Company Brochure

Vol.2

Overview
Merhälsa has three main lines of business, Medicine, Care, and Child Care, which it operates with 135 offices in the Tokyo
metropolitan area. The Medicine business primarily runs dispensing pharmacies nearby major hospitals, the Child Care businessmainly runs licensed nurseries, and the Care business provides all levels of care service from in-home to facility services.
Data as of October 1, 2021

Capital¥300 million

Total issued
shares2,240,000

Fiscal year-end

March 31

No. of employees

1,657 (including part-time employees)

Miahelsa Holdings Corporation

Name
Head office
Representative
Establishment

3-19 Nakano-cho, Ichigaya,
Shinjuku-ku, Tokyo, Japan
Isamu Aoki
President and Representative Director

October 1, 2021

(Miahelsa Corporation)

Data as of October 1, 2021

Data as of January 15, 2021

Business
division

Other

Medicine

Child Care

Care

Tokyo

36 pharmacies

24 nurseries

31 locations

3 stores

Tokyo vicinity

4 pharmacies

10 nurseries

29 locations

−

Total

40 pharmacies

34 nurseries

60 locations

3 storesService area

(Food)

Not including head office or division headquarters

Recent Sales Ratio
Merhälsa Corporation All Rights Reserved.

Approx. 50%

Approx. 20-30%

Approx. 20%

Approx. 5%2History
・We honor our founding spirit, “building happiness for people.”・We run sustainable businesses by adapting to the change of time and the demanding needs of society.
・We are recognized for running the lines of businesses capable of achieving the Integrated Community
Care System promoted by the government.
Sep. 1984

Established Japan Life Science Research Institute Co., Ltd. (currently Merhälsa). Launched
Medicine division.

Aug. 1999

Launched Care division to solve the great challenges of Japan’s aging society.

Mar. 2011

Launched Food division with integration of a group company.
(In 1966, we established the food wholesale company “Kyushoku Fukyu Kai Co., Ltd.” to provide
children with nutritious meals.)

Apr. 2011

Launched Child Care division to take on the social issue of children on the waiting list for nurseryschools, accelerated by women’s increased participation in the workforce.

Sep. 2011

Our integrated facility, which residences with health and welfare services for the elderly, andpharmacy operating in one complex, was selected as the model business of “Promotion Project ofResidential Stability for Elderly Persons” selected by the Ministry of Land, Infrastructure, Transport
and Tourism. The complex attracted numerous government associates and foreign officials, leading
to their observation visits.

Apr. 2019

Company name changed from Japan Life Science Research Institute Co., Ltd. to Merhälsa
Corporation, meaning “greater health” in Swedish.

Mar. 2020

Listed on Tokyo Stock Exchange JASDAQ market.

Jul. 2020

Acquired all shares of Tosho Shoji Co., Ltd., which operates licensed nurseries.

Merhälsa Corporation All Rights Reserved.

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Corporate Philosophy
Merhälsa’s corporate philosophy is to “Meet thechallenges posed by a declining birthrate andan aging society, and make the community
cheerful and vibrant.” For that reason, we
differentiate ourselves by capturing the market
opportunities resulting from a declining birthrate
and an aging society, and by providing our
expertise across our lines of business. We also
aim to establish a framework for implementing“the Integrated Community Care System”
endorsed by the government in the Tokyo areaand support the affluent life of community.
“The Integrated Community Care System” is agovernment policy, referring to the scheme forthe communities to establish an environment
capable of comprehensively providing medical,
nursing care, childcare, and living support, andpositioning the residence as the center of thecommunity. This scheme is the current
requirement for urban development, housing
renovations, and other town planning projects,
and our ability to accommodate such needs
gives Merhälsa a major advantage.

Merhälsa Corporation All Rights Reserved.

“The Integrated Community Care System” concept

Medicine

Care

Hospitals
Dispensing pharmacies

Residence

In-home service
Facilities service
Prevention &Lifestyle Support
Senior welfare centers

Individuals’ homes
Senior residences
Group homes
Food provided tonurseries & carefacilities

Nurseries
Parenting support

Child
Care

Integrated
Care
Integrated community support
centers
Care managers

Food

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Business Performance
Earnings have continued to grow as our business divisions provided by mutual support
against risks, amendment of acts, and in the emergencies such as COVID-19.
Net sales growth has been driven by elements such as launch of new linesof business and M&A.

Net sales (millions of yen)
17,500We have achieved stable and solid growth in profit in recent years
driven by rising nursery enrollment, growing occupancy rates, andcost optimization.

Profit (millions of yen)
500
450

17,00016,500

400
350
300

16,000250
15,50015,000

200
150
100

14,50014,000Net sales temporarily was decreased in FY03/19 due to the decline ofreceiving prescriptions largely from the change of management at Toshiba
Hospital, as well as the impact of NHI drug price revisions. We expect
FY03/21 results to meet this figure on a consolidated basis.

Merhälsa Corporation All Rights Reserved.

50
0

Low profits prior to FY FY03/17 were due to numerous
investments in opening nurseries and serviced senior citizen
residences.
Notes: We have not presented year-on-year comparison because we commenced consolidated accounting
following our acquisition of Tosho Shoji Co., Ltd. as a subsidiary in July 2020.
If the COVID-19 emergency is prolonged or grows more serious, it could cause earnings tounderperform, and we will provide prompt notification should we need to revise our earnings forecast.

5Market Trends and Growth Potential
Merhälsa runs business with strong societal needs pertaining to the public
insurance system and social welfare, and we have growth potential due toincreasing social security costs amid a falling birthrate and aging society.
Outlook for Social Security Benefits(trillions of yen)

Increasing Trend of Social Security Benefits

200

Social benefit costs are expected to increase from ¥121
trillion in FY2018 to ¥188 trillion in FY2040.

180
160

Social security benefit expenditures are mostly allocated topensions, healthcare, long-term care, and child care.
Merhälsa's lines of business correspond to over half of these
allocations. We aim to grow by addressing the needs ofsociety and capitalizing on these market opportunities andcollaborating in our line of business.

140
120
100
80
60
40
20
0
FY2018Pensions

FY2025
Healthcare

Merhälsa Corporation All Rights Reserved.

Long-term care

FY2040Child care

Other

Source: Ministry of Health, Labour and Welfare “2040 Outlook for Social Security Costs”

6Key Features: Medicine Business・Operation of dispensing pharmacies andhome healthcare
・ Locations near major Tokyo area hospitals
Aseptic room
Patient

Small-scale clinics

Advanced knowledge and experience

Patients that requiredifficult treatment methods
or decisions arecongregating toward largescale hospitals.

High-quality pharmacists who are familiar with advanced
pharmacology.

High prescription value
Thanks in part to premiums through government policy
measures, our average prescription value is muchhigher than the industry average. * Merhälsa prescriptions

averaged ¥13,339 in FY2019, vs. the industrial average of ¥9,187 in FY2017.

Patient

Large-scale hospitals

Merhälsa
pharmacy

By collaborating withspecialized agencies, we areable to handle advanced
pharmacological managementthat normal pharmacies
cannot.

Steady volume of prescriptions
Tokyo area prescription volumes and earnings are holding
steady (which is unusual during the COVIT-19 emergency).
We are also growing earnings through care facilities’ inhome pharmacological management, and collaboration with
the Child Care division when opening new pharmacies.

Transfusion management-based home
infusion therapy (HIT) businessWe provide advanced transfusion management to support
terminal care.

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Key Features: Child Care Business
Licensed Nurseries Operation
・High-quality meeting national and local government
standards
・Efficient customer gathering(enrollees referred by local governments)
・Earnings growth on the back of the market demand

Stable Hiring of Childcare Workers

・Subsidies available for facilities(Subsidies for facilities opening in the next fiscal year arerecorded as extraordinary income at the previous fiscal
year-end)

Securing childcare workers is an absolute necessity,and we have achieved steady hiring and highretention rates.

Sales

Child Care Division Workforce(millions of yen)
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

(No. of workers)(No. of nurseries)

800

35

700

30

600

25

500

20
15

400
300

10
200

5
100

0
0
Apr.
2011

Sales

Nurseries
Source: Merhälsa earnings results

Merhälsa Corporation All Rights Reserved.

Apr.
2012

Apr.
2013

Apr.
2014

Apr.
2015

Apr.
2016

Apr.
2017

Apr.
2018

Apr.
2019

Apr.
2020

Source: Merhälsa records

8Key Features: Care Business
Framework capable of continual adaptation to changes incare levels with variation in service to suit all levels of care
One of the unique features of our Care division is the degree of efficiency we bring to the business. The key tothis is our dominant operation of services covering patients with mild care needs to those with intensive careneeds or cognitive impairment. We also undertake terminal care to provide patients with life span service.

Wide range of variation
Facility services
In-home services

Coverage example

Hospice

Care plans

Specified facilities

Group homes

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Residences with health and welfare
service for the elderly

Need
SupportPreventive
supportNeed forLong-Term
Care Level 1

Home-visit nursing, bathing

Need forLong-Term
Care Level 2

Regular & as-needed home visit
nursing/long-term care・

Need forLong-Term
Care Level 3

Multifunctional long term carein a small group home

Small-scale multi-function care

Need forLong-Term
Care Level 4

Comprehensive support center ,Designated management

Care provided for all need levels

Need forLong-Term
Care Level 5

9Business Model
Medicine: Based primarily on Japan’s Health Insurance Act, we obtain revenue in the form ofpatient copayments as well as government compensation from the Social Insurance Medical
Fee Payment Fund and the National Health Insurance Organization. The higher the volume
of prescriptions, average prescription value, and premiums on prescription content, the more
our sales grow. There is a tendency for revenue to increase from the 2nd half of the year due
to prevalence of seasonal disease.
Child Care: Based primarily on the Child Welfare Act, we receive national and local
government subsidies for running nurseries (we record facility subsidies as extraordinary
income in March). For licensed nursery schools, there are also local subsidies for the portionof child care costs paid by parents, and we are able to book additional revenue by meeting
demands of local government standards for care workers and facilities in addition to national
standards. Local governments refer parents and children to nurseries, which enables us tooperate more efficiently without spending funds on recruiting children. The number ofchildren enrolled translates into profit.
Care: Based primarily on Japan’s Long-Term Care Insurance Act and care plans drawn up bycare managers, we obtain revenue in the form of copayments by care recipients plus
compensation from the National Health Insurance Organization. Care recipients are billed
directly for services not covered by long-term care insurance. Providing compensated careand raising occupancy rates of nursing homes translates into profit.
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Future Growth Strategy
The Integrated Community Care Systems
Collaboration with Major Property Developers

ClinicClinicPharmacPharmacyyConvenience
ConvenienceStore
store

Childcare
Nursery
CenterMerhälsa Corporation All Rights Reserved.

Care
Care
CentercenterPayseniorresidence
SeniorResidences
in-home hospice&&In-Home
HospiceOur strategy for future growth starts withcollaboration between our Medicine,Care, and Child Care business divisions,
all of which serve crucial societal needs.
We will leverage the resulting synergies
from that collaboration to implement
community-based integrated caresystems, and thereby achieve earnings
growth. We will also partner with major
property developers and local
governments. We already havecollaborative projects underway withurban development firms, and we plan
to provide on-premise dispensing
pharmacy and other care services
integrated into senior citizens
residences with supportive services andother facilities. We also have an assetlight policy on investment, owning noland or buildings of our own, and when
opening new facilities, we generally
operate our business using leased
property.
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Individual Segment Growth Strategies
Medicine

Child Care

Care

Expand Premium
Eligibility

Steady Launch of
New Nursery Schools

Expand Terminal Care

Online Medication
Instruction

Commissioned Operationof Public Nursery schools

Raise Occupancy Rates

In Medicine, we will promptly
adapt to government policy andadd more functions eligible forpremiums. We will also upgrade
our current online medication
instructions.

In Child Care, we see Child Careas the main driver in the medium
term. By steadily opening new
nurseries, managing publicnurseries on behalf of thegovernment.

In Care, we will focus on
expanding palliative care. In
addition, by enhancing our sales
and marketing efforts, we will
boost occupancy at group homes
for cognitive disorder care.
Pain relief drugs used in hospicealso contribute to Medicine sales.

Proactive M&A and development
We will proactively engage in M&A and develop top-notch projects that contribute to sales and profit
and minimize business risks, we will strive to increase the number of offices and expand business.

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Corporate Social Responsibility (CSR)
By implementing the Integrated Community Care System, our business itself contributes
to local society, and further promotes CSR activities through various communities.

Sports events
Festivals

We sponsor T-ball games. T-ball can be enjoyed by allages, from children to senior citizens. It is also includedin school curricula.

Merhälsa Corporation All Rights Reserved.

At our care facilities, we work to promote interaction between residents
and the local community by holding festivals and events. People
attending these events also often end up becoming new employees or
new clients.

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Precautions

The plans, business activities and other forward-looking statements concerning Merhälsa is basedon information that was available when this presentation was made. There may be significant
changes to these statements due to other risk factors and other uncertainties. These statements
are not promises concerning future performance. Although the content related to the environmentis created based on each data that seems to be reliable, please note that we cannot guarantee its
accuracy and completeness. In addition, this material is for the purpose of providing information
only to everyone, not for soliciting make an investment in Merhälsa. We ask that all individual
investors make investment decisions at their own responsible.

Inquiries

E-mail contact-ir@merhalsa.jp
IR website https://www.merhalsa-hd.jp/contact/

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