Terumo : Financial Results for the Fiscal Year Ended March 31, 2024

Financial Results for the Fiscal Year Ended March 31, 2024 (FY2023)

May 14, 2024

Jin Hagimoto

Chief Financial Officer Terumo Corporation

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

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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

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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%)
SG&A Expenses	2,383	2,759	16%	10%
（%）	(29.1%)	(29.9%)
R&D Expenses	616	691	12%	8%
（%）	(7.5%)	(7.5%)
Other Income and Expenses	-2	59	-	-
Operating Profit	1,173	1,401	19%	14%
（%）	(14.3%)	(15.2%)
Adjusted Operating Profit	1,380	1,568	14%	8%
（%）	(16.8%)	(17.0%)
Profit before Tax	1,161	1,408	21%
（%）	(14.2%)	(15.3%)
Profit for the Year	893	1,064	19%
（%）	(10.9%)	(11.5%)

Average exchange rate (USD/EUR) 135JPY/141JPY 145JPY/157JPY

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

©TERUMO CORPORATION

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OPVariance Analysis (Q4):Profitabilityimprovements 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

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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

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

FY23 Q4 YTD
Regional
breakdown
	Americas
36%	Japan
23%	Europe
21%	China
9%	Asia and
12%	Others

															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
		YoY change
	Q4 YTD													( ) FX Neutral
										Q4
FY21	2,204		592				14%	C&V's Neuro / Vascular, TBCT's blood center
FY22	2,866		742			business grew double digits even when
			(8%)
	3,280															excluding exchange rate effects
FY23												898
										All companies grew. Vascular performed
	2,061		511
	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,
						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-
	719		153							digit growth in TIS. TBCT's blood center
								(8%)	business and TMCS also performed well, with
	794				194
											double-digit growth
	770		184
								19%	All companies continued to grow. Double-digit
	943		209
							(13%)	growth in TIS, CV, blood center business, and
	1,118						249
												apheresis therapy, even when excluding

exchange rate fluctuations

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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

+122

(9%)

1,480

vascular:

Europe. China decreased due to return to normal

1,027 1,217

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%

Profit:

Increased sales and profitability improvement.

FY21

FY22

FY23

FY21

FY22

FY23

SG&A increased due to sales force expansion for

Profit%

23%

23%

22%

20%

23%

22%

growth of therapeutic devices sales in US

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TMCS: Increased revenue and profit despite impact of Nutrition business divestiture, return to normal of thermometers

(TMCS: Medical Care Solutions)

（100M JPY）

Q4 YTD

Q4

Comments

Q4 YTD

YoY

( ) FX Neutral

HCS

In Japan, the company is rebounding from

1,853 1,917 1,976

Hospital Care

the decline in sales resulting from the

+48

Solutions:

divestiture of its nutrition business by revising

its pricing policy and strong performance in

Revenue

infusion sets. Overseas sales were solid,

3%

driven by Asia and Latin America

(1%)

503

LCS

Thermometer demand returned to normal.

466

462

-18

Life Care

Japan blood glucose self-measurement

9%

Solutions:

product sales down due to stiffer competition

236

198

PS

The CDMO business performed well in

+29

Adjusted

148

Pharmaceutical

Japan

Solutions:

Operating

33%

Profit

43

38

(31%)

22

69%

Profit:

Substantial increase due to ease of inflation

FY21

FY22

FY23

FY21

FY22

FY23

impact and price policy revision effects

Profit%

13%

8%

10%

9%

5%

8%

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©TERUMO CORPORATION

TBCT: Strong blood center business drove large profit increase

(TBCT: Blood and Cell Technologies)

（100M JPY）

Q4 YTD

Q4

Comments

Q4 YTD

YoY

( ) FX Neutral

Blood Center

Whole blood collection-related products

1,683

+183

1,476

Solutions:

performed well in Asia and Americas

Revenue

1,206

14%

Therapeutic

Cell collection demand expanded in US.

+44

Solutions:

Therapeutic apheresis for

(8%)

342

405

hospitals

strong in Asia

304

Cell Therapy

Minus YoY due to sale of a

18%

-21

Technologies:

business.

Cell therapy investment

208

expansion led to

164

steady trend in cell processing system

Adjusted

112

sales

47%

37

Operating

25

Profit:

(52%)

-18

Profit

Significant increase in profit due to higher

FY21

FY22

FY23

FY21

FY22

FY23

sales revenue. The positive effects of the

pricing policy and the transfer of production

to Costa Rica also contributed. Q4 recorded

Profit%

17%

8%

10%

12%

-5%

6%

a one-time expense for impairment of

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intangible assets

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