Financial Results Overview
for Second Quarter
Ended March 31, 2018
May 22, 2018
EPS Holdings, Inc.

Copyright © 2018 EPS Holdings All rights reserved.

FY2018： EPS Group Business Areas*as of April 1, 2018

Domestic Business

CROEPS, EPS Associate, EPMate, e-Trial

SMO

EP-SOGO, EXAM

CSO

EP-PharmaLine

CPO

EP-CRSU, EPI Yamanashi, Sogo Rinsho Médéfi

Overseas Business

GlobalResearchEPS International Holdings etc.

China

EPS EKISHIN, EPS (China) etc.

その他

EPBiz

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2

Positioning of FY2018 in the Mid-TermBusiness Plan(¥ billion)FY2017
Results

FY2018FY2019 FY2021
First- SecondFull-Year Forecast Forecast
HalfHalfForecast
Results Forecast

Net Sales

60.4

32.7

33.3

66.0

75.0

100.0

Operating
Income

7.59

3.83

3.02

6.85

9.00

12.50

（％）

12.6%

11.7%

9.0％

10.4%

12.0%

12.5%

Number of
Employees

5,209

5,351

Overseas
Ratio

18.2％

24.0%

CAGR

14.8％

7.5%

Copyright © 2018 EPS Holdings All rights reserved.

8,000
21.8％

22.4%

25.3%

30.0%
13.7%

3FY2018/2Q
Financial Results Overview

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4Consolidated Results（￥million）

FY2018/2Q
Plan

FY2018/2Q
Results

Versus plan
ChangeNet Sales

31,26932,666

1,397

7.5%

Operating
Income2,762

3,828（Ratio）(8.8%)(11.7%)

1,066‐17.4％

Recurring
Profit2,837

3,891（Ratio）(9.1%)(11.9%)

1,054-18.5％

Profit Attributableto Owners ofParent

1,672

2,495（Ratio）(5.3%)(7.6%)

823-2.3％

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Change YoY

5Consolidated Results by Segment（Ratio）

FY2018/2Q PlanCRO

DomesticSMO
CSOCPO

OverseasGRNet Sales
OperatingIncomeNet Sales
Operating
IncomeNet Sales
Operating
IncomeNet Sales
Operating
IncomeNet Sales
Operating
IncomeNet Sales

China Operating

Others*

Total

IncomeNet Sales
Operating
IncomeNet Sales
Operating
Income13,828
2,799
7,470
806
3,900
136
1,396
122
1,801-242
4,497-352-1,623-507
31,2692,762(20.2%)(10.8%)(3.5%)(8.7%)---

8.8%

14,363
3,393
7,033
503
3,903
177
1,545
305
2,660
120
5,184
-144
-2,022-526
32,666
3,828（￥million）

Versus plan
Change YoY
Change535
3.3%

FY2018/2Q Results*Inter-segment transactions, holding company expenses, etc.
Copyright © 2018 EPS Holdings All rights reserved.

（Ratio）(23.6%)(7.2%)(4.5%)(19.7%)(4.5%)--(11.7%)

594

-3.3%

-437

-0.8%

-303

-50.3%

3-6.1%

41-31.9%

149

20.1%

183

10.1％

859

11.6%

362-

687

63.8%

208--399

-

-19-

1,397

7.5%

1,066

-17.4%

6

Summary of First-Half Results and Segment
Overview
1. Overview of Financial Results (Versus plan)
Net sales : Net sales exceeded the plan across all segments except SMO
due to internal growth (CRO, CPO, GR) and gross recognition ofrevenue of EKISHIN (Chine) Business
Operating income : Operating income exceeded the plan on a consolidated
companywide basis and across all segments except
SMO

2. Overview by Segment
CRO・ Clinical study services performed strongly due to measures
to strengthen management and promote integration ofinternal management systems
・ PMS services saw strong sales but profits were lower thanplanned due to an increase in start-up resources

SMO

On the earnings front, sales and profits both decreased due tolackluster orders received and losses at EXAM despite efforts
to strengthen the project management, proposal-based sales,and quality control systems

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7

Summary of Segment Overview

CSO

CMR (Contract Medical Representative) services forpharmaceuticals, the pharmaceutical call center, etc., performed
generally as planned; however, sales declined due to the impactof a slump in demand for MRs in the pharmaceutical industry

CPO

In clinical research services, sales and profits both increased due
to favorable progress in contract-based projects

GR・ Projects under execution performed steadily and new orders
also contributed to increased sales
・ Unification of Asia-Pacific management operations in Japan
contributed to profits

China・ Worked to strengthen the business base through continuous
development of existing markets and cultivation of new regional
markets in the products business・ Rebuilt CRO services in China, which had faced adverse
conditions

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8

FY2018
Consolidated Results

Copyright © 2018 EPS Holdings All rights reserved.

9Full-Year Forecast（￥million）

FY2018 InitialForecast

FY2018Current

Net Sales

66,00066,000Operating
Income6,850

6,850（Ratio）(10.4%)(10.4%)

Recurring
Profit7,0007,000（Ratio）(10.6%)(10.6%)

Profit Attributableto Owners ofParent

4,200

4,200（Ratio）(6.4%)(6.4%)

Copyright © 2018 EPS Holdings All rights reserved.

Change vsInitial
Change YoY
Forecast-9.1%--9.8％--10.4％--9.9％
10

Full-Year Targets by Segment（Ratio）

CRO

Domestic

SMO
CSO
CPO

OverseasGR

28,700Operating
Income5,775

Net Sales

15,250Operating
Income

1,580

Net Sales

8,400

Operating
Income550

Net Sales

2,600

Operating
Income180

Net Sales

4,100

Operating
Income-200

Net Sales

10,700

Income-15

Net Sales-3,750Operating
Income-1,020

Net Sales

66,000Operating
Income6,850

China Operating

Others*Total

Copyright © 2018 EPS Holdings All rights reserved.

（￥million）

Change vs
FY2018 Full-Year Target
Initial Forecast

FY2018 Initial Forecast
Net Sales（Ratio）

28,700(20.1%)

6,000(20.9%)

14,251(10.4%)

1,190(8.3%)

8,400(6.5%)

550(6.5%)

2,600(6.9%)

280(10.8%)

4,100
-

-140

-

10,700(4.0%)

35(0.3%)-2,751--1,063-66,000(10.4%)

6,850(10.4%)

Change YoY-2.4%

225

-5.2％

-999

1.7%-390-30.0%

-

1.2%

-

13.2%

-

8.9%

100-11.4％--14.9%

60

--

72.6%

50

-86.1%

999

--43

--

9.1%

--9.8%*Inter-segment transactions, holding
company expenses, etc.

11

Full-Year Targets Overview
1. Consolidated Full-Year Targets

Net sales and operating income are both below the initial forecast
for SMO, but consolidated full-year targets are in line with theinitial forecast

２. Full-Year Targets by Segment
CROSMO
CSO

Targeting higher operating income than initially forecast due tobrisk performance in the monitoring divisionNet sales and operating income have both been revised
downward from initial forecasts, but are expected to recover inthe second half
Poor performance in PMS services will be offset by strong
growth in other divisions to perform in line with initial forecasts

Adverse conditions expected for the second half due to the impact
CPO of revised regulations; however, operating income is expected toexceed the initial forecast
to improve with contribution from unification of Asia-Pacific
G R Losses
management operations in Japan
Operating income to exceed the initial forecast slightly due to briskChina performance in the products business
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12Dividend Per ShareTerm End Dividend

Mid-term Dividend

Payout Ratio¥5040%(1) Celebrate Dividend(2) Special Dividend¥4030%

30

¥30

¥20

¥1025
1818

18

101010(2)¥51525(2)
¥820

8820%

1310%

(1)
¥28（Plan）

101012¥00%

2013/92014/92015/92016/92017/92018/9*The dividend conditions shown in the above graph reflects retroactive revised data that takes into considering the effect of stock splits.
Copyright © 2018 EPS Holdings All rights reserved.

13

Business Introduction of
EPS Group and Initiative

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14

Drug & Medical Device Development ofEPS Group
Time to Placing on the Market : 9〜17 years

BasicResearch

NonclinicalStudy

Clinical Trial

2-3 years

3-5 years

3-7 years※placing on the market

Post-Marketing
Surveillance

Application
ForApproval

1-2 years

4-10 years※CRO Business
SMO Business

SMO Business
CSO Business▼Support for Pharmaceutical& Medical Device Companies
CRO Business

CSO Business

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▼Support for Medical InstitutionSMO Business

15CRO Business

CRO Leading Companywith strengths on Oncology & Brain/Neurology
Market & ShareEPS Group15%¥187.2
Billion* Source: Estimated by EPS Holdings, Inc. based onmaterials published by MIC Research Institute Ltd.
(2017), Yano Research Institute Ltd. (2018), and industry
associations

Copyright © 2018 EPS Holdings All rights reserved.

Expert Staff

CRA(Clinical Research Associate)

950

Advantage● “Full Service System” which
can be entrusted with all
duties from Clinical Trial toPMS.
● Many achievements ofOncology & Brain /Neurology.
● Active introduction of IT
solution of imaging, etc.

16CRO BusinessInitiatives as a Leading CRO Company
1. Continue to expand existing businesses
・Strengthen project management
・Enhance quality and specialization
2. Brush up the organization
・Strengthen management personnel
・Promote the delegation of authority
3. New initiatives to drive further growth・Medical Information Strategy Office: Establish new unit
Construction of a Platform for Intractable Diseases: Participate as a
joint research partner in research projects led by the Japan Agency
for Medical Research and Development (AMED)
・Promote the regenerative medicine business・Support and collaboration to build the China Clinical Data Center(collaboration with Hangzhou Tigermed Consulting Co., Ltd.)・Inter-segment reorganization collaboration and M&As withother companies
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17

SMO Business A Firm No.1 SMO Company

Market & ShareEPS Group

40%
¥35.2
Billion* Source: Estimated by EPS Holdings, Inc. based onmaterials published by MIC Research Institute Ltd.
(2017), Yano Research Institute Ltd. (2018), and industry
associations

Copyright © 2018 EPS Holdings All rights reserved.

Expert Staff

CRC(Clinical Research Coordinator)

1100

Advantage● Overwhelming No.1 marketcompany with more than
40% share.
● Partnering with the industry's
largest number of 6100
medical institutions.
● Over 1100 CRCs.
● Expand strengths into theoncology field, and also intodermatology, orthopedics,etc.
18

SMO Business Key Initiatives
1. Realize synergies from merger with EXAM (July)

・ Promote appropriate allocation
・ Strengthen sales activities tailored to regional characteristics
2. Improve quality
・ Strengthen risk management using tools incorporating risk prediction
functions based on machine learning
3. Generate profits by driving growth in the oncology field・ Strengthen relationships with affiliated institutions
・ Further develop CRCs with oncology experience
4. Maintain and expand the operating foundation
Initiatives for building a foundation that can support continued growthamid a changing environment (diversify organization structures andtypes of employment, etc.)

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19

CSO Business

CSO Leading Company with Originality
Market & ShareEPS Group11%¥72.6
Billion* Source: Estimated by EPS Holdings, Inc. based onmaterials published by MIC Research Institute Ltd.
(2017), Yano Research Institute Ltd. (2018), and industry
associations

Copyright © 2018 EPS Holdings All rights reserved.

Expert StaffCMR(Contract Medical Representative)

Pharmacists

200470Advantage● Scale of No.1 in the industry
Medical Contact Center of DI(Drug Information) service.
● 24 hours, 365 days, by
Pharmacists & Clinical Nurse.
● No.1 in the Industry of MedicalDevice CS (Contract Sales)
Human Resourse supply.
● Industry No. 1 for PMS and BPO
services (monitoring services)20

CSO Business

Key Initiatives

1. Revise and promote products (services)
・ Promote selection and concentration based on verification ofprofitability and growth potential
・ Realign the sales organization to strengthen our ability to expand
products (services)・ Enhance specialization of BPO products (services), including DI services
・ Promote a multi-channel approach based on MR Direct

2. Strengthen the organization
Form an organizational foundation befitting a group of expert staff farahead of competitors
・Recruit expert staff in call centers and BPO services to bolster eachdepartment

3. External growth・ Establish joint venture with SUZUKEN CO., LTD. (planned for October)・ Advance M&A activity and alliances
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21CPO BusinessTransition of the CPO Segment
FY2016（1Q）

FY2017（2Q） （3Q） （4Q） （1Q） （2Q） （3Q）

FY2018（4Q） （1Q） （2Q） （3Q）

（4Q）

NPO
J-CRSU Co., Ltd.

January: Start business

Merge
EPS
(formerly BPO)

EP-CRSUJanuary: Full-scale start of clinical research business

ＳＭＯ

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22

CPO Business Aspiring to Be a Leading Company inClinical Research Outsourcing Services

1. Develop product and supply systems
To pursue quality and growth in step with changes inthe external environment, we will:
・ Arrange product lineups and develop new products
in step with laws and regulations and customer
needs.
・ Streamline the service supply system and enhancequality
2. Strengthen management capabilities
・ Strengthen project management capabilities
・ Strengthen the segment management structure

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23

Global Research Business Key Initiatives
Business (Operations realigned into three regions)・ Japan:Strengthen monitoring services
Seeking to balance the difficulty of projects and the quantity andquality of resources allocated to them・ Asia-Pacific:
Reallocate and promote sales by revising bases and optimizing
resources
・ China:
Strengthen collaboration with China business and establish ajoint business platform
Management・ Japan:
Unify and centralize GR’s management control functions at Tokyo・ Asia-Pacific:
Reconfigure with a view to streamlining the management structure
・ China:Develop the framework through management by China business
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24

China BusinessSpecialized services business structure
EPS EKISINEPS International（China）(centered on CRO andmonitoring)
Investment30%(1) EPS Tigermed (Suzhou) Co., Ltd. 49%(Data services: Japanese)
51%(2) EPS Tigermed (Jiaxing) Co., Ltd.
(Data services: English)(3) EPS Tigermed (Nantong) Co., Ltd. 40%(Big Data)

Other

BEIJING KECHUANG
Investment

Hangzhou Tigermed

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25

China Business

Key Initiatives

Business(1) Strengthen the existing products business + introduce new products(2) Redevelop the operating foundation for specialized services(3) Investment + support ⇒ Incubation

Corporate(1) Advance the Matrix Management Structure (vertical and horizontal
dimensions)(2) Create a corporate culture through a fusion of Japanese and Chinesecultures(3) Identify and nurture the next generation of human resources

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26

Objectives of Vision30
1. Establish a position as a Solutions Provider in the Healthcare
Industry (Solutions provided as infrastructure)
2. Build up business scale to compete effectively with the major
global players and strengthen global business expansion
3. Extend independent and autonomous business management
and promote Group management
4. Make the EPS Way transparent and instill it in theorganization (build a corporate culture)

5. Nurture the next generation of management leadersCopyright © 2018 EPS Holdings All rights reserved.

27

Thank you for your attention.
Please direct inquiries toInvestor Relations, EPS Holdings, Inc.
Phone: +81-3-5684-7873 ／ Email：ir@eps.co.jp

Copyright © 2018 EPS Holdings All rights reserved.