Financial Results for FY2016(Apr. 1 to Mar. 31)

Code 4555, First Section of the TSE
May. 15, 2017

Overview of the Financial Results for FY2016
Although net sales increased by 7.2% YoY, operating income fell shortof the plan by 12.2% due to an increase in the cost to sales ratio andincreased R&D costs.
（Unit: Millions of yen）

FY2015Full Year
Full Year Results

FY2016
Full Year
Forecasts

Full Year Results

Forecasts
Ratio

Difference

123,492

134,500

132,428

-1.5%

7.2%

Operating Income

23,18523,50020,633-12.2%-11.0%

Ordinary Income

23,02523,30020,557-11.8%-10.7%

Profit attributable to owners ofparent

17,15517,50015,914

-9.1%

-7.2%

Net Sales

Copyright © 2017 Sawai Pharmaceutical Co., Ltd. All Rights Reserved.

1Analysis of Factors Causing Changes in Operating Income(Unit：Billion. Yen)

+5.2

-4.7

-0.8

23.1

-2.2

20.6

FY 2015
operating income

Net sales
increase

Variable cost ratio
increase, fixed cost
increase etc.

Copyright © 2017 Sawai Pharmaceutical Co., Ltd. All Rights Reserved.

Increase in SG&A
(excluding R&D)

Increase in R&D
expenses

FY 2016operating income2

Sales per Medical Institution Types(non-consolidated) There has been an overall increase in adoption amounts, althoughthese were less than anticipated.
 Those for insurance pharmacies have maintained double digit growth.
The Track Record of SAWAI's Products Delivered to Medical Institutions
by Distribution Companies（ Unit： Number of Medical Institution）
Institution Typea) Nationwide
Total Number

FY2015Full Year Result
Number ofCustome rs

Sales ShareFY2016
Full Year Result

Year on Year
Changes inb) Numbe r ofCustomers

CoverageRate (b/a)

Sales Share

Sales Growth

Number ofCustomers

Hospital

8,483

7,889

13.6%

7,961

(93.8%)

12.8%

72

3.1%

DPC Hospital

1,667

1,559

8.4%

1,647

(98.8%)

7.9%

88

1.0%

Clinic105,276

34,301

10.7%

35,682(33.9%)

10.4%

1,381

5.2%

Pharmacy

87,73856,36674.6%

57,064(65.0%)

75.5%

698

10.3%

Dispensing Pharmacy

60,43955,974

74.1%

56,671(93.8%)

75.0%

697

10.3%

Drug Stores, etc.

27,299

392

0.5%

393

(1.4%)

0.5%

1

17.8%

Others

--

1.1%

-

1.3%

-

26.4%

Total

201,497

98,556100.0%

2,151

9.0%

100.0% 100,707(50.0%)

DPC: Diagnosis Procedure Combination, means fixed payment system for inpatients

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3

Sales by Listed Year of Drugs
 Sales of products listed since FY2014 steadily grow
（Unit: Millions of yen, %）Unit: Millions of yen
80,000

1,676
3,141
5,403
3,593

579
5,165
3,846
5,477
3,972

9,833

9,175

5,064

5,225

70,00060,00050,00040,00030,00020,00010,000

0

1,726
4,318
3,103
9,219
4,312
18,2796,838
5,552
FY2014
Listed in FY2007
Listed in FY2010
Listed in FY2013
Listed in FY2016

21,16622,175

7,377

7,642

5,851

6,143

FY2015
Listed in FY2008
Listed in FY2011
Listed in FY2014

FY2016
Listed in FY2009
Listed in FY2012
Listed in FY2015

Copyright © 2017 Sawai Pharmaceutical Co., Ltd. All Rights Reserved.

FY2015FY2016

Y on Y(%)

Mil. yenMil. yen

GrowthListed in FY2016

-579

-

Listed in FY2015

1,676

5,165

208.2%

Listed in FY2014

3,141

3,846

22.4%

Listed in FY2013

5,403

5,477

1.4%

Listed in FY2012

3,5933,972

10.5%

Listed in FY2011

9,833

9,175

-6.7%

Listed in FY2010

5,064

5,225

3.2%

Listed in FY2009

21,16622,175

4.8%

Listed in FY2008

7,377

7,642

3.6%

Listed in FY2007

5,851

6,143

5.0%

Existing Drugs andTransferred Drugs, etc.

60,382

63,025

4.4%

Total

123,492

132,428

7.2%

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Sales by Distribution Channels
 Sales through wholesalers expanded, with nationwide distribution network in
the area of pharmacy and hospital markets.
（Unit：Millions of yen）

Wholesalers

Agencies

140,000

120,000

Marketing Alliances

60,000105,454
40,434＋3,197（＋7.9％）

43,631+1,051（+2.4％）

44,683( 37.3%)(35.3%)(38.3%)

40,00060,33720,000132,428

123,492

100,000

80,000

Others＋8,991（+ 14.9％）( 57.2%)

69,329(56.1%)+6,961（+10.0％）76,290(57.6%)

0FY2014

Copyright © 2017 Sawai Pharmaceutical Co., Ltd. All Rights Reserved.

FY2015FY2016

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Comparison of Sales Volume
 Impact of generic drug promotion measures have increased sales
volume by 14.3% YoY.
 Cardiovascular, central nervous system drugs and blood/body fluid
pharmaceutical products have steadily increased.
Volume Composition

Therapeutic Category

FY2015FY2016

Y on Y(volume)Y on Y(value)(Note)

Other metabolic drugs
Respiratory organ agents
Antibiotics drugs
Antiallergic drugs
Urogenital and anal organ agents
Others

25.9%
24.0%
11.8%
7.2%
7.5%
6.7%
2.9%
2.2%
1.3%
10.5%

26.8%
23.3%
12.1%
7.8%
6.9%
6.6%
2.9%
2.5%
1.3%
9.8%

18.5%
11.0%
16.7%
24.2%
4.9%
11.6%
16.7%
25.6%
14.1%
7.4%

3.7%
5.6%
7.4%
8.4%
11.5%
9.9%
8.7%9.3%
-4.6%
25.8%

Total

100.0%

100.0%

14.3%

8.0%

Cardiovascular drugs
Gastro-intestinal drugs
Central nervous system drugs
Blood/body fluid pharmaceutical products

Note: The contracted sales of the Kashima factory are excluded from the calculation.
Copyright © 2017 Sawai Pharmaceutical Co., Ltd. All Rights Reserved.

6

FY2017 Earnings Forecasts(IFRS)In order to improve the international comparability of financial information,
IFRS will be used instead of Japanese GAAP in FY2017.
Steady growth is anticipated to continue from an expected increase in net sales due tofactors such as patent expiration for many top-selling products.
FY2016
Full Year Results
Mil. yen

FY2017 Forecast
Full Year Results（IFRS）/S ales (%)

Net Sales
Cost of Sales
Gross Profit
SG&A Expenses(excluding R&D)
R&D Expenses―
Operating Income
Ordinary Income
Profit before tax

132,428
80,30852,11920,633
20,557
19,87015.6% Operating Income

Net Income

15,91412.0%※121,277
10,207100.0% Net Sales

Cost of Sales
39.4% Gross Profit
SG&A Expenses
16.1%(excluding R&D)
7.7%
R&D Expenses
60.6%

Other income( expenses)
15.5%Finance income (costs)

15.0% Profit before tax
Profit for the year attributableto owners of the parent

Mil. yen/S ales (%)

142,000
85,30056,700100.0%

23,900

16.8%

8,300
-300
24,200-400
23,8005.8%
17.0%

18,200

12.8%

60.1%
39.9%

――
16.8%

We expect to record 2,000 million yen of the R＆D costs to intangible fixed assets.

※2 This forecast factor in various costs related to the acquisition of Upsher-Smith Laboratories, Inc.(about 1,800 million yen),
but does not factor in any of the impact on consolidated results for sales and earnings.
Copyright © 2017 Sawai Pharmaceutical Co., Ltd. All Rights Reserved.

7

FY2017 Earnings Forecasts（JGAAP）
 The earnings forecast for FY2017 according to Japanese GAAP isshown below（Unit: Millions of yen）

FY2016
Full Year Results
Mil. yen

Net Sales/S ales (%)

FY2017 Forecast
Medium-term BP
Full Year Forecasts
Mil. yen/S ales (%)

Differences

Mil. yen/S ales (%)

Difference

Degree ofProgress

132,428100.0%

157,000

100.0%

18.6%

142,000

100.0%

7.2%

-9.6%

80,30860.6%

96,500

61.5%

20.2%

85,300

60.1%

6.2%

-11.6%

52,11939.4%

60,500

38.5%

16.1%

56,700

39.9%

8.8%

-6.3%

SG&A Expenses

31,48523.8%

34,500

22.0%

9.6%

34,200

24.1%

8.6%

-0.9%

Operating Income

20,63315.6%

26,000

16.6%

26.0%

22,500

15.8%

9.0%

-13.5%

Ordinary Income

20,55715.5%

25,500

16.2%

24.0%

22,300

15.7%

8.5%

-12.5%Net Income

15,91412.0%

18,500

11.8%

16.2%

16,700

11.8%

4.9%

-9.7%

Cost of Sales
Gross Profit※ This forecast factor in various costs related to the acquisition of Upsher-Smith Laboratories, Inc.(about 1,800 million yen),
but does not factor in any of the impact on consolidated results for sales and earnings.
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8Dividends of surplus
 Year-end dividends are 65 yen as initially forecast
The annual dividend increased by 10 yen YoY to 130 yen

Resolved amountPrevious dividend forecast（announced May 12,2016）

Actual dividends of theprevious fiscal year
(ended March 31,2016)

Record date

March 31,2017

Same as left

March 31,2016

Dividend pershare

65.00 Yen

55.00 Yen65.00 Yen

Total amount ofdividends

2,396 million yen―

2,396million yen

Effective dateJune 28, 2017

―June 26, 2016

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9Analysis of Cash Flows Statement（Unit: Millions of yen）
FY2015FY2016
Full Year Results Full Year Results
Income before Income Taxes
and Minority Interests

23,091

19,870Depreciation and Amortization

7,044

8,645

Working Capital-5,309-10,834

Income Taxes Paid-6,127-6,836

Others

1,276

9,782

Cash Flows from Operating Activities

19,975

20,628Major Factors of YOY Changes(Unit: Millions of yen)

●Increase in trade notes and accounts
receivables:－ 5,000●Increase in inventories:－ 6,100●Acquisition of tangible fixed assets:

Capital Expenditure(tangible and intangible)-17,775-16,194

Others-5,162-12

Cash Flows from Investing Activities-22,937-16,206

Net Increase/Decrease ofInterest-bearing debt

17,353-1,665

Dividends-4,050-4,792Others171-282

Cash Flows from Financing Activities

13,473-6,740Net Increase/Decrease in Cash andCash Equivalents

10,492-2,325

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－ 15,400●Long-term loan repayments:－ 1,60010New Products (Planned)
 The following products are planned to be listed in June
Major Products
Telmisartan Tablets

Brand Drugs
Micardis Tablets

Telthia combination Tablets Micombi Combination Tablets
Teramuro Combination
Tablets
Aripiprazole Tablets

Therapeutic Category
Treatment of hypertension
Treatment of hypertension

Micamlo Combination Tablets

Treatment of hypertension
An antipsychotic drug

leukotriene receptor
antagonist/Treatment of allergic rhinitis

ENTECAVIR OD Tablets

ABILIFYKIPRES(OD Tablets, Chewable Tablets, FineGranules)
SINGULAIR(OD Tablets, Chewable Tablets, FineGranules)
Baraclude Tablets

MIGLITOL OD Tablets

SEIBULE OD Tab

Treatment of diabetes mellitus

Montelukast Sodium(OD Tablets, ChewableTablets, Fine Granules)

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An antiviral medication

11

Consolidated Financial Highlights-1

FY2015
1H
Full Year

1H

FY2016
YoY（ %）
Full Year YoY（%）

Cost of Sales
Gross Profit
SG&A Expenses
Operating Income
Ordinary Income
Profit attributable to ownersof parent58,95833,831
25,127
13,52011,606
11,438

123,492
71,85851,63428,44823,18523,02565,416
38,794
26,622
15,261
11,36011,326

11.0
14.7
5.9
12.9
-2.1
-1.0

132,428
80,30852,11931,485
20,633
20,557

7.2
11.8
0.9
10.7
-11.0
-10.7

8,498

17,1558,565

0.8

15,914-7.2

186,237
119,11463.9

206,492
125,72060.8

215,873
131,909
61.0

0.2 ※

221,538
137,600
62.0

1.2

Key Balance Sheets Data
Total Assets
Net Assets
Capital Adequacy Ratio(%)（Unit： Millions of Yen）

FY2017 Forecast（IFRS）
Full Year YoY（%）

Key Income Statements Data

Ke y Income State ments Data

Net Sales

FYNet Sales

Cost of Sales
Gross Profit
SG&A Expenses(※)
Operating Income
Profit before tax
Profit for the year
attributable to owners ofthe parent
Key Balance S heets Data

Total Assets
Net Assets
Capital Adequacy Ratio(%)

142,000
85,30056,70023,90024,20023,800-18,200--※1 Comparison with 4Q of FY2015※2 Excluding R&D

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12

Consolidated Financial Highlights-2（Unit： Millions of Yen）

FY2015
1H
Full Year

FY2016Full Year YoY（ % ）YoY（ % ）1HProf itability & Ef f iciency Indication

Gross Profit Ratio
SG&A Expenses Ratio
Operating Income Ratio
Ordinary Income Ratio
Return on Sales
Return on Equity

Diluted Net Income per Share

Shareholders' Equity
Dividend (interim)

YoY（ %）

Prof itability & Ef f iciency Indication

42.6
22.9
19.7
19.4
14.4
-

41.8
23.0
18.8
18.6
13.9
14.4

40.7
23.3
17.4
17.3
13.1
--1.9
0.4
-2.3
-2.1
-1.3
-39.4
23.8
15.6
15.5
12.0
12.1

-2.5
0.7
-3.2
-3.1
-1.9
-2.3

Amounts Per Common ShareNet Income per ShareFY2017 Forecast（IFRS）
Full Year

Operating Income Ratio

39.9
16.8
17.0-

Return on Sales

12.8-

493.65130-

Gross Profit Ratio
SG&A Expenses Ratio ※2

Return on Equity-Amounts Per Common Share

230.76230.573,227.88
55

465.57465.25
3,405.20
120232.33232.203,570.31
65

0.7
0.7
4.8
18.2

※1

431.65431.393,722.90
130-7.3
-7.3
9.3
8.3

Net Income per Share
Diluted Net Income per Share

Shareholders' Equity
Dividend (interim)※1 Comparison with 4Q of FY2015※2 Excluding R&D

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13

Consolidated Financial Date-1（Unit： Person， Millions of Yen）

FY2015
Number of Employees
Full Year Comp.(%)
Manufacturing Division
628 (42.1 )R&D Division
209 (14.0 )Administration Div. & Business Di
653 (43.8 )Personnel Information

(MRs)

499

Total

1,490

Contingent employees (excluded)

1,027

Personnel Costs

Total

Full Year
19,987FY2016
Full Year Comp.(%)
1,612 (64.4 )
230 (9.2 )660 (26.4 )
500(100.0 )Sales(%)(16.2 )

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2,502582

Full Year
20,620(100.0 )-Sales(%)(15.6 )

Year on Year
Full Year
RC(%)
984( 156.7 )21( 10.0 )7(1.1 )
1(0.2 )
1,012
(67.9 )
-445(-43 )
RC(%)
Full Year633(3.2 )

14

Consolidated Financial Date-2（Unit： Millions of Yen）

Selling, General and
Administrative Expenses
R&D Expenses
Year on Year changes (%)
Advertisement Expenses
Year on Year changes (%)

Capital Expenditure &Depreciation and Amortization
Capital Expenditure

FY2015FY2016
Full Year /Sales(%) Full Year /Sales(%)
10,207 (8,019 (6.5 )7.7 )
31.3
27.3()()
2,074 (2,072 (1.7 )
1.6 )
-1.5
0.1()
()

FY2017 Forecast
Full Year/Sales(%)
8,300 (5.8 )‐()
1,500 (1.1 )-27.7()FY2015FY2016FY2017 Forecast

Full Year

Full Year

Full Year

24,294

13,97815,7005,336
834873
7,044

6,418
1,308
919
8,645

7,800
1,400
600
9,800

Depreciation and Amortization
Manufacturing Division
R&D Division
Administration Div. & Business Div.

Total

※ We expect to record 2,000 million yen of the R＆D costs to intangible fixed assets.

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15

Disclaimer• The plans, forecasts, strategies and other information regarding the Sawai Group contained in thispresentation are based on the Company’s assumptions and judgments using information available
at the time of publication. Therefor, due to potential risks and uncertainties, there is no guarantee
as to the accuracy of this information.
• Potential risks and uncertainties may include, but are not limited to, the economic environment forprescription drugs, which is the main operating domain of the Sawai Group, market competition andservices offered by the Group.

Contact Information

Sawai Pharmaceutical Co., Ltd.
Corporate Strategy Department
PR & IR GroupE-mail ： ir@sawai.co.jp
Copyright © 2017 Sawai Pharmaceutical Co., Ltd. All Rights Reserved.

16