Terumo Corporation · TSE:4543
Terumo — Q1 FY2014 Earnings Presentation
23 slides from Terumo's earnings presentation, Aug 6, 2014
Slide 1: Overview of first quarter results, fiscal year ending March 2015
I will give an overview of the results for the first quarter of the fiscal year ending March 2015.
Slide 2: Highlights
I will first explain some of the highlights. The group as a whole achieved increased sales and profit despite the impact of the Japanese reimbursement price cut. Operating income grew 21% compared to the previous year, hitting double‐digits even when excluding the impact of currency exchange rates.
Slide 3: Overview of the results
I‘ll now give an overview of the results. The average currency exchange rates during the period were 102 yen to the US dollar, and 140 yen to the euro. The yen was 3 yen weaker against the dollar, and 11 yen weaker against the euro in the same quarter of the previous year. With this tailwind of weak
Slide 4: Operating income variance analysis
Now I will explain operating income variance analysis. Operating income in the 1st quarter of fiscal 2014 experienced positive currency exchange impact, and there was an improvement to gross profit due to expanded sales. Increased production efficiency and lowered costs further contributed, and with
Slide 5: Sales by region
I will next explain sales by region. This graph shows sales and growth rate by region. The percentage shown in parentheses is the growth rate excluding currency exchange. Domestically, the reimbursement price cut resulted in a 5% decrease. Overseas, Cardiac & Vascular led the way in expanding sales
Slide 6: Sales by company
Next I will explain sales by company. Cardiac & Vascular and Blood Management, which both have a high percentage of overseas sales, achieved 9% and 4% growth, respectively. The percentages in parentheses denote growth rate excluding currency exchange. 6
Slide 7: Profit by segment
This slide explains profit by segment. The company profits shown exclude amortization of goodwill and intangible assets occurring from the BCT acquisition. Of the three segments, Cardiac & Vascular and Blood Management saw increased profits, while General Hospital profit decreased. I'll next explain
Slide 8: Cardiac & Vascular company
First, the Cardiac & Vascular company. With sales of 54.5 billion yen, Cardiac & Vascular used overseas growth to overcome the impact of the Japanese reimbursement price cut and achieve 9% growth, or 5% growth excluding currency exchange. Segment profit grew 23% to 11.4 billion yen, or 8% growth exc
Slide 9: General Hospital
Next, General Hospital. Sales were 38 billion yen; a decrease of 4%. Segment profit dropped 4% to 4.6 billion yen, or minus 2% excluding currency exchange. Segment profitability remained 12%. The dip in sales following the recoil reduction in demand after the consumption tax increase resulted in 500
Slide 10: Blood Management Company
Next, Blood Management Company. Blood Management sales grew 4% to 22.4 billion yen, or 1% growth excluding currency exchange. Segment profit grew 3% to 4.2 billion yen, or 1% growth excluding currency exchange. The segment maintained at 19% profitability. Falling prices in Europe and the United Stat
Slide 11: Status of new products
I will now explain the status of new products. These are the new products that were launched in first quarter. In addition to the drug‐eluting stent, Ultimaster, the products shown here were launched as scheduled, including those that were not previously listed in the mid‐term plan. 11
Slide 12: Upcoming launches and closing
Here is the final slide. In the second quarter and beyond, we plan set the stage for further growth through enhancement of our pipeline by adding to previously announced products the launch of a new carotid stent in the neurovascular business. This concludes my explanation of the first quarter resul
Slide 13: Reference
@TERUMO Reference 13
Slide 14: Q1 Net Sales and Growth by Region
Q1 Net Sales and Growth by Region (Billion yen) Outside of Japan [ Total Business Segment \si Europe | Americas China ‘i P Others Cardiac & 1.8 42 48 Vascular (-3%) (7%) ~~ (6%) (9%) (4%) (14%) Out of C&V 2 91 Sihy/ 12.9 11.2 3.9 Sire gh (4%) (7%) -—=(7%)-—=(14%) (3%) (9%) General 28.9 9.1 SA 47, 0.
Slide 15: SG&A Expenses
SG&A Expenses (Billion yen) Salaries & Wages 15.4 16.9 HAS +10% Sales Promotion Bi 3.7 +0.0 +1% Logistical Costs Path PAU, +0.0 +1% Depreciation & Rae 5.3 5.9 +0.6 +11% Others 9.0 8.7 -0.3 -3% General 9 9 Administrative Total SOx1 52476) 37.9 (33.0%) +18 +5% R&D Expenses 7.6 (6.9%) 6.7 (6.8%) -0.9 -
Slide 16: SG&A Expenses
SG&A Expenses (Billion yen) General Administrative Waal 7.9 0.8 +2% Total R&D Expenses 7.8 6.7 -1.1 -14% SG&A Expenses 40 Total 44.8 44.6 -0.3 1% * Value adjusted by excluding FX impact @TERUMO 2014/8/6 __ ©Terumo Corporation 16/23 16
Slide 17: Quarterly Results
Quarterly Results Q1 FY13 Q2 Q3 Q4 (Apr-Jun) (Jul-Sep) (Oct-Dec) | (Jan-Mar) Net Sales 111.1 114.9 Gross 57.0 60.1 Profit (51.3%) (52.3%) SG&A 43.7 43.0 Expenses (39.3%) (37.4%) Operating das TAS Income (12.0%) (14.9%) Average USD 99 yen 99 yen Exchange Rate EUR 129 yen 131 yen @TERUMO’ 119.2 61.5 (
Slide 18: Profit Ratio, SG&A Expenses Ratio
Profit Ratio, SG&A Expenses Ratio (%) 523 1. 5 Gross 51.3 51.6 S19 548 Margin SG&A rs 374 367 37.9 38.8 Expenses 4 Ratio 14.9 14.9 14.0 14.0 2 ee Margin Q1 Q2 Q3 Q4 Q1 FY13 FY14 @TERUMO 2014/8/6 ©Terumo Corporation 18/23 18
Slide 19: CAPEX, R&D Expenses
CAPEX, R&D Expenses (Billion yen) FY2014 Q1 Progress to Guidance Result guidance CAPEX 42.0 9:2 22% Depreciation & ° APAGHiSaHON 41.0 9.7 24% R&D Expenses 31.0 6.7 22% Depreciation & Amortization: Including intangibles CAPEX: Acquisition basis @TERUMO 2014/8/6 ©Terumo Corporation 19/23 19
Slide 20: Cash Flow
Cash Flow Large impact of corporate tax payment in Q1 Operating CF Investing and Financing CF (Billion yen) -0.5 -10.1 85.0 _@ Cash at end Cash at end of FY2013 of Q1 FY2014 @TERUMO 2014/8/6 ©Terumo Corporation 20/23
Slide 21: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity (Billion yen/year) Net Sales 1.8 0.7 Operating lnceme 0.3 0.4 @TERUMO’ 2014/8/6 _ ©Terumo Corporation 21/23 21
Slide 22: Quarterly Average Exchange Rates Trend
Quarterly Average Exchange Rates Trend JPY 140 140 ‘A EUR (FY2014) ----- -_—— 131 120 128 102 USD (FY2014) 100 & ——— 4----- 99 99 80 Q1 Q2 @TERUMO 137 100 Q3 2014/8/6 141 EUR (FY2013) 103 USD (FY2013) Q4 ©Terumo Corporation 22
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