Summarized Translation

Financial Results Overview(September 2015)
November 22nd, 2015
EPS Holdings, Inc.

Copyright © 2015 EPS Holdings All rights reserved.

Disclaimer

The earnings estimates and future predictions described in this document are made by
our company based on the available information at the time of the creation of the
document, and contain potential risks and uncertainties. Therefore, due to various factors
such as change in business environment, it is possible that actual earnings results may
differ greatly from the future outlook mentioned or described herein.
We prepared this document with caution, to ensure correctness. However, it is not aguarantee of completeness. Our company cannot be held liable for any problems or
damages arising as a result of the information in this document. We appreciate yourunderstanding.

■For inquiries about this document
EPS Holdings, Inc.
Corporate Planning Officee-mail ：ir@eps.co.jp

1

Copyright © 2015 EPS Holdings All rights reserved.

Contents

1. Financial Results Overview (September 2015)
2. Fiscal Year September 2016 Earnings Estimates
3. Future Business Strategies• Management Integration with Sogo Rinsho
Holdings Co., Ltd.
• Strengthening of the Clinical ResearchBusiness2

Copyright © 2015 EPS Holdings All rights reserved.

Contents

1. Financial Results Overview (September 2015)
2. Fiscal Year September 2016 Earnings Estimates
3. Future Business Strategies• Management Integration of Sogo Rinsho
Holdings Co., Ltd.
• Strengthening of the Clinical ResearchBusiness3

Copyright © 2015 EPS Holdings All rights reserved.

2015/9 Business Segment of EPS group
※1

Japan
Business

CRO

EPS, EPS Associates, EP-Mate, e-Trial

SMO

EP-Mint

CSO

EP-PharmaLine

Business※2

Business※3

Business
Overseas
Business※4

OthersEPS International Holdings

EKISHINEPS EKISHIN, EPS(China) etc

BPO

EPI, EPI(Suzhou), EPI Yamanashi

Business※5

4

GlobalResearch

Business

OthersEPSI(China), GRI(USA), EPS GR(GCRC) etc

EPBiz※1：CRO：Contract Research Organization※2：SMO：Site Management Organization※3：CSO：Contract Sales Organization※4：EKISHIN：China Business※5：BPO：Business Process Outsourcing
Copyright © 2015 EPS Holdings All rights reserved.

2015/9 Earnings Results (Consolidated)（ UNIT:JPY MILLION ）2014/9Results

2015/9BudgetNet Sales

41,800Operating
IncomeRatio for
BudgetYoY
ChangeYoY(%)

44,12045,202 102.5%

3,402

108.1%

4,491

4,625

5,482

991

122.1%（％）(10.7%)(10.5%)(12.1%)

Ordinary
Income

4,242

4,327

5,362

（％）

(10.1%)(9.8%)(11.9%)Net Income

1,828

1,937

2,163

（％）

(4.4%)(4.4%)(4.8%)

5

2015/9Results

118.5%

123.9% 1,120 126.4%
111.7%

335

118.3%

 Sales of all four segments (CRO Business (Japan), CSO Business (Japan), GR, andEKISHIN) exceeded budget, and total sales rose by 8.1% year‐on‐year.
 CRO Business (Japan) contributed operating income to rise by 22.1% year‐on‐
year, and to exceed budget by 18.5%.
 Ordinary income also rose by a large margin of 26.4% year‐on‐year and exceededbudget by 23.9%.
Copyright © 2015 EPS Holdings All rights reserved.

Sales Trend, Year-On-Year Change

Net sales
売上⾼（ UNIT:JPY MILLION ）60,00030%

50,00040,00030,00029,451

32,04035,20237,58441,80045,202

25%
20%
15%

20,00010%

10,0005%

00%2010/96Previous
対前年⽐
year ratio

2011/92012/92013/92014/92015/9Copyright © 2015 EPS Holdings All rights reserved.

Operating Income, Operating Margin Trend

Operating
営業利益
Income（ UNIT:JPY MILLION ）

7,000

30%

6,000
5,000

Operating
営業利益率
Income ratio

4,415

4,803

5,482

5,174
4,491

20%

3,497

4,000

25%

15%

3,000
10%

2,000
1,000

5%

0

0%
2010/97

2011/92012/92013/92014/92015/9Copyright © 2015 EPS Holdings All rights reserved.

2015/9 Net Sales by Business Segment（ UNIT:JPY MILLION ）2014/9Results

Japan
Business

Overseas
Business

8

2015/9Budget2015/9Results

Ratio for
BudgetYoY
Change

YoY
(%)

CRO

24,190 24,833 25,219 101.6% 1,029 104.3%

SMO

6,287

6,800

6,486

95.4%

199

103.2%

CSO

5,974

6,500

6,788

104.4%

814

113.6%

GR

2,192

2,226

2,773

124.6%

581

126.5%EKISHIN(China)

3,507

4,050

4,274

105.5%

767

121.9%

Copyright © 2015 EPS Holdings All rights reserved.

2015/9 Operating Income by Business Segment（ UNIT:JPY MILLION ）2014/9Results

Japan
Business

Overseas
Business

2015/9Budget2015/9Results

Operating Ratio for
YoY
IncomeBudget Change
ratio

CRO

3,803 4,612 5,491 21.8% 119.1%

SMO

900

950

691

10.7%

CSO

259

350

383

GR

-250

-50

EKISHIN(China)

-117

0

YoY
(%)
※

-

-

72.7%

△ 209

76.8%

5.6%

109.4%

124

147.9%

-31

-

-

219

-

30

0.7%

-

147

-

※ The EPS Group implemented a holding company structure from January 1, 2015. In terms of operating income above, expenses
associated with the holding company, which are not allocated to each segment, are disclosed. Because the previous term’s earnings
data for CRO Business (Japan) contained an equivalent amount of expenses that were associated with the holding company, we do
not disclose year‐on‐year changes for this data.

9

Copyright © 2015 EPS Holdings All rights reserved.

CRO Business (Japan)（ UNIT:JPY MILLION ）＜ Net Sales ＞（ UNIT:JPY MILLION ）＜ Operating Income ＞※

6,000
30,00020,887

24,190

5,491

25.0%

25,2194,000

20,0002,000

10,000

30.0%

3,803
2,834
13.6%

20.0%

21.8%

15.0%
15.7%

10.0%
5.0%

0

0

2013/92014/92015/90.0%

2013/92014/92015/9Operating
営業利益
IncomeOperating
営業利益率
Income ratio Aggressive marketing for monitoring services, and winning new projects, increased orders
for data management services contributed to growth in both sales and operating income.
 EPS Associates Co., Ltd., which was acquired in 2014, contributed to strong growth inoperating income through strengthening of its marketing force.

10※Operating income in the current term doesn’t include expenses associated with the holding company.
Copyright © 2015 EPS Holdings All rights reserved.

SMO Business (Japan)（ UNIT:JPY MILLION ）＜ Net Sales ＞

8,000

6,000

（ UNIT:JPY MILLION ）＜ Operating Income ＞
900

1,000

5,703

6,287

6,486

20.0%

800

691

600

400

4,000

14.3%

200

0

10.0%
10.7%

400
2,000

15.0%

5.0%

7.0%

0

2013/92014/92015/90.0%

2013/92014/92015/9Operating
営業利益
IncomeOperating
営業利益率
Income ratio While orders trended in line with expectations, delayed start of some large projects caused
sales to fall shy of budget.
 Though operational efficiency were improved, expenses for staff hiring and relocation of
the headquarters caused operating income to decline.

11

Copyright © 2015 EPS Holdings All rights reserved.

CSO Business (Japan)（ UNIT:JPY MILLION ）＜ Net Sales ＞＜ Operating Income ＞（ UNIT:JPY MILLION ）

8.0%

500
8,000
6,000

5,666

5,974

6,788

383

400

259

300

4,000

200

2,000

6.0%
5.6%

30

4.0%

4.3%
2.0%

100
0.5%
0

0

2013/92014/92015/90.0%

2013/92014/92015/9Operating
営業利益
IncomeOperating
営業利益率
Income ratio Medical application call center services trended favorably due to aggressive hiring of Contract
Medical Representatives (CMRs), allowing both sales and operating income to grow.
 Consigned projects in PMS (Post market survey) division grew strongly and order backlog
remained at high levels in the current term.

12

Copyright © 2015 EPS Holdings All rights reserved.

Global Research Business（ UNIT:JPY MILLION ）＜ Net Sales ＞
2,773

3,000
2,500
2,000

（ UNIT:JPY MILLION ）

0
-50

2,192

-100

1,769

1,500

-150

1,000

-200

500

-250

0

-300

2013/92014/9＜ Operating Income ＞

2015/9

-31

-52

-250
2013/92014/92015/9

 Sales of Global Research (GR) exceeded estimates by a large margin, with winning large
projects in Japan and Asia. Projects made steady progress.
 Ongoing efforts of cost reduction and reform on the earnings structure have contributed toa large contraction in operating loss.

13

Copyright © 2015 EPS Holdings All rights reserved.

EKISHIN (China) Business（ UNIT:JPY MILLION ）＜ Net Sales ＞

5,000

4,274

4,000

3,109

3,507

（ UNIT:JPY MILLION ）300＜ Operating Income ＞

270

200

3,000

100

2,000

0

1,000

-100

0

30

-117

-200

2013/92014/92015/92013/92014/92015/9 Strong sales of the medical device business allowed sales to rise by a large margin.
 Ekishin sold development rights of drug, that made profits on investments and helped thepharmaceutical product division to turn profitable.

14

Copyright © 2015 EPS Holdings All rights reserved.

2015/9 New Orders, Backlog（ UNIT:JPY MILLION ）New Order

Y o Y (%)

27,424
14,577
9,884
2,962
7,713
8,632

107.9%
108.0%
103.9%
122.9%
118.1%
131.5%

37,254
19,166
15,614
2,474
9,306
6,665

108.3%
107.5%
109.4%
108.1%
115.7%
139.9%

Global Research Business

4,462

154.0%

5,664

144.3%EKISHIN(China) Business

4,242
923
53,399123.7%
62.0%
115.3%

40
117
59,05078.8%
87.8%
115.1%CRO Business (Japan)
Monitoring
Data Management
CRO Others
SMO Business (Japan)
CSO Business (Japan)

OthersTotal

15Backlog

Y o Y (%)

 While the ability to secure resources is an issue for CRO Business (Japan), new orders and order backlog
rose by 7.9% and 8.3% year‐on‐year respectively
 SMO Business (Japan) strengthened marketing, including proposal based marketing, the orders grewby 18.1% year‐on‐year CSO Business (Japan), recorded strong growth in both new orders and order backlog of 31.5% and 39.9%
year‐on‐year respectively on the back of successful companywide marketing efforts
 The GR business won large projects in Japan and Asia, that led new orders and order backlog in to riseby 54.0% and 44.3% year‐on‐year respectively
 Because of the short time from orders to booking of sales in our EKISHIN (China) Business, we only
provide data for the sake of reference
Copyright © 2015 EPS Holdings All rights reserved.

Balance Sheets （ ASSETS ）（ UNIT:JPY MILLION ）40,00034,68936,76039,38735,00030,00010,68011,925

13,968Cash and deposits＋2,04325,000

9,913

20,000

8,613

9,472

15,000

1,508
3,466

1,689
3,598

1,781
3,002

10,142

10,072

9,746

2014/92015/3

2015/910,0005,000

Receivables（※)＋441
Inventories＋92

Other current assets△596
Fixed assets

△326

0

16

※Receivables include only notes and accounts receivable.
Copyright © 2015 EPS Holdings All rights reserved.

Balance Sheets （ LIABILITIES/NET ASSETS ）（ UNIT:JPY MILLION ）40,00035,00030,00025,00020,00034,68936,76039,387894

Payables △483

1,377
6,662
1,661
4,677

8,836

Other current liabilities+2,174

1,566
4,497

Long-Term Liabilities△95

21,23022,37923,590Net assets+1,211

2014/92015/3

2015/9

1,040
6,937
1,572
3,905

Debts with interest△180

15,00010,0005,000
017Copyright © 2015 EPS Holdings All rights reserved.

Cash Flows（ UNIT:JPY MILLION ）2014/9Results

2015/9Results

Changes

Operating Activities

4,431

4,186

△ 244

Investing Activities△ 3,051△ 1,276

1,775

Financing Activities

△ 624

△ 83

541

Effect Of Exchange Rate Change
On Cash & Cash Equivalents

308

172

△ 136

Net Increase (Decrease) In Cash
And Cash Equivalents

1,063

2,999

1,936

Beginning Of Balance, Cash And
Cash Equivalents

10,629

11,692

1,063

Ending Of Balance, Cash And Cash
Equivalents

11,692

14,692

2,999

18

Copyright © 2015 EPS Holdings All rights reserved.

Contents

1. Financial Results Overview (September 2015)
2. Fiscal Year September 2016 Earnings Estimates
3. Future Business Strategies• Management Integration of Sogo Rinsho
Holdings Co., Ltd.
• Strengthening of the Clinical ResearchBusiness

19

Copyright © 2015 EPS Holdings All rights reserved.

2016/9 Business Segment of EPS group
CRO

Japan
Business

Business

SMO

Business

CSO

Business

EPS, EPS Associates, EP-Mate, e-Trial
Sogo Rinsho HD, EP-Mint（Management Integration on January 1st, 2016）

EP-PharmaLine

Overseas
Business

GlobalResearchEPS International Holdings

EKISHINEPS EKISHIN, EPS(China) etc

Business

OthersCPO ※EPSI(China), GRI(USA), EPS GR(GCRC) etc

Business

EPI, J-CRSU, EPI(Suzhou), EPI Yamanashi

OthersEPBiz（Established in October 21st, 2015)※CPO：Clinical Process Outsourcing

20

Copyright © 2015 EPS Holdings All rights reserved.

2016/9 EPS group Management System
EPS Holdings
Chairman & CEO Yan Hao
President & COO Shinro Tashiro

Business Segment
CRO(Japan)SMO(Japan)CSO(Japan)GlobalResearch

EKISHIN(China)CPO

TashiroNishizuka

Weng

Hao

Tanaka(Head of Segment)

Tanaka(Deputy Head of Segment)

Abe
YamadaEPBiz

21（Shared Service）

Copyright © 2015 EPS Holdings All rights reserved.

2016/9 Full Year Earning Estimates（consolidated）（ UNIT:JPY MILLION ）2015/9Results

2016/9Estimates

YoY（％）

Net Sales

45,20247,800105.7%

Operating Income

5,482

4,730

（％）

(12.1%)(9.9%)

86.3%

Ordinary Income

5,362

4,650

（％）

(11.9%)(9.7%)Net Income

2,163

2,270

（％）

(4.8%)(4.7%)

86.7%
104.9%

 Stable sales growth is expected to be derived from efforts to leverage the groupholding structure, independence of individual business segments, and integrated
management of the group.
 On the other hand, aggressive anticipatory investments will be made to promote
profit growth over the medium term.

22※ The influence upon earnings of the scheduled integration of Sogo Rinsho Holdings Co., Ltd. on January 1, 2016 is not included
Copyright © 2015 EPS Holdings All rights reserved.

2016/9 Full Year Segment Earning Estimates
Net Sales by Business Segment

Japan
Business

Overseas
Business

23（ UNIT:JPY MILLION ）2015/9Results

2016/9Estimates

YoY
Change

YoY
(%)

CRO

25,21927,0001,781

107.1%

SMO

6,486

6,800

314

104.8%

CSO

6,788

7,300

512

107.5%

GR

2,773

3,000

227

108.2%EKISHIN(China)

4,274

4,350

76

101.8%

Copyright © 2015 EPS Holdings All rights reserved.

2016/9 Full Year Segment Earning Estimates
Operating Income by Business Segment

Japan
Business

Overseas
Business

24（ UNIT:JPY MILLION ）2015/9Results

2016/9Estimates

Operating
Incomeratio(%)

YoY
(%)

CRO

5,491

4,950

18.3%

90.1%

SMO

691

700

10.3%

101.3%

CSO

383

420

5.8%

109.7%

GR

-31

0

-

-

EKISHIN(China)

30

△ 100

-

-

Copyright © 2015 EPS Holdings All rights reserved.

Dividend Per Share Trends
A commemorative dividend of ¥2 per share celebrating the 25 th year ofoperations anticipated in fiscal year September 2016
（ UNIT:JPY
（円） ）

30.0
25.0
20.0

Term End Dividend
期末配当
中間配当
Mid‐term Dividend

17.5

15.0

18.0

18.0

18.0

9.5

10.0

10.0

10.0

8.0

8.0

8.0

8.0

2012/92013/92014/92015/9

20.0

10.0

10.0
5.0

10.0

0.0

25

2016/9※The dividend conditions shown in the above graph reflects retroactive revised data that takes into considering
the effect of a stock split.
Copyright © 2015 EPS Holdings All rights reserved.

Business Strategy – CRO (Japan)

CRO
Business(Japan)26• Strict control of cost and obtaining new clients.
• Strengthen cooperation among group companies.
• Promote unique development strategies for each
important disease area to strengthen
specialization, competitiveness.
• Expand synergies between EPS and EPS
Associates.
• Aggressive implementation and securing of
consignment projects.
• Anticipatory investments including securing of
human resources specialized in CRA andexpansion of offices.

Copyright © 2015 EPS Holdings All rights reserved.

Business Strategy – SMO and CSO (Japan)

SMO
Business(Japan)CSO
Business(Japan)27• Business expansion through management integration
with Sogo Rinsho Holdings effective from January 1,
2016.
• Improve productivity of CRC through optimized humanresources allocation.
• Expand facilities and educate CRCs with experience inthe oncology area.

• Train medical CMR with expertise, differentiate withothers.
• Aggressive outbound proposal and win new projects inthe medical call center division.
• Steady operations and staff trainings in PMS division.

Copyright © 2015 EPS Holdings All rights reserved.

Business Strategy – GR and EKISHIN (Overseas)• Further winning and implementation of global trials in
Asia and other regions.

ＧＲ
Business Strengthen marketing in Japan, Asia Pacific regions
 Efficiently leverage regional coverage of over 10
countries• Create a structure that can respond to high level
customer requests.

EKISHIN(China)Business
28• Medical equipment sales is core business, in addition,
earnings from investment activities, non-clinicalfundamental research use material will expand sales• Strengthen integrated operations of overall business of
EPS EKISHIN and EKISHIN (China).
• Implement effective investment management tomaximize asset value.

Copyright © 2015 EPS Holdings All rights reserved.

Contents

1. Financial Results Overview (September 2015)
2. Fiscal Year September 2016 Earnings Estimates
3. Future Business Strategies• Management Integration of Sogo Rinsho
Holdings Co., Ltd.
• Strengthening of the Clinical ResearchBusiness

29

Copyright © 2015 EPS Holdings All rights reserved.

Management Integration with
Sogo Rinsho Holdings

Securing an Overwhelming Position as the“Number One SMO Company in Japan”■Realize scale merit to ensure high competitiveness• Market share, CRC numbers• Complementary relationship between oncology areaand primary area facilities• Realize synergies between SMO and CRO■Realize leadership to exert influence over the entire market• Invigorate matured markets

30

Copyright © 2015 EPS Holdings All rights reserved.

Organizational Structure Post Management
Integration of Sogo Rinsho Holdings Co., Ltd.
As of January 1, 2016

EPS-HD

EPS-HD

SMO(Japan)SMO(Japan)EPMint※The delisting in
December 2015

SogoRinsho
HD

SogoRinsho
science31

Structural reorganization
after integration

OthersSogoRinsho
HD

EPMintSogoRinsho
science

OthersCopyright © 2015 EPS Holdings All rights reserved.

Contents

1. Financial Results Overview (September 2015)
2. Fiscal Year September 2016 Earnings Estimates
3. Future Business Strategies• Management Integration of Sogo Rinsho
Holdings Co., Ltd.
• Strengthening of the Clinical ResearchBusiness

32

Copyright © 2015 EPS Holdings All rights reserved.

Strengthening of clinical research business

CPO Segment
Non-Profit Organization

Japan ClinicalResearch
Support Unit
(J-CRSU)（CPO：Clinical Process Outsourcing）

J-CRSU(EPS group)

EPI

EPS
group

（Established in October 21st,2015）

EPI

EPI

（Yamanashi） （Suzhou）

Businessconsignment
human
resources
exchange

33

Copyright © 2015 EPS Holdings All rights reserved.

Introduction of J-CRSU services, performance
Introduction ofservices

Introduction of
performance

Planning, proposal, implementation support, information gathering,processing and provision, consulting for persons involved with medical
research• Clinical research related consultation• Patient Registration / Enrollment services• Data Management and Statistical Analysis• Research office function• Medical writing support“EPS group” clinical research implementation examples

MEGA Study
Received consignment of independent data center, trial office function. Large scale clinical trial of statinrelated hyperlipidemia treatment (approximately 8,000 cases over 10 years at 1,000 facilities). The study
was selected as the first topic ever from Japan by the American Heart Association (AHA) Annual Convention
Late Breaking Clinical Trials sessions. Numerous dissertations carried in “The Lancet” and otherpublications. Contributed to the guidelines on the treatment of dyslipidemia for Japanese patients.

N・SAS Trials
Received consignment of independent data center, trial office function. Clinical trials to scientificallyvalidate the efficacy of breast, colon, and stomach cancer UFT adjuvant therapies (a total of 1,339 cases
over 7 years). Objective case registrations, IC acquisition through detailed explanation to patients using
written documents, SDV, pathologist participation, independent data center, IDMC implementation, andother trials that became the forerunners of GCP, standards for clinical trials in Japan. Presentation at
ASCO, and dissertations published in the Journal of Clinical Oncology.

34

Copyright © 2015 EPS Holdings All rights reserved.

Thank you<Contact> E-Mail； ir@eps.co.jp

Copyright © 2015 EPS Holdings All rights reserved.