Interviews with Listed Companies Regarding English Disclosure
SYSMEX CORPORATION
SYSMEX CORPORATION (Hereinafter Sysmex) operates in more than 190 countries and regions around the world, with laboratory testing at the core of its business. In 2007, Sysmex developed the “Sysmex Way,” a group corporate philosophy that expands on the “Three Aspects of Confidence,” the company’s founding philosophy from 1968 to provide confidence to customers, business partners, and employees, and to expand the scope of confidence to shareholders, society, and other stakeholders. Sysmex believes that the disclosure of corporate information is linked to providing confidence to stakeholders in Japan and overseas, regardless of whether they are investors or not, and they continue to display commitment to disclosure and promote higher-quality English disclosure.
Yamamoto Akiko and Inoue Yukari of the company’s Investor Relations Department are at the forefront of this effort. We sat down with them to discuss the company’s English-language disclosure system and future plans.
Providing Basic Information in Annual Reports Used by Overseas Investors
Tell us about Sysmex’ system for English Disclosure.
Inoue: We outsource our English translations when preparing documents in English, as we believe it is better to have a translator who understands detailed nuances handle the work. However, we share our glossary of terms with the outsourced company and ask them to match the expressions with those used in previously published documents. Our in-house IR team checks the translated materials to ensure that they properly convey what we wanted to convey and that there are no discrepancies in wording with past disclosures.
Besides the IR team, we have a PR team who also checks the content, so at least three pairs of eyes are involved. In cases where revisions cannot be outsourced, such as those that occur suddenly, we also utilize an in-house AI translation system.
What is your time frame for preparing documents in English?
Yamamoto: We simultaneously disclose three types of documents related to financial results in Japanese and English: presentation materials for financial results briefings, earnings reports, and financial data that outlines performance figures. Financial data is prepared in both Japanese and English, and we have created a template that only requires updating of figures. Presentation materials are outsourced due to the large volume of information, and we make three separate translation requests one week prior to the presentation. Four days before the presentation, when the general outline has been finalized, we request translations of the finalized parts. The remainder is then requested by two days before the presentation. As a result, an English translation of the entire document is received the day before the presentation, and the department checks for consistency, makes revisions, and then discloses the information.
Annual securities reports tend to be text-heavy, how do you go about preparing the English version of these?
Yamamoto: We do not prepare English translations of the Annual Securities Report itself because the financial information is covered in the English version of the financial report. Also, qualitative information etc., which makes up the first half, is contained in the Annual Report (currently published as the Integrated Report), and the other elements are covered in the Corporate Governance Report.
Inoue: We believe that our integrated report is the first resource overseas investors use in analyzing our company, and it covers the basic information necessary for that analysis. On the other hand, we believe that in the future it will be necessary to comply with the ISSB (International Sustainability Standards Board) sustainability disclosure standards in our Annual Securities Report, and we are considering preparing disclosure texts in Japanese and English to cover this information in our integrated reports as well.
In Addition to the Short-Term, Sysmex Provides a Clear Explanation of Medium- and Long-Term Growth Drivers.
Since when have you been conscious of the importance of overseas IR?
Inoue: Our first overseas expansion was shortly after our founding in 1968, when we created a representative office in Germany in 1972. We have been conscious of overseas investors since the mid-1990s, when we went public (we were listed on OSE in 1995 and TSE in 1996). For example, we have been preparing annual reports in English since the late 1990s. Taking into account the fact that annual reports had already been common overseas since that time, we published our annual report as an alternative to the Annual Securities Report, ahead of the Japanese version. The annual report is used not only for shareholders, but also for the purpose of providing information to our overseas employees and business partners.
Is there anything you have changed or improved recently about your approach to English disclosure?
Yamamoto: In previous earnings announcements, we mainly disclosed numerical information and quarterly highlights, but investors requested that we include information on growth drivers, so we added long-term perspectives to our presentations. We are also conscious of the need to enhance our integrated report (annual reports). For example, there were areas where materiality was not linked to long-term and medium-term management strategies, but we have recently reviewed our internal strategies and disclosed ESG information etc. and incorporated it into our growth strategies.
What kind of overseas investors are you targeting?
Yamamoto: When it comes to IR, we look for investors with a perspective similar to that of our management, who have a medium- to long-term perspective and will support the growth of our company regardless of whether they are domestic or from overseas.
I understand that you meet with many overseas investors. Do you feel any differences between overseas and domestic investors in terms of understanding your company?
Inoue: I can’t say the difference in understanding, but I think analysts and investors specializing in healthcare, whether domestic or international, will feel easier to understand our company. While there are various field In Vetro Diagnositc (IVD) that we focus on, we have built an overwhelming global market share in the field of hematology (blood cell count testing). I believe this is the reason why we have received many requests for dialogue from overseas investors. We also make every effort to provide materials and explanations that are easy to understand even for those who are not familiar with healthcare, such as supplemental explanations of our business model, technical terms and explanations of what can be learned from IVD using our products and services.
The Importance of Management-Level Understanding for Promoting Overseas IR.
What are your IR goals and what are your strategies for achieving those goals?
Inoue: When it comes to IR, we believe it is first important to disclose information appropriately so that investors can hold our shares with confidence, and secondly to provide feedback from the market within the company to enhance corporate value. With this in mind, we are particularly focused on attracting and retaining investors who have a medium- to long-term perspective. We consider the number of medium- to long-term investors and the length of time they have been holding stocks as one indicator, and we actively conduct interviews with them. Although more is not necessarily better, we also monitor the number of interviews with investors as a KPI for IR.
Yamamoto: Our IR work was previously focused mainly on Japan, Europe, and the U.S. Recently, however, the inflow of funds from Asia has been increasing, and so has our dialogue with Asian investors. We intend to continue our IR across many regions based on world trends.
What are your plans for future improvements, if any?
Inoue: We would like to accelerate the disclosure of each type of document in English. For example, we are using SCRIPTS Asia to transcribe IR events such as financial results briefings, and have been able to disclose English scripts and Q&As, but we would like to further improve our efforts to avoid time lags.
Yamamoto: Whether outsourced or in-house, there is a limit to how fast people can work, so we would like to make improvements from different perspectives, such as by utilizing translation tools.
TSE has announced a policy of mandatory English disclosure for Prime Market listed companies. Do you have any advice for companies that are looking to start full-scale English disclosure?
Inoue: Our company is also experimenting with trial and error. Recently, there are convenient tools such as AI and translation tools, so I think it is a good idea to make good use of them to help with efficiency. Access to overseas investors is essential to obtaining medium- to long-term investment. If you can share this perspective with management and have them back you up, you will be able to proceed smoothly with the development of a system for disclosure.
Yamamoto: When it comes to mandatory English disclosure, cost-consciousness will take precedence. If you think about how you can utilize English disclosure to generate benefits, it will be easier for your company to invest in improving its IR system, and you will be able to verify whether or not it has actually been effective.
(Interview on December 25, 2023)
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