Sysmex Corporation (HQ: Kobe, Japan; President: Hisashi Ietsugu) has developed a new Group Mid-term Management Plan for the three-year period ending March 2010, with the aim of sustaining high and steady growth by adding momentum to the company's core businesses and pursuing business opportunities that are expected to emerge as the marketplace changes.
Now that it has achieved consolidated sales of JPY100 billion for the year ended March 2007, the company will continue pursuing its "Global Niche No. 1", "Focus on Asia", and "Focus on Life Sciences" core strategies to shoot for the next landmark consolidated sales figure of JPY200 billion in the future. The new Mid-term Management Plan maps out objectives that demand priority in accordance with these core strategies over the next three years. The company aims to achieve in the year ending March 2010, the final year of the plan, consolidated sales of JPY140 billion and consolidated ordinary profit of JPY20.5 billion.
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The global healthcare market promises growth on the back of the aging populations of advanced countries, as well as the economic development in emerging markets in Asia and Eastern Europe and ongoing shift in healthcare services from treatment to prevention, while on the other hand testing service providers are finding themselves under increasingly stringent conditions as governments attempt to curb growing medical expenses, and laboratories are being reduced to cost centers for hospitals rather than cash cows. In addition to this, the advent of new players in the market - some large companies in USA and Europe making a full-scale entry to the in vitro diagnostics field, and local players emerging in China - is changing the competitive environment. Technological innovations in the healthcare field, such as new techniques for DNA and protein analysis and a greater use of information technology, are also causing major changes in both customers and the industry itself.
In anticipation of these changes in the market, the company has taken up the unique strategies of establishing a global presence, broadening the product lineup, providing solutions that integrate software, and offering efficient after-sales support, thereby achieving consolidated sales of JPY100 billion for the year ended March 2007.
In the healthcare business expected to experience further growth, Sysmex aims to sustain high and steady growth with its new Group Mid-term Management Plan
I. Long-term Management Vision
- 1. Long-term Management Vision
- A Unique & Global Healthcare Testing Company
2. Long-term Targets
(1) Positioning- - Global No. 1 company in hematology
- - Leading company in the diagnostics field in Asia
- - Global niche company in the life science field
(2) Financial Targets- - Consolidated net sales: JPY 200 billion or higher
3. Core Strategies
(1) Global Niche No. 1- Tapping into its advantages in the hematology field, where it now enjoys the No. 1 position across the globe, the company will advance the concept of "greater hematology" by branching out into testing services in related areas including coagulation tests (horizontal development), and deepening the field through the creation of new tests for the diagnosis of hematological diseases (vertical development). The company aims to become the global No. 1 player in the urinalysis field as well.
In order to seize the new market opportunities which are being brought about by market expansion in emerging countries, as well as technological innovation and changes in the maturing markets of advanced countries, the company will take advantage of its leading position and take the initiative, thereby sustaining the future growth of its business.
(2) Focus on Asia- Being the sole global player in the diagnostics field that is based in Asia, the company will remain committed to becoming a leading company in the diagnostics field in all of Asia, including Japan.
The company will consolidate its position in Japan, China and the Asia-Pacific region by introducing new analyzers in clinical chemistry and immunochemistry, establishing a reagent supply system, and strengthening after-sales support. The company will also broaden the range of its offerings in other areas, thereby expanding its business in Asia, including Japan.
(3) Focus on Life Science- In the life science area, the company intends to establish its position as a leading company in the niche markets based upon the concept of disease management.
In the cancer diagnosis and diabetes fields, as well as other specific disease-oriented fields where R&D efforts are being made, the company will expedite its research, commercialization efforts, and programs to increase market awareness of new testing techniques, in order to bring the fruits of life science research into the market.
In the course of promoting these core strategies, Sysmex will examine the possibilities of alliances and M&As, with a view to achieving technological synergies, complementing the product lineup and reinforcing sales networks.
II. The Group Mid-term Management Plan
- 1. Targets of the Mid-term Management Plan (Consolidated)
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Results for the Year Ended March 2007 |
Targets for the Year Ending March 2010 |
CAGR |
Sales |
JPY101.0 billion |
JPY140.0 billion |
11.5% |
Ordinary Profit |
JPY13.58 billion |
JPY20.5 billion |
14.7% |
Ordinary Profit Ratio |
13.4% |
14.6% |
--- |
ROE |
13.4% |
13.6% |
--- |
Free Cash Flow |
JPY3.46 billion |
JPY10.4 billion |
--- |
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2. Sales Targets by Geographical Region -
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|
Results for the Year Ended March 2007 |
Targets for the Year Ending March 2010 |
Annual Growth Rate |
Japan |
JPY37.9 billion |
JPY46.0 billion |
6.7% |
The Americas |
JPY19.2 billion |
JPY31.5 billion |
17.9% |
Europe |
JPY31.7 billion |
JPY43.0 billion |
10.7% |
China |
JPY6.9 billion |
JPY10.5 billion |
15.3% |
Asia-Pacific |
JPY5.4 billion |
JPY9.0 billion |
18.3% |
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- 3. Key Objectives
(1) Strengthen the R&D function
- As it continues to aim at sustaining high and steady growth and enhancing its core technologies, the company will devote itself to building and expanding the R&D foundation, which includes the Sysmex Techno Park scheme. Along with this, the company will expedite development of the life science business by accelerating efforts to put its technologies into practical use and commercialize them, while at the same time driving forward the growth of the diagnostics business - one of the company's core businesses - through prompt product development and timely market launches.
During the three years ending March 2010, the company plans to spend JPY35 billion in R&D and JPY10 billion in the Techno Park scheme.
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(2) Accelerate business strategies by region
(a) Japan
- In the Japanese market, which is becoming increasingly mature as the population rapidly ages and the drive to curb medical expenses intensifies, the company will place a greater emphasis on the solution business that taps into our broad business portfolio. At the same time, the company intends to consolidate its lead in the market by making new product launches in key business fields, providing Internet-based after-sales support, and opening new business bases in the Tokyo metropolitan area.
(b) The Americas- In the United States, the company will make use of its brand awareness, which is on the rise in the upper-tier market comprising mainly large-sized hospitals, to make aggressive approaches into the commercial laboratory market and the middle- and lower-tier markets, including mid-sized hospitals and POLs (Physicians' Office Laboratories), in a bid to increase its penetration into the hematology market. More specifically, the company will take advantage of its direct sales system to focus on the IHN (Integrated Healthcare Network) and make inroads into large-sized commercial laboratories, while at the same time attempting to increase the number of installations in the middle- and lower-tier markets by promoting the sales of compact analyzers via distributors. The company will also complete a reagent factory there for a stable and efficient supply.
(c) Europe- In Europe, the company intends to establish a pan-European presence by expanding its business into both Eastern Europe and Russia. Through the introduction of its direct sales system, the company will offer advanced services in response to changes in the market, such as customized solutions made possible through direct communications with individual customers and effective and efficient after-sales support via the Internet, thereby perpetuating further growth.
Now that the expansion of a local reagent factory has been completed, the company will accordingly strengthen its reagent supply, which provides the foundations for its future business expansion.
(d) China and the Asia-Pacific Region- China and many of the countries in the Asia-Pacific region are currently experiencing market changes that are taking place in very short cycles, requiring instrument manufacturers to meet diverse demands for high-performance, high-value-added lines on the one hand, and simple lines on the other. Against this backdrop, the company intends to strengthen its position in the market by offering a wide range of product portfolio in the hematology field, promoting sales of new products in the clinical chemistry field, providing a stable supply of locally-produced, price-competitive reagents, and providing solutions that take advantage of its experiences in other global markets.
In the Asia-Pacific region, the company plans to enter into the immunochemistry market, which promises high growth potential, and will promote business expansion there by offering greater selections in other fields.
(e) Promoting alliances and examining M&As- Through alliances and M&As both at home and abroad, the company intends to pursue technological synergies, expand its product categories, and strengthen its sales networks, thereby developing its business.
(3) Promoting operational standardization and reconstructing the ERP system on a global basis- In pursuit of efficient management and high growth at both the top and bottom line of the Sysmex Group, whose business is growing through the aggressive development of its global presence, the company will standardize its operations on a global basis through closer ties between the Headquarters in Japan and each regional headquarters. At the same time, the company will reconstruct the global ERP (Enterprise Resource Planning) system, thereby ensuring that the standardized operations are firmly established and also increasing the efficiency of other operations.
(4) Environmental conservation/ Risk management- The company has established the "Sysmex Way", a new corporate philosophy for the Sysmex Group, as well as a code of conduct which is based upon it, thereby manifesting its promise to customers, employees, business partners, shareholders, and society. As part of the company's initiatives to fulfill its social responsibilities in accordance with the code of conduct, Sysmex will promote its environmental policies and strengthen risk management.
In more concrete terms, the company will promote programs which are designed to realize "zero" emissions and "green" purchasing, thereby ensuring that its products achieve environmental feasibility. In April 2007, the company established a division responsible for risk management and compliance, and has since addressed relevant issues in order of priority.
- Disclaimer
- This Mid-term Management Plan has been developed based on decisions and hypotheses from currently available data and is therefore subject to change according to future developments in major markets and the industry.
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