Second Quarter Business Resultsfor Fiscal 2021

November ８, 2021
President and Representative Director, CEO

Terukazu Kato

Today‘s agenda
１．２Q Business Results for FY2021 Overview
２．Domestic Business
３．Chinese Business
４．ESG／Sustainability
５．FY2021 ForecastToday‘s agenda
１．２Q Business Results for FY2021 Overview
２．Domestic Business
３．Chinese Business
４．ESG／Sustainability
５．FY2021 Forecast

Second Quarter Business Results for FY 2021
（ Million yen ）FY 2021
2Q Plan(Before Revision＊)

FY 2021
2Q Results

Achievement
rate

YoY

FY 2020
2Q Results

AmountChange59,40063,416106.8％

56,952＋6,464＋11.4％

Domestic

55,500106.0％

54,475＋4,353＋8.0％

Overseas

3,900

58,8294,587

117.6％

2,476＋2,110＋85.2％

Operating
Profit

8,700

11,684134.3％

10,920

＋763

＋7.0％

Net sales(14.6％)（Operating Profit Margin）(18.4%）(19.2％)

Ordinary
Profit9,000

13,409149.0％

10,909＋2,499＋22.9％

Profitattributable

6,900

9,965

144.4％

8,002＋1,963＋24.5％

to owners of parent＊In the “Notice of Revision of Earnings Forecast” on October 29, we have revised and announced the second quarter earings forecast as net sales of 63,400 million
yen, operating profit of 11,600 million yen, ordinary profit of 13,400 million yen, and net profit attributable to owners of parent of 9,900 million yen.

0.4%

Ratio to total sales

88.9%
Prescription Kampo Products

Other prescription pharmaceuticals

2.7%
8.0%

Healthcare

External sales by consolidated subsidiaries

4Key Points in Performance
Sales and profits increased due to growth in domestic and overseas sales.
Net sales

63,416

million yen

Achievementrate＋106.8% YoY＋11.4%◼ Domestic sales totaled 58,829 million yen, increased 11.4% year-on-year.
◼ Sales of the 129 prescription Kampo products totaled 56,377 million yen, increased 7.7% year-on-year.
◼ Sales of healthcare products including OTC Kampo medicines totaled 1,713 million yen, increased 24.4% year-on-year.
◼ Overseas sales totaled 4,587 million yen, increased 85.2% year-on-year.

Operating profit

11,684

Operating profit
margin18.4%◼

million yen

Achievement
rate
Comparison with theplan at the start of
the fiscal year

+134.3%

YoY

+7.0%

+3.8ptYoY(0.8)pt

The expense-to-sales ratio was 48.4%, a climb of 1.3pts year-on-year, mainly impact of increased depreciation burden due tooperation of Ibaraki 3rd SD building, and external sales in China.
In comparison with the plan at the start of the fiscal year, the expense-to-sales ratio increased 0.3pt.

◼

The SG&A ratio totaled 33.1%, a decline of 0.6pt year-on-year. In comparison with plan at the start of the fiscal year, the SG&A
ratio dropped 4.1pts, mainly due to decrease in personnel expenses and impact of R&D expenses.

Ordinary profit◼

13,409million yen

Achievement
rate+149.0%

YoY+22.9%The impact of the 2Q foreign exchange gain: 1,184 million yen
Previous 2Q foreign exchange loss: 485 million yen Mainly affected by foreign exchange gains and losses.

Net profit attributableto owners of parent

9,965

million yen

Achievement
rate+144.4%

YoY+24.5%
5

Factors Triggering Changes in Operating Profit (YoY)（ Million yen ）（846）+3,419（ Million yen ）Changes in sales : ＋3,419 Breakdown
Domestic＋2,303

Overseas＋1,116

Changes in cost-to-sales :(846) Breakdown
Sales composition（1,809）（Domestic）

Crude drug cost（Domestic）＋377

Processing cost etc(663)（Domestic）

11,684

10,9202Q FY 2020
Operating profit＋127

Outside sales in China（Overseas）(676)

Changes in SG&A expenses:(1,809) Breakdown

Profit impact due Profit impact due
to changes into changes incost-to-sales
sales

Profit impact
from changes in
SG&A expenses

2Q FY 2021
Operating profit

Sales-related expense(551)

R&D expense(270)

Salary allowance

(267)

Other

(721)

6

Financial Condition/Cash Flow Position（ Million yen ）FY 2020(March 2021)

FY 2021
2Q

ChangeEquity ratio

68.3％

68.2％

△0.1ptCurrent assets
Non-current assets

Total liabilities
Current liabilities
Non-current liabilities

Merchandise andfinished goods
Work in process
Raw materials andsupplies

80,755
13,93913,39653,41987,104
10,073
14,04362,9886,349△3,865646
9,568

Investing activities

Inventories

ChangeOperating activities(March 2021)

FY 2021
2Q

＋21

672

596

Cash and cash equivalents at
beginning of period

FY 2020△27

Cash and cash
equivalents at end of
period16,817
14,303
2,514
4,346△4,556
8,902
12,471△36

Impact of exchange ratetranslations

335,881
218,576
117,304
90,24043,824
46,416245,640+118

Financing activities

Total net assets

319,063204,273
114,789
85,894
48,38037,513
233,169

Total assets（ Hundred million yen ）7

Today‘s agenda
１．２Q Business Results for FY2021 Overview
２．Domestic Business
３．Chinese Business
４．ESG／Sustainability
５．FY2021 Forecast

Comparison with the Prescription Pharmaceutical Market
Overall
FY 2020

FY 2019

10.0%
6.0%

Prescription pharmaceutical market
Tsumura2.0%(2.0)%(YoY/drug price basis)
FY 2021

7.9%

8.9%
2.9%

5.9%

2.3%

1.6%
0.6%

1.2%

1.4%

(2.5)%(10.0)%

2Q

3Q

2.2%

4Q

1Q

5.0%

FY 20203.8%(5.1)%
2Q

FY 2021

9.1%

7.6%

2.0% 1.6% 2.1% 1.8%

3Q

4Q

(5.0)%

8.7%
9.0%
6.0%

0.7%2.3%(1.0)%(3.3)%(3.2)%(2.9)%(5.4)%
3Q

4Q

1Q

2Q

3Q

(3.0)%
4Q

Increase in the number of doctors newly
writing prescriptions owing to
e-promotions X MR interviews and briefings

2Q

4.5%

FY 2021

2.7%

4.7%

4.3%
(0.3)%(1.7)%(1.4)%

0.0%(3.0)%

1Q

FY 2020

3.0%(6.0)%
2Q

2Q

10.5%

12.0%

(10.0)%
1Q

1Q

FY 2019

3.4% 2.3%

0.0%

0.6%

（2Q only：+3.5pt）

Hospital market (HP)

7.1%

10.0%

＋4.5pt4.2%(1.9)% (1.0)%

General clinics (GP)FY 2019

Gap with market

1.5%
2.5%

0.2%

(6.0)%

1Q

1.2%

7.7%

(0.3)%
1Q

1.4%
2Q

1.6%
3.1% 3.4%

0.1% (0.2)%(1.5)%(2.4)%(1.9)%(4.8)%
3Q

4Q

1Q

2Q

3Q

6.4%

4Q

1Q

2Q

Trending toward recovery owing to the fortification of
e-promotions given ongoing visitation restrictions
Copyright © 2021 IQVIA. Estimated based on IQVIA JPM Apr.2019-Sep.2021. Reprinted with permission

9

COVID-19 Related Symptoms and Prescription Opportunities
Diseases for which prescription +1.16 billion yen
opportunities have increased
PsychiatricdisordersAnxiety and insomnia
accompanying a change inthe external environment

Kamishoyosan
Kamikihito
Hangekobokuto
Saikokaryukotsuboreito
Total sales for six
formulations

Dizziness

Skin diseases

Dizziness due to physical andpsychiatric disorders

Acne and dermatitis due tothe use of masks

Hangebyakujutsutenmato
Ryokeijutsukanto(Goreisan)*Keishibukuryogankayokuinin
Jumihaidokuto
Seijobofuto
Keigairengyoto

Diseases for which prescription
opportunities have decreased(60) million yen
Commoncold-related
Decrease in the number of
respiratory disease patients
due to infection prevention
measures

Kakkonto
Maobushisaishinto
Shosaikoto
Shosaikotokakikyosekko
Keishito
Total sales for sevenformulations

Supplements
Prescription group, including Kampo used to treat a deterioration in healthconditions, including post-illness fatigue, loss of appetite and decline in stamina

Hochuekkito

Juzentaihoto* Goreisan prescription opportunities
are also increasing for treatment inareas other than dizzinesstherefore it has been excluded
from the basis of calculations

Bakumondotosales have been
positive from 2Q(YoY)(Amount: YoY, Shipping Base)A sequelae outpatient clinic for COVID-19 has been established, and Kampo is prescribed for the following symptoms.
➡Symptoms continuing after being infected with COVID-19 (Fatigue, malaise, shortness of breath, anxiety, sleep disorder, etc.)
10Sales of Drug-fostering Program Formulations/Growing
Formulations（ Million yen ）Netsales Product No./formulation nameRanking

FY 2020
2Q

FY 2021
2Q

YoY

4,790
3,720
3,557
1,736
678
14,482
3,741
2,680
2,426
2,415
1,531
12,794+62+4.3%+1,071+9.1%

Total sales for 119 formulations other than drug-fostering
program and growing formulations

26,81029,100+2,290+8.5%

Total sales for 129 prescription Kampo products

52,34356,377+4,033+7.7%

Drug-fostering
program formulations

4,663
3,542
3,360
1,610
633
13,810
3,543
2,249
2,310
2,150
1,468
11,722

1

100

Daikenchuto

3

54

Yokukansan

4

43

Rikkunshito

8107

Goshajinkigan

24

14

Hangeshashinto

Total sales for drug-fostering program formulations

Growing formulations2

41

Hochuekkito

517

Goreisan

6

68

Shakuyakukanzoto

7

24

Kamishoyosan

1029

Bakumondoto

Total sales for growing formulations

+126

+2.7%

+177

+5.0%

+196

+5.8%

+126

+7.8%

+44

+7.1%

+671

+4.9%

+197

+5.6%

129
prescription+430 +19.2%

Drug-fostering program+115

formulations+5.0%+264 +12.3%* The 2020 results have been rearranged to the amount after applying new accounting revenue recognition standards.

Ratio to total sales

25.7%
Growing formulations

22.7%

119 formulations other thandrug-fostering program andgrowing formulations

51.6%

11

Three Important Domains of Sales Activities◼

Positioned geriatric health; cancer (supportive care) and women’s health as the three important domains andaim to concentrate our activities in these domains◼

We plan to deploy a sales approach in the drug-fostering program formulations, growing formulations andthree important domains

Psychiatric andneurological disorders
D

YokukansanD+ related
formulations

D

Digestive systemdiseases

Respiratory diseases

Rikkunshito

G Bakumondoto

G

Peripheral symptoms forcirculatory disorders

G

Daikenchuto(supportive care)

Women’shealth domain

Mitigation of side effects, etc.

Diseases specific to womenCancer domain

Geriatric health domain+ related
formulations

Hochuekkito+ related
formulations

D

Rikkunshito

D

HangeshashintoD

GoshajinkiganD+ related
formulations

Goshajinkigan

G

Hochuekkito

Kamishoyosan+ related
formulations+ related
formulations

Peripheral symptoms
for frailty

GoreisanG

Other diseases and symptoms
D

Daikenchuto

G

Goreisan+ related
formulations+ related
formulations

D

Drug-fostering program formulations

G Growing formulations

12

New initiatives in the geriatric health domain
Geriatric heart failure
Increase in geriatric heart failure in the elderly withthe advent of a super-aging

Peripheral symptoms forcirculatory disorders(Geriatric heart failure)

Goreisan growth rate
(main clinical departments)
130%

128%

125% 126%

123% 122%

128%

118%
115%

Edema, diarrhea, dizziness (Goreisan)G

G Growing formulations

Cardiology

Drug-fostering program formulations

Digestive system

D

Quantity

Obstetrics/gynecology

High

Orthopedics

Constipation (Mashiningan)

Psychiatry

Edema with chills in the limbs (Goshajinkigan) D

Neurosurgery

D

General surgery

Bloating (Daikenchuto)

D

ENT

Loss of appetite (Rikkunshito)

General internal medicine

Loss of appetite with marked fatigue(Hochuekkito) G

Low(YoY: Actual sales/quantity basis)
13

A survey revealed that 80% of females are “concealing their patience”
Work or perform household chores while enduring a disorder

34.3%
Frequently

Being patient

79.2%

44.9%
Sometimes

14.9% 5.9%

Rarely#OneMoreChoice projectNot at all

Top 10 disorders endured even if felt (Multiple choice)

1st

Fatigue/sluggishness

23.8%

2nd

Irritability

16.2%

3rd

Anxiety

15.6%

4th

PMS (premenstrual syndrome)

13.7%

5th

Difficulty falling asleep, do not wakeup feeling good, light sleep, insomnia

11.6%

6th

Chills11.3%

7th

Headache

11.2%

8th

Menstrual pain, menstrual irregularity,
abdominal pains before and after
menstruation

11.0%

9th

Disorders difficult to describe in words

10.9%

10th

Constipation

10.7%

Survey by Tsumura

Overall (n=10,000)

69th Asahi Advertising Award in the quasi drug, cosmetics and toiletries category
70th Nikkei Advertising Awards in the food, pharmaceuticals and daily goods
category: Award for Excellence
2nd Nikkei Women Empowerment Advertising Awards: Nikkei Special Award

14

Ongoing initiatives in the women’s health domain
Kampo formulations corresponding to the female life cycle(Shipping / Amount base)

Major Kampo
products that areprescribed for
symptoms uniqueto women

2Q FY2020
YoY

Tokishakuyakusan

Prescription
Kampo Products

Anemia, fatigue, menopause,
menstrual irregularity, menstrual
difficulties, etc.

Tokishakuyakusan+12.6%

Kamishoyosan+12.3%

Keishibukuryogan+8.7%

Kamishoyosan
Keishibukuryogan
Endometritis, menstrual irregularity,
Menstrual difficulties, menopause, etc.

Psychiatric and neurologicaldisorders, including anxiety
Menopause, menstrualirregularity, etc.
15

Implementing e-promotions
Delivering information to 330,000＊
clinical physicians(times)Video streaming

Online lectures (Division plan only)

fiscal year
FY 2019

Digestive system domain
Geriatric health domain
Respiratory disease domain
Other (general)

FY 2020

Digestive system domain
Geriatric health domain
Sensitivity to cold
Respiratory disease domain
Psychiatric disorder domain
Other (cancer, general)

FY 2021
Includingscheduled

Digestive system domain
Psychiatric disorder domain
Geriatric health domain(supplements)
Respiratory disease domain
Women’s health domain
Orthopedics domain
Other (cancer, dizziness)

30

20

10

0
FY 2019

FY 2020

FY 2021 Including events scheduled

Event theme

Web lectures that are lots of viewing by hospital doctors (HP)※source:「About doctor‘s supply and demand estimation」（Ministry of Health, Labour and Welfare）
https://www.mhlw.go.jp/stf/shingi2/0000203370.html

16Effect of e-promotions,400,000

Improving awareness of Kampo information byintroduction of various digital tools
Detailing impact※

MR activies

e-promotion

40％
Expand video
streaming,200,000

1,200,000cases

Open medical site
Introduce my MR-kun

Regularly holdWeb lectures

400,000cases

0

FY2019/1H

FY2019/2H

FY2020/1H

FY2020/2H* Grasped from Internet surveys taken of doctors
Number of information recognition cases from each channel, including MR activities and Internet

FY2021/1H

Forecast for
FY2021/2H

INTAGE Healthcare Inc. survey (Tsumura Internet impact) 17

Increase in prescription opportunities
Increase in doctors using Kampo owing toinitiatives to promote use, mainly e-promotions
Number of doctors who
newly prescribed Kampo*1

7,000people*

About

3

Number of doctors for which
there was an increase inprescription use*2

15,000people*

About

3

*1：Confirmed number of doctors converted from non-prescribing to Kampo prescribing doctors*2：Confirmed number of growth in prescriptions written by doctors already writing Kampo prescriptions*3：Increase up to September 30, 2021, starting from April 1, 2021

Survey by Tsumura
18

Today‘s agenda
１．２Q Business Results for FY2021 Overview
２．Domestic Business
３．Chinese Business
４．ESG／Sustainability
５．FY2021 ForecastFuture Outlook for the China Business

Aim to become a traditional Chinese medicine company that is trusted
by the citizens of China by promoting Ping An Tsumura brand products
Traditional Chinese medicine market [approx. 10 trillion yen]
Products for general consumers

Raw material
crude drugs anddrug pieces

Existing
markettraditional
Existing market
for fortraditional
ChineseChinesemedicalproducts
medical products(approx.
9,000
formulations)(approx. 9,000
formulations)[approx.

[approx. 7 trillion yen]

3 trillion yen]

Prescriptions listed in the
Pharmacopeia of the PRC(approx. 1,600 prescriptions)[approx. 7 trillion yen]

Prescriptions originatedfrom classical prescriptions(approx. 300 prescriptions)Classical prescriptions not yet launched(Seven prescriptions issued in advance from among
100 prescriptions exempt from clinical testing)

Products for
doctors

classical prescription
Chinese medicines(prescriptions listed in old
Chinese medical books)
Chinese medical books)

Creating markets
and customers
Prescription acquisition
through M&A
Expansion with newquality design
Create a new market bylaunching development
20

Information on conducting a briefing

Long-term Business Vision 2031 andSustainability Vision 2050
Date

Late March 2022 （Scheduled for 90 minutes）
Program details■ Sustainability Vision 2050

■ Long-term Business Vision 2031 (Domestic Business／China Business)■ Ｒ＆Ｄ Policy／Strategy
■ Q&A
21

Today‘s agenda
１．２Q Business Results for FY2021 Overview
２．Domestic Business
３．Chinese Business
４．ESG／Sustainability
５．FY2021 Forecast

Tsumura Group materiality
Upgraded Tsumura Group Materiality from both aspects of“Resolve social issues through business” and “Reinforce business foundations"
Strengthen

Deepen23

Activities pertaining to ESG and sustainability
Activity 1: Reduce greenhouse gas (GHG) emissions

Activity 2: Other sustainability activities[Production/crude drug
processing/storage facilities]

96,486(1) Further promote energy-saving(solar power, etc.)(2) Energy conversion (hydrogen, etc.)(3) Introduce renewable energy(t-CO2)

Group GHG emissions(CO2 equivalent)

Reductionof 50%[Head office & branches/sales
offices, etc.]
 Optimization, mainly of each site
and vehicles

Carbon Neutral
FY 2020

2030

2050
24

Activities pertaining to ESG and sustainability

Activity 1: Reduce greenhouse gas (GHG) emissions
Activity 2: Other sustainability activities
Continue to be a company
that is the most sensitive tochanges in the naturalenvironment and risks
Pursue a cycle that returns
everything including not
only crude drugs but also
water and air to nature

Protect nature, returnto nature25

Disclosure of climate-related financial information
On October 1, 2021, Tsumura endorsed the Task Force on Climaterelated Financial Disclosures (TCFD)
Based on the "Task Force on Climate-related
Financial Information (TCFD) Final Report," four
disclosure items (governance, strategy, risk
management, indicators and goals) will beconsidered as management issues, and policy
planning and disclosure will be implemented.

Executive Review Meeting with External Experts(Photo: FY2021) Extraction of Business Risks andOpportunities Due to Climate Change.
Director study group, including third-party experts

Plan to establish the Sustainability Vision 2050, with the FY 2022 as the first year
26

System pertaining to ESG and sustainability
In October 2021, established a Sustainability Committee, chaired by the Co-COO, Director⚫ The committee receives instruction on direction from the Board of Directors, determines policy,
concrete goals, measures and other actions, and reports progress to the Board.
⚫ The committee is monitored by the Board of Directors and reflects the opinions and advice of theBoard into sustainability promotion activities.

Board of Directors
Instructions on
policy/oversight

ReportSustainability Committee

Sustainability Committee
Chairperson:
Vice chairperson:

Committee members:

Instruction/
oversight

ReportExecutive office:

Co-COO, Director
DivisionExecutive Officer General
Manager of Production Headquarters
CFO, Director, Operating officer,
General manager of each division/
Department head
Sustainability Promotion Office（Newly established in October 2021）

Executive officeSustainability Promotion OfficePlanning proposal, implementation and management27

Today‘s agenda
１．２Q Business Results for FY2021 Overview
２．Domestic Business
３．Chinese Business
４．ESG／Sustainability
５．FY2021 Forecast

Revision of earnings forecast FY 2021
（ Million yen )Original plan
(before revision)
2021.5.11

Net sales

Revised Plan
2021.10.29

Compared to theoriginal plan
Amountrate

122,500

127,500＋5,000＋4.1%

Domestic

113,700

117,800＋4,100＋3.6%

Overseas

8,800

9,700

＋900

＋10.2%

Operating profit

19,50021,100＋1,600＋8.2％

Ordinary profit

20,00023,400＋3,400＋17.0%

Profit attributable

14,20016,600＋2,400＋16.9％

to owners of parent

Original plan
(before revision)

Dividend (per share)

EPS
ROE

￥64
¥185.60
6.4%

Revised Plan

￥64
￥216.97
7.4%

Third medium-term
management plan
FY2019 - FY2021

Net
Sales

Over

1,200million
Over

Operating
Profit190million

ROE

Over 6%

Numerical targets after applying
revenue recognition standards(Note) The above forecasts were prepared based on the information available as of the date of publication of this presentation. Accordingly, the impact of risks that cannot be predicted at this time, including the impact on socio-economic activities
from the further spread of COVID-19, have not been factored in. Actual earnings performance may differ from the forecasts stated herein owing to various factors going forward. We will disclose trends and conditions in a timely and proper mannershould there be any changes in the circumstances surrounding our company.

29

Shareholder Returns
Policy◼ We aim to improve our corporate value by continually expanding our Kampo businessand through growth investments in the China business, and by building foundations.
Accordingly, we plan to implement stable dividends, taking into account factors such as
medium/long-term profit levels and cash flow conditions.
45.0%

100

80

28.4%

32.1%

35.9% 35.7%

31.9% 33.5%

35.6%

40.0%

31.9％ 29.5％

25.0%

30.0%

60

40

35.0%

25.0%

32

32

32

32

32

32

32

32

32

32

15.0%

20

From Oct. to Mar.

20.0%

From Apr. to Sept.

10.0%

30

32

32

32

32

32

32

32

32

32

0

5.0%

Dividends payout ratio

0.0%

2012

2013

2014

2015

2016

2017

2018

2019

forecast
2020 2021
2021

Note: The FY 2021 year-end dividend and payout ratio (forecast) are an estimate based on the assumption that thedividend resolution is approved at the 86th Ordinary General Meeting of Shareholders.

30Inquires about these materials

Corporate Communications Dept.
Investor Relations Groupinvestor_madoguchi@mail.tsumura.co.jp
Cautionary items regarding forecasts⚫ The materials and information provided in this presentation contain so-called forward-looking statements.
Readers should be aware that the realization of these statements can be affected by a variety of risks anduncertainties and that actual results could differ significantly.
⚫ Changes in Japan or other foreign countries related to healthcare insurance systems or regulations set by
medical treatment authorities on drug prices or other aspects of healthcare or in interest and foreignexchange rates could negatively impact the Company’s performance or financial position.

⚫ In the unlikely event that sales of the Company’s core products currently on the market be halted or shouldsales substantially decline due to a defect, unforeseen side effect or some other factor, there could be a major
impact on the Company’s performance or financial position.
31

appendix

FY2021 Forecast (Compared Medium-term Management Plan）
Applying new accounting revenue recognition standards to

The 3 rd Medium-Term Management Plan (2019-2021)
FY2021
Numerical goals

FY2021
Numerical goals
Apply new accounting revenue
recognition standards

FY2021
Forecast
After Revision

127.5

Net Sales

Over 135.0
billion yen

Over 120.0
billion yen

Operating
ProfitOver 19
billion yen

Over 19
billion yen

billion yen

ＲＯＥOver 6 %Over 6 %7.4%

billion yen

21.1

33

Drug-fostering program formulations andGrowing formulations
Looking at the recent structure of disease, the Company
has selected certain diseases in fields where medical
treatment needs are high that are difficult to treat with
Western drugs and that Kampo products havedemonstrated special efficacy for. The Company will
establish a base of scientific evidence related to treatingthese diseases with Kampo medicine.

A growth driver that aims to be listed in medical
treatment guidelines as a strategic formulation following
the five “drug fostering” program formulations throughthe establishment of scientific evidence (data on safety,
efficacy, etc.) in fields where satisfaction toward
treatment and the contribution of medicine are low.

Drug-fostering program
formulations

Growing formulations

Daikenchuto

Hochuekkito

Yokukansan

Shakuyakukanzoto

Rikkunshito

Bakumondoto

Goshajinkigan

Kamishoyosan

Hangeshashinto

Goreisan34

Diagram of Corporate Group Ties
as of the end of September 2021

Tsumura100％

Tsumura China Inc. established December 2016
56％
100％

100％

63％

Tianjin Tsumura
Pharmaceuticals Co., Ltd.*2
established in March 2018

Shanghai Tsumura
Pharmaceuticals Co., Ltd.
established in July 2001

Kampo powdered extracts
Manufacturing oftraditional Chinese medical
products

Manufacturing of Kampo
powdered extracts

Ping An Tsumura Inc. established June 2018
80％

51％

Ping An Tsumura
Pharma Inc.*1
equity acquisition in March
2020

97.65％
Shenzhen Tsumura
Medecine Co., Ltd.
established in March 1991
Procurement, selection and processing, andstorage of raw materials for crude drugs andcrude drug pieces (drug pieces)
Raw material crude drugs and crude drug
pieces (drug pieces)
Sales in China

100％

China MEDICO Corporation
equity acquisition in March
2020

Pingcun Zhongying(Hebei)Pharmaceuticals Ltd.
established in June 2019

Procurement, selection and processing,and storage of raw materials for crude
drugs and crude drug pieces (drugpieces)Raw material crude drugs and crude
drug pieces (drug pieces)
Sales in China

Cultivation, procurement,
selection and processing, andstorage of raw materials for
crude drugs*1: In August 2020, changed name to Ping An Tsumura
Pharma Inc. from Tianjin China Medico Technology
Co., Ltd.
*2: In April 2021, changed name to Tianjin Tsumura
Pharmaceuticals Co., Ltd. from Tsumura Shengshi

Pingcun (Shenzhen)
Medical Ltd.
established in April 2019Pharmaceutical sales and sales of foodproducts, including raw ginseng andYakushokudogen products

Formulation platform

Pharmaceuticals Co., Ltd.

Crude drug platform

Newly added subsidiaries in and after 201935

Scale of the Traditional Chinese Medicine Market in China
Traditional Chinese
medical products

Crude drug pieces

193.3 billion yuan(about ¥3 trillion)(Domestic production value)
about ¥3.5 billion*

FY 2019652 billion
yuan(about ¥10.2 trillion)

458.7 billion yuan(about ¥7.2 trillion)(Domestic production value)

about ¥179.5 billion*

Exchange rate: ¥15.7/yuan(as of the end of December 2019)

Source: National Bureau of Statistics of China, Ministry of Industry and Information Technology (MIIT)*Source: Production statistics, including for Kampo formulations, Japan Kampo Medicine Manufacturers Association

Terminology

Definition

Corresponding terminology for Kampo
medicine(Meanings are not always the same)

Chinese medicine

Medicines used in traditional Chinese medicine (traditional
Chinese medical products, drug pieces, etc.)

Kampo, crude drug pieces, crude drugs

Drug pieces

Same meaning as crude drug pieces, Use as a decoction

Crude drug pieces

Traditional Chinese
medical products

Drugs in the form of granules, pills or other shapes based on thetheories of traditional Chinese medicine(Manufacturing of classicalprescription Chinese medicine
complex formulations )(Drugs in the form of granules, pills or other shapes based on old
traditional Chinese medical books)

Kampo extract formulations, crude drug
production(Kampo extract formulations)36