Terumo Corporation · TSE:4543
Terumo — Q3 FY2013 Earnings Presentation
26 slides from Terumo's earnings presentation, Feb 4, 2014
Slide 1: Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2014
Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2014 (FY2013) Terumo Corporation February 4, 2014
Slide 2: Highlights in Q3
Highlights in Q3 Operating income: growing slightly slower than forecast Corporate Consistent improvement in quarter by quarter operating margin Maintained strong performance in domestic Interventional Systems (IS) Cardiac & Strong in US IS, slight slowdown in EU IS Vascular Steady growth in ne
Slide 3: Q3 Result: Sustained Increase in Sales and Profit
Q3 Result: Sustained Increase in Sales and Profit (billion of yen) Q3 YTD Q3 YTD YoY% FY2012 FY2013 Net Sales 295.7 345.3 +17% Gross Profit 153.5 (51.9%) 178.7 (51.7%) +16% SG&A Expenses 91.5 (31.0%) 108.0 (31.2%) +18% R&D Expenses 19.4 (6.5%) 22.4 (6.5%) +16% Operating Income 42.6 (14.4%) 48.3 (14.
Slide 4: Q3 YTD: Net Sales and Growth by Region
Q3 YTD: Net Sales and Growth by Region Interventional Systems marked 10% growth. General Hospital slows down. (billion of yen) Outside Business Japan of Japan Asia & G. Total Segment Total Europe Americas China Others General 95.6 28.3 8.7 6.6 0.9 12.1 123.9 Hospital (- 0%) ( 4%) (- 5%) (- 0%) (- 13
Slide 5: SG&A Expenses
SG&A Expenses Managed general administrative expense within the range of increase in sales Ongoingly devote R&D to focus business area (billion of yen) Q3 YTD * Q3 YTD YoY YoY% FY2012 FY2013 General Administrative Total 105.7 108.0 +2.3 +2% R&D Expenses 21.5 22.4 +0.9 +4% SG&A Expenses Total 127.2
Slide 6: Operating Income Variance Analysis
Operating Income Variance Analysis Steadily improved profitability by sales increase and effective management of SG&A 1.8 (billion of yen) 5.6 Lowered 2.7 plant productivity Price 1.2 G/P erosion Device 1.4 SG&A increment tax in US Effect of by sales 2.3 temporary R&D increase factors 0.9 10.4 occur
Slide 7: Quarterly Results
Quarterly Results Consistently improved profitability (billion of yen) Q3 FY12 Q4 FY12 Q1 FY13 Q2 FY13 Q3 FY13 (Oct-Dec) (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) Net Sales 103.9 106.5 111.1 114.9 119.2 Gross 52.9 52.2 57.0 60.1 61.5 Profit (50.9%) (49.0%) (51.3%) (52.3%) (51.6%) SG&A 38.5 41.6 43.7 4
Slide 8: Gross Margin, SG&A Expenses Ratio, Operating Margin
Gross Margin, SG&A Expenses Ratio, Operating Margin Steadily improved profitability even without FX tailwind (%) 51.9 51.1 52.0 51.5 Gross Margin 48.9 Mainly impacted by General Hospital 39.2 39.3 36.9 37.3 36.6 SG&A Expenses Ratio Managed within the range of sales increase 15.0 14.7 14.9 11.8 O
Slide 9: Q3 Results to FY2013 Forecast
Q3 Results to FY2013 Forecast Improve operating income through sales increase and effective management of SG&A (billion of yen) FY2013 Q3 YTD Vs. Forecast Result Forecast Net Sales 460.0 345.3 75% Operating Income 70.0 (15.2%) 48.3 (14.0%) 69% Ordinary Income 67.5 (14.7%) 49.9 (14.5%) 74% Net Income
Slide 10: Operating Cash Flow
Operating Cash Flow Balance out growth investments, debt repayment, and return to shareholders (billion of yen) Operating Cash Flow Breakdown 64.8 Allocation 64.8 12.7 Increase in 3.6 29.3 working Contribution 2.7 capital Others of securities Capital Depreciation to retirement investment & benefit t
Slide 11: Progress in 2H New Product Pipeline
Progress in 2H New Product Pipeline Products already launched in Q3 Launched Products Business Product Region Coronary New PTCA balloon catheter JP Blood Data management system (TACSI application) EU New PTCA balloon catheter Management (Hiryu Plus) Needleless system JP Infusion System Smart Pump (i
Slide 12: Received CE Mark for Ultimaster
Received CE Mark for Ultimaster™ Employs bioresorbable polymer and abluminal coating for long-term result Short polymer absorption period of 3-4 months (Nobori: 9-12 months) Unique and thin stent design with cobalt chromium alloy to improve flexibility Aims to achieve the global revenue of 1
Slide 13: Strong Sales of New Neurovascular Intervention Products
Strong Sales of New Neurovascular Intervention Products Q3 YTD Occlusion balloon (Scepter) ：$10M, 30% share in globe (Own research) Coil assist stent (LVIS) ：$ 5M Steady progress in clinical Flow diverting stent (FRED) ：$ 5M study to expand sales area Aim to achieve global revenue of 8 billi
Slide 14: FX Assumption Revised, Full-year Forecast Remains Unchanged
FX Assumption Revised, Full-year Forecast Remains Unchanged Newly assumed US$1 = 100 yen (Q4: 102 yen) average exchange rate EUR1 = 134 yen (Q4: 139 yen) (billion of yen) FY2013 YoY% Forecast Net Sales 460.0 +14% Operating Income 70.0 (15.2%) +32% (Excl. Amortization) 85.0 (18.5%) +27% Ordinary Inco
Slide 15: Stock Split
Stock Split On Feb 4, 2014, the board of directors decided to conduct stock split Facilitate access to investors and improve liquidity Method: a two-for-one stock split of common stock Public notice date of the record date: February 5, 2014 (Wed) Record date: March 31, 2014 (Mon) Effecti
Slide 16: Reference
Reference 2014/2/4 ©Terumo Corporation 16/26
Slide 17: Net Sales by Region
Net Sales by Region (billion of yen) ＊ Consolidated: +18% (+4%) Q3 YTD Q3 YTD FY2012 FY2013 ( ) Excluding Foreign Exchange * Excluding Home Therapy Japan Outside of Japan +33% 52.9 +2% ＊ +32% Europe (+3%) 70.2 (+5%) 62.8 Americas +31% (+5%) 82.0 ＊ 139.7 142.1 153.7 203.2 +39% 12.5 China (+10%) 17.3
Slide 18: Net Sales by Business Segment
Net Sales by Business Segment (billion of yen) +5% ＊ +26% Q3 YTD Q3 YTD (+1%) (+6%) FY2012 FY2013 ( ) Excluding Foreign Exchange * Excluding Home Therapy +26% (+4%) ＊ 117.5 123.9 122.3 153.9 53.7 67.5 General Cardiac & Blood Hospital Vascular Management 2014/2/4 ©Terumo Corporation 18/26
Slide 19: Q3 Alone: Net Sales and Growth by Region
Q3 Alone: Net Sales and Growth by Region (billion of yen) Business Outside of Japan Japan Total Asia & G. Total Segment Europe Americas China Others General 32.9 9.8 3.1 2.2 0.3 4.2 42.7 Hospital (- 5%) ( 8%) ( 6%) (- 2%) (- 8%) (16%) (- 3%) Cardiac & 12.6 40.5 15.0 16.2 4.9 4.4 53.1 Vascular (8%) (
Slide 20: Gross Margin Variance Analysis
Gross Margin Variance Analysis (%) 0.7 1.8 Lowered 0.4 plant Price 0.3 productivity erosion Device 0.5 FX tax in US Effect of temporary factors 51.9% occurred in 51.7% Q3YTD, FY12 (inventory re- evaluation, etc) Q3 YTD Q3 YTD FY2012 FY2013 <Reference> 1H Results 52.4% +2.2 -1.1 -0.5 -0.3 -0.9 51.8%
Slide 21: SG&A Expenses
SG&A Expenses (billion of yen) Q3 YTD Q3 YTD YoY YoY% FY2012 FY2013 Salaries & Wages 38.8 47.2 +8.4 +22% Sales Promotion 9.0 10.6 +1.6 +19% Logistical Costs 7.6 8.1 +0.5 +6% Depreciation & Amortization 13.2 16.7 +3.5 +26% Others 22.9 25.4 +2.5 +11% General Administrative Total 91.5 (31.0%) 108.0 (31
Slide 22: Gross Margin, SG&A Expenses Ratio, Operating Margin
Gross Margin, SG&A Expenses Ratio, Operating Margin (%) Gross Margin 51.3 52.3 51.6 50.9 49.0 SG&A Expenses 37.0 39.1 39.3 37.4 36.7 Ratio 9.9 Operating Margin 13.9 14.9 14.9 12.0 Q3 Q4 Q1 Q2 Q3 FY2012 FY2013 2014/2/4 ©Terumo Corporation 22/26
Slide 23: CAPEX, R&D Expenses
CAPEX, R&D Expenses (billion of yen) FY2013 Q3 YTD, FY2013 Forecast Result CAPEX 45.0 50.0 * 40.4 (81%) Depreciation & Amortization 37.0 29.3 (79%) R&D Expenses 30.0 22.4 (75%) * Advanced Yamaguchi factory 5 billion JPY investment originally planned in FY14 %: Progress to forecast CAPEX: acquisiti
Slide 24: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity (billion of yen / year) US$ EUR Net Sales 1.8 0.7 Operating Income 0.3 0.4 2014/2/4 ©Terumo Corporation 24/26
Slide 25: Changes of Quarterly Average Exchange Rates
Changes of Quarterly Average Exchange Rates JPY 137 129 131 130 122 EUR (FY2013) 105 110 103 EUR (FY2012) 98 90 99 US$ (FY2013) 100 99 92 US$ (FY2012) 80 79 81 70 Ｑ１ Ｑ２ Ｑ３ Ｑ４ 2014/2/4 ©Terumo Corporation 25/26
Slide 26: 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