Terumo Corporation · TSE:4543
Terumo — FY2017 Earnings Presentation
29 slides from Terumo's earnings presentation, May 2018
Slide 1: Financial results for the period ended March 31, 2018
I, Kitabatake, will now explain our financial results for the period ended March 31, 2018. First, financial results are expressed on an IFRS basis beginning with this period. 1
Slide 2: FY17 earnings overview
The increase and decrease percentages shown are IFRS‐based. The next slide explains differences between IFRS and JGAAP figures; here I will explain our results on an IFRS basis. The earnings overview is that we achieved our highest‐ever results in revenue and all profit categories. In revenue, all b
Slide 3: Impact of IFRS versus JGAAP differences
Here we have organized the main impacts on Terumo of the differences between JGAAP and IFRS. There is a lot of detail here, but there are two main impacts. One is the handling of expenses; you can see this represented by the green arrows. A part of these is the shift toward the cost of sales. The re
Slide 4: IFRS treatment of non-operating and extraordinary items
we handled one‐time or non‐operating income/expenses and extraordinary income or expenses after calculating operating income, but under IFRS most of these will come up to be included in the operating profit number. This means that operating profit will be impacted by one‐time occurrences, and simply
Slide 5: Adjusted Operating Profit
On this slide you can see Adjusted Operating Profit. As I mentioned, IFRS operating profit includes a great deal of what were non‐operating and extraordinary income and expenses under JGAAP. Therefore, when a major one‐time event occurs going forward, it may have the effect of distorting the actual
Slide 6: Profit variance analysis
As I mentioned, this profit variance analysis is a breakdown of adjusted operating profit I just described. The increase in gross profit and price erosion are the same, and unchanged from ones with JGAAP. However, we do have some differences in gross profitability, increased sales investment cost, a
Slide 7: Revenue by region
The previous pattern of revenue by region is unchanged. Japan had a slight increase and regions outside Japan posted double‐digit growth. One point I would like to mention is the impact of AngioSeal revenue: It might be asked why AngioSeal strongly pushed up revenue, but there was only a slight incr
Slide 8: Revenue by company
The numbers by company show that, as usual, the Cardiac & Vascular Company is growing rapidly. Blood Management also grew in double digits. General Hospital grew slightly. 7
Slide 9: Cardiac & Vascular Company
Cardiac & Vascular Company saw strong growth in both its existing and acquired business revenue, which resulted in a large increase in operating profit. The operating profit is expressed here as adjusted operating profit, as I have explained. This can be viewed as essentially the same as the busines
Slide 10: General Hospital Company
Here is General Hospital Company. General Hospital revenue was anticipated to grow 1% in the guidance; that number came in slightly lower, but profit ended up growing 9%, strongly outperforming the guidance of 3%. One other thing I want to mention regarding General Hospital earnings is that the oper
Slide 11: Blood Management Company
In Blood Management, revenue is growing well, but there is one point to explain, in adjusted operating profit. As you can see here, in the previous fiscal year operating profitability was 16%, and then 14% in FY17. Despite that apparent decrease, the headline is "gaining back momentum." The reasons
Slide 12: Major topics from FY17
Next, we have the major topics from FY17; in the 4th quarter we had some items which fit Terumo well. We were selected for the 4th straight year as a Health & Productivity Stock. We won two awards for our internal program to provide employment support for cancer patients, from the Ministry of Health
Slide 13: FY17 new product pipeline
Here is the FY17 new product pipeline. Some items moved into FY18, but on the whole we feel that progress is steady. 12
Slide 14: FY18 guidance
Our guidance for FY18 is 3% top‐line growth, 5‐point operating profitability growth, and 3% adjusted operating profit growth. These numbers are much lower than the previous fiscal year. One major factor behind this is the lack of acquisition effect that we saw in FY17. Another factor is that there i
Slide 15: FY18: a period of large business growth
period of large business growth. 13
Slide 16: FY18 profit variance analysis
Here is the profit variance analysis. One thing I can say about the variance analysis is that the main factor behind FY18 operating profit growth will be increased revenue. In other words, gross profit growth due to increased revenue. This is the largest factor. Price erosion is especially large due
Slide 17: FY18 guidance by company
Commenting by company, one point is that Cardiac & Vascular revenue growth is 5%. That is with most of the 5‐billion‐yen impact of the reimbursement price revision hitting the Cardiac & Vascular Company. The FX impact, and, as I mentioned, the slowdown of the CV and Vascular businesses are also incl
Slide 18: FY18 product pipeline
Here is our FY18 product pipeline. This fiscal year, the new DES Ultimaster Tansei will come out in the 2nd half. Also, the peripheral products that were slightly delayed last year will come out this fiscal year. We will launch a next‐generation oxygenator this fiscal year as well. As you can see, w
Slide 19: Diabetes management and Dexcom CGM distribution
We announced this week that we have acquired the exclusive distribution rights to the Dexcom CGM product in Japan, and this will contribute to revenue starting in the second half of this year. In this DM business we previously sold single products such as the SMBG, and the very narrow Nanopass needl
Slide 20: Dividends
Finally, regarding dividends: we initially announced a dividend of 22 yen for the interim dividend and 22 yen for year end. However, at the time of the interim dividend, we increased these to 23 yen and 23 yen, respectively. Taking into account factors including the jump in results we saw for FY17,
Slide 21: Reference
“TERUMO Reference 19/27 19
Slide 22: FY17 Revenue and Growth by Region
FY17 Revenue and Growth by Region (billion yen) i Outside of Japan Eustess Japan G. Total Segment Subtotal Europe | Americas China Asia Cardiacand = 54.0 270.0 84.3 119.5 33.9 32.3 324.0 Vascular (+6%) (+22%) (+20%) (+26%) (+169) (+20%) (+19%) Out of C&V interventional 40.8 217.8 67.4 92.0 31.6 26.8
Slide 23: Operating Expenses (IFRS)
Operating Expenses (IFRS) (billion yen) Salaries & Wages 73.9 +10.5 +14% +11% Sales Promotion 15.6 APS +22 +14% +11% Logistical Costs 10.7 12.6 +19, +18% +15% Depression a 12.6 13.7 +11 +9% +7% Amortization Others 38.1 42.5 +4.4 +12% +9% SG&A Expenses Total ee os be te +20.1 +13% +10% eye 413 R&D Ex
Slide 24: Quarterly Results
Quarterly Results (billion yen) FY16Q4 Q4 Jan-Mar Jan-Mar Revenue 139.8 a393 145.3 15213) 150.8 74.3 75.9 7915) 83.2 80.7 Gross Profit (53.2%) (54.5%) (54.7%) (54.6%) (53.5%) 47.4 40.2 41.2 43.8 45.9 SGBA Expenses (34.0%) (28.9%) (28.4%) (28.7%) (30.4%) 9.2 8.5 9.8 10.7 12.4 R&D Expenses (6.6%) (6.1
Slide 25: CAPEX and R&D Expenses
CAPEX and R&D Expenses Amortization of acquired intangible assets and goodwill 44.7 45.4 41.4 40.7 ; 31.5 Depreciation 33.1 33.6 (billion yen) Amortization , of acquired intangible assets 43.6 42.0 43.0 CAPEX = C.i.P. record basis 47.5 413 FY17 FY18 Guidance -> IFRS @ Expand investment in production
Slide 26: FY17 Cash Flow (IFRS)
FY17 Cash Flow (IFRS) (billion yen) Operating CF Investment and Finance CF +114.5 -51.7 taxes ee ww ti id . seeing term debt oividends EB zation CAPEX Others 167.8 Profit 105.0 [iimaaba tax Cash at end of CAPEX = C.i.P. record basis Cash at end of FY16 Cash at end of each fiscal year is consistent w
Slide 27: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity (billion yen) Revenue 1.6 0.8 2.0 Adjusted Operating Profit 0.0 0.5 1.0 <Reference> Impact of +/-10% fluctuation North | Latin EMEA America | America Adjusted Operating -0.1 0.9 6.0 a3 17 chs) Profit “TERUMO 25/27 25
Slide 28: The Status of Convertible Bonds
The Status of Convertible Bonds ® Detail of the bonds (issued in Dec. 2014) Aggregate c A Contingent Number of A principal sebebrcletiad conversion shares required Maturity Coupon price : ; 5 amount trigger price to be issued for (billion yen) (yen) (yen) conversion Dec, 2019 50.0 0.0% 3,868 5,028 1
Slide 29: 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