corporate outline - 株式会社エラン · elan group •start operations of elan service...

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


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


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 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 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%



2,377

2,694

26.4%26.1%



667

775

7.4% 7.5%



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)


(+0.1% 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


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)


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

ＦＨ

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ＤＯＥＲＯＥＲＯＡ

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


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


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)


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


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


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


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



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


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.


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%


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


－ 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


－ 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.


－ 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


－ 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)


(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


－ 6 －

Quarterly Consolidated Statement of Comprehensive Income

Consolidated Year to Date (Unit: thousand yen)


(from Jan. 1, 2018 to June 30, 2018)


(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 - -


－ 7 －

(3) Quarterly Consolidated Statement of Cash Flows (Unit: thousand yen)


(from Jan. 1, 2018 to June 30, 2018)


(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


－ 8 －

(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.

corporate outline - 株式会社エラン · elan group •start operations of elan service...

Documents