3649

FY2023 Financial Results Presentation
FINDEX Inc.
16th February 2024

🄫2024 FINDEX Inc.

Cautionary Statements

This material is provided for informational purposes only and does not constitute a solicitation of any action based on this material.

This document (including the business plan) has been prepared by the Company based on reliable information available at the time of
preparation, but it contains risks and uncertainties, and the Company assumes no responsibility for its accuracy or completeness. The
Company assumes no responsibility for the accuracy or completeness of the information contained in this material, even if it is desirable toupdate or revise forecasts or plans.
The Company assumes no responsibility whatsoever for any losses that may arise from investment decisions based on the forecasts and target

figures contained in this document.
The copyright of this material belongs to Findex Inc.
No part of this report may be reproduced or distributed in any form or by any means without the prior written permission of the Company.
In the graphs and tables of this document, some of the figures are rounded up or truncated for the purpose of adjusting fractional values.
This document has been translated from the Japanese original for reference purpose only. In the event of any discrepancy between thistranslated document and the Japanese original, the original shall prevail.

🄫2024 FINDEX Inc.

KEY TAKEAWAYS
・FY2023: Achieved over 40% increase in profit driven by Medical and Public Business
・FY2024: Accelerating investments in human resources, still expecting sales & profit growth【FY2023 Actual】【FY2024 Guidance】

Achieved increased sales and profit

Net sales:

YoY

Operating profit: YoY

+14.3
+45.5

Net sales:
Operating profit:

Net sales:

YoY

Operating profit:

YoY

%
%

Outperformed the original guidance
vs. guidance

Anticipating growth both in sales and profit+2.5%+14.0 ％

+11.4
+ 5.2

%

•

Achieving stable profit growth through increased productivity andstrengthened sales capabilities•

Investment in talent for long-term corporate value enhancement andgrowth is a key focus•

Initiating considerations for mergers and acquisitions (M&A) and
implementing various measures to expand our business capabilities

Increased the year-end dividend by 2 yen,

The original plan for the dividend

bringing it to JPY13.0 for the entire year

JPY15.0/yr remains unchanged

🄫2024 FINDEX Inc.

%

3

Trends of Our Sales
Fall 2024: Transition to My Number
insurance cards planned, current
insurance cards to be phased out（¥ Millions）

Forecast
2022：Medical DX Reiwa Vision 2030

6,000Electronic Medical Record (EMR) Adoption Rate @over 400 beds：91.2%

5,782
5,191

4,968
5,000

2018：The Next Generation Medical Infrastructure Act
Institutionalization of Telemedicine

4,541
4,281

4,004
4,000

April 2014： Consumption Tax Hike

3,603

3,288
2,863

3,000

3,311

2023：Start of Electronic
Prescription Operation

2,951

Oct 2019： Consumption Tax Hike

2,382
1,987
2,000
1,543

2021：Establishment of the Digital Agency
Online Credential Verification Initiated

1,000

0
2011

2012

2013

2014

2015

2016

Q1

2017

Q2

Digitalization of Medical Claims
Adoption of Electronic Medical Record Systems

🄫2024 FINDEX Inc.

2018

Q3

Q4

2019

2020

2021

2022

2023

2024

The pandemic of COVID-19

Initiatives to Standardize
Medical Information

4

FY2023 Financial Performance Highlights•

Significant increase in net sales and operating profit, mainly due to strong demand in Medical Business•In Q4 alone a high level of profit was registered compared to the robust FY2022 on YoY basis（¥ Millions）

FY2021

FY2022

FY2023

FY2022Q4YoY

FY2023Q4

YoY

Net Sales

4,968

4,541

5,191

14.3%

1,541

1,717

11.4%

Gross Profit

2,556

2,722

3,329

22.3%

971

1,197

23.2%

51.5%

60.0%

64.1%

-

63.0%

69.7%

-

920

1,028

1,496

45.5%

540

700

29.6%

18.5%

22.6%

28.8%

-

35.1%

40.8%

-

Recurring Profit

944

1,055

1,527

44.7%

532

707

32.9%

Profit Attributable to
Owners of the Parent

636

722

1,059

46.5%

373

492

31.9%

Gross Profit Margin

Operating Profit

Operating Profit Margin• In Q4 alone net sales increased by 11.4%, while operating profit increased by 29.6% compared to the previous year
• The gross profit margin remained high at 69.7% in Q4• As for FY2023, the revenue recognition impact of Q1FY2024 sales projects was significant• Public Sector Business showed a strong performance, maintaining its profitability.

🄫2024 FINDEX Inc.

5

Balance Sheet•

No significant changes in the balance sheet•

Equity ratio and ROE remain at high levels of 81.5% and 23.8% respectively（¥ Millions）

FY2023

FY2022
AmountMainly caused by

ChangesAmountB/S
Cash and deposits

2,413

2,693

279

Notes, accounts receivable - trade and contract assets

1,361

1,924

563

Merchandise and finished goods, work in progress

169

221

51

Raw materials and supplies

146

Other

37

-28
13
878
(14)
39
39
50
954
118
32

TOTAL CURRENT LIABILITIES654

LONG-TERM LIABILITIES

283

118
50
5,006
89
290
290
547
5,934
772
316

0

0

0

937

1,088
4,845
4,844
5,934

151
802
806
954

TOTAL CURRENT ASSETS

4,128

Tangible assets

103

Intangible assets

251

Software251

Investments and other assets

497

TOTAL ASSETS

4,980(long-term and short-term interest-bearing liabilities)
TOTAL LIABILITIESNET ASSETS

4,042

Shareholders’ equity

4,038

TOTAL LIABILITIES and NET ASSETS

4,980（¥ Millions）

FY2022
AmountAmountFY2023
ChangesAccumulation in profit

Accumulation in profit

Mainly caused by

C/F

Cash flows from operating activities

693

Cash flows from investing activities

(230)

842
(296)

149
(66)

Cash flows from financing activities

(142)

(270)

(128)

463

546

83

Free cash flow
🄫2024 FINDEX Inc.

Increase in profit
Shareholder Dividend (substantial
Increase/Decrease:(28))• Deposits and cash
increased to JPY 2.7bn
with the cumulative profits
from the past
• Strategizing on effective
uses of capital including
M&A• In 2022, after accounting forthe impact of a 100 mio
loan taken out by aconsolidated subsidiary atthat time (EMC HealthcareCo., Ltd.) and dividends of
232 mio, the cash flows
from financing activities
amounted to 142 mio
6

FY2023 Factors Contributing to Changes in Operating Profit
・By concentrating on packaged products that require minimal implementation effort, both the number of sales
and the profit margin have increased
・High volume of sales from software acceptances scheduled in Q1FY2024 was registered due to the revenue
recognition under the new accounting standards
Factors Contributing to Changes in Consolidated Operating Profit FY2023（¥ Millions）

1800
1600

113

-66

104

1400

• Q4 showed strong performance,
resulting in an increase in operating
profit

-73

113

1200

Q4

277

700

1000
800

Q4
540

600
400

Q1-3
796

Q1-3
488

• Both the increase in sales and theimprovement in profit margins madepositive contributions• There were low outsourcing costs
associated with system migration in
FY2023, and overall costs (including
expenses for large-scale productdevelopment and collaboration withother companies) were minimal• SG&A expenses are under control

200
Q1-3
FY2022

Q4

Net Sales Factors

Q1-3

Q4

Cross Profit Margin Factors

Q1-3

Q4

SG&A Factors

FY2023OperatingOperating

ProfitProfit

🄫2024 FINDEX Inc.

7

FY2023 Trends in Each Business Segment••

Sales in Medical Business remained strong and Public Sector Businessturned profitable. Achieved the targets from the mid-term business plan
The reduced Health Tech Business losses contributed to improvefinancial performance(¥ Millions)

FY2022

FY2023

FY2022Q4YoY

FY2023
Q4

YoY

Medical Business• Sales expanded steadily, leading to a
13.4% YoY increase in net sales• Profit was boosted by maintenance revenue
from new customers, revenue fromconsulting, and the progression of packaged
product sales• Profit growth offset the increase of
personnel costs, resulting in a high level ofoperating profit margin

Net Sales

4,541

5,191

+14.3%

1,541

1,717

+11.4%

Medical Business

4,352

4,935

+13.4%

1,477

1,614

+9.3%

Public Sector Business

121

187

+54.5%

5875+28.0%

Health Tech Business

69

68

-1.2%

4

27

+449.6%• Number of installations and add-ons during
FY2023 : 45 for hospitals and 109 for clinics

Operating Profit

1,028

1,496

+45.5%

540

700+29.6%

Public Sector Business

Medical Business

1,267

1,625

+28.3%

562

733+30.4%• Operating profit has been in the black

Public Sector Business

-33

41

-

20

31

+56.8%

Health Tech Business

-205

-170

-

-42

-65

-

• Bidding for local governments and otherpublic entities performed well

* The "Accounting Standard for Revenue Recognition“ has been applied from FY2022* Business segments changed from FY2023. As for FY2022 figures are reallocated based on the change made.
Until FY2022 Public Business was included in Medical Business. Figures above are unaudited• The cumulative numbers of installations
since the service launch: 26 for public sector
organizations and 6 for hospitals

Health Tech Business
1,496

1,028

• Shipping of GAP to the EU started• Revisiting our sales strategy despite highinterest from hospitals and clinics• GAP/GAP-screener sold in FY2023:
Domestic:14 units, Overseas: 46 units• Registered JPY25 mio valuation loss oncomponents in Q4

🄫2024 FINDEX Inc.

• EMCH shifting to equity method affiliate
narrowed the deficit

8Medical Business 1/2••

Efficient implementation achieved through the promotion of packaged sales,
resulting in an increase in the number of sales•

There is growing interest in cloud services tailored for large -scale hospitals
Average Numbers of Soluions
Installed per Medical Facility

Net Sales andOperating Profit（¥ Million)

1,800

•

6.00

•

1,614
5.50

1,600
1,477

5.00

1,400

4.61
1,196

1,179

1,200

1,168

4.33

4.50
4.16

4.30

•

4.39

4.04
1,000

4.00

973

925

•
3.50

754

800

3.00
600

2.76

2.86

2.54
2.50

400

2.29

2.00
1.96

200

2.33
2.04

2.96

2.41

2.49

2.19

2.22

3.06

3.10

2.53

2.67

2.34

2.40

Key Initiatives
•
•
•

1.50
0
Q1

🄫2024 FINDEX Inc.

Q2

Q3

Q4

Q1

Q2

Q3

FY22/12

FY23/12Net sales

Operating profit

Q4

1.00
2018

2019

Large hospitals
Small hospitals

2020

2021

2022

2023

Medium sized hospitals
Clinics

Software was selling well and newly
established consulting department
received continuous orders. Large scale
projects proceeded smoothly (resulting in
an increase of revenue recognitions
under the new accounting standards)
The number of inquiries for our in-housebrand, “PiCls”, which offers unique cloud
solutions to support collaborations among
medical facilities, has increased
Cross-selling to existing customers
continues to perform well, particularly inlarge hospitals
Our subsidiary Fitting Cloud Inc. started ajoint R&D with Kyoto University utilizing
generative AI to upgrade our medical
documentation software
Number of our flagship product “Claio”
users reached 1,500. The total number ofour customers is about to reach 2,000•

Expanding cloud-based services
Utilization of generative AI and preparation
for data business
Regarding the sales of medical software in
India, ongoing discussions with Toyota
Tsusho Corporation are focused on the
product’s sales timing and pricing
Adjusting the product prices upward toaddress increased costs
9Medical Business 2/2•

Number of medical solutions users steadily growing, reaching 2,000 soon•

Number of our flagship product Claio users reached 1,500 in November 2023(# of Facilities)

Changes in the Number of Medical Solutions Users
98.3%

2,500
98.7%

97.8%

99.3%

98.8%

FY2023 Medical Business
Composition of Sales by Products

100.0%

99.4%

Claio related products
MapleNote
1,987

1,911

2,000
1,757

DocuMaker

90.0%

1,823

1,558
1,500

C-ScanClaioandrelatedproducts

1,675

80.0%

Maintenance

MoveBYREMORA
Radiology

35.2%

28.0%

Consulting
Maintenance

1,000

Hardware70.0%

LicenseConsulting
500

60.0%

Other
4.4%

Fitting Cloud

Trends in Distributor Sales
1,200
1,000

0

50.0%
2018

2019

2020

2021

2022

2023

800

956

866
198

260

668

593

FY2019FY2020

853

1,085

1,036

251

227

834

810

FY2022

FY2023237

600
Large hospitals

Medium sized hospitals

Small hospitals

Clinics

OthersRetention Rate

400
200

*Calculation changed as categorization of large hospitals revised from 500 or more
beds to 400 or more beds following the revision of medical service fees in 2018.
*Consumers of one-time products are excluded. Definitions are unified due to thepresence of mixed definitions in some of the previously disclosed data
🄫2024 FINDEX Inc.

719

0
FY2021

Q1-3

Q4*Figures for the now-removed Public Sector
Business is included up to FY2022

10

Public Sector Business•

FY2023: Both sales and profit significantly increased as large-scale projects progressed well•

FY2024: Focus on expanding internal resources and acquiring new sales partners•

Net Sales andOperating Profit

Focusing on the stable operation of
Q1FY2024 projects. Emphasizing user

Breakdown of Net Sales

satisfaction through robust post-(¥ Millions)(¥ Millions)

implementation support

80

100

•

There are five ongoing projects under
implementation. Multiple negotiations for

70
80

75

H2FY2024 and FY2025 are also in progress
•

60
58

60

Mid to small sized projects are handled by
the distributors, large projects by FINDEX

55

•

50

Accelerate sales for administration offices in

hospitals, leveraging our existing sales

36

40
26

channel in medical industry
40

25

•

21

“DocuMaker Office” for medical facilities met
the requirements of the Electronic

20
11

30

Bookkeeping Law and has obtained JIIMA
certification. Aiming to expand sales,

020

combining it with hospital function evaluation

support(20)

10

Key Initiatives
0

(40)
Q1

Q2

Q3

Q4

Q1

Q2

Q3

FY22/12

FY23/12Net sales

Operating profit

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

•

Strengthen recruitment and training efforts to

FY22/12

FY23/12enhance our internal resources for further

Monthly usage revenue

Othersbusiness expansion•

Accelerate collaboration with other company’ssolutions to enhance product value

🄫2024 FINDEX Inc.

11

Health Tech Business••Restructuring the sales structure for GAP as struggled for domestic
sales
Started the first shipping of OEM product of GAP to the EU, Middle
East and North Africa
GAP/GAP-screener
Cumulative Numbers of Sales andDomestic Demonstrations

Net Sales andOperating Profit(¥ Million)(Units)

60

160
43
37

40

Domestic Sales• Facing challenges in market penetration due to
new technology. Restructuring our sales andmarketing strategies• GAP/GAP-screener number of units sold in
FY2023: 14• Currently training GAP specialists at the
distributors• Creating a new market among checkup facilities
together with Toyota Tsusho Corporation,
focusing on the early detections of eye diseases• Conducting additional studies with Kyoto
University. Posted an academic paper to a journal(currently in review)

140

Overseas Sales

120• Made an initial shipping of GAP - 46 units to theEU, Middle East and North African countries, as
OEM product of our sales partner Rexxam, under
the name FieldNavigator

27
20
20
1

4

3

100

2

0

• Continuing the preparations for medical
approvals in India and Indonesia to start sales

80
(20)

60

Key Initiatives

(40)

40
(60)

• Inquiries from users are increasing. To maintainthis momentum, we are continuing our research
aimed at adding various ophthalmic examination
functions

20

(80)

0
Q1

Q2

Q3

Q4

Q1

Q2

Q3

FY22/12

FY23/12Net sales

Operating profit

Q4

Q1

Q2

Q3

Q4

2022

# of demonstrations

Q1

Q2

Q3

Q4

2023

# of total units sold

*Only the numbers of demonstrations by Findex are aggregated🄫2024 FINDEX Inc.

• GAP has been selected for a project by AMED
(Japan Agency for Medical Research andDevelopment), as it can be used to detect not
only visual field abnormality, but also MCI.
Possibility of applying it to tests for other mental 12
disorders and brain diseases

FY2023 Strategies Evaluation
FY2023
Objectives

MedicalBusiness

PublicSectorBusiness

Health TechBusiness

🄫2024 FINDEX Inc.

Establish a Consulting
Department to launch a new
business model, providing
consulting services for
medical facilities
In addition to promoting
package sales, establish a
new business model

Roll out a new business fromthe project to accelerate salesof DocuMaker Office,targeting municipalities andpublic organizations

Continue to cooperate withsales partners to catch up
domestic /overseas sales of
GAP, aiming to install 260
units in and outside Japan

Evaluation✔
✔

Details on Evaluation• The newly established consulting department
largely contributed to the profit• Cross-selling progressing favorably primarily
to large hospitals• Delivery of comprehensive services including
maintenance increasing• Improved profit margin by prioritizing sales ofexisting packaged solutions with low
implementation costs

Our Challenges for FY2024• Overcome an increase in personnel costs• Proactive recruiting and retention• Acceleration of sales for cloud-based solutions
to large hospitals• Appropriate price revision• Achieved profitability for the full year,
surpassing expectations with a faster-thananticipated startup• Bidding for municipality projects progressing
as participating actively• Revenue from the monthly usage increasing• Product recognition improving as number of
implementations increasing• Secured human resources to support
business expansion• Hiring the right talents for further businessexpansion• Establishing relationships with distributors andsales partners to explore markets for mid-sized
projects• Enhancing collaboration and integration withsolutions from other companies• Overseas shipping of GAP started but the
project is still behind the planned schedule• The measures to enhance recognition andawareness did not progress as anticipated• Continuing R&D to maximize utilization of
GAP• Total number of units sold within FY2023:
60 units• Improve awareness and product understanding
from the market• Rebuilding of sales structure, including thetrainings of distributors and sales partners• Initiatives for sales in India and ASEAN region• Publishing papers in academic journals

13

FY2024 Financial Guidance•

Anticipate steady business expansion compared to the previous year•

Focusing on proactive investment in human resources and increasing capital to support business growth•

Intend to increase investments but the dividend increase policy remains unchanged

FY2023 Actual(¥ Millions)

AmountFY2024 Guidance
AmountYoY(%)Net sales

5,191

5,782

+11.4%

Operating profit

1,496

1,574

+5.2%

Recurring profit

1,527

1,591

+4.2%

Profit attributable to owners of theparent

1,059

1,097

+3.6%

Earning per share (Yen)

41.31

42.79

－

Interim dividend (Yen)

4.00

7.00

－

Year-end dividend (Yen)

9.00

8.00

－

Full-year dividend (Yen)

13.00

15.00

－

Dividend per share

🄫2024 FINDEX Inc.

14

FY2024 Business Strategies for Achieving Performance Goals 1/2•

Achieve stable profit growth through improved productivity and strengthened sales capabilities•

Focus on investing in talent for long-term value enhancement and growth•

Explore M&A opportunities and implementing various strategies for business expansion.

Improvement of
Productivity• Enhance employee engagements• Appropriate workforce allocation• Promotion of internal digitalization through in-house software for an
upgraded work environment

Strengthening Sales
Capabilities• Strengthen relationships with agents and sales partners• Enhance collaboration with other companies' systems in Public Sector Business• Actively recruit and maintain employment• Address the rise in personnel costs

Stable Profit Growth• Accelerate the deployment of cloud products in large hospitals• Reflect the increase in personnel costs in product prices (aiming for an
average of 20% up)• Reinforce and expand existing business through M&A• Expand overseas sales of Claio• Expanding medical information consulting into other industries

🄫2024 FINDEX Inc.

15

FY2024 Business Strategies for Achieving Performance Goals 2/2【Challenges】 Struggling to secure⇒ Proactive Investments in HR for long-Term growth is essential【Plans】

・Designing to hire 20 new employees within FY2024
・ Promoting diverse workstyles
・ Improving employee engagement to reduce turnover:Enhancing retention through initiatives such as support for parental leave
Encouraging vacation usage through initiatives like refresh vacations and sabbatical leave
Promoting reskilling and expanding the scope of certification incentive programs【Strategies】 ・Utilization of WFH scheme for offshore and remote employees
・Shorten working hours to 7.5 hours with additional base pay increases
・Actively promoting recruitment outside metropolitan areas(¥ Millions）(¥ Millions）
7,000

8.0

6,000

7.0

Total Per Capita Personnel Expenses:

5,000

Anticipating a consecutive increase of

4,000

6.0% for two years

3,000

aroundAiming for business expansion

🄫2024 FINDEX Inc.

6.0
5.0
4.0
3.0

2,000

2.0

1,000

1.0

0

0.0

Sales

Per Capita Personnel Expenses

16Trends and Topics in the Medical Software Industry 2023-2024「 Medical DX Reiwa Vision 2030 」
Establishment of a National Medical
Information Platform

Standardization of EMR Information(Promotion across all medical institutions)

Digitalization of Medical Treatment Fee
Amendment

Medical AI / Big Data

Cloud-Based Services

Telemedicine•

Generally, all medical institutions and pharmacies areconnected to the Online Certification System for
Healthcare→Laying the Groundwork for Data Utilization• The implementation of the Next Generation Medical
Infrastructure Act will expand the collection andutilization of diverse real-world data
• In addition to the Health Insurance Claims Data currently
being traded in the market, it will be possible to handle
more accurate medical data such as medical records inthe future
Advantages for hospitals and healthcare industry:• Support for diagnosis, treatment, and surgery• Applications for disease and nursing care prevention andreduction of medical costs• Development of new markets via data accumulation•

Cloud-based operations with high security levels are
now possible without compromising the "three principles
of electronic storage“• In small and medium-sized hospitals and clinics, the useof cloud-based products is expanding, while in large
hospitals, on-premises system operation is still common→The widespread adoption of cloud storage will likely
accelerate as its market prices decrease• Utilizing the cloud for the Construction of a Regional
Collaboration Network
Advantages for hospitals and healthcare industry:• Efficient information sharing enables smart coordination
with other facilities• No need for extensive capital investment, server room
allocation, or regular system updates•

The Japanese gov’t targets all hospitals and pharmacies
to implement e-Prescriptions by the end of 2024 (Current
implementation rate is 1%)•

The Japanese gov’t plans to phase out healthinsurance cards in fall 2024 and integrate them into
the national My Number identification system•

Medical facilities need to install Online Certification
System for Healthcare and issue HPKI cards prior to theutilization of e-Prescriptions•

80% of the hospitals and pharmacies in Japan had
already started the new operation utilizing Online
Certification System for Healthcare•

Optimization of dispensing and counseling tasks•

Prevention of duplicated prescriptions by centralizing
management of prescribing information•

Contribution to telemedicine and home care services

The 2022 revision of medical fees has led to an increasein the insurance points for initial consultation fees to 87%
of in-person medical care, resulting in a rapid increase infacilities that have introduced telemedicine• Meanwhile, there is a limited number of medical facilities
that offer telemedicine services, and large hospitals arehesitant to fully implement them
→The applications are limited, primarily in second opinion
outpatient settings• Emergence of teleoperated surgical robots
Advantages for hospitals and healthcare industry:• Expanding the choice of medical facilities, improving
healthcare systems in remote areas and to address
medical service disparities• The reduction of congestion and infection risk due to adrop in patient visits

Better Working Environments

Myna Insurance Card

Electronic Prescriptions

Advantages for hospitals and healthcare industry:••

Starting next April, overtime work for employedphysicians will be limited to no more than 960 hours
per year→Proper management of working hours is necessary•

Digitalization has also been accelerated for
improvement of efficiency in medical practices

Advantages for hospitals and healthcare industry:

Advantages for hospitals and healthcare industry:••

Improvement in long working hours of physicians•

Sales opportunities for attendance management
solutions•

Enhanced healthcare through centralized medical
history management
Reduction of administrative costs

Domestic Market Size of Medical Software : approx. 500 billion yen*
🄫2024 FINDEX Inc.

* excerpted from NIKKEI COMPASS October 3, 2023

17

Value Creation Mapping Looking Ahead to 2025
Enriching Society with Technologies and Creation
Digitally Connecting Medical
Communities

Equal Access to Medical Services

Community-Based
Integrated Healthcare

Developing New Technologies for
Healthy Livings•

Driving digitalization in and outside medical facilities, offering solutions that revolutionize the business models in
the healthcare sector•

Proficient in processing and handling a variety of patient data owned by large hospitals•

Providing consulting as software specialists and applying in-house technology to products for the public sector
and medical devices

Cloud-based Medical Software

Connecting medical facilities and individuals
through cloud-based services

Local
gov’tsConsultation
Service
Elderly care

DocuMaker
OfficeHome care

Domestic

Cyber security
Building a platform for securely managing andexchanging data

Check-up
facilities

Pharmacy
Patient

Enhancement offunctions throughAI-generated
featuresUtilization ofcollaborative
data

Promotion of integrated regional care andcollaboration in regional healthcare

On-premises Medical Software
Hospital

Overseas

Further expansion of flagship product sales

🄫2024 FINDEX Inc.

Claio

C-NoteREMORA

E-prescription

Expansion of the
document
management system
in line with national
policies

My Number
healthinsurance card

Gaze Analyzing
Perimeter
Utilization of in-houseowned visual field data

DocuMaker
GAP

Cloud-based/
On-premises
Medical Software

Expanding domestic
and overseas sales

RPA tool
DigiWorker

Establishment andconsolidation of thestock business
Utilization of
medicaltreatment data

Implementation of cloud-based management analysis・
information linkage for medical data・provision of medical AI information technology

Hospital-Centric
Healthcare

Public Document
Management System

Establishing a new
standard for visual
field testing

Implementation ofcontrast sensitivity
testing

GAP-screener

R&D and market
launch as a diagnostic
device for MCI

18

Capital Costs & Stock Value-Concious Management•

ROE (Return on Equity) for FY2023: 23.8％
We conservatively assume a capital cost of around 10%(considering factors such as significant stock price volatility in the past, resulting in a high stock beta)→As a result, the ROE for 2023 exceeds the capital cost, and the equity spread remains positive•

Aiming to maintain and enhance ROE, efforts are directed towards improving profit margins
and asset efficiency- Creation of new business through the utilization of research and development achievements- Increase in profit margins through investment in talent development to enhance added value- Effective utilization of capital and capital policy through investments and M&A- In case effective investments cannot be executed, consider the stock price situation and implement shareholder returns

ROE ＝

Net Profit Margin23.8 ％*

20.4%
Improving Gross Profit Margin
・Enhancement of value-added services
・Expansion of packaged sales
・Utilization of distributors
・Business model modification

Reduction in Sales and Administrative
Expense Ratio

Cost of Equity

6.4～7.9 ％🄫2024 FINDEX Inc.

Total Asset Turnover

＝

0.95x

Expanding Financial Leverage
・Effective use of loans with an eye on
M&A (Mergers and Acquisitions)
Optimizing Shareholder’s Equity
・Share buybacks
・Increase in dividends

Improving Turnover Rate・Accounts receivable
・Fixed asset turnover ratio

+

Beta

1.2～0.96

Financial Leverage

1.23x

Expanding Net Sales
・Expansion of customer base・Creation of new businesses
・Utilization of M&A

Risk-Free Rate of Return

1.0～0.6 ％**Equity Risk Premium

5.7～6.1％
19

Mid-Term Business Plan「Vision for 2025」Progress Report••

Towards the achievement of the mid-term business plan, the Medical Business is progressing smoothly
The Public Sector Business is exceeding expectations, while the Health Tech Business is lagging behind“Enriching Society with Technologies and Creation”
Expansion of business scale
through M&A

Reconceptualize our presence asan R&D-oriented company
FY2022（¥ Millions）

Net sales
Medical Business
Public Sector Business
Health Tech Business

Recurring profit
Recurring profit margin

Annual cash dividends/yr（yen）
Payout ratio

Strategy
Progress

FY2024FY2023

Actual（vs. plan）

4,541
4,352
121
69
1,091
23.2%
9.50

(108.7%)(103.4%)
-

5,191
4,935
187
68
1,527
29.4%
13.00

(102.5%)(104.9%)(116.9%)(34.0%)(114.8%)
-

33.7%

-

31.5

-

Medical Business• Proactively cross-selling software to existing customers

Acquire and retain the right talent

FY2025

Mid-Term Business Plan
5,754
6,330
5,066
207
480

5,320
330
680

1,710

2,100

29.7%

33.2%

15.00

18.00
31.2%

Public Sector Business

11.7%
6.9%
39.7%
114.4%
24.4%
23.7%
-

Health Tech BusinessSet our “DocuMaker Office” the public records
management solution as the core product• Overseas: Promotion in the EU, Middle East, andNorth African countries• Promptly penetrate the market with self-developed
data infrastructure which support medical digitalization• Focusing the target on municipalities, publiccompanies, and external organizations of ministries
and agencies• Domestic: Establish a consulting sales system atmedical equipment dealers• The effect of cross-selling: The average number ofpackage introductions per facility has increased from4.30 to 4.61 in large medical institutions• Combining direct and distributor sales, increased bidwins, elevated customer satisfaction, and exceeded
the FY2023 plan with a 116.9% achievement rate

• FY2023 achievement rate is 34.0% due to sluggish
sales (FY2023 domestic: 14unites, overseas: 46units)• Developed and introduced the cloud service "PiCls"
product targeting large medical institutions, withexpectations of increasing adoption in the future• DocuMaker Office for medical facilities met therequirements of the Electronic Bookkeeping Law
and has obtained JIIMA certification• Extensively install packaged solutions via distributors
to achieve higher profit margin•

CAGR
FY2025/FY2022⇒Restructure of business to sustain continued growth• ⇒Strengthen partner sales ＆ securing personnel
🄫2024 FINDEX Inc.

•

R&D of features to further enhance the usability of theequipment, considering contrast sensitivity tests forcataract examinations and similar applications⇒Striving for early profitability, restructure thebusiness model, including sales structure andmedical approval schedule20

Sustainable Management Policy / ESG Initiatives〈Topics on Sustainability for FY2023〉◼ CDP questionnaire submitted◼ TCFD initiatives: Identifying key risks and opportunities; assessing business impacts◼ Submitted responses for Corporate Sustainability Assessment (CSA) conducted by S&P Global◼ Updated our Sustainability webpages (https://findex.co.jp/en/sustainability/index.html)
Environment（E）
Support and engage in international initiatives for climate change〈Emission Calculations for FY 2022 and Future Reduction Goals〉
Scope1,2
In accordance with the SBT 1.5℃ target, we will annually reduce GHG emissions by 4.2% comparedto the previous years.
FY2022（Actual）

GHG Emissions

The aim is to achieve a 50% reduction in emissions by 2030, using
a sales-based unit target (Emissions/Sales).
GHG Emissions

FY2022（Actual）

Scope1

13 t-CO2

10 t-CO2

Category 1

2447 t-CO2

Scope2209 t-CO2

148 t-CO2

Category 2

164 t-CO2

Category 3

36 t-CO2

Category 4

4 t-CO2

Category 5

10 t-CO2

Category 6

289 t-CO2

Category 7

148 t-CO2

Category 9

5 t-CO2

Category 11

965 t-CO2

Category 12

27 t-CO2（Unit：t-CO2)

250

FY2030（Target）

Scope3Emission reduction targets for Scope1 and 2 ~2030
222

213

204

200

196

187

179

172

165

158

150

Scope3

100
50
0
2022

2023

2024

2025

Scope1
🄫2024 FINDEX Inc.

2026

2027

Scope2

2028

2029

2030

*There are no emission sources for Scope 3, Categories 8/10/13/14/15.

21

Sustainable Management Policy / ESG Initiatives
Social（S）

Governance（G）

Contribute to reducing disparities in health care and improving
well-being of people

Ensure good corporate governance and foster a diverse and inclusive
workplace culture• Strengthen information security• Increase access to early detection of glaucoma and other eye
diseases by promoting the use of GAP, an in-house developed
perimeter

External▶ All employees are required to participate in an annual information security seminarand to respond to a security checklist on a monthly basis▶ Visual field tests using the GAP/GAP-screener gaze analysis
type of perimeter are being performed at health screening sites
sponsored by local governments• Realize a framework that allows any person to receive smoothand efficient medical care at large hospitals, introducing
telemedicine and utilizing location information• Foster an organizational culture that can withstand changes in the external
environment by facilitating diversity in hiring and promotion• Supporting employees in developing their talents in line with their career goals
through internal programs, making necessary adjustments for promotions▶ Annual stress checks are conducted for all employees▶ Introduced a fully remote work option for employees based in
distant areas and overseas▶ Increase the proportion of women in managerial positions to 9% by 2026 and raise
it to 18% by 2030

FY2022（Actual）

FY2023（Actual）

FY2025（Target）

Total number of visual field tests
performed with GAP at checkups
organized by local governments

7,070

8,676

10,000Total number of GAP units sold

35

95

1,550

Our benchmark initiatives

Total number of facilities implemented
Medical Avenue▶ Commitment is made to eradicate harassment, strengthen the protection of
personal information, promote work styles that are in compliance with the Labor
Standards Act, and enhance mental health support for full-time employees,
contract workers, and part-time staff▶ Annual participation in compliance-related e-learning is mandatory for all
employees• Create and maintain a healthy work environment with high levelsof employee engagement

Internal• Ensure compliance

FY2022（Actual）

FY2023（Actual）

FY2025（Target）1０0Security Checklist Response Rate

100％

100％

100％

e-learning participation rate

100％

100％

100％

% of foreign employees

0.3％

0.98％

1.5％

Our benchmark initiatives# of incidents related to information security

1

1

5

Employee Survey Response Rate

96%

96%

96%

% of female managers

3.8%

8.6%

8.0%

Stress Check Survey Response Rate

88%

86%

100%

% of independent outside Directors

33.3%

37.5%

44.4%

🄫2024 FINDEX Inc.

22

Updates on our Plan to Comply with the Continued Listing Criteria of the Prime Market•

As of the end of December 2023, compliant with all listing maintenance criteria•

The average stock price in the past three months has remained stable in the 900 yen range, meetingthe criteria for market capitalization of circulating shares*

Number ofshareholders

Number of
tradable shares(units)Tradable share market
capitalization(¥ Billions)Tradableshare ratio(%)

Daily average
trading value(¥ Millions)Continued listing criteria

800

20,000

100

35

20

Status of the Company asof December 31, 2022

5,738

138,094

77.6

51.8

70

Eligibility as ofDecember 31, 2022

✔

✔

×

✔

✔

Status of the Company asof December 31, 2023

4,290

139,288

125.6

52.3

80

Eligibility as ofDecember 31, 2023

✔

✔

✔

✔

✔

🄫2024 FINDEX Inc.

*Determined using our proprietary calculation

23

Appendix

🄫2024 FINDEX Inc.

Appendix

Net Sales•

Medical Business and Public Sector Business showed steady growth, net sales hits the highest on record•

Significant net sales increase YoY, within initial plan range+11.3%

Revenue by Quarterly（¥ Millions）• Net sales increased by 11.3% YoY

2,000
1,717

1,800
1,631

1,629

1,542

1,600

1,463

1,455

1,400
1,200

1,265
1,170

1,252

1,225

751

730

• Investment interest in solutions to
support medical practices for improving
working environment and hospital
operational efficiency shows continued
recovery

997

969

943

1,000
800

• Continued recovery trend from the
COVID-19 restriction period

1,108
1,038

766

707

• Medical Business led this financial
performance

629
600
400
200
0
Q1

Q2

Q3

FY19/12

Q4

Q1

Q2

Q3

FY20/12
Medical Business

Q4

Q1

Q2

Q3

Q4

Q1

FY21/12Public Sector Business

Q2

Q3

Q4

FY22/12

Q1

Q2

Q3

Q4

FY23/12

Health Tech Business* The "Accounting Standard for Revenue Recognition“ has been applied from FY2022* Business segments changed from FY2023. As for FY2022 figures are reallocated based on the change made.
Until FY2022 Public Business was included in Medical Business. Figures above are unaudited
🄫2024 FINDEX Inc.

25

Appendix

Gross Profit Margin and CoGS•

Significant revenue growth and high gross profit margin•

Sales of packaged solutions and cross selling in Medical Business contributed
Gross profit margin and CoGS（Fixed/Variable）（mil Yen）
2,000

80%
69.5%69.7%

1,800

70%

64.5%
1,600

63.0%

62.6%

60.2%

58.2%

55.5%

56.7%

55.3%

55.1%

60%

1,400
48.8%

48.5%

53.6%

57.1%

55.4%

43.7%

1,000

40.7%

• No major changes in fixed costs.
Variable costs such as outsourcing fees
remained marginally increased

50%

44.2%

1,200

• Significant improvement in gross profit
margin to 69.7% in Q4

40%

40.1%

• Expanding high profit cross selling andconsulting services contributed to
Medical Business+23.2％

800

30%

600

20%
400
10%

200

0

0%
Q1

Q2

Q3

FY19/12

Q4

Q1

Q2

Q3

FY20/12

CoGS(fixed)

Q4

Q1

Q2

Q3

Q4

Q1

FY21/12

CoGS(Variable)

Q2

Q3

Q4

Q1

Q2

FY22/12Gross Profit

Q3

Q4

FY23/12Gross Profit Margin* The "Accounting Standard for Revenue Recognition“ has been applied from FY2022

🄫2024 FINDEX Inc.

26

Appendix

SG&A•

Increased in SG&A expenses driven by rising personnel costs, yet within control•

Personnel and advertising expenses increased by normalized sales operation
Quarterly Results on SG&A expenses（￥ Millions）• Personnel costs increased due tothe strengthening of hiring

600

497
500
457

451
422
400

399

400

419

421

396

431

426

Q4

Q1

453

• Advertising costs increased asacademic congresses andexhibitions have returned to theconditions before the COVID-19
pandemic period, resulting in an
increase in advertising and travel

392

376
351

357

Q2

Q3

• The number of employees at the endof Q4 is 303

300

200

100

0
Q1

Q4

Q1

Q2

FY20/12
🄫2024 FINDEX Inc.

Q3

Q4

Q1

Q2

FY21/12
Personnel

R&D

Q3

FY22/12Advertising

Travel

Rent

Q2

Q3

Q4

FY23/12
Others27

Appendix

Operating Profit•

Q4 operating profit landed at one of the highest levels•

Medical Business drove earnings. Public Sector Business maintained profitability, and the loss has been
diminished in Health Tech Business
Quarterly Performance on Operating Profit（¥ Millions）
900
800

700
651

700
596

540

600

• Medical Business, which accounts forthe majority of profit, saw a significant
increase in profit in Q4

451
500
399

370
400
284
300

214

288

217

128

200

• Public Sector Business achieved
operating profit in the full fiscal year

109
85

38
100

32

0
(10)

(100)

(44)
(98)

(127)

(200)
Q1

Q2

Q3

Q4

Q1

FY19/12
Medical Business

Q2

Q3

FY20/12

Q4

Q1

Q2

Q3

Q4

Q1

FY21/12Public Sector Business• Significant increase in Q4 operating
profit achieved by increased revenues
and improved gross profit margin

Q2

Q3

Q4

Q1

Q2

Q3

FY22/12

FY23/12

Health Tech Business

Operating Profit

Q4• There was a delay in sales in Health
Tech Business, widening the deficit
amount. But the same has been
narrowing YoY as EMC Healthcare Co.,
Ltd. became an equity method affiliate
in July 2022

* The "Accounting Standard for Revenue Recognition“ has been applied from FY2022* Business segments changed from FY2023. As for FY2022 figures are reallocated based on the change made.
Until FY2022 Public Business was included in Medical Business. Figures above are unaudited
🄫2024 FINDEX Inc.

28

Appendix

Backlog and Orders (Excluding Maintenance)•

Amount of backlog is at one of the highest levels•

Besides the strong order demand, the expedited timing of orders is a significant factor（¥ Millions）
2,000
1,894
1,795

Maintenance
30%

1,800

Composition
ratio of sales

1,600

1,429

1,413
1,400

1,346

1,200

1,141

1,263
1,197

1,164
1,122
1,071

1,110
1,059
958
917

956

1,000

908

969
933

841
800

846
834

829

1,157

Q3

Q4

1,041
979

962
909

1,159
1,114

799

749
690
637

688
617

613

600
461
400

352

271
200

0
Q1

Q2

Q3

FY19/12

Q4

Q1

Q2

Q3

Q4

Q1

Q2

FY20/12

FY21/12Backlog

🄫2024 FINDEX Inc.

Q3

Orders

Q4

Q1

Q2

Q3

FY22/12

Q4

Q1

Q2

FY23/1229

Appendix

Order-to-Acceptance Timeline•

The adoption of new revenue recognition standards has led to longer order-to-acceptance periods•

The increase in orders and the second-half emphasis in the initial guidance are partially due to this change
in practice•

From the outset, FY2023 was projected to have higher earnings in the second half of the year•

Order placement timings have shifted to be earlier due to changes in commercial practices•

Some of the sales from large-scale projects in Q1FY2024 will be recognized in Q4FY2023 due to the adoption of the new accounting standard

Revenue composition ratio changes by order placement period
More than
12 months ago

More than
12 month ago

More than
12 months ago

9-12 months ago

9-12 months ago
3 months ago

3 months ago

3 months ago
6-9 months ago

9-12 months ago

FY2021

FY2022

3-6 months ago

FY2023

6-9 months ago
3-6 months ago

3-6 months ago
6-9 months ago*Sales by distributors, small orders, support and maintenance are excluded*Net sales are not adjusted to the "Accounting Standard for Revenue Recognition“. Ratios above are calculated based on the to tal amount of acceptance
🄫2024 FINDEX Inc.

30

Appendix

Net Sales FY2011-2023

・Support sales are steadily increasing along with the growth in the number of users.
（¥ Millions）
6,500

5,500

5,191
4,969
4,541

4,500

4,282

4,005

3,603
3,500
2,864

3,288

3,312

2016

2017

2,952

2,383

2,500

1,988
1,543
1,500

500

2011

2012

2013

2014

SupportOutsourced R&D and Others

2015

2018

2019

2020

SoftwareHardware

Health Tech

2021

2022

2023

(500)

🄫2024 FINDEX Inc.

EMC Healthcare

Fitting Cloud

Adjustment31

Appendix

Updates and Highlights FY2023
Changes made in reporting business segments

Jan

A subsidiary Fitting Cloud Inc. released three
new solutions
Changes made in organizational structure

Changed to three segments: “Medical Business,” “Public Business” and “Health Tech Business”••••

Weberi: Internet Browsing Virtualization Service
Bricks: Cloud-based general-purpose EDC/Questionnaire system
Valloon: Closed-cloud data storage
System Development Department divided into “Software Package Development” and “Product
Planning & Development”• Established “Consulting Department” “Public Solution Department” ”Customer Support”

Revision of Medium-Term Business Plan

The targets were revised due to changes in the business environment and delays in the schedule
for obtaining European Medical Device Regulation

Introduced a Restricted Stock Compensation Plan

Strengthen the link between board of directors' compensation and stock value to further promotevalue sharing with shareholders

Released a new product AAdE-Report

An electronic tracing report service to digitally connect hospitals and pharmacies with patient
information

Apr

Released a new product Remotalk-CloudApplication for Sharing Medical Examination Information RemotelyJun

GAP presented at 10th World Glaucoma
Congress®

Perimeter GAP presented as FIELDNavigator under Rexxam's OEM brand in a congress held in
Italy

Sep

Launched a new brand 'PiCls'

A brand specializing in cloud-based services
Our product lineup includes:
・ AAdE-Report
An Electronic Tracing Report Service
・ On-Shin
Online Medical Consultation Support System
・ Medical Avenue
Next Generation Patient Guidance Application
・ Booking AssistantOnline Appointment Reservation Service
・ Referral
Medical Information Transfer System

Oct

Co-hosted a Luncheon Seminar on 6th October
2023 at the 77th Annual Congress of Japan
Clinical Ophthalmology

Dr. Masahiro Miyake from the Department of Ophthalmology at Kyoto University Graduate Schoolof Medicine, Kyoto University Hospital, chaired our seminar titled “Cutting -edge Practice andInsights: Eye-tracking Perimeter and Data Preservation of Electronic Medical Records ( EMR).”A subsidiary Fitting Cloud Inc. joint researchusing generative AI has commenced

The joint research has commenced for reducing the workload of document creation tasks in theclinical setting by utilizing generative AI with Kyoto University Hospital

Started overseas shipping of GAP

Shipping of GAP to the EU, Middle East and North Africa started as FIELDNavigator underRexxam's OEM brand

Feb
Mar

Nov

Dec Launched Cloud Backup Service
🄫2024 FINDEX Inc.

Cloud Backup Service enables small hospitals and clinics to securely store and manage their
medical data, as well as documents that need to be kept in facilities, in a cloud storage system

32

Appendix

Our Market ShareAn Overwhelming Market Share of

approx.

75%

in National University Hospitals
Market share in large hospitals with more than 400 beds ＝ approx. 40％

Other hospitals and clinics ▶ Over 1,500 facilities*Calculation changed as categorization of large hospitals revised from 500 or more beds to 400 or more beds following the revi sion of medical service fees in 2018
*Consumers of one-time products are excluded from 2021
*Reference: Ministry of Health, Labor and Welfare 2021 Survey of Medical Facilities (static and dynamic) and Summary of Hospi tal Reports（ As of December 31, 2023 ）🄫2024 FINDEX Inc.

33

Appendix

Changes in the Number of Customers - Medical solutions（ # of Facilities ）Categories

Q4 FY2022

Q3 FY2023

Q4 FY2023

QoQ

Large hospitals (>400 beds)

288

290

292

+2

Medium sized hospitals (100 to 399 beds)

309

317

316

-1

Small hospitals (20 to 99 beds)

84

82

83

+1

1,176

1,227

1,241

+14

54

57

55

-2

1,911

1,973

1,987

+14

Clinics (<19 beds)
Other medial-related facilities

Total（ As of December 31, 2023 ）🄫2024 FINDEX Inc.

34

Appendix

Changes in Numbers of Employees

Changes in Numbers of Employees

Employees Composition Ratio(# of Employees)
350

300

286

289

293

301

303
293

295

296

301

300

309

306

Exectives
2%

303

263
250

232

Administration
18%

240

Programmers
28%

Customer
Service
13%

200

150

Sales・Software Developers
39%
100

50

Exectives

Programmers

Sales・Software Developers

Customer Service

Administration

Internal Audit0
2016 2017 2018 2019 2020 2021 2022 2023

Q1

Q2

Q3

2022

Q4

Q1

Q2

Q3

Q4

2023
Note: This includes 16 part-time/temporary staff

Employees

🄫2024 FINDEX Inc.

Part-time & Temporary（ As of December 31, 2023 ）35

Medical Business - Our Flagship Solutions

Appendix

Cloud Solution

On-Premise Solution

Hospitals

Clinics
Medical Big Data Search System

Integrated Browsing System

UniversalSearcher

ClaioDashboard

PDI Import / Export
Solution

PDI+MoveBy

Network Imaging System

Claio

Progress Note System

C-NoteHIS
Progress Note System(Hospital Information System)

Document Integrated
Archiving System

FAX ReferenceManagement Solution

C-ScanConnectFAX

C-NoteMedical Document
Management System

Medical Information
Remote Sharing Application

Electronic
Medical Record

Perinatal Information System

DocuMaker

Remotalk-Cloud

Electronic Medical
RecordREMORA

MapleNote

Radiological Information
System

ProRad RIS

Patients

Network Imaging System

Claio
Radiological Reporting
SystemNext Generation Patient
Information Application

ProRad RS

Medical Avenue
Care
Facilities

Tests & Examinations
Telemedicine System

On-shinAccounting and Administration
Medical Document
Management System

Document Management
System

RPA Tool for
Medical Facilities

Electric Tracing
Report Service

DocuMaker

DocuMaker Office

DigiWorker

AAdE-Report

Pharmacies

Local
Governments

Medical Community
🄫2024 FINDEX Inc.

36

Appendix

Financial Indicators
ROIC and Equity Ratio

ROE and DuPon Analysis
35%

140%

35%

95%

30%

90%

25%

85%

20%

80%

15%

75%

130%
30%
120%
25%

110%
100%

20%

90%
15%
80%
10%

70%
FY14
ROE

FY15

FY16

FY17

Net profit margin

FY18

FY19

FY20

FY21

Total asset turnove(RHS)

FY22

10%

70%

FY23

FY14

FY15

FY16

FY17
ROIC

Financial leverage(RHS)

Cash Flow（¥ Millions）

FY18

FY19

FY20

FY21

FY22

FY23

Equity ratio (RHS)

Marginal profit Ratio（¥ Millions）

100%

3,500

1,400

90%
3,000

1,200

80%

2,500

70%

1,000

2,000

60%

800

50%

1,500
1,000

40%

600

30%

400

500

20%

0

10%

200

0%

(500)

0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4(1,000)FY19/12
FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY20/12

Marginal profit ratio

Operating C/F

🄫2024 FINDEX Inc.

Investment C/FFree C/F

FY21/12

FY22/12

FY23/12

FY23
Variable cost ratio

Break-even sales

Cash

37

Progressive Software Creators
Always have, Always will.

🄫2024 FINDEX Inc.