Summarized Translation

Financial Results Overview(First Half of the 25th Term)
May 20th, 2015
EPS Holdings,
ldi
Inc.

Copyright © 2015 EPS Holdings All rights reserved.

Regarding the handling of this document

The earnings estimates and future predictions described in this document are made by ourcompany based on the available information at the time of the creation of the document,
and contain potential risks and uncertainties. Therefore, due to various factors such aschange in business environment, it is possible that actual earnings results may differ greatly
from the future outlook mentioned or described herein.
We have approached the creation of this document with caution, to ensure correctness.
However, it is not a guarantee of completeness. Our company cannot be held liable for any
problemspob e s oor dadamagesages aarisings g as a result
esu t ofo thet e informationo at o in tthiss docu
document.
e t Wee appreciate
app ec ate
your understanding.
■For inquiriesqabout this document
EPS Holdings, Inc.
Corporate Planning Officee‐mail ：ir@eps.co.jp

1

Copyright © 2015 EPS Holdings All rights reserved.

Contents

11. Financial Results Overview (First Half of the 25th Term)
2. Full Year Estimates
3. Future
F
Business
B i
SStrategiesi• Mid‐term Targets• EKISHIN BusinessPresident & COO Shinro Tashiro

2

Copyright © 2015 EPS Holdings All rights reserved.

Contents

11. Financial Results Overview (First Half of the 25th Term)
2. Full Year Estimates
3. Future
F
Business
B i
SStrategiesi• Mid‐term Targets• EKISHIN Business3

Copyright © 2015 EPS Holdings All rights reserved.

The 25th Business Segment of ＥＰＳ Group
CRO
Japan
Businesss

Business

EPS Associates,
Associates EP‐Mate,EP Mate e‐Triale TrialSMO

EP‐Mint

Business

CSO
Business

Overrseas
Busin
ness

GR

EP‐PharmaLine
EPS International Holdings

Business

EPSI(China), GRI(USA), EPS GR(GCRC) etc

EKISHINEPS EKISHIN, EPS(China) etc

Business

BPO
Othe
ers

4

EPS

Business

Others

EPI, EMS, EPI(Suzhou), EPS Yamanashi
EPBiz
Copyright © 2015 EPS Holdings All rights reserved.

First Half of The 25th Term Earnings Conditions (Consolidated)（ UNIT:JPY MILLION ）ththFirst Half
Results

Budget25 First Half
Results

Ratio for
Budget(%)

Y o Y(%)

Net Sales

19,852

21,39622,052103.1%

111.1%

Operating
Income

1 923
1,923

1 728
1,728

2 439
2,439

(8.1%)(11.1%)

126.8%(%)(9.7%)

141.1%

Ordinary
Income

1 978
1,978

1 554
1,554

2 508
2,508

(7.3%)(11.4%)

126.8%(%)(10.0%)

161.4%Net Income

896

651

984

(%)

(4.5%)(3.0%)(4.5%)

151 2%
151.2%

109 8%
109.8%

24

5

 Sales of the four segments, including CRO Business (Japan), CSO Business (Japan),Gl b l R
GlobalResearchhB
Businessiandd EKISHIN B
Business,iiincreased,d allowedlld overallll sales
l tto
rise by 11.1% year‐on‐year and exceed estimates.
 Operating income increased by 26.8% year‐on‐year and exceeded estimates by 141.1%
on the back of the strong rise in profits of CRO Business (Japan) mainly.
mainly Ordinary income also increased by large margins of 26.8% year‐on‐year and 161.4% fromestimates substantially.
Copyright © 2015 EPS Holdings All rights reserved.

First Half of The 25th Term Segment Earnings Conditions
Net Sales by Business Segment

Japan
Business

Overseas
Business

6

24th First Half
Results
CRO（ UNIT:JPY MILLION ）Budget25th First Half
Results

Ratio for
Budget(%)

Y o Y(%)

11 64011,640

12 00012,00012 415
12,415103 5%
103.5%

106 7%
106.7%

SMO

3,166

3,300

3,127

94.8%

98.8%

CSO

2,859

3,140

3,372

107.4%

118.0%

GR

1,070

1,148

1,197

104.3%

111.9%EKISHIN

1,577

1,945

2,013

103.5%

127.6%

Copyright © 2015 EPS Holdings All rights reserved.

First Half of The 25th Term Segment Earnings Conditions
Operating Income by Business Segment

Japan
Business

Overseas
Business（ UNIT:JPY MILLION ）24th First Half
results

BudgetRatio for25th First Half Operating
results
Income ratio Budget(%)

CRO

1,681

1,955

2,862

23.1%

146.4%

‐

SMO

475

4155
4

33177

10.1%

776.4%
4

66.7%
7

CSO

120

172

208

6.2%

120.9% 173.4%

GR

‐158
8

‐67
6

‐149

‐

‐

‐

EKISHIN

‐172

‐80

‐122

‐

‐

‐

Y o Y(%)※※ The EPS Group implemented a holding company structure from January 1, 2015. In terms of operating income
above, expenses associated with the holding company, which are not allocated to each segment, are disclosed.
Because the previous term’s earnings data for CRO Business (Japan) contained an equivalent amount ofexpenses thatth t were associatedi t d with
ith ththe hholding
ldi company, we ddo nott display
di l year‐on‐year changeshffor thi
this data.
d t

7

Copyright © 2015 EPS Holdings All rights reserved.

CRO Business (Japan)（ UNIT:JPY MILLION ）＜ Net Sales ＞

16 00016,00012,000（ UNIT:JPY MILLION ）＜ Operating Income ＞

3 500
3,500

11,64012,415

40 0%
40.0%

2,862

3,000

※

30.0%

2,500
2,000

8,000

1,681

1,500
1,000

4,000

20.0%

23.1%

10.0%

14.4%

500
0

0

2014/3末

2015/3末0.0%
00%
2014/3末

2015/3末
Operating
営業利益
IncomeOperating
営業利益率
Income ratio A favorable trend of Monitoring services in CRO Business (Japan) and a strong recoveryof data management services allowed both sales and operating income to grow.
※O※Operating
ti g iincome iin theth currentt termtdoesn’td’t include
i l d expenses associatedi t d with
ith theth holding
h ldi g company.

8

Copyright © 2015 EPS Holdings All rights reserved.

SMO Business (Japan)（ UNIT:JPY MILLION ）＜ Net Sales ＞

4 000
4,000

（ UNIT:JPY MILLION ）＜ Operating Income ＞
20.0%
%

6
600

3,166

3,127

500

475

3,000

15.0%
400

2,000

15.0%

317

300

10.0%

10.1%

200
1,000

5.0%
100

0

0

2014/3末

2015/3末

0 0%
0.0%

2014/3末

2015/3末
Operating
営業利益
Income9Operating
営業利益率
Income ratio While wins of trended in line with expectations, delays in patient registrations
resulted in a slight decline in sales from the previous year.
 Despite improvements in operational efficiency, operating income fell year‐on‐
year due to increases in anticipatory investments for human resources and otherexpenses.
Copyright © 2015 EPS Holdings All rights reserved.

CSO Business (Japan)（ UNIT:JPY MILLION ）＜ Net Sales ＞

4,000

3,000

3,372
2,859

（ UNIT:JPY MILLION ）＜ Operating Income ＞

250

8.0%

208
200
150

6.0%

120

6.2%

2,000

4.0%
100

1,000

4.2%
2.0%

50
0

0

2014/3末

2015/3末

0.0%

2014/3末

2015/3末
Operating
営業利益
IncomeOperating
営業利益率
Income ratio Successful
S
f l efforts
ff t tto ffortify
tif our office
ffi networktk andd strengthentth our hi
hiringi ffunctiontiallowed sales to grow from the previous year.
 In PMS (Post market survey) division, implementation of restructuring, including
improvement of operational efficiency and cost reduction allowed operating
income to increase by a large margin.

10

Copyright © 2015 EPS Holdings All rights reserved.

Global Research Business（ UNIT:JPY MILLION ）＜ Net Sales ＞（ UNIT:JPY MILLION ）＜ Operating Income ＞

2014/3末

1,500

1,070

1,197

1 000
1,000

2015/3末

0

50
‐50

‐100
500
‐150

‐158
158

0

2014/3末

2015/3末

‐149

‐200

 Sales rose on the back of contributions from large projects in Japan and Asia,
Asia andsteady progress in projects currently being conducted.
 Improvement of operating loss was limited despite ongoing efforts to reduce costs.

11

Copyright © 2015 EPS Holdings All rights reserved.

EKISHIN Business（ UNIT:JPY MILLION ）＜ Net Sales ＞（ UNIT:JPY MILLION ）＜ Operating Income ＞

2014/3末

2,500

2,013

2,000

1,577

2015/3末

0

‐50

1,500

‐100

1,000
500

‐122

‐150

0

2014/3末

2015/3末

‐200

‐172

 Sales rose by thanks to the strong sales of medical equipment.
equipment Ongoing efforts to restrain costs allowed operating loss to be smaller from theprevious term.

12

Copyright © 2015 EPS Holdings All rights reserved.

First Half of The 25th Term Business Segment Orders（ UNIT:JPY MILLION ）New Order
CRO Business (Japan)
Monitoring
Data Management
CRO Others
SMO Business (Japan)
CSO Business (Japan)
Global Research Business
EKISHIN Business
OthersTotal

15,927
9 495
9,495
5,218
1,213
3 743
3,743
2,981
2,766
1 979
1,979
471
27,870Y o Y (%)

106.4%
96 5%
96.5%
139.6%
87.6%
116 2%
116.2%
108.7%
258.3%
111 9%
111.9%
72.8%
114.1%

Backlog

37,94220 746
20,74615,300
1,894
8 668
8,668
4,381
5,521
28
128
56,670Y o Y (%)

105.3%
99 7%
99.7%
119.6%
77.6%
112 5%
112.5%
108.6%
176.9%
9 9%
9.9%
81.5%
110.3%

 CRO Business (Japan) saw 6.4% and 5.3% increases in new orders and order backlog respectively on theback of favorable trends in data management services.
 SMO Business (Japan) recorded a 16.2% year‐on‐year increase in orders on the back of efforts tostrengthengthe marketingg structure including
g proposal based marketing.
g Strengthened company wide marketing efforts allowed CSO Business (Japan) to record growth in neworders and order backlog rose of 8.7% and 8.6% respectively.
 Global Research Business was able to record 158.3% and 76.9% year‐on‐year growth in new orders andorder backlog respectively.
 Because of the short time from orders to booking of sales in our EKISHIN Business, we only provide data
for the sake of reference.

13

Copyright © 2015 EPS Holdings All rights reserved.

Balance Sheets （ ASSETS ）（ UNIT:JPY MILLION ）40,00035,00033,70034 68934,68936,76011,925

Cash and time deposits＋1 244＋1,244

8,61338,61

9,472

Account receivable‐tradereceivable trade（※） ＋859

1,493
1,493
2,771

1,508
3,744
3,74
4

1,689
3,598

Inventories ＋181

10 211
10,211

10,14210 142

10,07210 072Fi d assets
Fixed
t △70
△

2014/3末

2014/9末

2015/3末

30,00011,27011,27
0

10 68010,68010,68
680

25,00020,00015,00010,0005 000
5,000

7,9522
7,95

Other current assets
△146

0

14

※Account receivable‐trade include only notes and accounts receivable.
Copyright © 2015 EPS Holdings All rights reserved.

Balance Sheets （ LIABILITIES/NET ASSETS ）（ UNIT:JPY MILLION ）40,00035,00033 70033,7001,060,060

30,00025,00020,000

5,781
5 781
5,78
781
1,500
1,50
0
4,965

34,689
34,
9
1,040
1,04
0
6,938
1,574
3,9055
3,90

36,7601,377
6,6633
6,66

Accounts payable‐trade＋337
Other current liabilities△275

1,6633
1,66

Long‐Term Liabilities +89

4,677

Debts with interest ＋772

Net assets ＋1,149

15,00010,00020,38921,23021,23
022,3792014/3末

2014/9末

2015/3末

5 000
5,000
0

15

Copyright © 2015 EPS Holdings All rights reserved.

Cash Flows（ UNIT:JPY MILLION ）24th First Half
Results

25th First Half
Results

Fluctuation

Operating Activities

2,509

567

△ 1,942

Investing Activities△ 2,267

△ 718

1,549

Financing Activities

716

362

△ 354

Effect Of Exchange Difference On
Cash & Cash Equivalents
q

136

221

85

Net Increase (Decrease) In Cash
And Cash Equivalents

1,093

433

△ 660

BeginningB
i i Of Balance,
B l
Cash
C h AnddCash Equivalents

10,629

11,692

1,063

Ending Of Balance, Cash And Cash
Equivalents

11 723
11,72312 126
12,126403

16

Copyright © 2015 EPS Holdings All rights reserved.

Contents

11. Financial Results Overview (First Half of the 25th Term)
2. Full Year Estimates
3. Future
F
Business
B i
SStrategiesi• Mid‐term Targets• EKISHIN Business17

Copyright © 2015 EPS Holdings All rights reserved.

The 25th Full Year Earnings Estimates (Consolidated)

No changes
to our data

（ UNIT:JPY MILLION ）24th Results

25th Budgetg

Y o Y(%)( )Net Sales

41,80044,120105.6%

Operating Income

4,491

4,625

(%)

(10.7%)(10.5%)

103.0%

Ordinarydi
Income

4,242

4,327

(%)

(10.1%)(9.8%)Net Income

1 828
1,828

1 937
1,937

(%)

(4.4%)(4.4%)

102.0%
106.0%

 Sales expected to steadily expand
 Operating income expected to gradually grow• Organization and strategy to be fortified in the current term

18

Copyright © 2015 EPS Holdings All rights reserved.

The 25th Full Year Earnings Estimates

No changes
to our data

(By Business Segment )（ UNIT:JPY MILLION ）JapanBusiness

Net Sales

Y o Y(%)

Operating
IncomeOperatingI
Incomeratio
i (%)

Y o Y(%)

CRO

24,833102.7%

4,612

18.6%

‐

SMO

6,800

108.2%

950

14.0%

105.4%

CSO

6,500

108.8%

350

5.4%

135.1%

2,226

101.6%

‐50

‐

‐

4,050

115.5%

0‐‐GR
Overseas
Business EKISHIN

Note: Operating incomes of each business segments above show the numbers before subtracting allocation costs
resulting from holding structure transformation

 We have made no changes to our full year estimates at this time We will continue to monitor conditions within each of our businesssegmentsgcloselyy

19

Copyright © 2015 EPS Holdings All rights reserved.

Strategies in The 25th Term (By Business Segment – Japan)
CRO
Business（Japan)p )• Strict cost of sales control, business expansion based
upon obtaining of new clients• Secure new resources, optimize system by reviewing andleveraging resources in Group‐wide• Expand synergies derived from EPS Associates

SMO
Business（Japan）• Improve customer satisfaction through project progress
management• Expand facilities in the oncology area, cultivate CRCs
• Fortifyy unityy of ggroup
p operationspthrough
g delisting,g,conversion to 100% owned subsidiary

CSO
Business（Japan）• Fortify,
Fortify introduce new services including a service that
integrates MRs and call centers• Aggressive market launch, deployment of highly uniqueservices to ensure high competitiveness20

Copyright © 2015 EPS Holdings All rights reserved.

Strategies in The 25th Term (By Business Segment – Overseas)

GR
Business• Obtaining, execution of new global clinical trials
St
Strengthen
th marketingk ti ini Japan,JAsia,
A i andd Pacific
P ifi
regionsLeverage our regional coverage spanning over 10
countries• Strengthen integrated operations of GR services throughimplementationpof an intermediate holding
g company
p y

EKISHIN
B siness
Business• Expand medical equipment sales• Strengthen investment management through licensingout of pharmaceutical development rights• Develop
p non‐clinical trial materials trading
g firm function• Strengthen integrated operations of EKISHN businessthrough an intermediate holding company

21

Copyright © 2015 EPS Holdings All rights reserved.

Contents

11. Financial Results Overview (First Half of the 25th Term)
2. Full Year Estimates
3. Future
F
Business
B i
SStrategiesi• Mid‐term Targets• EKISHIN Business

22

Copyright © 2015 EPS Holdings All rights reserved.

Mid‐term Term Business Strategy<Goal Three Years Forward>• Establish a business structure that can achieve sustainable growth withinJapan• Become an Asian and global CRO services provider originated in Japan• Become a specialistphealth care trading
g firm connecting
g Japanp to China
and South East Asia
<Various Business Segments:
g
Themes of Our Mid‐term Business Strategy>gy CRO (Japan) :Become overwhelming industry leader
 SMO (Japan) :Become overwhelming industry leader CSO (Japan) :Become the leading company with unique services
 Global Research: Become an Asian and global CRO services provider
originated in Japan EKISHIN:
Become a specialist health care trading firm connecting
Japan to China and South East Asia Overall Group: Establish Group management, optimize administrative
di i idivision23

Copyright © 2015 EPS Holdings All rights reserved.

EPS Group Management System
New organization from January 1, 2015

EPS HoldingsgBusiness Segment

CRO

SMO

CSO

Business（Japan)Business（Japan)Business（Japan)GR

EKISHIN

BPO

Business

Business

Business

EP Biz（Sh d Service）（SharedS i ）24

Copyright © 2015 EPS Holdings All rights reserved.

Objective of Transition to a Holding Company Structure

1. Establish independentpand autonomous
management structures for each businesssegment.
g
2. Promote improvements in efficiency and visibilityof administrative function ((Promotion of EP Biz’s
shared services).
3. Pursue new g
growth opportunities; cultivate humanresources to become the next generation ofmanagers.
g

25

Copyright © 2015 EPS Holdings All rights reserved.

Dividend Trends Per Share（UNIT：JPY）

30.0
25.0
20.0

期末配当
Term End Dividend
中間配当
Mid‐term Dividend

18
0
18.0

18
18.0
0

18
0
18.0

17.5

17.5

17.5

9.5

9.5

9.5

10.0

10.0

10.0

8.0

8.0

8.0

8.0

8.0

8.0

2010/92011/92012/92013/92014/92015/9

15.0
10.0
5.0
00
0.0
※The dividend conditions shown in the above graph reflects retroactive revised data that takes into considering the effect of a stock split.

We seek to maintain a stable level of dividend (over 30% payout ratio)

26

Copyright © 2015 EPS Holdings All rights reserved.

Mid‐term Numerical Targets: Sales, Operating Income(C(Consolidated)
lid t d)（ UNIT:JPY MILLION ）2015

Y o Y(%)

2016

Y o Y(%)

2017

Y o Y(%)

Net Sales

44 12044,120105 6%
105.6%

47 50047,500107 7%
107.7%

52 50052,500110 5%
110.5%

Operating
Income4,625

Operating Income
Ratio
i (%)
( )

27

5,500
103.0%(10 5%)(10.5%)

6,700
118.9%(11 6%)(11.6%)

121.8%(12 8%)(12.8%)

Copyright © 2015 EPS Holdings All rights reserved.

Mid‐term Numerical Targets: Business Segment Sales（ UNIT:JPY MILLION ）JapanBusiness

O e seas
Overseas
Business

28

20155

Y o Y(%)( )2016

Y o Y(%)
( )

20177

Y o Y(%)( )CRO

24,833102.7%

27,000 108.7% 29,700

110.0%

SMO

6,800

108.2%

7,500

110.3%

8,300

110.7%

CSO

6 500
6,500

108 8%
108.8%

7 200
7,200

110 8%
110.8%

8 000
8,000

111 1%
111.1%

GR

2,226

101.6%

2,400

107.8%

3,000

125.0%EKISHIN

4,050

115.5%

5,000

123.5%

7,000

140.0%

Copyright © 2015 EPS Holdings All rights reserved.

Sales Trend, Year‐On‐Year Change
Net
売上高
sales

（ UNIT:JPY MILLION ）60,000Previous
対前年比
year ratio

30%

52,50050,00041,80040,00030,00029,451 32,040

35 20235,202

44,12047,500337,584
,

25%
20%
15%

20,00010%

10,000
,

55%

0

0%

2010/99 2011/9
9 2012/9
9 2013/9
3 9 2014/9
4 9 2015/9
5 9 2016/9
9 2017/9
79

29

Copyright © 2015 EPS Holdings All rights reserved.

Operating Income Trend, Operating Margin
Operating
営業利益
Income（ UNIT:JPY MILLION ）

8,000

30%

6 700
6,700

7,000
6,000
5,000

Operatingpg
営業利益率
Income ratio

4,415

4 803
4,803

5,500

5,174
4,491

4,000

25%
20%

4,625
6

15%

3,497

3,000

10%

2,000
5%

1,000
0

0%

2010/930

2011/92012/92013/9 2014/9 2015/9 2016/9 2017/9

Copyright © 2015 EPS Holdings All rights reserved.

EKISHIN BusinessB i
EPS Holdings
H ldi gChairman & CEO Yan Hao

Copyright © 2015 EPS Holdings All rights reserved.

EKISHIN Business Overview ①
EPS Holdings
100％

EPS EKISHIN
C it l ：100 million
Capitalilli yen

EPS（China)
100％

C it l ：45 million
Capitalilli ddollarll

Representative ：Yan Hao

Representative ：Yan Hao

Establishment ：1st October,2013
October 2013

Establishment ：26th December,2008
December 2008

Locations ：Shinjuku‐ku, Tokyo, Japan

Locations ： Suzhou, China

32

Copyright © 2015 EPS Holdings All rights reserved.

EKISHIN Business Overview ②
EPS EKISHINEPS（China）(Operating Holding company)(Pure Holding company)（1）LSG Service

1）Medical Device Manufacture, Sales(Research materials for use by laboratories)

ET Medical Technology (Suzhou)
・ET‐Medical（2）C&L Service (Consulting)・ET‐Medical Device (Nantong)（3）Investment Management Service((Increase value of business investments))①Investment Fund2）Other Services(GEP New Drug Development)② EP‐SIYAO(Changzhou)
EP SIYAO(Changzhou) Technology(Generic Drug Development)③ EPC Pharmaceutical Holding

・Tenant Services (EP‐Biz China)
・Training, Seminar Services(Suzhou EPS Vocational Training School )( h(Pharmaceuticall ProductdDistribution,b
Sales)l )④Family Doctor Online(Internet Sales, Market Research, Advertising)⑤Others, Minor Investment Projects

33

Copyright © 2015 EPS Holdings All rights reserved.

With Regards to EKISHIN Business’s Future Strategy
Business Management Supervision
・LSG Services Division + C&L Services Division: Turn to Profits
・ET‐Medical Technology (Suzhou)+ ET‐Medical Device ((Nantong)g): Expand Sales, Grow Profits

1．Turn loss to profit atg income level
operating・Tenant Management + Training Services: Turn to Profits

2．Turn loss to profit atordinary income level・Administrative Division (Tokyo + Suzhou): Reduce Costs

3．Grow asset value

・Investment
IttM
Managementgt (Non‐Consolidated(N C
lid t d C
Company)): Reduce non‐operating loss, improve business value

34

Copyright © 2015 EPS Holdings All rights reserved.

Diversify earnings of the medical Device business
Medical Device Sales
ET‐Medical Technology (Suzhou)()＋
Medical Device Manufacture
ET‐Medical Device (Nantong)

Initial estimates (October 2014 to September 2015)
Units: Thousand Yen

Currently:
Pi
Primarily
il D
Devicei iimports
t and
d
sales

＋
Future:Add equipment manufacturing
to expand sales, grow profits

ET‐Medical Technology (Suzhou) Sales
Sales：3 600 000
Sales：3,600,000
Operating Income：140,000
Operating Income Margin： 3.7%

35

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Ｔｈａｎｋ ｙｏｕ<Contact> E‐Mail； ir@eps.co.jp

Copyright © 2015 EPS Holdings All rights reserved.