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ＥＭＭＡResults of Operations forMarch 2020, 1st Half

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.

To everyone who has suffered due to the heavy rains in 2019,
We would like to express our heartfelt sympathies to everyone
who has suffered due to typhoons and other heavy rains in 2019.
We pray that all victims are able to return to a peaceful lifestyle as soon as possible.

Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

2Contents
I.

“Business Environment /Business Plan for financial year ended March 31 2020”i.
Business Environmentii. Measures of second half for year ended March 31 2020

II. “March 2020 Second Half 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. Forecast for the fiscal year ending March 2020
ix. Market Share and Number of Customers
x. Shareholder returns
Supporting Data
Shared Information System Foundation

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Ⅰ. ⅰ. Business Environment
Market environment
Pharmacies
 The pharmaceutical businesses of major pharmacy chains have achieved a rapid recovery following the April 2018
simultaneous revision to medical and long-term care fees.
 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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Ⅰ.ⅱ.Measures of second half for year ended March 31 2020
Sales strategies
 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 Release of our prescription input support system, which we developed jointly with GLORY LTD.
 Expansion of sales channels by establishing an e-commerce site for system sales Shift of branch-based sales resources toward the medical and nursing care/welfare markets
 Enhance the consumables lineup and promote sales of consumables through entering into a cooperative businessagreement with AS ONE Corporation.

Development activities
 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 engineMarketing Active investment in branding Active promotion of advertising activities

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Ⅱ. ⅰ. Highlights of Financial results
March 2020 1st Half Financial results（consolidated）

March 2020 1st Half Topics□ Increase in sales due to a last-minute surge in demand for hardware replacement accompanying the consumption tax hike andtermination of support for Windows 7□ 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 304 cases to 448 cases, a 47.4% increase over the same period in the previous year.)□ Subscription-based sales have increased bullishly. (Pharmacy and medical segments)□ From May, in collaboration with GLORY LTD, we began development of a system that automates input of prescription information.
□ 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.

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6Ⅱ. 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

11,288

8,776

9,818

8,202

9,013

10,257

11,36911,257

13,19913,676

13,953

13,133

13,174

14,603

16,31018,045

200420052006

20072008

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

1,7401,010-1,317-721

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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Ⅱ. ⅲ. . Balance Sheet Summary （Units: Millions of yen）

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8Ⅱ. ⅳ. By Segment Sales/Operating Profits(Millions of yen)March 31 2019
1st Half

March 31 2020
SalesSales

OperatingProfits

Results

1st Half
Operating Profits

Increase/ Increase/decrease decreaseamountsrates

Results

Increase/ Increase/decrease decreaseamounts
rates

IT Systems for Pharmacy

5,263

1,365

5,484

220

4.2%

960(404) (29.6%)

IT Systems for Clinic

871

122

924

52

6.1%

94(27) (22.2%)

Other Business513(17)

729

216

42.2%

(139)

(122)

-※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 ････････････Drop in initial sales of Hibiki and Symphony due to switching our business model from onetime fee-based to subscription-based

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Ⅱ. ⅴ. . By Segment Sales Breakdown* Net sales by segment are the amounts before elimination of inter-segment transactions.

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

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Ⅱ. ⅵ. IT Systems for Pharmacies
Moving Annual Total（Units: Millions of yen）

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Ⅱ. ⅶ. IT Systems for Clinics
Quarterly Sales （Units: Millions of yen）Copyright (C)2019 EM SYSTEMS Co ., Ltd. All Rights Reserved.

13

Ⅱ. ⅶ. IT Systems for Clinics
Moving Annual Total（Units: Millions of yen）

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14

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

※Segmented sales and operating profits and losses are the amounts before elimination of internal transactions between segments.

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15

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

IT Systems forlong-term care/welfare

Market share32.4％

Market share 3.1％

Market share 5.4％

Number of customers ：16,195
Target population：50,000
Mid-term goals：25,000

Number of customers ： 2,756
Target population：90,000
Mid-term goals：10,000

IT Systems for Pharmacies

Number of customers ： 13,581
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 September 30 , 2019)*3 Mid-term goals are as announced in May 2018.

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16

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)

0*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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17

Supporting Data

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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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CommonMasterCommon
Engine19

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.