Consolidated financial results and position

2015/92016/92017/92018/92019/9
Net Sales
(¥millions)
55,90462,03965,28269,86974,373
Operating income
(¥millions)
1,4113,3633,8974,3214,405
Ratio of operating income
(%)
2.5%5.4%6.0%6.2%5.9%
Ordinary profits
(¥millions)
9702,9893,7324,0613,841
Ratio of ordinary profits
(%)
1.7%4.8%5.7%5.8%5.2%
Profit attributable to owners of parent(¥million)(542)8781,5501,4871,822
Total assets
(¥millions)
55,86159,10465,60578,03480,179
Shareholders’ equity
(¥millions)
20,66721,39723,60833,53632,994
Ratio of Shareholders’
equity (%)
36.4%35.5%34.9%28.9%27.8%

Net Sales

Operating income and ratio of operating income

Ordinary profits and ratio of ordinary profits

Profit attributable to owners of parent

Total Assets

Shareholders equity and ratio of shareholders equity

Earnings Forecast

About the pharmaceutical industry

In the pharmaceutical industry, while creation of innovative drugs is anticipated through technological innovation and industry-government-academia collaboration towards providing personalized medicine or “precision medicine”, the drug pricing rules have been revised focusing on validity/accuracy improvement of the drug pricing calculation formula and appreciation of innovative technologies is considered due to impact on the health insurance budget.  Further improvement of productivity and efficiency is expected for the pharmaceutical industry for transformation to the industrial structure with more global competitiveness.  New technologies called the Fourth Industrial Revolution such as artificial intelligence (AI) or IoT are bringing significant changes to the society, and as way of medicine and people’s ideas of health change in the healthcare arena, industry, government, academia and civil society are collaborating to achieve innovation to address the decreasing birthrate and aging population.

Since it was quite difficult to reasonably calculate our future business performance due to the impact of COVID-19 including delay, postponement, and cancellation of many pharmaceutical drug development projects, CMIC Group’s future outlook was previously undetermined. Following the recent partial resumption of new drug development projects, we calculated and revised its forecast based on all available information gathered at this point. Our FY2020 performance forecast for sales is expected to be 75,000 million yen, operating income is expected to be 2,300 million yen, ordinary income is expected to be 2,600 million yen, and profit attributable to owners of parent is expected to be 1,350 million yen.

2019/9
results
(¥millions)
2020/9
forecast
(¥millions)
Change
Net Sales74,37375,0000.8%
Operating Income4,4052,300(47.8)%
Ordinary Profits3,8412,600(32.3)%
Profit attributable to owners of parent1,8221,350(25.9)%

Net Sales

Operating income and ratio of operating income

Forecast for FY ending Sept. 2020 (by segment)

CRO Business

In this business, we provide services primarily to pharmaceutical companies to support drug development.

In the 3rd quarter of the current fiscal year, we are supporting overseas companies entering the Japanese market and non-healthcare companies entering the healthcare sphere, promoting measures to address sophisticating development needs including biopharmaceuticals and regenerative medicines, and expanding our presence in Asia.

For clinical services, we are promoting PVC projects involving multiple business units, clinical trials with the latest method and technologies (e.g. Virtual clinical trials with on-line doctor consultation, improving the efficiency of clinical trials with electronic prescription records), and improving the expertise and technical capabilities of our talents.

For non-clinical services, our laboratories in Japan and the United States are further collaborating to provide drug discovery support for advanced medicine including nucleic acid drugs and regenerative medicine.

Sales were below the same period last year due to the impact of delay in receiving orders and cancellation/postponement of existing projects following the global pandemic of COVID-19 and downsizing/increased complexity of development projects. Operating income was also below the same period last year impacted by reduced operation rates and listing of unprofitable projects.

CDMO Business

In this business, we provide services primarily to pharmaceutical companies to support drug formula development and manufacturing.
In the 3rd quarter of the current fiscal year, CDMO business is further improving technical capabilities, developing low-cost production structure, and enhancing competitiveness through strategic capital investment as a global pharmaceutical drug manufacturing platform that includes formulation design, investigational new drug manufacturing, and commercial production.
Sales and operating income exceeded the same period last year thanks to increased contract volume in Japan and the sales contribution by CMIC CMO Nishine Co., Ltd., despite the reduction of contract volume following the inventory adjustment by customers in the United States.

CSO Business

In this business, we provide sales- and marketing-support services, primarily to pharmaceutical companies.
In the 3rd quarter of the current fiscal year, in addition to the medical representative (MR) dispatch and other related services, we are providing comprehensive solution that combines multiple communication channels and various services including dispatch and training of Medical Affairs personnel.
Sales and operating income exceeded the same period last year thanks to the steady progress in MR dispatch projects acquired in the previous period and the operation rates maintained at the high level.

Healthcare Business

In this business, we provide SMO services, healthcare services related to treating, maintaining, and promoting the health for medical institutions, patients and general consumer, and services related to BPO and human resources. In the 3rd quarter of the current fiscal year, we are further strengthening the oncology capabilities in the SMO operations and providing new services. We are creating new business for early detection and prevention of aggravation of disease, including “harmo” electronic prescription record service and “SelCheck” (self-screening) service. We will strive to win new SMO business orders and aim to expedite the in-flow of income for the new healthcare business.

Sales were below the same period last year despite growth in healthcare services, due to reduction in work volume for some BPO/Staffing services. Operating income was below the same period last year impacted by lower sales of BPO/Staffing services and prior investment cost to create new healthcare business models.

Innovative Pharma Model Business

IPM business provides new business solutions to pharmaceutical companies that combine value chains and marketing authorization licenses (intellectual properties) possessed by our group. We are mainly delivering development and marketing services for orphan drugs.
In the 3rd quarter of the current fiscal year, we are selling orphan drugs, including products developed in-house. Further, we are strengthening business foundation through provision of IPM platform such as supporting foreign companies entering the Japanese market and providing strategic options to pharmaceutical companies in accordance with their business model changes. We will further expand the business scale and reach profitability by continuing to provide new business solutions.

Though sales were below that of the corresponding period last year due to reduction in sales volume of some products, operating surplus was recorded due to the effect of cost reduction and commission income.

2019/9 results
(¥millions)
2020/9 forecast
(¥millions)
Change
CRO BusinessSales36,52233,500(8.3)%
Operating Income6,6234,880(26.3)%
CDMO BusinessSales17,29220,50018.5%
Operating Income116(190)
CSO BusinessSales7,9298,6008.5%
Operating Income236770225.5%
Healthcare BusinessSales10,1079,970(1.4)%
Operating Income1,158610(47.4)%
IPM BusinessSales3,3683,260(3.2)%
Operating Income(396)80
AdjustmentsSales(846)(831)
Operating Income(3,332)(3,850)
ConsolidatedSales74,37375,0000.8%
Operating Income4,4052,300(47.8)%

Dividend Forecast

Interim Dividend (yen)Year End Dividend (yen)Annual (yen)Dividend Payout
Ratio(%)
2020/9 Forecast5.0017.0022.0029.5
2019/9 Results5.0027.0032.0032.3

See “Dividends” in the Stock Information for details of past.

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