M3, Inc. · TSE:2413
M3 — FY2021 H1 Earnings Presentation
37 slides from M3's earnings presentation, Oct 27, 2021
Slide 1: M3, Inc. Presentation Material October 2021
M3, Inc. Presentation Material O c to ber 2 0 2 1 Copyright © 2021 M3, Inc. All rights reserved.
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
Slide 3: FY2021 H1 Consolidated Results
FY2021 H1 Consolidated Results (mn yen) FY2020 H1 FY2021 H1 YoY Sales 75,022 97,647 +30% +33% excluding Operating Profit 23,931 61,941 +159% stock valuation impact such as Pre-tax Profit 23,943 62,232 +160% the Medlive IPO Net Profit 16,587 42,747 +158% Steady progress to the year Copyright © 2021 M
Slide 4: FY2021 H1 Consolidated Results by Segment
FY2021 H1 Consolidated Results by Segment (mn yen) FY2020 H1 FY2021 H1 YoY Medical Sales 30,915 38,401 +24% Marketing support sales +28% Platform Profit 13,748 16,725 +22% Continued upfront investment in staff reinforcement Evidence Sales 9,603 10,132 +6% Solution Profit 1,631 2,053 +26% Domesti
Slide 5: FY2021 H1 Consolidated Operating Profit Contribution
FY2021 H1 Consolidated Operating Profit Contribution (mn yen) Contribution from vaccine Stock valuation support services changes Continued demand from 30,931 pharma 422 -769 621 3 1,731 38,010 2,094 2,978 61,941 Healthy 31,010 overall 23,931 FY20 Adjust. FY21 * China IPO Related: Gains from deconsol
Slide 6: FY2021 H1 Overview
FY2021 H1 Overview Continued healthy demand due to accelerated digital Medical transformation in pharma marketing Platform Temporary margin compression from upfront investment on significant staff reinforcement, recovery expected from H2 and into next FY On recovery path as COVID related negat
Slide 7: Pharmaceutical Sales & Marketing DX
Pharmaceutical Sales & Marketing DX Copyright © 2021 M3, Inc. All rights reserved. 6
Slide 8: Pharma Marketing Cost and TAM for M3
Pharma Marketing Cost and TAM for M3 Present Future M3’s Role Industry productivity improvement from DX MR Related 97% Costs 70~ 700~800 (2) MR Activity 1.5 tn yen 80% bn yen DX Support (3) Data-driven Marketing (1) Internet Support Internet 20~ 200~300 Marketing 30% bn yen Support 50 bn yen 3% = TA
Slide 9: eCSO: Medical Marketers
eCSO：Medical Marketers Typical CSO Medical Marketer Localized Physical Visits Nationwide eDetails Coverage 80~150 physicians 500~1,000 physicians # of Details 150~200 per month 2,000~4,000 per month Interaction net 1~2 hrs/day net 5~10 hrs/day Method mainly physical visits eDetails allow physician p
Slide 10: Service Scope Expansion
Service Scope Expansion Per Product Support Firm-Wide DX Support Fundamental productivity Theme Efficient promotion improvement of the marketing and sales processes Client Product manager Top management Service Marketing per individual Optimization of marketing and Coverage drug sales of entire drug
Slide 11: Productivity of Professional Staff
Productivity of Professional Staff Sales per Staff Value Add per Staff (gross profit) (indexed) (indexed) 4～6 10~20 over over ４x 10x 1 1 Typical DX M3 Typical DX M3 Consulting Consulting Firm Firm Copyright © 2021 M3, Inc. All rights reserved. 10
Slide 12: M3 vs. DX Consulting Firms
M3 vs. DX Consulting Firms Consulting Firms M3 Strategy Planning ✔✔ ✔✔ Platform/ Value Add MR-kun, myMR- Client Reach － ✔✔ kun, others Broad range of Date － ✔✔ real world data Execution Rapid PDCA Support ✔ ✔✔ based results Concrete business Output Plan impact Solution fees, Revenue Fee Consulting f
Slide 13: Professional Staff Fortification Plan
Professional Staff Fortification Plan (indexed) Staff Fortification 375~500 Initiatives HR capacity increase External Consultants Recruiter 200 reinforcement approx. (fee scale) 40% New grad 100 recruitment approx. M3 fortification 60% Employees Appeal potential FY2019 NOW Few years M3 caree
Slide 14: Sales per M3 Professional Staff
Sales per M3 Professional Staff (indexed) 130~ Key Productivity 115 Improvement Factors 100 Expansion of recurring services Deal enlargement New service utilization Enhanced staff training Staff productivity improvement FY2019 NOW Few years (remote meetings, (pre-COVID) from now… etc.) Cop
Slide 15: M3 Career Path Options
M3 Career Path Options Recruiting Material Business Phase Options 0➞1 Phase Management (ex: Clinic DX, 7P) M3 Professional 1➞10 Phase Management (ex: overseas regional head) Staff 10➞100 Phase Management (ex: pharma platform) Access to various staged businesses in building management skills and trac
Slide 16: New Grad Recruitment Fortification
New Grad Recruitment Fortification 2021 Internship Program Over 6,500 university applicants Top5 schools: – Keio： 1,058 – Waseda： 981 – Kyoto U.： 654 – Osaka U.： 467 M3 offers: – Tokyo U.： 408 Strategy Planning Skills attainable in consulting firms Applications M&A Experience attainable in in
Slide 17: DX of the Clinical Scene
DX of the Clinical Scene Copyright © 2021 M3, Inc. All rights reserved. 16
Slide 18: Potential in DX of Clinics
Potential in DX of Clinics Current Post DX Long waiting time Access Online reservations in lobbies Diagnosis Offline Online/Offline Hybrid Wait to pay at Head straight home Payment service desk (digital payments) Delivered to home Rx Local pharmacy or office Medical Review own health Difficult acces
Slide 19: M3 DigiKar EHR Growth
M3 DigiKar EHR Growth Number of Sites Using M3 DigiKar Over 3,000 medical sites have adopted DigiKar 3,000 No.1 in annual adoptions across both cloud and on- premise electronic health record systems FY15 16 17 18 19 20 21FCT Incontestable #1 market share within cloud based digital health records
Slide 20: LINE Doctor Development
LINE Doctor Development LINE Doctor Usage (consultations) Trial phase launched in approx. Dec 2020 across central 2.5x Tokyo Usage increased by 2.5x compared to June, on back of spike in COVID cases Jun 2021 Aug 2021 Further penetration across medical sites given spike in COVID cases in August C
Slide 21: DX of Medical Field: M3 DigiKar Smart
DX of Medical Field: M3 DigiKar Smart Medical Institutions: Patients: Managing System Mobile App Appointment Next Auto- Appointment Reception M3 DigiKar Smart One-Stop Functionality Payment Consultation No bulky patient cards Less reception work Cashless payments Less system costs Less wai
Slide 22: COVID-19 Related Projects
COVID-19 Related Projects Copyright © 2021 M3, Inc. All rights reserved. 21
Slide 23: COVID Vaccine and Treatment Related Initiatives
COVID Vaccine and Treatment Related Initiatives Vaccine Administration Clinical Trials Corporates Municipalities Medical Sites 〇 〇 〇 Japan (vaccines, (129) (139) treatments) 〇 Overseas ✕ ✕ (vaccines, treatments, boosters) Vaccine services to support 7.25 million administrations. Expected orders for
Slide 24: Japan's 1st Virtual Clinical Trial at Medical Hotel
Japan’s 1st Virtual Clinical Trial at Medical Hotel ① Entry into medical ② Entry orientation treatment hotel facility Trial introduced by attending physician Transport arranged by government Nurses stationed at facility COVID Patient Physicians communicate Medical online Treatment Facility Imple
Slide 25: M3 Growth Strategy for 2020's
M3 Growth Strategy for 2020’s Copyright © 2021 M3, Inc. All rights reserved. 24
Slide 26: Business Scope Expansion and Growth Potential
Business Scope Expansion and Growth Potential 2010 2015 2020 Country ： 3 → 8 (2.5x) → 11 (3.5x) Similar pace Business Types ： 6 → 15 (2.5x) → 35 (6.0x) of growth expected Business Units (Type x Country) ： 10 → 24 (2.5x) → 56 (5.5x) over the next 10 years Sales (bn) ： 14.0 → 64.7 (4.5x) → 169.1 (12x)
Slide 27: M3: 2020 Triple Growth Engine for the Next Decade
M3: 2020 Triple Growth Engine for the Next Decade 5~10x growth potential remain ① Existing even in legacy businesses such as pharma marketing Business DX of clinics and DX abroad Development largely scaling on back of COVID impacts M3: Continual entry into new Growth Drivers ② Expansion of reg
Slide 28: Increase in M&A
Increase in M&A Number of Deals That Were Evaluated 267 186 190 144 111 75 60 FY15 FY16 FY17 FY18 FY19 FY20 FY21 M&A activity and pipeline continue rapid acceleration in line with business expansion. Number of executions and size are also increasing. Copyright © 2021 M3, Inc. All rights reserved. 27
Slide 29: M3's Paradigm Shift
M3’s Paradigm Shift Internet Service Movement 1: 2000-2009 e x Real Operations Movement 2: 2010-2019 Ecosystem Synergies Movement 3: 2020- MR-kun Family e-Clinical Trials 7P Projects Market Research M3 Career Monetization (Job placement for through projects physicians) with autogenic syn
Slide 30: Number of businesses Synergy
１ ２ ３ ４ ・・・ ｎ Number of businesses Synergy Links 0 1 3 6 nC2 Copyright © 2021 M3, Inc. All rights reserved. 29
Slide 31: Business Scope Expansion and Growth Potential
Business Scope Expansion and Growth Potential 2010 2015 2020 Country ： 3 → 8 (2.5x) → 11 (3.5x) Similar pace Business Types ： 6 → 15 (2.5x) → 35 (6.0x) of growth expected Business Units (Type x Country) ： 10 → 24 (2.5x) → 56 (5.5x) over the next 10 years Sales (bn) ： 14.0 → 64.7 (4.5x) → 169.1 (12x)
Slide 32: COVID-19 Ecosystem Synergies
COVID-19 Ecosystem Synergies Involved Segments Vaccine Vaccine/Treatment Administration Development Medical Platform Career Segments Solution Evidence Solution Site Solution 7.25 million vaccine Agile development of administrations domestic treatments and vaccines Value creation feasible only throug
Slide 33: Synergy Potential Between Businesses
Synergy Potential Between Businesses Business Synergy Potential Curve 12,000 10,000 Number of Synergies 8,000 6,000 4,000 2,000 56 Businesses 10C2 ・ ・ ・ ・ 56C2 0 45 ・ ・ ・ ・ 1,540 0 50 100 150 Number of Businesses Exponential synergy potential growth with increase in the number of businesses Copyrigh
Slide 34: Ecosystem Synergy Creation Flow
Ecosystem Synergy Creation Flow Reinforcement Structural of Ecosystem Differentiation Investment Target Expansion Self-reinforcing expansion cycle powered by superbly capable staff. Talent fortification structure development to further bolster cycle sustainability. Copyright © 2021 M3, Inc. All righ
Slide 35: M3's CSV Impact (1/2)
M3’s CSV Impact （1/2） Information Provision for Physicians 5.4 million views via information delivery such as Webinars FY2020 Productivity Improvement for Pharma Companies Distribution of 100 million e-details = workload of 50,000 MRs (equivalent to total number of MRs in Japan) FY2020 Medical Exami
Slide 36: M3's CSV Impact (2/2)
M3’s CSV Impact （2/2） Vaccine Administration Support Supporting 7.25 million administrations of the COVID vaccine As of FY2021 Professional Advice Provision for Health Concerns Offering physician answers to daily health concerns via 240+ thousand posted questions, gathering over 40 million UU views
Slide 37: Annual Results
Annual Results Sales Operating Profit & Net Profit 169,198 57,972 (mn yen) (mn yen) Operating Profit 130,973 Net Profit 113,059 41,198 94,471 34,337 30,800 78,143 27,486 25,050 24,153 64,660 21,346 20,022 19,225 51,346 16,061 16,938 36,759 13,738 13,493 10,428 26,007 9,294 8,878 19,040 7,648 8,534 1