Annual Report 2012

containers increased steadily based on our processing techniques
for plastics, metal and rubber. However, sales of pre-filled syringe
components decreased slightly.
As for medical preparation and administration related devices,
sales increased positively and we are moving forward with the
commercialization of our products by both proprietary development and
joint development with pharmaceutical companies so as to meet the
diverse needs of the market.
Furthermore, we shall continue to promote contract manufacturing
and development through cooperation with domestic and overseas
pharmaceutical companies as part of a general life cycle management
approach for pharmaceuticals, including antiseptic-free eye drop
bottles, dental devices and diagnostic devices (other than the
development of pharmaceutical combination products), systematization
of self injection at home, and modification of dosage channels such as
orally disintegrating tablets which can be taken without water.
As a result, net sales of this business increased 7.6% from the
previous fiscal year to ¥26.6 billion (US$323.5 million).
Other Business
Sales from real estate rental income decreased 37.2% from the previous
fiscal year to ¥0.3 billion (US$3.2 million).
Net Sales by Geographic Area
Japan
In Japan, net sales increased 3.5% compared with the previous fiscal
year to ¥129.2 billion (US$1,572.4 million) due to steady sales in our
Medical and Pharmaceutical businesses.
America
In America, net sales increased 9.2% compared with the previous
fiscal year to ¥40.5 billion (US$493.0 million). The major reason of the
increase was the acquisition of the glass business from Amcor, Ltd. in
July 2011.
Europe
In Europe, net sales increased 11.8% compared with the previous
fiscal year to ¥23.1 billion (US$281.5 million) due to the fine sales of
dialysis and other products and the effect of the acquisition of the glass
business from Amcor, Ltd. in July 2011.
Asia
In Asia, net sales increased 44.7% compared with the previous fiscal
year to ¥19.1 billion (US$232.6 million) due to a great expansion of
sales of dialysis- and diabetes-related products in the Asian market.
Cost of Sales
The cost of sales increased 8.3% compared with the previous fiscal
year to ¥149.3 billion (US$1,816.0 million). The increase corresponded
with the increase in net sales, however, the ratio of cost of sales to net
sales increased 0.1 percentage points compared with the previous
fiscal year to 70.4%, mainly due to the addition to the Group of Nipro
Glass India Ltd. and other glass business companies, which have a
higher cost of sales ratio.
As a result, gross profit increased 7.9% compared with the previous
fiscal year to ¥62.8 billion (US$763.6 million).
Sales, General and Administrative Expenses
Sales, general and administrative expenses increased 14.6% compared
with the previous fiscal year to ¥46.9 billion (US$571.1 million), mainly
as a result of the addition of Nipro India Corporation PVT. LTD and 9
other companies into the scope of consolidation and an increase in the
amortization of goodwill.
Operating Income
As a result of the aforementioned factors, operating income decreased
8.1% compared with the previous fiscal year to ¥15.8 billion (US$192.5
million). The ratio of operating income to net sales decreased 1.3
percentage points to 7.5%, owing to an increase in sales, general and
administrative expenses.
Operating Income by Business Segment
Medical Business
Operating income of the Medical business decreased 7.4% compared
with the previous fiscal year to ¥17.1 billion (US207.8 million), due
to the effect of the exchange rate and increases in depreciation and
amortization.
Pharmaceutical Business
Operating income of the Pharmaceutical business increased 80.1%
compared with the previous fiscal year to ¥3.0 billion (US$36.3
million), resulting from improved productivity of tablets and other newly
marketed generic drugs.
Materials Business
Operating income of the Materials business decreased 10.8%
compared with the previous fiscal year to ¥2.4 billion (US$29.3 million),
due to expenses incurred establishing a business in China.
Other Business
Operating income of Other business amounted to ¥0.2 billion (US$2.8
million), mainly from real estate rental income.
Adjustment
Unallocated corporate costs, consisting mainly of R&D-related
expenses and headquarters administration expenses, increased 21.5%
compared with the previous fiscal year to ¥6.9 billion (US$83.7 million)
mainly due to increases in experimental and research expenses.
Other Income (Expenses)
We recorded other expenses of ¥4.8 billion (US$58.4 million) compared
with other expenses of ¥9.8 billion in the previous fiscal year. In the
period under review, we recorded ¥2.0 billion (US$24.3 million) in
exchange loss, a decrease of 18.3% compared with the previous fiscal
year, while interest expenses increased 36.1% compared with the
previous fiscal year to ¥3.3 billion (US$40.2 million). The total for other
expenses decreased from the previous fiscal year, due to the ¥5.3 billion
of loss on disaster following the Great East Japan Earthquake that was
recorded in the previous fiscal year.
Income before Income Taxes and Minority Interests
As a result of the factors outlined above, income before income taxes
and minority interests increased 48.3% compared with the previous
fiscal year to ¥11.0 billion (US$134.1 million).
Income Taxes
Income taxes, including deferred taxes, increased 30.0% compared
with the previous fiscal year to ¥60.0 billion (US$73.1 million) due to
Net Income (Millions of yen) Capital Expenditures (Millions of yen) Total Assets (Millions of yen)
10,000
8,000
6,000
4,000
2,000
4,454 4,531
7,253
2,456
4,586
2008 2009 2010 2011 2012
50,000
40,000
30,000
20,000
10,000
25,900
33,142
15,209
23,323
39,525
2008 2009 2010 2011 2012
600,000
499,687
476,510
500,000
383,397
400,000 349,302
330,641
300,000
200,000
100,000
2008 2009 2010 2011 2012
Nipro Corporation Annual Report 2012 24