Financial Results for the Fiscal Year

Ended March 31, 2024 (FY2023)

May 14, 2024

Jin Hagimoto

Chief Financial Officer

Terumo Corporation

I'm Hagimoto, Terumo's CFO. I would like to present an overview of the year-end financial results for the fiscal year ending March 31, 2024.

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 of competition. Information about products (including products currently in development) which is included in this material is not intended to constitute an advertisement or medical advice.

©TERUMO CORPORATION

2 / 14

2

Highlights

FY23 Results

Record highs in revenue, operating profit, and net income

Revenue growth driven by Americas and Europe, +7% companywide (excluding exchange rate effects)

Operating profit growth outpaced sales growth, +14% companywide (excluding exchange rate effects)

FY24 Guidance

Continued global growth, revenue growth +7% (excluding exchange rate effects)

Operating profit up 16% (excluding exchange rate effects) due to expansion of highly profitable businesses

©TERUMO CORPORATION

3 / 14

These are the highlights of this year's financial statement.

In FY23, revenue, operating profit, and net income all reached record highs.

Revenue growth was +7% excluding exchange rate effects, driven by growth in the U.S. and Europe.

Operating profit growth outpaced sales growth, increasing by +14% when excluding exchange rate effects.

Net income surpassed 100 billion yen for the first time to reach 106.4 billion yen.

For FY24, we expect continued growth globally, with revenue growth of +7% excluding exchange rate effects.

Operating profit is expected to increase by +16%, excluding exchange rate effects, due to the expansion of highly profitable businesses.

Next slide, please.

P&L

Revenue: Record high. TIS, blood center business, Neuro, and Vascular led with double-digit growth

Operating profit: Record high. Steady progress in profit improvement measures. SG&A expenses increased due to increased headcount to expand sales of therapeutic devices in North America

100M JPY

FY22 Q4 YTD

FY23 Q4 YTD

Change

Change excluding

FX impact

Revenue

8,202

9,219

12%

7%

Gross Profit

4,174

4,792

15%

9%

%

(50.9%)

(52.0%)

（ ）

2,383

16%

SG&A Expenses

2,759

10%

%

(29.1%)

(29.9%)

（ ）

616

12%

R&D Expenses

691

8%

%

(7.5%)

(7.5%)

（ ）

-2

-

Other Income and Expenses

59

-

Operating Profit

1,173

1,401

19%

14%

%

(14.3%)

(15.2%)

（ ）

1,380

14%

Adjusted Operating Profit

1,568

8%

%

(16.8%)

(17.0%)

（ ）

1,161

21%

Profit before Tax

1,408

%

(14.2%)

(15.3%)

（ ）

893

19%

Profit for the Year

1,064

%

(10.9%)

(11.5%)

（ ）

Average exchange rate (USD/EUR)

135JPY/141JPY 145JPY/157JPY

©TERUMO CORPORATION

4 / 14

FY22 Q4

FY23 Q4

Change

2,022

2,389

18%

990

1,243

26%

(49.0%)

(52.0%)

597

737

23%

(29.5%)

(30.9%)

160

199

25%

(7.9%)

(8.3%)

5

39

651%

238

346

45%

(11.8%)

(14.5%)

284

371

30%

(14.1%)

(15.5%)

240

351

46%

(11.9%)

(14.7%)

191

265

38%

(9.5%)

(11.1%)

132JPY/142JPY 149JPY/161JPY

These are our P&L results.

Sales revenue for the full year exceeded 920 billion yen, a record high. Cardiac & Vascular's TIS, neuro and vascular, as well as the Blood and Cell Technologies blood center business led with double-digit growth.

Operating profit also reached a record high of 140.1 billion yen.

The increase in SG&A expenses due to an increase in employee headcount to expand therapeutic devices sales in North America was more than offset by the steady progress of profit improvement measures and the revision of pricing policy.

Net income for the year reached a record high of 106.4 billion yen.

4

Gross margin, operating profit margin, and adjusted operating profit margin for the full year all improved from the previous year. Next slide, please.

4

OP Variance Analysis (Q4): Profitability improvements as planned

(100M JPY)

Price

+35

Gross

Reimbur-

SG&A

FX

margin

sement

increase

R&D

G/P

price

increase

+6

increment

by

sales

increase

FY22 Q4 FY22 Q4

FY23 Q4

FY23 Q4

OP Adj. OP

Adj. OP

OP

G/P increment by sales increase: TIS, Neuro led the driver C&V

Gross margin:

Mitigation of inflationary effects, and cost reduction effects

Price:

Global promotion of price revision

SG&A increase:

Increased sales force for expansion of therapeutic devices sales in US

FX:

+3.6B JPY flow impact; -2.6B JPY stock impact

©TERUMO CORPORATION

5 / 14

This is an analysis of the year-on-year change in for the three months of Q4.

First, the gross margin effect was due to the absence of onetime expenses in the current quarter that were recorded in the same quarter of the previous year, as well as the continued easing of inflation and the effects of cost-cutting measures that continued in Q3.

In pricing, the effect of the pricing policy review, which was expanded in the second half of the year, is being felt.

The increase in SG&A expenses is mainly due to the increase in employee headcount to expand sales of therapeutic devices such as neuro and stent grafts in North America.

Next slide, please.

5

OP Variance Analysis (Q4 YTD): As planned in all areas

(100M JPY)

Gross

Price

+100

margin

Reimbur-

SG&A

FX

G/P

sement

increase

R&D

price

increase

increment

+27

by

sales

increase

FY22

FY22

FY23

FY23

Q4 YTD

Q4 YTD

Q4 YTD Q4 YTD

OP

Adj. OP

Adj. OP

OP

G/P increment by sales increase: Drivers were C&V and TBCT

Gross margin:

One-time costs offset by inflation mitigation, cost reductions, and product mix improvements

Price:

Global promotion of price revision

SG&A increase:

Increased sales force for expansion of therapeutic devices sales in US

FX:

+10.2B JPY flow impact; -5.2B JPY stock impact

©TERUMO CORPORATION

6 / 14

This is an analysis of change in profit for the full year.

Gross profit growth due to higher sales exceeded our expectations as a result of strong performance in Cardiac & Vascular and Blood and Cell Technologies.

The gross profit margin effect was in line with the original plan due to the progress of profit improvement measures and the effect of product mix improvement, as well as cost reduction measures and easing inflation.

Turning to increased SG&A expenses, we have increased employee headcount to expand sales of therapeutic devices in North America, which has led to sales growth.

The breakdown of "foreign exchange effects" was +10.2 billion yen in flow, and -5.2 billion yen in stock.

Next slide, please.

6

Revenue by Region: Therapeutic devices strong in Americas, Europe: Asia drove high growth rate

C&V: Cardiac and Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies,

TIS: Interventional Systems, Neuro: Neurovascular, CV: Cardiovascular

Revenue (100M JPY)

FY23 Q4 YTD

Comments

FY23 Q4 YTD

YoY change

Q4 YTD

( ) FX Neutral

Regional

Q4

breakdown

FY21

2,204

592

14%

C&V's Neuro / Vascular, TBCT's blood center

Americas

FY22

2,866

742

business grew double digits even when

(8%)

FY23

3,280

898

excluding exchange rate effects

36%

Japan

2,061

511

All companies grew. Vascular performed

2,074

503

2%

favorably at C&V, PS at TMCS, and the blood

2,111

524

center business at TBCT

1,404

364

Double-digit growth in Neuro / Vascular in C&V,

23%

Europe

20%

even when excluding exchange rate effects;

1,600

414

sustained growth in the TBCT blood center

(8%)

1,915

525

business

594

147

10%

All companies grew. C&V was led by double-

21%

China

719

153

digit growth in TIS. TBCT's blood center

(8%)

business and TMCS also performed well, with

794

194

double-digit growth

9%

Asia and

770

184

19%

All companies continued to grow. Double-digit

12%

Others

943

209

(13%)

growth in TIS, CV, blood center business, and

1,118

249

apheresis therapy, even when excluding

7 / 14

exchange rate fluctuations

©TERUMO CORPORATION

This is revenue by region. Overseas sales drove growth, particularly in the Americas and Europe.

In the Americas, sales grew 8% excluding exchange rate effects due to strong sales of therapeutic devices such as neuro and vascular-related products and double-digit growth in the blood center business.

In Japan, despite negative factors such as a decrease in sales due to the divestiture of the nutrition business and a drop in demand for thermometers, sales were higher than in the previous year, driven by sales in the fields of Cardiac & Vascular and Blood and Cell Technologies.

In Europe, growth was +8% excluding exchange rate effects as a result of continued strong sales of therapeutic devices such as neuro and stent grafts.

7

In China, while there was some impact from restrained purchasing by distributors as access products were subject to VBP. TIS maintained double-digit growth even when excluding exchange rate effects. The new prices will not begin to apply until FY24.

Emerging economies such as Asia and the Middle East led the way in terms of growth. Growth continued in all companies, particularly in the Cardiac & Vascular's TIS and Cardiovascular businesses and in Blood and Cell Technologies' blood center business and apheresis therapy.

Next slide, please.

7

C&V: Continued global demand, driven by double-digit growth in Vascular and Neuro

(C&V: Cardiac and Vascular, TIS: Interventional Systems)

（100M JPY）

Q4 YTD

Q4

Comments

Q4 YTD

YoY

( ) FX Neutral

TIS:

Access and therapeutic demand expanded globally.

5,557

4,806

Volume-based procurement (VBP) in China caused

+451

3,971

distributors to hold off from buying; however

double-digit growth continued

Revenue

16%

Neuro-

Stroke device market share recovered in US and

(9%)

1,217 1,480

vascular:

Europe. China decreased due to return to normal

+122

1,027

after FY22 initial inventory buildup by new

22%

distributors; demand remains steady

Cardio-

Japan hardware demand returned to normal, but

+76

1,122 1,239

vascular:

US and Asia sales stayed strong

932

Adjusted

Vascular

US and Europe were drivers. Hybrid product and

+102

10%

Graft:

stent graft sales expansion continued

Operating

286

319

(7%)

209

Profit

12%

FY21

FY22

FY23

FY21

FY22

FY23

Profit:

Increased sales and profitability improvement.

SG&A increased due to sales force expansion for

Profit%

23%

23%

22%

20%

23%

22%

growth of therapeutic devices sales in US

©TERUMO CORPORATION

8 / 14

I will next review business performance by company. First is the Cardiac & Vascular Company.

Excluding exchange rate effects, revenue grew 9%, exceeding the full-year forecast.

Its Vascular and neuro businesses performed well globally, particularly in the Americas and Europe.

Although there have been supply issues with some access products as well as the Neuro businesses' stroke device, we are steadily recovering market share.

Vascular also continues to expand sales of hybrid products and stent grafts.

Profits increased due to higher revenues and progress with profit-improvement measures.

Next slide, please.

8

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Terumo Corporation published this content on 15 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 May 2024 11:16:35 UTC.