M3, Inc. · TSE:2413
M3 — H1 FY2023 Earnings Presentation
44 slides from M3's earnings presentation, Oct 27, 2023
Slide 1: M3, Inc. Presentation Material
M3, Inc. Presentation Material October 2023 Copyright © 2023 M3, Inc. All rights reserved. 0
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: FY2023 H1 Consolidated Results
FY2023 H1 Consolidated Results Unit: JPY MM FY2022 FY2023 YoY Q1-Q2 Q1-Q2 YoY growth in business Sales 112,616 115,795 +3% excluding COVID related revenues sales +12% Operating Profit 36,293 34,559 -5% Pre-tax Profit 38,067 37,322 -2% Net Profit 25,966 25,136 -3% Steady progress on the regular busin
Slide 4: Consolidated Sales Trends and COVID Impact
Consolidated Sales Trends and COVID Impact Unit: JPY MM COVID related 112,616 115,795 (clinical trials, ～5,700 vaccination support, 97,647 ～14,600 promotion of therapeutic drugs and ～10,500 +12% vaccines, etc.) 75,022 Regular businesses FY2020 FY2021 FY2022 FY2023 Q1-Q2 Q1-Q2 Q1-Q2 Q1-Q2 H1 COVID co
Slide 5: FY2023 H1 Consolidated Results by Segment
FY 2023 H1 Consolidated Results by Segment FY2022 FY2023 Pharmaceutical Unit: JPY MM YoY marketing: similar trend Q1-Q2 Q1-Q2 to Q1, essential digital transformation is Medical Sales 42,537 45,503 +7% progressing Platform Profit 18,762 18,426 -2% Negative impact from one-time gain of 0.8 bil. ye
Slide 6: Budget Progress in FY2023 H1
Budget Progress in FY2023 H1 Sales Operating profit Initial outlook ～120 bn ～32 bn Medical Platform Evidence Solutions Career Solutions Site Solutions Overseas Other/ Adjustments FY23H1 Act. 115.8 bn 34.6 bn Overseas business is behind, while other businesses are making good progress, especially in
Slide 7: M3's Triple Growth Engine + CSV
M3’s Triple Growth Engine + CSV 1. Ecosystem 2. Individual 3. Ecosystem Expansion Business Synergy (Sagrada Familia) Development Creation Regions (12 areas) Regions (12 areas) Regions (12 areas) １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 ＭＰ ＭＰ ＭＰ Businesses (30 - 50) Bus
Slide 8: Growth Engine 1: Ecosystem Expansion (Sagrada Familia)
Growth Engine 1： Ecosystem Expansion (Sagrada Familia) Regions (12 areas) Regions (12 areas) Regions (12 areas) １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 ＭＰ ＭＰ ＭＰ Businesses (30 – 50) Businesses (30 – 50) Businesses (30 – 50) CS ＳＳ ＥＳ CS ＳＳ ＥＳ CS ＳＳ ＥＳ Others Others Oth
Slide 9: Leverage 3 Major Resources to Solve Healthcare Issues
Leverage 3 Major Resources to Solve Healthcare Issues 6.5 mil. registered doctors worldwide Overwhelming Platform Healthcare Issues × Top-notch technical professionals State-of-the-art Technology Experts from varied fields unite Problem Solving Skills Copyright © 2023 M3, Inc. All rights reserved. 8
Slide 10: Business Scope Expansion and Growth Potential
Business Scope Expansion and Growth Potential ： 2010 2015 2020 2022 Country ： 3 → 8 （2.5x） → 11 （3.5x） → 17 （5.5x） Business Types ： 6 → 15 （2.5x） → 35 （6.0x） → 38 （6.0x） Business Units (Type x Country) ： 10 → 24 （2.5x） → 56 （5.5x） → 71 （7.0x） Sales (bn) ： 14.6 → 64.7 （4.5x） → 169.1 （12.0x） → 230.8 （
Slide 11: Growth Image per Business Expansion Phases
Growth Image per Business Expansion Phases Sales Trend (JPY) Businesses added after FY2022 ～600 bil Assumption Businesses added between FY2015 and FY2022 Businesses added between FY2010 and FY2015 1/4 of existing Business as of FY2010 ～130 business on top CAGR ～150 ～20% 230.8 bil CAGR ～60 ～200 ～15%
Slide 12: Sales Composition Ratio: Past and Future Image
Sales Composition Ratio: Past and Future Image Consolidated Sales Composition Ratio 100%= JPY 230.8bil. JPY 600bil. 3% 6% 11% Overseas 22% 22% 24% 24% 27% businesses composition 34% ratio 30～40% Domestic businesses 52% 47% 50% 62% 50% 91% Other businesses 55% Pharma mktg 26% 29% 26% 16% 23% support
Slide 13: Trend in M&A Volume: Programmatic M&A Strategy
Trend in M&A Volume: Programmatic M&A Strategy 11 11 5 5 7 Domestic 2 Overseas 6 6 5 FY2021 FY2022 FY2023 Q2 M&A completed with approximately 10 companies annually, will continue to actively pursue M&A opportunities. FY23: 5 projects already conducted abroad, Messly and Calimaps were acquired in Q2
Slide 14: Business Expansion Creation Flow
Business Expansion Creation Flow Reinforcement Structural of Ecosystem Differentiation Investment Target Expansion Self-reinforcing expansion cycle = "superbly capable staff" base also expands, and continuity is further strengthened... "business snowball" to multiply rapidly Copyright © 2023 M3, Inc
Slide 15: Growth Engine 2: Individual Business Development
Growth Engine 2： Individual Business Development Regions (12 areas) Regions (12 areas) Regions (12 areas) １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 ＭＰ ＭＰ ＭＰ Businesses (30 – 50) Businesses (30 – 50) Businesses (30 – 50) CS ＳＳ ＥＳ CS ＳＳ ＥＳ CS ＳＳ ＥＳ Others Others Others 4.
Slide 16: Pharmaceutical Sales & Marketing DX
Pharmaceutical Sales & Marketing DX Copyright © 2023 M3, Inc. All rights reserved. 15
Slide 17: Pharma Marketing Cost and TAM for M3
Pharma Marketing Cost and TAM for M3 10 years ago Present Future M3’s Role down by ~300 bn TAM Industry productivity improvement from DX MR Related 99% 1.5 tn yen 95% 70～80% Costs 1.15 tn yen 700～ (2) MR Activity 800 bn yen DX Support (3) Data-driven Marketing (1) Internet Support 20～30% Marketing I
Slide 18: Trend of Domestic Pharmaceutical Sales Reps (MRs)
Trend of Domestic Pharmaceutical Sales Reps (MRs) Historical Peak 65,752 MRs (000’s) 70 -1,095 -522 -950 -752 -2,533 -2,742 49,682 60 in FY2022 -3,572 -1,738 -2,166 50 40 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 In addition to a decrease in the number of MRs, increa
Slide 19: Professional Staff Fortification Plan
Professional Staff Fortification Plan Unit: Index with FY2019 as 100 375~500 Staff Fortification Reduce the no. of external consultants Initiatives while increasing the overall number HR capacity increase 250 230 Recruiter Approx. 20% Approx. 30% reinforcement 100 (fee scale) 80% New grad Appr
Slide 20: DX of the Clinical Scene
DX of the Clinical Scene Copyright © 2023 M3, Inc. All rights reserved. 19
Slide 21: DX of Clinics: Creating a New Patient Experience
DX of Clinics: Creating a New Patient Experience Current Post DX (new patient experience) 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 o
Slide 22: M3 DigiKar EHR Growth
M3 DigiKar EHR Growth Number of Sites Using M3 DigiKar 5,300 Cumulative number of installations is approximately 5,300. Steady progress Co-selling with DigiKarSmart further increases the added value of DigiKar FY15 16 17 18 19 20 21 22 23 Incontestable #1 market share within cloud based digital
Slide 23: DX of Clinics: DigiKar Smart
DX of Clinics： DigiKar Smart Physical Medical Institutions： Online Managing System Appointment Next Auto- Appointment Reception Patients： M3 DigiKar Smart Mobile App Payment Consultation Linking to EHR 15,000 reviews with a rating of 4.6 from users, new patient experience created and #1 rating in th
Slide 24: No. of DigiKar Smart Users
No. of DigiKar Smart Users Unit: Index with FY21Q3 as 1 2,973 Users are rapidly 2,067 penetrating DigiKar Smart as the clinic's infrastructure. 6 times higher than 1,368 in the previous year 1,070 Video call has been added and is expanding as an 479 infrastructure for telemedicine 173 1 44 FY21
Slide 25: Ecosystem Synergy: Medical Data Business
Ecosystem Synergy: Medical Data Business Unit: Index with FY2022Q1-Q2 as 100 Sales of Medical Data Business* 300 3x 100 FY2022 FY2023 Q1-Q2 Q1-Q2 Medical data business (actual medical practice, physician practice standards, etc.) also grew significantly along with the increase in the volume of data
Slide 26: Number of Clinics Covered by M3 Group
Number of Clinics Covered by M3 Group Unit: Number of clinics using any of M3 services 12,100 10,900 5,500 September-21 September-22 September-23 Organic coverage continues to expand even after M&A in July 2022… Plans to offer a wide range of DX promotion services, including EHR, in-hospital operati
Slide 27: Overseas
Overseas Copyright © 2023 M3, Inc. All rights reserved. 26
Slide 28: Number of Doctor Members and Panelists (Global)
Number of Doctor Members and Panelists (Global) Ratio of doctor members (As of June 2023) Including regions not mentioned above, more than 6.5 million doctor members and panelists, covering over 50% of doctors worldwide *The no. of doctors in Japan is based on data from the Ministry of Health, Labou
Slide 29: Overseas Segment: Sales by Region
Overseas Segment: Sales by Region Unit: JPY MM Growth rate North America COVID related sales within Excluding COVID Career business remains 32,644 related earnings solid 30,185 +8% +17% Clinical trial business: Management structure Excluding COVID related earnings renewal and strengthening 13,22
Slide 30: Overseas Growth Trends by Business
Overseas Growth Trends by Business (FY) Unit: JPY 100MM Service for Career for Clinical Trials Doctors Doctors (Platform for doctors in North (M3 Global Research: (Clinical Trials sites in North (Human resources business America, Europe, and Asia and Expanding in North America, America, growing into
Slide 31: Acquisition of Messly in the UK
Acquisition of Messly in the UK 70% coverage Messly helps recruitment of training of training doctors doctors for part-time positions to address shorthanded situations 90%+ of locum in the UK Ratio of overseas jobs in NHS covered physicians is increasing and synergies with Remedium are expected
Slide 32: Acquisition of Calimaps providing DrSanté
Acquisition of Calimaps providing DrSanté The French practice Patient management software market Reservation management is rapidly shifting to cloud- based systems With this acquisition, two products that drive the fast- growing market are now part of the M3 Group's product lineup DrSanté is u
Slide 33: Growth Engine 3: Ecosystem Synergy Creation
Growth Engine 3： Ecosystem Synergy Creation Regions (12 areas) Regions areas) Regions (12 areas) Regions (12 areas) １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 ＭＰ ＭＰ ＭＰ Businesses (30 Businesses Businesses (30 – 50) Businesses (30 CS ＳＳ ＥＳ CS ＳＳ ＥＳ CS ＳＳ ＥＳ (30 –– 50) ( –
Slide 34: Business Scope Expansion and Growth Potential
Business Scope Expansion and Growth Potential 2010 2015 2020 2022 Country ： 3 → 8 (2.5x) → 11 (3.5x) → 17 (5.5x) Business Types ： 6 → 15 (2.5x) → 35 (6.0x) → 38 (6.0x) Business Units (Type x Country) ： 10 → 24 (2.5x) → 56 (5.5x) → 71 (7.0x) Sales (bn) ： 14.6 → 64.7 (4.5x) → 169.1 (12.0x)→ 230.8 (16.
Slide 35: Cross-Business Synergy Creation Potential
Cross-Business Synergy Creation Potential １ ２ ３ ４ ・・・ ｎ Number of businesses Synergy Links 0 1 3 6 nC2 Synergy potential between businesses: 71Ｃ2 = 2,485 possible linkages Copyright © 2023 M3, Inc. All rights reserved. 34
Slide 36: Ecosystem Synergy Value Creation
Ecosystem Synergy Value Creation Unit: Index with FY2022Q1-Q2 as 100 120 Approx. 100 1.2x FY22 FY23 Q1-Q2 Q1-Q2 The next ten years will be based on ecosystem synergies, including internal and external collaborations, to further promote healthcare problem-solving/social impact creation and business e
Slide 37: The White Jack Project
“The White Jack Project” Pre-Onset/ After Onset/ Healthy Person Patient Phase 1 Happiness-i General Public (consumer) Future expanding Phase 2 Rinkai Medical priority areas Cancer Phase 3 Prevention HCP (e.g. wholesaler) Phase 4 ＥＢＨＳ Traditional main business domain Phase 5 Steady progress is also b
Slide 38: Expand Coverage of Enterprise Services
Expand Coverage of Enterprise Services Number of employees covered by corporate services Covers approximately 1.85 million employees in FY23Q2, Unit: 10,000 persons with the following services 185* under development EBHS Life Cancer prevention, PSP Ask Doctors Booking & conducting medical ch
Slide 39: Social Impact Creation
Social Impact Creation Regions (12 areas) Regions areas) Regions (12 areas) Regions (12 areas) １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 １ ２ ３ ４ ５ ６ ７ ８ ９ 10 11 ＭＰ ＭＰ ＭＰ Businesses (30 Businesses Businesses (30 – 50) Businesses (30 CS ＳＳ ＥＳ CS ＳＳ ＥＳ CS ＳＳ ＥＳ (30 –– 50) ( – 50)) 30 50 50) Other
Slide 40: SDGs and CSV: M3's CSV positioning
SDGs and CSV: M3's CSV positioning ＳＤＧｓ ＣＳＶ Sustainable Development Goals Creating Shared Value (Development goals which are possible to sustain) (Creation of shared values) International objectives that Initiatives by companies to solve governments, businesses and social problems through their core
Slide 41: M3's CSV Impact (1/2): Patients/End Users
M3’s CSV Impact (1/2): Patients/End Users Providing a Seamless Healthcare Experience Number of medical consultations using Digikar Smart: 1MM FY2022 29.3 million hours of patient waiting time reduced FY2022, from a total of about 27 million receptions Professional Advice Provision for Health Concern
Slide 42: M3's CSV Impact (2/2): Medical Professionals
M3’s CSV Impact (2/2): Medical Professionals Information Provision for all HCPs Over 12 million viewers in total for web conferences, etc. FY2022 Medical Examination Support Supporting medical examinations through management of information across 200 million electronic health records, domestically a
Slide 43: FY2023 Outlook
FY2023 Outlook Copyright © 2023 M3, Inc. All rights reserved. 42
Slide 44: Annual Results
Annual Results Sales Operating Profit (mn yen) (mn yen) 250,000 95,141 Operating profit*. 230,818 Medlive IPO Impact 208,159 75,000 71,983 169,198 64,210 57,972 130,973 113,059 94,471 34,337 30,800 78,143 27,486 64,660 25,050 51,346 20,022 16,061 36,759 7,648 13,738 14,646 26,007 4,803 9,294 8,534 1