Summary Report of Consolidated Financial Results
For the Three Months Period ended June 30, 2018
August 9, 2018stCompany 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: August 14, 2018
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 Three Months ended June 30, 2018 (From April 1, 2018 to June 30, 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%
3 months ended June 30, 2018
103,201
10.3
7,498
21.9
7,953 ( 27.4)
4,682
10.4
3 months ended June 30, 2017
4,242(－
93,5525.0
6,148(33.6)
6,241 ( 185.6)
Note: Comprehensive income

3 months ended June 30, 2018: (2,705) million yen (- %)

Yen
28.14
25.53

Diluted Earnings
per share
Yen
25.51
23.15

(2) Consolidated Financial Position
Total Assets
Millions of yen
As of June 30, 2018
810,876
As of March 31, 2018826,447

Net Assets
Millions of yen
178,773
183,485

Earnings per share
3 months ended June 30, 2018
3 months ended June 30, 2017

Note: Equity

2.

June 30, 2018: 168,268 million yen

3 months ended June 30, 2017: 10,352 million yen (- %)Equity Ratio
%
20.8
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

Year ended March, 2018Year ending March, 2019Year ending March, 201912.00
(Forecast)
Note: Revisions to the forecast of cash dividends in the current quarter: No

3.

-

18.00

Total

Yen
28.50
30.00

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
6 months ending Sept. 30, 2018
208,600 11.0
9,899 (13.9)
8,200 (30.4)
5,200 (37.2)
31.25
Year ending March 31, 2019
426,800
7.9
23,400 (13.6)
20,400 (10.1)
14,200 (20.0)
85.33

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):
3 months ended June 30, 2018: 171,459,479 sharesYear ended March 31, 2018:

171,459,479 shares[2] Number of treasury stock at the end of the period:
3 months ended June 30, 2018:

4,975,024 sharesYear ended March 31, 2018:

5,037,124 shares[3] Average number of shares during the period:
3 months ended June 30, 2018: 166,442,329 shares
3 months ended June 30, 2017: 166,173,181 shares
Note: Number of the treasury stocks as of June 30, 2018 included 134,000 shares, and 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 Three-Months Period Ended June 30, 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 Three-Months Period ended June 30, 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(Segment Information)

9

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1.

Qualitative Information for the Three-Months Period ended June 30, 2018

(1) Commentary on Business Results
The global economy, during the first quarter of the consolidated cumulative period, showed signs of a trade war
breaking out stemming from United States tariff policy, further increasing the sense of uncertainty about the future.
However, partially owing to foreign exchange levels against the yen keeping within expected ranges, the Japanese
economy saw a continuation of the gradual economic recovery as corporate earnings remained steady. The businessenvironment in the medical device and pharmaceutical industries became quite severe as drug prices were revised
significantly due to the 2018 medical fee revisions. Even under these circumstances, the Nipro Group has made efforts toincrease sales and cut production costs, and worked to improve business performance, advancing the development of
the products which are more concerned about the users.
As a result, sales for the first quarter of the consolidated cumulative period increased YoY by 10.3% from the same
period of the previous year to 103,201 million yen. As for profit, while impacted by the drug price revisions, the gross profit
margin improved YoY by 0.1% due to increased profit owing to increased sales. Furthermore, absorbing increased selling,
general and administrative expenses due to higher research and development costs, operating income increased by
21.9% YoY to 7,498 million yen and ordinary income rose 27.4% YoY to 7,953 million yen. Additionally, the first quarter
profit attributable to owners of parent increased YoY by 10.4% to 4,682 million yen due to an increase in corporate tax.
The overview of the results for the first quarter of the consolidated cumulative period by business segment is asfollows.
From the first quarter under review, we will make 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 Threemonths ended June 30, 2018”. The following year-on-year comparisons have been calculated using numerical values ofthe 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 thisyear. 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 HDF filters (dialysis products) anddialysis machines. In the Pharmaceutical Sales Division, despite an impact from the revised drug prices, sales of oral andexternal use drugs grew mainly centered on dispensing pharmacies, owing in part to the effects of collaborations withpharmaceutical wholesalers. Furthermore, in DPC hospitals, there was not only a switching from original drugs, but there
was also an increase in switching from the generic drugs of other companies, from a stable supply perspective. Moreover,in regard to regenerative medicine, on June 29 of this year we submitted an application to the Ministry of Health, Labourand Welfare for the manufacture and sales approval as a “regenerative medicine product” of the “autologous bonemarrow mesenchymal stem cells for use in spinal cord injury treatments” (Investigational drug identification code:
STR01) that we are jointly developing with Sapporo Medical University.
Meanwhile, overseas sales revenues displayed steady growth as a result of proactive sales activities around the world.
In North America, which we have positioned as one of our most important markets, we expanded sales throughstrengthening our partnership with a leading dialysis provider and, in Canada, CardioMed Supplies Inc., which we
acquired as a subsidiary in January of this year, contributed to an increase in sales. In China and India, sales of newmodel dialysis machines were favorable and accordingly sales of dialyzers also remained favorable. Furthermore, in
Latin America, Europe, Asia and Middle East, we expanded sales steadily. In Brazil, we established the fourth sales
office in the country in June of this year and are continuing to strengthen direct sales. Going forward, we will continue
quickly responding to front-line needs through the enhancement of direct sales, working to enhance customer satisfaction-2-and expand sales.
Regarding our overseas manufacturing facilities, the new dialyzer production line at our factory in Hefei/China is
operating smoothly and the structure for the new line at our factory in India was also completed. We are steadilyenhancing our overseas dialyzer production frameworks and will sequentially bring in equipment going forward.
As a result, net sales of this business increased 14.3% YoY to 79,257 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, as well as general formulations. Furthermore, we have also focused on the manufacturing ofinvestigational drugs and the contract services for inspection and packaging. Moreover, we have also been proactive inthe proposal-based sales of the use and set-packaging proposals of pharmaceutical containers and administration
systems which we have developed and for which we own production frameworks.
As a result, while production increased slightly year on year, net sales of this business decreased 7.5% from theprevious year to 14,818 million yen, due to the impact from switching to in-house manufactured products from products forother companies.

(iii) PharmaPackaging BusinessIn the PharmaPackaging Business, in order to enhance the synergy effects with pharmaceutical sales from April of thisyear, we have strategically promoted proactive technical sales activities aimed at capturing the needs and new demandsof our globalizing customers and the development of high-performance and high-quality products for medical devices suchas devices for the preparation and administration of pharmaceuticals and pharmaceutical packaging materials including
rubber, plastic and kit products. In addition, in terms of manufacturing, we have continued a reliable supply of high-quality
and high value-added products.
Overseas, while we faced difficulties mainly with ampoule sales due to the impact of inventory adjustments bypharmaceutical companies in response to governmental environmental regulations in China, sales of high-quality vials
grew due to strengthened technical sales, as the growth of the high-quality market accelerated. Furthermore, in the UnitedStates and Europe, German syringe sales drove a significant growth in sales.
In Japan, while a recovery in the sales of thermos bottles was delayed due to market conditions and assembly
manufacturer inventory adjustments, sales were favorable as a result of increased glass tube sales due to vaccine
production increases and a significant growth in sales of specialist medical device related products. Going forward, withthe addition of a new product group, we will focus on product sales, enhancing product competitiveness through realizing
product planning and development that further reflect the needs of our customers and strengthening our market share andprofitability through improving brand value. At the Biwako Plant, we are continuing to optimize the production environment
through the introduction of new equipment, aiming for a thorough quality enhancement. As a result, net sales of thisbusiness increased 11.3% YoY to 9,118 million yen. As a comprehensive manufacturer of pharmaceutical packaging
materials, the PharmaPackaging Business Division will continue to strive to expand business by developing andintroducing 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 7 million yen (down 6.9% YoY).

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(2) Analysis Concerning Financial Position
Assets, liabilities, and net assets
Total assets decreased 15,570 million yen from the end of the previous consolidated fiscal year to 810,876 million yen
at the end of the first quarter under review. Current assets decreased 11,367 million yen and noncurrent assets decreased
4,202 million yen. The main reason for the decrease in current assets was a decrease of 15,992 million yen in cash anddeposits, and the main reason for the decrease in noncurrent assets was a decrease of 1,774 million yen in other ofinvestments and other assets.
Total liabilities decreased 10,858 million yen from the end of the previous consolidated fiscal year to 632,102 million yen.
Current liabilities decreased 4,062 million yen and noncurrent liabilities decreased 6,795 million yen. The main reason forthe decrease in current liabilities was a decrease of 3,928 million yen in notes payable - facilities, and the main reason forthe decrease in noncurrent liabilities was a decrease of 6,422 million yen in long-term loans payable.
Total net assets decreased 4,712 million yen from the end of the previous consolidated fiscal year to 178,773 million
yen. Shareholders' equity increased 2,906 million yen and accumulated other comprehensive income decreased 7,259
million yen. As a result, equity ratio decreased by 0.1% from the end of the previous year to 20.8%.

(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 six-month period
ending September 30, 2018 and the year ending March 31, 2019, which was announced on May 10, 2018.

-4-

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
June 30, 2018

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

125,947
141,457
89,064
11,56028,784
22,167(1,262)417,719

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

208,441(100,274)
108,166
260,797(182,798)
77,99831,987
3,682(2,751)930
36,48654,718(41,749)
12,969268,540

27,3582,366
16,26845,994

26,686
2,221
16,772
45,68062,936
10,354
12,644(4,844)81,091
397,359
826,447

61,923
9,573
10,869(3,431)
78,934393,156
810,876(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
June 30, 2018

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

63,459124,451
10,0001,200
1,201
12,532
－
2,864
4,170
221
7,376
19,643
247,1225,000
25,000350,517
2,544
473
4,530
647
202
2,861
391,776
642,961

5,000
25,000344,094
2,369
320
4,568
658
138
2,829
384,980
632,102

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

84,39786,420(5,948)164,869(712)(69)
11,40436
10,658
10,863
183,485
826,447(2,111)
(41)
5,506
45
3,399
10,504
178,773
810,876

(2) [Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income]Quarterly Consolidated Statements of Income(Millions of yen)Three months ended
June 30, 2017
(From April 1, 2017
to June 30, 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
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
State subsidy
Other
Total extraordinary income
Extraordinary loss
Loss on retirement of non-current assets
Loss on reduction of non-current assets
Compensation expenses
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 -Three months ended
June 30, 2018
(From April 1, 2018
to June 30, 2018)

93,552
63,14930,402
24,253
6,148

103,201
69,61233,58926,091
7,498

159
233
392
25
357
1,167

139
280
635
20
536
1,612

873
200
1,074
6,241

715
441
1,157
7,953

16
14
0
31

6
557
0
564

62
15
928
409
1,415
4,858
1,690
(1,276)
413
4,444
202
4,242

11
114
－
100
227
8,291
2,219
1,350
3,570
4,721
38
4,682

Quarterly Consolidated Statements of Comprehensive Income(Millions of yen)Three months ended
June 30, 2017
(From April 1, 2017
to June 30, 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 -Three months ended
June 30, 2018
(From April 1, 2018
to June 30, 2018)

4,444

4,721

7,698
34
(1,869)82(1,398)28(5,914)
8

(38)
5,907
10,352
10,303(150)(7,427)(2,705)(2,576)49(129)

(3) Notes Regarding Quarterly Consolidated Financial Statements(Notes Related to Going Concern)
N/A(Notes Regarding Significant Changes in the Amount of Shareholders’ Equity)
N/A(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.
Due to this application, deferred tax assets are presented under investments and other assets and deferred tax
liabilities are presented under non-current liabilities.
(Segment Information)
Ⅰ
1.

Three months ended June 30, 2017 (From April 1, 2017 to June 30, 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

69,337

16,0128,194

93,545

7

93,552－93,552

401

2,184

1,278

3,864

247

4,112

(4,112)－

69,73818,197

9,473

97,409254

97,664(4,112)93,552

7,798

3,271

(164)

10,905

9

10,915(4,766)

6,148

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 (4,766) million yen includes realization of intercompany profits oninventories of 171 million yen and corporate cost of (4,938) million yen. Corporate cost primarily consists of generaland 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.

Information about Impairment Loss on Fixed Assets and Goodwill by Reportable Operating Segment
N/A

-9-

Ⅱ
1.

Three months ended June 30, 2018 (From April 1, 2018 to June 30, 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

79,257

14,8189,118

103,1947

103,201－

103,201

3,097

4,162

1,148

8,409

345

8,754

(8,754)－82,35518,98010,266111,603352

111,956(8,754)103,201

11,1342,139

45

13,31833

13,351(5,853)

7,498

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 (5,853) million yen includes deduction of intercompany profits oninventories of (519) million yen and corporate cost of (5,334) 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.

Change in Reportable Segment
From the first quarter under review we will perform a comprehensive development of the PharmaPackaging
business and, in order to enhance the synergy effects with pharmaceutical sales, we are carrying out organizationalchanges. As a result of this change, some business divisions previously categorized as Pharmaceutical-Related havebeen included in PharmaPackaging.
The segment information for the period ended June 30, 2017 is prepared based on the reportable segment after thereclassification.

3.

Information about Impairment Loss on Fixed Assets and Goodwill by Reportable Operating Segment
N/A- 10 -