Terumo Corporation · TSE:4543
Terumo — FY2018 Earnings Presentation
26 slides from Terumo's earnings presentation, May 2019
Slide 1: Financial Results for the Fiscal Year ended March 31, 2019
I will now explain concerning the Financial Results for the Fiscal Year ended March 31, 2019. 1
Slide 2: General overview of FY18 results
First, the general overview: During this fiscal year, we successfully resolved the Ashitaka factory shipping delays to achieve revenue and profit in line with the revised guidance that we issued in the 1st quarter. While the revenue growth rate was low, every company grew positively. Adjusted operat
Slide 3: FY18 results versus original guidance
Next, the FY18 results in comparison to the original guidance. As you can see, the negative variance was due to Cardiac and Vascular Company. The amount negative below original guidance was approximately the amount that guidance was later revised downward. In areas other than the Ashitaka Factory sh
Slide 4: Adjustments to adjusted operating profit
Next, an explanation of the adjustments that result in the adjusted operating profit figures. The largest adjustment item was the amortization of acquired intangible assets. Temporary gains and losses were a relatively small 900 million yen in total. They consisted of the same items that we explaine
Slide 5: Adjusted operating profit variance analysis
Next is the adjusted operating profit variance analysis. Increased revenue and improved gross margin, the two items to the left, grew as business performance improved in the 3rd and 4th quarters. Specifically, two main factors with positive impact on gross margin increased greatly in the 4th quarter
Slide 6: Revenue by region
Next, revenue by region. In Japan, General Hospital and Blood Management covered for negative impacts in Cardiac and Vascular to bring year‐on‐year revenue growth to approximately 0%. Outside Japan, the steady recovery of Cardiac and Vascular helped to overcome FX impacts and result in an increase i
Slide 7: Revenue by business segment
Next is revenue by business segment. I will get into more detail when I discuss the companies individually. The Cardiac and Vascular Company normalized following the shipping delays to show positive year‐on‐year growth. The General Hospital alliance business maintained its strong performance. In Blo
Slide 8: Cardiac and Vascular Company
In Cardiac and Vascular, the TIS business pivoted to year‐on‐year positive growth in the 4th quarter. The neurovascular business continued to achieve double‐digit growth. In adjusted operating profit, the recovery of TIS product sales resulted in a large reduction of the profit downturn, from the 3r
Slide 9: General Hospital Company
The General Hospital Company alliance business was strong, and other businesses also posted good sales. Specific products with good sales included infusion lines, pain management, and adhesion barrier. In profit, strong sales of high‐margin products absorbed the rapid increase in R&D expenses, resul
Slide 10: Blood Management Company
In Blood Management, the blood center business covered for decreased sales of therapeutic apheresis. Factors behind blood center business growth varied by region; in Japan, growth of the TACSI automated blood processing system contributed to the increase. In the Americas, next version of the automat
Slide 11: Major topics
As for major topics, please refer to the details listed here. 11
Slide 12: FY18 product pipeline
I will also skip the FY18 product pipeline. 12
Slide 13: FY19 guidance
I will now explain our FY19 guidance. Our revenue plan is to see significant growth despite yen appreciation, through TIS recovery. Our guidance is for 6% year‐on‐year revenue growth; 8% when excluding FX impact. Adjusted operating profit guidance is lower growth than revenue; I will explain this on
Slide 14: FY19 adjusted operating profit variance analysis
This is the adjusted operating profit variance analysis. A strong sales increase and improved gross margin are the two positive arrows on the left. Negative factors unique to FY19 include: The Japan reimbursement price revision scheduled for this year, which will have a 3‐billion‐yen impact; the cos
Slide 15: FY19 guidance by company
Next is our guidance by company. First, Cardiac and Vascular is expected to overcome the Japan reimbursement price revision and FX impacts to grow steadily. Excluding FX impact, both revenue and adjusted operating profit are expected to see double‐ digit growth. General Hospital revenue is expected
Slide 16: FY19 product pipeline
Next is the FY19 product pipeline; please refer to the details listed here. 16
Slide 17: Dividends
Lastly, regarding dividends: This fiscal year, we have implemented a stock split, so per‐share dividend is half of the prior amount; however, I will express the amount based on that of the previous year for ease in comparison. Last year’s dividend was 54 yen for the year; this year that is expected
Slide 18: Reference
“TERUMO Reference 18/26 18
Slide 19: FY18 Revenue and Growth by Region
FY18 Revenue and Growth by Region Outside of Japan Subtotal Europe | Americas Business Japan Segment Cardiac and 47.8 Vascular (11%) Out of C&V Interventional 35.9 eens (12%) General 127.9 Hospital (44%) Blood ms Manage- ce ) ment 188.5 G. Total ron 280.7 (+5%) 227.6 (+69) 3729 (+6%) 92.4 (+2%) 411.
Slide 20: Operating Expenses
Operating Expenses (billion yen) z VO, YoY% re (FAN) Salaries & Wages 84.4 87.4 +3.0 +4% Sales Promotion 17.8 18.2 +0.4 +2% +3% Logistical Costs 12.6 13.6 +1.0 +8% +9% Depreciation & a7 14.3 40.6 -+4% +5% Amortization Others 42.5 45.1 +2.6 +6% +7% 171.0 178.7 q SG&A Expenses Total (29.1%) (29.8%) +7
Slide 21: Quarterly Results
Quarterly Results (billion yen) FY1704 FY18Q1 Q2 Q3 Q4 (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) Revenue 150.8 143.0 142.0 158.6 15539) 7 80.7 7929) 74.7 87.6 84.3 Gross Profit (53.5%) (55.8%) (52.6%) (55.2%) (54.19) SG&A Expenses 45.9 43.5 43.5 45.0 46.7 (30.4%) (30.4%) (30.5%) (28.4%) (29.
Slide 22: CAPEX and R&D Expenses
CAPEX and R&D Expenses Amortization of acquired intangible assets and goodwill 39.1 Depreciation 45.4 33.1 33.6 Amortization of acquired intangible assets 43.6 47.0 413 (billion yen) 75.0 49.0 60.8 F CAPEX = C.i.P. record basis 47.7 50.0 @ Expanded investment in production capacity and space as well
Slide 23: FY18 Cash Flow
FY18 Cash Flow Operating CF Investment and Finance CF (billion yen) +93.6 -138.4 , Income ation and : Increase of amorti- ° sation working capital CAPEX Profit bef efore repayment ESL 167.8 hor sings, Dividends MEE tem orrowings bee Acquisitionof Qthers Essen Technology Cash at end of CAPEX = G.i.P.
Slide 24: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity Annual impact of one-yen depreciation (billion yen) eee Revenue i7 0.8 22 Adjusted Operating Profit 0.0 0.5 12 <Reference> Impact when yen is depreciated by 10% North | Latin EMEA America | America Adjusted Operating -0.1 1.0 6.5 413} 1.9 3.6 Profit ~“TERUMO 24/26 24
Slide 25: The Status of Convertible Bonds
The Status of Convertible Bonds ® Detail of the bonds (Issued in Dec. 2014 *After two-for-one stock split implemented in Apr. 2019 , Aggregate principal Conversion price Contingent Number of shares required Maturity amount conversion trigger A ; i (yen) : to be issued for conversion (billion yen) pr
Slide 26: 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