Financial Results for the First Quarter ofFiscal Year Ending March 31, 2018 (FY2017)
Terumo Corporation
Managing Executive Officer,
ff
Investor Relations, Corporate Communication Dept.
Kazuaki Kitabatake
August 3,3 2017

Overseas Double Digit Sales Growth Drove Overall Growth Both inSales and Profit(billion yen)YoY%

FY16 Q1

FY17 Q1

YoY%

124.5
1245
69.2 (55.6%)

139.3
1393
78.3 (56.2%)

+12%
+13%

+11%
+15%

SG&A expenses

39.7 (31.9%)

46.4 (33.3%)

+17%

+15%

R&D Expenses

8.1 ( 6.5%)

8.5 ( 6.1%)

+5%

+4%

Operating Income21.4 (17.2%)

23.4 (16.8%)+9%+17%(Excl. Amortization)

25.9 ((20.8%))

30.6 ((22.0%))

+18%

+24%

Ordinary Income
Net Income

15.1 (12.1%)

22.7 (16.3%)+50%

10.1 ( 8.1%)

16.3 (11.7%)+61%

Net Sales
Gross Profit(FXN)

USD 108 yen
111 yen
EUR 122 yen
122 yen Sales: All businesses in Cardiac and Vascular Company made double digit growth, driving overall growth in sales
Average Exchange Rate

 Operating income: Sales expansion as well as gross margin improvement contributed to the growth Ordinary income: Posted FX gain of 0.2 BJPY in FY17 Q1, while posted loss of 5.5 BJPY in FY16 Q1
 Net income: Decrease in corporate tax rate due to expanded scope of tax effect for inside andoutside subsidiaries

2/19

Operating Income Variance Analysis(billion yen)
1.3
3.1

8.1

21.4

FY2016 Q1

G/P
incrementby salesincrease

Gross margin
improve‐ment bycost
reduction,etc

Priceerosioni

3.5

Increase ofSG&A(Increase ofsalaries &wages:ages 2.1))

Impact of M&As made in FY16/ excl. amortization +1.4
O/P
Amortization*‐ 2.6*Figures above is tentative
since PPA is still in process.

0.3
Increaseof R&D

2.6
IIncrease off
goodwill,etc.
(Impact ofM&As
made inFY16)

1.5
FX

23.4

FY2017 Q1
3/19

Net Sales by Region
FY17 Q1
FY16 Q1

Net Sales

Year‐on‐Year Sales Comparison
billion yen

100% = 139.3BJPY

YoY%

Comments( ) FXN

44.9

32%

Japan

45.5+12%27.7

Europe(+12%)

24.7

20%

41 1
41.1

Americas
30%
7%
11%

Chinahi
Asia andOth
Others‐1%

32.9+25%(+21%)

10.2

+22%

8.4(+23%)
15.3

+18%

13.0(+15%)

Good momentum in Cardiac and VascularCompany alleviated the negative growth inGeneral Hospital Company. However overallsales ended up being slightly decreased.
All businesses in Cardiac and VascularCompany made double digit growth, driving
overall growth in sales.
Not only did Blood Management Company
gain a momentum back, but all businesses inCardiac and Vascular Company achieved
high growth.
pachieved double digit
gAll three companies
growth.
All businesses in Cardiac and VascularCompany as well as Blood Management
Company made double digit growth.

4/19

Net Sales by Business Segment
FY17 Q1FY16 Q1Net Sales

Year‐on‐Year Sales Comparison
billion yen

100% = 139.3BJPY

YoY%

Comments( ) FXN

57%+24%

CardiacandVascular

79.1(+22%)

63 7
63.7

‐4%
36 9
36.9

GenerallG
Hospital

38.4

26%

17%

Blood
Manage‐ment((‐4%))

+4%
23.3
22.4(+3%)

A ggreat start for the acquired
qproducts,p,
as well as solid organic growth madeall businesses achieve double digit
growth.
Inventory adjustment for general
hospital products at distributors, aswell as conservative buying of pumps,
negatively impacted.
Annualized the negative impact ofprice decline for blood center products
in US. Blood center products andtherapeutic apheresis system in Asiaand Latin Americas drove overall
growthgrowth.

5/19

Cardiac andVascular: All Businesses Made Double Digit Growth, Achieving
Increase Both in Sales and Profit(billion yen)

FY16 Q1

FY17 Q1

YoY%

Major Topics

Impact( ) FXN

Impact of FX

79.1
63 7
63.7

+24%

Sales

(+22%)+1.1

TIS: Continuous good momentum in access+1.3
devices
Neurovascular: Hydrogely g coils and suction caths+1.4
drove overall growth
CV : Achieved double digit growth mainly+1.0overseas
Increase in sales due to M&As+9.5

20.6

BusinessProfit+6%

19.5(31%)(+14%)

Achieved increase in profit due to sales expansion

(26%)
6/19

GeneralHospital : Continuous Improving Trend in Profitability(billion yen)
FY16 Q1

FY17 Q1( ) FXN

38.4

36.9

Sales

5.2

‐4%(‐4%)

Impact of FX
General hospital products: Inventory
adjustment at distributors, as well as
conservative buying of pumps
Pharmaceutical and nutrition: Ended
distribution of bag for dialysate
Healthcare: Downsizing accounts of bloodpressure monitor, etc.
Alliance: Timing of purchasing orders frompharmaceutical companiespp
differed fromFY16 Q1

Impact+0.2‐ 0.6‐ 0.2‐ 0.3‐ 0.3

5.7+9%

Business
Profit(+10%)(14%)

Major Topics

YoY%

Continuous improving trend in profitability

(15%)

7/19

Blood: Returned to Growth Trajectory w/ Continuous
Management Improving Trend in Profitability(billion yen)
FY16 Q1

FY17 Q1

Major Topics

YoY%

Impact( ) FXN

22.4+4%

Sales

BusinessBiProfit

Impact of FX

23.3(+3%)+30%
2.73.5(12%)(15%)(+47%)

Blood center business: Made double digit
ggrowth in Asia and Latin Americas
Therapeutic Apheresis: Achieved growth
mainly outside JPN+0.2+0.6+0.4

Achieved growth in profit due to the sales expansionof highly profitable therapeutic apheresis along withan increased production volume for blood center
products

8/19

Major Topics in FY17 Q1
New management team is in place to accelerate theCorporate
execution of Mid‐to Long‐term Growth Strategy

Announced the completion of Acquisition of Bolton Medical forTAA and AAA stent grafts (Apr)BusinessEstablished “TIS Mastery Center” at Ashitaka factory
to further promote and reinforce R&D in TIS (Jun)EMA (European Medicines Agency) validated the Marketing Authorization
Application for a biosimilar drug prefilled in PLAJEX™(May)9/19

New Products Pipeline in FY17
Category
Coronary

Peripheral

ProductsRegion

PTCA balloon

USStent (TRI)★

JP, US &EU

PTA balloonb ll(TRI)★

JP,, US &EU

PTA guiding sheath (TRI)★

JP, US &EU

Drug coated balloon◎★

Embolization coil◎

NeuroHydrogel coil 3D
Radioembolization beads(Quirem)

CVProductsRegion

Heart lung machine(Re launch)(Re‐launch)◎Launched

Next generation of oxygenator◎GlobalGeneral
HospitalProducts

V i l infusion
Verticali f i pump

EUDMInsulin patch pump

EUBlood
New software for automatedM
Managementt blbloodd collection
ll ti systemt

JP

Needleless infusion system for
Anti‐cancer drugs

JP:
Launched★

JPGlobalEU:
Launched
US&EU:
Launched
JP: Q2

Distal protection device

Oncology

Category★

◎ Item with large contribution to sales and profit★ Item with highly innovative technology

EU
Drug Coated Balloon“Kanshas”
EUHeart Lung Machine
Re‐launch
GlobalInsulin Patch Pump
JP

10/19

Reference

11/19

FY17 Q1 Net Sales and Growth by Region(billion yen)

BusinessS
SegmenttJapanp

Cardiac andVascularOutside of Japan

G. Total

Subtotal

EuropeAmericas

China

Asia

13.5(+5%)65.6(+27%)

20.1(+20%)

29.1(+32%)

8.5(+26%)

7.9(+27%)79.1(+22%)

Out of C&V
Interventional
S t
Systems**

10.3(+4%)

53.3(+28%)

16.1(+17%)

22.6(+38%)

7.9(+24%)

6.7(+30%)63.5(+23%)

GeneralHospital

28.9(‐4%)

7.9(‐6%)1.9(‐12%)1.7(‐6%)0.5(+10%)3.9(‐4%)36.9(‐4%)

BloodManage‐ment

2.4(‐3%)20.9(+4%)

5.8(‐3%)10.3(+4%)

1.2(+11%)

3.5(+14%)23.3(+3%)

G. Total44.9(‐1%)

94.4(+18%)

27.7(+12%)41.1(+21%)

10.2(+23%)

15.3(+15%)

139.3(+11%)*Including Neurovascular business(YoY%): FXN
12/19

Operating Expenses((billionyen))

FY16 Q1

FY17 Q1

YoY

YoY%

YoY%

Salaries & Wages

17.9

20.3+2.4+13%+12%

Sales Promotion

3.8

4.1+0.3+7%+7%

Logistical Costs

2.8

3.0+0.2+7%+7%

Depreciation &Amortization

62
6.2

919.1+2.9
29+48%
48%+45%45%

Others

9.0
39.7

9.9
46.4+0.9+9%+8%(31.9%)(33.3%)+6.7+17%+15%

818.1

85
8.5(6.5%)(6.1%)+0.4+5%+4%

47 8
47.8

54 9
54.9

(38.4%)(39.4%)+7.1
71+15%
15%

+13%
13%

SG&A Expenses Total
R&D Expenses
Operating Expenses Total

(FXN)

13/19

Quarterly Results((billionyen))

FY16 Q1((Apr‐Jun)p)

Q2((Jul‐Sep)p)

Q3((Oct‐Dec))

Q4((Jan‐Mar))FY17 Q1((Apr‐Jun)p)

Net Sales

124.5

120.6

129.3139.8

139.3

GGrossP
Profit
fit

69 2
69.2

65 8
65.8

68 7
68.7

74 3
74.3

78 3
78.3

(55.6%)(54.6%)(53.2%)(53.2%)(56.2%)

39.7

39.6

41.0

47.4

46.4

(31.9%)(32.9%)(31.7%)(34.0%)(33.3%)

8.1

8.2

8.2

9.2

8.5

(6.5%)(6.8%)(6.4%)(6.6%)(6.1%)

21.4

18.0

19.5

17.7

23.4

(17.2%)(14.9%)(15.1%)(12.6%)(16.8%)

25.9

22.6

24.5

24.2

30.6

(20.8%)(18.8%)(19.0%)(17.4%)(22.0%)

USD

108 yen

102 yen109 yen

114 yen

111 yenEUR

122 yen

114 yen

118 yen

121 yen

122 yen

SG&A Expenses
R&D Expenses
OperatingIncome(Excl.
Amortization)
Average
Exchange
Rate

14/19

CAPEX and R&D Expenses(billion yen)Amortizationof Intangibles
aandd GoodwillGood
41.4 40.7

56.0
46 5
46.5

45 4
45.4

44 7
44.7
39.1

31.5
20 2
20.2

17 7
17.7

28.5

20 8
20.8

CAPEX

13.8
8.9
24.5

23.0

24.6

7.2
6.5

Depreciation

27.5
CAPEX: CIP basis
41.0

29.4

33.1

33.6

R&DExpenses
FY2014FY2016FY2017 Q1

 Amortization ofintangibles andgoodwill areprojected to increase
due to M&As
made in FY16
 Further promote US‐
based R&D activities
for TIS andneurovascular

8.5*

FY2015

 Expand investment inproduction capacity
and space as well as
IT infrastructure inFY17

FY2017
Guidance*Investment into venture technologies was booked in other than R&D expenses. (0.7 BJPY)

15/19

Cash Flow
Operating CF+15.6

Investment and Finance CF+3.1(billion yen)

8.1
13.8

23.4

Depreci‐
ation andamorti‐
zationCorporateTax

Finance
13.5
Increase ofworkingcapital

77
7.7
8.9

Repayment
for short‐term debt

105.4

Cash at end of
FY16Others

139 9
139.9

CAPEX
Incomebeforetax

Dividends

0.2

124.1
120.0

CAPEX = C.i.P. record basis
Cash at end of each fiscal year is consistent with “cash and deposits” on BS

Cash at end of
FY17 Q1
16/19

FY17 Foreign Exchange Sensitivity(billion yen)

USD

EUR

CNY

Excl.
Amortization

Incl.
Amortization

Net Sales

1.6

1.6

0.8

1.8

Operating
Income

0.0

‐0.2

0.5

0.9

<Reference> Impact of +/‐10% fluctuation
NorthLatin
America America

Operatingpg
Income

‐1.8
1808
0.8

EMEA

AsiaEUROthers

CNYOthers

56
5.6

101.0

141.4

33
3.3
17/19

(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 yyear‐end financial announcement : IFRS
(billion yen)Japanese GAAP
FY17 Q1

ReferenceIFRS
FY17 Q1

Net Sales

139.3

139.3

Operating
Income (%)

23 4
23.4

28 6
28.6(16.8%)(20.5%)

Adjusted
Operating
Income (%)

30 6
30.6

31 7
31.7(22.0%)(22.8%)Net Income

16 3
16.3

20 620.6

Impact‐+5.2+1.1+4 3+4.3
18/19

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 notintended to be guarantees of future events or performance. Accordingly, it should be noted that actual
results 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.
Th marketThek sharehinformation
i fi ini thishi presentation
i iis partly
l dderived
i d ffrom our own iindependentddresearch.
h19/19© Terumo Corporation