Terumo Corporation · TSE:4543
Terumo — FY2015 Earnings Presentation
29 slides from Terumo's earnings presentation, 2016
Slide 1: Financial results for FY ended March 2016
This is Kitabatake and I will now explain the financial results for the fiscal year ended March, 2016 and the guidance for the fiscal year ended March 2017. 1
Slide 2: Overview of results
First, the overview of our results: As president Shintaku just mentioned, we achieved significant increases in both sales and profit. profit All of our net sales, sales operating income income, ordinary income, and net income turned out to be our highest‐ever results. Regarding sales, we achieved th
Slide 3: Non-operating items and net income
In non‐operating income and loss, foreign exchange was the largest factor. In particular, while we saw a positive foreign exchange impact in FY14, we were negatively impacted in FY15. The negative effect was somewhat present through the third quarter, but especially large in the fourth quarter. The
Slide 4: Operating income variance analysis
This slide shows the positive and negative impacts on operating income. The same pattern was evident through the third quarter. The largest positive impact was the increase in gross profit due to an increase in sales. Others were cost reductions and improvement of portfolio mix. Regarding the foreig
Slide 5: Operating income variance by company
This is the operating income variance analysis by company. This is also from the third quarter, and shows the Cardiac and Vascular Company growing significantly while also increasing expenditures. For other companies, with the aim of improving profitability, we also controlled SG&A . 5
Slide 6: Foreign exchange impact on operating income
I will now explain the impacts of foreign exchange on operating income. The upper part of this slide shows the currency sensitivities’ trend. First, regarding the dollar, since our dollar‐denominated expenses increased, overall foreign exchange impact was more or less neutral. In addition, our amort
Slide 7: Sales by region
This next slide shows sales by region. The trend is steady through the third quarter. Japan ended up at plus 2%. Cardiac and Vascular and General Hospital were positive, while Blood Management was negative. Excluding Europe, non‐Japan sales grew in double digits. Our reduction in European business a
Slide 8: Sales by company
Looking by company, we see that similar to previous results, the Cardiac and Vascular Company was the largest driver. 8
Slide 9: Cardiac and Vascular Company
The Cardiac and Vascular Company followed its usual pattern, with strong growth in overseas Interventional Systems and Neurovascular business, Sales grew as well, business profitability improved four points year‐on‐year, from 21% to 25% mainly due to the sales expansion of “Ultimaster”. 9
Slide 10: General Hospital Company
In the General Hospital Company, the downsize of low profit business I have mentioned had a 3.5‐billion‐yen negative impact. However, in the Japan, China, and other Asia markets, infusion system sales grew significantly, bringing overall company results back to approximately the same level as the pr
Slide 11: Blood Management Company
In Blood Management, we have previously explained the large negative impact of price declines from the first quarter, particularly in the United States market. That impact was small through the second quarter, but hit the company fully in the fourth quarter. Sales grew 4% overall, but the price decl
Slide 12: FY15 topics
Next, I will discuss some topics from FY15. Regarding corporate topics, in June, we established an audit/supervisory committee. In February and August, we executed 61 billion yen of share buyback in total, and doing so resulted in significant positive impact on ROE. I will later explain this in more
Slide 13: New products in the pipeline
New products in the pipeline are as shown, and most products listed have been launched as scheduled. 13
Slide 14: FY16 performance guidance
I will now explain our FY16 performance guidance. Our FY16 sales plan is 517 billion yen, or minus 2% from FY15. Operating income is 75 billion yen, or minus 8%. However, net income is 52.5 billion yen, or plus 4% year‐on‐year. This increase in net income is due to a lighter tax burden that will be
Slide 15: FY16 guidance by company
These numbers are the FY16 guidance for each company, excluding FX impacts. Cardiac and Vascular Company sales and business profit are projected to continue growing, with Interventional Systems and Neurovascular businesses outside of Japan remaining the chief drivers. The G Th Generall H Hospital i
Slide 16: FY16 operating income variance analysis
These are the variance analysis for FY16 operating income guidance. The increase in sales is expected to be the biggest positive factor. Cost reduction and product mix portfolio will be other upward factors. Negative factors will include price declines, including the Japan reimbursement price revisi
Slide 17: FY16 foreign exchange assumptions and impact
In FY15, the dollar and euro each had differing impacts against the yen. However, in FY16, we anticipate yen appreciation against all currencies. We anticipate 110 yen to the dollar, and 125 yen to the euro. As I mentioned before, when we exclude goodwill amortization, the dollar impact is approxima
Slide 18: Measures against foreign exchange fluctuation
The next slide explains our measure against foreign exchange fluctuation. The area we watch most regarding foreign exchange impact is in specific markets and the effect on profitability of yen appreciation. In other words, we will confirm whether it makes sense from a profit standpoint to do busines
Slide 19: ROE trend
Next, regarding ROE: This shows the ROE trend beginning in FY11. From FY11 to FY14, we saw net income grew from 24.2 billion yen to 38.5 billion yen. However, ROE remained relatively static, going from 7.0% to 7.2% over that period. The biggest factor behind that was increase in equity. There were t
Slide 20: Dividends and EPS
Regarding dividends and earnings per share (EPS): In FY12, EPS was high due to a special tax benefit, but excluding that anomaly, EPS has steadily increased. We have made efforts to set the dividend payout ratio consistently near 30%, and that has led to dividend per share also steadily growing. Reg
Slide 21: FY16 new product pipeline
The last slide shows the FY16 new product pipeline, and I will forego that explanation. That concludes my remarks. 21
Slide 22: Reference
“TERUMO Reference 22/29 22
Slide 23: FY15 Net Sales and Growth by Region
FY15 Net Sales and Growth by Region Business Segment Outside of Japan Japan Subtotal Americas Cardiac and 51.6 (+7%) 207.0 (+11%) Vascular (17%) (132%) Out of C&V Interventional 39.6 (+7%) 163.3 (+14%) Systems* General 124.2 (+2%) — 37.2(-7%) — 9.3(-24%) 8.3 (-12% Hospital (+2%) (-7%) (-24%) (-12%)
Slide 24: Operating Expenses
Operating Expenses (billion yen) rane | rs i Salaries & Wages 70.5 76.0 +5.5 +8% +5% Sales Promotion 16.0 17.2 +1.2 +8% +6% Logistical Costs 11.0 11.0 -0.0 - 0% -1% BSUCEEMERNS 25.1 275 42.4 410% 43% Amortization Others 36.6 38.4 +1.8 +5% +3% SG&A Expenses Total 159.2 (32.5%) 170.1 (32.4%) +10.9 +7%
Slide 25: Quarterly Results
Quarterly Results (billion yen) FY14 Q4 FY15 Q1 Q2 (ek) a4 -Mar) (Apr-Jun) (Jul-Sep) | (Oct-Dec) (Jan-Mar Net Sales 126.3 128.7 130.5 136.8 129.0 Gross Profit 65.4 (51.7%) 69.0 (53.7%) 70.4 (53.9%) 75.3 (55.0%) 70.3 (54.4%) SG&A Expenses 42.4 (33.5%) 41.7 (32.5%) 42.7 (32.7%) 42.9 (31.3%) 42.8 (33.1
Slide 26: CAPEX and R&D Expenses
CAPEX and R&D Expenses Amortization of Intangibles 46.6 and Goodwill . 41.4 40.7 29.4 Depreciation 30.1 27.1 / FY2012 FY2013 FY2014 ~TERUMO 31.5 FY2015 (billion Yen) 44.0 CAPEX: CIP basis 35.5 FY2016 (Guidance) MCAPEX was peaked out on FY2013. MCAPEX is projected to be at the same level as amortizat
Slide 27: Cash Flow
Cash Flow Operating CF Investing and Financing CF +80.3 - 60.3 Bool 10.8 [= eas bas 4.8 — saleof (billion yen) Depreci- Increase in Investment ation & Working Securities ‘Amorti- Capital zation Share Buyback 13.2 Income capex before Dividends Others fell Tax * Cash at end * Cash at end of fiscal yea
Slide 28: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity (billion yen) Net Sales 1.4 1.4 0.5 Operating Income 0.0 -0.2 0.3 ~TERUMO 28/29 28
Slide 29: 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