Slide 1: Presentation Material on Financial Results for Second Quarter of FY ending May 2024
Presentation Material on Financial Results for Second Quarter of FY ending May 2024 January 12, 2024 J Frontier Co., Ltd. [Securities code: 2934]
Slide 2: Overview of today's three timely disclosure topics and one press release
Overview of today's three timely disclosure topics and one press release ◆ Acquisition of shares of stock in Griffith ➢ Agreement, effective on January 31, concluded on making Griffith, which has a logistics network covering the Hokkaido, Tohoku, Kanto, and Chubu regions as well as all of Japan and
Slide 3: Detailed description of acquisition of shares in Griffith
Detailed description of acquisition of shares in Griffith 1. Name: Griffith Co., Ltd. ("Griffith”) 2. Representative: Kaneyasu Miyauchi 3. Date established: September 29, 2020 4. Lines of business: Logistics subcontracting and consulting, distribution support (agency) 5. Financial results in FY ende
Slide 4: Supplemental explanation on the business alliance with the Tsunagu Group
Supplemental explanation on the business alliance with the Tsunagu Group ◆ Background of this business alliance ➢ On September 30, 2022, the Enforcement Regulations to the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices were partially amended to
Slide 5: Our Future Business Model Goals
Our Future Business Model Goals Mission (goals to achieve) 1 Growth in medical costs and other social security expenses Keeping down medical costs through longer healthy lifespans 2 Shortage of medical human resources, widening healthcare Developing more efficient and effective structures through di
Slide 6: Growth of the SOKUYAKU Healthcare Economy
Growth of the SOKUYAKU Healthcare Economy ◼ Considerable YoY growth achieved on each KPI Numbers of partner hospitals and pharmacies (cumulative) Number of users (number of registered users) Telemedicine transactions (Number) (Thousand) 15,000 2,000 1,809 Number of hospitals 13,316 Number of pharmac
Slide 7: Bringing the SOKUYAKU business into the black
Bringing the SOKUYAKU business into the black ◆ We will bring the SOKUYAKU business into the black on a monthly basis by May 2024 ➢ We will bring the SOKUYAKU business, which has operated in the red until now due to forward-looking costs as a new business, into the black on a monthly basis by the en
Slide 8: Executive Summary: Financial results for second quarter of FY ending May 2024
Executive Summary: Financial results for second quarter of FY ending May 2024 ◆ Net Sales: 8,013 million yen Full-year plan: 20,598 million yen; progress rate: 39% ➢ The Medical Care Sales Business (SOKUYAKU and D2C sales of medications) is projected to achieve full-year planned results since Busine
Slide 9: Contents
Contents Contents ◼ 01 Consolidated financial results in Second quarter of FY ending May 2024 ◼ 02 Major recent initiatives ◼ 03 Corporate overview/business overview ◼ 04 Appendix 8
Slide 10: Consolidated financial results in Second quarter of FY ending May 2024
Consolidated financial results in ■ 01 Second quarter of FY ending May 2024
Slide 11: Consolidated financial results in second quarter of FY ending May 2024
Consolidated financial results in second quarter of FY ending May 2024* Net sales Operating income (Million yen) (Million yen) 21,000 20,598 1,000 671 731 18,000 16,844 500 6,446 170 103 15,000 0 5,058 Progress rate: 11,876 -221 39％ 12,000 4,582 -500 3,844 4,110 9,000 8,493 -1,000 8,013 7,406 754 64
Slide 12: Consolidated financial results: Details by business
Consolidated financial results in second quarter of FY ending May 2024: Details by business Group Consolidated Net sales: 8,013 million yen (progress rate: 39%) Operating income: -221 million yen Financial Results By Segment Medical Care Sales Net sales: 3,675 million yen (progress rate: 38%) Operat
Slide 13: Summary of Consolidated Statements of Profit and Loss
Summary of Consolidated Statements of Profit and Loss (Million yen) FY 2023/5 2Q FY 2024/5 FY 2024/5 YoY vs. Plans results (YoY) annual plan 2Q results change (Progress rate) Net sales 9,103 20,598 8,013 88% 39% Medical Care Sales Business 4,169 9,570 3,675 88% 38% Healthcare Sales Business 2,019 4,
Slide 14: 1Q: Recording of net sales on advertising management
[Medical Care Sales Business and Healthcare Marketing Business] 1Q: Recording of net sales on advertising management Details of changes to recording of net sales on some advertising management ➢ We record the prices of advertising management paid by medical institutions in the Medical Care Sales Bus
Slide 15: Key Performance Indicators (KPI)
[Medical Care Sales Business] SOKUYAKU Key Performance Indicators (KPI) ◼ The number of partner hospitals and pharmacies grew by 119% and the number of users by 139% from the end of the previous period Numbers of partner hospitals and pharmacies (cumulative) Number of users (number of registered use
Slide 16: Effects of short inventories of traditional Chinese herbal medicines and medications (i)
[Medical Care Sales Business] D2C sales of medications and SOKUYAKU 1Q: Effects of short inventories of traditional Chinese herbal medicines and medications (i) ◼ Despite strong inquiries from users, inventories were short from late July through September ◼ As of now, the shortage has been resolved
Slide 17: Effects of short inventories of traditional Chinese herbal medicines and medications (ii)
[Medical Care Sales Business] D2C sales of medications and SOKUYAKU Effects of short inventories of traditional Chinese herbal medicines and medications (ii) ◼ While first-half results were affected by short inventories, they have been resolved at present, and we are investing in advertising and pro
Slide 18: Key Performance Indicators (KPI): D2C
[Medical Care Sales Business and Healthcare Sales Business] D2C Key Performance Indicators (KPI) ◼ Rate of progress vs. plans: 40% ◼ Although we are behind on plans due to the effects of short inventories, recent trends show favorable performance centered on the Bofutsushosan traditional Chinese her
Slide 19: Key Performance Indicators (KPI): B2B
[Healthcare Marketing Business] B2B Key Performance Indicators (KPI) ◼ Promotion of sales activities groupwide has increased the number of trading partner companies to 279 ◼ An issue to address in the future will be linkage of these to receipt of large-scale orders [B2B KPI] Number of trading partne
Slide 20: Consolidated Balance Sheet Summary
Consolidated Balance Sheet Summary (Million yen) 2Q, FY ending 2Q, FY ending Assets May 2024 Liabilities and net assets May 2024 Current assets 4,663 Total liabilities 4,235 Cash and deposits 1,310 Current liabilities 2,545 Accounts receivable - trade, etc. 1,559 Accounts payable – trade 700 Invento
Slide 21: Major recent initiatives
■ 02 Major recent initiatives
Slide 22: Growing same-day delivery service areas
[Medical Care Sales Business] SOKUYAKU Growing same-day delivery service areas ◼ Same-day delivery introduced to 115 municipalities in six prefectures nationwide on February 1, 2024 ◼ Further expansion planned chiefly in ordinance-designated major cities ・Sapporo City : Same-day delivery service are
Slide 23: Extending the partnership with pharmacies and drugstores
[Medical Care Sales Business] SOKUYAKU Extending the partnership with pharmacies and drugstores ◼ SOKUYAKU has been adopted mainly by pharmacies and drugstores operating numerous outlets ◼ Planning to grow services provided to user facilities, including delivery services for pharmaceuticals, daily i
Slide 24: Launching new TV commercials and web videos
[Medical Care Sales Business] SOKUYAKU Launching new TV commercials and web videos ◼ We launched new TV commercials and Web videos on August 16, 2023 ◼ This has made a major contribution to securing new members in the second quarter SOKUYAKU Promise (Insured Medical Care) series Describes the conven
Slide 25: Launching a web-browser version
[Medical Care Sales Business] SOKUYAKU Launching a web-browser version ◼ We launched a Web browser version of the service on August 17, 2023 ◼ Enhancement of the search function through the most recent update ◼ Lowering the cost of securing new users while increasing numbers of uses by users, by eli
Slide 26: New SOKUYAKU Wellness e-commerce site launched
[Healthcare Sales Business] D2C (cosmetics) New SOKUYAKU Wellness e-commerce site launched ◼ On December 20 we launched the new SOKUYAKU Wellness site (https://wellness.sokuyaku.jp/), by integrating the existing Kosuiso 328-sen e-commerce site with the JFD online shop. 25
Slide 27: Introducing Cafelice Premium, a functionally labeled food product
[Healthcare Sales Business] D2C (health foods) Introducing Cafelice Premium, a functionally labeled food product ◼ On December 1, we began sales of the new Cafelice Premium lineup, a functionally labeled food product developed jointly with Segafredo Zanetti. 26
Slide 28: Corporate overview/business overview
■ 03 Corporate overview/business overview
Slide 29: Our Management Policies
Our Management Policies ◼ Developing and implementing a mission and plans consistent with our Management Philosophy ◼ Aiming, through our businesses, for solutions to the severe social issues Japan faces Management philosophy Purpose Good health for people and society Goals to achieve Mission ⚫ Keep
Slide 30: Our Future Business Model Goals (Repeated from Above)
Our Future Business Model Goals (Repeated from Above) Mission (goals to achieve) 1 Growth in medical costs and other social security expenses Keeping down medical costs through longer healthy lifespans 2 Shortage of medical human resources, widening healthcare Developing more efficient and effective
Slide 31: The Group's Business Portfolio
The Group’s Business Portfolio Business segment Business Business details ◼ Telemedicine, online drug administration guidance, and medication delivery platform SOKUYAKU ◼ Marketing support and digital transformation (DX) support for medical institutions ◼ Support for medical human resources Medical
Slide 32: Medium-Term Plan (May 2024 – May 2025)
Medium-Term Plan (May 2024 – May 2025) Net sales Operating income • High growth rates continued, driven by the Medical Care Sales • We expect to achieve profitability in the fiscal year ending May 2024 Business (SOKUYAKU telemedicine business and D2C sales of and will promote further efforts to secu
Slide 33: SOKUYAKU Business
SOKUYAKU Business _\( JFRONTIER 32
Slide 34: The worldview we want to realize
[SOKUYAKU Business] The worldview we want to realize ◼ Realizing a society in which anybody can connect with doctors and pharmacists and receive medications any time, any place. • In spare moments during housework and childcare Any time • During breaks at work • Late at night, early in the morning,
Slide 35: Business environment
[SOKUYAKU Business] Business environment ◼ The telemedicine market in Japan is in its early stages, and further market growth is expected in the future Benefits of putting medical services online (a sample case) Growing markets*1 ✓ Elimination of geographical and time Telemedicine offers numerous (U
Slide 36: Deregulation in Japan
[SOKUYAKU Business] Deregulation in Japan ◼ Deregulation of telemedicine and online drug administration guidance is accelerating in Japan recently. ◼ Further easing of related regulations is expected in the future as the government responds to social issues. Telemedicine rates and ➢ Strict restricti
Slide 37: SOKUYAKU service overview
[SOKUYAKU Business] SOKUYAKU service overview ◼ Developing a one-stop platform from telemedicine to online drug administration guidance and delivery of prescription medication Searching for hospitals Telemedicine Online drug Delivery of medication and pharmacies administration guidance ➢ Searching f
Slide 38: SOKUYAKU's Strengths
[SOKUYAKU Business] SOKUYAKU's Strengths ◼ SOKUYAKU delivers solutions to impediments to promoting the online migration of healthcare. ◼ This is demonstrated by rapid growth in the numbers of partner hospitals and pharmacies and the numbers of patients. Impediments to online migration SOKUYAKU's sol
Slide 39: Methods of receiving prescription medications
[SOKUYAKU Business] Methods of receiving prescription medications ◼ Establishing receiving methods that match the needs of users List of methods of receiving prescription medications 1 Same-day delivery 2 Next-day delivery Areas served: : Tokyo, parts of Saitama Prefecture, parts of Areas served: :
Slide 40: Service development policies (insured and uninsured medical care)
[SOKUYAKU Business] Service development policies (insured and uninsured medical care) ◼ Able to handle both insured and uninsured medical care ◼ Service development under different policies, reflecting the Japanese legal system Insured medical care Uninsured medical care Service • Attracting patient
Slide 41: Online clinics for uninsured medical care
[SOKUYAKU Business] Online clinics for uninsured medical care ◼ Growing online clinics for uninsured medical care ◼ An increasing trend of customer attraction in the fields of pill, skin beauty, AGA, etc. Online clinic illustration 40
Slide 42: List of current revenue models
[SOKUYAKU Business] List of current revenue models Telemedicine platform Aiming to maximize revenues through means including increasing numbers of registered users and uses Service Charge’s structure* ⚫ [Insured medical care] Telemedicine usage charges ➢ 150 yen per use ⚫ [Insured medical care] Onli
Slide 43: Strategies toward future revenue growth
[SOKUYAKU Business] Strategies toward future revenue growth ◼ Growing revenues to realize our plans ◼ Building a profit structure quickly through means such as adoption of stock-based revenue models 1 Growing flow-based revenue models 2 Growing stock-based revenue models 3 Enhancement and expansion
Slide 44: Medium-term plan: KPIs
[SOKUYAKU Business] Medium-term plan: KPIs ◼ Number of users revised to planned figure, assuming launch of premium plans ◼ Breakdown of pharmacies and hospitals revised (increasing number of pharmacies) to expand same-day service areas Numbers of partner hospitals and pharmacies (cumulative) Number
Slide 45: D2C Business
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Slide 46: Brand lineup
[D2C Business] Brand lineup ◼ Developing a D2C business that includes original medications, health foods, and cosmetics ◼ Also advancing diversification of the product lineup through M&A activities with companies that own product brands ➢ November 2019: Acquisition of traditional Chinese herbal medi
Slide 47: D2C Business Policies
[D2C Business] D2C Business Policies ◼ Enhancing product capabilities and diversifying products offered, and providing strong support for effective and efficient treatment, self-care, and health maintenance for consumers Health foods Medications Cosmetics New categories Enhancing product capabilitie
Slide 48: Cross-media selling power
[D2C Business] Cross-media selling power ■Advertising production based on abilities in casting and earning consumers' sympathy, build up through Healthcare Marketing ■Reaching consumers across a wide range of ages through a cross-media approach using online and offline advertising ■Realizing effecti
Slide 49: A strict advertising review structure
[D2C Business] A strict advertising review structure ◼ Laws concerning D2C advertising have become increasingly strict in recent years with the amendment of the Pharmaceutical and Medical Devices Act and other developments. ◼ Thanks to our traditional strict approach to advertising review, we have b
Slide 50: Medium-term plan: KPIs
[D2C Business] Medium-term plan: KPIs ◼ Aiming to increase the number of subscribers through the development and growth of new products and efficient and effective advertising ◼ Despite the effects in the first half of short inventories of traditional Chinese herbal medicines and medications, securi
Slide 51: B2B Business
B2B Business _\( JFRONTIER 50
Slide 52: B2B Business Policies
[B2B Business] B2B Business Policies ◼ We will accelerate the updating of information on industry trends and the accumulation of expertise through branding that targets customers and through BPO services to demonstrate synergies with our other businesses Branding BPO services Casting, advertising TV
Slide 53: Medium-term plan: KPIs
[B2B Business] Medium-term plan: KPIs ◼ Aiming to increase the number of trading partner companies in branding and BPO services through efforts for the cross selling of products and services by strengthening cooperation with subsidiaries Trend in the number of trading partner companies (Companies) 3
Slide 54: Appendix
Jf JFRONTIER m 04 Appendix
Slide 55: Introduction to preferential system for shareholders
Introduction to preferential system for shareholders ◼ A new preferential system for shareholders was established in November 2021 to express gratitude for shareholders' continued support and make investments in our stock more attractive. (Number of shares held) Equivalent to Equivalent to 300 or mo
Slide 56: Good health for people and society
Good health for people and society