ＥＭＭＡ

Results of Operations
for financial year ended March 31 2019

EM SYSTEMS CO., LTD.
(TSE 1st Section: 4820)
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.

I.

『Results of Operations for financial year ended March 31 2019』i. Financial Highlights for March 2019
ii. Changes in consolidate results by fiscal yeariii. Changes in consolidate results by quarteriv. Balance Sheet Summary
v. By Segment Sales/Operating Profits
vi. By Segment Sales Breakdownvii. Business for Pharmacy and related businessviii. Business for Clinic and related businessix. Market Share and Number of Customers

II. 『Business Environment /Business Plan for financial year ended March 31 2020』
i. Business Environmentii. Measures of first half for year ended March 31 2020
iii. Forecast for the fiscal year ending March 2020
iv. shareholder returns
v. Shared Information System Foundation

III. 『Ms. Kimiko Date is appointed as Ambassador of EM Systems co.,LTD. 』
Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

2

Ⅰ. i. Financial Highlights for March 2019
Consolidated Results of the March 2019

Topics for March 2019
□ In November 2018, we announced our “MAPs Series,” ‘a Shared Information System Foundation’ applicable to all healthcare fields(clinic, pharmacies and nursing care/welfare).
□ We have commenced entrusting maintenance of hardware to manufacturers with the aim of streamlining maintenancepersonnel duties.

□ Implementation of M&A aimed at enhancing businesses for nursing care/welfare-oriented systems

・Acquisition of the business of Janis Corporation which possesses advantages in the field of disability welfare services
・Purchase of M_Win Soft Co., Ltd., which possesses advantages in the facility-based service field andthe service field targeting Community-based Integrated Care centers□ We have commenced transitioning from a focus on sales activities to a focus on marketing activities□ Income and profits decreased due to a reduction in initial OEM (Original Equipment Manufacturing) sales
Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

3Ⅰ. ⅱ. Changes in consolidate results by fiscal year
Flow-Based

Fully Stock-Based

Partially Stock-Based

Gross Sales

Values after March 2020are planned values.

(Millions of yen)
Financial year ended March 31

7,827

7,315

9,573

11,395

11,288

8,776

9,818

8,202

9,013

10,257

11,36911,257

13,19913,676

13,953

13,133

13,174

14,603

16,31018,045

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Business Profits

The main reasons why decreased business profit in 2020 compared to the previous year（1）The business model shift
gross margin percentage decrease (198) million yen
sales price decline(176) million yen（2）manufacturing cost increase(512 ) million yen （including depreciation (324 ) million yen )（3）selling, general and administrative expenses increase(344 ) million yen （ including Marketing cost(233 ) million yen )
622

455

1,317

1,740

1,010

-1,317

-721

86

835

1,209

1,672

1,232

1,861

2,597

3,063

2,622

1,358

2,003

3,243

4,552

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023Profit Margin

19.0%

20.0%

14.7%

15.3%

25.2%

22.0%
19.9%
10.3%

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

13.7%

2021

2022

2023

-15.0%

Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

4

Ⅰ. ⅲ. Changes in consolidate results by quarter
3,833

3,702

3,575

3,497

3,481

3,392

3,500

Sales
（Millions of yen）
売上高（百万円）

3,402

1,200

3,023

935

2,439
825

778

1,000
806

2,000
508

800

684
631

1,500

784

748

717
624

608

574

546

517

600

459
400

307
177

151

500

1,4002,768

2,692 2,732

1,000

3,516

3,192

3,113

3,025

2,500

3,505

3,321

3,248

3,000

3,760

営業利益（百万円）
profits （Millions of yen）
Operating

4,000

200

00
1Q

2Q

3Q

4Q

Financial
year ended
2015年3月期
March 31 2015

1Q

2Q

3Q

4Q

Financial
year ended
2016年3月期
March 31 2016

1Q

2Q

3Q

4Q

Financial
year ended
2017年3月期
March 31 2017
Sales
売上高

1Q

2Q

3Q

4Q

Financial
year ended
2018年3月期
March 31 2018

1Q

2Q

3Q

4Q

Financial
year ended
2019年3月期
March 31 2019

営業利益
Operating profits

Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

5

Ⅰ. ⅳ. Balance Sheet Summary （Units: Millions of yen）
Major YoY Changes
March 31 2018 March 31 2019Assets

YoY change YoY % change

21,89322,352459

2.1%

Current assets

11,592

10,930(662)(5.7%)

Fixed assets

10,30011,421

1,121

10.9%

Tangible fixed assets

1,580

1,676

95

6.0%

Intangible fixed assets

682

1,930

1,248

182.9%

8,037

7,814(222)(2.8%)

5,840

5,733(107)(1.8%)

Current liabilities

3,782

3,665(117)(3.1%)

Fixed liabilities

2,058

2,067

90.5%

16,052

16,619566

3.5%

15,924

16,536612

3.8%

Cumulative amount of othercomprehensive

(17)

(46)

(28)

164.1%

Stock acquisition rights

145

128

(17)

(11.7%)

Investments and other assets
Liabilities

Net assets
Shareholder's equity

Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

Cash on hand and in banks(1,000) millions of yen

Notes and accounts receivable

266 millions of yen

Software in progress

916 millions of yen

Goodwill

416 millions of yen

6Ⅰ.ⅴ. By Segment Sales/Operating Profits※Segmented sales and operating profits and losses are the amounts before elimination of internal transactions
between segments.

Business for Pharmacy ... Income and profits decreased due to a reduction in initial OEM sales.
Business for Clinic ... The number of MRN (Medical Recepty NEXT) customers steadily increased.
Accompanying this, billing sales have also smoothly increased.
Other business... Our pharmacy operation business is bullish. Our system businesses targeting nursing care
/ welfare providers have enabled active development of business through M&As.
Acquisitions through purchase increased sales, general and administrative expenses.
Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

7Ⅰ. ⅵ. By Segment Sales Breakdown(Millions of yen)
Financial year
ended March 31
2018

Financial year
ended March 31
2019

Net sales

13,953

13,133(819)(5.9%)

Business for Pharmacy and related business

11,307

10,476(831)(7.3%)(o/w initial sales)

4,960

3,940

(1,019)(20.5%)(o/w billing service sales)

3,778

3,891

113

3.0%

(o/w supply sales)

1,995

2,058

62

3.1%

(o/w maintenance service sales)

573

585

122.2%

1,765

1,704(61)(3.5%)(o/w initial sales)

889

800(89)(10.0%)(o/w billing service sales)

407

485

78

19.2%

(o/w supply sales)

94

97

3

3.4%

(o/w maintenance service sales)

374

320(53)(14.3%)

Other Businesses

1,029

1,063

33

3.2%

Adjustments

(148)

(109)

39

(5.9%)

Business for Clinic and related business

YoY % change

YoY change* Net sales by segment are the amounts before elimination of inter-segment transactions.

Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

8

Ⅰ.ⅶ. Business for Pharmacy and related business
Quarterly Sales （Units: Millions of yen）

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9

Ⅰ.ⅷ. Business for Clinic and related business
Quarterly Sales （Units: Millions of yen）

Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

10

Ⅰ.ⅸ. Market Share and Number of Customers
Business for Pharmacy

Number of customers

16,082Business for Clinic

Business fornursing care/welfare

Number of customers 2,618

Number of customers 13,500

Market share 32.2％

Market share 2.9％

Target population: 50,000

Target population: 90,000

Market share 5.4％

Target population: 250,000*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 ourpotential customers, and differ from the actual number of registered pharmacies and clinics.
*3 The number of nursing care/welfare customers handled by our company after conducting a detailed examination
may differ from the number prior to said examination.
(as of March 31 , 2019)Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

11

Ⅱ.ⅰ. Business Environment
Market environment
 The government has announced efforts toward spreading and expanding online examinations and online medication instructions.
However they grow at a sluggish rise.
⇒ Online examinations・・・・・・The regulatory reform conference proposed raising medical fee prices⇒ Online medication instructions・・Major chain pharmacies have declared their participation one after another through the application of
public medical insurance to special wards
 Proliferation of electronic medical records has exceeded 40% in clinics
 Due to the influence of the simultaneous reforms to medical fees and nursing fees in April 2018,
our major pharmacy operations business has seen decreased profits across the board
 Due to changes in the pharmacy operations environment, pharmacies chains havebeen hurriedly transitioning to holding companies restructuring through M&A, etc., one after another Wholesale-price negotiations with various drug wholesalers relating to new drug prices is resulting in increased difficulties in pharmacy
administration. (Guidelines from Ministry of Health, Labour and Welfare) It is possible for non-pharmacists to conduct picking and packaging operations (based on pharmacist instructions)(The General Affairs Division of the Pharmaceutical Safety and Environmental Health Bureau within the Ministry of Health, Labour andWelfare issued a notification to all administrative divisions dated April 2.)
 Increase in large-scale chain welfare facilities
 Symbiotic-type services have newly been established in order to make it easier for elderly and disabled individuals to receive services
at the same office

Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

12

Ⅱ.ⅱ.Measures of first half for year ended March 31 2020
Acquisition of new customers or those replaced from competitors through our new product (MAPs Series)

Active development of sales in the nursing care/welfare market utilizing the powerful business tool of EM Solutions and M-Win Soft

Commencement of development and improvement of product competitiveness in regard to MAPs for NURCING CARE in ourNursing care/welfare business

Contribution to industry standardization and cost reduction by provision of OEM through a common engine

Active investment in brandingActive development of marketing activitiesShift of branch-based sales resources toward the medical and nursing care/welfare markets

Collaboration with GLORY LTD. on a system to support input of prescriptions (Commencement of provision from Oct. 2019)

Promotion of work-style reform and improvement of work productivity

Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

13

Ⅱ. ⅲ. Forecast for the fiscal year ending March 2020
（Millions of yen）

Sales
Business for Pharmacy

Business for Clinic
Other Business
Adjustment

Operating Profits
Business for Pharmacy

Business for Clinic
Other Business
Adjustment

Ordinary ProfitsNet Income

Fisical year ended
March 31 2019(actual)

Fisical year ended
March 31 2020(forecast)

13,133
10,476
1,704
1,063
△ 109
2,623
2,389
2390(7)
3,248
1,971

13,174
9,423
2,202
1,648
△ 99
1,358
1,086
25820(7)
1,980
1,307

Compared toprevious year
0.3%
△10.1%
29.2%
55.0%
△9.3%
△48.2%△54.5%
7.9%－△2.8%△39.1%△33.7%※Segmented sales and operating profits and losses are the amounts before elimination of internal transactions between segments.

Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

14Ⅱ.ⅲ. shareholder returns
Aim at a payout ratio of 30%
Introduction of a system of special benefits for shareholders(Targeting shareholders in continuous retention of one or more shares)

40 YEN

51.1%

Interim dividend

55%

Year-end dividend

30 YEN

Commemorative dividend

45%
37.6%
34.1%

payout ratio(consolidated)
25.2%

20 YEN

21.4%

25.7%

18.5

20.3%

35%

27.7%

191925%111115%

15.5
10 YEN

7.5
1.25

03.75

YEN

9.25
6.75

11.25

11.75

7.5

7.75
44FY 2016

FY 2017

2.5

2.5

3.75

FY 2013

FY 2014FY 2015

1211.55%
6.588-5%
FY 2018

FY 2019

FY 2020(estimated)*We conducted stock splits on April 1st, 2016 and March 1st, 2018 at a ratio of two shares per one ordinary share.
The aforementioned information assumes that each stock split occurred at the beginning of March 2013.
Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

15

Ⅱ.ⅳ. Shared Information System Foundation

SpecializedFunctions(Clinics &Pharmacies）
CommonFunctions（Clinics &Pharmacies）

Pharmacy App

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

Medical Exam. Hearing/ PrescriptionBags / Pharmaceutical Info. /Inventory

Nursing care/welfare App

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

Counter Accounting/Receipt Billing（Medical Insurance, Nursing Insurance andIndependent Local Aid for Medical Expenses）

SpecializedFunctions（Nursing care/welfare ）CommonMasterCommonEngine

・ Cloud-based systems and system integration within healthcare fields (clinics , pharmacies and nursing care/welfare)・ Ability to link together those engaged in clinics, pharmacies and nursing care/welfare
・ Reduction in customer burden at time of introduction by enabling customers to procure desired equipment, learn how to operate the system and decide initial settings, etc. on their own
・ Medical examination function that combines “information from family doctors (in close contact with patients)” and “expertise in each field of medicine”
・ Functions that provide suggestions utilizing the latest technologies (A feature in which the system offers suggestions to customers)
・ Functions to support creation of medical records, medication records, etc
・ Reduction in customer burden by realizing no-cost initial licensing and reduced monthly costs

Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

16

Ⅲ. Ms. Kimiko Date is appointed as Ambassador of EM Systems co.,LTD.

Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

17

Contact:
EM SYSTEMS CO., LTD.
IR Section, Corporate Planning Department
Shin-Osaka Brick Bldg.
1-6-1 Miyahara, Yodogawa-ku,
Osaka 532-0003, Japan
TEL: +81-6-6397-1998
FAX: +81-6-6397-1890

The contents in this presentation materials are based on assumptions judged to be valid and information available tothe 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.