Terumo Corporation · TSE:4543
Terumo — Q1 FY2019 Earnings Presentation
21 slides from Terumo's earnings presentation, August 2019
Slide 1: Results overview, Q1 FYE 3/2020
Starting this quarter, I, Muto, will explain our results overview. 1
Slide 2: Overall results
First, the overall results. In addition to the Cardiac and Vascular Company starting out strong, spending progress was slightly delayed, resulting in a start to the fiscal year in which profit grew in double digits to exceed guidance. In revenue, even when excluding the recovery from last year's shi
Slide 3: Adjusted operating profit variance analysis
This is the variance analysis of adjusted operating profit, compared to the previous fiscal year. The gross profit increment by sales increase may appear small compared to guidance of 33 billion yen for the entire year; however, that is the result of there being some impact in the previous fiscal ye
Slide 4: Revenue by region
Next is revenue by region. In Japan, the TIS business returned to double‐digit growth, and all companies showed positive growth. Outside Japan, all regions were driven by the Cardiac & Vascular company. In China especially, the shipping delays had already begun to affect revenue during the 1st quart
Slide 5: Revenue by company
Next is revenue by company. In Cardiac & Vascular, the primary drivers were recovery in the TIS business, and neurovascular growth that exceeded 30%. In General Hospital, the Alliance Business continued to grow at over 30%, and overall the company performed well. Blood Management started out negativ
Slide 6: Cardiac & Vascular Company
First, Cardiac & Vascular Company. Revenue was affected negatively by FX, but still grew 11%. TIS showed double‐digit growth both inside and outside Japan, driven by strong growth of both access and therapeutic devices even without the recovery from last fiscal year’s shipping delay. Neurovascular,
Slide 7: General Hospital Company
The General Hospital Company began this year approximately according to plan. In revenue, there was a decrease in General Hospital products demand outside Japan. The Alliance business saw continued 30% growth both inside and outside Japan, and the company posted overall year‐on‐year growth of 2%. In
Slide 8: Blood Management
Next is Blood Management. Revenue saw a 1st quarter decrease due to some sales happening ahead of schedule at the end of last fiscal year, depressing April 2019 sales. In addition, there was negative FX impact; all told, revenue growth came out negative year‐on‐year. Profit sustained heavy FX impact
Slide 9: Major topics from the quarter
Next, the major topics from the quarter. Terumo instituted staggered working hours and improved teleworking system as part of its promotion of work style reform. We also strengthened our corporate identity and values system, while restructuring executive compensation, both measures toward stronger c
Slide 10: New product pipeline for this fiscal year
This slide shows our new product pipeline for this fiscal year. Currently, product launches are on schedule. 10
Slide 11: Exclusive rights to Virtue drug-eluting balloon
As I mentioned, we acquired exclusive sales rights to the drug‐eluting angioplasty balloon "Virtue" from a US company called Orchestra Biomed. The product is the first and only non‐coated drug‐eluting angioplasty balloon that delivers a proprietary bioabsorbable, sustained‐release formulation of sir
Slide 12: Reference
~“TERUMO Reference 12/21 12
Slide 13: FY19 Q1 Revenue and Growth by Region
FY19 Q1 Revenue and Growth by Region (billion JPY) Business Overseas Grand Japan seins Segment Subtotal Americas Total Cardiac and 12.1 76.4 22.1 33.7 11.7 8.8 88.5 Vascular (+8%) (+15%) (+9%) (+11%) (+36%) (+21%) (+14%) Out of C&V Interventional gp 63.2 18.0 26.7 dtl, 74 72.4 systems* (+9%) (417%)
Slide 14: Operating Expenses
Operating Expenses einer mie Salaries & Wages 21.7 21.9 +0.2 Sales Promotion 45 4.9 +0.4 +9% +11% Logistical Costs 3.2 3.5 +0.2 +7% +9% Depreciation & 3.4 4.5" +11 432% © +33% Amortization Others 10.7 9.7* -1.0 -9% -8% i 43.5 44.5 H | SG&A Expenses Total (30.4%) (29.2%) +1.0 +2% +4% } 11.3 11.8 R&D
Slide 15: Quarterly Results
Quarterly Results (billion JPY) FY18 Q1 Q2 ek} a4 FY19 Q1 (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) Revenue 143.0 142.0 158.6 15519 S225) 7 79.9 74.7 87.6 84.3 85.2 Gross Profit (55.8%) (52.6%) (55.2%) (54.1%) (55.8%) 43.5 43.5 45.0 46.7 44.5 SG&A Expenses (30.4%) (30.5%) (28.4%) (29.9%) (29
Slide 16: Adjusted Operating Profit: Adjustments
Adjusted Operating Profit : Adjustments (billion JPY) Operating profit 25.9 29.2 Adjustment 1. Amortization of acquired 43.8 44.0 intangible assets Adjustment 2. Non-recurring profit or loss +0.9 +0.8* Adjusted operating profit 30.5 33.9 <General examples of adjustment items> * FY19 Q1 main items in
Slide 17: CAPEX and R&D Expenses
CAPEX and R&D Expenses Amortization of acquired intangible assets and goodwill 33.6 FY16 JGAAP <- ~TERUMO Amortization of acquired intangible FY17 FY18 -> IFRS (billion JPY) 75.0 49.0 18.3 11.4 CAPEX = C.i.P. record basis 50.0 oo. FY19 Q1 Fy19 Guidance @ Expand investment in production capacity and
Slide 18: Cash Flows
Cash Flows Operating CF Investing & Financing CF (billion JPY) +19.2 -32.4 12.5 Ei Income Depreciation tans 13.7 and amortization Working 28.8 capital increase 18.3 Profit before tax Dividends Cash at the CAPEX = C.i.P. record basis Cash at the end of FY18 Cash at the end of each fiscal year is equa
Slide 19: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity Annual impact of 1 JPY depreciation (billion JPY) P| w]e | cw Revenue 17 0.8 ae Adjusted Operating 0.0 05 12 Profit <Reference> Impact when JPY is depreciated by 10% North Latin EMEA America | Ameria 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 eee Contingent Number of shares Maturity principal amount Coupon ay Li 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