Summary of Consolidated Financial Statements
for the Third Quarter of the Term Ending March 31, 2020(Japan GAAP)
February 7, 2020
Name of Listed Company: TSUMURA & CO.
Exchange: Tokyo Stock Exchange
Code:
4540
URL:
https://www.tsumura.co.jp
Representative:
President, Representative Director and CEO
Name: Terukazu Kato
Contact:
Head of Corporate Communications Dept.
Name: Yosuke Tsuchiya
Telephone: 81-3-6361-7100
Scheduled date of submission: February 10, 2020
Scheduled date of dividend payment commencement: Preparation of supplementary materials for the quarterly financial statements: Yes
Holding of the quarterly results briefing: Yes (for institutional investors and securities analysts)(Figures are rounded down to the nearest one million yen.)

1.

Consolidated business results for the third quarter of the term ending March 31, 2020
(From April 1, 2019 to December 31, 2019)(1) Financial results (year to date)(Figures in percentages denote the year-on-year change.)

Net sales
Nine-month period ended
December 31, 2019
Nine-month period ended
December 31, 2018

Operating profit

Profit attributable toowners of parent

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%

95,185

3.5

16,151

5.7

16,675

3.6

11,690(0.3)

92,0101.2

15,2801.0

16,094

2.6

11,731(4.6)(Note) Comprehensive income： Nine-month period ended December 31, 2019: 7,061 million yen［(30.8)%］
Nine-month period ended December 31, 2018:10,198 million yen［(32.7)%〕

Profit per share

Fully diluted profit per share

Nine-month period ended
December 31, 2019
Nine-month period ended
December 31, 2018

Yen

Yen

152.86－

153.44－(2) Consolidated financial conditions
Total assets

Shareholders’ equity ratio

Net assets

Million yen

Million yen%

286,183
287,322

208,460
206,141

71.4
70.2

As of December 31, 2019
As of March 31, 2019

(Reference) Shareholders’ equity: As of December 31, 2019: 204,222 million yen

2.

As of March 31, 2019: 201,816million yen

Dividends
Dividend per share
End of Q1

End of Q2

End of Q3

End of FY

Total

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2019

－

32.00

－

32.00

64.00

Year ending March 31, 2020

－

32.00

－
32.00

64.00

Year ending March 31, 2020
(Projection)(Note)Revisions to dividends projection published most recently: No

3.

Projections of consolidated business results for the term ending March 31, 2020
(From April 1, 2019 to March 31, 2020)(Figures in percentage show the rate of increase or decrease from the previous fiscal year for full-year)

Net sales
Million yen

Full-year

125,000

Operating profit% Million yen

3.4

17,000(Note)Revisions to dividends projection published most recently: No

Profit attributable toowners of parent

Ordinary profit% Million yen(8.2)

18,000% Million yen(8.6)

12,300

Profit per share%

Yen(15.7)

160.81

Notes(1) Important changes of subsidiaries during the term(change of specified subsidiaries that lead to a change in the scope of consolidation): No(2) Application of special accounting practices in consolidated quarterly financial statements preparation: Yes(Note) For details, see “2. Quarterly Consolidated Financial Statements and Key Notes (4) Notes to the Quarterly Consolidated
Financial Statements (application of specific accounting treatment to the preparation of quarterly financial statements)” on
page 10 of the material attached hereto.
(3) Changes in accounting principles and procedures and the method for indication, etc.
1) Changes associated with the revision of accounting principles, etc.: No
2) Change other than 1):
No3) Accounting estimate change:
No4) Retrospective restatement:No(4) Number of shares issued (common stock)1) Number of shares issued at the end of theterm(including treasury stock) (shares)

FY 3/2020 3Q

76,758,362

FY 3/201976,758,362

2) Number of treasury stock at the end of theterm(shares)

FY 3/2020 3Q

249,899

FY 3/2019

300,631

3) Average number of shares during the term
(shares)

FY 3/2020 3Q

76,483,089

FY 3/2019 3Q

76,457,945* This Summary of Quarterly Consolidated Financial Statements is exempt from quarterly review procedures.
* Explanation about the proper use of financial projections and other important notes(Note about forward-looking information)
In these materials, earnings forecasts and other statements about the future are forward-looking statements based on the information
currently available and certain assumptions that the company regards as reasonable. Accordingly, the Company cannot makepromises to achieve such forecasts. Actual financial results may differ materially from these forecasts depending on a number ofimportant factors. Please see “1.Qualitative information on quarterly results (3) Description of projections of consolidated businessresults” on page 3 for information regarding the forecast of consolidated financial results.

○Contents of accompanying materials
1.Qualitative information on quarterly results ···························································································

2(1) Description of operating results ··································································································

2(2) Description of financial condition ·······························································································

3(3) Description of projections of consolidated business results ···································································

3

2.Quarterly Consolidated Financial Statements and Key Notes ·······································································

4(1) Quarterly Consolidated Balance Sheets ·························································································

4(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income ····

6

Quarterly Consolidated Statements of Income
For the Third Quarter Consolidated Accumulative Term ·····································································

6

Quarterly Consolidated Statements of Comprehensive Income
For the Third Quarter Consolidated Accumulative Term ·····································································

7(3) Quarterly Consolidated Statements of Cash Flows ·············································································

8(4) Notes to the Quarterly Consolidated Financial Statements ····································································

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

10(Notes on case of extreme change in shareholder's equity amount) ··························································

10(Application of specific accounting treatment to the preparation of quarterly financial statements) ······················

101

1. Qualitative information on quarterly results(1) Description of operating results
In the third quarter under review, net sales rose 3.5% year on year, to 95,185 million yen.
Looking at profit, operating profit was 16,151 million yen (up 5.7% year on year), ordinary profit was 16,675 million yen (up 3.6%
year on year), and profit attributable to owners of parent was 11,690 million yen (down 0.3% year on year). The cost-to-sales ratiorose 0.4 percentage points year on year. In addition, the cost-to-SGA ratio fell 0.8 percentage point year on year. As a result, theoperating profit margin rose 0.4 percentage points year on year, to 17.0%.
[Consolidated business results](Unit: million yen)
FY 3/2019 3Q

FY 3/2020 3Q

Year-on-year change(ratio of change)

Net sales

92,01095,1853,175
3.5％

Operating profit

15,28016,151871
5.7％

Ordinary profit

16,094

16,675581
3.6％

Profit attributable to ownersof parent

11,731

11,690(41)(0.3)％Net sales of overall prescription Kampo products grew 3.3% year on year. To expand the Kampo market and establish a presence inthe market in a sustained manner, which are the strategic challenges adopted in the Medium-Term Management Plan, the Company
has positioned the geriatric field, the cancer domain (supportive care) and the gynecology field as three important domains. The
Company has been active in providing information on matters focused on five drug fostering program formulations*1 and fivegrowing formulations*2.
In the first three quarters under review, net sales of Daikenchuto, a drug fostering program formulation that is a staple item for theCompany, decreased 0.4% year on year. The Company will fully implement activities for providing information in the hospitals
market afresh. At the same time, the Company will step up activities for winning new markets by focusing on abdominal flatulence,
whose treatment shows a low level of satisfaction among constipation symptoms in the practitioner market.
Net sales grew solidly for Hangeshashinto, another drug fostering program formulation, and Bakumondoto and Goreisan, both ofwhich are growing formulations. In other formulations, net sales of Ninjin’yoeito increased favorably.
Demand for Kampo medicine is diversifying increasingly among health care professionals. The Company will continue its activities
for providing appropriate information on subjects, including evidence in basic and clinical medicine, clinical practice guidelines inwhich Kampo products are described, and the proper use of Kampo medicine based on Kampo diagnosis, positioning meetings with
doctors, presentations for medical institutions and Kampo medicine seminars as the basis of these operations.
*1 five “Drug fostering” program formulations:
Formulations the Company is addressing by looking hard at the structure of diseases in recent years, targeting diseases that are
difficult to treat with new drugs for which prescription Kampo preparations prove specifically effective in domains where demand for
medical treatment is high, and calling the establishment of evidence “drug fostering”*2 five “Growing” formulations:
Growth drivers aimed at registration in clinical practice guidelines as strategic formulations after five drug fostering program
formulations by constructing evidence (such as data on safety and effectiveness) in domains where the degree of satisfaction withmedical treatment and the degree of drug contribution are low2(2) Description of financial condition
The financial position at the end of the first three quarters under review was as follows:
Total assets at the end of the first three quarters under review decreased 1,139 million yen from the end of the previous fis cal year, to286,183 million yen. Inventories grew, but current assets declined 4,701 million yen from the end of the previous fiscal year, mainly
due to a decrease in cash and deposits. Investment securities decreased due to a fall in share prices, but non-current assets increased
3,562 million yen from the end of the previous fiscal year, chiefly attributable to a rise in investments and other assets.
Total liabilities were 77,723 million yen, a decrease of 3,457 million yen from the end of the previous fiscal year. Notes and accounts
payable – trade grew, but current liabilities shrank 2,732 million yen from the end of the previous fiscal year, mainly due to a decline
in other current liabilities. Non-current liabilities decreased 725 million yen from the end of the previous fiscal year.
Net assets totaled 208,460 million yen, an increase of 2,318 million yen from the end of the previous fiscal year. Shareholders’ equity
rose 6,947 million yen from the end of the previous fiscal year, mainly reflecting an increase in retained earnings. Accumulated othercomprehensive income dropped 4,541 million yen from the end of the previous fiscal year, chiefly attributable to a fall in foreign
currency translation adjustment. Non-controlling interests declined 87 million yen from the end of the previous fiscal year.
As a result, the equity ratio rose 1.2 percentage points, to 71.4%.
Cash flows in the first three quarters under review were as follows:
At the end of the first three quarters under review, cash provided by operating activities was 10,634 million yen, cash used in investing
activities was 5,598 million yen and cash used in financing activities was 4,985 million yen.
Cash provided by operating activities was 10,634 million yen. Looking at its breakdown, a major cash inflow item was profit before
income taxes of 16,543 million yen, while a major cash outflow item was a decrease (an increase) in inventories of 5,470 million yen.
Compared to the first three quarters of the previous fiscal year, cash inflow increased 8,363 million yen.
Cash used in investing activities was 5,598 million yen. Looking at its breakdown, a major cash outflow item was the purchase ofproperty, plant and equipment of 8,471 million yen. Compared to the first three quarters of the previous fiscal year, cash outflow
decreased 10,085 million yen.
Cash used in financing activities was 4,985 million yen. Looking at its breakdown, a major cash outflow item was dividends paid of
4,889 million yen. Compared to the first three quarters of the previous fiscal year, cash outflow dropped 13,522 million yen.
As a result, cash and cash equivalents decreased 718 million yen from the end of the previous fiscal year, to 55,525 million yen.
(3)Description of projections of consolidated business results
The projections of consolidated business results for the fiscal year ending March 31, 2020, which were published on May 9, 2019,
remain unchanged.

3

2. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheets(Unit:Million yen)
As of March 31, 2019
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Other
Accumulated depreciation
Total property, plant and equipment

As of December 31, 201972,24044,524
9,382
11,12531,29921,459(4)

61,20147,7737,361
12,46736,66019,865(4)

190,027

185,32564,80085,673(76,769)

64,802
88,625(80,303)73,70373,125Intangible assets
Investment and other assets
Investment securities
Retirement benefit asset
Other
Allowance for doubtful accounts

872

1,244

15,642
1,934
5,143
(0)

12,614
2,289
11,584(0)Total investment and other assets

22,71926,48897,295

100,857

287,322

286,183

Total non-current assets
Total assets

4

(Unit:Million yen)
As of March 31, 2019
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Income taxes payable
Provision for sales returns
Other

As of December 31, 2019

6,267
10,314
2,101
10
14,626

6,820
10,3142,031
12
11,410Total current liabilities

33,32030,588Non-current liabilities
Bonds payable
Long-term borrowings
Retirement benefit liability
Other

30,000
9,376
74
8,410

30,000
9,376
74
7,684

Total non-current liabilities

47,86147,135

Total liabilities

81,181

77,723

Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares

30,142
14,027
149,740(815)

30,142
14,041
156,536(677)

Total shareholders’ equity

193,095

200,042

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans

5,697
740
2,673
(313)
(76)

3,884
79
2,673
(2,345)(111)

Total accumulated other comprehensive income

8,721

4,179

4,324

4,237

206,141

208,460

287,322

286,183

Non-controlling interests
Total net assets
Total liabilities and net assets5(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income / For the Third Quarter Consolidated Accumulative Term
(Unit:Million yen)
Nine-month period ended
December 31, 2018
(From April 1, 2018
to December 31, 2018)

Nine-month period ended
December 31, 2019
(From April 1, 2019
to December 31, 2019)

Net sales
Cost of sales

92,01037,403

95,185
39,151Gross profit

54,60656,034

Selling, general and administrative expenses

39,32639,882

Operating profit

15,28016,151

315
231

438
253

75

106

Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains

158

－

Other
Total non-operating income
Non-operating expenses
Interest expenses

214
995

236
1,034

126

100

Foreign exchange losses

－

270

55
181
16,094138
510
16,675

1
324

2
332

325

335

0
53

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

－

1
27
19

Loss on valuation of investments in capital of subsidiaries
and associates－

419

Total extraordinary losses

53

467

Profit before income taxes

16,365

16,543

Income taxes

4,337

4,694

Profit12,028

11,849296

158

11,731

11,690

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

6

Quarterly Consolidated Statements of Comprehensive Income / For the Third Quarter Consolidated Accumulative Term
(Unit:Million yen)
Nine-month period ended
December 31, 2018
(From April 1, 2018
to December 31, 2018)
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans,net of tax
Share of other comprehensive income (loss) of entities
accounted for using equity method
Total other comprehensive income (loss)

Nine-month period ended
December 31, 2019
(From April 1, 2019
to December 31, 2019)12,028

11,849169(134)(1,880)49(1,813)(661)(2,256)
(34)

(34)

(21)

(1,830)(4,787)

Comprehensive income

10,198

7,061

Comprehensive income attributable to
Owners of parent
Non-controlling interests

10,059
138

7,149
(87)

7

(3) Quarterly Consolidated Statements of Cash Flows(Unit:Million yen)
Nine-month period ended
December 31, 2018
(From April 1, 2018
to December 31, 2018)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Share of loss(profit) of entities accounted for using equity
methodLoss (gain) on sales and retirement of property, plant andequipment
Loss on valuation of investments in capital of subsidiaries
and associates
Decrease (increase) trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Loss (gain) on sales of short-term and long-term investment
securities
Decrease (increase) in retirement benefit asset
Increase (decrease) in retirement benefit liability
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of short-term and long-term investment securities
Proceeds from sales and redemption of short-term and longterm investment securities
Purchase of investments in capital of subsidiaries
Loan advances
Collection of loans receivable
Other
Net cash provided by (used in) investing activities

8

Nine-month period ended
December 31, 2019
(From April 1, 2019
to December 31, 2019)16,365
4,743
0
(547)
126

16,543
4,808
0
(692)
100

(75)

(106)

52

25

－

419

(2,723)(924)
220(3,283)(5,470)
716

(324)

(313)

(289)
7
(8,824)
7,809
500
(149)
(5,888)

(416)
11
1,446
13,792
1,045(121)(4,081)

2,271

10,634(4,465)(7,211)
1(318)(11,502)

9,984(8,471)
4(469)(27,370)

8,822

28,081

(952)
(1)
3
(59)
(15,683)(4,273)(3,000)2(85)(5,598)

(Unit:Million yen)
Nine-month period ended
December 31, 2018
(From April 1, 2018
to December 31, 2018)

Nine-month period ended
December 31, 2019
(From April 1, 2019
to December 31, 2019)

Cash flows from financing activities
Repayments of long-term borrowings
Proceeds from share issuance to non-controllingshareholders
Dividends paid
Dividends paid to non-controlling interests
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

9(15,000)

－

1,468

－

(4,887)(54)(34)(18,508)(813)(32,734)
78,31345,579(4,889)(56)(39)(4,985)(768)(718)
56,24355,525

(4) Notes to the Quaterly Consolidated Financial Statements(Notes on premise of a going concern)
No relevant items.
(Notes on case of extreme change in shareholder's equity amount)
No relevant items.
(Application of specific accounting treatment to the preparation of quarterly financial statements)(Deferment of cost variance)
Cost variance caused by seasonal changes in operation rates, etc. is expected to be eliminated for the most part by the end of the costaccounting period, which is, therefore, deferred as “current assets (other) or current liabilities (other).”10