Sysmex Report 2016

Sysmex Report2016
For the year ended March 31, 2016

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Shaping the advancement of healthcare.
Sysmex aims to contribute to the health ofpeople around the world by creating new value.
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.

Core Behaviors
To Our Customers
We deliver reassurance to our customers, through unmatched quality, advanced technologies, superior support, andactions that consistently reflect the viewpoint of our customers.
We constantly look out for our customers’ true needs, and seek to generate new solutions to satisfy those needs.

To Our Employees
We honor diversity, respect the individuality of each employee, and provide them with a workplace where they canrealize their full potential.
We value the spirit of independence and challenge, provide employees with opportunities for self-fulfillment andgrowth, and reward them for their accomplishments.

To Our Business Partners
We deliver commitment to our client companies through broad-ranging partnerships.
We strive to be a company that can grow in step with our trade partners, through respect and mutual trust.

To Our Shareholders
Our shareholders can rest assured that we will continue to improve the soundness and transparency of our management
policies, while promoting information disclosure and close communications.
We commit ourselves to a consistent yet innovative style of management, in order to achieve sustainable growth andincreased shareholder value.

To Society
We carry out our business in strict compliance with laws and regulations, as well as in adherence to high ethical standards.
As a responsible member of society, we play an active role in resolving environmental issues and other problems that
impact our society today.

1

Sysmex Report 2016

Sysmex Report 2016

2

Editorial Policy

Contents

 Profile Sysmex’s Value Creation

 Striving for Sustainable Increases in Corporate Value

Corporate Philosophy of the Sysmex Group ........................... 2

Our Business Model for Creating Value ..................................... 19

Corporate Governance........................................................................ 51

A Sustained Growth Trajectory ...................................................... 5

Sysmex’s Strengths ............................................................................... 21

Members of the Managing Board .................................................. 57

Three Points Supporting Sustained Growth ............................. 7

Growth Frontiers.................................................................................... 23

Messages from Outside Members of the Managing Board .... 59
Executive Oﬃcers .................................................................................. 62

 To Our Stakeholders

 Business Activities

Human Resource Development and Cultivation .................... 63

Message from the CEO ...................................................................... 9

Business Domains and Market Positioning ............................... 29

Environmental Preservation ............................................................. 65

Medium- and Long-Term Management Plans.......................... 13

Principal Testing Fields and Products........................................... 31

Contributing to Society....................................................................... 67

Our Financial Perspective .................................................................. 15

Research and Development .............................................................. 33
Production................................................................................................. 35
Sales and Support Services................................................................ 37
Overview of Business by Geographic Region(Americas, EMEA, China, Asia Paciﬁc and Japan).................... 39

 Financial and Other Information
Consolidated Financial and Non-Financial Data
(11 Years)................................................................................................... 69
Consolidated Financial Information.............................................. 71
Stock Information .................................................................................. 97
Corporate Overview ............................................................................. 98

3

Sysmex Report 2016

The Sysmex Report, an integrated report that summarizes financial and nonfinancial information, is intended to help stakeholders understand Sysmex’s
medium- to long-term value creation. For more detailed information, please
visit our website.

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 asa whole. “Sysmex Corporation” refers to the Company on a stand-alone basis.

Accounting Standards
The financial data shown in this report through the fiscal year ended March
31, 2016, is based on Japanese GAAP. Sysmex has voluntarily adopted theInternational Financial Reporting Standards (IFRS) from the first three monthsof the fiscal year ending March 31, 2017.

Cautionary Note Regarding 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 20164 Profile

A Sustained Growth Trajectory

Since the time of our establishment,
we have sustained growth by creating new value.
Sysmex has expanded its operations through proactive

continuing to expand despite a variety of changes in our

research and development and has built up a global

operating environment.

Consolidated net sales in the ﬁscal year ended March 31, 2016:¥253.1 billion

sales and support service network. As a result, we are

1968(Established)(¥ billion)

Net sales

0.15

Operating income

0.01

1988

2008

2016

13.2

110.7

253.1

1.9
20
years

—

R&D expenditure

0.0

0.6

9.2

17.7

7

609

3,916

7,446

1968
Established TOA MEDICAL ELECTRONICS CO., LTD.
(current Sysmex Corporation)
Established for the purpose of marketing electronic medical
equipment manufactured by TOA ELECTRIC CO., LTD.

67

56.9
8
years

Overseas sales ratio (%)

Employees

31

15.0
20
years

2007
Gained the top share of the
global market in the hematology ﬁeld

84
1995*1, 1998*2
Reinforcing our global sales network
through business alliances*1 Entered an alliance with current Siemens
Healthcare Diagnostics Inc. in relation tohemostasis products*2 Entered an alliance with current F. Hoﬀman-La
Roche Ltd. in hematology products

1991
Began providing direct sales andsupport services overseas for theﬁrst time, in the United Kingdom

1972
Established our ﬁrst overseas
location, in Germany
1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992
Overseas sales

Domestic sales

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Notes: Fiscal year-ends through 1990 concluded at the end of February. The ﬁscal year-end is March 31 from 1991 onward (Japanese GAAP).
Information for ﬁscal years through the year ended March 31, 1993, are on a non-consolidated basis. From the ﬁscal year ended March 31,
1994, ﬁgures are on a consolidated basis.

1963
Developed Japan’s ﬁrst automatedhematology analyzer

1984Entered the hemostasis ﬁeld

1990
Launched the world’s ﬁrst system products in the hematology ﬁeld

(Developed by TOA ELECTRIC CO., LTD.)

CC-1001

CA-1002000
Expanded R&D in the life science ﬁeld
Opened the Central ResearchLaboratories within the current
Technopark

Sysmex Report 20162013
Expanded our technology platform witha view to personalized medicine

INTERNATIONAL REAGENTS CORPORATION(current Sysmex International Reagents Co., Ltd.)

Sysmex Inostics

Acquired the current Sysmex Partec andSysmex Inostics as subsidiaries

System products in the hematology field
Central Research Laboratories (at the time)

5

2001
Reinforced R&D capabilities in reagentsConverted the current Sysmex
International Reagents Co., Ltd., to awholly owned subsidiary

Sysmex Report 20166 Profile

Three Points Supporting Sustained Growth

1

2

3

Point

Point

Point

Sysmex’s customers are hospitals and commercial labo-

One distinguishing feature of the healthcare market is its

Sysmex provides high-quality products and services inratories. Our primary business revolves around in vitro

stability; demand related to health and medical care is rel-more than 190 countries around the world via a sales anddiagnostics (IVD), involving the analysis of blood, urine

atively unaﬀected by economic ﬂuctuations. Furthermore,

support service network tailored to match the character-and others. In addition to the ﬁeld of hematology, whichin addition to instruments Sysmex derives sales fromistics of individual regions. We operate a direct sales andanalyzes white, red and other blood cells, we have the top

reagents and support services. As reagents and support

support service structure, enabling us to hear customers’

share of the world market in the hemostasis and urinalysis

services are necessary to use our instruments, we antici-

requirements directly and respond to them swiftly. To(sediment) ﬁelds. Through proactive R&D, we are working

pate steady income.

accelerate our globalization, we also make use of indirect

High Level of Competitiveness:
90% of Sales in Fields Where We Holda Leading Share of the Global Market

A Business Model
That Facilitates Stable Growth

A Sales and Support Service
Network Covering
More Than 190 Countries

to create unique, high-value testing and diagnostic tech-sales structures that are sensitive to regional businessnologies.

practices.

Top Global Market Share in Three Fields

Reagents and Support Services
Make up More Than 60% of Sales

OthersOthersInstruments

12.6%

10.8%

33.9%

Global Business Development

Asia Paciﬁc

Japan

7.9%

15.7%

China

Urinalysis(sediment)

6.9%

25.8%

Sales by
Product Category

Sales by Business(Fiscal year ended
March 31, 2016)

Net Sales
by Destination(Fiscal year ended
March 31, 2016)(Fiscal year ended
March 31, 2016)

Hemostasis(including alliances)

17.4%

Hematology

63.1%

Support services

9.7%

Reagents

EMEA*

Americas

45.5%

26.9%

23.6%

*EMEA: Europe, the Middle East and Africa

7

Sysmex Report 2016

Sysmex Report 20168

To Our Stakeholders

We are contributing to society andenhancing corporate value
by putting the “Sysmex Way” into practice.

Message from the CEO

growth and promoting transformation. (See page 13 forGermany to meet future increases in reagent demand,technologies toward the realization of personalized medi-

details on long-term management targets and the mid-raising capacity to 1.5 times its former level. We are alsocine. In February 2016, we entered into an agreement with

“Shaping the advancement of healthcare” isSysmex’s mission.

term management plan.)

expanding our reagent factory in the United States, with

Eisai Co., Ltd., to jointly develop next-generation diagnos-

construction scheduled for completion in June 2017.

tic reagents in the ﬁeld of dementia. By fostering syner-

In the ﬁscal year ended March 31, 2016, the ﬁrst yearof the mid-term management plan, both operating per-

To accelerate our growth going forward, we are pro-gies between our existing businesses and those of Sysmex

The “Sysmex Way,” the corporate philosophy of theformance and our business activities progressed steadily.

actively moving ahead with research and development.

Partec and Sysmex Inostics, which became subsidiaries in

Sysmex Group, deﬁnes our mission as “shaping theDuring the year, sales in the hematology and hemostasis

In addition to hematology and other mainstay testing

2013, we are stepping up eﬀorts toward a full-scale entry

advancement of healthcare,” and we develop our businessﬁelds were favorable overseas, in China, EMEA and otherﬁelds, we are working to create new testing and diagnostic

into personalized medicine.

on this basis. The ﬁeld of in vitro diagnostics (IVD) has

regions, leading to a 14.4% year-on-year increase in net

been the core of the Company’s business since the time ofsales, to ¥253.1 billion. Operating income grew 28.3%, to

its establishment. Going forward, we will continue to take

¥56.9 billion, thanks to the rise in sales and the impact ofon new challenges in the healthcare domain and contrib-

yen depreciation against the U.S. dollar and Chinese yuan.

ute to the creation of a fulﬁlling and healthy society.

Looking at business activities in the ﬁscal year ended

Operating Income
Operating Margin

Net Sales(¥ billion)(¥ billion)

300

60

March 31, 2016, expanded sales of the XN-Series, the

200

184.5

9

portfolio through a business alliance with Eiken Chemical

the objectives of its long-term management vision to-Co., Ltd. In the immunochemistry ﬁeld, sales in Japan of ourward 2020, being “A Unique & Global Healthcare Testing

proprietary reagents were robust, and sales of the HISCL™-

Company.” To realize this vision and positioning, in May

Series grew signiﬁcantly in China, enabling us to make2015 we formulated a mid-term management plan aimed

steady progress as a leading company in the IVD domain

at further reinforcing growth and proﬁtability, investing in

in Asia. In July 2015, we expanded our reagent factory inSysmex Report 2016

45

44.4
40

30

30

26.6

32.8

ﬁeld, we launched new products and increased our product
Sysmex has deﬁned six areas of positioning to achieve(¥ billion)

36.2

221.3

higher proﬁtability. Performance was also strong in thehemostasis ﬁeld, particularly in China. In the urinalysis(%)

56.9 45Net Income Attributable to
Owners of the Parent

253.1

ﬂagship model in our mainstay hematology ﬁeld, led toWorking Toward Our Long-Term
Management Vision

Operating income
Operating margin

134.7

145.5

22.5

20

100

19.2
14.3

0

03/12 03/13 03/14 03/15 03/16

0

21.8

20.5

20.1
17.8

15.0

03/12 03/13 03/14 03/15 03/16

15

15

0

0

14.1
12.0

03/12 03/13 03/14 03/15 03/16

Sysmex Report 2016 10 To Our Stakeholders

Creating Value by Addressing the Issues
Society Faces

Further Enhancing Corporate Value
Human Resource Diversity and Open Innovation

Applying Our Technologies to Create a Fulfilling and
Healthy Society

Creating value that cannot be seen plays a major role incorporate growth, and human resources is a key factor. To

In advanced countries, as populations age the need isachieve further growth, Sysmex is developing the capabili-

growing to reduce healthcare costs and extend healthyties of and fostering diverse human resources. To cultivate

lifespans. In emerging markets, demand is to increase thethe next generation of human resources and enliven

quality of healthcare, build healthcare infrastructure andcommunications, in April 2015 we established the Global

enhance access to healthcare. We see Sysmex’s role asCommunication Center. Through communication, we

addressing these various societal issues by creating new

intend to encourage the mutual sharing of values and fos-value in the IVD domain.

ter new insights that will lead to new values and deepen

To date, Sysmex has been quick to address issues ascultural awareness through the joining of creative forces.

they arose along with the changing times, developing its

Another important yet unseen value lies in externalbusiness activities accordingly. In the 1960s, an era of highnetworks. In global competition, it is essential to expand

economic growth in Japan, we met the increasing need for

networks that extend beyond our own corporate scope

testing that accompanied rising health awareness, and weand encompass a broad perspective. In addition to its own

succeeded in commercializing Japan’s ﬁrst automateddirect sales and after-support system, Sysmex is mak-hematology analyzer. Thereafter, we continued to con-ing use of alliances to accelerate its global expansion. In

tribute to testing speed and accuracy, as well as testing

R&D, too, we are collaborating proactively with a variety

with high clinical value. In addition to instruments, weof research institutions, companies, universities andprovide the reagents and support services needed for IVD.

other organizations such as the National Cancer Center.

Through the development of system products that promote

In December 2015, for instance, Sysmex Inostics began

higher levels of eﬃciency, we are meeting the increasingly

collaborating with Merck of Germany on the development

diverse needs of hospitals and other customers.

of companion diagnostics* (for research) targeting anti-

We aim to create added value that instills conﬁdence

cancer agents for metastatic colorectal cancer. This test-

in testing among our customers and patients. For instance,

ing employs blood rather than cancer tissue, reduces thewe work to ensure consistent and accurate test results,

burden on patients and is expected to contribute to thewhich are essential to physicians’ ability to provide diag-

rapid determination of treatment methods for metastatic

noses smoothly. Through our support services, we detectcolorectal cancer.

instrument errors before they arise, working to minimize

In September 2015, we also opened the Openthe downtime during which testing is not possible. In addi-

Innovation Lab within Technopark, Sysmex’s R&D hub, totion, to improve patient quality of life we continue to takeaccelerate R&D eﬀorts toward the realization of personal-

up the challenge of realizing liquid biopsy, which will allow

ized medicine. This lab aims to create advanced, highly

testing for cancer and other diseases by analyzing blood

valuable testing and diagnostic technologies throughand other bodily ﬂuids rather than the aﬀected tissue.

collaboration with researchers in Japan and overseas.

Going forward, we will continue working to create* Companion diagnostics: Clinical testing performed to predict theeﬃcacy and side eﬀects of drugs before using them for treatment

new value that exceeds customer expectations, applying
proprietary expertise and technologies to resolve theissues society faces.

11 Sysmex Report 2016

To Our Stakeholders
Sysmex has grown as the result of the high degree ofand continued to pursue M&A opportunities. With regard

trust placed in the Company by a variety of stakeholders,

to shareholder returns, we aim to maintain an appropriate

including customers and shareholders. Going forward, on

balance between proactive investment and shareholder

the corporate governance front we are making an aggres-returns, and are targeting a consolidated dividend ratio ofsive eﬀort to augment management soundness and trans-

30%. For the ﬁscal year ended March 31, 2016, weparency and engage in dialogue with shareholders andincreased dividends ¥12 more than initially planned,

investors to achieve sustainable increases in corporate

resulting in ¥52 per share for the year. This ﬁgure amount-value. In June 2016, we transitioned to a “company withed to a dividend payout ratio of 29.8%, our 14th consecu-

an Audit and Supervisory Committee” and increased thetive year of dividend increases. We intend to maintain

number of external members of the Managing Board bystable dividends going forward. In the ﬁscal year ended

three, to a total of four. This move was aimed at reinforc-

March 31, 2016, ROE came to 20.4%. We plan to raise thising the auditing and supervisory function of the Managing

ﬁgure while sustaining a healthy ﬁnancial balance.

Board, as well as further enhancing the governance struc-

In line with its corporate philosophy, by leveraging its

ture by raising management transparency and objectivity.

strengths Sysmex will continue to enhance corporate value

Furthermore, from the ﬁrst quarter of the ﬁscal year end-by providing new value to society. I ask our stakeholders

ing March 31, 2017, we voluntarily adopted International

for your ongoing support of Sysmex from a medium- to

Financial Reporting Standards (IFRS) to increase thelong-term perspective as we take up these challenges.

level of convenience to Japanese and overseas investors
by facilitating the international comparison of ﬁnancial

September 2016

information.
I am convinced that Sysmex will continue to enjoy
signiﬁcant growth opportunities going forward. To achieve
further expansion, we will augment our technology platforms, strive to enhance our production, sales and support

Hisashi Ietsugu

service structures, invest aggressively in R&D and capital,

Chairman and CEO

Sysmex Report 2016 12

 To Our Stakeholders

Medium- and Long-Term Management Plans

We are pursuing a mid-term management plan andlong-term management targets based on ourGroup corporate philosophy, the “Sysmex Way.”
VisionA Unique & Global Healthcare Testing Company
Positioning

Undisputed Global Leader in Hematology, Hemostasis and Urinalysis

A Leading Global Player Making a Contribution to Personalized Medicine(Including alliances)

Long-Term
Management
Targets(2020)

We will build the earnings foundation to support further Group growthin the Company’s core businesses.

A Leading Company in the Asian in Vitro Diagnostics (IVD) Market

An Attractive Company Providing Value and Conﬁdence

We will leverage our geographic advantage to build a solid position in
the Asian market in immunochemistry and other growth fields,
as well as hematology.

We aim to become a highly attractive company to diverse stakeholders
that offers value and reassurance.

A Unique and Competitive Player in the Immunochemistry Field

One Sysmex Carrying Out High-Speed Management

We will harness unique strengths that other companies cannot emulate
and drive Group growth over the medium term.

Through optimal teamwork throughout the Group, we aim to bea corporate entity that conducts highly efficient and swift management.

Reinforce Growth and Proﬁtability
Mid-Term
Management Plan
(Fiscal years to March 31,
2016 to 2018)
Announced in May 2015

• Hematology, hemostasis andurinalysis• AsiaInvest in Growth• Immunochemistry, FCM* andlife science*FCM: Short for ﬂow cytometry. A method involving the ﬂow dispersion of minute particles and the use of laser
light to optically analyze the minute ﬂows. Used primarily to observe individual cells.

13 Sysmex Report 2016

By augmenting value in testing (diagnostics) based on leading-edge technologies, we will accelerate Group growth and establish our global position.

Promote Transformation• Earn further trust fromstakeholders• Enhance Group management>

Financial Targets (Fiscal year ending March 31, 2018, Japanese GAAP)Net sales¥300.0 billion

Operating income¥63.0 billion (Operating margin: 21.0%)

ROE(CAGR = 10.7%)(CAGR = 12.4%)

18.0%

Operating cash flow

¥50.0 billion

Free cash flow

¥20.0 billion

Assumed exchange rates: 1USD = ¥115, 1EUR = ¥130, 1CNY = ¥18.5
Compound annual growth rate (CAGR): Fiscal years to March 31, 2015 to 2018
Note: We formulate three-year mid-term management plans every two years.
(We plan to announce the new plan in May 2017.)

Sysmex Report 2016 14

 To Our Stakeholders

Our Financial Perspective

We invest proactively and provide
appropriate shareholder returns.

Generating and Using Funds

Proactive Investments to Augment
Corporate ValueThanks to its high market share in the hematology, hemosta-

into building the immunochemistry and life science ﬁelds

sis and urinalysis ﬁelds and growth in Asia, Sysmex is rein-

into pillars of growth, as well as into putting in place

To achieve further growth, Sysmex is investing to acceler-

forcing its proﬁtability and expanding its operating cash ﬂow.

IT infrastructure and recruiting and developing humanate expansion in such areas as immunochemistry and life

Research and Development Expenses(¥ billion)

20

We proactively invest the cash we generate into R&D,

resources to promote transformation. Regarding share-science. We also concentrate investment in R&D to gener-

capital expenditure and M&A to expand further. In addition

holder returns, we aim to ensure stable ongoing dividends

ate highly valuable new testing and diagnostic technolo-

to our mainstay businesses, we are concentrating investment

and further augment ROE.

gies, capital expenditure for factory expansion to meet our

15

10

global supply responsibilities, and M&A to enhance ourStable ongoing dividends

Target dividend payout
ratio of 30%

Reinforcing Growth and Proﬁtability

Hematology

R&D

Hemostasis

5development expenses and capital expenditure have

0

03/06

grown over the past 10 years.

Investment

03/10

03/16

Capital Expenditure (Tangible)

M&A

R&D in Immunochemistry, Life Science andOther Fields to Accelerate Future GrowthLife science

Capital Expenditure for Factory Expansion
to Meet Our Global Supply Responsibilities

15

M&A to Enhance Our Technology Platforms

10

Capitalexpenditure

8.1

technology platforms. As a result, our research andShareholder Returns

Operating Cash Flow

17.7(¥ billion)

20

Invest in Growth
Immunochemistry

Urinalysis

Invest in Promoting Transformation
Human resource
recruitment and
IT infrastructuredevelopment, etc.

Asia

13.0

5.6
5

Shareholder Returns
Sysmex aims to maintain a proper balance between

0

Dividend and Dividend Payout Ratio

aggressive investment, which is designed to sustain steadyhigh growth, and returns to our shareholders as our earning power increases. In terms of returns to shareholders,

Dividend (converted to basis following stock split on April 1, 2014)(Annual) <Left-hand scale>
Dividend payout ratio (Consolidated) <Right-hand scale>

(Yen)

60

52

sis and aim for a consolidated payout ratio of 30% under

29.8

40

our basic policy of sharing the successes of our operations
in line with business performance.

cal year ended March 31, 2006. Going forward, we plan
30

27.7
18.9

Stable Dividend on a Continuous Basis

15 Sysmex Report 2016

20.4%
20

15 12.5%

balance.

03/03

Sustained Appropriate Shareholder Returns

5

Maintenance of a Sound Financial Base

3.125
0

14 Consecutive Years of Dividend Increases

to augment ROE while maintaining a healthy ﬁnancial

25

10
15

20

Target Dividend Payout Ratio of 30%

ROE was 20.4% in the ﬁscal year ended March 31, 2016,
an improvement of 7.9 percentage points from the ﬁs-

we intend to provide a stable dividend on a continuous ba-

03/16

(%)

(%)

54

03/10

ROE

ROE
45

03/06

03/10

0

0

03/16 03/17(Forecast)Higher Income

03/06

03/10

03/16

Sysmex Report 2016 16

Sysmex’s Value Creation
We contribute to a bountiful society
by providing value in the in vitro diagnostics
field that addresses the problems society faces.

17 Sysmex Report 2016

Sysmex Report 2016 18

 Sysmex’s Value Creation

Our Business Model for Creating Value

By leveraging our strength in the IVD domain,
we will create new value to address
the issues facing society.

Sysmex has set forth “Shaping the advancement of health-

new testing parameters and providing value in other ways

care” as its mission, as stated in the corporate philosophy

that address the issues faced in advanced countries andfor the Sysmex Group. We are making the most of ouremerging markets alike.

strengths to develop business in the IVD domain, which

Furthermore, by reinvesting the value generated

is considered the gateway to healthcare. To realize ourthrough our operations, we aim to create new value incorporate philosophy, we are working to increase theresponse to issues that evolve as society’s needs andeﬃciency of testing and the quality of healthcare, creating

expectations grow.

Needs and Expectations

Issues Society Faces

Shaping the advancement of healthcare.

Generating Value
Social Value

Advanced Countries

Reducing Healthcare
Costs

Strengths

The Gateway to Healthcare

Advanced Countries

Income Model

IVD

Improving Testing Eﬃciency through Automation
By Creating New Testing Parameters:

Instruments

SupportSevices

Reagents

Extending HealthyLifespans

Meeting Needs in

Improving Accessto Healthcare

Early Detection of Cancer and Other Diseases
Realization of Better Preventive Medicine
Reduction of Burden on Patients
Emerging Markets

Emerging Markets

Putting Healthcare
Infrastructure in Place

No. 1 Share of
the Global Market

Hematology

Global Network

Increasing the Quality of
Healthcare･ Clinical Value ･ Speed ･ AccuracyMore than

190
Sales

Manufacturing

SupportServices

No. 1*1 Share of
the Global Market

Urinalysis

No. 1*2 Share of
the Global Market

Countries

Provide Products and Services
that Meet Regional Healthcare Needs
Increase Testing Quality
by Promoting Scientiﬁc Awareness Activities
Help to Overcome the Three Leading
Infectious Diseases

Immunochemistry

Integrated System + External Networks
Research andDevelopment

Hemostasis

Economic Value
Total shareholder returnROE(annualized rate)

Clinical Chemistry

SysmexTOPIX (Tokyo Stock Price Index)

20.4%
+

External
Networks

19.7%

Life Science

11.4%*1 Including our alliance with Siemens*2 Only in sediment urinalysis

See page 21 for Sysmex’s Strengths.

37.8%

See page 29 for Business Domains and Market Positioning.

-0.5%
03/96 03/00 03/05 03/10 03/16

Past
10 years

Past
5 years

Reinvestment

19 Sysmex Report 2016

Sysmex Report 2016 20

 Sysmex’s Value Creation

Sysmex’s Strengths

Based on a robust income model,
we have created a system to quickly address
customer needs and provide value around the world.
Income Model

Integrated System + External Networks

IVD instruments use reagents each time testing is per-support services. At present, reagents and support servic-

Sysmex operates its own global system spanning R&D,

As a result, we have earned a solid reputation among

formed. We also provide support services to ensure thates account for more than 60% of net sales. Furthermore,manufacturing, sales and support services. This structure

customers around the world.

customers can use our products with conﬁdence. As athe healthcare sector is relatively impervious to economic

enables us to meet complex needs and address the vari-

We are also vigorously pursuing open innovation

result, after customers purchase our instruments we

ﬂuctuations, so Sysmex anticipates steady growth.

ous issues customers face. Through this system, in addi-

and alliances to make use of technologies and ideas fromtion to providing the high-quality instruments, reagents

outside the Company and respond promptly to changing

and software that are needed for testing, we oﬀer high-market needs.

continue to generate income by providing reagents andvalue-added system products and online support.

SupportServices

SupportServices+

OthersInstruments

External Networks
Reagents

Total Sales

Open Innovation, Alliances, etc.

Sales
Composition++
Year 1

Year 2

Year 3

Year 4ȉȉȉȉ

Reagents

Internal Developmentof Instruments,
Reagents and Software

Direct Sales in
Response to
Voice of the Customer

Proactive Investment
in R&D

Indirect Sales Tailored to
Regional Characteristics

Provide Value

Global Network
We have built up global networks for direct and indirect

countries, we are actively developing our operations insales, support services and reagent manufacturing. Thisemerging markets, and we currently have 63 Group com-

structure enables us to provide customers in more thanpanies operating in 41 countries. In the ﬁscal year ended

190 countries around the world with high-quality prod-

March 31, 2016, our overseas sales ratio reached 84.3%.

+

R&D

Sales

Added Value

ucts and stable support services. In addition to advanced
Subsidiaries and Aﬃliates
Fiscal Year Ended
March 31, 2006

31

companies

Net Sales by Destination
Fiscal Year Ended
March 31, 2016

63

companies

Fiscal Year Ended
March 31, 2006

Fiscal Year Ended
March 31, 2016

17.9%

Americas

23.6%

28.9%

EMEA

26.9%

7.3%
5.5%

China

40.3%

Asia Paciﬁc

25.8%

Japan

7.9%
15.7%

Products
Instruments, Reagents, Software

Manufacturing

System Products,
Online Support, etc.

SupportServices—Instruments—
High “Made-in-Japan”
Quality

Support Services
to Bolster
Customer Satisfaction—Reagents—
Global Structure to
Ensure Stable Supply

Scientiﬁc Activities
That Help Improve
the Quality of Testing

Customers (Hospitals, Laboratories, etc.)

Sysmex

Instruments

Voice of the Customer

Overseas sales ratio: 84.3%
See page 39 for Overview of Business by Geographic Region.

21 Sysmex Report 2016

See page 33 for Research and Development.

See page 35 for Production.

See page 37 for Sales and Support Services.

Sysmex Report 2016 22

 Sysmex’s Value Creation

Growth Frontiers

In addition to our mainstay fields, we aim to achieve
further growth by expanding our operations in
the immunochemistry and life science fields.
Medium-Term Growth Driver: The Immunochemistry Field

Growth Frontiers
Sysmex espouses “A Unique & Global Healthcare Testing

hemostasis and urinalysis ﬁelds. We aim to build an earn-

Immunochemistry testing has a wide range of applica-

companies. Utilizing these advantages, we are develop-

Company” as the vision for its long-term management

ings foundation that will support further increases in thesetions, from the diagnosis of infectious diseases, cancers

ing our business in this ﬁeld in Asia, including Japan andtargets, and the Company is working to maintain high lev-ﬁelds and are investing aggressively in future growth inand heart diseases to their courses of treatment. As such,

China, where demand is expected to grow.

els of growth and increase proﬁtability further. Currently,

ﬁelds such as immunochemistry and life science.

immunochemistry testing plays an essential role in theearly detection of diseases and treatments.

Sysmex is highly competitive in the hematology,

Sysmex’s strengths in the immunochemistry ﬁeld
include highly functional, highly sophisticated instruments

In addition to expanding our reagent parameters, wewill reinforce our support service structure by utilizing online support, thereby accelerating business developmentin the immunochemistry ﬁeld.

and unique reagent parameters not available from other

Anticipated Growth over the Medium to Long Term

Highly Functional, Highly Sophisticated Instruments
Hematology, hemostasis, urinalysis:
We will build the earnings foundation to support further Group growth by establishing

Our HISCL™-Series fully automated immunoassay system isourselves as the global leader in these core businesses.

highly sensitive and fast, being capable of measuring all parameters in 17 minutes. As these instruments can perform tests on

Immunochemistry:

minute samples, they oﬀer superior functionality, including highTo build the immunochemistry ﬁeld into a driver of growth over the medium term,levels of operability.

we will develop unique, high-value testing parameters and reinforce our competitiveness.

HISCL™-Series Characteristics

Life science:
We will contribute to the realization of personalized medicine and promote theGroup’s sustained growth by enhancing value through testing (diagnostics) based onleading-edge technologies.

High sensitivity

Speed

Minute samples

Usability

HISCL™-5000

Unique Reagent Lineup
Life science

Fiscal Year Ended March 31, 2016
ImmunochemistrySales

One of Sysmex’s distinguishing features in the immunochem-

practical application of technology employing a glycosylation

istry ﬁeld is its unique lineup of reagents that are not available

marker* to test hepatic ﬁbrosis. This creation of unique reagent

from other companies. We have succeeded in the world’s ﬁrst

parameters is one way in which we provide new value.

New Reagent Parameters

Hematology, hemostasis, urinalysis

HISCL™ M2BPGi™

HISCL™ TARC Reagent

Uses blood tests to quickly determine the progression of

Enables quantitative and swift measurement of pre-hepatic ﬁbrosis from chronic hepatitis to cirrhosis of thetreatment testing for atopic dermatitis

liver and on to hepatic cell carcinoma

Determining the Progression of Hepatic Fibrosis

Measuring Treatment Eﬀects on Atopic Dermatitis

Previously determinedthrough hospitalizationand tissue biopsy

In general, severity
determined throughdiagnosis by a physician

Can be determined only
by sampling blood

Plays a role in diagnosis
through objective
numerical data

*Glycosylation marker: A biomarker that targets structural changes in sugar chains present in glycoproteins

23 Sysmex Report 2016

Sysmex Report 2016 24

 Sysmex’s Value Creation

Growth Frontiers

Promoting Sustainable Growth in the Life Science Field

Aiming to Provide Healthcare Optimized for
Each Individual Patient through Personalized
Medicine

Promoting Personalized Medicine in the Life
Science Business

Liquid Biopsy Gaining Traction in
Personalized Medicine

Sysmex is pursuing research and development to accu-

In recent years, it has become evident that the genes,

invasive and costly approach. This technology, known as

To date, medical treatment has involved providing stan-

rately capture the trend toward personalized medicine.

proteins and cells present in blood and bodily ﬂuids

liquid biopsy, reduces the physical and economic burden

dardized diagnosis and treatment based on disease type.

To date, we have focused in particular on develop-

contain information about areas aﬀected by disease.

on the patient. It has also gained attention for its advan-

However, in the post-genome era it has become possible

ing unique testing technologies for diagnosis centering

Consequently, it is becoming possible to use sensitive

tage in enabling repeated testing (monitoring).

to decipher genes and analyze genes, cells and proteinson cancer. We have created a number of technologies,

analysis of blood and bodily ﬂuids to obtain the same level

Sysmex has set the strategy of realizing personalized

to provide treatments optimized to individual patient andproducts and services in this category, such as using theof testing results as the conventional method of conduct-

medicine through liquid biopsy and is conducting researchdisease characteristics.

OSNA™ method to test for lymph node metastasis of can-ing physical biopsies of the aﬀected specimen—a highlyand development to this end.

cer and providing Curebest™ 95GC Breast (for research)

It is becoming possible, for instance, to conduct test-

to predict the recurrence of breast cancer.

ing that will diagnose the risk of contracting a disease
and to perform testing that leads to the early detection of

We are also expanding our technology platforms inrecurrence. Similarly, there exists the potential to predict

the aim of realizing personalized medicine. To this end, inthe eﬀectiveness of drug treatment and side eﬀects.

2013 we acquired Inostics (now Sysmex Inostics) and are
pursuing business in this ﬁeld.

Such tests are making it possible to select and provide

Personalized Medicine Using Liquid Biopsy
Conventionally: Tissue Analysis (Biopsy)
Direct analysis of
the aﬀected specimen

Blood Analysis (Liquid Biopsy)
Analysis of disease-derived components
in the blood and bodily ﬂuids

Genes

medical treatment and drugs that are optimized for indi-

Proteins

viduals. In addition to reducing the burden on patients,

Cells

such testing is expected to help curtail healthcare costs.

Realizing Personalized Medicine through Testing
Conventionally: Same Treatment (Same Drug)

Personalized Medicine: Medical Treatment Appropriate for Individual Patients

Testing

Measuring Cancer Cells in Blood
Sysmex Inostics is using BEAMing technology

shorten testing times and labor requirements, with a view

(OncoBEAM™), which enables highly sensitive analysis of

to standardization.

minute quantities of cancer genes circulating in the blood,and plasma sequencing technology (PSS)* to conduct

medical institutions to create testing and diagnostic tech-groundbreaking R&D on cancer gene analysis and movenologies employing BEAMing technology.

forward with a lab assay service.

* Plasma sequencing technology (PSS): This gene sequence analysis technology assigns a unique identiﬁer to each DNA molecule, allowing each gene
to be identiﬁed, and then ampliﬁes the DNA, enabling a high degree of
speciﬁcity and sensitivity.

Conventional cancer gene testing uses surgically re-Sysmex Applications for Each Stage of Cancer

moved specimens, but BEAMing technology enables theStage

Screening

Diagnosis

Recurrence
Prediction

Prediction ofTreatment
Impacts

Monitoring

We are promoting collaboration with research andsame level of testing to be conducted on blood, thereby
reducing the burden on patients. This approach facilitates
repeated testing even on patients with whom removing

Application

Lymph nodemetastasis rapid
detection systemusing the OSNA™
method*Curebest™
95GC Breast(assay service forbreast cancer
recurrence
prediction
analysis)

the aﬀected specimen would be diﬃcult. As a result, thetechnology is expected to ﬁnd application in the early
OncoBEAM™/PSS(analysis of minute genetic mutations)detection of cancer recurrence and monitoring.
Until now, the use of BEAMing technology largely involved manual processes, but by leveraging the expertiseit has accumulated in automation, Sysmex is working to*OSNA™ method: Abbreviation for One-Step Nucleic acid Ampliﬁcation, a method developed by Sysmex.
This enables metastasis of a single lymph node to be determined in approximately 30 minutes.

25 Sysmex Report 2016

Sysmex Inostics

Sysmex Report 2016 26

Business Activities
Sysmex is leveraging its business in
the in vitro diagnostics domain to expand
its business globally.

27 Sysmex Report 2016

Sysmex Report 2016 28

 Business Activities

Business Domains and Market Positioning

We continue to grow by taking advantage of
our strengths in the expanding market
for in vitro diagnostics.
Active in the IVD Domain, Which Is Essential
to Healthcare

Examination

Diagnosis and Treatment

RecoverySysmex’s Core Testing Fields

Clinical Laboratory Testing

Clinical testing, used in medical diagnosis and treatment

In Vitro Diagnostics

In Vivo Diagnostics

Hematology*
Hemostasis
Urinalysis*
Immunochemistry
Clinical Chemistry*and others

X-ray/MRIElectrocardiogrammeasurement
Respiratory function
testing
Electroencephalogram
testingand others

or in monitoring the eﬀects of treatment, is essential tohealthcare. Clinical testing can be broadly divided into
two categories: in vitro diagnostics (IVD) that involve theexamination of blood, urine or cell samples taken from thebody and in vivo diagnostics that involve direct examination using X-rays or electrocardiograms. Sysmex’s primarybusiness is in the IVD domain.

Sysmex business ﬁeld

Platelets
Red blood cells

Hematology
Testing that measures and analyzes the number,
type and size of red, white and other blood cells[Anemia, leukemia, thrombocytopenia, etc.]

White blood cells(neutrophils)
White blood cells(lymphocytes)* Diagnostics used for medical checkups as well

Hemostasis
Testing of blood plasma to determine the ability ofblood to clot when wounded and to dissolve clots

FDP
Clotting
factors

Market Position[Hemorrhagic diseases (hemophilia, etc.), thrombotic
diseases (deep-vein thrombosis, etc.)]

D-Dimerthe leading company in the IVD domain.

Sysmex’s business in the IVD domain involves the proviworld, and we rank among the top 10 companies in themeet increasing healthcare needs in advanced countries

world in the IVD domain. In the three ﬁelds of hematol-and healthcare infrastructure being put in place in emerg-ogy, hemostasis and urinalysis (sediment), we have theing markets. At the same time, global competition is grow-leading share of the global market (including throughing increasingly ﬁerce, with companies from other sectors

alliances). In addition to these three ﬁelds, in Asia we areentering our ﬁeld. Sysmex is responding to this changing

developing our business in immunochemistry and otherenvironment by leveraging its unique strengths to maximize
its corporate value and steadily increase its market position.

growth ﬁelds, as we are aiming to position ourselves as
Market Scale and Sysmex’s Business Domains
MarketMarketGrowthScale($ million) Rate

Testing ﬁeld

Compositionof SalesShare of the Hematology Market
Production(Fiscal year ended Instruments Reagents
March 31, 2016)

Sales andService
Area

Other companies

3,100

6%

63.1%





GlobalRoche

Hemostasis

1,800

5%

17.4%





GlobalSiemens
EIKEN
CHEMICAL
bioMérieux

1,000
320

6%

Immunochemistry

18,000

6%

6.9%





Global

3.1%





Asia

—

Asia

JEOL
Furuno Electric

Clinical chemistry

7,400

5%

1.4%





Others (genes,
blood sugar, etc.)

21,700

—

8.1%





—

—

IVD market

53,000

6%

—

—

—

—

—

Note: Sysmex’s assumptions

29 Sysmex Report 2016

Testing to determine the status of viruses, hormones andproteins, and to determine causes and types of disease

Platelets[Infectious diseases (hepatitis, AIDS), cancer, allergies, etc.]
Viruses

Clinical ChemistryProteins

Hormones

Testing to determine the state of metabolism-relatedorgans by studying sugars, lipids, proteins and othercomponents

Lipids[Diabetes, arteriosclerosis, liver dysfunction, kidney
dysfunction, etc.]

SugarsProteins

SysmexLife Science

Inorganic
matterAlliances

Hematology
Urinalysis
Of which,
sediment urinalysis

Immunochemistry

Fbg

The IVD domain is forecast to continue growing tosion of instruments, reagents and software around theHematology
H

Lymph
nodes

DNA

Cancer cells

ȉ Lymph node metastasis testing
Testing to determine the metastasis of cancer cells to thelymph nodes
ȉ Gene testing
Testing to analyze genetic information, diagnose thelikelihood of contracting gene-related diseases ordetermine drug compatibility

Urinalysis
Testing for the presence of sugar, protein or blood in
the urine, the presence of urinary tract stones, kidney
function and signs of diabetes

 Own products  Alliances

Sysmex Report 2016 30

 Business Activities

Principal Testing Fields and Products

Hematology

Urinalysis

Immunochemistry

Hematology is a type of screening that counts red, white

Recent years have seen the entry into this business

Urinalysis entails testing for the presence of sugar, pro-

Immunochemistry tests are performed on blood serum,or other blood cells to determine whether a more detailed

by manufacturers from emerging markets, as well as ourtein or blood in urine and can be broadly divided into two

the supernatant ﬂuid isolated after blood separation.

examination is necessary. In addition to instruments,

competitors in Europe and the United States. Sysmex is

types: chemistry urinalysis and sediment urinalysis. The

Antigen-antibody reactions are used to test for the pres-these tests require speciﬁc reagents for ongoing use, such

responding by providing an extensive product portfolio,ﬁrst type involves dipping a test paper into urine to deter-

ence of HIV and the hepatitis virus and to check for

as for dilution and staining.

oﬀering unique clinical value and diﬀerentiating itself

mine whether the abovementioned substances are pres-cancer. These tests use specialized reagents. We are aug-from competitors with its support services. As a result, inent. In the second, formed elements, including blood andmenting our lineup of proprietary reagents and working

tion models, used for determining basic parameters, as2007 we acquired the top share of the global market in theother cells, are analyzed.

to develop our business in Asia, particularly in Japan andwell as ﬁve-part white blood cell diﬀerentiation models.

hematology ﬁeld, and our share has steadily risen since.

We introduced the world’s ﬁrst urine formed sedi-

China, through sales of the HISCL™-Series of fully auto-

Sysmex oﬀers three-part white blood cell diﬀerentia-

In the ﬁeld of animal testing, we provide IDEXX

ment analysis system—the UF-Series—that uses the ﬂow

mated immunochemistry analyzers, which perform highly

deliver a high degree of clinical signiﬁcance. We also oﬀer

Laboratories, Inc., with hematology analyzers for animals

cytometry method. This series has the leading share of thesensitive, high-speed assays on minute sample quantities.

a wide-ranging lineup of system products that can be usedon an OEM basis.

global market. Furthermore, in January 2016 we entered

Numerous reagents can be used with these models to

into a business alliance with EIKEN CHEMICAL CO., LTD.,

for rapid, high-volume testing in large-scale labs.

to expand our portfolio of analyzers of urine chemistry,(Five-part white blood cell diﬀerentiation instruments)

thereby responding to diverse urinalysis testing needs.

XN-Series

Reagents

XN-L-Series
HISCL™-5000

XN-1000™

UD-10™

XN-9000™

UF-5000™

Information Diversity and Function

UC-3500™
(For overseas sale only)

XN-450™

Clinical Chemistry
Clinical chemistry involves examining the enzymes, sugars
and proteins in blood serum and plasma to determine the(Three-part white blood cell
diﬀerentiation instruments)

nutritional status, liver and kidney functions, and testingfor contraction of conditions such as hyperlipidemia andReagents

arteriosclerosis.
Sysmex has signed agreements with JEOL Ltd. andReagents
pocH™-80i

Life Science

Furuno Electric Co., Ltd., involving automated clinicalXP-300™

The OSNA method, which Sysmex developed, has beenlaunched into markets for the use in systems for the rapid

Eﬃciency and Handling Capability

detection of lymph node metastasis of breast and othertypes of cancer.

Hemostasis
Hemostasis involves testing the blood plasma for two

and providing support services for hemostasis products.

blood functions: coagulation, or clotting, and ﬁbrinoly-This combined business now accounts for the leading

sis, the process by which blood clots are broken down.

share of the global market in the hemostasis ﬁeld.

This type of testing enables the diagnosis of hemophilia

selling these analyzers, leveraging its network in China andother parts of Asia.

Our BEAMing technology is also used to detect min-Reagents

ute quantities of genes in the blood, allowing for the early
detection and recurrence monitoring of cancer, monitor-

Othersing the eﬀects of anti-cancer drugs and the creation of
Our health monitoring

new tests.

and thrombosis and the monitoring of their treatment.

chemistry analyzers and issystem measures hemo-

Furthermore, testing blood beforehand enables health-globin levels without bloodcare professionals to determine whether blood is likely tosampling and is used as a

coagulate properly during surgery.

tool for monitoring athletic

In 1995, Sysmex concluded a business alliance withcondition.

Siemens Healthcare Diagnostics Inc. (previously, Dade
Behring Inc.), forging a synergistic relationship in selling

31 Sysmex Report 2016

CS-5100™

RD-100i™

LINOAMP BC™ (reagent)

ASTRIM FIT™

Sysmex Report 2016 32

 Business Activities

Research and Development

In addition to a wide range of proprietary technologies,
we are expanding the possibilities of growth byconducting R&D in collaboration with research
institutions around the world.
Technological prowess forms the foundation on which

Developing World-First Technologies

Sysmex has grown as a company. We consider R&D to be

Technopark and provided it with highly functional, high-An R&D Structure That Generates
Combinations of a Host of Technologies

performance testing equipment.

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

the wellspring of our expansion and, accordingly, we invest

developed the CC-1001, becoming the ﬁrst company inaggressively in this area. In the ﬁscal year ended March 31,

The integration of diﬀerent technologies employed in ourJapan to commercialize automated hematology analyzers.

2016, research and development expenses amounted to

instruments, reagents and software enables us to con-

Since then, we have developed a host of other world-ﬁrst¥17.7 billion (R&D expenses to net sales: 7.0%).

stantly incorporate voice of the customer into our product

IVD technologies. We are in the process of expanding ouroﬀerings. At Technopark, our hub for R&D, a congregation

business from our mainstay ﬁeld of hematology into thebroader IVD domain. We are also working to create new
diagnostic technologies toward the realization of person-of researchers and engineers in a host of ﬁelds—electri-

Three Technology Platforms for Blood andOther Analysis

cal, mechanical, biological, chemical and IT, among oth-

Sysmex has formulated its perspectives on intellectual

ers—encourages interaction and drives the creation andproperty, and the Company conducts invention identiﬁca-

fusion of new technologies. We have built up a global R&D

tion activities, acquires intellectual property rights andSysmex’s eﬀorts to improve IVD test quality at the micro-

structure comprising R&D facilities in the United States,

performs research into the intellectual property rights

scopic level and combine a wide range of technologies

Germany, China and other countries.

of third parties on a global basis. Our R&D divisions arealized medicine.

R&D Expenses/R&D Expenses to Net Sales(¥ billion)

(%)

20

20
R&D expenses
R&D expenses to net sales

17.7

15
10.7 11.2
10 9.012.3 11.9 12.1

13.2

14.6

15

9.2

8.9

8.3

9.6

9.7

10

9.9

8.8

8.3

5

7.2

6.6

7.0
5

0

0

03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16

have led to the establishment of technologies for particle

In addition to expanding our own technology plat-working together to strengthen liaisons and make intel-

measurement, ﬂuid control and detection. We currently

forms, through open innovation we are pursuing collabo-

lectual property activities more meaningful. We are also

have highly sensitive next-generation technology plat-ration with research institutes, universities and medical

bolstering the motivation of researchers by enhancing ourforms for measuring genes, cells and proteins. As we work

institutions in Japan and overseas. These eﬀorts havepatent award systems and system of bonuses for patent

toward the realization of personalized medicine, in addi-

led to the introduction of new candidates for diagnostic

performance.

tion to our own technologies we have been redoubling

parameters and enable us to bring advanced and highly

In recent years, counterfeit reagents purporting to be

eﬀorts to expand our technologies through proactive

valuable diagnostic technologies and reagents to frui-

Sysmex products have been discovered in emerging mar-

M&A and alliance activities. As one aspect of these eﬀorts,tion more quickly. To accelerate this initiative, in 2015

kets. To ensure the reliability of test results, we are work-in 2013 we converted German companies Inostics GmbHwe established the Sysmex Open Innovation Lab within

ing to ensure that appropriate reagents are used.

and Partec GmbH to our subsidiaries.

Promoting Open Innovation

Sysmex’s Technology Platforms

Technologies gaining
traction inpersonalized
medicine(high sensitivity)

OncoBEAM™ ȉ PSS

MI (molecular imaging)-FCM

Digital HISCL™

Clinical PCR*1

Clinical FCM

Ultrahigh-sensitivity HISCL™

Existing
technologies

OSNA™

FCM*2

HISCL™ (chemiluminescence)

Advanced andhigh-value
technologies(diagnostic technologies
and diagnostic reagents)

Generate quickly

Fusion of technologies
through open innovation

Universities
Biomarkers and othercandidates for highly
valuable diagnostic
parameters

Medical institutions
Research institutions

Sysmex’s technology platforms
Genes

Cells

Proteins*1 PCR: A gene ampliﬁcation technology for multiplying small quantities of DNA into large amounts*2 FCM: Method involving the ﬂow dispersion of minute particles and the use of laser light to optically analyze the minute ﬂows. Used primarily to observe individual cells

33 Sysmex Report 2016

Intellectual Property Activities That Increase
Our Competitive Advantage in the Global
MarketGenes, cells, proteins

Pharmaceuticalmanufacturers
Venture companies

Sysmex Report 2016 34

 Business Activities

Production

Our instrument production structure is designed toensure high levels of quality, and we are building
a global reagent production structure to ensure astable supply.
Instrument Manufacturing Aimed at Realizing
High “Made-in-Japan” Quality

time until customers receive our products and is lowering
distribution costs. In order to respond to overseas deliver-

Advanced Technologies Underpinning Our
Proprietary Manufacturing System

A Global Reagent Production Structure to
Ensure a Stable Supply

ies, the factory is capable of handling processes ranging
The “made-in-Japan” quality of Sysmex’s products hasfrom container loading to customs processing. As a result,

Sysmex has built a proprietary manufacturing support sys-

Demand for reagents is increasing in line with growth in ourearned us the trust of markets around the globe.

we ensure that products arrive at customer destinations

tem that makes use of information technology—a systeminstalled instrument base. Sysmex operates reagent factories

more quickly and enhance our logistics eﬃciency.

where technology underpins assembly tasks performed

at two locations in Japan, as well as seven locations in six oth-by people. One of the system’s components is Smart Pro,er countries. This network allows us to steadily meet demand

The instruments we provide must meet extremely
high quality requirements, but as they involve multiple

As around 90% of our instruments are shipped over-precision components, automated and mechanized pro-seas, we have in place quality control systems to comply

a manufacturing activity support system we developed.

in regions around the world. We also expect global demand

duction is diﬃcult. To address this issue, we have intro-with diﬀerent companies’ legal requirements, as well as an

In addition to supporting workers and handling process

to increase, so we are reinforcing our structure by setting up

duced leading-edge production and quality management

environmental protection system.

management and quality control, this system identiﬁes

and expanding reagent factories in various regions. We ex-technologies to support manual processes. The result is an

the status of an entire factory in real time, including suchpanded reagent factories in China in 2012, Singapore in 2014

accurate and highly eﬃcient production system.

information as the state of production and number ofand Germany in 2015. We are also increasing our reagent

We work in cooperation with Japanese suppliers who

workers, thereby controlling all manufacturing activities.

manufacturing area in the United States, an eﬀort scheduled

boast top-class world technological capabilities to ensure

We have also introduced the 3D Move Manual, which pro-

to begin full-scale operation in September 2017.

high levels of quality from the materials and component

vides three-dimensional video to demonstrate the work

When we expand reagent production factories, in ad-levels.

procedures involved in instrument assembly. Using IT todition to ensuring high levels of manufacturing quality andsupport human workers in this way enables us to increase

eﬃciency, we make a point of preparing for future increas-levels of both quality and productivity.

es in production items and taking the global environment

By producing our instruments in Japan*, we are able todeliver high-quality, high-value-added products to customers around the globe.

into account.

*Sysmex Partec products are manufactured in Germany

Instruments Manufactured in Japan for Delivery around the World
Building a Global Production Structure for Reagents

Establishment of i-Square, Our New Core
Instrument Factory
To prepare ourselves for growing instrument demand andGermany

substantially increase our manufacturing capacity, in June

China (Jinan)

2014 we established a core instrument factory, called

Japan (Seishin)
China (Wuxi)

i-Square. The new factory, combined with our existing

Japan (i-Square)

Kakogawa Factory and two factories at aﬃliated compa-

United States

Japan (Ono)Indianies in Japan, has tripled the Sysmex Group’s instrument
manufacturing capacity.
We have established a warehouse within i-Square that

Singaporeenables the facility to handle all processes from manufacturing to shipping. This arrangement shortens the lead

35 Sysmex Report 2016

Production using the 3D Move Manual

BrazilInstrument factories
Reagent factories

Sysmex Report 2016 36

 Business Activities

Sales and Support Services

We have built a structure to provide high-quality
products and support services to customers inmore than 190 countries around the world.

Sysmex Inspiring Trust and Confidence
through Its Sale and Support Services

Creating a Global Sales and Support Service
Structure Tailored to Regional Characteristics

Providing a Testing Environment That Instills
Confidence

downtime during which testing cannot be performed. In
addition to advanced countries, we are steadily increasing
the number of customers who employ this system in Asia

Sysmex plays an important role in supporting laboratory

Since its establishment of a subsidiary in the United

Sysmex builds support service structures that are attuned

and other emerging markets.

testing. Interrupted testing means that physicians become

Kingdom in 1991, Sysmex has expanded its direct sales

to markets. Our Customer Support Center provides sup-*Limited to customers with whom we have entered into speciﬁc agreements

unable to diagnose their patients. We work to preventand support service structure globally, conducting sales

port around the clock, 365 days a year* to ﬁeld inquiries

this situation by selling products and providing after-sales

and providing support services that meticulously meet

about Sysmex products and respond to any trouble. We

services and scientiﬁc information, thereby inspiring trust

customers’ needs. We are also accelerating our global

also have dedicated staﬀ with extensive specialized knowl-and conﬁdence among customers around the world. As adevelopment through indirect sales, utilizing networks onedge on hand to respond to scientiﬁc queries.

result, Sysmex enjoys high levels of customer satisfaction

the basis of alliances.

for its products and support service activities.

Providing New Added Value to Deliver Even
Better Test Results

We have established Customer Support Centers inJapan, the United States, China, Germany and SouthIn providing high-quality healthcare services, it ismeeting rapidly growing demand for testing in emerging

Making proposals tailored to individual regions, we are

Korea, and service engineers visit customer locations

important for customers to have a good understanding ofout the world to augment the quality of our support ser-markets by providing compact products that carry forward

directly, as needed.

Sysmex’s products. For this reason, in addition to commu-

vices. This information is also provided as feedback to ourthe functionality and operability of our high-end products.

We are also promoting the global rollout of our

nicating information, we conduct training on actual instru-

R&D divisions to aid in future product development.

In this way, we deliver products and services that meet

network support system, SNCS™ (Sysmex Network

ments to ensure that customers know how to use Sysmex

the needs of individual regions. In advanced countries that

Communication Systems). This system, which conducts

instruments properly and analyze data.

require highly specialized testing, in addition to provid-

quality control of customers’ instruments in real time andIn addition, Sysmex conducts scientiﬁc seminars

ing instruments and reagents we make overall laboratory

automatically monitors the operating environment, hasaround the world, helping to raise level of healthcare byproposals aimed at enhancing the eﬃciency of testing.

been adopted by and earned high praise from numerous

providing physicians and laboratory technologists with thecustomers. By determining instrument conditions in real

most recent information on hematology. We have heldtime, SNCS™ perceives errors before they arise. The sys-scientiﬁc seminars in Japan every year since 1978. We also

tem also allows instrument diagnosis and maintenanceconduct seminars on a regular basis in other countries

to be performed via remote operation, helping to reduce

throughout Asia, including China, Thailand and Indonesia.

We share the content of customer inquiries through-Customer Assessment in the United States
Sysmex Earns Highest Customer Satisfaction Rating for Overall Service Performance for the Past 10 Years
5.6

9.5

5.4

9.0

5.2

8.5

5.0

8.0

4.8

7.5

4.6

7.0

4.4

6.5

4.2

6.0

9.30
8.88

SNCS™ Network Support Service
Customer Support Centers

Quality Control Measurement Data
Activity Log Data

Customers(Hospitals, commercial laboratories)(Network support services)
2007
Sysmex2008
Competitor 1

2009

2010

Competitor 2Competitor 3

Evaluations at six levels from 2007 to 2012
Evaluations at 10 levels from 201337 Sysmex Report 20162011
Competitor 4

2012
Industry Avg.

2013

2014

2015

2016

Source: IMV ServiceTrak™ 2016 Hematology

Online Quality Control
Failure Prediction
Web Information Services, etc.

Sysmex Report 2016 38

 Business Activities

Overview of Business by Geographic Region

Americas
We have acquired a high market share in the hematology field in North America.
We aim to achieve further growth by establishing bases in Central and South America.

Activities in the Fiscal Year Ended March 31, 2016
Sales

Growth Trajectory
Urinalysis
4.2% Others 1.4%
Hemostasis 5.7%(¥ billion)

Up 20.1%
year on year

60

56.4

Hematology
88.6%

47.0

Sales by Business*

45

38.5
30

19.1 20.8

23.3 23.4

25.4 26.8

29.7*Includes sales from Japan to IDEXX (for animals)

15
Central and South America
11.8%
003/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16

Canada 4.1%

Sysmex commenced direct sales in the United States inand support service network through alliances. We are

2003. Since that time, we have earned a high degree ofreinforcing our support for distributors by setting up loca-

customer satisfaction by proposing advanced services andtions in key countries.

solutions, and our sales and market share in the region

the United States and Brazil. In preparation for further

subsidiary in Canada and began direct sales in that coun-demand growth, we are expanding our U.S. reagent factory,try. In Central and South America, we have built up a sales

and construction is scheduled for completion in 2017.

Market Overview
North America

Central and South America

Characteristics: • The world’s largest market

Characteristics: • Medical needs increasing in line with economic
growth• Number of insured people increasing, due toreforms in the medical insurance system

United States
84.1%• Population of approximately 620 million• Sharply rising medical expenses, increasingly diverse
medical needs, growing level of sophistication

Sales by Area

Operating Income (Segment Proﬁt)

We produce reagents at two locations in the region—

have expanded accordingly. In 2007, we also established a*Revision in intragroup transaction prices(¥ billion)

Initiatives

4

3.2
3

2.7

2.8
*
2.1
*

2

1.7

2.4
*

2.4
*

2.0
*

0.9

1

0.5
0

• Developing online service activities (through SNCS™,
virtual training, etc.) to enhance support services
Opening
an oﬃce to enhance sales promotion in the•
Direct Sales
70.9%

Indirect Sales
29.1%

Direct andIndirect Sales

03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16

1USD=¥120.1 in the ﬁscal year ended March 31, 2016
(1USD=¥109.9 in the previous ﬁscal year)

 Sales rose substantially, as service activities generating high levels of customer satisfaction and the competitiveness of the XN-Series led to higher sales of instruments, reagents and services.
 Operating income decreased due to a reversal in deferred service revenue and income from the fiscal year ended
March 31, 2015, and a rise in SG&A expenses to strengthen sales and support service activities in the United States.
 Status in Principal Areas• In the United States, sales grew due to higher sales of system products, stemming from the acquisition of largescale projects in the hematology field.
• In Central and South America, sales rose slightly, as the acquisition of a large-scale government project in Mexico
overcame the impact of depreciation in the value of the real.

west coast area of the United States• Entered agreements with distributors in 33 countries inCentral and South America, and established a sales andsupport service network• Setting up bases in major countries, including Brazil
and Mexico

Training studio(Sysmex America)

Achieving a High Level of Customer Satisfaction
through Advanced Support Services
We have customers across the vast expanse of North America.
To ensure that customers are able to use our products withpeace of mind wherever they are located, therefore, we areusing IT to augment our support services. For instance, we canprovide service using live feeds from our training studio at our
regional headquarters near Chicago to oﬀer assistance on instrument operating methods and repair procedures.

Customer

Network
Allows two-way communication between
the studio and a customer terminal

Aiming for Further Growth
By providing advanced support services and reinforcing

products in the hemostasis and urinalysis ﬁelds.

our sales and support service structure in the U.S. west

The market in Central and South America is expected

coast area, we are working to achieve further growth in

to expand in line with economic growth in the region. In

the hematology ﬁeld in North America.

response, we are establishing bases in major countries to

To achieve further growth going forward, we are also

further enhance our support for distributors.

working to boost competitiveness by introducing new

39 Sysmex Report 2016

Sysmex Report 2016 40

 Business Activities

Overview of Business by Geographic Region

EMEA (Europe, the Middle East and Africa)
We operate in more than 100 countries in this region,
including advanced countries and emerging markets.
We are building sales and support service structures tailored to regional characteristics.
Activities in the Fiscal Year Ended March 31, 2016

Growth Trajectory

Sales
Others 14.4%(¥ billion)

80

Up 8.2%
year on year
60

63.2

68.4

Hemostasis
10.8%

53.1
39.1

40

31.5

Urinalysis
4.8%

Hematology
70.0%

Sales by Business**Includes sales from Japan to IDEXX (for animals)

Others 5.6%
Middle East, Africa
13.4%
Eastern Europe,
Russia7.8%

Operating Income (Segment Proﬁt)

Five majorcountries
48.3%

8.6

4.6

5.7

4.5

3.5

0

5.1
*

Direct Sales
66.8%

Indirect Sales
33.2%

2.7
*

2.5

the United Kingdom, our ﬁrst time to do so overseas. We

region, in 2015 we expanded our reagent factory inestablished subsidiaries in countries and regions where

Germany, creating a structure to ensure a stable supply

Advanced Countries

Emerging Markets

Region: Five major countries (Germany, the United Kingdom,France, Spain, Italy), other parts of Europe

Region: Eastern Europe, Russia, Middle East and Africa

Characteristics: • Increasingly diverse medical needs, ongoing
sophistication

Direct andIndirect Sales

03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16

1EUR=¥132.6 in the ﬁscal year ended March 31, 2016
(1EUR=¥138.8 in the previous ﬁscal year)

 Sales increased throughout the region—in the Middle East, Russia and other emerging markets, as well as the five
major countries.

as potential areas of new growth• Population of approximately 1.7 billion

 Status in Principal Areas• In the five major countries, large-scale projects in Italy and Spain pushed up sales.
• In other parts of Europe, sales increased in Denmark due to the acquisition of major projects, as well as in other countries.
• Sales increased thanks to expansion in the hematology field in Poland, and in Russia due to the acquisition of a
project for a large-scale commercial lab.
• In the Middle East and Africa, sales increased thanks to the winning of a tender offer for facilities in Saudi Arabia
operated by the country’s Ministry of Health.

• Establishing bases in markets slated for future growth,
including Eastern Europe, Russia, the Middle East and AfricaOﬀ• ering compact instruments for small and mediumsized hospitals and other products and services in
response to emerging market needs

Reinforcing Structures in Response to Regional Characteristics
The EMEA region comprises more than 100 countries and is characterized by diverse
languages and business practices, presenting the need to build structures that caterto the characteristics of individual areas. We are meeting this challenge by establishing bases in the region, setting the stage for us to strengthen customer relationships
and proposal-making capabilities. In recent years, we have set up subsidiaries mainlyin emerging markets, including in Turkey in 2014 and Ghana in 2015, and bringing ournumber of companies in the EMEA region to 27.

 Operating income fell because of the revision in intragroup transaction prices and increased operating expenses
at Sysmex Partec and Sysmex Inostics.

41 Sysmex Report 2016

Characteristics: • Ongoing eﬀorts to build medical infrastructure inline with economic development• Amid eﬀorts to curtail rising medical costs, continuing laboratory mergers and closures, growing
needs for eﬃciency increases• Proposing systemization to address the diverse issues customers face, and enhancing testing eﬃciency and quality
Investingin the life sciences, FCM and other businesses
•

7.5

5.3

In response to growing reagent demand in the EMEA

Initiatives

Other parts ofEurope
24.9%

10.0

5.3

and support service structures.

distributors. In 1991, we began conducting direct sales in

Sales by Area

*Revision in intragroup transaction prices(¥ billion)

5.1

in Germany in 1972 and expanded our sales area throughof reagents.

39.4
35.3 36.4 35.2 37.0

03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16

5.0

markets were expected to grow and reinforced our sales

Market Overview

20

0

In the EMEA region, we established a representative oﬃce

Sysmex West and Central Africa (Ghana)Aiming for Further Growth
In advanced countries, eﬀorts are underway to curtail
medical costs, and laboratories are merging or closing. In

and support service structures and promote business.
We are positioning EMEA as an important location forresponse, Sysmex is suggesting ways to increase labora-

R&D in the life sciences and FCM businesses, as well as

tory eﬃciency and promoting high-value-added proposals.

manufacturing, and plan to accelerate these businesses.

In emerging markets, we are continuing to set up sales

Sysmex Report 2016 42

 Business Activities

Overview of Business by Geographic Region

China
We have led other companies in developing a base ofoperations in this region.
We will shore up our position as the leading company in the IVD domain.
Activities in the Fiscal Year Ended March 31, 2016

Growth TrajectorySales(¥ billion)80

Up 30.7%
year on year

60

65.1

40

20

6.8
0

8.1

10.1 11.8

15.0

19.2

market early on. We established a reagent factory in Jinan

that approximately quintupled its production volume. We

in 1995, followed by a representative oﬃce in Shanghai inare proactively holding scientiﬁc seminars and engaging in

1996. Through measures such as these, we led other com-other eﬀorts contributing to the quality of testing.

the country. In anticipation of growing demand, in 2012
Hematology
43.1%

Urinalysis
12.2%

36.2

we expanded our reagent factory, setting place a system

panies in initiatives to build a robust base of operations in
Immunochemistry Others
6.5% 1.8%

49.8

Sysmex recognized the growth potential of the China

24.4

Sales by BusinessWe are expanding our business portfolio in China, suchas by entering the immunochemistry ﬁeld there in 2015.

Market Overview• In line with growing demand for healthcare, needs
for heightened testing eﬃciency and automation
are increasing, leading to a switch toward highend instruments

Characteristics: • Diverse business practices, varying by area
• Chinese government investing in infrastructure toincrease the quality of healthcare in the country

03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16

Hemostasis
36.4%• Population of approximately 1.4 billion

Operating Income (Segment Proﬁt)

Initiatives*Revision in intragroup transaction prices(¥ billion)

8

6.8
*

5.5

6

*

Indirect Sales
98.7%

4.1
*

4

2.7
2

0.7
0

Direct Sales (Hong Kong)
1.3%

0.8

2.4
*

2.3
*

2.3
*

Direct andIndirect Sales

1.3

03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16

1CNY=¥18.9 in the ﬁscal year ended March 31, 2016
(1CNY=¥17.8 in the previous ﬁscal year)

 Sales in the hematology, hemostasis and immunochemistry fields pushed up net sales substantially.
 Operating income was down year on year due to impact of the revision in intragroup transaction prices and higher
SG&A expenses to reinforce activities in the immunochemistry field.
 Status of Principal Fields• In the hematology field, sales were up year on year, reflecting robust sales of instruments in the XN-Series for system proposals.
In• hemostasis, sales were up significantly due to strong sales of the CS-Series and increased demand for fibrin parameter reagents.
• Sales were flat in the urinalysis segment, due in part to the effect of a period of transition to new products.
• In the immunochemistry field, sales increased due to expanded sales of theHISCL-Series, commencing in the fiscal
year ended March 31, 2015.

43 Sysmex Report 2016

• Entered in agreement with more than 200 sales distributors, and building our business base
• Making inroads in immunochemistry, as well as hema-• Establishing an advantage in this market, which has aneed for high-end instruments

tology, hemostasis and urinalysis ﬁelds

Moving into the Immunochemistry Field
Leveraging the geographic advantage conferred by our origins in Asia,
we have set up a sales structure that takes market characteristics into
account. By taking advantage of the brand power we have cultivated in
the mainstay ﬁelds of hematology, hemostasis and urinalysis, we havebegun proactive developments in the immunochemistry ﬁeld, as well.
We are promoting sales of the HISCL™-Series, a fully automated immunoassay system characterized by high levels of sensitivity and speed.
Going forward, we aim to augment sales by increasing the number of
unique measurement parameters.

Reagents

HISCL™-800

Aiming for Further Growth
We endeavor to step up our dominance in the in vitro diag-

We are also proactively undertaking eﬀorts on thenostics domain in the China market by stepping up sales

scientiﬁc support front, as we strive to further enhanceand distributor support in the immunochemistry ﬁeld, asawareness of the Sysmex brand and bolster our brandwell as the hematology, hemostasis and urinalysis ﬁelds.

presence in this market.

Sysmex Report 2016 44

 Business Activities

Overview of Business by Geographic Region

Asia Pacific
The Asia Pacific market has a population of around 2.4 billion people.
Through scientific awareness activities centered on emerging markets,
we are contributing toward increases in the quality of testing.
Activities in the Fiscal Year Ended March 31, 2016

Growth Trajectory

Sales
Others 9.8%

Hematology
68.7%

Urinalysis
8.1%(¥ billion)24

Up 12.3%
year on year

20.0
17.8

18

Hemostasis
13.4%

Sales by Business

14.7

The 1994 establishment of a representative oﬃce insupport service network. In this manner, we are fortifying

Singapore marked our entry into this market. Taking

our presence in the Asia Paciﬁc market.

advantage of our position as a company headquartered in

In 2014, we relocated and expanded our reagent fac-

Asia, we took the lead over our competitors in establishing

tory in Singapore. With this factory, combined with ourbases broadly across the region. Recent activities include

reagent factory in India, we are making steady strides

opening a branch in Myanmar in 2015, strengthening sup-toward meeting increased reagent demand in the region.

port services and building an industry-leading sales and

12

6

0

4.0

5.3

5.0

5.8

7.1

7.8

9.0

Market Overview

03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16

Taiwan, South Korea,
Mongolia
30.1%

Operating Income (Segment Proﬁt)

Southeast Asia
40.6%

Characteristics: • Includes both advanced and emerging markets,with diverse languages and business customs• In advanced countries, increasingly diverse healthcare needs and growing sophistication

Sales by Area

• In emerging markets, demand for healthcare andtesting is rising in tandem with economic growth.
• Government-led advances in healthcare infrastructure development in some countries• Population of approximately 2.4 billion*Revision in intragroup transaction prices

Initiatives(¥ billion)

2.0

1.8
*

Oceania
11.4%• By establishing local subsidiaries and through distribu-

South Asia 17.9%
1.5

1.3
*
1.0
*

1.0

0.8
0.5

0.5

0.6

0.3
0

tor activities, building a regionally optimized sales andservice structure

1.2
*

0.7
*
0.3
*

Direct Sales
45.1%

Indirect Sales
54.9%

Direct andIndirect Sales

03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16

 Net sales for the region increased, with higher sales centered on the hematology field in India, Indonesia andSouth Korea.

• Developing scientiﬁc awareness activities in each country
Strengthening Scientiﬁc Awareness Activities to Raise
the Quality of Testing in Emerging Markets
In some emerging markets, there is a need to conduct quality
assessments to ensure the accuracy of testing results and further
increase the quality of testing. Sysmex works with local governments and academic societies to conduct external quality control*,thereby contributing to the standardization of testing results. We
also provide academic materials catering to national and regional
characteristics, and hold scientiﬁc seminars. Eﬀorts such as theseare designed to enhance awareness of the importance of testing.

 Operating income increased, reflecting higher sales.
 Status in Principal Areas• Sales increased in Southeast Asia, centered on higher sales in the hematology field in Indonesia, Vietnam and thePhilippines.
• In South Asia, sales were up due to expansion in the hematology and clinical chemistry fields in India and significant increases in Bangladesh.
• Sales were up slightly in Oceania, reflecting the acquisition of large-scale projects in Australia, as in the previous year.
• Sales were up in South Korea, centering on hematology instruments and reagents.

45 Sysmex Report 2016

• Commencing direct sales in India in the hemostasis andurinalysis ﬁelds• Expanding our product portfolio by leveraging our brandstrength in the Asia region.

Held a scientific seminarin the Philippines in 2015(attended by 853 people)* External quality control: These activities are conducted to check differences in testing results at different medical institutions and perform
calibrations. Instruments are adjusted by comparing the measured results
obtained at individual medical institutions with the reference values set
by standard instruments.

Aiming for Further Growth
Going forward, demand in many countries is expected

governments, Sysmex is working to steadily increase its

to increase in line with economic growth. By enhanc-market share in the hematology ﬁeld. In the hemostasis,

ing its direct sales structure and stepping up scientiﬁcurinalysis and immunochemistry ﬁelds, we are launchingawareness activities in collaboration with various national

new products to expand our product portfolio.

Sysmex Report 2016 46

 Business Activities

Overview of Business by Geographic Region

Japan (including exports to overseas subsidiaries)
As a leading company in the IVD domain, we aim to boost overall laboratory sophisticationand efficiency, and are working to create new testing parameters.

Activities in the Fiscal Year Ended March 31, 2016

Growth Trajectory

Sales (including intra-area transfers)(¥ billion)160

Up 17.2%
year on year

144.0
122.9

120

103.8
80

64.9 66.8 69.0 66.4

75.7

Intra-Area Transfers(Exports to Group
Aﬃliates, Others)

82.7 88.1

Sales to External
Customers(IDEXX and Others)

40

Sales to External
Customers (Japan)

0

03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16

Others*25.4%

Hematology
42.9%

Sales by Business
Sales to External
Customers (Japan)

Immunochemistry
8.6%
Urinalysis
5.6%

41.7
*

7.4
0

Direct Sales
100.0%

31.1
*

12

7.8
4.6

2.9

6.8
*

8.6
*

We are also working to create new value as a hub for

products in the 1990s. Centered on the hematology ﬁeld,

R&D and manufacturing. We manufacture high-end instru-

we have also expanded our eﬀorts to encompass the ﬁelds

ments in Japan for export to other counties and shipmentof hemostasis, urinalysis, immunochemistry and the life

to customers in a variety of locations around the world.

sciences. Furthermore, we have enhanced our support

Market Overview

Direct andIndirect Sales

11.9*
Sales to External Customers (Japan)

03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16• Amid calls to reduce healthcare spending, a growing focus on personalized medicine and preventive medicine

Initiatives• As a comprehensive IVD supplier, supply products in a

*Revision in intragroup transaction prices

20.1*

support service.

hematology instrument in 1963 and launching system

Hemostasis17.5%(¥ billion)

24

over the years by developing Japan’s ﬁrst automated• Increasingly diverse and sophisticated healthcare
needsOperating Income (Segment Proﬁt)

36

service structure, including through the SNCS™ network

Characteristics: • Decline in the birthrate and rapid aging of the
population* “Others” includes clinical laboratory
information systems and other items.

48

Sysmex has contributed to the development of testing

wide range of ﬁelds in addition to hematology, and propose solutions that boost overall laboratory eﬃciency• Develop new and unique testing parameters in the immunochemistry ﬁeld

Stepping up Our Proposal of Solutions Leading to Higher Levels of Overall Laboratory Sophistication and Eﬃciency
By optimizing laboratory workﬂows, Sysmex makes high-valueadded proposals, such as shortening the amount of time required
for testing. As a result, laboratory technologists can provide
physicians with more detailed information in combination withtest results. In addition, the use of IT to manage laboratory data
facilitates complex judgments and veriﬁcation and allows testing
results to be communicated to physicians quickly.

Workflow
improvement
proposal(sample laboratory)

1USD= ¥120.1, 1EUR= ¥132.6 and 1CNY= ¥18.9 in the ﬁscal year ended March 31, 2016
(1USD= ¥109.9, 1EUR= ¥138.8 and 1CNY= ¥17.8 in the previous ﬁscal year)

 Sales and operating income in the Japan geographic region grew, due to higher intra-group sales to Group affiliates(overseas) and a revision in intragroup transaction prices.

Aiming for Further Growth In Japan (sales to external customers), reagent sales increased, centered on the immunochemistry field, but instrument sales fell, leading to a slight year-on-year decrease.

Sysmex will work to expand its immunochemistry businessAs a hub for the R&D and manufacturing functions,in the Japanese market by increasing its number of uniquedivisions in Japan will support the Sysmex Group’s global

 Favorable instrument sales to IDEXX pushed up sales.

measurement parameters and promoting its HISCL™

business expansion.

brand of fully automated immunoassay systems.

47 Sysmex Report 2016

Sysmex Report 2016 48

Striving for Sustainable Increases in
Corporate Value
By putting the “Sysmex Way,” the corporate
philosophy for the Sysmex Group, into action,
we work to contribute to society and achievesustainable increases in corporate value.

49 Sysmex Report 2016

Sysmex Report 2016 50

 Striving for Sustainable Increases in Corporate Value

Corporate GovernanceBy enhancing management soundness andtransparency, we aim to maximize
the corporate value of the entire Group.
Corporate Governance StructureManagement Organization
Sysmex recognizes that reinforcing corporate governance

We are also strengthening the Managing Board’s audit

is an important management issue. In accordance with theand supervisory functions by appointing outside members.

“Sysmex Way,” the corporate philosophy for the Sysmex

The management structure currently comprises 13

Shareholder’s Meeting

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

Group, we have adopted a structure designed to augment

members of the Managing Board (of whom four are

management soundness and transparency, as well as in-outside members). Three members of the Managing

creasing management speed and eﬃciency. In June 2016,

Board are also members of the Audit and Supervisory

Sysmex transitioned from the form of a company with aCommittee (of members of the Audit and Supervisory

Board of Corporate Auditors to a company with an Audit

Committee, two are outside members of the Managing

Compensation Committee

and Supervisory Committee. By giving Managing Board

Board). Furthermore, the Company has 19 executive of-Business Execution

voting rights to members of the Managing Board who are

ﬁcers (of whom seven are also members of the Managing

members of the Audit and Supervisory Committee, we are

Board). In addition, the Company has introduced thereinforcing the Managing Board’s audit and supervisory

executive oﬃcer system to speed up its decision-making onfunctions, increasing management transparency and ob-business execution and respond more swiftly to changes

jectivity, and enhancing the corporate governance system.

in the business environment.

Election/Dismissal

Auditing/supervision Members of the Managing Board(Members of the Audit andSupervisory Committee)

Election/Dismissal
Audit andSupervisory
Committee

Cooperation

Nominating Committee
Cooperation

Internal
Audit
OfficeAccounting
Auditors

Chairman and CEO
Risk Management Committee

Global Strategy Committee
Steering Committee

Executive Officers

Accounting Auditing

Compliance Committee

Divisions,
Subsidiaries and Affiliates

Advances in Corporate Governance(Fiscal years to
March 31)

〜2001

Management
organization

Adopting Executive offier system

Term of office
for members of
the Managing Board

One year
Note: Two years for memberof the Audit and Supervisory
Committee

Two years

11

12

11

10

Nine

Eight

Members of
the Managing
Board (outside)
Corporate
auditors(outside)

From June 2016
Company with an Audit andSupervisory Committee

Company with a Board of Corporate Auditors

Executive
officer system

Number ofmembers of theManaging Board

2017

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Seven

Nine

One

One
(out of three standing corporate auditors)

Accounting
standards

Philosophy

51 Sysmex Report 2016

Four

Two
(out of four standing corporate auditors)

Japanese GAAPFounding philosophy

13 (one woman)

Activities

Members

Meetings in the ﬁscal
year ended March 31,
2016Managing Board

Deliberate important matters related to management

Members of the Managing Board

14 (rate of attendance: 99.5%)

Global Strategy
Committee

Deliberate on the Group’s management direction andmatters of strategic important

Chairman and CEO andsenior executive oﬃcers

12

Steering Committee

Deliberate important matters related to overall Group
operations as an advisory body to facilitate decisionmaking by the Chairman and CEO

Chairman and CEO andexecutive oﬃcers

19

Organization

Audit and Supervisory Committee
Of the three members of the Audit and Supervisorydetails of Internal Audit Oﬃce activities, the Audit andCommittee, two are outside members of the Managing

Supervisory Committee is in place to provide instruction

Board. Members of the Audit and Supervisory Committee

to the Internal Audit Oﬃce, as necessary.

attend meetings of the Managing Board, as well as of
IFRS (From the first
three months of the
fiscal year ending
March 31, 2017)“Sysmex Way,” the corporate philosophy for the Sysmex GroupThe Audit and Supervisory Committee works closely

the Global Strategy Committee and Steering Committee.

with the accounting auditors on the audit plans report

In this way, members of the Audit and Supervisory(annual), the audit results reports (annual), and conduct-

Committee monitor the appropriate execution of duties

ing internal control audits related to ﬁnancial reporting byby members of the Managing Board. Depending on theexchanging information and opinions as necessary.

Sysmex Report 2016 52

 Striving for Sustainable Increases in Corporate Value

Corporate Governance

Executive Compensation(Fiscal Year Ended March 31, 2016)

Compliance

Risk Management

Based on our Group philosophy, the “Sysmex Way,” we de-To control groupwide risk management activities, Sysmex

Sysmex determines executive compensation amounts

Fixed compensation

ﬁne our view of compliance as “conducting business activi-

established a Risk Management Committee, whichand calculation methods by making a clear link between

29%

ties not only in compliance with applicable laws and regula-is chaired by a risk management oﬃcer, the Group’s

operating performance and responsibility for achieve-tions, but also based on fairness and high ethical standards.”

chief executive in charge of risk management. The Risk

ment. Compensation for members of the Managing Board

In accordance with this deﬁnition, we have established aManagement Committee identiﬁes major risks having theCompensation for
Members of
the Managing Boardin the Fiscal Year Ended
March 31, 2016

Global Compliance Code, in which particularly important

potential to signiﬁcantly impact the Group’s business andconformance rules and behavioral guidelines for all Groupconsistently observes the results of risk response and mon-executives and employees to abide by, and conducts train-

itoring by individual divisions and aﬃliated companies.

(Excluding Outside
Members)

ing and works to instill this code. The code describes ourdivides broadly into ﬁxed and variable portions (including
stock options). Fixed compensation is determined on thebasis of a member’s position, while variable compensation varies depending on performance. Compensation
for corporate auditors comprises only a ﬁxed portion.

prevention of bribery, adherence to international guidelines

world, and we act accordingly. With regard to our qual-

such as the Universal Declaration on Human Rights, as well

ity management system, nearly all Group companies

71%

as research and development. We also set forth a bylaw forhandling development or manufacturing functions haverevising this code once every two years, in principle, to respondconstructed management systems in line with and ob-

to changes in our internal and external environments.

tained certiﬁcation under the ISO 9001 or ISO 13485*1

Compensation Committee.

Breakdown of Executive Compensation (Fiscal Year Ended March 31, 2016)
Total amount of executive compensation by executive category, total amount by type of compensation and number of executives receiving compensation
Total compensation by category (¥ million)

Total
compensation(¥ million)

Basic
compensation

Members of the Managing Board(excluding outside members)

865

251

Corporate auditors*(excluding outside corporate auditors)

36

Executive category

Outside executives

17

Stock options

59

36

—

17

—

ensure compliance with laws and standards around the

Variable compensation

Compensation amounts are discussed and determinedby the Managing Board following deliberation by theBonuses

Retirement
beneﬁts

554

—

—

—

—

—

Number of
executives

8

2
3*The Company was a company with corporate auditors through the ﬁscal year ended March 31, 2016.

Sysmex formulates internal control regulations withinternational standards. Of our 64 Group companies, 31

regard to security export control and registers for approval

have received ISO 9001 certiﬁcation and 19 have obtainedwith the regulatory authorities at the Ministry of Economy,

ISO 13485 certiﬁcation. Sysmex also conducts manage-

Trade and Industry. Under the Compliance Committee,

ment reviews and audits of quality activities at its princi-

we have established a Security Export Control Committee.

pal Group companies to conﬁrm that the management

Based on our internal control regulations, this committee

system is operating properly. In addition to quality policy

strives to reinforce our security export control system andtraining for all Group employees, we conduct specializedthoroughly verify the destinations and purposes of ourquality education targeting speciﬁc departments and job

export of commodities and technologies.

types. To share quality-related information throughout the

To strengthen the security export control system forGroup and reinforce our systems, once a year we hold a

the Group as a whole, we are introducing management

meeting at which quality-related division managers fromsystems that link with enterprise resource planning (ERP)

our headquarters, Sysmex Corporation, as well as regional

systems at regional headquarters overseas in an eﬀort toheadquarters and aﬃliates gather.

ensure management thoroughness and increase eﬃciency.

Hisashi Ietsugu

Member of theManaging Board

sions in light of our own standards, as well as to observe

Compliance Structure
Amount of compensation by type (¥ million)

Executive category

Regarding disclosure, we make it a rule to disclose any
information that we believe will aﬀect investment deci-

Executives Receiving Total Compensation of ¥100 Million or More
Name

Regarding quality, we have constructed a system tothoughts on ethics in relation to research and development,

Basiccompensation

Stock options

Bonuses

Retirement
beneﬁts

Total
compensation(¥ million)

59

20

172

—

251

applicable laws and regulations concerning securities
Group Compliance Officer
Compliance Committee

trading and the Rules on Timely Disclosure of Corporate
Information by the Issuer of Listed Security and the Like
established by stock exchanges.
*1 ISO 13485: Quality management system for the design and manufactureof medical devices

Sysmex Group companies
Compliance Officer of Group companies

Divisions

53 Sysmex Report 2016

Sysmex Report 2016 54

 Striving for Sustainable Increases in Corporate Value

Corporate GovernanceIR Activities to Enhance Corporate Value

Proactive Disclosure

External Evaluations for IR Activities

Sysmex recognizes that investor relations activities are an

At brieﬁngs and through shareholder newsletters, we

In addition to ﬁnancial results brieﬁngs and conference

In 2015, Sysmex won the IR Grand Prix Award, sponsoredimportant facet of corporate management, and discloses

regularly obtain information through questionnaires andcalls, in the supplements to its ﬁnancial results Sysmex

by the Japan Investor Relations Association, demonstrat-

appropriate information in a timely manner. By commu-

reﬂect evaluations from our shareholders and the market

proactively discloses voluntary information such as oper-

ing a strong evaluation of its IR activities.

nicating directly with shareholders and investors, we haveinto our management.

ating performance by geographic region, type of businessWe aim to continue conducting high-quality IR activi-

also put in place a system to quickly provide third-party

and product category. At our annual technology presenta-

ties going forward. To this end, we will proactively disclose

evaluations and requests as feedback to management.

tions, the people in charge of R&D divisions explain our

information outside the Company and provide feedback

R&D progress, thereby communicating our R&D successes

into the Company, as we endeavor to reﬂect the results ofand Sysmex’s future potential.

IR activities to management.

At meetings with institutional investors and analysts,
we engage proactively on such themes as R&D, shareholder returns and capital policies, as well as our management

Objectives of Sysmex’s IR Activities

In the ﬁscal year ending March 31, 2017, we are vol-strategies, business model and medium-term manage-

untarily adopting the International Financial Reporting

ment plans. Although headquartered in Kobe, Sysmex

Standards (IFRS). Our aim is to enhance convenience toObtainevaluations andrequests from
capital markets

visits locations including Tokyo, the United States, andEuropean and Asian countries to conduct IR meetings. In
the ﬁscal year ended March 31, 2016, we conducted 365

shareholders and investors by facilitating the international
comparison of ﬁnancial information.

meetings.

IR Grand Prix
Award ceremony

Sysmex also provides other opportunities for directinteraction, such as hosting tours of its overseas and domestic facilities.
Meanwhile, we strive to introduce information about
our business to individual shareholders and investors in aneasy-to-understand manner via shareholder newsletters,
our website and various video content.

Enhance corporate
value throughDisseminate
dialoguehigh-quality
information ina timelymanner

Reﬂect promptly
in management
and IR activities

Major Awards in the Fiscal Year Ended March 31, 2016 (IR Activities)
SponsorAwardsJapan Investor Relations
20th “IR Grand Prix Award” (only two companies selected out of the 263 participating)
Association
Securities Analysts
Association of Japan

Selected for excellence in disclosure at the 2015 Awards for Excellence in Corporate Disclosure,ranking ﬁrst in the pharmaceuticals category and in excellence in disclosure to individual investors

Institutional Investor

Ranked in ﬁve categories by Institutional Investor 2016 in the Japanese healthcare and pharmaceuticals category, including “Best CEO” and “Best IR Professional”

Investor Relations Policy
Principal IR Events
Event

1. IR Goals and Basic Policy
Activities

Technology presentations

Explanations from people in charge of R&D divisions about R&D progress

Sysmex IR Day(business oﬃce tours)

Every other year
In 2014, instrument factory tours and explanations about our manufacturing structure andcharacteristics from the executive in charge

Overseas facility tours

Every other year
Tours of hospitals and other facilities actually using our products and explanations byexecutives at local subsidiaries about the market and Sysmex’s strengths

The basic policy of Sysmex in IR activities is to disclose corporate information on performance, ﬁnancial position, forecasts of the
future and management strategies in a fair, prompt, accurate and easy-to-understand manner, to ensure accountability to shareholders and other investors and gain proper understanding about management and business activities.

2. Basis of Information Disclosure
Sysmex discloses corporate information in accordance with applicable laws and regulations concerning securities trading and theRules on Timely Disclosure of Corporate Information by the Issuer of Listed Securities and the Like (“Timely Disclosure Rules”) established by the stock exchange. The Company also seeks to disclose corporate information not required by the Timely Disclosure
Rules fairly and promptly, to help shareholders and other investors better understand the Company.

3. Methods of Information Disclosure

Company tours for individual
shareholders

Tours of instrument factories and other business oﬃces

Sysmex releases corporate information required under the Timely Disclosure Rules via TD-net, operated by the Tokyo Stock
Exchange. The Company posts information through TD-net on its website as promptly as possible. The Company also provides
corporate information not subject to the Timely Disclosure Rules on its website.

Company brieﬁngs forindividual investors

Company brieﬁngs at major cities throughout Japan by top management and people incharge of IR

4. IR Quiet Period

IR meetings

Participation in conferences hosted by securities companies, visits to institutional investors in the United States and European and Asian countries, and meetings with investors
and analysts in Japan and overseas

55 Sysmex Report 2016

Sysmex observes a quiet period from the day after the closing date of each quarter until the release of earnings statements.
During this period, the Company will refrain from replying to questions or commenting on earnings projections. However, in theevent that results are expected to deviate signiﬁcantly from the projections during the quiet period, the Company will releaseappropriate information.

Sysmex Report 2016 56

 Striving for Sustainable Increases in Corporate Value

Members of the Managing Board

Hisashi Ietsugu

Masayoshi Hayashi

Yukio Nakajima

Susumu Nishiura

Masayo Takahashi

Chairman and CEO

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

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

Member of the Managing Board (Outside)
Independent Director

Member of the Managing Board (Outside), Independent Director

Assistant to the President and CEO

Corporate Communication, Corporate Business
Administration, Human Resources & GeneralAﬀairs, Corporate Executive Oﬃce

Apr. 1969 Joined TOA Electric Co., Ltd.
(current TOA Corporation)
Jun. 1998 Member of the Managing Board
Oct. 2004 Member of the Managing Board and Senior
Executive Oﬃcer, Managing Director
Jun. 2008 Member of the Managing Board and Senior
Executive Oﬃcer, Senior Managing Director
Jun. 2010 Retired from TOA Corporation
Jun. 2013 Joined the Company, Member of theManaging Board (current)

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

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

Apr. 1973 Joined the Company
Jun. 1999 Member of the Managing Board, Executive
Vice President of Corporate Business Planning
Apr. 2005 Member of the Managing Board andExecutive Oﬃcer, Vice President of Corporate
Business Planning
Apr. 2009 Member of the Managing Board and Senior
Executive Oﬃcer, Managing Director
Apr. 2013 Member of the Managing Board and Senior
Executive Oﬃcer, Senior Managing Director(current)

Oct. 1992 Ph.D. of Medicine and Assistant professor of Ophthalmology, Kyoto University Hospital
Oct. 2001 Associate professor, Team Leader of retinal regeneration project, Translational Research Center,
Kyoto University Hospital
Apr. 2006 Team Leader, Laboratory for Retinal Regeneration Research, RIKEN Center for Developmental
Biology, Japan
Nov. 2014 Project Leader, Laboratory for Retinal Regeneration Research, RIKEN Center for Developmental
Biology, Japan (current)
Jun. 2016 Joined the Company, Member of the Managing Board (current)

Koji Tamura

Kazuya Obe

Yukitoshi Kamao

Koichi Onishi

Kazuhito KajiuraMember of the Managing Board and Senior
Executive Oﬃcer, Managing Director

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

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

LS Business Unit

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

Mar. 1978 Joined the Company
Apr. 2013 Executive Oﬃcer, Executive Vice President of
Business Administration
Jun. 2016 Member of the Managing Board (Memberof the Audit and Supervisory Committee)(current)

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

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

Jul. 1971 Joined Kobe Steel, Ltd.
Jun. 2002 Executive Oﬃcer
Apr. 2004 Managing Executive Oﬃcer
Apr. 2007 Senior Managing Executive Oﬃcer
Jun. 2010 Retired from Senior Managing ExecutiveOﬃcer of Kobe Steel, Ltd.
Jun. 2010 President of Nippon Koshuha Steel Co., Ltd.
Jun. 2013 Executive Corporate Adviser
Jun. 2014 Joined the Company, Corporate Auditor
Jun. 2016 Member of the Managing Board (Memberof the Audit and Supervisory Committee)(current)

Sep. 1972 Joined Tohmatsu Awoki & Co. (current
Deloitte Touche Tohmatsu LLC)
Jun. 1989 Partner, Tohmatsu Awoki & Sanwa (current
Deloitte Touche Tohmatsu LLC)
Jan. 2013 Retired from Deloitte Touche Tohmatsu LLC
Jun. 2016 Joined the Company, Member of theManaging Board (Member of the Audit andSupervisory Committee) (current)

Sep. 1990 Joined the Company
Jun. 2001 Member of the Managing Board, Executive
Vice President of International Business
Management
Apr. 2005 Member of the Managing Board andExecutive Oﬃcer
Apr. 2009 Member of the Managing Board and Senior
Executive Oﬃcer, Managing Director(current)

Mitsuru Watanabe

Kaoru Asano

Kenji Tachibana

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

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

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

HU Business Unit

R&D Strategic Planning

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

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

Corporate Business Planning,
Business Strategy Development

57 Sysmex Report 2016

Mar. 1980 Joined the Company
Apr. 2011 Executive Oﬃcer, Executive Vice President of
IVD Business Development
Apr. 2013 Senior Executive Oﬃcer, Executive Vice
President of Business Strategy Development
Jun. 2014 Member of the Managing Board and Senior
Executive Oﬃcer, Executive Vice President of
Business Strategy Development
Apr. 2015 Member of the Managing Board and Senior
Executive Oﬃcer, Managing Director (current)

Sysmex Report 2016 58

 Striving for Sustainable Increases in Corporate Value

Messages from Outside Members of the Managing Board

Susumu Nishiura, Member of the Managing Board (Outside)

Koichi Onishi, Member of the Managing Board (Outside) (Members of the Audit and Supervisory Committee)

Sysmex’s Managing Board and Steering Committee take an active,

Having been involved with the manufacturing sector for many years,

reﬂective and forward-looking approach to vigorous deliberations

my focus tends toward cost control, quality control, health and safety,

and make decisions accurately. As an outside member, during theseand environmental disaster prevention. In particular, my activities con-deliberations it is important for me to consider in particular whether

centrate on ensuring that internal control and risk management arevarious initiatives for realizing growth (M&A, alliances, etc.) will

suﬃcient. Speciﬁcally, as an outside member of the Managing Board, I

deliver to stakeholders the anticipated levels of investment results

focus continuously on potential risk factors that might be overlooked

and proﬁtability. In addition to operating performance, my remarks

as being matter of course by people from inside the Company.

focus on whether the Company is fulﬁlling its social responsibility andmaintaining compliance.
In recent years, Sysmex has rapidly globalized and expanded its
scale of business, becoming a global company in which overseas

When auditing, however, I believe “the remedy may be worse thanthe disease,” so I adopt a balanced approach to ensure that Sysmex will
not lose that sense of the vigor that has acted to its advantage to date.
Sysmex continues to deliver increases in sales and income based

sales account for a large percentage of the total. To continue

on its high level of competitiveness in its businesses. At the sameenhancing its corporate value going forward, it will be essential for

time, the Company moves enthusiastically into new ﬁelds, such as life

the Company to transform its organizational structure and cultivatescience. I see this stance as an important reason the Company has

human resources who can be active on the world stage. As an outside

maintained its growth trajectory.

member of the Managing Board, I intend to concentrate speciﬁcallyCompanies have a tendency to lose sight of their focuses on coston risk management and internal control systems, as well as humancontrol and quality control once results are realized, so I plan to con-resource development.

centrate in particular on those areas.

Masayo Takahashi, Member of the Managing Board (Outside)

Kazuhito Kajiura, Member of the Managing Board (Outside) (Member of the Audit and Supervisory Committee)

I agreed to become an outside member of the Managing Board

In agreeing to become an outside member of the Managing Board

because Sysmex’s management direction is in line with my own

and member of the Audit and Supervisory Committee, I aim to use

stance on creating new things the world has never seen before to

the spirit of acting independently according to one’s own beliefs I

promote the advancement of healthcare and realize the well-being of

have cultivated to date in my experience as a certiﬁed public accoun-

patients. Sysmex contributes to the advancement of healthcare fromtant. Taking a fair and unbiased stance, I intend to further enhancea diﬀerent perspective than companies involved in drug discovery andthe eﬀectiveness of corporate governance as the Company pursues

the development of therapies. With new laws now being drawn up in

business in a way that brings to life the Sysmex Group philosophy,

relation to regenerative medicine, I believe that companies whosethe “Sysmex Way.” Sysmex’s high overseas sales ratio and strongorganizations are designed to play by the conventional rules ofglobal competitiveness in hematology and other ﬁelds are undoubt-

healthcare will have an organizational disadvantage that Sysmex will

edly strengths. At the same time, as part of the Company’s growth

be able to overcome. Given these circumstances, I believe Sysmex’s

process it will need to concentrate on maintaining groupwide compli-

experience, operating performance and forward-looking stance willance and ensuring that organizations are in place to communicate

prove to be major advantages. Sysmex has supported healthcare

management information, including risk management, in a timelyaround the world by aligning its own proﬁts with beneﬁts to patients.

and accurate manner. As an independent executive who is an out-

I am convinced that Sysmex’s further development along these lines

side member of the Managing Board and a member of the Audit andwill support improvements in healthcare globally. From my perspec-

Supervisory Committee, I plan to apply the knowledge I have gained

tive as an outside member of the Managing Board, I will work to help

over more than 40 years as a certiﬁed public accountant and by audit-

ensure fair governance. At the same time, with regard to new technol-

ing and providing direction to global companies. Based on this experi-

ogy introductions and directions in science and healthcare, I will pro-ence, I will oﬀer advice on raising management eﬃciency, enhancing

vide information about major trends from the viewpoint of academia

accountability, enlivening deliberations and augmenting the manage-and healthcare professionals and voice my opinions proactively.

ment function. Through these eﬀorts, I will focus on the legality andappropriateness of management activities.

59 Sysmex Report 2016

Sysmex Report 2016 60

 Striving for Sustainable Increases in Corporate Value

Executive Officers

Reasons for Appointing Outside Members of
the Managing Board
Susumu Nishiura
Susumu Nishiura was appointed to utilize his abundant
experience and deep insight in corporate management for
management of the Company.
Masayo Takahashi
Masayo Takahashi was appointed to utilize her abundant
experience and deep insight relating to advanced medical
research, medical ethics and other ﬁelds as a clinician andresearcher for management of the Company.
Koichi Onishi
Koichi Onishi was appointed to utilize his abundant
experience and deep insight in corporate management foraudit, etc. of the Company.
Kazuhito Kajiura

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

Kazuhito Kajiura was appointed to contribute to ensuring
the soundness and transparency of the Board of Directors,

Michiaki Ishida

Yukio Hamaguchi

Hiroshi Nagao

enhancing its audit oversight functions, and other matters,

Senior Executive Officer

Executive Officer

Executive Officer

with his professional expertise and experience as a certi-

ICH Business Unitﬁed public accountant, and his extensive experience such

President of Sysmex International Reagents
Co., Ltd.

Executive Vice President of Corporate Business
Administration

Takashi Goda

as leading and auditing global companies.

Senior Executive Officer

Iwane Matsui

John Kershaw

Research & Industry Business
Solution Development

Executive Officer

Executive Officer

Business Management (Japan)

President and CEO of Sysmex America, Inc.

Junzo Yamamoto

Keiji Fujimoto

Juergen Schulze

Senior Executive Officer

Executive Officer

Executive Officer

Manufacturing Management
Instrument Production
SCM

Regulatory Aﬀairs & Quality Assurance
Scientiﬁc Aﬀairs
Customer Support

President and CEO of Sysmex Europe GmbH

Ikuo Otani
Executive Officer

Mamoru Kubota
Executive Officer
Executive Vice President of LS Business Unit
Life Science Product Engineering

Executive Vice President of Human Resources& General Aﬀairs

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

61 Sysmex Report 2016

Sysmex Report 2016 62

 Striving for Sustainable Increases in Corporate Value

Human Resource Development and Cultivation

Sysmex is working to develop diverse
human resources and create an attractive andpleasant working environment.

Promoting Diversity
As part of its initiatives respecting diversity, Sysmex aims
to create a working environment makes the most of indi-

Percentage of Female Managers(Director Level or Above)(%)

vidual employees’ capabilities without regard for nationality, race, gender, or physical disability.
To encourage the employment of women, we have2014.32015.32016.3

Sysmex Corporation

5.3

6.5

8.3

Overall Group

10.6

11.6

14.3

put in place a host of leave systems to support a balance

Human Resource Development Supporting theGeneration of New Value

Cultivating Human Resources Globally
The Sysmex Group has more than 7,000 employees, with

Sysmex honors human resource diversity, respects theoverseas employees making up more than half of thisindividuality of each employee and provides them with aﬁgure. In line with its global development, in 2015 Sysmex

workplace where they can realize their full potential. We

formulated a global system to facilitate human resource

value the spirit of independence and challenge, provide

development throughout the Group. Under this system,

employees with opportunities for self-fulﬁllment and

we promote initiatives to enhance the sense of unity

growth, and reward them for their accomplishments.

within the Group, develop next-generation human

We conduct activities that promote the understanding
and adoption of the “Sysmex Way,” the corporate philosophy for the Sysmex Group, in individual regions and divi-

resources, strengthen networks within the Group andbetween work and child-rearing and opened an in-house
daycare center. As a result, the percentage of female
employees at Sysmex Corporation has risen from 18.4%
in the ﬁscal year ended March 31, 2006, to 32.4% in theﬁscal year ended March 31, 2016. Over that same period,
the percentage of female managers (director level orabove) rose from 2.4% to 8.3%. (Our target for March 31,
2021, is 15% or higher.) For the Group as a whole, thepercentage of female managers was 14.3% in the ﬁscal
year ended March 31, 2016.

foster understanding of diﬀerent cultures.
For example, we have introduced the Global

sions to ensure that the entire Group is working toward

Apprentice Program targeting young employees. The pro-the same goals and that business activities are performedgram aims to cultivate future global human resources by

eﬃciently and with a sense of speed. As one example ofproviding employees with the opportunity to experience

our activities, we have introduced the Group CEO Award

working overseas early in their careers.

system to motivate employees. Under this system, awards

In addition, in 2015 we opened the Global

are presented to individuals and groups that contribute toCommunication Center as a new place to encourage

the realization of the “Sysmex Way,” and this information

human resource development and exchange. This centeris shared throughout the Company.

is designed to enhance individual employees’ skills andSysmex Corporation has in place a human resource

foster communications among diverse human resources.

development system to cultivate human resources in a

We believe it is important to share values and foster new

systematic manner through three types of training:insights in order to create new value and encourage deeper

selective, rank-based and elective. In the ﬁscal year ended

cultural understanding.

March 31, 2016, expenditure on employee training aver-

Creating a Working Environment That Provides Peace of Mind and Maximizes Skills
To create a working environment amenable to diverse humanresources, we support work-life balance in regions around the world.
Employee satisfaction has risen as a result, and we are highly rated
from outside the Company, as evidenced by a number of awards.

• “Great Place to Work”
Sysmex Europe (2012, 2014, 2016)
Sysmex Brazil (2014)

aged approximately ¥180,000 per employee, up from• “Companies That Care Honor Roll,” a ranking of companies thataround ¥160,000 in the preceding ﬁscal year.

contribute to the welfare of employees, their families and the
local community

Sysmex Brazil receives award as a “Great Place to Work”

Sysmex America (2009–2016)• A good company to work for,“HR Asia Best Companies to Work for in Asia 2015”
Sysmex Asia Paciﬁc (2015)• Nikkei ranking of “Companies that Motivate People”
Sysmex Corporation ranked 24th in 2015, up from 30th in 2014.
Training at the Global Communication Center

63 Sysmex Report 2016

Interaction of employees from different regions during their work

Sysmex Report 2016 64

 Striving for Sustainable Increases in Corporate Value

Environmental Preservation

We are working to reduce environmental
impact based on our environmental policy.

Structure to Increase Efficiency and Lower
Environmental Impact

Revising Package Designs to Reduce Material
Requirements and Boost Recyclability

As its product categories and sales regions have expand-We are working to reduce material requirements anded, logistics have become more diverse. Sysmex has been

increase recyclability by optimizing the sizes of instrument

revising its logistics processes and structure in response.

packages and introducing packaging designs that are sen-In 2012, we launched a project to shorten supply chain

Promoting Initiatives to Achieve the Targetsof the Sysmex Group Environmental Action Plan

Establishing Environmentally Conscious
Business Offices and Factories

Based on its environmental policy, Sysmex has formulated

When establishing new business oﬃces and factories, Sysmex

the Sysmex Group Environmental Action Plan (Sysmex

works to minimize environmental impact resulting from their

Eco-Vision 2020) and in the ﬁscal year ended March 31,

operation by introducing environmentally conscious design,

2016, set mid-term environmental objectives (for the ﬁscal

facilities and equipment, and operating processes.

years ending March 31, 2016 to 2018). To achieve theseAt i-Square, the instrument factory we establishedgoals, we are working to improve the Group’s environ-in 2014, we have installed LED lighting and solar power

mental impact on an ongoing basis.

modules to conserve energy and lower CO2 emissions.
Solar power supplies around 10% of the electricity used at

Sysmex Group Environmental Action Plan
(Sysmex Eco-Vision 2020)• Promote eco-friendly products and service models
Reduce carbon dioxide emissions for logistics by 50%• (perunit of non-consolidated sales, base year: ﬁscal year

i-Square. Also, at our reagent factory in Germany, which we
expanded in the ﬁscal year ended March 31, 2016, we haveinstalled systems to reduce the amount of energy consumed
and lower CO2 emissions. (See the column below for details.)

ended March 31, 2011)•

Reduce greenhouse gas emissions at business oﬃces
by 50%

Revising our Logistics Processes and(per unit of consolidated sales, base year: ﬁscal year ended
March 31, 2009)

sitive to the unique needs of export destinations.

lead times by reconﬁguring the global logistics structure

Speciﬁcally, moving forward with the revision offor overall optimization and introducing process reform.

its package designs, we have introduced steel packag-

Since then, we have gradually revised our logistics struc-ing for some products to ensure against concerns forture and moved forward with packaging reforms.

damage during shipment. We are also reducing storage

In addition to logistics reform, project initiatives arespace by using two-tiered storage and contributing tointended to reduce environmental impact and serve as an

the recycling of packaging materials at delivery destina-

eﬀective means to achieve the objectives spelled out intions. Meanwhile, for shipments in Japan we have begun

Sysmex Eco-Vision 2020.

employing reusable and simpliﬁed packaging. To reduce

For example, we have succeeded in shifting the mode

environmental impact, we are deploying this packaging inof overseas transport of certain refrigerated reagents fromaccordance with speciﬁc market characteristics. Throughair to ship freight, substantially lowering CO2 emissions.

these eﬀorts, we reduced cardboard waste by 20 tons in

We have also decreased lead time signiﬁcantly throughthe ﬁscal year ended March 31, 2016.

the local sourcing of some accessories for instruments.

We are also working on improvements to excess pack-

This move has also lowered CO2 emissions by shortening

aging for consumables and parts, and seeking to optimize

transport distances. Enhancing our loading simulations

instrument packaging sizes and simplify packaging.

has enabled us to adjust the timing of product shipments,

Recognizing its growing responsibility to supply prod-

increase our loading ratio in shipping containers and de-ucts on a global scale, in the future Sysmex plans to con-crease the number of shipments.

tinue improving its logistics eﬃciency and minimizing its

As a result of these initiatives, in the ﬁscal year ended

environmental footprint.

March 31, 2016, we reduced CO2 emitted through logistics(per unit of sales) by 48% compared with March 31, 2011.

a recycle rate of 93% or higher at all• Achieve
business oﬃces
water usage at reagent factories by 10%• Reduce(per unit of amount of production, base year: ﬁscal year

Initiatives to Reduce CO2 Emissions from Logistics

ended March 31, 2009)
i-Square instrument factory

CO2 Emitted through Logistics (Per unit of sales)

Examples of Initiatives
By reinforcing loading simulations, adjusting productshipment timing and raising the shipping containerloading ratio.

(t-CO2/billion yen)

Our Expanded, and Environmentally Considerate, Reagent Factory in Germany

800

725.2

In response to growing demand in EMEA, in the ﬁscal year

650.9

ended March 31, 2016, we expanded our reagent factory in

555.8

600

Germany, increasing capacity by 1.5 times. To reduce the

379.4

400

panels and an ice thermal storage system*. This thermalstorage air conditioning system uses natural energy, taking
advantage of seasonal diﬀerences.

65 Sysmex Report 2016

49%

71%

Down 48%(Compared with the ﬁscal year
ended March 31, 2011)

200

Reagent factory in Germany

Fiscal year ended
March 31, 2015

Improved by 22 percentage points

417.0

factory’s energy use and CO2 emissions, we installed solar* Ice thermal storage system: With this type of system, ice produced in the
ground in winter is used in the summer for cooling. In winter, geothermal
water, which is warmer than the ambient air, is used to supply heat.

Fiscal year ended
March 31, 2013

534.8

0

03/11

03/12

03/13

03/14

03/15

03/16

Shipping container loading ratio (peak time)

Sysmex Report 2016 66

 Striving for Sustainable Increases in Corporate ValueContributing to Society

Through our business, we contribute to
the establishment of a healthy society andvibrant communities.

prevents billions of people in the developing world fromIn these ways, the Company is proactively contributing toseeking the level of prosperity and longevity now common

society by ﬁghting cancer.

in the industrialized world.”* Flag: A function that determines speciﬁc sample irregularities. This is used
only as supplemental test data; it is not directly related to diagnosis.

In the ﬁscal year ended March 31, 2015, employee volunteers at Group companies in the EMEA region launched
the cancer-ﬁghting campaign “Sysmex Against Cancer.”
The funds raised through this campaign were donated to

Employee Volunteers Conduct Fund-RaisingCampaign to Help Fight Cancer
become severe and even cause death—a situation that

Creating Testing Technologies to Help
Eradicate Serious Infectious Diseases

calls for early diﬀerentiation and early diagnosis. Sysmex’s

Cancer is the world’s deadliest disease, and the number of

instruments have had the functionality to ﬂag* in hemato-

deaths from cancer is forecast to continue increasing.

Rapid globalization in recent years has led to an increase

logical tests the abnormal blood cell morphology of cells

Sysmex manufactures and sells products that assist inin diseases crossing national borders, which has become ainfected with malaria. To provide even higher value, we

the early detection of cancer. We also make donations to

global problem. As part of the international community’s

are now developing technologies to detect and count cells

organizations that work to prevent and conduct research

initiatives in this regard, one of the important themes

infected with malaria. This technology will facilitate hema-

on cancer such as the American Cancer Society and other.

of the United Nation’s Sustainable Development Goals

tological testing that provides information leading to the(SDGs) for ensuring healthy lives and promoting well-being

simple and quick determination of the presence of malaria

for all is to halt the spread of HIV/AIDS, tuberculosis,

infection, the degree of severity and the type of malarial

malaria and other diseases.

infection (Plasmodium). Furthermore, Sysmex Partec,

Sysmex is working on development of testing tech-which became a subsidiary in 2013, possesses compact

nologies targeting malaria, dengue fever, HIV and otherand portable instruments that are eﬀective in the treat-diseases, as well as developing products to contribute toment and monitoring of patients with HIV/AIDS, tubercu-

the diagnosis of infectious diseases in emerging markets

losis and malaria, and is developing these products further.

In the initial stages of malaria infection, it is diﬃcult

Fund (GHIT Fund), which states its vision as “one incal systems. Without appropriate treatment malaria canwhich the crushing burden of infectious disease no longer

31, 2015, a total of 241,733 euros had been donated.

Contributing to Healthcare through theFunding of University Courses
Since the ﬁscal year ended March 31, 2015, Sysmex has
contributed funds to the “Assessment of Clinical Testing
School of Medicine and promoted joint research on newclinical testing technologies. This course is currently collaborating with Sysmex’s Central Research Laboratories
on the development of highly precise yet simple diagnosis
technologies for determining the risk of cardiovasculardisease by evaluating the function of high-density lipoproteins. We will continue researching laboratory medicine
based on scientiﬁc evidence, thereby continuing R&D

company to join the Global Health Innovative Technology

to determine the type of malarial infection based on clini-of cancer prevention and supports research. As of March(Sysmex)” course oﬀered by the Kobe University Graduate

In 2015, Sysmex became the only diagnostics reagentsand developing countries.

the World Cancer Research Fund, which raises awarenessinitiatives aimed at the establishment of new testing technologies and the commercialization of technologies. At
the same time, we will continue with our support for local
Sysmex Against Cancer contribution presentation ceremony

universities and other community contributions.

Endemic Areas for Malaria
Individuals aﬀected: 198 million/year
Deaths: 580,000/year

Sysmex’s CSR Activities
To further promote CSR initiatives, since 2011 Sysmex has participated in
the United Nations Global Compact. We have also established our MidTerm CSR Plan, referring to the 10 principles of the United Nations Global
Compact and the ISO 26000 international standards for corporate social
responsibility.
Sysmex has earned high third-party praise for its eﬀorts as a sustainable

Network JapanWE SUPPORT

company. For example, we were selected by Corporate Knights for inclusion in the 2016 Global 100 (The 100 Most Sustainable Companies in the
XN-L Series, which plays a role indetection of malaria infection

World). We were 88th in this ranking, and ﬁrst in the category of “HealthCare Equipment & Supplies.” We have also been selected for inclusion inindexes on socially responsible investment (SRI), such as the Dow Jones

Malaria deaths per 100,000 people (2013)

Sustainability Asia Paciﬁc Index.
Please see our website for details on our CSR activities.

100 or more

10–49

Fewer than 1

No malaria transmission

50–99

1–9

Estimated malaria deaths equal zeroNot applicable

http://www.sysmex.co.jp/en/csr/

Source: WHO

67 Sysmex Report 2016

Sysmex Report 2016 68

Financial and Other Information
Consolidated Financial and Non-Financial Data (11 Years)
Fiscal years ended March 31 (Japanese GAAP)(Millions of yen)(Thousands of
U.S. dollars)*1

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2016

¥ 87,888¥ 101,041¥ 110,724¥ 111,843¥ 116,206¥ 124,694¥ 134,744¥ 145,578¥ 184,538¥ 221,377¥ 253,157$ 2,240,327

10,724

12,71515,033

15,134

15,74018,28919,20621,80532,871

44,411

56,962504,088

Net income attributable to owners of the parent*

7,423

9,008

9,132

8,014

9,765

11,412

12,007

14,166

20,574

26,63836,233

320,646

Capital expenditure

5,638

4,546

8,244

9,340

4,540

5,840

7,909

8,945

13,366

13,907

13,804

122,159

Depreciation

3,592

3,959

3,924

7,189

7,067

6,871

7,031

7,945

9,961

11,25912,254

108,442

R&D expenditure

8,184

9,026

9,221

10,771

11,23812,38011,904

12,11913,26014,692

17,775

157,301

Net cash provided by (used in) operating activities

8,275

10,085

11,635

13,194

21,23018,135

17,05925,80636,56438,641

39,567350,150

Net cash provided by (used in) investing activities(7,859)(6,630)(12,883)(13,545)(6,603)(8,916)(10,372)(12,524)(33,940)(19,544)(21,623)(191,354)

Net cash provided by (used in) financing activities(1,191)(458)(1,316)723(10,091)(3,475)(3,814)(3,117)(2,898)(7,554)(8,755)(77,478)

Total assets

87,447

101,225

109,027

118,522

120,702130,060

142,285

173,011

210,759

247,984

267,638

2,368,478

Cash and cash equivalents, end of year

9,416

12,715

9,679

9,410

13,813

18,916

21,83834,30736,54850,22056,482499,841

Total equity

62,64772,396

79,11779,85187,136

94,233

102,503

119,154

146,250

169,551

188,095

1,664,558

695

669

1,081

10,344

2,565

1,971

1,026

769

1,960

716

1,348

11,929(Yen)(U.S. dollars)

For the year:
Net sales
Operating income2

At year-end:

Interest-bearing liabilities
Per share data:¥ 1,251.8*4¥ 1,411.0¥ 1,541.0¥ 1,548.2¥ 1,684.9¥ 910.7*4¥ 990.5¥ 1,151.4¥ 703.8*4¥ 812.4¥ 899.5$ 7.96

Net income (basic) (yen)145.5*4

179.6

178.9

156.7

190.8

111.2*4

116.9

137.6

99.5*4

128.5

174.4

1.54

Net income (diluted) (yen)143.8*4

178.0

178.3

156.5

190.5

111.0*4

116.6

137.1

99.2*4

128.0

173.7

1.54

Cash dividends applicable to the year*3 (yen)6.50*4

9.00

12.00

12.50

14.00

15.00*4

17.00

20.00

27.00*4

38.00

52.00

0.46

Dividend ratio (%)

17.9

20.0

26.8

31.9

29.4

27.0

29.1

29.1

27.1

29.6

29.8

Operating margin (%)

12.2

12.6

13.6

13.5

13.5

14.7

14.3

15.0

17.8

20.1

22.5

Overseas sales ratio (%)

59.7

62.5

67.5

68.0

68.3

69.1

70.5

72.4

78.2

81.7

84.3

Equity ratio (%)

71.6

70.5

72.2

66.8

71.5

71.9

71.6

68.7

69.2

68.0

69.9

12.5

13.4

12.2

10.1

11.8

12.7

12.3

12.8

15.6

17.0

20.4

9.0

9.5

8.7

7.0

8.2

9.1

8.8

9.0

10.7

11.6

14.1

3,334

3,580

3,916

4,148

4,576

4,957

5,521

5,594

6,211

6,742

7,446

Female managers (director level or above) (%)

—

—

—

—

—

—

—

—

10.6

11.6

14.3

Greenhouse gas emissions at business offices
per unit of consolidated sales*6 (t-CO2/¥100 million)

—

—

—

10.08

10.86

9.53

8.65

8.63

7.98

7.28

7.26

Equity (yen)Other data:

Return on equity (ROE) (%)
5

Return on assets (ROA)* (%)
Number of employees(Including part-time and other employees)

Notes:*1. U.S. dollar amounts represent translations of Japanese yen, for convenience only, at the rate of ¥113 = US$1, the approximate rate of exchange on March 31, 2016.
*2. Figures shown for fiscal years ended on or before March 31, 2015 are “net income.”*3. Dividend (actual) coverted to post-split basis.
*4. Two-for-one stock split*5. ROA = Net income attributable to owners of the parent/Total assets (Yearly Average)×100*6. Main business offices in Japan, instrument factories in Japan, reagent factories in Japan, main overseas locations and overseas reagent factories

69 Sysmex Report 2016

Sysmex Report 2016 70

 Financial and Other Information

Management’s Discussion and Analysis
Overview
Looking at economic conditions during the fiscal year
ended March 31, 2016, in the United States, employment
conditions improved, the corporate sector continued to
expand gradually, and the country moved to normalize its
monetary policy. While the European economy continues
to recover, geopolitical risk is mounting. Furthermore,
economic deceleration persists in China, despite thecountry’s fiscal and monetary policies. Economic conditions in the Asia Pacific region were firm, centered on the
ASEAN region. Overseas economies generally continued
their modest recovery, but the outlook grew uncertain.
The Japanese economy continued on its path to recovery
thanks to improvements in employment and income
conditions and an upturn in capital investment.
On the healthcare front, in advanced countries in
Europe and the United States, efforts are underway tocurtail medical expenses and reform health insurance systems. In the United States, efforts to reduce the number ofpeople without medical insurance are continuing. In China,
medical system reform that is underway, including to the
medical insurance system, aims to build infrastructuresthat provide uniform medical services in cities and farming
villages throughout the country. Therefore, althoughsome causes for uncertainty remain, the foundations ofhealthcare-related demand remain solid. The Japanese
government is including the medical and healthcare industry in its growth strategies, which is expected to continue
invigorating healthcare-related industries going forward.

The Sysmex Group, which has manufactured reagents
overseas for some time, completed the expansion of its
reagent production factory in Germany. This move boosted
capacity to approximately 1.5 times the previous levelin response to expected demand increases in the EMEA
region. We have also began to expand our reagent factoryin the United States to ensure stable reagent supply in theface of expected demand increases in the Americas.
Also, Sysmex’s joint venture with Kawasaki Heavy
Industries, Ltd. (Kobe), Medicaroid Corporation (Kobe)
commenced the full-fledged development of medical
robots. To support its product development activities,
Medicaroid will leverage the Sysmex Group’s testingand diagnostic technologies, as well as a broad-ranging
network in the medical field, as it contributes to thedevelopment of the medical industry.
Furthermore, in Africa, where healthcare-related
markets are slated to expand, we established Sysmex West
and Central Africa Ltd., in the Republic of Ghana, thereby
strengthening our base of operations in West and Central
Africa. By reinforcing our support for distributors andcustomers, we will continue contributing to the development of healthcare in emerging markets.
During the fiscal year the Group recorded consolidated net sales of ¥253,157 million, up 14.4% year on year.
Operating income rose 28.3%, to ¥56,962 million; and net
income attributable to owners of the parent increased
36.0%, to ¥36,233 million. Total asset turnover increased
from 0.97 time to 0.98 time, and return on equity (ROE)Net Sales

253.157

184,538

180,000
134,744

145,578

SG&A expenses
SG&A ratio
94,132

7.9%

2012

2013

2014

71 Sysmex Report 2016

2015

56,962 50

44,411(¥ million)
40,00036,233OVERSEAS

Net sales

JAPAN

84.3%

¥253,157

15.7%

47.4

46.1

40
37.2

24,00020

32,871

24,00020,574

19,20622.5

21,805

14.3

20
17.8

2012

2013

2014

2015

2016

16,00020.1

14,166
12,00715.0

12,000(Years ended March 31)

23.6
23.6%

30

44.3

20,0000

2016

32,00026,638¥39,846 million

million

40

60
36,000

25.8%
5.8%

27.0%
0%

(¥ million / %)60,00048,00067,19160,00040,000(Years ended March 31)

100

Operating income
Operating margin

80

36.8

0

Net Income Attributable to
Owners of the Parent

81,725 81,607

63,886¥213,311 million

Operating income expanded ¥12,551 million, or 28.3% year
on year, to ¥56,962 million, as higher sales more thanoffset increases in cost of sales and SG&A expenses, andthe operating margin improved 2.4 percentage points, to22.5%. Furthermore, compared with the preceding fiscal
year exchange rates had a ¥8,543 positive effect on income.
Net income attributable to owners of the parent grew
¥9,595 million, or 36.0%, to ¥36,233 million, owing to a
¥1,038 million gain on revision of retirement benefit plan
and a year-on-year decrease in total income taxes of ¥663
million, or 3.5%, to ¥18,427 million.

Operating Income
Operating Margin

80,000120,000

60,000

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

Net Sales by Destination
Japan
Overseas
Americas
EMEA
China
Asia Paciﬁc

221,377

Cost of sales rose ¥6,704 million, or 7.0%, to ¥102,063
million. The cost of sales ratio accordingly decreased 2.8
percentage points, to 40.3%.
Selling, general and administrative expenses increased¥12,525 million, or 15.3%, to ¥94,132 million, owing to reinforcement of the sales and after-sales service structures.
SG&A expenses as a percentage of net sales rose 0.4
percentage point, from 36.8% to 37.2%.

Looking at net sales by destination, in Japan, sales ofreagents increased, centered on the immunochemistry
field, but sales of instruments declined, reflecting atendency by healthcare institutions to curtail capital
expenditures. As a result, sales in Japan declined 1.7% year
on year, to ¥39,846 million.
In overseas markets, we made progress in thestrengthening of sales and support structures and theprovision of solutions, leading to higher sales of instruments in the field of hematology and hemostasis. Salesof reagents also rose, benefiting from an increase in
the installed instrument base. These factors caused theSysmex Group’s overseas sales to surge 18.0% year on
year, to ¥213,311 million. The overseas sales ratio accordingly rose 2.6 percentage points, to 84.3%.
Looking at overseas sales by destination, sales in theAmericas amounted to ¥59,803 million, up ¥10,251 million,
or 20.7% year on year; in EMEA ¥68,216 million, up ¥4,618
million, or 7.3%; in China ¥65,189 million, up ¥15,340
million, or 30.8%; and in Asia-Pacific ¥20,103 million, up¥2,279 million, or 12.8%.

(¥ million / %)100,000

240,000

Cost of Sales and SG&A Expenses

Net Sales by Destination*

SG&A Expenses
SG&A Ratio(¥ million)
300,000

Profits and Losses

advanced from 17.0% in the preceding year to 20.4% during the fiscal year under review.

10

8,000

0

0

0
0

2012

2013

2014

(Years ended March 31)

2015

2016

2012

2013

2014

2015

2016

(Years ended March 31)

Sysmex Report 2016 72

 Financial and Other Information

Going forward, Sysmex will continue to effectively
invest its internal reserves in the implementation of highly
competitive product development and global businessstrategies, aiming to respond to anticipated changes inthe business environment.

R&D Expenditure
To enhance its product portfolio, during the year Sysmex
developed new products and pursued R&D centering on
clinical testing and the life sciences, fields targeted for
future growth. As a result, R&D expenditure amounted
expanded ¥3,083 million, or 21.0%, to ¥17,775 million. R&D
expenditure as a percentage of net sales increased 0.4
percentage points, from 6.6% to 7.0%.

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

Dividend Policy
We aim to maintain a proper balance between internal
reserves for R&D and capital expenditure, which aredesigned to sustain steady high growth, and returns
to our shareholders as our earning power increases. In
terms of returns to shareholders, we intend to provide
a stable dividend on a continuous basis and aim for a
consolidated payout ratio of 30% under our basic policyof sharing the successes of our operations in line withbusiness performance.
As a basic policy, Sysmex pays twice-yearly dividends
from retained earnings, an interim dividend and a year-end
dividend. The year-end dividend is decided upon approval of
the annual shareholders’ meeting, and the interim dividend
upon approval by the members of the Managing Board.
In accordance with this policy and in light of businessperformance during the year under review, we announced
dividends for the year of ¥52 per share, which includes
an interim dividend of ¥24. As a result, the consolidated
payout ratio was 29.8%.

R&D Expenditure
R&D Expenditure as a Percentage of Net Sales(¥ million / %)20,000R&D expenditure
R&D expenditure as a percentage of net sales
15
17,77516,000Cash Dividends Applicable to the Year
Dividend Ratio

75

9

6.6

45

7.0
27
20
17

3

4,000

142,285
8.8

29.1

29.1

24

27.1

29.6

30

2013

2014

(Years ended March 31)

2015

2016

60,0000

0160,000

Capital expenditure
Depreciation(¥ million)
188,095

100

15,00015,00013,36671.6

68.7
119,15480

146,250

68.0

69.2

12,25412,000

11,25969.960

13,907 13,804

12,000

9,961
8,945

9,000

9,000

12

120,000

8

80,000

40

6,000

6,000

4

40,000

20

3,000

3,000

2016 0

0

0

0

7,909
7,031

102,503

11.6

9.0

120,000

15

7,945

0
0

2012

2013

2014

2015

2016

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

73 Sysmex Report 2016

10.7

29.8

12
2012

Capital Expenditure
Depreciation(¥ million / %)200,000

14.1

173,011

180,000

Capital expenditure (investment in property, plant andequipment, including construction in progress) was
down ¥102 million year on year, or 0.7%, to ¥13,804 million. This expenditure went mainly toward the expansionof overseas subsidiaries’ factories for producing IVD
reagents in response to growing business in overseas
markets, as well as to the enhancement of sales promotion facilities. Depreciation increased ¥995 million, or8.8%, to ¥12,254 million.

Net cash provided by operating activities was ¥39,567
million (up ¥926 million year on year). As principal factors,
income before income taxes provided ¥54,660 million (up¥8,932 million); depreciation and amortization provided¥14,186 million (up ¥1,231 million); the increase in notes
and accounts receivable used ¥5,477 million (down ¥1,373
million). An increase in inventories used ¥6,821 million(up ¥5,036 million); and income taxes paid used ¥19,578
million (up ¥4,026 million).

169,551

16

38

6

Capital Expenditure and Depreciation

247,984

36

8.3

0

20

240,000

Net cash used in financing activities was ¥8,755 million(up ¥1,201 million). This was mainly due to cash dividends
paid of ¥9,549 million (up ¥2,815 million) and a net
decrease in short-term bank loans of ¥1,000 million in thepreceding fiscal year, which was absent in the fiscal year
under review.

Cash Flows from Operating Activities

267,638

60

Cash Flows from Financing Activities

Total equity
Equity ratio(¥ million / %)300,000

52

Net cash used in investing activities was ¥21,623 million(up ¥2,079 million). Among major factors were purchasesof property, plant and equipment, which used ¥13,686
million (up ¥653 million); the purchase of software andother assets, which used ¥6,168 million (up ¥2,712 million);and the purchase of investment securities, which used
¥832 million (down ¥1,518 million).

As of March 31, 2016, cash and cash equivalents amounted
to ¥56,482 million, up ¥6,262 million from March 31, 2015.
Cash flows from various activities are described in moredetail below.

Total assets
ROA

Dividend ratio(¥ / %)
60

Cash Flows from Investing Activities

Cash Flows

Total Equity
Equity Ratio

210,759

8.8
7.2

Total Assets
ROA*

Cash dividends applicable to the year
(Dividend convert to post-split base)48

11,904 12,119

8,000

As of March 31, 2016, total assets amounted to ¥267,638
million, up ¥19,654 million from a year earlier. The primaryreasons were increases of ¥6,262 million in cash and cash
equivalents, ¥2,637 million in trade accounts receivable,¥3,123 million in investments in lease, ¥5,735 million ininventories, ¥4,548 million in buildings and structures and¥2,120 million in software.

12

14,692
13,26012,000Assets, Liabilities and Equity

Total liabilities as of March 31, 2016, were ¥79,543
million, up ¥1,110 million from a year earlier. Principal
factors included a rise of ¥3,646 million in trade accounts
payable, although income taxes payable fell ¥2,821 million.
Total equity came to ¥188,095 million at March 31,
2016, up ¥18,544 million from a year earlier. The main
reason for the increase was a ¥25,858 million rise inretained earnings, whereas the foreign currency translation adjustment decreased ¥6,999 million. The equity ratio
as of March 31, 2016, was 69.9%, up 1.9 percentage points
from the 68.0% recorded as of March 31, 2015.

2012

2013

2014

2015

(March 31)

2012

2013

(March 31)

2014

2015

2016

2012

2013

2014

2015

2016

0

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

Sysmex Report 2016 74

 Financial and Other Information

Consolidated Balance Sheet
Sysmex Corporation and Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
March 31, 2016

2016

2015

2016

ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 11)¥ 56,482¥ 50,220$ 499,841

362

294

3,204

Trade notes

2,618

2,802

23,168Trade accounts

52,70650,069466,425

225

171

1,991

Short-term investments (Note 3)
Receivables (Note 11):

Associated companies
Other

635

351

5,619

Allowance for doubtful accounts

(589)

(576)

(5,212)

Investments in lease (Notes 10 and 11)

8,536

5,413

75,540Inventories (Note 4)

35,62329,888315,248

Deferred tax assets (Note 9)

7,912

8,988

70,018Prepaid expenses and other current assets

8,155

6,529

72,167

172,665

154,149

1,528,009

Total current assets

PROPERTY, PLANT AND EQUIPMENT:Land

11,311

11,260100,097

Buildings and structures

42,55638,008376,602

Machinery and equipment

10,773

10,524

95,336

Furniture and fixtures

51,35947,446454,505

Lease assets

1,396

2,629

12,354

Construction in progress

2,051

4,137

18,150

119,446

114,004

1,057,044(58,211)(54,942)(515,141)

61,23559,062541,903

Investment securities (Notes 3 and 11)
Investments in associated companies

4,706
2,048

5,243
1,932

41,64618,124

Goodwill

9,086

12,11480,407

Software

9,233

7,113

81,708

Total
Accumulated depreciation
Net property, plant and equipment

INVESTMENTS AND OTHER ASSETS:

Asset for retirement benefits (Note 6)

583

961

5,159

Deferred tax assets (Note 9)

329

267

2,912

Other assets
Total investments and other assets
TOTAL

7,753

7,143

68,61033,73834,773

298,566¥ 267,638¥ 247,984$ 2,368,478

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

2016
LIABILITIES AND EQUITYCURRENT LIABILITIES:Current portion of long-term debt (Note 5)
Current portion of long-term lease obligations (Note 11)
Payables (Note 11):
Trade notes
Trade accounts
Associated companies
Construction and other
Income taxes payable (Note 11)
Accrued expenses
Deferred tax liabilities (Note 9)
Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:Long-term debt (Note 5)Long-term lease obligations (Note 11)
Liability for retirement benefits (Note 6)
Deferred tax liabilities (Note 9)
Other long-term liabilities
Total long-term liabilities

2015

2016

51

9
1,327

1,745
17,986
138
6,242
6,818
13,930316
18,57065,896

1,470
14,340
166
6,122
9,639
14,832102
18,44865,17015,442
159,168
1,221
55,23960,336123,274
2,797
164,337
583,150

1
733
566
8,779
3,568
13,647

199
563
8,994
3,507
13,263

9
6,487
5,009
77,69031,575
120,770

11,017
15,958
1,097
155,563

10,483
15,424
1,024
129,705

97,496141,222
9,707
1,376,664

(286)

(281)

(2,531)

1,170
3
3,429
144
188,0950
188,095¥ 267,638

1,367
1
10,4281,400
169,551

10,35427
30,345
1,274
1,664,558
0
1,664,558$ 2,368,478

¥

1
150

$
¥

COMMITMENTS AND CONTINGENT LIABILITIES(Notes 10 and 12)
EQUITY (Notes 7, 8, 14 and 16):
Common stock, authorized, 598,688,000 shares;
issued, 208,332,432 shares in 2016 and 207,894,432
shares in 2015
Capital surplus
Stock acquisition rights
Retained earnings
Treasury stock - at cost: 444,048 shares in 2016 and443,380 shares in 2015
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Foreign currency translation adjustments
Defined retirement benefit plans
Total
Non-controlling interests
Total equity
TOTAL

169,551¥ 247,984

See notes to consolidated financial statements.

75 Sysmex Report 2016

Sysmex Report 2016 76

 Financial and Other Information

Consolidated Statement of Income

Consolidated Statement of Changes in Equity

Sysmex Corporation and Subsidiaries

Sysmex Corporation and Subsidiaries
Millions of Yen
Accumulated Other Comprehensive Income

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
Year Ended March 31, 2016

NET SALESCOST OF SALES
Gross profit
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Operating income
OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense
Foreign exchange gain (loss)–net
Gain on revision of retirement benefit plan (Note 6)
Other–net
Other income (expenses)–net
INCOME BEFORE INCOME TAXESINCOME TAXES (Note 9):
Current
Deferred
Total income taxes
NET INCOME
NET INCOME ATTRIBUTABLE TONON-CONTROLLING INTERESTSNET INCOME ATTRIBUTABLE TO OWNERS OF
THE PARENT

2016¥ 253,157
102,063
151,094
94,13256,9622015¥ 221,377
95,359126,018
81,60744,411368(46)(2,743)
1,038(919)(2,302)
54,660

309
(44)
932
120
1,317
45,7283,257(407)(24,274)
9,186(8,133)(20,371)483,717

16,514
1,913
18,42736,233

17,1191,971
19,09026,638146,142
16,929163,071
320,646

(0)

(0)

(0)

¥ 36,233¥ 26,638$ 320,646

Yen

PER SHARE OF COMMON STOCK (Notes 2.w and 14):
Basic net income
Diluted net income
Cash dividends applicable to the year2016
$ 2,240,327
903,212
1,337,115
833,027504,088¥ 174.42
173.71
52.00

U.S. Dollars¥ 128.49
128.0238.00$ 1.54
1.54
0.46

Year Ended March 31, 2016

Number of
Shares ofCommon Stock Common
Outstanding
Stock

CapitalSurplus

BALANCE, APRIL 1, 2014
207,113,076 ¥ 10,243 ¥ 15,184(as previously reported)
Cumulative effect ofaccounting change (Note 2.l)
BALANCE, APRIL 1, 2014
207,113,076 10,243 15,184(as restated)
Net income attributable toowners of the parent
Cash dividends,¥32.50 per share
Purchase of treasury stock(2,824)
Exercise of warrants
340,800
240
240
Increase due to decreasein associated companies
accounted for by theequity method
Net change in the year
BALANCE, MARCH 31, 2015 207,451,052 10,483 15,424
Net income attributable toowners of the parent
Cash dividends,¥46.00 per share
Purchase of treasury stock(668)
Exercise of warrants
438,000
534
534
Decrease due to changeof fiscal year-end
of subsidiaries
Net change in the year
BALANCE, MARCH 31, 2016 207,888,384 ¥ 11,017 ¥ 15,958

Stock
Acquisition
RightsRetained
Earnings¥ 493 ¥ 109,977¥ 1,134¥ 8,653493

109,782

(270)

1,134

¥ 836 ¥ 146,250¥ 0 ¥ 146,250

(195)

(195)

8,653

836

26,638(6,734)
(11)

19
531
1,024

129,705

(281)

233
1,367

¥1
1

1,775
10,428564
1,400

36,233¥ (286)(6,999)2¥ 3 ¥ 3,429

0

146,055

26,63826,638(6,734)(11)
480(6,734)
(11)
480

19
3,104
169,551

(0)

19
3,104
169,551
36,233(9,549)(5)
1,068(9,549)
(5)
1,068

(826)
(1,256) (8,377)¥ 144 ¥ 188,095(826)
0(8,377)¥ 0 ¥ 188,095

(5)

(197)
¥ 1,170

146,055

36,233(9,549)(826)
73¥ 1,097 ¥ 155,563

Total

Noncontrolling
Interests Total Equity

Thousands of U.S. Dollars (Note 1)
Accumulated Other Comprehensive Income

Consolidated Statement of Comprehensive Income

CommonStock

Sysmex Corporation and Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
Year Ended March 31, 2016

¥ (270)(195)

See notes to consolidated financial statements.

NET INCOME
OTHER COMPREHENSIVE INCOME (LOSS) (Note 13):
Unrealized gain (loss) on available-for-sale securities
Deferred gain on derivatives under hedge accounting
Foreign currency translation adjustments
Defined retirement benefit plans
Total other comprehensive income (loss)
COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE INCOME (LOSS)ATTRIBUTABLE TO:
Owners of the parent
Non-controlling interests

Treasury
Stock

Deferred
Unrealized Gain on
DefinedGain on Derivatives Foreign
Currency Retirement
under
AvailableTranslation Benefit
Hedge
for-Sale
Plans
Securities Accounting Adjustments

2016¥ 36,233

2015¥ 26,638

2016$ 320,646(197)
2(6,999)(1,256)(8,450)¥ 27,783

233
1
1,775
564
2,573
¥ 29,211(1,743)18(61,938)(11,115)(74,778)$ 245,868¥ 27,783(0)¥ 29,211(0)$ 245,868(0)

BALANCE, MARCH 31, 2015
Net income attributable to owners of
the parent
Cash dividends, $0.41 per share
Purchase of treasury stock
Exercise of warrants
Decrease due to change offiscal year-end of subsidiaries
Net change in the year
BALANCE, MARCH 31, 2016

CapitalSurplus$ 92,770 $ 136,496

Stock
Acquisition
RightsRetained
Earnings$ 9,062 $ 1,147,832

Treasury
Stock

Unrealized
DefinedGain on Deferred Gain Foreign
Available- on Derivatives Currency Retirement
for-Sale under Hedge Translation Benefit
Securities Accounting Adjustments Plans$ (2,487) $ 12,097

320,646(84,504)
(44)
4,726

4,726

$ 97,496 $ 141,222(7,310)645(1,743)$ 9,707 $ 1,376,664 $ (2,531) $ 10,354

Total

Noncontrolling
Interests Total Equity$ 9 $ 92,283 $ 12,389 $ 1,500,451$ 1,500,451

320,646(84,504)
(44)
9,452

320,646(84,504)
(44)
9,452

(7,310)18 (61,938) (11,115) (74,133)$ 27 $ 30,345 $ 01,274 $ 1,664,558(7,310)$0(74,133)$ 0 $ 1,664,558

See notes to consolidated financial statements.

See notes to consolidated financial statements.

77 Sysmex Report 2016

Sysmex Report 2016 78

 Financial and Other Information

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements

Sysmex Corporation and Subsidiaries

Sysmex Corporation and Subsidiaries
Year Ended March 31, 2016

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
Year Ended March 31, 2016

OPERATING ACTIVITIES:
Income before income taxes
Adjustments for:
Income taxes - paid
Depreciation and amortization
Gain on revision of retirement benefit plan
Loss on disposal of property, plant and equipment
Changes in assets and liabilities:
Increase in notes and accounts receivable
Increase in inventories
Increase in asset for retirement benefits
Increase in notes and accounts payable
Decrease in liability for retirement benefits
Other–net
Net cash provided by operating activities
INVESTING ACTIVITIES:
Purchases of property, plant and equipment
Purchases of software and other assets
Purchases of investment securities
Purchases of investments in subsidiaries withchanges in consolidation scope
Acquisitions, net of cash acquired
Other–net
Net cash used in investing activities
FINANCING ACTIVITIES:
Decrease in short-term bank loans - net
Repayments of long-term debt
Payments of lease obligations
Exercise of warrants
Dividends paid
Other–net
Net cash used in financing activities
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
DECREASE IN CASH AND CASH EQUIVALENTS DUETO CHANGE OF FISCAL YEAR-END OF SUBSIDIARIESCASH AND CASH EQUIVALENTS, END OF YEAR
See notes to consolidated financial statements.

79 Sysmex Report 2016

2016

2015

2016

¥ 54,660¥ 45,728$ 483,717(19,578)
14,186(1,038)365(15,552)
12,955(173,257)
125,540(9,186)
3,230(5,477)(6,821)
(374)
4,145
(48)
(453)
39,567(6,850)(1,785)
2,517
(640)
2,125
38,641(48,469)(60,363)(3,310)36,681(425)(4,008)350,150(13,686)(6,168)(832)(13,033)(3,456)(2,350)(121,115)(54,584)(7,363)143

1. BASIS OF PRESENTATION OF CONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated ﬁnancial statements have been preparedin accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Act and its related accounting regulations
and in accordance with accounting principles generally accepted in Japan(“Japanese GAAP”), which are diﬀerent in certain respects as to applicationand disclosure requirements of International Financial Reporting Standards.
In preparing these consolidated ﬁnancial statements, certain reclassiﬁcations and rearrangements have been made to the consolidated ﬁnancial
statements issued domestically in order to present them in a form which ismore familiar to readers outside Japan. In addition, certain reclassiﬁcations
have been made in the 2015 consolidated ﬁnancial statements to conformto the classiﬁcations used in 2016.
The consolidated ﬁnancial statements are stated in Japanese yen, thecurrency of the country in which Sysmex Corporation (the “Company”)
is incorporated and operates. The translations of Japanese yen amounts
into U.S. dollar amounts are included solely for the convenience of readers
outside Japan and have been made at the rate of ¥113 to $1, the approximate
rate of exchange at March 31, 2016. Such translations should not be
construed as representations that the Japanese yen amounts could be
converted into U.S. dollars at that or any other rate.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation—The consolidated ﬁnancial statements as of March(534)(21,623)

(342)
(363)
(19,544)(4,726)(191,354)

(1)
(50)
850
(9,549)(5)(8,755)(1,000)
(148)
(57)
396
(6,734)(11)(7,554)

(9)
(442)
7,522
(84,504)(45)(77,478)(2,321)
6,868
50,2202,129
13,67236,548(20,540)
60,778444,425

31, 2016, include the accounts of the Company and its 60 (59 in 2015)
subsidiaries (collectively the “Group”).
Under the control and inﬂuence concepts, those companies in which
the Company, directly or indirectly, is able to exercise control over operations are fully consolidated, and those companies over which the Group
has the ability to exercise signiﬁcant inﬂuence are accounted for by theequity method.
Investments in three (three in 2015) associated companies are accounted for by the equity method.
Goodwill represents the excess of the cost of an acquisition over the fairvalue of the net assets of the acquired subsidiary and associated company atthe date of acquisition, and is carried at cost less accumulated amortization,
which is calculated by the straight-line method over 5 or 20 years.
All signiﬁcant intercompany balances and transactions have been
eliminated in consolidation. All material unrealized proﬁt included in assets
resulting from transactions within the Group is also eliminated.
For the year ended March 31, 2016, Sysmex Partec GmbH and fourother companies changed their ﬁscal year-end from December 31 toMarch 31. The Company included the subsidiaries’ operating results for the
12-month period from April 1, 2015 to March 31, 2016 in the consolidated
statement of income and included their operating results for the 3-month
period from January 1, 2015 to March 31, 2015 in the consolidated statementof changes in equity by directly charging retained earnings as a decrease
due to change of ﬁscal year-end of subsidiaries.

¥ 50,220(5,362)$ 499,841

b. Uniﬁcation of Accounting Policies Applied to Foreign Subsidiaries
for the Consolidated Financial Statements—In May 2006, the

(403)

(606)
¥ 56,482(3,566)

Accounting Standards Board of Japan (the “ASBJ”) issued ASBJ Practical
Issues Task Force (“PITF”) No. 18, “Practical Solution on Uniﬁcation of
Accounting Policies Applied to Foreign Subsidiaries for the Consolidated
Financial Statements” which was subsequently revised in February 2010
and March 2015 to reﬂect revisions of the relevant Japanese GAAP or
accounting standards in other jurisdictions. PITF No. 18 prescribes that theaccounting policies and procedures applied to a parent company and its

subsidiaries for similar transactions and events under similar circumstances
should in principle be uniﬁed for the preparation of the consolidated
ﬁnancial statements. However, ﬁnancial statements prepared by foreignsubsidiaries in accordance with either International Financial ReportingStandards or generally accepted accounting principles in the United Statesof America (Financial Accounting Standards Board Accounting Standards
Codiﬁcation - “FASB ASC”) tentatively may be used for the consolidation
process, except for the following items that should be adjusted in the
consolidation process so that net income is accounted for in accordancewith Japanese GAAP, unless they are not material: (a) amortization of
goodwill; (b) scheduled amortization of actuarial gain or loss of pensions
that has been recorded in equity through other comprehensive income;(c) expensing capitalized development costs of research and development(R&D); and (d) cancellation of the fair value model of accounting forproperty, plant and equipment and investment properties and incorporation of the cost model of accounting.

c. Uniﬁcation of Accounting Policies Applied to Foreign AssociatedCompanies for the Equity Method—In March 2008, the ASBJ issued
ASBJ Statement No. 16, “Accounting Standard for Equity Method of
Accounting for Investments” which was subsequently revised in line withthe revisions to PITF No. 18 above. The standard requires adjustments
to be made to conform the associate’s accounting policies for similartransactions and events under similar circumstances to those of the parent
company when the associate’s ﬁnancial statements are used in applying theequity method unless it is impracticable to determine such adjustments. In
addition, ﬁnancial statements prepared by foreign associated companies
in accordance with either International Financial Reporting Standards orgenerally accepted accounting principles in the United States of America
tentatively may be used in applying the equity method if the following
items are adjusted so that net income is accounted for in accordancewith Japanese GAAP, unless they are not material: (a) amortization of
goodwill; (b) scheduled amortization of actuarial gain or loss of pensions
that has been recorded in equity through other comprehensive income; (c)expensing capitalized development costs of R&D; and (d) cancellation of
the fair value model of accounting for property, plant and equipment andinvestment properties and incorporation of the cost model of accounting.

d. Business Combination—In October 2003, the Business Accounting
Council issued a Statement of Opinion, “Accounting for Business
Combinations,” and in December 2005, the ASBJ issued ASBJ Statement
No. 7, “Accounting Standard for Business Divestitures” and ASBJ GuidanceNo. 10, “Guidance for Accounting Standard for Business Combinations andBusiness Divestitures.”
In December 2008, the ASBJ issued a revised accounting standard
for business combinations, ASBJ Statement No. 21, “Accounting Standard
for Business Combinations.” Major accounting changes under the revised
accounting standard are as follows: (1) The revised standard requires
accounting for business combinations only by the purchase method. As aresult, the pooling-of-interests method of accounting is no longer allowed.
(2) The previous accounting standard required R&D costs to be charged
to income as incurred. Under the revised standard, in-process R&D costs
acquired in the business combination are capitalized as an intangible asset.
(3) The previous accounting standard provided for a bargain purchasegain (negative goodwill) to be systematically amortized over a period notexceeding 20 years. Under the revised standard, the acquirer recognizes
the bargain purchase gain in proﬁt or loss immediately on the acquisition
date after reassessing and conﬁrming that all of the assets acquired andall of the liabilities assumed have been identiﬁed after a review of theSysmex Report 2016 80

 Financial and Other Information

procedures used in the purchase price allocation. The revised standard wasapplicable to business combinations undertaken on or after April 1, 2010.
In September 2013, the ASBJ issued revised ASBJ Statement No. 21,“Accounting Standard for Business Combinations,” revised ASBJ GuidanceNo. 10, “Guidance on Accounting Standards for Business Combinations andBusiness Divestitures,” and revised ASBJ Statement No. 22, “AccountingStandard for Consolidated Financial Statements.” Major accountingchanges are as follows:(a) Transactions with non-controlling interest—A parent’s ownership interestin a subsidiary might change if the parent purchases or sells ownershipinterests in its subsidiary. The carrying amount of non-controlling interest is adjusted to reﬂect the change in the parent’s ownership interest
in its subsidiary while the parent retains its controlling interest in its
subsidiary. Under the previous accounting standard, any diﬀerence
between the fair value of the consideration received or paid and theamount by which the non-controlling interest is adjusted is accounted
for as an adjustment of goodwill or as proﬁt or loss in the consolidated
statement of income. Under the revised accounting standard, such
diﬀerence is accounted for as capital surplus as long as the parent
retains control over its subsidiary.
(b) Presentation of the consolidated balance sheet—In the consolidated balance sheet, “minority interest” under the previous accounting standard
is changed to “non-controlling interest” under the revised accounting
standard.
(c) Presentation of the consolidated statement of income—In the consolidated statement of income, “income before minority interest” under
the previous accounting standard is changed to “net income” under
the revised accounting standard, and “net income” under the previous
accounting standard is changed to “net income attributable to ownersof the parent” under the revised accounting standard.
(d) Provisional accounting treatments for a business combination—If theinitial accounting for a business combination is incomplete by the endof the reporting period in which the business combination occurs, anacquirer shall report in its ﬁnancial statements provisional amounts forthe items for which the accounting is incomplete. Under the previous
accounting standard guidance, the impact of adjustments to provisionalamounts recorded in a business combination on proﬁt or loss isrecognized as proﬁt or loss in the year in which the measurement iscompleted. Under the revised accounting standard guidance, during themeasurement period, which shall not exceed one year from the acquisition, the acquirer shall retrospectively adjust the provisional amounts
recognized at the acquisition date to reﬂect new information obtained
about facts and circumstances that existed as of the acquisition
date and that would have aﬀected the measurement of the amounts
recognized as of that date. Such adjustments shall be recognized as if
the accounting for the business combination had been completed at
the acquisition date.
(e) Acquisition-related costs—Acquisition-related costs are costs, such asadvisory fees or professional fees, which an acquirer incurs to eﬀect
a business combination. Under the previous accounting standard, theacquirer accounts for acquisition-related costs by including them in
the acquisition costs of the investment. Under the revised accounting
standard, acquisition-related costs shall be accounted for as expenses
in the periods in which the costs are incurred.
The above accounting standards and guidance for (a) transactions
with non-controlling interest, (b) presentation of the consolidated balance
sheet, (c) presentation of the consolidated statement of income, and (e)acquisition-related costs are eﬀective for the beginning of annual periods
beginning on or after April 1, 2015. Earlier application is permitted from the
beginning of annual periods beginning on or after April 1, 2014, except for(b) presentation of the consolidated balance sheet and (c) presentation of
the consolidated statement of income. In the case of earlier application,
all accounting standards and guidance above, except for (b) presentationof the consolidated balance sheet and (c) presentation of the consolidated
statement of income, should be applied simultaneously.

81 Sysmex Report 2016

Either retrospective or prospective application of the revised accounting standards and guidance for (a) transactions with non-controllinginterest and (e) acquisition-related costs is permitted. In retrospective
application of the revised standards and guidance, the accumulated eﬀects
of retrospective adjustments for all (a) transactions with non-controllinginterest and (e) acquisition-related costs which occurred in the past shallbe reﬂected as adjustments to the beginning balance of capital surplus andretained earnings for the year of the ﬁrst-time application. In prospective
application, the new standards and guidance shall be applied prospectively
from the beginning of the year of the ﬁrst-time application.
The revised accounting standards and guidance for (b) presentation of
the consolidated balance sheet and (c) presentation of the consolidated
statement of income shall be applied to all periods presented in ﬁnancial
statements containing the ﬁrst-time application of the revised standards
and guidance.
The revised standards and guidance for (d) provisional accounting treatments for a business combination are eﬀective for a business combination
which occurs on or after the beginning of annual periods beginning on orafter April 1, 2015. Earlier application is permitted for a business combination which occurs on or after the beginning of annual periods beginning on
or after April 1, 2014.
The Company applied the revised accounting standards and guidancefor (a) transactions with non-controlling interest, (b) presentation of
the consolidated balance sheet, (c) presentation of the consolidated
statement of income, and (e) acquisition-related costs above, eﬀective
April 1, 2015, and (d) provisional accounting treatments for a businesscombination above for a business combination which occurred on orafter April 1, 2015. The revised accounting standards and guidance for (a)transactions with non-controlling interest and (e) acquisition-related costs
were applied prospectively.
With respect to (b) presentation of the consolidated balance sheet and(c) presentation of the consolidated statement of income, the applicableline items in the 2015 consolidated ﬁnancial statements have been accordingly reclassiﬁed and presented in line with those in 2016.
There was no impact from these accounting changes.

e. Cash Equivalents—Cash equivalents are short-term investments thatare readily convertible into cash and that are exposed to insigniﬁcant risk ofchanges in value. Cash equivalents include time deposits, commercial paperand bond funds, all of which mature or become due within three months ofthe date of acquisition.
f. Marketable and Investment Securities—Marketable and investment
securities are classiﬁed and accounted for, depending on management’s
intent, as follows: (1) held-to-maturity debt securities, for which there is apositive intent and ability to hold to maturity, are reported at amortized
cost; and (2) available-for-sale securities, which are not classiﬁed as eitherof the aforementioned securities, are reported at fair value, with unrealized
gains and losses, net of applicable taxes, reported in a separate componentof equity.
Non-marketable available-for-sale securities are stated at cost determined by the moving-average method. For other-than-temporary declines
in fair value, investment securities are reduced to net realizable value by acharge to income.
g. Allowance for Doubtful Accounts—The allowance for doubtful
accounts is stated in amounts considered to be appropriate based on theGroup’s past credit loss experience and an evaluation of potential losses in
the receivables outstanding.

h. Inventories—Inventories are stated at the lower cost determined by theaverage cost method or net selling value for the Company and its domestic
subsidiaries, and at the lower of cost, determined by the moving-averagemethod, or market for foreign subsidiaries.

i. Property, Plant and Equipment—Property, plant and equipment arestated at cost. Depreciation is computed by the straight-line method overthe estimated useful lives of the assets. The range of useful lives is from 31
to 50 years for buildings and structures, from 5 to 11 years for machineryand equipment, and from 2 to 15 years for furniture and ﬁxtures.
Lease assets are depreciated by the straight-line method over therespective lease periods.

j. Long-lived Assets—The Group reviews its long-lived assets for impairment whenever events or changes in circumstance indicate the carrying
amount of an asset or asset group may not be recoverable. An impairment
loss is recognized if the carrying amount of an asset or asset group exceeds
the sum of the undiscounted future cash ﬂows expected to result from thecontinued use and eventual disposition of the asset or asset group. The
impairment loss would be measured as the amount by which the carrying
amount of the asset exceeds its recoverable amount, which is the higher ofthe discounted cash ﬂows from the continued use and eventual dispositionof the asset or the net selling price at disposition.

k. Software—Software to be sold is amortized at the greater of either the
proportional amount to be amortized in proportion of the actual sales ofthe software during the current year to the estimated total sales over theestimated salable years or the amount to be amortized using the straightline method over the estimated salable years. The estimated salable years
are principally three years.
Software for internal use is amortized by the straight-line method over theestimated usable years. The estimated usable years are principally ﬁve years.
l. Retirement and Pension Plans—The Company has deﬁned beneﬁt pension plans for employees’ retirement beneﬁts and accounted for the liability
for retirement beneﬁts based on the projected beneﬁt obligations and plan
assets at the balance sheet date. Actuarial gains and losses are amortizedon a straight-line basis over ﬁve years within the average remaining service
period. Past service costs are amortized on a straight-line basis over ﬁve
years within the average remaining service period.
Certain of its subsidiaries have unfunded lump-sum payment plansfor employees’ retirement beneﬁts and accounted for the liability for
retirement beneﬁts based on the required amount in accordance with theretirement allowance regulations.
In May 2012, the ASBJ issued ASBJ Statement No. 26, “AccountingStandard for Retirement Beneﬁts” and ASBJ Guidance No. 25, “Guidance on
Accounting Standard for Retirement Beneﬁts,” which replaced the accounting standard for retirement beneﬁts that had been issued by the BusinessAccounting Council in 1998 with an eﬀective date of April 1, 2000, and theother related practical guidance, and were followed by partial amendmentsfrom time to time through 2009.
(a) Under the revised accounting standard, actuarial gains and losses andpast service costs that are yet to be recognized in proﬁt or loss arerecognized within equity (accumulated other comprehensive income),
after adjusting for tax eﬀects, and any resulting deﬁcit or surplus isrecognized as a liability (liability for retirement beneﬁts) or asset (asset
for retirement beneﬁts).
(b) The revised accounting standard does not change how to recognize
actuarial gains and losses and past service costs in proﬁt or loss. Thoseamounts are recognized in proﬁt or loss over a certain period no longer
than the expected average remaining service period of the employees.
However, actuarial gains and losses and past service costs that arosein the current period and have not yet been recognized in proﬁt or loss
are included in other comprehensive income, and actuarial gains andlosses and past service costs that were recognized in other comprehensive income in prior periods and then recognized in proﬁt or loss in thecurrent period are treated as reclassiﬁcation adjustments (see Note 13).
(c) The revised accounting standard also made certain amendments
relating to the method of attributing expected beneﬁt to periods, thediscount rate, and expected future salary increases.

This accounting standard and the guidance for (a) and (b) above are effective for the end of annual periods beginning on or after April 1, 2013, andfor (c) above are eﬀective for the beginning of annual periods beginning on
or after April 1, 2014, or for the beginning of annual periods beginning on
or after April 1, 2015, subject to certain disclosure in March 2015, all withearlier application being permitted from the beginning of annual periods
beginning on or after April 1, 2013. However, no retrospective applicationof this accounting standard to consolidated ﬁnancial statements in priorperiods is required.
The Company applied the revised accounting standard and guidance
for retirement beneﬁts for (a) and (b) above, eﬀective March 31, 2014, andfor (c) above, eﬀective April 1, 2014.
With respect to (c) above, the Company changed the method of
attributing the expected beneﬁt to periods from a point basis to a beneﬁt
formula basis, the method of determining the discount rate from using theperiod which approximates the expected average remaining service period
to using a single weighted average discount rate reﬂecting the estimatedtiming and amount of beneﬁt payment, and recorded the eﬀect of (c) above
as of April 1, 2014, in retained earnings. As a result, retained earnings as ofApril 1, 2014, decreased by ¥195 million.
Unfunded retirement beneﬁts for the Company’s directors are provided
at the estimated amount which would be required if such individuals
retired at the balance sheet date. However, the Company abolished its unfunded retirement beneﬁt plan on June 24, 2005. No additional provisions
have been recorded for retirement beneﬁts to be paid to the Company’s
directors since then. The liability for directors’ retirement beneﬁts is theamount provided in proportion to the term that present directors had beenin place before June 24, 2005.
(Additional Information)
The Company transferred a part of the deﬁned beneﬁt pension plans to
the deﬁned contribution pension plans on April 1, 2015. The Company
accounted the transfer in accordance with “Guidance on Accounting forTransfers between Retirement Beneﬁt Plans” (ASBJ Application GuidanceNo. 1 issued on January 31, 2002) to account for the transfer. As a result of
this change, ¥1,038 million ($9,186 thousand) of other income was recorded
for the year ended March 31, 2016.

m. Asset Retirement Obligations—In March 2008, the ASBJ issued ASBJ
Statement No. 18, “Accounting Standard for Asset Retirement Obligations”
and ASBJ Guidance No. 21, “Guidance on Accounting Standard for Asset
Retirement Obligations.” Under this accounting standard, an asset
retirement obligation is deﬁned as a legal obligation imposed either by law
or contract that results from the acquisition, construction, development
and normal operation of a tangible ﬁxed asset and is associated with theretirement of such tangible ﬁxed asset. The asset retirement obligation isrecognized as the sum of the discounted cash ﬂows required for the future
asset retirement and is recorded in the period in which the obligation isincurred if a reasonable estimate can be made. If a reasonable estimateof the asset retirement obligation cannot be made in the period the asset
retirement obligation is incurred, the liability should be recognized whena reasonable estimate of the asset retirement obligation can be made.
Upon initial recognition of a liability for an asset retirement obligation, an
asset retirement cost is capitalized by increasing the carrying amount of
the related ﬁxed asset by the amount of the liability. The asset retirement
cost is subsequently allocated to expense through depreciation over theremaining useful life of the asset. Over time, the liability is accreted to its
present value each period. Any subsequent revisions to the timing or theamount of the original estimate of undiscounted cash ﬂows are reﬂected
as an adjustment to the carrying amount of the liability and the capitalized
amount of the related asset retirement cost.

n. Stock Options—ASBJ Statement No. 8, “Accounting Standard for Stock
Options” and related guidance are applicable to stock options granted on
and after May 1, 2006.

Sysmex Report 2016 82

 Financial and Other Information

This standard requires companies to recognize compensation expensefor employee stock options based on the fair value at the date of grant andover the vesting period as consideration for receiving goods or services.
The standard also requires companies to account for stock options granted
to nonemployees based on the fair value of either the stock option or the
goods or services received. In the balance sheet, the stock options arepresented as stock acquisition rights as a separate component of equity
until exercised.

o. Research and Development—R&D costs are charged to income as
incurred. Such costs were ¥17,775 million ($157,301 thousand) and ¥14,692
million for the years ended March 31, 2016 and 2015, respectively.
p. Leases—In March 2007, the ASBJ issued ASBJ Statement No. 13,“Accounting Standard for Lease Transactions,” which revised the previous
accounting standard for lease transactions.
(1) Finance Leases as Lessee
Under the previous accounting standard, ﬁnance leases that weredeemed to transfer ownership of the leased property to the lessee
were capitalized. However, other ﬁnance leases were permitted to beaccounted for as operating lease transactions if certain “as if capitalized” information was disclosed in the notes to the lessee’s ﬁnancial
statements. The revised accounting standard requires that all ﬁnancelease transactions be capitalized by recognizing lease assets and leaseobligations in the balance sheet. In addition, the revised accounting
standard permits leases that existed at the transition date and do nottransfer ownership of the leased property to the lessee to continue tobe accounted for as operating lease transactions.
(2) Finance Leases as Lessor
Under the previous accounting standard, ﬁnance leases that weredeemed to transfer ownership of the leased property to the lessee weretreated as sales. However, other ﬁnance leases were permitted to beaccounted for as operating lease transactions if certain “as if sold” information was disclosed in the notes to the lessor’s ﬁnancial statements.
The revised accounting standard requires that all ﬁnance leases thatare deemed to transfer ownership of the leased property to the lessee
are recognized as lease receivables, and all ﬁnance leases that are notdeemed to transfer ownership of the leased property to the lessee arerecognized as investments in lease.

q. Bonuses to Directors—Bonuses to directors are accrued at the end of
the year to which such bonuses are attributable.

r. Construction Contracts—In December 2007, the ASBJ issued ASBJ
Statement No. 15, “Accounting Standard for Construction Contracts” andASBJ Guidance No. 18, “Guidance on Accounting Standard for Construction
Contracts.” Under this accounting standard, construction revenue andconstruction costs should be recognized by the percentage-of-completion
method if the outcome of a construction contract can be estimatedreliably. When total construction revenue, total construction costs andthe stage of completion of the contract at the balance sheet date can bereliably measured, the outcome of a construction contract is deemed to be
estimated reliably. If the outcome of a construction contract cannot be reliably estimated, the completed-contract method should be applied. When it
is probable that the total construction costs will exceed total construction
revenue, an estimated loss on the contract should be immediately recognized by providing for a loss on construction contracts.

s. Income Taxes—The provision for income taxes is computed based on
the pretax income included in the consolidated statement of income. The
asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary diﬀerences
between the carrying amounts and the tax bases of assets and liabilities.
Deferred taxes are measured by applying currently enacted income tax
rates to the temporary diﬀerences.

83 Sysmex Report 2016

t. Foreign Currency Transactions—All short-term and long-termmonetary receivables and payables denominated in foreign currencies aretranslated into Japanese yen at the exchange rates at the balance sheet
date. The foreign exchange gains and losses from translation are recognizedin the consolidated statement of income to the extent that they are nothedged by forward exchange contracts.

u. Foreign Currency Financial Statements—The balance sheet accountsof the foreign subsidiaries are translated into Japanese yen at the current
exchange rate as of the balance sheet date except for equity, which istranslated at the historical rate. Diﬀerences arising from such translation
are shown as “Foreign currency translation adjustments” under accumulated other comprehensive income in a separate component of equity.
Revenue and expense accounts of foreign subsidiaries are translated into
yen at the average exchange rate.
v. Derivatives and Hedging Activities—The Group uses foreignexchange forward contracts and interest rate swaps to manage its exposure
to ﬂuctuations in foreign exchange and interest rates. The Group does notenter into derivatives for trading or speculative purposes.
Derivative ﬁnancial instruments and foreign currency transactions areclassiﬁed and accounted for as follows: (1) all derivatives are recognized aseither assets or liabilities and measured at fair value, and gains or losses onderivative transactions are recognized in the consolidated statement of income; and (2) for derivatives used for hedging purposes, if such derivatives
qualify for hedge accounting because of high correlation and eﬀectivenessbetween the hedging instruments and the hedged items, gains or losses onderivatives are deferred until maturity of the hedged transactions.
Interest rate swaps which qualify for hedge accounting and meet
speciﬁc matching criteria are not remeasured at market value but thediﬀerential paid or received under the swap agreements is recognized andincluded in interest expense or income.

w. Per Share Information—Basic net income per share is computedby dividing net income attributable to common shareholders by theweighted-average number of common shares outstanding for the period,
retroactively adjusted for stock splits.
Diluted net income per share reﬂects the potential dilution that could
occur if warrants were exercised. Diluted net income per share of common
stock assumes full exercise of outstanding warrants.
Cash dividends per share presented in the accompanying consolidated
statement of income are dividends applicable to the respective ﬁscal years,
including dividends to be paid after the end of the year, retroactively
adjusted for stock splits.
x. Accounting Changes and Error Corrections—In December 2009, the
ASBJ issued ASBJ Statement No. 24, “Accounting Standard for Accounting
Changes and Error Corrections” and ASBJ Guidance No. 24, “Guidanceon Accounting Standard for Accounting Changes and Error Corrections.”
Accounting treatments under this standard and guidance are as follows:(1) Changes in Accounting Policies
When a new accounting policy is applied following revision of an accounting standard, the new policy is applied retrospectively unless the revised
accounting standard includes speciﬁc transitional provisions, in whichcase the entity shall comply with the speciﬁc transitional provisions.
(2) Changes in Presentation
When the presentation of ﬁnancial statements is changed, priorperiod ﬁnancial statements are reclassiﬁed in accordance with thenew presentation.
(3) Changes in Accounting Estimates
A change in an accounting estimate is accounted for in the period of
the change if the change aﬀects that period only, and is accounted forprospectively if the change aﬀects both the period of the change andfuture periods.

(4) Corrections of Prior-Period Errors
When an error in prior-period ﬁnancial statements is discovered, thosestatements are restated.

y. New Accounting Pronouncements
Tax Eﬀect Accounting—On March 28, 2016, the ASBJ issued ASBJ
Guidance No. 26, “Guidance on Recoverability of Deferred Tax Assets,”
which included certain revisions of the previous accounting and auditing
guidance issued by the Japanese Institute of Certiﬁed Public Accountants.
While the new guidance continues to follow the basic framework of theprevious guidance, it provides new guidance for the application of judgment in assessing the recoverability of deferred tax assets.
The previous guidance provided a basic framework which included
certain speciﬁc restrictions on recognizing deferred tax assets dependingon the company’s classiﬁcation in respect of its proﬁtability, taxable proﬁt
and temporary diﬀerences, etc.
The new guidance does not change such basic framework but, in
limited cases, allows companies to recognize deferred tax assets even for adeductible temporary diﬀerence for which it was speciﬁcally prohibited torecognize a deferred tax asset under the previous guidance, if the company
can justify, with reasonable grounds, that it is probable that the deductible
temporary diﬀerence will be utilized against future taxable proﬁt in somefuture period.
The new guidance is eﬀective for the beginning of annual periods
beginning on or after April 1, 2016. Earlier application is permitted for annual periods ending on or after March 31, 2016. The new guidance shall not
be applied retrospectively and any adjustments from the application of the
new guidance at the beginning of the reporting period shall be reﬂected
within retained earnings or accumulated other comprehensive income at
the beginning of the reporting period.
The Company expects to apply the new guidance on recoverability ofdeferred tax assets eﬀective April 1, 2016, and is in the process of measuring the eﬀects of applying the new guidance in future applicable periods.

3. SHORT-TERM INVESTMENTS AND INVESTMENT SECURITIESShort-term investments and investment securities as of March 31, 2016 and2015, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2016
2015
2016
Current:
Time deposits other thancash equivalents
¥ 63
¥ 53
$ 558
Mutual funds
299
241
2,646
Total
¥ 362
¥ 294
$ 3,204
Non-current:
Marketable equity
securities¥ 3,264 ¥ 3,595$ 28,885
Non-marketable securities
1,442
1,648
12,761
Total¥ 4,706 ¥ 5,243$ 41,646
The costs and aggregate fair values of investment securities as ofMarch 31, 2016 and 2015, were as follows:
Millions of Yen
2016
Unrealized Unrealized
Cost
Fair Value
Gains
LossesAvailable-for-sale Equity securities¥ 1,569¥1,696¥ (1) ¥ 3,264

Cost
Available-for-sale Equity securities¥ 1,569

Millions of Yen
2015
Unrealized Unrealized
Fair Value
Gains
Losses¥ 2,026¥ 3,595

Thousands of U.S. Dollars
2016
Unrealized Unrealized
Cost
Fair Value
Gains
LossesAvailable-for-sale Equity securities$ 13,885$ 15,009$ (9) $ 28,885

The information for available-for-sale securities which were sold during
the year ended March 31, 2015, was as follows:
Millions of Yen
2015
Realized Realized
Proceeds
Gains
LossesAvailable-for-sale Equity securities¥1¥0

The impairment losses on available-for-sale securities for the year
ended March 31, 2016, were ¥400 million ($3,540 thousand).

4. INVENTORIESInventories as of March 31, 2016 and 2015, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2016
2015
2016
Finished products¥ 27,057 ¥ 22,737$ 239,442
and merchandiseWork in process
2,984
2,870
26,408Raw materials
5,042
3,801
44,619Supplies
4,779
540
480
Total
¥ 35,623 ¥ 29,888$ 315,248

5. LONG-TERM DEBT
Long-term debt as of March 31, 2016, consisted of the following:
Millions
Thousands ofof YenU.S. Dollars
Loans from banks, due through 2017,with interest of 8.87% for 2016:
Collateralized
Total

¥2

$ 18

2

18

Less current portion

(1)

(9)

Long-term debt, less current portion

¥1

$ 9

Annual maturities of long-term debt as of March 31, 2016, were as follows:
Millions
Thousands ofYear Ending March 31
of YenU.S. Dollars
2016
¥1
$ 9
2017

1

9

Total

¥2

$ 18

Sysmex Report 2016 84

 Financial and Other Information

The carrying amounts of assets pledged as collateral for the above
collateralized long-term debt at March 31, 2016, were as follows:
Millions ofThousands of
U.S. Dollars
YenLand
Buildings and structures - net ofaccumulated depreciation
Machinery and equipment - net ofaccumulated depreciation
Total

¥ 23

$ 203

207

1,832

13

115

¥ 243

$ 2,150

6. RETIREMENT AND PENSION PLANS
The Company and certain of its subsidiaries have retirement benefit plansfor employees. Under most circumstances, employees terminating theiremployment are entitled to retirement benefits determined based on therate of pay at the time of termination, years of service and certain otherfactors. Employees are entitled to larger payments if the termination is
involuntary, by retirement at the mandatory retirement age or by death.
The Company has cash balance pension plans as defined benefit
pension plans. Certain of its subsidiaries adopt a simple method to
calculate retirement benefit obligation as for lump-sum payment plans. The
Company and certain of its subsidiaries have defined contribution plans.
In April 1, 2015, the Company implemented revisions to its pension
plan and transferred a portion of defined benefit pension plans to defined
contribution plans.

(1) The changes in deﬁned beneﬁt obligation for the years ended
March 31, 2016 and 2015, were as follows:
Millions of Yen
2016

2015

Balance at beginning of year
¥ 13,060 ¥ 11,980(as previously reported)
Cumulative effect of303
accounting change
Balance at beginning of year
13,06012,283(as restated)Thousands of
U.S. Dollars
2016$ 115,575(3) Reconciliation between the liability recorded in the consolidatedbalance sheet and the balances of deﬁned beneﬁt obligation andplan assets
Millions of Yen
2016¥ 9,216 ¥ 12,599$ 81,558

Plan assets(9,799)(13,560)(86,717)

(583)

(961)

(5,159)Total
Unfunded defined
benefit obligation
Net liability (asset) arisingfrom defined
benefit obligation

464

461

4,106

¥ (119) ¥(500)$ (1,053)

2016

2015

Thousands of
U.S. Dollars
2016

¥ 464

¥ 461

$ 4,106

(583)

(961)

(5,159)Millions of Yen

Liability for retirement
benefits
Asset for retirement benefits
Net liability (asset) arisingfrom defined
benefit obligation¥ (119)

2016

2015

Service cost

¥ 725

¥ 939

$ 6,416

Interest cost

83

148

734

939

6,416
735

Actuarial (gains) losses

452

458

4,000

Benefits paid

(620)

(554)

(5,487)

Net periodic benefit costs¥ 194

Prior service cost

112

991

(4,049)(35,832)

Profit due to transition todefined contribution
pension plans*¥ (1,038)

Balance at end of year

¥ 9,680 ¥ 13,060$ 85,664(2) The changes in plan assets for the years ended March 31, 2016 and2015, were as follows:

2015

Thousands of
U.S. Dollars
2016

Balance at beginning of year ¥ 13,560 ¥ 11,362$ 120,000

Millions of Yen
2016
Expected return onplan assets

303

341

2,681

Actuarial (gains) losses

(550)

1,577

(4,867)

Contributions fromthe employer

500

752

4,425

Benefits paid

(566)

(472)

(5,009)Decrease due to transfer
to defined contribution
pension plans
Balance at end of year

85 Sysmex Report 2016

¥ 9,799 ¥ 13,560(30,513)$ 86,717

(303)

(341)

(2,681)

(331)

(353)

(2,929)

20

6

177

¥ 399

$ 1,717$ (9,186)* The amount was recorded in the other income of the consolidated statement ofincome for the year ended March 31, 2016.

(5) Amounts recognized in other comprehensive income (before
income tax effect) in respect of defined retirement benefit plans
for the years ended March 31, 2016 and 2015
Millions of Yen
2016
Prior service cost
Actuarial (gains) losses
Total(3,448)

272

2,080

2,407

¥ 208

¥ 2,070$ 1,841¥(7) Plan assets
a. Components of plan assets

Domestic debt investments

29%

29%

Domestic equity investments

28

30

Foreign debt investments

1011Foreign equity investments

25

25

Others

8

5

Total

100%

100%

$ (1,053)

Thousands of
U.S. Dollars
2016

Millions of Yen

148

(734)

¥ (500)(4) The components of net periodic benefit costs for the years ended
March 31, 2016 and 2015, were as follows:

83

(214)

$ (566)¥ (64)

b. Method of determining the expected rate of return on plan assets

725

(83)

(10)

2016
Unrecognized priorservice cost
Unrecognized actuarial(gains) losses

Plan assets as of March 31, 2016 and 2015, consisted of the following:
2016
2015

Current service cost

Others2015

Thousands of
U.S. Dollars
2016

Millions of Yen

Total

Interest cost

Decrease due to transfer
to defined contribution
pension plans

Thousands of
U.S. Dollars
2016

Funded defined
benefit obligation

Expected return onplan assets
Recognized actuarial(gains) losses
Amortization of priorservice cost

115,575

2015(6) Amounts recognized in accumulated other comprehensive income(before income tax effect) in respect of defined retirement benefit
plans as of March 31, 2016 and 2015

¥

(54)

2015
¥

6

Thousands of
U.S. Dollars
2016$

The expected rate of return on plan assets is determined considering
the long-term rates of return which are expected currently and in the
future from the various components of the plan assets.

(8) Assumptions used for the years ended March 31, 2016 and 2015,
are set forth as follows:
2016

2015

Discount rate

0.6%

1.0%

Expected rate of return on plan assets

3.0%

3.0%

766

(16,000)¥ (1,862)¥ 772$ (16,478)

Plan assets
Sum of actuarial liabilities ofpension plan and minimum
actuarial reserve
Net balance

Required contributions to the defined contribution pension plan of theCompany and certain of its subsidiaries were ¥1,467 million ($12,982
thousand) and ¥638 million as of March 31, 2016 and 2015, respectively.
In addition, the Company and certain of its subsidiaries participate
in contributory multi-employer pension plans covering substantially allof their employees. The Company and certain of its subsidiaries cannot
reasonably calculate the amount of plan assets corresponding to thecontributions to multi-employer plan. Therefore, it is accounted for using
the same method as a defined contribution plan.
The contributions to such multi-employer plan, which are accounted
for using the same method as a defined contribution plan, were ¥606 million($5,363 thousand) and ¥572 million as of March 31, 2016 and 2015, respectively.

Year Ended March 31, 2016
The funded status of the multi-employer plan calculated as of March 31,
2015, was as follows:
Millions of Yen

Plan assets
Sum of actuarial liabilities ofpension plan and minimum
actuarial reserve
Net balance

The Pension
Osaka
Fund of Japan
Pharmaceutical
Electronics
WelfareInformation
Pension Fund
Technology
Association
Industry¥ 261,939¥ 334,668
284,215

381,438¥ (22,276)¥ (46,770)

The Pension
Osaka
Fund of Japan
Pharmaceutical
Electronics
WelfareInformation
Pension Fund
Technology
Association
Industry$ 2,318,044$ 2,961,664
2,515,177

3,375,558$ (197,133)$ (413,894)

The net balance above is mainly caused by past service cost of ¥79,804
million ($706,230 thousand) and general reserve of ¥10,758 million ($95,204
thousand). Past service cost under the plan is amortized on a straight-line
basis over 20 years for The Pension Fund of Japan Electronics Information
Technology Industry or over 16 years for Osaka Pharmaceutical Welfare
Pension Fund Association, and the special contributions of ¥8 million ($71
thousand), which are utilized for such amortization, were expensed in the
consolidated statement of income of the Group.
The contribution ratio of the Group in the multi-employer plancalculated as of March 31, 2015, was as follows:
The Pension
Osaka
Fund of Japan
Pharmaceutical
Electronics
WelfareInformation
Pension Fund
Technology
Association
Industry
The contribution ratio of
the Group in
5.59%
0.15%
the multi-employer plan
The ratios above do not represent the actual actuarial liability ratio of
the Group.

Year Ended March 31, 2015
The funded status of the multi-employer plan calculated as of March 31,
2014, was as follows:(9) Defined contribution pension plan(478)

(1,808)

Thousands of U.S. Dollars

Millions of Yen

Plan assets
Sum of actuarial liabilities ofpension plan and minimum
actuarial reserve
Net balance

The Pension
Osaka
Fund of Japan
Pharmaceutical
Electronics
WelfareInformation
Pension Fund
Technology
Association
Industry¥ 231,951¥ 292,417
262,247

366,867¥ (30,296)¥ (74,450)

The net balance above is mainly caused by past service cost of ¥82,118
million and a deficiency brought forward of ¥23,869 million. Past service
cost under the plan is amortized on a straight-line basis over 20 years for
The Pension Fund of Japan Electronics Information Technology Industry orover 17 years for Osaka Pharmaceutical Welfare Pension Fund Association,and the special contributions of ¥7 million, which are utilized for such
amortization, were expensed in the consolidated statement of income of
the Group.

Sysmex Report 2016 86

 Financial and Other Information

The contribution ratio of the Group in the multi-employer plancalculated as of March 31, 2014, was as follows:
The Pension
Osaka
Fund of Japan
Pharmaceutical
Electronics
WelfareInformation
Pension Fund
Technology
Association
Industry
The contribution ratio of
the Group in
5.29%
0.16%
the multi-employer plan

Semiannual interim dividends may also be paid once a year upon
resolution by the Board of Directors if the articles of incorporationof the company so stipulate. The Companies Act provides certain
limitations on the amounts available for dividends or the purchase oftreasury stock. The limitation is deﬁned as the amount available for
distribution to the shareholders, but the amount of net assets after
dividends must be maintained at no less than ¥3 million.

(b) Increases/decreases and transfer of common stock, reserveand surplus
The Companies Act requires that an amount equal to 10% of dividends
must be appropriated as a legal reserve (a component of retained
earnings) or as additional paid-in capital (a component of capitalsurplus) depending on the equity account charged upon the paymentof such dividends until the aggregate amount of legal reserve andadditional paid-in capital equals 25% of the common stock. Under theCompanies Act, the total amount of additional paid-in capital and legal
reserve may be reversed without limitation. The Companies Act also
provides that common stock, legal reserve, additional paid-in capital,
other capital surplus and retained earnings can be transferred among
the accounts within equity under certain conditions upon resolution of
the shareholders.

The ratios above do not represent the actual actuarial liability ratio of
the Group.
The Company also has recorded a liability for an unfunded retirement
benefit plan covering all of its directors in the amount of ¥102 million ($903
thousand) and ¥102 million as of March 31, 2016 and 2015, respectively.

7. EQUITY
Japanese companies are subject to the Companies Act of Japan (the“Companies Act”). The significant provisions in the Companies Act that
affect financial and accounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time
during the ﬁscal year in addition to the year-end dividend upon
resolution at the shareholders’ meeting. Additionally, for companies
that meet certain criteria including (1) having a Board of Directors, (2)having independent auditors, (3) having an Audit & Supervisory Board,and (4) the term of service of the directors being prescribed as one year
rather than the normal two year term by its articles of incorporation,
the Board of Directors may declare dividends (except for dividends-inkind) at any time during the ﬁscal year if the company has prescribedso in its articles of incorporation. However, the Company cannot do so
because it does not meet all the above criteria.
The Companies Act permits companies to distribute dividends-inkind (noncash assets) to shareholders subject to a certain limitation andadditional requirements.

(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury
stock and dispose of such treasury stock by resolution of the Boardof Directors. The amount of treasury stock purchased cannot exceed
the amount available for distribution to the shareholders which isdetermined by a speciﬁc formula.
Under the Companies Act, stock acquisition rights are presented as aseparate component of equity.
The Companies Act also provides that companies can purchase bothtreasury stock acquisition rights and treasury stock. Such treasury stockacquisition rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.

The stock option activity is as follows:

March 31, 2014 - Outstanding
Exercised2007 Stock Option

9 directors
152 employees
18 directors of subsidiaries
42 employees of subsidiaries
6 directors
203 employees
34 directors of subsidiaries
43 employees of subsidiaries

2013 Stock Option

1,460,000

Date of Grant
July 30, 2007

September 13, 2013

Exercise
Price

Exercise Period¥ 1,163($ 10.29)

From July 30, 2009 to
July 29, 2015

¥ 3,110 From September 13, 2015 to($ 27.52)
September 12, 2021

1,452,000(14,000)
1,438,000
677,600(340,800)

Canceled
March 31, 2015 - Outstanding

336,800

For the year ended March 31, 2016
Non-vested
March 31, 2015 - Outstanding
GrantedCanceled
Vested1,438,000(4,000)(1,434,000)

March 31, 2016 - Outstanding
VestedMarch 31, 2015 - Outstanding

336,800

Vested1,434,000

Exercised(263,200)

Canceled(73,600)

March 31, 2016 - Outstanding

Fair value price at grant date
Number of
Options Granted(Shares)
2,932,800(Shares)

VestedAverage stock price at exercise

Persons Granted(Shares)Non-vested
March 31, 2014 - Outstanding
GrantedCanceled
VestedMarch 31, 2015 - Outstanding
Vested

8. STOCK OPTIONSStock Option2013 Stock
OptionFor the year ended March 31, 2015

Exercise price

The stock options outstanding as of March 31, 2016, are as follows:

9. INCOME TAXES
2007 Stock
Option(174,800)(4,200)1,255,000¥ 1,163($ 10.29)¥ 7,094($ 62.78)¥ 98,325($ 870.13)¥ 3,110($ 27.52)¥ 7,073($ 62.59)¥ 174,900($ 1,547.79)

The Assumptions Used to Measure Fair Value of 2007 Stock Option
Estimate method:Black-Scholes option pricing model
Volatility of stock price:26.14%
Estimated remaining
outstanding period:
five years
Estimated dividend:¥ 36 per share
Risk free interest rate:
1.403%The Assumptions Used to Measure Fair Value of 2013 Stock Option
Estimate method:Black-Scholes option pricing model
Volatility of stock price:34.51%
Estimated remaining
outstanding period:
five years
Estimated dividend:¥ 36 per share
Risk free interest rate:
0.250%

87 Sysmex Report 2016

The Company and its domestic subsidiaries are subject to Japanese national
and local income taxes which, in the aggregate, resulted in a normal
eﬀective statutory tax rate of approximately 33.0% and 35.6% for the years
ended March 31, 2016 and 2015, respectively. Foreign subsidiaries are
subject to income taxes of the countries in which they operate.
The tax eﬀects of signiﬁcant temporary diﬀerences and tax loss
carryforwards which resulted in deferred tax assets and liabilities at March
31, 2016 and 2015, are as follows:
Thousands ofMillions of Yen
U.S. Dollars
2016
2015
2016
Deferred tax assets (current):
Unrealized intercompany¥ 3,735 ¥ 4,887$ 33,053
profits
Inventories
513
555
4,540
Accrued bonuses
1,304
1,196
11,540Accrued enterprise tax
527
575
4,664
Other
1,846
1,864
16,336
Total
7,925
9,077
70,133
Deferred tax assets(non-current):
Depreciation
191
147
1,690
Unrealized intercompany
725
944
6,416
profits
Liability for retirement
113
117
1,000
benefits
Software
927
930
8,204
Investment securities
280
299
2,478
Tax loss carryforwards
961
381
8,504
Other
585
565
5,177
Less valuation allowance
(952)
(593)
(8,425)
Total
2,830
2,790
25,044
Deferred tax liabilities(current):
Unearned revenue

217

1,921

Other
112
191
Total
329
191
Deferred tax liabilities(non-current):
Net unrealized gain on
available-for-sale securities
518
653
Revaluation of land forconsolidation
344
400
Revaluation of intangible
assets for consolidation
905
1,151
Asset for retirement benefits
179
313
Investment loss for
subsidiaries capital
reduction by corporation
tax law
324
342
Undistributed earnings of
8,079
7,558
foreign subsidiaries
Other
931
1,100
Total
11,28011,517
Net deferred tax assets¥ (854) ¥ 159(liabilities)

991
2,912

4,584
3,044
8,009
1,584

2,867
71,496
8,238
99,822$ (7,557)

Sysmex Report 2016 88

 Financial and Other Information

A reconciliation between the normal eﬀective statutory tax rates andthe actual eﬀective tax rates reﬂected in the accompanying consolidated
statements of income for the year ended March 31, 2015, is as follows:
Normal effective statutory tax rate
35.6%
Expenses not deductible for income tax purposes
0.9
Per capita levy
0.1
Foreign tax credit(0.3)
R&D tax credit(1.7)
Amortization of goodwill
1.1
Effect of tax rate reduction
0.5
Tax effect on undistributed earnings of foreign subsidiaries
6.8
Different tax rates applied to foreign subsidiaries(3.1)
Change in valuation allowance
0.9
Other - net
1.0
Actual effective tax rate
41.8%
Since the actual eﬀective tax rate at March 31, 2016, diﬀered fromthe normal eﬀective statutory tax rate by less than 5%, disclosure of details
is omitted.
Tax reform laws enacted in 2015 in Japan changed the normal eﬀective
statutory tax rate for the ﬁscal year beginning on or after April 1, 2015, toapproximately 33.0% and for the ﬁscal year beginning on or after April 1,
2016, to approximately 32.2%. The eﬀect of these changes was to decreasedeferred tax assets, net of deferred tax liabilities, by ¥69 million andincrease accumulated other comprehensive income for unrealized gain
on available-for-sale securities by ¥68 million, deferred gain on derivatives
under hedge accounting by ¥0 million, deﬁned retirement beneﬁt plan by¥67 million in the consolidated balance sheet as of March 31, 2015, and toincrease income taxes-deferred in the consolidated statement of income
for the year then ended by ¥204 million.
New tax reform laws enacted in 2016 in Japan changed the normal
eﬀective statutory tax rate for the ﬁscal year beginning on or after April 1,
2016, to approximately 30.8% and for the ﬁscal year beginning on or after
April 1, 2018, to approximately 30.6%. The eﬀect of these changes was todecrease deferred tax assets, net of deferred tax liabilities, by ¥192 million($1,699 thousand) and increase accumulated other comprehensive income
for unrealized gain on available-for-sale securities by ¥28 million ($248
thousand), deferred gain on derivatives under hedge accounting by ¥0
million ($0 thousand), deﬁned retirement beneﬁt plan by ¥3 million ($27
thousand) in the consolidated balance sheet as of March 31, 2016, and toincrease income taxes-deferred in the consolidated statement of income
for the year then ended by ¥223 million ($1,973 thousand).

10. LEASES(Lessee)
The Group leases certain furniture, ﬁxtures and other assets.
The minimum rental commitments under noncancelable operatingleases are as follows:
Millions ofThousands of
Yen
U.S. Dollars
Due within one year
Due after one year
Total

2016

2016

¥ 2,474$ 21,894

11,763104,097¥ 14,237$ 125,991(Lessor)The net investments in lease are summarized as follows:
Millions of Yen

Thousands of
U.S. Dollars

2016

2015

2016

Gross lease receivables¥ 8,167¥ 4,812$ 72,274

Estimated residual values

1,032

1,020

9,133

Unearned interest income

(663)

(419)

(5,867)¥ 8,536¥ 5,413$ 75,540

Investments in lease

89 Sysmex Report 2016

Maturities of investment in lease for ﬁnance leases that are notdeemed to transfer ownership of the leased property to the lessee areas follows:
Millions ofThousands ofYear Ending March 31
Yen
U.S. Dollars
2017¥ 2,172$ 19,2212018
1,924
17,0272019
1,663
14,7172020
1,201
10,628
2021
715
6,327
2022 and thereafter
492
4,354
Total
¥ 8,167$ 72,274
Future rental income under noncancelable operating leases (including
imputed interest income):
Millions ofThousands of
Yen
U.S. Dollars
Due within one year
Due after one year
Total

2016

2016

¥ 1,234$ 10,920

2,648

23,434¥ 3,882$ 34,354

11. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group invests cash surpluses in low-risk ﬁnancial assets, mainly
short-term deposits and uses ﬁnancial instruments, mainly short-termbank loans, for funding. Derivatives are used, not for speculative
purposes, but to manage exposure to ﬁnancial risks as described in(2) below.
(2) Nature and Extent of Risks Arising from Financial Instruments
Receivables, such as trade notes, trade accounts and investments inlease, are exposed to customer credit risk. Although receivables in foreign currencies are exposed to the market risk of ﬂuctuation in foreign
currency exchange rates, the position, net of payables in foreign currencies, is hedged by using forward foreign currency contracts. Marketable
and investment securities, mainly listing shares, are exposed to the riskof market price ﬂuctuations.
Payment terms of payables, such as trade notes and trade accounts,
are mostly less than six months.
Maturities of ﬁnance lease obligations, which are mainly used for thefunding of equipment investments, are less than seven years after thebalance sheet date.
Derivatives mainly include forward foreign currency contracts, which
are used to manage exposure to market risks from changes in foreign
currency exchange rates of receivables.
Please see Note 12, “DERIVATIVES” for more details about instruments, hedged items and the policy for hedge accounting and assessment procedures for hedge eﬀectiveness.
(3) Risk Management for Financial Instruments

Credit risk management
Credit risk is the risk of economic loss arising from a counterparty’s
failure to repay or service debt according to the contractual terms. The
Group manages its credit risk from receivables on the basis of internal
guidelines, which include monitoring of payment term and balances ofmajor customers by each business administration department to identify
the default risk of customers at an early stage. The credit risk regarding
subsidiaries is also managed in the same manner. With respect toﬁnancial investments, the Group manages its exposure to credit risk byprohibiting its funding to high credit rated bonds in accordance with its
internal guidelines. Credit risk from derivatives is minimized because theGroup deals only with large ﬁnancial institutions.

Market risk management (foreign exchange risk)
Foreign currency trade receivables are exposed to market risk resulting
from ﬂuctuations in foreign currency exchange rates. Such foreign currency exchange risk, which is recognized with respect to each currency
and each month, is managed by using forward foreign currency contracts.
Forward foreign currency contracts are used when foreign currency tradereceivables are certainly expected from forecasted transactions according
to conditions in foreign currency exchange ﬂuctuations.
Marketable and investment securities are managed by monitoringmarket values and ﬁnancial position of issuers on a regular basis.
Derivative transactions have been approved by a predeﬁned decision
maker based on the internal guidelines, which prescribe the authority
and the limit, and managed by regularly conﬁrming the balance of eachday by the ﬁnance department.

Liquidity risk management
Liquidity risk comprises the risk that the Group cannot meet its
contractual obligations in full on their maturity dates. The Groupmanages its liquidity risk by holding adequate volumes of liquid assets
in view of business income, expenditure, and equipment investment
spending plan along with adequate ﬁnancial planning by the corporate
treasury department. Subsidiaries also report their ﬁnancial plans to theGroup. The ﬁnance department manages the liquidity risk by obtaining
information of cash ﬂows of the whole Group.
(4) Fair Values of Financial Instruments
Fair values of ﬁnancial instruments are based on quoted prices in active
markets. If a quoted price is not available, other rational valuation
techniques are used instead. The techniques include some changing
factors and the fair values may be changed by adopting diﬀerent assumptions. In addition, the contract amounts of derivatives in Note 12,“DERIVATIVES,” do not directly indicate the market risk of derivatives.
(a) Fair value of ﬁnancial instruments
The carrying amounts, fair values and unrealized gain/loss asof March 31, 2016 and 2015, are as follows. Note that ﬁnancial
instruments whose fair value cannot be reliably determined are notincluded (see (b)).
Millions of Yen
Carrying
Unrealized
Fair Value
March 31, 2016
AmountGain/Loss
Cash and cash equivalents¥ 56,482 ¥ 56,482
Receivables:
Trade notes
2,618
Trade accounts
52,706
Associated companies
225
Allowance for doubtful(589)
accounts (*1)
Receivables - net
54,96054,961¥ 1
Investments in lease
8,536
8,459
(77)
Investment securities Available-for-sale securities
3,264
3,264
Total
¥ 123,242 ¥ 123,166¥ (76)
Payables:Trade notes¥ 1,745 ¥ 1,745
Trade accounts
17,986
17,986
Associated companies
138
138
Lease obligations
883
867¥ (16)
Income taxes payable
6,818
6,818
Total
¥ 27,570 ¥ 27,554¥ (16)
Derivatives (*2)
¥ 251
¥ 251

March 31, 2015
Cash and cash equivalents
Receivables:
Trade notes
Trade accounts
Associated companies
Allowance for doubtful
accounts (*1)
Receivables - net
Investments in lease
Investment securities Available-for-salesecurities
Total
Payables:Trade notes
Trade accounts
Associated companies
Lease obligations
Income taxes payable
Total
Derivatives (*2)

March 31, 2016
Cash and cash equivalents
Receivables:
Trade notes
Trade accounts
Associated companies
Allowance for doubtful
accounts (*1)
Receivables - net
Investments in lease
Investment securities Available-for-salesecurities
Total
Payables:Trade notes
Trade accounts
Associated companies
Lease obligations
Income taxes payable
Total
Derivatives (*2)

Millions of Yen
Carrying
Unrealized
Fair Value
AmountGain/Loss¥ 50,220 ¥ 50,220
2,802
50,069171(576)
52,466
5,413

52,464
5,365

3,595

3,595

¥ (2)
(48)

¥ 111,694 ¥ 111,644¥ (50)¥ 1,470 ¥ 1,470
14,34014,340
166
166
250
265
9,639
9,639
¥ 25,865 ¥ 25,880¥ (51)¥ (51)¥ 15¥ 15

Thousands of U.S. Dollars
Carrying
Unrealized
Fair Value
AmountGain/Loss$ 499,841 $ 499,841
23,168466,425
1,991(5,212)486,372
75,540486,381
74,85828,88528,885$9(682)$ 1,090,638 $ 1,089,965$ (673)$ 15,442
159,168
1,221
7,814
60,336$ 243,981$ 2,221$ (141)$ 15,442
159,168
1,221
7,673
60,336$ 243,840$ 2,221$(141)

Notes: *1. Allowance for doubtful accounts associated with trade accounts
receivable is deducted.
*2. Derivative assets and liabilities are on a net basis.

AssetsCash and Cash Equivalents
The carrying values are adopted for cash and cash equivalents as they
approximate fair value because of their short maturities.
Receivables
The carrying values are adopted for short-term receivables as they
approximate fair value.
The fair values of long-term receivables, such as installment receivables, are measured at the present values discounted by risk-free rates
and the future cash ﬂows including credit risks.

Sysmex Report 2016 90

 Financial and Other Information

Investments in Lease
The fair values of investments in lease are measured at the present
values discounted by the interest rate after consideration of theremaining terms and credit risks.
Investment Securities
The fair values of equity securities are determined by securities exchange prices. Please see Note 3, “SHORT-TERM INVESTMENTS ANDINVESTMENT SECURITIES,” for securities categorized by purposes.

Liabilities
Payables and Income Taxes Payable
The carrying values are adopted for payables and income taxes payable
as they approximate fair value because of their short maturities.
Lease Obligations
The fair values of lease obligations are measured at the present valuesof total principal discounted by the interest rate which would be used if
a new lease transaction occurred.

Derivatives
Fair value information for derivatives is included in Note 12, “DERIVATIVES.”(b) Carrying amount of ﬁnancial instruments whose fair value cannot
be reliably determined
Thousands ofMillions of Yen
U.S. Dollars
Investments in equity
instruments that do nothave a quoted market
price in an active market

2016

2015

2016

¥ 3,490¥ 3,580$ 30,885

The above ﬁnancial instruments are not included in investment
securities because they do not have market values and it is diﬃcult
to estimate the future cash ﬂows.
(5) Maturity Analysis for Financial Assets
Millions of Yen
Due after Due after
Due inOne Year Five Years Due after
One YearMarch 31, 2016
through through Ten Yearsor Less
Five Years Ten Years
Cash and cash equivalents ¥ 56,482
Receivables:
Trade notes
2,618
Trade accounts
52,435 ¥ 271
Associated companies
225
Investments in lease
2,459
5,635
¥ 442
Total
¥ 442
¥ 114,219 ¥ 5,906

Millions of Yen
Due after Due after
Due inOne Year Five Years Due after
One YearMarch 31, 2015
through through Ten Yearsor Less
Five Years Ten Years
Cash and cash equivalents ¥ 50,220
Receivables:
Trade notes
2,802
Trade accounts
49,105¥ 964
Associated companies
171
Investments in lease
1,798
3,522
¥ 93
Total
¥ 93
¥ 104,096¥ 4,486

91 Sysmex Report 2016

Thousands of U.S. Dollars
Due after Due after
Due inOne Year Five Years Due after
One YearMarch 31, 2016
through through Ten Yearsor Less
Five Years Ten Years
Cash and cash equivalents $ 499,841
Receivables:
Trade notes
23,168Trade accounts
464,027 $ 2,398
Associated companies
1,991
Investments in lease
21,76149,867$ 3,912
Total$ 3,912$ 1,010,788 $ 52,265

Derivative Transactions to Which Hedge Accounting is Applied

March 31, 2016
Foreign currency
forward contractsSelling U.S. dollars

March 31, 201512. DERIVATIVESThe Group enters into foreign currency forward contracts and foreign
currency option contracts to hedge foreign exchange risk associated withcertain assets and liabilities denominated in foreign currencies.
All derivative transactions are entered into to hedge interest andforeign currency exposures incorporated within the Group’s business.
Accordingly, market risk in these derivatives is basically oﬀset by opposite
movements in the value of hedged assets or liabilities. The Group does nothold or issue derivatives for trading purposes.
Because the counterparties to these derivatives are limited to majorinternational ﬁnancial institutions, the Group does not anticipate any
losses arising from credit risk.
Derivative transactions entered into by the Group have been madein accordance with internal policies which regulate the authorization andcredit limit amount.

Derivative Transactions to Which Hedge Accounting is Not Applied

March 31, 2016
Foreign currency
forward contracts:
Selling U.S. dollars
Selling Euros

March 31, 2015
Foreign currency
forward contractsSelling U.S. dollars

March 31, 2016
Foreign currency
forward contracts:
Selling U.S. dollars
Selling Euros

Millions of Yen
Contract
Contract Amount
Unrealized
Fair Value
Amount Due after
Gain/LossOne Year¥ 7,730
192

¥ 247
0

¥ 247
0

Millions of Yen
Contract
Contract Amount
Unrealized
Fair Value
Amount Due after
Gain/LossOne Year¥ 5,111¥ (52)

Foreign currency
forward contractsSelling U.S. dollars

March 31, 2016
Foreign currency
forward contractsSelling U.S. dollars

Millions of Yen
Contract
Hedged Contract AmountItem
Amount Due after
One Year

Receivables¥ 1,521

Millions of Yen
Contract
Hedged Contract AmountItem
Amount Due after
One Year

Receivables¥ 721

13. OTHER COMPREHENSIVE INCOME (LOSS)

Fair
Value

¥4

Fair
Value

¥1

Thousands of U.S. Dollars
Contract
Fair
Hedged Contract AmountItem
Amount Due after ValueOne Year

Receivables $ 13,460$ 35

The fair value of derivative transactions is measured at the quoted priceobtained from the ﬁnancial institution.
The contract amounts of derivatives which are shown in the abovetable do not represent the amounts exchanged by the parties and do notmeasure the Group’s exposure to credit or market risk.

The components of other comprehensive income (loss) for the years ended
March 31, 2016 and 2015, were as follows:
Thousands ofMillions of Yen
U.S. Dollars
Unrealized gain (loss) on
available-for-sale securities:
Gains (losses) arisingduring the year
Reclassification adjustments
to profit or loss
Amount before income
tax effect
Income tax effect
Total
Deferred gain on derivatives
under hedge accounting:
Gains (losses) arisingduring the year
Reclassification adjustments
to profit or loss
Amount before income
tax effect
Income tax effectTotal
Foreign currency translation
adjustments:
Adjustments arising during
the year
Total
Defined retirement
benefit plans:
Adjustments arising during
the year
Reclassification adjustments
to profit or loss
Amount before income
tax effect
Income tax effectTotal
Total other comprehensive
income (loss)

2016

2015

2016

¥ (331)¥ 255$ (2,929)

(0)
(331)

255

(2,929)134¥ (197)

(22)
¥ 233

1,186
$ (1,743)

¥

¥

¥

61

(67)

$540

(59)

68

(522)

2

1

18

(0)
2

¥

(0)
1

$

(0)
18

¥ (6,999)¥ 1,775$ (61,938)¥ (6,999)¥ 1,775$ (61,938)¥ (1,063)¥ 1,119$ (9,407)

(799)

(347)

(7,071)(1,862)772(16,478)606¥ (1,256)

(208)
¥ 564

5,363
$ (11,115)¥ (8,450)¥ 2,573$ (74,778)¥ (52)

Thousands of U.S. Dollars
Contract
Contract Amount
Unrealized
Fair Value
Amount Due after
Gain/LossOne Year$ 68,407
1,699$ 2,1860$ 2,1860Sysmex Report 2016 92

 Financial and Other Information

14. NET INCOME PER SHARE

17. SEGMENT INFORMATION

Reconciliation of the diﬀerences between basic and diluted net income pershare (“EPS”) for the years ended March 31, 2016 and 2015, is as follows:
Millions Thousands
U.S.
Yenof Yen of Shares
Dollars
Net Income
Attributable Weightedto Owners Average
EPSof theSharesParent
For the year ended March 31, 2016:
Basic EPS
Net income attributable$ 1.54to common shareholders ¥ 36,233 207,735 ¥ 174.42
Effect of dilutive securities
Stock options
856
Diluted EPS
Net income for¥ 36,233 208,591 ¥ 173.71$ 1.54computation

Under ASBJ Statement No. 17, “Accounting Standard for Segment
Information Disclosures” and ASBJ Guidance No. 20, “Guidance on
Accounting Standard for Segment Information Disclosures,” an entity isrequired to report ﬁnancial and descriptive information about its reportablesegments. Reportable segments are operating segments or aggregationsof operating segments that meet speciﬁed criteria. Operating segments
are components of an entity about which separate ﬁnancial information isavailable and such information is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance. Generally, segment information is required to be reported on
the same basis as is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments.
1. Description of reportable segments
The Group’s reportable segments are those for which separate ﬁnancial
information is available and regular evaluation by the Company’s
management is being performed in order to decide how resources
are allocated among the Group. The Group mainly produces and sells
diagnostic instruments and reagents. The Company plans comprehensive strategies within Japan and conducts business activities there, andthe four regional headquarters located in America, EMEA, China andAsia-Paciﬁc plan comprehensive strategies for each region and conductbusiness activities in those regions.
Therefore, the Group consists of the geographical segments based on
production and sales structures, which are “Japan,” “Americas,” “EMEA,”“China” and “Asia-Paciﬁc.”

For the year ended March 31, 2015:
Basic EPS
Net income attributable
to common shareholders ¥ 26,638 207,311 ¥ 128.49
Effect of dilutive securities
Stock options
765
Diluted EPS
Net income for¥ 26,638 208,076 ¥ 128.02
computation

15. RELATED PARTY DISCLOSURES
Transactions of the Company with related parties for the years ended
March 31, 2016 and 2015, were as follows:
Thousands ofMillions of Yen
U.S. Dollars
2016
Officers of the Company Exercise of stock options
Significant officers of theCompany’s subsidiaries Exercise of stock options

2015

2016

¥ 217

¥ 23

$ 1,920

31

12

274

2. Methods of measurement for the amounts of sales, proﬁt (loss), assets
and other items for each reportable segment
The accounting policies of each reportable segment are consistent
with those disclosed in Note 2, “Summary of Signiﬁcant Accounting
Policies,” and the proﬁts of the reportable segments are their operating
incomes.
Intersegment sales or transfers are determined based on market
prices or costs of goods manufactured.

3. Information about sales, proﬁt (loss), assets and other items is as follows:

Sales:
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Investment of associates
accounted for using
the equity method
Increase in property,
plant and equipment andintangible assets

Sales:
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Investment of associates
accounted for using
the equity method
Increase in property,
plant and equipment andintangible assets

Japan

Americas

Millions of Yen
2016
Reportable Segment
EMEA
China
Asia-Pacific¥ 43,008
101,012¥ 144,020¥ 41,789
152,344¥ 56,481
867¥ 57,348¥ 2,083
35,667¥ 68,454
1,929¥ 70,383¥ 2,765
69,505¥ 65,144
6¥ 65,150¥ 5,563
37,413¥ 20,070
105¥ 20,175¥ 1,807
19,011¥ 253,157
103,919¥ 357,076¥ 54,007
313,940¥ (103,919)¥ (103,919)¥
2,955(46,302)¥ 253,157¥ 56,962
267,638

5,571

2,293

3,964

275

1,310

13,413(1,159)12,254

576

1,932

1,932

2,048

2,048

281

1,075

2,048

9,794

3,735

Sales:
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation
Amortization of goodwill
Investment of associates
accounted for using
the equity method
Increase in property,
plant and equipment andintangible assets

668

1,428

21,186

Millions of Yen
2015
Reportable Segment
EMEA
China
Asia-Pacific

Total

Reconciliations Consolidated¥ 253,157(1,215)

19,971

Reconciliations Consolidated

Japan

Americas¥ 43,400
79,537¥ 122,937¥ 31,163
130,888¥ 47,014300¥ 47,314¥ 2,40234,522¥ 63,257
1,173¥ 64,430¥ 5,199
69,094¥ 49,840
7¥ 49,847¥ 6,80235,611¥ 17,866
158¥ 18,024¥ 1,227
18,386¥ 221,377
81,175¥ 302,552¥ 46,793
288,501¥ (81,175)¥ (81,175)¥ (2,382)(40,517)¥ 221,377¥ 44,411
247,984

4,926

2,192

3,817

269

1,177

12,381(1,122)

11,259

574

1,696

1,696

1,932

1,932

280

842

1,932

8,901

1,702

16. SUBSEQUENT EVENTSAppropriations of Retained Earnings
The following appropriation of retained earnings at March 31, 2016, was approved at the shareholders’ meeting of the Company held on June 24, 2016:
Millions of Thousands of
Yen
U.S. Dollars
Year-end cash dividends, ¥28 ($0.25)¥ 5,821$ 51,513
per share

5,561

Total

5,803

233

1,900

Japan

Americas

Thousands of U.S. Dollars
2016
Reportable Segment
EMEA
China
Asia-Pacific$ 380,602
893,911$ 1,274,513$ 369,814
1,348,177$ 499,831
7,673$ 507,504$ 18,434
315,637$ 605,787
17,071$ 622,858$ 24,469
615,088$ 576,496
53$ 576,549$ 49,230
331,089

49,301

20,29235,080

2,433

2,488

9,513

33,05349,212

5,912

Total

$ 177,611 $ 2,240,327
929
919,637$ 178,540 $ 3,159,964$ 15,991 $ 477,938
168,239 2,778,230(1,176)

17,363

Reconciliations Consolidated$ 2,240,327$ (919,637)$ (919,637) $ 2,240,327$ 26,150 $ 504,088(409,752) 2,368,478

11,593

118,699

5,097

17,09817,09818,124

18,124

18,124

86,673

18,539¥ 221,377

12,637

187,487(10,257)(10,752)

108,442

176,735

Note: Reconciliations principally consist of intersegment transfers and unallocated corporate assets at ¥4,194 million ($37,115 thousand) and ¥4,729 million for 2016 and 2015,
respectively. The unallocated corporate assets are primarily composed of funds such as marketable equity securities.

93 Sysmex Report 2016

Sysmex Report 2016 94

 Financial and Other Information

4. Information about products and services

Instruments
Sales to external customers¥ 85,873

Instruments
Sales to external customers¥ 71,461

Independent Auditor’s Report

Millions of Yen
2016
Maintenance
Reagents
Services¥ 115,296¥ 24,565

Millions of Yen
2015
Maintenance
Reagents
Services¥ 105,378¥ 21,804

OthersTotal¥ 27,423¥ 253,157

OthersTotal¥ 22,734¥ 221,377

Thousands of U.S. Dollars
2016
MaintenanceInstruments Reagents
Others
Total
Services$ 759,938 $ 1,020,319$ 217,389$ 242,681 $ 2,240,327

Sales to external customers

5. Information about geographical areas(1) Sales
Millions of Yen
2016
Japan
America
China
Other¥ 39,846¥ 50,592¥ 65,189¥ 97,530(2) Property, plant and equipment
Millions of Yen
2016
Japan
Other
Total
¥ 38,555¥ 22,680¥ 61,235

Total¥ 253,157

Japan¥ 40,554

Millions of Yen
2015
AmericaChina
Other¥ 45,855¥ 49,849¥ 85,119Japan$ 352,619

Thousands of U.S. Dollars
2016
America
China
Other
Total
$ 447,717 $ 576,894 $ 863,097 $ 2,240,327

Millions of Yen
2015
Japan
Other
¥ 37,550¥ 21,512

Total¥ 221,377

Total¥ 59,062

Thousands of U.S. Dollars
2016
Japan
Other
Total
$ 341,195 $ 200,708 $ 541,903

Note: Sales are classiﬁed by country or region based on the location of customers.

6. Information about major customers
There are no customers who account for more than 10% of the consolidated sales.
7. Information on the balance of goodwill of reportable segments
Millions of Yen
2016
Japan

Americas

Goodwill at March 31, 2016

EMEA

China

Asia-Pacific¥ 7,995

Eliminations/
Corporate¥ 1,091

Total¥ 9,086

Millions of Yen
2015
Japan
Goodwill at March 31, 2015

Americas

¥ 281

EMEA

China

Asia-Pacific¥ 10,029

Eliminations/
Corporate¥ 1,804

Total¥ 12,114

Thousands of U.S. Dollars
2016
Japan
Goodwill at March 31, 2016

95 Sysmex Report 2016

Americas

EMEA$ 70,752

China

Asia-Pacific$ 9,655

Eliminations/
Corporate

Total$ 80,407

Sysmex Report 2016 96

 Financial and Other Information

Stock Information (As of March 31, 2016)

Stock Price Range

Corporate Overview (As of March 31, 2016)

Principal Shareholders (Top 10)

Sysmex Corporation(Calculated as the closing price on March 31, 2006 = 100)

600

Number of Percentage ofshares held shareholding(Thousands)(%)

Shareholders

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

Japan Trustee Services Bank, Ltd.
JPMorgan Chase Bank 380055
The Kobe Yamabuki Foundation
Nakatani Foundation for Advancementof Measuring Technologies inBiomedical Engineering
Nakatani Kosan, Ltd.
The Master Trust Bank of Japan, Ltd.
Kazuko Ietsugu
Taeko Wada
Kenji Itani
Ryoshin Co.

500

400

300

200

100

23,105
12,371
12,000

11.1
5.9
5.8

11,8305.7

10,297
8,080
6,124
6,124
5,000
4,800

4.9
3.9
2.9
2.9
2.4
2.3

03/06 03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16

Cash Dividends per Share and Dividend Ratio (Consolidated)
60

Composition of Shareholders(%)

Individuals and others
19.51%

Financial institutions
20.44%

45

Financial instrument ﬁrms
0.56%

30

Other Japanesecompanies
19.98%
Foreign investors
39.51%

15

75

38

50

27
9

12

12.5

20.0 26.8
0

100

52

Cash dividends per share (Figures adjusted for stock split)
Dividend payout ratio

31.9

14
29.4

20

17

15
27.0

29.1

29.8
29.1

27.1

29.6

25
0

03/07 03/08 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16

Note: Two-for-one stock split conducted on April 2011 and 2014.

Dividend Policy
Distribution of Shares by Number of Shares Held
Less than 1,000 shares 1.33%
Number of shares: 2,766,815(11,700 shareholders)More than 1,000 shares 1.71%
Number of shares: 3,568,322(1,842 shareholders)Sysmex aims to maintain a proper balance between aggressive
investment, which is designed to sustain steady high growth,

Head Office

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

Inquiries

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

WebsitePlease see our website for more detailed and the most recent information.
Websitehttp://www.sysmex.co.jp/en/
IR information
http://www.sysmex.co.jp/en/ir/
Sustainability information
http://www.sysmex.co.jp/en/csr/

Number of Employees

7,446 (consolidated basis)

Fiscal Year

April 1—March 31

Shareholders’ Meeting

In JuneNumber of Shares Authorized

598,688,000 shares

Number of Shares Issued

208,332,432 shares

Paid-in Capital¥11,016 million

Stock Listings

Tokyo Stock Exchange, First Section

Ticker Code

6869

Transfer Agent

Mitsubishi UFJ Trust and Banking Corporation

Independent Auditor

Deloitte Touche Tohmatsu LLC

RatingA+ (Rating and Investment Information, Inc. (R&I))

Major Indexes

DSI (Daiwa Stock Indices)
Dow Jones Sustainability Asia Pacific Index
Ethibel Pioneer & Excellence
FTSE4Good Index
JPX-Nikkei Index 400
MSCI Standard Index
MSCI Global Sustainability Indexes
Russell/Nomura Japan Equity Indexes
S&P Japan 500

and returns to our shareholders as our earning power increases.
In terms of returns to shareholders, we intend to provide a sta-

More than 5,000 shares 1.13%

ble dividend on a continuous basis and aim for a consolidated

Number of shares: 2,352,053(331 shareholders)payout ratio of 30% under our basic policy of sharing the suc-More than
10,000 shares 5.71%

February 20, 1968

(including part-time employees and others)

0

(Yen)

Establishedcesses of our operations in line with business performance.

Number of shares: 11,895,035(409 shareholders)More than
500,000 shares 78.64%

More than
100,000 shares 11.48%

Number of shares: 163,837,385(78 shareholders)Number of shares: 23,912,822(112 shareholders)

97 Sysmex Report 2016

Sysmex Report 2016 98