Terumo ((JP:4543)) has held its Q2 earnings call. Read on for the main highlights of the call.
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During Terumo’s latest earnings call, the company expressed a generally positive sentiment, highlighting strong revenue and profit growth, alongside successful product launches and strategic acquisitions. However, the call also acknowledged challenges such as tariff impacts, temporary costs, and lower than expected demand in certain areas, which balanced the overall outlook.
Record High Revenue for First Half
Terumo reported a record high revenue of JPY 534.9 billion for the first half, driven by robust demand in North America. Despite this achievement, there was an 8% decrease in revenue on a local currency basis, indicating some underlying challenges in other regions.
Profit Growth Exceeds Revenue Growth
The company achieved record highs in operating profit, adjusted operating profit, and profit for the period. This profit growth outpaced revenue growth, thanks to global pricing measures and effective cost control strategies.
Upward Revision of Full Year Guidance
Terumo revised its full-year guidance upward for both revenue and adjusted operating profit. This revision reflects strong business fundamentals and favorable foreign exchange impacts due to yen depreciation.
Successful Launch of Dual Sensor System (DSS)
The introduction of the Dual Sensor System, featuring both IVUS and OFDI sensors, marks a significant innovation for Terumo. This system is expected to drive substantial growth in the imaging market.
High Growth Potential for OrganOx Acquisition
The acquisition of OrganOx is anticipated to significantly boost Terumo’s revenue, with expectations of reaching $120 million by 2025, representing a 70% growth over the previous year. The company aims for a revenue scale of JPY 100 billion over the next decade.
Negative Impact from Tariffs
Tariff impacts have started to affect Terumo, resulting in a JPY 10 billion negative impact for the current fiscal year. This presents a notable challenge for the company moving forward.
Temporary Costs from Strategic Initiatives
Terumo has incorporated temporary costs related to acquisition expenses and continuous portfolio reviews into its operating profit, reflecting ongoing strategic initiatives.
Challenges with TMCS Medical Care Solutions
The TMCS division faced challenges, with profits revised downward primarily due to acquisition-related expenses.
Rika Disposable Demand Below Expectations
Despite increased demand for plasma, the demand for disposable sets was lower than expected, leading to necessary production adjustments.
Forward-Looking Guidance
Terumo’s forward-looking guidance remains optimistic, with record-high revenue and profit figures for the second quarter of the fiscal year ending March 2026. The company anticipates continued growth driven by strong demand in North America, strategic product launches, and successful acquisitions, despite some offsetting temporary costs.
In summary, Terumo’s earnings call painted a picture of robust growth and strategic advancement, tempered by certain challenges such as tariffs and lower demand in specific areas. The company’s upward revision of full-year guidance and strategic initiatives underscore its commitment to maintaining its growth trajectory.