SMS CO., LTD.
(Securities Code: 2175/TSE 1st section)

Presentation Material for Investors
Financial Results Summary for the First Quarter of the
Fiscal Year Ending March 31, 2020 (the 17th Fiscal Year)

July 30, 2019

Table of Contents© SMS CO.,LTD.

1

Q1 FY03/20 Consolidated Financial Results P3-P7

2

FY03/20 Strategy

P9-P41

4

Appendix

P43-P591© SMS CO.,LTD.

1

Q1 FY03/20 Consolidated Financial Results P3-P7

2

FY03/20 Strategy

P9-P41

3

Appendix

P43-P59

2

3

Historical Financial Results and FY03/20 Forecast

 Expect to achieve growth in both sales and profits for the 16th consecutive
year since our establishment.
37,557

Trends in net sales and ordinary income [JPY million]
Net sales (in black)30,837

Ordinary income (in blue)
6,854

26,611
5,979

23,054
5,007

19,0694,430
15,056

3,509

12,046
10,181
8,692
7,618
1,734
1,530
1,266

7,172
5,177
1,238
58

-5

383

835
49

2,340

2,693

1,990

1,545 2,715
415
269
108

FY03/04 FY03/05 FY03/06 FY03/07 FY03/08 FY03/09 FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16 FY03/17 FY03/18 FY03/19 FY03/20[Forecast]© SMS CO.,LTD.

3

１

Q1 FY03/20 Consolidated Financial Results Marked a steady progress according to the FY03/20 guidance, achieving
growth in both sales and profits.
 Q1 income growth was limited due to the hiring of a large number of new
employees including career partners.
Consolidated P/L Statement [JPY million]
Q1 FY03/19
Actual© SMS CO.,LTD.

Q1 FY03/20
ActualYoY
ChangeNet Sales

8,067

9,379

＋16%

Operating
Income

1,376

1,433

+4%

Ordinary
Income

2,090

2,321

+11%

Net
Income

1,644

1,799

+9%
4

1

The Career Segment (Q1)
 Segment sales increased 20% YoY.
 Elderly Care Career grew strongly.
 Succeeded in hiring 200 career partners in Q1 as planned.
YoY Comparison of Sales[JPY Million]_
Elderly Care
CareerMedical Care
CareerTotal

FY03/19

FY03/20

YoY
Change

1,988

2,862

+44%

4,053

4,364

+8%

6,041

7,226

+20%

Highlights
Elderly Care Career• Recruiting Agent (RAG) for care workers recorded strong growth mainly due to the increase in thenumber of career partners.
Medical Care Career• RAG for nurses marked a steady progress.
• RAG for dietitians and WILLONE*1 grew significantly.
• RAG for childcare workers, a new business launched in Oct. 2018, grew as planned.
© SMS CO.,LTD. *1. WILLONE provides career services for Judo therapists and licensed masseurs such as finger pressure practitioners, acupuncturists, and moxibustion practitioners.

5

1

The Elderly Care Operators Segment [Kaipoke] (Q1)
 Segment sales increased 22% YoY.

YoY Comparison of Sales[JPY Million]_
Elderly Care
Operators[Kaipoke]

FY03/19

FY02/20

905

1,109

YoY
Change+22%

Highlights•

The number of Kaipoke memberships increased steadily.
- 25,000 service offices [17,250 locations*1] as of Jul. 1, 2019.

•

Sales of optional add-ons such as additional tablets, smartphones, and factoring service increased.

*1. # of locations: the number of elderly care service office locations # of service offices: the number of elderly care services provided based on the public elderly care insurance
scheme e.g. When an operator provides two types of elderly care services, home care support service and home-visit elderly care, at one specific address, the number oflocations is counted as one and the number of service offices is counted as two. Kaipoke’s subscription fee is charged at each membership location. Normally, the number oflocations is smaller than the number of service offices.

© SMS CO.,LTD.

6

1

The Overseas Segment (Q1) Both MIMS's existing businesses and Global Career Businessproceeded as planned.

YoY Comparison of Sales[JPY Million]_

Overseas

FY03/19

FY02/20

872

807

YoY
Change▲7%Highlights•

Sales grew YoY excluding factors such as the impact of the consolidation timing*.
* Reorganized Medilabs Co.,Ltd.*1 under MIMS group in Mar. 2019. The sales of Global Career
Business decreased YoY because MIMS P/L statement is consolidated with a three-months
delay and Medilabs will be consolidated from Q2 this fiscal year.

*1. Former “Senior Marketing System Korea Co., Ltd.”, a company providing career-related services for nurses in Korea.

© SMS CO.,LTD.

7

© SMS CO.,LTD.

1

Q1 FY03/20 Consolidated Financial Results P3-P7

2

FY03/20 Strategy

P9-P41

3

Appendix

P43-P59

8

2

Our Mission

We aim to improve the quality of life
by providing information infrastructure
for aging society.

© SMS CO.,LTD.

9

2Business Domains in Aging Society Define our business domains in aging society as Elderly Care,
Medical Care, Healthcare and Senior Life.

Senior Life
Healthcare

Elderly Care

© SMS CO.,LTD.

Medical Care10

2

Where We Operate Started our business in Japan and have established a leading position in thisattractive market with an enormous growth potential.
 Expanding our businesses into the growing Asian and Oceanian markets.

© SMS CO.,LTD.

Japan

Thailand

Korea

Vietnam

China

Philippines

Hong Kong

MyanmarTaiwanIndia

Singapore

Australia

Malaysia

New ZealandIndonesia

UAE

11

2

Market Size

 The healthcare-related markets are expanding rapidly because of the aging
population in Japan and the economic growth in Asia.

Healthcare Expenditure*1 in Japan

Healthcare Expenditure*2
in Asia and Oceania*3
250 JPY trillion

96 JPY trillion
33
57
Healthcare(Non-insurance)

41
7

115

10
49
38

Medical Care28

Elderly Care

6

9

15

2005

2015

2025

© SMS CO.,LTD.

30*1. Source: SMS estimates based on MHLW, METI, and WHO statistics*2. Source: 2005/2015-WHO 2025-SMS estimate *3. Excluding Japan

2005

2015

2025

12

2

Information Infrastructure Information infrastructure is a platform to support people in aging society throughinformation.
 Aging of society causes information gaps related to elderly care, medical care,healthcare, etc., creating enormous business opportunities for us.

The elderly inneed of careand his/her family

The elderly
Prevention ofdementia

Dietitians
Onlinecommunity

Qualification
Physicaltherapists

Nurses© SMS CO.,LTD.

Housing
information

Elderly care
operators
Management
support

Recruiting
Agent

Recruiting
Ads
Clinics

Hospitals
Care workers

13

2

Improving the Quality of Life

 Address social issues that arise in aging society and contribute to improve thequality of lives of workers, operators, and end users.

End users

Workers• Variety of job options• Best workplace• Improved skills• Motivation for work

© SMS CO.,LTD.

• High-quality elderly
care/medical care
• Extension of healthy
life expectancy• Better decision making

Operators• Efficient management• Better service quality• Hiring and retention of
professional workers• Enhanced productivity

14

2

Business Segments

 Operate Elderly Care Career, Medical Care Career and Kaipoke as our corebusinesses in Japan.
 Develop new businesses mainly in Healthcare and Senior Life.
Business Domains
Healthcare

Stakeholders

Workers

Operators

Business
Development(Healthcare)

MedicalCare

Elderly
CareMedial Care
CareerElderly Care
CareerKaipokeSeniorLife

Business
Development(Senior Life)End users© SMS CO.,LTD.

Actively develop new businesses
in other areas.

15

2

Growth Track Medical Care Career has been driving our growth since our establishment.
 Elderly Care Career, Kaipoke and Overseas businesses are growing as the
new pillars of our business portfolio.
Strategic Units

Breakdown of Net Sales(JPY million)

Career Business - Medical Care Career
・ No.1 recruiting service provider for medical care workers

3％18％

Career Business - Elderly Care Career
・ No.1 recruiting service provider for elderly care workers

13％

Kaipoke・ Management support platform
for elderly care operators

6％

Overseas 106(1％)

New Business
820 (8％)

26％

13％
17％

Overseas Business (MIMS)

・ Asia’s No.1 drug information service provider
・ Expanding career business from Asia to global

14％

Kaipoke360 (4％)

15％
40％
72％

50％

New Business・ Developing new businesses mainly in Healthcare
and Senior Life
© SMS CO.,LTD.

16

2Growth Scenario

 On top of the solid expansion of Medical Care Career, we accelerate thegrowth of Elderly Care Career, Kaipoke, and Overseas Business.
 Actively develop new businesses to create next pillars of our businesses,
which will further drive our long-term growth.

Growth of New Business
Growth of Overseas Businessdriven by MIMS
Growth of Kaipoke

Growth of Elderly Care Career

Growth of Medical Care Career

Present© SMS CO.,LTD.

Future17

Career Business© SMS CO.,LTD.

18

2

Environment︓Care workers and Nurses

 Labor shortage continues to be a serious issue despite the increasing
numbers of care workers and nurses.
Number of care workers and their turnover rate*1

Number of nurses and their turnover rate *3# of workers CAGR︓4％# of workers CAGR︓2％

1,557K

16.1%

2011

1,696K

17.0%

2012

1,773K

16.6%

2013

1,867K

16.5%

2014

1,925K

16.5%

2015

1,936K

16.7%

2016

1,975K

1,496K

1,538K

1,572K

1,603K

1,634K

1,660K

1,683K

10.9%

11.0%

11.0%

10.8%

10.9%

10.9%

10.9%

2011

2012

2013

2014

2015

2016

2017

16.2%

2017

Jobs-to-applicants ratio of care workers*2

Jobs-to-applicants ratio of nurses*2

4.0

4.0

Care workers
3.0
2.0

2.0

All industries

1.0
0.0

Nurses3.0

All industries

1.0

2012

© SMS CO.,LTD.

2013

2014

2015

2016

2017

2018

0.0

2012

2013

2014

2015

2016

2017

*1. Sources︓Number of workers – MHLW; Turnover rate – Care Work Foundation*2. Source : MHLW *3．Sources︓Japanese Nursing Association; Number of workers in 2017 – SMS estimate

2018

19

2

Strategy of Career Business Contribute to mitigate labor shortage problem by expanding the market sharesof the existing services, diversifying service offerings, and increasing thevariety of occupations we cover.
Services② Diversify
services① Expand market share＋αRetention
supportCommunity
Education
Temp staffing

CareerServices

RAD*1③ Increase occupation
coverage

RAG*2

Occupations
NursesAllied health Care managers
professionals
PT/OT/ST© SMS CO.,LTD. *1. Recruiting Ads *2. Recruiting Agent

Care
workers

Therapists

Childcare
workers

＋α

20

2

① Expand Market Share As a pioneer, we created attractive markets of recruiting services for elderly
and medical care workers and established No.1 positions.
 Continue to increase the market shares by leveraging a large number of both
healthcare professionals (HCPs) and job orders we have accumulated.
Operators

HCPs
Created the market as a pioneer
andlead the market as No.1 player
Recruiting Agent (RAG) for nurses
No.1 share
RAG forallied health professionals
No.1 share
RAG for care workers
Leading market expansion
Accumulated online
marketing know-how byconducting it in-house© SMS CO.,LTD.

Develop strong relationships
with operators by introducing
many job seekers

21

2② Diversify Services - Demand and Supply of Care Workers

 The labor shortage in elderly care is worsening due to the rapid aging of
population, the gap between demand and supply of care workers being
expected to reach 340,000 in 2025.
Care Worker Demand-Supply Forecast*12.45 million
The gap
betweendemand andsupply will
expand to0.34 million.

Demand forcare workers

2.08 million

2.11 million

0.1
million1.98 million

2017© SMS CO.,LTD.

Supply ofcare workers

2018

2019

2020

*1. Source: MHLW. 2017 - SMS estimate.

2021

2022

2023

2024

2025

22

2

② Diversify Services - Strategy of Elderly Care Career Improve the shortage of workers by providing diverse services.
• Promote new entry from other industries in addition to support for changing jobs.
• Contribute to improve productivity of workers and reduce their turnover througheducation and retention support.

Other
industries

Recruiting
Ads

Care
workers
SupportjobchangePotential
workers
Promotenew entry

Promoteentry

Elderly care
operators

Otherindustries

Recruiting
Agent

Qualification
obtaining support
Certification course
Schoolinformation

Introduce
best
workplace

Improveproductivity
Supportretention

Temp staffing
Accumulate
information© SMS CO.,LTD.

Accumulate
information

Workers
platform

Operators
platform23

2③ Increase Occupation Coverage Enter promising markets to develop new growth businesses following
Recruiting Agent (RAG) for nurses and elderly care workers.
 Started career services for Judo therapists/licensed masseurs*1 in FY03/18 by
M&A and launched RAG for childcare workers in FY03/19 by ourselves.
Jobs-to-Applicants Ratios*3

Number of Workers*2 [million]
for Occupations in the Career Segment
Care
workers

4.0

Childcare
workers
NursesJudo therapists

3.0

1.98
1.66

ChildcareJudoworkers Dietitians/
therapists/
Registered
Licenseddietitians
0.50
masseurs

0.24

0.21

2.0

Care workers
PT
OT
ST

0.20

1.0

Care
managers

0.16

All industries

0.0
2012

2013

2014

2015

2016

2017

The jobs-to-applicants ratio for childcare
workers has risen in metropolitan areas
such as Tokyo (over 5 times)*1. Finger pressure practitioners, acupuncturists, and moxibustion practitioners*2. Sources: Care workers/Care managers: MHLW 2017, Nurses: Japanese Nursing Association 2016, Childcare workers/Dietitians/Licensed dietitians:
SMS estimates based on MHLW data 2017, Judo therapists/Licensed masseurs: SMS estimate based on MHLW data 2016, PT/OT/ST: MHLW 2017
*3. Source: MHLW© SMS CO.,LTD.

24

2③ Increase Occupation Coverage - Judo Therapists/Licensed Masseurs*1

 Acquired WILLONE in Nov. 2017.
 Accelerate its growth by applying SMS’s know-how and expanding Recruiting
Agent (RAG) service.

• Expand RAG• Apply know-how of jobseeker attraction andmatching

Workers

RAG

Strengthensynergies
Expandemployment
supportJudo therapists
Licensed masseurs

RAD*2

Qualification
obtaining support
School

*1. Finger pressure practitioner, acupuncturist, andmoxibustion practitioner*2. Recruiting Ads© SMS CO.,LTD.

Textbook for thenational exam

Operators

Increase
introduction
Acupuncture
clinics
Rehabilitation
facilities

25

2

Growth Scenario

 The Career Segment as a whole has huge growth opportunities.
 Increase in the market shares of existing services, rapid expansion of Elderly
Care Career and services for newly-covered occupations drive the growth.
Current and future sales by service*1*2: Sales for FY03/19: Estimates of the
future sales
Full-scale expansion
started in FY03/17

RAG forchildcare workers

RAG for Nurses

Launched in
FY03/19

RAG for Care workers
RAG for other co-medicals

Temp staffing
RAG/RAD for
Judo therapists etc.

RAD for care workers
School
RAG for PT/OT/ST

Launched by acquiring
WILLONE in FY03/18
RAD fornursesRAD for newlygraduated nurses

RAG for care managers

Elderly Care Career︓7,974 JPY million*3© SMS CO.,LTD.

Medical Care Career︓12,423 JPY million*3*1. Career businesses for doctors and pharmacists are operated by M3 Career, Inc., a JV between M3, Inc.(51%) and SMS (49%).
*2. RAG: Recruiting Agent RAD: Recruiting Ads *3. Sales for FY03/19

26

Kaipoke© SMS CO.,LTD.

27

2

Environment︓Elderly Care Operators

 The number of elderly care operators continues to increase as the populationages.
The number of elderly care service offices andthe elderly population*1# of elderly care service offices CAGR:5%
33.0

33.9

34.6

35.2

35.6

31.9
29.6

29.8

30.8
223
199

168

129

176

135

233

239

244

(million)(thousand)

210

186

143

153

162

172

179

186

189

39

41

43

46

48

51

54

54

55

2010

2011

2012

2013

2014

2015

2016

2017

2018

Not included in Kaipoke coverage

Operators that Kaipoke covers*2
・Home care support services
・Home-visit elderly care・Day care・Home-visit nursing
・Outpatient rehabilitation etc.

Operators that Kaipoke doesn’t cover *2・Commuting care for elderly with dementia
・Short stay・Daily life care for elderly in specific facilities
・Small-sized multifunctional in-home care・Facilities etc.

Included in Kaipoke coverage*1. Sources︓Number of elderly care service offices – MHLW; The elderly population – MIC© SMS CO.,LTD. *2. As of Mar. 201928

2

Kaipoke’s Business Model Kaipoke is a management support platform provided in the form of SaaS,
which offers more than 40 services to improve the management efficiency ofelderly care operators.
Management support platform
ServiceprovidersPartner A
Partner B
Partner C

Operators

Servicedevelopment
and provision

Insurance claim

In-home care
support

Recruitment

Home-visit elderly
care

Business support

Management
supportFinance
Purchasing

Day careHome-visit nursing

Monthly
subscription
feeOutpatient
rehabilitation+α+αAccumulationof information© SMS CO.,LTD.

Servicedevelopment

Elderly caremanagement data29

2Strategy of Kaipoke

 Maximize value as a management support platform by expanding the market
share, adding more services and increasing types of operators we cover.
 Contribute to enhance the management efficiency and the service quality ofelderly care operators.
Services

Expand market
share

Add more
services＋αPurchasing
Finance
MarketingOperation improvement

Recruitment

Management
SupportPlatform

Increase operator
coverage

Insurance claim

Operator types© SMS CO.,LTD.

Home care
supportHome-visit
elderly care

Day careHome-visit
nursing

Outpatient
rehabilitation＋α30Overseas Business© SMS CO.,LTD.

31

2Strategy of Overseas Business 1/3

 Overseas businesses are built on the strengths of MIMS, which include its
overwhelming brand value in Asia and Oceania, enormous membership baseof healthcare professionals (HCPs), and strong relationships with medical andhealthcare-related companies and hospitals.
Medical andhealthcare-relatedcompanies*1

HCPs

Pharma Marketing

HCP
platform

Hospitals
and Clinics

Career Service
Career portal site

Healthcare Data

Drug database© SMS CO.,LTD.

*1. Include pharmaceutical companies, medical equipment manufacturer, healthcare-related service providers

32

2Strategy of Overseas Business 2/3 (Pharma Marketing) Maximize the value as a marketing platform and provide optimized solutions tomeet customer needs by strengthening the membership base, increasingclient accounts and developing marketing channels.

Healthcare
professionals

News

Drug
information

Academic
conferencesand events

Education

Onlinecommunity

Research

Medical andhealthcare-relatedcompanies

Optimized
marketingsolutionsPharmacompanies

Medical device
manufacturers+α+αStrengthen
membership base
© SMS CO.,LTD.

Developmarketing channels

Healthcare
service
operators

Increase client
accounts33

2Strategy of Overseas Business 3/3 （Global Career Business）

 Accelerate the growth of Global Career Business by combining MIMS’s
healthcare professional (HCP) database, SMS’s expertise in career businessand Melorita’s cross-border matching know-how.
 Establish a dominant position as the leading supplier of Asian HCPs to both
inside and outside the region.
HCPs

Malaysia

Hospitals

Attract
job seekers

Database of 2.5M HCPs

Job orders

Malaysia

Saudi Arabia
Expertise in careerbusiness

Philippines
Register

India

Cross-bordermatching know-how…
© SMS CO.,LTD.

UAE

UK

US

Supply platform ofAsian HCPs…

＋αIntroduce
candidates＋α34New Business© SMS CO.,LTD.

35

2

Focus of Business Development

 Develop new businesses mainly in Healthcare and Senior Life.
 Capture the growing needs for prevention of diseases and services notcovered by public insurance schemes.
Domains

OutlineServices
Preventive solution oflifestyle diseases

Healthcare

Services such as
health guidance,
disease prevention,and industrial
health services etc.

Healthmaintenance/promotion
support for women

Health guidance
solution

Information portal of Information portal ofdementia
diabetes

Web community for
dietitians

Senior Life

© SMS CO.,LTD.

Services to connect
operators and end
users in areas suchas elderly care,housing, and end oflife planning.

Remote industrial
health service

Information portalof industrial
health service

Preventive solution for
workforce departuredue to family care

Solution for dementia Habituation support ofprevention
dementia prevention

Q&A siteon health

Web community for people
caring for their families

Home-delivered meals
search site

Housing renovation
operators search site

Information offuneral companies

Information portal of
housing for the elderly362Healthcare - Remote Health Guidance Provide remote health guidance services to health insurance associations*1.
 Contribute to prevent lifestyle diseases of employees through effective healthguidance.

Healthinsurance
association
Prevent lifestylediseases of theinsuredScreening test results
Blood testing
Number of steps
Activity amount
Body weight
Blood pressure
Meal photos
Interview & questionnaire
Chat data

Registereddietitians

Recipients ofconsultation

Recruitment fromour online
community of
dietitians

Consultation
Chat

My Data

Effective coaching
methods based on the
results of the analysis

Medicalspecialists

37© SMS CO.,LTD. *1. In Japan, employees and their dependents are usually enrolled to public health insurance by joining the health insurance association of the employers.

2

Healthcare - Remote Industrial Health Service

 Provide industrial health services that combine visits and remote support tocompanies.
 Contribute to enhance employees’ health by providing comprehensive support
for operations related to industrial health.
Company• Enhance employees'
health• Develop industrial
health system

Employee

Health committee

Interview setting

Industrial
health nurses

Online interview

Recruitment fromour online
community ofnursesIndustrial health outsourcing

Stress check© SMS CO.,LTD.

Preparation ofrecords

Industrial
physicians
Visits andworkplace motoring38

2

Healthcare - Our Strengths

 Leveraging our strengths in healthcare professional (HCP) networks, ICT
knowledge, and proven results from verification projects conduced withministries and national agencies, we provide inexpensive and effective
solutions for health and disease-prevention.

HCP networks

 Enable us to recruit skilled
HCPs essential for healthcare
services.

Inexpensive and effective
solutions for health anddisease-prevention
ICT knowledge
 Enables us to provide
inexpensive and efficient services
using ICT.
© SMS CO.,LTD.

Results fromverification projects*1
 Enable us to provide services with proveneffectiveness.
*1. Joint projects with MHLW, METI and national hospitals

39

2

Strategy of Healthcare

 Maximize the value offered and contribute to increase healthy workforce byadding more services and expanding target clients and users.
Services

Add more
services

Maximize value

For companies＋α
Health management
consultation

Stress check
Support for employees
caring for families

Industrial
health service

For HIAs

Promotion totake med-checkups

Anti-smoking
program
Health guidance

Increase target clientsand users

Healthcare
Services

Aggravation
prevention
Remote healthguidance

Client types
Corporate HIAs*1© SMS CO.,LTD.

*1. Healthcare insurance associations

Industrial HIAs

Mutual aid associations
Local governments

Small and medium
sized companies

＋α

40

2

Strategy of Senior Life Develop services to connect operators and end users to meet various needs inthe aging society, such as elderly care, housing, and end of life planning.
 Contribute to improve the quality of lives of the elderly and their families byhelping them make better decisions.
Onlinecommunity

The elderly
and families

Operators

Collect
information

Introduction

Welfareequipment
Nursing home
Renovation
Rebuilding
Sale of realestateProvideinformation

Fees

FuneralGrave/
Buddhist altar

...

...

+α

End of life
planning

Inheritance

Housing

Matching
services© SMS CO.,LTD.

Elderly
care

Meal

41

© SMS CO.,LTD.

1

Q1 FY03/20 Consolidated Financial Results P3-P7

2

FY03/20 Strategy

P9-P41

3

Appendix

P43-P5942

4

Business Models of Recruiting Agent and Recruiting Ads
Business model of Recruiting Agent
Receive a certain percentage of an annual salary from a hiring business operator
as a fee when an applicant joins it.
WebsiteCare workers

NursesAttracting job seekers

Sales activity

Registration

Job orders

Matching

Matching

Hospitals

Career partner

Elderly care
operators

FeeBusiness model of Recruiting Ads
Receive a fee for each application for a job via our Recruiting Ads website.
WebsiteCare workers

Attracting job seekers

Sales activity

Registration

Recruiting ads

ApplicationFee© SMS CO.,LTD.

Elderly care
operators

43

4

Kaipoke’s Main Services

Subscription-based management support platform
providing more than 40 services as a package*1
Insurance
Claim

Elderly care operators can claim for the reimbursement of insurance efficiently.

Recruitment

Provide SMS’s industry-leading Recruiting Ads service "Kaigo Job" for free.*2

Sales
SupportOffer a function to prepare sales leaflets and a list of care managers who are thesales target of elderly care operators.

Operation
Improvement

Provide one iPad for free to enable care workers to complete documentations attheir customer sites.

Opening
SupportSupport procedures needed to open an elderly care business such as application
for designation, financing, finding office properties and market research.

Finance

Provide factoring services to improve operators’ cash flows.

Purchasing© SMS CO.,LTD.

Elderly care operators can procure various equipments and supplies, such as rental
smartphones, in an easy and inexpensive way.
*1. Additional payments are required for the use of two or more iPads, factoring, etc.
*2. Charged for some types of occupations.

44

4Concept Change of Kaipoke

 Penetrated the market as a discounter of insurance claim system.
 Changed the service concept in 2014 and established a unique position as aprovider of a management support platform for elderly care operators.
Before February 2014

Since February 2014

Insurance
claim
systemInsurance
claim
system（ARPU)

JPY 3,000 /month• Intense competition among many providersof on-premise insurance claim system• SMS entered the market as a discounter
with ASP*1 type service© SMS CO.,LTD.

Recruiting
Ads
MarketingManagement support platform
Finance（ARPU)

Operation
improvement

Purchasing

JPY 20,000 /month• Provide highly differentiated services such as theindustry No.1 Recruiting Ads service via the
management support platform.

*1. Application Service Provider︓business providing computer-based services to customers over a network

45

4

Kaipoke Memberships

 The number of memberships is increasing in accordance with our strategy,
despite a temporary decline right after the concept and price change.
# of Kaipoke
memberships

Only insurance claim system

Management support platform

25,000 service offices（17,250 locations）

Many companies
entered the market

Changed the service
concept and price

Public elderly careinsurance started

2000© SMS CO.,LTD.

Apr.
2010

Feb.
2014

Apr.
2015

Jul.
2019

Future46

4MIMS Group Profile

MIMS group global coverage

MIMS group profile

FoundedBusiness
Globalcoverage

1963･Pharma Marketing･Healthcare Data
・Career Service
15 countries and regionsin Asia and Oceania

Number of
2.5 million
memberships
Acquisition
date© SMS CO.,LTD.

Oct. 7, 2015

47

4

Strengths of MIMS Group Strengths of MIMS group include its overwhelming brand value in Asia andOceania, strong membership base of healthcare professionals (HCPs), andbusiness relationships with pharmaceutical companies.

1.Overwhelming brand value

 50 years of history
 Utilized by healthcare
institutions/HCPs to get drug
information on a daily basis

HCPs

Pharmacompanies

2.Strong membershipbase of HCPs

3.Business relationships
with pharma companies

 2.5 million HCP memberships© SMS CO.,LTD.

 Most manufacturers of new drugs in the region
post information of their drugs on MIMS’s
database48

4Business Model of MIMS

Pharma Marketing

Healthcare Data

Support marketing activities of
medical/healthcare-related companies

Provide a drug database for prescription
error checks in healthcare institutions

Medical/healthcarerelated companies
Fee

Optimized marketing
solutionsFee• Drug database• Database can be integrated
into core systems ofhealthcare institutions

Medical/healthcare
information via various
channels (publication,web, event etc.)
HCPs(e.g. doctors, nurses,
pharmacists)© SMS CO.,LTD.

Healthcare institutions(e.g. hospitals, clinics,
pharmacies)*1. Operators such as pharmaceutical companies, medical device manufacturers and healthcare service operators49

4

Consolidation of MIMS Financial Results

 MIMS P/L statement is consolidated to SMS P/L statement following a time lagof three months.

Illustration of MIMS P/L Consolidation to SMS Consolidated P/L（excl. MIMS）*1
FY03/19

FY03/20

Q1

Q2

Q3

Q4

Q1

Q2

Apr-Jun P/L

Jul-Sep P/L

Oct-Dec P/L

Jan-Mar P/L

Apr-Jun P/L

Jul-Sep P/L

Jan-Mar P/L

Apr-Jun P/L

Jul-Sep P/L

Oct-Dec P/L

Jan-Mar P/L

Apr-Jun P/L︓SMS consolidated P/L (excl. MIMS)© SMS CO.,LTD.

・・・

・・・

︓MIMS P/L

*1. Q1-Q4 presented above are those of the fiscal year of SMS. SMS fiscal year ends in March, while MIMS fiscal year ends
in December.

50

4

Business Portfolio – Career*1*2

SubSegment

Category
Servicesfor careworkers

Elderly
Care
CareerServices
RAD*3 for care workers

RAG *3 for care workers

Temporary staffing forcare workers

RAG for PT/OT/ST

RAG for care managers

Web community forcare managers

RAG for nurses

RAG for dietitians

RAG for radiological
technologists

RAG for childcare workers

RAG for
Judo therapists etc.

RAD for nurses

RAD for newly-graduatednursesRAD for
Judo therapists etc.

Chiropractic
certification course

Elderly carecertification course

Certification course
information

Others

RAG
services
MedicalCare
CareerOthersRAG for medical
technologists

RAG for clinical engineers

Web community for
Scholarship information portal nurses and student nurses

National examinationreference book for Judotherapists etc.

HR solution
for hospitals

Information portal for
hospital admin. managers*1. As of Mar. 2019
*2. Career businesses for doctors and pharmacists are operated by M3 Career, Inc., a JV between M3, Inc.(51%) and SMS (49%).
*3. RAD: Recruiting Ads RAG: Recruiting Agent© SMS CO.,LTD.

51

4

Business Portfolio – Kaipoke/Overseas/New Business

Segment

KaipokeOverseas

ServicesManagement support platform
for elderly care operators

Drug information service for
RAG*1 for nurses
Career related service for nurses
healthcare professionals and (Malaysia and Saudi Arabia, etc.）(South Korea)
institutions

Preventive solution oflifestyle diseases

Health maintenance /promotion
support for women

Medical ad services（Philippines, Indonesia, Malaysia）

Health guidance
solution

Remote industrial
health service

Information portalof industrial
health service

Information portal of
diabetes

Information portal ofdementia

Solution for dementia
prevention

Preventive solution for
workforce departuredue to family care

Habituation support of dementia
prevention

New BusinessWeb community for
dietitians

Web community for people
caring for their families

Q&A siteon healthHome-delivered meals
search site

Online academic
media for nurses

Information portal of
housing for the elderly

Web community for managersof elderly care operators

Housing renovation
operators search site

Information offuneral companies*1. Recruiting Agent© SMS CO.,LTD.

52

4History of Service Launces 1/4
03/04

03/05

03/06

03/07

03/08

03/09

03/10

03/11

03/12

03/13

03/14

03/15

03/16

03/17

03/18

03/19

03/20

RAG for care managers: Care Jinzai-bank May 2003

Certification course information: Shikatoru Nov. 2003

RAD for care workers: Kaigo Job Mar. 2004

Elderly
Care
CareerWeb community for care managers: Care Mane.com Sep. 2006

RAG for PT/OT/ST: PT/OT Jinzai-bank Sep. 2008

RAG for care workers: Kaigo Job Agent Aug.2014

Elderly care certification course: Kaigo Job Academy Oct. 2015

Temporary staffing for care workers: Kaigo Job Partners Dec.2016© SMS CO.,LTD.

53

4

History of Service Launces 2/4
03/04

03/05

03/06

03/07

03/08

03/09

03/10

03/11

03/12

03/13

03/14

03/15

03/16

03/17

03/18

03/19

03/20

RAG for nurses: Nurse Jinzai-bank Sep. 2005
RAD for nurses: Nurse-senka Kyujin-navi Jul. 2006
Web community for nurses and student nurses: Nurse-senka Community Aug. 2006
RAG for doctors: M3 Career Agent Aug. 2006
RAG for pharmacists: Yaku Kyari Agent Apr. 2007

Company split andsucceeded to M3 career atthe end of Dec. 2009

RAD for newly-graduated nurses: Nurse-senka Shusyoku-navi Aug. 2009
MedicalCare
Career

HR solution for hospitals Apr. 2011
RAG for dietitians: Eiyoshi Jinzai-bank May 2012
Scholarship information portal: Kango Shogakukin-navi Oct. 2012
RAG for medical technologists: Kensagishi Jinzai-bank Sep. 2013
RAG for radiological technologists: Hoshasengjshi Jinzai-bank Jun. 2014
RAG for clinical engineers: Kogakugishi Jinzai-bank Jul. 2014
Information portal for hospital admin. managers: Jimcom Sep. 2014
RAG for Judo therapists etc.: WILLONE Nov.2017
RAG for childcare workers: Hoikushi Jinzai-bank Oct.2018© SMS CO.,LTD.

54

4

History of Service Launces 3/4
03/04

Elderly
Care
Operators

03/05

03/06

03/07

03/08

03/09

03/10

03/11

03/12

03/13

03/14

03/15

03/16

03/17

03/18

03/19

03/20

Management support service for elderly care operators: Kaipoke Jul. 2006

(South Korea) Career related service for nurses: Nurscape Sep. 2011
Medical ad services Jan. 2015

Overseas

Drug information service for healthcare professionals and institutions: MIMS Oct. 2015

Global career service Jun. 2017

Information portal of housing for the elderly: Kaigo DB Jul. 2006
Web community for people caring for their families: Anshin Kaigo Jun. 2009

New
Business

Web community for dietitians: Eichie Jun. 2011
Information portal of dementia: Ninchisho Net Aug. 2011
Home-delivered meal search site: Lifood Nov. 2013
Q&A site on health: Narukara Dec. 2013

© SMS CO.,LTD.

55

4

History of Service Launces 4/4
03/04

03/05

03/06

03/07

03/08

03/09

03/10

03/11

03/12

03/13

03/14

03/15

03/16

03/17

03/18

03/19

03/20

Web community for managers of elderly care operators: Kaigo Must Feb. 2015
Online academic media for nurses: Nurse Senka Plus Apr.2016
Housing renovation operators search site: Hapisumu Apr.2016
Information portal of diabetes: Tonyobyo Net Jul. 2016
Solution for dementia prevention: Nintore Apr. 2017

New
Business

Preventive solution of lifestyle diseases: Remote Chat Guidance Apr. 2017
Habituation support of dementia prevention: Nintore Challenge Oct. 2017
Health guidance solution: Remote Chat Guidance Oct. 2017
Information of funeral companies: Anshin Sougi Mar. 2018
Health maintenance/promotion support for women: Lady to Go Dec. 2018
Remote industrial health service: Remote Sangyo Hoken Apr. 2019
Information portal of industrial health service: Sanchie Apr. 2019
Preventive solution for workforce departure due to family care: Remote Kaigo Sodan July. 2019

© SMS CO.,LTD.

56

4

Dividends

Payout ratio
14.8%

15.6%

16.8%
15.5%

12.5%

13.6%
11.6%

16.3%

7.5

12.3%
6.5
5.5

6.8%

DPS*1 (JPY)

3.5

3.5

FY03/15

FY03/16

2.5
2

1.25

1.5

0.625

FY03/10© SMS CO.,LTD.

FY03/11

FY03/12

FY03/13

FY03/14*1. Past stock splits are taken into account for the DPS calculation.

FY03/17

FY03/18

FY03/1957

4

Historical Financial Results(JPY million)
FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

Net Sales

58

383

835

1,545

2,715

5,177

7,172

7,618

8,692

10,181

12,046

15,056

19,06923,054

26,61130,836

Operating
Income

▲5

52

109

269

426

1,230

1,261

1,480

1,519

1,570

1,730

2,079

2,756

3,646

4,021

4,743

Ordinary
Income

▲5

49

108

269

415

1,238

1,266

1,530

1,734

1,990

2,340

2,693

3,509

4,430

5,007

5,979

Net
Income

▲5

31

63

157

244

719

717

876

1,004

1,226

1,380

1,824

2,265

2,801

3,361

4,216

EPS*1
(JPY)

▲5.8

1.8

1.5

2.2

3.3

9.2

9.2

11.1

12.2

14.9

16.8

22.4

27.9

33.7

38.7

48.5

Total
Assets

59

357

566

1,016

1,806

3,118

3,645

4,672

5,716

6,948

8,406

11,421

41,68943,231

46,08747,467

Liabilities

55

166

196

489

822

1,410

1,266

1,430

1,579

1,794

2,331

4,497

28,532

21,64822,44631,928Net
Assets

4

190

369

527

983

1,708

2,379

3,242

4,136

5,153

6,074

6,923

13,157

21,58323,641

15,539

7.5

53.3

65.3

51.9

54.4

54.8

65.2

69.2

72.3

74.1

71.5

59.7

20.5

39.6

41.8

32.4

▲124.9

31.8

22.8

35.1

32.3

53.4

35.1

31.2

27.3

26.4

24.7

28.4

29.5

21.8

18.5

24.4

DPS*1
（JPY）

-

-

-

-

-

0.625

0.625

1.25

1.5

2

2.5

3.5

3.5

5.5

6.5

7.5

Dividend
PayoutRatio（%）

-

-

-

-

-

6.8

6.8

11.6

12.3

13.6

14.8

15.6

12.5

16.3

16.8

15.5

TSR*2
（%）

-

-

-

-

-

-

-

-

-

-

177.1

514.5

1,150.3

1,057.5

682.8

402.3

EquityRatio（%）ROE（%）© SMS CO.,LTD.

*1. Past stock splits are taken into account for EPS and DPS calculation.
*2. （Ending share price of the fiscal year＋Total dividends paid over 5 years) / Ending share price 5 fiscal years ago

58

4

Number of Employees and Shareholder Composition
Number of Employees
As of June 30, 2019:
Employees (consolidated)
Japan
Overseas

2,848
2,110
738

Shareholder Composition
As of March 31, 2019:
Number of shareholders
5,566© SMS CO.,LTD.

*1. Pie chart shows the ratio of number of stocks held by each category59

Cautionary Statement with Respect to Forward-Looking Statements
These materials contain forward-looking statements, including estimates, projections, and statements related to the business operations of SMS CO.,LTD. (hereinafter, “the Company”) based on current expectations and assumptions in light of the information available to the Company as of June30, 2019. These forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties andother factors that may cause the Company’s actual results, performance, achievements or financial position to be materially different from any future
results, performance, achievements or financial position expressed or implied by these forward-looking statements. These factors include, but are
not limited to:・changes in economic conditions, market demand, and the competitive environment affecting Japan, Asia and other markets inwhich the Company operates;
・reliance on digital and information technology, including with respect to the handling of elderly care, medical care and otherclient information and operation of the Company’s online community services;・inability to effectively execute M&A/business alliance and overseas expansion strategies;
・changes in the laws, regulations and government policies in the markets in which the Company operates, particularly relating toemployment placement, elderly care and medical care;・any damage to the brand image;・risk of infringing intellectual property rights;
・fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen, the US dollar, the Singapore
dollar, the Hong Kong dollar and the Australian dollar; and・risk of impairment losses, particularly with respect to goodwill, trademark right and customer-related assets recognized in connection of theacquisition of Medica Asia (Holdco) Limited in October, 2015.
A discussion of these and other factors which may affect the Company’s actual results, performance, achievements or financial position is describedin “Business Risks” contained in the Company’s corporate website*1.
We do not intend, and disclaim any duty, to update or revise any forward-looking statements contained in these materials to reflect new information,
future events or otherwise. We caution you not to place undue reliance on any forward-looking statements contained in these materials.
*1. https://www.bm-sms.co.jp/en/ir/policy/risk/© SMS CO.,LTD.

For any inquiries on the materials, please contact below:
Finance & Accounting Department
E-mail: irinfo@bm-sms.co.jp
Phone: +81-3-6721-2403

60