SMS Co., Ltd.
(Securities Code: 2175/TSE 1st section)

Presentation Material for Investors
Financial Results Summary for the First Half of
the Fiscal Year Ending March 31, 2021 (the 18th Fiscal Year)

October 29, 2020

Table of Contents© SMS Co., Ltd.

1

1H FY03/21 Consolidated Financial Results P3-P9

2

References

P11-P62┗ Strategy

P11-P44┗ Appendix

P45-P621© SMS Co., Ltd.

1

1H FY03/21 Consolidated Financial Results P3-P9

2

References

P11-P63┗ Strategy

P11-P44┗ Appendix

P45-P632

1 Historical Financial Results and FY03/21 Forecast
 Expect to achieve growth in both sales and profits for the 17th consecutive year
since our establishment.
Trends in net sales and ordinary income [JPY million]

37,43635,14030,837

Net sales (in black)
Ordinary income (in blue)

26,611
5,979

23,05419,06915,056

6,355 6,459

5,007
4,430

3,509

12,046
2,693
10,181
2,340
8,692
1,990
7,618
7,172
1,734
5,177
1,530
1,238 1,266

58
(5)

2,715
1,545
415
835
383
269
108
49

FY04 FY05 FY06

FY07 FY08 FY09

FY10 FY11

FY12 FY13 FY14

FY15 FY16 FY17

FY18 FY19 FY20

FY21(Forecast)© SMS Co., Ltd.

3

1 1H FY03/21 Consolidated Financial Results Achieved YoY growth in both sales and profits.
 Profits increased significantly, mainly due to a reduction in the number of newhires.
 Marked steady progress toward the FY03/21 guidance.
Consolidated P/L Statement [JPY million]
1H FY03/20
Actual© SMS Co., Ltd.

1H FY03/21
ActualYoY
ChangeNet Sales

17,62818,638+6%

Operating
Income

2,074

2,949

+42%

Ordinary
Income

3,119

3,852

+23%

Net
Income

2,319

2,775

+20%

4

1 The Career Segment (1H)YoY Comparison of Sales [JPY million]
YoY
Change1H FY03/20

1H FY03/21

Elderly Care
Career

5,426

5,992

＋10%

Medical Care
Career

7,371

7,427

＋1%

Total

12,797

13,419＋5%Highlights• Elderly Care Career grew steadily including RAG*1 for care workers.
• Medical Care Career grew steadily including RAG for nurses.
• As expected, Q2 sales were negatively affected by the COVID-19 impact
on the RAG matching activities.
*1. RAG: Recruiting Agent service© SMS Co., Ltd.

5

1 The Elderly Care Operators Segment (Kaipoke, 1H)
YoY Comparison of Sales [JPY million]

Elderly Care
Operators(Kaipoke)

1H FY03/20

1H FY03/21

2,282

2,775

YoY
Change＋22%

Highlights• The number of Kaipoke memberships increased steadily.
– 29,150 service offices (19,950 locations*1) as of October 1, 2020.
• Sales of optional add-ons such as additional tablets, smartphones, andfactoring services increased.
• The COVID-19 impact on the 1H results was limited, as expected.

*1. # of locations: the number of elderly care service office locations # of service offices: the number of elderly care services
provided based on the public elderly care insurance scheme e.g. When an operator provides two types of elderly care services,
home care support service and home-visit elderly care, at one specific address, the number of locations is counted as one and thenumber of service offices is counted as two. Kaipoke’s subscription fee is charged per membership location. Normally, the number oflocations is smaller than the number of service offices.
© SMS Co., Ltd.

6

1 The Overseas Segment (1H*1)
YoY Comparison of Sales [JPY million]
FY03/20

Overseas

2,046

FY03/211,885

YoY
Change(8%)

Highlights• As expected, Q2 sales were negatively affected by the COVID-19 impact
such as the cancellation or postponement of events for pharmaceuticalcompanies and the postponement of cross-boarder travels of healthcare
professionals.
• COVID-19 is accelerating digital transformation, creating opportunities forour digital services such as online events and eDMs.

*1. MIMS P/L statement is consolidated with a three-month delay and the 1H results are for January to June 2020.
© SMS Co., Ltd.

7

1 Impact of COVID-19
 The COVID-19 impact will continue longer than initially expected in the
FY03/21 guidance*1; it mainly affects domestic and global career businesses.
 Expect to achieve the FY03/21 guidance of increasing sales and profits YoY bycontrolling costs and promoting online services.
Impact of COVID-19
Segment

1H

2H prospect/ Measures against impacts

Elderly Care
Career• The RAG*2 matching activities have been
recovering more slowly than expected, after
the COVID-19 impact peaked in May andJune.

• COVID-19 will continue to affect the business for the time being.

Medical Care
Career• The RAG*2 matching activities have been
recovering more slowly than expected, after
the COVID-19 impact peaked in May andJune.

• COVID-19 will continue to affect the business for the time being.

• As expected• The COVID-19 impact will be limited.

Kaipoke• Develop new job orders from elderly care operators which areless affected by COVID-19.

• Develop new job orders from hospitals and clinics which are lessaffected by COVID-19.
• Promote transition from on-site job fairs to online job fairs.
• Promote the acquisition of new members through web marketingand online seminars.

Overseas• As expected• Pharma marketing business will be affected by COVID-19 as
expected.
• Promote digital services such as online events and eDMs, taking
advantage of new opportunities brought by the COVID-19.
• Global career business will continue to be affected after October*3
due to travel restrictions.

*1. The FY03/21 guidance was formulated based on the assumption that COVID-19 situation would be settled by the end of September 2020.
*2. Recruiting Agent service *3. MIMS’s Oct-Dec earnings are consolidated to SMS’s Q4 (please refer to p.53)© SMS Co., Ltd.

8

1 Topic: Reorganization of Career Business SMS will merge with its four subsidiaries which operate career-related
businesses in Japan on January 1, 2021*1.
 Accelerate the growth of the existing businesses and the development of new
businesses for further business expansion.

RAG*2 for elderly
care andmedical care
professionals

100%

SMS
Career

100%

Zweig

100%

Work
Ambitious
Elderly carecertification
course100%

WillOneRAG*2 for
Judo therapists
etc.

After January 2021:• Centralization of careerrelated businesses in SMS• Reinforcement of synergies
among businesses,
resource reallocation, andmanagement base, within
the SMS Group*1. SMS will merge with SMS Career, Zweig, and WorkAmbitious after the merger of WillOne by SMS Career.
*2. RAG: Recruiting Agent service© SMS Co., Ltd.

9© SMS Co., Ltd.

1Q2 FY03/21 Consolidated Financial Results P3-P9

2

References

P11-P62┗ Strategy

P11-P44┗ Appendix

P45-P6210Strategy© SMS Co., Ltd.

11

2 Our Mission

We aim to improve the quality of life
by providing information infrastructure
for aging society.

© SMS Co., Ltd.

12

2 Business Domains in Aging Society Define our business domains in aging society as Elderly Care,
Medical Care, Healthcare and Senior Life.

Senior Life
Healthcare

Elderly Care

© SMS Co., Ltd.

Medical Care13

2 Where We Operate Started our business in Japan and have established a leading position in thisattractive market with an enormous growth potential.
 Expanding our businesses into the growing Asian and Oceanian markets.

Japan

Vietnam

Korea

Philippines

China

MyanmarHong Kong

India

TaiwanAustralia

Singapore

New Zealand

Malaysia

UAE

Indonesia

IrelandThailand© SMS Co., Ltd.

14

2 Market Size
 The healthcare-related markets are expanding rapidly because of the aging
population in Japan and the economic growth in Asia.

Healthcare Expenditure*1 in Japan

Healthcare Expenditure*2
in Asia and Oceania*3
250 (JPY trillion)

96 (JPY trillion)

33
57
115

10

Healthcare(Non-insurance)

41
49

7
38

Medical Care28

Elderly Care

6

9

15

2005

2015

2025

30

*1. Source: SMS estimates based on MHLW, METI, and WHO statistics*2. Source: 2005/2015-WHO 2025-SMS estimate *3. Excluding Japan© SMS Co., Ltd.

2005

2015

2025

15

2 Information Infrastructure Information infrastructure is a platform to support people in aging society throughinformation.
 Aging of society causes information gaps related to elderly care, medical care,healthcare, etc., creating enormous business opportunities for us.

The elderly inneed of careand his/her family

The elderly
Prevention ofdementia

Dietitians
Onlinecommunity

Qualification
Physicaltherapists

Nurses© SMS Co., Ltd.

Housing
information

Elderly care
operators
Management
support

Recruiting
Agent

Recruiting
Ads
Clinics

Hospitals
Care workers

16

2 Improving the Quality of Life
 Address social issues that arise in aging society and contribute to improve thequality of lives of workers, operators, and end users.

End users

Workers• Variety of job options• Best workplace• Improved skills• Motivation for work

© SMS Co., Ltd.

• High-quality elderly
care/medical care
• Extension of healthy
life expectancy• Better decision making

Operators• Efficient management• Better service quality• Hiring and retention of
professional workers• Enhanced productivity

17

2 Business Segments

 Operate Elderly Care Career, Medical Care Career and Kaipoke as our corebusinesses in Japan.
 Develop new businesses mainly in Healthcare and Senior Life.
Business Domains
Healthcare

Stakeholders

Workers

Operators

Business
Development(Healthcare)

MedicalCare

Elderly
CareMedial Care
CareerElderly Care
CareerKaipokeSeniorLife

Business
Development(Senior Life)End users© SMS Co., Ltd.

Actively develop new businesses
in other areas.

18

2 Growth Track Medical Care Career has been driving our growth since our establishment.
 Elderly Care Career, Kaipoke and Overseas businesses are growing as the
new pillars of our business portfolio.
Strategic Units

Breakdown of Net Sales(JPY million)

Career Business - Medical Care Career

35,140・ No.1 recruiting service provider for medical care workers

1,133

3％

5,276

15％

4,895

14％

10,61830％

13,21838％

Career Business - Elderly Care Career
・ No.1 recruiting service provider for elderly care workers
19,069Kaipoke・ Management support platform
for elderly care operators

Overseas Business (MIMS)

・ Asia’s No.1 drug information service provider
・ Expanding career business from Asia to global

8,692
393
37
211
1,247
6,804

5％
0％
2％

1,229
2,596

6％
14％

2,506

13％

3,273

17％

9,453

50％

14％
78％

New Business・ Developing new businesses mainly in Healthcare
and Senior Life
© SMS Co., Ltd.

FY03/12
Medical Care Career

FY03/16
Elderly Care Career

Overseas

New Business

FY03/20
Kaipoke19

2 Growth Scenario

 On top of the solid expansion of Medical Care Career, we accelerate thegrowth of Elderly Care Career, Kaipoke, and Overseas Business.
 Actively develop new businesses to create next pillars of our businesses, which
will further drive our long-term growth.

Growth of New Business
Growth of Overseas Businessdriven by MIMS
Growth of Kaipoke

Growth of Elderly Care Career

Growth of Medical Care Career

Present© SMS Co., Ltd.

Future20

Career Business© SMS Co., Ltd.

21

2 Environment︓Care workers and Nurses
 Labor shortage continues to be a serious issue despite the increasing numbersof care workers and nurses.
Number of care workers and their turnover rate*1

Number of nurses and their turnover rate *3# of workers CAGR︓4％# of workers CAGR︓2％

1,557K

16.1%

2011

1,696K

17.0%

2012

1,773K

16.6%

2013

1,867K

16.5%

2014

1,925K

16.5%

2015

1,936K

16.7%

2016

1,975K

1,496K

1,538K

1,572K

1,603K

1,634K

1,660K

1,683K

10.9%

11.0%

11.0%

10.8%

10.9%

10.9%

10.9%

2011

2012

2013

2014

2015

2016

2017

16.2%

2017

Jobs-to-applicants ratio of care workers*2
4.0

Jobs-to-applicants ratio of nurses*2
4.0

Care workers

Nurses

3.0

3.0

2.0

2.0

All industries

1.0
0.0

All industries

1.0

2012

© SMS Co., Ltd.

2013

2014

2015

2016

2017

2018

2019 2020

0.0

2012

2013

2014

2015

2016

2017

2018

*1. Sources︓Number of workers – MHLW; Turnover rate – Care Work Foundation*2. Source : MHLW *3．Sources︓Japanese Nursing Association; Number of workers in 2017 – SMS estimate

2019 2020

22

2 Strategy of Career Business Contribute to mitigate labor shortage problem by expanding the market sharesof the existing services, diversifying service offerings, and increasing the varietyof occupations we cover.
Services② Diversify
services① Expand market share＋αRetention
supportCommunity
Education
Temp staffing

CareerServices

RAD*1③ Increase occupation
coverage

RAG*2

Occupations
Nurses© SMS Co., Ltd.

Allied healthprofessionals

Care managers

PT/OT/ST*1. Recruiting Ads service *2. Recruiting Agent service

Care
workers

Therapists

Childcare
workers＋α23

2 ① Expand Market Share As a pioneer, we created attractive markets of recruiting services for elderly
and medical care workers and established No.1 positions.
 Continue to increase the market shares by leveraging a large number of both
healthcare professionals (HCPs) and job orders we have accumulated.
Operators

HCPs
Created the market as a pioneer
andlead the market as No.1 player
Recruiting Agent (RAG) for nurses
No.1 share
RAG forallied health professionals
No.1 share
RAG for care workers
Leading market expansion
Accumulated web marketingknow-how by conducting it inhouse© SMS Co., Ltd.

Develop strong relationships
with operators by introducing
many job seekers

24

2 ② Diversify Services - Demand and Supply of Care Workers
 The labor shortage in elderly care is worsening due to the rapid aging of
population, the gap between demand and supply of care workers being
expected to reach 340,000 in 2025.
Care Worker Demand-Supply Forecast*12.45 million
The gap
betweendemand andsupply will
expand to0.34 million.

Demand forcare workers

2.08 million

2.11 million

0.1
million1.98 million

2017© SMS Co., Ltd.

Supply ofcare workers

2018

2019

*1. Source: MHLW. 2017 - SMS estimate.

2020

2021

2022

2023

2024

2025

25

2 ② Diversify Services - Strategy of Elderly Care Career Improve the shortage of workers by providing diverse services.
• Promote new entry from other industries in addition to support for changing jobs.
• Contribute to improve productivity of workers and reduce their turnover througheducation and retention support.

Other
industries

Recruiting
Ads

Care
workers
SupportjobchangePotential
workers
Promotenew entry

Promoteentry

Elderly care
operators

Otherindustries

Recruiting
Agent

Qualification
obtaining support
Certification course
Schoolinformation

Introduce
best
workplace

Improveproductivity
Supportretention

Temp staffing
Accumulate
information© SMS Co., Ltd.

Accumulate
information

Workers
platform

Operators
platform26

2 ③ Increase Occupation Coverage Started career services for Judo therapists/licensed masseurs*1 in FY03/18 and
RAG for childcare workers in FY03/19, which are promising markets following
Recruiting Agent (RAG) for nurses and elderly care workers .
 Continue to expand our services to other occupations going forward
Jobs-to-Applicants Ratios*3

Number of Workers*2 [million]
for Occupations in the Career Segment
Care
workers

4.0

FY03/19Developed
in-house

Nurses

1.98
1.66

Childcare Judoworkers therapists/ Dietitians/
Licensed Registeredmasseurs dietitians

0.50

0.24

0.24

Judo therapists

Childcare
workers

FY03/18
Started by WillOne
Acquisition

3.0

2.0

Care workers
PT
OT
ST

Care
managers

0.20

0.20

1.0

All industries

0.0
2012

2013

2014

2015

2016

2017

2018

The jobs-to-applicants ratio for childcare
workers has risen in metropolitan areas
such as Tokyo (over 5 times)© SMS Co., Ltd.

*1. Finger pressure practitioners, acupuncturists, and moxibustion practitioners*2. Sources: Care workers: MHLW 2017, Nurses: SMS estimate, Childcare workers/Dietitians/Licensed dietitians: SMS estimates based on
MHLW data 2017, Judo therapists/Licensed masseurs: SMS estimate based on MHLW data 2016, PT/OT/ST, Care Managers: MHLW 2017
*3. Source: MHLW

27

2 Growth Scenario

 The Career Segment as a whole has huge growth opportunities.
 Increase in the market shares of existing services, rapid expansion of Elderly
Care Career and services for newly-covered occupations drive the growth.
Current and future sales by service*1*2: Sales for FY03/20: Estimates of the
future sales

Full-scale expansion
started in FY03/17

RAG forchildcare workers
RAG for nurses

Launched in
FY03/19

RAG for care workers
Temp staffing

RAG for other co-medicals

RAD for care workers

RAG/RAD for
Judo therapists etc.

School

RAG for PT/OT/ST
RAD fornursesRAD for newlygraduated nurses

Launched byacquiring WillOne
in FY03/18

RAG for care managers

Elderly Care Career︓ JPY 10,618 million*3© SMS Co., Ltd.

Medical Care Career︓ JPY 13,218 million*3*1. Career businesses for doctors and pharmacists are operated by M3 Career, Inc., a JV between M3, Inc.(51%) and SMS (49%).
*2. RAG: Recruiting Agent service RAD: Recruiting Ads service *3. Sales for FY03/20

28

Kaipoke© SMS Co., Ltd.

29

2 Environment︓Elderly Care Operators
 The number of elderly care operators continues to increase as the populationages.
The number of elderly care service offices andthe elderly population*1# of elderly care service offices CAGR:4%
33.0

33.9

34.6

31.9
30.8
29.8

29.5

223
199

176

168

135

129

233

35.2

239

35.6

35.9 (million)

244

248

210

186

143

153

162

172

179

186

189

192

39

41

43

46

48

51

54

54

55

56

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Not included in Kaipoke coverage© SMS Co., Ltd.

(thousand)Operators that Kaipoke covers*2
・In-home care support
・Home-visit elderly care・Day care・Home-visit nursing
・Outpatient rehabilitation etc.

Operators that Kaipoke doesn’t cover *2・Commuting care for elderly with dementia
・Short stay・Daily life care for elderly in specific facilities
・Small-sized multifunctional in-home care・Facilities etc.

Included in Kaipoke coverage*1. Sources︓Number of elderly care service offices – MHLW; The elderly population – MIC*2. As of Mar. 202030

2 Kaipokeʼs Business Model Kaipoke is a management support platform provided in the form of SaaS, which
offers more than 40 services to improve the management efficiency of elderly
care operators.
Management support platform
ServiceprovidersPartner A
Partner B
Partner C

Operators

Servicedevelopment
and provision

Insurance claim

In-home care
support

Recruitment

Home-visit elderly
care

Business support

Management
supportFinance
Purchasing

Day careHome-visit nursing

Monthly
subscription
feeOutpatient
rehabilitation+α+αAccumulationof information© SMS Co., Ltd.

Servicedevelopment

Elderly caremanagement data31

2 Strategy of Kaipoke

 Maximize value as a management support platform by expanding the market share,adding more services and increasing types of operators we cover.
 Contribute to enhance the management efficiency and the service quality of elderly
care operators.
Services

Expand market
share

Add more
services＋αPurchasing
Finance
MarketingOperation improvement

Recruitment

Management
SupportPlatform

Increase operator
coverage

Insurance claim

Operator types
Home care
support© SMS Co., Ltd.

Home-visit
elderly care

Day careHome-visit
nursing

Outpatient
rehabilitation＋α32Overseas Business© SMS Co., Ltd.

33

2 Strategy of Overseas Business 1/3
 Overseas businesses are built on the strengths of MIMS, which include its
overwhelming brand value in Asia and Oceania, enormous membership baseof healthcare professionals (HCPs), and strong relationships with medical andhealthcare-related companies and hospitals.
Medical andhealthcare-relatedcompanies*1

HCPs

Pharma Marketing

HCP
platform

Hospitals
and Clinics

Career Service
Career portal site

Healthcare Data

Drug database© SMS Co., Ltd.

*1. Include pharmaceutical companies, medical equipment manufacturer, healthcare-related service providers

34

2 Strategy of Overseas Business 2/3 (Pharma Marketing) Maximize the value as a marketing platform and provide optimized solutions tomeet customer needs by strengthening the membership base, increasing client
accounts and developing marketing channels.

Healthcare
professionals

News

Drug
information

Academic
conferencesand events

Education

Onlinecommunity

Research

Medical andhealthcare-relatedcompanies

Optimized
marketingsolutionsPharmacompanies

Medical device
manufacturers+α+αStrengthen
membership base
© SMS Co., Ltd.

Developmarketing channels

Healthcare
service
operators

Increase client
accounts35

2 Strategy of Overseas Business 3/3 (Global Career Business)

 Establish No.1 position as a global recruiting agency for healthcare professionals

HCPs

Hospitals

EuropeUS
Oceania

Middle East
Cross-border introduction

Asia
Build a supply
platform of HCPs

Each country© SMS Co., Ltd.

Domestic introduction

EuropeUS
Oceania

Expand countries

Expand countries(HCPs) by expanding countries for sourcing HCPs and acquiring job orders.
 Build a supply platform of HCPs for both domestic/cross-border introductions.

Each country36

2 Progress in Global Career Business Make steady progress, as laid out in our strategy, expanding countries to
Malaysia in 2017, the Philippines in 2018, and Ireland and Australia in 2019.
HCPs

*1

© SMS Co., Ltd.

UK

Saudi Arabia
From August 2019

Australia

New Zealandetc.

Malaysia

The Philippines

Korea

UAE

Qatar

US

UK

Australia

Irelandetc.

From June 2017

From May 2018

From September 2011etc.

Expand countries

Expand countries

Ireland

Build a supply
platform of HCPs

Hospitals

Korea

37

New Business© SMS Co., Ltd.

38

2 Focus of Business Development

 Develop new businesses mainly in Healthcare and Senior Life.
 Capture the growing needs for prevention of diseases and services not coveredby public insurance schemes.
Domains

Healthcare

OutlineServices such as
health guidance,
disease prevention,and industrial
health services etc.

Services
Preventive solution oflifestyle diseases

Health guidance
solution

Personalized
anti-smoking solution

Web community for
dietitians

Remote industrial
health service

Information portalof industrial
health service

Preventive solution for
workforce departuredue to family care

Healthmaintenance/promotion
support for women

Information portal ofdementia

Solution for dementia
prevention

Habituation support ofdementia prevention

Q&A siteon healthSenior Life

© SMS Co., Ltd.

Services to connect
operators and end
users in areas suchas elderly care,housing, and end oflife planning.

Web community for people
caring for their families

Home-delivered meals
search site

Housing renovation
operators search site

Information offuneral companies

Information portal of
housing for the elderly39

2 Healthcare - Remote Health Guidance Provide remote health guidance services to health insurance associations*1.
 Contribute to prevent lifestyle diseases of the insured people through effective
health guidance.

Healthinsurance
association
Prevent lifestylediseases of theinsuredMedical checkup results
Blood testing
Number of steps
Activity amount
Body weight
Blood pressure
Meal photos
Interview & questionnaire
Chat data

Registereddietitians

Recipients ofconsultation

Recruitment fromour online
community of
dietitians

Consultation
Chat

My Data

Effective coaching
methods based on the
results of the analysis

Medicalspecialists

40© SMS Co., Ltd. *1. In Japan, employees and their dependents are usually enrolled to public health insurance by joining the health insurance association of the employers.

2 Healthcare - Remote Industrial Health Service

 Provide industrial health services that combine visits and remote support tocompanies.
 Contribute to enhance employees’ health by providing comprehensive support for
operations related to industrial health.
Company• Enhance employees'
health• Develop industrial
health system

Employee

Health committee

Interview setting

Industrial
health nurses

Online interview

Recruitment fromour online
community ofnursesIndustrial health outsourcing

Stress check© SMS Co., Ltd.

Preparation ofrecords

Industrial
physicians
Visits andworkplace motoring41

2 Healthcare - Our Strengths
 Leveraging our strengths in healthcare professional (HCP) networks, ICT
knowledge, and proven results from verification projects conduced withministries and national agencies, we provide inexpensive and effective
solutions for health and disease-prevention.

HCP networks

 Enable us to recruit skilled
HCPs essential for healthcare
services.

Inexpensive and effective
solutions for health anddisease-prevention
ICT knowledge
 Enables us to provide
inexpensive and efficient services
using ICT.
© SMS Co., Ltd.

Results fromverification projects*1
 Enable us to provide services with proveneffectiveness.
*1. Joint projects with MHLW, METI and national hospitals

42

2 Strategy of Healthcare
 Maximize the value offered and contribute to increase healthy workforce byadding more services and expanding target clients and users.
Services

Add more
services

Maximize value

For companies＋α
Health management
consultation

Stress check
Support for employees
caring for families

Industrial
health service

For HIAs

Promotion totake med-checkups

Anti-smoking
program
Health guidance

Increase target clientsand users

Healthcare
Services

Aggravation
prevention
Remote healthguidance

Client types
Corporate HIAs*1© SMS Co., Ltd.

*1. Healthcare insurance associations

Industrial HIAs

Mutual aid associations
Local governments

Small and medium
sized companies＋α43

2 Strategy of Senior Life Develop services to connect operators and end users to meet various needs in the
aging society, such as elderly care, housing, and end of life planning.
 Contribute to improve the quality of lives of the elderly and their families by helping
them make better decisions.
Onlinecommunity

The elderly
and families

Operators

Collect
information

Introduction

Welfareequipment
Nursing home
Renovation
Rebuilding
Sale of realestateProvideinformation

Fees

FuneralGrave/
Buddhist altar

...

...

+α

End of life
planning

Inheritance

Housing

Matching
services© SMS Co., Ltd.

Elderly
care

Meal

44

Appendix© SMS Co., Ltd.

45

2 Business Models of Recruiting Agent and Recruiting Ads
Business model of Recruiting Agent
Receive a certain percentage of an annual salary from a hiring business operator
as a fee when an applicant joins it.
WebsiteCare workers

NursesAttracting job seekers

Sales activity

Registration

Job orders

Matching

Matching

Hospitals

Career partner

Elderly care
operators

FeeBusiness model of Recruiting Ads
Receive a fee for each application for a job via our Recruiting Ads website.
WebsiteCare workers

Attracting job seekers

Sales activity

Registration

Recruiting ads

ApplicationFee© SMS Co., Ltd.

Elderly care
operators46

2 Kaipokeʼs Main Services
Subscription-based management support platform
providing more than 40 services as a package*1
Insurance
Claim

Elderly care operators can claim for the reimbursement of insurance efficiently.

Recruitment

Provide SMS’s industry-leading Recruiting Ads service "Kaigo Job" for free.*2

Sales
SupportOffer a function to prepare sales leaflets and a list of care managers who are the sales
target of elderly care operators.

Operation
Provide one iPad for free to enable care workers to complete documentations at
Improvement
their customer sites.
Opening
SupportFinance

Purchasing

M&A© SMS Co., Ltd.

Support procedures needed to open an elderly care business such as application for
designation, financing, finding office properties and market research.
Provide factoring services to improve operators’ cash flows.
Elderly care operators can procure various equipments and supplies, such as rental
smartphones, in an easy and inexpensive way.
Supporting the succession of elderly care operators*1. Additional payments are required for the use of two or more iPads, factoring, etc.
*2. Charged for some types of occupations.

47

2 Concept Change of Kaipoke

 Penetrated the market as a discounter of insurance claim system.
 Changed the service concept in 2014 and established a unique position as aprovider of a management support platform for elderly care operators.
Before February 2014

Since February 2014

Insurance
claim
systemInsurance
claim
system（ARPU)

JPY 3,000 /month• Intense competition among many providersof on-premise insurance claim system• SMS entered the market as a discounter
with ASP*1 type service© SMS Co., Ltd.

Recruiting
Ads

Sales
SupportManagement support platform
Finance（ARPU)

Operation
improvement

Purchasing

JPY 20,000 /month• Provide highly differentiated services such as theindustry No.1 Recruiting Ads service via the
management support platform.

*1. Application Service Provider︓business providing computer-based services to customers over a network48

2 Kaipoke Memberships
 The number of memberships is increasing in accordance with our strategy,
despite a temporary decline right after the concept and price change.
# of Kaipoke
memberships

Only insurance claim system

Management support platform

29,150 service offices（19,950 locations）

Many companies
entered the market

Changed the service
concept and price

Public elderly careinsurance started

2000© SMS Co., Ltd.

Apr.
2010

Feb.
2014

Apr.
2015

Oct.
2020

Future49

2 MIMS Group Profile

MIMS group global coverage

MIMS group profile

FoundedBusiness
Globalcoverage

1963･Pharma Marketing･Healthcare Data
・Career Service
17 countries and regions
mainly in Asia and Oceania

Number of
2.65 million
memberships
Acquisition
date© SMS Co., Ltd.

Oct. 7, 201550

2 Strengths of MIMS Group Strengths of MIMS group include its overwhelming brand value in Asia andOceania, strong membership base of healthcare professionals (HCPs), andbusiness relationships with pharmaceutical companies.

1.Overwhelming brand value

HCPs

Pharmacompanies

2.Strong membershipbase of HCPs

3.Business relationships
with pharma companies

 2.65 million HCP memberships© SMS Co., Ltd.

 50 years of history
 Utilized by healthcare
institutions/HCPs to get drug
information on a daily basis

 Most manufacturers of new drugs in the region
post information of their drugs on MIMS’s
database51

2 Business Model of MIMS
Pharma Marketing

Healthcare Data

Support marketing activities of
medical/healthcare-related companies*1

Provide a drug database for prescription
error checks in healthcare institutions

Medical/healthcarerelated companies
Fee

Optimized marketing
solutionsFee• Drug database• Database can be integrated
into core systems ofhealthcare institutions

Medical/healthcare
information via various
channels (publication,web, event etc.)
HCPs(e.g. doctors, nurses,
pharmacists)© SMS Co., Ltd.

Healthcare institutions(e.g. hospitals, clinics,
pharmacies)*1. Operators such as pharmaceutical companies, medical device manufacturers and healthcare service operators52

2 Consolidation of MIMS Financial Results
 MIMS P/L statement is consolidated to SMS P/L statement following a time lagof three months.

Illustration of MIMS P/L Consolidation to SMS Consolidated P/L（excl. MIMS）*1
FY20

FY21

Q1

Q2

Q3

Q4

Q1

Q2

Apr-Jun P/L

Jul-Sep P/L

Oct-Dec P/L

Jan-Mar P/L

Apr-Jun P/L

Jul-Sep P/L

Jan-Mar P/L

Apr-Jun P/L

Jul-Sep P/L

Oct-Dec P/L

Jan-Mar P/L

Apr-Jun P/L︓SMS consolidated P/L (excl. MIMS)© SMS Co., Ltd.

・・・

・・・

︓MIMS P/L

*1. Q1-Q4 presented above are those of the fiscal year of SMS. SMS fiscal year ends in March, while MIMS fiscal year ends inDecember.

53

2 Business Portfolio – Career*1*2

SubSegment

Elderly
Care
CareerCategory
Servicesfor careworkers

Services
RAD*3 for care workers

RAG *3 for care workers

Temporary staffing forcare workers

RAG *3 for PT/OT/ST

RAG *3 for care managers

Web community forcare managers

RAG *3 for nurses

RAG *3 for dietitians

RAG *3 for radiological
technologists

RAG *3 for childcare workers

RAG *3 for
Judo therapists etc.

Elderly carecertification course

Certification course
information

OthersRAG*3
services
MedicalCare
CareerRAD *3 for nurses

Others© SMS Co., Ltd.

National examinationreference book for Judotherapists etc.

RAG *3 for medical
technologists

Web community forRAD *3 for newly-graduated
Scholarship information portal nurses and nurse students
nursesRAG *3 for clinical engineers

RAD *3 for
Judo therapists etc.

HR solution
for hospitals*1. As of Oct. 2020
*2. Career businesses for doctors and pharmacists are operated by M3 Career, Inc., a JV between M3, Inc.(51%) and SMS (49%).
*3. RAD: Recruiting ads service RAG: Recruiting agent service54

2 Business Portfolio*1 – Kaipoke/Overseas/New Business

Segment

KaipokeOverseas

ServicesManagement support platform
for elderly care operators

Drug information service forhealthcare professionals andinstitutions

Cross-border RAG*2 forhealthcare professionals(Malaysia, Philippines, Ireland, UK, etc.）

Career related service for nurses(South Korea)

Medical ad services（Philippines, Indonesia, Malaysia）

Preventive solution oflifestyle diseases

Health guidance
solution

Personalized
anti-smoking solution

Web community for
dietitians

Information portalof industrial
health service

Preventive solution for
workforce departuredue to family care

Q&A siteon health

Health maintenance /promotion
support for women

Information portal ofdementia

Solution for dementia
prevention

Remote industrial
health service

New BusinessWeb community for people
caring for their families© SMS Co., Ltd.

*1. As of Oct. 2020
*2. Recruiting agent service

Home-delivered meals
search site

Habituation support of dementia Web community for managersof elderly care operators
prevention

Information portal of
housing for the elderly

Housing renovation
operators search site

Information offuneral companies

55

2 History of Service Launces 1/4
03/04

03/05

03/06

03/07

03/08

03/09

03/10

03/11

03/12

03/13

03/14

03/15

03/16

03/17

03/18

03/19

03/20

03/21

RAG*1 for care managers: Care Jinzai-bank May 2003

Certification course information: Shikatoru Nov. 2003

RAD *1 for care workers: Kaigo Job Mar. 2004

Elderly
Care
CareerWeb community for care managers: Care Mane.com Sep. 2006

RAG *1 for PT/OT/ST: PT/OT Jinzai-bank Sep. 2008

RAG *1 for care workers: Kaigo Job Agent Aug.2014

Elderly care certification course: Kaigo Job Academy Oct. 2015

Temporary staffing for care workers: Kaigo Job Partners Dec.2016© SMS Co., Ltd.

*1. RAD: Recruiting ads service RAG: Recruiting agent service56

2 History of Service Launces 2/4
03/04

03/05

03/06

03/07

03/08

03/09

03/10

03/11

03/12

03/13

03/14

03/15

03/16

03/17

03/18

03/19

03/20

03/21

RAG *1 for nurses: Nurse Jinzai-bank Sep. 2005
RAD *1 for nurses: Nurse-senka Kyujin-navi Jul. 2006
Web community for nurses and nurse students: Nurse-senka Community Aug. 2006
RAG *1 for doctors: M3 Career Agent Aug. 2006
RAG *1 for pharmacists: Yaku Kyari Agent Apr. 2007

Company split andsucceeded to M3 career atthe end of Dec. 2009

RAD *1 for newly-graduated nurses: Nurse-senka Shusyoku-navi Aug. 2009
MedicalCare
Career

HR solution for hospitals Apr. 2011
RAG *1 for dietitians: Eiyoshi Jinzai-bank May 2012
Scholarship information portal: Kango Shogakukin-navi Oct. 2012
RAG *1 for medical technologists: Kensagishi Jinzai-bank Sep. 2013
RAG *1 for radiological technologists: Hoshasengjshi Jinzai-bank Jun. 2014
RAG *1 for clinical engineers: Kogakugishi Jinzai-bank Jul. 2014
RAG *1 for Judo therapists etc.: WILLONE Nov.2017
RAG *1 for childcare workers: Hoikushi Jinzai-bank Oct.2018© SMS Co., Ltd.

*1. RAD: Recruiting ads service RAG: Recruiting agent service57

2 History of Service Launces 3/4
03/04

Elderly
Care
Operators

03/05

03/06

03/07

03/08

03/09

03/10

03/11

03/12

03/13

03/14

03/15

03/16

03/17

03/18

03/19

03/20

03/21

Management support service for elderly care operators: Kaipoke Jul. 2006

(South Korea) Career related service for nurses: Nurscape Sep. 2011
Medical ad services Jan. 2015
Overseas
Drug information service for healthcare professionals and institutions: MIMS Oct. 2015
Cross-border RAG*1 for Healthcare Professionals Jun. 2017

Information portal of housing for the elderly: Kaigo DB Jul. 2006
Web community for people caring for their families: Anshin Kaigo Jun. 2009
Web community for dietitians: Eichie Jun. 2011
New
Business

Information portal of dementia: Ninchisho Net Aug. 2011
Home-delivered meal search site: Lifood Nov. 2013
Q&A site on health: Narukara Dec. 2013

© SMS Co., Ltd.

*1. RAG: Recruiting agent service58

2 History of Service Launces 4/4
03/04

03/05

03/06

03/07

03/08

03/09

03/10

03/11

03/12

03/13

03/14

03/15

03/16

03/17

03/18

03/19

03/20

03/21

Web community for managers of elderly care operators: Kaigo Must Feb. 2015
Housing renovation operators search site: Hapisumu Apr.2016
Solution for dementia prevention: Nintore Apr. 2017
Preventive solution of lifestyle diseases: Remote Chat Guidance Apr. 2017
Habituation support of dementia prevention: Nintore Challenge Oct. 2017
New
Business

Health guidance solution: Remote Chat Guidance Oct. 2017
Information of funeral companies: Anshin Sougi Mar. 2018
Personalized anti-smoking solution: Kinen Shido Service Jul. 2018
Health maintenance/promotion support for women: Lady to Go Dec. 2018
Remote industrial health service: Remote Sangyo Hoken Apr. 2019
Information portal of industrial health service: Sanchie Apr. 2019
Preventive solution for workforce departure due to family care: Remote Kaigo Sodan Jul. 2019

© SMS Co., Ltd.

59

2 Dividends

Payout ratio
14.8%

16.3%

15.6%

16.8%
15.5%

15.5%

13.6%
11.6%

12.3%
8.5

12.5%

7.5
6.5
5.5

6.8%

0.625
FY09

© SMS Co., Ltd.

DPS*1 (JPY)
1.25

1.5

FY10

FY11

2.0

FY12

3.5

3.5

FY14

FY15

2.5

FY13

*1. Past stock splits are taken into account for the DPS calculation.

FY16

FY17

FY18

FY19

60

2 Historical Financial Results(JPY million)
FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

Net Sales

58

383

835

1,545

2,715

5,177

7,172

7,618

8,692

10,181

12,046

15,056

19,06923,054

26,61130,83635,140Operating
Income

(5)

52

109

269

426

1,230

1,261

1,480

1,519

1,570

1,730

2,079

2,756

3,646

4,021

4,743

4,935

Ordinary
Income

(5)

49

108

269

415

1,238

1,266

1,530

1,734

1,990

2,340

2,693

3,509

4,430

5,007

5,979

6,355

Net
Income

(5)

31

63

157

244

719

717

876

1,004

1,226

1,380

1,824

2,265

2,801

3,361

4,216

4,760

EPS*1
(JPY)

(5.8)

1.8

1.5

2.2

3.3

9.2

9.2

11.1

12.2

14.9

16.8

22.4

27.9

33.7

38.7

48.5

54.7

Total
Assets

59

357

566

1,016

1,806

3,118

3,645

4,672

5,716

6,948

8,406

11,421

41,68943,231

46,08747,46750,996

Liabilities

55

166

196

489

822

1,410

1,266

1,430

1,579

1,794

2,331

4,497

28,532

21,64822,44631,92831,597

Net
Assets

4

190

369

527

983

1,708

2,379

3,242

4,136

5,153

6,074

6,923

13,157

21,58323,641

15,53919,398Equity
Ratio

7.5

53.3

65.3

51.9

54.4

54.8

65.2

69.2

72.3

74.1

71.5

59.7

20.5

39.6

41.8

32.4

37.7

ROE
（%）

(124.9)

31.8

22.8

35.1

32.3

53.4

35.1

31.2

27.3

26.4

24.7

28.4

29.5

21.8

18.5

24.4

27.5

DPS*1
（JPY）

-

-

-

-

-

0.625

0.625

1.25

1.5

2

2.5

3.5

3.5

5.5

6.5

7.5

8.5

Dividend
Payout
Ratio

-

-

-

-

-

6.8

6.8

11.6

12.3

13.6

14.8

15.6

12.5

16.3

16.8

15.5

15.5

TSR*1*2
（%）

-

-

-

-

-

-

-

-

-

-

177.1

514.5

1,150.3

1,057.5

682.8

402.3

263.6

（%）

（%）

© SMS Co., Ltd.

*1. Past stock splits are taken into account for the EPS, DPS and TSR calculations.
*2. （Ending share price of the fiscal year＋Total dividends paid over 5 years) / Ending share price 6 fiscal years ago

61

2 Number of Employees and Shareholder Composition
Number of Employees
As of September 30, 2020 :Employees (consolidated)

3,111

Japan

2,303
808

Overseas

Shareholder Composition*1
As of September 30, 2020:

Individual Investors
6%

Number of shareholders 5,632

Others5%Founder19%

Directors, Employees andShareholding associations
1%

Foreign Institutional
Investors
Domestic Institutional
43%
Investors
26%© SMS Co., Ltd.

*1. Pie chart shows the ratio of number of stocks held by each category.

62

Cautionary Statement with Respect to Forward-Looking Statements
These materials contain forward-looking statements, including estimates, projections, and statements related to the business operations of SMS
Co., Ltd. (hereinafter, “the Company”) based on current expectations and assumptions in light of the information available to the Company as of
September 30, 2020. These forward-looking statements are not guarantees of future performance and involve known and unknown risks,
uncertainties and other factors that may cause the Company’s actual results, performance, achievements or financial position to be materiallydifferent from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. These
factors include, but are not limited to:changes in economic conditions, market demand, and the competitive environment affecting Japan, Asia and other markets in which the Company
operates;• reliance on digital and information technology, including with respect to the handling of elderly care, medical care and other client informationand operation of the Company’s online community services;• inability to effectively execute M&A/business alliance and overseas expansion strategies;• changes in the laws, regulations and government policies in the markets in which the Company operates, particularly relating to employment
placement, elderly care and medical care;• any damage to the brand image;• risk of infringing intellectual property rights;• fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen, the US dollar, the Singapore dollar, theHong Kong dollar and the Australian dollar; and• risk of impairment losses, particularly with respect to goodwill, trademark right and customer-related assets recognized in connection of theacquisition of Medica Asia (Holdco) Limited in October 2015.
A discussion of these and other factors which may affect the Company’s actual results, performance, achievements or financial position is
described in “Business Risks” contained in the Company’s corporate website*1.
We do not intend, and disclaim any duty, to update or revise any forward-looking statements contained in these materials to reflect new
information, future events or otherwise. We caution you not to place undue reliance on any forward-looking statements contained in thesematerials.
*1. https://www.bm-sms.co.jp/en/ir/policy/risk/

For any inquiries on the materials, please contact below:
Finance & Accounting Department
E-mail: irinfo@bm-sms.co.jp
Phone: +81-3-6721-2403© SMS Co., Ltd.

63