Presentation of March 2012
Financial Results

May 10,2012
g Inc.
KYORIN Holdings,
President Masahiro Yamashita■Outline of Consolidated Financial Results
for the Year Ended March 31, 2012
■Initiatives
I ii iin
i FiscalFil 2012

Progress in the medium-term business plan,
Hope100 Stage1■Consolidated
C
Financial Results Forecast ffor the YearEnding March 31, 2012 and Dividends■Status of development pipeline

Progress in fiscal 2011 and initiatives in fiscal 20121

Outline of Consolidated Financial Results
for the Year Ended March 20122

Outline of Consolidated Financial Results for theYear Ended March 2012
（ Units: ¥ billion ）FY10(actual)FY11(actual)change% change

Change(forecast)

Net Sales

104 1
104.1

103 2
103.2

△0 9
△0.9

△0.8%

△1 9
△1.9

Operating
Income

16 4
16.4

14 5
14.5

△1 9
△1.9

△12 0%△12.0%△0 4△0.4

Ordinary
Income

17.1

15.3

△1.8
1.8

△10.7%△0.3
0.3

Net Income

10.9

9.2

△1.7

△15.5%△0.9

3

Increase/Decrease of Segment Sales(Consolidated)
FY10(actual)FY11(actual)change% change

Change(forecast)

104.1

103.2

△0.9

△0.8%

△1.9

101.3

100.7

△0.6

△0.6%

△1.5

88 0
88.0

88 0
88.0

△0 0
△0.0

△0 0%
△0.0%

△0 3
△0.3

Japan

85.3

86.0

＋0.7

＋0.8%

△0.2

Overseas

2.7

2.0

△0.7

△26.4%△0.1

Generic drugs

8.9

8.7

△0.2

△2.4%

△1.0

Over-the-counter drugs

4.4

4.0

△0.4

△8.9%

△0.2

2.8

2.6

△0.2

△7.9%

△0.2

（ Units: ¥ billion ）Net Sales (total)

Ethical drugs
business

Sales of new
ethical drugs

Healthcare Business
Breakdown of sales

Change(actual)new ethical drugs(Japan)＋0.7

・increase of Kipres and Uritos
・Overall sales growth in mainstay products dampened by the March 2011 disaster△0.2

・Pentasa and Uritos underran forecast

new ethical drugs(Overseas)△0.7

・decrease of Gatifloxacin’s sales.

△0.1・Gatifloxacin’s sales underran forecast

Generic drugs△△0.2・decrease of wholesaler route sales and contract manufacturing’s
manufacturing s sales
in association with the Great East Japan Earthquake.

△△1.0

・stragetic products and supplementary products underranforecast.

Over-the-counter drugs△0.4・decrease of allergy drug

△0.2・allergy drug underran forecast.

Healthcare Business△0.2

・decrease of Dr.Program’s sales△0.2

・Dr.Program’s sales underran forecast.

Explanation of Variances

Change(forecast)

Explanation of Variances

4Breakdown of Gain and Loss
FY10
(actual)FY11(actual)change% change

Change(forecast)

Net Sales

104.1

103.2

△0.9

△0.8%

△1.9

Cost of Sales

37.6

36.9

△0.7

△1.7%

－

SG&A

50 1
50.1

51 8
51.8

＋1 7
＋1.7

＋3 5%
＋3.5%

－

R&D Expenses

12.5

14.0

＋1.5

＋11.8%

△0.2

37 6
37.6

37 9
37.9

＋0 3
＋0.3

＋0 8%
＋0.8%

－

Operating Income

16.4

14.5

△1.9

△12.0%△0.4

Ordinary Income

17 1
17.1

15 3
15.3

△1 8
△1.8

△10 7%△10.7%△0 3△0.3

Net Income

10.9

9.2

△1.7

△15.5%△0.9（ Units: ¥ billion ）SG&A Expensesp(excluding R&D Expenses)≪change actual≫changeforecast

Explanation of Variances

Net Sales△1.9

new ethical drugs(Japan)△3.0 , Generic drugs△1.0 , Over-the-counter
drugs△0.2 , Healthcare Business△0.2

Operating
Income△△0.4

Save R&D expense(△0.2)
expense(△0 2) and SG&A expense to avoid the decrease ofoperating income.

Net income△0.9

Amortized deferred tax asset due to the tax system revision.

5

Highlights of Business Performance（ Units: ¥ billion ）Highlight ①◇ Net Sales decreased ¥0.9 bln

Cost of Sales

Cost of Sales

37 6
37.6

36.9
16.6

Cost of Sales ratio

Highlight
g g ②

35.8%

◇Cost of Sales declined ¥0.7 bln.
・Increased sales of in-house productswith lower Cost of Sales・a rise in the factory operation ratio
・a decrease of manufacturing cost

R&D

◇Gross profit decreased(¥0.2bln year on year).

Cost of Sales Ratio

36.1%

Net sales

Net sales

R&D

103.2

12.5
SG&A

50.1

SG&A
(excluding R&D)

37.6
Operating Income

14.0
SG&A

Highlight ③◇SG&A Expenses
E
increasedid ¥1.7bln¥1 7blyear on year.
(excluding R&D)
(Of SG&A Expenses, R&D Expenses
increased ¥1.5bln.)
37.9⇒Progress in development pipeline
Operating Income

SG&A

51.8

◆Operating Income decreased¥1.9 bln

FY10

FY11
6

Increase/Decrease of Mainstay Product Sales（ Units: ¥ billion ）Kipres
Mucodyne
Pentasa
UritosGatifloxacin（Over seas)

FY10( t l)(actual)FY11( t l)(actual)changeg% changeg

Change(forecast)

34.5
21.3
19.4
5.5

36.8
21.5
18.0
6.3

＋2.3

+6.5%

＋0.1

＋0.2

+0.8%

＋0.2

△1.4

△7.4%

△0.6

＋0.8

+15.1%

△0.3

22
2.2

17
1.7

△0
△0.5

△25.6%△△0.0【 For reference 】
Year on year rate of sales for medical institution（ calculated based on drug price）

Kipres＋11.9%

Mucodyne＋3.1%

Pentasa△5.7%

Uritos＋22.9%(※ ⓒ 2012 IMS JAPAN K.K., Source : JPM,April 2011－March 2012 Unauthorizedcopying prohibited)

7

Initiatives in Fiscal 2012
Progress in the medium-term
medium term businessplan, Hope100 Stage1

8

Business Strategies Under Medium-TermBusiness Plan, HOPE100 Stage 1

Multi-core Strategy (MC Strategy)-DiversifyDi
if theth Consumer
C
Healthcare
H lth
B
Businessi
C
Centeringt i on th
the Ethi
Ethicall D
DrugEthicall D
Ethi
Drugs
Business

Consumer
Healthcare
Business

Pharma Complex Model（PC model ）Multi-faceted business development

Cultivate existing businesses andcreate new businesses(New Drugs, Original Drugs,
Ggeneric drugs)

FY2015 target ： Net Sales¥140.0bln Operating income¥20.0bln
9Implementing the Pharma Complex (PC) Model

New Drugs
Group：◇Maximize the penetration of key products((Kiprespand Uritos))◇Enhance the Development PipelineOriginal Drugs
Group:◇Seek to improve the product value and extend the life cycleof key products (Mucodyne and Pentasa)

Generic Drugs
Group:
G
oup◇Promote domestic and overseas alliances to enhancepproduct
lineupp and lower costs◇Leverage stronger ties within the KYORIN Group to promotea more distinctive generics business10

【New Drugs】 Kipres
Kipres 【Bronchial asthma andallergicll i rhinitis
hi iti ttreatment】
tt】
Net sales(¥bln)■initiatives in FY2012
zEstablish position as base drug for treatment
g rhinitis(perennial(pand seasonal)) andof allergic
growth in new prescriptions

zFurther promote prescription for adult andchildhood asthma
From fine granules to chewable tablets and tablets
10mg

zIncreased market share for LT antagonists
31.3%（March 2011 MAT） ⇒ 33.3%（March 2012MAT）(Source: IMS JAPAN K.K., JPM, March 2011/March 2012 MAT. Unauthorizedcopying prohibited)※price rivision rate 7.9％

■FY2015 target net sales ： at least ¥40.0bln

11

【New Drugs】 Uritos
Uritos 【Overactive bladder】
Net sales(¥bln)■initiatives in FY2012
zExpand Uritos’s share of OAB market.
9 3%（March 2011 MAT）⇒10
9.3%（March
MAT）⇒10.7%（
7%（ March 2012 MAT ）Product differentiation and proposal for first choiceprescription

zUncovering potential markets
OAB market：¥60bln（March 2011 MAT）⇒¥64bln（March 2012 MAT）
Imidafenacin’s
Imidafenacins share：19.3%（March 2011 MAT）⇒21.1%（March 2012 MAT）
(Source: IMS JAPAN K.K., JPM, March 2011/March 2012 MAT. Unauthorizedcopying prohibited)※price rivision rate 0.5％

■FY2015 target
g net sales ： ¥10.0bln
12

【Original Drugs】 Mucodyne
Mucodyne 【 Mucoregulating drug】
Net sales(¥bln)■initiatives in FY2012
zMaximize uptake and prescriptions of new
formulation 「DS50％」zIncrease prescriptions for chronic conditions
based on EBM.

bronchial asthma , chronic bronchitis ,chronic sinusitis
zExpand share of expectorant market.
47.9%（March 2011 MAT）⇒48.8%（March 2012 MAT）
(Source: IMS JAPAN K.K., JPM, March 2011/March 2012 MAT. Unauthorizedcopying prohibited)※price rivision rate 6.4％

■FY2015 target
g net sales ： ¥24.0bln
13

【Original Drugs】 Pentasa
Pentasa【 UlcerativeUl
ti colitis
liti anddC
Crohn’sh ’ didisease ttreatmenttt】
Net sales(¥bln)■initiatives in FY2012
zEstablish basic prescription for ulcerative
colitis.
（ Popularize prescription of 4g for active periods ）zIncrease prescriptions for new dosage anddose regimen (once-a-day administration) .
（UC remission period ）zMesalazine market expanded 12.5%¥28bln（March 2011 MAT） ⇒ ¥31bln（2012年3月MAT）
share of pentasa ：75.1%（March 2011 MAT）⇒63.0%（March 2012 MAT）
(Source: IMS JAPAN K.K., JPM, March 2011/March 2012 MAT. Unauthorizedcopyingi prohibited)
hibit d)

■FY2015 target
g net sales ： ¥19.0bln

zDevelopment of new drug formulation(suppositories).
※ UC : short for ulcerative colitis※ price rivision rate 5.5％
14

【Overseas】 Gatifloxacin
Gatifloxacin【Anti-bacterial eye drops】■initiatives in FY2012

Net sales(¥bln)

zPromote sales of high concentration( y Allergan).
g )formulations of Gatifloxacin(bySales of Zymar and Zymaxid ：FY2010 $99.8MM ⇒ FY2011 $92.6MM

15

【Generics Drugs】 Status of Kyorin Rimedio
Net sales(¥bln)

Net sales

initiatives in FY2012
Promotion of Domestic and overseas alliances
・Promote in-house development and contracting
work (secure new clients for contracted supply)■Net Sales● increase of stragetic products
・Amlodipine , Donepezil etc.
※

●Market Large-scale Supplementary Items andReach Objectives
・ soporific , antihypertensive etc.

Net sales(¥bln)

Operatingincome■Operating income● reduce cost of sales
・Ensure approval for products developed in-house and launchthem ((promotetht contractingt ti work)k)・Correct the product mix to deliver higher sales of highly
profitable products
・Aim for lower purchase prices for key ingredients● SG&A Expenses
E・Continue to invest for sustainable growth※Associated with the integration of the wholesale trade channel into KYORIN
Pharmaceutical (October 1), beginning inventories are posted in sales(¥0.6bln).

16

Market of respiratory and our product≪FCarea≫≪pipeline≫≪market size≫（ Units: ¥ billion ）KRP-AM1977Y

infection
otolaryngology
t l
l

100.0

KRP-AM1977X

COPD
KRP-AB1102F

respiratorypy

KRP AB1102
KRP-AB1102

Inhalant
anti-asthmatic

130.0
400.0

KRP-108

LT antagonist
urology

170.0

Kipres
Mucodyne

Mucoregulating
drug

17

Consumer Healthcare Business((Over-the-counter Drugs
g + Skincare )Medium-Term Business Plan,「HOPE100
HOPE100 Stage 1」
Skincare Business
Make profitable and promote growth(incl. development in Asian market)

Net Sales of Consumer Healthcare
Net sales(¥bln)

Milton Business,
Business Others
New business development leveraging
the Milton brandNew Business Creation
Strive to realize corporate philosophy andcreate new businesses to become core
drivers in the future((Participationpin Environmental HygieneygBusiness)
18

New Products:
Multi-purpose disinfectant cleanerpand strong
g disinfecting
gp
power●Product Features: ¾Broad antibacterial spectrum¾Conbines disinfection and cleaning in a single operation¾Changes color to show effectiveness●Applications: ¾Medical institutions, nursing care facilities, and other sites requiring
hygiene control by disinfecting surfaces in the environment●Sales: ¾KYORIN Medical Supply Co., Ltd., KYORIN Pharmaceutical Co., Ltd.

Preparation(dissolve in water)

Set wipes in the container

Allow preparation
to soak in

Pull out a wipe and use
to clean surface

19

Kyocurmin :high bioavailability curcumin compound supplement
Attention on curcumin as a new supplement ingredient[What is Curcumin?]・A substance with a wide range of reported beneficial effects from ongoing
medical research・Low bioavailability has been a standing issue

Launch of high bioavailability curcumin
Launch of products using “high bioavailability curcumin,” created by applying special technology to crush
and process low bioavailability curcumin bulk powder● Product features ¾Dramatic improvement in bioavailability (approx. 27 times greater) through powderizing
technology¾1 tablet contains 30mg of high bioavailiability curcumin¾F convenience,i
ld iin either
ith soft
ft gum or capsulel fform¾For
sold¾Supports health particularly for users who are frequently in situations where alcohol isconsumed● Sales
OnlinePharmaceuticalCo., LtdLtd.
S l :Oli salesl channelhl off KYORIN Ph
ti l C[Reference: KYORIN ONLINE SHOP of KYORIN Pharmaceutical Co., Ltd.]

http://www.kyorin--onlineshop.com/
http://www.kyorin

20Consolidated Financial Results Forecast
for the Year Ending March 31,
31 2013 andDividends

21

Consolidated Financial Results Forecast
for the Year Ending
g March 31,, 2013
FY11
(Actual)

FY12(forecast )Change% Change

103 2
103.2

104 7
104.7

＋1 5
＋1.5

+1.4%
1 4%

100.7

102.0

＋1.3

+1.4%

2.6

2.7

＋0.1

+3.8%

Operating Income

14.5

17.9

＋3.4

+24.0%

Ordinary Income

15.3

18.5

＋3.2

+21.4%

9.2

11.8

＋2.6

+28.5%（ Units: ¥ billion ）Net Sales (total)

Ethical drugs
business
Healthcare
Business

Net Income
ChangeVS original
forecast

Explanation of Variances＋1.5

Net Sales(total)new ethical drugs (Japan)

＋0 7
＋0.7

Increase of New drugs(Kipres and Uritos)

new ethical drugs (Overseas)

△0.0

－

Generic drugs＋0.8

expand of strategic products and supplementary products’s sales

Over the counter drugs andOver-the-counter
others

△0 2
△0.2

－

Heaith care(skin care)

＋0.1

－

＋3.4

reduction of R&D expenses ¥ 2.9 bln.

Operating Income【 For reference 】
・Cost of Sales Ratio: remain mostly
level
・SG&A Expenses Ratio: remain mostly
level

22

Forecast of Mainstay Product Sales and Generic Drugs（ Units: ¥ billion ）

FY11

FY12
(forecast)change% change

Kipres

36 8
36.8

37 9
37.9

＋1 1
＋1.1

+3 1%
+3.1%

Mucodyne

21.5

21.3

△0.2

△0.4%

Pentasa

18.0

17.0

△1.0

△5.1%

U it
Uritos

63
6.3

76
7.6

＋1 3
＋1.3

+20.4%
20 4%

Gatifloxacin

1.7

1.5

△0.2

△4.7%

Generic Drugs

8.7

9.5

＋0.8

+10.0%
23

Shareholder Returns
Basic Policy
The Company seeks to enhance its management base by balancing investments
for growth and business continuity with shareholder returns. To this end, theCompany aims for a consolidated payout ratio to shareholders of 30%.

Net Income
FY10

FY11
(forecast)

FY11(actual)

FY12(forecast)

10.9

10.1

9.2

11.8

FY10

FY11
(f
(forecast)t)

FY11( t l)(actual)FY12(f(forecast)t)

Dividend per share (Yen)

45.00

45.00

45.00

50.00

Consolidated payout ratio(%)

30 8％
30.8％

33 3％
33.3％

36 4％
36.4％

31 7％
31.7％

Net Income

Dividends24

■ These forecast performance figures are based on information currently
available to the Company and may include uncertain factors or risk that
affect
ff t our future
f t
performance.
fAccordingly, actual business results may materially differ from theforecasted figures due to various factors in the future.

25