Terumo Corporation · TSE:4543
Terumo — Q1 FY2018 Earnings Presentation
23 slides from Terumo's earnings presentation, Aug 8, 2018
Slide 1: Financial Results for the First Quarter of Fiscal Year Ending March 31, 2019 (FY2018)
Financial Results for the First Quarter of Fiscal Year Ending March 31, 2019 (FY2018) Terumo Corporation Managing Executive Officer, Kazuaki Kitabatake August 8, 2018
Slide 2: In Line with the Guidance on the Whole
In Line with the Guidance on the Whole (billion yen) (億円) YoY% FY17 Q1 FY18 Q1 YoY% (FXN) Revenue 139.3 143.0 +3% +2% Gross Profit 75.9 (54.5%) 79.9 (55.8%) +5% +4% SG&A Expenses 40.2 (28.9%) 43.5 (30.4%) +8% +8% R&D Expenses 8.5 ( 6.1%) 11.3 ( 7.9%) +33% +34% Other Income and Expenses 1.2 0.8 ‐ ‐ O
Slide 3: Adjusted Operating Profit: Adjustments
Adjusted Operating Profit: Adjustments Operating profit in IFRS basis w/ following items adjusted 1. Amortization of acquired intangible assets 2. Acquisition‐related costs and temporary gain or loss falling into non‐operating, and extraordinary income and expenses in JGAAP basis (billion yen) FY17
Slide 4: Adjusted Operating Profit Variance Analysis (IFRS)
Adjusted Operating Profit Variance Analysis (IFRS) 1.4 1.9 (billion yen) Gross margin Price improve‐ erosion 3.1 2.5 0.4 ment JPN Reimburse‐ G/P ment Increase of 3.6 increment 1.0 SG&A 2.5 0.8 by sales 0.3 4.7 increase FX Increase Others 32.1 of R&D 30.5 28.4 25.9 FY17 Q1 FY17 Q1 FY18 Q1 FY18 Q1 Ope
Slide 5: Revenue by Region
Revenue by Region FY18 Q1 FY17 Q1 Revenue Year‐on‐Year Revenue Comparison 100% = 143.0BJPY billion yen YoY% Comments ( ) FXN Ended up having slightly negative growth in overall revenue although growth in General Hospital Company and Blood Management 44.0 Company covered the negative one in Japan ‐2%
Slide 6: Revenue by Business Segment
Revenue by Business Segment FY18 Q1 FY17 Q1 Revenue Year‐on‐Year Revenue Comparison 100% = 143.0BJPY billion yen YoY% Comments ( ) FXN Overseas growth covered the negative Cardiac 79.5 one in JPN, which suffers JPN reimburse‐ +1% ment price cut and shipping delay, 56% and (0%) 79.1 achieving slightl
Slide 7: Cardiac and Vascular: Decrease in Profit in Line with FY18 1H Guidance
Cardiac and Vascular : Decrease in Profit in Line with FY18 1H Guidance (billion yen) FY17Q1 FY18Q1 YoY% Major Topics Impact ( ) FXN 79.1 79.5 TIS: Impact of JPN reimbursement price cut and shipping delay. Sales for therapeutic devices in Cardiology declined ‐1.0 +1% Neurovascular: Achieved double d
Slide 8: General Hospital: Achieved Stable Growth in Profit while Maintaining Profitability
General : Achieved Stable Growth in Profit while Hospital Maintaining Profitability (billion yen) FY17Q1 FY18Q1 YoY% Major Topics Impact ( ) FXN General hospital products: Infusion system drove growth in JPN. Outside JPN, infusion pump showed steady growth in Asia +0.5 36.9 38.8 +5% Pharmaceutical a
Slide 9: Blood Management: Revenue Grew Steadily despite Decreased Profit Due to Increased R&D Expenses
Blood : Revenue Grew Steadily despite Decreased Profit Management Due to Increased R&D Expenses (billion yen) FY17Q1 FY18Q1 YoY% Major Topics Impact ( ) FXN Blood center products: US made stable growth. +5% Achieved double digit growth in emerging Revenue 23.3 24.6 (+5%) countries such as ones in La
Slide 10: Major Topics in FY18 Q1
Major Topics in FY18 Q1 Corporate Terumo joined “IkuBoss Alliance”, promoting diversified workstyle (Jun) Launched “VeinViewer” portable vascular access imaging device (Apr) Launched “RelayPro” TAA stent graft in EU (Apr) Acquired CE marking for “Ultumaster Tansei” the drug eluting stent followe
Slide 11: New Products Pipeline in FY18
New Products Pipeline in FY18 Category Products Region Category Products Region Closure device for distal Access radial approach JP Next generation of oxygenator ◎ JP, US CV Next generation of blood PTCA balloon US EU, US, Asia parameter monitoring system Coronary PTCA balloon JP, EU, Asia Vascular
Slide 12: Status of Shipping Delays from Ashitaka Factory
Status of Shipping Delays from Ashitaka Factory Background Discovered that there were challenges in the procedure that optimizes the sterilization process => Shipments of certain products from this factory were placed on hold in late May Gradually resumed shipment form June onwards, yet found it
Slide 13: Revision of FY18 Guidance
Revision of FY18 Guidance Key points of revision 1H: Revised due to the impact of shipping delays from Ashitaka factory 2H: In line with the current guidance in FY18 2H (No change) Average exchange rate from Q2 onwards USD=105 yen, EUR=130 yen (billion yen) <FY18 1H> Revenue Adjusted Operating
Slide 14: Pursue Regional Strategy in China
Pursue Regional Strategy in China Acquisition of Essen Technology Co., Ltd. (announced in July 24) “Tivoli” drug eluting stent for Chinese market Upfront payment of 14.0 BJPY + milestone payment, to be funded from cash on hand Enter Chinese DES market, which will become the world largest, w/ Chin
Slide 15: Reference
Reference <“TERUMO 15/23
Slide 16: FY18 Q1 Revenue and Growth by Region
FY18 Q1 Revenue and Growth by Region (billion yen) Business Outside of Japan Japan G. Total Segment Subtotal Europe Americas China Asia Cardiac and 11.3 68.2 21.3 30.4 9.0 7.5 79.5 Vascular (‐16%) (+3%) (+2%) (+7%) (+3%) (‐5%) (0%) Out of C&V Interventional 8.4 55.3 17.1 23.5 8.4 6.3 63.7 (‐18%) (+3
Slide 17: Operating Expenses
Operating Expenses (billion yen) FY17 Q1 FY18 Q1 YoY YoY% YoY% (FXN) Salaries & Wages 20.0 21.7 +1.7 +8% +8% Sales Promotion 4.1 4.5 +0.4 +9% +8% Logistical Costs 3.0 3.2 +0.2 +9% +9% Depreciation & 3.4 3.4 +0.0 +0% +1% Amortization Others 9.7 10.7 +1.0 +11% +10% SG&A Expenses Total 40.2 43.5 +3.3 +
Slide 18: Quarterly Results
Quarterly Results (billion yen) FY17 Q1 Q2 Q3 Q4 FY18 Q1 (Apr‐Jun) (Jul‐Sep) (Oct‐Dec) (Jan‐Mar) (Apr‐Jun) Revenue 139.3 145.3 152.3 150.8 143.0 Gross Profit 75.9 79.5 83.2 80.7 79.9 (54.5%) (54.7%) (54.6%) (53.5%) (55.8%) SG&A Expenses 40.2 41.2 43.8 45.9 43.5 (28.9%) (28.4%) (28.7%) (30.4%) (30.4%
Slide 19: CAPEX and R&D Expenses
CAPEX and R&D Expenses Amortization (billion yen) Expand investment in Amortization of acquired 60.0 of Intangibles intangible production capacity and and Goodwill assets space as well as IT 44.7 45.4 43.6 42.0 infrastructure in FY18 43.0 39.1 IFRS basis from FY17 31.5 Include intangible 14.0 1
Slide 20: Cash Flow
Cash Flow Operating CF Investment and Finance CF (billion yen) +12.5 ‐17.4 10.6 13.5 Depreci‐ ation and Income amorti‐ taxes 8.0 zation 23.4 Increase of working 11.2 capital Profit CAPEX before 9.5 Others 167.8 tax 3.3 162.9 Dividends Cash at end of CAPEX = C.i.P. record basis Cash at end of FY17 Ca
Slide 21: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity (billion yen) USD EUR CNY Revenue 1.6 0.8 2.0 Adjusted Operating 0.0 0.5 1.0 Profit <Reference> Impact of +/‐10% fluctuation North Latin EMEA Asia America America EUR Others CNY Others Adjusted Operating ‐0.1 0.9 6.0 1.3 1.7 3.3 Profit 21/23
Slide 22: The Status of Convertible Bonds
The Status of Convertible Bonds Detail of the bonds (Issued in Dec, 2014) Aggregate principal Contingent Conversion price Number of shares required Maturity amount Coupon conversion trigger (yen) to be issued for conversion (billion yen) price (yen) Dec, 2019 50.0 0.0% 3,853 5,009 12.9M shares Dec
Slide 23: IR Contact
IR Contact Terumo Corporation Corporate Communication (IR) Dept. E‐mail: [email protected] Among the information that Terumo discloses, the forward‐looking statements including financial projections are based upon our assumptions using information available to us at the time and are not i