Results of Operations for the First Half of the Fiscal...
Transcript of Results of Operations for the First Half of the Fiscal...
October 27, 2017
Results of Operations for the First Half of the
Fiscal Year Ending March 31, 2018
Shinkatsu Morisawa, President
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(Securities Identification Code: 6788)
IR Contact: Business Strategy & Management Dept. (TEL: +81-(0)6-6456-4633 E-mail: [email protected])
The information, forecasts, etc. available in this material are the Company’s judgment as of the preparation date thereof and do not always
guarantee the accuracy of these information. Further, the Company and the information provider will not be responsible for any damages
incurred according to these information. * The material is not prepared for the purpose of soliciting investments.
1. Overview of the Nihon Trim Group Business
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With an entrepreneurial spirit in mind,
the Trim Group is aspiring
to become a global group of medical companies!
Water Healthcare Business
Drinking water
Electrolyzed hydrogen water (EHW)
apparatus
Overseas
EHW apparatus (China, Taiwan and
South Korea)
Bottled water (Indonesia)
Agriculture
Kangen Vegetable
Medical
Electrolyzed water hemodialysis
Hospital operation (China)
Advanced medical care
Cord blood bank
Development of Japanese cell
medicines
Regenerative/reproductive
medicine-related equipment
Medical / Advanced Medical Care Business
1. Further uncovering the effects of EHW
2. Shifting to the B-to-B oriented package sales with “Health
and Productivity Management” as a key concept
3. Expanding business overseas
4. Starting a full-scale sales of the electrolyzed water
hemodialysis
5. Hospital operation in China
6. Strengthening and expanding the foundation of
regenerative medicine-related business
Trim Group’s Challenges
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日本トリム日本トリム日本トリム日本トリム
Medical equipment manufacture certification number:
229AGBZX00069000
A Groundbreaking New Product Released on Sep. 1
1. Developed by applying technologies implemented in
electrolyzed water hemodialysis
2. A medical device that can produce up to approx.
1,300 ppb hydrogen rich water (three times as rich
as that produced by the conventional model)
3. Runs at the cost of only approx. 7 yen per liter (when
used for 5 years with replacement of a cartridge
once a year)
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Effect: improvement of gastrointestinal conditions
“Yomiuri Shimbun” Dec. 7, 2016 Morning Edition “Nikkei Shimbun” January 11, 2017 Morning Edition
“Yomiuri Shimbun” February 28, 2017 Evening Edition
Shifting Sales Approach to Focus on Proposing
“Health and Productivity Management”
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Health and Productivity Management site in Nihon Trim website
Pursuing a lump-sum purchase contract by
promoting the concept to corporate customers
Strengthening B-to-B sales with “Health and
Productivity Management” as a key concept
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Certificate for Excellent Enterprise for Health and
Productivity Management (White 500)
Towards Improving Sales Efficiency
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0.5
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1.5
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2.5
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Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
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Workplace sales efficiency by month
[Basic Research Field]
[Medical/Preventative Medical Care Field]
[Agricultural and Livestock Field]
Uncovering More Functions of EHW
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Continue to establish more definitive evidences to increase the penetration rate
for EHW apparatus and thereby to expand business
1. Riken, National Research and Development
AgencyIdentifying the mechanism of EHW
2. Karolinska InstituteUnderstanding the effects on reducing depression by drinking
EHW
3. School of Engineering, The University of Tokyo Identifying the physical properties of EHW
4. Kochi University of Technology Understanding the effects of EHW-ice on maintaining freshness
5. Ritsumeikan University Graduate School of
Sport and Health Science
Understanding the physiological effects of EHW drinking during
dehydration or physical exercise
6. School of Medical Science, Tohoku UniversityElectrolyzed water hemodialysis (clinical studies)/Effects on drinking EHW on diabetes
(clinical studies)
7. Clinical Laboratory Sciences and Medical
Biotechnology, National Taiwan University Electrolyzed water hemodialysis (clinical studies)
8. Kochi Medical SchoolEffects of drinking EHW on lifestyle diseases (clinical studies)
Effects on reduction of healthcare expenditures (epidemiological survey)
9. Faculty of Agriculture and Agricultural Science Program,
Kochi UniversityDemonstration of Kangen Vegetables
10. Obihiro University of Agriculture and Veterinary Medicine Effects on preventing gastric ulcers of race horses by drinking EHW
RIKEN
Target: 3 million units
1) A penetration rate of 20% will give the market size of 10 million units in volume
and 1 trillion yen in value (assuming a current penetration rate of approx. 6% and a
market share of 30%).
2) Achieving the targeted 3 million units will result in annual purification cartridge
sales of 20 billion yen (assuming replacement rate of 70%).
Establishing a Stable Earnings Foundation
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FY3/12FY3/11 FY3/13 FY3/14 FY3/15 FY3/17FY3/16 FY3/18
Forecast
2,2192,417
2,649
3,062 3,114
3,536
3,884
(Millions of yen)
Purification cartridge sales by year
2,189(1st half of FY3/18)
4,199
Expanding Sales Channels to Overseas
Overseas annual sales of EHW apparatus to reach
10 thousand units in 3 years
2. New customers development accelerated1) Vietnam: Started in-store sales mainly in Hanoi with the target sales
of 2,000 units for Fiscal 2017
2) China: Planning to expand into major cities with the target sales of
2,000 units for Fiscal 2017
3) Other markets to be developed going forward: Include India, Sri
Lanka, Malaysia, Thailand, Cambodia, the Philippines, and
Myanmar Opening ceremony in Vietnam (Sep. 2017)
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1. Bottled water business in Indonesia
PT. SUPER WAHANA TEHNOThe bottled water market is expanding (to approx. 130 billion yen).
Since November 2016, the production capacity of PET bottles and gallon
bottles has increased two-fold and five-fold, respectively.
Full scaled activities underway, centering on the western part of Java
Island with approx. 24 thousand outlets nation-wide.
Expanded into a 10 billion yen business
EHW apparatus for agricultural use: AG-30
1. First half results: 19 units
2. Next-generation, Dutch-style vegetable growing facility
1) 7,300m2, eave height 5.5m, construction cost approx. 340 million
yen
2) A project subsidized by the Ministry of Agriculture, Forestry and
Fisheries (for Fiscal 2016)
3) Started the second season cultivation of bell pepper since
September 2017
4. Started an experimental cultivation in the City of Noshiro as part of
feasibility study since May 2017
Next-generation greenhouse in the City of Nankoku
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Towards Promoting Kangen Vegetables
Targeted to achieve sales of 100 million yen for FY3/19
Enhancing Sales Promotion of
Electrolyzed Water Hemodialysis
Targeted to achieve sales of 200 million yen for FY3/1913
2. Electrolyzed Water Hemodialysis can reduce side effects and improve QOL
of dialysis patients� Mortality rate and risk of complication reduced by 41% (based on the results of a 5-year prognosis study,
on which a paper has been submitted and is currently under review)
� Fatigue and itchiness after dialysis are mitigated, dosage of antihypertensive drugs reduced (on which a
paper has been published in the September edition of “PLOS ONE”)
* Orders of over 60 million yen were received in October.
* Mortality rate: 9.6% (2015 JSDT statistics data)
* Transfer due to death or complication reduced by 41%
(presented by Dr. Masaaki Nakayama at the 62nd
Annual Meeting of the Japanese Society for Dialysis)
90
82
74
67
61
94
89
84
8077
Reducing the Number of Patients Who Newly Developed Cardiovascular and Cerebrovascular Disorder or Have Deceased
Assuming 25 beds and 100 patients
Years lapsed
(No. of patients)
Electrolyzed water hemodialysisTransfer out
Transfer out
No. of patients receiving electrolyzed water hemodialysis
Conventional dialysis
1. Benefits to hospital management
Electrolyzed Water Hemodialysis can:
� Decrease revenue from conventional dialysis
and reduce drug costs, as well as labor costs
(by mitigating the burden on nursing staff and
medical technicians)
� Increase a fee for medical services to reduce
mortality risk
* A hospital with 25 beds and 100 patients is
estimated to have a positive effect of approx.
300 million yen in 5 years.
No. of patients receiving conventional hemodialysis
1 year 2 years 3 years 4 years 5 years
100
90
80
70
60
50
Increase in referral
Providing Japanese-style medical services at “Han Kun Hospital” for treatments of diabetes and
dialytic therapy
1) Flagship hospital to be opened in Beijing by the end of 2017, the opening ceremony
scheduled in January 2018.
2) Started negotiation with additional multiple candidate districts and other activities to
expand the hospital chain in China
Concept image of the hospital building
Groundbreaking ceremony on March 2, 2017
Operation of Hospital Chain in China
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Targeted to open 10 hospitals in 5 years
Government-led “Internationalization of Japanese medical” is being promoted
under a private/public partnership.
The Largest Private Cord Blood Bank in Japan
Targeted to achieve the storage rate of 1% in 5 years
1. Notified the Ministry of Health, Labour and Welfare as a private cord blood bank operator; the
company name to be listed on the Ministry’s HP.
2. Kochi Medical School is currently implementing Japan’s first clinical research on cerebral palsy in
childhood with autologous cord blood using stem cells stored at StemCell Institute.
3. FY3/18 (plan): Sales of 970 million yen (up 21.3% year-on-year), operating profit of 210 million yen
(up 31.3% year-on-year)
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Number of storage: 41,889 individuals
(Accounts for approx. 96% of the total storage by private banks as of September 30, 2017)
<Annual Cord Blood Storage Ratio for Newborns>
Number of newborns
Number of cord blood collected
Cord blood collection
ratio
USA 4,030,000 120,000 3%
South
Korea460,000 70,000 15%
Taiwan 210,000 10,000 5%
Japan 980,000 3,000 0.3%
・ License on manufacturing specified cell products based on the Act Concerning Safety
Assurance of Regenerative Medicine, etc. acquired on Feb. 5, 2016
・ Filed a “notification of umbilical cord blood banking business ” with the Head of Health Service
Bureau of the Ministry of Health, Labour and Welfare on Sep. 22, 2017.
Nihon Keizai Shimbun
(April 1, 2017)
1. Discovering drugs made in Japan based on cells derived from
human placenta and umbilical cord
2. Aiming to acquire manufacturing and sales approval in 2020.
3. Concluded a joint research agreement with The Institute of
Medical Science, The University of Tokyo (Sep. 2017)
4. Concluded a joint research agreement for regenerative and
restoration medicine with Kansai Medical University (Oct. 2017)
Strengthening the Footing of
Advanced Medical Care Business
Established Human Life CORD Japan Inc. (April 2017)
Capital and business alliance with STREX Inc. (May 2017)
A medical device manufacturer that manufactures stretch system, procreate
system, etc.
The market size of the domestic industry peripheral to regenerative
medicine in Japan (according to the estimate of the Ministry of Economy,
Trade and Industry)
2020: 95 billion yen
2030: 550 billion yen
2050: 1.3 trillion yen
Aim to acquire a 5%+ market share in the peripheral industry
[STREX's products]
High-performance, Compact
Programmable Deep Freezer
Freezes IVF/Stem Cells/Umbilical
Cord Blood of Human and Animals
(refrigeration to minus 80 degrees C)
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1. Transform from a household medical device supplier into a medical company
2. Prioritize prevention to reduce treatment and nursing home care
3. Establish new business vectors in business domains including the fields of medical care,
advanced medical care, and agriculture
4. Gain global presence with technologies made in Japan
Drinking water EHW apparatus business 38.0 billion yen
Medical/advanced
medical care
To be developed into a
mainstay business in
the future
Electrolyzed water hemodialysis
Cord blood bank
Cell drug discovery
Regenerative/reproductive medicine-
related equipment
Hospital operation in China
32.0 billion yen
Agriculture
Establishing Kangen Vegetable® brand
Sale of EHW apparatus for growing Kangen
Vegetables
2.0 billion yen
Industrial
Cleansing system for dies, semiconductors
and other items
Rust prevention
0.5 billion yen
Overseas
EHW apparatus (China, Taiwan, South
Korea)
Bottled water (Indonesia)
20.0 billion yen
New business - 7.5 billion yen
Target business volume per year
Become a
100 billion yen
company
The Business Goals of the Trim Group
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2. Business Performance, Indices, etc.
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Amount % Amount %
Net sales 8,122 100.0% 6,944 100.0% -1,178 -14.5%
Cost of sales 1,996 24.6% 1,785 25.7% -211 -10.6%
Gross profit 6,126 75.4% 5,158 74.3% -968 -15.8%
SG&A expenses 4,360 53.7% 4,156 59.9% -204 -4.7%
Operating profit 1,765 21.7% 1,001 14.4% -764 -43.3%
Non-operating income 78 1.0% 81 1.2% 3 3.8%
Non-operating expenses 124 1.5% 12 0.2% -112 -90.3%
Ordinary profit 1,719 21.2% 1,070 15.4% -649 -37.8%
Extraordinary income 67 0.8% - - -67 -
Extraordinary losses - - - - - -
Profit before income taxes 1,787 22.0% 1,070 15.4% -717 -40.1%
Income taxes 567 7.0% 369 5.3% -198 -34.9%
Profit attributable to non-
controlling interests37 0.5% 35 0.5% -2 -5.4%
Profit 1,182 14.6% 664 9.6% -518 -43.8%
Net income per share
Change
(Amount)
Change
(%)
140.55yen 79.93yen
(Rounded down to millions of yen)1H FY3/17 Results 1H FY3/18 Results
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1H FY3/18 Results: Consolidated Statement of Income
Amount % Amount %
(Flow-type business)
DS Division (workplace sales) 2,582 31.8% 1,988 28.6% -594 -23.0%
HS Division (installation and referral sales) 1,064 13.1% 850 12.2% -214 -20.1%
SS Division (store event sales) 396 4.9% 240 3.5% -156 -39.4%
MS Division (OEM and wholesale sales) 799 9.8% 462 6.7% -337 -42.2%
MS Division (after-sales services) 169 2.1% 141 2.0% -28 -16.6%
EHW systems sales, total 5,013 61.7% 3,683 53.0% -1,330 -26.5%
(Stock-type business)
Cartridges 1,988 24.5% 2,189 31.5% 201 10.1%
(Sales of subsidiaries)
TRIM (Guangzhou) Water & Health Co., Ltd. 27 0.6% 42 0.6% 15 55.6%
PT. SUPER WAHANA TEHNO 330 4.1% 351 5.1% 21 6.4%
(Others) 342 4.2% 230 3.3% -112 -32.7%
Total 7,701 94.8% 6,498 93.6% -1,203 -15.6%
Genetic diagnosis 19 0.2% - - -19 -
Regenerative medicine 397 4.9% 445 6.4% 48 12.1%
Electrolyzed water hemodialysis and
MGO measurement3 - 0 0.0% -3 -98.0%
Total 420 5.2% 445 6.4% 25 6.0%
8,122 100.0% 6,944 100.0% -1,178 -14.5%
Change
(%)(Rounded down to millions of yen)
Wa
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ea
lth
ca
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Bu
sin
ess
Me
dic
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usin
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Consolidated, total
1H FY3/17 Results 1H FY3/18 Results Change
(Amount)
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1H FY3/18 Results: Sales by Business Segment
(Rounded down to millions of yen) As of Mar. 31, 2017 As of Sep. 30, 2017
Current assets 17,228 18,215
A: Cash and deposits 11,480 12,657
B: Accounts receivable-
installment2,363 2,538
A + B: Total 13,843 15,195
Non-current assets 6,789 6,537
Total assets 24,018 24,752
(Rounded down to millions of yen) As of Mar. 31, 2017 As of Sep. 30, 2017
Total assets 24,018 24,752
Net assets 17,754 17,830
Equity ratio 73.9 72.0
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A Healthy Financial Condition (Consolidated)
* TSE listed-company average:
30.6%(with the reference to the aggregate
summary of financial results for the
fiscal year ended March 31, 2017 on
the Tokyo Stock Exchange website)
Percentage of the amount in
current assets: 83.4%
25 2530
35
50 50
60 60 60
FY3/10 FY3/12FY3/11 FY3/13 FY3/14 FY3/15
Adjusted for the number of shares after the stock split
Dividend trend (Yen)
� Dividend policy: Emphasize paying stable dividends, while payout ratio to improve gradually
� Shareholder special benefit plan: Discount coupon for Nihon Trim products
FY3/17
2-for-1 stock split
in October 2013
FY3/16 FY3/18 (fct.)
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Initiatives to Enhance Shareholder Value
Corporate Overview
Main businessManufacture and sale of household medical device
(EHW apparatus)
Established June 12, 1982
Headquarters22F, Herbis Ent, 2-2-22 Umeda, Kita-ku, Osaka, Japan
Tel. +81-(0)6-6456-4600 Fax. +81-(0)6-6455-3951
Capital 992,597,306 yen
SharesListed on the First Section of the Tokyo Stock Exchange
Securities Identification Code: 6788
Issued shares 8,656,780 shares
Shareholders 5,218 (as of the end of September 2017)
Employees
(consolidated)479 (as of the end of September 2017)
President Shinkatsu Morisawa
Main banksSumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
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About Us
HERBIS ENT, where the Company’s
headquarters are located
Member of Nippon Keidanren
Member of Industrial Promotion Committee,
Kansai Economic Federation
Member, Japan Hospital Association
Director, Functional Water Foundation
Medical Business
Trim Electric Machinery Co., Ltd.(Production factory; established in
February 1990)
ISO9001: 2008 ISO13485: 2003
Trim Life Support Co., Ltd.(After-sales services; established in February 2012)
Others
Water Healthcare Business
TRIM (Guangzhou) Water & Health Co.,
Ltd.(Based in China; established in October 2005)
PT SUPER WAHANA TEHNO(Based in Indonesia; invested in
October 2006) ISO: 22000: 2005
MEDFIRST TRIM CO., LTD.(Based in Taiwan; established in April 2012)
Han Kun International Holdings Limited(China business; a specified purpose company
established in December 2015)
Hankook Trim(Based in Korea; established in April 2016)
Overseas Business
Trim Medical Holdings Inc. (Holding company; established in May 2007)
StemCell Institute Inc.(Private cord blood bank; established in August 1999)
Trim Medical Institute Co., Ltd.(Contract measurements of glycolytic metabolites and sales of
electrolyzed water hemodialysis system; established in December 2007)
Human Life CORD Japan Inc.(R&D, production and sales of Japanese cell medicines; established in
April 2017)
STREX Inc.(Research and development, manufacture and sales of medical
equipment; established in October 2003)
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Nihon Trim Group Companies
Trim Electric Machinery
(The City of Nankoku, Kochi Prefecture: completed in 2002)