Annual Report 2012
For the year ended March 31, 2012

Designing the Future of Healthcare Testing

Profile

SysmexCorporation (“the Company”) is an integrated supplier of the instruments, reagentsand software that are essential to testing processes performed during health checkups, treatment and ongoing disease management.

Since its establishment in 1968, Sysmex has concentrated on the field of diagnostics, where the Company
has played an integral role in the testing of blood and urine samples. While reinforcing its research and development capabilities and enhancing its production, Sysmex has expanded into the fields of hemostasis, immunochemistry, clinical chemistry and urinalysis, and has expanded its operations onto a global scale.
The Sysmex Group comprises 47 companies in 29 countries throughout the world, operating in theadvanced countries of Europe and the Americas. In addition, the Group is aggressively building its business inemerging markets, including China, India, Eastern Europe and Russia by creating global networks for its R&D,
production, sales and support functions. Sysmex products are used by medical institutions in more than 170 of
the world’s countries. In the field of hematology, which involves the analysis of red and white blood cells, theGroup holds the top share of the global market.

People: Our Key

Sysmex currently seeks to leverage its extensive business infrastructure to achieve further growth by expanding its business domain beyond diagnosis and treatment to encompass the broader healthcare field that includes
disease prevention and health maintenance. In recent years, the Company has pioneered testing using leadingedge technologies such as molecular testing of genes and proteins. Through these vanguard R&D efforts, Sysmex
is working to create new diagnostics that will aid in the early detection of blood and immune diseases, cancer
and diabetes, among other diseases, and help to prevent recurrence or worsening, ensuring that patients receive
the best care possible.
Using the healthcare industry as their canvas, each of Sysmex’s employees is working diligently to design the
future of the testing and diagnostics business, thereby meeting the needs of customers and patients alike.
Keeping healthcare ideals firmly in mind, we recognize that our mission is to apply the expertise and technologies that we have accumulated to shaping the advancement of healthcare.

Design Factor

ProfileSysmex Annual Report 20121

11-Year Growth and Highlights

For the years ended March 31,

2002

2003

2004

2005

2006

2007

2008

For the year:
Net sales¥ 47,532¥ 57,253¥ 65,970

Operating income

3,417

5,299

6,615

Net income

1,308

3,125

Net increase (decrease) in cash and cash equivalents

1,842

1,071

Cash and cash equivalents, end of year

9,181

Capital expenditure

2,455¥ 76,935 ¥ 87,888¥ 101,041 ¥ 110,724

9,104

10,724

12,71515,033

3,157

5,731

7,423

9,008

9,132

3,465

(3,261)

(499)

3,299

(3,044)

10,253

13,71810,4589,416

12,715

9,679

2,317

2,451

2,729

5,638

4,546

8,244

Depreciation

2,810

3,107

3,203

3,296

3,592

3,959

3,924

R&D expenditure

4,130

4,969

5,549

6,509

8,184

9,026

9,221

Total assets

66,502

66,44971,983

77,66087,447

101,225

109,027

Shareholders’ equity

35,57743,32551,09656,14962,647

71,34478,753

Interest-bearing liabilities

11,606

10,893

4,175

657

695

669

1,081

¥ 1,701.5¥ 1,879.5¥ 2,042.7¥ 2,244.9 ¥ 1,251.8*3 ¥ 1,411.0¥ 1,541.0

At year-end:

Per share data:*2
Shareholders’ equity (yen)3

Net income (basic) (yen)

62.6

132.2

132.9

225.1

145.5*

179.6

178.9

Net income (diluted) (yen)

58.4

121.8

123.1

224.0

143.8*3

178.0

178.3

3

Cash dividends applicable to the year (yen)

22.0

25.0

30.0

40.0

36.0*

36.0

48.0

Dividend ratio (%)

35.2

18.9

22.6

17.8

17.9

20.0

26.8

Shareholders’ equity ratio (%)

53.5

65.2

71.0

72.3

71.6

70.5

72.2

Return on equity (ROE) (%)

3.8

7.9

6.7

10.7

12.5

13.4

12.2

Other data:

Return on assets (ROA)*4 (%)
Yen/U.S. dollar

2.1

4.7

4.6

7.7

9.0

9.5

8.7

121.5

125.4

116.0

108.2

113.3

117.0

114.3

Yen/euro

108.8

118.1

131.0

134.5

137.9

150.1

161.5

Number of employees

2,530

2,639

2,907

3,115

3,334

3,580

3,916

Note: Including part-time employees
Notes:*1. U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ¥82 = U.S. $1, the approximate rate of exchange on March 31, 2012.
*2. Per share data: Certain retroactive adjustments of previously reported per share information have been made to conform with the current method from the year ended March 31, 2003.
*3. Two-for-one stock split*4. ROA = Net Income/Total Assets (Yearly Average)×100(Years ended March 31)

Net Sales by Geographical Region

Japan

Americas(Including South Korea and IDEXX Laboratories, Inc. (United State)

5.9%(¥ million)

14.3%

32.4%
32.4

76,00012,00039,09434,010

11-Year Growth and Highlights

57,00027,857

8,683

Segment proﬁt

30,0005,000

24,00023,444

Jap
Japan
AmericasAm
EuropeChina
Asia Paciﬁc

19,00041,7202,963

43,69038,626
025,476

26,855
4,000

3,248
2,775

2,872

9,000

18,000

6,000

12,000

2,000

3,000

6,000

1,000

3,000

6,816

38,000

27.5%
7.5%

2010

2011*

2012*

* Changes in intragroup transaction prices

Sysmex Annual Report 2012(¥ million)

Sales

66,483¥134,744 million

19.9%
19 9

(¥ million)

82,78475,730Net Sales2(¥ million)

Interarea transfer: exports to subsidiaries
Sales to customers: including South Korea and IDEXX
Segment proﬁt
95,00015,000

0

0

2010

2011

2012*

0

2009

2010

(Millions of yen)(Thousands of
U.S. dollars)*1

2012

2012

2011

¥ 111,843 ¥ 116,206 ¥ 124,694 ¥ 134,744 $ 1,643,220
15,134

15,74018,28919,206234,220

8,014

9,765

11,412

12,007

146,427

(269)

4,403

5,103

2,922

35,6349,410

13,813

18,916

21,838266,317

9,340

4,540

5,840

7,909

964,390

7,189

7,067

6,871

7,031

85,744

10,771

11,23812,38011,904145,171

118,522

120,702130,060

142,285

1,735,183

79,18386,35893,534

101,834

1,241,878

10,344

2,565

1,971

1,026

12,512

(Yen)

(Yen)

(U.S. dollars)¥ 1,684.9¥ 910.7*3¥ 990.5$ 12.08

156.7

190.8

3

111.2*

116.9

1.43

156.5

190.5

111.0*3

116.6

1.42

50.0

56.0

60.0

34.0*3

0.41

31.9

29.4

27.0

29.1

¥ 1,548.2

66.8

71.5

71.9

71.6

10.1

11.8

12.7

12.3

7.0

8.2

9.1

8.8

100.5

92.9

85.7

79.1

143.5

131.2

113.1

109.0

4,148

4,578

4,960

5,324

EuropeSales and Earnings Forecast for the Fiscal Year Ending March 31, 20132013¥148.0 billion

Net sales
Operating income¥21.0 billion

Net income¥13.0 billion

Operating margin

14.2%

Net income margin

8.8%

Assumed exchange rates: US$1.00 = ¥80; €1.00 = ¥105
(Announced in May 2012)

China(¥ million)(¥ million)

Segment proﬁt

Sales
40,00036,44635,29637,03232,000

5,379

5,304

10,000Asia Paciﬁc(¥ million)(¥ million)

Segment proﬁt

Sales

19,29920,0005,000(¥ million)(¥ million)

Segment proﬁt

Sales

7,868

8,000

1,500

7,109
8,000

16,000

6,000

12,00015,093
11,843

2,752

4,552

2,411

4,000

6,400

3,000

4,800

1,200

5,847
900

900

746

2,370

16,000

4,000

8,000

2,000

3,200

8,000

2,000

4,000

1,000

1,600

600

330

0

2010

2011

2012

0

0

2010

2011*

2012*

0

0

300

2010

2011*

2012*

0

Sysmex Annual Report 2012

11-Year Growth and Highlights

24,000We aim to sustain high levels of
growth and further increase
our profitability by designing
the future of healthcare testing.

3

Contents

To Our Stakeholders ........................................................................................



8

An Interview with the President and CEO............................................ 10Key Strategies
for Future Growth

Special Feature:
The Power of Design...................................................................................... 18

Special Feature
Sysmex at a Glance........................................................................................... 24Market Overview and Sysmex’s Position ................................................. 26

Business Activities

Product Strategies............................................................................................. 27Sysmex’s State-of-the-Art Technologies ................................................................. 30

Customer Feedback.......................................................................................... 33



Development of Instruments ....................................................................... 34

Perspective.......................................................................................................................... 36

Research and Development.................................................................................... 38Functional Structure

Purchasing, Production and Logistics.............................................................. 41

Sales and After-Sales Support............................................................................... 44Corporate Philosophy and Core Behaviors ................................................. 48

Corporate Governance .............................................................................................. 49Corporate GovernanceBrand Equity ........................................................................................................................................ 56

Socially Responsible Activities.......................................................................................... 58

Sysmex Value
11-Year Consolidated Financial Data.......................................................................... 64

Management’s Discussion and Analysis................................................................ 66

Financial Performance

Consolidated Financial Statements............................................................................ 72Independent Auditors’ Report ......................................................................................... 89Global Network ............................................................................................................................... 90

Brief History of the Company .......................................................................................... 92Sysmex Group Network

Corporate Overview/Stock Information ............................................................... 93

Forward-Looking Statements
Contents

Statements in this annual report, other than those of historical fact, are forward-looking statements about the future performance of Sysmex that are based on
management’s assumptions and beliefs in light of information currently available, and involve both known and unknown risks and uncertainties. Actual eventsand results may differ materially from those anticipated in these statements.

4

Sysmex Annual Report 2012

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63

PSysmex Annual Report 20125

Key Strategies for Future Growth

Key Strategies for Future GrowthW

ith technological breakthroughs occurring on a daily basis andgiven rapid market growth, especially in emerging regions,the environment in which Sysmex operates is evolving at anaccelerating pace. Sysmex aims to achieve long-term corporate growth byremaining a step ahead of these changes as it works to realize its ideals in thehealthcare market.

Designinga New Vision
6

Sysmex Annual Report 2012

Key Strategies for Future Growth7

Sysmex Annual Report 2012

Key Strategies for Future Growth

To Our Stakeholders
Key Strategies for Future Growth

Despite the effects of substantial yen appreciation, sales were up in Japan and overseas markets
during the fiscal year ended March 31, 2012. Net sales increased for the 12th consecutive year,
and operating income rose for the 11th year in a row. Going forward, Sysmex looks forward to
taking on further challenges.

¥134,744 million. Growth was particularly pronounced

Ongoing Growth in the Healthcare Sector andParticularly in Diagnostics, at the Point of Entry for
Medical Careoverseas, with sales and income expanding in all overseas

Looking at the global economy during the fiscal year ended

geographic regions. On the income front, the cost of sales

March 31, 2012, economic growth in advanced nations wasratio increased owing to the impact of yen appreciation, butsluggish, owing to the extended financial crisis in Europe,

nevertheless operating income rose 5.0%, to ¥19,206 million,

which threw financial markets into disarray and prompted

due to the effect of higher sales. Net income also hit a record

fiscal austerity. Furthermore, the rate of growth in emerging

high, growing 5.2%, to ¥12,007 million.

markets began to decelerate, as economic expansion eased inDuring the fiscal year ended March 31, 2012, net sales
reached a historic high, rising 8.1% year on year, toInitially, we had expected to award dividends for the year

China, which has been a source of ongoing growth. Despiteof ¥30 per share (¥15 per share each in interim and year-end

this slowdown, emerging markets, centered on the BRICs

dividends), but we decided to raise the year-end dividend ¥4

countries, continue to demonstrate solid growth overall andper share. This brought total dividends for the year to ¥34 per

represent major potential for expansion.

share, for a payout ratio of 29.1%. Compared with the fiscal

On the healthcare front, in advanced nations in Europe

year ended March 31, 2011, and taking into effect the stockand North America efforts are underway to reduce healthcare

split conducted on April 1, 2011, this level amounts to a realcosts and reform medical systems. In the United States,

increase in the post-split dividend of ¥4 per share, for the 10th

dispute continues about a medical reform bill that aims toconsecutive year of dividend increases.

reduce the number of people without medical insurance.

Net Sales

Operating Income
Operating Margin(¥ million)
160,000(¥ million)
20,000Operating income
Operating margin(%)
18,28919,206 20

Net Income(¥ million)
16,000134,744
120,000

116,206

124,694
15,000110,724 111,843

15,033 15,134
13.6

13.5

13.5

14.7

15
14.3

10

8,000

40,000

5,000

5

4,000

0

0

2009

2010

(Years ended March 31)

Sysmex Annual Report 2012

2011

2012

0

2008

2009

2010

2011

2012

12,007

9,765

9,132

10,0002008

11,412

12,00080,0000815,740

8,014

2008

2009

2010

2011

2012

that market, and converted a company in Taiwan to a wholly

beginning to improve, prompted by the restructuring of

owned subsidiary. We also established a subsidiary in the

public hospitals and revisions in medical remuneration,

Philippines to conduct direct sales and provide support in thewhich in 2012 amounted to an overall increase of 0.004%.

metro Manila area.

Looking at emerging markets, China’s 12th five-year plan,

On the production front, we added a new wing to the Onofrom 2011 to 2015, calls for medical system reform, including

Factory (Japan) of Sysmex International Reagents Co., Ltd., ourthe medical insurance system, to build infrastructures that

center for reagent production, boosting production capacity

provide uniform medical services in cities and farming villages

to around 1.5 times its previous level. To meet robust demandthroughout the country. In Russia, the number of government

increases in China, we expanded our Jinan Factory, creating atenders is increasing, owing to a government-directed projectsystem that will boost reagent capacity to around five times

to modernize the country’s healthcare. Also, Indonesia has

the previous level.

Key Strategies for Future Growth

In Japan, earnings and profits at medical institutions are

identified medical policies as a key priority.
languishing as a result of the economic downturn, its effect on

Accelerating Growth in the Second Year of Our
Mid-Term Management Plan

the healthcare industry—and particularly diagnostics, which

In line with the Long-Term Vision of being “A Unique & Global

are at the point of entry to medical care—is limited. We expect

Healthcare Testing Company,” in May 2011 Sysmex unveiled

this high rate of growth to continue, owing to the graying ofa new Mid-Term Management Plan to guide the Company

populations in advanced countries and population increases

through the fiscal year ending March 31, 2014. The new planin emerging markets, coupled with efforts to enhance theiris designed to maintain our high level of growth and further

healthcare infrastructures in line with economic growth.

enhance profitability. This plan sets three core strategies for

As these movements suggest, whereas many industries are

us to continue pursuing: Leading Hematology, Leading in

Viewing Changes in the Business Environment as
Opportunities, Continuing to Introduce Our
Own Initiatives

Emerging Markets and Innovating Life Science. Furthermore,

During the fiscal year ended March 31, 2012, we set the stage

non-hematology fields of immunochemistry, clinical chemistry

for additional growth. We introduced new products in theand hemostasis. We are also planning to invest aggressively

hematology and non-hematology fields, and we enhanced ourin research and development, as well as in M&A activities, tosales and support network and production bases.

go beyond the limits of organic growth. Accordingly, in the

In our mainstay field of hematology, we began launchingin April 2012 we established the ICH Business Unit to reinforce our base of operations and accelerate our growth in thefiscal year ending March 31, 2013, we target net sales of ¥148.0

our new flagship model, the XN-Series, in the Japanese andbillion (up 9.8% year on year) and operating income of ¥21.0

European markets in May 2011. We will continue to roll out

billion (up 9.3%). (Assumed rates of exchange for the fiscal

the series in other global markets. We also introduced theyear ending March 31, 2013: 1US$=¥80, 1EUR=¥105.)

XS-500i five-part diff hematology analyzer (See page 27 forTrue to our Group corporate philosophy, the “Sysmex Way,”details), which is tailored to meet the needs of emerging

and our core behaviors targeting stakeholders, we aim to meetmarkets, in China, the Asia Pacific region and Europe. In the

our social responsibilities, thereby enhancing corporate value

hemostasis field, we commenced sales of the CS-5100, theand satisfying the expectations of our stakeholders. I ask for

top-end model in the CS-Series, as well as the CA-600 Series,

the continued support of our stakeholders in these activities.

the world’s most compact analyzers for the global markets. In
the clinical chemistry field, Sysmex is offering for sale in China

July 2012and other parts of Asia the JCA-BM6010/C, a high-throughput
instrument developed in Japan by JEOL that requires only asmall sample volume. As a new business, we have begun offering in Japan a new laboratory service (for research) related to
the risk of recurrence of early-stage breast cancer.
We augmented our sales and support network by estab-

Hisashi Ietsugu

lishing a subsidiary in Russia to meet anticipated growth in

President and CEO

Sysmex Annual Report 20129

Key Strategies for Future GrowthAn Interview with the President and CEO
Key Strategies for Future Growth

Although the global economy remains lackluster, potential in the healthcare market isextremely high. Sysmex views the changes in its business environment as opportunities, and weare taking advantage of these occasions to accelerate our growth.

Q

What is your perspective on the changes
that are taking place in Sysmex’s businessenvironment?

A

Whereas global economic conditions are generally
lackluster, the healthcare industry remains robust,and this market is slated for further growth. In Japanand other advanced nations, aging populations are prompting
an expansion in healthcare-related demand. Also, as developed countries work to restrain increases in healthcare costs,
we are seeing a marked shift toward preventive healthcare.
Accordingly, the importance of testing is rapidly increasing.
In emerging markets as well, countries experiencing economic growth are building up their healthcare infrastructures.

10

Sysmex Annual Report 2012

Changing global economic framework
 Amid concerns of economic crisis, economic measures are anticipated as a result of upcoming leadershipchanges in France, the United States and South Korea
 Internal demand continues to grow, centered on the BRICs countries

Key Strategies for Future Growth

External Environment

Public spending on healthcare rising United States: Ongoing debate on medical system reform bill (medical insurance system) Russia: Program underway to modernize the healthcare sector
 China: Ongoing medical system reforms (ongoing reforms included in 12th ﬁve-year plan, from 2011 to 2015)
 Indonesia: National medium-term development plan ranks healthcare third in terms of budget allocation priority
 Japan: Reforms in medical remuneration resulted in an upward revision in overall (net) medical fees of +0.004%

Changing competitive environment Prominent companies from other sectors entering the healthcare arena Manufacturers from emerging markets growing more prominent

In China, Southeast Asia, Eastern Europe, Russia and Africa,

In the healthcare domain, we are seeing a growing inter-healthcare infrastructure advancement is engendering new

est in personalized medicine—providing medical care thatdemand. For these reasons, steady growth is forecast for theis tailored to the individual, based on their genetic informa-

healthcare markets. Furthermore, governments in advanced

tion. Against this backdrop, we anticipate the increased

countries and emerging markets alike are promoting mea-

importance of companion diagnostics (CDx), which involves

sures that emphasize the importance of healthcare. These are

diagnostics used to determine the efficacy and safety ofalso a welcome development for Sysmex.

therapy drugs for individual patients. The U.S. Food andLooking at the diagnostics market, the top 10 companies

Drug Administration (FDA) and the European Medicines

are realigning, and companies from other sectors are

Agency (EMA) have already established guidelines on theentering the industry. In some emerging markets, local

development of companion diagnostics drugs and in relation

manufacturers are also appearing. Given these factors, mar-to genome markers. Overseas, some alliances have formed

ket conditions are not altogether favorable, but we believe

between leading pharmaceutical companies and companies

that the developments are positive, as they encourage theinvolved in diagnostic drugs. Sysmex is also looking ahead tocreation of new technologies and business models and help

CDx as part of the movement toward personalized medicine,

to invigorate the market.

and we are pursuing R&D on this front in collaboration withmedical companies, universities and research institutions inJapan and overseas.
Owing to developments such as these, I am convincedthat healthcare is a growth industry, and that the rate ofchange will accelerate.

Sysmex Annual Report 201211

Key Strategies for Future Growth

Key Strategies for Future Growth

Q

Please provide an overview of theCompany’s operations during the fiscal year
ended March 31, 2012.

Aother emerging market regions.
In China, the government introduced its 12th five-year
plan, from 2011 to 2015, which emphasizes medical system

During the fiscal year ended March 31, 2012, ourreform, including to the medical insurance system. As thisresults were affected by significant yen apprecia-

plan aims to build infrastructures that provide uniform

tion. Nevertheless, we succeeded in posting record

medical services in cities and farming villages throughout

net sales, which rose 8.1% year on year, to ¥134,744 million.

the country, we expect healthcare investment to continue

Overseas growth was particularly robust. Excluding theflourishing. Demand in high-end markets is focusing on

effects of exchange rate fluctuations, year-on-year growthmore efficient testing to facilitate a growing number of

was 14.3% in the Americas, 8.9% in Europe, 32.1% in China

patients. In these markets, we proactively proposed products

and 12.8% in the Asia Pacific region. Thus, growth was mostfor the hematology field, and sales of system products andimpressive in China and the Americas.

five-part diff instruments surged as a result. Performance

In the Americas, we enjoyed strong sales to integrated
healthcare networks (IHNs) and the U.S. Veterans Integrated
Service Network (VISN). Reagent and service sales also

in the urinalysis and hemostasis fields also contributed toincreased sales.
Sales were up in all areas across the Asia Pacific region,

increased in line with a rise in the number of instrument

including Southeast Asia, South Asia and Oceania, withinstallations. Sysmex recorded robust system sales and thehigher sales in Indonesia centering on the acquisition

winning of tenders in Central and South America, especiallyof government-tendered projects. In Australia, we won

Brazil and Mexico.

a major bid for hemostasis analyzers from a prominent

In Europe, which has been plagued by economic crisis,commercial lab, and in India sales of hematology andsome governments postponed budget introductions, buthemostasis instruments increased. As these results indi-performance centered on the hematology sector remained

cate, we posted favorable results in advanced countries andfavorable. For instance, in Germany we acquired a large

emerging markets alike.

project from a prominent commercial lab, and we continued

Finally, in Japan we had expected supply chain

to propose systems in the United Kingdom and France,

disruptions owing to the effects of the Great East Japan

leading to higher sales there. Centered on Spain, increased

Earthquake, but fortunately our operations were essentiallydeliveries in Europe of the RD-100i—which enables the rapid

unaffected. We were therefore able to continue proposing

detection of breast cancer metastasis in sentinel lymph

solutions, and large-scale orders increased.

nodes—prompted higher sales in the life sciences sector. We

12also experienced higher sales in Eastern Europe, Russia andSysmex Annual Report 2012

A

The introduction of concentrated reagents boosts operating
efficiency and reduces the amount of space needed forreagent storage. The series is also equipped with functionality that enables preventive maintenance and failure prediction via a network-based service, thereby reducing down

In line with our long-term managemet vision,time. Customer evaluations have been extremely good, andour mid-term management plan describes threefeedback has been solid. Going forward, we plan to graduallycore strategies: Leading Hematology, Leading in

introduce the series in the United States, China and other

Emerging Markets and Innovating Life Science. Looking
first at Leading Hematology, this strategy involves the core

Key Strategies for Future Growth

Q

Your mid-term management plan introduces
three core strategies. Please explain yourinitiatives during the fiscal year ended
March 31, 2012.

areas, further entrenching our leading global position.
Regarding our next strategy, Leading in Emerging

field of business for the Sysmex Group, constituting an

Markets, our percentage of net sales in these markets grew

important source of revenues and profits. In this category,from 24.6% in the fiscal year ended March 31, 2011, to 26.7%

we introduced a new flagship model, the XN-Series, whichin the fiscal year ended March 31, 2012, and we expect ourlaunched in Europe and Japan in May 2011. Excelling inpresence there to continue growing. Particularly in China,both clinical value and usability, the XN-Series provides ain line with the rising level of healthcare, in the hematology

body fluid measurement mode and substantially increases

field we are experiencing a shift from three-part diff instru-

measurement accuracy for low platelet count, associatedments to five-part diff instruments. The need for automatedwith such diseases as thrombocytopenia, to enhance clinicalsystems is rising in accordance with increasing demand forvalue. On the usability front, the series embraces the “modu-

higher levels of efficiency to handle an increasing number

lar concept.” This feature allows the combination of multipleof patients. To meet these requirements, in China we haveanalyzers, transportation system, smear preparation system

introduced a compact five-part diff analyzer, the XS-500i,

and other instruments. This flexibility enables the proposal

and market introduction is accelerating.

of tailored solutions to meet a variety of customer needs.

Overview of Long-Term Management Targets

Long-Term Management Vision: “A Unique & Global Healthcare Testing Company”
Long-Term Management Targets
Positioning

Financial targetȉUndisputed global leader in hematologyȉLeading company in the Asian IVD market
ȉLeading company in molecular diagnostics “theranostics”*

ȉNet sales: ¥500 billion or more

* A contraction of “therapy” and “diagnostics,” theranostics refers to high-clinical-value testing that helps realize personalized medicine.

Core Strategies

Leading Hematology
 Secure an undisputed leadership
position As an industry frontrunner, provide
products that oﬀer new value and highlevels of usability

Leading in Emerging Markets
 Establish uniqueness as acomprehensive IVD supplier Introduce products and services thatmeet emerging market needs, andreinforce sales and support networks
 Lead diagnostics development inemerging markets

Innovating Life Science Create unique testing technologies in
the area of molecular diagnostics,
centering on cancer
 Create new value, such as integrating
personalized medicine with treatment
and diagnosis

Sysmex Annual Report 201213

Key Strategies for Future Growth

Key Strategies for Future Growth

We also see non-hematology fields of testing—includ-sentinel lymph nodes and is regarded as being highly precise.

ing hemostasis, immunochemistry, urinalysis and clinicalThe ability to facilitate intra-operative diagnosis reduces thechemistry—as a pillar for growth, and we are boosting ourburden on patients and improves their quality of life (QOL).

presence in these areas accordingly. We commenced sales in

Confirming the utility of this instrument, we have introduced

the hemostasis field through the CA-600 Series, one of thethe RD-100i in Japan and key European markets, centeredworld’s most compact analyzers with functions needed foron Spain. During the fiscal year ended March 31, 2012, wehemostasis. In the clinical chemistry field, we are leveraging

also sold the first instrument in the Asia Pacific market, in

our sales and support network by launching sales in China

Thailand. In the future, we plan to expand the sales region toand other parts of Asia of a product by JEOL (the JCA-

include emerging markets, such as rapidly expanding China,

BM6010/C), which is well regarded for its high throughput

and extend the instrument’s applicability to other types ofand technology that requires only small sample volumes.

cancer, including colon and stomach cancers.

To enhance our sales and support network, we estab-

In 2012, we also began offering in Japan a laboratory

lished a subsidiary in Russia, a market slated for expansion.

testing service for research involving the risk of recurrence

We also converted a company in Taiwan to a wholly ownedof early-stage breast cancer. Sysmex’s new laboratory service

subsidiary, and established a subsidiary in the Philippines

for research (C2P Breast) involves a new technology (C2P:

and commenced direct sales and support in the Manila

Cell Cycle Profiling) developed through joint research andmetro area. To augment our reagent production to meet

performance evaluation tests conducted with university

robust demand growth in China, we expanded our Jinan

hospitals and other institutions. Measurement involves

Factory in China, putting in place a system to allow up to

studying the expression amounts of two types of proteins

five times its previous capacity.

included in tumor tissue removed from the patient, as well

Our final strategy is Innovating Life Science. In thisarea, in Europe and Japan we are selling the RD-100i, which

as their enzyme activity. In principle, these results are thencategorized into three stages.

enables the rapid detection of breast cancer metastases inLong-Term Management Targets(Fiscal years to March 31)

Long-Term Management Target
ȉ1HW6DOHV¥500 ELOOLRQRUPRUH

Now (2012)
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(Exchange rates: US$1 = ¥79.1, €1 = ¥109.0)

Life science

Leading
Hematology
Leading in
Emerging
Markets

Non-hematology*

Innovating
Life Scienceets

g markin
Emerg

Hematology

Mid-Term Management Plan

2012

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* Non-hematology: in-vitro diagnostics excluding hematology but including hemostasis, immunochemistry, urinalysis, clinical chemistry and others.

14

Sysmex Annual Report 2012

Key Strategies for Future Growth

In these ways, Sysmex is working to improve patient

to enhance our development and production technologies

QOL and optimize healthcare for each individual. We are

involving diagnostic reagents for such non-hematology fields

pursuing R&D on new diagnostics technologies to this end.

as immunochemistry and hemostasis testing, as well as in
the life sciences.

Q

What are some of the priority issues for you
this year as you work to implement yourmid-term management plan?

A

There are many issues to address, but the mostimportant is to set the stage to accelerate growthin non-hematology fields. As our second pillarof business, we will strive to increase our presence andQ

A

Sysmex makes its instruments in Japan.
What are some of the strengths of thisstructure?

Testing requires instruments and reagents, as wellas the support structures to ensure that they can beused confidently. Currently, instruments are made inachieve further growth in IVD categories outside the field ofJapan at our Kakogawa Factory, from where they are shipped

hematology. As one aspect of these activities, in April 2012

to more than 170 countries throughout the world. Reagents

we established the immunochemistry, clinical chemistry

and support are produced and provided locally in overseas

and hemostasis testing (ICH) business unit to handle overallmarkets. I believe that the “made-in-Japan” sobriquet

management in the three ICH fields of non-hematology.

conveys two strengths.

Different from the function-specific organizations we have

The first of these is quality. Our instruments are

put in place in the past, the new business unit will handle

extremely precise and require a high level of quality. The

all functions related to the ICH fields, including business

Kakogawa Factory has the leading-edge production andstrategy, product development, reagent production and data

quality assurance technologies that are need to produce

quality assurance. By maintaining a consistent management

high-quality products. However, achieving this level ofsystem that handles all of these functions, we are creating aquality also requires us to procure some sophisticatedbusiness structure for ICH fields.

components from third parties. Japanese component manu-

In April 2011, the Sysmex Group received a transfer fromfacturers are well known for meeting this type of demand.

Katakura Industries Co., Ltd., of its Research Institute of

Our suppliers’ technologies are also extremely advanced,

Biological Science, which employs gene recombinant tech-and Japan has some of the world’s leading manufacturers

nology for producing proteins. Using these proteins, we planthat concentrate on niche markets. The superior companies

Sysmex Annual Report 201215

Key Strategies for Future Growththat collaborate with Sysmex provide a stable supply route,creating a win–win situation for all parties.
Our second strength is the brand aspect. Setting
aside quality issues for the moment and looking only at

who decide to purchase from us largely on the strengthAof the Sysmex brand. Underlying the essence of our

toward this balance. Our basic policy on returning profits tobrand is the assurance of quality that the “made-in-Japan”

shareholders is to ensure a regular level of stable dividends,

image confers, and our brand is known for and recognizedwith these distributions backed up by successful businessbecause of its quality. When selecting our instruments,

performance. In general, we aim for a 20% payout ratio on amany customers do so based on the faith that they placeconsolidated basis. In the fiscal year ended March 31, 2012,

in this “made-in-Japan” quality; our brand instills a sense of

we awarded dividends of ¥34 per share. Taking into effectconfidence that is reputed throughout the world. We believe

the stock split conducted on April 1, 2011, this level amounts

that these aspects of our brand are extremely important in

to a real increase in the post-split dividend of ¥4 per share,

the eyes of our customers.

for the 10th consecutive year of dividend increases, and a

production costs, it would be advantageous to manufacture
our instruments overseas, such as in other parts of Asia.
However, this might cause issues with the many customers

For reagents, on the other hand, it is important to ensure

To continue growing at a high and steady rate,
Sysmex must strike an appropriate balance between
investing aggressively and returning profits toshareholders as profitability increases. We are working

payout ratio of 29.1%.

stable supplies quickly in global markets. For these reasons,

We intend to remain true to our Group corporate

early on we set up reagent factories in Germany, the Unitedphilosophy, the “Sysmex Way,” (see page 48 for details) andStates, Brazil, China, Singapore and India. In addition to

our core behaviors. As a result, we aim to meet our social

producing reagents, we provide support services globally

responsibilities, enhance corporate value and satisfy thefrom these bases. Through our combination of made-in-

expectations of our stakeholders. I ask for your ongoing

Japan quality and the ability to manufacture and supply

support of Sysmex as we set the stage to take on new chal-

reagents and provide support services locally, we maximize

lenges over the medium to long term.

our value chain and set the stage for Sysmex to continue
instilling confidence in customers throughout the world.

16

Q

What closing message would you like toleave with stakeholders?

Sysmex Annual Report 2012

Special FeatureS

ysmex is committed tothe ongoing challenge
of designing new solutions that shape advancesin testing and diagnostics. “Design” is the keyword that best describes
Sysmex’s efforts to realize its ideals in the fieldof healthcare.

Designing
New Concepts
in Healthcare

Sysmex Annual Report 201217

Special Feature: The Power of Design

We have introduced our new flagship model in the hematology field, the XN-Series, whichembraces the modular concept. The revolutionary concept was derived from a brief sketch.

Special FeatureS

ysmex launched its new flagship model in theresistance method to count the number of red blood cells,

hematology field, the XN-Series, in May 2011 in Europe

white blood cells and platelets present in the blood (seeand Japan, and is steadily rolling out the model into

pages 30–31 for a description of this technology). Althoughother regions. The XN-Series, which was designed with an

this describes hematology testing in a nutshell, the reality

altogether different product concept than previous models, isis substantially more complex, as the number of items tosuperior in terms of both clinical value and usability.

be tested can be extremely broad-ranging. Depending on
the condition being tested, the physician may call for tests

One important aspect of the model’s usability is themodular concept. This approach allows multiple instru-

measuring reticulocytes, immature cells or other parameters.

ments to be easily integrated to tailor systems to specificFurthermore, processing large numbers of samples at a large-

customer needs.

scale institution may involve multiple hematology analyzers.
If a hematology analyzer indicates a positive result in

In hematology testing, analyzers play an important rolein screening tests, but this represents only part of the overalla screening test, a laboratory technologist may need toprocess. Smear sample preparation and sample transportconfirm this result with a microscopic test, requiring a glasscan be automated to make the overall flow of testing moreslide preparation of the specimen. The preparation process

efficient. First of all, screening tests employ hematology

can be optimized—ensuring the correct blood amount, pull

analyzers which use flow cytometry and the electricalglass angle and automatic speed adjustment—by using a

XN-Series Concept

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18

Sysmex Annual Report 2012t4S[IVWEZMRK

fully automated smear sample preparation instrument. Such
instruments are particularly useful at large-scale medical
institutions that process large sample volumes, as they

Sysmex’s new design concept: Silent Design®—“silent” not in the sense of “quiet;” rather as in“still waters run deep.”

substantially raise operating efficiency. By using computer
Innovative technologies are the essence underlying thethe sample through to smoothly transporting it through theabsolute reliability of Sysmex products. The role of designnecessary instruments, without ever needing technologists togoes beyond simple exterior appearances, extending to an

touch the sample.

instrument’s internal robustness. Sophisticated technologies

The XN-Series simplifies the combination of the various

need not be covered with decorative exteriors. It is important

instruments needed for each of these roles, and allows flex-

for a design to instill confidence in an instrument’s technolo-

ibility in proposing solutions to meet individual customers’

gies and functions. This belief is expressed in the Sysmex Way

needs. As a single XN instrument is capable of processing

and our brand identity (see pages 48 and 56 for details).

Special Feature

control, the entire process can be automated, from ordering

up to 100 samples per hour, instruments can be linked toaugment throughput in 100-sample-per-hour multiples.
Additionally, the solution can be tailored according tomeasurement parameters, selecting the model type to matchthe institution’s needs, and the number of high-value-added
measurement parameters can be increased by selecting
options. A sample transport system can be added to serve up
to nine instruments on a single line, which can be optimized
to match the traffic flow of laboratory staff. The series allows
samples to be loaded from one end or the other and thesystem may be configured in an L-shaped pattern. Several
hundred variations are possible, facilitating a host of possible
measurement parameters and instrument connections. The
series also uses concentrated reagents, which simultaneously boosts operating efficiency and reduces the amountof space required for reagent storage. The use of reagent
cartridges allows reagents to be switched at a single touch.
Furthermore, cartridges are marked with a wireless tag, andRF-ID technology is used to automatically monitor reagents,
thereby boosting usability.
At the initial development stage one development
engineer produced a single-page sketch showing how theseries should function by looking at the concept from theuser’s standpoint. The engineer explained, “Sysmex serves
customers on a global basis, and their needs are varied. Our
job is to work diligently in tailoring our instruments to meettheir needs, making a vigorous and uncompromising effort
to do so.” This statement embodies the dedication that each
Sysmex employee feels toward the customers and patientsthat use its products. We maintain this attitude daily as wework to design new solutions that will contribute to theadvancement of healthcare.

Sysmex Annual Report 201219

Special Feature: The Power of Design

Sysmex products embody the mutual culmination ofachieves significant improvements in operability, such astechnology and design. In general, in past in-vitro diagnostic

through the simplification of operating panels. The compact

systems the focus has been on boosting functionality

design of the series has reduced the footprint of the top-of-

and performance. In addition to these factors, Sysmex’s

the-line transportation system approximately 20% compared

new Silent Design® concept concentrates on improving

with previous models.

Special Featureusability—reducing the burden on the clinical laboratory

Sysmex received the Good Design Gold Award (Minister

technologists who use these instruments. While ensuringof Economy, Trade and Industry Award) for its Silent Design®.

overall consistency throughout the in-vitro diagnostic system,

The judges gave the design high marks, commenting thatimportance is placed on raising lab usability through the“The product caters to diagnostic instrument workflow

highly recognizable design of key individual components.

diversity and specialized, field-specific clinical technologists.

The XN-Series is the first Sysmex product to employ thisAt the same time, in response to the recent increase inconsistent design concept.

people taking over responsibility for different fields owing

Silent Design® encompasses more than just the product;
it is a human-centered design concept that considers

the design provides consistency of form and dissimilarity tosurrounding objects and a product’s relationship with its

prevent misoperation, making equipment more recognizable

users. Design takes operator motion into account, creating

through its design. Furthermore, the ultimate exterior design

a testing environment that is optimized for the people who

is a sophisticated expression of form that symbolizes func-

use it. Furthermore, although instruments tend to taketion and performance.”

center stage in the spaces they occupy, our design takes

20

to a downward trend in the number of clinical technologists,

Sysmex products are highly regarded for their distinctive

care to prevent a sense that the instrument is controlling thetechnology, backed by clinical value and usability, making thempeople. Instead, we consider it essential to achieve a sense

durable for a long period of time. To ensure the long use of ourof harmony among people, products and spaces. In addition

products, we aim for a timeless design that takes into accountto uniformity that the eye perceives, our design incorporates

the relationship between a variety of elements, including

the operating method and ease of use. The XN-Series

exterior form, ensuring an ideal fit with laboratory spaces.

Sysmex Annual Report 2012

Through consulting, we aim tocreate ideal testing environments.
Sysmex designs laboratory spaces.

3D Theater, to create a virtual space that closely resembles
the customer’s actual blood collection and laboratory facilities, allowing all members to view and confirm instrument
sizes and other characteristics. This software is better able
to convey the sense of a laboratory than was conventional

simple product proposals and sales, extending to solutions that

CAD software, allowing accurate visualization of the width ofresolve issues and seek to create ideal testing environments.

routes between testing platforms.

We propose solutions on a global basis, striving to improve

In some cases, laboratory staff physically carry patient

overall workflow, centered on hematology testing. We also offer

blood samples to the testing location—contact that involves

a wide range of laboratory consulting services, chiefly in Japan.

unpredictable risks. We seek to confirm such risks beforehandLaboratory consulting involves first surveying the current

and then propose solutions that result in safe and convenientstate of the testing location and speaking with customers

laboratory spaces, laboratory-wide networks that make use of

to elicit and share any issues that may be present. We thenleading-edge IT, more efficient workflow, and higher levels ofconcentrate on devising optimal solutions to resolve thesafety through such means as preventing samples from being

problems they face. After introducing our instruments, wemisidentified. We also offer suggestions on improving thefollow up to address any new issues, offering proposals in

comfort of patient waiting lounges.

a process of ongoing improvement. Through this process,Sysmex endeavors to minimize the amount of time

we propose laboratory spaces that optimize the location ofrequired for testing, including the time patients spend waitingnecessary laboratory instruments and tools, including Sysmex

for tests, the time for transmitting test results to physicians

products and those supplied by other companies. Our initial

and the time to inform patients of their results. Going for-surveys of customer testing environments are rigor-

ward, through the solutions it proposes Sysmex will continueous, conducted from the standpoint of ensuring

Special Feature

One of the values of Sysmex’s proposals is that they go beyond

striving to improve the safety and convenience of testinga more efficient testing environment. We

environments—both for the laboratory technologists

also use software that we have designed,

who are our direct customers and for patients.

Sysmex Annual Report 201221

Special Feature: The Power of Design

Through creative new and highly valuable
testing and diagnostic technologies, Sysmex isworking to enhance patient QOL.

automated gene amplification detector, which became eligible
for government reimbursements in 2008. This instrument
enabled the rapid and automatic detection of breast cancer
metastases in the sentinel lymph node to a high degree ofSpecial Feature

Sysmex seeks to leverage its extensive business infrastructure

precision. Recognizing its benefit, the RD-100i was introduced

to achieve further growth and increase corporate value byat hospitals in Japan and in major European countries,

expanding its business domain beyond diagnosis and treat-centered on Spain. In the future, we anticipate its adoption

ment to encompass the broader healthcare field that includes

in emerging economies as well, as market growth continues.

disease prevention and health maintenance. Efforts in recent

We have succeeded in extending the system’s application

years include the use of technologies for analyzing genes andto include colon cancer, as well as breast cancer, and we willproteins to optimize healthcare for individual patients. In thiscontinue to research to increase applicability to other types

area, we are taking part in initiatives to create inimitable newof cancer, such as stomach cancer. Going forward, we will also

high-value testing and diagnostics technologies.

expand the product’s sales geographically.

In recent years, different eating habits and other lifestyle

For breast cancer, determining the post-operative risk ofchanges in Japan and other advanced nations have led torecurrence is considered to be an important indicator in its

ongoing increases in the number of breast cancer patients,

treatment. The selection of treatment methods involves anleading to a growing focus on improving the QOL of patientsoverall judgment based on a variety of test results. Anti-cancer

undergoing breast cancer treatment. Minimizing the

drugs and other treatments are employed after determining

extent of lymph node dissection in breast cancer treatment

the post-operative risk of recurrence. Introduced in Japan in

improves a patient’s QOL. At present, pathology labs offer

January 2012, Sysmex’s new laboratory service for research

provisional diagnostics of the sentinel lymph node, where(C2P Breast) involves a new technology (C2P: Cell Cycle

the metastasized cancer cells first reach, and then determine

Profiling) developed through joint research and performancethe extent of resection, as well as post-surgery therapies. To

evaluation tests conducted with university hospitals and otheraddress this situation, we introduced the RD-100i, Japan’s first

institutions. Measurement involves studying the expression
amounts of two types of proteins included in tumor tissue
removed from the patient as well as their enzyme activity. In
principle, these results can then be categorized to determine
the risk of recurrence, thereby improving patient QOL while
making inroads toward the realization of personalized medicine. Sysmex also aims to develop testing technologies related
to chronic diseases, such as diabetes, as well as malaria andother infectious diseases.
Sysmex endeavors to improve patient QOL through thedevelopment and popularization of valuable new types oftesting. In this manner, we aim to fulfill the Sysmex mission,of “shaping the advancement of healthcare.”22

Sysmex Annual Report 2012

Business Activities

S

Bu
BusinessBus
Bu
Act
Activities
ctivi
ct
ivitie
ivi
t es
ti
tie

ysmex provides the
instruments andreagents needed forhematology, hemostasis
and other tests to customers around the world. In
recent years, we have also
been moving ahead withresearch to create newtests for cancer, diabetes
and other illnesses.

Designing
Our Target Business
Sysmex Annual Report 201223

Business Activities

Sysmex at a Glance
Business Segments(¥ million)

S

Business Activities

ysmex derives approximately 94.6% of its revenues from thediagnostics field in the business of testing samples of humanbody fluids, such as blood and urine, with hospital and commercial
laboratories as its principal customers. More specifically, our main
field of business is hematology, which involves measuring the number
and type of red, white and other blood cells. This business accounts foraround 61.1% of net sales.
Hematology uses specific reagents, and the sale of hematology
instruments leads to an automatic and sustainable source of revenue
through the sales of reagents and provision of maintenance services.
Furthermore, in addition to expanding our IVD* operations in suchfields as hemostasis, immunochemistry, clinical chemistry and urinalysis, we are accelerating commercialization of the life science business.
Sysmex also operates in the IT field, providing testing information
systems and proposing solutions to meet demand for network systems
to manage medical data.

 Diagnostics

2008

2009

103,801

2010

2011

2012

106,316 109,384

117,683

127,475

 Hematology

68,414

71,21672,326

77,28482,321

 Hemostasis

13,834

13,97014,59915,987

17,643

 Immunochemistry

2,866

2,639

2,426

2,677

2,024

 Clinical chemistry

2,667

2,479

3,375

3,242

3,498

 Urinalysis

7,509

8,154

8,233

9,417

10,796

 POC testing

3,995

2,793

3,584

3,671

5,303

 Others

4,513

5,062

4,839

5,402

5,887

 IT

4,399

3,145

2,870

3,071

3,885

 Other business

2,522

2,381

3,951

3,939

3,382

(Years ended March 31)* Acronym for in-vitro diagnostics.

Product Segments(¥ million)S

ysmex enjoys a unique revenue structure. On one hand, we
conduct a stock type of business in which we sell the instruments
needed for IVD, offer the specific reagents needed for long-term testing and provide support and maintenance services. Reagents deliver
higher gross profit margins than instruments, while instrument sales
drive increased reagent usage. Therefore, this segment should generate
stable earnings growth.
Sales of reagents and the provision of maintenance and otherservices currently account for approximately 65.8% of net sales.
Industrywide, sales are trending upward, with instrument sales
focused on the second and fourth quarters of the fiscal year.

2008

2009

2010

2011

2012

 Instruments

38,95838,20235,971

41,74946,142

 Reagents

47,297

48,96653,47255,291

59,906

9,668

9,684

11,50012,14012,82314,80014,98915,262

15,514

15,873

2008

2009

2010

2011

2012

 Japan

35,96135,82838,62638,541

39,735

 Americas

20,90823,41423,444

26,53528,607

 Europe

39,23535,45436,44635,41437,370 China

8,128

10,111

11,84315,093

19,299

 Asia Pacific

6,492

7,036

5,847

9,111

9,733

 Maintenanceservices Others(Years ended March 31)

Regional Segments by Destination(¥ million)S

ysmex supplies products and services to customers in more than170 countries. Sales in three key regions—Japan, Europe and theAmericas—account for approximately 80% of net sales*1. We are also
accelerating business development in China, which is experiencing
remarkably strong economic growth, and the Asia Pacific region. We
are steadily increasing our presence in emerging markets*2, whichcurrently account for 26.7% of net sales.
*1 Net sales by destination is defined as the sales amount recorded by Group companies
to customers in a particular region. However, net sales by geographical region refers to
the sales amount made by a Group company in a particular location.
*2 Emerging markets: China, Southeast Asia, South Asia, Latin America, EMEA (East
Europe, Russia, Middle East, Africa)
Advanced countries: Other than those above

24

Sysmex Annual Report 2012

(Years ended March 31)

Sales Composition by Business(¥ million)

150,000

134,744
124,694116,206

120,000

110,724

Q Diagnostics

111,843

94.6%

 Q Hematology

61.1%
13.1%
 Q Immunochemistry 1.5%
 Q Clinical chemistry 2.6%
 Q Urinalysis
8.0%
Q POC testing
3.9%
 Q Others
4.4%
 Q Hemostasis

90,00060,000Q Other business

2.9%
2.5%

Business Activities

Q IT

Net sales¥134,744 million(Particle analysis, etc.)
30,000

0

2008

2009

2010

2011

2012

(Years ended March 31)

Sales Composition by Product(¥ million)

150,000

134,744
120,000

116,206
110,724

124,694

111,843
Q Instruments

90,000

Q Reagents
Q Maintenanceservices
Q Others

60,000

34.2%
44.5%

Net sales¥134,744 million

9.5%
11.8%

30,000

0

2008

2009

2010

2011

2012

(Years ended March 31)

Sales Composition by Destination(¥ million)

150,000
134,744
120,000

116,206
110,724

124,694

111,843
Q Japan
Q Americas

90,000Q Europe
Q China

60,000Q Asia Paciﬁc

29.5%
21.2%
27.8%
14.3%
7.2%

Net sales¥134,744 million

30,000

0

2008

2009

2010

2011

2012

(Years ended March 31)

Sysmex Annual Report 201225

Business Activities

Market Overview and Sysmex’s PositionC

linical testing, used in medical diagnosis and treatment or in monitoring the effects of drug administration, is essential to therealization of a healthy society. Clinical testing can be broadly divided into two categories: in-vitro diagnostics (IVD) that involvethe examination of blood, urine or cell samples taken from the body and in-vivo tests that involve direct examination using X-rays,
electrocardiograms (ECGs) or brain waves. Sysmex’s primary business is in the IVD domain.

Clinical Laboratory Testing Categories
Examination

Diagnosis and Treatment

RecoveryDiagnostic Support
Monitoring Eﬀects of Therapy

Clinical Laboratory Testing

Business Activities

Sysmex’s Business Domains

In-Vitro Diagnostics

In-Vivo Diagnostics

ȉ+HPDWRORJ\  ȉ+HPRVWDVLVȉ8ULQDO\VLV ȉ,PPXQRFKHPLVWU\
ȉ&OLQLFDOFKHPLVWU\ȉ;UD\V&7VFDQQLQJȉ(OHFWURFDUGLRJUDPVȉ5HVSLUDWRU\IXQFWLRQWHVWLQJ ȉ(OHFWURHQFHSKDORJUDPVDQGRWKHUV'LDJQRVWLFVIRUPHGLFDOFKHFNXSVSysmex’s business in the IVD domain involves the provisionof instruments, reagents and laboratory systems aroundthe globe in such fields as hematology, hemostasis, urinalysis,
immunochemistry and clinical chemistry. At present, Sysmex
is among the top 10 IVD companies in the world, and the only
leader that hails from Asia.
Leveraging the strength of this geographical advantage, wewere an early proponent of a strategic focus on Asia. The Groupis developing its business as an integrated supplier in various
fields in Japan, China and the Asia Pacific region.
In the Americas and Europe, however, we maximize ourmanagement resources by strategically concentrating our sales
efforts on fields of particular expertise: hematology, hemostasis
and urinalysis.

Fields of Expansion by Region(As of June 30, 2012)

Japan

China

AP

Americas Europe

Hematology

Yes

Yes

Yes

Yes

Yes

Hemostasis

Yes

Yes

Yes

Yes

Yes

Clinicalchemistry

Yes

Yes

Yes

Urinalysis(Urine sediment)

Yes

Yes

Yes

Yes

Yes

Immunochemistry

Yes

Yes

S

ysmex currently ranks within the global top 10 in the IVD market. In hematology, we are the world leader in terms of market share.
However, competition is growing ever more intense, with developed countries’ demographics changing due to graying populations
and falling rates of childbirth, business becoming increasingly global, and companies from other fields of business entering the market.
Sysmex is responding to these challenges by reinforcing its own sales network and aggressively leveraging the benefits of allianceswith other companies. By strengthening our sales channels and rounding out our product portfolio, we are steadily enhancing our global
presence.

Diagnostics Market

Market Share

Segment

Market size (¥ billion)

IVD total¥3,490

Hematology

210

Hemostasis

100

Immunochemistry960

Clinical chemistry

530

Urinalysis

OthersHematology¥210 billion

40(Urine sediment 13)

POC (excluding SMBG*)

570

Others1,080* Self monitoring of blood glucose

26

Sysmex Annual Report 2012

(Sysmex estimates)

SysmexS

Product Strategies
Diagnostics
Hematology
Hematology tests are a type of screening that counts red, whiteor other blood cells to determine whether a more detailed
examination is necessary. In addition to instruments, these tests
require specific reagents, which constitutes an ongoing demand.
Sysmex estimates that the global hematology market accounts
for annual sales of ¥210 billion. Furthermore, the market is dominated by only three major suppliers: Sysmex, Beckman Coulter(Danaher) and Abbott. Nevertheless, we became the global
leader in the field of hematology in 2007, and we are steadily
expanding our share of the market.
Hematology analyzers typically are identified by the numberof white blood cell types they distinguish: three or five. Threepart diff analyzers employ relatively simple testing principles andhave the advantage of being compact and inexpensive to maintain, as they require few reagents. Five-part diff analyzers, on theother hand, have a higher clinical significance, as they offer the
more accurate and precise measurement of five types of whiteblood cell, enabling various complaints and blood disorders to beanalyzed in more detail. In addition, analysis systems (five-partdiff instrument transport systems) at large-scale facilities inJapan, the United States and Europe are realizing efficiency gains
through the use of robotics.

XN-1000(Single module)

XN-2000(Twin module)

XN-9000(Transport system)(Five-part diﬀ analyzers)

Specialization

This new model in the hematology field is designed to enhance clinical value. In addition to providing abody fluid measurement mode, the model substantially increases measurement accuracy for low platelet
counts. Embracing the modular concept, this series allows the combination of multiple analyzers, transportsystem, smear preparation system and other instruments. This flexibility enables the proposal of tailoredsolutions to meet individual customer needs.

Business Activities

XN-Series

XE-5000
XT-4000i
XS-Series

This basic, compact model
is supported by the Sysmex
Network Communication Systems (SNCS), andfeatures a viewer-friendly
screen and an easy-to-use
operating system.

In the hematology field, the HST series offers fully
automated white blood cell differentials, reticulocyte
analysis, preparation of smears and staining. Multiple
system configurations are available to efficiently meet
individual laboratory requirements.

Reagents(Three-part diﬀ analyzers)

Information Diversity

This compact, highly functional model features thesame measurement principles, reagents and operability
as models in the high-end XE
series. This space-saving unit
offers the ability to analyze
five types of white blood cell,
as well as excellent measurement data interchangeability.

The XE-5000 is thehigh-end model in the XE
series, which is shippedwith software to measure
immature cells in the bloodas standard instrument anda function to measure blood
cells found in extremely
small quantities in body
fluids.

HST

XP
Featuring compact size and easy operation,
this analyzer provides valuable blood test
data such as the white blood cell, threepart differential in less than one minute.

Hematology testing requires specificreagents for dilution, hemolysis and staining,as well as for use in analyzers. We also manufacture reagents for other areas, including
hemostasis, immunochemistry, urinalysis andclinical chemistry.

pocH-100i
Featuring compact size and easy operation,
this counter allows high-precision measurement results and makes it possible to perform
hematology simply in diagnostic and therapeutic settings.

Eﬃciency and Handling Capability

Scale of Laboratory

Sysmex Annual Report 201227

Business Activities

Diagnostics
Hemostasis
Hemostasis involves testing for two blood functions: coagulation, or clotting; and fibrinolysis, the process by which bloodclots are broken down. By testing specimens of blood plasma,
it is possible to diagnose hemophilia and thrombosis and tomonitor their treatment. Furthermore, testing blood beforehandenables healthcare professionals to determine whether blood islikely to coagulate properly during surgery.
As a rule, hemostasis tests can be performed using

general-purpose reagents, rather than specific reagents.
Sysmex estimates that the global hemostasis segment
generates annual sales of ¥100 billion. In 1995, we concluded a
distribution agreement with Siemens (previously, Dade BehringInc.), forging a synergistic relationship that reinforced ourrespective strengths in the hematology segment. As a result, thisshared business now accounts for the leading share of the global
market for coagulation analyzers.

Business Activities

CA-600 Series

CS-2000i

CS-5100

In addition to providing the functions that areneeded for hemostasis, these analyzers are someof world’s most compact. Operation is simple,
making these analyzers ideal for emergency
laboratories and for use at small and mid-size
institutions that test infrequently.

The CS-2000i analyzer employs a fourth method,
agglutination, in addition to the three fundamental
measurement methods—the coagulation, chromogenic substrate and turbidimetric immunoassay
methods. Integrating all these testing methods intoa single station raises processing performance.

The top of the CS series product line, the CS-5100
is capable of high-speed handling of tests such as
those that include D-Dimer, a parameter for determining thrombotic tendency.

Immunochemistry
Immunochemistry tests are performed on blood serum, thesupernatant fluid isolated after blood separation. Antigenantibody reactions are used to test for the presence of HIV andhepatitis and to look for cancer markers.
Manufacturers of analyzers apply their own measurement
principles, and specific reagents depend on the principles used.
Sysmex estimates annual sales in the global immunochemistry

market at ¥960 billion—making it the largest category in the IVD
field, and the market is expected to expand.
We aim to expand sales in Japan of the HISCL-2000i, a fully
automated immunoassay analyzer that enables highly sensitive,
high-speed assays, as well as our lineup of related reagents, toboost our share of the immunochemistry testing market.

HISCL-2000i
This model applies the chemiluminescence enzyme immunoassay (CLEIA) methodology
to produce a highly sensitive, rapid immunochemistry test system that can be used with
reduced specimen quantities. The model is designed for use by medium-sized hospitals. In
a bid to establish our presence in the immunochemistry market, Sysmex released reagentsfor infectious diseases such as hepatitis B, hepatitis C and HIV, and those for the detectionof thyroid hormone markers. With the aim of expanding our offering of measurement items,
we are also working closely with our partner companies.

Clinical Chemistry
Clinical chemistry involves examining the enzymes, sugars andproteins in blood serum and plasma to determine the nutritional
status, liver and kidney functions, and testing for contraction of
conditions such as hyperlipidemia and arteriosclerosis.
Like hematology, clinical chemistry is commonly performed
around the world not only at times of illness, but also during
routine health checkups. Accordingly, the total number of examinations is extremely high.
Sysmex estimates that the global clinical chemistry market
accounts for sales of ¥530 billion, making it the third-largest
market in the IVD domain, after immunochemistry and POC,
excluding SMBG. Among other contributors to demand growth is28

Sysmex Annual Report 2012that as standards of living improve, emerging economies are likely
to experience increases in such diseases as diabetes. Sysmex has
signed agreements with JEOL Ltd. and Furuno Electric Co., Ltd.,
involving automated clinical chemistry analyzers and is leveraging
its sales network to sell these analyzers and their reagents in China
and other parts of Asia.

Reagents

Diagnostics
Urinalysis
Urinalysis entails testing for the presence of sugar, protein or
blood in urine and can be broadly divided into two types: qualitative urinalysis and quantitative urinalysis. The first type involves
dipping a test paper into urine to determine whether theabovementioned solids are present. In the second, the quantitiesof these substances are analyzed. Sysmex estimates that the
global urinalysis market accounts for sales of ¥40 billion, withquantitative urinalysis making up ¥13 billion. We introduced theworld’s first urine formed sediment analysis system—the UF
series—that uses the flow cytometry method. This series enjoys
an excellent reputation with customers and has the leading

share of the global market for urine sediment analysis. Sysmex,
in cooperation with ARKRAY, Inc., developed the world’s first
fully automated integrated urine analyzer, the UX-2000, which
performs both qualitative and quantitative urinalysis. This
analyzer is being launched into markets throughout the world.
UX-2000
In addition to having a significantly
smaller footprint than previous transport systems, the UX-2000 improves
operability. The system is capable offully automated analysis of 100–200
samples per hour.

POC is an abbreviation for point-of-care. POC testing can be
carried out on the spot in operating rooms, intensive care units,clinics or at the patient’s bedside, rather than in central laboratories, making possible rapid diagnosis and treatment. Currently,
Sysmex markets rapid detection kits to assist in influenza
diagnoses and easy-to-use devices to measure intravesical urine
volume.
Sysmex is working to increase its sales in this category byextending its business into pet diagnostics. In July 2010, we
formed a business alliance with IDEXX Laboratories, Inc., a leader

in this field. Under this accord, we began providing hematology
analyzers for pets and other animals on an OEM basis and sellingthem via IDEXX Laboratories’ networks.
ProCyte Dx (IDEXX’s brand name)Business Activities

POC Testing

Incorporating numerous technologies and expertise
cultivated with humans into a compact hematology
analyzer that can be placed on a desktop, the ProCyte
Dx features data accuracy and ease of use, and canconduct tests in around 2 minutes.

Life Sciences (Other Business)

IT
Advances in information technology have generated demandin the healthcare industry for IT-driven medical information
networks. Such networks contribute to effective diagnoses
by collecting and analyzing test data and consolidating thisinformation into a convenient database. Sysmex plans toaccelerate its IT deployment to expand business with hospitals, clinics and remote medical care capabilities.

In 2006, the Sysmex-developed system for rapid detectionof breast cancer lymph node metastasis based on the OSNA
method* was launched in Europe. This system was covered by
the Japanese national health insurance program two years later,in 2008, and we are steadily introducing this system to markets
in Europe and Japan. We are also expanding the applicability ofthis system to colon cancer, and January 2012, we began offering a laboratory testing service in Japan for research involving
the risk of recurrence of early-stage breast cancer, employing a
new technology known as Cell Cycle Profiling (C2P).

CNA-Net* Please see pages 32–33 for an explanation of OSNA method technology
and user evaluation.

Laboratory Information Systems

CNA-Net is a laboratory-information
system provided by subsidiary
Sysmex CNA. The system consists of
independently operable subsystems
for clinical chemistry, hematology,
urinalysis and immunochemistry
testing.

RD-100i

LYNOAMP BC

Other Business
Self-Medication Support
Peripheral artery monitoring devices that can measure hemoglobin levels without blood sampling are used at fitness centersand various other sites. Sysmex also sells health management
support software that supports health check services at drugstores and in the healthcare sections of other shops.

In April 2011, Sysmex accepted the transfer from Katakura
Industries Co., Ltd., of the protein production services that until
then had been contracted to the company. Based on these
operations, in October 2011 we launched the ProCube business,
providing numerous pharmaceutical companies with proteinsused in drug development and testing.

ASTRIM SUThis non-invasive blood vessel monitor measures
hemoglobin concentrations and blood-vessel width
through near-infrared spectroscopic images simply byplacing a finger on the detector. There is no need forblood sampling.

Sysmex Annual Report 201229

Business Activities

Sysmex’s State-of-the-Art Technologies
Depending on blood cell type, anywhere from several thousand to several million blood cells exist
per microliter (0.001 milliter) of blood. Hematology tests are essential for determining the number of blood cells that are responsible for oxygen transport, or hemostasis. Sysmex employs twobasic technologies—flow cytometry and sheath flow DC detection—to achieve precise measurements at the microliter level.
Flow Cytometry: One of Sysmex’s Core Technologies

In May 2011, Sysmex launched its new XN-Series of products in the hematology field in Japan and Europe. To enhanceBusiness Activities

Blood cells can be broadly divided into three categories:

customer testing environments, the XN-Series provides a body

red blood cells, white blood cells and platelets. Platelets

fluid measurement mode and substantially increases measure-are the smallest in diameter, at around 2 micrometers, while

ment accuracy for low platelet counts, associated with such

white blood cells are the largest, at around 15 micrometers.

diseases as thrombocytopenia, to boost clinical value. Flow

Hematology testing requires the separation of blood cells bycytometry is used to measure the number of white blood cells

type according to size and cell information, and their numbers

and platelets.

must be measured accurately.

Flow Cytrometry Method
With flow cytometry, the target cells are stained with a special
reagent and then irradiated using a laser diode to capture
information on cell size and internal structure. This method
detects the five different types* of white blood cell, as well as ofany abnormal cells. Flow cytometry provides clinically distinct
information depending on the numbers of each of the five typesof white blood cells and differs according to the presence of
inflammation, viruses or allergies. Although in the past sheathflow DC detection was the only method used in counting
platelets, flow cytrometry substantially increases the level ofprecision at low values, as it can be used to measure low platelet
counts. This approach allows preventive platelet transfusions to
be reduced, thereby reducing the side effects of transfusions andraising patient QOL. In the field of urinalysis, flow cytrometry isused in fully automated urine cell analyzers. In the life sciences
field, which we are currently developing, the method is also underconsideration for use in cervical cancer screening tests. In thisway, for Sysmex flow cytrometry is becoming a core technologythat has a wide range of potential applications.
* Each of the five types of white blood cell—neutrophil, lymphocyte, monocyte,
eosinophil and basophil—has a different shape and function.

Flow Cytometry Method
Shrinkage of red blood cells and platelets by means of asurface-acting agent
 Nucleic acid staining of the white blood cells to be classified
and analysis and classification of forward-scattered light,
lateral-scattered light, and lateral fluorescent light signals using
a semiconductor laser


Lateral fluorescent lightintensity
Side-scattered lightintensity
Forward-scattered lightintensity

30

Sysmex Annual Report 2012

Lateral ﬂuorescent light intensity

Side-scattered light intensity

Information on RNA and DNA amounts
Information concerning the internal
structure of cells (nucleus shape,presence of cell granules, etc.)

Forward-scattered
light intensity

Information on cell size
Laser irradiation

Basic Principles Underpinning Sysmex’s Hematology:
Sheath Flow DC Detection

A lower red blood cell count means that oxygen flow is
reduced, resulting in anemia. Conversely, an excess of red
blood cells (polyscythemia) can impair blood flow and clog

ed blood cells, which are produced by stem cells locatedblood vessels. The sheath flow electrical resistance methodin the bone marrow of bones such as the sternum, femur

distinguishes red blood cells from other types of cells in theR

and tibia, are a major constituent of the blood. These cells

blood and is the basic principal used for determining red bloodtransport oxygen to tissue cells throughout the body and movecell counts.

carbon dioxide out.

Business Activities

Three Processes in Counting Red Blood Cells

Accurate Dilution

Accurate dilution*1
Passing cells one by
one through thedetection aperture: Red blood cell
: White blood cell
: Platelet*2

Blood must first be diluted a certain amount to allow
accurate measurement of the number and size of cells. This
process reduces the number of cells per volume of blood andminimizes errors caused by blood cells piling up on top of eachother. Accurate dilution requires meticulous measurementof the quantity of blood and of the solution, or reagent. This
process requires micro-level precision in the design of themeasuring chamber and uses an apparatus that minimizes
degradation and abrasion.

Individual Passage through the Detection Aperture
Regardless of how accurately it has been diluted, a measured
sample (the diluted blood solution) will contain a large numberof cells. Lining up the cells in a row beforehand simplifies theprocess of counting them, so a stream of fluid*1 that forms asheath around the flowing blood cells is generated to align thecells. The cells flow along the stream*2 toward the detection
aperture, where cells are counted, and pass through its center.*3
Unidirectional flow prevents the stream*4 of blood cells fromflowing backward through the aperture once they have passed
through it.

Stream of ﬂuid
that forms a sheath*3

Counting cells by
the electric signals*4Counting Cells by Electric Signal
Blood cells do not transmit electric current easily, so cells
in the test sample cause resistance in a current applied
across the detection aperture through which they must pass.
Therefore, blood cells can be counted by measuring thenumber of times an electric resistance is generated. Larger
blood cells produce greater resistances, allowing the system
to distinguish cells by type.

Sysmex Annual Report 201231

Business Activities

In the life sciences domain, our mainstay system for rapid detection of lymph node metastasis
based on the one-step nucleic acid amplification (OSNA) method is used routinely for diagnosisof breast and colon cancer lymph node diagnosis in hospitals and other facilities in more than
200 locations throughout the world.

Business Activities

M

inimizing the extent of dissection in breast cancer

method of diagnosing colon cancer lymph node metastasis,

treatment is generally considered desirable in terms offollowing an operation a pathologist makes surgical incisions

the patient’s quality of life (QOL). At present, pathology labs

in 12 or more lymph nodes to prepare pathological samples.

offer a provisional diagnosis of the sentinel lymph node, where

The pathologist then views these samples under a microscope

metastasized cancer cells first reach, conduct confirmatory

to determine whether the cancer has metastasized. Post-

studies to determine the extent of resection, as well as theoperative treatment is based on the results of these tests,

post-surgical therapeutic principle. Sysmex’s gene amplifica-

but conducting detailed diagnosis on large numbers of lymph

tion detector, the RD-100i, enables the rapid and highly precise

nodes places a major burden on the pathologist. Applying thedetection of breast cancer metastases in the sentinel lymph

OSNA method while conducting diagnosis at a level of preci-

node. Having confirmed its efficacy, we are now introducing

sion equivalent to that achieved by the recommended method

the system at about 60 hospitals in Japan and about 150 inby the Japanese Society for Cancer of the Colon and Rectum.

major European countries, particularly Spain. Going forward,

This reduces the burden on pathologists and contributes to thewe plan to introduce the system in emerging markets withstandardization of post-operative treatment of colon cancer. In

growth is expected.

the future, we will expand the sales area for products employ-

Having extended the effective scope of detection to

ing this method and push forward with research designed

include colon cancer as well as breast cancer, in December

to extend its applicability to other types of cancer, including

2010 we received manufacturing and marketing approval fromstomach cancer.

the Ministry of Health, Labour and Welfare. Under the present

The OSNA Method
The OSNA method is a rapid gene amplification technique that does not require the purification of genes (mRNA) that have been takenfrom a living organism. This method enables the number of cancer cells to be determined during the limited time available during surgery
to a high degree of sensitivity.

OSNA method
TissueHomogenized buﬀer
New sample
preparation method
RD-100i (analyzer)

ȉ Stabilization of mRNAȉ Prevention of ampliﬁcation-inhibitory
eﬀectsDirect gene ampliﬁcation
by RT-LAMP(without RNA puriﬁcation)
LYNOAMP BC (proprietary reagent)

32

Sysmex Annual Report 2012

Homogenization
Gene of cancerous
cells (mRNA)
Interference
substance ofgene ampliﬁcation

Customer Feedback
The Breast Unit at The Royal Hampshire County Hospital, part of Hampshire Hospitals NHSFoundation Trust, provides a comprehensive diagnosis, treatment and support service for all
problems relating to the breast. It is one of only a few sites in the United Kingdom to offer acomprehensive “one step” approach comprising intra-operative radiotherapy (IORT) and intraoperative sentinel lymph node analysis using the Sysmex RD-100i OSNA system.
Miss Siobhan Laws
Consultant Breast and Oncoplastic Surgeon
Royal Hampshire County Hospital, UK

Business Activities

Q

What do you think is the most importantpatient benefit that has been gained fromthe introduction of the OSNA system?

sentinel lymph node biopsy first, then the wide local excision,and then we give IORT. By the time we have delivered the
IORT, the OSNA results is available, so there is no loss ofoperating time because everything fits together very nicely.

A

We have been struck at how much patients have

Like OSNA, IORT also provides convenience for patients sinceappreciated the immediate result from their sen-it is administered as a single, intraoperative dose. If a patient

tinel lymph node biopsy when coming round fromis node positive and needs further treatment such as adjuvant

the effects of the anesthetic. The patients want to know what

chemotherapy, this can begin earlier; a decision as to whether

their results are, so it’s a great relief to them when they are

to proceed to immediate reconstruction can also be made in atold that they are negative at that early stage and they are very

more timely manner.

grateful at not having to come back for second procedures.
I have certainly enjoyed not having to go back into the axilla toperform second surgery too.

Q

RHCH is one of only a very few sites thatoffer intra-operative SLN analysis using
OSNA and IORT. How has this benefitedpatients at RHCH?

Q
A

Are there any other aspects of patientmanagement that you feel are important?
We need to engage more with patients about
what they perceive as the main benefits of OSNA
technology, too. In the past, we have focused a

lot on the benefits of OSNA for the healthcare system, e.g.,
economic savings, but I think the patients really appreciate

A

OSNA and intra-operative radiotherapy (IORT)

knowing their results quickly. This is a really important benefit

complement each other beautifully because thefor them because it gives them more time to prepare (psycho-

vast majority of patients who are suitable forlogically) for their chemotherapy. Also it tends to be easier

IORT have small, low-grade tumors and are clinically node

to find lymph nodes during first surgery compared to second

negative. These are the patients who are also most suitable

surgery, and the information we gain from the lymph nodes

for sentinel lymph node biopsy and OSNA. We perform thegives important information to the oncologists for patient
treatment.

Sysmex Annual Report 201233

Business Activities

Development of Instruments
Fully AutomatedHematology Analyzers

1964
1965

Semi-AutomatedHematology Analyzers

Hemostasis
Analyzers

Urinalysis
Analyzers

Immunochemistry
Analyzers

Life Science
Analyzers

CC-10011970

CC-1001

CC-1002
TU-100CC-7101975

CC-107

CC-710World’ s ﬁrst

CC-720 model to include

CC-110CC-120CC-700CC-180CC-170CC-150CC-130a sampler

1980

TU-100

TU-110
TU-120CC-108Business Activities

CC-800CC-800E Series
E-5000/E-4000/
E-3000E-2500/
E-2000CC-700E-5000CA-100CC-780CA-100AA-100Fully AutomatedHematology Analyzers

1985CA-3000
CA-4000

NE-8000

M-2000NE Series
NE-8000/NE-7000/
NE-6000

F-800
F-500
F-300

PAMIA-10

CA-3000

YELLOW IRIS
CA-4000

PAMIA-10
PAMIA-100

CA-4100

K-1000PAMIA-20
UA-1000

1990

CA-5000

K-1000
NE-1500

K-2000SE-9000

F-810
F-610
F-310

PAMIA-30

PAMIA-30
CA-1000 CA-1000 UA-2000

K-800

SE-9000

K-4500World’ s ﬁrst model to use
a semiconductor laser

1995

UA-1000

CA-5000

F-820
F-520

CA-6000

UF-100PAMIA-50

PAMIA-50

SF-3000
CA-500 Series
World’s highest
processing capacity

KX-21

XE-2100

CA-1500
CA-1500

KX-21NHigh EndXE Series
XE-2100/XE-2100L/
XE-2100D

2000

UF-100CA-500 Series

UF-50
CA-7000
PAMIA-40i
KX-21N

Middle Range
XT Series
XT-2000i/
XT-1800i

CA-7000

PAMIA-40i

pocH-100i

GD-100UF-110i

pocH-100i

2005

Low End
XS Series
XS-1000i/
XS-800i

UF-110i

CS-2000i

HISCL-2000i

UF-1000i

RD-100iHISCL-2000i
CS-2000i

XE-5000
UF-1000i
XS-1000i
CA-8000

2010

XT-4000i

CA-8000

XN-Series
XP-3002012
XS-500i
XN-Series

34

Sysmex Annual Report 2012

UX-2000

CS-5100
CS-5100

CA-600 Series

XP Series

UX-2000
CA-600RD-100i

Functional StructureAs a comprehensive
diagnostics supplier,Sysmex has built an integrated business encompassing R&D, production,
sales and after-sales support to provide products
and services to healthcare
facilities around the world.

Functional
Fun
ncti
ctionaona
onona
n l SStracture
trraactu
ttra
ctu
t re
r

Designinga Global Value Chain
Sysmex Annual Report 201235

Functional Structure

Perspective
Throughout its R&D, production, sales and after-sales support processes, Sysmex works to build
customer satisfaction and instill confidence and trust.

O

ur products are the primary source of our strength as

feedback to our R&D divisions quickly enables us to continuously

a company. We develop in-house all the instruments,

augment product performance, operability and functionality, andreagents and software that are needed for in-vitro diagnostics,

develop high-value-added products rapidly and efficiently.
Our delivery network also is extensive. With operations

and have built all operations—from production to sales andafter-sales support—ourselves. Furthermore, delivering customer

Global Supply Chain

Research and Development
Japan
Functional Structure

Technopark

Sysmex maintains extensive R&D operations, centeredin Japan and with facilities in Europe and Asia, and theCompany actively collaborates with universities and research
institutions throughout the world. Technopark, our core R&D

Overseas
R&D Center Europe
Sysmex New Zealandfacility, is also a symbol of the “Creation of ‘knowledge’ and its
inheritance” concept. Technopark serves as a springboard for
R&D to cultivate new diagnostic technologies and high-valueadded products.

Diagnostic Reagent Development
Center in China
and others

Production (Instruments)

Production (Reagents)

Japan

Japan

Kakogawa Factory

Sysmex International Reagents

Sysmex Medica(two factories)

Sysmex RA

Overseas

The Kakogawa Factory, which produces all Sysmex instruments
shipped worldwide, provides a stable supply of high-quality
products that meet the strict regulatory requirements for
medical devices around the world. Sysmex products enjoy
an excellent reputation with customers. We have introduced
quality and process management systems to ensure quality inall processes from the testing and assembly of components to
product testing and shipment.

Sysmex Reagents America (US)Sysmex do Brasil Industria e Comercio (Brazil)
Sysmex Europe (Germany)
Jinan Sysmex Medical Electronics (China)
Sysmex Wuxi (China)
Sysmex Asia Paciﬁc (Singapore)
Sysmex India (India)
Sysmex emphasizes local raw material procurement and product manufacturing,as this approach allows stable product supply and competitive pricing. In April
2012, we built a new production wing at our Ono Factory in Japan, adding equipment and raising reagent production capacity to 1.5 times the previous level.
The Company also is expanding its reagent plant in Jinan, China, to capitalize on
rapid market growth there. Compared with 2010 levels, the augmented plant,
which commenced production in May 2012, quintupled the amount of reagent
that the factory previously produced.

36

Sysmex Annual Report 2012

at 47 locations in 29 countries, Sysmex provides products andWe currently hold the leading share of the hematology

services to customers in some 170 countries. One of our great-markets in four of the regions in which we operate: Japan,

est strengths is our globally integrated structure spanning theEurope, China and Asia. We are number two in the United

R&D, production, sales and support functions.

States, and boast the top overall share of the global market.

Sales and Support
Japan
Functional Structure

Solution CenterSeven branches, 12 sales oﬃces
Metropolitan Area Service Center

Sysmex TMC
Sysmex bioMérieux
Americas
Sysmex America (US)Sysmex Canada (Canada)

In addition to a direct sales and support network,

EuropeSysmex Europe (Germany)
Sysmex France (France)
Sysmex Middle East (U.A.E.)
Sysmex South Africa (South Africa)and others
China
Sysmex Shanghai (Shanghai)
Sysmex Hong Kong (Hong Kong)
Asia Paciﬁc
Sysmex Asia Paciﬁc (Singapore)
Sysmex India (India)
and others

local characteristics. In 2010, we converted to awholly owned subsidiary the German HITADO Group,
which sells and services point of care (POC)* testingproducts, marking our full-ﬂedged entry into the POC
testing market. To capitalize on the ongoing changes
in healthcare infrastructure in Asia, we formed a
subsidiary in rapidly growing Vietnam. Also, we established a sales and customer service base in Spain, withthe aim of expanding operations in the life sciencebusiness segment. In 2011, we established subsidiaries
in the Philippines, which is experiencing ongoing
economic development and expanding its healthcare

Direct sales

Customer needs

Indirect sales(Distributors)

Worldwide customers

Sysmex do Brasil Industria e Comercio the use of alliances has enabled Sysmex to build a(Brazil)global sales and support system tailored to meet

infrastructure, and in Russia, one of the BRICs
countries. We also plan to step up sales activities inother regions that are expected to experience highlevels of market growth, including Asia, Central andSouth America, Eastern Europe and Africa.
* An acronym for point of care, POC refers to testing that can be
performed rapidly in an operating room, intensive care unit,
examination room or at a patient’s bedside.

: Sysmex Corporation: Subsidiaries

Sysmex Annual Report 2012

37

Functional Structure

Research and Development
Through its focus on improving test quality, Sysmex has established core technologies, developed a range of “industry-first” laboratory test technologies, created advanced and highly valuable diagnostic technologies and is actively engaged in life science R&D.

ysmex’s inimitable R&D activities began in 1963 whenleveraging networks throughout the entire hospital for cus-

it became the first company in Japan to commercialize

tomers ranging from small clinics to large medical institutions.

hematology analyzers. Since then, the Company has worked

Sysmex considers R&D to be one of its most important

to improve diagnostic test quality at the microscopic level offunctions and the key source of Company growth. Each year,

blood cells by establishing core technologies for particle mea-

we invest approximately 10% of net sales in R&D to keep oursurement or bioassays and developing a range of “industry-technologies at the leading edge.

S

first” laboratory test technologies.

Sysmex has extended its business domains beyond

Functional Structure

Sysmex is leveraging the abundant expertise it has culti-

hematology to cover such laboratory test fields as hemostasis,vated in the development of products to bring efficiency toimmunochemistry, clinical chemistry, urinalysis and others. We

the increasingly complicated diagnostic testing environment.

are now working to broaden our R&D activities even further toAnother goal is to contribute to the increased efficiency andcreate new diagnostic technologies for disease management

lower costs not only in the testing laboratory, but also by

including hematology, immune diseases, infectious diseases,
cancer and diabetes.
In 2008, we completed construction on Technopark, ourcore R&D facility, designed to foster synergy by accelerating thesharing of information and expertise, as well as collaboration.
This integration of the different technologies employed in our
instruments, reagents and software, coupled with joint R&D initiatives, enables us to constantly incorporate customer feedback
into our product offerings. This congregation of researchers andengineers in a host of fields—electrical, mechanical, biological,
chemical and IT, among others—encourages interaction anddrives the creative fusion that generates new technologies.
Sysmex is also working toward the establishment of a global
R&D structure. Centered at Technopark in Japan, our structure
is linked with other facilities in Japan and overseas, including the
R&D Center Europe, Sysmex New Zealand and the Diagnostic
Reagent Development Center in China. We are also stepping
up collaboration with outside research institutions to promote
innovative technological developments that will create newmarket opportunities.
Furthermore, in April 2012 we established the ICH Business
Unit to reinforce our base and promote growth in the key nonhematology fields of immunochemistry, clinical chemistry andhemostasis. The ICH Business Unit is designed to handle theoverall management of activities in these three fields, including
strategic planning, product planning, product development,
reagent production and data assurance. With this unit, we also
aim to strengthen our specialized value chain in the ICH fields,
as well as to enhance speed and effectiveness, by developing aseamless organizational structure.

38

Sysmex Annual Report 2012

Management System Designed for Business Optimization
Research Division

Product Development DivisionThis division works to establish diagnostic
methods for cancer, chronic diseases andother targets. We have formed an organization for drawing up plans for individual
analyses including cell analysis, protein
analysis, genetic analysis and biologicalanalysis. By searching for leading-edge
technologies in each category, the divisionaims to establish new diagnostic concepts,
clinical testing applications and technology platforms.

An integrated organization for developing
instruments and reagents for individual
fields, including hematology and life sciences, this division pursues product development primarily on a market-in basis.
Specifically, the division is separated into
a department that specializes in our core
fields of hematology and system products.
The division also allocates resources tostrengthen the Company’s operations
in areas of future growth—life science
categories. This separation is designed toenhance specialization related to testingand diagnostic technologies, as well as toaccelerate product development.

Technology Development DivisionThis division creates systems for carrying
forward and extending the applicationof key technologies used in previous
mechatronics, software, reagents andother products, as well as formulating theelemental technologies needed in future
product development. It also conducts afull range of activities ranging from clinicalperformance trials to patent acquisition.

Business Strategy and Promotion
DivisionAs the business strategy division forhematology, urology and other IVD
domains, this department will promotestrategic planning and alliances inadvanced countries, as well as in emerging
markets where growth is anticipated. Alsoin the life sciences domain, department
will oversee planning and promotion ofexisting products, as well as new businesses such as lab assay.

ICH Business Unit
We established this business unit in
April 2012 to specialize in the key nonhematology fields of immunochemistry,
clinical chemistry and hemostasis (ICH).
The ICH Business Unit is designed tohandle the overall management ofactivities in these three fields, including
strategic planning, product planning,product development, reagent production
and data assurance, and to strengthen
our specialized value chain. The unit will
also aim to boost business profitability by
managing profitability in the categories ofhemostasis, immunochemistry and clinicalchemistry.

Functional Structure

R&D Strategic Planning Division
In this division, R&D staff manage andcontrol a host of activities spanningresearch to product development. The
division’s strategic planning function
involves the creation of technology strategies, the optimal allocation of management resources based on these strategies,
and the development of a global R&D
structure.
The division also formulates plans
related to the acquisition of technologies
and our own products, handles technicalinformation pertaining to commercialization and manages intellectual property.
Particularly with regard to intellectual
property, this division communicates withdepartments conducting the relevant
R&D, formulates and implements patentfiling strategies, engages in invention
identification activities and conducts
research into third-party intellectual
property.
Furthermore, the division conducts
liaison activities to foster smooth relations with related institutions in Japanand overseas, as well as handling a broad
range of other activities.

New Management System,&+%XVLQHVV8QLW(Overall management of activities spanning strategic planning to
product development)ȉ,PPXQRFKHPLVWU\ȉ&OLQLFDOFKHPLVWU\ȉ+HPRVWDVLVResearch Division(Search for leading-edge technologies)

Technology Development Division(Elemental technologydevelopment)

Business Strategy andPromotion Division

Product Development
Divisionȉ+HPDWRORJ\ȉ8ULQDO\VLVȉ/LIHVFLHQFHV2WKHUVȉ+HPDWRORJ\ȉ8ULQDO\VLVȉ/LIHVFLHQFHV2WKHUVR&D Strategic Planning Division(Technology strategies, product planning, intellectual property management, etc.)

Sysmex Annual Report 2012

39

Functional Structure

 R&D Facilities

Sysmex creates high-value-added diagnostic technologies and develops instruments and reagents mainly at the core Technopark
facility. By enhancing links with research and development centers in Japan and overseas, Sysmex works to develop innovativetechnologies that will create new markets.

Technopark
Based on the concept of the “Creation of ‘Knowledge’ and
Its Inheritance,” Technopark was established as the center of
R&D activities for the Sysmex Group in 2008, the 40th year of
establishment. In addition to having more than half of its area
dedicated to green space, laboratory and office space is locatedon the same floor, providing an optimal R&D environment.

Functional Structure

BMA Laboratory

R&D Center Europe

The BMA Laboratory is located within the Business Support
Center for Biomedical Research Activities (BMA), a corefacility in the Kobe Medical Industry
Development Project. In January 2012,
we began offering a laboratory testing
service for research involving the riskof recurrence of early-stage breast
cancer, employing a new technology(C2P: Cell Cycle Profiling).

The R&D Center Europe was opened in 2006 in Germany as
the Company’s first overseas research facility. Sysmex is taking
advantage of this European location tocooperate with research and medical
treatment institutions in the development of new testing technologies
targeting diseases and other problems
that are uncommon in Japan.

Sysmex CNA

Diagnostic Reagent Development Center in China
In December 2009, Sysmex opened the Diagnostic Reagent
Center in China. Located within Sysmex Wuxi Co., Ltd., thiscenter prepares for our entry in the
immunochemistry field in China,
which is enjoying one of the highest
rates of economic growth in Asia.
We will employ this new
development center to expedite thedevelopment of reagents that meetthe specific demands of this growing market. Our first initiative will be the development of immunochemistry reagents.

Sysmex CNA is the specialist IT company within the Sysmex
Group. Sysmex CNA specializes in medical information
systems over a broad range of fields
and has built up a strong reputation
domestically in the clinical laboratory
test field.

Sysmex New ZealandSysmex New Zealand is a Sysmex Group company that specializes in information technology. Mainly in Asian markets, thecompany develops laboratory
information systems in local
languages and tailored to otherregional requirements.

40

Sysmex Annual Report 2012Purchasing, Production and Logistics
Rigorous quality control and global supply chain management systems allow Sysmex to swiftly provide
a stable supply of products of consistently high quality to customers in more than 170 countries.

A

Manufacturing Goes Digital, Reducing Work Timetreatment test products is essential to medical care sup-

The Kakogawa Factory uses Smart Pro, a production support

port. Sysmex employs a proprietary, fully automated systemsystem that Sysmex developed in-house, to support factorythat covers all procurement operations, giving the Company aassociates, manage processes and assist quality management.

real-time grasp of raw material and component order, delivery,

We began using 3D CAD design data created at the develop-

and receipt and inspection status. This system allows Sysmex

ment stage to make work processes more visual, helping toto standardize at the R&D stage the selection of suppliers

shorten the time employees require to commit these processes

that can ensure stable delivery of appropriate raw materials

to memory and contributing greatly to their ability to absorb

and components, thereby achieving swifter R&D and better

multiple skills. Monitors located alongside workbenches depict

cost-competitiveness. We also aim to quickly launch newassembly and other processes in 3D, with an audio explanation

products into mass production, transforming the engineering

accompanying each process. This arrangement makes work

chain, including raw materials purchasing and throughprocesses easier for new associates to understand, and helps

concurrent engineering.

to maintain quality and boost productivity.
We also use our information technologies to configure

Instruments Offering High “Made in Japan” Quality

networks linking manufacturing facilities to the products

For the manufacture of instruments, we have introduced

themselves. This configuration automates the final productleading-edge production and quality control technologies toadjustment and testing processes, which cuts down signifi-

provide products that are of high quality and offer high added

cantly on time to shipment.

Functional Structure

consistent supply of top-quality diagnostic and medical-

value. For this reason, we manufacture all our instruments at
the Kakogawa Factory. We produce internally those parts thatuse proprietary technologies or for which stable sourcing is
problematic. This reduces the risk of technology outflows andlessens procurement risk, while allowing us to maintain stable
quality. For other parts, however, we maintain cooperative
relationships with parts makers who can meet our stringent
quality requirements, thereby ensuring a stable supply. “Madein Japan” and the Sysmex brand have become bywords for
quality, and our products are recognized worldwide for
their reliability.
Furthermore, as around 80% of the Kakogawa Factory’s
products are shipped overseas, we have structures inplace to ensure that we meet the regulations of each
destination country.

Sysmex Annual Report 2012

41

Functional Structure

Global Reagent Manufacturing to Ensure Stable
Product Supplies

increase productivity. Meanwhile, our Seishin Factory handles
the production of reagents requiring advanced, specialized
knowledge that are used in non-hematology fields, such as

In its reagent production, Sysmex employs thorough quality

immunochemistry, clinical chemistry and hemostasis. Sysmex

management and makes every effort to provide reagentsis also expanding its overseas production bases to meet

consistently and stably. Our core production facilities ingrowing overseas demand and improve its ability to compete.

Japan are the Ono Factory and the Seishin Factory of Sysmex

The Company currently has nine production facilities in seven

International Reagents, a subsidiary. The Ono Factory handles

countries. By introducing at overseas facilities the expertise in

the mass production of reagents using labor-saving facilities.

manufacturing technologies that we have cultivated and theIn April 2012, we began operating a new automated produc-quality assurance systems that are in place at our Ono andtion line at the plant that makes reagent packages (paper

Seishin factories, we are working to achieve a high-quality,

containers and reagent cartridges), including the concentrated

efficient production system on a global basis.

reagent used in our new XN-Series, which should significantly

Improving our Global Supply Chain Management
Systems by Reorganizing Logistics Locations andReconfiguring Supply flow
Functional Structure

For instrument and reagent manufacturing, Sysmex promotes
upstream purchasing and is strengthening the Company’s
unified development and production structure to enable
early-stage mass production. Sysmex Trade Mission (STM), an
electronic purchasing system that automates complex ordering activities, helps reduce procurement costs and strengthengroupwide production management.
For the logistics function that is responsible for delivering
final products to customers, Sysmex is improving its global
supply chain management (SCM) system by reorganizing
domestic logistics locations and reconfiguring supply flow
overseas. In the United States, the Company reorganized its
reagent supply system, creating a logistics system that encourages direct communications with customers. In Europe, theCompany established a European parts center and reworked
its system for supplying the parts needed for maintenanceservices. In the future, the Company will reinforce its IT-based
logistics management system to allow the groupwide sharing
of inventory and order information.

Making Employees the Heart of High-Quality ProductionT

he Kakogawa Factory uses the cell production method, in which one worker handles
the assembly of an entire instrument from start to finish. The method has played amajor role in boosting employee awareness and improving their ability to maintain product quality. Recognizing that they are the ultimate deciders of quality helps employees
recognize the importance of the role Sysmex products play and providing customers withhighly reliable measured data. In addition to raising attention to quality in these ways.
This approach provides training to develop employees’ skills and expertise.
Employees also take part in voluntary improvement initiatives designed to improve
the quality of complex measurement units.

42

Sysmex Annual Report 2012 Purchasing Production and Logistics Facilities

Instrument Production
Kakogawa Factory (Japan)
The Kakogawa Factory is a production base for diagnostic
instruments that uses quality control systems to produce highly
reliable instruments based on international and industrywide
quality control standards, and the laws and regulations ofdestination countries. The plant provides the capacity to supply

some 300 products to markets
around the world and employs
flexible production systems.

Reagent Production Facilities in Japan
Seishin Factory(Sysmex International Reagents)(Sysmex International Reagents)

The Ono Factory in Japan is dedicated to the production of
about 1,300 reagents, centered on high-volume products for thehematology and urinalysis segments. In April 2012, we built a
new production wing at the factory, adding equipment and raising reagent production capacity to 1.5 times the previous level.
The production lines are divided into some types according tocapacity, and the factory seeks
to simultaneously increase
quality, reduce costs and mass
produce by optimizing automated and manual operations.

The Seishin Factory is mainly responsible for the production ofreagents and draws on wide-ranging production technologies
to produce a line of around 900 products ranging from clinicalchemistry to immunochemistry reagents, hemostasis reagentsand reagents for use as
quality control materials. The
factory has also constructed
a flexible production system
to meet requirements forhighly diverse, low-volume
manufacturing.

Functional Structure

Ono Factory

Overseas Reagent Production Facilities
In order to ensure a timely and stable supply of reagents throughout the global market, Sysmex operates reagent factories in Germany,
the United States, Brazil, China, Singapore and India.

Americas

EuropeSysmex operates two reagent factories in the Americas, which
represent the world’s largest market. Establishing a factory in
Chicago in 1993, the Company doubled its capacity in 2007 tomeet growing demand andenhance cost competitiveness.
Another reagent plant wenton line in Brazil in 2000 inanticipation of future growth in
the region.

In Europe, the location of
Sysmex’s first venture overseas,
we established a regent factoryin Neumünster, Germany, in
1993. To meet rising European
demand for regents, we doubled
the plant’s capacity in 2007.

China

Asia Pacific

The first of these was established in Jinan in 1995, followed bya plant in Wuxi in 2003. We have expanded the Jinan Factory,
which in May 2012 began producing reagents at five times thelevel it manufactured in 2010.
The Wuxi Factory was the first
operated by a non-Chinesecompany to receive local
pharmaceutical manufacturing
approval.

In the Asia Pacific region, which is slated for future growth,
we opened the Singapore Factory in 1998. In 2007, we also set
up a reagent factory in India to meet fast-growing demand inthat market. This combination
allows us to provide a stablesupply of high-quality reagentsbroadly throughout the Asia
Pacific region.

Sysmex Annual Report 2012

43

Functional Structure

Sales and After-Sales Support
Sysmex does more than just sell products; we provide maintenance and other support services,
as well as scientific support to deliver consistently accurate test results and instill confidence.
We offer high added value as a provider of IVD solutions.

hen testing is interrupted, whatever the reason, physi-technologist can conduct testing efficiently we do not merely

cians become unable to diagnose their patients. We

engage in the sales of diagnostic instruments and reagents, butaddress this situation by providing after-sale services and scien-

provide total solutions that employ information technology totific support, which inspire the trust and confidence of custom-

network the entire laboratory. This improves healthcare services

ers throughout the world. Confirming this satisfaction, survey

in a number of ways, such as reducing patient waiting time andresults demonstrate that Sysmex has earned a solid reputation

providing information on test results to the doctor. At present,with its customers for meeting their expectations for instrument

we take this overarching approach mainly in our proposals toperformance, as well as for overall service performance.

customers in developed countries. In contrast, in emerging

W

markets where healthcare demand is rising rapidly in line with

In line with ongoing medical advances, healthcare is growing
Functional Structure

more sophisticated, and treatment regiments are changing andeconomic growth, in addition to providing high-quality products

becoming more diverse. Customers in developed countries arewithout defects, products that have such specifications as highdemanding ever more advanced and highly specialized testing,processing capacity and swift after-sales services are needed.

more efficient testing and even higher healthcare service levels.

In addition to providing products that meet regional demands

Instead of simply aiming to reduce the time from the startsuch as these, we operate flexibly by combining proprietary andof testing to the delivery of results, we strive to shorten the

distributor sales networks. In these ways, Sysmex concentrates

lead time between a patient’s arrival at the reception desk andon meeting the needs of individual countries, building confi-

the delivery of test results. To this end, to ensure that the lab

dence and instilling confidence among its customers.

Customer Assessment in the United States (by IMV ServiceTrak™)• Survey of Customer Satisfaction
A survey of customer satisfaction published in 2012 has shown that Sysmex is ranked No. 1 in the United States for instrument
performance meeting expectations.

Instrument Performance Meets Customer Expectations
SysmexCompetitor 1

Competitor 2Competitor 3

Competitor 4

Industry Avg.

1=Very Poor 2=Poor 3=Fair 4=Good 5=Very Good 6=Excellent

Sysmex Rated Highest for the Past 13 Years
5.6

5.42
5.4
5.2

5.04

5.0
4.8
4.6
4.4
4.2
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Founded in 1977, IMV continues to be a leading supplier of comprehensive clinical diagnostic and medical imaging market research reports
and site-specific databases for the healthcare industry.

44

Sysmex Annual Report 2012

Delivering Specialized, High-Value-Added Solutions
Cultivated in Japan throughout the World

China, Germany and Singapore, and dispatches service engi-

Sysmex maintains seven branches and 12 sales offices inneers to customer premises as necessary. In the United States,

Japan, constituting a top-class sales and support network in

where customer support functions must cover extensive

the domain of in-vitro diagnostics. We are in the process ofareas, close collaboration between call centers and service

extending to the rest of the world the value-added proposal-

engineers allows Sysmex to respond rapidly to customer

making skills and highly specialized support services we haverequests. In addition, the Company is rolling out on a global

cultivated in Japan, as we strive to build sales and support

scale the Sysmex Network Communication Systems (SNCS),

service networks that are carefully matched to the needs ofa support service that connects the Customer Support Center

individual markets.

and customers’ products via the web for the online provision

Sysmex operates call centers in Japan, the United States,of remote instrument maintenance and quality control. The

inquiries around the clock, 365 days a year.* Knowledgeable

SNCS is used by many customers and has earned a strong

specialists answer questions not only about instruments

reputation. The Company has launched the SNCS in Japan, theand reagents, but also about scientific matters. Sysmex has

United States, Europe and other advanced countries, as well as

established a rapid support system by stepping up cooperationin Asian and other emerging markets and is steadily expanding

between the Customer Support Center and Sysmex offices andthe installed base.

sales offices across Japan.

* Service for customers who have maintenance contracts

Functional Structure

In Japan, the Customer Support Center responds toSales Strategies

S

ysmex employs sales strategies tailored to the characteristics of the regions and countries where it operates. In Japan, North
America and parts of Europe and the Asia Pacific, we conduct direct sales, with Sysmex salespeople maintaining close relationships
with customers. In other parts of the world—particularly in emerging market areas—we have found indirect sales, which leverages
the long experience and expertise of local distributors, to be an effective approach. In China, for example, we employ more than 100
local distributors. In Latin
America and Russia, among
other regions, we havealliances in place to takeadvantage of the sales
networks operated by leading global pharmaceuticalmanufacturers.

Direct sales
Indirect sales

Sysmex Annual Report 2012

45

Functional Structure

Functional Structure

Sponsoring Scientific Seminars for
Advancement of Healthcare

information on the latest trends in hematology. The Company

To promote higher levels of healthcare service, Sysmex

expanded this program to China in 1998. In 2011, we held theprovides an ISO support service for healthcare institutions

Sysmex 14th Scientific Seminar in China in Xiamen, Fujianthat are creating ISO management systems. Leveraging theProvince, which was attended by approximately 900 people.

expertise we have gained through ISO 9001 and ISO 14001

At the seminar, we provided up-to-date information related tocertification, as well as our experience as a manufacturer ofhealthcare and clinical testing to doctors, nurses, laboratory

medical instruments, we consult with organizations on earningtechnologist and other participants in China. Sysmex now

certification under ISO 9001 and ISO 15189, as well as otherconducts seminars and other activities periodically in Thailand,

standards. Our services have been instrumental in helping a

Indonesia, India and other Asian countries and holds sympo-

number of customers gain ISO certification.

siums in Europe and Americas.

began conducting annual seminars in Japan in 1978 andSysmex sponsors hematology seminars around the world
to provide physicians and laboratory technologists with

Sysmex Network Communication Systems
SNCS puts the Customer Support Center on line, enabling Sysmex to manage the precision of customer equipment in real time, automatically monitor equipment and provide information over the web.


Online Quality Control
Precision management data is transmitted automatically over theInternet on a daily basis. The system conducts sample surveys todetermine precision. Customers can browse up-to-the-moment
survey results.

Sysmex Network Communication Systems
SysmexHospital

Network

Online Support
Analyzers retain a host of data, such as error logs, numberof operations and set values. This information is transmitted
automatically to our server, allowing us to understand the statusof customer equipment and, if conditions warrant, offer advice tominimize potential damage.

Automated hematology
analyzer XN-Series andother Sysmex instruments
Customer Support Center

1. Online Quality
Control
2. Online SupportPreventive Maintenance Checks
When an instrument shuts down, information on the numberof operations is automatically sent to Sysmex, so that we candetermine replacement intervals based on the rated numberof operations.



Failure Prediction Function
Linking the failure prediction function with field support enables
us to remotely monitor the status of the analyzer componentsof each instrument. This allows us to predict failure times andprovide maintenance before it occurs.

46

Sysmex Annual Report 2012

3. Preventive
MaintenanceChecks4. Failure
Prediction
Function

Note: Such services may not be available on some products and incertain regions.

Corporate GovernanceS

ysmex considers
reinforcing corporate
governance one of its mostimportant management
topics. We aim to maximize
the overall corporate valueof the Group through management robustness, bettertransparency and improved
management speed andefficiency.

Designinga Trustworthy
Company
Sysmex Annual Report 201247

Corporate GovernanceCorporate Philosophy and Core Behaviors
Our corporate philosophy, the “Sysmex Way,” consists of three parts: the Mission, which deﬁnes
our social raison d’être and states how we hope to contribute to society; the Value, which describes
the values and management style that we must abide by; and the Mind, which expresses the mindset and code of conduct that every employees within the Sysmex Group must observe.

Shaping the advancement of healthcare.

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

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

Core Behaviors
To Our Customers

To Our Shareholders

We deliver reassurance to our customers, through unmatched

Our shareholders can rest assured that we will continue toquality, advanced technologies, superior support, and actions

improve the soundness and transparency of our managementthat consistently reflect the viewpoint of our customers.

policies, while promoting information disclosure and close

We constantly look out for our customers’ true needs, andcommunications.

seek to generate new solutions to satisfy those needs.

We commit ourselves to a consistent yet innovative styleof management, in order to achieve sustainable growth and

To Our Employees

increased shareholder value.

We honor diversity, respect the individuality of each employee,and provide them with a workplace where they can realize

To Society

their full potential.

We carry out our business in strict compliance with laws andWe value the spirit of independence and challenge, provide

regulations, as well as in adherence to high ethical standards.

employees with opportunities for self-fulfillment and growth,

As a responsible member of society, we play an active roleand reward them for their accomplishments.

in resolving environmental issues and other problems that
impact our society today.

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

48

Sysmex Annual Report 2012Corporate GovernanceManagement Organizationand maintain systems for appropriately supervising theSysmex has adopted the corporate auditor system. The current

conduct of business on the part of the directors. The corpo-

management organization consists of eight directors (sevenrate auditors also maintain close communications with theof whom are executive officers), four corporate auditors

Internal Audit Office, exchanging information and opinions(including two external auditors), and 14 executive officers.

as necessary, and confirm and evaluate the appropriateness

The Company adopted the executive officer system andof business execution. The Board of Auditors will continue toestablished the Nominating Committee and the Compensation

enhance management soundness by engaging in appropriate

Committee to increase the speed of decision-making in the

supervision of the execution of business as stipulated by law.

conduct of business and respond quickly to changes in the

The Board of Auditors works closely with the accounting

business environment.

auditors on the audit plans report (annual) and the audit
results reports (annual), exchanging information and opinions

Matters Concerning Business Execution,
Auditing, Appointments, Supervision andOther Functions

as necessary, such as when conducting internal control audits

The Board of Directors consists of eight directors. The board

Tohmatsu to perform a certified public accountants audit. In

meets regularly once a month to deliberate on important

addition to conducting an audit of the entire Sysmex Group,

management issues and convenes extraordinary meetings as

the Company maintains an environment that makes it pos-necessary.

sible to rapidly cope with changes in the accounting system.

The Global Strategic Committee consists of the president

related to financial reporting.
The Company has contracted with Deloitte Touche

The Company has contracts in place with several law offices

and executive officers. As a rule, this committee meets onceand maintains a structure to solicit and obtain advice ona month to deliberate on the Group’s management direction

important matters as necessary.

The Steering Committee consists of the president andInternal Control Systems

executive officers. The committee meets once a month, inprinciple, serving as a consultative body to the president
to deliberate on important matters concerning the Group’sbusiness.
The Group Management Reporting Committee consists

Systems for Ensuring That the Execution of Duties byDirectors and Employees Is Compliant with the Law
and the Articles of Incorporation
Sysmex defines compliance as “the conduct of open andof the president and executive officers, directors of overseas

aboveboard business activities on the basis of observance ofregional headquarters and division managers. The committee

laws and regulations and high ethical standards” and main-

meets once a quarter, in principle, reporting important mat-tains a system to ensure compliance as described below.

ters concerning the Group’s operations.

The Company is promoting and enhancing GroupThe Operating Committee consists of managers of divi-

compliance, as it believes compliance countermeasures are

sions. The Committee meets once a month to find solutions

the first and most important way to maintain society’s trust

to cross-functional problems.

and counter risk. The Company implements and strengthens

In the fiscal year ended March 31, 2012, the Board ofcompliance in the corporate group under the control of a

Directors met 12 times, the Global Strategic Committee 14 times,

compliance officer and compliance committee. The Company

the Steering Committee 17 times, the Group Management

rigorously ensures compliance through education and training

Reporting Committee four times and the Operating Committee

for directors and employees, promotes the rapid detection

12 times to address matters relating to management strategy

and correction of violations of the law or the Articles ofand important issues facing the Group.

Incorporation by means of an internal compliance related

The Board of Auditors consists of four corporate auditors,
two of whom are external auditors. The corporate auditors at-

Corporate Governanceand important strategic issues.

reporting system, and conducts audits of the compliancestructure by means of the Internal Audit Office.

tend the Board of Directors and Steering Committee meetings

Sysmex Annual Report 201249

Corporate Governance

Systems for the Retention and Management ofInformation Relating to the Execution of Duties byDirectors

subsidiaries and ensures the appropriateness of business

The Company appropriately retains and manages information

ies and advance discussion concerning important matters.

activities throughout the corporate group by such means asperiodic reporting on the details of the business of subsidiar-relating to the execution of duties by directors in accordancewith document management regulations and maintain theinformation in a state available for inspection as necessary.

Assignment and Independence of Employees toAssist Corporate Auditors
Although the Company does not assign full-time staff to assist

Regulations Concerning the Management of Risk andOther Systems

corporate auditors in the performance of their duties, employees

To maintain a structure concerning risk management, thetors to conduct efficient audits at important places of business.

entire Group complies with risk management regulations

At the request of the corporate auditors, the Companyof the Internal Audit Office cooperate with the corporate audi-

established by the Risk Management Committee for theprovides full-time staff to assist the Board of Auditors. In

integrated management of risk throughout the Company. The

such case, the directors discuss with the corporate auditors in

Company endeavors to discover foreseeable risks, select theadvance matters such as the transfer of such support staff.

most important of these risks, clarify the sections responsible
for coping with risks, establish countermeasures and engage
in measures to mitigate risks.

Systems for Reporting to the Corporate Auditors andSystems for Ensuring Effective and Efficient Auditingby the Corporate Auditors

Corporate Governance

Systems to Ensure That Directors Execute Their
Duties Efficiently

If a director discovers a violation of the law or the Articles

The Company has positioned the Board of Directors as thesignificant damage to the Company, the director is respon-

institution to make important management decisions andsible for promptly reporting that fact to the Board of Auditors.

of Incorporation or a material fact that poses risk of causing

supervise the execution of the Company’s business affairs.

The corporate auditors attend Board of Directors and

The Company has introduced the executive officer system toother important meetings, read important documents suchbe capable of making swifter operating decisions and respondas approval requests, and request explanations from directors

quickly to changes in the business environment.

and employees as necessary.

With respect to the management of business, theaccordance with the organization regulations, scope of

Basic Policy on and Status of Systems for Excluding
Antisocial Forces

authority regulations, and approval procedure. The Company

Sysmex has in place a Compliance Code that applies to all

establishes mid-term plans and annual management plans,

executives and associates throughout the Sysmex Group. We

periodically confirms the progress made with those plans, andmaintain absolutely no relationships with antisocial forces, andtakes any necessary measures.

we take a firm stand to thoroughly counter any such forces.

Company ensures the efficient execution of business in

Our education and training programs for executives andSystems to Ensure the Appropriateness of Business
Activities in the Corporate Groupassociates provide a thorough grounding on the exclusion

The Company ensures compliance in accordance with theplace to respond quickly and appropriately to any overtures.

compliance code applied to all the directors and employees

Furthermore, we maintain close relations with specializedof companies in the Group. In conformance with regulations

external institutions to gather information about the activities

established with respect to risk management, the Companyof antisocial forces.

maintains groupwide risk management systems based on
those regulations. The Internal Audit Office conducts groupwide internal audits.
With regard to the management of subsidiaries, theCompany respects the autonomy of the management of50

Sysmex Annual Report 2012of antisocial forces. We have an internal reporting system inDirectors

Hisashi Ietsugu

Yukio Nakajima

President and CEO

Member of the Managing Board and Executive Officer
Managing Director
Corporate Business Planning, Corporate Business Administration,
Human Resources & General Affairs, Corporate Executive Office

Kenichi Yukimoto
Member of the Managing Board and Executive Officer
Senior Managing Director
CSR

Masayoshi Hayashi
Member of the Managing Board and Executive Officer
Senior Managing Director
Business Management (Japan), Sales & Marketing, Scientific Affairs,
Customer Support

Shigenori Ohigashi
Member of the Managing Board and Executive Officer
Managing Director
Regulatory Affairs & Quality Assurance, SCM,
Manufacturing Management, Instrument Production

Corporate Governance

Front row, from left: Kenichi Yukimoto, Hisashi Ietsugu, Masayoshi Hayashi
Back row, from left: Kazuya Obe, Yukio Nakajima, Shigenori Ohigashi, Koji Tamura, Mitsuru Watanabe

Koji Tamura
Member of the Managing Board and Executive Officer
Managing Director
IVD Business Development, Life Science Business Operations,
New Business Development,

Kazuya Obe
Member of the Managing Board and Executive Officer
International Business Management

Mitsuru Watanabe
Member of the Managing Board and Executive Officer
R&D Strategic Planning, Central Research Laboratories,
Technology Development, Product Development

Sysmex Annual Report 201251

Corporate GovernanceCorporate Auditors
Katsuo Uhara
Standing Corporate Auditor

Masami Kitagawa
Standing Corporate Auditor

Hiromu Fujioka
Corporate Auditor

Kuniaki Maenaka
Corporate Auditor

From left: Hiromu Fujioka, Katsuo Uhara, Masami Kitagawa, Kuniaki Maenaka

Corporate GovernanceCompliance

Committee conducts ongoing and in-depth investigations

Sysmex has established a compliance code to be observed byto confirm export destinations or product usage. In 2008,

all executives and employees of the Sysmex Group in Japan

the Kobe Customs Office approved Sysmex as a Designatedand overseas. The Company’s view of compliance is definedExporter under the Designated Export Declaration System.

as “the conduct of open and aboveboard business activities

This system is designed to speed up administrativeon the basis of observance of laws and regulations and highprocedures for products distribution in line with tighter

ethical standards.” Various training activities are underway,

security procedures and greater international distribution

including groupwide programs on the introduction of the com-of products. Only exporters with an excellent compliancepliance code, to ensure that all employees have a thoroughrecord are approved as Designated Exporters. Sysmex markets

understanding of the code. The Company has also appointed

its products around the world and now aims to improve its

Compliance Training Managers in each Group company.

service by using the Designated Export Declaration System to

In 2007, Sysmex looked to combine its compliance andrisk-management systems and began managing complianceachieve greater administrative efficiency in export procedures.
The ultimate goal in the Company’s pursuit of complianceactivities on a groupwide basis under the direction of ais for every Sysmex employee to be aware of compliance as an

newly established Risk Management Officer. The Groupongoing factor and to be able to apply this understanding inCompliance Sub-Committee meets periodically to confirm

their work. Sysmex will continue to ensure thorough compli-

the implementation status of the Compliance Promotion Plan

ance to remain a Company that stakeholders consider highlyand deliberate the overall direction of the Group’s compliancetrustworthy.

activities. To promote and supervise compliance activities,
Sysmex has established “Campanula Lines” as points of con-

Risk Management

tact for all Group employees in Japan for advice or questions

Sysmex has raised the bar on risk management by promoting

on any compliance issues. The Campanula Lines are designed

these activities from a divisional level to a companywide

to eliminate any concerns held by the staff member seeking

risk management system. In 2007, the Company establishedadvice, for example by providing contacts with male or femalea Risk Management Committee to steadily address risk

managers or external legal consultants.

responses, prioritized according to importance.

For product exports, Sysmex has established a Security

52

In terms of quality, Sysmex is working to improve internal

Export Control Committee to ensure the Company’s tech-quality assurance levels and to further improve its quality

nologies and products are not used illegally overseas. The

management system (QMS). Moving toward the establishment

Sysmex Annual Report 2012

of a groupwide QMS, Sysmex is pursuing ISO certification

earnings reports, as well as liaising with the communications

centered on the Quality Assurance Department. The Company

divisions responsible for disseminating this information exter-

has introduced quality training to promote an understand-nally. Information on Company decisions and earnings reports

ing of QMS, build individual employee awareness of theseis disseminated quickly after deliberation by the Steeringsystems and ultimately raise quality control levels. InternalCommittee or following decisions by the Board of Directors

quality audits, which are conducted by a committee of internalor the president. Any issues that arise are reported to the

product quality auditors selected by each department, provide

president, following deliberation by the Steering Committee,

periodic checks on the operational status of the QMS.

before being promptly disclosed publicly.

We disclose information in accordance with the timely

Sysmex will reinforce its risk and quality management

disclosure regulations that stock exchanges have establishedprocedures to ensure the ongoing trust of a wide range

for this purpose. Managerial divisions create documents onof stakeholders.

decisions that have been made, issues that have arisen, andExecutive Officers

Corporate Governance

From left: Kenji Tachibana, Kaoru Asano, Takashi Goda, Michiaki Ishida, Yukio Hamaguchi, Junzo Yamamoto, Iwane Matsui

Michiaki Ishida

Junzo Yamamoto

Executive Officer
ICH Business Unit

Executive Officer
Executive Vice President of Instrument Production

Takashi Goda

Kenji Tachibana

Executive Officer
Business Management (Japan), Sales & Marketing

Executive Officer
Executive Vice President of IVD Business Development

Yukio Hamaguchi

Iwane Matsui

Executive Officer
Executive Vice President of Immunology & Chemistry Product Engineering

Executive Officer
Executive Vice President of Corporate Business Planning

Kaoru Asano
Executive Officer
Executive Vice President of R&D Strategic Planning

Sysmex Annual Report 201253

Corporate GovernanceOperating Risks

comprehensive quality management system. However, earnings could be affected if problems with product quality wereOverseas Sales
Sysmex sells to overseas customers through its overseas

to arise nevertheless.
To avoid this situation, Sysmex works to maintain productaffiliates and distributors. For this reason, Sysmex hedges

quality in accordance with international standards, suchagainst the risk of currency fluctuations through exchange

as ISO 13485, and local laws and ordinances, such as thecontracts and other means. Nevertheless, the Company’s

Pharmaceutical Affairs Law. Sysmex reviews on a daily basis

operating results and financial position are affected by foreign

product information from Japanese and overseas markets,

exchange fluctuations. The proportion of consolidated net

as well as from within the Company; collates technicalsales contributed by overseas sales is rising each year, frominformation that may improve design quality; and implements

68.3% in the fiscal year ended March 31, 2010, to 69.1% in the

rigorous quality checks at the start of mass production andfiscal year ended March 31, 2011, and 70.5% in the fiscal year

prior to product launch.

ended March 31, 2012.
As of May 2012, the Company assumes forex rates of
US$1.00 = ¥80 and €1.00 = ¥105.

Stable Product Supply
Sysmex markets its products to customers in more than 170
countries and works to ensure the stable supply of these

Corporate Governance

The Impact of Healthcare System Reform

products to customers. The Company might experience dif-

Against a backdrop of a sharp decline in the birthrate andficulties with procurement if, for example, business operations

rapid aging of the Japanese population, advances in medical

were suspended at suppliers or the supply of raw materials

technology, increased demand from patients for a better

was interrupted. If production facilities sustained damage

quality of life (QOL), and other changes in the healthcare

due to large-scale natural disasters, fires or other major

environment, Japanese healthcare system reform continues.

calamities, our ability to supply products to the market could

Such reforms are designed to optimize healthcare costs

be impaired.

and efficiently provide high-quality healthcare services. The

For these reasons, Sysmex hedges this risk by sourcing

Company’s mainstay diagnostics business could be indirectly

raw materials from multiple companies. We are also enhanc-

affected* by such healthcare system reforms.

ing initiatives to prevent damage to production bases and to

Amid ongoing healthcare cost optimization measures andrestore facilities in the event damage is incurred.

demands for greater efficiency in hospital management, more
Sysmex will boost its investment in the life science field,

Measures to Counter Risks Associated with
the Use of Information Systems

including definitive diagnostic tests for cancer, and strive toSysmex employs information technology in its decision-mak-meticulously respond to diversifying needs by providing total

ing procedures, such as transmitting information, supporting

solutions that combine instruments and reagents, informationcore businesses and completing approval documents via thetechnology and after-sales support.

Company’s internal network.

advanced medical care and new clinical testing procedures,

The Company has therefore introduced countermea* The Japanese medical fee system is amended every other year. In 2012, feessures to minimize the potential operational impacts ofremained essentially flat, with overall fees increasing at a rate of 0.004%,
and Sysmex expects a negligible impact on earnings compared to theprevious year. Diagnostic tests are covered by a fee for the provision of
the test, unlike the fixed reimbursement prices set for pharmaceuticals.
Therefore, any changes made to test fees by amendments to the medical
fee system should not have a direct effect on Company earnings.

network or information system disruption, computer viruses
or unauthorized external access to information systems.
Sysmex has in place secondary, alternate network routes;
implements daily system administration procedures; runs
security measures including virus gateways; and works to

Product Quality
The instruments and reagents that Sysmex supplies must
be extremely reliable, so the Company has introduced a54

Sysmex Annual Report 2012

reinforce its internal controls, for example by controlling
access through strict user management procedures andfingerprint authorization.

Sysmex ValueFounded in Kobe morethan 40 years ago,
Sysmex is now undergoing a transformation.
The Company is moving
its operations to a newstage, in order to fulfill its
social responsibilities andcontribute to a comfortable and healthy society,thereby enhancing its
corporate value.

Sysmex Annual Report 2012

Sysmex Value

Designing
Socially Responsive
Contributions

55

Sysmex Value

Brand Equity
The Sysmex brand is a symbol of our efforts to advance the Company to the next stage. The
brand also signifies a promise to all stakeholders of our efforts to fulfill their expectations.

he Sysmex corporate logo expresses our deep commit-

Sysmex products and services are used by healthcare

ment to pioneering efforts as a frontrunner in healthcare

institutions in more than 170 countries. We also have a diverseT

as we continue to develop innovative testing and diagnostic

range of stakeholders, including the business partners withtechnologies to raise the level of human health and instill

which we have alliances in place and conduct joint research,greater confidence. The shape reminds us of the infinity sym-and the shareholders and regional communities that support

bol, “∞,” and illustrates the unlimited possibilities of Sysmex.

our activities. The Sysmex brand conveys our determination to

The ocean and mountain motif evokes the evolution of life asenhance our corporate value to contribute to society and meetwell as the landscape of Kobe, the birthplace of Sysmex.

the expectations of stakeholders throughout the world.

Sysmex Value
Kobe is well-known as a port city surrounded by nature, especially sea and mountains.

56

Sysmex Annual Report 2012

and enhance incentives for inventors. Patent remuneration isIntellectual Property Activities

provided based on rankings in accordance with the magnitude

Sysmex seeks to boost brand equity through carefulattention to its trademarks, patents and other intellectual property rights.

of the contribution using an original calculation formula based

In line with its expanding business domains and global devel-

dance with Sysmex’s employee commendation regulations.

opment, Sysmex has established basic principles to share with

Sysmex holds approximately 1,363 patents worldwide,

employees its fundamental thoughts on intellectual property

concentrated in Japan, the United States and Europe. We are

activities and do its utmost to strengthen the Group throughstriving to ensure worldwide flexibility in R&D and operational

these activities.

development by also acquiring patent rights in the rapidly

In accordance with these basic principles, the Company’s

on examination of factors including sales of products to which
the invention has been applied and royalty income in accor-

developing China and Asia Pacific regions.

basic policy on specific intellectual property activities is to

In recent years, counterfeit Sysmex reagents have been

liaise with R&D divisions, uncover latent intellectual property

discovered in China, Indonesia, Malaysia, Pakistan and otheropportunities and survey the intellectual property rights ofcountries. As we cannot guarantee the diagnostic reliability

third parties.

of these knock-offs, we have cautioned consumers by placing

In addition to reinforcing the liaison function (supporting

advertisements in local newspapers. We have also mounted

idea generation, converting intellectual property into rights

extensive efforts to elicit the cooperation of these countries’

and leveraging these assets), we take a proactive stance on

governments in addressing the problem.
As a research-driven company, Sysmex is reinforcing

our effort to quickly convert research successes into valuable

its intellectual property management and supporting theintellectual property. We also have in place a remuneration

knowledge-building efforts of its employees. We believe thatsystem that includes bonuses based on patent performance.

persevering in these areas will help us sustain our global

This system is designed to contribute to the Group’s businesscompetitiveness.

Patent Applications

Patents Held, by Region
J

Japan

J

Overseas300

Asia Paciﬁc 3%

250

China 6%

Sysmex Value

intellectual property education activities, which are part ofJapan 40%

85 37

200
150

412

100
50

1,363

546

As of March 31, 2012

Europe 30%02003 2004 2005 2006 2007 2008 2009 2010
(Years ended March 31)

2011

2012

283
Americas 21%

Sysmex Annual Report 201257

Sysmex Value

Socially Responsible Activities
We aim to instill confidence in stakeholders throughout the world. In accordance with beliefs
firmly held since our founding, as a healthcare specialist we aim for a healthy and prosperous
society.

We believe that our corporate responsibility involves

place a new human resource system founded on management

delivering products that are consistent with the Sysmex

by objectives (MBO). In our companywide human resource

brand and conducting business activities that contribute to adevelopment program, initiatives emphasize employee skill

healthy and prosperous society. To this end, Sysmex fosters

development through level-specific, globalization and othera corporate culture where each employee can feel a sense oftypes of training.

fulfillment in their work and emphasizes excellent communications with all stakeholders as it conducts its corporate activities.

As part of its efforts to develop a positive working
environment, Sysmex introduced flex-time systems to enable
employees to adjust their work hours for childcare and longterm nursing care responsibilities. In this way, the Company isDeveloping Human Resources

working to improve its systems in support of a better work-life

Sysmex fosters a corporate culture where employees
can feel a sense of fulfillment in their work, based on
mutual agreement and common understanding.

balance. In April 2009, we opened Sysmex Kids’ Park, anSysmex believes that recruiting, retaining and developing

appropriate care-giving environment.

human resources is among the most fundamental of manage-internal childcare facility where parents can go about theirwork assured that their children are being nurtured in an
We have extended the scope of these activities to include

Sysmex Value

ment tasks. The Company strives to create an environment

overseas communities, as well, and in the fiscal year ended

that encourages individual employees to develop their

March 31, 2012, we were rated a company where it is “easy tostrengths. Currently, around 50% of Sysmex employees

work” by three organizations, scoring in the top 100 in suchare stationed at companies overseas. As it becomes morerankings in Japan, the United States and Germany. We will

global, the Company is attracting an even broader range ofcontinue with such efforts to create a comfortable working

people from different countries and cultures; in short, ourenvironment for our employees.

human resources are rapidly growing more diverse. Sysmex• Japan: 68th / NICES (Nikkei Inc.)

supports individual diversity and accordingly works to build• United States: 66th / Top 100 Best Places to Work in

an atmosphere that encourages autonomy and a spirit ofHealthcare (ASC Communications)challenge, as well as a system that rewards employees for their• Germany: Top 100 ranking / Great Place to Work® Institutesuccesses. In line with these objectives, in April 2011 we put in

Evolve as an Attractive Company
Evolve into an attractive company by developing human resources and a culture to generate high value
Human resources (enhance individual skills)

System (respect diversity, rules)

GlobalManagement

Understanding

Transparency

Autonomy

Teamwork

Equal opportunity

Training

Foster a positive corporate climate, create original value and oﬀer trust and conﬁdence to stakeholders

Oﬀer job satisfaction and ideal working conditions

58

Sysmex Annual Report 2012

Ensure support from diverse stakeholders

methods for new clinical testing in advanced medical fields.

Social Contributions

Sysmex also participates in the Kobe Medical Industry

Sysmex is involved in healthcare, with its headquarters in Kobe but conducting operations and makingsocial contributions on a global scale.

Development Project, which is promoted by the city of Kobe.

Sysmex contributes to the advancement of medical care andAsano, a leading hematology expert, the laboratory aims to

supports activities related to science, culture and the environ-create new diagnostic technologies for effective cell therapy.

ment in a manner befitting a global healthcare company.

These funds were used to open the Sysmex Asano Laboratory
in January 2007. Under the direction of Professor Shigetaka

Sysmex officially registered as a member of the United

Since 1984, Sysmex has provided assistance for research

Nations Global Compact in February 2011, thereby demon-

into electronic measuring technology through the Nakatani

strating our increased emphasis on activities pertaining toFoundation for Advancement of Measuring Technologies incorporate social responsibility (CSR). The Global Compact

Biomedical Engineering. The foundation’s goal is to contribute

was first announced by then Secretary-General Kofi Anan into the development of Japan’s economy and society and toan address to The World Economic Forum in January 1999,

improve the quality of life (QOL) of the Japanese people. The

and was officially launched at UN Headquarters in New Yorklate Taro Nakatani, the Company’s founder and first president,

in July 2000. By joining the Global

established the Nakatani Foundation using funds contributed

Compact, business and non-businessby himself, Sysmex and others. So far, the foundation has

entities commit to upholding 10

provided support for 289 research projects.

principles in the areas of human

Sysmex provides funds to the Kobe University School of
Medicine for an endowed course in laboratory medicine.

rights, labor, the environment andanticorruption.

The purpose of the course is to contribute to the advanceSysmex Value

ment of diagnosis and medical care by developing evaluation

Greener Sysmex Initiative
Sysmex Group companies in the eight countries in the Asia Pacific region are working together on a variety of environmental preservation andcommunity contribution under the overarching theme of “Greener Sysmex.” In the past, Group companies have cooperated on charity events
aimed at protecting endangered species in Singapore, New Zealand and Thailand, as well as on afforestation activities in the Philippines. During
the fiscal year ended March 31, 2012, Group companies continued afforestation and greening activities in each region.
In April 2011, Sysmex (Thailand) took part in mangrove planting in Thailand’s Samut Sakhon Province, as did Sysmex (Malaysia) in thestate of Salangor in November. Other tree-planting included Sysmex Philippines’ efforts in Tarlac City in May 2011 and Sysmex Indonesia’s
activities in Karang Tengah in February 2012. Employees’ families participated proactively in these activities, helping to cultivate a stronger senseof togetherness.
“Brigada Eskwela” (clean up andrepair classroom) and tree planting.
The event took place in Tarlac City
(located at the center of Luzon,
104km north of Manila).

Nature conservation at
Kali Pesanggrahan, a river
located in Karang Tengah,
Lebak Bulus, South
Jakarta.

Sysmex Annual Report 201259

Sysmex Value

Sysmex is also a proactive participant in a variety of charitable initiatives. For example, employees in the United States
voluntarily take part in a fund-raising campaign organized byforward with its efforts to enhance corporate value throughcorporate contribution activities.
In December 2005, the Company established the Sysmex

the Leukemia & Lymphoma Society (LLS), a large-scale NPO.

Women’s Track & Field Team, welcoming Athens Olympic

Their efforts to attract donors through unique event- andGames gold medalist Mizuki Noguchi. The team supports the

web-based efforts have contributed substantially to the orga-

training of young athletes who aim to become world-classnization’s fund-raising efforts. In recognition of these efforts,

competitors. Sysmex was a special sponsor of First Kobe

our U.S. subsidiary was ranked for the fourth consecutive year

Marathon, which took place in November 2011, attracting

on the Companies That Care Award, which is sponsored byaround 20,000 entrants. In addition to providing the runners’

Companies That Care, a U.S. NPO. This annual award honors

bibs, we exhibited at a booth in the Kobe Marathon EXPO,

companies with the characteristics of a “company that cares,”which was held to coincide with the marathon. Sysmex

including social contributions and sustaining a good work

employees volunteered their time to support these activities

environment.

in a number of ways. A portion of the proceeds from thisSysmex as also selected as one of the 2012 Global 100’s
Most Sustainable Companies in the World, a ranking based

event were donated to assist victims of the Great East Japan
Earthquake and spur recovery in the affected region.

on joint research by Canadian publisher Corporate Knights,
Bloomberg and other organizations. The Global 100 are

Environmental Conservation

selected from among 3,500 companies around the world

Sysmex ranked 77th overall and sixth in the Health Care sector.

Our activities aim to fulfill social responsibilities,
becoming an “environmentally advanced company” inthe healthcare sector.

Encouraged by these results, Sysmex will continue moving

Sysmex considers its social responsibility toward environ-on the basis of corporate value characteristics including
environmental, social and corporate governance aspects.

Sysmex Value

mental conservation a management priority. In our efforts to

Kobe Marathon 201160

Sysmex Annual Report 2012

achieve harmony with the global environment, we work to

Investor Relations Activities

reduce the environmental impact of each stage of our operations—from product design, development, procurement andlifecycle: product design, production, sales, usage and end-of-

We strive to sustain growth and increase corporate
value. Our investor relations activities aim to proactively disclose information to enhance managementsoundness and transparency, communicate ourcorporate directions to shareholders and promote amanagement style that is both steady and innovative.

life disposal.

Sysmex recognizes investor relations as an important facet of

production to sales, support and product usage.
The Company reviewed its existing Environmental Policy
in May 2009 with the aim of prioritizing initiatives to reduce
its environmental impact in various phases of the productRamping up its environmental conservation activities evencorporate management and is active in its investor relations

further, in 2010 Sysmex established long-term environmental

efforts, in line with its investor relations policy. The investor

objectives to be achieved by fiscal 2020, under the themes ofrelations department is located within the corporate businessglobal warming countermeasures, effective use of resources

planning division, which reports directly to the president. The

and waste reduction, and effective use of water resources.

department is charged with disclosing appropriate information

Sysmex also has acquired certification under the inter-in a timely manner, communicating directly with shareholders

national ISO 14001 standard for environmental management

and other investors, and promptly providing feedback to man-systems at principal business sites. In addition, we areagement regarding the Company’s external assessment.

formulating a groupwide system to promote environmental
activities, including an annual environmental audit.
October 2008 marked the grand opening of Technopark, ourOne focus of the Company’s communications withshareholders and other investors is to explain a complex
business in a straightforward manner. In addition to briefing
analysts and institutional investors about operating results, theand the surrounding community. In addition to eco-friendly

investor relations department provides technical briefings onmaterials and an energy-saving design, the greenery, lakes andother natural spaces that make up more than half its surrounds
add to its harmony with neighboring areas. Such environmental

Position of Sysmex IR Activities

considerations have earned Technopark the highest level for

Externallythe environmental performance of buildings under a Japanese

A management strategy tool for reinforcing themanagement base by ensuring appropriate shareprice formation

standard named CASBEE, for the Comprehensive Assessment

Sysmex Value

new R&D facility that is designed to fit in with the environmentȉ5DLVHFRUSRUDWHYDOXH ZKLFKHTXDOVPDUNHW
capitalization)

System for Built Environment Efficiency.
In a bid to reduce emissions and use resources effectively,'HWHUPLQHFDSLWDOPDUNHWUHVSRQVHVDQGUHTXHVWV

we have launched zero-emissions initiatives at our factories.
We also promote emissions separation and recovery and otherrecycling efforts. For its new product in the hematology field,
the XN-Series, Sysmex has switched the packaging on some of
its reagents from conventional polyethylene to paper packaging, and introduced concentrated reagents. These moves'LVVHPLQDWHTXDOLW\
information in atimely manner

6ZLIWO\UHȾHFW
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IR activities

substantially reduce the changing frequency, thereby reducing
waste, making our products more environmentally considerate.
ȉ6XVWDLQDEOHJURZWKDQG
SURȽWDELOLW\LPSURYHPHQWVȉ$SSURSULDWHLQYHVWPHQW IRUIXWXUHJURZWKInternally
A management innovation tool that works byfeeding back external evaluations and requests

Sysmex Annual Report 201261

areas such as the life sciences and hosts tours to research andcompanies as Daiwa Investor Relations and Nikko IR), and the

manufacturing facilities. Overseas, the department holds inves-website was designated as an Excellent Corporate Website.

tor relations meetings, attends conferences held by securities

Sysmex’s annual report for the fiscal year ended March 31,

firms and seeks opportunities to foster an understanding of

2011, also earned awards in two of the world’s largest annual

the Company’s strengths by providing individual explanations

report competitions—a Gold in the Healthcare Technology

at industry exhibitions or tours of local factories. For individual

category of the International ARC Awards (held by MerComm,

investors and other shareholders, the department holds busi-Inc., of the United States) and a Silver in the Health Careness results briefings in Tokyo and Kobe, prepares shareholder(Equipment & Supplies) segment of the Vision Awards (spon-

reports, as well as extensive video content on its website, allsored by LACP of the United States).

with the aim of introducing the Company’s business in an easily
understandable way.
The Company earned the Japan Investor Relations

To raise the level of the Company’s investor relations
activities further, in addition to proactive external information
disclosure Sysmex will concentrate on responding to feedback

Association (JIRA)’s “Best IR Award” the second time in fiscal

to ensure the results of its investor relations activities are

2011, following an award for fiscal 2006. Sysmex receives

reflected in its capital policies and management.

high rankings from companies that conduct surveys (suchSysmex Value

Receiving the Best IR Award from JIRAInternational ARC Awards ceremony

Investor Relations Policy
1. IR Goals and Basic Policy
The basic policy of Sysmex in IR activities is to disclose corporate information on performance, financial position, forecasts of the future and management
strategies in a fair, prompt, accurate and easy-to-understand manner, to ensure accountability to shareholders and other investors and gain proper
understanding about management and business activities.

2. Basis of Information Disclosure
Sysmex discloses corporate information in accordance with applicable laws and regulations concerning securities trading and the Rules on Timely
Disclosure of Corporate Information by the Issuer of Listed Securities and the Like (“Timely Disclosure Rules”) established by the stock exchange. The
Company also seeks to disclose corporate information not required by the Timely Disclosure Rules fairly and promptly, to help shareholders and otherinvestors better understand the Company.

3. Methods of Information Disclosure
Sysmex releases corporate information required under the Timely Disclosure Rules via TD-net, operated by the Tokyo Stock Exchange. The Company
posts information through TD-net on its website as promptly as possible. The Company also provides corporate information not subject to the Timely
Disclosure Rules on its website.

4. IR Quiet Period
Sysmex observes a quiet period from the day after the closing date of each quarter until the release of earnings statements. During this period, theCompany will refrain from replying to questions or commenting on earnings projections. However, in the event that results are expected to deviatesignificantly from the projections during the quiet period, the Company will release appropriate information.

62

Sysmex Annual Report 2012

Financial PerformanceContents
11-Year Consolidated Financial Data . . . . . . . . . . . . . . . . . . . . . . 64
Management’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . 66
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . 74
Consolidated Statements of Comprehensive Income . . . . . . . 74
Consolidated Statements of Changes in Equity . . . . . . . . . . . . 75
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . 76
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . 77
Independent Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Sysmex Annual Report 201263

11-Year Consolidated Financial Data

For the years ended March 31,

2002

2003

2004

2005

¥ 47,532¥ 57,253¥ 65,970¥ 76,935

Operating income

3,417

5,299

6,615

9,104

Net income

1,308

3,125

3,157

5,731

Net increase (decrease) in cash and cash equivalents

1,842

1,071

3,465

(3,261)

Cash and cash equivalents, end of year

9,181

10,253

13,71810,458

Capital expenditure

2,455

2,317

2,451

2,729

Depreciation

2,810

3,107

3,203

3,296

R&D expenditure

4,130

4,969

5,549

6,509

Net cash provided by (used in) operating activities

4,234

5,603

9,302

6,692

Net cash provided by (used in) investing activities(2,112)(2,260)(3,212)(5,631)

Net cash provided by (used in) financing activities(568)(2,034)(2,428)(4,377)

Total assets

66,502

66,44971,983

77,660Shareholders’ equity

35,57743,32551,09656,149Interest-bearing liabilities

11,606

10,893

4,175

657

Shareholders’ equity (yen)¥ 1,701.5¥ 1,879.5¥ 2,042.7¥ 2,244.9

Net income (basic) (yen)

62.6

132.2

132.9

225.1

Net income (diluted) (yen)

58.4

121.8

123.1

224.0

Cash dividends applicable to the year (yen)

22.0

25.0

30.0

40.0

Dividend ratio (%)

35.2

18.9

22.6

17.8

Shareholders’ equity ratio (%)

53.5

65.2

71.0

72.3

Return on equity (ROE) (%)

3.8

7.9

6.7

10.7

Return on assets (ROA) (%)

2.1

4.7

4.6

7.7

Price-earnings ratio (PER) (times)

35.6

15.9

20.3

27.2

Price-book value ratio (PBR) (times)

1.3

1.1

1.3

2.7

2,530

2,639

2,907

3,115

For the year:
Net sales

At year-end:

Per share data:*Two-for-one stock split

Other data:

Number of employees
Note: Including part-time employees

Notes:
1. U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ¥82 = U.S. $1, the approximate rate of exchange on March 31, 2012.
2. Per share data: Certain retroactive adjustments of previously reported per share information have been made to conform with the current method from the year ended
March 31, 2003.
3. ROA = Net Income/Total Assets (Yearly Average)×100

64

Sysmex Annual Report 2012

(Millions of yen)(Thousands of
U.S. dollars)

2006

2007

2008

2009

2010

2011

2012

2012

¥ 87,888¥ 101,041¥ 110,724¥ 111,843¥ 116,206¥ 124,694¥ 134,744$ 1,643,220

10,724

12,71515,033

15,134

15,74018,28919,206234,220

7,423

9,008

9,132

8,014

9,765

11,412

12,007

146,427

(499)

3,299

(3,044)

(269)

4,403

5,103

2,922

35,634

9,416

12,715

9,679

9,410

13,813

18,916

21,838266,317

5,638

4,546

8,244

9,340

4,540

5,840

7,909

964,390

3,592

3,959

3,924

7,189

7,067

6,871

7,031

85,744

8,184

9,026

9,221

10,771

11,23812,38011,904145,171

8,275

10,085

11,635

13,194

21,23018,135

17,059208,036(7,859)(6,630)(12,883)(13,545)(6,603)(8,916)(10,372)(126,488)(1,191)(458)(1,316)723(10,091)(3,475)(3,814)(46,512)87,447

101,225

109,027

118,522

120,702130,060

142,285

1,735,183

62,647

71,34478,75379,18386,35893,534

101,834

1,241,878

695

669

1,081

10,344

2,565

1,971

1,026

12,512(Yen)(U.S. dollars)¥ 1,251.8*¥ 1,411.0¥ 1,541.0¥ 1,548.2¥ 1,684.9¥ 910.7*¥ 990.5$ 12.08

145.5*

179.6

178.9

156.7

190.8

111.2*

116.9

1.43

143.8*

178.0

178.3

156.5

190.5

111.0*

116.6

1.42

36.0*

36.0

48.0

50.0

56.0

60.0

34.0*

0.41

17.9

20.0

26.8

31.9

29.4

27.0

29.1

71.6

70.5

72.2

66.8

71.5

71.9

71.6

12.5

13.4

12.2

10.1

11.8

12.7

12.3

9.0

9.5

8.7

7.0

8.2

9.1

8.8

35.3

23.8

20.1

20.0

28.7

26.5

28.6

4.1

3.0

2.3

2.0

3.3

3.2

3.4

3,334

3,580

3,916

4,148

4,587

4,960

5,324

Sysmex Annual Report 201265

Management’s Discussion and Analysis

Financial Policy

rating from Rating & Investment Information, Inc. (R&I),

Sysmex regards increasing its market capitalization to maxi-

and reviews and renews this rating each year. Having amize corporate value as an important management objective

high rating reduces the cost of raising funds in the capitaland pays careful attention to stable cash flow generation. We

markets and helps build trust among our shareholders andconsider it important to share this goal with all stakeholders,with the world at large. To enhance its rating in upcoming

including shareholders, customers, business partners, local

years, Sysmex will construct a flexible and more robust

communities and employees, while sustaining medium- tofinancial base, paying attention to expanding business scale

long-term growth. To that end, Sysmex has in place measureswhile considering the balance between sales and income,to communicate with stakeholders on the Company’s current

and assets, liabilities and equity. Specifically, the Company

situation and the direction it should pursue. These measures

regards net sales, operating income, operating margin,

include enhancing timely disclosure, the website, businessreturn on equity (ROE) and free cash flow (FCF) as impor-

reports, financial data, periodic briefings on business results,

tant management indicators and aims to maintain a balance

visits to institutional investors and briefings for individual

between scale and efficiency by ensuring the optimal

investors.

combination of sales and income and of assets, liabilities

Sustaining medium- to long-term growth requires a leveland equity.

of R&D expenditure sufficient to prevail in global competition. We must consistently create new technologies andOverview

products and stimulate the growth of our critical mass toDuring the fiscal year ended March 31, 2012, although theabsorb increases in selling, general and administrative (SG&A)

Japanese economy showed signs of recovering from difficult

expenses. In recent years, our sales growth in overseas

conditions following the Great East Japan Earthquake, risingmarkets has been striking and succeeded in sustaining steady

raw materials prices and historically high rates of ongoinggrowth. Sysmex is aggressively making forward-looking

yen appreciation shrouded the future in uncertainty. In

investments not only in the hematology segment, the current

Europe and the United States, the economic outlook is lesskey business domain, but also in non-hematology segments

than positive, owing to such factors as the extended financial

such as hemostasis, immunochemistry, urinalysis and clinicalcrisis in Europe, unrest in the Middle East and Africa andchemistry and in new forms of medical testing in the life sci-rising gasoline prices—causing customer confidence to fall. In

ence field.

emerging markets, meanwhile, overall economic expansion

Sysmex pays attention not only to business scale, but

remains firm, despite uncertainties stemming from signs ofalso to asset and capital efficiency and liability and capital

gradual deceleration in China’s economic growth and risingsoundness. The Company holds an A (single A flat) issuer

consumer prices.

Sysmex website

66

Sysmex Annual Report 2012

Shareholder newsletter

Financial data (English/Japanese)posted in the “IR Library” on the Sysmex
websiteOn the healthcare front, earnings and profits at medical

unchanged from the preceding fiscal year. Meanwhile, return

institutions in Japan are beginning to improve, prompted byon equity (ROE) dipped to 12.3% during the year under review,the restructuring of public hospitals and revisions in medical

from 12.7% in the preceding term.

remuneration. In advanced countries in Europe and North
America, efforts are underway to reduce healthcare costs

Net Sales by Destination*and reform medical systems. In the United States, dispute

Looking at net sales by destination, in Japan management

continues about a medical reform bill that aims to reduce

improvements accompanying healthcare reforms resulted in

the number of people without medical insurance. In China,

steady capital investment by large-scale medical institutions.

medical system reform that is underway, including to theThis situation and our ongoing efforts to promote solutions

medical insurance system, aims to build infrastructures that

led to solid sales, as well as strong performance in terms ofprovide uniform medical services in cities and farming villages

receiving major orders. As a result, centering on firm results

throughout the country.

in our mainstay hematology field, we posted sales in Japan of

In its mainstay hematology field, the Sysmex Grouplaunched the new flagship XN-Series of multiparameter¥39,735 million, up 3.1% from the previous fiscal year.
In overseas markets, we made steady progress in theautomated hematology analyzers. The series is designed forstrengthening of sales and support structures and the provi-sale across all regions, and sales will commence by country,

sion of solutions. As a result, sales moved steadily upward on

as approved. We added a new factory wing to the Ono

a local currency basis due to increased sales of instruments

Factory (Ono, Hyogo Prefecture) of our reagent production

and diagnostic reagents. Consequently, despite major yen

facility, Sysmex International Reagents Co., Ltd., in prepara-

appreciation the Group’s overseas sales were ¥95,009 million,

tion for anticipated increases in demand in the Japaneseup 10.3% year on year. The overseas sales ratio was 70.5%, up

market, as well as to manufacture the concentrated reagents

1.4 percentage points from the previous fiscal year.

used in the XN-Series. In March 2012, the reagent factory

Looking at overseas sales by destination, sales in thecommenced production at approximately 1.5 times its previ-

Americas amounted to ¥28,607 million, up ¥2,072 million, or

ous level.

7.8% year on year; in Europe ¥37,370 million, up ¥1,956 million,

As a result, during the year under review net sales
expanded ¥10,050 million, or 8.1%, to ¥134,744 million; operat-

or 5.5%; in China ¥19,299 million, up ¥4,206 million, or 27.9%;
and in Asia-Pacific ¥9,733 million, up ¥622 million, or 6.8%.

ing income rose ¥917 million, or 5.0%, to ¥19,206 million; andnet income increased ¥595 million, or 5.2%, to ¥12,007 million.
The equity ratio slipped from 71.9% as of March 31, 2011, to71.6% on March 31, 2012. Total asset turnover was 0.99 time,* 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.

Net Sales by Destination
Rating Institution

RatingRating & Investment
Information Inc. (R&I)

A

Japan
Overseas
Americas
EuropeChina
Asia Paciﬁc

7.2%
14.3%
4.3%

Rating Information

OVERSEAS

Net salesJAPAN(As of May 31, 2012)
Rating symbols and definitions:Rating A; The credit quality is high. It is also
accompanied by some excellent factors.

70.5%¥134,744

29.5%¥95,009 million¥39,735 million

million

27.8%
8%
21.2%

Sysmex Annual Report 201267

Management’s Discussion and Analysis

Net Sales by Geographical Region

AmericasJapan

In the United States, sales grew as a result of our focus on

Sales remained robust in the hematology testing field, ourdeveloping direct sales and support networks, as well as our

main business domain, as our perseverance in presenting

success in promoting solutions that meet customer needs,

solutions to customers paid off in the form of an increase inwhich generated strong sales to integrated healthcare net-large orders. These factors contributed to a 4.7% rise in sales

works (IHNs) and the U.S. Veterans Integrated Service Network

compared with the corresponding period of the preceding(VISN). Meanwhile, sales were favorable in Central and Southfiscal year, to ¥43,690 million.

America, centering on bids won in Brazil and Mexico. Despite
the negative effects of yen appreciation, sales in the Americas

Despite the negative effects on income of yen apprecia-rose 5.4%, to ¥26,855 million.

tion, we posted segment profit of ¥8,683 million, up 27.4% year
on year. This rise was the result of robust domestic sales andIn addition to yen appreciation, cost of sales rose as the

an increase in gross profits owing to the expansion of export

result of a revision in intragroup transaction prices, and selling,sales to Group companies, including the impact of a revision in

general and administrative expenses increased, stemming

intragroup transaction prices.

from efforts to reinforce our sales and support operations.
Consequently, segment profit fell 11.6%, to ¥2,872 million.

Net Sales by Geographical Region
Japan
Americas
EuropeChina
Asia Pacific

Sales and Segment Proﬁt
by Geographical Region

Sales and Segment Proﬁt
by Geographical Region

Japan

AmericasInterarea transfer: exports to subsidiaries
Sales to customers: including South Korea and
IDEXX Laboratories Inc. (United States)
Segment proﬁt(¥ million)
100,000

5.9%

15,000Net sales
Segment proﬁt(¥ million)
30,0005,000
26,85525,47682,78414.3%

80,00066,880 69,090

32.4%
32

66,48360,000Net Sales

7,870
29,327 31,501 27,857¥134,744 million

12,00075,73039,094
8,683
34,01023,36824,00020,845

3,248

9,000

18,000

6,000

12,000

3,000

6,000

2,872

3,000

2,775

38,626 41,720
43,690
2,963

2,000

1,789

4,672

20,000 37,533 37,589

4,000

6,816

40,00027.5
7.5%

23,444

991

1,000

19.9%
0

2008 20092010

2011* 2012*00(Years ended March 31)

Sales and Segment Proﬁt
by Geographical Region

Europe(¥ million)
40,000 39,175

37,03235,387 36,446 35,296

10,000China

16,00024,000

6,000
5,379

12,000

5,304

2012*

0

19,2995,000

Asia Paciﬁc

Net sales
Segment proﬁt(¥ million)
9,000

1500
7,868

8,000

5,135

2011

Sales and Segment Proﬁt
by Geographical Region
Net sales
Segment proﬁt(¥ million)
20,00032,000

4,621

2010

(Years ended March 31)

Sales and Segment Proﬁt
by Geographical Region
Net sales
Segment proﬁt2008 2009

15,093
11,843
2,752
10,111

4,552

16,000

4,000

8,000

8,000

2,000

4,000

2,411

7,109

4,000

7,200

3,000

5,400 5,024

5,847
900

900
746

2,370

8,127

5,388

1200

647

2,000

3,600

1,000

1,800

600

547

1,309
330

0

2008 2009

2010

2011

2012

(Years ended March 31)* Changes in intragroup transaction prices

68

Sysmex Annual Report 2012

0

0

824

2008 20092010

2011* 2012*(Years ended March 31)

0

0

300

2008 20092010(Years ended March 31)

2011* 2012*0Europe

Profits and Losses

In addition to enhancing our direct sales and support activities,

Net Sales

we continued in our efforts to propose solutions, resulting

In Japan, our ongoing efforts to promote solutions led strongin robust sales centered on the hematology field. As a result,

performance in terms of receiving major orders. As a result,sales in Europe were up 4.9% year on year, to ¥37,032 million.

sales were robust, centering on firm results in our mainstay

The effects of higher sales compensated for an increase inhematology field

selling, general and administrative expenses to enhance our

In overseas markets, meanwhile, we made steady progresssales and support structure, prompting segment profit to risein the strengthening of sales and support structures and the

18.2%, to ¥5,379 million.

provision of solutions. Consequently, sales moved steadily
upward on a local currency basis due to increased sales of

China

instruments and diagnostic reagents.

In China, sales surged 27.9%, to ¥19,299 million. Behind these

Owing to these factors, during the year ended March 31,

solid results were substantially higher sales of instruments

2012, net sales increased ¥10,050 million, or 8.1%, to ¥134,744

and diagnostic reagents in the hematology, hemostasis andmillion. Yen appreciation continued throughout the fiscal year,

urinalysis fields, as well as increased sales of instruments in thewith the average exchange rate against the U.S. dollar risingclinical chemistry field.

¥6.65, from ¥85.72 to ¥79.07. This shift had a ¥2,207 million

Segment profit fell 1.7%, to ¥2,370 million, owing to suchnegative impact on sales. Likewise, the yen appreciated ¥4.15

factors as higher cost of sales resulting from a revision in

against the euro, with the average for the year moving fromintragroup transaction prices.

¥113.11 against the euro to ¥108.96. Yen appreciation against
the euro had a ¥1,292 million negative effect on sales. The

Asia Pacificoverall appreciation of the yen against other currencies had aSales were up sharply in India, centering on the hematology

negative impact on sales of ¥4,459 million.

field, and sales were firm in Indonesia and Australia. For theregion, sales were up 10.7% year on year, to ¥7,868 million.

Cost of Sales and SG&A Expenses

Owing to the higher cost of sales resulting from a revision

Cost of sales increased ¥5,263 million, or 11.3%, to ¥51,652

in intragroup transaction prices and an increase in selling,million, and the cost of sales ratio rose 1.1 percentage points,

general and administrative expenses to enhance our sales andto 38.3%.

support structure, segment profit fell 55.8%, to ¥330 million.

SG&A expenses rose ¥3,870 million, or 6.4%, to ¥63,886
million, stemming from the Company’s efforts to reinforce its
sales and support structures. The ratio of SG&A expenses to net
sales edged down 0.7 percentage point, from 48.1% to 47.4%.

Net Sales

SG&A Expenses
SG&A Ratio(¥ million)
150,000(¥ million / %)75,000R&D Expenditure
R&D Expenditure as a Percentage of Net Sales
SG&A expenses
SG&A ratio
100(¥ million / %)12,50080

10,000134,744

120,000

116,206

63,886124,694

60,000110,724 111,843

55,871

57,98660,016

12

9,221

50,29490,000R&D expenditure
R&D expenditure as a percentage of net sales
12,38011,904 15
11,238
10,7719.6

60

45,000

9.7

9.9

8.8

9

7,500
8.3

60,00030,00030,00015,00002008 20092010(Years ended March 31)

2011

2012

0

45.4

50.0

2008 2009

49.9

2010

(Years ended March 31)

48.1

2011

47.4

2012

40

5,000

6

20

2,500

3

0

0

2008 2009

2010

2011

2012

0

(Years ended March 31)

Sysmex Annual Report 201269

Management’s Discussion and Analysis

Incomedividend. The year-end dividend is decided upon approval of

Bolstered by higher sales, operating income increased ¥917

the annual shareholders’ meeting, and the interim dividend

million, or 5.0%, to ¥19,206 million, and the operating margin

upon approval by the Board of Directors.

was 14.3%, down 0.4 percentage point. The foreign exchange

In accordance with this policy and in light of businesssituation, meanwhile, had a ¥3,133 million negative impact on

performance during the year under review, we announced

operating income, compared with the preceding fiscal year.

dividends for the year of ¥34 per share, which includes an

Net income expanded ¥595 million, or 5.2%, to ¥12,007

interim dividend of ¥15. As a result, the consolidated payout
ratio was 29.1%.

million. In the preceding fiscal year, the Company posted a¥188 million loss on adjustment for changes of accounting

Going forward, Sysmex will continue to effectively invest

standard for asset retirement obligations. Although this loss

its internal reserves in the implementation of highly competi-

was absent during the year under review, total income taxes

tive product development and global business strategies,

increased ¥617 million, or 9.8%, to ¥6,929 million.

aiming to respond to anticipated changes in the businessenvironment. We will retain this commitment to continue
meeting our shareholders’ expectations.

R&D Expenditure
To enhance its product portfolio, during the year Sysmex
developed new products and aggressively pursued R&D cen-Liquidity and Sources of Capitaltering on the life sciences, a field targeted for future growth.

Fund Procurement and Liquidity Management

However, R&D expenditure fell ¥476 million, or 3.8%, to

The Company raises working capital as necessary through¥11,904 million. R&D expenditure as a percentage of net sales

short-term bank loans and other means. Consolidated

decreased 1.1 percentage points, from 9.9% to 8.8%.

subsidiaries obtain bank loans as needed to secure working
capital, but in October 2003, the Company introduced a cash

Dividend Policy

management system to increase efficiency by unifying financ-

We aim to maintain a proper balance between internal

ing and capital management at affiliates in Japan.
The Company currently holds an A (single A flat) issuer

reserves for R&D and capital expenditure, which are designed
to sustain steady high growth, and returns to our sharehold-rating from Rating & Investment Information, Inc. (R&I)

ers as our earning power increases. In terms of returns toand reviews and renews this rating each year. Having ashareholders, we intend to provide a stable dividend on ahigh rating reduces the cost of raising funds in the capital

continuous basis and aim for a consolidated payout ratio of

markets and helps build trust among our stakeholders

20% under our basic policy of sharing the successes of ourand with the world at large. To enhance its rating in theoperations in line with business performance.

upcoming years, Sysmex will pay close attention to thebalance between sales and profits and assets, liabilities andAs a basic policy, Sysmex pays twice-yearly dividends

shareholders’ equity.

on retained earnings, an interim dividend and a year-end
Net Income

Operating Income
Operating Margin
Operating income
Operating margin(¥ million / %)20,00019,206 25

Cash Dividends Applicable to the Year
Dividend Ratio(¥ million)
12,50011,412

18,28916,00015,74012,007

9,765

Cash dividends applicable to the year
Dividend ratio(¥ / %)
60
60
56
48*

50

50

20

10,000

15
14.3

7,500

8,000

10

5,000

24

20

4,000

5

2,500

12

10

0

0

15,033 15,134

48

9,132
8,014

14.7

12,000
13.6

0

13.5

2008 2009

13.5

2010

(Years ended March 31)

2011

2012

40
31.9

36

29.4

26.8

2008 20092010(Years ended March 31)

2011

2012

0

2008 2009

34**
27.0

2010

2011

30

29.1

2012

0

(Years ended March 31)* Including special dividends of ¥8 commemorating
the 40th anniversary of the Company’s founding.
** Two-for-one stock split conducted on April 1, 2011.

70

Sysmex Annual Report 2012

For long-term capital requirements such as capital invest-¥1,204 million more than during the preceding year, andment, the Company decides the funding method after taking

depreciation and amortization provided ¥8,022 million, ¥474

into account the investment recovery period and risk. During

million more than in the preceding year. However, uses ofthe year, the Company financed capital expenditure and R&D

cash included a ¥4,755 million increase in notes and accounts

activities primarily from cash provided by operating activities.

receivable, ¥2,286 million more than in the preceding year,
and income taxes paid used ¥6,702 million, up ¥950 million.

Assets, Liabilities and Equity
As of March 31, 2012, total assets amounted to ¥142,285

Cash Flows from Investing Activities

million, up ¥12,225 million from the end of the previous fiscal

Net cash used in investing activities was ¥10,372 million,

year. Major factors included a ¥2,922 million increase in cash

¥1,456 million more than in the preceding fiscal year. The mainand cash equivalents, a rise of ¥4,167 million in trade notes anduse of cash was purchases of property, plant and equipment,

accounts receivable, a ¥2,032 million increase in inventories

which used ¥6,732 million, ¥959 million more than in theand a ¥2,620 million expansion in buildings and structures.

previous year. In addition, purchase of business used ¥1,901
million.

Meanwhile, total liabilities were up ¥3,955 million, to¥39,782 million. The main reasons for this rise were increasesof ¥871 million in trade accounts payable and a ¥1,724 million

Cash Flows from Financing Activities

expansion in construction and other.

Net cash used in financing activities amounted to ¥3,814

Total equity came to ¥102,503 million at the end of themillion, ¥339 million more than was used in these activities inyear, up ¥8,270 million. The principal reason for this rise was

the previous year. Major uses of cash included dividends paida ¥8,823 million increase in retained earnings. The equity ratioof ¥3,184 million, ¥157 million more than in the previous year;

as of March 31, 2012, was 71.6%, down 0.3 percentage point¥577 million in payments of lease obligations, a ¥454 million

from the 71. 9% recorded at the end of the previous fiscal year.

decrease; and a net decrease in short-term bank loans of ¥283
million, compared with an increase of ¥284 million in the

Cash Flows

previous year.

As of March 31, 2012, cash and cash equivalents amounted to¥21,838 million, up ¥2,922 million from March 31, 2011. Cash

Capital Expenditure and Depreciation

flows from various activities are described in more detail below.

Capital expenditure (investment in property, plant andequipment, including construction in progress) was up ¥2,069

Cash Flows from Operating Activities

million year on year, or 35.4%, to ¥7,909 million. The principal

Net cash provided by operating activities was ¥17,059 million,

reason for this rise was the acquisition of instruments to lend

down ¥1,076 million. As principal factors, income before

to customers. Depreciation and amortization increased ¥160

income taxes and minority interests provided ¥18,959 million,

million, or 2.3%, to ¥7,031 million.

Total Assets
ROA*

Capital Expenditure
Depreciation

Total Equity
Equity Ratio
Total assets
ROA(¥ million / %)150,000

142,285 20

Total equity
Equity ratio(¥ million / %)105,000

118,522 120,702

84,00060,000

12
9.1

8.7
8.2

80

8,000

66.8

71.5

10,000

9,340
8,244

79,117 79,851
72.2

90,00010,00087,136

16

109,027

102,503 100
94,233130,060

120,000

Capital expenditure
Depreciation(¥ million)

71.9

7,909
7,189 7,034

71.6

60

63,000

6,871

5,840

6,000

8,000

7,031

6,000

4,540
8.8

8

42,000

40

4,000

4

21,00020

2,0002012 0

0

0

0

3,924

4,000

7.0

30,00002008 2009

2010

2011

(March 31)

2008 2009(March 31)

2010

2011

2012

2,000

2008 2009

2010

2011

2012

0

(March 31)* Net Income/Total Assets (Yearly Average)×100

Sysmex Annual Report 201271

Consolidated Financial Statements
Consolidated Balance Sheets
Sysmex Corporation and Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
March 31, 2012ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 12)
Short-term investments (Note 3)
Receivables (Note 12):Trade notes
Trade accounts
Associated company
Other
Allowance for doubtful accounts
Investments in lease (Notes 11 and 12)
Inventories (Note 4)
Deferred tax assets (Note 10)Prepaid expenses and other current assets
Total current assets
PROPERTY, PLANT AND EQUIPMENT:Land
Buildings and structures
Machinery and equipment
Furniture and fixtures
Lease assets
Construction in progress
Total
Accumulated depreciation
Net property, plant and equipment
INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 3 and 12)
Investment in associated company
Goodwill (Note 5)
SoftwareDeposits
Investment in real estate
Deferred tax assets (Note 10)
Other assets
Total investments and other assets
TOTAL
See notes to consolidated financial statements.

72

Sysmex Annual Report 2012

2012

2011

2012

¥ 21,838
269¥ 18,916
213$ 266,317
3,280

3,383
32,674
164
221
(351)
2,577
21,8435,130
2,412
90,1602,896
28,994
176
292
(371)
1,763
19,811
4,925
2,317
79,932

41,256398,463
2,000
2,695(4,280)31,427
266,378
62,561
29,415
1,099,512

8,894
28,5187,330
27,8284,442
1,125
78,137(38,297)
39,8407,893
25,898
6,828
25,3185,451
144
71,532(35,300)
36,232

108,463347,780
89,390339,366
54,171
13,720952,890(467,036)
485,854

3,183
76
2,194
4,447
959

2,965
137
1,830
4,585
956
2,106
116
1,201
13,896¥ 130,060

38,817927
26,75654,232
11,69588
1,338
12,285¥ 142,285

1,073
16,317
149,817$ 1,735,183

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
March 31, 2012

LIABILITIES AND EQUITYCURRENT LIABILITIES:Current portion of long-term debt (Note 6)
Current portion of long-term lease obligations (Note 12)
Payables (Note 12):Trade notes
Trade accounts
Associated company
Construction and other
Income taxes payable (Note 12)
Accrued expenses
Deferred tax liabilities (Note 10)
Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:Long-term debt (Note 6)Long-term lease obligations (Note 12)
Liability for retirement benefits (Note 7)
Guarantee deposits received
Deferred tax liabilities (Note 10)
Other long-term liabilities
Total long-term liabilities

2012

¥

5
252

2011

¥

5
594

2012

$

61
3,073

2,023
9,978
165
4,490
2,776
8,289
1
6,749
34,728

2,149
9,107
297
2,766
2,729
7,642
0
5,704
30,993

24,671
121,683
2,012
54,75633,854
101,08512
82,305423,512

5
257
1,424
536
1,760
1,072
5,054

11
551
912
1,028
1,454
878
4,834

61
3,134
17,366
6,537
21,463
13,073
61,634

9,187
14,127546
83,485(256)

9,042
13,981
600
74,662(252)

112,037
172,280
6,659
1,018,110(3,122)427(0)(5,136)102,380
123
102,503¥ 142,285

186(14)(4,071)
94,13499
94,233¥ 130,060

5,207
(0)
(62,634)
1,248,537
1,500
1,250,037$ 1,735,183

COMMITMENTS AND CONTINGENT LIABILITIES (Notes 11 and 13)
EQUITY (Notes 8, 9, 15 and 16):
Common stock, authorized, 299,344,000 shares; issued,
103,027,016 shares in 2012 and 51,461,808 shares in 2011
Capital surplus
Stock acquisition rights
Retained earnings
Treasury stock - at cost: 217,764 shares in 2012 and 108,308 shares in 2011
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities
Deferred loss on derivatives under hedge accounting
Foreign currency translation adjustments
Total
Minority interests
Total equity
TOTAL

Sysmex Annual Report 201273

Consolidated Financial Statements

Consolidated Statements of Income
Sysmex Corporation and Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
Years Ended March 31, 2012

NET SALESCOST OF SALES
Gross profit
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Operating income
OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense
Foreign exchange loss–net
Other–net
Other expenses–net
INCOME BEFORE INCOME TAXES AND MINORITY INTERESTSINCOME TAXES (Note 10):
Current
Deferred
Total income taxes
NET INCOME BEFORE MINORITY INTERESTSMINORITY INTERESTS IN NET INCOME
NET INCOME

2012¥ 134,744
51,652
83,092
63,886
19,2062011¥ 124,694
46,38978,30560,016
18,2892012$ 1,643,220
629,902
1,013,318
779,098234,220

196
(96)
(403)
56
(247)
18,959

181
(97)
(886)
268
(534)
17,7552,390(1,171)(4,915)683(3,013)
231,207

6,891
38
6,929
12,03023¥ 12,007

5,861
451
6,312
11,44331¥ 11,412

84,037463
84,500146,707280$ 146,427

Years Ended March 31, 2012

PER SHARE OF COMMON STOCK (Notes 2.w and 15):
Basic net income
Diluted net income
Cash dividends applicable to the year

Yen

¥116.85116.63
34.00

U.S. Dollars¥ 111.17
110.9660.00$ 1.431.42
0.41

See notes to consolidated financial statements.

Consolidated Statements of Comprehensive Income
Sysmex Corporation and Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
Years Ended March 31, 2012

NET INCOME BEFORE MINORITY INTERESTSOTHER COMPREHENSIVE INCOME (LOSS) (Note 14):
Unrealized gain (loss) on available-for-sale securities
Deferred gain (loss) on derivatives under hedge accounting
Foreign currency translation adjustments
Total other comprehensive loss
COMPREHENSIVE INCOME (Note 14)
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO (Note 14):
Owners of the parent
Minority interests
See notes to consolidated financial statements.

74

Sysmex Annual Report 20122012
¥ 12,0302011¥ 11,443

2012$ 146,707

241
14(1,064)(809)¥ 11,221(85)(0)(1,509)(1,594)¥ 9,849

2,939
171(12,976)(9,866)$ 136,841¥ 11,197
24¥ 9,81534$ 136,549
292

Consolidated Statements of Changes in Equity
Sysmex Corporation and Subsidiaries

Millions of Yen

Years Ended March 31, 2012

Number of
Shares ofCommonStock
Outstanding

BALANCE, APRIL 1, 2010
51,253,982
Net income
Cash dividends,¥59.00 per share
Purchase of treasury stock(8,810)
Disposal of treasury stock
228
Exercise of warrants
108,100
Net change in the year
BALANCE, MARCH 31, 2011 51,353,500
Net income
Cash dividends,¥47.00 per share
Purchase of treasury stock(1,356)
Disposal of treasury stock
208
Stock splits (Note 8)
51,353,500
Exercise of warrants
103,400
Net change in the year
BALANCE, MARCH 31, 2012 102,809,252

Stock
Acquisition
RightsCommonStockCapitalSurplus¥ 8,825¥ 13,764¥ 666

Retained
Earnings

TreasuryStock¥ 66,277
11,412¥ (205)

Accumulated Other Comprehensive Income
Deferred
Unrealized
Gain
Gain (Loss) (Loss) on
Foreign
on Available- Derivatives Currency
for-Sale under Hedge Translation
Securities Accounting Adjustments¥ 271¥ (14)¥ (2,560) ¥ 87,024
11,412(3,027)

217

0
217

9,042

13,981

(48)
1
(66)
600

74,662
12,007

(252)

(85)
186

(0)
(14)

(1,511)(4,071)(3,184)145¥ 9,187145¥ 14,127(54)¥ 546 ¥ 83,485¥ (256)

241
¥ 427

14
¥ (0)

(3,027)(48)1434(1,662)
94,13412,007

Minority
Interests

¥ 112

(13)
99

Total Equity¥ 87,136
11,412(3,027)(48)1434(1,675)
94,233
12,007(3,184)(4)
1(3,184)(4)
1

290(1,065)(864)¥ (5,136) ¥ 102,380

290
24
(840)
¥ 123 ¥ 102,503

(4)
0

1

Total

Thousands of U.S. Dollars (Note 1)

Year Ended March 31, 2012

BALANCE, MARCH 31, 2011
Net income
Cash dividends, $0.57 per share
Purchase of treasury stock
Disposal of treasury stock
Stock splits (Note 8)
Exercise of warrants
Net change in the year
BALANCE, MARCH 31, 2012

CommonStockCapitalSurplus$ 110,269 $ 170,500

Stock
Acquisition
RightsRetained
Earnings$ 7,318 $ 910,512
146,427(38,829)

12
1,768

TreasuryStock$ (3,073)

Accumulated Other Comprehensive Income
Deferred
Unrealized
Gain
Gain on(Loss) on
Foreign
Available- Derivatives Currency
for-Sale under Hedge Translation
Securities Accounting Adjustments$ 2,268(659)$ 6,659 $1,018,110

Minority
Interests

Total Equity(49)0$ (171) $ (49,646) $ 1,147,977
146,427(38,829)(49)
12$ 1,207 $ 1,149,184
146,427(38,829)(49)
12$(3,122)3,536
171 (12,988) (10,537)$ (0) $ (62,634) $ 1,248,537

3,536
293 (10,244)$ 1,500 $ 1,250,037

1,768$112,037 $ 172,280

Total

2,939
$5,207

See notes to consolidated financial statements.

Sysmex Annual Report 201275

Consolidated Financial Statements

Consolidated Statements of Cash Flows
Sysmex Corporation and Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
Years Ended March 31, 2012

OPERATING ACTIVITIES:
Income before income taxes and minority interests
Adjustments for:
Income taxes - paid
Depreciation and amortization
Loss on disposal of property, plant and equipment
Changes in assets and liabilities:
Increase in notes and accounts receivable
Increase in inventories
Increase in notes and accounts payable
Increase in liability for retirement benefits
Other–net
Net cash provided by operating activities

2011

2012

¥ 18,959¥ 17,755$231,207(6,702)
8,022
177(5,752)
7,548
97(81,732)
97,8292,159(4,755)(2,140)
596
526
2,376
17,059(2,469)(1,336)
1,365
121
806
18,135(57,988)(26,098)
7,268
6,415
28,976208,036(6,732)(1,707)(5,773)(2,018)(1,064)(82,098)(20,817)

INVESTING ACTIVITIES:
Purchases of property, plant and equipment
Purchases of software and other assets
Acquisitions, net of cash acquired
Purchase of business
Other–net
Net cash used in investing activities(1,901)(32)(10,372)(61)(8,916)(23,183)(390)(126,488)

FINANCING ACTIVITIES:(Decrease) increase in short-term bank loans - net
Repayments of long-term debt
Payments of lease obligations
Exercise of warrants
Dividends paid
Other–net
Net cash used in financing activities

(283)
(6)
(577)
240
(3,184)(4)(3,814)284(9)(1,031)371(3,027)(63)(3,475)(3,451)(73)(7,037)
2,927(38,829)(49)(46,512)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

49
2,922
18,916¥ 21,838

(641)
5,103
13,813¥ 18,916

598
35,634
230,683$ 266,317

ADDITIONAL CASH FLOW INFORMATION - Interest paid

¥ 50

¥ 91

$ 610

See notes to consolidated financial statements.

76

2012

Sysmex Annual Report 2012Notes to Consolidated Financial Statements
Sysmex Corporation and Subsidiaries

1. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL
STATEMENTS
The accompanying consolidated ﬁnancial statements have been prepared inaccordance with the provisions set forth in the Japanese Financial Instruments
and Exchange Act and its related accounting regulations, and in conformity withaccounting principles generally accepted in Japan (“Japanese GAAP”), which are
diﬀerent in certain respects as to application and disclosure requirements ofInternational Financial Reporting Standards.
In preparing these consolidated ﬁnancial statements, certain reclassiﬁcations and rearrangements have been made to the consolidated ﬁnancial
statements issued domestically in order to present them in a form which is morefamiliar to readers outside Japan. In addition, certain reclassiﬁcations have been
made in the 2011 consolidated ﬁnancial statements to conform to the classiﬁcations used in 2012.
The consolidated ﬁnancial statements are stated in Japanese yen, thecurrency of the country in which Sysmex Corporation (the “Company”) is
incorporated and operates. The translations of Japanese yen amounts into U.S.
dollar amounts are included solely for the convenience of readers outside Japanand have been made at the rate of ¥82 to $1, the approximate rate of exchange
at March 31, 2012. Such translations should not be construed as representations
that the Japanese yen amounts could be converted into U.S. dollars at that or
any other rate.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation—The consolidated ﬁnancial statements as of March 31, 2012
include the accounts of the Company and 45 (47 in 2011) subsidiaries (together,
the “Group”).
Under the control or inﬂuence concept, those companies in which theCompany, directly or indirectly, is able to exercise control over operations are
fully consolidated, and those companies over which the Group has the ability to
exercise signiﬁcant inﬂuence are accounted for by the equity method.
Investments in an associated company are accounted for by the equity method.
Goodwill represents the excess of the cost of an acquisition over the fairvalue of the net assets of the acquired subsidiary and associated company at thedate of acquisition, and is carried at cost less accumulated amortization, which is
calculated by the straight-line method over ﬁve years.
All signiﬁcant intercompany balances and transactions have been eliminatedin consolidation. All material unrealized proﬁt included in assets resulting fromtransactions within the Group is also eliminated.

b. Uniﬁcation of Accounting Policies Applied to Foreign Subsidiaries
for the Consolidated Financial Statements—In May 2006, the AccountingStandards Board of Japan (the “ASBJ”) issued ASBJ Practical Issues Task
Force (PITF) No. 18, “Practical Solution on Uniﬁcation of Accounting Policies
Applied to Foreign Subsidiaries for the Consolidated Financial Statements.”
PITF No. 18 prescribes: (1) the accounting policies and procedures applied to aparent company and its subsidiaries for similar transactions and events undersimilar circumstances should in principle be uniﬁed for the preparation of
the consolidated ﬁnancial statements, (2) ﬁnancial statements prepared byforeign subsidiaries in accordance with either International Financial ReportingStandards or the generally accepted accounting principles in the United Statesof America tentatively may be used for the consolidation process, (3) however,the following items should be adjusted in the consolidation process so that net
income is accounted for in accordance with Japanese GAAP, unless they are notmaterial: 1) amortization of goodwill; 2) scheduled amortization of actuarial gainor loss of pensions that has been directly recorded in the equity; 3) expensing
capitalized development costs of research and development (R&D); 4) cancellation of the fair value model accounting for property, plant, and equipment andinvestment properties and incorporation of the cost model accounting; and 5)
exclusion of minority interests from net income, if contained in net income.

c. Uniﬁcation of Accounting Policies Applied to Foreign AssociatedCompanies for the Equity Method—In March 2008, the ASBJ issued ASBJ
Statement No. 16, “Accounting Standard for Equity Method of Accounting forInvestments.” The new standard requires adjustments to be made to conformthe associate’s accounting policies for similar transactions and events undersimilar circumstances to those of the parent company when the associate’s
ﬁnancial statements are used in applying the equity method unless it is impracticable to determine adjustments. In addition, ﬁnancial statements prepared byforeign associated companies in accordance with either International Financial
Reporting Standards or the generally accepted accounting principles in the
United States of America tentatively may be used in applying the equity method
if the following items are adjusted so that net income is accounted for inaccordance with Japanese GAAP, unless they are not material: 1) amortization of
goodwill; 2) scheduled amortization of actuarial gain or loss of pensions that has
been directly recorded in the equity; 3) expensing capitalized development costsof R&D; 4) cancellation of the fair value model accounting for property, plant,
and equipment and investment properties and incorporation of the cost modelaccounting; and 5) exclusion of minority interests from net income, if containedin net income.
d. Business Combination—In October 2003, the Business Accounting Council
issued a Statement of Opinion, “Accounting for Business Combinations”, and in
December 2005, the ASBJ issued ASBJ Statement No. 7, “Accounting Standard
for Business Divestitures” and ASBJ Guidance No. 10, “Guidance for AccountingStandard for Business Combinations and Business Divestitures.”
The accounting standard for business combinations allows companies toapply the pooling of interests method of accounting only when certain speciﬁccriteria are met such that the business combination is essentially regarded as auniting-of-interests.
For business combinations that do not meet the uniting-of-interests criteria,
the business combination is considered to be an acquisition and the purchasemethod of accounting is required. This standard also prescribes the accounting
for combinations of entities under common control and for joint ventures.
In December 2008, the ASBJ issued a revised accounting standard forbusiness combinations, ASBJ Statement No. 21, “Accounting Standard forBusiness Combinations.” Major accounting changes under the revised accounting standard are as follows: (1) The revised standard requires accounting forbusiness combinations only by the purchase method. As a result, the pooling ofinterests method of accounting is no longer allowed. (2) The previous accounting standard required R&D costs to be charged to income as incurred. Under therevised standard, in-process R&D costs acquired in the business combination iscapitalized as an intangible asset. (3) The previous accounting standard provided
for a bargain purchase gain (negative goodwill) to be systematically amortizedover a period not exceeding 20 years. Under the revised standard, the acquirer
recognizes the bargain purchase gain in proﬁt or loss immediately on theacquisition date after reassessing and conﬁrming that all of the assets acquired
and all of the liabilities assumed have been identiﬁed after a review of theprocedures used in the purchase allocation. The revised standard was applicableto business combinations undertaken on or after April 1, 2011.
e. Cash Equivalents—Cash equivalents are short-term investments thatare readily convertible into cash and that are exposed to insigniﬁcant risk ofchanges in value. Cash equivalents include time deposits, commercial paper
and mutual funds investing in bonds, all of which mature or become due within
three months of the date of acquisition.
f. Marketable and Investment Securities—Marketable and investment securities are classiﬁed and accounted for, depending on management’s intent, as
follows: (1) trading securities, which are held for the purpose of earning capitalgains in the near term are reported at fair value, and the related unrealized gains
and losses are included in earnings; (2) held-to-maturity debt securities, forwhich there is the positive intent and ability to hold to maturity are reported atamortized cost; and (3) available-for-sale securities, which are not classiﬁed aseither of the aforementioned securities, are reported at fair value, with unrealized gains and losses, net of applicable taxes, reported in a separate componentof equity.
Non-marketable available-for-sale securities are stated at cost determinedby the moving-average method. For other than temporary declines in fair value,

Sysmex Annual Report 201277

Consolidated Financial Statements

investment securities are reduced to net realizable value by a charge to income.
g. Allowance for Doubtful Accounts—The allowance for doubtful accounts
is stated in amounts considered to be appropriate based on the Group’s pastcredit loss experience and an evaluation of potential losses in the receivables
outstanding.
h. Inventories—Inventories are stated at cost determined by the average cost
method or net selling value for the Company and its domestic subsidiaries, andat the lower of cost, determined by the ﬁrst-in, ﬁrst-out method, or market forforeign subsidiaries.
i. Property, Plant and Equipment—Property, plant and equipment are statedat cost. Depreciation is computed by the straight-line method over the estimated useful lives of the assets. The range of useful lives is from 31 to 50 years
for buildings and structures, from 5 to 11 years for machinery and equipment,
and from 2 to 15 years for furniture and ﬁxtures.
Equipment held for lease is depreciated by the straight-line method over therespective lease periods.
j. Long-lived Assets—The Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate the carrying amount ofan asset or asset group may not be recoverable. An impairment loss would berecognized if the carrying amount of an asset or asset group exceeds the sum of
the undiscounted future cash ﬂows expected to result from the continued use
and eventual disposition of the asset or asset group. The impairment loss would
be measured as the amount by which the carrying amount of the asset exceeds
its recoverable amount, which is the higher of the discounted cash ﬂows fromthe continued use and eventual disposition of the asset or the net selling priceat disposition.
k. Software—Software to be sold is amortized at the greater of either the
proportional amount to be amortized in proportion of the actual sales of thesoftware to be made during the current year to the estimated total sales overthe estimated salable years or the amount to be amortized using a straight-line
method over the estimated salable years. The estimated salable years are
principally three years.
Software for internal use is amortized by the straight-line method over theestimated usable years. The estimated usable years are principally ﬁve years.
l. Liability for Retirement Beneﬁts—The Company has a non-contributory
funded pension plan covering substantially all of its employees.
The liability for employees’ retirement beneﬁts is accounted for based on
projected beneﬁt obligations and plan assets at the balance sheet date.
Unfunded retirement beneﬁts for the Company’s directors are provided at
the estimated amount which would be required if such individuals retired at thebalance sheet date. However, the Company abolished its unfunded retirement
beneﬁt plan on June 24, 2005. No additional provisions have been recorded
for retirement beneﬁts to be paid to the Company’s directors since then. The
liability for directors’ retirement beneﬁts is the amount provided in proportion
to the term that present directors had been in place before June 24, 2005.
m. Asset Retirement Obligations—In March 2008, the ASBJ published, ASBJ
Statement No. 18, “Accounting Standard for Asset Retirement Obligations”, and
ASBJ Guidance No. 21, “Guidance on Accounting Standard for Asset Retirement
Obligations”. Under this accounting standard, an asset retirement obligation isdeﬁned as a legal obligation imposed either by law or contract that results fromthe acquisition, construction, development and normal operation of a tangible
ﬁxed asset and is associated with the retirement of such tangible ﬁxed asset.
The asset retirement obligation is recognized as the sum of the discounted cash
ﬂows required for the future asset retirement and is recorded in the period
in which the obligation is incurred if a reasonable estimate can be made. If
a reasonable estimate of the asset retirement obligation cannot be made in
the period the asset retirement obligation is incurred, the liability should berecognized when a reasonable estimate of asset retirement obligation can be
made. Upon initial recognition of a liability for an asset retirement obligation,
an asset retirement cost is capitalized by increasing the carrying amount of therelated ﬁxed asset by the amount of the liability. The asset retirement cost is
subsequently allocated to expense through depreciation over the remaining

78

Sysmex Annual Report 2012useful life of the asset. Over time, the liability is accreted to its present value
each period. Any subsequent revisions to the timing or the amount of theoriginal estimate of undiscounted cash ﬂows are reﬂected as an increase or adecrease in the carrying amount of the liability and the capitalized amount of
the related asset retirement cost.
n. Stock Option—The ASBJ Statement No. 8, “Accounting Standard for Stock
Options”, and related guidance are applicable to stock options granted on andafter May 1, 2006.
This standard requires companies to recognize compensation expense for
employee stock options based on the fair value at the date of grant and overthe vesting period as consideration for receiving goods or services. The standard
also requires companies to account for stock options granted to non-employees
based on the fair value of either the stock option or the goods or services
received. In the balance sheet, the stock option is presented as a stock acquisition right as a separate component of equity until exercised.
o. Research and Development—R&D costs are charged to income as incurred.
Such costs were ¥ 11,904 million ($145,171 thousand) and ¥12,380 million for theyears ended March 31, 2012 and 2011, respectively.
p. Leases—In March 2007, the ASBJ issued ASBJ Statement No. 13, “AccountingStandard for Lease Transactions,” which revised the previous accounting standard
for lease transactions issued in June 1993. The revised accounting standard forlease transactions was eﬀective for ﬁscal years beginning on or after April 1, 2008.
(1) Finance Leases as Lessee
Under the previous accounting standard, ﬁnance leases that were deemed
to transfer ownership of the leased property to the lessee were capitalized. However, other ﬁnance leases were permitted to be accounted for
as operating lease transactions if certain “as if capitalized” information
was disclosed in the note to the lessee’s ﬁnancial statements. The revised
accounting standard requires that all ﬁnance lease transactions be capitalized by recognizing lease assets and lease obligations in the balance sheet. In
addition, the revised accounting standard permits leases which existed at thetransition date and do not transfer ownership of the leased property to thelessee to continue to be accounted for as operating lease transactions.
(2) Finance Leases as Lessor
Under the previous accounting standard, ﬁnance leases that were deemed totransfer ownership of the leased property to the lessee were treated as sales.
However, other ﬁnance leases were permitted to be accounted for as operating lease transactions if certain “as if sold” information was disclosed in thenote to the lessor’s ﬁnancial statements. The revised accounting standard
requires that all ﬁnance leases that are deemed to transfer ownership of theleased property to the lessee should be recognized as lease receivables, andall ﬁnance leases that are not deemed to transfer ownership of the leased
property to the lessee are recognized as investments in lease.
q. Bonuses to Directors—Bonuses to directors are accrued at the year-end towhich such bonuses are attributable.
r. Construction Contracts—In December 2007, the ASBJ issued ASBJ
Statement No. 15, “Accounting Standard for Construction Contracts” andASBJ Guidance No. 18, “Guidance on Accounting Standard for Construction
Contracts.” Under this new accounting standard, the construction revenue
and construction costs should be recognized by the percentage-of-completion
method, if the outcome of a construction contract can be estimated reliably.
When total construction revenue, total construction costs and the stage ofcompletion of the contract at the balance sheet date can be reliably measured,
the outcome of a construction contract can be estimated reliably. If the outcomeof a construction contract cannot be reliably estimated, the completed-contract
method should be applied. When it is probable that the total construction costs
will exceed total construction revenue, an estimated loss on the contract shouldbe immediately recognized by providing for a loss on construction contracts.
s. Income Taxes—The provision for income taxes is computed based on thepretax income included in the consolidated statements of income. The asset andliability approach is used to recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary diﬀerences between the carrying

amounts and the tax bases of assets and liabilities. Deferred taxes are measured
by applying currently enacted tax laws to the temporary diﬀerences.
t. Foreign Currency Transactions—All short-term and long-term monetary
receivables and payables denominated in foreign currencies are translated
into Japanese yen at the exchange rates at the balance sheet date. The foreignexchange gains and losses from translation are recognized in the consolidated
statements of income to the extent that they are not hedged by forward
exchange contracts.
u. Foreign Currency Financial Statements—The balance sheet accounts offoreign subsidiaries are translated into Japanese yen at the current exchange rate
as of the balance sheet date except for equity, which is translated at the historicalrate. Diﬀerences arising from such translation are shown as “Foreign currencytranslation adjustments” under accumulated other comprehensive income in a
separate component of equity.
Revenue and expense accounts of foreign subsidiaries are translated into yen
at the average exchange rate.
v. Derivatives and Hedging Activities—The Group uses foreign exchange
forward contracts and interest rate swaps to manage their exposure to ﬂuctuations in foreign exchange and interest rates. The Group does not enter into
derivatives for trading or speculative purposes.
Derivative ﬁnancial instruments and foreign currency transactions areclassiﬁed and accounted for as follows: a) all derivatives are recognized as either
assets or liabilities and measured at fair value, and gains or losses on derivativetransactions are recognized in the statements of income and b) for derivatives
used for hedging purposes, if derivatives qualify for hedge accounting becauseof high correlation and eﬀectiveness between the hedging instruments and thehedged items, gains or losses on derivatives are deferred until maturity of thehedged transactions.
The interest rate swaps that qualify for hedge accounting and meet speciﬁcmatching criteria are not remeasured at market value but the diﬀerential paidor received under the swap agreements are recognized and included in interest
expense or income.
w. Per Share Information—Basic net income per share is computed by dividing
net income available to common shareholders by the weighted-average numberof common shares outstanding for the period, retroactively adjusted for stock
splits.
Diluted net income per share reﬂects the potential dilution that could occur
if securities were exercised or converted into common stock. Diluted net income
per share of common stock assumes full conversion of the outstanding convertible notes and bonds at the beginning of the year (or at the time of issuance)with an applicable adjustment for related interest expense, net of tax, and full
exercise of outstanding warrants.
Cash dividends per share presented in the accompanying consolidated
statements of income are dividends applicable to the respective years including
dividends to be paid after the end of the year, which is not retroactively adjusted
for stock splits.
x. Accounting Changes and Error Corrections—In December 2009, ASBJ
issued ASBJ Statement No. 24, “Accounting Standard for Accounting Changes andError Corrections” and ASBJ Guidance No. 24, “Guidance on Accounting Standard
for Accounting Changes and Error Corrections.” Accounting treatments under thisstandard and guidance are as follows:(1) Changes in Accounting Policies
When a new accounting policy is applied with revision of accounting
standards, the new policy is applied retrospectively unless the revised accounting standards include speciﬁc transitional provisions. When the revised
accounting standards include speciﬁc transitional provisions, an entity shallcomply with the speciﬁc transitional provisions.
(2) Changes in Presentations
When the presentation of ﬁnancial statements is changed, prior period ﬁnancial statements are reclassiﬁed in accordance with the new presentation.

(3) Changes in Accounting Estimates
A change in an accounting estimate is accounted for in the period of thechange if the change aﬀects that period only and is accounted for prospectively if the change aﬀects both the period of the change and future periods.
(4) Corrections of Prior Period Errors
When an error in prior period ﬁnancial statements is discovered, thosestatements are restated.
This accounting standard and the guidance are applicable to accountingchanges and corrections of prior period errors which are made from the beginning of the ﬁscal year that begins on or after April 1, 2011.

y. New Accounting Pronouncemen—
Accounting Standard for Retirement Benefits—On May 17, 2012, the ASBJ
issued ASBJ Statement No. 26, “Accounting Standard for Retirement Beneﬁts”
and ASBJ Guidance No. 25, “Guidance on Accounting Standard for Retirement
Beneﬁts”, which replaced the Accounting Standard for Retirement Beneﬁts that
had been issued by the Business Accounting Council in 1998 with eﬀective dateof April 1, 2000 and the other related practical guidances, being followed bypartial amendments from time to time through 2009.
Major changes are as follows:(a) Treatment in the balance sheet
Under the current requirements, actuarial gains and losses and past service
costs that are yet to be recognized in proﬁt or loss are not recognized in
the balance sheet, and the diﬀerence between retirement beneﬁt obligations and plan assets (“deﬁcit or surplus”), adjusted by such unrecognizedamounts, are recognized as a liability or asset.
Under the revised accounting standard, actuarial gains and losses andpast service costs that are yet to be recognized in proﬁt or loss shall berecognized within equity (accumulated other comprehensive income), after
adjusting for tax eﬀects, and the deﬁcit or surplus shall be recognized as
a liability (liability for retirement beneﬁts) or asset (asset for retirement
beneﬁts).
(b) Treatment in the statement of income and the statement of comprehensive
income (or the statement of income and comprehensive income)The revised accounting standard would not change how to recognize
actuarial gains and losses and past service costs in proﬁt or loss. Thoseamounts would be recognized in proﬁt or loss over a certain period nolonger than the expected average remaining working lives of the employees.
However, actuarial gains and losses and past service costs that arose in thecurrent period and yet to be recognized in proﬁt or loss shall be included inother comprehensive income and actuarial gains and losses and past service
costs that were recognized in other comprehensive income in prior periods
and then recognized in proﬁt or loss in the current period shall be treated asreclassiﬁcation adjustments.
This accounting standard and the guidance are eﬀective for the end ofannual periods beginning on or after April 1, 2013 with earlier application being
permitted from the beginning of annual periods beginning on or after April
1, 2013. However, no retrospective application of this accounting standard toconsolidated ﬁnancial statements in prior periods is required.
The Company expects to apply the revised accounting standard from theend of the annual period beginning on April 1, 2013 and is in the process ofmeasuring the eﬀects of applying the revised accounting standard for the year
ending March 31, 2014.

Sysmex Annual Report 201279

Consolidated Financial Statements

3. SHORT-TERM INVESTMENTS AND INVESTMENT SECURITIES

5. GOODWILL

Short-term investments and investment securities as of March 31, 2012 and 2011
consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2012
2011
2012
Current:
Time deposits other than cash
¥ 24
¥ 35
$ 292
equivalents
Investment trust
245
178
2,988
Total
¥ 269
¥ 213
$ 3,280
Non-current:¥ 2,239 ¥ 1,890$ 27,305
Marketable equity securities

Goodwill as of March 31, 2012 and 2011 consisted of the following:

Debt securities
Unquoted equity securities
Total

944
¥ 3,183500
575¥ 2,965

11,512$ 38,817

The costs and aggregate fair values of investment securities as of March 31,
2012 and 2011 were as follows:
Millions of Yen
2012
Unrealized Unrealized
Cost
Fair Value
Gains
LossesAvailable-for-sale:¥ 1,567¥ 683¥ (11) ¥ 2,239
Equity securities

Cost
Available-for-sale:
Equity securities¥ 1,567

Millions of Yen
2011
Unrealized Unrealized
Fair Value
Gains
Losses
¥ 324

¥ (1)

¥ 1,890

Thousands of U.S. Dollars
2012
Unrealized Unrealized
Cost
Fair Value
Gains
LossesAvailable-for-sale:
Equity securities$ 19,110$ 8,329$ (134) $ 27,305

4. INVENTORIESInventories as of March 31, 2012 and 2011 consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2012
2011
2012
Finished products and merchandise ¥ 16,534 ¥ 14,330$ 201,634
Work in process
1,402
1,733
17,098Raw materials
3,368
3,281
41,073
Supplies
467
6,573
539
Total
¥ 21,843 ¥ 19,811$ 266,378

80

Sysmex Annual Report 2012

Millions of Yen
Current:
Unquoted equity securities
Total

2012
¥ 1,165
1,029¥ 2,194

2011
51
1,779
¥ 1,830¥

Thousands of
U.S. Dollars
2012$ 14,207
12,549$ 26,756

Goodwill on purchase of a speciﬁc business and consolidation goodwill areamortized using straight-line method over ﬁve years.

6. LONG-TERM DEBT
Long-term debt as of March 31, 2012 and 2011 consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2012
2011
2012
Loans from banks, due through2016, with interest ranging from0.02 % to 0.05 % for 2012 (from0.02% to 0.05% for 2011):
¥ 10
¥ 16
$ 122
Unsecured
Total
10
16
122
Less current portion
(5)
(5)
(61)
Long-term debt, less current portion
¥ 5
¥ 11
$ 61
Annual maturities of long-term debt as of March 31, 2012 were as follows:
Thousands ofYear Ending March 31
Millions of Yen
U.S. Dollars
2013

¥ 5

$ 61

2014

4

49

2015

1

12

2016

0

0

Total

¥ 10

$ 122

7. RETIREMENT BENEFITSThe Company and its certain subsidiaries have retirement benefit plans for
employees. Under most circumstances, employees terminating their employment are entitled to retirement benefits determined based on the rate of pay at
the time of termination, years of service and certain other factors. Employees
are entitled to larger payments if the termination is involuntary, as opposed toby retirement at the mandatory retirement age or by death.
Certain subsidiaries have unfunded lump-sum payment plans and certain
overseas subsidiaries have defined contribution pension plans.
The liability for employees’ retirement benefits as of March 31, 2012 and2011 consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2012
2011
2012
Projected benefit obligation¥ 10,177 ¥ 9,572$ 124,110
Fair value of plan assets(7,984)(7,550)(97,366)
Unrecognized prior service cost
(28)
(341)
Unrecognized actuarial loss
(901)
(1,270)(10,988)
Net liability¥ 1,264 ¥ 752$ 15,415

The components of net periodic retirement benefit costs for the years
ended March 31, 2012 and 2011 are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2012
2011
2012
Service cost
¥ 1,195 ¥ 1,151$ 14,573
Interest cost
185
174
2,256
Expected return on plan assets
(227)
(215)
(2,768)
Amortization of prior service cost
3
37
Recognized actuarial loss
509
249
6,207
Net periodic retirement benefit costs ¥ 1,665 ¥ 1,359$ 20,305
Assumptions used for the years ended March 31, 2012 and 2011 are set forth
as follows:
2012
2011
Discount rate
2.0%
2.0%
3.0%
3.0%
Expected rate of return on plan assets
5 years
Amortization period of prior service cost
Recognition period of actuarial gain/loss
5 years
5 years
In addition, the Company and certain subsidiaries participate in contributory multiemployer pension plans covering substantially all of their employees.
Under these plans, the amount of pension assets and benefit obligations wereapproximately ¥8,497 million ($103,622 thousand) and ¥10,153 million ($123,817
thousand) at March 31, 2011, the most recent valuation date.
The Company also has recorded a liability for an unfunded retirement
benefit plan covering all of its directors in the amount of ¥160 million ($1,951
thousand), and ¥160 million as of March 31, 2012 and 2011, respectively.

8. EQUITY
Japanese companies are subject to the Companies Act of Japan (the “CompaniesAct”). The significant provisions in the Companies Act that affect financial andaccounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time during
the ﬁscal year in addition to the year-end dividend upon resolution at theshareholders meeting. For companies that meet certain criteria such as; (1)having the Board of Directors, (2) having independent auditors, (3) having
the Board of Corporate Auditors, and (4) the term of service of the directors
is prescribed as one year rather than two years of normal term by its articles
of incorporation, the Board of Directors may declare dividends (except for

dividends in kind) at any time during the ﬁscal year if the company hasprescribed so in its articles of incorporation. However, the Company cannot
do so because it does not meet all the above criteria.
The Companies Act permits companies to distribute dividends-in-kind(non-cash assets) to shareholders subject to a certain limitation andadditional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles of incorporation of the company
so stipulate. The Companies Act provides certain limitations on the amounts
available for dividends or the purchase of treasury stock. The limitation isdeﬁned as the amount available for distribution to the shareholders, but theamount of net assets after dividends must be maintained at no less than ¥3
million.

(b) Increases/decreases and transfer of common stock, reserve and surplus
The Companies Act requires that an amount equal to 10% of dividends must
be appropriated as a legal reserve (a component of retained earnings) or
as additional paid-in capital (a component of capital surplus) dependingon the equity account charged upon the payment of such dividends until
the aggregate amount of legal reserve and additional paid-in capital equals
25% of the common stock. Under the Companies Act, the total amount ofadditional paid-in capital and legal reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve,
additional paid-in capital, other capital surplus and retained earnings can betransferred among the accounts under certain conditions upon resolution of
the shareholders.

(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury stockand dispose of such treasury stock by resolution of the Board of Directors.
The amount of treasury stock purchased cannot exceed the amountavailable for distribution to the shareholders which is determined by speciﬁcformula.
Under the Companies Act, stock acquisition rights are presented as aseparate component of equity.
The Companies Act also provides that companies can purchase bothtreasury stock acquisition rights and treasury stock. Such treasury stockacquisition rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
On April 1, 2011, the Company made a two-for-one stock split by way of afree share distribution based on the resolution of the Board of Directors meeting
held on March 3, 2011.

9. STOCK OPTION
The stock options outstanding as of March 31, 2012 are as follows:
Stock Option

Persons Granted2007 Stock Option

9 directors
152 employees
18 directors of subsidiaries
42 employees of subsidiaries

Number of
Options Granted(Shares)
1,466,400

Date of
Grant

Exercise
Price

Exercise Period

2007.7.30¥ 2,325($ 28.35)

From July 30, 2009 to
July 29, 2015

The number of options granted and price information in the above table are retroactively adjusted for stock splits:

Sysmex Annual Report 201281

Consolidated Financial Statements

The stock option activity is as follows:
For the year ended March 31, 2011Non-vested
April 1, 2010 - Outstanding
GrantedCanceled
VestedMarch 31, 2011 - Outstanding
VestedApril 1, 2010 - Outstanding
VestedExercised
Canceled
March 31, 2011 - Outstanding
Exercise price
Average stock price at exercise
Fair value price at grant date2007 Stock
Option(Shares)

677,700(63,700)(3,500)610,500¥ 4,650¥ 5,420¥ 98,325

The number of shares and price information as of March 31, 2011 are notadjusted for stock splits.

Millions of Yen

Deferred tax assets (Current):
Unrealized intercompany profits
Inventories
Accrued bonuses
Accrued enterprise tax
OtherLess valuation allowance
Total
Deferred tax assets (Non-current):
Depreciation
Liability for retirement benefits
Tax loss carryforwards
SoftwareInvestment securities
Other
Less valuation allowance
Total
Deferred tax liabilities (Current)

Thousands of
U.S. Dollars
2012

2012

2011

¥ 2,072
489
1,067
163
1,341

¥ 1,776
611
1,020
218
1,309
(7)
4,927

$25,268
5,963
13,012
1,988
16,354

841
5,122

746
287
1,187
(228)
2,481
3

87
277
8
867
249
1,174
(265)
2,397
2

9,098
3,500
14,476(2,781)
30,256
36

239

131

2,915

400

457

4,878

377

431

4,598

2,356
781
4,153
¥ 3,457

2,035
681
3,735
¥ 3,587

28,731
9,524
50,646$ 42,159

5,132
69
420

62,585

Deferred tax liabilities (Non-current):
For the year ended March 31, 2012
Non-vested
March 31, 2011 - Outstanding
GrantedCanceled
VestedMarch 31, 2012 - Outstanding
VestedMarch 31, 2011 - Outstanding
VestedExercised
Canceled
March 31, 2012 - Outstanding
Exercise price
Average stock price at exercise
Fair value price at grant date2007 Stock
Option(Shares)

1,221,000(103,400)(6,000)1,111,600
¥
2,325
¥
2,770
¥ 98,325

The Assumptions Used to Measure Fair Value of 2007 Stock Option
Estimate method:Black-Scholes option pricing model
Volatility of stock price:26.14%
Estimated remaining
outstanding period:
five years
Estimated dividend:¥ 36 per share
Interest rate with risk free:
1.403%

10. INCOME TAXESThe Company and its domestic subsidiaries are subject to Japanese national
and local income taxes which, in the aggregate, resulted in a normal eﬀective
statutory tax rate of approximately 40.6% for the years ended March 31, 2012
and 2011. Foreign subsidiaries are subject to income taxes of the countries inwhich they operate.
The tax eﬀects of signiﬁcant temporary diﬀerences and loss carryforwards
which resulted in deferred tax assets and liabilities at March 31, 2012 and 2011
are as follows:82

Sysmex Annual Report 2012

Net unrealized gain on
available-for-sale securities
Revaluation of land forconsolidation
Investment loss for subsidiaries
capital reduction bycorporation tax law
Undistributed earnings offoreign subsidiaries
Other
Total
Net deferred tax assets

A reconciliation between the normal eﬀective statutory tax rates and theactual eﬀective tax rates reﬂected in the accompanying consolidated statements
of income for the years ended March 31, 2012 and 2011 is as follows:
2012
2011
Normal effective statutory tax rate
40.6%
40.6%
1.3
1.4
Expenses not deductible for income tax purposes
0.3
0.3
Per capita levy
Foreign tax credit
(0.8)
(4.3)
Tax effect on elimination of dividends from
4.5
foreign subsidiaries
R&D tax credit
(3.3)
(3.1)
1.5
1.5
Amortization of goodwill
0.8
Effect of tax rate reduction
Tax effect on undistributed earnings of foreign
2.0
2.1
subsidiaries
(6.7)
(7.4)
Different tax rates applied to foreign subsidiaries
Other - net
0.8
(0.0)
36.5%
35.6%
Actual effective tax rate
On December 2, 2011, new tax reform laws were enacted in Japan, whichchanged the normal eﬀective statutory tax rate from approximately 40.6% to38.0% eﬀective for the ﬁscal years beginning on or after April 1, 2012 throughMarch 31, 2015, and to 35.6% afterwards. The eﬀect of this change was todecrease deferred taxes in the consolidated balance sheet as of March 31, 2012by ¥115 million ($1,402 thousand) and to increase income taxes - deferred in
the consolidated statement of income for the year then ended by ¥149 million($1,817 thousand).

11. LEASES(Lessee)
The Group leases certain furniture, ﬁxtures and other assets.
The minimum rental commitments under noncancelable operating leases
are as follows
Millions ofThousands of
Yen
U.S. Dollars
Due within one year
Due after one year
Total

2012

2012

¥ 791

$ 9,646

5,497

67,037¥ 6,288$ 76,683

Payment terms of payables, such as trade notes and trade accounts, aremostly less than six months.
Maturities of ﬁnance lease obligation, which are mainly used for fundingof equipment investment, are less than eleven years after the balance sheet
date.
Derivatives mainly include forward foreign currency contracts, which areused to manage exposure to market risks from changes in foreign currency
exchange rates of receivables.
Please see Note 13 for more detail about instruments, hedged items
and policy for hedge accounting and assessment procedures of hedge
eﬀectiveness.
(3) Risk management for ﬁnancial instruments

Credit risk management(Lessor)The net investments in lease are summarized as follows:
Thousands of
U.S. Dollars

Millions of Yen

Gross lease receivables

2012

2011

2012

¥ 2,692¥ 1,888$ 32,829

Estimated residual values

397

281

4,842

Unearned interest income

(512)

(406)

(6,244)¥ 2,577¥ 1,763$ 31,427

Investments in lease, current

Maturities of investment in lease for ﬁnance leases that are not deemed totransfer ownership of the leased property to the lessee are as follows:
Millions ofThousands ofYear Ending March 31
Yen
U.S. Dollars$ 9,0982013¥ 0,746
2014
708
8,634
2015
575
7,012
2016
412
5,024
2017
200
2,439
2018 and thereafter
51
622
Total
¥ 2,692$ 32,829
Future rental income under operating leases (including imputed interest income):
Millions ofThousands of
Yen
U.S. Dollars
Due within one year
Due after one year
Total

2012

2012

¥ 5

$ 61

12

146

¥ 17

$ 207

12. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group invests cash surpluses in low-risk ﬁnancial assets, mainly
short-term deposits and uses ﬁnancial instruments, mainly short-term bankloans, for funding. Derivatives are used, not for speculative purposes, but tomanage exposure to ﬁnancial risks as described in (2) below.
(2) Nature and Extent of Risks Arising from Financial Instruments
Receivables such as trade notes, trade accounts and lease investment
assets are exposed to customer credit risk. Although receivables in foreign
currencies are exposed to the market risk of ﬂuctuation in foreign currency
exchange rates, the position, net of payables in foreign currencies, is hedgedby using forward foreign currency contracts. Marketable and investment
securities, mainly listing shares, are exposed to the risk of market priceﬂuctuations.

Credit risk is the risk of economic loss arising from a counterparty’s failure
to repay or service debt according to the contractual terms. The Groupmanages its credit risk from receivables on the basis of internal guidelines,
which include monitoring of payment term and balances of major customers
by each business administration department to identify the default risk ofcustomers at an early stage. The credit risk regarding subsidiaries is also
managed in the same manner. With respect to ﬁnancial investments, theGroup manages its exposure to credit risk by prohibiting its funding tohigh credit rated bonds in accordance with its internal guidelines. Credit
risk from derivatives is minimized because the group deals only with large
ﬁnancial institutions.

Market risk management (foreign exchange risk)
Foreign currency trade receivables are exposed to market risk resulting
from ﬂuctuations in foreign currency exchange rates. Such foreign currency
exchange risk, which is recognized with respect to each currency and eachmonth, is hedged principally by forward foreign currency contracts. Forward
foreign currency contracts are used when foreign currency trade receivables
are certainly expected from forecasted transactions according to conditions
in foreign currency exchange ﬂuctuations.
Marketable and investment securities are managed by monitoring market
values and ﬁnancial position of issuers on a regular basis.
Derivative transactions have been approved by a predeﬁned decision
maker based on the internal guidelines which prescribe the authority andthe limit and managed by regularly conﬁrming the balance of each day by
the ﬁnance department.

Liquidity risk management
Liquidity risk comprises the risk that the Group cannot meet its contractual
obligations in full on their maturity dates. The Group manages its liquidity
risk by holding adequate volumes of liquid assets in view of businessincome, expenditure, and equipment investment spending plan alongwith adequate ﬁnancial planning by the corporate treasury department.
Subsidiaries also report their ﬁnancial plans to the Group. The ﬁnancedepartment manages the liquidity risk by obtaining information of cash
ﬂows of the whole Group.
(4) Fair Values of Financial Instruments
Fair values of ﬁnancial instruments are based on quoted prices in active markets. If a quoted price is not available, other rational valuation techniques
are used instead. The techniques include some changing factors and the fairvalues may be changed by adopting diﬀerent assumptions. In addition, thecontract amounts of derivatives in Note 13, “DERIVATIVES,” do not directly
indicate the market risk of derivatives.
(a) Fair value of ﬁnancial instruments
The carrying amounts, fair values and unrealized gain/loss as of March 31,
2012 and 2011, are as follows. Note that ﬁnancial instruments whose fairvalue cannot be reliably determined are not included (see (b)).

Sysmex Annual Report 201283

Consolidated Financial Statements

March 31, 2012
Cash and cash equivalents
Receivables:
Trade notes
Trade accounts
Associated company
Allowance for doubtful accounts (*1)
Receivables - net
Investments in lease
Investment securities:
Available-for-sale securities
Total
Payables:Trade notes
Trade accounts
Associated company
Lease obligations
Income taxes payable
Total
Derivatives (*2)

March 31, 2011
Cash and cash equivalents
Receivables:
Trade notes
Trade accounts
Associated company
Allowance for doubtful accounts (*1)
Receivables - net
Investments in lease
Investment securities:
Held-to-maturity securities
Available-for-sale securities
Total
Payables:Trade notes
Trade accounts
Associated company
Lease obligations
Income taxes payable
Total
Derivatives (*2)

Millions of Yen
Unrealized
Carrying
Fair Value
Gain/Loss
Amount¥ 21,838 ¥ 21,838
3,383
32,674164(344)
35,8772,577

35,876
2,489

¥ (1)
(88)

2,239
¥ 62,531

2,239¥ 62,442¥ (89)¥ 02,023 ¥ 02,023
9,978
9,978
165
165
509
506
2,776
2,776
¥ 15,451 ¥ 15,448¥ (238)¥ (238)

¥ (3)
¥ (3)

Millions of Yen
Unrealized
Carrying
Fair Value
Gain/Loss
Amount¥ 18,916 ¥ 18,916
2,896
28,994176(371)
31,695
1,763

31,691
1,704

¥ (4)
(59)

500
1,890
¥ 54,764

507
1,890¥ 54,7087¥ 2,149 ¥ 2,149
9,107
9,107
297
297
1,145
1,132
2,729
2,729
¥ 15,427 ¥ 15,414¥ (109)¥ (109)¥ (56)¥ (13)¥ (13)March 31, 2012

Thousands of U.S. Dollars
Unrealized
Carrying
Fair Value
Gain/Loss
Amount$ 266,317 $ 266,317

Cash and cash equivalents
Receivables:
Trade notes
41,256
Trade accounts
398,463
Associated company
2,000
Allowance for doubtful accounts (*1)
(4,195)
Receivables - net
437,524 437,512
Investments in lease
31,42730,354
Investment securities:
27,30527,305
Available-for-sale securities
Total$ 762,573 $ 761,488
Payables:Trade notes$ 024,671 $ 024,671
Trade accounts
121,683 121,683
Associated company
2,012
2,012
Lease obligations
6,207
6,171
Income taxes payable
33,85433,854
Total$ 188,427 $ 188,391
Derivatives (*2)
$ (2,902) $ (2,902)$ 0,0(12)(1,073)$ (1,085)$ (36)$ (36)

Notes: *1. Allowance for doubtful accounts associated with trade accounts receivables
are deducted.
*2. Derivative assets and liabilities are on net basis.

AssetsCash and cash equivalents
The carrying values are adopted for cash and cash equivalents as they
approximate fair value because of their short maturities.
Receivables
The carrying values are adopted for short-term receivables as they approximate fair value.
The fair values of long-term receivables such as installment receivables
measured at the present values discounted by risk-free rates and the future
cash ﬂows including credit risks.
Investments in lease
The fair values of investments in lease are measured at the present values
discounted by the interest rate after consideration of the remaining terms
and credit risks.
Investment securities
The fair values of equity securities are determined by securities exchange
prices. Please see Note 3, “SHORT-TERM INVESTMENT AND INVESTMENT
SECURITIES,” for securities categorized by purposes.

Liabilities
Payables and income taxes payable
The carrying values are adopted for payables and income taxes payable as
they approximate fair value because of their short maturities.
Lease obligations
The fair values of lease obligations are measured at the present values of
total principal discounted by the interest rate which would be used if a newlease transaction occurred.

Derivatives
Fair value information for derivatives is included in Note 13, “DERIVATIVES”.

84

Sysmex Annual Report 2012

(b) Carrying amount of ﬁnancial instruments whose fair value cannot be
reliably determined
Thousands ofMillions of Yen
U.S. Dollars
Investments in equity
instruments that do nothave a quoted market pricein an active market

2012

2011

2012

¥ 1,021¥ 712$ 12,451

The above ﬁnancial instruments are not included in investment securities because they do not have market values and it is diﬃcult to estimate
the future cash ﬂows.
(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Millions of Yen
Due after Due after
Due inOne Year Five Years Due after
March 31, 2012
One Yearthrough through Ten Yearsor Less
Five Years Ten Years
Cash and cash equivalents ¥ 21,838
Receivables:
Trade notes
3,383
Trade accounts
32,425¥ 0,249
Associated company
164
Investments in lease
579
1,962
¥ 36
Total
¥ 36
¥ 58,389¥ 2,211

Millions of Yen
Due after Due after
Due inOne Year Five Years Due after
March 31, 2011
One Yearthrough through Ten Yearsor Less
Five Years Ten Years
Cash and cash equivalents ¥ 18,916
Receivables:
Trade notes
2,896
Trade accounts
28,586¥ 408
Associated company
176
Investments in lease
342
1,410
¥ 11
Investment securities:
Held-to-maturity securities
500
Total
¥ 11
¥ 50,916¥ 2,318

13. DERIVATIVESThe Group enters into foreign currency forward contracts and foreign currency
option contracts to hedge foreign exchange risk associated with certain assets
and liabilities denominated in foreign currencies.
The Group also enters into interest rate swap contracts to manage its
interest rate exposures on certain liabilities.
All derivative transactions are entered into hedge interest and foreign currency exposures incorporated within the Group’s business. Accordingly, market
risk in these derivatives is basically oﬀset by opposite movements in the valueof hedged assets or liabilities. The Group does not hold or issue derivatives for
trading purposes.
Because the counterparties to these derivatives are limited to majorinternational ﬁnancial institutions, the Group does not anticipate any losses
arising from credit risk.
Derivative transactions entered into by the Group have been made inaccordance with internal policies which regulate the authorization and credit
limit amount.

Derivative transactions to which hedge accounting is not applied

March 31, 2012
Foreign currency forward
contracts:
Selling U.S. dollars
Selling euro

March 31, 2011
Foreign currency forward
contracts:
Selling U.S. dollars
Selling euro

March 31, 2012
Thousands of U.S. Dollars
Due after Due after
Due inOne Year Five Years Due after
March 31, 2012
One Yearthrough through Ten Yearsor Less
Five Years Ten Years
Cash and cash equivalents $ 266,317
Receivables:
Trade notes
41,256
Trade accounts
395,427 $ 03,036
Associated company
2,000
Investments in lease
7,061
23,927
$ 439
$ 439
Total
$ 712,061 $ 26,963

Foreign currency forward
contracts:
Selling U.S.dollars
Selling euro

Millions of Yen
Contract
Unrealized
Contract Amount
Fair Value
Gain/Loss
Amount Due after
One Year¥ 4,700
1,044¥ (184)(54)¥ (184)(54)

Millions of Yen
Contract
Unrealized
Contract Amount
Fair Value
Gain/Loss
Amount Due after
One Year¥ 2,365
1,738

¥ (4)
(82)

¥ (4)
(82)

Thousands of U.S. Dollars
Contract
Contract Amount
Unrealized
Fair Value
Amount Due after
Gain/LossOne Year$ 57,317
12,732$ (2,244)(659)$ (2,244)(659)

Derivative transactions to which hedge accounting is applied

March 31, 2012

HedgedItem

Foreign currency forward
contracts:
Selling euro
Receivables

Millions of Yen
Contract
Contract Amount
Fair Value
Amount Due after
One Year

¥ 55

¥ (0)

Sysmex Annual Report 201285

Consolidated Financial Statements

March 31, 2011

HedgedItem

Foreign currency forward
contracts:
Selling U.S.dollars
Receivables
Selling euro
Receivables

March 31, 2012

Millions of Yen
Contract
Contract Amount
Fair Value
Amount Due after
One Year

¥ 450
569

¥ (6)
(17)

Thousands of U.S. Dollars
Contract
Hedged Contract Amount
Fair Value
Item
Amount Due after
One Year

Foreign currency forward
contracts:
Selling euro
Receivables

$ 671

$ (0)

The fair value of derivative transactions is measured at the quoted priceobtained from the ﬁnancial institution.
The contract amounts of derivatives which are shown in the above table do
not represent the amounts exchanged by the parties and do not measure theGroup’s exposure to credit or market risk.

14. COMPREHENSIVE INCOME
The components of other comprehensive income for the year ended March 31,
2012 were as follows:
Millions ofThousands of
Yen
U.S. Dollars
Unrealized gain on available-for-salesecurities:
Gains arising during the year
Reclassification adjustments to profit
or loss
Amount before income tax effect
Income tax effect
Total
Deferred gain on derivatives underhedge accounting:
Gains arising during the year
Reclassification adjustments to profit
or loss
Amount before income tax effect
Income tax effectTotal
Foreign currency translation
adjustments:
Adjustments arising during the year
Reclassification adjustments to profit
or loss
Total
Total other comprehensive loss

2012

2012

¥ 349

$ 4,256

349
(108)
¥ 241

4,256
(1,317)$ 2,939

¥ 3

$ 36

20

244

23
(9)
¥ 14

280
(109)
$ 171

¥ (1,092)$ (13,317)

28

341

¥ (1,064)¥ (809)$ (12,976)$ (9,866)

Sysmex Annual Report 2012

Reconciliation of the diﬀerences between basic and diluted net income per share(“EPS”) for the years ended March 31, 2012 and 2011 is as follows:
Millions of Thousands of
U.S.
Yen
Yen
U.S. Dollars
Dollars
Weighted
Net
Average
EPS
IncomeSharesFor the year ended March 31, 2012:
Basic EPS
Net income available to¥ 12,007
102,758 ¥ 116.85$ 1.43common shareholders
Effect of dilutive
securities
191
Stock options
Diluted EPS
Net income for¥ 12,007
102,949 ¥ 116.63$ 1.42computation
For the year ended March 31, 2011:
Basic EPS
Net income available to¥ 11,412
common shareholders
Effect of dilutive
securities
Stock options
Diluted EPS
Net income forcomputation¥ 11,412

102,650 ¥ 111.17

199

102,849 ¥ 110.96

16. SUBSEQUENT EVENTSAppropriations of Retained Earnings
The following appropriation of retained earnings at March 31, 2012 was approvedat the shareholders’ general meeting of the Company held on June 22, 2012:
Millions of Thousands of
Yen
U.S. Dollars
Year-end cash dividends, ¥19 ($0.23)¥ 1,953$ 23,817
per share

17. SEGMENT INFORMATIONThe corresponding information for the year ended March 31, 2011 was not
required under the accounting standard for presentation of comprehensive
income as an exemption for the ﬁrst year of adopting that standard and notdisclosed herein.

86

15. NET INCOME PER SHARE

Under ASBJ Statement No. 17, “Accounting Standard for Segment Information
Disclosures” and ASBJ Guidance No. 20, “Guidance on Accounting Standard for
Segment Information Disclosures,” an entity is required to report ﬁnancial anddescriptive information about its reportable segments. Reportable segments areoperating segments or aggregations of operating segments that meet speciﬁed
criteria. Operating segments are components of an entity about which separateﬁnancial information is available and such information is evaluated regularly by
the chief operating decision maker in deciding how to allocate resources andin assessing performance. Generally, segment information is required to be reported on the same basis as is used internally for evaluating operating segment
performance and deciding how to allocate resources to operating segments.
1. Description of reportable segments
The Group’s reportable segments are those for which separate ﬁnancial information is available and regular evaluation by the Company’s management
is being performed in order to decide how resources are allocated among
the Group. The Group mainly produces and sells diagnostic instruments
and reagents. The Company plans comprehensive strategies within Japanand conducts business activities there and the four regional headquarters
located in America, Europe, China and Asia-Paciﬁc plan comprehensive
strategies for each region and conduct business activities in those regions.
Therefore, the Group consists of the geographical segments based on
production and sales structures, which are “Japan,” “Americas,” “Europe,”“China” and “Asia-Paciﬁc”.

2. Methods of measurement for the amounts of sales, proﬁt (loss), assets, liabilities and other items for each reportable segment
The accounting policies of each reportable segment are consistent to those disclosed in Note 2, “Summary of Signiﬁcant Accounting Policies,” and the proﬁts of thereportable segments are their operating incomes.
Intersegment sales or transfers are determined based on market prices or costs of goods manufactured.
3. Information about sales, proﬁt (loss), assets, liabilities and other items is as follows:
Millions of Yen

2012
Japan
Sales:
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Investment of associates accounted
for using equity method
Increase in property, plant andequipment and intangible assets

Americas

Reportable Segment
EuropeChina

Asia PacificReconciliations Consolidated

Total¥ 43,690
39,094¥ 82,784¥ 8,683
90,699¥ 26,855
2¥ 26,857¥ 2,872
18,173¥ 37,032
453¥ 37,485¥ 5,379
28,364¥ 19,2995¥ 19,304¥ 2,370
11,860¥ 7,868131¥ 7,999
¥ 330
5,772

¥ 134,744
39,685¥ 174,429¥ 19,634
154,868

3,926
454

1,075

2,229
530

137

363
7

7,730
991

76
4,796

¥ 134,744¥ (39,685)¥ (39,685)¥ (428)(12,583)
(699)

76
1,261

3,178

828

476

10,539¥ 134,744¥ 19,206
142,285
7,031
991
76

(923)

9,616

Millions of Yen

2011
Japan
Sales:
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Investment of associates accounted
for using equity method
Increase in property, plant andequipment and intangible assets

Americas

Reportable Segment
EuropeChina

Asia PacificReconciliations Consolidated

Total¥ 41,720
34,010¥ 75,730¥ 6,816
83,475¥ 25,4765¥ 25,481¥ 3,248
16,568¥ 35,296
282¥ 35,578¥ 4,552
27,510¥ 15,093
7¥ 15,100¥ 2,411
8,893¥ 7,109183¥ 7,292
¥ 746
5,397

¥ 124,694
34,487¥ 159,181¥ 17,773
141,843

3,682
173

1,215

2,012
497

152

322
7

7,383
677

137
3,634

¥ 124,694¥ (34,487)¥ (34,487)¥
516(11,783)
(512)

137
1,295

3,099

106

552

8,686

¥ 124,694¥ 18,289
130,060
6,871
677
137

(828)

7,858

Thousands of U.S. Dollars

2012

Sales:
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Investment of associates accounted
for using equity method
Increase in property, plant andequipment and intangible assets

Japan

Americas

Reportable Segment
EuropeChina$ 532,805
476,756$ 1,009,561$ 105,890
1,106,085$ 327,500
24$ 327,524$ 35,024
221,622$ 451,610
5,524$ 457,134$ 65,598
345,903$235,354
61$ 235,415$ 28,903
144,634

47,878
5,537

13,11027,183
6,463

1,670

Asia Pacific$ 95,951 $ 1,643,220
1,598
483,963$ 97,549 $ 2,127,183$ 4,024 $ 239,439
70,3901,888,634
4,427
85

927
58,488

Total

94,26812,085Reconciliations Consolidated$ 1,643,220$ (483,963)$ (483,963) $ 1,643,220$ (5,219) $ 234,220(153,451) 1,735,183(8,524)927
15,37838,756

10,098

5,805

128,52585,74412,085927(11,256)

117,269

Notes: Reconciliations principally consist of intersegment transfers and unallocated corporate assets included under reconciliations for 2012 and 2011 are ¥2,692 million ($32,829 thousand) and¥2,485 million, respectively which consist primarily of funds such as marketable equity securities.

Sysmex Annual Report 201287

4. Information about products and services
Millions of Yen

2012
Maintenance
Reagent
Service¥ 59,906¥ 12,823

Instrument¥ 46,142

Sales to external customers

OthersTotal¥ 15,873¥ 134,744

OthersTotal¥ 15,514¥ 124,694

Millions of Yen

2011
Maintenance
Service¥ 55,291¥ 12,140

Instrument
Sales to external customers

Reagent¥ 41,749

Thousands of U.S. Dollars

2012
Maintenance
Reagent
Service$ 730,561$ 156,378

Instrument
Sales to external customers$ 562,708

5. Information about geographical areas(1) Sales
Millions of Yen(2) Property, plant and equipment
Millions of Yen

2012
Japan
¥ 39,735

Americas¥ 24,046

China¥ 19,299

Total¥ 134,744Japan¥ 29,317

China¥ 15,093

Total¥ 124,694

Japan¥ 26,423

China$ 235,354

Total¥ 39,840

Other¥ 9,809

Total¥ 36,232

Thousands of U.S. Dollars

2012
Americas$ 293,244

Other¥ 10,523

2011
Other
¥ 49,243

Thousands of U.S. Dollars
Japan$ 484,573$ 193,573 $ 1,643,220

Millions of Yen

2011
Americas¥ 21,817

Total

2012
Other
¥ 51,664

Millions of Yen
Japan¥ 38,541

Others

2012
Other
Total
$ 630,049 $ 1,643,220

Japan$ 357,525

Other$ 128,329

Total$ 485,854

Notes: Sales are classiﬁed in countries or regions based on location of customers.

6. Information about major customers
There is no customer who occupies more than 10% of the consolidated sales.
7. Information on the balance of goodwill of reportable segments
Millions of Yen

2012
Japan
Goodwill at March 31, 2012

Americas¥ 1,121

EuropeChina

Asia Pacific¥ 1,061

Eliminations/
Corporate

¥ 12

Total
¥ 2,194

Millions of Yen

2011
Japan
Goodwill at March 31, 2011

Americas¥ 170EuropeChina

Asia Pacific¥ 1,641

Eliminations/
Corporate

¥ 19

Total
¥ 1,830

Thousands of U.S. Dollars

2012
Japan
Goodwill at March 31, 201288

Sysmex Annual Report 2012

$ 13,671

Americas

Europe$ 12,939

China

Asia Pacific$ 146

Eliminations/
Corporate

Total$ 26,756

Independent Auditors’ Report

Sysmex Annual Report 201289

Sysmex Group Network
Global Network
Sysmex UK Limited
Sysmex Logistics UK Ltd.
Jinan Sysmex Medical Electronics Co., Ltd.
HYPHEN BioMed, SAS
Sysmex Wuxi Co., Ltd.

Sysmex France S.A.S.
Sysmex Nederland B.V.
Sysmex Belgium N.V.

Sysmex Taiwan Co., Ltd.

Sysmex Deutschland GmbH

Sysmex Europe GmbH
Sysmex RUS LLC
HITADO GmbH
Sysmex Polska Sp.z o.o.
Sysmex CZ s.r.o.
Sysmex Slovakia s.r.o.
Sysmex Hungaria Kft.

Sysmex America, Inc.

Japan
Sysmex Shanghai Ltd.

Sysmex RA Co., Ltd.
Sysmex CNA Co., Ltd.
Sysmex bioMérieux Co., Ltd.

Sysmex India Pvt. Ltd.

Sysmex Austria GmbH

Sysmex Digitana AG

Sysmex Reagents America, Inc.

Sysmex Philippines Inc.

Sysmex Middle East FZ - LLC
Sysmex Transasia Services Pvt. Ltd.

Sysmex Espana S.L.

Sysmex Canada, Inc.

Sysmex Hong Kong Limited
Sysmex Vietnam Company Limited

Sysmex (Thailand) Co., Ltd.
Sysmex (Malaysia) Sdn Bhd

Sysmex do Brasil
Industria e Comercio Ltda.

PT. Sysmex Indonesia
Sysmex New Zealand Limited

Sysmex Asia Paciﬁc Pte Ltd.

Sysmex South Africa (Pty) Ltd.

Sysmex TMC Co., Ltd.
Sysmex International Reagents Co., Ltd.
(Ono Factory)
Sysmex Medica Co., Ltd.
Sysmex International Reagents Co., Ltd.
(Head Oﬃce/Seishin Factory)
Kakogawa Factory

Sales
Production
R&D
Distribution
Regional headquarters

Technopark

Head Oﬃce

Solution Center
Sysmex Logistics Co., Ltd.

Kansai Area
Domestic Offices

Sysmex Group Network

90

Location

TEL

FAX

Head Office

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

TEL: (+81) 78-265-0500

FAX: (+81) 78-265-0524

Tokyo Office

1-2-2 Ohsaki, Shinagawa-ku, Tokyo 141-0032

TEL: (+81) 3-5434-8910

FAX: (+81) 3-5434-8555

Technopark

4-4-4 Takatsukadai, Nishi-ku, Kobe, Hyogo 651-2271

TEL: (+81) 78-991-1911

FAX: (+81) 78-991-1917

Solution Center

1-3-2 Murotani, Nishi-ku, Kobe, Hyogo 651-2241

TEL: (+81) 78-992-5860

FAX: (+81) 78-992-5868

Kakogawa Factory

314-2 Kitano, Noguchicho, Kakogawa, Hyogo 675-0011

TEL: (+81) 79-424-1171

FAX: (+81) 79-424-6814

Protein Development Center

1548 Ooaza Shimookudomi, Sayama, Saitama 350-1332

TEL: (+81) 4-2954-2171

FAX: (+81) 4-2954-2172

Sendai Branch

4-6-1 Chuo, Aoba-ku, Sendai 980-6024

TEL: (+81) 22-722-1710

FAX: (+81) 22-265-1661

Kita Kanto Branch

4-261-1 Kishiki-cho, Oomiya-ku, Saitama 330-0843

TEL: (+81) 48-600-3888

FAX: (+81) 48-601-2272

Tokyo Branch

1-2-2 Ohsaki, Shinagawa-ku, Tokyo 141-0032

TEL: (+81) 3-5434-8550

FAX: (+81) 3-5434-8551

Nagoya Branch

1-603 Kamiyashiro, Meito-ku, Nagoya 465-0025

TEL: (+81) 52-775-8101

FAX: (+81) 52-775-5217

Osaka Branch

17-1 Enoki-cho, Suita, Osaka 564-0063

TEL: (+81) 6-6337-8300

FAX: (+81) 6-6337-8200

Hiroshima Branch

3-17 Fukuro-machi, Naka-ku, Hiroshima 730-0036

TEL: (+81) 82-248-9070

FAX: (+81) 82-248-9075

Fukuoka Branch

4-9-24 Hakata Eki Minami, Hakata-ku, Fukuoka 812-0016

TEL: (+81) 92-411-4314

FAX: (+81) 92-474-3862

Sapporo Sales Office

4-12 Kita 7 jyo Nishi, Kita-ku, Sapporo 060-0807

TEL: (+81) 11-700-1090

FAX: (+81) 11-281-6136

Morioka Sales Office

1-7-25 Chuodori, Morioka City, Iwate 020-0021

TEL: (+81) 19-654-3331

FAX: (+81) 19-623-6429

Nagano Sales Office

2-5-26 Fukashi, Matsumoto City, Nagano 390-0815

TEL: (+81) 263-31-8180

FAX: (+81) 263-31-8191

Niigata Sales Office

1-20-5 Sasaguchi, Chuo-ku, Niigata City, Niigata 950-0911

TEL: (+81) 25-243-6266

FAX: (+81) 25-241-4452

Chiba Sales Office

1-3 Nakase, Mihama-ku, Chiba 261-8501

TEL: (+81) 43-297-2701

FAX: (+81) 43-297-2707

Shizuoka Sales Office

1-11-26 Takamatsu, Suruga-ku, Shizuoka City, Shizuoka 422-8034

TEL: (+81) 54-237-4815

FAX: (+81) 54-237-8148

Kanazawa Sales Office

2-11-1 Ekinishi Honmachi, Kanazawa City, Ishikawa 920-0025

TEL: (+81) 76-221-9363

FAX: (+81) 76-262-5615

Kyoto Sales Office

3-1 Mibu Kayo Gosho-cho, Nakagyo-ku, Kyoto 604-8811

TEL: (+81) 75-801-3196

FAX: (+81) 75-841-8445

Kobe Sales Office

4-1-2 Kumoidori, Chuo-ku, Kobe 651-0096

TEL: (+81) 78-251-5331

FAX: (+81) 78-251-5505

Takamatsu Sales Office

1-6-6 Bancho, Takamatsu City, Kagawa 760-0017

TEL: (+81) 87-823-5801

FAX: (+81) 87-823-5834

Okayama Sales Office3-10 Togiya-cho, Kita-ku, Okayama 700-0826

TEL: (+81) 86-224-2605

FAX: (+81) 86-222-6814

Kagoshima Sales Office15-9 Kajiya-cho, Kagoshima City, Kagoshima 892-0846

TEL: (+81) 99-222-2788

FAX: (+81) 99-267-1338

Metropolitan Area Service Center

2-16-2 Minami-kamata, Ota-ku, Tokyo 144-0035

TEL: (+81) 3-5711-8301

FAX: (+81) 3-5711-8302

Sysmex Annual Report 2012

(As of May 31, 2012)
Corporate name

EquityEstablished ownershipby Group

Sysmex Corporation

1968

—%

Sysmex International Reagents Co., Ltd.

1969

100%

LocationTEL

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

TEL: (+81) 78-265-0500

Head Office/Seishin Factory 4-3-2 Takatsukadai, Nishi-ku, Kobe, Hyogo 651-2271, Japan

TEL: (+81) 78-991-2211

Ono Factory

TEL: (+81) 794-62-7001

17 Takumidai, Ono, Hyogo 675-1322, Japan

Japan
Americas

Sysmex RA Co., Ltd.

1978

100%

1850-3 Hirookanomura, Shiojiri, Nagano 399-0702, Japan

TEL: (+81) 263-54-2251

Sysmex Medica Co., Ltd.

1978

100%

323-3 Miyaoki, Yumesaki-cho, Himeji, Hyogo 671-2121, Japan

TEL: (+81) 79-335-2080

Sysmex TMC Co., Ltd.

1992

100%

1-3-2 Murotani, Nishi-ku, Kobe, Hyogo 651-2241, Japan

TEL: (+81) 78-992-5883

Sysmex CNA Co., Ltd.

1996

100%

2-3-7 Hakata Eki Mae, Hakata-ku, Fukuoka 812-0011, Japan

TEL: (+81) 92-476-1121

Sysmex Logistics Co., Ltd.

1997

100%

1-3-2 Murotani, Nishi-ku, Kobe, Hyogo 651-2241, Japan

TEL: (+81) 78-992-0150

Sysmex bioMérieux Co., Ltd.

2008

34%

1-2-2 Ohsaki, Shinagawa-ku, Tokyo 141-0032, Japan

TEL: (+81) 3-6834-2666

Sysmex America, Inc.

2003

100%

577 Aptakisic Road, Lincolnshire, IL 60069

TEL: (+1) 847-996-4500

Sysmex Reagents America, Inc.

1993

100%

2 Nelson C. White Parkway, Mundelein, IL 60060, U.S.A.

TEL: (+1) 847-367-2800

Sysmex Canada, Inc.

2007

100%

5045 Orbitor Drive Building 9, Suite 401 Mississauga, ON L4W 4Y4, Canada

TEL: (+1) 905-366-7900

Europe
China

1998

100%

Rua Joaquim Nabuco, 615-Bairro Cidade Jardim-Sao Jose dos Pinhais-Parana- Brasil-CEP 83040-210

TEL: (+55) 41-2104-1314

Sysmex Europe GmbH

1980

100%

Bornbarch 1, 22848 Norderstedt, Germany

TEL: (+49) 40-527260

Sysmex Deutschland GmbH

1995

100%

Bornbarch 1, 22848 Norderstedt, Germany

TEL: (+49) 40-5341020

HITADO GmbH

2010

100%

Dreihausen 2, D-59519 Moehnesee, Germany

TEL: (+49) 0-2924-9705-0

Sysmex UK Limited

1991

100%

Sysmex House, Garamonde Drive, Wymbush, Milton Keynes, MK8 8 DF, U.K.

TEL: (+44) 870-902-9210

Sysmex Logistics UK Ltd.

2003

100%

Unit 4 IO Centre, Fingle Drive, Stonebridge, Milton Keynes, MK13 0AT, Buckinghamshire, U.K.

TEL: (+44) 870-902-9230

Sysmex France S.A.S.

2000

100%

22, avenue des Nations, Paris Nord II-B.P. 51414 Villepinte, 95944 ROISSY-CDG Cedex, France

TEL: (+33) 1-48-170190

HYPHEN BioMed, SAS

2010

100%

155 Rue d’Eragny-95000 Neuville sur Oise, France

TEL: (+33) 134-406-510

Sysmex Espana S.L.

2010

100%

Frederic Mompou, 4-B Planta 2 08960. Sant Just Desvern, Espana

TEL: (+34) 934-236-231

Sysmex Belgium N.V.

2009

100%

Park Rozendal, Building A Terhulpsesteenweg 6a 1560 Hoeilaart, Belgium

TEL: (+32) 2-769-7474

Sysmex Nederland B.V.

2009

100%

Ecustraat 11, 4879 NP Etten-Leur, The Netherlands

TEL: (+31) 76-508-6000

Sysmex Polska Sp.z o.o.

2005

100%

Kopernik Office Building, Al. Jerozolimskie 176, 02-486 Warszawa, Poland

TEL: (+48) 22-57284-00

Sysmex Digitana AG

2006

80%

Tödistrasse 50, 8810 Horgen, Switzerland

TEL: (+41) 44-718-38-38

Sysmex Austria GmbH

2007

100%

Odoakergasse 34-36 A-1160 Wien, Austria

TEL: (+43) 1-4861631

Sysmex Hungaria Kft.

2007

100%

Forum Offices Obuda Irodahaz, III kerulet, Becsi ut 271, 1037 Budapest, Hungary

TEL: (+36) 1-210-96-70

Sysmex CZ s.r.o.

2007

100%

Elgartova 683/4 61400 Brno Czech Republic

TEL: (+420) 548-216-855

Sysmex Slovakia s.r.o.

2007

100%

Trencianska 47 821 09 Bratislava, Slovakia

TEL: (+421) 2-6453-2881-2

Sysmex RUS LLC

2011

100%

1 Magistralny tupik, 11, Bld. 1, Office 13 Russia, Moscow 123290

TEL: (+7) 495-7816772

Sysmex Middle East FZ-LLC

2008

100%

Dubai Healthcare City City Pharmacy Building C/P 72 Office 304, P.O. Box 505119, Dubai, U.A.E.

TEL: (+971) 4-4370515

Sysmex South Africa (Pty) Ltd.

2006

100%

Fernridge Office Park, Block 2; 5 Hunter Avenue; Ferndale; Randburg 2194 RSA

TEL: (+27) 11-3299480

Sysmex Shanghai Ltd.

2000

100%

9th Floor, Azia Center, 1233 Lujiazui Ring Road, Shanghai, 200120, China

TEL: (+86) 21-6888-2626

Jinan Sysmex Medical Electronics Co., Ltd.

1995

100%

7493 Airport Road, Yaoqiang Town, Licheng District, Jinan City, Shandong Province, China; PC. 250107 TEL: (+86) 531-8873-4440

Sysmex Hong Kong Limited

1999

100%

Room 1012, 10/ F, Tower 1, Silvercord, 30 Canton Road, Tsimshatsui, Kowloon, Hong Kong

TEL: (+852) 2543-5123

Sysmex Wuxi Co., Ltd.

2003

100%

#8-9, No. 93, Science Technology Stand-up Park, New District, Wuxi, Jiangsu, 214028, China

TEL: (+86) 510-8534-5837

Sysmex Asia Pacific Pte Ltd.

1998

100%

9 Tampines Grande #06-16 to #06-22 528735, Singapore

TEL: (+65) 6221-3629

Sysmex (Malaysia) Sdn Bhd

1998

100%

No. 11A & 15, Jalan PJS 7/12, Bandar Sunway, 46150 Petaling Jaya, Selangor, Malaysia

TEL: (+60) 3-56371788

Sysmex (Thailand) Co., Ltd.

1999

100%

14 Soi Ramkamhaeng 43/1, Ramkamhaeng Road, Wangthonglang, Bangkok 10310, Thailand

TEL: (+66) 2539-1127

Sysmex Vietnam Company Limited

2010

100%

8th floor, 106 Nguyen Van Troi, Phu Nhuan District, Ho Chi Minh City, Vietnam

TEL: (+84) 8-39979400

PT. Sysmex Indonesia

2002

100%

Cyber 2 Tower, 5th Floor, Unit E Jl. HR. Rasuna Said Blok X5 No. 13 Jakarta Selatan 12950, Indonesia TEL: (+62) 21-3002-6688

Sysmex Transasia Services Pvt. Ltd.

2009

51%

308, ASCOT Centre, 3rd Floor, Next to Hotel Le Royal Meridian Sahar Airport Road, Andheri (East) MUMBAI 400 099, India

TEL: (+91) 22-2822-4040

Sysmex India Pvt. Ltd.

1998

100%

308, ASCOT Centre, 3rd Floor, Next to Hotel Le Royal Meridian Sahar Airport Road, Andheri (East) MUMBAI 400 099, India

TEL: (+91) 22-2822-4040

Sysmex Philippines Inc.

2011

100%

30th Floor, MDC 100 Bldg, E. Rodriguez Jr. Ave. cor. Eastwood Ave. Bagumbayan, Quezon City, Philippines TEL: (+63) 2-374-6883

Sysmex Taiwan Co., Ltd.

2000

100%

Song Jiang Road 318 13F-3, Zhong Shan District, Taipei, Taiwan

TEL: (+886) 2-2542-2339

Sysmex New Zealand Limited

2001

100%

382-386 Manukau Road, Epsom, Auckland 1344, New Zealand

TEL: (+64) 9-630-3554

Sysmex Annual Report 2012

Sysmex Group Network

Asia PacificSysmex do Brasil Industria e Comercio Ltda.

91

Sysmex Group Network

Brief History of the Company
Management R&D Production Marketing(See page 34 for a history of our instrument development.)
1963

Sysmex Group Network

92

Successfully developed and commercialized Automated Hematology
Analyzer “CC-1001” the first blood cellcounter in Japan.
Feb. 1968 Toa Electric founded Toa Medical
Electronics as the subsidiary for salesof its medical electronics devices andinstrument.
May 1973 Established the Kakogawa Factory inJapan.
Oct. 1975 Launch of the first fully automatedhematology analyzer developed inJapan.
Feb.1978 Launch of the Sysmex brand to markthe 10th anniversary of founding.
May 1978 Started hematology seminar in Japan.
(now held 31 times)
Oct. 1979 Established a US subsidiary, now
Sysmex America.
Oct. 1980 Established a European subsidiary,
Sysmex Europe.
Oct. 1984 Launch of the automated coagulation analyzer marks entry into thehemostasis segment.
Mar. 1987 Launch of the immunochemistry
analyzer, which utilized an original
immunoassay method, marks entry
into the immunochemistry segment.
Aug. 1990 Launch of an integrated hematology
system that fully automated theentire process from the counting ofblood cells through preparation ofsmear samples.
Feb. 1991 Opened the Ono Factory in Japan andtransferred the reagent production
division.
May 1991 Established the UK subsidiary, now
Sysmex UK.
Jul. 1993 Completed the Neumünster Factory, thebase for reagent production in Europe.
Mar. 1995 Signed an agreement with Dade
International, a US-based company(now Siemens) for collaboration inselling coagulation product lines.
Jun. 1995 Established a joint venture, now Jinan
Sysmex Medical Electronics, in China.
Nov. 1995 Listed stock on the Second Section of
the Osaka Securities Exchange.
Nov. 1995 Launch of the world’s first analyzer
of tangible constituents of urinethat fully automated inspections ofurinary sediments.
Jul. 1996 Listed stock on the Second Section of
the Tokyo Stock Exchange.
Oct. 1996 Hisashi Ietsugu becomes president.
Feb. 1998 Established a Singaporean subsidiary,
now Sysmex Asia Pacific.
May 1998 Signed a basic agreement with
F. Hoffmann-La Roche of Switzerland
for global collaboration in marketingand joint R&D.
Oct. 1998 Change of company name to Sysmex
Corporation to mark the 30th
anniversary of founding.
Jan. 2000 Founded a Shanghai subsidiary,
Sysmex Shanghai.

Sysmex Annual Report 2012

Mar. 2000 Promoted to the First Section of theTokyo Stock Exchange and the Osaka
Securities Exchange.
Mar. 2000 Opened Central ResearchLaboratories in the Techno Center.
Apr. 2002 Consolidated Sysmex International
Reagents as a wholly owned subsidiary through a share exchange.
Apr. 2003 Sysmex and Toshiba announce
development of minimally-invasive
blood glucose self-measurement
technology that does not require
blood sampling.
Jun. 2003 Consolidation of two local subsidiaries in the US to establish Sysmex
America. Rebuilding of the sales andsupport structure in the US.
Jan. 2004 Release for research purposes of the
GD-100, an instrument incorporating
the independently developed OSNA
method that detects cancer lymph
node metastasis in a short time.
Jan. 2004 Development of the world’s firstmulti-protein analysis chip capable ofsimultaneous measurement of activities
and amounts of up to 20 proteins.
Apr. 2004 Acquired 50.8% of the shares in CNA,
a medical data systems enterprise,and consolidated as a subsidiary.
Jun. 2004 Established the R&D bases at
the Business Support Center for
Biomedical Research Activities (BMA)
on Port Island Second Stage, offshore from Kobe.
Jan. 2005 Sysmex develops technology todiagnose the risk of post-operative
recurrence of early-stage cancer.
Apr. 2005 Introduction of the executive officer
system as a means of strengthening
corporate governance.
May 2005 Establishment of the Solution Centerin Nishi-ku, Kobe and concentration of
the marketing planning, customer
support and scientific support functions.
Nov. 2005 Stock split.
Jan. 2006 Released the XS Series, the world’s
smallest automated hematology
analyzers, which require only minutequantities of blood.
Apr. 2006 Introduction in Europe of the RD-100i
gene amplification detector for detecting
breast cancer lymph-node metastasis.
Apr. 2007 Established a Group Corporate
Philosophy, the “Sysmex Way.”Apr. 2007 Announced preparations for establishinga business presence in Austria, Slovakia,
Hungary and the Czech Republic.
Jun. 2007 Formed a global partnership with
bioMérieux for urinary screening in
microbiology.
Oct. 2007 Established a Canadian subsidiary,
Sysmex Canada.
Dec. 2007 Started supplying hematology
analyzers to animal test laboratories
operated by animal diagnostics major
IDEXX Laboratories.

Jan. 2008 Formed a commercial joint venturewith bioMérieux for the Japanesein-vitro diagnostics market.
Apr. 2008 Started direct sales and support
services in France.
Jun. 2008 Established the Dubai subsidiary
Sysmex Middle East FZ-LLC.
Oct. 2008 Renewed the new corporate logo on
the occasion of the 40th anniversaryof the Company’s establishment.
Oct. 2008 Established Technopark, Sysmex’s
core R&D base; double the size ofprevious Techno Center facilities.
Nov. 2008 First insurance coverage in Japan for
the Sysmex system for rapid detection of breast cancer lymph nodemetastasis.
Dec. 2008 The Indian joint venture Sysmex India
Pvt. Ltd. became a wholly-owned
subsidiary.
Apr. 2009 Established the Netherlands
subsidiary Sysmex Nederland B.V.
Apr. 2009 Established the Belgian subsidiary
Sysmex Belgium N.V.
Dec. 2009 Opened a reagent development basein China.
Dec. 2009 Realized a full-scale entry into the
POCT market in Germany.
Jan. 2010 Established an overseas subsidiary in
Spain to expand life science business.
Mar. 2010 Started joint research with the
National Cancer Center Hospital toverify clinical usefulness of technology
for detecting circulating tumor cells.
Mar. 2010 Established a sales and support
subsidiary, Sysmex Vietnam.
July. 2010 Launched joint business with IDEXX,
leader in pet diagnostics.
Sep. 2010 Established the Philippines subsidiary
Sysmex Philippines Inc.
Jan. 2011 Established the Russian subsidiary
Sysmex RUS LLC.
Apr. 2011 Carried out a two-for-one stock split.
Apr. 2011 Transfer of Katakura Industries Co.,
Ltd. Research Institute of Biological
Science.
May 2011 Launched the XN-series of flagshipmodels in the hematology field.
Oct. 2011 Converted company in Taiwan
to wholly owned subsidiary andreinforced sales and support services.
Jan. 2012 Began offering laboratory testing
service for research involving the riskof recurrence of early-stage breast
cancer.
Apr. 2012 Upgraded and made additions to the
new wing of Ono Factory, expanding
our Ono reagent production facility
to 1.5 times its previous level.
Apr. 2012 Renewed successful alliance in thehematology business with Roche,
extending distribution, sales andservices agreement for another 10
years.
May 2012 Decided to establish protein production center to strengthen protein
production service business.

Corporate Overview/Stock Information (As of March 31, 2012)
Sysmex Corporation

Composition of Shareholders

EstablishedFebruary 20, 1968

Number of Employees

Financial institutions
20.64%

Individuals and others
32.69%

5,324 (consolidated basis)

Financial instrument ﬁrms
1.37%

2,305 (non-consolidated basis)(Including part-time employees)

Fiscal Year

April 1—March 31

Shareholders’ Meeting

In JuneOther Japanese companies
9.76%

Number of Shares Authorized 299,344,000 shares

Foreign investors
35.54%

Number of Shares Issued

103,027,016 shares

Paid-in Capital¥9,187 million

Stock Listings

Tokyo Stock Exchange, First Section
Osaka Securities Exchange, First Section

November 1995: Listed on Osaka Securities Exchange, Second Section
July 1996: Listed on Tokyo Stock Exchange, Second Section
March 2000: Listed on Tokyo Stock Exchange, First Section andOsaka Securities Exchange, First Section
Ticker Code

6869

Transfer Agent

Mitsubishi UFJ Trust and Banking
Corporation

Independent Auditor

Deloitte Touche Tohmatsu

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

Indexes

Distribution of Shares by Number of Shares Held
Less than 1,000 shares 1.61%

More than 1,000 shares 2.57%

Number of shares: 1,661,461(6,304 shareholders)Number of shares: 2,645,478(1,251 shareholders)More than 500,000 shares 69.90%

More than 5,000 shares 1.05%

Number of shares: 72,018,688(43 shareholders)Number of shares: 1,081,063(154 shareholders)More than 10,000 shares 7.93%
Number of shares: 8,171,335(258 shareholders)More than 100,000 shares 16.94%
Number of shares: 17,448,991(74 shareholders)

MSCI Standard Index
Russell/Nomura Japan Equity Indexes
FTSE Japan Index

Principal Shareholders

DSI (Daiwa Stock Indices)

Number of Percentage ofshares held(Thousands) shareholding

Shareholders

S&P Japan 500

Stock Price Range and Trading Volume

Japan Trustee Services Bank, Ltd.

10,271

Tadako Nakatani

8,006

9.97
7.77

Nakatani Kosan, Ltd.

5,148

5.00

Tadashi Nakatani

4,990

4.84

The Master Trust Bank of Japan, Ltd.

4,964

4.82

Kazuko Ietsugu

3,062

2.97

Taeko Wada

3,062

2.97

Kenji Itani

2,500

2.43

Ryoshin Co.

2,400

2.33

GOLDMAN, SACHS & CO. REG.
(Standing proxy: Goldman Sachs Japan Co. Ltd.)

2,338

2.27

(Yen)
4,000
Common stock price range (¥)
3,000

Cash Dividends per Share and Dividend Ratio (Consolidated)

2,000

(%)

(Yen)
Tokyo Price Index close

80

1,000

60
0

4/2011 5

6

7

8

9

10

11

12 1/2012 2

3

45(Month)

34**

31.9

40

45

25

29.4
28

27.0
29.1

30

30
15
0

0
2008

2009

2010

2011

2012

* Including special dividends of ¥8 commemorating the 40th anniversary of theCompany’s founding.
** Two-for-one stock split conducted on April 2011.

6,000
4,000
2,000
4/2011 5

6

7

8

9

10

11

12 1/2012 2

3

45(Month)Sysmex Group Network

26.8

20

8,000

0

60

56
50

48*

24

(Thousands)
12,000Monthly trading volume (shares)
10,00060

Cash dividends per share
Dividend ratio
Figures adjusted for stock split

Dividend Policy
Our dividend policy is to attain a balance between investment in sustainable growth
and return to shareholders. In line with this policy, we maintain a payout ratio of 20%
on a consolidated basis.

Sysmex Annual Report 201293

Sysmex Corporation
1-5-1 Wakinohama-Kaigandori,Chuo-ku, Kobe 651-0073, Japanwww.sysmex.co.jp
This brochure was printed in Japan on FSC R-certified paper using vegetable oil ink.