®

®

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

Full year results ending March 2019

Consolidated results summary(￥mil)

Mar 2018

Mar 2019

YoYOE

Sales

62,832+11.1%

69,000Operating profit

3,144+3.7%

3,260

Recurring profit

3,148+3.7%

3,260

Net profit

3,005-12.1%

2,600

EPS (yen)
BPS (yen)

104.6969,775
3,261
3,264
2,640
91.99
680.89－90.57618.78－-3

Outline of 2018 revision of medical fee
1. Correction of over nursing care
- Reclassified acute care inpatient’s wards(7 to 1, 10 to 1) into 7 categories

2. Correction of overtreatment- Introduced appropriate usage criteria

3. Reimbursement price cuts of devices
4Reclassified inpatient basic fee【Before】

General ward inpatient basic fee (7to1,10to1)
Additional

1,357pts
1,332pts
12%

1,377pts
18%

25%

1,387pts
24%

Basic
10to1

【After】

Acute general ward inpatient basic fee

Correcting mismatch
between medical
needs andcare provided

1,491pts
Additional

1,332pts

1,591points

7to1
No change

1,561pts

1,591pts

1,357pts
Ⅰ:15%
Ⅱ:12%

1,377pts
Ⅰ:21%Ⅱ:17%

1,387pts
Ⅰ:27%
Ⅱ:22%

Ⅰ: ―
Ⅱ:23%

Ⅰ: ―
Ⅱ:24%

Ⅰ:30%
Ⅱ:25%

InpatientFee 6

Inpatient
Fee 5

Inpatient
Fee 4Inpatient
Fee 3

InpatientFee 2

Inpatient
Fee 1[Assessment ofseverity and degreeof requiring care]
Ⅰ：Current evaluation
Ⅱ：Evaluation based on
DCP data

Basic

Inpatient
Fee 7

Source：Central Social Insurance Medical Council 389 General Meeting (7 Feb 2018)5

Introduced 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.)6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
7Outline of reimbursement price cutsSegment

PCIItems

7399862,8903,300
4,140
4,500
3,060
143
637
1,310
1,090

831
831
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
1790.0- 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

8

Our approach◆ Strengthened sales activities to encourage PCI cases- Offered information on appropriate usage criteria, and proposed
countermeasures based on catchment area research◆ Implemented measures to improve margins- Rebate program and bulk purchasing◆ Post merger integration of Tesco and Tesco Akita Sales- Tesco Akita Sales absorbed by Tesco on July 1st 2018

◆ Tesco acquired MCI, a distributor in Yamagata pref.
- Consolidated from December 1st 2018
9

M&A of MCI✔Medical devise distributor based in Yamagata pref.
✔ 100% stake by Tesco for ¥1bn in Dec 2018
（Negative goodwill ¥278million）
FY 2017 figures (¥bn)
Sales2.58OP
0.13
Total asset
2.04
Net asset
1.31

23sales offices(as of Mar 2019)

WIN INTERNATIONAL sales offices
WIN INTERNATIONAL branch offices
TESCO sales offices

10Highlights

Sales + 11.1 %(¥mil)

vs. plan
YoY

+1.1%

Like-for-like sales +5.9%, excluding
Tesco Akita Sales and MCI

69,775

Volume increase offsets
reimbursement price cuts (-5.9%)
62,832

FY 3/2018

Favorable CRS, CVS, DMS and large-sized equipment
while PCI remains sluggish
FY 3/201911

Sales breakdown by segment
Sales(¥mil)

YoY growth (%)
Volume% of sales

Value(%)

Change (pt)Percutaneous coronary intervention (PCI)

21,320+2.6

▲7.3

30.6

▲6.0

Cardiac rhythm segment (CRS)

17,625+20.9+16.5

25.3+1.2

Cardiac vascular segment (CVS)

9,775▲2.1+17.5

14.0+0.8

Percutaneous peripheral intervention (PPI)

3,463+16.6+6.9

5.0

▲0.2

Brain surgery

2,486+14.5+14.9

3.6+0.1

Diabetes mellitus segment (DMS)

1,821-+51.3

2.6+0.7

Large-sized medical equipment

6,691-+69.5

9.6+3.3

Others6,590-+13.0

9.4+0.2

69,775-+11.1 100.0

TOTAL

12

Segment review

PCI

suffered from decreasing number of cases together with reimbursement pricecuts (-10.6%)

CRS

enjoyed increased volume absorbing reimbursement price cuts(-5.5%)
Sales of EP・Ablation related products posted 20% plus growth

CVS

enjoyed 40% plus growth in TAVI (transcatheter aortic valve implantation)
Overall volume declined due to terminated sales of commodity products by
ex-Tesco Akita Sales

PPI

enjoyed increased volume of PTA (percutaneous transluminalangioplasty) balloon catheters despite reimbursement price cuts (-7.3%)

enjoyed large-scaled relocation projects in Tohoku region
13

Segment review (vs. plan)(¥mil)

800

PPI
153

300

- 200

- 700

CRS-674

PCI-279

Others-259

CRS：shortage of sales to new customers
PCI：lower number of clinical cases

Others：curtailed unprofitable categories

CVS
195

Brain
DMS surgery
306
241

Large-sized
medicalequipment
1,091

PPI：higher sales to existing customers
CVS：higher number of TAVI cases
DMS：higher sales of glucose monitors
Brain surgery：higher sales to existing and new customers
Large-sized medical equipment：
larger orders relating to hospital relocations

14Highlights

Operatingprofit+ 3.7%(¥mil)
3,261

vs. planYoY+0%

Gross margin declined 0.5pt YoY- Worse sales mix(lower sales of PCI and higher sales of large equipment)- Lower than plan (12.6%) despite higher rebates in 4Q

3,144

SG&A rose 9.2% YoY- Labor cost (+11.2%) adding ex-Tesco Akita Sales
and MCI
FY 3/2018

FY 3/2019- Number of employees 517 → 536※
(Mar 2018)(Mar 2019)※including 10 employees of MCI

15

Highlights

Net profit(¥mil)

3,005
2,640

FY 3/2018- 12.1 %vs. plan
YoY+1.6%

Negative goodwill of MCI(¥278mil) vs.
Negative goodwill of ex-Tesco
Akita Sales (¥684mil) in previousyear

FY 3/201916

Consolidated income statements
Mar 2018(¥mil)

Mar 2019(%)(¥mil)(%)

62,832100.0

69,775

100.0

Cost of sales

54,78787.2

61,16387.7

Gross profit

8,044

12.8

8,612

12.3

SG&A expenses

4,900

7.8

5,351

7.7

Operating profit

3,144

5.0

3,261

4.7

Non-operating profit90.0

80.0

Non-operating expenses

50.0

50.0

3,148

5.0

3,264

4.7

Extraordinary profit

734

1.2

279

0.4

Extraordinary loss

55

0.1

40.0

3,826

6.1

3,540

5.1

821

1.3

899

1.3

3,005

4.8

2,640

3.8

Sales

Recurring profit

Pretax profit
Taxes

Net profit

17

Consolidated balance sheet
Mar 2018

Mar 2019

Change(¥mil)(%)(¥mil)(%)

33,03336,754

92.1

3,721

15,28918,361
2,335
767

38.3
46.0
5.9
1.9

1,972
984
688
75

Fixed assets

1,646
692
3,154

91.3
36.8
48.04.6
1.9
8.7

2

Total assets

36,188100.0

Current liabilities

17,635

7.9
3,156
39,910 100.0
19,439 48.7

Current assets
Cash and deposits
Accounts receivable
Inventory
Other current assets

13,317
17,377

Fixed liabilities

788

48.7
45.3
1.3
2.1
2.2

Total liabilities

18,42450.9

Net assets

17,764

49.1

Total liabilities,
net assets

36,188100.0

Accounts payable
16,388
Taxes payable
485
Other current liabilities
760

18,168484
786(¥mil)

3,722
1,804

45.5
1.2
2.0

1,780
-1
26

2.3
92420,363 51.0
19,547 49.0
39,910 100.0

136
1,939
1,783
3,722

Including MCI¥395mil

Including MCI¥476mil18

Consolidated cashflow statements(¥mil)

Mar 2018

Mar 2019

Cash flows from operating activities

1,343

2,289

Net profit before taxes
Depreciation
Sales proceeds of marketable securities
Negative goodwill
Notes and accounts receivable
Inventories
Notes and accounts payable
Tax paid

3,826
261-38-684-1,393365-49-927
-16

3,540
237
1-278-594-651
1,321-964-321

764-4,484

Other

Cash flows from investing activities
Payments into time deposits
Purchase of tangible assets
Sales proceeds of tangible assets
Sale of marketable securities
Purchase of investments in subsidiaries resulting inchange in scope of consolidation
Other-198
115
280-5,000
-91
7
9604

613

-37

-24

Cash flows from financing activities

-746

-832

Cash dividends paid

-746

-832

1,362
11,954
13,317-3,027
13,317

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

10,28919Outlook

Oct 2019 revision of medical fee
Net increase but individual prices not yet fixed(%)(¥bil)

１．Technical fee+0.41+20

Medical+0.48+17

Dental+0.57+2Dispensing+0.12+1

Pharmaceutical price

－0.51

－29

Corresponding consumption tax hike

＋0.42

＋20

Corresponding market price－0.93－49

Material price

＋0.03

＋2

Corresponding consumption tax hike

＋0.06＋3

Corresponding market price

－0.02

－1

Change２．Pharmaceutical and material priceSource：Ministry of Health, Labor and Welfare

21Our approach for 3/2020◆ Improve gross profit margin- Tougher price negotiation, consumption tax pass-on◆ Acquire new customers- Approach to next generation of doctors◆ Enhance marketing to existing customers- Offer solutions to meet needs based on customer analysis◆ Improve productivity- Renew mission-critical system and separate logistics from salesfunction◆ Enforce M&A and group management- Set administration division in April
22

Consolidated Forecasts to March 2020(¥mil)YoY (%)

(%)

Sales

71,000+1.8

100.0

Operating profit

3,300

+1.2

4.6

Recurring profit

3,300+1.1

4.6

Net profit

2,260

－14.4

3.2

EPS (yen)

78.72

DPS (yen)

33.00
23

Forecast highlights

Sales+ 1.8 % YoY
Full contribution of MCI(¥mil)

71,00069,775

Factored 1% impact fromreimbursement price cutsin 2H
Lower sales of large sized
equipment after large projects

FY 3/2019

FY 3/2020E
24

Sales breakdown by segment(¥mi l )YoY% of sales

Percutaneous coronary intervention (PCI)

22,780

+6.8%

32.1%

Cardiac rhythm segment (CRS)

19,460+10.4%

27.4%

Cardiac vascular segment (CVS)

10,500

+7.4%

14.8%

Percutaneous peripheral intervension (PPI)

3,800+9.7%

5.4%

Brain surgery

2,490+0.1%

3.5%

Diabetes mellitus segment (DMS)

2,050+12.6%

2.9%

Large-sized medical equipment

4,540-32.2%

6.4%

Others5,380-18.4%

7.6%

71,000+1.8%

100.0%TOTAL

25

Forecast highlights

Operating+
1.2%
YoYprofit(¥mil)

Gross profit margin +0.5pt YoY- Emphasizing price negotiation of disposal devices
and large sized equipment

3,300
3,261

SG&A

+9.1% YoY

- Higher labor cost
Total number of employees
536 → 584
(Mar 2019)

FY 3/2019(Mar 2020E)FY 3/2020E
26

Forecast highlights

Net profit-14.4%

YoY

Absence of negative goodwill(¥mil)

2,640

Capex
2,260

¥130 milvs. ¥143mil for FY 3/2019

220

FY 3/2019

FY 3/2020E

Depreciation ¥mil
vs. ¥237mil for FY 3/201927

Ｄｉｖｉｄｅｎｄｓ

Dividends

We aim at
Over 30% payout ratio
Dividends FY ending March 2020

33 （yen)payout ratio
42%28

Major products
Segment

Disease

ProductPCI・Myocardial
infarction
・ Angina
Pacemaker

CRS・Abnormal
cardiac rhythm

Implantablecardioverter
defibrillator（ICD）

Stent graft

CVSPPI/Brain
surgery

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)29

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

Operating profit
Sales:¥milOperatingprofit:¥mil

20,00019,135 2,000
18,777

16,874
15,547
16,204 15,988
15,182
15,875
14,49914,412
14,571
14,37014,023
13,862
13,90815,0001,062
13,223
13,69013,28813,05911,957
12,582881
11,407
833 794806
805 842783
11,630739 788722
712 712703
696
688 739
10,822
681
647
595
564
545
10,000 505
446

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

2Q3Q

4Q

1,500

1,000
500
0

FY 3/2019= Year of reimbursement price revisions

30

Share price(Yen)

1,900

May 2014
TSE 2nd section
1,600

Sep 2014
TSE 1st section
1,300

1,000

Effective on
January 1st, 2017

Dec 2013
360,000
Share selling

Stock split 1 : 2700

Mar 2015
1 mil share selling

株式売出
目論見書

400

2013
2014
2015
2016
2017
2018
2019
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 91011121 2 3 4 531

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 developmentsto 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