M3, Inc.

Presentation Material

April 2021

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

FY2020 Consolidated Results(mn yen)Sales

FY2019FY2020YoY

130,973

169,198+29%

Operating
Profit34,337

57,972+69%

Pre-tax
Profit34,61058,264+68%

Net Profit

24,153

41,198

+71%

IFRS

+74%

growthexcluding
impactssuch asstock
sales andvaluation
changes

Profit increase accelerated to +81% in the three months of Q4
versus previous year, excluding impacts such as asset sales andvaluation changes Copyright © 2021 M3, Inc. All rights reserved.

2FY2020 Consolidated Results by Segment(mn yen)Domestic

FY2019FY2020YOY

MedicalPlatform

Sales

51,27077,076+50%

Profit19,25337,903+97%

Evidence
Solution

Sales

21,365

19,473-9%

Profit

4,699

3,618

-23%

CareerSolution

Sales

15,393

13,537-12%

Profit

4,151

3,753

-10%

Site
Solution

Sales

12,223

16,555+35%

Profit

944

1,537

+63%

Emerging
Businesses

Sales

3,286

3,328+1%

Profit

513

950

+85%

Sales

29,96142,147+41%

Profit5,722

12,599+120%Overseas

Copyright © 2021 M3, Inc. All rights reserved.

+107% YoY
profit growth
excluding impact
such as stocksales
Temporary
demand decrease
due to COVID-19
Continued
strength from Q3,
reinforce upfront
investment

Led by strength in
US clinical trials
and APAC

3

FY2020 Consolidated Operating Profit Contribution(mn yen)

Robust US clinical trials, COVID-19
related demand continued in APAC
Demand expansion
from pharmacompanies

6,877
18,650Stock valuation
changes

Temporary demanddecrease due to COVID-19-398-1,081

436

594-1,442Strong23,635

Recovery fromCOVID-19 impact

57,972

34,337FY19Adjustment

Copyright © 2021 M3, Inc. All rights reserved.

FY204

FY2020 Overview
COVID-19 Impact

MedicalPlatform Accelerated digital transformation in pharma marketing myMR-kun becoming established as a new platform++

Evidence
Solution Orders backlog remained steady at 24.5 bn yen despite
partial halts in projects due to COVID-19_Career
Solution Dampened activity for pharmacists full-time and temp
placements, minimal impact on physician base_Site
Solution Increase in affiliate sites; increase in COVID-19 related
projects supporting continued strong results+EmergingBusinesses New business seeds being planted at an aggressive pace
geared towards DX of the clinical scene, starting with online
medicine+Overseas

 Substantial profit contribution from robust US clinical trial
business
 APAC continues growth trend++

Copyright © 2021 M3, Inc. All rights reserved.

5

m3.com Platform Strength

Copyright © 2021 M3, Inc. All rights reserved.

6

m3.com Tops 300,000 Members, Gross Profits Double
Gross Profit per Physician
 m3.com members topped
300,000 (92% of all Japanesephysicians)+108%

FY2019
Q1-Q4

FY2020
Q1-Q4

 Dramatic increase in member
activity and active member
ARPU, doubling gross profit
per member vs previous FY
 Positive impact on resultsfrom fortification of platform
strength, in addition toincreased demand frompharma companies

m3.com strength expected to augment further in FY21
Copyright © 2021 M3, Inc. All rights reserved.

7

M3 Ranks Top as “Most Useful Medical Information Source”
Information services such as“MR-kun” on membership sites

60%

MRs

41%

Webinars and study groups
hosted by pharma companies

41%
36%

Publications and dissertations
Releases and excerpts frommedical societies

22%

Peers and professors

21%

Product compendiums

20%

M3 ranks top for the first time since launch of this survey
five years ago
Ref: mixonline.com, Feb 2021

Copyright © 2021 M3, Inc. All rights reserved.

8

Pharmaceutical Sales & Marketing DX

Copyright © 2021 M3, Inc. All rights reserved.

9

Pharma Marketing Cost and TAM for M3
PresentFuture

M3’s Role

Industry
productivity
improvementfrom DXMR
RelatedCosts
1.5 tn yen

Internet30 bn yen

98%
70~80%

2%

20~30%700~800
bn yen(2) MR Activity
DX Support

200~300
bn yen(1) InternetMarketingSupport(3) Data-driven
MarketingSupport

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.

10Internet Marketing Services
MR-kun Sales

Webinar Sales

3.2x
1.5x

FY2019FY2020FY2019FY2020

Messaging by pharma companies via m3.com
expanded significantly
Copyright © 2021 M3, Inc. All rights reserved.

11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.

12

DX of the Clinical Scene

Copyright © 2021 M3, Inc. All rights reserved.

13DX of Clinics
Current

Post DX

AccessLong waiting timein lobbies

Online reservations

Diagnosis

OfflineOnline/Offline HybridPayment

Wait to pay atservice desk

Head straight home(digital payments)

RxLocal pharmacy

Delivered to homeor officeMedicalRecords

Difficult access

Review own healthrecords online

Midnight
Emergencies

Wait until nextmorning

24/7 Online Service

Proactive support for DX of the clinical scene; total businesspotential expected to be larger than pharma marketing support
Copyright © 2021 M3, Inc. All rights reserved.

14DX 1：M3 DigiKar EHR Growth 2,600 cumulativeadoptions
 Record highadoptions during themonth of March

2,600

FY15161718192021FCT NO.1 in annual sales
across both cloudand on-premise
electronic healthrecord systems

70% market share within cloud based digital healthrecords (#1 by far), with over 50 million charts on record
Copyright © 2021 M3, Inc. All rights reserved.

15

DX 2: LINEDoctor
 Service launched in Tokyo
metropolitan area, withupcoming sequential
rollout across Japan PDCA based improvements
to be made based on firstwave
 LINE character “Brown” toadorn starter kits at clinics

Telemedicine service rollout utilizing the familiar LINE app.
LINEDoctor NPS is at +42, highlighting high user satisfaction
Copyright © 2021 M3, Inc. All rights reserved.

16

Ref: M3 Service NPS (Net Promoter Score®)
Multi Opinion Service, Medical ConsultantsEndorsers 63％
Indifferent 16％
Critics 21％＝42

Q: Would you recommend this service to a friend?

Net Promotor Score® Calculation Method
Calculation Method
Critics

0123
Low probability ofrecommendation

Indifferent Endorsers

45678910High probability ofrecommendation

NPS ＝ Endorsers - Critics
Copyright © 2021 M3, Inc. All rights reserved.

Endorsers
Indifferent
Critics

63%
16%
21%

NPS = 63 – 21 = 4217

LHC：Disease Awareness for the General Public
Number of “Friends” on LINEHealthcare’s LINE Official Accounts
Disease and Treatment Awareness

Hay Fever＠

2.39+ million

PMS＠

280+ thousand

Psoriasis＠BeautyLabo＠

420+ thousand

Treatment Support

Mimamoria＠28+ thousand

43+ thousand＋＋

Dr. Hypertension＠20+ thousand

Dry Itchy Skin in Kids＠

18+ thousand

Disease awareness projects across multiple TA underway in addition
to the above seven; further expansion expected going forward.
As of April 13, 2021

Copyright © 2021 M3, Inc. All rights reserved.

18

DX 3: Cashless Payment (expected May launch) 300,000 physician
panel base Expertise in cloud
based service
development for
medical facilities
 Reception andpayment connectivity
with No.1 cloud
based EHR system
DigiKar

Improvement ofsafety andpracticality inclinicalenvironments via
DX support and
COVID-19
solutionsPayments

 World-class
functionality and APIusability
 Advanced technology
based safety andreliability
 Product strength thatallows for innovative
business models

Continued DX support for the clinical scene beyond payment
systems; future expansion in appointment systems, medicalquestionnaires, patient registration tickets, and more.
Copyright © 2021 M3, Inc. All rights reserved.

19

FY2021 Outlook

Copyright © 2021 M3, Inc. All rights reserved.

20

FY2021 Outlook
Outlook

MedicalPlatform

 m3.com platform strength to continue increase myMR-kun to continue growth as pharma DX evolves

Evidence
Solution Restart and acceleration of trials halted during
COVID-19+CareerSolution

 Improvement trend; vaccine related project may also
contribute+SiteSolution

 Further fortification of upfront investments; profits
may dip as a result from healthy growth activities-/+

EmergingBusinesses

 Aggressive investment into DX of the clinical scene,such as telemedicine-/+Overseas

 US clinical trial orders looks to remain positive withcurrent backlog of USD 90 million
 APAC including India and China remains healthy+Copyright © 2021 M3, Inc. All rights reserved.

++21

M3’s COVID-19 Efforts
Vaccine & Treatment
Development

Vaccine Dissemination
Support

Vaccine Information forMedical Sites

・Involved in mostly allCOVID-19 related
vaccine and treatment
trials in the US

・Vaccine dissemination
support across municipalities
utilizing M3’s physiciannetwork
・Collaboration with ChangeInc., capitalizing on theirstrong network acrossmunicipalities

・Vaccine related
information provisionand support towards
medical sites (sponsoredby pharma companies)

Contribution to COVID-19 solutions via vaccine
dissemination support following efforts in clinical trials
Copyright © 2021 M3, Inc. All rights reserved.

22

M3 Growth Strategy

Copyright © 2021 M3, Inc. All rights reserved.

23

Business Scope Expansion and Growth Potential
2010
Country：

3 →

2014

2018

5 (1.5x) →10 (3x) →Similar pace26 (4x) → of growth
expected
41 (4x) → over the
next 4 years

Business Types：

6 →

10 (1.5x) →Business Units

：

10 →

18 (2x)

Sales (bn)

： 14.0 → 37.0 (2.5x) → 94.5 (7x) →(Type x Country)

→

2022

Aggressive M&A to ensue in reaching growthpotentials exceeding 10~20x current levels…
Copyright © 2021 M3, Inc. All rights reserved.

24

Increase in M&A
Number of Deals That Were Evaluated
267
186
11160

FY1514475FY16

FY17

FY18

FY19

FY20

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

25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
1,563FY
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20(6m)

7,648

9,294

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 62 136 279 493 991-93 -93

FY00 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.
* FY17 results retroactively restated according to IFRS9 (Financial Instruments)
Copyright © 2021 M3, Inc. All rights reserved.

26