Terumo Corporation · TSE:4543
Terumo — H1 FY2019 Earnings Presentation
21 slides from Terumo's earnings presentation, November 2019
Slide 1: First-half results for fiscal year ending March 2020
I am the CAFO, Muto. I will now explain the first‐half results for the fiscal year ending March 2020. 1
Slide 2: Overall results
First, the overall results. Sales revenue grew positively in all three companies. Among these, the TIS business of the Cardiac and Vascular Company achieved double‐digit growth in all regions, driving the Terumo Group as a whole to 8% growth. Adjusted Operating Profit grew a large 21%. This was due
Slide 3: Variance analysis of adjusted operating profit
This is the variance analysis of adjusted operating profit, compared to the previous year. "Profit increase through sales increment" is 18.5 billion yen, which is ahead of progress toward our 33 billion yen annual guidance. However, this is a comparison with the previous fiscal year, when we experie
Slide 4: Revenue by region
Next is revenue by region. In Japan, General Hospital maintained good performance, while Cardiac and Vascular grew in double digits, for an overall result of 5% growth. Outside Japan, all regions grew in double digits when excluding FX impact. 4
Slide 5: Revenue by company
Next is revenue by company. Cardiac and Vascular Company was driven by double‐digit growth in all regions of the TIS business, as well as the entire Neurovascular business. The General Hospital Company saw double‐digit growth in its Alliance Business, and did well overall. Blood Management Company o
Slide 6: Cardiac and Vascular Company
Here is Cardiac and Vascular Company. Revenue was affected negatively by FX, but still grew 12%. The TIS business drove the entire company with double‐digit growth in all regions. The Neurovascular business maintained good performance, especially in the United States, where the new WEB product has b
Slide 7: General Hospital Company
The General Hospital Company saw progress according to plan in both sales and profit. Sales revenue progress was according to plan overall, with general hospital products, pharmaceutical, and DM healthcare businesses maintaining good performance, despite impact from timing gap of some expected pharm
Slide 8: Blood Management Company
Next is Blood Management Company. Sales revenue returned to growth across the company, with blood center products recovering in the 2nd quarter, after a slow 1st‐quarter start due to sales happening in the previous fiscal year, and with contributions from tenders won in emerging markets. Profit grow
Slide 9: Causes for exceeding first-half guidance and second-half risks
I will now summarize the causes for exceeding our first‐half guidance, and the risks for the second half. First, the causes for exceeding our first‐half guidance are the ones I outlined earlier. Next, I will explain the risks for the second half. In sales, there could be negative FX impact. And, the
Slide 10: Major topics from the quarter
Next, the major topics from the quarter. Main topics for the Terumo Group include our decision to participate in two United States venture funds. Through investment in funds and functional support for startup companies, we will encourage new product development and commercialization. Regarding topic
Slide 11: New product pipeline for this fiscal year
This slide shows our new product pipeline for this fiscal year. Currently, product launches are on schedule. This concludes my explanation. Thank you. 11
Slide 12: Reference
“TERUMO Reference 12/21 12
Slide 13: 1H FY19 Revenue and Growth by Region
1H FY19 Revenue and Growth by Region Business Segment Cardiac and Vascular Out of C&V Interventional Systems* General Hospital Blood Manage- ment Grand Total Japan Subtotal 24.8 147.9 (+11%) (+17%) 18.7 122.3 (411%) (+21%) 65.0 17.8 (+3%) (+0%) 6.1 45.7 (+5%) (+8%) 9519 211.4 (+5%) (+13%) 42.2 (+14%
Slide 14: Operating Expenses
Operating Expenses (billion JPY) Salaries & Wages 43.3 44.0 +0.7 +2% +5% Sales Promotion 8.7 9.5 +0.8 +9% +12% Logistical Costs 6.6 6.8 +0.3 +4% +7% Depreciation & 6.9 9.1* 42.2 $32% «43% Amortization Others 21.6 20.3* -1.3 -6% -4% i 87.0 89.6 ; | SG&A Expenses Total (30.5%) (29.2%) +2.6 +3% +6% H 2
Slide 15: Quarterly Results
Quarterly Results (billion JPY) FY18 Q2 Q3 FY19 Q1 Q2 (Jul-Sep) (Oct-Dec) (Apr-Jun) (Jul-Sep) Revenue 142.0 158.6 155.9 152°5 154.8 7 74.7 87.6 84.3 85.2 86.3 Gross Profit (52.6%) (55.2%) (54.1%) (55.8%) (55.8%) 43.5 45.0 46.7 44.5 45.1 SG&A Expenses (30.5%) (28.4%) (29.9%) (29.2%) (29.1%) 12.4 122.
Slide 16: Adjusted Operating Profit: Adjustments
Adjusted Operating Profit : Adjustments (billion JPY) Operating profit 47.6 59.2 Adjustment 1. Amortization of acquired J mortizatl dul 47.5 +7.8 intangible assets Adjustment 2. Non-recurring profit or loss +0.2 +0.0* Adjusted operating profit 55.3 67.0 <General examples of adjustment items> * 1H FY
Slide 17: CAPEX and R&D Expenses
CAPEX and R&D Expenses Amortization of Amortization acquired of acquired intangible assets intangible and goodwill assets 436 44.0 47.7 41.3 33.6 FY16 FY17 FY18 JGAAP <- | -> IFRS ~TERUMO (billion JPY) 75.0 49.0 CAPEX = C.i.P. record basis 50.0 A, 1H FY19 FY19 Guidance @ Expand investment in product
Slide 18: Cash Flows
Cash Flows Operating CF Investing & Financing CF +87 -55.3 (billion JPY) | 113 | 25.1 Income ares 22.1 Depreciation and . amortization Working capital increase 58.1 Profit 50 before Dividends Oth 123.0 _ = Cash at the CAPEX = C.i.P. record basis Cash at the end of FY18 Cash at the end of each fiscal
Slide 19: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity Annual impact of 1 JPY depreciation (billion JPY) P|] ue fw Revenue L7 0.8 22 Adjusted Operating 0.0 05 12 Profit <Reference> Impact when JPY is depreciated by 10% North | Latin EMEA America | America Adjusted Operating -0.1 1.0 6.5 1.3 1.9 3.6 Profit ~TERUMO 19/21 19
Slide 20: 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 pee Contingent Number of shares Maturity principal amount Coupon ca ls conversion trigger | requiredto be issued (billion JPY) price (JPY) for conversion Dec.
Slide 21: 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