Terumo Corporation · TSE:4543

Terumo — 1H FY2014 Earnings Presentation

26 slides from Terumo's earnings presentation, Nov 5, 2014

  1. Slide 1: Financial Results for the First Half of the Fiscal Year Ending March 31, 2015

    Financial Results for the First Half of the Fiscal Year Ending March 31, 2015 (FY2014) Terumo Corporation Senior Executive Officer, Investor Relations Kazuaki Kitabatake November 5, 2014

  2. Slide 2: Highlights in 1H

    Highlights in 1H  Secured increase both in sales and profit while absorbing reimbursement Corporate price cut in Japan  Grew overseas IS and Neurovascular businesses at double digit while Cardiac & absorbing declined domestic sales due to reimbursement price cut in JP Vascular  Launched Ultimaste

  3. Slide 3: Increase in Sales and Profit: Operating Income Up by 8%

    Increase in Sales and Profit: Operating Income Up by 8% (Billion yen) YoY% 1H FY2013 1H FY2014 YoY% (Excl. FX) Net Sales 226.0 233.3 +3% +0% Gross Profit 117.2 (51.8%) 122.9 (52.7%) +5% +1% SG&A Expenses 71.4 (31.5%) 76.3 (32.8%) +7% R&D Expenses 15.3 ( 6.8%) 13.6 ( 5.8%) -11% Operating Income 30.5

  4. Slide 4: Operating Income Variance Analysis

    Operating Income Variance Analysis 0.6 (Billion yen) 1.8 SG&A G/P increase 3.9 1.1 improve- (-2.6) Product ment by 2.4 mix Decrease cost of Dura- Improve- reduction heart JP 33.0 G/P ment Reimburse- 1.7 R&D, increment ment Etc. (-2.3) by sales FX (+2.0) 30.5 increase Price erosion (-1.6) 1H FY13 1H

  5. Slide 5: Net Sales by Region

    Net Sales by Region Overseas with strong performance, China under local distributors re-arrangement (Billion yen) Consolidated: +3% (+0%) 1H 1H FY2013 FY2014 ( ) Excluding Foreign Exchange Japan Outside of Japan 50.7 -4% +8% (+3%) Europe 45.6 +11% (+4%) 143.9 58.0 Americas 54.1 +7% (+3%) 38% 10.7 Ch

  6. Slide 6: Net Sales by Business Segment

    Net Sales by Business Segment Cardiac & Vascular (Billion yen) General Hospital 1H 1H Blood Management FY2013 FY2014 ( ) Excluding Foreign Exchange Cardiac & 108.9 20% Vascular 100.8 +8% (+4%) 47% General 78.4 Hospital 33% 81.2 -3% (-4%) Blood 46.0 Management 44.1 Cardiac & Vascular reached 47% (44.

  7. Slide 7: Operating Profit by Business Segment

    Operating Profit by Business Segment (Billion yen) YoY% 1H FY2013 1H FY2014 YoY% (Excl. FX) Cardiac & Vascular 20.1 (20%) 21.5 (20%) +7% -1% Business General Profit Hospital 10.9 (13%) 9.6 (12%) -12% -13% Blood Management 8.9 (20%) 9.3 (20%) +4% +0% Others* -1.4 0.9 - - Operating Income (Excl. amort

  8. Slide 8: Cardiac & Vascular: Increase in Sales and Profit

    Cardiac & Vascular: Increase in Sales and Profit (Billion yen) YoY% 1H FY2013 1H FY2014 YoY% (Excl. FX) Sales 100.8 108.9 +8% +4% Business Profit (%) 20.1 (20%) 21.5 (20%) +7% -1% <Sales>  Increase in overseas IS business and neurovascular intervention products (stent, etc.) +6.8 BJPY  CV business

  9. Slide 9: General Hospital

    General Hospital Decrease in Sales and Profit Due to Changing Market Environment (Billion yen) YoY% 1H FY2013 1H FY2014 YoY% (Excl. FX) Sales 81.2 78.4 -3% -4% Business Profit (%) 10.9 (13%) 9.6 (12%) -12% -13% <Sales>  Japan: recoil reduction in demand following the consumption tax increase and th

  10. Slide 10: Blood Management: Sustained Increase in Sales and Profit

    Blood Management: Sustained Increase in Sales and Profit (Billion yen) YoY% 1H FY2013 1H FY2014 YoY% (Excl. FX) Sales 44.1 46.0 +4% +1% Business Profit (%) 8.9 (20%) 9.3 (20%) +4% +0% <Sales>  Achieved double digit growth in overseas therapeutic apheresis + 0.9 BJPY  Automated blood component proc

  11. Slide 11: Progress in 1H New Product Pipeline

    Progress in 1H New Product Pipeline Business Product Region Coronary New DES (developed in house) ◎◎ EU, Latin A, Asia ★ Central implantable venous JP access system Peripheral New DES(Ultimaster) Carotid stent (CASPER) Occlusion microballoon ★ JP ★Great conformability and ★Through control of plaque

  12. Slide 12: Key Initiatives in 2H FY2014

    Key Initiatives in 2H FY2014 © Terumo Corporation 2014/11/5 12/26

  13. Slide 13: Key Initiatives in 2H FY2014

    Key Initiatives in 2H FY2014 Continuously reinforce initiatives for profitability improvement Catch up with sales guidance  Cardiac & Vascular: continue the launch of new products for IS and Neurovascular business and sustain the expansion of existing products (access devices, etc.)  General Hos

  14. Slide 14: New Product Pipeline for 2H

    New Product Pipeline for 2H Business Product Region EU, Asia, Coronary New PTCA balloon ◎ L America PTA balloon JP, EU, US Peripheral (above and below the knee) Stent for small vessel (Misago) EU Coil assist stent ◎ US Stroke device (ERIC) Neuro Stroke device (clot retriever) ◎★ EU ★ Interlinked cag

  15. Slide 15: Net Income Guidance Revised Due to Subsequent Event

    Net Income Guidance Revised Due to Subsequent Event (Billion yen) Previous Modified YoY YoY% FY14 Guidance FY14 Guidance Net Income 37.5 33.5 -4.0 -10.7% Average exchange rate: US$ = 100 yen, EUR = 140 yen <Reason> Extraordinary loss of 6.4 billion yen due to subsequent event “Terumo transforms prod

  16. Slide 16: Reference

    Reference © Terumo Corporation 2014/11/5 16/26

  17. Slide 17: 1H Net Sales and Growth by Region

    1H Net Sales and Growth by Region (Billion yen) Business Outside of Japan Japan G. Total Segment Subtotal Europe Americas China Asia Cardiac & 23.5 (-3%) 85.4 (6%) 31.7 (6%) 35.6 (8%) 8.3 (-9%) 10.0 (15%) 108.9 (4%) Vascular Out of C&V Interventional 18.1 (-4%) 63.4 (7%) 25.0 (7%) 23.2 (11%) 7.7 (-1

  18. Slide 18: SG&A Expenses

    SG&A Expenses (Billion yen) 1H FY2013 1H FY2014 YoY YoY% Salaries & Wages 31.3 33.9 +2.6 +8% Sales Promotion 7.0 7.6 +0.6 +8% Logistical Costs 5.4 5.3 -0.1 -2% Depreciation & Amortization 10.9 11.9 +1.0 +8% Others 16.8 17.6 +0.8 +6% General Administrative Total 71.4 (31.5%) 76.3 (32.8%) +4.9 +7% R&D

  19. Slide 19: SG&A Expenses

    SG&A Expenses (Billion yen) 1H FY2013* 1H FY2014 YoY YoY% General Administrative Total 73.7 76.3 +2.6 +4% R&D Expenses 15.6 13.6 -2.0 -13% SG&A Expenses Total 89.3 89.9 +0.6 +1% * Value adjusted by excluding FX impact © Terumo Corporation 2014/11/5 19/26

  20. Slide 20: Quarterly Results

    Quarterly Results (Billion yen) Q2 Q3 Q4 Q1 FY14 Q2 (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) (Jul-Sep) Net Sales 114.9 119.2 122.1 114.9 118.4 Gross Profit 60.1 (52.3%) 61.5 (51.6%) 63.3 (51.9%) 60.7 (52.8%) 62.3 (52.6%) SG&A Expenses 43.0 (37.4%) 43.7 (36.7%) 46.3 (37.9%) 44.6 (38.8%) 45.4 (38.3%) O

  21. Slide 21: Profit Ratio, SG&A Expenses Ratio

    Profit Ratio, SG&A Expenses Ratio (%) 52.3 51.6 51.9 52.8 52.6 Gross Margin 38.8 SG&A 37.4 37.9 38.3 Expenses 36.7 Ratio 14.9 14.9 14.3 14.0 14.0 Operating Margin FY13 FY14 Q2 Q3 Q4 Q1 Q2 © Terumo Corporation 2014/11/5 21/26

  22. Slide 22: CAPEX, R&D Expenses

    CAPEX, R&D Expenses (Billion yen) FY2014 1H Progress to Guidance Results guidance CAPEX 42.0 21.2 50% Depreciation & Amortization 41.0 19.6 48% R&D Expenses 31.0 13.6 44% Depreciation & Amortization: Including intangibles CAPEX: Acquisition basis © Terumo Corporation 2014/11/5 22/26

  23. Slide 23: Cash Flow

    Cash Flow Despite corporate tax burden in Q1, operating CF at end 1H recovered well. CAPEX has progressed as planned. (Billion yen) SB of 40 BJPY will be redeemed in March, 2015. Operating CF Investing and Financing CF +27.7 -19.3 19.6 19.8 Depreci- ation & Corpo- 6.2 rate tax Amorti- and Increas

  24. Slide 24: Foreign Exchange Sensitivity

    Foreign Exchange Sensitivity (Billion yen/year) US$ EUR Net Sales 1.8 0.7 Operating Income 0.3 0.4 © Terumo Corporation 2014/11/5 24/26

  25. Slide 25: Quarterly Average Exchange Rates Trend

    Quarterly Average Exchange Rates Trend EUR (FY2014) 140 138 140 141 137 129 131 120 USD (FY2014) 102 104 100 103 99 99 100 80 Q1 Q2 Q3 Q4 © Terumo Corporation 2014/11/5 25/26

  26. Slide 26: 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

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