SMS CO., LTD.
(Securities Code: 2175/ TSE 1)

Presentation Material for Investors
Financial Results Summary for
the Fiscal Year Ended March 31, 2018 (the 15th Fiscal Year)

April 27, 2018

Table of Contents

1

FY03/18 Consolidated Financial Results

P3-P6

2

FY03/19 Strategy and Consolidated Financial
Forecasts

P8-P38

3

Appendix

P40-P53© Copyright SMS CO.,LTD.

1

1

FY03/18 Consolidated Financial Results

P3-P6

2

FY03/19 Strategy and Consolidated Financial
Forecasts

P8-P38

3

Appendix

P40-P53© Copyright SMS CO.,LTD.

2

１

FY03/18

Consolidated Financial Results Both net sales and incomes increased YoY.
 Net income was in line with the forecast.

Consolidated P/L Statement [JPY million]

FY03/17
ActualFY03/18
Forecast

FY03/18
ActualYoY
Changevs.
Forecast

Net sales

23,05427,804

26,611＋15%▲4%

Operating
Income

3,646

4,378

4,021

+10%

▲8%

Ordinary
Income

4,430

5,137

5,007

+13%

▲3%

Net
Income

2,801

3,396

3,361

+20%

▲1%

© Copyright SMS CO.,LTD.

3

1

The Career Segment (Full-year) Segment sales increased 21% YoY.
 Elderly Care Career recorded strong growth.
Year-on-Year Comparison of Sales [JPY million]_

FY03/17

FY03/18

YoY
ChangeElderly Care
Career

4,025

5,836

+45%

Medical Care
Career

9,946

11,027

+11%

Total

13,972

16,863+21%

Highlights• Elderly Care Career grew substantially with Recruiting Agent (RAG) businesses as the major driver.
- RAG for care workers expanded greatly due to the significant increase in consultants headcount as well as the
successful attraction of more job seekers.
- Accelerated openings of schools for care workers.
- RAG for rehabilitation therapists also performed well.
• Medical Care Career recorded solid growth.
- RAG for nurses grew steadily.

© Copyright SMS CO.,LTD.

4

1

The Elderly Care Operators Segment (Kaipoke, Full-year) Segment sales increased 20% YoY.
 Optional add-on services contributed to the sales growth.

Year-on-Year Comparison of Sales [JPY million]_
Elderly Care
Operators

FY03/17

2,782

FY03/18

3,328

YoY
Change+20%

Highlights• The number of Kaipoke memberships continued to increase.
- An increase of 1,550 locations over the year to 15,050 [21,400 service offices *1] as of Apr. 1st 2018.
• Sales of optional add-ons such as additional tablets and factoring service increased.

*1. # of locations: the number of 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 should be
one and the number of service offices should be two. The subscription fee is charged for every membership location. Normally, the number of locations would be smaller than thenumber of service offices.

© Copyright SMS CO.,LTD.

5

1

The Overseas Segment（Full-year）

 Segment sales increased 7% YoY.
 Sales for 2H grew strongly compared to the same period of the previous year.

Year-on-Year Comparison of Sales [JPY million]_
Overseas

FY03/17

4,786

FY03/18

5,109

YoY
Change+7％Highlights• Achieved YoY growth despite the negative impact from the sell-offs of businesses including eChannelling (Sri Lanka)
conducted in the previous fiscal year.
• Launch of Global Career Business triggered by the acquisition of Melorita as well as the solid performance of MIMS’s
existing businesses contributed to the segment growth.

© Copyright SMS CO.,LTD.

6

1

FY03/18 Consolidated Financial Results

P3-P6

2

FY03/19 Strategy and Consolidated Financial
Forecasts

P8-P38

3

Appendix

P40-P53© Copyright SMS CO.,LTD.

7

2
2

Our Mission

We create value and contribute to society by providing
an “information infrastructure for an aging society.”© Copyright SMS CO.,LTD.

8

2

Business Domains and Stakeholders

 Define our business domains in an aging society as Elderly Care, Medical Care,
Healthcare and Senior Life.
 Provide stakeholders such as operators, professionals and end users with avariety of information services.
Stakeholders

Business domains in an aging society
Senior Life*2

Operators

Senior Life
Senior Life
RelatedCompanies

Healthcare*1

Professionals

Senior Life
RelatedWorkers
Facility
Care

Elderly Care

Medical Care

Operators
Developing
Care Plans

Care
Workers

Care
Managers

Home-visit
Elderly Care

Healthcare

EU

Healthcare
RelatedWorkers
Pharmaceutical
Companies
Doctors

People with
Interest in Health
家族
The
Patients
Elderly
要介護者
患者

PT/OT/
ST

Healthcare
RelatedCompanies

Pharmacists
Pharmacies
Other
Co-medicals

NursesClinics

DaycareElderly Care

Home-visit
Nursing*1. Covers health-related services that are not subject to public elderly care insurance or medical care insurance*2. Covers services related to daily life in an ageing society© Copyright SMS CO.,LTD.

Hospitals

Medical Care9

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.

■ AsiaJapan

Indonesia

Korea

Thailand

China

VietnamHong Kong

Philippines

TaiwanMyanmarSingapore

India

Malaysia■ Oceania
Australia© Copyright SMS CO.,LTD.

New Zealand102Size of Our Target Market

 Healthcare-related expenditures continue to rise both in Japan and Asia.
 In 2025, our total addressable market will be at least over USD 29.4 billion in
the regions.
Market size of healthcare-related information services in Japan and Asia
USD

671 billion

Japan
Elderly and medical care
Expenditures*1

454
491

315

1％*

359
Medical care

6.7 USDbillion258

Elderly care

57

95

2005

2015

Asia

180

Total market sizein 20252025
USD

2,269 billion

Healthcare expenditure*2

USD 29.4 billion

1％*

22.7 USD
billion

1,152
295
2005

2015

2025

* Information services would accountfor at least 1% of the total expenditure© Copyright SMS CO.,LTD. *1. Sources: 2005 – MHLW; 2015, 2025 - MHLW estimates. *2. Sources 2005 – WHO; 2015,2025 - SMS estimates.

11

2

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

Breakdown of Net Sales（JPY million）

・ No.1 player of medical and elderly care recruiting services
MedicalCare
Elderly
Care

Kaipoke・ Management support service for elderly care operators

Overseas Business (MIMS)

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

New Business・Developing a series of new businesses© Copyright SMS CO.,LTD.

12

2Growth Scenario

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

4. Growth of New businesses

3. Growth of Overseas businesses
driven by MIMS
2. Growth of Kaipoke

1. Growth of Career businessesNow© Copyright SMS CO.,LTD.

Future13

Career Business© Copyright SMS CO.,LTD.

14

2

Environment：Care Workers and Nurses

 Labor shortage continues to be a serious issue despite the increasing
numbers of care workers and nurses.
Number of care workers and their turnover rate*1

Number of nurses and their turnover rate *3

Jobs-to-applicants ratio of care workers*2

Jobs-to-applicants ratio of nurses*2

FY11

FY12

© Copyright SMS CO.,LTD.

FY13

FY14

FY15

Care workers

NursesAll industries

All industries

FY16

FY17

FY11

FY12

*1. Sources：Number - MHLW ; Turnover rate - Care Work Foundation *2. Source：MHLW*3. Sources：Japanese Nursing Association ; Number of workers in 2016 - SMS estimate

FY13

FY14

FY15

FY16

FY17

15

2

Our Strengths

 As a pioneer, we created attractive markets and established No.1 positions.
 With strong competitive advantages in attracting healthcare professionals(HCPs) and gaining job orders, we enjoy a virtuous cycle where we can draw
more and more HCPs and business operators.
HCPs

Operators

Our customers are:

We receive orders from:(percentage of registered members for ourservices among the number of people whochange their jobs annually)

NursesOver 100%

Created the market as a pioneer
andlead the market as No.1 player

Hospitals
70%

Recruiting Agent (RAG) for Nurses
No.1 share
Recruiting Ads (RAD) for Care Workers
No.1 share

Care workers
60%

RAG for Care Workers
Lead market expansion

Developed strong relationships
with operators and their heavy
dependence on us.

Accumulated online
marketing know-how byconducting it in-house*1.
© Copyright SMS CO.,LTD.

Major elderly
care operators
60%*1. Our competitors traditionally outsourced their web marketing.

162Strategy of Career Business 1/3

 Maximize value for both HCPs and operators by diversifying service offeringsand expanding types of professionals we cover.

Maximize value for
HCPs and operators

Diversify
services+αCommunity
Education
Temp staffing

Careerservice

RAD*1- Expand market share- Increase occupation
coverage

RAG*2
Nurse
© Copyright SMS CO.,LTD.

Care worker*1. Recruiting Ads *2. Recruiting Agent

Care
manager

PT/OT/ST

Therapist

+α
17

2

Strategy of Career Business 2/3

 Meet diverse needs of HCPs and operators in the industries by offering not
only Recruiting Ads (RAD) and Recruiting Agent (RAG) services but also awide range of other services such as schools and web communities.
Qualification
obtaining support

RAG

Operators

Qualification course info

SchoolHCPs
RAD

Community

Other
services
HR solution© Copyright SMS CO.,LTD.

Temp staffing

18

2Strategy of Career Business 3/3（Elderly Care Career）

 Leveraging our database of 850K registered care workers, we expand our services from

Recruiting Ads (RAD) to Recruiting Agent (RAG) and temporary staffing to maximize
value offered to both care workers and operators.
Contribute to the increase of care workers by supporting them to acquire qualifications.
Care
workers

Employment
supportOperators

Experienced

RAG

850,000
registered care workers

RAD

New entry
Qualification
obtaining support
Qualification
course info

© Copyright SMS CO.,LTD.

Temp
staffing

School19

2

Growth Scenario

 The Career Segment as a whole will grow continuously.
 Elderly Care Career has enormous growth opportunities.
Current and future sales by segment*1*2: Current sales: Sales estimatesin the future
RAG for
PT/OT/STRAG for Care
Workers
Full-scale expansion
started in FY03/17.

RAG for
Care
Managers

Temp staffing

RAG for Nurses
RAG forOther
Co-medicals

SchoolRAD forCare Workers

RAD forNursesRAG/RAD for
Judo Therapists
etc.

CareerSegment
16,863 *3(JPY million)

RAD for NewlygraduatedNursesLaunched by
WILLONE acquisition
in FY03/18

Elderly Care：5,836*3 (JPY million)

Medical Care：11,027*3 (JPY million)*1. Career businesses for doctors and pharmacists are operated by M3 Career, Inc. which is a joint venture between M3, Inc. (51%) and SMS (49%).
RAD: Recruiting Ads *3 The figures are the actual sales for FY03/18.

© Copyright SMS CO.,LTD. *2 .RAG: Recruiting Agent

20

Kaipoke© Copyright SMS CO.,LTD.

21

2

Environment：Elderly Care Operators

 The number of elderly care operators continues to increase as the populationages.
The number of elderly care operators service
offices and the population of the elderly*1# of elderly care operators offices CAGR:5%

Services offered by Kaipoke*2・Home care support services
・Home-visit elderly care・Day care・Home-visit nursing
・Outpatient rehabilitation etc.

Services not offered by Kaipoke*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.

*1. Source：Number of elderly care operators service offices – SMS estimates based on MHLW statistics; Population of the elderly - MIC© Copyright SMS CO.,LTD. *2. As of Mar. 201822

2

Strategy of Kaipoke 1/3

 Penetrated the market as a discounter of insurance claim system.
 Changed the service concept and established a unique position as a provider
of management support service for elderly care operators.

Before February 2014

Since February 2014

Insurance
claim
systemInsurance
claim
system（ARPU)

JPY 3,000/month• Intense competition among many providers of
on-premise insurance claim system.
• SMS entered the market as a discounter withcloud-based insurance claim system.
© Copyright SMS CO.,LTD.

Recruiting
Ads
MarketingManagement support service

Finance（ARPU)

Operation
improvement

Purchasing

JPY 20,000/month• Provide highly differentiated management
support service with the No.1 recruiting ads
service integrated.
23

2Strategy of Kaipoke 2/3

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

Only insurance claim system

Management support

21,400 service offices（15,050 locations）

Many companies
entered the market

Changedthe service concept
and price

Public elderly careinsurance started

2000© Copyright SMS CO.,LTD.

Apr.
2010

Feb.
2014

Apr.
2015

Apr.
2018

Future24

2Strategy of Kaipoke 3/3

 Maximize value offered to elderly care operators by adding more services aswell as expanding types of operators we cover.
Services provided

Maximize value for
operators

Add more
services＋αPurchasing
Finance
MarketingOperation improvement
Recruitment

・Expand market share
・Increase operator
coverage

Management
現在のsupport service
カイポケ売上Insurance claim
Home care
support© Copyright SMS CO.,LTD.

Home-visit
elderly care

Day careHome-visit
nursing

Outpatient
rehabilitation＋αNumber ofmemberships

25

Overseas Business© Copyright SMS CO.,LTD.

26

2Strategy 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 withpharmaceutical companies and hospitals.
Pharmaceutical
Companies

HCPs

Pharma Marketing

HCP
Platform

Career Service

Hospitals
andClinics

Career portal site

Healthcare DataDrugdatabase© Copyright SMS CO.,LTD.

27

2Strategy of Overseas Business 2/3 （Pharma Marketing）

 Taking full advantage of strong marketing platform created through a variety ofservices to HCPs, we maximize value offered to pharmaceutical companies.

Pharmaceuticalcompanies

HCPs
Drug information
Academic
conferences/events

News

Careerinformation

Strengthen
relationships

OnlineCommunity

Education

Maximize
value

Research

Strong marketing platform© Copyright SMS CO.,LTD.

28

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

 Accelerate geographical expansion by combining MIMS’s HCP database, SMS’s
expertise in career business and Melorita’s cross-border matching know-how.
 Establish a dominant position as the leading supplier of Asian HCPs to both insideand outside the region.
HCPs

Malaysia

Hospitals

Attract
Job seekers

Database of 2.3M HCPs

Malaysia
Job orders
Saudi Arabia

Expertise in careerbusiness

Philippines
Register

India

Cross-bordermatching know-how

Introduce
candidates

UAE

UK

…
© Copyright SMS CO.,LTD.

Supply platform ofAsian HCPs

…

＋α

US

＋α
29

New Business© Copyright SMS CO.,LTD.

30

2Strategy of New Business Development

 Constantly develop new businesses focusing mainly on Healthcare and SeniorLife domains.

Domains

Healthcare*1

Senior Life*2

OutlineServices such as
health guidance,
aggravation
prevention andhealth consultation
etc.

Services related todaily life of senior
people such as
food, housing, andelderly cares etc.

© Copyright SMS CO.,LTD.

Services
Preventive solution forSpecific health guidance Web community for
onset/aggravation of lifestylesolution
nutritionists
diseases

Q&A site on health

Solution for dementia
prevention

Habituation support ofdementia prevention

Web community for families User review site regarding Home-delivered
with those requiring elderly care elderly care operators
meal search site

Housing renovation
operators search site

Information portal ofdementia

Information portal of
diabetes

Livelihood support
search site

*1. Covers health-related services that are not subject to public elderly care insurance or medical care insurance*2. Covers services related to daily life in an aging society

31

FY03/19 Forecasts© Copyright SMS CO.,LTD.

32

2

FY03/19 Consolidated Financial Forecasts

 Expect 20% growth in operating income and 16% growth in net income.
Consolidated P/L Statement [JPY million]© Copyright SMS CO.,LTD.

FY03/18
ActualFY03/19
Forecast

Difference(Amount)

YoY
ChangeNet Sales

26,611

32,273+5,661+21％

Operating
Income

4,021

4,827

+805

+20％

Ordinary
Income

5,007

5,803

+795

+16％

Net Income

3,361

3,905

+543

+16％
33

2

Historical Financial Results and FY03/19 Forecasts

 Expect to achieve growth in both net sales and ordinary income for the 15th
consecutive year since our establishment.
Trends in net sales and ordinary income（Ordinary income, JPY million）（Net sales, JPY million）

32,27333,00030,000

8,800
8,000

26,61127,0007,200

23,05424,000

6,400
5,803

21,0005,600

19,06918,000

5,007
4,430

4,800

15,05615,000

3,509

4,000

12,046
12,000

10,181
5,177

6,000

7,172

1,238

3,000
0

2,340

8,692

9,000

58 -5

383
49

835
108

7,618

1,266

1,530

1,734

2,693

1,990

3,200
2,400
1,600

1,545 2,715
415
269

800
0

FY03/04 FY03/05 FY03/06 FY03/07 FY03/08 FY03/09 FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16 FY03/17 FY03/18 FY03/19(3,000)© Copyright SMS CO.,LTD.

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

(800)

34

2

The Career Segment FY03/19 Forecasts

 Expect substantial growth by increasing the number of consultants.
 Recruiting Agent (RAG) for care workers will drive the high growth of Elderly
Care Career.
Year-on-Year Comparison of Sales [JPY million]_

FY03/18
ActualFY03/19
Forecast

YoY
ChangeElderly Care
Career

5,836

8,466

+45%

Medical Care
Career

11,027

12,903

+17%

Total

16,86321,369+27%

Highlights【Elderly Care Career】• RAG will grow strongly by raising consultants headcount and attracting more job seekers through combining multiple
channels.
• RAG for care managers will also grow significantly.
【Medical Care Career】• Increase in consultants will contribute to the growth of RAG business for nurses.
• WILLONE, a career service provider for Judo therapists and licensed masseurs*1 we acquired in FY03/18, will also
contribute to the growth.
© Copyright SMS CO.,LTD.

*1. Includes finger pressure practitioners, acupuncturists, moxibustion practitioners.

35

2

The Elderly Care Operators Segment FY03/19 Forecasts

 Expect a robust growth by increasing memberships as well as optional

中堅事業者の総数、定義等

services generating additional sales.

Year-on-Year Comparison of Sales [JPY million]_ FY03/18
ActualElderly Care
Operators

3,328

FY03/19
Forecast

3,941

YoY
Change+18%

Highlights••

Increase in Kaipoke memberships will drive ongoing growth of the segment.
 Membership locations will be up 1,800 over the year.
（from 15,050 as of Apr. 2018 to 16,850 as of Apr. 2019）
 Continue to focus on acquiring small and medium sized operators.
Optional add-ons such as additional tablets/smartphones and factoring service will also contribute to the growth.

© Copyright SMS CO.,LTD.

36

2

The Overseas Segment FY03/19 Forecasts

 MIMS’s Pharma Marketing business will grow steadily.
 Accelerate the full-scale expansion of Global Career Business.

Year-on-Year Comparison of Sales [JPY million]_ FY03/18
ActualOverseas

5,109

FY03/19
Forecasts

5,706

YoY
Change+12％Highlights【Pharma Marketing】
・ Expect to grow by leveraging our multi-channel advertising capability targeting at HCPs.
【Global Career Business】• Accelerate growth through geographical expansion of both supply sources of HPCs and client hospitals.

© Copyright SMS CO.,LTD.

37

2

1H/2H Balance of Operating Income Expected in FY03/19

 Expect a decrease in operating income in 1H, followed by a strong growth in 2H.
 Make upfront investment in hiring a large number of consultants, which will lead to a
substantial increase in Q1 costs, in order to accelerate the growth of career businesses.

1H/2H balance of operating income（JPY million）

4,827

5,000
4,000

4,021
2,907

3,000

1,876

2,000
1,000
0

2,145

1,919

FY 03/2018
Actual

FY 03/2019
Forecast
1H© Copyright SMS CO.,LTD.

2H

38

1

FY03/18 Consolidated Financial Results

P3-P6

2

FY03/19 Strategy and Consolidated Financial
Forecasts

P8-P38

3

Appendix

P40-P53© Copyright SMS CO.,LTD.

39

3

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

Attracting job seekers

Sales activity

Registration

Job orders

Matching

Matching

NursesHospitals

Elderly care
operators

Consultants
Fee

Business model of Recruiting Ads
Receive a fee for each application for a job via our Recruiting Ads
WebsiteAttracting job seekers

Sales activity

Registration

Recruiting ads

Application
Care workers© Copyright SMS CO.,LTD.

Fee

Elderly care
operators

40

3

Business model of Kaipoke

Provide services as a package out ofapprox. 40 contents in total.

Insurance
Generate claims for the elderly care insurance.
claim
systemProvide cloud-based
management
support service

Recruitment

Provide SMS’s industry-leading recruiting Ads

Marketing Make flyers and a list of care managers who are
the sales target of elderly care operators.

Elderly care
operators

Pay monthly
subscription fee(fixed price*1)

Operation
improve- Offer an iPad for free to enable care workers tocomplete documentation at their customer sites.
ment

Finance

Provide factoring service to help operators
improve cash flows.

Purchasing Procure equipment necessary for elderly care
operators easily, at a low price© Copyright SMS CO.,LTD. *1. Additional payment is applied when we provide two or more tablets, factoring, etc.

41

3MIMS Group Profile

MIMS Group global coverage© Copyright SMS CO.,LTD.

MIMS Group profile

Founded

1963

Businessmodels･Pharma Marketing･Healthcare Data
・Career Service

Globalcoverage

14 countries and regions in
Asia and Oceania

Number ofmemberships

Approx. 2.3 million memberships including
0.5 million doctors

Acquisition
date

Oct. 7, 2015

Shareholding
ratio

SMS 60%, Mitsui 40%

42

3Strengths 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

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

Healthcare
professionals

Pharmaceuticalcompanies

2. Strong membershipbase of HCPs

3. Business relationships
with pharma companies

 Approx. 2.3 million HCP memberships including
approx. 0.5 million doctors

 Most manufacturers of new drugs in the region post
information of their drugs on MIMS’s database© Copyright SMS CO.,LTD.

43

3

Business Models of MIMS

Healthcare Data

Pharma Marketing

Pharmaceuticalcompanies
Posting fee

Drug information
Usage fee

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

Drug information via
various media(mainly paper based)

Healthcare professionals(e.g. doctors, nurses,
pharmacists)© Copyright SMS CO.,LTD.

Healthcare institutions(e.g. hospitals, clinics,
pharmacies)44

3

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

FY17

FY18

1Q

2Q

3Q

4Q

1Q

2Q

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)

・・・

・・・

：MIMS P/L

© Copyright SMS CO.,LTD. *1. Q1-4 presented above are those of the fiscal year of SMS. SMS fiscal year ends in March, while MIMS fiscal year ends in December.

45

3

Business Portfolio

 Provide more than 40 services.
 Constantly develop new businesses to create new pillars of our businesses.
Segment

Subsegment

Services*1*2*3

Elderly Care
Career
CareerMedical Care
CareerElderly Care
Operators

Overseas－－

RAG for care workers Certification course information

Web community for
PT/OT/STRAD for newly-graduatedcare workers

Temporary staffing
for care workers

Elderly care certification course

Web community forcare managers

RAG for nurses

RAG for medical
technologists

RAG for radiological
technologists

RAG for clinical engineers

RAD for nurses

RAD for newly-graduatednursesRAG for care managers

RAG for PT/OT/ST

RAD for care workers－

HR solution
for hospitals

Web community for nurses
Information portal for
RAG for
Scholarship information portal and student nurses
Judo therapists etc. hospital admin. managers

Management support service for elderly
care operators
RAG for nurses
Career related service
Drug information service forhealthcare professionals and (Malaysia and Saudi Arabia, for nurses (South Korea)
etc.)
institutions
Preventive solution for
onset/aggravation oflifestyle diseases

Business
Development

RAG for nutritionists

Web community
for care workers

Specific health guidance
solution

Solution for dementia
prevention

Habituation support ofdementia prevention

Housing renovation
operators search site

Livelihood support
search site

Web community for
nutritionists

Doctor consultation(Indonesia)

Q&A site on health

Medical ad services(Philippines)

Medical ad services(Indonesia)

Information portal ofdementia

Information portal of
diabetes

Information portal of
Web community for families User review site regarding Home-delivered
housing for the elderlywith those requiring elderly care elderly care operators meal search site

Web community
for pharmacists*1. As of March, 2018 *2. RAG stands for Recruiting Agent; RAD stands for Recruiting Ads

Publishing for nurses

Online academic media
for nurses

Web community for
managers ofelderly care operators© Copyright SMS CO.,LTD. *3. Career businesses for doctors and pharmacists are operated by M3 Career, Inc. which is a joint venture between M3, Inc. (51%) and SMS(49%).

46

3

History of Service Launches 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

RAG for care managers: Care Jinzai-bank May 2003
RAD for newly graduated care workers: Kaigo Job Gakusei-ban Jul. 2003
Certification course information: Shikatoru Nov. 2003
RAD for care workers: Kaigo Job Mar. 2004
Web community for elderly care professionals: Care Tomo Oct. 2005
Web community for care managers: Care Mane.com

Elderly
Care
Career*1

Sep. 2006

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

Web community for PT/OT/ST: Ryohoushi.com Dec. 2013

RAG 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© Copyright SMS CO.,LTD. *1. RAG stands for Recruiting Agent; RAD stands for Recruiting Ads

47

3

History of Service Launches 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

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

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

RAD for newly-graduated nurses: Nurse-senka Shusyoku-navi Aug. 2009
HR solution for hospitals Apr. 2011

MedicalCare
Career*1

RAG for nutritionists: Eiyoshi Jinzai-bank May 2012
Scholarship information portal: Kango Shogakukin-navi Oct. 2012
RAG for medical technologists: Kensagishi Jinzai-bank Sep. 2013

RAG for radiological technologists: Hoshasengjshi Jinzai-bank Jun. 2014
RAG for clinical engineers: Kogakugishi Jinzai-bank Jul. 2014
Information portal for hospital admin. managers: Jimcom Sep. 2014
RAG for Judo therapists etc. WILLONE Nov.2017© Copyright SMS CO.,LTD. *1. RAG stands for Recruiting Agent; RAD stands for Recruiting Ads

48

3

History of Service Launches 3/4
03/04

03/05

Elderly
Care
Operators

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

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

(Korea) Career related service for nurses: Nurscape Sep. 2011
(Indonesia) Doctor consultation: MeetDoctor Jul. 2013
(Philippines) Medical ad services Jan. 2015

Overseas(Indonesia) Medical ad services Feb. 2015
Drug information service for healthcare professionals and institutions: MIMS Oct. 2015
Global career service Jun. 2017

Information portal of housing for the elderly: Kaigo DB Jul. 2006
Web community for pharmacists: Cocoyaku May 2009

Business
Development

Web community for families with those requiring elderly care: Anshin Kaigo Jun. 2009
Publishing for nurses: Nurse-senka Books Aug. 2009
Web community for nutritionists: Eichie Jun. 2011

© Copyright SMS CO.,LTD.

49

3History of Service Launches 4/4
03年度 03/05
04年度 03/06
05年度 03/07
06年度 03/08
07年度 03/09
08年度 03/10
09年度 03/11
10年度 03/12
11年度 03/13
12年度 03/14
13年度 03/15
14年度 03/16
15年度 03/17
16年度 03/18
17年度
03/04

Information portal of dementia: Ninchisho Net Aug. 2011
Home-delivered meal search site: Lifood Nov. 2013
Q&A site on health: Narukara Dec. 2013
User review site regarding elderly care operators: Tonari no Kaigo Apr. 2014

Web community for managers of elderly care operators: Kaigo Must Feb. 2015

Livelihood support search site: Help You Oct. 2015

Business
Development

Online academic media for nurses: Nurse Press Apr.2016

Housing renovation operators search site: Hapisumu Apr.2016
Information portal of diabetes: Tonyobyo Net Jul. 2016
Solution for dementia prevention : Nintore Apr. 2017
Preventive solution for onset/aggravation of lifestyle diseases: Remote Chat Guidance Apr. 2017
Habituation support of dementia prevention: Nintore Challenge Oct. 2017
Specific health guidance solution: Remote Chat Guidance Oct. 2017

© Copyright SMS CO.,LTD.

50

3Dividends

 Plan to pay a dividend of JPY13 per share.

Trend in the amounts and the payout ratio of dividends*1

14.8%

15.6%

18.0%

16.0%

13.6%
11.6%

16.3% 16.8%
13

12.5%

12.3%

11

(JPY)
14.0%

12.0%

10.0%

6.8%

7

7
8.0%

5

6.0%

4
2.5

3

4.0%

1.25

2.0%

0

0.0%

FY03/10

FY03/11

FY03/12

FY03/13

FY03/14

FY03/15

FY03/16

FY03/17

FY03/18© Copyright SMS CO.,LTD. *1. The stock splits we had in the past are taken into account for the dividend amount calculation.

51

3

Historical Financial Results(JPY million)
FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

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

26,611

Cost of
Sales

0

5

20

38

77

149

375

319

431

700

952

1,332

2,204

3,727

4,338

SG&A
Expenses

63

326

705

1,237

2,211

3,796

5,534

5,818

6,740

7,910

9,363

11,644

14,10815,681

18,251

Operating
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

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

Net Income

▲5

31

63

157

244

719

717

876

1,004

1,226

1,380

1,824

2,265

2,801

3,361

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

46,087

Liabilities

55

166

196

489

822

1,410

1,266

1,430

1,579

1,794

2,331

4,497

28,532

21,64822,446

Net Assets

4

190

369

527

983

1,708

2,379

3,242

4,136

5,153

6,074

6,923

13,157

21,58323,641Equity 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

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

DPS*1
（JPY）

-

-

-

-

-

1.25

1.25

2.5

3

4

5

7

7

11

13

Dividend
Payout Ratio
（%）

-

-

-

-

-

6.8

6.8

11.6

12.3

13.6

14.8

15.6

12.5

16.3

16.8

© Copyright SMS CO.,LTD. *1.The stock splits we had in the past are taken into account for DPS calculation.

52

3

Number of Employees and Shareholder Composition
Number of Employees
Number of employees and its breakdown as of March 31, 2018
Employees (consolidated)

1,953

SMS CO., LTD.

307

SMS Career CO., LTD.

694

Subsidiaries and Sub-subsidiaries

952

Japan

249

Overseas703

Shareholder composition*1【as of March 31, 2018】
Number ofshareholders
4,040

7%

Founders

6%
19%
1%

40%

27%

Directors, Employees andShareholding associations
Domestic Institutional Investors
Foreign Institutional Investors
Indivisual Investors
Others© Copyright SMS CO.,LTD. *1. Pie chart shows the ratio of number of stocks held by each category.

53

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 March
31, 2018. These forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties andother factors that may cause the Company’s actual results, performance, achievements or financial position to be materially different 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 inwhich the Company operates;
・reliance on digital and information technology, including with respect to the handling of elderly care, medical care and otherclient information and 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 toemployment 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, the Hong 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 a 60% interest in 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 describedin “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 these materials.
*1. http://www.bm-sms.co.jp/eng/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© Copyright SMS CO.,LTD.

54