Company name ELAN Corporation
Established February.1995
HQ15‐12 Idegawa‐machi, Matsumoto,Nagano 390‐0826, Japan
President Hideharu Sakurai
Number of employees
330(End of June.2019)
SubsidiariesELAN Service CorporationL‐TASK Corporation
Corporate outline
Summary of financial result
About CS set
For (1) services provided directly by external suppliers and (2) services provided by ELAN, the roles of all parties involved are the same; only the contract format is different.
Custo
mers (in
divid
uals stayin
g
at hospitals an
d care
facilities)
Service fees
Explanations on the CS SetApplication for the CS Set
Supply/collection of pajamas, etc.Distribution of personal care and other items
Delivery of laundered pajamas, etc.Collection of pajamas, etc. for launderingDelivery of personal care and other items
Outsourcing fees
Payment for laundry and other services
Sending invoices and responding to questions
Outsourcing fees
(1) Services provided directly by external suppliers
(2) Services providedby ELAN
Services Payments
Hospitals, n
ursin
g care facilitie
s and
other facilitie
s
Linen su
ppliers an
d other se
rvice provid
ers
当社
Payment for laundry and other services
Business Model
(Example) Seven‐day hospital stay under Plan B500 yen × 7 days = 3,500 yen
Plan ADaily fee: 700 yen
Plan BDaily fee: 500 yen
Plan CDaily fee: 300 yen
Towels Bath towel, face towel, hand towel
Personal care items
Drinking cups, tissues, shampoo, slippers, etc.
Oral care product set
Clothing
Hospital gown or training wear (top and bottom)
Underwear and socks
Nursing care pajamas,
mealtime apron
Personal care items
Clothing
Towels
The CS Set allows people to start hospitalization and end a hospital stay without the need to bring anything in or out. There is no need for patients to assemble hospitalization supplies on their own.
CS Set users can rent clothing and towels, and receive disposable diaper pads, personal care items and other supplies needed during a hospital stay. Required items are available at the time they are needed on a daily basis at a fixed rate.
Example of the CS Set Standard Plan Note: the daily fees shown below are for reference
August 23, 2019
ELAN Corporation
Operating Results for the Second Quarter of Fiscal 2019 Ending December 31, 2019
Tokyo Stock Exchange (TSE) First SectionSecurities code: 6099
Bringing smiles to your hospital/elderly facility stay
ELAN Corporation
Table of Contents
1
I. Operating Results for the First Half of Fiscal 2019 P. 2
II. Operating Results Forecast for Fiscal 2019 and Growth Strategy P. 14
III. Business Descriptions P. 30
IV. Reference Materials P. 41
Bringing smiles to your hospital/elderly facility stay
ELAN Corporation
I. Operating Results for the First Half of Fiscal 2019
3
Business Strategies for Fiscal 2019Status of Initiatives
in the First Half of Fiscal 2019
Reinforce marketing capabilities• Enhance added value and expand acceptance of
the CS Set• Work to clearly differentiate ELAN from
competitors• Reinforce backup organizations to support the
sales force
The number of facilities newly contracting our services in the first half was a record‐high 120Marketing activities were conduct from 18 operating bases throughout JapanFocus was also placed on marketing for the CS Set LC and CS Set R, and initiatives were performed to differentiate ELAN from competitors
Create new businesses• Create new added value of the CS Set• Launch new businesses and explore overseas operations
Started research in areas where we are considering launching new businesses: BIHS, in which we conduct equity investment, and overall Indian market
Reinforce the capabilities of the ELAN Group
• Start operations of ELAN Service Corporation
ELAN Service Corporation started operations on April 1, 2019, as a company specialized in individual invoicing and customer support operations
As the hospitalization set business has gained recognition and competition with competitors has intensified, it is important to become a “company that continues to be chosen by customers” through continued endeavors to enhance customer satisfaction
We steadily conducted measures for that purpose in the first half of fiscal 2019
Initiatives in the First Half of Fiscal 2019
Highlights for the First Half of Fiscal 2019 (Consolidated)
Achieved a year‐on‐year increase in sales and profit due to a larger number of
facilities newly introducing our services
Number of contracted facilities at the end of the fiscal year increased by 96 (net) year on year,
totaling 1,236 Number of monthly users increased by about 9,300 from the end of the previous fiscal year,
totaling 200,000 (for the entire ELAN Group)
Operating Results for the First Half of Fiscal 2019
Fiscal 2018 First Half results
Fiscal 2019 First Half results
YoY changeFiscal 2018 results
Fiscal 2019 forecast
YoY change
Net sales 8,995 10,340 15.0% 18,585 21,500 15.7%
Operating profit 667 775 16.1% 1,278 1,430 11.8%
Operating profit to net sales 7.4% 7.5% 6.9% 6.7%
Ordinary profit 668 780 16.7% 1,282 1,430 11.5%
Ordinary profit to net sales 7.4% 7.5% 6.9% 6.7%
Profit attributable to owners of parent
434 521 20.0% 865 970 12.1%
Profit to net sales 4.8% 5.0% 4.7% 4.5%
(millions of yen)
4
Cash flows from operating activities increased steadily due to an increase of net sales and operating profitConsolidated Balance Sheet (millions of yen)
As of Dec. 31, 2018
As of Jun. 30, 2019
Current assets 6,992 7,225
Cash and deposits 3,057 2,991
Accounts receivable – trade 2,477 2,642
Merchandise 592 525
Accounts receivable – other 1,180 1,430
Other 43 60
Allowance for doubtful accounts
(357) (423)
Non‐current assets 831 844
Property, plant and equipment 302 309
Intangible assets 238 218
Goodwill 127 107
Other 111 111
Investments and other assets 290 316
Total assets 7,824 8,070
Current liabilities 3,561 3,472
Accounts payable – trade 2,745 2,694
Other 815 779
Non‐current liabilities ₋ 5
Total liabilities 3,561 3,477
Total net assets 4,262 4,592
Total liabilities and net assets 7,824 8,070
Consolidated Statement of Cash Flows (millions of yen)
Fiscal 2018 First Half
(Consolidated)
Fiscal 2019 First Half
(Consolidated)
Cash flows from operating activities 619 181
Profit before income tax 668 780
Decrease (increase) in assets (12) (364)
Increase (decrease) in liabilities 57 (60)
Other 92 135
Income tax paid (186) (310)
Cash flows from investing activities (43) (35)
Purchase of property, plant and equipment
(8) (12)
Purchase of intangible assets (34) (16)
Other (0) (6)
Cash flows from financing activities (109) (211)
Dividends paid (119) (211)
Other 9 (0)
Net increase (decrease) in cash and cash equivalents
466 (66)
Cash and cash equivalents at beginning of period
2,122 3,033
Cash and cash equivalents at end of period
2,588 2,966
Highlights for the First Half of Fiscal 2019 (Consolidated)
5
Net Sales (millions of yen)
6
Sales exceeded the consolidated
forecast (first half) by 2.4%
Sales increased by 15.0% year on
year on a consolidated basis
Achieved a year‐on‐year increase in sales thanks to a larger number of facilities newly
introducing our services
7,165
8,995 10,100 10,340
0
2,000
4,000
6,000
8,000
10,000
12,000
Fiscal 2017First Half
Fiscal 2018First Half
Fiscal 2019First Half forecast
Fiscal 2019First Half results
(Consolidated forecast as of Feb. 13, 2019)
Net Sales for First Half of Fiscal 2019 (Consolidated)
Operating profit (millions of yen)
Operating Profit for First Half of Fiscal 2019 (Consolidated)
7
Operating profit exceeded the
consolidated forecast (first half)
by 15.7%
Operating profit increased by
16.1% year on year on a
consolidated basis
Achieved a year‐on‐year increase in profit by suppressing SG&A expenses such as personnel
expenses while delivery outsourcing fees and other cost of sales increased
435
667 670
775
Fiscal 2017First Half
Fiscal 2018First Half
Fiscal 2019First Half forecast
Fiscal 2019First Half results
(Consolidated forecast as of Feb. 13, 2019)
Profit Margin for First Half of Fiscal 2019 (Consolidated)
8
Gross profit (millions of yen)Operating profit (millions of yen)
Profit attributable to owners of parent (millions of yen)
Operating profit margin improved as a result of sustaining the rate of increase in SG&A expenses through sales efforts and enhancement of operational efficiency, despite the decrease of gross profit margin due mainly to an increase in outsourcing fees for product delivery operations.
434
521
4.8%5.0%
Fiscal 2018First Half
Fiscal 2019First Half
2,377
2,694
26.4%26.1%
Fiscal 2018First Half
Fiscal 2019First Half
667
775
7.4% 7.5%
Fiscal 2018First Half
Fiscal 2019First Half
SG&A expenses ratio decreased year on year as a result of sustaining the ratio of increase
in personnel expenses, etc.
SG&A expenses ratio in fiscal 2019 first half decreased 0.4 percentage points year on year to 18.6%
Personnel expense ratio in fiscal 2019 first half decreased 0.7 percentage points year on year to 9.0%
9
245 258
135 130
380 388
As of Jun. 30, 2018 As of Jun. 30, 2019
Number of employees
Average No. of temporary employees
Full‐time employees
(Consolidated)(Consolidated)
26.4%
7.4%
26.1%
7.5%
9.7% 9.0%
Gross profitmargin
SG&A expensesratio
Operating profitmargin
Gross profitmargin
SG&A expensesratio
Operating profitmargin
Fiscal 2018 First Half Fiscal 2019 First Half
SG &A expenses ratio18.6%
Gross profit margin
SG &A expenses ratio19.0%
Gross profit margin
Of which, personnel expenses
Of which, personnel expenses
Operating profit marginOperating profit margin
(‐0.7% year on year)
(‐0.4% year on year)
(+0.1% year on year)
(‐0.3% year on year)
Improvement Factors in Profit Margin for First Half of Fiscal 2019
156
218
314
406
516
644
764
992
1,140
1,236
4.3%
0.5%
2.2% 0.7% 0.8%
2.2%2.0%
3.0%
2.5%2.3%
Fiscal 2010 Fiscal 2011 Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019
The number of contracted facilities has increased at an average annual rate of 27.8% since Fiscal 2009 due to an increase in the number of facilities newly contracting our services. The cancellation rate improved and dropped from the previous fiscal year
to an annual rate of 2.3% annually
10Note: The figures are on a non‐consolidated basis through fiscal
2016 and on a consolidated basis for fiscal 2017 and thereafter.
The number of contracted facilities growing steadily every year
As of Jun. 30, 2019
Number of facilities
Cancellation rate
Number of cancellations in last 12 months / (Contracts at end of first half of previous year + New contracts in last 12 months)
Changes in the Number of Contracted Facilities and Contract Cancellation Rate
Change in Number of Monthly Users
The number of monthly users has increased at an average annual rate of 32.4% since fiscal
2009 due to an increase in the number of facilities newly contracting for our services
11
17,956 25,932
38,269
53,810
68,704
89,825
120,026
168,410
190,683
199,940
Fiscal 2010 Fiscal 2011 Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019
The numbers of monthly users shown above represent the figures at the end of each fiscal year.
The number of CS Set users grows steadily every year
Number ofmonthly users
First HalfNote: The figures are on a non‐consolidated basis through fiscal
2016 and on a consolidated basis for fiscal 2017 and thereafter.
Activating the market with growing recognition, the hospitalization set service has entered the phase of wider public acceptance
Hospital Market by Number of Beds Senior Nursing Care Facilities Market by Number of Beds
0% 20% 40% 60% 80% 100%
50 – 99 beds
100 – 199 beds
200 – 299 beds
300 beds ormore
All targetedfacilities
Contract Rates of Targeted Hospitals by Number of Beds
0% 20% 40% 60% 80% 100%
49 beds or less
50 – 99 beds
100 – 149 beds
150 beds or more
All targetedfacilities
Contract Rates of Targeted Senior Nursing Care Facilities by Number of Beds
Hospitalization set not yet introduced (room for contract acquisition) + Already introduced competitorʼs
service
Hospitalization set not yet introduced (room for contract acquisition) + Already
introduced competitor’s service
Facilities targeted by the ELAN Group (with at least 50 beds)
count 7,493
Already contracted with
910 facilities, or 12.1% of the target
Facilities targeted by the ELAN Group (with at least 50 beds)
count 3, 824
Already contracted with
160 facilities, or 4.2% of the target
Note 1: The blue parts of the charts above represent the contract rates of ELANNote 2: Prepared by ELAN in reference to the survey results of Survey of Medical Facilities 2017 and Survey of Institutions and Establishments for Long‐term Care
2017 by Ministry of Health, Labour and Welfare.12
Status of CS Set Operations for Facilities by Number of Beds (as of June 30, 2019)
13
The number of contracted facilities is increasing steadily throughout Japan, totaling 1,236 facilities for the ELAN Group
Surpassed the 1,000 facilities mark on a non‐consolidated basis and conducted a campaign to commemorate it
Hiroshima Branch Opened in Feb. 2010
80 facilities
Fukuoka Branch Opened in Mar. 2013
Kanazawa Branch Opened in Oct. 2008
118 facilities
Shikoku Branch Opened in Mar. 2012
88 facilities
Sapporo Branch Opened in Apr. 2014
56 facilities
Sagamihara Branch Opened in May 2003
90 facilities
Osaka Branch Opened in Mar. 2011
107 facilities
Nagoya Branch Opened in Apr. 2009
160 facilities
Saitama Branch Opened in Mar. 2015
58 facilities
Okayama Branch Opened in Nov. 2017
80 facilities
Niigata Branch Opened in Jul. 2017
52 facilities
Tokyo Branch Opened in Jul. 2018
37 facilities
Minamikyushu Sales Office Opened in Nov. 2018
Nagoya Branch No. 177 facilities
Nagoya Branch No. 283 facilities
Matsumoto Head Office90 facilities LTASK
164 facilities
In control of Fukuoka Branch56 facilities
ELAN’s Operating Bases and Number of Contracted Facilities throughout Japan (as of June 30, 2019)
Bringing smiles to your hospital/elderly facility stay
ELAN Corporation
II. Forecast of Operating Results for Fiscal 2019 and Growth Strategy
Initiatives in Fiscal 2019 Second Half
15
Business Strategies for Fiscal 2019 Initiatives in Fiscal 2019 Second Half
Reinforce marketing capabilities• Enhance added value and expand acceptance of
the CS Set• Work to clearly differentiate ELAN from
competitors• Reinforce the backup organizations to support the
sales force
Promote sales activities from the 20 marketing bases throughout Japan including newly opened Hakodate Sales Office and Shizuoka Branch, aiming for increasing the number of new contractsFocus on marketing of the CS Set LC and CS Set R in coordination with partner companies and subcontractors
Create new businesses• Create new added value of the CS Set• Launch new businesses and investigate overseas operations
Continue investigating overseas operations while proceeding with investigating new business
Reinforce the capabilities of the ELAN Group
• Start operations of ELAN Service Corporation
Improve ELAN Service Corporation’s productivity and enhance its capabilities to respond to customersProceed preparation for the merger with LTASK (Jan. 1, 2020)
Aiming for further increase in the number of new contracts, conduct marketing activities from operating bases throughout Japan
Proceed preparation for the merger with LTASK in order to consolidate management resources and ensure efficient organization operation, as well as to enhance the brand power and sense of unity among employees, for further expansion
Divide Japan into seven areas by Jan. 1, 2020, and conduct marketing activities from 20 operating bases throughout Japan, including the Shizuoka Branch and Hakodate Sales Office which started operations in fiscal 2019
Operating Bases throughout Japan and Respective Marketing Areas (Future Policy)
Kanto area Tokyo Branch Saitama Branch Sagamihara Branch
Tohoku area ♦ Morioka Head Office♦ Hirosaki Branch♦ Sendai Branch♦ Akita Branch
Chugoku/Shikoku area Hiroshima Branch Okayama Branch Shikoku Branch
Kansai/Hokuriku area Kanazawa Branch Osaka Branch
Central Japan area Matsumoto Head Office Niigata Branch Nagoya Branch
(Branch No. 1 and No. 2) Shizuoka Branch
(Started operation on Aug. 1, 2019)
Kyushu area Fukuoka Branch Minamikyushu Sales
Office
16
Hokkaido area Sapporo Branch Hakodate Sales Office
(Started operation on Jul. 1, 2019)
ELAN Service
CorporationSeparated
Initiatives for Further Expansion (Enhancing Customer Satisfaction)
17
ELAN Service Corporation started operations
Built on the strengths of know‐how in individual invoicing and customer support operations relating to the CS Set,
ELAN Service works to improve customer satisfaction in an effort to further enhance productivity and added value
Specialized in invoicing and customer service
operations
Specialized in invoicing and customer service
operations
An operating company specialized in individual invoicing and customer support operations
As of April 1, 2019, ELAN Corporation separated its individual invoicing and customer support departments relating to the CS Set into a company:
ELAN Corporation
Each
department
Each
department
Individual invoicing
and customer support
departments
Customers(hospitalized patients
and residents of elderly facilities)
Accepting application from smart phones or PCs
Responding to inquiries in foreign languages・English ・Mandarin Chinese・Korean ・Portuguese
Opening a portal website dedicated for users
Payment for invoices by credit cards, etc.
For better
customer
satisfaction
18
Status of Progress in Fiscal 2019 First Half (Enhancement of customer satisfaction)
ELAN Service Corporation started operation on April 1, 2019, as a company specialized in individual invoicing and customer support operations
Organize the management structure through enhancement of efficiency of decision‐making process and other measures to execute smooth business operation Strive for
better customer satisfaction
ELAN Corporation
ELAN Service ELAN Service CorporationIndividual invoicing
and customer support departments
Spun offApril 1, 2019
ELAN Corporation
ELAN Service Corporation
For better customer satisfaction
Improvement of productivity by supporting the new invoicing system
Enhancement of customer support departments’ capabilities to respond to customers
19
Developed the “CS Set LC (Loss Control) Hospitalization Guarantee”
CS Set automatically equipped with a service to compensate damage accidents caused by patients using the CS Set
ELAN Corporation tied up with Nippon Souken Ltd. for a new service:
Ongoing service
CS SetNew service
CS Set LCAdvantages
provided by the new service
Compensatesdamages to furniture
or injuries to employees and
hospitalized patients caused by CS Set users
Apparel Personal care supplies
Towels
Hospitals
Patients (CS Set users)
Their families visiting them
Reduces clerical and labor costs
Avoids unexpected losses
Reduces the risk of damage liabilitiesProvides new
added value to customers
Initiatives for Further Expansion (Enhancing Added Value)
20
Patients
ELAN Corporation
No need of any co‐guarantor
Intensifying competition over hospitalization sets
Hospitals
Entrust Inc.
Reduces the risk of unpaid expenses
Expanding its medical expenses guarantee service
Shift to nuclear family households and increase in households of singles
Issues
Advantage
Issues
Cultivating new customers and expanding market share through differentiation
No confirmation can be obtained from co‐guarantors
Issues
Issues
Better recognized with a larger number of users
Advantage Advantage
Advantage
CS Set R: hospitalization set with a service to guarantee hospitalization expenses
A new service to realize a win‐win relationship
CS Set R: the CS Set equipped with a
guarantee for medical expenses
CS Set R users can receive a service that guarantees
medical expenses(Note) Certain requirements
must be satisfied
Initiatives for Further Expansion (Enhancing Added Value)
21
Business tie‐up with Poplar Co., Ltd. with an aim to promote sales
Joint promotion of ELAN’s hospitalization set business and Poplar’s in‐facility model
Joint promotion of the in‐facility model
Initiatives for Further Expansion (Business Tie‐Up)
Base of hospitals, nursing care facilities and other facilities Contracted facilities: 1,236
Marketing capabilities 18 marketing bases throughout Japan
Ability to set up and operate stores within facilities Operating highly original CSV (Creating
Shared Value) chain Accelerating opening of stores within
company buildings, hospitals and nursing care facilities
Mutual introductionof possible customers
for proposal
Mutual introductionof possible customers
for proposal
Joint proposal of new projects
Joint proposal of new projects
22
Status of Progress in Fiscal 2019 First Half (Enhanced Added Value/Business Tie‐Up)
CS Set
Promotion of marketing jointly
with companies
CS Set
RLC
Promotion of marketing jointly with companies
Progress was made for multiple projects for new contracts of the CS Set LC Hospitalization Guarantee and CS Set R
In the second half, aim for additional new contracts through organized marketing activities
LC
R
Currently, added value is supplied to the CS Set in separate fashion.
Going forward, work for new introduction of the CS Set containing added value as the standard, in coordination with partner companies and
subcontractors
or
?
?
[Overview of BIHS]
(1) Company name ︓Boston Ivy Healthcare Solutions Private Limited
(2) Location ︓Mumbai, Maharashtra, Republic of India
(3) Established ︓2014
(4) Representative ︓Vivek Tiwari
(5) Line of business ︓B2B online wholesale of medical supplies and medical equipment
23
ELAN Corporation acquired 2.64% of shares newly issued by BIHS through third‐party allotment
Conclusion of a stock subscription agreementwith Boston Ivy Healthcare Solutions Private Limited (BIHS)
BIHS conducts on‐line wholesale of medical supplies and medical
equipment in India.
In an effort to further expand its business going forward, ELAN
Corporation will explore the possibilities of a new business – not
plausible in Japan – in India where the economy is growing notably.
Equity investment in a medical products wholesaler in India
Initiatives for Further Expansion (New Businesses / Overseas Operations)
24
BIHS
Status of Progress in Fiscal 2019 First Half (New Businesses/Overseas Operations)
Currently, an Elan employee is staying at BIHS in India and observing the status of management and operation as well as the status of the overall Indian market and business opportunities.
Expand to India, and then, one day, to the rest of the world!
CS (LT) Sets make it a business to address “troubles” during hospitalization
Ordinary life beforehospitalization
A
B
Immediately before hospitalization
C
D
Immediately after discharge
Living at home after dischargeHospitalization
E
CS set
LT set
NormalHealth care
A
B
Pre‐hospitalization
C
D
DischargeRecoverySupportiveHospitalization
E
CS set
LT set
25
Make it a business to address “troubles” at all stages and make everybody smile
G
F H
I
F
G
H
I
Initiatives for Further Expansion (New Businesses / Surrounding Areas)
26
Forecast of Operating Results for Fiscal 2019: Statement of Income (Consolidated)
Forecast double‐digit year‐on‐year increase both in sales and profits, although profit margin is anticipated to decrease due to an increase in delivery outsourcing fees
26
2018 First Half results
2019 First Half results
YoY change
Fiscal 2018 results
Fiscal 2019 forecast
YoY change
Net sales 8,995 10,340 15.0% 18,585 21,500 15.7%
Operating profit 667 775 16.1% 1,278 1,430 11.8%
Operating profit to net sales 7.4% 7.5% 6.9% 6.7%
Ordinary profit 668 780 16.7% 1,282 1,430 11.5%
Ordinary profit to net sales 7.4% 7.5% 6.9% 6.7%
Profit attributable to owners of parent
434 521 20.0% 865 970 12.1%
Profit to net sales 4.8% 5.0% 4.7% 4.5%
Profit per share 14.52 yen 17.20 yen 28.78 yen 32.01 yen
(millions of yen)
4,601 6,025 7,463 9,011
11,408 15,467
18,585
21,500
Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019
(forecast)
Future
Illustrative Description of Growth through Further Expansion
Note: The figures are on a non‐consolidated basis through fiscal 2016 and on a consolidated basis for fiscal 2017 and thereafter.
New businesses
CS Set
Enhanced added value
27
Enhance customer satisfaction by ELAN Service starting operations
Strengthen fostering of human resources
Improve operating profit margin byreinforcing operating systems
Conduct new businesses contributing to earnings
Enhance added value to differentiateELAN from other companies
Conduct overseas operations
Initiatives for Growth
Next Stage
Net sales (millions of yen)
Changes in dividend per share and dividend payout ratio
(Note) The dividends per share in the graph to the left have been retroactivelyadjusted to reflect the 50‐for‐1 stock split on August 17, 2012, the100‐for‐1 stock split on July 28, 2014, the 2‐for‐1 stock split on July 1,2015, the 2‐for‐1 stock split on October 1, 2017 and the 2‐for‐1 stocksplit on January 1, 2019.
Changes in financial indicators
28Note: The figures are on a non‐consolidated basis through fiscal 2016
and on a consolidated basis for fiscal 2017 and thereafter.
0.45 yen 0.5 yen 0.625 yen 0.75 yen
3.0 yen4.0 yen
7.0 yen
9.0 yen
0.75 yen
5.8%4.8%
6.0%
12.1%
17.6% 18.1%
24.3%
28.1%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 (forecast)
Commemorative dividend
Dividend per share
Dividend payout ratio
12.1%
17.6%18.1%
24.3%
28.1%
1.9% 3.3% 3.7%5.5%
5.9%
15.9%
18.6%
20.5% 22.3%
20.9%
14.8% 15.7% 15.7%17.9% 17.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
15.12期 16.12期 17.12期 18.12期 19.12期予
配当性向 DOE ROE ROA
Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 (forecast)
Dividend pay‐out ratio
DOE ROE ROA
Return to Shareholders (Forecast Dividend for Fiscal 2019)
29
Strategy 3: Participate in new businesses
Conduct tie‐ups and M&As that should enhance the added value of the CS Set
Take advantage of the personal information of the CS Set users
Build on the strong relationships with hospitals and their coordinating operators
Strategy 4: Keep employees vitalizedProperly arrange the environment, develop human
resources and reinforce organizational capabilities
Strategy 2: Pursue productivity through enhancing efficiency
Standardize, prepare manuals for and systematize the operation methods
Strengthen coordination within the organization and with related operators
DiversificationAdded value
Business base
Strategy 1: Nationwide expansion of the CS Set Strengthen the marketing force
Thoroughly establish a win‐win‐win relationship
Thoroughly manage revenues and earnings
Aim to win contracts with 3,000 facilities for the entire ELAN Group, and expand the contract rates of targeted facilities to 41% as a long‐term vision
Aim to achieve operating profit margin of 10% over a long term
Medium‐ to Long‐term Growth Strategies of the ELAN Group
Bringing smiles to your hospital/elderly facility stay
ELAN Corporation
III. Business Descriptions
What Is the CS (Care Support) Set?
(Example) Seven‐day hospital stay under Plan B500 yen × 7 days = 3,500 yen
Plan ADaily fee: 700 yen
Plan BDaily fee: 500 yen
Plan CDaily fee: 300 yen
Towels Bath towel, face towel, hand towel
Personal care items
Drinking cups, tissues, shampoo, slippers, etc.
Oral care product set
Clothing
Hospital gown or training wear (top and bottom)
Underwear and socks
Nursing care pajamas, mealtime apron
Personal care items
Clothing
Towels
The CS Set allows people to start hospitalization and end a hospital stay without the need to bring anything in or out. There is no need for patients to assemble hospitalization supplies on their own.
CS Set users can rent clothing and towels, and receive disposable diaper pads, personal care items and other supplies needed during a hospital stay. Required items are available at the time they are needed on a daily basis at a fixed rate.
Example of the CS Set Standard Plan Note: the daily fees shown below are for reference
31
For (1) services provided directly by external suppliers and (2) services provided by ELAN, the roles of all parties
involved are the same; only the contract format is different.
Custo
mers (in
divid
uals stayin
g
at hospitals an
d care
facilities)
Service fees
Explanations on the CS SetApplication for the CS Set
Supply/collection of pajamas, etc.Distribution of personal care and other items
Delivery of laundered pajamas, etc.Collection of pajamas, etc. for launderingDelivery of personal care and other items
Outsourcing fees
Payment for laundry and other services
Sending invoices and responding to questions
Outsourcing fees
y pp(1) Services provided directly
by external suppliers
(2) Services providedby ELAN
Services Payments
Hospitals, n
ursin
g care facilitie
s and
other facilitie
s
Linen su
ppliers an
d other se
rvice provid
ers
当社
32
The ELAN Business Model (Services and Payment)
Payment for laundry and other services
The CS Set provides patients and their family members with ease and comfort
AgingAging
Shifting to nuclear family households
Shifting to nuclear family households
Start and end a hospital stay Start and end a hospital stay without bringing anything
in and out with them
CS Set
on caring for the patientsFamily members can focus on caring for the patients
with ELAN’s services
Family members can visit patients
casually and at ease with ELAN’s services
Single‐person households are increasing
Single‐person households are increasing
People living alone
without worry
People living alone can start
a hospital stay without worry
Apparel Personal care suppliesTowels
33
The CS Set Eliminates Worries for Patients and Their Family Members
Many advantages for the nursing and care frontlines
Solves problems for hospitals and nursing care facilities
The staff can now focus on their nursing and care duties!
Chronic labor shortage Hygiene problems
34
Solving Problems for Hospitals and Nursing Care Facilities as Well
Significant saving of time and labor
The staff can focus on their nursing and care duties
Effects of introducing the CS Set: a case For using towels and mealtime aprons at a hospital with 250 beds
*The figures represent accumulated total values for 6 hospitals.
Time (minutes) per day spent for laundering
Number of laundering (times) per day
Working time (minutes) per day(folding and setting, etc.)
Volume of sterilization solution (ml) per month
35
1,470minutes
625 minutes
0
200
400
600
800
1,000
1,200
1,400
1,600
Before introduction
After introduction
33 times
13 times
0
5
10
15
20
25
30
35
Before introduction
After introduction
255 minutes
70 minutes
0
50
100
150
200
250
300
Beforeintroduction
Afterintroduction
11,250ml
3,250 ml
0
2,000
4,000
6,000
8,000
10,000
12,000
Before introduction
After introduction
Reduced by
57.4%
Reduced by
60.6%
Reduced by
72.5%
Reduced by
71.1%
Illustrative Description of Operational Improvements at Hospitals
Generating an economic impact for the entire hospital/nursing care industry
• Difficult operating environment for hospitals
• Risks involving government guidance for
revenues not based on the national health
insurance system
Management issues for hospitals and
nursing care facilities
Management issues for hospitals and
nursing care facilities
Management issues for operators related to hospitals and nursing care facilities
Management issues for operators related to hospitals and nursing care facilities
• Existing hospital‐related businesses are saturated
• Cost reductions are strongly requested
• New opportunities for earning profits are needed
Secure new revenue resources
Reduce risks involving government guidance
Increase sales and profits
GOOD︕
36
Solving Management Issues for Hospitals, Nursing Care Facilitiesand Associated Operators
The CS Set business creates mutual win‐win relationships
Provide ease and comfort
in hospitals
Provide ease and comfort to patients during their stay
in hospitals
当社
Patients staying in hospitals and those
living in care facilities
Linen suppliers and other companies
HospitalsNursing care
facilities
37
Mutual Win‐Win Relationships
ELAN has pioneered the hospitalization support set business in an organized fashion
38
Three factors that have enabled ELAN, the pioneer, to predominantly lead the late starters
Ability to determine where the profitability threshold stands
Explanations to nursing and care staff and operational skills
Provision of services in a manner consistent with government guidance
Efficient invoicing and payment receipt operations
Know‐how1
A business model built on ongoing business relationships with partners to achieve mutual success
Business model2
ELAN stands independent and open without being affiliated by any corporate group
Positioning3
Characteristics and Strengths of ELAN 1The CS Set has a solid history in the hospitalization support set business
120 156
218
314
406
516
644
764
992
1,140
Fiscal 2009 Fiscal 2010 Fiscal 2011 Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018
Earnings expand as the number of contracted facilities grow
Characteristics and Strengths of ELAN 2 Growth potential and earnings‐generatingcapabilities of the business model built on the accumulation of contracted facilities
39
The number of contracted facilities is growing steadily every year
Note: The figures are on a non‐consolidated basis through fiscal 2016 and on a consolidated basis for fiscal 2017 and thereafter.
Number of facilities
Build even higher barriers against potential new entrants by accumulating know‐how and firmly establishing our
position in the industry
Barriers to entry appear to be low but are actually high
Three barriers against potential new entrants
1Know‐how
2
Business model
3
Positioning
40
Characteristics and Strengths of ELAN 3Barriers to new entrants are growing
Bringing smiles to your hospital/elderly facility stay
ELAN Corporation
IV. Reference Materials
4 4 5 5 6 7 9 11 12 15 18 22 26 29 34 36 37 37 38 39
74 7985 88 92
96103
106 109 109107
105102 99
93 89 8682 77 72
7883
8993
98104
112117
121 124 126 127 128 128 127 125123
119 115 111
5% 5% 5%6% 6%
7%8%
9%10%
12%
15%17%
20%
23%
27%
29% 30%31%
33%
35%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0
20
40
60
80
100
120
140
47 50 55 60 65 70 75 80 85 90 95 0 5 10 15 20 25 30 35 40
Aged 65 and above
Under 65
Percentage of people aged 65 and above
(Source) Based on the Population Census Results, Statistics Bureau, Ministry of Internal Affairs (2015) and Population Projections for Japan (2017 estimates) (based on assumptions for fertility and mortality using the medium variant), National Institute of Population and Social Security Research. The figures are as of October 1 each year. Okinawa Prefecture was not included for 1947 through 1970. The total figures include those whose ages are unknown.
(Millions of people)
Business Environment (1)
Aging of the population is accelerating in Japan
Actual figures(Population Census)
2017 estimates(Population Projections for Japan)
42
6.3% 6.8% 7.1%7.6%
8.4%
8.7% 8.9% 9.3% 9.5% 9.6% 9.7% 9.70%
3.1% 4.0% 5.0%6.5%
7.9%
9.6%11.7%
13.0% 13.9%14.9%
16.1%17.7%
20.8%23.1%
25.6%27.6%
29.5%
32.4%34.5%
35.7%36.9% 37.9% 38.7% 39.3%
1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Business Environment (2)
The targeted customer base for the CS Set will continue to grow
Changes in and outlook of household compositions
2018 estimates (Household Projections for Japan)
Actual figures(Population Census)
1 out of every 3 households
1 out of every 6 households
1 out of every 10 households
Single‐person households
Elderly single‐person households
Single‐parent households
1 out of
every 5households
1 out of
every 33households
1 out of
every 16households
(Source) Population Census, Statistics Bureau, Ministry of Internal Affairs (2015) and Population and Projections for Japan (National Estimates) (Estimate as of 2018), National Institute of Population and Social Security Research
(Note) Elderly households are those with the head of the family being 65 years old and above43
Change in Net Sales (millions of yen) Change in Profits (millions of yen)
Change in Number of Contracted Facilities Change in Number of Monthly Users (people)
Financial Highlights (1)
44Note: The figures are on a non‐consolidated basis through fiscal 2016 and on a consolidated basis for fiscal 2017 and thereafter.
4,242
5,375
7,165
8,995
10,340
Fiscal 2015
First Half
Fiscal 2016
First Half
Fiscal 2017
First Half
Fiscal 2018
First Half
Fiscal 2019
First Half
295380 435
667
775
296
442 442
668
780
180246
319
434521
Fiscal 2015
First Half
Fiscal 2016
First Half
Fiscal 2017
First Half
Fiscal 2018
First Half
Fiscal 2019
First Half
Operating profit Ordinary profit Profit
89,825
120,026
168,410 190,683 199,940
Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019First Half
527 624805 913 98170
86
130156
174
4754
5771
81
644764
9921140
1236
Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019First Half
Hospitals Nursing care facilities Other
Change in Profit Margins Change in ROE and ROA
Change in Total Assets, Net Assets and Equity Ratio (millions of yen)
Change in Dividend per Share and Dividend Payout Ratio
Financial Highlights (2)
45(Note) The dividends per share in the graph to the left have been retroactively adjusted to reflect the 50‐for‐1
stock split on August 17, 2012, the 100‐for‐1 stock split on July 28, 2014, the 2‐for‐1 stock split on July 1, 2015, the 2‐for‐1 stock split on October 1, 2017 and the 2‐for‐1 stock split on January 1, 2019.
Note: The figures are on a non‐consolidated basis through fiscal 2016 and on a consolidated basis for fiscal 2017 and thereafter.
7.0% 7.1%
6.1%
7.4% 7.5%7.0% 7.1%
6.2%7.4% 7.5%
4.2% 4.6% 4.5% 4.8% 5.0%
Fiscal 2015
First Half
Fiscal 2016
First Half
Fiscal 2017
First Half
Fiscal 2018
First Half
Fiscal 2019
First Half
Operating profit margin Ordinary profit margin Profit margin
15.9%18.6%
20.5%22.4%
20.9%
14.8% 15.7% 15.7%17.9% 17.0%
Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019(forecast)
ROE ROA
2,457 2,921
3,497 4,262
4,592 4,309
5,263
6,526
7,824 8,070
57.0% 55.5% 53.6% 54.2% 56.4%
Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019First Half
Equity capital Total capital Equity ratio
0.625yen 0.75yen
3.0yen4.0yen
7.0yen9.0yen
0.75yen
6.0%
12.1%
17.6% 18.1%
24.3%
28.1%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
0
1
2
3
4
5
6
7
8
9
10
Fiscal 2014 Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019(forecast)
Commemorative dividend Dividend per share Dividend payout ratio
[Disclaimer]
This material has been prepared by ELAN Corporation.
This material includes forward‐looking statements such as strategies and outlooks. These statements arebased on the judgments of ELAN at the time this material was prepared, and include risk factors anduncertainties. Such statements may be changed due to a variety of reasons including changes in the businessenvironment.
[Contact]
Management Department, ELAN Corporation
Tel: +81‐263‐29‐2684 / Fax: +81‐263‐88‐7950
E‐mail: ir‐[email protected]
15‐12 Idegawa‐machi, Matsumoto‐shi, Nagano 390‐0826, Japan
46
Consolidated Financial Results for the First 2 Quarters of Fiscal 2019 [Japanese GAAP]
August 9, 2019
Company name: ELAN Corporation Listing: Tokyo Stock Exchange, First Section Stock code: 6099 URL: https://www.kkelan.com/ Representative: Hideharu Sakurai, President Contact: Daiki Akiyama, Director and General Manager of Administration Department Tel: +81-263-29-2684 Scheduled date of filing of quarterly securities report: August 13, 2019 Scheduled date of payment of dividend: - Preparation of supplementary materials for quarterly financial results: Yes Holding of quarterly financial results meeting: Yes (for institutional investors and analysts, and
individual investors)
(All amounts are rounded down to the nearest million yen)
1. Consolidated Financial Results for the First 2 Quarters of Fiscal 2019 (January 1, 2019 to June 30, 2019)
(1) Consolidated results of operations (year to date) (Percentages represent year-on-year changes)
Net sales Operating profit Ordinary profit Profit attributable to
owners of parent First 2 quarters Million yen % Million yen % Million yen % Million yen %
Ended June 30, 2019 10,340 15.0 775 16.1 780 16.7 521 20.0Ended June 30, 2018 8,995 25.5 667 53.2 668 51.1 434 35.9
Note: Comprehensive income First 2 quarters ended June 30, 2019: 520 million yen [19.8%] First 2 quarters ended June 30, 2018: 434 million yen [35.9%]
Earnings per share Diluted
earnings per share First 2 quarters Yen Yen
Ended June 30, 2019 17.20 17.19Ended June 30, 2018 14.52 14.35
Note: ELAN conducted a 2-for-1 common stock split on January 1, 2019. Earnings per share and diluted earnings per share have been calculated as if this stock split had taken place at the beginning of the previous fiscal year.
(2) Consolidated financial position Total assets Net assets Equity ratio Net assets per shareAs of Million yen Million yen % Yen
June 30, 2019 8,070 4,592 56.4 150.27Dec. 31, 2018 7,824 4,262 54.2 140.08
Reference: Equity As of June 30, 2019: 4,552 million yen As of December 31, 2018: 4,244 million yen Note: ELAN conducted a 2-for-1 common stock split on January 1, 2019. Net assets per share has been calculated as if this stock
split had taken place at the beginning of the previous fiscal year. 2. Dividends
Dividends per share
1Q-end 2Q-end 3Q-end Year-end Total Fiscal year Yen Yen Yen Yen Yen
Ended Dec. 31, 2018 - 0.00 - 14.00 14.00Ending Dec. 31, 2019 - 0.00 Ending Dec. 31, 2019 (forecast) - 9.00 9.00
Note: Revision from most recently announced dividends forecast: None Note: ELAN conducted a 2-for-1 common stock split on January 1, 2019. Dividends per share for the previous fiscal year when
calculated as if this stock split had taken place at the beginning of the previous fiscal year is 7.00 yen. 3. Consolidated Earnings Forecast for Fiscal 2019 (January 1, 2019 to December 31, 2019)
(Percentages represent year-on-year changes)
Net sales Operating profit Ordinary profit Profit attributable to
owners of parent Earnings per share
Million yen % Million yen % Million yen % Million yen % Yen
Full year 21,500 15.7 1,430 11.8 1,430 11.5 970 12.1 32.01Note: Revision from most recently announced earnings forecast: None
* Notes
(1) Changes in significant subsidiaries during the period (change in scope of consolidation): None (2) Application of special accounting methods for presenting quarterly consolidated financial statements: None (3) Changes in accounting policies and accounting-based estimates, and restatements 1) Changes in accounting policies due to revisions in accounting standards, others: None 2) Changes in accounting policies other than 1) above: None 3) Changes in accounting-based estimates: None 4) Restatements: None (4) Number of outstanding shares (common stock) 1) Number of outstanding shares at the end of the period (including treasury shares) As of June 30, 2019: 30,300,000 shares As of December 31, 2018: 30,300,000 shares
2) Number of treasury shares at the end of the period As of June 30, 2019: 440 shares As of December 31, 2018: 440 shares
3) Average number of shares during the period (year to date) First 2 quarters ended June 30, 2019: 30,299,560 shares First 2 quarters ended June 30, 2018: 29,928,976 shares
Note: ELAN conducted a 2-for-1 common stock split on January 1, 2019. The average number of shares during the period has been calculated as if this stock split had taken place at the beginning of the previous fiscal year.
* The quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms. * Explanation of appropriate use of earnings forecast and other special items
Cautionary statement with respect to forward-looking statements
Forecasts of future performance in this document are based on assumption judged to be valid and information currently available to the ELAN’s management. Actual results may differ materially from the forecasts for a number of reasons.
How to view supplementary materials for financial results
ELAN plans to hold financial results meetings for institutional investors and analysts on Monday, August 26, 2019, and for individual investors on Thursday, August 29, 2019 in Osaka and on Monday, September 9, 2019 in Tokyo. Materials distributed at these events will be disclosed using the Timely Disclosure network (TDnet) and available on the ELAN website after completion of transactions on Friday, August 23, 2019.
ELAN Corporation (6099) Consolidated Financial Results for the First 2 Quarters of Fiscal 2019
- 1 -
○ Attachment Table of Contents
1. Qualitative Information on Quarterly Financial Results ……………………………………………………………………... 2
(1) Explanation of Operating Results ……………………………………………………………………………………….. 2
(2) Explanation of Financial Position ……………………………………………………………………………………….. 2
(3) Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information ……………………………. 3
2. Matters Concerning Summary Information (Notes) ………………………………………………………………………….. 3
3. Quarterly Consolidated Financial Statements and Significant Notes Thereto ……………………………………………….. 4
(1) Quarterly Consolidated Balance Sheet ………………………………………………………………………………….. 4
(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income …….. 5
(3) Quarterly Consolidated Statement of Cash Flows ………………………………………………………………………. 7
(4) Notes to the Quarterly Consolidated Financial Statements ……………………………………………………………... 8
(Notes on the Going Concern Assumption) …………………………………………………………………………….. 8
(Notes in the Event of Material Change in the Amount of Shareholders’ Equity) ……………………………………… 8
(Additional Information) ………………………………………………………………………………………………... 8
(Segment Information, Etc.) …………………………………………………………………………………………….. 8
ELAN Corporation (6099) Consolidated Financial Results for the First 2 Quarters of Fiscal 2019
- 2 -
1. Qualitative Information on Quarterly Financial Results (1) Explanation of Operating Results
In the first 2 quarters of fiscal 2019, the Japanese economy was on a moderate recovery trend with resilient domestic demand, such as business fixed investment and private consumption, backed by improvements in corporate earnings and the employment and income situation. On the other hand, with the domestic population decrease, prolonged trade friction between the U.S. and China, deteriorating situation in the Middle East and several other economic downside risks, the Japanese economic outlook remains uncertain. In the medical care and nursing care industry in which the ELAN Group operates, with steady progress in aging of the population as evident by such factors as the population aged 65 years and over of 35.81 million accounting for 28.4% of the total population as of July 1, 2019 (July 2019 Monthly Report of Population Estimates by the Statistics Bureau of the Ministry of Internal Affairs and Communications), the market size for services that concern the ELAN Group is likely to increasingly expand. Under such circumstances, the ELAN Group engaged in sales to facilities (hospitals, nursing facilities for the elderly and other such facilities) at the 18 sales bases across Japan in order to increasingly spread and expand the “CS (Care Support) Set” and “LT Set,” which are the core services in the nursing- and medical-care related business of the ELAN Group. As a result, the ELAN Group had 120 facilities with which agreements were newly entered and 24 facilities with which agreements were cancelled in the first 2 quarters of fiscal 2019, increasing the combined total of the number of facilities that have introduced the CS Set and the number of facilities that have introduced the LT Set by 96 facilities from the end of fiscal 2018 to 1,236 facilities at the end of the second quarter of fiscal 2019. The above resulted in net sales for the first 2 quarters of fiscal 2019 of 10,340,061 thousand yen (up 15.0% year on year), operating profit of 775,047 thousand yen (up 16.1% year on year), ordinary profit of 780,667 thousand yen (up 16.7% year on year) and profit attributable to owners of parent of 521,198 thousand yen (up 20.0% year on year). The ELAN Group commenced operations of the Hakodate Sales Office of the Hirosaki Branch Office of LTASK Corporation in Hakodate City, Hokkaido Prefecture on July 1, 2019, and commenced operations of ELAN’s Shizuoka Branch Office in Shizuoka City, Shizuoka Prefecture on August 1, 2019. To date, the ELAN Group has been engaged in sales from ELAN’s Sagamihara Branch Office (Chuo Ward, Sagamihara City, Kanagawa Prefecture) and Nagoya Branch Office (Naka Ward, Nagoya City, Aichi Prefecture) to cover the entire Shizuoka Prefecture, and is engaged in sales from LTASK Corporation’s Hirosaki Branch Office (Hirosaki City, Aomori Prefecture) to cover the Donan area (southwestern part of Hokkaido Prefecture). The new openings are intended to provide more finely tuned and prompt services that are based locally in each of those areas. Going forward, further efforts will be made to seek facilities to introduce newly the “CS (Care Support) Set” in the entire Shizuoka Prefecture from the Shizuoka Branch Office and further efforts will be made to seek facilities to newly introduce the “LT Set” in the Donan area from the Hakodate Sales Office. Going forward, the ELAN Group will strive for nationwide sales activities and business expansion by making further efforts to seek facilities to newly introduce the CS Set and LT Set from ELAN’s 15 sales bases and LTASK Corporation’s 5 sales bases inclusive of the Shizuoka Branch Office and the Hakodate Sales Office totaling 20 sales bases across Japan.
(2) Explanation of Financial Position
Starting from the beginning of the first quarter of fiscal 2019, ELAN has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan (ASBJ) Statement No. 28 issued on February 16, 2018), etc. Comparisons and analyses with fiscal 2018 are made based on the figures after retrospective application of the concerned accounting standard, etc. 1) Assets, liabilities and net assets Assets Total assets at the end of the second quarter of fiscal 2019 increased by 246,219 thousand yen compared with the end of fiscal 2018 to 8,070,659 thousand yen. Of this, current assets increased by 232,936 thousand yen compared with the end of fiscal 2018 to 7,225,853 thousand yen. This was mainly attributable to cash and deposits decreasing by 66,242 thousand yen and allowance for doubtful accounts increasing by 65,618 thousand yen (translates to decrease in total current assets), while trade accounts receivable increased by 164,871 thousand yen
ELAN Corporation (6099) Consolidated Financial Results for the First 2 Quarters of Fiscal 2019
- 3 -
and other accounts receivable increased by 250,180 thousand yen. Non-current assets increased by 13,283 thousand yen compared with the end of fiscal 2018 to 844,806 thousand yen. This was mainly attributable to intangible assets decreasing by 20,327 thousand yen, while property, plant and equipment increased by 7,663 thousand yen and investments and other assets increased by 25,947 thousand yen. Liabilities Total liabilities at the end of the second quarter of fiscal 2019 decreased by 83,985 thousand yen compared with the end of fiscal 2018 to 3,477,779 thousand yen. Of this, current liabilities decreased by 88,888 thousand yen compared with the end of fiscal 2018 to 3,472,875 thousand yen. This was mainly attributable to trade accounts payable decreasing by 51,554 thousand yen and other (current liabilities) decreasing by 24,726 thousand yen. Non-current liabilities increased by 4,903 thousand yen compared with the end of fiscal 2018 to 4,903 thousand yen. This was attributable to other (non-current liabilities) increasing by 4,903 thousand yen. Net assets Total net assets at the end of the second quarter of fiscal 2019 increased by 330,204 thousand yen compared with the end of fiscal 2018 to 4,592,880 thousand yen, and the equity ratio was 56.4%. The increase in total net assets was mainly attributable to increase in retained earnings in that, while there was payment of dividends to shareholders, posting of profit attributable to owners of parent led to retained earnings increasing by 309,187 thousand yen.
2) Cash flows Cash and cash equivalents (“net cash”) at the end of the first 2 quarters of fiscal 2019 decreased by 66,244 thousand yen compared with the end of fiscal 2018 to 2,966,862 thousand yen. The following outlines the status and underlying factors of each classification of cash flows for the first 2 quarters of fiscal 2019. Cash flows from operating activities Cash flows from operating activities for the first 2 quarters of fiscal 2019 amounted to net cash provided by operating activities of 181,238 thousand yen (inflow decrease of 438,589 thousand yen year on year). While there was decrease in net cash due to payment of income taxes of 310,185 thousand yen, there was increase in net cash from operating activities throughout the first 2 quarters of fiscal 2019 of 491,402 thousand yen. Cash flows from investing activities Cash flows from investing activities for the first 2 quarters of fiscal 2019 amounted to net cash used in investing activities of 35,831 thousand yen (outflow decrease of 8,062 thousand yen year on year). This was mainly attributable to purchase of intangible assets of 16,954 thousand yen, purchase of property, plant and equipment of 12,409 thousand yen, and payments of leasehold deposits of 8,586 thousand yen. Cash flows from financing activities Cash flows from financing activities for the first 2 quarters of fiscal 2019 amounted to net cash used in financing activities of 211,651 thousand yen (outflow increase of 101,840 thousand yen year on year). This was mainly attributable to payment of dividends to shareholders of 211,438 thousand yen.
(3) Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information
The earnings forecast for the full year of fiscal 2019 remains unchanged from that announced in “Consolidated Financial Results for the Fiscal Year of 2018” dated February 13, 2019.
2. Matters Concerning Summary Information (Notes)
Not applicable.
ELAN Corporation (6099) Consolidated Financial Results for the First 2 Quarters of Fiscal 2019
- 4 -
3. Quarterly Consolidated Financial Statements and Significant Notes Thereto (1) Quarterly Consolidated Balance Sheet
(Unit: thousand yen)
Fiscal 2018 (as of Dec. 31, 2018)
Second Quarter of Fiscal 2019
(as of June 30, 2019)Assets
Current assets Cash and deposits 3,057,392 2,991,150Accounts receivable - trade 2,477,293 2,642,164Merchandise 592,548 525,751Supplies 2,171 12,013Accounts receivable - other 1,180,556 1,430,737Other 40,754 47,455Allowance for doubtful accounts (357,801) (423,420)Total current assets 6,992,917 7,225,853
Non-current assets Property, plant and equipment 302,150 309,814Intangible assets
Goodwill 127,026 107,483Other 111,964 111,179Total intangible assets 238,990 218,663
Investments and other assets 290,381 316,329Total non-current assets 831,523 844,806
Total assets 7,824,440 8,070,659Liabilities
Current liabilities Accounts payable - trade 2,745,825 2,694,271Income taxes payable 310,117 299,008Provision for bonuses 7,998 6,500Other 497,822 473,095Total current liabilities 3,561,764 3,472,875
Non-current liabilities Other - 4,903Total non-current liabilities - 4,903
Total liabilities 3,561,764 3,477,779Net assets
Shareholders’ equity Share capital 573,496 573,496Capital surplus 543,496 543,496Retained earnings 3,141,654 3,450,842Treasury shares (238) (238)Total shareholders’ equity 4,258,408 4,567,596
Accumulated other comprehensive income Valuation difference on available-for-sale securities (13,940) (14,620)
Total accumulated other comprehensive income (13,940) (14,620)Share acquisition rights 18,207 39,904Total net assets 4,262,675 4,592,880
Total liabilities and net assets 7,824,440 8,070,659
ELAN Corporation (6099) Consolidated Financial Results for the First 2 Quarters of Fiscal 2019
- 5 -
(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income Quarterly Consolidated Statement of Income
Consolidated Year to Date (Unit: thousand yen)
First 2 Quarters of Fiscal 2018
(from Jan. 1, 2018 to June 30, 2018)
First 2 Quarters of Fiscal 2019
(from Jan. 1, 2019 to June 30, 2019)
Net sales 8,995,104 10,340,061Cost of sales 6,618,527 7,646,358Gross profit 2,376,577 2,693,703Selling, general and administrative expenses 1,708,969 1,918,655Operating profit 667,608 775,047Non-operating income
Gain on sales of non-current assets 0 854Subsidy income - 2,180Other 1,222 3,871Total non-operating income 1,222 6,905
Non-operating expenses Loss on retirement of non-current assets - 1,275Other - 10Total non-operating expenses - 1,286
Ordinary profit 668,830 780,667Profit before income taxes 668,830 780,667Income taxes - current 258,335 281,020Income taxes - deferred (23,955) (21,552)Total income taxes 234,380 259,468Profit 434,450 521,198Profit attributable to non-controlling interests - -Profit attributable to owners of parent 434,450 521,198
ELAN Corporation (6099) Consolidated Financial Results for the First 2 Quarters of Fiscal 2019
- 6 -
Quarterly Consolidated Statement of Comprehensive Income
Consolidated Year to Date (Unit: thousand yen)
First 2 Quarters of Fiscal 2018
(from Jan. 1, 2018 to June 30, 2018)
First 2 Quarters of Fiscal 2019
(from Jan. 1, 2019 to June 30, 2019)
Profit 434,450 521,198Other comprehensive income
Valuation difference on available-for-sale securities - (680)Total other comprehensive income - (680)
Comprehensive income 434,450 520,518Comprehensive income attributable to
Comprehensive income attributable to owners of parent 434,450 520,518Comprehensive income attributable to non-controlling interests - -
ELAN Corporation (6099) Consolidated Financial Results for the First 2 Quarters of Fiscal 2019
- 7 -
(3) Quarterly Consolidated Statement of Cash Flows (Unit: thousand yen)
First 2 Quarters of Fiscal 2018
(from Jan. 1, 2018 to June 30, 2018)
First 2 Quarters of Fiscal 2019
(from Jan. 1, 2019 to June 30, 2019)
Cash flows from operating activities Profit before income taxes 668,830 780,667Depreciation 26,733 32,828Amortization of goodwill 19,542 19,542Increase (decrease) in provision for bonuses 4,169 (1,498)Increase (decrease) in allowance for doubtful accounts 37,836 65,618Interest and dividend income (15) (19)Share-based remuneration expenses - 21,697Loss (gain) on sales of non-current assets (0) (854)Loss on retirement of non-current assets - 1,275Decrease (increase) in trade receivables (57,219) (415,051)Decrease (increase) in inventories 54,065 56,954Decrease (increase) in other current assets (9,535) (6,700)Increase (decrease) in trade payables 306 (51,554)Increase (decrease) in accounts payable - other 27,335 23,393Increase (decrease) in other current liabilities 30,203 (32,000)Other, net 4,216 (2,895)Subtotal 806,469 491,402Interest and dividends received 17 21Income taxes paid (186,658) (310,185)Net cash provided by (used in) operating activities 619,827 181,238
Cash flows from investing activities Payments into time deposits (24,285) (24,287)Proceeds from withdrawal of time deposits 24,283 24,285Purchase of property, plant and equipment (8,076) (12,409)Proceeds from sales of property, plant and equipment 0 1,300Purchase of intangible assets (34,996) (16,954)Payments of leasehold deposits (486) (8,586)Other, net (331) 820Net cash provided by (used in) investing activities (43,893) (35,831)
Cash flows from financing activities Proceeds from issuance of shares 9,880 -Purchase of treasury shares (92) -Dividends paid (119,598) (211,438)Repayments of lease obligations - (213)Net cash provided by (used in) financing activities (109,811) (211,651)
Net increase (decrease) in cash and cash equivalents 466,122 (66,244)Cash and cash equivalents at beginning of period 2,122,349 3,033,107Cash and cash equivalents at end of period 2,588,471 2,966,862
ELAN Corporation (6099) Consolidated Financial Results for the First 2 Quarters of Fiscal 2019
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(4) Notes to the Quarterly Consolidated Financial Statements (Notes on the Going Concern Assumption)
Not applicable.
(Notes in the Event of Material Change in the Amount of Shareholders’ Equity) Not applicable.
(Additional Information) (Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting,” Etc.)
Starting from the beginning of the first quarter of fiscal 2019, ELAN has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28 issued on February 16, 2018), etc. Accordingly, “Deferred tax assets” is presented under “Investments and other assets.”
(Segment Information, Etc.) [Segment information] I. First 2 Quarters of Fiscal 2018 (from January 1, 2018 to June 30, 2018)
The information is omitted, because the ELAN Group has a single segment—the nursing- and medical-care related business.
II. First 2 Quarters of Fiscal 2019 (from January 1, 2019 to June 30, 2019)
The information is omitted, because the ELAN Group has a single segment—the nursing- and medical-care related business.