エムスリー（2413） – M3, Inc. Presentation Material

M3, Inc.Presentation MaterialAp r i l 2 0 2 2Copyright © 2022 M3, Inc. All rights reserved.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 assumptions are objectively incorrect and/or may produce differing actual results from those mentioned in the statements. Furthermore, information and data other than those concerning the Company and its subsidiaries/affiliates are quoted from public information, and the Company has not verified and will not warrant its accuracy or dependency.M3, Inc.Copyright © 2022 M3, Inc. All rights reserved.1Annual ResultsSalesOperating Profit & Net Profit(mn yen)208,159169,198(mn yen)Operating ProfitNet Profit130,973113,05994,47178,14364,66051,34636,75926,00719,04095,14166,10857,97241,19834,33730,80027,48619,22521,34624,15325,05020,02216,93813,73816,0618,87810,42813,4935,7297,4758,53414,64611,8112,2763,854107 480 891 1,563255 509 895 1,683 2,677 3,597 3,990 4,803 6,031 7,648 9,294136 279 493 991 1,609 1,965 2,363 1,938 3,486 4,492 5,5984662FY00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21-93-93FY00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21(6m)(6m)Continued growth irrespective of Medlive related profitsCopyright © 2022 M3, Inc. All rights reserved.2FY2021 Consolidated Results(mn yen)FY2020 FY2021 YoYSales169,198208,159+23%Operating ProfitPre-taxProfit57,97295,141+64%58,26496,187+65%+20%excluding stock valuation impact such as the Medlive IPONet Profit41,19866,108+60%5.2 billion yen for Q4 in temporary impairments on items such as overseas intangible assets and affiliate Visionary HoldingsCopyright © 2022 M3, Inc. All rights reserved.3FY2021 Consolidated Results by Segment(mn yen)FY2020FY2021YoYDomesticMedicalPlatformEvidenceSolutionCareerSolutionSiteSolutionEmerging BusinessesOverseasSalesProfitSalesProfitSalesProfitSalesProfitSalesProfitSalesProfit77,076 85,92837,903 39,55319,47322,7563,6185,65413,537 14,094+11%+4%+17%+56%+4%3,7534,646+24%16,55535,184+113%1,5373,3289503,399+121%3,360-601+1%-42,14751,831+23%12,59944,837+256% Marketing support sales +11% Continued upfront investment in staff reinforcement Acceleration in clinical trials Contribution partly from vaccine support services for corporates and municipalities Q4 intangible asset impairment Q4 affiliate impairment (Visionary Holdings) 10% profit growth excluding 30.9 bn yen profit from Medlive IPOCopyright © 2022 M3, Inc. All rights reserved.4FY2021 Overview DX rapid acceleration seen during COVID (such as in Webinars) is MedicalPlatformnormalizingat the onset of FY22 DX continues to progress, with 25% YoY growth in orders backlog COVID related projects (vaccine and treatments) remain steady with Evidence Solutionbacklog at 33.7 billion yen Digitalization and decentralization (DCT) of trials continue to progressCareerSolution Business expanded with contribution partly from vaccine administration support services Core businesses overall remain on recovery path with alleviation from negative COVID impact SiteSolution COVID vaccine administration support services and clinical trial businesses remain steady Growth seen in core businesses such as home nursing care servicesOverseasChina contribution All regions doing strongly with +23% profit growth excluding the Copyright © 2022 M3, Inc. All rights reserved.5M3’s Triple Growth Engine + CSV1. Individual Business Development2. EcosystemExpansion(Sagrada Familia)3. Ecosystem Synergy CreationRegionsRegionsRegions１２３４５６７８９1011１２３４５６７８９1011１２３４５６７８９1011iBusnessesＰＭＳＥＳＳACSREHTOiBusnessesＰＭＳＥＳＳACSREHTOiBusnessesＰＭＳＥＳＳACSREHTO Pharma marketing / Clinical Scene DX Continuous new business entries Cross-cell synergy maximization4. Social Impact Creation → CSVCopyright © 2022 M3, Inc. All rights reserved.6Growth Engine 1： Individual Business DevelopmentRegionsRegionsRegions１２３４５６７８９1011１２３４５６７８９1011１２３４５６７８９1011iBusnessesＰＭＳＥＳＳACSREHTOiBusnessesＰＭＳＥＳＳACSREHTOiBusnessesＰＭＳＥＳＳACSREHTO4. Social Impact Creation → CSVCopyright © 2022 M3, Inc. All rights reserved.7Pharmaceutical Sales & Marketing DXCopyright © 2022 M3, Inc. All rights reserved.8Pharma Marketing Cost and TAM for M3PresentFutureM3’s RoleIndustry productivity improvement from DXMR Related Costs1.5 tn yen97%70~80%700~800 bn yen(2) MR Activity DX SupportInternet50 bn yen3%20~ 30%200~300 bn yen= TAMInternet (1)Marketing Support(3) Data-driven Marketing SupportM3 involvement to go beyond the bounds on the internet to improve productivity across the entire industry Ref: M3 survey and estimate; numbers are approximateCopyright © 2022 M3, Inc. All rights reserved.9Service Scope ExpansionPer Product SupportFirm-Wide DX SupportThemeEfficient promotionFundamental productivity improvement of the marketing and sales processesClientProduct managerTop managementService CoverageMarketing per individual drugOptimization of marketing and sales of entire drug portfolioService StrategyMR-kun, Web Conference, etc. Complete solution provision such as marketing strategy planning and resource allocation dataContract FormatContracts per productComprehensive strategic alliancesDrastic structural reinforcement implemented to support pharmaceutical DX support… a new paradigm shift in collaboration with pharma companiesCopyright © 2022 M3, Inc. All rights reserved.10Professional Staff Fortification Plan375~500External Consultants23035%65%100M3 Employees(indexed)FY2019(pre-COVID)NOWFew years from now..Cost per Staff12Temporary increase due to outsourcing1Normalized with proper hiresStaff Fortification Initiatives HR capacity increase Recruiter reinforcement(fee scale) New grad recruitment fortification Appeal potential M3 career paths and merit(skill acquirement, compensation, etc.)Costs to remain flat as outsourced consultants are reduced. Copyright © 2022 M3, Inc. All rights reserved.11Hiring Progress of M3 ProfessionalsNumber of Hiresapprox.6.0xQ4FY20Q1Q2Q3Q4FY21Significant growth in hires as a result of internal and external fortification initiatives. Expecting further increase in and contribution from new hires next fiscal year. Copyright © 2022 M3, Inc. All rights reserved.12Digital Marketing Business Review and Outlook Stabilization of FY20 year-end influx seen during COVID saw FY21Q4 sales flat YoY Steady progress in structural DX confirm continued market expansion As a key growth driver, staff reinforcement initiatives progressed favorably Full-scale contribution to business performance from staff fortification expected to accelerate growth in FY22 (FY22 orders backlog +25% YoY so far) Margins expected to recover going forward as outsourced consultants are reduced in line with proper staff fortificationCopyright © 2022 M3, Inc. All rights reserved.13DX of the Clinical SceneCopyright © 2022 M3, Inc. All rights reserved.14Potential in DX of ClinicsCurrentPost DXAccessOnline reservationsLong waiting timein lobbiesDiagnosisOfflineOnline/Offline HybridPaymentWait to pay atservice deskRxLocal pharmacyMedical RecordsMidnight EmergenciesDifficult accessWait until next morningHead straight home (digital payments)Delivered to home or officeReview own health records online24/7 Online ServiceAdvancement in DX of the clinical scene offers a complete renewal of the patient experienceCopyright © 2022 M3, Inc. All rights reserved.15Further DX through M3 SolutionsRenamed as “M3 Solutions” (from “C.M.S”) as of April 2022 with newly appointed CEO, Rie Nakamura Expansion of DigiKar Smart launched in Oct. 2021, along with M3 DigiKarFortification of sales structure to deliver extensive DX services to the clinical sceneEvolving from an EHR provider, to a company providing DX support for the clinical sceneCopyright © 2022 M3, Inc. All rights reserved.16M3 DigiKar EHR GrowthNumber of Sites Using M3 DigiKar3,600 Over 3,600 medical sites have adopted DigiKar No.1 in annual adoptions across both cloud and on-premise electronic health record systemsFY15161718192021Incontestable #1 market share within cloud based digital health records, with over 90 million charts on recordCopyright © 2022 M3, Inc. All rights reserved.17Acquisition of Clinic EHR BusinessProduct LineupDX Acceleration noitacifitroFmroftalPssensuBRHEi ClientCoverageOver 10,000 medical sites utilizing M3 and Canon’s EHR and medical accounting services, further accelerating DX of clinics.Copyright © 2022 M3, Inc. All rights reserved.18DX of Medical Field: M3 DigiKar SmartMedical Institutions:Managing SystemPatients:Mobile AppAppointmentNextAppointmentAuto-ReceptionM3 DigiKar SmartOne-Stop FunctionalityPaymentConsultationLinking toEMR No bulky patient cards Cashless payments Less wait time Treatment continuation with appointment reminders Less reception work Less system costs Infectious disease control Facilitation of return visits and continuity of CareFull-scale launch via M3 Solutions, aiming for further sales expansion Copyright © 2022 M3, Inc. All rights reserved.19Growth Engine 2： Ecosystem Expansion(Sagrada Familia)RegionsRegionsRegions１２３４５６７８９1011１２３４５６７８９1011１２３４５６７８９1011iBusnessesＰＭＳＥＳＳACSREHTOiBusnessesＰＭＳＥＳＳACSREHTOiBusnessesＰＭＳＥＳＳACSREHTO4. Social Impact Creation → CSVCopyright © 2022 M3, Inc. All rights reserved.20Establishment of JV with SONY: SapplyM Various technologies・・・PS5, AI, VR, sensing Entertainment expertise 310k doctor members(90+% coverage) Network, expertise, and business development strength within the healthcare industry49%51% Provide “solutions to increase the number of people who can live healthy and joyful lives through the creative use of advanced technology” Solutions business expansion through integration of medical expertise and technology First service launch: An at-home rehabilitation support system, “Reha-Katsu”Creating new experiences and enhancing the well-being of patients through merging of assets across both firms.Copyright © 2022 M3, Inc. All rights reserved.21Home Rehabilitation Support Service “Reha-Katsu” Integrate M3’s stroke rehabilitation center expertise with Sony’s posture estimation and motion analysis technologies With on-line support from specialists, patients can enjoy rehabilitation at homes with no need to frequent a facility Targeted for stroke patientsrequiring nursing care and rehabilitation (1.23 million estimated patients) Copyright © 2022 M3, Inc. All rights reserved.22Market Launch of Burn Treatment Device “RECELL”RECELL DeviceSpraying RECELL Feb 2022: gained Japanese regulatory approval FY22 H2: expected insurance reimbursement approval Radically improved prognosis compared to traditional skin grafting procedures for severe acute burns– Required donor skin reduced to 1/80 of burn area, vs. 1/2~1/4 with traditional methods– Minimized pain and scarring post-procedure– Significant reduction in time to treatment; the autologous cell suspension can be prepared in roughly 60 min. to be sprayed onto burn areaExpected to provide an effective option for physicians in times of accidents, natural disasters or acts of terrorism. Copyright © 2022 M3, Inc. All rights reserved.23Business Scope Expansion and Growth Potential2010201520202021Country：3 → 8 (2.5x) →11 (3.5x) →15 (5.0x)Business Types ：6 → 15 (2.5x) → 35 (6.0x) →36 (6.0x)Business Units(Type x Country)：10 → 24 (2.5x) → 56 (5.5x) →64 (6.5x)Sales (bn)： 14.6 → 64.7 (4.5x) → 169.1 (12x) → 208.1 (15.0x)Aggressive M&A to ensue in reaching growth potentials exceeding 10~20x current levels…Copyright © 2022 M3, Inc. All rights reserved.24Growth Trend per Business Expansion PhasesSales Trend (JPY)Businesses added between FY2015 and FY2021Businesses added between FY2010 and FY2014Business as of FY2010208 bilapprox.15×64 bil~33~3115 bil~50~90~70Businesses VIDAL US ClinicalTrial Domestic ClinicalTrial US Career UK Advertisement MR-kun/Research Career US ResearchFY2010FY2015FY20212/3 of FY2021 sales were created from new businesses added after 2010, with further growth expectedCopyright © 2022 M3, Inc. All rights reserved.25Increase in M&ANumber of Deals That Were Evaluated3502671861441116075FY15FY16FY17FY18FY19FY20FY21M&A activity and pipeline continue rapid acceleration in line with business expansion. Number of executions and size are also increasing.Copyright © 2022 M3, Inc. All rights reserved.26Growth Engine 3： Ecosystem Synergy CreationRegionsRegionsRegions１２３４５６７８９1011１２３４５６７８９1011１２３４５６７８９1011iBusnessesＰＭＳＥＳＳACSREHTOiBusnessesＰＭＳＥＳＳACSREHTOiBusnessesＰＭＳＥＳＳACSREHTO4. Social Impact Creation → CSVCopyright © 2022 M3, Inc. All rights reserved.27M3’s Paradigm ShiftMovement 1: 2000-2009Movement 2: 2010-2019Movement 3: 2020-Internet Servicee x Real Operations Ecosystem Synergies MR-kun Family Market Research e-Clinical Trials M3 Career(Job placement for physicians) 7P Projects Monetization through projects with autogenic synergy-generationCopyright © 2022 M3, Inc. All rights reserved.28１２３４・・・ｎNumber of businessesSynergy Links0136nC2Copyright © 2022 M3, Inc. All rights reserved.29Business Scope Expansion and Growth Potential2010201520202021Country：3 → 8 (2.5x) →11 (3.5x) →15 (5.0x)Business Types ：6 → 15 (2.5x) → 35 (6.0x) →36 (6.0x)Business Units(Type x Country)：10 → 24 (2.5x) → 56 (5.5x) →64 (6.5x)Sales (bn)： 14.6 → 64.7 (4.5x) → 169.1 (12x) → 208.1 (15.0x)Synergy potential between businesses: 64C2 ＝ 2,016Copyright © 2022 M3, Inc. All rights reserved.30Ecosystem Synergy Creation FlowReinforcement of EcosystemStructural DifferentiationInvestment Target ExpansionSelf-reinforcing expansion cycle powered by superbly capable staff. Talent fortification structure development to further bolster cycle sustainabilityCopyright © 2022 M3, Inc. All rights reserved.31４. Social Impact Creation → CSVRegionsRegions１２３４５６７８９1011１２３４５６７８９1011Regions１２３４５６７８９1011iBusnessesＰＭＳＥＳＳACSREHTOiBusnessesＰＭＳＥＳＳACSREHTOiBusnessesＰＭＳＥＳＳACSREHTO4. Social Impact Creation → CSVCopyright © 2022 M3, Inc. All rights reserved.32COVID Vaccine and Treatment Related InitiativesVaccine AdministrationClinical TrialsCorporates MunicipalitiesMedical SitesJapan〇(168 corporates)〇(201 municipalities)Overseas ✕✕〇(vaccines, treatments)〇(vaccines, treatments, boosters)Vaccine services to support 9.96 million administrations, along with support for development of drugs vaccines domestically and abroad. High probability of service demand for 4th round, boosters, and administration for children.Copyright © 2022 M3, Inc. All rights reserved.33M3’s CSV Impact for PatientsOnline Visitation Support During COVID“Menkai-kun” utilized at 105 sites, by over 250,000 patients and families As of April 2022, since service launchProfessional Advice Provision for Health ConcernsOffering physician answers to daily health concerns; 300,000+ posted questions gathering over 75 million UU views annually FY2021Granting Wishes for Severely Ill Patients26 wishes granted through the CaNoW program; over 1.5 million PVs of videos and articles documenting the grantsAs of April 2022, since service launch in 2019In-Office Time Reduction Reduced approx. 23.7 million hours of in-office lobby wait-time for patientsFY2021; based on 24 million receptions* CSV = Creating Shared ValueCopyright © 2022 M3, Inc. All rights reserved.34M3’s CSV Impact for Medical ProfessionalsInformation Provision for Medical Professional Members9.2 million views via information delivery such as WebinarsFY2021Medical Examination SupportSupporting medical examinations through management of information across 120 million electronic health records, domestically and abroad As of FY2021Productivity Improvement for Pharma CompaniesDistribution of 110 million e-details = workload of 55,000 MRs (more than total number of MRs in Japan) FY2021Actualizing M3’s mission across various areas, to reduce unnecessary medical costs and to support healthier lives using digital technologies… social contribution through business creation * CSV = Creating Shared ValueCopyright © 2022 M3, Inc. All rights reserved.35FY2022 OutlookCopyright © 2022 M3, Inc. All rights reserved.36FY2022 Qualitative OutlookMedical Platform Expected growth from continued structural DX and staff fortification contributions to business performance Margins to improve with reduction of external consultantsEvidence Solution COVID and mRNA related studies to continue, with advancement in digitalization of clinical trialsCareer Solution Core business expected to grow despite uncertainty surrounding vaccine related business Core business to further accelerate upfront Site Solutioninvestments for growth, profit may remain flat Lack of transparency surrounding vaccine related businesses with profits expected to decreaseDriver 1: Individual Business DevelopmentOverseas Steady growth expected in all regions(excludingChina impact)Driver 2:Ecosystem Expansion Healthy expansion expected (with EHR businessacquisition already executed) Number and size of M&A evaluations to increaseDriver 3:Ecosystem SynergyCreation Continued acceleration expectedCopyright © 2022 M3, Inc. All rights reserved.37Outlook＋＋±－＋＋＋Annual ResultsSalesOperating Profit & Net Profit(mn yen)208,159169,198(mn yen)Operating ProfitNet Profit130,973113,05994,47178,14364,66051,34695,14166,10857,97241,19834,33730,80024,15321,34627,48625,05020,02219,22516,93816,06113,73813,49310,4288,87836,75914,64626,00719,040891107 4801,5632,2763,8545,7297,4758,53411,811255 509 895 1,683 2,677 3,597 3,990 4,803 6,031 7,648136 279 493 991 1,609 1,965 2,363 1,93846629,2943,486 4,492 5,598FY00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21(6m)-93-93FY00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21(6m)Forecasts were not given due to unpredictable variables. Will continue with a medium and long-term perspective and work towards the growth potential exceeding 10x the current levelCopyright © 2022 M3, Inc. All rights reserved.38