Terumo Corp

Good afternoon, everyone.

Thank you very much for joining us at FI25, the period ending March 31st, Earnings Calls for Terrible. Thank you very much for your time. Today, we will talk about the overview of the financial from CFO Hagimoto. and we will have a Q&A session after the presentation reapplied to finish it in about 45 minutes. In webinar, we have some English translation services available. You can listen in either Japanese or English, whichever you want. If you need to, you need to click the global button at the bottom and change your language. The shared slides are only in Japanese. English version is also available for documentation at our website. If we have problem in streaming, we will let you know with an email. And, Before our presentation today, I'd like to just have some information. There's a disclaimer. These are the forecasting projections of the future. In some of the comments will be projection. Comes with risks or uncertainties for the future projection. The actual result could be not exactly aligned with our forecast or projection. With that, I'd like to invite Hajimoto-san to do the presentation or financial announcements yes i am good day and haigimoto cfo thank you for joining our earning call today let me walk you through uh today with the agimoto uh me otaka who's responsible for uh you know uh uh is uh for the ir would be joining us from april We have an IR office, an FB&A, and also policies are set up by a financial team. We actually have these new teams being set up for the business management. Miyoshi is responsible for CNV, which is pushing forward with more technologies. Otaka-san and I will be responsible for communicating about those financial results. Thank you in advance for your support. With that, I'd like to make presentations on the financial results for FY25-21. This is the highlights of closure first quarter. We continue to benefit from people's business environment, achieving record high quarterly revenue of $260 billion for Q1. In particular, demand in the U.S. remains strong. Total revenue grew by 6%, excluding foreign exchange. In fact, we are progressing well against our full-year guidance, which we announced in May. Raising profits, adjusted raising profits for the year, all reached record high for a single quarter. In addition to increasing revenue, profits are also growing at a pace that exceeds revenue growth due to pricing measures and appropriate cost control being implemented globally, and we are steadily improving profitability toward our operating profit target for G26. Next slide, please. This is P&L and a free cash flow result. Revenue was driven by CMD and TBCT companies. Despite negative currency impacts, we achieved 260 billion yen in revenue, surpassing last year's Q1, which are temporary demand strikes. And for operating profit, too, grew significantly faster than revenue, reaching a record 55.9 billion yen. This was supported by improved gross margin from pricing strategies, effective cost management, as well as favorable currency and runtime gains. And free cash flow was 10.5 billion yen, a decrease of 4.2 billion yen year-on-year. This was mainly due to an increase in inventories as a result of business expansion and an impact on tariffs, but we will continue to maximize free cash flow through appropriate inventory management. Next slide, please. And this is about opening profit areas analysis, and GP incremental increment by sales increase was led by TIS and global blood solutions, progressing as planned against foliar targets. Growth margin and price is the next point. C&D pricing strategy contributed a lot to profit increase. Especially price increases in the US and delayed BPP in China exceeded our expectations. Profitability improvement measures also steadily delivered the result. S&D and expenses have increased as expected, along with business expansion. R&D expenses are flat. It was a flat year due to timing differences with no change to full-year forecast. Foreign exchange impact were negative on flow basis, but positive on stock basis, contributing to profit growth. Next slide, please. This is revenue by revenue, revenue by region. In America, double-digit growth in local currency with all companies contributing strongly, driving global sales. So, it was very driven the global sales very much. In Europe, strong performance of Plasix drove pharmaceutical segments growth. CBCT saw temporary revenue decline due to delayed order in some regions with recovery although expected going forward. in japan cmdb especially euro achieved double the growth driving the entire uh the performance cmcs i on the other hand expressed them probably revenue declined due to certain business transfer and supply chain in china euro saw significant growth thanks to the successful expansion of sales channel through bbp cis partially offset BPP-driven price decline with volume increases. Asia, CNV achieved revenue growth. Pharmaceuticals and global blood solutions saw temporary decline due to delay in some bidding timelines. Next slide, please.

I will now explain the results by the company. First is the cardiovascular company. Revenue grew 7% on a local currency basis, driven by strong performance in the US. TIS and Neuro led the growth. Aortic segment saw temporary decline due to supply issues with its surgical graft product line, but it is now resolved. On the other hand, hybrid products expanded steadily, improving profitability. Operating margin improved by 5 points to 29%. Various initiatives such as pricing strategies, profitability improvement measures, and the review of unprofitable regions have contributed. Forex was positive on the stock, resulting in higher-than-expected profit growth. Next slide, please. TMCS, medical care solutions, revenue declined temporarily due to business divestitures in the hospital care and supply issues for some products. Pricing strategies since April are progressing well. In pharmaceuticals, domestic CDMO deliveries were delayed, causing Q1 sales decline, while Plagex performed strongly overseas, resulting in revenue growth. Profits benefited from the pricing measures and foreign exchange rates with increase in the profits on an actual exchange rate basis. However, lower sales and production delays in pharmaceuticals were negative factors. Profit decreased on the local currency basis. Sales and profits were affected by one-time factors, but we expect to achieve the planned increase in the sales and profits for the full fiscal year. Next slide, please. TBCT bought in the cell technologies. Revenue grew significantly in the plasma innovation under the global blood solutions. Ricoh deployment to existing customers is complete, with further revenue growth expected as operations optimize. Core business is progressing as expected. Global therapy innovation saw increased demand for cell collection and cell and gene therapy, especially in the U.S., along with replacement demand for certain devices. The profit increased by improved profitability from higher sales in Africa. Next slide, please. Last slide. I will now give an outlook for this fiscal year. regarding tariff impacts. The estimated full-year impact is around ¥10 billion revised down from the previous estimate of ¥17 billion due to changes in tariff rates, mainly on imports from Japan. The impact included in Q1 is extremely limited thanks to local inventory, and most of the impact is expected to materialize in the second half of the fiscal year. On the other hand, our fundamentals remain solid, and even excluding forex effects, Q1 results exceeded the plan that forms the basis of our full-year forecast. Demand is expanding, especially in the US and China, and it is expected to continue. company-wide pricing measures are having a greater than expected effect and we plan to pass on the tariff impact into prices to mitigate that impact and of course the situations may not allow us to pass the entire amount during this fiscal year but we mitigate it the tariff impact as much as possible considering our strong fundamentals We maintain guidance for the current fiscal year and work to achieve it. Thank you very much for your attention.