3154.T

• Company Overview and Core Business

  • Mediath Holdings Group is structured around 16 consolidated companies as of December 2025, including medical device sales firms, repair and maintenance companies, medical institution solution providers, and nursing and welfare equipment sales/rental businesses. Three new non-core format companies launched in July 2025, and two Hokkaido-based companies were merged into A-North Medical Co., Ltd. in October 2025 to strengthen the regional business base.
  • The group operates 85 locations across 25 prefectures from Hokkaido to Fukuoka, with a key competitive advantage of high market share in the populous Tokyo metropolitan area. Approximately half of medical device sales come from transactions with public medical institutions and university hospitals that conduct advanced medicine, delivering stable revenue through long-standing accumulated trust.
  • Approximately 60% of group sales are imported products. The broader Japanese medical device market is expected to grow at a steady 2-3% annual rate through 2040, supported by rising medical demand from population aging, increasingly advanced and high-priced devices from medical technology progress, and growing demand for new devices especially in the cardiovascular field, leaving ample room for top-line growth.

• Mid-Term Management Plan (June 2026 – June 2028)

  • The plan uses ordinary profit as the core management KPI, with a target of 2.78 billion yen in ordinary profit by 2028. The strategy focuses on improving revenue centered on ordinary profit, strengthening existing businesses, continuing to expand business scale via M&A, and improving business efficiency and driving further growth through new business model creation. This is a rolling revised plan based on 2025 full-year results, where ordinary profit significantly exceeded targets driven by market growth from new products in the cardiovascular and orthopedic fields despite negative impacts from the 2024 June medical fee revision.
  • The core strategic pillars for increasing corporate value are structural reform of existing businesses and selective concentration of business investment. For existing businesses, the group is advancing initiatives to improve business and capital efficiency to strengthen the earnings base. For growth areas, the group is applying selective concentration to invest resources heavily in future growth areas while maintaining a solid financial base. Human capital strengthening is positioned as a core foundation for these initiatives, and the group is advancing sustainability-focused management covering stable supply, environmental action, talent utilization, and governance to drive sustained corporate value growth, leveraging the group’s core strengths in M&A, solution provision, and operational efficiency.

• Core Competitive Strategies

  • M&A and Alliance Strategy: M&A is driven by the changing market environment: for overseas manufacturers, the Japanese market has declining attractiveness due to slowing growth, suppressed reimbursement prices lowering profit potential, and high market entry costs including regulatory approval, leading manufacturers to prioritize other markets. Manufacturers now increasingly require distributors with wide-area distribution networks and stable management bases, so the group uses M&A and alliances to meet these requirements, expand geographic coverage, improve regional share and sales strength, strengthen its own financial base, and work toward the goal of building a nationwide distribution network and reinforcing its position as a leading manufacturer-selected distributor. Most recently, Kurihara Medical Instruments reached a basic agreement to acquire shares in Kyoei Medical Instruments Co., Ltd. in October 2025, and past M&A activity has gradually delivered results through bringing in specialized firms and implementing internal integration and spin-offs to build more efficient operating structures and improve sales capacity.
  • Total Solution Business: The group differentiates itself by providing a full suite of solutions to address growing operational challenges for medical institutions, including compliance with physician work style reform, falling revenue from medical cost containment policies, and rising utility and labor costs. The solution lineup includes: A-source Database (Japan’s largest independent medical materials database), Meccal Analysis Service (supports purchasing management by analyzing purchasing data and visualizing challenges), SPD (hospital logistics management efficiency service), A-source Store (simplified SPD for small and medium-sized hospitals), and SurgeLane (supports hospital management by visualizing operating room profit and utilization and improving efficiency of indirect work such as medical material management and preparation). All solutions are combined, cross-functional services that drive business model transformation for medical institution services and medical material supply, and the ability to deliver all solutions in-house is a core group strength.
  • Operational Efficiency Initiatives: Externally, the group supports manufacturers’ efficiency goals by providing reverse logistics to reduce manufacturer burden, and offers 3PL services for inventory management and shipping to help solve manufacturers’ logistics challenges. Internally, the group has consolidated group back-office functions into a shared service to standardize work and reduce workload, consolidated and reorganized specialized functions (including integrating dispersed cardiovascular and orthopedic functions across the group), expanded training programs and revised evaluation systems to strengthen human capital and create an environment for diverse talent to thrive, expanded common purchasing and introduced warehouse management systems to improve both cost efficiency and quality in procurement and logistics, and accelerated digitalization and visualization of business processes to refine management and steadily improve group-wide productivity.

• Recent Operational Updates

  • Group Restructuring: The group completed a large-scale organizational restructuring to consolidate business functions and maximize group synergy, eliminating cross-business overlapping work to drive efficiency, quality improvement, and cost reduction. Launching new departments and strengthening existing restructured departments has also accelerated next-generation leader development and strengthened the management base.
  • Spin-off of Specialized Functions: Following the prior full-year plan, three core functions were spun off into independent specialized companies: Mediris Logistics (logistics), Miul Healthcare (product procurement), and Reps Inc. (manufacturer sales agency). Specializing each function improves business speed and maximizes overall group value.
  • Recent New Initiatives: Mediris Logistics has launched a joint delivery demonstration experiment with industry partners to improve medical device logistics efficiency, addressing challenges such as appropriate inventory levels, delivery costs, and environmental burden, with the goal of developing a new logistics framework for the industry. Kurihara Medical Instruments also entered a basic agreement for business integration with Kyoei Medical Instruments, a regionally focused medical device distributor, to generate integration benefits across business, logistics, and management and build a stronger structure to contribute to regional healthcare.
  • Sustainability: The group has established a new medium- to long-term sustainability vision and quantitative targets across core themes including stable medical device supply, environmental response, and talent utilization. For social contribution, the group continues core initiatives including school lunch support and matching gifts to Doctors Without Borders, and newly began supporting the Japan Assistance Dog Information Center to promote assistance dog adoption and public understanding through donations and outreach. Individual group companies also conduct ongoing local social contribution activities in partnership with local professional sports teams and governments; for example, Kyowa Medical Instruments and Albers have held medical work experience events for children since 2007, with the 2026 event scheduled for September in Hamamatsu, Shizuoka.

• Full-year 2026 June term guidance is maintained unchanged from prior projections. The full-year sales target is 305 billion yen. The plan prioritizes forward-looking investment for future growth while balancing growth and cost control.
  • The group targets growth in sales and gross profit driven by expanded solution deployment, increased new SPD contracts, rising examination and surgery case volume, and new case acquisition in the cardiovascular and orthopedic fields. While headwinds are expected from restrained capital expenditure by medical institutions facing worsening business conditions and higher cost of goods sold from yen depreciation and price inflation, the group intends to maintain gross margin at prior year levels through strengthened sales activities.
  • Lower operating profit, ordinary profit, and net profit are expected compared to prior projections that did not account for higher costs: higher personnel costs from ongoing hiring and base pay increases to support major subsidiary business expansion, higher logistics costs in the second half from increased sales volume and rising delivery unit prices, and a slight increase in IT-related costs from IT security strengthening and core system development.
  • Dividend policy: The group maintains a policy of balancing growth investment and shareholder returns, securing internal reserves needed for stable medium- to long-term growth and distributing profits in line with growth, targeting a consolidated payout ratio of 30% or higher. For the 2026 June full term, a dividend of 20 yen per share is planned, representing a planned consolidated payout ratio of 34.2%.
  • Capital efficiency targets: Shareholder equity cost is approximately 6% based on the CAPM framework. While ROE has been on a declining trend after peaking in the 2021 June term, it remains above the cost of equity, currently hovering in the 6% range. The group targets achieving ROE of 8% or higher over the medium to long term through profit growth. PBR has traded around 1.0x since the 2022 June term amid stock price declines, and the group targets improving market valuation through profit growth and strengthened external communication. Going forward, the group will pursue sustained growth by strengthening profitability, capital efficiency, shareholder returns, and talent investment, targeting ROE of 8% or higher through structural reform of existing businesses, new business development in new areas, and maintaining an appropriate level of equity capital and optimizing capital structure.

1. Medical Device Consumables: This segment accounts for the majority of non-equipment sales, and grew year-on-year in the 2026 June term interim period. All subfields saw growth: catheter examination and treatment grew on the back of increased sales in western Japan, orthopedic implant case volume increased, and endoscopy-related products, non-cardiac surgical instruments, and cardiac surgery products all posted slight increases. The growth was driven by rising case volume and new customer acquisition, particularly in the cardiovascular and orthopedic fields. 2. Medical Equipment (Capital Equipment): Overall segment sales declined year-on-year in the 2026 June term interim period. This decline stemmed from sales postponements, lost projects, and the comparison to a large equipment sale in the prior year period. Radiation equipment posted a large year-on-year increase due to large equipment sales, while endoscopy examination/surgery equipment and ultrasound equipment saw year-on-year decreases. 3. Nursing and Welfare Equipment Rental: While this segment accounts for a low percentage of total consolidated sales, it posted strong positive growth in the 2026 June term interim period. 4. Geographic Performance: Sales increased on a region-wide basis led by western Japan and Tokyo, driven by higher sales from newer subsidiaries Ortho Edge Japan and Arcent. Some prefectures saw slight sales declines due to the absence of large equipment sales that occurred in the prior year comparable period. For the full interim consolidated period: Total company sales were 149.211 billion yen, up 4.6% year-on-year (an increase of 6.506 billion yen). Gross profit was 17.3 billion yen, up 2.7% year-on-year. Operating profit was 585 million yen, down 22.1% year-on-year (77.9% of the prior year period). Ordinary profit was 817 million yen, down 16.9% year-on-year (83.1% of the prior year period). Net profit attributable to parent company shareholders was 387 million yen, down 4.8% year-on-year (95.2% of the prior year period).

• Slowing growth in the Japanese medical device market and declining market priority for overseas manufacturers creates pressure on the group to continuously expand scale and strengthen its distribution network to remain a selected partner for global manufacturers.
  • Medical institutions face worsening operational conditions from policy-driven medical cost containment, rising input costs, and work reform requirements, leading to delayed or cancelled large equipment purchases that create volatility in capital equipment segment sales.
  • Persistent cost inflation, yen depreciation, rising delivery costs, and rising personnel costs from necessary hiring and wage increases put downward pressure on profitability even as sales grow.
  • Ongoing investment needs for IT system upgrades, cybersecurity strengthening, and pre-development of new growth areas will increase near-term operating costs.

No question and answer section was included in the provided transcript.