Terumo Corporation: history, ownership, mission, how it works & makes money

A Brief History of Terumo Corporation

Founded in 1921 in Tokyo, Japan, Terumo Corporation began its journey as a manufacturer of medical devices. Initially, the company focused on producing glass syringes but expanded significantly over the decades.

By the 1950s, Terumo capitalized on the growing demand for medical technology in Japan, introducing its first disposable syringes. This innovation laid the groundwork for its future successes.

The company went public in 1948 and was listed on the Tokyo Stock Exchange. Terumo’s strategic decisions and expansions have consistently contributed to its impressive financial growth. In 2022, Terumo reported revenues of approximately ¥ 1,042 billion (around $9.4 billion), showcasing its strong market position.

Terumo's international expansion began in the 1960s, with its first overseas subsidiary established in the United States in 1972. As of 2023, Terumo operates in over 150 countries and has more than 30 subsidiaries worldwide.

In 2014, Terumo acquired the American company Carpenter Medical, enhancing its portfolio in the field of blood management systems. This acquisition was part of Terumo's strategy to broaden its market reach and product offerings.

The company made significant investments in research and development, allocating approximately 6% of its annual revenue to R&D in recent years. This commitment has led to numerous innovations, particularly in the area of vascular interventions and diabetes management.

In terms of its stock performance, Terumo's shares have shown resilience, with a 5-year CAGR of approximately 7.3% from 2018 to 2023. The stock is traded under the ticker symbol 4543 on the Tokyo Stock Exchange.

Terumo continues to focus on sustainability and corporate social responsibility, aligning with global health initiatives and aiming to improve patient outcomes worldwide. The company has set ambitious targets for reducing its environmental footprint and enhancing product safety, contributing positively to its reputation in the healthcare sector.

A Who Owns Terumo Corporation

Terumo Corporation, a prominent global medical technology company based in Tokyo, Japan, specializes in products related to blood management, cardiovascular care, and diabetes care. As of the latest data in 2023, the ownership structure of Terumo Corporation is diversified among various institutional and individual investors, as well as company insiders.

The largest shareholders include major institutional investors such as:

In terms of shareholding, Terumo Corporation's market capitalization stands at approximately ¥1.98 trillion (around $15 billion), reflecting its stable position within the healthcare sector. The company reported revenues of ¥500.4 billion (approximately $3.7 billion) for the fiscal year ending March 2023, showcasing a year-over-year growth of 8.4%.

Additionally, Terumo's stock performance over the past year has demonstrated resilience in the market, with a price increase of 15.2%, leading to a current share price of approximately ¥3,800.

The company continues to focus on expanding its global footprint, increasing its R&D budget to ¥100 billion over the next five years to innovate and develop new medical technologies.

Terumo Corporation Mission Statement

Terumo Corporation, a global leader in medical technology, articulates its mission statement around the core principles of "Contributing to Society through Healthcare." This mission drives the company’s commitment to innovation in medical devices, transfusion systems, and other healthcare solutions.

The primary focus of Terumo is to ensure the provision of high-quality healthcare products that enhance patient outcomes and improve the efficiency of healthcare systems. The company’s strategic vision is reflected in its dedication to research and development, aiming to bring new, effective medical solutions to the market.

Mission Statement Components

• Core Values: Integrity, empathy, and teamwork
• Focus Areas: Cardiovascular, blood management, and diabetes care
• Innovation: Commitment to continuous improvement and technological advancement

Financial Overview

As of the financial year ending March 31, 2023, Terumo reported total sales of ¥1,022.4 billion (approximately $7.7 billion), representing a growth of 7.1% compared to the previous year.

The breakdown of revenue by segment is as follows:

Research and Development Investment

Terumo invests significantly in R&D to uphold its mission statement. In 2022, the R&D expenditure was approximately ¥48.2 billion, which constitutes about 4.7% of total sales. This budget underscores the company’s commitment to developing innovative healthcare solutions.

Global Presence

Terumo operates in more than 160 countries, with a workforce of around 25,000 employees worldwide. This extensive reach illustrates the company's mission to cater to global healthcare needs.

Sustainability Efforts

In alignment with its mission, Terumo is focused on sustainability initiatives. The company aims to reduce CO2 emissions by 30% by 2030, contributing to global health and environmental sustainability.

Conclusion of Mission Alignment

Terumo’s mission is not just a statement but is embedded in its operations, reflected through its financial performance and growth strategy, with a clear emphasis on innovation and sustainability in healthcare. The commitment to its mission underpins the company’s business decisions and future direction.

How Terumo Corporation Works

Terumo Corporation, headquartered in Tokyo, Japan, operates within the medical device sector, focusing on manufacturing and marketing a wide range of healthcare products, including medical devices, pharmaceuticals, and blood management systems. Founded in 1921, it has established a significant presence in both domestic and international markets, offering innovative solutions to medical professionals.

In the fiscal year ending March 31, 2023, Terumo reported a consolidated revenue of ¥1,161.2 billion (approximately $8.8 billion), reflecting a 8.5% increase from the previous year. The company's operating income for the same period reached ¥203.9 billion, representing a 11.1% increase year-on-year.

Terumo's operations are segmented into three primary business divisions:

• General Hospital: This division includes products such as intravenous (IV) systems and needles. It generated approximately ¥590 billion in revenue in FY2023, which accounts for around 51% of total sales.
• Cardiac and Vascular: This segment covers devices used in interventional procedures. In FY2023, revenue reached ¥335 billion, making up approximately 29% of overall income.
• Blood Management: This division deals with blood collection and processing. It contributed roughly ¥236 billion, or 20%, to total revenue.

In addition to its strong revenue growth, Terumo has maintained a healthy balance sheet. As of March 31, 2023, the company reported total assets of ¥1,075 billion with total liabilities of ¥479 billion, yielding a strong equity of ¥596 billion.

Further emphasizing its commitment to innovation, Terumo invested approximately ¥84 billion in research and development (R&D) in FY2023, equating to about 7.2% of its total revenue. This investment has led to advancements in minimally invasive technologies and improvements in patient care.

Geographically, Terumo’s revenue is diversified across various regions, with Japan accounting for approximately 40%, North America around 30%, and Europe and other regions making up the remaining 30%.

As of October 2023, Terumo’s stock is traded on the Tokyo Stock Exchange under the ticker symbol 4543. The company has maintained a market capitalization of roughly ¥3.2 trillion, reflecting investor confidence in its growth potential and operational performance.

Overall, Terumo Corporation showcases a robust operational framework, focusing on innovation, geographic diversification, and solid financial performance, ensuring its position as a major player in the global medical device market.

How Terumo Corporation Makes Money

Terumo Corporation is a global leader in medical technology, specializing in manufacturing and selling medical devices, pharmaceutical products, and blood management products. The company operates through various segments that contribute to its revenue streams.

Revenue Segmentation

As of the fiscal year 2022, Terumo reported total revenue of ¥1,057.7 billion (approximately $9.2 billion). The revenue breakdown by segment is as follows:

General Hospital Segment

The General Hospital segment includes various products such as infusion systems and needles, which are widely used in healthcare settings. For the fiscal year 2022, this segment generated approximately ¥460.3 billion, showing a growth of 6.2% year-over-year. This growth can be attributed to increased demand for intravenous therapy products amid the global health crisis.

Cardiovascular Segment

Terumo's Cardiovascular division focuses on devices such as stents, catheters, and guidance systems. In FY 2022, the cardiovascular segment reported revenue of ¥388.9 billion, which reflected a robust increase of 8.7% compared to the previous year. The rising prevalence of cardiovascular diseases drives demand for these medical devices, and Terumo aims to expand its market share through innovation and partnerships.

Blood Management Segment

The Blood Management segment is critical for Terumo, encompassing products used in blood collection and processing. Revenue reached ¥208.5 billion in FY 2022, marking a 5.1% increase year-over-year. The company has seen growth in blood collection systems due to an increasing focus on blood storage and transfusion services, especially during the pandemic.

Geographical Revenue Composition

Terumo operates globally, with substantial revenue derived from major markets like Japan, North America, and Europe. In FY 2022, the geographical breakdown of revenue was as follows:

Research and Development

Terumo emphasizes innovation as a key driver of revenue growth, investing approximately ¥88.6 billion in R&D during FY 2022. This investment accounts for about 8.4% of total revenue. The focus areas include advanced medical technologies, minimally invasive procedures, and digital health solutions, preparing the company for future market demand.

Market Position and Strategy

Market positioning is essential for Terumo. As of 2022, Terumo held a 5.2% market share in the global medical device market. The company's strategy includes enhancing product lines, entering emerging markets, and forming strategic alliances to capture additional market share.

In summary, Terumo Corporation generates revenue through a diversified range of segments, with a significant emphasis on innovation and global market presence, ensuring continued growth and competitiveness in the medical technology landscape.