mascot character
ＥＭＭＡResults of Operations for
March 2020, 3 rd Quarter

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.

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

II. “March 2020 third 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. Forecast for the fiscal year ending March 2020
ix. Market Share and Number of Customers
x. Shareholder returns
Supporting Data
Kimiko Date ×YONEX PROJECT～Go for the GRAND SLAM～
Shared Information System Foundation
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Ⅰ. ⅰ. Market environment
Pharmacies
 Influence of the April 2020 revision to medical fees: The effects were not as severe as the previous revision, but
pharmacies with a high concentration of prescriptions from specific medical institutions, such as on-site pharmacies,
pharmacies that handle a large number of prescriptions and chain pharmacies will be affected.
 Wholesale-price negotiations with various drug wholesalers relating to new drug prices is resulting in increased
difficulties in pharmacy administration. (Distribution improvement guidelines) Due to changes in the pharmacy business environment, major pharmacy chains are transitioning to a holding company
system one after another, and the various companies are rapidly conducting organizational restructuring through M&A, etc.
 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 of Health,Labour and Welfare issued a notification to all administrative divisions dated April 2, 2019.)
Investments in automatization are proceeding accompanying introduction of robotics and AI technology: Positive factor forthe industry

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Ⅰ. ⅰ. Market environment
Clinics
 The government aims to promote proliferation by conducting online medical system revisions.
 Rate of proliferation of electronic medical records at clinics: Just over 40%⇒Most newly opened businesses adopt an electronic medical record system, and a cloud-based electronic medicalrecord system is also under consideration.

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.
⇒Introduction of lucrative mechanisms: Investment in robotics and systems

4 Increase in large-scale chain welfare facilities
 Symbiotic-type services have been newly established in order to make it easier for elderly and disabled individuals toreceive services at the same office.

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Ⅰ.ⅱ.Measures of third half for year ended March 31 2020
Marketing We have participated in various exhibitions and posted on various forms of media within the clinic industry, pharmacy
industry, and nursing care/welfare industry.
 We have been conducting marketing activities that make use of “Medpeer,” a community site for physicians.
 We expanded sales channels through establishment of “MAPs Direct,” an e-commerce site for system sales.
 We have been promoting new contracts through new products (MAPs Series) as well as replacement from competitors.
⇒ Shipping of MAPs for CLINIC and MAPs for PHARMACY is in full swing We built a sales structure exclusively for nursing care chains, and we have been actively expanding our business toinclude chain offices in the nursing care/ welfare market by making use of M-Win Soft Co., Ltd. assets.
 We have been promoting “Prescription Reader,” a prescription input support system jointly developed with GLORY LTD,
among ReceptyNEXT customers.
⇒ This has expanded subscription-based earnings.
 We expanded sales channels in our OEM and agency businesses.
 Application of M&A
 We have been conducting activities in collaboration with CSI Co., Ltd. aimed at enabling cooperation between
hospitals and pharmacies.

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Ⅰ.ⅱ.Measures of third half for year ended March 31 2020
Development activities
 We expanded the functions of MAPs for CLINIC and MAPs for PHARMACY, which have already been released.
 We are strengthening product competitiveness while developing MAPs for NURSING CARE, a nursing care/welfaresystem.
 We are contributing to standardizing the industry and reducing costs through the OEM provision of shared engine:
Expanding to other companies in the same field Development of a new headquarters system: Capable of linking with the systems of other companies

Social contribution activities
 Sponsor participation in the Kimiko Date x YONEX PROJECT We contribution to the “Artificial Intelligence in Healthcare” course at the University of Tokyo.
 We cooperated with Ueda Pharmacist Association in “Creation of mechanisms to improve guidance based on
information sharing and pharmaceutical knowledge from pharmacists,” a model business under consideration by
the Ministry of Health, Labour and Welfare.

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Ⅱ. ⅰ. Highlights of Financial results
March 2020 3rd Quarter Financial results（consolidated）

March 2020 3rd Quarter Topics□ Sales increased accompanying expansion of our system businesses targeting nursing care service providers.
□ This contributed to sales due to a last-minute surge in demand for hardware replacement accompanying the termination of support forWindows 7.

□ Subscription-based sales have increased bullishly. (Pharmacy and medical segments)□ We experienced a drop in profits due to a reduction in gross profits accompanying changes in hardware provision methods.
(Maintenance is guaranteed by the manufacturer.)□ We commenced shipping MAPs for CLINIC from Osaka and Tokyo, and we are in turn expanding operations into other administrativedistricts.

□ In collaboration with GLORY LTD, we launched “Prescription Reader,” a prescription input support system, and we are proceeding withimplementation.

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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

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%20212022

2023-15.0%

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

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Ⅱ. ⅳ. By Segment Sales/Operating Profits※In our nursing care system business, we acquired the former Janis Corporation from February 2019, and we are turning M-Win Soft Co., Ltd. into a subsidiary.
※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.
 IT Systems for long-term care/welfare･･････Sales have greatly increased accompanying expansion of our system
Businesses targeting nursing care service providers.

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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.

14

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

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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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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 5.5％

Number of customers ：16,207
Target population：50,000
Mid-term goals：25,000

Number of customers ： 2,777
Target population：90,000
Mid-term goals：10,000

IT Systems for Pharmacies

Number of customers ： 13,665
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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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 and January 1st, 2020 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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Supporting Data

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Kimiko Date × YONEX PROJECT～Go for the GRAND SLAM～
Kimiko Date, our company’s ambassador, is participating as an instructor in “Kimiko Date ×
YONEX PROJECT ~Go for the GRAND SLAM~,” a tennis training program for young top-class female
elementary and junior high school girls 15 years old or younger (consisting of four tennis athletesselected via written applications and auditions).
Our company has become an official sponsor of this program.

©YONEX
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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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CommonMasterCommonEngine21

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.