Terumo Corporation · TSE:4543
Terumo — Q1 FY2016 Earnings Presentation
24 slides from Terumo's earnings presentation, August 2016
Slide 1: First quarter results, period ending March 2017
This is Kitabatake speaking. I will explain our earnings results for the first quarter of the period ending March 31, 2017. 1
Slide 2: Results overview
This is the results overview. I think we can summarize the first quarter results simply by saying that there was some FX impact, but when excluding that impact, the business was expanding well. Looking first at sales, we see that the FX impact resulted in minus 4.2 billion yen year‐on‐ year, but ope
Slide 3: Non-operating gains and losses
This slide shows non‐operating gains and losses, which is the area that received the most FX impact. In non‐operating non operating losses and gains gains, we had an FX loss of 5 5.5 5 billion yen yen. Because we had an FX gain of 1.8 billion yen in the same quarter last fiscal year due to yen depre
Slide 4: Operating income variance analysis
Here is the operating income variance analysis. Looking first on the far right, we see the FX impact; this was a 2.3‐billion‐yen negative impact. Compared to last year’s 400‐million‐yen positive impact, we see that this year’s yen appreciation is quite significant. In expenses, R&D expenses increase
Slide 5: Profit drivers: Ultimaster and other activities
The next slide includes some detail on these activities. One activity is expansion of sales for Cardiac and Vascular product, Ultimaster. As you can see, that expansion increased profit by 1.5 billion yen. This is the result of receiving a higher price for the product as we shift from the previous N
Slide 6: Operating income variance by company
This slide shows the operating income variance analysis by company, and it is clear that the largest contribution is from the Cardiac and Vascular company, the General Hospital company is more or less neutral, and the Blood Management company is currently struggling, as you have been aware. Next sli
Slide 7: Net sales by region
This slide shows net sales by region. First, Japan showed a 3% year‐on‐year increase. The sales growth in TIS and neurovascular business drove the increase despite negative impacts from the reimbursement price cut and increased salaries and wages resulting from the Bank of Japan’s zero‐interest poli
Slide 8: Net sales by business segment
By business segment, Cardiac and Vascular grew strongly when excluding FX impact, General Hospital was essentially flat, and Blood Management saw negative growth. As a result result, Cardiac and Vascular accounted for 51% of total sales sales. These numbers reflect better performance than we expecte
Slide 9: Cardiac and Vascular Company results
Next, I will explain results by company. First, the Cardiac & Vascular Company saw a large 6.9‐billion‐yen negative FX impact on sales In Japan, sales. Japan however however, sales grew 1 1.5 5 billion yen yen. Outside Japan Japan, when excluding FX impact, we saw 5.9‐billion‐yen increase in sales;
Slide 10: General Hospital Company results
When excluding FX impact, General Hospital was more or less flat. However, this does not mean that there is no growth, but rather reflects the downsizing of low‐profitability business in Europe and Latin America, and growth in IV catheter needle sales in Asia. In Japan, there was 600 million yen in
Slide 11: Blood Management Company results
Next is Blood Management. As we have been saying since last year, price decline on products sold to blood centers in the Americas began to take their full toll on that business starting in the fourth quarter of FY2015. The company was also heavily impacted by FX rates. This resulted in minus 14% yea
Slide 12: Major topics: bond issue and Sequent Medical
I will just cover one of the major topics listed here. We issued a 30 billion yen straight bond in April at the lowest‐ever interest rates, and then use most of those funds directly thereafter to acquire Sequent Medical, a company with new aneurysm embolization device . 12
Slide 13: FY2016 new product launch status
This slide lists our FY2016 new product pipeline launch status; these are mostly on track as expected. For example, the launch in France of Ultimaster has immediately contributed to sales.. 13
Slide 14: FX rate guidance and impact
First, regarding FX impacts. The two slides cover operating‐income and ordinary income, respectively. This slide shows our FY2016 guidance for FX rates: We planned for rates of 110 yen to the dollar, and 125 yen to the euro. At the end of last fiscal year and the beginning of this one, we explained
Slide 15: Non-operating FX losses and countermeasures
Next, FY2016 non‐operating FX losses. There was 5.5 billion yen in negative impact in the first quarter, and the currency with the most impact, was the dollar, as you can see here. What is more, the yen appreciated suddenly at the end of the quarter; because the rate for the non‐operating loss is se
Slide 16: Sequent Medical acquisition impact
Finally, regarding the Sequent Medical acquisition, as shown on the slide, the company has developed a new neurovascular aneurysm embolization device, device and we completed the acquisition in JulyJuly. When we initially announced the acquisition, we did not include the impact of the acquition with
Slide 17: Reference
~TERUMO Reference 17/24 17
Slide 18: FY16Q1 Net Sales and Growth by Region
FY16Q1 Net Sales and Growth by Region Business Japan Segment B Cardiac and 12.8 Vascular (+13%) Interventional oo Systems* (On) General 30.1 Hospital (-0%) Blood 2.5 Management (-0%) 45.5 G. Total (43%) Subtotal 50.9 (+11%) 40.9 (+13%) 8.3 (42%) 19.9 (-3%) TEMA, (+6%) utside of Ja Europe |Americas 1
Slide 19: Operating Expenses
Operating Expenses (billion yen) (Excl. FX) Salaries & Wages -5% +5% Sales Promotion 4.1 3.8 -0.3 - 6% +3% Logistical Costs 2.8 2.8 +0.0 +0% +5% Dapicaeiian & 69 6.2 0.7 -10% +0% Amortization Others 8.8 94 +0.6 +5% +13% SG&A Expenses Total 41.7 (32.5%) 40.3 (32.3%) -1.4 - 3% +6% R&D Expenses 7.9 (6.
Slide 20: Quarterly Results
Quarterly Results (billion yen) FY15Q1 Q3 a4 FY16Q1 (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) Net Sales 128.7 130.5 136.8 129.0 124.5 Gross Profit 69.0 (53.7%) 70.4 (53.9%) 75.3 (55.0%) 70.3 (54.4%) 69.8 (56.0%) SG&A Expenses 41.7 (22.5%) 42.7 (32.7%) 42.9 (31.2%) 42.8 (33.1%) A0.3 (32.3%) R
Slide 21: CAPEX and R&D Expenses
CAPEX and R&D Expenses Amortization (billion Yen) of Intangibles 46.6 and Goodwill 44.7 44.0 414 40.7 39.0 = CAPEX was peaked 315 out in FY2013 18.5 MCAPEX is projected 10.7 to be at the same 61 level as depreciation ‘ and amortization CAPEX: CIP basis CAPEX “Depreciation 35.5 33.1 30.1 29.4 ® Furth
Slide 22: Cash Flow
Cash Flow Operating CF Investing and Financing CF a +10.4 +6.9 (billion yen) Corpo- CAPEX Depreci- rate Tax ation & Amorti- zation Increase _ Issuance of Others in Straight Bond Working Capital Income 167.0* before 149.7 Tax of Mar. 2016 ~TERUMO of Jun. 2016 22/24 Cash at end * Cash at end of fiscal
Slide 23: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity —S yen) EUR Excl. Amortization | Incl. Amortization Net Sales 14 0.5 Operating Income 0.0 -0.2 0.3 ~TERUMO 23/24 23
Slide 24: 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