M3, Inc. · TSE:2413

M3 — H1 FY2024 Earnings Presentation

39 slides from M3's earnings presentation, Oct 30, 2024

  1. Slide 1: M3, Inc. Presentation Material

    M3, Inc. Presentation Material October 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: FY2024H1 Consolidated Results

    FY2024H1 Consolidated Results Unit: JPY MM FY2023 H1 FY2024 H1 YoY YoY growth in business excluding COVID Revenue 115,795 124,819 +8% related revenues, sales +12% Operating profit 34,559 28,982 -16% Profit before tax 37,322 29,074 -22% Profit 25,136 19,589 -22% The first half closed in line with the

  4. Slide 4: Consolidated Revenue Trend and COVID Impact

    Consolidated Revenue Trend and COVID Impact Unit: JPY MM COVID related 124,819 (clinical trials, 112,616 115,795 ～1,900 vaccination support, ～5,700 promotion of 97,647 ～14,600 therapeutic drugs and +12% vaccines, etc.) ～10,500 75,022 Regular businesses FY2020 FY2021 FY2022 FY2023 FY2024 H1 H1 H1 H1

  5. Slide 5: FY2024 H1 Consolidated Results by Segment

    FY2024 H1 Consolidated Results by Segment  Pharma marketing: The impact Unit: JPY MM FY2023 FY2024 YoY of a decline in COVID-related H1 H1 sales drove revenue decline, but the fundamental DX is still Medical Revenue 45,503 42,474 -7% progressing  Other businesses such as DX of Platform Profit 18,4

  6. Slide 6: FY2024H1 Forecasts vs. Actuals

    FY2024H1 Forecasts vs. Actuals Revenue Operating profit Initial Forecasts 127.0 Bn 28.0 Bn Medical Platform Evidence Solution Career Solution Site Solution Overseas Other / Adjustments FY2024H1 Act. 124.8 Bn 29.0 Bn Q2 saw a slowdown compared to Q1, particularly in the Medical Platform and Overseas.

  7. Slide 7: Relationship between Growth Rate and COVID

    Relationship between Growth Rate and COVID Before COVID During COVID Repercussion Normalized Organic Growth Rate 20km/h 20km/h 20km/h 20km/h COVID-19 Impact 20km/h 20km/h 20km/h 40km/h 0km/h 20km/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: 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.

  11. Slide 11: Trend in M&A Volume: Programmatic M&A Strategy

    Trend in M&A Volume: Programmatic M&A Strategy 11 11 10 10* 5 5 3 Domestic 8 Overseas 7 6 6 2 FY2021 FY2022 FY2023 FY2024 as of October M&A is completed with approximately 10 companies annually. For FY2024, in addition to Infrastructure for On Call Cooperation, Medcare, and MinaCare, the tender offe

  12. Slide 12: TOB of ELAN Corporation

    TOB of ELAN Corporation Progress of TOB / Financial Impacts TOB has been completed as planned – ELAN became our subsidiary on October 21, 2024 – Purchase price: 34,662 million yen – Number of shares held after the deal: 33,329,490 shares (Voting rights ownership ratio: 55%) Its segment after conso

  13. Slide 13: Overview of ELAN Corporation

    Overview of ELAN Corporation Main businesses Location Matsumoto, Nagano, Japan  Medical and nursing care- related business (CS Set) Established – Providing everyday items such February, 1995 as clothing and towels to hospitalized patients and users of Capital JPY 573MM medical institutions and nurs

  14. Slide 14: Trend of Contracted Sites and Monthly Users

    Trend of Contracted Sites and Monthly Users # of contracted sites and churn rate # of monthly users # of sites Churn rate 2,320 428,503 2,060 379,614 CAGR 1,814 CAGR 341,410 18.2% 1,614 22.6% 283,555 1,362 1,140 225,578 992 190,683 168,410 764 644 120,026 516 3.4% 3.3% 89,825 3.0% 2.9% 68,704 2.5% 2

  15. Slide 15: Collaborations and Expected Synergies

    Collaborations and Expected Synergies  By acquiring patient contacts through ELAN, M3 will expand the to-C platform for which we provide services Promoting new business  CS Set: ELAN will enhance its competitiveness and boost development and enhancing the added value through collaborations with M3

  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 During COVID 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 dur

  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 During COVID After COVID that dramatically improve the productivity of pharmaceutical company sales and marketin

  22. Slide 22: DX of the Clinical Scene

    DX of the Clinical Scene Copyright © 2024 M3, Inc. All rights reserved. 21

  23. Slide 23: M3 DigiKar EHR Growth

    M3 DigiKar EHR Growth Number of Sites Using M3 DigiKar 6,900  Cumulative number of installations is approximately 6,900. 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

  24. Slide 24: 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 37,000 reviews with a rating of 4.6 from users, a new patient experience created, and a high ratin

  25. Slide 25: No. of DigiKar Smart Users

    No. of DigiKar Smart Users Unit: Index with FY2021Q3 as 1 7,089 5,673  Users are rapidly 4,741 penetrating DigiKar 4,320 Smart as the clinic's infrastructure. # of Users: 2.4x YoY 2,973 Txn Amount: 3.5x YoY  Video call has been 2,067 added and is expanding 1,368 as an infrastructure for 1,070 tele

  26. Slide 26: Overseas

    Overseas Copyright © 2024 M3, Inc. All rights reserved. 25

  27. Slide 27: 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

  28. Slide 28: Overseas Segment: Sales by Region

    Overseas Segment: Sales by Region Unit: JPY MM Growth rate North America 37,956 +16% * Including up to 10%  Continued strong 32,644 of currency tailwinds performance, including contribution from Kantar 14,660 +11% acquisition  Clinical trial business: North 13,223 Strengthening management America

  29. Slide 29: 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

  30. Slide 30: 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.

  31. Slide 31: 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. 30

  32. Slide 32: Ecosystem Synergy Value Creation

    Ecosystem Synergy Value Creation Unit: Index with FY2023 H1 as 100 109 100 Approx. 1.1x FY2023 FY2024 H1 H1 The next ten years will be based on ecosystem synergies, including internal and external collaborations, to further promote healthcare problem-solving/social impact creation and business expan

  33. Slide 33: 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

  34. Slide 34: Expand Coverage of Enterprise Services

    Expand Coverage of Enterprise Services Number of Employees Covered by Covers approximately 2.7 Enterprise Services million employees in Unit: 10,000 persons FY24Q2, with the following 272 services  EBHS Life 203  Cancer prevention, PSP  Ask Doctors Approx.  Booking & conducting medical check-ups

  35. Slide 35: 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

  36. Slide 36: Establishment of M3 Research Institute

    Establishment of M3 Research Institute M3 Research Institute  Announced the establishment of the M3 Research Institute via a press release on September 26, 2024.  Leveraging M3's comprehensive data resources, which include Japan's largest panel of medical professionals and extensive medical big da

  37. Slide 37: FY2024 Outlook

    FY2024 Outlook Copyright © 2024 M3, Inc. All rights reserved. 36

  38. Slide 38: 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

  39. Slide 39: Copyright © 2024 M3, Inc. All rights reserved.

    Copyright © 2024 M3, Inc. All rights reserved. 38

M3 — H1 FY2024 Earnings Presentation on 6ix