Overview of financial results for the year ended March 31, 2019
I would like to express our sincere appreciation for the continuous support and understanding of our stockholders and investors.
Although the Japanese economy continued to maintain a moderate recovery as personal consumption and corporate earnings improved, the future economy continues to be unpredictable due to the trade friction issue in the U.S. and China, influence of financial, capital markets and others.
Under these circumstances, the three-year Takara Bio’s Medium-Term Management Plan FY2020 (the Plan) started in FY2018 aims to strengthen the three business segments: the Bioindustry Business, the Gene Therapy Business, and the AgriBio Business and business bases which support them to enhance standing of the Takara Bio Group (the Company) as a global industrial company for regenerative medical products, and further to achieve prodigious growth. Under this overall policy, the Company promoted initiatives to achieve the operating income of ¥6.0 billion as the target for fiscal 2020, final year of the revised Medium-Term Management Plan.
As a result, overall net sales in the fiscal year under review, ended March 31, 2019 increased 10.9% year on year to ¥35,841 million, on contributions from sales for research reagents and contracted services exceeding those of the same period of the previous fiscal year and receipt of licensing fees for co-development/exclusive sales related to NY-ESO-1・siTCR™ and CD19・CAR gene therapy products in Japan. Cost of sales increased 11.0% year on year to ¥15,155 million, and gross profit increased 10.9% year on year to ¥20,685 million. Selling, general and administrative (SG&A) expenses increased 0.8% year on year to ¥15,221 million due to the increase in personnel expenses, but the Company recorded operating income up 53.7% year on year to ¥5,463 million.
Accompanied with the increase in operating income, ordinary income increased 46.7% to ¥5,665 million, income before income taxes and others increased 43.5% year on year to ¥4,823 million, and net income attributable to owners of the parent increased 56.6% year on year to ¥3,657 million.
“Selection and Concentration” Strategy
Under the Plan, the Company engaged in the business in line with its growth strategy. Through activities based on recent progress in the business environment, it is considerably more important in creating high corporate value, with the aim of fulfilling “selection and concentration” in business operation and achieving the plan.
With this background, the Company's functional food business has been succeeded to Shionogi Healthcare Co., Ltd. with the effective date January 1, 2019.
Further, the Company's mushroom business has been transferred to Yukiguni Maitake Co., Ltd. with the effective date of March 1, 2019.
The Company aims to implement the strategies outlined in the Plan, enhance its standing as a global enterprise and regenerative medical product company, and achieve prodigious growth.
In the fiscal year ending March 31, 2020, the final year of the plan, the Company is forecasting net sales of ¥36,000 million, operating income of ¥6,200 million, ordinary income of ¥6,450 million and net income attributable to owners of the parent of ¥4,250 million.
We will strive to further enhance corporate value to meet your expectations and trust. We sincerely appreciate your continued guidance and encouragement.