Sysmex Report 2021

Sysmex Report 2021
Fiscal 2020 (April 1, 2020 to March 31, 2021)

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/

This brochure was printed in Japan on FSC R-certified paper using non-VOC ink.

Lighting the way with diagnostics

Sysmex enhances diagnostic value
with innovative testing,to bring greater trust andconfidence to healthcare.
Sysmex operates in the domain of healthcare testing,which involves examining blood, urine, and other samples.
We provide customers with a variety of products and services
in more than 190 countries and regions.
We will undertake new challenges in the field of diagnostics
as the future of healthcare unfolds.

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Enhancing Medical Institutions’ Testing Systems
through the Development and Provision of a Diverse Product Portfolio>>P21

Helping to Determine Diagnoses
and Treatment Methods
through the Development and Provision of Tests withHigh Diagnostic Value>>P23

We are working with stakeholders
to resolve social issues.

Boosting Laboratory Productivity
through Support for the Healthcare Professionals
Who Underpin Testing
>>P22

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Reducing Environmental Impact
for Medical Institutions
through Environmentally Considerate ProductDevelopment and Business Activities>>P24

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Contents

01

INTRODUCTION

Introduction
Sysmex enhances diagnostic value with innovative testing, to bring greater
trust and confidence to healthcare.

01

11

OUR VALUE29

OUR BUSINESS &STRATEGY

We aim to grow further by making use of the management resources we have cultivated todate. At the same time, we will reinforce our management base in the interest of enhancing
management quality.

48

 Management Base49 Management Resources07 An Ideal Unchanged Since Our Founding

51 R&D Capabilities08

 Corporate Philosophy for the Sysmex Group

53 Diverse Human Resources09

 Sysmex’s Stakeholders

10 Materiality

Sysmex’s Value Creation
By co-creating new value with our stakeholders, we strive to contributeto the development of healthcare and the healthy lives of people.

12

 To Our Stakeholders

17 Sysmex’s History

19

 Sysmex’s Value Creation21

 Working with Medical Institutions to Resolve Social Issues

25 Performance Highlights

27

 Initiatives Targeting COVID-19

Strategies for Achieving Sustainable Growth
As the healthcare market continues to grow, we aim to help extend healthy lifespans throughefforts to resolve medical issues in various regions, as well as achieving further growth.

30

 Management Plan

31

 Looking Back on the Previous Mid-Term Management Plan

33

 Sysmex’s Positioning34

 A Changing Market Environment35

 New Mid-Term Management Plan (Fiscal 2021 to Fiscal 2023)

37

 Group Key Actions43

 Initiatives Targeting a Reduction in Environmental Burden through Activities

45

Sysmex Report 2021

OUR PLATFORM

 Corporate Message

at Business Offices

547Management Base to Support Sustainable Growth Financial Policy

68

OUR PERFORMANCEAND COMPANYINFORMATION

55

 Corporate Governance59

 Risk Management61

 Members of the Managing Board

65

 Conversation with Outside

Members of the Managing
Board
67

 Executive Officers

Activity Report and Corporate Overview
69

Management’s Discussion and Analysis

83

Stakeholder Engagement

75

Consolidated Financial Data (10 Years)

85

S upporting Healthcare withIn Vitro Diagnostics (IVD)

87

Sysmex’s Businesses

89

Primary Products and Services

77	Consolidated Statement of Financial Position
78

Consolidated Statement of Income78	Consolidated Statement ofComprehensive Income

92

Profit Model

Consolidated Statement of Changes in Equity 93
79	

Terminology

80

Consolidated Statement of Cash Flows95

Stock Information81

Non-Financial Targets and Results

96

Corporate Information

Editorial Policy
The Sysmex Report, an integrated report that summarizes financial and non-financial information, is intended to help stakeholders understandSysmex’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 IIRC’s International Integrated Reporting Framework, as well as the Guidance for Collaborative
Value Creation by the Ministry of Economy, Trade and Industry.
System of Disclosure
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 and shareholder• Sustainability Data Book (PDF, published annually)
information.
		https://www.sysmex.co.jp/en/csr/report/index.html• Financial statements
Corporate Governance Report• Financial data, etc.
https://www.sysmex.co.jp/en/corporate/governance.html
Organizations Covered

Accounting Standards

In principle, this report covers the Sysmex Group (including Group
companies in Japan and overseas). In this report, “Sysmex” refers to
the Sysmex Group as a whole. “Sysmex Corporation” refers to theCompany on a stand-alone basis.

In fiscal 2016, we voluntarily adopted the International Financial
Reporting Standards (IFRS). In this report, figures presented up to
fiscal 2014 are in accordance with Japanese GAAP. Figures fromfiscal 2015, are presented in accordance with IFRS.

Period Covered

Forward-Looking Statements

The target period is fiscal 2020 (April 1, 2020 to March 31, 2021), but
the report also covers some activities conducted after April 2021.

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

Sustainability
Data Book

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Corporate Philosophy for the Sysmex GroupOur founder, Taro Nakatani, defined our corporate objective thus: “By providing the products we create, we will help resolve the

In 2007, we formulated the “Sysmex Way,” the corporate philosophy for the Sysmex Group, carrying forward and expanding theissues society faces and make our own lives more fulfilling.” This objective forms the basis for our founding philosophy, the “Three

perspective of our founding philosophy. Our current corporate philosophy consists of three parts: Mission, which defines our

Aspects of Confidence.” These thoughts are carried forward in the “Sysmex Way,” the Sysmex Group’s current corporate philosophy.

social raison d’etre and states how we hope to contribute to society; Value, which describes the values and management style that

INTRODUCTION

An Ideal Unchanged Since Our Founding

we must abide by; and Mind, which expresses the mindset that every employee within the Sysmex Group must observe. Our Core
Behaviors encompass the customers, business partners and employers expressed in the “Three Aspects of Confidence.” In addition,
they declare our objective of instilling confidence in other stakeholders: our shareholders and society.
Founding philosophy, the “Three Aspects of Confidence”

OUR VALUE

Instilling confidence among business partners and employees
defines the basis of our management.

Shaping the advancement of healthcare.
OUR BUSINESS & STRATEGY• Total customer confidence in all of our products.
• Total confidence in our associates in all our business transactions.
• Total confidence of our employees in themselves and all their work.

We continue to create unique and innovative values,
while building trust and confidence.

About ConfidenceWith passion and flexibility, we demonstrate
our individual competence and unsurpassed teamwork.
OUR PLATFORM

Mr. Nakatani noted that “There is no such thing as eternity in thisworld, and every flow must have its ebb. Companies are no exception to this rule.” He went on to share his thoughts on corporate
management and confidence: “We will always strive to instill confidence. It is important to keep in mind that without this effort,
the company cannot survive and proceed with its work.”
Founder: Taro Nakatani

OUR PERFORMANCE AND
COMPANY INFORMATIONTo ensure corporate sustainability in a constantly changing society, Mr. Nakatani believed it is essential that we ourselves continue to take on challenges. In that spirit, Mr. Nakatani visited the United States in 1960 in search of new
business ideas. His attention was drawn to the field of medical electronic devices. When he returned to Japan, Mr.
Nakatani began working with young researchers, conducting studies and engaging in development. In 1963, they succeeded in the commercialization of Japan’s first automated hematology analyzer, the CC-1001.

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Materiality

Sysmex works alongside its business partners and employees to provide products and services to medical institutions andSysmex creates value on society through collaborative relationships with a variety of stakeholders. Based on our relationships withother customers in an effort to resolve medical issues. As our business expands, our stakeholders have grown more diverse.

stakeholders, we have identified issues that we prioritize (materiality) from a medium- to long-term perspective, and we aim to

Nevertheless, our fundamental management philosophy of instilling confidence among our stakeholders has remained unchanged.

realize a sustainable society and achieve sustainable growth for Sysmex.

INTRODUCTION

Sysmex’s Stakeholders

To this end, we promote proactive dialogue and strive to co-create value.

Major Stakeholders

Identifying Materiality Items

The Process of Identifying our Materiality

Materiality items are priorities with a view to realizing a sustainable society and achieving sustainable growth for Sysmex.
Customers
Patients, health examinees, etc.

Community
and society

Societyneeds and expectations elicited through stakeholder engage-

Medical institutions
and commercial labs

in our mid-term management plan. In fiscal 2021, we revisited

Employees

our KPIs alongside our new mid-term management plan andset the reviewed KPIs as our new sustainability targets.

More than 9,000>>For details on materiality items, see the Sustainability Data Book
>Materiality and Sustainability Targets P3

Joint researchand development
partners

Shareholders
Shareholders

ments. We incorporate and promote specific targets and KPIs
Employees

More than 190 countries
and regions

Approximately
12,000Evaluate medium- to long-term risks andopportunities from two perspectives, stakeholders
and Sysmex, and order them according to priority.
Materiality Matrix
https://www.sysmex.co.jp/en/csr/management/materiality.html

Deliberate and approve at management meeting.
OUR PLATFORM

More than 600
companies

STEP 2: Prioritize

STEP 3: Confirm Suitability

More than 200 themes

Distributors

Elicit global social issues and requests fromstakeholders.

ment and Sysmex’s internal and external operating environ-More than 190 countries
and regions

Governments
and public bodies

STEP 1: Understand and Organize the Issues

OUR BUSINESS & STRATEGY(including NPOs)
More than 7.0 billion
people aroundthe world

We have identified these items by taking into account the

OUR VALUE

Stakeholders described outside the circle are categorized according to our Core Behaviors. >>P8

Suppliers
Approximately 250
companies(Key Tier 1 suppliers)

Business
Partners(As of the end of fiscal 2020)

Targets

Materiality

Resolution of medical issues
through products and services• Resolution of medical issues through innovation• Improvement in accessibility to healthcare

Responsible provision of
products and services• Pursuit of quality and trust• Strengthening of supply chain management

Realization of an attractive
workplace• Provision of a comfortable working environment• Promotion of diversity and inclusion• Development of human resources• Promotion of health and occupational safety

SDG Targets

OUR PERFORMANCE AND
COMPANY INFORMATION

Main Dialogue with Stakeholders¢ Materiality Items Supporting Sustainable Growth

See page 83 for details.

Customers

Medical institutions and commercial labs

• Communication through sales, service and support activities• Collection of the voice of the customer (VOC)• Holding of scientific seminars (online)

Employees

Sysmex Group employees• Corporate culture surveys and dialogue based on their results• Configuration of a global internal reporting system• Council meetings between labor and management

Environmental consideration• Communication through open innovation and alliances• Communication based on procurement policies• Holding of meetings with distributors• Environmental consideration through productlifecycles• Reduction in environmental burdens throughactivities at business offices

Reinforcement of governance• Corporate governance• Compliance• Risk management

Sustainable growth• Sales growth• Increased operating profit• Generation of free cash flow

Business
Partners

Joint research and development partners
Suppliers
Distributors

Shareholders

Shareholders and investors• Proactive disclosure and dialogue• Holding of various briefings

Society

Governments and public bodies
Community and society (including NPOs)• Collaboration and dialogue with government agencies andinternational organizations• Participation in local communities

Mid-Term Management Plan

Main Dialogue with Stakeholders

Stakeholders>>P35>>Main Sustainability Targets P42

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To Our Stakeholders
INTRODUCTION

We foster innovation to resolve
medical issues.

By co-creating new value with our stakeholders, we strive to contributeto the development of healthcare and the healthy lives of people.

OUR VALUEOUR BUSINESS & STRATEGY

Since the novel coronavirus disease (COVID-19) broke out in late 2019,
mutant strains have continued to emerge, and it is unclear when the
pandemic will abate. Amid this ongoing crisis, many people are doing theirutmost to protect and maintain the essential Health Services and Systems.
I offer my heartfelt thanks to all of you who are working on the front lines ofthis pandemic.
Healthcare markets face a variety of medical issues in addition to the
COVID-19 pandemic. For example, developed countries are focused on
curtailing healthcare expenses amid the accelerating trend toward fewer
children and aging societies. Meanwhile, emerging markets are putting
healthcare infrastructures in place. Developing countries are working toenhance access to medical care. In addition, technological innovation isdriving dynamic changes through new testing and treatment methods.
Sysmex seeks to resolve medical issues by providing high-value-added
products and services and fostering innovation. We will also continue to contribute toward extending healthy lifespans by “Shaping the advancement ofhealthcare,” our mission as identified in the “Sysmex Way.”OUR PLATFORM
OUR PERFORMANCE AND
COMPANY INFORMATION

Hisashi Ietsugu
Chairman and CEO

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INTRODUCTION

In the post-COVID world, what sort of changes do you see for the

COVID-19 led to a decline in reagent sales in the hematology, urinalysis and immuno-

I think COVID-19 marked a major turning point for the healthcare industry. For example,

chemistry fields, particularly in the first half. Meanwhile, other factors boosted revenue:

enhancing access to medical services has long been an issue in emerging markets andin the hemostasis field demand increased for monitoring indicators of increasingly severe

developing countries. COVID-19 made it apparent that even developed countries do not

COVID-19 infections, and instrument sales rose in EMEA, China and Japan. Lockdowns andnecessarily have sufficient healthcare infrastructure in place themselves. Individual coun-other restrictions on movement in various countries hampered conventional activities, buttries are having to rethink their initiatives for enhancing their healthcare infrastructures.

we responded flexibly to the changing environment by conducting sales and marketing

Primary care markets may also be expanded to prevent the over-concentration of medical

activities online. Under our business model, we continue to generate recurring revenuecare. With COVID-19 infections increasing, the U.S. Food and Drug Administration (FDA)

from the sale of reagents and services once instruments have been sold, so the increased

approved home testing kits for COVID-19. This is one example of how testing locations may

number of installed base in fiscal 2020 will continue to contribute to future growth. Fiscal

become more dispersed, moving toward clinics and pharmacies. In response, Sysmex will2020 was a difficult year, with COVID-19 leading to all manner of restrictions, but I offer

need to refocus its efforts. To date, we have excelled in products for large-scale hospitals

my sincere thanks to the medical professionals and to our employees who fought on theand commercial labs. Going forward, we will focus on products that are more compact andfront lines of the pandemic.

easy to operate.

We made steady progress on the important priorities established under our previous

At the same time, issues that were emerging before the COVID-19 pandemic still

mid-term management plan. We launched new products in the hematology and hemostasis

remain to be resolved. The populations of developed countries and China are aging, un-fields, and we renewed agreements with alliance partners, thereby expanding our direct

derscoring the need for medical treatment and testing for related diseases. In addition, we

sales and service area and reinforcing collaborative relationships.

believe demand will shift toward more sophisticated medical care and testing, as artificial
intelligence, big data, robotics and various other technological innovations are applied to
the field of medicine, leading to more high-value-added products and services. Gaining

robotic-assisted surgery system. In these ways, we strengthened our competitive advantage

regulatory approval and insurance coverage for these new sorts of tests will take time andand made clear progress in bolstering our business portfolio. Going forward, we will work

money. We need to build structures that will promote speed and efficiency.

to obtain regulatory approvals at an early stage in various countries, as well as expanding>>A Changing Market Environment P34

OUR PLATFORM

We expanded operations in the life science field by introducing a system to test forbreast cancer lymph node metastasis into the Chinese market. In addition, we launched a

OUR BUSINESS & STRATEGY

Q2 healthcare market, and the IVD market in particular?

OUR VALUE

Q1 Looking back, how would you rate fiscal 2020?

our sales and service structure in an effort to rapidly provide new value to customers.
OUR PERFORMANCE AND
COMPANY INFORMATION

We faced issues in our efforts to develop tests for COVID-19; getting the tests tothe launch stage took time. I think the reason we were unable to get up to speed quickly
enough was because COVID-19 testing comes in the form of antigen/antibody tests as well
as PCR tests, so involves both our IVD and Life science businesses. Under our new midterm management plan, we will seek to bolster effectiveness by integrating the strategy
formulation/promotion and R&D functions of both businesses. We will revamp the organizational structure so we can move ahead more quickly.
In fiscal 2020, profit inevitably declined due to COVID-19. In response, we havestopped increasing annual dividends—a practice we had continued for 18 consecutive fiscal
years. Instead, we have kept dividends at the same level as in the previous fiscal year.
Although it was unfortunate that we had to disrupt this trend, in fiscal 2021 we expect
to again pay out higher dividends, based on an upturn in operating performance.
>>Looking Back on the Previous Mid-Term Management Plan P31>>Management’s Discussion and Analysis P69

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INTRODUCTION

Q3

What do you see as important issues with respect toSysmex’s sustainable future growth?

growth. We expect the results of this investment to start becoming apparent in the final
year of our new mid-term management plan. For that year, we are targeting an operating
margin of 19% and aim for ROE to increase to 15%.
Another major theme of the current mid-term management plan is the formulation of
new long-term management goals post-2025 to factor in the changes that are underway intors that determine customer satisfaction are changing; the market environment is evolv-

our operating environment. To grow our business and address the issues society faces, we

ing as a result of technological innovation and regulatory changes. We need to maintainwill consider such matters thoroughly and swiftly as we pursue sustainability management

a constant effort to stay abreast of these developments. As well as products and services,with a character that is distinctively Sysmex.

supply chains themselves may change substantially. Even if we deliver high-quality prod->>New Mid-Term Management Plan P35

OUR VALUE

Continuing to enhance customer satisfaction is our important mission. That said, the fac-

ucts, the market could reject them if, for example, too much carbon dioxide is emitted
across the supply chain prior to the products arriving at their destination. Such realities
we could be left behind.
We have grown by successfully anticipating and responding to the changes of the

OUR BUSINESS & STRATEGY

could hinder Sysmex’s sustainable growth. If we are unable to match this paradigm shift,

Q5 What closing message would you like to leave with stakeholders?

times: the automation of testing, the globalization of business, and the shift toward information technologies as Internet adoption has increased. To sustain this consistent growth,rather than relying on the successes of the past we must constantly remain vigilant tocurrent trends and respond swiftly to changes. To do so, it is extremely important to cultivate diversity by recruiting and training people equipped with a new sense of awarenessand experience. By creating an environment where people with different characteristics—
we will prevent opinions within the Company from becoming lopsided. These efforts will

fostering innovation. However, we cannot achieve such goals on our own. We need to cocreate new value with our stakeholders.
We will continue to contribute toward realizing a sustainable society and enhancing
corporate value. We would like to ask our stakeholders for their continued support andOUR PLATFORM

including generations, genders and nationalities—can make the most of their capabilities,

In addition to growing its business, Sysmex has a mission to resolve medical issues by

understanding of our endeavors.

also help us grow. Rather than focusing on correcting our weaknesses, I want us to cultivate a new corporate culture that recognizes and makes the most of individuals’ distinctive characteristics.
>>Diverse Human Resources Supporting Sustainable Growth P53

OUR PERFORMANCE AND
COMPANY INFORMATION

What were the aims behind introducing the new mid-term

Q4 management plan?

We formulated the new mid-term management plan to guide us over a three-year period
toward the long-term management goals (2025) we formulated in 2018. To achieve sustainable growth, under the new mid-term management plan we will expand our scale of business further by continuing to move forward with the themes set forth under the previous
mid-term management plan, such as launching new products in the hematology and hemostasis fields. By developing technologies diagnose Alzheimer’s disease by liquid biopsy,
and capturing market demand for our robotic-assisted surgical system, we will cultivate
new businesses that propel us beyond the limits of organic growth. Furthermore, we aim
to reinforce management quality through digital transformation and expansion of our HR
portfolio. Profitability may dip temporarily as we absorb costs related to global regulatory
registration of new products and investment in digital transformation. We are convinced,
however, that such investment is necessary from the standpoint of medium- to long-term

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Fiscal 2023 target in the mid-term
management plan:

Sysmex’s History¥420.0 billion

in vitro diagnostics and developing its business globally.

INTRODUCTION• Increasing sales in emerging markets• Enhancing our business portfolio

Since the time of its founding, Sysmex has grown by anticipating future needs, expanding its business model in the domain of

Fiscal 2020 net sales

Going forward, we will work to accelerate sustainable growth by quickly ascertaining changes in the Business environment and¥305.0 billion• Increasing our share of the North
American hematology market• Chinese market expansion

developing our business.

Commenced direct sales
and service in India (2019)

OUR VALUE• Promotion of direct
sales in Europe• Building a business foundation• Moving toward the top share of theJapanese hematology market

Established bases in Central and SouthAmerica and Africa (2010s onward)

Overseas
sales ratio:

84.0%

Commenced direct sales andservice in the United States (2003)

Sysmex’s Initiatives
Accelerating overseas
business development

Entered a global alliancewith F. Hoffman-La RocheLtd. related to hematology
products (1998)

Commenced direct sales and service inthe United Kingdom (1991)
Opened a representative office inthe United States (1977)
Opened a representative officein Germany (1972)

Established a joint venturecompany in China (1995)

Established local subsidiaries in ASEAN
countries and Brazil (1990s onward)

Domestic sales
Overseas sales

Establishment(FY) 1968

1970

1975

1980

1985

OUR BUSINESS & STRATEGY

Accelerated direct salesin Europe (2000s onward)

1990

2000

1995

2005

2010

2015

2020

2023

Entered the hemostasis
field (January 1984)

Entered the urinalysis field(September 1974)

Made International
Reagents a subsidiary(April 2002)

Entered the immunochemistry field(March 1987)

Expanding our business

Made CNA a subsidiary Made Inostics and(April 2007)
Partec subsidiaries(October 2013)

OUR PLATFORM

Entered the life science field, opened
the Central Research Laboratories (April 2000)

Made RIKEN GENESIS
a subsidiary (June 2016)

OUR PERFORMANCE AND
COMPANY INFORMATION

Launched Japan’s first
automated hematology
analyzer (December 1963)

Launched a robotic assisted
surgery system (December 2020)

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

Launched the Sysmex brand (February 1978)

Enhancing management
quality

Began offering the SNCS
network service (December 1999)

Formed alliance in thehemostasis field with thecurrent Siemens Healthineers(March 1995)

Changed company name to Sysmex Corporation (October 1998)

Listed on the Second Section of the Osaka
Securities Exchange (November 1995)

Announced fundamental management policy,
the “Three Aspects of Confidence”

Established a bio-diagnostic
reagent base (April 2019)

Listed on the first sections of
Listed on the Second
the Osaka and Tokyo stock
Section of the Tokyo
Stock Exchange (July 1996) exchanges (March 2000)

Opened a human resource development center (April 2015)

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

Introduced a globally consistent job-based
human resource management system (April 2020)

Historical Context and Needs in Diagnostic Testing
Number of tests rises due to growing demand for healthcare

Rise in demand for better efficiency driven by sharply rising healthcare costs

Advances in IT

Application of technological innovation to healthcare

Social Changes
High economic growth in Japanl 1970s: Trade liberalization

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Stable economic growth in Japan

Globalization and the acceleration of ITl 1990: End of the Cold War
l 1990s: Popularization of the Internet
l 1993: Formation of the EU

l 2000s: Rise of BRIC

Transition toward a sustainable societyl 2008: Global financial crisis

l 2015: Adoption of SDGs
l 2019: Outbreak of COVID-19
l 2015: Adoption of the Paris Agreement

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Sysmex’s Value Creation
INTRODUCTION

Our business centers on in vitro diagnostics (IVD), based on our mission of “Shaping the Advancement of Healthcare.” This mission
is expressed in the “Sysmex Way,” the corporate philosophy of the Sysmex Group. By leveraging our unique management resources, we provide high-value-added products and services, aiming to help extend healthy lifespans and optimize medical costs.

Impact on
Stakeholders

Customer Feedback Aimed
at Creating New Diagnostic Value

Over 7 Billion People across the Globe(Hospitals and Commercial Labs inMore than 190 Countries and Regions)• Instruments x reagents x IT, expertise, and technology platforms

R&D

Genes
Products

Proteins(approximately 250 companies*)

Main Values Provided
by Sysmex (Outputs) >>P21

Regulatory
Registration

Production Bases That Ensure High Quality anda Stable Global Supply
Production• Seven instrument factories, 14 reagent production bases− Industrial accidents+ Income taxes paid: ¥13.7 billion (fiscal 2020)+ Dividends: ¥15.0 billion (fiscal 2020)

Environment− CO emissions− Water consumption− Electricity use− Waste emissions− Use of animal-derived raw materials
2

OUR PERFORMANCE AND
COMPANY INFORMATION

1 Development and Provision of a Diverse
Product Portfolio
2 Support for the Healthcare Professionals
Who Underpin Testing
3 Development and Provision of Tests withHigh Diagnostic Value
4 Environmentally Considerate ProductDevelopment and Business Activities+ More than 9,000 employees
OUR PLATFORM

Global Sales andService Structure*Key Tier 1 suppliers

Technology Platforms

Regulatory Application Structure for Delivering
Products throughout the World

Production Structure+ Improvement in accessibility to healthcare+ Optimization of medical costs+ Collaboration with suppliers

IT

R&D Capabilities

treatment methods that reduce theburden on patients

Society

SysmexStable Financial
Foundation+ Early detection of disease+ Optimal diagnoses and choice of

Cells

Reagents

Instruments

Extending healthy lifespans

OUR BUSINESS & STRATEGY

1 Enhanced Testing Systems
2 More Productive Laboratories
3 Help in Determining Diagnoses andTreatment Methods
4 Lower Environmental Impact for
Medical Institutions

R&D Structure for Resolving Medical Issues

Management Resources
for Creating Value >>P49(Patients, Health Examinees, etc.)

Medical Institutions

OUR VALUE

Feedback>>Non-Financial Targets and Results P81+ Main impacts we want to increase− Main impacts we want to reduce

Diverse Human Resources

Distribution

Sales

An Efficient Supply Chain for Delivery
to More Than 190 Countries and Regions

Global Sales Structure• Transition to local reagent production• A global system for direct sales
and a distributor network• Initiatives involving a modal shift• A professional sales team• Alliances with collaborators

Service andSupportService and Support toEnhance Customer Satisfaction• Online service and support• Global direct service structure• Extensive training for distributors

Expectations and Requests for Resolving Social and Medical Issues

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Working with Medical Institutions to Resolve Social Issues

Outputs Sysmex Provides to Medical Institutions

1 Enhanced Testing
Systems

Sysmex’s Main Initiatives• Meeting the needs of a wide range of medical institutions by
developing a portfolio of diverse instruments, from high-end
to compact models• Leveraging alliances with major global companies to expand
sales channels• Responding to regulatory application flows that differ bycountry and region to supply products swiftly• Resolution of medical issues through products and services• Responsible provision of products and services>>Sustainability Data Book > Improvement in Accessibility to Healthcare P10

2 More Productive
Laboratories

Sysmex’s Main Initiatives• Using Caresphere to prevent breakdowns• Moving external quality control online• Holding scientific seminars globally• Moving product training online• Through cooperation with JICA, helping healthcare professionals in emerging markets and developing countries todevelop their skills

Related Materiality Items• Resolution of medical issues through products and services• Responsible provision of products and services>>Sustainability Data Book > Pursuit of Quality and Trust P16

usability and enhanced functionality with the aim ofThrough service innovation initiatives, Sysmex continues to earn high marks in customer
satisfaction surveys for its products, services and support.

expanding our portfolio in emerging markets¢ Customer Assessment in the United States (Overall Service Performance)

Tomohiro Kuroiwa

Sysmex earns highest customer satisfaction rating for the past 14 years

Director, Hardware Technology Group, System Engineering Division

The multiparameter automated hematology analyzer that we recently developed (a three-part white blood cell differential model) is
designed mainly for emerging markets. We developed this analyzer to offer even better functionality than current models.
The utilization rate of three-part white blood cell differential models tends to be high, as they target small hospital and clinics, aswell as mountainous regions and islands where access is difficult. As part of the development process, we sought input from customers
in emerging markets. We learned that some medical institutions in these markets faced unique problems, such as being unable to quickly repair instruments that failed due to difficulties in transporting service personnel and parts. To enable customers to use our productswith confidence, we incorporated measurement technologies allowing minute samples, shorter measurement times, and other featuresof high-end instruments. We also worked to develop instruments that offered better usability in terms of durability and serviceability.
The project team centered on young developers, so we called on pockets of expertise within the Company and cultivated teamwork. This was a valuable experience that should lead to sustainable growth for Sysmex.
I look forward to continuing to develop products that meet customer needs so we can help enhance and promote testing systems
in emerging markets and around the world, while providing new value through testing.

OUR PERFORMANCE AND
COMPANY INFORMATION

Developing new products that feature customer

In healthcare settings, diagnosis and treatment are largely basedon testing results, so swiftly delivering test results that are
accurate is of paramount importance. Meanwhile, laboratory
operations are becoming more complex as testing grows morediverse, leading to a call for more efficient laboratory operations.
In addition to providing accurate test results that deliver
high clinical value, Sysmex uses ICT to reduce downtime,
prevent breakdowns and ensure swift recovery in the unlikely
event that instruments fail. We work to enhance laboratory
productivity by building service and support systems thatprevent interruptions in medical care.
We offer online product training for healthcare professionals so they can take part regardless of their location. We
offer support for skill enhancement among healthcare professionals in developing countries and hold scientific seminars to
impart leading-edge medical information. In these ways, we
make an ongoing effort to raise the level of healthcare.
To ensure that we provide high-quality services and support for both direct and indirect sales, we engage in initiatives tothoroughly educate our own employees and distributors’ staff.

OUR PLATFORM

Related Materiality Items

2 Support for the Healthcare Professionals
Who Underpin Testing

OUR BUSINESS & STRATEGY

Testing, sometimes called the “gateway to healthcare,” isessential to disease diagnosis and treatment, but customer
demand is uneven. Developed countries and emerging markets
differ in terms of medical institutions’ budgets, the number oftests per day, and outbreaks of disease. Developed countries,
where optimizing medical costs is a topmost consideration,
tend to call for more productive solutions. Meanwhile, demand
exists for tests that deliver high clinical value. Emerging markets are often characterized by growing populations and an
uptrend in the number of tests as health insurance systems are
put into place. At the same time, these countries have insufficient medical institutions, so the number of tests per instrument tends to be high. Also, some countries are in regions
affected by tropical diseases such as malaria and dengue fever.
Resolving the world’s medical issues and extending
healthy lifespans require solutions that meet these regionallyspecific and on-site medical needs. Sysmex, with a broad-ranging product portfolio centered on its mainstay field of hematology, is helping to expand testing capability in more than 190
countries and regions around the world.

What Is Achieved at
Medical Institutions

Outputs Sysmex Provides to Medical Institutions

OUR VALUE

1 Development and Provision of a Diverse
Product Portfolio

What Is Achieved at
Medical Institutions

INTRODUCTION

By providing high-value-added instruments, reagents and services, primarily in the IVD domain, Sysmex
works with medical institutions (such as hospital laboratories and commercial labs) to help extend the healthy
lifespans of the world’s 7 billion or more people, optimize medical costs and reduce environmental impact.

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

9.28
9.11

6.0

2007
Sysmex2008
Competitor 1

2009

2010

Competitor 2

2011
Competitor 3

2012
Competitor 4

2013

2014

2015

2016

2017

2018

2019

2020

Industry Avg.
Note: Scale of 1 to 6 from 2007 to 2012, scale of 1 to 10 from 2013 to 2020
Source: IMV ServiceTrak™ 2020 Hematology

21

Sysmex Report 2021

Sysmex Report 2021

22

INTRODUCTION

What Is Achieved at
Medical Institutions

Outputs Sysmex Provides to Medical Institutions

3 Help in Determining
Diagnoses andTreatment Methods

Sysmex’s Main Initiatives• Developing and providing tests related to COVID-19• Providing cancer gene testing• Jointly developing blood-based diagnosis for Alzheimer’s disease• Promoting the development of drug susceptibility tests forurinary tract infections• Practical realization of AI technology in the hematology field• Resolution of medical issues through products and services• Responsible provision of products and services>>Liquid Biopsy P87 >>Initiatives Targeting COVID-19 P27>>Sustainability Data Book > Resolution of Medical Issues throughInnovation P8

4 Lower Environmental
Impact for Medical
Institutions
Sysmex’s Main Initiatives• Developing and popularizing concentrated reagents(hematology, immunochemistry, others)• Developing instruments that are more compact and use lesselectricity• Reducing waste by making reagent containers more compact• Lowering CO2 through production of raw materials forreagents (such as using silkworms)

Related Materiality Items• Responsible provision of products and services• Environmental consideration>>Initiatives to Reduce the Environmental Impact of Business Activities P43>>Sustainability Data Book > Environmental Consideration P38

By developing and providing concentrated reagents,

amid the COVID-19 pandemic

we reduce CO2 emissions, save resources,

Noriko Oka

decrease waste and conserve oil resources. This also enhances usability.
¢ Reagent with 25 Times Concentration
Reagent volume (L)100

Given the urgency of the matter, on this development project our foremost objective was to bring a solution to the market as quickly
as possible. To do so, we did our best to draw on the expertise of related departments in setting product specifications, deciding how to
pursue development and responding to assumed risks.
As we were working in the middle of a pandemic, situation was changing moment by moment. This meant that regulatory applications
were affected by sudden additions to product requirements. Despite having to respond to such unexpected changes, we were able to coordinate with the Regulatory Affairs Department to select the best strategies. Consequently, we succeeded in obtaining early-stage regulatory
approval. Our activities also served to foster interaction that went beyond departmental boundaries, including the sharing of personnel and expertise. I thought this interaction was very meaningful, and I wholeheartedly look forward to taking part in product development in the future.
On the technology front, we used the technology cultivated to date to simultaneously develop a sample extraction fluid for test samples
containing the deactivated virus. This reduced the risk of infection when transporting samples and handling them at laboratories. It also provided an environment in which healthcare professionals could conduct testing safely, earning us strong positive feedback from our customers.
With this product, I keenly felt the weight of responsibility for providing test results directly to medical decision. At the same time, theentire Company pulled together on this project, which made it feel very worthwhile. Drawing on this experience, I will communicate moreclosely with related departments, and look forward to taking up the challenge of developing products that provide value to our customers.

23

Sysmex Report 2021

20L
20L
50

• Less environmental impact• Decreased frequency ofreagent changing• Reduction in storage space

20L

1/25

20L
20L
0

Conventional reagent

4L

Concentrated reagent

OUR PERFORMANCE AND
COMPANY INFORMATION

Developing a SARS-CoV-2 antigen detection reagent

Manager, Business Incubation Division

OUR PLATFORM

Related Materiality Items

In response to climate change and other urgent global environmental issues, reducing environmental impact is one of themost important issues medical institutions in various countries
are facing.
Sysmex has been working for some time to reduce theenvironmental impact of medical institutions. We endeavor
to provide products that conserve energy and reduce reagent
use. We have revised our reagent containers and packaging todecrease waste. One specific example of these efforts involves
reagents, which are essential to testing. We have developed concentrated reagents, which reduce the amount of waste at laboratories, frequency of transportation thanks to smaller package
and more lightweight. We have established reagent production
bases around the world and shifted production from Japan tothese locations, thereby shortening the distances reagents aretransported to decrease CO2 emissions during transport.
We continue to prioritize initiatives to lower environmental
impact through our business activities. Going beyond medical
institutions, we endeavor to reduce CO2 across the supply chain byreviewing resource use during our product development activities.

OUR BUSINESS & STRATEGY

In the IVD market, customers require the development of highvalue-added testing. Emerging markets and developing countries
require tests for tropical diseases, such as malaria and dengue
fever, while customers in developed countries call for new testingthat facilitates the adoption of treatment methods incorporating
leading-edge technologies. Sysmex has been quick to ascertain
the need for, and is promoting, the development of tests that arein high demand. These include cancer gene testing, which weare pursuing with a view toward cancer genomic medicine, andblood tests (liquid biopsy) to diagnose Alzheimer’s disease.
When COVID-19 began affecting people around the worldfrom the end of 2019, the development of systems to provide
quick and simple testing became a common global issue.
Sysmex responded by becoming the first in Japan to obtainregulatory approval for PCR test kits for COVDI-19. We also
leveraged the platform we have cultivated in the immunochemistry field to develop COVID-19 antigen tests and tests topredict severity, assisting in efforts to provide diagnoses anddetermine treatment methods.

4 Environmentally Considerate ProductDevelopment and Business Activities

OUR VALUE

3 Development and Provision of Tests withHigh Diagnostic Value

What Is Achieved at
Medical Institutions

Outputs Sysmex Provides to Medical Institutions

Some instruments in the hematology andimmunochemistry fields make use of reagentsthat are concentrated to 25 times the level ofconventional reagents.
In addition to curtailing CO2 emissions
as outlined above, concentrated reagents are
more compact, so they require less material
for containers and packaging, saving resources,
and laboratories accordingly generate lesswaste. We have also transitioned from conventional polyethylene packaging to paper cartons
to conserve oil resources.
Using concentrated reagents means thatreagents need to be changed less frequently.
This saves storage space and contributes substantially to usability in other ways.

Sysmex Report 202124Performance Highlights (As of the end of fiscal 2020)¢ Operating Profit/Operating Margin

305.0 billion¥

51.7 billion

¥

¥

17.0%

¢ R&D Expenses/
R&D Expenses as a Percentage of Net Sales

33.1 billion¥

158.6522.5 billion 7.4%¥

(Up 1.0% year on year)(Down 6.3% year on year) (Down 1.3 percentage points year on year)(Down 5.0% year on year) (Down 5.0% year on year)(Up 3.5% year on year) (Up 0.2 percentage point year on year)

Despite the impact of COVID-19 on reagent sales,
instrument sales rose (chiefly in EMEA,
China and Japan), boosting net sales.

SG&A expenses declined year on year,
while gross profit fell as a result of lower reagent sales,causing operating profit to fall.

Foreign exchange loss declined, but operating profit also fell,
resulting in lower profit.

These expenses rose as we continued to invest in
new IVD products and testing related to COVID-19.

Net sales

305.0 (¥ billion)

Operating profit

33.1 (¥ billion)
Operating margin

R&D expenses as a percentageof net sales

158.65 (¥)

EPS

17.0 (%)

US dollar
Yuan

22.5 (¥ billion)
OUR VALUE

123.7 (¥)
106.1 (¥)

Euro

R&D expenses

Profit attributable toowners of the parent

51.7 (¥ billion)

INTRODUCTION¢ Net Sales¢ Profit Attributable to Owners of the Parent/
Basic Earnings per Share (EPS)

7.4 (%)

15.7 (¥)

Japanese GAAP2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (FY)2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (FY)IFRSJapanese GAAP

¢ Net Sales by Destination

IFRS

Japanese GAAP¢ Sales by Business

Asia Pacific

Japan

8.0%

16.0%

Others 5.2%

Hematology

59.0%Life Science 4.3%

2012

2013

2014

2015

2016

2017

Japanese GAAP

20182019 2020 (FY)IFRS

¢ Total Shareholder Return (TSR) (Annualized Rate)¢ ROE/ROA

11.3%

8.1%

(Down 1.6 percentage
points year on year)(Down 1.4 percentage
points year on year)

23.4%

11.2%

(Past 10 years)(Past 5 years)

We have outperformed TOPIX due to stable dividends andlong-term increases in our share price.

These returns fell as a result of lower profit and increases in equity
attributable to owners of the parent and total assets.

FCM 0.5%

Sysmex23.4%

OUR PLATFORM

China

2011

IFRS

OUR BUSINESS & STRATEGY2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (FY)

Clinical Chemistry

27.5%

0.9%

FY2020

FY2020Immunochemistry

ROE

5.1%

Urinalysis 7.2%

EMEA

Americas

26.9%

21.6%

Sysmex

TOPIX

11.2%

10.8%

11.3 (%)

TOPIX

10.2%

8.1 (%)ROA

Hemostasis 17.8%
2012

2013

2014

2015

2016

2017

Japanese GAAPOUR PERFORMANCE AND
COMPANY INFORMATION

20112019 2020 (FY)

2018

IFRS

Past 10 years

Past 5 years

Non-Financial Performance¢ Global Business Development

9,510

Employees (Group total)

77

Companies (Group total)¢ Scope 11 and 22 Greenhouse Gas Emissions/
Basic Unit Emissions
Japan

Americas

3,826

12

1,257

10

¢ Percentage of Female Managers/
Percentage of Next-Generation Female Managers

19,510t-CO 0.64t-CO /billion
2

Sysmex Corporation
Percentage ofnext-generation
female managers

2(Down 24% year on year) (Down 25% year on year)

21.8%

Emissions were down as we used less electricity due to the introductionof remote working, as well as to a change in our CO 2 emission factor.

Sysmex Group
Percentage offemale managers

Scope 1 and 2 Greenhousegas emissions

16.2%

19,510 (t-CO )
2

China

782

4

Basic unit emissions

0.64 (t-CO /billion)
2

Asia Pacific
EMEA

2,673

25

Sysmex Report 2021

972
39

10.6%

Sysmex Corporation
Percentage offemale managers

8.7%

7.9%

12
5.7%
2016

2017

2018

2019

2020 (FY)

1. Scope 1: Greenhouse gases emitted directly by Company facilities, factories andcompany vehicles
2. Scope 2: Greenhouse gases emitted indirectly by the Company due to energy use

2013

2014

2015

2016

2017

2018

2019

2020 (FY)

Sysmex Report 2021

26

Initiatives Targeting COVID-19
INTRODUCTION

To address the COVID-19 pandemic, we worked to develop new reagents and services in the aim of helping people
return to their everyday lives with peace of mind as quickly as possible.
Sysmex will continue with initiatives targeting COVID-19. Through testing, we will work to prevent infections fromincreasing. We will also provide support for medical settings and work to ensure that patients receive appropriate medical care.
>>A Changing Market Environment P34 >>Risk Management P59 >>Impact of the COVID-19 Pandemic P70

Sysmex’s Initiatives Amid COVID-19 pandemic
Responding to the “new normal”

Pandemic countermeasures in China• Deliveries to hospitals in Wuhan• Provision of supplies
December2019

OUR VALUE

Developing and providing new products and services

Contributing to local communities and society

Conducted online seminars and further
enhanced virtual training

Launched an antibody lab assay service,
for research use only (in July, launched a

Launched a lab assay service for researchon cytokines related to COVID-19

Received regulatory approval for aninterferon -λ3 reagent as a test kit to assist in
determining exacerbation risk (obtained

reagent for research to detect antibodies)

Moved the PCR testing lab to the
Research and Development
Center and expanded its functions

insurance coverage in March 2021)

March
2020

From
March 2020

June
2020

July
2020

In cooperation with the Cityof Kobe and SRL, Inc. (now
H.U. Frontier, Inc.), began
operating a PCR testing lab

November
2020

December2020

Received regulatory approvalin Japan for a SARS-CoV-2
antigen detection reagent

April
2021

May 2021

OUR BUSINESS & STRATEGY

Obtained the first marketing
approval in Japan for a
COVID-19 test kit using the
RT-PCR method (made by BGI)

June
2020

Obtained regulatory approval in Japan
for COVID-19 test kit developed using
the RT-PCR method(received regulatory approval for
quantitative testing in June 2021)>>SARS-CoV-2 Antigen
Detection Reagent P23

Developments and Initiatives Aimed at Reinforcing Our PCR Testing System

Developing Online Services for Users

As a company that supports testing and healthcare, Sysmex puts every effort into enhancing our testing systems. In the early stagesof the pandemic, in March 2020, we were the first in Japan to obtain regulatory approval for a COVID-19 test kit (RT-PCR method),which we quickly provided to medical institutions. We swiftly introduced products aimed at reducing medical professionals’ infection
risk during PCR testing, while boosting testing efficiency. For example, we provided a SARS-CoV-2 deactivation reagent, RNA extraction kit, and sterilized cotton swabs (special swabs for collecting saliva) to streamline the work of virus deactivation and achieve a
testing flow that made use of regular transport routes.
Thereafter, when resource and reagent shortages emerged in Japan, we responded to PCR testing delays by developing a testing
kit using an all-domestic production system. We obtained regulatory approval in Japan in April 2021. This reagent uses an automated
PCR testing robot system we developed in collaboration with Kawasaki Heavy Industries, Ltd. and Medicaroid Corporation, and isbeing used at airports and other facilities.

Sysmex uses networks to provide quality control and operational support for instruments, aswell as to promote virtual training for customers. To prevent an increase in infections while
imparting the most up-to-date information to customers amid the pandemic, we stepped up
our online initiatives. For example, we began holding online versions of activities previously
conducted in-person, such as product introduction events and scientific information seminars. In addition to raising awareness of Sysmex’s products and services in a safe environment, we are creating new networks to foster bilateral communication.

Creating and Providing New Diagnostic Technologies

To strengthen the system for PCR testing in Kobe, in June 2020 we collaborated with theCity of Kobe and SRL, Inc. (now H.U. Frontier, Inc.) to form Japan’s first industry–government
alliance to open a PCR testing lab. As of May 2021, the lab had conducted more than 20,000
tests. To further increase the number of PCR tests and expand the lab’s functions, in May
2021 we relocated the lab to our Research and Development Center in Kobe. The lab uses
an automated PCR testing robot system to handle around 1,500 tests per day (five times theprevious number). This system also helps reduce infection risk to the people conducting thetests. We intend to continue contributing to the local community through enhanced testing
systems for COVID-19.

In addition to PCR testing, as the COVID-19 pandemic intensified around the world demandrose for a wide range of other testing methods—for diagnosis to treatment and recovery.
Sysmex leveraged its fully automated immunochemistry platform for operation in Asia, particularly in Japan and China, to develop new reagents. As a result, in addition to an antigen
detection reagent and an antibody measurement reagent for research, we generated products
and services to contribute to research, diagnosis and treatment. For example, we launched a
lab assay service for research on cytokines believed to be related to increases in severity.
Sysmex would be unable to create these new diagnostic technologies all on its own.
Collaboration with medical facilities is essential to the process of using patients as subjects
and analyzing and evaluating clinical data. We collaborate and conduct R&D on a regular basiswith medical and research institutions, companies, and other stakeholders. For SARS-CoV-2,
we conducted joint research with the National Center for Global Health and Medicine tocreate new diagnostic reagents to help in assessing the exacerbation risk among patients who
have tested positive for COVID-19. This sort of teamwork with partners both within and outside the Sysmex Group enables us to promote R&D aimed at producing highly valuable tests.

l Contributing to Communities and Society
Opening a PCR Testing Lab through Government–Industry Collaboration

Promoting Global Corporate Citizenship Activities by Employees
Fully automated immunochemistry system

3D booth in an online exhibition (Germany)
Activity Case Studies• Webinar to impart scientific information
related to Sysmex products and COVID-19(individual regions)• Online user training (United States, Russia)

OUR PERFORMANCE AND
COMPANY INFORMATIONl Responding to the New Normal
OUR PLATFORM

l Developing and Providing New Products and Services

Making our own sanitizing liquid (Brazil)
Activity Case Studies• Donating non-contact thermometers (Ghana)• Providing light meals for medical professionals (United States, South Korea)• Providing protective clothing and masks
to medical institutions (China and otherlocations)Sysmex Group companies around the world are leveraging their knowledge, technologies
and facilities to address the social issues of COVID-19. In addition to providing support for
medical professionals, we are using facilities at reagent factories to produce and provide
sterilizing liquid, and employees in regions around the world are taking part in corporate
citizenship and volunteer activities.
Initiatives Targeting COVID-19

We have updated progress reports and releases covering Sysmex’s initiatives. See our website for details.
https://www.sysmex.co.jp/en/COVID19.html

27

Sysmex Report 2021

Sysmex Report 2021

28

Management PlanINTRODUCTION

Based on the “Sysmex Way,” the corporate philosophy of the Sysmex Group, we have formulated long-term
management goals and a mid-term management plan to achieve sustainable growth. The plan establishes
important matters to be addressed in order to reach positioning targets based on our long-term vision. We
are undertaking initiatives to this end amid a rapidly changing market environment.

OUR VALUE

Group Corporate Philosophy

OUR BUSINESS & STRATEGY

Long-Term Management Goals (2025)
Long-Term Vision“A Unique & Advanced Healthcare Testing Company”

As the healthcare market continues to grow, we aim to help extend healthy lifespans throughefforts to resolve medical issues in various regions, as well as achieving further growth.

Long-Term
Management Goals(2025)

Positioning
1. Creating innovative diagnostic value as a global top-fivecompany in IVD
2. A leading company in personalized diagnostics for optimizing
medical treatment

OUR PLATFORM

Strategies for Achieving Sustainable GrowthGroup
Corporate
Philosophy

3. A solution provider contributing to the advancement ofprimary care diagnostics
4. An attractive company providing value and instilling confidence

Mid-Term Management Plan
(Fiscal 2021-2023)

5. One Sysmex carrying out high-speed management

OUR PERFORMANCE AND
COMPANY INFORMATION>>For details on the long-term management goals, please refer to page
33 of Sysmex Report 2018.

New Mid-Term Management Plan
(Fiscal 2021 to Fiscal 2023)
1. Accelerate the introduction of new products aimed at
improving growth and profitability while promoting
emerging market strategies.
2. Achieve high growth through proactive investment in key
fields (hemostasis, immunochemistry, and life science).
3. Introduce new business to achieve dynamic growth.
4. Promote digitalization in the Group and achieve DX tocreate customer value.
5. Enrich the talent portfolio, which contributes to strategy
execution, and create an attractive organizational climatethat leverages diverse talent.
6. Formulate a vision and roll out measures to reinforce andimplement sustainability management.
>>New Mid-Term Management Plan P35

29

Sysmex Report 2021

Sysmex Report 2021

30

Looking Back on the Previous Mid-Term Management Plan

¢ Main Initiatives under the Previous Mid-Term Management Plan

Important Priorities toward Sustainable Growth

Despite the impact of the COVID-19 pandemic, we steadily generated results as issues materialized.
In addition, we made progress on a variety of initiatives to reinforce our management base and structure.

1 Reinforce strong growth in the IVD Business

INTRODUCTION(Fiscal 2019 to Fiscal 2021)

We optimized processes from product development to regulatory applications. As a result, we launchedflagship models in the hematology and hemostasis fields, expanding our product portfolio.

¢ Important Priorities under the Previous Mid-Term Management Plan
Important Priorities toward Sustainable Growth

Strengthen our foundations andstructures to support growth¢ Key Results under the Previous Mid-Term Management Plan

Growth rate

Fiscal 2018

Fiscal 2019

Fiscal 2020

(vs. Fiscal 2018)

293.5

301.9

305.0

3.9%

IVD business

283.1

290.6

291.2

2.9%

Life science business

Financial Targets

10.3

11.2

13.0

25.7%

Operating profit

61.2

55.2

51.7

(15.5)%

Profit attributable to owners of the parent

41.2

34.8

33.1

(19.6)%

197.60167.10158.65

―

16.3

12.9

11.3

―

Hematology market share (%)

53.8

54.7

56.3

―

Percentage of sales in emerging markets (%)

39.5

39.7

40.0

―

CSR survey response rate (%)

84

85

89

―

Engagement score (%)

―

―

66%

2

―

28.9

27.7

34.0

―

15.2

15.5

16.2

―

Cut 10%Cut 2%

Cut 8%―Cut 2%

Cut 4%Cut 6%―

Return on equity (ROE) (%)
Non-Financial Targets

1

Training time per employee (hours)

3

Female managers ratio (%)
Environmental consideration (instruments)
Reduction of CO2 emissions4
Reduction of water consumption

4

Multiparameter automatedhematology analyzer

Fully automated blood
coagulation analyzer

2 Accelerate commercialization of the Life Science BusinessWe made steady progress on expanding this business. We began accepting
orders for cancer gene testing and received regulatory approval in China fora system to test for cancer lymph node metastasis. We will continue withinitiatives to improve profitability.
• Obtained insurance coverage and launched a test system for cancer gene profiling• Received insurance coverage and launched an RAS gene mutation testing kit• Expanded the businesses of Oxford Gene Technology and Sysmex Inostics

RAS gene mutation testing kit

3 Enhance quality and quality assurance systems
4 Strengthen the regulatory aﬀairs functions and clinical development
capabilities that underpin our business
Aiming for the early-stage provision of high-quality products, we made our quality management system (QMS)
more eﬃcient and stepped up clinical developments using overseas R&D bases.

OUR PERFORMANCE AND
COMPANY INFORMATION(Second year of the plan)

Profit attributable to owners of the parent (yen)l Urinalysis• By reestablishing alliances, launched a urine chemistry analyzer(North America)(Billions of yen)(First year of the plan)

Net salesl Immunochemistry• Developed and launched COVID-19-related reagents• Developed and launched region-specific reagents (China)

OUR PLATFORM

Long-Term
Management
Goals (2025)

1 Reinforce strong growth in the IVD Business
2 Accelerate commercialization of the Life Science Business
3 Enhance quality and quality assurance systems
4 Strengthen the regulatory aﬀairs function and clinicaldevelopment capability that underpin our business
5 Restructure business processes through digitalization
6 Innovate human resource management

Resolve emerging issuesl Hemostasis• Launched new flagship models and immunochemistry modules• Reestablished global alliancesl Hematology• Launched new flagship models• Launched new compact models

OUR BUSINESS & STRATEGYThe COVID-19 pandemic broke out in the fourth quarter of fiscal 2019, the first year of our previous mid-term management
plan. The resulting lockdowns and other restrictions on movement in countries around the world caused general testing
demand to fall. Affected by this situation, Sysmex experienced
a decline in sales, particularly in its mainstay hematology field.
As a result, net s ales were ¥301.9 billion in fiscal 2019 and¥305.0 billion in fiscal 2020 (up 1.0% year on year). Although
the figures were up for two consecutive years, we fell shortof our expectations. Furthermore, sales of highly profitablereagents declined, so operating profit decreased for two years
in a row. This deterioration in profitability caused ROE to fall,

prompting the need to continue improving capital efficiency.
Addressing our important priorities, we launched new
products in the hematology and hemostasis fields, commercialized the cancer gene testing business in the life sciencefield, and made steady progress on the development of tests
related to COVID-19. We also worked to strengthen ourmanagement base through business process reforms, such as
making the quality management system more efficient andpromoting digitalization.
However, certain issues remain to be addressed, such as
speeding up new product development, boosting productivity,and creating a structure for obtaining early-stage regulatory
approval. In addition, new issues emerged with respect toresponding to the new normal. We will need to continue addressing these issues under our new mid-term management plan.

OUR VALUE

Two Consecutive Years of Sales Growth amida Challenging Operating Environment• Responded to the European In Vitro Diagnostic Regulation (IVDR)• For quality assessment, strengthened supplier shipping and acceptance inspections• Created a specialized organization dedicated to clinical development to shorten clinical evaluations
Scope of QMS (R&D

Clinicaldevelopment

indicates functions that have been strengthened.)

Regulatory
application

Procurement

Production

Sales andservice

5 Restructure business processes through digitalization
6 Innovate human resource management
We promoted the digitalization of internal processes and completed the standard design of global businessprocesses. We also developed and launched Caresphere, a network solution tool to help customers achieve
better eﬃciency. In addition, to make our HR policies globally consistent, we introduced a job-based humanresource system for managers.
• Completed the globally standard design of our backbone system and began construction• Began operating individual systems (HR management, design information, management of pharmaceutical aﬀairs documents,
purchasing, and travel expenses)• Launched Caresphere, a new network solution to support laboratory operations and quality control• Completed the formulation of a global HR policy• Introduced a job-based HR system for managers• Promoted work style reform, such as introducing remote working

1 Results against non-financial targets set under the previous mid-term management plan 2 Excluding EMEA
3 Target: Sysmex Corporation on a non-consolidated basis 4 Base year: Fiscal 201631

Sysmex Report 2021

Sysmex Report 2021

32

Sysmex’s Positioning

A Changing Market Environment
INTRODUCTION

Positioning in the Market

Global market share:

Top 8*

No. 1*

1 Roche2 Abbott3 Danaher

More
than
50%

4 Siemens
Healthineers
5 Thermo Fisher
6 Becton Dickinson
7 bioMérieux

SysmexOther companies

8 Sysmex••* Sysmex’s estimates based on information disclosed for 2020

The Need to Resolve Increasingly Diverse
Medical Issues
In IVD markets in developed countries, progress is being madeon the practical realization of innovative technologies, such as¢ Changing medical issues and market needs in line with shifts in the social environment

Key changes in the social environment

Principal Peer Companies

IVD market

70,000——

Hematology

3,600

4%

59.0%

Danaher, Siemens Healthineers,
Abbott, Mindray

Hemostasis

2,700

4%

17.8%

Instrumentation Laboratory, Stago

Urinalysis
Of which, sediment urinalysis

1,150
(500)

4%
(5%)

7.2%

Immunochemistry

19,200

6%

5.1%

—

—

0.5%

Others (Genes, etc.)

—

—

10.4%

Becton Dickinson, Danaher*Sysmex has compiled data on market scale and growth rates based on publicly disclosed information.
Exchange rates are used for the year for which research was conducted, so simple comparisons with market scales presented in previous years are not possible.

33

Sysmex Report 2021

Rising populations

Disparities in healthcare

Developing countries

Clinical FCM

Economic growth

Danaher
Roche, Abbott,
Siemens Healthineers

Economic
disparity

Rising populations

Realizing testing that facilitates efficient andhigh-quality healthcare and reduces
the burden on patients
OUR PERFORMANCE AND
COMPANY INFORMATION(Fiscal 2020)

Responding to spreading infections

Sysmex’s Sales Composition

Growing calls to reduce environmental impact(2021-2023)

Emerging markets

Market Growth Rate*

IVD Market Needs

Adoption ofadvanced treatments

Aging populations¢ Market Scale and Sysmex’s Business Domains
Market Scale*($ million)

Main Medical Issues

Raising the quality of healthcare

Contribution to a sustainable society

Testing Field

liquid biopsy and cancer gene testing. Against this backdrop, in
addition to an increased quality of healthcare, society is callingfor early detection and appropriate diagnosis and treatment tohelp hold down medical costs and improve healthcare efficiency.
In emerging markets and developing countries, the statusof economic growth differs, but the need to build and enhance
healthcare infrastructures is a common issue. In these markets, testing needs are growing along with those in developed
countries. At the same time, we also face calls to provide products and services that are suited for those regions and that fit
local budgets.
International calls for a sustainable society are leading
to an increasing emphasis on companies meeting their social
responsibilities by achieving the targets outlined in the 17 SDGs.
To enhance global health, particularly given our role as a healthcare company, we are being called upon to contribute toward
the achievement of Goal 3, to “ensure healthy lives and promote
well-being for all at all ages.” Expectations are also growing withrespect to our contribution to the resolution of social issues,
such as by launching environmentally friendly products.

OUR PLATFORM

overcoming high barriers to entry, such as obtaining regulatory
approval in various countries. Sysmex has created a global
regulatory structure with the expertise to respond accurately
to regulatory frameworks in different countries. As a result,
we are able to deliver the products we develop to customers
smoothly and swiftly.
We will continue to provide high-value-added products
and services that exceed customer expectations. As a result,
we aim to firmly establish the Sysmex brand, enabling us tofurther enhance our market share.

The COVID-19 pandemic caused testing demand to dip temporarily, but we believe the healthcare market will continue
to demonstrate robust growth going forward. In developed
countries that focused on curtailment of the crisis, we anticipate
increased investment and expect to see increasingly diverse
treatment and testing. In emerging markets and developing
countries, testing is expected to grow more prevalent, withmore people undergoing testing. With COVID-19 vaccines beingrolled out and drugs to treat the disease being developed, we
expect its impact on society to gradually decline. Even so, we
anticipate an ongoing call for the development of more precise
and simpler testing technologies and enhanced testing systems.

Developed countries

In addition to competing with European and US companies,
the competitive landscape is changing as companies fromemerging markets and other industries enter our field of business. However, developing business in the IVD domain means

Net sales:

The COVID-19 Pandemic

OUR BUSINESS & STRATEGY

Competitive Status with Other Companies

Hematology Field

OUR VALUE

Sysmex provides products and services to customers aroundthe world. In the IVD field, we are ranked eighth in sales
globally. Due to COVID-19, growth in the IVD market is estimated to have been in the mid-single digits in fiscal 2020.
Companies’ market positions changed somewhat due to anincrease in COVID-19-related testing. Most top companies inthis sector are based in Europe and the United States; Sysmex
is the only one headquartered in Asia.
Notably, we have a leading share of more than 50% of the
global market in the hematology field. We are expanding oursales regions and portfolios in the hemostasis and urinalysis
fields by collaborating with alliance partners. As a result, wehave acquired a high share of the global market.
Meanwhile, we are building a robust installed instrument
base in the immunochemistry field, where we are developing ourbusiness, mainly in Asia. Going forward, we plan to expand our
lineup by developing proprietary reagent parameters and obtaining regulatory approval as we work to expand our sales further.
We are also moving to launch new products in new business domains, such as FCM, life science and primary care.

IVD Business Domain

Strengthening healthcare
infrastructures

Curtailing medical costs

Rolling out products and services
that have the same high quality
as in developed countries

Improving accessibility
to healthcare
Reducing disparities in healthcare
Products and services that enable simple
and fast testing
Stepping up measures
to prevent infection

Prevalence of tropicaldiseases (NTDs: Neglected
Tropical Diseases)

Sysmex Report 2021

34

New Mid-Term Management Plan (Fiscal 2021 to Fiscal 2023)
INTRODUCTION

We have formulated a new mid-term management plan for the Group, ending in fiscal 2023. The plan aims to reinforce a management base that supports sustainable growth for the Group. To reach positioning targets based on long-term management goals, theplan sets forth key actions for the next three years and specific measures to be executed. As a result, we aim to achieve sustainablegrowth and enhance corporate value for Sysmex. At the same time, we aim to resolve issues that will lead to the sustainable development of society.

Financial Targets

Framework for Determining Key Actions for the Group

Addressing issues that will lead tothe sustainable development of society

New mid-term management plan

305.0

301.9

Operating margin

Main Factors Considered when Formulating the Mid-Term Management Planl Recognition of change in the operating environment (the new normal)l Progress on important priorities under the previous mid-term management plan and ongoing issues
l Elucidation of risks and opportunitiesl Review of materiality items

19.0 (%)

18.3
17.1

17.0
55.2

2019

51.7

2020

2021

(Forecast)2022¥80.0 billion

Operating margin:

19.0%

ROE:

15.0%

Operating profit

Free cash flow:¥40.0 billion

CAGR*
15.6%

Operating cash flow:¥90.0 billion

80.0

60.0

Operating profit:

2023(Forecast)(FY)

OUR BUSINESS & STRATEGY>>P30¥420.0 billion

Net sales:

CAGR*
11.2 %

350.0

Long-Term Management Goals (2025)

Targets for Fiscal 2023

Net sales

420.0 (¥ billion)

Previous mid-term management plan

OUR VALUE

Achieving sustainable growth andenhancing value for Sysmex

Note: Assumed exchange rates: 1USD=¥106, 1EUR=¥125, 1CNY=¥16*Average annual growth rate from fiscal 2020 to fiscal 2023

Mid-Term Management Plan (Fiscal 2021 to Fiscal 2023)
OUR PLATFORM¢ Sales Targets for Fiscal 2023 (by Business)

Financial Targets(Billions of yen)

Sustainability Targets
>>P36

>>P42

Key Actions for the Group to Reach the Plan’s Targets

1 Accelerate the introduction of new

products aimed at improving growth andprofitability, and promote emerging
market strategies.

2 Achieve high growth through proactive
investment in key fields (hemostasis,
immunochemistry and life science).

Reinforcement of
the Management Base
4 Promote digitalization in the Group andachieve DX to create customer value.

5 Enrich the talent portfolio, which

contributes to strategy execution, andcreate an attractive organizational climatethat leverages diverse talent.

Contribution to Long-Term
Operating Performance

Hematology

180.0

Fiscal 2021

Fiscal 2023

CAGR*(%)

197.0

220.0

6.9

FCM

1.4

3.0

7.0

68.9

Urinalysis

21.8

30.0

36.0

18.1

Hemostasis

54.3

58.0

67.0

7.2

Immunochemistry

15.4

20.0

30.0

24.7

Clinical chemistry

2.7

3.0

3.5

7.7

Life science

13.0

18.0

30.0

32.1

Others

15.3

16.0

16.5

―

304.2

345.0

410.0

10.4

0.7

5.0

10.0

134.5

Diagnostics business
Medical robotics businessNote: Assumed exchange rates: 1USD=¥106, 1EUR=¥125, 1CNY=¥16

OUR PERFORMANCE AND
COMPANY INFORMATION

Contribution to Medium-Term
Operating Performance

Fiscal 2020 (Actual)*Average annual growth rate from fiscal 2020 to fiscal 2023

3 Introduce new business to achieve
dynamic growth.

¢ Sales Targets for Fiscal 2023 (by Destination)(Billions of yen)Creation of Sustainable Value
6 Formulate a vision and roll out measures to reinforce and implement sustainability management.

Annual Management Plan

Fiscal 2020 (Actual)

Sysmex Report 2021

Fiscal 2023

CAGR*(%)

Japan

48.7

59.5

76.5

16.2

Americas

65.8

79.5

95.5

13.2

EMEA

82.1

88.0

100.0

6.8

China

83.8

94.0

112.0

10.1

Asia Pacific

24.4

29.0

36.0

13.8

Note: Assumed exchange rates: 1USD=¥106, 1EUR=¥125, 1CNY=¥16

35

Fiscal 2021

*Average annual growth rate from fiscal 2020 to fiscal 2023

Sysmex Report 2021

36

Group Key Actions
profitability, and promote emerging market strategies.

2 Achieve high growth through proactive investment in key fields(hemostasis, immunochemistry, and life science)

Focuses of Initiatives¢ Hematology and FCM Sales Targets¢ Sales Targets in Key Businesses¢ Hematology¢ FCM¢ Hemostasis¢ Immunochemistry¢ Life science

7.0 (¥ billion)
1.4

30.0 (¥ billion)
CAGR
32.1%
30.0
CAGR
24.7%

48%

41%

FY2020

FY2023

15.4

220.0

59%

CAGR
6.9%

2020

¢ Hematology ¢ Non-hematology

67.0
CAGR
7.2%

54.3

2023
(FY)

2020

52%

OUR PERFORMANCE AND
COMPANY INFORMATION¢ Hematology and FCM Testing Portfolio¢ Composition of Sales

13.0

180.0

l Hemostasis field:• Increase market share by accelerating the global rollout of
new products.
l Immunochemistry field:• In China and other parts of Asia, increase the installed
instrument base and the number of reagent parameters.
• Promote the commercialization of testing for Alzheimer’s
disease.
l Life science field・Expand the market in China for systems to test for cancer
lymph node metastasis.
・Increase sales of cancer gene testing.
l Promote agile development with the aim of boosting productdevelopment speed and verifying customer needs.

OUR PLATFORM

CAGR
68.9%

Focuses of Initiatives

OUR BUSINESS & STRATEGYl In the hematology field, increase sales through a global rolloutof high-end models.
l Launch new products for low-end markets and increase sales
through direct sales in India.
l Work to create new clinical value through collaboration withclinical flow cytometry, such as the selection of optimaltreatment methods and the monitoring of treatment eﬀects.
l Promote a hematology-plus strategy aimed at further
innovations in such areas as operational value and clinical value.
l Develop products that foster better accessibility to healthcare
in emerging markets and help curtail medical costs.

We have defined hemostasis, immunochemistry and life science as
key businesses, where we will work to enhance the business portfolio by prioritizing the allocation of management resources. We
will use the earnings obtained from our mainstay field of hematology to accelerate the global rollout of new products in the hemostasis field, expand reagent parameters in the immunochemistry
field, and develop new testing parameters in the life science field.
Through such investments, we aim to meet the target outlined in
our mid-term management plan of having non-hematology sales
account for 48% of the total by the plan’s final year.
With the aim of putting the technologies we currently possess into practical use at an early stage, we will collaborate with
development partners, hospitals, and other stakeholders at theearly stages of product development. We will promote agile
development to accelerate our efforts to create new value.

OUR VALUE

We aim to improve growth and profitability by accelerating the
global rollout of the new hematology products we launchedin fiscal 2020. In addition, we will work to introduce products
suited to the needs of emerging markets, which are characterized by rising populations, economic growth and significant
expectations toward increases in healthcare quality. We will
also contribute to improved accessibility to healthcare andenhancement of the healthcare infrastructure. In fiscal 2019,
we began direct sales and service in India, which we are positioning as a key market. By moving forward with businessplanning, product development, and market launches, we areworking to increase our share in emerging markets.
In North America, we are promoting clinical flow cytometry testing. By combining this testing with hematology, we aim
to create tests that offer even higher levels of clinical value
and provide high-value-added testing that enables early diagnosis, the selection of appropriate treatment methods, and themonitoring of treatment efficacy.
At the same time, we aim to lower the cost of sales ratio
and utilize IT to make services more efficient. As a result, we
aim to continue improving profitability.

INTRODUCTION

1 Accelerate the introduction of new products aimed at improving growth and

2023
(FY)

To achieve sustainable growth, we will increase the rate of growth and profitability of existing
businesses and enhance our portfolio.
Hiroshi Kanda
Automated hematology analyzers

FCM analyzer¢ Demographics of the Global Population
India
17.7%

China
18.9%

37

Sysmex Report 2021

Developed countries
16.4%

2025
Emerging markets and developing countries*
47.0%
Note: Adjusted to correspond to Sysmex’s performance categories
Source: GLOBAL NOTE (calculated from UN statistics) *Excludes China and India

Member of the Managing Board and Senior Executive Officer Managing Director
Business Strategy Development

Under the previous mid-term management plan, we worked on reinforcing strong growth in
the IVD business, along with engineering reforms. Leveraging these results in the hematology field, we engaged in efforts to further increase testing efficiency and create diagnostic
value. Furthermore, in addition to developed countries, we worked to expand our businessby stepping up initiatives in emerging markets, where medical economies are expected to
grow. Meanwhile, to boost the percentage of sales from non-hematology areas, we identified key businesses outside hematology. Under the current mid-term management plan, we
will prioritize the allocation of resources to these areas. Through these efforts, we aim toresolve medical issues and achieve further sustainable growth for Sysmex.

Sysmex Report 2021

38

4 Promote digitalization in the Group and achieve DX to create customer value

To achieve further growth, we will cultivate new businesses
outside our conventional IVD domain. Specifically, by increasing our market share for the robotic assisted surgery system
we launched in Japan in fiscal 2020, we plan to steadily cultivate the medical robotics business. At the same time, we will
pursue efforts to obtain regulatory approval overseas, with aview toward a future overseas rollout.
By leveraging the technologies and expertise it has cultivated in the IVD domain, Sysmex will create new businesses indomains at the forefront of diagnostics and treatment, such as
regenerative medicine and genomic medicine. We will promote
open innovation with a view to implementing innovative digitaltechnologies in society and medicine. In this way, we will work
to create new businesses that make use of healthcare data.

In digitizing our internal business processes, which we havebeen working on since 2018, we aim to optimize and improve
efficiency across the Group and across functions. To achievethis, we will renew our backbone systems, expand the scopeof digitalization to the entire value chain, and build a global
digital infrastructure.
Regarding digitalization for our customers, we will promote initiatives to create new solutions by providing new added value through the expansion of applications for Caresphere,
the network solution we introduced in 2018.

Focuses of Initiatives>>Robotic Assisted Surgery System P91

l Set up a specialized organization to promote DX, andstrengthen internal and external functions for promoting
digitalization.
l Accelerate the digitalization of internal business processes tooptimize and improve the eﬃciency of the entire Group.
l Increase value creation for customers by expanding
Caresphere’s applications.

OUR BUSINESS & STRATEGY

Cultivation of new business domains:l Step up initiatives targeting regenerative medicine andgenomic medicine.
l Consider initiatives for utilizing healthcare data through open
innovation outside the Company.

Focuses of Initiatives
OUR VALUE

Medical robotics business:l Accelerate market introduction by increasing the number ofsurgical instructors.
l Increase the number of applicable medical departments byenhancing robotic forceps and peripheral software.
l Prepare for regulatory application and market introduction in
Europe, the United States, and China.

INTRODUCTION

3 Introduce new business to achieve dynamic growth¢ Scope of Digital Transformation (DX)¢ Sales from the Medical Robotics Business
Fiscal 2021 (target)

Fiscal 2023 (target)¥5.0 billion¥10.0 billion
R&D

Procurement

Digitalization to Provide Value to Customers

Sysmex

Medical institutions

Production

Distribution

Sales

Service andsupportOUR PLATFORM

Fiscal 2020

¥0.7 billion

Digitalization within the Group

Improve laboratory eﬃciency
and provide new value
through Caresphere¢ Key Initiatives in the Medical Robotics Business
More Diverse Business Content
Construction of operating rooms

Utilization of networks

Work to receive regulatory
approval overseas

Cleaning and sterilization business

Links with testing

Connections
Core operations
HR management
OUR PERFORMANCE AND
COMPANY INFORMATION

Achieve domestic market penetration
with the robotic assisted surgery system

Business administration
Work style reform39

We will leverage our strengths and expertise in existing businesses and create new businesses
unique to Sysmex.

We will promote the value that digitalization delivers by integrating DX for both internal use
and customers.

Kaoru Asano

Kenji Tachibana

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

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

To date, Sysmex has taken advantage of open innovation to create new business domains,
continuing to acquire technologies, and develop products. Under this mid-term management plan, we are working steadily toward the practical application of the technologies
we have acquired and the commercialization of new products and services. Under theprevious mid-term management plan, we commenced sales in Japan in the medical robotics business. By fostering synergies with existing businesses, we will create value unique
to Sysmex and expand our business. In addition, we will consider ways to utilize various
medical data related to testing and surgery with the aim of cultivating businesses throughdynamic growth rather than through the extension of existing businesses.

The Group has been developing and enhancing its internal IT systems and IT solutions forcustomers since the late 1990s, but in this highly uncertain environment, we believe that
DX initiatives that bring new value both internally and externally are essential and needto evolve over time. Within the company, we are working on DX to enhance the creativity
and productivity of people rather than simply renewing conventional IT systems. For ourcustomers, we are expanding the application of Caresphere, which was developed and introduced in 2018 as a new network solution, and we are working on DX that will continue
to provide new value to our customers. In addition, we will work to integrate information
between internal DX and DX for customers, and promote the value provided to both.

Sysmex Report 2021

Sysmex Report 2021

40

attractive organizational climate that leverages diverse talent

Focuses of Initiatives
l Strengthen human resource management by establishing a
job-based human resource system and expanding its
application to the general workforce.
l Expand opportunities to acquire highly specialized humanresources through the realization of diverse work styles.
l Provide educational opportunities and expand content for
all generations.
l Promote diversity, inclusion, and health management.

We will strengthen our sustainability management to realize a sustainable society and achieve sustainable growth for
Sysmex. We will deepen our understanding of society's expectations through dialogue with stakeholders, and reflect thisunderstanding in our management. In addition, we will work toformulate new management goals and realize Sysmex's uniquesustainability management so that all stakeholders, from executives to employees, can understand our corporate mission
and become aware of, and practice contributing to, solvingsocial issues through our business activities.

Focuses of Initiatives
l Formulate a vision to reinforce sustainability management.
l Create new long-term management goals based on our vision
for sustainability management.
l Engage in activities to reach sustainability targets.

OUR BUSINESS & STRATEGY

We will strive to earn the trust of our diverse stakeholders and enhance our corporate value by implementing Group-wide measures
based on our priority initiatives (materiality items) and sustainability targets.

Transform Global Human Resource Management

Realize a sustainable society

Achieve sustainable growthfor Sysmex

Resolve social issues¢ Main Sustainability Targets

Create an attractive organization

Enhance competitiveness>>For details, see the Sustainability Data Book, P4 >>Non-Financial Targets and Results under the Previous Mid-Term Management Plan P31, 81

Fiscal 2020 Results Targets (Fiscal 2023)

Main KPIs

Create unique value

Achieve diverse working styles and physical and mental health

We will focus on developing human resources, the source of our competitiveness, and on creating
an organizational culture that fosters innovation.
Kensuke Iizuka
Senior Executive Officer
Deputy in charge of Corporate Management
Executive Vice President of Corporate Business Planning Div., Corporate Executive Office

Sysmex has introduced a variety of human resource measures in line with the expansionof its business scale and globalization. To achieve further growth, we will continue toactively promote initiatives that are in line with changes in society. In particular, we will
expand our job-based human resource system to all employees and promote diversity
and inclusion on a global scale to create a diverse and attractive organization. In addition,by enabling employees to choose a work style that suits their life stage and values, wewill endeavor to improve their physical and mental health and engagement and realize
One Sysmex, which will contribute to richer communication and innovation.

56.3%

*4

1,600

*4

¥122 billion

*4

4

*4

CSR survey response rate (primary raw material suppliers)

89%

90%

Provision of a comfortable working
environment

Engagement score

66%*1

75%

Turnover ratio2, 3

2.7%

*4

Promotion of diversity and inclusion

Female managers ratio

16.2%

17.0%

Development of human resources

Training time per employee

Resolution of medical issues throughinnovation

Hematology market share

Improvement in accessibility to healthcare

Sales in emerging markets

Pursuit of quality and trust

Number of recalls

Strengthening of supply chain management

Number of cancer genomes analyzed

2

3

24.5 hours

40.0 hours

2

2,030 hours

1,950 hours

Lost-time injury frequency rate2, 3

0.78

0.58

Lost workday rate

0.05

0.02

Environmental consideration throughproduct lifecycle

Reduction of CO2 emissions (instruments)

Cut 8%Cut 20%

Reduction of water consumption (instruments)

Cut 6%

Cut 10%

Reduction in environmental burdens throughactivities at business oﬃces

Reduction of CO2 emissions (business activities)

Cut 35%

Cut 40%

Reduction of water consumption (business activities)

Cut 7%

Cut 5%

Number of internal reports

12*4

Number of unethical incidents

5

*4

2,720

*4

Total annual working hours
Promotion of health and occupational safety

2, 3Compliance
Risk management

Number of information security trainees2

OUR PERFORMANCE AND
COMPANY INFORMATION

Enhance our personnel portfolio
Transform into a more
attractive organization

OUR PLATFORM

Diversify
human resources

sustainability management>>Materiality P10¢ Main Initiatives under the Mid-Term Management Plan

Make Information about Employees’ Skills Visible
through Digital Transformation

6 Formulate a vision and roll out measures to reinforce and implement

OUR VALUE

We will strengthen our efforts to recruit and develop nextgeneration leaders and highly specialized human resources
who will support our sustainable growth. For example, byleveraging our digital infrastructure to make information about
employees’ skills visible globally, we can improve the qualityof human resource management and strengthen corporate
competitiveness. We aim to further transform our workplaceand organizational culture, making them attractive places toleverage diverse human resources. To this end, we will strive todiversify our human resources and increase the ratio of female
managers on a global basis. In addition, by implementing measures based on the Sysmex Declaration of a Healthy Company,
we aim to create an environment where employees can workwith peace of mind in good physical and mental health, makethe most of their skills, and become more engaged.

INTRODUCTION

5 Enrich the talent portfolio, which contributes to strategy execution, and create an

1. Excluding EMEA 2. Target: Group companies in Japan 3. Change in tabulation method from the aggregation of non-financial targets
4. Not target-value established, but set as a monitoring index

41

Sysmex Report 2021

Sysmex Report 2021

42

>>Sustainability Data Book > Environmental Management P40(Including disclosure based on TCFD)¢ Long-Term Environmental Objectives (Fiscal 2025)

Reducing CO2
emissions(Base year: Fiscal 2016)

Reducing water
consumption

Promoting resource
circulation

Protecting biodiversity

When using instruments

By 15%

When using instruments

In business activities

By 15%

By 50%

In business activities

By 15%

When shipping

Increase in the recycling rate
in business activities

93% or higher

Expand our portfolio line
using alternatives toanimal-derived substances
OUR BUSINESS & STRATEGY

To this end, we have formulated the Sysmex Eco-Vision
2025 as a long-term guideline for environmental management. We have identified “environmental consideration” as amateriality item, and are promoting measures such as reducing
CO2 emissions and water consumption throughout the product life cycle and promoting environmentally friendly green
procurement. In addition, we are promoting TCFD (Task Forceon Climate-Related Financial Disclosures). In addition, we aredisclosing information in response to TCFD recommendations.
It is our social responsibility as a company to promote
such measures. At the same time, we create a competitive
advantage in the market by undertaking unique initiatives. To
help extend healthy lifespans for people around the world, we
will continue to take on the challenge of reducing our environmental burden from a medium- to long-term perspective.

OUR VALUE

With the sustainability of the global environment becoming
an urgent issue, as a company with global operations Sysmex
recognizes that reducing the environmental burden of its business activities is one of its most important tasks.
Climate change is expected to have a significant impact
on the healthcare market. For example, concerns exist about
an increase in the number of heatstroke patients due to rising temperatures, the expansion of tropical diseases suchas malaria and dengue fever, and the increase in respiratory
diseases due to air pollution. If such changes become a reality,
they could lead to increased medical costs and pressure on
healthcare infrastructures. Delays in addressing the issue ofclimate change will affect the healthcare system; as a memberof society, we need to take action.
In addition to climate change, environmental issues arealso involved in Sysmex’s overall business activities, such as
reducing water consumption, promoting resource recycling,
and preserving biodiversity.

INTRODUCTION

Initiatives Targeting a Reduction in Environmental Burden
through Activities at Business Offices

By 15%¢ Key Initiatives
Develop products that help reduce
environmental burdens

Reduce the environmental burden of
production activities

Reduce CO2 emissions from sales,
service and support activities• Power savings, reduced reagent
consumption, etc.

• Use of renewable energy• Lower CO2 emissions and water consumption
through better production efficiency• Utilize online methods(Remote training, webinars, etc.)

OUR PLATFORM¢ Burden of Environmental Problems on the Healthcare Market

Healthcare Market
R&D

Patients

Procurement

 Increase in the number of patients sufferingfrom heatstroke and respiratory diseases
 Expansion of areas where tropical diseases
are endemic

Production

CO2 emissions associated with the
shipment of products• Procurement of raw materials and parts that havea lower environmental burden• Conducting CSR surveys• Shift from transport by air to ship
• Promote reagent production transfer tofactories overseas• Penetration of concentrated reagents

Medical institutions• Calls for productswith lowenvironmental
burden andenvironment-related
disclosure

43

Sysmex Report 2021

Achieve lower
environmental burden
for medical institutions• Reduce electricity usedby products• Decrease waste

Examples of Initiatives to Decrease Environmental Burden through Business Increased medical costs
 Pressure on healthcare infrastructures
 Promotion of reduced environmental burden• Supply of products that reduce
environmental burden• Increase in product transport
efficiency

Healthcare companies

Medicalinstitutions

OUR PERFORMANCE AND
COMPANY INFORMATION

Society (Environmental Problems)

ImpactDiagnosis andtreatment

Sales,
Service andSupportFormulate Green Procurement Standards
and promote green procurement(including survey items about environmental consideration)

Undergoing
medical exams

Distribution

 Calls to reduce environmental burden• Reduced emission of CO2 and lower water
consumption in business activities• Promotion of resource recycling• Protection of biodiversity

Enhanced competitive advantage

Consideration for the environment

Promote reagent production transfer

Promote adoption of concentrated reagents• Stable supply• Reduced costs

Reduce CO2 emissions
from transportation

Sysmex promotes the transfer of reagent production to overseas
plants. As a result, we can provide a stable supply to customers,
reduce costs and help reduce CO2 emissions by shortening
transportation distances. In particular, for reagents used in thehematology and urinalysis fields, we have established production
bases in eight countries around the world.

• Reduce frequency of
replacing reagents• Decrease storage space

Reduce CO2 emissions
from transportation

Reagents that are concentrated 25 times compared withconventional reagents are available for some instruments, such as
those in the hematology field. The widespread use of concentrated
reagents will enhance our competitiveness by improving customer
satisfaction and reduce CO2 emissions and waste by decreasing thenumber of reagent shipments. >>Concentrated Reagents P24

Sysmex Report 2021

44

Financial Policy

Financial Policy to Enhance Corporate Value

Capital Expenditure, Depreciation and Amortization

We believe investing in R&D is essential in order for us to help
resolve medical issues by developing products and services
that offer new added value. We are actively creating newvalue by accelerating the development of new products in the
diagnostics market and making upfront investments to cultivate drivers of long-term growth. We will also strengthen oursystem to deliver new value to patients as soon as possible bypromptly promoting the global regulatory registration of new
products. We anticipate R&D expenses of around ¥90.0 billion
over the three years of the new mid-term management plan.
(For reference, these expenses came to approximately ¥64.0
billion in fiscal 2018–2020.)

To strengthen the foundation of the Group’s sustainablegrowth, Sysmex has identified key businesses and is prioritizing capital expenditure. We are expanding our reagent factories to enhance the stable supply of reagents to our customers,
strengthening our corporate structure by digitalization of ourbusiness processes, and improving our working environment
to make it easier for our employees to work.
Depreciation and amortization related to investments indigitalization, which we started to address under the previous
mid-term management plan, will increase from fiscal 2021, but
we expect to reduce costs by improving the efficiency of business processes.

¢ R&D Expenses/R&D Expenses as a Percentage of Net Sales
R&D expenses
R&D expenses as a percentage of net sales¢ Major KPIs
Net Sales

Improved Cost of Sales Ratio +Increased Productivity

Free Cash Flow

• Medical robotics business

2018

2019

2021 (FY)(Planned)

2017(Generating Cash)• Strengthen competitiveness in the
diagnostics business• Improve asset eﬃciency

Investment in Sustainable Growth
Investment
R&D

Digitalization
Human resources
Investment

Stronger financial base(Using Cash)• Accelerate new product development• Strengthen our sales and service structure• Invest in transforming our business portfolio• Augment production and supply chain• Reform business processes• Recruit and develop human resources
Etc.

2018

2019

2020

2021 (FY)(Planned)previous year’s level because profit fell due to the COVID-19
pandemic. However, for fiscal 2021 we plan to raise the annual
dividend by ¥2 on the back of an anticipated increase in profit
accompanying the recovery and growth of business performance.
We will continue to position the return of profits to ourshareholders as a topmost priority, promoting a dividend
policy that focuses on continued stable dividends.

Sysmex aims to ensure a balance between proactive investment to sustain growth and the return of profits to shareholders as profitability improves. We also have been striving tocontinuously increase dividends, aiming for a payout ratio of
30% or more.
In fiscal 2020, the dividend was unchanged from the¢ Cash Dividends Applicable to the Year / Dividend Payout Ratio (Consolidated)
Cash dividends applicable to the year (figures adjusted for stock split)
Dividend payout ratio

70

66

74 (Yen)72

72

OUR PERFORMANCE AND
COMPANY INFORMATIONCash flow

Investment in Growth• Primary care

2020

29.50

25.71
27.16
25.57
23.95

15.84

14.64

Major Initiatives

Generation of
cash flow

Capital expenditure(including IT)• Life science

7.9 (%)

39.00 (¥ billion)

5.9

Higher Operating Cash Flow

• Hemostasis• FCM testing

7.4

7.2

Returns to Shareholders• Hematology• Immunochemistry

30.25
24.98

6.7

¢ Perspective on Investment• Urinalysis

27.50 (¥ billion)

16.75

2017

Strengthen Profitability

Capital expenditure
Depreciation and amortization

OUR PLATFORM

Double-Digit Growth

Operating Margin¢ Capital Expenditure/Depreciation and Amortization

22.51

21.76

19.57

OUR BUSINESS & STRATEGY

R&D Expenses

OUR VALUE

To sustainably increase its corporate value, Sysmex must adapt
to changes in the environment and promote reform with asense of speed.
Our business represents a recurring-revenue businessmodel. Even after customers buy our instruments, we continue
to provide reagents and service and support. Using the stable
cash flow this business generates, we are strengthening ourmanagement base by investing in R&D, facilities, sales andservice structure, human resources, and digitalization. We arealso actively investing in the development of new businesses
to achieve sustainable growth.

On the profitability front, although ROE exceeds our costof capital, it has declined over the past few years due to thedeterioration of cost ratios due to the lengthening of productlife cycles and investment in new businesses.
Reinforcing our IVD business was a priority theme under
the previous mid-term management plan. In line with thistheme, we launched new products in the hematology andhemostasis fields, reconfigured alliances in North America inthe urinalysis field, and increased the number of installed immunochemistry instruments in Asia. In these ways we steadily
prepared the ground to boost profitability. Under our new
mid-term management plan, we will raise profitability byaccelerating these initiatives.

INTRODUCTION

We will increase the value we provide to our stakeholders and enhance our corporate value ina sustainable manner.

58
52

38

M&A
27

Shareholder returns• Target a payout ratio of 30% or more
3.125

Raising cash

• Raise cash as necessary

3.75

18.9 22.6
2002

2003

5

9

6.5
17.8

2004

17.9
2005

12.5

12
20.0

2006

26.8

2007

31.9

2008

17

15

14
29.4
2009

20

27.0

2010

29.1
2011

29.1
2012

27.1
2013

29.6
2014

27.5
2015

29.7
2016

35.1

2017

35.4

2018

43.1

2019

45.4
(%)

2020

2021 (FY)(Forecast)

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

45

Sysmex Report 2021

Sysmex Report 2021

46

Management BaseINTRODUCTION

Sysmex has built up a robust management base while leveraging our In Vitro Diagnostics (IVD) business at its core.
We intend to achieve further growth in our existing businesses by using the management resources we haveacquired. We will also invest in new businesses to establish drivers of future growth and reinforce our management base. We will also strengthen corporate governance and strive to reduce business risks as we forge amore resilient corporate structure.

OUR VALUEOUR BUSINESS & STRATEGYManagement Base
Value chain

R&D
Capabilities>>P51

Production

Distribution

Production
SystemSales

Services
andsupportAcquiring
cash

Sales andService Structure>>Sysmex Report 2020 P51>>Sysmex Report 2020 P52

Diverse Human Resources

Corporate Governance and Risk Management

StableFinancial
Foundation>>P53

Investing in
newbusinesses

OUR PLATFORM

We aim to grow further by making use of the management resources we have cultivated todate. At the same time, we will reinforce our management base in the interest of enhancing
management quality.

Management resources for creating value

Management Base to Support Sustainable Growth

R&D

>>P92

>>P55

OUR PERFORMANCE AND
COMPANY INFORMATION

Reinvesting to strengthen our management base47

Sysmex Report 2021

Sysmex Report 2021

48

Management Resources
Instrument production bases

7

locations

Production Structure

Reagent production bases
Chemical:

8Biological:

6

locations(hematology, urinalysis)

Stable Financial Foundation

¥

23.4

billionbillion¢ Sales and Service Bases(Number of affiliated companies)¢ Rating (Rating and Investment Information, Inc.)AA-A
End of fiscal 2010

¢ R&D Facilities

R&D Capabilities
We have established global R&D locations, withTechnopark (Japan) as the hub. In addition to proprietary
technologies, through M&A we have acquired threetechnology platforms (for cells, proteins, and genes). As
our fields of business have expanded, we have built
relationships with universities, medical and research
institutions, pharmaceutical companies, and other external
institutions to conduct joint R&D. Our aim is to develop
testing and diagnostic technologies with high clinicalvalue and commercialize them as quickly as possible. >>P51

49

Sysmex Report 2021

Fiscal 2018–2020

11 locations
6 countries
End of fiscal 2010

End of fiscal 2020

21
7

40

End of fiscal 2010

End of fiscal 2020

locationsGlobal Sales and Service Structure
Since our establishment, we have built sales structures
tailored to individual regions, creating trust-based
relationships with customers. Taking advantage of ourbrand strength, as holding the No. 1 share of thehematology market, we are steadily expanding that market.
At the same time, we strive to ascertain customers’ needs,
which are the wellspring of new products and services.
In addition, we are leveraging alliances with major global
companies to reinforce our sales and service structure andexpand our product portfolio.
>>Sysmex Report 2020 P52

Sales and service network

Covering more than

190

Brand strength, holding

No. 1

share of the hematology market¢ Percentage of Employees Overseas(Group)locations

54.2%

countries

End of fiscal 2020

Technologies and expertise related to
instruments, reagents, and IT
Three technology platforms(for cells, proteins, and genes)

Networks with outside institutions

Diverse Human Resources
We have acquired diverse human resources throughbusiness globalization and M&A activities. The synergistic
results of our affiliates’ varied values, experiences andcapabilities have led to innovation and the creation of
new value.
Furthermore, we focus on providing an amenable
working environment for employees. To address this, weare promoting teleworking and introducing flexible
working systems, have expanded leave systems, and offer>>P53
childrearing and nursing care support.

countries and regions

OUR PERFORMANCE AND
COMPANY INFORMATION>>P92

Fiscal 2008–2010

61

locations

OUR PLATFORM

We established a highly profitable business model
involving the provision of reagents and service andsupport in addition to testing instruments. Leveraging
this stable business model, we have invested proactively
to bolster competitiveness in existing businesses, in new
businesses to support our medium- to long-term growth,and in human resources and manufacturing.

59.5(End of fiscal 2020)
OUR BUSINESS & STRATEGY¥

locations(hemostasis, immunochemistry, etc.)>>Sysmex Report 2020 P51¢ Financial Capital (Cumulative free cash flow over three years)

OUR VALUE

To remain cost competitive on a global scale while
maintaining high quality, we have used information andcommunication technologies to build an efficient
structure for manufacturing instruments in Japan. At thesame time, we produce reagents on a global scale. We
have factories at 14 locations in 10 countries, ensuring astable provision of reagents to customers around theworld. In recent years, we have enhanced our structure
for manufacturing bio-reagents.

INTRODUCTION

Since our establishment, Sysmex has invested in R&D and M&A in the process of generating unique technologies and new products and services. In addition to reinforcing our management base and expanding ourbusiness portfolio in line with globalization, we have worked to achieve business model innovation and toacquire the management resources necessary to support future growth.

59.8

End of fiscal 2014%

End of fiscal 2020

¢ Percentage of Female Managers (Group)(Employees at director level or above)

11.6%
End of fiscal 2014

16.2

%

End of fiscal 2020

Diverse, specialized human resources(Machinery, software, biology, chemistry, etc.)

Sysmex Report 2021

50

Management
Resources
INTRODUCTION

R&D Capabilities to Create High-Value-Added Testing and Diagnostic Technologies
Through the technological expertise and technology platforms we have cultivated since establishment, as well as our R&D centersaround the world, we will become more competitive in our existing businesses and create new testing and diagnostic technologies.

Our R&D facilities center on Technopark (Kobe), our hub
for R&D, and include facilities in Europe, the United States,
China and other countries. Having bases globally enables us
to work more closely with external institutions in each region,
access new technologies more quickly and provide support forclinical trials.

Working to Create New Value
Sysmex has three technology platforms, for measuring cells,
proteins, and genes. In our cell measurement platform, weare developing technologies to analyze the number and typeof cells in blood and urine and analyze intracellular information. In our protein measurement platform, we are developing technologies for the swift and highly sensitive detectionof proteins in the blood. Our gene measurement platform

includes technologies for detecting cancer-cell-derived DNA in
the blood. During the COVID-19 pandemic, we utilized thesetechnology platforms to develop and commercialize new diagnostic technologies from the start of the pandemic.
>>Initiatives Targeting COVID-19 P27

In addition, we utilize M&A and alliances to promotetechnology development and commercialization as quickly as
possible in the rapidly changing environment of the healthcare
field. By combining newly acquired technologies with thosecultivated in existing businesses, we aim to strengthen ourplatforms and create new value that only Sysmex can provide.
Furthermore, we aim to bring products to the market in atimely manner by utilizing open innovation and combining
technologies and knowledge from outside such as universities,
medical institutions, research organizations and pharmaceutical companies with our existing management resources.

OUR BUSINESS & STRATEGY

Since its establishment, Sysmex has acquired technologies
related to instruments, reagents and IT. By fusing these technologies, we work to ensure the provision of testing datathat is accurate—a critical consideration in testing. These
technologies also allow us to make improvements in response
to customers’ needs and to quickly determine the source ofproblems when errors occur. In addition to the creation of new
testing and diagnostic technologies, one of Sysmex’s fortes isthe provision of high-value-added products and services thatoffer enhanced usability as well as reduced environmental
impact. >>R&D Personnel P53
To raise testing productivity on the instrument front, weare increasing analyzer processing capacity, providing transport systems to enable the handling of more samples andmaking instruments more compact.

We provide two types of reagents: chemical reagentsand biological reagents, which are produced from biologicallyderived raw materials. Chemical reagents are used mainly inhematology and urinalysis. The concentrated reagents wehave developed in the hematology field are gaining traction,
mainly in developed countries, where they have earned highmarks from customers and are helping to increase our market
share. To strengthen our R&D and production capabilities forbiological reagents, we established a bio-reagent base in 2019.
In the immunochemistry field and the life science business, weare developing new testing parameters to further enhance thequality of healthcare. >>Concentrated Reagents P24
On the IT front, we have been quick to promote the useof networks in medical settings, developing our SNCS network
in 1999. More recently, we began providing the Caresphere
network solution in 2018. We are also developing new applications and services for Caresphere that will increase the efficiency and quality of testing.

OUR VALUE

Instrument, Reagent and IT Technologies to Provide
High-Value-Added Products and Services

OUR PLATFORM¢ Sysmex’s Technologies for Creating New Value¢ Major R&D Initiatives and Value Provided

Major Initiatives

Technologies

Value Provided to Stakeholders*

Instruments

Instrumentsl Development of transport systemsl Higher throughput capacityl Greater compactness
l Environmental friendliness throughout the productlife cycle

Chemical reagents(Hematology, urinalysis)l Development of new testing parametersl Development of concentrated reagents (hematology)
l Development of paper containers for reagents(hematology)

Biological reagents(Hemostasis, immunochemistry, life science)l Establishment of bio-reagent base (2019)l Development of new testing parametersl Creation of synergy within Group companies(HYPHEN BioMed, Oxford Gene Technology (OGT), etc.)

IT
Sysmexl Started offering the SNCS network service (1999)
l Provision of Caresphere network solution utilizing
AI technologies and ICT (2018)l Moving to online external quality control
l Introduction of virtual training (Sysmex America)>>Initiatives to Reduce the Environmental Burden of Business Activities P43

51

Sysmex Report 2021

n Higher laboratory productivity leading to more efficient managementn Reduced patient wait times
n Effective use of laboratory spacen Curtailed medical expenses through more efficient testingn Reduced environmental burden(Decreases in electricity consumption, waste and CO2 emitted
during distribution, etc.)
n Enhancing the quality of healthcare through the creation of
new testing parametersn Decreasing reagent changing frequency and reducing storage
space due to the use of concentrated reagentsn Reduced environmental impact (Reduced CO2 emissions duringtransport, contribution to shift away from plastic, etc.)
n Employment creation at various reagent factories

Technologies for analyzing the number andtype of cells in blood and urine and facilitating
the analysis of intracellular information

FluidsExisting businesses

OpticsReagents
Chemistry
Biologyd
2019
Establishment of abio-reagent baseAﬃliated companies:• Sysmex International
Reagents• HYPHEN BioMedn Helping to conserve biodiversity by using alternatives toanimal-derived substances in reagentsIT
Software*1 n Value provided to customers (such as medical institutions) n Value provided to societyl Hematology
l Urinalysis

2013

Partec2013

Inostics

Electronics

n Higher quality leading to higher-quality testing datan Enhancing the quality of healthcare through the creation of
new testing parameters

n Ensuring the stability of testing datan Configuration of systems to prevent the interruption of testing(Breakdown prevention, swift recovery, etc.)
n More efficient laboratory operation(reduced travel time for product training, etc.)
n Reducing CO2 emissions due to travel

Cell measurement technologies

Mechanics

Principal M&A Activity

with a View to a Full-Fledged Entry
into the Field of Personalized Medicine

Aﬃliated companies:• Sysmex CNA, etc.

>>R&D Personnel P53

Protein measurement technologies
Technologies for detecting proteins in
the blood swiftly and with a high degreeof sensitivity

Case Studies
Joint research related toimage analysis using AI
technology in the field ofhematology(Juntendo University)

Riken Genesis

Existing businessComprehensive
agreement aimed at thedevelopment of new tests
in the field of dementia(Eisai Co., Ltd.)2017

Oxford Gene Technology

Gene measurement
technologies
Technologies for measuring gene quantities
in cancer cells and enabling the detection ofcancer cell-derived DNA in the blood• Universities• Medical and research
institutions• Pharmaceuticalcompanies, others

2016 (Capital participation in 2014)l Hemostasisl Immunochemistry

Joint Business and Alliances with Outside
Institutions through Open Innovation

OUR PERFORMANCE AND
COMPANY INFORMATION

Reagents

Three Technology Platforms

1

Joint development of acancer genome profilingsystem(National Cancer Center)2020 (acquired 24.99% of shares)
Astrego Diagnostics

Existing businessl Cancer lymph node metastasis testing

Development of IT
solutions to support
next-generation medicalcare and diagnosis(OPTiM Corporation)

Co-Creation of New Testing and Diagnostic Value

Sysmex Report 2021

52

Management
Resources
INTRODUCTION

Diverse Human Resources Supporting Sustainable Growth
Sysmex is home to people who are motivated to help solve social issues through business. Employees with a strong conviction andwide-ranging backgrounds are a key management resource supporting our sustainable growth and represent one of Sysmex’s strengths.

n Main KPIs Demonstrating Sysmex’s Diversity (As of the End of Fiscal 2020)

Percentage of Female
Managers(Groupwide)

59.8%

16.2%
(Sysmex Corporation)

Management and Human Resource Management
That Respects Regional Characteristics

Many people have come to Sysmex because they empathizewith the feelings expressed in the Sysmex Way. As of the endof fiscal 2020, around 40% of the people in managerial posts
at Sysmex Corporation were mid-career hires. By leveraging
their backgrounds in different organizations and approaching
their work with new values and perspectives, they are helping
to improve Sysmex's competitiveness.
With R&D personnel, our major strength lies in the fact that
we have people with diverse and highly specialized knowledge
that enables us to develop instruments, reagents, and IT in-housefor our different technology platforms: cells, proteins and genes.
In addition, by creating a workplace where people withvarious sorts of physical, intellectual, and psychological disabilities can work in keeping with their characteristics, we
aim to foster an environment in which everyone, regardlessof disability, can work and grow together enthusiastically andwith peace of mind. Since its establishment in 2017, Sysmex

53

Sysmex Report 2021

Maximizethe potentialof diversehuman
resources

Diverse Human Resources

2.3%

Number of
employees:

9,510

Percentage of Group
employees overseas:

59.8%(As of the end of fiscal 2020)

Harmony, a special subsidiary*, has expanded the types ofoperations it undertakes and has grown in size. Today, thecompany has 23 employees. Sysmex Harmony assigns its
employees to work based on their individual abilities, and it
ensures close communication between employees and theirsupervisors through regular interviews. Consequently, thecompany has maintained a zero turnover as of March 2021.
The percentage of female managers across the Sysmex
Group is only 16%. We need to improve this figure. We do notintend to raise this number hastily, however. Instead, we will
gradually increase the number of female managers by building a comfortable work environment and expanding training
programs for skill development. Specifically in Japan, where thepercentage of female managers is lower than in in other regions,
we formulated the Action Plan under the Act on the Promotionof Women’s Active Participation, which is based on the Act on
the Promotion of Female Participation and Career Advancementin the Workplace. We have set 15% as our target rate of female
managers at Sysmex Corporation by fiscal 2024. We also aim to
reduce annual working hours to less than 1,950 hours.
>>Percentage of Female Managers P26

Development

Working environment creation

Provide opportunities to enhanceknowledge and skills

Create a working environment thatmaximizes capabilities

OpticsLiquids
Electronics

End of fiscal 2020
Mechanics

Software

Biochemistry

Help resolve
medicalissuesIntroduction of a New Personnel System to Drive
Sustainable Growth

won the 2021 BEST Award organized by the Association of
Talent Development (ATD) in the United States.

In April 2020, Sysmex departed from the performance-based
personnel system that ranked employees’ competence in orderto start introducing a job-based personnel system to people inmanagerial posts in Japan. This system determines employees’ranks based on their roles and what their jobs entail. We plan
to provide an environment that allows diverse human resources to pursue successful careers among our efforts to maintainconsiderable growth potential as a company, while retaining
our focus on talent development for long-term employment.
We will also implement a grade policy, evaluation system, and human resource development for all key positionsin the Group according to our Group-wide HR policy, thereby
establishing consistent personnel management applied to all
Group companies across the globe. In addition, we will switch
to a more externally competitive pay system in order to hireand develop talented human resources capable of successfully working anywhere in the world, which will enable us toachieve sustained business growth.

Making Work More Comfortable under the New Normal

Promoting Human Resource Development¢ Breakdown of Specializations among R&D Personnel

Strengthen
corporatecompetitivenessSysmex is implementing a variety of measures in individual
regions. For example we are fostering a sense of unity anddeveloping the next generation of human resources, based on
a Groupwide global human resource development system.
Sysmex America offers a training program called Sysmex
University that teaches leadership skills, as well as other business and specialized skills. In 2020, the system was improved
and the program was enhanced,
resulting in higher participation rates
2021
and improved competency and skills
AWARD
WINNER
among participants. Sysmex America

In addition to flex-time, which was adopted as part of ourefforts to create a comfortable working environment, Sysmex
Corporation launched a “smart work” system that enables employees to choose their working hours, along with where andhow they work, in fiscal 2021. Under this system, employees
are allowed to work the hours of their choosing between fivein the morning and ten at night. They can work at home or asatellite office if that suits their work or individual lifestyles.

OUR PERFORMANCE AND
COMPANY INFORMATIONDiversity and Inclusion Initiatives

40%

Conduct global recruiting to findhighly specialized human resources

OUR PLATFORM

Sysmex derives more than 80% of sales from regions outside
Japan. To support our business in more than 190 countries andregions around the world, rather than Japan-centric personnel
we require human resources are familiar with markets in various regions. Seconded Japanese employees accounts for lessthan 1% of total head counts in overseas businesses. Rather, weconcentrate on establishing local subsidiaries and hiring locally. Instead of directing business from corporate headquarters,
we hire and delegate business to people who are familiar with
their local markets, enabling us to roll out measures swiftly
and appropriately.

Recruiting

Percentage of Employeeswith Disabilities(Group companies in Japan)

OUR BUSINESS & STRATEGY

7.9%

Percentage of Mid-Career
Recruits in Managerial Posts(Sysmex Corporation)
Approximately

OUR VALUE

Percentage of Employees
Overseas(Groupwide)¢ HR Initiatives to Bolster Corporate Competitiveness

LGBTQ Initiatives
In fiscal 2020, Sysmex Corporation established apartnership registration system, under which partners
in same-sex relationships are recognized as spouses.
We are working to create a safe working environment
for LGBTQ people by providing information to deepen
understanding of sexual minorities.
In 2021, Sysmex Group companies incorporated
rainbow flags into the profile images of their oﬃcial
social networking accounts (for a limited time) to show
their support for LGBTQ people.

Changed official social network profile images
to show support for LGBTQ

Please see our Sustainability Data Book for more information
on provision of a comfortable working environment, promoting
diversity and developing human resources.
Sysmex Report 2021

54

Corporate Governance

Basic Policy on Corporate GovernanceElection/Dismissal
Managing Board
Members of the Managing Board(Excluding members of the Audit
and Supervisory Committee)

’05

’06

’07

’08

’09

’10

Compensation Committee
Business Execution

Executive Officers
Steering Committee

Organization>>Website >About Sysmex >Corporate Governance

’11

’12

’13

’14

’15

’16

’17

’18

’19

2021.4—

From April 2018
System enhancement

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

Two years

One

11%

30%

33%

From June 2021
41%

“Sysmex Way,” the corporate philosophy of the Sysmex Group

Deliberating 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 with decisions on executive compensation

Members of the Managing Board
Chairman and CEO, members of theManaging Board (2), outside memberof the Managing Board (1)Chairman and CEO, members of theManaging Board (2), outside memberof the Managing Board (1)Members of the Audit andSupervisory Committee
Chairman and CEO, senior executive
officers, member of the Audit andSupervisory Committee* (1)Chairman and CEO*, executive
officers, member of the Audit andSupervisory Committee (1)

Board
Name

External

Founding philosophy“Three Aspectsof Confidence”

From April 2016
International Financial Reporting Standards(IFRS)

Managing Board

17
2
2
20
12
16

n Members of Major Boards (As of June 25, 2021)

From June 1995
From June 2006
One (out of three serving
Two (out of four serving corporate auditors)
corporate officers)
Japanese GAAP

Composition* Participates as an observer

From June 2021
Five

Four

Meetings Held in
Fiscal 2020

Function and Content

Audit and Supervisory Independent institution for auditing the execution ofCommittee
operations, mainly by members of the Managing Board
Deliberating on and discuss medium- to long-term
Global Strategy
Group management directions, important strategies
Committee
and issues
Discuss, deliberate on and report on projects that are
Steering Committee
important from the perspective of making progress on
the Group’s fiscal yearly planInternal

14%

Accounting
standards

Accounting
Auditing

OUR PERFORMANCE AND
COMPANY INFORMATION

From April 2020
Establishment of an Internal
Control Committee

Outside members
the Managing Board

Philosophy’20

From June 2016
Company with an Audit andSupervisory Committee

Chief officer system (CEO)Corporate auditors(outside)

Compliance Committee
Divisions,
Subsidiaries and Affiliates

Executive officer system

Ratio of outside
members of
the Managing Board

Internal Audit Committee

Global Strategy Committee

Sysmex complies with each of the principles of Japan’s
Corporate Governance Code, introduced by the Tokyo Stock
Exchange. Please see our website for details.

Management
organization

Term of office formembers of
the Managing Board

Chairman and CEO

Cooperation

Compliance with Japan’s Corporate Governance CodeCompany with a Board of Corporate Auditors
From April 2005

Cooperation

OUR PLATFORM’04

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

OUR BUSINESS & STRATEGY’03

Auditing/
Supervision

Election/Dismissal

Nominating Committee¢ Advances in Corporate Governance(Fiscal Years)

Election/Dismissal

OUR VALUE

Sysmex has adopted an Audit and Supervisory Committee.
Managing Board members who are also members of the Audit
and Supervisory Committee have voting rights. This arrangement reinforces the Managing Board’s audit and supervisory
functions, as well as heightening management transparency and objectivity. In addition, we have appointed outside

Shareholders’ Meeting

Accounting Auditors

Management Organizationn Corporate Governance StructureInternal
Audit Officemembers of the Managing Board, thereby strengthening theboard’s supervisory function. Furthermore, we have introduced
an executive officer system to accelerate decision-making on
business execution and respond swiftly to changes in the business environment. In addition, in fiscal 2020 we establishedan Internal Control Committee tasked with overall internal
control and risk management to ensure sustainable growthand enhance corporate value over the medium to long term.
This arrangement will promote the systematic preparation,
operation, and monitoring of internal controls, while taking abird’s-eye view of the overall Group.
The Company currently has 12 members of the Managing
Board (of whom five are outside members). Also, threeboard members are members of the Audit and Supervisory
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 five concurrently serve as members of the Managing Board).

Sysmex recognizes that reinforcing corporate governance is an
important management issue. Based on the “Sysmex Way,” thecorporate philosophy of the Sysmex Group, we are working
to maximize the corporate value of the overall Group by enhancing management soundness and transparency and raising
management speed and efficiency.
In our efforts to shore up corporate governance over
the years, we have 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 establisheda Compliance Committee and an internal reporting system,
augmented a Groupwide risk management function, and engaged in other initiatives to strengthen our base with a view tosustainable growth.

INTRODUCTION

By reinforcing corporate governance, we aim to enhance management soundness and transparency, andmaximize corporate value throughout the Group.

Hisashi Ietsugu
Kaoru Asano
Kenji Tachibana
Iwane Matsui
Hiroshi Kanda
Tomokazu Yoshida
Yukitoshi Kamao
Yukio Nakajima2
Junzo Yamamoto2
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 the Nominating
Committee

Rate of Attendance at
Meetings of theCompensation Committee

Rate of Attendance at
Meetings of the Audit andSupervisory Committee

100%
100%
100%
100%
100%
—1
100%
100%
100%
100%
100%
—1
100%
100%

100%
100%
—1
—
—
—
—
100%
—
—
—
—
—
100%

100%
100%
—1
—
—
—
—
100%
—
—
—
—
—
100%

—
—
—
—
—
—
100%
—
—
—
—
—
100%
100%

Note: Attendance rates are for fiscal 2020. 1 Member from June 2021 2 Stepped down in June 2021

55

Sysmex Report 2021

Sysmex Report 2021

56

Effectiveness of the Managing Boardl Appointments and dismissals of members of the Managing
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 F ormulation of Group mid-term management plan andfiscal year action planlG roup operating performance; quarterly, semiannual, andannual resultsl Matters related to promoting digitalization in the Groupl Alliance strategies for expanding business

Effectiveness of the Audit and Supervisory Committee

Executive Compensation

Based on the corporate philosophy of the Sysmex Group, the“Sysmex Way,” we define our view of compliance as “conducting business activities not only in compliance with applicablelaws and regulations, but also based on fairness and high ethicalstandards.” We have established a Global Compliance Code, inwhich particularly important conformance rules and behavioral
guidelines for all Group executives and employees to abide by
are set out, and we conduct training and work to instill this code.
The code describes our thoughts on ethics in relation to researchand development, prevention of bribery, and adherence to international guidelines such as the Universal Declaration on Human
Rights, as well as conserving the global natural environment.
Sysmex has established and operates an internal reporting system for all Group companies.
>>Sustainability Data Book >Compliance P52

n Breakdown of Executive Compensation
Compensation for members of the Managing Board (excluding members of the Audit and Supervisory Committee and outside members of the Managing Board)
Fixed compensation: 27%

Performance-linked compensation: 44%• Compensation for members of
the Managing Board• Compensation for business execution

Standards for Payment Position-specific factors (related to the scale Performance-linked compensation amounts are multiplied by a variable

and responsibility of members of thecompensation factor within 3% of profit attributable to owners of theManaging Board, as well as the degree ofparent to determine the total amount of variable compensation, which istheir impact on Group management) are used disbursed on an individual basis in accordance with success.
to determine disbursements.
Note: A certain portion is applied toward thepurchase of Company stock.

Non-monetary compensation: 29%• 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)Share purchase amounts or numbers of shares are
based on position-specific factors (related to thescale and responsibility of members of theManaging Board, as well as the degree of theirimpact on Group management).

OUR PERFORMANCE AND
COMPANY INFORMATION

Compensation for members of the Managing Board makesa clear link between operating performance and responsibility for achievements. Compensation for members ofthe managing Board (excluding members of the Audit
and Supervisory Committee and outside members of theManaging Board) is divided into three broad categories:
fixed compensation, performance-linked compensation, andnon-monetary compensation.

>>Shares Held by Individual Directors P63

Compliance

OUR PLATFORM

Members of the Audit and Supervisory Committee attend
important meetings, such as meetings of the Managing Board;browse approval documents; audit subsidiaries, and conduct
other activities to confirm the status of business execution bymembers of the Managing Board.
The Audit and Supervisory Committee also audits theworking of the Company’s internal control system. The committee works closely with the accounting auditors to confirm theaccounting audit plans and results and internal controls related
to financial reports, exchanging information and opinions.
Principal matters considered by the Audit and Supervisory
Committee in fiscal 2020 included the appropriateness ofaudit policies and plans, preparation and state of operation of
the internal control system, and methods and results of audits
by the accounting auditors.

Compensation for members of the Managing Board whoare members of the Audit and Supervisory Committee andoutside members of the Managing Board comprises fixedcompensation only.
The Managing Board has delegated to the Chairman and
CEO the task of determining individual compensation andspecific details of compensation for members of the Managing
Board (excluding members of the Audit and Supervisory
Committee). The Managing Board confirms the appropriateness of the process for determining officer compensationand compensation amounts via the Audit and Supervisory
Committee. This committee has three members (of whom two
are outside members of the Managing Board).

OUR BUSINESS & STRATEGY(Composition)
The scale of the Managing Board and ratio of independent
outside members of the Managing Board are generally appropriate, both in nature and diversity.
(Operation)
The provision of information necessary to fully discuss theManaging Board’s agenda is generally appropriate. To further
improve effectiveness, the Company is continually working to
improve the Managing Board’s operation by providing advance
explanations to outside members of the Managing Board, organizing points at issue, and providing related information necessary to understand the background. We hold opinion-exchange
meetings attended solely by outside members of the Managing
Board as we seek to promote understanding of key issues.
We also engage in other initiatives to invigorate deliberations.
Nevertheless, room for improvement remains with respect toimproving the timing when materials for deliberation are provided; initiatives are underway to provide these materials earlier.
(Status of Agenda and Deliberation)
The timing for addressing and deliberating the Managing
Board’s agenda is appropriate, and we strive to provide individual members of the Managing Board with an understandingof agenda items and information prior to meetings, as well as

n Major Managing Board Agenda Items and Reporting Items (Fiscal 2020)

Fixed compensation comprises compensation for members of the Managing Board and compensation for businessexecution. Position-specific factors (related to the scale andresponsibility of members of the Managing Board, as well as
the degree of their impact on Group management) are used todetermine 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 performancelinked compensation. As non-monetary compensation, Sysmex
encourages officers to acquire Company shares. Sysmex’s aims
are to enhance corporate value from a shareholder perspective,
boost the incentive to enhance corporate performance over the
medium to long term, and augment personnel retention.
A certain portion of fixed compensation for members of
the Managing Board and executive officers is applied toward
the purchase of the Company’s stock. The Company aims
for the Chairman, President, and CEO to hold shares worth
five times his fixed compensation, and for other membersof the Managing Board and executive officers to hold sharesworth twice their fixed compensation, holding the acquired
shares during their terms of office. As of March 31, 2021, theChairman, President, and CEO held 612,000 shares (139 times
his fixed compensation), and other members of the Managing
Board and executive officers (those who hold shares) held an
average of 26,000 shares (16 times their fixed compensation).

OUR VALUEn Overview of Evaluation of Effectivenessto leverage their knowledge and experience to engage in deliberation. For matters of management importance, decisionmaking is appropriate, with outside members of the Managing
Board interjecting objective and rational opinions.

INTRODUCTION

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 overallbalance of the Managing Board.
To enhance the functions of the Managing Board, theCompany conducts a document-based survey of all membersof the Managing Board (including members of the Audit andSupervisory Committee). The Board’s effectiveness is determined on the basis of deliberation by the Managing Boardof the aggregate results. In fiscal 2020, the Board was evaluated highly on many items, indicating that it is functioning
effectively and filling its role appropriately. Meanwhile, theCompany recognizes the need to persevere in initiatives tofurther increase the Board’s effectiveness. We will continue
to regularly evaluate the Managing Board with the aim ofmaintaining and increasing its effectiveness and continuing toenhance our corporate value.

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)n Skill Matrix for Members of the Managing Board (As of June 25, 2021)
Knowledge and experience
Name

Internal
External

Hisashi Ietsugu
Kaoru Asano
Kenji Tachibana
Iwane Matsui
Hiroshi Kanda
Tomokazu Yoshida
Yukitoshi Kamao
Masayo Takahashi
Kazuo Ota
Hidekazu Fukumoto
Kazumasa Hashimoto
Michihide Iwasa

Gender

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

Year

1949
1958
1957
1961
1957
1964
1956
1961
1955
1955
1953
1956

InitialCorporate
appointment Independent management

1986
2014
2014
2019
2019
2021
2016
2016
2019
2021
2020
2020







GlobalSales and Technology, Production,
Marketing
R&D
SCM

ICT



















n Actual Executive Compensation (Fiscal 2020)

Financeandaccounting

Humanresources



































Note: “Global” indicates experience at an overseas post.

57

Sysmex Report 2021

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

Total
compensation

Executive category

Members of the Managing Board (excluding members of the Audit and Supervisory Committee andoutside 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

822

222

363

236

7

24

24

—

—

1

28

28

—

—

6

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

Executive category

Company category

Hisashi Ietsugu

Member of theManaging Board

Submitting
company

Number of executives receiving
compensation(Millions of yen)Amount of compensation by typeNon-monetary
Fixed Compensation Performance-linked
Compensationcompensation

52

119

51

Total compensation

223

Sysmex Report 2021

58

Risk Management
INTRODUCTION

Sysmex is responsible for the steady provision of products andservices to customers in more than 190 countries and regions
around the world, ensuring that testing operations (which areessential to healthcare) are not interrupted. For that reason,
we have formulated countermeasures from a short- to longterm perspective to ensure that operations continue under any
circumstances. In addition to natural disasters and countryspecific risks, we consider increasingly stringent healthcare
restrictions in individual countries, the emergence of productquality issues, and information 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 to maintainor increase our position in the market.

In fiscal 2020, Sysmex established an Internal Control
Committee as a follow-up to the Risk Management Committeethat has been in place since fiscal 2019. The Internal Control
Committee is tasked with addressing strategic risks and promoting management activities spanning risk in general. The
president and CEO chairs the Internal Control Committee,
whose members include senior executive officers and members of the Audit and Supervisory Committee (excluding outside members of the Managing Board), with outside membersof the Managing Board serving as observers.
This committee regularly evaluates risks in such categories as compliance (including fair dealing, corruption, andbusiness ethics), human resources, occupational health andsafety, the environment, and finance and accounting (including

taxation), and takes measures to counter risks the committee
defines as having a significant impact on the Group’s business.
The committee also drafts plans for each fiscal year, with activity themes for each region and division, and reports regularly.
We have formulated a business continuity plan (BCP) to
fulfill our social responsibility by providing a stable supply of
products and services to medical institutions when disasters,
cyber threats, or other risks materialize. To ensure that Sysmex
products continue to operate stably at medical institutions
even when risks materialize, the BCP identifies important
products to be given supply priority. We have augmented ourregulations and manuals related to cyber threats and disaster
response and have put in place a structure to ensure we canrespond swiftly to any emergency.
The COVID-19 pandemic, which broke out in 2019, called
for us to quickly ascertain the impact on our business activities

and respond accordingly. At the start of the pandemic welaunched countermeasures to determine the status of theoverall Group. We also took steps to ensure the safety of ouremployees, operations at our instrument and reagent factories around the world, and product development related to
COVID-19 reagents. As a result, even in this crisis we wereable to continue ensuring a stable supply of products, services
and support to our customers. Meanwhile, we responded to
new demands by developing and launching new products. We
provide timely disclosure outside the Company in relation to
the expected impact.

OUR BUSINESS & STRATEGY

Risk Management Structure

OUR VALUE

Our Perspective on Operating Risks>>Sustainability Data Book > Risk Management Structure P58

n Principal Operating Risks
Risks

Major Content

Main Impacts if Risks Materialize

 Halt of business operations due to enormous damage to Group facilities and infrastructure, or injuries to people Deterioration of operating performance and cash flow due to a halt in
medical institutions’ operations and decreasing testing demand Substantial downturn in productivity due to difficulty in continuing ormaintaining human resources and the working environment

External

Disaster, severe accidents, or other occurrences that
disrupt product supplyl Damage to manufacturing facilities and the stoppage of production
activities due to severe accidents, such as natural disasters and firesl Obstacles to the procurement of substances if suppliers suspend
operations

Externall Overseas business accounting for more than 80% of total Group salesl Growth in sales in emerging markets leading to a higher proportion ofsales taking place in non-key currencies
l Worsening market prices due to budget reductions by countries andmedical institutions

Increasingly stringent measures to curtail healthcare
expenditureGrowing difficulty of obtaining regulatory approval due
to increasingly stringent healthcare laws and restrictions, l Delayed product launches due to longer approval periods
as well as the introduction of independent regulations

External
External
External

Revisions to our business model due to changes in themarket environmentl Hematology field accounting for a high percentage of sales and profits

Internal

Emergence of quality problems related to products
or services

l Major impact on test results

Internal

Information security risks

l Impact on operations due to information leaks such as cyber threats andnetwork breakdowns

Internal

M&A-related risks

l Impact on strategies and operating performance if the results of M&A fall
below expected levels

Internal

Compliance infringementsl Compliance infractions of laws and regulations

Internal

Sysmex Report 2021

l We have configured a global risk management structure (such as
reinforcing our BCP) aimed at reducing damage and facilitating an earlyrecovery of business activities.
l We have built an infrastructure capable of responding flexibly to emergencies (such as by introducing remote working).
l We prevent infections from spreading by building testing structures
involving the development and sale of reagents and opening of labs toprovide assay services.
l We have introduced seismically isolated structures at instrument factories, diversified our reagent production function globally, and created a
Suspension of product supply leading to a decline in sales and an inability
system of mutual supply.
to fulfill our supply responsibilities, leading to a decline in corporate valuel We procure materials and parts from multiple companies and maintainstockpiles. We also conduct CSR surveys of our business partners.
l Finance divisions and local subsidiaries minimize risks through forward
exchange contracts.
Worsening of the Group’s consolidated operating performancel We have globally diversified our reagent production functions.
l We provide highly productive products and services that help makeLonger replacement cycles and growing downward pressure on prices
healthcare management more efficient.
Lowered ability to capture market opportunities and increasing cost of
response

OUR PERFORMANCE AND
COMPANY INFORMATIONl The impact on operations of global pandemics such as COVID-19 andother unknown infectious diseases

Principal Responses
OUR PLATFORM

The spread of infectious disease or emergence of otherrisks that could substantially affect business activities

Exchange rate fluctuations

59

Key
Environmental
Factorsl The regulatory affairs division and local subsidiaries remain abreast of
new laws and regulations, and configure optimal systems.

l We are expanding our business portfolio outside of hematology andinto such fields as hemostasis and urinalysis.
l We are accelerating development by establishing drives of growth.
l We comply with individual countries’ laws and regulations, as well asinternational restrictions, and we have created structures for maintaining and enhancing quality.
Increasing cost of response and decline in corporate creditworthiness and l We have enhanced our operational and design quality, bolstered massbrand power
production quality, and reinforced our systems for checking quality
prior to market launch.
l We hold supplier presentations aimed at increasing the quality of thematerials and parts we procure.
l We have alternative network routes and have implemented routine
system administration procedures.
lWe
are implementing mechanisms for detecting unauthorized commuHalt of business activities and a decrease in corporate creditworthiness
nications and isolating malware, monitoring 24 hours a day, setting up
a Computer Security Incident Response Team (CSIRT), and thoroughly
educating our employees.
l We conduct thorough prior audits, both of the market environment andWorsening of the Group’s consolidated operating performance and refrom a financial perspective.
view of business strategiesl We configure administrative structures for management and finance.
l We provide comprehensive employee education and have put in place
Halt of business activities and a decrease in corporate creditworthinessa global internal reporting system.
Worsening of the Group’s consolidated operating performance

Sysmex Report 2021

60

Members of the Managing Board
INTRODUCTIONOUR VALUE

Kenji Tachibana

Kazuo Ota

Masayo Takahashi

Hidekazu Fukumoto

Member of the Managing Board andSenior Executive Oﬃcer
Senior Managing Director, CTO
R&D, Incubation and MR Business

Chairman and CEO

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

Member of the Managing Board (Outside)
Independent Director

Member of the Managing Board (Outside)

Member of the Managing Board (Outside)
Independent Director

OUR PLATFORM

Hisashi Ietsugu

OUR BUSINESS & STRATEGY

Kaoru Asano

OUR PERFORMANCE AND
COMPANY INFORMATION

61

Sysmex Report 2021

Hiroshi Kanda

Iwane Matsui

Tomokazu Yoshida

Kazumasa Hashimoto

Yukitoshi Kamao

Michihide Iwasa

Member of the Managing Board andSenior Executive Oﬃcer
Managing Director
Business Strategy Development

Member of the Managing Board andSenior Executive Oﬃcer
Managing Director
Global Marketing

Member of the Managing Board
and Senior Executive Oﬃcer
Managing Director
R&D, Incubation and
MR Business

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

Member of the Managing Board(Member of the Audit andSupervisory Committee)

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

Sysmex Report 2021

62

Members of the Managing Board (As of June 25, 2021)
Number of Company shares held: 612,800

R&D, Incubation and MR Business
Number of Company shares held: 52,700

Corporate Management, Regulatory Affairs &Quality Assurance and DX Strategy Development
Number of Company shares held: 32,500

Aug. 1987 Joined the Company
Apr. 2009 Executive Officer, Manager of Central
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 andSenior 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 andSenior Executive Officer, Senior Managing
Director, COO LS Business Unit and CTO
Apr. 2021 Member of the Managing Board andSenior Executive Officer, Senior
Managing Director, CTO (current)

Mar. 1980 Joined the Company
Apr. 1998 President of Sysmex Singapore Pte Ltd.
(presently Sysmex Asia Pacific Pte Ltd.)
Apr. 2011 Executive Officer, Executive Vice
President of IVD Business Development
Apr. 2013 Senior Executive Officer
Jun. 2014 Member of the Managing Board andSenior Executive Officer
Apr. 2015 Member of the Managing Board and Senior
Executive Officer, Managing Director
Apr. 2017 Member of the Managing Board andSenior Executive Officer, Senior
Managing Director
Apr. 2018 Member of the Managing Board andSenior Executive Officer, Senior Managing
Director, COO IVD Business Unit
Apr. 2021 Member of the Managing Board andSenior Executive Officer, Senior
Managing Director (current)

Masayo Takahashi (born 1961)

Kazuo Ota (born 1955)

Hidekazu Fukumoto (born 1955)

Member of the Managing Board (Outside)

Member of the Managing Board (Outside)
Independent Director

Member of the Managing Board (Outside)
Independent Director

Number of Company shares held: N/A

Number of Company shares held: N/A

Number of Company shares held: N/A

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

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 Bankof Tokyo-Mitsubishi UFJ, Ltd.
Jun. 2010 Managing Director and Chief Executiveof The Bank of Tokyo-Mitsubishi UFJ, Ltd.
May 2012 Senior Managing Director of The Bank ofTokyo-Mitsubishi UFJ, Ltd.
May 2014 Deputy President Chief Executive of The
Bank of Tokyo-Mitsubishi UFJ, Ltd.
May 2016 Deputy President (Director) of The Bankof 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. (current)
Jun. 2021 Joined the Company, Member of theManaging Board (Outside) (current)

Reasons for Appointing

Reasons for Appointing

Reasons for Appointing

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

He was appointed to utilize his abundant experienceand deep insight in corporate management for
management of the Company.

He was appointed to utilize his knowledge on
finance, financial accounting, risk management, as acorporate manager of a financial institution, as wellas his abundant experience and deep insight in thebusiness world.

(Important concurrent position)
President of Medicaroid Corporation
Reasons for Appointing

Reasons for Appointing

Reasons for Appointing

Holding the positions of Chairman and CEO of theCompany, he has managed all of Sysmex andprovided strong leadership for many years. He wasappointed because he will be essential forincreasing the corporate value with his sense ofbalance, enabling appropriate supervision anddecision-making of the entire management basedon his insight and abundant experience andachievements as a corporate manager.

He has been involved in research and technology
development for many years and has contributed tobusiness development. He was appointed because
leveraging his experience and insight in new R&D
will be essential for increasing corporate value.

He has been involved in business strategy
development and international businesses and has
contributed to strategic and global businessdevelopment. He was appointed because he will beessential for increasing corporate value through thegrowth of businesses.

Iwane Matsui (born 1961)

Yukitoshi Kamao (born 1956)

Kazumasa Hashimoto (born 1953)

Member of the Managing Board andSenior Executive Officer
Managing Director

Member of the Managing Board(Member of the Audit andSupervisory Committee)

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

Michihide Iwasa (born 1956)
Member of the Managing Board (Outside)(Member of the Audit and Supervisory
Committee), Independent Director

Global Marketing
Number of Company shares held: 2,100

Business Strategy Development
Number of Company shares held: 62,500

R&D, Incubation and MR Business
Number of Company shares held: 1,100

Number of Company shares held: 46,700

Number of Company shares held: N/A

Number of Company shares held: N/A

Apr. 1985 Joined the Company
Jul. 2001 President of Sysmex Europe GmbH
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 andSenior Executive Officer, Managing
Director (current)

Mar. 1980 Joined the Company
Apr. 2004 Chairman of Sysmex Shanghai Ltd.
Apr. 2013 Executive Officer, ICH Business Unit andExecutive Vice President of Hemostasis
Product Engineering Development
Apr. 2017 Senior Executive Officer
Apr. 2019 Senior Executive Officer, Managing
Director
Jun. 2019 Member of the Managing Board andSenior Executive Officer, 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 andSenior Executive Officer, Managing
Director (current)

Reasons for Appointing

Reasons for Appointing

Reasons for Appointing

He has been involved in promoting businesses suchas domestic and international sales and marketing
serving as a sales manager for domestic sales andas a representative of overseas regional
headquarters of the Group for many years, and has
contributed to global business development. He
was appointed because his abundant experienceand wide-ranging insight will be essential forincreasing the corporate value of the Group.

He has been involved in promoting businesses suchas product planning and market development of
the Group for many years and has contributed to
global business development. He was appointed
because his abundant experience and wide-ranging
insight will be essential for increasing the corporate
value of the Group.

He has been involved in research and technology
development for many years and has contributed tobusiness development. He was appointed because
his abundant experience and wide-ranging insightwill be essential for increasing the corporate value.

Sysmex Report 2021

Mar. 1978 Joined the Company
Apr. 2013 Executive Officer, Executive Vice
President of Business Administration
Jun. 2016 Member of the Managing Board(Member of the Audit and Supervisory
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 ofGinsen 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 andRepresentative Director of Kansai Urban
Banking Corporation
Apr. 2018 Representative Director and President of
Kansai Mirai Financial Group, Inc.
Apr. 2019 Chairman of Kansai Mirai Bank, Limited.
(current)
Jun. 2019 Outside Corporate Auditor of THE
ROYAL HOTEL, LIMITED (current)
Jun. 2020 Joined the Company, Member of theManaging Board (Outside) (Member of the
Audit and Supervisory Committee) (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 and President ofKobelco Logistics, Ltd.
Jun. 2020 Senior Advisor of Kobelco Logistics, Ltd.
(current)
Jun. 2020 Joined the Company, Member of theManaging Board (Outside) (Member ofthe Audit and Supervisory Committee)(current)

Reasons for Appointing

Reasons for Appointing

Reasons for Appointing

He was appointed to utilize his experience andspecialized expertise related to corporate
management, which is necessary to increase theaudit and supervisory functions.

He was appointed to utilize his abundant experienceand deep insight into corporate management as acorporate manager of a financial institution.

He was appointed to utilize his abundant experienceand deep insight into corporate management foraudits of the Company.

Sysmex Report 2021

OUR PERFORMANCE AND
COMPANY INFORMATION

63

Hiroshi Kanda (born 1957)
Member of the Managing Board andSenior Executive Officer
Managing Director

Tomokazu Yoshida (born 1964)

Member of the Managing Board andSenior Executive Officer
Managing Director

OUR PLATFORM

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 of theManaging Board (Outside) (current)
Dec. 2017 Director of Research Center, Kobe City
Eye Hospital (current)
Aug. 2019 President of Vision Care Inc. (current)
Aug. 2019 Senior Visiting Scientist, Laboratory for
Retinal Regeneration Research, RIKEN
Center for Biosystems Dynamics
Research, Japan (current)
Aug. 2020 President, VCGT Inc. (current)
Mar. 2021 President, VCCT Inc. (current)

OUR BUSINESS & STRATEGY(Important concurrent position)
Chairman of the Kobe Chamber of Commerceand Industry

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

OUR VALUE

Sep. 1986 Joined the Company, Member of theManaging Board
Mar. 1990 Member of the Managing Board and Senior
Executive Officer, Managing Director
Feb. 1996 Member of the Managing Board andSenior Executive Officer, Managing
Director (Representative Director)
Apr. 1996 Member of the Managing Board andSenior Executive Officer, Senior Managing
Director (Representative Director)
Jun. 1996 President and CEO
Apr. 2013 Chairman and CEO (current)

Kaoru Asano (born 1958)
Member of the Managing Board andSenior Executive Officer
Senior Managing Director, CTO

INTRODUCTION

Hisashi Ietsugu (born 1949)
Chairman and CEO

64

Conversation with Outside Members of the Managing Board

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

To achieve sustainable growth, we will work to further strengthen our management baseand create value from the perspective of our stakeholders.

How would you rate Sysmex?

65

Sysmex Report 2021

Ota: The role of the mid-term management plan is to present a
growth strategy that can be imagined concretely based on our
vision, and to share it across the Group. Sysmex still has a lot of
potential for growth in terms of markets, technologies, and competition. The target numbers are aggressive and the plan is good,but I think ROIC should be used as a KPI in addition to sales andoperating profit. I believe this will enable us to more clearly recognize the increase in corporate value and its economic value,
and it will also be useful in making investment decisions.
Hashimoto: Like Mr. Ota, I think the plan is ambitious
and very challenging, but we need to set specific metrics toachieve our financial goals. We also need to make people
involved in each business field aware of the need to analyze
factors and implement the PDCA cycle to achieve their goals.
As part of the process of further expanding the Group’s scale,for example, if a large investment appears beneficial to our
growth the Group has various options, as long as the target
financial indicators are met. We need to keep such cases inmind as we work to achieve the aims of our mid-term management plan, with all departments and employees communicating well with each other.

Hashimoto: Gone are the days when it was acceptable for
a company to simply put up a sign that it is engaged in ESG
activities, even though its activities actually lacked substance.
Sysmex has been actively involved in ESG initiatives. Going forward, we must now raise the bar on our activities and achievethese new targets, both for Sysmex Group companies and forits business partners. To do so, we need to deepen and manage specific discussions on how to develop relationships withstakeholders, how to raise the awareness of every employee,
and where each business should make its purchases and sales.

OUR PERFORMANCE AND
COMPANY INFORMATION

Hashimoto: When I first came across Sysmex throughmy previous job in the 1980s, it was still TOA MEDICALELECTRONICS CO., LTD. At that time, sales were less than
¥10.0 billion, but now the Group’s sales have grown to ¥300.0
billion. This growth is a result of Sysmex’s efforts to resolve
the social issues of the times through healthcare. Frankly, I
feel that the Group has grown while making a contribution tosociety. To achieve sustainable growth in the future, I believe
it will be essential to adapt to changes in the environment
and further develop other business fields in addition to ourstrength in the hematology field.
Ota: In addition to what Mr. Hashimoto said, my impressionof Sysmex is that it is a group that has brought forward its
founding principles and is expanding globally in a dynamic
and flexible manner under the strong leadership of President
Ietsugu. The vision and policies permeate the entire Group,
which continues to take on challenges aggressively andboldly. That said, strengths and weaknesses are flipsides ofthe same coin, and I think we need to be careful that people
who should be exercising leadership do not become followers instead.

What are your thoughts on the new mid-term

Q2 management plan?

OUR PLATFORM

Q1

Would you share your opinions about

Q3 Sysmex’s ESG initiatives?

Ota: I think Mr. Hashimoto is right, but as Sysmex is doing
business in the healthcare field, conducting its business properly helps to resolve the world's healthcare issues. We alsoneed to enhance governance by bringing in outside observers.
It would be good to look more closely at case studies of companies that are advanced in this this area, and then work toenhance our own system.
Hashimoto: I also believe that the governance system needs
to be strengthened.
For example, when increasing human resource diversity, people tend to focus on numerical indicators, such as the ratio of
men to women or the percentage of foreign nationals among
executives and employees. It is important to acquire and develop human resources that are diverse in a true sense, notjust as numbers. In this sense, Sysmex has launched a numberof initiatives. I think these activities should be thoroughly
implemented throughout the Group.
Ota: Sysmex already has three non-Japanese executive officers, and this year saw the appointment of its first female
executive officer. We are making progress on rejuvenating anddiversifying our management structure, with the addition ofyoung people to the Managing Board, and I believe that it isimportant to move steadily forward in this direction. Promoting
diversity within the management structure is one example ofthese efforts—one that I believe is quite meaningful.

OUR BUSINESS & STRATEGY

Kazumasa Hashimoto

OUR VALUE

Member of the Managing Board (Outside)
Independent Director

INTRODUCTION

Kazuo Ota

Ota: The organizational changes this April consolidated thebusiness promotion system by function to facilitate internal
collaboration and information sharing. I think this was a goodidea. If information and awareness are shared throughout
the Group, and if we can respond to changes in the environment in an agile manner, we can help to resolve issues quickly
and contribute substantially to the growth of our business.
It would be meaningless, though, to simply consolidate thestrategic functions of the IVD and life science businesses
formally, while the situation on the ground remained the same
as before. I think the real goal of consolidating functions is tomaintain a growth trajectory through the focused allocationof company-wide management resources and well-diversified
product development strategies. As a result, the Company
should be able to achieve robust growth in the life sciencebusiness three or 10 years in the future.
Hashimoto: In formulating the mid-term management plan,
the Group has taken on board the lessons learned from ourdelay in our initial response to COVID-19. Why was Sysmex,
with its globalization and development capabilities, so slow
to respond to the information it received, and unable to contribute quickly to resolving social issues? Reflecting on thisquestion, I also thought it was a good thing that changes tothe organizational structure aimed at improving executional
capabilities were included.

What are your future aspirations as outside

Q4 members of the Managing Board?

Ota: I hope to use my experience in overseas business andcorporate planning to improve corporate value. Of course, as
an outside member of the Managing Board I will continue tofulfill my original role of supervising management from theperspective of external and general shareholders.
Hashimoto: I recognize that it is particularly important tostrengthen the governance system as our Group grows. Doingso will lead to the resolution of various issues and contribute to business performance. As a member of the Audit andSupervisory Committee, I will support the strengthening ofgovernance and internal control systems so that the new organization and management structure can fulfill its mission.

Sysmex Report 2021

66

Executive Officers (As of June 25, 2021)

Senior Executive Officer
Deputy in charge of Corporate
Management
Executive Vice President ofCorporate Business Planning Div.,
Corporate Executive Office

Takashi OnoPeng Zuo Hui

Senior Executive Officer
In charge of Manufacturing and SCM

Executive Officer
President and CEO, Sysmex Shanghai Ltd.

Frank Buescher

Mitsuhisa Kanagawa

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

Executive Officer
Executive Vice President of
Business Strategy Development Div.

Executive Officer
Executive Vice President ofMedical Affairs Div.

Kaoru Watanabe

Takaaki Nagai

Executive Officer
Supervision of JEA
Executive Vice President of JEA
Region Div.

Executive Officer
Executive Vice President of
System Engineering Div.

Kinya Uchihashi

Activity ReportManagement’s Discussion and Analysis. . . . . . . . . . . . . . . . .  69
Consolidated Financial Data (10 Years). . . . . . . . . . . . . . . . . .  75
Consolidated Statement of Financial Position . . . . . . . . . . .  77
Consolidated Statement of Income. . . . . . . . . . . . . . . . . . . . .  78
Consolidated Statement of Comprehensive Income. . . . . .  78
Consolidated Statement of Changes in Equity. . . . . . . . . . .  79
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . .  80
Non-Financial Targets and Results. . . . . . . . . . . . . . . . . . . . . .  81
Stakeholder Engagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  83

OUR PERFORMANCE AND
COMPANY INFORMATION

Reiko Watanabe

Executive Officer
CEO, Sysmex Europe GmbH

Activity Report and Corporate Overview
OUR PLATFORM

Alain Baverel

OUR BUSINESS & STRATEGY

Senior Executive Officer
Deputy in charge of Business
Strategy Development

OUR VALUE

Kensuke Iizuka

INTRODUCTION

Mamoru Kubota

Corporate Overview
Supporting Healthcare with In Vitro Diagnostics (IVD). . .  85
Sysmex’s Businesses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  87
Primary Products and Services. . . . . . . . . . . . . . . . . . . . . . . . . . 89
Profit Model. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  92
Terminology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  93
Stock Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  95
Corporate Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  96

Executive Officer
Executive Vice President of
Reagent Production
President and CEO,
Sysmex International Reagents Co., Ltd.

67

Sysmex Report 2021

Sysmex Report 2021

68

Activity ReportManagement’s Discussion and Analysis
INTRODUCTION

Operating Environment

2016

2017

2018

2019

2020

1USD

108.4

110.9

110.9

108.7

106.1

1EUR

118.8

129.7

128.4

120.8

123.7

1CNY

16.1

16.8

16.5

15.6

15.7

(FY)

n Profit Attributable to Owners of the Parent
n Return on equity (ROE)n Operating Profit
n Operating Margin

293.5

301.9

(Yen)

305.0 (¥ billion)

59.0

61.2

20.7

40.6
55.2

51.7

21.0

39.2

34.8

2019

2020
(FY)

69

Sysmex Report 2021

2016

2017

2018

2019

2020

(FY)

2016

China
2.75

2017

Higher grossprofit on
increased sales
2.04

Japan
2.03
AP
-2.18

301.9
17.4

17.0 (%)

Americas-3.14

33.1(¥ billion)

20.7

FX
impact-0.76

SG&A
expensedecrease

Increase in otheroperating income
and expenses

2.31

305.0

55.28

Worsening
cost of sales ratio
-7.25

0.11

FX impact
0.04

R&D expense
increase
-0.75

51.79

16.3
12.9

2018

(¥ billion)

41.2

51.7 (¥ billion)

20.9
18.3

2017

n Reasons for Changes in Operating Profit(¥ billion)

EMEA
4.40

249.8

2016

n Reasons for Changes in Net Sales (by Destination)

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

Operating profit
Operating margin

Sysmex’s previous mid-term management plan, which wasscheduled to end in fiscal 2021, targeted net sales of ¥380.0
billion and an operating profit of ¥78.0 billion. In fiscal 2020,
the Group targeted net sales of ¥310.0 billion and an operating
profit of ¥48.5 billion.
In fiscal 2020, net sales rose year on year, albeit remaining below our targets. Operating profit was down, due to a
decline in the number of tests amid the COVID-19 pandemic,
but met our targets.
In fiscal 2021, we expect COVID-19 to have less of an
impact on performance than in the previous fiscal year, and we
expect sales to essentially recover. Also, we are further enhancing our product portfolio and reinforcing our sales and service
structure. As a result, we anticipate year-on-year increases insales and profit. Specifically, we forecast net sales of ¥350.0
billion, an operating profit of ¥60.0 billion, profit before tax of¥57.0 billion, and profit attributable to owners of the parentof ¥40.0 billion. This forecast assumes that the effects of the
COVID-19 pandemic will abate and that economic activity will
gradually resume. Our calculations assume full year exchange
rates of ¥106 per U.S. dollar, ¥125 per euro and ¥16 per yuan.
Our forecast is based on currently available information; actual
results may differ for a variety of reasons.

OUR PERFORMANCE AND
COMPANY INFORMATION

281.9

n Exchange Rates

The tests that Sysmex provides have a major role in the diagnosis and treatment of COVID-19. Demand was particularlyhigh in each region for hemostasis testing, which is used tomonitor indicators of increasingly severe COVID-19 infections.
Accordingly, sales of instruments and reagents both rose inthis field.
However, since the COVID-19 pandemic broke out at theend of 2019, testing other than for COVID-19 decreased as
patients put off hospital visits. This ongoing impact on testing
numbers led to lower reagent sales, chiefly in the hematology
and urinalysis fields. As governments eased restrictions on
movement, testing numbers began to recover, with the exception of some emerging markets.
Looking forward, as the effects of COVID-19 linger, mainlyin emerging markets, we believe a market recovery will taketime. We will need to continue monitoring the situation, but
as economic activity restarts in individual regions we believe
overall testing demand will recover. We also anticipate a growing need to expand medical systems to further curtail infections over the medium to long term.

OUR PLATFORM

n Net Sales

For details on the operating environment, please see the Message
from the CEO on page 12

Operating Results versus Forecasts andthe Outlook for Fiscal 2021

OUR BUSINESS & STRATEGY

Despite lower reagent sales due to COVID-19, net sales wereup in fiscal 2020 thanks to higher instrument sales, chiefly in
EMEA, China, and Japan. Except for hematology, which wasaffected substantially by COVID-19, sales were up in all fields.
As a result, net sales rose ¥3.0 billion (up 1.0%) year on year,to ¥305.0 billion. Foreign exchange rates reduced net sales by¥0.76 billion compared with the previous fiscal year.
Reagents have a lower cost of sales ratio than instruments.
Accordingly, the cost of sales for the year increased as sales ofreagents declined as a percentage of the total, while sales of
products with a high cost of sales ratio increased. Cost of sales
grew ¥8.5 billion (up 6.0%), to ¥150.7 billion. The cost of sales
ratio was 49.4% (up 2.3 percentage points) year on year.
Selling, general and administrative (SG&A) expenses decreased ¥2.7 billion (down 3.2%) year on year, to ¥80.8 billion,
the COVID-19 pandemic prompting restrictions on movement,
thus hampering sales and marketing activities. SG&A expenses
as a percentage of net sales were 26.5% (down 1.2 percentage
points year on year).
R&D expenses increased by ¥0.7 billion (up 3.5%) year on
year, to ¥22.5 billion, as the Group developed new products toenhance its product portfolio and promoted R&D centered on
COVID-19-related testing. R&D expenses as a percentage ofnet sales came to 7.4% (up 0.2 percentage point year on year).

Impact of the COVID-19 Pandemic

OUR VALUE

Although net sales were up and SG&A expenses decreased, operating profit fell ¥3.4 billion (down 6.3%) year on
year, to ¥51.7 billion, due to the deterioration of the cost of
sales ratio and higher R&D expenses. The operating margin
was 17.0% (down 1.3 percentage points year on year). Exchange
rates had a ¥0.04 billion positive impact on operating profit
compared with the preceding fiscal year.
Profit before tax declined ¥1.4 billion (down 2.8%) year
on year, to ¥48.0 billion. This decrease was the result of lower
operating profit, although the foreign exchange loss was downby ¥2.7 billion year on year.
Profit attributable to owners of the parent fell ¥1.7 billion(down 5.0%) year on year, to ¥33.1 billion, due to a year-onyear rise in income tax expenses of ¥0.3 billion (up 2.1%) to¥14.9 billion.

2018

2019

11.3 (%)

2020

(FY)

-¥3.49 billion+¥3.09 billion

Fiscal 2019

Fiscal 2020

Fiscal 2019

Fiscal 2020

Sysmex Report 2021

70

INTRODUCTION(Fiscal 2020)

Overview of Operating Performance by Destination

Americasn Sales
60.1

66.3

70.5

71.0

65.8 (¥ billion)

2016

2017

2018

2019

EMEA

64.6

73.9

75.6

77.2

Hematology
87.8%

82.1 (¥ billion)

LS
8.0%
FCM
0.8%
Urinalysis
5.0%
Hemostasis
10.7%

2016

2017

2018

2019

78.2

80.0

83.8 (¥ billion)

Clinical chemistry
1.0%
Immunochemistry
11.4%

2016

2017

2018

2019

Asia Pacificn Sales
24.5

25.0

26.9

21.2

2017

2018

2020
(FY)

82.1

2019

2020
(FY)

43.4

45.0

44.0

46.7

48.7 (¥ billion)

Sales byBusiness

Hemostasis
35.2%

Hematology
39.5%

LS
0.2%

Others3.6%Southeast
Asia
41.4%

Taiwan, South Korea,
Mongolia
34.7%

Sales byArea

Sales byBusiness

28.6

83.8

37.3
19.2
9.7
39.7

24.4

2013

Japanese GAAP

2014

2015

2016

2017

2018
IFRS

2019

2020
(FY)

2016

2017

2018

2019

Hematology
66.9%

LS
9.3%

Clinicalchemistry
2.3%

48.7
2012

Hemostasis
14.9%

Oceania
8.3%South Asia
15.6%

Others
12.9%

FCM
0.2%

134.7

Sysmex Report 2021

LS
0.3%

FCM
0.7%
Clinical chemistry
3.4%
24.4 (¥ billion)
Immunochemistry
2.7%

Japan
n Sales

200

71

FCM
0.2%

OUR PERFORMANCE AND
COMPANY INFORMATION

65.8

250

2011

Sales byArea

Other partsof Europe
27.7%

Urinalysis
12.4%

305.0

300

0

EasternEurope,Russia9.4%

Sales byBusiness

Five majorcountries
45.3%

Middle East, Africa
13.0%

60.3

2016

50

Others
4.6%

OUR PLATFORM

72.0

Hematology
64.8%

2020
(FY)

China
n Sales

Others10.7%¢ Americas ¢ EMEA ¢ China ¢ AP ¢ Japan

350

100

Canada4.0%

OUR BUSINESS & STRATEGYn Sales

UnitedStates
83.1%

Sales by
Area

2020
(FY)

(¥ billion)

150

Others0.3%

Others
4.0%

Central andSouth America
8.9%

Sales byBusiness

Urinalysis
7.6%

n Net Sales by Destination

LS
2.4%

OUR VALUE

Americas
In the Americas, Sysmex obtained the No. 1 position in thehematology field by leveraging outstanding customer service,
such as services and support that make use of online tools. In
fiscal 2020, instrument sales in the urinalysis and hemostasis
fields rose due to the new products we launched, but instrument and reagent sales both declined in the hematology field,
primarily because of COVID-19. As a result, sales in the region
amounted to ¥65.8 billion (down 7.2% year on year). (On a local currency basis, sales were down 4.9%.)
EMEA
In the EMEA region, Sysmex’s business covers more than
100 countries, including developed countries and emerging
markets, and we are creating sales and service and support
structures tailored to regional characteristics. We are working to accelerate the launch of new products in the urinalysis
field, as well as in our mainstay field of hematology. We arealso leveraging an alliance with Siemens Healthineers tostrengthen business in the hemostasis field. In fiscal 2020,
reagent sales were down in the hematology field, mainly owing to the impact of COVID-19. However, demand increasedin the hemostasis field, and large orders in Germany and the
Middle East pushed up instrument sales. Accordingly, sales inthis region totaled ¥82.1 billion (up 6.3% year on year). (On alocal currency basis, sales were up 3.7%.)
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 thecountry. We have created a structure to supply instruments
using a knockdown production method, applying a productsupply scheme to meet market characteristics. In fiscal 2020,
reagent sales declined, mainly in the COVID-19-affected hematology field and the urinalysis field. However, instrument
sales were up across all fields. In the hemostasis field, thiswas thanks to favorable new product sales. In hematology, we
benefited from increased demand for testing for inflammation
markers. As a result, regional sales were ¥83.8 billion (up 4.7%
year on year). (On a local currency basis, sales were up 3.6%.)
Asia Pacific
The Asia Pacific region has a large population, and the market
is expected to expand going forward. This market is diverse,with economic levels, languages and healthcare systems differing by country. Nevertheless, we are reinforcing our position
by providing solutions from a customer viewpoint and meeting local needs. In fiscal 2020, instrument sales rose as theresult of winning a tender in India and new product sales toa large commercial lab in Australia. Reagent sales were up in
the hemostasis field but down mainly in the hematology andurinalysis fields, due the impact of COVID-19 and to the effects
of dengue fever in the previous fiscal year. Consequently, sales
in the region were ¥24.4 billion (down 9.2% year on year).
Japan
Aiming to establish an undisputed No. 1 position in the IVD
market in Japan, Sysmex differentiates itself from competitors.
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 2020, instrument sales roseslightly as the result of higher sales in the hematology field toa large commercial lab and the launch of our robotic assisted
surgery system. Reagent sales were down in the urinalysis andimmunochemistry fields, owing to COVID-19. Conversely, thelaunch of COVID-19-related testing pushed up reagent sales in
the hemostasis and life science fields. As a result, sales totaled¥48.7 billion (up 4.3% year on year).

FCM
0.6%
Urinalysis
3.8%
Hemostasis
5.1%

2020
(FY)

Immunochemistry
10.8%
Urinalysis
6.1%

Sales byBusiness
Hematology
39.9%
Hemostasis
18.5%

Sysmex Report 2021

72

INTRODUCTION

Sysmex raises working capital as necessary through short-termbank loans and other means. Consolidated subsidiaries obtainbank loans as needed to secure working capital, but in October
2003, the Company introduced a cash management system(CMS) to increase efficiency by unifying financing and capitalmanagement at affiliates in Japan.
Sysmex Corporation currently holds an issuer rating of AAfrom Rating & Investment Information, Inc. (R&I), with the rating
updated based on an annual review. To maintain and increase
our rating going forward, we will take the balance between
sales, profit, assets, liabilities, and capital into consideration.
For long-term capital requirements such as capital investment, the Company decides the funding method after considering the investment recovery period and risk. In the fiscal year
ended March 31, 2020, the Company mainly funded its capital
expenditure and R&D activities out of cash generated throughoperating activities.

As of the end of fiscal 2020, total assets amounted to ¥427.4
billion, up ¥38.1 billion from one year earlier. As principal factors, trade and other receivables rose ¥14.9 billion, cash andcash equivalents increased ¥9.8 billion, and intangible assets
rose ¥7.2 billion.
Meanwhile, total liabilities were up ¥7.8 billion from theprevious fiscal year-end, to ¥118.8 billion. This rise was chiefly
due to rises of ¥1.9 billion in other non-current liabilities, ¥1.7
billion in accrued expenses, ¥0.9 billion in other short-term
financial liabilities, and ¥0.9 billion in accrued bonuses.
Total equity came to ¥308.6 billion, up ¥30.3 billion fromthe end of fiscal 2019. Among the principal reasons, retained
earnings rose ¥18.1 billion, and other components of equity
increased ¥10.6 billion. Equity attributable to owners of theparent to total assets rose 0.7 percentage point, from 71.3% to72.0%.

At the end of fiscal 2020, cash and cash equivalents amounted
to ¥66.4 billion, up ¥9.8 billion from one year earlier.
Cash Flows from Operating Activities
Net cash provided by operating activities was ¥58.8 billion, up¥5.6 billion from the preceding fiscal year. As principal factors,
an increase in depreciation and amortization and a decrease ininventories, despite a decrease in income before income taxes
and an increase in trade receivables.
Cash Flows from Investing Activities
Net cash used in investing activities was ¥31.1 billion (up¥5.2 billion). Among major factors, purchase of property,
plant and equipment decreased, but purchase of intangible
assets increased.
Cash Flows from Financing Activities
Net cash used in financing activities was ¥20.2 billion (down¥0.3 billion). As main factors, the exercise of warrants provided¥0.5 billion (up ¥0.2 billion). Dividends paid used ¥15.0 billion(the same level as in the previous fiscal year).

Sysmex aims to maintain an appropriate balance between
shareholder returns as profitability increases, internal reserves
to invest in research and development, and capital expenditures to maintain high rates of stable growth. In terms of
returns to shareholders, we intend to provide a stable dividend
on a continuous basis and aim for a consolidated payout ratioof 30% under our basic policy of sharing the successes of ouroperations in line with business performance.
As a basic policy, Sysmex pays twice-yearly dividends
from retained earnings, an interim dividend and a year-end
dividend. The year-end dividend is decided upon approval of
the annual shareholders’ meeting, and the interim dividend
upon approval by the members of the Managing Board. In
accordance with this policy and considering business performance during fiscal 2020, we announced dividends for theyear of ¥72 per share, which includes an interim dividend of¥36. As a result, the dividend payout ratio came to 45.4%.
Owing to a decline in profit due to the impact of COVID-19,
we did not raise dividends in fiscal 2020. However, in fiscal
2021 we propose to raise dividends by ¥2 per share from thefiscal 2020 level, to ¥74.
Going forward, Sysmex will continue to effectively invest
its internal reserves in the implementation of highly competitive
product development and global business strategies, aiming to
respond to anticipated changes in the business environment.

n Cash Flowsn Cash Dividends Applicable to the Year / Dividend Payout Ratio (Consolidated)n Total Assets
Total Equity
Total assets
Total equity

Net cash provided
by operating activities

427.4 (¥ billion)
389.2

Net cash used
in investing activities

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

Net cash usedin financing activities

58.8
52.2

53.1

66

44.7

58
52

321.9

(FY)
2017
2018
2019
2020

308.6 (¥ billion)
265.1

278.3

241.4

38

210.2

27

-11.5
-14.0
-20.5
-25.9
2016

73

Sysmex Report 2021

74 (Yen)

72

72

70

346.7
279.8

OUR PERFORMANCE AND
COMPANY INFORMATION

Returns to Shareholders

OUR PLATFORM

Cash FlowsOUR BUSINESS & STRATEGY

Assets, Liabilities, and Equity

OUR VALUE

Fund Procurement and Liquidity Management

2017

2018

2019

2020
(FY)

-37.8
-40.1

-31.1

3.125

-20.2 (¥ billion)

3.75

18.9 22.6
2002

2003

9

6.5

5
17.8
2004

17.9
2005

12.5

12
20.0

2006

26.8

2007

31.9

2008

17

15

14
29.4
2009

20

27.0

2010

29.1
2011

29.1
2012

27.1
2013

29.6
2014

27.5
2015

29.7
2016

35.1

2017

35.4

2018

43.1

2019

45.4
(%)

2020

2021
(Forecast)(FY)

Note: Two-for-one stock splits conducted on November 11, 2005, April 1, 2011 and April 1, 2014.

Sysmex Report 2021

74

Consolidated Financial Data (10 Years)

Fiscal years

2011

2012

2013

2014

(¥ billion)

IFRS

2015

Fiscal years

For the year:(¥ billion)

2015

2016

2017

2018

2020

2019

For the year:
134.7

145.5

184.5

221.3

253.1

Net sales

252.6

249.8

281.9

293.5

301.9

305.0

Operating income

19.2

21.8

32.8

44.4

56.9

Operating profit

60.7

51.7

59.0

61.2

55.2

51.7

Net income1

12.0

14.1

20.5

26.6

36.2

Profit attributable to owners of the parent

39.2

40.6

39.2

41.2

34.8

33.1

Capital expenditure5

9.6

11.1

17.1

17.3

19.9

Capital expenditure5

21.4

19.3

24.9

30.2

27.1

25.7

Depreciation

7.0

7.9

9.9

11.2

12.2

Depreciation and amortization

12.1

12.3

14.6

15.8

23.9

25.5

R&D expenses

11.9

12.1

13.2

14.6

17.7

R&D expenses

15.4

15.5

16.7

19.5

21.7

Net cash provided by (used in) operating activities

17.0

25.8

36.5

38.6

39.5

Net cash provided by (used in) operating activities

41.7

32.8

52.2

44.7

53.1

Net cash provided by (used in) investing activities(10.3)(12.5)(33.9)(19.5)(21.6)Net cash provided by (used in) investing activities(23.8)(19.4)(37.8)(40.1)(25.9)Net cash provided by (used in) financing activities

(3.8)

(3.1)

(2.8)

(7.5)

(8.7)

Net cash provided by (used in) financing activities(8.7)(10.8)(11.5)(14.0)(20.5)

22.5
58.8

7

(31.1)
7(20.2)OUR BUSINESS & STRATEGYAt year-end:

Total assets

142.2

173.0

210.7

247.9

267.6

Total assets

263.9

279.8

321.9

346.7

389.27

427.4

Cash and cash equivalents, end of year

21.8

34.3

36.5

50.2

56.4

Cash and cash equivalents, end of year

56.4

57.9

61.4

51.0

56.5

66.4

Total equity

102.5

119.1

146.2

169.5

188.0

Total equity

182.8

210.2

241.4

265.1

278.3

1.0

0.7

1.9

0.7

1.3

1.3

1.1

0.9

0.8

23.1

Equity (yen)990.5

1,151.3

Net income (basic) (yen)116.8

Net income (diluted) (yen)Interest-bearing liabilities
Per share data:

Interest-bearing liabilities

308.6
7

22.5

Per share data:
812.3

899.5

Equity attributable to owners of the parent (yen)879.32

1,005.86

1,154.57

1,267.07

1,329.78

1,473.22

137.5

99.4

3

128.4

174.4

Profit attributable to owners of the parent (basic) (yen)189.08195.31

188.29197.60167.10158.65

116.6

137.0

99.1

3

128.0

173.7

Profit attributable to owners of the parent (diluted) (yen)188.30194.74187.84

197.29166.93158.39Cash dividends applicable to the year (yen)

17.00

20.00

27.00

3

38.00

52.00

Cash dividends applicable to the year (yen)

52.00

58.00

66.00

70.00

72.00

72.00

Dividend payout ratio (%)

29.1

29.1

27.1

29.6

29.8

Dividend payout ratio (%)

27.5

29.7

35.1

35.4

43.1

45.4

2

Other data:

Operating margin (%)

14.3

15.0

17.8

20.1

22.5

Operating margin (%)

24.0

20.7

21.0

20.9

18.3

17.0

Overseas sales ratio (%)

70.5

72.4

78.2

81.7

84.3

Overseas sales ratio (%)

84.2

82.6

84.0

85.0

84.5

84.0

Equity ratio (%)

71.6

68.7

69.2

68.0

69.9

Equity ratio (%)

69.3

74.8

74.8

76.3

71.3

72.0

Return on equity (ROE) (%)

12.3

12.8

15.6

17.0

20.4

Return on equity (ROE) (%)

23.1

20.7

17.4

16.3

12.9

11.3

Return on assets (ROA) (%)

8.8

9.0

10.7

11.6

14.1

Return on assets (ROA) (%)

15.7

14.9

13.0

12.3

9.5

8.1

5,147

5,594

6,211

6,742

7,446

7,446

7,930

8,445

8,715

9,231

9,510

4

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

Exchange rates:

6

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

OUR PERFORMANCE AND
COMPANY INFORMATIONOther data:

OUR PLATFORM

703.7

3

Exchange rates:

US dollars (yen)

79.1

83.1

100.2

109.9

120.1

US dollars (yen)

120.1

108.4

110.9

110.9

108.7

106.1

Euros (yen)

109.0

107.2

134.4

138.8

132.6

Euros (yen)

132.6

118.8

129.7

128.4

120.8

123.7

Chinese Yuan (yen)

12.4

13.2

16.3

17.8

18.9

Chinese Yuan (yen)

18.9

16.1

16.8

16.5

15.6

15.7

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

Sysmex Report 2021

OUR VALUE

Net sales

At year-end:

75

INTRODUCTION

Japanese GAAP

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)

Sysmex Report 2021

76

Consolidated Statement of Income

Sysmex Corporation and Its Subsidiaries
As of March 31, 2021

Sysmex Corporation and Its Subsidiaries
For the Year Ended March 31, 2021

Millions of Yen
2021

2020

¥ 56,592
85,65048,303421
546
14,191
205,704$ 598,802
906,676
423,2889,955
8,189
132,6402,079,577

96,14012,433
46,8401,093
15,202
7,945
923
9,337
6,724
196,641¥427,475

96,83911,271
39,543
2,945
12,845
6,192
897
5,810
7,240
183,586¥389,291

866,126
112,009421,982
9,847
136,955
71,577
8,315
84,11760,577
1,771,541$3,851,126$ 307,739
52,09913,77559,126
9,027
109,622
128,171
76,64953,730809,973

16,178
108
1,071
265
4,060
7,212
28,898118,806

16,935
269
925
255
2,061
6,351
26,798110,944

145,748
973
9,649
2,387
36,57764,973
260,3421,070,324

13,22919,581
279,477(307)(4,082)
307,898771
308,669¥427,475

12,87718,487
261,321(306)(14,697)
277,683663
278,347¥389,291

119,180
176,405
2,517,811(2,766)(36,775)
2,773,856
6,946
2,780,802$3,851,126

Note: The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been madeat the rate of ¥111 to $1, the approximate rate of exchange at March 31, 2021.

77

Sysmex Report 2021

¥301,980
142,173
159,807
83,545
21,761
1,486
702
55,284595
1,031(2,398)(3,017)49,433
14,619¥ 34,813$2,748,405
1,358,288
1,390,108
728,279
202,856
14,748
7,117
466,595
3,784
7,802(27,775)(2,072)432,730
134,505$ 298,225

Profit attributable to
Owners of the parent
Non-controlling interests
Profit¥ 33,142(39)¥ 33,103¥ 34,883(69)¥ 34,813$ 298,577(351)$ 298,225

Yen

Earnings per share
Basic
Diluted¥158.65
158.39U.S. Dollars

$1.43
1.43

¥167.10166.93

Note: T he translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been madeat the rate of ¥111 to $1, the approximate rate of exchange at March 31, 2021.

Consolidated Statement of Comprehensive Income
OUR PERFORMANCE AND
COMPANY INFORMATION¥ 33,917
5,701
552
5,673
751
12,001
12,5087,591
5,448
84,145¥305,073
150,770
154,30280,83922,5171,637
790
51,792420
866(3,083)(230)
48,033
14,930¥ 33,103

OUR PLATFORM¥ 34,159
5,783
1,529
6,563
1,002
12,16814,227
8,508
5,964
89,9072020

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Research and development expenses
Other operating income
Other operating expenses
Operating profit
Financial income
Financial expenses
Share of loss on equity method
Foreign exchange loss
Profit before tax
Income tax expenses
ProfitOUR BUSINESS & STRATEGY¥ 66,467
100,641
46,985
1,105
909
14,723230,833

2021

Thousands of
U.S. Dollars
2021

Millions of Yen

OUR VALUE

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

Thousands of
U.S. Dollars
2021

INTRODUCTION

Consolidated Statement of Financial Position

Sysmex Corporation and Its Subsidiaries
For the Year Ended March 31, 2021

2021

2020

Thousands of
U.S. Dollars
2021¥33,103¥34,813$298,225

608

(588)

5,477

11
620

21
(567)

99
5,586

10,070(6,882)90,721Millions 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 (loss) of investments
accounted for using the equity method
Total
Total other comprehensive (loss) income
Comprehensive income
Comprehensive income attributable to
Owners of the parent
Non-controlling interests
Comprehensive income

(25)

(0)

(225)

10,045
10,665¥43,768(6,883)(7,450)¥27,363

90,49596,081$394,306¥43,807(39)¥43,768¥27,433(69)¥27,363$394,658(351)$394,306

Note: T he translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been madeat the rate of ¥111 to $1, the approximate rate of exchange at March 31, 2021.

Sysmex Report 2021

78

Consolidated Statement of Cash Flows

Sysmex Corporation and Its Subsidiaries
For the Year Ended March 31, 2021

Sysmex Corporation and Its Subsidiaries
For the Year Ended March 31, 2020

Capital stock¥(7,225) ¥264,448—
34,883(7,450)(7,450)(7,450)27,433
—
348
—
485
—
(15,028)
—
(3)
—
—
(21)
—

Total
equity¥241,445
34,883—34,883——(15,028)——21¥(302)
—
—
—
—
—
—
(3)
—
—

¥733 ¥265,182(69)
34,8130(7,450)(69)
27,363
—
348
—
485
—
(15,028)
—
(3)
—
—
—
—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

¥ 49,433$ 432,730

Depreciation and amortization

25,57523,955

230,405

Interest and dividend income

(277)

(343)

(2,495)610(15,006)

(3)

(21)

(14,198)—(14,198)

12,877
—
—
—
352
—
—
—
—
—

18,487
—
—
—
197
896
—
—
0
—

261,32133,142—33,142——(15,037)
—
—
50

(306)
—
—
—
—
—
—
(1)
0
—

(14,697)—
10,665
10,665
—
—
—
—
—
(50)

277,683
33,142
10,66543,807549
896(15,037)
(1)
0
—

663
(39)
(0)
(39)
—
—
—
—
—
—

278,347
33,103
10,66543,768549
896(15,037)
(1)
0
—

—

—

—

—

—

—

49

49

—

—

—

—

—

—

98

98

767

911

6,910

Share of loss on equity method

3,083

2,398

27,775(Increase) in trade receivables(9,066)(4,423)(81,676)

Decrease (increase) in inventories

3,851(9,807)

34,694

Increase (decrease) in trade payables

(834)

2,762

(7,514)

Increase in accrued expenses

1,055

2,212

9,505

Decrease/increase in consumption taxes receivable/payable(56)(1,134)(505)

Decrease (increase) in asset for retirement benefits

(9)

50

(81)

Increase (decrease) in contract liabilities

(314)

3,292

(2,829)

Increase in accrued bonuses

625

102

5,631

Interest expenses

Other – net
Subtotal

1,093(14,987)(1)¥13,229¥19,581¥279,477¥(307)$116,009
—
—
—
3,171
—
—
—
—
—

(50)

(13,593)

147(13,446)¥(4,082) ¥307,898¥771¥308,669

Thousands of U.S. Dollars
Equity attributable to owners of the parent
Other
CapitalRetained
Treasurycomponents
surplusearnings
stockof equity$166,550 $2,354,243—
298,577———
298,577
1,775
—
8,072
—
— (135,468)
—
—
0
—
—
450

Total

$(2,757) $(132,405) $2,501,649——
298,577—
96,081
96,081—
96,081
394,658
—
—
4,946
—
—
8,072
—
— (135,468)
(9)
—
(9)
0
—
0
—
(450)
—

Total
equity$5,973 $2,507,631(351) 298,225(0)
96,081(351) 394,306
—
4,946
—
8,072
— (135,468)
—
(9)
—
0
—
—

—

—

—

—

—

—

441

441

—

—

—

—

—

—

883

883

3,171

9,847

(135,018)

(9)

(450)

(122,459)

1,324(121,135)$119,180$176,405 $2,517,811$(2,766) $ (36,775) $2,773,856$6,946 $2,780,802

613
653,162Interest and dividend received

232

280

2,090

(748)

(804)

(6,739)

Income taxes paid

(13,172)(16,208)(118,667)

Net cash provided by operating activities

58,81353,182529,847(9,930)(13,629)(89,459)

Investing activities
439

325

3,955

Purchase of intangible assets(15,863)(12,843)(142,910)

Increase in long-term prepaid expenses(4,050)(2,487)(36,486)(623)(4,554)(5,613)

Proceeds from sales of property, plant and equipment

Purchase of investments in equity instruments

(343)

—

(3,090)

Payments into time deposits(2,058)(231)(18,541)

Refund of time deposits

1,438

7,327

12,955

Other – net

(139)

185

(1,252)(31,131)(25,906)(280,459)

Acquisitions of subsidiaries or other businesses
Noncontrollinginterests

505
69,914

Interest paid

Purchase of property, plant and equipment

352

68
72,501

Net cash used in investing activities

OUR PERFORMANCE AND
COMPANY INFORMATION

Sysmex Report 2021

¥ 48,033

Profit before tax

OUR PLATFORM

223

Note: The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been madeat the rate of ¥111 to $1, the approximate rate of exchange at March 31, 2021.

79

2020

Operating activities¥17,876
—
—
—
125
485
—
—
—
—

Capital stock

As of March 31, 2020
ProfitOther comprehensive income (loss)
Comprehensive income (loss)
Exercise of warrants
Stock-based compensation
Cash dividends
Purchase of treasury stock
Disposal of treasury stock
Transfer to retained earnings
Establishment of subsidiarywith non-controlling interests
Change in non-controllinginterests due to capitalincrease of subsidiary
Total transactions withthe owners
As of March 31, 2021

Noncontrollinginterests

Total

OUR BUSINESS & STRATEGY¥12,654
—
—
—
223
—
—
—
—
—

2021

Thousands of
U.S. Dollars
2021

Millions of Yen

OUR VALUE

As of April 1, 2019
ProfitOther comprehensive income (loss)
Comprehensive income (loss)
Exercise of warrants
Stock-based compensation
Cash dividends
Purchase of treasury stock
Disposal of treasury stock
Transfer to retained earnings
Establishment of subsidiarywith non-controlling interests
Change in non-controllinginterests due to capitalincrease of subsidiary
Total transactions withthe owners
As of March 31, 2020
ProfitOther comprehensive income (loss)
Comprehensive income (loss)
Exercise of warrants
Stock-based compensation
Cash dividends
Purchase of treasury stock
Disposal of treasury stock
Transfer to retained earnings
Establishment of subsidiarywith non-controlling interests
Change in non-controllinginterests due to capitalincrease of subsidiary
Total transactions withthe owners
As of March 31, 2021

Millions of Yen
Equity attributable to owners of the parent
Other
CapitalRetained
Treasurycomponents
surplusearnings
stockof equity

INTRODUCTION

Consolidated Statement of Changes in Equity

Financing activities
549

348

4,946

Dividends paid

(15,037)(15,028)(135,468)

Repayment of lease liabilities(5,911)(5,913)(53,252)

145

(3)

1,306

Net cash used in financing activities
Foreign currency translation adjustments on cash and cash
equivalents
Net (decrease) increase in cash and cash equivalents(20,253)(20,597)(182,459)

2,447(1,147)22,045

9,875

5,530

88,964

Cash and cash equivalents, beginning of year

56,59251,062509,838¥ 66,467¥ 56,592$ 598,802

Exercise of warrants

Other – net

Cash and cash equivalents, end of year

Note: T he translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been madeat the rate of ¥111 to $1, the approximate rate of exchange at March 31, 2021.

Sysmex Report 2021

80

Non-Financial Targets and Results
INTRODUCTION>>Main Sustainability Targets under the New Mid-Term Management Plan P42 >>Sustainability Data Book P4
Materiality

KPI

TargetFiscal 2021
(previous mid-term Fiscal 2025
management plan)

Hematology market share

Number of new patents
Number of scientificpapers

Improvement inaccessibility to
medical services by Percentage of sales inemerging marketsmeans such as
familiarizing
products
Securing of productquality and safety
Appropriate disclosure of information
regarding products CSR survey response rateand services
Assessment andmanagement of the
supply chain
Engagement score

Realization of
an Attractive
Workplace

Lost-time injuries
frequency rate1
Lost workday rate1

Corporate
governanceCompliance
Risk management

*3

2,709

2,987

3,143

the full-scale provision of cancer gene panel testing, as well as developing and3,485 beganproviding tests related to COVID-19.

*3

301

346

306

287 tific papers published.

*3

155

166

176

332 >>Sustainability Data Book > Resolution of Medical Issues through Innovation P8

ship model in fiscal 2020. In addition, to help resolve medical issues, in fiscal 2020 we

*3

39.2%

*3

39.5%

75%

39.7%

81%

84%

85%

Sysmex interviews the management of its business partners in Japan and overseas andsurveys their CSR activities. In addition to conducting a CSR survey of primary suppliers,
we are reinforcing supply chain management by checking with 13 primary suppliers identified as high risk, regarding how they manage their secondary suppliers. Furthermore,
89% to maintain and enhance the high quality of our products and services, we have established and maintain a system to ensure compliance with laws, regulations, and standards
around the world.
>>Sustainability Data Book >Strengthening of Supply Chain Management P21

72%

—

—

66% Every two years, Sysmex conducts a Corporate Culture Survey aimed at enhancing em(except ployee satisfaction. This survey was not conducted in fiscal 2019, as we wished to checkstatus of our organization following the launch of the new HR system we introduced
EMEA) thein April 2020 and the development of measures in line with its implementation. In the

3.2%

3.8%

3.1%

2.4% survey. This was partly because the survey has not yet been implemented in some areas

0.86

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

Less than
0.05

0.05

0.06

0.08

16.0%

15.2%

15.2%

15.5%

Average hours of training per employee
provided by the Company(include online training hours)

25.0 hours

24.9 hours

28.9 hours

27.7 hours

Reduction of CO2
emissions (instruments)2

Percentage reduction in CO2 emissions per
instrument

Cut 10%

Cut 15%

Cut 12%

Cut 10%Cut 2%

Reduction of water
consumption(instruments)2

Percentage reduction in water volume per
instrument

Cut 10%

Cut 15%

Cut 8%Cut 2%

Cut 4%

Reduction of CO2
emissions (shipping)

Percentage reduction in CO2 emissions
during shipping and distribution per unit ofparent-only sales

Cut 10%

Cut 15%

Cut 17%

Cut 1%

Cut 17%

Reduction of CO2
Emissions(business activities)2

Percentage reduction in CO2 emissions
during business activities per unit ofconsolidated sales

Cut 10%Cut 50%

Cut 14%

Cut 17%

Cut 13%

Reduction of water
consumption(business activities)

Percentage reduction in water use duringbusiness activities per unit of consolidated sales

Cut 10%

Cut 15%

Cut 8%Cut 7%Cut 6%

Recycle rate

Recycling volume divided by total waste volume

88% orhigher

93% orhigher

89%

76%

67%

32

14

11

—

9

7

Number of internal reporting Number of internal reports of incidents
In the event of violations of law or the
Number of unethicalGlobal Compliance Code, number of incidents
incidents
involving disciplinary action

*3
*3

—

>>Working with Medical Institutions to Resolve Social Issues P21 >>Initiatives Targeting COVID-19 P27

Sales in China and other emerging markets are growing; over the past 10 years, our sales
in emerging markets have increased by approximately ¥90.0 billion. In addition, we areworking with the WHO, JICA and other international institutions to help enhance the
40.0% quality of healthcare.
>>Working with Medical Institutions to Resolve Social Issues P21>>Sustainability Data Book > Improvement in Accessibility to Healthcare P10

0.89

*3

We recorded steady progress in the number of new patents and the number of scien-

EMEA region, which typically scores highly, the level was down by 6% from the previous

due to COVID-19. Our turnover ratio remains low in comparison with the manufacturingindustry average of around 9%,4 indicating a high retention rate. To reduce the lost-time
0.67 injury frequency rate, we are adopting such measures as stepping up danger and prediction training and bringing in outside instructors to conduct education and training. In
fiscal 2020, the rate was 0.67, due to such factors as factory closures due to injuries.
0.06 >>Sustainability Data Book >Provision of a Comfortable Working Environment P26,
Health Enhancement and Occupational Safety P33

The figure rose 0.7 percentage point year on year, due to efforts by Group companies topromote diverse working styles, advocate management styles and provide opportunities
16.2% for employees to think about their careers.
>>Sustainability Data Book > Promotion of Diversity and Inclusion P28
To expand our job-based personnel system, in fiscal 2020 we enhanced online training
to strengthen individual skills and competencies. This is one of the ways in which we
34.0 hours augment employee career development and encourage autonomous learning. During theyear, average training time per employee amounted to 34.0 hours.
>>Diverse Human Resources P53 >>Sustainability Data Book > Development of Human Resources P30
The number of large instruments, which use a substantial amount of electricity, inCut 8% creased, but the CO2 emission factor fell by 8%. Water consumption decreased by 6% as
the result of higher sales of products that use relatively little reagent. Going forward, we
will continue working to reduce electricity and water use in the development and sale ofCut 6% new products.
>>Sustainability Data Book > Environmental Consideration through the Product Lifecycle P43
A shift from air to ship transport lowered this figure by 25%, outpacing our target of a
15% reduction by fiscal 2025. To reduce the environmental burden further, we will proCut 25% mote a modal shift toward rail transport, among other efforts.
>>Sustainability Data Book > Environmental Consideration through the Product Lifecycle P43, 45
Energy consumption rose due to the operation of the bio-diagnostic reagent baseopened in April 2019. However, we substantially curtailed this increase by introducing
high-efficiency electrical and air conditioning systems. We are also promoting initiatives
Cut 35% to lower CO2 emissions in individual regions, such as shifting toward the use of renewable energy in the United States.
>>Sustainability Data Book > Reduction in Environmental Burden through Activities at Business Offices P47
Water consumption at business offices has declined due to the introduction of remote
working, among other factors. Going forward, we will endeavor to continue reducing
Cut 7% water consumption through increased efficiency.
>>Sustainability Data Book > Reduction in Environmental Burden through Activities at Business Offices P47, 48
We improved our recycling rate, partly by reviewing waste recycling categories in the
78% United States. We will continue to move forward with initiatives in individual regions.
>>Sustainability Data Book > Reduction in Environmental Burden through Activities at Business Offices P47, 49
12 We promoted early-stage detection by setting up consultation and reporting lines capable of responding in individual countries’ languages. We conducted inquiries for consulta5 tions and dealt with each of them appropriately.
>>Sustainability Data Book > Respect for Human Rights P56

OUR PERFORMANCE AND
COMPANY INFORMATION

Reduction inenvironmental
burden throughactivities atbusiness offices

56.3% each region, pushing up our share of the hematology market. We launched a new flag-

0.35

Training time per
Employee1(Base Year: Fiscal
2016)

54.7%

Less than
0.35

Development of
human resources

Environmental
Consideration

53.8%

Turnover percentage of regular employees,
excluding people who have reached the mandatory retirement age
Number of employee deaths or injuries resulting from work-related accidents per million
hours actually worked

Percentage of women at director level or above

Reagent sales increased in line with the expansion of the installed instrument base in

52.7%

Corporate culture survey results

Female managers ratio

Progress*3—

Promotion ofdiversity

Environmental
consideration
through the
product lifecycle

Enhanced
GovernanceTurnover ratio1

Percentage of primary raw materials suppliers
that responded to CSR surveys(excluding direct suppliers of overseas affiliates)

Fiscal 2020

Fiscal 2019

OUR PLATFORM

Provision of acomfortableworkingenvironment

Sales in emerging markets as a percentage ofconsolidated sales

Fiscal 2018

OUR BUSINESS & STRATEGY

Responsible
Provision of
Products andServices

Number of patents

Fiscal 2017

OUR VALUE

Resolutionof Medical
Issues throughProducts andServices

Resolution of
medical issues
through businessactivities

Within the hematology field, consolidated sales
as a percentage of the market for instruments,
reagents and services
Total number of patents, utility model rights,
and design rights held
Total number of applications filed for patents,
utility model rights and design rights
Number of scientific papers presented by usersof the Company’s products(Eco-Vision)

Results

1 Target: Sysmex Corporation on a non-consolidated basis 2 Some figures have been revised from those previously disclosed 3 Set as a monitoring index; no target value has been set
4 Source: “Overview of Results of Fiscal 2018 Survey on Employment Trends”>>Materiality P10

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Stakeholder Engagement
INTRODUCTION

Through proactive dialogue with stakeholders, we strive to forge better relations. In addition, by incorporating their expectations and requirements into our business activities we will enhance the effectiveness of ourstrategy and strive to realize a sustainable society.

n Stakeholder Engagement

Shareholders and Investors

Stakeholders

Forge trust-based
relationships

Sysmex recognizes that IR activities are important to achieving sustainable growth and medium- tolong-term increases in corporate value. We strive to disclose information proactively and quickly
share internally the evaluations and requests that we receive in the course of dialogue withshareholders and investors, and to reflect this information in our management and IR activities.
In fiscal 2020, IR activities were limited due to COVID-19, but we used online tools to maintain thesame level of dialogue as in the past.

Sysmex

Improvements

OUR VALUE

Expectations andrequirements

Meetings with institutional
investors and analysts

Approx. 500 per year

n Main Dialogue Achievements (Fiscal 2020)

Customers
We engage in ongoing communication through sales and service and support activities, with the aimof instilling confidence in our customers and providing added value that exceeds their expectations.
As a result, we earn high marks in customer satisfaction surveys.

Customer center contacts(non-consolidated basis)

Approx. 80,885 per year
Number of VOC contacts(non-consolidated basis)

Approx. 18,000 per yearn Objectives of Sysmex’s IR Activities
Obtainevaluations andrequests from
capital markets

Enhance corporate
value throughDisseminate
Responddialoguehigh-quality
promptly
information inin managementa timelyand IR activities
mannerOUR PLATFORM

 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 andquality improvements
 Convened user meetings to communicate accurate product knowledge
 Held online scientific seminars

Customer Support Center 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• IR meetings: Management visited* the Americas, Europe and Tokyo and engaged in dialogues
related to our long-term management goals, mid-term management plan, business model,
R&D, shareholder returns, ESG, and other topics.
* Conducted online in fiscal 2020, due to COVID-19• Holding of IR events: To foster a deeper understanding of our management strategy andbusiness activities, we conducted facility tours and tours of oﬃces in Japan and overseas. In
fiscal 2020, we held a product briefing on our robotic assisted surgery system. In addition,
each year we hold a technology presentation, in which people in charge of R&D divisions
provide explanations about R&D progress. (Simultaneous interpretation in English is provided
at these events.)
 Dialogues with individual shareholders• Provided information through our shareholder newsletter and website• Hold business oﬃce tours (postponed in fiscal 2020 due to COVID-19)

OUR BUSINESS & STRATEGY>>Sysmex’s Principal Stakeholders P9>>Non-Financial Targets and Results P81>>Sustainability Data Book > Communication with Stakeholders P61>>Customer Assessment P22>>Sustainability Data Book > Responsible Provision of Products and Services P14

n Recent Major Awards Received for IR Activities

Employees

 Conducted corporate culture surveys (dialogue in response to the level of employee satisfaction)
 Instilled the corporate philosophy of the Sysmex Group and introduced an internal award system Configured a global internal reporting system >>Compliance P58
 Held council meetings between labor and management

Corporate culture survey score

66%
Note: not conducted in the EMEA region due
to COVID-19>>Diverse Human Resources P53 >>Sustainability Data Book > Realization of an Attractive Workplace P24

 Communication through open innovation and alliances with R&D partners
 Conducting of CSR surveys of suppliers Holding meetings with sales distributors and visiting>>Sustainability Data Book > Strengthening of Supply Chain Management P21

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Sysmex Report 2021

WICI Japan

Nominated as one of the 10 finalists in the 7th WICI Japan Award for Excellence in Integrated Reporting (fiscal 2019)

IR Good Visual Award Steering Committee

7th IR Good Visual Award (fiscal 2019)

Society
We liaise and engage in dialogue with government agencies and international organizations with aview to the development of healthcare and the realization of a sustainable society. In addition, we
communicate with society through activities aimed at meeting the needs of communities around theworld, based on our Policy on Corporate Citizenship Activities and Philanthropy.

Business Partners (Suppliers, Distributors, and Collaborative R&D Partners)
We maintain ongoing communication to foster an understanding among business partners of
Sysmex’s business directions and policies, as well as to build trust-based relationships. We pursue
supply chain management with our suppliers in accordance with our procurement policies.

Ranked within the top three in all categories in Institutional Investor 2021 in the Japanese Medical
Technologies and Services division, including “Best CEOs,” “Best CFOs,” “Best IR Professional,” “Best IR Team,”“Best IR Program” and “Best ESG.” Accordingly, we were named a “Most Honored Company” in this sector.

CSR survey results
Response rate
(primary suppliers of raw materials)

89%

OUR PERFORMANCE AND
COMPANY INFORMATION

In its aim to achieve sustainable growth, Sysmex believes that diversity and inclusion are essential, as
are eﬀorts to create a workplace that is comfortable, appealing and conducive to work. We have set
the score on our corporate culture survey, which indicates employee satisfaction, as one of oursustainability targets, and we are undertaking initiatives to achieve this target.

Institutional Investor

 Supported activities in various regions in relation to the spread of COVID-19>>Initiatives Targeting COVID-19 P27
 Collaborated with government agencies and international organizations
 Participated in industry groups Engaged in Group corporate citizenship programs, including the Sysmex Gives Back Challenge(such as employee blood donations) and Sysmex Gives Back Day (help to eradicate cancer,
support for pediatric patients and orphans, etc.)

Employees participating in Group
corporate citizenship programsMore than 2,800 per year>>Sustainability Data Book >Corporate Citizenship Activities P36

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84

Corporate Overview

Supporting Healthcare with In Vitro Diagnostics (IVD)INTRODUCTION

About IVDIVD

The Growing Importance of IVD in Healthcare
In recent years, technological innovation and its application
to the field of healthcare have been leading to the practicalrealization of new treatment methods. For example, cancer genomic medicine—a type of personalized medicine that enables
treatment tailored to an individual patient’s constitution anddisease—is coming to the fore. Realizing this type of medicine
will require analysis based on the gene testing of cancer cells.
Sysmex is working to achieve this type of cancer genomic
medicine and to make liquid biopsy a reality. Liquid biopsy
involves testing a patient’s blood and body fluids, which places
less of a burden on the patient than a physical biopsy. As aresult, we aim to help improve patients’ quality of life and holddown healthcare expenses.

Blood vessels

Blood Testing
Red bloodcellsWhite bloodcells>>Realizing Personalized Medicine through Liquid Biopsy P87

n Where IVD is used

Prevention and early detection

Clotting factors

OUR PLATFORM¢ Hemostasis
Testing that measures the ability of blood to clot
at wound sites (coagulation) and dissolve clots(fibrinolytic)[Related diseases: hemophilia, thrombotic
disease (myocardial infarction, cerebral
infarction, etc.)]

Platelets

In everyday life

¢ Hematology
Testing that measures and analyzes the number,
type, and size of red, white and other blood cells[Related diseases: anemia, leukemia,
thrombocytopenia, etc.]

OUR BUSINESS & STRATEGY

IVD, which involves studying blood, urine, and other samples
taken from the body, is used in a variety of ways. It is used during medical checkups to help prevent disease. IVD is also usedin diagnosing diseases, determining treatment methods, measuring treatment results, preventing illness from increasingly
in severity, and for post-treatment monitoring. Healthcare
without accurate test results is like walking through mist; thepath is uncertain. IVD is essential because it allows medical
professionals to assess a patient’s state of health accurately
and swiftly, and to determine optimal treatment methods.
In Sysmex’s main businesses of hematology, urinalysis,
and immunochemistry, fundamental testing is conducted tocheck a patient’s physical condition during medical checkups
for disease prevention and early-stage detection. They arealso used for a wide range of other purposes, such as treating
disease or managing prognoses. On the other hand, in suchfields as hemostasis and gene testing, tests are performed toWhat can be determined from samples (such as blood, urine, and cancer tissue)
OUR VALUE

measure a person’s physical condition in greater detail and aremainly used in the process of diagnosing and treating illnesses.

¢ Immunochemistry
Testing for the status of viruses, hormones andproteins, and to determine causes and typesof disease[Related diseases: infectious diseases (hepatitis
B and C), thyroid disease, various cancers,
myocardial infarction, hepatitis, atopic
dermatitis, etc.]

OUR PERFORMANCE AND
COMPANY INFORMATION

Cancer and Lymph Node Testing
Proteins

Health checks, medical checkups, etc.

Note: Some tests also include blood testing

VirusesHormones

Treatment

Diagnosis

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, lung cancer,
colorectal cancer, etc.]

Urine Testing
Measurement of treatment results,
prevention of increasing severity

Prognosis management

Identification of illnesses,
determination oftreatment methods

Cancer cells

DNA¢ Urinalysis
Testing to determine the presence of sugar,
proteins or blood in the urine[Related diseases: kidney stones, kidney disease,diabetes, etc.]

Monitoring for recurrent prevention

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Sysmex’s Businesses
INTRODUCTIONn Sysmex’s Business Domains

Main Business Domains

Sysmex’s Products in UsePrevention

Examination

Diagnosis, Treatment and Monitoring

Clinical Laboratory Testing

In Vitro Diagnostics

In Vivo Diagnostics• Hematology1• Image scanning• Hemostasis• Electrocardiography• Urinalysis• Respiratory function
testing1• Immunochemistry1• Clinical chemistry1• Gene testing

Sysmex
Instruments andReagents
Service and Support

1 Commercial Labs

2 Hospitals

Specimens

In addition to blood tests used in medical checkups andfor in- and out-patient treatment and diagnostics, ourproducts are used to test for lymph node metastasis
and in cancer genome profiling (see the column).

Test results

Consultation

Patients

3 Clinics, etc.

Diagnosis andtreatment

Clinics typically use products that are compact
and simple.

Specimens
2 Hospitals
3 Clinics, etc.

Lab Assay
Services

Test results

Specimens

Sysmex1. Diagnostics used for medical checkups as well

4 Universities, research Test results

institutions, etc.

Consultation

Direct analysis of the aﬀected specimen

Blood Analysis (Liquid Biopsy)
Analysis of disease-derived components in blood and bodily fluids

Cells

Proteins

4 Lab Assay Services(Outsourced Sample Measurement Services)

We are developing a lab assay business, in which we
receive samples from medical institutions, test them at
our labs and our aﬃliated companies (such as Sysmex
Inostics and RIKEN GENESIS), and send back theresults of protein or gene analyses performed on thesamples. In addition to medical institutions, we handle
measurement on behalf of universities, research
institutes and pharmaceutical companies, providing
information to assist their drug discovery and R&D
eﬀorts. In 2020, we began conducting tests in relation
to COVID-19.

OUR PERFORMANCE AND
COMPANY INFORMATION

Patients

Liquid biopsy is a testing method that involves highly sensitive analysis to detect disease-aﬀected areas present in minutequantities in blood and bodily fluids. Compared with conventional physical biopsy, which is carried out on samples taken fromtumors or other tissue, liquid biopsy is in the spotlight for its potential for imposing less of a physical, emotional, and economic
burden on patients. It also increases opportunities for testing and helps to determine drug administration and other treatment
methods at an early stage.
Examples of Initiatives
In 2016, Sysmex forged an operational alliance with Eisai Co., Ltd. aimed at realizing a diagnosis for Alzheimer’s disease. By using
blood tests to detect structural abnormalities in minute proteins, which are thought to impact disease state, we are conducting
joint research aimed at early diagnosis and treatment.
Tissue Analysis (Biopsy)

Instruments andReagents for Animals
Service and Support

Diagnosis andtreatment

Realizing Personalized Medicine through Liquid Biopsy

Commercial labs conduct testing for small-scale medical
institutions that do not have their own analyzers, as wellas handling specialized tests. Large-scale labs, whichhandle tens of thousands of samples each day, use ourhigh-productivity transport systems.

OUR PLATFORM>>Supporting Healthcare with In Vitro Diagnostics (IVD) P85

Depending on the
country and region,
patients may
consult directly withcommercial labs.

• Electroencephalogram
testing• Ultrasonography, etc.

• Others (FCM, etc.)

1 Commercial Labs

RecoveryOUR BUSINESS & STRATEGY

Clinical testing is essential to healthcare, where it is used indiagnosing and treating illness, measuring the results of drug
administration and diagnosing health to aid prevention, among
other applications. Clinical testing can be broadly divided
into two categories: in vitro diagnostics (IVD) that involve theexamination of blood, urine and other samples taken from thebody, and in vivo diagnostics that involve direct examination
using X-rays or electrocardiograms. Sysmex’s primary businessis in the IVD domain, where we provide medical institutions
and other customers with instruments, reagents, and software
on a global basis.
In response to technological innovation and its application to healthcare, personalized medicine has begun to gain
traction in recent years. This type of medicine is aimed at
conducting risk diagnosis and monitoring treatment results
tailored to individual patients. In such areas, IVD is taking on
an increasingly important role in healthcare.

OUR VALUE

Healthcare Activities

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

5 Veterinary Hospitals

Contributing to Cancer Genomic Medicine through a System for Use in Cancer Gene ProfilingThis system, which targets patients for whom standard treatment has been concluded, provides a comprehensive analysis ofgenes that frequently mutate due to cancer. The information received from this system facilitates the determination of treatment
methods based on gene mutations, the selection of anti-cancer drugs, and drug administration, allowing healthcare to be
optimized for individual patients. In addition to introducing this system to medical institutions and providing support through lab
assay services handled by RIKEN GENESIS, the Company is creating a flow of testing that can be conducted entirely in Japan,
including the provision of detailed support. Furthermore, in 2020 we began providing an expert panel support system as part ofour eﬀorts to help implement a structure for the eﬃcient realization of cancer genomic medicine.

Genes

Contributing toward the realization of personalized medicine,which relies on individual patient characteristics

Take samples of cancer
tissue or blood

Perform comprehensive
analysis of genes
in cancer tissue

Experts analyze reports(expert panel)

Determine treatment methods(including clinical studies)
optimized for individual patients

RIKEN GENESIS (a Sysmex subsidiary) and other locations

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Primary Products and Services
INTRODUCTION

Hematology
For small and medium-sized institutions, Sysmex offers threepart white blood cell differential models, used for determining
basic parameters, as well as five-part white blood cell differential models. Numerous reagents are used with these models
to deliver a high degree of clinical significance. In addition, weoffer a wide-ranging lineup, including transport systems thatcan be used for rapid, high-volume testing in large-scale labs.
In 2021, in Japan we launched a new five-part white blood cell

Flow Cytometry (FCM)

Urinalysis

We are developing products that utilize the flow cytometry
method. Areas of business include clinical FCM (clinical testingto perform detailed analysis in diagnosing leukemia, malignant
lymphoma and HIV/AIDS), industry FCM (used in the quality
control of food) and research FCM (analyzing the functionof cultured cells and other research applications). In 2020,
we launched a product (for research) in North America, theworld’s largest market for FCM testing.

We developed the world’s first urine formed sediment analysis system using the flow cytometry method. We are also
adding to our portfolio of urinalysis products by making useof alliances as we work to expand our lineup in response todiverse urinalysis needs. In 2020, we signed a distributorshipagreement with Siemens Healthineers for the North American
market, and we plan to further expand our market scale.

OUR VALUE

differential flagship model, as well as a compact model providing three-part white blood cell differentiation. Going forward,
we plan to roll out these models globally.
In 2018, we launched the first products to have received
CLIA-waiver certification to clinics and other small-scale facilities in the United States. We are also rolling out products
to help realize the early-stage detection and treatment ofmalaria. For example, in Europe in 2019, and in Japan in 2020,
we launched an analyzer that supports standardization andimproved efficiency in malaria testing.

OUR BUSINESS & STRATEGYn Multiparameter Automated Hematology Analyzers

Five-part differential white blood cell instruments

Fully automated system for the analysis of formed elements in urine
Fully automated urine chemistry analyzer
Fully automated imaging unit for formed elements in urine

Flow cytometer

Reagents
Reagents

Caresphere, a New Network Solution
Caresphere, which we began providing in 2018, manages centrally the various information obtained from diagnostic instruments andhealthcare information systems, using IoT and the cloud to link and analyze data in real time on a platform that is safe and globally standard.
The various applications and services of this platform provide information that augments operational eﬃciency and quality control at hospitallaboratories and commercial labs, all with the aim of resolving customer issues and enhancing patient satisfaction. Currently, we provide
applications that support more sophisticated operations at clinical laboratories, reduce the burden of operations related to ISO 15189, andsupport human resource development.
InputsData gathering, management and analysis

CaresphereLaboratory
Hematology

Hemostasis

Other fields• Test results• Quality control data
• Instrument logs • Test operation records

Convert data to valuable information(New business model)

Applications• Laboratory management• Quality management• Operational management• Clinical support+

Platforms

Value provided

Hemostasis

Immunochemistry

Sysmex handles products offering a wide range of processing capacity to meet the needs of different-sized facilities.
Demand for hemostasis testing has increased and grown morediverse due to a rise in thrombotic diseases stemming fromlifestyle diseases, as well as to the development of new blood
preparations. In 2018, we launched a new product offeringenhanced productivity, reliability and operability, and we areworking toward a global roll-out. In addition to an alliance with
Siemens Healthineers in the area of reagents, we work withGroup 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 automated immunochemistry 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 developing proprietary markers
to test for liver fibrosis progression and atopic dermatitis.
We are also developing new testing parameters, such as for
Alzheimer’s disease, and parameters that meet needs in China
and other regions.

Lower healthcare costs(Higher laboratory productivity, etc.)

Reduced patient burden(Shorter waiting time, etc.)

Higher diagnostic precision(Clinical suggestions)

Reagents

Healthcare collaboration

Reagents(Standardization of testing data)

Automated hemostasis
analyzer

Sysmex Report 2021

OUR PERFORMANCE AND
COMPANY INFORMATION

Efficiency and Handling Capacity

89

OUR PLATFORM

Information Diversity and Function

Three-part differential white blood cell instruments

Automated immunochemistrysystemSysmex Report 2021

90

Profit Model
INTRODUCTION

A Business Model for Achieving Steady Profitability

Cytogenic Testing

We developed a system for use in cancer gene profiling incollaboration with the National Cancer Center. In 2019, thisbecame the first such system to be covered under Japanese
health insurance.

Oxford Gene Technology (OGT), which became a Sysmex
subsidiary in 2017, conducts business in the area of cytogenic
testing, which involves testing cells for chromosomal andgenetic abnormalities. We have launched a Flow FISH testing
system (for research) that utilizes imaging FCM technology toautomate FISH testing.

>>System for Use in Cancer Gene Profiling P88

n A Stable Profit Modeln Composition of Sales (Fiscal 2020)

Ongoing sales of reagents,
service and support

Service and Support

Reagents>>Initiatives Targeting COVID-19 P27>>Lab Assay Services P88

Instruments

Reagents

27.8%

55.8%

Cancer Lymph Node
Metastasis Testing System

OUR PLATFORM

We also offer assay services for research use to determine
expression levels of breast cancer-related gene types, making use of BEAMing technology to detect to a high degree ofsensitivity genes that are present in minute samples of blood.
In Kobe, where our headquarters and major bases are located,
Sysmex took the lead in working with the City of Kobe throughan industry–government alliance to build a system for PCR
testing amid the COVID-19 pandemic, with our employees also
providing a lab assay service.

OUR BUSINESS & STRATEGY

We apply the OSNA method, which we developed, in products
we provide to automatically and easily detect information to
help in diagnosing lymph node metastasis, among other items.
We launched products in this category in China in 2020.

In fiscal 2020, reagents and service and support accounted
for 72.2% of net sales. Reasons for this high figure include thefact that our business comprises a rising share of large-scaleinstitutions that use large quantities of reagents. Also, we are
expanding our portfolio of reagent products with high clinicalsignificance. Furthermore, we are leveraging the capital acquired
through our highly profitable business model to invest proactively with a view to medium- to long-term growth.

Stable source of profits

Other Lab Assays>>Customer Assessment in the United States P22

Sales from one order

Testing of Cancer Lymph Node Metastasis

Demand for healthcare and testing is relatively unaffected by
global circumstances and economic trends, so the IVD business delivers stable profitability.
Our main businesses—hematology and hemostasis—represent a recurring-revenue business model. Even after customers buy our instruments, we continue to provide reagentsand service and support. Reagents are needed each time an
analyzer is used to measure a patient’s blood or other samples.
Service and support are essential to ensuring customers cancontinue to use our instruments with confidence. The level ofcustomer satisfaction for our products and services is high, so

in addition to sales to new customers we frequently receive
ongoing business from existing ones. This high repeatability is
one reason we maintain high profitability.
OUR VALUE

Cancer Gene Profiling

Net sales¥305.0 billion

Instruments*Source: TechSci research Global Surgical Robots Market, Forecast and Opportunities, 2025

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Sysmex Report 2021

12.9%

Year 1 Year 2 Year 3 Year 4 Year 5 • • • • • •3500

n Sales of Reagents, Service and Support
3000

As a percentage of net sales, sales of reagents and service andInstruments

support have risen 10.4 percentage points over the past 20 years.

2500
2000

OthersService andsupportInstruments
Others

1500

72.2%

Service and support
Reagents

1000

Reagents

500

Stable source of profits

In recent years, it has become common to perform minimally invasive laparoscopic surgery to reduce the physical burden on patients. The
global market for surgical robots is expected to grow from ¥550 billion yen in 2020 to approximately ¥1,150 billion by 2025.*
In August 2020, Medicaroid Corporation (a joint venture between Sysmex and Kawasaki Heavy Industries, Ltd.) received Japanese
regulatory approval for the first made-in-Japan robotic assisted
surgery system, followed by insurance coverage in September. As theglobal general distributor for this product, in December Sysmex began
its launch, targeting the urology departments of medical institutionsin Japan. Compact enough to fit in standard Japanese operating rooms,
the system is equipped with user-friendly robot arms and ahigh-definition 3D videoscope. Furthermore, the system has been
designed to be network compatible, to support more accurate
treatment of medical workers.
In fiscal 2020, Sysmex focused on increasing the number ofcases where the system is used in Japan, to heighten brandrecognition and market penetration before its full-fledged
Robotic assisted surgery system
introduction in fiscal 2021. Sysmex plans for a gradual rollout inoverseas markets from fiscal 2023.

Services

3.5%

OUR PERFORMANCE AND
COMPANY INFORMATION

Robotic Assisted Surgery System

Others

61.8%
02001 2002 2003 2004 2005 2006 2007 2008 2009 2010
(FY)

Japanese GAAP

20112012 2013 2014 20152016 20172018 2019 2020

IFRS

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

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92

Terminology
INTRODUCTION

Antigen test

A test to measure for the presence of an antigen, virus, or other pathogen that has entered the body. By detecting virus-specific proteins, these tests confirm whether a virus ispresent in the body at the time of testing.

In vitro diagnostics (IVD)

In general, IVD refers to the testing of blood, urine and other samples to determine physicalcondition. IVD may also refer to the domain of laboratory testing in which IVD is performed.

Knockdown production method

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.

A production method in which the principal parts are exported from Japan for local assembly into finished products.

Liquid biopsy

This is a general name for technology using blood or body fluid samples for diagnosis andthe prediction of treatment impacts, rather than through the conventional practice oftissue 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 and marketing approval(regulatory approval)

In Japan, the manufacturing and marketing of medical devices and reagents requires
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, and in China, approval from the National Medical
Products Administration (NMPA).

OSNA method

Abbreviation of One-Step Nucleic Acid Amplification method, developed by Sysmex,
which enables detection of lymph node metastasis.

Panel testing

A 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.

Personalized medicine

Different from the conventional practice of providing selected predetermined or uniform
treatment for a given disease, personalized medicine aims to select treatment methods
optimized to individual patient characteristics, based on gene 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 statistical methods, thereby allowing the precision ofindividual laboratories’ measurement results to be evaluated. The results are provided as
feedback to these laboratories, helping to increase their quality of testing.

Primary care

The initial care provided at clinics or other locations when a patient first falls ill.

Quality of life (QOL)

Refers to the maintenance of human dignity and improved wellbeing.

RAS genes

One of the genes that is known to cause cancer when it mutates. As the likelihood ishigh that patients with RAS gene mutations will not benefit (prolongation of life, tumor
reduction) from the administration of anti-EGFR drugs, companion diagnostics may be
performed to treat the gene mutation first.

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 on samples of blood orother bodily fluids.

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 Center andcustomers’ 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, and genemeasurement) 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 the risk of infection
when samples are handled manually, and prevents mishandling.

Urine sediment testing

Testing performed to analyze formed elements in the urine, including blood and othercells. Urine chemistry testing, on the other hand, is conducted by using a test paper toanalyze for the presence of sugar, protein, or blood cells in urine.

Application

Corresponds to a test parameter in Sysmex’s various technology platforms.

BEAMing technology

An acronym for “Bead, Emulsion, Amplification, and Magnetics,” this gene analysis method combines digital PCR (ultrahigh-sensitivity PCR) and flow cytometry technologies forhighly sensitive analysis of genetic mutations.

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-time linking
and analysis of a variety of information managed using testing instruments and clinicallaboratory information systems. It is a new network solution that provides support forincreasing the operational efficiency of professionals involved in testing and healthcare,enhancing quality and raising patient satisfaction.

CE Mark

A mark signifying compliance with certain regulations and standards, such as the In Vitro
Diagnostic Regulation (IVDR), required of products intended for sale in the European
Economic Area.

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.

Cytogenic testing

Cytogenetics refers to the study of chromosomes, particularly research related to illnesses arising due to chromosomal abnormalities. Research and testing typically involve theuse of white blood cells, amniotic fluid, or tissues samples and karyotype testing using
G-banding or the FISH method.

Cytokine

A general term for physiologically active substances that contribute to intercellular interaction, which can be determined by measuring proteins secreted by cells. As infection
spreads, the inflammatory response increases. When inflammatory cytokines are discharged in large quantities, immune cells can trigger acute multiple organ failure. Results
include respiratory failure, sepsis, coagulation disorders and other severe illnesses, suchas interferon-λ3.

Drug susceptibility test

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

EMEA

Europe, the Middle East, and Africa

Expert panel

A multidisciplinary investigative commission that meets to medically interpret gene panel
testing results. Convened at core hospitals for cancer genomic medicine, expert panels
recommend treatment methods optimized for individual patients on the basis of abnormal gene information. Members of such panels include oncologists, genome researchers,
counselors, etc.

Flow cytometry (FCM)

Method involving the flow dispersion of minute particles and the use of laser light tooptically analyze minute flows.

Flow FISH testing

Whereas FISH testing requires evaluation of slides under a microscope, flow FISH testinguses an imaging flow cytometer to capture images, enabling automated analysis.

Fluorescence in situ hybridization (FISH) Testing method using fluorescent material binding only specific genes to detect abnortesting
malities within a chromosome.

93

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 byanalyzing the number, type, and size of red, white, and other blood cells.

Sysmex Report 2021

Sysmex Report 2021

OUR PERFORMANCE AND
COMPANY INFORMATION

A proprietary Merck technology that combines FCM for processing large quantities ofcells with the rapid capture of images of cell morphology, fluorescent imaging and automated digital image analysis.

OUR PLATFORM

Imaging FCM

OUR BUSINESS & STRATEGY

A test to measure for the presence of a protein (antibody) generated by the body’s immune function, which endeavors to repel foreign exogenous matter that has entered the
body. This test allows the checking of disease history, as well as current infection.

OUR VALUE

Antibody test

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Stock Information (As of the End of Fiscal 2020)

Corporate Information (As of the End of Fiscal 2020)
INTRODUCTION

Sysmex Corporationn Principal Shareholders (Top 10)

n Stock Price Range

Number of Percentage
shares held of share(Thousands) holding (%)(Calculated as the closing price on March 31, 2010 = 100)

1,000

Shareholders

Sysmex (Figures adjusted for stock split)
Tokyo Price Index (TOPIX)

750

500

0

IR & Corporate Communication Department, TEL: +81-78-265-0500

13,723

6.6

Websitehttps://www.sysmex.co.jp/en/

12,000

5.7

Number of Employees

9,510 (consolidated basis) (including part-time employees and others)

11,830

5.7

Fiscal Year

April 1–March 31

10,457
6,124
6,124
4,750
4,012

5.0
2.9
2.9
2.3
1.9

Shareholders’ Meeting

June

Number of Shares Authorized

598,688,000 shares

Number of Shares Issued

209,443,232 shares

Paid-in Capital¥13,229.9 million

3,219

1.5

Stock Listings

Tokyo Stock Exchange, First Section

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
FTSE Blossom Japan Index
MSCI ESG Leaders Indexes
MSCI SRI Indexes
MSCI Japan ESG Select Leaders Index
MSCI Japan Empowering Women Index (WIN)S&P/JPX Crabon Efficient Index
Ethibel Excellence
Ethibel Pioneer
Ethibel Sustainability Index (ESI)Euronext Vigeo Eiris World 120 Index
Sompo Sustainability Index

n Distribution of Shares by Number of Shares Held
Less than 1,000 shares 0.94%

Fiscal years

High
(Yen)

Low
(Yen)

Closing price(Yen)

Volatility
(%)

2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020

6,010
3,340
5,800
7,180
6,880
8,640
8,170
9,730
11,1108,420
13,310

2,789
2,387
2,900
3,130
3,070
5,430
6,010
6,080
4,810
5,814
7,024

2,942
3,340
5,790
3,290
6,670
7,040
6,750
9,640
6,690
7,846
11,925

27.8
23.6
25.7
37.5
27.6
39.2
29.9
24.7
38.7
38.4
27.8

Number of shares: 1,969,597(9,927 shareholders)More than 1,000 shares 1.38%
Number of shares: 2,884,662(1,421 shareholders)More than 5,000 shares 0.94%
Number of shares: 1,963,401(281 shareholders)More than
10,000 shares 3.45%
Number of shares: 7,233,521(330 shareholders)More than
500,000 shares 76.63%

More than
100,000 shares 16.66%

Number of shares: 160,487,933(70 shareholders)Number of shares: 34,904,118(198 shareholders)Note: Volatility refers to the annualized standard deviation based on thedaily closing price.

n Total Shareholder Return (TSR1) (Annualized Rate)(%)

Past 1 Past 3 years
Past 5 years Past 10 years
Investment year
periodCumulative/ Cumulative Annual Cumulative Annual Cumulative Annual
Annual rate
rate
rate
rate

Sysmex

52.1

24.1

7.5

70.3 11.2

722.1 23.4

TOPIX
TOPIX
(Electricalequipment)

42.1

22.1

6.9

62.3 10.2

179.4 10.8

68.6

48.4 14.1

134.3 18.6

226.4 12.6

OUR PERFORMANCE AND
COMPANY INFORMATION

Inquiries

OUR PLATFORM

11.3

(FY)

n Stock Price Movements

1-5-1, Wakinohama-Kaigandori, Chuo-ku, Kobe 651-0073, Japan

23,564

Note: Percentage of shareholding excludes treasury stock (446,876 shares).

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Head Office

OUR BUSINESS & STRATEGY

250

February 20, 1968

OUR VALUE

Custody Bank of Japan, Ltd. (Trust Account)
The Master Trust Bank of Japan, Ltd.
(Trust Account)
The Kobe Yamabuki Foundation
Nakatani Foundation for Advancementof Measuring Technologies in Biomedical
Engineering
Nakatani Kosan, Ltd.
Kazuko Ietsugu
Taeko Wada
Rusoru, Ltd.
Tadako Nakatani
NORTHERN TRUST CO. (AVFC) SUB A/C
AMERICAN CLIENTS

Establishedn Composition of Shareholders
Individuals and others
15.86%

Financial institutions
22.18%
Financial instrument firms
0.87%

Foreign investors
41.07%

Other Japanese companies
20.02%>>Sustainability Data Book > Evaluations and Results Related to Sustainability P62

1. TSR: Total shareholder return, including capital gains and dividends• Prepared by Sysmex based on data from Nikkei NEEDS-Financial QUEST• Base date of March 31, 2021
• TSR calculated on the assumption that dividends are reinvested in shares

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