Financial Highlights

Financial Highlights

millions of yen
  FY2014 FY2015 FY2016 FY2017 FY2018
Net sales 273,991 309,973 338,890 344,667 363,721
Operating income 50,365 91,406 108,178 115,219 138,537
Ordinary income 77,880 100,869 123,031 138,692 166,575
Profit attributable to owners of parent 44,060 66,687 83,879 108,866 132,759

Performance in fiscal 2018

Sustained growth in sales and profits

● Net sales: ¥363.7 billion, for fourth consecutive year of growth

⇒ In fiscal 2018, growth in royalty income and milestone revenues outweighed a decrease in domestic sales of prescription pharmaceuticals, causing net sales to rise for the fourth time in as many years

● Record-high operating income (fourth consecutive year), ordinary income (seventh consecutive year), and profit attributable to owners of parent (third consecutive year)

Net sales
Operating income
Ordinary income
Profit attributable to owners of the parent
The Company changed its accounting policy for research and development expenses effective April 1, 2014. For the year ending March 31, 2014, operating income, ordinary income and net income are calculated using the restated figures. 

Growth in royalty income

● Royalty income continued to grow (rising 20.3% year on year) on the back of a steady increase in global sales of HIV franchise products

● Dividend income also grew, underpinned by favorable earnings at ViiV Healthcare’s global HIV business

● Shionogi received milestone payments from Roche in connection with progress in global development and approval in the US for the flu drug Xofluza

Royalty income and dividend income from ViiV Healthcare

ROE, ROIC, and CCC

● ROE (return on equity) and ROIC (return on invested capital): Steady improvement

⇒ ROE in particular surpassed 20% for the first time

● CCC (cash conversion cycle): Had been decreasing steadily as a result of initiatives to improve conversion periods for receivables and payables and to keep inventories at optimal levels, but recent rapid changes in the product mix saw the CCC extend by 2.7 months to 8.9 months

⇒ Higher sales of new products with a comparatively low cost of sales combined with decreased sales of Crestor and the Irbetan franchise, which have a high cost of sales, to extend the inventory turnover period and CCC. Based on this change in the product mix, the CCC target for fiscal 2020 was changed from 5.5 months previously to 7.0 months. With cooperation from manufacturing subsidiary Shionogi Pharma Co., Ltd., established in April 2019, the Group is working as one to control inventories and shorten the CCC.

Return on Equity (ROE)
ROIC
CCC

* Return on equity: Profit attributable to owners of parent ÷ (Shareholders’ equity + accumulated other comprehensive income) × 100 (%)

* Return on invested capital: After-tax operating income ÷ (Interest bearing debt + Shareholders’ equity + Non-controlling interests) × 100 (%)

* Cash conversion cycle: The number of days between investing cash (for raw materials, product purchases, etc.) and the time when that is ultimately converted into cash again. (This indicator is used for capital efficiency.)

Working hard to ensure that shareholders also can experience growth

● Continuous dividend increases

● Flexible share buybacks and retirement of treasury stock

Dividends per share
Treasury stocks

11-year summary

  The Second Medium-Term Business Plan

“Accelerating toward significant strides”

Reinforced R&D and enhanced global operating structure

■ Focused on priority therapeutic areas (infectious diseases, pain and metabolic diseases)

■ Acquired US-based company Sciele Pharma, Inc.

2009 2010
For the years ended March 31: Millions of yen
Net sales ¥227,512 ¥278,503
Cost of sales 70,929 76,264
Selling, general and administrative expenses 124,568 149,801
Operating income 32,015 52,438
Profit before income taxes 30,786 58,541
Profit attributable to owners of parent 15,661 38,626
Net cash provided by operating activities 29,120 52,902
Net cash used in investing activities (149,056) (826)
Net cash used in financing activities 105,294 (4,979)
Research and development expenses 52,822 51,808
Capital investments 10,875 12,547
Depreciation and amortization 13,468 18,048
As of March 31: Millions of yen
Property, plant and equipment, net ¥ 71,812 ¥ 62,448
Total assets 501,853 540,762
Total long-term liabilities 114,955 131,956
Total net assets 310,094 341,976
Per share amounts: Yen
Profit attributable to owners of parent ¥ 46.75 ¥ 115.33
Net assets 924.43 1,019.71
Dividend 28 36
Other: %
Equity ratio 61.7 63.2
Return on equity [ROE] 4.8 11.9
Payout ratio 59.9 31.2
  Third Medium-Term Business Plan

“SONG for the Real Growth”

Progress toward global growth

■ Launched Osphena in US

■ Increased sales of eight strategic products in Japan

2011 2012 2013 2014
For the years ended March 31: Millions of yen
Net sales ¥282,350 ¥267,275 ¥282,904 ¥289,717
Cost of sales 81,737 77,753 78,575 77,993
Selling, general and administrative expenses 153,721 142,519 144,764 149,849
Operating income 46,892 47,003 59,565 61,875
Profit before income taxes 33,135 41,495 58,307 63,188
Profit attributable to owners of parent 20,027 27,102 66,728 40,618
Net cash provided by operating activities 56,528 54,724 59,276 79,496
Net cash used in investing activities (13,947) (38,290) (19,960) (20,040)
Net cash used in financing activities (27,011) (27,749) (37,687) (53,799)
Research and development expenses 50,921 53,599 53,021 53,606
Capital investments 17,967 13,233 11,447 8,962
Depreciation and amortization 17,966 16,282 11,912 12,913
As of March 31: Millions of yen
Property, plant and equipment, net ¥ 70,221 ¥ 74,282 ¥78,474 ¥78,977
Total assets 523,242 522,162 574,882 580,566
Total long-term liabilities 115,326 92,900 53,042 33,721
Total net assets 328,096 347,198 423,633 467,836
Per share amounts: Yen
Profit attributable to owners of parent ¥ 59.80 ¥ 80.93 ¥199.25 ¥121.29
Net assets 979.69 1,027.83 1,254.44 1,385.11
Dividend 40 40 42 46
Other: %
Equity ratio 62.7 65.9 73.1 79.9
Return on equity [ROE] 6.0 8.1 17.5 9.2
Payout ratio 66.9 49.4 21.1 37.9
  New Medium-Term Business Plan

Shionogi Growth Strategy 2020 (SGS2020)

Aim to grow as a drug discovery-based pharmaceutical company

■ Identify and channel resources into strategic sales areas and therapeutic areas

■ Growth led by FIC and LIC compounds

■ Continued improvement of business operations

2015 2016 2017 2018 2019 2019
For the years ended March 31: Millions of yen Thousands of U.S. dollars
Net sales ¥273,991 ¥309,973 ¥338,890 ¥344,667 ¥363,722 $3,276,775
Cost of sales 82,190 74,758 77,777 73,911 54,881 494,424
Selling, general and administrative expenses 141,437 143,809 152,935 155,537 170,303 1,534,261
Operating income 50,364 91,406 108,178 115,219 138,538 1,248,090
Profit before income taxes 82,052 97,453 122,695 137,378 170,343 1,534,622
Profit attributable to owners of parent 44,060 66,687 83,880 108,867 132,759 1,196,027
Net cash provided by operating activities 45,604 102,290 111,903 129,790 145,685 1,312,477
Net cash used in investing activities (31,697) (32,895) (31,644) (51,238) (36,350) (327,477)
Net cash used in financing activities (46,211) (18,525) (57,411) (53,894) (87,012) (783,892)
Research and development expenses 48,870 49,788 59,908 59,946 68,325 615,541
Capital investments 8,163 9,943 9,659 5,678 7,900 71,171
Depreciation and amortization 12,673 12,579 13,363 15,973 16,479 148,459
As of March 31: Millions of yen Thousands of U.S. dollars
Property, plant and equipment, net ¥77,023 ¥78,674 ¥78,788 ¥75,957 ¥74,653 $672,550
Total assets 595,067 631,600 661,499 711,464 778,741 7,015,685
Total long-term liabilities 48,427 45,740 44,692 34,057 17,204 154,991
Total net assets 478,883 513,877 526,212 604,841 672,430 6,057,928
Per share amounts: Yen U.S. dollars
Profit attributable to owners of parent ¥132.67 ¥204.83 ¥259.88 ¥342.71 ¥424.31 $3.82
Net assets 1,456.70 1,564.73 1,638.46 1,911.36 2,144.33 19.32
Dividend 52 62 72 82 94 0.85
Other: %  
Equity ratio 79.7 80.7 79.0 84.5 85.7
Return on equity [ROE] 9.4 13.6 16.3 19.4 20.9
Payout ratio 39.2 30.3 27.7 23.9 22.2
Notes: 
  1. 1
    U.S. dollar figures have been calculated, for convenience only, at the rate of ¥111.00 = U.S. $1.00, the approximate rate of exchange on March 31, 2019.
  2. 2
    From the fiscal year ended March 31, 2015, the Company has adopted a new accounting standard for research and development expenses (business research expenses). This change has been reflected in figures for the fiscal year ended March 31, 2014.
  3. 3
    From the fiscal year ended March 31, 2019, the Company has adopted a new accounting method for tax effect accounting. The change has been reflected in figures for the fiscal year ended March 31, 2015, and subsequent periods.