Sysmex : Script file( PDF format / 2.2MB )

Presentation

Ietsugu: Good morning. I am Ietsugu from SYSMEX CORPORATION.

Today, I would like to talk about our financial results for the second quarter of the fiscal year ending March 31, 2022, and our full-year earnings forecast for the current fiscal year.

This is the executive summary.

As you can see here, both net sales and operating profit increased. The result was good. Then, this is what happened in all regions amid the particularly difficult situation last year.

We have also made an upward revision to our full-year forecast. JPY is moving weaker than originally expected, so we have changed the assumed exchange rate.

I will now provide an overview of the financial results for the second quarter of the fiscal year ending March 31, 2022.

As you can see here, overall sales and profits have increased, with net sales of JPY168.75 billion. This is a 27.8% increase compared to the same period last year. Operating profit was JPY33.71 billion, and the operating profit ratio was 20%. It was 168.5% of the amount recorded in the previous year. As for the bottom line, as you can see here, it is JPY22.24 billion, which is 175.8% of the amount in the same period last year.

In terms of exchange rates, the yen depreciated from JPY106.9 to the dollar in the previous fiscal year to JPY109.8 this fiscal year, from JPY121.3 to JPY130.9 for the euro, and from JPY15.3 to JPY17 for the Chinese yuan.

Also, in the last fiscal year, due to COVID-19, the overall number of tests was pushed down worldwide, especially in the first half of the year, and in some places the number dropped below 50%. As you know, there were times when it was dangerous to go to the hospital due to lockdowns or other such conditions, and people usually refrained from visiting hospitals. It started to recover in the second half of year but has completely recovered in the first half of this fiscal year, thereby becoming one of the major factors behind the increase. Consequently, although sales of reagents significantly decreased in the previous fiscal year, they have recovered.

Due to the impact of the exchange rate, this was in some ways a tailwind., brought a positive effect of JPY9.51 billion on net sales and JPY3.17 billion on operating profit. However, even in the case of YoY exchange rate operations, net sales grew by 20.6% and operating income by 52.7%.

In any case, demand has recovered, besides the exchange rate has been a tailwind. However, with regard to COVID-19, the number of infections is increasing again, especially in Europe. Although the US is also recovering, there may be factors that will lead to an increase in cases in the future. That is what's happening in the world. Japan, for some reason, has seen a drastic decrease in cases. In that sense, in the eyes of the world, the pandemic seems to have come to an end, with Tokyo being particularly remarkable in this regard.

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As for COVID-19, on the other hand, oral drugs will probably be available by the end of this fiscal year. We hope they would be available around December if possible. If this is the case, I believe that unless there is a large number of mutant strains, COVID-19 will come to an end.

As for the emerging economies, there are still areas in the Asia-Pacific region that are in a severe state, but I have heard that India is, in a sense, heading in the direction of returning to normal.

In any case, under these circumstances, medical care and the medical system have been somewhat fragile until now. If the governments of each country focus on medical care, they will have to think about how to create a system. In Japan, there is also a question of how to secure hospital beds. In this sense, thankfully, it could become sort of a tailwind for our business.

As for operating profit, SG&A expenses increased slightly, but gross profit increased due to higher sales. Costs also improved, as cost to sales ratio improved as the sales of reagents grew significantly. As for SG&A expenses, in that sense, it was quite difficult for us to carry out activities in the previous fiscal year. Although things are not back to the way they were, the way we work has changed a little, including remote work. We have been able to save a lot of expenses, especially on travel and transportation.

On the other hand, there used to be a lot of big events worldwide, including exhibitions, and those used to cost a lot of money. We are saving that money now, too. However, in the second half of the fiscal year, we have seen a slight recovery in this trend.

In that sense, we have grown in a very good way. As you can see here, even in terms of the trends from 2018, our business has been developing in a good way.

Please turn to the next page. This is by region. By region, as you can see here, especially on a local currency basis, we were able to achieve double-digit growth in all areas, especially in the Americas and EMEA, where growth exceeded 20%.

In that sense, in any case, we are recovering from the difficult situation that we faced in the previous fiscal year, especially with regard to reagents. In Japan, the growth rate was 20.1%.

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In the Asia-Pacific region, we are recovering a little, but I think we are still in the process of getting back into full swing. As I will discuss later, China has a Buy China Policy, so the environment may not be that optimistic, but that is the situation we are in.

Next page, please. The next section is by product type.

We are carrying out our business in the areas of instruments, reagents, services, and others. In terms of instruments, the situation was quite difficult in the previous fiscal year. In North America, especially, where the installation of hematology machines was pushed back, or rather hospitals were in a bit of a lockdown, we were not able to carry out such activities. But now it has resumed in earnest.

Also, as I'll explain later, as part of our collaboration with Siemens, we are in charge of the dipstick part of the urinalysis in North America, and it is also leading the way in increasing our revenue.

Also, in EMEA, we were able to get some big deals, especially in the field of hematology. Business in Russia and Eastern Europe was also good. In China, there was a reaction to the considerable increase in demand for instruments in the previous fiscal year. The Chinese government has said that COVID-19 is almost finished, but it seems that it's still there somehow.

As for reagents, as I mentioned earlier, all of them have recovered, with particular growth in the fields of hematology and urinalysis.

Also, in the area of hemostasis and immunochemistry, demand for tests has increased due to COVID-19. In this sense, the growth of reagents has increased significantly, although the growth in the area of instruments has been slightly lower.

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Next, let's go to by business. Next, the hematology business growth rate was 18.2%. Hematology is our core business, but overall, everything grew very well.

In that sense, the diagnostics business has grown by 20% in total. With regard to the medical robot, hinotori, which is only available in Japan, it has just started with JPY350 million. Note, however, that it has been delayed a bit due to COVID-19. We have heard that we are receiving quite a lot of interests from customers..

Please go to the next page. This is about the change in operating profit. As I have already mentioned, the cost to sales ratio has improved considerably as a result of the growth in reagents.

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