Terumo Corporation · TSE:4543
Terumo — FY2016 Earnings Presentation
30 slides from Terumo's earnings presentation, May 10, 2017
Slide 1: Financial Results for the Fiscal Year Ended March 31, 2017 (FY2016)
Financial Results for the Fiscal Year Ended March 31, 2017 (FY2016) and Guidance for the Fiscal Year Ending March 31, 2018 (FY2017) Terumo Corporation Managing Executive Officer, Investor Relations, Corporate Communication Dept. Kazuaki Kitabatake May 10, 2017
Slide 2: Achieved Growth in Sales and Profit w/ FXN, and Recorded Highest-ever Net Income
Achieved Growth in Sales and Profit w/ FXN, and Recorded Highest-ever Net Income (billion yen) FY2015 FY2016 YoY% YoY% (Excl. FX) Net Sales 525.0 514.2 -2% +6% Gross Profit 282.9 (53.9%)* 278.0 (54.1%)* -2% +8% SG&A expenses 168.1 (32.0%) 167.7 (32.6%) -0% +9% R&D Expenses 33.1 ( 6.3%) 33.7 ( 6.6%)
Slide 3: FY2016 Comparison between Guidance and Results
FY2016 Comparison between Guidance and Results (billion yen) FY2016 <Operating Income> (billion yen) Guidance Results Difference Achieved sales above the forecast as of Feb 9th in access and neurovascular products + 2.0 Steady sales for acquired businesses + 1.0 Net Sales 510.0 514.2 +4.2 Delay o
Slide 4: Extraordinary Gains & Losses, Income Taxes
Extraordinary Gains & Losses, Income Taxes (billion yen) FY2015 FY2016 Operating Income 81.7 76.6 YoY%: -6% FX 1H 2H Q4YTD Non-operating -8.6 -8.0 FY15 -2.4 -5.1 -7.5 Income and loss FY16 -6.6 +2.5 -4.1 Ordinary Income 73.1 68.6 YoY%: -6% FY15 Sale of land in Hatagaya +4.4 Extraordinary +3.8 +6.4 FY
Slide 5: Operating Income Variance Analysis
Operating Income Variance Analysis 4.8 9.5 (billion yen) 5.3 Business mix Price improve- 5.3 G/P Erosion ment improve- (3.8) 2.0 17.0 ment by JP SG&A cost Reimburse- increase Increase reduction, ment due to sales of R&D 92.0 10.9 etc Revision force (5.7) expansion 81.7 G/P in US TIS increment and ne
Slide 6: FX Impact on Operating Income in FY2016
FX Impact on Operating Income in FY2016 FY15 Original FY16 Guidance Results in FY16 Currencies Rate Rate Impact Rate Impact (Yen) (yen) (billion yen) (yen) (billion yen) USD 120 110 1.9 108 2.7 EUR 133 125 -2.3 119 -5.2 CNY 19 17 -1.5 16 -2.3 Others -6.6 -6.1 (Asia, L. America etc.) Total -8.5 -10.9
Slide 7: Net Sales by Region
Net Sales by Region FY16 FY15 Net Sales Year-on-Year Sales Comparison 100%＝514.2BJPY billion yen YoY% Comments ( ) FXN Access devices in TIS and neurovascular as well as infusion system and businesses in Blood Management Company drove overall growth. Reimbursement price 187.0 cut. Ended YoY positive
Slide 8: Net Sales by Business Segment
Net Sales by Business Segment FY16 FY15 Net Sales Year-on-Year Sales Comparison 100%＝514.2BJPY billion yen YoY% Comments ( ) FXN Despite the negative impact of reimbursement price cut, overseas TIS Cardiac 261.5 +1% and neurovascular along with acquired 51% closure device led overall double digit an
Slide 9: Cardiac and Vascular: Achieved Double Digit Growth Both in Sales and Profit
Cardiac and Vascular : Achieved Double Digit Growth Both in Sales and Profit (billion yen) FY2015 FY2016 YoY% Major Topics Impact ( ) FXN 258.6 261.5 Negative Impact of FX -25.5 JPN: Reimbursement price cut. Annualized positive impact from the launch of new +1% coronary therapeutic device in FY15. -
Slide 10: General Hospital: Steady Progress in Profitability Improvement
General Hospital : Steady Progress in Profitability Improvement (billion yen) FY2015 FY2016 YoY% Major Topics Impact ( ) FXN Negative Impact of FX -4.0 JPN: Infusion system maily drove overall 161.4 157.9 growth in general hospital products +1.2 -2% Ended distribution of contrast agents - 1.3 Sales
Slide 11: Blood Management: Annualized Impact of Price Decline in US
Blood Management : Annualized Impact of Price Decline in US (billion yen) FY2015 FY2016 YoY% Major Topics Impact ( ) FXN Negative Impact of FX -10.6 Price declines for blood center products mainly in US - 2.0 105.0 94.5 -10% Negative impact from stagnant macro Sales economy in Russia and the Middle
Slide 12: Major Topics in FY2016
Major Topics in FY2016 Announced adoption of IFRS (Nov) Announced 5-Year Mid- to Long-term Growth Strategy (Dec) Corporate Share buyback of 44.2 BJPY (Feb) Selected as “the Health and Productivity Stock Selection” for three consecutive years (Feb) “AdSpray” obtained regulatory approval for the
Slide 13: New Products Pipeline in FY2016
New Products Pipeline in FY2016 Category Products Region Launch Category Products Region Launch Disposable Centrifugal Pump DES (Ultimaster) ◎★ France Launched CV (for PCPS) Asia Launched Coronary DES (Ultimaster) 4.0mm ◎★ JP Launched Regenerative HeartSheet ★ JP Launched Medicine To be Imaging IVUS
Slide 14: FY17 Guidance
FY17 Guidance (billion yen) Reference IFRS Basis FY16 FY17 YoY% FY17 Results Guidance Guidance Net Sales 514.2 575.0 +12% 575.0 Operating 76.6 82.0 95.0 +7% Income (%) (14.9%) (14.3%) (16.5%) Ordinary 68.6 79.5 +16% Income Net Income 54.2 53.0 -2% 68.0 Average USD 108 yen 110 yen Exchange Rate EUR 1
Slide 15: FY17 Guidance (excl. Impacts of FX and M&As)
FY17 Guidance (excl. Impacts of FX and M&As) (billion yen) FY17 FY16 Guidance FX M&As FY17 Result YoY% w/ FXN Impact Impact Guidance Excl. M&As Excl. M&As Net Sales 507.8 536.5 +6% +6.0 +32.5 575.0 Operating 81.1 87.5 82.0 +8% +1.5 -7.0 Income (%) (16.0%) (16.3%) (14.3%) Ordinary Income 73.2 85.5 +1
Slide 16: FY2017 Annual Guidance
FY2017 Annual Guidance 2.0 (billion yen) 4.5 Product *M&A impact in FY16 3.5 mix Price O/P excl. amortization +3.0 improve- erosion 7.0 Amortization - 10.0 G/P ment *Figures above is tentative improve- since PPA is still in process. ment by SG&A Adjustment for 5.0 cost increase Impact of 17.5 reduct
Slide 17: FY2017 Guidance: Increase of Sales and Profit in All Three Companies
FY2017 Guidance : Increase of Sales and Profit in All Three Companies Sales* Business Profit* Comments billion yen YoY% billion yen YoY% Contribution to sales and Cardiac FY17 308.0 23% 72.0 profit not only by TIS but and +18% +11% by all businesses in the Vascular FY16 261.5 25% 65.0 company 160.5
Slide 18: New Products Pipeline in FY2017
New Products Pipeline in FY2017 Category Products Region Category Products Region Heart lung machine Coronary PTCA balloon US ◎ Global (Re-launch) CV JP, US & Stent (TRI) ★ Next generation of oxygenator ◎ Global EU JP, US & PTA balloon (TRI) ★ General Vertical infusion pump JP EU Hospital JP, US & P
Slide 19: Reference
Reference TERUMO 19/30
Slide 20: FY16 Net Sales and Growth by Region
FY16 Net Sales and Growth by Region (billion yen) Business Outside of Japan Japan G. Total Segment Subtotal Europe Americas China Asia Cardiac and 51.0 210.6 64.7 92.0 28.2 25.6 261.5 Vascular (-1%) (+14%) (+9%) (+14%) (+24%) (+15%) (+11%) Out of C&V Interventional 38.8 170.1 53.1 69.1 26.8 21.2 208
Slide 21: Operating Expenses
Operating Expenses (billion yen) FY2015 FY2016 YoY YoY% YoY% (Excl. FX) Salaries & Wages 75.1 74.6 - 0.5 -1% +8% Sales Promotion 17.2 15.6 -1.6 -9% -2% Logistical Costs 11.0 11.2 +0.2 +2% +6% Depreciation & 27.4 27.5 +0.1 +0% +10% Amortization Others 37.4 38.8 +1.4 +4% +11% SG&A Expenses Total 168.1
Slide 22: Quarterly Results
Quarterly Results (billion yen) FY15 Q4 FY16 Q1 Q2 Q3 Q4 (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) Net Sales 129.0 124.5 120.6 129.3 139.8 Gross Profit 69.7 69.2 65.8 68.7 74.3 (54.0%) (55.6%) (54.6%) (53.2%) (53.2%) SG&A Expenses 42.2 39.7 39.6 41.0 47.4 (32.7%) (31.9%) (32.9%) (31.7%) (34.
Slide 23: CAPEX and R&D Expenses
CAPEX and R&D Expenses (billion yen) Amortization 56.0 of Intangibles Expand investment in 46.6 and Goodwill 45.4 46.5 44.7 production capacity 39.9 41.4 40.7 39.1 and space as well as 31.5 28.5 IT infrastructure in 20.2 20.8 16.3 17.7 FY17 CAPEX Amortization of 23.6 23.0 24.5 24.6 27.5 intangib
Slide 24: Cash Flow
Cash Flow Operating CF Investment and Finance CF +80.9 -125.2 (billion yen) 168.6 179.5 24.8 45.4 14.7 Corporate Acquisitions Tax Increase of 59.5 Depreci- Issuance working of straight ation and 75.0 amorti- capital bond and Repay- borrow ment of 44.2 zation 14.5 bank loans SB and Income bank Share
Slide 25: Financing Capital for M&As by Self-financing and Low-Interest Debt
Financing Capital for M&As by Self-financing and Low-Interest Debt Make use of low interest rate while considering financial soundness Financing since the introduction of minus interest rate policy Jan, 2017 Syndicate loans(*) 30.0 BJPY Apr, 2017 Syndicate loans(*) 120.0 BJPY Apr, 2017 Straig
Slide 26: FY17 Foreign Exchange Sensitivity
FY17 Foreign Exchange Sensitivity (billion yen) USD EUR CNY Excl. Incl. Amortization Amortization Net Sales 1.6 1.6 0.8 1.8 Operating Income 0.0 -0.2 0.5 0.9 <Reference> Impact of +/-10% fluctuation North Latin EMEA Asia America America EUR Others CNY Others Operating -1.8 0.8 5.6 1.0 1.4 3.3 Income
Slide 27: FY17 Guidance: Adoption of IFRS
FY17 Guidance: Adoption of International Financial Reporting Standards (IFRS) Adopting International Financial Reporting Standards (IFRS) from the year- end financial announcement for FY2017 Schedule for disclosure FY17 Q1-Q3 : Japanese GAAP FY17 year-end financial announcement : IFRS Japanese
Slide 28: Dividends and EPS
Dividends and EPS yen 160.0 50.0% 150 EPS 140.0 135 40.0% 120.0 Dividend Payout Ratio 101 100.0 30.0% 90 80.0 60.0 20.0% Dividend per 42.0 40.0 Share 39.0 29.0 30.5 10.0% 20.0 0.0 0.0% FY13 FY14 FY15 FY16 28/30
Slide 29: ROE
ROE Achieved 10% range Net Income 34.1 38.5 50.7 54.2 (billion yen) Share Buyback 16% 8,000 800 44.2 BJPY Share Buyback Share Buyback 7,000 700 3.0 BJPY 61.0 BJPY 12% 10.8% 6,000 600 9.3% 5,000 500 8% ROE 4,000 400 7.3% 7.2% 3,000 300 4% 2,000 Equity 200 1,000 100 0% 0 FY13 FY14 FY15 FY16 29/30
Slide 30: 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