Financial Results for the First Quarterof Fiscal Year Ending March 31, 2025 (FY2024)

Aug 8, 2024

Jin Hagimoto
Chief Financial Officer
Terumo Corporation

I'm Hagimoto, Terumo's CFO. This presentation will provide
an overview of the financial results for the first quarter of the
fiscal year ending March 31, 2025.

1

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
events or performance. Accordingly, it should be noted that actual results may
differ from those forecasts or projections due to various factors. Factors affecting
to actual results include, but are not limited to, changes in economic conditions
surrounding Terumo, fluctuations of foreign exchange rates, and state ofcompetition. Information about products (including products currently indevelopment) which is included in this material is not intended to constitute anadvertisement or medical advice.

©TERUMO CORPORATION

2

2

Highlights
Revenue
Highest ever result for a quarter
Demand continued across all companies, which together with foreign exchange
contributed to company-wide growth of +19.9%
Operating Profit
Operating income and net income both reached record quarterly highs
Growth outpaced that of sales due to appropriate cost control measures©TERUMO CORPORATION

3

These are the highlights of this financial statement.
In the first quarter, revenue, operating income, and net
income all reached record quarterly highs.
Revenue growth was approx. 20% companywide due tocontinued demand in all companies and the contribution of
the exchange rate.
Profits grew faster than sales growth due to profit
improvement measures and appropriate cost control.
Next slide, please.

3

P&L
Revenue: Strong inherent growth in all companies, plus effects of pricing measures and one-time factors
Operating Profit: Improved profit margins due to contributions from increased sales and appropriate cost control
100M JPY
Revenue
Gross Profit（%）

SG&A Expenses（%）

R&D Expenses（%）

Other Income and Expenses
Operating Profit（%）

Adjusted Operating Profit（%）

Profit before Tax（%）

Profit for the Year（%）
Average exchange rate (USD/EUR)©TERUMO CORPORATIONFY23 Q1

FY24 Q1

2,153
1,098

2,582
1,376

(51.0%)(53.3%)

651

748(30.2%)(29.0%)

154

174(7.2%)(6.7%)

ChangeChangeexcluding
FX impact

20%
25%

10%
12%

15%

5%

13%

5%

3

-8

-

296

446

51%

24%

(13.8%)(17.3%)

48%

24%

345

511

(16.0%)(19.8%)

298

456(13.8%)(17.7%)

225

339(10.5%)(13.1%)

137JPY/150JPY

156JPY/168JPY

-

53%
50%

4

These are our P&L results.
Revenue growth was double-digit in all companies, reachinga record high of 258.2 billion yen. While some one time
demand contributed to the increase revenue, pricing
measures also contributed alongside continued demand in a
generally favorable business environment. I will cover thedetails in the following region and company pages.
Operating income also grew outpacing sales growth,reaching a record high of 44.6 billion yen. This was due toimproved profit margins achieved through appropriate cost
controls in response to increased sales. Although inflation
has eased, we will continue to monitor changes in the macro
environment, such as rising raw material prices andtransportation costs. Next slide, please.

4OP Variance Analysis (Q1): Sustained demand contributing to increased sales(100M JPY)

Price
+24
Gross
SG&A
R&D
margin Reimburincrease increase
sementprice

G/P increment by sales increase:
Driven by C&V, mainly TIS and Neuro
Gross margin:
Mitigation of inflationary and cost reduction
effects

FX

Price:
Effects of price measures+6

G/P
incrementbysales
increase

SG&A increase:
Increase due to business expansion, in line withplanned figures
FX:
Flow +3.8 B JPY
Stock +2.5 B JPY*

FY23 Q1 FY23 Q1
OP
Adj. OP©TERUMO CORPORATIONFY24 Q1 FY24 Q1
Adj. OP
OP*Includes a +2.2 B JPY impact from change to exchange rateused for elimination of unrealized gains on inventory.

5

This is an analysis of changes in profit in the first quartercompared to the same period of the previous year.
Overall, the sales increased largely due to sustained demand.
First, "G/P increment by sales increase," despite including
some one-time factors, was driven by cardiovascular,
especially TIS and Neurovascular.
The "Gross margin" benefited from the effects of easing
inflation and cost reduction measures such as efficiency
improvement in manufacturing.
As for "price," the effect of measures to revise pricing, whichwere expanded in the previous fiscal year, has become
evident. The price review implemented in the second half oflast fiscal year in Japan will have a positive impact over the
first half of this fiscal year.

5The "SG&A increase" is a healthy increase due to businessexpansion and is in line with planned figures.
"FX" were +3.8 billion yen in flow and +2.5 billion yen in stock.
2.2 billion of this +2.5 billion yen increase in stock is theeffect of a change from this fiscal year in the exchange rateused to calculate elimination of unrealized gains on inventory.
I shall explain the details of this in the following slide.
Next slide, please.

5Change to Exchange Rate Used for Elimination of Unrealized Gains on Inventory
Objective: Taking into account the recent volatilities in exchange rates, to avoid large fluctuations in business results
based on closing rates
Change: Exchange rate used for elimination of unrealized gain on inventory held by overseas subsidiaries
Up to FY23

From FY24

Elimination of unrealized
gains on inventory(Affects PL costs)

Closing rate

Average rateduring stock turnover period

Inventory(BS)

Closing rate

*Based on average inventory turnover period

Closing rate
(No change)

Effect：(100M JPY)

FY24 Q1

Gross profit
Exchange rate（USD）©TERUMO CORPORATION

BeforeRate on the last day of the
fiscal year

After
Average rate during theturnover period

Change

1,354

1,376

＋22

End of FY23: 151
End of FY24Q1: 161

FY24Q1: 156

6

Here I will explain the effects of the exchange rate on P&L.
The recent increase in exchange rate volatility has asignificant impact on our business performance.
Until FY23, we have calculated the unrealized profit using the
spot rate of the closing date, and this has had a possibility ofa significant impact on our profitability.
From FY24, we have changed the exchange rate from the
spot rate to the average rate during the inventory months
supply.
As the unrealized profit included within the inventory is thetotal some of all the internal profits recorded throughout theinventory months supply period, we believe this change will
be able to more accurately capture the profit situation for the
given period.

6

As a result, due to the depreciation of the JPY, we haverecorded an uplift of 2.2bil yen.
This change will not contribute to raising profitability at all
times, but we believe will contribute to stabilizing the impactof foreign exchange rates to our profitability.
Next slide, please.

6

Revenue by Region: Steady progress in all regions, with transient demand also contributing
C&V: Cardiac and Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies,
TIS: Interventional Systems, Neuro: Neurovascular, CV: Cardiovascular, HCS: Hospital Care Solutions, LCS: Life Care Solutions, PS: Pharmaceutical Solutions

FY24 Q1 YTDRegional
breakdown

Revenue (100M JPY)

Comments( ) FX Neutral

Americas FY22

662
740

FY23
FY24

37%

FY24 Q1 YTDYoY change

30%
(15%)

All companies posted double-digit growth, even whenexcluding exchange rate effects. Driven by TIS, Neuro,
and Vascular in C&V, and the blood center business in
TBCT

959

Japan

499
475
528

11%

TMCS grew significantly. Price measures contributed in
HCS, PS also progressing as planned

20%

Europe

386
444
541

22%
(8%)

In C&V, double-digit growth in Neuro / Vascular, evenwhen excluding exchange rate effects; in TBCT, strong
performance in the blood centers business and apheresis
therapy

21%

China

9%
13%

Asia and
Others©TERUMO CORPORATION

194
200
230

15%
(5%)

233
294
323

10%
(0%)

C&V led the way. Neuro showed significant growth as
FY23Q1 experienced lower sales from distributors'
inventory adjustments. TIS exceeded planned figures due
to a rebound from VBP induced order hold-back
The blood center business returned to normal fromFY23Q1 one-time high. C&V and TMCS were driven bycardiology and PS respectively, growing double-digits evenexcluding exchange rate effects

7This slide shows earnings by region.
Although there some sales growth was due to transientdemand, all regions are making steady progress.
In the Americas, all companies posted double-digit growth,even when excluding the exchange rate effects. In
cardiovascular, sales of neurovascular and vascular products
were strong, as was the recovery of TIS, which had
experienced supply issues with some access products in thesame period of the previous year. In blood and cell
technology, the blood center business led the way.
In Japan, Medical Care Solutions grew substantially. Thiswas due to the effect of pricing measures in Hospital Care
Solutions as well as a temporary sales decrease in the same
period of the last fiscal year due to a delay in deliveries,

7

leading to a steady progress in Pharmaceutical Solutions.
In Europe, cardiovascular, neurovascular and vascular grewat double-digit rates, excluding exchange rate effects. In
blood and cell technology, the blood center business andapheresis therapy performed well.
C&V led the way in China. Neuro showed significant growth
as there was a decrease in sales in FY23Q1 due to inventory
adjustments by distributors. In addition, TIS access products
exceeded planned figures due to a rebound from order holdback induced by the start of the application of newcentralized purchasing-based pricing.
In emerging markets such as Asia and the Middle East, while
revenues declined in the TBCT blood center business, which
performed well in FY23Q1, C&Vʼs cardiology and Medical
Care Solutionsʼ Pharmaceutical Solutions led the way withdouble-digit growth, even when excluding exchange rate
effects.
Next slide, please.

7

C&V: Both sales and profits exceeded planned figures, driven by Europe and the U.S.
(C&V: Cardiac and Vascular, TIS: Interventional Systems, Neuro: Neurovascular, CV: Cardiovascular)

Q1( ) FX Neutral

Comments

TIS

1,168
Revenue269©TERUMO CORPORATION: US saw double-digit growth, even when excluding
exchange rate effects, driven by the resolution of supply
issues for some access products+148

Neuro- : Sustained demand led to growth in all global regions,vasculareven when excluding exchange rate effects. This
accelerated growth was partly due to reduced sales in
FY23Q1+64

Cardio- : Hardware demand has run its course. However, driven
vascularby sales in US+14

Vascular : Led by US and Europe. Strong sales expansion of stentGraftgrafts and surgical grafts, as well as hybrid products
sales expansion continued

+35

38%
(+13%)

Profit+20%(+8%)

Adjusted
Operating
ProfitProfit %

Q1
YoY

1,567
1,306

280

（100M JPY）

372

FY22

FY23

FY24

24%

21%

24%

: Increase in sales and the effect of profit improvement
measures, as well as appropriate SG&A control, led to
an increase in income

8

I will now explain our performance by company. First is the
Cardiovascular Company.
Excluding exchange rate effects, sales revenue grew +8%,
and was strong globally, especially in Europe and the U.S.
In terms of growth by business segment, neurovascular andvascular led the way.
In addition to continued strong demand, neuro showed asignificant increase in revenues, partly due to one-time
factors in the same period of the previous year.
In the vascular business, stent grafts and surgical grafts
enjoyed strong sales growth, and hybrid products also
expanded steadily, especially in North America and Europe.
In addition, some access products that had supply issues inNorth America have recovered.

8Profits increased due to an increase in sales, including onetime factors, as well as the effects of profit improvement
measures and steady progress in controlling SG&A
expenses.
Next slide, please.

8

TMCS:

Revenues and profits increased due to the effects of pricing measures,
including sales increases due to one-time factors（100M JPY）

(TMCS: Medical Care Solutions)

Q1

Comments

Q1
YoY( ) FX Neutral

518
460

437

HCS
Hospital Care
Solutions: In Japan, revenues increased due to the effect of pricing
measures implemented in the second half of FY23, thereimbursement rate revision this fiscal year, and strong
sales of infusion sets and syringes. Overseas sales werestrong due to a transient increase in demand in US

LCS
Life Care
Solutions: Decreased sales due to termination of the CGM(Continuous Glucose Monitor) distributorship agreement

PS
Pharmaceutical
Solutions: CDMO business in Japan moved ahead as planned. This
accelerated growth was partly due to reduced sales in
FY23Q1. Overseas, PLAJEX in US performed well

Profit: Profit increased due to higher sales and the effect of pricing
measures. Price revisions implemented in the second halfof FY23 are expected to produce effects in the first half of
this fiscal year

Revenue+18%(+15%)

65
Adjusted
Operating
ProfitProfit %©TERUMO CORPORATION

+46

-2

+37

45
28

+131%
(+145%)

FY22

FY23

FY24

10%

6%

13%
9

This is TMCS, Medical Care Solutions.
Revenue growth was strong in Hospital Care Solutions andPharmaceutical Solutions.
In Hospital Care, the effects of pricing measures and strong
sales of infusion sets and syringes contributed. The pricerevision implemented in Japan in the second half of last fiscal
year is expected to take effect in the first half of this fiscal
year. In addition, a temporary increase in demand in North
America was a factor that boosted sales.
In the Pharmaceuticals business, the CDMO business ismaking steady progress against the plan, which also factored
in lower sales due to the delay in deliveries in the same
period last year. Overseas, PLAJEX in North America
performed well.

9These increases in sales and the effects of pricing measuresresulted in an increase in profit.
Next slide, please.

9

TBCT: Sales expanded due to strong performance by the blood center business（100M JPY）

(TBCT: Blood and Cell Technologies)

Q1

Comments

Q1
YoY( ) FX Neutral

497

Blood Center
Solutions:

Strong sales of apheresis collection systems andwhole blood collection-related products in US andEurope. Rika (Source plasma collection system)is also developing well

+65

+21%
(+9%)

Therapeutic
Solutions:

Strong sales, mainly in US and Europe, as aresult of increased demand for cell collections
associated with cell and gene therapies+21

Cell Therapy
Technologies:

Cell processing systems sluggish due toincreased competition+1

68

Profit:Profit excluding exchange rate effects on par withthat of the same period of the previous fiscal
year. Profit margin maintained at 14%

409
345
Revenue

59
Adjusted
Operating
ProfitProfit %©TERUMO CORPORATION

36 +27%

+16%
(-0%)

(+30%)

FY22

FY23

FY24

10%

14%

14%
10

This is TBCT, Blood and Cell Technology.
Revenue was driven by the blood center business andtherapeutic solutions.
In the blood center business, sales of apheresis collection
systems and whole blood collection-related products werestrong in Europe and the United States. Rika is also
developing well.
Therapeutic Solutions saw strong sales, mainly in the US andEurope, as a result of growing demand for cell collection forcell and gene therapies.
Profits excluding exchange rate effects remained on par withFY23Q1, with profit margin at 14%.
Next slide, please.

10

Awareness of the Current Environment
Unstable

No change

Fundamentals

Inflation

Generally soundDemand and growth potential remain favorable

Easing inflation also requires close monitoring(raw materials, transportation, energy, etc.)

Unstable©TERUMO CORPORATION

Accelerating

Exchange rate fluctuations

Group strategy

Future outlook remains uncertain

With the robust implementation of GS26,
Implementing Bold plus-Alpha (portfolio optimization)

11

Finally, I will review our assessment of the environment
surrounding Terumo.
First, Terumo's fundamentals are generally sound. Demandand growth potential remain unchanged, and the overall
growth potential of the Cardiovascular Company and other
Companies is unfaltering.
On the other hand, the macro environment, including inflationand exchange rate fluctuations, remains volatile, and will
require close monitoring. Due to the uncertain outlook, weplan to revise our guidance cautiously as we assess thesesituations.
We will be accelerating our own strategy.
In addition to steadily implementing the strategies outlined in11GS26, we will thoroughly re-examine our business portfolio,
and then work to rapidly optimize it. In addition, as part of ourefforts to strengthen innovation, we have begun corporate
venture capital activities. This will accelerate the speed withwhich we can acquire new technologies and create an M&A
pipeline.
That's all from me. Thank you for attention.

11

Reference©TERUMO CORPORATION

1212

P&L (QoQ)(100M JPY)

FY23 Q1

Q2

Q3

Q4

FY24 Q1(Apr-Jun)(Jul-Sep)(Oct-Dec)(Jan-Mar)(Apr-Jun)

Revenue

2,153

2,286

2,391

2,389

2,582

Gross Profit

1,098 (51.0%)

1,185 (51.8%)

1,266 (52.9%)

1,243 (52.0%)

1,376 (53.3%)

SG&A Expenses

651 (30.2%)664 (29.0%)

707 (29.6%)

737 (30.9%)748 (29.0%)

R&D Expenses

154 (7.2%)

164 (7.2%)

173 (7.3%)

199 (8.3%)

174 (6.7%)

39-8

Other Income and Expenses

3

12

5

Operating Profit

296 (13.8%)368 (16.1%)

390 (16.3%)

346 (14.5%)

446 (17.3%)

Adjusted Operating Profit

345 (16.0%)

411 (18.0%)

441 (18.5%)

371 (15.5%)

511 (19.8%)

137JPY
150JPY

145JPY
157JPY

148JPY
159JPY

149JPY
161JPY

156JPY
168JPY

Quarterly
Average Rate©TERUMO CORPORATION

USD
EUR

13

13

SG&A (QoQ)(100M JPY)

Salaries & Wages
Sales Promotion
Logistical Costs
Depreciation and Amortization
OthersSG&A Expenses(%)

R&D Expenses
(%)

Total
(%)
Quarterly Average Rate©TERUMO CORPORATIONFY23 Q1(Apr-Jun)

Q2(Jul-Sep)

Q3(Oct-Dec)

Q4(Jan-Mar)FY24 Q1(Apr-Jun)

336
49
47
58
161
651
(30.2%)
154(7.2%)
805(37.4%)

349
44
46
61
164
664
(29.0%)
164(7.2%)
828(36.2%)

371
54
49
65
168
707
(29.6%)
173(7.3%)
881(36.8%)

373
54
51
66
192
737
(30.9%)
199(8.3%)
937(39.2%)

398
52
51
70
178
748
(29.0%)
174(6.7%)
922(35.7%)

USD

137JPY

145JPY

148JPY

149JPY

156JPY

EUR

150JPY

157JPY

159JPY

161JPY

168JPY

14

14

SG&A (YoY)(100M JPY)
FY23 Q1
Salaries & Wages
Sales Promotion
Logistics Costs
Depreciation andAmortization
OthersSG&A Expenses Total（%）

R&D Expenses（%）

SG&A Expenses Total（%）©TERUMO CORPORATIONFY24 Q1

YoY

YoY%

YoY%
excluding FX
impact

336
49
47

398
52
51

62
3
4

18%
6%
6%

7%
-2%
-2%

58

70

12

21%

9%

161
651

178
748

17
97

10%
15%

2%
5%

(30.2%)(29.0%)

14

13%

5%

117

15%

5%

154

174

(7.2%)(6.7%)

805

922(37.4%)(35.7%)
15

15

Adjusted Operating Profit: Adjustments(100M JPY)

Adjusted Operating Profit
Adjustment 1. Amortization of
acquired intangible assets
Adjustment 2. Non-recurring profit or loss
Operating Profit

FY23 Q1

FY24 Q1

345

511

-46

-56

-2

-9

296

446

<General examples of adjustment items>• Acquisition related cost

• Nonlife insurance income• Lawsuit settlement• Loss on disaster• Impairment loss

• Other one-time profit & losses• Restructuring loss
Adjustment 2. Non-recurring profit or loss

FY23 Q1

FY24 Q1

Restructuring loss

-2

-11

Others-2©TERUMO CORPORATION

16

16

CAPEX, Depreciation and Amortization, R&D Expenses(100M JPY)
FY21

FY22

FY23

FY24Q1FY24
Guidance

CAPEX

692

758

784

147

930

Depreciation and Amortization

532

635

702

192

770

Amortization of
acquired intangible assets

161

188

200

56

200

Others

371

447

502

136

570

CAPEX = Construction in progress record basis, lease depreciation (IFRS16) is not included in Depreciation

FY2024 Q1 results (14.7 B JPY): Construction of a new building in the Kofu Plant to strengthen production system for CDMO
(contracted development and manufacturing) and others. Other investments include TIS and Blood and Cell Technology production
increases, source plasma collection-related, R&D investments, and continued investment in IT, including core systems (SAP)FY21
R&D Expenses©TERUMO CORPORATION

518

FY22

FY23

616

691

FY24Q1174

FY24
Guidance
715

17

17

Cash Flows (Q1)
Operating CF
+357
210
456

182

IncomeDepreciation
taxes, etc.
andamortization

Profit before
tax

Investing & Financing CF
-457

127
Working
capitalgains andlosses

Debt
Repayment*
Issuance of Bonds,
147 188
Proceeds fromCAPEX
borrowings

1,349(100M JPY)

163

162

3

Dividends

Others

156

1,949

1,198

2,049

Cash at the endof FY23©TERUMO CORPORATIONCAPEX = Construction in progress record basis*After taking into account derivative settlements

Aligned with period-end account balance "Cash and cash equivalents" on B/S

Cash at the endof FY24 Q1

18

18

Foreign Exchange Sensitivity
Annual impact of 1 JPY depreciation (Flow)(100M JPY)

USD

EUR

CNY

Revenue

25

11

39

Adjusted Operating Profit

1

5

23

USD

EUR

CNY

-2.5

-0.6

-2.0

Impact of 1 JPY depreciation (Stock)
Adjusted Operating Profit©TERUMO CORPORATION

19

19

20