M3, Inc. · TSE:2413

M3 — FY2015 Earnings Presentation

39 slides from M3's earnings presentation, April 2016

  1. Slide 1: M3, Inc. Presentation Material

    M3, Inc. Presentation Material April 2016 Copyright © 2016 M3, Inc. All rights reserved.

  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: FY 2015 Overview

    FY 2015 Overview Copyright © 2016 M3, Inc. All rights reserved. 2

  4. Slide 4: FY2015 Consolidated Results

    FY2015 Consolidated Results IFRS basis (million yen) Forecast Actual YoY Sales 63,000 < 64,660 +26% Operating Profit 19,000 < 20,022 +25% Pre-tax Profit 19,000 < 19,950 +23% Net Profit 12,000 < 13,493 +29%  FY15-end dividend: 9 yen Copyright © 2016 M3, Inc. All rights reserved. 3

  5. Slide 5: FY2015 Consolidated Results by Segment

    FY2015 Consolidated Results by Segment IFRS basis (mn yen) FY2014 FY2015 YoY Sales 22,436 25,234 +13% Medical Portal Profit 12,890 14,844 +15% Evidence Sales 12,195 19,992 +52% Solution Profit 1,799 3,908 +117% Sales 10,980 13,810 +26% Overseas Profit 1,430 1,614 +13% Clinical Sales 2,818 2,902 +3%

  6. Slide 6: Special Upfront Investment Costs for Future Growth

    Special Upfront Investment Costs for Future Growth (million yen) 578 Total 623 1.0~1.6 bn yen 145 230 M&A Recruiting& Productivity Neues Due Training Time Lag of Losses Diligence Fees New Staff One-time costs in anticipation of future growth is expected to dampen profits by 1.0 ~ 1.6 bn yen. Aggress

  7. Slide 7: Current Business Situation and Outlook

    Current Business Situation and Outlook Copyright © 2016 M3, Inc. All rights reserved. 6

  8. Slide 8: Overview

    Overview MR-kun  Revival of activity from key clients, along with increased penetration Family of all clients and new contracts drove growth back to normal trends. 4Q reverted back double digit growth at +22% yoy.  Cumulative sales grew +21% yoy to 6.9 bn yen. Ordinary profit Career grew +33% yoy

  9. Slide 9: MR-kun Family

    MR-kun Family M3’s Platform Linked Growth Business Copyright © 2016 M3, Inc. All rights reserved. 8

  10. Slide 10: Doctor Demand for On-Line Detailing

    Doctor Demand for On-Line Detailing What is the ideal ratio of on-line and off-line promotional information (“details”) from drug companies? 100% 100% 4.7% On-line 80% 20% 14.4% 60% 40% 20.0% 75% 50% 50% 35.9% 40% 60% 12.4% 20% 80% 11.1% 100% Off-line 100% 1.5% According to 400 physicians High deman

  11. Slide 11: Doctor's Time Allocation vs Pharma's Budget Allocation

    Doctor’s Time Allocation vs Pharma’s Budget Allocation Doctors spend the most time collecting information via the Internet. However, pharmaceutical firms spend the majority of their marketing budget on off-line MR related costs. Time Allocation Budget Allocation of doctors collecting info of drug co

  12. Slide 12: MR-kun Family's Growth Potential in Japan

    MR-kun Family’s Growth Potential in Japan Currently Growth Potential (approx.) Pharma 30 30~35 CLIENTS Companies Companies Growth Potential ¥1 bn ~ ¥1.5 bn 3~4 times current levels SALES (approx.) per client drivers: per ¥400 mn  # of products CLIENT  # of member MDs  Added value of contents Broa

  13. Slide 13: MR-kun Family Fee Structure

    MR-kun Family Fee Structure (annual) MR-kun Contents Other MR-kun Detail fee Base & Operation fee Production fee Family Services ¥100 per detail sent Production of Web Symposiums, customized detail One Point eDetails, etc contents (one product) ¥70 ~ 80 ¥20 ~ 40 ¥30 ~ ¥10 ~ Entry Level mn mn mn mn a

  14. Slide 14: MR-kun Family: YoY Quarterly Sales Comparisons

    MR-kun Family: YoY Quarterly Sales Comparisons (million yen) 4Q YoY 621 +22% Cumulative Increase YoY 131 -137 494 mln yen -121 (+4%) FY14 1Q 2Q 3Q 4Q FY15 ACT ACT Revival of activity from a key client, along with increased penetration per client and new contract attainment drove growth back to previ

  15. Slide 15: Platform Linked Business

    MR-kun Family M3’s Platform Linked Growth Business Copyright © 2016 M3, Inc. All rights reserved. 14

  16. Slide 16: Consolidated Sales Trend

    Consolidated Sales Trend (million yen) FY16 FCT 64,660 75,000 51,346 36,887 26,007 19,040 11,811 14,646 5,729 7,475 8,534 1,563 2,276 3,854 25% 19% 19% MR-kun 30% 43% 38% Family 54% 49% 73% 68% 65% Platform 83% 95% 90% 59% 59% Linked 52% 54% Business 41% 46% 36% 40% 17% 21% 26% Overseas 10% 15% 10%

  17. Slide 17: Business Segment Breakdown and Type

    Business Segment Breakdown and Type Business Business Segments Services FY15 Sales Type MR-kun Family 13 bn yen MR-kun Family Career 7 bn yen Medical Portal Research 3 bn yen Other 3 bn yen (Mr. Finder, AskDoctors, others) Platform Evidence Solution 20 bn yen Linked Business Clinical Platform 3 bn y

  18. Slide 18: Group Companies

    Platform Linked Business Development CLIENT BASE Business Size Scale Pharma Hospital, Doctor Consumer (FY2015 Forecast) M3 Research QOL-kun, etc. AskDoctors ¥20 bn Group Companies ¥5 bn 1 2 Career Evidence Solution ¥3 bn iTicket CSO EMR ¥1 bn Others Detailed slides available Total revenue of platfor

  19. Slide 19: Power of Mr. Finder in Drug Development

    Power of Mr. Finder in Drug Development １ Evid Sol “Making use of the Internet to increase, as much as possible, the number of people who can live longer and healthier lives, and to reduce as much as possible, the amount of unnecessary medical costs.” Evolution via MR-kun centered ~ 2010 eMarketing

  20. Slide 20: Patient Enrollment in Large-Scale Trials

    Patient Enrollment in Large-Scale Trials １ Evid Sol Case study M3.com doctors exceeded by number and speed in collecting cases versus other SMOs for a particular Endocrinology and Metabolism trial 1,500 1,400 Number of patient enrollment 1,300 1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 0

  21. Slide 21: Shift to Internet-Based Clinical Trials

    Shift to Internet-Based Clinical Trials １ Evid Sol Theme Operation M&A Timing 2011  Site Selection 2009  Feasibility Study, etc 2015/4 Group-wide approach to promoting 2014 and accelerating  Monitoring 2009 internet  EDC, etc based drug 2012 development  Utilization of 2012 electronic medical r

  22. Slide 22: Number of CRAs by Company (CRO)

    Number of CRAs by Company (CRO) １ Evid Sol # CRO Companies # of ＣＲＡs M3 Group 1 EPS 855 2 M3 Group 841 3 Cimic 780 4 Quintiles 600 5 Parexel 550 6 MEDISCIENCE PLANNING 494 7 A2 Healthcare 380 8 ＭＩＣ Medical 282 9 Linical 170 10 Intellim 90 11 Bell Medical Solutions 80 12 Mebix 65 * Data from MIC Rese

  23. Slide 23: Sales and Profit Trend of Evidence Solution

    Sales and Profit Trend of Evidence Solution １ Evid Sol (million yen) IFRS basis Sales Segment Profit FY16 FCT 19,992 22 bn yen Orders backlog at 23bn yen, with corresponding 13,195 increases in headcount as upfront investment. FY16 looks to continue the 6,554 healthy growth lead by robust orders 4

  24. Slide 24: Sales and Profit Trend of M3 Career

    Sales and Profit Trend of M3 Career 2 Career (million yen) JGAAP basis Sales Ordinary Profit FY16 FCT 9 bn yen 6,925 5,712 Successful integration of newly-hired staff 4,594 improved productivity 3,235 FY2016 should see continued traction from 2,191 2,292 job placement for 1,714 physicians. 1,433 1

  25. Slide 25: M3's Growth

    MR-kun Family M3’s Platform Linked Growth Business Copyright © 2016 M3, Inc. All rights reserved. 24

  26. Slide 26: Number of Physician Members and Panelists (Global)

    Number of Physician Members and Panelists (Global) (thousand) 3.5+ million members worldwide 4,000 Other Nations 3,500 （M3 Global Research, MDLinx, Russia） 3,000 Korea (MEDIGATE) 2,500 2,000 China 1,500 1,000 U.K. (Doctors.net.uk) 500 U.S.A (MDLinx + PDR) Japan (m3.com) 0 FY08 FY09 FY10 FY11 FY12 FY

  27. Slide 27: Development in the US

    Development in the US  Expanding services in the U.S. via MDLinx, operated by M3 USA – Over 600,000 US physician members through partnership with PDR, resulting in 80+% coverage  #1 player in the U.S. for marketing research targeting physicians as a result of superior media power  Career business

  28. Slide 28: Expansion of U.S. Career Services

    Expansion of U.S. Career Services Sales (million yen)  Consolidated The Medicus 2,432 Firm at Dec-end 2015, posting the 4th M&A in the past 2 years.  Operation size increase approx. 2.5x yoy due to +142% expansion of existing businesses as well as contribution from M&As 1,006  Synergies with MDLi

  29. Slide 29: Development in China

    Development in China Number of Physician Members (thousand) 1,561 1,490 Marketing services for drug companies starting with MR- 1,362 kun, and marketing research 1,250 services showed healthy 1,154 growth, boosting profits 1,096 MR-kun contracts now at 20 1,019 drugs with 10 companies, 953 expandi

  30. Slide 30: Sales and Profit Trend of Overseas

    Sales and Profit Trend of Overseas (million yen) IFRS basis Sales FY16 FCT Segment Profit 17 bn yen 13,810  Broader business scope in China, US and UK 10,980  MR-kun launched in the U.K., contracts signed with multiple drug companies 6,661  Wrongful “spam” classification of M3USA 4,069 e-mail ser

  31. Slide 31: M3 Group's Business Strategy

    M3 Group’s Business Strategy Copyright © 2016 M3, Inc. All rights reserved. 30

  32. Slide 32: Strategy Change in Business Development

    Strategy Change in Business Development Internet-Powered Investment Business Development Strategy in Healthcare in Healthcare-Internet Sector Sector （2000～2010） （2011～） このイメージは、現在表示できません。 このイメージは、現在表示できません。 このイメージは、現在表示できません。 このイメージは、現在表示できません。 このイメージは、現在表示 できません。 このイメージは、現在表示できません。 このイメージは、現在表示できませ

  33. Slide 33: Seeds Rocket Business Launch

    Seeds Rocket Business Launch Company Development Beyond Just Venture Capital このイメージは、現在表示 できません。 Typical VC M3 Rocket Business Technology Seed Management Ground zero info-source Various Resource Sourcing and expertise of Industries healthcare industry (Executives, Funding) Regulatory Planning Minori

  34. Slide 34: First Seed: MedTecHeart

    First Seed: MedTecHeart ◆Console Unit このイメージは、現在表示 できません。 R&D venture in collaboration with Tokyo Medical and Dental University and Tokyo Institute of Technology Developed an extracorporeal ventricular assist device (VAD) with a magnetically levitated centrifugal structure ◆Pump Head and Motor Uni

  35. Slide 35: M3 is Just Getting Started

    M3 is Just Getting Started このイメージは、現在表示できません。 Copyright © 2016 M3, Inc. All rights reserved. 34

  36. Slide 36: Annual Results & Forecast for FY2016

    Annual Results & Forecast for FY2016 Sales Operating Profit & Net Profit (mn yen) (mn yen) 75,000 23,000 Operating Profit Net Profit 64,660 20,022 51,346 16,061 15,300 13,738 13,493 36,759 12,704* 10,428 9,294 8,878 26,007 7,648 19,040 6,031 5,5987,844* 14,646 4,803 4,492 11,811 3,597 3,990 3,486 7,

  37. Slide 37: FY2016 Budget Guideline

    FY2016 Budget Guideline Topline  Opportunities are partially and conservatively incorporated  Pending new businesses and M&As are excluded Cost  Continued aggressive hiring, planning increase of 400 headcounts over the fiscal year: – M3 Headquarters： 50 – Career： 100 – CRO, SMO： 150 – Others： 100

  38. Slide 38: FY2016 Budget Guideline

    FY2016 Budget Guideline MR-kun  Expected increase in number of products to support Family double digit growth  Stead growth from continued traction from job Career placement for physicians  Continued growth lead by strong orders and project Evidence progress Solution  Neues to turn profitable 

  39. Slide 39: Creating New Value in Healthcare

    Creating New Value in Healthcare M3 Medicine Media Metamorphosis Healthcare sector is enormous… ・ Japanese national spending on medical services is approximately ¥33tn (¥50tn including peripheral businesses) ・ Equivalent to 10% of Japanese GDP ・ Sector controlled by only 290,000 physicians (0.2% of

M3 — FY2015 Earnings Presentation on 6ix