Terumo Corporation · TSE:4543
Terumo — FY2022 Earnings Presentation
32 slides from Terumo's earnings presentation, May 15, 2023
Slide 1: Financial Results for the Fiscal Year Ended March 31, 2023 (FY2022)
Financial Results for the Fiscal Year Ended March 31, 2023 (FY2022) May 15, 2023 Naoki Muto Chief Accounting and Financial Officer Terumo Corporation Hello. I am the CAFO, Muto. I will explain our earnings results for the fiscal year ended March 31, 2023. 1
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
Slide 3: Highlights
Highlights FY22 Revenue Highest-ever sales revenue and OP; profit for the period increased US drove sales revenue growth; +5% group-wide (excluding FX) Profit temporarily down in Q4; shortfall against Feb. guidance FY23 guidance Continued global growth, +6% sales revenue growth (excluding FX) Expand
Slide 4: and rate, growing profit in a double-digit percentage and improving profitability through expansion of
and rate, growing profit in a double-digit percentage and improving profitability through expansion of high-margin products, even more assertive pricing policies, and cost-reduction measures centered on manufacturing cost. Next slide, please. 3
Slide 5: P&L
P&L Revenue: Highest ever. Strong demand continued in C&V field, especially US OP: Although highest ever, impact from raw materials price increases and one-time Q4 costs drove profitability down Change excluding 100M JPY FY 21 Q4 YTD FY 22 Q4 YTD Change FX impact FY21 Q4 FY22 Q4 Change Revenue 7,033
Slide 6: Operating Profit Variance Analysis (Q4 YTD)
Operating Profit Variance Analysis (Q4 YTD) GP increment by sales increase: (100M JPY) Increased demand and new product contribution grew sales Gross margin: Unprecedented raw materials price increases Gross etc. continued margin Pricing G/P +27 FX Price: SG&A increment Price increases that we conti
Slide 7: Guidance vs Results and Profit Shortfall Causes
Guidance (announced in February) Profit Shortfall Causes 差額 C&V TMCS TBCT Group （100M JPY） (為替除く) C&V TMCS TBCT One-time profit impacts Revenue 8,150 4,752 1,933 1,463 TBCT AOP 1,430 1,115 171 151 Guidance Extension of limited Plasma Innovation (PI) ％ 17.5% 23.5% 8.8% 10.3% launch period OP 1,220
Slide 8: One-time factors in Q4 profit shortfall
In existing businesses as well, supply chain disruption led to back orders, which required increased usage of air freight to eliminate. In relation to the Costa Rica production transfer, there was a period in which production at the previous US sites overlapped with that of Costa Rica, placing downw
Slide 9: Revenue by Region
Revenue by Region C&V: Cardiac & Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies, TIS: Interventional Systems, CV: Cardiovascular, TA: Terumo Aortic (Vascular Graft), HCS: Hospital Care Soplutions, PS: Pharmaceutical Solutions FY22 Q4 YTD Revenue (100M JPY) Comments YoY cha
Slide 10: Next slide, please.
Next slide, please. 7
Slide 11: C&V: Continue growth driven by demand increase and new products
Continue growth driven by demand increase and new products. C&V: Profitability remains good trend （100M JPY） Q4 YTD Q4 YTD Q4 Comments YoY ( ) FXN TIS： Global demand recovery. In therapeutic, expansion 4,806 of new PTCA guidewire and peripheral embolization 3,971 +554 device products. In Access, clo
Slide 12: TMCS: PS continues high growth
PS continues high growth. TMCS: Rising material and energy cost, temporal issues in Q4 led profit to decrease （100M JPY） Q4 YTD Q4 YTD Q4 Comments YoY ( ) FXN HCS Infection prevention returned to normal 1,917 Hospital Care in Japan, but anti-adhesion and new 1,755 1,853 Solutions: prefilled syringe
Slide 13: TBCT: Core business continued good trend
Core business, mainly blood center business continued good trend. TBCT: Fixed cost for PI increased due to prolonged limited market release （100M JPY） Q4 YTD Q4 YTD Q4 Comments YoY ( ) FXN 1,476 Blood Centers: Overseas component collection kit and whole blood automation sales +205 1,206 1,095 contin
Slide 14: FY23 Guidance
FY23 Guidance Sales revenue: Cardiac and Vascular leads for +6% growth overall (excluding FX) OP: High-margin product expansion, profitability improvement for double-digit growth ( ) FXN Amount (100 M JPY) FY22 Actual FY23 Guidance YoY% Revenue 8,202 8,540 4% (6%) Operating Profit 1,173 1,325 13% (1
Slide 15: FY23 Profitability Improvement Policies
FY23 Profitability Improvement Policies FY21 to GS26 Adjusted OP% Trend 1. Increase high-margin product sales * 26% Keep high growth in TIS, Neuro, TA for 7% C&V growth C&V 24% CDMO as growth driver in TMCS 23% 23% 2. More assertive pricing Total* 20% Expand businesses/regions to pass on costs
Slide 16: Finally, multiple one-time causes increased in Q4 of FY22 to impact profit; however, those
Finally, multiple one-time causes increased in Q4 of FY22 to impact profit; however, those shipment delays and inventory adjustments, etc., will subside in FY23 as the frequency of using air freight also decreases, all to the effect of contributing to increased profit. The graph on the right shows t
Slide 17: Profit Variance Analysis (FY23 Guidance)
Profit Variance Analysis (FY23 Guidance) (100 M JPY) GP increment by sales increase: Continued growth led by C&V Gross margin: Price Increased high-margin product sales, global Gross margin FX production optimization and efficiency improvement SG&A R&D G/P Price: increment More assertive pricing pol
Slide 18: Dividend Proposal: Continuous increase per shareholder return policy
Dividend Proposal: Continuous increase per shareholder return policy Shareholder return policy: Continue stable increase in dividend, aiming for 50% total payout ratio within GS26 Total payout ratio is 90% in FY22 with 50 B JPY of share buyback Annual dividend (JPY) Dividend payout ratio 50 32% 40%
Slide 19: Reference
Reference ©TERUMO CORPORATION 15 / 27 15
Slide 20: Revenue by Segment and Region
Revenue by Segment and Region ©TERUMO CORPORATION 16 / 27
Slide 21: Quarterly Trend of Revenue and Operating Profit
Quarterly Trend of Revenue and Operating Profit Revenue: Q4 YoY +12%, QoQ -6% OP : Q4 YoY +11％, QoQ -37％ 2,147 (100M JPY) 2,060 2,022 1,973 1,788 1,798 1,717 1,729 1,653 1,652 1,520 TBCT（Rev.） 1,313 TMCS（Rev.） C&V（Rev.） Total（OP） 362 304 334 375 238 296 255 286 231 238 181 215 FY20 FY21 FY22 FY20 FY
Slide 22: P&L (QoQ)
P&L (QoQ) (100M JPY) FY21 Q4 FY22 Q1 Q2 Q3 Q4 (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) Revenue 1,798 1,973 2,060 2,147 2,022 Gross Profit 905 (50.3%) 1,016 (51.5%) 1,054 (51.1%) 1,114 (51.9%) 990 (49.0%) SG&A Expenses 528 (29.4%) 566 (28.7%) 605 (29.4%) 615 (28.6%) 597 (29.5%) R&D Expenses
Slide 23: SG&A (QoQ)
SG&A (QoQ) (100M JPY) FY21 Q4 FY22 Q1 Q2 Q3 Q4 (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) Labor 256 298 312 316 307 Promotion 45 46 44 52 45 Logistics 41 44 47 49 44 Depreciation 54 56 59 60 58 Others 132 123 142 138 143 SG&A total 528 566 605 615 597 （%） (29.4%) (28.7%) (29.4%) (28.6%) (29.5
Slide 24: SG&A (YoY)
SG&A (YoY) (100M JPY) Change Change Change FY21 FY22 excluding +/- vs. FY21 FY21 Q4 FY22 Q4 +/- vs. FY21 Q4 YTD Q4 YTD FX Q4 YTD Q4 impact Salaries & Wages 1,010 1,233 223 22% 7% 256 307 50 20% Sales Promotion 160 187 27 17% 8% 45 45 -0 -0% Logistical Costs 157 184 27 17% 7% 41 44 3 8% Depreciation
Slide 25: Adjusted Operating Profit amount
Adjusted Operating Profit amount (100M JPY) FY21 FY22 FY21 FY22 Q4 YTD Q4YTD Q4 Q4 Operating Profit 1,160 1,173 215 238 Adjustment 1. Amortization of acquired intangible assets 161 188 42 44 Adjustment 2. Non-recurring profit or loss 24 19 16 2 Adjusted Operating Profit 1,344 1,380 273 284 <General
Slide 26: CAPEX, Depreciation and R&D Expenses
CAPEX, Depreciation and R&D Expenses (100M JPY) FY23 FY19 FY20 FY21 FY22 Guidance (100M JPY) CAPEX 895 772 692 758 800 Depreciation 477 484 532 635 675 Amortization of 157 146 161 188 175 acquired intangible assets Others 320 338 371 447 500 CAPEX = C.i.P. record basis, lease depreciation (IFRS16) i
Slide 27: Cash Flows (Q4 YTD)
Cash Flows (Q4 YTD) Operating CF Investing & Financing CF +1,175 -1,355 (100M JPY) 277 702 Income 412 taxes, etc. Depreciation Working and capital 758 1,161 amortization gains and losses CAPEX 501 Profit Acquisition 279 183 2,053 before tax of Dividends Others 1,873 treasury shares Cash at the end C
Slide 28: Cash Flows (Q4)
Cash Flows (Q4) Operating CF Investing & Financing CF +427 -177 (100M JPY) 181 109 28 37 375 178 Income Working 247 taxes, etc. capital 69 Depreciation gains and 240 and CAPEX Others losses amortization Profit before tax 143 1,873 1,624 Cash at the end CAPEX = C.i.P. record basis Cash at the end of
Slide 29: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity Annual impact of 1 JPY depreciation (100M JPY) USD EUR CNY Revenue 20 9 38 Adjusted Operating Profit 1 5 16 <Reference> Impact when JPY depreciation 10% North Latin Europe Asia America America EUR Zone Others China Others Adjusted Operating Profit 7 10 74 13 31 36 ©TERUM
Slide 30: Operating Profit Variance Analysis (Q4)
Operating Profit Variance Analysis (Q4) (100M JPY) GP increment from sales revenue: Increased demand and new product contribution grew sales Gross margin: Pricing Unprecedented raw materials price increases Gross +10 etc. and one-time negative factors G/P margin FX increment SG&A R&D Price: by Reimb
Slide 31: Product Pipeline and Major Topics
Product Pipeline and Major Topics GS26 Major Product Launch, Approval Status Field(Segment) General Product Till FY22 FY23 target Therapeutic (TIS) Drug-eluting coronary stent Ultimaster Nagomi JP launched EU launch Hydro Coil, Framing Coil Nagomi AZUR CX, Soft3D(JP) Hydro Coil, CX Therapeutic (TIS)
Slide 32: <“TERUMO
<“TERUMO 28