MEDICAL SYSTEM NETWORK Co., Ltd.
Fiscal Year Ending March 2020

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 Reserved

2

Table of Contents

Earnings Highlight・・・

4

Topics・・・

13

Earnings Forecast for FY3/2020 andCore Strategies

・・・

22

Reference Materials

・・・

26

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved3

Earnings Highlight

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

4FY3/2020 : Consolidated results part 1
Earnings
Summary• Steady growth of network affiliates; increase in M&A contributions and prescription unit price• Depressed earnings on the back of a fall in the number of prescriptions due to fewer medical
examinations since January 2020 as a result of COVID-19 and low trends in influenza flu
transmissions compared to previous years.
Year-on-year

Progress rate

FY3/2019

FY3/2020

FY3/2020(result)(plan)(result)

Net sales

98,232103,000

105,241+ 7,009+ 7.1%+ 2,241102.2%

Operating profit

1,428

2,500

1,615

1.5%

2.4%

1.5%

+ 186

+ 13.0%

▲ 884

64.6%

1,501

2,400

1,560

Profit margin

1.5%

2.3%

1.5%

+ 59

+ 3.9%

▲ 839

65.0%

Profit attributable toowners of parent

462

650

▲ 895

Profit margin

0.5%（Unit: million yen）

Profit margin

Ordinary profit

Earnings per share(Yen)

EBITDA※※

Change

21.39

4,200

－

Difference

Differrence (%)▲ 1,358－▲ 1,545－▲ 29.48▲ 44.73－▲ 50.87

－

4,645

+ 444

+ 10.6%

－

－

－

15.25

Change (%)※ EBITDA is the calculated value of “operating proﬁt + depreciation + amortization of goodwill”
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

5FY3/2020: Consolidated results part ２■ Net loss attributable to owners of parent(Unit: million yen)

・EBITDA※ at 4,645 million yen; ordinary profit at
1,560 million yen (plus 59 million yen compared toprevious term)

※

4,645

EBITDA▲1,811

Depreciation

・Due to the fall of profitability in the current
Amortization ofbusiness environment as a result of COVID-19 we
goodwill
saw an impairment loss of 1,508 million yen fromgoodwill of M&A subsidiary shares and fixed assets
Interest income, etc.
of dispensing pharmacies
・Large tax burden from ordinary profit
due to past non-deductible depreciation expensesof goodwill from M&A pharmacies and the above
impairment losses
・As a result, profit attributable to owners of parent
at a 895 million yen loss
※ EBITDA is the calculated value of“operating profit + depreciation + amortization of goodwill”▲1,217▲57
1,560

Ordinary profit+48

Extraordinary profit▲1,508

Impairment loss

・M&A pharmacies▲1,267

・New opening pharmacies
Other
▲77

▲70
・M&A pharmacies
・Meal catering business▲112
・New opening pharmacies

Corporate tax, etc.

▲918

Profit attributable toowners of parent

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

・Meal catering business

▲902
▲435
▲112

▲895
6

FY3/2020: Results in each segment part 1■Net Sales（Unit: million yen）

Segment profit

FY3/2019

FY3/2020

FY3/2020

Year-to-Year comparison(result)(plan)(result)

ChangeChange(%)

Progress rate
Difference

Difference(%)

98,232103,000

105,241+ 7,009+ 7.1%+ 2,241102.2%

92,284

97,461

99,617+ 7,332+ 7.9%+ 2,155

102.2%

Other 3 Segments※2

6,622

6,113

6,389

▲ 233

▲ 3.5%+ 275

104.5%

Adjustments

▲ 674

▲ 574

▲ 764

▲ 90

－

▲ 190

－

Community Pharmacy
Network Segment※1※■Operating profit（Unit: million yen）
Profit margin in brackets

Segment profit
Community Pharmacy※1

Network Segment
Other 3 Segments
Adjustments※2※

FY3/2019

FY3/2020

FY3/2020

Year-to-Year comparison(result)(plan)(result)

ChangeChange(%)

1,428

2,500

1,615

+ 186

(1.5%)(2.4%)(1.5%)+ 0.0pt

3,313

4,783

3,743

+ 430

(3.6%)(4.9%)(3.8%)+ 0.2pt

▲ 150

▲ 240

▲ 70

+ 80

(－)

(－)

(－)

－

▲ 1,733▲ 2,042▲ 2,057

▲ 324

(－)

(－)

(－)

－

+ 13.0%+ 13.0%－－Progress rate
Difference

Difference(%)▲ 884▲ 0.9pt▲ 1,039▲ 1.1pt

+ 170
－

▲ 15
－

64.6%
78.3%
－
－

※1 Pharmaceutical Network Business, Dispensing Pharmacy Business, Manufacture and Market Pharmaceuticals Business※2 Leasing and Facility related Business, Meal Catering Business, Home Visit Nursing Business

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

7

FY3/2020: Results in each segment part 2
Segment

Earnings summary

Pharmaceuticals
Network Business・Steady trends in number of network affiliates (+1,455 from previous term
for a total of 5,245)
・Contributions to earnings from M&A pharmacies in previous termCommunity
Pharmacy
Network
Segment

Dispensing Pharmacy
Business※

Manufacture andMarketPharmaceuticals
Business
Leasing and Facility related Segment

・Increase of 433 yen in prescription unit price due to bundled longer-termprescriptions and high cost drugs
・Number of processed prescriptions fell considerably due to fewer medical
examinations as a result of COVID-19 and low trends in influenza flu
transmissions compared to previous years
Difference in number of prescriptions: 0.3% in 3Q to -1.1% in full year
(cumulative)
・23 components and 51 products for sale as of the end of March 2020
・Number of network stores handling these products up to 369 (vs 153 inprevious term)・Steady trends in rental income and occupancy rates at serviced residences
for the elderly
Occupancy rate: Senri Chuo 81.7%; M1 61.2%
・Continues to remove unprofitable establishments

Meal Catering Segment※

Home Visit Nursing Segment

・Increase in labor cost due to use of dispatch agencies to compensate
shortage of workers
Operating profit: 34 million yen (previous) to -43 million yen (current)
・Cut in operating loss
Operating loss: -101 million yen (previous) to -71 million yen (current)
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

8

FY3/2020 : Comparison to previous term
■ Net sales
FY3/2019 results
Pharmaceuticals
network
Drug charge atexisting pharmacies
Technical fee atexisting pharmacies(Unit: million yen)

■ Operating profit
FY3/2019 results
Pharmaceuticals
network
Drug charge atexisting pharmacies
Technical fee atexisting pharmacies
No. of prescriptions atexisting pharmacies

No. of prescriptions atexisting pharmacies

Labor costs at existing
pharmacies

M&A pharmacies

System investments atexisting pharmacies

Other
FY3/2020 results(Unit: million yen )Influence of drug pricerevision
Other
FY3/2020 results

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

9FY3/2020 : Comparison to plan
■ Net sales(Unit: million yen)

■ Operating profit

FY3/20 plan

FY3/20 plan

Pharmaceuticals
networkPharmaceuticals
network(Unit: million yen )Drug charge atexisting pharmacies

Drug charge atexisting pharmacies

Technical fee atexisting pharmacies

Technical fee atexisting pharmacies

No. of prescriptions atexisting pharmacies

No. of prescriptions atexisting pharmacies

Labor costs at existing
pharmacies

Leasing and facility

New opening and M&A
pharmacies

Other

Other

FY3/2020 results

FY3/2020 results【 Reference 】
No. of prescriptions
at existing pharmacies
Unit price of prescriptions
at existing pharmacies

First-half plan
(YoY)First-half results Second-half plan Second-half plan
(YoY)
(YoY)
(YoY)

+2.2%

+1.1%

+3.7%

▲3.3%

+1.1%

+5.7%

+1.1%

+5.6%

※ “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

10FY3/2020 : Consolidated balance sheet
Point

Assets: decrease in goodwill
Liabilities and net assets: decrease in loans■End of FY3/2019（Unit: million yen）

■End of FY3/2020（Unit: million yen）

Assets

68,935 Liabilities

58,173

Assets

66,464 Liabilities

57,045Current assets

21,055 Current liabilities

23,844Current assets

20,578 Current liabilities

23,296

Cash and deposits

11,703 Short-term loans※1

8,692

Cash and deposits

11,722 Short-term loans※1

8,550

Fixed liabilities

34,32947,879 Long-term loans

28,341

25,721 Net assets

10,761

16,235 Capital stock

2,128

Goodwill

15,710 Capital surplus

1,185

Investments andother assets

5,922 Retained earnings

7,616

Fixed assets
Tangible fixed
assetsIntangible fixed
assetsFixed 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▲ 233

Total liabilities
and net assets

68,935

Total assets

Equity ratio

15.6%

Equity ratio

14.2%（Equity ratio with taking into account net cash※2

18.3%)（Equity ratio with taking into account net cash※2

17.2%)

Total assets

68,935※1 Includes long-term loans that will be repaid within the year
※2 Own capital/(Total assets – Cash and deposits)

66,464

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

Treasury stock▲ 206

Total liabilities
and net assets

66,46411

FY3/2020 : Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

4,232

million yen

EBITDA※1
Increase in net defined benefit liability
Income taxes paid

※1 Calculated by “operating proﬁt + depreciation + amortization of goodwill”▲ 2,383

Acquisition of buildings, etc
M&A(acquisition of shares, transfer of▲ 1,687

Loan amount reduced
Repayments of lease obligations

million yen

million yen

4,645 million yen
378 million yen▲ 1,098 million yen

business and acquisition of business)

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved▲ 1,333 million yen▲ 714 million yen▲ 882 million yen▲ 479 million yen

12Topics

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

13

Pharmaceuticals Network Business: Earnings summary(as of March 31, 2020)

Continuous high growth in new network affiliates; increase of 1,455 from previous term
for a total of 5,245■Network aﬃliates (actual) （Unit: No. of network aﬃliates） ■Network aﬃliates (net increase)（Unit: No. of network aﬃliates）
6,000

Over FY3/2020
target of 5,000

4,500+1,281

1,000

2,509
1,400

+1,455

1,500

3,790

3,000
1,500

5,245

2,000

1,770

+739

500
+200

0

0

FY3/2016 FY3/2017 FY3/2018 FY3/2019 FY3/2020+370

FY3/2016 FY3/2017 FY3/2018 FY3/2019 FY3/2020■Ordering volume of pharmaceuticals （Unit: one hundred million yen）
4,000

3,367

3,000
2,337
2,000
1,237

1,374

1,691

1,000
0

FY3/2016 FY3/2017 FY3/2018 FY3/2019 FY3/2020

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

14

Pharmaceuticals Network Business:
Network affiliates distribution map (as of March 31, 2020)
Operating in 46 prefectures as of March 31, 2020 (now operating in all 47 prefectures since May 1, 2020)

5,557 network affiliates
as of May 1, 2020

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

15

Dispensing Pharmacy Business: Trends in number of pharmacies
8 new outlets, 3 outlets acquired through M&A, and 15 outlet closuressince end of previous fiscal year
Hokkaido area
123
outlets

Outlets at

Outlets at

end ofend of

FY3/2019

FY3/2020

399

420

416

Chugoku/Shikoku
area

5

8

1

21 outlets

Outlets at end of
previous term
Openings

Outlets as of
May 1

Closings andtransferring

▲ 14

▲ 15

▲2

businesses
30

3

－

Total

420

416

415

22 outlets

Kyushu area
Kanto/Koshinetsu area

59 outlets

M&A

Tohoku area

Kinki area

Tokai/Hokuriku
area

88 outlets

56 outlets 46 outlets

As of May 1■Dispensing pharmacy outlet number trends of the past 10 years※

FY9/2011 FY3/2012 FY3/2013 FY3/2014 FY3/2015 FY3/2016 FY3/2017 FY3/2018 FY3/2019 FY3/2020
Openings

10

6

21

14

10

9

8

8

5

8

▲4

▲3

▲8

▲7

▲ 13

▲8

▲4

▲5

▲ 14

▲ 15

M&A

4

6

33

45

27

7

20

19

30

3

Number of outlets

214

223

269

321

345

353

377

399

420

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:%)
20.0

Dispensing fee of all pharmacies (YoY)

16.0

Dispensing fee of existing pharmacies (YoY)

15.8

15.0

13.6

12.2

9.4

10.0
5.9

5.9

11.1

6.4

9.4

5.0

10.1
7.7

7.4
5.7

2.0

0.0

3.4

2.6

5.1
2.2

1.9

2.8
▲ 0.3

0.7

Jan

Feb

1.5

▲ 5.0
Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Mar

FY3/2020（Unit: %）Full-year total

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

16.0

5.9

5.9

13.6

9.4

15.8

6.4

7.4

10.1

2.6

7.7

3.4

8.6

12.2

2.0

1.9

9.4

5.1

11.1

2.2

2.8

5.7

▲0.3

0.7

1.5

4.4

Dispensing fee ofall pharmacies(YoY)
Dispensing fee ofexisting pharmacies(YoY)※ “Existing pharmacies” on this page refer to pharmacies that continue to be in business on or after April 1, 2018.
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

17Dispensing Pharmacy Business: Comparison of monthly prescription
volume and unit price
Point(Unit: %)
15.0
10.0
5.0

Prescription unit price increase due to bundled longer-term prescriptions andhigh cost drugs; decrease in prescription volume due to COVID-19 since
January and fewer influenza flu transmissions compared to previous years

All pharmacies
10.7

9.1
5.4

4.8

0.0

0.4

2.4

5.0

4.6

3.4
4.1

12.8

11.2

4.6

4.1
1.3

4.8
2.5

6.8

7.6

1.3

3.1

▲ 5.0

6.3

▲ 4.6

▲ 10.0▲ 15.04⽉

5⽉

6⽉

Existing pharmacies

7⽉

▲ 8.3

Unit price
全店処⽅箋単価
前年同期⽐

Numberof prescriptions
全店処⽅箋枚数
前年同期⽐

8⽉

9⽉

10⽉

11⽉

12⽉

1⽉

2⽉

15.0
10.0
5.0
0.0

3⽉
12.9

6.1

6.8

4.4

5.7

▲ 5.0

5.7

April
4⽉

May
5⽉

▲ 2.4

June
6⽉

6.3

3.5

▲ 0.7

▲ 0.6

4.4

July
7⽉

7.5

1.2

▲ 3.8

6.5

▲ 0.2
▲ 6.0
▲ 9.9

Unit price
既存店処⽅箋単価
前年同期⽐

Number of prescriptions
既存店処⽅箋枚数
前年同期⽐▲ 15.0

5.4
5.4

3.8
▲ 4.5

▲ 10.05.4

August8⽉

September
9⽉
10⽉ November
11⽉
12⽉
1⽉
OctoberJanuary
December

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

2⽉
February

March
3⽉

18

Dispensing Pharmacy Business: Dispensing fee breakdown- Increase in prescriptions through M&A pharmacies acquired last term
- Growing unit price due to long-term prescriptions and high cost drugs

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

FY3/2019

FY3/2020

Change

8,806

9,080

+ 274 (+ 3.1 %)

7,183

7,616

+ 433 (+ 6.0 %)

2,224

2,287

+ 63 (+ 2.8 %)

9,406

9,902

+ 496 (+ 5.3 %)82,834

89,919+ 7,084 (+ 8.6 %)FY3/2019

FY3/2020

Change

7,934

7,845

▲ 89 (▲ 1.1 %)

7,358

7,872

+ 514 (+ 7.0 %)

2,272

2,299

+ 28 (+ 1.2 %)9,630

10,171+ 542 (+ 5.6 %)76,40879,800+ 3,391 (+ 4.4 %)【Prescription unit price trends 】（Unit: yen ）12,000Drug charge

10,0009,406Technical fee

9,902

8,000
7,183

7,616

2,224

2,287

FY3/2019 4Q

FY3/2019 4Q

6,000

Drug charge+ 433 yen

4,000
2,000
0

Technical fee+ 63 yen【Prescription unit price trends 】（Unit: yen ）12,000Drug charge

10,0009,630

Technical fee

10,171

8,000
7,358

7,872

Drug charge+ 514 yen

2,272

2,299

FY3/2019 4Q

FY3/2019 4Q

Technical fee+ 28 yen

6,000
4,000
2,000
0

※ “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

19Dispensing Pharmacy Business:
Influence of the dispensing fee revision

FY3/2020 generally progressing as planned; will continue to promote interpersonal workand use of generic drugs
FY3/2019 results

FY3/2020 plan

FY3/2020 results(End of March 2019)(End of March 2019)（End of March 2020）

Results

TargetResults

11 points

Basic dispensing fee

0.4%

ratio(points)
Pre-revision
Basic fee 1
Basic fee 2
Basic fee 3-b
Special basic fee
Points in brackets are after
increase in tax

41(42)
25(26)
15(16)
10(11)

41 points
15 points
208 outlets 204 outlets
48.5%
49.4%
25 points
9 outlets
2.1%

Weighted average per prescription
29.1 points

Generic drug dispensing
premium ratio (points)
Pre-revision
85% or higher
80% or higher
75% or higher

11 points
1 outlets
0.2%

0 points
98 outlets 26 points
23.3% 120 outlets
28.5%

26
22
18

18 points
89 outlets 22 points
114 outlets
21.1%
27.1%

Weighted average per prescription
16.6 points

16 points

42 points
49.1%

49.1%
26 points
1.4%

Weighted average per prescription
30.0 points
0 points
20.2%

34.6%

18 points
15.6%

26 points

22 points
29.6%

Weighted average per prescription
18.1 points

42 points
16 points
203 outlets 205 outlets
49.5%
48.9%
26 points
6 outlets
1.4%

Weighted average per prescription
30.0 points
0 points
65 outlets
15.7%

26 points
18 points
175 outlets
57 outlets
42.2%
13.7%
22 points
118 outlets
28.4%

Weighted average per prescription
18.9 points

Community support system
premium ratio (points)
Pre-revision35

0 points
278 outlets
66.0%

35 points
143 outlets
54.5%

35 points
0 points

40.0%

60.0%

Weighted average per prescription
Weighted average per prescription
14.3 points
16.1 points※ Excludes suspended pharmacies ( FY03/2019 and FY03/2020 results includes pharmacies closed on March 31)

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

0 points
258 outlets
62.2%

35 points
157 outlets
37.8%

Weighted average per prescription
15.7 points

20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

100%●98.4%（Wisteria N17）
●98.7%（Wisteria Kiyota）●92.6%（Wisteria Otaru Inaho）●81.7%（Wisteria Senri Chuo）

80%●61.2%（Wisteria M1）

60%
40%
November 2018

20%

Open

0%
Mar/2017

Sep/2017

Mar/2018

Sep/2018

Mar/2019

Sep/2019

Mar/2020■ Various efforts to increase occupancy rate
・Social management gathering
Goal: to maintain occupancy
by increasing overallsatisfaction of occupants
Feedback and requests fromoccupants and their families
are shared with management

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

・Periodic tours of facilities
Held once a month
M1: from Aug 2019 - Jan 2020
Otaru Inaho: Feb 2020
(currently cancelled due to
COVID-19)21

Earnings Forecast for FY3/2021
and Core Strategies

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

22

FY3/2021: Core strategies
 Steadily promote business initiatives while handling COVID-19 related
challenges－ Will review quantitative goals of Fifth Mid-Term Management considering the wider COVID-19 impact
Summary: first 2 years
Pharmaceuticals
Network BusinessCommunity
Pharmacy
Network
Segment

Dispensing
Pharmacy
Business

Manufacture andMarketPharmaceuticals
Business•

5,000 affiliates expansion achieved 2 years
earlier than anticipated•Core strategies this term

Increase 1,200 affiliates

Strengthened roadmap framework for “8items for streamlining distribution”

Make use of inventory management system; promotestreamline distribution•

Start of business efficiency projects

Stronger community pharmacy functions•

Digital medication history; stronger IT for
automated orderingCentralize on generic drugsIncrease productivity•

Restructure of management in response to
notification 0402 from the Ministry of Health,
Labor and Welfare Secure prescriptions
 Improve profit•

Expanded lineup with bundle products

Expand sales to pharmaceutical network affiliates•

Improved occupancy rates for Wisteria Senri
Chuo and M1

Achieve 90% occupancy in all establishments; steady
operation

Meal Catering Segment, Home
Visit Nursing Segment•

Base relocation and cost revisions

Steady balance of payments

Finance•

Responses to large investments

Implement measures to increase equity ratio to goalof 30%•

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

Leasing and facility related
Segment

ESG/Health management

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

23

FY3/2021: Earnings forecast (comparison to previous term)■ Sales■ Operating profit
0100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1,800
1,900
2,000
2,100
2,200
2,300
2,400
2,500
2,600
2,700
2,800
2,900
3,000
3,100
3,200
3,300

100,000101,000102,000103,000104,000105,000106,000107,000108,000

2020/3期実績
FY3/2020
results(Unit: million yen)

105,241

Pharmaceuticals
医薬品ネットワーク+ 695

Network Business

薬局Drug既存店薬剤料
charge at
薬局 既存店薬剤料（薬価改定の影響）
existing
pharmacies
Technical
fee at
薬局
既存店技術料
existing pharmacies
No. of prescriptions at
薬局
既存店処⽅箋枚数
existing
pharmacies▲ 3,567+ 2,769

その他
Other

▲ 611

2021/3期
予想
FY3/2021(estimate)

+ 594

薬局
既存店薬価改定…
existing
pharmacies

▲ 672
+ 296

No. 既存店処⽅箋枚数
of prescriptions at
薬局
existing pharmacies+ 1,314

Effects of COVID-19
新型コロナ感染症(estimate)

Pharmaceuticals
医薬品ネットワーク
Network BusinessTechnical fee at
薬局 既存店技術料
existing
pharmacies+ 296(Unit: million yen)

1,615

Drug charge atNewopening and前期M＆Ａ・開発
M&A pharmacies

Subtotal
上記⼩計

FY3/2020
results
2020/3期
実績

costs at
薬局 Labor
既存店労務費existing
pharmacies▲ 413

New前期M＆Ａ・開発
opening and M&A
pharmacies
Centralize
on generic
後発医薬品の絞込
drugs

+ 272

103,500〜105,500

+ 687

その他
Other

106,137

▲ 521

上記⼩計
Subtotal▲600〜▲2,600

+ 893

2,751

Effects of COVID-19
新型コロナ感染症(estimate)▲600〜▲1,6002021/3期
予想
FY3/2021(estimate)

1,150 〜 2,150[Reference] Expecting definite effect on number ofprocessed prescriptions throughout
the year due to COVID-19(compared toprevious year)

FY3/2020 results

FY3/2021 estimate
Without COVID-19

With COVID-19

Number of prescriptions
at existing pharmacies

▲1.1%

＋3.3%

▲2.7％〜＋1.2%

Prescription unit price atexisting pharmacies

＋5.6%

▲3.7%

▲0.9％〜▲2.2%※ “Existing pharmacies” refer to pharmacies that continue to be in business on or after April 1, 2019.

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

24FY3/2021: Prospective dividends and treasury share acquisition■ Treasury share acquisition■ Prospective dividends

Annual dividend per share
Dividend payout ratio

FY3/2020(prospects)

FY3/2021(forecast)

10 yenー

10 yenーThe purpose of treasury share acquisition is to improveshareholder returns and capital efficiency, as well as
implement motivational capital policies in response to
the changing business environment.

Acquisition details[Annual dividend per share trend](Unit: yen)

10.00 ■ Interim
8.00■ Year-end

5.00

5.00

5.00

10.00

5.00

6.00
4.00
2.00

5.00

5.00

5.00

5.00

FY3/2018

FY3/2019

FY3/2020(prospects)

FY3/2021(forecast)

Share type

MSNW common shares

Share limit

250,000 shares (maximum)
0.81% of issued shares(excluding treasury shares)

Total share price

100,000,000 yen (maximum)

Acquisition period

April 1, 2020 – June 30, 2020

Current shares acquired
as of April 30

1,300 shares
519,800 yen[Reference] As of March 31, 2020
Total issued shares (excluding treasury shares)
Treasury shares

30,641,485 shares
1,115 shares

0.00

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved25

Reference Materials

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved26

2020 medical fee revision: Effects on results
Main initiativesAcquire generic dispensing premiums through promotion of generic drugs
Acquire community support premiums at pharmacies with basic dispensing fee 1
Acquire drug adjustment support fee 2 which is calculated by reducing overprescription throughdocumentation with the prescriber(Points per prescription)(Points per prescription)

FY3/2021 plan

FY3/2021 impacts[Drug price revision]――▲667 million yen

Inventory evaluation loss――

+21 million yen

Current: ▲141M yen (as of April 2020)
Previous: ▲163M yen (as of October 2019)

Decrease of drug pricedifference――▲688 million yen

Decrease in operating profit following drug
price drop
Existing pharmacies: ▲672M yen[Dispensing fee
revision]――+353 million yen

1. Basic dispensing fee

30.0 points

30.2 points+55 million yen

2. Generic dispensing
premiums

18.9 points

21.2 points+240 million yen

Change in points for premium 1 and 3

3. Community support
premiums

15.7 points

18.3 points+242 million yen

Rise in points (35 points to 38 points)

Total

―

―

Main revisions

FY3/2020 results

Reference(million yen)▲314 million yen

Existing pharmacies: ▲651M yen

Includes 1~3 below and other fees※
Existing pharmacies: +296M yen

5.00

Drop in special basic dispensing fee points(11 points to 9 points)

Existing pharmacies: ▲ 355M yen※ Numbers listed are after implementation of main initiatives

Preparing to centralize on generic drugs to improve 687M yen in correspondence to drop in profit
MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved27Corporate profile (As of March 31, 2020)
Company

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

Representative

Inao Tajiri
President & Representative Director

Established

September 16, 1999

LocationMain
consolidated
subsidiaries

Businesses

Community Pharmacy Network Segment
Leasing and Facility related Segment
Meal Catering Segment
Home Visit Nursing Segment24-3 Kitajujo-Nishi, Chuo-ku, Sapporo

Capital2.128 billion yen

Hokkaido Institute for Pharmacy Benefit Co., Ltd.

Shareholders
composition

Nanohana Hokkaido Co., Ltd.
Nanohana Tohoku Co., Ltd.
Nanohana East Japan Co., Ltd.
Nanohana Central Co., Ltd.
Nanohana West Japan Co., Ltd.

Stock listing

Companies, etc
15.5%

Excluding shares less than
one unit.
Treasury shares are included
in Individuals and Others.

TOTAL MEDICAL SERVICE CO., LTD.

Employees

Foreign

Institutions

and Others

Securiteis
Firms

FELDSENF PHARMA Co., Ltd.

1.2%

First Section of Tokyo Stock Exchange

Individuals
46.1%

18.7%

NAGATOMI PHARMACY CO., LTD.

262 (3,205 consolidated)

Financial

Other
Companies
18.5%

Total
Shareholders

7,709

Securities code

4350

Outstanding
shares30,642,600

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved28Organization chart (As of May 1, 2020)
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

100 ％TOTAL MEDICAL SERVICE
CO., LTD.

Dispensing Pharmacy Business:
Kyushu area

100 ％NAGATOMI PHARMACY

CO., LTD.

Dispensing Pharmacy Business:
Kyushu area

80 ％FELDSENF PHARMA
Co., Ltd.

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

Insurance Business /Construction Business

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

Home Visit Nursing Business

Agrimas Corp.※

Preventive Care Day Service BusinessPreventive Care Program Distribution
Business

100 ％

100 ％

100 ％

100 ％

100 ％

MEDICAL SYSTEM NETWORK
Co., Ltd
Community Pharmacy Network BusinessLeasing and Facility related Business

100 ％

100 ％

77.7 ％MSNW group outlets:
total 427 outlets(Includes care plan center (1), cosmetic/drug stores (8), and home-nurse stations (3))

MEDICAL SYSTEM NETWORK Co., Ltd. All Rights Reserved

100 ％SAKURA FOODS
CO., LTD.

Meal Catering
Business※ Not consolidated
29

MEDICAL SYSTEM NETWORK Co., Ltd.
https://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