Terumo Corporation · TSE:4543

Terumo — H1 FY2016 Earnings Presentation

22 slides from Terumo's earnings presentation, Nov 10, 2016

  1. Slide 1: Financial Results for the First Half of the Fiscal Year Ending March 31, 2017

    Financial Results for the First Half of the Fiscal Year Ending March 31, 2017 (FY2016) Terumo Corporation Managing Executive Officer Investor Relations, Corporate Communication Dept. Kazuaki Kitabatake November 10, 2016

  2. Slide 2: Overview: Achieved the Highest-ever Operating Income despite FX Impact

    Overview: Achieved the Highest-ever Operation Income despite FX Impact (billion yen) 1H FY15 1H FY16 YoY% YoY% (FXN) Net Sales 259.2 245.1 -5% +5% Gross Profit 139.4 (53.8%) 136.0 (55.5%) -2% +8% SG&A expenses 84.4 (32.6%) 80.3 (32.8%) -5% +5% R&D Expenses 15.9 ( 6.1%) 16.3 ( 6.6%) +3% +11% Operatin

  3. Slide 3: Reduce the Receivables in USD to Minimize the Risk from FX Fluctuation

    Reduce the Receivables in USD to Minimize the Risk from the fluctuation of FX Decreased receivables in USD from 600MUSD at the end of FY15 to 100MUSD at the end of FY16Q2 FX loss posted in 1H FY16: 6.6BJPY (FYQ1: 5.5BJPY, FY16Q2: 1.1BJPY) FX gain/Loss in 1H FY16 FX rate (yen) (billion yen) End of

  4. Slide 4: Operating Income Variance Analysis

    Operating Income Variance Analysis (billion yen) 2.4 4.7 Business 4.0 mix Price improve- Erosion (1.9) 4.5 G/P ment JP 1.8 improve- Reimburse- SG&A 9.0 ment by ment increase Increase cost Revision (2.8) due to of R&D 4.1 reduction, sales force 39.1 G/P etc expansion FX 39.4 increment in US TIS by sa

  5. Slide 5: Operating Income Variance Analysis

    Operating Income Variance Analysis Cardiac and General Blood Vascular Hospital Management (billion yen) 4.4 0.3 0.9 Increase G/P Increase in SG&A increment in SG&A 2.0 0.8 13.6 Decrease 1.4 in G/P Increase in SG&A Others 4.1 (Increase mainly in R&D FX G/P expenses) 39.4 39.1 increment 1H FY15 1H FY1

  6. Slide 6: Net Sales by Region

    Net Sales by Region 1H FY16 1H FY15 Net Sales Year-on-Year Sales Comparison 100%=245.1 BJPY billion yen YoY Comments ( ) FXN Despite the impact of reimbursement price cut 2% in Japan, TIS and neurovascular business along 91.8 with infusion system drove an overall growth Japan 37% 90.3 Continuous gro

  7. Slide 7: Net Sales by Business Segment

    Net Sales by Business Segment 1H FY16 1H FY15 Net Sales Year-on-Year Sales Comparison 100%=245.1 BJPY billion yen YoY Comments ( ) FXN TIS , neurovascular along with vascular graft business achieved double digit growth, and drove an Cardiac and 121.5 -3% 50% overall growth. Vascular 125.5 (10%) Down

  8. Slide 8: Cardiac and Vascular: Double Digit Growth in Profit

    Cardiac and : Double Digit Growth in Profit Driven by Highly Profitable Access and Vascular Coronary Therapeutic Devices (billion yen) 1H FY15 1H FY16 YoY% Major Topics Impact ( ) FXN Negative impact of FX - 16.4 125.5 121.5 Japan: Bouncing back an impact of reimbursement price cut, sales of -3% cor

  9. Slide 9: General Hospital: Mildly Upward Trend in Profitability

    General : Mildly Upward Trend in Profitability despite Decrease in Sales due to Hospital Reimbursement Price Cut in Japan and Downsizing of Low Profit Businesses (billion yen) 1H FY15 1H FY16 YoY% Major Topics Impact ( ) FXN Negative Impact of FX - 2.8 Overseas: Downsizing of low profit - 0.9 80.8 7

  10. Slide 10: Blood Management: Negative Impacts of Price Decline Nearly Over

    Blood : Year-on-year Negative Impacts of Price Decline for Blood Center Management products in U.S. Is Nearly Over in 1H of FY2016 (billion yen) 1H FY15 1H FY16 YoY% Major Topics Impact ( ) FXN Negative impact of FX - 6.9 52.8 45.2 Sales -14% Price declines for Blood Center - 1.4 (-1%) products in U

  11. Slide 11: Major Topics in Q2

    Major Topics in Q2 Established a new affiliated company in Singapore to retain investment capital for the growth (Aug) Heartsheet received “the Minister of Health, Labour and Welfare Award of the Corporate Annual Merit Awards for Industry-Academia-Government Collaboration” (Aug)  The three produc

  12. Slide 12: New Products Pipeline in FY2016

    New Products Pipeline in FY2016 Category Products Region Launch Category Products Region DES (Ultimaster) ◎★ France Launched CV Disposable Centrifugal Pump (for PCPS) Asia Coronary DES (Ultimaster) 4.0mm (Diameter) ◎★ JP Launched Regenerative HeartSheet ★ JP Launched Medicine Imaging IVUS ◎★ JP To b

  13. Slide 13: Revision of FY16 Guidance

    Revision of FY16 Guidance  Revising FY16 Guidance considering the FX impact and acquisition of Sequent Medical (billion yen) Net Sales Operating Ordinary Net Income Income Income Original Guidance 517.0 75.0 71.0 52.5 New Guidance 517.0 75.0 65.0 47.5 Gap to Original Guidance - - -6.0 -5.0 FX rate

  14. Slide 14: Adoption of International Financial Reporting Standards (IFRS)

    Adoption of International Financial Reporting Standards (IFRS) Adopting IFRS from the fiscal year ending March 31, 2018 Q1-Q3 in FY18 Generally Accepted Accounting Principle in Japan(Japanese GAAP) End of FY18 International Financial Reporting Standards (IFRS) basis The purpose of adopting global

  15. Slide 15: Reference

    Reference TERUMO 15/22

  16. Slide 16: 1H FY16 Net Sales and Growth by Region

    1H FY16 Net Sales and Growth by Region (billion yen) Business Outside of Japan Japan G. Total Segment Subtotal Europe Americas China Asia Cardiac and 24.5 97.0 30.4 42.0 12.8 11.8 121.5 Vascular (+8%) (+10%) (+8%) (+10%) (+15%) (+12%) (+10%) Out of C&V Interventional 18.9 77.7 24.7 31.1 12.1 9.8 96.

  17. Slide 17: Operating Expenses

    Operating Expenses (billion yen) 1H FY15 1H FY16 YoY YoY% YoY% (FXN) Salaries & Wages 38.2 36.3 -1.9 - 5% +6% Sales Promotion 8.1 7.5 -0.6 - 7% +3% Logistical Costs 5.5 5.5 -0.0 - 0% +5% Depreciation & 14.0 12.4 -1.6 - 11% +0% Amortization Others 18.6 18.6 +0.0 + 0% +9% SG&A Expenses Total 84.4 (32.

  18. Slide 18: Quarterly Results

    Quarterly Results (billion yen) FY15Q2 Q3 Q4 FY16Q1 Q2 (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) (Jul-Sep) Net Sales 130.5 136.8 129.0 124.5 120.6 Gross Profit 70.4 (53.9%) 75.3 (55.0%) 70.3 (54.4%) 69.8 (56.0%) 66.3 (55.0%) SG&A Expenses 42.7 (32.7%) 42.9 (31.3%) 42.8 (33.1%) 40.3 (32.3%) 40.1 (33.3%

  19. Slide 19: CAPEX and R&D Expenses

    CAPEX and R&D Expenses Amortization (billion Yen) of intangibles 46.6 and goodwill 44.7 44.0 39.9 41.4 40.7 39.0 CAPEX was peaked 31.5 out in FY2013 17.7 18.5 16.3 16.3 20.2 21.1 15.9 CAPEX is projected to be at the same 9.2 level as depreciation 23.6 23.0 24.5 11.9 25.5 and amortization CAPEX: CI

  20. Slide 20: Cash Flow

    Cash Flow Operating CF Investing and Financing CF (billion yen) +39.8 - 34.1 27.9 30.0 10.9 0.9 21.1 Corpo- Acquisition of 7.3 rate Tax Increase Issuance of Sequent in Straight Bond Medical Dividends 15.9 Working Depreci- CAPEX Capital 13.0 ation & Amorti- Others 30.5 zation Income 155.4* before 149

  21. Slide 21: Foreign Exchange Sensitivity

    Foreign Exchange Sensitivity (billion yen) USD EUR Excl. Amortization Incl. Amortization Net Sales 1.4 1.4 0.5 Operating Income 0.0 -0.2 0.3 21/22

  22. Slide 22: 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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