Sysmex Report 2017

Sysmex Report 2017
For the year ended March 31, 2017
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/

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Aiming to Contribute to theDevelopment of Medical Care and the
Health of People throughout the World
Since its founding, Sysmex’s business has been
focused on the in vitro diagnostics ﬁeld. We have takenon the challenge of promoting advances in healthcare
and aimed to create a fulﬁlling and healthy society.
We endeavor to facilitate testing that aids swifter andmore accurate diagnosis, that is conducted nearer topatients and places less of a burden on them, andthat contributes to new levels of healthcare. We plan
to continue taking on challenges in the healthcare
domain by remaining a step ahead of the times andgoing outside our existing framework.

1

2

Sysmex Report 2017

Contents

ProﬁleTo Our Stakeholders

Business Activities

Enhancing Corporate Value

Based on the “Sysmex Way,” thecorporate philosophy for the Sysmex
Group, we are working to realize a
fulﬁlling and healthy society.

We aim to achieve sustainablegrowth by enhancing proﬁtability in
our core businesses and investing in
our next core businesses.

We are creating frameworks to generate and provide value in response
to diverse market needs.

By putting into practice the “Sysmex
Way,” the corporate philosophy for theSysmex Group, we are contributing tosociety and working to achieve sustainable increases in corporate value.

5

13

55

Financial andOther Information76

31
Corporate Philosophy for
the Sysmex Group................................. 5
A Sustained Growth Trajectory ...... 7
Business Domains andMarket Positioning................................ 9
Our Story of Value Creation ............ 11

Message from the CEO ...................... 13

Framework for Generating Value .... 31

CSR Management.................................. 57

Our Financial Perspective ................. 17

Functional Structure ............................ 33

33

Resolution of Medical Issues
through Products and Services ...... 59

Consolidated Financial and
Non-Financial Data (10 Years) ........ 77
Management’s Discussion andAnalysis....................................................... 79

Financial Highlights ............................. 19

Research and Development

Growth Strategies ................................. 21

Procurement, Manufacturing and
Logistics

35

Responsible Provision of
Products and Services ......................... 61

37

Environmental Consideration ......... 62

Stock Information ................................. 89

Realization of
an Attractive Workplace .................... 63

Corporate Overview............................. 90

External Environment

21Internal Environment

22

Sales and Support Services

23

Overview of Business byGeographic Region ............................... 39

Long-Term Management Targets

New Mid-Term Management Plan 24

1
2

Reinforcing Proﬁtability to
Achieve Further Growth(Core Businesses)

Americas41

Members of the Managing Board . 71

EMEA

25

Investing in Growth to
Reform Our Business Portfolio 27

Corporate Governance ....................... 65(Europe, the Middle East and Africa)

43

China

45

Asia Paciﬁc

47

Japan

49

Principal Testing Fields andProducts ..................................................... 51
User Report .............................................. 53

Messages from Outside
Members of the Managing Board... 73
Executive Oﬃcers ................................ 75

Consolidated Financial Statements ... 83

Editorial Policy
The Sysmex Report, an integrated report thatsummarizes financial and nonfinancial information, is intended to help stakeholders understand Sysmex’s medium- to long-term value
creation. For more detailed information, please
visit our website.

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

Accounting Standards
In the fiscal year ended March 31, 2017,
we voluntarily adopted the International
Financial Reporting Standards (IFRS). In thisreport, figures presented up to the fiscal year
ended March 31, 2015, are in accordance withJapanese GAAP. Figures beginning after theyear ended March 31, 2016, are presented inaccordance with IFRS.

Cautionary Note Regarding ForwardLooking Statements

33

Promoting Reforms to
Lead Growth30

Statements in this report pertaining toSysmex’s future plans, strategies, businessperformance and other items are based on
currently available information and involvecertain risks and uncertainties. Actual results
may differ materially from those anticipated inthese statements.

4Sysmex Report 2017

ProfileCorporate Philosophy for the Sysmex Group

Aiming to Support People’s Health, an Ideal
We Have Carried Forward Since Our Founding
Realizing a healthy society is our ideal. Our corporate culture emphasizes taking on challenges
in developing new products and technologies. Furthermore, we have carried forward Sysmex’s
values—building trust and conﬁdence among all our stakeholders—since the time of our founding.

1959

Shaping the advancement of healthcare.

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

In 1959, Sysmex Founder Taro Nakatani visited the United States, looking
for new business ideas. His attention was drawn to the ﬁeld of medical electronic devices.
Our founder,
setting oﬀ on his overseas visit

With passion and ﬂexibility, we demonstrate
our individual competence and unsurpassed teamwork.

1963
When he returned to Japan, Mr. Nakatani began working with young
researchers, conducting studies and engaging in development. In 1963, theCompany succeeded in the commercialization ofJapan’s ﬁrst hematology analyzer, the CC-1001.

The CC-1001 automatedhematology analyzer

Core Behaviors
To Our Customers

1968

We deliver reassurance to our customers, through unmatched quality, advanced technologies, superior support, andactions that consistently reﬂect the viewpoint of our customers.
We constantly look out for our customers’ true needs, and seek to generate new solutions to satisfy those needs.

Established TOA MEDICAL ELECTRONICS CO., LTD. (current Sysmex Corporation)
Formulated by Founder Taro Nakatani

Our Fundamental Management Policy
Corporate Objective

Fundamental Management Policy (the “Three Aspects of Conﬁdence”)

By selling the products we create, we will
satisfy the demands of society at large,
contribute to society and make our own
lives more fulﬁlling.

 Total customer conﬁdence in all of our
products.
 Total conﬁdence in our associates in all
our business transactions.
 Total conﬁdence of our employees inthemselves and all their work.

2007

We honor diversity, respect the individuality of each employee, and provide them with a workplace where they canrealize their full potential.
We value the spirit of independence and challenge, provide employees with opportunities for self-fulﬁllment andgrowth, and reward them for their accomplishments.

To Our Business Partners
We deliver commitment to our client companies through broad-ranging partnerships.
We strive to be a company that can grow in step with our trade partners, through respect and mutual trust.

To Our Shareholders
Our shareholders can rest assured that we will continue to improve the soundness and transparency of our management
policies, while promoting information disclosure and close communications.
We commit ourselves to a consistent yet innovative style of management, in order to achieve sustainable growth andincreased shareholder value.

In line with changes in the global management environment, we redeﬁned

To Society

the perspective carried forward since the time of our founding, formulating an

We carry out our business in strict compliance with laws and regulations, as well as in adherence to high ethical standards.
As a responsible member of society, we play an active role in resolving environmental issues and other problems that
impact our society today.

expanded corporate philosophy for the Sysmex Group, the “5

To Our Employees.”

6Profile

Sysmex Report 2017

Target for the ﬁscal year ending March 31, 2020

A Sustained Growth Trajectory¥350.0 billion
Consolidated sales in the ﬁscal year ended March 31, 2017¥249.8 billion

Since our founding, we have sought to foresee future needs
and continued taking on challenges in the healthcare domain.

Founding members
1968

Overseas sales

Our first overseas location (Germany)
1972

The world’s first system product in the hematology field1990

Formulation of the corporate philosophy
for the Sysmex Group2007

Entered the life science field
Opening of the Central Research Laboratories(at the time)
2000

Domestic sales

1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20172020

Note: Fiscal years through 1990 ended on February 20. Fiscal years from 1991 ended on March 31 (Japanese GAAP). Figures from2016 are presented according to IFRS. Figures are presented on a non-consolidated bases through the ﬁscal year ended
March 31, 1993, and on a consolidated basis from the year ended March 31, 1994.

Management
Establishment

Changed company name to Sysmex Corporation

Formulated our corporate philosophy

1998

2007 Formulation of the “Sysmex Way”
2008 Renewal of our corporate logo

Created the “Sysmex” brandStrengthened our management structure

1978

Gained the top share of the global market in
the hematology ﬁeld

Listed on the Second Section of the Osaka Securities Exchange in
1995, the Second Section of the Tokyo Stock Exchange in 1996,
and the First Sections of the Tokyo and Osaka exchanges in 2000

Established our ﬁrst overseas location
1972 Germany

Began providing direct sales, service andsupport overseas for the ﬁrst time1991 United Kingdom

2007

Reinforced our global sales network
through business alliances

Commenced direct sales in
the world’s biggest market

Accelerated the establishmentof bases in emerging markets

1995 Entered an alliance with current Siemens
Healthcare Diagnostics Inc. in relation tohemostasis products
1998 Entered an alliance with current F. HoﬀmanLa Roche Ltd. in hematology products

2003 United States2010 Vietnam, Philippines
2011 Russia
2014 Turkey
2014 Colombia
2015 Ghana...

Sales and Support Services

Strengthening
Our Global
Management
Structure

Constructing a
Sales, Service andSupport Network
Covering MoreThan 190 Countries

Establishment of locations in Asia and China Reagent factory in China in 1995 and in Singapore in 1998

R&D and Manufacturing

Developed the world’s ﬁrst systemproduct in the hematology ﬁeld
1990

Consolidated sales, development, manufacturing and general aﬀairs divisions

Promoted the expansion ofbusiness ﬁelds

1973 Established the Kakogawa Factory

1986 Established the Kobe FactoryEntered the life science ﬁeld
2000 Opened the Central Research Laboratories
within the current Technopark

Promoted the expansion ofbusiness ﬁelds

Reinforced R&D capabilities in reagents

1993 Established the main building ofTechno Center2001 Converted the current Sysmex International
Reagents Co., Ltd., to a wholly owned subsidiary

Expanded our technology platform with a view topersonalized medicine
2013 Acquired the current Sysmex Partec and Sysmex
Inostics as subsidiaries
2016 Converted RIKEN GENESIS to a subsidiary

Proactively
Entering New Fields
in the Healthcare
DomainStrengthened global-standard R&D capabilities
2008 Established Technopark (expanded Techno Center)

Expanding the Healthcare Business
Hematology
Urinalysis
Hemostasis
Immunochemistry
Life Science

78Profile

Sysmex Report 2017

Business Domains and Market Positioning

We continue to grow by taking advantage of ourstrengths in the expanding market for in vitro diagnostics.
medicine has begun, such as performing risk diagnosis andActive in the IVD Domain,
Which Is Essential to Healthcare

Sysmex’s Core Testing Fields

monitoring the treatment results of individual patients. Thus,
IVD is playing an increasingly important role in healthcare.

Clinical testing, which is used in a variety of scenarios that

Platelets

Market Position

include medical diagnosis and treatment, is essential to

Red blood cells

healthcare. Clinical testing can be broadly divided into two
categories: in vitro diagnostics (IVD) that involve the exami-

Sysmex’s business in the IVD domain involves the provi-

Hematology

nation of blood, urine or cell samples taken from the bodysion of instruments, reagents and software around theTesting that measures and analyzes the number, type andsize of red, white and other blood cells

and in vivo diagnostics that involve direct examination using

world, and we rank among the top 10 companies in the

X-rays or electrocardiograms. Sysmex’s primary business is inworld in the IVD domain. In the three ﬁelds of hematol-the IVD domain. In line with progress on genetic analysis andogy, hemostasis and urinalysis (sediment), we have thetechnologies in recent years, the realization of personalized

leading share of the global market (including throughDiagnosis and Treatment

Recovery

In Vitro Diagnostics

the leading company in the IVD domain.

Hematology*
Hemostasis
Urinalysis*
Immunochemistry
Gene testingand others

Fbg

Immunochemistry

The IVD domain is forecast to continue growing to

X-ray/MRIElectrocardiogrammeasurement
Respiratory function
testing
Electroencephalogram
testingand others[Hemorrhagic diseases (hemophilia, etc.), thrombotic
diseases (deep-vein thrombosis, etc.)]

D-Dimergrowth ﬁelds, as we are aiming to position ourselves as

In Vivo Diagnostics

Testing to determine the ability of blood to clot wheninjured and to dissolve clots

Clotting
factors

developing our business in immunochemistry and other

Clinical Laboratory Testing

Hemostasis

FDP

alliances). In addition to these three ﬁelds, in Asia we are
Examination[Anemia, leukemia, thrombocytopenia, etc.]

White blood cells(neutrophils)
White blood cells(lymphocytes)

Platelets

Testing for the status of viruses, hormones and proteins,
and to determine causes and types of disease

meet increasing healthcare needs in developed countries
and healthcare infrastructure being put in place in emerg-[Infectious diseases (hepatitis, AIDS), cancer, allergies, etc.]
Viruses

ing markets. At the same time, global competition is growing increasingly ﬁerce, with companies from other sectors
entering our ﬁeld. Sysmex is responding to this changing
environment by leveraging its unique strengths to maximize

Sysmex business ﬁeld
* Diagnostics used for medical checkups as well

Clinical ChemistryProteins

Hormones

Testing to determine the state of metabolism-related organs
by studying sugars, lipids, proteins and other components

Lipids[Diabetes, arteriosclerosis, liver dysfunction, kidney
dysfunction, etc.]

Sugarsits corporate value and steadily increase its market position.

 Market Scale and Sysmex’s Business Domains
MarketScale

MarketGrowth($ million) Rate

Testing ﬁeld

(Fiscal year
ended March
31, 2017)

Production
Instruments Reagents

Sales andService
Principal Alliances
Area

Hematology

3,100

6%

63.8%





GlobalHemostasis

1,800

5%

16.4%





GlobalUrinalysis
Of which,
sediment urinalysis
Immunochemistry

1,000
320

6%

6.4%





Global

18,000

6%

3.2%





Asia

Clinical chemistry

7,400

5%

1.4%





Asia

21,700

—

8.8%





53,0006%—

Others (genes,
blood sugar, etc.)
IVD market

F. Hoﬀman-La
Roche
Siemens Healthcare
Diagnostics

Market Sharein Hematology
Other companies

Proteins

Lymph
nodes

Hematology

EIKEN CHEMICAL

—

—
JEOL
Furuno Electric——Life Science

Inorganic
matterSysmexDNA

Note: Sysmex’s assumptions

9

Compositionof SalesCancer cells

z Gene testing
In this testing, we analyze genetic information to study the
likelihood that cancer and other diseases will occur, as well
as pharmaceutical compatibility and so on.
z Lymph node metastasis testing
Testing to determine the metastasis of cancer cells to thelymph nodes

Urinalysis
Testing for the presence of sugar, protein or blood in theurine, the presence of urinary tract stones, kidney
function and signs of diabetes——

 Own products  Alliances

10Profile

Sysmex Report 2017

Our Story of Value Creation

In the healthcare domain, we are leveraging ourstrengths to create new value and contribute to
the creation of a fulfilling and healthy society.

Based on the “Sysmex Way,” the corporate philosophy

promoting future-oriented initiatives, such as the realization

for the Sysmex Group, we are leveraging our distinctiveof personalized medicine. By extending healthy lifespans,strengths and inputs to develop businesses in the IVD

reducing the burden on patients and enhancing the qual-domain that support healthcare. We facilitate testing

ity of healthcare, we will create value that contributes toin more than 190 countries around the world and are

the realization of a fulﬁlling and healthy society.

Corporate philosophy for the Sysmex Group

Sysmex’s Strengths and Inputs

Business Domains

Product Development Capabilities

Essential for Healthcare

Instruments x reagents x software

R&D Capabilities
for Creating Unique Value

Social Value
Hematology Tests Facilitated by Sysmex

IVD

Technology Platforms
P33

Value Creation

More than 50% of the world total

Genes, cells and proteins

Customer Satisfaction in Hematology(United States)Core Businesses

No. 1 for 11 consecutive years

Instrument Manufacturing

Social Issues and Needs

Manufacturing and
Supply Structure
to Provide High-Quality
Instruments and a Stable
Supply of Reagents

Made in Japan

1 share of theȉ Hematology No.global
marketReagent Production

Nine factories in seven countries
Satisfying Regulatory Systems Around the World
P35

Quality management systemȉ Urinalysis

No. 1 share of the
global market3

P25

Global Business Development

Sales, Service and Support
to Inspire Conﬁdencein Customers
P37

More than 4,500 people

ȉ Flow Cytometry (FCM)

Services and Supportȉ Life Science

Network service SNCS™ 1

ȉ Other New
Business Fields

More than 8,000 people

Automating testing forinfectious diseases

Future-Oriented Initiatives

Realization of
Personalized Medicine
Through Liquid Biopsy5,

Realization of less-invasive
testing
P27

Extendinghealthy
lifespans

Reducing theburden on
patients(physically,
emotionally,
economically)

Enhancing
the qualityof healthcare(at locations in more than 40 countries)

Economic Value

Female Employees (Group)
P63

More than 40%

ROE 20% or more

A Recurring-Revenue Model that Generates Ongoing Earnings

A Stable Business Model

Total Shareholder Return (past ﬁve years)

Reagents and services account for
P22

1

Malaria, etc.

Creation of Unique
Testing Parameters

Next Core Businesses

Number of Group Employees

Diverse Human Resources
Supporting Future Growth(Productivity, clinical value)

Use of Glycosylation Markers4, etc.

Scientiﬁc Seminar Participants (Annually)

P57

Sysmex: 33.3% TOPIX average: 14.5%

more than 65% of sales

Sysmex Network Communication Systems (SNCS): An online support service that connects to the Sysmex Customer Support Center andcustomers’ instruments via the Internet to provide real-time external quality control and scientiﬁc information and monitor instrument
conditions.
2
Including our alliance with Siemens

11ȉ Hemostasis

No. 1 share of the
global market2

Enhancing the Quality of Testingȉ ImmunochemistryMore than 190 countries

Realizinga Fulﬁllingand Healthy
Society3

Sediment urinalysis ﬁeld
Glycosylation marker: A biomarker that targets structural changes in sugar chains present in glycoproteins
5
Liquid biopsy: Similar in performance to a biopsy, which is carried out on a sample taken from tissue such as tumors, but whichattempts to reduce the burden on the patient by using blood or body ﬂuid tests.
412Sysmex Report 2017

To Our Stakeholders

We aim to achieve sustainable growth byenhancing profitability in our core businesses
and investing in our next core businesses.

Hisashi Ietsugu
Chairman and CEO

Message from the CEO
rate ﬂuctuations than ever before. On a local currency

within the Sysmex Group, shaking us out of the sense thatbasis, sales were up in all geographic locations, and busi-

smooth sailing is a matter of course. All our employees areness itself has not worsened. Nevertheless, I am extremely

starting to realize how diﬃcult it is to maintain ongoing

The “Sysmex Way,” the corporate philosophy for thedisappointed that our streak of ongoing increases in sales

growth. I believe this awareness is an important part of

Sysmex Group, deﬁnes Sysmex’s mission as “shaping theand proﬁts has come to an end.

arousing the sense of challenge needed to put ourselves

Sysmex’s Mission:“Shaping the Advancement of Healthcare.”advancement of healthcare.” We are developing our busi-

These operating results have aroused a sense of crisis

back on a growth trajectory.

ness in accordance with this mission. The in vitro diagnostics (IVD) domain has been the mainstay of our businesssince the time of our establishment. Going forward, we
will continue contributing to the realization of a fulﬁllingand healthy society by taking on challenges in advancing

 Net Sales Operating Proﬁt/Operating Margin

 Proﬁt Attributable to Owners of the Parent

Operating proﬁt
Operating margin

healthcare.

60.7
252.6 249.8 (¥ billion)

New Challenges for Achieving
Sustainable Growth
In the ﬁscal year ended March 31, 2017, our growth was

39.2

40.6 (¥ billion)

51.7 (¥ billion)

221.3
44.4

184.5

26.6

145.5

24.0

32.8

interrupted, following 16 continuous years of expansion

21.8

17.8

20.5

20.7(%)

20.1

14.1

15.0

in sales and 15 straight years of increases in proﬁts. The
overriding factor was the impact of exchange rates. With
overseas sales accounting for more than 80% of the total,
Sysmex is even more exposed to the impact of exchange

13

’13.3

’14.3

’15.3

Japanese GAAP

’16.3
IFRS

’17.3

’13.3

’14.3

’15.3

Japanese GAAP

’16.3
IFRS

’17.3

’13.3

’14.3

’15.3

Japanese GAAP

’16.3

’17.3

IFRS

14

To Our Stakeholders

Highlights of the Fiscal Year Ended March 31,
2017: Against a Backdrop of Higher Earnings,
Invested in Medium- to Long-Term Growth
Looking back on the ﬁscal year ended March 31, 2017,
we achieved steady proﬁtability increases in such ﬁelds
as hematology and hemostasis. In the hematology ﬁeld,

Sysmex Report 2017is spurring advances in personalized medicine and otherareas of advanced medical treatment. Given expectations of longer healthy lifespans as societies age, theneed to curb medical expenses is growing. On the other
hand, economic development in emerging markets anddeveloping countries is driving demand to put healthcare
infrastructures in place.

we obtained orders from prominent commercial labs andpenetrated the West Coast region of the United States.
Business in emerging markets also expanded, boosted by

Aiming to Resolve Medical Issues through
Unique Technologies

the launch of a compact model, the XN-L Series, reinforcing our position as the leading company in this ﬁeld. In

Operating in this environment, Sysmex will take on thethe immunochemistry ﬁeld, which we are investing in as achallenges of creating new technologies and addressing

driver of medium-term growth, the number of instruments

unmet medical needs. In these ways, we will contribute toin operation increased in Japan, China and other parts of

the health of people around the world.

Asia, creating a foundation for growth.
One issue we faced during the year was delays in ourplanned launch of new products in the urinalysis ﬁeld.

initiatives to realize personalized medicine—diagnosis andAlso, various countries have reinforced their product regu-

treatment tailored to individuals. Also, no speciﬁc drugs

latory systems in recent years, which means that approval

exist for the treatment of Alzheimer’s dementia, which issometimes takes more time than we expect. We are work-

expected to become an increasingly serious social problem

are still expanding. In particular, needs are increasing in

generating new value and maintain growth. I believe thating to increase the speed of new product introductions by

as societies age. However, early detection and appropriate

emerging markets and developing countries, where infra-

companies can meet shareholders’ expectations as a result.

reinforcing our system for smoothly obtaining approvals.

care are thought to improve the situation or delay the on-

structures are being put in place as populations increase,

First, ongoing growth provides the basis for share-

On the proﬁt front, I believe that achieving balance is

set of the disease. Sysmex is working to develop technolo-

so we anticipate further growth.

holder returns through stable dividends. To date, Sysmex

more important than only striving to bolster proﬁtability.

gies for using blood tests to detect signs of the disease.

We will invest the proﬁts generated in these core

has raised dividends for 15 consecutive ﬁscal years. We

While maintaining our operating margin at 20%, we will

Testing plays an important role in such treatment, andbusinesses into our next core businesses—our engines

will invest proactively in order to maintain high rates ofinvest proactively toward the future. Speciﬁcally, we will

numerous themes of this nature remain to be addressed.

for further growth. By accelerating commercialization in

growth, but in the interest of ensuring the important bal-

invest in our R&D, manufacturing, and sales and service

Another important question is how to expand our

ﬂow cytometry (FCM), life science and other new busi-

ance between such investment and returning proﬁts tosystems. Also, we will work to recruit and cultivate diverse

creation of new value. Sysmex is developing its businessness ﬁelds, we aim to transform our business portfolio toshareholders, we will continue targeting a dividend payout

human resources and make our Company an easier place

globally, and we are creating systems to deliver our prod-

achieve sustainable growth.

ratio of 30% going forward.

for employees to work. I believe we need to take balanceucts not just in speciﬁc regions but around the world. At

into account as we endeavor to enhance the quality of our

the same time, it is essential to lower costs. By doing so,turing in various ways, such as by establishing a base for

Sysmex’s current situation and future direction to

management in these ways.

we can promote the advancement of healthcare by provid-

the development of bio-diagnostic reagents. In addition toaccurately assess the market. Through our investor rela-ing value to even more people.

reinforcing our IT foundation to optimize operating pro-tions activities, we engage in dialogue with our sharehold-cesses, we will step up recruitment and cultivation ofers and investors. Furthermore, by enhancing corporate

Growing by Reinforcing Profitability inCore Businesses and Investment in
Our Next Core Businesses

human resources who are next-generation leaders andgovernance and ensuring highly transparent manage-

who have advanced specialties and promoting further

ment, we aim to cultivate trust-based relationships withdiversity to transform ourselves.

our stakeholders.

Our recently formulated new mid-term management

Maximizing Shareholder Returns by
Maintaining Sound Growth

September 2017

The Environment Surrounding
the Healthcare Business
The environment in which Sysmex operates is in a stateof dynamic ﬂux. On a macro level, we face the ongoing
aging of society, population increases in emerging markets and developing countries and outbreaks of infectious
disease. On the technical front, the environment is characterized by the use of big data and advances in artiﬁcial
intelligence (AI) and robotics. These changes in the operating environment are aﬀecting needs in the healthcare
market. In developed countries, technological innovation

15

For example, we are strengthening our eﬀorts in blood
tests that make it easy to check for genetic changes andplan, which concludes in the ﬁscal year ending March 31,

To support this expansion, we will reinforce manufac-

In addition, I recognize the importance of clarifying

2020, positions hematology, urinalysis, hemostasis andimmunochemistry as core businesses. We aim to augment

The environment in which Sysmex operates is undergo-sales and proﬁts by pursuing growth in these ﬁelds. These

ing sudden and major changes. I think that environmental

Hisashi Ietsugu

core businesses enable Sysmex to leverage its existing

compliance should always be equated with management.

Chairman and CEO

strengths. We see room for growth in these ﬁelds, which

Environmental compliance enables a company to continue

16

To Our Stakeholders

Sysmex Report 2017

Our Financial Perspective

We invest proactively andprovide appropriate shareholder returns.
Generating and Using Funds

Proactive Investments to Augment
Corporate Value Research and Development Expenses

15.5 (¥ billion)

In hematology, hemostasis, urinalysis and immunochemis-

growth in our new core businesses. As investments intry, which we have positioned as core businesses, we aim to

future-oriented reforms, we will concentrate on reinforc-

To achieve further growth, Sysmex is investing towardfurther increase proﬁtability and expand operating cash ﬂow.

ing manufacturing and foundation, including IT, and on

accelerated future expansion in FCM, life science andWe will use the cash these businesses generate tohuman resource cultivation and management. Regarding

other new business ﬁelds. In addition, we invest in R&D toinvest in core businesses. In addition, we will invest proac-shareholder returns, we intend to maintain stable ongoing

generate highly valuable new testing and diagnostic tech-tively in R&D, M&A and capital expenditure toward further

dividends and increase ROE.

nologies, in M&A to expand our technology platforms, and9.2

in capital expenditures for factory expansion to meet our

Operating Cash Flow

Shareholder Returns

global supply responsibilities. As a result, our R&D expensesȉ6WDEOHRQJRLQJGLYLGHQGVȉ7DUJHW'LYLGHQG3D\RXW5DWLRRIɬɩand capital expenditures have grown over the past 10 years.

Strengthen Proﬁtability (Core Businesses)+HPRVWDVLVInvestment

plan to build a base for bio-diagnostic reagents in Kobe.

FCM/LIH6FLHQFH

2WKHU1HZ%XVLQHVV)LHOGV

R&D

M&A

Capital expenditure,PPXQRFKHPLVWU\
0DQXIDFWXULQJ

5HLQIRUFLQJ)RXQGDWLRQ(Including IT)’12.3’13.3 ’14.3’15.3’16.3 ’17.3
IFRS

concludes in the ﬁscal year ending March 31, 2020, we Capital Expenditure (Tangible)

R&D to Accelerate Future Growth in FCM,
Life Science and Other New Business Fields

11.8 (¥ billion)
8.2

Investing in Reforms

8ULQDO\VLV’11.3

Japanese GAAP

During the period of the mid-term management plan that

Invest in Growth (Next Core Businesses)+HPDWRORJ\’08.3 ’09.3 ’10.3+XPDQ5HVRXUFH&XOWLYDWLRQDQG
0DQDJHPHQWCapital Expenditure for Factory Expansion to Meet
Our Global Supply Responsibilities
M&A to Enhance Our Technology Platforms’08.3 ’09.3 ’10.3

’11.3

’12.3

Japanese GAAP

’13.3 ’14.3’15.3’16.3 ’17.3
IFRS

Shareholder Returns
Sysmex aims to maintain a proper balance between

 Dividend and Dividend Payout Ratio

aggressive investment, which is designed to sustain steady

ROE

Dividend (Annual)
Dividend payout ratio (Consolidated)high growth, and returns to our shareholders as our earn-

58 60 (¥)

ing power increases. In terms of returns to shareholders,

ROE was 20.7% in the ﬁscal year ended March 31, 2017.

we intend to provide a stable dividend on a continuous

Going forward, we plan to augment ROE while maintain-

29.7 30.5 (%)

basis and aim for a consolidated payout ratio of 30%

 ROE
20.7 (%)

ing a healthy ﬁnancial balance.

under our basic policy of sharing the successes of ouroperations in line with business performance.

18.9
12.1

Stable Dividend on a Continuous Basis

Sustained Appropriate Shareholder Returns
3.125

Target Dividend Payout Ratio of 30%
15 Consecutive Years of Dividend Increases

17

’03.3

’10.3

’17.3 ’18.3

Note: Converted to basis following stock split on April 1, 2014

Maintenance of a Sound Financial Base

(Forecast)Higher Income

’08.3

’10.3

’17.3
Japanese GAAP

IFRS

18

To Our Stakeholders

Sysmex Report 2017

Financial Highlights
Total Assets
Return on Assets (ROA)Net Sales¥249.8 billion

Net Sales(Down 1.1% year on year)

Euro

Sales were up in all geographic regions on a local

US dollar

249.8 (¥ billion)
1 1 8.8 (¥)
108.4(¥)

currency basis, but down overall due to the impact of¥279.8 billion 16.3%(Up 6.0% year on year)

Total Assets

279.8 (¥ billion)(Up 0.8 percentage
point year on year)

Total assets increased in line with rises in trade and other16.3 (%)

ROA

receivables and intangible assets.

yen appreciation.
Note: Exchange rates had a negative impact on net sales of ¥26.4 billion.

’08.3 ’09.3 ’10.3

’11.3

’12.3

’13.3

’14.3

’15.3

Japanese GAAP

’16.3 ’17.3’08.3 ’09.3 ’10.3

’13.3

’14.3

’15.3

’16.3 ’17.3
IFRS

Equity Attributable to Owners of the Parent
Return on Equity (ROE)¥51.7 billion 20.7%

Operating Proﬁt(Down 3.3 percentage
points year on year)

Operating profit declined due to the impact of yen appre-

51.7(¥ billion)¥209.4 billion 20.7%(Up 14.6% year on year)

Equity Attributable to Owners of the Parent

209.4 (¥ billion)(Down 2.4 percentage
points year on year)

20.7 (%)

20.7 (%)
Although profit rose, ROE decreased in line with increases

Operating Margin

ciation and a worsening cost of sales ratio.

in equity attributable to owners of the parent.

Note: Exchange rates had a negative impact on operating profit of¥11.1 billion.

(Figures through the fiscal year ended March 31, 2015, are for equity
and return on equity.)’08.3 ’09.3 ’10.3

’11.3

’12.3

’13.3

’14.3

’15.3

Japanese GAAP

’16.3 ’17.3

ROE’08.3 ’09.3 ’10.3

IFRS

’11.3

’12.3

Japanese GAAP

Proﬁt Attributable to Owners of the Parent
Earnings per share (EPS) (Basic)

’13.3

’14.3

’15.3

’16.3 ’17.3
IFRS

Total shareholder return (TSR) (annualized rate)¥40.6 billion ¥195.31(Up 3.5% year on year)’12.3

Japanese GAAP

Operating Proﬁt
Operating Margin(Down 1.1% year on year)

’11.3

IFRS

Proﬁt Attributable to Owners of the Parent

40.6 (¥ billion)(Up 3.3% year on year)

21.4%

33.3%

(Past 10 years)(Past 5 years)

195.31 (¥)

EPS

Sysmex33.3%
Sysmex
21.4%

Profit increased, due to a reduction in income tax expens-

Due to dividend rises and increases in the share price,TOPIX

es stemming from a reversal of deferred tax liabilities intotal shareholder return (past five years) outpaced TOPIX

14.5%

line with a revised tax treaty between Japan and Germany.

by 18.8 percentage points.

(Figures through the fiscal year ended March 31, 2015, are net income.)
TOPIX

0.8%
’08.3 ’09.3 ’10.3

’11.3

’12.3

Japanese GAAP

19

’13.3

’14.3

’15.3

’16.3 ’17.3

Past 10 years

Past 5 years

IFRS

20

To Our Stakeholders

Sysmex Report 2017

Growth Strategies

Internal Environment: Characteristics and Strengths That Will Enable Growth

Through further growth, we will contribute to
the creation of a fulfilling and healthy society.
External Environment: The Expanding Healthcare Market
In developed countries, healthcare needs have begun toindividual patients’ characteristics.

change dramatically due to technological innovation andadvances in healthcare technologies.
With personalized medicine, for example, it is becom-

Meanwhile, emerging markets and developing countries continue to invest in healthcare infrastructure as
their economies grow, causing the market to expand.

ing possible to select eﬀective treatment methods based

Various countries are also calling for increases in basic

on individual patient characteristics. Once personalized

healthcare, such as the establishment of medical insur-

medicine is realized and popularized, not only will theance systems, hospitals and infrastructure. The market isquality of patient treatment increase, but it will become

also expected to grow as populations continue to expand.

possible to curb healthcare costs by eliminating theSysmex has unique characteristics and strengths thatto realize medium- to long-term growth by leveraging

support sustainable growth. We are rolling out measuresthese strengths.

A Business Model That Generates Stable Earnings

Highly Competitive

The healthcare industry tends to be “defensive,” in theSysmex enjoys the leading share of the global market insense that healthcare demand is unaﬀected by economic

the hematology, hemostasis and urinalysis (sediment)

performance. Furthermore, IVD requires the use of reagentsﬁelds. With IVD demand increasing, particularly in emerg-

each time a test is performed, and services and support are

ing markets, we expect high levels of growth to continue

needed in order to ensure stable instrument operations.

in each of these ﬁelds.

For these reasons, Sysmex can expect stable earnings tocontinue after an instrument is purchased, as the Company
Testing ﬁeld

continues to provide reagents, services and support.

($ million)

Support Services

In individual disease categories, measures to counter

administration of unnecessary drugs. The role of testing in

infectious disease are becoming an international issue,

healthcare is growing, as testing is required to determine

prompting demand to test for malaria and other diseases.

+

Reagents
Total Sales

 Changing Healthcare Needs
Developing Countries

Healthcare Needs

Emerging Markets

Developed Countries+

Putting in place healthcare infrastructure

Better access to healthcare

Eradication of infectious disease

Curtailing healthcare costs

Compositionof Sales(Fiscal year
ended March 31,
2017)

3,100

6%

63.8%

Hemostasis

1,800

5%

16.4%

Urinalysis
Of which,
sediment urinalysis

1,000
320

6%

Immunochemistry

18,0006%

3.2%

Clinical chemistry

7,400

5%

1.4%

Others(genes, blood sugar, etc.)

21,700—8.8%

IVD market

53,000

6%

—

6.4%

Note: Sysmex’s assumptions

Year 2

Year 3

No. 1 Share of
the Global Market

Year 4 ȉȉȉȉ(In hemostasis, the ﬁgures are the total including
Siemens. Urinalysis indicates sediment testing.)

Extending healthy lifespans

Realizing personalized medicine

MarketGrowthRate

Hematology

Instruments

Year 1(medical institutions, medical insurance systems)

MarketScale

A Sales and Support Structure Covering
More than 190 Countries

Unique Technological Capabilities

We have created a structure tailored to the character-enables us to create unique instruments, reagents andistics of individual regions that delivers products andsoftware. Another major characteristic is our three diﬀer-

services in more than 190 countries. We leverage thisent technology platforms: cells, genes, and proteins.

Sysmex has specialists in a variety of ﬁelds. This strength

strength to bring newly developed products to the global
market quickly.
Changes in theExternal
Environment

Economic growth

Rising populations

Outbreaks of infectious disease(malaria, HIV, etc.)

Technological innovation (big data, AI, etc.)

Advances in healthcare technologies(genomic medicine, molecularly targeted drugs, etc.)

Asia Paciﬁc
8.5%

Japan
17.4%

Product Development Capabilities
Instruments

China
24.1%

Net Sales
by Destination

EMEA*
25.9%

Software+(Fiscal year ended
March 31, 2017)

Aging societies

Reagents

Americas24.1%

Technology Platforms
Genes

Cells

Proteins*EMEA: Europe, the Middle East and Africa

21

22

To Our Stakeholders

Sysmex Report 2017

New Mid-Term Management Plan

Long-Term Management Targets

Group Corporate
Philosophy

Long-Term
Management
Targets

A Unique & Global Healthcare Testing Company(2020)

Sysmex has formulated a mid-term management plan

we are investing aggressively in areas positioned as ourconcluding in the ﬁscal year ending March 31, 2020. We

next core businesses, which will drive Sysmex in theare working to reinforce proﬁtability in core businesses,

future. Furthermore, we are promoting reforms to ensure

which are central to our current operations. In addition,

sustainable growth from 2020 onward.

 Mid-Term Management Plan Overview (Announced in May 2017)
Net sales
Targets for the
Fiscal Year Ending
March 31, 2020

Operating proﬁt

ROE

Operating cash ﬂow¥350.0 billion ¥72.0 billion or20%
¥55.0 billion
moreFree cash ﬂow¥30.0 billion

Assumed exchange rate: 1USD=¥110.0, 1EUR=¥115.0, 1CNY=¥16.0

Mid-Term
Management Plan

 Sales by BusinessLong-Term Management Plan Positioning

Undisputed Global Leader in Hematology, Hemostasis and Urinalysis(Including alliances)

We will build the earnings foundation to support further Group growth in the Company’s core businesses.

A Leading Company in the Asian in Vitro Diagnostics (IVD) Market
We will leverage our geographic advantage to build a solid position in the Asian market in immunochemistry
and other growth fields, as well as hematology.

12Strengthen
proﬁtability(core businesses)

In core businesses, we aim to boost
proﬁtability in hematology, hemostasis
and urinalysis— in which we are highly
competitive—and in the immunochemistryﬁeld, where growth is expected toaccelerate.

Hematology

An Attractive Company Providing Value and Conﬁdence

23

OthersLife scienceCorebusinesses

Hemostasis

Hemostasis

Immunochemistry
P25

3

Other new ﬁelds
P27

Hematology

Promote reforms

We will enhance manufacturing speed and quality, reinforce our IT foundation, strengthen
human resource cultivation and management, and invest in other reforms.

Manufacturing

Through optimal teamwork throughout the Group, we aim to be a corporate entity that conducts highly
efficient and swift management.

¥249.8 billion

Urinalysis

We aim to become a highly attractive company to diverse stakeholders that offers value and reassurance.

One Sysmex Carrying Out High-Speed Management

Next corebusinesses

Next core
Immunochemistry

Flow cytometry (FCM)

Urinalysis

A Leading Global Player Making a Contribution to Personalized Medicine
By augmenting value in testing (diagnostics) based on leading-edge technologies, we will accelerate Group
growth and establish our global position.

Invest in growth(next core businesses)

We are creating technologies for testingthat will satisfy unmet medical needs andinvesting in next core businesses that will
drive further growth.

A Unique and Competitive Player in the Immunochemistry Field
We will harness unique strengths that other companies cannot emulate and drive Group growth over the
medium term.

¥350.0 billion

IT foundation

Human resource
cultivationand management
P30

2017.32020.3(target)24

To Our Stakeholders

1

Sysmex Report 2017

New Mid-Term Management Plan
Reinforcing Proﬁtability to Achieve Further Growth (Core Businesses)

Hematology Field

Hemostasis Field

Sysmex earned the No. 1 share of the global market in thein June 2017) in emerging markets and other areas where

Based on our global alliance with Siemens Healthcare

hematology ﬁeld in 2007 by developing high-quality prod-

market growth is anticipated. In response to rising de-

Diagnostics, we have achieved the No. 1 share of theucts and oﬀering high levels of productivity, particularly

mand, we are transitioning to local reagent production

global market by taking advantage of each other’sfor IT and system products. We continued to increase ourand reinforcing our ability to provide a stable supply ofstrengths. In the future, we plan to accelerate business inmarket share even further through sales of the XN Series,

reagents.

this ﬁeld by introducing ﬁbrin reagents used in testing for

our ﬂagship model, and by providing services and support
that achieved high levels of customer satisfaction. Going Sales¥53.0 billion¥40.9 billion+¥12.1 billion

clotting abnormalities and thrombosis, thereby increas-

 Salesing proﬁtability.

2017.32020.3

forward, we intend to further improve laboratory workﬂows through the space-saving new XN Series (launched¥201.0 billion¥159.4 billion+¥41.6 billion

 Strengthen Proﬁtability in the Hematology Field
High-quality
products
Service and support
that realize
high customer
satisfaction levels
Stable supplyof reagents2017.32020.3

Undisputed No. 1 in
the United States and otherdeveloped countries
CS-5100™

CS-2500™/CS-2400™

CS-1600™

Realization of high growth inemerging markets

Immunochemistry Field
XN-9100™

Urinalysis Field
Sysmex obtained the No. 1 share of the global market

In the immunochemistry ﬁeld, which represents the larg-

HISCL Series, mainly in Japan and China. By accelerating

est IVD market, we are focusing our activities on Asia. Our

market introductions in other Asian countries, we aim toapproach here is to expand our business by concentrat-

boost the number of instruments in operation further. By

ing on measurement parameters that Sysmex is uniquely

also expanding our reagent portfolio (particularly in theable to oﬀer. In the past few years, we have seen a steadyhepatic disease domain), we will achieve higher sales andin the sediment urinalysis ﬁeld through sales of the UF

increase in the number of instruments in operation,

improve proﬁtability.

Series, which was the ﬁrst in the world to utilize ﬂow

thanks to the strength of our sales promotions for the Sales

cytometry* in this ﬁeld. To augment our presence further, in January 2016 we entered a business alliance with

¥16.1 billion

EIKEN CHEMICAL CO., LTD., to expand our portfolio of
urine chemistry analyzers and realize increased eﬃciency¥28.0 billion

 Sales+¥11.9 billion

2017.32020.3¥24.0 billion

through integrated operations in the urinalysis ﬁeld

¥8.0 billion

including chemistry, sediment and imaging instruments.

+¥16.0 billion

Although it is taking time to acquire regulatory
approval, to date we have put a system in place for sales

HISCL™-5000

2017.3

Reagents

2020.3promotion. Going forward, we will we aim to take the No.
 Expanding Business and Improving Proﬁtability in the Immunochemistry Field

1 share of the market for the entire urinalysis ﬁeld, including urine chemistry and sedimentation. We are strength-

Japan, China and Asia Regions

ening our activities in this area, including improving theurinalysis work ﬂow to achieve high levels of productivity.
* Flow cytometry: Method involving the ﬂow dispersion of minute particles and the use of laser light to optically analyze the minute ﬂows.
Used primarily to observe individual cells

Increasing reagent parameters
U-WAM™ work
area information
management
systemValidation25

UD-10™ imaging
UF-5000™
UC-3500™ urine
unit for formed
analyzer ofchemistry analyzer
elements in urine formed elements(For overseas
in urinesale only)

Sediment urinalysis

Urinechemistry

Increase in the number of
instruments in routine operation+y Augment general-purpose
parametersy Expand business in the hepaticdisease domainy Increase unique parameters+

Reduce costof sales26

To Our Stakeholders

2

Sysmex Report 2017

New Mid-Term Management Plan
Investing in Growth to Reform Our Business Portfolio
 Sales(Next core businesses)

To expand the next core businesses that will serve as theInterview with the Executive in Charge of Next Core Businesses

engines of future growth, Sysmex is working to augment
the life science business, construct platforms for the FCM¥25.0 billion

business and pursue commercialization in other new ﬁelds

Thinking of the lives we help
through new testing motivates me.
Kaoru Asanoof business.

¥6.3 billion+¥18.7 billion

2017.32020.3

Life Science Business

Member of the Managing Board andSenior Executive Oﬃcer
Senior Managing Director

Sysmex GroupR&D Strategic Planning, Next-Core Business

SysmexReforming Our Business Portfolio

The Challenge of Commercialization

To continue growing over the medium to long term, we

Creating and commercializing technologies is no easy

have positioned next core businesses as new businessprocess. However, because Sysmex is Japan’s leading

domains in which we will leverage our unique technolo-company in the IVD ﬁeld, we receive numerous oﬀers for

gies, and aim to reform our future business portfolio.

cooperation from research institutions, universities andCooperationpels our R&D forward. Sysmex already provides sales andTo succeed in our next core businesses, it is important toservice in more than 190 countries, and we have built up

adopt a perspective that asks how we can provide value

a global network for obtaining regulatory approval. Theseto society. For instance, our current focus is on liquid

factors are extremely important strengths in accelerating

biopsy, which is a tool for contributing to the realization

the global rollout of products we have commercialized.

of personalized medicine. Once this is realized, it will

Sysmex
Inostics
Lab Assay Business

Customers

Customers

Oxford Gene
Technology
IVD Business

Cytogenic Testing Business

Customers

Customers

The life science business is a key next core business, in IVD (Reagent) Business

which we will engage mainly in gene testing. Gene testing

In the gene analysis we provide as a lab assay service,

become possible to select optimal treatment regimens

The Power to Surmount Issues

involves testing to diagnose gene-related diseases andultimately we hope to oﬀer IVD reagents that will allow any

for individual patients, which has the beneﬁt of providing

The power to resolve issues is a strong source of motiva-

drug compatibility. Based on these business characteris-

medical institution to perform such measurements them-eﬀective treatment. Improving treatment will link to thetion and passion for our employees, without which it

tics, Sysmex will develop the following three businesses.

selves. Sysmex’s system for the rapid detection of breast

curtailment of healthcare costs, which means making anwould be impossible to achieve our goals.

extremely large contribution to society.

cancer lymph node metastasis, which uses the OSNA™

To maintain high levels of motivation, it is important Lab Assay (Contracted Sample Analysis) Businessmethod that we developed, is already being conducted by

The challenge that we have taken on, of trying toto provide an environment that encourages employees toState-of-the-art gene analysis requires the use of labora-

many medical institutions through the use of IVD reagents.

address society’s issues, is never-ending. However, thisthink for themselves and allows them the freedom to go

tories with special equipment and specialized staﬀ. Our

In this manner, we are moving forward with the develop-

means more than creating technologies. We must steadily

about their business. I think it is also important to rec-lab assay service provides these to customers. In 2013, wement of IVD reagents that can perform the activities cur-commercialize these individual technologies in order toognize how we are helping patients and contributing toconverted Inostics into a subsidiary. This company possesses

rently being done in laboratories, and we aim to provide

bring new testing into the world.

society by commercializing and bringing to the world the

BEAMing technology for detecting minute quantities ofthese reagents to medical institutions around the world.

technologies we are promoting.

genes circulating in the blood. In 2016, RIKEN GENESIS Reducing Physical and Economic Burdens with Liquid Biopsy
Conventionally: Tissue Analysis (Biopsy)
Direct analysis of
the aﬀected specimen

27

Cooperation

Cooperation

RIKEN
GENESISother companies. This assistance is a major driver that pro-Contributing to Society

Cooperation

Blood Analysis (Liquid Biopsy)
Analysis of
disease-derived
components inthe blood andbodily ﬂuids

Genes
Proteins
Cells

became a subsidiary, which has genome analysis technology

 Cytogenic Testing Businessthat uses next-generation sequencers. These two companies

In 2017, we acquired Oxford Gene Technology (OGT). Thisare undertaking leading-edge gene testing for medical andcompany conducts business in the area of cytogenic testing,research institutions. We are also leveraging synergies withwhich involves testing cells for chromosomal and genetic

these two companies to develop new gene testing for theabnormalities. We plan to develop a new business by com-early detection of cancer, recurrence monitoring and moni-bining OGT’s technologies with Sysmex’s Flow FISH tech-toring the eﬀectiveness of anti-cancer agents.

nology and other automated instruments.

28

To Our Stakeholders

Sysmex Report 2017

New Mid-Term Management PlanFCM Business Glucose Patch Test

FCM is a technology for ﬂowing minute particles along

We are developing a test (glucose patch test) that enables

channels and optically analyzing the individual particles as

Flow Cytometry (FCM) Field

the status of postprandial hyperglycemia to be measured
without blood sampling. The test is aimed at the early de-they ﬂow through them. These basic principles are used in

tection of diabetes, a typical lifestyle disease. We are work-

Sysmex’s hematology and urinalysis analyzers.
This FCM technology can be used for clinical FCM

Clinical FCM

Research and Industry FCM

ing toward the commercialization of this test, which enables(clinical testing to perform detailed analysis in diagnosing

Clinical testing(testing forleukemia, malignant
lymphoma, HIV, etc.)

y Research FCM(Analysis of cell function, etc.)
y Industry FCM(Quality control of food andbeverages, etc.)

the relatively simple determination of postprandial hyper-

leukemia and malignant lymphoma), industry FCM (usedin the quality control of food and beverages) and research
FCM (analyzing the function of cultured cells and other Result of Introduction
Postprandial
hyperglycemia
monitoring without
blood sampling

Reduces burden on patient
Lowers number ofhours worked byhealthcare professionals

glycemia and can help improve lifestyle habits (eating).
 Minimally Invasive Postprandial Glycemia Measurement Service

research applications).

Healthcare institution (health checkups, health check centers)

In these ﬁelds, we are combining our own technologies with the FCM technologies possessed by Partec,

Usual tests

which we converted to a subsidiary in 2013. As a result,

EatingSamplemeasurement

Risk determination
Lifestyle guidance

Improved
lifestyle habits

we expect to generate new value in the FCM ﬁeld.

3

Other New Fields
 Ultrahigh-Sensitivity HISCL™

Promoting Reforms to Lead GrowthBased on Sysmex’s HISCL™ immunochemistry analyzer,
using the immune complex transfer method* has enabled

Manufacturing

IT Foundation

us to detect minute quantities of proteins circulating in

Going forward, we will enhance manufacturing speed andTo optimize business processes, we will continue investing

the blood—something that was not previously possible.

quality, which will support further growth. For example,

to strengthen our IT foundation. For example, we will use

Going forward, we plan to commercialize this system forduring the period of our current mid-term management

IT to boost productivity by optimizing our supply chain

application in a host of diseases, such as using blood test-

plan we will increase our ability to develop and produce

and engineering chain processes.

ing (liquid biopsy) for Alzheimer’s dementia.

bio-diagnostic reagents, which should lead to growth in* Immune complex transfer method: A technology for using nonspeciﬁc
adsorption to greatly reduce background noise

the immunochemistry business. Furthermore, as we take

Human Resource Management

seriously our responsibility to provide products and servic-

Sysmex considers people an important management

es to customers, we intend to strengthen our systems forresource necessary for sustainable growth, and we invest

maintaining customer trust by providing a stable supply ofin our human resources accordingly. In particular, we are

high-quality products.

stepping up our recruitment and cultivation of human

Ultrahigh-sensitivity HISCL™
 Cervical Cancer Screening System

We developed the LC-1000™ exfoliative cell analyzer toincrease the eﬃciency of cervical cancer screening and

As one aspect of these eﬀorts, in 2017 we expanded

other cytological examinations. Using this instrument to

our US reagent factory to 1.8 times its former capacity,

test for abnormalities in a cell’s nucleic DNA volume andenhancing our ability to provide a stable supply ofin cell morphology makes it possible to detect abnormal

Group growth and highly specialized personnel.
To create an organization that makes use of diverse
specialized human resources, we are conducting diversity

reagents in the Americas.

cells through cytology. The method currently mainstream

resources who are next-generation leaders that will drive

training targeting people at manager level and above.

in cervical cancer requires using a microscope to test cells
taken from the cervix. Using our instrument in combination allows for more eﬃcient testing.
US reagent factoryLC-1000™ exfoliative cell analyzer

Management
training

29

30

Sysmex Report 2017

Business Activities

We are creating frameworks to generate
and provide value in response to diverse
market needs.

Framework for Generating Value

Customers (Hospitals, Commercial Labs, Research Institutions, etc.)

Sysmex creates its own global systems, ranging from R&D to manufacturing, sales, and services and support.
Through these systems, we ascertain customers’ issues and needs, which we quickly incorporate into our R&D.
In addition to high-quality instruments, reagents and software that reﬂect these issues and needs, we provide
high-value-added system products and online support. These eﬀorts have earned us a strong reputation with

Customer Input
Sales

Customer Input
Supportcustomers around the world.

R&D

Procurement, Manufacturing and Logistics
Instruments
High-Quality Instrument
Manufacturing System(Made in Japan)

Instruments
Reagents

Software
Manufacturing That Uses IT

Three Technology Platforms

Reagents

Genes Cells Proteins

Global Reagent Production Structure

Global R&D Structure+
Open Innovation

Services and Support

Sales Structure Tailored to
Regional Characteristics
Direct Sales, Indirect Sales

Service Structure to Support Environments
That Enable Testing with Peace of Mind

Solution Proposals

Quality Control

Services Using IT

Failure Prediction
Training
Scientiﬁc Support to Expand Clinical Value

Provision of Scientiﬁc Information
Workﬂow Improvement Proposals

Contributing to Increases in Healthcare Quality

Production at Nine Factories in Seven Countries

P33

31

Network for Delivering Products inMore than 190 Countries

Technological Capabilities for
the Internal Development of Instruments,
Reagents and Software

Sales

P35

P37

P37

32

Business Activities

Sysmex Report 2017

Research and Development

Sysmex leverages its proprietary technologies toresolve the healthcare issues society faces andcontribute to the realization of a healthy society.
R&D Vision and Directions

Diverse Human Resources and a Global System

important theme. Genes, proteins and cells in blood andThree Technology Platforms

bodily ﬂuids contain information about aﬀected parts ofBased on the “Sysmex Way,” the corporate philosophy ofSysmex’s R&D divisions include human resources with

Sysmex’s eﬀorts to improve IVD test quality at the micro-

the body. In recent years, highly sensitive analysis has

the Sysmex Group, our R&D aims to contribute to society

diverse specializations, such as mechanical engineering,scopic level and combine a wide range of technologies

made it possible to perform tests and obtain results equiv-

through the generation of new diagnostic technologies.

information science, electronic engineering, chemistry,

have led to the establishment of technologies for particle

alent to the information available from resecting tissue

We are currently undertaking R&D on a variety of

applied physics, biology and other areas. We utilize theirmeasurement, ﬂuid control and detection.

from the aﬀected parts of a patient’s body. Liquid biopsy isthemes: extending healthy lifespans by taking on the chal-strengths to create the products needed for diagnosis,

lenges of unmet medical needs, realizing optimal treat-spanning instruments, reagents and software.

ment and curtailing healthcare costs through personalized
medicine, and contributing to emerging markets andCentered on Technopark, our R&D hub, we are creating a global structure for generating new value. The struc-

We currently have highly sensitive next-generation

gaining attention for its potential in reducing the physical,

technology platforms for measuring genes, cells andmental and economic burden on patients, as well as for its

proteins. As we work toward the realization of personal-

beneﬁts in allowing for repeated testing (monitoring).
Of Sysmex’s technology platforms, in the gene plat-ized medicine, in addition to our own technologies wedeveloping countries through the development of meth-ture comprises R&D centers in Europe and the United

have been redoubling eﬀorts to expand our technologies

form we are concentrating on the realization of genomic

ods for the early diagnosis of infectious diseases.

States and collaborations with such subsidiaries as RIKEN

through proactive M&A and alliance activities. As one as-

medicine1. In the protein platform, we are working on

GENESIS and Sysmex Inostics.

pect of these eﬀorts, in 2013 we converted German com-

Alzheimer’s testing and other protein detection using

As a company that has grown on the basis of its
technological prowess, we recognize R&D as a source ofIn addition to expanding our own technology plat-

panies Inostics GmbH and Partec GmbH to our subsidiar-ultrahigh-sensitivity HISCL™. In the cell platform, we are

growth and, accordingly, invest proactively in this area.

forms, we are pursuing open innovation, collaboratingies. In 2016, we converted RIKEN GENESIS to a subsidiary,

working to automate FISH testing2 using imaging FCM

Our R&D expenses totaled ¥15.5 billion in the ﬁscal yearwith domestic and overseas research institutions, universi-

followed by Oxford Gene Technology in 2017.

technology and developing technology for the detection

ended March 31, 2017.

ties and medical institutions. Through these activities, weof circulating tumor cells (CTCs).

acquire new candidates for diagnostic parameters and1

strive to quickly complete advanced and highly valuable

Future Initiatives

diagnostic techniques and reagents.
Sysmex is pursuing R&D toward the realization of liquid

Genomic medicine: The study of individuals’ genome information andthe provision of more eﬃcient and eﬀective disease diagnosis, treatment and prognoses based on these results
2
FISH testing: Testing method that uses ﬂuorescent material binding
only speciﬁc genes to detect target genes within a chromosome

biopsy for personalized medicine, which it considers an Human Resources with Diverse Specialties

 R&D Expenses/R&D Expenses to Net Sales
R&D expenses
R&D expenses to net sales

Mechanics
Intellectual property
14.6

10.7
9.2
8.3

’08.3

9.6

’09.3

11.2
9.7

’10.3

12.3

11.9

12.1

’11.3

8.8

’12.3

Japanese GAAP

8.3

’13.3

’14.3

6.6

’15.3

Electrics

 Sysmex’s Technology Platforms

R&D support

13.2

7.2

Optics15.5 (¥ billion)

15.4

Researchand planning
9.9

Liquids(Fiscal Year Ended
March 31, 2017)

6.2 (%)

6.1

’16.3

Breakdown ofSpecializations among
R&D Personnel’17.3

SoftwareTechnologies gaining
traction inpersonalized medicine(high sensitivity)

Biochemistry

Existing
technologies

IFRS

3
4

33

OncoBEAM™, PSS

MI (molecular imaging)-FCM

Digital HISCL™

Clinical PCR3

Clinical FCM

Ultrahigh-sensitivity HISCL™

OSNA™

FCM4

HISCL™ (chemiluminescence)

Genes

Cells

Proteins

PCR: A gene ampliﬁcation technology for multiplying small quantities of DNA into large amounts
FCM: Method involving the ﬂow dispersion of minute particles and the use of laser light to optically analyze the minute ﬂows. Used primarily to observe
individual cells

34

Business Activities

Sysmex Report 2017

Procurement, Manufacturing and Logistics

We have created an instrument manufacturing system that
pursues high levels of quality and a global reagent production system,enabling us to supply products in more than 190 countries.
Realizing High Quality through a
Proprietary, Made-in-Japan Instrument
Manufacturing System

Another factor underpinning the high quality of ourare used. Sysmex has two reagent factories in Japan andproducts is the quality of our suppliers. We procure mate-seven in six other countries. This arrangement enables us

rials and parts from Japanese suppliers who boast some ofto provide a stable supply to meet demand from custom-

the industry’s best technological capabilities.

ers in locations around the world. Developing this global

We are putting in place a framework to accurately ascer-

network of reagent factories has enabled us to reducetain demand conditions and always be ready to provide a

distribution costs and delivery lead times.

stable supply of instruments swiftly in response to global

Extremely high quality is required of the high-perfor-

As manufactured products pass through this system,

mance, precision testing instruments Sysmex delivers,

they are subjected to our quality control systems, which

and mechanical automation is diﬃcult for many aspects

comply with diﬀerent countries’ legal requirements, asof their manufacture. At the same time, we must manufac-

well as an environmental protection system.

tive globally.
To manufacture excellent products both accurately
and eﬃciently, we employ information technology (IT),For reagents, we are dispersing risk by diversifying

We are expanding the production area of our reagent fac-

our sources of supply for principal ingredients. We are also

have created, Sysmex delivers high-quality, high-value-

tory in the United States to meet growing demand there;transferring production to local factories, thereby address-

added products around the world.

in July 2017 we increased production capacity to 1.8 times

ing supply stability from various angles.

* Only Sysmex Partec’s instruments are manufactured in Germany.

the factory’s former level.

By ensuring a stable supply of products, we are

In line with our growth strategy, we are moving for-using an assembly process in which people are supported

A Reagent Production System That Delivers
a Stable Supply Globallyby technology.
For example, we use a system that provides 3D video

demand ﬂuctuations.

Sysmex has been further expanding its production system.

Through this distinctive “made in Japan*” system weture instruments eﬃciently in order to be cost-competi-

To meet an increase in global demand for reagents,

Optimizing Supply Chain Processes to
Realize a Stable Supply of Products

working to meet our corporate social responsibilities andward with the construction of a bio-diagnostic reagent

further increase the trust invested in us by customers

development base in Japan. Through this location, we aim

around the world.

to accelerate reagent development and production andinstructions for manual processes, which has proven highly eﬀective in boosting quality and productivity. We use

While we concentrate instrument manufacturing in Japan,

Smart Pro, our proprietary manufacturing support system,

the reagents that are required for testing are consumed

to centralize information, manage progress on processes

each time a test is conducted, so we have situated ourand perform quality control.

reagent factories near the markets in which the reagents

Instrument Manufacturing

Reagent Production

Made-in-Japan quality

Produced at nine factories in seven countries

Brand power, reliability

Stable supply

Eﬃcient manufacturing that fuses people and technology

Reduced shipping costs and lead times

×enhance quality in the interest of future growth.

 Global Supply System
Instruments Manufactured in Japan for Delivery around the World
Building a Global Production Structure for Reagents

Japan (Ono)Japan (Seishin)Germany
China (Jinan)

United States

China (Wuxi)

India

Japan (i-Square)
Singapore
BrazilManufacturing that utilizes ICT

35

A production system that realizes stable supply

Instrument factories
Reagent factories

36

Business Activities

Sysmex Report 2017

Sales and Support Services

We are putting structures in place to deliver
high-quality products, service and support tocustomers around the world.
In developing countries, in addition to conducting

Developing a Sales Structure around theWorld Tailored to Regional Characteristics
In 1972, shortly after the Company’s founding, Sysmex

By fully leveraging our diverse product lineup, services,

sales and providing services via distributors, we deliver

experience and expertise, we oﬀer ﬂexible proposals

cally monitoring their operational status and supporting

products through global funds and engage in other activi-

tailored to laboratory requirements. Providing added value

operational safety. This system uses IT to enable Sysmex

ties aimed at boosting local levels of healthcare.

in these ways has enabled our sales approaches to gainstaﬀ to check the status of customer instruments remote-traction throughout the world.

ly and perform failure prediction.

opened its ﬁrst overseas location, in Germany. We haveTo ensure the provision of high-quality services, wedeveloped our operations globally since that time, expand-

Delivering Products and Added Valueto Customers

ing our sales network to the point where we now cover
more than 190 countries.

are stepping up our training of service engineers andWe provide direct sales, service and support in countries and regions that account for nearly 60% of our sales.

In addition to an extensive sales network, our ability toHere, Sysmex employees have increasing opportunities todeliver Sysmex products across a broad area stems frominteract directly with customers to hear their needs anda diverse product lineup tailored to customer needs inthe issues they face.

hematology and other core businesses.

Testing Environment That Instills Conﬁdence
Sysmex products are involved in important decisions inmedical settings, so reducing equipment downtime canhelp to increase customer satisfaction. Since the time of its
founding, Sysmex has placed importance on instilling conﬁdence in its customers through the provision of accurate
test results. For this reason, we have focused on providing
service and support, responding to instrument problems
and answering customers’ questions and requests.
For instance, our Customer Support Center is available to respond swiftly to telephone inquiries. We havealso created a network service called SNCS™ (Sysmex
Network Communication Systems) to provide quality

Also, we go beyond simply selling products. To improvesome regions, working with alliance partners to overcome

the operational eﬀectiveness of our customers, we also

diﬀerences in business practices and other issues. In theseoﬀer testing work ﬂow solutions, providing advice in suchregions, we hold conferences for distributors to enhanceareas as the selection and placement of instruments andtheir understanding of Sysmex’s businesses and products.

the operation of laboratories.

 Customer Assessment in the United States
Sysmex Earns Highest Customer Satisfaction Rating for the Past 11 Years for “Overall Service Performance”
5.6

9.5

5.4

9.0

5.2

8.5

5.0

8.0

4.8

7.5

4.6

7.0

4.4

6.5

4.2

9.29

Sysmex2008
Competitor 1

Scale of 1 to 6 from 2007 to 2012
Scale of 1 to 10 from 2013 to 2017

2009
Competitor 2

2010

2011

Competitor 3

2012
Competitor 4

 Scientiﬁc Support That Accurately Demonstrates

Product Quality
We also concentrate on scientiﬁc activities to enable
customers to accurately utilize the clinical value Sysmex’s
products oﬀer. For example, we provide training to customers who have purchased our products, teaching them
how to use our instruments accurately and carefullycommunicate scientiﬁc information. We also explain tophysicians how to use Sysmex’s unique measurement
parameters in clinical settings. These scientiﬁc support
activities help customers make the most of our productcapabilities. By holding scientiﬁc seminars in emerging
markets and other locations, we help raise the level ofknowledge among healthcare professionals and contributeto increases in the quality of healthcare.

 SNCS™ Network Service
Q

Customer Support Centers

Quality Control Measurement Data
Q Activity Log Data

Customers(Hospitals, Commercial Laboratories)(Network services)
2013

Industry Avg.

distributors and striving to improve service levels.

8.8

6.0

2007

37

Service and Support Activities
That Support High Levels of Satisfaction
with Sysmex Products
 Through an Extensive Service Structure, Providing a

We also conduct indirect sales, service and support incontrol on customer instruments in real time, automati-

2014

2015

2016

2017

Source: IMV ServiceTrak™ 2017 Hematology
Q

Online Quality Control Q Failure Prediction
Q Web Information Services, etc.

38

Business Activities

Sysmex Report 2017

Overview of Business by Geographic Region

Since opening our first overseas location in the 1970s,
we have expanded our business by tailoring operations
to regional characteristics.
Sysmex opened its ﬁrst overseas location, in Germany, in 1972. In 1991, we began oﬀering direct sales, Net Sales by Geographic Region

service and support overseas for the ﬁrst time, in the United Kingdom, and we have developed our opera-(¥ billion)
350

Americastions globally since then.
We currently have upwards of 60 Group companies in more than 40 countries, through which we pro-

China

Japanese GAAP

300

AP

Japan

IFRS
(¥ billion)

vide high-quality products and stable service and support, tailored to regional characteristics, to customers
in more than 190 countries. As a result, our overseas sales ratio for the ﬁscal year ended March 31, 2017,

EMEA

’09.3

’10.3

’11.3

’12.3

’13.3

’14.3

’15.3

’16.3

Americas

20.8

23.3

23.4

25.4

26.8

29.7

38.5

47.0

55.9

56.5

80.9

EMEA

39.1

35.3

36.4

35.2

37.0

39.4

53.1

63.2

68.4

64.9

86.5

China

8.1

10.1

11.8

15.0

19.2

24.4

36.2

49.8

65.1

60.3

89.8

AP

5.0

5.3

5.8

7.1

7.8

9.0

14.7

17.8

20.0

21.1

31.1

Japan*

37.5

37.5

38.5

41.7

43.6

42.9

41.7

43.3

43.0

46.9

61.7

Total

110.7

111.8

116.1

124.6

134.7

145.5

184.5

221.3

252.6 249.8

350.0

250

was 82.6%.
200

150

’20.3
’17.3 (target)

’08.3

100

50

 Net Sales by Destination

Fiscal Year Ended
March 31, 2008

Fiscal Year Ended
March 31, 2017

0’08.3 ’09.3 ’10.3 ’11.3 ’12.3 ’13.3 ’14.3 ’15.3 ’16.3 ’17.3 ’20.3(Mid-term
plan target)
Japanese GAAP

* To ensure high quality, Sysmex manufactures instruments in Japan and exports them to Group
companies overseas. In the graph showing sales by geographic region, figures for Japan do not include
internal sales of instruments and other products.

IFRS

CAGR (%)(¥20.9 billion)

18.9%

Americas: 12.5

 Operating Proﬁt by Geographic Region

24.1% (¥60.1 billion)(¥ billion)

80

Overseas
sales ratio

67.5%(¥39.2 billion)(¥8.1 billion)(¥6.4 billion)

35.4%

7.3%
5.9%

EMEA1:

China:

5.7

25.9% (¥64.6 billion)

82.6%

Americas

25.0

2.1

(¥21.2 billion)

40

17.4% (¥43.4 billion)

30

20

1

EMEA: Europe, the Middle East and Africa

2Asia Paciﬁc

Note: Net sales by destination is deﬁned as the sales amount recorded by Group companies to customers in a particular region. However, net sales bygeographical region refers to the sales amount made by a Group company in a particular location.

100’08.3 ’09.3 ’10.3 ’11.3 ’12.3 ’13.3 ’14.3 ’15.3 ’16.3 ’17.3 ’20.3(Mid-term
plan target)
Japanese GAAP

39

AP

Japan

IFRS

’20.3
’17.3 (target)

’08.3

’09.3

’10.3

’11.3

’12.3

’13.3

’14.3

’15.3

’16.3

Americas

0.9

1.7

2.7

3.2

2.8

2.1

2.4

2.4

1.9

3.2

5.7

EMEA

4.6

5.1

5.3

4.5

5.3

5.7

8.6

5.1

4.3

4.9

7.3

China

0.8

1.3

2.7

2.4

2.3

2.3

4.1

6.8

5.8

3.5

8.6

AP

0.5

0.6

0.8

0.7

0.3

1.0

1.3

1.2

2.3

1.8

3.5

Japan*

7.8

4.6

2.9

6.8

8.6

11.9

20.1

31.1

43.6

35.6

46.7

Reconciliation

0.1

1.5

1.0

0.5

(0.4)

(1.5)

(3.9)

(2.3)

2.5

2.3

0.2

Total

15.0

15.1

15.7

18.2

19.2

21.8

32.8

44.4

60.7

51.7

72.0

50

32.5%

Japan:

China(¥ billion)

14.2
8.5%

EMEA

Japanese GAAP

7060

24.1% (¥60.3 billion)

AP2:(¥35.9 billion)

Overseas
sales ratio

Note: Intragroup transaction prices on instruments and other products produced in Japan are revised asnecessary. These revisions affect operating profit by geographic region but do not influence total
operating profit.

IFRS

40

Business Activities

Sysmex Report 2017

Overview of Business by Geographic Region

Americas
We have acquired a high market share in thehematology field in North America. We aim to achieve
further growth by establishing bases in Central andSouth America.

Ralph Taylor
CEO, Sysmex America, Inc.

Activities in the Fiscal Year Ended March 31, 2017
 Sales80.9 (¥ billion)

55.9 56.5
47.0
38.5
25.4 26.8
20.8 23.3 23.4

’08.3 ’09.3 ’10.3 ’11.3

29.7’12.3 ’13.3 ’14.3 ’15.3 ’16.3 ’17.3 ’20.3(Target)Japanese GAAP Sales rose by double digits on a local currency basis, thanks
to expansion of the hematology field in the United States.
Due to the impact of yen appreciation, however, sales wereup only slightly on a yen basis.
 Operating profit grew, due to the impact of higher sales, atemporary halt in excise taxes, and a revision in intragrouptransaction prices.
 Status by Principal Area
• In the United States, sales increased due to favorable results in
the hematology field stemming from a strategic focus on theWest Coast area and the acquisition of a project from a prominent commercial lab.
• Sales in Central and South America were down due to economic
stagnation in Brazil, although benefiting from the acquisition oflarge-scale tenders in Mexico.

Others3.1%

1.1%

Central andSouth America

10.5%

Hemostasis

4.9%

Hematology

Canada

90.9%

3.9%

Sales byBusiness*

Sales by Area

UnitedStatesIndirect Sales

Direct Sales

85.6%

23.4%

76.6%

Direct andIndirect Sales* Includes sales from Japan to IDEXX (for animals)

IFRS

Market Characteristics
 Sophisticated Activity Called for in North American Market

The North American market comprises the advanced markets of
the United States and Canada; these markets are highly regulated.
Healthcare institutions are spread across a vast area, and thismarket calls for products that provide high levels of productivity
and eﬃciency and capable of delivering clinical value to the end
users. Furthermore, the market requires swift and high-quality
response, so sophisticated and innovative sales and support
services are essential.
 High Potential in the Central and South American Market
Diﬀerent from the North American market, the Central andSouth American market centers on emerging markets and developing countries. At around 600 million people, the population ofthis huge market is double that of North America. In many cases,
customers in this market do not have suﬃcient budgets to purchase the same state-of-the-art technologies and products as indeveloped countries, so the market tends to center on the provision of reasonably priced, high-quality products and services. As
transport infrastructures are less developed, the market emphasizes structures capable of providing products in a stable mannerthat oﬀer high levels of reliability.

41

Urinalysis

Sysmex’s Strengths

LocationsNorth
America

Central andSouth America

Medium- to Long-Term Growth Strategies

 Regional Management Structure Achieving the Group’s Long-Term Management Plan

We have in place robust sales, marketing, and service andsupport structures centered on a regional headquarters. Theseand highly specialized quality assurance and regulatory aﬀairs
departments are Sysmex’s strengths.
 Coverage Across the Vast North American Market
To respond eﬀectively and promptly across this wide salesarea, our services provide virtual instructor-led training, whichis revolutionizing the way we provide training to our customers. We also support our customers by providing scientiﬁc andclinical seminars. We enjoy high levels of customer satisfaction
as a result.
 A Sales and Service Network to Support Business inCentral and South America
Among our strengths in Central and South America are a
distributor network based on long-standing trust-based relationships, plus an extensive support structure that provides
individual distributors with services and support. We haveestablished our own subsidiaries in key countries such as Brazil
and Mexico, where our support structures are made up of
highly specialized local staﬀ.
 A Structure for Providing a Stable Supply of Reagents
To ensure a stable supply of reagents while holding downtransportation costs and reducing lead times, we manufacture
reagents locally at two factories in the United States and Brazil.
This arrangement is a major strength for Sysmex.

To meet the targets of our long-term management plan, we aim
to obtain a No. 1 position in markets we are entering, leveraging
innovation and outstanding customer service in the Americas.
 Aiming to Be No. 1 in Markets We Are Entering
We will reinforce our sales promotion in hematology targetingthe hospital and laboratory market. In addition, we will enhance
our absolute No. 1 position by entering the market for private
medical practitioners. We aim to obtain the No. 1 position in
the urinalysis ﬁeld by oﬀering integrated chemistry and sediment solutions. In the hemostasis ﬁeld, we intend to achieve an
absolute No. 1 position through our alliance with Siemens. We
also plan to enter the market for clinical ﬂow cytometry.
 Bolstering Our Presence in the Central and SouthAmerican Market
In the Central and South American market, we will augment
our presence by establishing our own subsidiaries and enhancing support for distributors, thereby strengthening our sales
and service capabilities.
 Investing in the Human Resources Who Will Support
Sysmex in Its Next Generation
We recognize that human resources are a vital management
asset in the Americas, and we will proactively invest in themaccordingly. We are identifying management candidates
through human resource assessments, developing skills andbuilding personnel-friendly working environments as initiatives
to cultivate the human resources who will support Sysmex inits next generation.

42

Business Activities

Sysmex Report 2017

Overview of Business by Geographic Region

EMEA (Europe, the Middle East and Africa)
We operate in more than 100 countries in this region,
including both developed countries and emerging markets. We are building sales and support service structures tailored to regional characteristics.

Juergen Schulze
President and CEO, Sysmex Europe GmbH

Activities in the Fiscal Year Ended March 31, 2017
 Sales86.5 (¥ billion)
63.2

68.4 64.9

53.1
39.1

39.4
35.3 36.4 35.2 37.0

’08.3 ’09.3 ’10.3 ’11.3’12.3 ’13.3 ’14.3 ’15.3 ’16.3 ’17.3 ’20.3(Target)Japanese GAAPIFRS On a local currency basis, sales rose due to expanded sales
in France, Germany and other developed countries, as wellas to increasing sales in Turkey, Russia and other emerging
markets. However, sales were down on a yen basis, owing to
the impact of yen appreciation.
 Operating profit rose because of a revision in intragroup transaction prices and efforts to constrain SG&A expenses.
 Status by Principal Area
• Sales grew in the ﬁve major countries* on increased sales in theurinalysis and hemostasis ﬁelds in France, spurred by the start of
direct sales, despite the impact of Brexit.
• Sales rose in Eastern Europe and Russia, as a growing installed
instrument base pushed up reagent sales in the hematology andhemostasis fields in Russia.
• In the Middle East and Africa, sales increased due to higher salesof reagents, owing to a higher installed instrument base in the hematology field in Iran and Saudi Arabia.

The EMEA region represents a vast market covering more than
100 countries across Western, Central and Eastern Europe, theMiddle East and Africa. One major characteristic of this wide area
is diversity—in language, culture and climate. The region includes
the developed countries of Europe as well as African and otherdeveloping countries; response to customers’ needs must be
adjusted accordingly.
 Sophisticated Requirements from Markets in
Developed Countries
The region’s developed countries are working to curtail rising
healthcare costs, so increasing the eﬃciency of testing is a key
concern. At the same time, demand for high levels of clinical value
is increasing, calling for the proposal of sophisticated solutions.
 Emphasis on Both High Quality and Price
In emerging markets and developing countries, demand for highend products is growing among healthcare institutions targeting
the wealthy class. Meanwhile, many customers face budgetary
constraints, and their needs center on products that oﬀer highquality but are also inexpensive. English is not the primary language in many parts of the region, making it vital to oﬀer services
and support in many regional languages.

43

15.4%
Urinalysis

70.0%

10.1%

Five majorcountries

5.6%
Middle East, Africa

44.3%

14.6%

4.5%
Hemostasis

OthersHematology

Sales byBusiness*

EasternEurope,Russia8.5%

Indirect Sales

Direct Sales

32.2%

67.8%

Sales by Area

Direct andIndirect Sales

Other partsof Europe* Includes sales from Japan to IDEXX (for animals)

27.0%* Five major countries: Germany, the United Kingdom, France, Spain and Italy

Market Characteristics
 A Diverse Region

OthersSysmex’s Strengths

Locations

Other parts of Europe

Eastern Europe, Russia
Five majorcountries

MiddleEast

Medium- to Long-Term Growth Strategies

 A Sales and Service Structure Encompassing

 Expanding the Product Portfolioa Diverse Region
Sysmex’s ﬁrst move toward direct sales overseas was in the
United Kingdom, and since that time the Company has expanded its direct sales, service and support structures throughout
the EMEA region. We also utilize distributors to conduct sales
and provide services, tailoring our approach to business practices in individual regions. As a result, today we have in place astructure that encompasses the entire EMEA region.
 A Training Structure That Enhances Customer Satisfaction
We have a training structure that delivers excellent customer
service. The Sysmex Academy is a training facility with sevenlocations across the EMEA region. In addition to customers anddistributors, this institution provides training to enhance theskills of Sysmex employees.
 Provision of Solutions to the Customers’ Issues
Rather than simply selling products, we strive to propose solutions that address the issues customers face. We analyze thecurrent status of laboratories to identify any issues, and thenpropose testing work ﬂow improvements that address theseissues, thereby optimizing testing.

In addition to the mainstay hematology market, we are stepping up our market introduction of new urinalysis products.
We are strengthening eﬀorts in the hemostasis ﬁeld throughan alliance with Siemens, and we are working to reform our
product portfolio through an enhanced focus on our next corebusinesses, the ﬂow cytometry and life science businesses.
 Reinforcing the Regional Management Structure
We will speed up decision-making by augmenting our regional
management structure, accelerating business developmentthat is suited to individual areas. Sysmex Europe serves as our
regional headquarters, and we will also establish and delegate
authority to a number of sub-regional headquarters.
 Augmenting Human Resources and Enhancing Motivation
As we consider augmenting human resource management andleadership skills as an important priority, we are developing
our training programs. We are building an attractive workplace through ongoing activities to promote awareness of theSysmex Way and measures to enhance employee motivation.

Africa44

Business Activities

Sysmex Report 2017

Overview of Business by Geographic Region

China
We have led other companies in developing a base ofoperations in this region. We will shore up our position
as the leading company in the IVD domain.

Peng Zuo Hui
President and CEO, Sysmex Shanghai Ltd.

Activities in the Fiscal Year Ended March 31, 2017
 Sales89.8 (¥ billion)
65.1

60.3

49.8
36.2

8.1

10.1

11.8

15.0

’08.3 ’09.3 ’10.3 ’11.3

19.2• In the hematology ﬁeld, reagent sales were up despite lackluster
sales of instruments.
• In the hemostasis field, reagent sales were favorable driven by
growing demand for thrombosis testing.
• In the urinalysis field, sales were up slightly due to higher
reagent sales.
• In the immunochemistry field, sales of reagents grew due to anincrease in the operating instrument base.

24.4’12.3 ’13.3 ’14.3 ’15.3 ’16.3 ’17.3 ’20.3(Target)Japanese GAAP On a local currency basis, sales were up due to higher reagent
sales in each field, despite the impact of distributor inventory
adjustments on sales of instruments. However, sales were
down on a yen basis, due to the impact of yen appreciation.
 The impact of yuan depreciation against the US dollar caused
the price of (dollar-denominated) purchases from Japan torise, prompting a worsening cost of sales ratio and a sharp
fall in operating profit.
 Status by Principal Field

IFRS

Market Characteristics
 A Huge Market with a Population of Around 1.4 Billion People

The healthcare market is expanding signiﬁcantly in China, driven
by rapid economic growth. The number of hospitals per person islower than in Japan, and the creation of healthcare infrastructureis expected to continue increasing. Furthermore, the disparity inhealthcare between metropolitan and rural areas is becoming asocial issue, and the country is considering the introduction of ahealth insurance system.
 Rising Demand for High-End Products
In the IVD domain, rising demand is driving the need for higher
levels of eﬃciency and automation, prompting a switch to highperformance products.
Meanwhile, eﬀorts to curtail healthcare costs have emergedin recent years, against a backdrop of economic deceleration. For
instance, the government has introduced a classiﬁcation system
aimed at raising the eﬃciency of healthcare services. Under thissystem, some patients with mild symptoms or chronic diseases
that had previously received care at Level 3 hospitals are being
relegated to Level 2 or lower hospitals in an eﬀort to distributehealthcare resources. In addition to an increasing number ofLevel 2 and lower hospitals, their patient numbers are also growing. As a result, we anticipate an increasing need for high-end
products.

45

Japan: Approximately

China:

11
times

Population

Approximately

Approximately

130

1,400

million people

million people

Approximately

2.3
times

8,4392

29,4153

This number
is expected
to grow.

Deﬁnition of “hospital” (Japan and China): Medical institution with 20 ormore beds (in-patient facility)
2 Source: Survey of Medical Institution Dynamics, Ministry of Health, Labourand Welfare (March 31, 2017)
3 Source: Statistics by the Ministry of Health, People’s Republic of China(March 31, 2017)
1

Others

6.1%

2.0%

Direct Sales (Hong Kong)
Hematology

Indirect Sales

44.5%

99.0%

1.0%

Urinalysis

12.4%

Sales byBusiness

Direct andIndirect Sales

Hemostasis

35.0%

Sysmex’s Strengths

 Comparison of the Japanese and Chinese Markets

Numberof hospitals1

Immunochemistry

Medium- to Long-Term Growth Strategies

 Robust Business Foundation

 Aiming to Be a Leading IVD Company

Focusing on the growing Chinese market, we have taken thelead over our competitors in setting up structures in the country, such as establishing a reagent factory in Jinan in 1995.
We have built up a robust business foundation. Currently, we
provide products and services throughout China via allianceswith more than 200 sales distributors.
 Abundant Product Lineup
In our core businesses of hematology, urinalysis and hemostasis, we oﬀer a broad-ranging lineup, from compact instruments
to automated, high-end instruments. Furthermore, in 2015 weentered the immunochemistry market as part of our initiatives
to expand our portfolio.
 Excellent Brand Strength
In addition to being trusted for product quality, we have been
holding scientiﬁc seminars in China for more than 20 years.
These proactive eﬀorts have helped to raise the quality of testing and build an excellent brand image for the Company.

In addition to the hematology, hemostasis and urinalysis ﬁelds,
we are building a robust position in the immunochemistry
market, which is growing solidly.
Hematology, Hemostasis and Urinalysis Fields• Our products enjoy a high level of competitiveness in theLevel 3 hospital market, and we will promote the introductionof products to meet needs in this market, as well as
new products.
• To address the rapidly growing Level 2 hospital market, weare creating market-speciﬁc promotional and product sales
schemes.
Immunochemistry Field• We are reinforcing our distributor network to increase thenumber of HISCL™ instruments in routine operation.
• We will reinforce our system for obtaining regulatory approvalwith the aim of increasing the number of reagent parameters.
• We will enhance our IT-based service and support to ascertain
market needs and further increase customer satisfaction.

46

Business Activities

Sysmex Report 2017

Overview of Business by Geographic Region

Asia Pacific
The Asia Pacific market has a population of around 2.4
billion people. Through scientific awareness activities
centered on emerging markets, we are contributing
toward increases in the quality of testing.

Frank Buescher
CEO, Sysmex Asia Paciﬁc Pte Ltd.

Activities in the Fiscal Year Ended March 31, 201717.8

 Sales were up due to increases in the hematology field andfavorable performance in the hemostasis and immunochemistry fields, despite the impact of yen appreciation.
 Operating profit fell as a result of the worsening cost of sales
ratio, as instruments made up a greater proportion of thesales mix and due to the impact of yen appreciation on currencies in the region.
 Status by Principal Area

’12.3 ’13.3 ’14.3 ’15.3 ’16.3 ’17.3 ’20.3(Target)• In Southeast Asia, sales rose due to favorable performance in thehematology ﬁeld in Vietnam and increased sales of instruments in
the hematology and immunochemistry ﬁelds in Indonesia stemming from the introduction of national health insurance.
• In Oceania, sales increased substantially, thanks to the acquisitionof a large-scale project in Australia in the hematology ﬁeld.
• Looking at South Korea and Taiwan, sales decreased in South
Korea, owing to the impact of yen appreciation (but rose on a
local currency basis).

 Sales31.1(¥ billion)
20.0 21.1
14.7

5.0

5.3

5.8

7.1

’08.3 ’09.3 ’10.3 ’11.3

7.8

9.0

Japanese GAAP

Others

1.3%

9.2%
Urinalysis

Hematology

Taiwan, South Korea,
Mongolia

Southeast Asia

Indirect Sales

Direct Sales

68.4%

27.5%

41.6%

56.0%

44.0%

7.4%
Hemostasis

13.7%

Sales byBusiness

Direct andIndirect Sales

Sales by Area

OceaniaSouth Asia

13.7%

17.2%

IFRS

Market Characteristics
 Strong Potential due to Economic Growth

One third of the world’s population lives in the Asia Paciﬁcregion, which is characterized by the scale of its market and its
strong potential. Population expansion and economic growth are
driving increased demand for healthcare.
 Diverse Demand for Healthcare Instruments
Market demand varies by country. The Asia Paciﬁc region includes developed countries as well as developing markets, andindividual countries’ economic levels signiﬁcantly aﬀect theirinvestment in healthcare. In Indonesia and other emerging markets, testing volume is increasing, thanks to the establishment of
national health insurance systems and healthcare infrastructuredevelopment. Here, demand is increasing for relatively inexpensive products that are highly productive. In developing countries,
meanwhile, the emphasis on cost overrides productivity. The
issue in these markets is to raise the level of knowledge among
healthcare professionals.

Sysmex’s Strengths

 Healthcare Expenditure by Population and GDP
Population1

Healthcare
Expenditure asa Percentage of GDP2

India

Approximately
1,340 million people

4.7%

Indonesia

Approximately
260 million people

2.9%

Philippines

Approximately
100 million people

4.7%

ThailandApproximately
70 million people

4.1%

Japan

Approximately
130 million people

10.2%

1
2

47

Immunochemistry

Source: United Nations, World Population Prospects (2017)
Source: World Health Organization (2016)

Medium- to Long-Term Growth Strategies

 A Sales, Service and Support Structure Closely Tailored to Reinforcing Our No. 1 Position in Hematology

the Region
We are promoting direct sales and services in many countries,
so our employees are able to hear customers’ requests directly.
This structure enables us to propose appropriate solutions. We
also employ local distributors elsewhere, such as in developing
countries. Sysmex is promoting sales throughout the AP region
through this combination of direct and indirect sales, according
to regional characteristics.
 Support for Advances in Healthcare Infrastructure
Emerging markets and developing countries make up the
majority of the AP region, and healthcare infrastructures areunderdeveloped in many locations. Making use of scientiﬁcseminars and educational materials is a strategy Sysmex has
pursued over many years, as we are working to enhance healthcare knowledge across the region. We are also engaging ininitiatives in many Asian countries to support quality control
and enhance laboratory quality in other ways. Through these
activities, we are helping to build up the region’s healthcare
infrastructure, as well as reinforce the Sysmex brand.

We will provide new clinical value by developing our XN Series.
In addition to developed countries and emerging markets, wewill propose customer-focused solutions in developing countries, where basic testing is increasing, reinforcing our No. 1
position in hematology.
 Enhancing Our Portfolio
We will promote the market launch of products in the hemostasis, urinalysis, immunochemistry and clinical chemistryﬁelds. We are making progress in applying for approvals of key
parameters in the immunochemistry ﬁeld, introducing HISCL™
and establishing a unique position in the market. Also, by
providing further clinical value, we will reinforce our presencein urinalysis and other ﬁelds.
 Securing Highly Specialized Human Resources
To achieve our strategies, we are working to maintain highly
specialized employees throughout the AP region. We strive toimprove workplace environments, providing places where employees can work pleasantly and become increasingly engaged.
Such eﬀorts have twice earned us awards in Singapore as the“Best Company to Work for in Asia.”48

Business Activities

Sysmex Report 2017

Overview of Business by Geographic Region

Japan (including exports to overseas subsidiaries)
As a leading company in the IVD domain, we aim toboost overall laboratory sophistication and efficiency,
and are working to create new testing parameters.

Iwane Matsui
Senior Executive Officer, Sysmex Corporation
Deputy head of Global Marketing

Activities in the Fiscal Year Ended March 31, 2017
 Sales199.7 (¥ billion)
144.0 140.9
122.9

Intra-Area
Transfers(Exports toGroupAﬃliates,
Others) In the Japan geographic region, sales were down due tothe impact of yen appreciation on exports to Group affiliates (overseas).
 Operating profit fell due to a revision in intragroup transaction prices, one-off factors and the effect of yen appreciation on exports to Group affiliates (overseas).
 Sales by Principal Field• In Japan, sales increased due to favorable reagent sales in
the hematology, urinalysis, immunochemistry and hemostasis
ﬁelds, plus the impact of converting RIKEN GENESIS toa subsidiary.
• Sales of veterinary instruments to IDEXX were up.

103.8
66.8 69.0 66.4

75.7

82.7

Sales toExternal
Customers(IDEXX andOthers)88.1

Others*Hematology

Direct Sales

26.6%

41.7%

100.0%

Sales byBusiness
Immunochemistry

9.4%

Direct andIndirect Sales

Sales to External
Customers (Japan)

Urinalysis’08.3 ’09.3 ’10.3 ’11.3’12.3 ’13.3 ’14.3 ’15.3 ’16.3

Sales toExternal
Customers’17.3 ’20.3 (Japan)

5.3%

17.0%

Sales to External Customers (Japan)* “Others” includes clinical laboratory information systems and other items.

(Target)Japanese GAAP

Hemostasis

IFRS

Market Characteristics
 An Environment Characterized by an Established

Healthcare System
Due to the national health insurance system, Japan has inplace an environment in which all citizens have access to equal
healthcare. In addition, the market is characterized by patients
having the freedom to choose the medical institution where theyreceive care.
 World’s Lowest Rate of Childbirth and Aging Populationan Issue
Against the backdrop of this healthcare system, Japanese life
expectancy is among the world’s highest. However, because of
the low birth rate Japan has a decreasing number of children andthe population is aging, so curtailing healthcare costs is becoming an urgent issue. Under these circumstances, the national
government has begun promoting the functional specialization of
hospitals and regional healthcare alliances.
 Demand for Personalized Medicine
Given the rising cost of drugs and prevalence of advanced medical care for cancer and other illnesses, demand is growing for
personalized medicine that will enable the prediction of medical
eﬀects. In addition, requests for lower-impact surgeries are
increasing, so the market for medical robots is expected to grow.

Sysmex’s Strengths

 Healthcare Costs in Japan

54.0 (¥ trillions)
46.9
40.0
28.5

2000.3

31.4

2005.3

35.3

2010.32015.32021.32026.3(Forecast) (Forecast)

Source: Ministry of Health, Labour and Welfare “Changes in Medical Care
Expenditure” (Fiscal 2015) and “Future Projections of Social SecurityRelated Expenses” (Fiscal 2011)

Reasons Healthcare Costs Are Increasingby ¥1 Trillion per Yearȉ'UXJFRVWV (+ increase in high-priced drugs)ȉIncrease in the number of patients with
FDQFHUDQGRWKHUGLVHDVHV

Medium- to Long-Term Growth Strategies

 Extensive Sales, Service and Support Structure Establish an Overwhelming No. 1 Position in

We have branches and sales oﬃces throughout Japan, and asales, service and support structure that is unmatched by ourcompetitors. In each area, people in charge of sales, scientiﬁc
support and services create value for customers, and we have astrong reputation for the extensive service and support we oﬀer.
 Sharing Customer Input with R&D and
Manufacturing Divisions
Our R&D and manufacturing locations are nearby, facilitating close communication. We have in place a system toshare customer input and reﬂect this information in ourbusiness processes.
 Providing Added Value in Response to Needs in
Medical Settings
Through a combination of high-quality instruments, diverse
reagents, software that enables integrated control of test information, and services and support, we propose total solutions
tailored to diverse needs in healthcare settings. In addition toproviding new value from a scientiﬁc perspective, we propose
testing workﬂow improvements—a strength that contributes toincreases in economic value for medical institutions.

the IVD Market
By reinforcing our core businesses, we intend to further reinforce Sysmex’s position.
• Maintain the undisputed No. 1 position in the hematology
ﬁeld.
• Increase our presence in the integrated urine chemistry andsedimentation market.
• Reinforce the sales promotion of hemostasis ﬁbrin reagents.
• Increase reagent sales through activities adopting parametersspecialized for immunochemistry, hepatic disease and infectious disease.
 Create a New Business Model
We will provide new value through our next core business.
• Contribute to personalized medicine: Establish our brand in
the gene business and the clinical genome market.
• Expand regional healthcare systems: Expand regional healthcare by supporting integrated community care making useof ICT.
• Propose new value to hospital management: Provide newvalue through hospital management consulting.

Precision medicine
Growing need for gene testing

49

50

Business Activities

Sysmex Report 2017

Principal Testing Fields and Products

Hematology Core Business

Urinalysis Core Business

Immunochemistry Core Business

Hematology is a type of screening that counts red, white

Recent years have seen the entry into this business by

Urinalysis can be broadly divided into two types: chem-

Immunochemistry uses antigen–antibody reactions toor other blood cells to determine whether a more detailed

manufacturers from emerging markets, as well as our con-istry urinalysis and sediment urinalysis. The ﬁrst type

test for the presence of HIV and the hepatitis virus, andexamination is necessary. In addition to instruments,

ventional competitors in Europe and the United States.

involves dipping a test paper into urine to determine theto check for cancer. In addition to reagents to test forthese tests require speciﬁc reagents for ongoing use, such

Sysmex is responding by providing an extensive productpresence of sugar, protein or blood. In the second type,

infectious disease and tumor markers, we are augmenting

as for dilution and staining.

portfolio, oﬀering unique clinical value and diﬀerentiat-

formed elements, including blood and other cells, are

our lineup of proprietary reagents to test for liver ﬁbrosis

ing itself from competitors with its support services. As

analyzed. We introduced the world’s ﬁrst urine formed

progression and atopic dermatitis. We are also work-

tion models, used for determining basic parameters, asa result, in 2007 we acquired the top share of the global

sediment analysis system—the UF Series—that uses ﬂow

ing to develop our business in Asia, including Japan andwell as ﬁve-part white blood cell diﬀerentiation models.

market in the hematology ﬁeld, and our share has steadily

cytometry (FCM)*. This series has the leading share of the

China, through sales of the HISCL™ Series fully automatedNumerous reagents are used with these models to deliverrisen since.

Sysmex oﬀers three-part white blood cell diﬀerentia-

global market. Furthermore, we have entered a business

immunochemistry system, which performs highly sensi-

In the ﬁeld of animal testing, we provide IDEXX

alliance with EIKEN CHEMICAL CO., LTD., to expand ourtive, high-speed (17 minutes) assays on minute sample

ranging lineup of system products that can be used forLaboratories, Inc., with hematology analyzers for animals

portfolio of analyzers of urine chemistry, thereby respond-

quantities.

rapid, high-volume testing in large-scale labs.

on an OEM basis.

ing to diverse urinalysis testing needs.

a high degree of clinical signiﬁcance. We also oﬀer a wide-(Five-part white blood cell diﬀerentiation instruments)

XN-Series

XN-L-Series

Reagents
UD-10™
XN-9100™

UF-5000™

UC-3500™
(For overseas
sale only)HISCL™-5000

Information Diversity and Function

XN-1000™

Life Science Next Core Business

XN-550™

(Three-part white blood cell diﬀerentiation instruments)

Reagents

We provide systems that use the OSNA™ method Sysmex
developed to rapidly test for lymph node metastasis. We
also oﬀer assay services such as Curebest™ 95GC Breast,

pocH™-80i

Reagents
XP-300™

Clinical Chemistry Core Businessa service for research use to determine expression levels

Clinical chemistry involves examining the enzymes, sug-of 95 cancer-related gene types, making use of BEAMingars and proteins in the blood to determine the body’s

technology to detect to a high degree of sensitivity genes

nutritional status, liver and kidney functions, and test forthat are present in minute samples of blood.

conditions such as arteriosclerosis. Sysmex has enteredEﬃciency and Handling Capability

alliances with JEOL Ltd. and Furuno Electric Co., Ltd., andis providing sales and support services for their automatedclinical chemistry analyzers, leveraging our own network

Hemostasis Core Business
Hemostasis involves studying the functions of bloodand providing support services for hemostasis products.

coagulation (stopping bleeding), preventing blood from

This combined business now accounts for the leadingclotting too much within blood vessels, and ﬁbrinolysis,

share of the global market in the hemostasis ﬁeld.

in China and other parts of Asia.
RD-100i™

which dissolves clots. Hemostasis testing is performed toReagents

diagnose hemorrhagic diseases (such as hemophilia) andFCM Next Core Businessthrombotic disease, help decide methods of treatment, forUsing ﬂow cytometry (FCM)*, we are developing the clini-monitoring, and to help diagnose the risk of bleeding or

cal FCM domain (providing detailed analysis of diagnoses

blood clotting prior to surgery.

of leukemia and malignant lymphoma), the industry FCM

In 1995, Sysmex concluded a business alliance withdomain (used in quality control for food and other items)

Siemens Healthcare Diagnostics Inc. (previously, Dade
Behring Inc.), forging a synergistic relationship in selling

51

LINOAMP BC™ (reagent)

Reagents
CS-5100™

* FCM: Method involving the ﬂow dispersion of rows of minute particles
and the use of laser light to optically analyze these minute ﬂows. Usedprimarily to observe individual cells

and the research FCM domain (R&D applications such as
analyzing the function of cultured cells).

52

Business Activities

Sysmex Report 2017

User Report: HISCL™-5000 Fully AutomatedImmunochemistry Analyzer

HISCL Introduction Helping to Raise Testing Quality
and Lower Costs
Aﬃliated Hospital of Jining Medical University

Dr. Dong Haixin

Located in the center of Jining, in Shandong
Province, this is a Level 3 general hospital operated under provincial jurisdiction. The hospitalhas healthcare, education, scientiﬁc researchand preventive care functions. It is a large-scale
facility, with 3,100 beds, conducting around 3
million outpatient examinations each year.

Chief of Clinical Laboratory Center
Aﬃliated Hospital of Jining
Medical University

Q. 1

What is the background for
introducing the HISCL?

For some time, our hospital’s laboratory center has
been using Sysmex’s testing instruments and re-an even higher reputation for quality within the hos-information swiftly and accurately for the eight pre-pital. They are earning high marks with the laboratory

surgery immunochemistry parameters in quick tests

center and top management of the hospital.

conducted prior to surgeries, including emergency,
endoscopic, closed and senile osteoporosis surgeries.

you describe a memorable
Q. 3 Would
episode related to the HISCL?

you have any requests
Q. 4 Dofor Sysmex?
Currently, we are very satisﬁed with Sysmex’s products
and services. In addition to the products, in services

I was most impressed by the words of the person inand support we are extremely reassured by user-ori-charge of sales, who said, “If you want to lower costs

ented remote network services, such as the SNCS.

and increase quality, leave it to Sysmex.” And the

As a user of many of your products, our requests

laboratory center realized these results. The labora-

for Sysmex going forward would be that you continue

tory center has a number of immunoassay systems

to provide us with good testing products, bringfrom major global companies, but in an overall com-

numerous new immunochemistry test parameters

productivity increases, and this clinched the decisionparison introducing the HISCL has been a major asset

into the market quickly, and continue working toto introduce the analyzer at our hospital.

in terms of reducing costs and increasing quality.

increase the quality of testing and lower costs.

were some of the benefits of
Q. 2 Whatintroducing the HISCL?

Another memory comes to mind with regard to

Also, the HISCL platform involves Sysmex’s pro-test results. One patient noted that “The results ofprietary test parameters. We would like to collaborate

HCV tests performed at another hospital with a dif-with Sysmex by conducting clinical evaluations, in theferent instrument are diﬀerent from the results I re-aim of establishing unique test indicators that oﬀer

agents for hematology, hemostasis and urinalysis

The HISCL oﬀers a much faster measurement timeceived from your hospital.” However, in the ﬁnal test

high clinical value even more accurately and quickly.

(sediment), and we are highly satisﬁed with Sysmex’s

than other companies’ products, handling all

results at a government medical institution, our test

product quality and services. We had been usingparameters in 17 minutes. On average, each day our

results (those of the HISCL) turned out to be correct.

another company’s instruments for measuring immu-

hospital measures some 2,500 infectious disease

Since that incident, Sysmex’s products have gained

nochemistry tests, but in 2015 we decided to switch

parameters. With four instruments, we can handle all

to an analyzer with infectious disease parameters, inof these in 3.5 hours. In addition, the instruments areorder to increase the laboratory center’s operating

highly sensitive and have a wide measurement range,

Sysmex’s staﬀ all seem to have friendly personali-eﬃciency and quality.

which greatly reduces measurement errors, errone-ties and be professional and enthusiastic about theirous judgments of gray zone samples and the need towork. Naturally, we ﬁrst learned from Sysmex’s sales

a HISCL product brieﬁng in 2015. We were very

remeasure high-value samples. This has resulted inmanager in the immunochemistry ﬁeld about theattracted by the HISCL’s characteristics (high sen-fewer complaints from the clinic. These instruments

HISCL, after which we evaluated and began to use

sitivity, rapid measurement, wide range and minute

have also substantially shortened the amount of time

the product. We were not simply choosing a single

samples), as these were strengths not being oﬀered

required for staﬀ operations and patient medical

brand or a single product. Even more important thanby others, as well as its high productivity. Thereafter,

examinations. Our hospital’s laboratory center has a

the product is the people. We give the people in

we received a proposal from Sysmex and its distribu-

quality policy of “accuracy, high eﬃciency, safety andcharge of sales at Sysmex high marks for providing

tors, learned about its history of use from key opinion

service” in line with the ISO 15189 quality manage-

specialized services and acting as advisors, proposing

leaders within China, and considered introducing thement system, and the HISCL is true to this policy.

optimal solutions based on their understanding of ouranalyzer. In December 2015, we held a public ten-

Furthermore, by introducing the HISCL we have beenlaboratory center.

der. We received numerous bids from major global

able to resolve the problem of how to report thecompanies, but the HISCL ranked highest in terms ofresults of urgent immunochemistry test parameters

We ﬁrst learned fully about the HISCL during

53

in one hour. The instruments provide appropriate test

message would you like to
Q. 5 Whatleave for the person in charge ofsales at Sysmex?

54Sysmex Report 2017

Enhancing Corporate Value

By putting into practice the “Sysmex Way,”
the corporate philosophy for the Sysmex
Group, we are contributing to society andworking to achieve sustainable increases incorporate value.

55

56

Enhancing Corporate Value

Sysmex Report 2017

CSR Management

 Sysmex’s Materiality Items

In the aim of realizing a sustainable society,
Sysmex is endeavoring to resolve the issues facing
society through its business activities.

MaterialityIndirect economic impact

Local communities



Customer health and safetyProduct and service labelingProcurement practices

Supplier environmental assessment

Supplier assessment for labor practices

Supplier human rights assessment

Supplier assessment for impact on society

Employment

Training and education

Diversity and equal opportunityEqual compensation for men and womenProducts and services

Transport

Environmental consideration through the
product lifecycleRaw materials

EnergyReduction in environmental burden throughactivities at business oﬃces



Water



Emission into the atmosphereEﬄuents and wasteGovernanceIndirect economic impactCompliance (environment, society,responsibility for products)

Anti-corruptionAnti-competitive behavior

Responsible provision of products and services

and achieving sustainable growth for the Group. We are

Securing of product quality and safety

Sysmex believes its CSR is to build trust and conﬁdence

currently developing a speciﬁc action plan based on these

among stakeholders by putting into practice the “Sysmex

identiﬁed materiality items and are taking actions accord-

Appropriate disclosure of information
regarding products and services.

Way,” the corporate philosophy for the Sysmex Group. We

ingly. Please see Sysmex’s website for more detailed infor-

have set up various committees, headed by executives, tomation on CSR activities.

 The Process of Identifying Materiality
We analyzed society’s requirements based on international guidelines, such as the GRI Sustainability Reporting
Guidelines (G4)*, the United Nations Sustainability Development Goals (SDGs) and ISO 26000, as well as
screening content from SRI and other assessment bodies. We compared these requirements against the current
state of the Sysmex’s CSR activities, extracting and identifying related aspects.
We then conducted an overall assessment of the related aspects identiﬁed in STEP 1 along two axes: the degree ofimportance for stakeholders (size of impact on decision-making by stakeholders) and, from the perspective of risks
and opportunities, the degree of importance for Sysmex (size of the Company’s impact on the economy, environmentand society). Through this process, we discovered the most important aspects requiring priority initiatives.

STEP 2
Prioritize

STEP 3Conﬁrm Suitability,
Establish Materiality

Provision of a comfortable working
environmentDevelopment of human resources

Promotion of diversity

Environmental consideration

The materiality items organized as a result of STEP 2 were approved at a management meeting chaired by thechairman and CEO.

Governance* GRI Sustainability Reporting Guidelines (G4): Fourth Edition of the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines.

 Sysmex’s Materiality Matrix

ȉ Resolution of medical issues through businessactivities
ȉ Improvement in accessibility to medical
services by means such as familiarizing productsȉ Securing of product quality and safety
ȉ Appropriate disclosure of information
regarding products and services
ȉ Assessment and management of the supply chain
ȉ Provision of a comfortable working environment
ȉ Development of human resourcesȉ Promotion of diversity
ȉ Environmental consideration throughthe product lifecycle
ȉ Reduction in environmental burden throughactivities at business oﬃces
ȉ Corporate governanceȉ Complianceȉ Risk management

Most important
Very important
ImportantDegree of importance for stakeholders

Important

Assessment and management of the
supply chain

Realization of an attractive workplace


STEP 1
Understand andOrganize the Issuesd

Very important

Most important

Degree of importance for the Company

Page Described

P59

Improvement in accessibility to medical services by means such as familiarizing products

In 2017, Sysmex has identiﬁed priority issues (mate-



57



Resolution of medical issues through businessactivities

riality items) with a view to realizing a sustainable society

promote activities according to key CSR-related themes.

SDG Targets

Resolution of medical issues through products
and services

Identifying Materiality Items andDeveloping an Action Plan

G4-Related Perspective

Corporate governanceComplianceRisk management

P61

P63

P62

P65

External Evaluations
Sysmex has earned high third-party praise for its eﬀorts as a sustainable company. For example, we were selected by Corporate Knights
for inclusion in the 2017 Global 100 (The 100 Most Sustainable
Companies in the World). We were 70th in this ranking, and ﬁrst in the
category of “Health Care Equipment & Supplies.” This was the thirdtime we have been selected for this ranking, and the second consecutive year. We have also been chosen for inclusion in well-known
indices of ESG investment, such as the Dow Jones Sustainability World
Index and the FTSE4Good Index, as well as other major indices ofsocially responsible investment (SRI).

58

Enhancing Corporate Value

Sysmex Report 2017

Resolution of Medical Issues through Products and Services

We are contributing toward the resolution of
medical issues by leveraging our unique technologies
and global network.

 Sample Initiative 1:

healthcare is an issue. Responding to malaria and otherto testing needs, and working to provide accurate test

infectious diseases is also an issue. Recognizing suchdata swiftly. In recent years, we have been conducting

issues as common goals for the international commu-

research and development to create advanced, high-valuenity, in September 2015 the United Nations adopted thetesting and diagnosis technologies with a view to realiz-

Sustainable Development Goals (SDGs), which set targets

ing personalized medicine. To boost access to healthcare

related to human health and welfare. Expectations arein emerging markets and developing countries, we are

Helping to Prevent and Diagnose Dementia
Sysmex strives for innovation in the aim of providing
advanced and highly valuable diagnostic technologies.
One such example is the diagnosis of Alzheimer’s disease
through blood testing, an area in which we are pursuing
R&D in collaboration with Eisai Co., Ltd.
Worldwide, the number of people with dementia* isforecast to rise from 46.8 million in 2015 to 74.7 million in
2030. The problem is growing increasingly serious as theworld’s population ages.
Alzheimer’s is one of the most common forms ofdementia, but the level of satisfaction with current treatments is low. While diagnosis of Alzheimer’s disease issometimes made by using tests such as brain imaging andcerebrospinal ﬂuid examinations, various issues exist, suchas the high cost of such testing and the physical burden
placed on patients. By using blood tests to detect minute protein quantities and their structural abnormalities,
which are thought to impact the disease state, Sysmex is
striving to develop products that might aid in early diagnosis and treatment.

growing with respect to global companies’ initiatives topromoting business activities aimed at raising local levels* Source: World Alzheimer Report 2015, Alzheimer’s Disease International

resolve medical issues.

of healthcare.

Expectations on the Resolution of
Medical Issues

Sysmex’s Approach to Resolving
Healthcare Issues

In recent years, against the backdrop of aging populations

In line with our mission of “shaping the advancement of

in developed countries, demand has been increasing tohealthcare,” which is deﬁned in the “Sysmex Way,” thecurtail rising medical expenses and extend healthy lifes-

corporate philosophy of the Sysmex Group, we are work-pans. Meanwhile, in line with economic growth, emerging

ing to create new value. We believe our mission is tomarkets are calling for better healthcare. In developing

address the shared desire of people around the world tocountries, where healthcare infrastructure is unable toremain healthy.

keep pace with population increases, improving access to

We are expanding our product lineup in response

By leveraging our unique technologies and global network spanning more than 190 countries, we are contributing to the resolution of healthcare issues and working tobuild a sustainable society.

Relation to the SDGs
The Sustainable Development Goals (SDGs) adopted by the United Nations consist of 17 goals to be
met by 2030. Goal 3, to “Ensure healthy lives and promote well-being for all at all ages,” targets the following objectives.



59

Products Using Unique Technologies to
Resolve Healthcare Issues

Reduce maternal mortality



Reduce the mortality of children under ﬁve years of age

Eradicate AIDS, tuberculosis, malaria and tackle othercommunicable diseases

Reduce premature mortality from non-communicablediseases

Ensure access to essential healthcare services, medicinesand vaccines
Develop the skills of and conduct training for healthworkers in developing countries

 Sample Initiative 2:

Supporting the Diagnosis of Infectious Disease
Malaria aﬀects some 200 million people around the world,
and is said to cause around 600,000 deaths each year.
Distinguishing tropical malaria, which can lead to death if
the disease becomes serious, from other types of malaria
is an extremely important part of diagnosis and treatment.
However, current testing methods involve microscopebased examinations, which require skilled and experienced
medical professionals. Hence, demand exists for thedevelopment of a new technology for distinguishing anddiagnosing malaria simply and quickly.
Sysmex has developed the XN-30 multiparameter
automated hematology analyzer, which utilizes theCompany’s existing automated hematology analyzer technology to measure red blood cells infected with malarial
plasmodia in approximately one minute. At present, use
is limited to research applications, but going forward weanticipate application in a broad range of areas, from basic
research to clinics.

 Realizing Alzheimer’s Disease Testing throughLiquid Biopsy

Image-based screening

Blood test

Super-resolution
microscope

Spinal ﬂuid test

Ultrahigh-sensitivity HISCL™

Helping to Reduce
the Physical,
Emotional andEconomic Burden on
Patients
 Endemic Areas for Malaria
Individuals aﬀected: 198 million/year
Deaths: 580,000/year

Malaria deaths per 100,000 people (2013)
100 or more

1–9

No malaria transmission

50–99

Fewer than 1

Not applicable

10–49

Estimated malaria deaths equal zero

Source: WHO “World Malaria Report 2014”

XN-30™ multiparameter automatedhematology analyzer

60Enhancing Corporate Value

Sysmex Report 2017

Responsible Provision of Products and Services

Environmental Consideration

As a healthcare company, we strive to increase quality
and ensure the stable supply of products and services.

We engage in environmentally considerate businessactivities and strive to reduce the environmental
impact of products when used by customers.

Building Structures to Enhance Quality andEnsure Stable Supply

Formulating and Pursuing Long-Term
Environmental Objectives

outlines the Company’s fundamental perspective on
selecting business partners and engaging in procurement

emissions from distribution. By providing environmentallyconsiderate products, we are helping to reduce the envi-

transactions. We are building a value chain in accordanceInstilling conﬁdence in its customers and business part-with this policy. In addition, we are working to reinforce

As a company developing its operations globally, Sysmex

ronmental impact of products when used by customers.

ners has been a matter of importance at Sysmex since

our relationships with business partners so that transac-

recognizes increasingly serious environmental issues

For our fully automated analyzers of formed elements inthe time of its founding. Our products are used in clinicaltions are based on their understanding of Sysmex’s busi-

as a topmost priority. Accordingly, we have formulated

urine, launched in 2015, we switched to more environ-

testing, so they play a vital role in protecting people’s lives

ness directions and procurement policy. Also, in the ﬁscal

long-term environmental objectives in the Sysmex Groupment-friendly and safer reagents that eliminate the needand health. Being fully aware of this important responsibil-year ended March 31, 2017, we conducted CSR surveys

Environmental Action Plan (Sysmex Eco-Vision 2020).

for processing waste liquid with neutralizing agents.

ity, Sysmex has put in place systems to ensure productof 280 existing business partners to conﬁrm the status ofand service quality, safety, and stable provision.

their CSR activities.

As part of our environmental consideration related

We are also mounting global initiatives to reduceto products and services, we are transitioning from air

environmental impact at business oﬃces, including mea-

For instance, we have established the Vigilance

to marine transport for overseas exports and optimiz-sures to reduce greenhouse gas emissions and increase

Division to cultivate the sharing of information with theing package sizes in order to increase container loading

the recycling rate.

Constructing a Stable Supply System

aim of augmenting product quality and safety. This division
investigates and analyzes such information from customers, and feeds their analysis results to relevant customers

If testing is interrupted, physicians may become unable towhile also sharing them with design, manufacturing andaccurately diagnose patients. For this reason, it is essential

other related functions, so that these ﬁndings may be ap-

to ensure a stable supply of reagents, which are used eachplied to quality improvement and product development.

time a test is conducted. To prevent reagent supplies frombeing interrupted even in the event of emergency, we are Long-Term Environmental Objectives of the Sysmex Group Environmental Action Plan (Sysmex Eco-Vision 2020) and
Results of the Fiscal Year Ended March 31, 2017
Sysmex Eco-Vision 2020

Environmental consciousness in
product life cycle process Promote eco-friendly products
and service models

reinforcing overseas production and dispersing risk by

Reinforcing Supply Chain Management

increasing the number of suppliers of key ingredients. At
the same time, we are building a system through which

Delivering high-quality products to customers in a stablefactories can provide supplies to each other in emergen-manner requires the cooperation of our business part-cies. We have created an internal BCP manual on productners. Sysmex has formulated a Procurement Policy, which

supply and conduct simulation training.

Ministry of Health, Labour and Welfare
3KDUPDFHXWLFDOVDQG0HGLFDO'HYLVHV$JHQF\

Patients
Efficacy/safety information

Proper testing/diagnosis

Medical technologists and other clinical professionals
Gathering of
efficacy/safety
information

Provision of medical
information
Gathering of efficacy/
safety information

Sales reps

Instructions/guidance

Information provision,
response
Gathering

ReportingInformation sharing,cooperation

Vigilance
division

Information sharing,cooperation

Provision of information
Gathering of efficacy/safety information

Sysmex Group

GatheringPartners both in Japanand overseas

Overseas Group
companiesȉLiterature both from Japan and overseas
ȉ$FDGHPLFLQIRUPDWLRQȉResearch information
ȉInformation on new development

Fiscal Year Ended March 31, 2017: Results and Key Initiatives (Against Base Year)

Results:• Continued working to reduce electricity use and achieve better compactness in thedevelopment of new products• Continued eﬀorts to develop alternatives for animal-derived substances in reagents• By adopting concentrated reagents, decreased reagent switching time and achieved
reduction in waste• To reduce waste, increased the number of instrument varieties employing reusable
packaging materials

Reduce carbon dioxide emissions Result: 32% reduction (4.937t-CO2/hundred million yen)
for logistics by 50%• For exports, promoted shift from air to ocean transport• Optimized product package sizes and conducted loading simulations to increase
container loading eﬃciency

Environmental consciousness atbusiness oﬃces
 Reduce greenhouse gas emissions Result: 27% reduction (7.36t-CO2/hundred million yen)at business oﬃces by 50%• Reduced use of electricity by improving production eﬃciency

Direct reporting

Information provision,
response

Customer
information(per unit of nonconsolidated sales)
Base year: Fiscal year ended March
31, 2011

 Product Quality and Vigilance Control System61

eﬃciency. These eﬀorts have substantially reduced CO2(per unit of consolidated sales)
Base year: Fiscal year ended March
31, 2009

Achieve a recycle rate of 93% orhigher at all business oﬃces
 Reduce water usage at reagent
factories by 10%(per unit of amount of production)
Base year: Fiscal year ended March
31, 2009(Sysmex International Reagents)• Reduced CO2 emissions by using solar power(Reagent factory in Germany, i-Square)
Result: 91.8%• Reused packaging material on purchased items (Sysmex Wuxi)
Result: 18% increase* (25.4m3/thousand boxes)• Reused reverse-osmosis (pure) wastewater through improvement of ultrapure water
plant (Sysmex Asia Paciﬁc)• Reused industrial waste water after treatment (Sysmex India)* The volume of water resources used increased in line with factory expansion and production increases.
We continue with initiatives to increase the efficiency of manufacturing processes.

Please see our website for medium-term objectives and detailed initiatives for reaching the goals outlined in Sysmex Eco-Vision 2020.
http://www.sysmex.co.jp/en/csr/

62

Enhancing Corporate Value

Sysmex Report 2017

Realization of an Attractive Workplace

Sysmex is working to develop diverse humanresources and create an attractive andpleasant working environment.

Promoting Diversity(%)
Category

As part of its initiatives respecting diversity, Sysmex aims
to create a working environment that makes the most of
individual employees’ capabilities without regard to

Percentage ofFemale Managers(Director Level
or Above)

SysmexCorporation
OverallGroup

2015.32016.32017.3

6.5

8.3

8.8

11.6

14.3

16.2

nationality, race, gender, or physical disability.
To encourage the employment of women, we have
put in place a host of leave systems to support a balance
between work and child-rearing, as well as a work-at-homeRealization of an Attractive Workplace

Promoting Global Human Resource
Development

Sysmex considers human resources an important man-system, and opened an in-house daycare center. As a result,the number of female managers at Sysmex Corporation has
risen to 8.8% (up 2.3 percentage points over two years). For

agement resource for achieving sustainable growth, andThroughout the Group, Sysmex has around 8,000

the Group as a whole, this ﬁgure has grown to 16.2%, up

invests in the recruitment and cultivation of diverse human

employees, with overseas employees accounting for more

4.6 percentage points over the same period.

resources. Our human resource development system isthan 55% of this total. We are a global company, with

Sysmex is also introducing barrier-free facilities indesigned to develop skills in an ongoing, planned manner.

Group companies operating in more than 40 countries.

an eﬀort to provide a comfortable working environment

We promote diversity and inclusion, and we have intro-

To promote this globalization and provide opportunities

for people with disabilities. In April 2017, we establishedduced various systems aimed at making the workplace more

for growth to employees around the world, in the ﬁscal

Sysmex Harmony Co., Ltd., as a new company to promotemotivating. We strive to create a working environment thatyear ended March 31, 2015, we formulated a global

the employment of people with disabilities and realize an

maximizes the skills of diverse human resources and pro-human resource development system to facilitate humaninclusive society.

vides individual employees with opportunities for growth.

resource development throughout the Group. In the sameThrough these initiatives, in line with the positioning

year, Sysmex opened the Global Communication Centerof our long-term management targets, we aim to be “anin Japan, as a place for human resource development andattractive company providing value and conﬁdence” to our

exchange. We are promoting initiatives to enhance a sense

employees and other stakeholders.

of unity within the Group, develop next-generation human

To create a working environment amenable to diverse human re-resources, strengthen networks within the Group and foster

sources, we support work-life balance in regions around the world.

cultural understanding.

Employee satisfaction has risen as a result, and we are highly rated

Kids Park, our in-house daycare center

Creating a Working Environment That Maximizes Skills(Third-Party Evaluations)from outside the Company.

Initiatives Targeting Global Human Resource Exchanges
In 2012, we introduced a Global Exchange Program to promote interaction among human resources throughout the Group.
Employees engage in dialogue about the “Sysmex Way,” introduce their regions and visit customers together. These activities help
promote mutual understanding and foster a sense of Group unity. In the ﬁscal year ended March 31, 2017, 20 employees from 11
countries visited Japan as part of this program.

 “Great Place to Work”

Sysmex Europe (2012, 2014, 2016)
Sysmex Brazil (2014)
 “Companies That Care Honor Roll,” a ranking of companies that

Sysmex Brazil receives award as a “Great Place to Work”

contribute to the welfare of employees, their families and the local community
Sysmex America (2009–2017)
 A good company to work for, “HR Asia Best Companies to Work for in Asia 2015”

Comment from a Participant

Sysmex Asia Paciﬁc (2015, 2016)
Sysmex Malaysia (2016)
 Nikkei ranking of “Companies that Motivate People”

Sysmex Corporation (2016) had an overall ranking of 27th out of 462 companies.
Andres Camperos
Sysmex Colombia“Interacting with Sysmex employees from around the world
was a great opportunity to deepen my understanding of theSysmex Way and global business developments.”63

 In 2017, we were recognized for excellence in health management in the large

company division (White 500).
Sysmex Corporation (2017)
 We received the top-level (Level 3) “Eruboshi” mark for promotion of women’s

participation and advancement in the workplace.
Sysmex Corporation (2016)64

Enhancing Corporate Value

Sysmex Report 2017

Corporate Governance Corporate Governance Structure

By enhancing management soundness andtransparency, we aim to maximize
the corporate value of the entire Group.

Shareholder’s Meeting

Election/Dismissal

Managing Board
Members of the Managing Board(Excluding members of the Audit
and Supervisory Committee)

Election/Dismissal

Election/Dismissal

Audit andSupervisory
Committee

Auditing/supervision Members of the Managing Board(Members of the Audit andSupervisory Committee)

Cooperation

Nominating Committee

Management Organizationand enhancing the corporate governance system. We arealso strengthening the Managing Board’s audit and supervi-

Sysmex recognizes that reinforcing corporate governancesory functions by appointing outside members.

is an important management issue. In accordance with the

The management structure currently comprises“Sysmex Way,” the corporate philosophy for the Sysmex

12 members of the Managing Board (of whom four are

Group, we have adopted a structure designed to augment

outside members). Three members of the Managing

management soundness and transparency, as well as

Board are also members of the Audit and Supervisory

increasing management speed and eﬃciency. In June

Committee (of members of the Audit and Supervisory2016, Sysmex transitioned from a company with a Board

Committee, two are outside members of the Managing

of Corporate Auditors to a company with an Audit andBoard). Furthermore, the Company has 18 executive of-Supervisory Committee. By giving Managing Board voting

ﬁcers (of whom six are also members of the Managing

rights to members of the Managing Board who are mem-

Board). In addition, the Company has introduced anbers of the Audit and Supervisory Committee, we are rein-

executive oﬃcer system to speed up its decision-making

forcing the Managing Board’s audit and supervisory func-

on business execution and respond more swiftly to chang-tions, increasing management transparency and objectivity,

es in the business environment.

 Advances in Corporate Governance
’04

’05

’06

’07

’08

’09

’10

’11

’12

’13

’14

’15

’16

2018.3–’17

From June 2016
Company with an Audit andSupervisory Committee

Company with a Board of Corporate Auditors
Management
organization
Adopting Executive Officer System

Members of theManaging Board

Note: Two years for membersof the Audit and Supervisory
Committee

Two years

11

10

Nine

Eight

Internal
Audit
OfficeBusiness Execution

Seven(Of whom,outside members)

Nine

(One)

Accounting
standards

13

From June 2017
12 (one woman)(Four)

Two (out of four standing corporate auditors)

Japanese GAAP

Risk Management Committee

Global Strategy Committee
Steering Committee

Executive Officers

Founding philosophy

IFRS“Sysmex Way,” the corporate philosophy for the Sysmex Group(Fiscal years to March 31)

65

Compliance Committee

Accounting
Auditing

Divisions,
Subsidiaries and Affiliates

Organization

Managing Board

Activities

Members

Deliberate important matters related to management

Global Strategy
Committee

Meetings in the ﬁscal year
ended March 31, 201716
Members of the Managing(rate of attendance:
Board
100%)
Chairman and CEO and13senior executive oﬃcers

Deliberate on the Group’s management direction andmatters of strategic important
Deliberate important matters related to overall Group
Chairman and CEO andoperations as an advisory body to facilitate decision-making
executive oﬃcers
by the Chairman and CEO
Steering Committee(Note) In addition to the above, in April 2017 we began
holding meetings of executive oﬃcers to resolve
Executive oﬃcers
issues on operationally important projects.

Evaluating the Effectiveness of theManaging Board

15—

organizing points at issue, and providing related information necessary to understand the background.

To enhance the eﬀectiveness of the Managing Board,addressing and deliberating the Managing Board’s agenda

the Company conducted a survey of all members of theis appropriate, and individual members of the Managing

Managing Board (including members of the Audit andBoard leverage their knowledge and experience to engage

Supervisory Committee) and evaluated the Managing

in deliberation.
Proposals have been made with regard to matters

Managing Board on the survey’s results. An overview of

introduced by individual members of the Managing Board

the analysis and evaluation of results follows.

to be deliberated by and reported to the Managing Board,(Composition) The scale of the Managing Board and ratio

operation of the Managing Board, and necessary materi-of independent outside members of the Managing Board

als. Regarding these proposals, the Managing Board has

are generally appropriate, both in nature and diversity.

determined that it will respond to operational issues and(Operation) The provision of information necessary tocontinue to discuss medium-to long-term issues.

fully discuss the Managing Board’s agenda is generally apPhilosophy

Accounting
Auditors

Chairman and CEO

Board’s eﬀectiveness based on discussions with theOne
Corporate auditors(out of three standing(outside)
corporate auditors)

Cooperation(Status of Agenda and Deliberation) The time for
One year

Term of office
for members of
the Managing Board

Compensation Committee

Going forward, the Company’s Managing Board will

propriate. To further improve eﬀectiveness, the Company

be evaluated regularly, in the aim of further enhancing

is working to improve the Managing Board’s opera-

its eﬀectiveness.

tion through the distribution of materials beforehand,66Enhancing Corporate Value

Sysmex Report 2017

Corporate Governance

operating performance and responsibility for achievements.

Audit and Supervisory Committee

Compensation for members of the Managing Board (ex-internal and external. Information received through these

Responding to Japan’s Corporate
Governance Codelines is handled anonymously to protect people consulting

Of the three members of the Audit and Supervisorycluding members of the Managing Board who are mem-

Committee, two are outside members of the Managing

bers of the Audit and Supervisory Committee) divides

Sysmex complies with each of the principles of Japan’s

Board. Members of the Audit and Supervisory Committee

broadly into ﬁxed and variable portions. Fixed compensa-

Corporate Governance Code, introduced by the Tokyo

third-party evaluations of our systems for promoting

attend meetings of the Managing Board, as well as oftion is determined on the basis of a member’s position,

Stock Exchange. We publish reports submitted to thecompliance and their operational status. Based on these

the Global Strategy Committee and Steering Committee.

while variable compensation (including stock options)Tokyo Stock Exchange on our website.

results, in the ﬁscal year ended March 31, 2017, we im-

In this way, members of the Audit and Supervisoryvaries depending on performance. Compensation forproved and expanded our internal reporting system toCommittee monitor the appropriate execution of duties

Members of the Managing Board (Audit and Supervisory

include key Sysmex Group companies overseas.

by members of the Managing Board. Depending on theCommittee), corporate auditors and outside members

details of Internal Audit Oﬃce activities, the Audit andof the Managing Board comprises only a ﬁxed portion.

Supervisory Committee is in place to provide instruction

Compensation amounts for members of the Managing

Based on our Group philosophy, the “Sysmex Way,” weto the Internal Audit Oﬃce, as necessary.

Board (excluding members of the Managing Board who

deﬁne our view of compliance as “conducting businessor providing information from any disadvantage.

Compliance
Risk Management

are members of the Audit and Supervisory Committee) are

activities not only in compliance with applicable laws andTo control groupwide risk management activities, Sysmex

with the accounting auditors on the audit plans reportdiscussed and determined by the Managing Board follow-

regulations, but also based on fairness and high ethicalestablished a Risk Management Committee, which is(annual), the audit results reports (annual), and conduct-

ing deliberation by the Compensation Committee.

standards.” In accordance with this deﬁnition, we havechaired by a risk management oﬃcer, the Group’s chief

established a Global Compliance Code, in which particu-

executive in charge of risk management. This committee

larly important conformance rules and behavioral guide-

identiﬁes major risks having the potential to signiﬁcantly

lines for all Group executives and employees to abide by,impact the Group’s business. The committee also moni-and conduct training and work to instill this code. The

tors the risk management status of individual divisions

code describes our thoughts on ethics in relation toand aﬃliated companies and deliberates countermeasuresresearch and development, prevention of bribery andin the event of a crisis with the potential to signiﬁcantly

adherence to international guidelines such as theaﬀect Group management.

The Audit and Supervisory Committee works closely

ing internal control audits related to ﬁnancial reporting by

Fixed compensationexchanging information and opinions as necessary.

42%
Compensation for
Members of
the Managing Board in
the Fiscal Year Ended
March 31, 2017

Executive Compensation(Fiscal Year Ended March 31, 2017)(Excluding Outside
Members)

Sysmex determines executive compensation amounts

Universal Declaration on Human Rights, as well as conVariable compensationand calculation methods by making a clear link between

58% Breakdown of Executive Compensation (Fiscal Year Ended March 31, 2017)

Sysmex has established internal reporting systems

to ensure it can fulﬁll its corporate responsibilities andin Japan and overseas to resolve any compliance issues

supply products and services in a stable manner in thequickly. The “Campanula Lines,” our reporting system

event of a disaster. Our BCPs identify products to be given

in Japan, has two lines for consultation and reporting:provision priority so that our instruments can continue tofunction in a stable manner at healthcare institutions evenin crisis situations. We have also prepared disaster-

Executives Receiving Compensation
Total compensation by category (¥ million)
Total
compensation
Basic
Retirement
Stock options
Bonuses(¥ million)
compensation
beneﬁts

Executive category

Members of the Managing Board(Excluding members of the Audit and Supervisory
Committee) (excluding outside members)
Members of the Managing Board(Members of the Audit and Supervisory Committee)(excluding outside members)
Corporate auditors*(excluding outside corporate auditors)
Outside executives

response regulations and manuals, including basic disasNumber of
executives

ter-response regulations, putting in place systems that
 The “Campanula Lines” Internal Reporting System

638

260

—

377

—

18

18

—

—

—

1

9

9

—

—

—

2

26

26

—

—

—

5

Compliance leaderson the organizations with which it collaborates on R&D
and other testing. We recognize the importance of protecting information such as this, as well as of other impor-

In-house contact

External line
(law firm)

Executives Receiving Total Compensation of ¥100 Million or More

Hisashi Ietsugu

Member of theManaging Board

Company
category

Submitting
company

Amount of compensation by type (¥ million)
Basic
Retirement
Stock options
Bonusescompensation
beneﬁts

59—

tant corporate secrets, and view the leak of such corporate
secrets as a signiﬁcant risk to the Group. Accordingly, we
have in place structures to prevent this risk from material-

Reply

Executive category

enable us to respond swiftly in emergencies.
Sysmex handles data about its customers, as well as

8* The Company was a company with corporate auditors through the ﬁscal year ended March 31, 2016.

Name

Sysmex formulates business continuity plans (BCPs)
for its manufacturing, procurement and other functions

serving the global natural environment.

Total Amount of Executive Compensation by Executive Category, Total Amount by Type of Compensation and Number of67

In the ﬁscal year ended March 31, 2016, we received

129—

Consultation

E-mail,postal mail,telephone

E-mail,Consultation
postal mail,telephoneizing. To clarify our policies on ensuring information safety
Reply

and security, in the ﬁscal year ended March 31, 2017 weformulated consistent global regulations for information

Total compensation (¥ million)

Sysmex Group employees

security for all Group companies, reinforcing organizationalcountermeasures to information leaks and cyber threats.

188(full-time employees, contract employees,
part-time employees, temporary employees)

68Enhancing Corporate Value

Sysmex Report 2017

Corporate GovernanceIR Activities to Enhance Corporate Value

Proactive Disclosure

Sysmex recognizes that investor relations activities are an

Meanwhile, we strive to introduce information about

In addition to ﬁnancial results brieﬁngs and conference

important facet of corporate management, and discloses

our business to individual shareholders and investors in an

calls, in the supplements to its ﬁnancial results Sysmex

appropriate information in a timely manner. By commu-

easy-to-understand manner via shareholder newsletters,

proactively discloses voluntary information such as oper-

nicating directly with shareholders and investors, we have

our website and various video content.

ating performance by geographic region, type of businessalso put in place a system to quickly provide third-party

At brieﬁngs and through shareholder newsletters, weevaluations and requests as feedback to management.

regularly obtain information through questionnaires andsentations, we explain our R&D successes and Sysmex’s

pass on evaluations from our shareholders and the market

future potential.

At meetings with institutional investors and analysts,
we engage proactively on such themes as R&D, sharehold-to our management.

and product category. At our annual technology pre-In the ﬁscal year ended March 31, 2017, we voluntarily

er returns and capital policies, as well as our management

adopted the International Financial Reporting Standards

strategies, business model and medium-term management(IFRS). Our aim is to enhance convenience to shareholders

plans. Although headquartered in Kobe, Sysmex visits

and investors by facilitating the international comparison

 Objectives of Sysmex’s IR Activities

locations including Tokyo, the United States, and European

Company tour for individual shareholders

of ﬁnancial information.

and Asian countries to conduct IR meetings. In the ﬁscal
year ended March 31, 2017, we conducted 325 meetings.

Obtainevaluations andrequests from
capital markets

Sysmex also provides opportunities for direct interaction, such as hosting tours of its facilities and businessoﬃces in Japan. In the ﬁscal year ended March 31, 2017,

 Major Awards (IR Activities)

as an initial trial we held an IR Day at our human resource
Sponsordevelopment center. This event enabled us to provide
fuller explanations on such topics as Sysmex’s corporate
culture, the invisible value generated by our human resources and the business strategy for personalized medicine, which we are focusing on. Also, at our technology
presentation we introduced current R&D projects underway at our R&D facilities.

Enhance corporate
value throughDisseminate
dialoguehigh-quality
information ina timelymanner

Reﬂect promptly
in management
and IR activities

AwardsInstitutional Investor

Ranked in ﬁve categories by Institutional Investor 2017 in the Japanese healthcare and pharmaceuticals category, including “Best CEOs” and “Best IR Professionals”

Japan Investor Relations
Association

20th “IR Grand Prix Award” (only two companies selected out of the 263 participating)

Securities Analysts
Association of Japan

Selected for excellence in disclosure at the 2015 Awards for Excellence in Corporate Disclosure,ranking ﬁrst in the pharmaceuticals category and in excellence in disclosure to individual investors

 Principal IR Events
Event

69

Activities

Technology presentations

Explanations from people in charge of R&D divisions about R&D progress
In the ﬁscal year ended March 31, 2017, we introduced actual instruments at Technopark,
our R&D hub.

Sysmex IR Day(business oﬃce tours)

Every other year
In the ﬁscal year ended March 31, 2017, we provided explanations on the invisible value
generated by Sysmex’s corporate culture, and our human resources and our businessstrategy for personalized medicine.

Overseas facility tours

Every other year
Tours of hospitals and other facilities actually using our products and explanations byexecutives at local subsidiaries about the market and Sysmex’s strengths

Company tours forindividual shareholders

Tours of instrument factories and other business oﬃces

Company brieﬁngs forindividual investors

Company brieﬁngs at major cities throughout Japan by top management and people incharge of IR

IR meetings

Participation in conferences hosted by securities companies, visits to institutional investors
in the United States and European and Asian countries, and meetings with investors andanalysts in Japan and overseas

70Enhancing Corporate Value

Sysmex Report 2017

Members of the Managing Board

Hisashi Ietsugu

Yukio Nakajima

Kaoru Asano

Junzo Yamamoto

Susumu Nishiura

Masayo Takahashi

Chairman and CEO

Member of the Managing Board and Senior
Executive Oﬃcer, Senior Managing Director

Member of the Managing Board and Senior
Executive Oﬃcer, Senior Managing Director

Member of the Managing Board andSenior Executive Oﬃcer, Managing Director

Member of the Managing Board (Outside)
Independent Director

Member of the Managing Board (Outside),
Independent Director

Corporate Business Planning and Administration

R&D Strategic Planning, Next-Core Business

Manufacturing and SCM

Apr. 1973 Joined the Company
Jun. 1999 Member of the Managing Board,
Executive Vice President of Corporate
Business Planning
Apr. 2005 Member of the Managing Board andExecutive Oﬃcer, Vice President ofCorporate Business Planning
Apr. 2009 Member of the Managing Board and Senior
Executive Oﬃcer, Managing Director
Apr. 2013 Member of the Managing Board and Senior
Executive Oﬃcer, Senior Managing Director(current)

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 (current)

Mar. 1980 Joined the Company
Apr. 2011 Executive Oﬃcer, Executive Vice
President of Instrument Production
Apr. 2015 Senior Executive Oﬃcer
Apr. 2017 Senior Executive Oﬃcer, Managing
Director
Jun. 2017 Member of the Managing Board andSenior Executive Oﬃcer, Managing
Director (current)

Apr. 1969 Joined TOA Electric Co., Ltd. (current TOA
Corporation)
Jun. 1998 Member of the Managing Board
Oct. 2004 Member of the Managing Board andSenior Executive Oﬃcer, Managing
Director
Jun. 2008 Member of the Managing Board
and Senior Executive Oﬃcer, Senior
Managing Director
Jun. 2010 Retired from TOA Corporation
Jun. 2013 Joined the Company, Member of theManaging Board (current)

Oct. 1992 Ph.D. of Medicine and AssistantProfessor of Ophthalmology,
Kyoto University Hospital
Oct. 2001 Associate professor, Team Leader ofRetinal Regeneration Project,
Translational Research Center,
Kyoto University Hospital
Apr. 2006 Team Leader, Laboratory for Retinal
Regeneration Research, RIKEN Center for
Developmental Biology, Japan
Nov. 2014 Project Leader, Laboratory for Retinal
Regeneration Research, RIKEN Center for
Developmental Biology, Japan (current)
Jun. 2016 Joined the Company, Member of theManaging Board (current)

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 and Senior
Executive Oﬃcer, Managing Director(Representative Director)
Apr. 1996 Member of the Managing Board
and Senior Executive Oﬃcer, Senior
Managing Director(Representative Director)
Jun. 1996 President and CEO
Apr. 2013 Chairman and CEO (current)

Reasons for Appointing
He was appointed to utilize his abundant experience and deep insight in corporate management for
management of the Company.

Reasons for Appointing
Holding the positions of Chairman and CEO of
the Company, he has managed all of Sysmex andprovided strong leadership for many years. He wasappointed because he will be essential for increasing
the corporate value with his sense of balance,
enabling appropriate supervision and decision-making of the entire management based on his insightand abundant experience and achievements as acorporate manager.

Reasons for Appointing
He has been involved in planning and administration departments, including Corporate Business
Planning, Corporate Business Administration, IR,
HR and General Aﬀairs for many years and has
contributed to the strengthening of the Company’s
management base. He was appointed because hisabundant experience and wide-ranging insight willbe essential for increasing corporate value.

Kenji Tachibana

Kazuya Obe

Mitsuru Watanabe

Yukitoshi Kamao

Koichi Onishi

Kazuhito KajiuraMember of the Managing Board and Senior
Executive Oﬃcer, Senior Managing Director

Member of the Managing Board andSenior Executive Oﬃcer, Managing Director

Member of the Managing Board andSenior Executive Oﬃcer, Managing Director

Member of the Managing Board (Member ofthe Audit and Supervisory Committee)

Business Strategy Development, Core Business

Global Marketing

Scientiﬁc Aﬀairs, Bio-Diagnostics Reagent Technology

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

Mar. 1980 Joined the Company
Apr. 2011 Executive Oﬃcer, Executive Vice
President of IVD Business Development
Apr. 2013 Senior Executive Oﬃcer
Jun. 2014 Member of the Managing Board and Senior
Executive Oﬃcer
Apr. 2015 Member of the Managing Board and Senior
Executive Oﬃcer, Managing Director
Apr. 2017 Member of the Managing Board
and Senior Executive Oﬃcer, Senior
Managing Director (current)

Apr. 1991 Joined the Company
Apr. 1996 President of TOA Medical Electronics(Europe) GmbH(current Sysmex Europe GmbH)
Oct. 2002 Chairman of the Board of Sysmex
Corporation of America(current Sysmex America, Inc.)
Apr. 2005 Executive Oﬃcer, Executive Vice
Chairman & CEO of Sysmex America, Inc.
Jun. 2009 Member of the Managing Board andExecutive Oﬃcer
Apr. 2013 Member of the Managing Board andSenior Executive Oﬃcer, Managing
Director (current)

Mar. 1980 Joined the Company
Apr. 2005 Executive Oﬃcer, Executive Vice
President of R&D Strategic Planning
Jun. 2009 Member of the Managing Board andExecutive Oﬃcer
Apr. 2013 Member of the Managing Board andSenior Executive Oﬃcer, Managing
Director (current)

Mar. 1978 Joined the Company
Apr. 2013 Executive Oﬃcer, Executive Vice
President of Business Administration
Jun. 2016 Member of the Managing Board (Memberof the Audit and Supervisory Committee)(current)

Member of the Managing Board (Outside)(Member of the Audit and Supervisory
Committee), Independent Director
Jul. 1971 Joined Kobe Steel, Ltd.
Jun. 2002 Executive Oﬃcer
Apr. 2004 Managing Executive Oﬃcer
Apr. 2007 Senior Managing Executive Oﬃcer
Jun. 2010 Retired from Senior Managing ExecutiveOﬃcer of Kobe Steel, Ltd.
Jun. 2010 President of Nippon Koshuha Steel Co., Ltd.
Jun. 2013 Executive Corporate Adviser
Jun. 2014 Joined the Company, Corporate Auditor
Jun. 2016 Member of the Managing Board (Memberof the Audit and Supervisory Committee)(current)

Sep. 1972 Joined Tohmatsu Awoki & Co.
(current Deloitte Touche Tohmatsu LLC)
Jun. 1989 Partner, Tohmatsu Awoki & Sanwa(current Deloitte Touche Tohmatsu LLC)
Jan. 2013 Retired from Deloitte Touche
Tohmatsu LLC
Jun. 2016 Joined the Company, Member of theManaging Board (Member of the Audit
and Supervisory Committee) (current)

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

71

Reasons for Appointing
He has been involved in instrument production andsupply chains for many years and has contributed
to strengthening the production system. He wasappointed because his experience and insight will beessential for increasing corporate value.

Reasons for Appointing
He has been involved in international business serving as representatives of several overseas regional
headquarters 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 corporate value.

Reasons for Appointing
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.

Reasons for Appointing
He has been involved in product and market
development for many years and has contributed tobusiness development. He was appointed because
his wide-ranging insight will be essential for increasing corporate value.

Reasons for Appointing
He was appointed to utilize his experience andspecialized expertise related to corporate management, which is necessary to increase the audit andsupervisory functions.

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

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

Reasons for Appointing
He was appointed to contribute to ensuring thesoundness and transparency of the Managing
Board, enhancing its audit oversight functions, andother matters, with his professional expertise andexperience as a certiﬁed public accountant, and his
extensive experience in such as leading and auditing
global companies.

72

Enhancing Corporate Value

Sysmex Report 2017

Messages from Outside Members of the Managing Board

Susumu Nishiura

Masayo Takahashi

Koichi Onishi

Kazuhito KajiuraMember of the Managing Board (Outside)

Member of the Managing Board (Outside)

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

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

I have the sense that Sysmex’s Managing Board practices

Sysmex’s stance is to achieve advances in healthcare

Last year, Sysmex made the transition to a company with

I conduct my operations based on the spirit of acting in-corporate governance through free and lively expression

by consistently embracing new technologies, concepts,

an Audit and Supervisory Committee. By giving voting

dependently according to my own beliefs I have cultivatedthat takes diverse opinions into consideration. As an out-

methods and systems. This is in line with my own

rights to members of the Audit and Supervisory Board,in my many years as a certiﬁed public accountant. On theside member of the Managing Board, I consider my roles

approach toward work. Since being appointed as an out-

their voices are reinforced on the Managing Board. The

Managing Board, in addition to participating actively into be supervising the execution of business by taking intoside member of the Managing Board last year, I have done

Audit and Supervisory Committee is composed of a good

discussions and enhancing accountability, I express myaccount the general shareholders and other stakeholders,

my best to help the Company move forward through its

balance of members with diﬀerent types of experience. In

opinions from the perspective of the legality and suitabil-and enhancing corporate value. To ensure even more

execution of business.

my view, this structure enables the committee to audit the

ity of management activities, as well as timely disclosure,

Sysmex contributes to the advancement of healthcare

business from a variety of angles and function eﬀectively.

with the aims of increasing management eﬃciency andcommunications on the Managing Board and clarify thefrom a diﬀerent perspective than has been evident to date

Due to my many years of experience in manufacturing, myaugmenting the monitoring function. By transitioning todecision-making process.

by companies involved in drug discovery and the develop-

overriding focus on this committee tends toward such ar-

a company with an Audit and Supervisory Committee,

appropriate decisions going forward, I will work to increase

Sysmex has enjoyed substantial growth in its existing

ment of therapies. I see Sysmex’s experience and perfor-

eas as cost control, quality control, health and safety, andSysmex has strengthened authorities and the auditing

businesses, and cannot be easily overtaken by competi-mance from this viewpoint, as well as its forward-looking

environmental disaster prevention. In particular, I consider

function. As an outside member of the Managing Board

tors. Despite this strength, however, I believe that an im-

stance, as major strengths. At the same time, technologi-

operations from the perspective of internal control andand a member of the Audit and Supervisory Committee,

portant topic for the Company will be the ability to quickly

cal breakthroughs occur swiftly nowadays, and the morerisk management.

I will express my opinions energetically to redouble thecreate its next core businesses amid the rapid progress

cutting-edge the technologies, the more important it isin healthcare technologies. As steppingstones to sustain-

for them to begin contributing to corporate performance

proﬁts. In addition to external factors such as exchange

able growth, Sysmex has deﬁned long-term management

as quickly as possible. To ensure sustainable growth into

rates, I think there were also issues with promoting new

targets and formulated a mid-term management plan.

the future, a company requires a spirit of challenge thatbusinesses that will serve as new pillars of growth. To

is highly competitive in hematology and other core busi-

In order to reach these goals, I will endeavor to express

enables it to absorb state-of-the-art technologies in new

expand further, in addition to relying on the president’s

nesses. Even so, expanding and strengthening its next coremyself proactively to ensure that the Company responds

ﬁelds. I hope that Sysmex will remain consistently proac-

outstanding management sense and leadership, I believe

businesses is a matter of some urgency, due to the chang-appropriately in reforms to its business portfolio.

tive and continue to grow by leveraging its strengths.

individual employees need to be more aware of theing management environment in the healthcare business,“Sysmex Way” and go about their business with passion

which is characterized by such factors as the pursuit ofadvances in the world’s healthcare, I will take advantage

and a strong sense of mission toward achieving goals. For

further advances in healthcare and policies for contain-of my own long years of experience in medical settings

my part, I will provide the check to ensure against legal

ing healthcare costs. To this end, the Company needs toand the development of therapies. I also plan to maintainviolations and other negative factors, but in addition I

augment its global communications structure and recruit

my approach of advising management from the objective

consider it necessary for me to audit the Company fromand nurture more global human resources. As an outside

viewpoint of academia and healthcare professionals.

the standpoint of whether the Company is maintaining amember of the Managing Board, I also would suggest theproactive stance.

Company pursue further reforms in the acquisition and

To ensure Sysmex is able to continue contributing toThis year, Sysmex experienced a decline in sales andeﬀectiveness of corporate governance and help realize the“Sysmex Way.”
Sysmex has a high percentage of overseas sales andcultivation of human resources.

7374

Enhancing Corporate Value

Executive Officers

Financial and Other Information

Back row, from left: Tomokazu Yoshida, Mamoru Kubota, John Kershaw, Hiroshi Nagao, Juergen Schulze, Peng Zuo Hui, Kensuke Iizuka
Front row, from left: Keiji Fujimoto, Hiroshi Kanda, Iwane Matsui, Yukio Hamaguchi, Ikuo Otani

Iwane Matsui

Yukio Hamaguchi

Juergen Schulze

Senior Executive Oﬃcer

Executive Oﬃcer

Executive Oﬃcer

Deputy head of Global Marketing

President and CEO,
Sysmex International Reagents Co., Ltd.

President and CEO,
Sysmex Europe GmbH

Keiji Fujimoto

Mamoru Kubota

Executive Oﬃcer

Executive Oﬃcer

Regulatory Aﬀairs & Quality Assurance

Executive Vice President of LS BusinessIkuo Otani

Peng Zuo Hui

Executive Oﬃcer

Executive Oﬃcer

Deputy head of Core BusinessPresident and CEO,
Sysmex Shanghai Ltd.

Hiroshi Kanda
Senior Executive Oﬃcer
Deputy head of Core Business
Executive Vice President of ICH Business
Development

Hiroshi Nagao
Executive Oﬃcer
Executive Vice President of Corporate Business
Administration

John Kershaw
Executive Oﬃcer
Chairman, Sysmex America, Inc.
Deputy head of Core Business

Tomokazu Yoshida

Contents

Executive Oﬃcer

Financial Information

Executive Vice President ofCentral Research Laboratories
MR Business Development

Consolidated Financial and Non-Financial Data (10 Years) ........ 77
Management’s Discussion and Analysis ............................................... 79

Kensuke Iizuka
Executive Oﬃcer
Deputy head of Corporate Business Planningand Administration

Consolidated Statement of Financial Position .................................. 83
Consolidated Statement of Income........................................................ 85
Consolidated Statement of Comprehensive Income ..................... 86
Consolidated Statement of Changes in Equity ................................. 87
Consolidated Statement of Cash Flows................................................ 88

75

76

Financial and Other Information

Sysmex Report 2017

Consolidated Financial and Non-Financial Data (10 Years)
Japanese GAAP

(Billions of yen)

Fiscal years ended March 31

2008

2009

2010

2011

2012

2013

2014

2015

2016

For the year:

IFRS(Billions of yen)

Fiscal years ended March 31

2016

2017

For the year:

Net sales

110.7

111.8

116.1

124.6

134.7

145.5

184.5

221.3

253.1

Net sales

252.6

249.8

Operating income

15.0

15.1

15.7

18.2

19.2

21.8

32.8

44.4

56.9

Operating profit

60.7

51.7

Net income attributable to owners of the parent1

9.1

8.0

9.7

11.4

12.0

14.1

20.5

26.6

36.2

Profit attributable to owners of the parent

39.2

40.6

Capital expenditure

8.2

9.3

4.5

5.8

7.9

8.9

13.3

13.9

13.8

Capital expenditure

13.0

11.8

Depreciation

3.9

7.2

7.0

6.8

7.0

7.9

9.9

11.2

12.2

Depreciation and amortization

12.1

12.3

R&D expenses

9.2

10.7

11.2

12.3

11.9

12.1

13.2

14.6

17.7

R&D expenses

15.4

15.5

Net cash provided by (used in) operating activities

11.6

13.1

21.2

18.1

17.0

25.8

36.5

38.6

39.5

Net cash provided by (used in) operating activities

41.7

32.8

Net cash provided by (used in) investing activities(12.8)(13.5)

(6.6)

(8.9)

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

(1.3)

0.7

(10.0)

(3.4)

(3.8)

(3.1)

(2.8)

(7.5)

(8.7)

Net cash provided by (used in) financing activities(8.7)(10.8)At year-end:

At year-end:
109.0

118.5

120.7

130.0

142.2

173.0

210.7

247.9

267.6

Total assets

263.9

279.8

Cash and cash equivalents, end of year

9.6

9.4

13.8

18.9

21.8

34.3

36.5

50.2

56.4

Cash and cash equivalents, end of year

56.4

57.9

Total equity

79.1

79.8

87.1

94.2

102.5

119.1

146.2

169.5

188.0

Total equity

182.8

210.2

Interest-bearing liabilities

1.0

10.3

2.5

1.9

1.0

0.7

1.9

0.7

1.3

1.3

1.1

Total assets

Interest-bearing liabilities(Yen)

Per share data:
1,540.9

1,548.1

1,684.9

910.63990.5

1,151.3

703.73

812.3

899.5

Equity attributable to owners of the parent (yen)879.32

1,005.86

Net income (basic) (yen)

178.9

156.7

190.7

111.13

116.8

137.5

99.43

128.4

174.4

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

Net income (diluted) (yen)

178.3

156.4

190.5

110.93

116.6

137.0

99.13

128.0

173.7

Profit attributable to owners of the parent (diluted) (yen)188.30194.743

3

Equity (yen)2

Cash dividends applicable to the year (yen)

12.00

12.50

14.00

15.00

17.00

20.00

27.00

38.00

52.00

Cash dividends applicable to the year

52.00

58.00

Dividend ratio (%)

26.8

31.9

29.4

27.0

29.1

29.1

27.1

29.6

29.8

Dividend ratio (%)

27.5

29.7

Other data:

Other data:

Operating margin (%)

13.6

13.5

13.5

14.7

14.3

15.0

17.8

20.1

22.5

Operating margin (%)

24.0

20.7

Overseas sales ratio (%)

67.5

68.0

68.3

69.1

70.5

72.4

78.2

81.7

84.3

Overseas sales ratio (%)

84.2

82.6

Equity ratio (%)

72.2

66.8

71.5

71.9

71.6

68.7

69.2

68.0

69.9

Equity ratio (%)

69.3

74.8

12.2

10.1

11.8

12.7

12.3

12.8

15.6

17.0

20.4

Return on equity (ROE) (%)

23.1

20.7

Return on equity (ROE) (%)
4

Return on assets (ROA) (%)

Number of employees

5

8.7

7.0

8.2

9.1

8.8

9.0

10.7

11.6

14.1

Return on assets (ROA) (%)

15.5

16.3

3,916

4,148

4,576

4,957

5,521

5,594

6,211

6,742

7,446

Number of employees

7,446

7,930

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

Female managers (director level or above) (%)

—

—

—

—

—

—

10.6

11.6

14.3

Female managers (director level or above) (%)

14.3

16.2

Greenhouse gas emissions at business offices perunit of consolidated sales6 (t-CO2/¥100 million)

—

10.08

10.86

9.53

8.65

8.63

7.98

7.28

7.26

Greenhouse gas emissions at business offices perunit of consolidated sales6 (t-CO2/¥100 million)

7.26

7.36

350

339

360

424

331

295

302

307

317

Patent applications

317

344

215

234

Patent applications
7

Of which, overseas

195

185

206

283

230

195

205

1

5

2

6

Figures shown for fiscal years ended on or before March 31, 2015 are “net income.
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

77

(Yen)

Per share data:

217

215

7

Of which, overseas

ROA = Profit attributable to owners of the parent/Total assets (Yearly Average)×100
Main business offices in Japan, instrument factories in Japan, reagent factories in Japan, main overseas locations and overseas reagent factories
7
Figures shown for fiscal years ended on or after March 31, 2012 are including figures of countries to transfer international patent application

78

Financial and Other Information

Sysmex Report 2017Management’s Discussion and Analysis

Sysmex adopted IFRS from the ﬁscal year ended March 31, 2017. Our aim is to increase convenience to shareholders andinvestors in Japan and overseas by enhancing the international comparability of our ﬁnancial information in capital markets. Figures for the ﬁscal year ended March 31, 2016 are also disclosed in compliance with IFRS.

Overview
Looking at economic conditions during the ﬁscal year
ended March 31, 2017, in the United States, the employment
environment was characterized by ongoing improvement,
and the economy continued its gradual expansion. The
European economy also continued to recover, but due tothe UK’s move to exit the European Union, which is beginning in earnest, the outlook remains uncertain. The Chinese
economy continued to decelerate gradually, despite the introduction of ﬁscal policies and monetary easing measures.
In the Asia Paciﬁc region, uncertainty continued, centeredon ASEAN countries. Overseas economies generally maintained the trend toward modest recovery, despite emerging
uncertainties in the economic outlook. . The Japanese economy continued on its path to recovery thanks to improvements in employment and income conditions and an upturnin capital investment.
On the healthcare front, developed countries in Europe
and the United States are working to curtail medical
expenses. In the United States, the Aﬀordable Care Act thatwas introduced to decrease the number of people without
medical insurance is being reviewed. In China, ongoing medical system reforms aim to erase medical service disparities
between cities and farming villages, but the country is also

introducing policies to reduce medical expenses. Therefore,
although some causes for uncertainty remain, the foundations of healthcare-related demand remain solid. The
Japanese government is including the medical and healthcare
industry in its growth strategies, which is expected to continue invigorating healthcare-related industries going forward.
Under these conditions, within the Sysmex Group asubsidiary, Sysmex Asia Paciﬁc Pte Ltd., established a branch
in Myanmar, which is demonstrating remarkable economic
growth. By providing more robust support for distributors
and customers in Myanmar, we will continue contributing to
the development of healthcare in the country.
In 2014, Sysmex commenced capital participation in
RIKEN GENESIS Co., Ltd., headquartered in Tokyo, engaging
in eﬀorts toward the realization of personalized medicine.
To reinforce synergies with RIKEN GENESIS, we acquired
additional shares in the company and converted it to a subsidiary. Together, Sysmex and RIKEN GENESIS will pursue
R&D and business development initiatives to realize personalized medicine through genetic analysis.
During the ﬁscal year the Group recorded consolidated
net sales of ¥249.8 billion, down 1.1% year on year. Operating
proﬁt declined 14.9%, to ¥51.7 billion, and proﬁt before tax
fell 15.3%, to ¥48.9 billion. However, proﬁt attributable to249.8 (¥ billion)

1

Net sales by destination is deﬁned as the sales amount recorded byGroup companies to customers in a particular region. However, net
sales by geographical region refers to the sales amount made by aGroup company in a particular location.
2
EMEA: Europe, the Middle East and Africa

82.6%¥206.4 billion

25.9%
’14.3
Japanese GAAP

79

39.2

60.7

17.4%

¥43.4 billion

’15.3

’16.3

’17.3
IFRS

 R&D Expenses
R&D Expenses as a Percentage of
Net Sales

14.6

21.8

billion

15.0

17.8

15.5 (¥ billion)

15.4

13.2
12.1
26.6

24.0

32.8

¥249.840.6 (¥ billion)

51.7(¥ billion)

Net sales

OVERSEAS’13.3

 Proﬁt Attributable to Owners of
the Parent

44.4

145.5

R&D expenses
To enhance its product portfolio, during the year Sysmex
developed new products and pursued R&D centering on
clinical testing and the life sciences, ﬁelds targeted for future
growth. As a result, R&D expenses amounted expanded ¥0.1

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

JAPAN

24.1%

184.5

Proﬁt
Operating proﬁt fell ¥9.0 billion, or 14.9%, to ¥51.7 billion
due to the impact of yen appreciation and a worsening costof sales ratio, and the ratio of operating proﬁt to net sales
fell 3.3 percentage points, to 20.7%. Exchange rate ﬂuctuations had a ¥11.1 billion negative impact on operating proﬁt
year on year.
However, proﬁt attributable to owners of the parent
increased ¥1.3 billion, or 3.5%, to ¥40.6 billion, stemmingfrom a reduction in income tax expenses through a reversalof deferred tax liabilities in line with a revised tax treaty
between Japan and Germany.

Operating Proﬁt
Operating Margin

8.5%

221.3

Cost of Sales and SG&A Expenses
Cost of sales rose ¥6.1 billion, or 6.1%, to ¥108.1 billion. The
cost of sales ratio accordingly increased 3.0 percentage
points, to 43.3%.
Selling, general and administrative expenses increased¥0.8 billion, or 1.1%, to ¥75.4 billion, owing to reinforcementof sales and after-sales service structures. SG&A expenses
as a percentage of net sales rose 0.7 percentage point, from
29.5% to 30.2%.

In overseas markets, reagent sales expanded in the hematology, hemostasis and immunochemistry ﬁelds thanks toa growing installed instrument base. Consequently, sales
were robust in each country on a local currency basis, but
the Sysmex Group’s overseas sales decreased 3.0% year on
year, to ¥206.4 billion, due mainly to the impact of the yen’s
appreciation in foreign exchange markets. The overseas
sales ratio declined 1.6 percentage points, to 82.6%. Looking
at overseas sales by destination, sales in the Americas
amounted to ¥60.1 billion, up 1.6% year on year; in EMEA2¥64.6 billion, down 5.3%; in China ¥60.3 billion, down 7.4%;
and in Asia-Paciﬁc ¥21.2 billion, up 5.9%.
In Japan, sales increased in the hematology, hemostasis
and immunochemistry ﬁelds. As a result, sales in Japan rose
9.1% year on year, to ¥43.4 billion.

Japan
Overseas
Americas
EMEA
China
Asia Paciﬁc

252.6

Profits and Losses

Net Sales by Destination1

 Operating Proﬁt
Operating Margin

 Net Sales by Destination

 Net Sales

owners of the parent increased 3.5%, to ¥40.6 billion, stemming from a reduction in income tax expenses through areversal of deferred tax liabilities in line with a revised tax
treaty between Japan and Germany. Return on equity (ROE)
declined 2.4 percentage points, to 20.7% during the ﬁscal
year under review.

20.7 (%)

20.1

8.3

20.5

7.2

6.6
6.1

14.1

6.2 (%)

24.1%
’13.3

’14.3
Japanese GAAP

’15.3

’16.3

’17.3
IFRS

’13.3

’14.3
Japanese GAAP

’15.3

’16.3

’17.3
IFRS

’13.3

’14.3
Japanese GAAP

’15.3

’16.3

’17.3
IFRS

80

Financial and Other Information

Sysmex Report 2017Management’s Discussion and Analysis

billion, or 0.9%, to ¥15.5 billion. R&D expenses as a percentage of net sales increased 0.1 percentage points, from 6.1%
to 6.2%.

competitive product development and global business strategies, aiming to respond to anticipated changes in the business environment.

Dividend Policy

Liquidity and Sources of Capital

Sysmex aims to maintain a proper balance between aggressive investment, which is designed to sustain steady highgrowth, and returns to our shareholders as our earning
power increases. In terms of returns to shareholders, we
intend to provide a stable dividend on a continuous basis
and aim for a consolidated payout ratio of 30% under ourbasic policy of sharing the successes of our operations inline 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 in light of businessperformance during the year under review, we announced
dividends for the year of ¥58 per share, which includes aninterim dividend of ¥28. Consequently, we increased annual
dividends by ¥6 per share for the year for the ﬁscal year
ended March 31, 2016. This amounted to the 15th consecutive year of dividend increases and a consolidated payout
ratio of 29.7%.
Going forward, Sysmex will continue to eﬀectively
invest its internal reserves in the implementation of highly

Fund Procurement
The Company raises working capital as necessary throughshort-term bank loans and other means. Consolidated subsidiaries obtain bank loans as needed to secure working
capital, but in October 2003, the Company introduced acash management system to increase eﬃciency by unifying
ﬁnancing and capital management at aﬃliates in Japan.
For long-term capital requirements such as capital
investment, the Company decides the funding method after
taking into account the investment recovery period and risk.
During the year, the Company ﬁnanced capital expenditure
and R&D activities primarily from cash provided by operating activities.

 Cash Dividends Applicable to the Year
Dividend Ratio

Assets, Liabilities and Equity
As of March 31, 2017, total assets amounted to ¥279.8 billion, up ¥15.8 billion from March 31, 2016. As principal factors, trade and other receivables (current assets) rose ¥5.4
billion, intangible assets rose ¥4.5 billion, trade and otherreceivables (non-current assets) grew ¥2.3 billion, inventories
expanded by ¥1.3 billion, and goodwill increased ¥1.3 billion.
Meanwhile, total liabilities as of March 31, 2017, were
¥69.5 billion, down ¥11.5 billion from their level on March Total Assets

 Total equity

31, 2016. Principal reasons were decreases of ¥4.0 billion inadvance received, ¥3.8 billion in deferred tax liabilities, and¥3.5 billion in income taxes payable.
Total equity came to ¥210.2 billion, up ¥27.4 billion fromMarch 31, 2016. Among principal reasons, other componentsof equity decreased ¥3.4 billion, but retained earnings rose
¥29.1 billion. Equity attributable to owners of the parent tototal assets as of March 31, 2017, was 74.8%, up 5.5 percentage points from the 69.3% recorded as of March 31, 2016.

Cash Flows from Investing Activities
Net cash used in investing activities was ¥19.4 billion (down¥4.4 billion from the preceding year). Principal uses of cash
included purchases of property, plant and equipment of ¥11.6
billion (down ¥2.0 billion), purchases of intangible assets of¥7.4 billion (down ¥0.9 billion), acquisitions of subsidiaries orother businesses used ¥1.4 billion (up ¥1.0 billion) , and a net
decrease in short-term loans receivable, a category that wasabsent in the preceding year, used ¥1.9 billion.

Cash Flows
As of March 31, 2017, cash and cash equivalents amounted
to ¥57.9 billion, up ¥1.4 billion from March 31, 2016. Cashﬂows from various activities during the ﬁscal year aredescribed in more detail below.

Cash Flows from Financing Activities
Net cash used in ﬁnancing activities was ¥10.8 billion (up¥2.1 billion). This was mainly due to dividends paid of ¥11.6
billion (up ¥2.0 billion).

Cash Flows from Operating Activities
Net cash provided by operating activities was ¥32.8 billion,¥8.9 billion less than in the preceding ﬁscal year. As principal factors, proﬁt before tax provided ¥48.9 billion (¥8.8
billion less than in the preceding ﬁscal year), an increase ininventories used ¥2.1 billion (down ¥4.6 billion), a decreasein trade payables used ¥2.4 billion (increased ¥4.1 billion in
the preceding ﬁscal year), a decrease in advances received
used ¥3.6 billion (increased ¥0.6 billion in the precedingﬁscal year), and income taxes paid used ¥16.2 billion (down¥3.3 billion).

Capital Expenditure and Depreciation
Capital expenditure (investment in property, plant andequipment, including construction in progress) was down
¥1.2 billion year on year, or 9.2%, to ¥11.8 billion. Major capital expenditures included the expansion of reagent factories
to increase reagent production capacity at overseas subsidiaries in line with business expansion in overseas markets, aswell as for the acquisition of equipment leased to customers. Depreciation and amortization increased ¥0.2 billion, or2.2%, to ¥12.3 billion.

 Cash Flows Capital Expenditure
Depreciation and Amortization

Cash Dividends Applicable to the Year
Dividend Ratio

Capital expenditure
Depreciation and amortization

58 (¥)
263.9

52

279.8 (¥ billion)
210.2 (¥ billion)

247.9
210.7

169.5

38

38.6

Net cash used inﬁnancing activities

’14.3

81

12.3 (¥ billion)

13.0
12.1 11.8 (¥ billion)

32.8

Year ended Mar. 31 2015 (Japanese GAAP)
Year ended Mar. 31 2016 (IFRS)
Year ended Mar. 31 2017 (IFRS)

8.9
7.9

29.7(%)

29.6
27.5

27.1

Japanese GAAP

13.9

9.9

(7.5) (8.7)
’13.3

13.3

41.7

119.1

27
29.1
20

Net cash used ininvesting activities

11.2

182.8

146.2

173.0

Net cash provided byoperating activities

’15.3

’16.3

’17.3
IFRS

’13.3

’14.3
Japanese GAAP

’15.3

’16.3

’17.3
IFRS

’13.3

’14.3
Japanese GAAP

’15.3

’16.3

’17.3
IFRS

(19.5) (19.4)(23.8)(10.8) (¥ billion)
’13.3

’14.3
Japanese GAAP

’15.3

’16.3

’17.3
IFRS

82

Financial and Other Information

Sysmex Report 2017

Consolidated Statement of Financial Position
Sysmex Corporation and its Subsidiaries
As of March 31, 2017

Thousands of
U.S. Dollars

Millions of Yen
March 31, 2017

March 31, 2016

Date of transition
to IFRSMarch 31, 2017

AssetsCurrent assets
Cash and cash equivalents¥ 57,944¥ 56,481¥ 49,613$ 517,357

Trade and other receivables

63,08457,65253,662563,250

Inventories

36,99835,60429,966330,339

Other short-term financial assets

528

615

298

4,714

Income taxes receivable

457

453

223

4,080

Other current assets

7,303

7,450

6,484

65,205

Total current assets

166,318

158,258

140,2481,484,982

Non-current assets
Property, plant and equipment

60,14459,282

56,835537,000

Goodwill

8,308

6,921

7,192

74,179Intangible assets

21,228

16,682

11,598

189,536

552

2,089

1,937

4,929

Trade and other receivables

8,813

6,476

3,901

78,688Other long-term financial assets

6,107

6,010

6,440

54,527

Asset for retirement benefits

666

582

960

5,946

Other non-current assets

2,095

1,928

1,717

18,705

Deferred tax assets

5,581

5,684

6,478

49,830113,499

105,659

97,062

1,013,384¥279,817¥263,917¥237,310$2,498,366

Investments accounted for using the equity method

Total non-currents assets
Total assets

Thousands of
U.S. Dollars

Millions of Yen

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Other short-term financial liabilities
Income taxes payable
Provisions
Advance received
Accrued expenses
Accrued bonuses
Other current liabilities
Total current liabilities
Non-current liabilities
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

Date of transition
to IFRSMarch 31, 2017

March 31, 2016

March 31, 2017

¥ 24,376
956
2,915
610
6,418
8,330
6,636
9,708
59,952¥ 26,824
788
6,511
554
10,431
6,864
6,538
9,383
67,896¥ 22,776
1,001
9,418
450
10,357
8,137
6,130
9,084
67,355$ 217,643
8,536
26,027
5,446
57,30474,37559,25086,679535,286

549
654
2,318
3,527
2,562
9,612
69,564

734
566
2,341
3,192
6,384
13,21981,116

342
562
2,312
3,094
5,669
11,98079,336

4,902
5,839
20,696
31,491
22,87585,821
621,107

11,611
17,303
188,506(289)(7,725)
209,406845
210,252¥279,817

11,016
16,969159,375(285)(4,275)
182,800
0
182,801¥263,917

10,483
16,340130,183(280)
1,246
157,9720
157,973¥237,310

103,670
154,491
1,683,089(2,580)(68,973)
1,869,696
7,545
1,877,250$2,498,366

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
made at the rate of ¥112 to $1, the approximate rate of exchange at March 31, 2017.

83

84

Financial and Other Information

Sysmex Report 2017

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

Sysmex Corporation and its Subsidiaries
For the Year Ended March 31, 2017

Sysmex Corporation and its Subsidiaries
For the Year Ended March 31, 2017

Thousands of
U.S. Dollars

Millions of Yen

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
ProfitProfit attributable to
Owners of the parent
Non-controlling interests
Profit2017

2016¥249,899
108,122
141,777
75,401
15,5541,277
397
51,701
514
372
(677)
(2,218)48,946
8,493¥ 40,453¥252,622
101,932
150,689
74,571
15,409610
588
60,729382
96(465)(2,741)57,80918,530¥ 39,278

40,636(182)¥ 40,453

39,278(0)¥ 39,278

Yen

2017

$2,231,241
965,375
1,265,866
673,223
138,875
11,402
3,545
461,616
4,589
3,321(6,045)(19,804)
437,01875,830$ 361,188362,821(1,625)$ 361,188

Thousands of
U.S. Dollars

Millions of Yen

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

2017

2016

2017

¥40,453¥39,278$361,188

158

(430)

1,411

139
298

(536)
(967)

1,241
2,661

(3,606)(5,091)(32,196)(0)(0)(3,607)(3,309)¥37,144(5,091)(6,059)¥33,219(32,205)(29,545)$331,643¥37,327(182)¥37,144¥33,219(0)¥33,219$333,277(1,625)$331,643

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
made at the rate of ¥112 to $1, the approximate rate of exchange at March 31, 2017.

U.S. Dollars

Earnings per share
Basic¥195.31¥189.08$1.74

Diluted194.74

188.301.74

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
made at the rate of ¥112 to $1, the approximate rate of exchange at March 31, 2017.

85

86

Financial and Other Information

Sysmex Report 2017

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Sysmex Corporation and its Subsidiaries
For the Year Ended March 31, 2017

Sysmex Corporation and its Subsidiaries
For the Year Ended March 31, 2017

Millions of Yen

Capital stock

As of April 1, 2015
¥10,483
ProfitOther comprehensive income (loss)
Comprehensive income (loss)
Exercise of warrants
533
Share-based paymenttransaction
Cash dividends
Purchase of treasury stock
Transfer to retained earnings
Changes from businesscombination
Equity transactions with
non-controlling interests
Total transactions with533
the owners
As of March 31, 2016
11,016
ProfitOther comprehensive income (loss)
Comprehensive income (loss)
Exercise of warrants
594
Share-based paymenttransaction
Cash dividends
Purchase of treasury stock
Transfer to retained earnings
Changes from businesscombination
Equity transactions with
non-controlling interests
Total transactions with594
the owners
As of March 31, 2017¥11,611

CapitalsurplusRetainedearnings¥16,340 ¥130,183
39,278Treasurystock¥(280)

Other
componentsof equity

Noncontrollinginterests

Total

316
312

312

312

(9,549)(4)(9,549)(4)(8,391)(9,549)
(4)
(536)

¥

0 ¥157,973(0)
39,278(0)(6,059)(0)33,219
849

536

628

(10,086)(4)536(8,391)

16,969159,375
40,636(285)(4,275)

182,800
40,636(3,309)37,327928(3,309)(3,309)40,636333(11,646)(11,646)
(3)

(3)
141

0
(182)
(0)
(182)

(141)

0
334

182,801
40,453(3,309)37,144928(11,646)
(3)

1,028

(11,505)(3)¥17,303 ¥188,506¥(289)

(141)

0

(0)

(10,721)1,028¥(7,725) ¥209,406

1,028(9,692)¥ 845 ¥210,252

Thousands of U.S. Dollars
Equity attributable to owners of the parent
Capital stock

As of March 31, 2016
ProfitOther comprehensive income (loss)
Comprehensive income (loss)
Exercise of warrants
Share-based paymenttransaction
Cash dividends
Purchase of treasury stock
Transfer to retained earnings
Changes from businesscombination
Equity transactions with
non-controlling interests
Total transactions withthe owners
As of March 31, 2017

$ 98,357

CapitalsurplusRetainedearnings$151,509 $1,422,991
362,821

Treasurystock$(2,545)362,821
5,304

2,973

Other
componentsof equity

Total$(38,170) $1,632,143
362,821(29,545)(29,545)(29,545) 333,277
8,286(103,982)(103,982)(27)(1,259)
9,179

0
5,304
$103,670

2,982

Total equity$
0 $1,632,152(1,625) 361,188(0)(29,545)(1,625) 331,643
8,286(103,982)
(27)

(27)
1,259

Noncontrollinginterests(102,723)(27)$154,491 $1,683,089$(2,580)(1,259)0(0)(95,723)

9,179$(68,973) $1,869,696

2017

2016

Operating activities
Profit before tax
Depreciation and amortization
Interest and dividend income
Interest expenses
Share of loss on equity method
Increase in trade receivables
Increase in inventories(Decrease) increase in trade payables
Decrease/increase in consumption taxes receivable/payable
Decrease (increase) in asset for retirement benefits(Decrease) increase in advance received
Increase in accrued bonuses
Other–net
SubtotalInterest and dividend received
Interest paid
Income taxes paid
Net cash provided by operating activities¥ 48,946
12,381
(425)
104
677
(6,368)(2,104)(2,483)817
117(3,635)107
634
48,770415(85)(16,268)
32,832¥57,809
12,110(335)
46
465(5,476)(6,775)
4,145
(903)
(418)
687
577
(884)
61,047356(31)(19,578)
41,794$ 437,018
110,545(3,795)929
6,045(56,857)(18,786)(22,170)
7,295
1,045
(32,455)
955
5,661
435,446
3,705(759)(145,250)
293,143

Investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investments in equity instruments
Acquisitions of subsidiaries or other businesses
Net decrease in short-term loans receivable
Other–net
Net cash used in investing activities(11,682)
200(7,424)(632)(1,453)
1,930(338)(19,400)(13,685)107(8,399)
(633)
(403)
(836)
(23,850)(104,304)
1,786(66,286)(5,643)(12,973)
17,232(3,018)(173,214)

Financing activities
Exercise of warrants
Dividends paid
Other–net
Net cash used in financing activities

928(11,646)(148)(10,866)849(9,549)(55)(8,755)8,286(103,982)(1,321)(97,018)

Foreign currency translation adjustments on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year

(1,102)
1,462
56,481¥ 57,944(2,320)6,868
49,613¥56,481(9,839)13,054504,295$ 517,357

Total equity¥1,246 ¥157,972
39,278(6,058)(6,058)(6,058)33,219849

39,278

Thousands of
U.S. Dollars

Millions of Yen

Equity attributable to owners of the parent

9,179

2017

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
made at the rate of ¥112 to $1, the approximate rate of exchange at March 31, 2017.

(86,536)$ 7,545 $1,877,250

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
made at the rate of ¥112 to $1, the approximate rate of exchange at March 31, 2017.

87

88

Financial and Other Information

Sysmex Report 2017

Stock Information (As of March 31, 2017)

Corporate Overview (As of March 31, 2017)

 Principal Shareholders (Top 10)

 Stock Price Range

Sysmex Corporation(Calculated as the closing price on March 31, 2007 = 100)

700

Number of Percentage ofshares held shareholding(Thousands)(%)

Shareholders

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

Japan Trustee Services Bank, Ltd.
JPMorgan Chase Bank 380055
The Kobe Yamabuki Foundation

600

500

Nakatani Foundation for Advancementof Measuring Technologies inBiomedical Engineering
Nakatani Kosan, Ltd.
The Master Trust Bank of Japan, Ltd.
Kazuko Ietsugu
Taeko Wada
Kenji Itani
Rusoru, Ltd.

400

300

200

100
0

22,762
16,091
12,000

10.9
7.7
5.8

11,8305.7

10,457
8,395
6,124
6,124
5,000
4,750

5.0
4.0
2.9
2.9
2.4
2.3

Note: Percentage of shareholding excludes treasury stock (444,556 shares).
’07.3 ’08.3 ’09.3 ’10.3 ’11.3’12.3 ’13.3 ’14.3 ’15.3 ’16.3 ’17.3

 Composition of Shareholders
Individuals and others
19.30%

Financial institutions
19.85%

 Cash Dividends per Share and Dividend Ratio(Consolidated)
Cash dividends per share (Figures adjusted for stock split)
Dividend payout ratio

38

Other Japanesecompanies
20.01%

27
12

Foreign investors
40.18%

58 (¥)

52

Financial instrument ﬁrms
0.66%

12.5
26.8

31.9

14
29.4

’08.3 ’09.3 ’10.3

20

17

15
27.0

’11.3

29.1

’12.3

29.7(%)
29.1

’13.3

27.1

’14.3

29.6

’15.3

27.5

’16.3

Note: Two-for-one stock split conducted in April 2011 and 2014.

 Distribution of Shares by Number of Shares Held
Less than 1,000 shares 1.35%

More than 1,000 shares 1.71%

Number of shares: 2,830,445(12,231 shareholders)Number of shares: 3,559,022(1,841 shareholders)More than 5,000 shares 1.08%
Number of shares: 2,252,024(323 shareholders)More than
10,000 shares 5.92%’17.3

EstablishedFebruary 20, 1968

Head Office

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

Inquiries

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

WebsitePlease see our website for more detailed and the most recent information.
Websitehttp://www.sysmex.co.jp/en/
IR information
http://www.sysmex.co.jp/en/ir/
Sustainability information
http://www.sysmex.co.jp/en/csr/

Number of Employees

7,930 (consolidated basis)(including part-time employees and others)

Fiscal Year

April 1–March 31

Shareholders’ Meeting

June

Number of Shares Authorized 598,688,000 shares
Number of Shares Issued

208,631,032 shares

Paid-in Capital¥11,611.86 million

Stock Listings

Tokyo Stock Exchange, First Section

Ticker Code

6869

Transfer Agent

Mitsubishi UFJ Trust and Banking Corporation

Independent Auditor

Deloitte Touche Tohmatsu LLC

RatingA+ (Rating and Investment Information, Inc. (R&I))

Major Indexes

Dow Jones Sustainability World Index
Dow Jones Sustainability Asia Pacific Index
Ethibel Pioneer & Excellence
FTSE4Good Index
FTSE Blossom Japan Index*
JPX-Nikkei Index 400
MSCI Standard Index
MSCI ESG Leaders Indexes
MSCI SRI Indexes
MSCI Japan ESG Select Leaders Index*
MSCI Japan Empowering Women Index (WIN)*
S&P Japan 500* Included as of July 2017

Number of shares: 12,349,725(419 shareholders)

89

More than
500,000 shares 79.33%

More than
100,000 shares 10.61%

Number of shares: 165,510,961(68 shareholders)Number of shares: 22,128,855(102 shareholders)90