Cellsource Co., Ltd. · TSE:4880
Cellsource — Q2 FY10/2024 Earnings Presentation
41 slides from Cellsource's earnings presentation, Jun 14, 2024
Slide 1: Earnings Presentation Q2 FY10/2024
Earnings Presentation Q2 FY10/2024 CellSource Co., Ltd (TSE Prime: 4880)
Slide 2: Table of Contents
Table of Contents 1 Message from CEO 2 Financial Results for Q2 FY10/2024 3 Business Strategy for Contract Processing Service in Orthopedics 4 KPIs 5 Progress in Other Businesses
Slide 3: Message from CEO
Message from CEO
Slide 4: CEO Message: Redefining Our Strengths
CEO Message: Redefining Our Strengths Understand our operating field and current conditions Redefine the true strengths of CellSource • Visited 22 clinics nationwide and engaged in dialogue with about 40 physicians and nurses Commitment • Attended patient consultations to understand their needs to o
Slide 5: CEO Message: Understanding the Current Situation and Transformation
CEO Message: Understanding the Current Situation and Transformation Recognition of the current situation and path to transformation observed in five months Will announce strategies for discontinuous growth as part of the medium-term management plan Analysis of current situation Current situation Dir
Slide 6: Slide 6
Slide 7: Performance Highlights for 1H FY10/2024
Performance Highlights for 1H FY10/2024 Net Sales Operating Profit Profit JPY 2.22 billion JPY 281 million JPY 299 million (+2.6% YoY) (-57.3% YoY) (-26.8% YoY) Blood-derived product Operating Profit ASC contract contract processing Margin processing orders orders 12.6% 10,516 739 (-17.8pt YoY) (-28
Slide 8: Performance Summary
Performance Summary Q1 Q2 1H 1H Full-year l Net sales: Net sales fell 10.3% QoQ, as [Millions of yen] QoQ YoY Progress FY10/2024 FY10/2024 FY10/2023 FY10/2024 forecast sharp sales declines in medical device and cosmetics sales more than offset a Net sales 1,173 1,054 -10.3% 2,170 2,227 +2.6% 5,368 4
Slide 9: Contract processing sales hit bottom, with orders on a recovery track
Contract processing sales, which had declined for two consecutive quarters, hit bottom, with contract processing orders on a recovery track. Net sales were down QoQ, due to a contraction in medical device sales from a sharp expansion in Q1. Cosmetic sales and other Millions of yen Medical device sal
Slide 10: Gross Profit and Operating Profit
Gross Profit and Operating Profit The QoQ decline in GPM was due to a drop in profitability of cosmetics sales (pg.11). The downturn in OPM was mainly due to expenses for the new office and strategic investments (pg. 12, 13). Gross profit Operating profit [Millions of yen] [Millions of yen] 1,200 Gr
Slide 11: Analysis of Gross Profit Margin
Analysis of Gross Profit Margin The QoQ decline in GPM was mainly due to a change in the sales mix in the cosmetics sales business. We do not project any major factor that would push up fixed costs, other than real estate-related expenses for ZERO LAB expected from Q4 onward. Overview Outlook Gross
Slide 12: SG&A Expenses
SG&A Expenses Infrastructure for growth now in place following staff additions, office relocation, and acquisition of new production facility [Millions of yen] Other YoY Advertising expenses + sales promotion expenses Total Millions of yen 600 575 585 R&D expenses 557 Rent expenses + depreciation ex
Slide 13: Operating costs and strategic investments
Of operating costs*1, we expect the increase in fixed costs, including rent for the new office, to be limited. We plan to make strategic investments*2, including R&D expenses earmarked for 2H, with discipline. [Millions of yen] 700 600 -117 500 Decrease in gross profit -131 400 Decrease in contract
Slide 14: Rent
Rent Expect to start booking rent for ZERO LAB, previously booked as SG&A expenses, as cost of sales in FY10/2024, with the start of the facility’s operations Expect rents under SG&A expenses to decline due to our moving out from the old office and production facility Cost of sales + SG&A expenses C
Slide 15: Non-current assets increased; robust financial base maintained
Non-current assets increased due to assets related to the new office. Maintained a robust financial base. Plan to announce future cash allocation policy along with the medium-term management plan. [Millions of yen] 7,000 Cash and deposits Current liabilities 452 562 Other current asset 225 216 6,000
Slide 16: Business Strategy for Contract Processing Service in Orthopedics
Business Strategy for Contract Processing Service in Orthopedics
Slide 17: Business Strategy for Contract Processing Service in Orthopedics: Executive Summary
Business Strategy for Contract Processing Service in Orthopedics: Executive Summary Given the large number of knee osteoarthritis patients, we understand the market potential is enormous. Target markets We believe regenerative medicine therapies can fill the gap in patient needs as an approach that
Slide 18: Timeline for Implementing Strategies for Contract Processing Service
Timeline for Implementing Strategies for Contract Processing Service Plan to implement strategies for the contract processing business in 2H Aim to be able to disclose some results along with the medium-term management plan FY10/2024 FY10/2025 Q2 Q3 Q4 Q1 Q2 Jun: 1H results briefing (today) Dec: Sch
Slide 19: Potential of Regenerative Medicine in Treating Knee Osteoarthritis
Potential of Regenerative Medicine in Treating Knee Osteoarthritis Considering the estimated number of knee osteoarthritis patients and the number of total knee replacements performed, there exists a massive potential market. Regenerative medicine including our ASC, and PFC-FDTM will replace or supp
Slide 20: KPIs Comprising the Number of Blood-derived Product Contract Processing Orders
KPIs Comprising the Number of Blood-derived Product Contract Processing Orders*1 Partner medical institutions in the orthopedics field steadily increased, but there is still room for growth for the active ratio among hybrid medical institutions and orders per active medical institutions. Self-funded
Slide 21: Basic Policy
Basic Policy The number of total orders is a function of the number of partner medical institutions and the number of orders per clinic, both of which have much room for growth. Total orders No. of partner medical institutions No. of orders per clinic No. of orders at partner medical institutions pe
Slide 22: Basic Policy: KPI We Prioritized to Date
Basic Policy: KPI We Prioritized to Date We intend to focus less on expanding partner medical institutions through sales activities for the time being. Total orders No. of partner medical institutions No. of orders per clinic We have worked on increasing the number of partner medical institutions as
Slide 23: Basic Policy: KPI to Focus on From Now On
Basic Policy: KPI to Focus on From Now On By strengthening support for medical institutions, we will focus on growing orders per clinic. Total orders No. of partner medical institutions No. of orders per clinic No. of orders at a partner Despite the challenge of increasing orders per medical institu
Slide 24: Measures to Increase Orders per Clinic
Measures to Increase Orders per Clinic Broke down orders per clinic into several KPIs, and identified support areas to focus on Aware of our services Ex. of measures: Existing Increase recognition of our patients services within clinics 1 No. of patients Unaware of our services Ex. of measures: Tota
Slide 25: Target Medical Institutions
Target Medical Institutions Classified active partner medical institutions into three categories based on the annual order count. About 80% of orders from hybrid medical institutions are from those in categories A and B. Active medical institution categories A: Hybrid medical institutions with 60+ a
Slide 26: Target Medical Institutions
Target Medical Institutions Classified active partner medical institutions into three categories based on the annual order count. About 80% of orders from hybrid medical institutions are from those in categories A and B. Through measures set forth on pg. 24, we aim to move category B medical institu
Slide 27: KPIs Behind the Number of PFC-FD Orders and Future Direction
KPIs*1 Behind the Number of PFC-FD Orders and Future Direction By increasing the “number of orders per active medical institution” for hybrid medical institutions, we aim to firmly grow orders Self-funded treatment*2 Hybrid* Total No. of partner medical institutions 16 clinics 1,304 clinics 1,320 cl
Slide 28: Launch of Blood-derived Product Contract Processing Service, PFC-FD (2.0)
Launch of Blood-derived Product Contract Processing Service, PFC-FD (2.0) Contributed to order growth at medical institutions specializing in self-funded treatment*1 and hybrid medical institutions*2, as we had intended, with orders from hybrid medical institutions reaching the highest level for FY1
Slide 29: Slide 29
Slide 30: Business KPI Highlights for Q2 FY10/2024
Business KPI Highlights for Q2 FY10/2024 Number of partner Blood-derived product Adipose-derived stem cell contract processing orders contract processing medical institutions (cumulative) orders*1(cumulative) 1,865 10,516 739 (+308 YoY) (-14.9% YoY) (-28.6% YoY) *1: Includes contract processing orde
Slide 31: Number of Partner Medical Institutions
Number of Partner Medical Institutions Shifting sales resources previously allocated to the acquisition of new partner medical institutions to growing orders from existing partner medical institutions Change in sales policy No. of partner medical institutions End-Q2 FY10/2024 1,865 (+ 308 YoY)
Slide 32: Number of Contract Processing Orders for Blood-derived Products
Number of Contract Processing Orders for Blood-derived Products Q2 FY10/2024 5,202 orders (-18.2% YoY) Cumulative: 84,186 orders As of FY10/2024, the number of contract processing orders is calculated as of when the order is fulfilled (previously as of when the order is received). As the impact of t
Slide 33: Number of Contract Processing Orders for Adipose-derived Stem Cells (ASCs)
Number of Contract Processing Orders for Adipose-derived Stem Cells (ASCs) Q2 FY10/2024 368 orders (-28.5% YoY) Cumulative: 8,359 orders As of FY10/2024, the number of contract processing orders is calculated as of when the order is fulfilled (previously as of when the order is received). As the imp
Slide 34: Daily Average Number of Contract Processing Orders
Daily Average Number of Contract Processing Orders 100 87.0 82.5 79.0 80.2 78.8 78.5 80 76.3 77.5 74.8 75.4 76.0 69.9 69.1 69.8 68.9 68.6 68.6 65.9 64.2 62.8 61.7 60.1 59.1 60 56.0 40 20 0 June July August Septem ber October November Decem ber Janua ry Februa ry March April May June July August Sept
Slide 35: Monthly Contract Processing Orders for Blood-derived Products by Department
Monthly Contract Processing Orders for Blood-derived Products by Department (No. of Orders at hybrid orthopedic clinics reached the highest level for FY10/2024 for two months in a row orders) in April and May, with their share also growing 2,500 31 29 132 57 156 71 32 32 58 76 57 166 116 159 148 35
Slide 36: Quarterly Results
Quarterly Results Millions of yen Net Sales Contract processing services Consulting services Medical device sales Cosmetic sales and other SG&A expenses Operating profit Profit for the quarter Total assets Net assets EBITDA FTE*1 EBITDA per employee (unit:1,000yen)*2 Number of Contract Processing Or
Slide 37: Progress in Other Businesses
Progress in Other Businesses
Slide 38: Egg Freezing and Storage Service
Egg Freezing and Storage Service Progress in expanding orders Aim for No. 1 share in Japan in egg freezing and storage service Partner medical l Acquiring partner medical institutions, centered on fertility clinics Partner medical institutions*1 1 Support seamless service launch for clinics newly in
Slide 39: Progress in Other Businesses and Research
Progress in Other Businesses and Research • Apr: Began providing canine platelet-derived growth factor therapy at Anicom Specialty Medical Institute. Expanding the service to treat disorders other than those eligible for PARM (OA, corneal ulcer, dry Veterinary keratoconjunctivitis) medicine • Jun: P
Slide 40: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements The materials and information provided in this presentation contain so-called "forward-looking statements." These statements are based on current expectations, forecasts, and assumptions accompanying risks, and they may involve uncertainties that
Slide 41: CellSource
CellSource