Summary of Consolidated Financial Statements
for the Second Quarter of the Term Ending March 31, 2020(Japan GAAP)
November 6, 2019
Name of Listed Company: TSUMURA & CO.
Exchange: Tokyo Stock Exchange
Code:
4540
URL:
https://www.tsumura.co.jp
Representative:
President, Representative Director and CEO
Name: Terukazu Kato
Contact:
Head of Corporate Communications Dept.
Name: Yosuke Tsuchiya
Telephone: 81-3-6361-7100
Scheduled date of submission: November 7, 2019
Scheduled date of dividend payment commencement: December 4, 2019
Preparation of supplementary materials for the quarterly financial statements: Yes
Holding of the quarterly results briefing: Yes (for institutional investors, securities analysts and news media)(Figures are rounded down to the nearest one million yen.)

1.

Consolidated business results for the second quarter of the term ending March 31, 2020
(From April 1, 2019 to September 30, 2019)(1) Financial results (year to date)(Figures in percentages denote the year-on-year change.)

Net sales
Six-month period ended
September 30, 2019
Six-month period ended
September 30, 2018

Operating profit

Profit attributable toowners of parent

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%

60,802

4.3

9,776

9.2

9,856

3.0

7,037

(0.6)

58,268

(0.0)

8,950

(0.4)

9,566

3.4

7,082

7.1

(Note) Comprehensive income： Six-month period ended September 30, 2019: 2,993 million yen［(58.4)%］
Six-month period ended September 30, 2018: 7,197 million yen［(0.8)%〕

Profit per share

Fully diluted profit per share

Six-month period ended
September 30, 2019
Six-month period ended
September 30, 2018

Yen

Yen

92.03

－

92.63

－

(2) Consolidated financial conditions
Total assets

Shareholders’ equity ratio

Net assets

Million yen

Million yen%

287,010287,322

206,839
206,141

70.6
70.2

As of September 30, 2019
As of March 31, 2019

(Reference) Shareholders’ equity: As of September 30, 2019: 202,562 million yen

2.

As of March 31, 2019: 201,816million yen

Dividends
Dividend per share
End of Q1

End of Q2

End of Q3

End of FY

Total

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2019

－

32.00

－

32.00

64.00

Year ending March 31, 2020

－

32.00
32.00

64.00

Year ending March 31, 2020
(Projection)(Note)Revisions to dividends projection published most recently: No

3.

Projections of consolidated business results for the term ending March 31, 2020
(From April 1, 2019 to March 31, 2020)(Figures in percentage show the rate of increase or decrease from the previous fiscal year for full-year)

Net sales
Million yen

Full-year

125,000

Operating profit% Million yen

3.4

17,000(Note)Revisions to dividends projection published most recently: No

Profit attributable toowners of parent

Ordinary profit% Million yen(8.2)

18,000% Million yen(8.6)

12,300

Profit per share%

Yen(15.7)

160.81

Notes(1) Important changes of subsidiaries during the term(change of specified subsidiaries that lead to a change in the scope of consolidation): No(2) Application of special accounting practices in consolidated quarterly financial statements preparation: Yes(Note) For details, see “2. Quarterly Consolidated Financial Statements and Key Notes (4) Notes to the Quarterly Consolidated
Financial Statements (application of specific accounting treatment to the preparation of quarterly financial statements)” on
page 10 of the material attached hereto.
(3) Changes in accounting principles and procedures and the method for indication, etc.
1) Changes associated with the revision of accounting principles, etc.: No
2) Change other than 1):
No3) Accounting estimate change:
No4) Retrospective restatement:No(4) Number of shares issued (common stock)1) Number of shares issued at the end of theterm(including treasury stock) (shares)

FY 3/2020 2Q

76,758,362

FY 3/201976,758,362

2) Number of treasury stock at the end of theterm(shares)

FY 3/2020 2Q

249,881

FY 3/2019

300,631

3) Average number of shares during the term
(shares)

FY 3/2020 2Q

76,472,210

FY 3/2019 2Q

76,457,973* This Summary of Quarterly Consolidated Financial Statements is exempt from quarterly review procedures.
* Explanation about the proper use of financial projections and other important notes(Note about forward-looking information)
In these materials, earnings forecasts and other statements about the future are forward-looking statements based on the information
currently available and certain assumptions that the company regards as reasonable. Accordingly, the Company cannot makepromises to achieve such forecasts. Actual financial results may differ materially from these forecasts depending on a number ofimportant factors. Please see “1.Qualitative information on quarterly results (3) Description of projections of consolidated businessresults” on page 3 for information regarding the forecast of consolidated financial results.

○Contents of accompanying materials

1.Qualitative information on quarterly results ···························································································

2(1) Description of operating results ··································································································

2(2) Description of financial condition ·······························································································

3(3) Description of projections of consolidated business results ···································································

3

2.Quarterly Consolidated Financial Statements and Key Notes ·······································································

4(1) Quarterly Consolidated Balance Sheets ·························································································

4(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income ····

6

Quarterly Consolidated Statements of Income
For the Second Quarter Consolidated Accumulative Term···································································

6

Quarterly Consolidated Statements of Comprehensive Income
For the Second Quarter Consolidated Accumulative Term···································································

7(3) Quarterly Consolidated Statements of Cash Flows ·············································································

8(4) Notes to the Quarterly Consolidated Financial Statements ····································································

10(Notes on premise of a going concern) ··························································································

10(Notes on case of extreme change in shareholder's equity amount) ··························································

10(Application of specific accounting treatment to the preparation of quarterly financial statements) ······················

101

1. Qualitative information on quarterly results(1) Description of operating results
In the first half under review, net sales rose 4.3% year on year, to 60,802 million yen.
Looking at profit, operating profit was 9,776 million yen (up 9.2% year on year), ordinary profit was 9,856 million yen (up 3.0% year
on year), and profit attributable to owners of parent was 7,037 million yen (down 0.6% year on year). The cost-to-sales ratio rose 0.5
percentage points year on year. In addition, the cost-to-SGA ratio fell 1.2 percentage point year on year. As a result, the operating
profit margin rose 0.7 percentage points year on year, to 16.1%.
[Consolidated business results](Unit: million yen)
FY 3/2019 2Q

Year-on-year change

FY 3/2020 2Q(ratio of change)

Net sales

58,26860,802

2,533
4.3％

Operating profit

8,950

9,776

826
9.2％

Ordinary profit

9,566

9,856

290
3.0％

Profit attributable to ownersof parent

7,082

7,037

(44)
(0.6)％Net sales of overall prescription Kampo products grew 4.2% year on year. To expand the Kampo market and establish its presence
there in a sustained manner, which is a strategic challenge adopted in the Medium-Term Management Plan, the Company has
positioned geriatric field, cancer domain (supportive care) and Gynecology field as three important domains. The Company has been
active in providing information on matters focused on five “Drug fostering” program formulations*1 and five “Growing”
formulations*2.
Net sales for Daikenchuto, a “Drug fostering” program formulation that is a staple item for the Company, decreased 1.5% year on year
in the first quarter, but increased 0.7% year on year in the first half under review. Aiming to enhance sales in the future, the Company
will fully implement activities for providing information in the hospitals market and strengthen its actions for winning new markets byfocusing on a sense of abdominal flatulence, the treatment of which is assumed to show a low degree of satisfaction among
constipation symptoms in the practitioner market.
Net sales grew solidly for Rikkunshito, another “Drug fostering” program formulation, and Bakumondoto and Goreisan, both of whichare “growing” formulations. In other formulations, net sales increased favorably for Ninjin’yoeito.
Demand for Kampo medicine is increasingly diversifying among health care professionals. The Company will continue its activities
for providing appropriate information on subjects, including evidence in basic and clinical medicine, clinical practice guidelines inwhich Kampo products are described, and the proper use of Kampo medicine based on Kampo diagnosis, positioning meetings with
doctors, presentations for medical institutions and Kampo medicine seminars as the basis for those operations.
*1 five “Drug fostering” program formulations:
Formulations the Company is addressing by looking hard at the structure of diseases in recent years, targeting diseases that are
difficult to treat with new drugs for which prescription Kampo preparations prove specifically effective in domains where demand for
medical treatment is high, and calling the establishment of evidence “drug fostering”*2 five “Growing” formulations:
Growth drivers aimed at registration in clinical practice guidelines as strategic formulations after five drug fostering program
formulations by constructing evidence (such as data on safety and effectiveness) in domains where the degree of satisfaction withmedical treatment and the degree of drug contribution are low2(2) Description of financial condition
The financial position at the end of the first half under review was as follows:
Total assets at the end of the first half under review decreased 312 million yen from the end of the previous fiscal year, to 287,010
million yen. Current assets decreased 2,349 million yen from the end of the previous fiscal year mainly due to a decline i n cash anddeposits, while inventories increased. Non-current assets increased 2,036 million yen from the end of the previous fiscal year chiefly
attributable to a rise in investment and other assets, while investment securities declined due to a fall in share prices.
Total liabilities were 80,170 million yen, a decrease of 1,010 million yen from the end of the previous fiscal year. Current liabilities
decreased 97 million yen from the end of the previous fiscal year mainly due to a decline in other in current liabilities, despite anincrease in income taxes payable. Non-current liabilities declined 912 million yen from the end of the previous fiscal year.
Net assets were 206,839 million yen, an increase of 697 million yen from the end of the previous fiscal year. Shareholders’ equity rose
4,742 million yen from the end of the previous fiscal year mainly due to an increase in retained earnings. Accumulated othercomprehensive income decreased 3,996 million yen from the end of the previous fiscal year chiefly attributable to a decrease indeferred gains or losses on hedges. Non-controlling interests declined 47 million yen from the end of the previous fiscal year.
As a result, the equity ratio rose 0.4 percentage point, to 70.6%.
Cash flows in the first half under review were as follows:
At the end of the first half under review, cash provided by operating activities was 8,696 million yen, cash provided by investing
activities was 4,739 million yen, and cash used in financing activities was 2,529 million yen.
Cash provided by operating activities was 8,696 million yen. Looking at the breakdown, the major cash inflow item was profit before
income taxes of 9,837 million yen, while the major cash outflow item was decrease (increase) in inventories of 5,342 million yen.
Compared to the first half of the previous fiscal year, cash inflow increased 4,217 million yen.
Cash provided by investing activities was 4,739 million yen. Looking at the breakdown, the major item was decrease (increase) intime deposits of 14,226 million yen. Compared to the first half of the previous fiscal year, cash inflow increased 9,273 million yen.
Cash used in financing activities was 2,529 million yen. Looking at the breakdown, the major item was dividends paid of 2,447
million yen. Compared to the first half of the previous fiscal year, cash outflow decreased 14,993 million yen.
As a result, cash and cash equivalents increased 10,556 million yen from the end of the previous fiscal year, to 66,800 million yen.
(3)Description of projections of consolidated business results
The projections of consolidated business results for the fiscal year ending March 31, 2020, which were published on May 9, 2019,
remain unchanged.

3

2. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheets(Unit:Million yen)
As of March 31, 2019
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Other
Accumulated depreciation
Total property, plant and equipment

As of September 30, 201972,24044,524
9,382
11,12531,29921,459(4)

68,38942,955
7,258
13,49335,974
19,611(4)

190,027

187,678

64,80085,673(76,769)

64,48888,927(79,038)

73,70374,377

Intangible assets
Investment and other assets
Investment securities
Retirement benefit asset
Other
Allowance for doubtful accounts

872

1,144

15,642
1,934
5,143
(0)

13,862
2,173
7,773
(0)

Total investment and other assets

22,71923,81097,29599,331

287,322

287,010

Total non-current assets
Total assets

4

(Unit:Million yen)
As of March 31, 2019
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Income taxes payable
Provision for sales returns
Other

As of September 30, 2019

6,267
10,314
2,101
10
14,626

6,383
10,3142,991
913,524

Total current liabilities

33,32033,222

Non-current liabilities
Bonds payable
Long-term borrowings
Retirement benefit liability
Other

30,000
9,376
74
8,410

30,000
9,376
73
7,498

Total non-current liabilities

47,861

46,948

Total liabilities

81,18180,170Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares

30,142
14,027
149,740(815)

30,142
14,041
154,331(677)

Total shareholders’ equity

193,095

197,838

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans

5,697
740
2,673
(313)
(76)

4,463
(973)
2,673
(1,339)(99)

Total accumulated other comprehensive income

8,721

4,724

4,324

4,276

206,141

206,839

287,322

287,010Non-controlling interests
Total net assets
Total liabilities and net assets5(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income / For the Second Quarter Consolidated Accumulative Term
(Unit:Million yen)Six-month period ended
September 30, 2018
(From April 1, 2018
to September 30, 2018)

Six-month period ended
September 30, 2019
(From April 1, 2019
to September 30, 2019)

Net sales
Cost of sales

58,26823,53660,802
24,893Gross profit

34,73235,908Selling, general and administrative expenses

25,782

26,132

Operating profit

8,950

9,776

129
124

315
133

35

－

Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains

319

－

Other
Total non-operating income
Non-operating expenses
Interest expenses

136
745

104
552

87

63

－

39

－
41
129
9,566

237
132
472
9,856

0
324

2
0

325

2

0
46

1
20

Share of loss of entities accounted for using equity method
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets

46

21

Profit before income taxes

Total extraordinary losses

9,844

9,837

Income taxes

2,575

2,729

Profit

7,268

7,108

Profit attributable to non-controlling interests
Profit attributable to owners of parent

6

186

70

7,082

7,037

Quarterly Consolidated Statements of Comprehensive Income / For the Second Quarter Consolidated Accumulative Term
(Unit:Million yen)Six-month period ended
September 30, 2018
(From April 1, 2018
to September 30, 2018)
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans,net of tax
Share of other comprehensive income (loss) of entities
accounted for using equity method
Total other comprehensive income (loss)

Six-month period ended
September 30, 2019
(From April 1, 2019
to September 30, 2019)

7,268

7,108

1,254
182
(1,515)33(1,233)(1,714)(1,135)
(23)

(26)

(8)

(71)

(4,115)Comprehensive income

7,197

2,993

Comprehensive income attributable to
Owners of parent
Non-controlling interests

7,120
76

3,040
(47)

7

(3) Quarterly Consolidated Statements of Cash Flows(Unit:Million yen)Six-month period ended
September 30, 2018
(From April 1, 2018
to September 30, 2018)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Share of loss(profit) of entities accounted for using equity
methodLoss (gain) on sales and retirement of property, plant andequipment
Decrease (increase) trade receivables
Decrease (increase) in inventories
Increase (decrease) trade payables
Loss (gain) on sales of short-term and long-term investment
securities
Decrease (increase) in retirement benefit asset
Increase (decrease) in retirement benefit liability
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of short-term and long-term investment securities
Proceeds from sales and redemption of short-term and longterm investment securities
Purchase of investments in capital of subsidiaries
Loan advances
Collection of loans receivable
Other
Net cash provided by (used in) investing activities

8

Six-month period ended
September 30, 2019
(From April 1, 2019
to September 30, 2019)

9,844
3,146
(0)
(254)
87

9,837
3,243
(0)
(448)
63

(35)

39

45

19

1,555
(1,152)
1,073

1,550
(5,342)
204

(324)

(0)

(193)
2
(6,266)
7,528
286
(94)
(3,241)
4,479

(280)
6
1,266
10,157475(62)(1,873)8,696(1,000)(6,049)1(194)(3,806)

14,226(6,065)
4(335)(21,127)

7,501

21,121

(952)
(1)
1
(33)
(4,534)(2,996)
(0)
1
(88)
4,739

(Unit:Million yen)Six-month period ended
September 30, 2018
(From April 1, 2018
to September 30, 2018)

Six-month period ended
September 30, 2019
(From April 1, 2019
to September 30, 2019)

Cash flows from financing activities(15,000)

Repayments of long-term borrowings
Dividends paid to non-controlling interests
Dividends paid
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period(2,446)(54)(22)(17,523)(720)(18,299)
78,31360,0149－(2,447)(56)(25)(2,529)(349)
10,55656,24366,800(4) Notes to the Quaterly Consolidated Financial Statements(Notes on premise of a going concern)
No relevant items.
(Notes on case of extreme change in shareholder's equity amount)
No relevant items.
(Application of specific accounting treatment to the preparation of quarterly financial statements)(Deferment of cost variance)
Cost variance caused by seasonal changes in operation rates, etc. is expected to be eliminated for the most part by the end of the costaccounting period, which is, therefore, deferred as “current assets (other) or current liabilities (other).”10