Terumo Corporation · TSE:4543

Terumo — 1H FY2020 Earnings Presentation

23 slides from Terumo's earnings presentation, Nov 5, 2020

  1. Slide 1: Financial Results for the First Half of Fiscal Year Ending March 31, 2021 (FY2020)

    Financial Results for the First Half of Fiscal Year Ending March 31, 2021 (FY2020) November 5, 2020 Naoki Muto Chief Accounting and Financial Officer Terumo Corporation

  2. Slide 2: Safe Harbor for Forward-Looking Statements and Use of Document

    Safe Harbor for Forward-Looking Statements and Use of Document 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 intended to be guarantees of future even

  3. Slide 3: Revenue and Profits Were Ahead of Schedule Toward FY20 Guidance

    Revenue and Profits Were Ahead of Schedule Toward FY20 Guidance (billion JPY) YoY% 1H FY19 1H FY20 YoY% (FXN) Revenue 307.3 283.3 -8% -6% Gross Profit 171.5 (55.8%) 150.5 (53.1%) -12% -9% SG&A Expenses 89.6 (29.2%) 85.9 (30.3%) -4% -3% R&D Expenses 24.3 ( 7.9%) 23.1 ( 8.2%) -5% -4% Other Income and

  4. Slide 4: Adjusted Operating Profit Variance Analysis

    Adjusted Operating Profit Variance Analysis (billion JPY) 7.9 9.8 4.2 0.9 G/P decrement 3.4 by sales 2.6 1.2 4.5 R&D Gross 67.0 decrease margin decrease 2.7 Price FX -0.5 MDR SG&A 9.4 59.2 JP -0.6 decrease Reimburse- IT 51.3 ment invest- -2.1 ment -0.5 41.8 1H FY19 1H FY19 1H FY20 1H FY20 Operating

  5. Slide 5: Revenue by Region

    Revenue by Region 1H FY20 1H FY19 Revenue Year-on-Year Revenue Comparison 100% = 283.3 B JPY billion JPY YoY% Comments ( ) FXN Japan: Recovery in C&V from Q1 to Q2. GH performance was driven by Alliance, new product for pain management and infection control products 93.5 Japan -3% 33% 95.9 Europe: R

  6. Slide 6: Revenue by Business Segment

    Revenue by Business Segment 1H FY20 1H FY19 Revenue Year-on-Year Revenue Comparison 100% = 283.3 B JPY billion JPY YoY% Comments ( ) FXN There was decrease in demand due to postponement of procedures. Cardiac Significant recovery in the performance 149.4 -13% and from Q1 to Q2 Vascular 172.6 (-12%)

  7. Slide 7: Cardiac and Vascular: Elective Procedures Backlogs Were Being Cleared

    Cardiac and Vascular: Elective Procedures Backlogs Were Being Cleared (billion JPY) 1H FY19 1H FY20 YoY% Major Topics Impact ( ) FXN TIS: Despite the impact of decreased 172.6 demand among all product categories, -15.9 149.4 significantly recovered from Q1 to Q2 Neurovascular: There was clearing of

  8. Slide 8: General Hospital: Covered the Impact of Decreased Demand by Solid Sales of Alliance

    General : Covered the Impact of Decreased Demand by Solid Hospital Sales of Alliance and Infection Control Products (billion JPY) 1H FY19 1H FY20 YoY% Major Topics Impact ( ) FXN General hospital products: Continuous impact of limited number of medical -2.9 82.8 81.8 examinations especially in Japan

  9. Slide 9: Blood and Cell Technologies: Continuous Increase in Both Revenue and Profit

    Blood and Cell Technologies: Continuous Increase in Both Revenue and Profit (billion JPY) 1H FY19 1H FY20 YoY% Major Topics Impact ( ) FXN 51.8 52.0 Blood center solutions: Driven by software update for automated blood collection system. +0% Increase in collection demand for the Revenue (+3%) COVID-

  10. Slide 10: Revision of FY20 Guidance

    Revision of FY20 Guidance (billion JPY) Original Revised Change Guidance Guidance in amount Revenue 600.0 600.0 - 85.0 90.0 Operating Profit +5.0 (14.2%) (15.0%) 103.0 108.0 Adjusted Operating Profit +5.0 (17.2%) (18.0%) Profit for the Year 65.0 68.0 +3.0 USD 105 JPY 106 JPY Average Exchange Rate (P

  11. Slide 11: Key Assumptions of 2H FY20 Projection

    Key Assumptions of 2H FY20 Projection Recovery in the 2H revenue becomes slower than the original projection disclosed at the financial announcement in August 2020 110%  Overall healthcare demand including new procedure pipeline is declined due to limited number of medical examination, continuing o

  12. Slide 12: Major Topics in FY20 Q2

    Major Topics in FY20 Q2 Donated cash and products to support relief efforts for heavy rains in July 2020 in Corporate Japan through Japanese Red Cross and other organizations Joined in a fund operated by CD Capital, a Chinese venture capital firm Radioactive microspheres “QuiremSpheres” Acquired Qui

  13. Slide 13: FY20 New Product Pipeline

    FY20 New Product Pipeline Category Products Region Launch Category Products Region Launch Steerable sheath JP Vascular Stent graft for abdominal aortic US Launched graft aneurysm Coronary PTCA balloon (manufactured by Essen China Syringe pump JP Launched Technology) General hospital Safety IV cathet

  14. Slide 14: Reference

    Reference ©TERUMO CORPORATION 14 /22

  15. Slide 15: 1H FY20 Revenue and Growth by Region

    1H FY20 Revenue and Growth by Region (billion JPY) Business Overseas Japan Total Segment Subtotal Europe Americas China Asia Cardiac and 22.9 (-8%) 126.6 (-13%) 37.9 (-10%) 57.2 (-13%) 16.1 (-19%) 15.3 (-13%) 149.4 (-12%) Vascular Out of C&V, TIS and 16.5 (-12%) 104.1 (-13%) 30.7 (-11%) 46.0 (-12%)

  16. Slide 16: Operating Expenses

    Operating Expenses (billion JPY) YoY% 1H FY19 1H FY20 YoY YoY% (FXN) Salaries & Wages 44.0 45.6 +1.6 +4% +5% Sales Promotion 9.5 5.1 -4.4 -46% -46% Logistical Costs 6.8 6.9 +0.1 +1% +2% Depreciation & Amortization 9.1 9.5 +0.5 +5% +7% Others 20.3 18.8 -1.5 -7% -6% SG&A Expenses Total 89.6 (29.2%) 85

  17. Slide 17: Quarterly Results

    Quarterly Results (billion JPY) FY19 Q2 Q3 Q4 FY20 Q1 Q2 (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) (Jul-Sep) Revenue 154.8 162.9 158.8 131.3 152.0 Gross Profit 86.3 (55.8%) 87.2 (53.5%) 85.3 (53.7%) 68.9 (52.5%) 81.6 (53.7%) SG&A Expenses 45.1 (29.1%) 47.2 (29.0%) 47.7 (30.1%) 40.1 (30.5%) 45.8 (30.2%

  18. Slide 18: Adjusted Operating Profit: Adjustments

    Adjusted Operating Profit: Adjustments (billion JPY) 1H FY19 1H FY20 Operating Profit 59.2 41.8 Adjustment 1. Amortization of acquired intangible assets +7.8 +7.2 Adjustment 2. Non-recurring profit or loss +0.0 +2.3 * Adjusted Operating Profit 67.0 51.3 <General examples of adjustment items> • Acqui

  19. Slide 19: CAPEX, Depreciation and R&D Expenses

    CAPEX, Depreciation and R&D Expenses CAPEX & Depreciation 89.5 (billion JPY) 85.0 Amortization of acquired intangible assets Lease depreciation 60.8 (IFRS16) is not included in 52.5 FY19, 1H FY20 results and 47.7 43.6 42.0 44.0 FY20 Guidance 15.7 15.7 35.3 15.7 14.5 14.6 Expand investment in 24.1 pr

  20. Slide 20: Cash Flows

    Cash Flows Operating CF Investing & Financing CF +41.6 +1.1 (billion JPY) 10.0 10.5 Redemption 10.5 26.8 Income of bonds 15.4 Dividends 13.1 taxes 70.0 Others Depreciation Working and capital amortization increase 35.3 40.7 CAPEX Long-term Profit debt 209.6 before tax 166.9 Cash at the CAPEX = C.i.P

  21. Slide 21: Foreign Exchange Sensitivity

    Foreign Exchange Sensitivity Annual impact of 1 JPY depreciation (billion JPY) USD EUR CNY Revenue 1.7 0.8 2.4 Adjusted Operating Profit 0.0 0.5 1.3 <Reference> Impact when JPY is depreciated by 10% North Latin EMEA Asia America America EUR Others CNY Others Adjusted Operating Profit -0.1 1.0 6.5 1.

  22. Slide 22: 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 Conversion Contingent Number of shares Maturity principal amount Coupon Price conversion price required to be issued (billion JPY) (JPY) (JPY) for conversion De

  23. Slide 23: <“TERUMO

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