Summary Report of Consolidated Financial Results
For the Nine Months Period ended December 31, 2018
February 7, 2019stCompany name: NIPRO CORPORATION
TSE-1 section
Code No.8086
URL: http://www.nipro.co.jp/
Representative: Yoshihiko Sano, President and Representative Director
Contact person: Takehito Yogo, Managing Director of Corporate Planning Headquarters
TEL: (06)6372-2331
Filing date of quarterly reporting: February 14, 2019
Payment date of cash dividends: Supplemental material on quarterly reporting: No
Presentation on quarterly results: No(Note: Amounts less than one million yen are rounded down)
1. Consolidated Results for the Nine Months ended December 31, 2018 (From April 1, 2018 to December 31, 2018)(1) Consolidated Results of Operations(%: Changes from the corresponding period of the previous fiscal year)
Profit attributable to
Net Sales
Operating Income
Ordinary Income
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
9 months ended
December 31, 2018
9 months ended
December 31, 2017
Note: Comprehensive income

321,312

9.3

20,411(1.8)

18,772(6.7))

9,852(28.7)

293,869

8.8

20,775(20.5)

20,118(15.1)

13,824(1.8)

9 months ended December 31, 2018: (2,323) million yen (- %)9 months ended December 31, 2017: 24,997 million yen (- %)Yen

Diluted Earnings
per share
Yen

59.62

54.03

83.16

75.41

(2) Consolidated Financial Position
Total Assets
Millions of yen
As of December 31, 2018845,887
As of March 31, 2018826,447

Net Assets
Millions of yen
171,345
183,485

Earnings per share
9 months ended
December 31, 2018
9 months ended
December 31, 2017

Note: Equity

2.

December 31, 2018: 160,557 million yen

%
19.0
20.9

March 31, 2018: 172,621 million yen

Dividends
First-quarter
Yen

Annual Dividends per Year
Year-end
Second-quarter
Third-quarter
Yen
Yen
Yen
17.50
11.00
19.00

Year ended March, 2018Year ending March, 2019Year ending March, 2019
(Forecast)
Note: Revisions to the forecast of cash dividends in the current quarter: No

3.

Equity Ratio

-

13.00

Total

Yen
28.50
32.00

Forecast of Consolidated Financial Results for the Year ending March 31, 2019 (From April 1, 2018 to March 31, 2019)(%: Changes from the corresponding period of the previous fiscal year)
Profit attributable
OperatingEarnings
Net Sales
Ordinary Income
to owners of
Incomeper Share
parentMillions of yen%
Millions of yen%
Millions of yen%
Millions of yen%
Yen
Year ending March 31, 2019428,200
8.3
24,900 (8.1)
24,1006.2
14,700 (24.3)
89.40

Note: Revisions to the forecast of consolidated financial results in the current quarter: No

*Notes(1) Change in Significant Subsidiaries during the Current Period: No(Change in specified subsidiaries caused a change in the scope of consolidation)
Additional: 0Removal: 0(2) Adoption of Accounting Treatments Simplified or Unique for Preparation: No(3) Change in Accounting Policies and Accounting Estimate and Restatement[1] Changes in accounting policies by a newly issued accounting pronouncement: No[2] Changes other than [1]: No[3] Change in accounting estimate: No[4] Restatement: No(4) Issued Shares (Common stock)[1] Number of issued shares at the end of the period (including treasury stock):
9 months ended December 31, 2018:

171,459,479 sharesYear ended March 31, 2018:

171,459,479 shares[2] Number of treasury stock at the end of the period:
9 months ended December 31, 2018:

8,361,772 sharesYear ended March 31, 2018:

5,037,124 shares[3] Average number of shares during the period:
9 months ended December 31, 2018:

165,255,115 shares

9 months ended December 31, 2017:

166,240,193 shares

Note: Number of the treasury stocks as of March 31, 2018 included 196,100 shares owned by Trust and Custody
Service Bank, Ltd (Trust Account E).

*This quarterly summary report is exempt from quarterly review procedure based on the Financial Instruments
and Exchanges Act.
*Disclaimer regarding projection information including appropriate use of forecasted financial result, and otherspecial notes
The projection figures shown above are based on information that was available at the time of preparation and may
contain certain uncertainties. Actual performance and other factors may differ from these projections due tochanges in circumstances and other developments. More information concerning these forecasts can be found in P.4“1. Qualitative Information for the Nine-Months Period Ended December 31, 2018 (3) Commentary on
Forward-Looking Statements Including Forecast of Consolidated Financial Results” in the attachment.

Table of Contents

1.

2.

Qualitative Information for the Nine-Months Period ended December 31, 20182

(1) Commentary on Business Results

2(2) Analysis Concerning Financial Position

4(3) Commentary on Forward-Looking Statements Including Forecast of Consolidated Financial Results

4

Quarterly Consolidated Financial Statements and Major Notes

5(1) Quarterly Consolidated Balance Sheets

5(2) Quarterly Consolidated Statements of Income
and Quarterly Consolidated Statements of Comprehensive Income(3) Notes Regarding Quarterly Consolidated Financial Statements

79(Notes Regarding Going Concern)

9(Notes Regarding Significant Changes in the Amount of Shareholders’ Equity)

9(Additional Information)

9(Segment Information)

9

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1.

Qualitative Information for the Nine-Months Period ended December 31, 2018

(1) Commentary on Business Results
The global economy, during the third quarter of the consolidated cumulative period, saw increased instability as
countries turned inwards and adopted protectionist policies, against the backdrop of a United States-China trade war,heightening the sense of uncertainty about the future. Meanwhile, in the Japanese economy, corporate earnings
continued to recover steadily.
There was a significant impact in the medical device and pharmaceutical industries from the 2018 drug price revisions.
Conditions are harsher as drug price revisions continue annually, with further planned in accordance with the revision of
the consumption tax scheduled for October of this year. Even under these circumstances, the Nipro Group has madeefforts to achieve top share in Japan, increase international sales and cut production costs, and worked to improvebusiness performance, advancing the development of the products which are more concerned about the users.
As a result, sales for the third quarter of the consolidated cumulative period increased YoY by 9.3% from the same
period of the previous year to 321,312 million yen. Despite increased profit owing to increased sales absorbing an impact
from the revised drug prices, operating profit decreased by 1.8% YoY to 20,411 million yen due to an intercompany profit
deduction amount of 2,287 million yen in inventories this quarter compared to an amount of 668 million yen in the same
period of the previous year (as a result of revisions to transaction prices within the Group and changes to some
distribution channels), and due to higher research and development costs and other running expenses. Furthermore,while 959 million yen in gains on foreign exchange were recorded in the same period of the previous year as the yen
remained weak in relation to major currencies, this quarter 1,175 million yen in losses on foreign exchange were recorded
as the yen gradually strengthened and the Turkish lira and Indian rupee weakened. Accordingly, ordinary profit
decreased by 6.7% YoY to 18,772 million yen. Moreover, while corporate income tax was low in the same period of theprevious year due to the tax effects of the merging of unprofitable subsidiaries, this quarter income tax relatively
increased YoY owing to the reduction in loss-making subsidiaries. As a result, the third quarter profit attributable toowners of parent decreased YoY by 28.7% to 9,852 million yen.
The overview of the results for the third quarter of the consolidated cumulative period by business segment is asfollows.
From the first quarter of this fiscal year, we made changes to the reporting segments. For more information, pleaserefer to “2. Notes Concerning Changes to Reporting Segments” under “2. Quarterly Consolidated Financial Statements
and Major Notes, (3) Notes Regarding Quarterly Consolidated Financial Statements, (Segment Information), II Ninemonths ended December 31, 2018”. The following year-on-year comparisons have been calculated using numericalvalues of the same period last year which have been rearranged into the revised segments.

(i)

Medical-Related Business
The market environment in domestic sales became severe as medical fees and drug prices were revised in April of lastyear. Under these circumstances, in the Medical Sales Division, sales remained solid in each category of
injection-transfusion products, enteral-alimentation products, testing products, dialysis products, and cardiovascular
products and cardiac surgery (CVS) products. Sales growth was particularly high for SAFETOUCH™ infusion system
next to HDF filters (dialysis products) and dialysis machines. In the Pharmaceutical Sales Division, sales showedfavorable increase owing to strengthened sales promotion of anti-allergic agent Bepotastine Besilate (TALION AG).
In addition, sales of oral and external use drugs and sales of injection grew mainly centered on dispensing pharmacies
and DPC hospitals, respectively, owing to the effects of collaborations with pharmaceutical wholesalers. Moreover, inregard to regenerative medicine, for the “autologous bone marrow mesenchymal stem cells for use in spinal cord injury
treatments” (Investigational drug identification code: STR01) that we are jointly developing with Sapporo Medical
University and submitted an application to the Ministry of Health, Labour and Welfare for the manufacture and sales
approval as a “regenerative medicine product” on June 29 of last year, we obtained approval with conditions and time-2-

limit on December 28 of the same year.
Meanwhile, overseas, as a result of proactive sales activities around the world, sales of dialysis machines remained
favorable and accordingly sales of mainstay dialysis products such as dialyzers grew steadily. Moreover, in regard to
hospital products, we launched diffusion brand syringes for developing countries and it helped to increase sales. In Latin
America, our self-established dialysis centers operated smoothly and contributed greatly to sales through the provision of
optimum treatment environments rooted in the local area as well as medical technology and training facilities. In Malaysia,
the sales base moved to the new office with a training center for healthcare professionals. In addition, we established a
new sales base in Brazil and are continuing to reinforce direct selling system. Going forward, we will continue quickly
responding to front line needs through the enhancement of direct sales, working to enhance customer satisfaction andexpand sales.
Regarding our overseas production bases, the two-line framework for dialyzer production at the factory in Hefei/China
operated smoothly and profitability was greatly enhanced as a result of enhanced productivity. At the same time asstarting the operation of a second line at our factory in India this year, we will strengthen the overseas production
framework of dialyzers, such as by continuing to add third lines, and will build a framework which can supply high-quality
products globally without delay. As a result, net sales of this business increased 12.0% YoY to 247,883 million yen.

(ii)

Pharmaceutical-Related BusinessIn the Pharmaceutical-Related Business, we have promoted the contract manufacturing and contract development ofpharmaceuticals to respond accurately to the diverse needs of our corporate customers. We have focused on proposals
for the comprehensive contract manufacturing of oral, injection and external use drug formulations manufacturable by the
Nipro Group in addition to various highly pharmacologically active formulations such as antibiotics, steroids, andcarcinostatic agents. Furthermore, we have also focused on the manufacturing of investigational drugs and the contract
services for inspection and packaging. Moreover, we have also been proactive in the proposal-based sales of the use andset-packaging proposals of pharmaceutical containers and administration systems which we have developed and forwhich we own production frameworks.
As a result, net sales of this business increased 0.5% from the previous year to 46,548 million yen.

(iii) PharmaPackaging BusinessIn the PharmaPackaging Business, which handles primary containers as well as medical devices such as devices forthe preparation and administration of pharmaceuticals, we delivered a framework which can contribute to the lifecycle
management of pharmaceuticals through one-stop solutions.
Overseas, sales in China was continually affected by production adjustment due to shortage of drug supply inpharmaceutical companies, however, sales of high-quality vials and ampules increased year on year. In Europe and theUnited States, sales of syringes in Germany, glass tubes in France and vials in the United States grew significantly.
Moreover, exports of vials and ampules rose solidly in Russia. In India, the new processing plant with state-of-the-art
equipment started its operation in Pune, Maharashtra.
In Japan, sales of vials and rubber stoppers were favorable and we had also secured consistent sales of glass tube.
While the switching to new mat components and inventory adjustments impacted sales of thermos bottles, going forward,
we will strive toward recovery by enhancing assembly manufacturer inventory sales. As to medical device, sales of dental
special needles and injection system showed favorable increase. At the Biwako Plant, we are thoroughly improving quality
and further automation and efficiency, and optimizing the production environment through the introduction of new
equipment.
As a result, net sales of this business increased 2.7% YoY to 26,856 million yen.
As a comprehensive manufacturer of pharmaceutical packaging materials which covers any pharmaceutical materials,-3-the PharmaPackaging Business Division will continue to strive to expand business by developing and introducing
advanced products to the market that meet medical needs of countries all over the world.

(iv) Other BusinessAmong other business, net sales from the real-estate rental business, etc. were 23 million yen (up 5.6% YoY).

(2) Analysis Concerning Financial Position
Assets, liabilities, and net assets
Total assets increased 19,440 million yen from the end of the previous consolidated fiscal year to 845,887 million yen at
the end of the third quarter under review. Current assets increased 15,674 million yen and noncurrent assets increased
3,765 million yen. The main reason for the increase in current assets was an increase of 13,581 million yen in notes andaccounts receivable-trade, and the main reason for the increase in noncurrent assets was an increase of 7,722 million yen
in Buildings and structures, net.
Total liabilities increased 31,580 million yen from the end of the previous consolidated fiscal year to 674,541 million yen.
Current liabilities increased 23,080 million yen and noncurrent liabilities increased 8,500 million yen. The main reason for
the increase in current liabilities was an increase of 19,072 million yen in short-term loans payable, and the main reason
for the increase in noncurrent liabilities was an increase of 9,700 million yen in Bonds payable.
Total net assets decreased 12,139 million yen from the end of the previous consolidated fiscal year to 171,345 million
yen. Shareholders' equity increased 73 million yen and accumulated other comprehensive income decreased 12,137
million yen. As a result, equity ratio decreased by 1.9% from the end of the previous year to 19.0%.

(3) Commentary on Forward-Looking Statements Including Forecast of Consolidated Financial Results
At this moment, we have not made any revision to the forecast of consolidated financial results for the year ending March
31, 2019, which was announced on November 6, 2018.

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2. Quarterly Consolidated Financial Statements and Major Notes(1) [Quarterly Consolidated Balance Sheets](Millions of yen)
As ofMarch 31, 2018
AssetsCurrent Assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation and impairment loss
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation and impairment loss
Machinery equipment and vehicles, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Other
Accumulated depreciation and impairment loss
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Leased assets
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

- 5 -

As of
December 31, 2018

141,940
140,511
89,146
11,431
28,64018,854(1,437)429,087

132,205
154,092
92,802
12,22030,631
24,131(1,321)
444,762

207,198(98,987)
108,211258,817(180,543)
78,27332,0793,707(2,746)960
37,53754,423(41,213)
13,210270,273

220,262(104,328)
115,934
268,240(190,895)
77,34434,013
5,293(2,951)
2,341
37,14558,361(44,197)
14,164
280,944

27,3582,366
16,26845,99425,3182,236
18,11545,67062,936
10,354
12,644(4,844)81,091
397,359
826,447

55,342
11,626
10,716(3,176)74,510401,124
845,887(Millions of yen)
As ofMarch 31, 2018
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Commercial papers
Current portion of bonds
Lease obligations
Accounts payable-otherAccrued directors' bonuses
Income taxes payable
Provision for bonuses
Provision for directors' bonuses
Notes payable-facilities
Other
Total current liabilities
Non-current liabilities
Bonds payable
Convertible bond-type bonds with share acquisition rights
Long-term loans payable
Lease obligations
Deferred tax liabilities
Net defined benefit liability
Provision for directors' retirement benefits
Provision for loss on litigation
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

- 6 -

As of
December 31, 2018

62,105
117,666
10,0001,215
1,198
16,461
328
4,993
4,364
131
11,304
21,415
251,184

70,714
136,738
10,000900
1,336
12,739
－
3,461
5,788
408
9,226
22,951
274,264

5,000
25,000350,517
2,544
473
4,530
647
202
2,861
391,776
642,961

14,70025,000347,507
3,762
263
4,741
700
223
3,377
400,276
674,541

84,397
83,570(6,004)
161,963

84,39788,465(10,826)
162,036(712)(69)
11,40436
10,658
10,863
183,485
826,447(7,137)
(9)
5,590
78
(1,478)
10,787
171,345845,887

(2) [Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income]Quarterly Consolidated Statements of Income(Millions of yen)
Nine months ended
December 31, 2017
(From April 1, 2017
to December 31, 2017)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividends income
Foreign exchange gains
Share of profit of entities accounted for using equity method
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
State subsidy
Gain on sales of investment securities
Gain on bargain purchase
Other
Total extraordinary income
Extraordinary loss
Loss on sales of non-current assets
Loss on retirement of non-current assets
Loss on reduction of non-current assets
Impairment loss
Compensation expenses
Custom duty for prior periods
Other
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent- 7 -Nine months ended
December 31, 2018
(From April 1, 2018
to December 31, 2018)

293,869
199,475
94,39373,618
20,775321,312
222,092
99,22078,80820,411

430
983
959
117
1,157
3,648

527
1,082
－
63
1,622
3,295

2,580
－
1,725
4,305
20,118

2,470
1,175
1,289
4,935
18,772

60
590
735
－
1
1,386

124
557
0
317
0
999

218
254
590
55
1,012
－
629
2,760
18,7446,850(2,371)
4,478
14,265440
13,824

32
134
114
606
19
468
440
1,818
17,953
6,706
1,279
7,986
9,967
114
9,852

Quarterly Consolidated Statements of Comprehensive Income
Nine months ended
December 31, 2017
(From April 1, 2017
to December 31, 2017)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income ofentities accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income
attributable to owners of parent
Comprehensive income
attributable to non-controlling interests- 8 -Nine months ended
December 31, 2018
(From April 1, 2018
to December 31, 2018)14,265

9,967

8,921
47
1,717
167
(122)

(6,424)59(5,832)33(127)

10,731
24,997
24,574(12,291)(2,323)(2,284)423(38)

(3) Notes Regarding Quarterly Consolidated Financial Statements(Notes Regarding Going Concern)
N/A(Notes Regarding Significant Changes in the Amount of Shareholders’ Equity)
Based on a resolution passed on July 3, 2018, at the meeting of the board of directors, the Company acquired treasury
stocks of 3,520,600 shares. Due to the acquisition, treasury stocks increased by 4,821 million yen during the third quarterof the consolidated cumulative period ended on December 31, 2018 to 10,826 million yen as of the end of the period.
(Additional Information)
Application of Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.
The company has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ
Statement No. 28, February 16, 2018) from the beginning of the first quarter of the consolidated cumulative period. Dueto this application, deferred tax assets are presented under investments and other assets and deferred tax liabilities arepresented under non-current liabilities.
(Segment Information)
Ⅰ
1.

Nine months ended December 31, 2017 (From April 1, 2017 to December 31, 2017)
Sales and Profit by Reportable Operating Segment(Millions of yen)Segment
Other(Note.1)

Adjustment(Note.2)

Quarterly
Consolidated
StatementsofIncome(Note.3)

MedicalRelated

PharmaceuticalRelated

PharmaPackaging

221,378

46,327

26,141

293,847

22

293,869－

293,869

1,244

10,5203,811

15,576801

16,378(16,378)－

222,62256,84829,952309,424823

310,248(16,378)

293,869

27,7358,234

414

36,38442

36,427(15,651)

20,775

Total

Total

Net sales(1)Sales to third
parties(2)Inter-segment
sales andtransfers

Total
Segment profit(loss)(Notes)1. “Other” is the business segment which is not included in the segment and consist of real estate income and sales byheadquarter.
2. Adjustment for the segment profit (loss) of (15,651) million yen includes deduction of intercompany profits oninventories of (668) million yen and corporate cost of (14,983) million yen. Corporate cost primarily consists ofgeneral and administrative expenses and research and development cost which do not belong to the reporting
segment.
3. Segment profit (loss) is adjusted to the operating income on the quarterly consolidated statements of income.

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Ⅱ
1.

Nine months ended December 31, 2018 (From April 1, 2018 to December 31, 2018)
Sales and Profit by Reportable Operating Segment(Millions of yen)Segment
Other(Note.1)

Adjustment(Note.2)

Quarterly
Consolidated
StatementsofIncome(Note.3)

MedicalRelated

PharmaceuticalRelated

PharmaPackaging

247,883

46,54826,856321,28823

321,312－321,312

5,594

13,356

3,736

22,687

1,021

23,708(23,708)－

253,478

59,90430,593343,976

1,044

345,020(23,708)

321,31230,8527,505

610

38,967

81

39,049(18,637)

20,411

Total

Total

Net sales(1)Sales to third
parties(2)Inter-segment
sales andtransfers

Total
Segment profit(loss)(Notes)1. “Other” is the business segment which is not included in the segment and consist of real estate income and sales byheadquarter.
2. Adjustment for the segment profit (loss) of (18,637) million yen includes deduction of intercompany profits oninventories of (2,287) million yen and corporate cost of (16,350) million yen. Corporate cost primarily consists ofgeneral and administrative expenses and research and development cost which do not belong to the reporting
segment.
3. Segment profit (loss) is adjusted to the operating income on the quarterly consolidated statements of income.
2.

Notes Concerning Changes to Reporting Segments
Since the first quarter of this fiscal year we have performed a comprehensive development of thePharmaPackaging business and, in order to enhance the synergy effects with pharmaceutical sales, we carried out
organizational changes. As a result of this change, some business divisions previously categorized as
Pharmaceutical-Related have been included in PharmaPackaging.
The segment information for the period ended December 31, 2017 is prepared based on the reportable segment
after the reclassification.

3.

Information about Impairment Loss on Fixed Assets and Goodwill by Reporting Segments(Significant impairment loss on fixed assets)
During the third quarter of the consolidated cumulative period ended on December 31, 2018, impairment losses of
4 million yen and 602 million yen were recorded in Medical-Related segment and PharmaPackaging segment,
respectively.
(Significant gain on negative goodwill)
During the third quarter of the consolidated cumulative period ended on December 31, 2018, inPharmaceutical-Related segment, a gain on negative goodwill of 317 million yen resulting from the transfer ofbusiness from Mylan Seiyaku Ltd. was recorded.

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