®

®

Results Presentation
2Q FY March 2019
Win-Partners Co., Ltd. (3183)

2Q results ending September 2019

Consolidated results summary(¥mil)2Q toSep 2017

Sep 2018

YoYOE

Sales

29,753+7.1%

31,700Operating profit

1,497-14.8%

1,410

Recurring profit

1,499-15.1%

1,410

Net profit

1,018

31,863
1,276
1,273
896

-12.0%980

EPS (yen)
BPS (yen)

35.49

31.22

549.20321.013

Our approach◆ Negotiated selling and procurement prices to reflect
new reimbursement prices- Reached agreement with customers (92%) and suppliers (99%)◆ Implemented measures to improve margins- Rebate program and bulk purchasing◆ Tesco Akita absorbed into Tesco in July
- Introduced IT infrastructure and operational reforms◆ Introduced new personnel appraisal- Shift to ‘role-based’ pay scheme from ability & seniority-based4

Highlights

Sales + 7.1 %(¥mil)

31,86329,753vs. plan
YoY

+0.5%

+2.3% excluding Tesco Akita
Absorbed negative impact fromreimbursement price cuts (-5.9%)- Favorable sales of CRS, CVS and DMS

2Q to Sep 2017

2Q to Sep 2018

- PCI sales depressed by lower numberof cases and price cuts5

Reimbursement price cuts
(impact on group sales)
Segment

Impact (%)

Percutaneous Coronary Intervention (PCI)-10.6

Cardiac Rhythm Segment (CRS)-5.5

Cardiac Vascular Segment (CVS)-0.9

Percutaneous Peripheral Intervension (PPI)-7.3

Brain Surgery-2.0

Others

-0.3

Total

-5.9
Calculated based on the actual sales volume and product mix on FY 3/2018
6Outline of reimbursement price cuts
Segment

PCIItems

739
986
2,890
3,300
4,140
4,500
3,060
143
637
1,310
1,090

831831
3,040
3,040
4,140
4,140
3,060
133
637
1,300
1,090

- 23.3- 14.6- 10.512.4- 15.7
5.2
- 7.9
0.0
- 8.0
0.0
- 7.0
0.0
- 0.8
0.0

Hea rt va lve for Tra ns ca theter Aortic Va lve
Impla ntation (TAVI) (Ba lloon-expa nda ble)

4,430

4,430

0.0

Heart valve for TAVI (self-expanding)
PTA Ballon Catheter
Peripheral Vascular Stent graft

3,670
67
188

3,670
60
179

0.0
- 10.4- 4.8

ICD (Implantable Cardioveter Defibrillator)

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

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

PPI201845
193
89

Pacemaker
Pacemaker (MRI-conditional)

CVS

2016

Change (%)

59
226
100

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

7

Sales breakdown by segment
Sales(¥mil)

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

Change (pt)

10,204

+2.7

-7.7

32.0

-5.1Cardiac rhythm segment (CRS)

8,707+26.1+23.8

27.3+3.7

Cardiac vascular segment (CVS)

4,641+10.9+22.5

14.6+1.8

Percutaneous peripheral intervention (PPI)

1,613+15.3+2.7

5.1-0.2

Brain surgery

1,164+9.9+18.6

3.7+0.4

Diabetes mellitus segment (DMS)847-+63.82.7+0.9

Large-sized medical equipment

1,530--33.7

4.8-3.0Others

3,155-+26.3

9.9+1.5

31,863-+7.1

100.0

Percutaneous coronary intervention (PCI)TOTAL8Segment review (YoY)[vs. plan]

PCI

suffered from larger reimbursement price cuts (-10.6%) andlower number of cases

CRS

enjoyed higher demand for EP・Ablation (+27%) and ICD, CRTD
despite reimbursement price cuts (-5.5%)

CVS

enjoyed higher demand for TAVI and stent graft related products
together with moderate reimbursement price cuts (-0.9%)

PPI

enjoyed higher demand for PTA balloon catheter despite
reimbursement price cuts (-7.3%)

suffered from decreased number of large projects
9Highlights

Operatingprofit(¥mil)

1,600

1,400

1,497

1,200

1,276

1,000

800

-14.8%vs. planYoY-

9.5%

Gross profit margin
12.5% (-0.4pt YoY)
- Worsened product mix (lower sales of PCI)
- Fell short of the plan despite rebates at the end of 2Q

SG&A +15.2% YoY (+7% excluding Tesco Akita)600- including labor cost (+16.6%)- Number of employees：471 → 527

400200(Sep 2017)(Sep 2018)

02Q to Sep 2017 2Q to Sep 2018

前期

実績

10

PMI: TESCO Akita

Absorbed into TESCO
on July 1st✔ Posted interim sales of ¥1.4bn✔ Improved margins after integration

22sales offices(as of Sep 2018)

WIN INTERNATIONAL sales offices
WIN INTERNATIONAL branch offices
TESCO sales offices11Consolidated income statements
2Q toSep 2017(¥mil)

Sep 2018(%)(¥mil)(%)

29,753100.0

31,863

100.0

Cost of sales

25,91487.1

27,89087.5

Gross profit

3,839

12.9

3,973

12.5

SG&A expenses

2,341

7.9

2,696

8.5

Operating profit

1,497

5.0

1,276

4.0

Non-operating profit

20.0

20.0

Non-operating expenses

00.0

50.0

1,499

5.0

1,273

4.0

Extraordinary profit--00.0

Extraordinary loss

16

0.1

10.0

1,483

5.0

1,272

4.0

464

1.6

376

1.2

1,018

3.4

896

2.8

Sales

Recurring profit

Pretax profit
Taxes

Net profit

12Consolidated balance sheet
Mar 2018

Sep 2018

Change(¥mil)(%)(¥mil)

(%)

91.3
36.8
48.0
4.6
1.9
8.7

32,81391.4-220

13,752
15,909
2,159
991

38.3
44.3
6.0
2.8

435
-1,468513
299

Fixed assets

33,033
13,317
17,377
1,646
692
3,154

8.6

-75

Total assets

36,188

100.0

100.0

-296

17,635
Accounts payable
16,388Taxes payable
485
Other current liabilities
760
Fixed liabilities
788

48.7
45.3
1.3
2.1
2.2

3,079
35,892
17,24648.0-389

16,229
420
596

45.2
1.2
1.6

-159
-65
-164

Total liabilities

18,42450.9

Net assets

17,764

49.1

2.3
50.3
49.7

Total liabilities,
net assets

36,188100.0

818
18,064
17,82835,89230-360
64-296

Current assets
Cash and deposits
Accounts receivable
Inventory
Other current assets

Current liabilities

100.0(¥mil)

13

Consolidated cashflow statements
Sep 2017

Sep 2018

Cash flows from operating activities

-562

1,327

Net profit before taxes
Depreciation
Notes and accounts receivable
Inventories
Notes and accounts payable
Tax paid
Other

1,483
120
-1,844
-118
253
-488
31

1,272
115
1,468
-512
-151
-490
-373

Cash flows from investing activities-1,363-59

Purchase of tangible assets
Purchase of marketable securities
Other

-98
-1,250-14-53-5

Cash flows from financing activities

-746

-832

Cash dividends paid
Other

-746
0-832
0

Net increase in cash and cash equivalents-2,671

Cash and cash equivalents at beginning of FY

11,954

Cash and cash equivalents at the end of 2Q

9,283

435
13,317
13,752(¥mil)

2Q to14

OutlookOverview of PCI

Factors affecting sluggish sales①Lower price, reflecting severe
reimbursement price cuts (‐10.6%)②Lower number of PCI cases at customer
hospitals
16Factors affecting lower PCI cases① Hospitals holding back of PCI after introduction ofAppropriate Usage Criteria(evaluation of functional ischemia of coronary）② Intense competition among hospitals(loss of patients）③ Shortage of doctors (transfer and retirement)④ Shift of hospital resources to Ablation and TAVI
17

Outline of appropriate usage criteria
Changes of reimbursement requirements
on PCI for stable angina
Before: Case of over 75% stenosis
After April:
In case of stenosis between 75% and 90%,
provide evidence to justify PCI(assessment of functional flow reserve etc.)

18

Our approach in the second half
✔ Support hospitals for proper interpretation on theusage criteria✔ Propose competitive measures and support
marketing to increase patient referral
Provide research of catchment area and promote regional
collaboration with clinics etc.

✔ Propose measures to improve hospital income
and support to recruit doctors✔ Acquire new customers✔ Improve gross margins
19

Consolidated Forecasts to March 2019(¥mil)

YoY (%)

(%)

Sales

67,000+ 6.6

100.0

Operating profit

3,200+ 1.8

4.8

Recurring profit

3,200+ 1.6

4.8

Net profit

2,300- 23.5

3.4

EPS (yen)

80.12

DPS (yen)

30.00
20

Forecast highlights

Sales+ 6.6 %YoY

Expand customer share- Support customers to increase PCI patients- Expand trading volume per customer(¥mil)

67,00062,832
FY 3/2018

FY 3/2019EAcquire new customers- University hospital groups- Regional core hospitals- Diabetes clinic

Revised sales breakdown bysegment
21Full year sales breakdown by segment(¥mil)

YoY(%)% of salesOE(¥mil)

Percutaneous coronary intervention (PCI)

21,300-7.4

31.8

23,110

Cardiac rhythm segment (CRS)

18,000

+19.0

26.9

16,810

Cardiac vascular segment (CVS)

9,480

+13.9

14.1

9,480

Percutaneous peripheral intervension (PPI)

3,310

+2.2

4.9

3,310

Brain surgery

2,180

+0.7

3.3

2,180

Diabetes mellitus segment (DMS)

1,580+31.2

2.4

1,580

Large-sized medical equipment

4,400

+11.4

6.6

4,400

Others

6,750

+15.8

10.1

6,130

67,000

+6.6

100.0

67,000TOTAL

22Forecast highlights

Operating+1.8%YoY
profitGross profit margin
12.8% (flat YoY)(¥mil)

3,200

3,144

- Revised from initial target (13.1%) due to lower PCI
sales- Expecting to improve margins supported by higher
rebates and bulk purchasing in the second half

SG&A ¥5.35bn (+9.2% YoY )- +5.3% excluding Tesco Akita- Revised down from initial plan by ¥0.2bn- Estimated number of employees
517 → 540 (vs. initial 561)
FY 3/2018

FY 3/2019E(Mar 2018)(Mar 2019)23

Forecast highlights

Net profit-23.5%YoYAbsence of negative goodwill ofTesco Akita(¥mil)

Capex

3,005
2,300

¥150 milvs. ¥198mil for FY 3/2018

220

FY 3/2018

FY 3/2019E

Depreciation ¥mil
vs. ¥262mil for FY 3/2018
24

Ｄｉｖｉｄｅｎｄｓ

Dividends

We aim at
Over 30% payout ratio
Dividends FY ending March 201930

yenpayout ratio
37%

25

M&A of MCI✔Medical devise distributor based in Yamagata pref.
✔ Tesco to take 100% stake at ¥1bn in Dec 2018
（Impact on earnings and goodwill are now under assessment)

FY 2017 figures (¥bn)
Sales
2.58
OP
0.13
Total asset
2.04
Net asset
1.31

23sales offices(as of Dec 2018E)
WIN INTERNATIONAL sales offices
WIN INTERNATIONAL branch offices
TESCO sales offices26

Major products
Segment

Disease

ProductPCI・Myocardial
infarction
・ Angina
Pacemaker

CRS・Abnormal
cardiac rhythm

Implantablecardioverter
defibrillator（ICD）

Stent graft

CVS
PPI/

Brainsurgery

DMS/

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)27

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

Operating profit

Operatingprofit:¥milSales:¥mil

16,874
15,988 2,000
16,204
15,875
15,547
15,182
14,49914,571
14,412
14,37014,023
13,862
13,908
13,6901,500
13,223
13,05913,288
11,957
12,582
13,00011,407
11,63010,822833 7941,000
806 881805 842783
739
739 788
722
712
703
696
688
681
647
595
564
505 545
9,000
446
500
17,000

5,000

1Q

2Q

3Q

FY 3/2014

4Q

1Q

2Q

3Q

FY 3/2015

4Q

1Q

2Q

3Q

FY 3/2016

4Q

1Q

2Q

3Q

FY 3/2017

4Q

1Q

2Q

3Q

FY 3/2018

4Q

1Q

2Q

0

FY 3/2019= Year of reimbursement price revisions

28

Share price(Yen)

1,900

May 2014
TSE 2nd section
1,600

Sep 2014
TSE 1st section

Effective on
January 1st, 2017

1,300

1,000

Stock split
Dec 2013
360,000
Share selling

1:2700Mar 2015
1 mil share selling

株式売出
目論見書

400

2013
2014
2015
2016
2017
2018
91011121 2 3 4 5 6 7 8 91011121 2 3 4 5 6 7 8 91011121 2 3 4 5 6 7 8 91011121 2 3 4 5 6 7 8 91011121 2 3 4 5 6 7 8 9101112
29

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: +81-3-3548-0790
http://www.win-partners.co.jp