Terumo Corporation

Terumo reported Q3 year-to-date revenue of JPY 831.6 billion, operating profit of JPY 144.9 billion, and adjusted operating profit of JPY 173.5 billion, all record highs for the period. On a standalone Q3 basis, operating profit margin declined, mainly because of one-time expenses recognized in the second half. Management said North America sales grew 9% excluding FX, tariffs created a negative JPY 4.2 billion gross margin impact in Q3, and pricing measures contributed JPY 3.5 billion, partially offsetting that pressure. The Leverkusen plant contributed a loss of JPY 1.6 billion in Q3, while OrganOx contributed profit of JPY 0.5 billion; OrganOx also generated Q3 revenue of JPY 2.9 billion and adjusted operating profit of JPY 0.5 billion. For FY26, management said it plans about JPY 1 billion of one-time overseas restructuring costs in Q4 and expects annualized cost savings of approximately JPY 3 billion from the next fiscal year. It also said the OrganOx amortization/depreciation framework is below prior expectations, with JPY 4 billion this fiscal year and JPY 7 billion next year as discussed in Q&A.

The lead executive’s tone was confident but pragmatic, emphasizing that the core business is steadily moving toward GS26 even while the company absorbs acquisition-related and restructuring costs. Management stressed that pricing is being pushed through in line with inflation and tariffs, and that the company wants to accelerate value-based pricing where possible. He also repeatedly framed the current period as a deliberate investment phase and said management needs to communicate its strategy more clearly to the market.

CFO Hagimoto highlighted that revenue, operating profit, and adjusted operating profit all reached record levels on a Q3 year-to-date basis, with North America up 9% excluding FX. He quantified the tariff hit at negative JPY 4.2 billion in Q3 gross margin, partially offset by JPY 3.5 billion of pricing benefit, and said the negative FX and one-time costs weighed on Q3 margins. He also noted Leverkusen’s JPY 1.6 billion loss, OrganOx’s JPY 0.5 billion profit, and said overseas restructuring should create about JPY 3 billion of annualized savings starting next fiscal year.

Analysts focused on tariff recovery, the size and timing of one-time costs, the Leverkusen plant ramp, Rika demand and production adjustments, and OrganOx’s growth trajectory. Management said pricing programs will continue into FY26, overseas restructuring will include about JPY 1 billion of one-time costs in Q4, and Leverkusen is still in the customer-discussion and production-line preparation phase. On Rika, management pushed back on the idea of a deployment delay, saying usage has been efficient and the impact of production adjustments has been smaller than expected; on OrganOx, management said growth remains on track but Q3 was slightly softer because of a shortage of available donors, with Q4 expected to return to the anticipated trajectory.