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

Presentation Material for Investors
Financial Results Summary for the Third Quarter of
the Fiscal Year Ending March 31, 2019 (the 16th Fiscal Year)

January 31, 2019

Table of Contents

1

Q1-Q3 FY03/19 Consolidated Financial Results2

FY03/19 Strategy

P11-P34

3

Appendix

P36-P49© Copyright SMS CO.,LTD.

P3-P9

1

1

Q1-Q3 FY03/19 Consolidated Financial Results2

FY03/19 Strategy

P11-P34

3

Appendix

P36-P49© Copyright SMS CO.,LTD.

P3-P9

2

1

Historical Financial Results and FY03/19 Forecasts

 Expect to achieve growth in both net sales and ordinary income for the 15th
consecutive year since our establishment.
Trends in net sales and ordinary income（Ordinary income, JPY million）（Net sales, JPY million）

32,27333,00030,0008,000
26,61127,0007,200

23,05424,0005,803

21,00019,06918,000

5,007
4,430

15,05615,0003,509

12,046

12,000

10,181

9,000
5,177
6,000

7,172

1,238

3,000
0

8,800

58 -5

383
49

835
108

7,618

1,266

8,692

1,530

1,734

2,693
2,340

1,990

6,400
5,600
4,800
4,000
3,200
2,400
1,600

1,545 2,715
415
269

800
0

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(3,000)© Copyright SMS CO.,LTD.

︓Net sales（in black）

︓Ordinary income（in blue)

(800)

3

１ Q1-Q3 FY03/19 Consolidated Financial Results
 Net sales increased significantly and operating income was at the same level YoY.
 Made further investments such as hiring in well-performing RAG*1 services andlaunching the RAG service for childcare workers in Q3, in addition to hiring a large
number of consultants in 1H.
 Incomes marked steady progress towards the full year guidance.
Consolidated P/L Statement [JPY million]© Copyright SMS CO.,LTD.

Q1-Q3
FY03/18
Actual

Q1-Q3
FY03/19
ActualNet Sales

19,22822,024+ 15%

32,273Operating
Income

2,306

2,282

▲ 1％

4,827

Ordinary
Income

3,014

3,363

+ 12%

5,803

Net
Income

2,040

2,390

+ 17%

3,905

*1. Recruiting Agent

YoY
ChangeFY03/19
Forecast

4

1

The Career Segment (Q1-Q3)

 Segment sales increased 19% YoY.
 Elderly Care Career recorded strong growth.
Year-on-Year Comparison of Sales [JPY million]_

Q1-Q3
FY03/18

Q1-Q3
FY03/19

YoY
ChangeElderly Care
Career

4,184

5,643

+ 35％

Medical Care
Career

8,175

9,118

+ 12％

Total

12,35914,762+ 19％

Highlights• Elderly Care Career
RAG*1 for care workers recorded strong growth due to the significant increase in consultants headcount.
Hired additional consultants in Q3 in order to accelerate the growth.
• Medical Care Career
RAG for nurses grew steadily.
Hired additional consultants for WILLONE*2 in Q3.
Launched RAG for childcare workers in Oct. 2018.
*1. Recruiting Agent*2. WILLONE, acquired in FY03/18, provides career services for Judo therapists and licensed masseurs including finger pressure practitioners, acupuncturists, moxibustion practitioners.

© Copyright SMS CO.,LTD.

5

1

The Elderly Care Operators Segment [Kaipoke] (Q1-Q3)

 Segment sales increased 18% YoY.

Year-on-Year Comparison of Sales [JPY million]_ Q1-Q3
Q1-Q3
YoY
FY03/18
Elderly Care
Operators[Kaipoke]

2,442

FY03/19

2,873

Change+ 18％

Highlights• The number of Kaipoke memberships increased steadily.
- An increase of 1,250 locations YTD to 16,300 [23,600 service offices*1] as of Jan. 1, 2019.
• Sales of optional add-ons such as additional tablets, smartphones and factoring service continued to increase.
*1. # of locations: the number of 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 of locations should be
one and the number of service offices should be two. The subscription fee is charged for every membership location. Normally, the number of locations would be smaller than thenumber of service offices.

© Copyright SMS CO.,LTD.

6

1

The Overseas Segment (Q1-Q3)

 Segment sales increased 6％ YoY.

Year-on-Year Comparison of Sales [JPY million]_ Q1-Q3
Q1-Q3
YoY
FY03/18

Overseas

3,415

FY03/19

3,611

Change+ 6％Highlights••

Both MIMS’s existing business and Global Career Business grew steadily.
In Global Career Business, the number of Offer Accepted*1 increased. The lead time between Offer
Accepted and the start of employment*2 is getting longer than expected.

*1. Job offers accepted by applicants*2. Sales are recorded when an applicant starts working.

© Copyright SMS CO.,LTD.

7

1

Topic : Strategy of Career Business Maximize value for both healthcare professionals (HCPs) andoperators by diversifying service offerings and expanding the variety ofoccupations we cover.
Maximize value for
HCPs and operators

Diversify
services+αCommunity
Education
Temp staffing

Careerservice

RAD*1- Expand market share- Increase occupation
coverage

RAG*2
Nurse
© Copyright SMS CO.,LTD.

Care worker*1. Recruiting Ads *2. Recruiting Agent

Care
manager

PT/OT/ST

Therapist

+α
8

1

Topic︓RAG for Childcare Workers

 Launched the RAG*1 service for childcare workers in Oct. 2018.
 Develop new growth business by entering the promising market with alarge number of workers in high demand.
Number of Workers *2 [million]
by Occupations in the Career Segment

Jobs-to-Applicants Ratio*4

Care
Workers

4.0

1.95

Childcare workers

Nurses3.0

2.0

1.66 Childcare
Workers

Judo
Therapists/
Licensed PT*3 OT
0.50 Masseurs
ST
0.21

0.19

Care workers
1.0

Care
Managers
Registered
Dietitians
0.16
0.12

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. Recruiting Agent*2. Sources: Care workers/Care managers (MHLW,2017), Nurses (Japanese Nursing Association,2016), Judo Therapists/Licensed Masseurs (SMS’s estimatebased on MHLW data,2016), PT/OT/ST (MHLW,2016),Childcare workers/Registered dietitians (SMS’s estimates based on MHLW data,2017)*3. Includes finger pressure practitioners, acupuncturists, moxibustion practitioners*4. Source: MHLW
© Copyright SMS CO.,LTD.

9

1

Q1-Q3 FY03/19 Consolidated Financial Results2

FY03/19 Strategy

P11-P34

3

Appendix

P36-P49© Copyright SMS CO.,LTD.

P3-P9

10

2

Our Mission

We create value and contribute to society by providing
an “information infrastructure for an aging society.”© Copyright SMS CO.,LTD.

11

2

Business Domains and Stakeholders

 Define our business domains in an aging society as Elderly Care, Medical Care,
Healthcare and Senior Life.
 Provide stakeholders such as operators, professionals and end users with avariety of information services.
Stakeholders

Business domains in an aging society
Senior Life*2

Operators

Senior Life
Senior Life
RelatedCompanies

Healthcare*1

Professionals

Senior Life
RelatedWorkers
Facility
Care

Elderly Care

Medical Care

Operators
Developing
Care Plans

Care
Workers

Care
Managers

Home-visit
Elderly Care

Healthcare

EU

Healthcare
RelatedWorkers
Pharmaceutical
Companies
Doctors

People with
Interest in Health
家族
The
Patients
Elderly
要介護者
患者

PT/OT/
ST

Healthcare
RelatedCompanies

Pharmacists
Pharmacies
Other
Co-medicals

NursesClinics

DaycareElderly Care

Home-visit
Nursing*1. Covers health-related services that are not subject to public elderly care insurance or medical care insurance*2. Covers services related to daily life in an ageing society© Copyright SMS CO.,LTD.

Hospitals

Medical Care12

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.

© Copyright SMS CO.,LTD.

Japan

Thailand

Korea

Vietnam

China

Philippines

Hong Kong

MyanmarTaiwanIndia

Singapore

Australia

Malaysia

New ZealandIndonesia

UAE

13

2

Size of Our Target Market

 Healthcare-related expenditures continue to rise both in Japan and Asia.
 In 2025, our total addressable market will be at least over USD 29.4 billion in
the regions.
Market size of healthcare-related information services in Japan and Asia
USD

671 billion

Japan
Elderly and medical care
Expenditures*1

454

491

315

1％*

359
Medical care258

Elderly care

57

95

2005

2015

Asia

6.7 USDbillion180

Total market sizein 20252025
USD

2,269 billion

Healthcare expenditure*2

USD 29.4 billion

1％*

22.7 USD
billion

1,152
295
2005

2015

2025

* Information services would accountfor at least 1% of the total expenditure© Copyright SMS CO.,LTD. *1. Sources: 2005 – MHLW; 2015, 2025 - MHLW estimates. *2. Sources 2005 – WHO; 2015,2025 - SMS estimates.

14

2

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

Breakdown of Net Sales（JPY million）

・ No.1 player of medical and elderly care recruiting services
MedicalCare
Elderly
Care

Kaipoke・ Management support service for elderly care operators

Overseas Business (MIMS)

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

New Business・Developing a series of new businesses© Copyright SMS CO.,LTD.

15

2Growth Scenario

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

4. Growth of New businesses

3. Growth of Overseas businesses
driven by MIMS
2. Growth of Kaipoke

1. Growth of Career businessesNow© Copyright SMS CO.,LTD.

Future16

Career Business© Copyright SMS CO.,LTD.

17

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

Jobs-to-applicants ratio of care workers*2

Jobs-to-applicants ratio of nurses*2

FY11

FY12

© Copyright SMS CO.,LTD.

FY13

FY14

FY15

Care workers

NursesAll industries

All industries

FY16

FY17

FY11

FY12

*1. Sources︓Number - MHLW ; Turnover rate - Care Work Foundation *2. Source︓MHLW*3. Sources︓Japanese Nursing Association

FY13

FY14

FY15

FY16

FY17

18

2

Our Strengths

 As a pioneer, we created attractive markets and established No.1 positions.
 With strong competitive advantages in attracting healthcare professionals(HCPs) and gaining job orders, we enjoy a virtuous cycle where we can draw
more and more HCPs and business operators.
HCPs

Operators

Our customers are:

We receive orders from:(percentage of registered members for ourservices among the number of people whochange their jobs annually)

NursesOver 100%Care workers
60%

Created the market as a pioneer
andlead the market as No.1 player
Recruiting Agent (RAG) for Nurses
No.1 share
Recruiting Ads (RAD) for Care Workers
No.1 share
RAG for Care Workers
Lead market expansion

Major elderly
care operators
60%
Developed strong relationships
with operators and their heavy
dependence on us.

Accumulated online
marketing know-how byconducting it in-house*1.
© Copyright SMS CO.,LTD.

Hospitals
70%*1. Our competitors traditionally outsourced their web marketing.

192Strategy of Career Business 1/3

 Maximize value for both healthcare professionals (HCPs) and operators by
diversifying service offerings and expanding the variety of occupations wecover.
Maximize value for
HCPs and operators

Diversify
services+αCommunity
Education
Temp staffing

Careerservice

RAD*1- Expand market share- Increase occupation
coverage

RAG*2
Nurse
© Copyright SMS CO.,LTD.

Care worker*1. Recruiting Ads *2. Recruiting Agent

Care
manager

PT/OT/ST

Therapist

+α
20

2

Strategy of Career Business 2/3

 Meet diverse needs of HCPs and operators in the industries by offering not
only Recruiting Ads (RAD) and Recruiting Agent (RAG) services but also awide range of other services such as schools and web communities.
Qualification
obtaining support

RAG

Operators

Qualification course info

SchoolHCPs
RAD

Community

Other
services
HR solution© Copyright SMS CO.,LTD.

Temp staffing

21

2Strategy of Career Business 3/3（Elderly Care Career）

 Leveraging our database of 850K registered care workers, we expand our services from
Recruiting Ads (RAD) to Recruiting Agent (RAG) and temporary staffing to maximize
value offered to both care workers and operators.
 Contribute to the increase of care workers by supporting them to acquire qualifications.
Care
workers

Employment
supportExperienced

Operators

RAG

850,000
registered care workers

RAD

New entry
Qualification
obtaining support
Qualification
course info

© Copyright SMS CO.,LTD.

SchoolTemp
staffing

22

2

Growth Scenario

 The Career Segment as a whole will grow continuously.
 Elderly Care Career has enormous growth opportunities.
Current and future sales by segment*1*2: Current sales: Sales estimatesin the future
RAG for
PT/OT/STRAG for Care
Workers
Full-scale expansion
started in FY03/17.

RAG for
Care
Managers

Temp staffing

SchoolRAD forCare Workers

RAG for Nurses
RAG forOther
Co-medicals

RAD forNursesRAG/RAD for
Judo Therapists
etc.

CareerSegment
16,863 *3(JPY million)

RAD for NewlygraduatedNursesLaunched by
WILLONE acquisition
in FY03/18

Elderly Care︓5,836*3 (JPY million)

Medical Care︓11,027*3 (JPY million)*1. Career businesses for doctors and pharmacists are operated by M3 Career, Inc. which is a joint venture between M3, Inc. (51%) and SMS (49%).
RAD: Recruiting Ads *3 The figures are the actual sales for FY03/18.

© Copyright SMS CO.,LTD. *2 .RAG: Recruiting Agent

23

Kaipoke© Copyright SMS CO.,LTD.

24

2

Environment︓Elderly Care Operators

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

Services offered by Kaipoke*2・Home care support services
・Home-visit elderly care・Day care・Home-visit nursing
・Outpatient rehabilitation etc.

Services not offered by Kaipoke*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.

*1. Source︓Number of elderly care operators service offices – SMS estimates based on MHLW statistics; Population of the elderly - MIC© Copyright SMS CO.,LTD. *2. As of Mar. 201825

2

Strategy of Kaipoke 1/3

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

Since February 2014

Insurance
claim
systemInsurance
claim
system（ARPU)

JPY 3,000/month• Intense competition among many providers of
on-premise insurance claim system.
• SMS entered the market as a discounter withcloud-based insurance claim system.
© Copyright SMS CO.,LTD.

Recruiting
Ads
MarketingManagement support service

Finance（ARPU)

Operation
improvement

Purchasing

JPY 20,000/month• Provide highly differentiated management
support service with the No.1 recruiting ads
service integrated.
26

2Strategy of Kaipoke 2/3

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

Only insurance claim system

Management support

23,600 service offices（16,300 locations）

Many companies
entered the market

Changedthe service concept
and price

Public elderly careinsurance started

2000© Copyright SMS CO.,LTD.

Apr.
2010

Feb.
2014

Apr.
2015

Jan.
2019

Future27

2Strategy of Kaipoke 3/3

 Maximize value offered to elderly care operators by adding more services aswell as expanding types of operators we cover.
Services provided

Maximize value for
operators

Add more
services＋αPurchasing
Finance
MarketingOperation improvement
Recruitment

・Expand market share
・Increase operator
coverage

Management
現在のsupport service
カイポケ売上Insurance claim
Home care
support© Copyright SMS CO.,LTD.

Home-visit
elderly care

Day careHome-visit
nursing

Outpatient
rehabilitation＋αNumber ofmemberships

28

Overseas Business© Copyright SMS CO.,LTD.

29

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 withp
pharmaceuticalcompaniespand hospitals.
pPharmaceutical
Companies

HCPs

Pharma Marketing

HCP
Platform

Career Service

Hospitals
andClinics

Career portal site

Healthcare DataDrugdatabase© Copyright SMS CO.,LTD.

30

2Strategy of Overseas Business 2/3 （Pharma Marketing）

 Maximize value offered to pharmaceutical companies by creating a strong
marketing platform through a variety of services to HCPs.

HCPs

Pharmaceuticalcompanies

Drug information
Academic
conferences/events

News

Careerinformation

Strengthen
relationships

OnlineCommunity

Education

Maximize
value

Research

Strong marketing platform© Copyright SMS CO.,LTD.

31

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

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

HCPs

Malaysia

Hospitals

Attract
Job seekers

Database of 2.3M HCPs

Malaysia
Job orders
Saudi Arabia

Expertise in careerbusiness

Philippines
Register

India

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

Supply platform ofAsian HCPs

UAE

UK

US

…

＋α

Introduce
candidates＋α32New Business© Copyright SMS CO.,LTD.

33

2Strategy of New Business Development

 Constantly develop new businesses focusing mainly on Healthcare and SeniorLife domains.

Domains

Healthcare*1

Senior Life*2

OutlineServices such as
health guidance,
aggravation
prevention andhealth consultation
etc.

Services related todaily life of senior
people such as
food, housing, andelderly cares etc.

© Copyright SMS CO.,LTD.

Services
Preventive solution forSpecific health guidance Web community for
onset/aggravation of lifestylesolution
nutritionists
diseases

Information portal ofdementia

Web community for families
with those requiring elderly care

Information portal of
diabetes

Solution for dementia
prevention

Home-delivered
meal search site

*1. Covers health-related services that are not subject to public elderly care insurance or medical care insurance*2. Covers services related to daily life in an aging society

Q&A site on health

Habituation support ofdementia prevention

Housing renovation
operators search site34

1

Q1-Q3 FY03/19 Consolidated Financial Results2

FY03/19 Strategy

P11-P34

3

Appendix

P36-P49© Copyright SMS CO.,LTD.

P3-P9

35

3

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

Attracting job seekers

Sales activity

Registration

Job orders

Matching

Matching

NursesConsultants

Hospitals

Elderly care
operators

FeeBusiness model of Recruiting Ads
Receive a fee for each application for a job via our Recruiting Ads
WebsiteAttracting job seekers

Sales activity

Registration

Recruiting ads

Application
Care workers© Copyright SMS CO.,LTD.

Fee

Elderly care
operators

36

3

Business model of Kaipoke

Provide services as a package out ofapprox. 40 contents in total.

Insurance
Generate claims for the elderly care insurance.
claim
systemProvide cloud‐based
management
support service

Recruitment

Provide SMS’s industry-leading recruiting Ads

Marketing Make flyers and a list of care managers who are
the sales target of elderly care operators.

Elderly care
operators

Pay monthly
subscription fee(fixed price*1)

Operation
improve- Offer an iPad for free to enable care workers tocomplete documentation at their customer sites.
ment
Finance

Provide factoring service to help operators
improve cash flows.

Purchasing Procure equipment necessary for elderly care
operators easily, at a low price© Copyright SMS CO.,LTD. *1. Additional payment is applied when we provide two or more tablets, factoring, etc.

37

3MIMS Group Profile

MIMS Group global coverage© Copyright SMS CO.,LTD.

MIMS Group profile

Founded

1963

Businessmodels･Pharma Marketing･Healthcare Data
・Career Service

Globalcoverage

15 countries and regions in
Asia and Oceania

Number ofmemberships

Approx. 2.3 million memberships including
0.5 million doctors

Acquisition
date

Oct. 7, 2015

38

3

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/professionals to get drug information
on a daily basis

Healthcare
professionals

Pharmaceuticalcompanies

2. Strong membershipbase of HCPs

3. Business relationships
with pharma companies

 Approx. 2.3 million HCP memberships including
approx. 0.5 million doctors

 Most manufacturers of new drugs in the region post
information of their drugs on MIMS’s database© Copyright SMS CO.,LTD.

39

3

Business Models of MIMS

Pharma Marketing

Healthcare Data

Pharmaceuticalcompanies
Posting fee

Drug information

Usage fee

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

Drug information via
various media(mainly paper based)

Healthcare professionals(e.g. doctors, nurses,
pharmacists)© Copyright SMS CO.,LTD.

Healthcare institutions(e.g. hospitals, clinics,
pharmacies)40

3

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

FY17

FY18

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)

・・・

・・・

︓MIMS P/L

© Copyright SMS CO.,LTD. *1. Q1-4 presented above are those of the fiscal year of SMS. SMS fiscal year ends in March, while MIMS fiscal year ends in December.

41

3

Business Portfolio

 Provide more than 40 services.
 Constantly develop new businesses to create new pillars of our businesses.
Segment

Subsegment

Services*1*2*3

Elderly Care
Career
CareerOverseas

Business
Development

RAG for PT/OT/ST

RAD for care workers

RAD for newly-graduatedcare workers

RAG for nurses

Medical Care
CareerElderly Care
Operators

RAG for care managers

－

－

－

RAD for nurses

RAG for medical
technologists

RAG for care workers Certification course information

Temporary staffing
for care workers

RAG for radiological
technologists

Elderly care certification course

RAG forclinical engineers

RAG forchildcare workers

RAG for nutritionists

Web community for nurses
RAD for newly-graduated
Scholarship information portal and student nurses
nursesWeb community forcare managers

HR solution
for hospitals

RAG for
Judo therapists etc.

Information portal for
hospital admin. managers

Management support service for elderly
care operators
RAG for nurses
Career related service
Drug information service forhealthcare professionals and (Malaysia and Saudi Arabia, for nurses (South Korea)
etc.)
institutions

Medical ad services(Philippines)

Medical ad services(Indonesia)

Preventive solution for
onset/aggravation oflifestyle diseases

Specific health guidance
solutionWeb community for
nutritionists

Q&A site on health

Information portal ofdementia

Information portal of
diabetes

Solution for dementia
prevention

Habituation support ofdementia prevention

Information portal of
housing for the elderly

Web community for families
with those requiring elderly care

Publishing for nurses

Online academic media
for nurses

Web community for
managers ofelderly care operators

Home-delivered
meal search site

Housing renovation
operators search site

*1. As of March, 2018 *2. RAG stands for Recruiting Agent; RAD stands for Recruiting Ads© Copyright SMS CO.,LTD. *3. Career businesses for doctors and pharmacists are operated by M3 Career, Inc. which is a joint venture between M3, Inc. (51%) and SMS(49%).

42

3

History of Service Launches 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

RAG for care managers: Care Jinzai-bank May 2003

RAD for newly graduated care workers: Kaigo Job Gakusei-ban Jul. 2003

Certification course information: Shikatoru Nov. 2003

RAD for care workers: Kaigo Job Mar. 2004

Elderly
Care
Career*1

Web 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© Copyright SMS CO.,LTD.

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3

History of Service Launches 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

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*1

HR solution for hospitals Apr. 2011
RAG for nutritionists: 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 worker Hoikushi Jinzai-bank Oct.2018© Copyright SMS CO.,LTD.

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3History of Service Launches 3/4
03/04

03/05

Elderly
Care
Operators

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

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

(Korea) Career related service for nurses: Nurscape Sep. 2011

(Philippines) Medical ad services Jan. 2015

Overseas(Indonesia) Medical ad services Feb. 2015

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

Business
Development

Web community for families with those requiring elderly care: Anshin Kaigo Jun. 2009

Publishing for nurses: Nurse-senka Books Aug. 2009

Web community for nutritionists: Eichie Jun. 2011
© Copyright SMS CO.,LTD.

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3

History of Service Launches 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

Information portal of dementia: Ninchisho Net Aug. 2011

Home-delivered meal search site: Lifood Nov. 2013

Q&A site on health: Narukara Dec. 2013

Web community for managers of elderly care operators: Kaigo Must Feb. 2015

Online academic media for nurses: Nurse Senka Plus Apr.2016

Business
Development

Housing renovation operators search site: Hapisumu Apr.2016

Information portal of diabetes: Tonyobyo Net Jul. 2016

Solution for dementia prevention : Nintore Apr. 2017

Preventive solution for onset/aggravation of lifestyle diseases: Remote Chat Guidance Apr. 2017

Habituation support of dementia prevention: Nintore Challenge Oct. 2017

Specific health guidance solution: Remote Chat Guidance Oct. 2017

© Copyright SMS CO.,LTD.

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3

Dividends

Trend in the amounts and the payout ratio of dividends*1

14.8%

15.6%

16.8%

18.0%

(JPY)
16.0%

13.6%
11.6%

16.3%
12.5%

12.3%

6.5
5.5

14.0%

12.0%

10.0%

6.8%
3.5
2
1.25

3.5

2.5

1.5

0.625
0

8.0%

6.0%

4.0%

2.0%

0.0%

FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16 FY03/17 FY03/18© Copyright SMS CO.,LTD. *1. The stock splits we had in the past are taken into account for the dividend amount calculation.

47

3

Historical Financial Results(JPY million)
FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

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

26,611

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

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

Net Income

▲5

31

63

157

244

719

717

876

1,004

1,226

1,380

1,824

2,265

2,801

3,361

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

46,087

Liabilities

55

166

196

489

822

1,410

1,266

1,430

1,579

1,794

2,331

4,497

28,532

21,64822,446

Net Assets

4

190

369

527

983

1,708

2,379

3,242

4,136

5,153

6,074

6,923

13,157

21,58323,641Equity Ratio
（%）

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

ROE（%）▲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

DPS*1
（JPY）

-

-

-

-

-

0.625

0.625

1.25

1.5

2

2.5

3.5

3.5

5.5

6.5

Dividend
Payout Ratio
（%）

-

-

-

-

-

6.8

6.8

11.6

12.3

13.6

14.8

15.6

12.5

16.3

16.8

© Copyright SMS CO.,LTD. *1.The stock splits we had in the past are taken into account for DPS calculation.

48

3

Number of Employees and Shareholder Composition
Number of Employees
Number of employees and its breakdown as of December 31, 2018
Employees (consolidated)
Japan
Overseas

2,456
1,742
714

Shareholder Composition*1【as of September 30, 2018】
Number ofshareholders
4,970© Copyright SMS CO.,LTD. *1. Pie chart shows the ratio of number of stocks held by each category.

49

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 ofDecember 31, 2018. These forward-looking statements are not guarantees of future performance and involve known and unknown risks,
uncertainties and other factors that may cause the Company’s actual results, performance, achievements or financial position to be materiallydifferent 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 a 60% interest in 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/eng/ir/policy/risk/© Copyright 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

50