Slide 1: Financial Results for the First Quarter of Fiscal Year Ending March 31, 2024
Financial Results for the First Quarter of Fiscal Year Ending March 31, 2024 (FY2023) August 9, 2023 Naoki Muto Chief Accounting and Financial Officer Terumo Corporation Hello. I am the CAFO, Muto. I will give an overview of our earnings results for the 1st quarter of the fiscal year ending March 31
Slide 2: Forward-Looking Statements and Use of Document
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 events or performanc
Slide 3: Highlights
Highlights Revenue Strong global demand continued for highest-ever quarter C&V and TBCT grew in double digits to drive the Group overall Operating profit -1% YoY growth excluding FX. Steady progress toward annual guidance Effects of profitability improvement accrued (price policy and cost reduction)
Slide 4: P&L
P&L Revenue: Strong global demand continued; Double-digit growth by TIS, Blood center business, Vascular graft to drive the Group overall Operating profit: Price policy revision and cost reduction effects accrued. Expanded OPEX for therapeutic devices 100M JPY FY22 Q1 FY23 Q1 YoY% YoY% (FXN) Revenue
Slide 5: Margin Ratio Recovery from FY22 Q4
Margin Ratio Recovery from FY22 Q4 C&V: Cardiac and Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies Quarterly Adjusted Operating Profit Trend 24.9% 23.5% ( ) FY23 Annual Guidance Adjusted Operating Profit% 20.6% C&V (23.9%） 17.5% 11.8% 14.3% TBCT （8.1%） 9.7% 13.8% Terumo*（1
Slide 6: Operating Profit Variance Analysis
Operating Profit Variance Analysis (100M JPY) G/P increment by sales increase C&V and TBCT were drivers Gross margin Price Absorbed some inflation increase from G/P Gross FY22 2H by cost reduction, product +13 increment margin by Reimbur- SG&A R&D mix improvement FX sales sement Price increase price
Slide 7: 1.5 billion yen negative in stock. Next slide, please.
1.5 billion yen negative in stock. Next slide, please. 6
Slide 8: Profitability Improvements Included in FY23 Annual Guidance
Profitability Improvements Included in FY23 Annual Guidance (100M JPY) Price (= 1 Price policy) +12.0B Gross margin +5.8B Inflation -2.5B Product mix improvement +1.7B Temporary expense return to +3.0B normal 2 VC2 +3.6B ©TERUMO CORPORATION 7 / 13 Regarding the annual guidance, this outlines the two
Slide 9: Profitability Improvement Progress
Profitability Improvement Progress Q1 progress Q1 progress 1 Price policy 2 VC2 impact 12.0B JPY Q2 3.6B JPY Q2 2H 2H Reimbursement price revision Q1 Costa Rica transfer positive impact, along with results cost reduction impact global price policy revision Further impact through automation, Expand t
Slide 10: Revenue by Region
Revenue by Region C&V: Cardiac and Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies, TIS: Interventional Systems, PS: Pharmaceutical Solutions FY23 Q1 Revenue (100M JPY) Comments YoY% FY23 Q1 ( ) FXN Regional FY21 544 TIS, Neurovascular, Vascular graft of C&V grew in breakdo
Slide 11: C&V: EU, US drove strong sales; profit progress as planned
C&V: EU, US drove strong sales; profit progress as planned (C&V: Cardiac and Vascular, TIS: Interventional Systems) (100M JPY) Q1 Q1 Comments YoY ( ) FXN 1,306 TIS: Number of procedures in Japan recovered gradually; overseas grew in double digits led by EU and US. 1,168 Steady China COVID recovery +
Slide 12: TMCS: Reduced sales, profit; progress as planned toward annual guidance
Sell-off of nutrition business, PS delivery fluctuations impacts. TMCS: Reduced sales, profit; however, progress as planned toward annual guidance (TMCS: Medical Care Solutions) (100M JPY) Q1 Q1 Comments YoY ( ) FXN HCS: Minus YoY due to sell-off of nutrition business. 438 460 437 Hospital Double-di
Slide 13: TBCT: Large profit increase driven by solid sales to blood centers
TBCT: Large profit increase driven by solid sales to blood centers (TBCT: Blood and Cell Technologies) (100M JPY) Q1 Q1 Comments YoY ( ) FXN 409 Blood Center Strong global sales of component collection systems 345 Solutions: and whole blood products, led by Asia and US +59 Revenue 283 Therapeutic Ce
Slide 14: 20B JPY Share Repurchase Decision by the Board
20B JPY Share Repurchase Decision by the Board, as of Aug 9th Shareholder return policy: Continue stable dividend increase, aim for total return ratio of 50% in GS26 period This decision brings projected FY23 total return ratio to 52% Plan to cancel the shares after repurchase Share repurchase (100M
Slide 15: Reference
Reference ©TERUMO CORPORATION 14 / 13 14
Slide 16: Revenue by Segment and Region
Revenue by Segment and Region ©TERUMO CORPORATION 15 / 13
Slide 17: Revenue and Operating Profit Quarterly Trend
Revenue and Operating Profit Quarterly Trend Revenue: FY23 Q1 YoY +9%, QoQ +6% OP : FY23 Q1 YoY -3%, QoQ +24% (100M JPY) 2,153 2,147 2,060 2,022 1,973 1,788 1,798 1,717 1,729 TBCT Revenue TMCS Revenue C&V Revenue Terumo OP 362 304 375 296 296 255 286 238 215 FY21 FY22 FY23 FY21 FY22 FY23 FY21 FY22 F
Slide 18: Margin Ratio Recovery from FY22 Q4
Margin Ratio Recovery from FY22 Q4 C&V: Cardiac and Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies Quarterly Adjusted Operating Profit Trend 24.9% 23.5% ( ) FY23 Annual Guidance Adjusted Operating Profit% 22.9%** 20.6% C&V (23.9%） 17.5% 15.4%** 11.8% 14.3% TBCT （8.1%） 9.7%
Slide 19: P&L (QoQ)
P&L (QoQ) (100M JPY) FY22 Q1 Q2 Q3 Q4 FY23 Q1 (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) Revenue 1,973 2,060 2,147 2,022 2,153 Gross Profit 1,016 (51.5%) 1,054 (51.1%) 1,114 (51.9%) 990 (49.0%) 1,098 (51.0%) SG&A Expenses 566 (28.7%) 605 (29.4%) 615 (28.6%) 597 (29.5%) 651 (30.2%) R&D Expense
Slide 20: SG&A (QoQ)
SG&A (QoQ) (100M JPY) FY22 Q1 Q2 Q3 Q4 FY23 Q1 (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) Labor 298 312 316 307 336 Promotion 46 44 52 45 49 Logistics 44 47 49 44 47 Depreciation 56 59 60 58 58 Others 123 142 138 143 161 SG&A total 566 605 615 597 651 （%） (28.7%) (29.4%) (28.6%) (29.5%) (30.2
Slide 21: SG&A (YoY)
SG&A (YoY) (100M JPY) YoY% FY22 Q1 FY23 Q1 YoY YoY% excluding FX impact Salaries & Wages 298 336 38 13% 8% Sales Promotion 46 49 3 6% 2% Logistics Costs 44 47 4 8% 4% Depreciation & Amortization 56 58 2 3% 0% Others 123 161 39 31% 27% SG&A Expenses Total 566 651 85 15% 10% （%） (28.7%) (30.2%) R&D Ex
Slide 22: Adjusted Operating Profit: Adjustments
Adjusted Operating Profit: Adjustments (100M JPY) FY22 Q1 FY23 Q1 Operating Profit 304 296 Adjustment 1. Amortization of acquired 46 46 intangible assets Adjustment 2. Non-recurring profit or loss 9 2 Adjusted Operating Profit 359 345 <General examples of adjustment items> • Acquisition related cost
Slide 23: CAPEX, Depreciation and R&D Expenses
CAPEX, Depreciation and R&D Expenses (100M JPY) FY23 FY20 FY21 FY22 FY23 Q1 Guidance (100M JPY) CAPEX 772 692 758 135 800 Depreciation 484 532 635 163 675 Amortization of 146 161 188 46 175 acquired intangible assets Others 338 371 447 117 500 CAPEX = C.i.P. record basis excluding lease. Lease depre
Slide 24: Cash Flows (Q1)
Cash Flows (Q1) Operating CF Investing & Financing CF +114 -387 (100M JPY) 180 176 Depreciation Income 188 298 and taxes, etc. amortization 135 Working Profit capital 100 CAPEX before tax gains and Redemption 154 3 losses of bonds 1,873 143 Dividend Others 1,601 Cash at the end CAPEX = C.i.P. record
Slide 25: FY23 Q1 FX Impact Breakdown (Flow, Stock)
FY23 Q1 FX Impact Breakdown (Flow, Stock) FX impact vs. FY22 Q1 -0.1B JPY Flow +1.4B JPY: EUR, CNY appreciation positive impact FY22 Q1 FY23 Q1 Rate (JPY) Variation Average rate Average rate EUR 138 150 11 CNY 19.6 19.6 -0 Stock -1.5B JPY: FX impact from elimination of unrealized profit on inventory
Slide 26: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity Annual impact of 1 JPY depreciation (Flow) (100M JPY) USD EUR CNY Revenue 22 11 39 Adjusted Operating Profit 0 5 23 Impact of 1 JPY depreciation (Stock) USD EUR CNY Adjusted Operating Profit -2.5 -0.6 -2.0 ©TERUMO CORPORATION 25 / 13
Slide 27: Product Pipeline
Product Pipeline Major Product Launch, Approval Status Segment General Name Product Name To FY22 FY23 Target Therapeutic (TIS) Drug-eluting coronary stent Ultimaster Nagomi JP launched EU launch Nagomi AZUR Hydro Coil, Framing Coil CX, Soft3D(JP) Hydro Coil, CX Therapeutic (TIS) Peripheral coil syst
Slide 28: ~“TERUMO
~“TERUMO 27