M3, Inc.

Presentation Material

O c to ber 2 0 2 1

Copyright © 2021 M3, Inc. All rights reserved.

The following presentation contains forecasts, future plans,management targets and other forward-looking projections relating toM3, Inc. and/or its group. These statements are drawn fromassumptions of future events based on data currently available to us,
and there exist possibilities that such assumptions are objectively
incorrect and/or may produce differing actual results from thosementioned in the statements.
Furthermore, information and data other than those concerning theCompany and its subsidiaries/affiliates are quoted from public
information, and the Company has not verified and will not warrant its
accuracy or dependency.
M3, Inc.

Copyright © 2021 M3, Inc. All rights reserved.

1

FY2021 H1 Consolidated Results(mn yen)Sales

FY2020 H1

FY2021 H1

YoY

75,022

97,647+30%

Operating
Profit23,931

61,941+159%

Pre-tax
Profit23,94362,232+160%

Net Profit

16,58742,747+158%+33%

excludingstockvaluation
impactsuch astheMedlive
IPO

Steady progress to the year
Copyright © 2021 M3, Inc. All rights reserved.

2FY2021 H1 Consolidated Results by Segment(mn yen)FY2020 H1 FY2021 H1YoY

Domestic

MedicalPlatform

Sales

30,91538,401+24%

Profit13,74816,725+22%

Evidence
Solution

Sales

9,603

10,132+6%

Profit1,631

2,053+26%

CareerSolution

Sales

8,194

8,180-0%

Profit

2,824

3,445

+22%

Site
Solution

Sales

7,976

17,480+119%

Profit829

2,560+209%

Emerging
Businesses

Sales

1,430

1,518+6%

Profit340-429－Sales

18,314

24,398+33%

Profit5,083

38,108+650%

Overseas

Copyright © 2021 M3, Inc. All rights reserved.

 Marketing supportsales +28%
 Continued upfront
investment in staff
reinforcement

 Contribution partly
from vaccine
support services forcorporates andmunicipalities Negative impact
from stock valuation
changes 30.9 bn yen profit
from Medlive IPO

3

FY2021 H1 Consolidated Operating Profit Contribution(mn yen)Contribution
from vaccine
support services

Continued
demand frompharma
2,094

1,731

621

Stock valuation
changes422

30,931-769

338,0102,97861,941

23,931FY20

Healthy
overall

31,010Adjust.

FY21* China IPO Related: Gains from deconsolidation and change in equity minus IPO fees

Copyright © 2021 M3, Inc. All rights reserved.

4

FY2021 H1 Overview
MedicalPlatform Continued healthy demand due to accelerated digitaltransformation in pharma marketing Temporary margin compression from upfront investment on
significant staff reinforcement, recovery expected from H2and into next FY

EvidenceSolution

 On recovery path as COVID related negative impact dissipates Orders backlog increased to 29.6 bn yen with increase in COVID
related projects

CareerSolution

 Business expanded with contribution partly from vaccine
administration support services Overall strength with alleviation from negative COVID impact

SiteSolution

 Vaccine administration support services remain strong Growth seen in core businesses such as the home nursing careservices

Overseas Healthy across all regions, despite deceleration in contribution fromthe US clinical trial business in Q2
 Significant profit contribution from Medlive IPO
Copyright © 2021 M3, Inc. All rights reserved.

5

Pharmaceutical Sales & Marketing DX

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6

Pharma Marketing Cost and TAM for M3
PresentFuture

M3’s RoleIndustry
productivity
improvementfrom DXMR
RelatedCosts
1.5 tn yen

Internet50 bn yen

97%
70~80%

3%

20~30%

700~800
bn yen(2) MR Activity
DX Support

200~300
bn yen(1) InternetMarketing
Support(3) Data-driven
MarketingSupport= TAM

M3 involvement to go beyond the bounds on the internet
to improve productivity across the entire industry
Ref: M3 survey and estimate; numbers are approximate

Copyright © 2021 M3, Inc. All rights reserved.

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eCSO：Medical Marketers
Typical CSO

Medical Marketer

Localized Physical Visits

Nationwide eDetails

Coverage80~150 physicians

500~1,000 physicians# of Details

150~200 per month

2,000~4,000 per monthInteraction

net 1~2 hrs/day

net 5~10 hrs/day

Methodmainly physical visits

eDetails allow physician
profiling data
accumulation applicablefor customization

Medical Marketers relay information via full utilization of digital tools,
curtailing time loss of travel and waiting, and visitation restrictions
Copyright © 2021 M3, Inc. All rights reserved.

8Service Scope Expansion
Firm-Wide DX Support

Per Product Support
Theme

Efficient promotion

Fundamental productivity
improvement of the marketingand sales processes

ClientProduct manager

Top management

Marketing per individualdrugOptimization of marketing andsales of entire drug portfolio

ServiceStrategy

MR-kun, Web Conference,etc.

Complete solution provisionsuch as marketing strategy
planning and resource
allocation data

Contract
FormatContracts per productComprehensive strategic
alliances

ServiceCoverage

Drastic structural reinforcement implemented to support pharmaceuticalDX support… a new paradigm shift in collaboration with pharma companies.
Copyright © 2021 M3, Inc. All rights reserved.

9

Productivity of Professional Staff
Sales per Staff

Value Add per Staff (gross profit)(indexed)(indexed)

10~20

4～6

overover４x1

Typical DX
Consulting
Firm

10x1M3

Typical DX
Consulting
Firm
Copyright © 2021 M3, Inc. All rights reserved.

M310Value Add

M3 vs. DX Consulting Firms
Consulting Firms

M3

StrategyPlanning✔✔

✔✔

Platform/
Client Reach－✔✔

MR-kun, myMRkun, others

Date－

✔✔

Broad range ofreal world data

ExecutionSupport✔

✔✔

Rapid PDCA
based results

OutputPlanConcrete business
impactFee

Consulting fee

Solution fees, Revenue
share, others

Solution provision by M3 professionals that span acrossmultiple M3 assets (ex. DX support)
Copyright © 2021 M3, Inc. All rights reserved.

11

Professional Staff Fortification Plan(indexed)

375~500

ExternalConsultants

 HR capacity
increase Recruiter
reinforcement(fee scale)200
approx.

100

 New grad
recruitment
fortification

60%

FY2019

NOWFew years
from now..

121(pre-COVID)
Cost per
Staff

40%

approx.

M3
Employees

Staff Fortification
Initiatives

Temporaryincrease due
to outsourcing

Normalizedwith proper
hires

Copyright © 2021 M3, Inc. All rights reserved.

 Appeal potential
M3 career paths
and merit(skill acquirement,compensation, etc.)

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Sales per M3 Professional Staff(indexed)

130~
115

100Key Productivity
Improvement Factors
 Expansion ofrecurring services
 Deal enlargement New serviceutilization
 Enhanced staff
training

FY2019(pre-COVID)

NOWFew years
from now…

Copyright © 2021 M3, Inc. All rights reserved.

 Staff productivity
improvement(remote meetings,etc.)
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M3 Career Path Options
Recruiting Material

Business Phase Options

0➞1 Phase Management(ex: Clinic DX, 7P)

M3Professional
Staff

1➞10 Phase Management(ex: overseas regional head)

10➞100 Phase Management(ex: pharma platform)

Access to various staged businesses in building management
skills and track records upon success within core businessareas such as the Medical Platform. Increasing job applications
from young consultants aspiring to become entrepreneurs.
Copyright © 2021 M3, Inc. All rights reserved.

14

New Grad Recruitment Fortification
2021 Internship Program Over 6,500 university
applicantsTop5 schools:– Keio：1,058– Waseda： 981– Kyoto U.： 654– Osaka U.： 467– Tokyo U.： 408

M3 offers:

Strategy Planning Skills attainable in consulting firms
 M&A Experience attainable in investment banks
New Business Development Knowhow attainable inIT mega ventures
A Global Perspective attainable in trading companies

 Applications
from10~20% of
graduating students
from majoruniversities

Proactively hiring top graduate and early career candidates
Copyright © 2021 M3, Inc. All rights reserved.

15

DX of the Clinical Scene

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16

Potential in DX of Clinics
Current

Post DX

AccessLong waiting timein lobbies

Online reservations

Diagnosis

OfflineOnline/Offline Hybrid

Payment

Wait to pay atservice desk

Head straight home(digital payments)

RxLocal pharmacy

Delivered to homeor office

MedicalRecords

Difficult access

Review own healthrecords online

MidnightEmergencies

Wait until nextmorning

24/7 Online Service

Advancement in DX of the clinical scene offers a complete
renewal of the patient experience (ex. M3 Clinic Network)
Copyright © 2021 M3, Inc. All rights reserved.

17

M3 DigiKar EHR Growth
Number of Sites Using M3 DigiKar

3,000

FY151617181920

 Over 3,000 medicalsites have adopted
DigiKar No.1 in annual
adoptions acrossboth cloud and onpremise electronic
health recordsystems

21FCT

Incontestable #1 market share within cloud based digital
health records, with almost 70 million charts on record
Copyright © 2021 M3, Inc. All rights reserved.

18

LINE Doctor Development
LINE Doctor Usage (consultations)approx.

2.5x

Jun 2021

 Trial phase launched in
Dec 2020 across centralTokyo Usage increased by 2.5x
compared to June, onback of spike in COVID
cases

Aug 2021

Further penetration across medical sites given spike in
COVID cases in August
Copyright © 2021 M3, Inc. All rights reserved.

19

DX of Medical Field: M3 DigiKar Smart
Medical Institutions:Managing System

Patients:
Mobile App

AppointmentAutoReception

Next
Appointment

M3 DigiKar Smart

One-Stop Functionality

 Less reception work Less system costs
 Infectious disease
control Facilitation of returnvisits and continuity ofCare

Consultation

PaymentLinking toEMR

 No bulky patient cards
 Cashless payments
 Less wait time Treatment
continuation withappointment
remindersA more secure and convenient medical experience andfollow-up system launched in October.
Copyright © 2021 M3, Inc. All rights reserved.

20

COVID-19 Related Projects

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21

COVID Vaccine and Treatment Related Initiatives
Vaccine Administration

Japan

Overseas

Corporates

Municipalities

〇〇

(129)

(139)

✕✕

Clinical Trials
Medical Sites〇(vaccines,treatments)〇(vaccines,treatments,boosters)

Vaccine services to support 7.25 million administrations.
Expected orders for booster administration in Japan and global
clinical trials, with high potential for new demand emergence.
Copyright © 2021 M3, Inc. All rights reserved.

22

Japan’s 1st Virtual Clinical Trial at Medical Hotel① Entry into medicaltreatment hotel facility
Transport arranged bygovernment

COVID Patient② Entry orientation

Trial introduced by attending physician

MedicalTreatment
Facility Nurses stationed at facility
 Physicians communicate
onlineImplemented via collaboration between multiple stakeholders suchas the government, medical facility, home care nurses, and SMOs
Copyright © 2021 M3, Inc. All rights reserved.

23

M3 Growth Strategy for 2020’s

Copyright © 2021 M3, Inc. All rights reserved.

24

Business Scope Expansion and Growth Potential
2010
Country

：

3 →

2015

2020

8 (2.5x) →11 (3.5x)

Business Types：

6 →

15 (2.5x) →Business Units

：

10 →

24 (2.5x) →Sales (bn)

： 14.0 →(Type x Country)

Similar pace35 (6.0x) of growth
expected
56 (5.5x) over the next
10 years

64.7 (4.5x) → 169.1 (12x)Aggressive business development to ensue in reaching
growth potentials exceeding 10~20x current levels…
Copyright © 2021 M3, Inc. All rights reserved.

25

M3: 2020 Triple Growth Engine for the Next Decade① Existing
BusinessDevelopment
M3:
Growth Drivers
for theNext 10 Years② Expansion ofBusiness Areas(Sagrada Expansion)③ Ecosystem
SynergyActualization

 5~10x growth potential remain
even in legacy businesses suchas pharma marketing DX of clinics and DX abroadlargely scaling on back of
COVID impacts
 Continual entry into newregions and businesses Expansion of M&A pipeline andstrong PMI track record
 Large theme over the next 10years
 Exponential potential growthwith increase in business areas Profit impact already reaching
several billion yen

Aspiration in the next decade for acceleration and growthequivalent or even larger than seen over the past 20 years.
Copyright © 2021 M3, Inc. All rights reserved.

26

Increase in M&A
Number of Deals That Were Evaluated26719018660

FY1575

FY16111FY17144

FY18FY19

FY20

FY21

M&A activity and pipeline continue rapid acceleration in line withbusiness expansion. Number of executions and size are also increasing.
Copyright © 2021 M3, Inc. All rights reserved.

27

M3’s Paradigm Shift
Internet Service
Movement 1: 2000-2009

e x Real Operations
Movement 2: 2010-2019
Ecosystem Synergies
Movement 3: 2020- MR-kun Family Market Research e-Clinical Trials
 M3 Career(Job placement forphysicians)

Copyright © 2021 M3, Inc. All rights reserved.

 7P Projects Monetization
through projects
with autogenic
synergygeneration28

１２３４0136・・・

ｎNumber ofbusinesses

Synergy
Links

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nC229

Business Scope Expansion and Growth Potential

2010
Country

：

3 →

2015

2020

8 (2.5x) →11 (3.5x)

Business Types：

6 →

15 (2.5x) →Business Units

：

10 →

24 (2.5x) →Sales (bn)

： 14.0 →(Type x Country)

Similar pace35 (6.0x) of growth
expected
56 (5.5x) over the next
10 years

64.7 (4.5x) → 169.1 (12x)Synergy potential between businesses: 56C2 ＝ 1,540
Copyright © 2021 M3, Inc. All rights reserved.

30

COVID-19 Ecosystem Synergies
Involved Segments

VaccineAdministration

Vaccine/Treatment
Development

Segments

MedicalPlatform
CareerSolution
Evidence
Solution
Site
Solution7.25 million vaccine
administrations

Agile development ofdomestic treatments
and vaccines

Value creation feasible only through coordination acrossmultiple M3 businesses
Copyright © 2021 M3, Inc. All rights reserved.

31

Synergy Potential Between Businesses
Business Synergy Potential Curve

Number of Synergies

12,00010,0008,000
6,0004,000562,0000050Businesses

100150

10C2 ・ ・ ・ ・56C245 ・ ・ ・ ・ 1,540

Number of Businesses
Exponential synergy potential growth with increase in the number of businesses
Copyright © 2021 M3, Inc. All rights reserved.

32

Ecosystem Synergy Creation Flow

Reinforcementof Ecosystem

StructuralDifferentiation

Investment TargetExpansion

Self-reinforcing expansion cycle powered by superbly capable staff.
Talent fortification structure development to further bolster cycle
sustainability.
Copyright © 2021 M3, Inc. All rights reserved.

33

M3’s CSV Impact （1/2）
Information Provision for Physicians

5.4 million views via information delivery such as Webinars
FY2020

Productivity Improvement for Pharma Companies

Distribution of 100 million e-details = workload of 50,000 MRs(equivalent to total number of MRs in Japan)
FY2020

Medical Examination Support

Supporting medical examinations through management ofinformation across 100 million electronic health records,
domestically and abroad
As of FY2021

Pharmaceutical R&D Optimization

Involved in over half of all marketed new pharmaceuticals inJapan, supporting 80% of companies developing COVID relatedproducts overseas
Past 3 years

Actualizing M3’s mission across various areas, to reduce unnecessary
medical costs and to support healthier lives using digital technologies.
*CSV = Creating Shared ValueCopyright © 2021 M3, Inc. All rights reserved.

34

M3’s CSV Impact （2/2）
Vaccine Administration Support
Supporting 7.25 million administrations of the COVID vaccine
As of FY2021

Professional Advice Provision for Health Concerns
Offering physician answers to daily health concerns
via 240+ thousand posted questions, gathering over
40 million UU views annually
FY2020In-Office Time Reduction
Reduced approx. 20 million hours of in-office lobby wait-time
for patients
FY2020; based on 23.3 million receptions

Career Support for Medical Professionals
Supported placements of approx. 7,100 physicians andpharmacists globally
FY2020

Actualizing M3’s mission across various areas, to reduce unnecessary
medical costs and to support healthier lives using digital technologies.
*CSV = Creating Shared Value

Copyright © 2021 M3, Inc. All rights reserved.

35

Annual Results
Sales

Operating Profit & Net Profit
169,198(mn yen)57,972(mn yen)Operating Profit
Net Profit

130,973
113,059

41,19834,33730,80027,48625,05024,153
21,34620,022
19,225

94,471
78,14364,66051,346

16,93816,061
13,73813,49336,759107 480 891

26,007
19,0408,534
14,646
5,729
11,811
2,276
7,475
3,854
1,563

7,648

8,878

10,4286,031
5,598
3,990 4,803 3,486 4,492
3,597
2,677
1,683
2,363
895
1,938
255 5091,609 1,965
46 62 136 279 493 991

FY
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20(6m)9,294-93 -93

FY
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20(6m)Forecasts were not given due to unpredictable variables, basic
outlook is for continued growth.
Copyright © 2021 M3, Inc. All rights reserved.

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