Terumo Corporation · TSE:4543
Terumo — Q3 FY2017 Earnings Presentation
24 slides from Terumo's earnings presentation, Feb 8, 2018
Slide 1: Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2018 (FY2017)
Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2018 (FY2017) Terumo Corporation Managing Executive Officer a ua Kitabatake Kazuaki tabata e February 8, 8 2018
Slide 2: Maintained Good Momentum despite The Negative Impact of Hurricane
Maintained Good Momentum despite The Negative Impact of Hurricane (billion yen) FY16 Q3 YTD FY17 Q3 YTD YoY% YoY% (FXN) Nett SSales N l 374.4 374 4 437.0 437 0 +17% 17% +12% 12% Gross Profit 203.7 (54.4%) 244.7 (56.0%) +20% +15% SG&A expenses 120.3 (32.2%) 143.6 (32.8%) +19% +15% R&D Expenses 24.5 (
Slide 3: Impact of US Tax Reform
Impact of US Tax Reform Corporate tax (Federal tax) rate was lowered from 35% to 21% due to US tax t reform f Net income increased since the corporate tax was temporarily reduced in FY17 Q3 in accordance with the revaluation of deferred tax assets and liabilities due to the lowered corporate tax
Slide 4: Operating Income Variance Analysis
Operating Income Variance Analysis (billion yen) 3.9 Impact of M&As made in FY16 6.9 Price / excl. amortization +4.8 O/P erosion 11.2 Amortization* ‐ 6.8 Gross margin *Figures above are tentative improve‐ since PPA is still in process. ment Increase of 3.4 26.8 SG&A Increase 6.8 72.4 of R&D 5.0 Incr
Slide 5: FX Impact on Operating Income
FX Impact on Operating Income Increase in impact of FX: + 0.6 BJPY in 1H → + 5.0 BJPY in Q3YTD Impact of JPY depreciation against EUR Impact of JPY depreciation against currencies of emerging countries USD: Decreased operational costs and expenses in USD since production halted in Puerto Rico,
Slide 6: Net Sales by Region
Net Sales by Region FY17Q3YTD FY16Q3YTD Net Sales Year‐on‐Year Sales Comparison 100% = 437.0BJPY billion yen YoY% Comments ( ) FXN TIS centered on access and imaging devices d drove overallll growth. h General G l Hospital H i l 142.9 Company turned into positive growth owing 33% Japan 139.6 +2% to
Slide 7: Net Sales by Business Segment
Net Sales by Business Segment FY17Q3YTD FY16Q3YTD Net Sales Year‐on‐Year Sales Comparison 100% = 437.0BJPY billion yen YoY% Comments ( ) FXN All businesses except p for ones acquired q in FY16 maintained continuous double digit 240.0 growth. The impact of hurricane on closure Cardiac and +29% device
Slide 8: Cardiac and Vascular: Achieved Continuous High Growth in Both Sales and Profit
Cardiac and Vascular : Achieved Continuous High Growth in Both Sales and Profit (billion yen) FY16 FY17 YoY% Major Topics Impact Q3YTD Q3YTD ( ) FXN 240.0 FX +11.3 186 6 186.6 TIS: Overseas organic access devices as well as closure devices highly drove the overall growth +28.9 +29% Neurovascular: Hy
Slide 9: General Hospital: Turned into Positive Growth in Sales
General Hospital: Turned into Positive Growth in Sales (billion yen) FY16 FY17 YoY% Major Topics Impact Q3YTD Q3YTD ( ) FXN FX +1.6 General Hospital Product: Gained back the same momentum as one in FY16 in JPN due to infusion system 119.0 120.2 +1% with strong growth and pumps on mildly upward trend
Slide 10: Blood Management: Continuous Trend in Profitability Improvement
Blood Management: Continuous Trend in Profitability Improvement (billion yen) FY16 FY17 YoY% Major Topics Impact Q3YTD Q3YTD ( ) FXN FX (EUR depreciation against USD) +3.9 +11% Blood Center: Continuous double digit 76.5 Sales 68.7 growth in emerging countries +1.8 (+6%) p Therapeutic apheresis: p Gr
Slide 11: Major Topics in Q3 [1]
Major Topics in Q3 [1] CSR activities: 15th Anniversary of “Terumo Mt. Fuji Reforestation Project Project”, planting trees and maintaining Corporate forested areas w/ the locals (Oct) Held shareholders shareholders’ meeting in Nagoya and Osaka, Osaka JPN, JPN further promoting dialogues w/ share
Slide 12: Major Topics in Q3 [2] Resumption of Angio-Seal Shipment
Major Topics in Q3 [2] Resumption of “Angio‐Seal” Shipment Mid Oct: Resumed production stepwisely Late Dec: Electricity supply from power grid became stabilized Early Jan: Resumed shipment to the customers after having enough inventories accumulated Impact Managed JPN and EU market w/ stocks
Slide 13: New Products Pipeline in FY17
New Products Pipeline in FY17 Category Products Region Category Products Region Heart‐lung machine Coronary PTCA balloon US: Q4 ◎ Launched (Re launch) (Re‐launch) CV JP, US, EU Stent (TRI) ★ FY18 Next generation of oxygenator ◎ FY18 JP: PTA balloon b ll (TRI) ★ FY18 General V i l infusion Vertical i
Slide 14: Revision of FY17 Guidance
Revision of FY17 Guidance Net sales: Took TIS and Neurovascular’s good momentum into consideration and factored in the one‐off contribution such as replacement p demand for new consoles in Blood Management Company Operating Income: Overcoming the impact of hurricane on closure devices, expect to
Slide 15: Reference
Reference “FERUMO 15/24
Slide 16: FY17 Q3YTD Net Sales and Growth by Region
FY17 Q3YTD Net Sales and Growth by Region (billion yen) Business Outside of Japan Japan p G. Total S Segmentt Subtotal Europe Americas China Asia Cardiac and 40.5 199.5 61.5 88.0 25.5 24.5 240.0 Vascular (+9%) (+26%) (+24%) (+30%) (+20%) (+24%) (+23%) Out of C&V Interventional 31.0 161.0 49.2 67.7 2
Slide 17: Operating Expenses
Operating Expenses ( (billion yen)) FY16 FY17 YoY% Q3YTD Q3YTD YoY YoY% (FXN) Salaries & Wages 54.6 63.1 +8.5 +16% +11% Sales Promotion 11.2 12.6 +1.4 +12% +8% Logistical Costs 8.4 9.4 +1.0 +12% +10% Depreciation & 18 9 18.9 27 9 27.9 +9.0 90 +47% 47% +41% 41% Amortization Others 27.2 30.6 +3.4 +13%
Slide 18: Quarterly Results
Quarterly Results ( (billion yen)) FY16Q3 Q4 FY17 Q1 Q2 Q3 ((Oct‐Dec)) ((Jan‐Mar)) ((Apr‐Jun) p ) ((Jul‐Sep) p) ((Oct‐Dec)) Net Sales 129.3 139.8 139.3 145.3 152.3 G Gross P Profit fit 68 7 68.7 74 3 74.3 78 3 78.3 81 4 81.4 85 0 85.0 (53.2%) (53.2%) (56.2%) (56.1%) (55.8%) SG&A Expenses 41.0 47.4 4
Slide 19: CAPEX and R&D Expenses
CAPEX and R&D Expenses (billion yen) Expand investment in Amortization 56.0 of Intangibles production capacity aand d Goodwill Good 44 7 44.7 45 4 45.4 46 5 46.5 and space as well as 41.4 40.7 42.0 39.1 IT infrastructure in 31.5 FY17 28.6 28.5 20.2 20 8 20.8 17 7 17.7 21.9 CAPEX Amortization of
Slide 20: Cash Flow
Cash Flow Operating CF Investment and Finance CF (billion yen) +72.3 ‐23.4 22.6 42.0 18.4 Corporate Finance tax 1.1 Increase of Repayment Depreci‐ 15.8 working 28.6 for short short‐ ation and capital Others term debt Dividends amorti‐ 71.3 zation CAPEX 139.9 154 3 154.3 Income 105.4 before 120.0 tax
Slide 21: FY17 Foreign Exchange Sensitivity
FY17 Foreign Exchange Sensitivity (billion yen) USD EUR CNY Excl. Incl. Amortization Amortization Net Sales 1.6 1.6 0.8 1.8 Operating Income 0.0 ‐0.2 0.5 0.9 <Reference> Impact of +/‐10% fluctuation North Latin EMEA Asia America America EUR Others CNY Others Operating p g ‐1.8 18 08 0.8 56 5.6 10 1.
Slide 22: (Reference) IFRS Basis
(Reference) IFRS Basis Adopting International Financial Reporting Standards (IFRS) from the year‐ end financial announcement for FY17 Schedule for disclosure FY17 Q1‐Q3 : Japanese GAAP FY17 yyear‐end financial announcement : IFRS Reference Japanese GAAP IFRS (billion yen) Impact FY17Q3YTD FY17Q3
Slide 23: The Status of Convertible Bonds
The Status of Convertible Bonds Detail of the bonds(Issued in Dec. 2014) Aggregate Contingent Number of Conversion principal conversion shares required Maturity Coupon price amount trigger price to be issued for (yen) (billion yen) (yen) conversion Dec, 2019 50.0 0.0% 3,868 5,028 12.9M shares Dec,
Slide 24: 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