On February 10, 2022 Sysmex reported that Results for the First Nine Months of the Fiscal Year Ending March 31, 2022 (Press release, Sysmex, FEB 10, 2022, View Source [SID1234607952]).
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1) Operating result
(2) Financial condition
2. Dividend
3. Financial Forecast for the Year Ending March 31, 2022
4. Other Information
(1) Changes in significant consolidated subsidiaries (which resulted in changes in scope of consolidation):
No (2) Changes in accounting policies and accounting estimates
1) Changes in accounting policies required by IFRS:
No 2) Other changes in accounting policies: No 3) Changes in accounting estimates:
No (3) Number of outstanding stock (common stock)
1) Number of outstanding stock at the end of each fiscal period (including treasury stock): 209,640,632 shares as of Dec. 31, 2021; 209,443,232 shares as of Mar. 31, 2021
2) Number of treasury stock at the end of each fiscal period: 447,083 shares as of Dec. 31, 2021; 446,876 shares as of Mar. 31, 2021
3) Average number of outstanding stock for each period (cumulative): 209,056,923 shares for the nine months ended Dec. 31, 2021 208,881,059 shares for the nine months ended Dec. 31, 2020
Explanation regarding the appropriate use of financial forecast and other information
1. Basic earnings per share have been revised from the figures indicated in the consolidated financial forecast announced on November 10, 2021, in accordance with changes in the number of shares of outstanding stock and treasury stock. No other figures in the financial forecast have been revised.
2. The forecasts and future projections contained herein have been prepared on the basis of rational decisions given the information available as of the date of announcement of this document. These forecasts do not represent a commitment by the Company, and actual performance may differ substantially from forecasts for a variety of reasons. Please refer to
"3) Consolidated financial forecast" within "
1. Qualitative information on quarterly financial results" on page 4 of the attachment to this document for cautionary statements concerning the conditions and performance forecasts that serve as the basis for these forecasts. 3. Supplementary financial materials (in Japanese and English) will be posted on the Sysmex website on Thursday, February 10, 2022.
1. Qualitative information on quarterly financial results
1) Operating performance analysis Future-related information contained in the text below is based on the judgement as of the end of the fiscal period under review. During the first nine months of the fiscal year ending March 31, 2022, the Japanese economy was characterized by signs of an upturn in social activity and personal consumption, as COVID-19 vaccinations increased, and a nationwide emergency declaration was lifted as the number of new infections dropped. However, in the second half of this period, consumer confidence again ebbed due to the emergence of a new mutant strain (the Omicron variant).
Overseas, the overall trend is toward recovery, although the situation varies by country and region. Even so, the outlook remains uncertain due to such factors as a shift toward tighter monetary policy in the United States and concerns of an economic slowdown fueled by debt problems in China and energy-related issues. On the healthcare front, we are seeing major changes in the healthcare environment due to the COVID-19 pandemic, as well as an aging society and increasingly diverse health and medical needs. In Japan, expectations are mounting for new medical services to address the "new normal," such as resolving the pressure on medical systems when the number of infections rises, stable supplies of necessary supplies and a response to digitalization in the medical field.
Looking overseas, aging populations in developed countries are driving demand for the moderation of medical systems. In emerging markets, healthcare demand is increasing, and demand is rising for higher levels of healthcare quality, service enhancements and preventive medicine. As a result, we are seeing rapid advances in the application of artificial intelligence, big data analysis and other leading-edge technologies, which are expected to provide further opportunities for growth. Against this backdrop, Sysmex continued to expand its product portfolio in the hematology field. We launched a next-generation flagship model, XR-Series Automated Hematology Analyzer, and a compact three-part differential model, the XQ-Series Automated Hematology Analyzer in Japan.
We are moving forward with a gradual global sales rollout as we receive regulatory approval in individual countries. We aim to contribute optimization of laboratory operations according to regional characteristics and facilities’ needs. As an initiative toward the realization of personalized medicine, Sysmex submitted an application for manufacturing and marketing approval with the Pharmaceuticals and Medical Devices Agency (PMDA) for an assay kit to measure amyloid beta (Aβ) in the blood using its automated immunoassay system, HISCL-5000/HISCL-800. Alzheimer’s disease is thought to be caused by the accumulation of a protein called Aβ in the brain, which causes damage to nerve cells. By providing an assay kit that assists in identifying the accumulation of Aβ in the brain, we aim to reduce the burden on patients and create an environment that allows them to start treatment as soon as possible. In a new initiative on the logistics front, Sysmex and Yamato Transport Co., Ltd. have started dry ice-free transportation of reagents for gene testing in consolidated cargo at the ultralow temperature range of minus 70 degrees Celsius.
This model is revolutionary because it is both eco-friendly and cost effective for long-distance transportation of pharmaceutical and other products that require strict quality and temperature control, without using dry ice. Going forward, we will leverage this model, expanding the list of products for transportation and the delivery service area to realize a sustainable cold chain for pharmaceutical products, thus providing quality and stable product supply to medical professionals. In Japan, sales rose for hemostasis and immunochemistry reagents related to COVID-19 testing, as did sales of instruments and reagents in the life science field. Sales of medical robotics instruments also grew. As a result, sales in Japan rose 18.0% year on year, to ¥39,283 million. Overseas, testing demand recovered from the previous corresponding period, when demand was affected by COVID-19. Reagent sales rose as a result, mainly in the hematology and urinalysis fields. In addition, the impact of yen depreciation. Consequently, overseas sales increased 23.0% year on year, to ¥219,618 million.
The overseas sales ratio rose 0.6 percentage point, to 84.9%. Selling, general and administrative (SG&A) expenses expanded 15.6%, to ¥67,256 million, owing to a partial resumption of sales activities that had been constrained across all regions in the previous corresponding period. As a result, during the first nine months of the fiscal year ending March 31, 2022, the Group recorded consolidated net sales of ¥258,901 million, up 22.2% year on year. Operating profit rose 38.9%, to ¥49,870 million; profit before tax surged 44.4%, to ¥48,065 million, and profit attributable to owners of the parent expanded 41.3%, to ¥32,901 million. Performance by segment
(1) Japan Sales rose for hemostasis and immunochemistry reagents related to COVID-19 testing, as did sales of instruments and reagents in the life science field. Sales of medical robotics instruments also grew. As a result, sales in Japan rose 16.6% year on year, to ¥42,170 million. On the profit front, performance was affected by higher SG&A and R&D expenses, but gross profit increased due to higher sales and an improvement in the cost of sales ratio. Accordingly, segment profit (operating profit) rose 26.9%, to ¥27,630 million.
(2) Americas In North America, sales of instruments, reagents and maintenance services increased in the hematology field due to a resurgence in testing demand and sales increase of instruments. Along with the alliance with Siemens Healthcare Diagnostics Inc., sales of instruments, reagents and maintenance services increased in the urinalysis field. As a result, sales in the region grew 31.7%, to ¥55,848 million. Segment profit (operating profit) grew 208.0%, to ¥2,955 million. Although SG&A expenses increased, this performance was attributable to higher sales and gross profit, stemming from an improved cost of sales ratio.
(3) EMEA Sales of instruments and reagents increased in the fields of hematology, urinalysis and hemostasis, due to a resurgence in testing demand and the acquisition of bids in Russia, Middle East and Eastern Europe. Sales of purchased antibody testing kits related to the COVID-19 pandemic also grew. As a result, sales were ¥76,936 million, up 27.9% year on year. Segment profit (operating profit) grew 62.2%, to ¥12,172 million, despite higher SG&A expenses, due to increased sales and higher gross profit, stemming from an improved cost of sales ratio.
(4) China － 4 － Sales were ¥62,738 million, up 11.4% year on year. Sales of hematology, urinalysis, hemostasis and immunochemistry reagents increased, due to a resurgence in testing demand and the positive impact of yen depreciation. Segment profit (operating profit) grew 142.1%, to ¥7,389 million, despite higher SG&A expenses, due to increased sales and higher gross profit, stemming from an improved cost of sales ratio.
(5) Asia Pacific Sales of hematology and urinalysis reagents increased, due to a resurgence in testing demand. In South Asia, instrument sales increased in the hematology field due to the acquisition of bids in India. In India and Southeast Asia, sales of hemostasis instrument and reagents increased. As a result, sales were ¥21,208 million, up 26.0% year on year.
Segment profit (operating profit) grew 73.6%, to ¥2,993 million, despite higher SG&A expenses, due to increased sales and higher gross profit, stemming from an improved cost of sales ratio.
2) Financial conditions analysis
(1) Financial conditions As of December 31, 2021, total assets amounted to ¥459,775 million, up ¥32,300 million from March 31, 2021. As main factors, inventories rose ¥16,384 million, intangible assets were up ¥11,024 million, and cash and cash equivalents were up ¥6,977 million, while other non-current assets fell ¥5,866 million. Meanwhile, total liabilities as of December 31, 2021 were ¥128,191 million, up ¥9,385 million from March 31, 2021. Principal increases included trade and other payables, which rose ¥3,883 million, income taxes payable, which rose ¥3,092 million and other non-current liabilities, which rose ¥2,611 million, while accrued bonuses decreased ¥1,935 million. Total equity came to ¥331,584 million, up ¥22,915 million from March 31, 2021. Among principal reasons, retained earnings rose ¥17,643 million, and other components of equity increased ¥3,729 million. Equity attributable to owners of the parent to total assets amounted to 72.0% on December 31, 2021, the same level as on March 31, 2021.
(2) Cash flows As of December 31, 2021, cash and cash equivalents amounted to ¥73,445 million, up ¥6,977 million from March 31, 2021. Cash flows from various activities during the first nine months of the fiscal year are described in more detail below. (Cash flows from operating activities) Net cash provided by operating activities was ¥50,947 million, up ¥11,195 million from the first nine months of the previous fiscal year. As principal factors, profit before tax provided ¥48,065 million (¥14,779 million more than in the corresponding period of the preceding year), depreciation and amortization provided ¥21,197 million (¥2,320 million more than in the corresponding period of the preceding year). An increase in inventories used ¥15,946 million (up ¥14,668 million), an income taxes paid amounted to ¥12,080 million (up ¥419 million). (Cash flows from investing activities) Net cash used in investing activities was ¥26,675 million (up ¥3,595 million). Among major factors, purchases of property, plant and equipment used ¥10,179 million (up ¥3,679 million), and purchases of intangible assets used ¥14,465 million (up ¥2,421 million). (Cash flows from financing activities) Net cash used in financing activities was ¥18,869 million (down ¥556 million). This was mainly due to dividends paid of ¥15,258 million (up ¥220 million).
3) Consolidated financial forecast The Company maintains its consolidated financial forecasts, as announced on November 10, 2021. These forecasts are based on information available as of the date of this release. Actual results may differ materially from these forecast due to unforeseen factors and future events.