Tsumura & Co. · TSE:4540
Tsumura & — Q3 FY2022 Earnings Presentation
26 slides from Tsumura &'s earnings presentation, Feb 6, 2023
Slide 1: Third Quarter Business Results for Fiscal Year 2022
Third Quarter Business Results for Fiscal Year 2022 February 6, 2023 Director, and CFO Muneki Handa
Slide 2: Agenda
agenda 01 Third Quarter Business Results for FY 2022 Initiatives and Progress for 02 Domestic Business and China Business 03 FY 2022 Earnings Forecast 2
Slide 3: Roadmap for the Realization of the TSUMURA VISION “Cho-WA” 2031
Roadmap for the Realization of the TSUMURA VISION “Cho-WA” 2031 1st stage 2nd stage 3rd stage FY2022-2024 FY2025-2027 FY2028-2031 —Germination— —Growth— —Flowering— Standardization of Kampo Over 50% physicians write 10 treatments or more Kampo prescriptions Prescription Kampo 50% of physicians write
Slide 4: 3Q Business Results for FY 2022
3Q Business Results for FY 2022 3Q 3Q YoY 【Million yen】 FY 2021 FY2022 results results Amount Change Ratio to total sales Sales 98,382 107,076 +8,694 +8.8% Domestic business － 96,355 － － China business － 10,721 － － Operating profit 18,829 17,723 （1,106） （5.9）% Prescription Kampo Products Domestic bu
Slide 5: Key Points in Performance
Key Points in Performance Sales and profit attributable to owners of parent rose owing to growth in Japan and in the China business (but operating profit was down) Net sales 107,076 million yen YoY ＋8.8％ ◼ Domestic business sales of the 129 prescription Kampo products: 91,941 million yen, rose 5.3％
Slide 6: Factors Triggering Changes in Operating Profit (YoY)
Factors Triggering Changes in Operating Profit (YoY) （ Million yen ） （ Million yen ） Breakdown of change in net sales：+3,140 Domestic +2,684 +3,140（766） Overseas +456 （2,465） Breakdown of change in cost-to-sales：（766） （1,015） （49） Crude drug procurement cost Raw material expense（other than raw mater
Slide 7: Financial Condition/Cash Flow Position
Financial Condition/Cash Flow Position （ Million yen ） FY 2021 FY 2022 Bond issuance: 30 billion yen (Sep. 8, 2022) Change (March 2022) 3Q （ Hundred million yen ） Total assets 350,981 400,958 49,977 +53 937 Current assets 229,420 270,962 41,542 +244 Non-current assets 121,561 129,995 8,434 Total lia
Slide 8: Agenda
agenda 01 Third Quarter Business Results for FY 2022 Initiatives and Progress for 02 Domestic Business and China Business 03 FY 2022 Earnings Forecast 8
Slide 9: Domestic Business: Product Supply Trends
Domestic Business: Product Supply Trends ■ Sharp rise in demand for seasonal prescriptions owing to intense summer heat (150％ YoY) ■ Rapid increase in demand for common cold-related prescriptions due to COVID-19 (130% - 300％ YoY) Product *Decline in production due to halt in operations at the Shangh
Slide 10: Progress in the Launch of the Tianjin Plant
Progress in the Launch of the Tianjin Plant In Phase 1, implementing process validation (PV), with plans to commence shipments in 4Q FY2023 Aim to start shipments earlier by speeding up the completion of PV and acquiring manufacturing approval earlier than planned ■Tianjin Plant profile Increase pro
Slide 11: Shipment Volume after Shipment Restrictions (Prescription Kampo Products)
Shipment Volume after Shipment Restrictions (Prescription Kampo Products) Sales of the 129 prescription Kampo formulations maintained a growth of 105% even after shipment restrictions 105％ YoY Aug-Dec Aug-Dec 2022 106％ YoY 2021 1,050 1,102 780 827 （10,000 units*） （10,000 units） （10,000 units） （10,00
Slide 12: Comparison with the Prescription Pharmaceutical Market
Comparison with the Prescription Pharmaceutical Market Grew 3.3% YoY on an NHI drug price basis; growth was sluggish due to impact from restricted shipments (YoY/NHI drug price basis) All sales channels 9.6% 7.9% 7.7% Tsumura 7.1% 6.6% 5.5% (excl. restricted 5.4% shipment items) 4.6% 3.3% Prescripti
Slide 13: Sales of Drug-fostering Program Formulations/Growing Formulations
Sales of Drug-fostering Program Formulations/Growing Formulations （ Million yen ） Net sales Ranking Product No./formulation name FY 2021 3Q FY 2022 3Q YoY 7,334 7,482 +147 +2.0% Drug-fostering program 1 100 Daikenchuto 54 Yokukansan 5,678 5,687 +9 +0.2% Ratio to total sales formulations 3 4 43 Rikku
Slide 14: COVID-19 Impact (1)
COVID-19 Impact (1) Rise in demand for common cold-related formulations due to increase in COVID-19 patients Number of new COVID-19 patients & total sales for the 4 common cold-related Kampo formulations Restricted shipment of acetaminophen Number of new positives 650 700 (10,000 people) Restricted
Slide 15: COVID-19 Impact (2)
COVID-19 Impact (2) Prescriptions being written for symptoms related to COVID-19 and a recovery in common cold-related prescriptions (Shipment basis: Growth rate) Rise due to a change in living environment 117% • Anxiety, insomnia (6 formulations) • Fatigue (2 formulations) 110% • Dizziness (2 formu
Slide 16: Provide Kampo Solutions Suited to Each Medical Practitioner
Provide Kampo Solutions Suited to Each Medical Practitioner Build a system that addresses the need for information on how to properly use Kampo products e-Promotions Expand the Medical Site ・Seminars on proper use of Kampo 【Goal of the First Medium- term Management Plan】 ・Kampo on-line salon, etc. G
Slide 17: Milestones in the China Business
Milestones in the China Business Aim to become a traditional Chinese medicine company that is a leader in the development of the traditional Chinese medicine industry, and target an overseas sales ratio of 50% FY2022-24 FY2025-27 FY2028-31 Enter the traditional Chinese Build foundation for the Estab
Slide 18: Manufacturing Platform: Enter the Traditional Chinese Medicine Market
Manufacturing Platform: Enter the Traditional Chinese Medicine Market 【Goal for the First Medium-term Management Plan】 Enter the traditional Chinese medicine market: M&A of traditional Chinese medicine companies, apply to commercially launch classical prescriptions M&A process for traditional Chines
Slide 19: Crude Drug Platform: Expand Business Scale
Crude Drug Platform: Expand Business Scale 【Goal for the First Medium-term Management Plan】 Sales CAGR of 30% reflecting an expansion in sales of crude drugs, drug pieces and “Yakushokudogen” products Raw material Strengthen highly competitive items crude drugs • No. 1 ginseng brand • Expand lineup
Slide 20: China Business Sales (Crude Drug Platform)
China Business Sales (Crude Drug Platform) • Sales, mainly of raw material crude drugs, rose • Although the number of COVID-19 patients rose temporarily, there was not impact on the supply of raw material crude drugs and Kampo extract powder (intermediate products) to Japan and to sales in the China
Slide 21: Agenda
agenda 01 Third Quarter Business Results for FY 2022 Initiatives and Progress for 02 Domestic Business and China Business 03 FY 2022 Earnings Forecast 21
Slide 22: FY 2022 Earnings Forecast
FY 2022 Earnings Forecast FY 2021 FY 2022 YoY 【Million yen】 Results Forecast Amount Change Net sales 129,546 138,500 ＋8,953 ＋6.9% Domestic business － 124,300 － － China business － 14,200 － － Operating Profit 22,376 20,800 (1,576) (7.0)％ Domestic business － 21,200 － － China business － (400) － － Ordina
Slide 23: Shareholder Returns
Shareholder Returns Policy ◼ We aim to improve our corporate value by continually expanding domestic business and through growth investments in the China business, and by building foundations. Accordingly, we plan to implement stable dividends, taking into account factors such as medium/long-term pr
Slide 24: Inquires about these materials
Inquires about these materials Corporate Communications Dept. Investor Relations Group investor_madoguchi@mail.tsumura.co.jp Cautionary items regarding forecasts ⚫ The materials and information provided in this presentation contain so-called forward-looking statements. Readers should be aware that t
Slide 25: Appendix
of TSUMURA Appendix
Slide 26: Comparison with the Prescription Pharmaceutical Market
Comparison with the Prescription Pharmaceutical Market Tsumura (YoY/drug price basis) Prescription pharmaceutical market 12% 9.6% 10% 7.9% 7.7% 6.6% 7.1% 8% 5.4% Overall 6% 4.2% 3.6% 4.6% 3.3% 4% 2.5% 2.9% 1.3% 2% 3.3% 0% -2% 1Q 2Q 3Q 4Q 1Q 2Q 3Q FY2021 FY2022 16% General clinics (GP) Hospital marke