Terumo Corporation · TSE:4543
Terumo — Q1 FY2020 Earnings Presentation
24 slides from Terumo's earnings presentation, Aug 6, 2020
Slide 1: Financial Results for the First Quarter of Fiscal Year Ending March 31, 2021 (FY2020)
Financial Results for the First Quarter of Fiscal Year Ending March 31, 2021 (FY2020) August 6, 2020 Naoki Muto Chief Accounting and Financial Officer Terumo Corporation
Slide 2: Despite The COVID-19 Impact on Cardiac & Vascular, The Overall Impact Was Mitigated
Despite The COVID-19 Impact on Cardiac & Vascular, The Overall Impact Was Mitigated by Other Companies (billion JPY) YoY% FY19 Q1 FY20 Q1 YoY% (FXN) Revenue 152.5 131.3 -14% -11% Gross Profit 85.2 (55.8%) 68.9 (52.5%) -19% -15% SG&A Expenses 44.5 (29.2%) 40.1 (30.5%) -10% -8% R&D Expenses 11.8 ( 7.8
Slide 3: Adjusted Operating Profit Variance Analysis
Adjusted Operating Profit Variance Analysis (billion JPY) 4.7 9.1 0.4 G/P 2.8 2.0 decrement R&D 1.4 0.7 3.4 by sales Gross decrease 33.9 FX 2.7 3.6 decrease margin Price MDR SG&A 29.2 -0.3 -0.4 decrease JP Reimburse- IT ment invest- 21.7 -1.1 ment -0.3 18.1 FY19 Q1 FY19 Q1 FY20 Q1 FY20 Q1 Operating
Slide 4: Revenue by Region
Revenue by Region FY20 Q1 FY19 Q1 Revenue Year-on-Year Revenue Comparison 100% = 131.3 B JPY billion JPY YoY% Comments ( ) FXN Japan: Although C&V was impacted by the COVID-19, there was increased demand for thermometers and antiseptic hand gel in GH 44.3 Japan -4% Europe: Double digit year-on-year
Slide 5: Revenue by Business Segment
Revenue by Business Segment FY20 Q1 FY19 Q1 Revenue Year-on-Year Revenue Comparison 100% = 131.3 B JPY billion JPY YoY% Comments ( ) FXN There was decrease in demand due to postponement of elective procedures. Cardiac Observing recovering momentum in the 67.3 -24% and performance from June Vascular
Slide 6: Cardiac and Vascular: The COVID-19 Impact Was within the Assumed Range
Cardiac and Vascular: The COVID-19 Impact Was within the Assumed Range (billion JPY) FY19 Q1 FY20 Q1 YoY% Major Topics Impact ( ) FXN 88.5 TIS: Impact of the decreased demand was observed among all product categories -14.0 67.3 Neurovascular: Decline in the procedural volume of aneurysm treatments -
Slide 7: General Hospital: Maintained Profitability by Expense Control
General Hospital: Maintained Profitability by Expense Control (billion JPY) FY19 Q1 FY20 Q1 YoY% Major Topics Impact ( ) FXN General hospital products: Impact of limited number of medical examinations -1.5 39.8 39.2 Pharmaceutical: declined sales of IV solutions mitigated by solid sales of pain Reve
Slide 8: Blood and Cell Technologies: Increase in Both Revenue and Profit
Blood and Cell Technologies: Increase in Both Revenue and Profit (billion JPY) FY19 Q1 FY20 Q1 YoY% Major Topics Impact ( ) FXN 24.7 Blood center solutions: Driven by software 24.2 update for automated blood collection system. +2% Increase in collection demand for the Revenue COVID-19 convalescent p
Slide 9: Major Topics in FY20 Q1
Major Topics in FY20 Q1 Donated 2.4 M USD in cash and products to support COVID-19 Corporate pandemic relief efforts worldwide Received the first certificate under EU-MDR Stented device US FDA Breakthrough Device Designation granted for for complex aortic arch repair “Thoraflex Hybrid” stented devic
Slide 10: FY20 New Product Pipeline
FY20 New Product Pipeline Category Products Region Launch Category Products Region Launch Steerable sheath JP Vascular Stent graft for abdominal aortic US graft aneurysm Coronary PTCA balloon (manufactured by Essen China Syringe pump JP Technology) General hospital Safety IV catheter JP Imaging IVUS
Slide 11: Key Assumptions of FY20 Guidance
Key Assumptions of FY20 Guidance Expect revenue to bottom out in Q1 and return to recovering momentum in the second half. Since the impact of the “second waves” is uncertain, it is not incorporated into the guidance While controlling SG&A Expenses to an extent, also plan to invest appropriately base
Slide 12: FY20 Guidance
FY20 Guidance (billion JPY) FY19 FY20 YoY% Actual Guidance (FXN) -5% Revenue 628.9 600.0 (-2%) 110.6 85.0 -23% Operating Profit (17.6%) (14.2%) (-20%) 125.0 103.0 -18% Adjusted Operating Profit (19.9%) (17.2%) (-14%) Profit for the Year 85.2 65.0 -24% (Actual) (Predicted) USD 109 JPY 105 JPY Average
Slide 13: FY20 Guidance
FY20 Guidance (billion JPY) Revenue Comments Amount YoY% ( ) FXN Cardiac FY20 Guidance 322.0 Despite demand decline due to the postpone- -8% ment of elective procedures, expect it to show and (-5%) Vascular FY19 Actual 350.6 recovering momentum from the second half The negative impact of limited num
Slide 14: FY20 Guidance: Quarterly Trend of the Revenue
FY20 Guidance: Quarterly Trend of the Revenue Expect revenue to bottom out in Q1 and return to positive year-on-year growth trajectory in the second half 110% FY19 Actual (*) 100% 90% (*) FXN 80% Q4 Q1 Q2 Q3 Q4 FY19 FY20 ©TERUMO CORPORATION 14 /24
Slide 15: Reference
Reference ©TERUMO CORPORATION 15 /24
Slide 16: FY20Q1 Revenue and Growth by Region
FY20Q1 Revenue and Growth by Region (billion JPY) Business Overseas Japan Total Segment Subtotal Europe Americas China Asia Cardiac and 10.9 (-10%) 56.4 (-23%) 16.7 (-21%) 24.4 (-25%) 8.0 (-28%) 7.3 (-14%) 67.3 (-21%) Vascular Out of C&V Interventional 7.8 (-15%) 46.2 (-24%) 13.6 (-22%) 19.2 (-26%)
Slide 17: Operating Expenses
Operating Expenses (billion JPY) YoY% FY19 Q1 FY20 Q1 YoY YoY% (FXN) Salaries & Wages 21.9 22.4 +0.5 +2% +5% Sales Promotion 4.9 2.0 -2.8 -58% -57% Logistical Costs 3.5 3.3 -0.2 -5% -2% Depreciation & Amortization 4.5 4.6 +0.1 +1% +4% Others 9.7 7.8 -2.0 -20% -19% SG&A Expenses Total 44.5 (29.2%) 40
Slide 18: Quarterly Results
Quarterly Results (billion JPY) FY19 Q1 Q2 Q3 Q4 FY20 Q1 (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) Revenue 152.5 154.8 162.9 158.8 131.3 Gross Profit 85.2 (55.8%) 86.3 (55.8%) 87.2 (53.5%) 85.3 (53.7%) 68.9 (52.5%) SG&A Expenses 44.5 (29.2%) 45.1 (29.1%) 47.2 (29.0%) 47.7 (30.1%) 40.1 (30.5%
Slide 19: Adjusted Operating Profit: Adjustments
Adjusted Operating Profit: Adjustments (billion JPY) FY19 Q1 FY20 Q1 Operating Profit 29.2 18.1 Adjustment 1. Amortization of acquired intangible assets +4.0 +3.5 Adjustment 2. Non-recurring profit or loss +0.8 +0.1 * Adjusted Operating Profit 33.9 21.7 <General examples of adjustment items> • Acqui
Slide 20: CAPEX, Depreciation and R&D Expenses
CAPEX, Depreciation and R&D Expenses CAPEX & Depreciation (billion JPY) Amortization of acquired 89.5 85.0 intangible assets Lease depreciation 60.8 (IFRS16) is not included 52.5 47.7 in FY19, FY20 Q1 results 43.6 42.0 44.0 and FY20 Guidance 15.7 15.7 14.6 15.7 14.5 Expand investment in production c
Slide 21: Cash Flows
Cash Flows Operating CF Investing & Financing CF +17.4 +27.7 (billion JPY) 10.0 Redemption 10.4 of bonds 5.8 Dividends Others 1.7 70.0 13.3 Income 12.1 taxes Depreciation Working 17.9 and capital 16.1 amortization increase Profit CAPEX Long-term before tax debt 212.0 166.9 Cash at the CAPEX = C.i.P.
Slide 22: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity Annual impact of 1 JPY depreciation (billion JPY) USD EUR CNY Revenue 1.7 0.8 2.4 Adjusted Operating Profit 0.0 0.5 1.3 <Reference> Impact when JPY is depreciated by 10% North Latin EMEA Asia America America EUR Others CNY Others Adjusted Operating Profit -0.1 1.0 6.5 1.
Slide 23: 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 Conversion Contingent Number of shares Maturity principal amount Coupon Price conversion price required to be issued (billion JPY) (JPY) (JPY) for conversion De
Slide 24: IR Contact
IR Contact Terumo Corporation Investor Relations 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 intended to