Summary of Consolidated Financial Statements
for the First Quarter of the Term Ending March 31, 2020(Japan GAAP)
August 2, 2019
Exchange: Tokyo Stock Exchange
URL:
https://www.tsumura.co.jp
Name: Terukazu Kato
Name: Yosuke Tsuchiya

Name of Listed Company: TSUMURA & CO.
Code:
4540
Representative:
President,Representative Director and CEO
Contact:
Head of Corporate Communications Dept.
Telephone: 81-3-6361-7100
Scheduled date of submission: August 5, 2019
Scheduled date of dividend payment commencement: Preparation of supplementary materials for the quarterly financial statements: Yes
Holding of the quarterly results briefing: No(Figures are rounded down to the nearest one million yen.)

1.

Consolidated business results for the first quarter of the term ending March 31, 2020
(From April 1, 2019 to June 30, 2019)(1) Financial results (year to date)(Figures in percentages denote the year-on-year change.)

Net sales
Three-month period
ended June 30, 2019
Three-month period
ended June 30, 2018

Operating profit

Profit attributable toowners of parent

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%

30,699

3.1

5,230

14.7

5,401

9.8

3,903

11.0

29,776

2.4

4,559

2.6

4,917

7.4

3,516

10.1

(Note) Comprehensive income： Three-month period ended June 30, 2019: 2,792 million yen［(21.9)%］
Three-month period ended June 30, 2018: 3,573 million yen［7.9%〕

Profit per share

Fully diluted profit per share

Three-month period
ended June 30, 2019
Three-month period
ended June 30, 2018

Yen

Yen

51.05

－

46.00

－

(2) Consolidated financial conditions
Total assets

Million yen%

288,459
287,322

206,486
206,14170.0
70.2

As of June 30, 2019
As of March 31, 2019

(Reference) Shareholders’ equity: As of June 30, 2019: 202,019 million yen

2.

Shareholders’ equity ratio

Net assets

Million yen

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

64.00

Year ending March 31, 2020
(Projection)

32.00(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)
and from the second quarter of the previous fiscal year for second quarter (aggregate).)Net sales
Million yen

Operating profit% Million yen

Profit attributable toowners of parent

Ordinary profit% Million yen% Million yen

Second quarter(aggregate)

61,500

5.5

8,100

(9.5)

8,700

(9.1)

Full-year

125,000

3.4

17,000(8.2)

18,000(8.6)

Profit per share

%

Yen

6,000

(15.3)

78.46

12,300(15.7)

160.81(Note)Revisions to dividends projection published most recently: No
Tsumura & Co. (the “Company”) resolved to dispose of treasury shares used for performance-based compensation at a Board of Directors meeting heldon July 26, 2019. Profit per share stated in the above projections of consolidated business results is calculated by taking the effects of their disposal into
consideration.

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(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 1Q

76,758,362

FY 3/201976,758,362

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

FY 3/2020 1Q

300,681

FY 3/2019

300,631

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

FY 3/2020 1Q

76,457,719

FY 3/2019 1Q

76,457,980* 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 2 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 ·······························································································

2(3) Description of projections of consolidated business results ···································································

2

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

3(1) Quarterly Consolidated Balance Sheets ·························································································

3(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income ····

5

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

5

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

6(3) Quarterly Consolidated Statements of Cash Flows ·············································································

7(4) Notes to the Quarterly Consolidated Financial Statements ····································································

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

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

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

91

1. Qualitative information on quarterly results(1) Description of operating results
In the first quarter under review, net sales rose 3.1% year on year, to 30,699 million yen.
Looking at profit, operating profit was 5,230 million yen (up 14.7% year on year), ordinary profit was 5,401 million yen (up 9.8% year
on year), and profit attributable to owners of parent was 3,903 million yen (up 11.0% year on year). The cost-to-sales ratio fell 1.2
percentage points year on year, due mainly to reduced costs related to crude drugs. In addition, the cost-to-SGA ratio fell 0.5
percentage point year on year. As a result, the operating profit margin rose 1.7 percentage points year on year, to 17.0%.
[Consolidated business results](Unit: million yen)
FY 3/2019 1Q

Year-on-year change

FY 3/2020 1Q(ratio of change)

Net sales

29,77630,699923
3.1 (%)

Operating profit

4,559

5,230

671
14.7 (%)

Ordinary profit

4,917

5,401

483
9.8 (%)

Profit attributable to ownersof parent

3,516

3,903

386
11.0 (%)

Net sales of overall prescription Kampo products grew 3.3% year on year. To expand the Kampo market and establish its presence
there in a sustained manner,which is a strategic challenge adopted in the Medium-Term Management Plan, the Company has
positioned geriatric health, cancer (supportive care) and women’s health as three important domains. The Company has been active inproviding information on matters focused on five “Drug fostering” program formulations*1 and five “Growing” formulations*2.
In the first quarter under review, net sales for Daikenchuto, a “Drug fostering” program formulation that is a staple item for theCompany, decreased 1.5% year on year, primarily reflecting insufficient appeals made in the hospitals market. The Company ismaking renewed efforts to ensure full information provision in the hospitals market. At the same time, the Company is stepping up
activities for winning new markets, focusing on a sense of abdominal flatulence, the treatment of which is assumed to show a low
degree of satisfaction, among constipation symptoms.
Net sales grew solidly for Rikkunshito, another “Drug fostering” program formulation, and Bakumondoto and Goreisan, both of whichare “growing” formulations. In other formulations, net sales increased favorably for Ninjin’yoeito.
Demand for Kampo medicine is increasingly diversifying 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 prescriptions for different ailments, positioning meetings
with doctors, presentations for medical institutions and Kampo medicine seminars as the basis for those 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 low(2)Description of financial condition
The financial position at the end of the first quarter under review was as follows:
Total assets increased 1,136 million yen from the end of the previous fiscal year, to 288,459 million yen, due mainly to a growth ininventories.
Liabilities rose 791 million yen from the end of the previous fiscal year, to 81,972 million yen.
Net assets grew 345 million yen from the end of the previous fiscal year, to 206,486 million yen.
As a result, the equity ratio declined 0.2 percentage point, to 70.0%.
Cash flows in the first quarter under review were as follows:
Cash provided by operating activities was 4,895 million yen. Compared to the first quarter of the previous fiscal year, the cash inflow
decreased 290 million yen, owing primarily to a fall in inventories.
Cash provided by investing activities was 6,918 million yen. Compared to the first quarter of the previous fiscal year, the cash inflow
grew 5,815 million yen, mainly reflecting an increase in time deposits.
Cash used in financing activities was 2,356 million yen. Compared to the first quarter of the previous fiscal year, the cash outflow
decreased 14,995 million yen, chiefly attributable to a decline in the repayment of the current portion of long-term loans payable.
As a result, cash and cash equivalents at the end of the first quarter under review increased 9,898 million yen from the end of theprevious fiscal year, to 66,142 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.
2

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 June 30, 201972,24044,524
9,382
11,12531,29921,459(4)

72,26243,817
8,210
12,854
34,046
20,458(4)

190,027

191,644

64,80085,673(76,769)

65,20787,006(78,401)73,70373,811Intangible assets
Investment and other assets
Investment securities
Retirement benefit asset
Other
Allowance for doubtful accounts

872

1,027

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

14,190
2,053
5,730
(0)

Total investment and other assets

22,71921,97497,29596,814

287,322

288,459

Total non-current assets
Total assets3

(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 June 30, 2019

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

6,034
10,3142,182
6
17,164

Total current liabilities

33,32035,702

Non-current liabilities
Bonds payable
Long-term borrowings
Retirement benefit liability
Other

30,000
9,376
74
8,410

30,000
9,376
74
6,819

Total non-current liabilities

47,861

46,269Total liabilities

81,181

81,972

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

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

30,142
14,027
151,197(815)

Total shareholders’ equity

193,095

194,552

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)

4,678
(327)
2,673
531
(87)

Total accumulated other comprehensive income

8,721

7,467

4,324

4,467

206,141

206,486

287,322

288,459

Non-controlling interests
Total net assets
Total liabilities and net assets4(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income / For the First Quarter Consolidated Accumulative Term
(Unit:Million yen)Three-month period ended
June 30, 2018
(From April 1, 2018
to June 30, 2018)

Three-month period ended
June 30, 2019
(From April 1, 2019
to June 30, 2019)

Net sales
Cost of sales

29,776
12,421

30,69912,424Gross profit

17,354

18,275

Selling, general and administrative expenses

12,795

13,044

Operating profit

4,559

5,230

68
118

170
126

Foreign exchange gains

168

－

Other

104

48

Total non-operating income

459

346

48
43

26
29

Foreign exchange losses
Other

－
8

112
6

Total non-operating expenses

101

175

4,917

5,401

Gain on sales of non-current assets－

0

Total extraordinary income

－

0

－

0

Loss on retirement of non-current assets

25

1

Total extraordinary losses

25

2Profit before income taxes
Income taxes

4,892
1,317

5,399
1,460

Profit

3,574

3,939

57

35

3,516

3,903

Non-operating income
Interest income
Dividend income

Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity method

Ordinary profit
Extraordinary income

Extraordinary losses
Loss on sales of non-current assets

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

5

Quarterly Consolidated Statements of Comprehensive Income / For the First Quarter Consolidated Accumulative Term
(Unit:Million yen)Three-month period ended
June 30, 2018
(From April 1, 2018
to June 30, 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)

Three-month period ended
June 30, 2019
(From April 1, 2019
to June 30, 2019)

3,574

3,939

560
339
(899)
16

(1,019)(1,068)
933
(11)

(17)

17

(1)

(1,147)

Comprehensive income

3,573

2,792

Comprehensive income attributable to
Owners of parent
Non-controlling interests

3,592
(18)

2,648
143

6

(3) Quarterly Consolidated Statements of Cash Flows(Unit:Million yen)Three-month period ended
June 30, 2018
(From April 1, 2018
to June 30, 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
Decrease (increase) trade receivables
Decrease (increase) in inventories
Increase (decrease) trade payables
Decrease (increase) in retirement benefit asset
Increase (decrease) in retirement benefit liability
Other

Three-month period ended
June 30, 2019
(From April 1, 2019
to June 30, 2019)

4,892
1,560
(0)
(187)
48

5,399
1,642
(0)
(297)
26

43

29

25

2

662
(9)
545
(96)
3
694

718
(3,034)
(289)
(139)
3
2,359

Subtotal

8,184

6,422

Interest and dividends received
Interest paid
Income taxes paid

234
(70)
(3,162)302(45)(1,783)

Net cash provided by (used in) operating activities

5,185

4,895

2,507
(988)

9,991
(1,944)－0(93)(3,802)(181)(12,428)

3,500

12,425Purchase of investments in capital of subsidiaries

－

(907)

Loan advances
Collection of loans receivable
Other

(1)
0
(20)

(0)
0
(36)

Net cash provided by (used in) investing activities

1,103

6,918

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

7

(Unit:Million yen)Three-month period ended
June 30, 2018
(From April 1, 2018
to June 30, 2018)

Three-month period ended
June 30, 2019
(From April 1, 2019
to June 30, 2019)

Cash flows from financing activities
Repayments of long-term borrowings
Dividends paid
Other

(15,000)(2,341)(10)－(2,343)(12)

Net cash provided by (used in) financing activities(17,351)(2,356)

Effect of exchange rate change on cash and cash equivalents

(362)

440

Net increase (decrease) in cash and cash equivalents(11,425)

9,898

Cash and cash equivalents at beginning of period

78,31356,243

Cash and cash equivalents at end of period

66,88866,1428

(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 liabilities (other) or current assets(other).”9