MEDICAL SYSTEM NETWORK Co., Ltd.
Fiscal Year Ending March 2019

Earnings Report

First Section of Tokyo Stock Exchange; Securities Code: 4350
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights ReservedAbout contents covered※ The contents of this report pertaining future earnings described are based on
information the company has held, and on certain assumptions supervisingrational judgement, and are not what the company promises to achieve.
There are numerous factors that may cause actual earnings to differ. Caution
is given to the accuracy of information, and we do not take responsibility forloss etc., as a result of misinformed information.
※ Furthermore, this report is not prepared for the purposes of investment
solicitation. Readers are responsible for their own judgement in any decision
regarding investments.

Please see the following link for our English information.

http://www.msnw.co.jp/eng/

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

2

Table of Contents

Earnings Highlight・・・ 4

Topics・・・ 12

Earnings Forecast for FY3/2020 andCore Strategies

・・・ 20

Reference Materials

・・・ 28MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved3

Earnings Highlight

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

4FY3/2019: Consolidated results
Factors forincrease insales anddecrease inprofitSteady performance in leading Pharmaceuticals Network Business;decrease in profits due to NHI drug price and dispensing fee
revision implemented in April 2018
① FY3/18(results)② FY3/19(plan)③FY3/19(results)

Year-to-year comparison
Change（③-①）(Unit: million yen)

Change (%)

Progress rate
Difference（③-②）

Percentage
achieved

Sales

93,977

95,50098,232+ 4,254+ 4.5 %

+ 2,732102.9 %

Operating profit

3,163

1,700

1,428

▲ 1,734▲ 54.8 %▲ 271

84.1 %

3,250

1,650

1,501

▲ 1,749▲ 53.8 %▲ 148

91.0 %

1,022

520

462

▲ 559

▲ 54.7 %▲ 57

89.0 %

34.45

16.57

15.25

▲ 19.20－▲ 1.32

－

5,711

－

4,200

▲ 1,511▲ 26.5 %－－Profit percentage

Ordinary profit
Profit percentage

Profit attributableto owners ofparentProfit percentage

Earnings per
share
(Yen)

※

EBITDA

3.4 %

3.5 %

1.1 %

1.8 %

1.7 %

0.5 %

1.5 %

1.5 %

0.5 %

※ EBITDA is the calculated value of “operating profit + depreciation + amortization of goodwill”

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

5FY3/2019: Results in each segment■Sales

① FY3/18(Unit: million yen)(results)② FY3/19(plan)③FY3/19(results)

Year-to-year comparison
Change（③-①）

Change (%)

Progress rate
Difference（③-②）

Percentage
achieved

93,977

95,50098,232+ 4,254+ 4.5 %

+ 2,732102.9 %

Pharmaceuticals
Network Business

3,639

3,658

3,951

+ 311

+ 8.6 %

+ 293

108.0 %

Dispensing
Pharmacy Business

87,17288,45790,706+ 3,533+ 4.1 %

+ 2,248102.5 %

6,228

6,310

6,742

+ 514

+ 8.3 %

+ 432

106.9 %

▲ 3,063▲ 2,926▲ 3,167

▲ 104

Sales

※

Other 4 Businesses
Adjustments■Operating Profit① FY3/18(Unit: million yen)
Profit percentage in brackets(results)

3,163

Profit of segments（3.4 %）

1,949② FY3/19(plan)

1,700（1.8 %）

2,034③FY3/19(results)

1,428（1.5 %）

2,331－

Year-to-year comparison
Change（③-①）

Change (%)

▲ 241

－

Progress rate
Difference（③-②）

Percentage
achieved▲ 1,734▲ 54.8 %▲ 271

84.1 %+ 381+ 19.6 %+ 296

114.6 %

1,992

▲ 65.1 %▲ 631

62.8 %（▲ 1.9 %）Pharmaceuticals
Network Business（53.6 %）

Dispensing
Pharmacy Business（3.5 %）（1.9 %）（1.2 %）

Other 4 Businesses

▲ 235

▲ 335

▲ 186

+ 48

－

+ 149

－

Adjustments▲ 1,610▲ 1,699▲ 1,784

▲ 173

－

▲ 85

－

※

3,060

（－）

（－）

（55.6 %）

1,699

（－）

（－）

（59.0 %）

1,068

（－）

（－）

（+ 5.4 %）▲（▲ 2.3 %）

（－）

（－）

※ Leasing and Facility related Business, Meal Catering Business, Home Visit Nursing Business, Manufacture and Market Pharmaceuticals Business
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

6FY3/2019: Results in each segment■ Trends in sales
120,000

Pharmaceuticals Network Business
Dispensing Pharmacy Business
Other 4 Businesses ※1

100,000※ Before offset of internal transactions(Unit: million yen)

6,742

80,000■ Composition ratio※ Before offset of internal transactions(Unit: million yen)

【Sales】

Other 4 ※1
Businesses

Pharmaceuticals
NetworkBusiness

6,742

60,00090,70640,000

3,951

6.6%

3.9%

20,0000

3,951

Dispensing
Pharmacy
Business※2

90,706
89.5%■ Trends in operating profit
6,000
5,000
4,000

Pharmaceuticals Network Business※ Before offset of internal transactions(Unit: million yen)

Dispensing Pharmacy Business【Operating profit】
Other 4 ※1
Businesses▲186

Other 4 Businesses ※1

▲5.8%

3,000

1,068

2,000

2,331

1,000
0
▲ 1,000※2

Dispensing
Pharmacy
Business

1,068
33.2%

Pharmaceuticals
Network Business

2,331

▲ 186

72.6%

※1 Leasing and Facility related Business, Meal Catering Business, Home Visit Nursing Business, Manufacture and Market Pharmaceuticals Business※2 FY3/2012 was a six-month period owning to a change in the fiscal year end

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

7

FY3/2019: Comparison to previous term
■ Sales

売上_前期⽐(Unit: million yen)

営業利益_前期⽐■
Operating profit
500

90,00091,00092,00093,00094,00095,00096,00097,00098,00099,000

2018/3期実績
FY3/2018
results

Drug charge at
薬局 既存店薬剤料
existing pharmacies
Technical
fee at
薬局
既存店技術料
existing pharmacies
薬局 M&A
M&A pharmacies

3,164

＋ 382
▲ 818

Technical fee atexisting pharmacies
薬局 既存店技術料▲1,047＋ 5,208＋1,288＋ 611
98,2322,500 million
3,000 yen)
3,500
(Unit:

Pharmaceuticals
network
Drug charge at
薬局
existing既存店薬剤料
pharmacies▲ 2,118

その他
Other

2,000

医薬品ネットワーク

＋ 312

賃貸・設備
Leasing andfacility

FY3/2019
results
2019/3期実績

1,500

2018/3期実績
FY3/2018
results

93,978

Pharmaceuticals
医薬品ネットワーク
network

1,000▲ 1,047

Labor
costs at
薬局
既存店労務費existing pharmacies

▲ 651

薬局その他
Pharmaciesʼ
other

＋524

その他
Other
2019/3期実績

FY3/2019 results

▲125
1,428

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

8

FY3/2019: Comparison to plan
■ Sales

売上_予算⽐90,000FY3/2019
plan
2019/3期計画
Pharmaceuticals
医薬品ネットワーク
network

92,00094,000(Unit: million yen)

96,00098,000(Unit: million yen)
500 700 900 1,1001,3001,5001,7001,9002,1002,3002,500

100,000

2019/3期計画
FY3/2019
plan

95,500

Pharmaceuticals
network
Drug charge at
薬局 既存店薬剤料
existing pharmacies＋3,743

existing pharmacies

Technical
fee at
薬局
既存店技術料
existing pharmacies

＋ 297
＋ 352

Technical
fee at
薬局
既存店技術料▲111

No.
of 既存店処⽅箋枚数
prescriptions at
薬局
existing pharmacies

1,700

医薬品ネットワーク

＋294

Drug
charge at
薬局
既存店薬剤料▲ 1,320

賃貸・設備
Leasing andfacility

＋ 496

その他
Other

▲370

2019/3期実績
FY3/2019
results■
Operating profit
営業利益_予算⽐

No.
of 既存店処⽅箋枚数
prescriptions at
薬局
existing pharmacies

▲ 434

Drug
purchase
price
薬局
仕⼊価格差異variance

▲ 597

賃貸・設備
Leasing andfacility

＋ 235

その他
Other

▲14

2019/3期実績
FY3/2019
results

98,232▲111

existing pharmacies【Reference】

1,428
Full-year plan(Compared to same term
previous year)

Full-year results(Compared to same term
previous year)

No. of prescriptions
at existing pharmacies

2.5%

0.7%

Unit price of prescriptions
at existing pharmacies

-8.6%

-4.0%

※ “Existing pharmacies” on this page refer to pharmacies continue to be in business on or after April 1, 2017.

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

9FY3/2019: Consolidated balance sheet
Point

Assets: increase in cash and deposits and in buildings and structures
Liabilities and net assets: increase in loans■ End of FY3/2018(Unit: million yen)

■ End of FY3/2019(Unit: million yen)

Assets62,759Liabilities

52,174

Assets

68,935

Liabilities

58,173Current assets

18,004Current liabilities

21,769Current assets

21,055Current liabilities

23,844

Cash and deposits

10,201

Short-term loans ※6,899

Cash and deposits

11,703

Short-term loans※

8,692

Fixed liabilities

30,404

Fixed liabilities

34,329Fixed assets

44,754Long-term loans

24,679Fixed assets

47,879Long-term loans

28,341

Tangible fixed assets

24,129Net assets

10,584

Tangible fixed assets

25,721

Net assets

10,761Intangible fixed assets

15,045

Capital2,097

Intangible fixed assets

16,235

Capital2,128

Goodwill

14,451

Capital surplus

1,160

Goodwill

15,710Capital surplus

1,185

5,578

Earned surplus

7,459

5,922

Earned surplus

7,616

Own shares▲275

Own shares▲233

Total liabilities
and net assets

62,759Total assets

Total liabilities
and net assets

68,93516.9 %

Equity ratio

Investments andother assets

Total assets

Equity ratio

62,759Investments andother assets

68,935

15.6 %※ Includes long-term loans that will be repaid within the year
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

10FY3/2019: Consolidated cash flows

2,840

Cash flows fromoperating activities

million yen

4,200 million yen▲1,672 million yen▲50 million yen

EBITDA ※Income taxes paid
Impact of increasing working capital※ Calculated by “operating profit + depreciation + amortization of goodwill”

Cash flows frominvesting activities▲5,921

million yen

M&A (acquisition of businesses and shares)▲3,866 million yen

Cash flows fromfinancing activities

4,338

Increase in loans

5,173 million yen

Repayments of lease obligations▲591 million yen■Cash flows transition(Unit: million yen)

15,00010,000

million yen

Acquisition and selling of land and buildings, etc.

■ FY3/2019■CF from operating activities■CF from investing activities■CF from financing activities
ーCF from operating activities + CF from investing activities

4,338
2,840

0

Cash and cash
equivalents at
end of year
Cash flows Increase in cash 11,520
from investing equivalents
resulting from
activities
4,338 change of scope of
consolidation

Cash flows
from operating
activities

2,840

125

▲ 5,921▲ 5,000▲ 10,000(Unit: million yen)

Cash and cash
equivalents atthe beginning of
the year

10,1365,000▲2,686 million yen※ FY3/2012 was a six-month period owning to a change in the fiscal year end※※

Cash flows frominvestingactivities▲5,921

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

11Topics

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

12Pharmaceuticals Network Business: Earnings summary(as of March 31, 2019)

Continuous high trends in number of new network affiliates; increase of 1,281 fromprevious term for a total of 3,790
Over FY3/19
target of■ Network affiliates (actual)(Unit: No. of network affiliates)

3,200

5,000

3,790

4,000
3,000
2,000

2,509
1,200

1,400

■ Network affiliates (net increase)(Unit: No. of network affiliates)

1,500
1,200

900

1,770

300

0

0

2016/3期
FY3/16

+739

600

1,000

2015/3期
FY3/15+1,281

2017/3期
FY3/17

2018/3期
FY3/18

2019/3期
FY3/19+370+37
2015/3期
FY3/15+200

2016/3期
FY3/162017/3期
FY3/17

2018/3期
FY3/18

2019/3期
FY3/19■ Ordering volume of pharmaceuticals(Unit: one hundred million yen)

2,337

250,000
2,500
2,000
200,000
2,000
1,500
150,000
1,500
1,000
100,000
1,000

1,691
977

1,237

1,374

500
50,000500
000

2015/3期
FY3/15

2016/3期
FY3/162017/3期
FY3/17

2018/3期
FY3/18

2019/3期
FY3/19MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

13

Pharmaceuticals Network Business:
Network affiliates distribution map (as of March 31, 2019)

Currently operating in 46 prefectures; reached 4,000 affiliates in May 2019

(Prefectures not yet advanced into: only Kochi Prefecture)【Breakdown of network affiliates】(Unit: No. of
network affiliates )Hokkaido

Generalnetwork
affiliates

MSNW
dispensing
pharmacies

119

123

205

TohokuHokkaido area

242

Total

MSNW pharmacies

242

23

228

Kyushu/Okinawa area

601

General network affiliates
MSNW pharmacies

Kanto/Koshinetsu

968

83

1,051

Tokai/Hokuriku

734

47

781

Kinki

528

62

590

Chugoku/Shikoku

275

22

297

Kyushu/Okinawa

541

60

601

3,370

420

3,790

Total

119
123

General network affiliates

541
60

297

General network affiliates
MSNW pharmacies

275
22

Tohoku area

228

General network affiliates

205
23

MSNW pharmacies

Kinki area

Tokai/Hokuriku area

590

General network affiliates

4,019 network affiliates
as of May 7, 2019

Chugoku/Shikoku area

MSNW pharmacies

Kanto/Koshinetsu area

781
528
62

General network affiliates
MSNW pharmacies

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

1,051
734
47

General network affiliates
MSNW pharmacies

968
83

14

Dispensing Pharmacy Business: Trends in number of pharmacies
5 new outlets, 30 outlets acquired through M&A, and 14 outlet closings since
end of previous fiscal year
Hokkaido area
Outlets at
end of
FY3/2018

Outlets at
end of
FY3/2019

Outlets asof May 7

Outlets at end of
previous term

377

399

420

Openings

8

5

1

Closings andtransferringbusinesses

▲5

▲14

－

M&A

19

30

－

Total

399

420

421

123
outlets
Tokai/Hokuriku
area
Chugoku/Shikoku
47 outlets
area

23 outlets

Tohoku area

23 outlets
Kyushu area
Kanto/Koshinetsu area

60 outlets

84 outlets

Kinki area

62 outlets

As of May 7

Number of outlets continue to increase every year through new openings and M&A■ Dispensing pharmacy outlet number trends of the past 10 years※

FY9/2010

FY9/2011

FY3/2012

FY3/2013

FY3/2014

FY3/2015

FY3/2016

FY3/2017

FY3/2018

FY3/2019

Openings

6

10

6

21

14

10

9

8

8

5

Closings andtransferring ofbusinesses

▲2

▲4

▲3

▲8

▲7

▲13

▲8

▲4

▲5

▲14

M&A

28

4

6

33

45

27

7

20

19

30

Number of outlets

204

214

223

269

321

345

353

377

399

420

※ FY3/2012 was a six-month period owning to a change in the fiscal year end

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

15

Dispensing Pharmacy Business:
Comparison of monthly dispensing fee with previous year
10.0%
Dispensing fee of all pharmacies - previous year
Dispensing fee of existing pharmacies - previous year

3.2%

5.0%

-0.1%

1.6%

0.1%

0.0%

-5.0%

-5.5%

-3.8%

-2.0%
-5.2%

5.3%
3.5%

3.3%

1.7%

-3.3%

9.0%

6.6%

0.8%

0.7%
-2.3%

-4.5%

-0.9%
-3.8%

-4.5%

-5.2%

-9.3%
-10.0%
April

May

June

July

AugustSeptember

OctoberNovember December

January

February

March

FY3/2019

Fullyear
total

April

May

June

July

AugustSeptember

OctoberNovember

DecemberJanuary

February

March

Dispensing fee of all
pharmacies forprevious year

▲ 0.1

+ 1.6

+ 0.1

+ 3.2

+ 1.7

▲ 4.5

+ 6.6

+ 3.3

+ 0.7

+9.0

+5.3

+3.5

+2.5

Dispensing fee ofexisting pharmacies
for previous year

▲ 5.5

▲ 3.8

▲ 5.2

▲ 2.0

▲ 3.3

▲ 9.3

+ 0.8

▲ 2.3

▲ 4.5

▲0.9

▲3.8

▲5.2

▲3.8

(Unit: %)※ “Existing pharmacies” refer to pharmacies that have been open for 13 or more months, thus the number can vary depending on month

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

16

Dispensing Pharmacy Business: Dispensing fee breakdown
Unit price of prescriptions has declined due to the NHI drug price and dispensing fee revisions
New pharmacy openings and M&A contribute to earnings

Point■ All pharmacies
No. of prescriptions (1000) a

Unit price
(yen)

8,181

FY3/198,806

Change+624【 Prescription unit price trends 】( + 7.6% )Drug charge perprescription

7,526

7,183

▲ 343

( ▲ 4.6% )Technical fee perprescription

2,349

2,224

▲ 125

( ▲ 5.3% )Total b

9,875

9,406

▲ 468

( ▲ 4.7% )Dispensing fee (million yen)c=axb

■ Existing pharmacies
No. of prescriptions (1000) a

Unit price(yen)

FY3/1880,788

FY3/18

8,114

82,834

FY3/198,129+2,046

10,000

6,000

2,000
( + 2.5% )0( + 0.2% )10,000▲ 259( ▲ 3.4% )Technical fee perprescription

2,349

2,219

▲ 130

( ▲ 5.5% )6,000

Total b

9,887

9,497

▲ 390

( ▲ 3.9% )4,000▲ 3,018

▲343円

7,183

2,349

2,224

FY3/18

FY3/19Technical fee
▲125円

9,887

■ Drug charge

9,497
Drug charge

8,000

2,000

77,203

7,526（ Unit: yen ） ■ Technical fee
12,0007,278

80,221Drug charge【 Prescription unit price trends 】

7,537

c=axb

9,406

4,000

Drug charge perprescription

Dispensing fee (million yen)

9,875

■ Drug charge

8,000

Change+15（ Unit: yen ） ■ Technical fee
12,000( ▲ 3.8% )

0

▲259円

7,537

7,278

2,349

2,219

FY3/18

FY3/19Technical fee▲130円※ “Existing pharmacies” refer to pharmacies that have been open for 13 or more months, thus the number can vary depending on month

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

17Dispensing Pharmacy Business:
Influence of the dispensing fee revision
FY3/2018 results(End of March 2018)

FY3/2019 plan(End of March 2019)

FY3/2019 results(End of March 2019)

Results (pre-revision)

Target (post-revision)

Results (post-revision)

Basic dispensing fee ratio(points)
FY3/18

Basic fee 1
Basic fee 2
Basic fee 3

41
25
20

FY3/19Basic fee 1
Basic fee 2
Basic fee 3-b

41
25
20

20 points
82 outlets
20.6%
41 points

25 points

307 outlets

9 outlets

FY3/182.3%

75% or higher 22
65% or higher 18

Basic
1
41
85% feeor higher
26
Basic
2
25
80% feeor higher
22
Basic
3-b
20
75% feeor higher
18

FY3/18

Standard
dispensing
premium

32

FY3/19New

Community
35
support system
premium

41 points
204 outlets
48.5%

25 points
Weighted average per prescription 28.3 points

0 points
54 outlets
13.6％
105 outlets
26.4％

22 points
239

0 points
181
outlets
45.5％

0 points
26.2％

outlets

18 points

60.1％

28.8％

Weighted average per prescription 17.2 points

Community support system
premium ratio (points)

45.0%

1.7%

18 points

FY03/19
FY3/1953.3%

15 points
208 outlets
49.4%

41 points

77.1%

Weighted average per prescription 36.0 points

Generic drug dispensing
premium ratio (points)

15 points

outlets
54.5％

Weighted average per prescription 18.8 points

19.7％
22 points
25.3％

Weighted average per prescription 15.2 points

Weighted average per prescription 29.1 points
0 points
26 points
98 outlets 120 outlets
23.3%
28.5％
18 points 22 points
89 outlets 114 outlets
21.1%
27.1%
Weighted average per prescription 16.6 points

35 points

32 points
217

26 points

0 points

33.4%

66.6%

Weighted average per prescription 13.8 points

25 points
9 outlets
2.1%

0 points
278 outlets
66.0%

35 points
143 outlets
34.0%

Weighted average per prescription 14.3 points※ Includes pharmacies closed on March 31, excluding suspended pharmacies

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved18Leasing and Facility related Business:
Building a community where medical care and nursing are one“Wisteria” SeriesServiced residence for the elderly + dispensing pharmacies, clinics, care offices, nurseries■ Occupancy trend (from March 2016)

98.7% (Wisteria Kiyota)
92.6% (Wisteria Otaru Inaho)
90.6% (Wisteria N17)

100%

80%

40%
20%
0%

68.3% (Wisteria Senri Chuo)

54.9%

60%

May 2016
Open
Mar/16

13.4%

Sep/16

24.4%

32.9%

41.5%

40.9% (Wisteria M1)
M1 has good start at 40%
occupancy since its opening
5 months ago

November 2018
Open
Mar/17

Sep/17

Mar/18Sep/18Mar/19■ Wisteria Senri Chuo: initiatives to improve occupancy
Raise recognition through media for amore centralized customer experience
・Various media advertisements
・Transportation service for facility tours
・Move-in trial and period extension
・Periodic health events

Leaflet for
health event

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

19

Earnings Forecast for FY3/2020
and Core Strategies

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved20

FY3/2020: Core strategies■ Community Pharmacy Network Business■ Leasing and Facility related Business・Increase Wisteria Senri Chuo andPharmaceuticals Network
・Streamline distribution:
follow-up on EOS order and return rates
・More local network initiatives(local collaboration between affiliates)

・Network affiliates target for end of term: 5,000

Wisteria M1 occupants■ Meal Catering and Home Visit Nursing
Business
・Stabilize profit and loss

(2 years ahead of medium-term plan target)

Dispensing Pharmacy
・Promote family pharmacy initiatives andacquire prescriptions:
implementation of strategies for each pharmacy
and reduce waiting times
・Streamline operations:medication history on tablets andautomatic ordering systems
・Enhance home and health care support functions
Manufacture and Market Pharmaceuticals
・Expand lineup: in-house and concurrent products■ Other themes
Responding to the revision of the Pharmaceuticals
and Medical Devices Law
・Follow-up during medication period
・Pharmaciesʼ classification by functions
・Remote medication guidance

Main duties
of community
pharmacies

Creating a system in preparation for
medical fee revision next term
・Find time for pharmacists to utilize theirprofessional abilities
・Cut down at headquarters and reconsider
employee allocation

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved21Changes in Segment Classification
The classification of segments was changed and reorganized to the following in April of this year
新 Segment

Old segment

New

Pharmaceuticals Network BusinessCommunity Pharmacy
Network Business

Dispensing Pharmacy BusinessLeasing and Facility related BusinessLeasing and Facility related Business

Meal Catering Business

Meal Catering Business

Other Businesses ※1

Other Businesses ※2※1 Home Visit Nursing Business,
Manufacture and Market Pharmaceuticals
Business

Manufacture andMarket Pharmaceuticals
Business※2 Home Visit Nursing Business【Main reasons for reorganization】•

With a growing number of Network Affiliates, we are expanding business lines to cover the entire supply
chain (manufacturing etc..)•

In response to this, we have changed the classification of segments to a developed system that accounts
for conflicts in overlapping business lines, while promoting value to the entire chain.

※ All values listed for this term in the “Earnings Forecast and Core Strategies” section of this document are values from after the change insegment classification
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

22Community Pharmacy Network Business OVERVIEW
Pharmaceutical supply chain

Maker

Wholesaler
Specializing in
generic drugs

FELDSENF PHARMA
Co., Ltd.

A community networkof medical facility and interprofessional
collaboration

Dispensing
pharmacy

Network affiliate

医師Doctors

General affiliates
PHARMACY

ケアマネ
Care

薬剤師

managers

ジャー・Price negotiations
・Settlements

MSNW
・Support for streamlining distribution
・Collaboration with the communityʼs
pharmaceutical associations

患者Patients

Link
Nanohana Pharmacy

栄養⼠
Nutritionists

薬剤師Collaboration between pharmaceutical network affiliates(local and network)・Share pharmaceutical inventory information
・Expand streamline distributions across communities
・Home care collaboration; share facilities; study sessions→ Share pharmaceutical inventory, equipment andknowledge, and interact with others
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

Nurses看護師・訪
andhome-visit
問看護師
nurses23

Earnings forecast for FY3/2020: Consolidated forecast
Satisfactory extension of network affiliates in pharmaceuticals network
business; contribution to performance from opening of new pharmacies and
M&A in previous term; anticipated gain in income and profit from increase inprescriptions at existing pharmacies

Point

FY3/19(Unit: million yen)(results)

FY3/20(plan)

ChangeChange (%)

Sales

98,232103,000+ 4,767+ 4.9 %

Operating profit

1,428

2,500

+ 1,071+ 75.0 %

1,501

2,400
2.3 %

+ 898

+ 0.8 %

+ 59.9 %

462

650

+ 187

+ 40.4 %－Profit percentage

Ordinary profit
Profit percentage

Profit attributable to owners of parent
Profit percentage

Earnings per share
(Yen)

1.5 %

1.5 %

2.4 %

+ 0.9 %

0.5 %

0.6 %

+ 0.1 %

15.25

21.39

+ 6.14

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

24Earnings forecast for FY3/2020: Forecast in each segment■Sales(Unit: million yen)

FY3/19FY3/20(results)

Change(plan)

Change (%)

98,232103,000+ 4,767+ 4.9 %

Community Pharmacy
Network Business

92,284

97,461+ 5,176+ 5.6 %

Other 3 Businesses※

6,622

6,113

▲ 509

▲ 7.7 %

Adjustments

▲ 674

▲ 574

+ 100

Sales

■Operating Profit(Unit: million yen)
Profit percentage in brackets

FY3/19FY3/20Change(%)

Change(plan)(results)

－

1,428

（1.5 %）

2,500（2.4 %）+ 1,071（+ 0.9 %）+ 75.0 %Community Pharmacy
Network Business

3,313（3.6 %）

4,783（4.9 %）+ 1,470（+ 1.3 %）+ 44.4 %Other 3 Businesses ※

▲ 150

（－）

▲ 240

（－）

▲ 89

（－）

－

Adjustments▲ 1,733（－）▲ 2,042

（－）

▲ 308

（－）

－

Profit of segments※ Leasing and Facility related Business, Meal Catering Business, Home Visit Nursing Business
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved25

Earnings forecast for FY3/2020: Comparison to previous term
■ Sales(Unit: million yen)

FY3/2019 results■ Operating profit(Unit: million yen)

FY3/2019 results

Pharmaceuticals
network＋Pharmaceuticals
network

Drug charge atexisting pharmacies※▲

Drug charge atexisting pharmacies▲

Technical fee atexisting pharmacies＋

Technical fee atexisting pharmacies＋

No. of prescriptions atexisting pharmacies
M&A and otherpharmacies
Other

＋

No. of prescriptions atexisting pharmacies＋＋

M&A pharmacies

＋

Other

▲

▲

FY3/2020 forecast＋

FY3/2020 forecast※Includes anticipated amount of impact by Drug price revision in October 2019.

【Reference】

Full-year plan(Compared to same term
previous year)

Full-year results(Compared to same term
previous year)

No. of Prescriptions
at existing pharmacies

0.7%

3.1%

Unit price of prescriptions
at existing pharmacies

-4.0%

-0.6%

※ “Existing pharmacies” on this page refer to pharmacies continue to be in business on or after April 1, 2018.

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

26

FY3/2020: About anticipated dividends
The dividend forecasts for FY3/20 are estimated to be at 5 yen per share for interim
and year-end dividends each, and 10 yen per share for annual dividends[Shareholder return index]■FY3/19 (prospects)■FY3/20 (forecast)

Annual dividend per share 10 yen
65.6%
Dividend payout ratio

Annual dividend per share
Dividend payout ratio(Unit: yen)

10.00

■ Interim■ Year-end

8.00
6.00

[Annual dividend per share trend]

10 yen
46.8%

10.00

5.00

5.00

5.00

5.00

4.50

5.00

5.00

5.00

5.00

FY03/16

FY03/17

FY03/18

FY03/19(prospects)

FY03/20(forecast)

5.00

4.00
2.00
0.00

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved27

Reference Materials

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved28

Corporate profile (As of March 1, 2019)
Company

MEDICAL SYSTEM NETWORK Co., Ltd. (“MSNW”)

Representative

Inao Tajiri
President & Representative Director

Established

September 16, 1999

Location24-3 Kitajujo-Nishi, Chuo-ku, Sapporo

Capital2.128 billion yen

Mainconsolidated
subsidiaries ※Hokkaido Institute for Pharmacy Benefit Co., Ltd.

Major
shareholders

合S&S
同 G.K.
会 社 エ ス ア ン ド エ ス 9.03 %沖Yasuyuki
中 恭 Okinaka
幸
8.17 %秋KBL
野EPB
治 S.A.
郎 107704
7.97 %ＫＢＬ
ＥＰＢ Ｓ. Ａ.107704
7.23 %Jiro Akino
⽇本トラスティ・サービス
4.82 %
Japan Trustee Services Bank
信託銀⾏株式会社(信託⼝)The Master Trust Bank of Japan (Trust account)

Nanohana Hokkaido Co., Ltd.

Businesses ※Nanohana Tohoku Co., Ltd.
Nanohana East Japan Co., Ltd.
Nanohana Central Co., Ltd.
Nanohana West Japan Co., Ltd.

Community Pharmacy Network BusinessLeasing and Facility related Business
Meal Catering Business
Home Visit Nursing Business

TOTAL MEDICAL SERVICE CO., LTD.
NAGATOMI PHARMACY CO., LTD.
FELDSENF PHARMA Co., Ltd.

Employees
Stock listing

257 (3,076 consolidated)
First Section of Tokyo Stock Exchange

Totalshareholders

7,782

Securities code

4350

Outstanding
shares30,642,600※ As of April 1, 2019
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved29Organization chart (As of May 7, 2019)50 ％※H&M Co., Ltd.※

Optimize Distribution of
Pharmaceuticals Business[Joint venture with HANSHIN
Dispensing Holding Co., Ltd.]

100 ％Hokkaido Institute for
Pharmacy Benefit Co., Ltd.

Pharmaceutical related
Data analysis ; Publishing Business

Nanohana Hokkaido Co., Ltd.

Dispensing Pharmacy Business:
Hokkaido area

Nanohana Tohoku Co., Ltd.

Dispensing Pharmacy Business:
Tohoku area

Nanohana East Japan
Co., Ltd.

Dispensing Pharmacy Business:
Higashi Nihon area

Nanohana Central Co., Ltd.

Dispensing Pharmacy Business:
Chubu area

100 ％Nanohana West Japan
Co., Ltd.

Dispensing Pharmacy Business:
Nishi Nihon area

※ As of April 1, 2019
Trade name change from “Kyoei Pharmacy Co., Ltd.”100 ％TOTAL MEDICAL SERVICE
CO., LTD.

Dispensing Pharmacy Business:
Kyushu area

100 ％

100 ％

NAGATOMI PHARMACY

Dispensing Pharmacy Business:
Kyushu area

100 ％
100 ％
100 ％

MEDICAL SYSTEM NETWORK
Co., Ltd

100 ％Community Pharmacy Network BusinessLeasing and Facility related Business77.7 ％

CO., LTD.

Agrimas Corp.※

Preventive Care Day Service BusinessPreventive Care Program Distribution
Business

100 ％Home-Visit Nursing Care
Station Himawari Co., Ltd.

Home Visit Nursing Business

80 ％FELDSENF PHARMA
Co., Ltd.

Manufacture and Market
Pharmaceuticals Business[Joint venture with DAITO]PALTECNO Co., Ltd.

Insurance Business /Construction Business

100 ％※ As of April 1, 2019
Trade name change from “Apotec Co., Ltd.”MSNW group outlets:
total 433 outlets(Includes care plan center (1), drug stores (8), and home-nurse stations (3))

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

SAKURA FOODS
CO., LTD.

Meal Catering
Business※ Not consolidated30

MEDICAL SYSTEM NETWORK Co., Ltd.
http://www.msnw.co.jp/

MSNW

Search[Contact us]
Corporate Planning Division
E-mail︓ info@msnw.co.jp

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved