Terumo Corporation · TSE:4543
Terumo — Q3 FY2017 Earnings Presentation
24 slides from Terumo's earnings presentation, February 2018
Slide 1: Financial results for Q3 of fiscal year ending March 2018
I will now begin my explanation of the financial results from the 3rd quarter of the fiscal year ending March 31, 2018. 1
Slide 2: Results highlights: good momentum despite Puerto Rico hurricane
The first main point of the results is that we maintained good momentum despite the negative impact of the hurricane in Puerto Rico. We were able W bl to t minimize i i i impact i t from f the th hhurricane i th thanks k tto th the concerted t d efforts of associates in Puerto Rico, in addition to g
Slide 3: Impact of US tax reform
I will outline the main two aspects of the U.S. tax reform impacting us: The lowering of the corporate tax rate, and the medical device excise tax. The corporate Th t tax t rate t was lowered l d from f 35% to t 21%. 21% This Thi had h d a one‐time ti effect ff t in which deferred tax assets and lia
Slide 4: Operating income variance analysis
I will now explain the operating income variance analysis. The biggest factor raising operating income was higher gross profit through continued ti d sales l growth.th Sales S l grew wellll again i in th 3rd quarter, i the t resulting lti in i a large increase in gross profit. Another factor changin
Slide 5: Foreign exchange impact
FX impact in the first half totaled just 600 million yen, or relatively no impact. At the end of the 3rd quarter, FX impact year‐to‐date was 5‐billion‐yen. This impact was seen on both a flow basis and inventory basis. On a flow basis, there was impact from yen depreciation against the euro, as you
Slide 6: Net sales by region
Next, net sales by region. There was no major change to the pattern of previous quarters. IIn Japan, J the th year‐on‐year 1% growth th off th the first fi t half h lf was followed f ll th 3rd d iin the quarter by 2% growth. This represents a gradual acceleration of Japan growth. Overall, sales grew
Slide 7: Sales by company
In sales by company, there were no significant changes in trend. However, the General Hospital company posted 2% growth, a turnaround from minus 1% growth through the first half. Both Cardiac and Vascular and Blood Management showed double‐digit growth, continuing from previously. I will now give an
Slide 8: Cardiac and Vascular Company results
In Cardiac and Vascular, all four business segments had increased sales. Not only in TIS and Neurovascular, but also in CV and Vascular, sales increased significantly. The TIS and Neurovascular businesses have grown the most to this point and are expected to continue to grow going forward. Regarding
Slide 9: General Hospital Company results
Next is the General Hospital company. As we have previously explained, the company plans to see positive sales growth across the year. Growth was initially negative in the first half, but has now turned positive in the 3rd quarter. Continuous cost reductions have resulted in the company maintaining
Slide 10: Blood Management Company results
Next is Blood Management. The company continued in its pattern of growing sales and improving profitability. S l grew 11% year on year. Sales However, this sales number includes growth from demand for next‐generation therapeutic apheresis console to replace the previous version. The COBE Spectra the
Slide 11: Major topics from the third quarter
Next, major topics from the 3rd quarter. Continuing from previously were our group‐wide CSR activities. We also held shareholders’ meetings in Nagoya and Osaka. In the business side, we obtained manufacturing and marketing approval for Japan’s p first‐ever insulin p patch pump. p p We also announced
Slide 12: Resumption of Angio-Seal closure device shipments
The next major topic is resumption of shipments of our closure device. I will give some detail on this. We stopped production of our Angio‐Seal product on September 20, just before the arrival of the hurricane. hurricane As damage from the hurricane continued, continued we remained unable to manufac
Slide 13: New products pipeline (skipped)
I will skip over the new products pipeline slide. 13
Slide 14: Revision of FY17 guidance
The final slide explains our revision of FY17 guidance. As we have made public, we have revised our sales guidance upward by 13 billion yen, our operating income by 10 billion yen, and also our ordinary income by 10 billion yen. Reflecting both performance and the United States tax reform, we have r
Slide 15: Reference
“TERUMO Reference 15/24 15
Slide 16: FY17 Q3YTD Net Sales and Growth by Region
FY17 Q3YTD Net Sales and Growth by Region (billion yen) Business Outside of Japan eagey Segment Subtotal Americas d Cardiac and 40.5 199.5 61.5 88.0 25.5 24.5 240.0 Vascular (+9%) (+26%) (+24%) (+30%) (+20%) (+24%) (+23%) ete | ek) 161.0 49.2 67.7 23.8 20.4 192.0 Systems* (9%) (+27%) (+21%) (+35%) (
Slide 17: Operating Expenses
Operating Expenses (billion yen) FY16 FY17 YoY% fate | am] wr | worm | use Salaries & Wages 54.6 63.1 +8.5 +16% +11% Sales Promotion 112 12.6 +1.4 +12% +8% Logistical Costs 8.4 9.4 +1.0 +12% +10% De precauon. 18.9 27.9 +9.0 +47% +41% Amortization Others 272, 30.6 +3.4 +13% +9% 120.3 143.6 SG&A Expen
Slide 18: Quarterly Results
Quarterly Results (billion yen) FY16Q3 Q4 FY17 Q1 Q2 Q3 (Oct-Dec) (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) Net Sales 1293 139.8 139.3 145.3 152.3 Groce Prarie 68.7 74.3 78.3 81.4 85.0 (53.2%) (53.2%) (56.2%) (56.1%) (55.8%) 41.0 47.4 46.4 47.3 49.9 SISA EASE (31.7%) (34.0%) (33.3%) (32.6%) (32.7%) 8.
Slide 19: CAPEX and R&D Expenses
CAPEX and R&D Expenses Amortization of Intangibles and Goodwill gq 7 45.4 SLA 4007 39.1 315 Depreciation *Investment into venture technologies was booked in other than R&D expenses. (1.5 BJPY) 33.6 29.4 FY14 FY1S FY16 ~TERUMO (billion yen) 56.0 46.5 42.0 28.6 28.5 40.0 FY17 FY17 Q3YTD Guidance ® Exp
Slide 20: Cash Flow
Cash Flow Operating CF Investment and Finance CF (billion yen) +72.3 -23.4 Corporate Ba Finance i 11 : Increase of Repayment a isc Depreci- working for short- ation snd capital term debt Dividends Others amorti- zation CAPEX 154.3 Income 105.4 fo moe tax Cash at end of CAPEX = C.i.P, record basis Ca
Slide 21: FY17 Foreign Exchange Sensitivity
FY17 Foreign Exchange Sensitivity (billion yen) CNY Excl Incl. Amortization Amortization Net Sales 1.8 pbereting 0.0 0.2 0.5 0.9 Income . . . . <Reference> Impact of +/- 10% fluctuation North | latin | EMEA america | America 5.6 1.0 1.4 3.3 Operating Income ~TERUMO 21/24 21
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 year-end financial announcement —: IFRS. Reference (billion yen) EIRENE S CLUS ERS Impact FY17Q3YTD FY17Q3
Slide 23: The Status of Convertible Bonds
The Status of Convertible Bonds & Detail of the bondsiissued in Dec. 2014) Aggregate c F Contingent Number of principal sabia conversion shares required amount ra trigger price to be issued for (billion yen) y (yen) conversion Dec, 2019 50.0 0.0% 3,868 5,028 12.9M shares Dec, 2021 50.0 0.0% 3,868 5,
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