supplementary information on financial...

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







(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%


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)



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）




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）




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）




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)




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）




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




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




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%


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.

http://www.artra-group.co.jp/

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