Terumo Corporation · TSE:4543
Terumo — H1 FY2020 Earnings Presentation
26 slides from Terumo's earnings presentation, November 2020
Slide 1: First-half results for fiscal year ending March 2021
I am the CAFO, Muto. I will now explain the first-half results for the fiscal year ending March 2021. 1
Slide 2: Safe Harbor for Forward-Looking Statements and Use of Document
| a 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
Slide 3: Summary of overall results
First, a summary of the overall results. Sales revenue of the Cardiac and Vascular Company was negatively affected by a drop in demand in the 1st quarter, but we saw a significant recovery in the 2nd quarter. Impact on the General Hospital and Blood and Cell Technologies companies remained minor, re
Slide 4: Summary of overall results (continued)
profit. 3
Slide 5: Variance analysis of adjusted operating profit
This is the variance analysis of adjusted operating profit, compared to the previous year. “GP Decrement by Sales Decrease” had a 9.8-billion-yen negative impact, largely due to decreased sales of the Cardiac and Vascular Company. However, a marked recovery in sales closed much more of the year-on-
Slide 6: Variance analysis of adjusted operating profit (continued)
Work related to European MDR and IT Investment progressed as planned, resulting in 600 million and 500 million yen negative impacts, respectively, as progress led to increased spending year-on-year. SG&A decrease was due to lower promotional and travel costs, as limitations on access to hospitals an
Slide 7: Revenue by region
Next is revenue by region. In addition to the 2nd-quarter recovery trend of the Cardiac and Vascular Company in Japan, the General Hospital Company, which accounts for the largest percentage of sales there, returned to the levels of the previous year, reducing the gap between year-on-year sales leve
Slide 8: Revenue by company
Next is revenue by company. In the 1st Half as a whole, the Cardiac and Vascular Company was negatively impacted by decreased demand due to the postponement of elective procedures using its products. However, looking at just the 2nd quarter, we can see a significant recovery in all segments. The Gen
Slide 9: Cardiac and Vascular Company
Here is Cardiac and Vascular Company. Sales revenue was minus 13% for the 1st Half. On its own, the 2nd quarter alone recovered to just minus 2%. TIS and CV grew in the low single digits, Neurovascular was approximately the same as the previous year, and Cardiovascular saw positive growth, resulting
Slide 10: General Hospital Company
Next, the General Hospital Company. Sales revenue was impacted in General Hospital and Pharmaceutical products by decreased demand caused by limitations on patient hospital visits. However, pain management products and the Alliance Business posted double-digit growth, while demand increased for ther
Slide 11: Blood and Cell Technologies Company
Next is Blood and Cell Technologies Company. In sales revenue, the blood center-oriented business experienced decreased demand for whole blood collection in Asia, but a 1st-quarter software update to raise efficiency in component collection systems continued to be well received in the 2nd quarter. F
Slide 12: Revision of guidance
Next is our revision of guidance. As I mentioned at the beginning, the Cardiac and Vascular Company recovery in the 2nd quarter exceeded expectations. As a result, the progress toward recovery of both sales revenue and profit are ahead of the guidance we announced in August. Therefore, we have decid
Slide 13: Second-half outlook
Now I will explain about our thinking regarding the 2nd Half outlook. First, sales revenue. As I mentioned earlier, Cardiac and Vascular Company-related elective procedures began to recover in the 2nd quarter, leading to a notable sales recovery. We estimate that there were significant effects as th
Slide 14: Second-half outlook: sales and expenses
Therefore, regarding sales revenue, we revised our thinking to be that the recovery trend will continue into the 2nd Half, but that the recovery trajectory will level off more than initially anticipated, reaching the level of the previous year in the 4th quarter. Although 1st Half sales were stronge
Slide 15: Major topics for the 2nd quarter
Here are the major topics for the 2nd quarter. As a Terumo Group, we donated goods and funds through the Japan Red Cross to support relief efforts for “Heavy rains in July 2020” in Japan. Company topics include interventional oncology and peripheral intervention items for the Cardiac and Vascular Co
Slide 16: Pipeline status for the fiscal year
This is the final slide, and shows our pipeline status for the fiscal year. I will omit the details, but new product launches are generally on schedule. We will continue to watch for any impact from COVID-19 on those schedules. The possibility of a renewed spread of COVID-19 remains in the 2nd Half.
Slide 17: Reference
Reference (©TERUMO CORPORATION “TERUMO 14
Slide 18: 1H FY20 Revenue and Growth by Region
Ml 1H FY20 Revenue and Growth by Region z| JPY) easiness] Japan| Overseas Japan toa | easiness] Japan| Subtotal | Europe | Americas | China Asia (YoY%): FXN @TERUMO CORPORATION 15 /22 ~TERUMO 15
Slide 19: Operating Expenses
Ml Operating Expenses YoY% a 1H FY19 1H FY20 YoY% (FXN) Salaries & Wages Sales Promotion (billion JPY) Logistical Costs Depreciation & Amortization ceTERUMO CORPORATION 16 /22 “TERUMO
Slide 20: Quarterly Results
MH Quarterly Results (billion JPY) Average USD 107JPY =——s 109JPY.=—s—(ié‘iLOPY.=——=—t=«<‘aOBPY.=————~*«SLG PY Exchange $ + $ + $ Rate EUR 19JPY = 120JPY. = 120PY ss HQUPY 124 PY (TERUMO CORPORATION 17 122 “TERUMO
Slide 21: Adjusted Operating Profit: Adjustments
Ml Adjusted Operating Profit: Adjustments + Nonlife insurance income + Loss on disaster + Other one-time profits & losses (billion JPY) Operating Profit 59.2 41.8 Adjustment 1. Amortization of acquired intangible assets +78 +72 Adjustment 2. Non-recurring profit or loss +0.0 +2.3* Adjusted Operating
Slide 22: CAPEX, Depreciation and R&D Expenses
Ml CAPEX, Depreciation and R&D Expenses I CAPEX & Depreciation 89.5 85.0 (billion JPY) Amortization of acquired intangible assets I Lease depreciation / 608 (IFRS16) is not included in / A477 52.5 FY19, 1H FY20 results and 43.6 42.0 / 44.0 15.7 FY20 Guidance 145 14.6 15.7 ioe | Expand investment in
Slide 23: Cash Flows
Ml Cash Flows Operating CF Investing & Financing CF +41.6 +11 (billion JPY) Redemption of bonds a Dividends es i 70.0 Depreciation Working and capital 77) amortization increase | S)<) 1 Others CAPEX Long-term Profit debt before tax CNS 166.9 ~~" I Cash at the CAPEX = C.L.P. record basis Cash at the
Slide 24: Foreign Exchange Sensitivity
Ml Foreign Exchange Sensitivity Annual impact of 1 JPY depreciation (billion JPY) Le es es | 0.8 2.4 Revenue Le Adjusted Operating Profit 0.0 0.5 1.3 <Reference> Impact when JPY is depreciated by 10% | __ Asia a Sees 3.6 Adjusted Operating Profit -0.1 1.0 6.5 les} 2.0 21 /22 (©TERUMO CORPORATION “TE
Slide 25: The Status of Convertible Bonds
Ml The Status of Convertible Bonds I 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 ii jal amount | Coupon Price conversion price required to be issued (JPY) (JPY) for conversion Dec. 2019 50
Slide 26: <TERUMO
<TERUMO 23