IR Materials
Q4 FY03/24

May 10, 2024

NIPRO CORPORATION

Table of Contents
Business Overview
Q4 FY03/24 Results
SG&A Expenses: Major Accounts
SG&A Expenses: Additional Information
SG&A Expenses: R&D Expenses

2
3
4
5
6

Capex and Depreciation
P&L Excluding Forex Impact
Exchange Rate Sensitivity
Net Sales and Operating Profit by Segment
Segment Results – (1) Medical-Related (Domestic)
Segment Results – (1) Medical-Related (Overseas)

7
8
9
10
11
12

Segment Results – (2) Pharmaceutical-Related
Segment Results – (3) Pharma Packaging
Net Sales by Segment and Product Category
Net Sales by Segment and Region
Product Category
Net Sales by Product Category

13
14
15
16
17
18,19

FY03/25 ForecastCore KPIs in the Medium-Term Management Plan – (1)Core KPIs in the Medium-Term Management Plan – (2)

20,21
22
23

Core KPIs in the Medium-Term Management Plan – (3)Core KPIs in the Medium-Term Management Plan – (4)

24
25
26

Progress of the Medium-Term Management Plan: Core KPIs (EBITDA)
Progress of the Medium-Term Management Plan: Core KPIs (Dividend Payout Ratio)
Progress of the Medium-Term Management Plan: Core KPIs (Capex and EBITDA)

27
28

1

Business Overview
Manufacturing, Purchasing, Logistics
The new installation of dialyzer lines (India, Odate, Akita and Hefei, China) in FY03/24 is shown below.
The 4th line at the Hefei, China Plant was put in operation in March 2024. The 10th line and the 11th line at the Odate, Akita Plant will start operation in
October 2024 and April 2025, respectively.

Sales
Dialysis medical devices: Sales of dialyzers increased due to the winning of large projects in Europe and the U.S. and the spread of single-use products in Asia.
Dialysis centers multiplied in Central and South America.
Vascular-related products: Sales of drug-eluting balloons decreased due to the impact of the entry of other company into the domestic market, in which wewere dominant.
SD-related products: HeartMate 3 remained steady due to an indication expansion (the range of diseases for which the drug is said to be effective expanded).
Pharmaceuticals (own brand): Sales of the oral drug Nexium AG were robust, while sales of injections grew significantly due to higher NHI drug prices of repriced unprofitable products.
Pharmaceuticals (contract manufacturing): In Japan, sales of oral drugs fell YoY due to customers’ inventory adjustments, while those of injections increased
thanks to an increase in orders received.
Overseas, JMI Pharma enjoyed steady sales.
Pharma Packaging: In the U.S. and Europe, sales of glass tubes increased due to the yen’s depreciation and the passing on of costs to sales prices.
Growth in demand for vials in the U.S. and syringes and ampoules in Europe contributed to higher sales.

Clinical trials
There were no significant impacts on carrying out clinical trials or submitting applications for approval.

Nipro Pharma’s Odate Plant obtained U.S. Food and Drug Administration (FDA) approval for manufacturing facilities.
In respect of lyophilized antibacterial injectable formulation of lyophilized antimicrobial agent, a contract manufacturing product, the company proceeded with theestablishment of a production line for the purpose of supplying this product to the U.S. and obtained approval from the FDA for the manufacture of this productafter an onsite inspection took place in January 2024. The FDA approval of Nipro Pharma is its second after the Kagamiishi Plant.
2

FY03/24 Results
FY03/23

FY03/24

Change(¥100 million)

Net sales
Cost of sales
Gross profit (*1)
SG&A expenses
Operating profit
Ordinary profit(*2)

Profit attributable toowners of parent
Profit in accordance withIFRS (estimate)

FY03/24
Forecast as ofMay(%achievement)

FY03/24
Forecast as ofNovember(%achievement)+415.8

5,992.4

5,992.4

+7.6%

97.9%

97.9%

+337.1

4,194.6

4,199.1

FY03/25
Forecast(%achievement)

6,450.0

FY03/23

Q4

Quarterly Results
FY03/24Q1
Q2
Q3

1,272.3 1,405.9 1,452.7 1,532.7

Q41,476.5

5,451.9

5,867.8

3,817.4

4,154.6

+8.8%

99.0%

98.9%

1,634.4

1,713.2+78.7

1,797.7

1,793.3

1,925.0

30.0%

29.2%

+4.8%

95.3%

95.5%

29.8%

1,457.2

1,489.8+32.6

1,557.7

1,553.3

1,600.0

26.7%

25.4%

+2.2%

95.6%

95.9%

24.8%

177.2

223.3

+46.0

240.0

240.0

325.0

5.4%

5.2%

4.2%

5.8%

△0.0%

81.1

89.0

58.3

52.8

△ 5.1

4,525.0

3.3%

3.8%

+26.0%

93.0%

93.0%

5.0%

153.4

195.0

+41.6

206.5

206.5

276.0

2.8%

3.3%

+27.1%

94.4%

94.4%

4.3%

45.7

111.0

+65.3

112.0

112.0

158.0

0.8%

1.9%

+142.9%

99.1%

99.1%

2.4%

62.7

136.1

+73.4

133.0

133.0

182.0

+117.1%102.3%

102.3%

4.0%

886.2

975.3 1,025.3 1,070.0

1,084.0

386.1

430.6

427.4

462.7

30.3%

30.6%

29.4%

30.2%

26.6%

317.4

357.2

365.9

373.9

392.8

24.9%

25.4%

25.2%

24.4%

26.6%

68.7

73.3

61.5

88.8

△ 0.3

392.5

6.4%

6.3%

4.0%

3.4%

△0.3%

37.3

40.9

58.4

26.9

△15.2

2.9%

2.9%

4.0%

1.8%

△1.0%

*1: Impact of unrealized gains on gross profit
FY03/23:(¥680)million
FY03/24:¥470 million*2:Foreign exchange gains and losses
FY03/23:¥2,120 million
FY03/24:¥2,520 million⚫ Net sales

Drug sales in Japan increased due to strong sales of Nexium AG and an increase in NHI drug prices of injections as a result of unprofitableproduct re-pricing.
In overseas markets, sales of medical devices were weak in China, but strong in other regions. In Pharma Packaging, sales of glass tubes
grew in Europe and the U.S.
⚫ Gross profit
Gross profit margin decreased YoY due to a year-on-year increase in performance-based term-end bonuses in Japan, a rise in labor costs due
to wage increases linked to rising prices in Europe, higher depreciation costs resulting from continued capital investment, and an increase inelectricity costs.
⚫ Operating profit Operating profit increased YoY due to a decrease in transportation costs owing to a decline in container costs overseas and reduced R&D
expenses.
⚫ Ordinary profit Ordinary profit margin increased YoY as net foreign exchange gains increased by ¥430 million, and European subsidiaries recorded nonoperating expenses by application of inflation accounting in the previous year.
⚫ Profit
Despite a loss on the transfer of interests of subsidiaries of ¥1,670 million, a gain on the sale of cross-held stocks increased by ¥1,720 million.
Profit increased YoY because tax adjustments mainly from the reversal of deferred tax assets wererecorded in the previous year.

3

SG&A Expenses
FY03/23(¥100 million)

FY03/24
Actual% of Total

ChangeChange(%)

FY03/24
Forecast asof MayFY03/24
Forecast as
of

03/25
Forecast

Personnel

400.0

481.8

32.3%

+81.8

+20.5%

474.2

504.2

514.5

R&D （*1）

212.9

186.5

12.5%

△26.4

△12.4%

190.5

170.8

190.0

Transportation

210.1

140.9

9.5%

△69.2

△32.9%

186.4

140.0

176.4

Depreciation （*2）

124.6

133.8

9.0%

+9.2

+7.4%

115.3

132.0

132.8

Promotion (*3)

99.5

90.9

6.1%

△8.6

△8.6%

102.0

102.0

96.5

Travel & transportation

36.9

43.8

2.9%

+6.9

+18.7%

47.2

53.0

52.2

Storage

34.9

38.5

2.6%

+3.6

+10.3%

35.3

35.3

32.0

Other

337.7

373.3

25.1%

+35.6

+10.6%

406.6

416.0

405.6

Total

1,457.2

1,489.8

100.0%

+32.6

+2.2%

1,557.7

1,553.3

1,600.0*1: R&D expenses, experimentation and research expenses, and development amortization*2: Depreciation, goodwill amortization*3: Sales commissions, samples, advertising, and entertainment expenses⚫ Personnel expenses

Personnel expenses increased ¥8,180 million YoY due to the impact of the yen’s depreciation and a rise in thenumber of employees overseas and a year-on-year increase in performance-based term-end bonuses in Japan.
⚫ R&D expenses
R&D expenses fell ¥2,640 million YoY. The main factors are explained in the later slide.
⚫ Transportation costs
Overseas container freight costs, etc., have declined since the end of 2022. As a result, transportation costs fell
¥6,920 million YoY.
⚫ Depreciation
Depreciation increased ¥920 million YoY mainly due to license amortization of Nexium AG, etc.
⚫ Travel and transportation expenses Travel and transportation expenses grew ¥690 million YoY due to the gradual resumption of face-to-face sales
and business travel as the impact of COVID-19 eased.
⚫ Items other than the above
The main factors for the increases are explained in the next slide.

4

SG&A Expenses: Additional Information
FY03/23

ChangeChange(%)

FY03/24
Forecast as ofMay

FY03/24
Forecast as ofNovember

03/25
Forecast

5.0%
3.5%
1.8%

+5.0
+2.5
△0.2

+7.2%
+5.0%
△0.8%

62.6
60.6
19.4

67.0
51.0
7.3

99.9
61.4
15.7

% of
Total

68.9
49.0
26.5

Actual
73.9
51.4
26.3

14.4

16.2

1.1%

+1.8

+12.4%

6.7

4.5

12.4

7.3
171.6
337.7

7.6
197.9
373.3

0.5%
13.3%
25.1%

+0.3
+26.3
+35.6

+3.8%
+15.3%+10.5%

9.2
248.1
406.6

9.2
276.9
416.0

2.4
213.8
405.6

(¥100 million)

Commission expenses
Rent expenses
Taxes and dues
Provision ofallowancefor doubtful accounts
Meeting expenses
Other
Total

FY03/24● Commission expenses

Commission expenses grew ¥500 million YoY. The reasons for this were increases in cloud services forinternal use, maintenance fees for the network at the new head office, and expenses related to litigation andpatents.

● Rent expenses

Rent expenses rose ¥250 million YoY due to the relocation and expansion of logistics warehouses for
medical devices and pharmaceutical products in Japan.

● Taxes and dues

Taxes and dues decreased ¥20 million yen YoY due to a decrease in non-deductible consumption taxes.

● Meeting expenses

Meeting expenses were up ¥30 million YoY due to the resumption of face-to-face meetings as the impact of
COVID-19 eased.

5

SG&A Expenses: R&D Expenses● Medical

Down ¥310 million YoY this year because we posted clinical trial expenses related todrug-eluting stents for coronary arteries last year.

● Pharmaceutical

Down ¥2,340 million YoY due to more clinical trials being conducted in the previous year.

● PP

The cost for developing new glass products decreased ¥20 million YoY.

6

Capex and Depreciation*From this fiscal year, the presentation format of capital expenditures has been changed from an acceptance basis to a recording basis.
● CapexIn Medical-Related, capex totaled ¥33,650 million due to the recording of investments including ¥25,000 million spent on a new building for dialyzers in the Odate Plant and ¥2,750 million
injected in increasing production capacity to meet a demand increase for GLP-1.
In Pharmaceutical-Related, following the previous fiscal year, Nipro Pharma posted ¥18,500 million for the new construction of the Ohmi Plant, ¥1,600 million for an expansion of thesyringe line at the Ise Plant and ¥1,600 million for the new construction of a QC center in the Saitama Plant.
Zensei Pharmaceutical recorded ¥3,600 million for the installation of a new packaging line at the Izumi Plant, and JMI Pharma posted ¥900 million for a new production building for
injectable drugs. The total amount reached ¥31,650 million.
Pharma Packaging recorded ¥5,100 million for NPG, ¥3,000 million for NPF, ¥2,200 million for NPA, and ¥1,700 million yen for NPH, etc., totaling ¥14,450 million.
Other items included recordings of ¥4,200 million for new construction in the Saitama Pharmaceutical Research Institute and ¥1,200 million for information systems, for a total of ¥6,360
million.
● Depreciation
In Medical-Related, depreciation increased ¥6,650 billion YoY due to new recordings of investments in building a new dialyzer facility at the Odate Plant and increasing production capacityof insulin needles in response to demand growth for GLP-1.
In Pharmaceutical-Related, capex for the next fiscal year will be curbed, and an increase in depreciation too is likely to be held down.
In PP, an increase in depreciation for the next fiscal year is expected to be below ¥400 million.

7

P&L Excluding Forex Impact
FY03/23

FY03/24

Exchange rate
Impact*FY03/24
Results Excl.
ImpactChange (%)

【a】

【b】

【c】

【d=b-c】【d÷a】

Net sales

5,451.9

5,867.8+164.4

5,703.4

Cost of sales

3,817.4

4,154.6+84.8

4,069.8

Gross profit

1,634.4

1,713.2+79.6

1,633.6

（%）

30.0%

29.2%

1,457.2

1,489.8+40.6

1,449.2

Operating profit

177.2

223.3

+39.0

184.3

（%）

3.3%

3.8%

Non-operating income

73.0

89.4

Non-operating expenses

96.8

117.6

Ordinary profit

153.4

195.0

Extraordinary income

57.7

78.7

78.7

Extraordinary losses

43.4

81.6

81.6

167.7

192.1

+43.3

148.8

108.4

70.4

+15.9

54.5

13.6

10.6

45.7

111.0

(¥100 million)

SG&A expenses

Profit before tax
Income taxes
Profit attributable to noncontrolling interests

ProfitAverage Jan-Dec Jan-Dec2023
exchange rate 2022
1 USD 136.85 141.20
1 EUR 140.83 153.17
1 CNY 19.81
19.87

＋4.6%
△0.0%

28.6%
＋4.0%

3.2%
+4.3

85.1
117.6

+43.3

151.7

△1.1%

△11.3%

10.6
+27.4

83.6

＋82.9%

FY-end
rate

Mar.
2022

Jun.
2022

Sep.
2022

Dec.
2022

Mar.
2023

Jun.
2023

Sep.
2023

Dec.
2023

Mer.
2024

１USD

122.39136.68144.81132.70133.53 144.99

149.58141.83151.41

１EUR
1 CNY

136.7019.26

142.6720.38

142.3220.37

141.4719.01

145.72 157.60
19.42 19.94

158.0020.46

157.12
19.93

163.2420.83
8

Exchange Rate Sensitivity
Average exchange rate

Annual impact of a ¥1 change in exchange rate

USD

EUR

CNY

Net sales

9.1

5.3

18.9

Operating profit

0.8

1.9

10.0

(\100 million)

9

Net Sales and Operating Profit by Segment⚫ Medical-Related

Despite rising labor costs and depreciation, operating profit increased YoY due to strong salesof Nexium AG and higher NHI drug prices of re-priced unprofitable products in injections indomestic pharmaceuticals, and brisk overseas sales.

⚫ Pharmaceutical-Related

Operating profit decreased YoY due to disposal despite passing on higher costs to sales prices.

⚫ Pharma Packaging Business

Whereas net sales grew, operating profit fell YoY due to increased labor costs, raw material
costs and depreciation.
10

Segment Results – (1) Medical-Related (Domestic)● Medical devices
Net sales

FY03/23

FY03/24

Domestic business

2,168.1

2,263.6

Medical devices

1,194.8

1,156.0

Pharmaceuticals

973.3

1,107.6

FY03/24
FY03/24
ChangeForecast as of Forecast as of(Change %)May
November

+95.5
+4.4%
△ 38.8△3.2%+134.3+13.8%

FY03/25
Forecast

Net sales of dialyzers grew ¥350 million YoY due to an increase in sales of HDF
filters.

2,423.6

2,325.0

2,367.0

Sales of dialysis equipment fell ¥930 million YoY due to a decrease in the number of
installation projects.

1,314.1

1,215.5

1,194.0

Sales of infusion-related products were up ¥930 million YoY owing to price revisions.

1,109.5

1,109.5

1,173.0

Sales of testing products grew ¥490 million YoY due to an increase in the sales
volume of vacuum blood collection tubes, which had fallen because of the Shanghai
lockdown.
Sales of SD-related products grew ¥1,000 million YoY resulting from higher sales
from an indication expansion for HeartMate 3.
Sales of vascular-related products were down ¥4,750 million YoY due to the impactof other company’s entry into the domestic market for drug-eluting balloons, inwhich we were dominant. In China, net sales decreased ¥1,300 million YoY due tothe transfer of sales from a subsidiary under the domestic Medical-Related
management to a subsidiary under the overseas Medical-Related management.

● Domestic pharmaceuticals
Sales of oral drugs, mainly Nexium AG, were strong. Overall sales rose ¥6,770
million YoY despite a decrease in sales of other existing drugs due to a fall in drug
prices.
Sales rose ¥3,710 million YoY thanks to price increases for injection products likeantibiotic drugs and infusion solutions, which were classified as unprofitable andwere subject to re-evaluation.
Sales of Other and in-vitro diagnostics increased ¥1,260 million YoY due to anincrease in sales of a SARS coronavirus antigen kit launched last October.

11

Segment Results – (1) Medical-Related (Overseas)(¥100 million)

Net sales
Overseas business
B2B (other brands)

FY03/23
1,982.8
261.5

Nipro brands

1,721.2

Americas775.8Europe

370.9

Asia

306.9

China

269.2

FY03/24
FY03/24
ChangeFY03/24
Forecast as of Forecast as of(Change %)May
November+242.22,225.0
2,114.3
2,284.9+12.2%
+6.9
268.4
291.9
310.2
+2.6%
+235.4
1,956.6
1,822.4
1,974.7+13.7%
+71.6
847.4
797.6
853.8
+9.2%
+94.1
465.0
396.5
440.6
+25.4%
+68.0
374.9
357.5
396.4
+22.2%
+0.0
269.2
270.7
283.7
+0.0%

FY03/25
Forecast●B2B
Sales of insulin needles were strong due to higher demand for GLP-1 in
Europe, resulting in a ¥690 million YoY increase.

2,594.0
312.5
228.1
997.0
469.4
447.0
368.0

● Nipro brandSales of dialyzers grew ¥8,650 million YoY due to the capturing of large
projects and bids in Europe and the U.S. and an increase in demand forsingle-use products in Asia.
In the Americas, special demand for vaccine syringes ended in Canada, andsales of gloves declined due to the easing of the impact of COVID-19.
However, sales rose ¥7,160 million YoY due to the effect of the yen’s
depreciation, large projects in North America, the expansion of dialysis
centers in Central and South America, and an increase in sales of dialysate
in Mexico.
Sales in Europe increased ¥9,410 million YoY due to the yen’s depreciation,
an increase in sales of Safetouch PSV and the winning of large bids in Turkey
and others.
In Asia, sales increased ¥6,800 million YoY due to the effect of the yen’s
depreciation and higher sales of dialysis equipment and Surefuser.
In China, sales of dialysis equipment declined due to the preferential
purchasing policy of domestic equipment for public hospitals by the Chinese
authorities. However, sales stayed flat YoY due to an expansion of dialysis
centers.
12

Segment Results – (2) Pharmaceutical-Related(¥100 million)

Net sales

FY03/23

FY03/24

Pharmaceutical-Related

727.3

743.2

Generic drugs

387.3

381.3

224.6

251.2

58.9

47.4

56.4

63.0

Brand-name drugs
Long-listed drugs
OTC drugs
Active ingredients, etc.
JMI Pharma

Change(Change %)

+15.9
＋2.2%
△ 6.0
△1.5%
+26.6
＋11.8%△ 11.5△19.5%+6.6＋11.7%

FY03/25
Forecast

FY03/24 Forecast
as of May

FY03/24 Forecast
as of November

796.9

715.0

812.5

402.6

305.3

347.0

305.6

294.7

334.9

33.0

55.8

63.5

55.7

58.9

67.0

● Generic drugs
Sales of oral drugs fell ¥2,590 million YoY due to a decline in orders associatedwith customers’ inventory adjustments and the expiration of contract
manufacturing.
Sales of injections rose ¥2,500 million YoY due to an increase in orders fromhigher demand and the passing on of higher costs to sales prices.
Sales of topical formulations fell ¥500 million YoY due to a decline in orders
associated with the end of consignment of products.

● Brand-name/long-listed drugs
Sales of oral drugs fell ¥730 million YoY due to a decline in orders associatedwith customers’ inventory adjustments.
Sales of injections grew ¥3,560 million YoY due to an increase in orders fromhigher demand and the passing on of higher costs to sales prices.
Sales of topical formulations fell ¥170 million YoY due to the end of consignmentof products.

● OTC drugs, active ingredients, etc.
Sales decreased ¥1,150 million YoY as validation costs and one-time revenue
from equipment increased in the previous year.

● JMI Pharma
Sales of JMI Pharma grew 20.0% YoY on a local-currency basis due to increased
promotion to physicians and a focus on chronic disease drugs. However, they
were up only 11.7% on a Japanese-yen basis due to the effect of the yen’s
depreciation.

13

Segment Results – (3) Pharma Packaging● JapanSales of infusion-related products grew ¥640 million YoY owing to agreater market share in injection sets. Sales of needles rose ¥330
million due to an increase in sales of products for other companies.
● Overseas

Sales of ampoules increased ¥1,310 million YoY in Europe due to theimpact of a review of products sold by competitors. Sales of glass tubes
grew ¥940 million YoY due to the passing on of higher costs to sales
prices and increased orders. Sales of syringe glass rose ¥1,220 million
YoY due to an increase in sales of high-value-added sterilized syringes.
In the U.S., sales of vials were up ¥1,040 million YoY due to an increasein sales of high-unit-price products. Sales of glass tubes increased ¥730
million YoY due to the passing on of higher costs to sales prices.
In China, sales of glass tubes fell ¥150 million YoY due to a decrease insales caused by weaker demand for vaccine vials. Sales of vial glass
dropped ¥590 million YoY resulting from the gradual termination of
production and sales of low-margin vials.
In India, sales of glass tubes fell ¥370 million YoY due to customers’
inventory adjustment and termination of a contract with them.

14

Net Sales by Segment and Product Category
Segment
Product

Medical-Related

PharmaceuticalRelated

FY03/24

3,295.8

0.0

FY03/23

3,122.0

FY03/24

1,239.1

Other

Total

(¥100 million)

41.1

0.0

3,337.0

0.0

34.0

0.0

3,156.0

743.2

7.0

0.0

1,989.4

Medical devices（*1）

Pharmaceuticals

Pharmapackaging

PharmaPackaging

（*3）

（*2）

FY03/23

1,076.5

727.3

4.2

0.0

1,808.1

FY03/24

1.0

0.0

530.6

0.0

531.7

FY03/23

0.6

0.0

477.0

0.0

477.6

FY03/24

0.0

0.0

1.4

8.1

9.6

FY03/23

0.3

0.0

2.2

7.5

10.1

FY03/24

4,536.1

743.2

580.3

8.1

5,867.8

FY03/23

4,199.5

727.3

517.5

7.5

5,451.9

Other

Total

*1: In-house generic drugs*2: Contract manufacturing of pharmaceuticals*3: Needles, infusion-related products, testing products

15

Net Sales by Segment and Region● By region
Net sales were strong in all regions in FY03/24, with Japanmaking up 51.9% of net sales and overseas 48.1%.

● By segment
Regarding medical devices in Japan, sales of catheter-related
products and dialysis equipment decreased.
On the other hand, sales of pharmaceuticals grew due tostrong sales of Nexium AG and higher NHI drug prices of repriced unprofitable injection products.
In international medical devices, sales of insulin needles
increased due to the impact of the yen’s depreciation andincreased demand for dialyzers in Europe and the U.S. and for
GLP-1 in Europe.

In Pharmaceutical-Related, overseas sales of JMI Pharma weresteady.
In Japan, while sales of oral drugs fell YoY due to a decline inorders associated with customers’ inventory adjustments,
overall sales increased due to a recovery of orders forinjections.
In Pharma Packaging, sales of glass tubes grew in Europe andthe U.S. due to the effect of the yen’s depreciation and thepassing on of higher costs to sales prices.
Growth in demand for vials in the U.S. and syringes andampoules in Europe contributed to higher sales.

16Product Category

17

Net Sales by Product Category (1)Business Category(\100 million)
Medical devices

Dialyzers
Dialysis equipment
Other dialysis-related products
Dialysis-related products total
Needles
Vascular products
Infusion-related products
Testing products
Diabetes-related products
Surgical device-related products
Other products
Category Total

Pharmaceuticals Oral drugs(own brand)
Injection and infusion products
External preparations and patches
Others, in vitro diagnostics, etc.
Category Total
Regenerative
medicines

Regenerative medicine products

Overall
FY03/23

863.0
224.9
465.8

FY03/24

Overseas

Change Change % FY03/23

952.8 ＋89.7 +10.4%
238.6 ＋13.7 +6.1%
544.8 ＋79.0 +17.0%

639.8
139.7
383.7

FY03/24

Japan

Change Change % FY03/23

725.8 ＋85.9 +13.4%
162.6 ＋22.9 +16.4%
460.4 ＋76.7 +20.0%

FY03/24

Change Change %

486.3
351.7
181.2
119.8

477.1
△9.2 △1.9%
309.9 △41.7 △11.9%
216.8 ＋35.5 +19.6%
122.4＋2.6 +2.2%

326.0
70.0
69.3
84.8

311.2 △14.7 △4.5%
63.8△6.2 △8.9%
89.0 ＋19.6 +28.4%
85.0＋0.1 +0.2%

223.1 227.0＋3.8 +1.7%
85.1
75.9
△9.2 △10.8%
82.1
84.4
＋2.3 +2.8%
390.4 387.3 △3.0 △0.8%
160.2 165.8＋5.5 +3.5%
281.6 246.1 △35.5 △12.6%
111.9 127.8 ＋15.8 +14.2%
34.9
37.4
＋2.4 +6.9%

89.0
72.2
297.9

113.3 ＋24.3 +27.4%
86.4 ＋14.2 +19.7%
267.2 △30.6 △10.3%

75.8
15.3
182.5

98.8 ＋23.0 +30.4%
19.5＋4.2 +27.9%
158.2 △24.3 △13.3%

13.2
56.8
115.4

1,553.7 1,736.2 ＋182.5 +11.7% 1,163.3 1,348.9 ＋185.5 +16.0%

14.5
66.8
109.0

＋1.3 +10.3%＋9.9 +17.6%△6.3 △5.5%

3,152.2 3,329.8 ＋177.6 +5.6% 1,987.3 2,174.7 ＋187.3 +9.4% 1,164.9 1,155.1△9.7 △0.8%

432.8
482.0
66.5
95.1

500.6 ＋67.8 +15.7%
554.9 ＋72.8 +15.1%
68.5＋2.0 +3.0%
115.0 ＋19.8 +20.9%

1,076.5 1,239.1 ＋162.6 +15.1%

3.8

7.1

＋3.3 +85.9%

0.4
100.0
2.9

0.5
＋0.1 +30.0%
128.3 ＋28.2 +28.3%
2.7△0.1 △6.8%

432.4
381.9
66.5
92.1

500.1 ＋67.7 +15.7%
426.5 ＋44.5 +11.7%
68.5＋2.0 +3.0%
112.2 ＋20.0 +21.8%

103.4 131.6 ＋28.2 +27.3% 973.1 1,107.5 ＋134.4 +13.8%
-

-

-

-

3.8

7.1

＋3.3 +85.9%

18

Net Sales by Product Category (2)Business Category(\100 million)

FY03/24

Change Change % FY03/23

477.6 531.7 ＋54.1 +11.3% 399.1 449.0 ＋49.9 +12.5%

Pharmaceuticals Oral drugs(JMI Pharma)
Injection and infusion products
Category Total
Glass tube-related products
Glass ampoules
Glass vials
Glass syringes
Rubber stoppers and plugs
Plastic containers
Thermos bottles

Sales of production machineryand real estate leasing

Consolidated Total

10.1

9.6

△0.4 △4.7%

0.7

Japan

Change Change % FY03/23

Category Total

Category Total

0.4
1.4
0.5
0.6
3.0
55.9
0.4
56.4
94.9
67.0
151.8
61.1
5.7
0.0
18.4

FY03/24

Other products

Others, in vitro diagnostics, etc.

Other

FY03/23

Overseas310.5 277.5 △33.0 △10.6%
270.6 333.9 ＋63.2 +23.4%
48.1
42.0
△6.0 △12.6%
45.8
33.7 △12.0 △26.3%
675.1 687.2 ＋12.1 +1.8%
55.9
62.3
＋6.4 +11.4%
0.4
0.6＋0.1 +35.0%
56.4
63.0 ＋6.5 +11.6%
117.7 129.7 ＋12.0 +10.2%
67.2
81.9 ＋14.7 +21.9%
168.8 177.2＋8.3 +4.9%
61.4
73.1 ＋11.7 +19.1%
17.9
18.5
＋0.5 +3.3%
18.4
18.4
0.0 +0.0%
4.2
5.6＋1.4 +34.0%
21.7
26.9
＋5.2 +24.0%

Pharmaceuticals Oral drugs(contract
Injection and infusion products
manufacturing) External preparations and patches

PharmaPackaging

Overall

FY03/24

Change Change %0.4
0.0 △2.8% 310.0 277.0 △33.0 △10.7%
4.4＋3.0 +205.7% 269.1 329.4 ＋60.2 +22.4%
0.4
0.0 △13.8%
47.6
41.6
△6.0 △12.6%△2.4△3.1 △496.8%
45.1
36.2
△8.9 △19.7%＋2.8 △0.2 △6.7% 672.0 684.3 ＋12.3 +1.8%
62.3＋6.4 +11.4%
0.6＋0.1 +35.0%
63.0 ＋6.5 +11.6%
106.8 ＋11.8 +12.5%
22.7
22.9
＋0.1 +0.7%
81.7 ＋14.7 +21.9%
0.1
0.2
0.0 +31.6%
158.4＋6.6 +4.4%
17.0
18.7
＋1.6 +9.9%73.0 ＋11.9 +19.5%＋0.3
0.1△0.1 △47.8%
5.7
0.0 △0.2%
12.2
12.8＋0.6 +5.0%
0.0
0.0 +86.1%
18.4
18.4
0.0 △0.0%
4.2
5.6＋1.4 +34.0%
23.2＋4.8 +26.1%
3.2
3.6＋0.4 +12.4%

0.4△0.2 △37.0%

78.4

82.6

＋4.1 +5.3%

9.3

9.1

△0.2 △2.2%

5,451.9 5,867.8 ＋415.8 +7.6% 2,550.2 2,821.8 ＋271.6 +10.7% 2,901.7 3,046.0 ＋144.2 +5.0%

19FY03/25 Forecast - (1) Medical-related business● Net sales
With regard to medical devices in Japan, we will continue passing higher costs on to sales prices ofgeneral consumables and attempt to gain market shares in main products and expand and reinforce acomprehensive medical network system. In respect of vascular-related products, we forecast sales toincrease ¥3,800 million YoY in expectation of a sales recovery due to an indication expansion for drugeluting balloons and stronger sales of PTCA balloons.
Regarding pharmaceuticals in Japan, sales of Nexium AG itself will remain strong despite a NHI pricerevision. We will further revise the sales mix and put new products on market, thereby improving theearning power. Due in part to reinforcement of shipping capacity, sales are expected to increase¥6,540 million YoY.
In the Americas, a significant increase is expected due to the renewal of a contract for dialyzers for amajor U.S. dialysis provider.
The new line at the Odate Plant is now in operation, ensuring sufficient supply capacity. Together withthe launch of new dialysis machines on the market, this business will be a market that drives sales inthis fiscal year. We expect a YoY sales increase of ¥14,960 million.
In Europe, we will expand business by placing stronger sales of high-added value products at thecore. Although sales are expected to slightly increase ¥450 million YoY, a significant sales increase isforecast in the overall European market, including the growth of the B2B business.
In Asia, we position this region as our key strategic market and forecast a YoY increase in sales of¥7,210 million as a result of expanding and reinforcing dialysis-related products, hospital products,
and infection control products.

In China, sales volumes are expected to increase due to accommodating the move to centralizedpurchasing of dialysis-related products. Sales are forecasted to grow ¥9,880 million YoY partly due toan expansion of dialysis centers.
Overall, we plan to significantly increase domestic and international sales, especially overseas, basedon the reinforcement of production capacity.

● Operating profit
While making progress in passing surging costs of raw materials on to sales prices, we will vigorously
drive cost reductions. We forecast operating profit to increase YoY by boosting the earnings power
and improving operating profit margin by means of shifting to high-added-value products andimproving productivity, coupled with production capacity reinforcement.

20

FY03/25 Forecast - (2) Pharmaceutical-Related and Pharma
Packaging Business● Net sales
Sales of GE products are expected to decrease ¥3,430 million YoY due to a new contract of
new pharmaceuticals.
In brand-name/long-listed drugs, sales are forecasted to grow ¥8,370 million due to a newcontract of pharmaceuticals.
In OTC drugs, active ingredients, etc., sales are forecasted to increase ¥1,610 million YoYprimarily due to validation and an increase in one-time revenue from equipment.
In JMI Pharma, sales are forecast to increase ¥400 million YoY through stepping up
promotions to physicians and focusing on chronic disease drugs.

● Operating profit
Operating profit margin is expected to improve by passing a cost increase from surging raw
materials on to sales prices of products.

● Net sales
In the Japanese market, net sales are forecasted to grow ¥930 million YoY due to continued
increases in high-added-value devices and material-related items.
In Europe, we expect net sales to increase ¥3,820 million YoY in anticipation of stronger
sales of D2F syringes in Germany and glass tubes in France.
In the U.S., net sales of vials and glass tubes will rise, associated with their production
capacity increase. Net sales are expected to grow ¥630 million YoY as customers’ inventory
adjustments will run their course.
In China, net sales are forecasted to decrease ¥2,360 million YoY as we will proceed withliquidating a joint subsidiary following Jilin in the previous year.

● Operating profit
Although net sales are expected to grow, an increase in operating profit will be limited due
to higher labor costs and higher expenses for equipment maintenance such as cold repair.
Operating profit is forecasted to remain mostly unchanged.

21Core KPIs in the Medium-Term Management Plan - (1)Guidelines for FY03/25
Sales growth rate
Operating profit margin(¥100 million)

Annual average of 7.0% or more
9.0% or more

Net sales and operating profit margin

FY03/21(Base year)

FY03/22

FY03/23
Net sales

FY03/24

FY03/25
Full-year forecast

Net debt (net interest-bearing debt)
EBITDANet debt/EBITDA multiple(¥100 million)

Maintain around ¥450.0 billion
Aiming for a level of ¥100.0 billion or more
4× level

Net debt and net debt/EBITDA multiple

FY03/21

FY03/22

FY03/23

FY03/24

Operating profit margin➢ Sales growth rate
The growth rate for FY03/24 was 7.6% YoY, exceeding the planned value. In domestic pharmaceuticals,
strong AG sales and higher NHI prices for injections boosted sales. In overseas medical equipment,
contract renewals in North America, bid wins in Europe, and increased single-use demand in Asia led tohigher sales. In pharma packaging, increased demand in North America and Europe boosted sales.
In FY03/25, the Company aims to achieve a sales growth rate of 9.9%. Expanding sales of dialysis
products and needles for GLP-1 formulations in North America will contribute to the growth. In Asia andChina, increasing sales through expanding dialysis products and dialysis centers will contribute to thegrowth.

➢ Operating profit margin
In FY03/24, overseas shipping rates decreased, and R&D expenses were curbed. However, the profit
margin was 3.8% due to increased labor costs. The target of 9.0% was not achieved.
In FY03/25, the profit margin is expected to improve to 5.0% due to stronger sales of high-profit products
such as dialysis products, dialysis centers, and injection needles, but the target of 9.0% will not bereached.

Net Debt➢ Net interest-bearing debt

EBITDA(times)

FY03/25
Full-year forecast

Net Debt/EBITDAIn FY03/24, net interest-bearing debt increased to ¥530.4 billion, exceeding the target of ¥450.0 billion and notmeeting it. The main reason is that investment CF amounted to ¥87.3 billion due to the addition of new dialyzer
lines, acquisition of dialysis centers, construction of new pharmaceutical plants, and addition of glass container
facilities in Europe and North America.
In FY03/25, the Company aims to reduce net interest-bearing debt to ¥474.6 billion through inventory reduction,liquidation of receivables, fire insurance for the Odate Plant, asset sales, etc.

➢ EBITDAIn FY03/24, earnings before interest taxes, depreciation and amortization (EBITDA) increased ¥15.0 billion YoY to¥81.2 billion due to improved operating profit.
In FY03/25, the Company aims to raise EBITDA to ¥95.1 billion from further improving operating profit.

➢ Net debt/EBITDA multiple
In FY03/24, net debt increased, but an improvement in EBITDA reduced the multiple to 6.5×.
In FY03/25, the Company aims to achieve 5.0× by reducing net debt and increasing EBITDA.

Core KPIs in the Medium-Term Management Plan - (2)Guidelines for FY03/25
EPS (earnings per share)
ROE

Aiming for ¥200 or more
14.0% or moreinvestment efficiency

Turn free cash flow positive

Cash Flows(¥100 million)

EPS･ROE(¥)

FY03/21

FY03/22

FY03/23EPS➢

FY03/24

FY03/25
Full-year forecast

FY03/21

FY03/22

FY03/23

FY03/24

Operating CF

Investment CFFree CFROE

ROE

In FY03/24, profit increased YoY due to higher operating profit and an
improvement in the effective tax rate YoY, despite extraordinary loss from thedissolution of a joint venture of a subsidiary. EPS recovered to ¥68.12 andROE was 5.1%.
In FY03/25, EPS and ROE are expected to improve to ¥96.88 and 6.8%,
respectively, with a further increase in profit due to insurance fees and asset
sales, in addition to an increase in operating profit. However, the Company is
not expected to reach the targets of the Medium-Term Management Plan for
FY03/25 of ¥200 in EPS and 14.0% or more in ROE.

➢

FY03/25
Full-year forecast

Free CFIn FY03/24, operating CF improved to ¥73.2 billion, but investment CF was ¥87.3
billion, much higher than budgeted. As a result, free CF was a deficit of ¥14.1
billion.
In FY03/25, free cash flow is expected to improve significantly to ¥35.1 billion
and become profitable. Becoming profitable is a target of the Medium-Term
Management Plan. The measures for improving free cash flow will be anincrease in operating profit, liquidation of receivables and reducing inventories,
increasing operating CF through insurance fees, and reducing investment CF by
selling assets and receiving subsidies from factories.

Progress of the Medium-Term Management Plan: Core KPIs
(Sales Growth/Operating Profit Margin)➢

The Company’s planned sales growth rate was 7.0% on average per year compared with 2019. As a result, the plan was expected to be achieved with an average annual growth rate of
7.8%.
In terms of growth by business segment, the domestic business was almost in line with the plan, while the overseas and pharma packaging businesses were well above the planned
8.0%. On the other hand, the pharmaceuticals and vascular businesses fell short of the plan. Sales of dialyzers in Europe, the U.S., China, and Asia, as well as dialysis equipment salesin Latin America, were the main reasons for the strong sales growth in the overseas business. In the pharma packaging business, sales of vials for vaccines increased due to special
demand for COVID-19 after 2020. In addition, sales of glass tubes and vials for biopharmaceuticals in the U.S. and Europe increased significantly. The vascular business is expected tofall short of the plan due to a drop in sales caused by the COVID disaster, and the launch of a new competing product, despite increased sales in China. In the pharmaceuticals
business, sales declined in FY03/21 due to earthquake damage at the oral drug plant. Although sales recovered in FY03/22, they have been flat due to the termination of contracts forunprofitable products caused by quality problems at other companies and inventory adjustments. The planned figure is not expected to be achieved.

➢

Operating profit margin is expected to reach 5.0% in FY03/25. No year exceeded the planned value of 9.0%, peaking at 6.1% in FY03/21. It remained below the plan due to the spread of
the COVID-19, inflation, and other factors.
By business segment, the overseas business exceeded the planned value of 9.0%, except for FY03/23, despite the burden of overseas container costs in the COVID-19 disaster. The
pharmaceuticals business experienced a decline in profitability rate in FY03/23 and FY03/24 due to higher costs from inflation and a weaker yen. However, it is expected to show arecovery trend in FY03/25.

Guidelines for FY03/25
Growth potential

Sales growth rate

Annual average of 7.0% or more

Profitability

Operating profit margin

9.0% or more

Sales growth rate and operating profit margin

FY03/21

Sales growth rate

FY03/23

FY03/24

FY03/25(Budget)2019-2024
CAGR

Difference between
planned and actual
forecast CAGR

FY03/25(Plan)

Domestic business

+2.1%

+4.1%

+6.5%

+8.6%

+7.5%

+5.7%

+5.0%

+0.7%

Overseas business+4.2%+13.4%+18.9%+12.2%+16.6%+12.9%

+8.0%

+4.9%

Vascular business

+5.1%

+9.2%

+9.2%

△15.5%△14.2%△1.9%+15.0%△16.9%

Pharmaceutical business

△2.6%

+8.5%

△2.2%

+2.2%

+9.3%

+2.9%

+5.0%

△2.1％

Pharma packaging business+6.7%+19.9%+11.6%+12.2%+6.5%+11.3%

+8.0%

+3.3%

+132.0%△24.1%+38.6%+39.3%+60.0%+40.5%+2.4%+38.1%

Total

+2.9%

+8.6%

+10.2%

+7.6%

+9.9%

+7.8%

+7.0%

+0.8%

Total

6.1%

4.8%

3.3%

3.8%

5.0%

ｰ

ｰ

ｰ

Regenerative medicines business

Operating profit
marginFY03/22

Progress of the Medium-Term Management Plan: Core KPIs
(ROE)➢

ROE is expected to be 6.8% in FY03/25. Since FY03/21, ROE has not exceeded the planned value of 14.0% in any year. The figures of 9.2% and 7.8% in
FY03/21 and FY03/22 were outliers due to the decrease in shareholders’ equity caused by the loss in FY03/21. ROE hit a bottom of 2.3% in FY03/23 and has
been improving since FY03/24.
ROE of 6.8% for FY03/25 fell short of the planned value of 14.0% because profit was expected to be ¥15.8 billion and fell short of the planned value of ¥45.6
billion by ¥29.8 billion. This means that operating profit is expected to be ¥32.5 billion and fall short of the planned value of ¥64.1 billion by ¥31.6 billion.
The Company aims to expand operating profit and further increase ROE in the future.

Guidelines for FY03/25
Capital efficiency

ROE

FY03/21
OperatingprofitNon-operating
expenses(income)
Extraordinary
loss (income)Corporate tax,
etc.
Profit(Planned value)(Planned value)¥100 million

Comparison by fiscal year of operating profit and other accounts

14.0%(Budget)Shareholders’equity*ROE

FY03/22

FY03/23

FY03/24

FY03/25(budget)FY03/25(plan)

Difference between
plan and budget

276.3

238.8

177.3

223.4

325.0

641.0

△ 316.0△ 13.6△ 30.6△ 23.8△ 28.3△ 49.0△ 4.0△ 45.0△ 87.5△ 43.4

14.3

△ 2.9

10.0

△ 18.0

28.0

24.8

81.8

108.4

70.5

118.0

149.0

△ 31.0

142.1

134.6

45.7

111.1

158.0

456.0

△ 298.0

1,549.1

1,731.3

1,957.8

2,194.9

2,321.2

3,257.1△935.9

9.2%

7.8%

2.3%

5.1%

6.8%

14.0%

△7.2％

*Shareholders’ equity is the average during the period, calculated as (beginning of period + end of period) / 2

Progress of the Medium-Term Management Plan: Core KPIs
(EBITDA)➢Net debt is expected to be ¥474.6 billion due to increased interest-bearing debt associated with increased capex. It will exceed the plan of ¥450.0 billion andfall short of the target.
The amount has been increasing in excess of the planned amount of ¥450.0 billion since FY03/22, but is expected to decrease in FY03/25.

➢

To obtain EBITDA of ¥100.0 billion, operating profit was planned to be ¥64.1 billion, and depreciation, including goodwill, was planned to be ¥51.8 billion.
However, the forecast is ¥95.1 billion because operating profit will not be achieved, although depreciation was ¥60.0 billion.

➢

The net debt/EBITDA multiple is expected to be 4.99×, and the 4× level is expected to be achieved.
Five-year guidelines starting in FY03/21
Net debt (net interest-bearing debt) Maintain around ¥450.0 billion
EBITDA
Aiming for a level of ¥100.0 billion or more
Net debt/EBITDA multiple
4× level

Net debt, capex(¥100 million)

6,000
5,000

4,189

4,527

4,476

4,689

5,110

5,304
4,746

3,000

(times)

4,000
3,000

4,000

7.7

776

0
20 (planned value)

706

473

737

960

861

1,000

6.3

6.1

6.7

8.0

6.5
5.0

3.6

2,000

2,000
1,000

Net debt, net debt/EBITDA multiple(¥100 million)

686

1,159

4.0
710

700

665

'20

'21

'22

812

951

0.0
2020

Net Debt

'20

'21
Capex

'22

2.0

624
0

’24 (planned value)

6.0'23 ’24 (budget)(plannedvalue)(plannedvalue)’24’24(planned(plannedvalue)'23(budget)(budget)value)EBITDA
profit)EBITDA(operating(operating
profit)’24’24

EBITDA(depreciation)(depreciation)
EBITDA

Progress of the Medium-Term Management Plan: Core KPIs
(Dividend Payout Ratio)➢

The dividend policy in the medium-term management plan was to decrease the dividend payout ratio by 1% each year from 37% in FY03/21 to 35% in FY03/23 and to maintain it
thereafter.
The Company planned to raise EPS to ¥200 in FY03/25, which would have resulted in a dividend of ¥70. However, the budgeted dividend for this fiscal year is ¥32, which is
expected to fall short of the target.
In FY03/23, the Company was affected by inflation and the yen’s depreciation associated with the COVID disaster. EPS fell to ¥28 as profits declined significantly due to higher
raw material, energy, and overseas logistics costs, overseas inflation accounting, and the tax effects of loss-making subsidiaries. However, the Company increased its dividend
payout ratio to 78.4% and set the dividend amount at ¥22. In FY03/24, the Company changed its dividend policy. It unified the basic dividend profit to consolidated profit,
maintained a dividend payout ratio of 35%, and set the minimum annual dividend amount at ¥25.
The Company will continue to strive for stable dividends by growing sales activities and increasing profits through cost efficiencies.
Dividend
resource ratio

Profit as the basis for dividends
×

BeforeFY03/22

Consolidated profit 75% + Non-consolidated profit 25%

FY03/2375% of consolidated profit before income taxes+
25% of non-consolidated profit before income taxes

FY03/24

Effective tax rate
Dividend payout
ratio
Annual dividend (¥)

FY03/22

FY03/23

FY03/24(¥)

EPS, Annual dividend
24.5%
70

×

Consolidated profit
FY03/21

×35%

Five-year guidelines starting in FY03/21
The target dividend payout ratio is 37.0% in FY03/21, 36.0% in FY03/22, and 35.0% in
FY03/23. For FY03/24 and beyond, the rate will be maintained at 35.0%.
*The source of the dividend shall be the sum of 75.0% of consolidated profit and 25.0%
of non-consolidated profit.

35%

FY03/25(Budget)

14.2%

35.2

64.6

36.7

41.0

32.1%

32.7

78.4

36.7

35.0

28

27

22

* 25

32

*Dividend per share is set at a minimum of ¥25 per year, aiming for a stable dividend

200

27

88.9

‘20
’24
(planned value) (planned value)’24 (budget)
EPS

Annual dividend

Progress of the Medium-Term Management Plan: Core KPIs
(Capex and EBITDA)➢

The medium-term management plan stated that the Company would generate ¥441.7 billion EBITDA from ¥320.0 billion capex over five years, EBITDA would be
1.38 times capex, and the EBITDA/capex average annual growth rate would be 6.7%. In the results, capex over the five years was ¥388.8 billion and exceeded
the plan by about ¥70.0 billion. In addition, EBITDA was ¥383.8 billion, and it is expected that the plan will not be achieved by about ¥60.0 billion.
Against increased capex to meet the growing demand for dialyzers, operating profit growth was sluggish due to increased capital construction costs caused byinflation and the impact of rising raw material and energy costs. That was a factor in why the EBITDA target was not achieved.
Going forward, the Company will continue to select investments to improve return on investment and increase EBITDA and operating CF.

¥100 million

2015–2020
ActualPlan

2020–2023 Actual+2024 Forecast

MedicalCapex
EBITDA

1,367

1,680
2,324

1,958
2,433

Pharmaceutical

Capex
EBITDA

980

920
1,506

1,153
1,115

Pharma Packaging

Capex
EBITDA

340

300
359

606
384

Cellular Medicine

Capex
EBITDA

69

300
228

263
△94

Total

Capex
EBITDA

2,756

3,200
4,417

3,888
3,838

*Business seeds are allocated to each segment as they are mainly laboratory
expenses●MedicalConducted aggressive investments, such as dialyzer production line expansion and acquisitionof overseas dialysis centers.
With the effect of a weak yen, in particular, the higher overseas sales and profit contributed tothe increase in EBITDA. However, this segment is not expected to generate EBITDA equal toincreased capex as domestic medical equipment failed to boost profit.
■Pharmaceutical
For both own-brand and contract manufacturing, the Company made a capital investment of¥115.3 billion to expand sales. However, EBITDA is expected to reach ¥111.5 billion, fallingshort of the target. EBITDA includes ¥82.3 billion of depreciation and ¥29.2 billion of operating
profit. The Company expects EBITDA to increase due to improved profits as a result of efforts
to strengthen the quality control system.
■Pharma Packaging
Operating profit increased significantly due to special demand for the COVID disaster.
Therefore, capital investment was doubled over the five years from the original plan to capture
sales demand; however, the EBITDA obtained is expected to be slightly higher than originallyplanned. In the future, the Company aims to increase its profit margin by expanding sales
further and obtain the target figure for EBITDA.
■Cellular Medicine
During the two years of the COVID disaster, it was difficult to administer STEMIRAC because
priority was given to patients with severe disease. Therefore, the Company could not generate
the originally planned sales and profit. The Company will obtain sales and profit by submitting
applications for formal approval in 2025 and expanding the number of affiliated hospitals. By
doing so, the Company aims to obtain the target figure for EBITDA.

Forecasts and other forward-looking statements in this document are based on
information currently available to the Company and certain assumptions that
the Company believes to be reasonable.
Actual results may differ materially from those described in this document due
to various factors that may arise in the future.

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