Tsumura & Co. (Headquarters: Tokyo, President: Junichi
Yoshii) is pleased to announce that a meeting of the Board of Directors held
on May 15, 2007 has adopted a medium-term management plan for the three years
starting fiscal 2007 (ending March 31, 2008). Details are as follows:
Details
1. Background to Development of the Medium-Term Management Plan
In July 2005, Tsumura developed and announced a medium-term management plan for
the three years from fiscal 2005. Since then, the Company has restructured its
businesses, aiming to bolster its strengths and respond to changes in the business
environment. Specifically, we have taken the following initiatives:
- Continuing activities to establish kampo medicine
- Drug fostering and evolution of kampo
- Promoting development of kampo in the United States
- Merging Nihon Shoyaku Co., Ltd., Tsumura's subsidiary
- Spinning off the household products business
- Establishing a Botanical Raw Materials Division that controls the procurement,
processing and research of botanical raw materials
- Selling the head office building
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As a consequence, Tsumura has achieved an important milestone, creating an environment
that enables the Company to specialize in kampo and botanicals. At the same time,
because of these initiatives, the operating environment surrounding the Company
and Group has changed significantly from July 2005. Hence, Tsumura positions
FY2007 as the first year of its specialization in the kampo and botanicals business
and has accordingly developed a new medium-term management plan.
 The main points of the new medium-term management plan are as follows:
| (1) |
Sales and profits
We aim to post consolidated sales of  104.5 billion and operating profit
of 20 billion for fiscal 2009 based on the assumption that the volume
of sales of prescription kampo preparations will grow 7%. |
|
| (2) |
Important management indexes
| From the perspective of the improvement of capital efficiency and rate
of return, we continue to view ROA (return on asset) as an important management
index. We aim to record an ROA of 13.5% in fiscal 2009, although total
assets increased following the sale of the head office building, a rise
in the market value of our investment securities holdings, and other factors. |
|
| (3) |
Capital investment
| With a rise in demand for prescription kampo preparations, we will
replace our existing equipment and begin to build a new plant on the site
of the Ibaraki Plant. Capital investment will be recorded from fiscal
2009. |
|
| (4) |
Interest-bearing debt
| We will continue to reduce the interest-bearing debt, aiming for 23
billion for fiscal 2009. |
|
| (5) |
Dividend
| We will consider increasing dividends, taking investment situations
into account. |
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2. Numerical Targets in the Medium-Term Management Plan for FY 2007 to
FY 2009 (Million Yen)
| |
| |
2006
performance |
FY 2007 |
FY 2008 |
FY 2009 |
| Plan |
Year on year |
Plan |
Year on year |
Plan |
Year on year |
| Net sales |
91,227 |
95,000 |
4.1% |
99,000 |
4.2% |
104,500 |
5.6% |
(Pharmaceutical
products) |
76,182 |
79,600 |
4.5% |
82,100 |
3.1% |
87,000 |
6.0% |
| (Household products) |
15,044 |
15,400 |
2.4% |
16,900 |
9.7% |
17,500 |
3.6% |
| Operating profit |
15,505 |
16,000 |
3.2% |
17,000 |
6.3% |
20,000 |
17.6% |
| (Pharmaceutical products) |
14,550 |
15,200 |
4.5% |
15,600 |
2.6% |
18,400 |
17.9% |
| (Household products) |
954 |
800 |
 16.1% |
1,400 |
75.0% |
1,600 |
14.3% |
| Recurring income |
14,643 |
15,500 |
5.9% |
16,500 |
6.5% |
19,600 |
18.8% |
| Net income |
13,152 |
8,800 |
33.1% |
9,500 |
8.0% |
11,500 |
21.1% |
| R&D expenses |
4,829 |
4,600 |
4.7% |
4,600 |
- |
4,600 |
- |
| Capital investment |
3,906 |
4,700 |
20.3% |
6,700 |
42.6% |
8,200 |
22.4% |
| Interest-bearing debt |
35,705 |
28,500 |
20.2% |
25,000 |
12.3% |
23,000 |
8.0% |
| Equity capital |
68,455 |
75,600 |
10.4% |
83,300 |
10.2% |
92,800 |
11.4% |
| Equity capital to total assets |
47.7% |
54.6% |
- |
56.9% |
- |
59.8% |
- |
|
|
| |
| |
2006 performance |
2007 projection |
2008 projection |
2009 projection |
ROA
(Return on assets) |
11.1% |
11.3% |
11.9% |
13.5% |
|
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3. Action Targets in the Medium-Term Management Plan
| (1) |
Establish kampo medicine
| We will continue to support improved kampo education at
80 medical schools in Japan and the establishment of outpatient kampo
clinics in university hospitals. |
|
| (2) |
Foster drugs
| Examining the recent structure of illnesses and areas
where medical needs are heavy, we will focus on disorders that are difficult
to treat with modern drugs but for which kampo preparations have shown
specific results, and will collect clinical and basic data of the kampo
preparations. |
|
| (3) |
Internationalize kampo
| We will develop TU-100 Daikenchuto, which we need to achieve
further growth within the pharmaceutical industry. |
|
| (4) |
Develop production systems
| We will take initiatives such as new investments and equipment
replacement, reviews of personnel assignment for efficient operations,
securing the botanical raw materials for kampo preparations of drug fostering
and evolution and internationalization as well, and reviewing production
systems, development of distribution systems, etc. |
|
| (5) |
Establish a botanical raw materials traceability system
| To maintain stable supplies of safe botanical raw materials,
we will strive to improve the quality assurance and quantity assurance
of botanical raw materials. |
|
| (6) |
Create an open company
| We will build a management system that improves corporate
value and that makes clear disclosure of our position through communication
with our stakeholders. |
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4. Progress of the Medium-Term Management Plan Announced in July 2005
(Consolidated, Million Yen)
| |
| |
FY 2005 |
FY 2006 |
| Plan* |
Performance |
Performance
vis-a-vis Plan |
Plan** |
Performance |
Performance
vis-a-vis Plan |
| Sales |
89,000 |
90,419 |
1.6% |
91,500 |
91,227 |
0.3% |
| Pharmaceutical products |
74,800 |
75,439 |
0.9% |
76,450 |
76,182 |
0.4% |
| Household products |
14,200 |
14,979 |
5.5% |
15,050 |
15,044 |
0.0% |
| Operating profit |
14,300 |
16,467 |
15.2% |
15,700 |
15,505 |
1.2% |
| Pharmaceutical products |
13,800 |
15,775 |
14.3% |
14,840 |
14,550 |
2.0% |
| Household products |
500 |
692 |
38.4% |
860 |
954 |
10.9% |
| Recurring income |
13,000 |
15,507 |
19.3% |
15,000 |
14,643 |
2.4% |
| Net income |
10,400 |
12,380 |
19.0% |
13,400 |
13,152 |
1.9% |
| ROA |
11.6% |
12.8% |
- |
11.6% |
11.1% |
- |
|
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*The figures in this column were announced in July 2005.
**The figures in this column followed the May 2006 revision of the medium-term
management plan announced in July 2005.
Sales and operating profit by segment were revised again when interim results
were announced in November 2006.
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