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PHC Group Releases Newly Revised Mid-Term Plan, the “Value Creation Plan,” Outlining Changes for FY2025 to Accelerate Growth by Advancing Value-Based Healthcare

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PHC Holdings Corporation (headquarters: Minato-ku, Tokyo, Japan, President & CEO: Shoji Miyazaki, hereafter PHC Group) announces the release of its newly revised Mid-term Plan, the “Value Creation Plan”*1 for FY2022 to FY2025. The primary update in this plan is the introduction of new business growth areas that will enable PHC Group to advance value-based healthcare globally.

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PHC Group’s Growth Areas (Graphic: Business Wire)

Our Value Creation Strategy Focuses on Realizing “Value-Based Healthcare”

Since the original Mid-term Plan was released in June 2021, PHC Group has initiated new commercial partnerships, expanded investments in our core business domains and completed its listing on the Tokyo Stock Exchange’s First Section (current Prime market) in October 2021. At the same time, increasing healthcare costs and disparities in access to healthcare, caused by issues like geographic location and income, continue to be critical challenges around the world. In light of these challenges, PHC Group has updated its global business strategy to focus on contributing to “Value-Based Healthcare,” a healthcare delivery model that seeks to maximize healthcare outcomes for patients based on their individual needs, which can lead to better care as well as improved cost-effectiveness.

Specifically, PHC Group will seek to strengthen its three core business domains while leveraging synergies among those businesses to target three new growth areas:

Strategy on Foundation (Core Business Domains)

  • Diabetes Management: PHC Group will expand new business opportunities for blood glucose monitoring systems (BGM) in emerging markets and enhance growth business such as continuous glucose monitoring system (CGM).
  • Healthcare Solutions: The Medicom (healthcare IT) business in Japan will seek to capitalize on demand from the shift to cloud-based electronic medical record (EMR) systems and Japanese government-led policies. The LSI Medience (clinical testing services and diagnostic reagents) business will enhance cancer and genetic testing and boost clinical trials and point-of-care testing (POCT) businesses outside of Japan.
  • Diagnostics & Life Sciences: The PHCbi (biomedical) business will develop new products with energy-saving performance and internet of things (IoT) technology, and also optimize its global operations in development and manufacturing. The Epredia (anatomical pathology) business will seek to increase its market share by upgrading product quality and tapping into sales channels by region and segment used by PHC Group Business.

Strategy for Growth

  • Personalized Testing and Diagnostic Solutions: The diabetes management business, including Ascensia and PHC IVD, will promote sales of its innovative CGM and develop POCT technologies.
  • Digital Health Solutions: Medicom and LSI Medience will integrate their healthcare management businesses including annual health check programs to advance health support including preventive medicine for individuals. They will advance solutions that assist the workflow for healthcare professionals such as administrative support services efficiently managed by AI. To contribute to reducing healthcare costs and enhancing treatments, PHC Group will work to integrate and analyze health data.
  • Advanced Therapy Development Solutions: The Epredia and PHCbi businesses will leverage one another’s customer networks in pharmaceutical companies to expand sales globally for both brands. Expanded product portfolios will include new equipment for cell metabolism analysis and anatomical pathology, and high-quality, high-speed models for diagnostics using AI will be developed for hospitals.

Revised Financial Targets

Through this Value Creation Plan, PHC Group is targeting 420 bn/JPY in revenue and 56 bn/JPY in operating profit:

FY2021 Actual

FY2025 Target*2

CAGR | 2021-2025

Revenue340.5bn420bn

+5.4%

Operating Profit8.2bn56bn

+62%

(Margin)

(2%)

(13%)

20% if impairment
Impairment ofis not included
18.4bn/JPY of Epredia
business included
Cash-based24.8bn49bn

+19%

net income
EBITDA57.7bn87bn

+11%

Adjusted EBITDA71.9bn87bn

+4.9%

Reference
Assumed Exchange Rate

$

112JPY130JPY

130JPY132JPY

With this combination of foundational business and new growth areas, PHC Group’s newly revised Value Creation Plan will help the company advance its corporate mission of “contributing to the health of society through our diligent efforts to create healthcare solutions that have a positive impact and improve the lives of people.”

*1 Website on our “Value Creation Plan”: www.phchd.com/global/about/vcp
*2 Based on current business portfolio

About PHC Holdings Corporation (PHC Group)

PHC Holdings Corporation (TOKYO Prime 6523) is a global healthcare company with a mission of contributing to the health of society through healthcare solutions that have a positive impact and improve the lives of people. Its subsidiaries include PHC Corporation, Ascensia Diabetes Care Holdings AG, Epredia Holdings Ltd., and LSI Medience Corporation. Together, these companies develop, manufacture, sell and service solutions across diabetes management, healthcare solutions, diagnostics and life sciences. PHC Group’s consolidated net sales in FY2021 were JPY 340 billion with global distribution of products and services in more than 125 countries.
www.phchd.com

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Contact information

Media Contact:
Julia Cottrill
Hiroko Arai
Investor Relations & Corporate Communications Group
PHC Holdings Corporation
TEL: +81-3-6778-5311
Email: phc-pr@gg.phchd.com

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