others Others Oth

  10. Slide 10: Leverage 3 Major Resources to Solve Healthcare Issues

    Leverage 3 Major Resources to Solve Healthcare Issues 6.5 mil. registered doctors worldwide Overwhelming Platform Healthcare Issues × Top-notch technical professionals State-of-the-art Technology Experts from varied fields unite Problem Solving Skills Copyright © 2024 M3, Inc. All rights reserved. 9

  11. Slide 11: Business Scope Expansion and Growth Potential

    Business Scope Expansion and Growth Potential FY ： 2010 2015 2020 2023 Country ： 3 → 8 （2.5x） → 11 （3.5x） → 17 （5.5x） Business Types ： 6 → 15 （2.5x） → 35 （6.0x） → 38 （6.0x） Business Units (Type x Country) ： 10 → 24 （2.5x） → 56 （5.5x） → 73 （7.0x） Sales (bn) ： 14.6 → 64.7 （4.5x） → 169.2 （12.0x） → 238.

  12. Slide 12: Trend in M&A Volume: Programmatic M&A Strategy

    Trend in M&A Volume: Programmatic M&A Strategy 11 11 10 5 5 3 6 Domestic Overseas 7 5 6 6 1 FY2021 FY2022 FY2023 FY2024 Q1 M&A is completed with approximately 10 companies annually. For FY2024 Infrastructure for On Call Cooperation, Medcare, and MinaCare consolidations were closed. We will continue

  13. Slide 13: Cosmotec: Capital and Business Alliance with Sensome

    Cosmotec：Capital and Business Alliance with Sensome  Sensome is developing a smart clot-sensing guidewire that improves thrombectomy surgery for stroke treatment  Cosmotec obtains exclusive distribution rights in Japan  This product enables real-time monitoring of thrombus status and provision of

  14. Slide 14: Growth Image per Business Expansion Phases

    Growth Image per Business Expansion Phases Sales Trend (JPY) Businesses added after FY2023 Assumption Businesses added between FY2015 and FY2023 ～600 bil Businesses added between FY2010 and FY2015 1/4 of existing Business as of FY2010 ～120 business on top CAGR ～155 ～20% 239 bil CAGR ～60 ～210 ～15% ～1

  15. Slide 15: Business Expansion Creation Flow

    Business Expansion Creation Flow Reinforcement Structural of Ecosystem Differentiation Investment Target Expansion Self-reinforcing expansion cycle = "superbly capable staff" base also expands, and continuity is further strengthened... "business snowball" to multiply rapidly Copyright © 2024 M3, Inc

  16. Slide 16: Growth Engine 2: Individual Business Development

    Growth Engine 2： Individual Business Development Regions (12 areas) Regions (12 areas) Regions (12 areas) １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 ＭＰ ＭＰ ＭＰ Businesses (30 – 50) Businesses (30 – 50) Businesses (30 – 50) Businesses (30 – 50) CS ＳＳ ＥＳ CS ＳＳ ＥＳ CS ＳＳ ＥＳ Ot

  17. Slide 17: Pharmaceutical Sales & Marketing DX

    Pharmaceutical Sales & Marketing DX Copyright © 2024 M3, Inc. All rights reserved. 16

  18. Slide 18: Pharma Marketing Cost and TAM for M3

    Pharma Marketing Cost and TAM for M3 10 years ago Present Future M3’s Role down by ~300 bn yen TAM Industry productivity improvement from DX MR Related 99% 1.5 tn yen 95% 70～80% Costs 1.15 tn yen 700～ (2) MR Activity 800 bn yen DX Support (3) Data-driven Marketing (1) Internet Support 20～30% Marketi

  19. Slide 19: Trend of Domestic Pharmaceutical Sales Reps (MRs)

    Trend of Domestic Pharmaceutical Sales Reps (MRs) (10,000) Historical Peak 7 65,752 MRs -1,095 -522 -950 -752 46,719 MRs -2,533 in FY2023 6 -2,742 (Second largest decline ever) -3,572 -1,738 -2,166 5 -2,963 4 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 In addition

  20. Slide 20: Current Status of Pharmaceutical Marketing

    Current Status of Pharmaceutical Marketing Demand and Its Trend ＣＯＶＩＤ-19 Future After COVID • Advancement of structural digital transformation (DX) Structural changes • Further penetration of data- driven marketing Sales • Projects on a larger scale Now • Temporary decline in demand during the COVID

  21. Slide 21: As a Strategic Partner to Pharma Companies

    As a Strategic Partner to Pharma Companies Overall Trend Efforts for Renewed Growth  Rejuvenate and strengthen leadership ＣＯＶＩＤ-19  Our Products Future Continual development of services After COVID that dramatically improve the productivity of pharmaceutical company sales and marketing (currently

  22. Slide 22: Professional Staff Fortification Plan

    Professional Staff Fortification Plan Unit： Index with FY2019 as 100 375~500 Staff Fortification Reduce the no. of external consultants Initiatives while increasing the overall number  HR capacity 250 250 increase 23% 17%  Recruiter reinforcement 100 (fee scale) 77% 83% M3  New grad Employees rec

  23. Slide 23: DX of the Clinical Scene

    DX of the Clinical Scene Copyright © 2024 M3, Inc. All rights reserved. 22

  24. Slide 24: DX of Clinics: Creating a New Patient Experience

    DX of Clinics: Creating a New Patient Experience Current Post DX (new patient experience) Long waiting time Access Online reservations in lobbies Diagnosis Offline Online/Offline Hybrid Wait to pay at Head straight home Payment service desk (digital payments) Delivered to home Rx Local pharmacy or o

  25. Slide 25: M3 DigiKar EHR Growth

    M3 DigiKar EHR Growth Number of Sites Using M3 DigiKar 6,450  Cumulative number of installations is approximately 6,450. Steady progress  Co-selling with DigiKarSmart further increases the added value of DigiKar FY15 16 17 18 19 20 21 22 23 24 Incontestable #1 market share within cloud-based digit

  26. Slide 26: DX of Clinics: DigiKar Smart

    DX of Clinics： DigiKar Smart Physical Medical Institutions： Online Managing System Appointment Next Auto- Appointment Reception Patients： M3 DigiKar Smart Mobile App Payment Consultation Linking to EHR 31,000 reviews with a rating of 4.6 from users, a new patient experience created, and a high ratin

  27. Slide 27: No. of DigiKar Smart Users

    No. of DigiKar Smart Users Unit: Index with FY2021Q3 as 1 5,673 4,741 4,320  Users are rapidly penetrating DigiKar Smart as the clinic's infrastructure. 2,973 2.7 times higher than FY23Q1 2,067  Video call has been added and is 1,368 expanding as an 1,070 infrastructure for 479 telemedicine 1 44 1

  28. Slide 28: Ecosystem Synergy: Medical Data Business

    Ecosystem Synergy: Medical Data Business Unit: Index with FY2023Q1 as 100 Sales of Medical Data Business* 134 Approx. 100 1.3x FY2023 FY2024 Q1 Q1 Medical data business (actual medical practice, physician practice standards, etc.) also grew significantly along with the increase in the volume of data

  29. Slide 29: Overseas

    Overseas Copyright © 2024 M3, Inc. All rights reserved. 28

  30. Slide 30: Number of Doctor Members and Panelists (Global)

    Number of Doctor Members and Panelists (Global) Ratio of doctor members (As of June 2024) Including regions not mentioned above, more than 6.5 million doctor members and panelists, covering over 50% of doctors worldwide *The no. of doctors in Japan is based on data from the Ministry of Health, Labou

  31. Slide 31: Overseas Segment: Sales by Region

    Overseas Segment: Sales by Region Unit: JPY MM COVID related Growth rate sales within North America 19,873 +27%  Continued strong *Including approx. 10% of performance, including currency tailwinds contribution from Kantar acquisition 15,704 7,746  Clinical trial business: +21% Strengthening manag

  32. Slide 32: Overseas Growth Trends by Business

    Overseas Growth Trends by Business (FY) Unit: JPY Bn Service for Career for Clinical Trials Doctors Doctors (Platform for doctors in North (M3 Global Research: (Operation of clinical trials sites (Human resources business America, Europe, and APAC Expanding in North America, in North America) center

  33. Slide 33: Growth Engine 3: Ecosystem Synergy Creation

    Growth Engine 3： Ecosystem Synergy Creation Regions (12 areas) Regions areas) Regions (12 areas) Regions (12 areas) １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 ＭＰ ＭＰ ＭＰ Businesses (30 – 50) Businesses (30 – 50) Businesses (30 – 50) Businesses ( Businesses (30 – 50) CS ＳＳ

  34. Slide 34: Business Scope Expansion and Growth Potential

    Business Scope Expansion and Growth Potential FY ： 2010 2015 2020 2023 Country ： 3 → 8 （2.5x） → 11 （3.5x） → 17 （5.5x） Business Types ： 6 → 15 （2.5x） → 35 （6.0x） → 38 （6.0x） Business Units (Type x Country) ： 10 → 24 （2.5x） → 56 （5.5x） → 73 （7.0x） Sales (bn) ： 14.6 → 64.7 （4.5x） → 169.2 （12.0x） → 238.

  35. Slide 35: Cross-Business Synergy Creation Potential

    Cross-Business Synergy Creation Potential １ ２ ３ ４ ・・・ ｎ Number of businesses Synergy Links 0 1 3 6 nC2 Synergy potential between businesses: 73Ｃ2 = 2,628 possible linkages Copyright © 2024 M3, Inc. All rights reserved. 34

  36. Slide 36: Ecosystem Synergy Value Creation

    Ecosystem Synergy Value Creation Unit: Index with FY2023Q1 as 100 Growth rate Regular Business Overall COVID 116 Non-COVID 100 Approx. Approx. 1.2x 1.3x FY2023 Q1 FY2024 Q1 The next ten years will be based on ecosystem synergies, including internal and external collaborations, to further promote hea

  37. Slide 37: The White Jack Project

    “The White Jack Project” Phase 1 Happiness-i Pre-Onset/ After Onset/ Healthy Person Patient Rinkai Phase 2 General Public Medical (consumer) Future expanding Cancer Phase 3 Prevention priority areas Phase 4 ＥＢＨＳ HCP (e.g. wholesaler) Phase 5 Traditional main business domain Phase 6 Medcare Phase 7 M

  38. Slide 38: Expand Coverage of Enterprise Services

    Expand Coverage of Enterprise Services Number of Employees Covered by Covers approximately 2.5 Enterprise Services million employees in Unit: 10,000 persons FY24Q1, with the following 263 services  EBHS Life 203  Cancer prevention, PSP  Ask Doctors  Booking & conducting Approx. medical check-ups

  39. Slide 39: Consolidation of MinaCare

    Consolidation of MinaCare Main Services  Aiming to actualize Business support services for "investment-based health insurance associations medicine" that promotes the Covers approx. 50 associations and avoidance of disease approx. 3 million members and invests in maintaining and improving health Da

  40. Slide 40: Social Impact Creation

    Social Impact Creation Regions (12 areas) Regions areas) Regions (12 areas) Regions (12 areas) １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 ＭＰ ＭＰ ＭＰ Businesses (30 – 50) Businesses (30 – 50) Businesses (30 – 50) Businesses (30 – 50) Businesses ( Businesses (30 – 50) CS ＳＳ

  41. Slide 41: SDGs and CSV: M3's CSV positioning

    SDGs and CSV: M3's CSV positioning ＳＤＧｓ ＣＳＶ Sustainable Development Goals Creating Shared Value (Development goals which are possible to sustain) (Creation of shared values) International objectives that Initiatives by companies to solve governments, businesses, and social problems through their cor

  42. Slide 42: M3's CSV Impact (1/2): Patients/End Users

    M3’s CSV* Impact (1/2): Patients/End Users Providing a Seamless Healthcare Experience Number of medical consultations using Digikar Smart: 5.6 million per annum, more than 5 times compared to the previous year Reduction of 1.68 million hours spent in clinics Including the above, 35.4 million hours o

  43. Slide 43: M3's CSV Impact (2/2): Medical Professionals

    M3’s CSV* Impact (2/2): Medical Professionals Information Provision for all HCPs Approximately 11 million viewers in total for web conferences, etc. FY2023 Medical Examination Support Supporting medical examinations through the management of information across 300 million electronic health records,

  44. Slide 44: FY2024 Outlook

    FY2024 Outlook Copyright © 2024 M3, Inc. All rights reserved. 43

  45. Slide 45: Annual Results and Forecasts

    Annual Results and Forecasts Revenue Operating Profit Unit: JPY MM Unit: JPY MM 273,000 ~268,000 Operating profit* 95,141 Medlive IPO Impact 238,883 230,818 208,159 71,983 70,000 ~67,000 64,210 64,381 169,198 57,972 130,973 113,059 34,337 94,471 30,800 78,143 27,486 64,660 25,050 20,022 51,346 16,06

M3 — Q1 FY2024 Earnings Presentation on 6ix