3649

Financial Results Briefing
FINDEX Inc.
FY2020 Second Quarter Financial Results
August,2020

Corporate Profile

Corporate Profile
Company Name

FINDEX Inc.

Representative

President & CEO Teruo Aibara

Head Office2-4-1, Hamamatsu-cho, Minato-ku, Tokyo 105-6133, Japan
TEL: +81-3-5408-3745 FAX: +81-3-5408-3744

Other Branch Offices

Shikoku, Osaka, Fukuoka, Sapporo, Naha

Subsidiary

Eagle Matrix Consulting Co., Ltd.

May 1994
March 1998
March 2011

Medical system custom-development business became incorporated
PSC Inc. is established as a medical system developer and consultant
The company is listed on Osaka Stock Exchange (JASDAQ)* (now Tokyo Stock Exchange)
The company changed its name to FINDEX Inc. and changed its
stock market listing to the First Section of Tokyo Stock Exchange

November 2014
URL

https://findex.co.jp

Capital

254 million yen

Employees

278（Consolidated: 291 As of July 2020）*includes 11 part-time (11 consolidated)2

Our Business
Claio
Medical data management

DocuMaker/C-Scan
Medical document
management system

MedicalSystemOver 50% oflarge hospitals
in Japan are
FINDEX users

DocuMaker Office

Manage internal document

HOSPITALTaking the trust and experience in medical field, the productdeveloped to comply with the revised eDocument Law.

Data-Connector
EAI Tool

Enable to link various systems and transfer data in a versatile way

DigiWorker

OfficeSystemHealthTechDocument/
Workflow

Personal/
Business

RPA Tool

Automate various tasks easily and inexpensively

Perimetry system
First in the world

Medical data analysis with
AI technology
Utilize Visual sensing &Vital data3

Powerful Solutions
Medical system solutions

Network Imaging System

Claio

Progress Note System

Gaze Analyzing Perimeter

Radiology
Information System

Document Management System

Electronic Medical Record

Radiological Image
Viewing System

RPA Tool

DocuMaker

REMORA

Document Integrated
Archiving System

PDI Import/Export System

Imaging & Document Filing
System Package

Perinatal system

ClaioBOX

HealthTech

Medical Document
Management System

C-NoteC-ScanBusiness solutions

PDI＋MoveBy

MapleNote

ProRad RISDocuMaker Office

ProRad Nadia

DigiWorker

Radiological Reporting
SystemScreen Based EAI Tool

ProRad RS

DocuMaker
Stress Check System

GAP

Vital Sensor

CALM-M

Data-Connector

4Agenda■FY 2020 Q2 Financial Results■FY 2020 Full Year Outlook■Initiatives in Medical Field / New Topic■Health Tech
■Office System

FY2020 Q2 Financial Results

FY2020 Q2 Year to year Comparison (consolidated)
Net sales and profit were both significantly higher than in the same
period last year, when sales and profits were heavily weighted toward
the second half of the year.
→59 of New installations・ 49 of Clinic cases→Renewal of existing clients and adding new subjects
Previous year 2019 was heavily weighted toward the second half of the year
because of the sales tax increase.

（million yen）
FY2019 Q1
Actual（consolidated)

FY2020 Q2
Actual（consolidated)

Year-on-year
amount

1,921

2,260

338

+17.6

Operating Income

273

552

278

+101.8

Ordinary Income

276

555

278

+100.5

Profit Attributable to
Shareholders of Parent

185

375

190

+102.9Earning per Share (yen)

7.23

14.67

Net Sales－

Year-on-year
Ratio

－
7

FY2020 Q2 Results by Segment (consolidated)（million yen）

Reportable Segment
SystemDevelopment

Health-tech
Business

Adjustment
(*1)

Total
（consolidated)
(*2)

2,244

15

－

2,260

1

0

△1

－

Total

2,245

15

△1

2,260

Segment Profit or Loss（△）（operating income）

653

△100

－

552

Sales to external customer
Intersegment sales /transfer amount*1. Adjustment amount is due to elimination of intersegment sales*2. Segment profit or loss is matched with operating income in the quarterly consolidated
statement of income.

8

FY2020 Q2 Outlook◼ In spite of the Covid-19 situation, Q2 was normal growth.
→New system installation and system renewal were
determined a year to 18 months in advance.
Thus, The results were the same as in previous years.
→No changes or delays in the implementation
period from our major client, a large hospital.

◼ The main part of Medical treatment fee wasrevised upward in 2020.
→When the hospital's budget was prepared, medical institutions
did not anticipate the impact of the Covid-19 as much as thecurrent situation, and the willingness to invest in the system
was very strong.
→January through March, which is the end of the medical
institution’s 2019 fiscal year, falls in our first quarter 2020.

→The Second quarter was also stable, each profit marked
a high year on year figure.
9

FY2020 Full Year Outlook

Initiative in 2020
Generate Steady Profit from HealthTech Business
Formed All Medical Systems into a Cloud
MedicalSystem・The fee for health care service (Medical department)
was increased in this year 2020.
⇨As a result of the spread of Covid-19, the existence of the system will change in the future.

・Formed all our products into a cloud・Selling quality monthly model system

HealthTech

・Scheduled to start selling GAP and launch the businessof visual field test officially・Enhancing the strategy which analyzing medical data
and assisting AI diagnosis⇨We are approaching new business by using data

OfficeSystem・Focus on “Selection and Concentration” to be utilized
limited resource maximumly
・Selling our office system efficiently by using existing
vender and medical institution user.
⇨For back office in hospital and mid-sized government11

2020 Forecast (Consolidated）• The year of 2020 is fewer system updates for existing customer• Delay of manufacturing parts of GAP in China because of COVID-19,thetiming of sales has been delayed. (Equivalent to △2.5 billion-yen in sales)• Increase in expenses due to the head office relocation（million yen）

2019
Actual（Consolidated)
AmountNet Sales

2020
Forecast（Consolidated)
AmountYoY ratio

4,281

4,210

△1.7

Operating Income

743

580

△21.9

Ordinary Income

746

583

△21.9

Profit Attributable to Owners of Parent

499

378

△24.3

19.50

14.21

－

Interim Dividend (yen)

2.50

2.50

－

Year end Dividend（yen）

5.50

5.50

－

Full year Dividend（yen）

8.00

8.00

－

Earning per Share (yen)Dividend per Share (plan)

12

Net Sales, Ordinary Profit and Net Income Trends（million yen）
Net Sales

Ordinary Profit

Current Net Income

FY Forecast

4,000

3,288

※Medical treatment
fee was decrease↓

Revision of medical fee is
big advantage for FINDEX！

546

724

499
2016

2017

366

Estimated figures include
head office relocation
expenses and anticipatory
investments※Medical fee wasincrease↑

593

746

398

499

2018
（Consolidated)△1.7％

Already considered allconcerns of Covid-19※Medical fee wasincrease↑

Caused Less new
installation & renewal

0

+8.8％

+0.7％

+11.4％

2,000+18.8％

3,603

3,311

4,210

4,281

2019
（Consolidated）

580
378
2020
Forecast（Consolidated）※Medical treatment fee is revised every 2 years.
13

Sales by Product2020 Consolidated(Forecast)2019
Consolidated
Claio
DocuMaker
C-ScanMoveByNet Sales

4,281 million yen
Direct sales 79.4%
Distributor 20.5%

Operating Income

743 million yen

REMORA
Radiology

OEM

Net Sales

4,210million yen

MaintenanceOperating Income

License580million yen

Hardware
OthersNon-medical
EMC

14

Initiatives in Medical Field

Increase of our Medical Institution in 2020 Q2
Number of User in the end of term in 2020 Q2
Scale

End of2019

Large-sized Hospitals(More than 500 Beds)
Medium-sized Hospitals(100 – 499 Beds)
Small-sized Hospitals(20 – 99 Beds)
Clinic(Less than 20 Beds)
Non-Medical Field
Total

End of2020 Q2

Increase

250

253

3

554

565

11

130

130

0

1,113

1,148

35

85

84

(1)

2,132

2,180

48

※These number of Increase mean new gain only.
We also have system renewals.

16Medical Market Size
Implementation rate at university hospitals becomes the benchmark
for FINDEX!

Total users 2,162

University Hospitals*Please see our home page for user details.

Implemented hospitals/
public and private hospitals

Large
hospitals

114/149institutions*including branch hospitals

Target of potential
customer

90％

Medium-sized
hospitals
60～70％

Large hospitals（More than 500 beds)

253／408 institutions
Medium sized hospitals（100~499 beds)

565／4,987 institutions
Small hospitals

Small hospitals /Clinics
15～20％（20~99 beds)

196 ／ 2,977 institutions
Clinics
1,148／102,105institutions
Integrated community care product：18（As of end of June 2020）

17

Our Market Share

Overwhelming share of
National University Hospitals＝ 78.6％
Change in the Number of FINDEX users
2019Market share inlarge hospitals withmore than 500 beds

＝ 62.0％

Other hospitals
and clinics

2018

2017

Over 1,900

2016
Univ.Hospital
General Hospital

2015

Clinic

0

500

1,000

1,500

2,000

（As of end of June 2020） 18

Strategy
University hospitals lead other hospitals

University hospitals
Reliability of products
being used at university
Hospitals
Having the same system
is convenient for doctors
Because of the highimplementation rate inuniversity hospitals,
other hospitals ask forour product naturally

Largehospitals
Medium-sized
hospitals

Small hospitals and clinics

Implement by direct sales
Implement by distributors（High profit margin)
Referral from a medical
school which thedoctors are graduated
Systems expand toaffiliated hospitals /medical office19

Distributor Businessmillion 百万
Yen

4,000

売上高
Net Sales
代理店売上高Sales by distributors

40

Operating Income
営業利益
Main distributor
主要代理店数

3,000

30

2,000

20

1,000

10

0

0
2016

2016年

2017

2017年（連結）(Consolidated)20182018年（連結）(Consolidated)20192019年（連結）(Consolidated)

2020 Forecast

2020年予想（連結）(Consolidated)

Aim for sales expansion and high profit business model
20

Sales Cycle of Medical System (Initial & Running Cost)
Medical system is replaced every 5 to 6 years dependingon the server/PC’s life cycle⇒In recent years, more institutions are extending theirsystem renewal time to 6 to 7 years
Direct Sales by FINDEX*Testbed of package development
University
hospitals
Large
hospitals

Initial cost ※Except equipment
100mil~200mil yen
Aim at additional items
when the renewal

Cross sellinitialcost

Maintenance fee
7mil～15mil/year

50% ofinitialcost
30% ofsupportcost

Sold by distributors/
alliance partners
Large hospitals
Midsize Hospitals

Initial cost ※Except equipment
20mil～100mil yen

Small hospitals / （30％ of this amount is our profit）
clinics

Maintenance fee
initial 1.5mil～7mil/year

Cross sellcost

5~6yrs6~7yrsrenewal5~6yrs6~7yrsrenewal21

is aCross sell Strategy to Outdistance Competitors *Claio
computing platform

Not necessary to buy every
It is cost effective
medical examination equipment!
because of shared
It is costinfrastructure!
effective
because of shared infrastructure!
TOTAL

125million yen

Endoscopy
systemSoftware only

15million yen

TOTAL 190million yen
Firm
C

Endoscopy
systemSoftwareFirm
B

Software only

30million yen

Ophthalmology
medical record

Software only

30million yen

basic Claio
Claio *Software
manage any kind of test data

50million yen
Systems
cooperation
function

Serverstorage

Firm
A

Server storage

Obstetrics
80million yen
medical record

SoftwareObstetrics
medical record

Systems cooperation
function

30million yen

Systems cooperation
function

Server storage

Ophthalmology 80million yen
medical record

Software

Systems cooperation
function

Server storage*The most basic data filing feature of departments’ test data

Composition of Findex system

Composition of another company 22

New Topics

New

New service launched considered with Covid-19

Started providing web-based services for the cases where
patients do not go to hospitals, such as online medical care.
Web communication tool for patients and hospitals➢ Patients can use the Internet to process and verify the information themselves➢ Hospitals automatically send the information (e.g. Notes on inspections)and reminders for their next visit➢ Supporting two-way communication between large hospitals and patients to improve thequality of medical services

FAX sending and receiving management service➢ Extensive use of faxes for patient referrals in community collaborations and for sending
prescriptions in online clinics➢ Manage faxes as data without printing them on paper and link them to patient IDs➢ Supporting the efficiency of transmission and reception, reducing the workload of medical
staff and strengthening connection between facilities

DocuMaker Contents online publishing service➢ The latest forms of medical reports and official documents created in the document creation
system Documaker are published online and provided quickly➢ Contributing to reducing the load of paperwork at medical institutions and, by extension,reforming the way of medical institutions work24

HealthTech

HealthTech Approach

Collect & analyze various data with high technology
Big Data ＠ Cloud×

AI

Generate
new value& business

PC, Smartphone, Tablet, Wearable Device
visualfield
test

medicalcare athomefatigue/sleep…

Base Technology：ICT, IoT, Robotics, Medical System, etc.
26

Perimetry BusinessRoll out the business from two aspects
Development ofa perimetry system⚫ Built the world’s first perimetry system⚫ Enabling the test not only at medical
institutions but also at health checkup
facilities⚫ Business plan at the eyewear shops

Collect & analyze visual
field defects data
⚫ Distribute our system as a freeware⚫ Gathering visual field defects data fromall over the world⚫ Use the data for disease prevention,⚫ drug discovery, and health management27

Perimetry system with new test methodGAP

GAP Gaze Analyzing Perimeter28

Perimetry system with new test methodGAP

GAP Gaze Analyzing Perimeter

29Perimetry system with new test methodGAP

GAP Gaze Analyzing Perimeter

Examinee’s Screen
Calibration↓

Examinee’s Eyes

30

Perimetry system with new test method GAPInnovation ofVisual-Line analyze typed Perimetry
GAP

Existing Products

Possible to judge examinee’s visibility automatically➡No mistaking & misunderstanding

Examinees must judge visibility by itself➡Caused mistaking & misunderstanding

It takes for 3-5 minute to take test (Both eyes)➡Available to Increase examinees a day

It takes for long more than 20 minute usually➡Must need booking before taking a test

Head-mounted Type
➡Available to test Anywhere even Waiting Room

Must need to install big sized instrument➡Demerit of installing place &Only for Ophthalmological clinic

Take a test while examinee move both eyes
➡ Easy for Kids and aged person

Not allowed to move eye & must look a point strongly➡Too much obligation for elderly person

Not rely on Orthoptist’s skill when we get a test result➡It could utilize new place( Glass wear store etc..)

Basically the result rely on Orthoptist’s skill➡Must take a test by Orthoptist ※１

Possible to find glaucoma more than Retinal disease➡Progress research of Neurologic disease & Dementia

Possible to find only for Glaucoma & Retinal disease➡Unable to examine versatilely※１

Only Orthoptist is possible to conduct visual field test in Japan.
31Perimetry system with new test method

Business Advantages

GAP
Almost ophthalmologic instrument
distributers were already registered!!

⚫ Evaluated high quality assessment and got strong desire to buy from Medical
institution, Possible to remark high Net Sales⚫ We create all instrument and system (include modeling & assembling) byourselves. We will keep remarking high ratio of profit⚫ It is possible to collect various data within one time, We could accumulate it tocloud, in addition It is even use it for second analyzed data
⚫ If GAP could register as new category of medical instrument officially and adjust
with law, We will be able to contribute to eye’s health care Moreover, It could besold it even non-medical field⚫ Already complete to demonstrate GAP at Ophthalmology international
conference.(Under considering) It is possible to sell GAP in the world by utilizing
international license⚫ Sole distributor for Europe has been selected and preparing for sale

Highly competitive product in the world Originated in Japan!
Creating Innovation & good benefit
for eye test with using AI & Visual sensing!

32Perimetry Test Equipment/System Market

Automatic perimeter market• Medical checkup facilities with eye exam
• Hospitals/clinics with ophthalmology• Eyewear chain stores

Domestic market size of the test equipment
Medical checkup facility ：~1,200 facilities ｘ￥1.5M = ~¥1.8 B（physical checkup ver.）Hospital/clinic：~6,000 facilities ｘ￥2M ＝ ~¥12 B（medical ver.）
Eyewear chain store：~2,000 stores ｘ￥500K ＝ ~¥ 1 B（If the market is ready）
Sales forecast based on the market share assumption in 5 years
Medical checkup facility
Medical institution
Eyewear chain store

30％ ¥1.8 B
30％ ¥3.6 B
20％ ¥200 M

Selling flow

FINDEX

Selling
2 mil

Distributers

Selling
3 mil

Hospital,
Medical check up facility
Glass wear store

The overseas market size is assumed to be approx.
90 billion yen, just the medical institutions alone
33

Rollout of Perimetry System Business

Commercialize the system and data utilization inthree steps of physical checkup, clinical exam,
and overseas use
1st Phase

2nd Phase3 rd Phase

Physical Checkup

Clinical Exam

Overseas use

Selling the automatic
perimeter to physicalcheckup facilities

Selling the automatic
perimeter to medical
institutions

Selling the automatic perimeterto overseas Collect global data ofvisual field test

1st phase• February 2019：GAP-screener Domestic medical device registration
completed, product launched

2nd phase• January 2019：GAP Domestic medical device registration completed• Receiving application for Trial before purchase, preparing for shipment(in 2020)

3 rd phase• Looking for overseas partners

Other• The business with pharmaceutical companies and large eyewear
store group is under discussion
34Collecting Global Data of Visual Field Disease by Cloud

Global data collection & analysis of visual
field test, including healthy people’s data

Provideapplication

Collect datafrom worldwide

Utilize Big Data for healthcare,
medical cost reduction,and drug discovery

By providing our system as an easy to use free application, we support
people’s health management, and also collect data through the app which
to be utilized as a Big Data for new business

Global data collection & analysis businessof visual field test, which also includes
healthy people’s data
35

IoT Devices in Telemedicine / Healthcare

Wearable Vital Sensor CALM.
⚫ Tracking body motion and pulse wave byusing a wearable vital sensor developedby EMC Healthcare Co., Ltd.

⚫ Grasp patient status and detect
abnormalities in telemedicine, get holdof health condition of corporate
employees⚫ Besides the price advantage, it is better
than competitors’ products in device
size, uptime, and data analysis

Contribute to telemedicine, commercial andpersonal healthcare36

AI Video Analysis：Child Nap Monitoring System 「BABY-MONI」

Put a Camera on the ceiling & Checking children’s
sleeping position by using AI⚫ Possible to check some kids at the same timeby using only a camera⚫ No need to install and remove every time we use it⚫ No risk to cause accidental ingestion37

Office System

Office System Products
Document management system: DocuMaker Office⚫ A system that is well proven in the field of medical document
management is introduced to “the non-medical field”⚫ Core part is already developed; low risk & high profit margin⚫ Expanding our business to local government & medical
institution

RPA tool : DigiWorker⚫ Productized with the technology that we already have
⚫ Provides office process automation tool at low cost

Documaker Stress Check System⚫ Developed a system for stress check service providers⚫ Expanding our business mainly to large business operators,
medical institution, and medical examination facilities
39

FY2020 Q2: Initiatives in Office System Field⚫ Steadily securing new project• DocuMaker Office: 8 cases Installed, 16 cases Under consideration⚫ Focused on selling DocuMaker Office-Medical facilities(admin. dept.)

Launch full scale deployment• Proposing aggressively along with the medical solution-Local governments
Collaborate with core system vendors to sell efficiently• Installation is on going for the project go live in 2020, and new opportunities in
2021 are in discussion• Increased inquiries from public companies that operate similarly to local
governments⚫ RPA tool : DigiWorker•

Increased inquiries from medical institutions

40

DocuMaker Office’s Markets
Mainly targeting local governments and medical
institutions where Documaker's strengths can be utilized.
Local gov. / public
service enterprise

Medical institutions
administrative
department

in any department•

Electronic approval•

Bookkeeping
management(drafting, receipt registration, etc.)

etc.
Electronic approval isrecommended by the state; more
local gov. are adopting a system

With the know how in medical
field, we built a user-friendly
system that is different fromother products•••

Workflow
Contract management
Hospital evaluation
correspondenceetc.

Due to changes in hospitalfunction evaluation requirements,
more hospitals is undertaking
document management

We support the hospital’s entire
document management byextending the system wellproven at clinical departments toadministrative department

41

(Reference) Medical data standardization database (SDM)
SDM＝Database design of medical & healthcare data
⚫ Enable to utilize medical/healthcare data without depending on system vendors⚫ Enable to reduce data migration cost at the time of system replacement⚫ Demand for SDM will increase in the medical/healthcare industry where datautilization is progressing
Without SDM…
Firm A
EMR

Firm B
EMR

Only Firm A’s
EMR data canbe analyzed
Only Firm B’s
EMR data canbe analyzed

SDM ＋ FINDEX solution

With SDM…

Can not
analyze data
across vendors

Firm A
EMR

convertSDM
DWH
Firm BEMR

Can analyze
EMR data
Of both firm
A and B

convertIn addition to the image and document already managed by FINDEX
solution, more data can be added for integrated management.

Support integrated management and further
utilization of a wide range of medical data
42

(Reference) RPA tool: What is DigiWorker?
RPA（Robotic Process Automation）
It refers to the program and software of business process automation, such as to collect,process and register data into a system As the work style reform is getting attention,
more companies are adopting it to deal with a worker shortage and improve productivity

Application examples…
Smooth starting

Sharing Data

Features
A clickon the patient information openedin the electronic medical record activatesthe system to take over the data

You can automatically post the
information that was input in thesystem into another system just with aclick

Data Transfer

Data migration is possible at low costwithout depending on the current
system vendor⚫ DigiWorker is already used by many medical institutions, but the demandis expected to grow further as RPA garners more attention.
⚫ Because we know all about the operation of medical institutions, we will
actively deploy DigiWorker as a tool to improve operational efficiency
and reduce inter-system data migration costs.
43

(Reference) Sales Channel and Projection Method
Medical: Negotiation flow fora large facility (example)

2020 forecast
2019/5Introducing the system to a medical
institution

2019/7

Submit a sample quotation to the
medical institution

2019/9

Reply to bid (purchase) specification
with references and opinions

Large
Medium-sized
Small
Non-medical
Health-tech

2019/101y〜1.5year
2019/12

Submit quotation to the systemmanufacturers who will place a bid

2019/12

Bidding (FINDEX bid through multiple
system manufacturers)

2020/01

Bid opening(winner is selected within a month)

Most sales come from large medical institutions
Because a large medical institution installs a large system, theproject is usually subject to an international competitive bidding.
In many cases, the discussion with the candidate systemmanufacturers starts more than a year before receiving theorder.
For this reason, FINDEX uses a “quotation backlog” instead ofan “order backlog” to make following year’s projection.

8m〜1year
2020/08*When a purchase size is small, the deal can be completed
within few months

In recent years, negotiations tend to
take longer time

Advertise for bid (purchase)

2020/12

Receive an order(sales contract signed by systemmanufacturers and medical institution)

Recognize sales (system launch)

44

3649

Progressive Software Creators
Always have, Always will.