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Operator: [Interpreted] Thank you for joining today's. We will be starting our financial announcement. So I'd like to first ask CFO, Hagimoto-san to talk. Then next, I'd like to hand it over to CEO to talk about the direction and the core businesses for TIS. So followed by that, we will move to the question and answer. And we will take 60 minutes for the combined presentation and the Q&A. We have simultaneous translation in Japanese and English. You can see both of them. [Operator Instructions] We'd like to ask you some asks before we start. We will be talking about the projection of the future businesses, all of which comes with uncertainties or risks. Please the actual results may be different from our projections that we'll be presenting today. With that, I'd like to ask Hagimoto to be talking about our financial results. Hagimoto, would you please go first?
Jin Hagimoto: Yes. I'm Hagimoto, the CFO. Let me walk you through the highlights of our financial results for the second quarter of the fiscal year ending March 2026. I'd like to talk about our second quarter. This is our highlights. We continue to benefit from favorable business environment. Our revenue for the first half reached a record high of JPY 534.9 billion. In particular, demand in North America remains strong, resulting in an 8% decrease in revenue on a local currency basis. Operating profit, adjusted operating profit and profit for the period, all reached record highs for the first half. In addition to increased revenue, profits are growing at a pace that exceeds revenue growth; driven by global pricing measure and appropriate cost control. In light of the current business, we have revised our full year guidance announcement in May. We have upwardly revised revenue and adjusted operating profit, reflecting the strong fundamentals and changes in foreign exchange assumptions due to yen depreciation. On the other hand, we have incorporated temporary costs related to the strategic initiatives such as acquisition-related expense and continuous portfolio reviews into our operating profit. I will explain the details later. Next slide. Moving on to our P&L performance. Revenue was driven by C&V and TBCT companies. Despite negative currencies impact, revenue for the first half reached a record JPY 534.9 billion. Operating profit and adjusted operating profit both grew faster than revenue, reaching record highs of JPY 1.0 billion and JPY 114.4 billion, respectively. From the second quarter, tariff impacts began to materialize, but profit growth was achieved mainly through pricing measures and appropriate cost management. Next slide, please. Since the year-on-year OP variance analysis for the second quarter reflect the same trend as the first half, we will provide further details on the next slide. OP variance analysis for the first half is this. Overall increased sales driven by a continued demand expansion contributed to profit growth. G/P improvement -- increment by sales increase led by overseas TIS, especially in North America and by plasma business and Global Blood Solutions gross margin price. Pricing measures in the C&V contributed significantly to profit growth, though positive effects were partially offset by tariff inflation and mix effects. SG&A increased by business expansion, remaining within expected levels. Research and development decreased slightly year-on-year, partially due to last year's impairment losses on capitalized R&D. Foreign exchange impact negative both on flow and stock basis compared to the previous year. Next slide, please. Let me now explain results by companies. Please note that revenue by region slide, which was previously shown earlier is now placed and comes after the revenue by company slides. First, the Cardiac and Vascular Company. Revenue grew by 8% on local currency basis with strong global performance centered in North America. TIS and Neuro grows, while Cardiovascular also achieved high single-digit growth in local currency, driving overall company performance. Although Aortic experienced supply issues with surgical vascular products during the first quarter, revenue rose due to recovery trends from the second quarter and strong progress in expanding sales of hybrid products. Operating profit improved by 2 percentage points to 27%. Pricing measures, profitability improvement measure and a review on how profitable regions have contributed. FX stock impact was negative, resulting in a slight decrease in margin compared to the first quarter, but fundamentals remain solid. Next slide, please. Next is our TMCS Medical Care Solutions Company. Revenue for the first half increased, driven by growth in Pharmaceuticals. This growth reflects the impact of delivery timing shift in certain areas of the domestic CDMO business being recovered in the second quarter, along with continued strong performance of projects overseas. Hospital Care saw a temporary revenue decline due to last year's business transfer and ongoing supply issues for some products. Pricing measures started in April are progressing very well. Profit growth was supported by recovery in Pharmaceuticals. Next slide, please. Continuing to TBCT, the Blood and Cell Technologies Company. Revenue grew significantly in Plasma Innovation and Global Blood Solutions. Rika deployment to existing customers were completed in the first quarter and operational optimization will continue. Core business is progressing as expected. In Global Therapy Innovations, revenue increased due to growing demand for cell collection in cell and gene therapy, especially in the U.S. along with replacement demand for certain devices. Profit increased, led by improved profitability from higher sales of Rika. Next slide, please. And this is our revenue by region. In the Americas, demand expansion continued with double-digit growth in local currency. All companies showed strong growth with TIS and Pharmaceuticals and Global Blood Solutions serving as key drivers of global revenue. In Europe, stable growth in TIS and Neuro, and strong performance of PLAJEX drove Pharmaceuticals segment growth. In Japan, Pharmaceuticals contributed to higher revenue, supported by the recognition of delivery timing adjustments in CDMO during the second quarter. Neuro sustained its double-digit growth trend in C&V. In China, Neuro maintained strong growth, supported by the successful expansion of sales channels under VBP, resulting in higher revenue. In Asia, C&V achieved revenue growth, while Hospital Care, Pharmaceuticals and Global Blood Solutions posted declines in the first half due to delay in tender timing. Next slide, please. Now regarding our guidance revision. To begin, we will explain the assumptions underlying the revision of our guidance focusing on two major points. First, regarding the fundamentals of our existing businesses. As we shared in the first half results earlier, the second quarter remained strong. Thanks to continued robust demand and the successful implementation of proactive pricing measures. We expect profit increase of JPY 10 billion compared to the figures announced in May. This effectively offset the anticipated JPY 10 billion negative impact from tariffs for the current fiscal year. In addition, we have reflected changes in foreign exchange assumptions due to the continued depreciation of the yen, resulting in an increase of -- expected increase of JPY 10 billion in AOP for existing businesses. Separately, we have factored in temporary costs related to the [indiscernible] further growth, including acquisition and continued portfolio optimization into this year's guidance. Next slide, please. Further details on division. Based on the assumptions earlier, we have revised our full year guidance announced in May by upwardly adjusting revenue and adjusted operating profit and downwardly adjusted operating profit. The guidance excluding the impact of the acquisitions announced this year is also presented at the slide. On this basis, both revenue and profit for the full year are revised upwards. And both revenue and the profit were adjusted. Here is the details why company, C&V and TBCT reflects strong performance with upwards revision of both revenue and profit. Of course, C&V continued robust demand in North America and pricing measure will remain key drivers in the second half. TBCT continues to be driven primarily by plasma innovation. However, due to higher-than-expected collection efficiency with Rika, turnover of disposable products in the second half is expected to fall slightly below plan. Accordingly, production adjustments are scheduled for the second half, while the efficiency improvement supports our solid foundation for long-term growth. Conversely, TMCS has been revised downward in profit mainly due to acquisition-related expenses. We have also included OrganOx performance from November onward with cumulative 5 month revenue projected at JPY 9 billion and adjusted operating profit at JPY 1.3 billion. Next slide, please. Let us now explain the revision of adjusted operating profit. Overall, we have revised the initial guidance from JPY 240.0 billion to JPY 221.5 billion. Strong fundamentals and effective cost control have offset the JPY 10 billion negative impact from tariffs. In addition, we have reflected the positive impact of favorable exchange rate compared to the initial guidance. We have also incorporated as well the investments, including the capital expenditure for the Leverkusen Plant as well as the contribution from OrganOx acquisition. Details of the adjustment items that account for the difference from the operating profit will be presented on the next slide. Adjustment items have increased by JPY 20 billion from the initial guidance of JPY 20 billion to JPY 40 billion, with two main components accounting for the increase. The first is acquisition-related expenses, including costs associated with the OrganOx acquisition and amortization of acquired intangible assets totaling approximately JPY 9 billion. The second is costs related to portfolio review, clearly all of the expenses arising from the revision of exclusive distribution agreement relative to TIS business also totaling about JPY 9 billion. We continue to conduct strategy business reviews to support further growth. The other costs were not included last year due to the ongoing discussions and initial requirements, but the efforts to portfolio optimization will remain our priority going forward. Next slide. Lastly, as we have consistently continued, we are on track to deliver the three financial goals outlined in GS26 revenue growth, operating profit percent and capital efficiency. Although acquisition-related and onetime expenses will be incurred this fiscal year, the operating profit percent for FY 25, excluding these costs based on our existing business is 18.6%. Our business fundamentals is solid, and this momentum will remain unchanged next year. We will continue to make proactive investments to drive future growth, ensuring the achievement of GS26 and further enhancement of core value. This concludes my remarks. Thank you very much for your attention.
Unknown Executive: [Interpreted] I'd now like to hand over to CEO, Mr. Samejima.
Hikaru Samejima: [Interpreted] Hello. I'm CEO, Samejima. And today, I would like to talk about the strength and future outlook of Terumo's core business, the TIS division, which continues to drive robust growth and lead the company this fiscal year. And in particular, I would like to focus on our imaging strategy. And finally, I'll provide an update on the acquisition of OrganOx. Despite the impact of PCI market maturity, the TIS division continues to deliver high single-digit growth. This growth is underpinned by the stable performance of Access products, which account for half of our revenue. And in the Therapeutics segment, products such as Therapeutic Lesion Access, namely PTCA guidewires and microcatheters are contributing to this momentum. And as you can see, Access and TLA, these fundamental device groups, make up more than 80% of our sales. And this is a key differentiator from our competitors, enables us to maintain a unique position and achieve sustainable growth. Here are the highlights of the TIS growth strategy on this slide. In the Access market, we will continue to strengthen the #1 position that we have built and maintain mid-single-digit growth. And as the second pillar, TLA products will achieve high single-digit growth by expanding market share in addition to overall market growth. And beyond these existing drivers, I would like to highlight Imaging as the third growth area. Imaging usage has been increasing in recent years in Europe and the U.S., and Terumo will deliver double-digit growth by introducing a unique new product, the Dual Sensor System. So first, let me reiterate the strengths of the TIS division that are common to both Access and TLA products. The first is our core technology, advanced manufacturing capabilities. Our hydrophilic coating, which enables smooth maneuverability inside blood vessels is one of the technologies that physicians have trusted for many years. In addition, the precise engineering of each component ensures ease of use and reliable device control, supporting seamless procedural flow. Interventional procedures are largely invisible to the naked eye, and the subtle tactile differences that only the physician can sense are the true source of TIS' unique strength. The second is consistent large-scale multiproduct manufacturing. Our scale advantage creates a barrier to entry that competitors cannot easily overcome, delivering price competitiveness. Furthermore, by producing high-quality products with uniformity and minimal variation, we provide physicians with the confidence that using Terumo products will deliver a familiar feel in daily clinical practice. Beyond simply supplying products, we have pioneered the radial approach and promoted its value. Through a comprehensive product lineup that enables same-day discharge and appropriate use training, we support safer and more efficient hospital operations. By delivering our unique technologies and operational expertise as part of our solution platform to clinical settings, we transform what are generally considered commodity products into high-value offerings. This is exactly the fundamental strength of the TIS business and the foundation of Terumo's leadership. The Access and TLA demands present significant potential for future growth. For Access products, the main intervention market is expected to continue growing at mid-single digit, and Terumo aims to solidify its presence through the further adoption of the radial approach. Moreover, Access devices are widely used beyond the main segment. The trust earned through high-quality devices developed for the intervention market has made Terumo a preferred brand. And as the number of cases in these domains increases, there are opportunities to use Access products, which will expand even further. In the TLA product group, which is essential for delivering stents and coils to the lesion site for treatment, Terumo has now established itself as category leader. By steadily increasing the market share of wires and microcatheters across various treatment areas, we have achieved a growth rate that exceeds overall market growth. These products, which are used routinely in large volumes, clearly showcase the strengths of the TIS business that I have been emphasizing. The growth potential of TLA products is my next point. The key lies in expanding the product lineup and broadening both business domains as well as geographic reach. Through continuous innovation, we respond to evolving treatment trends and develop products that meet clinical needs, supporting daily procedures and therapies. We also accelerate growth by quickly capturing market opportunities beyond existing areas. In recent years, catheters have been increasingly used in MSK embolization, which is a treatment for chronic pain such as joint pain. And this market is expanding very rapidly. The future market size is estimated to exceed $500 million, and Terumo has already secured a significant share with microcatheters, positioning us for continued growth. From a regional perspective, introducing products into Asia and Latin America offers even further opportunities to achieve growth. Now let's move on to the third growth driver, the Imaging segment. The global imaging market is expanding, driven mainly by the U.S. and China, and it is expected to reach USD 1.3 billion by 2031. This growth is supported by accumulated evidence that using imaging improves outcomes in interventional procedures. In the U.S., imaging guiding PCI has recently achieved the highest recommendation level, which is Class I, evidence Level A, and major medical societies this year. And furthermore, the increasing adoption of atherectomy and IVL devices has reinforced the need for imaging assessment of calcified lesions. The penetration rate of imaging in PCI in the U.S. is projected to rise to 56% by 2031, making imaging a high potential area that is now the tipping point for significant growth. Terumo has been competing to lead the Imaging segment for the long term. In Japan, imaging is used in more than 95% of PCI cases and Terumo holds an overwhelming market leadership with a share exceeding 50% in this home Japan market. Terumo's strength in Imaging lie in three key areas. The first is superior catheter deliverability. Secondly, clear high-resolution images. And thirdly, simple, speedy operability. As the global market expands, the fact that Terumo imaging is the top choice in Japan, the country which is most experienced with imaging, represents an immense value. Currently, two modalities are available for imaging: IVUS, which uses ultrasound; and OCT/OFDI, which uses near infrared light. IVUS excels at assessing the overall condition of the vessel and is suitable for cases with large vessel diameters, but it is less effective for examining microstructures. But on the other hand, OCT or OFDI offers high-resolution imaging, making it ideal for evaluating stents and microstructures, and is particularly effective for calcified and bifurcation lesions. However, it has limitations in visualizing the entire vessel and requires a blood flush using contrast agents. In clinical practice due to cost constraints, in most cases, only one modality can be used, leaving physicians unable to view both images even when they want to. To address this challenge, Terumo has developed the Dual Sensor Systems or DSS. This innovative system features a catheter equipped with both IVUS and OFDI sensors, enabling simultaneous acquisition and output of two images. By leveraging the strengths of both IVUS and OFDI, DSS allows for a more accurate depiction of intravascular conditions. Its value lies in supporting the realization of the optimal treatment strategy for any case. This is DSS' highest value. And with DSS, the step of deciding which modality to use disappears. Physicians can compare both images side by side to make the best treatment decisions possible. And at a time when Imaging market is poised for significant expansion, Terumo takes on the challenge with DSS. With the launch of DSS in Japan and the U.S., Imaging sales are expected to grow to more than 3x their current size by 2031. In Japan, we will leverage our established market position and begin introducing DSS at facilities with high appetite for this technology. By pricing DSS above the current standard of IVUS to reflect its added value, we can drive growth. At the same time, we aim to quickly accumulate clinical data in the U.S. to establish meaningful evidence of DSS' clinical significance. In the U.S., meanwhile, as a new market entrant, we will take a phased approach to market introduction. By combining Terumo's proven imaging strength track record with the unique value of dual technology, we will steadily build a loyal customer base. Additionally, we are preparing to integrate AI technology to enhance software capabilities and tailor solutions to meet the precise needs of users in the U.S. Beyond Japan and the U.S., demand for imaging is expected to rise globally and Terumo Imaging holds significant potential for rapid growth through further geographic expansion. The TIS business has long been a core driver of Terumo's growth, and that role will remain unchanged. We see further growth opportunities in Access and TLA, where we already have established strong positions. On top of this solid foundation, the launch of DSS will bring a new level of evolution to the business. Of course, we are also looking ahead to expanding into therapeutic product areas, including strengthening our pipeline through M&A. And by adding DSS to our portfolio, we will create synergies with therapeutic products and further enhance Terumo's presence in endovascular treatment. Finally, an update on the acquisition of OrganOx, which was announced in August this year. And as stated in our recent press release, we successfully completed the acquisition of OrganOx on October 29. First of all, regarding our recent performance for calendar year 2025, revenue is expected to reach up to $120 million, which represents approximately 70% growth over last year. This reflects continued strong demand driving high growth. So the market expansion, specifically the increase in liver transplant procedures enabled by the adoption of NMP technology, combined with metra's rising market share quarter-after-quarter, underscores the strong momentum. And these results validate the high expectations for organ perfusion technology in metra's proprietary innovations. Since NMP was approved in 2021, the use of cardiac death donors has rapidly increased, driving a rise in liver transplant procedures, a trend that will continue this year. NMP also enables planned transplant surgery, significantly improving quality of life for medical terms. Looking ahead, transplant numbers will keep growing. And as NMP becomes the standard method for liver preservation, it means more precious organs can reach patients on waiting lists. The growth potential for metra is enormous, as discussed previously, and OrganOx is to reach a scale of around JPY 100 billion in revenue over the next 10 years. Moreover, as transplant volumes increase, more potential patients will be added to waiting lists. This represents a major step toward turning hope into reality for all of those suffering from liver disease. In the NMP market, metra also holds a strong competitive advantage. As mentioned in our previous briefing, real-time monitoring enables quantitative assessment of organ function, improving utilization rates of donated livers. Additionally, the ability to preserve organs with a simple operation is a major differentiator, and its automated control function reduces the burden on clinical staff. This automation also allows flexible transport options, enabling customized services tailored to each case. By selecting the optimal service for each case, preservation and transport can be achieved with minimal resources, delivering significant cost benefits. Even when offering a full package service that includes transport, OrganOx maintains its price competitiveness, which has steadily driven market share growth. So finally, let's look at -- let's talk about synergies. metra supports the preservation of liver function by perfusing the organ with an oxygenated, temperature-controlled perfusate containing blood delivered through a centrifugal pump with precise flow control. Terumo has long supplied all these key components, the centrifugal pump, oxygenator, heat exchanger and reservoir under the CAPIOX brand. And in addition, anticoagulants and other drugs are administered via syringe pumps, which are also one of Terumo's strengths within its TMCS infusion management business. When you break down metra's structure, it becomes clear that it is built on perfusion technology that Terumo has cultivated for many years. By combining the technologies of both companies, we can unlock the potential for next-generation perfusion solutions that are even more innovative and competitive while also improving profitability through cost synergies from component integration. OrganOx is highly innovative and poised for growth. But by leveraging Terumo's platform, its growth and next-generation device development opportunities will expand dramatically. Terumo is adding a new frontier in perfusion to its portfolio and is thoroughly committed to becoming a global top-tier company. Thank you for your attention.
Operator: [Interpreted] [Operator Instructions] Together with Hagimoto-san, I must tell you Otaka-san from Corporate strategy to be answering question. I'd like to first direct Kohtani-san from Mizuho to ask first question.
Motoya Kohtani: [Interpreted] Yes. This is Kohtani speaking from Mizuho Securities. So let me just ask few questions since this opportunity in a vision. First question about DSS. I think it's about JPY 10 billion, mostly in Japan, but it's going to go up to JPY 30 billion. And I was quite surprised because this was much bigger than what I was expected. As you said, there was a good reason for that ASC, LTM guideline has been revised in 2025, Class A in 2025. In Europe, the class adjustment change was held back in 2024. The IVUS and the OCT is slightly higher, but both of them are going to be guided to be used in both. But my question is for IVUS and OCT, you can just do it because it's already been approved. It's already been -- reimbursement is already taken care of in the U.S. But this is one single catheter. So new code or maybe new code or national coverage determination, maybe not to that extent. But you, I guess, take new Medicare code. How am I assuming how this is going to progress? Or IVUS/OTC, I don't think none of the competitors have that product. I just want to clarify if that's -- so that's my first question.
Hikaru Samejima: [Interpreted] That's right. That as you pointed out, existing IVUS or ODI, OTC, the price point is higher than that. That will be our pricing strategy, premium price. But with that, you'll be launching both in Japan and the U.S. in the near future. And one sensor with the two devices, there's nothing like that. I mean who has the manufacturing capability to produce that, it's very rare to find a company who has that capability. It goes back to a high quality, the manufacturing process. This is going to be big barrier entry to that. So I think going back to Slide 10, I want to clarify. You will do the OTC by making sure that you are going to clarify all of it which is written here.
Motoya Kohtani: [Interpreted] My second question about the OrganOx. So 120, I was quite surprised by number. NMP today is becoming widely adopted. I guess that number is quite high driving big contribution to this target. But my question, for the next several years, NMP will keep becoming bigger. But after that several years, the growth will become saturated. What are the things that you are doing to prepare for that time in liver cancers, for example? Implant standards have changed in Japan, doesn't change much in the U.S. How are you going to address that? Downstage of a cancer is another one. Microcatheter of your product has a perfect match. Are you going to be running trial to that? So let me just ask a question about the growth after plateauing in several years potentially. And in September, OPP licensed in Florida state where OPP investigation will start there. There is an article written about that. Is there any impact from that or expected impact coming from that?
Hikaru Samejima: [Interpreted] Well, that's right for liver implant. NMP will be driving, especially for the donor whose heart stopped working. That will be the growth driver for the next several years like you have implied, and that's exactly right. So after that, I talked about it last time, then we are going to plan to get into the other organs and also somebody who cannot be registered for the implant, but somebody who is having damaged liver. Because by doing so, somebody with the patients that can be addressed with the pipeline to help somebody with the proper fragmented livers. And the supply was a bottleneck in the past. So the registration as a recipient requires very high demand. So even as your liver is damaged quite heavily, you couldn't go -- become registered as a recipient. Those number of population will go up. So that will also drive the market growth. By combining these three, we are quite confident OrganOx is expected to grow in the long run to come.
Motoya Kohtani: [Interpreted] And HIS investigation, Florida state any impact? Should we expect an impact coming next year?
Hikaru Samejima: [Interpreted] Well, there was some impact more in the short term, but liver implant will be saving patient life. That value is absolutely strong. That hasn't changed. So this impact only range to be short term. Mid to long term, organ implant is actually a very strong growth driver in a long run.
Operator: [Interpreted] Mr. Yamaguchi from Citigroup Securities.
Hidemaru Yamaguchi: [Interpreted] Hello, this is Yamaguchi. Can you hear me?
Hikaru Samejima: [Interpreted] Yes, we can hear you.
Hidemaru Yamaguchi: [Interpreted] Well, in your explanation, you were looking at Imaging, the MSK. I think that was one thing you mentioned, MSK. And I'd just like to ask you for your current initiatives around that. And you put some mention about what are your expectations in this for going to market.
Hikaru Samejima: [Interpreted] I will respond to your question. Yes. Well, when -- currently, we are -- whether we are proactively approaching this at the moment, we're not so aggressive. But on the other hand, the Access or TLAs, the high quality that we have, we are -- and today, I mean, MSK was given today as one example today, but there are guidewire and microcatheters are used in many other domains, and the perception of that is getting wider and wider. So I think rather than us aggressively going to market here as with our catheter intervention, it's different to that. It's a departure from that, but it's starting to take off. And our fundamental Access and our TLA, which will continue to grow in the mid- to double-digit growth, I think, will be one factor in that.
Hidemaru Yamaguchi: [Interpreted] Well, one thing within the financial results, you mentioned that the revision of TIS. I think from last year, that's been in motion since last year. So overall, I mean, it came up several times throughout the presentation. But -- so have you gone over the mountain already for TIS or what is in terms of the financial results? Could you just give -- I felt that it featured quite prominently in the results.
Kojiro Otaka: [Interpreted] Thank you. I will just -- these were a one-off expense that I -- so I will respond to your question. Whether -- I think Hagimoto will address the future prospects of that from now on. So let me just explain, first of all, the slide that I'm showing you here. As you can see on this slide, for TIS, the portfolio change in the middle was Orchestra Bio. We have also put a press release about this, but we have this exclusive distribution agreement with them. And we decided to review the exclusive distribution agreement with them. And so there had been some, and it is the same for the -- while maintaining the relationship with them and maintaining the preferential position. It's a JPY 30 million fund in terms of -- and in terms of the market cap, that's been taken into account as well. But we have put that in for our guidance for the end of the full period.
Jin Hagimoto: So let me give you a bigger picture view of this. On this occasion, regarding operating income, we gave some guidance regarding operating income, and we made some adjustments to that based on the information we currently have. And there may be some structural reforms going ahead and several other -- some lawsuits that are in process. So it's hard to give an absolutely setting stone guidance in terms of amounts. But the portfolio review that we are aggressively promoting at the moment, that will continue. But for the current fiscal year, these are accurate guidance as provided in these results. So I would hope that you would take those as face value.
Operator: [Interpreted] I'd like to ask Nomura Securities, please.
Takahiro Mori: [Interpreted] This is Mori speaking from Nomura Securities. I hope you can hear me.
Operator: [Interpreted] Yes. We hear you.
Takahiro Mori: [Interpreted] About JPY 5 billion for Leverkusen. Is this a onetime? Or should we expect that to come again? What's happening in Leverkusen? What kind of cost we should be expecting from that?
Kojiro Otaka: [Interpreted] I will take this question. So Leverkusen, JPY 5 billion in the second half, that we are expecting that to be posted in the second half. And our projection for now, this is a JPY 3 billion growth. So that transaction was JPY 10 billion assets. The JPY 70 billion -- the depreciation of those assets is JPY 1 billion. And we have a lot of great talent in the company. We have retainment talent costs, JPY 800 million. And maintenance of equipment, some of the costs are PMI-related in all EUR 3 billion, JPY 5 billion to be posted on second half. The impact of the cost after that PMI cost is up partially, so it's not going to be doubling as not simply as that. But we are going to be expecting some depreciation talent costs in the next financial year as well.
Takahiro Mori: [Interpreted] My second question is about OrganOx driving -- expected to drive the high growth, but the supply do not make sense in terms of the presentation. But centers, how many capacity, how many headcounts in terms of doctors? How those centers can we recruit more people? So how is the demand side? How long it will take to keep that full capacity that you're expecting?
Hikaru Samejima: [Interpreted] Well, to that question, so the medical practitioners capacity is your question, how much do we do. We don't have a quantified assessments, we haven't done that yet. But what we can do is after adoption of NMP, everything before that, was very emerging practices like the -- registered, you have to do the implement -- within several years, the daytime, they are busy with the other, and the hospital needs to call up the doctors in the middle of the night. But now they can do it for 24 hours. They can do the plans. So it will be given more leeway for medical practitioners. So right now, we believe that lack of resource is not going to be a problem. But we will check the data, and we will get back to you after checking some of the clarifications and get back to your question.
Takahiro Mori: [Interpreted] Well, it's been already several years since NMP started. So I thought maybe the initial impact is going to be go down. That was my concern that this is going to be reduced quickly.
Operator: [Interpreted] UBS Securities, Yoshihara-san, please for the next question.
Tomoko Yoshihara: [Interpreted] This is Yoshihara here from UBS Securities. Thank you very much for today. So for OrganOx, I would like to ask about the amortization. I think it was on Page 16 of the presentation, and it says provisional at the moment. But if I -- the amount of this is core intangible asset amortization, I would understand. So this is provisional in brackets for the amortization of intangible assets. So I just wanted confirmation on where possible of what is meant by provisional there. And hypothetically, it seems that there's such a large difference in between the revenues for the OrganOx, there was a minus including this disposal of intangible assets. So I just want to know if my presumption is correct regarding the organOx.
Kojiro Otaka: [Interpreted] Thank you very much. I will respond to your question. So for the OrganOx costs here, there are two types here. One is the PMI-related costs which are JPY 4 billion -- sorry, JPY 1 billion in the first half, which is a temporary. And for the depreciation and the amortization of intangible assets, this will come in the -- it says provisional a tentative in brackets. In the first half, we think it would be JPY 4 million -- in the second half, sorry. And this is -- for next year, these will fully come online. And well, the goodwill and the intangible assets and so on. The impact of these, I think, will be limited. And so the outlook for the second half. Once these are fully established and set in stone, I will then make another announcement once these are no longer provisional, but set in stone.
Tomoko Yoshihara: [Interpreted] So for OrganOx margins from now into next year, will they not differ so much for the core business? What will those look like?
Kojiro Otaka: [Interpreted] Well, regarding the business for OrganOx, we intend to expand it in future going forward. So in line with our business expansion, I think incomes, revenues will definitely expand in line with that.
Tomoko Yoshihara: [Interpreted] Understood. My second question is regarding Rika. I think in Hagimoto-san's presentation at the beginning, I might not have understood this correctly, but it's disposables where the demand was lower than expected. Is that correct? And so I wondered if the production amount was slightly down. Is that correct? So as a result of that, from the second half onwards, the Rika business, as you start to monetize that more, I believe that there may be some time lag due to that lack in demand for disposables. And from the next period, in coming period, will that have any impact on your profit in the next -- in the upcoming quarters. Could you let me know regarding that?
Kojiro Otaka: [Interpreted] Thank you very much for your question. Well, for the TBCT domain profit, I think the operating profit ratio is improving. So the monetization of Rika is definitely on the up as per the figures provided. And looking ahead now, I think -- well, it's slightly ironic, but the Rika is -- the plasma demand is definitely increasing. But our disposable sets compared to expectations, the demand is going slightly down, ironically, when the demand for plasma is going up. So I think in the second half, the production adjustments would be made under our current plan. So in the second half, yes, to an extent, the income, the revenue from disposables may be slightly lower than 50%. There is certainly that possibility.
Tomoko Yoshihara: [Interpreted] So just to confirm that, is that for the production?
Kojiro Otaka: [Interpreted] So plasma demand itself will grow from now on, definitely. So we will implement production adjustments. And from next year, we expect it to improve to its current levels after the production adjustments.
Operator: [Interpreted] I'd like to ask Tony Ren from Macquarie to ask a question. Tony?
Tony Ren: [Interpreted] Tony Ren from Macquarie. Just a couple of quick ones from me. So first of all, actually, both of them are related to TMCS business. So the first one is about the German Leverkusen losses. How long do you think it will take for you to stop the losses at that factory to turn it around?
Jin Hagimoto: [Interpreted] So thank you for the question. So in terms of the running costs, as Otaka has mentioned, we are looking at somewhat of a $30 million on a semiannual basis. This cost, we do not project will be going down anytime soon. So the overall profitability when that will be coming will depend on how soon, how fast we can get the contract from the pharmaceutical companies. So currently, many of the major pharmaceutical companies, we are in discussions. And based on the input from all the teams of pharmaceutical and our organization, they are mentioning that there is a strong interest from the major pharmaceutical companies to be able to utilize the location within the European region. So at this point in time, our outlook for the profitability contribution is not within the GS26 period. We do foresee that within the next midterm projections, it is going to become improvement of the contract situation. We will be able to utilize the manufacturing plants. Therefore, contribution profit basis should be in the midterm of the next midterm strategy period.
Tony Ren: [Interpreted] Receiving our regulatory clearance typically takes about 2 years or so, right? You probably also need to do some fixing up at the factory. So we are probably looking at, at least, 3 years from now?
Jin Hagimoto: [Interpreted] Yes. So the overall facility itself is, of course, we have done our due diligence and have determined that it is a high-quality manufacturing facility already. So there are some investments that we will need to make to bring it up to sort of a thermo standard level of the quality, but we do not see any kind of issues in getting the regulatory approval. So as you mentioned, there are going to be some lead time required to get the regulatory approvals. But whether we can get the approvals, we feel very strongly that there is no obstacle in getting the approvals for that location.
Tony Ren: [Interpreted] Very good. My second question is about the -- also in your CDMO business, your LEQEMBI autoinjector. The CDMO revenue related to the LEQEMBI autoinjector. Do you book it in Japan? Or do you book it in other geographic regions?
Kojiro Otaka: [Interpreted] So based on our contract with Eisai, we do have the shipment in the Japan area. So we will consider the revenue within the Japan region.
Operator: [Interpreted] So I think JPMorgan Securities, Saito-san please.
Naoko Saito: [Interpreted] Hello. This is JPMorgan Securities, Saito. Well, in the second quarter, looking at the effect of the tariffs. And I think could you just delve a bit more into the 3 months in the second quarter?
Kojiro Otaka: [Interpreted] So I will respond to your question regarding that. So the effects of the tariffs in the 3 months in the second quarter, I think it would have been JPY 2.5 billion in impact, but the prices were -- we had strong price effects as with the first quarter. And we made JPY 4 billion in profit, which was way beyond the impact of the customs. And in terms of inflation, there were some effects from inflation and tariffs impact, but we rebounded from that and have surpassed the negative effects of the tariffs and the inflation.
Naoko Saito: [Interpreted] Thank you. Well, from the next period, next year onwards, some price rising effects will come into play. Is that correct?
Kojiro Otaka: [Interpreted] Well, I think it tends to our pricing strategy in terms of the customs and so on. When we do recontracting, we will aim to have some price rising. And from next year onwards, we hope that those -- at the time of contracting, price rises will continue to come into effect.
Naoko Saito: [Interpreted] I understood well. So just a very precise point. But for SG&A, I'd just like to ask for sales, general and administrative expenses, I believe that you shifted offices to a new office this year, your headquarter is changed. And next year onwards, will that play out this year, or will that continue to have an impact into next year?
Kojiro Otaka: [Interpreted] Well, for SG&A, I think it has been managed within the trend of net sales or net revenues. And so there is very, very small diminutive impact. But it will, however, be well controlled within the scope of revenues.
Naoko Saito: [Interpreted] So my second question is regarding the Plasma Innovation business. I think the second quarter, Rika devices were at full pace. And the net sales from facilities, the volume of disposables reached a peak in the second quarter, I understand. Could you just -- I think in the lower half, I believe the production is going to go down, but have we already reached the peak of full production in the second quarter for Plasma Innovation devices?
Kojiro Otaka: [Interpreted] Yes. Well, yes, we are already in the full peak of that. So we have a full tilt in the second quarter. You are correct in your assumption.
Operator: [Interpreted] Thank you very much. We are getting close to time to finish. I'd like to make sure if there are anybody else physically here in this room or somebody will see any other questions. Well, it seems like there was no more questions today. We'd like to finish Q&A session here. So with that, we'd like to close our Terumo Inc., March 2026 in the third quarter financial presentation. We'll be closing the session. Thank you very much for your time today. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]