Summary of Consolidated Financial Statements for the Fiscal Year Ended March 2018
(Japan GAAP)May 10, 2018
Name of Listed Company: TSUMURA & CO.
Exchange: Tokyo Stock Exchange
Code:
4540
URL:
http://www.tsumura.co.jp
Representative:
Position: President & Representative Director
Name: Terukazu Kato
Contact:
Position: Head of Corporate Communications DEPT.
Name: Yosuke Tsuchiya
Telephone: 81-3-6361-7100
Scheduled date of general meeting of shareholders:June 28, 2018
Scheduled date of dividend payment commencement:
June 29, 2018
Scheduled date of security report submission:
June 28, 2018
Preparation of supplementary materials for the financial statements: Yes
Holding of the financial 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 term ended March 2018 (from April 1, 2017 to March 31, 2018)(1) Financial results (total sum)

(Figures in percentages denote the year-on-year change.)

Net sales

Fiscal Year 3/2018
Fiscal Year 3/2017

Operating profit

Profit attributable toowners of parent

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%

117,879
114,954

2.5
2.1

17,05015,983

6.7-19.4

17,914
16,3999.2-15.9

14,504
12,48816.1-0.5(Note) Comprehensive income: FY 3/2018: 16,271 million yen (43.4%)

Fully diluted profit
per share

Profit per share
Fiscal Year 3/2018
Fiscal Year 3/2017

FY 3/2017: 11,344 million yen (17.8%)

Ratio of ordinary
income to total assets

Return on equity

Ratio of operating
profit to sales

Yen

Yen

%

%

%

200.55179.46

‒
‒

8.3
8.1

6.9
7.4

14.5
13.9

(Reference) Equity in earnings of affiliates: FY 3/2018: 324 million yen

FY 3/2017: 31 million yen(2) Consolidated financial conditions
Total assets

As of March 31, 2018
As of March 31, 2017

Net assets

Million yen

Million yen%

Yen

293,701
222,008

196,533
157,39765.9
69.7

2,532.11
2,250.34(Reference) Shareholders’ equity: FY 3/2018: 193,599 million yen(3) Consolidated cash flow
Cash flows from operating
activities
Fiscal Year 3/2018
Fiscal Year 3/2017

Shareholders’ equity
per share

Shareholders’ equity ratio

FY 3/2017: 154,783 million yen

Cash flows frominvesting activities

Cash flows fromfinancing activities

Closing balance of cash
and cash equivalents

Million yen

Million yen

Million yen

Million yen

21,066
21,065-23,354-6,45150,305-9,572

78,31329,901

2. Dividends
Dividend per share
End of Q1

End of Q2

End of Q3

End of FY

Total cash
dividends(annual)

Total

Dividends
payout(consolidated)

Net assets
dividend ratio(consolidated)

Yen

Yen

Yen

Yen

Yen

Million yen%%

FY 3/2017

‒

32.00

‒

32.00

64.00

4,420

35.7

2.9

FY 3/2018

‒

32.00

‒

32.00

64.00

4,647

31.9

2.7

FY 3/2019 (Projection)

‒

32.00

‒

32.00

64.00

36.2

3. Projections of consolidated business results for the term ending March 2019 (From April 1, 2018 to March 31, 2019)(Figures in percentage show the rate of increase or decrease from the previous fiscal year for full-year
and from the second quarter of the previous fiscal year for second quarter (aggregate).)Net sales
Million yen

First half
Full-year

58,900120,500

Operating profit% Million yen% Million yen

1.1
2.2

1.3
2.6

9,100
17,500

Profit attributable toowners of parent

Ordinary profit

9,100
18,000% Million yen

-1.6
0.5

6,800
12,800

Profit per share

%

Yen

2.8
-11.8

94.02
176.98

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) 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(3) Number of shares issued (common stock)1) Number of shares issued at the end of the term (including treasury stock) (shares):
FY 3/2018:76,758,362
FY 3/2017:70,771,662
2) Number of treasury stock at the end of the term (shares):
FY 3/2018:
300,382
FY 3/2017:
1,989,282
3) Average number of shares during the term (shares):
FY 3/2018:
72,324,992
FY 3/2017:
69,592,851* This Summary of Consolidated Financial Statements is not subject to audit procedures performed by a certified public accountant oraudit corporation.
* Explanation about the proper use of financial projections and other important notes
Forward-looking statements such as financial projections, which are stated in this document, are based on information currently
available to the Company and certain assumptions deemed reasonable. There is a possibility that actual results, etc. will differ
materially from forecasts due to various factors. Please see “1. Overview of Operating Results, etc. (4) Future outlook” on page 3
for information regarding the forecast of consolidated financial results.

2

○Contents of accompanying materials
1. Overview of Operating Results, etc. ···································································································

2(1) Overview of operating results for the fiscal year ended March 31, 2018 ······················································

2(2) Overview of financial position during the fiscal year ended March 31, 2018 ·················································

3(3) Overview of cash flow during the fiscal year ended March 31, 2018 ··························································

3(4) Future outlook ·······················································································································

3

2. Basic idea of the selection of accounting standards ··················································································

4

3. Consolidated Financial Statements and Key Notes ··················································································

5(1) Consolidated Balance Sheets ·······································································································

5(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ·····························

7(3) Consolidated Statements of Changes in Equity ··················································································

9(4) Consolidated Statements of Cash Flows ·························································································

11(5) Notes to the Consolidated Financial Statements ·················································································

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

13(Transfer of important subsidiaries during the fiscal year under review) ····················································

13(Segment information) ············································································································

13(Per share information)············································································································

13(Significant subsequent events) ··································································································

13

4. Other······································································································································

14

Changes in officers ················································································································

141

1. Overview of Operating Results, etc.
(1) Overview of operating results for the fiscal year ended March 31, 2018
During the fiscal year under review, the Japanese economy maintained a trend of moderate recovery backed by improvement incorporate earnings, employment, and household income and other factors. The global economy also remained strong in general, in
which the U.S. maintained steady consumer spending, Europe reduced unemployment rates and increased capital expenditure, and theChinese government successfully implemented public-finance policies.
Meanwhile, the measures to control medical expenses remained basically unchanged in the Japanese pharmaceutical industry, which
continued to present a harsh market.
In this environment, the consolidated net sales of Tsumura and its group companies for the fiscal year under review increased 2.5%
year on year to 117,879 million yen thanks primarily to continues growth in the sales of prescription Kampo products.
Profit included operating profit of 17,050 million yen (up 6.7% year on year), ordinary profit of 17,914 million yen (up 9.2% year onyear), and profit attributable to owners of parent of 14,504 million yen (up 16.1% year on year). The cost-to-sales ratio fell 0.9% year
on year, due mainly to reduced costs related to crude drugs. As a result, the operating profit margin rose 0.6% year on year, to 14.5%.
[Consolidated business results]
FY 3/2017(Million yen)
YoY Change(Percent Change)

FY 3/2018

Net sales

114,954

117,879

Operating profit

15,983

17,050Ordinary profit

16,39917,914

Profit attributable toowners of parent

12,48814,5042,924
2.5 (%)
1,067
6.7 (%)
1,515
9.2 (%)
2,015
16.1 (%)

Net sales of overall prescription Kampo products grew 2.4% year on year.
As marketing strategies, the Company positioned three segments, including the geriatric field, cancer domain (supportive care), andgynecology field, as key areas and concentrated its activities in these segments. The Company responds to various needs of healthcare
professionals and provides appropriate information on evidence in basic and clinical medicine, medical practice guidelines in which
Kampo is described, and the use of different Kampo products with the aim of contributing to the healthcare of many patients inpriority areas, including, in particular, the conventional five “drug-fostering” formulas and subsequent five “drug-growing” formulas*
as strategic formulas.
The Company will continue to collect and provide more information on Kampo medicine and Kampo products primarily throughmeetings with doctors, presentations for medical institutions, and Kampo seminars.
* Five “drug-growing” formulas
As strategic formulas that follow the five “drug-fostering” formulas, the five “drug-growing” formulas are growth drivers that aim to
publish medical practice guidelines in areas in which satisfaction with treatment and contribution of drugs are low by developing
evidence (data on safety and effectiveness, etc.).

2

(2) Overview of financial position during the fiscal year ended March 31, 2018
The financial position at the end of the fiscal year under review was as follows:
Total assets rose 71,692 million yen from the end of the previous fiscal year mainly due to an increase in cash and deposits, to 293,701
million yen.
Liabilities increased 32,556 million yen chiefly due to the issuance of bonds, to 97,168 million yen.
Net assets rose 39,135 million yen from the end of the previous fiscal year, mainly due to the issuance of new shares and disposal oftreasury share by way of third-party allotment, to 196,533 million yen.
As a result, the equity ratio declined 3.8 percentage points, to 65.9%.
(3) Overview of cash flow during the fiscal year ended March 31, 2018
Cash flows in the fiscal year under review were as follows:
Cash flow provided by operating activities was 21,066 million yen, which was approximately the same level as that in the previous
fiscal year.
Cash used in investing activities was 23,354 million yen. In comparison to the previous fiscal year, expenditure increased 16,902
million yen, due largely to payments into time deposits.
Cash provided by financing activities was 50,305 million yen. In comparison to the previous fiscal year, cash inflow increased 59,877
million yen, chiefly as a result of share issuance through a private placement, the disposal of treasury shares, and proceeds from theissuance of bonds.
As a result, cash and cash equivalents at the end of the fiscal year under review increased 48,412 million yen from the end of theprevious fiscal year, to 78,313 million yen.
(4) Future outlook
Financial forecasts for the fiscal year ending March 31, 2019 include net sales of 120,500 million yen (up 2.2%), profit comprising
operating income of 17,500 million yen (up 2.6%) and ordinary income of 18,000 million yen (up 0.5%), and profit attributable toowners of parent of 12,800 million yen (down 11.8%), taking into account the growing sales of prescription Kampo products,
revisions of drug prices, and other factors.
(Million yen)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
FY 3/2019(Percent Change)

120,500(2.2%)

17,500(2.6%)

3

18,000(0.5%)

12,800(-11.8%)

2. Basic idea of the selection of accounting standards
Tsumura and its group companies plan to prepare consolidated financial statements based on the Japanese standards for the time being.
The companies will consider adopting the IFRS in an appropriate manner, taking into account conditions in Japan and overseas.

4

3. Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheets(Million yen)
As of March 31, 2017
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade

As of March 31, 201829,931
40,347

83,52042,906－3,500

Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts

8,122
14,547
29,467
1,325
10,941-4

8,008
12,797
29,1881,512
10,971-4

Total current assets

134,679

192,401

Non-current assets
Property, plant and equipment
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Land
Construction in progress
Other
Accumulated depreciation

64,42947,920
10,139
9,052
3,880
308
-71,044

64,77850,55910,502
9,052
11,879334-75,776

Total property, plant and equipment

64,686

71,329Securities

Intangible assets
Investment and other assets
Investment securities
Net defined benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts

266

526

17,530
1,058
43
3,743
-0

14,1791,908
36
13,319-0Total investment and other assets

22,37629,44387,329101,300

222,008

293,701

Total non-current assets
Total assets

5

(Million yen)
As of March 31, 2017
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable

As of March 31, 2018

6,696
12,581

5,507
10,314－15,000Accounts payable - other
Income taxes payable
Provision for sales returns
Other

6,020
1,901
13
4,670

7,823
3,538
10
6,573

Total current liabilities

31,883

48,766－30,000Long-term loans payable
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Net defined benefit liability
Other

24,376
1,733
1,179
84
5,353

9,376
2,210
1,179
88
5,547

Total non-current liabilities

32,727

48,40264,611

97,16819,4871,940
129,937-5,393145,972

30,142
14,027140,040-814
183,396

3,845
925
2,673
1,470
-102

4,748
323
2,673
2,301
157

Current portion of long-term loans payableNon-current liabilities
Bonds payable

Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
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
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6

8,811

10,203

2,613

2,933

157,397

196,533

222,008

293,701

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income(Million yen)
FY 3/2017(From April 1, 2016
to March 31, 2017)

FY 3/2018(From April 1, 2017
to March 31, 2018)

Net sales
Cost of sales

114,954
49,454

117,879
49,603Gross profit

65,49968,275

Selling, general and administrative expenses

49,516

51,224

Operating profit

15,983

17,050

64
385

166
382

31

324

Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodOther
Total non-operating income
Non-operating expenses
Interest expenses
Bond issuance cost

481

498

962

1,371

144
－

190
143

Share issuance cost
Foreign exchange losses
Other

－
381
20

108
25
39

Total non-operating expenses

546

507

16,39917,914

3
873

10
1,498

－

1,000

876

2,509

43
40

13
60

Loss on disaster

7－

Environmental expenses－

66

Total extraordinary losses
Profit before income taxes

92
17,184140
20,284

Income taxes - current
Income taxes - deferred

4,342
103

5,440
49

Total income taxes

4,446

5,489

Profit12,738

14,794249

289

12,48814,504

Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Subsidy income
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets

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

7

Consolidated Statements of Comprehensive Income(Million yen)
FY 3/2017(From April 1, 2016
to March 31, 2017)
ProfitOther 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
Share of other comprehensive income (loss) of entities
accounted for using equity method
Total other comprehensive income (loss)

FY 3/2018(From April 1, 2017
to March 31, 2018)

12,738

14,794

9
445

902
-601

159

－

-2,342
383

902
260

-49

13

-1,393

1,477

Comprehensive income

11,344

16,271

Comprehensive income attributable to
Owners of parent
Non-controlling interests

11,408-64

15,896374

8

(3) Consolidated Statements of Changes in Equity
FY 3/2017 (From April 1, 2016 to March 31, 2017)(Million yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus

19,487Retained earnings

1,940

Total shareholders’equityTreasury shares

122,047-392

143,084

Changes of items during the period
Dividends of surplus-4,476-4,476

Net income attributable to ownersof parent

12,48812,488Change of scope of consolidation

-150

-150

27

27

Increase by merger
Purchase of treasury shares-5,001-5,001

Net changes of items other thanshareholders' equity
Total changes of items during theperiod

‒

‒

7,889

-5,001

2,888

Balance at end of current period

19,4871,940

129,937-5,393145,972

Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
availablefor-salesecurities

Deferred
gains orlosses onhedges

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensi
ve income

Noncontrollinginterests

Total net
assets

3,835

479

2,513

3,549

-485

9,891

2,726

155,702

Changes of items during the period
Dividends of surplus-4,476

Net income attributable to ownersof parent

12,488Change of scope of consolidation-150

Increase by merger

27

Purchase of treasury shares-5,001

Net changes of items other thanshareholders' equity

9

445

159

-2,078383-1,080-113-1,193

Total changes of items during theperiod

9

445

159

-2,078383-1,080

-113

1,694

Balance at end of current period

3,845

925

2,673

1,470

-102

8,811

2,613

157,3979

FY 3/2018 (From April 1, 2017 to March 31, 2018)(Million yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus

19,487

1,940

10,654

10,654Retained earnings

Total shareholders’equityTreasury shares

129,937-5,393145,972

Changes of items during the period
Issuance of new shares

21,309Dividends of surplus-4,402-4,402

Net income attributable to ownersof parent

14,504

14,504Purchase of treasury shares
Disposal of treasury shares

1,432

-1

-1

4,580

6,012

Net changes of items other thanshareholders' equity
Total changes of items during theperiod10,65412,087

10,102

4,579

37,423

Balance at end of current period

30,142

14,027140,040-814

183,396

Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
availablefor-salesecurities

Deferred
gains orlosses onhedges

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensi
ve income

Noncontrollinginterests

Total net
assets

3,845

925

2,673

1,470

-102

8,811

2,613

157,397

Changes of items during the period
Issuance of new shares

21,309Dividends of surplus-4,402

Net income attributable to ownersof parent

14,504Purchase of treasury shares-1

Disposal of treasury shares

6,012

Net changes of items other thanshareholders' equity

902

-601

‒

830

260

1,392

319

1,712

Total changes of items during theperiod

902

-601

‒

830

260

1,392

319

39,135

Balance at end of current period

4,748

323

2,673

2,301

157

10,203

2,933

196,53310

(4) Consolidated Statements of Cash Flows(Million yen)
FY 3/2017(From April 1, 2016
to March 31, 2017)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Bond issuance cost
Share issuance cost
Share of (profit) loss of entities accounted for using equity
methodLoss (gain) on sales and retirement of property, plant andequipment
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Loss (gain) on sales of short-term and long-term investment
securities
Decrease (increase) in net defined benefit asset
Increase (decrease) in net defined benefit liability
Other

FY 3/2018(From April 1, 2017
to March 31, 2018)17,184
5,629
-2
-449
144
‒
‒

20,284
6,157
0
-548
190
143
108

-31

-324

82

74

1,465
-1,123
1,255-2,5292,566-1,304-873-1,498

-281
-89
3,272

-422
-47
1,715

Subtotal

26,182

24,565Interest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

470
-142
-5,44421,065537-161-3,87521,066-8,21129-88-18-10,46319-318-13,510

1,874

16,154

-238

‒

-3
4
-34
36
197

-4
4
-21,5696,383-49-6,451-23,354

Cash flows from investing activities
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
Payments for investments in capital of subsidiaries andassociates
Payments of loans receivableCollection of loans receivable
Payments into time deposits
Proceeds from withdrawal of time deposits
Other
Net cash provided by (used in) investing activities

11

(Million yen)
FY 3/2017(From April 1, 2016
to March 31, 2017)
Cash flows from financing activities
Decrease in short-term loans payable
Proceeds from issuance of bonds
Proceeds from issuance of common shares
Purchase of treasury shares
Proceeds from sales of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Other

FY 3/2018(From April 1, 2017
to March 31, 2018)‒‒‒-5,001‒-4,478-49-43-2,26729,856
21,201-1
6,012-4,404-49-43

Net cash provided by (used in) financing activities-9,57250,305

Effect of exchange rate change on cash and cash equivalents

-588

394

Net increase (decrease) in cash and cash equivalents

4,453

48,412

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly consolidated
subsidiary
Increase in cash and cash equivalents resulting from merger
with unconsolidated subsidiaries

25,12829,901

290

‒

28

‒

Cash and cash equivalents at end of period

29,901

78,31312

(5) Notes to the Consolidated Financial Statements(Notes on premise of a going concern)
There are no applicable matters.
(Transfer of important subsidiaries during the fiscal year under review)
There are no applicable matters.
Though not a transfer of a specified subsidiary, Tsumura China Inc. has been consolidated due to the completion of investment in thecompany during the fiscal year under review.
(Segment information)
The Group only has one segment of pharmaceutical products and thus the statement of segment information is omitted.
(Per share information)
FY 3/2017(From April 1, 2016
to March 31, 2017)
Net assets per share
Profit per share

FY 3/2018(From April 1, 2017
to March 31, 2018)

2,250.34 yen
179.46 yen

2,532.11 yen
200.55 yen(Notes) 1. Fully diluted net income per share is not stated because there are no residual securities.
2. Basis of calculation(1) The basis of calculation for net assets per share is as follows.
As of March 31, 2017
Total net assets (million yen)

As of March 31, 2018

157,397

196,533

Deduction from total net assets (million yen)

2,613

2,933

(Non-controlling interests)(2,613)(2,933)

154,783

193,599

68,78276,457

Net assets related to common stock at the end of the fiscal
year (million yen)
Number of shares of common stock at the end of the
fiscal year used for calculation of net assets per share(thousand shares)(2) The basis of calculation for net income per share is as follows.
FY 3/2017(From April 1, 2016
to March 31, 2017)
Profit attributable to owners of parent (million yen)

FY 3/2018(From April 1, 2017
to March 31, 2018)
12,48814,504

Amount not attributable to common stockholders (million
yen)

‒

‒

Profit attributable to owners of parent related to common
stock (million yen)

12,48814,504

Average number of shares of common stock during the
fiscal year under review (thousand shares)

69,592

72,324(Significant subsequent events)
There are no applicable matters.

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4. Other
Changes in officers
1.Changes in representatives
Not applicable
2. Changes in other officers (scheduled for June 28, 2018)(1) Candidate for director（New Title）（Name）（Current Title）

Director,
Managing Executive Officer

Susumu Adachi

Outside Director

Hiroshi Miyake

Managing Executive Officer(2) Directors to retire（Name）
Toru Sugita※（Current Title）
Director

Yayoi Masuda

Outside Director※Toru Sugita will be advisor to the Company

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