Medius Holdings Co., Ltd. · TSE:3154
Medius — FY2024 Earnings Presentation
48 slides from Medius's earnings presentation, Aug 9, 2024
Slide 1: Fiscal Year Ended June 30, 2024 Earnings Presentation Materials
Fiscal Year Ended June 30, 2024 Earnings Presentation Materials August 9, 2024 Medius Holdings Co., Ltd. Securities Code: 3154
Slide 2: Today’s Key Points
Today’s Key Points In the fiscal year ended June 30, 2024, the Medical Device Sales Business recorded net sales, operating profit, and ordinary profit that all exceeded initial projections. This was due to robust sales of replacement supplies on the back of a stronger recovery than originally expe
Slide 3: Fiscal Year Ended June 30, 2024 Financial Results
Fiscal Year Ended June 30, 2024 Financial Results (Millions of yen, %) FYE June 2023 FYE June 2024 YoY (Results) (Results) Increase/ Amount Amount % of net sales Percentage decrease Net sales 239,054 259,789 100.0 20,735 108.7 Medical Device Sales Business 233,567 253,996 97.8 20,429 108.7 Welfare D
Slide 4: Group Companies
Group Companies As of the June 30, 2024 Copyright©2024 Medius Holdings Co., Ltd. All Rights Reserved 4
Slide 5: Head Office / Branches / Distribution Center
Head Office / Branches / Distibution Center As of the June 30, 2024 Copyright©2024 Medius Holdings Co., Ltd. All Rights Reserved 5
Slide 6: Medical Device Sales Customer Segments
Medical Device Sales Customer Segments Prefectural and municipal medical 17.9% institutions Japanese Red Cross hospitals 6.6% National Hospital Organization 3.5% Federations of Agricultural Others Prefectural and Cooperatives for Health and Welfare 2.9% municipal medical (Kouseiren) Clinics institut
Slide 7: Operating Environment
Operating Environment Up to 2019 COVID-19 pandemic 2023 onward Ensuring stable supply & providing Extending logistics network & Priorities Expanding Priorities business scale Persistent Medical Care improving profitability Downturn following special procurement demand during Challenges Acceleration
Slide 8: Market Conditions for Medical Devices
Market Conditions for Medical Devices (Billions of yen) (%) 6,000.0 60,000 Market size Growth rate 6.0 5,522.3 55,223 Projected market size 49,578 4,957.8 50,000 5,000.0 5.0 44,510 4,451.0 39,961 3,996.1 4,000.0 40,000 37,240 3,724.0 4.0 3,218.0 34,570 35,240 3,524.0 36,270 3,627.0 32,180 32,830 3,3
Slide 9: Medium-Term Business Plan
Medium-Term Business Plan Reinforce existing Ordinary profit Up 10% annually businesses + Promote M&A As we have achieved a certain amount of growth in net sales and market share, we will now make ordinary profit our metric and work on improvements to increase profitability. We are targeting further
Slide 10: Medium-Term Business Plan: Strategies to Enhance Corporate Value
Medium-Term Business Plan: Strategies to Enhance Corporate Value Contributing to Regional Medical Care Restructuring of Existing Businesses Policies & Measures Selective, Focused Business Investment Improve operational Strengthen human capital Cultivate a solid Improve capital efficiency Returns to
Slide 11: M&A & Alliance Strategy: Background
M&A & Alliance Strategy: Background ▼ Japan’s medical device market The market is projected to continue growing until 2060 as Japan’s society ages. There is plenty of scope for growing the top line. However, growth in Japan’s medical device market has slowed compared with previous years in an en
Slide 12: M&A & Alliance Strategy: Background - What manufacturers want
M&A & Alliance Strategy: Background ▼What manufacturers want Manufacturers are focused on reducing costs (operating costs and logistics costs); they therefore want sales agents to undertake that role. They also want widespread operations, regional market shares, financial stability, capacity to
Slide 13: M&A Strategy: Medius Holdings M&A in Recent Years
M&A Strategy: Medius Holdings M&A in Recent Years (Subject to Consolidation) Year Month Target company Status at time of M&A Current status Became part of current ALVAUS, Inc. following restructuring 2020 Mar. Active Medical Co., Ltd. Consolidated subsidiary within the Group. Operations in the Hokka
Slide 14: Total Solutions Strategy
Total Solutions Strategy Medical institutions Medical institutions are facing increasingly serious business challenges, including the need to reform doctors’ work practices, lower revenues due to a government policy of limiting healthcare expenditure, and rising costs for medical supplies. Increased
Slide 15: Total Solutions Strategy: Solutions Lineup
Total Solutions Strategy: Solutions Lineup Medical institutions SPD SPD stands for Supply, Processing, and Distribution. It is a strategy originating in the US Increased for streamlining the management of distribution within hospitals. Total solutions + Manufa cturers efficiency MEDIUS Group Our sol
Slide 16: Streamlining of Operations: For Manufacturers
Streamlining of Operations: For Manufacturers Medical institutions Manufacturers and medical device trading companies need to take action to address higher logistics Increased costs and reduced working hours. efficiency The MEDIUS Group alleviates the associated burdens on manufacturers by picking u
Slide 17: Streamlining of Operations: Within the MEDIUS Group
Streamlining of Operations: Within the MEDIUS Group Medical institutions Consolidate Increased specialist efficiency domains Manufa MEDIUS cturers Group Reorganize within the Targets for Establish Group Optimize streamlining shared procurement corporate & logistics operations Streamline the whole Gr
Slide 18: Topics
Topics Allied with the largest medical device dealer in Yamanashi Prefecture Positioned to further strengthen our presence in the cardiovascular field MAKOTO MEDICAL SYSTEMS INC. Established Althent, Inc. joined the Group MAKOTO MEDICAL SYSTEMS, INC. headquartered in Japan’s We established Althent,
Slide 19: Structure for Promoting Sustainability
Structure for Promoting Sustainability Board of Directors Reports & Supervises & Committee chair: recommends approves President and Representative Director Established July 2024 Sustainability Committee Executive committee chair: Director responsible for Liaises Sustainability sustainability Special
Slide 20: Sustainability: Identification of Material Issues
Sustainability: Identification of Material Issues June 2023: Sustainability Committee inaugurated • Set metrics & targets • Determine overall • Manage progress • Identify material issues • Integrate into business • Consider ESG issues • Spread Groupwide • Prioritize material issues policies awarenes
Slide 21: Sustainability: Environmental Conservation
Sustainability: Environmental Conservation To assess and manage the impacts of climate-related issues on our business operations, the MEDIUS Group calculated our greenhouse gas emissions (Scopes 1 to 3) during the fiscal year ended June 30, 2023 (FYE2022) according to the GHG Protocol standards. As
Slide 22: Sustainability: Promoting the Active Participation of All Human Resources
Sustainability: Promoting the Active Participation of All Human Resources (%) Results for FYE June 30, 2023 Results for FYE June 30, 2024 Medius Kuribara Medical Medius Kuribara Medical Kuribara Medical Kuribara Medical Holdings co., Corporation Holdings co., Instruments Co., Ltd. Instruments Co., L
Slide 23: Sustainability: Social Contribution Activities
Sustainability: Social Contribution Activities Donation to the UN World Food Programme Donation gift-matching for Médecins Sans (WFP) Red Cup Campaign Frontières (Doctors without Borders) The Red Cup Campaign subsidizes provision of school We conducted a donation gift-matching campaign, inviting mea
Slide 24: Sustainability: Social Contribution Activities
Sustainability: Social Contribution Activities Contributing to society alongside local Contributing to local social welfare initiatives communities through sport Projects in collaboration with local communities S-Pulse Social Welfare Fund ▶ Eco-Cap Campaign MEDIUS Group X Shimizu S-Pulse Kuribara Me
Slide 25: Sustainability: Social Contribution Activities
Sustainability: Social Contribution Activities Boosting medicine’s potential through the potential of the young Expressing thanks to those who work on the medical frontline Hands-on medical experience event, Thank You for All That You Do! MEDI-Message —The smiling face trucks Kuribara Medical Corpor
Slide 26: Results Net Sales
Fiscal Year Ended June 30, 2024 Key Points of Financial Results Results Net Sales The number of surgeries and examinations recovered better than initially projected and sales of surgery- related products increased as a result of expanding our sales area and securing new opportunities to supply produ
Slide 27: Results Net Sales (2)
Fiscal Year Ended June 30, 2024Key Points of Financial Results Results Net Sales (2) Net sales increased year-on-year, but higher selling, general and administrative expenses resulted in decreased operating profit. Net sales 259.7 billion yen (Year-on-year Up 8.7%) Operating profit 1.32 billion yen
Slide 28: Results Profits
Fiscal Year Ended June 30, 2024 Key Points of Financial Results Results Profits Selling, general and administrative expenses remained in line with initial plans as we delayed or cancelled some of the capital investment on IT systems and logistics planned at the beginning of the fiscal year and endea
Slide 29: Selling, general and administrative expenses
Overview of the Fiscal Year Ended June 30, 2024 Selling, general and administrative expenses Selling, general and administrative expenses 29,761 million yen (Year-on-year Up 8.4%) (Of which) Personnel expenses 18,866 million yen (Year-on-year Up 8.5%) SGA SGA expenses Personnel expenses expenses 29,
Slide 30: Analysis of Factors Contributing to Operating Profit
Analysis of Factors Contributing to Operating Profit Effect of higher sales + 1,801 (Millions of yen) Capital Personnel Outsourcing investment investment expenses –5 – 1,486 – 139 Others – 724 June 30, 2023 June 30, 2024 – 553 million yen 1,880 million yen 1,327 million yen Copyright©2024 Medius Hol
Slide 31: Net Sales (Medical Equipment and Others)
Net Sales (Medical Equipment and Others) (Millions of yen) 300,918 300,000 278,299 37,914 90.0% 12.6% 259,574 38,025 260,000 246,787 13.7% 33,592 36,852 12.9% 70.0% 220,000 210,388 14.9% 29,994 14.3% 180,000 50.0% 263,004 140,000 240,274 87.4% 225,982 86.3% 30.0% 209,935 87.1% 180,394 85.1% 100,000
Slide 32: Replacement Supplies FYE June 2024 Net Sales by Category
Replacement Supplies FYE June 2024 Net Sales by Category (Millions of yen) Catheterization/treatment Catheterization/ treatment Orthopedic implants 37,697 Cardiac surgery Surgical instruments (non-cardiac) Others Orthopedic implants 112,675 34,426 Personal Protective Equipment (PPE) Endoscope-relate
Slide 33: Replacement Supplies Net Sales in Main Product Categories
Replacement Supplies Net Sales in Main Product Categories (FYE June 2020–FYE June 2024) (Millions of yen) 40,000 FYE June 2020 FYE June 2021 FYE June 2022 FYE June 2023 FYE June 2024 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Copyright©2024 Medius Holdings Co., Ltd. All Rights Reserved 33
Slide 34: Medical Equipment Net Sales by Category (FYE June 2024)
Medical Equipment Net Sales by Category (FYE June 2024) (Millions of yen) Radiological equipment Endoscopic examination & surgery Ultrasound equipment Ophthalmic examination & treatment Others Blood purifiers 8,163 Radiological equipment 258 5,398 Sample testing Monitors Therapeutic electrosurgical
Slide 35: Medical Equipment Net Sales in Main Product Categories
Medical Equipment Net Sales in Main Product Categories (FYE June 2020–FYE June 2024) (Millions of yen) 7,000 FYE June 2020 FYE June 2021 FYE June 2022 FYE June 2023 FYE June 2024 6,000 5,000 4,000 3,000 2,000 1,000 0 Radiological Endoscopic Ultrasound Sample testing Ophthalmic Monitors Medical Steri
Slide 36: Nursing Care and Welfare Products Net Sales from Rentals
Nursing Care and Welfare Products Net Sales from Rentals (FYE June 2020–FYE June 2024) (Millions of yen) 3,000 2,692 2,500 2,259 2,192 2,063 1,973 2,000 1,500 1,000 500 0 FYE June 2020 FYE June 2021 FYE June 2022 FYE June 2023 FYE June 2024 Copyright©2024 Medius Holdings Co., Ltd. All Rights Reserve
Slide 37: FYE June 2025 Financial Results Outlook
Fiscal Year Ended June 30, 2025 Full-Year Financial Results Outlook FYE June 2025 Financial Results Outlook (Millions of yen) FYE June 2024 FYE June 2025 Full-year Full-year YoY (Plan) Net sales 259,789 280,000 107.8% Operating profit 1,327 1,400 105.5% Ordinary profit 1,750 2,000 114.3% Profit attr
Slide 38: FYE June 2025 Financial Results Outlook: Further Information
Fiscal Year Ended June 30, 2025 Full-Year Financial Results Outlook: Further Information FYE June 2025 Financial Results Outlook Net sales & gross profit Throughout the year, we expect to record results from further expansion of our market area in western Japan and the addition of a new operatin
Slide 39: Dividend Payout Ratio and Policy
Dividend Payout Ratio and Policy Dividend payout ratio The Company’s basic policy is to distribute the results of its growth while securing the internal reserves necessary to maintain stable growth over the medium and long term. The Company aims to maintain a consolidated dividend payout ratio of 30
Slide 40: Management Conscious of Cost of Capital and Stock Price: Analysis of Current Situation
Management Conscious of Cost of Capital and Stock Price: Analysis of Current Situation The Company’s shareholders’ equity cost is estimated at 5% on a capital asset pricing model (CAPM) basis. ROE is now on a downward trajectory, having peaked during the fiscal year ended June 30, 2021, but it s
Slide 41: Management Conscious of Cost of Capital and Stock Price: Policy Going Forward
Management Conscious of Cost of Capital and Stock Price: Policy Going Forward Enhance business profitability Grow gross profit Expand sales of private brand Improve profitability products Expand business into new domains Restructure and strengthen Curb SGA expenses Enhance productivity by
Slide 42: Contributing to Community Healthcare
Management Philosophy Our philosophy remains unchanged since the Company’s founding Contributing to Community Hearthcare Copyright©2024 Medius Holdings Co., Ltd. All Rights Reserved 42
Slide 43: Medius Holdings Co., Ltd. Securities Code: 3154
Medius Holdings Co., Ltd. Securities Code: 3154 Our Business: Medical device sales and maintenance business Nursing care and welfare product sales and rental business Established July 2009 Capital 1.34 billion yen (Changed to present company name (As of June 30, 2024) in 2010) No. of employees 2,517
Slide 44: The MEDIUS Group’s Businesses
The MEDIUS Group’s Businesses Medical Device Sales Business Welfare Device Business The MEDIUS Group sells medical devices purchased from medical device manufacturers and others in Japan to medical institutions and The MEDIUS Group sells and rents nursing care and undertakes repair and maintenance o
Slide 45: The Accounting Standard for Revenue Recognition
The Accounting Standard for Revenue Recognition The Company applied the Accounting Standard for Revenue Recognition in the fiscal year ended June 30, 2022. Impacts of applying standard For transactions in which the MEDIUS Group acts as an agent, net sales are reduced because revenue is recognize
Slide 46: Major Suppliers
Major Suppliers (in Japanese alphabetical order) Asahi Kasei Medical Co., Ltd. Tokyo Saraya Co., Ltd. Nihon Kohden Corporation Atom Medical Corporation Santen Pharmaceutical Co., Ltd. Stryker Japan K.K. Abbott Medical Japan LLC GE Healthcare Japan Corporation MC Medical, Inc. ALCARE Co., Ltd. Siemen
Slide 47: MEDIUS Group Earnings Structure Seasonal
MEDIUS Group Earnings Structure Seasonal Quarterly operating profit Seasonal factors 2,000 3Q: January to March • This is the end of the fiscal year for medical 1,200 institutions, so purchasing of medical equipment is concentrated at this time, driving up net sales. 4Q: April to June 400 ・ Net sale
Slide 48: Disclaimer Regarding Use of This Document
Disclaimer Regarding Use of This Document This document was prepared to facilitate understanding of Medius Holdings Co., Ltd. (the Company) and the MEDIUS Group. It is not intended to solicit investment in the Company. Care was taken to ensure accuracy when preparing this document, but the Company d