Sysmex Report 2022
Fiscal 2021 (April 1, 2021 to March 31, 2022)

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Sysmex Report 2022

Sysmex enhances diagnostic value
with innovative testing,to bring greater trust andconfidence to healthcare.
Sysmex operates in the field of healthcare testing,which involves examining blood, urine, and other samples.
We provide customers with a variety of products and services
in more than 190 countries and regions.
We will undertake new challenges in the field of diagnostics
as the future of healthcare unfolds.

Sysmex Report 2022

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Contents
Structure of Sysmex Report 2022
What Sysmex aims for 1
Management resources and business activities 3

Value provided

Main business activities
Procurement

R&D

Management
resources
for creating
value

Outputs
Regulatory registration
Production

Strategies for value creation 2

Distribution
Sales

Service and support

HR strategy
Intellectual property strategy

Environmental initiatives

Corporate governance 4

Editorial Policy
The Sysmex Report, an integrated report that summarizes financial and non-financial information, is intended to help stakeholders understandSysmex’s medium- to long-term value creation. For more detailed information, please visit our website or see our Sustainability Data Book.
In editing this publication, we referred to the IIRC’s International Integrated Reporting Framework, as well as the Guidance forCollaborative Value Creation by the Ministry of Economy, Trade and Industry.
In fiscal 2021, Sysmex changed its accounting policy for configuration or customization costs in cloud computing contracts to recognize
costs as expenses when services are received. Accordingly, we have by retroactively adjusted the figures for the fiscal 2020.
Independent Practitioner’s Assurance
In addition to environmental and social data, we have obtained independent practitioner’s assurance of compliance with the AA1000
AccountAbility Principles.
>>Sustainability Data Book > Independent Practitioner’s Assurance P70
System of Disclosure
Financial information
Non-financial information
Sysmex Report (an integrated report, published annually)
Investor Relations Site
Sustainability Site
https://www.sysmex.co.jp/en/ir/index.html
https://www.sysmex.co.jp/en/csr/index.html
This site discloses details of financial, stock and shareholder• Sustainability Data Book (PDF, published annually)
information.
https://www.sysmex.co.jp/en/csr/report/index.html• Financial statements
Corporate Governance Report• Financial data, etc.
https://www.sysmex.co.jp/en/corporate/governance.html

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Organizations Covered
In principle, this report covers the Sysmex Group (including Group
companies in Japan and overseas). In this report, “Sysmex” refers to
the Sysmex Group as a whole. “Sysmex Corporation” refers to theCompany on a stand-alone basis.

Accounting Standards
In fiscal 2016, we voluntarily adopted the International Financial
Reporting Standards (IFRS). In this report, figures presented up to
fiscal 2014 are in accordance with Japanese GAAP. Figures fromfiscal 2015, are presented in accordance with IFRS.

Period Covered
The target period is fiscal 2021 (April 1, 2021 to March 31, 2022), but
the report also covers some activities conducted after April 2022.

Forward-Looking Statements
Statements in this report pertaining to Sysmex’s future plans, strategies,
business performance and other items are based on currently available
information and involve certain risks and uncertainties. Actual results
may differ materially from those anticipated in these statements.

Sysmex Report 2022

Sustainability
Data Book

01 Message
01
05
06
07
09
11
13

 Corporate Message
 Corporate Philosophy for the Sysmex Group An Ideal Unchanged Since Our Founding Sysmex’s History
 A Snapshot of Sysmex
 Sysmex’s Business Model Message from the CEO

21
23
25
27

 Materiality
 Sysmex’s Value Creation: Aiming for Sustainable Growth Providing Value to Patients, Healthy People, Healthcare and Society Worksite Commentary

19 What Sysmex Aims for 1

29 Strategies for Value Creation 2
31
33

 Long-Term Management Goals
 Long-Term Management Goals:

3537 Mid-Term Management Plan Mid-Term Management Plan:

39

Background to Formulation of Key Actions
 Mid-Term Management Plan:
Progress on Key Actions

Achievement Milestones

43
46
47
51

 Performance Highlights
 Topics in Fiscal 2021
 Status of Sustainability Targets
 Financial and Capital Strategies(Message from the Executive in
Charge of Finance)

55 Management Resources and Business Activities 3
57

 Management Resources and Business Activities
59 R&D Capabilities
61 Production and Distribution System
62 Sales and Service Structure
63 Environmental Considerations
65 Diverse Human Resources
67 Intellectual Property

69
71
75
77
81

 Message from Outside Member of the Managing Board
 Corporate Governance Risk Management
 Members of the Managing Board Executive Officers

68 Corporate Governance 4

83 Activity Report, Corporate Overview
83  Management’s Discussion and Analysis
89  Consolidated Financial Data (10 Years)
91  Consolidated of Financial Statements
95  Sysmex’s Businesses
98  Primary Products and Services
101  Stakeholder Engagement
103  Terminology

105  Stock Information
106  Corporate Information

Sysmex Report 2022

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Corporate Philosophy for the Sysmex GroupIn 2007, we formulated the “Sysmex Way,” the corporate philosophy for the Sysmex Group, carrying forward and expanding theperspective of our founding philosophy. Our current corporate philosophy consists of three parts: Mission, which defines oursocial raison d’être and states how we hope to contribute to society: Value, which describes the values and management style that
we must abide by, and Mind, which expresses the mindset and code of conduct that every employee within the Sysmex Group
must observe. Our Core Behaviors encompass the customers, business partners and employees expressed in our original company
philosophy, the “Three Aspects of Confidence.” In addition, they declare our objective of instilling confidence in other stakeholders:
our shareholders and society.

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.

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Sysmex Report 2022

An Ideal Unchanged Since Our Founding
Our founder, Taro Nakatani, defined our corporate objective thus: “By providing the products we create, we will help resolve theissues society faces and make our own lives more fulfilling.” This objective forms the basis for our founding philosophy, the “Three
Aspects of Confidence.” These thoughts are carried forward in the “Sysmex Way,” the Sysmex Group’s current corporate philosophy.
Message
What Sysmex Aims for
Strategies for Value Creation

Founding philosophy, the “Three Aspects of Confidence:”• Total customer confidence in all of our products.
• Total confidence in our associates in all our business
transactions.
• Total confidence of our employees in themselves and alltheir work.

Management Resources andBusiness Activities

Founder: Taro Nakatani

Our founding philosophy, the “Three Aspects of Confidence:” instills confidence among customers, business partners and employees and defines the basis of our management.
Mr. Nakatani noted that “There is no such thing as eternity in this world, and every flow must have its ebb.
Companies are no exception to this rule.” He went on to share his thoughts on corporate management
and confidence: “We will always strive to instill confidence. It is important to keep in mind that without
this effort, the company cannot survive and proceed with its work.”

Corporate Governance
Activity Report andCorporate Overview

To ensure corporate sustainability in a constantly changing society, Mr. Nakatani believed it is essentialthat we ourselves continue to take on challenges. In that spirit, Mr. Nakatani visited the United States in1960 in search of new business ideas. His attention was drawn to the field of medical electronic devices.
When he returned to Japan, Mr. Nakatani began working with young researchers, conducting studies andengaging in development. In 1963, they succeeded in the commercialization of Japan’s first blood cellcounter, the CC-1001 automated hematology analyzer.
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Sysmex’s History
Since the time of its founding, Sysmex has grown by expanding its business portfolio in the domain of in vitro diagnostics anddeveloping its business globally.
Going forward, we will work to accelerate sustainable growth by quickly ascertaining changes in the business environment anddeveloping our business.

Launched the world’s firsthematology transport system (1990)

Opened a representative oﬃce
in the United States (1977)
Launched first made-in-Japan automatedhematology analyzer (1963)
Opened a representativeoﬃce in Germany (1972)
Establishment (1968)

(FY)

1963

1968

Social and Healthcare
Environment
Sysmex’s
Value Creation

Entered theurinalysis
field (1974)

1970

Entered theimmunochemistry
field (1987)

Launched the Sysmex
brand (1978)

1975

1980

1985

Changes in Sales by Business and Destination

Commenced direct
sales and service inthe United Kingdom(1991)

1990

More efficient and expanded testing

FY1980

FY1990Net salesby businessNet salesby business
Hematology 100%
(Including some sales
from other fields)

Net salesby destination

Sysmex Report 2022

Hematology 90.8%
Non-hematology 9.2%
(Urinalysis, hemostasis,
immunochemistry,others)

Net salesby destination
Japan
Overseas

7

1995

Sharply rising healthcare costs,
diversifying healthcare needs

Growing demand for healthcare

Promoting the adoption of testing

Formed alliance in thehemostasis field withthe current Siemens
Healthineers (1995)
Established a joint
venture company inChina (1995)

Entered the hemostasis
field (1984)

82.9%
17.1%

Japan
Overseas

60.2%
39.8%

Fiscal 2023 target in the mid-term
management plan:¥420.0 billion
Fiscal 2021 net sales¥363.7 billion
Message

Launched a roboticassisted surgery system(2020)

Established a local subsidiary in Singapore (1998)
Entered an alliance with F. Hoﬀman-La Roche related to hematology products (1998)
Changed company name to Sysmex Corporation (1998)
Began oﬀering
the SNCS network service (1999)

What Sysmex Aims for

Listed on the first sections of the Osaka and Tokyo stock exchanges (2000)
Entered the life science field (2000)
Formulated the “Sysmex Way,” the corporate
philosophy of the Sysmex Group (2007)

Strategies for Value Creation

Overseas
sales ratio:

Commenced direct sales
and service in the
United States (2003)

84.7%

Overseas sales
Domestic sales

2005

2010

Globalization and use of IT in healthcare

Digitalization of testing andthe elimination of regional disparities

2021

2015

Increasingly sophisticated healthcare,with more diverse needs
Increasingly sophisticated testing,sustainability

FY2021

Hematology
59.5%
Urinalysis/fecal occult blood 5.0%
Hemostasis
14.5%
Immunochemistry
7.8%
Clinical chemistry
3.4%
Others9.8%

Japan
Americas
EMEA
China
Asia Pacific

51.8%
12.0%
25.4%
6.4%
4.4%

Net salesby businessNet salesby destination

Hematology
Urinalysis
Hemostasis
Immunochemistry
Clinical chemistry
FCM
Life science
OthersMedical robotics

57.8%
8.2%
17.1%
5.6%
0.8%
0.6%
4.9%
4.6%
0.4%

Japan
Americas
EMEA
China
Asia Pacific

15.3%
23.0%
27.9%
25.7%
8.1%

Sysmex Report 2022

Activity Report andCorporate Overview

Net salesby destination

Corporate Governance

FY2001

Net salesby business

2023

Management Resources andBusiness Activities

2000

8

A Snapshot of Sysmex
Materiality

Resolution of medical
issues through products
and services
Responsible provision of
products and services

R&D

Production/Distribution

Three-year total R&D investment

Instrument production bases¥71.0 billion

7 locations globally(Fiscal 2019–2021)

Reagent production bases

Number of patents

14 locations globally

3,680(Total number of patents,
utility model rights and design rights)

Average number of development
projects per year

Around 70

Realization of an attractive
workplace

Environmental
consideration

Production volume (reagents)

Approximately 16.7
million units
Number of unique items produced (reagents)(Average over the past five years)

1,174 items

Approximately 900

Approximately 1,000• Diverse specializations andtechnical skills• Greater productivity through theintroduction of ICT• Two acquisitions in the past five years(As of May 2022)• Establishment of an attractive working
environment and a focus on training

Results of decreased electricity
consumption by new products

Percentage reduction in CO2 emissions
in shipping and logistics

Cut 1%

Down by approximately

40%(Base year: Fiscal 2016)(Compared with Sysmex’s older products)• For new products in the hematology
field (Specimen Transport ProductGroup), we realized an environmentallyfriendly design that consumes lesselectricity than conventional models.

• Air transport increased, owing to delayed
production of instruments stemmingfrom semiconductor shortages.

Management

Strengthening ofgovernance
Sustainable growth9

Sysmex Report 2022

Percentage of outside members of
the Managing Board

41.7%

Percentage of executive compensationthat is performance-linked
or non-monetary(excluding members of the Audit andSupervisory Committee andoutside members of the Managing Board)73%

Note: Figures are as of March 31, 2022, unless otherwise indicated.

Service and Support

Companywide

Countries and regions
where business is conducted

Customer Assessment in
the United States

Position in the in vitro
diagnostics market

More than 190

No. 1 for 15 consecutive years

9th globally*

62
Alliance partners

Customer needs addressed

Approximately 14,000(non-consolidated basis)

Queries to the customer service center

EIKEN CHEMICAL, Cellavision,

80,365others(non-consolidated basis)

9. Sysmex (Japan)*Sysmex’s estimates based on information disclosed
for 2021

Strategies for Value Creation

Roche, Siemens Healthineers,

1. Roche (Switzerland)
2. Abbott (United States)
3. Danaher (United States)
4. Siemens Healthineers (Germany)
5. Thermo Fisher (United States)
6. Becton Dickinson (United States)
7. Holgic (United States)
8. bioMērieux (France)

What Sysmex Aims for

Sales and service bases

Source: IMV ServiceTrak 2020 Hematology

Message

Sales

Engagement score

65%(Excluding EMEA)

Approximately 1,700

Female managers ratio• Addressing the individual needs of eachregion and facility

Training time per employee• Increasing the number of people in chargeof Caresphere™ and digital medicine

31.4 hours

Amount spent on product disposal
as a percentage of net sales

Percentage reduction in CO2emissions when using instruments

Percentage reduction in CO2emissions from business activities

0.6%

22% reduction

44% reduction• Ongoing efforts to reduce waste throughappropriate inventory management andother means• Increased sales of power-saving products
and global trend toward improvement in
CO2 emission factors• Decrease due to installation of equipment
to reduce CO2 emissions from businessoffices, improved production efficiency
at factories, etc.

• Promotion of more local management• Hiring and development of regulatory
affairs and clinical development personnel

17.3%

Corporate Governance(Base year: Fiscal 2016)

Management Resources andBusiness Activities

Approximately 2,000(Base year: Fiscal 2016)

Activity Report andCorporate Overview

Financial results
Net sales

Free cash flow

ROE

¥363.7 billion¥23.6 billion

13.5%

Operating profit

Percentage of recurring sales

Market capitalization

76.1%¥1.9 trillion¥67.4 billion(Sales of reagents, services and support, others)

Sysmex Report 2022

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Sysmex’s Business Model
Business Expansion That Leverages Sysmex’s Strengths

Existing customers

Hematology-focused• Customer base• Technologies

Expanded fields of testing
Expanded solutions• Urinalysis and hemostasis• Development of theimmunochemistry field• New fields(Life science, FCM)

• Development of the service andsupport business• Network services (IT)• Scientific support• Utilization of distributors• Switch to direct sales and service• Government collaboration• Creation of a global regulatory
structure• Cultivation of the primary care
hospital market• Initiatives in preventive andpre-symptomatic domains• Quality• Market presence
New customers
Expansion of sales areas
Expansion into regional healthcare

Status by Field
Hematology

Urinalysis

Hemostasis

Immunochemistry

Sysmex has No. 1 share of sales

Sysmex has No. 1 share of sales

Sysmex has No. 1 share of sales

Market growth rate
(2021-2023)

Market growth rate
(2021-2023)

Market growth rate
(2021-2023)

Market growth rate
(2021-2023)

4%

4%

4%

4%

Market scale

Market scale

Market scale

Market scale$4,000 million$1,200 million$3,000 million$23,000 million

Sysmex’s sales

Sysmex’s sales

Sysmex’s sales

Sysmex’s sales¥210.3 billion¥29.9 billion¥62.0 billion¥20.4 billion(FY2021)(FY2021)(FY2021)(FY2021)(Sedimentation, chemistry)
Notes: Sysmex has compiled data on market scale and growth rates based on publicly disclosed information as of 2021.
Exchange rates are used for the year in which research was conducted, so simple comparisons with market scales presented in previous years are not possible.
Our share of sales in the hemostasis field includes sales through an alliance with Siemens Healthineers.

Main Alliance Partners
Hematology

Roche, Cellavision

Urinalysis

EIKEN CHEMICAL, Siemens Healthineers

Hemostasis

Siemens Healthineers

Major Competitors

11

Hematology

Danaher, Siemens Healthineers, Abbott, Mindray

Hemostasis

Welfen (former Instrumentation Laboratory), Stago

Urinalysis

Danaher

Immunochemistry

Roche, Abbott, Siemens Healthineers

Clinical FCM

Becton Dickinson, Danaher

Sysmex Report 2022

Message

Our earnings structure is characterized by stable andongoing revenue sources and high profitability. In our mainstay fields of hematology and hemostasis, even after customers purchase instruments, we generate ongoing revenue by
selling specialized reagents and providing service and support.
Notably, Sysmex is increasing its proportion of sales fromreagents and service and support by expanding its share ofbusiness with large-scale facilities (where reagent use is high)and by growing its portfolio of clinically significant reagents.
By increasing our proportion of sales from reagents, which are
more profitable than instrument sales, we expect to generate
stable earnings and maintain or increase profitability. Sysmex’s
products and service and support earn high customer satisfaction, so in addition to new customers, we enjoy a high customer retention rate.

What Sysmex Aims forIn the IVD market, demand tends to be relatively unaffectedby global conditions and economic trends, and the market
continues to grow along with advances in medicine. Sysmex
maintains a strong position in this market, particularly in thefield of hematology, where we have a market share of morethan 50% (No. 1). In the urinalysis and hemostasis fields, weare expanding our sales regions and product portfolios by collaborating with alliance partners. As a result, we have a No. 1
share of the global market in these fields, as well.
Sysmex has continued to grow and established its market
position since the time of its establishment, mainly by leveraging its expertise in the field of hematology, expanding its
fields of testing and solutions, growing its sales regions, anddeveloping its business in regional healthcare. (See the figure
at left.)

Strategies for Value Creation

Profit Modeln A Stable Profit Modeln Composition of Sales (Fiscal 2021)

Ongoing sales of reagents,
service and support

Service and Support

Instruments

Reagents

23.9%

59.4%

Management Resources andBusiness Activities

Stable source of profits

Sales from one order

Reagents

Net sales¥363.7 billion

Instruments

Services and support

3.9%

12.8%

Corporate GovernanceYear 1 Year 2 Year 3 Year 4 Year 5

Others...

n Sales of Reagents and Service and Support
Instruments

As a percentage of net sales, sales of reagents and service

and support have risen 7.0 percentage points over the past 20 years.

OthersOthers76.1%

Service and support
Reagents

Reagents

Activity Report andCorporate Overview

Instruments

Stable source of profits

Service andsupport69.1%
2002 2003 2004 2005 2006 2007 2008 2009 2010
(FY)

Japanese GAAP

20112012 2013 2014 20152016 20172018 2019 2020 2021
IFRS

Note: In the past, charges to customers based on the number of tests were included in “Others.” From fiscal 2015, amounts are divided and presented as “Instruments,”“Reagents” and “Service and Support.”“Others” includes consumables.

Sysmex Report 2022

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Message from the CEO

Hisashi Ietsugu
Chairman and CEO

13

Sysmex Report 2022

Message

By enhancing diagnostic value, we are contributing
toward the extension of healthy lifespans, theimprovement in accessibility to healthcare, theadvancement of medical care and the optimizationof medical costs, as well as promoting the overall advancement of healthcare.

What Sysmex Aims for
Strategies for Value Creation

Our mission is “Shaping the advancement of healthcare”. In line with this mission, we
will enhance the value we provide to society, healthcare and patients.
I would like to extend my sincere sympathies to the people who are suffering from COVID-19. I also offer myheartfelt thanks to all of you who are working to help prevent this pandemic from spreading.
The “Sysmex Way,” the corporate philosophy of the Sysmex Group, defines our mission of “Shaping theadvancement of healthcare.”Management Resources andBusiness Activities

Sysmex operates in the healthcare domain, which continues to evolve and develop, constantly changing
its form as new needs are created by advances in science and society. Looking around the world, although
medical issues differ by country and region, emerging markets are following in the footsteps of developed
countries, where healthcare levels continue to grow more sophisticated.
Within the healthcare domain, the value of diagnostics is also increasing. The in vitro diagnostics (IVD)
market, which is worth an estimated $80 billion, continues to grow steadily. Accurate diagnosis is essential fortreatment, and the evolution of testing to support diagnosis is directly related to the development of medicalcare. In addition, the concept of personalized medicine, in which the selection of treatment methods is optimized for individual patients, has become a worldwide trend. Recently, calls have been mounting for prog-

Corporate Governanceress in treatments that are early-stage and comprehensive, and that reduce patient burden. To realize thesegoals, R&D efforts are underway, including the automation and systematization of diagnostic instruments,
the expansion of biomarkers, and the establishment of liquid biopsy. With primary care in the preventive andpre-symptomatic domains growing in importance, and telemedicine expected to become more widespread,increasingly diverse testing will play a major role in value creation.
Against this backdrop, the value Sysmex provides to society includes the extension of healthy lifespans,
improvement in accessibility to healthcare, and advancement of medical care. We respond to the universal

Activity Report andCorporate Overview

human desire to live long and healthy lives. At the same time, the optimization of medical costs is a themeof topmost importance. Providing testing that is optimal for each patient in terms of timing, location, andmethod can help ensure appropriate drug administration and the selection of treatment, reduce the physicaland financial burden on patients, and lower medical costs. Sysmex, which aspires toward the advancement of
diagnostics and healthcare, it can make a major contribution to these goals in countries around the world.
>>Sysmex’s Value Creation P23>>Providing Value to Patients, Healthy People, Healthcare, and Society P25

Sysmex Report 2022

14

To achieve sustainable growth,
we are aiming for double-digit sales growth and a 20% operating margin.
Operating within the healthcare business domain, which is a growing market, Sysmex has based its management on double-digit sales growth for nearly 30 years.
Our main business domain, the IVD market, is growing in the mid-single digits. Basically, our goal is forsales growth to outpace the market’s expansion, so we are concentrating on augmenting our portfolio andexpanding our sales area. In the diagnostics business, our earnings structure is focused on generating ongoingstable revenue by providing reagents and service and support to customers after they purchase instruments,
so sales growth is important.
Above all, I would like to emphasize the internal energy generated by our goal of double-digit growth.
As we cannot achieve double-digit growth by simply following existing practices, Sysmex is committed to“generating wisdom.” Given the changes that are occurring among customers and markets, we cannot reachthis objective with short-term measures. Employees draw up new strategies and measures through dialogue,learning, and collaboration with customers and other stakeholders. Employees are motivated by the fact that
their own efforts create value and contribute to customers and patients further down the road. We believe
it is important to build this climate of constant thinking and growth to nurture the next generation 10 to 20
years in the future.
On the other hand, achieving growth also necessitates aggressive investment, which requires us togenerate profits. In order to expand our portfolio globally and continue to create new value, our profitability
target should be an operating margin of around 20%. Over the past few years, our operating margin has deteriorated as a result of new product development, regulatory application fees, proactive investment in digitaltransformation (DX), and deterioration in the cost of sales ratio. However, we believe that it is essential to
improve our gross profit ratio and continuously raise profitability by boosting production efficiency (partly
through DX) and through reagents accounting for a larger percentage of sales. We now have the environment
in place to achieve our goals.
>>Financial and Capital Strategies (Message from the Executive in Charge of Finance) P51

15

Sysmex Report 2022

Mid-term management plan to realize our positioning under the long-term
management goals (2025)
Message

Based on these perspectives for value creation and growth, we established “A Unique & Advanced Healthcare
Testing Company” as our long-term vision under the long-term management goals (2025) we formulated infiscal 2018, and we set five positioning targets. Our mid-term management plan that commenced in fiscal
2021 is a promotion plan that incorporates specific measures for reaching these targets.
Expanding and advancing our business foundation are at the base of this strategy. Sysmex has a market

What Sysmex Aims forshare of more than 50% in the hematology field. We have also established a No. 1 global market position in
the urinalysis and hemostasis fields, and we are steadily building our business foundation in the immunochemistry and life science fields. We have developed a sales and service network that spans more than 190
countries and regions, and a well-balanced regional portfolio, with the Americas, EMEA, China, and Japanand the Asia Pacific region each accounting for around one quarter of our business. In addition, we have cell,
protein, and gene technology platforms and have built up manufacturing and quality control systems.
Leveraging these foundations, our mid-term management plan calls for us to continue reinforcing theStrategies for Value Creation

hematology field. At the same time, the plan calls for growth in the key fields of hemostasis, immunochemistry, and life science. Meanwhile, we will advance the development of new businesses, such as medical robotics, and promote DX, both for customers and for ourselves internally. We will also focus on expanding ourhuman resources portfolio and improving management quality, which will serve as the soil to nurture thesegrowth strategies.
>>Long-Term Management Goals P31>>Mid-Term Management Plan P35

Management Resources andBusiness Activities

By augmenting our portfolio and expanding our sales regions,
we achieved record sales and profits in fiscal 2021.
We made steady progress in fiscal 2021, which was the first year of our mid-term management plan. Net sales
and operating profits both reached record levels, rising 19.2% and 34.8% year on year, respectively, and theoperating margin recovered to 18.5%.
We faced difficult changes in the operating environment, such as the impact of COVID-19, raw materials

Corporate Governanceshortages, sharply higher prices, disruption on the logistics front, rising geopolitical risks, and lockdowns in
China, but we responded flexibly in each business and region. We believe we were successful in taking measures based on information we obtained from our customers around the world regarding their changing business environments and requirements.
In November 2021, a fire broke out at an outsourced storage facility in Japan, resulting in the loss of reagents and other inventory. However, due to an initial response based on our business continuity plan (BCP)
and an expeditious revision to our supply plans, we were able to resume the provision of products several
days later, and we quickly optimized inventory levels. Harnessing our Groupwide capabilities and realizing a

Activity Report andCorporate Overview

stable supply to our customers provides us with a certain degree of resistance to environmental changes
and risks.
In our diagnostics business, we worked steadily to take advantage of a recovery in testing demand, which
had fallen off in fiscal 2020 due to COVID-19. In North America, we leveraged our alliances to grow in theurinalysis field. Sales increased in direct sales regions, such as Spain and Portugal, and a rise in testing related
to COVID-19 also helped drive growth. By destination, sales grew by double digits year on year in each region
except China. Meanwhile, in China we steadily undertook growth-oriented initiatives, such as instrument
manufacture utilizing the knockdown production method and expansion of our reagent portfolio. Sysmex
continues to focus on medium- to long-term growth in the Chinese market. This remains an important region
for us, and we will accelerate our business development there going forward. In the medical robotics business,
we began the full-fledged deployment of robotic-assisted surgery systems for the use in urology. We haveSysmex Report 2022

16

installed 18 units as of the end of fiscal 2021, and in October 2021 Medicaroid Corporation filed an application
to expand regulatory approval to gynecology and gastroenterology.
With an eye to growth initiatives in fiscal 2022 and beyond, we will strive to expand our existing portfolioand sales areas, and we will focus on market development in India and other emerging markets. We have highexpectations for Astrego Diagnostics AB (presently Sysmex Astrego AB), which became a wholly owned subsidiary in May 2022. With urinary tract infections, bacterial identification and other diagnoses can take time,making it difficult to prescribe appropriate antimicrobials at the first consultation. This can lead to antimicrobial resistance, which is a major medical issue. Astrego’s proprietary microfluidic technology enables rapid
antimicrobial susceptibility testing, and we aim to help resolve the antimicrobial resistance problem by commercializing the technology and introducing it to the market as soon as possible. Furthermore, we are stepping up our initiatives targeting Alzheimer’s disease. Conventional testing requires cerebrospinal fluid, but weare working to reduce the burden on patients through liquid biopsy, which enables blood-based testing. We
will accelerate development with a view to market introduction in the United States and Europe, as well as inJapan. In the medical robotics business as well, we are pursuing business development activities in the UnitedStates, Europe, and Asia Pacific.
>>Mid-Term Management Plan: Progress on the Key Actions P39

Promoting sustainability management that aligns the vector of management strategy
with the expectations and demands of society
One key action under our mid-term management plan is to “formulate a vision and roll out measures to reinforce and implement sustainability management.” Sysmex regularly reviews its materiality based on changes
in the external environment, societal expectations and demands, and the progress of its strategies. In fiscal
2021, we revisited our KPIs alongside our new mid-term management plan, and set the reviewed KPIs as our
new sustainability targets.
Society’s expectations and demands are growing by the day with respect to the materiality items Sysmex
has identified, such as the environment, diversity and inclusion (D&I), supply chain management, humanrights, and governance. In light of these changes, Sysmex believes that sustainability management is of theutmost importance in order to build a sustainable structure while promoting efforts to address each issue
from a long-term perspective and aligning the vector of our management strategy with these social trends.
In product development, it has become essential to create products that increase testing value while also
being are environmentally friendly. For example, new products in the hematology field that we launched in
2021 shorten the time to diagnosis, improve laboratory work efficiency, and lower environmental impact byreducing power consumption by 40%* compared to conventional products.
With D&I, it is important to have employees with diverse values and backgrounds who can share different
ideas, and for each of them to demonstrate their abilities. For the Group as a whole, we will accelerate D&I
initiatives. We will also promote human resource development and human resource strategies that leverage
diversity from a D&I perspective. Gender is also an issue, especially in Japan, where the economic world has
long been male dominated. We are working to create an environment and culture in which female employees
can easily demonstrate their abilities, and are striving to increase the ratio of women among our employees
and managers.
To continue these sustainability initiatives and integrate them with our growth strategy, we are working
toward the May 2023 announcement of a new long-term management strategy. Following this announcement, we hope to receive candid feedback from our stakeholders and promote active dialogues.
*Sample transportation system modules>>Materiality P21>>Status of Sustainability Targets P47

17

Sysmex Report 2022

Building a corporate culture and promoting strategies based on the Sysmex Way toenhance corporate value
Message

Corporate culture and human resources are of particular importance for enhancing corporate value. Sysmex
positions human resources as the source of value creation. Accordingly, we are focused on revamping our HR
system, attracting a diverse workforce, and cultivating the next generation of managers. Looking beyond strategy and system design, we also emphasize the accumulation of various types of experience and opportunities
and an environment that allows employees to build diverse contacts, including with customers.

What Sysmex Aims for

Underpinning these efforts is the “Sysmex Way,” the corporate philosophy of the Sysmex Group. Our
ideal is for employees to think and draw up strategy in terms of the Sysmex Way, and to align our corporate
culture with this philosophy. Sysmex’s management is unwavering in its corporate stance toward this philosophy; we share the Sysmex Way when recruiting human resources and conduct awareness activities at eachGroup location. In corporate culture surveys of employees, the rate of penetration for the Sysmex Way hasremained at around 70% for the past few years. To improve this further, we will continue to promote dialogue
with employees and increase engagement.

Strategies for Value Creation

We strive toward the realization of a sustainable society and engage in initiatives to enhance corporate
value, based on our mission as expressed in the Sysmex Way, of “Shaping the advancement of healthcare.” Wewould like to ask our stakeholders for their continued support and understanding of our endeavors.
>>Diverse Human Resources P65

Management Resources andBusiness Activities
Corporate Governance
Activity Report andCorporate Overview

Sysmex Report 2022

18

What Sysmex Aims for
Based on the “Sysmex Way,” the corporate philosophy of the Sysmex Group, Sysmex
seeks to provide high-value-added products and services and to foster innovation. By
doing so, we aim to realize a healthier and more fulfilling society through the enhancement of diagnostic value and the resolution of medical issues.

19

Sysmex Report 2022

Column India’s Healthcare Environment
The spread of COVID-19 highlighted the issue of healthcare infrastructuredevelopment, particularly in rural areas. The Indian government respondedby allocating approximately 860 billion rupees to its healthcare budget for
fiscal 2022–2023 to promote an increase in primary healthcare facilities toimprove standards in rural areas. Large private hospitals are also working
with the government and their respective state governments to develop
and enhance local healthcare systems. Demand for medical testing has
been increasing significantly, and in addition to faster and more automatedprocessing of multiple specimens, there is a growing need to standardize
test quality.
Sysmex will contribute to improving the quality of medical care in India
by providing a stable supply of products and appropriate service and support to ensure stable operation of the testing systems at medical facilities.

Sysmex Report 2022

20

Materiality
Materiality Items Supporting Sustainable GrowthMateriality

SDG Targets

1

Resolution of medical issues
through products and services• Resolution of medical issues through innovation• Improvement in accessibility to healthcare2

Responsible provision of
products and services• Pursuit of quality and trust• Strengthening of supply chain management

Realization of an attractive
workplace• Provision of a comfortable working
environment• Promotion of diversity and inclusion• Development of human resources• Promotion of health and occupational safety

4

Environmental consideration• Environmental consideration through productlifecycle• Reduction in environmental burden throughactivities at business offices

5

Strengthening of governance• Corporate governance• Compliance• Risk management

Sustainable growth• Sales growth• Increased operating profit• Generation of free cash flow

3>>State of Progress toward Sustainability Targets P47

Sysmex’s Materiality
Sysmex has identified priority issues (materiality) with a viewto realizing a sustainable society and achieving sustainablegrowth for Sysmex.
Sysmex’s materiality items are priorities we have identified by taking into account the needs and expectations elicitedthrough stakeholder engagement and Sysmex’s internal andexternal operating environments. We identified these priorities
by making an overall assessment along two axes, the “degreeof importance for Sysmex’s stakeholders” from a medium- tolong-term perspective, and from the perspective of risks andopportunities, the “degree of importance for Sysmex.”
In addition, we review and verify these items when formulating mid-term management plans. These were previously
verified in fiscal 2020. Some of the content was updated toreflect changes in the operating environment, such as growing
demands from outside the Group.
To make progress toward our targets more visual and21

Sysmex Report 2022

effective, in the fiscal 2021 revision we set “sustainability
targets” as specific KPIs in line with the mid-term management plan. We also developed action plans and activities forresponsible divisions. Members of the Managing Board confirm progress toward sustainability targets, which is reported
regularly by each department at meetings of the Managing
Board and at quarterly management meetings. In addition, theentire Company works together on initiatives when discussing
new measures.
As our business expands, our stakeholders have grown
more diverse. Nevertheless, our fundamental management
philosophy of instilling confidence among our stakeholders
has remained unchanged. As a Group conducting business inthe healthcare sector, Sysmex works alongside its business
partners and employees to provide products and services to
medical institutions and other customers in an effort to resolve healthcare issues.
Sysmex will continue to engage proactively in dialogues
with stakeholders to co-create value in a sustainable manner.

Dialogue Targeting Stakeholder Engagement

Stakeholders

Main Dialogue with Stakeholders

1
2

3• Corporate culture surveys and dialogues basedon their results• Creation of a global internal reporting system• Creation of a labor-management council

52

Business
Partners• Joint research and development partners(more than 200 themes)• Suppliers (approximately 250 Tier 1
suppliers)• Distributors (more than 600 companies)• Communication through open innovation andalliances• Communication based on procurement policies• Holding of meetings with distributors

4
5

Shareholders and investors(approximately 14,000)• Proactive disclosure and dialogue• Holding of various briefings

Governments and administrations
Regions and societies (including NPOs)• Collaboration and dialogues with government
agencies and international organizations• Participation in local communities

1
4

Shareholders

512Society

4

Management Resources andBusiness Activities

Employees

Sysmex Group employees(more than 9,000)

Strategies for Value Creation• Communication through sales and service andsupport activities• Collection of the voice of the customer (VOC)• Holding of scientific seminars (online)
What Sysmex Aims for

Customers

Medical institutions and commercial labs
in more than 190 countries and regions

4

Message

Corresponding
Materiality(See P101 for details related to stakeholder dialogues.)

Corporate Governance

The Process of Identifying our Materiality
STEP 2: Prioritize

STEP 3: Confirm Suitability

Elicit global social issues andrequests from stakeholders.

Evaluate medium- to long-termrisks and opportunities from theperspectives of stakeholders andSysmex, and order these according
to priority.

Deliberate and approve atmanagement meetings.

Activity Report andCorporate Overview

STEP 1: Understand and Organize the Issues

Materiality Matrix
https://www.sysmex.co.jp/en/csr/
management/materiality.html

Sysmex Report 2022

22

Sysmex’s Value Creation: Aiming for Sustainable Growth
Our business centers on in vitro diagnostics (IVD), based on our mission of “Shaping the Advancement of
Healthcare.” This mission is expressed in the “Sysmex Way,” the corporate philosophy of the Sysmex Group.
By leveraging our unique management resources, we provide high-value-added products and services, aiming
to extend healthy lifespans and optimize medical costs.

Expectations and Requests for Resolving Social and Medical Issues

Management
Resources
for Creating
Value

Customer Feedback Aimed at Creating New Diagnostic Value

R&D structure
for resolving
medical issues

Main Business Activities
Procurement
Procurement system
to realize a stable supply

R&D

R&D
Intellectual
Capabilities Property(Intellectual Capital) >>P59-60, 67
Instruments

Cells

Reagents
Sysmex

Genes

Production andDistribution Structure

Proteins

IT(Manufactured Capital) >>P61

Products

Technology
Platforms

Regulatory Registration
Regulatory application structure for delivering
products throughout the world
Global Sales andService Structure(Social and Relationship Capital)>>P62

Production
Production bases that ensure high quality
and a stable global supply

Stable Financial Foundation(Financial Capital) >>P51

DistributionSales

An efficient supply chain for delivery tomore than 190 countries and regions

HR Strategy

Diverse Human Resources(Human Capital) >>P65

Electricity,
Water Resources, etc.

(Natural Capital) >>P63

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Sysmex Report 2022

Global sales structure

Diverse human resources to support businessIntellectual Property Strategy

Environmental Initiatives

Intellectual property
portfolio that reinforces
global competitiveness

Environmental initiatives
that promote the overallvalue chain

Reinvestment

Message

Medical Institutions(Hospitals and Commercial Labs inMore than 190 Countries and Regions)

Treatment Methods
4 Lower Environmental Impact for
Medical Institutions

Patients, Healthy
People, Healthcare+ Extending healthy lifespans

Strategies for Value Creation

1 Enhanced Testing Systems
2 More Productive Laboratories
3 Help in Determining Diagnoses andWhat Sysmex Aims for

Value Provided, Impact• Early detection of disease• Optimal diagnoses and selectionof treatment methods that
reduce the burden on patients+ Improvement in accessibility tohealthcare+ Optimization of medical costs+ Advancement of medical care
Main Values Provided
by Sysmex (Outputs)
1 Development and Provision of a Diverse

Society+ Expansion of the working population+ Collaboration with suppliers(approximately 250 companies*)*Tier 1 suppliers+ More than 9,000 employees– Industrial accidents+ Income taxes paid: ¥21.0 billion

Corporate Governance

Product Portfolio
2 Support for the Healthcare Professionals
Who Underpin Testing
3 Development and Provision of Tests withHigh Diagnostic Value
4 Environmentally Responsible ProductDevelopment and Business Activities

Management Resources andBusiness Activities>>>For specific value provided, see P25.

(fiscal 2021)+ Dividends: ¥15.2 billion (fiscal 2021)
Service and Support– CO emissions– Water consumption– Electricity use– Waste emissions– Use of animal-derived raw materials
2

Activity Report andCorporate Overview

Service and support toenhance customer
satisfaction

Environment+ Main impacts we want to increase– Main impacts we want to reduce

Sysmex Report 2022

24

Providing Value to Patients, Healthy People, Healthcare and Society
By meeting the needs of medical institutions and providing various sorts of value corresponding to different life
stages, we work to optimize medical costs, extend healthy lifespans and advance healthcare.

Providing value forhealthcare and society(Impact measurement
indicators)

Providing value topatients andhealthy people

Testing needs(Direct provision of value)

Conditions at
medical institutions: Degree of need

Optimization of Medical
Extending HealthyLifespans(Screening rates andhealth-adjusted life expectancy.)

Prevention,
health maintenance• Early detection andprevention• Contribution toepidemiological research

Improvement in Accessibility to Healthcare(Number of medical facilities, number of tests, and screening rates.)

Needs-based testing• More diverse testing
locations in line withmedical circumstances• Improved global health• Standardization of testing
operations• Increased productivity atlaboratories• Spread of pre-symptomaticand preventive medicine• Expansion of testing needs
in clinics and homes• Stronger initiatives to link
medical information among
medical institutions• Growing need for digital
medicine (epidemiologicalstudies and RWD
collaboration)• Rise in testing based on
disease priorities bycountry and region• Differences in testing
systems and standards
among countries and regions• Selection of equipment to
be installed on the basis offinancial circumstances• More diverse tests handedby each laboratory
technologist• Personnel reduction• Shrinking unit prices on
tests• Growing need forspace-saving instruments

Developed countries:
Emerging markets:

Developed countries:
Emerging markets:

Developed countries:
Emerging markets:

Development and Provision of a Diverse Product Portfolio
Support for Healthcare Professionals Who Perform Testing

Sysmex’s response

25

Sysmex Report 2022

• Development of liquidbiopsy and primary careproducts• Integration of various
types of data with
Caresphere• Expansion of the productportfolio• Solution proposals thatcombine multiple IVD
fields• Interface standardization,
automation, andsystematization• Adoption of IoT for
instruments• 24-hour service andsupport structure• Training support forlaboratory technologists

Message

Costs (Medical economy)(Number of cancer genome tests and research papers.)• Decisions on optimaltreatment methods• Promotion of personalized
medicine

Improved prognosis
and quality of life

• Regular and appropriate
prognosis management
using digital technology• Stronger initiatives toward
the rapid coordination ofdiagnosis and treatment•Development of
personalized medicine andgenomic medicine• Standardization ofdiagnostic results• Expectations of improved
treatment efficacy•Growing need for digital
healthcare for diagnosis,
treatment data, andchronic conditions• Initiatives toward
developing an appropriate
prognosis management
infrastructure

Developed countries:
Emerging markets:

Developed countries:
Emerging markets:

Developed countries:
Emerging markets:

Corporate Governance• Growing need for
integrated testing in
multiple testing fields• Advanced testing needs
leading to advances inhealthcare• Need for the development
of diverse biomarkers

Management Resources andBusiness Activities• Sophisticated diagnostics
incorporating advanced
technology(Treatment remission rates
and cure rates.)

Strategies for Value Creation

Selection of diagnosis and treatment methods

Expansion of theWorking Population

What Sysmex Aims for

Advancement of Medical Care

Activity Report andCorporate Overview

Development and Provision of Tests with High Diagnostic Value• Alliance agreements andproactive joint researchwith external institutions• Ongoing investment in
R&D and technology
development• Sophisticated genedetection technologies• Development of diagnostic
systems and biomarkers• Utilization of liquid biopsy
technologies• Scientific support• Building of a remotediagnostic platform• Development ofmonitoring indicators• Product development toachieve recurrencemonitoring

Sysmex Report 2022

26

Worksite Commentary
Japan: Person in Charge of Regional Medical Care (Aomori Prefecture)

We help increase laboratory productivity and support community healthcare.

Yosuke Agatsuma
Morioka Sales OfficeSendai Branch
Sales & Marketing East/Japan

Under the Ministry of Health, Labour and Welfare’s vision, the roles of regional medical care in
Japan are being divided among different facilities, with laboratory needs varying by facility. In
addition, as medical care grows increasingly sophisticated, the work of laboratory technologists
is also becoming more diverse. In addition, the number of tests related to COVID-19 is increasing,making laboratory operations more complicated and increasing workloads.
With regional hospitals in these circumstances, Sysmex believes it is important for tests tosimultaneously provide clinical value (high and multiple functionality) and to deliver value on theefficiency and cost fronts. With our new products in the hematology field that launched in March
2021, we have sought to reflect this feedback from medical facilities and laboratories by providing
high-value-added products and promoting their adoption by new customers. We have worked toautomate tasks that were previously performed manually, reducing the workload at laboratories
while simultaneously boosting productivity and lowering operating costs. We aim to support
regional medical care by proposing and expanding value in these ways.

India: Person in Charge of North and East India

We will identify the diverse needs of different regions and facilities to improve thevalue of diagnostics.

Vineet Malhotra
Deputy General Manager
Sales (North and East India)
Sysmex India Pvt. Ltd.

India faces major disparities in testing volume and parameters, depending on whether facilities areurban or rural, on whether they are privately run or government-affiliated, and on the size of the
facility. One particular issue that India faces throughout the healthcare system is that of improving
healthcare standards in rural and inland areas. Medical facilities in these regions are looking for ways
to achieve high productivity and rapid testing, while at the same time reducing the cost of testing.
Sysmex has been working for some time to offer products and solutions that are precisely
tailored to individual regions’ needs. We have built a robust position by offering unique parameters,
high quality, excellent service and scientific support. We will continue working to fully leverage theseadvantages to expand our product and service offerings and improve diagnostic value. In addition,
we will support advances in diagnosis and treatment by sharing technical expertise and cutting-edgecase studies at Group meetings and seminars.

Ghana: Person in Charge of the Entire Region

We aim to carefully respond to country risk and enhance medical standards.

Moustapha Abari Dan-Bouzoua
ManagerCountry Sales/Marketing Department
Sysmex West and Central Africa Ltd.

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Sysmex Report 2022

In Ghana, medical treatment fees under the national health insurance system are low, and taxes
on medical instruments are high. This situation makes it difficult to invest in testing equipment
and increase testing fees. Against a backdrop of underdeveloped medical regulation, low productquality is the norm, and country risks (such as payment terms and currency) are also a factor.
Given these regional characteristics, Sysmex focuses on carefully responding to country risks
and working to improve the standard of healthcare in Ghana. We are placing a particular emphasison the need to provide accurate test results, the provision of test flows that support rapid diagnosis, the acquisition of expertise and technologies, and higher productivity in testing. Specifically,
we provide a leasing and maintenance menu aimed at optimizing cost-effectiveness. We also help
to enhance testing infrastructure through customer training, product workflow analysis, and technical support for testing systems.

United States: Person in Charge of Large and Medium-Sized Hospitals

Director
Corporate Accounts
Sysmex America, Inc.

Sysmex has acquired a major share of the US market. However, the ongoing management integration of medical institutions and the formation of groups is driving an increase in cases of bulk
purchasing of medical instruments. We are concerned that these moves could affect our market
share. That said, Sysmex’s current position in the US market is robust, and we have a strong competitive advantage. Market competition is expected to intensify, as total laboratory automation(TLA) vendors roll out solutions that bundle clinical chemistry, immunochemistry, and hemostasis
offerings along with hematology.
The United States is learning to live with COVID-19, but the acute care wings of large andmedium-sized hospitals have growing needs for further automation and labor savings. Staff placement and personnel planning are essential parts of laboratory operations. Decisions to introduce
hematology products are also made with an eye toward the future of the healthcare system andtake into account the increasing call to minimize manual processes, except in pediatrics and otherareas where physicians’ orders are mandatory.
Sysmex will leverage its extensive customer touchpoints to ascertain laboratory needs
through regular customer meetings and symposiums and incorporate them into product development and value-added proposals.

What Sysmex Aims for

Tom Tojo

Message

We propose value-added solutions to meet needs for automation and labor saving.

Strategies for Value Creation

China: People in Charge of Tier 2 and 3 Hospitals

Luo Chunmei

Shi Changwen

Chen Changhao

Marketing Promotion Department
Sysmex Shanghai Ltd.

Sales Department (Region II)
Sysmex Shanghai Ltd.

Immunochemistry andClinical Chemistry Department
Sysmex Shanghai Ltd.

Hemostasis Department
Sysmex Shanghai Ltd.

Corporate Governance

Wu Wanqing

Management Resources andBusiness Activities

Amid growing demand for testing and healthcare cost reforms, we will meet expectations through careful communication.

Sysmex Report 2022

Activity Report andCorporate Overview

As its population ages, China is working to rapidly enhance its healthcare infrastructure, and demand for testing is growing. At thesame time, the country is working to curtail medical expenses through reforms to comprehensive medical fee reimbursements. Thisis likely to result in growing expectations for instrument manufacturers on the quality, quantity, and cost fronts. In this environment,
Tier 2 and 3 hospitals (which Sysmex is focusing on) are playing a role in providing more advanced treatment, training future generations, and raising the level of regional medical care. For testing, we are seeing growing needs for high-precision, multi-parameter
testing, increased efficiency, full automation, and scientific support. While customers indicate that the product solutions Sysmex currently provides are meeting these needs, technological innovation needs to continue. We will continue to communicate closely withcustomers, key opinion leaders and distributors. By sharing their requests with the product development team, we will contribute to
the early detection of diseases, more efficient medical care, and higher added value at laboratories.

28

Strategies for Value Creation
Based on the “Sysmex Way,” the corporate philosophy for the Sysmex Group, we haveformulated long-term management goals as part of our aim to contribute toward theadvancement of healthcare and a fulfilling and healthy society. To reach the positioning
targets set by the long-term management goals under our mid-term management plan,
we have established key actions as three-year initiatives to promote specific implementation measures. We are currently working to achieve the objectives of our mid-term
management plan, which concludes in fiscal 2023. Under this strategy, Sysmex aims toachieve sustainable growth, enhance corporate value and resolve social issues.

29

Sysmex Report 2022

Group Corporate Philosophy
Group
Corporate
Philosophy
Long-Term
Management Goals(2025)

Mid-Term Management Plan
(Fiscal 2021-2023)>>Corporate Philosophy for the Sysmex Group P5>>Long-Term Management Goals(Long-Term Vision, Positioning) P31
Long-Term Management Goals:
Achievement Milestones P33>>Mid-Term Management Plan P35
Background to Formulation of the Key Actions P37
Progress on the Key Actions P39

Sysmex Report 2022

30

Long-Term Management Goals
Based on the “Sysmex Way,” the corporate philosophy for the Sysmex Group, in May 2018 we announced long-term management
goals to be achieved by fiscal 2025 and aimed at achieving sustainable growth.
We have set our positioning on the basis of our long-term vision. Specifically, as a unique company undertaking leading initiatives, we aim to contribute to the advancement of healthcare and a fulfilling and healthy society.
The market environment is changing rapidly, due to the COVID-19 pandemic and other factors that we had not anticipatedwhen our goals were formulated. However, we will continue with our initiatives until the final year.

Long-Term Management Goals (2025)
Long-Term Vision

A “Unique & Advanced Healthcare
Testing Company”
UniqueA unique company having its own strengths and advantages(Continue to be a unique existence diﬀerent from other global companies)

Advanced
An industry leader constantly demonstrating advanced capabilities(Embody new diagnostic value, original business models and innovative
corporate management)

Healthcare Testing
A company contributing to healthcare advancement(Continuously provide testing/diagnostic technologies conducive
to enhancing the quality and eﬃciency of healthcare)

Positioning

1 Creating innovative diagnostic value as a global top-five company in IVD
2 A leading company in personalized diagnostics for optimizing
medical treatment
3 A solution provider contributing to the advancement of primarycare diagnostics
4 An attractive company providing value and instilling confidence
5 “One Sysmex” carrying out high-speed management

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Sysmex Report 2022

Analysis of the Market Environment

Message
What Sysmex Aims for

The COVID-19 pandemic has altered the healthcare market
substantially, but medical issues remain to be addressed.
Emerging markets are characterized by expanding populations
and rapid economic growth, while developed countries haveaging populations and face the need to optimize medical costs.
In terms of technological advances, personalized medicine isspreading, and we are seeing a full-fledged adoption of cancer
genomic medicine, big data analysis and robotics are being
utilized, and DX is being promoted in a host of industries.
Sysmex is responding to this changing market environment by leveraging its global sales network and alliances

to increase its market share in emerging markets, including
China, India, and Central and South America. We are also
striving to expand into new business domains with a view torealizing personalized medicine. To this end, we are expanding
our life science portfolio by leveraging our Group companies’
liquid biopsy technologies. In addition, recognizing that humanresource management is a source of competitiveness, we arecontinuously reforming and expanding our systems to create an attractive organizational climate that makes the mostof a diverse workforce. We are also formulating a vision tostrengthen and implement sustainable management that can
respond to changes in the market environment.

Main Initiatives to Realize Our Positioning
Strategies for Value Creation

In anticipation of changes in the external environment surrounding healthcare, we are expanding business in three domains: theconventional IVD domain and the new domains of personalized diagnostics and primary care. Our long-term management goals approach this focus from two perspectives: highly advanced testing and the decentralization of testing locations.

Expanding business domains

1 2, 3Moving to achieve positioning ,• Expansion of personalized diagnostics
technologies• Utilization of liquid biopsy

Corporate Governance

Conventional IVD domain
Hematology, urinalysis, hemostasis,
immunochemistry, clinical FCM, and others• New product sales• Expansion of sales in emerging markets

Management Resources andBusiness Activities

Highly advanced testing

Personalized diagnostics domainLife science(Molecular diagnostics,
regenerative medicine, and others)

Primary care domain

Decentralization of
testing locations

Testing for primary care
(initial diagnosis)

Activity Report andCorporate Overview• Initiatives addressing urinary tract infections• Improved medical access for malaria testing.

Enhanced corporate value and climate

Moving to achieve positioning

4, 5• Configuration and penetration of global human resource management and a job-based human resource system• Promotion of sustainability management

Sysmex Report 2022

32

Long-Term Management Goals: Achievement Milestones
Target Positioning

Directionsl Aim to become a global top-five company

1

through sustained growth in our conventional IVD businesses

Creating innovativel In addition to increasing our share of thediagnostic value as a

IVD market, which continues to grow globally, create new diagnostic value

global top-five company

Monitoring Itemsl Sales growth ratel Hematology market sharel Sales composition by businessl R&D expenses as a percentage of net salesl Expansion of unique testing parameters in

the immunochemistry fieldl Operating cash flow, which is a source ofin IVD

investmentl Market trends of other companiesl Create new testing and diagnostic value

2
A leading company inpersonalized diagnostics
for optimizing medicalthat contributes to the selection of treatment methodsl Fuse our measurement platforms withnew technologies and knowledge acquired through open innovation and othermethods

treatment

A solution provider
contributing to theadvancement of primary

the realization of personalized medicinel Percentage of net sales from life sciencel Configuration of a diverse business model,such as lab assay servicesl Number of joint research projects with



academia and research resultsl Publication in leading medical guidelinesl Leverage the diagnostic technologies and3l New product development pipeline toward

IT we have cultivated in the IVD domain,and contribute toward preventive medicine
and initial treatment, as well as patients inchronic or stable phases of carel Provide solutions that contribute to in-creased access to healthcarel Primary care product portfoliol Service and support structure using ITl Medical clinics and other primary healthcare

networksl Healthcare systems in countries around the

world



care diagnosticsl Earn support from diverse stakeholders

4

through distinctive technologies and business models, dynamic human resources andsound and advanced corporate managementl Customer satisfactionl External assessments of ESG
l External assessments of DXl Number of recallsl Response to regulatory systems in countries

An attractive company

around the worldproviding value andl External advanced technologies and treat-ment modalities

instilling confidencel Number of dialogue with stakeholdersl Provide attractive workplaces where diverse

human resources can exercise their talents

5“One Sysmex” carrying out high-speed
management

33

Sysmex Report 2022l Make use of sophisticated teamwork

to achieve efficient and high-speed
managementl Degree of penetration of the Sysmex Wayl Employee engagement scorel D&I index and health management indexl Training time per employeel Productivity (operating profit per employee)Achievement Milestones
n Net Sales Growth Rate

Messagel Reinforcement and growth of the hematology field

19.2 (%)

l Accelerated global development in non-hematology fields
l Expanded product portfolio

12.8

l Concentration of investment in growth markets
l Expansion of direct sales and service area

4.1

l New product development in life science

2018

2019

1.0
2021

2020

What Sysmex Aims for

2017

2.9

(FY)

n Number of Cancer Genomes Analyzed Using the NCC Oncopanell Development of a companion diagnostic systeml Expansion of cancer genome profiling

1,615 (Cases)

2020

2021

Strategies for Value Creationl Realization of liquid biopsy

1,580
1,368

l More efficient development process and accelerated commer-

cialization cycle
2019l Development of products that realize primary care productivity

n Sales in Emerging Markets

and efficiency

142.9 (¥ billion)

115.9

119.7

122.0

2018

2019

2020

Management Resources andBusiness Activities

110.5

l Establishment of new customer cultivation process for clinics(FY)

and other targetsl Expansion and cultivation of excellent distributorsl Realization of solutions that use healthcare data and IT

2017

n Customer Assessment in the United States (Overall Service Performance)business partners, shareholders, employees, and othersl Establishment of materiality and strengthening of initiativesl Achievement of sustainability targetsl Continuous evolution of how business and departmental plans

are managed

(FY)

5.6

9.5

5.4

9.0

5.2

8.5

5.0

8.0

4.8

7.5

4.6

7.0
6.5

4.2

6.0

2007 2008 2009 2010 2011 2012

Sysmex
9.27
9.06
Industry Average

Activity Report andCorporate Overview

4.4

Corporate Governancel Ascertainment of expectations and requests from customers,

2021

2013 2014 2015 2016 2017 2018 2019 2020 2021

Note: Scale of 1 to 6 from 2007 to 2012, scale of 1 to 10 from 2013 to 2021
Source: IMV ServiceTrakl Introduction and operation of new personnel systeml Reinforcement of local management and HR management indi-n Degree of Penetration of the Sysmex Way(Sysmex Corporation on a Non-Consolidated Basis)
71

vidual basesl Recruitment of personnel for necessary positions and cultivationof next-generation leadersl Business promotion process innovation in response to environ-

53

55

2016

2018

68 (%)

48

mental changes
2014

2020

2021

(FY)

Sysmex Report 2022

34

Mid-Term Management Plan
In May 2021, we announced a new mid-term management plan for the Group, ending in fiscal 2023. The plan aims to reinforce amanagement base that supports sustainable growth for the Group.

Framework for Determining Key Actions for the Group

Achieving sustainable growth andenhancing value for Sysmex

Long-Term Management Goals (2025)

Addressing issues that will lead tothe sustainable development of society>>P31

Main Factors Considered when Formulating the Mid-Term Management Planl Recognition of change in the operating environmentl Progress on important priorities under the previous mid-term management plan and ongoing issues
l Elucidation of risks and opportunitiesl Review of materiality items

Mid-Term Management Plan (Fiscal 2021 to Fiscal 2023)

Financial Targets

Sustainability Targets
>>P36

>>P47

Key Actions for the Group to Reach the Plan’s Targets
Contribution to Medium-Term
Operating Performance1 Accelerate the introduction of new
products aimed at improving growth andprofitability, and promote emerging
market strategies.
2 Achieve high growth through proactive
investment in key fields (hemostasis,
immunochemistry, and life science).

Contribution to Long-Term
Operating Performance

Reinforcement of theManagement Base

4 Promote digitalization in the Group andachieve DX to create customer value.
5 Enrich the talent portfolio, which
contributes to strategy execution, andcreate an attractive organizational
climate that leverages diverse talent.

3 Introduce new business to achieve
dynamic growth.

Creation of Sustainable Value
6 Formulate a vision and roll out measures to reinforce and implement sustainability management

Annual Management Plan

35

Sysmex Report 2022

Financial Targets

Previous mid-term
management plan

Targets for Fiscal 2023

Net sales

420.0 (¥ billion)

410.0

305.0

301.9

18.5

18.5

19.0 (%)

67.4

76.0

80.0

17.0
55.2

2020

2021

2022
(Forecast)¥80.0 billion

Operating margin:

19.0%

ROE:

15.0%

Operating profit

Free cash flow:¥40.0 billion

CAGR*
15.6%

Operating cash flow:¥90.0 billion

2023(Targets)(FY)

Note: Assumed exchange rates: 1USD=¥106, 1EUR=¥125, 1CNY=¥16*Average annual growth rate from fiscal 2020 to fiscal 2023
(As of May 2021 announcement)

Strategies for Value Creation

2019

51.7

Operating profit:

What Sysmex Aims forOperating margin18.3¥420.0 billion

Net sales:

CAGR*
11.2%

363.7

Message

Current mid-term
management plann Sales Targets for Fiscal 2023 (by Business)(Billions of yen)

Fiscal 2020 (Actual)

Fiscal 2022 (Forecast)Fiscal 2023 (Targets)

210.3

231.0

220.0

FCM

1.4

2.0

3.0

7.0

Urinalysis

21.8

29.9

37.0

36.0

Hemostasis

54.3

62.0

66.5

67.0

Immunochemistry

15.4

20.4

25.0

30.0

Clinical chemistry

2.7

2.9

3.0

3.5

Life science

13.0

17.9

22.0

30.0

Others

15.3

16.6

15.5

16.5

304.2

362.4

403.0

410.0

0.7

1.2

7.0

10.0

Diagnostics business
Medical robotics businessCorporate Governance

180.0Management Resources andBusiness Activities

Hematology

Fiscal 2021 (Actual)

Assumed exchange rates for fiscal 2022: 1USD=¥120, 1EUR=¥130, 1CNY=¥18
Assumed exchange rates for fiscal 2023: 1USD=¥106, 1EUR=¥125, 1CNY=¥16

n Sales Targets for Fiscal 2023 (by Destination)
Activity Report andCorporate Overview(Billions of yen)

Fiscal 2020 (Actual)

Fiscal 2021 (Actual)

Fiscal 2022 (Forecast)Fiscal 2023 (Targets)

Japan

48.7

55.6

65.0

76.5

Americas

65.8

83.6

101.0

95.5

EMEA

82.1

101.5

106.0

100.0

China

83.8

93.3

105.5

112.0

Asia Pacific

24.4

29.6

32.5

36.0

Assumed exchange rates for fiscal 2022: 1USD=¥120, 1EUR=¥130, 1CNY=¥18
Assumed exchange rates for fiscal 2023: 1USD=¥106, 1EUR=¥125, 1CNY=¥16

Sysmex Report 2022

36

Mid-Term Management Plan: Background to Formulation of Key Actions
Major Key Factors of Environmental Change(Opportunities and Risks)(1)

Continuing IVD market expansion,
more intense competition formarket share• Delays in our business portfolio strategy• Stalled product development• Delayed market cultivation in emerging markets• Rise of competitors in emerging markets• Unsuccessful alliance partner strategy• Rising cost of sales promotion activities(2)

Healthcare needs that are
increasingly diverse by region, andthe promotion of dispersed testing
locations• Slow adaptation to regional and customer needs• Delays in establishing a direct sales structure• Decline in customer satisfaction• Sluggish rollout in the primary care market(3) Advancement of sophisticated testing• Inconsistencies in selection and concentration ofcapital allocation• Stagnation of R&D in focus areas such as gene testing• Underperformance in technology development andjoint research

Changing regulatory and medical
assistance systems in locations
around the world
Changing healthcare infrastructure
investment• Reinforcement of policies to reduce healthcare costs inindividual countries• Declines in selling prices and profitability• Delays in obtaining approvals and increased costs due
to stricter compliance with regulatory systems invarious countries• Stalled dialogue with regulators and key opinion leaders

(4)

(5)

Advancement of technologicalinnovation(AI, big data, gene analysis, others)

(6)

37

Assumed Risk Scenarios

Growing demand for sustainability,emphasis on ESG activities
Increasing calls for stronger
governance and disclosure

Sysmex Report 2022

• Slow uptake of digital and advanced technologies• Failure of alliances and M&A• Increased costs related to R&D• Dramatic changes in the market environment due toentry from diﬀerent industries• Loss of stakeholder trust• Slowdown in ESG activities and decline in external
evaluations• Falling employee engagement and motivation• Compliance violations

Main Factors ofEnvironmental Change

Key Actions

Related Materiality
1
2 3 4 5
Message◎ ◎(2) (3) (4) (5)2Achieve high growth through proactive
investment in key fields (hemostasis,
immunochemistry, and life science).

◎ ◎(2) (3) (5)3Introduce new business to achieve
dynamic growth.

◎(1) (4) (5)4Promote digitalization in the Group anddevelop DX to create customer value.

◎ ◎5

Enrich the talent portfolio, which contributes
to strategy execution, and create an
attractive organizational climate thatleverages diverse talent.

◎

6

Formulate a vision and roll out measures toreinforce and implement sustainability
management.

◎ ◎ ◎ ◎ ◎(1) (2) (3) (4)Management Resources andBusiness Activities
Corporate Governance◎

Activity Report andCorporate Overview(6)Strategies for Value Creation(1) (2) (3) (4) (5) (6)What Sysmex Aims for1

Accelerate the introduction of new products
aimed at improving growth and profitability,and promote emerging market strategies.

Materiality: 1 Resolution of medical issues through products and services 2 Responsible provision of products and services
3 Realization of an attractive workplace 4 Environmental consideration 5 Strengthening of governance

Sysmex Report 2022

38

Mid-Term Management Plan: Progress on Key Actions
1

Accelerate the introduction of new products aimed at improving growth and profitability,and promote emerging market strategies

Focus of Initiatives

Major Indicators

 In the hematology field, increase sales through a global rollout ofhigh-end models.
 Launch new products for low-end markets and increase direct
sales in India.
 Work to create new clinical value through collaboration withclinical flow cytometry, such as the selection of optimaltreatment methods and the monitoring of treatment effects.
 Promote a hematology-plus strategy aimed at further
innovations in such areas as operational value and clinical value.
 Develop products that foster better accessibility to healthcare
in emerging markets and help curtail medical costs.

 Hematology and FCM sales
 Hematology and FCM gross profit Hematology market share*
 Sales in emerging and developing markets*
 SG&A expense ratio Number of new and focused products introduced into the market
 Number of joint research projects with academia on clinicalvalue creation
 Number of recalls** Same as the sustainability targets

Key Progress
In addition to promoting the global rollout of high-end andcompact models in the hematology field, we have developed
and begun selling transportation system modules that improve the efficiency of the entire testing workflow. Based on
the development concept of “operational value (improved
efficiency of laboratory operations),” we have developed theworld’s first* automatic measuring function for quality control
materials, aimed at minimizing manual work by customers.
This instrument fully automates the quality control, storage,
and transportation of materials for cleaning, which were previously performed by the customer, helping to reduce manual
work. *Sysmex researchn Hematology and FCM Sales
Hematology
FCM

1.5
187.2

1.5
181.6

2.0
210.3

3.0 (¥ billion)
231.0

1.4
180.0

>>P98 Providing “Operational Value” That Boosts Efficiency inLaboratory Operations

By building a direct sales and service structure in India, which
we are positioning as a priority market, we have boosted sales
by 48% year on year. As well as the high-end market, where we
strengthened direct sales, we were able to steadily promote
the introduction of instruments in mid-range and low-end
markets by winning tenders and through other projects. Goingforward, we will promote sales measures that are more tailored to local needs.
In addition, in high-end clinical FCM instruments we haveobtained regulatory approval in Europe and commenced sales
as in vitro diagnostic medical devices.

Automated hematology analyzers

39

Sysmex Report 2022

2018

2019

2020

2021

2022

(Forecast)

(FY)

2

Message

Achieve high growth through proactive investment in key fields (hemostasis,
immunochemistry, and life science)

Focus of Initiatives

Major Indicators

 Hemostasis field:• Increase market share by accelerating the global rollout of
new products.
 Immunochemistry field:• In China and other parts of Asia, increase the installed
instrument base and the number of test parameters.
• Promote the commercialization of testing for Alzheimer’s disease.
 Life science field:• Expand the market in China for the cancer lymph nodemetastasis test system.
• Increase sales of cancer gene testing.
 Promote agile development with the aim of boosting productdevelopment speed and meeting customer needs.

 Sales composition and growth rate in three key fields
 Market share and rollout regions in three key fields
What Sysmex Aims for R&D investment in three key fields
 Number of new products developed in three key fields
 Number of cancer genomes analyzed*
 Number of biomarkers
 Number of conference presentations and research paper
mentions* Same as the sustainability targets

Strategies for Value Creation

Key Progressn Sales in Key Businesses
Hemostasis
Immunochemistry
Life science

66.5 (¥ billion)

Management Resources andBusiness Activities

62.0
54.3
47.9

48.2

25.0
20.4
13.9
10.3
2018

14.8
11.2
2019

15.4
13.0
2020

17.9

2021

22.0

2022

(Forecast)

Corporate GovernanceIn this mid-term management plan, we have designated hemostasis, immunochemistry, and life science as key fields, andto generate results we will give them priority when allocating
resources. In the hemostasis field, we are promoting global
regulatory applications for high-end models. In immunochemistry, expanding the number of test parameters that can beloaded onto instruments is an important factor. In fiscal 2021,
we launched 18 new parameters in China that we developed
jointly with a local company, bringing the total to 37. In the
future, we look forward to medical institutions adopting thesenew parameters, which will contribute to earnings. We are also
developing our own reagent parameters. In December 2021,
we submitted an application in Japan for manufacturing andmarketing approval of a diagnostic reagent for Alzheimer’s
disease. We are also preparing to expand business involving
this reagent in the United States and Europe.
In life science, we have enhanced our portfolio of tests related to COVID-19, as part of our effort to resolve social issues.

(FY)

Activity Report andCorporate Overview

Realizing Personalized Medicine through Liquid Biopsy
Liquid biopsy is a testing method that involves highly sensitive analysis to detect disease-aﬀected areas present in minutequantities in blood and bodily fluids. Compared with conventional physical biopsy, which is carried out on samples taken fromtumors or other tissue, liquid biopsy is in the spotlight for its potential for imposing less of a physical, emotional, andeconomic burden on patients. It also increases opportunities for testing and helps to determine drug administration and othertreatment methods at an early stage.
Examples of Initiatives
In 2016, Sysmex and Eisai Co., Ltd. entered into a comprehensive non-exclusive collaboration agreement for the creation of
new diagnostic reagents in the field of dementia by utilizing each company’s technologies and knowledge. By using blood
tests to detect structural abnormalities in minute proteins, which are thought to impact disease state, we have been engaged
in the development of next-generation diagnostic reagents that will enable early diagnosis, selection of treatment options,and the monitoring of the eﬀects of treatment for dementia.

Sysmex Report 2022

40

3 Introduce new business to achieve dynamic growth

Focus of Initiatives

Major Indicators

 Medical robotics business:• Accelerate market introduction by increasing the number ofsurgical instructors.
• Increase the number of applicable medical departments byenhancing robotic forceps and peripheral software.
• Prepare for regulatory application and market introduction in
Europe, China and Asia-Pacific.
 Cultivation of new business domains:• Step up initiatives targeting regenerative medicine andgenomic medicine.
• Consider initiatives for utilizing healthcare data through open
innovation outside the Company.

 Sales in the medical robotics business Number of medical departments using the robotic-assisted
surgery system
 Number of surgeries performed using the robotic-assisted
surgery system
 Number of joint research projects with academia in regenerativeand cellular medicine
 Number of demonstration experiments for digital medical
solutions Amount of investment in new businesses

Key Progress
To achieve further growth, we are pursuing new businesses
outside the conventional IVD domain. These efforts center
on introducing more robotic-assisted surgery system into themarket and increasing the number of medical departments
using them. In fiscal 2021, the cumulative number of units
deployed since launch reached 18 in Japan. Feedback from themarket has been positive, with many KOLs supporting the
program, and we feel that we are off to a good start in our
first year. In October 2021, Medicaroid Corporation filed an

application to expand regulatory approval to gynecology andgastroenterology. By increasing the number of medical departments utilizing our systems, we aim to further acceleratemarket uptake.
In addition, we are stepping up our initiatives in the fields ofregenerative medicine and genomic medicine promoting otherefforts to develop new businesses. For example, we have submitted an application for manufacturing and marketing approval of agene panel testing system for inherited retinal dystrophy.

4 Promote digitalization in the Group and utilize DX to create customer value

Focus of Initiatives

Major Indicators

 Set up a specialized organization to promote DX, and strengtheninternal and external functions for promoting digitalization.
 Accelerate the digitalization of internal business processes tooptimize and improve the efficiency of the entire Group.
 Increase value creation for customers by expanding Caresphere’s
applications.

 Productivity per employee
 Amount of DX investment
 Number of digital human resources recruited Number of information security trainees* Number of facilities using Caresphere Number of Caresphere applications* Same as the sustainability targets

Key ProgressIn fiscal 2018, we began working to digitalize internal processes. We have completed the global standardization of coresystems, and we have now advanced to the implementationand operational phase in some regions. To improve efficiency
and add value throughout our value chain, we have also
implemented individual systems for product design information, customer management, the global human resource
management system, and document management. As individual systems become operational, we expect to substantially
improve productivity in such areas as making design changes

41

Sysmex Report 2022

and transitioning to mass production in the development
and manufacturing divisions, reducing work-hours by approximately 25% compared to the previous system. In thearea of DX for customers, we are leveraging the knowhow weaccumulated from our previous service, SNCS, to develop new
applications for the Caresphere platform. In fiscal 2021, we began offering Caresphere XQC, an external quality assessment
application. Introducing this application enables customers to
obtain more highly reliable test results and facilitates efficientlaboratory operations.

5

Enrich the talent portfolio, which contributes to strategy execution,and create an attractive organizational climate that leverages diverse talent

Major Indicators

 Strengthen human resource management by establishing a
job-based HR management system and expanding its application
to the general workforce.
 Expand opportunities to acquire highly specialized humanresources through the realization of diverse work styles.
 Provide educational opportunities and expand content for all
generations.
 Promote diversity, inclusion, and health and productivity
management.

 Engagement score*

Message

Focus of Initiatives

 Turnover ratio* Female managers ratio* Training time per employee* Total annual working hours*
 Lost-time injury frequency rate*

What Sysmex Aims for Lost work day rate** Same as the sustainability targets

Key Progress

Management Resources andBusiness Activities

6and values. Internal discussions are underway to make this system conducive to strengthening the expertise of employees byenabling them to acquire and improve the skills necessary forthe jobs they are aiming for. We will continue to improve themental and physical health and engagement of our employees,
and aim to enhance the ability to execute strategies and create
innovation through richer communication.

Strategies for Value Creation

Sysmex has been promoting various human resource measures in line with its business expansion and globalization. Asa further initiative, in fiscal 2021 we expanded our job-based
HR management system from only managers to include thegeneral workforce, creating an environment in which diverse
human resources can demonstrate their abilities, show results
and achieve self-fulfillment. This enables all employees tochoose a way of working that suits their individual life stages

Formulate a vision and roll out measures to reinforce and implement sustainability
management

Major Indicators

 Formulate a vision to reinforce sustainability management.
 Create new long-term management goals based on our vision forsustainability management.
 Engage in activities to reach sustainability targets.

 Number of dialogues with stakeholders

Corporate Governance

Focus of Initiatives

 CSR survey response rate (Tier 1 raw material suppliers)*
 Reduction of CO2 emissions (instruments/business activities)*
 Reduction of water consumption (instruments/businessactivities)* Number of internal reports*
 Number of unethical incidents** Same as the sustainability targets

Activity Report andCorporate Overview

Key Progress
Demand for environmental responsiveness has been growing,from both within and outside the Company. Answering thiscall, in May 2022 we set and declared the goal of becoming
carbon neutral (reducing greenhouse gas emissions to zero inreal terms) by 2040. To improve the effectiveness of governance, we have revised our structure so that the majority ofmembers on the Nominating and Compensation committees
are outside members of the Managing Board. Furthermore, wehave deliberated on strengthening our sustainability management to realize a sustainable society and achieve sustainablegrowth for Sysmex. We are moving forward with the formulation of a long-term management strategy and mid-term management plan that will integrate Sysmex’s unique sustainability
management and growth strategy, with a view to announcing
these plans in May 2023.

Sysmex Report 2022

42

Performance Highlights (As of the end of fiscal 2021)
Financial Performancen Net Salesn Operating Profit/Operating Margin¥

363.7 billion¥(Up 19.2% year on year)(Up 34.8% year on year) (Up 2.1 percentage points year on year)

67.4 billion 18.5%
Operating profit

67.4 (¥ billion)

Net sales

363.7 (¥ billion)

Euro

130.6 (¥)
112.4 (¥)
Operating margin

US dollar

Yuan
2012

2013

18.5 (%)

17.5 (¥)
2014

2015

2016

2017

Japanese GAAP

20182012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (FY)2019 2020 2021 (FY)IFRSJapanese GAAP

Reagent sales grew substantially, thanks to a recovery intesting demand. Net sales rose significantly, owing to an
expansion of the direct sales area, an increase in the installed
instrument base and a boost from demand for testing related
to COVID-19.

n R&D Expenses/
R&D Expenses as a Percentage of Net Sales

IFRS

Higher sales and an improved cost of sales ratio pushed up
gross profit substantially. Additionally, our sales activities grew
more efficient as a result of COVID-19, which has led asignificant increase in operating profit.

n Capital Expenditure (including tangible and intangible)

33.2 billion

26.7 billion 7.4%¥¥

(Up 19.0% year on year) (Same level as in the previous year)(Up 29.4% year on year)

R&D expenses

Capital expenditure26.7 (¥ billion)

33.2 (¥ billion)

R&D expenses as a percentage of net sales

7.4 (%)

2012

2013

2014

2015

Japanese GAAP

2016

2017

2018

2019 2020 2021 (FY)IFRS

These expenses rose due to new product development and anincrease in expenses for global regulatory application activities.
43

Sysmex Report 2022

2012

2013

2014

Japanese GAAP

2015

2016

2017

2018

2019 2020 2021 (FY)IFRSIn addition to DX investment, customer lease assets grew as aresult of a recovery in instrument demand.

¥

58.7 billion ¥23.6 billion¥(Up 3.3% year on year) (Down 14.5% year on year)(Up 38.2% year on year) (Up 38.1% year on year)

Messagen Operating Cash Flow/Free Cash Flown Profit Attributable to Owners of the Parent/
Basic Earnings per Share (EPS)

44.0 billion ¥210.88
What Sysmex Aims forOperating cash flow

Profit attributable toowners of the parent

58.7 (¥ billion)

44.0 (¥ billion)
210.88 (¥)
Free cash flow

23.6 (¥ billion)

Japanese GAAP2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (FY)IFRSJapanese GAAPIFRSn ROE/ROAn Total Shareholder Return (TSR) (Annualized Rate)

Corporate GovernanceOperating profit rose and foreign exchange losses (gains)improved, leading to higher profit.

Management Resources andBusiness Activities

Operating cash flow rose, due mainly to increases in profit
before tax and depreciation and amortization. However,investing cash flow also rose, owing to purchases of property,
plant and equipment and intangible assets. Free cash flow
decreased as a result.

13.5%

Strategies for Value Creation2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (FY)

EPS

18.4% 5.8%

9.7%

(Up 2.6 percentage (Up 1.9 percentage
points year on year) points year on year)(Past 10 years) (Past 5 years)

Sysmex

18.4%

Activity Report andCorporate Overview

TOPIX

11.0%

ROE

Sysmex2013

2014

Japanese GAAP

2015

2016

2017

2018

2019 2020 2021 (FY)

7.6%

5.8%

9.7 (%)

ROA

2012

TOPIX

13.5 (%)

Past 10 years

Past 5 years

IFRS

Total equity attributable to owners of the parent and assets
increased, but profit expanded, causing ROE and ROA to rise.

Owing to our steady payment of dividends, our yield has
outperformed TOPIX over the past 10 years.
Sysmex Report 2022

44

Non-Financial Performancen Scope 11 and 22 Greenhouse Gas Emissions/
Basic Unit Emissions

n Number of Group Employees/
Percentage of Overseas Employees

19,924 t-CO 0.548 t-CO /billion

9,812 60.4%

2(Up 2% year on year)

2(Down 14% year on year)

Scope 1 and 2
greenhousegas emissions

Asia Pacific

Japan

984

3,888

19,924 (t-CO )2

China
Basic unit emissions

0.548 (t-CO /billion)

779

2

2016

2017

2018

2019

2020

2021

(FY)

Total emissions rose, due to a worsening of CO2 emission
factors (mainly at bases in Japan) and an increase in PCR
testing operations at CoviLab. Basic unit emissions decreased,
owing to higher sales.

FY2021

EMEA

Americas

2,820

1,341

Employee numbers continued to rise in tandem with our scaleof business, such as our expanding direct sales and service area.

1. Scope 1: Greenhouse gases emitted directly by Company facilities, factories
and company vehicles
2. Scope 2: Greenhouse gases emitted indirectly by the Company due toenergy usen Percentage of Female Managers/Percentage
of Next-Generation Female Managers
Sysmex Corporation
Percentage ofnext-generation
female managers

22.4%

n Engagement Score(EMEA excluded in fiscal 2020 and fiscal 2021)

65%(Down 1 percentage point year on year)

Sysmex Group
Percentage offemale managers

17.3%
10.6%

2015

2016

2017

2018

2019

2020

2021

(FY)

These percentages increased, particularly in Japan, owing to
the introduction of a job-based human resource system anda “smart work” system.

45

65%

2020

2021 (FY)

8.7%

5.7%
2014

66%

Sysmex Corporation
Percentage offemale managers

8.7%

2013

72%

Sysmex Report 2022

2017

2018

2019

The score was down mainly in China and other parts of Asia.

Topics in Fiscal 2021
Expanding Our Portfolio in the Hematology Field

Message

In the hematology field, we introduced a compact model in March 2021.
In April, we rolled out our next-generation flagship model (multiparameter automated hematology analyzer). In June 2022, we launched sample
transportation system modules equipped with the world’s first automatedmeasurement function for quality control material. Sysmex holds theleading share of the global market in the hematology field. Even now that
we have reached the apex of this field, we continue expediting the market
introduction of new products in global markets in the aim of providing
more valuable test results and creating a laboratory environment that canmake the best use of these results.

What Sysmex Aims for

TARC Assay Kit Approved for an Additional Indication as an Auxiliary for Assessment of COVID-19
Aggravation Risk

Strategies for Value Creation

In June 2021, the Th2 chemokine (TARC) kit that we developed jointlywith Shionogi & Co., Ltd. was approved for an additional indication as an
auxiliary for assessment of aggravation risk in patients who have tested
positive for COVID-19. This new diagnostic method is useful for predicting the aggravation risks of COVID-19 in the initial stage of onset, which
can lead to optimal measures, such as inpatient treatment for those athigh risk and hotel quarantine or at-home treatment for low-risk patients.
As a result, the method is expected to help optimize medical resources.

Management Resources andBusiness Activities

Development of Gene Panel Testing for Inherited Retinal Dystrophy
In September 2021, genetic diagnosis for inherited retinal dystrophy using a gene panel testing system we developed jointlywith Kobe City Eye Hospital has been approved as Advanced Medical Care B in Japan. This is one example of how we are expanding our portfolio in the domain of hereditary disease within life science field by leveraging our experience in the clinicalimplementation of cancer genome profiling and the synergy within Group companies. In June 2022, we submitted an application for manufacturing and marketing approval in Japan for this gene panel testing system for inherited retinal dystrophy.

Corporate GovernanceCapital and Business Tie-up with KAINOS Laboratories
In February 2022, we formed a capital and business tie-up with KAINOS Laboratories, Inc. with a view toward strengthening capabilities to develop and produce diagnostic reagents in the immunochemistry field. Sysmex and KAINOS have beencollaborating in the immunochemistry field, with KAINOS assuming responsibilities for the development and production of
selected diagnostic reagents for Sysmex’s immunochemistry analyzers. The capital tie-up will further advance this collaborative relationship and accelerate the expansion of our lineup of immunochemistry diagnostic reagents.

Activity Report andCorporate Overview

Establishment of a Subsidiary in Saudi Arabia
Sysmex is working to reinforce its sales and service structure in the Middle
East, with the aim of expanding business in this growing market. Following
on from earlier initiatives in the Middle East market, where high rates
of growth are expected (Dubai in 2008 and Egypt in 2018), in February
2022 we established a subsidiary in Saudi Arabia. In Saudi Arabia, we aremoving from sales and service via distributors to conduct direct sales andservices. By capturing customer needs with precision, we aim to gain agreater market share for its mainstay hematology business in the region,
while at the same time creating a stronghold in the urinalysis and hemostasis markets there and seeking opportunities for other businesses.

Sysmex Report 2022

46

Status of Sustainability Targets
Materiality

KPI

Percentage of consolidated sales to market size
Hematology market share1,5 of instruments, reagents, and services in a single
year in the field of hematology
Total number of patents, utility model rights andNumber of patents
design rights obtained
Resolution of mediTotal number of patents, utility model rights andNumber of new patents
cal issues throughdesign rights applied forinnovation
Resolution of
Number of cancer genomes Number of cancer genomes analyzed by the2
Medical Issues
analyzed
NCC OncoPanel
Number of breast cancer
through Products
Number of breast cancer tests using the OSNA
tests using the OSNA™
and Services
methodmethodImprovement inaccessibility tohealthcare

TargetFiscal 2025
Fiscal 2023
(Eco-Vision)

—
—
—
—
—

Sales in emerging anddeveloping markets

Consolidated sales in emerging and developing
markets—

Number of recalls

Number of voluntary recalls/repairs for products
sold (instruments and reagents)—

Number of FDA warning
letters

Number of FDA warning letters issued to
Sysmex—Pursuit of quality
and trust

Responsible
Provision of
Products andServices

Percentage of raw material suppliers that responded to CSR surveys (primary suppliers inJapan and overseas)
Number of training sessions Number of briefings, training, and other training
for suppliers3
sessions for domestic suppliers (single year)

CSR survey response rate
Strengtheningof supply chain
management

90%
6Percentage of primary raw material suppliers
Third-party certification rate
(domestic) obtaining third-party certification forof suppliers3
manufacturing and product quality—

Engagement score

Corporate culture survey results

75%

Turnover ratio2

Turnover ratio of regular employees, excluding
those who have reached the mandatory retirement age—

Percentage of days of paid
leave taken2

Percentage of days of annual paid leave taken
per regular employee—

Percentage of men taking
childcare leave3

Percentage of male employees (including parttime workers) taking childcare leave after theirspouse bears a child

30.0%

Female managers ratio

Ratio of women at director level or above

17.0%

Percentage of employeeswith disabilities2

Percentage of employees with physical, intellectual or mental disabilities

2.38%

—

Provision of a comfortable working
environment

Realization of
an Attractive
Workplace

Promotion of diversity and inclusion

1 Some figures have been revised from previous reporting.
2 Target: Group companies in Japan
3 Target: Sysmex Corporation on a non-consolidated basis
4 Europe, the Middle East, and Africa
5 Source: Clearstate and Sysmex’s assumption

47

Sysmex Report 2022

Results
Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

52.7%

53.8%

54.7%

55.6%

55.7%

2,709

2,987

3,143

301

346

306

—

—

—

—

—

—

—

—

—

81%

84%

85%

—

—

—

—

—

—

72%

—

—

—

—

—

—

—

—

—

—

—

15.2%

15.2%

15.5%

2.04%

2.21%

2.30%

Sysmex Report 2022

Activity Report andCorporate Overview—

Corporate Governance—Management Resources andBusiness Activities—

In fiscal 2021, sales grew by approximately 12% for several reasons, including favorable business in the direct marketing and service areas inemerging countries such as India and the number of tests returning to its¥122.0 billion ¥143.0 billion previous level in areas where the demand had fallen due to the COVID-19
pandemic. We are also taking actions to improve the quality of healthcare
in collaboration with international institutions such as the WHO and JICA.
There were only two recalls in fiscal 2021, which was half the number asin the previous fiscal year. Of these recalls, none were Class I; two were
4
2Class II (one for an instrument and one for a reagent). As in the previous
fiscal year, no FDA warning letters were issued.
As well as constructing a framework to fully comply with regulations
in each country around the world, defective products are prevented
from entering the market by conducting regular quality audits, timely
collection of information from the market through our global quality
00complaint processing system, and full investigations into the causes ofdefective products. We will maintain and improve the safety and qualityof our products in the future.
The CSR survey response rate was 90% in fiscal 2021. This was a highrate, as in the previous fiscal year. The number of training sessions for
89%
90%
suppliers increased from two in the previous fiscal year to five. We held
BCP training for business partners, assuming a Nankai Trough mega2
5thrust earthquake, as well as explanatory meetings on sustainability,
including SDGs and environmental issues, and approximately 250 business partners in total participated in these activities.
86%
88%
We will continue to strengthen relationships between the Group and ourbusiness partners.
The engagement score in fiscal 2021 decreased by 1 % compared to the66%
65%
previous fiscal year. This was mainly due to a decrease in the scores(except(except
in China and West Asia. The turnover rate increased by 0.6%. This is a
EMEA4)
EMEA)
result of activation of the human resource market, which had slumped
due to the COVID-19 pandemic. However, our turnover rate is lower andthe employee retention rate is considered to be high compared to an
average turnover rate of about 9% in the manufacturing industry.
We will continue to promote establishment of a globally consistent
2.7%
3.3%
job-based human resource management system, conversion to a globally competitive remuneration system, securing and training talented
personnel, creating a comfortable working environment, and engaging inlabor-management dialogues in the future.
The outcome for fiscal 2021 increased by 1.1% compared to the previous
fiscal year. Several measures were taken, including setting recommended
dates for paid leave, sharing the results of this with division managers
and proactively encouraging employees to take paid holidays.
61.3%
62.4%
In addition to activities to raise awareness amongst our employees,
we aim to increase the rate at which annual paid leave is taken due toimproved productivity.
The outcome for fiscal 2021 increased by 23.3% compared to the previous fiscal year. The rate at which male employees take childcare leavelargely increased due to several measures such as changes in the awareness of working patterns as a result of the introduction of the “smart
work” system, educational activities in the previous fiscal year (hosting a
33.8%
57.1%
diversity roundtable discussion and issuing a guidebook for male employees), and training of managers.
We will continue to take actions to improve the rate at which male
employees take childcare leave in the future.
The outcome for fiscal 2021 increased by 1.1% compared to the previous fiscal year. The achievement rate increased particularly in the Japanregion due to the introduction of a job-based personnel system and
16.2%
17.3%
“smart work” system.
We promote the establishment of a comfortable working environment
and the use of diversity training to facilitate diverse working patterns.
The outcome for fiscal 2021 was at the same level as in the previous fiscal
year, and Sysmex Harmony has continued to achieve a zero turnover rate.
We will continue to create tasks and a comfortable working environment
2.30%
2.31%
to allow persons with physical, intellectual, or mental disabilities to fulfill
their potential in accordance with their individual abilities.

Strategies for Value Creation—

What Sysmex Aims for—Though the impact of the COVID-19 pandemic remains in some regions,
our share of the hematology market slightly increased in fiscal 2021
compared to the previous fiscal year, as sales of hematology products
3,485
3,680
grew due to the expansion of direct marketing and service areas. In the
future, new flagship models will be sequentially introduced.
287
298
In addition, the number of tests for breast cancer using the OSNA
method increased because the number of surgeries has returned to its
1.6 thousand 1.6 thousand previous level.
In conjunction with business activities, the numbers of patents held and
46 thousand 54 thousand patent applications have steadily increased.

Message—

Progress and Future Initiatives

48

Materiality

Development of
human resources

Realization of
an attractive
workplace

KPI
Average training time per employee for training
Training time per employee provided by HR and each division (including
online training)

TargetFiscal 2025
Fiscal 2023
(Eco-Vision)

40.0 hours

Total annual working hours2 Total annual hours worked per regular employee 1,950 hours
Promotion of healthand occupationalsafetyEnvironmental consideration throughproduct lifecycles

Environmental
consideration

Lost-time injury frequency
rate2

Number of employee death or injuries resulting
from work-related accidents per million hours
actually worked

0.58

Lost work day rate2

Number of days absent from work due to workrelated injuries per 1,000 hours actually worked

0.02

Reduction of CO2 emissions Percentage reduction of CO2 emissions per(instruments)
instrument unit with FY2016 as the base year

Cut 20%

Cut 15%

Reduction of water consumption (instruments)

Cut 10%

Cut 15%

Reduction of CO2 emissions Percentage reduction of CO2 emissions per(shipping)
S-Corp sales with FY2016 as the base year

Cut 20%

Cut 15%

Reduction of packaging and Percentage reduction of total packaging matelabeling materials
rial weight with FY2019 as the base year——

Percentage reduction of CO2 emissions from
Reduction of CO2 emissions
business activities per consolidated sales with(business activities)
FY2016 as the base year

Cut 40%Cut 50%Cut 5%

Cut 15%

Reduction in environmental burdens Reduction of water conthrough activities at sumption(business activities)business offices
Recycling rate
Reduction of total waste1

Corporate
governanceComplianceReinforcement ofgovernance

Percentage reduction of water consumption per
instrument unit with FY2016 as the base year

Percentage reduction of water consumption
from business activities per consolidated sales
with FY2016 as the base year
Resources recycled per total waste generated
Percentage of reduction of total waste generated by business activities per consolidated
sales with FY2019 as the base year

85% or higher 93% or higher
Cut 10%

Ratio of product waste tosales

Ratio of product waste caused by expiry andother reasons to consolidated sales—

Number of meetings withinvestors and analysts3

Number of meetings with institutional investors
and securities analysts—

Number of internal reports Number of internal reports of incidents received—

Number of unethicalincidents

Total number of incidents in which the violations of the law were found, and disciplinary actions were taken for the violation of the Global
Compliance Code—

Number of information
security trainees2

Number of participants in information security
training (gross)—

Percentage of participants in training using
Participation rate in disastersafety confirmation tool assuming a disaster,
drills2etc. (including employees on long-term leave)—

Risk management

49

Sysmex Report 2022——

Results
Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020—

2,030 hours

—

—

—

0.78

—

—

—

0.05

Cut 12%

Cut 10%Cut 2%

Cut 8%

Cut 8%Cut 2%

Cut 4%Cut 6%

Cut 17%Up 1%

Cut 17%

Cut 25%———

Cut 4%

Cut 14%

Cut 17%

Cut 13%Cut 35%

Cut 8%Cut 7%Up 6%

Cut 7%

89%

76%

67%

78%

—

—

—

Cut 8%

—

—

—

0.6%

—

—

—

506

32

14

11

12

—

9

7

5

—

—

—

2,720

—

—

—

98.7%

Sysmex Report 2022

Activity Report andCorporate Overview—

Corporate Governance—Management Resources andBusiness Activities

24.5 hours

Strategies for Value Creation—

The outcome for fiscal 2021 increased by 6.9 hours compared to the previous fiscal year. Expansion of mission leader training, on-board training,
31.4 hours and online training was carried out in Japan, and specialized education
was enhanced in each division.
We will continue to expand and enhance our employee training in the future.
The outcome for fiscal 2021 increased by 15 hours compared to the previous fiscal year. We were not able to alleviate staff shortages in responseto the COVID-19 pandemic while also taking actions for technologicalinnovation and business restructuring.
2,045 hours In the future, we aim to reduce working hours by introducing a system
to monitor a value-added labor productivity index, in addition to promoting “smart work” system, managing working hours, and conducting
employee training.
The lost-time injury frequency rate increased by 0.13 points for fiscal 2021,
and there were seven industrial accidents (six in the previous fiscal year),
0.91
including injuries in factories. As a measure to prevent industrial accidents,
we held training sessions by industrial physicians to prevent falls.
In order to reduce the lost-time injury frequency rate, we are enhancing
0.04
risk forecast training and will continue to provide training sessions byexternal lecturers in the future.
CO2 emissions per instrument decreased by 14% in fiscal 2021 from theCut 22% previous fiscal year. This reduction was mainly due to increased sales ofpower-saving products and global improvement in CO2 emission factors.
Going forward, we will continue to promote reductions in CO2 emissions
Cut 13% and water consumption by developing and selling new products requiring less electricity and water.
The outcome for fiscal 2021 increased by 24% from the previous fiscal
year. This increase was mainly due to delays in instrument production
due to a shortage of semiconductors and an increase in the use of airtransport in response to a fire at a contracted distribution center.
Cut 1%We are reducing CO2 emissions associated with product transport bypromoting modal shifts and a shift in reagent production from Japan tolocal production sites.
The outcome for fiscal 2021 increased by 13% from the previous fiscal
year. This was due to an increase in product packaging materials (paper
packages) due to growing reagent sales.
Up 9%
We are promoting a reduction in packaging materials by downsizing
boxes to best fit products and changing packing methods.
The Scope 1 and 2 emissions in fiscal 2021 increased by approximately
2% from the previous fiscal year, because CO2 emission factors worsened at our main business locations in Japan, and there was an increasein PCR tests after our CoviLab started operation at the Research andDevelopment Center. CO2 emissions per unit were reduced due to an
Cut 44% increase in consolidated sales.
We continue to promote optimization of our operations and energysaving measures. At the same time, we are strengthening our approachto achieving carbon neutrality by gradually switching the electricity
consumed at our business locations to renewable energy sources.
The outcome for fiscal 2021 increased by approximately 3% from the previous fiscal year due to an increase in production. Water consumption
per unit decreased by 12% due to an increase in consolidated sales.
Cut 19% We are taking actions to reduce water consumption by revising production methods and introducing equipment to optimize the efficiency ofwater usage and using recycled water at each business site.
The recycling rate for fiscal 2021 increased by 1% from the previous fiscal
79%
year. The total volume of waste increased by approximately 11% due to
Cut 15% an increase in PCR tests after starting operation of the CoviLab at our
Research and Development Center, while waste generated per unit
decreased due to an increase in consolidated sales.
We are continuing to take measures to reduce waste and to increase
recycling rates by utilizing recyclable materials and consumables, imple0.6%
menting appropriate inventory management, and extending expiry dates
for reagent products.
Amidst the ongoing COVID-19 pandemic, we continued to have many
meetings with institutional investors and analysts from securities companies. As a result, the number of meetings in fiscal 2021 was at the485
same level as in the previous fiscal year. We will continue to proactively
hold dialogues with them through online meeting and other methods.
There were 14 unethical incidents in fiscal 2021, but none were signifi28
cant violations. A total of 28 internal reports were received in Japan andfrom overseas. We conducted investigations regarding these reports anddealt with each of them appropriately.
14
We conduct training and educational activities for our employees as a foundation to promote and ensure compliance, and provide continuous training
to employees to act in accordance with the Global Compliance Code.
In fiscal 2021, we held e-learning on cyber security in multiple languages
for all our Group employees, as well as temporary employees and independent contractors.
3,601
We provide regular training for employees to strengthen the information
security management structure throughout the Group.
In fiscal 2021, disaster drills and e-learning were conducted.
We continue to enhance our response to risks in business continuity by
98.7%
conducting regular exercises and training, introducing a system to confirm
employees’ safety, and setting out rules and manuals to respond to disasters.

What Sysmex Aims for—

Progress and Future Initiatives

Message—

Fiscal 2021

50

Financial andCapital Strategies(Message from the Executive
in Charge of Finance)

We will invest management resources that
contribute to the advancement of healthcare
and achieve increased corporate value througha cycle of growth and investment.

Kenji Tachibana
Member of the Managing Board andSenior Executive Officer
Senior Managing Director
Corporate Management, Regulatory Affairs &Quality Assurance and DX Strategy Development

51

Sysmex Report 2022

n Major KPIs

Net Sales

Free Cash Flow

Around 20%
Expand reagents and services and support, and improve the costof sales ratio for products
Reinvest in growth by increasing operating cash flow

21.0

20.9

18.3

18.5 (%)
1.0

4.1

2.9
53.1

14.4

44.7

(37.8)

56.8
27.2

58.7 (¥ billion)
23.7

4.6
(40.1)(35.0)(25.9)

2018

Fundamental Financial Policies

2020

2021 (FY)purchases an instrument. Reagents and service and support
are more profitable than instruments, and by expanding testing parameters and working to add higher value to service
and support, we reached a point where these items accounted
for 76.1% of net sales in fiscal 2021. To maintain and reinforce
this highly profitable structure, we will continue working toincrease sales of reagents and service and support and to makethem more profitable. Even with reagents, we benefit from
economies of scale in our mainstay field of hematology. We are
not yet enjoying the same benefits in other fields, so we will
focus on building the scale of testing in non-hematology fields.
Improving the cost of sales ratio is an important themewith regard to increasing profitability. Sysmex manufactures
instruments in Japan to ensure rapid production in conjunction with development, and to maintain high quality.
Although manufacturing in Japan has advantages in terms offunctionality and quality, labor and logistics costs are higher
than overseas production. Therefore, we will continue ourefforts to improve the cost of sales ratio by concentratingon improving production efficiency through automation andseamless linkage with logistics. With regard to improving
labor productivity and increasing the efficiency of indirect
costs, although these items are currently not at problematiclevels, we see them as essential themes for establishing a
profitable structure in the future. Accordingly, we will continue to review DX and business processes.

Activity Report andCorporate Overview

Sysmex Report 2022

Corporate Governance

Sysmex’s business domain, healthcare, has been characterized
by ongoing development of treatment methods and diagnostic technologies over many years. Recent years have seen
the emergence of genomic medicine, regenerative medicine
and other innovative technologies, and pre-symptomatic andpreventive medicine have gained importance. The mission of
Sysmex Group, as set out in our corporate philosophy, the“Sysmex Way,” is “Shaping the advancement of healthcare.”As such, in addition to competing in existing markets, we also
play an important role in creating and developing new markets ourselves, such as in the fields of FCM and life science.
To this end, technology-oriented management with an eye
on the evolution of the healthcare field is essential, and wemust continue to make up-front investments in technology.
Additionally, our sources of funds must continue to increase.
Based on this thinking, Sysmex has set net sales, operating margin, and free cash flow as its major KPIs. We are focused on consistently repeating a cycle of generating doubledigit or higher net sales growth that outpaces market growth,
generating profits such that the operating margin is around20%, and reinvesting cash.
Sysmex's revenue model, which is the basis for this investment cycle, is a stable business model that generates ongoingsales of reagents and service and support after the customer

2019(29.1)

Management Resources andBusiness Activities

2017

27.7

Strategies for Value Creation

Operating cash flow
Investing cash flow
Free cash flow

19.2 (%)

16.4

12.8

52.2

What Sysmex Aims for

Sales growth rate
Operating margin

Augment the portfolio, expand fields and regions,develop new businesses

Message

Operating Margin

Double-Digit Growth52

n Investment in Growth

Cash flow

Investment in Sustainable Growth• Development of instruments and reagents, regulatory approval

R&D(R&D expenses in fiscal 2021: ¥26.7 billion R&D expenses planned for the three yearsof the mid-term management plan: Approximately ¥90.0 billion)

Capital expenditure• R&D, production, IT infrastructure, environmental responsiveness(Capital expenditure in fiscal 2021: ¥33.2 billion, ¥41.8 billion planned for fiscal 2022)• DX of testing, development of digital medicine
Digitalization (DX)
• Renovation of Group business processes through DX(Total investment of ¥29.0 billion in fiscal 2021–2023)

Human resources• Recruitment of highly specialized human resources,
expansion and implementation of education and training

Stronger financial base

M&A

Shareholder returns (Target a payout ratio of 30% or more)

Cash Allocation and Capital Policy
Among the areas for cash allocation are R&D, facilities, DX, human resources, the financial base, M&A, and shareholder returns.
In accordance with its financial policy, Sysmex's growthoriented resource allocation is focused on R&D to support
its growth, production facilities to ensure performance andquality, a service and support network covering more than 190
countries and regions worldwide, and investment in its mostimportant management resource, human capital.
The specific allocation of resources is set according to thestrategy of each mid-term management plan. This mid-term
management plan places particular emphasis on R&D and DX.
R&D investment centers on expenses, mainly to expand
our product portfolio and for expenses for the associatedregulatory approvals in countries around the world. During thethree years of our current mid-term management plan, we anticipate R&D expenses of approximately ¥90.0 billion. (These
expenses totaled ¥63.8 billion in fiscal 2018–2020.) In fiscal
2021, we launched new hematology products in Japan. We
also invested proactively in our three key fields: hemostasis,
immunochemistry, and life science. For instance, in the immunochemistry field, global competitors have a large share of themarket, and market competition is intensifying. Accordingly,
the expansion of unique and competitive testing parameters
will be the key to our advantage in this market. Increasing the53

Sysmex Report 2022

number of testing parameters a single instrument can measure will also boost profitability. Sysmex positions China as animportant market in addition to Japan, and in fiscal 2021, we
began offering 18 new reagents in China, bringing the total
number of reagents to 37. In life science, we also made steadyprogress in the development of tests related to COVID-19.
In the medical robotics business, in 2021 we began the fullfledged introduction in Japan of a robotic assisted surgery
system, and Medicaroid Corporation filed an application to expand regulatory approval to gynecology and gastroenterology.
Going forward, we will make up-front investments to increase
the number of medical departments utilizing this system andpromote its adoption overseas.
In DX, in addition to building an IT infrastructure to improve the efficiency of internal business processes, we are developing a new IT platform, Caresphere. We are promoting DX
through this core platform for our customers by focusing on
investments in AI, big data utilization, and the advancement ofdigital medicine. We expect our DX investments to peak fromfiscal 2022 to fiscal 2023.
Our capital expenditure will go toward DX investment,
the expansion of reagent factories, and the establishment of
R&D bases. In April 2022, we established a new R&D base in
Singapore (RDCAP). As a result, we have developed a global
R&D network that encompasses Japan, the Americas, EMEA,
China and Asia Pacific.

n R&D Expenses/R&D Expenses as a Percentage of Net Sales
R&D expenses
R&D expenses as a percentageof net salesn Capital Expenditure/Depreciation and Amortization
Capital expenditure (both tangible and intangible)
Depreciation and amortization

33.5 (¥ billion)

41.8 (¥ billion)

26.78
21.76

22.51

33.27

30.25
8.2 (%)

6.7

2018

7.2

2019

7.4

2020

27.16
23.95

25.71

2019

2020

32.50

Message

19.57

27.43
25.57

15.84

7.4

2021

2018

2021

2022 (FY)(Planned)

What Sysmex Aims for2022 (FY)(Planned)n Cash Dividends Applicable to the Year / Dividend Payout Ratio (Consolidated)
Cash dividends applicable to the year (figures adjusted for stock split)
Dividend payout ratio

72

70

66

80 (Yen)76

72

Strategies for Value Creation

58

52
38
27
9
6.5
3.125 3.75
5
20.0
18.9
22.6 17.8
17.9

12.5

12
26.8

2002 2003 2004 2005 2006 2007

31.9

15

14
29.4

2008 2009

20

17
27.0

2010

29.1
2011

29.1
2012

27.1
2013

29.6
2014

27.5
2015

29.7
2016

35.1
2017

35.4
2018

43.1
2019

47.1
2020

36.0
(%)

2021

2022 (FY)(Forecast)Management Resources andBusiness Activities

Note: Two-for-one stock splits conducted on November 18, 2005, April 1, 2011 and April 1, 2014.

management to create an environment that makes it easy for
individual employees to draw up career plans.
Through these efforts and improved profitability, we will
work to increase our ROE.
Shareholder returns are based on increasing corporate
value and returning profits to shareholders based on cash
flow growth. To date, we have been striving to continuously
increase dividends with a target payout ratio of 30% or more,
and we will continue to promote a dividend policy that focuseson continued stable dividends.

Corporate Governance
Activity Report andCorporate Overview

As for strategic investments, we will execute M&A withthe primary objective of acquiring new technologies. In
February 2022, we formed a capital and business tie-up with
KAINOS Laboratories, Inc. with a view toward accelerating
growth in the immunochemistry field. In May, we purchased
additional shares in Astrego Diagnostics AB (presently Sysmex
Astrego AB), which possesses antimicrobial susceptibility testing technology, making it a wholly owned subsidiary.
Meanwhile, Sysmex supplies products in more than 190
countries and regions around the world, so it is important
to manage asset liquidity, including inventory turnover andinventory trends for each region. With particular regard toinventory optimization, each overseas site precisely assesses
fluctuations in product demand and links them to production
and supply chain plans, while non-resident inventory is managed centrally in Japan, where we oversee the supply chain.
Investment in human resources includes the acquisitionof highly specialized human resources, the expansion andimplementation of education and training, capital expenditure
to improve the working environment, and DX investment toenhance productivity. Our goal is to increase engagement, create opportunities and an environment in which each employee
can demonstrate their abilities, and build a corporate culture
in which employees can think and grow on their own. In fiscal
2021, we expanded the scope of the job-based HR management system to all employees Japan. We will strengthen talent

Sysmex Report 2022

54

Management Resources andBusiness Activities
Sysmex has built a solid business foundation centered on the IVD business, particularlyin the hematology field. Based on the management resources we have accumulated todate, we will further grow our existing businesses and invest in new businesses to establish growth drivers and strengthen our management base.

55

Sysmex Report 2022

Management Base
Value chain

R&D

Management resources for creating value

R&D
Capabilities>>P59

Production

Distribution

Production andDistribution
Structure

Sales

Services
andsupportAcquiring
cash

Sales andService Structure

>>P61

>>P62

Intellectual
Property

StableFinancial
Foundation>>P67

Diverse Human Resources

Environmental Consideration

Corporate Governance and Risk Management>>P65

Investingin newbusinesses

>>P51

>>P63

>>P71, 75

Reinvesting to strengthen
our management base
Sysmex Report 2022

56

Management Resources and Business Activities

Management
Resources

R&D Capabilities

Production andDistribution
Structure

Sales and Service
Structure

Environmental
Consideration

57

Sysmex Report 2022

Main Growth-Supporting Resources and Issues
In addition to proprietary technologies, through M&A we have acquired
three technology platforms (for cells, proteins, and genes). In order to
respond to rapidly changing technological innovations, we haveestablished a global R&D base centered on Technopark (Kobe), and weengage in joint research with external organizations including universities,
medical and research institutions, and pharmaceutical companies. We aim
to develop and commercialize testing and diagnostic technologies thatoffer high clinical value.

To remain cost competitive on a global scale while maintaining highquality, we have used information and communication technologies tobuild an efficient structure for manufacturing instruments in Japan. At thesame time, we produce reagents on a global scale. We have factories at 14
locations in 10 countries, ensuring a stable provision of reagents tocustomers around the world. We are also working to strengthen our supply
chain management by building relationships with suppliers.

Since our establishment, we have built sales structures tailored toindividual regions, creating trust-based relationships with customers. To
access medical networks in more than 190 countries and regions aroundthe world, we are working to strengthen our sales and service structureand expand our product portfolio, not only by using our own resources but
also by leveraging alliances with global majors and other companies.

We have established a long-term environmental vision and are working to
reduce the environmental burden throughout the value chain. In recent
years, given the importance of promoting integrated company-widemeasures to combat climate change, we have promoted disclosure basedon the TCFD. We have also set the goal of becoming carbon neutral,
reducing greenhouse gas emissions to zero in real terms by 2040, and weare promoting environmental conservation.

Results(as of March 31, 2022)
R&D bases*

22 locationsin 8 countries*As of April 2022

Production bases

7 locations
Reagents, chemical: 8 locations
biological: 6 locations
Instruments:

Sales and service bases

62 locations in 44 countries(Number of affiliated companies)

Area covered

190

More thancountries
and regions

Percentage reduction in CO2emissions from business activities

Cut

44%

(Base year: fiscal 2016)

Main Growth-Supporting Resources and Issues

Percentage of female managers*

17.3%* Employees at director level or above(Entire Group)

Number of patents

298
Trademark applications filed

93
Cumulative free cash flow
over three years¥

78.6 billion

Management Resources andBusiness Activities

Stable Financial
Foundation

We established a highly profitable business model involving the provisionof reagents and service and support in addition to testing instruments.
Leveraging this stable business model, we have invested proactively tobolster competitiveness in existing businesses, in new businesses tosupport our medium- to long-term growth, and in human resources and DX.

60.4%

Strategies for Value Creation

Intellectual Property

In line with our global business development, we actively engage in
intellectual property activities, such as patent and trademark filings incountries around the world to protect our business model, ensurecompetitive advantage, and prevent imitation. We are also working tostrengthen our governance of intellectual property in order to respect the
intellectual property rights of third parties as well as our own rights.

Percentage of employees overseas

What Sysmex Aims for

Diverse Human
Resources

We have acquired diverse human resources through business globalizationand M&A activities. We expect competition for global human resources tointensify. To address this, we will respond to the diversification of work
styles and further enhance our childcare and nursing care support systems
by creating a workplace environment where employees can work withpeace of mind, and introduce and operate a globally consistent humanresource management system.

Results(as of March 31, 2022)

Message

Management
Resources(Fiscal 2019–2021)

Rating (Rating and Investment
Information, Inc.)AA-

Corporate Governance
Activity Report andCorporate Overview

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58

R&D Capabilities to Create High-Value-Added Testing and Diagnostic Technologies
Through the technological expertise and technology platforms we have cultivated since establishment, as well as our R&D bases aroundthe world, we have become more competitive in our existing businesses and are creating new testing and diagnostic technologies.

Related Materiality and Sustainability Target KPIs

Key Progress

Resolution of medical issues through products and services
l Number of cancer genomes analyzed
1.6 thousand (Group companies in Japan)
l Number of breast cancer tests using the OSNA method
54 thousand

We maintained the number of cancer genomes analyzed at the previous
year’s level, and the number of breast cancer tests performed using the
OSNA method increased year on year. Also, market introductions
proceeded steadily. We launched new products in the hematology field, andincreased our immunochemistry reagent parameters in China.

Provision of High-Value-Added Products andServices Leveraging Technologies Related to
Instruments, Reagents, and IT
Since its establishment, Sysmex has acquired technologies related to instruments, reagents, and IT. By fusing these technologies,
we work to ensure the provision of testing data that is accurate—a critical consideration in testing. These technologies also
allow us to make improvements in response to customers’ needs
and to quickly determine the source of errors when they occur.
In addition to creating new tests and diagnostic technologies, we
provide high-value-added products and services that offer enhanced usability as well as a reduced environmental burden.

To raise laboratory productivity on the instrument front,
we are increasing analyzer processing capacity, providing
transport systems to enable the handling of more samples,and making instruments more compact. In addition to chemical reagents, we are focusing on the development of new
test parameters for bio-reagents, which are produced from
biologically derived substances. On the IT front, we werequick to promote the use of networks in medical settings,
developing our SNCS network in 1999. We began providing theCaresphere network solution in 2018. We are also developing
new applications and services for Caresphere that will increase
the efficiency and quality of testing.

n Value Provided through R&D

R&D Base

Technopark(Japan)Cell measurement technologies
Technologies for analyzing the number andtype of cells in blood and urine and facilitating
the analysis of intracellular information

Protein measurement technologies
Technologies for detecting proteins in
the blood swiftly and with a high degreeof sensitivity(Juntendo University)

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Comprehensive
agreement aimed at thedevelopment of new
diagnostics in the field ofdementia (Eisai Co., Ltd.)

Mechanics

Sysmex R&D Center
Americas, Inc. (United States)

FluidsSysmex R&D Center
Europe GmbH (Germany)

R&D Center Asia Pacific(Singapore)

OpticsElectronics

Reagents
Chemistry*Established in April 2022

Others, totaling 22 locationsin 8 countries (As of April 2022)

Open Innovation(universities, medical and research institutions, pharmaceutical companies, and others)
Joint research related toimage analysis using AI
technology in the field ofhematology

Instruments

Wuxi Diagnostic Reagent
Development Center (China)

Gene measurement technologies
Technologies for measuring gene quantities
in cancer cells and enabling the detectionof cancer cell-derived DNA in the blood

Specializations
That Add Value

Global R&D Locations

Three Technology Platforms

Joint development of acancer genome profilingsystem(National Cancer Center Japan)

Development of IT
solutions to support
next-generation healthcare
and diagnostics(OPTiM Corporation)

BiologyIT
SoftwareMessage

Working to Create New Value

What Sysmex Aims for

Sysmex is working to develop and commercialize new diagnostic technologies using three technology platforms thatmeasure cells, proteins and genes. In addition to Technopark,
our hub, we have global R&D bases in Germany, the UnitedStates, China, Singapore and other countries, where we conduct R&D tailored to the needs of each region. To quickly
promote technological development and commercializationin the fast-changing healthcare field, we have also promoted
collaboration with external organizations through M&A, open
innovation and alliances.
By combining newly acquired technologies with thoseused in existing businesses, we aim to create new value that is
unique to Sysmex.

Strategies for Value Creation

Instrumentsl Development of transport systemsl Higher throughput capacityl Greater compactness
l Environmental friendliness throughout the productlife cycle

Reagentsl Development of new testing parametersl Development of concentrated reagents (hematology)
l Development of paper containers for reagents(hematology)

l Establishment of a bio-diagnostics reagent base (2019)l Development of new testing parametersl Creation of synergy within Group companies(HYPHEN BioMed, Oxford Gene Technology, and others)

IT
Sysmexl Began offering the SNCS network service (1999)
l Provision of Caresphere network solution utilizing AI
technologies and ICT (2018)l Moving to online external quality control
l Introduction of virtual training (Sysmex America)n Higher laboratory productivity leading to more efficientmanagementn Reduced patient wait times
n Effective use of laboratory spacen Curtailed medical expenses through more efficient testingn Reduced environmental burden (decreases in electricity
consumption, waste and CO2 emitted during distribution)n Enhancing the quality of healthcare through the creation of new
testing parametersn Decreasing reagent changing frequency and reducing storage
space due to the use of concentrated reagentsn Reduced environmental impact (reduced CO2 emissions duringtransport and contribution to shift away from plastic)n Increased employment at various reagent factories

Activity Report andCorporate Overview

Biological reagents(Hemostasis, immunochemistry, life science)

Value Provided to Stakeholders1

Corporate GovernanceChemical reagents(Hematology, urinalysis)Management Resources andBusiness Activities

Value-Generating Initiativesn Higher quality leading to higher-quality testing datan Enhancing the quality of healthcare through the creation of new
testing parametersn Helping to conserve biodiversity by using alternatives toanimal-derived substances in reagentsn Ensuring the stability of testing datan Configuration of systems to prevent the interruption of testing(breakdown prevention and swift recovery)n More efficient laboratory operations(reduced travel time for product training)n Reducing CO2 emissions due to travel

1 n Value provided to customers (such as medical institutions) n Value provided to society

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60

Production and Distribution System Capable of Achieving High Quality and Stable Supply
As a company that supports healthcare, we have established thorough quality control and a global production system to deliver
high-quality products to the medical field in a timely manner and without interruption.

Related Materiality and Sustainability Target KPIs

Key Progress

Responsible Provision of Products and Servicesl CSR survey response rate (Tier 1 raw material suppliers)

Our CSR survey response rate has been rising steadily. The rate was 81% in
fiscal 2017, and we have reached our fiscal 2023 target of 90%. By utilizing
online methods, the number of supplier training sessions rose by three year
on year, to five sessions.

An Instrument Production System Capable ofAchieving High Quality

A Reagent Production Structure to Support
Stable Supply

Medical settings require accurate test results, so analyzers must
be of the highest quality. For this reason, Sysmex has situatedits factories in the Hyogo prefecture in Japan, which is also its
hub for R&D and service and support. From here, we strengthen
cooperation within the Company and manufacture small lotsof highly varied, high-quality products. To win out in global
price competition, we are increasing production efficiency byintroducing leading-edge manufacturing and quality control
technologies utilizing ICT. In parts procurement, we strive tostrengthen relationships with suppliers by sharing information
on Sysmex’s business direction and procurement policies.

To perform tests, medical institutions require a stable supplyof the reagents they use on a daily basis. We provide a stablesupply of chemical reagents, which are used mainly in thehematology and urinalysis fields. We are promoting local production, and these reagents are produced at eight locations
around the world. We have set up our system so that individual factories can supply each other as needed in the eventof a disaster. In 2019, we established a bio-diagnostic reagent
base in Kobe to produce the biological reagents used in the
immunochemistry and life science fields. We provide a steadystream of high-quality, high-value-added products through an
integrated structure, from the development of reagent substances to their production and distribution.

90%
l Number of training sessions for suppliers
5 (non-consolidated basis)n Major Production Initiatives

Major Initiatives
Instrument
Productionn An efficient production and distribution system that utilizes ICTn Establishment of a knockdown production system that works with

region-specific operations, such as in Chinan Conformance to international standards and obtaining various types ofqualification (quality, environment)

Reagent
Productionn Building a global production systemn Starting operation of a bio-diagnostic reagent base to internalize productionof substances and develop alternatives to animal-derived substancesn Conformance to international standards and obtaining various types ofcertification (quality, environment)

BCP Enacted Due to a Fire at an Outsourced Distribution Center
To maintain a stable supply of products to the medical field, Sysmex has formulated a business continuity plan (BCP) for each function, including manufacturing and procurement, in
anticipation of natural disasters and infectious disease outbreaks such as COVID-19. When afire broke out in 2021 at an outsourced distribution center in Japan to which we had delegated product storage and other functions, we put our BCP into action. Based on the BCP, wetook measures to leverage the overall strength of the entire supply chain, including production and distribution within the Group. As a result, we were able to supply products to ourcustomers without interruption.

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SCM Division members responding to
the fireSales and Service Structure to Realize Global Growth
Through our global sales and service network and by leveraging the strength in branding afforded by our No. 1 share of thehematology market, we are working to capture an even greater market share.

Resolution of medical issues through products and services
55.7%
l Hematology market share
l Sales in emerging and developing markets ¥143.0 billion

Message

Related Materiality and Sustainability Target KPIs

Key Progress
The expansion of our global sales network, among other factors, has led tocontinued growth in our share of the hematology market. Sales in emerging anddeveloping markets increased by more than ¥20.0 billion from the previous
fiscal year, owing to the establishment of a direct sales structure in India and an
overall recovery in the number of tests, which had fallen as a result of COVID-19.

In recent years, regulatory structures have been growing more
stringent in developed countries, and emerging markets havebeen introducing their own systems, so it has become important to gather information and respond swiftly. Sysmex isreinforcing its regulatory affairs and clinical development functions to enable the timely launch of new products and facilitate sales activities. We are achieving business diversificationand strengthening our
response to regulatory trends by enhancing our structures for
product evaluation
on a global basis andcultivating specialized
human resources.

Management Resources andBusiness Activities

The main reason for our global growth has been our ability toanticipate needs and quickly build business bases in individual
regions. We began developing our business globally soon after
our founding. We acquired the largest share of the global
hematology market in 2006, and we have established affiliatedcompanies in more than 40 countries. We are also expanding
our sales network in response to regional characteristics byforming alliances with major global companies and collaborating with local distributors.
In services and support, we use our network solution,
Caresphere, to link to customers’ instruments. This systemfacilitates the analysis of instrument operational logs to help
prevent breakdowns and enable the quality control of testing
data. In this way, we contribute to the efficiency of our customers’ testing operations and quality control.

Strategies for Value Creation

Responding to Increasingly Stringent
Regulatory Systems

What Sysmex Aims for

Sales and Service Network Covering More Than 190
Countries and Regionsn Direct Sales Ratios and Main Initiatives for Sales, Service and Support by Region

Direct Sales Ratio

100%

With a focus on our mainstay hematology field, we are working to develop new markets by expanding ourportfolio in the diagnostics business, providing cancer genomic medicine and other assay services, andexpanding into the medical robotics business.

75% or higher

We are conducting sales activities tailored to the needs of each country by establishing a direct sales
structure in North America and a sales structure utilizing alliances in Central and South America. In the
United States, where medical institutions are scattered over a vast area, we have consistently earned highmarks in customer satisfaction surveys for online training and other service innovation initiatives.

EMEA

70% or higher

In the EMEA region, which comprises more than 100 countries and includes both developed countries and emerging
markets, we have established a sales and service structure tailored to the characteristics of each region. In recent years,
we have been working to further strengthen our structure by establishing local subsidiaries, mainly in the Middle East,
including Egypt and Saudi Arabia, as well as by collaborating with alliance partners and expanding our direct sales area.

China

Approximately
1%

In China, we have established a sales network utilizing numerous local distributors to provide products allover the country in our mainstay hematology field and in the urinalysis, hemostasis, immunochemistry andlife science fields. In services and support, we have established an IoT-based system and regularly holdscientific seminars in Chinese to provide the latest medical information.

AP

50% or higher

In the Asia Pacific region, where economic levels and medical systems differ by country, subsidiaries in eachcountry take the lead in establishing sales and service systems that meet local needs. We also engage inactivities to improve medical standards, such as holding scientific seminars and supporting the quality
control and standardization of testing.

Japan

Americas

Sysmex Report 2022

Activity Report andCorporate Overview

Main Initiatives

Corporate Governance(As of the End of
Fiscal 2021)

62

Environmental Considerations in Our Business Activities
By promoting initiatives to reduce environmental burdens through our business activities, we will fulfill oursocial responsibilities as a company that does business globally, while establishing a competitive advantage inthe market.

Related Materiality and Sustainability Target KPIs
Environmental Consideration
Cut 22%l Reduction of CO2 emissions (instruments)
Cut 1%l Reduction of CO2 emissions (shipping)(Base Year: Fiscal 2016)l Reduction of packaging and labeling materials Up 9%(Base Year: Fiscal 2019)

With protection of the global environment becoming an urgent issue, as a company with global operations Sysmex recognizes that reducing the environmental burden of its businessactivities is a priority.
Climate change is expected to have a significant impact
on the healthcare market. Delays in addressing the issue of climate change will lead to an increase in people suffering fromheat stroke due to rising temperatures. Areas where tropicaldiseases such as malaria and dengue fever are endemic will
expand. Furthermore, air pollution will lead to a rise in respiratory diseases. Such a situation would increase medical costs
and put pressure on medical infrastructures, thereby affecting
the entire healthcare system.
In addition to climate change, other environmental issues
are also involved in Sysmex’s business activities, such as reducing water consumption, promoting recycling, and preserving biodiversity.

Key Progress
CO2 emissions when using instruments decreased due to a rise in sales ofpower-saving products and improvements in global CO2 emissions.
However, the rate of reduction for packaging materials deteriorated due toan increase in the use of packaging materials (paper containers) inconjunction with an increase in reagent sales.

We have formulated the Sysmex Eco-Vision 2025 as along-term guideline for environmental management. We haveidentified “environmental consideration” as a materiality item,
and are promoting measures such as reducing CO2 emissions
and water consumption throughout the product life cycle andpromoting environmentally friendly procurement. We are also
disclosing information in response to the TCFD (Task Force on
Climate-Related Financial Disclosures) recommendations. In
2022, we set the goal of becoming carbon neutral (reducing
greenhouse gas emissions from our business offices to zero inreal terms) by 2040.
It is our social responsibility as a company to promote
such measures. At the same time, we create a competitive
advantage in the market by undertaking unique initiatives. To
help extend healthy lifespans for people around the world, we
will continue to take on the challenge of reducing our environmental burden from a medium- to long-term perspective.

 Long-Term Environmental Objectives (Fiscal 2025)

Reducing CO2
emissions

Reducing water
consumption(Base year: Fiscal 2016)

Promoting resource
circulation

Protecting biodiversity

When using instruments

By 15%

When using instruments

In business activities

By 15%

By 50%

In business activities

When shipping

By 15%

Increase in the recycling rate
in business activities

93% or higher

Expand our portfolio line
using alternatives toanimal-derived substances

By 15%

Response to TCFD Recommendations
In January 2021, Sysmex expressed its support for the TCFD recommendations and disclosed information based on this framework.
We identified climate change risks and opportunities at a management meeting chaired by Sysmex’s chairman and CEO. These are reviewed twice each year by the Environmental Management Committee,
whose officers are the Company’s senior executive officers. The Environmental Management Committee and related departments take the lead in implementing the necessary initiatives for identified risks and opportunities.

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Develop products that help reduce
environmental burdens

Reduce the environmental burden of
production activities

Reduce CO2 emissions from sales,
service and support activities• Power savings, reduced reagent
consumption, etc.

• Use of renewable energy• Lower CO2 emissions and water consumption
through better production efficiency• Utilize online methods(Remote training, webinars, etc.)

Procurement

Production

Sales,
Service andSupportDistribution

CO2 emissions associated with the
shipment of products• Procurement of raw materials and parts that havea lower environmental burden• Conducting CSR surveys• Shift from transport by air to ship
• Promote reagent production transfer tofactories overseas• Penetration of concentrated reagents(including survey items about environmental consideration)

Medicalinstitutions
Achieve lower
environmental burden
for medical institutions• Reduce electricity usedby products• Decrease waste

Strategies for Value Creation

Formulate Green Procurement Standards
and promote green procurement

What Sysmex Aims for

R&D

Message Key Initiatives

n Examples of Initiatives to Decrease Environmental Burden through Business

Enhanced competitive advantage

Management Resources andBusiness Activities

Promote the shift to local reagent production
Sysmex promotes the transfer of reagent production to overseas plants. As a result, we can provide a stable supply to customers,
reduce costs and help reduce CO2 emissions by shortening transportation distances. We have established production bases forreagents used in the hematology and urinalysis fields in eight countries around the world.
New environmentally friendly hematology analyzers
Our new hematology sample transportation system modules that launched in 2021 offer higher processing capacity than previous
models. In addition, they are more compact and feature reduced power consumption.
l Space-saving: 15% reduction in widthl Reduced power consumption by approximately 40%
In addition, one of the modules has a flexible automatic shutdown function. This allows individually selected instruments to be
shut down automatically at night when the number of samples is low, thereby reducing power consumption.

Corporate Governance+Consideration for the environment Reagent with 25 Times Concentration
Reagent volume (L)
100
20L
20L

50

• Less environmental impact• Decreased frequency ofreagent changing• Reduction in storage space

20L

1/25

Activity Report andCorporate Overview

Promote adoption of concentrated reagentsSome instruments in the hematology and immunochemistry fields make use ofreagents that are concentrated to 25 times the level of conventional reagents.
In addition to curtailing CO2 emissions, concentrated reagents are morecompact, so they require less material for containers and packaging, thus
saving resources, and laboratories accordingly generate less waste. We havealso transitioned from conventional polyethylene packaging to paper cartons
to conserve oil resources.
Using concentrated reagents means that reagents need to be replaced
less frequently. This saves storage space and contributes substantially to usability in other ways.

20L

0

20L

4L

Conventional reagent Concentrated reagent

Initiative to Achieve Dry Ice-Free Transportation
Sysmex had been using charter and other special delivery services to transport reagents for genetic testing, demands a high levelof quality and temperature control. However, we faced numerous issues in relation transportation cost, flexibility in logistics,
and efficiency, and we were also considering improvements in the use of dry ice for cold storage. In 2021, Sysmex and Yamato
Transport developed a transportation model that is both ecofriendly and cost effective for the long-distance transportation ofpharmaceuticals and other products at the ultralow temperature range of -70°C without using any dry ice, which was previously
considered essential.

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Diverse Human Resources Supporting Sustainable Growth
Employees with strong aspirations to help solve social issues through business and who have wide-ranging backgrounds areimportant management resources that support sustainable growth, and are a source of strength for Sysmex.

Related Materiality and Sustainability Target KPIs

Key Progress

Realization of an attractive workplacel Percentage of Employees Overseas
60.4% (Groupwide)*l Percentage of Mid-Career Recruits in Managerial Posts
Approximately 40% (Sysmex Corporation)*l Percentage of Female Managers
17.3% (Groupwide)
8.7% (Sysmex Corporation)*l Percentage of Employees with Disabilities
2.31% (Group companies in Japan)

The percentage of female managers has increased, mainly in Japan, due tothe introduction of job-based HR management and “smart work” systems.
The percentage of overseas employees has also continued to rise due tothe promotion of global business development, including the establishmentof direct sales and service systems.

*Indicator other than sustainability target

Efforts to Realize an Attractive Workplace

Promoting Diversity and Inclusion

In recent years, the external environment has changed drastically due to the globalization of economic activities, the progress of digitalization, and a shrinking working population.
Sysmex’s business has grown more global and its portfolio has rapidly become more diverse. As a result, recruiting,cultivating, and continuing to provide an attractive workplace
for personnel with advanced specialties and next-generation
leaders have become an increasingly important issue.
Continuing to develop a work environment in which diverse
human resources with different cultures, beliefs, values, andbackgrounds can respect each other and maximize their abilities, and fostering a corporate culture in which employees canfeel at ease and demonstrate their abilities while maintaining a
sense of global unity, will directly contribute to strengthening
our external competitiveness.

Sysmex embraces diversity and inclusion, which involves creating a positive working environment for diverse human resources, and we promote these activities. One KPI in this areasis the promotion of women’s participation and advancement in
the workplace. While the percentage of female managers at theSysmex Group is 17.3% and rising each year, we need to improve this figure. We do not intend to raise this number hastily,
however. Instead, we will gradually increase the number offemale managers by building a comfortable work environment
and expanding training programs for skill development.
In addition, by creating a workplace where people withvarious sorts of physical, intellectual, and psychological disabilities can work in keeping with their characteristics, we aim
to foster an environment in which everyone, regardless of disability, can work and grow together enthusiastically and withpeace of mind. In Japan, Sysmex Harmony, a special subsidiary,provides assistance at our factories in the production of instruments and reagents. Sysmex Europe works with an organization that endeavors to support the independence of people
with disabilities. The company subcontracts packaging workin the manufacturing line of its reagent factory in Germany tosuch people.

Strengthening Global Human Resource Management
The scope of Sysmex’s overseas operations is growing: overseas sales account for more than 80% of the total and our
percentage of overseas employees exceeds 60%. To support
global business development, at overseas bases we hire andassign local personnel who are familiar with local markets
rather than leading business promotion from Japan. We findthat respecting the culture and values of each country andregion leads to prompt and precise policy development. In
Japan, meanwhile, approximately 40% of Sysmex Corporation's
management personnel are mid-career hires. By utilizing theirbackgrounds and expertise developed in different organizations, these people bring a new sense of values to their work,
thereby strengthening Sysmex's competitive edge.
In human resource management, we are promoting theuse of DX to digitalize many aspects of recruitment, HR development, HR systems, and engagement surveys, as well as tovisualize employee talent information.

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Sysmex Report 2022

 Breakdown of Specializations among R&D Personnel
Liquids

OpticsElectronics

Mechanics

SoftwareEnd of fiscal 2021

Biochemistry

Developmentof HumanResources

Diversity

Personnel
system• Overseas employee ratio• Female manager ratio• Mid-career recruitment
rate

Workplaceenvironment• Visualization of talent
information• Online recruitment/
training• Job matching• Engagement

Competitivenessenhancement
Solutions for
medical issues

What Sysmex Aims for• Job-based HR management system• Rank/evaluation/remuneration system

Digitalization

Supporting diverse
individuals indemonstrating
their abilities

Message• Professional personnel• Investment in humanresource development• Comfortable workplaces• Occupational health and safety

Introducing a New HR System and Enhancing HR
Development to Drive Sustainable GrowthIn fiscal 2020, Sysmex Corporation established a partnership registration system, under which partners insame-sex relationships are recognized as spouses. We
are working to create a safe working environment for
LGBTQ people by providing information to deepen
understanding of sexual minorities.
In 2021, Sysmex Group companies incorporated
rainbow flags into the profile images of their official
social networking accounts (for a limited time) to show
their support for LGBTQ people.

Activity Report andCorporate Overview

Sysmex believes that diversity and a sense of identity will
become more important values in the future, given the increase in the number of Millennial and Gen Z employees.
We have worked to make the workplace more sustainable, as
evidenced by the fact that more than 50% of male employees
at Sysmex Corporation take paid leave for childcare. Even so,
we see a continuing need to facilitate individuals’ own career
choices and working styles based on their sense of values andlife events.

LGBTQ Initiatives

Corporate Governance

Making Work More Comfortable under the New Normal

Management Resources andBusiness Activities

In fiscal 2020, Sysmex Corporation introduced a job-based
HR management system for people in managerial posts. Thissystem determines employees’ ranks based on their roles andwhat their jobs entail. In fiscal 2021, we expanded its application to the general workforce. Going forward, we will implement a grade policy, evaluation system, and human resource
development for all key positions in the Group according to
our Group-wide HR policy, thereby establishing consistentpersonnel management applied to all Group companies
across the globe. With regard to HR development, Sysmex is
implementing a variety of measures in individual regions. For
example we are fostering a sense of unity at business offices
and workplaces and developing the next generation of human resources, based on a Groupwide global human resource
development system.

Based on the Sysmex Declaration of a Healthy Company,
we have introduced a variety of measures in each region tobalance comfortable work environment and improved productivity. In fiscal 2021, Sysmex Corporation introduced a“smart work” system designed to help employees achieve agood work-life balance. The system adopts a hybrid work stylethat combines in-office work with telecommuting from home.
Our overseas Group companies, particularly Sysmex Europe
and other subsidiaries in the EMEA region, have earned external accolades on this front, receiving “Great Place to Work”
awards for their fulfilling work environments and high levels of
employee satisfaction.
Sysmex strives to achieve high productivity and performance and strengthen its corporate competitiveness byenabling a diverse workforce to demonstrate their abilities. At
the same time, we will work to resolve medical issues throughour business.

Strategies for Value Creation

With R&D personnel, our major strength lies in the factthat we have people with diverse and highly specialized knowledge that enables us to develop instruments, reagents, and IT
in-house for our different technology platforms: cells, proteins,and genes.

Changed official social network profile
images to show support for LGBTQ

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Strengthening Global Competitiveness and Supporting Sustainable Growth with Intellectual Property
In addition to strengthening our global competitiveness, we are working to create new value while protecting our technology,
designs, brand, and intellectual property so that customers can use Sysmex products with confidence.

Related Materiality and Sustainability Target KPIs
Resolution of medical issues through products and services
l Number of new patents: 298
l Total number of patents: 3,680

In line with business expansion, we strategically promote patentapplications, centering on hematology. As a result, the number of newpatents increased 3.8% from the previous fiscal year. The number of patentsrose 5.6% year on year, strengthening our global competitiveness.

Intellectual Property Underpinning our Global Development

Governance Related to Intellectual Property

Sysmex has been promoting the acquisition of intellectual
property globally in line with the expansion of its businessdomains and overseas development. As a result, 85% of ourpatents, utility model rights, design rights, and trademarks areheld overseas.
To strategically enhance the competitiveness of our cell,
protein, and gene measurement technology platforms, we holdpatent, utility model, and design rights. This intellectual property centers on Japan, the United States, Europe, and China,
taking into consideration market size, the risk of counterfeit
products, and the state of legal developments related to intellectual property.

Sysmex’s Global Compliance Code stipulates that we respect
the intellectual property of third parties as well as our own.
To comply with and utilize intellectual property laws and topromote our R&D and business, we have introduced a review
system for intellectual property. We strategically promote
intellectual property activities while evaluating our own intellectual property, as well as that of third parties.
We are also working to strengthen governance related
to intellectual property through regular meetings of theIntellectual Property Activities Promotion Committee, which
consists of people from our R&D and business divisions.
Annual intellectual property activities are also summarized
and discussed at meetings of the Managing Board and othermanagement meetings.
In addition, we disclose data on intellectual property activities, such as the number of new patent applications filed andthe number of patents held, as monitoring indicators for oursustainability targets under the mid-term management plan.

 Percentage of Patents Held by Technology Platform
Others 6%
Genes 8%End of fiscal 2021

Cells 55%

Proteins 31%

We work to secure trademark rights globally, including
in emerging and developing markets, to legally protect theSysmex brand and to prevent damage to health stemmingfrom the distribution of counterfeit products. In addition, we
have applied for trademarks for our corporate brand in 193
countries and regions.
 Regions Where We Have Filed for Trademarks, Patents,
Utility Model Rights and Design Rights

Trademarks, patents, utility model rights and design rights
Trademarks, carefully selected patents, utility model rights, and design rights
Trademarks

67

Key Progress

Sysmex Report 2022

Establishing Environments and External
Assessments Related to Intellectual Property
Sysmex is expanding its intellectual property education system for R&D and business divisions, including
training based on work experience and division-specifictraining. We have also enhanced our internal patentaward and bonus systems to stimulate the creationof superior inventions. As a result of such improvements in our intellectual property environment, thisfiscal year in Japan we received the Medal with Purple
Ribbon in our mainstay hematology field. This is thesecond time we have received this award; the first wasin the urinalysis field in fiscal 2018. In June 2022, we
also received a National Commendation for Invention
for the third consecutive year, demonstrating a highlevel of external regard.

Corporate Governance
Sysmex recognizes that reinforcing corporate governance is an important management
issue. Based on the “Sysmex Way,” the corporate philosophy of the Sysmex Group, we
are working to maximize the corporate value of the overall Group by enhancing management soundness and transparency and raising management speed and efficiency.
In our efforts to shore up corporate governance over the years, we have establishedan Audit and Supervisory Committee, enhanced the Managing Board’s supervisory
function through the introduction of outside members, and evaluated the Managing
Board’s effectiveness. We also established a Compliance Committee and an internalreporting system, augmented a Groupwide risk management function, and engaged inother initiatives to strengthen our base with a view to sustainable growth.

Sysmex Report 2022

68

Message from Outside Member of the Managing Board

Hidekazu Fukumoto
Member of the Managing Board (Outside),
Independent Director
Member of the Nominating andCompensation Committees

I will do my utmost to manage the Company so that we can experience
growth together as we work toward the future Sysmex aims to achieve,
laying the steppingstones to the future and engaging in initiatives aimed
at inorganic growth.

My Appointment as an Outside Member of theManaging Board
I was appointed as an outside member of the Managing Board
in June 2021. My involvement with Sysmex goes back morethan a decade, to the time when I was a bank executive. This
involvement made it clear that Sysmex was not a company
satisfied with the status quo. Rather, it was always looking for
new challenges. At that time, even though I was not directly
involved with the Company, I saw it respond to environmental
changes and continue to transform itself on a global scale. My
own motto is to “do things with thought and passion,” and I
see this idea reflected in a corporate culture that focuses onfollowing through on the dreams and vision it has decided
on. My empathy for Sysmex’s values and my expectations forthe value it can provide in the healthcare field caused me to69

Sysmex Report 2022

respond immediately to the request that I serve as an outside
member of the Managing Board.
As an outside member of the Managing Board, I will
utilize my experience and expertise in corporate management, financial and capital strategies, and investment andrisk management to help the Company realize its vision. In
particular, my interest in manufacturing companies has led
me to participate in factory tours and engage in dialogue withhundreds of companies. I will mobilize all of this experience toactively engage in dialogue with Sysmex’s management teamand employees.

Progress and Highlights in Fiscal 2021
Fiscal 2021 was the first year of the mid-term management
plan, and the Company got off to a good start. Despite theStrategies for Value Creation
Management Resources andBusiness Activities
Corporate GovernanceEfforts to Enhance Corporate Value
Healthcare is a domain that commands some of the highestlevel interest, as well as growth potential, for people and society.
Sysmex is leveraging its strengths—such as its “made-inJapan” technologies and quality, its position as a leading company in hematology and other IVD fields, and its globally balanced sales network. In addition, the Company is accelerating
DX and focusing on enhancing corporate value by accelerating
activities in the key fields identified in the mid-term management plan (hemostasis, immunochemistry, and life science),
and through growth in new businesses. This should enable theCompany to provide greater value to society. DX in the healthcare domain itself is an important issue. I look forward to seeing
the Company establish the Sysmex brand globally as the best
healthcare company in the use of digital technology and IT.

Sysmex Report 2022

Activity Report andCorporate Overview

We have made reinforcing sustainability management one of
the key themes of our mid-term management plan. Sysmex
has a sustainability management culture. To solve social issues,
the Company conducts management from a stakeholder-oriented and long-term perspective. Accordingly, it is importantfor Sysmex to make a strategy of continuously strengthening
the PDCA cycle. Currently, specific targets and KPIs are set inlight of each materiality issue, and the Managing Board follows
up on progress.

What Sysmex Aims for

Sustainability Management

In fiscal 2021, the Company made steady progress oneach of its initiatives. I focused particular attention on the
HR aspect, toward “realization of an attractive workplace.”
Progress is being made on the appointment of local management personnel and delegation of authority at overseas locations. These efforts, combined with the Sysmex Way gaining
traction, are leading to the agile responses to the changes in
the operating environment I mentioned earlier. In Japan, thejob-based HR management system has been extended to all
employees, and I think the timing for this is perfect. Goingforward, the Company will also focus on talent management
and the use of human resource information on a global basis.
When I visited Technopark, the Company’s R&D hub in Japan,
I was encouraged to see the willingness of mid-career andyounger employees to work through problems using trial anderror. This fills me with great expectations for the future. One
issue the Company faces is in the area of promoting diversity—specifically the promotion and success of female andnon-Japanese employees. Sysmex has many excellent female
employees at the managerial level, and the Company is doing
its utmost to support them by creating an environment where
they can demonstrate their abilities more than ever before.
On the governance front, succession planning is a challenge, as shareholders and investors have already alluded
to. President Ietsugu is a manager of rare talent, and succession planning is one of the biggest challenges a company
faces. Sysmex has an abundance of candidates with provenmanagement track records in multiple departments, but inorder to nurture the corporate culture and lead growth after
Mr. Ietsugu steps down, we need to accelerate their experience and development. In April 2022, I was appointed to theNominating and Compensation committees. In addition to
expanding the succession plan, we will contribute to the development of candidate personnel through discussions on our
next long-term management strategy and other topics.

Messageongoing impact of COVID-19, Sysmex steadily pursued its
strategies in each field of testing and each region, resulting inrecord-level sales and profits. Each business base responded
adroitly to rapid changes in the operating environment, including the pandemic and growing geopolitical risk and conflict. Asa healthcare company, I feel that Sysmex has a strong belief insustaining healthcare for patients.
On the other hand, we must not forget that these positive
results are the result of efforts to lay foundations and initiatives based on a long-term perspective. In terms of building
global alliances, expanding the direct sales structure, and integrating Sysmex International Reagents, many of the mediumto long-term strategies and investments made to date came tofruition in fiscal 2021.
Taking this perspective, as an outside member of theManaging Board I focus on the seeds for future growth. In
testing, I look forward to developments in immunochemistry
and gene testing. These are areas that are critical to the advancement of healthcare and the growth of Sysmex. A large
gap exists in these fields between global companies andSysmex; how the Company pursues commercialization andmonetization and accelerates growth in these fields will be
crucial. In the medical robotics business, in fiscal 2021 Sysmex
gained recognition in Japan due to its full-fledged launch. From
here, the expansion of applications and global development
will be critical. This is an area where inorganic growth is needed, and the Company faces diverse risks. Nevertheless, Sysmex
intends to steadily develop its business, so we are preparing to
set specific KPIs and milestones and monitor them from various perspectives. We also consider IT and digitalization, which
are still emerging themes, to be priority issues. At the moment, we are focusing on the establishment and maintenanceof DX infrastructure. However, in the future, more than ever,
we will need to have company-wide discussions on the use of
big data, data collaboration with customer testing facilities,
and the development of digital medicine. Digital, AI and image
recognition technologies have the potential to be game changers in the healthcare domain, and we need to acquire and train
more IT personnel and accelerate alliances and collaborations
with other companies.

70Corporate GovernanceManagement Organization

members of the Managing Board, thereby strengthening theboard’s supervisory function. Furthermore, we have introduced
an executive officer system to accelerate decision-making on
business execution and respond swiftly to changes in the business environment.
The Company currently has 12 members of the Managing
Board (of whom five are outside members). Also, three

Sysmex has adopted an Audit and Supervisory Committee.
Managing Board members who are also members of the Audit
and Supervisory Committee have voting rights. This arrangement reinforces the Managing Board’s audit and supervisory
functions, as well as heightening management transparency and objectivity. In addition, we have appointed outside

n Corporate Governance Structure

Shareholders’ Meeting
Election/Dismissal
Managing Board
Members of the Managing Board(Excluding members of the Audit
and Supervisory Committee)

Election/Dismissal
Auditing/
Supervision

Election/Dismissal
Audit and Supervisory Committee

Members of the Managing Board(Members of the Audit andSupervisory Committee)

Cooperation

Internal
Audit OfficeCompensation Committee
Business Execution

Chairman and CEO

Cooperation

Accounting Auditors

Nominating Committee

Internal Control Committee

Global Strategy Committee
Executive Officers
Steering Committee

Accounting
Auditing

Compliance Committee
Divisions,
Subsidiaries and Affiliatesn Advances in Corporate Governance(Fiscal Years)

’04

’05

’06

’07

’08

’09

’10

’11

’12

’13

’14

’15

’17

’18

’19

Term of office formembers of
the Managing Board

From April 2018
System enhancement

One year(Two years for members of the Audit andSupervisory Committee)

Two years

Outside members
the Managing Board

One

Ratio of outside
members of
the Managing Board

14%
From June 1995
One (out of
three serving
corporate officers)

Sysmex Report 2022

11%

Five

Four

30%

33%

41%

From June 2006
Two (out of four serving corporate auditors)

Accounting
standards

712022.4—

From April 2020
Establishment of an Internal
Control Committee
Chief officer system (CEO)Philosophy’21

Executive officer system

Management
organization

Corporate auditors(outside)’20

From June 2016
Company with an Audit and Supervisory Committee

Company with a Board of Corporate Auditors
From April 2005

’16

Japanese GAAPFounding philosophy“Three Aspectsof Confidence”

From April 2016
International Financial Reporting Standards (IFRS)“Sysmex Way,” the corporate philosophy of the Sysmex GroupEffectiveness of the Managing Board
The Managing Board is composed of members having diverse
knowledge, experience, and expertise. We strive to ensure
appropriate diversity and scale, taking into account the overallbalance of the Managing Board.
To enhance the functions of the Managing Board, theCompany conducts a document-based survey of all membersof the Managing Board (including members of the Audit andSupervisory Committee). The Board’s effectiveness is determined on the basis of deliberation by the Managing Boardof the aggregate results. In fiscal 2021, the Board was evaluated highly on many items, indicating that it is functioning
effectively and filling its role appropriately. Meanwhile, theCompany recognizes the need to persevere in initiatives tofurther increase the Board’s effectiveness. We will continue
to regularly evaluate the Managing Board with the aim ofmaintaining and increasing its effectiveness and continuing toenhance our corporate value.

Strategies for Value Creation

Sysmex complies with each of the principles of Japan’s>>Website >About Sysmex >Corporate Governance

What Sysmex Aims forCompliance with Japan’s Corporate Governance CodeCorporate Governance Code, introduced by the Tokyo Stock
Exchange. Please see our website for details.

Messageboard members are members of the Audit and Supervisory
Committee. (Two members of the Audit and Supervisory
Committee are outside members of the Managing Board.) The
Company also has 17 executive officers (of whom five concurrently serve as members of the Managing Board).
In fiscal 2020 we established an Internal Control
Committee tasked with overall internal control and risk management to ensure sustainable growth and enhance corporate
value over the medium to long term. This arrangement will
promote the systematic preparation, operation, and monitoring of internal controls, while taking a bird’s-eye view of theoverall Group.
We have also established a Nominating Committee (aManaging Board advisory body involved in executive appointments) and a Compensation Committee (a Managing
Board advisory body involved with decisions on executive
compensation). From fiscal 2022, the majority of members onthese committees are independent outside members of theManaging Board.

n Major Boards
Organization

Function and Content

Meetings Heldin Fiscal 2021

Composition

Deliberating on important matters related to management Members of the Managing Board
Chairman and CEO, members of theNominating
A Managing Board advisory body involved in executive
Managing Board (2), outside members ofCommittee
appointments
the Managing Board (4)Chairman and CEO, members of theCompensation
A Managing Board advisory body involved with decisions
Managing Board (2), outside members ofCommittee
on executive compensation
the Managing Board (4)Audit and Supervisory Independent institution for auditing the execution ofMembers of the Audit and Supervisory
Committee
operations, mainly by members of the Managing Board
Committee
Chairman and CEO, senior execuGlobal Strategy
Deliberating on and discuss medium- to long-term Group
tive officers, member of the Audit andCommittee
management directions, important strategies and issues
Supervisory Committee* (1)Chairman and CEO*, executive officers,
Discuss, deliberate on and report on projects that are
Steering
important from the perspective of making progress on the member of the Audit and Supervisory
Committee
Committee (1)Group’s fiscal yearly plan

15

Management Resources andBusiness Activities

Managing Board

2
1
17
13

Corporate Governance17* Participates as an observern Members of Major Boards (As of June 24, 2022)
Board
Name

External

Rate of Attendance at
Meetings of the Nominating
Committee

Rate of Attendance
at Meetings of theCompensation Committee

Rate of Attendance at
Meetings of the Audit andSupervisory Committee

100%
100%
100%
100%
100%
100%
—1
100%
100%
100%
100%
100%
100%

100%
100%
100%
—
—
—
—
—
—
—3
—3
—3
100%

100%
100%
100%
—
—
—
—
—
—
—3
—3
—3
100%

—
—
—
—
—
—
—1
100%
—
—
—
100%
100%

Activity Report andCorporate Overview

Internal

Hisashi Ietsugu
Kaoru Asano
Kenji Tachibana
Iwane Matsui
Hiroshi Kanda
Tomokazu Yoshida
Tomoo Aramaki
Yukitoshi Kamao2
Masayo Takahashi
Kazuo Ota
Hidekazu Fukumoto
Kazumasa Hashimoto
Michihide Iwasa

Rate of Attendance at
Meetings of the Managing
Board

Note: Rates of attendance are for fiscal 2021. 1 Member from June 2022 2 Stepped down in June 2022 3 Member from April 2022

Sysmex Report 202272

conducted appropriately, taking into account the objective andrational opinions of outside members of the Managing Board.

n Overview of Evaluation of Effectiveness(Composition)
The scale of the Managing Board and the ratio of outside
members of the Managing Board are generally appropriate,both in nature and level of experience. To further enhance
the Managing Board’s effectiveness, in addition to achieving abalance between knowledge, experience and capabilities theCompany will continue to consider ensuring diversity, including such facets as gender and internationality, career history,
and age.
(Operation)
The provision of information necessary to fully discuss theManaging Board’s agenda is generally appropriate. To further
improve effectiveness, the Company is continually working to
improve the Managing Board’s operation by providing advance
explanations to outside members of the Managing Board andproviding related information necessary to understand thebackground. We hold opinion-exchange meetings attended
solely by outside members of the Managing Board and engage
in initiatives to invigorate deliberations. We made progress
during the year on the earlier provision of materials, which wasraised as an issue the previous year.
(Status of Agenda and Deliberation)
The time for addressing and deliberating the Managing Board’s
agenda is appropriate, and we strive to provide individual
members of the Managing Board with an understanding ofagenda items and information prior to meetings, as well as toleverage their knowledge and experience to engage in deliberation. Decision-making on items of management importance isn Major Managing Board Agenda Items and Reporting Items (Fiscal 2021)l Appointments and dismissals of members of the Managing
Board, compensation-related matterslR eports on the status of business execution by members of theManaging Boardl Evaluation of the Managing Board’s effectivenesslA udit policy, audit plan, and audit implementation report(members of the Audit and Supervisory Committee)
l Corporate governance policyl Matters related to the Group’s internal control
l Matters related to sustainabilitylG roup operating performance; quarterly, semiannual, and annual resultsl Matters related to promoting digitalization in the Groupl Matters related to significant investment projects

Effectiveness of the Audit and Supervisory Committee
Members of the Audit and Supervisory Committee attend
important meetings, such as meetings of the Managing Board;browse approval documents; audit subsidiaries; exchange
opinions with members of the Managing Board and conduct
other activities to confirm the status of business execution bymembers of the Managing Board.
The Audit and Supervisory Committee conducts audits using
the Company’s internal control system and other methods. The
committee works closely with the accounting auditors to confirm

n Skill Matrix for Members of the Managing Board (As of June 24, 2022)
Name

Internal
External

Hisashi Ietsugu
Kaoru Asano
Kenji Tachibana
Iwane Matsui
Hiroshi Kanda
Tomokazu Yoshida
Tomoo Aramaki
Masayo Takahashi
Kazuo Ota
Hidekazu
Fukumoto
Kazumasa
Hashimoto
Michihide Iwasa

GenderYear

Initialappoint- Independent Corporate Management
manage- and business
ment
ment
planning

M
M
M
M
M
M
M
F
M

1949
1958
1957
1961
1957
1964
1966
1961
1955

1986
2014
2014
2019
2019
2021
2022
2016
2019

M















¡






1955 2021

¡





M

1953 2020

¡





M

1956 2020¡

Knowledge and experience
GlobalResearch Production/
Sales and anddevelservice
SCM
opment

IT/DX










Human
Finance/ resources/
account- generaling
affairs











































Note: The above represents the main skills and experience of each Member of the Managing Board and does not represent all skills and experience.

n Definition of skills and experience
Item

Definition

Corporate
management
Management andbusiness planning
GlobalManagement experience as a representative, executive director, executive officer, etc. at a company, organization, etc.
Experience and knowledge of management planning, business strategy, planning, promotion, etc. as a practicing,managing, or executive officer in charge, etc.
Experience of overseas assignment
and knowledge of domestic and overseas sales, marketing, technical services, etc. as a practicing,
Sales and service Experiencemanaging, or executive officer in charge, etc.
Research andExperience and knowledge of technology strategy, technology and product development, IT development, inteldevelopment
lectual property, etc. as a practicing, managing, or executive officer in charge, etc.
and knowledge of production, procurement, logistics, quality, etc. as a practicing, managing, or execuProduction/SCM Experience
tive officer in charge, etc.
IT/DX
Experience and knowledge of IT/DX, etc. as a practicing, managing, or executive officer in charge, etc.
Finance/
Experience and knowledge of accounting, finance, business administration, etc. as a practicing, managing, or
accounting
executive officer in charge, etc.
Human resources/ Experience and knowledge of human resources, labor affairs, human resources development, diversity, legal afgeneral affairs
fairs, compliance, etc. as a practicing, managing, or executive officer in charge, etc.
Note: Judgment is made based on whether or not the Member of the Managing Board has a total of about three years of experience in each of the items stated on the left.

73

Sysmex Report 2022

for the Chairman, President, and CEO to hold shares worth
five times his fixed compensation, and for other membersof the Managing Board and executive officers to hold sharesworth twice their fixed compensation, holding the acquired
shares during their terms of office. As of March 31, 2022, theChairman and CEO held 613,000 shares (104 times his fixedcompensation), and other members of the Managing Boardand executive officers (those who hold shares) held an averageof 17,000 shares (8 times their fixed compensation).

Executive Compensation
Compensation for members of the Managing Board makes aclear link between operating performance and responsibility
for achievements. Compensation for members of the managing Board (excluding members of the Audit and Supervisory
Committee and outside members of the Managing Board) is
divided into three broad categories: fixed compensation, performance-linked compensation, and non-monetary compensation.
Fixed compensation comprises compensation for members of the Managing Board and compensation for businessexecution. Position-specific factors (related to the scale andresponsibility of members of the Managing Board, as well as
the degree of their impact on Group management) are used todetermine disbursements. Performance-linked compensation
is linked to consolidated operating performance for the Group,
using profit attributable to owners of the parent as an indicator. This indicator refers to net earnings for the consolidated
fiscal year (sales net of expenses and profit or loss), which theCompany considers an appropriate indicator for performancelinked compensation. As non-monetary compensation, Sysmex
encourages officers to acquire Company shares. Sysmex’s aims
are to enhance corporate value from a shareholder perspective,
boost the incentive to enhance corporate performance over the
medium- to long-term, and augment personnel retention.
A certain portion of fixed compensation for members of
the Managing Board and executive officers is applied toward
the purchase of the Company’s stock. The Company aims

Messagethe accounting audit plans and results and internal controls related
to financial reports, exchanging information and opinions.
Principal matters considered by the Audit and Supervisory
Committee in fiscal 2021 included the appropriateness of audit
policies and plans, preparation and state of operation of theinternal control system, and methods and results of audits by
the accounting auditors.

>>Shares Held by Individual Directors P79

What Sysmex Aims forCompensation for members of the Managing Board whoare members of the Audit and Supervisory Committee andoutside members of the Managing Board comprises fixedcompensation only.
The Managing Board has delegated to the Chairman and
CEO the task of determining individual compensation andspecific details of compensation for members of the Managing
Board (excluding members of the Audit and Supervisory
Committee). The Managing Board confirms the appropriateness of the process for determining officer compensationand compensation amounts via the Audit and Supervisory
Committee. This committee has three members (of whom two
are outside members of the Managing Board).

Strategies for Value Creation

ComplianceManagement Resources andBusiness Activities

Based on the corporate philosophy of the Sysmex Group, the“Sysmex Way,” we defi ne our view of compliance as “conducting business activities not only in compliance with applicablelaws and regulations, but also based on fairness and high ethicalstandards.” We have established a Global Compliance Code, inwhich particularly important conformance rules and behavioral
guidelines for all Group executives and employees to abide by
are set out, and we conduct training and work to instill this code.
>>Sustainability Data Book >Compliance P52

n Breakdown of Executive Compensation
Compensation for members of the Managing Board(excluding members of the Audit and Supervisory Committee and outside members of the Managing Board)• Compensation for membersof the Managing Board• Compensation forbusiness execution

Non-monetary compensation: 16%

Performance-linked compensation: 57%• Compensation as a medium- to long-term incentive(Company shares purchased in specific monthly amounts
through an oﬃcer shareholding association system)• Other share compensation (such as stock options)

Position-specific factors (related to the Performance-linked compensation amounts are multiplied by ascale and responsibility of members of variable compensation factor within 3% of profit attributable to
the Managing Board, as well as theowners of the parent to determine the total amount of variable
degree of their impact on Group
compensation, which is disbursed on an individual basis in
management) are used to determine
accordance with success.
disbursements.
Note: A certain portion is applied toward
the purchase of Company stock.

Standards for
Payment

Corporate Governance

Fixed compensation: 27%

Share purchase amounts or numbers of shares are
based on position-specific factors (related to thescale and responsibility of members of the Managing
Board, as well as the degree of their impact onGroup management).

Members of the Audit and Supervisory Committee and outside members of the Managing Board
Fixed compensation: 100%n Actual Executive Compensation (Fiscal 2021)

Activity Report andCorporate Overview(Compensation for members of the Managing Board only)(Millions of yen)Amount of compensation by type
Fixed
Performance-linked
Non-monetarycompensationcompensationcompensation

Total
compensation

Executive category

Members of the Managing Board (excluding members of the Audit and Supervisory Committee andoutside members of the Managing Board)
Members of the Audit and Supervisory Committee(excluding outside members of the Managing Board)
Outside members of the Managing Board

698

191

395

111

8

24

24

—

—

1

34

34

—

—

5

n Executives Receiving Total Compensation of ¥100 Million or MoreName

Executive category

Company category

Hisashi Ietsugu

Member of theManaging Board

Submitting
company

Number of
executives receiving
compensation(Millions of yen)Amount of compensation by typeNon-monetary
Fixed Compensation Performance-linked
Compensationcompensation

52

131

27

Total compensation

211
Sysmex Report 2022

74

Risk Management

Our Perspective on Operating Risks
Sysmex is responsible for the steady provision of products andservices to customers in more than 190 countries and regions
around the world, ensuring that testing operations (which areessential to healthcare) are not interrupted. For that reason,
we have formulated countermeasures from a short- to longterm perspective to ensure that operations continue under
any circumstances. In addition to natural disasters and geopolitical risks, we consider increasingly stringent healthcare
restrictions in individual countries, the emergence of productquality issues, and information leaks to be important risks. Risk

management also supports our ongoing growth. By responding swiftly in a rapidly changing operating environment, we
strive to earn the support of our stakeholders and to maintainor increase our position in the market.

Risk Management Structure
Sysmex established the Internal Control Committee to promote all risk management activities, including strategic risks.
The committee is chaired by the president and CEO, and its
members include relevant executive officers and Audit andSupervisory Committee members (excluding outside members

n Principal Operating Risks
Risks

Major Content

The spread of infectious disease or emergence of other  T he impact on operations of global pandemics such as COVID-19 andother unknown infectious diseases
risks that could substantially affect business activities

Disaster, severe accidents, geopolitical problems orother occurrences that disrupt product supply

Exchange rate fluctuations
Acceleration of healthcare system reforms

75

D amage to manufacturing facilities and the stoppage of production
activities due to severe accidents, such as natural disasters and fires Obstacles to the procurement of substances if suppliers suspend operations Suspension of distribution and stoppage of production activities due togeopolitical issues
O verseas business accounting for more than 80% of total Group sales
G rowth in sales in emerging and developing markets leading to ahigher proportion of sales taking place in non-key currencies
 Intensifying competitive environment due to efforts by governments
and medical institutions to optimize medical expenses

Key Environmental
Factors

External

External

External
External

Growing difficulty of obtaining regulatory approval due
to increasingly stringent healthcare laws and restrictions,  D
 elayed product launches due to longer approval periods
as well as the introduction of independent regulations

External

Revisions to our business model due to changes in theH ematology field accounting for a high percentage of sales and profits
market environment

Internal

Emergence of quality problems related to products orservicesM ajor impact on test results

Internal

Risks related to intellectual property rights

 Intellectual property disputes arising from infringement by third parties of intellectual property rights held by the Company or unexpected
infringement of intellectual property rights held by third parties

Internal

Information security risks

 Impact on operations due to information leaks such as cyber threats
and network breakdowns
N etwork failure in a customer’s facility due to cyber-attacks via the
Company’s productsInternal

M&A-related risks

 Impact on strategies and operating performance if the results of M&A
fall below expected levels

Internal

Compliance infringements

C ompliance infractions of laws and regulations

Internal

Sysmex Report 2022

Message
Strategies for Value Creation

Main Impacts if Risks Materialize

and supply products to our customers without interruption.
We are also working on the information security front toensure that our products can be used with peace of mind. In
addition to strengthening internal measures, we have established the Product Security Incident Response Team (PSIRT) to
prevent information leaks and cyber-attacks via Sysmex products used at customer facilities. In addition, we are reinforcing
our diversification of risk by ensuring stable inventories andusing multiple distribution bases.
We will continue to provide a BCP response that demonstrates the Group’s comprehensive strength and ability
to execute.

What Sysmex Aims forof the Managing Board). Outside members of the Managing
Board serve as observers.
We have formulated a business continuity plan (BCP) to
ensure the stable supply of products and services to medical
institutions and the stable operation of Sysmex products at
medical institutions, if risks such as disasters and cyber threatsmaterialize. The BCP involves the establishment of regulations
and manuals for responding to crises, and identifies important
products to be given supply priority.
In fiscal 2021, a fire broke out at a warehouse in Japan towhich we outsource product storage and other operations. Basedon our BCP, we were able to respond swiftly and appropriately

Principal Responses

Corporate Governance

Lowered ability to capture market opportunities and increasing cost of response

Management Resources andBusiness Activities Halt of business operations due to enormous damage to e have configured a global risk management structure (such as reinforcing ourGroup facilities and infrastructure, or injuries to people  WBCP) aimed at reducing damage and facilitating an early recovery of business Deterioration of operating performance and cash flow
activities.
due to a halt in medical institutions’ operations andW e have built an infrastructure capable of responding flexibly to emergencies
decreasing testing demand(such as by introducing remote working).
 Substantial downturn in productivity due to difficulty e prevent infections from spreading by building testing structures involving thein continuing or maintaining human resources and the  Wdevelopment and sale of reagents and opening of labs to provide assay services.
working environment We have introduced seismically isolated structures at instrument factories,
diversified our reagent production function globally, and created a system ofSuspension of product supply leading to a decline in sales
mutual supply.
and an inability to fulfill our supply responsibilities, leading
to a decline in corporate valueW e procure materials and parts from multiple companies and maintain stockpiles.
We also conduct CSR surveys of our business partners.
 F inance divisions and local subsidiaries minimize risks through forward exchange
Worsening of the Group’s consolidated operating
contracts.
performance e have globally diversified our reagent production functions.
W
Loss of market acquisition opportunities and increasedW e provide highly productive products and services that help make healthcare
price pressure
management more efficient.
 T he regulatory affairs division and local subsidiaries remain abreast of new laws
and regulations, and configure optimal systems.

Halt of business activities and a decrease in corporate
creditworthiness

Worsening of the Group’s consolidated operating performance and review of business strategies
Halt of business activities and a decrease in corporate
creditworthiness

Activity Report andCorporate Overview

W e are expanding our business portfolio outside of hematology and into suchfields as hemostasis and urinalysis.
Worsening of the Group’s consolidated operatingW e provide products and services that meet the needs of countries and regions
performancewith weak medical infrastructures.
W e are accelerating development by establishing drives of growth.
W e comply with individual countries’ laws and regulations, as well as international
restrictions, and we have created structures for maintaining and enhancing quality.
Increasing cost of response and decline in corporate cred-  W
 e have enhanced our operational and design quality, bolstered mass-production
itworthiness and brand power
quality, and reinforced our systems for checking quality prior to market launch.
W e hold supplier presentations aimed at increasing the quality of the materials
and parts we procure.
 Decrease in market share and brand strength due toW e conduct thorough intellectual property training, particularly for employees inoutflows of in-house technology
R&D and business divisions.
 Litigation costs and compensation for intellectual prop-  W
 e work to reduce the likelihood of third-party intellectual property disputes.
erty disputes
W e have alternative network routes and have implemented routine system administration procedures.
W e are implementing mechanisms for detecting unauthorized communications
and isolating malware.
W e monitor 24 hours a day.
W
 e have established the Computer Security Incident Response Team (CSIRT).
W
 e have established the Product Security Incident Response Team (PSIRT).
W
 e educate our employees.
W e conduct thorough prior audits, both of the market environment and from afinancial perspective.
 e configure administrative structures for management and finance.
WW e provide comprehensive employee education.
W e have put in place a global internal reporting system.

Sysmex Report 2022

76

Members of the Managing Board

Kaoru Asano

Hisashi Ietsugu

Kenji Tachibana

Member of the Managing Board andSenior Executive Oﬃcer
Senior Managing Director, CTO
R&D, Incubation and MR Business

Chairman and CEO

Member of the Managing Board andSenior Executive Oﬃcer
Senior Managing Director
Corporate Management,
Regulatory Aﬀairs & Quality Assurance
and DX Strategy Development

Hiroshi Kanda

Iwane Matsui

Tomokazu Yoshida

Member of the Managing Board andSenior Executive Oﬃcer
Managing Director
Business Strategy Development

77

Sysmex Report 2022

Member of the Managing Board andSenior Executive Oﬃcer
Managing Director
Global Marketing

Member of the Managing Board
and Senior Executive Oﬃcer
Managing Director
R&D, Incubation and
MR BusinessMessage
What Sysmex Aims for

Hidekazu Fukumoto

Member of the Managing Board(Outside)
Independent Director

Member of the Managing Board(Outside)

Member of the Managing Board(Outside)
Independent Director

Kazumasa Hashimoto

Tomoo Aramaki

Michihide Iwasa

Management Resources andBusiness Activities

Masayo Takahashi

Strategies for Value Creation

Kazuo Ota

Corporate Governance
Activity Report andCorporate Overview

Member of the Managing Board(Outside)(Member of the Audit and Supervisory
Committee), Independent Director

Member of the Managing Board(Member of the Audit and Supervisory
Committee)

Member of the Managing Board(Outside)(Member of the Audit and Supervisory
Committee), Independent Director

Sysmex Report 2022

78

Members of the Managing Board (As of June 24, 2022)
Hisashi Ietsugu (born 1949)
Chairman and CEO
Number of Company shares held: 613,600

Sep. 1986 Joined the Company, Member of theManaging Board
Mar. 1990 Member of the Managing Board andSenior Executive Officer, Managing
Director
Feb. 1996 Member of the Managing Board andSenior Executive Officer, Managing
Director (Representative Director)
Apr. 1996 Member of the Managing Board andSenior Executive Officer, Senior
Managing Director (Representative
Director)
Jun. 1996 President and CEO
Apr. 2013 Chairman and CEO (current)(Important concurrent position)
Chairman of the Kobe Chamber of Commerceand Industry

Kaoru Asano (born 1958)
Member of the Managing Board andSenior Executive Officer
Senior Managing Director, CTO

Kenji Tachibana (born 1957)
Member of the Managing Board andSenior Executive Officer
Senior Managing Director

R&D, Incubation and MR Business
Number of Company shares held: 53,100

Corporate Management, Regulatory Affairs &Quality Assurance and DX Strategy Development
Number of Company shares held: 36,700

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
Jun. 2014 Member of the Managing Board andSenior Executive Officer
Apr. 2015 Member of the Managing Board andSenior Executive Officer, Managing Director
Apr. 2017 Member of the Managing Board andSenior Executive Officer, Senior
Managing Director
Apr. 2018 Member of the Managing Board andSenior Executive Officer, Senior Managing
Director, COO LS Business Unit and CTO
Apr. 2021 Member of the Managing Board andSenior Executive Officer, Senior
Managing Director, CTO (current)

Mar. 1980 Joined the Company
Apr. 1998 President of Sysmex Singapore Pte Ltd.
(presently Sysmex Asia Pacific Pte Ltd.)
Apr. 2011 Executive Officer, Executive Vice
President of IVD Business Development
Apr. 2013 Senior Executive Officer
Jun. 2014 Member of the Managing Board andSenior Executive Officer
Apr. 2015 Member of the Managing Board and Senior
Executive Officer, Managing Director
Apr. 2017 Member of the Managing Board andSenior Executive Officer, Senior
Managing Director
Apr. 2018 Member of the Managing Board andSenior Executive Officer, Senior Managing
Director, COO IVD Business Unit
Apr. 2021 Member of the Managing Board andSenior Executive Officer, Senior
Managing Director (current)(Important concurrent position)
President of Medicaroid Corporation

Reasons for Appointing

Reasons for Appointing

Reasons for Appointing

Holding the positions of Chairman and CEO of
the Company, he has managed all of Sysmex andprovided strong leadership for many years. He
was appointed because he will be essential forincreasing the corporate value with his sense ofbalance, enabling appropriate supervision anddecision-making of the entire management
based on his insight and abundant experienceand achievements as a corporate manager.

He has been involved in research andtechnology development for many years and has
contributed to business development. He wasappointed because leveraging his experienceand insight in new R&D will be essential forincreasing corporate value.

He has been involved in business strategy
development and international businesses andhas contributed to strategic and global businessdevelopment. He was appointed because he willbe essential for increasing corporate value
through the growth of businesses.

Iwane Matsui (born 1961)
Member of the Managing Board andSenior Executive Officer
Managing Director
Global Marketing
Number of Company shares held: 2,500

79

Hiroshi Kanda (born 1957)
Member of the Managing Board andSenior Executive Officer
Managing Director

Tomokazu Yoshida (born 1964)

Business Strategy Development
Number of Company shares held: 62,800

R&D, Incubation and MR Business
Number of Company shares held: 1,400

Member of the Managing Board andSenior Executive Officer
Managing Director

Apr. 1985 Joined the Company
Jul. 2001 President of Sysmex Europe GmbH(presently Sysmex Europe SE)
Apr. 2011 Executive Officer, Executive Vice
President of Corporate Business Planning
Apr. 2013 Executive Officer, Executive Vice
President of International Business
Management
Apr. 2017 Senior Executive Officer
Apr. 2019 Senior Executive Officer, Managing Director
Jun. 2019 Member of the Managing Board andSenior Executive Officer, Managing
Director (current)

Mar. 1980 Joined the Company
Apr. 2004 Chairman of Sysmex Shanghai Ltd.
Apr. 2013 Executive Officer, ICH Business Unit andExecutive Vice President of Hemostasis
Product Engineering Development
Apr. 2017 Senior Executive Officer
Apr. 2019 Senior Executive Officer, Managing
Director
Jun. 2019 Member of the Managing Board andSenior Executive Officer, Managing
Director (current)

Jun. 2000 Joined the Company
Apr. 2017 Executive Officer, Executive Vice
President of Central ResearchLaboratories and MR Business
Development
Apr. 2020 Senior Executive Officer
Apr. 2021 Senior Executive Officer, Managing
Director
Jun. 2021 Member of the Managing Board andSenior Executive Officer, Managing
Director (current)

Reasons for Appointing

Reasons for Appointing

Reasons for Appointing

He has been involved in promoting businesses
such as domestic and international sales andmarketing serving as a sales manager fordomestic sales and as a representative ofoverseas regional headquarters of the Group formany years, and has contributed to global
business development. He was appointed
because his abundant experience andwide-ranging insight will be essential forincreasing the corporate value of the Group.

He has been involved in promoting businesses
such as product planning and market
development of the Group for many years andhas contributed to global business development.
He was appointed because his abundant
experience and wide-ranging insight will beessential for increasing the corporate value of
the Group.

He has been involved in research andtechnology development for many years and has
contributed to business development. He wasappointed because his abundant experience andwide-ranging insight will be essential forincreasing the corporate value.

Sysmex Report 2022

Masayo Takahashi (born 1961)

Kazuo Ota (born 1955)

Hidekazu Fukumoto (born 1955)

Member of the Managing Board (Outside)

Member of the Managing Board (Outside)
Independent Director

Member of the Managing Board (Outside)
Independent Director

Number of Company shares held: N/A

Number of Company shares held: N/A

Number of Company shares held: N/A

Reasons for Appointing

Reasons for Appointing

She was appointed to utilize her abundant
experience and deep insight relating toadvanced medical research, medical ethics andother fields as a clinician and researcher for
management of the Company.

He was appointed to utilize his abundant
experience and deep insight in corporate
management for management of the Company.

He was appointed to utilize his knowledge on
finance, financial accounting, risk management,
as a corporate manager of a financial institution,
as well as his abundant experience and deep
insight in the business world.

Tomoo Aramaki (born 1966)
Member of the Managing Board(Member of the Audit and Supervisory
Committee)

Kazumasa Hashimoto (born 1953)
Member of the Managing Board (Outside)(Member of the Audit and Supervisory
Committee), Independent Director

Michihide Iwasa (born 1956)
Member of the Managing Board (Outside)(Member of the Audit and Supervisory
Committee), Independent Director

Number of Company shares held: 3,000

Number of Company shares held: N/A

Number of Company shares held: N/A
Apr. 1979 Jointed Kobe Steel, Ltd.
Apr. 2009 Senior General Manager of Raw Materials
Purchasing Department of Kobe Steel,Ltd.
Apr. 2010 Executive Officer of Iron & Steel Businessof Kobe Steel, Ltd.
Apr. 2012 Managing Executive Officer of Iron &Steel Business of Kobe Steel, Ltd.
Jun. 2014 Representative Director and President ofKobelco Logistics, Ltd.
Jun. 2020 Senior Advisor of Kobelco Logistics, Ltd.
(current)
Jun. 2020 Joined the Company, Member of theManaging Board (Outside) (Member ofthe Audit and Supervisory Committee)(current)

Reasons for Appointing

Reasons for Appointing

Reasons for Appointing

He has long been involved in the businessadministration department and has also served as
the head of the business administration
department of the Company’s overseas subsidiaries.
He was appointed to utilize his abundant
experience and insight, which is necessary toincrease the audit and supervisory functions.

He was appointed to utilize his abundant
experience and deep insight into corporate
management as a corporate manager of afinancial institution.

He was appointed to utilize his abundant
experience and deep insight into corporate
management for audits of the Company.

Sysmex Report 2022

Activity Report andCorporate Overview

Apr. 1976 Joined Sumitomo Bank (presently
Sumitomo Mitsui Banking Corporation)
Apr. 2004 Executive Officer of Sumitomo Mitsui
Banking Corporation
Apr. 2007 Managing Executive Officer of Sumitomo
Mitsui Banking Corporation
Jun. 2010 President and Representative Director ofGinsen Co., Ltd.
Jun. 2014 President and Representative Director,
and Chief Operating Officer of Kansai
Urban Banking Corporation (presently
Kansai Mirai Bank, Limited)
Jun. 2016 Chairman of the Board, President andRepresentative Director of Kansai Urban
Banking Corporation
Apr. 2018 Representative Director and President of
Kansai Mirai Financial Group, Inc.
Apr. 2019 Chairman of Kansai Mirai Bank, Limited.
(current)
Jun. 2019 Outside Corporate Auditor of THE
ROYAL HOTEL, LIMITED (current)
Jun. 2020 Joined the Company, Member of theManaging Board (Outside) (Member ofthe Audit and Supervisory Committee)(current)

Corporate Governance

Apr. 1989 Joined the Company
Apr. 2019 Executive Vice President of the Business
Administration of the Company
Jun. 2022 Member of the Managing Board(Member of the Audit and Supervisory
Committee) (current)Management Resources andBusiness Activities

Reasons for Appointing

Strategies for Value Creation

Apr. 1978 Joined The Sanwa Bank, Ltd. (presently
MUFG Bank, Ltd.)May 2005 Executive Officer of UFJ Bank Ltd.
(presently MUFG Bank, Ltd.)
Jan. 2006 Executive Officer of The Bank ofTokyo-Mitsubishi UFJ, Ltd. (presently
MUFG Bank, Ltd.)
Apr. 2008 Managing Executive Officer of The Bankof Tokyo-Mitsubishi UFJ, Ltd.
Jun. 2010 Managing Director and Chief Executive of
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
May 2012 Senior Managing Director of The Bank ofTokyo-Mitsubishi UFJ, Ltd.
May 2014 Deputy President Chief Executive of The
Bank of Tokyo-Mitsubishi UFJ, Ltd.
May 2016 Deputy President (Director) of The Bankof Tokyo-Mitsubishi UFJ, Ltd.
Jun. 2017 Member of the Board of Directors,
Deputy President of The Bank ofTokyo-Mitsubishi UFJ, Ltd.
Apr. 2018 Member of the Board of Directors,
Deputy President of MUFG Bank, Ltd.
Jun. 2019 Advisor of MUFG Bank, Ltd. (current)
Jun. 2019 President of SANSHIN Co., Ltd. (current)
Jun. 2021 Joined the Company, Member of theManaging Board (Outside) (current)

What Sysmex Aims forApr. 1978 Joined Kawasaki Heavy Industries, Ltd.
Apr. 2013 Executive Officer, General Manager ofPlanning & Control Division, Aerospace
Company of Kawasaki Heavy Industries, Ltd.
Apr. 2015 Managing Executive Officer, General
Manager of Corporate Planning Division,
In Charge of Finance & Human Resources(Corporate) of Kawasaki Heavy Industries,
Ltd.
Jun. 2015 Senior Vice President, General Manager
of Corporate Planning Division, In Chargeof Finance & Human Resources(Corporate) of Kawasaki Heavy Industries,
Ltd.
Apr. 2018 Director, Managing Executive Officer,
President of Motorcycle & Engine Companyof Kawasaki Heavy Industries, Ltd.
Jun. 2019 Advisor of Kawasaki Heavy Industries, Ltd.
Jun. 2019 Joined the Company, Member of theManaging Board (Outside) (current)

Message

Apr. 1992 Ph.D. of Medicine and Assistant professorof Ophthalmology, Kyoto University
HospitalApr. 2006 Team Leader, Laboratory for Retinal
Regeneration Research, RIKEN Center for
Developmental Biology, Japan (presently
RIKEN Center for Biosystems Dynamics
Research, Japan)
Jun. 2016 Joined the Company, Member of theManaging Board (Outside) (current)
Dec. 2017 Director of Research Center, Kobe City
Eye HospitalAug. 2019 President of Vision Care Inc. (current)
Aug. 2020 President, VCGT Inc. (current)
Mar. 2021 President, VCCT Inc. (current)
Apr. 2022 RARA fellow, Ritsumeikan Advanced
Research Academy (RARA), and visiting
professor, Research Organization of
Science and Technology, Ritsumeikan
University (current)
Apr. 2022 Visiting Scientist, Cell and Gene Therapy
in Ophthalmology Laboratory, RIKEN
Baton Zone Program (BZP), RIKEN
Cluster for Science, Technology andInnovation Hub, (RCSTI) Japan (current)
Apr. 2022 Senior Adviser, Research Center, Kobe
City Eye Hospital (current)

80

Executive Officers (As of June 24, 2022)

81

Sysmex Report 2022

Mamoru Kubota

Kensuke Iizuka

Senior Executive Officer
Deputy in charge of Business
Strategy Development

Senior Executive Officer
Deputy in charge of Corporate
Management
Executive Vice President ofCorporate Business Planning Div.
Corporate Business Administration Div.
Corporate Executive Office

Takashi OnoPeng Zuo Hui

Senior Executive Officer
In charge of Manufacturing and SCM

Executive Officer
President and CEO, Sysmex Shanghai Ltd.

Frank Buescher

Mitsuhisa Kanagawa

Executive Officer
CEO, Sysmex Asia Pacific Pte Ltd.
Deputy in charge of DX Strategy
Development

Executive Officer
Executive Vice President of
Business Strategy Development Div.

Alain Baverel

Reiko Watanabe

Executive Officer
CEO, Sysmex Europe SE

Executive Officer
Executive Vice President ofMedical Affairs Div.

Kaoru Watanabe

Takaaki Nagai

Executive Officer
Supervision of JEA

Executive Officer
Executive Vice President of
System Engineering Div.

Kinya Uchihashi

Andy Hay

Executive Officer
Executive Vice President of
Reagent Production

Executive Officer
CEO, Sysmex America, Inc.

Executive Officers’ Main Responsibilities
Main Responsibilities Related to Key Actions for the Group Main Responsibilities Related to Materiality
5

Introduce new business to achieve dynamic growth.

Promote digitalization in the Group and achieve DX
to create customer value.

Enrich the talent portfolio, which contributes to strategy
execution, and create an attractive organizational
climate that leverages diverse talent.

Formulate a vision and roll out measures to reinforce
and implement sustainability management.

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











































































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

Activity Report andCorporate Overview

Corporate GovernanceManagement Resources andBusiness Activities



Strategies for Value Creation

4

What Sysmex Aims for

3

Message2

Reinforcement of governance1

Environmental consideration

6

Realization of an attractive workplace5

Responsible provision of products and services

4

Resolution of medical issues through products andservices

3

Achieve high growth through proactive investment
in key fields (hemostasis, immunochemistry,and life science).

Member of the Managing Board and Senior
Executive Officer
Senior Managing Director, CTO
R&D, Incubation and MR Business
Member of the Managing Board and Senior
Executive Officer
Kenji
Senior Managing Director
TachibanaCorporate Management, Regulatory Affairs &Quality Assurance and DX Strategy Development
Member of the Managing Board and Senior
Executive Officer
Iwane
MatsuiManaging Director
Global Marketing
Member of the Managing Board and Senior
Executive Officer
Hiroshi
Kanda
Managing Director
Business Strategy Development
Member of the Managing Board and Senior
Tomokazu Executive Officer
YoshidaManaging Director
R&D, Incubation and MR Business
Senior Executive Officer
MamoruDeputy in charge of Business Strategy
KubotaDevelopment
Deputy in charge of Corporate Management
Executive Vice President of Corporate
Kensuke Business Planning Div.
IizukaCorporate Business Administration Div.
Corporate Executive OfficeSenior Executive Officer
TakashiOno
In charge of Manufacturing and SCM
Peng Zuo Executive Officer
HuiPresident and CEO, Sysmex Shanghai Ltd.
Executive Officer
FrankCEO, Sysmex Asia Pacific Pte Ltd.
Buescher
Deputy in charge of DX Strategy Development
Executive Officer
Mitsuhisa
Kanagawa Executive Vice President of Business Strategy
Development Div.
Executive Officer
Alain
BaverelCEO, Sysmex Europe SE
Executive Officer
Reiko
Watanabe Executive Vice President of Medical Affairs Div.
Executive Officer
Kaoru
Watanabe Supervision of JEA
Executive Officer
TakaakiExecutive Vice President of System
Nagai
Engineering Div.
Executive Officer
Kinya
Uchihashi Executive Vice President of Reagent Production
Executive Officer
Andy Hay
CEO, Sysmex America, Inc.
Kaoru
Asano

2

Accelerate the introduction of new products aimed at
improving growth and profitability while promoting
emerging market strategies.

Posts and Responsibilities1
Sysmex Report 2022

82

Activity ReportManagement’s Discussion and Analysis

Management’s Discussion and Analysis

Operating profit increased substantially due to a numberof positive factors: higher sales and an improved cost of sales
ratio lifted gross profit substantially, and the pandemic suppressed SG&A expenses by prompting more efficient selling
activities. Accordingly, operating profit surged ¥17.4 billion(up 34.8%), to ¥67.4 billion, and the operating margin came to
18.5% (up 2.1 percentage points). Exchange rates had a ¥9.18
billion positive impact on operating profit compared with thepreceding fiscal year.
Profit before tax rose ¥18.0 billion (up 39.1%), to ¥64.3 billion, buoyed by higher operating profit and a foreign exchange
gain of ¥0.85 billion. (In the previous year, the Company recorded a foreign exchange loss of ¥0.23 billion.)
Profit attributable to owners of the parent rose ¥12.1
billion (up 38.2%) year on year, to ¥44.0 billion, due to suchfactors as a year-on-year rise in income tax expenses of ¥5.8
billion (up 40.9%) to ¥20.2 billion.

Net sales rose substantially in fiscal 2021, thanks to a recovery
in general testing demand, an increase in the installed instrument base due in part to the expansion of our direct salesarea, as well as demand to reinforce healthcare infrastructures
in individual regions and a rise in testing demand related to
COVID-19. As a result, net sales increased ¥58.7 billion (up19.2%) year on year, to ¥363.7 billion. Foreign exchange rates
had the effect of raising net sales by ¥21.35 billion comparedwith the previous fiscal year.
Despite soaring transportation costs and other negative
factors, cost of sales improved due to a reagents accounting
for a larger proportion of net sales. Cost of sales rose ¥22.4
billion (up 14.9%), to ¥173.1 billion. The cost of sales ratio was
47.6% (down 1.8 percentage points).
Selling, general and administrative (SG&A) expenses expanded ¥11.6 billion (up 14.1%), to ¥94.2 billion. Expenses rosedue to the recommencement of sales and service activities ineach area, as well as to reinforcement of the direct sales structure. We also saw an increase in expenses related to digitalization and the medical robotics business. SG&A expenses as apercentage of net sales were 25.9% (down 1.2 percentage points).
R&D expenses grew ¥4.27 billion year on year (up 19.0%), to¥26.7 billion, owing to ongoing investments in product development and higher costs related to regulatory affairs. R&D expenses as a percentage of net sales were flat year on year, at 7.4%.

n Net Sales

For details on the operating environment, please see the Message
from the CEO on page 14

n Exchange Rates

(Yen)

2017

2018

2019

2020

2021

1USD

110.9

110.9

108.7

106.1

112.4

1EUR

129.7

128.4

120.8

123.7

130.6

1CNY

16.8

16.5

15.6

15.7

17.5

(FY)

n Operating Profit
n Operating Marginn Profit Attributable to Owners of the Parent
n Return on equity (ROE)

Operating profit
Operating margin

363.7 (¥ billion)

Profit attributable to owners of the parent
Return on equity (ROE)

67.4 (¥ billion)
281.9

293.5

301.9

305.0

59.0

61.2

44.0 (¥ billion)
39.2

55.2

41.2
34.8

50.0

21.0

31.9

20.9
18.3

18.5 (%)

16.4

17.4

16.3
12.9

2017

2018

2019

2020

2021
(FY)

83

Sysmex Report 2022

2017

2018

2019

2020

2021
(FY)

2017

2018

2019

13.5 (%)

10.9

2020

2021
(FY)

Operating Results versus Forecasts and the
Outlook for Fiscal 2022
In May 2021, Sysmex announced a mid-term management plan
ending in fiscal 2023. In its final year, the plan targets net salesof ¥420.0 billion and operating profit of ¥80.0 billion. We set
targets for fiscal 2021 as ¥360.0 billion in net sales and ¥66.0
billion in operating profit (announced in November 2021).
In fiscal 2021, a recovery in testing demand pushed up
net sales, enabling us to reach our target. We also reached ourtarget for operating profit, thanks to a rise in gross profit.
For fiscal 2022, we expect sales and profits to increase
due to growth in testing demand, continued investment inmedical infrastructure, and the ongoing depreciation of theyen, despite such factors as a downward trend in demand for
COVID-19 testing and the impact of global inflation, higher raw
material and other prices, and lockdowns in China. Specifically,
we forecast net sales of ¥410.0 billion, operating profit of¥76.0 billion, profit before tax of ¥72.5 billion and profit attributable to owners of the parent of ¥50.0 billion. This forecast
assumes that the impact of COVID-19 will abate and economic
activity will return to normal. Our calculations assume full year
exchange rates of ¥120 per U.S. dollar, ¥130 per euro and ¥18
per yuan. Our forecast is based on currently available information; actual results may differ for a variety of reasons.

(¥ billion)

FX
impact
21.35
Japan
6.86

Higher
SG&A
expenses-7.76
R&D expense
increase-4.26
Increase in otheroperating expenses
-3.04

China
-0.17

363.7

305.0

Fiscal 2020

FX impact
9.18

Activity Report andCorporate Overview

AP
3.70

EMEA
14.28

Improvement incost of sales ratio
4.39
Higher grossprofit on
increased sales
18.90

Corporate Governance(¥ billion)

Management Resources andBusiness Activities

n Reasons for Changes in Operating Profit

Strategies for Value Creationn Reasons for Changes in Net Sales (by Destination)

What Sysmex Aims for

COVID-19 continues to affect some regions, but the global
market has generally returned to normal.
Since the start of the pandemic at the end of fiscal 2019,the curtailment of hospital visits by outpatients for reasons
other than COVID-19 led to an ongoing decrease in testing
numbers. With COVID-19 infections abating, testing demandin each region has returned to pre-pandemic levels, which
resulted in higher sales, centering on hematology and urinalysis instruments and reagents. Meanwhile, demand was highfor hemostasis testing, which is used to monitor indicators ofincreasingly severe COVID-19 infections. Accordingly, reagent
sales in this field remained favorable.
Looking forward, we will need to keep monitoring thesituation as the disease continues to spread again, particularly
in Japan and China, but demand for testing is expected toincrease as economic activity resumes in individual regions.
Over the medium- to long-term, we anticipate the need to
expand medical systems to control infections, and we believe
investment in medical infrastructure will increase. At thesame time, as the pandemic abates we expect to see a decline
in testing demand related to COVID-19, such as PCR andantigen tests.

Americas
12.67

Message

Impact of COVID-19

67.41

50.01

+¥17.4 billion+¥58.7 billion

Fiscal 2021

Fiscal 2020

Fiscal 2021

Sysmex Report 2022

84

Overview of Operating Performance by Destination
Americas
In the Americas, Sysmex obtained the No. 1 position in thehematology field by leveraging outstanding customer service,
such as services and support that make use of online tools. In
fiscal 2021, sales increased substantially. Sales of hematology
instruments and reagents increased, due to a recovery fromthe impact of COVID-19 and growth in the installed instrument base. In the urinalysis field, sales rose as our alliance with
Siemens Healthineers in North America boosted instrument
and reagent sales. As a result, sales for the region were ¥83.6
billion (up 27.0% year on year). (Sales were up 19.5% on a local
currency basis.)
EMEA
In the EMEA region, Sysmex’s business covers more than
100 countries, including developed countries and emerging
markets, and we are creating sales and service and support
structures tailored to regional characteristics. We are working
to accelerate the launch of new products in the urinalysis field,
as well as in our mainstay field of hematology. We are also
leveraging an alliance with Siemens Healthineers to strengthen business in the hemostasis field. In fiscal 2021, sales rosedue to favorable results in the direct-sales areas of Spain andTurkey, as well to active investment in healthcare infrastructure in Eastern Europe. This situation led to favorable demandfor instruments and reagents in the hematology, urinalysis andhemostasis fields, which boosted sales substantially. As a result, the region generated sales of ¥101.5 billion (up 23.6% year
on year). (Sales were up 17.3% on a local currency basis.)
China
Sysmex recognized the growth potential of the Chinese market early on, and we took the lead over competitors in developing local business structures in the country. We have built
a robust infrastructure in China, working with numerous sales

distributors to provide products and services throughout thecountry. We have created a structure to supply instruments
using a knockdown production method, applying a productsupply scheme to meet market characteristics, and we are
increasing the number of products that use this scheme. In
fiscal 2021, reagent sales were solid due to a recovery from theimpact of COVID-19 and expansion of the installed instrument
base in the hematology, urinalysis, and immunochemistry
fields. However, instrument sales were down, and overall sales
for the region were flat year on year as a result. Sales came to¥93.3 billion (up 11.4% year on year). (Sales were down 0.1% on
a local currency basis.)
Asia Pacific
The Asia Pacific region has a large population, and the market
is expected to expand going forward. This market is diverse,with economic levels, languages and healthcare systems differing by country. Nevertheless, we are reinforcing our position
by providing solutions from a customer viewpoint and meeting
local needs. In fiscal 2021, instrument sales were favorable in
the hematology field, centered on India. In addition to a recovery in testing demand, reagent sales grew thanks to an increase in the installed instrument base, leading to double-digit
growth. Sales came to ¥29.6 billion (up 21.1% year on year).
Japan
Aiming to establish an undisputed No. 1 position in the IVD
market in Japan, Sysmex differentiates itself from competitors.
We are also working to capture new markets by promoting
developments in such areas as cancer genomic medicine andthe medical robotics business. In fiscal 2021, reagent demand
was favorable, due to a recovery in testing demand and anincrease in the installed instrument base. Also, we launched
new products in the hematology field, and instrument sales in
the medical robotics business contributed to higher sales. As aresult, sales in Japan were ¥55.6 billion (up 14.1% year on year).

n Net Sales by Destination

 Americas  EMEA  China  AP  Japan(¥ billion)

400

363.7
83.6

300

101.5
200
145.5
93.3

30.7
100

0

39.5
24.4
10.6
40.1
2012

29.6
55.6
2013

2014

Japanese GAAP

85

Sysmex Report 2022

2015

2016

2017

2018

2019
IFRS

2020

2021
(FY)

Message(Fiscal 2021)

n SalesAmericas
66.3

83.6 (¥ billion)
70.5

71.0

65.8

FCM

Life science
2.3%

Urinalysis 0.6%
10.5%

Others0.5%

Hemostasis
3.1%

Central andSouth America
8.3%

2019

2020

EMEA

Hematology
82.9%

2021
(FY)

Life science

75.6

77.2

FCM
0.7%

82.1

Urinalysis
5.4%
Hemostasis
11.5%
2017

2018

2019

2020

78.2

80.0

83.8

93.3 (¥ billion)

2018

2019

2020

24.5

2018

26.9

Other partsof Europe
26.9%

Clinical chemistry
0.9%

2019

2020

Japan
45.0

44.0

46.7

FCM
0.2%
Life science
0.0%

Sales byBusiness

Hemostasis
35.5%

Hematology
40.1%

FCM

Life science
0.2%

29.6 (¥ billion) 1.0% Clinical chemistry
3.3%
Immunochemistry
3.2%
Urinalysis
8.0%

24.4

Others
3.6%

Sales byBusiness

Sales byArea

Hemostasis
15.8%

Hematology
65.0%

55.6 (¥ billion)

Life science
12.9%

Others
8.8% Medical robotics business

FCM
0.7%
Clinicalchemistry
2.0%

2018

2019

2020

2021
(FY)

Urinalysis
5.8%

Oceania
7.7%South Asia
19.5%

2.3%

Sales byBusiness

Immunochemistry
14.2%
2017

Southeast
Asia
40.8%

Taiwan, South Korea,
Mongolia
32.0%

2021
(FY)

48.7

Sales byArea

Activity Report andCorporate Overview

2017

25.0

Five majorcountries
44.4%

Middle East, Africa
12.9%

Corporate Governance

Asia Pacific

Sales byBusiness

Immunochemistry
12.3%

2021
(FY)

Others4.3%

EasternEurope,Russia
11.5%

2021
(FY)

Urinalysis
10.8%

2017

Hematology
63.6%

Management Resources andBusiness Activities

China
72.0

Others
10.1%

101.5 (¥ billion) 8.7%

Strategies for Value Creation

73.9

Sales byArea

What Sysmex Aims for

2018

UnitedStates84.3%

Canada4.2%

Sales byBusiness
2017

Others3.2%

Hematology
35.5%
Hemostasis
17.8%

Sysmex Report 2022

86

Fund Procurement and Liquidity Management

Assets, Liabilities, and Equity

Sysmex raises working capital as necessary through short-termbank loans and other means. Consolidated subsidiaries obtainbank loans as needed to secure working capital, but in October
2003, the Company introduced a cash management system(CMS) to increase efficiency by unifying financing and capitalmanagement at affiliates in Japan.
Sysmex Corporation currently holds an issuer rating of
AA- from Rating & Investment Information, Inc. (R&I), with therating updated based on an annual review. To maintain andincrease our rating going forward, we will take the balance
between sales, profit, assets, liabilities, and capital into consideration. For long-term capital requirements such as capital
investment, the Company decides the funding method after
considering the investment recovery period and risk. In the fiscal year ended March 31, 2021, the Company mainly funded its
capital expenditure and R&D activities out of cash generated
through operating activities.

As of the end of fiscal 2021, total assets amounted to ¥483.7
billion, up ¥58.8 billion from one year earlier. This increase wasattributable mainly to increases of ¥18.0 billion in trade andother receivables, ¥14.9 billion in inventories and ¥10.4 billion
in intangible assets.
Meanwhile, total liabilities were up ¥15.8 billion from theprevious fiscal year-end, to ¥134.6 billion. Principal increases
included income taxes payable, which rose ¥6.2 billion, othernon-current liabilities, which increased ¥4.4 billion, and accrued expenses, which were up ¥3.2 billion.
Total equity came to ¥349.0 billion, up ¥42.9 billion fromthe end of fiscal 2020. Among the principal reasons, retained
earnings rose ¥28.8 billion, and other components of equity
increased ¥12.3 billion. Equity attributable to owners of theparent to total assets rose 0.1 percentage point, from 71.9%
to 72.0%.

n Cash Flowsn Total Assets
Total Equity
Total assets
Total equity

Net cash provided
by operating activities

483.7 (¥ billion)

Net cash used
in investing activities

Net cash usedin financing activities

58.7

56.8
53.1
44.7

424.8
389.2
321.9

349.0 (¥ billion)

346.7

241.4

265.1

278.3

(FY)
2018
2019
2020
2021

306.0

-14.0
-25.9
-29.1
2017

87

Sysmex Report 2022

2018

2019

2020

2021
(FY)

-40.1

-35.0

-20.5 -20.2 -20.5 (¥ billion)

Message

Sysmex aims to maintain an appropriate balance between
shareholder returns as profitability increases, internal reserves
to invest in research and development, and capital expenditures to maintain high rates of stable growth. In terms of
returns to shareholders, we intend to provide a stable dividend
on a continuous basis and aim for a consolidated payout ratioof 30% or more under our basic policy of sharing the successesof our operations 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 considering business performance during fiscal 2021, we announced dividends for the yearof ¥76 per share, which includes an interim dividend of ¥37. As
a result, the dividend payout ratio came to 36.0%.
Going forward, Sysmex will continue to effectively invest
its internal reserves in the implementation of highly competitive
product development and global business strategies, aiming to
respond to anticipated changes in the business environment.

Management Resources andBusiness Activities

At the end of fiscal 2021, cash and cash equivalents amounted
to ¥73.7 billion, up ¥7.2 billion from one year earlier.
Cash Flows from Operating Activities
Net cash provided by operating activities was ¥58.7 billion, up¥1.8 billion from the preceding fiscal year. As principal factors,
profit before tax and depreciation and amortization provided
more cash than in the previous fiscal year, while increases intrade receivables and inventories used cash.
Cash Flows from Investing Activities
Net cash used in investing activities was ¥35.0 billion (up ¥5.8
billion). Among major factors, the Company used more cashfor purchases of property, plant and equipment and for purchases of intangible assets.
Cash Flows from Financing Activities
Net cash used in financing activities was ¥20.5 billion (up¥0.28 billion). This was mainly due to dividends paid of ¥15.2
billion (up ¥0.2 billion).

Strategies for Value Creation

Returns to Shareholders

What Sysmex Aims for

Cash Flows

Corporate Governancen Cash Dividends Applicable to the Year / Dividend Payout Ratio (Consolidated)
Cash dividends applicable to the year (figures adjusted for stock split)
Dividend payout ratio

72

70

66

80 (Yen)

76

72

58

52
38
27
12.5

12
26.8

2002 2003 2004 2005 2006 2007

31.9

15

14
29.4

2008 2009

27.0

2010

Activity Report andCorporate Overview

9
6.5
3.125 3.75
5
20.0
18.9
22.6 17.8
17.9

20

17
29.1
2011

29.1
2012

27.1
2013

29.6
2014

27.5
2015

29.7
2016

35.1
2017

35.4
2018

43.1
2019

47.1
2020

36.0
(%)

2021

2022 (FY)(Forecast)

Note: Two-for-one stock splits conducted on November 18, 2005, April 1, 2011 and April 1, 2014.

Sysmex Report 202288Consolidated Financial Data (10 Years)
Japanese GAAP(¥ billion)

Fiscal years

2012

2013

2014

2015

Net sales

145.5

184.5

221.3

253.1

Operating income

21.8

32.8

44.4

56.9

14.1

20.5

26.6

36.2

Capital expenditure

11.1

17.1

17.3

19.9

Depreciation

7.9

9.9

11.2

12.2

R&D expenses

12.1

13.2

14.6

17.7

Net cash provided by (used in) operating activities

25.8

36.5

38.6

39.5

Net cash provided by (used in) investing activities(12.5)(33.9)(19.5)(21.6)Net cash provided by (used in) financing activities

(3.1)

(2.8)

(7.5)

(8.7)

Total assets

173.0

210.7

247.9

267.6

Cash and cash equivalents, end of year

34.3

36.5

50.2

56.4

Total equity

119.1

146.2

169.5

188.0

0.7

1.9

0.7

1.3

1,151.3

703.73

812.3

899.5

Net income (basic) (yen)

137.5

99.43

128.4

174.4

Net income (diluted) (yen)

137.0

99.13

128.0

173.7

Cash dividends applicable to the year (yen)20.00

27.003

38.00

52.00

Dividend payout ratio (%)

29.1

27.1

29.6

29.8

Operating margin (%)

15.0

17.8

20.1

22.5

Overseas sales ratio (%)

72.4

78.2

81.7

84.3

Equity ratio (%)

68.7

69.2

68.0

69.9

Return on equity (ROE) (%)

12.8

15.6

17.0

20.4

Return on assets (ROA)4 (%)

9.0

10.7

11.6

14.1

5,594

6,211

6,742

7,446

US dollars (yen)

83.1

100.2

109.9

120.1

Euros (yen)

107.2

134.4

138.8

132.6

Chinese Yuan (yen)

13.2

16.3

17.8

18.9

For the year:

Net income1
5

At year-end:

Interest-bearing liabilities
Per share data:

Equity (yen)Other data:

Number of employees(Including part-time and other employees)

Exchange rates:

1. Figures shown for fiscal 2015 is “net income attributable to owners of the parent.
2. Dividend (actual) converted to post-split basis.
3. Two-for-one stock split
4. ROA = Net income attributable to owners of the parent/total assets (yearly average)×100

89

Sysmex Report 2022

IFRS(¥ billion)

Fiscal years

2015

2016

2017

2018

2019

2020

2021

249.8

281.9

293.5

301.9

305.0

363.7

Operating profit

60.7

51.7

59.0

61.2

55.2

50.0

8

67.4

Profit attributable to owners of the parent

39.2

40.6

39.2

41.2

34.8

31.98

44.0

Capital expenditure

21.4

19.3

24.9

30.2

27.1

25.7

33.2

Depreciation and amortization

12.1

12.3

14.6

15.8

23.9

25.5

27.4

R&D expenses

15.4

15.5

16.7

19.5

21.7

22.5

26.7

Net cash provided by (used in)operating activities

41.7

32.8

52.2

44.7

53.17

56.88

58.7

Net cash provided by (used in)investing activities(23.8)(19.4)(37.8)(40.1)(25.9)(29.1)8(35.0)Net cash provided by (used in)financing activities(8.7)(10.8)(11.5)(14.0)(20.5)7(20.2)(20.5)

Total assets

263.9

279.8

321.9

346.7

389.27424.88483.7

Cash and cash equivalents,
end of year

56.4

57.9

61.4

51.0

56.5

66.4

73.7

Total equity

182.8

210.2

241.4

265.1

278.3

306.08

349.0

1.3

1.1

0.9

0.8

23.1

7

22.5

22.8

Equity attributable to owners of
the parent (yen)879.32

1,005.86

1,154.57

1,267.07

1,329.78

1,460.888

1,664.85

Profit attributable to owners of
the parent (basic) (yen)189.08195.31

188.29197.60167.10152.738210.88

Profit attributable to owners of
the parent (diluted) (yen)188.30194.74187.84

197.29166.93152.478210.49Cash dividends applicable tothe year (yen)

52.00

58.00

66.00

70.00

72.00

72.00

76.00

Dividend payout ratio (%)

27.5

29.7

35.1

35.4

43.1

47.18

36.0

Operating margin (%)

24.0

20.7

21.0

20.9

18.3

16.48

18.5

Overseas sales ratio (%)

84.2

82.6

84.0

85.0

84.5

84.0

84.7

Equity ratio (%)

69.3

74.8

74.8

76.3

71.3

71.98

72.0

Return on equity (ROE) (%)

23.1

20.7

17.4

16.3

12.9

10.9

8

13.5

Return on assets (ROA) (%)

15.7

14.9

13.0

12.3

9.5

7.8

8

9.7

7,446

7,930

8,445

8,715

9,231

9,510

9,812

US dollars (yen)

120.1

108.4

110.9

110.9

108.7

106.1

112.4

Euros (yen)

132.6

118.8

129.7

128.4

120.8

123.7

130.6

Chinese Yuan (yen)

18.9

16.1

16.8

16.5

15.6

15.7

17.5

5

Strategies for Value Creation

252.6

What Sysmex Aims for

Net sales

Message

For the year:

At year-end:

Interest-bearing liabilities

Management Resources andBusiness Activities

Per share data:

Corporate Governance

Other data:

Number of employees(Including part-time and other employees)

Activity Report andCorporate Overview

6

Exchange rates:

5. Including tangible and intangible items
6. ROA = Profit attributable to owners of the parent/total assets (yearly average)×100
7. Adopted IFRS 16 (from fiscal 2019)8 In fiscal 2021, Sysmex changed its accounting policy for configuration or customization costs in cloud computing contracts to recognize costs as expenses
when services are received. Accordingly, we have by retroactively adjusted the figures for the fiscal 2020.

Sysmex Report 2022

90

Consolidated Statement of Financial Position
Sysmex Corporation and Its Subsidiaries
As of March 31, 2022

2022

2021

Thousands of
U.S. Dollars
2022¥ 73,752
118,697
61,944
1,498
470
18,728275,092¥ 66,467
100,641
46,985
1,105
909
14,723230,833$ 604,525
972,926
507,738
12,2793,852
153,5082,254,852

98,52513,01057,260986
16,403
9,157
841
3,910
8,520
208,614¥483,707

96,14012,433
46,8401,093
15,202
7,945
923
5,621
7,860
194,061¥424,895

807,582
106,639
469,344
8,082
134,451
75,057
6,893
32,04969,836
1,709,951$3,964,811¥ 32,111
6,439
1,482
12,813
1,234
12,852
17,498
10,985
6,663
102,082¥ 34,159
5,783
1,529
6,563
1,002
12,16814,227
8,508
5,964
89,907$ 263,205
52,77912,148105,025
10,115
105,344
143,426
90,041
54,615
836,738

15,840
30
1,183
366
8,537
6,613
32,571
134,654

16,178
108
1,071
265
4,060
7,212
28,898118,806

129,836
246
9,697
3,000
69,97554,205
266,975
1,103,721

14,112
20,483
305,710(312)
8,309
348,303750
349,053¥483,707

13,22919,581
276,897(307)(4,082)
305,318771
306,089¥424,895

115,672
167,8932,505,820(2,557)
68,1072,854,943
6,148
2,861,090$3,964,811

Millions of Yen

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other short-term financial assets
Income taxes receivable
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Goodwill
Intangible assets
Investments accounted for using the equity method
Trade and other receivables
Other long-term financial assets
Asset for retirement benefits
Other non-current assets
Deferred tax assets
Total non-current assets
Total assets
Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Other short-term financial liabilities
Income taxes payable
Provisions
Contract liabilities
Accrued expenses
Accrued bonuses
Other current liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Other long-term financial liabilities
Liability for retirement benefits
Provisions
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
EquityEquity attributable to owners of the parent
Capital stock
Capital surplus
Retained earnings
Treasury stock
Other components of equity
Total equity attributable to owners of the parent
Non-controlling interests
Total equity
Total liabilities and equity

Note: The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been madeat the rate of ¥122 to $1, the approximate rate of exchange at March 31, 2022.

91

Sysmex Report 2022

Consolidated Statement of Income
Sysmex Corporation and Its Subsidiaries
For the Year Ended March 31, 2022

¥305,073
150,770
154,30282,621
22,5171,637
790
50,010420
866(3,083)(230)
46,251
14,385¥ 31,865$2,981,803
1,419,631
1,562,172
772,418
219,541
11,54929,156552,590
4,508
7,451(29,189)
6,967
527,426
166,180$ 361,238

Profit attributable to
Owners of the parent
Non-controlling interests
Profit¥ 44,093(21)¥ 44,071¥ 31,905(39)¥ 31,865$ 361,418(172)$ 361,238

Yen¥210.88
210.49U.S. Dollars¥152.73152.47

Management Resources andBusiness Activities

Earnings per share
Basic
DilutedStrategies for Value Creation¥363,780
173,195
190,585
94,23526,784
1,409
3,557
67,416550
909(3,561)
850
64,346
20,274¥ 44,071

What Sysmex Aims for

2021

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Research and development expenses
Other operating income
Other operating expenses
Operating profit
Financial income
Financial expenses
Share of loss on equity method
Foreign exchange gain (loss)
Profit before tax
Income tax expenses
ProfitMessage2022

Thousands of
U.S. Dollars
2022

Millions of Yen

$1.73
1.73

Note: The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been madeat the rate of ¥122 to $1, the approximate rate of exchange at March 31, 2022.

Consolidated Statement of Comprehensive Income

ProfitOther comprehensive income (loss)
Items that will not be reclassified subsequently to profit or loss
Net (loss) gain on financial assets measured at fair value
through other comprehensive income
Remeasurements of defined benefit plans
Total
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
Share of other comprehensive income (loss) of investments
accounted for using the equity method
Total
Total other comprehensive income
Comprehensive income

2021¥44,071¥31,865$361,238

(213)

608

(1,746)

(66)
(280)

11
620

(541)
(2,295)

12,647

10,070103,664

Comprehensive income attributable to
Owners of the parent
Non-controlling interests
Comprehensive income

3

(25)

25

12,65012,370¥56,442

10,045
10,665¥42,531103,689
101,393$462,639¥56,463(21)¥56,442¥42,570(39)¥42,531$462,811(172)$462,639

Activity Report andCorporate Overview

2022

Thousands of
U.S. Dollars
2022

Millions of Yen

Corporate Governance

Sysmex Corporation and Its Subsidiaries
For the Year Ended March 31, 2022

Note: The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been madeat the rate of ¥122 to $1, the approximate rate of exchange at March 31, 2022.

Sysmex Report 202292Consolidated Statement of Changes in Equity
Sysmex Corporation and Its Subsidiaries
For the Year Ended March 31, 2022

Capital stock

As of April 1, 2020
Cumulative effect of accounting change
Restated balance
ProfitOther comprehensive income (loss)
Comprehensive income (loss)
Exercise of warrants
Stock-based compensation
Cash dividends
Purchase of treasury stock
Disposal of treasury stock
Transfer to retained earnings
Establishment of subsidiarywith non-controlling interests
Change in non-controllinginterests due to capitalincrease of subsidiary
Total transactions withthe owners
As of March 31, 2021
Cumulative effect of accounting change
Restated balance
ProfitOther comprehensive income (loss)
Comprehensive income (loss)
Exercise of warrants
Stock-based compensation
Cash dividends
Purchase of treasury stock
Disposal of treasury stock
Transfer to retained earnings
Establishment of subsidiarywith non-controlling interests
Change in non-controllinginterests due to capitalincrease of subsidiary
Total transactions withthe owners
As of March 31, 2022

¥12,877—
12,877
—
—
—
352
—
—
—
—
—

Noncontrollinginterests

Total

Total
equity¥18,487—
18,487
—
—
—
197
896
—
—
0
—

¥261,321(1,342)259,978
31,905—31,905——(15,037)——50¥(306)
—
(306)
—
—
—
—
—
—
(1)
0
—

¥(14,697)—(14,697)—
10,665
10,665
—
—
—
—
—
(50)

¥277,683(1,342)
276,340
31,905
10,66542,570549
896(15,037)
(1)
0
—

¥663
—
663
(39)
(0)
(39)
—
—
—
—
—
—

¥278,347(1,342)
277,004
31,865
10,66542,531549
896(15,037)
(1)
0
—

—

—

—

—

—

—

49

49

—

—

—

—

—

—

98

98

352

1,093

(14,987)

(1)

(50)

(13,593)

147(13,446)

13,229—13,229
—
—
—
882
—
—
—
—
—

19,581—
19,581
—
—
—
502
399
—
—
—
—

276,897—
276,897
44,093—44,093——(15,258)
—
—
(21)

(307)
—
(307)
—
—
—
—
—
—
(4)
—
—

(4,082)—(4,082)—
12,37012,370
—
—
—
—
—
21

305,318—
305,318
44,093
12,37056,463
1,384
399(15,258)
(4)
—
—

771
—
771
(21)
0
(21)
—
—
—
—
—
—

306,089—
306,089
44,071
12,37056,442
1,384
399(15,258)
(4)
—
—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

882

901

(15,280)(4)

21(13,478)—(13,478)¥14,112¥20,483¥305,710¥(312)¥ 8,309¥348,303¥750¥349,053

Capital stock

As of March 31, 2021
Cumulative effect of accounting change
Restated balance
ProfitOther comprehensive income (loss)
Comprehensive income (loss)
Exercise of warrants
Stock-based compensation
Cash dividends
Purchase of treasury stock
Disposal of treasury stock
Transfer to retained earnings
Establishment of subsidiarywith non-controlling interests
Change in non-controllinginterests due to capitalincrease of subsidiary
Total transactions withthe owners
As of March 31, 2022

Millions of Yen
Equity attributable to owners of the parent
Other
CapitalRetained
Treasurycomponents
surplusearnings
stockof equity$108,434—
108,434
—
—
—
7,230
—
—
—
—
—

Thousands of U.S. Dollars
Equity attributable to owners of the parent
Other
CapitalRetained
Treasurycomponents
surplusearnings
stockof equity$160,500 $2,269,648——
160,500 2,269,648—
361,418———
361,418
4,115
—
3,270
—
—
(125,066)
—
—
—
—
—
(172)

$(2,516)—(2,516)
—
—
—
—
—
—
(33)
—
—

Noncontrollinginterests

Total$ (33,459) $2,502,607——(33,459) 2,502,607—
361,418
101,393
101,393
101,393
462,811—
11,344—
3,270—(125,066)
—
(33)
—
—
172
—

Total
equity$6,320 $2,508,926——
6,320 2,508,926(172)
361,2380
101,393(172)
462,639—
11,344—
3,270—(125,066)
—
(33)
—
—
—
—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

7,385

(125,246)

(33)

172

(110,475)—(110,475)$167,893 $2,505,820$(2,557)

7,230$115,672$ 68,107 $2,854,943$6,148 $2,861,090

Note: The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been madeat the rate of ¥122 to $1, the approximate rate of exchange at March 31, 2022.

93

Sysmex Report 2022

Consolidated Statement of Cash Flows
Sysmex Corporation and Its Subsidiaries
For the Year Ended March 31, 2022

2021

¥ 64,346¥ 46,251$ 527,426

Depreciation and amortization

27,431

25,416

224,844

Interest and dividend income

(408)

(277)

(3,344)

Message2022

Thousands of
U.S. Dollars
2022

Millions of Yen

Operating activities
Profit before tax

740

767

6,066

3,561

3,083

29,189384

18,402(10,297)(9,066)(84,402)

Decrease (increase) in inventories(12,495)

3,851(102,418)(Decrease) in trade payables(5,055)(834)(41,434)

Increase in accrued expenses

2,044

1,055

16,754

Decrease/increase in consumption taxes receivable/payable(2,417)(56)(19,811)

158

(314)

1,295

1,984

625

16,262

Increase (decrease) in contract liabilities
Increase in accrued bonuses
Other – net

2,011

(325)

16,484

Subtotal

73,85070,561

605,328

298

232

2,443

(704)

(748)

(5,770)

Income taxes paid

(14,705)(13,172)(120,533)

Net cash provided by operating activities

58,73956,873

481,467(12,768)(9,930)(104,656)

Management Resources andBusiness Activities

Interest and dividend received
Interest paid

Strategies for Value Creation

2,245(Increase) in trade receivables

Loss on disposal of property, plant and equipment

What Sysmex Aims forInterest expenses
Share of loss on equity method

Investing activities
Purchase of property, plant and equipment

439

4,467

(19,266)(15,863)(157,918)

Increase in long-term prepaid expenses

Proceeds from sales of property, plant and equipment(1,896)(2,110)(15,541)

Purchase of investments in equity instruments

(320)

(623)

(2,623)Purchase of investments in debt instruments(1,199)—(9,828)

—

(343)

—

Payments into time deposits(640)(2,058)(5,246)

Refund of time deposits

755

1,438

6,189

Acquisitions of subsidiaries or other businesses

(260)

(139)

(2,131)(35,052)(29,191)(287,311)

1,384

549

11,344

Dividends paid

(15,258)(15,037)(125,066)

Repayment of lease liabilities(6,577)(5,911)(53,910)

Other – net
Net cash used in investing activities

Corporate Governance

545

Purchase of intangible assets

Exercise of warrants

Other – net
Net cash used in financing activities
Foreign currency translation adjustments on cash andcash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year

(90)

145

(738)

(20,542)(20,253)(168,377)

4,139

2,447

33,926

7,284

9,875

59,70566,46756,592544,811¥ 73,752¥ 66,467$ 604,525

Activity Report andCorporate Overview

Financing activities

Note: The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been madeat the rate of ¥122 to $1, the approximate rate of exchange at March 31, 2022.

Sysmex Report 2022

94

Corporate Overview

Sysmex’s Businesses

Main Business Domains
Clinical testing, which is essential to healthcare, can be broadly
divided into two categories: in vitro diagnostics (IVD) that involve the examination of blood, urine, and other samples takenfrom the body, and in vivo diagnostics, which involve direct
examination using X-rays or electrocardiograms. Sysmex’s primary business is in the IVD domain, where we provide medical
institutions and other customers with instruments, reagents,and software on a global basis.
IVD is used in a variety of ways. It is used during medical
checkups to help prevent disease. IVD is also used in diagnosing diseases, determining treatment methods, measuring
the results of drug administration, preventing illness fromgrowing increasingly severe, and for post-treatment monitoring. Healthcare without accurate test results is like walking
through mist; the path is uncertain. IVD is essential because
it allows medical professionals to assess a patient’s state ofhealth accurately and swiftly, and to determine optimal treatment methods.
In IVD, within Sysmex’s main businesses of hematology, urinalysis, and immunochemistry, testing is conductedto check a patient’s physical condition. They are used for awide range of other purposes, such as for disease prevention
and early-stage detection through medical checkups, and intreating diseases or managing their prognoses. In fields suchas hemostasis and gene testing, tests are performed to measure a person’s physical condition in greater detail and aremainly used in the process of diagnosing and treating diseases.

The Growing Importance of IVD in Healthcare
In recent years, technological innovation and its application
to the field of healthcare have been leading to the practicalimplementation of new treatment methods. Expectations are
growing for personalized medicine, in which medication andtreatment are tailored to each patient’s unique characteristics
and medical condition. Testing is likely to play an increasingly
important role in healthcare, as the realization of personalized
medicine will require testing to confirm individual characteristics. For example, cancer genomic medicine, which has begun
in earnest, requires analysis of genetic information within cancer cells through genetic testing. Sysmex is working to achieve
this type of cancer genomic medicine and to make liquid biopsy a reality. Liquid biopsy is the testing of a patient’s blood andbodily fluids, which places less of a burden on the patient thana physical biopsy. We are actively working towards improving
patients’ quality of life and holding down healthcare expenses.
>>Realizing Personalized Medicine through Liquid Biopsy P40

n Sysmex’s Business Domains
Healthcare Activities

Prevention

Examination

Diagnosis, Treatment and Monitoring

Clinical Testing

In Vitro Diagnostics

In Vivo Diagnostics• Hematology 1• Clinical chemistry 1• Image scanning• Hemostasis• Gene testing• Electrocardiography• Urinalysis 1• FCM• Respiratory function testing• Immunochemistry 1• Electroencephalogram testing• Ultrasonography

Sysmex1. Diagnostics used for medical checkups

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Sysmex Report 2022

RecoveryMessage

What can be determined from samples (blood, urine, and cancer tissue)
What Sysmex Aims for

IVD
Blood vessels

Blood Testing Hematology
Testing that measures and analyzes the number,
type, and size of red, white and other blood cells[Related diseases: anemia, leukemia,
thrombocytopenia, etc.]

Strategies for Value Creation

Red bloodcellsWhite bloodcells

Platelets

Clotting factors

Management Resources andBusiness Activities

 Hemostasis
Testing that measures the ability of blood to clot
at wound sites (coagulation) and dissolve clots(fibrinolytic)[Related diseases: hemophilia, thrombotic
disease (myocardial infarction, cerebral
infarction, etc.)]
 Immunochemistry
Testing for the status of viruses, hormones andproteins, and determining causes and typesof disease[Related diseases: infectious diseases (hepatitis
B and C), thyroid disease, various cancers,
myocardial infarction, Alzheimer’s disease,atopic dermatitis, etc.]

Corporate Governance

Cancer and Lymph Node Testing
Proteins

Note: Some tests also include blood testing

VirusesHormones

Lymph nodes

 Life Science
Cancer gene testingThrough the detection and analysis of cancer
genes, this testing contributes to decisions on
treatment protocols and drug administration.
[Related diseases: breast cancer, lung cancer,
colorectal cancer, etc.]

Activity Report andCorporate Overview

Urine Testing
Cancer cellsDNA Urinalysis
Testing to determine the presence of sugar,
proteins or blood in the urine[Related diseases: kidney stones, kidney disease,diabetes, etc.]

Sysmex Report 2022

96

Sysmex’s Products in Use

SysmexDepending on the country andregion, patients may consult
directly with commercial labs.

Instruments andReagents
Service and Support

1 Commercial Labs

Specimens

Test results

Consultations

Patients

Diagnosis andtreatment

2 Hospitals
3 Clinics

Specimens

Lab Assay
Services

Test results

Specimens

4 Universities,
Research Institutions

Consultations

Patients

Diagnosis andtreatment
5 Veterinary Hospitals

Test results

Instruments andReagents for Animals
Service and Support

1 Commercial Labs
Commercial labs conduct testing for small-scale medical institutions that do not have their own analyzers, as well as handling specialized tests.
Large-scale labs, which handle tens of thousands of samples each day, use Sysmex’s high-productivity transport systems.

2 Hospitals
In addition to blood tests used in medical checkups and for in- and out-patient treatment and diagnostics, our products are used to test of cancer
lymph node metastasis, and in cancer genome profiling (see the column).

3 Clinics
Clinics typically use products that are compact and simple.

4 Lab Assay Services (Outsourced Sample Measurement Services)
We are developing a lab assay business, in which we receive samples from medical institutions, test them at our labs and our aﬃliated companies (suchas Sysmex Inostics and RIKEN GENESIS), and send back the results of protein or gene analyses performed on those samples. In addition to medical
institutions, we handle measurement on behalf of universities, research institutes, and pharmaceutical companies, providing information to assist theirdrug discovery and R&D eﬀorts. In 2020, we began conducting tests in relation to COVID-19.

5 Veterinary hospitals
Our products are used in maintaining the health of dogs, cats, and other pets, as well as aquarium and zoo animals.

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Sysmex Report 2022

Primary Products and Services

Hematology

white blood cell differentiation. In 2022, we launched sample
transportation system modules equipped with the world’s first
automated measurement function for quality control material.
Going forward, we plan to roll out these models globally.
In 2018, we launched the first products to have received
CLIA-waiver certification to clinics and other small-scale facilities in the United States. We are also rolling out products to
help realize early-stage detection and treatment of malaria. In
Europe in 2019, and in Japan in 2020, we launched an analyzer
that supports standardization and improved efficiency in malaria testing.

What Sysmex Aims for

For small- and medium-sized institutions, Sysmex offers threepart white blood cell differential models, used for determining
basic parameters, as well as five-part white blood cell differential models, used to deliver a high degree of clinical significanceand require numerous reagents. In addition, we offer a wideranging lineup, including transport systems that can be used for
rapid, high-volume testing in large-scale labs. In Japan in 2021,
we launched a new five-part white blood cell differential flagship model, as well as a compact model providing three-part

Message

Diagnostics Businessn Product Lineup of Multiparameter Automated Hematology Analyzers
Strategies for Value Creation

Five-Part Differential White Blood Cell Instruments

Management Resources andBusiness Activities

Information Diversity and Function

Three-Part Differential White Blood Cell Instruments

Reagents

Efficiency and Handling Capacity
Corporate Governance

Providing “Operational Value” That Boosts Efficiency in Laboratory Operations

Activity Report andCorporate Overview

In recent years, the amount of testing at medical institutions has been rising, due to a growing global population and the establishment of health insurance systems. Meanwhile, developed countries are focused on curtailing medical expenses amid theaccelerating trend toward fewer children and aging populations, and calling for more efficient laboratory operations.
In the hematology field in 1990, Sysmex developed the world’s first fully automated sample transportation system, whichhandles every step up to smear preparation. By automating testing and reducing manual labor as much as possible, this development lowered personnel costs, reduced the potential for infection when handling samples, and eliminated the mishandling ofsamples. Since then, we have been working to develop our products in the hematology field. We are striving to provide “operational value” aimed at substantially reducing manual operations in the laboratory by focusing on the keywords of automation,
reduction, and consolidation, and creating an environment that facilitates a focus on specialized operations.
Fully automatedSamplestorage

Blood image
Analysis

Smear sample
preparation

Sample sortingCounting of blood cells,
differentiation of white blood cells

Measurement of quality
control materials*

Sample setting*The world’s first automated measurement function for quality control materials (Sysmex research)

Sysmex Report 202298

Flow Cytometry (FCM)

Urinalysis

We are developing products that utilize the flow cytometry
method. Areas of business include clinical FCM (clinical testing to perform detailed analysis in diagnosing leukemia, malignant lymphoma and HIV/AIDS), industry FCM (used in thequality control of food and other industrial applications) andresearch FCM (analyzing the function of cultured cells andother research applications). In 2020, we launched a product(for research) in North America, the world’s largest market for
FCM testing. In 2022, we received the EU’s In Vitro Diagnostic
Medical Device Regulation (IVDR) certification and began ourmarket launch in Europe.

We developed the world’s first automated urine particle analyzer using the flow cytometry method. We are also adding
to our portfolio of urine chemistry products by making useof alliances as we work to expand our lineup in response todiverse urinalysis needs. In 2020, we signed a distributorshipagreement with Siemens Healthineers for the North American
market, and we plan to further expand our market scale.

Fully automated urine particle analyzer
Fully automated urine chemistry analyzer
Fully automated imaging unit for formed elements in urine
Flow cytometer

Reagents

Hemostasis

Immunochemistry

Demand for hemostasis testing has increased and grown morediverse due to a rise in thrombotic diseases stemming fromlifestyle diseases, as well as to the development of new blood
preparations. Sysmex handles products offering a wide rangeof processing capacities to meet the needs of various facilities.
In 2018, we launched a new product offering enhanced productivity, reliability and operability, and we are working toward a global roll-out. In addition to an alliance with Siemens
Healthineers in the area of reagents, we work with Group
company HYPHEN BioMed SAS to develop products offeringhigh clinical value.

We are working to develop our business in Asia, including
Japan and China, through sales of a fully automated immunoassay system, which performs highly sensitive, high-speed
assays on minute sample quantities.
In addition to reagents to test for infectious disease andtumor markers, we are developing proprietary markers to test
for measuring progression of hepatic fibrosis and atopic dermatitis. We are also developing new testing parameters, suchas for Alzheimer’s disease.
In China we are working to differentiate ourselves by augmenting the number of parameters tailored to regional needs.
To do so, we are pursuing development in local R&D bases andjoint development with local companies.

Reagents
Automated blood
coagulation analyzer

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Sysmex Report 2022

Reagents
Automated immunoassay
systemMessage

Using our proprietary technology,
the OSNA method, we provide asystem that automatically and easily detect information to assist in
diagnosing lymph node metastasis.
We launched this system in China
in 2020.
Cancer Lymph Node
Metastasis Testing System
We developed a system foruse in cancer gene profiling in collaboration with the National Cancer Center Japan. The system’s
targets for analysis are solid tumors. By obtaining a comprehensive cancer genomic profile of tumor tissue, the system analyzes abnormalities in cancer-specific genes in patients to provide
information that is useful in determining treatment methods,
including diagnoses and the selection of anti-cancer drugs. In
2019, this became the first such system to be covered underJapanese health insurance and be used in clinical settings.

We also offer assay services for research use to determine
the expression levels of breast cancer-related genes, as wellas other services making use of highly sensitive digital PCR
technology to detect gene mutations to a high degree ofsensitivity that are present in minute samples of blood, andultrahigh-sensitivity NGS technology. Sysmex took the leadin working with the City of Kobe through an industry–government alliance to build a system for PCR testing amid the
COVID-19 pandemic, with our employees also providing a lab
assay service.

Strategies for Value Creation

Other Lab Assays>>Lab Assay Services P97

Management Resources andBusiness Activities

Medical Robotics Business

Robotic-assisted surgery system

Corporate GovernanceIn August 2020, Medicaroid Corporation (a joint venture between Sysmex and
Kawasaki Heavy Industries, Ltd.) received Japanese regulatory approval for the firstmade-in-Japan robotic assisted surgery system for use in urologic surgery, followed
by insurance coverage in September. In 2021, we filed an application to expand regulatory approval to gynecology and gastroenterology. As the global general distributor
for this product, in December 2020 Sysmex began its launch, targeting the urology
departments of medical institutions in Japan. Compact enough to fit in standard
Japanese operating rooms, the system is equipped with user-friendly robot arms anda high-definition 3D videoscope. Furthermore, the system has been designed to be
network compatible, to support more accurate treatment by medical workers.

What Sysmex Aims forCancer Gene Testing

Initiatives Targeting Antimicrobial Resistance

1 Source: Antimicrobial Resistance: Tackling a crisis for the health and wealth of nations. The Review on Antimicrobial Resistance, Chaired by Jim O’ Neill.
2 A technology that involves forming microchannels channels at the nanometer to micrometer level, capturing individual bacteria from among the multiple
bacteria present in a fluid, and then cultivating bacteria unidirectionally within these tiny channels, resulting in a rapid antimicrobial susceptibility test.

Sysmex Report 2022 100

Activity Report andCorporate Overview

Antimicrobial resistance (AMR) is the inability or ineffectiveness of antimicrobial agents due to inappropriate use of antimicrobials, commonly referred to as antibiotics. If measures against AMR are not taken, by 2050 it is estimated that annual worldwide
deaths due to antimicrobial-resistant bacteria will exceed 10 million,1 more than deaths due to cancer. Inappropriate use of antimicrobial agents is a worldwide challenge, as this can cause outbreaks of antimicrobial-resistant bacteria. A necessary part ofthe proper use of antimicrobials is rapid screening tests in a medical setting. By investigating the type of bacteria the patient is
infected with and the presence or absence of antimicrobial resistance, it is possible to administer effective antimicrobial agents.
As an AMR countermeasure, we are working with Sysmex Astrego AB, which possesses proprietary microfluidicAMR
technolイメージ
ogy.2 (In December 2019, we invested in the company, which became a wholly owned subsidiary in May 2022.) We are developing a compact analyzer to test antimicrobial susceptibility in urine samples in a short period of time. In March
2022, we completed our self-declaration for the European In Vitro Diagnostic Medical Device Directive (CEIVDD), and are moving forward with activities targeting market launch. We are also focusing on awarenessactivities to ensure that more people have adequate knowledge of AMR.

Stakeholder Engagement
Sysmex works alongside its business partners and employees to provide products and services to medical
institutions and other customers in an effort to resolve medical issues.
Going forward, through proactive dialogue with stakeholders, we strive to forge better relations. In addition, by incorporating their expectations and requirements into our business activities we will enhance theeffectiveness of our strategy and strive to realize a sustainable society.

Major Stakeholders
Stakeholders described outside the circle are categorized according
to our Core Behaviors. >>P5

Customers

Patients, health examinees,etc.

Community
and society

Society(including NPOs)
More than 7.0 billion
people aroundthe world

Medical institutions
and commercial labs
More than 190 countries
and regions

Employees

Governments
and public bodies

Employees

More than 9,000

More than 190 countries
and regions

Shareholders
Shareholders

Approximately
14,000

Joint researchand development
partners
More than 200 themes

Distributors
More than 600
companies

Suppliers

Approximately 250
companies(Key Tier 1 suppliers)

Business
Partners(As of the end of fiscal 2021)

Main Dialogue with Stakeholders (Fiscal 2021)>>Status of Sustainability Targets P47 >>Sustainability Data Book > Communication with Stakeholders P61

Customers

We engage in ongoing communication through sales and service and support activities, with the aim of instilling confidence
in our customers and providing added value that exceeds their expectations. As a result, we earn high marks in customer
satisfaction surveys.
 Established a 24/7 customer support center (separate contract required) Conducted customer satisfaction surveys
 Gathered feedback through VOC (Voice of the Customer), utilized in product development and quality improvements
 Convened user meetings to communicate accurate product knowledge
 Held online scientific seminars>>Customer Assessment P34 >>Sustainability Data Book > Responsible Provision of Products and Services P15

Employees

In its aim to achieve sustainable growth, Sysmex believes that diversity and inclusion are essential, as are efforts to createa workplace that is comfortable, appealing and conducive to work. We have set the engagement score on our corporate
culture survey, as one of our sustainability targets, and we are undertaking initiatives to achieve this target.
 Conducted corporate culture surveys (dialogue according the results of the engagement score) Instilled the corporate philosophy of the Sysmex Group and introduced an internal award system Configured a global internal reporting system >>Sustainability Data Book > Compliance P52
 Held council meetings between labor and management>>Diverse Human Resources P65 >>Sustainability Data Book > Realization of an Attractive Workplace P23

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Sysmex Report 2022

Message
What Sysmex Aims for

Business
Partners

We maintain ongoing communication to foster an understanding among
business partners of Sysmex’s business directions and policies, as well as tobuild trust-based relationships. We pursue supply chain management with
our suppliers in accordance with our procurement policies.
 Communication through open innovation and alliances with R&D partners
 Communication based on procurement policies
 Conducting of CSR surveys of suppliers Holding meetings with sales distributors and visiting

CSR survey response rate
(primary suppliers of raw materials)

90%>>Sustainability Data Book > Strengthening of Supply Chain Management P21

Meetings with institutional
investors and analysts

Approx. 450 per year

Corporate Governance
Activity Report andCorporate Overview

We liaise and engage in dialogue with government agencies and internationalorganizations with a view to the development of healthcare and the realizationof a sustainable society. In addition, we communicate with society throughactivities aimed at meeting the needs of communities around the world, basedon our Policy on Corporate Citizenship Activities and Philanthropy.
 Supported activities in various regions in relation to the spread of COVID-19
 Collaborated with government agencies and international organizations
 Participated in industry groups Engaged in Group corporate citizenship programs, including the Sysmex
Gives Back Challenge (such as employee blood donations) and Sysmex
Gives Back Day (help to eradicate cancer, support for pediatric patientsand orphans, etc.)

Management Resources andBusiness Activities

SocietyStrategies for Value Creation

Shareholders

Sysmex recognizes that IR activities are important to achieving sustainablegrowth and medium- to long-term increases in corporate value. We strive todisclose information proactively and quickly share internally the evaluations
and requests that we receive in the course of dialogue with shareholders andinvestors, and to reflect this information in our management and IR activities.
In fiscal 2021, IR activities were limited due to COVID-19, but we usedonline tools to maintain the same level of dialogue as in the past.
	Holding of the Ordinary General Meeting of Shareholders• Voting rights executed in writing or via the Internet
 Information disclosure• Proactively disclosed voluntary information such as operating performance by destination, type of business, and product type
 Dialogues with institutional investors and analysts• Held business results briefings and conference calls• IR meetings: Management visited the Americas, Europe and Tokyoand engaged in dialogues related to our long-term management goals,
mid-term management plan, business model, R&D, shareholder returns, ESG, and other topics.
• Holding of IR events: Each year we hold a technology presentation, in
which people in charge of R&D divisions provide explanations about
R&D progress. In addition, to foster a deeper understanding of ourmanagement strategy and business activities, we conducted facility
tours and tours of offices in Japan and overseas. (postponed in fiscal
2021 due to COVID-19)(Simultaneous interpretation in English is provided at these events.)
 Dialogues with individual shareholders• Provided information through our shareholder newsletter and website• Hold business office tours (postponed in fiscal 2021 due to COVID-19)

Employees participating in Group
corporate citizenship programsMore than 5,900 per year>>Sustainability Data Book >Corporate Citizenship Activities P36

Sysmex Report 2022

102

Terminology

103

Antigen test

A test to measure for the presence of an antigen, virus, or other pathogen that has entered the body. By detecting virus-specific proteins, these tests confirm whether a virus ispresent in the body at the time of testing.

Antimicrobial resistanceThis phenomenon occurs when living organisms develop a resistance to a drug, whose
efficacy is decreased or neutralized as a result. Bacteria that have developed microbial
resistance are known as antimicrobial-resistant bacteria.

Antimicrobial susceptibility test

A test to determine the efficacy of various antimicrobial drugs against pathogenic bacteria detected in a sample.

Application

Corresponds to a test parameter in Sysmex’s various technology platforms.

Blood smear sample

Prepared for microscopy of blood cell morphology by placing a drop of blood on a glass
slide, and then drying and staining it.

Cancer genome profiling

Analysis of information about genes significant to cancer diagnostics by looking at mutations, amplifications, and fusion of multiple genes in cancer tissue.

Caresphere

Caresphere utilizes IoT and the cloud to establish a platform for the real-time linking
and analysis of a variety of information managed using testing instruments and clinicallaboratory information systems. It is a new network solution that provides support forincreasing the operational efficiency of professionals involved in testing and healthcare,enhancing quality and raising patient satisfaction.

Clinical FCM

Refers to FCM used in a clinical testing setting for analysis in such areas as hemophilia,
lymphoma, HIV, and hematopoietic stem cells.

Commercial lab

A company that specializes in testing operations, performing IVD on behalf of medical
institutions, research institutes, and other facilities.

Companion diagnostics

Tests performed to identify patients who may benefit from or experience side effects
from a drug and to determine whether to change the method of administration or discontinue the drug.

EMEA

Europe, the Middle East, and Africa

Flow cytometry (FCM)

Method involving the flow dispersion of minute particles and the use of laser light tooptically analyze minute flows.

Genomic medicine

Medicine that allows the prevention of disease or the effective treatment of individual
patients by analyzing their genetic information.

Hematology

The field of in vitro diagnostics that determines whether precise testing is necessary byanalyzing the number, type, and size of red, white, and other blood cells.

In vitro diagnostics (IVD)

In general, IVD refers to the testing of blood, urine and other samples to determine
physical condition. IVD may also refer to the domain of laboratory testing in which IVD is
performed.

Knockdown production method

A production method in which the principal parts are exported from Japan for local assembly into finished products.

Liquid biopsy

This is a general name for technology using blood or body fluid samples for diagnosis andthe prediction of treatment impacts, rather than through the conventional practice oftissue biopsy, in which diagnosis is performed on diseased tissue that has been collected.
Liquid biopsy is less invasive than tissue biopsy, but more highly sensitive detection
technologies are required.

Manufacturing and marketing approval(regulatory approval)

In Japan, the manufacturing and marketing of medical devices and reagents requires approval from the Ministry of Health, Labour and Welfare. Such approval necessitates confirmation of a product’s function and safety. Other countries have their own regulatory procedures: approval from the Food and Drug Administration in the United States, obtaining
the CE Mark in Europe (which indicates compliance with the In Vitro Diagnostic Medical
Device Directive (IVDD) and the In Vitro Diagnostic Medical Device Regulation (IVDR)),and in China, approval from the National Medical Products Administration (NMPA).

Sysmex Report 2022

Personalized medicine

Different from the conventional practice of providing selected predetermined or uniform
treatment for a given disease, personalized medicine aims to select treatment methods
optimized to individual patient characteristics, based on gene and other data.

Polymerase chain reaction (PCR)

A gene amplification technology for copying small quantities of DNA to produce larger
quantities.

Precision management

A management method used to guarantee the values measured by customers’ testing equipment and to confirm that a customer’s equipment is functioning correctly.
External quality control is a method under which the same specimens (such as artificially
produced blood) are distributed to multiple clinical laboratories, and the measurement
results obtained are analyzed using statistical methods, thereby allowing the precision ofindividual laboratories’ measurement results to be evaluated. The results are provided as
feedback to these laboratories, helping to increase their quality of testing.

Primary care

The initial care provided at clinics or other locations when a patient first falls ill.

Quality of life (QOL)

Refers to the maintenance of human dignity and improved wellbeing.

Reagent

A pharmaceutical product for medical use in laboratory testing, also called an in vitro
diagnostic product. It is not used directly on the human body, but on samples of blood orother bodily fluids.

Real-world data (RWD)

RWD is a generic term for medical data obtained in daily clinical practice, such as datafrom electronic medical records, medical checkups and wearable devices.

Specimen

Material necessary for testing. May include blood, cerebrospinal fluid, pus, punctured
fluid, urine and feces.

Sysmex Network Communication
Systems (SNCS)

An online support service that connects the Sysmex Customer Support Center andcustomers’ instruments via an Internet connection to provide real-time external quality
control and scientific information, and to monitor instrument conditions.

Technology platforms

Sysmex’s three technology areas (cell measurement, protein measurement, and genemeasurement) and the measurement platforms that use them.

Transport system

A system that links multiple analyzers, allowing testing to be automated. In addition to
making testing operations more efficient, automation helps reduce the risk of infection
when samples are handled manually, and prevents mishandling.

Urinary tract infections

The urinary tract runs between the kidneys and the urethral outlet. Inflammations due tothe incursion of bacteria into the urinary tract are known as urinary tract infections. Such
infections can lead to cystitis and pyelonephritis (inflammation of the kidneys).

Urine sediment testing

Testing performed to analyze formed elements in the urine, including blood and othercells. Urine chemistry testing, on the other hand, is conducted by using a test paper toanalyze for the presence of sugar, protein, or blood cells in urine.

Sysmex Report 2022

Activity Report andCorporate Overview

A test that allows multiple markers to be measured at once. Particularly in genomic medicine, cancer panels are used to analyze the mutation, proliferation, and fusion of multiple
genes having diagnostic significance.

Corporate GovernancePanel testingManagement Resources andBusiness Activities

A technique developed by Sysmex that does not require extraction or purification of
nucleic acid in the pre-treatment process, enabling one-step amplification.

Strategies for Value Creation

One-Step Nucleic Acid Amplification(OSNA) method

What Sysmex Aims forTechnology that involves forming tiny channels at the nanometer to micrometer level,
separation and detection of components of a liquid, cleaning the liquid and replacing it.

Message

Microfluidic technology

104

Stock Information (As of the End of Fiscal 2021)

n Stock Price Rangen Principal Shareholders (Top 10)
Number of Percentage
shares held of share(Thousands) holding (%)(Calculated as the closing price on March 31, 2011 = 100)

1,200

Shareholders

Sysmex (Figures adjusted for stock split)
Tokyo Price Index (TOPIX)

The Master Trust Bank of Japan, Ltd.
(Trust Account)
The Kobe Yamabuki Foundation
Nakatani Foundation for Advancement of
Measuring Technologies in Biomedical Engineering
Custody Bank of Japan, Ltd. (Trust Account)
Nakatani Kosan, Ltd.
Kazuko Ietsugu
Taeko Wada
Rusoru, Ltd.
Tadako Nakatani
NORTHERN TRUST CO.(AVFC) SUB A/C
AMERICAN CLIENTS

900

600

300

28,27313.5

12,000

5.7

11,8305.7

11,235
10,457
6,124
6,124
4,750
4,012

5.4
5.0
2.9
2.9
2.3
1.9

3,315

1.6

Note: Percentage of shareholding excludes treasury stock (447,255 shares).

02011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
(FY)

n Distribution of Shares by Number of Shares Heldn Stock Price Movements
Fiscal years

High
(Yen)

Low
(Yen)

Closing
price
(Yen)

2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021

3,340
5,800
7,180
6,880
8,640
8,170
9,730
11,1108,420
13,31015,725

2,387
2,900
3,130
3,070
5,430
6,010
6,080
4,810
5,814
7,024
7,970

3,340
5,790
3,290
6,670
7,040
6,750
9,640
6,690
7,846
11,925
8,923

Volatility
(%)

23.6
25.7
37.5
27.6
39.2
29.9
24.7
38.7
38.4
27.8
41.6

Less than 1,000 shares 1.11%

More than 1,000 shares 1.40%

Number of shares: 2,318,591(12,289 shareholders)Number of shares: 2,929,254(1,470 shareholders)More than 5,000 shares 0.98%
Number of shares: 2,061,970(300 shareholders)More than
10,000 shares 5.61%
Number of shares: 11,761,594(386 shareholders)More than
500,000 shares 76.53%

More than
100,000 shares 14.37%

Number of shares: 160,447,843(65 shareholders)Number of shares: 30,138,110(133 shareholders)Note: Volatility refers to the annualized standard deviation based on thedaily closing price.

1n Total Shareholder Return (TSR ) (Annualized Rate)(%)

Past 1 Past 3 years
Past 5 years Past 10 years
Investment year
periodCumulative/ Cumulative Annual Cumulative Annual Cumulative Annual
Annual rate
rate
rate
rate

SysmexTOPIX
TOPIX(Electricalequipment)-25.1

33.8 10.2

32.9

5.8

440.8 18.4

2.0

31.2

44.3

7.6

183.3 11.0

3.6

72.4 19.9

91.2 13.8

261.5 13.7

9.5

1. TSR: Total shareholder return, including capital gains and dividends• Prepared by Sysmex based on data from Nikkei NEEDS-Financial QUEST• Base date of March 31, 2022
• TSR calculated on the assumption that dividends are reinvested in shares

105

Sysmex Report 2022

n Composition of Shareholders
Individuals and others
15.59%

Financial institutions
23.24%
Financial instrument firms
1.15%
Other Japanese companies
20.12%

Foreign investors
39.90%

Corporate Information (As of the End of Fiscal 2021)

Message

Sysmex Corporation

Inquiries

IR & Corporate Communication Department, TEL: +81-78-265-0500

Websitehttps://www.sysmex.co.jp/en/

Number of Employees

9,812 (consolidated basis) (including part-time employees and others)

Fiscal Year

April 1–March 31

Shareholders’ Meeting

June

Number of Shares Authorized

598,688,000 shares

Number of Shares Issued

209,657,362 shares

Paid-in Capital¥14,112.0 million

Stock Listings

Tokyo Stock Exchange, Prime Market (As of April 4, 2022)

Ticker Code

6869

Transfer Agent

Mitsubishi UFJ Trust and Banking Corporation

Independent Auditor

Deloitte Touche Tohmatsu LLC

RatingAA- (Rating and Investment Information, Inc. (R&I))

Major Indexes

Dow Jones Sustainability World Index
Dow Jones Sustainability Asia Pacific Index
FTSE4Good Index Series
FTSE Blossom Japan Index
FTSE Blossom Japan Sector Relative Index
MSCI ESG Leaders Indexes
MSCI SRI Indexes
MSCI Japan ESG Select Leaders Index
MSCI Japan Empowering Women Index (WIN)S&P/JPX Crabon Efficient Index
ISS ESG “Prime” status
Ethibel Excellence
Ethibel Pioneer
Ethibel Sustainability Index (ESI)Euronext Vigeo Eiris World 120 Index

Corporate Governance

1-5-1, Wakinohama-Kaigandori, Chuo-ku, Kobe 651-0073, Japan

Management Resources andBusiness Activities

Head Office

Strategies for Value Creation

February 20, 1968

What Sysmex Aims for

Established

Activity Report andCorporate Overview>>Sustainability Data Book > Evaluations and Results Related to Sustainability P62

Sysmex Report 2022106

1-5-1 Wakinohama-Kaigandori,Chuo-ku, Kobe 651-0073, Japan
Tel +81 (78) 265-0500 Fax +81 (78) 265-0524

www.sysmex.co.jp/en/

Printed in Japan.