On November 5, 2020 Sysmex reported that Summary of Consolidated Financial Results [ IFRS ] for the First Six Months of the Fiscal Year Ending March 31, 2021 (Press release, Sysmex, NOV 5, 2020, View Source [SID1234570262])

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1. Results for the First Six Months of the Fiscal Year Ending March 31, 2021
2. Dividend
3. Financial Forecast for the Year Ending March 31, 2021
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): 209,344,432 shares as of Sep. 30, 2020; 209,266,432 shares as of Mar. 31, 2020 2)

Number of treasury stock at the end of each fiscal period: 446,856 shares as of Sep. 30, 2020; 446,680 shares as of Mar. 31, 2020 3) Average number of outstanding stock for each period (cumulative): 208,859,643 shares for the six months ended Sep. 30, 2020 208,731,410 shares for the six months ended Sep. 30, 2019

Note: Quarterly summaries of financial results are excluded from quarterly reviews.

* Explanation regarding the appropriate use of financial forecast and other information

1. 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 5 of the attachment to this document for cautionary statements concerning the conditions and performance forecasts that serve as the basis for these forecasts.

2. Supplementary financial materials (in Japanese and English) will be posted on the Sysmex website on Thursday, November 5, 2020.

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 six months of the fiscal year ending March 31, 2021, economic activity in Japan was down substantially as the result of the COVID-19 pandemic. Although this activity gradually picked up in Japan after the state of emergency declaration was lifted, infections persist, making the outlook highly uncertain. Except in certain regions, the pandemic has continued to spread overseas. Although economic activity has resumed, we believe it will take some time for the economy to return to pre-pandemic levels. On the healthcare front, Japan’s medical and healthcare field is expected to remain robust due to an aging society and increasingly diverse health and medical needs.

Looking overseas, the populations of developed countries are aging, while economic growth in emerging markets is causing healthcare demand to increase and prompting higher levels of healthcare quality and service enhancements. These trends are promoting efficient healthcare, with structural changes brought about by artificial intelligence, information and communications technology, and other breaking technologies. However, with the number of COVID-19 cases rising globally, considerations about healthcare systems and public health capable of responding to pandemics like we are currently experiencing are exerting pressure and are likely to cause a major transformation of the healthcare environment itself. Restrictions on outings and other activities in individual countries led to a decline in demand, including a drop in the number of tests conducted at medical institutions.

Although the easing of restrictions on movement did cause demand to resurge somewhat, the pandemic persists. If this situation is prolonged, performance could be affected further. Against this backdrop, Sysmex applied for manufacturing and marketing approval of a reagent for detecting antigens of SARS-CoV-2, the coronavirus that causes COVID-19. This reagent is used in conjunction with our HISCL-5000/HISCL-800 automated immunoassay systems, and detects SARS-CoV-2 antigens present in nasopharyngeal swabs. The reagent, used in conjunction with the HISCL-5000/HISCL-800, provides highly sensitive test results.

This combination delivers rapid test results in 17 minutes and augments testing efficiency by processing 200 tests per hour (with the HISCL-5000). Sysmex remains committed to the establishment of diagnosis/treatment methods for COVID-19 by way of diverse testing, including PCR tests, antigen tests, antibody tests and cytokine tests, as well as hematology and coagulation tests. Meanwhile, health insurance coverage went into effect for RAS gene mutation testing of blood for colorectal cancer using the RAS gene1 mutation testing kit (OncoBEAM2 RAS CRC kit). This testing is used in the selection of treatment methods using anticancer agent for patients for which physical biopsies are difficult.

This product is used to test samples of tumor-derived DNA suspended in the blood of colorectal cancer patients, detecting RAS gene mutations to a high degree of sensitivity. As the testing uses blood samples, it places less of physical and mental burden on the patient than biopsies, allowing for simple testing. Health insurance coverage will allow more patients to receive this testing to help doctors determine appropriate treatment methods. In August 2020, the hinotori Surgical Robot System became the first Japanese-made robotic assisted surgery system to receive manufacturing and marketing approval. This system, which was also covered under national health insurance in September 2020, was developed by Medicaroid Corporation. Medicaroid was jointly established by Kawasaki Heavy Industries, Ltd., and Sysmex. On this system, arms of the operation unit used in surgery are designed to reduce interference between the arms and the assisting doctor, which is expected to make operations smoother.

As the general agent for Medicaroid products, Sysmex has exclusive global sales and service rights. To begin, we are working toward an early introduction targeting the Japanese urology market.

1 RAS gene: As the likelihood is high that patients with RAS gene (KRAS/NRAS gene) mutations will not benefit (prolongation of life, tumor reduction) from the administration of anti-EGFR drugs, companion diagnostics may be performed to treat the gene mutation first.

2 OncoBEAM: The name of Sysmex’s technology to detect minute gene mutations circulating in the blood with a high degree of sensitivity using BEAMing technology, which was developed at Johns Hopkins University. (BEAM is an acronym for "bead, emulsion, amplification and magnetics." This gene analysis method combines digital PCR (ultrahigh-sensitivity PCR) and flow cytometry technologies for highly sensitive analysis of genetic mutations.)

In Japan, sales of reagents and services increased in the life science field. However, instrument sales were down, mainly in the hematology field and for large orders in other fields, due primarily to the impact of COVID-19. Also, sales of reagents were down in the urinalysis and immunochemistry fields. As a result, sales in Japan fell 6.2% year on year, to ¥21,275 million. Overseas, instrument sales increased in the urinalysis, hemostasis and immunochemistry fields. Mainly because of the COVID-19 pandemic, however, reagent sales were down, centered on the hematology, urinalysis and immunochemistry fields. Consequently, overseas sales decreased 7.9% year on year, to ¥110,807 million.

The overseas sales ratio fell 0.2 percentage point, to 83.9%. Selling, general and administrative expenses declined 4.9% year on year, to ¥38,078 million, largely because of activities at all destinations being restricted in the face of the COVID-19 pandemic. As a result, during the first six months of the fiscal year ending March 31, 2021, the Group recorded consolidated net sales of ¥132,082 million, down 7.6% year on year. Operating profit declined 28.0%, to ¥20,004 million; profit before tax decreased 27.9%, to ¥18,090 million; and profit attributable to owners of the parent fell 28.1%, to ¥12,653 million.

Performance by segment

(1) Japan In Japan, sales of reagents and services increased in the life science field. However, instrument sales were down, mainly in the hematology field and for large orders in other fields, due primarily to the impact of COVID-19. Reagent sales also decreased in the urinalysis and immunochemistry fields. As a result, sales in Japan fell 6.3% year on year, to ¥23,241 million. On the profit front, although SG&A and R&D expenses declined, lower sales and a deteriorating cost of sales ratio caused gross profit to worsen. Accordingly, segment profit (operating profit) fell 27.7%, to ¥12,951 million.

(2) Americas Sales were down in North America. Although instrument sales rose in the hemostasis field, instrument and reagent sales declined in the hematology field, mainly because of the COVID-19 pandemic. In Central and South America, sales were down despite higher instrument sales in the hematology field, mainly as the result of lower reagent sales in the hematology field. As a result, sales in the Americas came to ¥27,200 million, down 10.1% year on year.-4-Segment profit (operating profit) fell 60.5% year on year, to ¥375 million, despite lower SG&A expenses, as the result of lower gross profit stemming from lower sales and a deteriorating cost of sales ratio

(3) EMEA Sales in the EMEA region declined 2.5% year on year, to ¥37,196 million. Instrument sales rose in the hematology and life science fields, but reagent sales decreased in the hematology, urinalysis and life science fields, mainly due to the spread of the COVID-19 pandemic. Segment profit (operating profit) fell 4.9%, to ¥3,624 million, despite lower SG&A expenses, as gross profit fell as the result of lower sales and a deteriorating cost of sales ratio.

(4) China In China, sales fell 10.1% year on year, to ¥33,591 million. Instrument sales increased in the hematology, urinalysis and immunochemistry fields, and the hemostasis field saw higher reagent sales. Mainly due to the impact of COVID-19, however, reagent sales were down in the hematology, urinalysis and immunochemistry fields. Segment profit (operating profit) decreased 70.8% year on year, to ¥1,210 million, despite lower SG&A expenses, as gross profit declined due to lower sales and a worsening cost of sales ratio.

(5) Asia Pacific Mainly because of COVID-19, sales of reagents decreased in the hematology and urinalysis fields. As a result, sales in the Asia Pacific region decreased 12.5% year on year, to ¥10,852 million. Segment profit (operating profit) fell 41.3% year on year, to ¥944 million. SG&A expenses fell, but lower sales and a deteriorating cost of sales ratio caused gross profit to fall.

2) Financial conditions analysis

(1) Financial conditions As of September 30, 2020, total assets amounted to ¥380,817 million, down ¥8,474 million from March 31, 2020. As main factors, trade and other receivables (current assets) fell ¥7,862 million, and property, plant and equipment were down ¥2,509 million, while intangible assets rose ¥2,390 million. Meanwhile, total liabilities as of September 30, 2020 were ¥94,835 million, down ¥16,109 million. Principal decreases included trade and other payables, which were down ¥10,389 million; accrued expenses, down ¥1,669 million; accrued bonuses, down ¥1,531 million; and income taxes payable, down ¥1,524 million. Total equity came to ¥285,982 million, up ¥7,634 million from March 31, 2020. Among principal reasons, retained earnings rose ¥5,136 million, while other components of equity increased ¥1,732 million. Equity attributable to owners of the parent to total assets rose 3.6 percentage points, from 71.3% on March 31, 2020 to 74.9% on September 30, 2020.

(2) Cash flows As of September 30, 2020, cash and cash equivalents amounted to ¥55,213 million, down ¥1,378 million from March 31, 2020. Cash flows from various activities during the first six months of the fiscal year are described in more detail below. (Cash flows from operating activities) Net cash provided by operating activities was ¥23,820 million (down ¥3,088 million).

As principal factors, profit before tax provided ¥18,090 million (down ¥6,984 million), depreciation and amortization provided ¥12,537 million (up ¥1,027 million), a decrease in trade receivables provided ¥8,469 million (up ¥4,805 million), an increase in inventories used ¥1,586 million (down ¥4,264 million), a decrease in trade payables used ¥6,441 million (up ¥5,373 million), and a decrease in consumption taxes receivable provided ¥3,014 million (up ¥956 million). (Cash flows from investing activities) Net cash used in investing activities was ¥15,104 million (up ¥6,046 million).

Among major factors, purchases of property plant and equipment used ¥4,065 million (down ¥3,393 million), purchases of intangible assets used ¥8,387 million (up ¥2,273 million), payments resulting in an-5-increase in long-term prepaid expenses used ¥2,057 million (up ¥1,109 million), and proceeds from withdrawal of time deposits provided ¥579 million (down ¥6,642 million). (Cash flows from financing activities) Net cash used in financing activities was ¥10,494 million (up ¥298 million). This was mainly due to dividends paid of ¥7,517 million (up ¥4 million) and repayment of lease liabilities, which used ¥3,364 million (up ¥563 million).

3) Consolidated financial forecast For the Company’s consolidated financial forecast for the full fiscal year, please refer to the announcement regarding financial forecast for the fiscal year ending March 31, 2021, announced today (November 5, 2020).6) Notes to the condensed quarterly consolidated financial statements 1. Notes related to the going concern assumption Not applicable

2. Segment information

1) Overview of reportable segments The Group’s reportable segments are the constituent business units of the Group for which separate financial data are available and that are examined on a regular basis for the purpose of enabling the Managing Board to allocate managerial resources and evaluate results of operations. The Group is primarily engaged in the manufacture and sale of diagnostic instruments and reagents. These businesses are conducted in Japan by the Company, and in the Americas, EMEA, China and the Asia Pacific by regional headquarters established in those regions. These companies formulate overarching strategies tailored to regional characteristics and conduct business activities accordingly. Regional headquarters and other domestic and overseas subsidiaries are independent management units that handle production and sales for each region.

Accordingly, the Group has five reportable segments comprising geographical segments based on manufacturing and sales systems. These are "Japan," the "Americas," "EMEA," "China," and the "Asia Pacific." 2) Segment profit and operating results Profit and operating results from continuing operations by reportable segment of the Group are as follows; Intersegment sales are determined based on market prices or costs of goods manufactured. Accounting policies of reporting segments are consistent with the Group’s accounting policies indicated in the consolidated financial statements for the previous fiscal year.

1. Segment profit adjustments of negative ¥624 million include negative ¥741 million for the unrealized gains on inventories and ¥150 million for the unrealized gains on non-current assets.

2. Segment profit is adjusted to coincide with operating profit in the condensed quarterly consolidated statement of income.

1. Segment profit adjustments of ¥898 million include ¥819 million for the unrealized gains on inventories and ¥168 million for the unrealized gains on non-current assets.

2. Segment profit is adjusted to coincide with operating profit in the condensed quarterly consolidated statement of income.