WIN A BETTER QUALITY OF LIFE
ウイン・パートナーズ株式会社
WIN-Partners Co., Ltd.

Results Presentation
WIN-Partners Co., Ltd. (3183)

2Q FY March 2017

2Q results ending September 2016

Consolidated results summary（¥mil）2Q toSep 2015

Sep 2016

YoYOE

Sales

25,871+7.1%

26,800Operating profit

1,277+12.5%

1,340

Recurring profit

1,283

27,713
1,436
1,438
982
68.43
997.80+12.0%

1,340

+4.8%

910－－－－Net profit

937

EPS (yen)
BPS (yen)

65.28
891.133

Our approach◆ Negotiated selling and procurement prices toreflect new reimbursement prices‐ Suppliers: Almost reached agreement‐ Customers: Approx. 90% reached agreement◆ Acquired new customers‐ Initiated business with new CRS customers from 2Q◆ Strengthened sales structure‐ Increased the number of CRS staffs‐ Offered specialist services by ablation team4

Highlights

Sales + 7.1 %(¥mil)

27,71325,871

vs. plan
YoY+3.4%

Higher sales volume absorbed
negative impact fromreimbursement price cuts (▲5%)
Contribution from new customers

CRS and large‐sized equipment
2Q to Sep 2015 2Q to Sep 2016 segments exceeded forecasts
5Sales breakdown by segment
Sales(¥mil)

YoY growth (%)
VolumeValue% of sales(%)

Change (pt)

10,491+6.1

▲5.9

37.9

▲5.2

Cardiac rhythm segment (CRS)

6,601+30.4+19.0

23.8+2.4

Cardiac vascular segment (CVS)

3,121

▲6.6

▲3.8

11.3

▲1.3

Percutaneous peripheral intervention (PPI)

1,398+14.8+2.3

5.0

▲0.2

Brain surgery

953+10.2+10.4

3.4+0.1

Diabetes mellitus segment (DMS)447-+24.8

1.6+0.2

Large‐sized medical equipment

2,330-+85.8

8.4+3.6

Others2,369-+13.3

8.5+0.5

27,713-+7.1 100.0

Percutaneous coronary intervention (PCI)

TOTAL

6

Segment review

P C I suffered from reimbursement price cuts ( 8.7%) despite higher sales volume.
▲

continued to post double digit growth in sales despite reimbursement price
C RS cuts( 3.4%). Particularly sales of EP・Ablation posted 40% growth.
▲from reimbursement price cuts ( 2%), lower sales volume of stent
CVS sufferedgraft and open‐heart surgery related devices despite favorable sales of TAVI.
▲

reimbursement price cuts ( 3.7%) with higher sales volume in
P P I offset
PTA balloon catheters and peripheral vascular stents.
▲

enjoyed higher sales with eased negative impact of tax rise.
7

CRS highlight
Ablation treatment rapidly expanding
Diagnostic and treatment accuracy improved by new products→ Number of atrial fibrillation procedures increased

Diagnosis

3‐D Mapping System

Treatment：

Cardiac Cryoablation Catheter

8

Highlights

Operatingprofit + 12.5%(¥mil)

1,450vs. plan
YoY+7.2%

Tighter control of SG&A (+0.5%)
Labor cost accounting for 70% of SG&A rose by only 1%

1,436

1,400

Mar 2016[Number of employees]

Sep 2016

422 → 440

1,350

Gross profit margin dropped 0.2pt

1,300

1,250

1,277

‐ Changes in sales mix due to the decrease in sales of PCI‐ Decreased bulk purchase‐ Covered negative impact of reimbursement price cuts by
reducing procurement costs

1,200

1,150

2Q to Sep 2015前期

2Q to Sep 2016実績

9Highlights

Net profit + 4.8 %(¥mil)

990

982

970

950930937

vs. planYoY+7.9%

Marginal increase after theextraordinary profit posted inFY3/2016(Sales proceeds of marketable securities, etc.)

910

890

870

850

2Q to Sep 2015前期

2Q to Sep 2016実績

10

Consolidated income statements
2Q toSep 2015(¥mil)

Sep 2016(%)(¥mil)(%)

25,871

100.0

27,713

100.0

Cost of sales

22,42086.7

24,091

86.9

Gross profit

3,450

13.3

3,622

13.1

SG&A expenses

2,173

8.4

2,186

7.9

Operating profit

1,277

4.9

1,436

5.2

Non‐operating profit

70.0

20.0

Non‐operating expenses

00.0

00.0

1,283

5.0

1,438

5.2Extraordinary profit

263

1.0--

Extraordinary loss

167

0.6

00.0

1,379

5.3

1,437

5.2

Taxes

442

1.7

455

1.6

Net profit

937

3.6

982

3.5

Sales

Recurring profit

Pretax profit

11

Consolidated balance sheet
Mar 2016

Sep 2016

Change(¥mil)(%)(¥mil)

(%)

90.2
31.5
51.3
5.0
2.5
9.8

26,94790.5

323

10,516
13,941
1,543
946

35.3
46.8
5.2
3.2

1,230
▲1,19668
220

Fixed assets

26,624
9,285
15,137
1,475725
2,891

9.5

▲49

Total assets

29,515100.0

14,903
Accounts payable
13,477
Taxes payable
604
Other current liabilities
821
Fixed liabilities
684

50.5
45.7
2.0
2.8
2.3

2,841
29,78914,745100.0
49.5273▲157

13,779
432
533

46.3
1.5
1.8302
▲171
▲288

2.4

Total liabilities

15,587

52.8

Net assets

13,927

47.2

Total liabilities,
net assets

29,515100.0

721
15,466
14,322
29,78936▲121394
273

Current assets
Cash and deposits
Accounts receivable
Inventory
Other current assets

Current liabilities

51.9
48.1
100.0(¥mil)

12

Consolidated cashflow statements(¥mil)

2Q to

Sep 2015

Sep 2016

791

1,898

Net profit before taxes
Depreciation
Sales proceeds of marketable securities
Cash surrender value of insurance
Actuarial loss on retirement allowance
Notes and accounts receivable
Inventories
Notes and accounts payable
Tax paid

1,379
133
▲169
▲93159730▲16▲850
▲478

1,437
119
1,196▲65302▲738

Cash flows from investing activities

295

▲79

Purchase of tangible assets
Sale of marketable securities
Surrender of insurance▲166299
106

Cash flows from financing activities▲545▲68-▲588

Cash dividends paid▲545▲588

Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of FY
Cash and cash equivalents at the end of 2Q

541
7,238
7,779

Cash flows from operating activities

1,230
9,285
10,51613

OutlookOutline of 2016 revision of medical fee
1. Reimbursement price cut of devices→ Estimated impact to our group:
Average ▲5% on sales

2. Stricter assessment of acute care hospitals→ 10% of number of bed units for acute care hospitals
likely to be disqualified
15

1. Impact of reimbursement price cut ongroup salesSegment

Impact (%)

Percutaneous Coronary Intervention (PCI)▲ 8.7

Cardiac Rhythm Segment (CRS)▲ 3.4

Cardiac Vascular Segment (CVS)▲ 2.0

Percutaneous Peripheral Intervension (PPI)▲ 3.7

Brain Surgery▲ 2.3Others

▲ 0.7

Total
Calculated based on the actual sales volume and product mix on FY 3/2016

▲ 5.0
16

Outline of reimbursement price cutsSegment

PCIItems

827
1,040
2,940
3,300
4,280
4,500－
149
637
1,310－

739
986
2,890
3,300
4,140
4,500
2,870
143
637
1,310
1,140

▲12.0
▲13.4
▲8.3
▲10.6▲5.2▲1.70.0▲3.30.0▲4.00.00.0-

Hea rt va l ve for Tra ns catheter Aorti c Va lve
Impl antation (TAVI) (Ba ll oon‐expanda bl e)

4,650

4,430

▲4.7Heart valve for TAVI (self‐expanding)
PTA Ballon Catheter
Peripheral Vascular Stent graft

－72
188

3,670
67188

▲6.90.0

ICD (Implantable Cardioveter Defibrillator)

ICD (MRI‐conditional)
CRTD (Cardiac Resychronization Therapy Difibrillator)

CRTD (MRI‐conditional)
Subcutaneous Implantable Defibrillator (S‐ICD）

PPI

2016
59226100Pacemaker
Pacemaker (MRI‐conditional)

CVS

2014

Change (%)

67261
109

PTCA Ballon Catheter
DES (Drug Eluting Stent)
IVUS (Intravascular Ultrasound Catheter)

CRS

Reimbursement prices (¥000)

Ablation Catheter
Cardiac Cryoablation Catheter
Stent graft (abdomen）
Open Stent graft

17

2. Stricter assessment of acute care
hospitals
Due to the stricter regulation of medical fees, 10% of number of
bed units(C. 36,000) for acute care hospitals likely to be eliminatedChanges in number of bed units for acute care hospitals(000units)
500

400
328

352357379380366363369332287

300

MHLW target

243
200180162100440

2006.52007.72008.72009.72010.72011.72012.72013.72014.72014.102015.42015.10Source: WIN‐Partners Co., Ltd., based on the data published by Central Social Insurance Medical Council, MHLW on Dec. 9, 2015

2016

.

2025
2025

18

Issues on 2018 revision of medical fee
1. Establishment of integrated community
care system→ Efficient and effective home medical care

2. Promotion of bed classification
by clinical specialization→ Bed classification based on patient status(Consideration of new assessment measures, etc. )3. Review of high‐priced pharmaceuticals
19Our approach from FY 3/2017 onward
Promoting support to strengthen
customer hospital functions• Support customers to grade up functions tobecome core acute care hospitals in each region• Propose measures to gather and increase patients• Support customers for more effective and efficient
medical care and hospital operation
20

Our concrete measures to strengthen
customer hospital functions
Support upgrading to“Multi‐specialty” hospitals
1) Propose customers to start up new department:
aa Cardiovascular internal medicine → Cardiac surgery
2) Propose customers to expand the clinical field:
Percutaneous coronary intervention→ Cardiac rhythm3) Recommend screening to discover potential patients:
Heart ⇔ Peripheral

4) Support to form “Hybrid medical” team5) Offer specialist services:

Support to use ablation devices properly by the ablation team21

Consolidated Forecasts to March 2017(¥mil)(%)

YoY(%)

Sales

56,600

100.0

+4.5

Operating profit

3,000

5.3+1.2

Recurring profit

3,000

5.3

+0.7

Net profit

2,050

3.6

▲2.9

EPS (yen)

71.41*DPS (yen)

21.50 *

*Figures after the stock split (1:2)

22

Forecast highlights

Sales+ 4.5 %YoY

Expand customer share‐ Support to strengthen hospital functions(¥mil)

56,600‐ Acquire major hospitals in the metropolitan area
‐ Expand regional branches in response to increasing
requests for consulting→ Enhance our value‐added services

54,147
FY 3/2016

Acquire new customers

FY 3/2017E

Revised full year sales breakdown by segment,
reflecting 2Q results
23Full year sales breakdown by segment(¥mi l )YoYOE

Percutaneous coronary intervention (PCI)

21,500▲5.0%

23,330

Cardiac rhythm segment (CRS)

13,660+20.1%

11,960

Cardiac vascular segment (CVS)

6,400

▲3.9%

6,820

Percutaneous peripheral intervension (PPI)

3,010

+7.4%

3,010

Brain surgery

1,770

▲7.0%

1,770

Diabetes mellitus segment (DMS)

1,030+33.2%

1,030

Large‐sized medical equipment

5,000+50.2%

3,970

Others

4,230

▲9.5%

4,710

56,600+4.5%

56,600TOTAL

24Forecast highlights

Operatingprofit+1.2% YoY

Gross profit margin

13.2%(¥mil)

3,000

FY 3/2016‐ Although aiming to improve profit margin throughhigher rebates and bulk purchasing in the second
half, revised from initial 13.5% reflecting 2Q results

SG&A

2,965

‐FY 3/2017E

0.2pt YoY▲

+4.1% YoY

Revised SG&A expenses from ¥4.66bn to ¥4.47bn
Revisions in total number of employees

OE : 478 → RE: 460 as of March 31, 2017(422 as of March 31, 2016)25

Forecast highlights

Net profit▲2.9% YoY

Absence of extraordinary profit(¥mil)

2,111

Capex

¥60 milvs. ¥310mil for FY 3/2016
2,050

FY 3/2016

FY 3/2017E

230

Depreciation ¥milvs. ¥276mil for FY 3/2016
26

Ｄｉｖｉｄｅｎｄｓ

Dividends

We aim at
Over 30% payout ratio
Dividends FY ending March 2017

.

yen*

*After the stock split (1:2)
27

Share priceMar 2015
1 mil share selling(Yen)

2,000
prospectus
for issuanceMay 2014
TSE 2nd section

1,800

Effective on
January 1st, 2017

Stock split

1:2

1,600

1,400

Dec 2013
360,000 shareselling

1,200

1,000

800

Sep 2014
TSE 1st section
2013

2014

2015

2016

4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 104 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 1028

Upcoming new product (PCI)The first Bioresorbable stent in Japan

Bioresorbable Vascular Scaffold (BVS)
Obtained approval in Nov 2016

Abbott「AbsorbGT1」

Photo provided by Abbott Vascular29

Major products
Segment

Disease

ProductPCI・Myocardial
infarction
・ Angina
Pacemaker

CRS・Abnormal
cardiac rhythm

Implantablecardioverter
defibrillator（ICD）

Stent graft

CVS
PPI/Brain
surgeryDMS/

Intravascular ultrasound(IVUS) catheter

Drug‐eluting stent (DES)

PTCA balloon catheter

Cardiacresynchronization
therapydefibrillator(CRTD)

Transcatheter aortic valve

Ablation catheter

Mechanical heart valve

・Aortic aneurysm
・Aortic stenosis

Peripheral vascular stent

Carotid stent

Neurovascular occlusion coil・Arteriosclerosis
obliterans・Diabetes
Large・Diagnosis
equipment

Insulin pump

X‐ray equipment

Magnetic resonanceimaging (MRI)30

Track record of quarterly results
Sales/Operating profit (quarterly)
Sales

Operating profit

Operatingprofit:¥mil

Sales:¥mil14,370

15,00013,90813,223

13,05913,00011,0009,000

10,822

11,630 11,957

11,407

505

545

1Q

2Q

12,582

688

739

647

722

783

3Q

4Q

595

446

13,288681

13,862806

14,412

13,690 14,023

881
696

739

1Q

2Q

7,000
5,000

3Q

FY 3/2014

4Q

1Q

2Q

FY 3/2015

1Q

2Q

3Q

FY 3/2016

4Q

2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0

FY 3/2017= Year of reimbursement price revisions

31

Disclaimer
This material was prepared based on information available and views held at the time it was made. Statements in this material thatare not historical facts, including, without limitation, plans, forecasts and strategies are “forward‐looking statements”.
Forward‐looking statements are by their nature subject to various risks and uncertainties, including, without limitation, a decline ingeneral economic conditions, general market conditions, technological developments, changes in customer demand for products
and services, increased competition, and other important factors, each of which may cause actual results and future developments
to differ materially from those expressed or implied in any forward‐looking statement.
With the passage of time, information in this material (including, without limitation, forward‐looking statements) could besuperseded or cease to be accurate. WIN‐Partners Co., Ltd. disclaims any obligation or responsibility to update, revise orsupplement any forward‐looking statement or other information in any material or generally to any extent. Use of or reliance on theinformation in this material is at your own risk.

Contact
WIN‐Partners Co., Ltd.
Investor Relations
TEL: +81‐3‐6895‐1234
http://www.win‐partners.co.jp