MEDICAL SYSTEM NETWORK Co., Ltd.
Fiscal Year Ending March 2021

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.

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

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved2

FY3/2021 : MSNWʼs earnings and business overview
 Number of pharmaceutical network affiliates exceeded 6,000 in March 2021
 Achieved over 10% market share Net sales decrease due to the outbreak of COVID-19
 As people refrain from taking medical examinations, the number of prescriptions written
decreased An increase in long-term prescriptions is prompting a rise in prescription unit price Profit increase from shifting to high margin generic drugs andcontrolling costs
 Establishment of Pharmashift Co., Ltd. in October 2020
 New digital transformation business for pharmacies Partial sale of shares in December 2020 of investment in groupaffiliate Recorded 907 million yen extraordinary income

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

3

Table of Contents

Earnings Highlight・・・

5

Business Summary

・・・

12

Core strategies, Earnings Forecast for
FY3/2022 and Dividends

・・・

24

Reference Materials

・・・

３１

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved4Earnings Highlight

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

5FY3/2021 : Consolidated results
FY3/2021

FY3/2020（Unit: million yen）

(revised *1(result)

forecast)

FY3/2021(result)

Year-on-year
ChangeChange (%)

Net sales

105,241

103,000

104,257(983)(0.9%)EBITDA

4,645

6,426

Profit margin

4.4%

－

1,781

+ 38.3%

1,615

3,400

3,429

1.5%

3.3%

3.3%

1,560

3,400

3,479

1.5%

3.3%

3.3%

(895)

2,000

2,198

Operating profit
Profit margin

Ordinary profit
Profit margin

Profit attributable toowners of parent
Profit margin

Earnings per share
(Yen)

6.2%

－

(29.50)

2.1%

65.94

72.51

Progress rate
Difference+1,257－*1

Differrence (%)

101.2%－

1,814 + 112.3%+29

100.9%

1,919 + 123.0%+79

102.3%

3,093

－

+198

109.9%

102.01－

6.57－*1 Revised full-year
consolidated earnings forecast announced on February 5, 2021※
*2 EBITDA is the calculated value of “operating profit + depreciation + amortization of goodwill”

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

6FY3/2021: Results in each segment - Part 1
 Summary of Business Results by Segment
Segment

Earnings summary

・Despite the withdrawal of some large affiliates, the acquisition of new affiliates
Pharmaceutical
Network Business

was generally steady.
→ Expanded to 6,116 affiliates (+871 compared to the previous term), achieving
market share of over 10%
・Decrease due to the impact of the outbreak of COVID-19→ As people refrain from taking medical examinations, the number of prescriptions filled

Community
Pharmacy
Network
Segment

at existing outlets declined 9.4% YoY.

Dispensing
Pharmacy
Business→Existing outlet prescription unit price +7.7% YoY・Profitability improved by promoting the switch to more economical generic drugs
・Cost reduction through greater operational efficiency and improvements in※

Manufacture andMarketPharmaceuticals
Business
Digital ShiftBusiness
Leasing and Facility related Segment※
Meal Catering Segment
Home Visit Nursing Segment

personnel allocation
・Number handled: 51 products (23 components) at the end of March 2020
→ to 68 products (34 components) at the end of March 2021
・Number of affiliates handling these products : 369 (as of the end of March
2020) → to 1,116 (as of the end of March 2021)
・Launch of official LINE account "Your Family Pharmacy" service in March 2021
→ Number of registered LINE friends: More than 30,000 users in May 2021
→ Number of pharmacies installed ︓168 (as of the end of April 2021)
・Sluggish occupancy growth due to the impact of COVID-19
・Postponement of orders received for construction work
・Reduced operating loss by withdrawing from unprofitable facilities→ Operating loss: (43) million yen in the previous FY→ (21) million yen in the current FY・Operating loss: (71) million yen in the previous FY → (31) million yen in the current FY
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

7

FY3/2021 : Results in each segment part 2■Net Sales（Unit: million yen）

Segment profit

FY3/2020

FY3/2021(result)(revised forecast)

Progress rate *1

Year-on-year

FY3/2021*1(result)

ChangeChange(%)

Difference

Difference(%)

105,241

103,000

104,257(983)(0.9%)+1,257101.2%

99,617

97,90899,214(402)(0.4%)+1,305101.3%

Other 3 Segments

6,389

5,681

5,644

(744)

(11.7%)

(37)

99.3%

Adjustments

(764)

(590)

(601)

+163

－

(10)

Community Pharmacy
Network Segment

*2

*3

－

※

■Operating profit(Unit: million yen)
Profit margin in brackets

Segment profit

Community Pharmacy*2

Network Segment

Other 3 Segments *3
Adjustments※

FY3/2020

FY3/2021 *1

FY3/2021(result)(revised forecast)(result)

Year-on-year
ChangeProgress rate

Change(%)

1,615

3,400

+3,429+1,814

1.5%

3.3%

3.3%

+ 1.8 pt

3,743

5,489

5,703

+1,959

3.8%

5.6%

5.7%

+ 1.9 pt

(70)

36

(20)

+ 49

－

0.6%

－

－

(2,057)(2,042)(2,253)

(195)

－

－

－

－

+112.3%+52.4%－－

Difference*1

Difference(%)+29(0.0 pt)+213+ 0.1 pt

(57)
－

(126)
－

100.9%
103.9%－－*1 Revised full-year consolidated earnings forecast announced on February 5, 2021
*2 Pharmaceutical Network Business, Dispensing Pharmacy Business, Manufacture and Market Pharmaceuticals Business, Digital Shift Business*3 Leasing and Facility related Segment, Meal Catering Segment, Home Visit Nursing Segment
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

8

FY3/2021 : Comparison to previous term
■Net sales(Unit: million yen)

■Operating profit

FY3/2020 results

FY3/2020 results

Pharmaceutical
networkPharmaceutical
network

Dispensing
Pharmacy

Dispensing
Pharmacy

Manufacture andMarketPharmaceuticals

Manufacture andMarketPharmaceuticals

Leasing andFacility related

Leasing andFacility related

Meal Catering

Meal Catering

Home visit
NursingHome visit
Nursing

Other

Other

FY3/2021 results

FY3/2021 results

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved(Unit: million yen)9

FY3/2021 : Consolidated balance sheet
Point

Assets: Decrease in cash and cash deposits, and goodwill
Liabilities and Net Assets: Decrease in long-term loans■End of FY3/2020（Unit: million yen）

■End of FY3/2021（Unit: million yen）

Assets

66,464 Liabilities

57,045

Assets64,448 Liabilities

53,260Current assets

20,578 Current liabilities

23,296

Current assets

19,313 Current liabilities

25,418Cash and deposits

11,722 Short-term loans*1

8,550

Cash and deposits

10,118 Short-term loans*1

9,961

Fixed liabilities

33,74945,885 Long-term loans

27,601

25,126 Net assets

9,418

14,615 Capital stock

2,128

Goodwill

14,179 Capital surplus

1,183

Investments andother assets

6,143 Retained earnings

6,414

Fixed assets
Tangible fixed
assetsIntangible fixed
assetsTreasury stock
Total assets

66,464

Total liabilities andnet assets

27,84145,134 Long-term loans

21,556

24,634 Net assets

11,187

13,572 Capital stock

2,128

Goodwill

13,145 Capital surplus

1,182

Investments andother assets

6,926 Retained earnings

8,305

Fixed assets
Tangible fixed
assetsIntangible fixed
assets(206)

Treasury stock
Total assets

14.2%

Equity ratio

17.2%)（Equity ratio with taking into account net cash

*2

*1 Includes long-term loans that will be repaid within the year
*2 Own capital/(Total assets – Cash and deposits)

64,448

Total liabilities andnet assets

66,464Equity ratio（Equity ratio with taking into account net cash

Fixed liabilities

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved(344)
64,44817.3%*220.5%)

10

FY3/2021 : Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

5,205

million yen(1,485)
million yen(5,312)
million yen

EBITDA*
Income taxes paid

6,426 million yen(987) million yen

Acquisition and sales of buildings, etc.
M&A(acquisition of shares, transfer ofbusiness and acquisition of business)(1,317) million yen

Loan amount reduced
Repayments of lease obligations(4,634) million yen(368) million yen* Calculated by “operating profit + depreciation + amortization of goodwill”

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved(169) million yen

11Business Summary

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

12Pharmaceuticals Network Business: Earnings summary(as of March 31, 2021)

Although the pace of net increase temporarily slowed down due to the withdrawal of large affiliates, the number of new
affiliates was generally steady.
Affiliates increased by 871 from the end of the previous fiscal year to 6,116 → Now sitting at 10+% of market share■Network aﬃliates (actual)（Unit: No. of network affiliates）

7,500

6,116

6,000

5,245

4,500

1,500
0

1,770

2,400

New

2,509

Withdrawal

1,600（Unit: No. of network affiliates）

Net increase+1,405
+848

800

3,790

3,000

■Network aﬃliates (New/Withdtawal/Net increase)+451+1,503+1,455
+871

+739

+370

0

+1,281+1,637

(81)

(109)

(124)

(182)

(632)

FY3/2017

FY3/2018

FY3/2019

FY3/2020

FY3/2021-800
FY3/2017 FY3/2018 FY3/2019 FY3/2020 FY3/2021■Ordering volume of pharmaceuticals（Unit: one hundred million yen）

5,000
4,000

3,367

3,000
2,000

3,917

2,337
1,374

1,691

1,000
0

FY3/2017 FY3/2018 FY3/2019 FY3/2020 FY3/2021■FY3/2021 Breakdown of network aﬃliates(New/Withdawal)
1Q

2Q

3Q

4Q

Sum

New

440

353

244

466

1,503

Withdrawal

(68)

(334)

(135)

(95)

(632)

・Withdrawals, which were high in the first half,subsequently slowing down in the second half・Withdrawals also contributed to by larger
number of industry-wide pharmacies closures（Impact of COVID-19)

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

13

Pharmaceuticals Network Business:
Network affiliates distribution map (as of March 31, 2021)

6,244 network affiliates
as of April 30, 2021
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

14

Pharmaceuticals Network Business: Streamline Distribution and Pharmacy
Management Support
医薬品NW■ Continued study sessions with pharmaceutical wholesalers leading to further penetration of streamlined distribution
systems
Contents of the
Sharing our philosophy: Creating a high-quality medical infrastructure
study session
・Initiatives aimed at optimizing the entire supply chain
・ Our Philosophy
・Create a business that is transparent, stable, rational, and sustainable.
・ Overview of our services
・ Implementation of streamline
distribution
・ Cost reduction for pharmaceuticalwholesalers

Benefits to pharmaceutical wholesalers from streamline distribution
・Reduce costs incurred by pharmaceutical wholesalers by improving
the EOS ordering rate by affiliates and reducing returns andurgent deliveries
・Improvement of cash flow by shortening payment period(from 3 months to 2 months)■ Expansion of pharmacy management support tools

Introduction of BI tools to visualize the business situation

・Visualizing the operational status of merchantswith BI tools・Distribution improvement progress rate,
advice to pharmacy managers on genericdrug purchasing
・Promote purchase price reduction throughprice search and switching simulation
functions for pharmaceuticals
・Supporting pharmacy management throughenhanced content
・Improved convenience of portal site throughintroduction of AI concierge

By supporting small and medium-sized pharmacies we aim tobuild infrastructure that will support community healthcare
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

15

Dispensing Pharmacy Business: Trends in number of pharmacies
13 new outlets (6 from acquisition) and 13 outlet closures/transfers since end of previous term
Hokkaido

121outlets
Outlets at

Outlets at

end ofend of

FY3/2020

FY3/2021

420

416

416

8

7

ー

(15)

(13)

(1)

Outlets at end of
previous term
Openings

Outlets as ofApril 30

Tohoku21outlets

Closings andtransferringbusinesses

23outlets

Chugoku/Shikoku

Kanto/Koshinetu

Kyushu

M&A

3

6

1

Total

416

416

416

92outlets

60outlets

Kinki

Tokai/Hokuriku

55outlets 44outlets

As of April 30■Dispensing pharmacy outlet number trends of the past 10 years*

FY3/2012 FY3/2013 FY3/2014 FY3/2015 FY3/2016 FY3/2017 FY3/2018 FY3/2019 FY3/2020 FY3/2021
Openings

6

21

14

10

9

8

8

5

8

7

(3)

(8)

(7)

(13)

(8)

(4)

(5)

(14)

(15)

(13)

M&A

6

33

45

27

7

20

19

30

3

6

Number of outlets

223

269

321

345

353

377

399

420

416

416

Closings and transferringof businesses*FY3/2012 was a six-month period owning to a change in the fiscal year end
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

16

Dispensing Pharmacy Business: Monthly dispensing fee（YoY)(unit:%)

10.0

5.3
2.5

1.6

(0.2)

0.0

(0.7)
(3.0)

1.5
(1.6)

(10.0)

(7.7)

1.0
(5.5)

(3.9)

5.2

(0.9)
(3.6)

(4.4)

(1.2)

(2.0)
(3.7)

(5.1)

(6.3)

(5.0)

(5.1)

(8.5)

Dispensing fee of all pharmacies (YoY)
Dispensing fee of existing pharmacies (YoY)(20.0)

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

FY3/2021（unit:%）
Dispensing fee ofall pharmacies(YoY)
Dispensing fee ofexisting pharmacies(YoY)

Full-year total

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

(0.2)

(7.7)

2.5

(3.0)

(5.5)

(0.7)

1.6

(4.4)

(0.9)

(3.7)

(5.1)

5.2

(1.8)

(1.6)

(8.5)

1.5

(3.9)

(6.3)

(1.2)

1.0

(5.1)

(2.0)

(3.6)

(5.0)

5.3

(2.4)

※ “Existing pharmacies” refer to pharmacies that continue to be in business on or after April 1, 2018 and April 1, 2019.
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

17Dispensing Pharmacy Business: Comparison of monthly prescription
volume and unit price（YoY）-

Point(Unit:%)

Increase in unit price due to higher volume of long-term prescriptions
Drop in number of prescriptions

All pharmacies

30.0

18.5
15.0

12.3

9.5

8.2

3.1

5.2

5.5

(5.7)

(3.8)

7.9

8.2

9.9

5.3

6.2

0.0
▲15.0

(15.8)(17.8)(6.4)

Unit price (YoY)

▲30.0
Apr

May

Existing pharmacies(10.3)

(8.4)

(0.9)
(11.4)(8.4)(12.4)

Number of prescriptions (YoY)

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

(9.9)

Feb

Mar

5.8

5.7

30.0
18.2
15.0

12.2

9.2

10.5
8.0

3.0

5.4

5.6

8.1

8.4

0.0
▲15.0

(16.8)(18.4)(7.0)

Unit price (YoY)(11.1)

(9.0)

(6.3)

(10.2)(4.3)(12.3)

Number of prescriptions (YoY)(9.6)(12.8)

Dec

Jan

(0.4)

▲30.0
Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

Feb

Mar

18

Dispensing Pharmacy Business: Dispensing fee breakdown- Decrease in number of prescriptions as a result of COVID-19- Rise in unit price due to increase in long-term prescriptions

Point■All pharmacies
No. of prescriptions (1000) a
Drug charge per
Unit price(yen)prescription
Technical fee perprescription
Total bDispensing fee (million yen)
c=axb

■Existing pharmacies
No. of prescriptions (1000) a
Drug charge per
Unit price(yen)prescription
Technical fee perprescription
Total bDispensing fee (million yen)
c=axb

FY3/2020

FY3/2021

3Q

3Q

6,885

6,212

Change(673)

Change(%)

【Prescription unit price trends 】（Unit: yen）

(9.8%)

7,515

8,262

+748

+9.9%

2,274

2,368

+94

+4.1%

9,788

10,630

+842

+8.6%

67,397

66,039FY3/2020

FY3/2021

3Q

3Q

6,697

5,988

(1,357)

Change(708)(2.0%)
Change

+9.9%

2,279

2,379

+100

+4.4%

9,817

10,660+843+8.6%(2.9%)

Drug charge

9,788Technical fee

10,6308,262

Drug charge+748yen

2,274

2,368

Technical fee+94yenFY3/2020 3Q

FY3/2021 3Q

7,515

3,000
0

【Prescription unit price trends 】

9,000

+743

(1,904)6,000(%)(10.6%)

8,281

63,8409,000（Unit: yen）

7,538

65,74512,00012,0006,000

Drug charge

9,817

7,538

Technical fee

10,660

8,281

3,000
0

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

2,279

2,379

FY3/2020 3Q

FY3/2021 3Q

Drug charge+743yenTechnical fee+100yen19

Dispensing Pharmacy Business: Dispensing fee revision
Acquisition of dispensing fee progressing mostly as planned

Basic dispensing fee

FY3/2021 result

FY3/2022 plan（End of March 2021）(End of March 2021)（End of March 2022）

TargetResults

Target

0.7%

42
26
16
9

16points

42points

47.6%

50.2%

26points

26points
4outlets
1.0%

1.5%

Weighted average per prescription
30.2 points

Generic drug dispensing
premium ratio (points)

85% or higher
80% or higher
75% or higher

22points

1.4%
16points
42points
188outlets 216outlets
45.7%
52.6%

28points
52.4%

25.7%

Weighted average per prescription
21.2 points

16points
42.2%
26points

42points
55.5%

0.9%

Weighted average per prescription
30.7 points
0points

0points

15points 13.1%
8.8%

28
22
15

9points

9points
3outlets
0.7%

9points

ratio(points)
Basic fee 1
Basic fee 2
Basic fee 3-b
Special basic fee

FY3/2021 plan

15points 48outlets
39outlets 11.7%
9.5%

Weighted average per prescription
31.2 points
15points
10.2%

11.6%
28points

28points
22points 220outlets
104outlets
53.5%
25.3%

Weighted average per prescription
21.4 points

0points

22points

53.1%

25.1%

Weighted average per prescription
21.4 points

Community support system
premium ratio (points)
0points

Community support
system premium

58.3%

38points
41.7%

38Weighted average per prescription
18.3 points

0points
223outlets
54.3%

38points
188outlets
45.7%

Weighted average per prescription
19.1 points

0points

38points

53.3%

46.7%

Weighted average per prescription
19.6 points* Excluding pharmacies that are suspended and not consolidated

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved20Manufacture and Market Pharmaceuticals Business:
New generic drugs of 17 products (11 components) for sale・Full-year sales exceeded 1 billion yen.
・Expanded lineup of in-house products and products sold in partnership

Point

・Strengthened cooperation with contract manufacturers to ensure stable supply coupledwith continued robust quality control■ Net sales and number of items sold(million yen)
（百万円）

1,500

1.5 billion
yen

Net sales
売上⾼（左軸）■Upcoming releases of 8 products (4 components)(products)（品⽬数）100products

products
品⽬数（右軸）68products(34components)

1,000

150

500

0

Mar/2019
2019/3

100

50

Mar2022
Mar/2020
2020/3 Mar/2021
2021/3 2022/3（予想）(Forecast)

Products scheduled for inclusion in the NHI drug price standard in June
・Duloxetine Capsules20mg／30mg「feldsenf」
・eszopiclone Tablets1mg／2mg／3mg「NPI」

51products(23components)
34products(17components)（As of March 31, 2021）

・Epinastine Hydrochloride Ophthalmic Solution0.05%「NITTEN」
・ZilMlo LD／HD「TCK」

The lineup will be expanded to a total of 76 products (38components)0■As of March 31, 2021

Available components ＆ products
68 products (34 components)
Number of available locations 1,116 affiliates■End of FY 3/2022 target:
Net sales︓1.5 billion yen

Products

︓100products

Number of available locations︓1,700 affiliates

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

21

Digital Shift Business ー Achieved over 30,000 user registrations
LINE Official Account "Your personal pharmacy "・ The number of registered LINE friends exceeded 30,000, and the number of pharmacies
adapting the service increased steadily.

Point

・Have seen notable growth in the number of prescriptions sent to pharmacies where thesystem was installed.
・ Users' personal information is managed in a security system that has acquired ISMS
international certification

Number of prescriptions sent

Number of friends registered
Number of pharmacies installed

Over 30K friends
35,000registered on May 6

Number of registered

30,000150

25,000x 5.3

20,000

50

0

10

10

10

36

x 4.0

15,00010,000 x 1.6
5,000
0

x 2.0

x 1.4
2020/11168

2020/9

10K registered friends on Apr.2

2020/7

100 Service started on Mar.15

x 6.4

Other
その他店舗

Aim to introduce the service to 3,300 pharmacies atthe end of March 2022 and 15,000 pharmacies at theend of 2023

2021/3

友だち登録数(⼈)
friends

x 8.5

Results at pharmacies
導⼊店舗
installed2021/1200

Number of pharmacies
installed
導⼊店舗数(店)Strong personal information
management system

 No personal information on the chat screen.
 Provide services through external web apps.
 Data management on highly securedomestic servers.

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

22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■ Trends in Wisteria Occupancy Rate
100%

80%

Sluggish occupancy growth due to restrictions on sales activities caused by
COVID-19(Wisteria Kiyota)● 94.7%（ウィステリア清⽥）(Wisteria Otaru Inaho)● 91.4%（ウィステリア⼩樽稲穂）(Wisteria N17)
● 87.5%（ウィステリアN17）(Wisteria Senri Chuo)● 78.1%（ウィステリア千⾥中央）(Wisteria M1)● 67.2%（ウィステリア南1条）

60%

End of FY 3/2022 target:

Over 90% in all facilities
40%
2019/92019/122020/32020/6■ Wisteria Initiatives under the COVID-19

2020/92020/122021/3

Infection control measures
・ Installation of acrylic panels, thermometers,
and hand sanitizers
・Conducting previews with transportation
limited to one group per day

Proactive use of the web-based solutions
・ Set up a Facebook page・ Operation of search engine-linked advertising・ Conducting online previews

Installation of temperaturedetectors and acrylic panels

Set up a Facebook page

To increase the number of residents by providing asafe living environment for residents and their families

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

23Core strategies, Earnings Forecast for
FY3/2022 and Dividends

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

24FY3/2022: Core strategies■Establish a pharmacy management model for COVID-19 and maintaining earnings
through synergies from inter-business collaboration
Core strategies and numerical targets for thecurrent fiscal year

Summary: first 3 years
Pharmaceuticals
NetworkBusiness

Community
Pharmacy
Network
Segment

Dispensing
Pharmacy
Business

Manufactureand Market
Pharmaceuticals
Business

5,000 affiliates expansion achieved 2 years earlier
than anticipated

7,300affiliates at the end of March 2022 ( +1,184 YoY)

Building a system to reach 10,000 affiliates longer term•Single unit price negotiation for all ethical drugs

Further promotion of streamlined distribution•

Improving the efficiency of pharmacy operations(tablet medication history, automatic orderingsystem)Strengthening interpersonal work and introducing a new
education system•

Promote enhancement of pharmacy functions(health support functions)

Acquisition of prescriptions using on-line (LINE,
prescription transmission) tools•

Commencement of improved personnel allocation

Develop outlets mainly in medical malls•

Expansion of product lineup by also utilizing
products developed by other companies

Expand sales to pharmaceutical network affiliates••

Became profitable in fiscal year ending March 31,
2021•

Service started in March 2021•

Improved occupancy rates for Wisteria Senri Chuo
and M1

Meal Catering Segment, Home
Visit Nursing Segment•

Base relocation and cost revisions

Finance••

Digital ShiftBusiness
Leasing and facility related
Segment

ESG/Health management→ Target 1,700 at the end of March 2022

Expansion of pharmacies with official LINE accounts→ Target 3,300 at the end of March 2022



Achieve 90% occupancy in all facilities; steady operation

Safety-first operation

Steady balance of payments

Careful selection of investments

Securing profits through cost control

Recognized as 2020 Certified Health & Productivity
Management Outstanding Organization in the “largeorganization” categoryProjects according to SDGs; promote CSR activities

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

25Image of group inter-business collaboration
Leasing and Facility related

Manufacture andMarketPharmaceuticals

Meal Catering
Medical and nursing
care coordination

Home Visit Nursing

Dispensing
Pharmacy Products & Services

Digital Shift
Development andsales for dispensing
systemData sharing ・Sales expansion support

Pharmaceuticals
Network
MEDICAL SYSTEM NETWORK Co.,Ltd. All Rights Reserved

26

Earnings forecast for FY3/2022: Consolidated forecasts- Sales and profits are expected to increase slightly this fiscal year. Although the number ofaffiliates in the pharmaceutical network and the number of prescriptions are expected to increase,
these will be offset somewhat by the impact of the NHI price revision and increase in expenses- Net income expected to decrease due to the absence of one-time extraordinary gains recorded in
the previous fiscal year.

Point

FY3/21

FY3/22

ChangeChange (%)(results)(forecast)104,257

105,700+ 1,442+ 1.4 %

6,426

6,500
6.1 %

+ 73

(0.1 pt)+ 1.2 %

Operating profit

3,429

3,500

+ 70

+ 2.0 %

Ordinary profit

3,479

4,000
3.8 %

+ 520

+ 0.5 pt

+ 15.0 %Profit attributable toowners of parent
Profit margin

2,198

1,800
1.7 %

(398)

(0.4 pt)(18.1 %)

Earnings per share

72.51

59.69

(12.82)－(Unit: million yen)

Net sales
EBITDA*１

Profit margin

Profit margin

(Yen)

6.2 %
3.3 %
3.3 %

*２

2.1 %

3.3 %

－

*1 EBITDA is the calculated value of “operating profit + depreciation + amortization of goodwill”*2 Of this amount, ¥630 million was due to the recording of extraordinary income from partial share sales of a group affiliate .

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved27

Earnings forecast for FY3/2022: Forecast in each segment■Net sales(Unit: million yen)

FY3/21

FY3/22(results)

Change(forecast)

Change (%)

104,257

105,700+ 1,442+ 1.4 %

Community Pharmacy
Network Segment*1

99,214

100,146+ 932+ 0.9 %

Other 3 Segments*2

5,644

6,166

+ 521

+ ９.2%

Adjustments

(601)

(612)

(11)

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

FY3/21

FY3/22

Change(forecast)(results)－
Change (%)

3,429

3.3 %

3,500

3.3 %

+ 70

－

+ 2.0 %

Community Pharmacy
Network Segment※1

5,703

5.7 %

5,733

5.7 %

+ 29

－

+ 0.5 %

Other 3 Segments※2

(20)

－

167

2.7 %

+ 188

－

－

(2,253)－(2,400)

－

(147)

－

－

Segment profit

Adjustments*1 Pharmaceutical Network Business, Dispensing Pharmacy Business, Manufacture and Market Pharmaceuticals Business , Digital Shift Business*2 Leasing and Facility related Segment, Meal Catering Segment, Home Visit Nursing Segment
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved28

FY3/2022: Earnings forecast (comparison to previous term)■ Sales(Unit: million yen)

■ Operating profit(Unit: million yen)

100,000 101,000 102,000 103,000 104,000 105,000 106,000 107,000

2021/3期実績
FY3/2021
results

104,257

Pharmaceuticals
医薬品ネットワーク
network

104,257

Dispensing Pharmacy
調剤薬局
Manufacture andMarket医薬品製造販売
Pharmaceuticals

FY3/2021
results
2021/3期
実績

Pharmaceuticals
医薬品ネットワーク
network+ 378

104,635+ 336

105,544+ 486

Leasing and賃貸設備
Facility
relatedMeal Catering
給⾷105,979▲ 51

Meal Catering
給⾷Consolidated
adjustments
andその他
others105,979+ 86

105,700▲ 365

FY3/2022(forecast)
2022/3期
予想

105,700[Reference](compared toprevious year)

FY3/2022
forecast

Number of prescriptions
at existing pharmacies

▲9.4%

＋4.3%

Prescription unit price atexisting pharmacies

＋7.7%

▲4.8%

+ 19
+ 91
+ 64

Home visit
訪問看護
Nursing
Consolidated
adjustments andその他
othersFY3/2022(forecast)
2022/3期
予想

FY3/2021
results▲ 387 ※

Manufacture andMarket医薬品製造販売
Pharmaceuticals

Leasing and Facility
賃貸設備
relatedHome visit
Nursing
訪問看護

+ 412

Dispensing Pharmacy
調剤薬局

+ 573

105,208

3,429

+ 31
▲ 159
3,500

※ Of this amount, ▲325 million yen is due to impact of
the NHI price revision at existing pharmacies.

※ “Existing pharmacies” refer to pharmacies that continue to be in business on or after April 1, 2020.

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved29

FY3/2022︓ Prospective dividends
The forecast dividend for FY3/2022 is 10.00 yen per share(interim and year-end dividend of 5.00 yen each per share)【 Shareholder Return Indicators 】■FY3/2021（prospects）■FY3/2022（forecast）

10yen
13.8%

10yen
16.8%

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

10
8

Year‐end

interimYear-end

5

5

5

5

5

6

10yen

4
2

5

5

5

5

5

FY03/21

FY03/22(prospects)(forecast)Interim0
FY03/18

FY03/19

FY03/20

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved30Reference Materials

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

31

ESG Initiatives

As a company that supports the health of local residents, we contribute to
the development of a sustainable society through ESG initiatives

E=Environment（ Environmental Initiatives ）S＝Society（ Contribution to society andlocal communities ）G＝Governance（ Efforts to improvegovernance ）・Ensuring compliance・Establishing a risk management
system・ Financial structure improvement【 Approaches to environmental
risk management 】
・Reduction of pharmaceutical waste
・Reduction of environmental impact
・ Proper disposal of industrial waste,
etc

Contributing to society through sports

Support for the promotion and educationof organ transplantation medicine

Enhancement of corporate
governanceIntroduction of LED lighting【 Environmental conservation efforts 】
・ Energy conservation measures forbuildings, etc.

Employment of people withdisabilities to support initiatives in
Chinese Medicine development

Accountability to Stakeholders

Our Web site for CSR（https://www.msnw.co.jp/csr/)
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

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

MSNW

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

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved