1
Supplementary Information on Financial Results
artra corporation
Stock code: 6029
For the Fiscal Year 2019
2
Corporate Overview
3
Corporate Overview
Name artra corporation
Head office
Established
Representative
Capital
Stock listing
Number of shares outstanding
Employees
Daika Bldg. 4-6-9, Itachibori, Nishi-ku, Osaka
Hiroyuki Kyuse, Representative Director, President & CEO
January 2005
88 (as of the end of December 2019)
Tokyo Stock Exchange, First Section (Stock code: 6029)
¥563,757,530 (as of the end of December 2019)
8,790,100 shares (as of the end of December 2019)
Business Supporting nationally certified acupuncture, moxibustion and Judo therapy clinics
Ar t Skillful techniques
Tr aditional Traditional technologies
a ttractive A company like no other
4
2005 Established Gonzaemon Limited Company
2006 Renamed artra corporation (and reorganized as a Kabushiki Gaisha)
2009 Launched Artra Billing Service
Launched Artra Academy operations
2010 Launched Honey-Style clinic operations
Opened the first Honetsugi (a chain of nationally certified acupuncture, moxibustion and Judo therapy clinics) clinic
2012 Opened the first Honetsugi Daycare Service facility
2013 Launched Artra Store operations
2014 Listed on the Tokyo Stock Exchange Mothers market
2015 Launched a service for converting insurance receivables into cash
2016 Designated for listing on the First Section of the Tokyo Stock Exchange
2017 Opened the first overseas Honetsugi chain clinic
2018 Started preparing consolidated financial statements following the establishment of a subsidiary
2019 The number of Honetsugi chain clinics surpassed 100
History
5
Strengths of the Artra Group
The artra Group will continue to create and supply a variety of solutions backed by experience and expertise involving acupuncture, moxibustion and Judo therapy clinics.
Capable of meeting all the requirements of clinics
Artra Academy, Honetsugi chain, equipment sales, Artra Billing Service, insurance receivable cash conversion service, Honey-Style, Artra Store, Honetsugi Daycare Service, and othersWe will create more solutions for new needs and issues at these clinics
Develop a lineup of non-insured proceduresSupport for clinics to structure operations that are not overly dependent on health insurance payments
→ Seminars about non-insured procedures→ Development and sale of equipment for non-insured procedures
Nationwide operations in Japan and overseas growth
→ The Artra Billing Service has nationwide coverage in Japan (available to members in all prefectures)→ The Honetsugi chain covers all areas of Japan from Kyushu to Hokkaido→ The Honetsugi chain is also operating in Thailand
6
Market Characteristics and Trends
7
963
1,059
1,0051,063
1,137
1,0711,091
1,024
1,0411,128
2,108
2,215
2,902
3,755
4,416
5,069
4,763
5,570
4,592
5,227
4,438
5,349
4,503
4,582
4,274
3,690
4,054
Number of New Nationally Certified Judo Therapists
Number of New Nationally Certified Judo Therapists
Source: Foundation for Training and Licensure Examination in Judo Therapy
8
2,098
2,141
2,059
2,206
2,114
2,266
2,1382,230
2,2172,237
2,6632,998
3,396
3,7894,068
4,3474,216
3,990
4,553
3,651
4,005
3,892 3,808
3,504
3,032
2,667
3,712
2,0792,153
2,0482,192
2,125
2,233
2,136
2,214
2,233
2,2552,627
2,958
3,382
3,7854,072
4,3444,171
3,939
4,595
3,498
4,1383,946 3,773
3,550
3,010 2,845
3,656
Number of New Nationally Certified Acupuncture and Moxibustion Therapists
Number of New Nationally Certified Acupuncture Specialists
Number of New Nationally Certified Moxibustion Specialists
Source: Public Interest Incorporated Foundation for Training and Licensure Examination in Anma‐Massage‐Acupressure, Acupuncture and Moxibustion
9
+
New Requirements for the Management of Judo Therapy Treatments
In April 2018, Japan enacted stricter requirements for becoming a judo therapy manager
Before the revision
After revision
National certification
National certification
Able to operate a clinic as the manager of therapy
Requirements
Practical Experience
Complete training
Able to operate a clinic as the manager of therapy
Clinic
• After receiving national certification, judo therapists must have one year of practical experience.*Judo therapists will require two years of practical experience providing judo therapy for certification applications between
April 2022 and March 2024 and three years of practical experience for applications afterward.
• The required training must be at least 16 hours over about two days.
Clinic
Clinic
10
Health Insurance Payments to Nationally Certified Acupuncture, Moxibustion and Judo Therapy Clinics
50,428
58,573 63,873
68,120 73,017
2010 2012 2014 2016 2018
Health Insurance Payments to Nationally Certified Acupuncture, Moxibustion and Judo Therapy Clinics (Billions of yen)
37,997 42,431
45,572 48,024 50,077
2010 2012 2014 2016 2018
Judo Therapy Locations
Number of Employed Judo Therapists
406.8 408.5 398.5 385.5 382.5 378.9 363.6343.7
31.5 35.235.8
36.5 38.0 39.440.7
41.1
51.6 56.0 61.063.7 67.0 70.0
70.772.7
0
100
200
300
400
500
600
Fiscal 2010 Fiscal 2011 Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal 2016 Fiscal 2017
Judo therapy Acupuncture and moxibustion Others
Source: Report on Public Health Administration and Services Fiscal 2018, MHLW
Source: Health Insurance Payments to Judo Therapy Clinics (estimates), MHLW (Fiscal 2010-2015)Basic Materials concerning Health Care, MHLW (Fiscal 2016 and 2017)
11
Growing Healthcare Expenditures Make Prevention More Important
20
25
30
35
40
45
50
55
Source: MHLW
(Trillion
s of yen
)
The problem of the
rising healthcare
expenditures
Growing importance of
preventive measures
Growth of market for
non-insured procedures
More Opportunities for artra
Over ¥40 trillion
Preventive measures are becoming increasingly important in Japan as healthcare expenditures grow and public-sector budgets remain tight. This will increase opportunities for artra.
Healthcare Expenditures
Opportunities for artra
Use prevention and other measures to slow growth in healthcare expenditures
12
Acupuncture, Moxibustion and Judo Therapy Clinics vs. Other Hands-on Clinics
Care provider CertificationHealthcare Expenditures / Health Insurance Payments
Orthopedics
Acupuncture, moxibustion and judo therapy clinics
Osteopathic clinics, chiropractic clinics, others
Physician
Judo therapist, acupuncture/moxibustion therapists
Osteopaths, chiropractors, others
Nationally certified
Nationally certified
Private-sector certificationNo certification
Healthcare expenditures
Health insurance payments
Consent of physician needed for broken or dislocated bonesConsent of physician needed for acupuncture and moxibustion treatment
Judo therapists and acupuncture/moxibustion therapists must complete courses for anatomy, physiology, general clinical medicine and other fields at a college or professional school and then pass a national certification test.
13
The Difference between Healthcare Expenditures and Health Insurance Payments
(for a ¥3,000 payment)
National government,
corporate health insurance
organizations, others
(3) Billing (4) ¥2,100 payment
Health Insurance Claims Review & Reimbursement Services
(1) Billing request (2) ¥2,100 payment
¥900 payment
Hospital
Patient
Official structure Actual structure
National government,
corporate health insurance
organizations, others
National government,
corporate health insurance
organizations, others
(2) ¥2,100 payment
(1) Billing
Nationally certified acupuncture, moxibustion
and judo therapy clinic
¥3,000 payment
Patient
(3) Billing for the clinic
(4) ¥2,100 payment
Billing service provider
(2) Billing request (5) ¥2,100 payment
Nationally certified acupuncture, moxibustion
and judo therapy clinic
(1) Billing request¥900 payment
Patient
Health insurance payments (Treatment at an nationally certified acupuncture, moxibustion and judo therapy clinic )
Healthcare expenditures(Treatment at a hospital)
14
Business
15
Composition of Sales for Categories of Services 2019
Honetsugi chain20.4%
Equipment and supplies44.3%
Artra Billing Service17.5%
Honey-Style 10.7%
Nursing care support and other7.1%
Sales composition¥2,833 million
16
Artra Academy
Internet members
Acupuncture, moxibustion and
Judo therapy clinics in Japan
Artra
Acad
emy/Sem
inars
Hold Seminars and Sell More Equipment Associated with the Growing Use of
Non-insured Procedures
Billing software
Word-of-mouthsystem
Seminars are used for increasing sales of artra systems and products.
Billing software
M.I Impact vibration adjustor
Replacement supplies
Reservation management
Electronic muscle stimulator
Thompson table
17
Open new clinics
Know-how about non-insured procedures
Includes various seminars and a menu of services not covered by insurance
Company in another industry
Existing clinics
Artra
Provision of know-how
Growth of the Honetsugi Chain
ClinicClinic
Shift in emphasis to non-insured procedures
18
Primary target of the Honetsugi chain
Healthy
Not healthy
Target of orthopedic clinics
Primary target of existing acupuncture, moxibustion and Judo therapy clinics
Treatment
Prevention
74.9% of the people in this target group are potential customers U
sed acu
pu
nctu
re, mo
xibu
stion
and
Jud
o
therap
y clinics w
ithin
the p
ast year
No74.9%
Yes25.1%
Honetsugi Chain Clinics / Primary Customer Segments
* Survey of Public Perception of Medical Care and Medical Insurance by the National Federation of Health Insurance Societies, October 2017
19
Equipment Used for Non-insured Procedures
Thompson table
Designed to improve the posture of people with problems caused by bone misalignment or bad posture
Facilitates a consistent technique for proper alignment of bones in the entire body
M.I Impact vibration adjustor
Ideal for correcting minor bone misalignments caused by poor posture or shoulder or back pain
Allows small and precise bone adjustments that are difficult to accomplish manually or with large equipment
Patented double-impact waves for five muscle contractions every second; electricity can penetrate up to 15cm.
Simultaneously strengths inner and outer muscles
Multi-function high-frequency EMS Excare Pro IIIExclusive
sales right
Exclusive sales right
20
接骨院
The Artra Billing Service (A-COMS) –Insurance Billing Service for Clinics
A-COMS is a cloud-based system that minimizes billing tasks at clinics
The Artra Billing Service
Pro
vision
of services
Payment o
f fee
s
Paym
ent o
f in
suran
ce p
aymen
ts for
treatmen
ts
Receip
t of in
suran
ce p
ayments fo
r treatmen
ts
Billin
g for treatm
ents
pro
vided
Initial membership fee ¥50,000(for security key)
Invoice data storage fee ¥8,000/monthFee (Judo therapy clinics) 1.5% of patient billsFee (acupuncture/moxibustion clinics) 2.0% of patient bills
Nationally certified acupuncture, moxibustion and judo therapy clinics
National government, corporate health insurance organizations, others
Providing payment processing services builds stronger ties with members
artra
21
Artra Billing Service / Insurance Receivable Cash Conversion Service
This service provides financial support to Artra Billing Service members by extending loans equal to the amounts that clinics bill insurance organizations. Loans are repaid when the insurance payments are received.
Conventional Insurance Payment Process
Member
Member
Loan is equal to amount billed for services provided
Application for insurance payment
(1) (2)
(4) (3)
Insurer
Insurer(3)
(4)
(1)
(2) Loans
Application for insurance payment
Insurance Receivable Cash Conversion Service
Member usually receives the payment 3 to 4 months later Insurance payment
Insurance payments are used to repay the loan
Artra Billing Service
Artra Billing Service
artra finance corporation
22
Honey-Style –Word-of-Mouth Marketing and Appointment System
Word-of-mouth marketing and appointment system using mobile devices
Appointment for treatment
System use fee
Points
Information about staying healthy
Function 1
Function 2
Function 3
Increases the number of patients
Increases sales of merchandise
Distribution of information
artra
Clin
ics
Me
mb
ers
Provision of system
Send e-mail
Wholesale supply of merchandise
Sale of merchandise
Use of points*(¥○○)
Use of points*(¥○○ x 1.2 times)
*Points can be used to buy merchandise (one point is one yen).The clinic can use 20% more points than members use.
Cost of starting this system ¥300,000System use/management fee ¥12,000/monthServer use fee ¥9,000/yearOthers (Non-insured procedures / Equipment sales, etc.)
23
A clinic that provides the Honetsugi Daycare Service
Clinics are well equipped to provide this service
The Honetsugi Daycare Service includes personal functional training by a nationally certified Judo therapist in order to preserve and enhance the remaining functions of people using this service.
This service is currently provided at 15 locations in Japan.
A Judo therapist and nursing care professionals work together to lower each individual’s care support level. We provide services that are based on an innovative functional training program developed by artra to increase the number of locations offering the Honetsugi Daycare Service.
More Clinics Offering the Honetsugi Daycare Service
24
Growth of the Honetsugi Daycare Service Network
A new concept for a network of senior care facilities
Helper Stations
(Home senior care)
Senior care helper
Home acupuncture and moxibustion care
Home massage care
Home Nursing Care Stations
(Home nursing care)
Care Plan Centers
(Support for home care)
Daycare Service Centers(On-site care services)Care managerNursing care professional
Judo therapist
Judo therapist
*Functional training by Judo therapists
Acupuncture, moxibustion
and Judo therapy clinics
Acupuncture, moxibustion, massage and other procedures
25
Initiatives for Growth
26
Help acupuncture, moxibustion and Judo therapy clinics increase sales from non-insured procedures by raising the utilization rate of these clinics (currently 20% to 30%), which will also contribute to public health in Japan
ほねぎアカデミーArtra Academy
ほねぎアカデミーEquipment sales
Increase the number of clinics in this chain by targeting new clinics of companies in other industries as well as existing clinics.Increase pace of activities involving clinics with multiple locations.
ほねぎアカデミーHonetsugi chain
Strategic Goals (1)
Expand and upgrade streaming video channels to increase the number of Internet members.Focus on increasing attendance at seminars that provide information primarily about non-insured procedures.
Increase activities at seminars to sell equipment used for non-insured procedures.Extend support to clinics for activities that raise sales from non-insured procedures.Locate and develop new products that can be sold to clinics.
Focus on expanding operating area.
27
Strategic Goals (2)
ほねぎアカデミーHoney-Style
ほねぎアカデミーHonetsugi Daycare Service
ほねぎアカデミー
アトラ請求サービスアトラ請求サービスほねぎアカデミーArtra Billing Service
Increase the number of clinics using this service and sales of equipment and other products.Use the alliance with FiNC Technologies, including use of the FiNC app to send customers to clinics using Honey-Style.
Artra Store(e-commerce site that sells equipment and supplies)
Increase the number of products using artra’s own brand.Increase participation in the Artra Store bonus point system. Conduct marketing campaigns for sales growth.
Increase the number of clinics that operate this service as an additional business. Increase sales and earnings of directly operated daycare service locations.
Quickly make revisions to reflect changes in insurance payments and other items that affect billing.Conduct sales activities to increase the market share of this service.Increase the number of clinics using the service for converting insurance receivables into cash.
28
Results for 2019
29
2019年12月期 ハイライトHighlights of 2019
Decline in sales and earnings
Sales decreased by 18.6% to ¥2,833 million, operating profit decreased by 84.7% to ¥25 million, ordinary profit decreased by 80.8% to ¥31 million
Honetsugi Academy was renamed Artra Academy
Registered users of Artra Academy increased by 2,081 to 12,745
The number of clinics in the Honetsugi chain increased by 37 to 127
Artra Billing Service membership increased by 31 to 2,938
Clinics using the Honey-Style service decreased by 41 to 567
30
Sales for Categories of Services (Consolidated)
2018 2019 YoY change
Honetsugi chain 503,651 578,950 115.0%
Equipment and supplies sales 1,952,902 1,254,126 64.2%
Artra Billing Service 424,262 495,367 116.8%
Honey-Style 463,454 304,003 65.6%
Nursing care support and other 134,930 201,332 149.2%
Total 3,479,200 2,833,781 81.4%
(Thousands of yen)
31
Statement of Income (Consolidated) (vs. Initial Plan Announced on February 7, 2019)
Initial plan Results Vs. Initial plan
Net sales 4,300,000 2,833,781 65.9%
Operating profit 460,000 25,196 5.5%
Ordinary profit 460,000 31,411 6.8%
Profit attributable to owners of parent 303,000 (146,664) -
Net income per share 34.59 yen (16.71) yen -
(Thousands of yen)
32
(Thousands of yen)
Statement of Income (Consolidated)
2018 2019 YoY change
Net sales 3,479,200 2,833,781 81.4%
Gross profit 1,199,702 954,695 79.6%
SG&A expenses 1,035,421 929,498 89.8%
Operating profit 164,280 25,196 15.3%
Ordinary profit 163,697 31,411 19.2%
Profit attributable to owners of parent 269,930 (146,664) -
Net income per share 30.88 yen (16.71) yen -
33
Balance Sheet (Consolidated)
(Thousands of yen)
2018 2019
Change
Composition Composition
Current assets 3,110,425 69.2% 2,861,367 66.2% (249,057)
Non-current assets 1,381,379 30.8% 1,462,011 33.8% 80,632
Total assets 4,491,805 100.0% 4,323,379 100.0% (168,425)
Current liabilities 2,106,525 46.9% 2,239,400 51.8% 132,874
Non-current liabilities 385,109 8.6% 246,321 5.7% (138,787)
Total liabilities 2,491,635 55.5% 2,485,721 57.5% (5,913)
Total net assets 2,000,169 44.5% 1,837,657 42.5% (162,512)
Total liabilities and net assets 4,491,805 100.0% 4,323,379 100.0% (168,425)
Net assets per share 228.22 yen - 208.95 yen - -
Shareholders’ equity ratio 44.5% - 42.5% - -
34
Registered Users of Artra Academy
6,885
7,668
8,903
10,664
12,745
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2015年12月期
(単体)
2016年12月期
(単体)
2017年12月期
(単体)
2018年12月期
(連結)
2019年12月期
(連結)
2015(Non-consolidated)
2016(Non-consolidated)
2017(Non-consolidated)
2018(Consolidated)
2019(Consolidated)
35
Honetsugi Chain Clinics
67
86
9890
127
0
20
40
60
80
100
120
140
2015年12月期
(単体)
2016年12月期
(単体)
2017年12月期
(単体)
2018年12月期
(連結)
2019年12月期
(連結)
2015(Non-consolidated)
2016(Non-consolidated)
2017(Non-consolidated)
2018(Consolidated)
2019(Consolidated)
Hokkaido: 2 Tohoku: 4 Kanto: 19 Chubu: 19 Kinki: 31 Chugoku: 19 Shikoku: 9 Kyushu: 23 Thailand: 1
Total: 127
36
Sales of Equipment and Supplies
(Thousands of yen)
776,598
1,485,525
2,031,874 1,952,902
1,254,126
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2015年12月期
(単体)
2016年12月期
(単体)
2017年12月期
(単体)
2018年12月期
(連結)
2019年12月期
(連結)
2015(Non-consolidated)
2016(Non-consolidated)
2017(Non-consolidated)
2018(Consolidated)
2019(Consolidated)
37
Registered Users of the Artra Billing Service
1,695
2,069
2,596
2,907 2,938
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2015年12月期
(単体)
2016年12月期
(単体)
2017年12月期
(単体)
2018年12月期
(連結)
2019年12月期
(連結)
2015(Non-consolidated)
2016(Non-consolidated)
2017(Non-consolidated)
2018(Consolidated)
2019(Consolidated)
38
Loans for Conversion of Insurance Receivables into Cash
191,409
440,705
593,049
785,477
675,923
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2015年12月期
(単体)
2016年12月期
(単体)
2017年12月期
(単体)
2018年12月期
(連結)
2019年12月期
(連結)
(Thousands of yen)
2015(Non-consolidated)
2016(Non-consolidated)
2017(Non-consolidated)
2018(Consolidated)
2019(Consolidated)
39
Registered Users of Honey-Style Service
217,049
267,098
317,552
368,064
403,144
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2015年12月期
(単体)
2016年12月期
(単体)
2017年12月期
(単体)
2018年12月期
(連結)
2019年12月期
(連結)
2015(Non-consolidated)
2016(Non-consolidated)
2017(Non-consolidated)
2018(Consolidated)
2019(Consolidated)
40
Growth in Number of Clinics Using Honey-Style Service
474
528
619 608
567
2015年12月期
(単体)
2016年12月期
(単体)
2017年12月期
(単体)
2018年12月期
(連結)
2019年12月期
(連結)
0
100
200
300
400
500
600
700
2015(Non-consolidated)
2016(Non-consolidated)
2017(Non-consolidated)
2018(Consolidated)
2019(Consolidated)
41
Honetsugi Daycare Service
7 7
10
14
15
2015年12月期
(単体)
2016年12月期
(単体)
2017年12月期
(単体)
2018年12月期
(連結)
2019年12月期
(連結)
0
2
4
6
8
10
12
14
16
2015(Non-consolidated)
2016(Non-consolidated)
2017(Non-consolidated)
2018(Consolidated)
2019(Consolidated)
42
2020 Plan
43
(Thousands of yen)
2020 Plan
2019 Results 2020 Plan YoY change
Net sales 2,833,781 3,171,000 111.9%
Operating profit 25,196 42,000 166.7%
Ordinary profit 31,411 42,000 133.7%
Profit attributable to owners of parent (146,664) 1,000 -
Net income per share (16.71) yen 0.11 yen -
44
Shareholder Returns
45
Dividend
Year-endConsolidated payout ratio
2018 (results) 3.50 yen 11.3%
2019 (forecast) 3.50 yen -
2020 (plan) 3.50 yen 3076.4%
Dividend per share
Distributing earnings to shareholders is one of our highest priorities.
For 2019, we plan to pay a dividend of 3.50 yen per share.
We also plan to pay an year-end dividend of 3.50 yen per share for 2020.
46
Shareholder Benefits
Shareholder benefits are used by artra to thank shareholders for their support, make the company’s stock more appealing, and increase shareholders’ interest in the products and brands of the artra Group.
Eligible shareholdersShareholders who are listed in the shareholder register as of December 31 (fiscal year end) and own at least one trading unit (100 shares) are eligible to receive these benefits.
Benefits Eligible shareholders receive one jar of Honetsugi Hot, a hot massage gel created by artra that has a retail price of ¥4,400 (including tax).
Distribution Plan to send to shareholders every March.
47
Stock Information – Changes in Share Price and Trading Volume
Share price (Yen)
0
100
200
300
400
500
600
700
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
50,000,000
Jan. 2019
Feb. 2019
Mar. 2019
Apr. 2019
May 2019
Jun. 2019
Jul. 2019
Aug. 2019
Sep. 2019
Oct. 2019
Nov. 2019
Dec. 2019
Trading volume (Shares)
48
artra corporation
Tokyo Stock Exchange, First Section (Stock code: 6029)http://www.artra-group.co.jp/
4-6-9, Itachibori, Nishi-ku, Osaka IR contact: Ai Ikeda, Administration Dept.TEL: +81-6-6533-7622 (main switchboard)
Disclaimer
Plans and forecasts of future performance in this presentation are based on information available to artra corporation at the time the presentation was prepared and contain risks and uncertainties. Actual results may differ significantly from these forecasts due to changes in the business environment and other factors.
Some information in this presentation uses public information and other sources. artra corporation does not guarantee the accuracy of this information.