Financial Results for the Fiscal Year
Ended March 31, 2019 (FY2018)
Terumo Corporation
Managing Executive Officer
Kazuaki Kitabatake

May 9, 2019

Both Revenue and Profit in Line w/ the Revised Guidance(billion yen)

FY17Revenue
Gross Profit

FY18

YoY%(億円)
YoY%(FXN)

587.8

599.5

+2%+3%

319.3 (54.3%)

326.5 (54.5%)+2%+4%

SG&A Expenses

171.0 (29.1%)

178.7 (29.8%)+4%+5%

R&D Expenses

41.3 ( 7.0%)

47.7 ( 8.0%)+15%+15%

Other Income and Expenses

1.66.5‐‐

Operating Profit

108.6 (18.5%)

106.6 (17.8%)‐2%+2%

Adjusted Operating Profit

124.9 (21.3%)

122.1 (20.4%)‐2%+1%

Profit before Tax
Profit for the Year106.6 (18.1%)

102.7 (17.1%)‐4%

91.3 (15.5%)

79.5 (13.3%)‐13%

USD 111yen
111yenAverage Exchange Rate
EUR 130yen
128yen Revenue: Fully recovered from shipping delays at Ashitaka factory, and all companies made positive growth Adjusted operating profit: Sales recovery in Cardiac and Vascular Company largely diminished YoY negative
growth from Q3 to Q4
 Profit before tax: Increased FX loss up to 3.8 BJPY in FY18, while posted FX loss of 0.5 BJPY in FY17
 Profit for the year: US tax reform temporarily increased the profit in FY17 (15.3 BJPY)
2/26

FY18 Results in Comparison to the Original Guidance
Revenuebillion yen

Cardiacand
Vascular

Variance

FY18 Results

328.5

billion yen

25%

341.0

FY18 Guidance

26%

165.8

16%

26.8
25.0

15% 15.7+1.0
104.0‐6.6+1.8
15%

105.0

Had an impact of shipping
delays at Ashitaka factory

87.5+2.8
163.0

CommentsVariance80.9‐12.5General
Hospital

BloodManage‐ment

Adjusted Operating Profit‐0.816% 16.5

Beat the guidance mainly inalliance businessIn line with the guidance
excluding FX impact

3/26

Adjusted Operating Profit: Adjustments(billion yen)

FY17

FY18108.6

106.6

Adjustment 1. Amortization of acquired
intangible assets+14.5+14.6

Adjustment 2. Temporary gain and loss

+1.9(*) +0.9

124.9

122.1

Operating profit

Adjusted operating profit<Adjustment items>
 Acquisition related cost  Nonlife insuranceincome Lawsuit settlement
 Loss on disaster Impairment loss Other temporary
 Restructuring lossgains and losses(*) FY18 main items ofAdjustment 2. Temporary gain and loss

Adjust‐ment

Milestone payment for WEB in Neurovascular (‐2.0)+2.0

Settlement (+2.3)‐2.3

Insurance revenue for hurricane impact on factoryin Puerto Rico (+1.6)‐1.6

Write‐off of investment for venture R&Ds (‐1.0)+1.0

Loss on disposal of non‐current assets (‐1.1)+1.1

M&A advisory fees (‐0.7)

+0.7
4/26

Adjusted Operating Profit Variance Analysis
4.0

Grossmargin
14.3

G/P
incrementby salesincrease

16.3(billion yen)6.7

Price
8.3
‐2.5
JP
Reimburse‐
ment Increase of 4.5
2.1
SG&A
‐4.2
Increase Othersof R&D

3.7

FX
15.5

124.9
122.1
106.6

108.6

FY17
Operating
Profit

FY17
Adjusted
Operating
Profit

FY18
Adjusted
Operating
ProfitFY18
Operating
Profit5/26

Revenue by Region
FY18
FY17

Revenue
売上収益

Year‐on‐Year Revenue Comparison
billion yen

100% = 599.5BJPY

YoY%

Comments( ) FXN

31%

188.5
188.9

Japan

+2%

120.4
118.2

Europe‐0%(+4%)

20%
175.6
171.6

Americas
29%
China
8%
12%

Asia andOthers

46.2
41.5
68.8
67.6

+2%(+3%)+11%(+12%)+2%(+5%)

Negative impact of reimbursement price cut andshipping delays in Cardiac and Vascular Company.
Good momentum throughout FY18 in General Hospitaland Blood Management Companies
Positive growth throughout the fiscal year in Cardiac
and Vascular company. Continuous double digit growthin General Hospital Company. Steady growth in BloodManagement CompanyCardiac and Vascular Company maintained mid single
digit growth despite shipping delays. General HospitalCompany continued having a good momentum. BloodManagement Company made a negative growth w/ adecrease in therapeutic apheresis
TIS in Cardiac and Vascular Company significantly
recovered and returned to double digit growth bynormalized shipments
Blood Management Company recovered to a great
extent. All companies made a positive growth

6/26

Revenue by Business Segment
FY18
FY17Revenue

Year‐on‐Year Revenue Comparison
billion yen

100% = 599.5BJPY

YoY%Comments( ) FXN

55%

CardiacandVascularGeneral
Hospital

328.5

+1%

324.0(+2%)

165.8

+4%

158.8(+5%)

Continuous recovery trend with thenormalized shipments

Steady growth throughout the fiscal year.
Continuous 30% growth in alliancebusiness driven by JPN and EU28%

17%

BloodManage‐ment

105.0+0%104.7(+2%)

Globally steady growth in blood center
products

7/26

Cardiac andVascular : Revenue Increase by Overcoming the Shipping Delays(billion yen)
FY17FY18

YoY%

Major Topics

Impact( ) FXN

324.0

328.5

+1%

Revenue(+2%)

83.6+0.2+4.7
‐0.3
‐0.1

80.9

Adjusted
OperatingProfit(%)‐3%(‐1%)(26%)

TIS: Back to positive growth by overcoming
the impacts of JP reimbursement price cutand shipping delays
Neurovascular: Double digit growththroughout FY18
CV: Fell behind on the replacement ofblood parameter monitoring system withnext generation models
Vascular graft: Transition to direct sales
model for stent graft in Japan

Recovery in revenue for TIS products diminishednegative YoY growth from Q3 to Q4

(25%)
8/26

GeneralHospital : Steady in Profit of All Businesses(billion yen)
FY17

FY18

YoY%

Major Topics

Impact( ) FXN

158.8

165.8

+4%(+5%)

Revenue

Adjusted
OperatingProfit(%)

26.8+1.4+1.10.0
+4.7

26.8

+0%(+0%)(17%)

General hospital product: Overall growth
driven by pumps and needlefree closedsystem transfer device along w/ infusionlines in JP
Pharmaceutical: Good result in I.V. Solutions
and pain management products.
Continuous sales expansion of adhesion
barrierDM Healthcare: Steady growth in DMbusiness
Alliance: 30% growth driven by JP and EU(16%)

Profit increased since increase in R&D expenses wasmitigated by revenue growth in high value‐addedproducts. Depreciation for Yamaguchi factory gets
into full swing in FY19
9/26

BloodManagement: Back to Positive Profit Growth w/ Steady Revenue(billion yen)
FY17FY18

YoY%Major Topics

Impact( ) FXN104.7

105.0

Revenue

Adjusted
OperatingProfit(%)+0%(+2%)

15.1+2.8‐2.6

15.7+4%(+13%)(14%)

Blood center products: Overall steady
growth in and outside Japan driven mainly
by automated blood processing system
Therapeutic apheresis: Made a negative
growth due to the special demand in thelast fiscal year

Increase due to R&D subsidy from US government in
FY18Q4 as planned

(15%)
10/26

Major Topics in FY18
 Enhanced work style reform and Health and Productivity Management by opening
satellite offices and distributing healthcare wearables to associates, etc.
Corporate  Selected as “the Health and Productivity Stock Selection" for five consecutive years (Feb) Five products won “GOOD DESIGN AWARD" in FY18.
The company has received the award for twenty three consecutive years (Oct) Launched drug eluting stent “Ultimaster Tansei" in EU (May) and JP (Sep) Concluded the agreement w/ U.S.‐based DexCom, Inc. to distribute its CGM devices
exclusively in JPN (May) and launched it (Feb) Determined to invest 7.0 BJPY in Terumo Yamaguchi D&D to Increase the capacity ofPFS production lines in alliance business (Jul)Business  The biosimilar, using Terumo’s PLAJEX prefillable syringe in contract manufacturing, waslaunched in EU (Dec)
 Received US FDA approval for “WEB" intrasaccular aneurysm treatment device (Dec)
 Acquired Essen Technology (Beijing) Co., Ltd., a Chinese manufacturer specialized in drug
eluting stent (Dec) Announced the plan to construct a new manufacturing building at Vietnam factory w/
the investment of 15.0 BJPY to strengthen the production system of TIS products (Feb)
11/26

New Products Pipeline in FY18Category
AccessProductsRegion

LaunchClosure device for distal
radial approach

JP

FY19

PTCA balloon

US

Launched

JP

Launched

EU, Asia

FY19DES (Ultimaster Tansei)

EU, JP,
Asia

Launched

Stent (TRI)

JP, US

FY19

PTA balloon (TRI)

JP, US

Launched

PTA guiding sheath (TRI)

JP, US

Launched

Drug coated balloon

EU

FY19(Sofia EX)

EU, US

FY19 1H

Mini balloon

EU, US

FY19 1H

Coronary PTCA balloon

NeuroRegion

Launch

Products

EU, US

Launched

JP

FY19

Next generation of blood
parameter monitoring system

EU, US,
Asia

Launched

TAA stent graft (low profile)

EULaunchedEU

Launched

General Portable vascular access imaging
hospital device
productJP

Launched

DMJP

FY19 1H

EU, US,
Asia

Launched

EU, US,Asia

Launched

Next generation of oxygenator
CVPeripheral

Distal access catheter

Category

Vasculargraft
AAA stent graft(Anaconda w/ smaller diameter)

Insulin patch pump
New software for automatedblood collection system

Blood
Manage‐ New disposable kitsmentfor automated blood component
processing system

12/26

FY19 Guidance(billion yen)

FY18Results

FY19Guidance

YoY%
(FXN)

+6%

Revenue

599.5

635.0

Operating Profit(%)

106.6109.0+2%(17.8%)(17.2%)

(+7%)

122.1

124.0+2%(20.4%)(19.5%)

(+6%)

79.5

81.0+2%

USD 111yen
EUR 128yen

108yen123yenAdjusted Operating Profit(%)
Profit for the Year
Average Exchange Rate(+8%)

FY16‐19
CAGR+7%+7%+6%+14%

13/26

FY19 Annual Guidance: Adjusted Operating Profit
4.8(billion yen)

8.0

Gross
margin33.0

G/P
incrementby salesincrease

15.5

Price
4.7
‐5.0
JPMDR
12.5
Reimburse‐ ‐3.2
ment IT invest‐‐3.0
ment Increase
5.7‐1.5ofSG&A Increaseof R&D

5.0FX15.0

129.0
124.0

122.1

109.0

106.6

FY18
FY18
Operating Adjusted
ProfitOperatingProfit

FY19Adjusted
OperatingProfit(FXN)

FY19Adjusted
OperatingProfit

FY19Operating
Profit14/26

FY19 Guidance
Adjusted Operating Profit

Revenuebillion yen

YoY%billion yen

Cardiac FY19andVascular FY18357.0
328.5

+9%
(+12%)YoY%( ) FXN( ) FXN

85.0

24%

80.9

25%

Comments

Back to double digit growth forrevenue in TIS business.

+5%(+10%)

Negative impact of JP reimburse‐
ment price cut and FX
Maintain steady momentum.

171.0GeneralHospital165.8+3%(+4%)

15%

25.5

16%

26.8

‐5%Depreciation increase due to(‐5%)

capacity expansion of Terumo
Yamaguchi D&D

BloodManage‐ment

107.0+2%(+5%)

105.0

14% 15.5
15% 15.7

Steady growth mainly in‐1%(+5%)

blood center products.
Negative impact of FX
15/26

New Products Pipeline in FY19
Category

ProductsRegion

Category
Generalhospital
product

AccessClosure device for distal
radial approach

JPCoronary

PTCA balloon

EU,Asia

Peripheral Stent (TRI)
Intrasaccular aneurysm treatment
device (WEB)Distal access catheter
NeuroRegion

Next generation of syringe pumpJP

Narcotic analgesic for postoperative
pain management (Fentanyl injection)

JP

JP, US

Adhesion barrier (AdSpray mini)

JP

US

Continuous glucose monitoring system

JP

Blood glucose monitoring system

JP(Sofia EX)

EU, US

Mini balloon

EU, US

D&D

DM andconsumer Insulin patch pump
healthcare

JP

Aspiration catheter

JP

Next version of blood pressure monitor

JP

Stentriever

JP

Next version of thermometerJP

Next generation of oxygenator

JP

Heart lung machine (re‐launch)JP

Large‐bore vascular graft(Triplex Advanced)

JPCVVasculargraft

ProductsBloodand finish system for cell therapy
Manage‐ Fillprocessing (FINIA)
mentGlobal16/26

FY18 Year‐end Dividend Proposal: 27.0 JPY
 Stably increasing, and aim for the target dividend payout ratio of 30% over themid to long term
 FY18 annual dividend: 54.0 JPY (No change from the original guidance) Continue to increase FY19 annual dividend up to 28.0 JPY(56.0 JPY which is calculated based on total shares issued and shares
outstanding before the two‐for‐one stock split implemented in April 1st, 2019)( ) = EPS based on total shares issued and shares outstanding before the stock split

FY18Results

FY19
Guidance

Profit for the year (BJPY)

79.5

81.0

EPS (JPY)

217

109 (218)

54.0 JPY

28.0 JPY (56.0)

Interim 27.0
Year‐end 27.0

Interim 14.0 (28.0)
Year‐end 14.0 (28.0)

Dividend proposal/share
Dividend payout ratio

24.8%

25.7%
17/26

Reference18/26

FY18 Revenue and Growth by Region(billion yen)

BusinessSegment

Japan

Cardiac andVascularOutside of Japan

G. Total

SubtotalEurope

Americas

China

Asia

47.8

280.7

84.9

124.9

38.2

32.7

328.5

(‐11%)

(+5%)

(+3%)

(+5%)

(+14%)

(+4%)

(+2%)

35.9

227.6

68.1

96.6

35.7

27.2

263.5

(‐12%)

(+6%)

(+3%)

(+6%)

(+14%)

(+4%)

(+3%)

GeneralHospital

127.9

37.9

9.5

8.6

2.7

17.2

165.8

(+4%)

(+6%)

(+11%)(+8%)(+17%)

(+2%)

(+5%)

Blood
Manage‐
ment

12.5

92.4

26.0

42.2

5.3

18.9

105.0

(+5%)

(+2%)

(+5%)

(‐2%)

( +2%)

(+9%)

(+2%)

G. Total

188.5

411.0

120.4

175.6

46.2

68.8

599.5

(‐0%)

(+5%)

(+4%)

(+3%)

(+12%)

(+5%)

(+3%)

Out of C&V
Interventional
Systems**Including Neurovascular business(YoY%): FXN
19/26

Operating Expenses(billion yen)

FY17

FY18

YoY

YoY%

YoY%

Salaries & Wages

84.4

87.4+3.0+4%+4%Sales Promotion

17.8

18.2+0.4+2%+3%

Logistical Costs

12.6

13.6

+1.0+8%+9%Depreciation &Amortization

13.7

14.3

+0.6+4%+5%Others

42.5
171.0

45.1
178.7

+2.6

+6%+7%(29.1%)(29.8%)+7.6+4%+5%

41.3

47.7( 7.0%)(8.0%)+6.3+15%+15%

212.4

226.3

(36.1%)(37.9%)+14.0+7%+7%

SG&A Expenses Total
R&D Expenses
Operating Expenses
Total(FXN)

20/26

Quarterly Results(billion yen)

FY17Q4(Jan‐Mar)

FY18Q1(Apr‐Jun)

Q2(Jul‐Sep)

Q3(Oct‐Dec)

Q4(Jan‐Mar)

Revenue

150.8

143.0

142.0

158.6

155.9

Gross Profit

80.7

79.9

74.7

87.6

84.3

(53.5%)(55.8%)(52.6%)(55.2%)(54.1%)

45.9

43.5

43.5

45.0

46.7

(30.4%)(30.4%)(30.5%)(28.4%)(29.9%)

R&D Expenses

12.4

11.3

12.4

12.3

11.6

(8.2%)(7.9%)(8.8%)(7.7%)(7.5%)

Other Incomeand Expenses

‐ 0.4

0.8

2.9

0.6

2.1

Operating Profit

22.0

25.9

21.7

30.9

28.2

(14.6%)(18.1%)(15.3%)(19.5%)(18.1%)

27.4

30.5

24.8

35.9

30.9

(18.1%)(21.4%)(17.4%)(22.6%)(19.9%)

USD

108yen109yen111yen113yen110yenEUR

133yen130yen130yen129yen125yen

SG&A Expenses

Adjusted
Operating Profit
Average
Exchange
Rate

21/26

CAPEX and R&D Expenses
Amortization ofacquired
intangible assets
and goodwill
45.4
44.7
39.1
31.5

(billion yen)Amortizationof acquired
intangible
60.8
assets75.0

49.0
43.6 42.0

44.0
14.7

20.2

20.8

14.5

14.6

24.524.6

27.6

29.4
34.3
CAPEX = C.i.P. record basis

CAPEX

Depreciation

47.7

50.0

FY18

FY19Guidance

41.3
33.1

33.6

R&DExpenses

FY15

FY16

FY17

JGAAP <‐ ‐> IFRS Expanded investment inproduction capacity andspace as well as IT in FY18
 Depreciation includes
amortization of capitalized
development expenses
 Amortization of leased
assets and liabilities(IFRS16) is not included in
FY19 guidance
 Further promote R&D
activities mainly for TIS,
neurovascular and BloodManagement Company Capitalized development
expenses are included inCAPEX
FY17:0.8 BJPY
FY18:2.4 BJPY
FY19 guidance :3.0 BJPY
22/26

FY18 Cash Flow
Operating CF
+93.6
44.0

102.7

Depreci‐
ation andamorti‐
zationInvestment and Finance CF‐138.4

30.2
Incometaxes

22.9
Increase ofworking
capital

60.8

CAPEX
Profitbeforetax

167.8

Cash at end of
FY17(billion yen)

47.8
19.6
Repayment
ofborrowings Dividends

20.3

10.1
Acquisition of Others
Essen
Technology

CAPEX = C.i.P. record basis
Cash at the end of each fiscal year is equal to “cash and cash equivalents” on BS123.0

Cash at end of
FY1823/26

Foreign Exchange Sensitivity
Annual impact of one‐yen depreciation(billion yen)

USD

EUR

CNYRevenue

1.7

0.8

2.2

Adjusted Operating
Profit

0.0

0.5

1.2

<Reference> Impact when yen is depreciated by 10%
North
Latin
America America

Adjusted
Operating
Profit

‐0.1

1.0

EMEA

Asia

EUR

OthersCNY

Others

6.5

1.3

1.9

3.6

24/26

The Status of Convertible Bonds
 Detail of the bonds (Issued in Dec. 2014)
Maturity

Aggregate principal
amount(billion yen)

*After two‐for‐one stock split implemented in Apr. 2019

CouponConversion price(yen)Contingent
conversion trigger
price (yen)Number of shares required
to be issued for conversion

Dec. 2019

50.0

0.0%

1,927

2,505

approx. 26M sharesDec. 2021

50.0

0.0%

1,927

2,505

approx. 26M shares

Total

100.0

approx. 52M shares Status of conversion (as of Apr. 30, 2019)
Bonds

Amount of shares issued for conversion

Number of shares issued for conversion(% against the total amount of bond)(% against total number of issued shares)

Convertible Bonds
due Dec. 201950.00 BJPY (100.0%)

25.9M shares (3.4%)

Convertible Bonds
due Dec. 2021

25.21 BJPY (50.4%)

13.1M shares (1.7%)

75.21 BJPY (75.2%)

39.0M shares (5.1%)

Total

Allocated treasury shares to the shares issued for conversion•Status of treasury shares: 16.4M shares(at the end of Apr. 2019, treasury stock cost per share: 1,949 JPY, % against total number of issued shares: 2.2%)

25/26

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 financialprojections are based upon our assumptions using information available to us at the time and are notintended to be guarantees of future events or performance. Accordingly, it should be noted that actualresults may differ from those forecasts on projections due to various factors. Factors affecting to actual
results include, but are not limited to, changes in economic conditions surrounding Terumo, fluctuationsof foreign exchange rates, and state of competition.
The market share information in this presentation is partly derived from our own independent research.

26/26