Terumo Corporation · TSE:4543
Terumo — Q2 FY2022 Earnings Presentation
34 slides from Terumo's earnings presentation, Nov 10, 2022
Slide 1: Financial Results for the 2nd Quarter (First Half) of FY Ending March 31, 2023
Financial Results for the 2nd Quarter (First Half) of Fiscal Year Ending March 31, 2023 (FY2022) November 10, 2022 Naoki Muto Chief Accounting and Financial Officer Terumo Corporation I am the CAFO, Muto. I will now explain the 2nd-quarter results for the fiscal year ending March 2023. 1
Slide 2: Safe Harbor for Forward-Looking Statements and Use of Document
Safe Harbor for Forward-Looking Statements and Use of Document 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 intended to be guarantees of future even
Slide 3: FY22 Q2 Results Highlights
FY22 Q2 Results Highlights Revenue First time exceeding 200 billion yen; highest-ever revenue Number of procedures and healthcare demand recovered, all regions outside Japan grew year-on-year even when excluding FX Plasma Donation System “Rika” sales began Operating Profit Despite cost increases due
Slide 4: Finally, the turnaround in this quarter to increased adjusted operating profit year-on-year is a
Finally, the turnaround in this quarter to increased adjusted operating profit year-on-year is a very good sign. 3
Slide 5: P&L Results
P&L Results Revenue was 400 billion yen, gross profit exceeded 200 billion yen for highest-ever result Operating profit includes 3.5 billion yen loss from sale of autologous cell preparation business In adjusted operating profit, Q2 standalone returned to year-on-year increase Change FY 21 FY 22 Cha
Slide 6: decrease. Next slide, please.
decrease. Next slide, please. 4
Slide 7: Operating profit variance analysis (Q2)
Operating profit variance analysis (Q2) (100M JPY) G/P increment by sales increase: Stability increase same amt. as Q1 Gross margin: Inflation impact increases, but mix steadily sales increase G/P increment by Gross margin: reimbursement price revision Price increase, FX impact improving, impact was
Slide 8: Operating profit variance analysis (Q2 YTD)
Operating profit variance analysis (Q2 YTD) (100M JPY) G/P increment by sales increase: Increased C&V and TBCT demand led to steady increase Gross margin: Gross margin: Inflation impact increases, but increased sales of sales increase G/P increment by reimbursement price revision Price increase, FX
Slide 9: Next slide, please.
Next slide, please. 6
Slide 10: Revenue by Region
Revenue by Region (C&V: Cardiac & Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies, PS: Pharmaceutical Solutions, TIS: Interventional Systems) FY 22 Q2 YTD Revenue (100M JPY) Comment FY22 Q2 YoY change YTD （Q1） Q2 Q2 YTD ( ) FXN Regional All three companies affected by 7th C
Slide 11: 13% Q2 standalone revenue growth. Drivers included expansion in the number of procedures for
13% Q2 standalone revenue growth. Drivers included expansion in the number of procedures for the Cardiac and Vascular Company and increased demand for the Blood and Cell Technologies Company Blood Center business. Next slide, please. 7
Slide 12: C&V: Number of procedures returned to growth trend
6% growth when excluding FX.Number of procedures returned to growth trend including C&V: U.S. Segment profit remains impact of FX and inflation (100M JPY) YTD YTD Q2 Comment YoY ( ) FXN 2,354 1,943 TIS: Excluding FX, 7% growth overseas in YTD Q2; Number of procedures returned to growth trend, Oncolo
Slide 13: even when excluding FX. WEB for aneurysm expanded further in North America, while new
even when excluding FX. WEB for aneurysm expanded further in North America, while new product impact grew similarly with FRED. The revenue decrease from Q1 was due to seasonal factors, and the overall trend remained unchanged. CV was steady and only impacted by seasonal factors; here too the overall
Slide 14: TMCS: Sales declined in Q2 due to seventh COVID wave
TMCS: Sales declined in Q2 due to the seventh COVID wave, Sales increase YTD Q2 Segment Profit; Decrease by inflation and FX impact by storong CNY (100M JPY) YTD YTD Q2 Comment YoY ( ) FXN 920 938 HCS Although sales declined in Japan due to 7th 818 Hospital Care COVID wave, overseas covered with imp
Slide 15: Segment profit declined by electricity and gas cost inflation in Q2 standalone in addition
Segment profit declined by electricity and gas cost inflation in Q2 standalone in addition to material cost inflation as well as CNY appreciation. Next slide, please. 9
Slide 16: TBCT: Began Plasma donation Rika sales
Sales grew with double digit and profit declined because of Plasma Donation System TBCT: Began Plasma donation “Rika” sales (100M JPY) YTD YTD Q2 Comment YoY ( ) FXN 740 Blood Centers: Global recovery in transfusion demand. In EU/US, automation innovation in whole blood 582 collection contributed to
Slide 17: sales growth in core business, it was increase QoQ base. Next slide, please.
sales growth in core business, it was increase QoQ base. Next slide, please. 10
Slide 18: Action Ahead
Action Ahead For 2nd half Implementation of price increase more in 2nd half To squeeze SG&A expenses control For Mid. & Long Anti-inflation in Logistics cost Selection of freight & air, restructuring of global logistics network Anti-inflation in Material Cost Creation of global optimal procurement r
Slide 19: business environment is tough. Finally, we did not change the guidance because we need
business environment is tough. Finally, we did not change the guidance because we need to see the impact by inflation and FX impact longer. 11
Slide 20: Dividend guidance revision
Dividend guidance revision Continue to increase dividend in a stable manner with the mid-term aim of 30% dividend payout ratio FY22 annual dividend of 38 yen (2 yen above previous guidance) Previous guidance Current guidance Dividend / share 34.0 yen 38.0 yen Interim 17 yen Interim 19 yen (yen) Peri
Slide 21: Product Pipeline and Major Topics
Product Pipeline and Major Topics Major Product Launch, Approval Status *C&V: Cardiac and Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies, TIS: Terumo Interventional Systems; HCS: Hospital Care Solutions; LCS: Life Care Solutions Field General product name Complete To FY21
Slide 22: Reference
Reference ©TERUMO CORPORATION 14 / 25 14
Slide 23: Revenue by Segment and Region
Revenue by Segment and Region ©TERUMO CORPORATION 15 / 25
Slide 24: Quarterly Trend of Revenue and Operating Profit
Quarterly Trend of Revenue and Operating Profit Revenue: Q2 results were 19% growth YoY, highest-ever for a quarter. 4% growth QoQ Operating profit: Q2 results were 14% decrease YoY, 16% decrease QoQ (100M JPY) 2,060 1,973 1,788 1,798 1,717 1,729 1,653 1,652 1,520 TBCT（売上） TBCT (Sales) 1,313 TMCS（売上
Slide 25: P&L (QoQ)
P&L (QoQ) (100M JPY) FY21 Q2 Q3 Q4 FY22 Q1 Q2 (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) (Jul-Sep) Revenue 1,729 1,788 1,798 1,973 2,060 Gross Profit 920 (53.2%) 926 (51.8%) 905 (50.3%) 1,016 (51.5%) 1,054 (51.1%) SG&A Expenses 490 (28.4%) 507 (28.4%) 528 (29.4%) 566 (28.7%) 605 (29.4%) R&D Expenses 13
Slide 26: SG&A (QoQ)
SG&A (QoQ) (100M JPY) FY21 Q2 Q3 Q4 FY22 Q1 Q2 (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) (Jul-Sep) Salaries & Wages 249 255 256 298 312 Ssales Promotion 40 44 45 46 44 Logistics 39 39 41 44 47 Depreciation 50 51 54 56 59 Others 112 118 132 123 142 SG & A total 490 507 528 566 605 (%) (28.4%) (28.4%) (
Slide 27: SG&A (YoY)
SG&A (YoY) (100M JPY) Change Change Change FY 21 Q2 YTD FY 22 Q2 YTD +/- vs. FY21 excluding FY21 Q2 FY22 Q2 +/- vs. FY21 Q2 FX impact Q2 Salaries & Wages 498 610 112 22% 6% 249 312 63 25% Sales Promotion 70 90 20 28% 16% 40 44 4 10% Logistical Costs 77 91 14 18% 7% 39 47 8 21% Depreciation and 98 11
Slide 28: Adjusted Operating Profit amount
Adjusted Operating Profit amount (100M JPY) FY 21 Q2 YTD FY 22 Q2 YTD FY21 Q2 FY22 Q2 Operating Profit 659 560 296 255 Adjustment 1. Amortization of 79 95 40 49 acquired intangible assets Adjustment 2. Non-recurring profit 4 49 3 40 or loss Adjusted Operating Profit 741 704 339 345 <General examples
Slide 29: CAPEX, Depreciation and R&D Expenses
CAPEX, Depreciation and R&D Expenses (100M JPY) FY19 FY20 FY21 FY22 (100M JPY) FY22 Q2 YTD Guidance CAPEX 895 772 692 328 900 Depreciation 477 484 532 310 635 Amortization of acquired intangible 157 146 161 95 173 assets CAPEX = C.i.P. record basis, lease depreciation (IFRS16) is not included in Oth
Slide 30: Cash flow (Q2 YTD)
Cash flow (Q2 YTD) Operating CF Investing & Financing CF (100M JPY) +603 -530 140 344 147 taxes, etc. Corporate and losses Operating capital gains 328 amortization and Depreciation 134 546 CAPEX 144 78 136 expenditure Stock buyback Others Dividends tax before Profit 2,126 2,053 Cash at the end CAPEX
Slide 31: Cash Flows
Cash Flows Operating CF Investing & Financing CF (100M JPY) +370 -340 40 17 177 taxes, etc. Corporate and losses Operating capital gains 200 amortization and Depreciation 250 CAPEX 144 4 144 expenditure Stock buyback Others tax before Profit 2,126 2,096 Cash at the end CAPEX = C.i.P. record basis Ca
Slide 32: FY22 FX Impact Breakdown (Flow, Stock)
FY22 FX Impact Breakdown (Flow, Stock) FX impact vs FY21 +3.4BJPY Flow Annual +6.4B JPY: EUR, CNY appreciation positive impact FY21 Q2 YTD FY22 Q2 YTD Variati Rate (JPY) Average rate during Average rate during on period period EUR 131 139 8 CNY 17.0 19.9 2.9 Stock Annual -3.0B JPY: FX impact from el
Slide 33: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity Annual inpact of 1 JPY depreciation (100M JPY) USD EUR CNY Revenue 20 9 38 Adjusted Operating Profit 1 5 16 <Reference> Impact when JPY depreciation 10% North Latin Europe Asia America America EUR Zone Others CNY Others Adjusted Operating Profit 7 10 74 13 31 36 ©TERUMO
Slide 34: <“TERUMO
<“TERUMO 26