Terumo Corporation · TSE:4543
Terumo — FY2023 Earnings Presentation
31 slides from Terumo's earnings presentation, May 14, 2024
Slide 1: Financial Results for the Fiscal Year Ended March 31, 2024 (FY2023)
Financial Results for the Fiscal Year Ended March 31, 2024 (FY2023) May 14, 2024 Jin Hagimoto Chief Financial Officer Terumo Corporation I’m Hagimoto, Terumo's CFO. I would like to present an overview of the year-end financial results for the fiscal year ending March 31, 2024. 1
Slide 2: Forward-Looking Statements and Use of Document
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 events or performanc
Slide 3: Highlights
Highlights FY23 Results Record highs in revenue, operating profit, and net income Revenue growth driven by Americas and Europe, +7% companywide (excluding exchange rate effects) Operating profit growth outpaced sales growth, +14% companywide (excluding exchange rate effects) FY24 Guidance Continued
Slide 4: P&L
P&L Revenue: Record high. TIS, blood center business, Neuro, and Vascular led with double-digit growth Operating profit: Record high. Steady progress in profit improvement measures. SG&A expenses increased due to increased headcount to expand sales of therapeutic devices in North America Change excl
Slide 5: Gross margin, operating profit margin, and adjusted operating profit margin
Gross margin, operating profit margin, and adjusted operating profit margin for the full year all improved from the previous year. Next slide, please. 4
Slide 6: OP Variance Analysis (Q4): Profitability improvements as planned
OP Variance Analysis (Q4): Profitability improvements as planned (100M JPY) Price +35 G/P increment by sales increase: Gross Reimbur- SG&A FX TIS, Neuro led the driver C&V margin sement increase R&D increase price Gross margin: G/P increment +6 Mitigation of inflationary effects, and cost by reducti
Slide 7: OP Variance Analysis (Q4 YTD): As planned in all areas
OP Variance Analysis (Q4 YTD): As planned in all areas (100M JPY) Price Gross +100 G/P increment by sales increase: margin Reimbur- SG&A FX Drivers were C&V and TBCT sement increase R&D G/P increase Gross margin: price increment +27 One-time costs offset by inflation mitigation, cost by reductions,
Slide 8: Revenue by Region: Therapeutic devices strong in Americas, Europe
Revenue by Region: Therapeutic devices strong in Americas, Europe: Asia drove high growth rate C&V: Cardiac and Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies, TIS: Interventional Systems, Neuro: Neurovascular, CV: Cardiovascular FY23 Q4 YTD Revenue (100M JPY) Comments FY2
Slide 9: Regional commentary: China and emerging economies
In China, while there was some impact from restrained purchasing by distributors as access products were subject to VBP. TIS maintained double-digit growth even when excluding exchange rate effects. The new prices will not begin to apply until FY24. Emerging economies such as Asia and the Middle Eas
Slide 10: C&V: Continued global demand, driven by double-digit growth in Vascular and Neuro
C&V: Continued global demand, driven by double-digit growth in Vascular and Neuro (C&V: Cardiac and Vascular, TIS: Interventional Systems) （100M JPY） Q4 YTD Q4 YTD Q4 Comments YoY ( ) FX Neutral 5,557 TIS: Access and therapeutic demand expanded globally. 4,806 Volume-based procurement (VBP) in China
Slide 11: TMCS: Increased revenue and profit despite impact of Nutrition business divestiture
Increased revenue and profit despite impact of Nutrition business TMCS: divestiture, return to normal of thermometers (TMCS: Medical Care Solutions) （100M JPY） Q4 YTD Q4 YTD Q4 Comments YoY ( ) FX Neutral HCS In Japan, the company is rebounding from Hospital Care the decline in sales resulting from
Slide 12: TBCT: Strong blood center business drove large profit increase
TBCT: Strong blood center business drove large profit increase (TBCT: Blood and Cell Technologies) （100M JPY） Q4 YTD Q4 YTD Q4 Comments YoY ( ) FX Neutral Blood Center Whole blood collection-related products 1,683 +183 1,476 Solutions: performed well in Asia and Americas 1,206 Revenue Therapeutic Ce
Slide 13: FY24 Guidance
FY24 Guidance Revenue: Continued growth led by Blood & Cell Technologies, +7% growth (excluding exchange rate effects) Operating profit: Double-digit growth due to expanded sales of high-profit products and further strengthening of profitability improvement measures Amount (100 M JPY) FY23 Actual FY
Slide 14: Profit Variance Analysis (FY24 Guidance)
Profit Variance Analysis (FY24 Guidance) (100 M JPY) G/P increment by sales increase: Price Gross FX Continuation of growth mainly in Blood & Cell margin SG&A R&D Technologies and C&V Gross margin: G/P Continuation of profit improvement measures, increment by sales and effects of product mix improve
Slide 15: FY24 guidance commentary: price and SG&A
In terms of prices, we have conservatively factored in the impact of lower sales and profits from VBP in China, but we expect this to be offset by further revisions to pricing policies in existing businesses, in addition to the positive impact of price increases implemented in FY23, the effects of w
Slide 16: Assumptions Underlying FY24 Guidance
Assumptions Underlying FY24 Guidance (C&V: Cardiac and Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies ) C&V • Despite the impact of volume-based procurement (VBP) in China and official price revisions in Japan, this is expected to be covered by all businesses, and sales ar
Slide 17: FY24 assumptions commentary: CDMO, Alzheimer's drug, TBCT
The first overseas CDMO project and Alzheimer’s drug, both of which are slated for this fiscal year, are expected to have limited impact on FY24 results. TBCT's losses in the Plasma Innovation business will narrow due to the accelerated rollout of Rika. For the core business, we expect stable growth
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 26 Unit: Yen Figures in parentheses represent payout ratio 22 (31.6%) 20 (30.8%) 17 (33.6%) 14.5 (28.9%) 13.5 14 12.5 (28.3%) (24.8%
Slide 19: Reference
Reference ©TERUMO CORPORATION 15 / 14 15
Slide 20: Revenue by Segment and Region
Revenue by Segment and Region ©TERUMO CORPORATION 16 / 14
Slide 21: Quarterly Revenue Trend
Quarterly Revenue Trend FY23 Q4: +18% vs. FY22 Q4 -0% vs. FY23 Q3 (100M JPY) 3,000 2,500 2,000 1,500 TBCT TMCS C&V 1,000 500 0 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 Q1 Q2 Q3 Q4 ©TERUMO CORPORATION 17 / 14
Slide 22: P&L (QoQ)
P&L (QoQ) (100M JPY) FY22 Q4 FY23 Q1 Q2 Q3 Q4 (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) Revenue 2,022 2,153 2,286 2,391 2,389 Gross Profit 990 (49.0%) 1,098 (51.0%) 1,185 (51.8%) 1,266 (52.9%) 1,243 (52.0%) SG&A Expenses 597 (29.5%) 651 (30.2%) 664 (29.0%) 707 (29.6%) 737 (30.9%) R&D Expense
Slide 23: SG&A (QoQ)
SG&A (QoQ) (100M JPY) FY22 Q4 FY23 Q1 Q2 Q3 Q4 (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) Salaries & Wages 307 336 349 371 373 Sales Promotion 45 49 44 54 54 Logistical Costs 44 47 46 49 51 Depreciation and Amortization 58 58 61 65 66 Others 143 161 164 168 192 SG&A Expenses 597 651 664 707 7
Slide 24: SG&A (YoY)
SG&A (YoY) (100M JPY) YoY% FY22 Q4 FY23 Q4 YoY YoY% excluding FY22 Q4 FY23 Q4 YoY YoY% YTD YTD FX impact Salaries & Wages 1,233 1,429 197 16% 9% 307 373 66 22% Sales Promotion 187 201 14 8% 3% 45 54 9 21% Logistical Costs 184 193 9 5% -0% 44 51 7 16% Depreciation and 234 250 16 7% 3% 58 66 8 13% Amo
Slide 25: Adjusted Operating Profit: Adjustment Items
Adjusted Operating Profit: Adjustment Items (100M JPY) FY22 Q4 YTD FY23 Q4 YTD FY22 Q4 FY23 Q4 Adjusted Operating Profit 1,380 1,568 284 371 Adjustment 1. Amortization of -188 -200 -44 -54 acquired intangible assets Adjustment 2. Non-recurring profit or loss -19 33 -2 29 Operating Profit 1,173 1,401
Slide 26: CAPEX, Depreciation and Amortization, R&D Expenses
CAPEX, Depreciation and Amortization, R&D Expenses (100M JPY) FY24 FY20 FY21 FY22 FY23 (100M JPY) Guidance CAPEX 772 692 758 784 930 Depreciation and Amortization 484 532 635 702 770 Amortization of 146 161 188 200 200 acquired intangible assets Others 338 371 447 502 570 CAPEX = Construction in pro
Slide 27: Cash Flows (Q4 YTD)
Cash Flows (Q4 YTD) Operating CF Investing & Financing CF +1,463 -1,288 (100M JPY) -457 767 Income -256 taxes, etc. Depreciation and Working -784 amortization capital 1,408 gains and losses CAPEX -100 Redemption -111 -320 28 of bonds Share buy back Dividends 136 Profit before Others tax 2,049 1,873
Slide 28: Cash Flows (Q4)
Cash Flows (Q4) Operating CF Investing & Financing CF +551 -139 (100M JPY) -75 69 206 Income -270 taxes, etc. Working capital188 -32 163 Depreciation and gains and CAPEX 351 Share amortization losses Others buy back 163 183 Profit before 156 2,049 tax 1,636 Cash at the end CAPEX = Construction in pr
Slide 29: FY23 Q4 YTD FX Impact Breakdown (Flow and Stock)
FY23 Q4 YTD FX Impact Breakdown (Flow and Stock) FX impact vs. FY22 Q4 YTD +5.0B JPY Flow +10.2B JPY: USD and EUR appreciation positive impact FY22 Q4 YTD FY23 Q4 YTD Rate (JPY) Variation Average Rate Average Rate USD 135 145 10 EUR 141 157 16 CNY 19.7 20.1 0.4 Stock -5.2B JPY: FX impact from elimin
Slide 30: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity Annual impact of 1 JPY depreciation (Flow) (100M JPY) USD EUR CNY Revenue 22 11 39 Adjusted Operating Profit 0 5 23 Impact of 1 JPY depreciation (Stock) USD EUR CNY Adjusted Operating Profit -2.5 -0.6 -2.0 ©TERUMO CORPORATION 26 / 14
Slide 31: ~“TERUMO
~“TERUMO 27