Financial Results Briefing for the First Half of the Fiscal Year Ending March 31, 2017

Transcription

1 Total commitment to good health Financial Results Briefing for the First Half of the Fiscal Year Ending March 31, 2017 November 16, 2016 (Wed) Notice Statements contained in this presentation that are not historical facts are forward-looking statements that reflect our plans, expectations, strategies and convictions, and involve known and unknown risks and uncertainties. These statements are based on currently available information and represent the beliefs of the management of Toho Holdings Co., Ltd. These statements are subject to numerous risks and uncertainties that could cause actual results, performance and achievements to differ materially from those described or implied in the forward-looking statements. Since many factors could cause the actual results to differ substantially from these forward-looking statements, investors are advised to avoid undue reliance on the latter. This presentation has not been prepared for the purpose of stimulating investment. Any decision to invest is the sole responsibility of the individual investor.

2 Contents 1. Financial Highlights for the First Half of Fiscal Year Ending March 31, 2017 and Forecast for Fiscal Year Ending March 31, 2017 Hiromi Edahiro, President and Representative Director of Toho Pharmaceutical Co., Ltd. 2. KYOSOMIRAI PHARMA CO., LTD., a New Business Line of TOHO HOLDINGS Atsushi Udoh, President and Representative Director of KYOSOMIRAI PHARMA CO., LTD. 3. Group Strategy Norio Hamada, President and Representative Director 2

3 Financial Highlights for the First Half of Fiscal Year Ending March 31, 2017 and Forecast for Fiscal Year Ending March 31, 2017 Hiromi Edahiro, President and Representative Director of Toho Pharmaceutical Co., Ltd.

4 Financial Highlights for the First Half of Fiscal Year Ending March 2017 Results fell short of the initial forecasts owing to several factors, such as lower-than-anticipated of the curative drugs for hepatitis C and delayed responses to the revised dispensing fees. Full-year earnings forecasts have been revised downward because market conditions will remain tough. Meanwhile,, operating income, ordinary income and income* all increased on a year-onyear basis. * Profit attributable to owners of parent has been omitted. 4

5 Profit and Loss Statement (Consolidated) 1st half of FY ended March st half of FY ending March 2017 Forecasts Results Year on Year Incr. or Decr. (%) Revised forecasts for FY ending March 2016 Unit:million Yen Progress (%) Net 602, , , ,235, G r o s s income 54, , , , S G & A 47, , , , Operating income Ordinary income 6, , , , , , , , Net income 4, , , ,

6 Balance Sheet (Consolidated) 1st half of FY ended March 2016 Proportion (%) 1st half of FY ending March 2017 Proportion (%) Incr. or Decr. Current assets 474, , ,801 Unit:million Yen Major factors behind the increase or decrease Increase in cash and deposits of 8,787 Decrease in accounts receivable-trade of 51,562 Noncurrent a s s e t s 167, , ,170 Increase in investment securities of 1,142 Decrease in property, plant and equipment of 1,097 Decrease in goodwill of 976 Total assets 642, , ,971 C u r r e n t liabilities 421, , ,751 Noncurrent liabilities 46, , ,292 Total liabilities 468, , ,043 Decrease in accounts payable-trade of 36,984 Decrease in income taxes payable of 7,364 Decrease in long-term loans payable of 1,079 Net assets 174, , ,072 Increase in retained earnings of 5,858 Total liabilities and assets 642, , ,971 Shareholder s equity ratio : FY %, 1st half of FY % 6

7 SG&A (Year on Year) < Year on Year > Others 19.4 billion yen +0.1 billion yen Others 19.5 billion yen Others billion yen Pharmaceutical wholesaling business: billion yen (Decrease in vehicle expenses of -0.1 billion yen, decrease in depreciation of 0.14 billion yen, decrease in amortization of goodwill of -0.1 billion yen, increase in tax rate through external standards taxation of 0.15 billion yen) Dispensing pharmacy business: billion yen (New openings of dispensing pharmacies) Personal costs 28.5 billion yen 1st half of FY 2016 Personal costs 28.5 billion yen 1st half of FY 2017 Personal costs -20 million yen Pharmaceutical wholesaling business: -0.3 billion yen (Personnel reductions by efficiency of operations) Dispensing pharmacy business: billion yen (Increase in personnel in line with new openings of dispensing pharmacies) 7

8 Capital Investment and Depreciation <Capital Investment> FY 2017 (Forecasts) Forecasts: 10,365 million yen 1. Hiroshima Distribution Center: 4,365 million yen (Building, System) 2. Pharmaceutical office: 3,960 million yen (New construction and relocation of office (8 offices)) 3. Others: 2,040 million yen 1st half of FY 2017 (Results) Results: 1,970 million yen 1. Pharmaceutical office: 310 million yen (New construction and relocation of office (1 office)) 2. Development of new mission-critical system: 237 million yen 3. Others: 1,423 million yen < Depreciation > FY 2017 (Forecasts) 1st half of FY 2017 (Results) 4,777 million yen 2,208 million yen 8

9 Cash Flow Cash and cash equivalents at the beginning of period 1st half of FY st half of FY ,550 27,854 Unit:million Yen Major factors for 1st half of FY 2017 Operating activities ,233 Income before income tax: 10,581 Decrease in notes and accounts receivable-trade: 51,542 Decrease in notes and accounts payable-trade: -36,984 Income taxes paid: -11,435 Investment activities -3,044-3,595 Purchase of property, plant and equipment: -1,167 Purchase of stocks of subsidiaries and affiliates: -2,133 Financing activities -6,801-5,264 Repayment of short-term loans payable: -1,722 Repayment of long-term loans payable: -1,532 Cash dividends paid: -1,029 Cash and cash equivalents at the end of period 30,636 36,228 Increase(1st half of FY2017): 8,374 9

10 Profit and Loss Statement (Pharmaceutical Wholesaling Business) Unit:million Yen 1st half of FY ended March st half of FY ending March 2017 Forecasts Results Year on Year Incr. or Decr. (%) Revised forecasts for FY ending March 2016 Progress (%) Net 577, , , ,184, G r o s s income 37, , , , S G & A 32, , , , Operating income Ordinary income 5, , , , , , , , Net income 4, , , ,

11 Profit and Loss Statement (Dispensing Pharmacy Business) Unit:million Yen 1st half of FY ended March st half of FY ending March 2017 Forecasts Results Year on Year Incr. or Decr. (%) Revised forecasts for FY ending March 2016 Progress (%) Net 47,630 49,600 47, , G r o s s income 16, , , , S G & A 15, , , , Operating income , ,

12 Major Management Index FY 2015 FY st half of FY 2017 Equity Ratio 26.22% 27.17% 30.06% Number of months to collect accounts receivables Price Book-Value Ratio (PBR) 2.67 months 2.62 months 2.54 months

13 Forecast for Fiscal Year Ending March 2017 (Consolidated) Unit:million Yen FY ended March 2016 Initial forecasts FY ending March 2017 Revised forecasts Change from the Initial forecasts YoY Change Incr. or Decr. Incr. or Decr. (%) Incr. or Decr. Incr. or Decr. (%) Net 1,308,474 1,285,000 1,235,000-50, , G r o s s income 125, , , , , S G & A 97, , , , Operating income Ordinary income 28, , , , , , , , , , Net income 21, , , , ,

14 Forecast for Fiscal Year Ending March 2017 (Pharmaceutical Wholesaling Business) Unit:million Yen FY ended March 2016 Initial forecasts FY ending March 2017 Revised forecasts Change from the Initial forecasts YoY Change Incr. or Decr. Incr. or Decr. (%) Incr. or Decr. Incr. or Decr. (%) Net 1,255,431 1,231,000 1,184,000-47, , G r o s s income 91, , , , , S G & A 64, , , Operating income Ordinary income 27, , , , , , , , , , Net income 20, , , , ,

15 Forecast for Fiscal Year Ending March 2017 (Dispensing Pharmacy Business) Unit:million Yen FY ended March 2016 Initial forecasts FY ending March 2017 Revised forecasts Change from the Initial forecasts YoY Change Incr. or Decr. Incr. or Decr. (%) Incr. or Decr. Incr. or Decr. (%) Net 99, ,500 96,000-4, , G r o s s income 33, , , , , S G & A 31, , , Operating income 2, , , , ,

16 Review of 1st Half and Issues of Fiscal Year Ending March 31, 2017 (Pharmaceutical Wholesaling Business) Review of 1st half of fiscal year ending March 31, 2017 Despite increases in both and income, the results fell short of the forecasts Lower-than-forecast of the curative drugs for hepatitis C Negative growth in products other than the drugs for hepatitis C Reduction of NHI drug price Increase in the purchasing cost ratio Expansion of generic drugs < Composition of by category > 1st half of FY ended March st half of FY ending March 2017 Proportion YoY Rate Proportion YoY Rate Drugs for premium to promote the development of new drugs and eliminate off-label use 24.1% 18.0% 29.8% 19.2% Patented drugs, others 36.7% 10.2% 36.7% -3.3% Long- listed original drugs 29.2% -11.4% 22.4% -26.1% Generic drugs 10.0% 18.9% 11.1% 4.5% < Contract rate > 2014/3 2014/9 2015/3 2015/9 2016/3 2016/9 Value Basis 98.8% 92.8% 97.1% 98.2% 99.7% 93.3% Number Basis 99.6% 87.4% 97.4% 92.7% 100.0% 79.7% Issues of Fiscal Year Ending March 31, 2017 Fair unit price per item for re-negotiating partners, through item implementations of excluded item goods Re-focus on earnings recovery Speedy dissemination of customer support systems 16

17 Operational Expansion in Pharmaceutical Wholesaling Business September, 2016 Seven member companies of TaiyoYakuhin Group became a wholly owned subsidiaries Business Area Previous company name New company name (As of November 1, 2016) Yamaguchi Taiyo-yakuhin Yamaguchi Kyoso Mirai Yamaguchi Pharmaceutical Hiroshima Taiyo-yakuhin Chugoku Hanbai Kyoso Mirai Hiroshima Pharmaceutical Fukuoka Shinei-yakuhin Kyoso Mirai Fukuoka Pharmaceutical Oita Taiyo-yakuhin Kyoso Mirai Oita Pharmaceutical Kumamoto Taiyo-yakuhin Kyoso Mirai Kumamoto Pharmaceutical Kagoshima Taiyo-yakuhin Kyoso Mirai Kogashima Pharmaceutical Okinawa Okinawa Taiyo-yakuhin Kyoso Mirai Okinawa Pharmaceutical October, 2016 TAISYODO became a wholly owned subsidiary (Business area: Shiga, Mie) January, 2017 MCOM Kyushu will be a wholly owned subsidiary (Business area: Fukuoka) 17

18 KYOSOMIRAI PHARMA CO., LTD., a New Business Line of TOHO HOLDINGS Atsushi Udoh, President and Representative Director of KYOSOMIRAI PHARMA CO., LTD.

19 KYOSOMIRAI PHARMA Entry into development/production/ businesses of prescription pharmaceuticals centering on generic drugs Environment surrounding generic drugs - A number of existing generic drugs for an identical ingredient (Number of manufacturing suppliers to our company: 185) - Multiple price ranges for an identical ingredient - While generic drugs account for 10 our company s, they occupy 55 the Center s space - Heavy burdens on purchasing, stock, returning goods, collection and emergency deliveries, etc. - Product selection remains an issue for medical institutions, pharmacies, and patients (Reliability in quality / stable supply, an excessive number of items) - Excessive capital investments by generic drug makers will continue Significance of establishing KYOSOMIRAI PHARMA - Ensuring of quality through its unique verification systems such as elution testing - Development and stable supply of high-quality / high-value-added generic drugs - Consolidation of existing products into several suppliers - Optimization of the pharmaceutical supply chain from production to distribution/prescription based on precise predictions of market demands in collaboration with Pharmaceutical Wholesaling Business - Taking on the challenge of developing and selling specialty drugs as well Head Office Marunouchi Office Capital Executives 1-4-4Hiromachi, Shinagawa-ku, Tokyo , Japan GranTokyo South Tower 12F, Marunouchi, Chiyoda-ku, Tokyo , Japan million yen Representative director and senior advisor: Norio Hamada Representative director and chairman: Ryuzo Takada Representative director and president: Atsushi Udoh Exective vice president: Yasuyuki Kumada Part-time director: Seiji Ohara Auditor: Takaho Hirano Newspaper advertisement (November,1) Yomiuri Shimbun The Asahi Shimbun The Nikkei 19

20 Group Strategy Norio Hamada, President and Representative Director

21 TBC Hiroshima Name Location Space Expected date of the start of construction TBC Hiroshima Asaminami-ku, Hiroshima-shi, Hiroshima prefecture about 31,015 m2 December,2016 Expected date of the completion in Fiscal Year Ending March 2019 Capital investment amount about 16 billion yen Countermeasure to cope with potential labor shortages due to a population decline Construction of a framework where pharmaceuticals can be supplied even in time of a disaster by mobilizing a minimum number of personnel Pursue more efficiency and rationalization in addition to utilizing the know-how of automation cultivated in TBC Saitama distribution center Aim for 90 % automation in piece picking (65% in TBC Saitama) 21

22 Fee Business (Gross Profit) Unit: billion yen Meissa 3.49 Customer Support System (forecasts) Customer support system st half 2nd half Full year 1st half 2nd half Full year 1st half 2nd half Full year 1st half 2nd half Full year 1st half 2nd half Full year 1st half (result) FY ended FY ended FY ended FY ended FY ended March 2012 March 2013 March 2014 March 2015 March Full year (forecast) FY ending March 2017 Meissa Meissa (MS Promotion System) FY ending March st half (results):1.21 billion yen 2nd half (forecasts):1.24 billion yen Full year (forecasts):2.45 billion yen Number of contracts with pharmaceutical companies: 7 companies (full year) / 6 companies (spot) 22

23 Customer Support Systems = Our original Pharmacy Clinic Hospital Home nursing station Business support Support for separation of pharmacy and clinic Added Value Support for start in practice ENIF ENIF-Pharma Series Wholesale in Small Lots (PFP) ENIF me Receipt computer ENIFvoice SP ENIFvoice SP+A ENI-PHARMACY ENIFclub Study Groups of Kyoso Mirai Group in Pharmacy Call Centers Temporally Transferred Pharmacist Hitonowa.com ekenkoshop Support for opening of new pharmacies Clinic appointment booking Initial examination reservation Business support Added Value Support for start in practice LXMATE HeLios Brief version on the Inter SELENE Initial examination reservation service ENIF Wholesale in Small Lots (PFP) ENIFme Electronic chart Receipt computer ENIFclub ENIF vision Call Centers Nutritionists The website creation service (linked to the appointment system) Support for opening of new Clinics Clinic appointment booking Business support Support for separation of pharmacy and clinic Added Value LXMATE-Ⅴ ENIF Wholesale in Small Lots (PFP) ENIFwin Nex-Sus Electronic chart Receipt computer SPD ENI-PHARMACY ENIFclub ENIF vision Call Centers Nutritionists Hitonowa.com MD management Business support Added Value ENIF Nurse ENIF me ekenkoshop 23

24 Overview of the major customer support systems Product name Outline ENIFvoiceSP Launched: 2010 Support for improving efficiency in medication counseling and the preparation of the medication history of a patient as well as up skilling at pharmacies by introducing voice input systems 47 pharmaceutical universities across the country use the system in student education. Initial examination reservation service Launched: 2012 Constructed an Inter environment where a new patient can easily book the first medical examination via a medical institution s website or medical institutions search site. It also enables a patient to reserve a re-examination and/or a thorough medical checkup. Actual Results (as of October 31,2016) Number of and contract: 8,000 sets Number of account registration: 7,210 doors Byouin-Navi The most viewed web-portal site for finding hospitals/clinics in Japan It gives information with high accuracy and instant by using our own detailed data MSs collect. In combination with initial examination reservation service, you can complete a procedure from searching for medical institutions to booking. Contained data of medical institutions: 220,000 Number of site visitors :9,025,680 persons (in October 2016) 24

25 ENIFvoice SP Main introduction pharmacy groups Welcia Gloup, TSURUHA, Matsumotokiyoshi, Tomodo s, cocokara fine, CREATE SD, Aisei Pharmacy, FUJIYAKUHIN, KUSURI NO AOKI, etc 47 universities adopt this system for their student education Number of and contract 8,000 sets (as of October 31,2016) Hokkaido University University of Shizuoka Teikyo Heisei University Hokuriku University Himeji Dokkyo University Tohoku University Nagoya City University Tokyo University of Science Aichi Gakuin University Mukogawa Women's University Chiba University Health Sciences University of Hokkaido Toho University Kinjo Gakuin University SHUJITSU UNIVERSITY The University of Tokyo Hokkaido College of Pharmacy Nihon University Meijo University University of Toyama Aomori University Kitasato University Kanazawa University Iwate Medical University Keio University Kyoto University Osaka University Okayama University Hiroshima University Tokushima University Kyushu University Nagasaki University Kumamoto University Gifu Pharmaceutical University Tohoku Medical and Pharmaceutical University Iwaki Meisei University Ohu University International University of Health and Welfare Takasaki University of Health and Welfare Josai University Nihon Pharmaceutical University Josai International University Chiba Institute of Science Showa University Showa Pharmaceutical University Tokyo University of Pharmacy and Life Sciences Hoshi University Suzuka University of Medical Science Kyoto Pharmaceutical University Doshisha Women's College of Liberal Arts Ritsumeikan University Osaka Ohtani University Osaka University of Pharmaceutical Sciences Hiroshima International University Fukuyama University Yasuda Women's University Tokushima Bunri University( Tokushima) Tokushima Bunri University (Kagawa) Tokushima Bunri University Daiichi University, College of Pharmaceutical Sciences Musashino University Kindai University Fukuoka University Meiji Pharmaceutical University Setsunan University Nagasaki International University Teikyo University Kobe Gakuin University Sojo University Yokohama University of Pharmacy Nigata University of Pharmacy and Applied Life Sciences Kobe Pharmaceutical University Hyogo University of Health Sciences Kyushu University of Health and Welfare 25

26 ENIFvoice SP+A (All-in-One Automatic Voice-recognition and Electronic Medication History Recording System) All-in-one ENIFvoiceSP and electronic medication history recording system, namely ENIFvoiceSP+A, is in preparation for the launch ❶ Achieve price reductions by integrating with electronic medication history recording ❷ Contribute to business improvement by storing data in a cloud Patient s data and the voice-recognition function for each pharmacist can be used in other stores The current prescription can be compared with the past data Mutual effects / side effects are to be timely checked Prompt data recovery in time of a disaster System Configuration Receipt Computer Cloud ENIFvoice SP+A (Voice input + Electronic Medication History Recording ) Hearing Tablet Medication history can be prepared faceto-face in parallel with medication counseling 26

27 ENIF NURSE (Supporting Terminal Equipped with Automatic Voice Recognition System for Visiting Nurses) With new functions being added, full-scale introduction started in October Will improve the working environment for visiting nurses, who are key players in community medical care Visit to a home medical care patient Information sharing among home medical care doctors and nurses Preparation of documents/reports ENIF NURSE will enable a visiting nurse to visit 5 patients per day, up from 3.5 before the introduction Conventional functions - Equipped with a voice recognition system exclusively for visiting nurses - Prepare documents/reports on visiting nursing care - The group talk function enables a visiting nurse to contact/share information with other nurses and/or his/her office - Provide applications that are instrumental to services, including the distribution of information on new drugs and nutritional foods, and the searching of pharmaceuticals and medical materials New functions - Login by means of voice input / User (patient) searching - Implementation items are added in the relevant document (making customization by each visiting nurse station possible - Handling of various entry forms - Vital signs (pulse beat, blood pressure, respiration rate, body temperature, etc.) are inputted through voice entry - Vital signs / medical test values for the past 20 occasions are shown graphically - Improvement in the PC output format 27

28 Dispensing Pharmacy Business Number of stores (as of September 30, 2016) Toho Holdings 4 companies 82 stores PharmaCluster 5 companies 454 stores Total 9 companies 536 stores Kyoso Mirai Group in Pharmacy 7,000 6,000 Consolidated Subsidiaries Non-Consolidated Subsidiaries 7 companies 48 stores 13 companies 62 stores 20 companies 110 stores Affiliates Companies 1 company 9 stores 2 companies 78 stores 3 companies 87 stores Members 6,557companies 18,005 stores( as of September 30, 2016 ) Total 12 companies 139 stores 20 companies 594 stores 32 companies 733 stores 18,000 16,000 5,000 4,000 3,000 2,000 1,000 0 Company Store 14/3 14/4 14/5 14/6 14/7 14/8 14/9 14/1014/1114/12 15/1 15/2 15/3 15/4 15/5 15/6 15/7 15/8 15/9 15/1015/1115/12 16/1 16/2 16/3 16/4 16/5 16/6 16/7 16/8 16/9 14,000 12,000 10,000 8,000 6,000 4,000 2,

29 Mirai Nursery We are the first pharmaceutical wholesaling company that established an in-house nursery facility Location Capacity Target Open hours Closed days in TBC Sapporo building 15 children Infants and toddlers of all employees working in TBC Sapporo building 8:15 a.m.~7:15 p.m., weekdays Saturday, Sunday, National holiday, New year s holiday (December 30~January 3) TBC Sapporo Suggestions from staff members have been adopted for the nursery s name and signboard design 29

30 International Business Continue surveys/research to prepare for business development in the pharmaceutical distribution / medical-related services / health care markets mainly in the Asian region such as China Construct a business foundation through a capital/business affiliation with a locally influential company Search for business development opportunities in locations where market growth can be expected, such as Vietnam, Malaysia, Indonesia, and Myanmar. 30

31 Dividend Outlook Dividend forecast An annual dividend for FY ended March 2016 was 28 yen per share, consisting of interim dividends of 13 yen and year end dividends of 15 yen. We plan to pay the annual dividend of 30 yen per share, consisting of interim and year end dividends of 15 yen each, for the fiscal year ending March Interim Year End Annual Dividend FY ended March yen 12 yen 24 yen FY ended March yen 15 yen 28 yen FY ending March yen 15 yen 30 yen Our policies for dividends We remain committed to a flexible distribution policy that takes account of results during each period, while also ensuring the enhancement of our future revenue base and the retention of sufficient earnings to allow for market fluctuations 31

32 KyosoMirai Total commitment to good health Front office in charge of IR PR&IR Office/Corporate Planning Division