Fiscal 2022 (April 1, 2022 to March 31, 2023)

Sysmex is deeply committed to its supporting role
as provider of each individual lifetime “healthcare journey,”utilizing its proprietary technology and solutions in better and better ways.
Sysmex will also continue to innovate in testing and diagnosis
as important functions within the healthcare journey,collaboratively creating unique values in the areas of
personalized medicine and novel treatments.
We will continue to grow as a sustainable company creatingsocial and economic value, providing a greater sense of security
among people and the society in which they live.

01 Sysmex Report 2023

Sysmex Report 2023 02

Contents

Current Picture

01 About Sysmex
01
05
07
09
11

 Corporate Message
 Corporate Philosophy of the Sysmex Group Sysmex’s History
 Snapshot (Sysmex’s Management Resources)
 Sysmex’s Business Model

Prospects

15 Sysmex’s Value Creation
17
21
23
25
27
29
31

 Message from the Group CEO
 Story of Value Creation
 Long-Term Corporate Strategy
 Materiality (priority issues)
 Core Strategy
 Provision of Long-Term Value Worksite Commentary

33 Mid-Term Management Plan and Initiatives
34
35
39
41
43
55
59
62

 Management Plans to Date
 Message from the President Overview of the Mid-Term Management Plan Mid-Term Management Plan Targets
 Key Actions under the Mid-Term Management Plan Message from the Executive in Charge of Finance Performance Highlights
 Topics in Fiscal 2022

63
71

73 Corporate Governance
74
77
81
83
87

 Status of Sustainability Targets
 Stakeholder Engagement

Management

 Message from Outside Members of the Managing Board
 Corporate Governance Risk Management
 Members of the Managing Board Executive Officers

89 Financial Overview and Corporate Overview
89  Management’s Discussion and Analysis
95  Consolidated Financial Data (10 Years)
97  Consolidated Statement of Financial Position
101  Sysmex’s Businesses
104  Primary Products and Services
107  Terminology
109  Stock Information
110  Corporate Information

03 Sysmex Report 2023

Initiatives

Data

Editorial Policy
The Sysmex Report, an integrated report that summarizes financial and non-financial information,is intended to help stakeholders understand Sysmex’s medium- to long-term value creation. For
more detailed information, please visit our website or see our Sustainability Data Book.
In editing this publication, we referred to the International Integrated Reporting Council’sInternational Integrated Reporting Framework, as well as the Guidance for Collaborative Value
Creation issued by the Ministry of Economy, Trade and Industry.

Information Disclosure System
Financial Information
Non-financial Information
Sysmex Report (an integrated report, published annually)
Investor Relations Site

Sustainability Site

https://www.sysmex.co.jp/en/ir/index.html

https://www.sysmex.co.jp/en/csr/index.html

This site discloses details of financial, stock andshareholder information.
• Financial statements• Financial data, etc.

•S
 ustainability Data Book (PDF, publishedannually)
https://www.sysmex.co.jp/en/csr/report/
index.html

Sustainability
Data Book

Corporate Governance Reporthttps://www.sysmex.co.jp/en/corporate/
governance.html

Organizations Covered
In principle, this report covers the Sysmex
Group (including Group companies in Japanand overseas). In this report, “Sysmex” refers
to the Sysmex Group as a whole. “Sysmex
Corporation” refers to the Company on astand-alone basis.

Forward-Looking Statements
Statements in this report pertaining to Sysmex’s
future strategies, plans, business performanceand other items are based on currently available
information and involve certain risks and uncertainties. Actual results may differ materially fromthose anticipated in these statements.

Accounting Standards andAccounting Policies
In fiscal 2016, we voluntarily adopted theInternational Financial Reporting Standards(IFRS). In this report, figures presented up to
fiscal 2014 are in accordance with the Japanese
GAAP. From fiscal 2015, figures are presented
in accordance with the IFRS.
In the fiscal year ended March 31, 2022, theSysmex Group changed its method of recognizing the costs of configuration or customization services in cloud computing contracts as
an expense when these services are received.
Figures for the fiscal year ended March 31, 2021
have been retroactively adjusted.

Period Covered
The target period is fiscal 2022 (April 1, 2022
to March 31, 2023), but the report also covers
some activities conducted after April 2023.

Cover Story
Sysmex is committed to establishing and promoting testing and diagnostic technologies that
put less of a burden on patients, both in Japan and overseas. As part of these efforts, we haveintroduced a diagnostic reagent that examines the accumulation in the brain of amyloid beta,
which is known to be a cause of Alzheimer’s disease, from a small amount of blood. We aim to
help realize personalized healthcare, which is optimized to the individual, through our unique
technologies and solutions, empathizing with the universal desire of people to live a long andhealthy life, and improving their healthcare journey.
>>Website: Brand Concept Movie

Sysmex Report 2023 04

Corporate Philosophy of the Sysmex Group“Instilling confidence in stakeholders”
⸺A Sysmex Ideal Unchanged Since Our Founding ⸺
The “Sysmex Way,” the corporate philosophy of the Sysmex Group, carries forward the spirit of our
founder, Taro Nakatani, which calls for us to instill confidence among our customers, associates, andemployees. We have always been conscious of our stakeholders and have conducted our business andactions with their interests in mind. Mr. Nakatani emphasized that in this ever-changing world nothing
lasts forever, and it is customary for things to wax and wane, including companies. To ensure corporate
sustainability in a constantly changing society, he stressed the importance of taking on challenges andcontinuing to transform ourselves. Sysmex is in alignment with the universal desire of people to behealthy and live long lives. In this spirit, we will continue to push forward in providing personalized
healthcare and driving advances in healthcare.

The Founder’s Purpose
Our founder, Taro Nakatani, defined our
corporate objective thus: “By providing the
products we create, we will help resolve
the issues society faces and make our own
lives more fulfilling.” This objective forms
the basis for our founding philosophy, the“Three Aspects of Confidence.”
The “Three Aspects of Confidence:”
Confidence
among ourcustomers

Founder: Taro Nakatani

05 Sysmex Report 2023

Confidence
in ourassociates

Confidenceof ouremployees

Our founding philosophy,
the “Three Aspects of Confidence:”• Total customer confidence in all of our products.
• Total confidence in our associates in all ourbusiness transactions.
• Total confidence of our employees in themselves
and all their work.

About Sysmex

In 2007, we formulated the “Sysmex Way,” the corporate philosophy for the Sysmex Group, carrying forward andexpanding the perspective of our founding philosophy. Our current corporate philosophy consists of three parts:
Mission, which defines our social raison d’être and states how we hope to contribute to society: Value, which describes
the values and management style that we must abide by, and Mind, which expresses the mindset and code of conductthat every employee within the Sysmex Group must observe. Shared Values* encompass the customers, business
partners and employees expressed in our original company philosophy, the “Three Aspects of Confidence.” In addition,
they declare our objective of instilling confidence in other stakeholders, our shareholders, and society.

Sysmex’s Value Creation
Mid-Term Management Planand Initiatives
Corporate Governance
Activity Report andCorporate Overview* To communicate more clearly that these are the values we provide to each stakeholder, in fiscal 2023 we changed our “Core Behaviors” to“Shared Values.”

Sysmex Report 2023 06

Sysmex’s History
Since its founding, Sysmex has always been committed to providing products and services that meet theneeds of the times, by anticipating changes in the operating environment. It all began with the commercialization of Japan’s first automated hematology analyzer. Nowadays, in addition to diagnosis, our offerings span multiple fields, and our value proposition extends into the areas of prevention and treatment.

Launched the world’s
first hematology
transport system (1990)

Opened a representative officein the United States (1977)

Launched first made-in-Japan
automated hematology
analyzer (1963)

Opened a representative
office in Germany (1972)

Establishment (1968)

(FY)

1963

1968

Entered the hemostasis
field (1984)

Launched the Sysmex
brand (1978)
Entered theurinalysis field (1974)

1970

1975

1963—1980’

1980

Formed alliance inthe hemostasis fieldwith the current
Siemens Healthineers(1995)
Established a joint
venture company inChina (1995)

Entered theimmunochemistry
field (1987)

Commenced direct
sales and service inthe United Kingdom(1991)

1985

1990

1995

1980’—1990’

Changes in the
Operating
Environment

Enrollment in National
Health Insurance (Japan)
Growth in Healthcare Demand

Increasingly Diverse Healthcare Needs
Efforts to Optimize Medical Expenses

Value Provided
by Sysmex

Automation of Blood
Cell Testing(Hematology)

Increasing Value Provided toLaboratories in Addition
to Testing• Launched first made-in-Japan
automated hematology analyzer• Developed reagents as well as
instruments, realizing increases intesting quality and performance• Developed the world’s firsthematology transport system,
making the testing process more
efficient and safer• Expanded into the fields of urinalysis,
hemostasis and immunochemistry

FY1980

FY1990Changes in
Sales by Field

Hematology
100%(including some sales from other fields)

07 Sysmex Report 2023

Hematology
90.8%
Non-hematology
9.2%(urinalysis, hemostasis,
immunochemistry, and others)

Fiscal 2025 target in
the mid-term
management plan:¥560.0 billion
Fiscal 2022 net sales

About Sysmex¥410.5 billion
Entered a global OEM agreement with
Siemens Healthineers in the hemostasis field (2022)

Launched a robotic-assisted
surgery system (2020)
Sysmex’s Value Creation

Established a local subsidiary in Singapore (1998)
Entered an alliance with F. Hoffman-La Roche related to hematology products (1998)
Changed company name to Sysmex Corporation (1998)

Opened a bio-diagnostics
reagent center (2019)

Began offering the SNCS network service (1999)

Listed on the first sections of the Osaka and Tokyo stock exchanges (2000)
Entered the life science field (2000)

Mid-Term Management Planand Initiatives

Formulated the “Sysmex Way,” the corporate
philosophy of the Sysmex Group (2007)

Overseas
sales ratio:

Commenced direct sales
and service in the UnitedStates (2003)

85.4%

2000

2005

1990’—2010’

2022

2015

2010

2025

2010’—

Medical Application of Innovative Technologies
Increasingly Diverse Healthcare andMore Diverse Needs

Expanding the Sales andService Area
Beginning to Provide
Services Utilizing IT

Taking on Challenges in
Personalized Medicine andOther Areas to Further Expand
Our Business Domain• Expanded our direct sales andservice structure, and expanded
offerings to more than 190 countries
and regions• Began using IT to provide proprietaryservices and support• Developed and commercialized a genetesting system in the cancer domain• Expanded into testing for Alzheimer’s
disease and malaria• Launched a medical robotics business

FY2002

FY2022

Hematology
Urinalysis/
fecal occult blood
Hemostasis
Immunochemistry
Clinical chemistry
Others

54.0%
5.0%
15.5%
9.0%
4.8%
11.7%

Hematology
Urinalysis
Hemostasis
Immunochemistry
Clinical chemistry
FCM
Life science
OthersMedical robotics

Activity Report andCorporate Overview

Promotion of Globalization
Advent of the IT Revolution

Corporate GovernanceOverseas sales
Domestic sales

58.8%
8.3%
16.3%
5.7%
0.8%
0.6%
4.9%
4.0%
0.6%

Sysmex Report 2023 08

Snapshot (Sysmex’s Management Resources)
R&D Capabilities and Intellectual Property

Production and Distribution Structure

Global R&D bases, technologies
and knowhow

Commitment to quality andstable supply

Three-year total
R&D investment

R&D bases

24 locations
Average number ofdevelopment projects
per yearAround65(Average over the past five years)

Instrument production
bases

Number of items
produced (reagents)

8 locations

1,253 items

Number of patents

Reagent production bases

Suppliers (Tier 1)

3,832

14 locations

Approximately

80.3 billion¥(Fiscal 2020–2022)(Total number of patents, utility
model rights and design rights)

Issues• Acquire and strengthen technologies throughopen innovation and others

250 companies

Issues• Step up the use of IT with a view to global
cost competitiveness• Shift manufacturing overseas (in some regions)

Diverse Human Resources

Realizing growth and respecting individuals, andbuilding a human resource portfolio

Engagement score

Number of
Employees

71%

10,522

Female managers ratio

Training time per employee

19.5%

30.0 hours(excluding Russia)

Issues• Strengthen engagement• Respond to global competition for talent

09 Sysmex Report 2023

Asia Pacific
10.3%
China
7.6%

EMEA
29.1%

Japan
38.7%

Composition of
Employees by
Destination
Americas14.3%Note: Unless indicated otherwise, figures are as of the end of fiscal 2022.

Stable Financial Foundation

Access to healthcare needs thatvaries by region and facility

Sustainable growth andhigh profitability

About Sysmex

Global Sales and Service Structure

62 locations
More than190

13,600(non-consolidated basis)

Alliance partners

Roche, EIKEN CHEMICAL,
Siemens Healthineers,

Operating margin

Market capitalization

ROE

410.5 billion 17.9%¥

Percentage of recurring sales

77.6%

othersIssues• Strengthen the sales and service structure in China,
India, and other countries• Expand services through more sophisticated IT

12.4%

1.8 trillion¥(Sales of reagents, services and support, others)

Brand strength

Efficient use ofenvironmental resources

Trust from stakeholders

Percentage reduction Percentage reduction in CO2
in CO2 emissions
emissions whenfrom business activities
using instruments

55% reduction 27% reduction(Base year: Fiscal 2016)(Base year: Fiscal 2016)

Decreased electricity consumption
by new products in the hematology field

Approximately

40%(Compared with Sysmex’ s older products)

Issues• Establish a medium- to long-term roadmap
that contributes to the realization of a circular
resource society

Customer Assessment in the United States

Top rating for the past 17 years(Source: IMV ServiceTrak™ 2023, Hematology)

Rollout of
the Sysmex Way
Translated into

9 languages

Corporate Culture Survey
Ratio of favorable responses
to the Sysmex Way

81%

Issues• Further enhance brand value

Sysmex Report 2023 10

Activity Report andCorporate Overview

Environmental Resources

Corporate Governance

Issues• Further improve profitability and capital efficiency

Mid-Term Management Planand Initiatives

Countries and regions
where businessis conducted

Approximately

Net sales

Sysmex’s Value Creation

Sales and service bases Customer needs addressedSysmex’s Business Model
Flow of Business Expansion

Core approach

Expanded fields of testing

Targets: Medical institutions

Domain: IVD

Hematology-focused

Global development• Customer base• Technologies• Quality• Market presence

Expanded solutions

New approach

Targets: Medical institutions,individuals

Domain: New

Expansion ofbusiness domains

Sysmex entered the in vitro diagnostics (IVD) hematol-

bio-reagent center. Through these initiatives, we haveogy field in 1963 through its successful launch of thesucceeded in expanding sales in the diagnostics busi-

first made-in-Japan automated hematology analyzer.

ness outside the hematology field by 3.2 times over the

To meet medical needs as demand for healthcare grew

past decade. Owing to this substantial growth, theseand diversified, we later applied the cell measurement

sales now account for 40.9% of net sales.

and robotics technologies we had cultivated in the field

Global development has also driven Sysmex’sof hematology. We also expanded our fields of test-

growth. Soon after our establishment, we set up rep-ing in the aim of contributing further to laboratories as

resentative offices in Europe and the United States. In

a whole. As part of our efforts to expand our portfolio

the 1990s, we entered into alliances with F. Hoffman-Lain the hemostasis and immunochemistry fields, we

Roche and Dade (now Siemens Healthineers), facili-

welcomed International Reagents Co., Ltd. (absorbed

tating our development in various countries whose

in fiscal 2022) into the Sysmex Group. This company

business customs differ from Japan’s. Later, we began

developed and produced the biological reagents usedtransitioning to a direct sales and service structure inin these fields. To reinforce our own development

Europe, North America and other regions, starting withand production capabilities, we also established a

the United Kingdom, developing our global business

11 Sysmex Report 2023

 Increased sales in non-hematology fields

 Sales in the diagnostics business outside the hematology field

3.2 times ¥166.8 billion• Expanded portfolio in hemostasis andimmunochemistry fields• Commercialized the life science business¥51.7 billion

 Overseas sales

3.3 times ¥350.6 billion• Reinforced our base in emerging markets• Responded to geopolitical risks¥105.3 billion• Supported management of medical institutions• Accelerated rollout of instrument failure
prediction and maintenance services

Fiscal 2022

 Customer satisfaction surveys (United States, all services)

9.42

Sysmex

9.16

Industry average

2012

2023

 Expanded our IVD domain Created new businesses throughopen innovation

Robotic-assisted surgery system>>P48

further. We entered China and the Asia Pacific region

providing a testing environment that offers peace ofin the 1980s, leveraging our standing as the only com-mind. For example, to prevent equipment malfunctions

pany in the IVD domain with its headquarters in Asia.

and provide a reassuring testing environment for medi-

Responding to economic situations and medical sys-

cal institutions and patients, Sysmex proposes solutions

tems in different countries and regions, we have helped

to improve productivity and quality in laboratories, andto raise the quality of healthcare throughout entire

is expanding its services and support utilizing IT. These

countries by supporting laboratory configuration, hold-efforts contribute to Sysmex’s strong brand power anding scientific seminars, and developing products that

support high customer satisfaction.

help standardize testing and make it more efficient. As

Furthermore, Sysmex is embracing increasingly

the culmination of efforts spanning many years, over thediverse healthcare needs and technological innovation

past decade overseas sales have grown 3.3 times, andthrough open innovation that leverages the expertise

now account for 85.4% of net sales.

and strengths we have cultivated to date to create
new businesses.

tomers, Sysmex emphasizes the provision of value(problem-solving) rather than just products, as well as

Sysmex Report 2023 12

Activity Report andCorporate Overview• Further expanded and promoted business domains• Launched and advanced the medical
robotics businessCorporate GovernanceSource: IMV ServiceTrak

To become the company of choice for its cus-

Mid-Term Management Planand Initiatives

Fiscal 2012

 Advanced solution proposals
 Enhanced services and support

Fiscal 2022

Sysmex’s Value Creation

Fiscal 2012

 Accelerated global development
 Expanded the direct sales and service areas

About Sysmex

Initiatives completed to date

Earnings Structure A Stable Profit Model

Ongoing sales of reagents,
service, and support

Our earnings structure is characterized by stable andongoing revenue sources and high profitability. In our
mainstay field of hematology, even after customers
purchase instruments, we generate ongoing revenue

Service and Support

by selling specialized reagents and providing service
and support.
As reagents are more profitable than instruments,
Sysmex has grown more profitable as reagent sales
Sales from one order

Reagents

have risen as a proportion of net sales. To boost this
proportion, we are expanding our share of business withlarge-scale facilities (where reagent use is high) andgrowing our portfolio of clinically significant reagents. In
the hemostasis and immunochemistry fields, new testing parameters can be added to existing instruments,
allowing us to add reagents to meet customers’ needs.
We enjoy a high level of customer satisfaction for ourservice and support using IT. In addition to new customers,

Instruments

numerous ongoing customers continue to use Sysmex
products, which contributes to our stable earnings.

Year 1 Year 2 Year 3 Year 4Year 5

 Sales of Reagents and Service and Support

As a percentage of net sales, sales of reagents and service and support
have risen

11.4 percentage points over the past 20 years.

Instruments

OthersServiceandsupport77.6%
Reagents

66.2%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
(FY)

Japanese GAAP

IFRS

Note: In the past, charges to customers based on the number of tests were included in “Others.” From fiscal 2015, amounts have been divided
and presented as “Instruments,” “Reagents,” and “Service and Support.”“Others” includes consumables.

13 Sysmex Report 2023

Stable source of profits

 Instruments
 Others
 Service and support
 Reagents

Market Position
About Sysmex

Market share

Sysmex’s Value Creation

Hematology
No. 1 market share

Hemostasis
Urinalysis
No. 1 market
share

No. 1 market
share

1,200

3,000

4,000

25,000Marketscale($ million)

Notes: The size of the circle indicates the amount of sales.
Market size reflects our own estimates based on disclosed information (as of 2022).
Calculations are based on the exchange rates during the year of the survey, so simple year-on-year comparisons of market size are not possible.
Sales in the hemostasis field include sales through our alliance with Siemens Healthineers.

 Status by Field

10th globally*

Main Alliance Partners

Roche (Switzerland)
Abbott (United States)
Danaher (United States)
Siemens Healthineers (Germany)
Thermo Fisher (United States)
Becton Dickinson (United States)
QuidelOrtho (United States)
bioMerieux (France)
Hologic (United States)

10. Sysmex (Japan)*Sysmex’ s estimates are based on information
disclosed for 2022

 Hematology

Roche, Cellavision Urinalysis

EIKEN CHEMICAL, Siemens Healthineers Hemostasis

Siemens Healthineers

Major Competitors

 Hematology

Danaher, Mindray, Siemens Healthineers, Abbott

 Urinalysis

Danaher, Siemens Healthineers Hemostasis

Welfen, Stago Immunochemistry Roche, Abbott, Siemens Healthineers, Danaher Clinical FCM

Becton Dickinson, Danaher

The IVD market, which has an estimated value of aroundwhere we have a global market share of more than 50%.

$80 billion, tends to be relatively unaffected by global

In the urinalysis and hemostasis fields, Sysmex has also

events and economic trends, and continues to growexpanded its product portfolio and increased its market

in tandem with advances in healthcare. The market ispresence by collaborating with alliance partners, achiev-

dominated by major global companies, mainly froming the No. 1 share in the global market. We are also

Europe and the United States. Sysmex is the only Asiandeveloping unique reagents to expand our business incompany to rank in the top 10. We have establishedthe immunochemistry field.

a particularly strong position in the hematology field,

Sysmex Report 2023 14

Activity Report andCorporate Overview

1.
2.
3.
4.
5.
6.
7.
8.
9.

Corporate Governance Position in the in vitro diagnostics market

Mid-Term Management Planand Initiatives

ImmunochemistrySysmex’s Value Creation
Through the creation of new technologies and innovations, by resolving
medical issues we aim to contribute to the extension of healthy lifespans ofpeople around the world, while maintaining sustainable growth.

15 Sysmex Report 2023

About Sysmex

Strategies and Plans for Realizing
Our Corporate Philosophy

Long-Term Corporate
Strategy 2033 (VA33)>>Long-Term Corporate Strategy P23>>Materiality P25>>Core Strategy P27

Mid-Term
Management Plan
(Fiscal 2023-2025)

Mid-Term Management Plan>>Overview of the Mid-Term
Management Plan P39>>Key Actions P43

Corporate GovernanceLong-Term
Corporate Strategy
2033

Corporate Philosophy

Mid-Term Management Planand Initiatives

Group
Corporate
Philosophy

Sysmex’s Value Creation

Based on the “Sysmex Way,” the corporate philosophy of the Sysmex Group, we have formulated a new long-term corporate
strategy ending in fiscal 2033. Through this, we have revised our materiality (priority issues), drafted a new vision and designed
strategies that are consistent with our materiality. We also launched a new mid-term management plan, setting in place ourmanagement plans and key actions for the next three years. Based on these strategies and plans, Sysmex aims to achievesustainable growth and increase its corporate value.

Activity Report andCorporate Overview

Sysmex Report 2023 16

Message from the Group CEO

Hisashi Ietsugu
Chairperson and Group CEO

17 Sysmex Report 2023

About Sysmex

By shaping the advancement of healthcare and continuing totransform ourselves, we will help to extend healthy lifespans andwork to improve social value and corporate value.
Shaping the Advancement of Laboratories, Medical Institutions, and Healthcare.

Sysmex’s Value Creation

In fiscal 2022, ended March 31, 2023, we made steady progress despite the effects of
COVID-19 and geopolitical risks. Operating performance was solid, with the exception ofChina, which was affected by lockdowns. These results, combined with the impact of yen depreciation, led us to achieve record-high sales and profits. As we persevered in line with our
mission, as set out in the corporate philosophy of the Sysmex Group, I believe our results reflect our ability to accurately ascertain the emerging needs of our customers around the world.

Mid-Term Management Planand Initiatives

Our mission is “Shaping the advancement of healthcare.” Healthcare is based on universal
aspirations of health and longevity, and is evolving against a backdrop of social and technological advances that continue to change.
Looking back, since the time of its founding Sysmex has advanced its value offerings andcontributed to healthcare by responding to or anticipating such changes. One might even say
we have shaped the evolution of diagnostics and laboratories by viewing products and services
as means to create value.
Against the backdrop of the introduction of universal health insurance, the medical field

Corporate Governanceexpanded substantially in Japan in the 1960s. During that period, our expansion and automationof testing parameters contributed to the standardization of diagnostic procedures. The 1980s
were a period of medical advances on a global scale. As testing operations expanded and grew
more complex, we responded by developing testing systems that contributed to productivity
and safety. As a result, laboratories transitioned into departments that perform test management. At one medical institution, the number of people involved directly with laboratory testingfell from 40 to four, allowing personnel to move to higher-value-added tasks such as providing
information to physicians. This example shows how we have collaborated with customers,

Activity Report andCorporate Overview

significantly transforming laboratory workflows to improve the quality, safety, and productivityof testing and diagnostics. Since the 2000s, we have responded to healthcare challenges
around the world and have expanded our geographic reach. For example, in emerging markets,
Sysmex has worked to spread and improve the quality of medical care by developing products
suited to local needs and holding scientific seminars. Sysmex products have been adopted as
standard instruments in China and other countries, where they have helped to establish nationwide quality standards. At the same time, we have also been taking advantage of the accelerating progress in digital technology and other factors to provide network solutions and to develop the life science field with a view toward personalized medicine.
We entered the medical robotics business in 2013 through a joint venture with Kawasaki
Heavy Industries, Ltd., as an initiative to shape advances in more areas, from laboratories tooperating rooms. In this business, we support the entire operating room, helping to improve
surgical uniformity and productivity through the use of fine and accurate robotic arms.
Through such healthcare advances, Sysmex hopes to provide value to society through theextension of healthy lifespans. To this end, we aim to realize care that is tailored to the individual, to optimize medical costs, and to eliminate disparities by improving accessibility tohealthcare. At the same time, we aim to contribute toward the realization of a circular resource
and inclusive society, which are essential to the advancement of healthcare.

Sysmex Report 2023 18

Establishing a Solid Position Through Commitment to Our Previous LongTerm Management Goals
In 2018, we formulated our long-term management goals 2025, which we aimed to achieve by
fiscal 2025. Under a long-term vision of being a “Unique & Advanced Healthcare Testing
Company,” we established positioning targets: to expand our existing domain of in vitro diagnostics (IVD), to promote personalized diagnostics, and to enhance our corporate value andclimate. As action plans, we have been promoting three-year mid-term management plans in arolling manner. Our most recent mid-term management plan (fiscal 2021 to fiscal 2023) addresses six key actions.
Looking back on our progress to date, we have positioned ourselves as a unique and advanced company in the face of difficult changes in the operating environment. Specifically, we
launched new products in the hematology field. We created new diagnostic technologies andexpanded our testing parameters in the immunochemistry field, such as a high-profile reagent
to test for Alzheimer's disease that we developed and for which we have obtained marketing
approval. In the life science field, we have seen steady progress in sales of cancer genome
profiling systems and other products. Looking at performance by region, we have strengthened our direct sales structure in India, Central and South America, the Middle East, and otherregions. This and the growth in emerging markets contributed to our performance. In China,
we were significantly affected by lockdowns and government procurement policies. However,
we have made steady progress in implementing knockdown production methods and expanding our reagent portfolio in the immunochemistry field. Taking that market’s size and future
growth potential into consideration, we will continue to prioritize China as one of our key regions and advance our business expansion efforts towards sustained growth.
In our new field, medical robotics, our robot-assisted surgery system got off to a fullfledged start. As of the end of fiscal 2022, the system had received regulatory approval andinsurance coverage for urology, gastroenterology, and gynecology applications, and a total of
35 units have been installed. Going forward, in addition to expanding business in Japan we will
prepare to develop this business overseas
Internally, we have invested aggressively in digital transformation (DX) initiatives. At thesame time, we worked to bolster engagement, advance global HR management, configure a
job-based HR system and develop systems that facilitate diverse work styles.

Creating Value with an Eye to Further Advances in Healthcare
An important challenge going forward is how to respond to a healthcare market that is evolving
faster than ever. The COVID-19 pandemic has brought to light issues with healthcare systems
in various countries and has led people to reconsider the value of medical care and testing. Thatsaid, we expect to see significant efforts to curtail social security expenses. Additionally, advancements in genetic analysis and personalized medicine, along with accelerating digitization,
have the potential to transform the healthcare landscape. Testing is becoming a data-driven
business, and depending on how we handle accumulated genomic and testing data, we may
soon enter an era where healthcare can be tailored to each individual’s needs.
Anticipating this sort of operating environment, we recently formulated the new LongTerm Corporate Strategy 2033 (VA33). This strategy, which focuses on the individual’s “healthcare journey*,” aims to expand our business domains and increase the value we provide.
Additionally, to further strengthen sustainability management, we will strive to deliver valuethat exceeds the expectations and demands of our stakeholders. By earning their recognitionand support, we will drive a powerful cycle of value creation.
On the financial front, we will continue to pursue a management strategy centered on
double-digit growth and a 20% operating margin—goals we have upheld for the past 30 years.
19 Sysmex Report 2023

The global IVD market has been growing at a single-digit rate. We aim to grow faster than themarket by focusing on our growth targets and harnessing the internal energy that arises from
About Sysmex

trial and error. We recognize that ongoing investment is essential to create new value globallyand expand our portfolio, and we believe we need an operating margin of around 20% to generate the funds necessary for such investments. By realizing this growth, we aim to reach net
sales of more than ¥1 trillion by fiscal 2033.
*Sysmex is proposing the new concept of a “healthcare journey.” We view the various healthcare-related events a
person experiences throughout their lives (life stages), along with the corresponding processes these involve(such as treatment at healthcare institutions), as a “journey.”

Sysmex’s Value Creation

Under a New Management Structure, Employees Encouraged to Evolve “with a Will”
Kaoru Asano was named the Company’s new president in April 2023. This personnel change
was resolved by the Managment Board after deliberation by the Nominating Committee,
based on a long-term succession plan. Under our new management structure, I will assume therole of Group CEO, while Mr. Asano will serve as president and drive strategic direction. In the

Mid-Term Management Planand Initiatives

past, Mr. Asano has successfully led the Company’s R&D and business development efforts. In
these roles, he has brought about numerous transformations, demonstrating his suitability tolead Sysmex’s management in the creation of new value. Mr. Asano has taken a central role informulating and developing the VA33 and mid-term management plan, which accordingly reflect the strategic vision and intentions of him and the rest of our management team.
I consistently share with employees the phrase “Where there is a will, there is a way.” Inother words, if we approach things with a strong determination, the path to our goals will gradually become clear. I want to cultivate a company where employees actively think about how

Corporate Governancethey can create value for society. Under VA33, as well, we aim for our employees to drive initiatives “with a will.”
Going forward, Sysmex will persevere in “Shaping the advancement of healthcare.” We willcontinue to stand alongside stakeholders as we work together to improve social and corporate
value. We look forward to your continued support.

Activity Report andCorporate Overview

Sysmex Report 2023 20

Story of Value Creation

Our long-term vision: Together for a better healthcare journey

Input

Business Domains(Management
Resources)
Domain Expansion
From “IVD” to “Healthcare Journey”
Diverse Human
Resources(Human Capital)

In response to the increasing diversification of healthcare needs in recent years,
we will provide value at each stage of the healthcare journey, covering not only
the conventional IVD field, but also extending our offerings to encompass
everyday life (when in good health), periods of illness, and even prognosis.
Healthcare journey >>P23

Prevention
R&D Capabilities
Intellectual Property

Medicalcheckups

Detailedfollow-ups

Treatment/
surgery

Efficacy
evaluation

Prognosis(Intellectual Capital)High
Everyday life
Production Structure(Manufactured Capital)

Illness

QOL

Outpatient treatment or
hospitalization

Low
Global Sales andService Structure(Social and
Relationship Capital)

Recovery

Growth in Existing Domains + Taking on Challenges in New Domains
New

Domain C

Stable Financial
Foundation

Domain D

Realize personalized
prevention andprognosis monitoring

Undertake challenges
in new domains, suchas medical robotics

Strengthen
the diagnostics business

Refine personalized
healthcare
and testing(Financial Capital)

MarketEnvironmental
Resources(Natural Capital)

Existing

Brand Strength(Brand Capital)

21 Sysmex Report 2023

Domain A

Existing

Domain B

Organizational abilityNewSysmex has formulated its Long-Term Corporate Strategy 2033 (VA33), which concludes infiscal2033, based on the “Sysmex Way,” the corporate philosophy for the Sysmex Group. In line with
our long-term vision, “Together for a better healthcare journey,” we will continue contributing toward
the development of healthcare and the healthy lives of people.
About Sysmex

yValue Creation Strategies/Outputs

Creating new value
for a healthy society Resolution of medical
issues through innovation
 Improvement inaccessibility to healthcare Pursuit of quality and trust Strengthening supply chain
management

 Resource circulation in
product life cycle
 Reduction in environmental
burden through businessactivities

 Increasing engagement
 Promotion of diversity,
equity & inclusion
 Development of humanresources
 Promotion of health andoccupational safety

Taking on Challenges in New Domains,
Such as Enhancing the Value of Testing,
Developing Personalized Medicine andPrevention, and Treatment

Extending HealthyLifespans of People
Around the World

Expanding the Value of Instruments,
Reagents, and Solutions
 Customer satisfaction
indicator
 Product lineup/productportfolio indicator Customer access indicator• Realization of healthcare
optimized for each individual

Eco-social
Establishing a Business Model Adapted
to a Circular Resource Society
Evolving the Value Chain in Collaboration
with Medical Institutions
 Product loss index
 Resource recycling index

Human Capital
Acquiring and Cultivating Talentfrom around the World in Line withManagement Strategies
Building a Portfolio of Human Resources
That Contributes to Advances in Healthcare Value-added productivity indicator Engagement indicator● DE&I indicator

Corporate Management
Building an Autonomous and Agile
Organizational Management System

Strengthening
governance Strengthening corporate
governance Thorough compliance Reinforcement of risk
management
 Respect for human rights

Creating a Resilient Global
Management Structure Evaluation of theManaging Board’s effectiveness Investment efficiency indicator Brand penetration indicator Financial indicators (net sales,
operating profit, ROE)

• Contribution to the optimizationof healthcare costs• Contribution to alleviating
healthcare disparities byimprovement in accessibility tohealthcare

Realizing acircular-oriented
society Response to climate change Water resource
countermeasures Contribution to biodiversity
 Establishment of a circular
resource value chain

Creating Social Value Enhancement of corporate
value through dialogue withstakeholders
 Realization of wellbeing
through improvements in
employee happiness Creation of humanresources that help resolve
social issues
 Return of value toshareholders, investors,
employees and otherstakeholders

Sysmex Report 2023 22

Activity Report andCorporate Overview

Creating an
attractive workplace

Businesses and Technologies

Corporate Governance

Reducing
environmental
impacts(Value Provided) >>P29

Mid-Term Management Planand Initiatives

Providing responsible
products, services,and solutions(Core Strategy >>P27/
Monitoring Indicators)

Sysmex’s Value Creation(Materiality) >>P25

Outcomes

Long-Term Corporate Strategy
Long-Term Corporate Strategy 2033 (VA33: Value Advance)
Long-term vision“Together for a better healthcare journey”

Key Points of Our Strategy
1) Expand our target domain from diagnostics to the healthcare journey
2) Accelerate business growth by leveraging our strengths
3) Strengthen our human capital and take on the challenge of reducing environmental impact

Value• Each and every employee is always sincerely committed to improving social value and corporate value.
• We foster innovation in testing and diagnosis, creating unique value in personalized medicine andnew therapeutic areas.

Advance• We promote advancements in healthcare, which is our mission.
• We prepare for further advances.

Healthcare Journey
Prevention

High

Medicalcheckups

Detailed Treatment/
follow-ups
surgery

Efficacy
evaluation

Prognosis

Everyday life
Healthier and longer life

QOL

Low

1

Fastertreatment

4

Illness

Recovery

Fasterrecovery3Outpatient treatment or hospitalization

2 Appropriate treatment
Background to Formulating Our Long-Term
Corporate Strategy
Sysmex develops its long-term corporate strategy
over a 10-year timeframe, based on its desired futurestate, and periodically revises the strategy in response
to external and internal environmental changes. Our
previous long-term corporate strategy, formulated in2018, positioned our long-term vision as “A Unique &Advanced Healthcare Testing Company,” and described
our aim of contributing to personalized medicine andprimary care while expanding our existing businesses.
As a result, we maintained our No. 1 market share andfurther reinforced our position in the hematology, urinalysis and hemostasis fields. We have also made steadyprogress in the immunochemistry field. Additionally, we
have laid the groundwork for new business ventures,such as the development and sale of reagents to test
for Alzheimer’s disease in the personalized medicine
field, and the world’s first system to rapidly detect
23 Sysmex Report 2023

antimicrobial susceptibility in primary care. Furthermore,
we have ventured into the medical robotics business.
As the background for formulating our long-term
strategy, we anticipate the operating environment 10
years in the future. As global society ages, we expect
to see efforts to optimize social security expendituresand decentralize healthcare functions. Against thisbackdrop, prevention and self-medication will become
increasingly important. At the same time, healthcare
disparities and the issue of accessibility to healthcare
will continue to persist. Furthermore, we anticipate
advancements in technological innovation such as gene
analysis, ultrahigh sensitive measurement, and miniaturization, which will be applied to healthcare. Demandfor personalized medicine will grow, and we expect thepractical application of new treatment methods such as
regenerative and cellular medicine and genomic medicine. Additionally, we predict the widespread adoptionof artificial intelligence (AI) and the acceleration ofdigital transformation (DX) in the healthcare sector,

Business Domain
 Innovation Streams

Domain A

Realize personalized Undertake challenges
prevention andin new domains, suchprognosis monitoring as medical robotics• Expand market share and establish overwhelming
competitive advantage• Increase testing parameters, pursue
global development<Market>• Develop new testing and diagnostic methods

Existing

Realize personalized prevention andprognosis monitoring

Refinepersonalized
healthcare andtesting

Domain C • Develop and disseminate new tests

3

1

3

• Realize new healthcare support using data

Take on challenges in new domains

Domain D

Domain B<Organizational ability>

1• Expand the medical robotics business• Expansion into regenerative and cellular
medicine, etc.

2New

Note: Based on The Lead and Disruput by Charles A. O’ Reilly, et al.

Core Strategy and Targets
Businesses and technologies
Eco-social

Corporate management

Nonfinancial
targets

Overview of Our New Long-Term
Corporate Strategy
On this basis, we formulated our Long-Term Corporate
Strategy 2033 (VA33), which looks ahead to the value we
aim to provide and the society we aim to realize, encapsulated in our long-term vision, “Together for a better
healthcare journey.” “Healthcare journey” refers to theconcept of viewing a person’s healthcare events and corresponding processes as a lifelong journey. To improvehealthcare journeys for each individual worldwide, it isessential to tailor healthcare for each individual, optimize
healthcare costs, and improve accessibility to healthcare.
In Sysmex’s target domains, in addition to traditional invitro diagnostics (IVD) performed in laboratories, we will
also consider other points along the healthcare journey,such as the prevention, pre-symptomatic, and prognosis
monitoring stages, as well as treatment.

Net sales¥1 trillion or more

Profitability

Operating margin

20% or more

Achieve zeroproduct losses

Percentage of unused
product waste

0.1% or less

Switch to environmentally Rate of use in containers andpackaging materials
conscious materials

100%

Looking at business domains, we have plotted organizational ability and the market on two axes to frame
our innovation streams, designing the figure above. Our
positioning in Domain A is to further strengthen the diagnostics business. From there, we will move into Domain B,
where we aim to acquire new technologies and move into
the life science field in such areas as realizing personalized
medicine. In Domain C, we will utilize the technologies wehave developed to date to also move into new markets
such as personalized prevention and prognosis monitoring. In Domain D, we will undertake challenges in new
domains, such as our robotic assisted surgery system, as
well as the treatment domain, including regenerative andcellular medicine. In designing this strategy, we placed
more emphasis on sustainability than ever before, andredefined our priority SDGs and materiality based on our
long-term vision. From here, we draw up our core strategy consisting of businesses and technologies, eco-social,human capital, and corporate management.
By executing these strategies, we aim to achieve
net sales of ¥1 trillion or more and operating profit
growth of at least 20%. We also intend to achieve our
non-financial targets to realize a circular resource society, thereby enhancing our corporate and social value.
>>Materiality P25, >>Core Strategy P27

Sysmex Report 2023 24

Activity Report andCorporate Overview

including the implementation and expansion of robotic
technologies. Looking at internal resources, we believe
our global business foundation, extensive technologicalexpertise, academic network, and industry collaborations will be increasingly effective in creating value inthe future.

GrowthCorporate Governance

Human capital

Financial
targets

Mid-Term Management Planand Initiatives

Existing

2

Refine personalized healthcare and testing

Domain B • Develop unique life science fields

Domain A

4

Strengthen the diagnostics businessDomain D

Strengthen
the diagnostics
business

4

Sysmex’s Value Creation

New

Domain C

About Sysmex

Main Domains on
the Healthcare JourneyMateriality (priority issues)
Sysmex’s Materiality
Materiality

Priority SDGs to Address

Initiative

Theme

 Resolution of medical issues
through innovation
 Improvement in accessibility to healthcare

Creating new value fora healthy society*2

 Pursuit of quality and trust Strengthening supply chain
management

Providing responsible products,
services, and solutions*2

 Increasing engagement*1
 Promotion of diversity, equity &inclusion*2
 Development of human resources Promotion of health andoccupational safety

Creating an attractive workplace

Climate Action

 Resource circulation in productlife cycle*2
Reductionin environmental burden
through business activities*2

Reducing environmental impacts*2(Governance) Corporate governance Compliance Risk management
 Respect for human rights*1

Strengthening governanceGood Health andWell-Being
Industry, Innovation
and Infrastructure
Responsible
Consumption and
Production
Partnerships for
the Goals
Gender Equality
Decent Work andEconomic Growth>>Status of Sustainability Targets P63*1 Newly added materiality item
*2 Item that have been reorganized, integrated and rewritten from the previous materiality items

The Process of Positioning and Identifying
Our Materiality
We identify priority issues (materiality) with the aim ofrealizing a sustainable society and achieving sustainablegrowth for Sysmex, and we periodically verify this content.
We first identified our previous materiality in 2017,
by analyzing priorities along two axes: importance tostakeholders and to Sysmex. To make progress more
visible and increase effectiveness, we set specifictargets and KPIs as non-financial targets in line with
our mid-term management plan. (In fiscal 2021, werenamed “non-financial targets” to “sustainability targets.”) We also developed action plans and activities forresponsible divisions. We reviewed this content in 2021
when formulating our mid-term management plan.
In order to formulate a new long-term vision andstrategy, we have determined that it is important to design a cohesive strategy that aligns with our long-term
corporate strategy, mid-term management plan, and materiality, taking into account factors such as the expansionof business domains and the diversification and increasing complexity of the social environment. We believe thiswill help enhance our execution capabilities and foster
active dialogues, while promoting sustainability-oriented
management. Furthermore, we anticipate that this will
25 Sysmex Report 2023

facilitate understanding both internally and externally.
Our approach to reidentifying materiality was totake our previous materiality as a starting point, andthen using a backcasting-type design. In conjunction
with our Long-Term Corporate Strategy 2033 (VA33),
we analyzed social and global environmental and industry trends up to 2033, and organized them as issues
to be addressed to realize our long-term vision, as well
as from the perspective of their impact on social andcorporate value. Sysmex identified priority SDGs to address, and based on this, identified 14 materiality items
in five areas.
Furthermore, we established the new materiality items as the basis for setting our core strategy andmonitoring indicators in our VA33. Our core strategy
was further aligned with the mid-term management
plan and sustainability targets to create a framework for
Sysmex’s vision for value creation.
The execution status and sustainability targets ofeach strategy are reported semiannually by each division at Managing Board and management meetings,
and the progress is confirmed by the members of theManaging Board.
As our strategy progresses and the environmentchanges, Sysmex will continue to provide value by regularly verifying and reviewing its materiality.

The Flow of Identifying Materiality
2023 Redesign2021 Review

STEP 1: Understand andOrganize the Issues

STEP 3: Confirm Suitability
Deliberate and approve atmanagement meetings.

to address

Identify 14 materiality
items in five fields

To design materiality, we identify priority
SDGs to address, while organizing issues torealize the long-term vision by backcasting,based on our previous materiality

Priority SDGs to Address
Creating new value fora healthy society Support for poverty eradication
 Ensuring of sustainable foodproduction systems
 Ensuring access to safe and affordable
housing, drinking water, and adequate
sewage and sanitation facilities Pursuit of quality and trust Strengthening supply chain management

 Resolution of medical issues
through innovation
 Improvement in accessibility to healthcare(Global health, universal health coverage(UHC))

Improving access to energy,
eradicating inequality

Creating an attractive workplace

Reducing environmental impacts

 Increasing engagement
 Promotion of diversity, equity & inclusion
 Development of human resources Promotion of health and occupational safety

 Resource circulation in product life cycle
 Reduction in environmental burden
through business activities

 Improvements in energy efficiency
 Elimination of discrimination
 Reduction of disparities

Providing equal educations andprotecting ecosystems
and resources Provision of equitable, quality
learning opportunities
 Preservation of sustainable nature

Promoting a peaceful andjust society Compliance with regulations
 Ensuring of sound and transparent
political relationships
 Eradication of corruption and bribery

Impact on corporate value

Sysmex Report 2023 26

Activity Report andCorporate Overview

Providing responsible products,
services, and solutions

Corporate GovernanceImpact on society

Eradicating poverty and hunger,
protecting vulnerable groups

Mid-Term Management Planand Initiatives(GRI, SASB, SDGs,
sustainability index
assessments)

Identify priority SDGs

Sysmex’s Value Creation

Evaluate medium- tolong-term risks andopportunities from theperspectives of stakeholders
and Sysmex, and orderthese according to priority.

Partially revised
based onenvironmental
analysis inconjunction withthe development of
the mid-term
management plan.

Long-term vision

STEP 2: Prioritize

Analyze the external environment

Analyze the current status

Elicit global social issues
and requests fromstakeholders.

About Sysmex

2017 Identify

Core Strategy
Businesses and Technologies
We have set policies for innovation streams in each of our four domains.

Monitoring Indicators*1

Strengthening Our Diagnostics Business Domain A

Customer satisfaction indicators
 NPS®*2 (Net Promoter Score) VOC (Voice of Customer) items
collected
 Queries to the customer service
centerWe position this domain as the driver of our earnings growth. By leveraging
our global business foundation and technology assets, we aim to increase
the performance of existing tests and expand those that offer new
diagnostic indicators, thereby increasing the value of testing. By field, we aim
to maintain our No. 1 share of the global market in hematology as we expand
our potential markets and increase our competitive advantage. In the
immunochemistry field, we will enhance our global presence by enlarging
our unique reagent portfolio. In the hemostasis field, we will take advantage
of alliances and our own solutions to promote global development. In
addition, we will work to increase the number of diseases we target, andprovide diagnostic value across fields of testing. In rolling out these initiatives,
we will focus on developing products and unique testing parameters thatmeet the healthcare needs of emerging markets and other countries andregions. In addition, we will work to provide new value by organizing andanalyzing databases containing testing and diagnostic data.

Refine Personalized Healthcare and Testing Domain B
We aim to provide new diagnostic value for diseases such as cancer andAlzheimer's disease that have become significant social issues. In addition to
the practical application of liquid biopsy technology to measure cells, proteinsand genes, we will enhance our gene testing portfolio and develop diagnostic
solutions that utilize genetic information. We plan to refine personalized
medicine and testing through the integration of new and existing technologies.

Realize Personalized Prevention and Prognosis Monitoring Domain C
In this domain, we will focus on developing primary care products that
expand the locations and subjects for testing, in response to thedecentralization of healthcare and the increasing demand for
self-medication. We will also work on new tests targeting thepresymptomatic and preventive domains, as well as accumulating andanalyzing individual time-series testing data to develop programs forrecurrence detection and predictive testing.

Undertake Challenges in New Domains,
Domain D
such as Medical Robotics
We will continue to explore new areas, including the surgical domain,
where we aim to provide surgical solutions based on our medical robotics
business. We will also pursue opportunities in the areas of regenerative andcellular medicine, where we will make full use of the quality control androbotics technologies cultivated through our IVD business.

Product lineup/product portfolio
indicators
 Number of patents/number of newpatents
 Number of conference presentations
and papers published, number ofjoint research projects with academia
Diagnostics business: Market share in each field Number of unique testing
parameters developed Net sales, operating profit,
operating margin
Personalized medicine, prevention,
prognosis:
 Number of primary care products
deployed Number of cancer genomes analyzed
New businesses:
 Number of medical departments
using the robotic-assisted surgery
system, deployment area, numberof surgeries performed
 Number of regenerative medicines
approved
 Net sales, operating profit,
operating margin
Indicators of access to healthcare
 Number of hematology tests
 Number of countries where deployed Number of direct sales locations
 Net sales in emerging anddeveloping markets, percentagesof net sales*1 These indicators set in the Long-Term
Corporate Strategy are to be monitored froma long-term perspective. They will be revised
as necessary in line with changes in theenvironment and progress of the strategy.
*2 NPS® is a registered trademark of
Bain&Company, Fred Reichheld andSatmetrixSystems

27 Sysmex Report 2023

Eco-social
Monitoring Indicators*1
Product loss indicator Achieve zero product losses

Human Capital
Monitoring Indicators*1
Human productivity indicators
 Value-added productivity
 Investment in human capital Engagement score
 Turnover ratio Female managers ratio
 Percentage of employees withdisabilities

Activity Report andCorporate Overview

Corporate Management
To foster innovation and promote our strategies, we will establish an
autonomous and agile organizational management structure. This includes
optimizing the Group’s organizational design, functional placement,
authority system, and decision-making processes. We will also strengthen
our external resource utilization framework through alliances and open
innovation initiatives.
We will leverage digital technology to strengthen our managementfoundation and improve management quality. Furthermore, we will strive
to enhance Group governance and centralize functions, improve
management control and operations efficiency, and reinforce our risk
management framework.
To maintain our position as an innovative and attractive company, we
will continue to enhance our brand strength through transparent andhigh-quality bilateral communication with stakeholders.

Corporate GovernancePeople are the most important sort of capital for enhancing corporate
value. Recognizing this fact, we invest proactively in the hiring,development, and allocation of human resources to cultivate individuals
capable of realizing the evolution of healthcare. Specifically, we focus on
hiring and developing highly skilled professionals to build an optimal talent
portfolio. Additionally, we create a workplace environment that respects
the individuality of diverse human resources and provides opportunities toimprove individuals’ well-being, ensuring that each employee enjoys highlevels of job satisfaction and engagement. Furthermore, we dedicate
ourselves to fostering a strong leadership pipeline that drives the evolutionof corporate culture and leads both existing and new businesses across theGroup, facilitating outstanding teamwork. To support these initiatives, wehave established a global human capital database that is effectively
monitored through the use of DX technology. >>Human Capital Strategy P53

Mid-Term Management Planand Initiatives

Important sustainability targets otherthan those stated above
 Reduction of GHG emissions
 Rate of reduction in water consumption
 CSR survey response rate

Sysmex’s Value Creation

Resource recycling indicator Complete switch to recycled orenvironmentally conscious materials
 Reduction of packaging andlabeling materials
 Renewable energy ratio

About Sysmex

As a member of the international community, we will build a businessmodel that balances the resolution of environmental and social issues
with business expansion by implementing value chain reforms alignedwith a circular resource society. In addition to achieving carbon neutrality
and conserving water resources in our business activities, we willtransition our entire value chain to a resource circulation-based model.
We will expand environmentally conscious design in instruments andreagents, adopt animal-free and environmentally friendly materials, andaccelerate the substitution of these materials. We will also establish
mechanisms for reuse and recycling, and strive for zero disposal of unused
in-house products.
Furthermore, by utilizing our technical assets we will explore new
solutions that improve cost-effectiveness and improve access tohealthcare. We will also accelerate collaboration with external partners insustainability activities, aiming to earn society’s trust.

Monitoring Indicators*1
Effectiveness evaluations
 Evaluations of the Managing
Board’s effectiveness
Brand penetration indicator Awareness surveys
Financial indicators
 Net sales (growth rate) Profitability (operating profit, margin) Capital efficiency (ROE)

Sysmex Report 2023 28

Provision of Long-Term Value
1

Extending HealthyLifespans of People
Around the World Realization of healthcare optimized for each individual Contribution to the optimization of healthcare costs
 Contribution to alleviating healthcare disparities byimprovement in accessibility to healthcare
Optimization of healthcare costs (medical economy, etc.)

Value provided(Impact measurement
indicators)

Healthcare needs
to emphasize★: Degree of need over the next five years

Improvement inaccessibility to healthcare(Screening rates, number of tests,
severity rates, medical information
coordination networks, etc.)(Days in hospital, length of
hospital visits, patient cost,
number of treatments, etc.)• Early detection andprevention of disease• Portable health care dataand its use• Statistical approach to
pandemics• Expansion of personalized
diagnosis (choice oftherapeutic agents)• Improved quality andproductivity of laboratories• Reduction of patient burden(non-invasive, minimally invasive)

Developed countries: ★★★
Emerging markets: ★★★

Developed countries: ★★★
Emerging markets: ★★

Medical checkups

Prevention

Healthcare journey

Healthcare optimization

Detailed follow-ups

Everyday life

Healthier and lon

Illness
Fastertreatment

Outpatient treatment oAppropriate trea

2

Realizing a circular-oriented society Response to climate change, water resource
countermeasures, contribution to biodiversity• Direct reduction of environmental impact through own business activities• Industry collaboration and dissemination of advanced practices
throughout the supply chain

 Establishment of a circular resource value chain• Generalization of environmentally friendly materials and designs• Progress toward zero resource disposal

29 Sysmex Report 2023

Sysmex aims to help extend the healthy
lifespans of people around the world byneeds of patients and medical institutions, in order to realize a better healthcare journey.

Extension of healthy lifespans (health-adjusted life expectancy)

About Sysmex

quickly identifying and responding to theSysmex is dedicated to the development and practical application of tests
that enable the selection of optimal drugs(Early detection rate,
recurrence rate, remissionrate, etc.)

to treat patients and reduce their burden.

• Expansion of personalized
medicine (regenerative andcellular medicine)• Innovation in the surgicalfield (robot-assisted surgery,remote surgery)• Risk diagnosis, recurrence
prevention• Home nursing/caregiving,
medical care, and nursing
care enhancement andcoordination• Prognosis monitoring

monitoring. Through the advancement

Developed countries: ★★★
Emerging markets: ★★

and developing markets, we help reduce

Additionally, we are moving forward withthe development of products that help
improve quality of life through disease
prevention, early detection, and prognosis

Developed countries: ★★★
Emerging markets: ★

Efficacy evaluation

Prognosis

to realize healthcare tailored to the individual, as well as early treatment and the
optimization of healthcare costs throughappropriate medication. In emerging
healthcare disparities by delivering optimal products and services and providing
scientific information to improve accessibility to healthcare.
In addition to working toward therealization of a circular-oriented societythat supports sustainable growth for bothsociety and Sysmex, we are committed to

Corporate Governance

Treatment/surgery

and optimization of healthcare, we aim

Mid-Term Management Planand Initiatives

Increased quality of life

(Clinical evaluation indicators,
number of papers, number offacilities with medical robots,
etc.)

Sysmex’s Value Creation

Advancement of healthcare

creating social value by returning to ournger life

various stakeholders. These efforts form
the foundation of our corporate activities
as a member of the international community, and generate value as we work
towards our goal of extending the healthyor hospitalization

lifespans of people around the world.
By continuing to create additional value,atmentSysmex is helping to resolve social issues,
thus contributing to a sustainable society.

3

Creating Social Value Enhancement of corporate value through dialogue
with stakeholders•Creation of innovation in the healthcare industry

 Realization of wellbeing through improvements in
employee happiness• Realization of a work-life balance for employees, self-fulfillment

 Creation of human resources that help resolve
social issues• Stimulation of the labor market with attractive human resources

 Return of value to shareholders, investors,
employees and other stakeholders
Sysmex Report 2023 30

Activity Report andCorporate Overview

FasterRecovery recovery

Worksite Commentary
Here we introduce Sysmex employees’ efforts to offer a better
healthcare journey to people around the world.
Efforts to Improve the Quality of Medical Care in Central America,
Caribbean, and the Andean Region

Nancy Zamora Bello
Senior Distributors Manager
Latin America(Commercial/Sales)
Sysmex Colombia SAS

Prevention

In my territory of responsibility, which includes Central America, the Caribbean andsome countries of the Andean region, budget shortages mean that many hospitals cannot afford automatic instruments, so medical technologists perform tests manually. Thiscan result in inconsistent test results and make testing time-consuming, leading to delays in diagnosis and treatment, while diseases grow increasingly severe.
Sysmex’s automated testing systems provide standardized and reliable test results
quickly. This contributes to better-quality medical care through earlier diagnosis andtreatment, reduced treatment costs, and shorter hospital stays, as well as reducing theburden on patients.
However, in order to secure budgets and introduce testing systems in thesecountries, it is important to reach out not only to the heads of the facilities but also to
the governments of the countries in which they operate. We network with leading experts in hematology, urinalysis and infectious diseases and actively educate the public
about the benefits of standardizing testing through the introduction of state-of-theart automated systems. Through these activities, we are working to raise the level ofhealthcare infrastructure, including the introduction of Guatemala’s first fully automatedurinalysis system.
I will continue working to improve the health and quality of life of people in Central
Caribbean and the Andean region.

Medical checkups

Detailed follow-ups

Developing the World’s First Rapid Antimicrobial Susceptibility
Testing System for AMR

Lovisa Söderberg
Lead researcher
Research and Development
Sysmex Astrego AB

31 Sysmex Report 2023

Modern treatment of infectious diseases is based on the use of antibiotics. However,if the appropriate drugs are not administered, they may not be effective in the bodyand drug-resistant bacteria may proliferate, leading to severe illness or even death.
Development of new antibiotics is much slower than the spread of antimicrobial resistance (AMR). It is already becoming a real problem in many countries and regions where
treatment options have become limited, and it is only predicted to become worse. To
manage the spread of AMR we need to be able to limit the use of antibiotics and only
prescribe it when it is required and effective. The use of a rapid test for AMR is a significant step in the right direction.
At the beginning of development, there were various issues and obstacles that we
had to overcome to systematize the technology and develop it for marketing.
In order to be used in the medical field, it is necessary to provide accurate test results, and we have made a number of improvements toward commercialization, including the realization of quality standards, to create an even easier-to-use test system.
From an early development phase, market feedback provided a great driving force
for our development. It confirmed that we are on the right track and that the technology can help to make a difference in the fight against AMR.
In June 2023, we began marketing a rapid antimicrobial susceptibility testing system
for urinary tract infections using our proprietary technology. Now that we have successfully launched the product, I cannot wait to see that outreach and the effects it can haveon the way we treat bacterial infections in the future.

Efficacy evaluation

PrognosisJoão Nunes
Research Executive
R&D Center Asia Pacific

AI technology has enabled rapid digital transformation. In the healthcare field, it has
the potential to enhance physicians’ diagnostics capabilities leading to significant
contributions to patients’ health treatment. AI solutions have gathered high expectations in turning large amounts of data into actionable clinical applications, such as early
disease identification, enhanced health management, as well as more cost-effective
medical workflows.
Currently, I am working on healthcare AI development at a new R&D Center in the
AP region which has been newly established as of April 2022. There are unmet market
needs that can be addressed with the development of new services that leverage cloudinfrastructure and big data. However, more knowledge needs to be acquired in order toinnovate while ensuring regulatory and data compliance within an ever-changing newenvironment. In this context, it has been very meaningful for me to receive feedback
from both key opinion leaders in the AP region, as well as long-term customers regarding Sysmex’s ongoing joint development regional efforts. These activities have alsoenabled me to acquire a variety of specialized knowledge.
Going forward, I hope to foster collaborations throughout the entire Group withthe aim of developing models focused on personalized medicine that utilize longitudinal data. This will enable us to advance current treatments, namely, the identificationof optimal therapeutic medical interventions for each individual patient. Healthcare is avery conservative field, but even so we will contribute to society by taking advantage ofthe great digital transformation that is taking place around the world.
Sysmex Report 2023 32

Activity Report andCorporate Overview

Initiatives for Using AI Technologies in the Healthcare Field

Corporate Governance

Treatment/surgery

Mid-Term Management Planand Initiatives

Manager,
MR (Medical Robotics) Division

Sysmex’s Value Creation

Yuki Hata

In 2020, we launched our made-in-Japan robotic-assisted surgery system. In addition toproviding precise and delicate surgical assistance, this system was designed to contribute to the overall efficiency of the operating room and the advancement of medical care.
When deploying our system, we prioritize communication with physicians and hospital staff to ensure that surgical support robots can be used in line with the healthcare
needs of the target region. Our commitment goes beyond merely installing a system; it
extends to the operation of the system from a medium- to long-term perspective andenvisions the cooperative future of healthcare. This approach will aid in establishing abetter healthcare delivery system.
Sysmex aims to facilitate a wide range of solutions by applying to the surgical field
the knowledge and expertise it has accumulated in the areas of testing and diagnostics.
For example, Sysmex can offer support in preoperative testing, intraoperative testingfor determining whether tumors are benign or malignant, and postoperative testing tomonitor progress. This reduces the burden on medical institutions and also provides
peace of mind to patients.
Our robotic assisted surgery system also offers great potential for realizing essential developments in remote medical care. By connecting robotic assisted surgery systems at distant hospitals through a network, doctors can perform surgeries even when
physically distant from the patient. This reduces the constraints of time and location,
and allows high-quality, appropriate medical care to be provided in an efficient manner.
Surgery is a new business domain for Sysmex and we will strive to provide new value inthe same way as we have in the IVD field.

About Sysmex

Taking on Challenges in the Surgical Field with a Focus on Robotic
Assisted Surgery Systems

Mid-Term Management
Plan and Initiatives
In response to the newly formulated Long-Term Corporate Strategy,
we have created a new Group mid-term management plan for thethree years from fiscal 2023
(Announced in May 2023)

33 Sysmex Report 2023

Management Plans to Date

2018

2019

2020

2021

2022 (Fiscal year)

Theme• Returning to a growth trajectory

Themes• Enhancing our competitive
advantage and expanding ourbusiness portfolio• Reforming the Group’s humanresource management
Results• Launched new products(hematology: high-end, low-end,
and tests related to COVID-19)• Sold robotic assisted surgery system• Introduced job-based HR
management

Themes• Sustaining the expansion of ourcorporate scale and developing
new businesses• Improving sustainability management
and further promoting DX
Results• Launched new products(immunochemistry: expanded
reagent parameters such as fortesting for Alzheimer’s disease, etc.)• Reinforced our business in emerging
markets, such as Brazil and Saudi Arabia• Declared our intention to achievecarbon neutrality• Transitioned to global core systems
Issues• Increased competitiveness andmarket expansion in the
diagnostics business• Acceleration of business growth in
new domains• Promotion of sustainability
management and human capitalmanagement

Results• Launched new products(hemostasis, life science, genepanel testing, etc.)• Expanded our direct sales area
(Egypt, India)• Established a bio-reagent center

Issues• Optimization of product life cycles• Developing of professional humanresources from a medium- tolong-term perspective• Reforming our business processes
through DX

Issues• Business structure reform(increase sales ratios of
non-hematology fields)• Further growth in emerging
markets• Identification and practice ofmateriality

 Key Financial Results
 Net sales
 Operating profit
Operating margin

363.7

281.9
252.6
24.0

60.7

2015

293.5

301.9

410.5 (Billions of yen)

305.0

249.8
20.7

51.7
2016

21.0

59.0

2017

20.9

61.2

2018

18.3

16.4

55.2

50.0

2019

2020

18.5

67.4

2021

17.9 (%)
73.6

2022 (Fiscal year)

Sysmex Report 2023 34

Activity Report andCorporate Overview

Mid-Term Management Plan
(2021–2023)

Corporate Governance

Mid-Term Management Plan
(2019–2021)

Mid-Term Management Planand Initiatives

Mid-Term Management Plan
(2017–2019)

Sysmex’s Value Creation

2017

About Sysmex

Sysmex has continued to expand under its previous long-term corporate strategy. In fiscal 2016, revenue increased in all
regions, but the impact of yen appreciation meant that we were unable to fully achieve the levels of revenue increases we hadsustained up to that point. Accordingly, the mid-term management plan that commenced in fiscal 2017 strongly emphasized
the theme of returning to a growth trajectory. After that point, we worked to launch new products aimed at ensuring futurecompetitiveness, strengthened our foundation in emerging markets, and launched a new business centered on
robotic-assisted surgery systems. In preparation for a new stage, Sysmex has also recognized the importance of SDGs andother sustainability targets, and has focused on promoting sustainability management and DX. We have adopted the practiceof a rolling three-year mid-term management plan, which we review every two years. We do this to ensure that the plan isprecise and achieves its goals in light of changes in the external environment and our own circumstances.

Message from the President

Kaoru Asano
President

35 Sysmex Report 2023

About Sysmex

Under our long-term vision, “Together for a better healthcare
journey,” we will achieve further growth by evolving our businessmodel and expanding our business domains.
Formulating Long-Term Corporate Strategy 2033 (VA33) Based on Our Outlook of

Sysmex’s Value Creation

the Operating Environment a Decade from Now
I was appointed to the post of president in a milestone year, just as we are announcing a new LongTerm Corporate Strategy.
Sysmex has established a solid position by contributing to the global resolution of medical issues
through its diagnostics business. Contributing to healthcare worldwide is not just Sysmex’s purpose—
it is also our social responsibility. To uphold this purpose, we need to achieve sustainable growth. I

Mid-Term Management Planand Initiatives

believe it is my mission to dedicate myself fully to steering our creation of value and continuing toinstill confidence among stakeholders.
Fiscal 2023 marks the launch of our Long-Term Corporate Strategy 2033 (VA33), which charts
our path to value creation over the next decade. VA33 is based on our mission of “Shaping the advancement of healthcare” as described in the Sysmex Way, the corporate philosophy for the Sysmex
Group. To develop this strategy, we took a point 10 years hence as our starting point. We have focused specifically on the further advancement of personalized medicine, driven by technological innovations such as genomic analysis, in order to extend healthy lifespans and optimize medical costs.

Corporate Governance

Drug selection is becoming more sophisticated, and there is a growing demand for comprehensive
follow-up and treatment from the very earliest stages. It is important to pay attention to each individual's needs and to take a holistic view of the entire healthcare process. In this era, we believe that
expanding the scope and targets of value provision is essential in order to contribute to the health ofpeople worldwide.
Sysmex advocates the concept of a “healthcare journey.” Going beyond the patient journey,
which focuses on the flow of diagnosis and treatment, the healthcare journey encompasses the various healthcare events throughout a person’s life. Sysmex aims to improve each individual's healthcare

Activity Report andCorporate Overview

journey, but we cannot achieve this goal alone; it requires collaboration with various companies andorganizations involved in healthcare, including medical institutions. This idea formed the impetus for
our long-term vision, “Together for a better healthcare journey.”

Organizing the Evolutionary Path of Our Value Creation
Embracing B-to-B-to-C in the Scope of Our Business Model
To enhance value creation at each phase of the healthcare journey, Sysmex must undergo its own
transformation and evolution. Whereas our traditional testing business was a B-to-B model, now weneed to embrace the scope of B-to-B-to-C business, which also focuses on the end-consumers at
the center of the healthcare journey.
For business domains, we have adopted the idea of innovation streams and arranged our evolutionary path along two axes: organizational ability and markets. >>Long-Term Corporate Strategy P23
First, we will focus on strengthening our existing diagnostics business. We will direct around 70% of ourinvestment into this business, which is also our primary source of capital (Domain A). We enjoy a highshare of the market in the diagnostics business, but ample potential for growth remains. In the hematology and urinalysis fields, we see substantial room for growth in India and other emerging markets, where
we aim to expand our business. In the hemostasis field, where needs are becoming more diverse, wewill offer advanced solutions and conduct global rollouts. Expanding reagents and sales regions is a priority issue for us in the immunochemistry field, where the market is large and expected to grow.
Sysmex Report 2023 36

Through advances in our organizational ability and the market, we will foster the life science field,
which focuses on genomic testing technology, and broaden its diagnostic value in the areas of personalized prevention and prognosis monitoring (Domains B and C). In new businesses, we commenced full-scale development of medical robotics in fiscal 2021. In addition, we will develop andnurture business centering on treatment domains such as regenerative and cellular medicine, basedon open innovation and collaboration with other companies (Domain D).

Integrating Our Growth and Sustainability Strategies
On the Financial Front, Targeting Net Sales of More than ¥1 Trillion and Operating
Profit Above 20%
VA33 is characterized by a design approach that started with the formulation of a vision, and thenused backcasting to create our materiality, core strategy, and KPIs. This allowed for a consistent story
and a simple structure, making it easier to align with our targets and key actions in our mid-term management plans. We expect VA33 to enhance understanding among external stakeholders, as well as
employees, and to foster more active dialogues.
In core strategies, we have incorporated the concepts of eco-social and human capital, integrating our growth strategy and sustainability strategy. For example, in addressing environmental concerns, we will focus not just on climate change and water resource management, which are importantsocial demands, but also strive to realize a “circular resource society,” which the entire healthcare
industry should prioritize. This approach means transforming Sysmex’s entire value chain. In terms ofhuman capital, recognizing that people are our greatest asset, we will build an optimal human resources portfolio to drive value creation, by accelerating our diversity, equity, and inclusion (DE&I)
efforts. We will prioritize the promotion of female employees and emphasize the importance of personnel with diverse values and backgrounds, allowing each individual to demonstrate their abilities in acollaborative environment.
On this basis, VA33 establishes quantitative targets on both financial and non-financial fronts. Our
growth-oriented financial target for fiscal 2033 is net sales of more than ¥1 trillion yen, and our profitability target is an operating margin of more than 20%. Thus we aim to sustain the Company’s growth
momentum by continuing to adhere to Sysmex’s record of achieving double-digit growth and a 20%
operating margin. On the non-financial front, to achieve zero product losses we are targeting 0.1% orless as our percentage of waste that is unused in products. We will switch to recycled and environmentally conscious materials, aiming to achieve a 100% rate of use in containers and packaging materials. As well as capital efficiency indicators, we will continue to monitor indicators related to humancapital and corporate management, such as employee engagement and customer satisfaction. We
plan to organize the framework for these indicators during fiscal 2023.

New Mid-Term Management Plan Covering a Critical Period of Change
Steadily Implementing Six Key Actions
Our first three-year action plan on the path to realizing VA22 is the mid-term management plan forfiscal 2023 to fiscal 2025. This marks an important phase in Sysmex’s evolution—a period we will lookback on in 10 years as our “point of transition to a new stage.”
Under the mid-term management plan, we have established four key actions that align with ourdirections of evolution (Domains A to D), as I explained earlier, as well as key actions for eco-social,human capital, and corporate management.
During the period of this mid-term management plan, our main source of earnings will continue tobe our diagnostics business. We expect to achieve strong sales growth through initiatives such as theglobal rollout of new products in the hematology field, expansion of our reagent portfolio in the immunochemistry field, and the extension of business leveraging our global OEM agreement with Siemensin the hemostasis field. Additionally, we plan to strengthen our sales system in emerging markets, such

37 Sysmex Report 2023

as India, to further support robust growth. Furthermore, Sysmex will continue to leverage genome
analysis and liquid biopsy technologies and accelerate the launch of personalized prevention andprognosis monitoring services. In the medical robotics business, we will focus on obtaining regulatory
About Sysmex

approvals and entering markets overseas.
To expand these business domains, we need to respond flexibly to change and be flexible in making course corrections. We will strive to enhance our risk management and investment management
capabilities. In M&A, investments, and partnerships, we will increase the precision of our goal setting
and revenue-recovery plans, and monitor these plans rigorously.
For fiscal 2025, the final year of our mid-term management plan, we are targeting net sales of

Sysmex’s Value Creation¥560.0 billion, up 36% from the fiscal 2022 level; an operating profit of ¥112.0 billion, up 52%, ROE of
16%, and free cash flow of ¥46.0 billion. In terms of profitability, we will leverage the investments wehave made in digitalization to improve productivity by revamping business processes and utilizing
data. A new system will become operational in fiscal 2023, enhancing productivity. We will further
boost profitability through global growth in each field in our diagnostics business by expanding testing
parameters, particularly in the immunochemistry field.
Furthermore, we have set 14 sustainability targets to align with the materiality items we have

Mid-Term Management Planand Initiatives

recently re-established. We will follow a PDCA cycle while verifying progress toward these targets.

Working to Become a Company Whose Employees Realize the Significance of Its
Business and the Value It Provides, and One That Can Grow Autonomously, Thereby
Enhancing Corporate ValueI believe the growth of a company and the growth of its people are correlated and synonymous. To
produce a large number of self-driven employees, we prioritize investment in training and talent de-Corporate Governancevelopment. At the same time, we actively collaborate with external partners to create opportunities
and environments that foster interaction among people of different values and capabilities.
A crucial factor in achieving such growth is the engagement between a company and its employees,
as well as their sense of purpose and fulfillment in their work. Speaking from my own experience in research and development and my involvement in new fields and businesses, one moment that stands out
is the first surgery conducted using the robot-assisted surgery system in 2020. We were observing froma monitoring room next to the operating room. As we watched the surgery unfold on the screen, I was
moved to tears when the surgery ended successfully and the doctors shook hands. That sight will be

Activity Report andCorporate Overview

etched in my memory forever. Going beyond surgical procedures, Sysmex’s work is directly related to thehealth and lives of people, so we have many opportunities to feel a sense of fulfillment. I hope that eachand every employee will contribute to us becoming a company that focuses on providing value to society
and consumers. Such a company will naturally evolve and improve its corporate value and performance.
In its quest to create further value, Sysmex will continue to proudly embrace new challenges.

Sysmex Report 2023 38

Overview of the Mid-Term Management Plan
Background to Formulation of the Mid-Term Management Plan

Long-Term Corporate Strategy 2033 (VA33)
 Achieving a better healthcare journey Practicing sustainability management(coexistence with the environment and society)
Recognition of the Environment
 Increasingly sophisticated medicine(expansion of personalized medicine
through genetic testing, etc.)
 Decentralization of medical functions
 Accelerating digitalization
 Manifestation of geopolitical risks
 Shift toward a recycling-oriented
society

Issues under the Previous Mid-Term
Management Plan Expansion of product portfolio toenhance competitiveness Promotion of strategies focused on
emerging markets
 Early commercialization of new
business domains
 Development of a more viable
management structure Further promotion of environmental
preservation

Mid-Term Management Plan (Fiscal 2023–2025)
We are positioning this plan as an important starting point for the realization of ourlong-term vision. We will implement a transformation scenario to achieve growththrough innovation and strengthening our corporate foundation.

Positioning of Materiality, Core Strategy, and Group Key Actions
Materiality >>P25

Core Strategy of the Long-Term
Corporate Strategy >>P27

Creating new value for a healthy society
Responsible provision of products,
services and solutions

Businesses and Technologies

Realization of an attractive workplace

Reduction in environmental burden

Eco-social
Human CapitalStrengthening of GovernanceCorporate Management

39 Sysmex Report 2023

3 Create a new business model in the domains of prevention and self-medication

P44

4 Accelerate business growth in the therapeutic domain, centered on the medical robotics business
P48
5 Realize a circular resource value chain and transform with a view to solving social issues
6 Enhance corporate value by strengthening human capital and management base

P51

P53

Sysmex Report 2023 40

Activity Report andCorporate Overview

2 Accelerate commercialization centered on genetic testing in the domain of personalized medicine
P44

Corporate Governance

1 Enhance competitiveness and expand markets through innovation in diagnostics business domain
P43

Mid-Term Management Planand Initiatives

Group Key Actions (GKA) under the Mid-Term Management Plan

Sysmex’s Value Creation

In light of the technological innovations that are
getting underway in the medical field, GKA 3 calls for
Sysmex to contribute in new areas, taking into account the decentralization of medical functions andthe increasing awareness of personal disease-prevention measures.
Through synergies from initiatives under GKA 2
and GKA 3, as well as by leveraging Sysmex’s strengthin IVD, we aim to contribute toward the resolution of
medical issues, such as the optimization of medical
expenses, non-invasive and minimally invasive testing,and shorter testing times. We also strive to create new
businesses to realize our long-term vision.
GKA 4 outlines initiatives through which Sysmex willtake on challenges in new medical domains. In 2020, welaunched the first made-in-Japan robotic assisted surgery system. During the period of our current mid-term
management plan, we will work to enter markets in the
Asia Pacific region, as well as Europe and the Americas.
We have established two GKAs describing humancapital, corporate management, and an all-encompassing eco-social perspective.
Through GKA 5, we aim to create a circular resource value chain and resolve social issues by implementing centralized management of that chain utilizing
IT. We will also strive to achieve zero product losses.
Under GKA 6, we aim to become a sustainable
company by optimizing our talent portfolio and redoubling our efforts in diversity, equity, and inclusion (DE&I)
through flexible work practices. By respecting diversity
and leveraging talent with different backgrounds, we will
promote innovation.

About Sysmex

This mid-term management plan covers the first
three years toward the realization of our Long-Term
Corporate Strategy 2033 (VA33). We are positioning
this period as an important turning point toward a newstage of Sysmex’s evolution. In formulating the plan, we
examined changes in the social environment and issues
that existed under the previous mid-term management
plan, in order to realize a better healthcare journey andpractice sustainability management as stated in our
long-term vision. On this basis, we have established sixGroup Key Actions (GKA) based on our core strategy.
The GKA defines four actions from the perspective of
business and technology, with GKA 1 forming the pillar for
profitability and growth. In our existing diagnostics business, the market is growing at around 4% annually, suggesting significant room for further growth. By expanding
our reagent portfolio, particularly in the mainstay hematology field, as well as in immunochemistry, and enlarging our direct sales and service area in the hemostasis
field, we aim to grow faster than the market. Focusing
on emerging markets such as India will further support
growth and contribute to improving access to healthcare.
GKA 2 calls for us to grow and develop our existing
businesses, while also seeking to expand into new areas.
Notably, Sysmex has been involved in the life sciencefield since fiscal 2000. Recently, the field has seen significant advances in personalized medicine, such as genetic testing being covered by health insurance. Sysmex
will seize the opportunities presented by such changes
in the operating environment to establish businesses
that will drive the next generation of healthcare. These
include the expansion and utilization of gene panel testing, liquid biopsy technology, and other advances.

Mid-Term Management Plan Targets
Main Financial and Non-Financial Targets
Fiscal 2022 (Actual)

Fiscal 2025 (Target)

Fiscal 2033 (Target)¥410.5 billion¥560.0 billion¥1 trillion or more

¥73.6 billion¥112.0 billion

Operating margin

17.9%

20.0%

ROE

12.4%

16.0%

¥17.0 billion¥46.0 billion

Product losses (percentage of unused product waste*1)

—

0.18%

0.1% or less

Switch to environmentally conscious materials(rate of use in containers and packaging materials)

—

60%

100%

Net sales
Operating profit

Cash flow

20% or more

*1 Cost of unused Sysmex products discarded as waste/net sales¥560 billion yen (CAGR*2+10.9%)

 Net sales
 Operating profit
Operating margin

460.0
410.5

363.7
18.5

20.0(%)

18.0

17.9

112.0 (CAGR*2+15.0%)
83.0

73.6

67.4

2021

2022

2025 (Fiscal year)(Target)2023(Forecast)

Sales Targets by Business and Field

Sales Target by Destination(Billions of yen)

Fiscal 2022 Fiscal 2025
(Actual)(Target)CAGR*2
(%)

59.8

90.0

14.6

Americas

105.9

140.0

9.7

8.1

EMEA

111.3

140.0

7.9

11.6

China

96.9

130.0

10.3

19.3

Asia Pacific

36.4

60.0

18.0

5.0

13.4

19.9

31.0

15.9

Actual exchange rates in fiscal 2022: USD1 = JPY135.5, EUR1 = JPY141.0, CNY1 = JPY19.8
Forecast exchange rates for fiscal 2023 and the new mid-term management plan:
USD1 = JPY133.0, EUR1 = JPY143.0, CNY1 = JPY19.2

16.6

17.0

—

Diagnostics business

408.1

533.0

9.3

Medical robotics business

2.3

27.0

126.2

410.5

560.0

10.9

Fiscal 2022 Fiscal 2025
(Target)(Actual)CAGR*2
(%)

241.3

297.0

7.2

Japan

FCM

2.2

7.0

45.7

Urinalysis

34.0

43.0

Hemostasis

66.9

93.0

Immunochemistry

23.5

40.0

Clinical chemistry

3.4Life science
OthersHematology

Total

41 Sysmex Report 2023

*2 CAGR from fiscal 2022 to 2025

Capital Policies (Three-Year Total)
Three years of the new mid-term management plan

(Fiscal 2020–2022)(Fiscal 2023–2025)

Cash flow generation(Operating cash flow)
Investment in facilities and¥280.0 billion or more

¥115.9 billion¥170.0 billion¥46.8 billion

Shareholder returns• Payout ratio of 30% or more
• Steady dividend increases backed byrising performance¥80.3 billion

R&D expenses
Capital efficiency*¥125.0 billion• Development of next-generation
instruments and reagents• Development of technologies for
new domains

16.0%

Mid-Term Management Planand Initiatives

12.4%

(ROE)

• Developments/facilities inemerging markets (such as India)• Promotion of digitalization• Expeditious M&A

Sysmex’s Value Creation

businesses (Investing cash flow)¥184.4 billion* Final fiscal year

Main Sustainability Targets
Major sustainability targets• Resolution of medical issues through innovation• Improvement in accessibility to healthcareP roviding responsible • Pursuit of quality and trust
products, services• Strengthening supply
and solutions
chain management

Number of hematology tests
Number of cases with surgical robots
Sales in emerging markets and developing
countries
Number of recalls Creating new value
for a healthy society• Increased engagement

CSR survey response rate
(primary suppliers in Japan and overseas)

Female managers ratio Realization of an attractive workplace• Promotion of diversity,
equity and inclusion(percentage of women and non-Japanese nationals)• Development of humanresources• Promotion of health andoccupational safety• Resource circulation
throughout the product Reduction in environ- life cycle
mental burden• Reduction in environmental burden through activities at business offices Strengthening ofGovernanceManagement diversity• Corporate governance• Compliance• Risk management

Training time per employee

Fiscal 2025
(Target)*1*1¥156.7 billion

*1

2

*1

94%

90%

71%
8.4%

75%
10% or less
20% ormore

19.5%*2
Women: 8.3%
Non-Japanesenationals: 16.7%
30.0 hours*1
40.0 hours¥22.50
millionValue-added productivity (Group)¥18.74 million

Total annual working hours*3

2,022 hours

1,980 hours

—

0.18%

—

60%

—

40%
reduction

597

*1

21
4,900

*1
*1

Zero product loss
Recycling of containers and packing and utilization of environment compliance materials
Reduction of greenhouse gas emissions(Scope 1, 2)*4
Number of meetings with investors andanalysts
Number of internal reports
Number of information security trainees*3*1 Set as a monitoring index; no target value has been set. *2 Excluding Russia *3 Target: Sysmex Group in Japan * 4 Base year: fiscal 2022
*5 Sysmex Corporation on a non-consolidated basis>>Status of Sustainability Targets P63

Sysmex Report 2023 42

Activity Report andCorporate Overview

Engagement score
Turnover ratio

Fiscal 2022
(Actual)2,977 million
1,323

Corporate GovernanceMateriality

About Sysmex

Past three years

Long-Term Corporate Strategy: Businesses and Technologies

Key Actions under the Mid-Term Management PlanThrough Innovation in the Diagnostics Business Domain,

1 Enhance Competitiveness and Expand Markets
Initiatives achieved to date Hematology: Developed and launched two new high- andlow-end models
 Hemostasis: Expanded market share by accelerating global
development of new products
 Immunochemistry: Developed and received approval for areagent to test for Alzheimer’s disease, expanded reagent
parameters in China to 57, and developed reagents related
to COVID-19
 Strengthened our sales structure in Brazil, Saudi Arabia andother emerging markets

Initiatives under the New Mid-Term Management Plan Hematology: Accelerate global development and launch of
new products
 Hemostasis: Establish and begin operating sales, service
and support systems in Europe and the United States
under new global OEM agreements
 Immunochemistry: Expand testing parameters and quickly
commercialize Alzheimer’s disease testing parameters Provide products and services that contribute to an
improvement in accessibility to healthcare and enhancementof healthcare infrastructures in emerging markets

In our mainstay field of hematology, we launched new
high-end models in fiscal 2021, followed by our line oftransport system products, primarily in the Japanesemarket. Our transport systems can automatically measure quality control substances, a world-first featurethat contributes to the overall workflow efficiency oflaboratories. Moving forward, we aim to improve ourgrowth and profitability by expanding sales of these new
products in other regions.
In the hemostasis field, Sysmex will expand its sales
territory through a new contract signed with Siemens
Healthineers in fiscal 2022. While our focus to date has
mainly been on Asia, including Japan and China, under
the new agreement for the mutual supply of equipment and reagents, we will now promote sales, service,and support in Europe and North America, and expand
global sales under our own brand.
In the immunochemistry field, we will expand sales
in Asia, including China, by adopting a new reagent portfolio for existing users. Furthermore, in Japan we beganselling reagents to test for Alzheimer's disease markers
in blood in June 2023, and in August started supplying
these reagents to LDT, a commercial lab in the UnitedStates. In addition to the early commercialization of

Alzheimer’s disease testing, we will focus on leveraging this as a foothold for entering the European andAmerican markets.
In emerging markets characterized by rapid population and economic growth, we will help address theissues customers face and improve access to healthcare by developing and introducing products that meetmarket needs. We have positioned India, in particular, asa key market. There, we will accelerate product launches by establishing a new production base and throughinitiatives across the entire value chain.
In China, we will work to expand our market shareby responding to local needs, such as by increasing
the knockdown production of instruments and accelerating local development of our immunochemistry
reagent portfolio.
Related Targets and Indicators
 Sales by field (hematology, urinalysis, hemostasis,
immunochemistry) Consolidated sales in emerging and developing markets* Market share, by field Number of hematology tests** Same as the sustainability targets

Characteristics of New High-End Products in the Hematology Field
 Automated quality control, backup, and re-inspection functions contribute to improve productivity in testing operations
 Modular concept inherited from previous models, enabling flexible customization to meet customer needs
 Space-saving and reduced power consumption

43 Sysmex Report 2023

2 Accelerate Commercialization Centered on Genetic Testingworking to develop highly sensitive gene mutation tests
using PSS technology and pursuing the global development of FISH testing. Furthermore, we aim to promote
the launch of a gene panel testing system for inherited
retinal dystrophy, which was granted health insurance
coverage in Japan in August 2023, to improve the quality of life for patients with rare diseases.

* Same as the sustainability targets

In the Domains of Prevention and Self-Medication,

3 Create a New Business Model

Demand for preventive medicine and self-medication
is growing, against the backdrop of growing individual
health awareness and advances in digital healthcare.
Sysmex aims to expand testing capabilities to homecaresettings, clinics and other venues, contributing toward
the realization of preventive medicine and primary care.
For example, we have developed a product that shortens antimicrobial susceptibility testing, which used to takemore than two days, to just 30 minutes. In June 2023, welaunched this product in Europe. The product consists of acompact testing instrument and a reagent cartridge, and it
supports the prescription of appropriate antibiotics in clinics. We also aim to create new solutions by leveraging ourhigh market share in existing businesses, the accumulated
testing data from our instruments, and IT networks connected to medical institutions to utilize testing data.

Initiatives under the New Mid-Term Management Plan
 Promote the global development of antimicrobial
susceptibility tests
 Develop primary care testing systems for home andclinical use
 Create new solutions using test data
Related Targets and Indicators
 Sales of rapid antimicrobial susceptibility testing
systems and regions where introduced
 Number of unique testing parameters developed

Antimicrobial susceptibility testing system instrument andreagent cartridge

Sysmex Report 2023 44

Activity Report andCorporate Overview

Initiatives to date Commercialized and commenced sale of antimicrobial
susceptibility tests developed in collaboration with Astrego
Diagnostics
 Established a joint venture with OPTiM Corporation tocommercialize digital medicine

Corporate Governance

Related Targets and Indicators
 Number of cancer genomes analyzed*
 Number of tests on breast cancer patients using the
OSNA method* Number of biomarkers
 Number of mentions in conference presentations andresearch papers

Mid-Term Management Planand Initiatives

In genetic testing, we are making progress with theinternational expansion of our cancer lymph node metastasis testing system, which utilizes our proprietary
OSNA method. Now that the post-covid medical environment has normalized, we plan to accelerate theadoption of this system in the Chinese market, where
we obtained regulatory approval in 2019. In Japan, we
will promote the adoption of the multigene PCR panel
as a companion diagnostic for therapeutic drugs forlung cancer. Through the introduction of these products, we aim to advance personalized medicine andimprove profitability in the life science field.
At the same time, we plan to utilize liquid biopsy
technology, which helps reduce patient burden, to develop and launch new products. For example, we are

Initiatives under the New Mid-Term Management Plan
 Accelerate the introduction into the Chinese market of
products using the OSNA method
 Enhance and commercialize liquid biopsy technology
 Accelerate market introduction of multi-gene PCR panels

Sysmex’s Value Creation

Initiatives to date
 Overseas, launched products using the OSNA™ method
and expanded types of cancers targeted Strengthened the measurement infrastructure for liquidbiopsy technology
 Insurance coverage and sales of multi-gene PCR panels commenced

About Sysmex

In the Domain of Personalized Medicine,Long-Term Corporate Strategy: Businesses and Technologies

Key Actions under the Mid-Term Management Plan
Common Initiatives to

1 2 3 Strengthen R&D Capabilities
Initiatives completed to date
 Established an R&D base in Singapore
 Strengthened the foundation of Wuxi Diagnostic Reagent
Development Center (China)
 Established reagent production technology using our
bio-reagent center

High-Value-Added Products and Services
Leveraging Technologies Related to
Instruments, Reagents, and IT
One of Sysmex’s distinguishing features is its technologies related to instruments, reagents, and IT. By fusing
these technologies, we work to ensure the provision of
accurate testing data—a critical consideration in testing. These technologies also allow us to make improvements and to quickly determine the source of errors
when they occur. In addition to creating new tests anddiagnostic technologies, we provide high-value-added

Initiatives under the New Mid-Term Management Plan Reinforce our global R&D function
 Strengthen digitalization and AI technologies (including theacquisition and training of human resources) Develop technologies that help resolve environmental andsocial issues

products and services that offer enhanced usability.
To raise laboratory productivity on the instrument
front, we are increasing analyzer processing capacity,
providing transport systems to enable the automatedhandling of more samples, and making instruments
more compact to offer higher usability. In addition tochemical reagents, we are focusing on the development of test parameters for bio-reagents, which areproduced from biologically derived substances. On the
IT front, we were quick to promote the use of networks
in medical settings. We are developing new applications
and services for the Caresphere™ network solution that

 Value Provided through R&D

R&D Base

Cell measurement technologies
Technologies for analyzing the number
and type of cells in blood and urine andfacilitating the analysis of intracellular
information

Technopark(Japan)Technologies for detecting proteins in
the blood swiftly and with a highdegree of sensitivity(Juntendo University)

45 Sysmex Report 2023

Fluids
OpticsElectronics

Reagents

R&D Center Asia Pacific(Singapore)

Chemistry

Others, totaling 24 locationsin 9 countries

BiologyOpen Innovation(universities, medical and research institutions, pharmaceutical companies, and others)
Comprehensive
agreement aimed at thedevelopment of new
diagnostics in the field ofdementia (Eisai Co., Ltd.)

Mechanics

Sysmex R&D Center
Europe GmbH (Germany)
Wuxi Diagnostic Reagent
Development Center (China)

Gene measurement technologies

Joint research related toimage analysis using AI
technology in the field ofhematology

Instruments

Sysmex R&D Center
Americas, Inc. (United States)

Protein measurement technologies

Technologies for measuring gene
quantities in cancer cells and enabling
the detection of cancer-cell-derived
DNA in the blood

Specializations
That Add Value

Global R&D Locations

Three Technology Platforms

R&D andcommercialization ofregenerative medicine
products using stem cells

Development of IT
solutions to support
next-generation
healthcare and diagnostics(JCR Pharmaceuticals Co., Ltd.)(OPTiM Corporation)

IT
Software
AI-relatedAbout Sysmex

will increase testing and laboratory efficiency, as well as
boosting quality.

In Japan, we will establish a new organization focusedon the growing fields of digital healthcare and regenerative and cellular medicine. This new entity will be
responsible for strategic planning, promotion, and efforts to accelerate commercialization. We are also
undergoing organizational restructuring to enhance

Instruments

IT
Sysmex Higher laboratory productivity leading to more efficientmanagement
 Reduced patient wait times
 Effective use of laboratory space Curtailed medical expenses through more efficient testing Reduced environmental burden (decreases in electricity

consumption, waste, and CO2 emitted during distribution)

Chemical reagents(Hematology, urinalysis)
 Development of new testing parameters Development of concentrated reagents(hematology)

 Enhancing the quality of healthcare through the creation of

Biological reagents(Hemostasis, immunochemistry, life science)
 Establishment of a bio-diagnostics reagent base(2019)
 Development of new testing parameters Creation of synergy within Group companies(HYPHEN BioMed, Oxford Gene Technology,
and others) Recycling of plastic containers■ Increased employment at various reagent factories

new testing parameters Decreasing reagent-changing frequency and reducing

storage space through the use of concentrated reagents
 Reduced environmental impact (reduced CO2 emissions

during transport and a shift away from plastics)

 Began offering the SNCS network service (1999)
 Provision of Caresphere network solution utilizing
AI technologies and ICT (2018)
 Moved to online external quality control
 Introduction of virtual training (Sysmex America) Higher-quality testing data Enhancing the quality of healthcare through the creationof new testing parameters Conserving biodiversity by using alternatives toanimal-derived substances in reagents

 Ensuring the stability of testing data Configuring systems to prevent the interruption of testing(breakdown prevention and swift recovery) More efficient laboratory operations(reduced travel time for product training) Reducing CO2 emissions from travel*1  Value provided to customers (such as medical institutions) Value provided to society

Sysmex Report 2023 46

Activity Report andCorporate Overview

Reagents

 Development of transport systems
 Higher throughput capacity
 Greater compactness
 Automation of quality control
 Environmental friendliness throughout the productlife cycle

Value Provided to Stakeholders*1

Corporate GovernanceValue-Generating Initiatives

Mid-Term Management Planand Initiatives

Initiatives under the New Mid-Term
Management Plan

collaboration among more specialized teams and allocate resources more flexibly. For example, in our R&D
divisions we have consolidated data scientists, creatinga structure to implement initiatives more effectively.
We established a research base in Tokyo and focus onbuilding a network with key opinion leaders in the Tokyo
metropolitan area, as well as securing data scientists
and other talented people. As its global R&D structure,with Technopark serving as the hub, Sysmex will conduct R&D in nine countries, expanding its efforts in eachregion. In this manner, we aim to strengthen relationships with top-level academia and key opinion leaders invarious countries, as well as to enhance R&D tailored toregional needs.
On the technology front, we will enhance our development capabilities by combining AI and simulation
technologies in bio-diagnostic reagents, which areused in the hemostasis and immunochemistry fields.

Sysmex’s Value Creation

Related Targets and Indicators Number of conference presentations and research paper
mentions Joint research projects with academia
 Number of unique testing parameters developedAdditionally, we will work towards realizing personalized medicine by focusing on the IVD development ofliquid biopsy technology (cells, proteins, and genes) andcreating new diagnostic value through approaches thatcombine existing testing techniques.
To achieve a circular value chain, we will step up ourdesign of environmentally friendly products. In addition
to ongoing efforts to make instruments more powersaving and compact, and to extend expiration periods
for reagents, we will expand resource-conscious designprinciples across all our products. We will also continue
to explore the development of alternative materials as ameans of preserving biodiversity.

Diverse R&D Personnel
A major Sysmex strength is its ability to develop equipment, reagents, and IT solutions across different measurement technology platforms (cells, proteins, andgenes), thanks to our diverse and highly skilled workforce. Under our new mid-term management plan, we
will focus on the global hiring of IT talent, including data
scientists, in addition to experts in biotechnology.
 Breakdown of Specializations among R&D Personnel
Liquids

OpticsElectronics
Mechanics

FY2022Biochemistry

SoftwareIntellectual Property That Enhances Our Global CompetitivenessSysmex strategically promotes intellectual property
activities, evaluating its own intellectual property, as
well as that of third parties. In an effort to enhance thegovernance of intellectual property, activities for theyear are reviewed and discussed by the Management
Board and at other management meetings.
As part of our business expansion efforts, weare actively promoting the acquisition of intellectual
property rights on a global scale. Overall, 85% of ourintellectual property rights are held overseas. We
are working to secure patent rights, utility modelrights, and design rights primarily in Japan, the UnitedStates, Europe, and China for technologies derived
from our measurement technology platforms forcells, proteins, and genes, which leads to the provision of high-value products and services. We arealso securing global trademark rights for important
brands, including in emerging and developing markets, with a particular focus on our corporate brand,in 195 countries and regions.

47 Sysmex Report 2023

 Number of Patents, Utility Models and Designs Held,by Technology Platform
OthersGenes

FY2022
Proteins

Related Targets and Indicators Number of patents*
 Number of new patents** Same as the sustainability targets

Cells

Long-Term Corporate Strategy: Businesses and Technologies

Key Actions under the Mid-Term Management Plan
4 Accelerate Business Growth, Centered on the Medical Robotics BusinessInitiatives under the New Mid-Term Management Plan
 Medical robotics business: Accelerate deployment of ourrobotic assisted surgery system in Japan and roll out overseas
 Regenerative and cellular medicine: Develop quality control
tests and automation technologies

In the medical robotics business, Sysmex has been thewith key opinion leaders in various regions and prepare

global general distributor for Medicaroid Corporation

for market entry in the Asia-Pacific region, as well as thesince 2020, when it commenced the full-scale launch

United States and EMEA.
In regenerative and cellular medicine, AlliedCelsystem. Initially, procedures eligible for insurance reim-

Corporation, a joint venture we launched in 2022 withbursement were limited to urology, but this has been

JCR Pharmaceuticals, will be at the center of technolog-

expanded to include gastroenterology and gynecology,

ical development and efforts toward the early commer-

which together account for over 70% of robot-assisted

cialization of regenerative medicine products employing

surgeries in Japan. Moreover, an increasing number ofstem cells and other types of cells.

surgical support robots, which reduce the burden on patients, are eligible for additional insurance coverage under medical reimbursement, further driving the growth
Under the new mid-term management plan, we willleverage Sysmex’s strengths in sales, service and support to accelerate the introduction and installation ofthese systems. Additionally, we will expand the deployment of solutions for the entire operating room throughsupport systems utilizing IT, and work to build a foundaThe global market for surgical support robots is
forecast to grow by over 10% annually. Leveraging thesales and service network developed through in its diagnostics business, Sysmex will also establish networks
 Global Market for Surgical Support Robots

USD 20,000 million

CAGR 13%

Robotic-assisted surgery system
2019

2020

2021

2022

2023
2024
2025
2030 (Fiscal year)(Forecast) (Forecast) (Forecast) (Forecast)
Note: Based on customer purchase priceSources: TechSci Research, 2030 figures are Medicaroid forecasts

Sysmex Report 2023 48

Activity Report andCorporate Overview

tion that supports remote surgery.

Medicaroid’s Expansion, by Region
Japan• Fiscal 2020: Acquired regulatory approval, launched foruse in urology• Fiscal 2022: Health insurance coverage expanded toinclude gastroenterology and gynecology
Asia Pacific• Fiscal 2023: Acquire regulatory approval in Singapore
United States, EMEA
• Preparing to file for regulatory approval

Corporate Governanceof the Japanese market for surgical support robots.

Related Targets and Indicators
 Number of robotic assisted surgery systems installed,
number of surgeries
 Establishment of quality control methods in theregenerative and cellular medicine domain

Mid-Term Management Planand Initiatives

in Japan of Medicaroid’s robotic- assisted surgery

Sysmex’s Value Creation

Initiatives Completed to Date Medical robotics business: Health coverage expanded toinclude gastroenterology and gynecology
 Regenerative and cellular medicine: Established a joint
venture, began business development and considerationof commercialization

About Sysmex

In the Therapeutic Domain,

Long-Term Corporate Strategy: Businesses and Technologies

Key Actions under the Mid-Term Management Plan
Common Initiatives

1 2 3 Expansion of Procurement, Production andDistribution Structures

Initiatives Completed to Date
 Procurement: Stably procured raw materials andsemiconductors during COVID-19 pandemic Production: Introduced a new manufacturing support
system (MES) in the instrument manufacturing division
 Distribution: Created a sustainable cold chain without
using dry ice (for some products)

As a company that supports healthcare, Sysmex has
established a rigorous quality control and global production structure. By promoting innovation, we strive toensure the continuous delivery of high-quality products
to the medical community.
In fiscal 2022, in Japan we introduced a new
manufacturing support system (MES) in our instrument
manufacturing division, enabling us to achieve more
efficient and precise operations through digitalization.
As part of our new mid-term management plan, we will
expand the implementation of this MES to our domestic
reagent production department and overseas factories,
facilitating the smooth transfer of manufacturing operations overseas.
We will step up our use of AI technology in current
reagent production processes. Individual differences inbio-reagent materials require adjustments during the formulation stage. By leveraging AI technology to minimize
waste generated through adjustments, and to improve efficiency, we aim to reduce manufacturing costs, eliminate
quality discrepancies, and enhance customer satisfaction.
In addition, we will continue to focus on shortening
manufacturing lead times and reinforcing the mutual

Initiatives under the New Mid-Term Management Plan
 Procurement: Gather information on the procurement
environment by establishing a new department dedicatedto strategic procurement
 Production: Introduce MES to reagent production
divisions and overseas regions, establish a new plant inIndia, and expand knockdown production in China
 Distribution: Establish a new specialized department tomanage global demand and supply with the aim of further
stabilizing supply

supply system between reagent production bases
worldwide as part of our BCP measures.
>>Manufacturing System Supporting Global Product Supply
P104

Related Targets and Indicators CSR survey response rate
(Tier 1 suppliers in Japan and overseas)* Number of training sessions for suppliers (Japan)** Same as the sustainability targets

Ensuring Product Supply So Testing Does Not Stop: What We Learned from COVID-19
Despite facing challenges in securing raw materials and semiconductors due to the spread of COVID-19 andthe situation in Ukraine, Sysmex has maintained a stable supply of products in the healthcare field. This is due inpart to our internal oversight of both our supply and engineering chains. Through effective information sharing
throughout the supply chain and the ability to adapt to sourcing changes and design modifications from raw
material manufacturers, Sysmex has been able to make supply adjustments flexibly. Furthermore, based onthese experiences, we have established specialized departments, such as the Procurement Information Center(responsible for the strategic sourcing of semiconductors) and the Supply Planning Department (overseeing
supply chain information), to coordinate information about sales forecasts, inventory status and production plansacross different regions. By formalizing these specialized departments, Sysmex aims to further enhance thestability of product supply to its customers.

49 Sysmex Report 2023

1 2 3 4 Expanding Our Sales, Service and Support Structure

Sysmex currently covers over 190 countries and re-Initiatives under the New Mid-Term Management Plan Enter the immunochemistry market in Europe and theUnited States through Alzheimer's disease testing Establish a direct sales structure for the hematology field in
Europe and the United States Strengthen our business foundation to support access toand quality of healthcare in emerging markets
 Establish a new service model utilizing Caresphere

In the service and support area, we will build service
models that utilize digital information such as data ac-

through direct sales and service structures as well as

cumulated through Caresphere and service data, in our

through alliances with major global companies.

quest to provide new value to the world.

Under the new mid-term management plan, we
will expand our hemostasis and immunochemistry
and American markets. In the hemostasis field, we will

Related Targets and Indicators
 Hematology market share*
 Sales in emerging and developing markets*

expand our direct sales area based on a global OEM* Same as the sustainability targets

businesses beyond Japan and Asia into the European

Mid-Term Management Planand Initiatives

gions. We tailor our business to local characteristics

Sysmex’s Value Creation

Initiatives Completed to Date
 Promoted direct sales in overseas regions andstrengthened our sales and service structure byleveraging alliances Established a sales structure for the medical robotics
business Developed efficient service and support through network
solutions, such as Caresphere

About Sysmex

Common Initiatives

contract with Siemens Healthineers. In immunochemAlzheimer’s disease testing. To achieve these goals, wewill work on obtaining regulatory approvals in each country and reinforcing sales and service structures.

 Per Capita Medical ExpenditureIndia

As economic development continues, more coun-

China

tries are likely to require improved access to healthcareJapanand higher medical quality. Sysmex is strengthening initiatives positioned to address future healthcare needs inmarket growth.

(1/70th Japan’s level)(1/7th Japan’s level)

0

1,000

2,000

3,000

4,000

5,000
(USD)

Source: WHO website
https://apps.who.int/gho/data/view.main.GHEDCHEpcUSSHA2011v?lang=en
OECD Health Statistics 2021 (2019 data) Overview of Sales, Service and Support Activities
Direct sales
ratio(fiscal 2022)

Japan

100%

Americas

76.6%

EMEA

75.2%

China

1.5%

Asia Pacific

52.4%

Overview of activities under the new mid-term management plan Accelerate market development, particularly for new products in our mainstay hematology field Establish a new diagnostic flow for Alzheimer's disease testing and promote the widespread use of
testing Promote the introduction of robotic-assisted surgery systems and the diffusion of new values such as
remote surgery
 Strengthen sales structures in Central and South America and develop sales activities tailored to theneeds of each country Reinforce regulatory affairs and our sales and service structure in conjunction with the expansion of
direct sales areas in the hemostasis and immunochemistry fields
 Expand markets in countries/regions that have shifted to a direct sales structure, such as Iberia andSaudi Arabia Reinforce regulatory affairs and our sales and service structure in conjunction with the expansion of
direct sales areas in the hemostasis and immunochemistry fields
 Accelerate market introduction and penetration of new value through our rapid antimicrobial
susceptibility testing systemE xpand local knockdown production in response to government procurement policy (in the fields ofhematology and immunochemistry) Increase market share in immunochemistry by developing testing parameters for immunochemistry Strengthen our sales and service structure to increase market share in India Promote our medical robotics business
Sysmex Report 2023 50

Activity Report andCorporate Overview

key locations such as India, where we anticipate strong

Corporate Governanceistry, we will enter the market through blood-based

Long-Term Corporate Strategy: Eco-social

Key Actions under the Mid-Term Management Plan
Realize a Circular Resource Value Chain and
5 Transform with a View to Solving Social Issues
Initiatives Completed to Date Created power-saving and compact new products in thehematology field (using approximately 40% less power) Created a system for dry ice-free ultralow-temperaturetransportation
 Reduced disposal of product parts by using RFID

Initiatives under the New Mid-Term Management Plan
 Promote environmentally friendly design to realize acircular resource value chain
 Encourage the recycling of plastic reagent containers andother packaging
 Strengthen efforts to reduce product waste

Adapting to and mitigating climate change and protecting water resources and biodiversity are major environmental issues that need to be addressed by the entire
world. In healthcare, there is growing concern regarding
increases in medical costs, and pressure on the medical infrastructure due to an expansion of areas where
tropical diseases and infectious diseases are endemic asa result of temperature rise, or increases in respiratory
diseases are caused by air pollution.
Along with our long-term corporate strategy, weformulated the new “Sysmex Eco-Vision 2033,” identified
a new materiality item (“reduction in environmental burden”), and spelled out initiatives for resource circulation
throughout the product life cycle and the reduction ofenvironmental burdens through our business activities.
In line with the mid-term management plan’s core
strategy, we will work with our customers and suppliers to achieve a circular resource value chain and strive
to reduce environmental impact throughout the entire
product lifecycle. We will also foster green innovation
through our 4Rs*1 to decrease environmental impact.

Specifically, we will step up our efforts to design environmentally friendly products and apply materials science to develop non-animal derived materials. We will
also work to reduce product waste by extending the
expiration dates of reagents and using RFID technology
to curtail waste in product parts. Additionally, we are
initiating discussions around the recycling of container
packaging, such as recycling the plastic containers used
for many reagents.
In recent years, more medical institutions havebeen introducing initiatives targeting carbon neutrality.
We believe that such efforts to reduce environmental
impact are not only a social responsibility for companies; they also help establish a competitive advantage inthe market.
We conduct our business activities based on themateriality identified in accordance with our long-term
corporate strategy, in an effort to address social issues
other than climate change.
>>Status of Sustainability Targets P63*1 4Rs: Sysmex’s “4Rs” are reduce, reuse, recycle, and replace.

 Long-Term Environmental Objectives (Fiscal 2033)

Climate change*2

Water

Biodiversity

Zero

90% or more

55% reduction

Resource circulation
Disposal of unused Sysmex products

Use of renewable energy
Reduction of GHG emissions(Scopes 1 and 2)(Base year: Fiscal 2022)

Water consumption
by main reagent factories

90pt reduction

Reduction of GHG emissions(Scope 3)

35% reduction

Total waste per unit of net sales

15% reduction

Percentage of containers andpackaging materials recycled,
and environmentallyconscious materials used

Expanded lineup of
products made fromanimal-derived raw materials

100%*2 Targets are based on the Science-Based Targets (SBTs)

 Endorsing the TCFD Recommendations

 Declaring Our Goal to Become Carbon Neutral
In 2022, we set a goal of reducing
greenhouse gas emissions to zero in realterms by 2040. (Scopes 1 and 2)

In January 2021, Sysmex expressed its support for the
TCFD recommendations and disclosed information basedon this framework.
>>Sysmex Sustainability Data Book 2023, P63

51 Sysmex Report 2023

Note: Scope 1 refers to greenhouse gases emitted directly by Company
facilities, factories, and Company vehicles. Scope 2 aregreenhouse gases emitted indirectly by the Company due toenergy use.

About Sysmex

 Reduction of GHG emissions (Scopes 1, 2, 3)*
 Rate of reduction in water consumption (major reagent
factories)*
 Reduced use of animal-derived raw materials* Same as the sustainability targets

 Circular Resource Value Chain

Sysmex’s Value Creation

Related Targets and Indicators
 Achieve zero product losses*
 Complete switch to recycled or environmentallyconscious materials*
 Renewable energy ratio*

Search for needs that connect business and social issues

Resource saving, power saving,use of alternatives to animal-derived
substances, and water conservation

Environmentallyconscious design

Production

Lowcarbon
production

Recycle• Supplier participation• Green procurement

Replace

Service

Customers

Dry ice-free, RFID utilization

Green logistics
Market recovery

Semiconductors,
etc.
Market recovery• Recover• ReusePlastic containers

Corporate GovernanceInstruments:
Collaboration with high-performancematerial manufacturers and ventures
Reagents:
Chemical raw materials with low
environmental impact and accelerated
substitution of bio-derived raw materials

Reuse

Sales

Local regulations
Component level circulation

ReduceProcurement

Development

Mid-Term Management Planand Initiatives

Research

Open innovation with customers, alliance partners, other companies, and suppliers, etc.

Initiatives
 Production of raw materials using

silkworms and cultured cells

 Spread of concentrated reagents(hematology and urinalysis fields)

 Shift reagent production overseas

 Extension of reagent

expiration dates

 Dry ice-free transportation(e.g., reagents for genetic testing)

Environmental and social considerations Enhanced competitiveness• Reduction of biologically derived
substances• Reduction of water consumption
and GHG emissions• Curtailment of GHG emissions• Conservation of packaging andpetroleum resources• Stable supply of raw materials• Stabilization of quality• Improved usability (reduced frequency of reagent
changes in the laboratory)• Reduction of inventory storage space• Reduction of GHG emissions• Realization of stable supply and reductionof transportation costs• Reduction in waste• Increased usability• Stabilization of quality• Reduction of GHG emissions• Reduction of transportation costs• Increased flexibility and conveniencein distribution

Sysmex Report 2023 52

Activity Report andCorporate Overview

 Examples of Initiatives to Achieve a Competitive Advantage and Realize Environmental Considerations

Long-Term Corporate Strategy: Human Capital

Key Actions under the Mid-Term Management Plan
Enhance Corporate Value by Strengthening Human Capital
6 and Our Management Base
Perspective on Human Capital Human Capital Strategy

Throughputs
Our ideals for human capital
Optimization of the human resources portfolio

Inputs• Securing the workforce• Provision of growth
opportunities• Competitivecompensation• Appropriate human resources to drive strategy
Business domains (A-D), regions/functions
Skills, expertise and diversity

Outputs

High engagement• High productivity• Provision of added value
to stakeholders• Enhancement of individual well-being• Promotion of DE&I

Demonstration of teamwork at its best
• Improvement of corporate culture(Respect for autonomy and promotion of challenge)• Securing and fostering of an abundant leadership cadre

In its long-term corporate strategy, Sysmex has drawn

opportunities, drive DE&I initiatives, and create systems

up a human capital strategy. We aim to realize our long-that enable diverse human resources to thrive, regard-

term vision through initiatives aligned with three ideals

less of time, location or employment status. The thirdfor human capital.

ideal is “demonstration of teamwork at its best.” To

The first ideal is “optimization of our human re-maximize teamwork, it is crucial to respect autonomy

sources portfolio.” This refers to allocating talent appro-and foster a corporate culture that embraces challenge,

priately so they can contribute to the implementation ofas well as ensuring an abundant pool of leaders andour strategies and the sustainable enhancement of cor-

nurturing their development. Sysmex will continue toporate value. To this end, we will work on organizational

recruit and develop leaders who can drive both existingdevelopment from a multidimensional perspective,

and new businesses by enhancing visibility and provid-

considering business domains, functions, skills, exper-

ing enough training opportunities for succession to key

tise, and diversity that align with our management strat-

global positions. Regarding organizational culture, we

egy. The second ideal, “a high level of engagement,”

will publish the results of our annual corporate culturemeans that each employee is fulfilled both mentally

survey to employees and engage in dialogue with them.

and physically, and they are attaining their own sense of

Furthermore, we will continue to promote data

fulfillment. To achieve this goal, we will strive to create

disclosure based on international standards and strive

a working environment that facilitates the well-being ofto achieve our long-term vision through dialogues witheach individual and provides opportunities for employee

our stakeholders.

growth. Additionally, we will promote fair and equitable
Key Sustainability Targets and Monitoring Indicators for Human Capital
Inputs
Items related to investment in
human capitalThroughputs
Items related to employee experienceand corporate culture
Outputs
Items related to results of utilizing
human capital

Indicator
Staffing plan, number of personnel
Average education time*1
Personnel expenses
Engagement score*1
Female managers ratio*1
Percentage reporting a favorable
impression of the “Sysmex Way”*3
Percentage reporting a favorable
impression of “well-being”*3
Value-added productivity per person*1 Same as the sustainability targets *2 Excluding Russia *3 Corporate Culture Survey

53 Sysmex Report 2023

Fiscal 2022 (Actual) Fiscal 2025 (Target)
11,126—30.0 hours
40. hours¥110.6 billion
—
71%
75%
19.5%*2
20% or more
81%

—

72%

—

¥18.74 million¥22.50 million

About Sysmex

Cultivate and Acquire Human Resources to
Drive Sustainable Growth

Initiatives under Our New Mid-Term Management Plan Expand the Group's HR portfolio based on the long-term
corporate strategy- Acquire, cultivate and deploy human resources- Develop next-generation leaders for key global positions
 Strengthen DE&I initiatives through flexible work styles

reagents locally that are suited to local needs, especiallyin emerging markets in Asia and Africa, and particularly

Sysmex’s Value Creation

Initiatives Completed to Date
 Implemented a global HR policy and a consistentpersonnel management system for the Group Promoted smart work throughout the Group Utilized DX in human resource managementin India. We also plan to recruit personnel with specialized scientific expertise in the hemostasis field to ex-human resources portfolio and strengthen its DE&I ef-

pand our business in Europe and the United States.

forts through flexible workstyles as part of its new mid-

To enhance sustainable corporate value, we willterm management plan, in order to execute its humancertify and promote succession planning for global key

capital strategy.

positions across the Group, in the aim of strengthening

To expand the human resources portfolio, we recognize the need to secure, develop and appropriately

our pipeline of next-generation talent.
We will continue to build a work environment char-domains and functions. Therefore, in addition to nurturing

enhancing awareness of unconscious bias and by pro-existing talent, we will also hire highly skilled professionals

moting initiatives for flexible work practices as part offrom outside the Group in new business domains.

our DE&I efforts.

To drive our development in new areas such as
regenerative and cellular medicine, as well as to develop

Monitoring Human Capitalunique testing parameters such as Alzheimer’s disease
Sysmex uses value-added productivity as a key indicator

have bioscience knowledge and expertise that can be

for monitoring human capital. We collect data on theapplied to such fields as immunochemistry, hemostasis,

number of employees, personnel costs, and other fac-and life science. From universities and other institutions

tors on a monthly basis throughout the entire Group toaround the world, we will also recruit people with thehelp us understand trends at the regional and country

latest digital technology skills, which are essential to ourlevel. Additionally, we hold regular meetings with the HR

future growth.

leaders of each consolidated local subsidiary to discuss

We will continue to recruit and develop skilled personnel to develop and manufacture instruments andkey topics related to human capital and drive global
improvements in value-added productivity.
 Value-Added Productivity per Employee* (Group)
22.50 (¥ million)

18.72

18.74

2021

2022

19.38

16.06

2020

2023
(Target)2025 (Fiscal year)(Target)* (Operating profit + labor cost + depreciation)/number of employees

Sysmex Report 2023 54

Activity Report andCorporate Overview

testing, we will augment our workforce with people who

Corporate Governanceallocate talent in line with the expansion of our businessacterized by respect for employees’ individuality by

Mid-Term Management Planand Initiatives

Sysmex will promote the expansion of the Group’sMessage from the Executive in Charge of FinanceKenji Tachibana
Member of the Managing Board andSenior Executive Officer
Senior Managing Director
Corporate Management, Regulatory Affairs &Quality Assurance and DX Strategy Development

In order to continue investing aggressively for the future, we will
advance our financial and capital
strategies by pursuing capital andinvestment efficiency more thanever before.

55 Sysmex Report 2023

Financial Policy under Long-Term Corporate
Strategy 2033 (VA33)
Long-Term Corporate Strategy 2033 (VA33), which
commenced in fiscal 2023, sets net sales, the operating
margin, free cash flow and ROE as priority financial indicators. As quantitative targets under VA33, we have set
the goals of net sales of ¥1 trillion or more and an operating margin of 20% or more by fiscal 2033.
These targets are based on Sysmex’s approach tovalue creation and growth. Our overarching mission is“Shaping the advancement of healthcare.” Within thismission, we have numerous growth themes, such asadding new value to existing businesses, expanding our
regions, developing unique testing parameters to contribute to areas like Alzheimer’s disease testing and personalized medicine, and rolling out new businesses suchas robotic assisted surgery systems. These aims callfor us to make up-front investments in technology andcontinuously expand our sources of investment. Our
fundamental policy remains the same, namely to generate profits through high net sales growth and profitability, and reinvest the cash. If we can sustain double-digit
growth, in addition to inorganic growth, we can achieve
net sales of more than ¥1 trillion by fiscal 2033, a decadefrom now.

 Major KPIs
Net Sales

Double-digit growth(fiscal 2033 target under VA33: ¥1 trillion or more)• Achieve high growth in the expanding healthcare market

Free Cash Flow

20% or more
• High profitability to allow investment for the future and stableshareholder returns• Healthy financial position due to increased operating cash flow andreinvestment in growth

Sysmex’s Value Creation

ROE

About Sysmex

Operating Margin• Capital efficiency that meets stakeholder expectations and iscomparable to global companies in the same industry

Sales growth rate
Operating margin

20.9

18.3

4.1

2.9

53.1
44.7

56.8
27.2

58.7
27.7

688 (¥ billion)
17.1
23.7
(51.7)(35.0)(25.9)

2019(29.1)

2020

2021

2022 (FY)* Sales of reagents, services and support, others

Financial Strategy under the Mid-Term
Management Plan
Based on the VA33 financial policy, under the mid-term
management plan (fiscal 2023 to fiscal 2025), by fiscal
2025 we are targeting net sales of ¥560.0 billion, operating profit of ¥112.0 billion, ROE 16% and free cash flowof ¥46.0 billion. We aim for a compound annual growthrate (CAGR) for net sales of 10% or more from fiscal
2022 to fiscal 2025 and anticipate an operating marginof 20% in fiscal 2025.
Our existing diagnostics business will be the main
driver of sales and profits. To grow net sales, we will
strive to increase market share by leveraging thecompetitive advantage of our products and services.
We also recognize the importance of capturing each
Sysmex Report 2023 56

Activity Report andCorporate Overview

In domains such as life science, personalized prevention, and prognosis monitoring, we will continue topursue a business model of generating revenue throughreagents, services, support and solutions, they createdby healthcare support utilizing new diagnostic methods
and data. We will also strive to improve profitability
through the full-fledged expansion of the medical robotics business, including overseas.

Corporate Governance

VA33 also calls for us to expand into new areas, so
we will need to pursue capital and investment efficiencies even more than before. Sysmex’s ROE has beenaround 10% to 15% in recent years, which exceeds ourcost of capital. Compared to other global companies,
however, we still have room for improvement. In VA33,
we anticipate that the cost of capital will increase as we
pursue riskier investments, and we will place greater
emphasis on ROE levels. In terms of investment efficiency, we will consider adopting ROIC to properly
manage return on invested capital and payback periods.
Looking at the revenue structure, even while
expanding our business domain and cultivating new
business models, Sysmex will maintain and expand its
distinctive recurring profit model. Our diagnostics business, which is our core source of revenue, involves firstselling instruments. After installation, we then generatecontinuous sales from reagents, services and support.
Reagents, services and support are more profitable thaninstruments, so the profit model is stable. For many
years, we have been focusing on the expansion of testing parameters and the enhancement of high-valueadded service and support. These contribute to ourcompetitive advantage and heighten our stability andgrowth potential. These recurring sales accounted for
77.6% of net sales in fiscal 2022.

12.8 (%)

1.0

4.6(40.1)

201817.9 (%)

18.5

Mid-Term Management Planand Initiatives

Operating cash flow
Investing cash flow
Free cash flow

19.2

16.4

 Financial Guidance under the New Mid-Term Management Plan
Net sales¥560.0 billion

Operating profit¥112.0 billion

ROE

16.0%

Free cash flow

¥46.0 billion

R&D expenses¥125.0 billion(Fiscal 2025 targets)(Total for fiscal 2023–2025)• Dividend payout ratio of 30%• Stable dividend increases backed by earnings growth

Shareholder returns(¥ billion)

Cash and deposits, loans

Others
280.0
or
more

Operating cash flow

184.4

Previous Total under
the new
three
mid-term
years
management plan
Cash inmarket’s potential in individual fields and proactively
enlarging the market ourselves. From a regional perspective, healthcare expenses per capita in China areabout 1/7th that of Japan. In India, this spending is at
1/70th Japan’s level, pointing to significant room formarket growth as healthcare needs increase. In our new
mid-term management plan, we will continue to sustain
growth momentum by cultivating emerging markets in
the hematology and urinalysis fields, increasing testing
parameters in the hemostasis and immunology fields,
and pursuing global expansion.
On the profitability front, over the past few years
we have incurred significant expenses related to internal
DX investments initiated in 2018, as well for new product development and expenses in the medical robotics
business. However, we are now entering the phase ofrecouping these investments. On DX in particular, weare transitioning from individually optimized IT systems
to globally optimized systems, and a series of new IT
systems will be operational by fiscal 2023. Although
depreciation of intangible assets will rise, by fiscal 2025
we anticipate that productivity improvements will outpace these higher costs. We expect to enjoy a range ofbenefits from these DX effects: business process improvements across all divisions, faster R&D, enhanced
service and support through the centralization of data,
57 Sysmex Report 2023

46.8 Shareholder returns
170.0

Investment in facilities
115.9 and businesses

Total under Previous
three
the new
years
mid-termmanagement plan
Cash used

and optimized global staffing. Earlier, I referred to therevenue structure. Profitability can vary substantiallybased on how many testing parameters a single instrument can handle. We are accelerating the expansionof testing parameters in the hemostasis and immunochemistry fields. In particular, immunochemistry field will
have a much greater impact due to the higher unit price.

Allocation of Capital under the Mid-Term
Management Plan
Our main areas of growth investment under the new
mid-term management plan will be fore R&D and personnel, which are recorded as business expenses. Our
allocation of capital will focus on investment in facilities
and businesses, including DX.
In terms of business expenses, we expect R&D
spending to account for around 7–8% of net sales.
These expenditures will mainly go toward the development of next-generation instruments and reagents, thedevelopment of new technologies, and expenses related to regulatory approvals. Under the new mid-term
management plan, we have earmarked a total of ¥125.0
billion for R&D expenses. This is 55.7% higher than during the previous three years. Our investment in humancapital will focus on enhancing employee engagement, R&D Expenses/R&D Expenses as a Percentage of Net Sales
R&D expenses
R&D expenses as a percentage

 Capital Expenditure/Depreciation and Amortization
Capital expenditure (both tangible and intangible)
Depreciation and amortization
47.80 (¥ billion)

37.50 (¥ billion)

42.03

26.78

33.27

22.51

21.76

2019

2020

7.6

7.4

7.4

7.2

2021

2022

27.16

25.71
23.95
25.57

2019

2020

8.2 (%)

27.43

2021

2022

 Cash Dividends Applicable to the Year / Dividend Payout Ratio (Consolidated)
Cash dividends applicable to the year (figures adjusted for stock split)
Dividend payout ratio

66

72

72

76

2023 (FY)(Planned)

82

84(Yen)

58

38
27

3.75

6.5

9

12

12.5

14

15

17

20

37.5
35.4 43.1 47.1 36.0 (%)
26.8 31.9 29.4 27.0 29.1 29.1 27.1 29.6 27.5 29.7 35.1
22.6 17.8 17.9 20.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 (FY)5

Mid-Term Management Planand Initiatives

52

70

35.00

Sysmex’s Value Creation

2023 (FY)(Planned)

31.80

About Sysmex

31.06(Planned)payout ratio of 30% or more, and we will continue topromote a dividend policy that focuses on continued
stable dividends.

Future KPIs
We are organizing and systematizing KPIs in order tomonitor and share the progress of our strategies internally and externally. However, we believe one thing thatwill determine our ability to implement future strategies
is the degree to which employees feel comfortable withthose strategies. For that reason, we think that using thesame mechanisms and formal indicators as other companies will be insufficient. For instance, it is difficult to
introduce KPIs for ROIC by field because management
is not divided according to field; this requires a great
deal of ingenuity and consideration. On the other hand,customer satisfaction indicators such as NPS® (Net
Promoter Score) and engagement score are importantdrivers of value creation, and these non-financial indicators can improve ROIC. We intend to set KPIs that canmake Sysmex’s value creation and corporate value visible, and to energize dialogue with stakeholders.

Sysmex Report 2023 58

Activity Report andCorporate Overview

putting in place an environment that enables each employee to work to their potential, broadening and implementing education and training, and accelerating DE&I.
Prioritizing operating cash flow as the main sourceof our funding, we will allocate capital toward investment in facilities and businesses as well as shareholder
returns. Facility investments will include intangible assets such as DX investments, as well as an increase inlease assets for instruments related to the expansionof direct sales and services in emerging countries, andthe establishment of infrastructure in countries such as
India. In terms of business investment, we will pursue
M&A flexibly to accelerate the development and cultivation of new businesses. In fiscal 2022, we invested
in and acquired Sysmex Astrego, which possesses
advanced antimicrobial susceptibility testing technology. As in this case, Sysmex’s M&A activity will betechnology-focused. Although it is not easy to predictthe precise timing of return on investment and the scaleof earnings, under the new mid-term management planwe will monitor these factors more closely than everbefore, as we expect invest aggressively in businesses.
Shareholder returns are based on increasing corporate value and returning profits to shareholders
based on cash flow growth. To date, we have been
striving to continuously increase dividends with a target

Corporate GovernanceNote: Two-for-one stock splits conducted on November 18, 2005, April 1, 2011 and April 1, 2014.

Performance Highlights (As of the end of fiscal 2022)
Financial Performance Net Sales Operating Profit/Operating Margin¥

410.5 billion¥(Up 12.8% year on year)(Up 9.3% year on year) (Down 0.6 percentage points year on year)

73.6 billion 17.9%
Operating profit

73.6 (¥ billion)

Net sales

410.5 (¥ billion)
141.0

(¥)
(+¥23.1)*

Euro

135.5

(¥)
(+¥10.4)*

17.9 (%)

US dollar

Operating margin

19.8

Yuan

(¥)
(+¥2.3)*2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)Japanese GAAP2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)IFRSJapanese GAAPIFRS

* Year on year

SG&A expenses increased in line with the resumption ofsales and service activity in each region. That factor, theimpact of sharply higher raw materials costs, and yen
depreciation led to higher operating profit.

 R&D Expenses/
R&D Expenses as a Percentage of Net Sales Capital Expenditure (including tangible and intangible)

Net sales increased as expansion of the installed
instrument base pushed up sales of reagents,
particularly in the hematology field.

42.0 billion

31.0 billion 7.6%¥¥

(Up 16.0% year on year) (Up 0.2 percentage points year on year)(Up 26.3% year on year)

R&D expenses

Capital expenditure31.0(¥ billion)

42.0 (¥ billion)

R&D expenses as a percentage of net sales

7.6 (%)

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)Japanese GAAPIFRS

These expenses grew due to ongoing investment inproduct development and higher costs related toregulatory affairs.

59 Sysmex Report 2023

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)Japanese GAAPIFRSIn addition to DX investment, customer lease assets
grew as a result of a recovery in instrument demand.

¥

68.8 billion ¥17.0 billion¥(Up 17.2% year on year) (Down 27.9% year on year)(Up 3.8% year on year) (Up 3.8% year on year)

45.7 billion ¥218.83
Profit attributable toowners of the parent

68.8 (¥ billion)

45.7 (¥ billion)
218.83 (¥)

Free cash flow

EPS

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)Japanese GAAPIFRSJapanese GAAPIFRSDespite the impact of foreign exchange, operating profit
rose, lifting profit.

 Total Shareholder Return (TSR)(Annualized Rate) ROE/ROA(Down 1.1 percentage (Down 0.7 percentage
points year on year)
points year on year)

Activity Report andCorporate Overview

11.7% -2.1%

9.0%(Past 10 years) (Past 5 years)
Sysmex

11.7%

TOPIX

9.2%

TOPIX

5.7%

ROE

12.4 (%)
9.0 (%)

ROA

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)Japanese GAAP

Sysmex-2.1%

Past 10 years

Past 5 years

IFRS

Although profit rose, increases in equity attributable toowners of the parent and assets caused ROE and ROA
to decrease.

Corporate GovernanceOperating cash flow rose, due mainly to increases in
profit before tax and depreciation and amortization.
However, investing cash flow also rose, owing to theconversion of Sysmex Astrego to a subsidiary and DX
investments. Free cash flow decreased as a result.

12.4%

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)

Mid-Term Management Planand Initiatives

17.0 (¥ billion)

Sysmex’s Value Creation

Operating cash flow

About Sysmex

 Operating Cash Flow/Free Cash Flow Profit Attributable to Owners of the Parent/
Basic Earnings per Share (EPS)

Although TSR was negative for the past five years due toa decline in the stock price, due to stable dividends TSR
has outpaced TOPIX over the past 10 years.

Sysmex Report 2023 60

Non-Financial Performance Scopes 1 and 2 Greenhouse Gas Emissions/
Basic Unit Emissions

 Number of Employees (Consolidated)*/
Percentage of Overseas Employees

27,905t-CO 0.680t-CO /billion

10,522 61.3%

2(Up 40% year on year)2(Up 24% year on year)
Scopes 1 and 2 greenhousegas emissions

27,905 (t-CO )Asia Pacific

Japan

1,084

4,073

2

China
Basic unit emissions

800

0.680 (t-CO /billion)

FY2022

2

Americas

EMEA
2016

2017

2018

2019

2020

2021

1,508

3,057

2022 (FY)

CO2 emissions rose substantially, due to an expanded
scope, but we are making steady progress on the switchfrom resource-based to renewable energy. (In fiscal
2022, the amount of energy consumption accounted
for by renewable energy was up 40% year on year.) Percentage of female managers/
Percentage of next-generation female managers
Sysmex Corporation
Percentage ofnext-generation
female managers

23.7%

Employee numbers continued to rise in tandem with ourscale of business, such as our expanding direct sales
and service areas.
* Including part-time employees and others

 Engagement Score71%(up 6.0 percentage points year on year)

Sysmex Group
Percentage offemale managers

19.5%
10.6%
8.7%
5.7%

72%

71%
66%*

65%*

2020

2021

Sysmex Corporation
Percentage offemale managers

10.1%

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)

Continuous improvement of the work environment andthe establishment of a system to realize diverse work
styles have led to an increase in these percentages,
especially in the EMEA and Asia Pacific regions.

2017

2018

2019

2022 (FY)

Scores increased in all regions due to the promotion ofsafe and secure work measures during the COVID-19
pandemic.
* Figures exclude EMEA in fiscal 2020 and fiscal 2021.

* Excluding Russia

61 Sysmex Report 2023

Topics in Fiscal 2022
Here, we introduce key topics related to Sysmex’s business in fiscal 2022.

Through an alliance that has lasted more than 25 years, Siemens Healthineers and Sysmex have conducted sales andoffered services in each other’s regions. As a result, our two companies have together acquired the No. 1 global shareof the market in the hemostasis field. In February 2023, we signed a new global OEM agreement that enables us tomutually supply instruments and reagents, as well as selling products globally under our own brands. Under this agreement, Sysmex will expand its direct sales, service, and support offerings in Europe, the Americas, and other regions.

Reagents

Sysmex Makes Astrego a Subsidiary with the Aim of Accelerating Clinical Implementation of
Rapid Antimicrobial Susceptibility Testing

Analyzer

Single use sample
cartridge

Rapid antimicrobial
susceptibility testing system

In October 2022, Sysmex and JCR Pharmaceuticals Co., Ltd. formeda joint venture, AlliedCel Corporation, to conduct R&D and aim forthe early commercialization of regenerative medicine products using
stem cells. The venture will combine Sysmex’s quality control testing technologies and expertise in enhancing workflow efficiency with
JCR’s track record and knowhow in the development, manufacture,and sale of regenerative medicine products to develop new products
using hematopoietic stem cell proliferation technology and conduct
other technological development and commercialization efforts.

Insurance Coverage of Our Robotic-Assisted Surgery System
Extended to Gastroenterology and Gynecology
In October 2022, Medicaroid Corporation, which Sysmex establishedwith joint investment from Kawasaki Heavy Industries, Ltd., obtained
approval to extend the scope of use of its robotic-assisted surgery
system to the gastroenterology and gynecology domains. Insurance
coverage for these areas was granted in December. These expanded
indications will enable clinical use in a wider range of areas, andMedicaroid plans to further accelerate market introduction.

Robotic-assisted surgery system

Sysmex Report 2023 62

Activity Report andCorporate Overview

Establishment of a Joint Venture with JCR Pharmaceuticals with a View to the Social
Implementation of Regenerative Medicine and Cell Therapy

Corporate Governance

Since 2019, Sysmex has been working with Astrego Diagnostics
AB to develop products aimed at helping to address antimicrobial
resistance (AMR). In May 2022, we welcomed this company into
the Sysmex Group. In June 2023, we launched a rapid antimicrobial
susceptibility testing system that detects the presence or absence ofbacteria and assesses the effectiveness of antimicrobials using urine
samples. This system produces results in as little as 30 minutes, asignificant reduction compared to the several days required for conventional testing. This assists in the appropriate use of antimicrobials
during initial patient visits at clinics and other primary care settings.

Mid-Term Management Planand Initiatives

In December 2022, Sysmex received manufacturing and marketing
approval in Japan for an assay kit to identify amyloid beta accumulation in the brain, a cause of Alzheimer’s disease, using a small amountof blood. As this project allows testing using blood, it reduces thephysical, emotional, and financial burden on patients. Furthermore,
the product is expected to contribute to early diagnosis and early
determination of optimal treatment plans for patients. Sales in Japan
commenced in June 2023, and in August we began supplying the
product as an LDT test reagent to a large commercial lab in the
United States.

Sysmex’s Value Creation

Received Manufacturing and Marketing Approval for a Reagent to Test for Alzheimer’s Disease

About Sysmex

Sysmex Enters an Agreement with Siemens Healthineers in the Hemostasis Field, Expanding Its
Sales Region

Status of Sustainability Targets
Materiality

KPI1

Fiscal 2023

Fiscal 2025

Number of CBC tests(based on the number of reagents)
Percentage of consolidated sales to the market size of instruments, reagents, and services in a single year in the field of hematology

—

—

—

—

Number of cases using hinotori——

Total number of patents, utility modelrights and design rights obtained——

Total number of patents, utility modelrights and design rights applied for——

Number of cancer geNumber of cancer genomes analyzed bynomes analyzed3
the NCC OncoPanel
Number of breast cancer
Number of breast cancer tests using thetests using the OSNA
OSNA method
method————Sales in emerging anddeveloping markets——

Number of hematology
tests

Creating new value for a healthy society

Hematology market
share2
Number of cases withsurgical robots

Resolution of
medical issues
Number of patents
through innovation

Number of new patents

Improvement inaccessibility tohealthcare

TargetConsolidated sales in emerging anddeveloping markets

Fiscal 2033
(Eco-Vision)—

Providing responsible products, services,and solutions
Reducing environmental impacts

Number of recalls

Number of voluntary recalls/repairs for
products sold (instruments and reagents)——

Number of FDA
warning letters

Number of FDA warning letters issued
to Sysmex——

CSR survey response
Percentage of raw material suppliers thatrate (primary suppliers in responded to CSR surveys (primary supJapan and overseas)pliers in Japan and overseas)

90%

90%

Number of briefings, training, and other
Number of training sestraining sessions for domestic suppliers
sions for suppliers (Japan)4(single year)

6

5

Third-party certification
rate of suppliers(primary, Japan)4

Percentage of primary raw material suppliers (domestic) obtaining third-party certification for manufacturing or product quality——

Zero product loss

Unused disposal rate of in-house manufactured goods, raw materials and spareparts (cost/sales percentage)

—

0.18%

Less than
0.1%

—

60.0%

100%

—

Cut 10%Cut 35%

Cut 20%——

Cut 10%——Cut 20%

—

—

—

—

—

Pursuit of quality
and trustStrengthening
supply chain
management

Resource
circulation in
product life cycle

Recycling of containers
Rate of recycled or environmentally conand packing and utilizascious materials used in containers andtion of environment
packaging/labeling materials
compliance materials
Reduction of greenhouse Percentage of reduction of greenhouse gas emisgas emissions (Scope 3) sions (Scope 3) with FY2022 as the base year
Reduction of CO2 emis- Reduction rate of CO2 emissions per instrusions (instruments)
ment unit with FY2016 as the base year
Reduction of water con- Reduction rate of waster discharge per insumption (instruments) strument unit with FY2016 as the base year
Reduction rate of CO2 emissions generReduction of CO2 emisated by shipping per non-consolidated
sions (shipping)sales unit with FY2016 as the base year
Reduction of packaging Percentage reduction of total packaging
and labeling materials
material weight with FY2019 at the base year

1. The shaded KPIs were added in April 2023. The items whose targets are displayed as “—” are monitoring items for which no targets are set.
2. Source: Clearstate and Sysmex estimates
3. Target: Sysmex Group in Japan
4. Target: Sysmex Corporation on a non-consolidated basis
5. The figure disclosed in the previous fiscal year has been revised due to a change in the calculation method.

63 Sysmex Report 2023

Results
Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

—

—

—

—

2,971
million

2,977
million

52.7%

53.8%

54.7%

55.6%

54.6%5

54.0%

—

—

—

—

—

1,323

2,709

2,987

3,143

3,485

3,680

3,832

301

346

306

287

298

257

—

—

—

1.6
thousand1.6
thousand1.7
thousand

—

—

—

46
thousand54
thousand52
thousand¥122.0billion¥143.0billion¥156.7billion

—

—

—

4

2

2

—

—

—

0

0

0

81%

84%

85%

89%

90%

94%

—

—

—

2

5

5

—

—

—

86%

88%

86%

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Cut 12%

Cut 10%Cut 2%

Cut 8%Cut 22%

Cut 27%

Cut 8%Cut 2%

Cut 4%Cut 6%

Cut 13%

Cut 7%

Cut 17%Up 1%

Cut 17%

Cut 25%

Cut 1%Cut 25%———

Cut 4%Up 9%

Cut 7%The reduction rate of CO2 emissions per instrument
further improved in fiscal 2022 from the previous
fiscal year (by 5 percentage points).This reduction
was mainly due to increased sales of power-saving
products and global improvement in our CO2 emissions coefficient. The reduction rate of CO2 emissions generated by shipping in fiscal 2022 improvedby 24 percent points from the previous fiscal year.
We promoted supply management replacing airtransport with sea transport.
As new targets to achieve Sysmex Eco-Vision 2033,
we have set “zero product losses,” “complete switch
to recycled or environmentally conscious materials,”and “reduction of GHG emissions (Scope 3).” We willfind innovative solutions toward a circular-oriented society in cooperation with our stakeholders by pursuinggreen innovation and leveraging our unique strengths.

Sysmex Report 2023 64

Activity Report andCorporate Overview—

The sales in emerging and developing markets increased by more than 10 billion yen from the previous fiscal year partially because we bolstered ourmarketing and service provision structure in Brazil,
Saudi Arabia and other emerging countries. We
will work to improve healthcare access and quality
in emerging and developing countries, continuingcooperation with international organizations, such as
the WHO and JICA.
In fiscal 2022, we had only two recalls, the same
number as the previous fiscal year, without receiving any health hazard reports, and received no FDA
warning letters, as in the previous fiscal year.
We successfully prevent defective products fromentering the market by establishing a system that
ensures compliance with the regulations of eachcountry, conducting regular quality audits, timely
collecting information from the market through ourglobal quality complaint handling system, and thoroughly investigating the causes of defective products. We will continue our efforts to maintain andimprove the safety and quality of our products.
The CSR survey response rate for fiscal 2022 was
94%, higher than the rate for the previous fiscal year.
As part of our follow-up, we urged suppliers to identify low-score items and high-risk items and makenecessary improvements based on the results ofthe previous year’s CSR survey. We held five training
sessions for suppliers as in the previous fiscal year.
In fiscal 2022, we held BCP training sessions andseminars on promotion of sustainability and green
procurement, in which a total of 431 business partners participated. We will continue to strengthen our
relationship with business partners.

Corporate Governance—

The market share in fiscal 2022 remained at thesame level as the previous fiscal year, due to Chinese
government’s procurement policy and restrictions
to control the COVID-19 pandemic, though reagent
sales grew in each region due to an increase in installed instruments, and new high-end models enjoying brisk sales in Japan.
The number of cancer genomes analyzed and thenumber of breast cancer tests using the OSNA
method also remained at the same level as theprevious fiscal year.
The number of patents held and patent applications
have been steady, in line with our business performance.
Adding the number of hematology tests and thenumber of surgeries performed using our roboticassisted surgery system, we will monitor the impact
on society of our existing diagnostics business andour new medical robotics business.

Mid-Term Management Planand Initiatives—

Progress and Future Initiatives

Sysmex’s Value Creation

Fiscal 2018

About Sysmex

Fiscal 2017

Materiality

KPI1
Reduction of greenhouse
Reduction rate of GHG emissions
gas emissions (Scopes(Scope 1, 2) from fiscal 2022
1, 2)
Percentage reduction of CO2 emissions
Reduction of CO2 emis- generated from business activities per
sions (business activities) consolidated sales with FY2016 at thebase year

Fiscal 2025

Fiscal 2033—

Cut 40%Cut 55%

Cut 40%——(Eco-Vision)

Reducing environmental impacts

Percentage of using renewable energy—

75%

90% orhigherReduction of using
energy per employee

Percentage of reduction of using energy per
employee with FY2022 as the base year—

Cut 3%—

Percentage of reduction of water consumption per production of reagents withFY2022 as the base year—

Cut 23pt

Cut 90pt

Percentage reduction of water consumption from business activities per consolidated sales with FY2016 at the base year

Cut 5%——

Resources recycled per total waste
generated

85% orhigher——Cut 10%Cut 5%

Cut 15%—

Recycling rate

Percentage of reduction waste generated
Reduction of total waste by business activities per consolidated
sales2

Strengthening governanceCompliance

Fiscal 2023

Ratio of renewableenergyReduction in
Reduction of water
environmental
consumption
burden through(main reagent factories)
business activities
Reduction of water
consumption (businessactivities)

Corporate
governanceTargetRatio of product waste
to salesRatio of products waste caused by expiry
and other reasons to consolidated sales——

Number of meetings
with investors andanalysts3

Number of meetings with institutional
investors and securities analysts——

Number of internalreports

Number of internal reports of incidents
received——

Number of unethicalincidents

Total number of incidents in which theviolations the law were found, and disciplinary actions were taken for the violation of the Global Compliance Code——

Number of information
security trainees4

Number of participants in information
security training (gross)——Participation rate indisaster drills4

Percentage of participants in training
using safety confirmation tool assuming
a disaster, etc. (including employees onlong-term leave)

—

—

—

Risk management

1. The shaded KPIs were added in April 2023. The items whose targets are displayed as “—” are monitoring items for which no targets are set.
2. Fiscal year for comparison: Fiscal 2019 for the fiscal 2023 targets and the results of each fiscal year, and fiscal 2022 for the fiscal 2025 and fiscal 2033 targets
3. Target: Sysmex Corporation on a non-consolidated basis
4. Target: Sysmex Group in Japan

65 Sysmex Report 2023

Results
Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

—

—

—

—

—

—

Cut 14%

Cut 17%

Cut 35%

Cut 35%

Cut 44%

Cut 55%

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Cut 8%Cut 7%Up 6%

Cut 7%

Cut 19%Cut 37%

89%

76%

67%

78%

79%

80%

—

—

—

Cut 8%

Cut 15%

Cut 27%

—

—

—

0.6%

0.6%

0.5%

—

—

—

506

485

597

32

14

11

12

28

21

—

9

7

5

14

9

—

—

—

2,720

3,601

4,900

—

—

—

98.7%

98.7%

99.4%

As a water consumption reduction target, we have
newly introduced the reduction of water consumption at main reagent factories, taking into accountfactors such as the uneven geographical distributionof water risks and the fact that the water consumption of product use is affected by our product portfolio more than by product improvement.
To achieve the targets of Sysmex Eco-Vision 2033,
we will work on the reduction of water consumption
by reviewing production processes of each businesssite and introducing new equipment for more efficient water use, as well as by using recycled water.
The waning impact of the COVID-19 pandemic increased in-person meetings, including visits by overseas investors to Japan and overseas briefings. We effectively utilized conferences hosted by securities firms
and other opportunities to hold individual and groupmeetings with a wide array of investors. Consequently,
the number of companies we met with increased bymore than 100 from the previous fiscal year.
In fiscal 2022, we had nine unethical incidents, none ofwhich was a serious violation. A total of 21 internal reports were received in Japan and from overseas. We
investigated and appropriately handled each incident.
Considering training and awareness-raising activities
for employees as the foundation for promoting andensuring compliance, we will continue to provide
periodic training opportunities for employees to ensure that they will act in accordance with the Global
Compliance Code.
In fiscal 2022, we conducted online cyber security
training in multiple languages for all our Group employees as well as temporary employees and independent contractors. We also provided training inhandling of spear phishing (BEC and phishing scams)
and held seminars on handling of emails to raise
employees’ awareness of information security.
We will continue to conduct regular employee training and strengthen the Group's information security
management system.
In fiscal 2022, we conducted disaster drills and training.
We will continue to enhance our response to risks
associated with business continuity by conducting regular drills and training, introducing a system
to check employees’ safety and creating rules andmanuals related to disaster response.

Sysmex Report 2023 66

Activity Report andCorporate Overview—

Corporate Governance—

Sysmex Eco-Vision 2033, starting in fiscal 2023,
has set a target reduction rate of CO2 emissions formore business offices than those covered by theprevious vision, as well as has introduced the reduction rate of energy use per employee and the ratio ofrenewable energy as new targets to raise each employee’s environmental awareness, reinforcing ourefforts to achieve carbon neutrality.
The rate of reduction in water consumption and therate of reduction in total waste (for the business sites
covered by Sysmex Eco-Vision 2025) in fiscal 2022
improved from the previous fiscal year by 18 percentage points and by 12 percentage points, respectively, due to increased sales.

Mid-Term Management Planand Initiatives—

The reduction rate of CO2 emissions generated bybusiness activities (at the business offices covered
by Sysmex Eco-Vision 2025) in fiscal 2022 improvedby 11 percentage points from the previous fiscal year.
This substantial reduction was attributable to theprogress of our switch to renewable energy.

Sysmex’s Value Creation—

Progress and Future Initiatives
About Sysmex

Fiscal 2017

Materiality

KPI1

TargetFiscal 2023

Fiscal 2025

75%

75%

Engagement score

Percentage of positive responses to engagement in the corporate culture survey

Turnover ratio

Turnover rate of regular employees (Ratio
for people who have left the organization
10% or less 10% or lessfor any reason, including layoffs, job cuts,
job changes, retirement age, etc.)

Self-turnover rate

Annual retirement rate for personal reasons

Return rate from parental
Return to work after parental leave
leave2————

Fiscal 2033
(Eco-Vision)

Increased
engagement

Creating an attractive workplace
Promotion ofdiversity, equity &inclusion

Percentage of men taking childcare leave2

Percentage of male employees (including
part-time workers) taking childcare leave
after their spouse bears a child

60% orhigher

65% orhigherFemale managers ratio

Ratio of women at director level or above

20% orhigher

20% orhigher

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

2.35% orhigher

2.65% orhigherFemale next generation Percentage of women in the manager
managers ratio
position in the Sysmex Group
Female associates, em- Female employees ratio in the Sysmex
ployees ratio
Group
Percentage of mid-career Percentage of mid-career recruitment
recruitment in managerial employees in managerial and professional
and professional positions2 positions
Male/female percentage
Female ratio in new graduates recruitamong recruits (new gradment, mid-career recruitmentuates and mid-career)2
Percentage of women
Ratio of women in the managements,
and non-Japanese naratio of foreigners in the managements
2tionals in management
Percentage of women in Ratio of women in management of groupmanagementcompanies including the head office
Salary inequality in
Gender ratio in average total compensamanagerial and profestion value (managerial and professionalsional positions (total
positions)
2compensation)
Salary inequality genGender ratio in average total compensaeral employees (totaltion value (general employees)
compensation)2

Percentage of employees with disabilities3

Percentage of employees with physical,
intellectual, or mental disabilities

1. The shaded KPIs were added in April 2023. The items whose targets are displayed as “—” are monitoring items for which no targets are set.
2. Target: Sysmex Corporation on a non-consolidated basis
3. Target: Sysmex Group in Japan
4. The figure disclosed in the previous fiscal year has been revised due to a change in the calculation method.

67 Sysmex Report 2023—

Results———

10.1%4

7.5%4

10.9%4

8.4%

—

—

—

—

—

6.8%

—

—

—

—

—

100%

—

—

—

31%4

53%4

62%

15.2%

15.2%

15.5%

16.2%

17.3%

19.5%
(except Russia)

—

—

—

—

—

32.1%

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

2.30%

66%
65%
(except EMEA) (except EMEA)

2.30%

2.31%

Fiscal 2022

71%

Progress and Future Initiatives
The Group’s engagement index of employees forfiscal 2022 rose by 6 percentage points from theprevious fiscal year to 71%, matching the average
engagement score of Fortune 500 companies. Highengagement is a key driver of the Group’s growth.
Our activities to instill the Sysmex Way in employees,
and safety measures and work style arrangements
during the COVID-19 pandemic, have boosted employee engagement in each region, achieving a 3
percentage point increase in China. The turnoverrate for fiscal 2022 dropped by 2.5 percentage
points from the previous fiscal year as a result of ourinitiatives to enhance human resource development
and review compensation systems in each region.
We will continue to improve employee engagement
by recruiting and training talented people, creating
a comfortable working environment and promoting
labor-management dialogues.
The percentage of men taking childcare leave in fiscal
2022 increased by 9 percentage points from the previous fiscal year. This significant increase was attributableto our various initiatives: setting targets in our actionplans under the Act on Advancement of Measures to
Support Raising Next-Generation Children and the Act
on the Promotion of Women’s Active Engagement inProfessional Life, helping employees balance parenting
and work, conducting continuous awareness-raising
activities to establish a comfortable working environment (holding round-table discussions for all domestic
employees and conducting seminars by internal andexternal lecturers and creating a guidebook for male
employees), encouraging managers to understandvarious work styles, and changing employees’ awareness of working styles by introducing the smart work
system. We will continue to take actions to increase
male employees taking childcare leave.

The female managers ratio in fiscal 2022 increasedby 2.2 percentage points from the previous fiscal
year. Factors in this increase include the appointment of more women as successors to key posi41.7%
tions, including positions on the management teamin the Asia Pacific region, the early promotion of
Newly graduated: women to management positions in EMEA, and an
35.9%
increase of female managers due to diversified caMid-career: 27.0% reer options resulting from the reform of the personWomen: 8.3% nel system in Japan.
Non-Japanese: 16.7% We will use the percentage of women and nonJapanese nationals in management, and the wage
differentials between male and female employees,
9.4%
along with other indicators, as new indicators formonitoring, while creating a working environment
93:100 that allows employees to work in diverse work styles
and providing diversity education.

41.8%

80:1002.31%

Although the number of employees with disabilities
increased (mainly at Sysmex Harmony Co., Ltd., a special
subsidiary of Sysmex), the percentage of employees withdisabilities remained at the same level due to the increase
in total employees resulting from our business expansion.
We will continue to create and identify tasks suitable for
persons with disabilities and consolidate such tasks toprovide more employment opportunities to those withdisabilities. We will also remain committed to creating roles
and a working environment that enable every employeeswith disabilities to use their unique traits as strengths.

Sysmex Report 2023 68

Activity Report andCorporate Overview

—

2.21%

Fiscal 2021

Corporate Governance

72%

2.04%

Fiscal 2020

Mid-Term Management Planand Initiatives

Fiscal 2019

Sysmex’s Value Creation

Fiscal 2018

About Sysmex

Fiscal 2017

Materiality

KPI1
Training time per
employee

Development of
human resources

Average training time per employee fortraining provided by HR and each division(including online training)

Value-added productivity
Value added per time(non-consolidated)2
Value-added productivity
Value added per capita(Group)Human resources deTotal investment in human resources
velopment investment
development and training
2(non-consolidated)
Human resources deTotal investment in human resources
velopment investment
development and training(Group)Total number of associates who took
Participation rate in traintraining each year divided by total num2
ing (non-consolidated)
ber of employees
Total number of associates who took
Participation rate in traintraining each year divided by total numing (Group)
ber of employees
Success plan effectiveRate of transfer to key positions
ness rate2
Succession coverage
Percentage of key positions that have a
rate2
successor candidate

Creating an attractive workplace

Total annual working
hours3

Total annual hours worked per regular
employeeTargetFiscal 2023

Fiscal 2025

Fiscal 2033
(Eco-Vision)

40.0 hours 40.0 hours——¥19.38million¥22.50
million¥234
million¥252
million——90% orhigher

90% orhigher

—

—

—

—

—

—

2,000
hours

1,980
hours
—

Promotion ofhealth and occupational safety

Percentage of days of
paid leave taken3

Percentage of days of annual paid leave
taken per regular employee

70% orhigher

75% orhigherLost-term injuries frequency rate3

Number of employee death or injuries
resulting from work-related accidents per
million hours actually worked

Less than
0.5

Less than
0.5

Lost work days rate3

Number of days absent from work due
to work-related injuries per 1,000 hours
actually worked

Less than
0.05

Less than
0.05

1. The shaded KPIs were added in April 2023. The items whose targets are displayed as “—” are monitoring items for which no targets are set.
2. Target: Sysmex Corporation on a non-consolidated basis
3. Target: Sysmex Group in Japan

69 Sysmex Report 2023

Results
Fiscal 2020

Fiscal 2021

Fiscal 2022

—

—

—

—

—

—

—

—

¥13,230

—

—

—

—

—

¥18.74
million

—

—

—

—

—

¥266
million

—

—

—

—

—

¥356
million

—

—

—

—

—

100%

—

—

—

—

—

100%

—

—

—

—

—

100%

—

—

—

—

—

218.9%

Progress and Future Initiatives

24.5 hours 31.4 hours 30.0 hours

—

2,030
hours

2,045
hours

2,022
hours

—

—

—

61.3%

62.4%

66.5%

—

—

—

0.78

0.91

0.81

—

—

—

0.05

0.04

0.05

Sysmex Report 2023 70

Activity Report andCorporate Overview—

The annual working hours in fiscal 2022 decreased by
23 hours from the previous fiscal year. The main factors in this decrease include alleviated staff shortages
as a result of aggressive recruiting activities, coupledwith innovation and business structure transformation efforts, reduced overtime hours resulting from ashift to more efficient work styles through the adoption of value-added productivity indicators, and anincrease in the number of paid leave days taken.
We will continue to reduce working hours by optimizing assignment through enhanced recruitment
efforts and actively conducting training and awareness-raising activities for employees in cooperation
with the labor union.
The percentage of days of paid leave taken in fiscal
2022 increased by 4.1 percentage points from theprevious fiscal year. To increase use of paid leave, we
set recommended dates for paid leave, shared paid
leave days actually taken by each employee with
their department heads, and actively encouraged
employees to take paid leave.
For fiscal 2023, we have introduced a target percentage
of days of paid leave taken. To increase the percentage,
we will improve productivity as well as raise employees’
awareness of the benefits of taking paid leave.
The lost-time injury frequency rate and the lost workdays rate for fiscal 2022 decreased by 0.1 percentage points and increased by 0.01 percentage points,
respectively.
There were six work-related accidents, including
injuries in factories (seven accidents in the previous
fiscal year). As a measure to reduce work-related accidents, employment health advisors gave employees guidance about how to prevent injuries.
We will continue to bolster and enhance our workplace safety and health management system under
the leadership of the Central Health and Safety
Committee, which supervises our Group companies
in Japan. In the event of a work-related accident, theHealth and Safety Committee of the business site
involved will investigate the causes, take necessary
actions, and share the causes and actions within theGroup to prevent its recurrence.

Corporate Governance—

The training time per employee in fiscal 2022 decreased by 1.4 hours from the previous fiscal year
(95.5% of the training time per employee in theprevious fiscal year). On the other hand, our Group
companies in Japan achieved a 100% training participation rate and invested 92,000 yen in training
per employee.
We will promote the development of human resources, including next-generation global leaders,by adding value-added productivity, investment in
human resource training, the rate of participationin training, and other indicators to the monitored
items, and by setting the rate of internal transfers to
new positions .

Mid-Term Management Planand Initiatives

Fiscal 2019

Sysmex’s Value Creation

Fiscal 2018

About Sysmex

Fiscal 2017

Stakeholder Engagement
Sysmex works alongside its business partners and employees to provide products and services to
medical institutions and other customers in an effort to resolve medical issues.
Going forward, through proactive dialogue with stakeholders, we strive to forge better relations.
In addition, by incorporating their expectations and requirements into our business activities, wewill enhance the effectiveness of our strategy and strive to realize a sustainable society.
Major Stakeholders
Stakeholders described outside the circle are categorizedaccording to our Shared Values. >>P6

Customers

Patients, health examinees, etc.

Community Medical institutions
and society and commercial labs

Society(including NPOs)
More than 8.0 billion
people aroundthe world

Governments
and public bodies
More than 190
countries and regions

Shareholders
Shareholders

Approximately
16,000More than 190
countries andregions

Employees

Employees
More than 10,000

Joint researchand development
partners
More than 200
themesDistributors
More than 600
companies

Suppliers
Approximately 250
companies(Key Tier 1 suppliers)

Business
Partners(As of the end of fiscal 2022)

Main Dialogue with Stakeholders (Fiscal 2022)>>Status of Sustainability Targets P63 >>Sysmex Sustainability Data Book 2023> Stakeholder Engagement P18

Customers

We engage in ongoing communication through sales and service and support activities, with the aim of instilling confidence in our customers and providing added value that exceeds their expectations. As a result, weearn high marks in customer satisfaction surveys.
 Established a 24/7 customer support center (separate contract required) Conducted customer satisfaction surveys
 Gathered feedback through VOC (Voice of the Customer), utilized in product development and quality
improvements
 Convened user meetings to communicate accurate product knowledge
 Held online scientific seminars (hybrid online/at-venue format)>>Customer Assessment in the United States P106>>Sysmex Sustainability Data Book 2023> Responsible Provision of Products, Services and Solutions P29

Employees

In Sysmex’s aim to achieve sustainable growth, in addition to recruiting, developing, and deploying humanresources tied to the Long-Term Corporate Strategy 2033, it is essential to promote DE&I and create an attractive workplace that is easy and rewarding to work in. We have set the engagement score on our corporate
culture survey, as one of our sustainability targets, and we are undertaking initiatives to achieve this target.
 Conducted corporate culture surveys (dialogues according to the results of the engagement score) Promoted the corporate philosophy of the Sysmex Group and introduced an internal award system Configured a global internal reporting system >>Sysmex Sustainability Data Book 2023>Compliance P79
 Held council meetings between labor and management>>Human Capital Strategy P53 >>Sysmex Sustainability Data Book 2023> Realization of an Attractive Workplace P38

71 Sysmex Report 2023

About Sysmex

We maintain ongoing dialogues to foster an understanding
among business partners of Sysmex’s business direction and policies, as well as to build trust-based relationships. For suppliers,
we are strengthening communication to realize a circular society,as well as establishing supply chain management in accordancewith our procurement policy.
 Communication through open innovation and alliances with
R&D partners
 Communication based on procurement policies
 Conducting CSR surveys of suppliers Holding meetings with sales distributors and visiting

CSR survey response rate
(primary suppliers of raw materials)

94%

Sysmex’s Value Creation

Business
Partners>>Sysmex Sustainability Data Book 2023> Strengthening of Supply Chain Management P36

Approx. 590 per year

Activity Report andCorporate Overview

We liaise and engage in dialogue with government agencies andinternational organizations with a view to the development ofhealthcare and the realization of a sustainable society. In addition,
we communicate with society at large through activities aimed atmeeting the needs of communities around the world, based on
our Policy on Corporate Citizenship Activities and Philanthropy.
 Collaborated with government agencies and international organizations
 Participated in industry groups Engaged in Group corporate citizenship programs, including
the Sysmex Gives Back Campaign (such as employee blood
donations, environmental activities, helping to eradicate cancer, and support for pediatric patients and orphans, etc.) Supported activities in various regions in relation to the spreadof COVID-19

Meetings with institutional
investors and analysts

Corporate GovernanceSociety

Mid-Term Management Planand Initiatives

Shareholders

Sysmex recognizes that IR activities are important to achieving
sustainable growth and medium- to long-term increases in corporate value. We strive to disclose information proactively and quickly
share internally the evaluations and requests that we receive in thecourse of dialogues with shareholders and investors, and to reflect
this information in our management and IR activities. As in the previous fiscal year, opportunities for dialogues with global investors
increased significantly due to the use of online communications.
	Holding of the Ordinary General Meeting of Shareholders• Voting rights executed in writing or via the Internet
 Information disclosure• Proactively disclosed voluntary information such as operating
performance by destination, type of business, and product type
 Dialogues with institutional investors and analysts• Held business results briefings and conference calls• Held IR meetings: Sysmex management visited the Americas,
Europe, and Tokyo to engage in dialogues related to our longterm management goals, mid-term management plan, business model, R&D, shareholder returns, ESG, and other topics.
• Holding of IR events: Each year we hold a technology presentation, in which people in charge of R&D divisions provide explanations about R&D progress. In addition, to foster a deeper
understanding of our management strategy and business activities, we conducted facility tours and tours of offices in Japanand overseas. (postponed in fiscal 2022 due to COVID-19)• We provide English-language materials, including scripts, ateach event.
● Dialogues with individual shareholders• Provided information through our shareholder newsletter and website• Held business office tours (suspended in fiscal 2022 due to COVID-19)

Employees participating in Group
corporate citizenship programsMore than 7,000 per year>>Sysmex Sustainability Data Book 2023> Corporate Citizenship Activities P55

Sysmex Report 2023 72

Corporate Governance
Sysmex recognizes that reinforcing corporate governance is an importantmanagement issue. Based on the “Sysmex Way,” the corporate philosophyof the Sysmex Group, we are working to maximize the corporate value ofthe overall Group by enhancing management soundness and transparency
and increasing management speed and efficiency.

73 Sysmex Report 2023

Message from Outside Members of the Managing Board

About Sysmex
Sysmex’s Value Creation
Mid-Term Management Planand Initiatives

Member of the Managing Board (Outside),
Independent Director
Chairperson of the Nominating Committee andmember of the Compensation Committee

Please share with us your evaluations of fiscal 2022,
and describe your particular monitoring focus.

team regarding factors such as the COVID-19 lockdowns
and the Chinese government’s procurement policies, andwe recommend developing more refined risk scenariosand corresponding strategies. Second, we are focusing
on growth investments in the fields of immunochemistry
and life science, and on new businesses. While the future
results look promising, establishing these areas as key
revenue sources is a work in progress, and appropriate
investments are essential. Our third focus is on prioritizing
the cost effectiveness of DX investments and initiatives for
digital businesses that contribute to top-line growth. We
believe there is room for improvement in IT governance,
including refining investment plans and measuring theireffectiveness.
Ota: That’s right. We are also having energetic discussions
within the Managing Board about verifying the effectiveness of investment in general. Four years have passed
since I was first appointed as an outside member of theManaging Board, and the medical robotics business has
always been a focus. As this is a long-term project, formulating a profit plan is not easy, but we recommend flexibly
applying a plan to recoup investment and verify its contribution to corporate value using ROIC and other methods.

Ota: Fiscal 2022 was the second year of our mid-term
management plan (fiscal 2021–2023), and things went
generally according to plan. Among the highlights, Sysmex
received regulatory approval of our reagent to test for
Alzheimer’s disease, and insurance coverage was expanded in the medical robotics business. Performance was also
in line with the growth trajectory outlined in the mid-term
management plan, helped by foreign exchange, and theGroup was affected by changes in the environment withrespect to China and Russia.
I think Sysmex is on a growth mission, and I give theGroup high marks for its agile response to changes in theexternal environment and its ability to continue making
strategic moves for the future.
Fukumoto: I generally concur with Mr. Ota. We focused
specifically on three monitoring items. First, we have beenclosely monitoring risk responses in our China operations.
The Managing Board regards China as a significant market
with growth potential, despite the complex risks it entails.
We have received detailed reports from the executive

Sysmex Report 2023 74

Activity Report andCorporate Overview

Kazuo Ota

Member of the Managing Board (Outside),
Independent Director
Chairperson of the Compensation Committee andmember of the Nominating Committee

Corporate Governance

Hidekazu FukumotoFiscal 2022 also marked the appointment of
President Asano. What do you think of the personnel changes on the Board?
Fukumoto: On the Managing Board, we consider Sysmex’s
ability to leverage its accumulated R&D capabilities andtechnologies for growth to be crucial as we discuss longterm business strategy. Given that President Asano has experience in R&D and business development and has playeda central role in formulating Sysmex’s Long-Term Corporate
Strategy 2033 (VA33) and mid-term management plan, I
believe he is well-suited for the top management position. I
think this personnel decision is also timely. The Nominating
Committee and Managing Board had no objections to his
appointment. At the same time, we were in consensus that
Chairperson Ietsugu should provide support as Group CEO
in order to drive strong growth and ensure the success of
VA33 and the mid-term management plan.
Ota: Mr. Fukumoto and I were both appointed as membersof the Nominating Committee in fiscal 2022. We recognized that succession planning was an extremely importantmanagement issue for Sysmex, and that the executive
team wanted to select the next president from within theGroup. That would help ensure that the incoming president
would have a good understanding of the transformationand evolution that had taken place to date.
President Asano is full of curiosity, and I consider him,
like Chairperson Ietsugu, to be a capable leader with astrong desire for growth. That said, as Sysmex plans tomake more aggressive investments in the future, I believe
it will be necessary to strengthen governance further under
the new management structure.

What are your expectations for Sysmex’s LongTerm Corporate Strategy 2033 (VA33), and whatissues do you foresee?
Fukumoto: When formulating VA33, outside members of
the Managing Board had regular opportunities to shareand discuss the strategy’s outline from its early stages. We
imagined various scenarios for future changes in the operating environment and prioritized strategies that emphasize
the sharing of value with stakeholders and society.
Ota: VA33 is also a declaration to employees and otherstakeholders that Sysmex is transforming and expanding

75 Sysmex Report 2023

its business domain from in vitro diagnostics (IVD) to thebroader healthcare journey. We believe this statement,
which coincided with the appointment of the new president, was effective in demonstrating Sysmex’s determination to take on new challenges.
We have high expectations that the clear and ambitious goals of our strategy will bring significant value to society. That being said, achieving these goals, including thenumerical target of ¥1 trillion in net sales, will not be easy.
We have painted a beautiful picture; now the execution
is crucial. As we expand into new territories, risks will also
grow, so it is important to constantly evaluate Sysmex’s
progress, achievements and challenges.
Fukumoto: In that sense, I believe the key to achieving
VA33 lies in speed and the ability to execute it. Whether
expanding in the hemostasis field or cultivating the Indian
market, Sysmex will have numerous business opportunities
that can contribute to revenue growth in the coming years.
The Group needs to set specific and appropriate KPIs andmilestones, and continuously implement the PDCA cycle.
Even if Sysmex was not aiming for double-digit growthand net sales of ¥1 trillion, it could surely achieve growthin its existing areas. But setting high targets and achieving
discontinuous growth requires creativity. Unlike in the past,prioritizing investments in capital and human resources
becomes crucial, and there may be cases where we needto review projects and decide to withdraw from them. As
members of the Managing Board, we also need to examine the effectiveness and feasibility of KPIs and milestones,
and engage in monitoring and discussions from a highlevel perspective.
Ota: Mr. Fukumoto’s remarks remind me how importantmonitoring will be. To date, Sysmex has been able toexpand by competing in growing markets and providing
products and services that meet customer needs. Moving
forward, the Group will need to hold discussions fromdiverse perspectives, including business cultivation anddevelopment and risk measurement. As outside membersof the Managing Board, we will need to involve ourselvesin discussions even earlier than before. Engaging in multifaceted discussions should enable us to establish appropriate monitoring items. I believe management and strategy
founded on such discussions are essential to achieve thelevel of governance stakeholders require.

About Sysmex
Sysmex’s Value Creation
Activity Report andCorporate Overview

Sysmex Report 2023 76

Corporate Governance

Ota: The word “governance” has a broad meaning, and it
is also the very essence of management. Some may thinkthat strengthening governance conflicts with management speed and efficiency. In reality, though, companies
that have strengthened their governance can expect tocontrol risks better and increase their chances of long-term
growth. As a general direction, we aim for Sysmex to be acompany that strives to strengthen governance, involving
not only the management team but the entire organization.
Fukumoto: I agree. Strengthening and evolving governanceis not an end, but rather a means to achieve our vision anddrive growth. Sysmex’s governance must constantly evolve inorder to make its plans a reality. I have followed Sysmex since
my days in the banking sector, and I have recognized its commitment to improving governance. Even since my appointment as an outside member of the Managing Board, Sysmex
has consistently worked on improving areas of concern. As
an example, in fiscal 2023 Sysmex appointed outside members of the Managing Board to chair both the Nominating
Committee and the Compensation Committee. While thesecommittees have always been forums where each member
has an active voice, the appointment of outside members
as chairpersons increases transparency and responsiveness,reflecting society’s expectations and demands.
Ota: Against this backdrop, I have been appointed chairperson of the Nominating Committee, and I recognize that thiscommittee’s role will become even more significant going
forward. Sysmex experienced growth under the strong
leadership of Chairperson Ietsugu, and he played a key role
in appointing people to executive positions. However, as thebusiness environment becomes more complex and uncertain, and as our scope of operations expands, we need to
identify and select candidates for executive positions withdiverse perspectives. We have to broaden our focus beyond
top management and extend it to the executive officer level, while also building a succession plan. As indicated by theJapanese government’s guideline of having female executives account for 30% or more, diversity among members of
the Managing Board and executive officers is an important
topic. We will continue to discuss the policy and framework
for appointing female and non-Japanese executives.

Fukumoto: On the Compensation Committee, which I havebeen appointed to chair, we have been discussing how torevise and strengthen evaluation indicators, such as theachievement of medium- to long-term plans and sustainability activities, in line with the promotion of VA33 and the
mid-term management plan.
Sysmex has a relatively high proportion of performance-linked and non-monetary compensation, accounting for 70% or more of the total, for internal members of
the Managing Board. The content of individual performance evaluations also continues to evolve, incorporating
non-financial aspects. Moving forward, Sysmex intends
to systematically organize evaluation criteria and actively
consider ways to share them explicitly and concretely
with our stakeholders.
Ota: Dialogue is also very important. Last year, I had theopportunity to engage in discussions with investors. These
discussions were fruitful, as we were able to establish acommon understanding of the challenges Sysmex faces
and confirm investors’ views. Moving forward, I hope toparticipate as much as possible in such opportunities for
dialogue, as long as there is interest.
Internal dialogue is also vital. As an outside member ofthe Managing Board, my role is to objectively oversee management and provide support to the executive team basedon my previous background. For example, I have a wealthof experience—including failures—in areas such as global
production and procurement. These are categories in which
Sysmex will need to progress. I look forward to engaging invarious discussions and exchanging opinions in these areas.
Fukumoto: Outside members of the Managing Board haveopportunities to interact with employees at the officer anddivision head levels, as well as people at research laboratories, factories, and other worksites. We also hear candid
opinions during events such as luncheons. Although thismakes for a lot of input and a busy schedule, I feel that itprovides us an effective environment in which to fulfill our
responsibilities as outside members of the Managing Board.
Going forward, I will continue to communicate with passion
to both internal and external stakeholders, actively seek
their views, and utilize those perspectives to enhance management. As an outside member of the Managing Board, I
am committed to sharing the joy of creating value for society and fostering growth together with all employees.

Mid-Term Management Planand Initiatives

What are your views on reinforcing governance, including your aspirations as committee chairpersons?

Corporate GovernanceManagement Organization

In its efforts to shore up corporate governance over theyears, Sysmex has established an Audit and Supervisory
Committee, enhanced the Managing Board’s supervisory
function through the introduction of outside members,
and evaluated the Managing Board’s effectiveness. We
also established a Compliance Committee and an internal reporting system, augmented a Groupwide risk
management function, and engaged in other initiatives tostrengthen our base with a view to sustainable growth.

Sysmex has adopted an Audit and Supervisory
Committee. Managing Board members who are also
members of the Audit and Supervisory Committee havevoting rights. This arrangement reinforces the Managing
Board’s audit and supervisory functions, as well asheightening management transparency and objectivity. In addition, we have appointed outside membersof the Managing Board, thereby strengthening the Corporate Governance Structure

Shareholders’ Meeting
Election/Dismissal
Managing Board
Members of the Managing Board(Excluding members of the Audit
and Supervisory Committee)

Election/Dismissal

Auditing/
Supervision

Election/Dismissal

Audit and Supervisory Committee
Members of the Managing Board(Members of the Audit andSupervisory Committee)

Cooperation

Compensation Committee
Business Execution

Chairperson
President

Cooperation

Accounting
Auditing

Internal Control Committee

Global Strategy Committee

Executive Officers

Steering Committee

Divisions,
Subsidiaries and Affiliates

Accounting Auditors

Internal Audit OfficeNominating Committee

Compliance Committee

 Advances in Corporate Governance(Fiscal Years)’04 ’05 ’06 ’07 ’08 ’09 ’10

’11

’12

’13

’14

’15

’17

’18

’19

’21

’22

2023.4—

Executive officer system

Management
organization

From April 2020
Internal Control Committee
Chief officer system (CEO)Term of office formembers of
the Managing Board

One

Ratio of outside
members of
the Managing Board

14%
From June 1995
One (out of
three serving
corporate officers)

From April 2018
System enhancement

One year(Two years for members of the Audit andSupervisory Committee)

Two years

Outside members
the Managing Board

Corporate auditors(Outside)’20

From June 2016
Company with an Audit and Supervisory Committee

Company with a Board of Corporate Auditors
From April 2005

’16

11%

Four

30%

33%

Five

41%

From June 2006
Two (out of four serving corporate auditors)

Nominating Committee(Ratio of outside members)

From April 2005
Chairperson: Internal member of the Managing Board(0%)

Chairperson: Internal memberof the Managing Board(25%)

Chairperson: Independent
outside member of theManaging Board (57%)

Compensation Committee(Ratio of outside members)

From April 2005
Chairperson: Internal member of the Managing Board(0%)

Chairperson: Internal memberof the Managing Board(25%)

Chairperson: Independent
outside member of theManaging Board (57%)

77 Sysmex Report 2023

Chairperson: Internal member of the Managing Board (57%)
Chairperson: Independent outside member of the Managing Board (57%)

Effectiveness of the Managing Boardn Overview of Effectiveness Evaluation

 Major Boards
Organization

Function and Content

Meetings Heldin Fiscal 2022

Composition

Deliberates on important matters related to
management

Nominating
Committee

A Managing Board advisory body involved in
executive appointments

Compensation
Committee

A Managing Board advisory body involved withdecisions on executive compensation

18

Chairperson and Group CEO, President,
members of the Managing Board (1), outside members of the Managing Board (4)Chairperson and Group CEO, President,
members of the Managing Board (1), outside members of the Managing Board (4)Members of the Audit and Supervisory
Committee
Chairperson and Group CEO, President,
senior executive officers, member of the
Audit and Supervisory Committee* (1)Chairperson and Group CEO, President,
executive officers, member of the Audit
and Supervisory Committee (1)

3

2

18

11

16

* Participates as an observer

 Members of Major Boards (As of June 23, 2023)
Board
Name

Internal
External

Hisashi Ietsugu
Kaoru Asano
Kenji Tachibana
Iwane Matsui
Hiroshi Kanda*1
Tomokazu Yoshida
Takashi Ono
Tomoo Aramaki
Masayo Takahashi
Kazuo Ota
Hidekazu Fukumoto
Kazumasa Hashimoto
Michihide Iwasa

Rate of Attendance at
Meetings of the Managing
Board

Rate of Attendance
at Meetings of theNominating Committee

100%
100%
100%
100%
100%
100%
—*2
100%
88%
100%
100%
100%
100%

100%
100%
100%
—
—
—
—
—
—
100%
100%
100%
100%

Rate of AttendanceRate of Attendance at
at Meetings of the
Meetings of the Audit andCompensation Committee Supervisory Committee

100%
100%
100%
—
—
—
—
—
—
100%
100%
100%
100%

—
—
—
—
—
—
—
100%
—
—
—
100%
100%

Note: Rates of attendance are for fiscal 2022. *1 Stepped down in June 2023 *2 Member from June 2023

Sysmex Report 2023 78

Activity Report andCorporate Overview

Independent institution for auditing the execuAudit and Supervisorytion of operations, mainly by members of theCommittee
Managing Board
Deliberates on and discusses medium- to longGlobal Strategy
term Group management directions, importantCommittee
strategies and issues
Discusses and reports on projects that are imporSteeringtant from the perspective of making progress on
Committee
the Group fiscal yearly plan

Members of the Managing Board

Corporate GovernanceManaging Board

Mid-Term Management Planand Initiatives(Composition)
The scale of the Managing Board and the ratio of outside members of the Managing Board are generally>>Website >About Sysmex >Corporate Governance

Sysmex’s Value Creation

The Managing Board is composed of members having
diverse knowledge, experience and expertise. We strive
to ensure appropriate diversity and scale, taking into account the overall balance of the Managing Board.
To enhance the functions of the Managing Board,
we conduct an annual document-based questionnaire
survey of all members of the Managing Board (including members of the Audit and Supervisory Committee)
and deliberate on the Managing Board’s effectiveness.
The questionnaire survey conducted in fiscal 2022
confirmed that the Managing Board is functioning effectively and fulfilling its role appropriately. In addition,
we have recognized the need for a continued response,
undertaking initiatives to further enhance effectiveness.

About Sysmex

board’s supervisory function. Furthermore, we haveintroduced an executive officer system to accelerate
decision-making on business execution and respondswiftly to changes in the business environment. The
Company currently has 12 members on the Managing
Board (of whom five are outside members). Also,
three board members are members of the Audit andSupervisory Committee. (Two members of the Audit
and Supervisory Committee are outside members of
the Managing Board.) The Company also has 16 executive officers (of whom four concurrently serve as members of the Managing Board). We have also establishedthe Nominating Committee and the Compensation
Committee as advisory bodies. In fiscal 2023, an independent outside member of the Managing Board was
appointed as the chairperson of the Managing Board.
The Company implements all the principles of theTokyo Stock Exchange’s Corporate Governance Code.

appropriate, both in nature and level of experience. To
further enhance the Managing Board’s effectiveness, inaddition to achieving a balance between knowledge, experience, and capabilities, the Company will continue toconsider ensuring diversity, including gender, nationality,
career history, and age, such as by increasing the ratioof women and foreign nationals on the Managing Board.
(Operation)
The provision of information necessary to discuss theManaging Board’s agenda is generally appropriate. The
Company is continually working to improve the Managing
Board’s operation through the distribution of materials
and the provision of explanations, as necessary, to outside members of the Managing Board, organizing points
at issue, and providing related information necessary tounderstand their background. Among efforts to encourage more active deliberation, we hold opinion exchange
meetings attended only by outside members of theManaging Board. Providing materials more quickly, anissue raised previously, was improved from the previous
fiscal year, and we will continue to work on this issue.
(Agenda and Deliberation)
The time allotted for addressing and deliberating theManaging Board’s agenda is appropriate, and we strive toprovide individual members of the Managing Board withan understanding of agenda items and information prior
to meetings, as well as to leverage their knowledge andexperience to engage in deliberation. Decision-making
on items of management importance is conducted appropriately, taking into account the objective and rational
opinions of outside members of the Managing Board.

n Major Managing Board Agenda Items and Reporting Items(Fiscal 2022)lA ppointments and dismissals of members of theManaging Board, compensation-related matterslR eports on the status of business execution by membersof the Managing Boardl Evaluation of the Managing Board’s effectivenesslA udit policy, audit plan, and audit implementation report(members of the Audit and Supervisory Committee)
l Corporate governance policyl Matters related to the Group’s internal control
l Matters related to sustainabilitylG roup operating performance; quarterly, semiannual, andannual resultsl Matters related to promoting DX in the Groupl Matters related to long-term strategy and investment

Effectiveness of the Audit andSupervisory Committee
Members of the Audit and Supervisory Committee
attend important meetings, such as meetings of theManaging Board; browse approval documents; audit subsidiaries; exchange opinions with members of
the Managing Board; and conduct other activities toconfirm the status of business execution by membersof the Managing Board. The Audit and Supervisory
Committee conducts audits using the Company’s internal control system and other methods. The committee
works closely with the accounting auditors to confirm
the accounting audit plans and results, and internal
controls related to financial reports, exchanging information and opinions.

 Skill Matrix for Members of the Managing Board (As of June 23, 2023)
Knowledge and experience
Name

Internal
External

Hisashi Ietsugu
Kaoru Asano
Kenji Tachibana
Iwane Matsui
Tomokazu Yoshida
Takashi Ono
Tomoo Aramaki
Masayo Takahashi
Kazuo Ota
Hidekazu Fukumoto
Kazumasa Hashimoto
Michihide Iwasa

InitialGender Year appoint- Independent Corporate Management
manage- and business Global
ment
ment
planning

M
M
M
M
M
M
M
F
M
M
M
M

1949 1986
1958 2014
1957 2014
1961 20191964 2021
1965 2023
1966 2022
1961 2016
1955 20191955 2021
1953 2020
1956 2020







¡
¡
¡
¡


















Sales ResearchandProduction/
and
SCM
service development

IT/DX



















Human
Finance/reaccount- sources/ing
generalaffairs




























Note: The above represents the main skills and experience of each Member of the Managing Board and does not represent all skills and experience.

 Definition of skills and experience
Item
Definition
Corporate management Management experience as a representative, executive director, executive officer, etc. at a company, organization, etc.
Management andExperience and knowledge of management planning, business strategy, planning, promotion, etc. as a practicing, managing, orbusiness planning
executive officer in charge, etc.
GlobalExperience of overseas assignment
Experience and knowledge of domestic and overseas sales, marketing, technical services, etc. as a practicing, managing, orSales and service
executive officer in charge, etc.
Research andExperience and knowledge of technology strategy, technology and product development, IT development, intellectual propdevelopment
erty, etc. as a practicing, managing, or executive officer in charge, etc.
Experience and knowledge of production, procurement, logistics, quality, etc. as a practicing, managing, or executive officer in
Production/SCM
charge, etc.
IT/DX
Experience and knowledge of IT/DX, etc. as a practicing, managing, or executive officer in charge, etc.
Experience and knowledge of accounting, fi nance, business administration, etc. as a practicing, managing, or executive officer
Finance/accounting
in charge, etc.
Human resources/
Experience and knowledge of human resources, labor affairs, human resources development, diversity, legal affairs, compliance,
general affairs
etc. as a practicing, managing, or executive officer in charge, etc.
Note: Judgment is made based on whether or not the Member of the Managing Board has a total of about three years of experience in each of the items
stated on the left.

79 Sysmex Report 2023

Principal matters considered by the Audit andSupervisory Committee in fiscal 2022 included the appropriateness of audit policies and plans, the preparationand operations of the internal control system, and methods and results of audits by the accounting auditors.

Executive Compensation

Mid-Term Management Planand Initiatives

Compliance

Compensation for members of the Managing Board(excluding members of the Audit and Supervisory Committee and outside members of the Managing Board)

Non-monetary compensation: 4%• Compensation as a medium- to long-term incentive (Company shares purchased in
specific monthly amounts through an officer shareholding association system)• Other share compensation (such as stock options)

Corporate Governance>>Sysmex Sustainability Data Book 2023 >Compliance P79

 Breakdown of Executive Compensation (Fiscal 2022)

Fixed compensation: 27%

Sysmex’s Value Creation

Compensation for members of the Managing Board
makes a clear link between operating performanceand responsibility for achievements. Compensation formembers of the Managing Board (excluding membersof the Audit and Supervisory Committee and outside
members of the Managing Board) is divided into threebroad categories: fixed compensation, performancelinked compensation, and non-monetary compensation.
Fixed compensation comprises compensation formembers of the Managing Board and compensation forbusiness execution. Position-specific factors (related tothe scale of responsibility of members of the Managing
Board, as well as the degree of their impact on Groupmanagement) are used to determine disbursements.
Performance-linked compensation is linked to consolidated operating performance for the Group, using profit
attributable to owners of the parent as an indicator. This
indicator refers to net earnings for the consolidated fiscal
year (sales net of expenses and profit or loss), which theCompany considers an appropriate indicator for performance-linked compensation. As non-monetary compensation, Sysmex encourages officers to acquire Company
shares. Sysmex’s aims to enhance corporate value
from a shareholder perspective, boost the incentive toenhance corporate performance over the medium- to

About Sysmex

long-term, and augment personnel retention.
A certain portion of fixed compensation for members of the Managing Board and executive officers isapplied toward the purchase of the Company’s stock.
The Company aims for the Chairperson and Group CEO
to hold shares worth five times his fixed compensation,and for other members of the Managing Board andexecutive officers to hold shares worth twice their fixedcompensation, holding the acquired shares during theirterms of office. As of March 31, 2023, the Chairperson
and Group CEO held 614,000 shares (104 times his fixedcompensation), and other members of the Managing
Board and executive officers (those who hold shares)
held an average of 17,000 shares (7 times their fixedcompensation). >>Shares Held by Individual Directors P85
Compensation for members of the Managing
Board who are members of the Audit and Supervisory
Committee, and outside members of the Managing
Board, comprises fixed compensation only.
The Managing Board has delegated to the
Chairperson and Group CEO the task of determining
individual compensation and specific details of compensation for members of the Managing Board (excluding
members of the Audit and Supervisory Committee).
The Managing Board confirms the appropriateness ofthe process for determining officer compensation andcompensation amounts via the Audit and Supervisory
Committee. This committee has three members (ofwhom two are outside members of the Managing Board).

Performance-linked compensation: 69%

Performance-linked compensation amounts are multiplied by a variable compensation factor within 3%
Standards for Position-specific factors (related to thescale and responsibility of members of the of profit attributable to owners of the parent to determine the total amount of variable compensation,
Payment
Managing Board, as well as the degree of which is disbursed on an individual basis in accordance with success.
their impact on Group management) areused to determine disbursements.
Note: A certain portion is applied toward
the purchase of Company stock

Share purchase amounts or numbers of shares are based on position-specificfactors (related to the scale and responsibility of members of the Managing
Board, as well as the degree of their impact on Group management).

Members of the Audit and Supervisory Committee and outside members of the Managing Board
Fixed compensation: 100%

(Compensation for members of the Managing Board only) Actual Executive Compensation (Fiscal 2022)

(Millions of yen)Amount of compensation by type
Numberof execTotal
Fixed
Performance-linked Non-monetary utives receiving
compensationcompensationcompensationcompensation compensation

Executive category

Members of the Managing Board (excluding membersof the Audit and Supervisory Committee and outside
members of the Managing Board)
Members of the Audit and Supervisory Committee(excluding outside members of the Managing Board)
Outside members of the Managing Board

707

194

485

27

6

21

21

—

—

2

36

36

—

—

5

 Executives Receiving Total Compensation of ¥100 Million or MoreName

Executive category

Company
category

Hisashi Ietsugu

Member of theManaging Board

Submitting
company(Millions of yen)Amount of compensation by type
Fixed
Performance-linked
Non-monetarycompensationcompensationcompensation

52

171

6

Total
compensation

230
Sysmex Report 2023 80

Activity Report andCorporate Overview• Compensation for members of theManaging Board• Compensation for business execution

Risk Management
Our Perspective on Operating Risks
Sysmex is responsible for the steady provision of products and services to customers in more than 190 countries and regions around the world, ensuring that testing
operations (which are essential to healthcare) are notinterrupted. For that reason, we have formulated countermeasures from a short- to long-term perspective
to ensure that operations continue under any circumstances. In addition to risks related to economic trends,
we consider natural disasters, climate change, and otherenvironmental and geopolitical risks. We also consider
increasingly stringent healthcare restrictions in individual
countries, the emergence of product quality issues, andinformation leaks to be important risks. Risk management also supports our ongoing growth. By responding
swiftly in a rapidly changing operating environment, we
strive to earn the support of our stakeholders and tomaintain or increase our position in the market.

Risk Management Structure
In fiscal 2020, Sysmex established an Internal Control
Committee tasked with overall internal control andrisk management. In addition to strategic risks, thiscommittee promotes management related to overallrisks. Members of this committee, which is chaired by
the president and member of the Managing Board, Principal Operating Risks
Risks

Fluctuations in economic trends

Exchange rate fluctuations

Major Content

 Delays or postponement of purchases due to deteriorating healthcare
finances of national governments and shrinking budgets for healthcare
facilities Soaring prices and rising interest rates around the world Overseas business accounting for more than 80% of total Group sales Growth in sales in emerging markets leading to a higher proportion of sales
taking place in non-key currencies

Key Environmental
Factors

External

External

Acceleration of healthcare system reforms
and increasingly stringent healthcare laws
and restrictions Intensifying competitive environment due to government and medical
institutions' efforts to optimize medical expenses and introduce stricter
procurement policies
 Delays in business promotion and the introduction of new products to themarket due to longer times to acquire regulatory approval

External

Risks related to intellectual property rights

 Intellectual property disputes arising from infringement by third parties ofintellectual property rights held by the Company or unexpected infringement of intellectual property rights held by third parties

Internal

Revisions to our business model due tochanges in the market environment Hematology field accounting for a high percentage of sales and profits

Internal

Emergence of quality problems related to
products or services

 Major impacts, such as erroneous testing results

Internal

Climate change and otherenvironmental risks Disruption of raw material procurement and logistics networks due to largescale wind and flood damage, droughts, and severe impacts on biodiversity
 Tighter environmental restrictions on import tariffs and bidding conditions

External

Disaster, severe accidents, geopoliticalproblems, or other occurrences that
disrupt product supply Damage to manufacturing facilities and the stoppage of production activities due to severe accidents, such as natural disasters and fires Obstacles to the procurement of substances if suppliers suspend operations Suspension of distribution and stoppage of production activities due togeopolitical issues

External

Information security risks Impact on operations due to information leaks such as cyber threats andnetwork breakdowns Network failure in a customer’s facility due to cyberattacks via the
Company’s productsInternal

M&A-related risks Impact on strategies and operating performance if the results of M&A fall
below expected levels

Internal

The spread of infectious disease or
emergence of other risks that could
substantially affect business activities The impact on operations of global pandemics such as COVID-19 and otherunknown infectious diseases

External

Compliance infringements Compliance infractions of laws and regulations

Internal

81 Sysmex Report 2023

>>Sysmex Sustainability Data Book 2023 > Risk Management P84

Principal Responses

Corporate Governance
Activity Report andCorporate Overview

Sysmex Report 2023 82

Mid-Term Management Planand Initiatives

 We continuously monitor and analyze changes in the market environment inl Deterioration in consolidated Group performance due
each country or region.
to increased costs, such as for equipment purchases
We take appropriate measures to improve efficiency and create value-addedor raw materials.
products and services Finance divisions and local subsidiaries minimize risks through forward exl Worsening of the Group’s consolidated operatingchange contracts.
performance We have globally diversified our reagent production functions.
 We provide highly productive products and services that help make healthcare
management more efficient.
● Loss of market acquisition opportunities and increased price pressures, and worsening of the Group’s  We have established production systems and procure parts and raw materials
in accordance with national and regional policies.
consolidated operating performance due to higher
costs to respond Regulatory Affairs Department and local subsidiaries to understand the latest
laws and regulations to establish optimal systems.
l Decrease in market share and brand strength due to We conduct thorough intellectual property training, particularly for employees
leakage of in-house technology
in R&D divisions.
l Litigation costs and compensation for intellectual
 We work to reduce the likelihood of third-party intellectual property disputes.
property disputes
 We are expanding our business portfolio outside of hematology.
 We provide products and services that meet the needs of countries and rel Worsening of the Group’s consolidated operating
gions with weak medical infrastructures.
performance We are accelerating development by establishing growth drivers.
 We comply with individual countries’ laws and regulations, as well as international
restrictions, and we have created structures for maintaining and enhancing quality.
l Increasing cost of response and decline in corporate  We have enhanced our operational and design quality, bolstered mass-production
quality, and reinforced our systems for checking quality prior to market launch.
creditworthiness and brand power We hold supplier presentations aimed at increasing the quality of the materials
and parts we procure.
 We have endorsed the TCFD recommendations, and we assess and managel Suspension of product supply leading to a decline inclimate-related risks and opportunities based on the TCFD framework.
sales and an inability to fulfill our supply responsibilities, leading to a decline in corporate value We have set carbon neutrality targets for 2040 based on the SBTs, and we areaccelerating efforts to achieve them.
l Increasing cost of response We have introduced seismically isolated structures at instrument factories,
diversified our reagent production function globally, and created a system ofl Suspension of product supply leading to a decline inmutual supply.
sales and an inability to fulfill our supply responsibilities, leading to a decline in corporate value We procure materials and parts from multiple companies and maintain stockpiles. We also conduct CSR surveys of our business partners.
 We are strengthening internal controls, such as rigorous user management
access restrictions.
 We are implementing mechanisms for detecting unauthorized network accessl Halt of business activities and a decrease in corporate
and isolating malware.
creditworthiness We monitor security 24 hours a day.
 We have established the Computer Security Incident Response Team (CSIRT).
 We have established the Product Security Incident Response Team (PSIRT).
 We conduct thorough prior audits, both of the market environment and from al Worsening of the Group’s consolidated operating
financial perspective.
performance and review of business strategies
 We configure administrative structures for management and finance.
l Halt of business operations due to enormous damage to  We have configured a global risk management structure (such as reinforcing
our BCP), aimed at reducing damage and facilitating an early recovery of busiGroup facilities and infrastructure, or injuries to people
ness activities.
l Deterioration of operating performance and cash flow We have built an infrastructure capable of responding flexibly to emergencies
due to a halt in medical institutions’ operations and(such as by introducing remote working).
decreasing testing demand We prevent infections from spreading by building testing structures involvedl Substantial downturn in productivity due to difficultyin the development and sale of reagents and the opening of labs to provide
in continuing or maintaining human resources and theassay services.
working environmentl Halt of business activities and a decrease in corporate  We provide comprehensive employee education.
creditworthiness We have put in place a global internal reporting system.

Sysmex’s Value Creation

Main Impacts if Risks Materialize

were able to respond flexibly throughout the supply chain
to supply products to our customers without interruption.
In addition to strengthening internal measures for
information security, we have established a Product
Security Incident Response Team (PSIRT) and arepromoting cyber security measures for our products
and services so that our customers can use them withpeace of mind.
In addition, we are promoting Group-wide efforts to address environmental issues such as climatechange, aiming to contribute to realizing a recyclingoriented society.

About Sysmex

include senior executive officers and full-time Audit andSupervisory Committee members (excluding outside
members of the Managing Board). Outside members of
the Managing Board also attend as observers.
We have formulated a Business Continuity Plan
(BCP) to ensure a stable supply of products and services to medical institutions and the stable operation of
Sysmex products at medical institutions, if risks such as
disasters and cyber threats materialize. The BCP involves the establishment of regulations and manuals forresponding to crises, and identifies important products
to be given supply priority.
In fiscal 2022, despite concerns about the procurement of raw materials, including semiconductors, weMembers of the Managing Board

Kenji Tachibana

Hisashi Ietsugu

Member of the Managing Board andSenior Executive Officer
Senior Managing Director
Corporate Management,
Regulatory Affairs & Quality Assurance
and DX Strategy Development

Chairperson and Group CEO

Kazumasa Hashimoto

Hidekazu Fukumoto

Masayo Takahashi

Tomokazu Yoshida

Member of the Managing Board(Outside)(Member of the Audit andSupervisory Committee)
Independent Director

Member of the Managing Board(Outside)
Independent Director

Member of the Managing Board(Outside)

Member of the Managing Board
and Senior Executive Officer
Managing Director, CTO
R&D

83 Sysmex Report 2023

About Sysmex
Sysmex’s Value Creation
Mid-Term Management Planand Initiatives
Corporate Governance

Iwane Matsui

President

Member of the Managing Board andSenior Executive Officer
Senior Managing Director
Japan and International Business andMedical Robotics (MR) Business

Activity Report andCorporate Overview

Kaoru Asano

Takashi Ono

Kazuo Ota

Tomoo Aramaki

Michihide Iwasa

Member of the Managing Board
and Senior Executive Officer
Managing Director
Eco-Social (ES) Strategy
Business Strategy Development

Member of the Managing Board(Outside)
Independent Director

Member of the Managing Board(Member of the Audit andSupervisoryCommittee)

Member of the Managing Board(Outside)(Member of the Audit andSupervisory Committee)
Independent Director

Sysmex Report 2023 84

Members of the Managing Board (As of June 23, 2023)
Hisashi Ietsugu (born 1949)
Chairperson and Group CEO

President

Kaoru Asano (born 1958)

Number of Company shares held: 614,800

Number of Company shares held: 53,600

Kenji Tachibana (born 1957)
Member of the Managing Board andSenior Executive Officer
Senior Managing Director

Corporate Management,
Regulatory Affairs &Quality Assurance andDX Strategy Development
Number of Company shares held: 38,800
Sep. 1986 Joined the Company, Member ofthe Managing Board
Mar. 1990 Member of the Managing Board
and Senior Executive Officer,
Managing Director
Feb. 1996 Member of the Managing Board
and Senior Executive Officer,
Managing Director (Representative
Director)
Apr. 1996 Member of the Managing Board
and Senior Executive Officer, Senior
Managing Director (Representative
Director)
Jun. 1996 President and CEO
Apr. 2013 Chairman and CEO
Apr. 2023 Chairperson and Group CEO(current)

Aug. 1987 Joined the Company
Apr. 2009 Executive Officer, Manager ofCentral Research Laboratories
Apr. 2011 Executive Officer, Executive Vice
President of R&D Strategic Planning
Apr. 2013 Senior Executive Officer
Jun. 2014 Member of the Managing Board
and Senior Executive Officer
Apr. 2015 Member of the Managing Board
and Senior Executive Officer,
Managing Director
Apr. 2017 Member of the Managing Board
and Senior Executive Officer, Senior
Managing Director
Apr. 2018 Member of the Managing Board
and Senior Executive Officer, Senior
Managing Director, COO LS
Business Unit and CTO
Apr. 2021 Member of the Managing Board
and Senior Executive Officer, Senior
Managing Director, CTO
Apr. 2023 President (current)

Mar. 1980 Joined the Company
Apr. 1998 President of Sysmex Singapore Pte
Ltd. (presently Sysmex Asia PacificPte Ltd.)
Apr. 2011 Executive Officer, Executive Vice
President of IVD Business
Development
Apr. 2013 Senior Executive Officer
Jun. 2014 Member of the Managing Board
and Senior Executive Officer
Apr. 2015 Member of the Managing Board
and Senior Executive Officer,
Managing Director
Apr. 2017 Member of the Managing Board
and Senior Executive Officer, Senior
Managing Director
Apr. 2018 Member of the Managing Board
and Senior Executive Officer, Senior
Managing Director, COO IVD
Business Unit
Apr. 2021 Member of the Managing Board
and Senior Executive Officer, Senior
Managing Director (current)(Important concurrent position)
Vice Chairperson of the Kobe Chamber ofCommerce and Industry

Reasons for Appointing

Reasons for Appointing

Reasons for Appointing

He has managed all of Sysmex andprovided strong leadership for many years.
He was appointed because he will beessential for increasing the corporate value
with his sense of balance, enabling
appropriate supervision anddecision-making of the entire management
based on his insight and abundant
experience and achievements as acorporate manager.

He has been managed in research,technology development and technologicalstrategy for many years and has
contributed to business development. He
was appointed because leveraging his
experience and insight will be essential forincreasing corporate value.

He has been involved in business strategy
development and international businesses
and has contributed to strategic andglobal business development. He wasappointed because he will be essential forincreasing corporate value through thegrowth of businesses.

Iwane Matsui (born 1961)
Member of the Managing Board andSenior Executive Officer
Senior Managing Director

Tomokazu Yoshida (born 1964)

Takashi Ono (born 1965)
Member of the Managing Board andSenior Executive Officer
Managing Director

Apr. 1985 Joined the Company
Jul. 2001 President of Sysmex Europe GmbH(presently Sysmex Europe SE)
Apr. 2011 Executive Officer, Executive Vice
President of Corporate Business
Planning
Apr. 2013 Executive Officer, Executive Vice
President of International Business
Management
Apr. 2017 Senior Executive Officer
Apr. 2019 Senior Executive Officer, Managing
Director
Jun. 2019 Member of the Managing Board
and Senior Executive Officer,
Managing Director
Apr. 2023 Member of the Managing Board
and Senior Executive Officer, Senior
Managing Director (current)

Jun. 2000 Joined the Company
Apr. 2017 Executive Officer, Executive Vice
President of Central ResearchLaboratories and MR Business
Development
Apr. 2020 Senior Executive Officer
Apr. 2021 Senior Executive Officer, Managing
Director
Jun. 2021 Member of the Managing Board
and Senior Executive Officer,
Managing Director
Apr. 2023 Member of the Managing Board
and Senior Executive Officer,
Managing Director, CTO (current)

Apr. 1987 Joined the Company
Apr. 2009 Executive Vice President,
Sysmex America Inc.
Apr. 2019 Executive Officer and SCM
Executive Vice President
Apr. 2021 Senior Executive Officer
Apr. 2023 Senior Executive Officer, Managing
Director
Jun. 2023 Member of the Managing Board
and Senior Executive Officer,
Managing Director (current)

Reasons for Appointing

Reasons for Appointing

Reasons for Appointing

He has been involved in promoting
businesses such as domestic andinternational sales and marketing serving as
a sales manager for domestic sales and as arepresentative of several overseas regional
headquarters of the Group for many years,
and has contributed to global businessdevelopment. He was appointed because
his abundant experience and wide-ranging
insight will be essential for increasing thecorporate value of the Group.

He has been involved in research andtechnology development for many years
and has contributed to businessdevelopment. He was appointed because
his abundant experience and wide-ranging
insight will be essential for increasing thecorporate value.

He has been involved in product planning,market development, production andsupply chain management (SCM) and has
contributed to the global businessdevelopment. He was appointed because
his abundant experience and wide-ranging
insight will be essential for increasing thecorporate value of the Group.

Japan and International Business andMedical Robotics (MR) Business
Number of Company shares held: 3,000

85 Sysmex Report 2023

Member of the Managing Board andSenior Executive Officer
Managing Director, CTO
R&D
Number of Company shares held: 1,800

Eco-Social (ES) Strategy and Business
Strategy Development
Number of Company shares held: 10,393

Masayo Takahashi (born 1961)
Member of the Managing Board(Outside)

Number of Company shares held: N/A

Kazuo Ota (born 1955)
Member of the Managing Board(Outside)
Independent Director

Member of the Managing Board(Outside)
Independent Director

Number of Company shares held: N/A

Reasons for Appointing

Reasons for Appointing

She was appointed to utilize her abundant
experience and deep insight relating toadvanced medical research, medical ethics
and other fields as a clinician and researcher
for management of the Company.

He was appointed to utilize his abundant
experience and deep insight in corporate
management for management of theCompany.

He was appointed to utilize his knowledge on
finance, financial accounting, risk management,
as a corporate manager of a financial
institution, as well as his abundant experienceand deep insight in the business world.

Tomoo Aramaki (born 1966)
Member of the Managing Board(Member of the Audit and Supervisory
Committee)

Kazumasa Hashimoto (born 1953)

Michihide Iwasa (born 1956)

Number of Company shares held: N/A

Number of Company shares held: N/A

Apr. 1989 Joined the Company
Apr. 2019 Executive Vice President of theBusiness Administration of theCompany
Jun. 2022 Member of the Managing Board(Member of the Audit andSupervisory Committee) (current)

Apr. 1976 Joined Sumitomo Bank (presently
Sumitomo Mitsui Banking Corporation)
Apr. 2004 Executive Officer of Sumitomo
Mitsui Banking Corporation
Apr. 2007 Managing Executive Officer of
Sumitomo Mitsui Banking
Corporation
Jun. 2010 President and Representative
Director of Ginsen Co., Ltd.
Jun. 2014 President and Representative
Director, and Chief Operating
Officer of Kansai Urban Banking
Corporation (presently Kansai Mirai
Bank, Limited)
Jun. 2016 Chairman of the Board, President
and Representative Director of
Kansai Urban Banking Corporation
Apr. 2018 Representative Director andPresident of Kansai Mirai Financial
Group, Inc.
Apr. 2019 Chairman of Kansai Mirai Bank, Limited.
Jun. 2020 Joined the Company, Member ofthe Managing Board (Outside)(Member of the Audit andSupervisory Committee) (current)
Apr. 2023 Special Advisor of Kansai Mirai
Bank, Limited. (current)

Apr. 1979 Jointed Kobe Steel, Ltd.
Apr. 2009 Senior General Manager of Raw
Materials Purchasing Department ofKobe Steel, Ltd.
Apr. 2010 Executive Officer of Iron & SteelBusiness of Kobe Steel, Ltd.
Apr. 2012 Managing Executive Officer of Iron
& Steel Business of Kobe Steel, Ltd.
Jun. 2014 Representative Director andPresident of Kobelco Logistics, Ltd.
Jun. 2020 Senior Advisor of Kobelco Logistics,
Ltd.
Jun. 2020 Joined the Company, Member ofthe Managing Board (Outside)(Member of the Audit andSupervisory Committee) (current)

Reasons for Appointing

Reasons for Appointing

Reasons for Appointing

He has long been involved in the businessadministration department and has also
served as the head of the businessadministration department of theCompany’s overseas subsidiaries. He wasappointed to utilize his abundant experienceand insight, which is necessary to increase
the audit and supervisory functions.

He was appointed to utilize his abundant
experience and deep insight into corporate
management as a corporate manager of afinancial institution.

He was appointed to utilize his abundant
experience and deep insight into corporate
management for audits of the Company.

Number of Company shares held: 7,200

Member of the Managing Board (Outside)(Member of the Audit and Supervisory
Committee), Independent Director

Member of the Managing Board (Outside)(Member of the Audit and Supervisory
Committee), Independent Director

Sysmex Report 2023 86

Activity Report andCorporate Overview

Reasons for Appointing

Corporate Governance

Apr. 1978 Joined The Sanwa Bank, Ltd.
(presently MUFG Bank, Ltd.)May 2005 Executive Officer of UFJ Bank Ltd.
(presently MUFG Bank, Ltd.)
Jan. 2006 Executive Officer of The Bank ofTokyo-Mitsubishi UFJ, Ltd.
(presently MUFG Bank, Ltd.)
Apr. 2008 Managing Executive Officer of The
Bank of Tokyo-Mitsubishi UFJ, Ltd.
Jun. 2010 Managing Director and Chief
Executive of The Bank ofTokyo-Mitsubishi UFJ, Ltd.
May 2012 Senior Managing Director of The
Bank of Tokyo-Mitsubishi UFJ, Ltd.
May 2014 Deputy President Chief Executiveof The Bank of Tokyo-Mitsubishi
UFJ, Ltd.
May 2016 Deputy President (Director) of The
Bank of Tokyo-Mitsubishi UFJ, Ltd.
Jun. 2017 Member of the Board of Directors,
Deputy President of The Bank ofTokyo-Mitsubishi UFJ, Ltd.
Apr. 2018 Member of the Board of Directors,
Deputy President of MUFG Bank, Ltd.
Jun. 2019 Advisor of MUFG Bank, Ltd. (current)
Jun. 2019 President of SANSHIN Co., Ltd.
Jun. 2021 Joined the Company, Member of theManaging Board (Outside) (current)
Jun. 2023 Chairperson of SANSHIN Co., Ltd.
(current)(As of June 29, 2023)

Mid-Term Management Planand Initiatives

Apr. 1978 Joined Kawasaki Heavy Industries,
Ltd.
Apr. 2013 Executive Officer, General Manager
of Planning & Control Division,
Aerospace Company of Kawasaki
Heavy Industries, Ltd.
Apr. 2015 Managing Executive Officer,
General Manager of Corporate
Planning Division, In Charge ofFinance & Human Resources(Corporate) of Kawasaki Heavy
Industries, Ltd.
Jun. 2015 Senior Vice President, General
Manager of Corporate Planning
Division, In Charge of Finance &Human Resources (Corporate) of
Kawasaki Heavy Industries, Ltd.
Apr. 2018 Director, Managing Executive
Officer, President of Motorcycle &Engine Company of Kawasaki
Heavy Industries, Ltd.
Jun. 2019 Advisor of Kawasaki Heavy
Industries, Ltd.
Jun. 2019 Joined the Company, Member ofthe Managing Board (Outside)(current)

Sysmex’s Value Creation

Apr. 1992 Ph.D. of Medicine and Assistantprofessor of Ophthalmology, Kyoto
University Hospital
Apr. 2006 Team Leader, Laboratory for Retinal
Regeneration Research, RIKEN
Center for Developmental Biology,
Japan (presently RIKEN Center for
Biosystems Dynamics Research,
Japan)
Jun. 2016 Joined the Company, Member ofthe Managing Board (Outside)(current)
Dec. 2017 Director of Research Center, Kobe
City Eye HospitalAug. 2019 President of Vision Care Inc. (current)
Aug. 2020 President, VCGT Inc. (current)
Mar. 2021 President, VCCT Inc. (current)
Apr. 2022 RARA fellow, Ritsumeikan Advanced
Research Academy (RARA), andvisiting professor, Research
Organization of Science andTechnology, Ritsumeikan University(current)
Apr. 2022 Visiting Scientist, Cell and Gene
Therapy in Ophthalmology
Laboratory, RIKEN Baton Zone
Program (BZP), RIKEN Cluster for
Science, Technology andInnovation Hub, (RCSTI) Japan(current)
Apr. 2022 Senior Adviser, Research Center,
Kobe City Eye Hospital (current)

About Sysmex

Number of Company shares held: N/A

Hidekazu Fukumoto (born 1955)

Executive Officers

87 Sysmex Report 2023

(As of June 23, 2023)

Mamoru Kubota

Kensuke Iizuka

Senior Executive Officer
Deputy in charge of Business
Strategy Development

Senior Executive Officer
In charge of Management Strategy
Executive Vice President ofCorporate Business Planning Div.,
Corporate Executive OfficeFrank Buescher

Peng Zuo Hui

Senior Executive Officer
CEO, Sysmex Asia Pacific Pte Ltd.
Deputy in charge of DX Strategy
Development

Executive Officer
President and CEO,
Sysmex Shanghai Ltd.

Mitsuhisa Kanagawa

Alain Baverel

Executive Officer
In charge of Instrument
Production and SCM.

Executive Officer
CEO, Sysmex Europe SE

Reiko Watanabe

Kaoru Watanabe

Executive Officer
Executive Vice President of Medical &Scientific Affairs Div.

Executive Officer
Supervision of JEA
Deputy in charge of Medical Robotics(MR) BusinessTakaaki Nagai

Kinya Uchihashi

Executive Officer
Executive Vice President of
System Engineering Div.

Executive Officer
In charge of Reagent Production
Executive Vice President of
Reagent Production Div.

Andy Hay

Naohiko Matsuo

Executive Officer
CEO, Sysmex America, Inc.

Executive Officer
Deputy in charge of Business
Strategy Development
Executive Vice President of
ICH Business Div.

Executive Officers’ Main Responsibilities











































































































































Sysmex Report 2023 88

Activity Report andCorporate Overview

Corporate GovernanceMid-Term Management Planand Initiatives5Sysmex’s Value Creation



4







3

Strengthening Governance

2Reducing in environmental impacts

Realize a circular resource value chain andtransform with a view to solving social issues





1

Creating an Attractive Workplace

6

Providing Responsible of products, services
and solutions

5

Creating new value for a healthy society

4

Enhance corporate value by strengthening
human capital and management base3

Accelerate business growth in thetherapeutic domain, centered on
the medical robotics business

Member of the Managing Board andSenior Executive Officer,
Kenji
Senior Managing Director
Tachibana Corporate Management,
Regulatory Affairs & Quality Assurance andDX Strategy Development
Member of the Managing Board andSenior Executive Officer,
Iwane
Senior Managing Director
MatsuiJapan and International Business andMedical Robotics (MR) Business
Tomokazu Member of the Managing Board and Senior
Executive Officer, Managing Director, CTO
YoshidaR&D
Member of the Managing Board and SeniorTakashiExecutive Officer, Managing Director
Eco-Social (ES) Strategy
Ono
Business Strategy Development
Mamoru Senior Executive Officer
Deputy in Charge of Business Strategy
KubotaDevelopment
Senior Executive Officer
Kensuke In Charge of Management Strategy
Executive Vice President of
IizukaCorporate Business Planning Div.,
Corporate Executive OfficeSenior Executive Officer
FrankCEO, Sysmex Asia Pacific Pte Ltd.
Buescher Deputy in Charge of DX Strategy
Development
Peng
Executive Officer
President and CEO, Sysmex Shanghai Ltd.
Zuo Hui
Mitsuhisa Executive Officer
Kanagawa In Charge of Instrument Production and SCM.
Alain
Executive Officer
CEO, Sysmex Europe SE
BaverelReiko
Executive Officer Executive Vice President
Watanabe of Medical & Scientific Affairs Div.
Executive Officer
Kaoru
Supervision of JEA
Watanabe Deputy in Charge of Medical Robotics(MR) Business
Executive Officer
TakaakiExecutive Vice President of System
Nagai
Engineering Div.
Executive Officer
Kinya
In Charge of Reagent Production
Uchihashi Executive Vice President of Reagent
Production Div.
Andy
Executive Officer
CEO, Sysmex America, Inc.
Hay
Executive Officer Deputy in Charge of
Naohiko Business
Strategy Development Executive Vice
MatsuoPresident of ICH Business Div.

Accelerate commercialization centered on
genetic testing in the domain of personalized
medicine
Enhance competitiveness and expand markets
through innovation in diagnostics businessdomainPosts and Responsibilities

2

Create a new business model in the domains ofprevention and self-medication

1

Main Responsibilities Related toMateriality

About Sysmex

Main Responsibilities Related to Key Actions
for the Group and Areas in Charge

Financial Overview

Management’s Discussion and Analysis

Operating Performance

product development and higher costs related to regulatory affairs. R&D expenses as a percentage of net sales
were 7.6% (up 0.2 percentage point).

In fiscal 2022, Sysmex was affected by the growing

Operating profit grew by ¥6.2 billion (up 9.3%) tonumber of COVID-19 infections in China, as well as
sharply higher costs on a various items stemming from¥73.6 billion, as higher sales and yen depreciation caused

geopolitical and other issues. However, demand forthe cost of sales ratio to improve. The operating margin

testing rebounded and the installed instrument basecame to 17.9% (down 0.6 percentage point). Exchangerose, leading to higher sales of reagents, particularly

rates had a ¥16.9 billion positive impact on operatingin the hematology, urinalysis, hemostasis, and immu-

profit compared to the preceding fiscal year.
Profit before tax rose ¥4.3 billion (up 6.8%) to ¥68.7

nochemistry fields. These factors, plus yen appreciation, pushed net sales up ¥46.7 billion year on year (upbillion, buoyed by higher operating profit, and despite

12.8%), to ¥410.5 billion. Foreign exchange rates had thea foreign exchange loss of ¥1.3 billion. (In the previous

effect of raising net sales by ¥38.89 billion compared

year, the Company recorded a foreign exchange gain ofwith the previous fiscal year.

¥0.8 billion.) Profit attributable to owners of the parent

Cost of sales improved, as reagents accounted for arose ¥1.6 billion (up 3.8%) year on year to ¥45.7 billion,

larger proportion of net sales, owing to increased num-

due to such factors as a year-on-year rise in income tax

ber of instruments instaled through the previous fiscal

expenses of ¥2.7 billion (up 13.4%) to ¥22.9 billion.

year, but we were negatively affected by soaring raw
material and transportation costs. As a result, the cost

For details on the operating environment, please see the
Message from the Group CEO on page 18

of sales ratio was 47.4% (down 0.2 percentage point).
Selling, general and administrative (SG&A) expens- Exchange Rates

es expanded ¥18.1 billion (up 19.2%), to ¥112.3 billion.

2019

2020

2021

2022

1USD

110.9

108.7

106.1

112.4

135.5

1EUR

128.4

120.8

123.7

130.6

141.0

1CNY

16.5

15.6

15.7

17.5

19.8

Expenses rose due to the recommencement of sales
and service activities, as well as to reinforcement of ourdirect sales structure. We also saw an increase in expenses related to in-house digitalization.
R&D expenses grew ¥4.2 billion year on year (up

(Yen)

2018

(FY)

16.0%), to ¥31.0 billion, owing to ongoing investments in Net Sales Operating Profit
 Operating Margin
Operating profit
Operating margin

410.5(¥ billion)

301.9

Profit attributable to owners of the parent
Return on equity (ROE)

73.6(¥ billion)

363.7

293.5

 Profit Attributable to Owners of the Parent
 Return on equity (ROE)

67.4

44.0

45.7 (¥ billion)

41.2

61.2

305.0

34.8

55.2

31.9

50.0

20.9
18.3

16.4

18.5

17.9 (%)

16.3
12.9

2018

2019

2020

2021

2022
(FY)

89 Sysmex Report 2023

2018

2019

2020

2021

2022

(FY)

2018

2019

10.9

2020

13.5

2021

12.4 (%)

2022

(FY)

robotics business. In addition, we will expand our portfolio of locally manufactured products in China. We anticipate higher sales and profit as a result. For fiscal 2023,
we forecast net sales of ¥460.0 billion, an operatingtargets of ¥420.0 billion in net sales and ¥80.0 billion in

profit of ¥83.0 billion, profit before tax of ¥78.0 billion,

operating profit by fiscal 2023, with numerical targets inand profit attributable to owners of the parent of ¥52.0

fiscal 2022 of ¥420.0 billion in net sales and ¥77.0 bil-billion. Our calculations assume full-year exchange rates

lion in operating profit. Although net sales and operatingof ¥133 per U.S. dollar, ¥143 per euro and ¥19.2 per

profit both rose year on year, they were below forecast,yuan. Our forecast is based on currently available infor-

affected by an increase in COVID-19 infections in China.

mation; actual results may differ for a variety of reasons.

In fiscal 2023, we expect the external environment

In April 2023, Sysmex commenced a new mid-term
management plan (from fiscal 2023 to fiscal 2025). By

a rebound of investment in medical infrastructure. We

promoting key actions during this period, we aim to

expect testing demand to remain at a high level, cen-achieve sustainable growth and strengthen the man-tered on emerging markets. Against this backdrop, weagement foundation to support it.

plan a global rollout of new products in the hematology>>Mid-Term Management Plan Targets P41

field, and expect to accelerate our launch in the medical

Mid-Term Management Planand Initiatives

to be marked by a resurgence of testing demand andSysmex’s Value Creation

Sysmex’s previous mid-term management plan set

About Sysmex

Operating Results versus Forecasts andthe Outlook for Fiscal 2023

Corporate Governance Reasons for Changes in Operating Profit(¥ billion)(¥ billion)

Americas
22.2

EMEA
9.8

China
3.5

AP
6.8

Japan
4.2

Change inthe cost ofHigher gross sales ratio
profit on(4.55)
increased sales
4.10

FX impact
16.91

Other
operatingincome
3.07

410.5

363.7

Fiscal 2021

67.41

Higher
SG&A
expenses(9.00)
R&D expense
increase(4.27)

73.67+¥6.26 billion+¥46.7 billion

Fiscal 2022

Fiscal 2021

Fiscal 2022

Sysmex Report 2023 90

Activity Report andCorporate Overview

 Reasons for Changes in Net Sales (by Destination)

Americas
In the Americas, Sysmex obtained the No. 1 position in
the hematology field by leveraging our outstanding customer service, such as services and support that makeuse of online tools. In fiscal 2022, sales of hematology
instruments increased in North America, and reagent
sales rose in the urinalysis field due to expansion of ourinstalled instrument base. Reagent sales were also robust in the hematology and urinalysis fields in Central
and South America, where we reinforced our direct
sales structure. As a result, sales for the region were¥105.9 billion (up 26.6% year on year). Sales were up
5.2% on a local currency basis.
EMEA
In the EMEA region, Sysmex’s business covers morethan 100 countries, including developed countries andemerging markets, and we are creating sales and service and support structures tailored to regional characteristics. In addition to our mainstay hematology field,
we strengthened operations in the hemostasis field byleveraging our alliance with Siemens Healthineers. In fiscal 2022, performance was affected by geopolitical risks,
but the acquisition of large tenders and an increase in
the installed instrument base due to a larger direct sales
region led to higher sales of instruments and reagents in
the hematology and urinalysis fields. Accordingly, regional sales amounted to ¥111.3 billion (up 9.7% year onyear). Sales were up 1.6% on a local currency basis.
China
Sysmex recognized the growth potential of the Chinese
market early on, and we took the lead over competitors
in developing local business structures in the country.
We have built a robust infrastructure in China, working
with numerous sales distributors to provide products
and services throughout the country. We have createda structure to manufacture instruments locally using aknockdown production method, applying a product supply scheme to meet market characteristics, and increasing the number of products that use this scheme. In
fiscal 2022, a rise in COVID-19 infections and the impact
of government procurement policies caused instrument
sales to fall. However, we saw a rise centered on thehemostasis field, of reagents used to predict COVID-19
aggravation. Performance was also affected by foreignexchange movements. As a result, sales in China cameto ¥96.9 billion (up 3.8% year on year). (Sales were
down 7.6% on a local currency basis.)
Asia Pacific
The Asia Pacific region has a large population, and themarket is expected to expand going forward. This market
is diverse, with economic levels, languages, and healthcare systems differing by country. Nevertheless, we arereinforcing our position by providing solutions from a customer viewpoint and meeting local needs. In fiscal 2022,
performance was favorable in India, where we transitioned
to a direct sales structure in fiscal 2019. Also, an increasein the installed instrument base pushed up reagent sales inSoutheast Asia in the hematology, urinalysis, and immunochemistry fields. As a result, sales in the Asia Pacific region
amounted to ¥36.4 billion (up 23.2% year on year).
Japan
Aiming to establish an undisputed No. 1 position in the
IVD market in Japan, Sysmex differentiates itself fromcompetitors. We are also working to capture new markets by promoting developments in such areas as cancer
genomic medicine and the medical robotics business. In
fiscal 2022, new products in the hematology field and demand for testing related to COVID-19 pushed up instrument sales. In addition to immunochemistry and hemostasis reagents, we also experienced a rise in instrument
sales in our medical robotics business. Accordingly, salesin Japan came to ¥59.8 billion (up 7.6% year on year).

 Net Sales by Destination

 Americas  EMEA  China  AP  Japan(¥ billion)

500
410.5

400

105.9
300
111.3
200

184.5
39.9

0

96.9

53.3

100

36.4

36.2
14.6
40.3
2013

59.8
2014
Japanese GAAP

91 Sysmex Report 2023

2015

2016

2017

2018

2019
IFRS

2020

2021

2022
(FY)

 Net Sales
FCM

Americas105.9 (¥ billion)
83.6

70.5

71.0

65.8

Life science
2.8%

Urinalysis 0.6%
11.4%
Hemostasis
2.7%

Others0.7%

Central andSouth America
9.7%
Canada4.2%

Sales byBusiness
2019

2020

2021

75.6

77.2

82.1

Life science
9.0%(¥ billion)
FCM
0.8%
Urinalysis
5.9%
Hemostasis
10.1%

2018

2019

2020

2021

78.2

80.0

83.8

2022
(FY)

2019

2020

2021

25.0

26.9

2019

Hematology
38.0%

FCM

Life science
0.3%

36.4 (¥ billion) 0.8% Clinical chemistry

2020

2021

55.6
46.7

2022
(FY)

59.8(¥ billion) Life science
11.5%

48.7

2019

2020

2021

2022
(FY)

Southeast
Asia
41.9%

Sales byArea
Hematology
67.9%

Oceania
7.5%South Asia
20.3%

Others
8.4% Medical robotics business
3.9%

FCM
0.2%

Immunochemistry
17.7%
Urinalysis
5.4%

Taiwan, South Korea,
Mongolia
30.3%

Sales byBusiness

Hemostasis
13.2%

Clinicalchemistry
1.8%

2018

Others2.9%

3.4%
Immunochemistry
3.3%

24.4

Japan
44.0

Sales byBusiness

Hemostasis
38.9%

Urinalysis
8.2%

2018

Life science
0.1%

Immunochemistry
12.1%

29.6

Sales byArea

Sales byBusiness
Hematology
33.9%
Hemostasis
17.2%

Sysmex Report 2023 92

Activity Report andCorporate Overview

Asia PacificFive majorcountries
43.5%

FCM
0.3%

96.9(¥ billion) 1.1%

2022
(FY)

Others3.6%

Other partsof Europe
28.9%

Urinalysis
9.5%

2018

Middle East
and Africa
13.6%
EasternEurope andRussia
10.4%

Sales byBusiness

Clinical chemistry
93.3

Hematology
65.4%

Corporate Governance

China

Others
8.8%

Mid-Term Management Planand Initiatives

101.5

111.3

Sales byArea
Hematology
81.8%

2022
(FY)

EMEA

UnitedStates83.8%

Sysmex’s Value Creation

2018

Others2.3%

About Sysmex(Fiscal 2022)

Fund Procurement andLiquidity Management

Assets, Liabilities, and Equity
As of the end of fiscal 2022, total assets amounted to

Sysmex raises working capital as necessary through¥531.0 billion, up ¥47.3 billion from the previous year.

short-term bank loans and other means. Consolidated

This increase was attributable mainly to increases ofsubsidiaries obtain bank loans as needed to secure¥7.6 billion in trade and other receivables, ¥11.3 billion in

working capital, but in October 2003, the Company

inventories, and ¥16.2 billion in intangible assets.

introduced a cash management system (CMS) to in-

Meanwhile, total liabilities were up ¥8.0 billion fromcrease efficiency by unifying financing and capital man-the previous fiscal yearend, to ¥142.7 billion. Principal

agement at affiliates in Japan.

increases included income taxes payable, which rose

Sysmex Corporation currently holds an issuer rating¥1.8 billion, other short-term financial liabilities, which in-of AA- from Rating & Investment Information, Inc. (R&I),

creased ¥2.0 billion, and contract liabilities, which werewith the rating updated based on an annual review. To

up ¥1.6 billion.

maintain and increase our rating going forward, we will

Total equity came to ¥388.3 billion, up ¥39.3 bil-take the balance between sales, profit, assets, liabilities,

lion from the end of fiscal 2021. Among the principal

and capital into consideration. For long-term capital

reasons, retained earnings rose ¥28.4 billion, and otherrequirements such as capital investment, the Company

components of equity increased ¥10.6 billion. Equity

decides the funding method after considering the in-attributable to owners of the parent to total assets rose

vestment recovery period and risk.

1.0 percentage point, from 72.0% to 73.0%.

In fiscal 2022, the Company mainly funded its capital expenditure and R&D activities out of cash generated
through operating activities.

 Total Assets

 Cash Flows

Total Equity
Total assets
Total equity

Net cash provided
by operating activities

531.0 (¥ billion)
483.7

Net cash used
in investing activities

68.8

58.7
56.8
53.1

424.8

388.3 (¥ billion)

389.2

(FY)
2019
2020
2021
2022

349.0

346.7
306.0
278.3

265.1

(25.9)(29.1)(35.0)(51.7)
20182019

93 Sysmex Report 2023

2020

2021

Net cash usedin financing activities

2022
(FY)

(20.5) (20.2)(20.5)(24.2) (¥ billion)At the end of fiscal 2022, cash and cash equivalents

Sysmex aims to maintain an appropriate balance be-amounted to ¥69.4 billion, down ¥4.2 billion from one

tween shareholder returns as profitability increases,year earlier.

internal reserves to invest in research and development,

Cash Flows from Operating Activities

and capital expenditures to maintain high rates of stable

Net cash provided by operating activities was ¥68.8

growth. In terms of returns to shareholders, we intend

billion, up ¥10.0 billion from the preceding fiscal year.

to provide a stable dividend on a continuous basis andAs principal factors, increases in trade receivables andaim for a consolidated payout ratio of 30% under ourinventories used more cash than in the previous fiscal

basic policy of sharing the successes of our operations

year, while profit before tax and depreciation and amor-

in line with business performance.

tization provided cash.

Sysmex’s Value Creation

Returns to Shareholders

About Sysmex

Cash FlowsAs a basic policy, Sysmex pays twice-yearly divia year-end dividend. The year-end dividend is decided¥16.6 billion). Among major factors, the Company used

upon approval of the annual shareholders’ meeting, andmore cash for purchases of property, plant and equip-

the interim dividend upon approval by the members ofment, and for purchases of intangible assets.

the Managing Board. In accordance with this policy and

Cash Flows from Financing Activities

considering business performance during fiscal 2022,

Net cash used in financing activities was ¥24.2 billion

we announced dividends for the year of ¥82 per share,(up ¥3.6 billion). This was mainly due to dividends paid

which includes an interim dividend of ¥40. As a result,of ¥16.5 billion (up ¥1.2 billion) and ¥7.9 billion in repay-

the dividend payout ratio came to 37.5%.

ments of lease liabilities (up ¥1.3 billion).

Going forward, Sysmex will continue to effectively
invest its internal reserves in the implementation ofhighly competitive product development and global
business strategies, aiming to respond to anticipatedchanges in the business environment.

Cash dividends applicable to the year (figures adjusted for stock split)
Dividend payout ratio

66
52

70

72

72

76

82

84 (Yen)

58

38
17
15
12.5
14
12
9
6.5
3.125 3.75
526.8 31.9 29.4 27.0 29.1
18.9 22.6 17.8 17.9 20.0

20
29.1

27

27.1

29.6 27.5

29.7

35.1

35.4

43.1

47.1

36.0

37.5

33.8
(%)

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 (FY)
(Forecast)

Note: Two-for-one stock splits conducted on November 18, 2005, April 1, 2011 and April 1, 2014.

Sysmex Report 2023 94

Activity Report andCorporate Overview

 Cash Dividends Applicable to the Year/Dividend Payout Ratio (Consolidated)

Corporate Governancedends from retained earnings, an interim dividend andNet cash used in investing activities was ¥51.7 billion (upMid-Term Management Planand Initiatives

Cash Flows from Investing Activities

Consolidated Financial Data (10 Years)
Japanese GAAP
Fiscal years

2013

2014

(¥ billion)

IFRS

2015

Fiscal years

For the year:

For the year:

Net sales

Net sales

184.5

221.3

253.1

Operating income

32.8

44.4

56.9

Net income1

20.5

26.6

36.2

Capital expenditure

17.1

17.3

19.9

Depreciation and amortization

Depreciation

9.9

11.2

12.2

R&D expenses

R&D expenses

13.2

14.6

17.7

Net cash provided by (used in) operating activities

36.5

38.6

39.5

Net cash provided by (used in)operating activities

Net cash provided by (used in) investing activities(33.9)(19.5)(21.6)Net cash provided by (used in) financing activities

(2.8)

(7.5)

(8.7)

5

At year-end:

Operating profit
Profit attributable to owners of the parent
Capital expenditure5

Net cash provided by (used in)investing activities
Net cash provided by (used in)financing activities
At year-end:

Total assets

210.7

247.9

267.6

Total assets

Cash and cash equivalents, end of year

36.5

50.2

56.4

Total equity

146.2

169.5

188.0

Cash and cash equivalents,
end of year

1.9

0.7

1.3

Interest-bearing liabilities

Total equity
Interest-bearing liabilities
Per share data:

Per share data:

Equity (yen)703.73

812.3

899.5

Equity attributable to owners of
the parent (yen)Net income (basic) (yen)

99.43

128.4

174.4

Profit attributable to owners of
the parent (basic) (yen)Net income (diluted) (yen)

99.13

128.0

173.7

Profit attributable to owners of
the parent (diluted) (yen)Cash dividends applicable to the year (yen)27.003

38.00

52.00

Cash dividends applicable tothe year (yen)Dividend payout ratio (%)

27.1

29.6

29.8

Dividend payout ratio (%)

Other data:

Other data:

Operating margin (%)

17.8

20.1

22.5

Operating margin (%)

Overseas sales ratio (%)

78.2

81.7

84.3

Overseas sales ratio (%)

Equity ratio (%)

69.2

68.0

69.9

Equity ratio (%)

Return on equity (ROE) (%)

15.6

17.0

20.4

Return on equity (ROE) (%)

Return on assets (ROA) (%)

10.7

11.6

14.1

Return on assets (ROA)6 (%)

6,211

6,742

7,446

Number of employees

US dollars (yen)

100.2

109.9

120.1

US dollars (yen)Euros (yen)

134.4

138.8

132.6

Euros (yen)Chinese Yuan (yen)

16.3

17.8

18.9

Chinese Yuan (yen)4

Number of employees(Including part-time and other employees)

Exchange rates:

Exchange rates:

1. Figures shown for fiscal 2015 is “net income attributable to owners of the parent.
2. Dividend (actual) converted to post-split basis.
3. Two-for-one stock split
4. ROA = Net income attributable to owners of the parent/total assets (yearly average)×100
95 Sysmex Report 2023

(Including part-time and other employees)

(¥ billion)

2016

2017

2018

2019

2020

2021

2022

301.9

305.0

363.7

410.5

60.7

51.7

59.0

61.2

55.2

8

50.0

67.4

73.6

39.2

40.6

39.2

41.2

34.8

31.98

44.0

45.7

21.4

19.3

24.9

30.2

27.1

25.7

33.2

42.0

12.1

12.3

14.6

15.8

23.9

25.5

27.4

31.8

15.4

15.5

16.7

19.5

21.7

22.5

26.7

31.0

41.7

32.8

52.2

44.7

53.17

56.88

58.7

68.8

(23.8)(19.4)(37.8)(40.1)(25.9)(29.1)8(35.0)(51.7)(8.7)(10.8)(11.5)(14.0)(20.5)7(20.2)(20.5)(24.2)

263.9

279.8

321.9

346.7

389.27424.88

483.7

531.0

56.4

57.9

61.4

51.0

56.5

66.4

73.7

69.4

182.8

210.2

241.4

265.1

278.3

306.08

349.0

388.3

1.3

1.1

0.9

0.8

23.17

22.5

22.8

23.5

879.32

1,005.86

1,154.57

1,267.07

1,329.78

1,460.888

1,664.85

1,852.68

189.08195.31

188.29197.60167.10152.738210.88218.83

188.30194.74187.84

197.29166.93152.478210.49218.73

52.00

58.00

66.00

70.00

72.00

72.00

76.00

82.00

27.5

29.7

35.1

35.4

43.1

47.18

36.0

37.5

24.0

20.7

21.0

20.9

18.3

16.48

18.5

17.9

84.2

82.6

84.0

85.0

84.5

84.0

84.7

85.4

69.3

74.8

74.8

76.3

71.3

71.98

72.0

73.0

23.1

20.7

17.4

16.3

12.9

8

10.9

13.5

12.4

15.7

14.9

13.0

12.3

9.5

8

7.8

9.7

9.0

7,446

7,930

8,445

8,715

9,231

9,510

9,812

10,522

120.1

108.4

110.9

110.9

108.7

106.1

112.4

135.5

132.6

118.8

129.7

128.4

120.8

123.7

130.6

141.0

18.9

16.1

16.8

16.5

15.6

15.7

17.5

19.8

5. Including tangible and intangible items
6. ROA = Profit attributable to owners of the parent/total assets (yearly average)×100
7. Adopted IFRS 16 (from fiscal 2019)8 In fiscal 2021, Sysmex changed its accounting policy for configuration or customization costs in cloud computing contracts to recognize
costs as expenses when services are received. Accordingly, we have by retroactively adjusted the figures for the fiscal 2020.
Sysmex Report 2023 96

Activity Report andCorporate Overview

293.5

Corporate Governance

281.9

Mid-Term Management Planand Initiatives

249.8

Sysmex’s Value Creation

252.6

About Sysmex

2015Consolidated Statement of Financial Position
Sysmex Corporation and Its Subsidiaries
As of March 31, 2023

2023

2022

Thousands of
U.S. Dollars
2023¥ 69,460
126,319
73,310875
600
24,924295,491¥ 73,752
118,697
61,944
1,498
470
18,728275,092$  518,358
942,679
547,0906,530
4,478
186,000
2,205,157

102,106
16,84273,53092
17,895
9,777
614
3,842
10,880235,583¥531,074

98,52513,01057,260986
16,403
9,157
841
3,910
8,520
208,614¥483,707

761,985
125,687548,731687
133,545
72,963
4,582
28,672
81,194
1,758,082$3,963,239¥ 31,678
7,149
3,537
14,662
1,123
14,46918,772
11,3608,348
111,102¥ 32,111
6,439
1,482
12,813
1,234
12,852
17,498
10,985
6,663
102,082$  236,403
53,351
26,396
109,418
8,381
107,978
140,090
84,77662,299829,119

15,442
305
1,959
398
7,059
6,450
31,615
142,718

15,840
30
1,183
366
8,537
6,613
32,571
134,654

115,2392,276
14,6192,970
52,67948,134
235,933
1,065,060

14,282
20,580334,192(314)
18,925
387,665690
388,356¥531,074

14,112
20,483
305,710(312)
8,309
348,303750
349,053¥483,707

106,582
153,582
2,493,970(2,343)
141,2312,893,022
5,149
2,898,179$3,963,239

Millions of Yen

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other short-term financial assets
Income taxes receivable
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Goodwill
Intangible assets
Investments accounted for using the equity method
Trade and other receivables
Other long-term financial assets
Asset for retirement benefits
Other non-current assets
Deferred tax assets
Total non-current assets
Total assets
Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Other short-term financial liabilities
Income taxes payable
Provisions
Contract liabilities
Accrued expenses
Accrued bonuses
Other current liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Other long-term financial liabilities
Liability for retirement benefits
Provisions
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
EquityEquity attributable to owners of the parent
Capital stock
Capital surplus
Retained earnings
Treasury stock
Other components of equity
Total equity attributable to owners of the parent
Non-controlling interests
Total equity
Total liabilities and equity

Note: The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan andhave been made at the rate of ¥134 to $1, the approximate rate of exchange at March 31, 2023.

97 Sysmex Report 2023

Consolidated Statement of Income
Sysmex Corporation and Its Subsidiaries
For the Year Ended March 31, 2023

¥363,780
173,195
190,585
94,23526,784

1,409
3,557
67,416550
909(3,561)
850
64,346
20,274¥ 44,071$3,063,448
1,450,888
1,612,552
838,590
231,791
17,672
30,6195,261
549,843
6,440
11,687(21,813)(9,993)
512,784
171,552$  341,231

Profit attributable to
Owners of the parent
Non-controlling interests
Profit¥ 45,784(59)¥ 45,725¥ 44,093(21)¥ 44,071$  341,672(440)$  341,231—¥218.83
218.73

U.S. Dollars¥210.88
210.49$1.63
1.63

Note: The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan andhave been made at the rate of ¥134 to $1, the approximate rate of exchange at March 31, 2023.

Consolidated Statement of Comprehensive Income

2023

2022

Thousands of
U.S. Dollars
2023¥45,725¥44,071$341,231

484

(213)

3,612

(774)
(289)

(66)
(280)

(5,776)(2,157)

10,117

12,64775,50012

390

10,1309,841¥55,566

12,65012,370¥56,442

75,59773,440$414,672¥55,625(59)¥55,566¥56,463(21)¥56,442$415,112(440)$414,672

Millions of Yen

ProfitOther comprehensive income (loss)
Items that will not be reclassified subsequently to profit or loss
Net (loss) gain on financial assets measured at fair value
through other comprehensive income
Remeasurements of defined benefit plans
Total
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
Share of other comprehensive income of investments
accounted for using the equity method
Total
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of the parent
Non-controlling interests
Comprehensive income

Note: The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan andhave been made at the rate of ¥134 to $1, the approximate rate of exchange at March 31, 2023.
Sysmex Report 2023 98

Activity Report andCorporate Overview

Sysmex Corporation and Its Subsidiaries
For the Year Ended March 31, 2023

Corporate GovernanceYen

Earnings per share
Basic
Diluted

Mid-Term Management Planand Initiatives

2022¥410,502
194,419
216,082
112,371
31,060
2,368
4,103
705
73,679863
1,566(2,923)(1,339)68,713
22,988¥ 45,725

Sysmex’s Value Creation

2023

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Research and development expenses
Impairment losses
Other operating income
Other operating expenses
Operating profit
Financial income
Financial expenses
Share of loss on equity method
Foreign exchange gain (loss)
Profit before tax
Income tax expenses
ProfitAbout Sysmex

Thousands of
U.S. Dollars
2023

Millions of Yen

Consolidated Statement of Changes in Equity
Sysmex Corporation and Its Subsidiaries
For the Year Ended March 31, 2023

Capitalstock

As of March 31, 2021
ProfitOther comprehensive income(loss)
Comprehensive income (loss)
Exercise of warrants
Stock-based compensation
Cash dividends
Purchase of treasury stock
Transfer to retained earnings
Total transactions withthe owners
As of March 31, 2022
ProfitOther comprehensive income(loss)
Comprehensive income (loss)
Exercise of warrants
Stock-based compensation
Cash dividends
Purchase of treasury stock
Transfer to retained earnings
Total transactions withthe owners
As of March 31, 2023

¥13,229—¥19,581 ¥276,897—
44,093¥(307)—

Total¥   (4,082) ¥305,318—
44,093

Noncontrollinginterests

Total
equity¥771 ¥306,089(21)
44,071————

12,37012,370012,370

—
882
—
—
—
—

—
502
399
—
—
—

44,093——(15,258)
—
(21)

—
—
—
—
(4)
—

12,370————21

56,463
1,384
399(15,258)
(4)
—

(21)
—
—
—
—
—

56,442
1,384
399(15,258)
(4)
—

882

901

(15,280)(4)

21(13,478)—(13,478)

14,112—

20,483—

305,71045,784

(312)
—

8,309
—

348,30345,784750(59)

349,053
45,725

—

—

—

—

9,841

9,841

(0)

9,841

—
170
—
—
—
—

—
97
—
—
—
—

45,784——(16,528)
—
(774)

—
—
—
—
(1)
—

9,841
—
—
—
—
774

55,625267—(16,528)
(1)
—

(59)
—
—
—
—
—

55,566267—(16,528)
(1)
—

170

97

(17,302)(1)

774(16,263)—(16,263)¥20,580 ¥334,192¥(314)¥14,282

Capitalstock

As of March 31, 2022
ProfitOther comprehensive income(loss)
Comprehensive income (loss)
Exercise of warrants
Stock-based compensation
Cash dividends
Purchase of treasury stock
Transfer to retained earnings
Total transactions withthe owners
As of March 31, 2023

Millions of Yen
Equity attributable to owners of the parent
Other
CapitalRetained
Treasurycomponents
surplusearnings
stockof equity$105,313—¥18,925 ¥387,665

Thousands of U.S. Dollars
Equity attributable to owners of the parent
Other
CapitalRetained
Treasurycomponents
surplusearnings
stockof equity$152,858 $2,281,418—
341,672

Total$(2,328) $ 62,007 $2,599,276——
341,672¥690 ¥388,356

Noncontrollinginterests

Total
equity$5,597 $2,604,873(440)
341,231

—

—

—

—

73,44073,440(0)73,440

—
1,269
—
—
—
—

—
724
—
—
—
—

341,672——(123,343)—(5,776)

—
—
—
—
(7)
—

73,440
—
—
—
—
5,776

415,112
1,993—(123,343)
(7)
—

(440)
—
—
—
—
—

414,672
1,993—(123,343)
(7)
—

1,269

724

(129,119)

(7)

5,776

(121,366)—(121,366)$106,582$153,582 $2,493,970$(2,343) $141,231 $2,893,022$5,149 $2,898,179

Note: T he translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan andhave been made at the rate of ¥134 to $1, the approximate rate of exchange at March 31, 2023.

99 Sysmex Report 2023

Consolidated Statement of Cash Flows
Sysmex Corporation and Its Subsidiaries
For the Year Ended March 31, 2023

¥ 64,346
27,431(17,485)337(25,020)(646)(5,189)

—
(408)
740
3,561
2,245
(10,297)832(12,495)(5,055)
1,108
2,044(2,417)
158
1,984
70
73,850298(704)(14,705)
58,739$ 512,784
237,366
17,672(5,254)
8,455
21,813
1,978(22,239)(7,336)(78,791)(97)(5,321)
5,575
5,716
10,821933(6,866)697,201
5,045(7,351)(181,201)
513,694—(12,768)545(19,266)(1,896)(320)(1,199)(2,984)
(711)
811
(863)
(51,751)

(640)
755
(260)
(35,052)(130,485)
2,515(186,716)(4,821)(38,724)—(22,269)(5,306)
6,052(6,440)(386,201)267(16,528)(7,959)(13)(24,234)

1,384(15,258)(6,577)(90)(20,542)

1,993(123,343)(59,396)(97)(180,851)

2,858

4,139

21,328(4,291)73,752¥ 69,460

7,284
66,467¥ 73,752(32,022)550,388$ 518,358—

Note: The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan andhave been made at the rate of ¥134 to $1, the approximate rate of exchange at March 31, 2023.

Sysmex Report 2023 100

Activity Report andCorporate Overview¥ 68,713
31,807
2,368
(704)
1,133
2,923
265
(2,980)(983)(10,558)
(13)
(713)
747
766
1,450
125
(920)
93,425676(985)(24,281)
68,835

Corporate Governance

2022

Mid-Term Management Planand Initiatives

2023

Sysmex’s Value Creation

Operating activities
Profit before tax
Depreciation and amortization
Impairment loss
Interest and dividend income
Interest expenses
Share of loss on equity method
Loss on disposal of property, plant and equipment(Increase) in trade receivables
Decrease (increase) in advance payments(Increase) in inventories(Decrease) in trade payables
Increase (decrease) in accounts payable – other
Increase in accrued expenses
Decrease/increase in consumption taxes receivable/payable
Increase in contract liabilities
Increase in accrued bonuses
Other – net
SubtotalInterest and dividend received
Interest paid
Income taxes paid
Net cash provided by operating activities
Investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Increase in long-term prepaid expenses
Purchase of investments in equity instruments
Purchase of investments in debt instruments
Acquisitions of subsidiaries or other businesses
Payments into time deposits
Proceeds from withdrawal of time deposits
Other – net
Net cash used in investing activities
Financing activities
Exercise of warrants
Dividends paid
Repayment of lease liabilities
Other – net
Net cash used in financing activities
Foreign currency translation adjustments on cash andcash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year

Thousands of
U.S. Dollars
2023

About Sysmex

Millions of Yen

Corporate Overview

Sysmex’s Businesses

Diagnostics Business
Clinical testing, which is essential to healthcare, can bebroadly divided into two categories: in vitro diagnostics(IVD) that involve the examination of blood, urine, andother samples taken from the body, and in vivo diagnostics, which involve direct examination using X-rays orelectrocardiograms. Sysmex is developing its diagnostics business, centered on the IVD domain, where we
provide medical institutions and other customers with
instruments, reagents, and software on a global basis.
IVD is used in a variety of ways. It is used during
medical checkups to help prevent disease. IVD is also
used in diagnosing diseases, determining treatment
methods, measuring the results of drug administration,
predicting aggravation, and for post-treatment monitoring. Healthcare without accurate test results is likewalking through fog; the path is uncertain. IVD is essential because it allows medical professionals to assess apatient’s state of health accurately and swiftly, and to
determine optimal treatment methods.
In IVD, within Sysmex’s main business fields of hematology, urinalysis, and immunochemistry, testing is
conducted to check a patient’s physical condition. They
are used for a wide range of other purposes, such as
disease prevention and early-stage detection throughmedical checkups, and in treating diseases or managing
their prognoses. In fields such as hemostasis and genetesting, tests are performed to measure a person’s
physical condition in greater detail and are mainly usedin the process of diagnosing and treating diseases.

Medical Robotics BusinessIn recent years, it has become common to perform
minimally invasive laparoscopic surgery to reduce thephysical burden on patients. However, this surgery
requires a high degree of technical skill, and surgicalsupport robots that complement these skills are attracting attention from medical workers. Currently,
insurance coverage of surgical procedures using theserobots has been extended to include urology, gastroenterology, and gynecology, and the number of surgeries
performed using surgical support robots is gradually
increasing. In addition, from the viewpoint of improving
access to medical care, such robots are being considered for use with remote medicine. It may not be long
before surgeries can be performed with doctors andpatients in different locations.
Under these circumstances, Medicaroid
Corporation, a joint venture between Sysmex and
Kawasaki Heavy Industries, Ltd., developed the firstmade-in-Japan robotic-assisted surgery system. As theglobal general distributor for this product, Sysmex began its launch in Japan in 2020.

 Sysmex’s Diagnostics Business Domain
Healthcare Activities

Prevention

Medicalcheckups

Detailed follow-ups

Treatment/surgery

Efficacy evaluation

Clinical Testing

In Vitro Diagnostics• Hematology*1• Clinical chemistry*1• Hemostasis• Gene testing• Urinalysis*1• Other• Immunochemistry*1 (FCM, testing for
antimicrobial
resistance, etc.)

Sysmex1. Diagnostics used for medical checkups

101 Sysmex Report 2023

In Vivo Diagnostics• Image scanning• Electrocardiography• Respiratory function testing• Electroencephalogram testing• Ultrasonography

Prognosis

About Sysmex

What can be determined from samples (blood, urine, and cancer tissue)

Blood vessels

Blood Testing

White blood
cells

Clotting factors

 Hemostasis
Testing that measures the ability of blood toclot at wound sites (coagulation) anddissolve clots (fibrinolytic)[Related diseases: hemophilia, thrombotic
disease (myocardial infarction, cerebral
infarction, etc.)]
 Immunochemistry
Testing for the status of viruses, hormonesand proteins, and determining causes andtypes of disease[Related diseases: infectious diseases(hepatitis B and C), thyroid disease, various
cancers, myocardial infarction, Alzheimer’s
disease, atopic dermatitis, etc.]

Note: Some tests also include blood testing

VirusesHormones

Lymph nodes

 Life Science
Cancer gene testingThrough the detection and analysis of cancer
genes, this testing contributes to decisions
on treatment protocols and drug
administration.
[Related diseases: breast cancer, lungcancer, colorectal cancer, etc.]

Urine Testing
Cancer cellsDNA Urinalysis
Testing to determine the presence of sugar,
proteins or blood in the urine[Related diseases: kidney stones, kidneydisease, diabetes, etc.]

Sysmex Report 2023 102

Activity Report andCorporate Overview

Cancer and Lymph Node Testing

Proteins

Corporate Governance

Platelets

 Hematology
Testing that measures and analyzes thenumber, type, and size of red, white andother blood cells[Related diseases: anemia, leukemia,
thrombocytopenia, etc.]

Mid-Term Management Planand Initiatives

Red bloodcells

Sysmex’s Value Creation

IVDSysmex’s Products in Use

SysmexDepending on the country andregion, patients may consult
directly with commercial labs.

Instruments andReagents
Service and Support

1 Commercial Labs

Specimens

Test results

Consultations

Patients

Diagnosis andtreatment

2 Hospitals
3 Clinics

Specimens
Test results

Lab Assay
Services

Specimens

4 Universities,
Research Institutions

Consultations

Patients

Diagnosis andtreatment
5 Veterinary Hospitals

Test results

Instruments andReagents for Animals
Service and Support

1 Commercial Labs
Commercial labs conduct testing for small-scale medical institutions that do not have their own analyzers, as well as handling specialized
tests. Large-scale labs, which handle tens of thousands of samples each day, use high-productivity transport systems.

2 Hospitals
In addition to blood tests used in medical checkups and for in- and out-patient treatment and diagnostics, our products are used totest for cancer lymph node metastasis, and in cancer genome profiling.

3 Clinics
Clinics typically use products that are compact and simple.

4 Universities and Research Institutions, etc. (Lab Assay Services)
We are developing a lab assay business, in which we receive samples from medical institutions, test them at our labs and ouraffiliated companies (such as Sysmex Inostics and RIKEN GENESIS), and send back the results of protein or gene analyses
performed on those samples. In addition to medical institutions, we handle measurements on behalf of universities, research
institutes, and pharmaceutical companies, providing information to assist their drug discovery and R&D efforts.

5 Veterinary hospitals
Our products are used in maintaining the health of dogs, cats, and other pets, as well as aquarium and zoo animals.

103 Sysmex Report 2023

Primary Products and Services

Hematology

Mid-Term Management Planand Initiatives

For small- and medium-sized institutions, Sysmex offers three-part white blood cell differential models, used
for determining basic parameters, as well as five-part
white blood cell differential models, used to deliver ahigh degree of clinical significance and require numerous reagents. In addition, we offer a wide-ranging lineup,
including transport systems that can be used for rapid,
high-volume testing in large-scale labs. In Japan in 2021,
we launched a new five-part white blood cell differential
flag-ship model, as well as a compact model providing three-part white blood cell differentiation. In 2022,

Sysmex’s Value Creation

we launched sample transportation system modules
equipped with the world’s first automated measurement
function for quality control materials. Beginning with thelaunch of these products in the EMEA region in 2023,
going forward we plan to roll out these models globally.
In 2018, we launched the first products to havereceived CLIA-waiver certification to clinics and othersmall-scale facilities in the United States. We are also
rolling out products to help realize early-stage detection
and treatment of malaria. In EMEA in 2019, and in Japan
in 2020, we launched an analyzer that supports standardization and improved efficiency in malaria testing.

About Sysmex

Diagnostics Business Product Lineup of Multiparameter Automated Hematology Analyzers

Five-Part Differential White Blood Cell Instruments

Corporate Governance

Reagents

Activity Report andCorporate Overview

Information Diversity and Function

Three-Part Differential White Blood Cell Instruments

Efficiency and Handling Capacity

A Manufacturing System That Supports the Global Supply of Products
In order to deliver safe, high-quality products globally, Sysmex has established a robust production system for both
instruments and reagents to ensure a stable supply.
Instrument Manufacturing

Reagent Production

Centered on eight locations in Japan

14 locations in 10 countries(Chemical: 8 locations; biological: 6 locations)

Instruments must meet high quality standards to ensure
accurate test results. Sysmex has established an efficient
production system utilizing ICT to manufacture diverse,
high-quality and failure-resistant products in small lots.
Additionally, we work to achieve efficient and robust collaboration from our instrument manufacturing facility in
Hyogo Prefecture, which is also our hub for R&D, service
and support.

IVD requires reagents, and medical institutions requirea steady supply to ensure uninterrupted daily testing.
Taking contingency systems into consideration, we
have established global production bases to achieve astable supply.

>> Expansion of Our Procurement, Production and Distribution Structures P49

Sysmex Report 2023 104

Flow Cytometry (FCM)

Urinalysis

We are developing products that utilize the flow cytometry method. Areas of business include clinical FCM(clinical testing to perform detailed analysis in diagnosing leukemia, malignant lymphoma, and HIV/AIDS),
industry FCM (used in the quality control of food andother industrial applications) and research FCM (analyzing the function of cultured cells and other research
applications). In 2020, we launched an FCM analyzer for
research in North America, the world’s largest market
for FCM testing. In 2022, we received the EU’s In Vitro
Diagnostic Medical Device Regulation (IVDR) certification and began our market launch in Europe. Sales inJapan commenced in 2023.

We developed the world’s first automated urine particle analyzer using the flow cytometry method. We arealso adding to our portfolio of urine chemistry products
by making use of alliances as we work to expand our
lineup in response to diverse urinalysis needs. In 2020,
we signed a distributorship agreement with Siemens
Healthineers for the North American market. In 2022,
we launched new products for the mid- and low-end
markets in Japan. We are rolling these out to the EMEA
region, and we plan to further expand our market scale.

Fully automated urine particle analyzer
Fully automated urine chemistry analyzer
Fully automated imaging unit for formed elements in urine
Flow cytometer

Reagents

Hemostasis

Immunochemistry

Sysmex handles products offering a wide range of processing capabilities to meet the needs of various facilities. Demand for hemostasis testing has increased andgrown more diverse due to a rise in thrombotic diseases
stemming from lifestyle diseases, as well as to the development of new blood preparations.
In 2018, we launched a new product offering enhanced productivity, reliability and operability, and weare working toward a global roll-out. In addition to analliance with Siemens Healthineers in the area of reagents, we work with Group company HYPHEN BioMed
SAS to develop products offering high clinical value.

We are working to develop our business in Asia, including Japan and China, through sales of a fully automatedimmunoassay system, which performs highly sensitive,
high-speed assays on minute sample quantities.
In addition to reagents to test for infectious disease
and tumor markers, we are develop-ing proprietary markers to test for measuring progression of hepatic fibrosis
and atopic der-matitis. We are also developing new testing parameters, such as reagents to test for Alz-heimer’s
disease, which we began selling in Japan in 2023.
In China we are working to differentiate ourselvesby augmenting the number of parameters tailored toregional needs. To do so, we are pursuing development
through our local R&D bases and joint developmentwith local companies.

Reagents
Automated blood
coagulation analyzer
105 Sysmex Report 2023

Reagents
Automated immunoassay
systemAbout Sysmex

Using our proprietary technology, the OSNA method, we
provide a system that automatically and easily detects information to assist in diagnosing
lymph node metastasis. We
launched this system in China
Cancer Lymph Nodein 2020.
Metastasis Testing System
We have developed a system for use in cancer gene profiling in collaboration with
the National Cancer Center Japan. The system’s targets
for analysis are solid tumors. By obtaining a comprehensive cancer genomic profile of tumor tissue, thesystem analyzes abnormalities in cancer-specific genes
in patients to provide information that is useful in determining treatment methods, including diagnoses and theselection of anti-cancer drugs. In 2019, this became thefirst such system to be covered under Japanese healthinsurance to be used in clinical settings.

In June 2023, we launched in Europe a system to rapidly
detect antimicrobial susceptibility. The system detects
the presence or absence of bacteria and assesses theeffectiveness of antimicrobials using urine samples
from patients suspected of having urinary tract infections. This system delivers test results in as little as 30
minutes, comparedwith the several days
that were previously
required. This assists
the appropriate use of
antimicrobials during
Analyzer
Reagent cartridge
initial patient visits at(Test panel)clinics and other primary
Rapid antimicrobial susceptibility
care settings.
testing system

We offer services making use of highly sensitive digital
PCR technology to detect gene mutations to a highdegree of sensitivity that are present in minute samplesof blood, and ultrahigh-sensitivity NGS technology.

Compact enough to fit in standard Japanese operatingrooms, this system is equipped with user-friendly robot
arms and a high-definition 3D videoscope. Furthermore,
the system has been
designed to be network
compatible, to support
more accurate treatment
by medical workers.

Robotic-assisted surgery system

Products, Service, and Support That Enhance Customer Satisfaction
In addition to expanding its product portfolio, Sysmex is enhancing its service and support offerings. As a result, wehave earned high customer satisfaction in Japan and overseas. In a customer satisfaction assessment in the UnitedStates, we have been at the top for 17 consecutive years.
 Customer Assessment in the United States (Overall Service Performance)
5.6

9.5

5.4

9.0

5.2

8.5

5.0

8.0

4.8

7.5

4.6

7.0

4.4

6.5

4.2

9.42
9.16

6.0

2007

Sysmex

2008

2009

Competitor 1

2010

2011

Competitor 22013 2014 2015 20162012
Competitor 3

Competitor 42017 2018 2019 2020 2021 2022 2023

Industry Avg.

Note: Scale of 1 to 6 from 2007 to 2012, and a scale of 1 to 10 from 2013 to 2023
Source: IMV ServiceTrak 2020 Hematology

Sysmex Report 2023 106

Activity Report andCorporate Overview>>Lab Assay Services P103

Robotic-Assisted Surgery System

Corporate Governance

Other Lab Assays

Medical Robotics Business

Mid-Term Management Planand Initiatives

Antimicrobial Susceptibility Testing

Sysmex’s Value Creation

Cancer Gene TestingTerminology

Antimicrobial resistanceThis phenomenon occurs when living organisms develop a resistance to a drug,
whose efficacy is decreased or neutralized as a result. Bacteria that have developed microbial resistance are known as antimicrobial-resistant bacteria.

Antimicrobial susceptibility test

A test to determine the efficacy of various antimicrobial drugs against pathogenic bacteria detected in a sample.

Application

Corresponds to a test parameter in Sysmex’s various technology platforms.

Cancer genome profiling

Analysis of information about genes significant to cancer diagnostics by looking
at mutations, amplifications, and fusion of multiple genes in cancer tissue.

Caresphere

Caresphere utilizes IoT and the cloud to establish a platform for the real-timelinking and analysis of a variety of information managed using testing instruments
and clinical laboratory information systems. It is a new network solution that provides support for increasing the operational efficiency of professionals involvedin testing and healthcare, enhancing quality and raising patient satisfaction.

Clinical FCM

Refers to FCM used in a clinical testing setting for analysis in such areas as hemophilia, lymphoma, HIV, and hematopoietic stem cells.

Commercial lab

A company that specializes in testing operations, performing IVD on behalf of
medical institutions, research institutes, and other facilities.

Companion diagnostics

Tests performed to identify patients who may benefit from or experience side
effects from a drug and to determine whether to change the method of administration or discontinue the drug.

Complete blood count (CBC)This refers to eight parameters in peripheral blood: red blood cell count, whiteblood cell count, platelet count, hemoglobin volume, hematocrit value, mean
corpuscular volume, mean cor-puscular hemoglobin and the mean corpuscularhemoglobin concentration. These are basic test parameters to determine thepresence of anemia, infections, and blood diseases.

EMEA

Europe, the Middle East, and Africa

Flow cytometry (FCM)

Method involving the flow dispersion of minute particles and the use of laser
light to optically analyze minute flows.

Fluorescence in situ hybridization(FISH) testing

Testing method using fluorescent material binding only specific genes to detect
abnormalities within a chromosome.

Genomic medicine

Medicine that allows the prevention of disease or the effective treatment of
individual patients by analyzing their genetic information.

Hematology

The field of in vitro diagnostics that determines whether precise testing is necessary, by analyzing the number, type, and size of red, white, and other blood cells.

In vitro diagnostics (IVD)

In general, IVD refers to the testing of blood, urine and other samples to determine physical condition. IVD may also refer to the domain of laboratory testingin which IVD is performed.

Knockdown production method

A production method in which the principal parts are exported from Japan for
local assembly into finished products.

Laboratory developed test (LDT)A test performed in the clinical laboratories of medical institutions, commercial
labs, and other facilities based on their own quality control regulations.

Liquid biopsy

This is a general name for technology using blood or body fluid samples fordiagnosis and the prediction of treatment impacts, rather than through the conventional practice of tissue biopsy, in which diagnosis is performed on diseased
tissue that has been collected. Liquid biopsy is less invasive than tissue biopsy,
but more highly sensitive detection technologies are required.

Manufacturing andmarketing approval(regulatory approval)

In Japan, the manufacturing and marketing of medical devices and reagentsrequires approval from the Ministry of Health, Labour and Welfare. Such approval necessitates confirmation of a product’s function and safety. Other countries have their own regulatory procedures: approval from the Food and Drug
Administration in the United States, obtaining the CE Mark in Europe (which indicates compliance with the In Vitro Diagnostic Medical Device Directive (IVDD)
and the In Vitro Diagnostic Medical Device Regulation (IVDR)), and in China,
approval from the National Medical Products Administration (NMPA).

107 Sysmex Report 2023

Different from the conventional practice of providing selected predeterminedor uniform treatment for a given disease, personalized medicine aims to selecttreatment methods optimized to individual patient characteristics, based on
genetic and other data.

Polymerase chain reaction (PCR)

A gene amplification technology for copying small quantities of DNA to produce
larger quantities.

Precision management

A management method used to guarantee the values measured by customers’
testing equipment and to confirm that a customer’s equipment is functioning
correctly. External quality control is a method under which the same specimens(such as artificially produced blood) are distributed to multiple clinical laboratories, and the measurement results obtained are analyzed using statisticalmethods, thereby allowing the precision of individual laboratories’ measurement
results to be evaluated. The results are provided as feedback to these laboratories, helping to increase the quality of testing.

Primary care

The initial care provided at clinics or other locations when a patient first falls ill.

PSS

Acronym for “Plasma Safe Sequencing.” This pretreatment technology is used
to discern between gene mutations and read errors by attaching tags to genes
to be amplified.

Quality of life (QOL)

Refers to the maintenance of human dignity and improved wellbeing.

Reagent

A pharmaceutical product for medical use in laboratory testing, also called an
in vitro diagnostic product. It is not used directly on the human body, but onsamples of blood or other bodily fluids.

RFID

Automatic recognition system that calls, registers, deletes, and updates media
data via wireless communication.

Self-medication

Taking responsibility for your own health and examine and treat minor physicalailments on your own.

Specimen

Material necessary for testing. May include blood, cerebrospinal fluid, pus, punctured fluid, urine and feces.

Sysmex Network Communication
Systems (SNCS)

An online support service that connects the Sysmex Customer Support Centerand customers’ instruments via an Internet connection to provide real-time external quality control and scientific information, and to monitor instrument conditions.

Technology platforms

Sysmex’s three technology areas (cell measurement, protein measurement, andgene measurement) and the measurement platforms that use them.

Transport system

A system that links multiple analyzers, allowing testing to be automated. In addition to making testing operations more efficient, automation helps reduce therisk of infection when samples are handled manually, and prevents mishandling.

Urinary tract infections

The urinary tract runs between the kidneys and the urethral outlet.
Inflammations due to the incursion of bacteria into the urinary tract are known
as urinary tract infections. Such infections can lead to cystitis and pyelonephritis(inflammation of the kidneys).

Urine sediment testing

Testing performed to analyze formed elements in the urine, including blood andother cells. Urine chemistry testing, on the other hand, is conducted by using atest paper to analyze for the presence of sugar, protein, or blood cells in urine.

Sysmex Report 2023 108

Activity Report andCorporate Overview

Personalized medicine

Corporate GovernanceA test that allows multiple markers to be measured at once. Particularly in genomic medicine, cancer panels are used to analyze the mutation, proliferation,and fusion of multiple genes having diagnostic significance.

Mid-Term Management Planand Initiatives

Panel testing

Sysmex’s Value Creation

A technique developed by Sysmex that does not require extraction or purificationof nucleic acid in the pre-treatment process, enabling one-step amplification.

About Sysmex

One-Step Nucleic Acid
Amplification (OSNA) method

Stock Information (As of the End of Fiscal 2022)

 Principal Shareholders (Top 10)

 Stock Price Range

Number of Percentage
shares held of share(Thousands) holding (%)(Calculated as the closing price on March 31, 2012 = 100)

1,200

Shareholders

Sysmex (Figures adjusted for stock split)
Tokyo Price Index (TOPIX)

The Master Trust Bank of Japan, Ltd.
(Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
The Kobe Yamabuki Foundation
Nakatani Foundation for Advancementof Measuring Technologies inBiomedical Engineering
Nakatani Kosan, Ltd.
Kazuko Ietsugu
Taeko Wada
Rusoru, Ltd.
Tadako Nakatani
SSBTC CLIENT OMNIBUS ACCOUNT

900

600

300

0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

27,87413.3

12,07512,0005.8
5.7

11,8305.7

10,519
6,094
6,094
4,750
4,012
3,665

5.0
2.9
2.9
2.3
1.9
1.8

Note: P
 ercentage of shareholding excludes treasury stock(447,492 shares).

(FY) Stock Price Movements

 Distribution of Shares by Number of Shares Held

Fiscal
years

High
(Yen)

Low
(Yen)

2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022

5,800
7,180
6,880
8,640
8,170
9,730
11,1108,420
13,31015,725
9,815

2,900
3,130
3,070
5,430
6,010
6,080
4,810
5,814
7,024
7,970
7,380

Closing price(Yen)

Volatility
(%)

5,790
3,290
6,670
7,040
6,750
9,640
6,690
7,846
11,925
8,923
8,643

25.7
37.5
27.6
39.2
29.9
24.7
38.7
38.4
27.8
41.6
41.0

Less than 1,000 shares 1.27%

More than
1,000 shares 1.46%

Number of shares: 2,662,251(14,445 shareholders)Number of shares: 3,056,065(1,537 shareholders)More than 500,000 shares 77.32%

More than
5,000 shares 0.94%

Number of shares: 162,140,584(68 shareholders)Number of shares: 1,973,408(284 shareholders)More than
10,000 shares 5.70%
Number of shares:
11,943,472(387 shareholders)More than
100,000 shares 13.31%
Number of shares:
27,918,212(126 shareholders)Note: Volatility refers to the annualized standard deviation basedon daily closing prices.

 Total Shareholder Return (TSR*) (Annualized Rate)(%)

Past 1
Past 3 years Past 5 years Past 10 years
Investment year
periodCumulative/
AnnualAnnualAnnualCumulative
Cumulative
Cumulative
Annual rate
rate
rate
rate

Sysmex

-3.0

10.5

TOPIX
TOPIX
(Electricalequipment)

5.8

53.4 15.3

3.4

31.8

5.7 142.1

1.6

77.6 21.1

56.4

9.4 254.5 13.5

Individuals and others
15.59%

Financial institutions
23.65%
Financial
instrument firms
1.15%-9.9 -2.1 201.9 11.7
9.2

* TSR: Total shareholder return, including capital gains and dividends• Prepared by Sysmex based on data from Nikkei NEEDSFinancial QUEST• Base date of March 31, 2023
• TSR calculated on the assumption that dividends are reinvested
in shares

109 Sysmex Report 2023

 Composition of Shareholders

Foreign investors
39.34%

Other Japanesecompanies
20.27%

Corporate Information (As of the End of Fiscal 2022)

About Sysmex

Sysmex Corporation

Inquiries

IR Department: TEL: +81-78-265-0500

Websitehttps://www.sysmex.co.jp/en/

Number of Employees

10,522 (consolidated basis) (including part-time employees and others)

Fiscal Year

April 1–March 31

Shareholders’ Meeting

June

Number of Shares Authorized

598,688,000 shares

Number of Shares Issued

209,693,992 shares

Paid-in Capital¥14,281.2 million

Stock Listings

Tokyo Stock Exchange, Prime Market

Ticker Code

6869

Transfer Agent

Mitsubishi UFJ Trust and Banking Corporation

Independent Auditor

Deloitte Touche Tohmatsu LLC

RatingAA- (Rating and Investment Information, Inc. (R&I))

Major Indexes

Dow Jones Sustainability World Index
Dow Jones Sustainability Asia Pacific Index
FTSE4Good Index Series
FTSE Blossom Japan Index
FTSE Blossom Japan Sector Relative Index
MSCI ESG Leaders Indexes
MSCI SRI Indexes
MSCI Japan ESG Select Leaders Index
MSCI Japan Empowering Women Index (WIN)S&P/JPX Carbon Efficient Index
ISS ESG “Prime” Status
Ethibel Excellence
Ethibel Pioneer
Ethibel Sustainability Index (ESI)Euronext Vigeo Eiris World 120 Index
iSTOXX MUTB Japan Platinum Career 150 Index

Activity Report andCorporate Overview

1-5-1, Wakinohama-Kaigandori, Chuo-ku, Kobe 651-0073, Japan

Corporate Governance

Head Office

Mid-Term Management Planand Initiatives

February 20, 1968

Sysmex’s Value Creation

Established>>Sysmex Sustainability Data Book 2023 > Evaluations and Results Related to Sustainability P90

Sysmex Report 2023 110

1-5-1 Wakinohama-Kaigandori,Chuo-ku, Kobe 651-0073, Japan
Tel +81 (78) 265-0500 Fax +81 (78) 265-0524
www.sysmex.co.jp/en/