63)ir資料fy2016 3q決算（e）配布 1.0 · op growth contributors (2009.1-12 2016.1-12)...

Copyright © 2017 M3, Inc. All rights reserved.

M3, Inc.Presentation Material

M3, Inc.Presentation Material

January 2017

Copyright © 2017 M3, Inc. All rights reserved. 1

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.


Current Business Situation and Outlook


Overview

Q3 quarter sales were strong at +32% yoy with further penetration of various services

Orders remain healthy for Q4 and next FY

Strength in orders received, and profitability of Neues acquired last year continues to improve

OP grew +41% yoy, OP margins improved to 24%.

Establishing an invincible No.1 position in the industry for job placement of physicians and pharmacists

Sales: 6.6 bn yen, +26% yoy; Op Profit: 2.2 bn yen, +19% yoy

MR-kunFamilyMR-kunFamily

CareerCareer

Evidence SolutionEvidence Solution

OverseasOverseas

Local ccy basis sales increased 32% yoy, and profits excluding M&A fees increased +12% yoy.

Contribution from the completed Vidal acquisition is expected going forward

OverallOverall

Healthy consolidated Q3 cumulative results with sales at +19% and operating profit +24% yoy

Q3 alone especially accelerated, with sales at +27%, and operating profit at +29% yoy


4,438

23,564

OP Growth Contributors (2009.1-12 2016.1-12)

Operating Profit(billion yen)

MR-kun family will continue to grow, while profit growth contribution will be exceeded by other businesses

4.5

23.5

3

3

11.51.5

2009Jan-Dec MR-kun Family Platform

Linked Overseas 2016Jan-Dec

Over 2/3 of incremental OP contributed by businesses aside from MR-kun Family


MR-kun FamilyMR-kun Family

Platform Linked Business

M3’s Growth


According to 400 physicians

100% On-line

100% Off-line

High demand for e-detailing from busy physicians that prefer on-demand and relevant information, without the limitations imposed by offline sales reps.

Source: M3 questionnaire to 400 physicians

75%

4.7%

14.4%

20.0%

35.9%

12.4%

11.1%

1.5%

100%

80%

60%

50%

40%

20%

20%

40%

50%

60%

80%

100%

Doctor Demand for On-Line DetailingWhat is the ideal ratio of online and offline product information (“details”) from drug companies?


Doctor’s Time Allocation vs Pharma’s Budget Allocation

Internet

Sales Reps

Other(conferences, publications, etc.)

Time Allocationof doctors collecting info

Marketing Budget Allocationof drug companies in Japan

Doctors spend the most time collecting information via the Internet. However, pharmaceutical firms operating in Japan spend the majority of their marketing budget on off-line sales rep related costs.

Sales Reps:

~1.5 tril yen

Other:~100 bn yen

Internet:~ 20 bn yen

Source: M3 research, percentages are approximate

44%

39%

17%

7%

1%

92%


Currently Full Potential

(approx.)

30Companies

30~35Companies

PharmaCLIENTS

GrowthPotentialof 3~4xcurrent levels

Broadening of usage across entire service line-up:

Average revenues from top 10 clients grew at approx. 21% YoY

(approx.)

¥400 mnSALES per CLIENT

¥1 bn ~ ¥1.5 bnper client

drivers: # of products # of opt-in MDs Added value of contents

MR-kun Family’s Growth Potential in Japan


MR-kun Base & Operation fee

Detail fee Contents Production fee

Other MR-kun Family Services

¥70 ~ 80 mn

¥20 ~ 40mn

¥100 per detail sent Production of customized detail contents

¥10 ~mn

Entr

y Le

vel

(one

pro

duct

)

around ¥150 mn

¥70 ~80mn ¥440mn ¥100 mn ¥270 mn

Top

5 C

lient

s(m

ultip

le p

rodu

cts)

The average of top 5 clients: around ¥900mn

Web Symposiums, One Point eDetails, etc

¥30 ~ mn

MR-kun Family Fee Structure (annual)


-6

MR-kun Family: YoY Incremental Sales Comparison

Q3 sales growth alone exceeded that of H1. H2 on track for 2 bio yen in incremental growth yoy

(million yen)

FY14Total

H1YoY

H2YoY

FY15Total

H1YoY

H2YoY

Q3 YoY+32%

FY15 FY16

H2 Forecast:scale of

2 bio jpy

500

737

1,148


MR-kun Family

Platform Linked BusinessPlatform Linked Business

M3’s Growth


MR-kun Family

Overseas

PlatformLinked

Business

(million yen)

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12FY13 FY14 FY15 FY16FCT

FY16 FCT75,000

Consolidated Sales Trend

2% 10% 11% 9% 9% 11% 16% 16% 18% 21% 22% 22%5% 10% 15%

17% 21% 26% 36% 40% 41% 46% 52% 54% 59% 59%95% 90% 83% 73% 68% 65% 54% 49% 43% 38% 30% 25% 19% 19%

1,563 2,276 3,854 5,729 7,475 8,534 11,811 14,646 19,040 26,007

36,887

51,346

64,660 56,310


Business Segment Breakdown and Type

Business Segments

Medical Portal

MR-kun Family 13 bn yen

Career 7 bn yen

Research 3 bn yenOther(Mr. Finder, AskDoctors, others) 3 bn yen

Evidence Solution 20 bn yen

Clinical Platform 3 bn yen

Sales Platform 1 bn yen

Other (iTicket, hospital support, others) 2 bn yen

Overseas 14 bn yen

Services FY15 Sales

Overseas

Business Type

MR-kunFamily

PlatformLinked

Business


Business Size Scale(FY2016 Forecast)

Research QOL-kun, etc. AskDoctors

Evidence Solution

iTicket

Detailed slides follow

¥1 bn

CLIENT BASEConsumerHospital, DoctorPharma

M3

Gro

up C

ompa

nies

Total revenue of platform-linked businesses in FY2016 is expected to exceed 40 billion yen. New projects pipeline includes 10 to 20 business ideas with plans including overseas development.

1 2Career

CSO EMR

Platform Linked Business Development

Others

¥20 bn

¥3 bn

¥5 bn


“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.”

~ 2010

2011 ~

Evolution via MR-kun for pharmaceuticale-Marketing - Engine #1

Evolution via Mr. Finder for pharmaceutical e-R&D - Engine #2

Evid Sol１Power of Mr. Finder in Drug Development

PlusPlus


Case study

Evid Sol１Patient Enrollment in Large-Scale Trials

Other SMOs

Mr. Finder dramatically outpaced competitors both by number and speed in enrolling cases for a particular Endocrinology trial

Num

ber o

f Pat

ient

s En

rolle

d

0100200300400500600700800900

1,0001,1001,2001,3001,4001,500

A B C D E F G H I J K Lm3.com

Expedited enrollment of motivated physicians and patients compared to other SMOs


Group-wide approach to promoting

and accelerating

internet based drug

development

Theme Operation

2011

2009

2012

2014

2009

2012

Site SelectionFeasibility Study, etc

MonitoringEDC, etc

Utilization of electronic medical records, etc

2015/4

Evid Sol１

M&A Timing

Shift to e-Clinical Trials


(million yen)

Orders backlog increased 3 bn yen to 28bn yen since Sep-end, with corresponding increases in headcount as upfront investment

OP margin rose to 24% with backdrop of healthy orders expansion

Neues, an SMO acquired in April 2015, posted 400 million yen in profits

FY16 FCT22 bn yen

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16Q1-3

IFRS basis

Evid Sol１Sales and Profit Trend of Evidence Solution

Segment ProfitSales

1,370 1,860 2,321 4,283

6,554

13,195

19,992

16,502

-288 -58

423 517 1,126 1,799 3,908 3,912


Sales and profit grew due to successful integration and improved productivity of newly-hired staffs’

FY2016 should see continued traction from job placement for physicians.

(million yen)

FY16 FCT9 bn yen

FY10 FY11 FY12 FY13 FY14 FY15 FY16Q1-3

JGAAP basis

Career2Sales and Profit Trend of M3 Career

Ordinary ProfitSales

*1,433

2,191

3,235

4,594

5,712

6,925 6,584

177 437 749 1,070 1,714

2,292 2,168

*Excludes Anestation M&A fees


MR-kun Family

Platform Linked Business

M3’s Growth


Japan (m3.com)

U.S.A (MDLinx + PDR)

U.K. (Doctors.net.uk)

Other Nations(M3 Global Research, MDLinx, Russia)

Korea (Medigate)

(thousand)

China (Medlive)

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16Dec End

Number of Physician Members and Panelists (Global)

India (Health Impetus)

France, Germany, Spain (VidalGroup)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

4+ millionmembers worldwide

Over 4 million physicians utilize M3’s global platforms


Operation size over doubled yoy due to expansion of existing businesses as well as contribution from M&As

Synergies with MDLinx, the U.S. web portal designed for physicians, is expected to improve sales and profitability

Expansion of services such as executive physician and nurse placement being considered

Sales(million yen)

A new US driver with a faster initial growth rate than M3 Career in Japan, and a much larger addressable jobs market overall.

Expansion of U.S. Career Services

FY15Q1-Q3

FY16Q1-Q3

2.1x1,417

2,934


China: Membership ExpansionNumber of Physician Members in China

Marketing services for drug companies starting with MR-kun, and marketing research services showed steady growth

MR-kun is now being utilized for 28 drugs across 9 pharmaceutical companies

Over 1.5 million physicians members, covering the majority of doctors in China

FY14Q1 Q2 Q3 Q4

FY15Q1 Q2 Q3 Q4

FY16Q1 Q2 Q3

(thousands)

9531,019

1,0961,1541,250

1,3621,490

1,5611,6171,680

1,753


(million yen)

Broader business scope in US, UK, and China

MR-kun launched in the U.K.; contracts signed with multiple pharma companies

Local currency basis yoygrowth ex M&A fees:

- Sales: +32%- Profit: +12%

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16Q1-Q3

FY16 FCT17 bn yen

IFRS basis

Sales and Profit Trend of Overseas

Segment ProfitSales

1,105 1,585 2,983

4,069

6,661

10,980

13,810

11,250

-71

55 138 117 1,043 1,430 1,614 1,195


M3 Group’s Business Strategy


New Service Development in the Medical Internet Sector

Internet-Powered PE Style Business Expansion in

Healthcare Industry(2000~2010) (2011~)

ApproachApproach Internet Internet + Real Operations

Service CoverageService

CoverageWeb-based

eTools Entire Value-Chain

Potential Business Domains

Potential Business Domains ~10 30 ~ 50

(~ 200 including overseas)

ProfitabilityProfitability High profitability(Mid absolute profit)

High absolute profit(Mid profitability)

Ｍ＆ＡＭ＆Ａ Small Medium ~ Large

M3 is uniquely positioned to transform the health care industry via its 1) Platform 2)Industry Expertise and 3)Human Resources (management and engineering)

Strategy Change in Business Development


M3 is Just Getting Started


FY 2016 Overview


FY2016 Q3 Consolidated Cumulative Results

Sales Pretax Profit* Net ProfitOperating Profit

IFRS Base(million yen)

* Foreign currency denominated loans to overseas group companies caused foreign exchange losses of 281 million yen

FY15Q1-Q3

FY16Q1-Q3

FY15Q1-Q3

FY16Q1-Q3

FY15Q1-Q3

FY16Q1-Q3

FY15Q1-Q3

FY16Q1-Q3

47,391

56,301

15,031

18,656

15,087

18,637

10,201

12,541

+23%+24%+19% +24%


(million yen) FY2015 Q1-Q3

FY2016 Q1-Q3 YoY

Medical PortalSales 18,660 22,467 +20%Profit 11,179 12,650 * +13%

Evidence Solution

Sales 14,737 16,502 +12%Profit 2,777 3,912 +41%

OverseasSales 10,104 11,250 +11% ***Profit 1,373 1,195 ** -13% ***

Clinical PlatformSales 1,989 2,053 +3%Profit 119 125 +5%

Sales Platform

Sales 978 1,076 +10%Profit 12 77 approx. 6 x

OthersSales 1,731 3,933 +127%Profit 377 666 +77%

IFRS basis

FY2016 Consolidated Results by Segment

* M&A fees for Anestation totaled 42 million yen** M&A fees from India and Vidal deals totaled 161 million yen ***Overseas segment results in local currency basis: Sales +32% yoy, Profit:+12% yoy


M&AFees

Recruiting& Training Fees

Special costs incurred in anticipation of future growth dampenedprofits by 1.1 ~ 1.8 bn yen over the past three quarters. Aggressive upfront investment to continue.

Productivity Time Lag of New Staff

Upfront Investment Costs for Future Growth

(million yen)

m3.com Revitalization

Investment

Total1.1 ~ 1.8bn yen

231

650

635

261


107 480 891 1,563 2,276 3,854 5,729 7,475 8,534 11,811

14,646 19,040

26,007

36,759

51,346

64,660

75,000

13,738

8,878

-93

46 255 509 895 1,683

2,677 3,597 3,990

4,803 6,031

7,648 9,294

12,704*

16,061

20,022

23,000

-93

62 136 279 493 991 1,609 1,965 2,363 1,938 3,486

4,492 5,598 7,844*

10,428

13,493 15,300

Sales Operating Profit & Net Profit

(mn yen) (mn yen)

* Extraordinary profit from acquisition of MPI: 1,034 mn yen

00(6m)

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16FCT

Annual Results & Forecast for FY2016

00(6m)

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16FCT

Operating ProfitNet Profit


M3

MedicineMediaMetamorphosis

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 the national population)

Aim to create new value

・ Provide solutions within the healthcare sector・ Provide new and unique business models・ Specialize in niches areas that provide opportunity for

high value creation and high profits in order to boost enterprise value

Creating New Value in Healthcare

63)ir資料fy2016 3q決算（e） 配布 1.0 · op growth contributors (2009.1-12 2016.1-12)...

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63)ir資料fy2016 3q決算（e）配布 1.0 · op growth contributors (2009.1-12 2016.1-12)...