SYSMEX CORPORATION

  Sysmex Corporation (HQ: Kobe, Japan; President: Hisashi Ietsugu) has developed a new Group Mid-term Management Plan for the three-year period ending March 2012, with the aim of achieving sustained business growth and further enhancing profitability.
  Under this new Group Mid-term Management Plan, Sysmex will continue to pursue its "Global Niche No. 1," "Focus on Asia," and "Focus on Life Science" core strategies as it seeks to achieve its Long-term Management Vision set out in 2007. By accomplishing objectives which demand group's strategic focus over the upcoming three years, Sysmex aims to achieve its consolidated net sales of JPY 140 billion and operating income of JPY 18.5 billion in the year ending March 2012, the final year of the plan.

  The global healthcare market promises continued growth on the back of graying populations in advanced countries, and the increase in population and need to develop healthcare infrastructures in tandem with economic growth in newly-emerging countries. Meanwhile, the competitive environment is expected to become increasingly difficult, with a brisk flow of new investment in businesses and research institutions with innovative technology.

  In anticipation of these changes in the market, Sysmex has taken up the unique strategies of establishing its operations globally, providing solutions with broad range of its product portfolio, and offering efficient after-sales support. In fiscal 2007, Sysmex established a Group Corporate Philosophy, the “Sysmex Way,” in order to gain more trust from society while achieving its next level of growth. Then in fiscal 2008, upon celebration of the 40th anniversary of its foundation, Sysmex opened Technopark, a new R&D base created by an approximately twofold expansion of the former Techno Center, based on the concept of “Creation of ‘Knowledge’ and Its Inheritance,” and established a new corporate logo which expresses the renewed commitment to “challenge” and “innovation,” thereby preparing the company for the next stage of development.
  With these new infrastructures in place, Sysmex will commit itself to the realization of its Long-term Management Vision as it seeks to achieve sustained business growth and further enhance profitability by executing the 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 in-vitro 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 holds 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 in vitro 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.

1. Targets of the Mid-term Management Plan (Consolidated)

Targets for the Year Ending March 2010 Targets for the Year Ending March 2012 CAGR Net Sales JPY 116 billion JPY 140 billion 10 % Operating Income JPY 13.0 billion JPY 18.5 billion 20 % Operating Income Ratio 11.2 % 13.2 % - ROE 9.9 % 12 % - Free Cash Flow JPY 4.6 billion JPY 8.4 billion -

2. Sales Targets by Geographical Region

Targets for the Year Ending March 2010 Targets for the Year Ending March 2012 CAGR Japan JPY 37.0 billion JPY 40.0 billion 4 % The Americas JPY 25.5 billion JPY 34.5 billion 16 % Europe JPY 35.1 billion JPY 41.4 billion 9 % China JPY 11.1 billion JPY 14.6 billion 15 % Asia-Pacific JPY 7.3 billion JPY 9.5 billion 14 %

* Exchange rate for the Mid-term Management Plan

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ＵＳＤ ＥUR CNY SGD 95 125 14 65

3. Key Objectives
(1) Sustaining growth in the hematology field

  The company will consolidate its No. 1 position in the global hematology market which continues to expand as populations in advanced countries gray rapidly and populations and economic growth in newly-emerging countries expand. To this end, in addition to ensuring steady growth in the European market, the company will make aggressive efforts to increase its penetration into the North American market and establish its presence in newly-emerging markets which are expected to grow rapidly over the mid- and long-term, by way of increasing brand recognition and expanding own sales and support network there.

(2) Accelerating growth of non-hematology* fields in in-vitro diagnostics

  In order to develop the next growth driver to follow hematology, the company will strive to increase its presence in non-hematology fields in in-vitro diagnostics. In the coagulation and urinalysis fields, the company will pursue global opportunities through alliances while at the same time seeking organic growth. In Japan and other Asian countries, the company will expand its solutions business in the immunochemistry and clinical chemistry fields.

* Non-hematology: in-vitro diagnostics fields excluding hematology but including coagulation, urinalysis, immunochemistry, clinical chemistry and others.

(3) Accelerating commercialization of Life Science business

  The company will introduce its system for rapid detection of breast cancer lymph node metastasis based on the one-step nucleic acid amplification (OSNA) method, which enables automated examinations to detect breast cancer lymph node metastasis for the first time in Japan, to the United States and other key markets around the world, in addition to Japan and Europe. The company will remain committed to early commercialization of the Life Science business through expansion of the scope of its target markets and product portfolio by increasing R&D efforts to enable application of the OSNA method to other types of cancer and establish groundbreaking techniques including those for cervical cancer screening tests.

(4) Strengthening R&D

   In order to further reinforce its strength as a technology-oriented company, the company will put Technopark to full use and speed up product development lead-time.

• At Technopark (completed in 2008), the company will make R&D efforts to establish innovative testing technologies with a focus on hematological diseases, cancer, and diabetes and will speed up the R&D process by improving the product flow among others.
• The company plans to preferentially allocate approximately 10% of its consolidated net sales to R&D, thereby maximizing the competitive advantage of its R&D function.

(5) Strengthening corporate structure

  In order to strengthen its corporate structure by which to win the ever-intensifying competitions that may lie ahead, the company will accelerate its drive to reduce costs and increase operational efficiency.

• The company will reduce environmental loading by conserving resources and reducing the weight of its products. These initiatives are expected to reduce manufacturing and logistics costs as well.
• In order to tighten the business administration of the Sysmex Group as it continues to expand globally, the company will introduce a mechanism for sharing management information via the global ERP (Enterprise Resource Planning) system and strengthen the risk management structure in response to the expansion of both the scope and scale of its business.
• In order to ensure the continued development of the Sysmex Group, the company will restructure its personnel systems with a focus on human resources development, with the aim of developing personnel capable of leading changes and enhancing job satisfaction among its employees.
  

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.