Terumo Corporation · TSE:4543
Terumo — FY2017 Earnings Presentation
27 slides from Terumo's earnings presentation, May 9, 2018
Slide 1: Financial Results for the Fiscal Year Ended March 31, 2018 (FY2017)
Financial a c a Results esu ts for o the t e Fiscal sca Year ea Ended March 31, 2018 (FY2017) Terumo Corporation Managing Executive Officer a ua Kitabatake Kazuaki tabata e May 9, 9 2018
Slide 2: Achieved Highest Ever Revenue and All Profits
Achieved Highest Ever Revenue and All Profits (billion yen) FY16YTD FY17YTD YoY% YoY% IFRS JGAAP IFRS JGAAP (FXN) Revenue 514 2 514.2 514 2 514.2 587 8 587.8 587 8 587.8 +14% +11% Gross Profit 273.8 (53.3%) 278.0 319.3 (54.3%) 327.2 +17% +12% SG&A Expenses 150.9 (29.4%) 167.7 171.0 (29.1%) 194.1 +13
Slide 3: Commencement of Disclosure in IFRS
Commencement of Disclosure in IFRS Main differences from JGAAP (FY17) (billion yen) JGAAP IFRS Impact of change Net sales 587 8 587.8 Revenue 587 8 587.8 ‐ From SG&A to amortization Cost of sales 260.5 Cost of sales 268.4 of developed technology 8.6 Gross profit 327.2 Gross profit 319.3 Non‐amortiza
Slide 4: Adjusted Operating Profit
Adjusted Operating Profit Operating profit in IFRS basis w/ following items adjusted q 1. Amortization of acquired intangible g assets 2. Acquisition‐related costs and temporary gain or loss falling into non‐operating, and extraordinary income and expenses in JGAAP basis (billion yen) FY16YTD FY17YT
Slide 5: Adjusted Operating Profit Variance Analysis (IFRS)
Adjusted Operating Profit Variance Analysis (IFRS) (billion yen) 5.6 9.3 Price Gross margin erosion 17 8 17.8 improve‐ ment 32.9 1.4 7.7 Increase of 7.6 16.4 SG&A Increase Others FX of R&D 16.3 16.9 G/P increment by sales 124.9 11.2 increase 104 6 104.6 108.6 92.2 87.8 76.6 FY16 FY16 FY16 FY17 FY17
Slide 6: Revenue by Region
Revenue by Region FY17YTD FY16YTD Revenue Year‐on‐Year Revenue Comparison 100% = 587.8BJPY billion yen YoY% Comments ( ) FXN Access and imaging devices in TIS along with vascular grafts drove overall growth in 188.9 Japan +1% Cardiac and Vascular Company. Therapeutic 32% 187.0 apheresis grew in Bloo
Slide 7: Revenue by Business Segment
Revenue by Business Segment FY17YTD FY16YTD Revenue Year‐on‐Year Revenue Comparison 100% = 587.8BJPY billion yen YoY% Comments ( ) FXN Cardiac 324.0 All businesses achieved remarkable +24% growth with the impact of acquisition. 55% and 261 5 261.5 ((+19%)) Even with acquired assets excluded, exclude
Slide 8: Cardiac and Vascular: All Businesses Achieved Double Digit Growth in Revenue
Cardiac and Vascular : All Businesses Achieved Double Digit Growth in Revenue (billion yen) FY16 FY17 YoY% Major Topics Impact YTD YTD ( ) FXN 324.0 FX +12.5 261.5 TIS: Closure devices largely contributed to the growth. All organic businesses also remained in a +24% good momentum mainly outside JPN
Slide 9: General Hospital: Steadily Improved Profitability
General Hospital: Steadily Improved Profitability (billi yen)) (billion FY16 FY17 YoY% Major Topics Impact YTD YTD ( ) FXN FX +1.7 General hospital products: Infusion system mainly drove growth in JPN. Downsized low profitable accounts in US and EU. EU Maintained good 157.9 158.8 +1% momentum in Chi
Slide 10: Blood Management: Gaining Back Momentum after Hitting the Bottom in FY16
Blood Management: Gaining Back Momentum after Hitting the Bottom in FY16 (billi yen)) (billion FY16 FY17 YoY% Major Topics Impact YTD YTD ( ) FXN FX (EUR depreciation against USD) ＋4.3 104.7 +11% Blood Center: Returned to stable growth. Achieved Revenue 94.5 (+6%) double digit growth in emerging cou
Slide 11: Major Topics in FY17
Major Topics in FY17 Won “FY2017 Good Design Award” (Oct) Selected as “the the Health and Productivity Stock Selection” Selection “VISICUBE”, “AltaView” “Elemano2” Corporate for four consecutive years (Feb) Won two awards concerning an internal program to provide employment support for cancer
Slide 12: New Products Pipeline in FY17
New Products Pipeline in FY17 Category Products Region Category Products Region Heart‐lung machine Coronary PTCA balloon US: FY18 ◎ Launched (Re launch) (Re‐launch) CV JP, US, EU Stent (TRI) ★ FY18 Next generation of oxygenator ◎ FY18 JP: PTA balloon b ll (TRI) ★ FY18 General V i l infusion Vertical
Slide 13: FY18 Guidance (IFRS)
FY18 Guidance (IFRS) (billion yen) FY17 FY18 FY16‐18 FY16 18 YoY% Results Guidance CAGR Revenue 587.8 608.0 +3% +9% Operating p g Profit 108.6 114.5 +5% +14% (%) (18.5%) (18.8%) Adjusted Operating Profit 124.9 128.5 +3% +11% (%) (21.3%) (21.1%) Profit for the Year 91.3 83.5 ‐9% 9% +23% 23% USD 111 y
Slide 14: FY18 Annual Guidance: Adjusted Operating Profit (IFRS)
FY18 Annual Guidance: Adjusted Operating Profit (IFRS) (billion yen) 7.0 10.0 Gross M i Margin Price 80 8.0 improve‐ Erosion 24.0 ment (JP reimburse‐ 8.0 ment 5.0) Increase 1.5 of Increase FX 14.0 G/P SG&A of R&D 16.4 increment b sales by l increase 124.9 128.5 114.5 108.6 FY17 FY17 FY18 FY18 Operat
Slide 15: FY18 Guidance
FY18 Guidance Revenue Adjusted Operating Profit Comments billion yen YoY% billion yen YoY% W/ slowdown in CV and Cardiac FY18 341.0 26% 87.5 vascular graft businesses, JP and +5% +5% reimbursement revision, revision and Vascular FY17 324.0 26% 83.6 FX taken into account, maintain same momentum Comme
Slide 16: New Products Pipeline in FY18
New Products Pipeline in FY18 Category Products Region Category Products Region Closure device for distal Access radial approach JP Next generation of oxygenator ◎ JP, US CV Next generation of blood PTCA balloon US EU, US, Asia parameter monitoring system C Coronary PTCA balloon b ll JP EU, JP, EU A
Slide 17: DM Business: Distribute Global No.1 CGM in Japan
DM Business: Distribute Global No.1 CGM in Japan Distribute US Dexcom’s Continuous Glucose Monitoring devices exclusively in Japan Beginning sales in FY18, FY18 gradually launch new products over the next few years Considering a collaboration to integrate CGM with an insulin pump platform Prospec
Slide 18: Increased FY17 Year-end Dividend up to 27.0JPY
Increased FY17 Year‐end Dividend up to 27.0JPY Maintain stably increase in dividends even after the adoption of IFRS, and aim for the target dividend payout ratio of 30% over the mid to long term Increased I d FY17 annuall di dividend id d up tto 50 50.0JPY 0JPY Continue to increase FY18 annua
Slide 19: Reference
Reference “FERUMO 19/27
Slide 20: FY17 Revenue and Growth by Region
FY17 Revenue and Growth by Region (billion yen) Business Outside of Japan Japan G. Total Segment S bt t l Subtotal E Europe A Americas i Chi China Ai Asia Cardiac and 54.0 270.0 84.3 119.5 33.9 32.3 324.0 Vascular (+6%) (+22%) (+20%) (+26%) (+16%) (+20%) (+19%) Out of C&V Interventional 40.8 217.8 6
Slide 21: Operating Expenses (IFRS)
Operating Expenses (IFRS) (billion yen) FY16 FY17 YoY% YoY YoY% YTD YTD (FXN) Salaries & Wages 73.9 84.4 +10.5 +14% +11% Sales Promotion 15.6 17.8 +2.2 +14% +11% Logistical Costs 10.7 12.6 +1.9 +18% +15% Depreciation & 12.6 13.7 +1.1 +9% +7% Amortization Others 38.1 42.5 +4.4 +12% +9% SG&A Expenses
Slide 22: Quarterly Results
Quarterly Results (billion yen) JGAAP IFRS FY16Q4 FY17 Q1 Q2 Q3 Q4 (Jan‐Mar) (Apr‐Jun) (Jul‐Sep) (Oct‐Dec) (Jan‐Mar) Revenue 139.8 139.3 145.3 152.3 150.8 Gross Profit 74.3 75.9 79.5 83.2 80.7 (53.2%) (54.5%) (54.7%) (54.6%) (53.5%) SG&A Expenses 47.4 40.2 41.2 43.8 45.9 (34.0%) (28.9%) (28.4%) (28.
Slide 23: CAPEX and R&D Expenses
CAPEX and R&D Expenses (billion yen) Amortization Expand investment in Amortization of of acquired 60.0 production capacity and acquired intangible intangible assets assets space as well as IT and goodwill 44.7 45.4 infrastructure in FY18 41.4 40.7 43.6 42.0 43.0 39.1 Adopt IFRS from FY17 31.5
Slide 24: FY17 Cash Flow (IFRS)
FY17 Cash Flow (IFRS) Operating CF Investment and Finance CF (billion yen) +114.5 ‐51.7 24.1 42.0 10.0 Income Finance taxes Increase of Repayment 15.8 Depreci‐ 43.6 working for short short‐ ation andd capital term debt Dividends 11.9 amorti‐ 106.6 zation CAPEX Others 139.6 167.8 Profit 105.0 before
Slide 25: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity (billion yen) USD EUR CNY Revenue 1.6 0.8 2.0 Adjusted Operating 0.0 0.5 1.0 Profit <R f <Reference> Impact I t off +/‐10% / 10% fluctuation fl t ti North Latin EMEA Asia America America EUR Others CNY Others Adjusted Operating ‐0.1 0.9 6.0 1.3 1.7 3.3 Profit 25/27
Slide 26: The Status of Convertible Bonds
The Status of Convertible Bonds Detail D t il off the th bonds b d (Issued ( in Dec. 2014)) Aggregate Contingent Number of Conversion principal conversion shares required Maturity Coupon price amount trigger price to be issued for (yen) (billion yen) (yen) conversion Dec, 2019 50.0 0.0% 3,868 5,02
Slide 27: 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