Terumo Corporation · TSE:4543
Terumo — FY2019 Earnings Presentation
28 slides from Terumo's earnings presentation, May 18, 2020
Slide 1: Financial Results for the Fiscal Year Ended March 31, 2020 (FY2019)
Financial Results for the Fiscal Year Ended March 31, 2020 (FY2019) May 18, 2020 Naoki Muto Chief Accounting and Financial Officer Terumo Corporation
Slide 2: Despite the COVID-19 Impact, Highest-ever Revenue and Operating Profit
Despite the COVID-19 Impact, Highest-ever Revenue and Operating Profit (billion JPY) YoY% FY18 FY19 YoY% (FXN) Revenue 599.5 628.9 +5% +8% Gross Profit 326.5 (54.5%) 343.9 (54.7%) +5% +9% SG&A Expenses 178.7 (29.8%) 184.5 (29.3%) +3% +6% R&D Expenses 47.7 ( 8.0%) 50.6 ( 8.0%) +6% +8% Other Income an
Slide 3: FY19 Results in Comparison to the Original Guidance
FY19 Results in Comparison to the Original Guidance (billion JPY) Adjusted Operating Revenue Comments Profit Amount variance Amount variance Lower revenue due to the COVID-19 impact(China) and sluggish result of Cardiac FY19 Results 350.6 25% 86.9 DES, etc. Higher profit due to partially and -6.4 +1
Slide 4: Adjusted Operating Profit Variance Analysis
Adjusted Operating Profit Variance Analysis (billion JPY) 5.7 4.9 Gross Price 2.9 margin -2.9 MDR 8.1 JP -1.4 Reimburse- IT SG&A ment 5.7 30.8 invest- increase 1.5 -2.0 ment R&D Others -1.5 increase 7.8 FX 2.7 COVID-19 G/P impact increment 14.4 15.5 by sales 125.0 122.1 increase 110.6 106.6 FY18 FY1
Slide 5: Revenue by Region
Revenue by Region FY19 FY18 Revenue Year-on-Year Revenue Comparison 100% = 628.9 B JPY billion JPY YoY% Comments ( ) FXN Japan: Strongly driven by pain management products and Alliance business in GH. Stable growth as a whole 196.3 Japan +4% 31% 188.5 Europe: Huge negative FX impact. Steadily grew e
Slide 6: Revenue by Business Segment
Revenue by Business Segment FY19 FY18 Revenue Year-on-Year Revenue Comparison 100% = 628.9 B JPY billion JPY YoY% Comments ( ) FXN Continuous growth close to 20% in Neurovascular business. Double digit Cardiac growth excluding FX impact despite the 350.6 +7% and COVID-19 impact mainly in China in Q4
Slide 7: Cardiac and Vascular: Double Digit Growth in Revenue and Profit Excluding FX
Cardiac and Vascular: Double Digit Growth in Revenue and Profit Excluding FX (billion JPY) FY18 FY19 YoY% Major Topics Impact ( ) FXN 350.6 328.5 TIS: Despite the COVID-19 impact in Q4, showed double digit growth excluding FX impact +13.0 +7% Neurovascular: Close to 20% growth driven Revenue (+10%)
Slide 8: General Hospital: Revenue and Profit in Line with the Guidance
General Hospital: Revenue and Profit in Line with the Guidance (billion JPY) FY18 FY19 YoY% Major Topics Impact ( ) FXN General hospital products: Impact of the financial challenge in Indonesian national 165.8 171.0 health insurance, etc. -0.3 Pharmaceutical: Driven by pain Revenue +3% management pr
Slide 9: Blood and Cell Technologies: Exceeded the Guidance Excluding FX Impact
Blood and Cell Technologies: Exceeded the Guidance Excluding FX Impact (billion JPY) FY18 FY19 YoY% Major Topics Impact ( ) FXN Blood center solutions: Driven by automated blood collection system, software update and 105.0 107.2 increased demand of plasma collection from +2% Revenue (+6%) convalesce
Slide 10: FY19 Year-end Dividend Proposal: 14.0 JPY
FY19 Year-end Dividend Proposal: 14.0 JPY FY19 annual dividend proposal: 28.0 JPY No change from the original guidance, considering the COVID-19 impact FY19 Results Profit for the year (B JPY) 85.2 EPS (JPY) 114 Dividend proposal/share 28.0 Interim 14.0 (JPY) Year-end 14.0 Dividend payout ratio 24.6
Slide 11: Major Topics in FY19 Q4
Major Topics in FY19 Q4 Selected as “the Health and Productivity Stock Selection" for six consecutive years (Mar) Corporate Committed to supporting relief and recovery efforts from the Australian bushfire disaster (Mar) Greenhouse Gas Reduction Target Approved by the SBTi (Mar) Announced manufacturi
Slide 12: All Companies Contribute to COVID-19 Prevention and Treatment
All Companies Contribute to COVID-19 Prevention and Treatment Cardiac and Vascular: ECMO for severe patients Percutaneous cardiopulmonary support system Having started to improve capacity since Jan. 2020 Support teams of physicians, technicians and nurses General Hospital: Infection prevention from
Slide 13: FY19 New Product Pipeline
FY19 New Product Pipeline Category Products Region Launch Category Products Region Launch Closure device for distal General Next generation of syringe pump Access JP FY21 hospital JP FY20 radial approach Coronary PTCA balloon EU, Narcotic analgesic for Launched Asia postoperative pain management JP
Slide 14: FY20 Annual Guidance
FY20 Annual Guidance Not determined yet since it is difficult to rationally estimate the COVID-19 impact on the guidance at the moment To be promptly disclosed when it becomes available Qualitative estimation of the COVID-19 impact Relatively large on Cardiac and Vascular, and its extent may vary by
Slide 15: The COVID-19 Framework of Cardiac and Vascular Procedures
The COVID-19 Framework of Cardiac and Vascular Procedures Impact varies by procedural type (urgent/elective) Not only procedural types but also various factors have influence on sales revenue e.g. financial situation of hospitals, hospital-based/office-based, locality, guidelines from medical societ
Slide 16: Limited COVID-19 Impact on GH and TBCT
Limited COVID-19 Impact on GH and TBCT General hospital products and Pharmaceutical: The products are majorly related to medical infrastructure and hospitalization General DM Healthcare: Diabetes is a chronic disease and DM products are for homecare. Hospital In Healthcare, carefully monitor recoil
Slide 17: FY20 New Product Pipeline
FY20 New Product Pipeline Having integrated certain impact by COVID-19, still need to carefully monitor further delay in R&D, etc. Category Products Region Category Products Region Steerable sheath JP Vascular Abdominal aortic stent graft US Coronary graft PTCA balloon China Syringe pump JP (manufac
Slide 18: FY20 Liquidity and Cash Allocation
FY20 Liquidity and Cash Allocation 40 B JPY fund-raised in FY19 Managing (FY19 year-end cash on hand: worth approx. 3.2 months of revenue) Liquidity For further preservation purpose, having concluded commitmentline contracts for 60 B JPY Continue investments for further growth post COVID-19 * Pursue
Slide 19: Reference
Reference ©TERUMO CORPORATION 19 /28
Slide 20: FY19 Revenue and Growth by Region
FY19 Revenue and Growth by Region (billion JPY) Business Overseas Japan Total Segment Subtotal Europe Americas China Asia Cardiac and 50.9 (+6%) 299.6 (+11%) 86.2 (+8%) 138.4 (+14%) 39.5 (+9%) 35.6 (+13%) 350.6 (+10%) Vascular Out of C&V Interventional 38.0 (+6%) 246.0 (+13%) 70.1 (+9%) 109.5 (+16%)
Slide 21: Operating Expenses
Operating Expenses (billion JPY) YoY% FY18 FY19 YoY YoY% (FXN) Salaries & Wages 87.4 89.8 +2.4 +3% +6% Sales Promotion 18.2 19.7 +1.4 +8% +10% Logistical Costs 13.6 13.9 +0.3 +2% +5% Depreciation & Amortization 14.3 18.9 * +4.6 +32% +35% Others 45.1 42.3 * -2.9 -6% -4% SG&A Expenses Total 178.7 (29.
Slide 22: Quarterly Results
Quarterly Results (billion JPY) FY18Q4 FY19Q1 Q2 Q3 Q4 (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) Revenue 155.9 152.5 154.8 162.9 158.8 Gross Profit 84.3 (54.1%) 85.2 (55.8%) 86.3 (55.8%) 87.2 (53.5%) 85.3 (53.7%) SG&A Expenses 46.7 (29.9%) 44.5 (29.2%) 45.1 (29.1%) 47.2 (29.0%) 47.7 (30.1%)
Slide 23: Adjusted Operating Profit: Adjustments
Adjusted Operating Profit: Adjustments (billion JPY) FY18 FY19 Operating Profit 106.6 110.6 Adjustment 1. Amortization of acquired intangible assets +14.6 +15.7 Adjustment 2. Non-recurring profit or loss +0.9 -1.3 * Adjusted Operating Profit 122.1 125.0 <General examples of adjustment items> • Acqui
Slide 24: CAPEX and R&D Expenses
CAPEX and R&D Expenses (billion JPY) Expand investment in Amortization of 89.5 production capacity and acquired space as well as IT in FY19 intangible assets Amortization of acquired and goodwill intangible assets Under IFRS since FY17 60.8 • Depreciation includes 45.4 47.7 amortization of non- 43.6
Slide 25: Cash Flows
Cash Flows Operating CF Investing & Financing CF +117.5 -73.6 (billion JPY) 24.8 52.4 Income 16.6 taxes Working Depreciation capital and increase amortization 106.5 89.5 3.5 Others 40.0 CAPEX 20.5 166.9 Dividends Short-term 123.0 Profit debt before tax Cash at the CAPEX = C.i.P. record basis Cash at
Slide 26: 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 27: 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 28: 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