(公益財団法人)財務会計基準機構会員

NEWS RELEASE
Name of the listed company:

May 14, 2019NIPPON SHINYAKU CO., LTD.

Representative:Shigenobu Maekawa,President and Representative Director

Code No.:4516, Listing stock exchange: Tokyo

Contact:

Takanori Edamitsu,
Director, Member of the Board, Business
Management
Tel. +81-75-321-9107

6th Five-Year Medium-term Management Plan “Aiming for Sustainable Growth –Pursuit of Further
Originality–”
Nippon Shinyaku Co., Ltd. (Headquarters: Kyoto, Japan; President: Shigenobu Maekawa) announced
the outline of the 6th five-year Medium-term Management Plan “Aiming for Sustainable Growth –Pursuit of Further Originality–” (fiscal 2019 to fiscal 2023) which it started in April, 2019.
Amid increasing uncertainty in the significantly changing business environment, Nippon Shinyaku
has been striving to be a “company with a meaningful existence in healthcare.” In the 5th five-year
Medium-term Management Plan “Aiming for New Growth –Pursuit of Originality–” started in fiscal
2014, we aimed to establish management base for new growth, clearly differentiated us from othercompanies, and pursued originality.
In the pharmaceutical business, although we were affected by the measures to promote the greater use
of generics and the drastic reform of the National Health Insurance drug price system, royalty revenue
from overseas sales of our original product Uptravi grew more than we had expected and reinforcementof our sales organization in response to changes in the domestic pharmaceutical business environment
contributed to the growth. Consequently, both sales and operating income exceeded the plan. In addition,by promoting stable revenue management, we made growth investments ahead of schedule to enhance
our R&D pipeline. In the functional food business, although our sales were slightly lower than the plandue to fiercer competition among companies, we evolved into a highly profitable entity.
As a result, in fiscal 2018, the final year of the 5th Plan, we achieved all numerical goals (sales of 110
billion yen, operating income of 18 billion yen, and ROE of 10%) and set a record high for sales andincomes.

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In the 6th five-year Medium-term Management Plan started in fiscal 2019, which marks our 100thanniversary, to enhance our presence in the world, we will further develop our management base which
we have established in the 5th Plan into a stronger one to support sustainable growth. For this purpose,
we position the 6th Plan as a scenario to pursue further originality. All employees push forward
vigorously toward the realization of our vision by going beyond individual limits and boldly taking “sixactions” without being stuck with old ways of working or thinking.
Please see the accompanying sheet for the outline of the 6th five-year Medium-term Management Plan
“Aiming for Sustainable Growth –Pursuit of Further Originality–.”2(Accompanying sheet)
Outline of the 6th Five-Year Medium-term Management Plan
“Aiming for Sustainable Growth –Pursuit of Further Originality–”
1. Nippon Shinyaku’s corporate vision
Due to the drastic reform of medical systems for the enhanced containment of medical expenses,
progress of technological innovation and industry reorganization, uncertainty in management will
increase because of the unprecedented change in the environment around us in the future. In thepharmaceutical business, we will provide more patients suffering from diseases in the world with highquality and unique products mainly targeting the diseases with unmet medical needs in our four areas offocus (urology, hematology, intractable/orphan diseases and gynecology). In the functional food business,utilizing the high technical capabilities as a pharmaceutical company, we will provide highly value-added
products to meet the market needs in our four areas of focus (health food ingredients, preservatives,protein preparations and supplements).
By implementing the above measures, we aim to grow sustainably and be globally acclaimed as a“company with a meaningful existence in healthcare.”
2. “Six actions” for sustainable growth and realization of the vision
In the 6th five-year Medium-term Management Plan, we will take following “six actions” to strengthen
the basis for sustainable growth and realize the vision based on the management base which we haveestablished before.
(1) Creation of new value through R&D
To continue to provide patients with high-quality and unique products, we will further enhance ourR&D capability which we have cultivated before and actively work on new modalities in drug discovery
such as nucleic acid medicine and gene therapy.
In the pharmaceutical business, centering on our four areas of focus (urology, hematology,intractable/orphan diseases and gynecology), we will utilize internal and external management
resources. Through in-house research with an eye on new modalities, in-licensing and product life cycle
management (PLCM), we will enhance our R&D pipeline and continuously provide new products.
In the functional food business, to provide high-quality and unique functional food ingredients which
we can produce as a pharmaceutical company, we will utilize internal and external management
resources and continuously provide highly value-added products to meet the market needs.
(2) Development of global business
To provide unique products all over the world, we will build an organizational structure suitable to the3

development of global business in all phases from R&D, manufacture, distribution and sales, and further
accelerate the expansion of our global business which we have established through to the end of the 5thPlan.
(3) Increase in corporate value by strengthening ESG management
We will increase our corporate value and coexist with society by strengthening ESG (Environment,Society and Governance) management through business activities such as creating treatments fordiseases without cures and delivering them to patients, and delivering necessary supplements of highvalue to customers.
(4) Creation of organizational climate in which each employee can be active
From the perspective that “unique products come from unique human resources,” we respect ouremployees’ diversity regardless of their gender, nationality or cultural background, provide opportunities
for them to proactively take on challenges and grow, and create an organizational climate in which all
employees can enhance their presence and be active.
(5) Active use of AI and adoption of IT
To continuously create value, we will accelerate the launch of new products, streamline operations andincrease productivity by actively using AI, RPA and other technologies, and promoting adoption of IT.
(6) Further strengthening of management baseTo achieve sustainable growth under the circumstances where it is difficult to predict changes due tohigh uncertainty in business environment, we will increase profitability of our business, promote costmanagement, effectively utilize management resources, and rebuild the management system andmechanism.
We will realize our vision and aim to continuously increase corporate value by taking these actions for sure.

43. Numerical targets(Million yen)(Consolidated)

FY 2018 results

FY 2023 plan

CAGR*1

Net sales

114,700

150,000

5.5%

Pharmaceuticals

100,200

133,000

5.8%

Functional food

14,40017,000

3.4%

Operating income

20,60040,00014.2%

16,30030,00013.0%

242 yen

445 yen

13.0%

Net income attributableto owners of the parent
EPS*2

ROE*3

10% or more throughout the term of the 6th Plan

*1 CAGR: Compound Annual Growth Rate
*2 EPS: Earnings Per Share*3 ROE: Return On Equity
4. Return to shareholders
We will increase the consolidated payout ratio to around 35% and aim to raise annual cash dividends
per share by increasing EPS.
Forward-looking statements
Statements contained in this release concerning expectations and forecasts are based on various
assumptions, and not a guarantee of future implementation of numerical targets and plans.

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