Sysmex Corporation
Annual Report 2015

Sysmex Corporation
1-5-1 Wakinohama-Kaigandori,Chuo-ku, Kobe 651-0073, Japanwww.sysmex.co.jp
This brochure was printed in Japan on FSC R-certified paper using vegetable oil ink.

Annual Report 2015
For the year ended March 31, 2015

Concerted Maximization of
Corporate Value:
Our Recipe for Growth

Profile

In its quest for further growth, Sysmex delivers value by anticipating challenges in its operating environment and remaining at theforefront of change.

SysmexCorporation (“the Company”) is an integrated supplier of the instruments,
reagents and software that are essential to testing processes performed during
health checkups, treatment and ongoing disease management.
Since its establishment in 1968, Sysmex has concentrated on the field of diagnostics, where theCompany has played an integral role in the testing of blood and urine samples. While reinforcing its
research and development capabilities and enhancing its production, Sysmex has expanded into thefields of urinalysis, immunochemistry, clinical chemistry and hemostasis, and has extended its operations onto a global scale.
The Sysmex Group comprises 64 companies in 43 countries throughout the world, operating in theadvanced countries of Europe and the Americas. In addition, the Group is aggressively building its business in emerging markets, including China, India, Eastern Europe and Russia by creating global networks
for its R&D, production, sales and support functions. Sysmex products are used by medical institutions
in more than 190 of the world’s countries. In the field of hematology, which involves the analysis of red
and white blood cells, the Group holds the top share of the global market.
Sysmex’s operating environment is growing ever more complex and uncertain, but in its quest for
further growth, the Sysmex Group responds swiftly to emerging challenges as it aims toward theconcerted maximization of corporate value.

Global Network

China
Subsidiaries: 4
Number of employees: 362

EMEA
Subsidiaries: 29
Number of employees: 1,720

Americas
Subsidiaries: 10
Number of employees: 909

Japan
Sysmex Corporation

Asia Paciﬁc

Subsidiaries: 7
Number of employees: 2,412

Subsidiaries: 13
Number of employees: 500

Net Sales by Destination
Asia Paciﬁc
8.1%
China
hina
22.5%
2.5%

Net Sales by Business
Other business 7.8%

Japan
Japa
18.3%

LS-BU 1.4%

Hematology 63.7%

Hemostasis 15.2%

Net Sales

Clinical chemistry 1.7%

¥221,377 million
AmericasA
22.4%

Immunochemistry 2.1%
Other HU-BU 0.7%

Net Sales¥221,377 million

Urinalysis 7.4%

EMEA
28.7%
28
7%

Sysmex Annual Report 20151

11-Year Growth and Highlights

For the years ended March 31,

2005

2006

2007

2008

2009

2010

2011

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

2015

2015

¥ 134,744 ¥ 145,578 ¥ 184,538 ¥ 221,377$ 1,844,808

2012

2013

2014

For the year:
Net sales¥ 76,935 ¥ 87,888

Operating income¥ 101,041 ¥ 110,724 ¥ 111,843 ¥ 116,206 ¥ 124,694

9,104

10,724

12,71515,033

15,134

15,74018,28919,20621,80532,871

44,411

370,092

Net income

5,731

7,423

9,008

9,132

8,014

9,765

11,412

12,007

14,166

20,574

26,638221,983

Net increase (decrease) in cash and cash equivalents(3,261)

(499)

3,299

(3,044)

(269)

4,403

5,103

2,922

12,4692,241

13,672

113,933

Cash and cash equivalents, end of year

10,4589,416

12,715

9,679

9,410

13,813

18,916

21,83834,30736,54850,220418,500

Capital expenditure

2,729

5,638

4,546

8,244

9,340

4,540

5,840

7,909

8,945

13,366

13,907

115,892

Depreciation

3,296

3,592

3,959

3,924

7,189

7,067

6,871

7,031

7,945

9,961

11,25993,824R&D expenditure

6,509

8,184

9,026

9,221

10,771

11,23812,38011,904

12,11913,26014,692

122,433

At year-end:
Total assets

77,66087,447

101,225

109,027

118,522

120,702130,060

142,285

173,011

210,759

247,984

2,066,533

Shareholders’ equity

56,14962,647

71,34478,75379,18386,35893,534

101,834

118,801

145,757

168,527

1,404,392

657

695

669

1,081

10,344

2,565

1,971

1,026

769

1,960

716

5,967

(Yen)

(U.S. dollars)Interest-bearing liabilities
Per share data:¥ 2,244.9 ¥ 1,251.8*2 ¥ 1,411.0

Shareholders’ equity (yen)¥ 1,541.0¥ 1,548.2¥ 1,684.9¥ 910.7*2¥ 990.5¥ 1,151.4¥ 703.8*2¥ 812.4

6.77

225.1

145.5*2

179.6

178.9

156.7

190.8

111.2*2

116.9

137.6

99.5*2

128.5

1.07

224.0

143.8*2

178.0

178.3

156.5

190.5

111.0*2

116.6

137.1

99.2*2

128.0

1.07

Cash dividends applicable to the year* (yen)

5.00

6.50*

2

2

17.00

20.00

2

27.00*

38.00

0.32

Dividend ratio (%)

17.8

17.9

29.1

29.1

27.1

29.6

Net income (basic) (yen)Net income (diluted) (yen)
3

9.00

12.00

12.50

14.00

15.00*

20.0

26.8

31.9

29.4

27.0

We deliver value by sustaining high levels of growth andfurther increasing our profitability by remaining at theforefront of change.

Sales and Earnings Forecast for the Fiscal Year Ending March 31, 20162016¥245.0 billion¥50.0 billion¥31.8 billion
20.4%
13.0%
17.9%

Net sales
Operating income
Net income*6

Other data:
Shareholders’ equity ratio (%)

72.3

71.6

70.5

72.2

66.8

71.5

71.9

71.6

68.7

69.2

68.0

Return on equity (ROE) (%)

10.7

12.5

13.4

12.2

10.1

11.8

12.7

12.3

12.8

15.6

17.0

Return on assets (ROA)*4 (%)

7.7

9.0

9.5

8.7

7.0

8.2

9.1

8.8

9.0

10.7

11.6

Yen/U.S. dollar

108.2

113.3

117.0

114.3

100.5

92.9

85.7

79.1

83.1

100.2

109.9

Yen/euro

134.5

137.9

150.1

161.5

143.5

131.2

113.1

109.0

107.2

134.4

138.8

Number of employees

3,115

3,334

3,580

3,916

4,148

4,578

4,960

5,324

5,594

6,211

6,739

15,98820,194

21,472

Operating margin
Net income margin*6
Return on equity (ROE)

Assumed exchange rates: US$1 = ¥115.0; €1 = ¥130.0(Announced in May 2015)

Note: Including part-time employees

Greenhouse gas emissions (t-CO2)*5*6. The “net income” figure for the fiscal year ending March 31, 2016, is “net income
attributable to owners of the parent” following application of the AccountingStandard for Business Combinations.

Notes:*1. U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ¥120 = US$1, the approximate rate of exchange on March 31, 2015.
*2. Two-for-one stock split*3. Dividend (actual) coverted to post-split basis.
*4. ROA = Net Income/Total Assets (Yearly Average)×100*5. Factories, all Sysmex Corporation business offices, subsidiaries in Japan and regional headquarters.
(Years ended March 31)

Net SalesJapan(¥ million)(Including South Korea and IDEXX Laboratories, Inc.)
Intra-area transfers: Exports to Group aﬃliates, others
Sales to customers: IDEXX and others
Sales to customers: Japan
Segment proﬁt(¥ million)(¥ million)(¥ million)

250,000

150,000

50,000EMEA

Americas50,000

Segment proﬁt
Sales(¥ million)

47,014

5,000

China
Segment proﬁt
Sales(¥ million)(¥ million)

75,00010,000221,3778,604

122,937
200,000

120,000

184,538

150,000
124,694

134,744

145,578

90,0002,783
30,00040,18750,000

2012

2013

2014

2015

0

31,163

88,16830,00079,53762,05845,19760,0002011

38,59440,0004,000

60,0002,850

40,31340,550

2013*

2014*

29,703
2,129

20,138

11,9391,446

30,000

2015*

3,000
2,478

45,0005,799
39,436(¥ million)

50,0006,000

40,00030,0004,000

20,00010,00010,0001,000

15,0002,000

10,000

2014*

2015*

0

0

2013

2014

1,386

2015*

16,000
1,056

4,195

1,500
17,86600

900

12,000

3,000

8,000

600

1,500

4,000

300

9,043

2,384

2013*

1,200

14,731

4,500

24,425

2,000

2013*

6,000

36,25830,00020,0000(¥ million)

20,000

1,227
8,000

20,00007,500

Segment proﬁt
Sales(¥ million)

63,257

5,199

2,402

Segment proﬁt
Sales
49,840 (¥ million)

6,802

53,196

103,817

100,000

0

40,000Asia Paciﬁc

2014*

2015*

0

0

2013*

2014*

2015*

0

* Revision in intragroup transaction prices

2

Sysmex Annual Report 2015

Sysmex Annual Report 2015

3

Contents

Key Strategies for Future Growth Corporate Philosophy and Core Behaviors . . . . . . . . . . .

8

 Message from the Chairman and CEO . . . . . . . . . . . . . . . .

9 Mid-Term Management Plan

An Interview with the Chairman and CEO . . . . . . . . . . . . . 12

Business Activities

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18

 Sysmex at a Glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20

 Market Overview and Sysmex’s Position. . . . . . . . . . . . . .

22

 Product Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23

 Sysmex’s State-of-the-Art Technologies . . . . . . . . . . . . . .

26

 Customer Feedback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29

 Development of Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . .

30Functional Structure

7
1
P

gr m
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in y
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Ce ustw
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e
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a
Function32

 Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34

 Purchasing, Production and Logistics. . . . . . . . . . . . . . . . . .

38

 Sales and After-Sales Support . . . . . . . . . . . . . . . . . . . . . . . . . .

42

 Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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ag e w
em it
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P6

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Co verGo

 Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Corporate Governance

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En
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 Milestones of Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46

Sysmex Value
 Brand Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

58

 Socially Responsible Activities . . . . . . . . . . . . . . . . . . . . . . . . . .

60

Financial Section
 11-Year Consolidated Financial Data . . . . . . . . . . . . . . . . . .

68

 Management’s Discussion and Analysis . . . . . . . . . . . . . .

70

 Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . .

76

 Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . .

97

Sysmex Group Information

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P57

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 Global Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

98

 Stock Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100

 Corporate Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

101

Editorial Policy
In producing this report, Sysmex has endeavored to takea proactive approach in its disclosure to stakeholders,augmenting the report with non-financial information
as well as providing operating performance and otherfinancial information.

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

4

Sysmex Annual Report 2015

Sysmex Annual Report 2015

5

Key Strategies for Future Growth

Key Strategies for Future GrowthW

ith technological innovation taking place on a daily basis and rapidly
growing emerging markets coming to the fore, the business environment in which Sysmex operates is changing at a dizzying pace. We
embrace this change in the spirit of Sysmex’s corporate philosophy, “Shaping
the advancement of healthcare,” as we work together as a group to enhance
our corporate value and take our business to the next stage of growth.

6

Sysmex Annual Report 2015

Sysmex Annual Report 20157

Message from the Chairman and CEO

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

In the fiscal year ended March 31, 2015, Sysmex posted its 15th consecutive year of increases in
net sales, and operating income rose for the 14th year in a row. We also announced the Sysmex
Group’s new mid-term management plan, which concludes in the fiscal year ending March 31,
2018. The key objectives of this plan are to reinforce growth and profitability, invest in growthand promote transformation.

In line with the mission of Sysmex’s corporate philosophy,¥300.0 billion, operating income of ¥63.0 billion and ROE“Shaping the advancement of healthcare,” we are workingof 18.0%.

Key Strategies for Future Growth

Corporate Philosophy and Core Behaviors

toward the development of healthcare and aim to contribute

Shaping the advancement of healthcare.

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

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

to a healthy life for people around the world. Ever since its

Ongoing Growth in the Healthcare Market

establishment in 1968, Sysmex has created broad range ofOverall, the world economy saw a modest recovery in the fis-

products and services in the in-vitro diagnostics (IVD) field

cal year ended March 31, 2015. The U.S. economy grew favor-

based on advanced technologies. We now offer these products

ably, with corporate activity in an expansionary phase, Europe

and services in more than 190 countries around the world.

experienced a gradual recovery, and the economy of the Asia

In the fiscal year ended March 31, 2015, we drew up a

Pacific region expanded, centered on the ASEAN nations. The

mid-term management plan through the fiscal year ending

global healthcare market is characterized by rising healthcare

March 31, 2018, aiming to maintain the Group’s high rate

demand in advanced countries, driven by graying populationsof growth and increase profitability still further, invest inand the growing demand for more efficient testing to holdgrowth and promote transformation in the years ahead. This

down healthcare costs, and the importance of testing is likely

plan develops the positioning of the long-term management

to become more pronounced as personalized healthcare pro-targets formulated in 2011 and establishes initiatives for the

gresses. In China and the emerging markets of Southeast Asia

next three years. By the final year of the plan, the fiscal year

and Latin America, economic growth is prompting healthcare

ending March 31, 2018, the Group aims to achieve net sales ofinfrastructure developments and leading to increasingly

External Environment

Core Behaviors
To Our Customers

To Our Shareholders

We deliver reassurance to our customers, throughOur shareholders can rest assured that we will continue tounmatched quality, advanced technologies, superior support,

improve the soundness and transparency of our manage-

and actions that consistently reflect the viewpoint of ourment policies, while promoting information disclosure andcustomers.

close communications.

We constantly look out for our customers’ true needs, andWe commit ourselves to a consistent yet innovative styleseek to generate new solutions to satisfy those needs.

of management, in order to achieve sustainable growth andincreased shareholder value.

To Our Employees
We honor diversity, respect the individuality of each em-

To Society

ployee, and provide them with a workplace where they can

We carry out our business in strict compliance with laws

realize their full potential.

and regulations, as well as in adherence to high ethicalWe value the spirit of independence and challenge, provide

standards.

employees with opportunities for self-fulfillment andAs a responsible member of society, we play an active role

growth, and reward them for their accomplishments.

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

To Our Business Partners
We deliver commitment to our client companies through

Macro Environment

Healthcare and IVD* Environment

Global Economy

Advanced Countries

Advanced countries’ economies in a stable growth phaseIncreasing growth potential in emerging markets

 Growing demand for more eﬃcient testing tohold down healthcare costs
 Increasing importance of testing (diagnostics) tothe development of personalized healthcare

Exchange Rate Trends
 Ongoing yen depreciation and falling crude oil prices
Expanding revenues and proﬁts by Japanese
export-oriented companies

Emerging Markets
 Rising demand for testing due to economic growthCompetitive Environment
Technology Trends
Accelerating speed of technological innovation andcommercialization
Wearable devices and other changes in informationand communication technology

 Increasingly vigorous M&A and companies from othersectors entering the market
 Dominance of companies in emerging markets

Technological Innovation
Advances in genetic/molecular diagnostic technologies

broad-ranging partnerships.
We strive to be a company that can grow in step with ourtrade partners, through respect and mutual trust.

Further growth expected in the healthcare and IVD markets* In-vitro diagnostics

8

Sysmex Annual Report 2015

Sysmex Annual Report 20159

Message from the Chairman and CEO

plan, our targets were net sales of ¥220.0 billion and operat-

The competitive landscape is likely to be increasingly chal-

ing income of ¥40.0 billion.

lenging and be marked by vigorous M&A activity, new market

In the fiscal year ended March 31, 2015, partly due to theentrants from other sectors and the dominance of companies

impact of yen depreciation net sales grew 20.0%, to ¥221.4

in emerging markets. At the same time, we anticipate new

billion, with double-digit growth centered on overseas regions.

growth opportunities, owing to progress in genetic/molecular

Operating income surged 35.1%, to ¥44.4 billion, buoyed bydiagnostic technologies, advances in regenerative medicine

the effects of higher sales and yen depreciation.

Long-Term Management Targets:

Key Strategies for Future Growthsophisticated healthcare. We expect these trends to continue.

Sysmex’s Ideals for 2020
Corporate Philosophy

Mission of “Sysmex Way,” the corporate philosophy for the Sysmex Group“Shaping the advancement of healthcare”
Long-term management target “vision”“A Unique & Global Healthcare Testing Company”

and the proactive application of information technology.
*1 BEAMing: An acronym for “Bead, Emulsion, Amplification, andMagnetics,” this gene analysis method combines digital PCR(ultrahigh-sensitivity PCR) and flow cytometry technologies. (Seepage 28 for details.)*2 Flow cytometry (FCM): Method involving the flow dispersion ofminute particles and the use of laser light to optically analyze theminute flows. Used primarily to observe individual cells.

Sysmex plans to continue achieving high growth by anticipating market changes and adopting unique strategies, suchas expanding its product portfolio and proposing appropriate
solutions and advanced support to customers.

Long-Term
Management Targets(2020)

Positioningȉ Undisputed global leader in hematology, hemostasis and urinalysis(including alliances)ȉ A leading company in the Asian in-vitro diagnostics (IVD) market
ȉ A unique and competitive player in the immunology ﬁeld
ȉ A leading global player making a contribution to personalized healthcareȉ An attractive company providing value and conﬁdence
ȉ “One Sysmex” carrying out high-speed management

Review of the Previous Mid-Term Management
Plan and Operating Results in the Fiscal Year
Ended March 31, 2015

Establishing a New Mid-Term Plan for
Further Growth

Looking back on the two years since 2013, when we

Sysmex’s long-term management vision for 2020 is to be “Aannounced our previous mid-term management plan, we

Unique & Global Healthcare Testing Company.” To achieve

have expanded sales of our flagship model in the hematology

further growth amid the major changes in our operating envi-(Fiscal year ending March 31, 2018)

field, the XN-Series, across all regions and increased profit-

ronment, we have recast our 2020 positioning as described

Net sales¥300.0billion(CAGR* = 10.7%)

ability. We enhanced our product lineup in the hemostasis

on the following page. In line with the Sysmex Group’s mid-

Operating income¥63.0billion

and urinalysis fields, and in the immunochemistry field weterm management plan, to achieve our positioning for 2020

(CAGR* = 12.4%)(Operating Margin of 21.0%)

added unique reagent parameters in Japan and other parts of

we will concentrate on three points: reinforce growth andAsia, augmented the HISCL-Series and undertook initiatives

profitability, invest in growth and promote transformation.

targeting further growth. We also acquired Inostics, whichFirst, to reinforce growth and profitability we will further

possesses BEAMing*1 technology, and Partec, a pioneer instrengthen our position in the fields of hematology, hemostasis

flow cytometry*2, as part of a wholehearted effort to expand

and urinalysis, where Sysmex’s share of the global market isour technology platforms with a view toward personalized

already high. In Asia, where we have made solid inroads, we aim

healthcare. As a result and thanks in part to the positive

to be the leading company in our field. Next, we will invest in

impact of exchange rates, we achieved the targets of ourfurther growth in the immunochemistry field, which is the larg-

previous mid-term management plan slated to end in theest market in the IVD domain; in the clinical-use flow cytometry

fiscal year ending March 31, 2016, one year early. Under thisdomain, where we anticipate synergies with the Company’sFinancial targets

Mid-Term
Management Plan
(Fiscal Years Ending
March 31, 2016 to 2018)

ROE

18.0%

Operating cash flow

¥50.0billion

Free cash flow

¥20.0billion

Profitability

Investment

Reinforce growth andprofitability

Invest in growth

Promote transformationȉImmunochemistry,
FCM, life scienceȉEarn further trust from stakeholdersȉEnhance Group managementȉHematology, hemostasis, urinalysis
ȉAsian region

Transformation

Exchange rate assumptions: 1USD=¥115, 1EUR=¥130, 1CNY=¥18.5*CAGR (compound annual growth rate): For fiscal years ending March 31, 2015 to 2018

Operating Income
Operating Margin

Net Sales

Operating income
Operating margin(¥ million)
50,000(¥ million)
250,000(%)
40

26,63832

40,000184,538(¥ million)
30,00044,411

221,377
200,000

Net Income

24,000150,000

24

30,000134,744
124,694

20,000 18,289

100,000

19,206

14.7

14.3

17.8

16

Based on the “Sysmex Way,” the corporate philosophy forrealize this growth, aiming to earn additional trust from our

the Sysmex Group, and “Our Core Behaviors,” which states our

stakeholders and endeavor to enhance Group management.

promise to stakeholders, the Group mid-term management plan

on a consolidated basis from 20% to 30%. We are also aiming

11,412 12,007

15.0

aims to accelerate the Group’s effort to achieve its long-term
positioning, preparing the Company to move to the next stage.
July 2015

for ROE of 18.0%.
810,00050,000

tively increasing dialogue with shareholders and investors.

gies. We will also promote transformation of the Group toshareholder returns, we have revised our target payout ratio

14,166
12,000are taking place in personalized healthcare and other technolo-

and augment sustainable corporate value while enhancing

18,00020.1

21,805management soundness and transparency, as well as proac-

By making proactive investments to increase profitability

20,57432,871
145,578

technologies; and in the life science field, where rapid advances

In the area of corporate governance, we will endeavor to

6,000

enhance sustainable corporate value by revising our internal
control system and adopting other measures to augment
0

2011

2012

2013

2014

2015

0

2011

2012

2013

2014

2015

0

0

2011

2012

2013

2014

2015

Hisashi Ietsugu
Chairman and CEO(Years ended March 31)

10

Sysmex Annual Report 2015

Sysmex Annual Report 201511

Mid-Term Management Plan

Q
A

What are your strategies for thebusinesses that will serve as bases of
profitability under the new mid-term
management plan?

Q
A

Please describe the Company’s initiatives
in the fiscal year ended March 31, 2015.

instrument breakdowns by offering network services thatfacilitate preventive maintenance checks and are equippedwith a failure prediction function. The XN-Series, which hasearned plaudits from customers since its launch in 2011,
contributes to increases in Sysmex’s sales and profitability.
The 2014 launch of a compact model, the XN-L-Series,

quality and usability, as well as advanced after-sales

should further boost our market share, specifically insupport, to customers in more than 190 countries.

emerging markets.
In the hemostasis field, we have extended our selling

hematology, hemostasis and urinalysis fields. Going forward,

region for the CS-Series to the Americas and emerging

we will strive to reinforce our position in these markets andmarkets. To continue expanding our hemostasis business,ensure that they are bases of profitability.

we are heightening our presence by leveraging alliances. In

First of all, in the hematology field we will accelerate

the urinalysis field, as well, we are augmenting our productintroduction of our flagship model, the XN-Series. In addi-

lineup and expanding sales and support services globally astion to providing measurements with high clinical utility,

we work to shore up our business base.

such as for low white blood cell counts, the XN-Series

In the initial year of our new mid-term management plan,management will move forward aggressively.

efficiency and we have worked to reduce downtime due toSysmex now provides products with high levels of

As a result, we have acquired high market shares in the

An Interview with the Chairman and CEO

introduced concentrated reagents to improve operational

Key Strategies for Future GrowthProfitability

Furthermore, by taking advantage of synergies between

boasts good usability and embraces our modular concept,

our own technologies and those possessed by Partec, which

which allows individual instruments to be combined

we acquired in 2013, we expect to extend the reach of ourfreely, meeting broad-ranging customer needs. We haveclinical-use flow cytometry products globally.

ways, we reinforced our direct sales and support network in
India to expand business in non-hematology fields.
R&D activities included the launch of the XN-L-Series, acompact model in our mainstay hematology field. With thisIn the fiscal year ended March 31, 2015, we

product, we aim to increase market share, particularly in

expanded our production facilities and sales andemerging markets. In immunochemistry, we introduced the

support networks. We also undertook energetic

HISCL®-800, a compact yet high-performance analyzer formeasures to augment our technology platform with a view toimmunochemistry testing. In Japan, we augmented our lineup

realizing personalized healthcare.

of unique testing parameters by introducing the HISCL TARC

We established a new instrument factory, i-Square, in theassay kit for atopic dermatitis. In the hemostasis field, weJapanese city of Kakogawa, increasing the Group’s instrument

made progress with emerging market and other global mar-manufacturing capacity to meet growing global demand forket launches. Within the CS-Series, we introduced a desktop

IVD instruments. This new facility, combined with factorymodel, the CS-2400/2500, and the compact CS-1600.

expansions at domestic affiliated companies, will eventually

As part of our efforts to make a full-fledged entry into

triple the Group’s overall instrument production capacity. We

the area of personalized healthcare, we concluded an agree-

also expanded our reagent factory in Singapore in September

ment between our subsidiary, Sysmex Inostics, and Merck2014 and our reagent factory in Germany in July 2015, accel-

KGaA to jointly develop and commercialize a blood-based

erating moves to build up a stable supply structure.

RAS biomarker test for patients with metastatic colorectal

During the year, we established subsidiaries in Latincancer. We also expanded our technology platform by

America, including Colombia, as well as in Australia. In addi-

investing in RIKEN GENESIS Co., Ltd., which has a tracktion to augmenting our sales and support structures in theserecord in genetic analysis.
i-Square12

Sysmex Annual Report 2015

Sysmex Annual Report 201513

Mid-Term Management PlanQ
A

Please describe how Sysmex will become
the leading company in the Asian IVD
market.

Sysmex was an early entrant to the Asian market.
In the 1990s, when the Chinese market was still
small, we developed products to meet their needs.

minutes and can perform tests even on small samples, which

In personalized healthcare, we are stepping up R&D in the

We aim to maintain the trust of our stakeholders as we build

the September 2014 launch of the HISCL-800, a compact

aim of establishing proprietary testing methods to realize thebrand value, enhance corporate value and further strengthenmodel. One strength in this area is unique reagent param-use of liquid biopsy to detect cancer and other diseases bycommunications with diverse stakeholders. To augment cus-

testing blood or other bodily fluids.

tomer satisfaction, we will build up our global support services

eters that other companies do not have, such as a hepatic
1

fibrosis marker* (M2BPGi) and an atopic dermatitis marker*

2(HISCLR TARC).
Going forward we will strengthen our support services byutilizing online support, which should further accelerate ourbusiness in the immunochemistry field. In addition to Japan,

entific support in the aim of raising the quality of healthcare.

we plan to establish a firm position in this area by making a

We have succeeded in riding the waves of this market’s

full-scale launch into the immunochemistry field in China andother Asian emerging markets.

more firmly. In other parts of Asia, we established a local
subsidiary to coordinate business throughout the 11 countries
in the Asia Pacific region. Responding to rising demand, in
September 2014 we relocated and expanded our reagent*1 Hepatic fibrosis marker: A reagent that measures the progressionof diseases caused by viral hepatitis (hepatic fibrosis), which could
advance to chronic hepatitis and cirrhosis, the cause of hepatic cancer.
*2 TARC assay: A hematology test using during health monitoring to determine numerically the degree of inflammation from atopic dermatitis.

factory in Singapore, tripling its capacity.

Investment

we will leverage our geographic advantage to build up ourof hematology, hemostasis and urinalysis, but also in the
immunochemistry field, which is a future focus. We willdevelop products tailored to meet regional needs, round out
our product portfolio in each field and reinforce our sales andsupport networks. Furthermore, to increase the quality of
testing, we will promote scientific support activities to provide physicians and laboratory technologists with informationon the latest trends in hematology.

network and redouble our scientific activities in response to* Companion diagnostic drugs: Drugs for clinical testing used to predict
the efficacy and side effects of drugs before using them for treatment,or for monitoring the effects of treatment, particularly to test drugs
developed at the same time as drugs for treatment.

advances in the life science and immunochemistry fields.
The scale of the Sysmex Group’s operations hasballooned in recent years. Against this backdrop, we are
adopting an approach we call “One Sysmex” to maximize

Transformation

Q
A

teamwork throughout the Group and ensure highly efficientand swift management.

What do you believe is necessary for
Sysmex to remain an attractive company
going forward?

To achieve these goals, we will recruit and cultivate globallyeffective human resources. We also intend to strengthen risk
management and reinforce Group management functions bymaking use of information and communication technologies.

I believe it is important to continue providing
value and confidence to our customers and otherstakeholders. High marks from its stakeholders

As the only top-10 IVD company headquartered in Asia,
comprehensive proposals, not only in our core businesses

is one reason Sysmex has been able to enjoy rapid growth.

heightens operability. We expanded our series lineup withWe also built a reagent factory in China and conducted sci-

growth in recent years, entrenching our presence evenits bases in Germany and the United States.

Key Strategies for Future GrowthProfitability

Q
A

What does Sysmex aim to achieve inpersonalized healthcare?

Technological innovation offers opportunities for
growth. Sysmex aims to become an advanced global
player that contributes to personalized healthcare.

Our involvement to date includes applying the One-Step
Nucleic Acid Amplification (OSNA) method, a unique technology we developed in 2008 in a system that—for the first time in

Investment

Q
A

What are Sysmex’s strengths in the
immunochemistry field, which is expected
to grow?

As a way of measuring proteins in the blood,
immunochemistry testing has a wide range ofapplications, from the diagnosis of infectious

diseases, cancers and other diseases to their courses oftreatment. As such, this testing plays an essential role in theearly detection of diseases and determination of therapies.
Sysmex’s HISCL-Series automated immunoassay systemallows for highly sensitive testing of all parameters in only 17

14

Sysmex Annual Report 2015

Japan—enabled the automated rapid detection of breast cancer
lymph node metastasis. Products employing this method are inplace at some 300 hospitals and healthcare institutions aroundthe world. Now in use for breast, colon and stomach cancer, we
are working to extend the method’s application to other typesof cancer and expanding our sales region overseas.
In 2013, we welcomed into the Sysmex Group a company
named Inostics (now Sysmex Inostics), which possesses
BEAMing technology. We are utilizing this technology to
expand the gene testing business. We already have collaborative development agreements in place with Bayer HealthCare
and Merck KGaA, through which we are pursuing the development of companion diagnostic drugs*. In October 2014,
Sysmex established a lab-assay base in Kobe, adding Japan to

Sysmex Annual Report 201515

Business Activities
Mid-Term Management Plan

Q
A

Ensuring Customer Value with
Leading-Edge ProductsWould you please outline Sysmex’s
financial policy?

We will reinforce growth and boost profitability,
as well as investing aggressively in R&D, capital
expenditures and M&A activities for future growth.

We will also promote transformation through IT infrastructureand human resource recruiting and development. In addition,
Sysmex has revised its dividend policy, raising the target
consolidated payout ratio from 20% to 30%. Going forward,
we aim to invest aggressively to enhance corporate value andensure appropriate returns to shareholders, and maintain an
ROE target of 18.0%.
As we move to a new development stage, I ask you toview our business from a mid- to long-term perspective andcontinue to support our endeavors.

Dividend Policy and Dividend Forecast
Sysmex aims to maintain a proper balance between aggressive investment, which is designed to sustain steady highgrowth, and returns to our shareholders as our earning power increases. In terms of returns to shareholders, we intend
to provide a stable dividend on a continuous basis and aim for a consolidated payout ratio of 30% under our basic policyof sharing the successes of our operations in line with business performance.
Dividend (annual) retroactively converted to basis following April 1, 2014, stock split
Dividend payout ratio (consolidated)

(Yen)
50

(%)
50

40.00

40

38.00

40

31.9%
29.4%

30

29.1%

29.1%

29.6%

18.9%

17.8%

17.9%

20.0%

20.00

12.00

3.125

3.75

2003

2004

5.00

14.00

20

10

6.50

0
2005

2006

2007

2008

Notes: Two-for-one stock split conducted on November 18, 2005
Two-for-one stock split conducted on April 1, 2011
Two-for-one stock split conducted on April 1, 2014

16

12.50

15.00

17.00

9.00

10

0

26.1%

27.00

22.6%
20

30

27.1%

27.0%

26.8%

W

e provide the instruments, reagents andservice and support needed
for tests to customers aroundthe world. In recent years, wehave also been moving ahead
with research to create newtests for cancer and otherillnesses.

Sysmex Annual Report 2015

2009

2010

2011

2012

2013

2014

2015

2016
(Forecast)(Years to March 31)

Misato Nishikawa
Production Control,
Instrument Production

Sysmex Annual Report 201517

Milestones of Growth(¥ billion)

Q Mar. 2000

Q Apr. 2007

Q Oct. 2008

Q Apr. 2011

Q Oct. 2013

Promoted to the First Section of the Tokyo
Stock Exchange and the Osaka Securities
Exchange.

Established a Group Corporate Philosophy, the“Sysmex Way.”

Renewed the new corporate
logo on the occasion of the40th anniversary of theCompany’s establishment.

Transfer from Katakura Industries Co., Ltd. of its
Research Institute of Biological Science.

Converted Inostics GmbH, a moleculardiagnostic technology, to a subsidiary.

Q Aug. 2013

Q Apr. 2014

Established Long-Term Environmental Objectives.

Established Medicaroid Corporation with Kawasaki
Heavy Industries, Ltd., with a view to developing
medical robots.

Carried out a two-for-one stock split. (Also
conducted stock splits in November 2005 andApril 2011.)

Formed a commercial joint venture with bioMérieux
for the Japanese in-vitro diagnostics market.

Q Jul. 2010

Q Sep. 2013

Q Mar. 2015

Launched joint business with IDEXX, leader inanimal diagnostics.

Converted Partec GmbH, a pioneer in FCM
technology, to a subsidiary.

Established the Global Communication Centeras a place to facilitate unfetteredcommunication and prompt ideas.

190

Q Jan. 2000

Q May 2005

Q Oct. 2007

Q Nov. 2008

Q Jun. 2014180

Founded a Shanghai subsidiary, Sysmex Shanghai.

Establishment of the Solution Center inKobe and concentration of the marketing
planning, customer support and scientiﬁc
support functions.

Released HISCL-2000i, a fully
automated immunoassay analyzer.

First insurance coverage inJapan for the Sysmex system
for rapid detection of breast
cancer lymph node metastasis.

Sysmex’s new instrument
factory, i-Square, openedin the city of Kakogawa.

170

Q Jun. 2007
Q Apr. 2002

Formed a global partnership with bioMérieux for
urinary screening in microbiology.

Consolidated Sysmex International Reagents asa subsidiary.

Q Apr. 2010

220

210

200

Q Jan. 2008
Q Apr. 2005

Introduction of the executive oﬃcer system as ameans of strengthening corporate governance.

Q Mar. 2000

Opened Central ResearchLaboratories in KobeHISCL-2000i

Business Activities

230

Era of Dramatic Advances (2000s to the Present)

RD-100i

Q Oct. 2008
Q Aug. 2006

Q Jun. 2003

Consolidation of two local subsidiaries in the US toestablish Sysmex America. Rebuilding of the sales
and support structure in the US.

Rapid Growth Period (1990s)
Q Mar. 1995

Signed an agreement with Dade International, aUS-based company (now Siemens) for
collaboration in selling coagulation product lines.

Q May 2011

Established Technopark,
Sysmex’s core R&D base;double the size of previous
facilities.

Released the industry's ﬁrst coagulation
analyzer with a multi-wavelengthpre-analytical check, the CS-2000i.
CS-2000i

160

Launched the XN-series of ﬂagshipmodels in the hematology ﬁeld.

150

XN-series

140

Q Jul. 1996

Q Oct. 1996

Listed stock on the Second Section of the Tokyo
Stock Exchange.

Hisashi Ietsugu becomes president,
now Chaiman and CEO.

Q May 1998

Signed a basic agreement with F. Hoﬀmann-La
Roche of Switzerland for global collaboration inmarketing and joint R&D in hematology ﬁeld.

130

Q Nov. 1995

Q Oct. 1998

120

Listed stock on the Second Section of the Osaka
Securities Exchange.

Change of company name to Sysmex Corporation
to mark the 30th anniversary of founding.
110

Q Aug. 1990

Q May 1991

Q Jun. 1995

Launch of an integrated hematology systemthat fully automated the entire process fromthe counting of blood cells throughpreparation ofsmear samples.

Established the UK subsidiary, now Sysmex UK,
commencing direct sales overseas.

Established a joint venture, operating
reagent business, now Jinan Sysmex
Medical Electronics, in China.

Q Q Feb. 1998
Established a Singaporean subsidiary, operating
reagent business including manufacturing, now
Sysmex Asia Paciﬁc.

Q Nov. 1995

Q Feb. 1999

Launch of the world’s ﬁrst analyzer oftangible constituents of urine that fully
automated inspections of urinary sediments.

Released XE
XE-2100
2100, an automatic
multi-item blood cell analyzer
XE-2100
deve
eveloped as a product of the 21st century.

Q Jul. 1993

Completed the Neumünster
Factory, in Germany, the base forreagent production in Europe.

Hemotology system
Q Feb. 1991

Q Dec. 1993

Established a reagent factory in Ono, Japan.

Established a US subsidiary, now Sysmex
Reagents America.

UF-100

100

90

80

70

The Early Years (1960s to 1980s)
60

Q Feb. 1968

Q Feb. 1978

TOA Medical Electronics was established for the
purpose of marketing medical electronics devices,
now Sysmex.

Launch of the Sysmex brand to mark the 10th
anniversary of founding.

Q Dec. 1963

Q Oct. 1979

Q Apr. 1986

TOA Electric successfully developed
and commercialized AutomatedHematology Analyzer “CC-1001” theﬁrst blood cell counter in Japan.

Established a US subsidiary, now Sysmex America.

Opened R&D base in the city of Kobe, now Technopark.

Q Oct. 1980

Q Mar. 1987

Established a European subsidiary, Sysmex Europe.

Launch of the immunochemistry analyzer,
which utilized an original immuno
immunoassay
method, marks entry into theheimmunochemistry segmenment.

CC-100150

Q May 1973

Q Oct. 1984

Established the Kakogawa instrument Factoryin Japan.

Launch of the automated coagulation analy
nalyzermarks entry into the hemostasis segment.

40

30

20

PAMIA-10

CA-10010Managemant

R&D

Production

Marketing

0
1963

1964

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992 1993 1994

1995 1996 1997

1998

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20102011 2012 2013 2014 2015

Net Sales
Note: 1 Sales from 1963 to 1968 are not counted as Sysmex sales.
2 Figures from 1969 to1994 are on a non-consolidated basis, and on a consolidated basis from 1995.

18

Sysmex Annual Report 2015

Sysmex Annual Report 201519

Sysmex at a GlanceSysmex derives 92% of its revenues from the diagnostics field in thebusiness of testing samples of human body fluids, such as bloodand urine, with hospital and commercial laboratories as its principal
customers. More specifically, our main field of business is hematology,
which involves measuring the number and type of red, white and otherblood cells. This business accounts for 64% of net sales.
Hematology uses specific reagents, and the sale of hematology
instruments leads to an automatic and sustainable source of revenue
through the sales of reagents and provision of maintenance services.
Furthermore, in addition to our mainstay field of hematology and
IVD* operations in such fields as urinalysis, immunochemistry, clinicalchemistry and hemostasis, we are reinforcing our commercialization of
the life science field.
Sysmex also operates in the IT field, providing testing information
systems and proposing solutions to meet demand for network systems
to manage medical data.

(¥ million)(Year ended March 31, 2015)

Japan

Americas

EMEA

China

 HU-BU

19,366

46,76947,997

31,12013,612

 Hematology

17,25744,54943,426

23,646

12,084

 Urinalysis

2,108

2,167

3,182

7,474

1,497

0

51

1,387

—

30

11,030

2,539

6,774

18,7263,029

 Immunochemistry

2,765

—

8

1,883

64

 Clinical chemistry

1,586

—

212

1,399

522

 Hemostasis

6,678

2,539

6,553

15,4432,442

 Life Science-BU

256

1

2,873

—

10

 Other business

9,900

241

5,952

2

1,171

 Other HU-BU
 ICH-BU

S(¥ million)(¥ million)

250,000

221,377
200,000

184,538

145,578

150,000

40,55349,551

 Q Other HU-BU

63.7%
7.4%
0.7%

Q ICH-BU

19.0%

 Q Immunochemistry

2.1%
1.7%
15.2%

 Q Urinalysis

1.4%
7.8%

Q Other business

100,000(Years ended March 31)

2011

2012

 HU-BU

89,06096,762 104,769 134,504

158,865

2013

2014

2015

 Hematology

79,56985,897

93,832

119,593

140,965

 Urinalysis

9,490

10,864

10,937

14,48916,430

—

—

—

421

1,469

21,93323,18926,36433,72042,100 Immunochemistry

2,704

2,047

2,072

2,116

4,722

 Clinical chemistry

3,242

3,498

3,080

3,703

3,720

 Hemostasis

33,657 Other HU-BU

 ICH-BU

15,987

17,643

21,211

27,899 LS-BU

1,204

850

1,060

1,726

3,141

 Other business

12,496

13,941

13,383

14,586

17,269HU-BU: Hematology and urinalysis business unit
ICH-BU: Immunochemistry, clinical chemistry and hemostasis business unit
LS-BU: Life science business unit

49,8490

2011

17,82320,000 Q Hematology

Q LS-BU

124,694

63,59860,00071.8%

 Q Hemostasis

134,744

50,00040,000Q HU-BU

 Q Clinical chemistry

80,000

2012

2013

2014

2015

(Years ended March 31)

0
Japan

ysmex enjoys a unique business model. On one hand, we conduct astock type of business in which we sell the instruments needed for
IVD, offer the specific reagents needed for long-term testing and provide
support and maintenance services. Reagents are more conducive toeconomies of scale than instruments, and deliver higher gross profit margins.
At the same time, instrument sales drive increased reagent usage. Therefore,
this segment should generate stable earnings growth and higher profitability.
Sales of reagents and the provision of maintenance and otherservices currently account for 68% of net sales. Industrywide, sales aretrending upward, with instrument sales focused on the second andfourth quarters of the fiscal year.

Asia-Pacific(¥ million)* Acronym for in-vitro diagnostics.

Product Segments

Sales Composition by Business

Net Sales by Destination and BusinessBusiness Activities

Business Segments

Americas

EMEA

China

Asia-Paciﬁc

Sales Composition by ProductNet Sales by Destination and Product(¥ million)(Year ended March 31, 2015)

Japan

Americas

EMEA

China

Asia-Pacific Instruments

11,55015,746

16,054

22,624

5,483

 Reagents

22,16016,91330,26926,8059,228

 Maintenance services

4,155

10,001

6,612

357

677

 Others

2,687

6,889

10,66161

2,434(¥ million)

221,377
200,000

184,538
145,578

150,000

124,694(¥ million)

80,00040,553

134,744

49,84949,551

0
EMEA

2012

2013

2014

2015

 Instruments

41,74946,14247,86757,08971,461

 Reagents

55,291

59,906

66,50588,163

105,378

 Maintenance services

12,14012,823

14,13018,07921,804

 Others

15,514

15,873

17,076

21,20722,734

Q Reagents

17,82320,000Americas

2011

Q Instruments

50,000Japan(Years ended March 31)

100,000

63,59860,00040,000(¥ million)

250,000

China

Asia-Paciﬁc

Q Maintenance

0

2011

2012

2013

2014

2015

32.3%
47.6%

services

9.8%

Q Others

10.3%(Years ended March 31)

Regional Segments by Destination

S

ysmex supplies products and services to customers in more than
190 countries. Sales in three key regions—Japan, EMEA and theAmericas—account for 69% of net sales*1. We are also accelerating
business development in China, which is experiencing remarkably
strong economic growth, and the Asia Pacific region. We are steadily
increasing our presence in emerging markets*2, which currently
account for 34% of net sales.
*1 Net sales by destination is defined as the sales amount recorded by Group companies
to customers in a particular region. However, net sales by geographical region refers to
the sales amount made by a Group company in a particular location.
*2 Emerging markets: China, Southeast Asia, South Asia, Latin America, East Europe,
Russia, Middle East, Africa
Advanced countries: Other than those above

20

Sysmex Annual Report 2015(¥ million)

Sales Composition by Destination

250,000(¥ million)(Years ended March 31)

2011

2012

2013

2014

2015

 Japan

38,541

39,73540,19040,31740,554

 Americas

26,53528,60730,76539,92749,552

 EMEA

35,41437,37039,58753,386

63,598

 China Asia Pacific

15,093

19,29924,43036,26949,849

9,111

9,733

10,606

14,63917,824

221,377
200,000

184,538
145,578

150,000
124,694

134,744

100,000
Q Japan

0

18.3%
22.4%
Q EMEA
28.7%
Q China
22.5%
Q Asia Paciﬁc 8.1%
Q Americas

50,000

2011

2012

2013

2014

2015

(Years ended March 31)

Sysmex Annual Report 201521

Market Overview and Sysmex’s Position

Product Strategies
HU Business Unit

Clinical Laboratory Testing Categories
Examination

Diagnosis and Treatment

RecoveryDiagnostic Support
Monitoring Eﬀects of TherapyHematology

Hematology tests are a type of screening that counts red, whiteor other blood cells to determine whether a more detailed
examination is necessary. In addition to instruments, these tests
require specific reagents, which constitutes an ongoing demand.
Sysmex estimates that the global hematology market accounts
for annual sales of $3,100 million. Furthermore, the market isdominated by only three major suppliers: Sysmex, Beckman
Coulter (Danaher) and Abbott. Nevertheless, we became theglobal leader in the field of hematology in 2007, and we are
steadily expanding our share of the market.
Hematology analyzers typically are identified by the
number of white blood cell types they distinguish: three or five.

Three-part white blood cell differentiation analyzers employ
relatively simple testing principles and have the advantage ofbeing compact and having low running costs, as they require few
reagents. Five-part white blood cell differentiation analyzers, on
the other hand, have a higher clinical significance, as they offer
the more accurate and precise measurement of five types ofwhite blood cell, enabling various complaints and blood disorders to be analyzed in more detail. In addition, analysis systems(five-part white blood cell differentiation instrument transportsystems) mainly at large-scale facilities are realizing efficiency
gains through the use of robotics.

Business Activities

C

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

Clinical Laboratory Testing
Sysmex’s Business Domains

ȉ+HPDWRORJ\  ȉ+HPRVWDVLVȉ8ULQDO\VLV ȉ,PPXQRFKHPLVWU\
ȉ&OLQLFDOFKHPLVWU\ȉ;UD\V&7VFDQQLQJȉ(OHFWURFDUGLRJUDPVȉ5HVSLUDWRU\IXQFWLRQWHVWLQJ ȉ(OHFWURHQFHSKDORJUDPVDQGRWKHUV'LDJQRVWLFVIRUPHGLFDOFKHFNXSVSysmex’s business in the IVD domain involves the provision of instruments, reagents and laboratory systems around the globe
in such fields as hematology, urinalysis, immunochemistry, clinical chemistry and hemostasis. At present, Sysmex is among the
top 10 IVD companies in the world, and the only leader that hails
from Asia.
Fields of Expansion by Region(As of June 30, 2015)
Leveraging the strength of this geographical advantage, we
Japan
China
AP
Americas EMEA
were an early proponent of a strategic focus on Asia. The Group
Hematology
Yes
Yes
Yes
Yes
Yes
is developing its business as an integrated supplier in various
Urinalysis
fields in Japan, China and the Asia Pacific region.
Yes
Yes
Yes
Yes
Yes
(Urine sediment)
In the Americas and EMEA, however, we maximize our
Immunochemistry
Yes
Yes
Yes
management resources by strategically concentrating our sales
Clinical
Yes
Yes
Yes
efforts on fields of particular expertise: hematology, urinalysis
chemistryand hemostasis.
Hemostasis

Yes

Yes

Yes

Yes

Immunochemistry
Clinical chemistry
Hemostasis
POC (excluding SMBG*)
Others53,0003,100Others

1,000(Urine sediment 320)

Hematology$3,100 million

18,000
7,400
1,800
7,000
14,700(Sysmex estimates)

SysmexS

XN-9000(Transport system)

XS-Series
This high-performance instrument provides fivepart white blood cell differentiation and good
operability in a compact body.

(Three-part white blood cell diﬀerentiation analyzers)

IVD total
Hematology
Urinalysis

Market size ($ million)

XN-2000(Twin module)This compact model carries forth the high levels of functionality and operability of the XN-Series. In addition to
five-part white blood cell differentiation, the XN-L-Series
is one of the world’s smallest instrument in its class, offering high-clinical-value reticulocyte measurement anda body fluid mode.

XN-450Information Diversity

Segment

XN-1000(Single module)

XN-L-Series

S

Diagnostics Market

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

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

In-Vivo Diagnostics

Specialization

In-Vitro Diagnostics

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

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

Reagents
Hematology testing requires specific reagentsfor dilution, hemolysis and staining, as well as foruse in analyzers. We also manufacture reagentsfor other areas, including urinalysis, immunochemistry, clinical chemistry and hemostasis.

Animal Diagnostics
In 2010, we formed a business alliance with IDEXX Laboratories, Inc., a leader
in this field. Under this accord, we began providing hematology analyzers foranimals on an OEM basis and selling them via IDEXX Laboratories’ networks.

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

* Self monitoring of blood glucose

Eﬃciency and Handling Capability

22

Sysmex Annual Report 2015

Scale of Laboratory

Sysmex Annual Report 201523

Product Strategies

HU Business Unit
Urinalysis

Urinalysis entails testing for the presence of sugar, protein or
blood in urine and can be broadly divided into two types: qualitative urinalysis and quantitative urinalysis. The first type involves
dipping a test paper into urine to determine whether theabovementioned solids are present. In the second, the quantitiesof these substances are analyzed. Sysmex estimates that the
global urinalysis market accounts for sales of $1,000 million,
with urinalysis sediment making up $320 million. We introduced
the world’s first urine formed sediment analysis system—the UF
series—that uses the flow cytometry method. This series enjoys



an excellent reputation with customers and has the leading
share of the global market for urine sediment analysis.
UF-1000i
The UF-1000i automatically measures
red blood cells, white blood cells andother formed elements in the urine. The
instrument provides information usefulin diagnosing and treating urinary-tract
infections and diseases of the renal/
urinary system.

Other HU-BU

Hemostasis

Hemostasis involves testing for two blood functions: coagulation
or clotting; and fibrinolysis, the process by which blood clots
are broken down. By testing specimens of blood plasma, it ispossible to diagnose hemophilia and thrombosis and to monitor
their treatment. Furthermore, testing blood beforehand enables
healthcare professionals to determine whether blood is likely tocoagulate properly during surgery.
As a rule, hemostasis tests can be performed using generalpurpose reagents, rather than specific reagents.

Sysmex estimates that the global hemostasis segment
generates annual sales of $1,800 million. In 1995, we concluded a
distribution agreement with Siemens (previously, Dade BehringInc.), forging a synergistic relationship that reinforced ourrespective strengths in the hematology segment. As a result, thisshared business now accounts for the leading share of the global
market for coagulation analyzers.

Business Activities

ICH Business Unit

La-vietal LS

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

La-vietal is a clinical testing instrument system that links clinical testing instruments and other systems
to provide an efficient operating
environment.

CS-5100

CS-1600

CA-600

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

Carrying forward the core performance and functionality of the CS-5100, the CS-1600 is more compact and easy to use. This model targets laboratories
that run a relatively small number of tests, as well as
use as a backup instrument.

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

ICH Business Unit

Immunochemistry

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

market at $18,000 million—making it the largest category in the
IVD field, and the market is expected to expand.
We aim to concentrate on developing sales in Japan of the
HISCL-Series of fully automated immunoassay analyzers thatenable highly sensitive, high-speed assays. Going forward, we
intend to augment our lineup of related reagents as we continue
making a full-fledged entry into the China and AP regions.

LS Business Unit
In 2006, the Sysmex-developed system for rapid detection ofbreast cancer lymph node metastasis based on the OSNA method
was launched in EMEA. This system was covered by the Japanesenational health insurance program two years later, in 2008, andwe are steadily introducing this system to markets in EMEA andJapan. In 2013, insurance coverage expanded to include the rapid
detection of lymph node metastasis of colon and stomach cancer,
as well as breast cancer.
In addition, in 2013 we commenced sales (for research) inJapan of a gene expression analysis assay service (Curebest™
95GC Breast), that provides research data that can be used to
predict the recurrence of breast cancer.

RD-100i

LYNOAMP BCHISCL-5000
Capable of measurement using minute samples, highly sensitive and providing
rapid measurement results in only 17 minutes, the HISCL-5000 simultaneously
measures up to 24 parameters and connects flexibly to transport systems.
By meeting laboratories’ needs in a flexible manner, this instrument contributes to more efficient testing operations. Furthermore, the functionality
for connecting with Sysmex’s unique SNCS support service is provided as
standard, allowing product operating status to be monitored on line.



HISCL-800
In addition to carrying forward HISCL-Series characteristics, the HISCL-800
is space saving, with a footprint approximately 60% the width of the HISCL-5000. The model is well suited not only to regular testing but also to avariety of needs at healthcare institutions, including urgent testing and testingfor specific parameters.

Clinical Chemistry

Clinical chemistry involves examining the enzymes, sugars andproteins in blood serum and plasma to determine the nutritional
status, liver and kidney functions, and testing for contraction of
conditions such as hyperlipidemia and arteriosclerosis.
Like hematology, clinical chemistry is commonly performed
around the world not only at times of illness, but also during
routine health checkups. Accordingly, the total number of
examinations is extremely high.
Sysmex estimates that the global clinical chemistry market
accounts for sales of $7,400 million, making it the next-largest
market in the IVD domain, after immunochemistry. Among othercontributors to demand growth is that as standards of living
improve, emerging economies are likely to experience increases
in such diseases as diabetes.
Sysmex has signed agreements with JEOL Ltd. and Furuno
Electric Co., Ltd., involving automated clinical chemistry
analyzers and is leveraging its sales
network in China as well as AP
region to boost sales.

Other Business
Peripheral artery monitoring devices that can measure estimatedvalues for hemoglobin levels without blood sampling are being
introduced and used in various locations as advisory tools formonitoring athletic condition and dietary habits.
In 2011, Sysmex accepted the transfer from Katakura
Industries Co., Ltd., of the protein production services that
until then had been contracted to the company. Based onthese operations, we launched the ProCube business, providing
numerous pharmaceutical companies with proteins used in drug
development and testing.

ASTRIM FITThis non-invasive blood vessel monitor
measures hemoglobin concentrations andblood-vessel width through near-infrared
spectroscopic images simply by placing afinger on the detector. There is no need forblood sampling.

Reagents

24

Sysmex Annual Report 2015

Sysmex Annual Report 201525

Sysmex’s State-of-the-Art Technologies

Flow Cytometry: One of Sysmex’s Core Technologies

Hematology testing requires the separation of blood cells bytype according to size and cell information, and their numbers

Blood cells can be broadly divided into three categories:
red blood cells, white blood cells and platelets. Platelets

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

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

Red blood cells, which are produced by stem cells locatedblood vessels. The sheath flow electrical resistance methodin the marrow of bones such as the sternum, femur anddistinguishes red blood cells from other types of cells in thetibia, are a major constituent of the blood. These cells trans-

blood and is the basic principal used for determining red

port oxygen to tissue cells throughout the body and moveblood cell counts.

Business Activities

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

carbon dioxide out.

must be measured accurately.
In its mainstay field of hematology, Sysmex employs

are the smallest in diameter, at around 2 micrometers, while

flow cytometry to measure the number of white blood cells

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

and platelets.

Three Processes in Counting Red Blood Cells

Flow Cytometry Method
With flow cytometry, the target cells are stained with a special
reagent and then irradiated using a laser diode to capture
information on cell size and internal structure. This method
detects the five different types* of white blood cell, as well as ofany abnormal cells. Flow cytometry provides clinically distinct
information depending on the numbers of each of the five typesof white blood cells and differs according to the presence of
inflammation, viruses or allergies. Although in the past sheathflow DC detection was the only method used in counting
platelets, flow cytometry substantially increases the level ofprecision at low values, as it can be used to measure low platelet
counts. This approach allows preventive platelet transfusions
to be reduced, thereby reducing the side effects of transfusions
and raising patient QOL. In the field of urinalysis, flow cytometry
is used in fully automated urine cell analyzers. This technology
could be used in the future in instruments to enhance the efficiency of cervical cancer screening tests. In this way, Sysmex flow
cytometry is becoming a core technology that has a wide rangeof potential applications.

In 2013 Sysmex acquired Partec GmbH, a pioneer in FCM
technology. By combining the technologies that Sysmex has
cultivated to date with those that Partec possesses, we expect togenerate synergies and create new value.

Accurate Dilution* Each of the five types of white blood cell—neutrophil, lymphocyte, monocyte,
eosinophil and basophil—has a different shape and function.

Laser diode

Collimator
lens

Spectrum filter
Dichroic
mirror

Accurate dilution

Avalanche
photodiodePhotodiode*1

Condenser lensBeam stopper

Condenser lensPassing cells one by
one through thedetection aperture

Flow cell
Photodiode: Red blood cell
: White blood cell
: Platelet

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

26

*2
Side-scattered light intensity

Information on RNA and DNA amounts

Side-scattered
light intensity

Information concerning the internal
structure of cells (nucleus shape,presence of cell granules, etc.)

Forward-scattered
light intensity

Information on cell size

Counting cells by
the electric signals

Forward-scattered
light intensity*4
Laser irradiation

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

Stream of ﬂuid
that forms a sheath*3

Lateral fluorescentlight intensity

Sysmex Annual Report 2015

Lateral ﬂuorescent light intensity

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

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

Sysmex Annual Report 201527

Customer Feedback

Sysmex Inostics, which is pursuing leading-edge R&D in cancer gene testing, possesses BEAMing
technology for the analysis of minute quantities of cancer-derived genes circulating in the blood.

Asahikawa Medical University Hospital has introduced an XN-Series multiparameter automatedhematology analyzer. We asked the hospital to describe the background for this decision, as
well as their impressions about the instrument’s operation.

In recent years, expectations have been growing about the

tests were performed by removing a tissue specimen during

realization of personalized healthcare that could provide

surgery. However, BEAMing technology allows cancer genetic

treatments optimized for individual patients to improve

marker testing to be carried out using blood, with ultrahighpatient quality of life (QOL) and curtail medical expenses.

sensitivity at the same level as traditional tissue testing.

Sysmex acquired Inostics in 2013 to expand its in-vitro

Tests that rely on blood reduce the burden on the patient at

diagnostic technology platform toward the realization of

the time of specimen collecting and facilitate repeat testing,personalized healthcare.

allowing for the monitoring of cancer treatment, including theSysmex Inostics is making progress on BEAMing technol-

Previously, the analysis process employed in BEAMing

genetic markers in the blood with extremely high sensitivity

technology was largely manual. By applying Sysmex’s accumu-

and developed a business centered on a lab assay service.

lated expertise in the automation of testing equipment, we are

Sysmex Inostics has a clinical testing laboratory at Johns

working to provide a new solution by reducing labor require-

Hopkins University—a world leader in medicine—where it

ments and shortening the time required for this process.

collaborates with some of the world’s most prominent cancer

In 2014, Sysmex established a lab-assay base in Kobe,

researchers as it pushes forward with R&D involving leading-adding Japan to its bases in Germany and the United States.
Going forward, Sysmex will continue working to develop

BEAMing is a digital PCR technology that combines a tiny

“Asahikawa Medical University Hospital has a core philosophy of contributing to regional healthcare and cultivating leadingedge medical professionals. Department of Medical Laboratory and Blood Center, which conducts testing around the clock,
365 days a year, strives to provide rapid and high-quality test data to meet demand in highly specialized clinical settings”.

Yoshie Kawahara
Department of Medical Laboratory and Blood Center
Asahikawa Medical University Hospital

early detection of cancer recurrence.

ogy that identifies and analyzes minute quantities of canceredge cancer gene testing.

and promote high-value testing that will contribute to improve-amount of gene with a magnetic bead inside a special bubble,

ments in QOL for patients, the standardization of medical

and then amplifies and detects the specific genetic marker

services and the development of personalized healthcare.

with ultrahigh sensitivity. In the past, cancer genetic marker

Q

A

What was the background for your decision
to introduce the XN-Series?

enabled us to shorten our average turnaround time fromto introduce the XN-Series. The first had to do

37 minutes, 4 seconds to 20 minutes, 5 seconds. This fasterwith shortening turnaround time between receipt

reporting of test results satisfied our doctors.

on blood tests were slow, and our doctors were asking us toto improve the personnel structure for testing operations
along with the mass update of our hematology analyzers.

Flow of the BEAMing Method
Amplify the target DNA
region separated from theblood plasma

Emulsion PCR

Hybridization

Flow Cytometry Separation

With a PCR reaction, amplify the target cancer
molecules in the water-in-oil emulsion into whicha magnetic bead and DNA molecule have been
encapsulated

On the magnetic bead,form a complementarycomplex of the cancer
cell (mutation) and
ﬂuorescent probe

Flow cytometry analysis
using the ﬂow
cytometry method

Tumor DNA
Wild-type DNA

Sysmex Annual Report 2015

A

In hematology and medical oncology testing, treatment often results in samples with low white blood
cell and platelet counts. Using the PLT-F channel*1

for platelets and the low-WBC mode*2 for white blood cells

We had heard that the XN-Series had an automatic
retest function so that after assessing the initial
measurement results, a second test could be

performed automatically if the sample needed to be retested.

and we looked forward to eliminating this problem. Since
introducing the XN-3000, we have been able to use the*1 PLT-F channel: By using a different detection method than conventional
methods, substantially increases measurement accuracy for low platelet
counts, associated with such diseases as thrombocytopenia.
*2 Low-WBC mode: Using this mode allows the number of neutrophils insamples with low white blood cell counts to be reported, something thatin the past was problematic for automated hematology analyzers, allowing
for chemotherapy monitoring and engraftment monitoring following
transplants. Using this mode helps reduce the number of working hours
required for visual classification and allows for the delivery of swift andaccurate test results.

automatic retest function for 98% of retested samples,
MutantDNA

dNTP(deoxy Nucleotide
Tri-Phosphate)

Polymerase primer

28

Wild-typeDNA

Q

How would you evaluate the precision of
the measured data?

provides highly precise data, and we are very satisfied.

ing samples for retesting to be picked up and reintroduced,
Wild-type signal

DNA
extraction

Ampliﬁed DNA

Now that the XN-Series is in place, how are
the results?

Until now, this process had been performed manually, requir-

Magnetic beads coated with primer
Water-in-oil
emulsionA

instrument eliminated the need to manually pick up samples,

There were two main factors behind our decisionof specimens and reporting. In the past, our reporting times

Q

increasing efficiency in line with our expectations. Also, thewhich reduced labor requirements. Introducing the XN-3000

accelerate the process. The second factor was the call for us

Gene ampliﬁcation processing

Business Activities

Sysmex’s State-of-the-Art Technologies

Mutant signal

Sysmex Annual Report 2015

29

Functional Structure
Development of Instruments

Fully AutomatedHematology Analyzers

1964
1965

Semi-AutomatedHematology Analyzers

Hemostasis
Analyzers

Urinalysis
Analyzers

Immunochemistry
Analyzers

Life Science
Analyzers

CC-10011970
CC-1001

1975

CC-1002

TU-100CC-107

CC-710CC-710

TU-110
TU-120CC-108CC-7201980

World’s ﬁrst
model to include
a sampler

CC-800CC-700E-5000E Series
E-5000/E-4000/
E-3000E-2500/
E-2000Fully AutomatedHematology Analyzers

1985

CC-180CC-170CC-150CC-130CA-100CA-100AA-100CA-3000
CA-4000
M-2000NE Series
NE-8000/NE-7000/
NE-6000/
NE-1500

F-800
F-500
F-300

PAMIA-10

YELLOW IRISPAMIA-10
PAMIA-100

CA-4100

K-1000K-1000SE-9000

K-2000PAMIA-20

K-4500CA-5000

UA-1000

CA-1000

UA-2000

CA-6000

UF-100UA-1000

F-810
F-610
F-310

PAMIA-30

K-800

SE-9000

World’s ﬁrst model to use
a semiconductor laser

1995

TU-100CC-110CC-120CC-780NE-8000

1990

Developing Value-Adding Technologies

F-820
F-520

PAMIA-50

SF-3000
XE-2100

KX-21

World’s highest
processing capacity

UF-50

PAMIA-40i

pocH-100i

GD-100pocH-100i

Low End
XS Series
XS-1000i/
XS-800i/
XS-500i

XE-5000

UF-100CA-1500

CA-7000

XT Series
XT-2000i/
XT-1800i

2005

CA-500 Series
CA-1500

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

2000

CA-500 Series

UF-110i
UF-1000i

CS-2000i

HISCL-2000i
RD-100i

CS-2000i

UF-500i

2010

XT-4000i

XN-Series

HISCL-2000i

CA-8000

XS-1000i

UF-1000i

UX-2000

CS-5100
CS-5100

RD-100i

CA-600 Series

HISCL-5000

XP Series

UX-2000HISCL-5000

XN-2000

XP-3002015
XN-L-Series

CS-2400
CS-2500HISCL-800

As a comprehensive diagnostics supplier, we havebuilt an integrated businessencompassing R&D, production, sales and after-sales
support to provide products
and services of high value tohealthcare facilities aroundthe world.

CS-1600HISCL-800

XN-450CS-1600

Masaki Umezawa
Product Development,
Hematology Product Engineering,
HU Business Unit

30

Sysmex Annual Report 2015

Sysmex Annual Report 201531

Perspective

Functional Structure

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

O

ur products are the primary source of our strength as asupport—ourselves. Furthermore, delivering customer feedback

Our delivery network also is extensive. With operations

We currently hold the leading share of the hematology

company. We develop in-house the instruments, reagentsto our R&D divisions quickly enables us to continuously aug-

at 64 locations in 43 countries, Sysmex provides products

markets in four of the regions in which we operate: Japan,

and software that are needed for in-vitro diagnostics, and havement product performance, operability and functionality, andand services to customers in some 190 countries. One of our

EMEA, China and Asia. We are number two in the United

built all operations—from production to sales and after-sales

develop high-value-added products rapidly and efficiently.

greatest strengths is our globally integrated structure span-

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

ning the R&D, production, sales and support functions.

Global Supply Chain
Research and Development

Sales and After-Sales Support

Japan

Japan

Technopark

Sysmex maintains extensive R&D operations, centered inJapan and with facilities globally, and the Company actively
collaborates with universities and research institutions
throughout the world. Technopark, our core R&D facility,
is also a symbol of the “Creation of ‘knowledge’ and its
inheritance” concept. Technopark serves as a springboard
for R&D to cultivate new diagnostic technologies andhigh-value-added products.

Overseas
R&D Center Europe
Sysmex Inostics (Germany)
Sysmex Partec (Germany)
R&D Center Americas
Diagnostic Reagent Development
Center in China

Sysmex TMC
Sysmex bioMérieux
Americas

Japan

Japan

i-Square

Sysmex International Reagents

Kakogawa Factory(two factories)
Overseas
Sysmex Reagents America (US)Sysmex do Brasil Industria e Comercio (Brazil)
Sysmex Europe (Germany)
Jinan Sysmex Medical Electronics (China)
Sysmex Wuxi (China)

Sysmex do Brasil Industria e Comercio(Brazil)and others
EuropeSysmex Europe (Germany)
Sysmex France (France)
Sysmex RUS (Russia)
Sysmex Middle East (U.A.E.)
Sysmex South Africa (South Africa)and others

In addition to a direct sales and support network, the useof alliances has enabled Sysmex to build a global sales
and support system tailored to meet local characteristics.
In 2014, we stepped up our sales and service systems
by establishing subsidiaries in Australia and Colombia.
We also have sales and service agreements in place with
Roche and Siemens in areas where we operate throughdistributors.

Customer needs

Indirect sales(Distributors)

China

Sysmex Asia Paciﬁc (Singapore)

Sysmex Shanghai (Shanghai)

Sysmex India (India)

Sysmex Hong Kong (Hong Kong)

Sysmex emphasizes local raw material procurement and product manufacturing, as this approach allows stable product supply and competitive pricing.
To meet growing reagent demand in emerging markets, we expanded ourreagent plant in Jinan, China, in 2012 and our reagent production facility in
Singapore in 2014. Similarly, we augmented our German reagent factory inJune 2015.

Direct sales

Worldwide customers

Production (Reagents)

In response to growing global demand for IVD instruments, we
commenced operations at i-Square, the Group’Group’ss core factory.
Through a four-factory structure centered on i-Square, we
provide a stable supply of high-quality products worldwide.
Sysmex products enjoy an excellent reputation with customers.
We have introduced quality and process management systems
to ensure quality in all processes from the testing and assemblyof components to product testing and shipment.

Metropolitan Area Service Center

Sysmex Canada (Canada)

Production (Instruments)

Sysmex RA

Seven branches, 12 sales oﬃces

Sysmex America (US)and others

Sysmex Medica

Solution Center

Asia Paciﬁc
Sysmex Asia Paciﬁc (Singapore)
Sysmex Indonesia (Indonesia)
Sysmex India (India)
Sysmex Australia (Australia)
and others
: Sysmex Corporation: Subsidiaries

32

Sysmex Annual Report 2015

Sysmex Annual Report 201533

Research and Development

 R&D Facilities

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

Sysmex’s inimitable R&D activities began in 1963 when

Sysmex has extended its business domains beyond

it became the first company in Japan to commercialize

hematology to cover such laboratory test fields as urinalysis,hematology analyzers. Since then, the Company has worked

immunochemistry, clinical chemistry, hemostasis and others.

to improve diagnostic test quality at the microscopic level

We are now working to broaden our R&D activities evenof blood cells by establishing core technologies for particle

further to create new diagnostic technologies for diseasemeasurement or bioassays and developing a range ofmanagement including hematology, immune diseases, infec-“industry-first” laboratory test technologies.

tious diseases, cancer and diabetes.

Sysmex is leveraging the abundant expertise it has culti-

Technopark (Japan)

R&D Center Europe (Germany)

Based on the concept of the “Creation of ‘Knowledge’ and

The R&D Center Europe was opened

Its Inheritance,” Technopark was established as the center ofin 2006 in Germany as the Company’s

R&D activities for the Sysmex Group in 2008, the 40th year offirst overseas research facility. Thisestablishment. In addition to having more than half of its area

center cooperates with research anddedicated to green space, laboratory and office space is locatedother institutions in the developmenton the same floor, providing an optimal R&D environment.

of new testing technologies targeting
diseases and other problems that areTechnopark, the core R&D center for the Sysmex Group,vated in the development of products to bring efficiency tointegrates the different technologies employed in our

the increasingly complicated diagnostic testing environment.

instruments, reagents and software, coupled with joint R&D

Another goal is to contribute to increased efficiency and lower

initiatives, enabling us to constantly incorporate customer

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

feedback into our product offerings. This congregation of

networks throughout the entire hospital for customers rang-

researchers and engineers in a host of fields—electrical,

ing from small clinics to large medical institutions.

mechanical, biological, chemical and IT, among others—

Sysmex considers R&D to be a key source of Company

encourages interaction and drives the creative fusion thatgrowth, and each year, we invest approximately 10% of net

generates new technologies. Sysmex is also working toward

sales in R&D.

the establishment of a global R&D structure. Centered at
Technopark in Japan, we are building a global R&D structure
linked with other facilities in Japan and overseas, including the
R&D Center Europe, R&D Center Americas and the Diagnostic
Reagent Development Center in China.
As part of our aggressive M&A and alliance activities touncommon in Japan.

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

expand our technology platforms for personalized healthcare,in 2013, we converted to subsidiaries two German companies,

R&D Center Americas (the United States)

Inostics GmbH and Partec GmbH. We are also stepping up

Sysmex established this center in 2013

collaboration with outside research institutions to promote

to promote joint research with U.S.

innovative technological developments that will create newhealthcare institutions in personalized

market opportunities.

and preventive medicine, as well as

In our organizational structure, the HU Business Unit

Functional Structure

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

to strategically evaluate technologies

oversees operations in the fields of hematology and urinalysis;

possessed by local companies in order tothe ICH Business Unit handles business in immunochemistry,

quickly acquire useful new technologies.

Partec GmbH Görlitz (Germany)
We converted this company to a subsidiary in 2013. A pioneer in flow cytometry
technology, Partec has accumulated
leading-edge expertise in the development of flow cytometry products. The
company also has a strong presencein emerging markets and developing
countries in the area of testing for infectious diseases.
Sysmex Inostics Gmbh (Germany)
This subsidiary possesses highly sensitive PCR technologies for measuringcancer genes circulating in the blood,
as well as other advanced moleculardiagnostic technologies. We converted
this company to a subsidiary in 2013.

Diagnostic Reagent Development Center in China (China)
In 2009, Sysmex opened this center,located within Sysmex Wuxi Co., Ltd.,in preparation for our entry in the
immunochemistry field.

clinical chemistry and hemostasis; and the LS Business Unit
supervises activities in the life science field. Each business unit
is a specialized organization that handles the overall management of its testing fields, including strategic planning, productplanning, product development, reagent production and global
product introductions. Through this approach, in each testing
field we aim to bolster the level of specialization and increase
the speed of decision-making and execution.

34

Sysmex Annual Report 2015

Joint Establishment of Medicaroid with a View to Developing
Medical Robots

I

n 2013, Sysmex and Kawasaki Heavy Industries, Ltd., together established
Medicaroid Corporation to pursue the development of medical robots. This
company will build frameworks for the development, design, manufacture,sale and after-sales service of medical robots, for which global demand is
expected to increase.

http://www.medicaroid.com/en/

Sysmex Annual Report 201535

Research and Development
Sysmex’s Initiatives toward Personalized Healthcare

Kaoru Asano
Member of the Managing Board
Senior Executive Officer
Managing Director
In charge of R&D Strategic PlanningA

and contribute to the development of personalized healthcare.
* BEAMing: An acronym for “Bead, Emulsion, Amplification, and Magnetics,”
this gene analysis method combines digital PCR (ultrahigh-sensitivity PCR)
and flow cytometry technologies. (See page 28 for details.)

As one of its technology platforms, for some time

Functional StructureQ

continue working to improve patient quality of quality of life

What initiatives is Sysmex undertaking to
make liquid biopsy a reality?

Sysmex has been pursuing R&D involving measurement technologies for genes, proteins and cells. To

further accelerate our growth as a company, we have also been
taking a proactive approach in M&A and alliance activities.
In 2013, we added to the Sysmex Group Inostics (nowSysmex Inostics), which possesses BEAMing* technology, andstepped up our collaboration with pharmaceutical companies
to jointly develop reagents that measure the effectiveness ofanti-cancer agents. That same year, we acquired Partec (nowSysmex Partec), a pioneer in flow cytometer technology, andInterview with the Executive Officer in Charge of R&D

we are expanding its functionality with the aim of increasing
our business opportunities.
Furthermore, in 2014 we invested in RIKEN GENESIS Co.,

Sysmex’s corporate philosophy defines the Company’s mission as “shaping the advancement ofhealthcare,” and we have adopted “creating new diagnostic technologies using liquid biopsy”
as a pillar of our R&D strategy for proactively pursuing development toward the realization of
personalized healthcare.

Q

A

Sysmex aims to realize personalized healthcare. How will this change healthcare?

Q

By combining the new technologies these companies
posses with Sysmex’s own technologies, we expect to generate synergies and create unique, proprietary technologies.
Going forward, through high-value testing, Sysmex will

Could you explain liquid biopsy* and how itwill drive personalized healthcare?

everyone, but this approach has its limits. Having enteredA

that have leaked in from diseased areas). As a result, it has

W
NE Next-generation

the post-genome area, healthcare is now advancing to the

become possible to test blood and body fluids to determine

sequencer (PSS)

stage of using gene, cell and protein analysis to specify andthe presence of disease—something that in the past was only

Digital PCR (BEAMing)

differentiate illnesses in a more detailed manner by looking at

possible by conducting tissue biopsies. Collecting samples forpatient characteristics. In other words, it has become possible

the testing of blood and body fluids, known as liquid biopsy,

for healthcare to take genetic background and environmental

places less of a burden on the patient. This approach, which

factors into account.

facilitates repeat testing (monitoring) has garnered a great

Until now, diagnosis and treatment has typically
been specific to individual illnesses. The trend
has been to target healthcare that works for

In recent years, it has been recognized that thederived components (genes, proteins and cells

deal of interest. However, the quantities of the disease-derived

that can be used in diagnosing the general risk of developing

components in the blood and bodily fluids are miniscule, which

diseases and in the early detection of recurrence. When using

makes testing difficult and requires measurement methods

medications to treat disease, drugs are being selected basedthat are more highly sensitive than those used in the past.

testing are heralded for allowing healthcare to be optimized

Sysmex is pursuing the realization of liquid biopsy as a

Sysmex Annual Report 2015

Toward liquid biopsy (leading to personalized healthcare)
medicine)

Sysmex Inostics* Liquid biopsy: Detection of cancer or other diseases by testing blood orother bodily fluids. This type of testing is less invasive than conventional
physical biopsies.

DigitalHISCLMI-FCM

Unique technologies

Merck Millipore

Enhanced competitiveness(introduction to CDx)
W

NE

W

NE

Clinical PCR

RIKEN GENESISClinical FCM

Ultrahighsensitivity HISCL

In-licensed technologies+

Sysmex Partec

Existing technologies

pillar of its R&D strategy toward personalized healthcare.

for individual patients, thereby reducing the physical burden,and curtailing healthcare costs.

Technology Platform Enhancement

blood and other body fluids contains disease-

For example, we are nearing the stage of realizing testingon their predicted efficacy and side effects. These types of36Ltd., which has a strong track record in gene analysis.

Sysmextechnologies

OSNA®

XN
(FCM)

HISCL
(chemiluminescence)

Gene measurement platform

Cell measurement platform

Protein measurement platform

PSS: Plasma-Safe-SeqS
MI-FCM: Molecular imaging ﬂow cytometry

Sysmex Annual Report 201537

Purchasing, Production and LogisticsA

the mass production of reagents using labor-saving facilities.

Improving Our Global Supply Chain Management
Systems by Reorganizing Logistics Locations andReconfiguring Supply flow

In 2012, we began operating a new automated production line

With regard to the physical function of delivering products toat the plant that makes reagent packages (paper containers

customers, we are reviewing logistics bases and reconfiguring

and reagent cartridges), including the concentrated reagent

the flow of supplies at individual overseas locations to ensure
the stable provision of products to customers around the world.

Japan are the Ono Factory and the Seishin Factory of Sysmex
International Reagents, a subsidiary. The Ono Factory handles

consistent supply of top-quality diagnostic and medical-

system to ensure compliance with the legal frameworks inused in our flagship XN-Series, which should significantly

treatment test products is essential to medical care

individual countries.

increase productivity. Meanwhile, our Seishin Factory handles

While maintaining appropriate inventories of instruments madethe production of reagents requiring advanced, specializedin Japan at each location in which we operate, we will alsoutilize a warehouse facility within i-Square—our new instrument

support. Sysmex stably procures the components and raw
materials of a quality appropriate to the development of aManufacturing Goes Digital, Reducing Work Timeknowledge that are used in non-hematology fields, such ascompany in healthcare field and conducts its procurement

The Kakogawa Factory uses Smart Pro, a production support

immunochemistry, clinical chemistry and hemostasis. Sysmex

plant—to deliver products efficiently around the world. For

activities in a manner that allows customers throughout

system that Sysmex developed in-house, to support factory

is also expanding its overseas production bases to meet

reagents, we have in place a distribution system whereby we

the world to use its products with confidence. In 2013, we

associates, manage processes and assist quality manage-

growing overseas demand and improve its ability to compete.

manufacture products in individual countries for timely delivery.

revised our Procurement Policies, which serve as a basis forment. We began using 3D CAD design data created at the

The Company currently has nine production facilities in seven

Furthermore, we are revising our package designs. As

cooperation with suppliers on enhancing levels of quality, costdevelopment stage to make work processes more visual,countries. By introducing at overseas facilities the expertise inwell as improvements to make packaging stronger, we arecompetitiveness and technology, as well as for establishing ahelping to shorten the time employees require to commit

manufacturing technologies that we have cultivated and theadopting environmentally friendly reusable packaging andstable procurement system and advancing CSR initiatives.

these processes to memory and contributing greatly to their

quality assurance systems that are in place at our Ono andrecyclable steel packaging. We are also reviewing packing

We also confirm quality and procurement aspects from theability to absorb multiple skills. Monitors located alongside

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

sizes and improving external descriptions to increase storage

R&D stage, and select suppliers that are highly cost-compet-

workbenches depict assembly and other processes in 3D,

efficient production system on a global basis.

and shipping efficiency.

itive. We also aim to quickly launch new products into mass

with an audio explanation accompanying each process.

In addition to fulfilling our responsibility for providing

production, transforming the engineering chain, including raw

This arrangement makes work processes easier for new

products, we will continue forging ahead with efforts to create amaterials purchasing and through concurrent engineering.

associates to understand, and helps to maintain quality andlogistics structure that contributes to low costs and high quality.

Functional Structure

Rigorous quality control and global supply chain management systems allow Sysmex to swiftly provide
a stable supply of products of consistently high quality to customers in more than 190 countries.

boost productivity.

Instruments Offering High “Made in Japan” Quality

We also use our information technologies to configure

For the manufacture of instruments, we have introduced

networks linking manufacturing facilities to the products

leading-edge production and quality control technologies tothemselves. This configuration automates the final productprovide products that are of high quality and offer high added

adjustment and testing processes, which cuts down signifi-

value. For this reason, we manufacture our instruments incantly on time to shipment.

Japan. We produce internally those parts that use proprietary
This reduces the risk of technology outflows and lessens

Global Reagent Manufacturing to Ensure Stable
Product Supplies

procurement risk, while allowing us to maintain stable

In its reagent production, Sysmex employs thorough quality

quality. For other parts, however, we maintain cooperative

management and makes every effort to provide reagents

relationships with parts makers who can meet our stringent

consistently and stably. Our core production facilities intechnologies or for which stable sourcing is problematic.

quality requirements, thereby ensuring a stable supply.
“Made in Japan” and the Sysmex brand have become bywords
for quality, and our products are recognized worldwide for
their reliability.
We are significantly boosting our manufacturing capacity
to meet growing global demand for IVD instruments. To thisend, we commenced operations at i-Square, our new instrument factory, in June 2014. This move, combined with the
expansion of two factories operated by domestic subsidiaries,
enable us to gradually increase the Group’s instrument
production capacity to three times its former level.
As some 80% of the instruments we produce are destined

Japan’s Manufacturing ProwessO

ur medical instruments involve numerous parts, each requiring extremely high levels of precision andquality. Sourcing these products is possible thanks to the technological prowess of Japan’s small andmedium-sized parts manufacturers.
Many of Japan’s small and medium-sized companies are world technology leaders, and we have forgedpartnerships with many of these companies, building up a network that delivers win–win results.
The XN-Series, for example, is a product of collaboration with business partners who have strong
technological capabilities and with whom we have relationships going back many years. Such cooperation
resulted in the development of a piercer that can accurately aspirate blood samples measuring only a
few microliters. A special titanium alloy improves robustness and rigidity, and the elaborate and smoothprocessing of its interior surface at a diameter of less than 1 mm enables more precise testing results.

for overseas markets, we are erecting a quality control

38

Sysmex Annual Report 2015

Sysmex Annual Report 201539

Purchasing, Production and Logistics

Reviewing Our Logistics Processes and Systems to Provide Increasingly Diverse Solutions

Instrument Production
i-Square (Japan)
The Group’s core instrument facility, which commenced
operations in June 2014, uses quality control systems to
produce highly reliable instruments based on international andindustrywide quality control standards, and the laws and regulations of destination countries. This plant and the Kakogawa

Factory together provide thecapacity to supply some 550
products to markets aroundthe world and employs
flexible production systems.

Reagent Production Facilities in JapanWe are reviewing our logistics processes and systems from a global perspective, promoting efficiency andreducing their environmental impact.

In 2012, Sysmex launched an internal project to shorten

Enhancing our loading simulations has enabled us to adjust

the lead times in its supply chain by reconfiguring

the timing of product shipments, increase our loading

its global logistics structure and improving processes.

ratio in shipping containers and decrease the number ofSince then, we have pushed forward with initiatives toshipments. Furthermore, in August 2014 we established arestructure overall logistics, gradually revising our global

warehouse within i-Square, our new factory in the city oflogistics structure and improving packaging. In addition

Kakogawa. We have created an efficient logistics structure

Ono Factory

Seishin Factory

to improving logistics, this initiative has reduced environ-so that for exports, container packaging and customs pro-

(Sysmex International Reagents)(Sysmex International Reagents)

mental impact. We are moving ahead in a staged manner

cedures can all be handled at the factory in an integrated

The Ono Factory in Japan is dedicated to the production of
about 1,300 reagents, centered on high-volume products forthe hematology and urinalysis segments. In 2012, we raised
reagent production capacity to 1.5 times the previous level.
The factory seeks to simultaneously increase quality, reduce
costs and mass produce by
optimizing automated andmanual operations.

The Seishin Factory is mainly responsible for the productionof reagents and draws on wide-ranging production technologies to produce a line of around 850 products ranging fromclinical chemistry to immunochemistry reagents, hemostasis
reagents and reagents for use as quality control materials. The
factory has also constructed
a flexible production system
to meet requirements forhighly diverse, low-volume
manufacturing.

with comprehensive measures that involve logistics depart-manner. We have also set up a system for direct transportments, materials departments, factories and affiliatedto customers in Japan. Taking full advantage of having ourcompanies overseas.

manufacturing facilities near the Port of Kobe has allowed

For instance, in addition to substantially shortening leadtimes, locally procuring some accessories for instruments
has lowered CO2 emissions by reducing transport distances.

Functional Structure Purchasing Production and Logistics Facilities

us to establish efficient transport routes for exports.
We are also reviewing sizes and designs of packaging
to conserve materials and boost the recycling ratio.
Optimized instrument package sizes lead to improvements
in storage and loading ratios. Introducing package designs
that consider the unique needs of export destinations also
contributes to resource savings and a higher recycling
ratio. To prevent damage during shipment overseas, inOverseas Reagent Production Facilities
In order to ensure a timely and stable supply of reagents throughout the global market, Sysmex operates reagent factories in Germany,
the United States, Brazil, China, Singapore and India.

40

be recycled as materials by the recipient. In Japan, we haveintroduced reusable packaging.

Americas

EMEA

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

In Europe, the location of
Sysmex’s first venture overseas,
we established a regent factory in Schleswing-Holstein,
Germany, in 1993. To meetrising demand for regents, we
increased the plant’s capacity in2007 and 2015.

China

Asia Pacific

The first of these was established in Jinan in 1995, followed bya plant in Wuxi in 2003. We have expanded the Jinan Factory,
which in 2012 increased its production capacity to five times
its level in 2010. The Wuxi
Factory was the first operated
by a non-Chinese company toreceive local pharmaceuticalmanufacturing approval.

To meet anticipated future demand growth, in 2014 werelocated the Singapore Factory, which opened in 1998, enabling
us to gradually triple output compared with current levels. Thisfactory, in combination withthe reagent factory in India weestablished in 2007, allows us
to provide a stable supply ofhigh-quality reagents broadly
throughout the Asia Pacificregion.

Sysmex Annual Report 2015

some regions, we have introduced steel packaging that can

Recognizing its growing responsibility to supply
products on a global scale, in the future Sysmex plans tocontinue improving its logistics efficiency and minimizing
its environmental footprint.

Sysmex Annual Report 2015

41

Sales and After-Sales Support

Delivering Specialized, High-Value-Added
Solutions Cultivated in Japan throughout the WorldSNCS is used by many customers and has earned a strong

Sysmex maintains seven branches and 12 sales offices in

the United States, European and other advanced countries, asJapan, constituting a top-class sales and support network inwell as in Asian and other emerging markets and is steadily

the domain of in-vitro diagnostics. We are in the process of

expanding the installed base.

reputation. The Company has launched the SNCS in Japan,

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

In 2012, we relocated Sysmex America, Inc., our regional

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

making skills and highly specialized support services we haveheadquarters for the Americas, in order to expand its opera-

physicians become unable to diagnose their patients.

engage in the sales of diagnostic instruments and reagents, but

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

tions. The expansion includes a new multipurpose building

We address this situation by providing after-sale services andprovide total solutions that employ information technology

service networks that are carefully matched to the needs ofthat houses the company’s virtual training studio. The virtual

scientific support, which inspire the trust and confidence ofto network the entire laboratory. This improves healthcare

individual markets.

training initiative provides customers with convenient, on line,

customers throughout the world. Confirming this satisfaction,

services in a number of ways, such as reducing patient waiting

In Japan, the Customer Support Center responds tosurvey results demonstrate that Sysmex has earned a solid

time and providing information on test results to the doctor.

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

better meet the needs of North American customers, who are

reputation with its customers for meeting their expectations

At present, we take this overarching approach mainly in our

specialists answer questions not only about instruments

spread over an extensive area.

for instrument performance, as well as for overall service

proposals to customers in developed countries. In contrast,

and reagents, but also about scientific matters. Sysmex has* Service for customers who have specific contracts.

performance.

in emerging markets where healthcare demand is risingestablished a system for rapidly dispatching service engineers

In line with ongoing medical advances, healthcare is grow-rapidly in line with economic growth, in addition to providing

by stepping up cooperation between the Customer Support

ing more sophisticated, and treatment regiments are changing

high-quality products without defects, products that have such

Center and Sysmex offices and sales offices across Japan.

and becoming more diverse. Customers in developed countries

specifications as high processing capacity and swift after-sales

are demanding ever more advanced and highly specialized

services are needed. In addition to providing products that

China, Germany and Singapore, and dispatches service engi-

testing, more efficient testing and even higher healthcare

meet regional demands such as these, we operate flexibly byneers to customer premises as necessary. In the United States,

service levels.

combining proprietary and distributor sales networks. In thesewhere customer support functions must cover extensive

ways, Sysmex concentrates on meeting the needs of individual

areas, close collaboration between call centers and serviceof testing to the delivery of results, we strive to shorten the

countries, building confidence and instilling confidence among

engineers allows Sysmex to respond rapidly to customer

lead time between a patient’s arrival at the reception desk andits customers.

requests. In addition, the Company is rolling out on a global

W

Instead of simply aiming to reduce the time from the start

Functional Structure

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

instructor-led education on the use of Sysmex products to

Sysmex America, Inc.,

Sysmex operates call centers in Japan, the United States,

scale the Sysmex Network Communication Systems (SNCS),

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

a support service that connects the Customer Support Center

Networkand customers’ products via the web for the online provisionof remote instrument maintenance and quality control. The

Virtual training studio

Customers

Customer Assessment in the United States (by IMV ServiceTrak™)• Survey of Customer Satisfaction
A survey of customer satisfaction published in 2015 has shown that Sysmex is ranked No. 1 in the United States for instrument
performance meeting expectations.
Instrument Performance Meets Expectations
Competitor 3
Industry Avg.
SysmexCompetitor 1
Competitor 2Competitor 4
A six-point scale was used for the years from 2000 to 2012. This was revised to a 10-point scale in 2013 to 2015.
2000–2012: 1=Very Poor 2=Poor 3=Fair 4=Good 5=Very Good 6=Excellent
2013–2015: 1 (Very Poor) through 10 (Excellent)Sysmex has Rated Highest for the Past 16 Years
5.6

9.5

5.4

9.0

5.2

8.5

5.0

8.0

4.8

7.5

4.6

7.0

4.4

6.5

4.2

9.09

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

6.0

8.49

2013

2014

2015

Sales Strategies

S

ysmex employs sales strategies tailored to the characteristics of the regions and countries where it operates. In Japan, North
America and parts of Europe and the Asia Pacific, we conduct direct sales, with Sysmex salespeople maintaining close relationships
with customers. In other parts of the world—particularly in emerging market areas—we have found indirect sales, which leverages
the long experience and expertise of local distributors, to be an effective approach. In China, for example, we employ more than 100
local distributors. In
Direct sales
64.7%
Latin America andIndirect sales
35.3%
30.8%
.8%
Russia, among other(As of March 31, 2015)
EMEA
1.3%
regions, we have7%
98.7%
Americasalliances in place totake advantage of
China
69.2%
69.2
Japan
the sales networks
100.0%%
operated by leading
global pharmaceutical
45.5%
4
54.5%
%
Net Sales
manufacturers.
43.7%
Asia
¥ 221,377
Paciﬁc56.3%
millionFounded in 1977, IMV continues to be a leading supplier of comprehensive clinical diagnostic and medical imaging market
research reports and site-specific databases for the healthcare industry.

42

Sysmex Annual Report 2015

Sysmex Annual Report 201543

Corporate Governance
Sales and After-Sales Support

Sponsoring Scientific Seminars for
Advancement of Healthcare

was attended by approximately 780 people. At the seminar,

To promote higher levels of healthcare service, Sysmex

clinical testing to doctors, nurses, laboratory technologist andprovides an ISO support service for healthcare institutions

other participants in China. Sysmex now conducts seminars

that are creating quality management systems. Leveraging theand other activities periodically in Thailand, Indonesia, India

expertise we have gained through ISO 9001 and ISO 14001

and other Asian countries and holds symposiums in EMEA

certification, as well as our experience as a manufacturer

and the Americas.

Cementing Group Value with
Trustworthy Management

we provided up-to-date information related to healthcare andof medical instruments, we consult with organizations on
earning certification under ISO 9001 and ISO 15189, as wellas other standards. Our services have been instrumental in
helping a number of customers gain ISO certification.
Sysmex sponsors hematology seminars around the world
to provide physicians and laboratory technologists withinformation on the latest trends in hematology. The Company
began conducting annual seminars in Japan in 1978 andexpanded this program to China in 1998. In 2014, we held theSysmex 17th Scientific Seminar in China in Kunming, which

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

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

Sysmex Network Communication Systems
Hospital

Sysmex

Network

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

Customer Support Center 1. Online Quality

Automated hematology
analyzer XN-Series andother Sysmex instruments

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



Failure Prediction Function
Linking the failure prediction function with field support enables
us to remotely monitor the status of the analyzer componentsof each instrument. We provide preemptive maintenance at thefirst sign an instrument is behaving in an abnormal fashion.

44

Sysmex Annual Report 2015

3. Preventive
MaintenanceChecks4. Failure
Prediction
Function
Note: Such services may not be available on some products and incertain regions.

We consider reinforcing
corporate governanceone of our most important
mportant
management topics.
ics. We
aim to maximize the overall
corporate value of the Groupthrough management
ment robustness, improved management
speed and efficiency.
ncy.
Kensuke Iizuka
Corporate Business Planningng
Executive Vice President

Sysmex Annual Report 201545

Corporate GovernanceGlobal Strategy Committee

Operating Committee

Executive Compensation

Sysmex has adopted the corporate auditor system. The cur-

The Global Strategy Committee consists of the chairman and

The Operating Committee consists of managers of divisions.

Sysmex determines executive compensation amounts

rent management organization consists of nine members of

CEO and senior executive officers. As a rule, this committee

The Committee meets once a month to find solutions toand calculation methods by making a clear link between

the Managing Board (one of whom is an outside member ofmeets once a month to deliberate on the Group’s manage-

cross-functional problems. The Managing Board met 12 times

operating performance and responsibility for achievement.

the Managing Board), four corporate auditors (including two

ment direction and important strategic issues. The Global

in the fiscal year ended March 31, 2015.

Compensation for members of the Managing Board divides

outside auditors), and 20 executive officers (seven of whom

Strategy Committee met 13 times in the fiscal year ended

are also members of the Managing Board), and the Company

March 31, 2015.

has adopted the executive officer system to increase thebroadly into fixed and variable portions. Fixed compensation

Board of Auditors

is determined on the basis of a member’s position, while

The Board of Auditors consists of four corporate auditors, twovariable compensation varies depending on performance.

speed of decision making in the conduct of business andSteering Committeeof whom are outside auditors. The corporate auditors attend

Compensation for corporate auditors comprises only a fixed

respond quickly to changes in the business environment. In

The Steering Committee consists of the chairman and CEO

the Managing Board and Steering Committee meetings andportion. Compensation amounts are discussed and deter-

addition, by appointing outside members of the Managing

and executive officers. The committee meets once a month,

maintain systems for appropriately supervising the conduct ofmined by the Managing Board following deliberation by the

Board, we have reinforced the Managing Board supervisory

in principle, serving as a consultative body to the chairman

business on the part of the members of the Managing Board.

Compensation Committee.

function, and we have strengthened the auditor supervisory

and CEO to deliberate on important matters concerning the

The corporate auditors also maintain close communications

function by appointing external auditors.

Group’s business. The Steering Committee met 19 times in thewith the Internal Audit Office, exchanging information andfiscal year ended March 31, 2015.

opinions as necessary, and confirm and evaluate the ap-

Reasons for Appointing Outside Members of theManaging Board and Outside Corporate Auditors

propriateness of business execution. The Board of Auditors

Susumu Nishiura

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

Group Management Reporting Committee

will continue to enhance management soundness by engaging

Susumu Nishiura was appointed as an outside director in the

The Group Management Reporting Committee consists of thein appropriate supervision of the execution of business as

hope that he would execute his duties as an outside director

Managing Board

chairman and CEO and executive officers, directors of over-stipulated by law. The Board of Auditors works closely withadequately utilizing his abundant experiences and deep

The Managing Board consists of nine members. The board

seas regional headquarters, people in charge of domestic affili-

the accounting auditors on the audit plans report (annual)insight in corporate management.

meets regularly once a month to deliberate on important

ated companies and division managers. The committee meetsand the audit results reports (annual), exchanging information

management issues and convenes extraordinary meetings

once a quarter, in principle, reporting important mattersand opinions as necessary, such as when conducting internal

Kuniaki Maenaka

as necessary. The Managing Board met 14 times in the fiscal

concerning the Group’s operations. The Operating Committee

control audits related to financial reporting.

Kuniaki Maenaka was appointed as an outside corporateyear ended March 31, 2015.

met four times in the fiscal year ended March 31, 2015.

Corporate GovernanceManagement Organization

auditor in the hope that he would make use of his accounting

Certified Public Accountants Auditand financial expertise as a certified public accountant to

The Company has contracted with Deloitte Touche Tohmatsu

contribute to management soundness and transparency.

LLC to perform a certified public accountants audit. In addi-

Corporate Governance Structure
Shareholders’ Meeting
Election/Dismissal
Election/Dismissal

Election/Dismissal

Managing Board (Members of the Managing Board)

Nominating Committee

Accounting Auditors

tion to conducting an audit of the entire Sysmex Group, theKoichi OnishiCompany maintains an environment that makes it possible

Koichi Onishi was appointed as an outside corporate auditor

to rapidly cope with changes in the accounting system. The

in the hope that he would audit the Company adequately

Company has contracts in place with several law offices andutilizing his abundant experience and deep insight as amaintains a structure to solicit and obtain advice on important

corporate manager.

matters as necessary.
Board of Auditors(Corporate Auditors)

Compensation Paid to the Members of the Board and Corporate Auditors

Compensation Committee
President & CEO

Auditing

Auditing

Global Strategy Committee

Internal Audit Office

Steering Committee

Risk Management Committee

Executive category

Members of the Managing Board(excluding outside members)

Corporate auditors
Executive Officers
Divisions, Subsidiaries and Affiliates

46

Sysmex Annual Report 2015

(excluding outside corporate auditors)

Outside executives

Compensation breakdown, by category (Millions of yen)
Total executive
compensation
Basic
Retirement
Bonuses(Millions of yen) compensation Stock options
benefits

Number of
executives

799

236

125

437

—

8

36

36

—

—

—

2

11

11

—

—

—

4

Sysmex Annual Report 201547

Corporate GovernanceS

teering Committee meetings are a time of lively, forward-looking discussion, and theManaging Board takes due account of the results of Steering Committee considerations inmaking its decisions. During discussions, I consider it important to ensure that my viewpoint
incorporates increasing sales, securing profits and ensuring the appropriateness of investments in growth for enhancing corporate value.
The positioning of our long-term management targets and the content of the mid-term
management plan that went into effect in the fiscal year ending March 31, 2016, are aimed
Susumu Nishiura

at additional business expansion. Achieving these goals may require large-scale investments

Member of the Managing
Board (Outside)in growth, but confirming the effects of these investments and their profitability are also an
important part of my assignment. Also, in recent years Sysmex has globalized and rapidly
expanded its fields of operation. Internal rules need to be renewed and structures reset totake these developments into account. As an outside member of the Managing Board, I intend
to concentrate specifically on the internal control system, particularly compliance, as well as
the risk management system.

Internal Control Systems
Systems for Ensuring That the Execution of
Duties by Members of the Managing Board and
Employees Is Compliant with the Law and the
Articles of Incorporation
aboveboard business activities on the basis of observance ofmaking swifter operating decisions and respond quickly tolaws and regulations and high ethical standards” and main-changes in the business environment.

tains a system to ensure compliance as described below.
The Company perceives compliance breaches as one ofCompany ensures the efficient execution of business andits leading risks of losing society’s trust. Accordingly, underclarifies the Group decision-making process in accordance

the risk management structure for companies throughout thewith the organization regulations, scope of authority regula-Group we have established a Compliance Committee as thetions, affiliated company management regulations andorganization for overseeing compliance, and we are promot-

others. The Company establishes mid-term plans and annual

ing and reinforcing Group compliance.

management plans, periodically confirms the progress madeWe have formulated a Group Compliance Code thatapplies to executives and employees and conduct education
place an internal reporting system that aims to quickly detectand correct violations of the law or Articles of Incorporation,

The Company ensures groupwide compliance in accordanceshareholder-oriented perspective. At the same time, in filling the role I believe I invigorate theand conduct audits of the compliance structure through thewith the global compliance code applied to all the members

internal corporate culture and management sentiment in a novel way.

Internal Audit Office.

of the Managing Board and employees of the Group. In
conformance with regulations established with respect torisk management, the Company maintains groupwide risk

their expectations and whether we are properly fulfilling our social responsibilities worldwide.

Systems for the Retention and Management ofInformation Relating to the Execution of Duties by
Members of the Managing Board

I intend to continue conducting my tasks from the viewpoint of whether management is

Sysmex has established global document management regula-

Audit Office supervises groupwide auditing activities from a

operating in an accountable manner in the scrutinizing eyes of overseas and domestic stake-tions. In accordance with these regulations, the Company

regional and companywide perspective.

holders and whether management is contributing to increases in corporate value. Also, I willappropriately stores and manages the minutes of Managing

Based on regulations related to the management ofwork to ensure that the risk that tends to occur at quantitative and qualitative development

Board and other important meetings, as well as information

subsidiaries, the Company respects the autonomy of thestages is being appropriately understood and preemptively addressed and remain alert to any

related to the execution of operations by members of the

management of subsidiaries and affiliates and ensures thesign of problems relating to internal control.

Managing Board, maintaining this information in a state

appropriateness of business activities throughout the corpo-

available for inspection as necessary for an appropriate period

rate group by such means as receiving periodic reports on theof time.

details of the business of subsidiaries and advance discussion

T

Sysmex Annual Report 2015

with those plans, and takes any necessary measures.

handed down through the management decision-making process from a third-party,

overseas markets and overseas stakeholders view our management, whether our actions match48

With respect to the management of business, they role as an outside corporate auditor is to look objectively at the conclusions

accountant working in the overseas business arena, by concentrating in particular on how

Corporate Auditor (Outside)supervise the execution of operations. The Company has
introduced the executive officer system to be capable of

I aim to speak and act in ways that reflect my work experience, which is entirely as an

Koichi Onishi

institution to make important management decisions andSystems to Ensure the Appropriateness of Business
Activities in the Corporate GroupM

Corporate Auditor (Outside)

The Company has positioned the Managing Board as theSysmex defines compliance as “the conduct of open andand training to ensure thorough compliance. We have inKuniaki Maenaka

Systems to Ensure That Members of the Managing
Board Execute Their Duties Efficiently

his was the first year of my appointment, and I spent a significant amount of time getting
the lay of the land. I visited the Company’s domestic branches, sales offices and Groupmanagement systems based on those regulations. Internal
audit offices are in place at subsidiaries, and Sysmex’s Internal

concerning important matters.

companies, making a real effort to put aside any opinions I might have formed and consider

Regulations Concerning the Management of Risk
and Other Systems

Employee Assistance of Corporate Auditors

the true state of things where they occur and look at conditions in an objective light.

To maintain a structure concerning risk management, theEmployees of the Internal Audit Office may assist the

At meetings of the Steering Committee and Managing Board, I make it a point to ask

entire Group complies with risk management regulations

Company’s corporate auditors in their audits if necessary.

questions from a proactive governance- and compliance-oriented perspective; this may simply

established by the Risk Management Committee for the

At the request of the corporate auditors, the Company

be a matter of course for people within the Company.

integrated management of risk throughout the Company andprovides full-time staff to assist the Board of Auditors.

As one might expect in a rapidly growing company, there is a pervading and palpable

Corporate Governance

Messages from an Outside Members of the Managing Board and Outside Corporate Auditors

works to mitigate risks. The Risk Management Committee

Employees assigned to provide such assistance serve thesense of energy among the employees. I believe it may be necessary for the front line ofendeavors to discover foreseeable risks, select the most

corporate auditors as instructed, and the members of thebusiness to ensure that various regulations and further measures are in place. Going forward,

important of these risks, clarify the sections responsible forManaging Board discuss with the corporate auditors in

I intend to continue viewing the Company from an outsider’s perspective, while doing my

coping with risks, establish countermeasures and confirm theadvance personnel matters related to such support staff

utmost to enhance corporate value via thorough corporate governance and compliance.

executional status of these countermeasures.

(including appointment, transfers and reprimands).

Sysmex Annual Report 201549

Corporate GovernanceGroup. We established the Compliance Committee in 2013.

of security export controls and U.S. re-export regulations.

13485*. Of our 56 Group companies, 37 are certified under ISO

To ensure support for the expenses necessary for the corpo-

In addition, we are encouraging compliance in a manner that

Additionally, we perform audits to ensure controls are thor-

9001 and 18 under ISO 13485. To confirm that these manage-

rate auditors to execute their duties, each year the Company

reinforces the relationship between people responsible forough. Furthermore, to strengthen the security export systemment systems are operating appropriately, quality activities at

sets a budget in accordance with the audit plan. Appropriate

Group compliance and the people responsible for compli-

for the Group as a whole, we have introduced management

principal Group companies include management reviews andprocedures are also in place for handling additional expenses,

ance at affiliated companies. In 2014, we revised our global

systems that link with enterprise resource planning (ERP)

quality audits. The Company has introduced quality training to

if necessary for the corporate auditors to execute their duties.

compliance code, adding text to describe our thoughts on

systems at regional headquarters overseas and promote

promote an understanding of QMS, build individual employee

ethics in relation to research and development, prevention

thorough and efficient controls.

awareness of these systems and ultimately raise quality control

Items Related to Reporting to the Corporate
Auditors and Systems for Ensuring Effective andEfficient Auditing by the Corporate Auditorsof bribery, adherence to international guidelines such as theSysmex will continue to ensure thorough compliance tolevels. In addition to quality policy training for all employees

Universal Declaration on Human Rights, as well as researchremain a Company that stakeholders consider highly trustworthy.

groupwide, we also conduct specialized quality training forIf a corporate auditor discovers a violation of the law or thecode once every two years, in principle, to respond to changes

Risk Management

quality-related information throughout the Group and reinforce

Articles of Incorporation by an employee or executive or ain our internal and external environments.

To control groupwide risk management activities, Sysmex

our systems, each year we hold a conference attended byestablished a Risk Management Committee, which is chaired

Sysmex headquarters, each regional headquarters and people
from quality-related divisions at affiliated companies.

and development. We also set forth a bylaw for revising thisIn principle, Sysmex handles compliance-related problems

material fact that poses risk of causing significant damage

internally. However, to address potential issues that are

by a Risk Management Officer, the Group’s chief executive inreport of that fact in accordance with the prescribed regula-difficult to resolve within the organization, as an internal

charge of risk management. The Risk Management Committee

tions and procedures.

reporting system Sysmex has established “Campanula Lines”

identifies major risks having the potential to significantly

believe will affect investment decisions in light of our own

as points of contact. Employees can contact these two lines—

impact the Group’s business and consistently observes thestandards, as well as to observe applicable laws and regula-important meetings, read important documents such as

internal and external—for advice or to make are report via

results of risk response and monitoring by individual divisions

tions concerning securities trading and the Rules on Timely

approval requests, and may request reports from members of

telephone, post or e-mail. All information received is handled

and affiliated companies.

Disclosure of Corporate Information by the Issuer of Listed

the Managing Board and employees as necessary.

anonymously to protect the personal information of those

We have constructed a system to ensure compliance withWe make it a rule to disclose any information that we

Security and the Like established by stock exchanges.

providing the information and ensure against any disadvanta-

laws and standards around the world with regard to quality,

Compliancegeous treatment. We have also set up internal reporting lines

and we act accordingly. With regard to quality management

procedures to ensure the ongoing trust of a wide range

Based on our Corporate philosophy, the “Sysmex Way,”at Group companies overseas.

systems, essentially all Group companies with development andof stakeholders.

Sysmex has formulated internal control regulations

manufacturing functions have in place management systems in* ISO 1385: Quality management system for the manufacture of medical

regulations and going about our business boldly with a strongon export controls, and these have been approved by andaccordance with the international standards ISO 9001 or ISO

sense of ethics.” In accordance with this definition, we haveregistered with the proper authorities, the Ministry of Economy,

established a Global Compliance Code, in which particularly

Trade and Industry. We have also established a Security Export

important conformance rules for all executives and employees

Control Committee, which operates under the Complianceto abide by are compiled. We conduct training programs to

Committee. Based on our internal control regulations, we rein-

ensure the thorough permeation of the code within the orga-

force export controls and thoroughly confirm the purposes fornization. The code also applies to overseas Group companies,

which recipients will use exported products and technologies.

constructing an integrated compliance structure for the entire

We conduct workshops and e-learning to raise awarenesswe define our view of compliance as “respecting laws andCompliance StructureGroup Compliance Officer
Compliance Committee

Sysmex Group Companies
Compliance Officer of Group companies

Divisions50

specific departments and job types. Furthermore, to shareto the Company, the corporate auditor promptly receives a

The corporate auditors attend Managing Board and other

Sysmex Annual Report 2015

Corporate GovernancePolicy on Handling Audit Expenses

Sysmex will reinforce its risk and quality management

devices.

Risk Management StructureManaging Board

Chairman and CEO
Nomal risk
management

RM Officer/Risk Management Committee
Secretariat

Major crisis

Quality Meeting

Quality

Research Ethics Examination Committee

Research ethics

Internal Control Committee

Internal control

Security Export Control Committee

Security export control

Safety and Health Committee

Occupational health and safety

Environmental Management Committee

Environment

Compliance Committee

Including unfair trading

Business risk
management
department(General affairs)

Departments andsubsidiaries

Finance
Accounting and taxation
Information management
Procurement interruption
DisasterSysmex Annual Report 201551

Corporate GovernanceHisashi Ietsugu

Mitsuru Watanabe

Chairman, President and CEO

Member of the Managing Board and Senior Executive Officer
Managing Director
HU Business Unit

Sep. 1986 Joined the Company, Member of the Managing Board
Mar. 1990 Member of the Managing Board and Senior Executive Officer
Managing Director
Apr. 1996 Member of the Managing Board and Senior Executive Officer
Senior Managing Director (Representative Director)
Jun. 1996 President and CEO
Apr. 2013 Chairman, President and CEO (current)

Masayoshi Hayashi

Apr. 1980 Joined the Company
Apr. 2005 Executive Officer
Executive Vice President of R&D Strategic Planning
Apr. 2009 Executive Officer in charge of R&D Strategic Planning
Jun. 2009 Member of the Managing Board and Executive Officer
Apr. 2013 Member of the Managing Board and Senior Executive Officer
Managing Director (current)

Member of the Managing Board and Senior Executive Officer
Senior Managing Director

Kaoru Asano

Feb. 1972 Joined the Company
Jun. 1997 Member of the Managing Board
Executive Vice President of Business Development
Apr. 2005 Member of the Managing Board and Executive Officer
Apr. 2007 Member of the Managing Board and Senior Executive Officer
Managing Director
Apr. 2011 Member of the Managing Board and Senior Executive Officer
Senior Managing Director (current)

Yukio Nakajima
Member of the Managing Board and Senior Executive Officer
Senior Managing Director
Corporate Business Planning, Human Resources & General Affairs
Corporate Executive Office
Apr. 1973 Joined the Company
Jun. 1999 Member of the Managing Board
Executive Vice President of Corporate Business Planning
Apr. 2001 Member of the Managing Board
Executive Vice President of Corporate Business Planning
Vice President of Corporate Communication
Apr. 2005 Member of the Managing Board and Executive Officer
Vice President of Corporate Business Planning
Apr. 2009 Member of the Managing Board and Senior Executive Officer
Managing Director
Apr. 2013 Member of the Managing Board and Senior Executive Officer
Senior Managing Director (current)

Koji Tamura
Member of the Managing Board and Senior Executive Officer
Managing Director
LS business Unit
Sep. 1990 Joined the Company
Apr. 1993 President of TOA Medical Electronics(Europe) GmbH(present Sysmex Europe GmBH)
Jun. 2001 Member of the Managing Board
Executive Vice President of International Business Management
Apr. 2003 Member of the Managing Board
Executive Vice President of International Business Management
Vice President of IT Business Strategy Development
Apr. 2005 Member of Managing Board and Executive Officer
Apr. 2009 Member of the Managing Board and Senior Executive Officer
Managing Director (current)

Kazuya Obe

Corporate GovernanceMembers of the Managing Board

Member of the Managing Board and Senior Executive Officer
Managing Director
R&D Strategic Planning
Aug. 1987 Joined the Company
Apr. 2009 Executive Officer, Manager of Central Research Laboratories
Apr. 2011 Executive Officer
Executive Vice President of R&D Strategic Planning
Apr. 2013 Senior Executive Officer
Manager of Central Research Laboratories
Jun. 2014 Member of the Managing Board and Senior Executive Officer
Apr. 2015 Member of the Managing Board and Senior Executive Officer
Managing Director (current)

Kenji Tachibana
Member of the Managing Board and Senior Executive Officer
Managing Director
Business Strategy Development
Executive Vice President of Business Strategy Development
Mar. 1980 Joined the Company
Apr. 1998 President of Sysmex Singapore PTE Ltd(present Sysmex Asia Pacific Pte Ltd.)
Apr. 2011 Executive Officer
Executive Vice President of IVD Business Development
Apr. 2013 Senior Executive Officer
Executive Vice President of Business Strategy Development
Jun. 2014 Member of the Managing Board and Senior Executive Officer
Executive Vice President of Business Strategy Development
Apr. 2015 Member of the Managing Board and Senior Executive Officer
Managing Director
Executive Vice President of Business Strategy Development (current)

Susumu Nishiura
Member of the Managing Board (Outside)
Apr. 1969 Joined TOA Electric Co., Ltd. (presently TOA Corporation)
Jun. 1998 Member of the Managing Board
Jun. 2004 Member of the Managing Board and Senior Executive Officer
Managing Director
Jun. 2008 Member of the Managing Board and Senior Executive Officer
Senior Managing Director
Jun. 2010 Retired from TOA Corporation
Jun. 2013 Joined the Company, Member of the Managing Board (current)(As of June 19, 2015)

Member of the Managing Board and Senior Executive Officer
Managing Director
International Business Management

Front row, from left: Masayoshi Hayashi, Hisashi Ietsugu, Yukio Nakajima
Back row, from left: Kenji Tachibana, Mitsuru Watanabe, Koji Tamura, Kazuya Obe, Kaoru Asano, Susumu Nishiura

52

Sysmex Annual Report 2015

Apr. 1991 Joined the Company
Apr. 1996 President of TOA Medical Electronics (Europe) GmbH(present Sysmex Europe GmBH)
Oct. 2002 Chairman of the Board of Sysmex Corporation of America(present Sysmex America, Inc.)
Apr. 2005 Executive Officer
Executive Vice Chairman & CEO of Sysmex America, Inc.
Apr. 2009 Member of the Managing Board and Executive Officer
Apr. 2013 Member of the Managing Board and Senior Executive Officer
Managing Director (current)

Sysmex Annual Report 201553

Corporate GovernanceCorporate Auditors

Executive Officers

From left: Kuniaki Maenaka, Katsuo Uhara, Masami Kitagawa, Koichi Onishi

Front row, from left: Yukio Hamaguchi, Takashi Goda, Michiaki Ishida, Junzo Yamamoto, Iwane Matsui
Back row, from left: Juergen Schulze, Hiroshi Nagao, Yukitoshi Kamao, Keiji Fujimoto, Ikuo Otani, Hiroshi Kanda, John Kershaw, Mamoru Kubota

Katsuo Uhara

Kuniaki Maenaka

Michiaki Ishida

Yukitoshi Kamao

Standing Corporate Auditor

Corporate Auditor (Outside)

Mar. 1981 Joined the Company
Apr. 1993 President & CEO of TOA Medical Electronics (USA), Inc.
(present Sysmex America, Inc.)
Apr. 2005 Executive Officer, Executive Vice President of SCM
Apr. 2011 President and CEO of Sysmex TMC Co., Ltd.
Jun. 2012 Standing Corporate Auditor of Sysmex Corporation (current)

Apr. 1975 Joined Price Waterhouse (present Japan Assurance Arata)
Sep. 1977 Joined Tohmatsu Awoki & Co.
(present Deloitte Touche Tohmatsu LLC), Osaka OfficeJun. 1989 Partner
Sep. 2010 Retired from Deloitte Touche Tohmatsu LLC
Jun. 2012 Joined the Company, Corporate Auditor (current)

Senior Executive Officer
ICH Business Unit

Executive Officer
Executive Vice President of Corporate Business Administration

Takashi Goda

Hiroshi Kanda

Senior Executive Officer
Research & Industry Business
Solution Development

Executive Officer
Executive Vice President of ICH Business Unit Hemostasis
Product Engineering

Masami Kitagawa

Koichi Onishi

Junzo Yamamoto

Hiroshi Nagao

Standing Corporate Auditor

Corporate Auditor (Outside)

Apr. 1975 Joined the Company
Apr. 2005 Executive Officer
Executive Vice President of Sales & Marketing Development
Apr. 2009 Executive Officer
Executive Vice President of Business Management (Japan)
Apr. 2010 Executive Officer
Apr. 2011 President and CEO of Sysmex International Reagents Co., Ltd.
Jun. 2012 Standing Corporate Auditor of the Company (current)

Jul. 1971 Joined Kobe Steel Ltd.
Jun. 2002 Officer
Apr. 2004 Senior Officer
Apr. 2007 Executive Officer
Jun. 2010 Retired from Executive Officer of Kobe Steel Ltd.
Jun. 2010 President of Nippon Koushuha Steel Co., Ltd.
Jun. 2013 Executive Corporate Adviser
Jun. 2014 Joined the Company, Corporate Auditor (current)

Senior Executive Officer
Manufacturing Management
Instrument Production
SCM

Executive Officer
Executive Vice President of SCM(As of June 19, 2015)

John Kershaw

Yukio Hamaguchi

Executive Officer
President and CEO of Sysmex America, Inc.

Executive Officer
President of Sysmex International Reagents CO., Ltd.

Juergen Schulze

Iwane Matsui

Executive Officer
President and CEO of Sysmex Europe GmbH

Executive Officer
Business Management (Japan)
Sales & Marketing

Keiji Fujimoto
Executive Officer
Regulatory Affairs & Quality Assurance
Scientific Affairs
Customer Support

Mamoru Kubota
Executive Officer
Executive Vice President of LS Business Unit Life Science
Product Engineering(As of June 19, 2015)

Ikuo Otani
Executive Officer
Executive Vice President of Human Resources & General Affairs

54

Sysmex Annual Report 2015

Sysmex Annual Report 201555

Sysmex Value
Corporate GovernanceOperating Risks

Product Quality
The instruments and reagents that Sysmex supplies must beOverseas Sales

extremely reliable, so the Company has introduced a compre-

Sysmex sells to overseas customers through its overseas

hensive quality management system. However, earnings could

affiliates and distributors. For this reason, Sysmex hedges

be affected if problems with product quality were to arise

against the risk of currency fluctuations through exchange

nevertheless.

contracts and other means. Nevertheless, the Company’s

To avoid this situation, Sysmex works to maintain

operating results and financial position are affected by foreign

product quality in accordance with international standards

exchange fluctuations. The proportion of consolidated net

and local laws and ordinances. Sysmex studies and analyzes

sales contributed by overseas sales is rising each year, frominformation related to reliability and safety from Japanese

72.4% in the fiscal year ended March 31, 2013, to 78.2% in theand overseas markets, as well as from within the Company;

fiscal year ended March 31, 2014, and 81.7% in the fiscal year

collates technical information that may improve design

ended March 31, 2015.

quality; and implements rigorous quality checks at the start

For this reason, Sysmex hedges against the risk of currency fluctuations through exchange contracts and other

Sharing Value throughout Societyof product mass production and prior to product launch toreinforce its quality guarantees.

means. Nevertheless, the Group’s operating results and financial position are affected by foreign exchange fluctuations.

Stable Product Supply
Sysmex markets its products to customers in more than 190

The Impact of Healthcare System Reform

countries and works to ensure the stable supply of these prod-

Against a backdrop of a sharp decline in the birthrate anducts to customers. The Company might experience difficulties

rapid aging of the population, advances in medical technol-with procurement if, for example, business operations wereogy, increased demand from patients for a higher-quality

suspended at suppliers, interrupting the supply of raw materi-

healthcare and other changes in the healthcare environment,als. If production facilities sustained damage due to large-scale

Japanese healthcare system reform continues. Such reforms

natural disasters, fires or other major calamities, our ability to

are designed to optimize healthcare costs and efficiently

supply products to the market could be impaired.

provide high-quality healthcare services. The Company’s

For these reasons, Sysmex hedges this risk by sourcing

earnings and financial position could be affected* by such

raw materials from multiple companies. We are also enhanc-

healthcare system reforms.

ing initiatives to prevent damage to production bases and to

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

demands for greater efficiency in hospital management, more
Sysmex will promote its life science business, including

Measures to Counter Risks Associated with
the Use of Information Systems

definitive diagnostic tests for cancer. We will also strive toSysmex employs information technology in its decision-mak-meticulously respond to diversifying needs by providing total

ing procedures, such as transmitting information, supporting

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

Company’s internal network.

advanced medical care and new clinical testing procedures,

The Company has therefore introduced countermeasures* The Japanese medical fee system is amended every other year. The impact
on Sysmex of the most recent revisions, in 2014, was slight. Diagnostic
tests are covered by a fee for the provision of the test, unlike the fixed
reimbursement prices set for pharmaceuticals. Therefore, any changes
made to test fees by amendments to the medical fee system should nothave a direct effect on Company earnings.

to minimize the potential operational impacts of network or
information system disruption, computer viruses or unauthorized external access to information systems. Sysmex has inplace secondary, alternate network routes; implements dailysystem administration procedures; runs security measures
including virus gateways; and works to reinforce its internal
controls, for example by controlling access through strict user
management procedures and fingerprint authorization.

F

ounded in Kobe more than 40 years
ago, Sysmex is now continuing attransformation. We are moving ouroperations to a new stage, in orderotto fulfill our social responsibilities
aand contribute to a comfortable andhealthy society, thereby enhancinghccorporate value.
TTripathi Meenakshi
Network Solution Development,N
SSolution Development

56

Sysmex Annual Report 2015

Sysmex Annual Report 201557

Brand Equity

The Sysmex corporate logo expresses our deep commitment

Sysmex products and services are used by healthcare insti-

property. We also have in place incentive schemes forIntellectual Property Activities

inventors to reward them for their patents’ contributions toSysmex seeks to boost brand equity through careful attention to its trademarks, patents and otherintellectual property rights.

business, including bonuses for patent awards and based on

In line with its expanding business domains and global devel-

Japan, the United States and EMEA. We are striving to ensure

opment, Sysmex has established basic principles to share withworldwide flexibility in R&D and operational development bypatent performance.

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

Sysmex holds 1,908 patents worldwide, concentrated in

to pioneering efforts as a frontrunner in healthcare as wetutions in more than 190 countries. We also have a diverse

employees its fundamental thoughts on intellectual property

also acquiring patent rights in the rapidly developing China

continue to develop innovative testing and diagnostic tech-range of stakeholders, including the business partners withactivities and do its utmost to strengthen the Group throughand Asia Pacific regions.

nologies to raise the level of human health and instill greater

which we have alliances in place and conduct joint research,these activities.

confidence. The shape reminds us of the infinity symbol, “∞,”and the shareholders and regional communities that support

In accordance with these basic principles, thediscovered in China, Indonesia, Malaysia and other countries.

and illustrates the unlimited possibilities of Sysmex. The motif

our activities. The Sysmex brand conveys our determination

Company’s liaises with R&D divisions, globally uncovers

The use of such counterfeit reagents cannot guarantee theevokes the evolution of life from the ocean to the land as wellto enhance our corporate value to contribute to society andlatent intellectual property opportunities and surveys thereliability of testing results. We work with local government

as the landscape of Kobe, the birthplace of Sysmex.

meet the expectations of stakeholders throughout the world.

intellectual property rights of third parties. We also define

institutions and judicial organs ensure thorough enforce-clearly the basic policy on handling intellectual property

ment. We also caution medical institutions against the use

for the Sysmex Group and strive to increase the efficiency

of counterfeit reagents by placing advertisements in local

with which we manage these assets in order to maximize

newspapers.

In recent years, counterfeit Sysmex reagents have been

As our business has grown globally and our presence has

their value.
In addition to reinforcing the liaison function (supporting

increased, cases have arisen of other companies imitating ouridea generation, converting intellectual property into rights

company name and logo. In such cases, we take a firm standand leveraging these assets), Sysmex takes a proactive

to prevent deterioration of our brand value.

stance on intellectual property education activities, which

As a research-driven company, Sysmex is reinforcing

are part of our effort to quickly convert research successes

its intellectual property management and supporting theinto valuable intellectual property rights. The Company has

knowledge-building efforts of its employees. We believe

introduced a patent award system to boost the motivationthat persevering in these areas will help us sustain ourof R&D engineers and heighten awareness of intellectualglobal competitiveness.

Patent Applications

Patents Held, by Region
J

Japan

J

Overseas300

Asia Paciﬁc 2%

250

China 14%

Japan 40%

36
267

200
150

441

50

2006 2007 2008 2009 2010
(Years ended March 31)

Sysmex Annual Report 2015

As of March 31, 2015

EMEA 23%

0

58

760

1,908

100

2011

2012

2013

2014

2015

404
Americas 21%

Sysmex Annual Report 201559

Socially Responsible Activities

new insights that will lead to new values and deepen cultural

Social Contributions

awareness through the joining of creative forces.

the fiscal year ended March 31, 2015, Sysmex Corporation’s

Sysmex is involved in healthcare, with its headquarters in Kobe but conducting operations andmaking social contributions on a global scale.

percentage of female managers* increased by 0.5 percentage

Sysmex contributes to the advancement of medical care andpoint, from 4.8% to 5.3%. For the Group as a whole, the per-supports activities related to science, culture and the environ-

human resources is among its most fundamental tasks. The

centage of female managers stood at 11.6%, up 1.0 percentage

ment in a manner befitting a global healthcare company.

Sysmex brand and conducting business activities that

Company strives to create an environment that encourages

point from the previous year’s 10.6%.

contribute to a healthy and prosperous society. To this end,

individual employees to develop their strengths. In addition,

Sysmex fosters a corporate culture where each employee

Sysmex supports individual diversity and accordingly works to

can feel a sense of fulfillment in their work and emphasizes

build an atmosphere that encourages autonomy and a spirit ofexcellent communications with all stakeholders as it conducts

challenge, as well as a system that rewards employees for their* Managers indicate people in positions as directors or above. For Japan,
the percentage is of regular employees and employees on loan. For theAmericas and China, figures also include executives, and for EMEA andAsia Pacific, the figures include executives and employees on fixed-term
contracts. These figures exclude Hyphen, Inostics and Partec.

its corporate activities.

successes. To this end, we believe it is management’s respon-We believe that our corporate responsibility involves
delivering products that are consistent with theSysmex believes that recruiting, retaining and developing

sibility to nurture individual strengths and maximize them

Developing Human Resources

through incorporation into the overall organization. Against
this backdrop, in 2013 Sysmex Corporation introduced a newSysmex fosters a corporate culture where employees
can feel a sense of fulfillment in their work, based on
mutual agreement and common understanding.

human resource development system that links “assignment

At present, around 50% of the approximately 6,700 Sysmex

manner. The education and training program comprises three

Group employees are stationed at overseas companies. As

types of training—selective, rank-based and elective—designed

it becomes more global, the Company will attract an evento nurture personnel in a planned and gradual manner.

greater range of personnel from an increased diversity ofand transfer,” “evaluation and feedback,” “cultivation and education” to cultivate human resources in a systematic and effective

Sysmex concentrates on cultivating the human resources

countries and cultures. Sysmex has codified particularly

who are at the core of its global business. In 2011, we

important rules and action guidelines for compliance that it

introduced the Global Apprentice system for sending young

expects executives and employees to adhere to in the Global

Japanese employees overseas to gain work experience, andCompliance Code. This code defines prohibitions on various

since 2012 we have promoted exchanges of Japanese andtypes of discrimination and proscribes unjust working condi-

overseas personnel by instituting the Global Personnel

tions. We strive to adhere thoroughly to these principles andExchange Program for strengthening ties through deeper

work to ensure fair working conditions and treatment. Sysmex

mutual understanding. In April 2015, we established a Global

aims to provide a working environment that is amenable toCommunication Center as a center for human resource devel-a wide variety of human resources, recruiting and stationing

opment and interchange. This center is intended as a placethem regardless of nationality, gender or physical disability.

for people of diverse cultures and values to gather, to foster

As one of our efforts to encourage the success of women,
we are undertaking initiatives to cultivate female leaders. In

Sysmex Value

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

Since 1984, Sysmex has provided assistance for research
into electronic measuring technology through the Nakatani
Foundation for Advancement of Measuring Technologies inBiomedical Engineering. The foundation’s goal is to contributeto the development of Japan’s economy and society and to
improve the quality of life (QOL) of the Japanese people. The

As part of its efforts to develop a positive working

late Taro Nakatani, the Company’s founder and first president,

environment, Sysmex has also introduced flex-time systems toestablished the Nakatani Foundation using funds contributed

enable employees to adjust their work hours for childcare andby himself, Sysmex and others. Since its inception 31 years ago,

long-term nursing care responsibilities in Japan. In this way,

this year, the foundation has provided cumulative grant fund-the Company is working to improve its systems in support ofing* totaling ¥745.67 million, supporting 347 research projects.

a better work-life balance. In 2009, we opened Sysmex Kids’* The amount of cumulative grant funding includes special research grants,
which extend over two years.

Park, an internal childcare facility where parents can go about
their work assured that their children are being nurtured in an

Sysmex provides funds to the Kobe University School ofappropriate care-giving environment.

Medicine for an endowed course in laboratory medicine.

These initiatives are being adopted at overseas locations,as well. Sysmex Europe and Sysmex Germany are particularly

The purpose of the course is to contribute to the advance-

proactive in supporting child-rearing and health promotion

ment of diagnosis and medical care by developing evaluation

measures. Sysmex America aims to provide an excellent

methods for new clinical testing inworkplace for its employees. Evincing the strong ties between

advanced medical fields.
Sysmex officially registered as a mem-the company and its employees, in the fiscal year ended
March 31, 2014, Sysmex America was selected in the Chicago

ber of the United Nations Global Compact

Tribune Top Workplaces 2013 survey of regional organizations,in 2011, thereby demonstrating oursponsored by the Chicago Tribune.

increased emphasis on activities pertaining
to corporate social responsibility (CSR). The“Sysmex Against Cancer,” a Cancer-Fighting Campaign
In the fiscal year ended March 31, 2015, employee volunteers at 21 Group companies in the EMEA region launched the cancer-fighting
campaign “Sysmex Against Cancer.” As part of this campaign, employees are planning a host of events, publicized via a dedicated website,
to solicit donations. These funds are donated to the World Cancer Research Fund*, which raises awareness about cancer prevention andsupports research.
On April 12, 2015, one of the campaign’s largest projects so far washeld to raise funds through the 2015 NN Marathon Rotterdam. Some 96
Sysmex employees ran in the marathon.
Through activities such as these, as of April 2015 the number of
events had grown to 162, and €241,377 had been raised by the end of the
NN Marathon Rotterdam. Sysmex plans to maintain this campaign tohelp stamp out cancer.

Sysmex Group employees who participatedin the NN Marathon Rotterdam
Global Communication Center

60

Sysmex Annual Report 2015

Contribution
presentation ceremony* The World Cancer Research Fund is a non-profit organization headquartered in
London, the United Kingdom. The fund promotes awareness of cancer-prevention measures and provides funding for scientific research on the relationshipbetween cancer and such factors as food, exercise and obesity.

Sysmex Annual Report 201561

Socially Responsible Activities

Members of the Asia Pacific Index include excellent

Kofi Anan in an address to The World Economic Forum in January

companies selected from among leading corporations in

1999, and was officially launched at UN Headquarters in New

the Asia Pacific region. In the fiscal year ended March 31, 2015,

York in July 2000. By joining the Global Compact, business andthis index included 148 companies, 65 of which were Japanese.

non-business entities commit to upholding 10 principles in the

Encouraged by these results, Sysmex will continue moving

areas of human rights, labor, the environment and anticorruption.

forward with its efforts to enhance corporate value throughSysmex is also a proactive participant in a variety of chari-Sysmex Eco-Vision 2020
Long-Term Environmental
Objectives (Fiscal YearEnding March 31, 2021)(Revised Edition)

Indicating the importance it places on relations withvoluntarily take part in a fund-raising campaign organized by

local communities, each year Sysmex holds events aimed

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

at strengthening communications. In May 2014, we opened

and others. Their efforts to attract donors through uniquethe garden at Technopark, our R&D center and had about

event- and web-based efforts have contributed substantially to

600 visitors. Sysmex America and Sysmex Brazil also holdthe organization’s fund-raising efforts, with donations totaling

company tours for children and students.
In 2005, the Company established the Sysmex Women’s

2015. In recognition of these efforts, in 2015 our U.S. subsidiary

Track & Field Team, welcoming Athens Olympic Gameswas ranked for the seventh consecutive year on the Companies

gold medalist Mizuki Noguchi. The team supports theThat Care Award, which is sponsored by Companies That

training of young athletes who aim to become world-class

Care, a U.S. NPO. This annual award honors companies withcompetitors. Sysmex has been a special sponsor of the Kobe

the characteristics of a “company that cares,” including social

Marathon since its inauguration four years ago. The 2014

contributions and sustaining a good work environment.

Kobe Marathon, which took place in November 2014, again

Sysmex has been selected for inclusion in the Asia Pacificattracted around 20,000 entrants. In addition to providing theIndex of the Dow Jones Sustainability Indexes (DJSI), a leading

runners’ bibs, we exhibited at a booth in the Kobe Marathon

global index of socially responsible investment for the three

EXPO, which was held to coincide with the marathon. Sysmex

years since 2012. DJSI is an index developed through collabo-

employees volunteered their time to support these activities

ration between Dow Jones Indexes of the United States andin a number of ways.

Environment
consciousness
in product life
cycle process

RobecoSAM, a Swiss research specialist in the area of socially
responsible investment. The index evaluates companies

Environmental Conservation
We are putting in place a global environmental
management system to fulfill our social responsibilities with regard to environmental preservation.
Sysmex considers its social responsibility toward environ-from three perspectives: the economy, the environment andmental conservation a management priority. In our efforts

society. Companies evaluated as having superior sustainability

to achieve harmony with the global environment, we work

are selected for inclusion in the index.

to reduce the environmental impact of each stage of our

Kobe Marathon 2014

62

Sysmex Annual Report 2015

Mid-term Environmental
Objectives(Fiscal Years to March 31,
2014–2016)

corporate contribution activities.

table initiatives. For example, employees in the United States

approximately US$79,000 in the fiscal year ended March 31,

Sysmex Group Environmental Action Plan (Sysmex Eco-Vision 2020)/ Mid-term Environmental Objectives

Environment
consciousness
at businessoffices

Promote eco-friendly
products and service
modelsPromote eco-friendly
products and service
modelsReduce carbon dioxide
emissions for logistics
by 50% (per unit of freight

Reduce carbon dioxide
emissions for logistics
by 30% (per unit of freight

Activities/Achievements in Fiscal Year Ended March 31, 2015

Sysmex Value

Global Compact was first announced by then Secretary-General• Promoted efforts toward RoHS directive compliance• Promoted product development for reduced power consumption• Promoted a switchover of protein raw materials used in reagentsfrom animal derivatives to artificially synthesized protein• Promoted reduction in materials used in product containers
and packaging• Promoted eco-friendly service models• For exports, promoted shift from air to ocean transport

Result in fiscal year ended March 31, 2015:
0.14 (t-CO2/thousand ton-kilometers)
Base year (fiscal year ended March 31, 2011):
ton-km: Japan domestic andton-km: Japan domestic andinter-regional transportation)*1 inter-regional transportation)*1 0.14 (t-CO2/thousand ton-kilometers)
Base year: Fiscal year
Unchanged against base year
Base year: Fiscal year
ended March 31, 2011
ended March 31, 2011
(Emissions were down 5.9%, from 5,400 t-CO2 in the base year to
5,083 t-CO2.)

Reduce greenhouse gas
emissions at businessoffices by 50% (per unit ofReduce greenhouse gas
emissions at businessoffices by 25% (per unit ofconsolidated sales)*2

consolidated sales)*2Base year: Fiscal year
ended March 31, 2009

Base year: Fiscal year
ended March 31, 2009

Achieve a recycle rateof 93% or higher at all
business offices*3

Achieve a recycle rateof 90% or higher at all
business offices*3• Installed equipment (including thorough air conditioning
controls, installation of energy efficient fluorescent lighting,placement of occupancy sensors to activate stairwell lighting) as
measures against global warming (each business office)• Purchased electricity from power companies using renewables(Sysmex Europe)• Reduced CO2 emissions by using solar power(Sysmex Europe Reagent Factory)
Result in fiscal year ended March 31, 2015: 7.28
(t-CO2/¥100 million)
Base year (fiscal year ended March 31, 2009):
10.07 (t-CO2/¥100 million)
Down 28% against base year
• Conducted review of waste disposal companies(Technopark)• Reuse of packaged on outsourced items (Sysmex, Wuxi)
Result in fiscal year ended March 31, 2015: 90.3%

Reduce water usage
at reagent factories by
10% (per unit of amount ofReduce water usage
at reagent factories by
3% (per unit of amount of

production)*4

production)*4

Base year: Fiscal year
ended March 31, 2009

Base year: Fiscal year
ended March 31, 2009

• Installed water purifying equipment (Jinan Sysmex)• Reused industrial waste water after treatment (Sysmex India)
Result in fiscal year ended March 31, 2015:
21.4 (m3/ thousands of boxes)
Base year (fiscal year ended March 31, 2009):
21.5 (m3/thousands of boxes)
Down approximately 1% against base year

*1 Sysmex Corporation*2 Business offices: All factories and major business offices
Thirteen domestic and overseas Group factories (six in Japan; one each in Germany, the United States and Brazil; two in China; one each in Singapore and India)
Seven domestic and overseas Group offices (three in Japan; one each in Germany, the United States, China and Singapore)*3 Business offices: All factories and major business offices where products and/or chemical substances are handled
Thirteen domestic and overseas Group factories (six in Japan; one each in Germany, the United States and Brazil; two in China; one each in Singapore and India)
Three domestic Group offices*4 Reagent factories
Nine domestic and overseas Group factories (two in Japan; one each in Germany, the United States and Brazil; two in China; one each in Singapore and India)

Sysmex Annual Report 201563

Socially Responsible Activities

operations—from product design, development, procurement

The department is charged with disclosing appropriate

INPUT

and production to sales, support and product usage.

information in a timely manner, communicating directly withIn the Sysmex Group Environmental Action Plan (Sysmex

shareholders and other investors, and promptly providing

2014

2015

34,51935,988

Eco-Vision 2020), we have set forth our long-term environ-feedback to management regarding the Company’s external

City gas (thousands m )

1,185

852

mental objectives, including environmental consciousness inassessment.

LPG (m3)*1

5,671

6,268

product life cycle processes and environmental conscious-

One focus of the Company’s communications with

LNG (m3)*1

00

ness at business offices. We have also established mid-term

shareholders and other investors is to explain a complex

Heavy oil (kL)*1

00

environmental objectives with further breakdowns and arebusiness in a straightforward manner. In addition to briefing

*1

68

70

working to achieve these goals.

analysts and institutional investors about operating results, theDiesel (kL)*1

19

19

Sysmex also has acquired certification under the inter-

investor relations department provides technical briefings on

Gasoline for domestic fleet (kL)*4

795

778

national ISO 14001 standard for environmental management

areas such as the life sciences and hosts tours to research andDiesel for domestic fleet (kL)*4

11.7

19.7

systems at principal business offices. In addition, we are

manufacturing facilities. Overseas, the department holds inves-

346

368

formulating a groupwide system to promote environmental

tor relations meetings, attends conferences held by securities

50

49

activities, including an annual environmental audit.

firms and seeks opportunities to foster an understanding of

7.9

0.15

For the year ended March 31,*1

Electricity use (thousands kWh)3 *1

Kerosene (kL)

3 *3Water use (thousands m )Office paper (t)*5PRTR (t)*4Sysmex’s business activities
Design Production Transportation Use Disposal

The year 2008 marked the opening of Technopark, ourthe Company’s strengths by providing individual explanations

R&D facility that is designed to fit in with the environment

at industry exhibitions or tours of local factories. For individual

and the surrounding community. In addition to eco-friendly

investors and other shareholders, the department holds busi-

materials and an energy-saving design, the greenery, lakes andness results briefings in Tokyo and Kobe, prepares shareholder

other natural spaces that make up more than half its sur-reports, as well as extensive video content on its website, all

Position of Sysmex IR Activities
Externallyȉ5DLVHFRUSRUDWHYDOXH ZKLFKHTXDOVPDUNHW
capitalization)

A management strategy tool for reinforcing themanagement base by ensuring appropriate shareprice formation'HWHUPLQHFDSLWDOPDUNHWUHVSRQVHVDQGUHTXHVWV'LVVHPLQDWHTXDOLW\
information in atimely mannerȉ6XVWDLQDEOHJURZWKDQG
SURȽWDELOLW\LPSURYHPHQWVȉ$SSURSULDWHLQYHVWPHQW IRUIXWXUHJURZWK6ZLIWO\UHȾHFW
PDQDJHPHQWDQG
IR activities

Internally
A management innovation tool that works byfeeding back external evaluations and requests

rounds add to its harmony with neighboring areas. Such envi-

with the aim of introducing the Company’s business in an

2014

2015

ronmental considerations have earned Technopark the highest

easily understandable way.

Greenhouse gas emissions frombusiness offices (t-CO2)*1

20,194

21,472level for the environmental performance of buildings under

The Company earned the Japan Investor Relations

ual investors at the Company’s briefing meetings, the use of

CO2 emissions from domestic
company cars (t-CO2)*4

a Japanese standard named CASBEE, for the Comprehensive

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

easy-to-understand materials employing photos and diagrams,

1,830

1,856

Assessment System for Built Environment Efficiency.

2011, following an award for fiscal 2006. For the third year

and the simple explanation of the strengths of the Company’s

Total waste emissions (t)*2

1,274

1,353

OUTPUT
For the year ended March 31,

in a row, in the 2014 Awards for Excellence in Corporate

business model and revenue structure. The Company also

90.0

Disclosure, sponsored by the Securities Analysts Association

ranked second within the medical products sector in terms

144

164

We also promote emissions separation and recovery andof Japan, Sysmex was selected for excellence in disclosureof the quality of disclosure on individual business segments.

4.80other recycling efforts. For its flagship model in the hematol-

to individual investors. We were given high marks for our

We believe this positive feedback reflects the extremely

89.1

Wastewater volume (thousands m3)*3

Recycling rate (%)
PRTR (t)*4*1 Factories, all Sysmex Corporation business offices, subsidiaries in Japanand regional headquarters*2 Factories, all Sysmex Corporation business offices (excluding offices,branches, sales offices and service centers in recycling rate).
*3 Factories and principal business offices handling products and chemical
substances*4 Factories in Japan and all Sysmex Corporation business offices*5 Sysmex Group offices in Japan that have acquired ISO 14001 certification

In a bid to reduce emissions and use resources effectively,

chairman and CEO’s explanations in his own words to individ-

we have launched zero-emissions initiatives at our factories.

*2

Sysmex Value

Environmental Impact of Business Activities

ogy field, the XN-Series, Sysmex has switched the packaging
on some of its reagents from conventional polyethylene topaper packaging, and introduced concentrated reagents.

Investor Relations Policy

These moves substantially reduce the changing frequency,

1. IR Goals and Basic Policy

thereby reducing waste, making our products more environmentally considerate.

Investor Relations Activities
We strive to sustain growth and increase corporate
value. Our investor relations activities aim to proactively disclose information to enhance managementsoundness and transparency, communicate ourcorporate directions to shareholders and promotea management style that is both steady andinnovative.
Sysmex recognizes investor relations as an important facetof corporate management and is active in its investor

The basic policy of Sysmex in IR activities is to disclose corporate information on performance, financial position, forecasts of the future
and management strategies in a fair, prompt, accurate and easy-to-understand manner, to ensure accountability to shareholders andother investors and gain proper understanding about management and business activities.
2. Basis of Information Disclosure
Sysmex discloses corporate information in accordance with applicable laws and regulations concerning securities trading and the Rules
on Timely Disclosure of Corporate Information by the Issuer of Listed Securities and the Like (“Timely Disclosure Rules”) established by
the stock exchange. The Company also seeks to disclose corporate information not required by the Timely Disclosure Rules fairly andpromptly, to help shareholders and other investors better understand the Company.
3. Methods of Information Disclosure
Sysmex releases corporate information required under the Timely Disclosure Rules via TD-net, operated by the Tokyo Stock Exchange.
The Company posts information through TD-net on its website as promptly as possible. The Company also provides corporate information not subject to the Timely Disclosure Rules on its website.
4. IR Quiet Period
Sysmex observes a quiet period from the day after the closing date of each quarter until the release of earnings statements. During thisperiod, the Company will refrain from replying to questions or commenting on earnings projections. However, in the event that results
are expected to deviate significantly from the projections during the quiet period, the Company will release appropriate information.

relations efforts, in line with its investor relations policy.

64

Sysmex Annual Report 2015

Sysmex Annual Report 201565

Financial Section
Socially Responsible Activities

high importance our management team places on investor
relations, their high level of participation in IR activities andthe Company’s voluntary disclosure of information. Sysmex’s
annual report also earned awards for 2014 in the world’s
largest annual report competition—a Silver in the HealthCare (Equipment & Supplies) segment of the Vision Awards(sponsored by the League of American Communications
Professionals LLC of the United States)
To raise the level of the Company’s investor relations
activities further, in addition to proactive external information
disclosure Sysmex will concentrate on responding to feedback

Ceremony in which we received an award for excellence indisclosure to individual investors

to ensure the results of its investor relations activities arereflected in its capital policies and management.

Promoting Direct Dialogue with Various Stakeholders
Sysmex values opportunities for direct dialogue with stakeholders. We incorporate opinions and requests received into ourbusiness activities.
Major Dialogue Achievements in Fiscal Year Ended March 31, 2015

Customers• Conducted survey on degree of customer satisfaction in each region (Sysmex Corporation and overseas Group companies in each region)• Held scientific seminars in each region (Sysmex Corporation and overseas Group companies in each region)• Ongoing customer training program incorporating customer feedback in each region (Sysmex Corporation and overseas Group companies in each region)• Held user group meetings to communicate accurate product knowledge (Sysmex Thailand)
Employees• Investigated desire concerning career design, including interest in working overseas or changing jobs through a voluntary reporting given
to all employees, with results made use of in HR rotation (Sysmex Corporation)• Opened the Global Communication Center in the city of Ashiya, in Japan, as a place for people of diverse cultures and values to congregate, break from everyday operations and roles, and engage in discussion and the expansion of personal networks (Sysmex Corporation)• Held briefings and opinion exchange meetings related to the human resource development system at various offices (Sysmex Corporation)• Conducted collective bargaining with the labor union and held labor–management meetings on topics such as workplace environment
improvement (Sysmex Corporation)• Held dialogues with labor unions (Sysmex Vietnam, Jinan Sysmex, Sysmex Wuxi)
Business Partners• Held procurement policy briefings for business partners in Japan to enhance their understanding of CSR procurement (Sysmex Corporation)• Held briefings for all assemblers, sharing important information on managing process changes on medical instrument unit assemblies(Sysmex Medica)• Conducted meetings with distributors to explain the Sysmex business plan, among other matters (Sysmex RUS)
• Held a business partner meeting (Sysmex Asia Pacific)
Shareholders and Investors• Held the 47th Ordinary General Meeting of Shareholders (Sysmex Corporation)• Held the 12th Technology Presentation for institutional investors and analysts (Sysmex Corporation)• Held informational meetings for individual investors (Sysmex Corporation)• Conducted two tours during the year for shareholders (Sysmex Corporation)
Members of the Local Community• Held event for local community interaction at R&D core Technopark (Sysmex Corporation)• Participated in math and science education-focused “7th Science Fair in Hyogo” event for high school students (Sysmex Corporation)• Participated in the “Aim High Urban Mentoring Initiative” conducted by a U.S. NPO and advised local high school students (Sysmex America)

66

Sysmex Annual Report 2015

Contents
11-Year Consolidated Financial Data . . . . . . . . . . . . . . . . . . . . . . 68
Management’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . 70
Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Consolidated Statement of Income . . . . . . . . . . . . . . . . . . . . . . . 78
Consolidated Statement of Comprehensive Income . . . . . . . . 78
Consolidated Statement of Changes in Equity . . . . . . . . . . . . . 79
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . 80
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . 81
Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Sysmex Annual Report 201567

11-Year Consolidated Financial Data

(Thousands of
U.S. dollars)*1

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2015

¥ 76,935¥ 87,888¥ 101,041¥ 110,724¥ 111,843¥ 116,206¥ 124,694¥ 134,744¥ 145,578¥ 184,538¥ 221,377$ 1,844,808

Operating income

9,104

10,724

12,71515,033

15,134

15,74018,28919,20621,80532,871

44,411

370,092

Net income

5,731

7,423

9,008

9,132

8,014

9,765

11,412

12,007

14,166

20,574

26,638221,983

Net increase (decrease) in cash and cash equivalents(3,261)

(499)

3,299

(3,044)

(269)

4,403

5,103

2,922

12,4692,241

13,672

113,933

Cash and cash equivalents, end of year

10,4589,416

12,715

9,679

9,410

13,813

18,916

21,83834,30736,54850,220418,500

Capital expenditure

2,729

5,638

4,546

8,244

9,340

4,540

5,840

7,909

8,945

13,366

13,907

115,892

Depreciation

3,296

3,592

3,959

3,924

7,189

7,067

6,871

7,031

7,945

9,961

11,25993,824R&D expenditure

6,509

8,184

9,026

9,221

10,771

11,23812,38011,904

12,11913,26014,692

122,433

Net cash provided by (used in) operating activities

6,692

8,275

10,085

11,635

13,194

21,23018,135

17,05925,80636,56438,641

322,008

Net cash provided by (used in) investing activities(5,631)(7,859)(6,630)(12,883)(13,545)(6,603)(8,916)(10,372)(12,524)(33,940)(19,544)(162,867)

Net cash provided by (used in) financing activities(4,377)(1,191)(458)(1,316)723(10,091)(3,475)(3,814)(3,117)(2,898)(7,554)(62,950)

Total assets

77,66087,447

101,225

109,027

118,522

120,702130,060

142,285

173,011

210,759

247,984

2,066,533

Shareholders’ equity

56,14962,647

71,34478,75379,18386,35893,534

101,834

118,801

145,757

168,527

1,404,392

657

695

669

1,081

10,344

2,565

1,971

1,026

769

1,960

716

5,967

(Yen)

(U.S. dollars)

For the year:
Net sales

Financial Section

For the years ended March 31,(Millions of yen)

At year-end:

Interest-bearing liabilities

Per share data:
Shareholders’ equity (yen)¥ 2,244.9¥ 1,251.8*2¥ 1,411.0¥ 1,541.0¥ 1,548.2¥ 1,684.9¥ 910.7*2¥ 990.5¥ 1,151.4¥ 703.8*2¥ 812.4$ 6.77

Net income (basic) (yen)225.1

145.5*2

179.6

178.9

156.7

190.8

111.2*2

116.9

137.6

99.5*2

128.5

1.07

Net income (diluted) (yen)224.0

143.8*2

178.0

178.3

156.5

190.5

111.0*2

116.6

137.1

99.2*2

128.0

1.07

Cash dividends applicable to the year* (yen)

5.00

2

6.50*

9.00

12.00

12.50

14.00

15.00*

2

17.00

20.00

2

27.00*

38.00

0.32

Dividend ratio (%)

17.8

17.9

20.0

26.8

31.9

29.4

27.0

29.1

29.1

27.1

29.6

Shareholders’ equity ratio (%)

72.3

71.6

70.5

72.2

66.8

71.5

71.9

71.6

68.7

69.2

68.0

Return on equity (ROE) (%)

10.7

12.5

13.4

12.2

10.1

11.8

12.7

12.3

12.8

15.6

17.0

Return on assets (ROA)*4 (%)

7.7

9.0

9.5

8.7

7.0

8.2

9.1

8.8

9.0

10.7

11.6

Price-earnings ratio (PER) (times)

27.2

35.3

23.8

20.1

20.0

28.7

26.5

28.6

42.1

33.1

51.9

Price-book value ratio (PBR) (times)

2.7

4.1

3.0

2.3

2.0

3.3

3.2

3.4

5.0

4.7

8.2

3,115

3,334

3,580

3,916

4,148

4,587

4,960

5,324

5,594

6,211

6,739

3

Other data:

Number of employees
Note: Including part-time employees

Notes:*1. U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ¥120 = US$1, the approximate rate of exchange on March 31, 2015.
*2. Two-for-one stock split*3. Dividend (actual) coverted to post-split basis.
*4. ROA = Net Income/Total Assets (Yearly Average)×100

68

Sysmex Annual Report 2015

Sysmex Annual Report 201569

Management’s Discussion and Analysis

Sysmex regards increasing its market capitalization to maximize
corporate value as an important management objective andpays careful attention to stable cash flow generation. We
consider it important to share this goal with all stakeholders,
including shareholders, customers, business partners, local
communities and employees, while sustaining medium- tolong-term growth. To that end, Sysmex has in place measures
to communicate with stakeholders on the Company’s current
situation and the direction it should pursue. These measures
include enhancing timely disclosure, the website, shareholder
newsletters, financial data, periodic briefings on business results
and conference calls, visits to institutional investors and briefings for individual investors.
Sustaining medium- to long-term growth requires a level of
R&D expenditure sufficient to prevail in global competition. We
must consistently create new technologies and products andstimulate the growth of our critical mass to absorb increases
in selling, general and administrative (SG&A) expenses. In
recent years, our sales growth in overseas markets has been
striking and succeeded in sustaining steady growth. Sysmex isaggressively making forward-looking investments not only inthe hematology segment, the current key business domain, butalso in non-hematology segments such as urinalysis, immunochemistry, clinical chemistry and hemostasis and in new formsof medical testing in the life science field.
Sysmex pays attention not only to business scale, but also
to asset and capital efficiency and liability and capital soundness. The Company holds an A+ issuer rating from Rating &Investment Information, Inc. (R&I), and reviews and renews thisrating each year. Having a high rating reduces the cost of raisingfunds in the capital markets and helps build trust among ourshareholders and with the world at large. To enhance its rating

in upcoming years, Sysmex will construct a flexible and morerobust financial base, paying attention to expanding businessscale while considering the balance between sales and income,and assets, liabilities and equity. Specifically, the Company
regards net sales, operating income, operating margin, returnon equity (ROE) and free cash flow (FCF) as important management indicators and aims to maintain a balance between scaleand efficiency by ensuring the optimal combination of sales andincome and of assets, liabilities and equity.

Overview
Looking at economic conditions during the fiscal year ended
March 31, 2015, in the United States, employment conditions
continued to improve, and the corporate sector was in an
expansionary phase. The European economy also sustained
a slight ongoing recovery. In China, economic growth
decelerated but the economy trended upward, bolstered bygovernment financial policies and measures. The Asia Pacificregion experienced a modest expansion in economic activity,
centering on ASEAN countries. In general, overseas economies were characterized by gradual ongoing recovery. The
Japanese economy continued on its path to recovery thanks
to improvements in employment and income conditions andan upturn in capital investment.
On the healthcare front, in advanced countries in Europe
and the United States, efforts are underway to curtail medical
expenses and reform health insurance systems. In the UnitedStates, efforts to reduce the number of people without
medical insurance are moving into high gear. In China,
medical system reform that is underway, including to the
medical insurance system, aims to build infrastructures thatprovide uniform medical services in cities and farming villages
throughout the country. Therefore, although some causes

for uncertainty remain, the foundations of healthcare-related
demand remain solid. The Japanese government is positioning
the healthcare industry as a pillar of its strategies for national
growth, which is expected to invigorate healthcare-relatedindustries going forward.
The Sysmex Group has established and commenced
manufacturing at i-Square, its new instrument factory in thecity of Kakogawa, Hyogo Prefecture, increasing the Group’s
instrument manufacturing capacity to meet growing demandfor in-vitro diagnostic (IVD) instruments in the Japanese andoverseas markets. We have completed factory expansions at
two domestic affiliated companies, Sysmex Medica Co., Ltd.,and Sysmex RA Co., Ltd., boosting the Sysmex Group’s overall
IVD instrument production capacity. With these factories, plus
our existing Kakogawa Factory, we are making a full-fledgedtransition to a four-factory structure that will gradually enable
us to approximately triple our IVD instrument production
capacity compared with our pre-expansion level.
Sysmex has invested in RIKEN GENESIS Co., Ltd., a subsidiary of Toppan Printing Co., Ltd. Through this capital alliance,
we will promote technological development to further
improve the quality and efficiency of gene analysis testing.
At the same time, we aim to accelerate initiatives targeting
personalized healthcare.
During the fiscal year the Group recorded consolidated
net sales of ¥221,377 million, up 20.0% year on year.
Operating income rose 35.1%, to ¥44,411 million; and net
income increased 29.5%, to ¥26,638 million. Total asset
turnover increased from 0.96 time to 0.97 time, and return on
equity (ROE) advanced from 15.6% in the preceding year to
17.0% during the fiscal year under review.

Net Sales by Destination*
Looking at net sales by destination, in Japan, sales of in-vitro
diagnostic (IVD) instruments were down year on year, as
healthcare institutions curtailed capital investments due
to fiscal 2014 revisions to medical compensation under thenational healthcare system and the consumption tax hike.
However, sales of IVD reagents in the hematology, hemostasis
and immunochemistry fields in line with an increase in the
installed instrument base. As a result, sales in Japan grew 0.6%
year on year, to ¥40,554 million.
In overseas markets, we made progress in the strengthening of sales and support structures and the provision of solutions, leading to higher sales of instruments centered on thefields of hematology and hemostasis. Sales of reagents andservices also rose, benefiting from an increase in the installed
instrument base. These factors caused the Sysmex Group’s
overseas sales to surge 25.4% year on year, to ¥180,823 million. The overseas sales ratio accordingly rose 3.5 percentage
points, to 81.7%.
Looking at overseas sales by destination, sales in theAmericas amounted to ¥49,552 million, up ¥9,625 million,or 24.1% year on year; in EMEA ¥63,598 million, up ¥10,212
million, or 19.1%; in China ¥49,849 million, up ¥13,580 million,
or 37.4%; and in Asia-Pacific ¥17,824 million, up¥3,185 million,or 21.8%.

Financial Section

Financial Policy* Net sales by destination is defined as the sales amount recorded byGroup companies to customers in a particular region. However, net
sales by geographical region refers to the sales amount made by aGroup company in a particular location.

Net Sales by Destination
Rating Institution

RatingRating & Investment
Information Inc. (R&I)

A+

Rating Information

Sysmex website

70

Sysmex Annual Report 2015

Shareholder newsletter

Financial data (English/Japanese)posted in the “IR Library” on theSysmex website(As of May 31, 2015)
Rating symbols and definitions:Rating A+; The credit quality is high. It is also
accompanied by some excellent factors.

Japan
Overseas
Americas
EMEA
China
Asia Paciﬁc

8.1%
2.5%
22.5%

OVERSEAS

Net sales

JAPAN

81.7%

¥221,377

18.3%¥180,823 million¥40,554 million

million

7%
28.7%
22.4%

Sysmex Annual Report 201571

Management’s Discussion and Analysis

the Group acquired government projects in Mexico andCosta Rica, and sales rose in Colombia, boosting sales in theAmericas 21.8% year on year, to ¥47,014 million.
Segment profit (operating income) fell 3.0%, to ¥2,402
million, as the increase in operating expenses outpaced theeffect of higher sales.

Japan
Although sales of IVD instruments were down year on year
owing to such factors as healthcare institutions tended tocurtail capital investments, an increase in the installed instrument base led to higher sales of reagents in the hematology,
hemostasis and immunochemistry fields, and export sales rose.
Sales in the segment consequently expanded 3.9% year on
year, to ¥43,400 million.
On the profit front, such factors as the growth of export
sales to Group companies and higher trademark royalty
income led to a 54.8% rise in segment profit (operating
income), to ¥31,163 million.

EMEA
Sales rose in the United Kingdom, France and Germany, andin Turkey sales benefited from our commencement of direct
sales and support services. Also, sales expanded in Saudi
Arabia, the United Arab Emirates and other parts of the
Middle East, as well as Africa. Accordingly, segment sales wererobust, centering on the hematology and hemostasis fields,
growing 18.9%, to ¥63,257 million.
Segment profit (operating income), however, fell 39.6%,
to ¥5,199 million, due to higher payments of Group trademark
royalties and rising operating expenses accompanying business expansion.

Americas
In the United States, sales of instruments were up, particularlyin the hematology field, and an increase the installed instrument base led to higher sales of reagents and support services,pushing up sales in the country. In Central and South America,
Net Sales by Geographical Region
Japan
Americas
EMEA
China
Asia Pacific

Sales and Segment Proﬁt
by Geographical Region

Sales and Segment Proﬁt
by Geographical Region

Japan

Americas(¥ million)
125,000

8.1%

Intra-area transfers: Exports to Group aﬃliates, others
Sales to customers: IDEXX and others
Sales to customers: Japan
Segment proﬁt
122,937
35,00082,784¥221,377 million

34,010221.2%

28.6%

39,09479,53762,05820,13840,00021,0003,248
2,872 29,703
30,00026,85525,47645,197

14,00011,9393,179 3,955 2,783 1,446 2,850
8,683
6,816
25,00038,541
7,000
39,735 40,187 40,313 40,550

2011* 2012* 2013* 2014* 2015*

Sales and Segment Proﬁt
by Geographical Region0

10,00075,000

1,000

2011

China

2012* 2013* 2014* 2015*

6,000

40,0006,000

Asia Paciﬁc

Profits and Losses
Net Sales

IncomeIn Japan, sales of in-vitro diagnostic (IVD) instruments were
down year on year, as healthcare institutions curtailed
capital investments. However, sales of IVD reagents in the

Operating income expanded ¥11,540 million, or 35.1% year
on year, to ¥44,411 million, as higher sales more than offset
increases in cost of sales and SG&A expenses, and the

Net Sales
Net sales
Segment proﬁt(¥ million)
20,000

1,500

SG&A Expenses
SG&A Ratio(¥ million)
250,000

R&D Expenditure
R&D Expenditure as a Percentage of Net Sales
SG&A expenses
SG&A ratio(¥ million / %)100,000

1,386 17,866

4,000

16,00014,731
1,056

36,25830,0005,199

30,000

Cost of sales rose ¥25,417 million, or 36.3%, to ¥95,359 million.
In addition to higher sales, ¥13,046 million of this increase wasdue to a change in the method of recording after-sales service
expenses on instruments. Included in the past as selling, general and administrative (SG&A) expenses, from the year underreview we have included these expenses within cost of sales.
The cost of sales ratio accordingly increased 5.2 percentage
points, to 43.1%.
Despite reinforcing our sales and support structures, SG&A
expenses decreased ¥118 million, or 0.1%, to ¥81,607 million,
owing to our change in the method of presenting after-sales
service expenses. As a percentage of net sales, SG&A expenses
dropped 7.5 percentage points, from 44.3% to 36.8%.

0

Sales and Segment Proﬁt
by Geographical Region
Net sales
Segment proﬁt
49,8407,500
6,802(¥ million)
50,00053,19637,03235,296 4,552

Cost of Sales and SG&A Expenses

Sales in the hematology field increased in Southeast Asia,
owing to higher sales in Thailand and Malaysia and enhanced
direct sales and services in Vietnam. Hematology sales also
grew in India, as well as in Australia, thanks to the acquisitionof bid projects for diagnostic centers. Robust sales of the
XN-Series automated hematology analyzer also boosted sales
in the hematology field in South Korea. As a result, sales grew
21.3%, to ¥17,866 million.
Segment profit (operating income) dropped 11.5%, to¥1,227 million, as intragroup transaction prices were revisedand operating expenses expanded to cover the building ofsales and support structures, outpacing the effect of higher
sales.

100

4,195

4,500

19,29920,00015,093 2,411 2,370 2,384

3,000

10,000

1,500

7,109
8,000

200,000

80,000184,538
145,578

150,000

60,000134,744

60,01663,88648.1

600

12,38080

12,00060

9,000

11,904 12,119

12

67,191

9

9.9
8.8

9,043
7,868

R&D expenditure
R&D expenditure as a percentage of net sales
14,692 15
13,26081,725 81,607

124,694746

24,4251,200

900

12,000(¥ million / %)15,000221,377

1,227

8,000

39,436 5,799
5,379

2,402

10,0008,604 63,257

60,000

2,478

2,000

0

Asia Pacific(Years ended March 31)

Sales and Segment Proﬁt
by Geographical Region
Net sales
Segment proﬁt

3,000

20,000(Years ended March 31)

In this market, sales remained sluggish in some areas. However,sales of instruments grew in the hematology field, and thelaunch of a fully automated immunochemistry analyzer (theHISCL) pushed up instrument sales in the immunochemistry
field. Furthermore, sales of reagents were firm as a result of agreater installed instrument base. Segment sales accordingly
grew 37.5%, to ¥49,840 million.
Segment profit (operating income) expanded 62.1%, to¥6,802 million, as higher sales more than compensated for theincreased operating expenses.

4,000

2,129

50,000038,59428,00088,16875,73075,000Net Sales

45,0005,000

103,817

100,000

22.5
2.5%(¥ million)

47,014

31,163

19.6%

EMEA

Net sales
Segment proﬁt(¥ million)
50,000hematology, hemostasis and immunochemistry fields in linewith an increase in the installed instrument base.
In overseas markets, we made progress in the strengthening of sales and support structures and the provision of solutions, leading to higher sales of instruments centered on thefields of hematology and hemostasis. Sales of reagents andservices also rose, benefiting from an increase in the installed
instrument base.
As a result, during the fiscal year the Group recorded
consolidated net sales of ¥221,377 million, up ¥36,839 million,
or 20.0% year on year.

China

Financial Section

Net Sales by Geographical Region

100,000

40,000

47.4

46.1

8.3

44.3

40

7.2

6,000

6.6

6

36.8
330

2,000

15,000

0

2011

2012

2013

2014 2015*(Years ended March 31)002011* 2012* 2013* 2014* 2015*(Years ended March 31)

0

300

4,000

0

2011* 2012* 2013* 2014* 2015*(Years ended March 31)

050,0000

20,000

2011

2012

2013

(Years ended March 31)

2014

2015

0

2011

2012

2013

(Years ended March 31)

2014

2015

20

3,000

0

0

3

2011

2012

2013

2014

2015

0

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

72

Sysmex Annual Report 2015

Sysmex Annual Report 201573

Management’s Discussion and Analysis

R&D Expenditure
To enhance its product portfolio, during the year Sysmex
developed new products and pursued R&D centering on
clinical testing and the life sciences, fields targeted for future
growth. As a result, R&D expenditure amounted expanded¥1,432 million, or 10.8%, to ¥14,692 million. R&D expenditure
as a percentage of net sales decreased 0.6 percentage points,from 7.2% to 6.6%.

Dividend Policy
We aim to maintain a proper balance between internal
reserves for R&D and capital expenditure, which are designed
to sustain steady high growth, and returns to our shareholders as our earning power increases. In terms of returns toshareholders, we intend to provide a stable dividend on acontinuous basis and aim for a consolidated payout ratio of
30% under our basic policy of sharing the successes of ouroperations in line with business performance.
As a basic policy, Sysmex pays twice-yearly dividends
from retained earnings, an interim dividend and a year-end
dividend. The year-end dividend is decided upon approval of
the annual shareholders’ meeting, and the interim dividend
upon approval by the members of the Managing Board.

In accordance with this policy and in light of businessperformance during the year under review, we announced
dividends for the year of ¥38 per share, which includes aninterim dividend of ¥16. As a result, the consolidated payout
ratio was 29.6%.
Going forward, Sysmex will continue to effectively
invest its internal reserves in the implementation of highly
competitive product development and global businessstrategies, aiming to respond to anticipated changes in thebusiness environment.

Liquidity and Sources of CapitalFund Procurement and Liquidity Management
The Company raises working capital as necessary throughshort-term bank loans and other means. Consolidated
subsidiaries obtain bank loans as needed to secure working
capital, but in October 2003, the Company introduced a cash
management system to increase efficiency by unifying financing and capital management at affiliates in Japan.
For long-term capital requirements such as capital investment, the Company decides the funding method after taking
into account the investment recovery period and risk. During
the year, the Company financed capital expenditure and R&D
activities primarily from cash provided by operating activities.

Assets, Liabilities and Equity
As of March 31, 2015, total assets amounted to ¥247,984 million, up ¥37,225 million from a year earlier. The main reasons
were an increase in cash and cash equivalents of ¥13,672
million, ¥7,567 million higher trade accounts receivable, ¥2,568
million higher inventories, ¥5,252 million increase in buildings

Net Income

Operating Income
Operating Margin

Cash Dividends Applicable to the Year
Dividend Ratio(¥ million / %)50,00050

Dividend ratio(¥ / %)
40(¥ million)
30,00044,41140,00024,00020,57430
21,805

14.7

14.3

20
20.1

12,000

2011

2012

2013

(Years ended March 31)

Total Assets
ROA*

45

24

(¥ million / %)250,000

10

6,000

0

0

150,000

16

27.0

130,060
9.1

17

15

142,285

29.1

29.1

27.1

30
29.6

100,000

15

50,000

0

0

8.8

20

(¥ million)(¥ million / %)200,000

100

15,00015,00013,366

169,551

16

160,000

12
11.6

120,000

71.9

94,233

10.7
9.0

Capital expenditure
Depreciation

Total equity
Equity ratio

247,984

200,000

20

11,412 12,007

Capital Expenditure
Depreciation

Total Equity
Equity Ratio

173,011

2014

2015

8

2011

2012

2013

(Years ended March 31)

2014

2015

0

2011

2012

2013

2014

2015

(Years ended March 31)
Note: Two-for-one stock split conducted on April 1,2014 and 2011.

74

Capital expenditure (investment in property, plant and equipment, including construction in progress) was up ¥541 million
year on year, or 4.1%, to ¥13,907 million. The principal reason
for this rise was our construction of a new factory, i-Square,to increase IVD instrument production capacity in response
to growing domestic and overseas demand. In addition,
in response to growing business in overseas markets, weinvested in the expansion of overseas subsidiaries’ factories
for producing IVD reagents, and sales promotion expenditures
grew, as well. Depreciation increased ¥1,298 million, or 13.0%,
to ¥11,259 million.

71.6

146,250
68.7
69.2
119,15480

11,25912,00012,000

9,961

68.0

60

13,907

8,945

9,000

102,503
6,871
5,840

7,909
7,031

9,000

7,945

8

80,000

40

6,000

6,000

4

40,000

20

3,000

3,000

2015 0

0

0

0

15.0

10,0000

Net cash provided by operating activities was ¥38,641 million,¥2,077 million more than in the preceding fiscal year. As
principal factors, income before income taxes and minority
interests provided ¥45,728 million, ¥12,277 million more thanin the preceding fiscal year, and depreciation and amortization provided ¥12,955 million, ¥1,559 million more than in thepreceding fiscal year. The increase in notes and accounts
receivable used ¥6,850 million, compared with ¥713 million
provided by a decrease in the previous year, and income taxes
paid used ¥15,552 million, ¥5,319 million more than in thepreceding fiscal year.

27

18,00014,166

17.8

Capital Expenditure and Depreciation

210,759

60

32

32,871

Cash Flows from Financing Activities

Cash Flows from Operating Activities

26,63840

30,00075

Net cash used in investing activities was ¥19,544 million,¥14,396 million less than in the preceding fiscal year. Among
major factors were purchases of property, plant and equipment, which used ¥13,033 million, down ¥250 million. The
purchases of investment securities used ¥2,350 million,¥2,308 million more than in the preceding fiscal year, andacquisitions, net of cash acquired used ¥342 million, ¥16,301
million less than in the preceding fiscal year.

As of March 31, 2015, cash and cash equivalents amounted to¥50,220 million, up ¥13,672 million from March 31, 2014. Cashflows from various activities are described in more detail below.

Cash Flows

Total assets
ROA

38

Cash Flows from Investing Activities

Net cash used in financing activities was ¥7,554 million, up¥4,656 million from the previous year. This was mainly due
to a net decrease in short-term bank loans of ¥1,000 million,
compared with a net increase of ¥855 million in the year
ended March 31, 2014, and dividends paid of ¥6,734 million,
which used ¥2,190 million more in cash than in the preceding
fiscal year.

Cash dividends applicable to the year
(Dividend convert to post-split base)

Operating income
Operating margin

20,000 18,289 19,206

and structures, ¥4,758 million expansion in furniture andfixtures and ¥960 million higher investment securities.
Total liabilities were up ¥13,924 million, to ¥78,433 million
at March 31, 2015, due mainly to a ¥2,612 million increase intrade accounts payable, ¥1,939 million higher income taxes payable, a ¥2,399 million expansion in accrued expenses and ¥2,915
million rise in deferred tax liabilities in long-term liabilities.
Total equity came to ¥169,551 million at March 31, 2015, up¥23,301 million from a year earlier. The principal reasons forthe increase were a rise of ¥19,728 million in retained earnings. The equity ratio as of March 31, 2015, was 68.0%, down
1.2 percentage points from the 69.2% recorded as of March
31, 2014.

Financial Section

operating margin improved 2.3 percentage points, to 20.1%.
Furthermore, compared with the preceding fiscal year
exchange rates had a ¥7,076 positive effect on income.
Total income taxes rose ¥6,213 million during the year,
or 48.2%, to ¥19,090 million. As a result, net income grew
¥6,064 million from the preceding fiscal year, or 29.5%, to¥26,638 million.

Sysmex Annual Report 2015

2011

2012

2013

2014

(March 31)

2011

2012

(March 31)

2013

2014

2015

2011

2012

2013

2014

2015

0

(March 31)* Net Income/Total Assets (Yearly Average)×100

Sysmex Annual Report 201575

Consolidated Financial Statements
Consolidated Balance Sheet
Sysmex Corporation and Consolidated Subsidiaries

March 31, 2015

2015

2014

2015

ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 14)
Short-term investments (Note 5)
Receivables (Note 14):
Trade notes
Trade accounts
Associated companies
Other
Allowance for doubtful accounts
Investments in lease (Notes 13 and 14)
Inventories (Note 6)
Deferred tax assets (Note 12)
Prepaid expenses and other current assets
Total current assets

PROPERTY, PLANT AND EQUIPMENT:Land
Buildings and structures
Machinery and equipment
Furniture and fixtures
Lease assets
Construction in progress
Total
Accumulated depreciation
Net property, plant and equipment

INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 5 and 14)
Investments in unconsolidated subsidiaries and associatedcompanies
Goodwill (Note 7)
SoftwareAsset for retirement benefits (Note 9)
Deferred tax assets (Note 12)
Other assets
Total investments and other assets
TOTAL
See notes to consolidated financial statements.

76

Sysmex Annual Report 2015

¥ 50,220294¥ 36,548
282$ 418,500
2,450

2,802
50,069
171
351
(576)
5,413
29,888
8,988
6,529
154,149

2,854
42,502
161
254
(889)
4,640
27,3208,012
4,139
125,823

23,350417,2421,425
2,925(4,800)45,108249,067
74,90054,4081,284,575

11,26038,008
10,52447,446
2,629
4,137
114,004(54,942)
59,062

11,26432,756
9,461
42,6882,536
4,678
103,383(49,609)53,774

93,834
316,733
87,700395,383
21,90834,475950,033(457,850)
492,183

5,243

4,283

43,692

1,932
12,114
7,113
961
267
7,143
34,773¥ 247,984

390
13,115
5,969
14
132
7,259
31,162¥ 210,759

16,100100,950
59,275
8,008
2,225
59,525
289,775$ 2,066,533

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

2015
LIABILITIES AND EQUITYCURRENT LIABILITIES:
Short-term bank loans (Note 8)
Current portion of long-term debt (Note 8)
Current portion of long-term lease obligations (Note 14)
Payables (Note 14):
Trade notes
Trade accounts
Associated companies
Construction and other
Income taxes payable (Note 14)
Accrued expenses
Deferred tax liabilities (Note 12)
Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:Long-term debt (Note 8)Long-term lease obligations (Note 14)
Liability for retirement benefits (Note 9)
Deferred tax liabilities (Note 12)
Other long-term liabilities
Total long-term liabilities

2014

¥
¥

2015

51

1,000
51
57

1,470
14,340
166
6,122
9,639
14,832102
18,44865,1701,388
11,728
154
4,398
7,700
12,4338
15,09354,01012,250
119,500
1,383
51,01780,325
123,600
850
153,733
543,083

199
563
8,994
3,507
13,263

105
251
734
6,079
3,330
10,4991,658
4,692
74,95029,225110,525

10,483
15,424
1,024
129,705

10,243
15,184493
109,977

87,358
128,533
8,533
1,080,875

(281)

(270)

(2,342)1,367
110,4281,400
169,551

1,134

11,392
8
86,901
11,667
1,412,925$

Financial Section

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

425

COMMITMENTS AND CONTINGENT LIABILITIES (Notes 13 and 15)
EQUITY (Notes 10, 11, 18 and 20):
Common stock, authorized, 598,688,000 shares; issued,
207,894,432 shares in 2015 and 207,553,632 shares in 2014*
Capital surplus
Stock acquisition rights
Retained earnings
Treasury stock - at cost: 443,380 shares in 2015 and440,556 shares in 2014*
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Foreign currency translation adjustments
Defined retirement benefit plans
Total
Minority interests
Total equity
TOTAL

169,551¥ 247,984

8,653
836
146,2500146,250¥ 210,759

1,412,925$ 2,066,533* Shares have been restated, as appropriate, to reflect a two-for-one stock split effected April 1, 2014.

Sysmex Annual Report 201577

Consolidated Financial Statements

Consolidated Statement of Income

Consolidated Statement of Changes in Equity

Sysmex Corporation and Consolidated Subsidiaries

Sysmex Corporation and Consolidated Subsidiaries

NET SALESCOST OF SALES
Gross profit
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Operating income
OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense
Foreign exchange gain (loss)–net
Other–net
Other income (expenses)–net
INCOME BEFORE INCOME TAXES AND MINORITY INTERESTSINCOME TAXES (Note 12):Current
Deferred
Total income taxes
NET INCOME BEFORE MINORITY INTERESTSMINORITY INTERESTS IN NET INCOME
NET INCOME

2015¥ 221,377
95,359126,018
81,60744,411

2014¥ 184,538
69,942
114,596
81,72532,8712015$ 1,844,808
794,658
1,050,150
680,058
370,092

309
(44)
932
120
1,317
45,728

230
(41)
411
(20)
580
33,451

2,575
(367)
7,767
1,000
10,975
381,067

17,1191,971
19,09026,638(0)¥ 26,638

13,735(858)
12,877
20,5740¥ 20,574

142,659
16,425
159,084
221,983(0)$ 221,983

Yen

PER SHARE OF COMMON STOCK (Notes 2.w and 18):
Basic net income*Diluted net income*Cash dividends applicable to the year*¥ 128.49
128.02
38.00

U.S. Dollars¥ 99.47
99.16
27.00

$ 1.071.07
0.32* Per share figures have been restated, as appropriate, to reflect a two-for-one stock split effected April 1, 2014.
See notes to consolidated financial statements.

Year Ended March 31, 2015

BALANCE, APRIL 1, 2013
Net income
Cash dividends,¥22.00 per share*
Purchase of treasury stock
Disposal of treasury stock
Exercise of warrants
Net change in the year
BALANCE, MARCH 31, 2014
(APRIL 1, 2014, as
previously reported)
Cumulative effect ofaccounting change(Note 2.l.(c))
BALANCE, APRIL 1, 2014(as restated)
Net income
Cash dividends,¥32.50 per share*
Purchase of treasury stock
Exercise of warrants
Increase due to decreasein associated companies
accounted for by theequity method
Net change in the year
BALANCE, MARCH 31, 2015

Number of
Shares ofCommon Stock Common
Outstanding*
Stock

CapitalSurplus206,361,440 ¥ 9,712 ¥ 14,652

Stock
Acquisition Retained
Rights
Earnings¥ 353 ¥ 93,947
20,574

¥ 41

531

1
531
140

207,113,076

10,243

15,184493 109,977

(270)

425

8,612

1,134

8,653

¥ 836

10,243

15,184493 109,782
26,638

(270)

1,134

8,653

207,451,052 ¥ 10,483 ¥ 15,424233¥ (281) ¥ 1,367

1,775
¥1
¥
10,428¥1(4,544)
(10)
1
1,062
10,013(4,544)
(10)
1
1,062
10,013(0)(195)

836 146,055
26,6380 146,055
26,638(6,734)(11)
480(6,734)
(11)
480

240

19
531
¥ 1,024 ¥ 129,705¥ 0 ¥ 119,154
20,574

(195)

(11)
240

¥ 119,154
20,5740 146,250(6,734)(2,824)
340,800

Minority
Interests Total Equity

836 146,250(195)
207,113,076

Total

19
564
3,104
¥ 1,400 ¥ 169,551

(0)

19
3,104
¥ 169,551

Thousands of U.S. Dollars (Note 1)

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

See notes to consolidated financial statements.

¥ (260) ¥ 709(10)
0

Sysmex Corporation and Consolidated Subsidiaries

NET INCOME BEFORE MINORITY INTERESTSOTHER COMPREHENSIVE INCOME (Note 16):
Unrealized gain on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Foreign currency translation adjustments
Defined retirement benefit plans
Total other comprehensive income
COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO :Owners of the parent
Minority interests

TreasuryStock

Accumulated Other Comprehensive Income
Deferred
Unrealized Gain on
DefinedGain on Derivatives Foreign
Currency Retirement
Availableunder
for-Sale
Hedge Translation Benefit
Securities Accounting Adjustments Plans(4,544)(3,304)
140
754,800

Consolidated Statement of Comprehensive Income

Year Ended March 31, 2015

Financial Section

Year Ended March 31, 2015

Millions of Yen

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

2015¥ 26,638

2014¥ 20,574

2015$ 221,983

233
1
1,775
564
2,573
¥ 29,211

425

9,037
¥ 29,611

1,942
8
14,7934,700
21,443$ 243,426¥ 29,211(0)¥ 29,611(0)$ 243,426
(0)

8,612

CommonStock

Stock
Capital Acquisition
Surplus
RightsBALANCE, MARCH 31, 2014
(APRIL 1, 2014, as previously reported) $ 85,358 $ 126,533
Cumulative effect of accounting change(Note 2.l.(c))
BALANCE, APRIL 1, 2014 (as restated)
85,358 126,533
Net income
Cash dividends, $0.27 per share*
Purchase of treasury stock
Exercise of warrants
2,000
2,000
Increase due to decrease in associatedcompanies accounted for by theequity method
Net change in the year
BALANCE, MARCH 31, 2015
$ 87,358 $ 128,533

Retained
Earnings

Accumulated Other Comprehensive Income
Unrealized Deferred
ForeignDefinedGain onGain onAvailable- Derivatives Currency Retirement
Treasury for-Sale under Hedge Translation Benefit
Stock Securities Accounting Adjustments Plans$ 4,108 $ 916,475 $ (2,250) $ 9,450

4,108(1,625)914,850
221,983(56,116)(2,250)9,450$ 72,108

4,425
1,942
$ 8,533 $ 1,080,875 $ (2,342) $ 11,392

Minority
Interests Total Equity$ 6,967 $ 1,218,749$ 0 $ 1,218,749(1,625)
6,967 1,217,124
221,983(56,116)
(92)
4,000

(1,625)
0 1,217,124
221,983(56,116)
(92)
4,000

158
$ 8 14,793
4,700
25,868$ 8 $ 86,901 $ 11,667 $ 1,412,925

158(0) 25,868$ 1,412,925

72,108

(92)

158

Total

* Shares and per share figures have been restated, as appropriate, to reflect a two-for-one stock split effected April 1, 2014.
See notes to consolidated financial statements.

78

Sysmex Annual Report 2015

Sysmex Annual Report 201579

Consolidated Financial Statements

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements

Sysmex Corporation and Consolidated Subsidiaries

Sysmex Corporation and Consolidated Subsidiaries
Year Ended March 31, 2015

Year Ended March 31, 2015

OPERATING ACTIVITIES:
Income before income taxes and minority interests
Adjustments for:
Income taxes - paid
Depreciation and amortization
Loss on disposal of property, plant and equipment
Changes in assets and liabilities:(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable(Decrease) increase in liability for retirement benefits
Other–net
Net cash provided by operating activities
INVESTING ACTIVITIES:
Purchases of property, plant and equipment
Purchases of software and other assets
Purchases of investment securities
Acquisitions, net of cash acquired (Note 17)
Other–net
Net cash used in investing activities
FINANCING ACTIVITIES:(Decrease) increase in short-term bank loans - net
Repayments of long-term debt
Payments of lease obligations
Exercise of warrants
Dividends paid
Other–net
Net cash used in financing activities
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON
CASH AND CASH EQUIVALENTS
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
See notes to consolidated financial statements.

2015

2014

2015

¥ 45,728¥ 33,451$ 381,067(15,552)
12,955143(10,233)
11,396204(129,600)
107,957
1,192(6,850)(1,785)
2,517
(640)
2,125
38,641713
1,644(2,937)35
2,291
36,564(57,083)(14,875)
20,975(5,333)
17,708322,008(13,033)(3,456)(2,350)(342)(363)(19,544)(13,283)(3,813)(42)(16,643)(159)(33,940)(108,609)(28,800)(19,583)(2,850)(3,025)(162,867)(1,000)
(148)
(57)
396
(6,734)(11)(7,554)

855
(13)
(63)
877
(4,544)(10)(2,898)(8,333)(1,233)(475)
3,300(56,116)(93)(62,950)

2,129
13,67236,548¥ 50,220

2,515
2,241
34,307¥ 36,548

17,742
113,933
304,567$ 418,500

1. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL
STATEMENTS
The accompanying consolidated ﬁnancial statements have been prepared inaccordance with the provisions set forth in the Japanese Financial Instruments
and Exchange Act and its related accounting regulations and in accordance withaccounting principles generally accepted in Japan (“Japanese GAAP”), which are
diﬀerent in certain respects as to application and disclosure requirements ofInternational Financial Reporting Standards.
In preparing these consolidated ﬁnancial statements, certain reclassiﬁcations and rearrangements have been made to the consolidated ﬁnancial
statements issued domestically in order to present them in a form which is morefamiliar to readers outside Japan. In addition, certain reclassiﬁcations have been
made in the 2014 consolidated ﬁnancial statements to conform to the classiﬁcations used in 2015.
The consolidated ﬁnancial statements are stated in Japanese yen, thecurrency of the country in which Sysmex Corporation (the “Company”) is
incorporated and operates. The translations of Japanese yen amounts into U.S.
dollar amounts are included solely for the convenience of readers outside Japanand have been made at the rate of ¥120 to $1, the approximate rate of exchange
at March 31, 2015. Such translations should not be construed as representations
that the Japanese yen amounts could be converted into U.S. dollars at that or
any other rate.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation—The accompanying consolidated ﬁnancial statements as ofMarch 31, 2015, include the accounts of the Company and its 59 (56 in 2014)
signiﬁcant subsidiaries (collectively the “Group”). Consolidation of the remaining
subsidiaries would not have a material eﬀect on the accompanying consolidated
ﬁnancial statements.
Under the control and inﬂuence concepts, those companies in which theCompany, directly or indirectly, is able to exercise control over operations are
fully consolidated, and those companies over which the Group has the ability to
exercise signiﬁcant inﬂuence are accounted for by the equity method.
Investments in three (three in 2014) associated companies are accounted forby the equity method.
Investments in four (four in 2014) unconsolidated subsidiaries are stated atcost. If the equity method of accounting had been applied to the investmentsin these companies, the eﬀect on the accompanying consolidated ﬁnancial
statements would not be material.
Goodwill represents the excess of the cost of an acquisition over the fairvalue of the net assets of the acquired subsidiary and associated company at thedate of acquisition, and is carried at cost less accumulated amortization, which is
calculated by the straight-line method over 5 or 20 years.
All signiﬁcant intercompany balances and transactions have been eliminatedin consolidation. All material unrealized proﬁt included in assets resulting fromtransactions within the Group is also eliminated.

b. Uniﬁcation of Accounting Policies Applied to Foreign Subsidiaries
for the Consolidated Financial Statements—In May 2006, the AccountingStandards Board of Japan (the “ASBJ”) issued ASBJ Practical Issues Task Force(PITF) No. 18, “Practical Solution on Uniﬁcation of Accounting Policies Applied
to Foreign Subsidiaries for the Consolidated Financial Statements.” PITF
No. 18 prescribes that the accounting policies and procedures applied to aparent company and its subsidiaries for similar transactions and events undersimilar circumstances should in principle be uniﬁed for the preparation of theconsolidated ﬁnancial statements. However ﬁnancial statements prepared byforeign subsidiaries in accordance with either International Financial ReportingStandards or generally accepted accounting principles in the United States ofAmerica tentatively may be used for the consolidation process, except for thefollowing items that should be adjusted in the consolidation process so that net
income is accounted for in accordance with Japanese GAAP, unless they are notmaterial: (a) amortization of goodwill; (b) scheduled amortization of actuarial

80

Sysmex Annual Report 2015

gain or loss of pensions that has been directly recorded in the equity; (c) expensing capitalized development costs of research and development (R&D);(d) cancellation of the fair value model of accounting for property, plant andequipment and investment properties and incorporation of the cost model ofaccounting; and (e) exclusion of minority interests from net income, if containedin net income.

Financial Section

Thousands of
U.S. Dollars (Note 1)

Millions of Yenc. Uniﬁcation of Accounting Policies Applied to Foreign AssociatedCompanies for the Equity Method —In March 2008, the ASBJ issued ASBJ
Statement No. 16, “Accounting Standard for Equity Method of Accounting forInvestments.” The new standard requires adjustments to be made to conformthe associate’s accounting policies for similar transactions and events undersimilar circumstances to those of the parent company when the associate’s
ﬁnancial statements are used in applying the equity method unless it is impracticable to determine such adjustments. In addition, ﬁnancial statements preparedby foreign associated companies in accordance with either International
Financial Reporting Standards or generally accepted accounting principles in the
United States of America tentatively may be used in applying the equity method
if the following items are adjusted so that net income is accounted for inaccordance with Japanese GAAP, unless they are not material: (a) amortizationof goodwill; (b) scheduled amortization of actuarial gain or loss of pensions thathas been directly recorded in the equity; (c) expensing capitalized development
costs of R&D; (d) cancellation of the fair value model of accounting for property,
plant and equipment and investment properties and incorporation of the costmodel of accounting; and (e) exclusion of minority interests from net income, if
contained in net income.

d. Business Combination— In October 2003, the Business Accounting Council
issued a Statement of Opinion, “Accounting for Business Combinations,” and in
December 2005, the ASBJ issued ASBJ Statement No. 7, “Accounting Standard
for Business Divestitures” and ASBJ Guidance No. 10, “Guidance for AccountingStandard for Business Combinations and Business Divestitures.”
The accounting standard for business combinations allowed companies toapply the pooling-of-interests method of accounting only when certain speciﬁccriteria are met such that the business combination is essentially regarded as auniting-of-interests.
For business combinations that do not meet the uniting-of-interests criteria,
the business combination is considered to be an acquisition and the purchasemethod of accounting is required. This standard also prescribes the accounting
for combinations of entities under common control and for joint ventures.
In December 2008, the ASBJ issued a revised accounting standard for business combinations, ASBJ Statement No. 21, “Accounting Standard for Business
Combinations.” Major accounting changes under the revised accounting
standard are as follows: (1) The revised standard requires accounting for businesscombinations only by the purchase method. As a result, the pooling-of-interests
method of accounting is no longer allowed. (2) The previous accounting
standard required R&D costs to be charged to income as incurred. Under therevised standard, in-process R&D costs acquired in the business combination
are capitalized as an intangible asset. (3) The previous accounting standard
provided for a bargain purchase gain (negative goodwill) to be systematicallyamortized over a period not exceeding 20 years. Under the revised standard,
the acquirer recognizes the bargain purchase gain in proﬁt or loss immediately
on the acquisition date after reassessing and conﬁrming that all of the assets
acquired and all of the liabilities assumed have been identiﬁed after a review ofthe procedures used in the purchase price allocation. The revised standard wasapplicable to business combinations undertaken on or after April 1, 2011.

e. Cash Equivalents—Cash equivalents are short-term investments that are readily convertible into cash and that are exposed to insigniﬁcant risk of changes invalue. Cash equivalents include time deposits, commercial paper and bond funds,
all of which mature or become due within three months of the date of acquisition.

Sysmex Annual Report 201581

Consolidated Financial Statements

g. Allowance for Doubtful Accounts—The allowance for doubtful accounts
is stated in amounts considered to be appropriate based on the Group’s pastcredit loss experience and an evaluation of potential losses in the receivables
outstanding.

h. Inventories—Inventories are stated at cost determined by the average cost
method or net selling value for the Company and its consolidated domestic
subsidiaries, and at the lower of cost, determined by the moving-average method,or market for consolidated foreign subsidiaries.

i. Property, Plant and Equipment—Property, plant and equipment are statedat cost. Depreciation is computed by the straight-line method over the estimated useful lives of the assets. The range of useful lives is from 31 to 50 years
for buildings and structures, from 5 to 11 years for machinery and equipment,
and from 2 to 15 years for furniture and ﬁxtures.
Equipment held for lease is depreciated by the straight-line method over therespective lease periods.

j. Long-lived Assets—The Group reviews its long-lived assets for impairment
whenever events or changes in circumstance indicate the carrying amount of anasset or asset group may not be recoverable. An impairment loss is recognized if
the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash ﬂows expected to result from the continued use and eventual
disposition of the asset or asset group. The impairment loss would be measured
as the amount by which the carrying amount of the asset exceeds its recoverable
amount, which is the higher of the discounted cash ﬂows from the continued use
and eventual disposition of the asset or the net selling price at disposition.
k. Software—Software to be sold is amortized at the greater of either the
proportional amount to be amortized in proportion of the actual sales of thesoftware to be made during the current year to the estimated total sales overthe estimated salable years or the amount to be amortized using the straightline method over the estimated salable years. The estimated salable years are
principally three years.
Software for internal use is amortized by the straight-line method over theestimated usable years. The estimated usable years are principally ﬁve years.
l. Retirement and Pension Plans—The Company has deﬁned beneﬁt pension
plans for employees’ retirement beneﬁts and accounted for the liability for
retirement beneﬁts based on the projected beneﬁt obligations and plan assets atthe balance sheet date. Actuarial gains and losses are amortized on a straightline basis over ﬁve years within the average remaining service period. Past
service costs are amortized on a straight-line basis over ﬁve years within the
average remaining service period.
Certain consolidated subsidiaries have unfunded lump-sum payment plansfor employees’ retirement beneﬁts and accounted for the liability for retirement
beneﬁts based on the required amount in accordance with the retirement
allowance regulations.

82

Sysmex Annual Report 2015

In May 2012, the ASBJ issued ASBJ Statement No. 26, “AccountingStandard for Retirement Beneﬁts” and ASBJ Guidance No. 25, “Guidance on
Accounting Standard for Retirement Beneﬁts,” which replaced the accounting standard for retirement beneﬁts that had been issued by the BusinessAccounting Council in 1998 with an eﬀective date of April 1, 2000, and theother related practical guidance, and were followed by partial amendmentsfrom time to time through 2009.
(a) Under the revised accounting standard, actuarial gains and losses and past
service costs that are yet to be recognized in proﬁt or loss are recognizedwithin equity (accumulated other comprehensive income), after adjustingfor tax eﬀects, and any resulting deﬁcit or surplus is recognized as a liability(liability for retirement beneﬁts) or asset (asset for retirement beneﬁts).
(b) The revised accounting standard does not change how to recognize actuarial
gains and losses and past service costs in proﬁt or loss. Those amounts arerecognized in proﬁt or loss over a certain period no longer than the expected
average remaining service period of the employees. However, actuarial gains
and losses and past service costs that arose in the current period and have
not yet been recognized in proﬁt or loss are included in other comprehensive
income and actuarial gains and losses and past service costs that were recognized in other comprehensive income in prior periods and then recognized in
proﬁt or loss in the current period, are treated as reclassiﬁcation adjustments(see Note 16).
(c) The revised accounting standard also made certain amendments relating to
the method of attributing expected beneﬁt to periods, the discount rate andexpected future salary increases.
This accounting standard and the guidance for (a) and (b) above are eﬀective
for the end of annual periods beginning on or after April 1, 2013, and for (c)above are eﬀective for the beginning of annual periods beginning on or after
April 1, 2014, or for the beginning of annual periods beginning on or after April
1, 2015, subject to certain disclosure in March 2015, all with earlier application
being permitted from the beginning of annual periods beginning on or after
April 1, 2013. However, no retrospective application of this accounting standard
to consolidated ﬁnancial statements in prior periods is required.
The Company applied the revised accounting standard and guidance forretirement beneﬁts for (a) and (b) above, eﬀective March 31, 2014, and for (c)above, eﬀective April 1, 2014.
With respect to (c) above, the Company changed the method of attributing
the expected beneﬁt to periods from a point basis to a beneﬁt formula basis,the method of determining the discount rate from using the period whichapproximates the expected average remaining service period to using a single
weighted average discount rate reﬂecting the estimated timing and amountof beneﬁt payment, and recorded the eﬀect of (c) above as of April 1, 2014, inretained earnings. As a result, liability for retirement beneﬁts as of April 1, 2014,
increased by ¥303 million ($2,525 thousand), and retained earnings as of April
1, 2014, decreased by ¥195 million ($1,625 thousand). The eﬀects on operating
income and income before income taxes and minority interests for the year
ended March 31, 2015, were minor. In addition, the eﬀects on basic net income
per share and diluted net income per share for the year ended March 31, 2015,
were minor.
Unfunded retirement beneﬁts for the Company’s directors are provided at
the estimated amount which would be required if such individuals retired at thebalance sheet date. However, the Company abolished its unfunded retirement
beneﬁt plan on June 24, 2005. No additional provisions have been recorded
for retirement beneﬁts to be paid to the Company’s directors since then. The
liability for directors’ retirement beneﬁts is the amount provided in proportion
to the term that present directors had been in place before June 24, 2005.

m. Asset Retirement Obligations—In March 2008, the ASBJ issued ASBJ
Statement No. 18, “Accounting Standard for Asset Retirement Obligations” andASBJ Guidance No. 21, “Guidance on Accounting Standard for Asset Retirement
Obligations.” Under this accounting standard, an asset retirement obligation isdeﬁned as a legal obligation imposed either by law or contract that results fromthe acquisition, construction, development and normal operation of a tangible
ﬁxed asset and is associated with the retirement of such tangible ﬁxed asset.
The asset retirement obligation is recognized as the sum of the discounted cash
ﬂows required for the future asset retirement and is recorded in the period
in which the obligation is incurred if a reasonable estimate can be made. If
a reasonable estimate of the asset retirement obligation cannot be made in
the period the asset retirement obligation is incurred, the liability should berecognized when a reasonable estimate of asset retirement obligation can be
made. Upon initial recognition of a liability for an asset retirement obligation,
an asset retirement cost is capitalized by increasing the carrying amount of therelated ﬁxed asset by the amount of the liability. The asset retirement cost is
subsequently allocated to expense through depreciation over the remaining
useful life of the asset. Over time, the liability is accreted to its present value
each period. Any subsequent revisions to the timing or the amount of theoriginal estimate of undiscounted cash ﬂows are reﬂected as an adjustment tothe carrying amount of the liability and the capitalized amount of the related
asset retirement cost.

n. Stock Option—ASBJ Statement No. 8, “Accounting Standard for Stock
Options” and related guidance are applicable to stock options granted on andafter May 1, 2006.
This standard requires companies to recognize compensation expense for
employee stock options based on the fair value at the date of grant and overthe vesting period as consideration for receiving goods or services. The standard
also requires companies to account for stock options granted to nonemployees
based on the fair value of either the stock option or the goods or services
received. In the balance sheet, the stock options are presented as stock acquisition rights as a separate component of equity until exercised.
o. Research and Development—R&D costs are charged to income as incurred.
Such costs were ¥14,692 million ($122,433 thousand) and ¥13,260 million for theyears ended March 31, 2015 and 2014, respectively.

p. Leases— In March 2007, the ASBJ issued ASBJ Statement No. 13, “AccountingStandard for Lease Transactions,” which revised the previous accounting
standard for lease transactions.
(1) Finance Leases as Lessee
Under the previous accounting standard, ﬁnance leases that were deemed
to transfer ownership of the leased property to the lessee were capitalized.
However, other ﬁnance leases were permitted to be accounted for as
operating lease transactions if certain “as if capitalized” information wasdisclosed in the notes to the lessee’s ﬁnancial statements. The revised accounting standard requires that all ﬁnance lease transactions be capitalized
by recognizing lease assets and lease obligations in the balance sheet. In
addition, the revised accounting standard permits leases that existed at thetransition date and do not transfer ownership of the leased property to thelessee to continue to be accounted for as operating lease transactions.
(2) Finance Leases as Lessor
Under the previous accounting standard, ﬁnance leases that were deemed
to transfer ownership of the leased property to the lessee were treatedas sales. However, other ﬁnance leases were permitted to be accounted
for as operating lease transactions if certain “as if sold” information wasdisclosed in the notes to the lessor’s ﬁnancial statements. The revised
accounting standard requires that all ﬁnance leases that are deemed totransfer ownership of the leased property to the lessee are recognized aslease receivables, and all ﬁnance leases that are not deemed to transfer
ownership of the leased property to the lessee are recognized as investments in lease.

q. Bonuses to Directors—Bonuses to directors are accrued at the end of theyear to which such bonuses are attributable.

r. Construction Contracts—In December 2007, the ASBJ issued ASBJ
Statement No. 15, “Accounting Standard for Construction Contracts” andASBJ Guidance No. 18, “Guidance on Accounting Standard for Construction
Contracts.” Under this new accounting standard, construction revenue and construction costs should be recognized by the percentage-of-completion method
if the outcome of a construction contract can be estimated reliably. When total
construction revenue, total construction costs and the stage of completion of
the contract at the balance sheet date can be reliably measured, the outcomeof a construction contract is deemed to be estimated reliably. If the outcome ofa construction contract cannot be reliably estimated, the completed-contract
method should be applied. When it is probable that the total construction costs
will exceed total construction revenue, an estimated loss on the contract shouldbe immediately recognized by providing for a loss on construction contracts.

Financial Section

f. Marketable and Investment Securities—Marketable and investment securities are classiﬁed and accounted for, depending on management’s intent, as
follows: (1) trading securities, which are held for the purpose of earning capitalgains in the near term, are reported at fair value, and the related unrealized
gains and losses are included in earnings; (2) held-to-maturity debt securities,
for which there is a positive intent and ability to hold to maturity, are reported
at amortized cost; and (3) available-for-sale securities, which are not classiﬁed aseither of the aforementioned securities, are reported at fair value, with unrealized gains and losses, net of applicable taxes, reported in a separate componentof equity.
Nonmarketable available-for-sale securities are stated at cost determinedby the moving-average method. For other-than-temporary declines in fair value,
investment securities are reduced to net realizable value by a charge to income.

s. Income Taxes—The provision for income taxes is computed based on thepretax income included in the consolidated statement of income. The asset andliability approach is used to recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary diﬀerences between the carrying
amounts and the tax bases of assets and liabilities. Deferred taxes are measured
by applying currently enacted income tax rates to the temporary diﬀerences.

t. Foreign Currency Transactions—All short-term and long-term monetary
receivables and payables denominated in foreign currencies are translated
into Japanese yen at the exchange rates at the balance sheet date. The foreignexchange gains and losses from translation are recognized in the consolidated
statement of income to the extent that they are not hedged by forward
exchange contracts.

u. Foreign Currency Financial Statements—The balance sheet accounts ofthe consolidated foreign subsidiaries are translated into Japanese yen at thecurrent exchange rate as of the balance sheet date except for equity, which istranslated at the historical rate. Diﬀerences arising from such translation are
shown as “Foreign currency translation adjustments” under accumulated othercomprehensive income in a separate component of equity.
Revenue and expense accounts of consolidated foreign subsidiaries aretranslated into yen at the average exchange rate.
v. Derivatives and Hedging Activities—The Group uses foreign exchange
forward contracts and interest rate swaps to manage its exposure to ﬂuctuations
in foreign exchange and interest rates. The Group does not enter into derivatives for trading or speculative purposes.
Derivative ﬁnancial instruments and foreign currency transactions areclassiﬁed and accounted for as follows: (1) all derivatives are recognized as either
assets or liabilities and measured at fair value, and gains or losses on derivativetransactions are recognized in the consolidated statement of income; and (2)for derivatives used for hedging purposes, if such derivatives qualify for hedge
accounting because of high correlation and eﬀectiveness between the hedging
instruments and the hedged items, gains or losses on derivatives are deferred
until maturity of the hedged transactions.
Interest rate swaps which qualify for hedge accounting and meet speciﬁcmatching criteria are not remeasured at market value but the diﬀerential paidor received under the swap agreements is recognized and included in interest
expense or income.

w. Per Share Information—Basic net income per share is computed by dividing
net income available to common shareholders by the weighted-average number ofcommon shares outstanding for the period, retroactively adjusted for stock splits.
Diluted net income per share reﬂects the potential dilution that could occur
if warrants were exercised. Diluted net income per share of common stock
assumes full exercise of outstanding warrants.
Cash dividends per share presented in the accompanying consolidated
statement of income are dividends applicable to the respective ﬁscal years,

Sysmex Annual Report 201583

Consolidated Financial Statements

x. Accounting Changes and Error Corrections—In December 2009, ASBJ
issued ASBJ Statement No. 24, “Accounting Standard for Accounting Changes andError Corrections” and ASBJ Guidance No. 24, “Guidance on Accounting Standard
for Accounting Changes and Error Corrections.” Accounting treatments under thisstandard and guidance are as follows:(1) Changes in Accounting Policies
When a new accounting policy is applied following revision of an accounting standard, the new policy is applied retrospectively unless the revised
accounting standard includes speciﬁc transitional provisions, in which casethe entity shall comply with the speciﬁc transitional provisions.
(2) Changes in Presentation
When the presentation of ﬁnancial statements is changed, prior-period ﬁnancial statements are reclassiﬁed in accordance with the new presentation.
(3) Changes in Accounting Estimates
A change in an accounting estimate is accounted for in the period of thechange if the change aﬀects that period only, and is accounted for prospectively if the change aﬀects both the period of the change and future periods.
(4) Corrections of Prior-Period Errors
When an error in prior-period ﬁnancial statements is discovered, thosestatements are restated.

y. New Accounting Pronouncement
Accounting Standards for Business Combinations and Consolidated Financial
Statements—In September, 2013, the ASBJ issued revised ASBJ Statement No.
21, “Accounting Standard for Business Combinations,” revised ASBJ GuidanceNo. 10, “Guidance on Accounting Standards for Business Combinations andBusiness Divestitures,” and revised ASBJ Statement No. 22, “AccountingStandard for Consolidated Financial Statements.” Major accounting changes are
as follows:(a) Transactions with noncontrolling interest—A parent’s ownership interest in a
subsidiary might change if the parent purchases or sells ownership interests
in its subsidiary. The carrying amount of minority interest is adjusted toreﬂect the change in the parent’s ownership interest in its subsidiary while
the parent retains its controlling interest in its subsidiary. Under the current
accounting standard, any diﬀerence between the fair value of the consideration received or paid and the amount by which the minority interest is
adjusted is accounted for as an adjustment of goodwill or as proﬁt or loss
in the consolidated statement of income. Under the revised accounting
standard, such diﬀerence shall be accounted for as capital surplus as long as
the parent retains control over its subsidiary.
(b) Presentation of the consolidated balance sheet—In the consolidated balance
sheet, “minority interest” under the current accounting standard will bechanged to “noncontrolling interest” under the revised accounting standard.
(c) Presentation of the consolidated statement of income—In the consolidated
statement of income, “income before minority interest” under the current
accounting standard will be changed to “net income” under the revised accounting standard, and “net income” under the current accounting standard
will be changed to “net income attributable to owners of the parent” under
the revised accounting standard.
(d) Provisional accounting treatments for a business combination—If the initialaccounting for a business combination is incomplete by the end of thereporting period in which the business combination occurs, an acquirer
shall report in its ﬁnancial statements provisional amounts for the items forwhich the accounting is incomplete. Under the current accounting standard
guidance, the impact of adjustments to provisional amounts recorded in abusiness combination on proﬁt or loss is recognized as proﬁt or loss in theyear in which the measurement is completed. Under the revised accounting
standard guidance, during the measurement period, which shall not exceed
one year from the acquisition, the acquirer shall retrospectively adjust

84

Sysmex Annual Report 2015

the provisional amounts recognized at the acquisition date to reﬂect new
information obtained about facts and circumstances that existed as of theacquisition date and that would have aﬀected the measurement of theamounts recognized as of that date. Such adjustments shall be recognized asif the accounting for the business combination had been completed at theacquisition date.
(e) Acquisition-related costs—Acquisition-related costs are costs, such as advisory fees or professional fees, which an acquirer incurs to eﬀect a businesscombination. Under the current accounting standard, the acquirer accounts
for acquisition-related costs by including them in the acquisition costs of
the investment. Under the revised accounting standard, acquisition-related
costs shall be accounted for as expenses in the periods in which the costs
are incurred.
The above accounting standards and guidance for (a) transactions with
noncontrolling interest, (b) presentation of the consolidated balance sheet,(c) presentation of the consolidated statement of income, and (e) acquisitionrelated costs are eﬀective for the beginning of annual periods beginning on orafter April 1, 2015. Earlier application is permitted from the beginning of annual
periods beginning on or after April 1, 2014, except for (b) presentation of theconsolidated balance sheet and (c) presentation of the consolidated statementof income. In the case of earlier application, all accounting standards andguidance above, except for (b) presentation of the consolidated balance sheet
and (c) presentation of the consolidated statement of income, should be applied
simultaneously.
Either retrospective or prospective application of the revised accounting
standards and guidance for (a) transactions with noncontrolling interest and (e)acquisition-related costs is permitted. In retrospective application of the revised
standards and guidance, the accumulated eﬀects of retrospective adjustments
for all (a) transactions with noncontrolling interest and (e) acquisition-related
costs which occurred in the past shall be reﬂected as adjustments to thebeginning balance of capital surplus and retained earnings for the year of
the ﬁrst-time application. In prospective application, the new standards andguidance shall be applied prospectively from the beginning of the year of theﬁrst-time application.
The revised accounting standards and guidance for (b) presentation of theconsolidated balance sheet and (c) presentation of the consolidated statementof income shall be applied to all periods presented in ﬁnancial statements
containing the ﬁrst-time application of the revised standards and guidance.
The revised standards and guidance for (d) provisional accounting treatments for a business combination are eﬀective for a business combination which
occurs on or after the beginning of annual periods beginning on or after April 1,
2015. Earlier application is permitted for a business combination which occurs on
or after the beginning of annual periods beginning on or after April 1, 2014.
The Company expects to apply the revised accounting standards andguidance for (a), (b), (c) and (e) above from April 1, 2015, and for (d) above fora business combination which will occur on or after April 1, 2015, and is in theprocess of measuring the eﬀects of applying the revised accounting standards
and guidance in future applicable periods.

3. ACCOUNTING CHANGE
After-Sales Service Expense—Prior to April 1, 2014, expenses related to after-sales
service on instruments were recorded in selling, general and administrative
expenses. Eﬀective April 1, 2014, however, the Company and its consolidated
subsidiaries changed to record these expenses in cost of sales.
This accounting change was made to reﬂect the fact that increasing
customer demand has made after-sales services a more material part of sales.
Furthermore, for the year ended March 31, 2015, the Company introduced a new
system for calculating expenses related to after-sales service, thereby clarifying
the relationship between sales and cost of sales and allowing gross proﬁt to bepresented more appropriately.
As the Company and its consolidated subsidiaries adopted this new systemfor calculating after-sales services consistently at the beginning of the year

ended March 31, 2015, and as gathering suﬃcient information to apply thismethod for the year ended March 31, 2014, is not practical, this new accounting
policy has not been applied retroactively, and is applied only to ﬁnancial statements from the beginning of the year ended March 31, 2015. As no after-sales
services were in progress as of March 31, 2014, this accounting change had noeﬀect on the retained earnings among the equity section.
As a result, compared with the previous method, cost of sales for the year
ended March 31, 2015, increased by ¥13,046 million ($108,717 thousand) andgross proﬁt and selling, general and administrative expenses for the year ended
March 31, 2015, decreased by ¥13,046 million ($108,717 thousand). This accounting change has no eﬀect on operating income and income before income taxes
and minority interests for the year ended March 31, 2015.
Shipping Costs for Delivering Products to Customers—Prior to April 1, 2014, theCompany and its certain consolidated subsidiaries recorded the cost of shipping
products that had been sold to customers in selling, general and administrative
expenses, while other consolidated subsidiaries recorded these costs in costof sales. Eﬀective April 1, 2014, however, the Company and its all consolidated
subsidiaries uniﬁed the accounting to record these costs in cost of sales.
This accounting change was made to reﬂect the Company’s product supply
activities in the ﬁnancial statements more appropriately triggered by the reformof the trade terms between the Company and its subsidiaries.
This accounting change has been applied retroactively.
As a result, cost of sales for the year ended March 31, 2014, increased by¥1,128 million and gross proﬁt and selling, general and administrative expenses
for the year ended March 31, 2014, decreased by ¥1,128 million. This accountingchange had no eﬀect on operating income and income before income taxes andminority interests for the ﬁscal year ended March 31, 2014. Furthermore, thisaccounting change had no cumulative eﬀect from periods prior to the ﬁnancial
statements presented.

4. CHANGES IN PRESENTATION
Prior to April 1, 2014, “Asset for retirement beneﬁts” was included in “Other
assets” among the investments and other assets section of the consolidatedbalance sheet. Since during this ﬁscal year ended March 31, 2015, the amountincreased signiﬁcantly, such amount is disclosed separately in the investments
and other assets section of the consolidated balance sheet as of March 31, 2015.
The amount included in “Other assets” as of March 31, 2014, was ¥14 million.
Prior to April 1, 2014, “Purchases of investment securities” was included
in “Other - net” among the investing activities section of the consolidated
statement of cash ﬂows. Since during this ﬁscal year ended March 31, 2015,
the amount increased signiﬁcantly, such amount is disclosed separately in theinvesting activities section of the consolidated statement of cash ﬂows for theyear ended March 31, 2015. The amount included in “Other - net” for the year
ended March 31, 2014, was ¥42 million.

5. SHORT-TERM INVESTMENTS AND INVESTMENT SECURITIESShort-term investments and investment securities as of March 31, 2015 and2014, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2015
2014
2015
Current:
Time deposits other than cash
equivalents
¥ 53
¥ 151
$ 442
Investment trust
241
131
2,008
Total
¥ 294
¥ 282
$ 2,450
Non-current:
Marketable equity securities¥ 3,595 ¥ 3,341$ 29,958
Unquoted equity securities
1,648
942
13,734
Total¥ 5,243 ¥ 4,283$ 43,692

The costs and aggregate fair values of investment securities as of March 31,
2015 and 2014, were as follows:
Millions of Yen
2015
Unrealized Unrealized
Cost
Fair Value
Gains
LossesAvailable-for-sale Equity securities¥ 1,569¥ 2,026¥ 3,595

Cost
Available-for-sale Equity securities¥ 1,569

Financial Section

including dividends to be paid after the end of the year, retroactively adjusted
for stock splits.

Millions of Yen
2014
Unrealized Unrealized
Fair Value
Gains
Losses¥ 1,772¥ (0)¥ 3,341

Thousands of U.S. Dollars
2015
Unrealized Unrealized
Cost
Fair Value
Gains
LossesAvailable-for-sale Equity securities$ 13,075$ 16,883$ 29,958

The information for available-for-sale securities which were sold during theyears ended March 31, 2015 and 2014, were as follows:
Millions of Yen
2015
Realized Realized
Proceeds
Gains
LossesAvailable-for-sale Equity securities¥1¥0Millions of Yen
2014
Realized Realized
Proceeds
Gains
LossesAvailable-for-sale Equity securities¥2¥1

Thousands of U.S. Dollars
2015
Realized Realized
Proceeds
Gains
LossesAvailable-for-sale Equity securities$8$0

The impairment losses on available-for-sale equity securities for the year
ended March 31, 2014, were ¥46 million.

6. INVENTORIESInventories as of March 31, 2015 and 2014, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2015
2014
2015
Finished products and merchandise ¥ 22,737 ¥ 21,242$ 189,475
Work in process
2,870
1,726
23,917
Raw materials
3,801
3,648
31,675
Supplies
704
4,000
480
Total
¥ 29,888 ¥ 27,320$ 249,067

Sysmex Annual Report 201585

Consolidated Financial Statements

Goodwill as of March 31, 2015 and 2014, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2015
2014
2015
Goodwill on purchase of¥ 301 ¥ ,594
$ 2,508a specific business
Consolidation goodwill
11,813
12,521
98,442
Total¥ 12,114 ¥ 13,115$ 100,950
Goodwill on purchase of a speciﬁc business and consolidation goodwill areamortized using the straight-line method over 5 or 20 years.

8. SHORT-TERM BANK LOANS AND LONG-TERM DEBT
Short-term bank loans at March 31, 2014, consisted of bank overdrafts. The
annual interest rates applicable to the short-term bank loans ranged from 0.21%
to 0.22% at March 31, 2014.
Long-term debt as of March 31, 2014, consisted of the following:(1) The changes in deﬁned beneﬁt obligation for the years ended March 31,
2015 and 2014, were as follows:
Millions of Yen
2015
Balance at beginning of year
(as previously reported)
Cumulative effect ofaccounting change
Balance at beginning of year
(as restated)2014¥ 11,980 ¥ 11,373
303

Current service costThousands of
U.S. Dollars
2015$ 99,833

148

164

1,233

(292)

(2,842)

Recognized actuarial (gains)losses(353)

179(2,942)

12,283

11,373102,358

939

877

7,825

Amortization of prior service cost
Net periodic benefit costs

148

164

1,233

458

(1)

3,817

Benefits paid

(554)

(512)

(4,617)(214)

79(1,783)¥ 13,060 ¥ 11,980$ 108,833

Land
Buildings and structures - net ofaccumulated depreciation
Machinery and equipment - net ofaccumulated depreciation
Total

¥ 26

$ 217

259

2,158

17

142

¥ 302

$ 2,517

The Group did not have collateralized bank loans as of March 31, 2015.

9. RETIREMENT AND PENSION PLANS
The Company and its certain consolidated subsidiaries have retirement benefit
plans for employees. Under most circumstances, employees terminating theiremployment are entitled to retirement benefits determined based on the rateof pay at the time of termination, years of service and certain other factors.
Employees are entitled to larger payments if the termination is involuntary, by
retirement at the mandatory retirement age or by death.
The Company has defined benefit pension plans and its certain consolidated
subsidiaries have unfunded lump-sum payment plans or defined contribution
pension plans.

6

6

50

¥ 399

¥ 934

$ 3,324(5) Amounts recognized in other comprehensive income (before income
tax effect) in respect of defined retirement benefit plans for the years
ended March 31, 2015 and 2014
Millions of Yen

2014

Thousands of
U.S. Dollars
2015¥ 11,362 ¥ 9,746$ 94,683

Millions of Yen
2015
Balance at beginning of year
Expected return on plan assets
Actuarial (gains) losses

The carrying amounts of assets pledged as collateral for the bank loans at
March 31, 2015, were as follows:
Millions ofThousands of
U.S. Dollars
Yen$ 7,825(341)(2) The changes in plan assets for the years ended March 31, 2015 and 2014,
were as follows:
¥ 155
1
156
(51)
¥ 105

¥ 877

Expected return on plan assets

Millions of Yen
Loans from banks, due through 2021, with interest
ranging from 0.02% to 5.45% for 2014:
Collateralized
Unsecured
Total
Less current portionLong-term debt, less current portion

2014

¥ 939

Interest cost

Interest cost

Others2015

Thousands of
U.S. Dollars
2015

Millions of Yen

Service cost

341

292

2,842

1,577

992

13,142Contributions from the employer

752

835

6,267

Benefits paid

(472)

(503)

(3,934)¥ 13,560 ¥ 11,362$ 113,000

Balance at end of year

2015
Prior service cost(3) Reconciliation between the liability recorded in the consolidated balance
sheet and the balances of deﬁned beneﬁt obligation and plan assets

2014

Thousands of
U.S. Dollars
2015

Funded defined benefit obligation ¥ 12,599 ¥ 11,348$104,992

Plan assets

2015

Unfunded defined benefit obligation
Net liability (asset) arising fromdefined benefit obligation¥¥

Actuarial (gains) losses
Total

2014

6

$

6,383

¥ 772

$ 6,433

2015
Unrecognized actuarial (gains)losses
Total

¥

(10)

¥

2014

Thousands of
U.S. Dollars
2015

(16)

$

2,080

1,314

17,333¥ 2,070¥ 1,298$ 17,250(7) Plan assets
a. Components of plan assets(11,362)(113,000)

(961)

(14)

(8,008)

461

632

3,842

Domestic debt investments

29%

31%

(500) ¥618

$ 0(4,166)

Domestic equity investments

30

26

Foreign debt investments

11

12Foreign equity investments

25

26

2015

2014

Liability for retirement benefits

¥ 461

¥ 632

$ 3,842

Asset for retirement benefits

(961)

(14)

(8,008)Net liability (asset) arising fromdefined benefit obligation¥ (500)¥ 618$ (4,166)

Millions of Yen

Plan assets as of March 31, 2015 and 2014, consisted of the following:
2015
2014

Others

5

5

Total

100%

100%

b. Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering thelong-term rates of return which are expected currently and in the futurefrom the various components of the plan assets.

(8) Assumptions used for the years ended March 31, 2015 and 2014, are set
forth as follows:

86

Sysmex Annual Report 2015

The funded status of the multi-employer plan calculated as of March 31, 2014,
was as follows:
Millions of Yen

Plan assets
Sum of actuarial liabilities ofpension plan and minimum
actuarial reserve
Net balance

2015

2014

Discount rate

1.0%

1.5%

Expected rate of return on plan assets

3.0%

3.0%

The Pension
Osaka
Fund of Japan
Pharmaceutical
Electronics
WelfareInformation
Pension Fund
Technology
Association
Industry¥ 231,951¥ 292,417
262,247

366,867¥ (30,296)¥ (74,450)

Thousands of U.S. Dollars(83)(13,560)

Thousands of
U.S. Dollars
2015Year Ended March 31, 2015

50

766

Millions of Yen

Required contributions to the defined contribution pension plan of certain
consolidated subsidiaries were ¥638 million ($5,317 thousand) and ¥512 million asof March 31, 2015 and 2014, respectively.
In addition, the Company and its certain consolidated subsidiaries participate
in contributory multiemployer pension plans covering substantially all of theiremployees. Therefore, it is accounted for using the same method as a defined
contribution plan.
The contributions to such multi-employer plan, which are accounted forusing the same method as a defined contribution plan, were ¥572 million ($4,767
thousand) and ¥545 million as of March 31, 2015 and 2014, respectively.

Thousands of
U.S. Dollars
2015(6) Amounts recognized in accumulated other comprehensive income(before income tax effect) in respect of defined retirement benefit
plans as of March 31, 2015 and 2014

Unrecognized prior service cost

Millions of Yen(9) Defined contribution pension plan

2,525

Actuarial (gains) losses

Balance at end of year(4) The components of net periodic benefit costs for the years ended
March 31, 2015 and 2014, were as follows:

Financial Section

7. GOODWILL

Plan assets
Sum of actuarial liabilities ofpension plan and minimum
actuarial reserve
Net balance

The Pension
Osaka
Fund of Japan
Pharmaceutical
Electronics
WelfareInformation
Pension Fund
Technology
Association
Industry$ 1,932,925$2,436,808
2,185,392

3,057,225$ (252,467)$ (620,417)

The net balance above is mainly caused by past service cost of ¥82,118
million ($684,317 thousand) and a deficiency brought forward of ¥23,869 million($198,908 thousand). Past service cost under the plan is amortized on a straightline basis over 20 years for The Pension Fund of Japan Electronics Information
Technology Industry or over 17 years for Osaka Pharmaceutical Welfare Pension
Fund Association, and the special contributions of ¥7 million ($58 thousand),
which are utilized for such amortization, were expensed in the consolidated
statement of income of the Group.
The contribution ratio of the Group in the multi-employer plan calculated
as of March 31, 2014, was as follows:
The Pension
Osaka
Fund of Japan
Pharmaceutical
Electronics
WelfareInformation
Pension Fund
Technology
Association
Industry
The contribution ratio of the
5.29%
0.16%
Group in the multi-employer plan
The ratios above do not represent the actual actuarial liability ratio of
the Group.

Sysmex Annual Report 201587

Consolidated Financial Statements

The funded status of the multi-employer plan calculated as of March 31, 2013,
was as follows:
Millions of Yen

Plan assets
Sum of actuarial liabilities ofpension plan and minimum
actuarial reserve
Net balance

The Pension
Osaka
Fund of Japan
Pharmaceutical
Electronics
WelfareInformation
Pension Fund
Technology
Association
Industry¥ 213,152¥ 257,829
248,260

354,525¥ (35,108)¥ (96,696)

The net balance above is mainly caused by past service cost of ¥85,115
million and a deficiency brought forward of ¥44,705 million. Past service
cost under the plan is amortized on a straight-line basis over 20 years for The
Pension Fund of Japan Electronics Information Technology Industry or over
18 years for Osaka Pharmaceutical Welfare Pension Fund Association, and thespecial contributions of ¥7 million, which are utilized for such amortization, were
expensed in the consolidated statement of income of the Group.
The contribution ratio of the Group in the multi-employer plan calculated
as of March 31, 2013, was as follows:
The Pension
Osaka
Fund of Japan
Pharmaceutical
Electronics
WelfareInformation
Pension Fund
Technology
Association
Industry
The contribution ratio of the
5.05%
0.15%
Group in the multi-employer plan
The ratios above do not represent the actual actuarial liability ratio of
the Group.
The Company also has recorded a liability for an unfunded retirement
benefit plan covering all of its directors in the amount of ¥102 million ($850
thousand) and ¥102 million as of March 31, 2015 and 2014, respectively.

10. EQUITY
Japanese companies are subject to the Companies Act of Japan (the “CompaniesAct”). The significant provisions in the Companies Act that affect financial andaccounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time during(b) Increases/decreases and transfer of common stock, reserve and surplus
The Companies Act requires that an amount equal to 10% of dividends must
be appropriated as a legal reserve (a component of retained earnings) or
as additional paid-in capital (a component of capital surplus) dependingon the equity account charged upon the payment of such dividends until
the aggregate amount of legal reserve and additional paid-in capital equals
25% of the common stock. Under the Companies Act, the total amount ofadditional paid-in capital and legal reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve,
additional paid-in capital, other capital surplus and retained earnings can betransferred among the accounts within equity under certain conditions upon
resolution of the shareholders.

(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury stockand dispose of such treasury stock by resolution of the Board of Directors.
The amount of treasury stock purchased cannot exceed the amount available
for distribution to the shareholders which is determined by a speciﬁc formula.
Under the Companies Act, stock acquisition rights are presented as aseparate component of equity.
The Companies Act also provides that companies can purchase bothtreasury stock acquisition rights and treasury stock. Such treasury stockacquisition rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
On April 1, 2014, the Company made a two-for-one stock split by way of
a free share distribution based on the resolution of the Board of Directors’
meeting held on March 5, 2014.

11. STOCK OPTION
The stock options outstanding as of March 31, 2015, are as follows:
Stock Option

Persons Granted2007 Stock Option

9 directors
152 employees
18 directors of subsidiaries
42 employees of subsidiaries
6 directors
203 employees
34 directors of subsidiaries
43 employees of subsidiaries

2013 Stock Option

88

Sysmex Annual Report 2015

Number of
Options Granted(Shares*)
2,932,800

1,460,000

Exercise
Price*

Exercise Period

July 30, 2007

¥ 1,163($ 9.69)

From July 30, 2009 to
July 29, 2015

September 13, 2013

¥ 3,110($ 25.92)

From September 13, 2015 to
September 12, 2021

Date of Grant

The stock option activity is as follows:

12. INCOME TAXES
2007 Stock
Option2013 Stock
Option(Shares*)(Shares*)

For the year ended March 31, 2014
Non-vested
March 31, 2013 - Outstanding
GrantedCanceled
VestedMarch 31, 2014 - Outstanding
VestedMarch 31, 2013 - Outstanding

1,460,000(8,000)1,452,000
1,436,400

VestedExercised
Canceled
March 31, 2014 - Outstanding(754,800)(4,000)677,600

For the year ended March 31, 2015
Non-vested
March 31, 2014 - Outstanding
GrantedCanceled
VestedMarch 31, 2015 - Outstanding
VestedMarch 31, 2014 - Outstanding

1,452,000(14,000)
1,438,000
677,600

Deferred tax liabilities (non-current):

VestedExercised(340,800)

Canceled
March 31, 2015 - Outstanding
Exercise price*
Average stock price at exercise*
Fair value price at grant date

The Company and its domestic subsidiaries are subject to Japanese national
and local income taxes which, in the aggregate, resulted in a normal eﬀective
statutory tax rate of approximately 35.6% and 38.0% for the years ended March
31, 2015 and 2014, respectively. Foreign subsidiaries are subject to income taxesof the countries in which they operate.
The tax eﬀects of signiﬁcant temporary diﬀerences and loss carryforwards
which resulted in deferred tax assets and liabilities at March 31, 2015 and 2014,
are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2015
2014
2015
Deferred tax assets (current):
Unrealized intercompany profits ¥ 4,887 ¥ 4,155$ 40,725
Inventories
555
579
4,625
Accrued bonuses
1,196
1,184
9,967
Accrued enterprise tax
575
451
4,792
Other
1,864
1,659
15,533
Total
9,077
8,028
75,642
Deferred tax assets (non-current):
Depreciation
147
85
1,225
Liability for retirement benefits
117
91
975
Software
930
829
7,750
Investment securities
299
330
2,492
Other
1,890
1,365
15,750Less valuation allowance
(593)
(224)
(4,942)
Total
2,790
2,476
23,250
Deferred tax liabilities (current)
191
24
1,592

Financial Section

the ﬁscal year in addition to the year-end dividend upon resolution at theshareholders’ meeting. For companies that meet certain criteria including (1)having the Board of Directors, (2) having independent auditors, (3) having an
Audit & Supervisory Board, and (4) the term of service of the directors beingprescribed as one year rather than the normal two year term by its articles
of incorporation, the Board of Directors may declare dividends (except for
dividends-in-kind) at any time during the ﬁscal year if the company hasprescribed so in its articles of incorporation. However, the Company cannot
do so because it does not meet all the above criteria.
The Companies Act permits companies to distribute dividends-in-kind(noncash assets) to shareholders subject to a certain limitation andadditional requirements.
Semiannual interim dividends may also be paid once a year upon
resolution by the Board of Directors if the articles of incorporation of thecompany so stipulate. The Companies Act provides certain limitations on
the amounts available for dividends or the purchase of treasury stock. The
limitation is deﬁned as the amount available for distribution to the shareholders, but the amount of net assets after dividends must be maintained at
no less than ¥3 million.

Year Ended March 31, 2014

336,800¥ 1,163($ 9.69)¥ 4,517($ 37.64)¥ 98,325($ 819.38)¥ 3,110($ 25.92)¥ 174,900($ 1,457.50)* Shares, exercise price and average stock price at exercise have been restated, as appropriate, to reﬂect a two-for-one stock split eﬀected April 1, 2014.

The Assumptions Used to Measure Fair Value of 2007 Stock Option
Estimate method:Black-Scholes option pricing model
Volatility of stock price:26.14%
Estimated remaining
outstanding period:
five years
Estimated dividend:¥ 36 per share
Risk free interest rate:
1.403%Net unrealized gain on
available-for-sale securities
653
Revaluation of land forconsolidation
400
Revaluation of intangible
assets for consolidation
1,151
Asset for retirement benefits
313
Investment loss for subsidiaries
capital reduction bycorporation tax law
342
Undistributed earnings ofconsolidated foreign subsidiaries
7,558
Other
1,100
Total
11,517
Net deferred tax assets
¥ 159

630

5,442

400

3,333

1,229
5

9,592
2,608

377

2,850

4,570
1,212
8,423
¥ 2,057

62,983
9,167
95,975$ 1,325

Since the actual eﬀective tax rate at March 31, 2014, diﬀered from the normal
eﬀective statutory tax rate by less than 5%, disclosure of details is omitted.

The Assumptions Used to Measure Fair Value of 2013 Stock Option
Estimate method:Black-Scholes option pricing model
Volatility of stock price:34.51%
Estimated remaining
outstanding period:
five years
Estimated dividend:¥ 36 per share
Risk free interest rate:
0.250%

Sysmex Annual Report 201589

Consolidated Financial Statements

Maturities of investment in lease for ﬁnance leases that are not deemed totransfer ownership of the leased property to the lessee are as follows:
Millions ofThousands ofYear Ending March 31
Yen
U.S. Dollars
2016¥ 1,495$ 12,458
2017
1,273
10,608
2018
986
8,217
2019
710
5,917
2020
249
2,075
2021 and thereafter
99
825
Total
¥ 4,812$ 40,100

Tax reform laws enacted in 2014 in Japan changed the normal eﬀective
statutory tax rate for the ﬁscal year beginning on or after April 1, 2014, fromapproximately 38.0% to 35.6%. The eﬀect of this change was to decrease deferred
tax assets in the consolidated balance sheet as of March 31, 2014, by ¥152 million
and to increase income taxes-deferred in the consolidated statement of income
for the year then ended by ¥152 million.
New tax reform laws enacted in 2015 in Japan changed the normal eﬀective statutory tax rate for the ﬁscal year beginning on or after April 1, 2015, toapproximately 33.0% and for the ﬁscal year beginning on or after April 1, 2016, toapproximately 32.2%. The eﬀect of these changes was to decrease deferred tax
assets, net of deferred tax liabilities, by ¥69 million ($575 thousand) and increase
accumulated other comprehensive income for unrealized gain on available-forsale securities by ¥68 million ($567 thousand), deferred gain on derivatives underhedge accounting by ¥0 million ($0 thousand), deﬁned retirement beneﬁt planby ¥67 million ($558 thousand) in the consolidated balance sheet as of March 31,
2015, and to increase income taxes-deferred in the consolidated statement ofincome for the year then ended by ¥204 million ($1,700 thousand).

13. LEASES(Lessee)
The Group leases certain furniture, ﬁxtures and other assets.
The minimum rental commitments under noncancelable operating leases
are as follows:
Millions ofThousands of
Yen
U.S. Dollars
Due within one year
Due after one year
Total

2015

2015

¥ 1,682$ 14,017

10,22585,208¥ 11,907$ 99,225

Millions of Yen

90

Thousands of
U.S. Dollars

2015

2014

2015

Gross lease receivables¥ 4,812¥ 4,434$ 40,100

Estimated residual values

1,020

848

8,500

Unearned interest income

(419)

(642)

(3,492)¥ 5,413¥ 4,640$ 45,108

Sysmex Annual Report 2015

2015

2015

Due within one year

¥2

$ 17

Due after one year

1

8

¥3

$ 25

Total

14. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group invests cash surpluses in low-risk ﬁnancial assets, mainly
short-term deposits and uses ﬁnancial instruments, mainly short-term bankloans, for funding. Derivatives are used, not for speculative purposes, but tomanage exposure to ﬁnancial risks as described in (2) below.
(2) Nature and Extent of Risks Arising from Financial Instruments
Receivables, such as trade notes, trade accounts and investments in lease, areexposed to customer credit risk. Although receivables in foreign currencies
are exposed to the market risk of ﬂuctuation in foreign currency exchange
rates, the position, net of payables in foreign currencies, is hedged by using
forward foreign currency contracts. Marketable and investment securities,
mainly listing shares, are exposed to the risk of market price ﬂuctuations.
Payment terms of payables, such as trade notes and trade accounts, aremostly less than six months.
Maturities of ﬁnance lease obligations, which are mainly used for thefunding of equipment investments, are less than eight years after the balance
sheet date.
Derivatives mainly include forward foreign currency contracts, which areused to manage exposure to market risks from changes in foreign currency
exchange rates of receivables.
Please see Note 15, “DERIVATIVES” for more details about instruments,
hedged items and policy for hedge accounting and assessment procedures ofhedge eﬀectiveness.
(3) Risk Management for Financial Instruments

Credit risk management(Lessor)The net investments in lease are summarized as follows:

Investments in lease

Future rental income under operating leases (including imputed interest income):
Millions ofThousands of
Yen
U.S. Dollars

Credit risk is the risk of economic loss arising from a counterparty’s failure
to repay or service debt according to the contractual terms. The Groupmanages its credit risk from receivables on the basis of internal guidelines,
which include monitoring of payment term and balances of major customers
by each business administration department to identify the default risk ofcustomers at an early stage. The credit risk regarding subsidiaries is also
managed in the same manner. With respect to ﬁnancial investments, theGroup manages its exposure to credit risk by prohibiting its funding to highcredit rated bonds in accordance with its internal guidelines. Credit risk fromderivatives is minimized because the Group deals only with large ﬁnancial
institutions.

Market risk management (foreign exchange risk)
Foreign currency trade receivables are exposed to market risk resulting
from ﬂuctuations in foreign currency exchange rates. Such foreign currency
exchange risk, which is recognized with respect to each currency and eachmonth, is hedged principally by forward foreign currency contracts. Forward
foreign currency contracts are used when foreign currency trade receivables
are certainly expected from forecasted transactions according to conditions
in foreign currency exchange ﬂuctuations.
Marketable and investment securities are managed by monitoring market
values and ﬁnancial position of issuers on a regular basis.
Derivative transactions have been approved by a predeﬁned decision
maker based on the internal guidelines, which prescribe the authority andthe limit, and managed by regularly conﬁrming the balance of each day by
the ﬁnance department.

Liquidity risk management
Liquidity risk comprises the risk that the Group cannot meet its contractual
obligations in full on their maturity dates. The Group manages its liquidity
risk by holding adequate volumes of liquid assets in view of businessincome, expenditure, and equipment investment spending plan alongwith adequate ﬁnancial planning by the corporate treasury department.
Subsidiaries also report their ﬁnancial plans to the Group. The ﬁnancedepartment manages the liquidity risk by obtaining information of cash
ﬂows of the whole Group.
(4) Fair Values of Financial Instruments
Fair values of ﬁnancial instruments are based on quoted prices in active markets. If a quoted price is not available, other rational valuation techniques
are used instead. The techniques include some changing factors and the fairvalues may be changed by adopting diﬀerent assumptions. In addition, thecontract amounts of derivatives in Note 15, “DERIVATIVES,” do not directly
indicate the market risk of derivatives.
(a) Fair value of ﬁnancial instruments
The carrying amounts, fair values and unrealized gain/loss as of March 31,
2015 and 2014, are as follows. Note that ﬁnancial instruments whose fairvalue cannot be reliably determined are not included (see (b)).
Millions of Yen
Unrealized
Carrying
March 31, 2015
Fair Value
Gain/Loss
AmountCash and cash equivalents¥ 50,220 ¥ 50,220
Receivables:
Trade notes
2,802
Trade accounts
50,069
Associated companies
171
Allowance for doubtful(576)
accounts (*1)
Receivables - net
52,46652,464¥ (2)Investments in lease
5,413
5,365
(48)
Investment securities Available-for-sale securities
3,595
3,595
Total
¥ 111,694 ¥ 111,644¥ (50)
Payables:Trade notes¥ 1,470 ¥ 1,470
Trade accounts
14,34014,340
Associated companies
166
166
Lease obligations
250
265
¥ 15
Income taxes payable
9,639
9,639
Total
¥ 25,865 ¥ 25,880¥ 15
Derivatives (*2)
¥ (51)¥ (51)March 31, 2014
Cash and cash equivalents
Receivables:
Trade notes
Trade accounts
Associated companies
Allowance for doubtful
accounts (*1)
Receivables - net
Investments in lease
Investment securities Available-for-sale securities
Total
Payables:Trade notes
Trade accounts
Associated companies
Lease obligations
Income taxes payable
Total
Derivatives (*2)

March 31, 2015
Cash and cash equivalents
Receivables:
Trade notes
Trade accounts
Associated companies
Allowance for doubtful
accounts (*1)
Receivables - net
Investments in lease
Investment securities Available-for-sale securities
Total
Payables:Trade notes
Trade accounts
Associated companies
Lease obligations
Income taxes payable
Total
Derivatives (*2)

Millions of Yen
Unrealized
Carrying
Fair Value
Gain/Loss
Amount¥ 36,548 ¥ 36,548
2,854
42,502161

Financial Section

A reconciliation between the normal eﬀective statutory tax rates and theactual eﬀective tax rates reﬂected in the accompanying consolidated statements
of income for the year ended March 31, 2015, is as follows:
Normal effective statutory tax rate
35.6%
Expenses not deductible for income tax purposes
0.9%
Per capita levy
0.1%
Foreign tax credit(0.3)%
R&D tax credit(1.7)%
Amortization of goodwill
1.1%
Effect of tax rate reduction
0.5%
Tax effect on undistributed earnings of foreign subsidiaries
6.8%
Different tax rates applied to foreign subsidiaries(3.1)%
Change in valuation allowance
0.9%
Other - net
1.0%
Actual effective tax rate
41.8%

(889)
44,6284,640

44,627
4,594

¥ (1)
(46)

3,341
¥ 89,157

3,341¥ 89,110¥ (47)¥ 1,388 ¥ 1,388
11,728
11,728
154
154
308
311
7,700
7,700
¥ 21,278 ¥ 21,281
¥ (6)
¥ (6)

¥3
¥3

Thousands of U.S. Dollars
Unrealized
Carrying
Fair Value
Gain/Loss
Amount$ 418,500 $ 418,500
23,350417,2421,425(4,800)437,21745,108437,200
44,708$ (17)(400)

29,95829,958$ 930,783 $ 930,366$ (417)$ 12,250 $ 12,250
119,500 119,500
1,383
1,383
2,083
2,208
80,32580,325$ 215,541 $ 215,666$ (425)$ (425)

$ 125
$ 125

Notes: *1. Allowance for doubtful accounts associated with trade accounts receivable
is deducted.
*2. Derivative assets and liabilities are on a net basis.

AssetsCash and Cash Equivalents
The carrying values are adopted for cash and cash equivalents as they
approximate fair value because of their short maturities.

Sysmex Annual Report 201591

Consolidated Financial Statements

Liabilities
Payables and Income Taxes Payable
The carrying values are adopted for payables and income taxes payable as
they approximate fair value because of their short maturities.
Lease Obligations
The fair values of lease obligations are measured at the present values of
total principal discounted by the interest rate which would be used if a newlease transaction occurred.

Derivatives
Fair value information for derivatives is included in Note 15, “DERIVATIVES.”(b) Carrying amount of ﬁnancial instruments whose fair value cannot be
reliably determined
Thousands ofMillions of Yen
U.S. Dollars
2015
Investments in equity
instruments that do nothave a quoted market pricein an active market¥ 3,5802014¥ 1,3322015$ 29,834

The above ﬁnancial instruments are not included in investment securities because they do not have market values and it is diﬃcult to estimate
the future cash ﬂows.
(5) Maturity Analysis for Financial Assets
Millions of Yen
Due after Due after
Due inOne Year Five Years Due after
March 31, 2015
One Yearthrough through Ten Yearsor Less
Five Years Ten Years
Cash and cash equivalents ¥ 50,220
Receivables:
Trade notes
2,802
Trade accounts
49,105¥ 964
Associated companies
171
Investments in lease
1,798
3,522
¥ 93
Total
¥ 93
¥ 104,096¥ 4,486

92

Sysmex Annual Report 2015

Millions of Yen
Due after Due after
Due inOne Year Five Years Due after
March 31, 2014
One Yearthrough through Ten Yearsor Less
Five Years Ten Years
Cash and cash equivalents ¥ 36,548
Receivables:
Trade notes
2,854
Trade accounts
42,018¥ 484
Associated companies
161
Investments in lease
1,202
3,291
¥ 147
Total
¥ 147
¥ 82,783¥ 3,775

Thousands of U.S. Dollars
Due after Due after
Due inOne Year Five Years Due after
March 31, 2015
One Yearthrough through Ten Yearsor Less
Five Years Ten Years
Cash and cash equivalents $ 418,500
Receivables:
Trade notes
23,350Trade accounts
409,209 $ 8,033
Associated companies
1,425
Investments in lease
14,98329,350
$ 775
Total
$ 775
$ 867,467 $ 37,383

March 31, 2014
Foreign currency forward
contractsSelling U.S. dollars

March 31, 2015
Foreign currency forward
contractsSelling U.S. dollars

Millions of Yen
Contract
Unrealized
Contract Amount
Fair Value
Gain/Loss
Amount Due after
One Year¥ 3,081

¥ (6)

¥ (6)

Thousands of U.S. Dollars
Contract
Unrealized
Contract Amount
Fair Value
Gain/Loss
Amount Due after
One Year$ 42,592$ (433)$ (433)

Derivative Transactions to Which Hedge Accounting is Applied

March 31, 2015

HedgedItem

Foreign currency forward
contractsSelling U.S. dollars
Receivables

Millions of Yen
Contract
Contract AmountAmount Due after
One Year

¥ 721

Fair
Value

¥1

15. DERIVATIVESThe Group enters into foreign currency forward contracts and foreign currency
option contracts to hedge foreign exchange risk associated with certain assets
and liabilities denominated in foreign currencies.
All derivative transactions are entered into to hedge interest and foreign
currency exposures incorporated within the Group’s business. Accordingly,
market risk in these derivatives is basically oﬀset by opposite movements in thevalue of hedged assets or liabilities. The Group does not hold or issue derivatives
for trading purposes.
Because the counterparties to these derivatives are limited to majorinternational ﬁnancial institutions, the Group does not anticipate any losses
arising from credit risk.
Derivative transactions entered into by the Group have been made inaccordance with internal policies which regulate the authorization and credit
limit amount.

Derivative Transactions to Which Hedge Accounting is Not Applied

March 31, 2015
Foreign currency forward
contractsSelling U.S. dollars

Millions of Yen
Contract
Unrealized
Contract Amount
Fair Value
Gain/Loss
Amount Due after
One Year¥ 5,111¥ (52)¥ (52)March 31, 2015

Thousands of U.S. Dollars
Contract
Fair
Hedged Contract Amount
Value
Item
Amount Due after
One Year

Foreign currency forward
contractsSelling U.S. dollars
Receivables$ 6,008$8

The fair value of derivative transactions is measured at the quoted priceobtained from the ﬁnancial institution.
The contract amounts of derivatives which are shown in the above table do
not represent the amounts exchanged by the parties and do not measure theGroup’s exposure to credit or market risk.

16. OTHER COMPREHENSIVE INCOME
The components of other comprehensive income for the years ended March 31,
2015 and 2014, were as follows:
Thousands ofMillions of Yen
U.S. Dollars
Unrealized gain on available-forsale securities:
Gains arising during the year
Reclassification adjustments toprofit or loss
Amount before income tax effect
Income tax effect
Total
Deferred gain on derivatives
under hedge accounting:
Gains arising during the year
Reclassification adjustments toprofit or loss
Amount before income tax effect
Income tax effectTotal
Foreign currency translation
adjustments:
Adjustments arising during
the year
Total
Defined retirement benefit plans:
Adjustments arising during
the year
Reclassification adjustments toprofit or loss
Amount before income tax effect
Income tax effectTotal
Total other comprehensive
income

2015

2014

2015

¥ 255

¥ 662

$ 2,125

(0)

(1)

(0)

255
(22)
¥ 233

661
(236)
¥ 425

2,125
(183)
$ 1,942¥ (67)$ (558)

68

566

1
(0)
¥1

8
(0)
$8

¥ 1,775¥ 8,612$ 14,793¥ 1,775¥ 8,612$ 14,793¥ 1,119$ 9,325(347)(2,892)

772
(208)
¥ 564

6,433
(1,733)$ 4,700¥ 2,573¥ 9,037

Financial Section

Receivables
The carrying values are adopted for short-term receivables as they approximate fair value.
The fair values of long-term receivables, such as installment receivables,
are measured at the present values discounted by risk-free rates and thefuture cash ﬂows including credit risks.
Investments in Lease
The fair values of investments in lease are measured at the present values
discounted by the interest rate after consideration of the remaining terms
and credit risks.
Investment Securities
The fair values of equity securities are determined by securities exchange
prices. Please see Note 5, “SHORT-TERM INVESTMENTS AND INVESTMENT
SECURITIES,” for securities categorized by purposes.

$ 21,443

17. CASH FLOW INFORMATIONThe Company acquired Partec and Inostics during the year ended March 31, 2014.
Assets and liabilities of Partec and Inostics at the acquisition dates, cash paid
for the capital and cash received in conjunction with the purchases of consolidated subsidiaries were as follows:
Millions of Yen
2014
Current assets
Fixed assets
Goodwill
Current liabilities
Long-term liabilities
Cash paid for the capital
Cash and cash equivalents
Cash paid in conjunction with the purchasesof consolidated subsidiaries - net¥ 1,876
4,387
9,043(1,097)(1,269)12,940(419)¥ 12,521

Sysmex Annual Report 201593

Consolidated Financial Statements

21. SEGMENT INFORMATION

Reconciliation of the diﬀerences between basic and diluted net income pershare (“EPS”) for the years ended March 31, 2015 and 2014, is as follows:
Millions Thousands
U.S.
Yenof Yenof Shares
Dollars
WeightedNet
Average
EPS*
IncomeShares*For the year ended March 31, 2015:
Basic EPS
Net income available to$ 1.07common shareholders ¥ 26,638 207,311 ¥ 128.49
Effect of dilutive securities
Stock options
765
Diluted EPS
Net income for¥ 26,638 208,076 ¥ 128.02$ 1.07computation

Under ASBJ Statement No. 17, “Accounting Standard for Segment Information
Disclosures” and ASBJ Guidance No. 20, “Guidance on Accounting Standard for
Segment Information Disclosures,” an entity is required to report ﬁnancial anddescriptive information about its reportable segments. Reportable segments areoperating segments or aggregations of operating segments that meet speciﬁed
criteria. Operating segments are components of an entity about which separateﬁnancial information is available and such information is evaluated regularly by
the chief operating decision maker in deciding how to allocate resources andin assessing performance. Generally, segment information is required to be reported on the same basis as is used internally for evaluating operating segment
performance and deciding how to allocate resources to operating segments.
1. Description of reportable segments
The Group’s reportable segments are those for which separate ﬁnancial information is available and regular evaluation by the Company’s management
is being performed in order to decide how resources are allocated among
the Group. The Group mainly produces and sells diagnostic instruments
and reagents. The Company plans comprehensive strategies within Japanand conducts business activities there, and the four regional headquarters
located in America, EMEA, China and Asia-Paciﬁc plan comprehensive
strategies for each region and conduct business activities in those regions.
Therefore, the Group consists of the geographical segments based on
production and sales structures, which are “Japan,” “Americas,” “EMEA,”“China” and “Asia-Paciﬁc.”

For the year ended March 31, 2014:
Basic EPS
Net income available to¥ 20,574
common shareholders
Effect of dilutive securities
Stock options
Diluted EPS
Net income for¥ 20,574
computation

206,828¥ 99.47645
207,473¥ 99.16* Shares and per share ﬁgures have been restated, as appropriate, to reﬂect a two-for-one
stock split eﬀected April 1, 2014.

19. RELATED PARTY DISCLOSURES
Transactions of the Company with related parties for the years ended March 31,
2015 and 2014, were as follows:
Thousands ofMillions of Yen
U.S. Dollars
Officers of the Company Exercise of stock options
Significant officers of theCompany’s subsidiaries Exercise of stock options

2015

2014

2015

¥ 23

¥ 135

$ 192

12

23

100

20. SUBSEQUENT EVENTSAppropriations of Retained Earnings
The following appropriation of retained earnings at March 31, 2015, wasapproved at the shareholders’ meeting of the Company held on June 19, 2015:
Millions of Thousands of
Yen
U.S. Dollars
Year-end cash dividends, ¥22.00 ($0.18)¥ 4,564$ 38,033
per share

2. Methods of measurement for the amounts of sales, proﬁt (loss), assets andother items for each reportable segment
The accounting policies of each reportable segment are consistent withthose disclosed in Note 2, “Summary of Signiﬁcant Accounting Policies,” andthe proﬁts of the reportable segments are their operating incomes.
Intersegment sales or transfers are determined based on market prices orcosts of goods manufactured.
As noted in Note 2.l.(c), the Company applied the revised accounting
standard and guidance for retirement beneﬁts eﬀective April 1, 2014, andchanged the methods of attributing the expected beneﬁt to periods, thediscount rate and expected future salary increases. The eﬀects of thisaccounting change on the segment proﬁt for the year ended March 31, 2015,
were minor.

3. Information about sales, proﬁt (loss), assets and other items is as follows:

Japan
Sales:
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Investment of associates accounted
for using the equity method
Increase in property, plant andequipment and intangible assets

Amortization of goodwill
Investment of associates accounted
for using the equity method
Increase in property, plant andequipment and intangible assets

Sales:
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Investment of associates accounted
for using the equity method
Increase in property, plant andequipment and intangible assets

Total

Reconciliations Consolidated¥ 43,400
79,537¥ 122,937¥ 31,163
130,888¥ 47,014300¥ 47,314¥ 2,40234,522¥ 63,257
1,173¥ 64,430¥ 5,199
69,094¥ 49,840
7¥ 49,847¥ 6,80235,611¥ 17,866
158¥ 18,024¥ 1,227
18,386¥ 221,377
81,175¥ 302,552¥ 46,793
288,501¥ (81,175)¥ (81,175)¥ (2,382)(40,517)¥ 221,377¥ 44,411
247,984

4,926

2,192

3,817

269

1,177

12,381(1,122)

11,259

574

1,696

1,696

1,932

1,932

280

842

1,932
8,901

Japan
Sales:
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation

Americas

Millions of Yen
2015
Reportable Segment
EMEA
China
Asia-Pacific

1,702

Americas

5,803

233

1,900

18,539Millions of Yen
2014
Reportable Segment
EMEA
China
Asia-PacificTotal¥ 221,377(1,176)

17,363

Reconciliations Consolidated¥ 041,759
62,058¥ 103,817¥ 20,138
100,887¥ 38,594
24¥ 38,618¥ 2,478
29,743¥ 53,196
786¥ 53,982¥ 8,604
65,359¥ 36,2585¥ 36,263¥ 4,195
23,468¥14,731165¥ 14,896¥ 1,386
16,198¥ 184,538
63,038¥ 247,576¥ 36,801
235,655¥ (63,038)¥ (63,038)¥ (3,930)(24,896)¥ 184,538¥ 32,871
210,759

4,672

1,841

3,291

267

986

11,057(1,096)

9,961

514

1,435

1,435

390

390

280

641

390
10,144

1,858

4,487

165

1,936

Japan

Americas

Thousands of U.S. Dollars
2015
Reportable Segment
EMEA
China
Asia-Pacific$ 361,667
662,808$ 1,024,475$ 259,692
1,090,733$ 391,783
2,500$ 394,283$ 20,017
287,683$ 527,142
9,775$ 536,917$ 43,325
575,784$ 415,333
59$ 415,392$ 56,683
296,758

41,05018,26731,808

2,241

2,333

7,017

74,175

14,18448,358

1,942

18,590Total$ 148,883 $ 1,844,808
1,317
676,459$ 150,200 $ 2,521,267$ 10,225 $ 389,942
153,217
2,404,175¥ 184,538(1,412)

17,178Reconciliations Consolidated$ 1,844,808$ (676,459)$ (676,459) $ 1,844,808$ (19,850) $ 370,092(337,642) 2,066,533

9,808

103,174

4,783

14,133

14,133

16,100

16,100

16,10015,833Financial Section

18. NET INCOME PER SHARE

154,492(9,350)(9,800)93,824

144,692

Note: Reconciliations principally consist of intersegment transfers and unallocated corporate assets at ¥4,729 million ($39,408 thousand) and ¥3,740 million for 2015 and 2014, respectively. The
unallocated corporate assets are primarily composed of funds such as marketable equity securities.

94

Sysmex Annual Report 2015

Sysmex Annual Report 201595

Consolidated Financial Statements

Independent Auditor’s Report

Financial Section

4. Information about products and services

Instruments
Sales to external customers¥ 71,461

Instruments
Sales to external customers¥ 57,089

Instruments

Millions of Yen
2015
Maintenance
Reagents
Services¥ 105,378¥ 21,804
Millions of Yen
2014
Maintenance
Reagents
Services¥ 88,163¥ 18,079$ 595,508

5. Information about geographical areas(1) Sales
Millions of Yen
2015
Japan
AmericaChina¥ 40,554¥ 45,855¥ 49,849(2) Property, plant and equipment
Millions of Yen
2015
Japan
Other
Total
¥ 37,550¥ 21,512¥ 59,062

Total¥ 221,377

Japan¥ 40,317

Millions of Yen
2014
AmericaChina¥ 33,211¥ 36,269

Japan$ 337,950

Thousands of U.S. Dollars
2015
America
China
Other
Total
$ 382,125 $ 415,408 $ 709,325 $ 1,844,808

Other¥ 74,741

Total¥ 184,538

Total¥ 22,734¥ 221,377

OthersTotal¥ 21,207¥ 184,538

Thousands of U.S. Dollars
2015
Maintenance
Reagents
Others
Total
Services$ 878,150$ 181,700$ 189,450 $ 1,844,808

Sales to external customers

Other¥ 85,119

OthersMillions of Yen
2014
Japan
Other
¥ 34,426¥ 19,348

Total¥ 53,774

Thousands of U.S. Dollars
2015
Japan
Other
Total
$ 312,916$ 179,267$ 492,183

Note: Sales are classiﬁed in countries or regions based on location of customers.

6. Information about major customers
There are no customers who occupy more than 10% of the consolidated sales.
7. Information on the balance of goodwill of reportable segments
Millions of Yen
2015
Japan
Goodwill at March 31, 2015

Americas

¥ 281

EMEA

China

Asia-Pacific¥ 10,029

Eliminations/
Corporate¥ 1,804

Total¥ 12,114

Millions of Yen
2014
Japan
Goodwill at March 31, 2014

Americas

¥ 561

EMEA

China

Asia-Pacific¥ 10,415

Eliminations/
Corporate¥ 2,139

Total¥ 13,115

Thousands of U.S. Dollars
2015
Japan
Goodwill at March 31, 2015

96

Sysmex Annual Report 2015

$ 2,342

Americas

EMEA$ 83,575

China

Asia-Pacific$ 15,033

Eliminations/
Corporate

Total$ 100,950

Sysmex Annual Report 201597

Sysmex Group Information
Global Network(As of May 31, 2015)

HYPHEN BioMed, SAS
Jinan Sysmex Medical Electronics Co., Ltd.

Corporate name

Sysmex France S.A.S.
Sysmex Wuxi Co., Ltd.

Sysmex Nederland B.V.

Sysmex Korea Co., Ltd.

Sysmex Belgium N.V.
Sysmex Inostics GmbH

Sysmex Europe GmbH
R&D Center Europe

Japan

Sysmex RUS LLC

HITADO GmbH
Sysmex Polska Sp.z o.o.
Sysmex Partec GmbH
Sysmex CZ s.r.o.

R&D Center Americas
Sysmex America, Inc.

Japan
Sysmex RA Co., Ltd.
Sysmex CNA Co., Ltd.
RIKEN GENESIS CO., LTD.
Sysmex bioMérieux Co., Ltd.

Sysmex Slovakia s.r.o. Sysmex Shanghai Ltd.
Sysmex Turkey Diagnostik
Sistemleri Ltd. Sti.
Sysmex India Pvt. Ltd.
Sysmex Hungaria Kft.
Sysmex Austria GmbH

Sysmex Canada, Inc.
Sysmex Inostics, Inc.

Sysmex Reagents America, Inc.

Sysmex Philippines Inc.
Sysmex Hong Kong Limited

Sysmex Diagnosticos Mexico, S.A. de C.V.

Sysmex Vietnam Company Limited

Americas

Sysmex Middle East FZ-LLC

Sysmex Colombia SAS

Partec Healthcare Ltd. Sysmex (Thailand) Co., Ltd.
Sysmex Partec Burkina Faso SARL
Sysmex Partec Italia S.r.l

Sysmex (Malaysia) Sdn Bhd

Sysmex do Brasil
Industria e Comercio Ltda.

Sysmex Australia Pty Ltd.

PT. Sysmex Indonesia

Sysmex New Zealand Limited

Sysmex Asia Paciﬁc Pte Ltd.

Sysmex Suisse AG
Sysmex Espana S.L.
Sysmex South Africa (Pty) Ltd.

Sysmex TMC Co., Ltd.
Sysmex International Reagents Co., Ltd.
(Ono Factory)
Sysmex Medica Co., Ltd.

Head Oﬃce

EMEA

Sysmex International Reagents Co., Ltd.
(Head Oﬃce/Seishin Factory)
i-Square
Kakogawa Factory
Technopark
Sysmex Engineering Co., Ltd.
Sysmex Business Support Co., Ltd.
Solution Center

Sales
Production
R&D
Regional headquarters

Research and Development Center
Kobe Sales Oﬃce
Medicaroid Corporation

Domestic Offices

1968

—%

Sysmex International Reagents Co., Ltd.

1969

100%

Kansai Area

Location

TEL

LocationTEL

1-5-1 Wakinohama-Kaigandori, Chuo-ku, Kobe, Hyogo 651-0073, Japan

TEL: (+81) 78-265-0500

Head Office/Seishin Factory 4-3-2 Takatsukadai, Nishi-ku, Kobe, Hyogo 651-2271, Japan

TEL: (+81) 78-991-2211

Ono Factory

TEL: (+81) 794-62-7001

17 Takumidai, Ono, Hyogo 675-1322, Japan

Sysmex RA Co., Ltd.

1978

100%

1850-3 Hirookanomura, Shiojiri, Nagano 399-0702, Japan

TEL: (+81) 263-54-2251

Sysmex Medica Co., Ltd.

1978

100%

323-3 Miyaoki, Yumesaki-cho, Himeji, Hyogo 671-2121, Japan

TEL: (+81) 79-335-2080

Sysmex TMC Co., Ltd.

1992

100%

1-3-2 Murotani, Nishi-ku, Kobe, Hyogo 651-2241, Japan

TEL: (+81) 78-992-5883

Sysmex CNA Co., Ltd.

1996

100%

2-3-7 Hakata Eki Mae, Hakata-ku, Fukuoka 812-0011, Japan

TEL: (+81) 92-476-1121

Sysmex Business Support Co., Ltd.

2013

100%

4-4-4 Takatsukadai, Nishi-ku, Kobe, Hyogo 651-2271, Japan

TEL: (+81) 78-992-5826

Sysmex Engineering Co.,Ltd.

2014

100%

4-4-4 Takatsukadai, Nishi-ku, Kobe, Hyogo 651-2271, Japan

TEL: (+81) 78-991-2702

Medicaroid Corporation

2013

50%

5-5-2 Minatojima Minamimachi, Chuo-ku, Kobe, Hyogo 650-0047, Japan

TEL: (+81) 78-303-8770

RIKEN GENESIS CO., LTD.

2007

36.5%

1-7-22 Suehiro-cho, Tsurumi-ku, Yokohama-shi, Kanagawa, 230-0045, Japan

TEL: (+81) 45-521-8781

Sysmex bioMérieux Co., Ltd.

2008

34%

1-2-2 Ohsaki, Shinagawa-ku, Tokyo 141-0032, Japan

TEL: (+81) 3-6834-2666

Sysmex America, Inc.

2003

100%

577 Aptakisic Road, Lincolnshire, IL 60069, U.S.A.

TEL: (+1) 224-543-9500

Sysmex Reagents America, Inc.

1993

100%

Two Sysmex Way, Mundelein, IL 60060, U.S.A.

TEL: (+1) 847-367-2800

Sysmex Inostics, Inc.

2013

100%

855 N. Wolfe St., Suite 631, Baltimore, Maryland 21205, U.S.A.

TEL: (+1) 443-759-8650

Sysmex Canada, Inc.

2007

100%

5700 Explorer Drive, Suite #200, Mississauga, Ontario, L4W 0C6, Canada

TEL: (+1) 905-366-7900

Sysmex Diagnosticos Mexico, S.A. de C.V.

2014

100%

Paseo de la Reforma #250 esq. Niza, 8th Floor, Colonia Juarez, C.P. 06600, Mexico City, Mexico

TEL: (+52) 115255 36007106

Sysmex Colombia SAS

2014

100%

Calle 90 #12-28 Offices #11 and 16 Bogota, D.C.Cundinamarca, Colombia

TEL: (+57) 1 6581683

Sysmex do Brasil Industria e Comercio Ltda.

1998

100%

Rua Joaquim Nabuco, 615-Bairro Cidade Jardim-Sao Jose dos Pinhais-Parana- Brasil-CEP 83040-210

TEL: (+55) 41-2104-1314

Sysmex Europe GmbH

1980

100%

Bornbarch 1, 22848 Norderstedt, Germany

TEL: (+49) 40-527260

Sysmex Deutschland GmbH

1995

100%

Bornbarch 1, 22848 Norderstedt, Germany

TEL: (+49) 40-5341020

HITADO GmbH

2010

100%

Dreihausen 2, D-59519 Moehnesee, Germany

TEL: (+49) 2924-9705-0

Sysmex Partec GmbH

2013

100%

Am Flugplatz 13, 02828 Goerlitz, Germany

TEL: (+49) 3581-8746-0

Sysmex Inostics GmbH

2013

100%

Falkenried 88, D-20251 Hamburg, Germany

TEL: (+49)40-413383-90

Sysmex UK Limited

1991

100%

Sysmex House, Garamonde Drive, Wymbush, Milton Keynes, MK8 8 DF, U.K.

TEL: (+44) 870-902-9210

Sysmex France S.A.S.

2000

100%

22, avenue des Nations Paris Nord II-B.P. 51414 Villepinte, 95944 Roissy CDG Cedex, France

TEL: (+33) 1-48-170190

HYPHEN BioMed, SAS

2010

100%

155 Rue d’Eragny-95000 Neuville sur Oise, France

TEL: (+33) 134-406-510

Sysmex Espana S.L.

2010

100%

Frederic Mompou, 4-B Planta 2 08960 - Sant Just Desvern, Espana

TEL: (+34) 934-236-231

Sysmex Belgium N.V.

2009

100%

Park Rozendal, Building A Terhulpsesteenweg 6a 1560 Hoeilaart, Belgium

TEL: (+32) 2-769-7474

Sysmex Nederland B.V.

2009

100%

Ecustraat 11, 4879 NP Etten Leur, The Netherlands

TEL: (+31) 76-508-6000

Sysmex Polska Sp.z o.o.

2005

100%

Kopernik Office Building, Al. Jerozolimskie 176, 02-486 Warszawa, Poland

TEL: (+48) 22-57284-00

Sysmex Suisse AG

2006

100%

Tödistrasse 50, 8810 Horgen, Switzerland

TEL: (+41) 44-718-38-38

Sysmex Austria GmbH

2007

100%

Odoakergasse 34-36 A-1160 Wien, Austria

TEL: (+43) 1-4861631

Sysmex Hungaria Kft.

2007

100%

Forum Offices Obuda Irodahaz, III kerulet, Becsi ut 271, 1037 Budapest, Hungary

TEL: (+36) 1-210-96-70

Sysmex CZ s.r.o.

2007

100%

Elgartova 683/4 61400 Brno Czech Republic

TEL: (+420) 548-216-855

Sysmex Slovakia s.r.o.

2007

100%

Trencianska 47 821 09 Bratislava, Slovakia Republic

TEL: (+421) 2-6453-2881-2

Sysmex RUS LLC

2011

100%

1 Magistralny tupik, 11, bld. 10, office 1020 Russia, Moscow 123290

TEL: (+7) 495-7816772

1-5-1 Wakinohama-Kaigandori, Chuo-ku, Kobe, Hyogo 651-0073, Japan

TEL: (+81) 78-265-0500

Sysmex Turkey Diagnostik Sistemleri Ltd. Sti.

2014

100%

R.Bahce Mh. Sht. Yzb. S.Eroglu Cd. Sur Yapi Akel Is M. A Bl. K: 5 N. 6, Kavacik Beykoz Istanbul Turkey

TEL: (+90) 216-681-66-00

Technopark

4-4-4 Takatsukadai, Nishi-ku, Kobe, Hyogo 651-2271

TEL: (+81) 78-991-1911

Sysmex Middle East FZ-LLC

2008

100%

Dubai Healthcare City, City Pharmacy Building C/P72, Office 304, P.O.Box 505119 Dubai, U.A.E.

TEL: (+971) 4-4370515

Solution Center

1-3-2 Murotani, Nishi-ku, Kobe, Hyogo 651-2241

TEL: (+81) 78-992-5860

Sysmex South Africa (Pty) Ltd.

2006

100%

Fernridge Office Park, Block 2; 5 Hunter Avenue; Ferndale; Randburg 2194 RSA

TEL: (+27) 11-3299480

Research and Development Center

1-1-2 Murotani, Nishi-ku, Kobe, Hyogo 651-2241

TEL: (+81) 78-991-2212

Sysmex Shanghai Ltd.

2000

100%

9th Floor, Azia Center, 1233 Lujiazui Ring Road, Shanghai, 200120, China

TEL: (+86) 21-6888-2626

Jinan Sysmex Medical Electronics Co., Ltd.

1995

100%

7493 Airport Road, Yaoqiang Town, Licheng District, Jinan City, Shandong Province, China; PC. 250107 TEL: (+86) 531-8873-4440

Sysmex Hong Kong Limited

1999

100%

Room 907, 9/ F., Tower 1, Silvercord, 30 Canton Road, Tsimshatsui, Kowloon, Hong Kong

TEL: (+852) 2543-5123

Sysmex Wuxi Co., Ltd.

2003

100%

#8-9, No. 93, Science Technology Stand-up Park, New District, Wuxi, Jiangsu, 214028, China

TEL: (+86) 510-8534-5837

Sysmex Asia Pacific Pte Ltd.

1998

100%

9 Tampines Grande #06-16 to #06-22 528735, Singapore

TEL: (+65) 6221-3629

Sysmex (Malaysia) Sdn Bhd

1998

100%

11A&15, Jln PJS 7/21, Bdr Sunway, 47500 Subang Jaya, Selangor, Malaysia

TEL: (+60)3-5637-1788

Sysmex (Thailand) Co., Ltd.

1999

100%

12 Floor, Tonson Tower, 900 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330, Thailand

TEL: (+66) 2539-1127

Sysmex Vietnam Company Limited

2010

100%

8th floor, 106 Nguyen Van Troi, Phu Nhuan District, Ho Chi Minh City, Vietnam

TEL: (+84) 8-3997-9400

PT. Sysmex Indonesia

2002

100%

Cyber 2 Tower, 5th Floor, Unit E Jl. HR. Rasuna Said Blok X5 No. 13 Jakarta Selatan 12950, Indonesia TEL: (+62) 21-3002-6688

Sysmex Transasia Services Pvt. Ltd.

2009

51%

Office No.1002, 10th Floor, Damji Shamji Business Galleria, LBS Marg, Next to Toyo House, Kanjur Marg(W), Mumbai-400 078, India

TEL: (+91) 22-2822-4040

Sysmex India Pvt. Ltd.

1998

100%

Office No.1002, 10th Floor, Damji Shamji Business Galleria, LBS Marg, Next to Toyo House, Kanjur Marg(W), Mumbai-400 078, India

TEL: (+91) 22-6112-6666

Sysmex Philippines Inc.

2010

100%

30th Floor, MDC 100 Bldg, E. Rodriguez Jr. Ave. cor. Eastwood Ave. Bagumbayan, Quezon City, Philippines TEL: (+63) 2-621-2460

Sysmex Taiwan Co., Ltd.

2000

100%

Song Jiang Road 318 13F-3, Zhong Shan District, Taipei, Taiwan

TEL: (+886) 2-2542-2339

Sysmex Korea Co., Ltd.

2013

100%

8F, Nobel Bldg, 16, Teheran-ro 78-gil, Gangnam-gu, Seoul, 135-840, Korea

TEL: (+82) 2-3498-5300

Sysmex Australia Pty Ltd.

2014

100%

Level 9, Avaya House 123 Epping Road North Ryde 2113 NSW, Australia

TEL: (+61)2-8875-7756

Sysmex New Zealand Limited

2001

100%

382-386 Manukau Road, Epsom, Auckland 1344, New Zealand

TEL: (+64) 9-630-3554

i-Square262-11 Mizuashi, Noguchi-cho, Kakogawa, Hyogo 675-0019

TEL: (+81) 79-456-8010

Kakogawa Factory

314-2 Kitano, Noguchi-cho, Kakogawa, Hyogo 675-0011

TEL: (+81) 79-424-1171

1548 Ooaza Shimookudomi, Sayama, Saitama 350-1332

Tokyo Office

TEL: (+81) 4-2954-2171

1-2-2 Ohsaki, Shinagawa-ku, Tokyo 141-0032
Kita Kanto BranchTokyo Branch
Sapporo Sales OfficeMorioka Sales Office
Kanazawa Sales Office
Kyoto Sales Office
Metropolitan Area Service Center

Nagoya Branch
Nagano Sales Office
Kobe Sales Office

TEL: (+81) 3-5434-8910
Osaka Branch
Niigata Sales OfficeTakamatsu Sales Office

Hiroshima Branch
Chiba Sales Office
Okayama Sales Office
Asia PacificSendai Branch
Fukuoka Branch
Shizuoka Sales Office
Kagoshima Sales Office
Associated Foundation

Nakatani Foundation for Advancement of
Measuring Technologies in Biomedical
1-2-2 Ohsaki, Shinagawa-ku, Tokyo 141-0032, Japan
Engineering

Sysmex Annual Report 2015

China

Head OfficeProtein Development Center

98

Sysmex Corporation

Sysmex Taiwan Co., Ltd.

Sysmex Deutschland GmbH

Sysmex Transasia Services Pvt. Ltd.

EquityEstablished ownershipby Group

TEL: (+81) 3-5719-2125

Sysmex Annual Report 2015

Sysmex Group Information

Sysmex UK Limited

99

Stock Information

Corporate Overview(As of March 31, 2015)(As of March 31, 2015)

Principal Shareholders

Common stock price range (¥)

4,000
2,000
0

Tokyo Price Index close

4/2014 56

7

8

Sysmex Corporation
Number of Percentage ofshares held(Thousands) shareholding

Shareholders

6,000

9

10

11

12 1/2015 2

3

45(Month)(Thousands)
20,000Monthly trading volume (shares)
15,000Established
Number of Employees

February 20, 1968
5,903

Japan Trustee Services Bank, Ltd.

21,644

10.41(consolidated basis)

The Kobe Yamabuki Foundation

12,000

5.77

6,739

Nakatani Foundation for Advancement of
Measuring Technologies in Biomedical Engineering

11,830

5.69

Nakatani Kosan, Ltd.

10,297

4.95

JPMorgan Chase Bank 380055 (Standing proxy:
Mizuho Corporate Bank. Custody & Proxy Dept.)

10,287

4.95

Number of Shares Authorized 598,688,000 shares

The Master Trust Bank of Japan, Ltd.

8,611

4.14

Number of Shares Issued

207,894,432 shares

Kazuko Ietsugu

6,124

2.95

Paid-in Capital¥10,483 million

Taeko Wada

6,124

2.95

Stock Listings

Kenji Itani

5,000

2.41

Ryoshin Co.

4,800

2.31

(including part-time employees and others)

Fiscal Year

April 1—March 31

Shareholders’ Meeting

In JuneTokyo Stock Exchange, First Section
November 1995: Listed on Osaka Securities
Exchange, Second Section
July 1996:

10,000Listed on Tokyo Stock
Exchange, Second Section

5,000
0

Sysmex Group Information

Stock Price Range and Trading Volume
(Yen)
8,000

March 2000:

Cash Dividends per Share and Dividend Ratio (Consolidated)
4/2014 5

6

7

8

9

10

11

12 1/2015 2

3

45(Month)50
40Composition of Shareholders

Financial institutions
19.90%

Individuals and others
19.61%

Financial instrument ﬁrms
0.93%
Other Japanese companies
20.03%
Foreign investors
39.53%

Distribution of Shares by Number of Shares Held
Less than 1,000 shares 1.05%

More than 1,000 shares 1.59%

Number of shares: 2,174,389(8,454 shareholders)Number of shares: 3,308,374(1,699 shareholders)More than 500,000 shares 79.46%

More than 5,000 shares 1.08%

Number of shares: 165,190,401(81 shareholders)Number of shares: 2,244,068(318 shareholders)

100Exchange, First Section
80

38

60

27
20

17

15
27.0

29.1

40
29.1

29.6
20

27.1

0
2011

2012

2013

and Osaka Securities

100

Cash dividends per share (Figures adjusted for stock split)
Dividend payout ratio

30
20

Exchange, First Section

(%)

(Yen)

Listed on Tokyo Stock

2014

2015
(Years ended March 31)

Note: Two-for-one stock split conducted on April 2014 and 2011.
Dividend Policy
Sysmex aims to maintain a proper balance between aggressive investment, which isdesigned to sustain steady high growth, and returns to our shareholders as our earning
power increases. In terms of returns to shareholders, we intend to provide a stabledividend on a continuous basis and aim for a consolidated payout ratio of 30% under ourbasic policy of sharing the successes of our operations in line with business performance.

Ticker Code

6869

Transfer Agent

Mitsubishi UFJ Trust and Banking
Corporation

Independent Auditor

Deloitte Touche Tohmatsu LLC

RatingA+ (Rating and Investment
Information, Inc. (R&I))

Indexes

MSCI Standard Index
Russell/Nomura Japan Equity Indexes
FTSE4Good Index
DSI (Daiwa Stock Indices)
S&P Japan 500
Dow Jones Sustainability Asia Pacific Index
JPX-Nikkei Index 400
Ethibel Pioneer & Excellence

More than 10,000 shares 5.68%
Number of shares: 11,808,444(410 shareholders)More than 100,000 shares 11.14%
Number of shares: 23,168,756(108 shareholders)100

Sysmex Annual Report 2015

Sysmex Annual Report 2015

101