mascot character
ＥＭＭＡ

March 2020 First Quarter
Financial results

EM SYSTEMS CO., LTD.
(TSE 1st Section: 4820)ＥＭ ＳＹＳＴＥＭＳ
ＣＯ ．，ＬＴＤ．
These documents have been translated from Japanese originals for reference Purposes only.
In the event of any discrepancy between these translated documents and the Japanese originals, the originals shall prevail. The Company assumes
no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translations.

ContentsI.

“March 2020 First Quarter Financial results”
i.
Highlights of Financial results
ii. Changes in consolidate results by fiscal yeariii. Balance Sheet Summary
iv. By Segment Sales/Operating Profitsv. By Segment Sales Breakdown
vi. IT Systems for Pharmacies（Quarterly Sales /Moving Annual Total）
vii. IT Systems for Clinics（Quarterly Sales /Moving Annual Total ）viii. Market Share and Number of Customers

II. “Business Environment /Business Plan for financial year ended March 31 2020”i.
Business Environmentii. Measures of first half for year ended March 31 2020
iii. Forecast for the fiscal year ending March 2020
iv. shareholder returns
v. Shared Information System Foundation
vi. “MAPs Series” Product Positioning
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2

Ⅰ. ⅰ. Highlights of Financial results
March 2020 1st Quarter Financial results（consolidated）(Millions of yen)
2019 March 1Q

2019 March 1Q

Compared toestimated results

Sales

3,192

3,284

2.9%

Operating Profits

684

544

(20.5%)

Ordinary Profits

846708(16.3%)Net Income

569

471

(17.1%)March 2020 1st Quarter Topics□ On May 15, 2019, we issued a press announcement regarding MAPs for PHARMACY, a pharmacy-oriented business support system.
□ From May, in collaboration with GLORY LTD, we began development of a system that automates input of prescription information.
□ Both sales and gross profits in our long-term care/welfare business have exceeded initial plans. M&A conducted during the previous fiscal
term greatly contributed to results.

□ Initial costs decreased due to changes to HW provision method s and the number of Recepty NEXT sales greatly increased due toacquisition of major chain stores. (From 135 cases to 205 cases, a 51.8% increase over the same period in the previous year.)□ On July 1, we acquired all shares in Pop-Creation Co., Ltd. (thus acquiring sole ownership of the subsidiary), which conducts clinic andpharmacy-oriented business in the northern region of Kyushu.

□ Subscription-based sales have increased bullishly. (Pharmacy and medical segments)
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3

Ⅰ. ⅱ. Changes in consolidate results by fiscal year
Flow-Based

Fully Stock-Based

Partially Stock-Based

Values after March 2020are planned values.

Sales(Millions of yen)
Financial year ended March 31

7,827

7,315

9,573

11,395

11,2888,7769,818

8,202

9,013

10,257

11,36911,257

13,19913,676

13,953

13,133

13,174

14,603

16,31018,045

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Operating Profits

Major factors in decreased operating profits regarding March 2019 and March 2020.
（1）Change to hardware provision method
Reduced gross margin ratio(198) million yen
Decrease in unit sales price.
(176) million yen（2）Increase in manufacturing cost
(512 ) million yen （including depreciation (324 ) million yen )（3）Increase in selling, general and administrative expenses(344 ) million yen （ including Marketing cost(233 ) million yen )
622

455

1,317

1,740

1,010

-1,317-721

86

835

1,209

1,672

1,232

1,861

2,597

3,063

2,622

1,358

2,003

3,243

4,552

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Profit Margin
ratuo

19.0%

20.0%

14.7%

15.3%

25.2%

22.0%
19.9%
10.3%

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

13.7%

2021

2022

2023

-15.0%

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4Ⅰ. ⅲ. Balance Sheet Summary （Units: Millions of yen）
Major YoY Changes
March 31 2019

March 31 2020
1st quarter

22,351

21,968(382)(1.7%)

Current assets

10,93010,469(460)(4.2%)

Fixed assets

11,421

11,49877

0.7%

Tangible fixed assets

1,676

1,669(6)(0.4%)

Intangible fixed assets

1,930

2,101

171

8.9%

Investments and other assets

7,814

7,727(86)(1.1%)

5,733

5,294(438)(7.6%)

Current liabilities

3,665

3,377(287)(7.8%)

Fixed liabilities

2,067

1,916(150)(7.3%)

16,618

16,67355

0.3%

16,536

16,59054

0.3%

Cumulative amount of othercomprehensive(46)(37)

9(20.4%)

Stock acquisition rights

128120(8)(6.7%)

AssetsLiabilities

Net assets
Shareholder's equity

YoY change YoY % change

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Ⅰ. ⅳ. By Segment Sales/Operating Profits※Segmented sales and operating profits and losses are the amounts before elimination of internal transactions between segments.
IT Systems for Pharmacies･･･Income and profits have fallen due to decreases in initial sales and gross profits accompanying
change to hardware provision method.
IT Systems for Clinics････････The number of MRN customers has steadily increased. Accompanying this, system usage fee
sales have also smoothly increased.
Other Businesses ･･･････････ Both sales and gross profits in our long-term care/welfare business have exceeded initial plans.
M&A conducted during the previous fiscal term greatly contributed to results.
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6Ⅰ. ⅴ. By Segment Sales Breakdown* Net sales by segment are the amounts before elimination of inter-segment transactions.

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Ⅰ. ⅵ. IT Systems for Pharmacies
Quarterly Sales （Units: Millions of yen）

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Ⅰ. ⅵ. IT Systems for Pharmacies
Moving Annual Total（Units: Millions of yen）
Moving Annual Total
7,000

6,500

6,000

subscription-based business

5,500

one-time-fee business

5,000

4,500

4,000

3,500
4Q

Mar 312016

1Q

2Q

3Q

Mar 31 2017

4Q

1Q

2Q

3Q

Mar 31 2018

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4Q

1Q

2Q

3Q

Mar 31 20194Q

1Q

Mar 312020

9Ⅰ. ⅶ. IT Systems for Clinics
Quarterly Sales （Units: Millions of yen）

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10Ⅰ. ⅶ. IT Systems for Clinics
Moving Annual Total（Units: Millions of yen）
Moving Annual Total
1,000

one-time-fee business
950

900

850

800

subscription-based business

750

700
4Q
Mar 31
2016

1Q

2Q

3Q

4Q

1Q

Mar 31 2017
one-time-fee business

2Q

3Q

Mar 31 2018

4Q

1Q

2Q

3Q

Mar 31 20194Q

1Q
Mar 312020

subscription-based business

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11Ⅰ. ⅷ. Market Share and Number of Customers
IT Systems for Clinics

IT Systems forlong-term care/welfare

Market share32.3％

Market share 2.9％

Market share 5.4％

Number of customers ：16,137
Target population：50,000
Mid-term goals：25,000

Number of customers ： 2,650
Target population：90,000
Mid-term goals：10,000

IT Systems for Pharmacies

Number of customers ： 13,500
Target population：250,000
Mid-term goals： 10,000*1 The number of customers indicates the number of pharmacies and clinics that purchased our system products.
*2 The above target populations represent the number of pharmacies and clinics that we considered as our potential customers, and differ from theactual number of registered pharmacies and clinics.
(as of June 30 , 2019)*3 Mid-term goals are as announced in May 2018.

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12

Ⅱ. ⅰ. Business Environment
Market environment
Pharmacies
 Due to the influence of the simultaneous reforms to medical fees and nursing fees in April 2018,

our major pharmacy

operations business has seen decreased profits across the board
 Due to changes in the pharmacy operations environment, pharmacies chains have been hurriedly transitioning toholding companies restructuring through M&A, etc., one after another Wholesale-price negotiations with various drug wholesalers relating to new drug prices is resulting in increased

difficulties in pharmacy administration. (Guidelines from Ministry of Health, Labour and Welfare) It is possible for non-pharmacists to conduct picking and packaging operations (based on pharmacist instructions)(The General Affairs Division of the Pharmaceutical Safety and Environmental Health Bureau within the Ministry ofHealth, Labour and Welfare issued a notification to all administrative divisions dated April 2.)

Clinics

 The government has announced efforts toward spreading and expanding online examinations and online medication
instructions.

However they grow at a sluggish rise.

⇒ Online examinations・・・・・・The regulatory reform conference proposed raising medical fee prices
 Proliferation of electronic medical records has exceeded 40% in clinics

Long-term care/welfare The market is growing due to a decrease in the number of hospital beds and an increase in the number of new facilities
accompanying the aging of the population
 Increase in large-scale chain welfare facilities
 Symbiotic-type services have newly been established in order to make it easier for elderly and disabled individuals
to receive services at the same office
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Ⅱ.ⅱ.Measures of first half for year ended March 31 2020
 Acquisition of new customers or those replaced from competitors through our new product (MAPs Series)
 Active development of sales in the nursing care/welfare market utilizing the powerful business tool of EM Solutions
and M-Win Soft Commencement of development and improvement of product competitiveness in regard to MAPs for NURCINGCARE in our Nursing care/welfare business Contribution to industry standardization and cost reduction by provision of OEM through a common engine
 Active investment in branding Active development of marketing activities
 Shift of branch-based sales resources toward the medical and nursing care/welfare markets
 Collaboration with GLORY LTD. on a system to support input of prescriptions (Commencement of provision fromOct. 2019)
 Promotion of work-style reform and improvement of work productivity

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14Ⅱ. ⅲ. Forecast for the fiscal year ending March 2020
（Millions of yen）

Sales
Business for Pharmacy

Business for Clinic
Other Business
Adjustment

Operating Profits
Business for Pharmacy

Business for Clinic
Other Business
Adjustment

Ordinary Profits
Net Income

Fisical year ended
March 31 2019(actual)

Fisical year ended
March 31 2020
(forecast)

13,133
10,476
1,704
1,063
△ 109
2,623
2,389
2390(7)
3,248
1,971

13,174
9,423
2,202
1,648
△ 99
1,358
1,086258
20(7)
1,980
1,307

Compared toprevious year
0.3%
△10.1%
29.2%
55.0%
△9.3%
△48.2%△54.5%
7.9%－△2.8%△39.1%△33.7%※Segmented sales and operating profits and losses are the amounts before elimination of internal transactions between segments.

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15

Ⅱ. ⅳ. shareholder returns
Aim at a payout ratio of 30%
Introduction of a system of special benefits for shareholders(Targeting shareholders in continuous retention of one or more shares)

40 YEN

51.1%

Interim dividend

55%

Year-end dividend

30 YEN

Commemorative dividend

45%
37.6%
34.1%

payout ratio(consolidated)
25.2%

20 YEN

21.4%

25.7%

18.5

20.3%

35%

27.7%

191925%111115%

15.5
10 YEN

7.5
1.25

03.75

0 YEN

9.25
6.75

11.25

11.75

7.5

7.75
44

FY 2016

FY 2017

2.5

2.53.75

FY 2013

FY 2014

FY 2015

1211.55%
6.5

88-5%

FY 2018

FY 2019

FY 2020(estimated)*We conducted stock splits on April 1st, 2016 and March 1st, 2018 at a ratio of two shares per one ordinary share.
The aforementioned information assumes that each stock split occurred at the beginning of March 2013.
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16

Ⅱ.ⅴ. Shared Information System Foundation

Specialized Functions(Clinics & Pharmacies）

Pharmacy App

Clinic App(Medical Records)(Medication History, HQFunctions)

Nursing care/welfare App
CommonFunctions（Clinics & Pharmacies）

SpecializedFunctions（Nursing care/welfare ）Medical Exam. Hearing/ Prescription Bags /Pharmaceutical Info. / Inventory

Common Master/Contents(Medication/Prescription Check/Meal Recipes)

Counter Accounting/Receipt Billing（Medical Insurance, Nursing Insurance and Independent Local Aidfor Medical Expenses）

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CommonMasterCommonEngine17

Ⅱ. ⅵ . “MAPs Series” Product Positioning“MAPs Series” is the industry’s first ‘shared information system base’ that is broadly applicable

across the fields of clinics, pharmacies and long-term care/welfare.
Our ‘shared information system base’ possesses the following advantages.
 Cloud-based systems and system integration within healthcare fields (clinics, pharmacies and long-term care/welfare) enables
those engaged in clinics, pharmacies and long-term care/welfare to be linked together.
 Reduction in customer burden at time of introduction by enabling customers to procure desired equipment, learn how tooperate the system and decide initial settings, etc. on their own.
 Medical examination and interview functions that combine “information from family doctors (in close contact with patients)”
and “expertise in each field of medicine.” Functions that provide suggestions utilizing the latest technologies. (A feature in which the system offers suggestions to customers.)
 Functions to support creation of medical records, medication records, etc.
 Reduction in customer burden by realizing no-cost initial licensing and reduced monthly costs.

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18

Contact:
EM SYSTEMS CO., LTD.
IR Section, Corporate Planning Department
Shin-Osaka Brick Bldg.
1-6-1 Miyahara, Yodogawa-ku,
Osaka 532-0003, Japan
TEL: +81-6-6397-1998
FAX: +81-6-6397-1890

The contents in this presentation materials are based on assumptions judged to be valid and information available tothe Company’s management at the time they were prepared. The Company assumes no obligation to update or revise
any information, whether as a result of new information, future events or otherwise.

As forecasts contained herein are based on assumptions of numerous uncertain factors, actual results may differ
significantly from these forecasts for a number of reasons.