Terumo Corporation · TSE:4543

Terumo — FY2014 Earnings Presentation

28 slides from Terumo's earnings presentation, May 8, 2015

  1. Slide 1: Financial Results for the Fiscal Year Ending March 31, 2015 (FY2014)

    Financial Results for the Fiscal Year Ending March 31, 2015 (FY2014) Terumo Corporation Senior Executive Officer, Investor Relations, Corporate Communication Dept. Kazuaki Kitabatake May 8, 2015

  2. Slide 2: Highlights

    Highlights  Hit a record high in operating income while absorbing reimbursement price cut in Japan Corporate  Major contributing factors are 1. sales growth in Cardiac & Vascular, 2. Yen depreciation, and 3. thorough SG&A control under a new business-let management  Achieved continuous double-dig

  3. Slide 3: Hit a Record High in Operating and Ordinary Income

    Hit a Record High in Operating and Ordinary Income (billion yen) YoY% FY2013 FY2014 YoY% (Excl. FX) Net Sales 467.4 489.5 +5% +1% Gross Profit 242.0 (51.8%) 256.1 (52.3%) +6% +1% SG&A Expenses 146.6 (31.4%) 159.2 (32.5%) +9% R&D Expenses 30.1 ( 6.4%) 29.4 ( 6.0%) -3% Operating Income 65.3 (14.0%) 67

  4. Slide 4: Operating Income Variance Analysis

    Operating Income Variance Analysis 2.0 (Billion yen) 4.9 2.4 Decrease of Dura- G/P 2.5 improve- heart SG&A R&D, and Increase ment by Product influence due to mix cost of R&D sales 8.0 5.5 Improve- reduction project force ment transfer to expansion new US in US G/P 2.8 increment facility Cardiac& JP

  5. Slide 5: Background of Decrease in R&D Expenses

    Background of Decrease in R&D Expenses (Billion yen) FY13 FY14 FY15 Result Result Guidance R&D Expenses 30.1 29.4 35.0 % against sales 6.4% 6.0% 6.7%  FY2014: decrease in R&D expenses for DuraHeart due to the sales of its assets  FY13: 0.9 BJPY  FY14: 0 BJPY  FY2015 and beyond: further accelerat

  6. Slide 6: Net Sales by Region

    Net Sales by Region (Billion yen) Consolidated: +5% (+1%) FY2013 FY2014 ( ) Excluding Foreign Exchange Japan Outside of Japan 104.6 -3% +10% (+3%) Europe 96.9 +8% (+4%) 306.4 125.3 Americas 111.0 +13% (+4%) 37% 24.5 China 24.1 63% +2% (-6%) 51.9 Asia & Others 183.1 46.4 +12% (+5%) © Terumo Corporati

  7. Slide 7: Net Sales by Business Segment

    Net Sales by Business Segment (Billion yen) FY2013 FY2014 ( ) Excluding Foreign Exchange Blood Management 20% 229.2 Cardiac & Vascular Cardiac & 208.4 +10% (+4%) Vascular 47% 161.5 General Hospital General -2% (-3%) 164.1 Hospital 33% 98.9 Blood Management +4% (-1%) 94.9 © Terumo Corporation 2015/5/

  8. Slide 8: Profit by Business Segment

    Profit by Business Segment (Billion yen) YoY% FY2013 FY2014 YoY% (Excl. FX) Cardiac & Vascular 44.0 (21%) 47.5 (21%) +8% -1% Business General 20.8 (13%) 20.8 (13%) +0% -1% Profit Hospital Blood Management 18.6 (20%) 18.5 (19%) -0% -3% Others* -1.7 -1.7 - - Operating Income (Excl. amortization) 81.6

  9. Slide 9: Cardiac & Vascular: Increase in Sales and Profit

    Cardiac & Vascular: Increase in Sales and Profit (Billion yen) YoY% FY2013 FY2014 YoY% (Excl. FX) Sales 208.4 229.2 +10% +4% Business Profit (%) 44.0 (21%) 47.5 (21%) + 8% -1% <Sales>  Increase in overseas IS business and neurovascular intervention products (stent, etc.) + 17.5 BJPY  Sales of CV p

  10. Slide 10: General Hospital: Retained Profitability in Challenging Environment

    General Hospital: Retained Profitability in Challenging Environment (Billion yen) YoY% FY2013 FY2014 YoY% (Excl. FX) Sales 164.1 161.5 -2% -3% Business Profit (%) 20.8 (13%) 20.8 (13%) +0% -1% <Sales>  Japan: effects of changes in the healthcare market environment - 1.6 BJPY  Reimbursement price c

  11. Slide 11: Blood Management: Businesses in Emerging Countries and Therapeutic Apheresis Drove the Sales Growth

    Blood Management: Businesses in Emerging Countries and Therapeutic Apheresis Drove the Sales Growth (Billion yen) YoY% FY2013 FY2014 YoY% (Excl. FX) Sales 94.9 98.9 +4% -1% Business Profit (%) 18.6 (20%) 18.5 (19%) -0% -3% <Sales>  Increased sales both in whole blood collection and blood component

  12. Slide 12: New Products Launched in FY2014

    New Products Launched in FY2014 Business Product Region Business Product Region New DES EU, Latin A, Renal sympathetic Asia & (Ultimaster) ◎◎★ Asia denervation system (RSD) Latin A Coronary Ablation EU, Latin A, Asia & New PTCA balloon ◎ RSD for TRI technique Asia Latin A Central implantable venous

  13. Slide 13: Achieved FY14 Guidance: Record-high Operating and Ordinary Income

    Achieved FY14 Guidance: Record-high Operating and Ordinary Income (Billion yen) FY2014 FY2014 Guidance Result Net Sales 488.0 489.5 Operating Income 64.0 67.5 Ordinary Income 62.0 70.7 Net Income 33.5 38.5 Average Exchange Rate US$ 100 yen 110 yen EUR 140 yen 139 yen Contributing factors to increase

  14. Slide 14: FY2015 Guidance

    FY2015 Guidance US$ = 120 yen Assumed average exchange rate EUR = 130 yen (billion yen) FY2015 YoY % Guidance Net Sales 520.0 +6% Operating Income 70.0 +4% Ordinary Income 67.0 -5% Net Income 39.5 +3% Operating income: the impact of price erosion in Blood Management business is minimized by recovery

  15. Slide 15: New Product Pipeline in FY2015

    New Product Pipeline in FY2015 Business Product Region Business Product Region Disposable centrifugal pump New DES CV JP (Ultimaster) ◎◎★ JP (for PCPS) Coronary Downsized blood glucose EU, Latin DM JP New aspiration catheter meter A, Asia Blood Automated blood component Stent (above the knee) ★ US M

  16. Slide 16: FY2015 Guidance: Impact of Currency Other than US$ and EUR

    FY2015 Guidance: Impact of Currency Other than US$ and EUR FY2014 FY2015 Average exchange rate Assumed average exchange rate US$ = 110 yen → 120 yen (+ 10 yen) 9% depreciation EUR = 139 yen → 130 yen ( - 9 yen) 6% appreciation (billion yen) Net Sales Operating Income US$ +16.8 +2.0 (including goodwi

  17. Slide 17: Retain over 10% ROE, Excluding Amortization and FX Adjustment

    Retain over 10% ROE, Excluding Amortization and FX Adjustment 15% 11.4% 10.9% Influence of goodwill 10% 2.8% amortization 3.0% Increase in FX translation 0.6% 1.4% adjustment due to yen depreciation 5% 7.3% 7.2% ROE on the B/S 0% FY13 FY14 © Terumo Corporation 2015/5/8 17/28

  18. Slide 18: Reference

    Reference © Terumo Corporation 2015/5/8 18/28

  19. Slide 19: FY2014 Net Sales and Growth by Region

    FY2014 Net Sales and Growth by Region (Billion yen) Business Outside of Japan Japan G. Total Segment Subtotal Europe Americas China Asia Cardiac & 48.3 (-2%) 180.9 (6%) 65.6 (6%) 75.2 (8%) 18.9 (-8%) 21.2 (11%) 229.2 (4%) Vascular Out of C&V Interventional 36.9 (-3%) 137.6 (7%) 51.8 (7%) 51.6 (11%)

  20. Slide 20: SG&A Expenses

    SG&A Expenses (Billion yen) FY2013 FY2014 YoY YoY% Salaries & Wages 63.8 70.5 +6.7 +10% Sales Promotion 14.2 16.0 +1.8 +12% Logistical Costs 10.5 11.0 +0.5 +5% Depreciation & 22.7 25.1 +2.4 +10% Amortization Others 35.4 36.6 +1.2 +4% General 146.6 (31.4%) 159.2 (32.5%) +12.6 +9% Administrative Total

  21. Slide 21: SG&A Expenses

    SG&A Expenses (Billion yen) FY2013* FY2014 YoY YoY% General Administrative Total 154.3 159.2 +4.9 +3% R&D Expenses 31.3 29.4 -2.0 -6% SG&A Expenses Total 185.6 188.6 +3.0 +2% * Value adjusted by excluding FX impact © Terumo Corporation 2015/5/8 21/28

  22. Slide 22: Quarterly Results

    Quarterly Results (Billion yen) Q4 Q1 FY14 Q2 Q3 Q4 (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) Net Sales 122.1 114.9 118.4 129.9 126.3 Gross Profit 63.3(51.9%) 60.7 (52.8%) 62.3(52.6%) 67.8(52.2%) 65.4(51.7%) SG&A Expenses 38.6(31.6%) 37.9 (33.0%) 38.5(32.5%) 40.5(31.2%) 42.4(33.5%) R&D Expen

  23. Slide 23: Non-operating Income & Expenses, Extraordinary Gains & Losses, Income Taxes

    Non-operating Income & Expenses, Extraordinary Gains & Losses, Income Taxes (Billion yen) FY2013 FY2014 Operating Income 65.3 67.5 Non-operating Income & Expenses -1.5 +3.2 FX gain in FY2014 +6.6 Exchange rates End of Mar. 2014 End of Mar. 2015 Difference US$ 102.9 120.2 (+17.3) EUR 141.7 130.3 (-11

  24. Slide 24: CAPEX, R&D Expenses

    CAPEX, R&D Expenses (Billion yen) FY2014 FY2015 YoY Guidance Result Guidance CAPEX 42.0 41.4 (99%) 42.0 +0.6 Depreciation & Amortization * 41.0 40.7 (99%) 45.0 +4.3 R&D Expenses 31.0 29.4 (95%) 35.0 +5.6 Depreciation & Amortization: Including intangibles CAPEX: Acquisition basis (%): against guidanc

  25. Slide 25: Cash Flow

    Cash Flow Financed 100 BJPY by CB, invested 50 BJPY in short-term financial asset Despite corporate tax burden, operating CF recovered well. SB of 40 BJPY was redeemed in March, 2015. The share repurchase of 3 BJPY was conducted. Operating CF Investing and Financing CF (Billion yen) +73.1 -39.0 5

  26. Slide 26: Foreign Exchange Sensitivity

    Foreign Exchange Sensitivity FY2014 (Billion yen) US$ EUR Net Sales 1.8 0.8 Operating Income 0.3 0.4 FY2015 (Billion yen) US$ EUR Net Sales 1.8 0.7 Operating Income 0.1 0.2 © Terumo Corporation 2015/5/8 26/28

  27. Slide 27: Quarterly Average Exchange Rates Trend

    Quarterly Average Exchange Rates Trend JPY EUR 143 140 141 FY2013 138 140 FY2014 137 134 129 131 119 120 115 FY2014 US$ 102 104 FY2013 100 103 99 99 100 80 Q1 Q2 Q3 Q4 © Terumo Corporation 2015/5/8 27/28

  28. Slide 28: 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

Terumo — FY2014 Earnings Presentation on 6ix