Consolidated Financial Report for the First Three Months of Fiscal 2021
[Japanese GAAP]
February 2, 2021
EPS Holdings, Inc.
First Section, Tokyo Stock Exchange4282
https://www.eps-holdings.co.jp
Yan Hao, Chairman & CEO
Kazuki Sekitani, Vice President and Corporate Officer+81-3-5684-7873
February 12, 2021
‒
None
None

Company Name:
Stock Listing:Code Number:
URL:
Representative Director:
Inquiries:
Tel:
Filing of Quarterly Securities Report:
Scheduled Payment of Dividends:
Supplementary explanatory materials prepared:
Explanatory meeting:(¥ million are rounded down)

1. Consolidated Results for the First Three Months of Fiscal 2021 (October 1, 2020 to December 31, 2020)(¥ million; percentage figures represent year-on-year changes)(1) Consolidated Operating Results
Profit attributable toFirst Three Months
Net sales
Operating income
Recurring profit
owners of parent
Fiscal 2021
16,618
10.4%
1,449
95.6%
1,709
91.5%
1,004
104.5%
Fiscal 2020
15,053(6.9)%
740(52.9)%
892(43.7)%
491(58.1)%
Note: Comprehensive income: Fiscal 2021, 1Q: ¥1,224 million [1,554.0%], Fiscal 2020, 1Q: ¥74 million [(93.2)%]

First Three Months

Profit per share(diluted) (¥)

Profit per share (¥)

Fiscal 2021
Fiscal 2020

22.78
10.97

‒
‒

(2) Consolidated Financial Position
Total assets
December 31, 2020
68,052September 30, 2020
70,458

Net assets
47,60546,939(¥ million)

Equity ratio (%)
65.7
62.6

Reference: Equity: December 31, 2020: ¥44,702 million, September 30, 2020: ¥44,106 million

2. Dividends

Dividend per share (¥)
First Quarter

Fiscal 2020
Fiscal 2021
Fiscal 2021 (forecast)Second Quarter‒‒

Third Quarter

Year End

Full Year

10.00

‒

10.00

20.00

10.00

‒

10.00

20.00

Notes: Revisions to recent dividend forecasts: None

3. Forecast of Consolidated Results for Fiscal 2021 (October 1, 2020 to September 30, 2021)(¥ million; percentage figures represent year-on-year changes)

Net sales
Full year

69,800Operating income
4.7%

4,800

5.4%

Notes: Revisions to recent consolidated results forecasts: None

Profit attributable toowners of parent
0.4%
2,600
30.3%

Recurring profit
5,000Profit per
share (¥)
58.96

*Notes(1) Changes to important subsidiaries during the first three months under review (changes in specified subsidiaries resulting
in revised scope of consolidation): None
(2) Application of special accounting methods in the preparation of quarterly consolidated financial statements: None
(3) Changes in accounting principles, accounting estimates and restatements
a. Changes in accounting policies in conjunction with revisions to accounting standards: Noneb. Other changes: Nonec. Changes in accounting estimates: None
d. Restatements: None
(4) Number of shares issued (common stock)a. Number of shares issued at end of the period (including treasury stock):
Fiscal 2021, 1Q end
46,311,389
Fiscal 2020 end
b. Number of treasury stock at end of the period:
Fiscal 2021, 1Q end
2,212,284
Fiscal 2020 end
c. Average number of stock during the period:
Fiscal 2021, first three months
44,099,165
Fiscal 2020, first three months

46,311,389
2,212,221
44,779,375

Note: The number of treasury shares at end of the period includes 93,090 shares of the Company held by EPS EKISHIN Co., Ltd.

* This financial report is outside the scope of the quarterly audit reviews performed by certified public accountants or
auditing firms.
* Explanation concerning the appropriate use of financial forecasts and other notable matters.
Earnings forecasts and other forward-looking statements in this report are based on data currently available to management
and certain assumptions that management believes are reasonable. Actual results may differ materially from these statementsfor various reasons.

Table of Contents of Supplementary Materials
1. Qualitative Information Concerning Quarterly Financial Statements......................................................................... 2(1) Explanation Regarding Consolidated Operating Results ...................................................................................... 2(2) Explanation Concerning Forward-Looking Statements such as Consolidated Financial Forecasts ...................... 4
2. Quarterly Consolidated Financial Statements and Notes ............................................................................................ 5(1) Quarterly Consolidated Balance Sheets ................................................................................................................ 5(2) Quarterly Consolidated Statements of Income and Comprehensive Income ........................................................ 7
Quarterly Consolidated Statements of Income ................................................................................................. 7
Quarterly Consolidated Statements of Comprehensive Income........................................................................ 8(3) Notes Concerning Quarterly Consolidated Financial Statements ......................................................................... 9(Notes Concerning the Going Concern Assumption) ....................................................................................... 9(Notes Concerning Significant Changes in the Amount of Shareholders’ Equity) ........................................... 9(Segment Information) ...................................................................................................................................... 9

1

1. Qualitative Information Concerning Quarterly Financial Statements(1) Explanation Regarding Consolidated Operating Results
Overview of Operating Results for the Three Months Ended December 31, 2020

Net sales
Operating income
Recurring profit
Profit attributable toowners of parent

The First Three Months of
Fiscal 2020
Amount%(¥ million)
15,053
100.0
740
4.9
892
5.9
491

The First Three Months of
Fiscal 2021
Amount%(¥ million)
16,618
100.0
1,449
8.7
1,709
10.3

3.3

1,004

6.0

ChangeAmount(¥ million)
1,564
708
816
513

%
10.4
95.6
91.5
104.5

Forward-looking statements contained in this document are based on the judgment of operating results as of December 31,
2020.
In the three months ended December 31, 2020, both net sales and operating income for the entire Group were solid, andthe impact of COVID-19 on each business was only slight.
The Domestic Business reported year-on-year increases in sales and income in the Contract Research Organization (CRO)Business, where utilization rates improved, especially for monitoring, and in the Contract Sales Organization (CSO)
Business, where every service made steady progress, especially contract medical representative (MR) and drug information(DI) services* for pharmaceutical companies. The Site Management Organization (SMO) Business posted slight declines
in sales and income due to the effects of COVID-19, especially restrictions on visits to medical institutions outside major
metropolitan areas and a decrease in patients visiting hospitals.
In the Overseas Business, the Global Research Business reported lower sales and income, reflecting the fiercelycompetitive environment for winning orders. The EKISHIN (China) Business achieved sales growth, with the resumptionof operations at manufacturing lines in China following a temporary suspension in the first quarter of the previous fiscal
year.
As a result, consolidated net sales were ¥16,618 million, up 10.4% year on year.
Consolidated operating income rose 95.6% year on year, to ¥1,449 million, reflecting a boost from increased net sales andthe effects of implementation of cost structure reforms and reduction of administrative expenses.
* Drug Information (DI) services: Call center services making the latest drug information available to health care
professionals
Operational segment is outlined as follows.
Segment Overview
The Group primarily operates businesses in the following five segments (three domestic segments and two overseas
segments).

Net sales
Operating income
Net sales
SMO
Operating income
Net sales
CSO
Operating income
Net sales
Global Research
Operating income
Net sales
EKISHIN (China)
Operating loss
CRO

Domestic
Business

Overseas
Business

The First Three Monthsof Fiscal 2020(¥ million)
6,926
787
3,509
471
2,831
226
1,016
70
1,160
(355)
2

The First Three Monthsof Fiscal 2021(¥ million)
7,246
1,246
3,356
402
3,184
411
856
25
2,135
(87)

Change(¥ million)
319
459
(152)
(68)
352
184
(159)
(44)
975
268

1) CRO Business
The CRO Business is conducted mainly by EPS Corporation, EP-CRSU Co., Ltd., EP Mediate Co., Ltd., and TTC Co.,
Ltd. In this business, the Group aims to build an EPS platform which provides total solutions, and is engaged in a range ofinitiatives including the establishment of new services such as the creation of a virtual clinical trial framework (VirtualGo) and the acquisition of new knowledge through joint research with academia.
Net sales in this segment came to ¥7,246 million, an increase of ¥319 million, or 4.6%, year on year, and segment operating
income was ¥1,246 million, rising ¥459 million, or 58.4%, year on year.
Performance in the CRO Business by service is as follows.
Clinical trials and post-marketing surveillance (PMS) services
Utilization rates remained high, reflecting steady progress in winning orders under alliance contracts with business partners.
In contrast to struggling sales, reflecting sluggish inquiries in the same period of the previous year, clinical trials and PMS
services saw increases in sales and income on the back of significant improvement in utilization rates, especially formonitoring services and data science services.
Clinical research services
The Group is focusing on strengthening its service framework in face of increasingly diverse clinical research as well as
on enhancing support services from upstream to downstream processes and strengthening sales. Clinical research services
showed gains in sales and income, reflecting brisk inquiries centered on academic projects including investigator-initiatedclinical trials, high utilization rates in clinical research monitoring services, and the effects of cost reductions.
Medical device and other services
The Group is seeking to integrate medical device services and CRO for health-functional food services to strengthen the
non-pharmaceutical CRO business. Compared with the same period of the previous year, medical device services achieved
steady sales expansion in line with market growth. New inquiries about CRO for health-functional food services were also
brisk.
2) SMO Business
The SMO Business is undertaken by EP-SOGO Co., Ltd.
In this business, the Group is striving to secure orders through proposal-based sales activities for existing and new services
targeting clinical trial sponsors and through alliance contracts, and actively executing regional strategies such asconcentrating resources on preferred facilities with good patient recruitment rates, among others.
Net sales in this segment were ¥3,356 million, a decrease of ¥152 million, or 4.4%, year on year. Operating income
decreased ¥68 million, or 14.5%, year on year, to ¥402 million.
In terms of operations, the Group is seeking to increase the efficiency of clinical trials and improve productivity bypromoting the remote review system of the Institutional Review Board (IRB) through the digitalization of clinical trial
related documentation including essential documents. In addition, the Group is deploying a new business model to alleviate
the workload of clinical research coordinators (CRCs) through the central management of clinical trial data by Site DataManagers (SDMs) assigned to medical institutions, and to rapidly recruiting clinical trial patients and reduce clinical trial
costs. Despite brisk inquiries and a large number of projects in progress, the SMO Business posted slight year-on-year
declines in sales and income due to the effects of COVID-19, especially restrictions on visits to medical institutions outsidemajor metropolitan area and a decrease in patients visiting hospitals.
* Site Data Manager (SDM): To enable CRCs to focus on dealing with clinical trial patients and medical staff and recruiting
clinical trial participants, the Group assigns a Clinical Research Associate (CRA) to a medical institution as an SDM
who is exclusively in charge of carefully assessing data and inputting data into the system.
3) CSO Business
The CSO Business is undertaken by EP-PharmaLine Co., Ltd., EP-Force Co., Ltd., and ES-Link Co., Ltd.
Net sales in this segment were ¥3,184 million, an increase of ¥352 million, or 12.4%, year on year. Segment operating
income was ¥411 million, an increase of ¥184 million, or 81.5%, year on year.
Performance in the CRO Business by service is as follows.
3

DI services
DI services registered higher sales, reflecting an increase in new clients who had not outsourced DI operations previously
and the Group's ability to offer pharmaceutical companies value-added services suitable for the turbulent times created by
COVID-19. DI services suffered a slight drop in income in the absence of the effect of highly profitable spot projects likethose seen in the same period of the previous fiscal year.
Contract MR (CMR) services
Decline in demand for CMRs spurred by the pharmaceutical industry’s ongoing MR reductions in recent years came to an
end and inquiries are also on a recovery trajectory. The Group made steady progress with the allocation of personnel to
new projects and utilization rates increased. As a result, CMR services registered gains in sales and income.
Other services
Other services posted increased in sales and income, reflecting the implementation of initiatives in the academic materials
production business, including efforts to strengthen the supply framework both in terms of quality and volume, and good
progress in other services such as post-marketing surveillance support services and pharmaceutical distribution
management.
4) Global Research Business
The Global Research Business comprises EPS International Holdings Co., Ltd. and its overseas group companies, which
conduct the CRO business in Japan, China and the Asia-Pacific region.
Net sales in this business were ¥856 million, a decrease of ¥159 million, or 15.7%, year on year. Operating income cameto ¥25 million, a decrease of ¥44 million, or 63.3%, year on year.
New orders from overseas for trials within Japan were weak due to intensified competition with global CROs.
In the CRO business in China, inquiries increased in tandem with market expansion, especially at Beijing Global
Pharmaceutical Research Co., Ltd. (G&P), a Chinese CRO acquired the previous fiscal year. However, business wasaffected by the postponement of some clinical trials.
In the Asia-Pacific region, the Group focused on winning orders for projects in each country and the effects of building abusiness base became evident.
5) EKISHIN (China) Business
The EKISHIN (China) Business comprises the two regional holding companies EPS EKISHIN Co., Ltd. and EPS (China)
Co., Ltd., and related overseas Group companies.
In this business, under a solid capital and business partnership with SUZUKEN Co., Ltd., the Group provides productrelated services centered on pharmaceuticals and medical devices, international trade related services and peripheral
support services and is working to further expand earnings.
Net sales in this business were ¥2,135 million, an increase of ¥975 million, or 84.1%, year on year, and operating losses
were ¥87 million (¥355 million in operating losses posted in the same period of the previous fiscal year).
In the EKISHIN business, earnings are driven by pharmaceutical manufacturing and sales, and efforts are also being madeto strengthen profitability through the careful selection of sales channels. Looking at sales and income, during the firstquarter of the previous fiscal year, the temporary suspension of manufacturing lines had a negative impact. However,
manufacturing operations have since resumed and, as a result, sales increased. In China, same as in other countries, thenumber of patients visiting medical institutions has decreased since the outbreak of the COVID-19 pandemic and sales
continue to be negatively impacted.
(2) Explanation Concerning Forward-Looking Statements such as Consolidated Financial Forecasts
There have been no changes to the consolidated financial forecasts announced in the financial report for the fiscal year
ended September 30, 2020 issued on November 5, 2020.

4

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets(¥ million)

As of September 30, 2020
(Previous Fiscal Year-End)
AssetsCurrent assets
Cash and time deposits
Notes and accounts receivable - tradeMarketable securities
Merchandise and finished goods
Work in process
Other current assets
Less: Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Intangible fixed assets
Goodwill
Other intangible fixed assets
Total intangible fixed assets
Investments and other assets
Investment securities
Lease and guarantee deposits
Other investments and other assets
Total investments and other assets
Total fixed assets
Total assets
Liabilities
Current liabilities
Accounts payable - trade
Short-term loans
Current portion of long-term loans payable
Income taxes payable
Allowance for employees’ bonuses
Provision for loss on order received
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Allowance for directors’ and corporate auditors’
retirement benefits
Net defined benefit liability
Asset retirement obligations
Other non-current liabilities
Total non-current liabilities
Total liabilities

5

As of December 31, 2020
(End of the First Three
Months)22,127
16,313
1,378
1,002
1,752
3,494
(159)

19,537
15,855
1,479
989
2,340
3,957
(168)

45,90943,992

7,244

7,311

5,984
1,438

5,687
1,439

7,422

7,126

3,690
1,984
4,206

4,281
2,011
3,327

9,880

9,621

24,54824,05970,45868,052

753
3,465
209
2,104
3,554
296
9,835

959
3,765
159
134
1,455
263
10,546

20,21917,284

204

202

110

71

1,767
580
636

1,703
578
607

3,299

3,162

23,51820,446(¥ million)

As of September 30, 2020
(Previous Fiscal Year-End)As of December 31, 2020
(End of the First Three
Months)Net assets
Shareholders’ equity
Capital stock
Additional paid-in capital
Retained earnings
Treasury common stock, at cost

3,888
13,38229,007(2,802)

3,888
13,37329,570(2,802)

Total shareholders’ equity

43,47544,029

164
559
(93)

175
575
(78)

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans

630

672

Non-controlling interests

Total accumulated other comprehensive income

2,833

2,902

Total net assets

46,93947,60570,45868,052

Total liabilities and net assets

6

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income(¥ million)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Gain on insurance cancellation
Foreign exchange gains
Other non-operating income
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Recurring profit
Profit before income taxes
Income taxes
Income tax adjustment
Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

7

First Three Months of
Fiscal 2020
(October 1, 2019
to December 31, 2019)15,053
10,889
4,164
3,423
740

First Three Months of
Fiscal 2021
(October 1, 2020
to December 31, 2020)
16,618
11,205
5,412
3,963
1,449

26
19
25
61
51
184

30
27
105
31
70
265

3
28
32
892
892
(203)
748
545
347
(144)
491

4
0
5
1,709
1,709
59
525
584
1,124
119
1,004

Quarterly Consolidated Statements of Comprehensive Income(¥ million)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

8

First Three Months of
Fiscal 2020
(October 1, 2019
to December 31, 2019)
347

First Three Months of
Fiscal 2021
(October 1, 2020
to December 31, 2020)
1,124

(449)
147
29

10
74
15

0

(0)

(273)

99

74

1,224

154

1,046

(80)

177

(3) Notes Concerning Quarterly Consolidated Financial Statements(Notes Concerning the Going Concern Assumption)
None(Notes Concerning Significant Changes in the Amount of Shareholders’ Equity)
None(Segment Information)
I. The First Three Months of Fiscal 2020 (From October 1, 2019 to December 31, 2019)
1. Information Concerning Net Sales and Operating Income for Each Segment(¥ million)
GlobalResearch

EKISHIN(China)Others

2,802

957

1,158

113

15,053–

15,053

8

29

59

1

419

922

(922)

–

6,926

3,509

2,831

1,016

1,160

532

15,976(922)

15,053

787

471

226

70

(355)

30

1,230

(489)

740

CRO

SMO

CSO

6,522

3,500

404

Total
Segment operating
incomeNet sales
Sales to outside
customers
Inter-segment
sales and transfers

Amountrecorded on
Adjustment quarterly(Note 1) consolidated
statements ofincomeTotal

Notes: 1. Adjustment for operating income of ¥(489) million includes intersegment transactions of ¥7 million and nonattributable corporate expenses not distributed to each segment of ¥(497) million. The main corporate expenses
comprise expenses related to the Company (the holding company).
2. EPS Associates Co., Ltd. and EPS International Holdings Co., Ltd. merged on October 1, 2019. EPS Associates
Co., Ltd. was the surviving company in the merger by absorption upon which its name was changed to EPSInternational Holdings Co., Ltd. Accompanying this, it was moved from the CRO Business to the Global
Research Business segment.
II. The First Three Months of Fiscal 2021 (From October 1, 2020 to December 31, 2020)
1. Information Concerning Net Sales and Operating Income for Each Segment(¥ million)
GlobalResearch

EKISHIN(China)Others

3,179

769

2,130

70

16,618–

16,618

6

4

87

5

730

961

(961)

–

7,246

3,356

3,184

856

2,135

800

17,579(961)

16,618

1,246

402

411

25

(87)

(7)

1,992

(542)

1,449

CRO

SMO

CSO

7,118

3,350

127

Total
Segment operating
incomeNet sales
Sales to outside
customers
Inter-segment
sales and transfers

Amountrecorded on
Adjustment quarterly(Note 1) consolidated
statements ofincomeTotal

Note: Adjustment for operating income of ¥(542) million includes intersegment transactions of ¥3 million and nonattributable corporate expenses not distributed to each segment of ¥(546) million. The main corporate expenses
comprise expenses related to the Company (the holding company).

9