Sustainability

Progress of the Medium-term Management Policy

As part of the new mission set forth in the Seventh Medium-term Management Policy “HX2025 (Hisamitsu Transformation 2025),” the compound annual growth rate (CAGR) for the fiscal year ended February 2025 reached 8.0%, outperforming our target of 5.0% or higher. It exceeded 5.0% in the fiscal year ended February 2023, and has continued to improve steadily since then. The overseas sales ratio was 47.2%, which is below the target of 50% or higher, but it has been steadily increasing during this period. We also launched Salonpas_Ⓡ in Nigeria, Africa, and will continue working toward our targets by expanding into new markets, diversifying product lineups in the over-the-counter (OTC) business, and promoting the development of Rx drugs in the U.S. and other regions. Regarding the ROE target of 8.0% or higher, we achieved our target of 8.0% one year ahead of schedule. We will continue to make further efforts by improving our operations and fully operating our new R&D organization.

In addition, to demonstrate our commitment to value-conscious management that reflects capital costs and stock prices—as required by the Tokyo Stock Exchange—we formulated the Basic Policy on Cash Allocation in March 2025. We remain committed to managing our investment strategies in a manner that earns the trust and understanding of our stakeholders.

● Expand—“Pillars of Growth”

Regarding the global growth of Salonpas_Ⓡ, sales overseas increased 17.4% year on year, demonstrating steady progress, thanks to proactive sales promotion activities. Furthermore, FEITAS_Ⓡ and ByeBye-FEVER_Ⓡ also showed steady growth, increasing overseas sales by 346.1% and 17.3%, respectively.

Sales of OTC drugs also increased both domestically and overseas, including higher domestic sales of S-CUP_Ⓡ, which was acquired in 2023, demonstrating the effectiveness of inbound demand and sales activities.

While growth in Rx drugs was somewhat sluggish overall in Japan, domestic sales of ZICTHORU_Ⓡ Tapes, a transdermal analgesic for persistent pain, steadily increased, and sales of APOHIDE_Ⓡ Lotion, a treatment drug for primary palmar hyperhidrosis, also increased due to rising awareness of the disease. Overseas, product groups such as XELSTRYM^Ⓡ are showing steady growth.

● Exceed—“Overcome Challenges”

With regard to overseas expansion, we are strengthening our operations in both existing and newly entered markets. Furthermore, in untapped markets, we will consider expansion strategies that take into account differences in laws and regulations, culture, and lifestyles in each country and region, and through detailed responses, we will strive to achieve our target ratio of overseas sales.

Additionally, we anticipate further growth, including the introduction of new products in both Rx drugs and OTC drugs, such as further expansion of XELSTRYM^Ⓡ, leveraging Noven’s capabilities, primarily in the U.S.

● Enhance—“Strengthen Functions”

Regarding strengthening our research and development capabilities, our new research lab, the SAGA Global Research Center, is now fully operational, laying a solid foundation for the next step. Aiming to expand our global pipeline, we will promote innovation through engagement with diverse stakeholders.

Regarding our production structure, we are building a system aimed at enhancing the functions of the Tosu Factory, our mother factory, and improving our global supply capacity, including measures to encourage spontaneous improvements on-site, such as the digitalization of manufacturing processes and personnel exchanges.

Regarding our sales and marketing structure, we have converted our accumulated know-how into data and knowledge through digital transformation, and have built a system that can simultaneously establish a global system and provide more attentive local support.

We believe that these fundamental functional enhancements will ensure the achievement of the targets of HX2025.

Toward Solving Social Issues

The HX2025 period was also a time when a variety of social issues became apparent. These issues include the COVID-19 pandemic, health care system issues, intensifying weather disasters caused by climate change, and human rights issues such as inequality and discrimination. They are closely related to corporate operations, and efforts to solve these issues are becoming increasingly important.

In terms of our response to climate change, we are promoting energy management across the Group and are working to reduce greenhouse gas (GHG) emissions. For issues that are difficult to solve on our own, we are taking steps to achieve tangible results, such as participating in the Smart Energy Project at Kiyohara Industry Park, where our Utsunomiya Factory is located, and are actively joining projects in collaboration with communities and multiple other companies. In addition to addressing Scope 1 and 2 GHG emissions internally, we are also working to reduce Scope 3 emissions throughout the entire lifecycles of our products and services, from the collection of raw materials to the use and disposal of products and services, as these processes account for a large portion of our overall GHG emissions.

Furthermore, we work to understand the situation at our manufacturing sites in each country and implement more specific measures to address issues concerning risks to water resources and the conservation of biodiversity and ecosystems, which may also affect our business. For issues related to products and services, we believe it is important to take more concrete measures, such as a “HELLO! eco!” mark,* based on detailed perspectives, including packages, containers and wrappers, logistics, and disposal. Regarding plastic issues, which have been attracting attention in recent years, we will fulfill our corporate responsibility by expanding our use of recycled PET.

Not only environmental issues, but social issues are also important. In conducting business globally, we will promote initiatives that emphasize diversity, taking into account issues that may not be apparent from a domestic perspective, such as human rights issues, harmony between living and natural environments, and cultural differences. At the same time, we recognize that it is essential to build a transparent system for personnel affairs and formulate and promote a global personnel strategy.

Considering that stricter systems are being required for various issues of sustainability, we will strive to earn the trust of everyone as a corporate group that takes charge of delivering a better QOL to the world.

*A logo displayed on products that meet the eco-standards of our company.
For more information, please visit: https://global.hisamitsu/sustainability/hello-eco.html

To Our Stakeholders

In times of social uncertainty, the Hisamitsu Pharmaceutical Group’s Corporate Philosophy of “Delivering a Better QOL to the World” is becoming increasingly important. To realize this philosophy, it is essential that we sincerely engage with many stakeholders involved in our business, and above all, with each and every patient and customer who uses our products.

As a company headquartered in Tosu City, Saga Prefecture, a location rich in nature unlike large cities, we believe that there are many initiatives that Hisamitsu Pharmaceutical is uniquely able to recognize and implement. To do this, it is essential that we deepen our engagement with our stakeholders while disclosing and sharing appropriate information, thoroughly understanding the situation in various regions and from each individual’s perspective, and work together to advance our efforts.

We will continue to work hard to become a trusted partner to our stakeholders, and we appreciate your continued support and encouragement.

Kazuhide Nakatomi
President and CEO