Tsumura & Co. · TSE:4540
Tsumura & — FY2022 Earnings Presentation
47 slides from Tsumura &'s earnings presentation, May 10, 2023
Slide 1: Business Results for Fiscal 2022
Business Results for Fiscal 2022 May 10, 2023 TSUMURA & CO.
Slide 2: Agenda
Agenda Business Results for Fiscal 2022 and 01 Earnings Forecast for Fiscal 2023 02 Outlook for China Business 2
Slide 3: Business Results for Fiscal 2022 and Earnings Forecast for Fiscal 2023
Business Results for Fiscal 2022 and Earnings Forecast for Fiscal 2023 Director, and CFO Muneki Handa
Slide 4: Agenda: FY 2022 Business Results Overview
Agenda 01 FY 2022 Business Results Overview 02 FY 2023 Earnings Forecast 4
Slide 5: Roadmap for the Realization of the TSUMURA VISION
Roadmap for the Realization of the TSUMURA VISION “Cho-WA” 2031 1st stage 2nd stage 3rd stage FY2022-2024 FY2025-2027 FY2028-2031 —Germination— —Growth— —Flowering— Standardization of Kampo Over 50% physicians write 10 treatments or more Kampo prescriptions Prescription Kampo 50% of physicians write
Slide 6: FY2022 Business Results Overview
FY2022 Business Results Overview FY 2022 FY 2022 YoY Achievement 【Million yen】 Plan Results rate Amount Change Ratio to total sales Sales 138,500 140,043 101.1% +10,497 +8.1% Domestic business 124,300 124,698 100.3% － － China business 14,200 15,345 108.1% － － Operating profit 20,800 20,916 100.6% (1
Slide 7: Key Points in Performance
Key Points in Performance Achieved plans for sales and at each profit level. Net sales 140,043 million yen Achievement rate 101.1% YoY +8.1% ◼ Domestic business Total sales for the 129 prescription Kampo products: 119,362 million yen, rose 4.6% year-on-year Total sales of the OTC Kampo formulations
Slide 8: Domestic Business: Sales of Drug-fostering Program Formulations
Domestic Business: Sales of Drug-fostering Program Formulations/Growing Formulations (Million yen) Net sales Ranking Product No./Formulation name FY 2021 FY 2022 YoY Ratio to total sales 9,569 9,739 +169 +1.8% Drug-fostering program 1 100 Daikenchuto 7,379 7,380 +1 +0.0% Drug- formulations 3 54 Yoku
Slide 9: China Business: Crude Drug Platform Business
China Business: Crude Drug Platform Business Growth in sales, chiefly of raw material crude drugs 54.6% (Plan) Raw material Sales to traditional Chinese medical growth 17.2 crude drugs ＊ products companies as a raw material billion yen 15.3 Cultivate new customers billion Expand the value of transac
Slide 10: Agenda: FY 2023 Earnings Forecast
Agenda 01 FY 2022 Business Results Overview 02 FY 2023 Earnings Forecast 10
Slide 11: FY 2023 Earnings Forecast
FY 2023 Earnings Forecast Forecasting an increase in sales and decline in profit year-on-year FY 2022 FY 2023 YoY [Million yen] Results Earnings Forecast Amount Change Net sales 140,043 150,500 +10,456 +7.5% Domestic business 124,698 133,300 +8,601 +6.9% China business 15,345 17,200 +1,854 +12.1% Op
Slide 12: Factors Triggering Changes in Sales in FY 2023
Factors Triggering Changes in Sales in FY 2023 ・Further create demand for Kampo products by implementing sales measures, mainly the strengthening of e-promotions ・Continue to implement a system to boost production capacity in response to demand for Kampo products 150.5 billion yen 140.0 billion yen
Slide 13: Trends in Number of Physicians Writing 10 or More Kampo Prescriptions
Domestic business: Trends in the Number of Physicians Writing 10 or More Prescriptions for Kampo Pharmaceuticals ・The number of physicians writing 10 or more prescriptions for Kampo pharmaceuticals increased by approximately 20,000 physicians, a ratio of 32%* ・The issue is the increase in physicians
Slide 14: Domestic Business: Information Provision Activities
Domestic Business: Information Provision Activities ・The number of cases of information recognition (FY 2022) increased 53% in comparison with the level prior to COVID-19 (FY 2019) ・Aim to improve the quality of activities through information provision that suits each individual medical practitioner
Slide 15: Factors Triggering Changes in Operating Profit in FY 2023
Factors Triggering Changes in Operating Profit in FY 2023 ・Substantial impact from external factors, including inflation and yen depreciation External factors: (24) Internal factors: (5) +33 (3) (35) 20.9 billion yen (11) (18) (24) +29 18.0 billion yen FY 2022 Crude drug Soaring energy and Exchange
Slide 16: Improving corporate value through growth investment
Improving corporate value through growth investment Investing in growth to improve corporate value by realizing the vision Growth Investment ・Research for personalize Kampo treatment ・Scientific elucidation of Pre-symptomatic Disease ・Research for expansion of the standardzation of Sustainable expan
Slide 17: Improve Productivity via Introduction of DX in the Kampo Value Chain
Improve Productivity via Introduction of DX in the Kampo Value Chain Cultivation/procurement Manufacturing Sales/education/popularization Shenzhen Tsumura Medicine, Ibaraki/Shizuoka Plants China Medico Technology Shanghai/Tianjin Plants Ishioka Center, Yubari Tsumura Automation of selection operatio
Slide 18: Shareholder Return Policy
Shareholder Return Policy ・Aim to improve corporate value through growth investments after continuing to payout stable dividends In the upfront investment and foundation building stage, Dividend continue to pay a stable annual dividend per share of ¥64 Operating CF Growth Upfront Investments/Foundat
Slide 19: Basic Policy for the China Business
Basic Policy for the China Business President and Representative Director, CEO Terukazu Kato
Slide 20: Agenda
Agenda China Business/Manufacturing Platform: 01 M&A Overview 02 Basic Policy for the China Business 20
Slide 21: Agenda
Agenda China Business/Manufacturing Platform: 01 M&A Overview 02 Basic Policy for the China Business 21
Slide 22: Formulation Platform: M&A Overview
Formulation Platform: M&A Overview Company name: Shaanxi Unisplendour Life Care Pharmaceutical Co., Ltd. (Unisplendour) Unisplendour Location: Baoji, Shaanxi Province 100% Registered capital: 80.07 million RMB Beijing Unisplendour Hi-tech Pharmaceutical Co., Ltd. Number of group employees: More than
Slide 23: Shaanxi Unisplendour Life Care Pharmaceutical Co., Ltd.
Shaanxi Unisplendour Life Care Pharmaceutical Co., Ltd. History 1918: Founded as Xingling Drugstore 1944: Changed business name to Daxingtang Pharmacy Chain 1958: Changed business name to local government-run Baoji Chengyao (Medicinal Product) Factory 1963: Changed business name to Baoji Zhiyaochang
Slide 24: Unisplendour: License for Traditional Chinese Medical Products
Unisplendour: 147 License for Traditional Chinese Medical Products Number of licenses for traditional Number of licenses for OTC/traditional Number of license for traditional Chinese Chinese medical products by disease Chinese medical products medical products by dosage form 97 licenses in the 104 l
Slide 25: Unisplendour: Main Products
Unisplendour: Main Products Shosekigan Jukankaiigan (proprietary item) (proprietary item) Yojingokakohukueki Rokumijiougan (proprietary item) 25
Slide 26: Building/Transforming Foundations in Chinese Business
Building/Transforming Foundations in Chinese Business Expand sales Vision for Chinese Treatment/presymptomatic channelsBrand building operations disease/recuperation Contributing to Sales image the health of the citizens of China 10 billion April 2023 yuan August 2022 Acquired equity Established Pin
Slide 27: Basic Policy for the Traditional Chinese Medicine/Medical Products Business
Formulation Platform: Basic Policy for the Traditional Chinese Medicine/Medical Products Business 1. Improvements to Tsumura quality Crude drug GACP, stability/homogeneity/dosage form for formulations 2. Establish a production system Smart system, low-cost operations 3. Expand sales channels From Sh
Slide 28: Figure of Capital Ties between Major Corporate Groups in China
Figure of Capital Ties between Major Corporate Groups in China Tsumura 100％ Tsumura China Inc. established in December 2016 [Shanghai] 100％ 56％ 100％ 63％ Ping An Tsumura Inc. established June 2018 [Shanghai] Manufactures Kampo 80％ 100％ powdered extract for Japan Shenzhen Tsumura Ping An Tsumura Unisp
Slide 29: Agenda
Agenda China Business/Manufacturing Platform: 01 M&A Overview 02 Basic Policy for the China Business 29
Slide 30: TSUMURA VISION "Cho-WA" 2031
Goals of the Long-Term Management Vision for 2031 Lively Living for Everyone TSUMURA VISION “Cho-WA” 2031 We aim to create conditions in which the Tsumura Group is contributing to the well-being of all by supplying evidence-based products and services, including Kampo and traditional Chinese medicin
Slide 31: Goals of TSUMURA VISION "Cho-WA" 2031
Goals of TSUMURA VISION “Cho-WA” 2031 Goals to be realized under VISION 2031 1. 50% of physicians will write basic prescriptions in all treatment areas 2. Expand standard Kampo treatments and personalize Kampo treatments 3. Scientific study of pre-symptomatic diseases Three preventive measures for p
Slide 32: TSUMURA VISION "Cho-WA" 2031
TSUMURA VISION “Cho-WA” 2031 Promote health Three Preventive Measures through the Healthcare enhancement of (prevention) the body’s natural Prevent disease healing powers by rectifying areas, from becoming Nutrition (food) Exercise including nutrition (food), exercise serious Sleep and stress (Preve
Slide 33: Vision for China Business
Vision for China Business Health & Medicine Traditional Chinese medical products business Recuperation business Treatment Expand (Prevention) Raw material crude drugs standard Kampo Nutrition (food) treatments Exercise Personalization Sleep Traditional Chinese of treatments Gingseng medicine drug pi
Slide 34: Health & Medicine Business: Crude Drug Platform
Health & Medicine Business: Crude Drug Platform Yakushokudogen Beverages being sold at Recuperation China Tsutaya Books (Prevention) Southeast Asia (Shanghai) Crude drug Nutrition (food) platform Exercise Sleep Ping An Tsumura Medicine, etc. 34
Slide 35: Health & Medicine Business: Building New Sales Channels
Health & Medicine Business: Building New Sales Channels Sales channels Live commerce platform Integration/input Product sales building Brand e-commerce platform Social media Contents distribution Brand channels 35
Slide 36: Traditional Chinese Medicine/Medical Products Business: Crude Drug/Formulation Platforms
Traditional Chinese Medicine/Medical Products Business: Crude Drug/Formulation Platforms Classical Personalized prescription medicine Chinese medicines Treatment Expand standard China Crude drug China Kampo platform Southeast treatments Personalization Ping An Tsumura Asia Medicine of treatments For
Slide 37: Traditional Chinese Medicine Business: Personalized Medicine Drug Piece Added-Value Service
Traditional Chinese Medicine Business: “Personalized Medicine” Drug Piece Added-Value Service Traditional Chinese Small-lot, high-mix smart production Ping An Tsumura medicine system Medicine Personalization of Crude drug extract China Medico treatments extraction/concentration/packaging Technology
Slide 38: Inquires about these materials
Inquires about these materials Corporate Communications Dept. Investor Relations Group investor_madoguchi@mail.tsumura.co.jp Cautionary items regarding forecasts ⚫ The materials and information provided in this presentation contain so-called forward-looking statements. Readers should be aware that t
Slide 39: Appendix
of TSUMURA Appendix
Slide 40: Factors Triggering Changes in Operating Profit (YoY)
Factors Triggering Changes in Operating Profit (YoY) （ Million yen ） （ Million yen ） Breakdown of change in net sales:+3,417 Domestic +2,737 +3,417(1,352) Overseas +679 (2,244) Breakdown of change in cost-to-sales: (1,352) (1,280) Crude drug procurement cost (619) Raw material expense (Domestic: Soa
Slide 41: Financial Condition/Cash Flow Position
Financial Condition/Cash Flow Position （ Million yen ） FY 2021 FY 2022 Bond issuance: 30 billion yen (Sep. 8, 2022) (March 2022) (March 2023) Change （ Hundred million yen ） Total assets 350,981 396,813 45,831 +18 947 +244 Current assets 229,420 268,320 38,900 Non-current assets 121,561 128,492 6,931
Slide 42: Comparison with the Prescription Pharmaceutical Market
Comparison with the Prescription Pharmaceutical Market Sales increased 1.8% year-on-year on a NHI drug price basis; the rate of sales growth was sluggish due to the negative impact of restricted shipments (YoY/drug price basis) All sales channels 9.6% 7.9% 7.7% Tsumura 7.1% 6.6% 5.5% 5.5% (Excluding
Slide 43: Comparison with the Prescription Pharmaceutical Market
Comparison with the Prescription Pharmaceutical Market Tsumura (YoY/drug price basis) Prescription pharmaceutical market General clinics (GP) Hospital market (HP) 12% 11.1% 12% 10% 9.1% 8.7% 10% 7.5% 7.8% 8% 8% 6.4% 6.3% 5.2% 4.1% 6% 4.7% 5.1% 6% 4.1% 3.9% 3.8% 4% 2.4% 4% 1.1% 2.3% 1.9% 2.3% 1.4% 3.
Slide 44: COVID-19 Impact and Outlook
COVID-19 Impact and Outlook ・Symptoms reflecting changes in the living environment continue to offer prescription opportunities despite a partial decline ・Increase in prescription opportunities for common cold-related formulations due to the spread of common colds during the winter season (Shipment
Slide 45: Create Value and Implement Job Satisfaction Reforms
Create Value and Implement Job Satisfaction Reforms Leveraging Organizational and Human Capital Cultivate Management Personnel Foster Corporate Culture Basic management lecture Long-Term Vision (10-year) Survey outcome was ・Employees that completed the course Standard KPIs Over 4.0 52 people (of whi
Slide 46: Promote diversity and inclusion
Create Value and Implement Job Satisfaction Reforms Leveraging Organizational and Human Capital Promote diversity and inclusion Encourage male employees to take Increased ratio of childcare leave female managers (Acquisition ratio for childcare leave and average period 100.0 30 of childcare leave) 8
Slide 47: Dividend and Payout Ratio Trends
Dividend and Payout Ratio Trends 45.0% 100 37.4% 35.9% 35.7% 35.6% 40.0% 33.5% 32.1% 31.9% 31.9% 29.7% 35.0% 80 26.0% 30.0% 60 25.0% Year-end 期末配当（円） dividend (yen) 32 32 32 32 32 32 32 32 32 32 20.0% 40 Interim 中間配当（円） dividend (yen) 15.0% 10.0% 20 Payout 配当性向ratio 32 32 32 32 32 32 32 32 32 32 5.0