mascot character
ＥＭＭＡ

Results of Operations
for financial year ended December 31 2023

EM SYSTEMS CO., LTD.
(TSE Prime Section: 4820)ＥＭ ＳＹＳＴＥＭＳ ＣＯ ．，ＬＴＤ．
These documents have been translated from Japanese originals for reference Purposes only.
In the event of any discrepancy between these translated documents and the Japanese originals, the originals shall prevail. The Company assumes
no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translations.

Summary
Ⅰ. “Results of Operations for Financial year ended December 31 2023” “Appendix ”

i.
ii.
iii.
iv.
v.
vi.

Market Environment /Company Initiatives
Financial Highlights
Sales / Operating Profits – Summary
Sales - Breakdown of Increases/Decrease
Operating Profits - Breakdown of Increases/Decreases
Segment Results

Ⅱ. “Financial forecast for the fiscal year ended December 31, 2024”i.
Financial Forecast
ii. Financial Forecast Highlights
iii. Changes in Consolidate Results by Fiscal year
iv. M&A Strategy （PMI）
v. Fundamental Reform of Sales Structure
vi. Enhance Marketing Activitiesvii. Our Share and Our Approach to Expanding Our Shareviii. Shareholder Returns
ix. Self-evaluation of the Current Mid-term Management Plan
x. Regarding the Next Mid-term Management PlanＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

i.
ii.
iii.
iv.
v.

Company Initiatives
Balance Sheet Summary
By Segment Sales Breakdown
Quarterly Sales
By Segment Recurring Income Business（Quarterly Sales）
vi. Recent Trends in Number of Customers
vii. M&A Strategy
viii. Shared Information System Foundationix. How Electronic Prescriptions Function(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

2

Highlights of today's presentation

１ Results for the fiscal year ended December 31, 2023
 Sales exceeded 20 billion yen for the first time

２ Financial forecast for the fiscal year ended December 31, 2024
 Efficiency improved through group company management, reflecting full year performance of 2 companies
acquired in the previous fiscal year Cost containment (commercials, etc.), decrease in online eligibility verification system business, and possible
expansion of electronic prescription system business

３ Future Initiatives
 Establishment of a dedicated sales force, enhancement of inside sales, and expansion of hardware business A focus on web marketing and digital marketing

４ Shareholder returns
 Acquisition of treasury stockＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

3

Ⅰ.ⅰ. Market Environment and Our Initiatives (Clinics )Clinics■ Responses to the Post-Covid-19 Status (Hybridization of exhibitions and seminars, promotion of online medical care, medical consultations byappointment, Web-based medical interview, transition toward cashless systems, etc.)■ Online eligibility verification and coverage expansion (Compatible with medical assistance from March 2024)■ Electronic prescriptions and enhancements to functionality (from December 2023), abolition of insurance cards through utilizationof Individual Number Card (aiming for fall 2024)■ Full-scale commencement of medical digital transformation (formation of a nationwide medical information platform,
standardization of electronic medical record information, and digital transformation of medical fee revisions)■ Medication price revision and medical fee revision (medication price revision: April 1, 2024 / medical fee revision: June 1, 2024)■ Cybersecurity measures (mandatory from April 1, 2024)

Initiatives● Promotion of digital marketing (Digital advertising, website renewal, use of MA tools, enhancement of video/sample
introductory content)● Enhancing inside sales, Exhibiting at Hybrid Exhibitions (Enhancement of online seminars)● Operation of “EM-AVALON” (portal site for customers) and content enhancement● Provision of online qualification verification system utilizing Online SHOP, Provision of electronic prescription starter kit,
hosting of seminars related to electronic prescriptions● Participation in the government-promoted electronic medical record standardization verification projectＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

4

Ⅰ.ⅰ. Market Environment and Our Initiatives (Pharmacies)

Pharmacies
 Responses to the Post-Covid-19 Status (Hybridization of exhibitions and seminars, optimization of operations within pharmacies, promotion of
online medication guidance, delivery of medications, etc.)
 Reorganization, M&A, Pharmacy DX Strategy, Digital Shift, Strategies to connect with patients
 Online eligibility verification and coverage expansion (Compatible with medical assistance from March 2024)
 Electronic prescriptions and enhancements to functionality (from December 2023), Abolition of insurance cards through utilizationof Individual Number Card (aiming for fall 2024)
 Full-scale commencement of medical digital transformation (formation of a nationwide medical information platform,
standardization of electronic medical record information, and digital transformation of medical fee revisions) Medication price revision and medical fee revision (medication price revision: April 1, 2024 / medical fee revision: June 1, 2024)
 Cybersecurity measures (mandatory from April 1, 2024)

Initiatives● Promotion of digital marketing (website renewal, use of MA tools, enhancement of video/online seminars/sample introductory

content)● Collaboration with Good Cycle System, Inc. and Unike Software Research Co., Ltd, Electronic drug history related proposal-making
capability, Enhancement of online seminars● Operation of “EM-AVALON” (portal site for customers) and content enhancement● Provision of online qualification verification system utilizing Online SHOP, provision of electronic prescription starter kit, hosting of
seminars related to electronic prescriptions● Sales promotion of “MAPs for PHARMACY DX”● Enhancing inside sales, Exhibiting at Hybrid ExhibitionsＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

5

Ⅰ.ⅰ. Market Environment and Our Initiatives(Long-term care/welfare）

Long-term care/welfare■ Increase in the number of new facilities accompanying the aging of society, and increase in the number of large-scale chain longterm care facilities, Revision of Nursing Care Compensation■ Responses to the Post-Covid-19 Status（Provision of non-contact services, limitations on facility usage, enhancing infection countermeasures, etc.)■ Responses to the Care Plan Data Linkage System■ Improvement of data accuracy by LIFE support（Long-term care Information system For Evidence）■ Revision of compensation for long-term care and disability (effective dates: April 1, 2024 / June 1, 2024)*Timing varies by service

Initiatives● Sales promotion of “MAPs for NURSING CARE”（website renewal, enhancement of video/sample introductory content）● Enhancing of chain store sales proposal capabilities , Promotion of TOP coverage● Enhancing of digital marketing (website renewal, use of MA tools)● Enhancing inside sales, exhibition and online exhibitions enhancement of online seminars）● Efficient support and data output for LIFE by “Sukoyaka-san”
ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

6

Ⅰ. ⅱ. Financial Highlights for Fiscal Year Ended December 31, 2023
Net sales exceeded 20 billion yen, and stock-bases sales exceeded 10 billion yen, both setting new records



Slight decrease in operating income from the previous year due to an increase in goodwill amortization, payments of special compensation, airing of TV commercials, etc.

Increase in net income for the third consecutive term. Increase in dividends of by 2 yen (payout ratio: 50.4%). Increase in dividends for the thirteenth consecutive term,
excluding the term when the accounting period was changed

Net Sales

Sales of Recurring Income

Licenses(Millions of yen)

(Millions of yen)

(Number)

20,355

10,303

41,465

YoY % change

YoY % change

YoY % change+20.3％+19.5％+17.1％

Operating Profits

Net Income

Shareholder returns(Millions of yen)

(Millions of yen)

2,330

1,962

YoY % change

YoY % change(2.7％)+3.6％

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

Dividend of 14 yen
per share
YoY change

2 yen increase individend(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

7

Ⅰ. ⅱ. Financial Highlights for Fiscal Year Ended December 31, 2023
Consolidated results of December 31, 2023

Topics for December 31, 2023
□ Good Cycle System Inc. and Unike Software Research Co., Ltd. became a consolidated subsidiary,
resulting in increases in initial and sales of recurring income□ New sales expansion of MAPs series and replacement of in-house products resulted in an increase in initial system sales, including service
provision□ Good Cycle System Inc. and Unike Software Research Co., Ltd. became consolidated subsidiaries, resulting in an increase in SG&A expenses□ SG&A expenses increased due to airing of TV commercials to improve recognition and special compensation paid to employees.

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

8

Ⅰ. ⅲ. Sales / Operating Profits-Summary（By Segment)
Operating Profits

Sales

Units：Millions of yen

Units：Millions of yen

Current
performance
2023/12

YoY change

YoY % change

3,031

2,939

(91)

(3.0%)IT Systems forClinics

(409)

(130)

+279

ー

IT Systems forlong-termcare/welfare

(211)

(540)

(329)

ー

Other
Businesses

(42)

48

+91

ー

Previous
performance
2022/12Current
performance
2023/12

YoY change

YoY % change

IT Systems for
Pharmacies

13,53016,159+2,628+19.4%IT Systems for
Pharmacies

IT Systems forClinics

2,202

2,802

+600

+27.3%IT Systems forlong-termcare/welfare

539

550

+11

+2.1%

Other
Businesses

713

973

+260

+36.5%

Previous
performance
2022/12※Net sales and operating profits by segment are the amounts before elimination of inter-segment transactions.

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

9

Ⅰ. ⅳ. Sales - Breakdown of Increases/Decreases（By Segment）

IT Systems for Pharmacies
Units：Millions of yen

・In addition to sales expansion of “MAPs for PHARMACY DX” andreplacement of hardware, initial sales increased to 964 million yen due
to Good Cycle System Inc. and Unike Software Research Co., Ltd.
Becoming consolidated subsidiaries
・Billing sales increased to approx. 1,417 million yen as a result of anincrease in the number of customers

IT Systems for Clinics
M&A
Effectiveness・In addition to expanded installation of online eligibility verification
systems, initial sales increased to approx. 596 million yen due to anincrease in system sales
・Billing sales increased to approx. 49 million yen as a result of anincrease in the number of customers

IT Systems for long-term care/welfare
・Billing sales increased to approx. 24 million yen as a result of anincrease in the number of licenses

Other Businesses
・Unike Software Research Co., Ltd. becoming a consolidated subsidiary
increased temporary staffing business sales to 159 million yen
・Subsidiary cashless business sales increased to approx. 112 million yen※Net sales and operating profits by segment are the amounts before elimination of inter-segment transactions.

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

10

Ⅰ. ⅳ. Initial sales - Breakdown of Increases/Decreases（Pharmacies）

Units：Millions of yen※ Categories of increases/decreases are the amounts before applying revenue recognition standards

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

11

Ⅰ. ⅳ. Initial sales - Breakdown of Increases/Decreases（Clinics）

Units：Millions of yen

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

12

Ⅰ. ⅴ. Operating Profits - Breakdown of Increases/Decreases（By Segment）

Shared results in all segments■SG&A expenses increased due to airing of TV commercials to expand
market share and special compensation paid to employees

Units：Millions of yen

IT Systems for Pharmacies
・Good Cycle System Inc. and Unike Software Research Co., Ltd. became
consolidated subsidiaries, resulting in an increase in SG&A expenses

IT Systems for Clinics
・Online eligibility verification system contributed to increasing profits
・Increase in gross profit due to growth in initial system sales and billing
sales

IT Systems for long-term care/welfare
・An increase in depreciation associated with the release of“MAPs for NURSING CARE”

Other Businesses
・Profit contributions from overseas subsidiaries led to an improvement in
the operating income※Net sales and operating profits by segment are the amounts before elimination of inter-segment transactions.

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

13

Ⅰ. ⅴ. Operating Profits - Breakdown of Increases/Decreases

Units：Millions of yen

・M&A Effectiveness・Increase in consolidated subsidiaries

・Payment of special compensation
・Airing of TV commercials
・Amortization of goodwill

SG&A expenses

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

14

Ⅰ. ⅵ. Segment results (consolidated)（Millions of yen）

※Segmented sales and operating profits and losses are the amounts before elimination of internal transactions between segments.

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

15

Ⅱ. ⅰ. Financial Forecast (Consolidated)（Millions of yen）

Overall・Increase in revenue due to M&A effects and sales expansion
by enhancing inside sales
・Plan to increase profit by via thorough cost reductions andincreasing sales of recurring income with high gross profit
margin ratios
Pharmacies
・Sales increased due to change consolidation period for Good
Cycle System, Inc. and Unike Software Research Co., Ltd.
・Operating income increased slightly due to an increase in
manufacturing costs caused by amortization of goodwill andrevision responses, etc.
Clinics
・Despite an increase in the number of system sales, overallsales decreased due to strong special demand for online
eligibility verification systems in the previous term
・Operating loss increased due to a decrease in sales and anincrease in manufacturing costs caused by revision
responses, etc.
Long-term care/welfare
・Sales increased due to expansion of MAPs for NURSING
CARE and Sukoyaka-san sales※Segmented sales and operating profits and losses are the amounts
before elimination of internal transactions between segments.

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

・Operating loss decreased due to an increase in gross profit(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

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Ⅱ. ⅱ. Financial Forecast Highlights for Fiscal Year Ending December 31, 2024
 Plan to achieve an increase in revenue through M&A effects and sales expansion efforts, despite a temporary drop in online eligibility verification system sales
 Plan to also increase profit via thorough cost reductions and an increase in sales of recurring income with high gross margin ratios Potential further increase in sales and profit depending on additional government policies to promote electronic prescriptions

Financial forecast for fiscal year ending
December 31, 2024
Sales revenue

22,014 Millions of yen（8.1％）（Revenue growth rate）

Sales of Recurring
Income（Revenue growth rate）

11,500 Millions of yen（11.6％）

Operating Profits

2,573 Millions of yen（Revenue growth rate）(10.4%)Net Income

2,160 Millions of yen（Revenue growth rate）(10.1%)ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

Forecast assumptions＋ Full-year contributions from Good Cycle System, Inc. and Unike Software Research Co., Ltd. acquired last fiscal year
－ Temporary sales (online eligibility verification system) not expected this fiscal year
Pharmacies : Plan to increase price per customer via thorough cross-selling
Clinics : Scheduled to increase the number of system sales
However, sales expected to decrease slightly due to the drop in online eligibility verification system sales
in the previous fiscal year
Long-term care : Plan to increase sales of both MAPs for NURSING CARE and conventional systems＋ Elimination of temporary cost increase factors (special compensation, TV commercials) in the previous fiscal year
＋ Thorough cost reduction in each division and subsidiary＋ Increase in profit due to increase in sales of recurring income with high gross profit margin ratios－ Full-year impact from amortization of goodwill accompanying M&A activities－ Increase in amortization due to enhancement of MAPs for NURSING CARE

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

17

Reference: Online eligibility verification systems and electronic prescriptions / Comparison

obligation
Online・Becomes a factor in improving initial unit
Installationforcustomers
whohave
already
applied(clinics
andpharmacies)
price at the time of new customer installation
eligibility
・End of rapid increase in initial sales due tonearly complete
verification
concentrated demandsystems※1
April
September
April
October※1 Online verification ofeligibility information, using
Individual Number Card, etc.

Application Start Full-scale operation begins.

FY 2021
Recommendation

Electronicprescriptions※2※2 Electronic prescriptions, and sharing drug
information between clinics and pharmaciesＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

Mandatory
implementation

End of mandatory transitional measures

FY 2024

FY 2023

FY 2022January

Application Start

Continuous efforts for customers who have already applied
will contribute to a certain level of sales※Potential further increase in sales and profit
depending on additional government policies(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

18

Ⅱ. ⅲ.Changes in consolidate results by fiscal year
Flow-Based

Fully recurring income

Partially recurring income(Millions of yen)Sales
11,395

11,288

8,776

9,818

8,202

9,013

10,257

11,36911,257

13,19913,676

13,953

13,133

14,023

9,660

14,436

16,91920,35522,0142007.3 2008.3 2009.3 2010.3 2011.3 2012.3 2013.3 2014.3 2015.3 2016.3 2017.3 2018.3 2019.3 2020.3 2020.12 2021.12 2022.12 2023.12 2024.12

Operating Profits

The 2020 fiscal year was a 9-month accounting period due tochange in the fiscal year end

1,740

1,010

86
-1,317

835

1,209

1,672

1,232

1,861

2,597

3,063

2,622

1,583

1,037

1,870

2,395

2,330

2,573

-721

2007.3 2008.3 2009.3 2010.3 2011.3 2012.3 2013.3 2014.3 2015.3 2016.3 2017.3 2018.3 2019.3 2020.3 2020.12 2021.12 2022.12 2023.12 2024.12

Profit Margin
ratio

EBITDA
20.7%
14.2%

13.7%

16.3%

19.1%

15.3%

18.3%

7.2%

19.0%

15.3%
-0.7%

8.9%

22.0%

9.3%

11.8%

14.7%

10.9%

14.1%

24.4%

22.0%

22.2%
13.7%

15.1%

11.3%

10.7%

17.0%

18.0%

13.0%

14.2%

16.6%

16.8%

11.4%

11.7%

20.0%

-7.8%
1.0%
2007.3 2008.3 2009.3 2010.3 2011.3
2012.3 2013.3 2014.3 2015.3 2016.3 2017.3 2018.3 2019.3 2020.3 2020.12 2021.12 2022.12 2023.12 2024.12-7.3%-15.0%ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

19

Ⅱ. ⅳ. M&A Strategy（PMI）
 Expansion of recurring income business base
 Implementation thorough cost reduction and pursuit of economy of scale

Product
Strategy Continue software updates and customer support for purchased companies
 Reduce administrative costs and increase added value by standardizing engines while
retaining each company's existing UI
 Shift to a business model centered on billing sales by increasing the added value of eachcompany’s systems
 Reduce switches to competing products by providing thorough support (ensure that atleast 95% of customers continue to use our products)

Management
Strategy Reduce the costs of replacing other companies’ products with ours and mitigate pricecompetition in competitive areas Promote cost reduction measures through consolidation and relocation of headquarters
and offices (some offices have been relocated) Reduce procurement costs through joint purchasing
 Avoid duplicate software development among purchased companies and significantly
reduce development costs
 Reallocate personnel within the Group without downsizing the staff

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

20

Ⅱ. ⅴ. Fundamental Reform of Sales Structure We have drastically reformed our sales structure this fiscal year. We have increased our ability to acquire new users by
establishing dedicated sales teams and focusing on inside sales.
 By making more effective use of online and digital marketing, we are increasing company recognition, which had been an issue
for us, especially in the fields of clinic systems and long-term/welfare systems, and steadily acquiring new users.

①
Establish
ment ofdedicated
sales
teams

 Previously, one sales team handled all sales for pharmacies, clinics,
and long-term care/welfare.
 In January 2024, supervisors were assigned to each segment. Sales
resources, which had tended to be biased toward pharmacies, arenow appropriately allocated to the clinics and long-termcare/welfare segments as well, resulting in a drastic enhancementof sales capabilities (see figure on the right).
 There is now a sales team, composed of high specialized members,
dedicated to each segment.

 We used to focus on in-person visits to make sales, so sales were
often concluded on-site.
 As a result, our system for following up on leads acquired through②
online and digital marketing was not sufficiently developed,
resulting in lost opportunities in some cases.
enhancing In January 2024, dedicated inside sales representatives were
insideassigned to each segment. We are steadily improving thesales
conversion ratio through appropriate follow-up measures via
telephone, email, etc. for the leads acquired through online anddigital marketing (see figure on the right).
ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

Sales Division

So far(Mainly) Direct sales

Pharmacies
New structure(from January2024 onwards)

Clinics

Long-termcare/welfare

Sales Division

generalmanager

generalmanager

generalmanager

Directsales

Directsales

Directsales

Inside
Sales

Inside
Sales

InsideSales

Pharmacies

Clinics

Long-termcare/welfare(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

21

Ⅱ. ⅵ. Enhance marketing activities
 We are steadily acquiring new users by acquiring leads via hybrid marketing that combines real-time, online, and digital media,
as well as through effective follow-up operations that make use of inside sales under our new structure.

Real marketing• Organization of our own
seminars• Participation in seminars
and exhibitions organizedby other companies

Web marketing

Digital marketing• Effective use of online ads
and industry websites tospread awareness of thefeatures of our services• The ability to actively approach
potential users through social
media, etc.

SearchAcquisition of quality leads
Follow-up sales by our insidesales representatives(telephone, email, online demos, etc.)ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

22

Ⅱ. ⅶ. Our Share and Our Approach to Expanding Our Share While each market continues to consolidate around the top manufacturers, there are still many mid-sized vendors withseveral thousand customers
 Vendors with 10,000 or fewer customers bear a heavy burden when revising software accompanying system changes
 Our intention is to increase our share of each market by continuing to actively pursue M&As

IT Systems for Pharmacies

Market share 43.7％

Number of customers ：24,059：55,000
Target population：25,000
Mid-term goals

IT Systems for Clinics

IT Systems forlong-term care/welfare

Market share 3.3％

Market share 5.7％

Number of customers ： 3,053
Target population：90,000
Mid-term goals： 7,000

Number of customers ： 14,353
Target population：250,000
Mid-term goals： 25,000*1 The number of customers indicates the number of pharmacies and clinics that purchased our system products.
*2 The above target populations represent the number of pharmacies and clinics that we considered as our potential customers, and differ from theactual number of registered pharmacies and clinics.
(as of December 31 , 2023)*3 Mid-term goals are as announced in February 2022

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

23

Ⅱ. ⅷ. Shareholder Returns (Dividends)
Increase in dividends for the thirteenth consecutive term,
excluding the term when the accounting period was changed
20

80.0%
67.4%

70.0%
50.4%

15
50.7%

37.6%

10

31.3%

25.2%
21.4%
5

9.0%
1.63

0

20.3%
4.625

5.625

5.875

3.75

4

2.63
2.5

1.63

2.25

2.63

2010.3期

2011.3期

2012.3期

34.1%

9.25

9.5

6

5.5

42.8%

12

10

10

6

6

7

7

7

8

20.0%
7

1.25

1.875

2

2

2013.3期

2014.3期

FY 2015.3

FY 2016.3

FY 2017.3

3.25

4

4

4

4

4

FY 2018.3

FY 2019.3

FY 2020.3

FY 2020.12

FY 2021.12

FY 2022.12

7
10.0%
0.0%

Interim dividend

Year-end dividend

FY 2023.12

payout ratio(consolidated)

FY 2024.12(estimated)change in thefiscal year end*We conducted stock splits on April 1st, 2016 and March 1st, 2018 and January 1st, 2020 at a ratio of two shares per one ordinary share.
The aforementioned information assumes that each stock split occurred at the beginning of March 2015.

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

40.0%
30.0%

3.375

1.25

60.0%
50.0%

11

5.75

3.75

2.25

25.7%
7.75

27.7%

14

44.9%

45.8%
14

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

24

Ⅱ. ⅷ. Shareholder Returns (Acquisition of Treasury Stock)[Reference]
Details of the resolution made on February 14, 2024
Total number of shares to be acquired:
Up to 1.6 million shares(Ratio in relation to the total number of shares issued(excluding treasury stock): 2.26%)

Total amount of shares to be acquired:
Up to 1 billion yen
Acquisition period:
From February 15, 2024 to December 30, 2024
Reason for acquisition:
To implement a flexible capital policy in response tochanges in the business environment, to improve
capital efficiency, and to enhance shareholder returns.

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

Acquisition period

Total acquisition value

November 10, 2010 ～57 million yen

February 09, 2011 ～69 million yen

September 05, 2011 ～79 million yen

November 11, 2011 ～77 million yen

May 25, 2015 ～99 million yen

June 18, 2018 ～500 million yen

January 07, 2019 ～500 million yen

June 11, 2020 ～500 million yen

February 10, 2022 ～500 million yen

February 15, 2024 ～(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

1 billion yen(maximum)25

Ⅱ. ⅸ. Self-evaluation of Current Mid-term Management Plan Failure to achieve numerical targets, and share price slump
 Aim to promptly recover performance, enhance shareholder returns, and improve capital efficiency
from the fiscal year ending December 31, 2024 and beyond
Comparison with actual performance

Share price(as at 29 December 2023)

 Down 38% from the record high of 1,134 yen*1(TOPIX index up 22% during the same period)

Sales Revised mid-term plan target*2 of 16,710 million yen
compared to 22,014 million yen forecast for this term

Operatingprofit Revised mid-term plan target of 3,466 million yen
compared to 2,573 million yen forecast for this term

ROE
M&A

Self-evaluation

 Decrease of 9.9% in the fiscal year ended December 31,
2023 compared to the record high of 17.2% (in FYEMarch 31, 2024)
 Good Cycle Systems and Unike Software Research Co.,Ltd become subsidiaries.

1) Closing price on August 22, 2022
2) New Mid-term Management Plan (FY2022 to FY2024) announced on February 9, 2022」

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

26

Ⅱ. ⅹ. Regarding the Next Mid-term Management Plan Our next medium-term management plan is due to be published this financial year We are currently identifying our challenges and considering specific measures

Managementstrategy Switched to a sales structure in which pharmacies, clinics, and long-term care/welfare are
separate, and clarified responsibility for sales results in each segment in response the failureof the current mid-term management plan Scheduled to launch marketing activities that make use of online and digital marketing, and tochange numerical targets for the number of customers to more realistic targets.
 Consider adopting KPIs appropriate for the industries in which we operate, while focusing onsales and profit
 In addition to operating profit, also focus on profit before amortization of goodwill from theperspective of M&A utilization
 Promote efficiency in IT systems for pharmacies, which we now have a market share of over
40%, by standardizing engines. Also aim to achieve growth and establish a solid market
position by promoting cross-selling Scheduled to aim for significant renewal, achieving the highest profits ever in the final year,
by implementing a growth strategy and thoroughly managing costs

Financialstrategy Consider introducing a new cash allocation policy
 Consider making use of some debt, if necessary, when conducting M&As
 Expand shareholder returns on the premise of our M&A policy, etc.

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

27

AppendixＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

28

Ⅲ.ⅰ. Company Initiatives

Marketing Activities ,Sale Activities
ClinicPharmacyLong

Contents- term care

〇

〇

〇

Enhancement digital web marketing：Implementation of SEO and SEM measures,
Application of YouTube channel, Raise awareness,Enhancement of online seminars Product website renewal, MA tools, Enhancement ofvideo/sample introductory content

〇

〇

〇

Promotional activities using TV commercials (to be rolled out while verifying effectiveness)

〇

〇

〇

Improving business partner and customer loyalty through the comprehensive portal site "EM-AVALON"〇〇

Provision of information and necessary materials related to cyber security measures through the comprehensive portal site “EM-AVALON”(scheduled for February 2024)
Provision of "Medical Dashboard" in the "MY AVALON" My Page〇〇

Application of electronic contracts, and estimates and configuration examinations conducted personally by customers through“MAPs DIRECT,” an e-commerce site
Business partnership with Good Cycle System Co., Ltd and Unike Software Research Co., Ltd,:Marketing:Online seminars,Linkage withmedication history. Linkage of a tool for online medication guidance and follow-ups during periods of administration〇〇

Launch of "EM Analysis Support (free)" ,Release of "MAPs Option | BunseQI (paid)"

〇
〇

〇

〇

Sales promotion of MAPs series.

〇

〇

〇

Medical and long-term care information sharing ,Ensure collaboration among hospitals, clinics, and pharmacies,
and Long-term care/welfare facilities ,EHR (Electronic Health Record)promotion

〇

〇

〇

〇

〇

〇

〇

〇

Promotion of online eligibility verification/electronic prescriptions〇

Operation of new organizational structure (EM MODEL) for full-scale development of SaaS business
Updates due to the end of Windows legacy OS support〇

Application of M&A：Clinic Segment
Ｍ ＳＹＳＴＥＭＳ ＣＯ. , ＬＴＤ．
ＥClinic：Long-term care/Welfare
Pharmacy：Pharmacy
Segment
Long-termcare All rights(C)2023 EM SYSTEMS
Co.ltd.
General Affairs
Department
reserved.
6
Segment29

Ⅲ. ⅰ. Company Initiatives
Social contribution activities Support for tennis academies and professional tennis players
・Support for the tennis academy "Ai Love All Tennis Academy"・Affiliation contract with professional tennis players
・Provision of a "EM Tennis Clinic" in Kanto on December 10.
 Sponsor participation in the KIMIKO DATE x YONEX PROJECT

Photos from the EM Tennis Clinic in Kanto
Ai Love All Tennis Academy representative andprofessional tennis player, Aiko Nakamura , and allother players from the Academy were in attendance.
This was the first time that the clinic was held in
Kanto, and many medical practitioners participated!

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

First time for a pair of EM Systems members

Professional tennis pair:
Imamura & Abe / Winners of the W25 Doubles

Professional tennis players Saki Imamuraand Hiromi Abe, who belong to EM Systems,
won the W25 SOLAPUR (India) doubles championship.

From left, Saki Imamura and Hiromi Abe (both from EM Systems)(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

30

Ⅲ.ⅰ. Company Initiatives
Social contribution activities＜Company-led support activities＞
 Donations to Medical AI/Digital Twin Development Course (Course head: Specially-appointed Assistant Professor
Yoshimasa Kawazoe M.D., Ph.D.)
We endorse the activities of the University of Tokyo’s Course on Artificial Intelligence in Healthcare, which aims to develop a foundation for
new medical services based on AI and ICT, and we have been supporting R&D through continuous donations to the course since 2017.
From fiscal 2023, we plan to continue contributing to the research and development of this course in support of theestablishment of the "Medical AI/Digital Twin Development Course", which is an extension of this course.

 Participation in examination of next-generation electronic medical record base (Representative: Professor
Kazuhiko Ohe, M.D., Ph.D. at the University of Tokyo)
We participate in the activities of the NeXEHRS Consortium, established with the goal of constructing a next-generation electronic
medical record sharing platform.

 Support for polypharmacy measures (Representative: Professor Hirohisa Imai Ph.D. at the University of Teikyo)
We agree with the purpose of the polypharmacy measures promoted by the Society for the Promotion of Proper Drug Usage, and we
support its activities as a special member.

 Participation in PHR proliferation activities (Representative: Professor Taku Iwami Ph.D. at Kyoto University)
We participate in the activities of the PHR Council, which aims to promote the appropriate proliferation of Personal Health Records (PHR) andcontribute to further improving health and safety, and we support the proliferation of a framework ensuring that data relating to medical care,long-term care, health, etc. is used at the discretion of the individual concerned.

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

31

Ⅲ.ⅰ. Company Initiatives
Social contribution activities Participation in the Cross-ministerial Strategic Innovation Promotion Program (SIP) (Cabinet Office)Participated in formulating specifications for the core functions of cloud-based standardized electronic medical records as a cooperatingorganization in the third phase, which began from FY2023, of a project to establish an integrated healthcare system under the Strategic
Innovation Promotion Program (SIP), which promotes initiatives from basic research to practical applications and commercialization,and is spearheaded by the Council for Science, Technology and Innovation of the Cabinet Office..

 Advance implementation of online eligibility verification and electronic prescriptions (Ministry of Health, Labourand Welfare)
Cooperation in the e-prescription model project aimed at launching e-prescription services in advance within four regions in Japan(Sakata, Yamagata Prefecture; Sugakawa, Fukushima Prefecture; Asahi, Chiba Prefecture; and Asa, Hiroshima Prefecture), in
response to a request for cooperation from the Ministry of Health, Labour and Welfare.
Continued project for advance implementation of new features for online eligibility verification and electronic prescription systems
after November 2023

＜Support activities based on co-creation of value with customers＞
 Commencement of acceptance of donations of EM Online Shop points (Japanese Red Cross Society and WFP)
Addition of a donation item to the conversion destination of points granted to customers based on the purchase amounts of supplies
and consumables.
10% of the donation amount added to the total by the Company following compilation of data.

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

32

Ⅲ. ⅰ. Company Initiatives / Enhancement sustainability management
 Disclose non-financial indicators, achievement of long-term targets, and present summary of progress (2023 ESG Data) Disclose details on the sustainability website（Link）[Human Capital-related Initiatives]• Full-scale operation of human resource education and training
system development• Provision of opportunities to self-enhance skills (e-Learning)• Introduction of employee engagement surveys•
Issues relating to organizational culture and human capital→Proactive reorganization, dialog between managers andemployees, and recruitment activities【 Target 】• Establishment of improving employee engagement scores as along-term target KPI

Employee Engagement
Rating*.

Long-term target
KPI(2030)「A」
be equivalent*Engagement ratings via Motivation Cloud by Link and Motivation Inc. Scores are calculated for a total of 11 levels
Target companies (as of November 2023): EM Systems Co., Ltd., EM Technology Lab, Pop-Creation, ChoQi Co., Ltd., Brick Pharmacy

External Evaluation• Recognized as an Excellent Corporation for Health & Productivity Management• 7th Nikkei Smart Work Management Survey 3.5 stars: one step up• S&P/JPX Carbon Efficient Index: First selection：continued authorization• FTSE Blossom Japan Sector Relative Index：continued authorizationＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

33

Ⅲ. ⅱ. Balance Sheet Summary （Units: Millions of yen）

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

34

Ⅲ. ⅲ. By Segment Sales Breakdown※Net sales by segment are the amounts before elimination of inter-segment transactions.

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

35

Ⅲ. ⅳ. Quarterly Sales（IT Systems for Pharmacies）
Quarterly Sales （Units: Millions of yen）

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

36

Ⅲ. ⅳ. Quarterly Sales（IT Systems for Clinics）
Quarterly Sales （Units: Millions of yen）

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

37

Ⅲ. ⅳ. Quarterly Sales（IT Systems for Long-term care/Welfare）
Quarterly Sales （Units: Millions of yen）

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

38

Ⅲ. ⅴ. By Segment Recurring Income Business
Quarterly Sales （Units: Millions of yen）

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

39

Ⅲ. ⅵ. Recent Trends in Number of Customers

IT Systems for PharmaciesＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

IT Systems for Clinics(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

IT Systems for long-termcare/welfare40

Ⅲ. ⅶ. M&A Strategy (Track Record and Effectiveness)Growth over 10 yearsAcquired seven companies in order to expand market share in the pharmacy market andacquire customers as the foundation for entering new markets
The target companies have low profit margins due to insufficient scale, enabling acquisition at low valuations
Our intention is to continue actively pursuing M&As
Units：Millions of yen
due to the large number of mid-sized software companies in the market
FY2013

M&A
effectiveness

Number of Customers Acquisition Amount

M&A Track Record
Unicon Co., Ltd.

Clinics

Goodwill

Goodwill Amortization(FY)1,590 locations

22

230

Amortized

2,492 locations

147

160

Amortized

4,312 license

125

83

16 ※Ending March 2024

6,800 license

69

391

58 ※Ending March 2024

119 locations

7

△4

ー

2,949 locations※

903

532

106

2,446 locations※

1,343

2,153※

123※

FY2014

20,716

Cosmo systems Co., Ltd.

FY2018Janis Co., Ltd.

MW Soft Co., Ltd.

Pharmacies

long-termcare/welfare
long-termcare/welfare

FY2019
Pop・Creation Co., Ltd.

FY2023
Good Cycle System Inc.
Unike Software ResearchCo., Ltd.

Clinics

Pharmacies
Pharmacies(※Excluding overlap with EM)

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

（※Number of intangible assets 1,190）（※Number of intangible assets 59）(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

41

Ⅲ. ⅶ. M&A Strategy（Billing Sales and Sales of Recurring Income）


M&As greatly contributed to expanding customer base and increasing billing and sales of recurring income

Two M&As this fiscal year also contributed to the growth of billing and sales of recurring income from Q2 and Q3, respectively

Trends in Sales of Recurring Income

YoY Change 39.8％UP
Trends in Billing Sales

1Q

2Q

3Q

4Q

1Q

FY 2022.12

2Q

3Q

4Q

FY 2014.3

FY 2023.12
Before M&A

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

Full-year
FY 2023.12

M&A Effectiveness(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

42

Ⅲ. ⅶ. M&A Strategy(Concerning the acquisition of Good Cycle System Inc. and Unike Software Research Co., Ltd.)

Complementary business
Good Cycle System Inc.

ＥＭ ＳＹＳＴＥＭＳ
ＣＯ.,ＬＴＤ.
．
Duplicate business
Unike Software Research Co., Ltd.

 Unike Software Research Co., Ltd. is a long-standing
pharmacy system company
 Currently has approx. 2,500 customers and approx. 4% of
the market share Major customers include leading pharmacy chains in the
Kanto area
 Acquisition essential for us to achieve a 50% share of thepharmacy market

 Good Cycle System Inc. has achieved the top share of the
medication history software market
 Heavy investments in medication history software in recent years
within its pharmacy-related operations
 Although we have our own medication history functions, we have
lagged behind dedicated software companies in terms of ease ofuse, etc.
 Expected cross-selling business opportunities
 Sales of Good Cycle System’s medication history system toour existing customers
 Sales of our receipt computers to Good Cycle System’s
existing customers
Business development made possible by achieving 50% of themarket share Increase in pharmacy market share by pulling even farther
ahead of the second and lower places Development of prescription data and expansion of databusiness in a way that other companies cannot imitate Provision of EHR infrastructure based on an overwhelmingly
large share of the pharmacy market
 Enhanced competitiveness in the clinic and long-termcare/welfare markets※EHR…Electronic Health Record

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

43

Ⅲ. ⅶ. M&A Strategy（Corporate Outline）

Good Cycle System Inc.
・Has accumulated a great deal of experience and technology in the electronic medication history system businessand maintains excellent system development capabilities
・More than 5,000 customers for its electronic medication history system
Main
Products

Smart Medication History “GooCo”“Followcare,” a follow-up support tool for medication and online medication guidance

Head office: Shibuya-ku, Tokyo Offices: 8 locations nationwide Number of employees: 82

Unike Software Research Co., Ltd.
・A 40-year veteran manufacturer of receipt computers and electronic medication histories
・Provides systems to more than 2,500 pharmacies, and has a high market share, especially in Japan’s threemajor metropolitan areas“P-CUBE n,” an integrated electronic medication history receipt computer system, andMain“SOS”, a business management and inventory optimization service
Products“SmartPOC,” a receipt computer-linked cash register system
Head office: Minato-ku, Tokyo Offices: 5 locations nationwide Number of employees: 110

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

44

Ⅲ. ⅷ. Shared Information System Foundation

Specialized Functions(Clinics & Pharmacies）

Pharmacy App

Clinic App(Medical Records)(Medication History, HQ
Functions)

Nursing care/welfare App
CommonFunctions（Clinics & Pharmacies）

Medical Exam. Hearing/ Prescription Bags /Pharmaceutical Info. / Inventory

Common Master/Contents(Medication/Prescription Check/Meal Recipes)

Counter Accounting/Receipt Billing（Medical Insurance, Nursing Insurance and Independent Local Aidfor Medical Expenses）

ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

Specialized
Functions（Nursing care/welfare ）(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

CommonMasterCommonEngine45

Ⅲ. ⅸ. How electronic prescriptions function
Electronic prescriptions are a mechanism for managing prescriptions electronically, and it is
now possible to refer to information on the most recent prescriptions and dispensing at
multiple medical institutions and pharmacies, and to check for duplicate medications, etc.
① Confirmation ofidentity/consent⑤ Confirmation ofidentity/consent④ Information navigation

My NumberCard

My Number
Card

Mynaportal &electronic prescription
record app

Patient

Health insurancecard② Confirmation ofprescription/dispensing information
and results of verification for
duplicate medications, etc.

Doctors anddentists

Patient

Electronic prescription
management service③Registration of prescription

Patient

Health insurancecard⑥ Obtention of prescription⑦ Confirmation of prescription/dispensing
information and results of verification
for duplicate medications, etc.

⑧ Registration ofprescription details

Pharmacist

Online credentials verification system

Hospital/Clinic
ＥＭ ＳＹＳＴＥＭＳ ＣＯ., ＬＴＤ．

Social Insurance Medical Fee
Payment Fund / All-Japan
Federation of National Health
Insurance Organizations

Pharmacy(C)2024 EM SYSTEMS Co.ltd. General Affairs Department All rights reserved.

Source: Ministry of Health,
Labor and Welfare electronicprescription website（https://www.mhlw.go.jp/s
tf/denshishohousen.html）

46

Contact:
EM SYSTEMS CO., LTD.
IR Section, General Affairs Department

Shin-Osaka Brick Bldg.
1-6-1 Miyahara, Yodogawa-ku,
Osaka 532-0003, Japan
https://emsystems.co.jp/ir/mailform.html

The contents in this presentation materials are based on assumptions judged to be valid and information available to
the Company’s management at the time they were prepared. The Company assumes no obligation to update or revise
any information, whether as a result of new information, future events or otherwise.
As forecasts contained herein are based on assumptions of numerous uncertain factors, actual results may differ
significantly from these forecasts for a number of reasons.