®

®

Results Presentation
2Q FY March 2020
Win-Partners Co., Ltd. (3183)

2Q results ending September 2019

Consolidated results summary(¥mil)2Q toSep 2018

Sep 2019

YoYRE(Aug9)

Sales

31,863+4.0%

32,500Operating profit

1,276+14.3%

1,310

Recurring profit

1,273+14.3%

1,310+16.8%

950

Net profit

896

33,144
1,458
1,455
1,047

EPS (yen)
BPS (yen)

31.22

36.48

621.01685.41

3

Highlights

Sales + 4 % YoY

vs. RE+2%

Like-for-like sales +0.2%(¥mil)

33,144
31,863(excluding MCI consolidated last December)

Sales to a major customer
dropped significantly from June(particularly PCI, CRS, CVS)

2Q to Sep 2018 2Q to Sep 2019

Achieved revised estimate except
PCI segment
4Sales breakdown by segment
Sales(¥mil)

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

Change (pt)Percutaneous coronary intervention (PCI)

9,849-5.2-3.5

29.7-2.3

Cardiac rhythm segment (CRS)

8,944-3.0+2.7

27.0-0.3

Cardiac vascular segment (CVS)

4,669-2.2+0.6

14.1-0.5

Percutaneous peripheral intervention (PPI)

1,789+6.6+10.9

5.4+0.3

Brain surgery

1,322+11.6+13.6

4.0+0.3

Diabetes mellitus segment (DMS)

1,060-+25.1

3.2+0.5

Large-sized medical equipment

1,996-+30.5

6.0+1.2

Others3,513-+11.3

10.6+0.7

33,144-+4.0 100.0

TOTAL

5

Segment review[vs. RE]

PCI

suffered from a major customer’s drop althoughnumber of cases stopped falling at existing customer basis
Drug eluting balloon (DEB) increased while DES decreased

CRS

posted higher sales of pacemakers
EP Ablation related products decreased slightly sufferedfrom a major customer’s drop

CVS
PPI

posted higher sales of TAVI related products
Stent graft decreased suffered from a major customer’s drop
posted higher sales of drug coating balloon (DCB) and drug
eluting stent (DES)
enjoyed increased number of projects

posted higher sales of smaller equipment and accessories
6

Highlights

Operatingprofit +14.3% YoY(¥mil)

1,458
1,276

vs. RE+11%

Gross profit margin
12.7% (+0.2pp YoY)
- Contribution from MCI- Cost reduction through bulk purchasing- Improvement of large equipment’s margin

SG&A +2% YoY- Labor cost (+5.5%)- Number of employees：527 → 548(Sep 2018)

2Q to Sep 2018

2Q to Sep 2019

(Sep 2019)

OP exceeded revised estimate due tohigher sales ＆ lower than expected
SG&A
7

Highlights

Net profit +16.8% YoY(¥mil)

1,047896

2Q to Sep 2018

vs. RE+10%

Extraordinary profit boosted netprofit- ¥82mil income from silent partnership investment(MCI)

2Q to Sep 20198

Consolidated income statements
2Q toSep 2018(¥mil)

Sep 2019(%)(¥mil)(%)

31,863100.0

33,144

100.0

Cost of sales

27,89087.5

28,93487.3

Gross profit

3,973

12.5

4,210

12.7

SG&A expenses

2,696

8.5

2,751

8.3

Operating profit

1,276

4.0

1,458

4.4

Non-operating profit

20.0

60.0

Non-operating expenses

50.0

8

0.0

1,273

4.0

1,455

4.4

Extraordinary profit

00.0

82

0.2

Extraordinary loss

10.0

0

0.0

1,272

4.0

1,538

4.6

Taxes

376

1.2

491

1.5

Net profit

896

2.8

1,047

3.2

Sales

Recurring profit

Pretax profit

9Consolidated balance sheet
Mar 2019(¥mil)(%)

Fixed assets

36,754
15,28918,361
2,335
767
3,156

92.1
38.3
46.0
5.9
1.9
7.9

Total assets

39,910100.0

19,439Accounts payable
18,168
Taxes payable
484
Other current liabilities
786
Fixed liabilities
924

48.7
45.5
1.2
2.0
2.3

Total liabilities

20,36351.0

Net assets

19,54749.0

Total liabilities,
net assets

39,910100.0

Current assets
Cash and deposits
Accounts receivable
Inventory
Other current assets

Current liabilities

Sep 2019

Change(¥mil)(%)(¥mil)

34,58791.8-2,166

16,49915,147
2,218
722

43.8
40.2
5.9
1.9

1,209
-3,214-116-44 Major

3,084
37,672
17,0278.2-71 drop

100.0
45.2

-2,238-2,411

15,885
530
611

42.2
1.4
1.6

-2,28245-174

967
17,995
19,67637,672

2.6

43-2,368
129-2,238

47.8
52.2
100.0

customer’s

10Consolidated cashflow statements
Sep 2018

Sep 2019

Cash flows from operating activities

1,327

2,144

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

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

1,538
94
3,214
129
-2,282-513-37

Cash flows from investing activities

-59

-16

Purchase of tangible assets
Other-53-5-65
49

Cash flows from financing activities

-832

-918

Cash dividends paid
Other

-832
0-918
-Net increase in cash and cash equivalents

435

1,209
10,28911,499(¥mil)

2Q to

Cash and cash equivalents at beginning of FY

13,317

Cash and cash equivalents at the end of 2Q

13,75211

Outlook

Measures for earnings recovery① New customer acquisition
Opened Yamato branch office in Kanagawa pref. (July)
Develop in Shizuoka, Sapporo, Akita and new regions (Organic & M&A)

② Customer share expansion
Explore replacement demand for large equipment③ Gross margin improvement
Expand items for bulk purchasing④ Tighter SG&A control
Freeze new hire[No. of employees] initial E 584 → 560 (Mar 2020E)⑤ Appeal of our role and value to customers
Promote our services to secure safety and quality at clinical sites
and increase the value of hospital
13Our role
Procurement of optimal devices fromwide variety, delivery and inventory control
PCI not completed with one company’s products

Stent made by CompanyＢ
PTCA balloon catheter
made by Company A
IVUS catheter made by Ｃ

Guidewire made by D
Guiding catheter made by E
Sheath made by F
Ｙconnector made by G
Indeflator made by I

Modality made by H
14

Our value-added service
Support to use devices properly[Pre operation][During operation][Post operation]

Confirm operation plan

Stand by in case ofemergency

Collect and return
unused devices
Invoice, replenishand control inventory

Select optimal devices
depending on clinicalcasesExplain how to use
devices properly,determine spec, anddeliverPTCA
Balloon Catheter15

Our value-added service
Support to increase hospital value[Functionalupgrading]Proposal of the latest
technology and products
Proposal of capitalspending for advanced care
Support to recruit
medical professionals[Marketing]Research ofcatchment area
Proposal of target
areas and fields
Proposal of measures togather and increase
patients[Profitabilityimprovement]
Proposal for efficient
operations
Proposal for cost
reductions

16

Consolidated Forecasts to March 2020

Sales
Operating profit
Recurring profit
Net profit
EPS (yen)
DPS (yen)(¥mil)YoY (%)(%)

64,000
2,590
2,590
1,820
63.40
33.00

-8.3

100.0

-20.6

4.8

-20.7

4.8

-31.1

3.4

17

Forecast highlights

Sales(¥mil)

69,77564,000FY 3/2019-8.3 %

YoY

Sales to a major customer(a hospital chain) dropped
from June (¥7.4bn)
2.7% negative impact from thereimbursement price revisionin 2H (¥0.9bn) etc

FY 3/2020E18

Sales impact
by the reimbursement price revision
Segment

Assumedimpact(%)

Percutaneous Coronary Intervention (PCI)-6.1Cardiac Rhythm Segment (CRS)-3.3

Cardiac Vascular Segment (CVS)-0.4

Percutaneous Peripheral Intervension (PPI)-4.1

Brain Surgery-0.4

Others

-0.2

Total

-2.7

Note: Calculated based on reimbursement prices, sales volume and product mix on 2H to FY 3/201919

Outline of the reimbursement
price revision
Segment

PCIItems

PPI2018(Oct)
38
173
84

831
3,040
4,140
3,060
133
637
1,300
1,090

763
2,950
3,990
3,120
126
649
1,320
1,110

- 14.3- 10.4
- 5.9
- 8.2
- 3.0
- 3.6
2.0
- 5.3
1.91.5
1.8Hea rt va lve for Tra ns ca theter Aortic Va lve Impla ntation(TAVI) (Ba lloon-expa nda ble)

4,430

4,510

1.8Heart valve for TAVI (self-expanding)
PTA Ballon Catheter
Peripheral Vascular Stent
Peripheral DES (Drug Eluting Stent)

3,670
60
179
229

3,740
56
175
233

1.9- 7.3- 2.2
1.7

Pacemaker
ICD (Implantable Cardioveter Defibrillator)

CVS

2018(Apr)

Change (%)

45
193
89

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

CRS

Reimbursement prices (¥000)

CRTD (Cardiac Resychronization Therapy Difibrillator)

Subcutaneous Implantable Defibrillator (S-ICD）
Ablation Catheter
Cardiac CryoAblation Catheter
Stent graft (abdomen）
Open Stent graft

20

Sales breakdown by segment
FY 3/2020(¥mil)

YoY(%)% of sales

Percutaneous coronary intervention (PCI)

19,750

-7.4

30.9%

Cardiac rhythm segment (CRS)

17,180

-2.5

26.8%

Cardiac vascular segment (CVS)

8,990

-8.0

14.0%

Percutaneous peripheral intervension (PPI)

3,380-2.4

5.3%

Brain surgery

2,390-3.9

3.7%

Diabetes mellitus segment (DMS)

2,090

+14.7

3.3%

Large-sized medical equipment

4,380-34.5

6.8%

Others

5,840

-11.4

9.1%

64,000-8.3

100.0%TOTAL

21

Forecast highlights

OperatingYoY-20.6%
profit(¥mil)

Gross profit margin
12.8% +0.4pp YoY- Price negotiation in proportion to new

3,261
2,590

reimbursement prices- Cost reduction by bulk purchasing

SG&A ¥5.59bn +4.5% YoY- Total number of employees
536 → 560
(Mar 2019) (Mar 2020E)

FY 3/2019

FY 3/2020E22

Forecast highlights

Net profit-31.1%YoY

Absence of negative goodwill (¥278mil to FY3/2019)
Income from silent partnership investment (¥82mil)(¥mil)

Capex

2,640

1,820

¥130 milvs. ¥143mil for FY 3/2019
Depreciation¥220 milvs. ¥237mil for FY 3/2019
FY 3/2019

FY 3/2020E
23

Dividends
FY ending March 2020
Initial estimate unchanged

payout ratio (%)
dividend per share (¥)

52.0
34.8

33
32

FY 3/2019

33

yen（)

payout ratio
52%

FY 3/2020E24

New product
Boston Scientific‘WATCHMAN™’
Left atrial appendage closure device
Device to prevent migration ofblood clots, reducing the riskof stroke and systemicembolismFeb 2019：ApprovalSep 2019：Launch with reimbursement priceLeft atrial
appendage© 2019 Boston Scientific Corporation. All rights reserved.

25

Major products
Segment

Disease

ProductPCI・Myocardial
infarction
・ Angina
Pacemaker

CRS・Abnormal
cardiac rhythm

Implantablecardioverter
defibrillator（ICD）

Stent graft

CVS
PPI/

Brain
surgery

DMS/

Intravascular ultrasound(IVUS) catheter

Drug-eluting stent (DES)

PTCA balloon catheter

Cardiacresynchronization
therapydefibrillator(CRTD)

Transcatheter aortic valveAblation 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)26

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

Operating profit

Operatingprofit:¥mil

Sales:¥mil

20,00015,00010,0005,000

19,1352,000
18,776
17,076
16,874
16,067
16,204 15,988
15,547 15,182
15,875
14,49914,412
1,500
13,908
14,571
14,37013,862
14,023
13,05913,288
1,062
13,69013,223
11,957
12,582922
881
11,407
833 794806
805 842
11,630783
757 700 1,000739 788
722
10,822712703
696688 739
681647595564505 545
4465001Q

2Q 3Q 4Q 1Q

2Q 3Q 4Q 1Q

2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

FY 2014/3

FY 2015/3

FY 2016/3

FY 2017/3

FY 2018/3

FY 2019/3

0

FY 2020/3= Year of reimbursement price revisions

27

Share price(Yen)

1,900

May 2014
TSE 2nd section
1,600Sep 2014

TSE 1st section
1,300

1,000

Effective onJanuary 1st, 2017

Dec 2013
360,000
Share selling

Stock split 1 : 2700Mar 2015
1 mil share selling

株式売出目論見書4002013
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 5 6 7 8 91011
28

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