Terumo Corporation · TSE:4543
Terumo — Q3 FY2016 Earnings Presentation
25 slides from Terumo's earnings presentation, Feb 9, 2017
Slide 1: Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2017 (FY2016)
Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2017 (FY2016) Terumo Corporation Managing Executive Officer Investor Relations, Corporate Communication Dept. Kazuaki Kitabatake February 9, 2017
Slide 2: Achieving Growth in Net Sales and Operating Income Excl. FX Impact
Achieving Growth in Net Sales and Operating Income Excl. FX Impact (billion yen) FY15 Q3 YTD FY16 Q3 YTD YoY% YoY% (FXN) Net Sales 396.0 374.4 -5% +4% Gross Profit 214.6 (54.2%) 205.3 (54.8%) -4% +6% SG&A expenses 127.2 (32.1%) 121.9 (32.6%) -4% +5% R&D Expenses 23.3 ( 5.9%) 24.5 ( 6.5%) +5% +13% Op
Slide 3: Extraordinary Gains & Losses, Income Taxes
Extraordinary Gains & Losses, Income Taxes (billion yen) FY15 FY16 Q3 YTD Q3 YTD Operating Income 64.1 58.9 YoY%: -8% FX 1H Q3 Q3YTD Non-operating -3.1 -6.7 FY15 -2.4 0.0 -2.4 Income and loss FY16 -6.6 +2.9 -3.7 Ordinary Income 61.0 52.2 YoY%: -14% Extraordinary FY15 Sale of land in Hatagaya +4.4 +4
Slide 4: Operating Income Variance Analysis
Operating Income Variance Analysis 3.5 (billion yen) 7.8 Business 4.4 mix Price 4.9 improve- Erosion G/P ment (3.6) improve- 3.1 JP 12.3 ment by Reimburse- SG&A Increase cost ment increase of R&D 68.5 reduction, 8.0 64.1 Revision due to G/P etc (4.2) sales force 1.6 increment expansion by sales in U
Slide 5: Net Sales by Region
Net Sales by Region FY16Q3YTD FY15Q3YTD Net Sales Year-on-Year Sales Comparison 100%＝374.4 BJPY billion yen YoY% Comments ( ) FXN Continuous good momentum in Neurovascular and infusion system. Reimbursement price cut. 139.6 Ended positive YoY impact from sales of new Japan -1% 38% 140.4 coronary the
Slide 6: Net Sales by Business Segment
Net Sales by Business Segment FY16Q3YTD FY15Q3YTD Net Sales Year-on-Year Sales Comparison 100%＝374.4 BJPY billion yen YoY% Comments ( ) FXN Overseas TIS and global neurovascular 186.6 achieved a double digit growth, driving 51% 50% Cardiac and -3% overall company growth Vascular 193.2 (8%) Continued
Slide 7: Cardiac and Vascular: Demonstrate Steady Performance While Having an Impact from Acquisition-Related Costs
Cardiac and : Demonstrate Steady Performance While Having an Impact Vascular from Acquisition-Related Costs (billion yen) FY15 FY16 YoY% Major Topics Impact Q3YTD Q3YTD ( ) FXN 193.2 1932 186.6 Negative Impact of FX - 23.0 1866 JPN: Reimbursement price cut. Ended positive -3% YoY impact from launch
Slide 8: General Hospital: Maintain Upward Trend in Profitability
General : Maintain Upward Trend in Profitability Hospital (billion yen) FY15 FY16 Major Topics Impact YoY% Q3YTD Q3YTD ( ) FXN Negative Impact of FX - 3.8 122.8 1228 119.0 1190 Overseas: Downsizing low profitable accounts - 1.0 -3% in EU and Latin Americas Sales (0%) IV catheter needles mainly drove
Slide 9: Blood Management: Remain in Steady Upward Trend for Profitability
Blood Management : Remain in Steady Upward Trend for Profitability (billion yen) FY15 FY16 YoY% Major Topics Impact Q3YTD Q3YTD ( ) FXN Negative Impact of FX - 9.7 80.0 800 68.7 Price declines for blood center products - 2.6 687 mainly in US -14% Sales (-2%) Negative impact from stagnant macro - 0.5
Slide 10: Major Topics in Q3
Major Topics in Q3 Owing to the company’s victim support activities in disaster area highly regarded, it’s compression stockings received “The Medical Health Science Award of JMHS 2016” from Corporate Japanese Society of Medical Health Science (Oct) Announced adoption of IFRS (Nov) Announced 5-Ye
Slide 11: New Products Pipeline in FY2016
New Products Pipeline in FY2016 Category Products Region Launch Category Products Region Launch Disposable Centrifugal Pump DES (Ultimaster) ◎★ France Launched CV (for PCPS) Asia Launched Coronary DES (Ultimaster) 4.0mm ◎★ JP Launched Regenerative HeartSheet ★ JP Launched Medicine To be To be Imagin
Slide 12: New IVUS System: Aiming for the Leading Position in JP Market
New IVUS System: Aiming for the Leading Position in JP Market High Resolution Image Smaller & Lighter console provides clearer view of lesion Conventional 135 34 kg kg Guidewire High Speed image acquisition and IVUS processing Vascular 18 x lumen Calcification faster than conven- tional ones P
Slide 13: Completion in Acquisition of Vascular Closure Device Business from St. Jude Medical and Abbott
Completion in Acquisition of Vascular Closure Device Business from St. Jude Medical and Abbott Laboratory Completed in Jan 20, 2017 Purchasing price: 1.12 BUSD EBITDA multiple: 8 times Secure the leading position in access device market Expect stable contribution to sales and profit Esti
Slide 14: Acquisition of Bolton Medical: Expand Vascular Graft Portfolio
Acquisition of Bolton Medical: Expand Vascular Graft Portfolio Acquired stent graft for TAA Reinforce portfolio in adjacent segments arising between intervention and surgery Vascular Surgery grafts Highly compatible to aortic arch Hybrid device (graft and stent graft) Enter TAA stent graft mark
Slide 15: Bioresorbable Stent: Shift from Co-development w/ ART to In-house Development
Bioresorbable :Shift from Co-development w/ ART to In-house Development Stent Terminated the contract of co-development w/ ART The technological hurdle is higher than expected. Expect longer period of time for BRS to be mainstream in the market Stay committed to development of BRS, consideri
Slide 16: Unwind Cross Shareholding and Share Buyback of 50BJPY
Unwind Cross Shareholding and Share Buyback of 50BJPY Continue business alliance w/ Olympus Has been expanding business between Terumo and Olympus (Endoscopic Guidewires, etc.) Both companies reassured no need of capital tie-up to further deepen business alliance Sale of Olympus’s stocks S
Slide 17: Revision of FY16 Guidance
Revision of FY16 Guidance Sales: Considered the delay in acquisition of vascular closure device business and recent sales trend Revise the current guidance to include the acquisition-related cost emerging after the previous revision No revision onto net income Negative factors Termination of
Slide 18: Reference
Reference TERUMO 18/25
Slide 19: FY16 Q3YTD Net Sales and Growth by Region
FY16 Q3YTD Net Sales and Growth by Region (billion yen) Business Outside of Japan Japan G. Total Segment Subtotal Europe Americas China Asia Cardiac and 37.3 149.2 46.0 64.3 20.4 18.6 186.6 Vascular (-1%) (+11%) (+7%) (+10%) (+19%) (+16%) (+8%) Out of C&V Interventional 28.5 119.8 37.6 47.7 19.2 15.
Slide 20: Operating Expenses
Operating Expenses (billion yen) FY15 FY16 YoY% Q3YTD Q3YTD YoY YoY% (FXN) Salaries & Wages 57.5 55.2 -2.3 -4% +6% Sales Promotion 12.6 11.2 -1.4 -11% -2% Logistical Costs 8.3 8.4 +0.1 +1% +5% Depreciation & 21.0 19.1 -1.9 -9% +2% Amortization Others 27.8 28.0 +0.2 +0% +9% SG&A Expenses Total 127.2
Slide 21: Quarterly Results
Quarterly Results (billion yen) FY15 Q3 Q4 FY16Q1 Q2 Q3 (Oct-Dec) (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) Net Sales 136.8 129.0 124.5 120.6 129.3 Gross Profit 75.3 70.3 69.8 66.3 69.2 (55.0%) (54.4%) (56.0%) (55.0%) (53.6%) SG&A Expenses 42.9 42.8 40.3 40.1 41.5 (31.3%) (33.1%) (32.3%) (33.3%) (32.1
Slide 22: CAPEX and R&D Expenses
CAPEX and R&D Expenses Amortization of intangibles (billion yen) 46.6 and goodwill 44.7 44.0 39.9 41.4 40.7 35.0 CAPEX was peaked 31.5 32.4 out in FY2013 24.8 18.5 16.3 17.7 20.2 14.2 CAPEX is projected to be at the same level as depreciation 23.6 23.0 24.5 18.3 25.5 and amortization CAPEX: CIP ba
Slide 23: Cash Flow
Cash Flow Operating CF Investing and Financing CF (billion yen) +53.9 + 60.6 27.9 14.5 Acquisition of 130.0 Sequent Dividends 24.8 Medical CAPEX 23.3 2.2 32.4 0.2 Others Depreci- Corpo- Increase Issuance of rate Tax in Straight Bond ation & 44.6 Amorti- Working and Loans Capital Payable 264.2* zatio
Slide 24: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity (billion yen) USD EUR Excl. Amortization Incl. Amortization Net Sales 1.4 1.4 0.5 Operating Income 0.0 -0.2 0.3 24/25
Slide 25: IR Contact
IR Contact Terumo Corporation Corporate Communication (IR) Dept. E-mail: kouhou_terumo01@terumo.co.jp 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