Financial Results for the First Half ofFiscal Year Ending March 31, 2021 (FY2020)

November 5, 2020

Naoki Muto
Chief Accounting and Financial Officer
Terumo Corporation

Safe Harbor for Forward-Looking Statements and Use of Document
Among the information that Terumo discloses, the forward-looking statements including financial projections
are based upon our assumptions using information available to us at the time and are not intended to beguarantees of future events or performance. Accordingly, it should be noted that actual results may differ fromthose forecasts or projections due to various factors. Factors affecting to actual results include, but are notlimited to, changes in economic conditions surrounding Terumo, fluctuations of foreign exchange rates, andstate of competition.
The market share information in this presentation is partly derived from our own independent research.
Information about products (including products currently in development) which is included in this material is
not intended to constitute an advertisement or medical advice.

Terumo Corporation
Investor Relations Dept.
E-mail: kouhou_terumo01@terumo.co.jp©TERUMO CORPORATION

2 /22

Revenue and Profits Were Ahead of Schedule Toward FY20 Guidance(billion JPY)

1H FY19

1H FY20

YoY%

YoY%(FXN)

Revenue

307.3

283.3-8%-6%

Gross Profit

171.5 (55.8%)

150.5 (53.1%)

-12%

-9%

SG&A Expenses

89.6 (29.2%)

85.9 (30.3%)

-4%

-3%

R&D Expenses

24.3 ( 7.9%)

23.1 ( 8.2%)

-5%

-4%

1.6

0.4

--

Operating Profit

59.2 (19.2%)

41.8 (14.8%)

-29%

-24%

Adjusted Operating Profit

67.0 (21.8%)

51.3 (18.1%)

-24%

-19%

Profit before Tax

58.1 (18.9%)

40.7 (14.4%)-30%

Profit for the Year

45.7 (14.9%)

31.8 (11.2%)-30%

109 JPY
121 JPY

107 JPY
121 JPY

Other Income and Expenses

Average Exchange Rate

USD
EUR

Revenue: Significant recovery in demand for Cardiac and Vascular. The COVID-19 negative impact onGeneral Hospital as well as Blood and Cell Technologies has been continuously minor
Adjusted Operating Profit: Year-on-year negative growth due to the revenue decrease. SG&A and R&D
Expenses were controlled based on priorities©TERUMO CORPORATION

3 /22

Adjusted Operating Profit Variance Analysis(billion JPY)
7.9

9.8

67.0
59.2

G/P
decrementby salesdecrease

0.94.2Grossmargin

2.6

Price
-0.5
JP
Reimbursement
-2.1

1.2

MDR-0.6
ITinvestment
-0.5

SG&A
decrease

R&D
decrease

3.4

FX

2.7
9.4
51.3
41.8

1H FY20 1H FY20
Adjusted Operating
ProfitOperating
Profit1H FY19 1H FY19
Operating Adjusted
ProfitOperating
Profit©TERUMO CORPORATION

4.54 /22

Revenue by Region
Revenue

1H FY20
1H FY19

Year-on-Year Revenue Comparison
billion JPY

100% = 283.3 B JPY

YoY%( ) FXN

Comments
Japan: Recovery in C&V from Q1 to Q2. GH
performance was driven by Alliance, new product for33%

93.5

Japan

95.9

20%

China

7%

Asia and11%

Others©TERUMO CORPORATION

(-5%)
82.5
92.6

Americas29%-5%

55.5
58.3

Europe20.3
24.4
31.5
36.1

-3%-11%
(-8%)

-17%

(-15%)-13%(-10%)
5 /22

pain management and infection control products
Europe: Recovery in C&V, positive growth inQ2 (3 months). Stable growth in GH and TBCT
by high single digit to double digit percentage
Americas: Significant recovery in C&V, especiallyin TIS and Neurovascular. Continuous steady
growth in Blood center solutions
China: Significant recovery as a wholeexcluding timing issue for order from
distributors in Neurovascular
Asia and Others: Slow recovery in C&V,
especially in India. Sluggish performance in TBCT
due to decreased demand for blood transfusion

Revenue by Business Segment
Year-on-Year Revenue Comparison

Revenuebillion JPY

100% = 283.3 B JPY

YoY%( ) FXN

53%

CardiacandVascular

149.4

-13%

(-12%)

172.6

-1%

81.8

GeneralHospital

(-1%)

82.8

29%

18%

1H FY20
1H FY19

Bloodand Cell
Technologies©TERUMO CORPORATION

52.0+0%(+3%)

51.8
6 /22

Comments
There was decrease in demand due topostponement of procedures.
Significant recovery in the performancefrom Q1 to Q2
In addition to double digit growth inAlliance, new product for pain
management as well as increased
demand for infection control products
mitigated the overall sluggish performancedue to decreased demand
Despite the impact by decrease intherapeutic apheresis cases, stably grew
driven by automated blood collection
systemCardiac
and Vascular: Elective Procedures Backlogs Were Being Cleared(billion JPY)

1H FY19

1H FY20YoY%( ) FXN

172.6
149.4

-13%

Revenue(-12%)

Major Topics
TIS: Despite the impact of decreased
demand among all product categories,
significantly recovered from Q1 to Q2
Neurovascular: There was clearing ofbacklogs for aneurysm treatments
Cardiovascular: Impact of the decreased
demand was mitigated by the increased
revenue of hardware in Japan
Vascular graft: Recovering demand for both
surgical grafts and stent grafts

Adjusted
Operating
Profit
(%)

47.2

32.0

-32%

(-27%)(27%)©TERUMO CORPORATION

Decreased due to the revenue decline.
Product mix was improved from Q1 to Q2(21%)
7 /22Impact-15.9-4.5-2.2-0.6

General : Covered the Impact of Decreased Demand by Solid
Hospital Sales of Alliance and Infection Control Products(billion JPY)

1H FY19

1H FY20YoY%( ) FXN

82.8

81.8

-1%

Revenue

AdjustedOperatingProfit(%)

(-1%)

12.6

11.7

-7%

(-6%)
(15%)

©TERUMO CORPORATION(14%)

Major Topics

ImpactGeneral hospital products: Continuous
impact of limited number of medical
examinations especially in Japan and Asia

-2.9

Pharmaceutical: Declined sales of IV
solutions was mitigated by solid sales ofpain management products-0.2

DM Healthcare: Increased demand forthermometers etc. in Healthcare products+0.8

Alliance: Double digit growth both insideand outside Japan+1.3

Impact of revenue decline as well as lowered
manufacturing operation level was minimized
by solid sales of Alliance and continuous
expense control
8 /22

Blood and Cell
Technologies: Continuous Increase in Both Revenue and Profit(billion JPY)

1H FY19

1H FY20

YoY%

Major Topics

Impact( ) FXN

51.8

52.0+0%

Revenue

Adjusted
OperatingProfit
(%)

(+3%)

6.7

8.9+33%(+43%)(13%)©TERUMO CORPORATION

Blood center solutions: Driven by software
update for automated blood collection system.
Increase in collection demand for theCOVID-19 convalescent plasma therapy+1.6

Therapeutic solutions: Decreased demand
due to postponement of elective procedures-1.0

Large growth due to expense control in addition togross profit increase by better product mix

(17%)
9 /22

Revision of FY20 Guidance(billion JPY)

Original
Guidance

RevisedGuidance

600.0

600.0

85.0

90.0

(14.2%)(15.0%)

103.0

108.0

(17.2%)(18.0%)

65.0

68.0

105 JPY
120 JPY

106 JPY
121 JPY

Revenue
Operating Profit
Adjusted Operating Profit
Profit for the YearAverage Exchange Rate (Predicted)

USDEUR

Changein amount+5.0+5.0+3.0

Factored in the better 1H performance than expected
No revision for the FY20 annual dividend proposal disclosed at the financial announcementin May 2020
©TERUMO CORPORATION

10 /22

Key Assumptions of 2H FY20 Projection
Recovery in the 2H revenue becomes slower than the original projection disclosed at thefinancial announcement in August 2020110%

 Overall healthcare demand including new procedure pipeline is declined due to limited
number of medical examination, continuing on a global basisFY19 Revenue (FXN)

100%

90%

Revised projection
Original projection80%

FY19Q4FY20Q1Q2Q3Q4

Adjust the operating level of production from Q3 onward to optimize inventory level, which
was raised in Q1 for the purpose of BCP
While controlling SG&A Expenses to an extent, also plan to invest appropriately based on
the business performance to achieve rapid recovery
Control R&D Expenses by prioritizing from the perspective of mid- to long-term growth©TERUMO CORPORATION

11 /22

Major Topics in FY20 Q2
Donated cash and products to support relief efforts for heavy rains in July 2020 inCorporate

Japan through Japanese Red Cross and other organizations
Joined in a fund operated by CD Capital, a Chinese venture capital firm
Radioactive microspheres“QuiremSpheres”

CardiacandVascular

Acquired Quirem Medical, a startup specializing in the development of microspheres for liver tumors
Started a new clinical study of “Renzan” peripheral stent system in Europe
Launched “CASPER Rx” carotid stent in JapanGeneral
Hospital

Started co-development of digital supporting system for diabetes treatment with MICIN, Inc.

Carotid Stent“CASPER Rx”

Received GMP certification from the US FDA to manufacture a biosimilar
to adalimumab at Yamaguchi factory

Blood and Cell
Technologies

Peripheral Stent System“Renzan”

Pre-fillable syringe“PLAJEX”

Pathogen reduction
system“Mirasol”

Received approval for “Mirasol” pathogen reduction system to treat platelets in Switzerland©TERUMO CORPORATION

12 /22

FY20 New Product Pipeline
Category

Products
Steerable sheath

Coronary

Imaging
Oncology

PTCA balloon(manufactured by EssenTechnology)
IVUS catheter

CardiovascularChinaJPEU

Peripheral embolization plug

USBalloon guide catheter
Carotid stentGeneral
hospital
Launched products
PharmaceuticalJPOxygenator

JP

Launched

Heart lung machine (re-launch)JP

Launched©TERUMO CORPORATION

ProductsGlobal Launched

13 /22Region Launch

Stent graft for abdominal aorticaneurysm

US

Launched

Syringe pumpJP

Launched

Safety IV catheter

JP

Syringe pump for open TCI

EU,AsiaEU
Launched

JP

Launched

Strong opioid analgesic(Fentanyl citrate tape for 1 day use)
Continuous glucose monitoring
system

JP, US Launched DM andconsumer Blood glucose monitoring systemEUhealthcare
ThermometerJP
Launched

Intrasaccular aneurysm
treatment device (WEB)

Surgical stabilizer

CategoryVasculargraft

JP

Biodegradable drug-eluting
microsphere

Flow diverter
Neurovascular

Region LaunchJP
JP

Launched

JP

LaunchedReference©TERUMO CORPORATION

14 /22

1H FY20 Revenue and Growth by Region
BusinessSegment

Japan

Cardiac andVascular

Overseas(billion JPY)

Total

Subtotal

Europe Americas

China

Asia

22.9 (-8%)

126.6 (-13%)

37.9 (-10%)

57.2 (-13%)

16.1 (-19%)

15.3 (-13%)

149.4 (-12%)

Out of C&V,
TIS and
Neurovascular

16.5 (-12%)

104.1 (-13%)

30.7 (-11%)

46.0 (-12%)

14.8 (-21%)

12.6 (-14%)

120.6 (-13%)

GeneralHospital

64.8 (-0%)

17.0 (-2%)

4.6 (+6%)

4.1 (+9%)1.0 (-15%)

7.3 (-10%)

81.8 (-1%)

Bloodand CellTechnologies

5.7 (-6%)

46.3 (+4%)

13.1 (+12%)21.2 (+4%)

3.1 (+20%)

8.9 (-6%)

52.0 (+3%)

Total

93.5 (-3%)

189.8 (-8%)

55.5 (-5%)

82.5 (-8%)

20.3 (-15%)

31.5 (-10%)

283.3 (-6%)(YoY%): FXN©TERUMO CORPORATION

15 /22

Operating Expenses(billion JPY)

1H FY19

1H FY20

YoY

YoY%

YoY%
(FXN)

Salaries & Wages

44.0

45.6+1.6+4%+5%Sales Promotion

9.5

5.1-4.4-46%-46%

Logistical Costs6.8

6.9+0.1+1%+2%

Depreciation &Amortization

9.1

9.5+0.5+5%+7%

Others20.3

18.8-1.5-7%-6%

SG&A Expenses Total

89.6 (29.2%)

85.9 (30.3%)-3.7-4%-3%

R&D Expenses

24.3

23.1(8.2%)-1.2-5%-4%

Operating Expenses
Total

113.9 (37.1%)

109.0 (38.5%)-4.9-4%-3%©TERUMO CORPORATION(7.9%)

16 /22

Quarterly Results
FY19 Q2(billion JPY)

Q3

Q4(Jul-Sep)(Oct-Dec)(Jan-Mar)

154.8

162.9

Gross Profit

86.3 (55.8%)

SG&A Expenses

FY20 Q1Q2(Apr-Jun)(Jul-Sep)

158.8

131.3

152.0

87.2 (53.5%)

85.3 (53.7%)

68.9 (52.5%)

81.6 (53.7%)

45.1 (29.1%)

47.2 (29.0%)

47.7 (30.1%)

40.1 (30.5%)

45.8 (30.2%)

R&D Expenses

12.5 (8.1%)

12.7 (7.8%)

13.6 (8.6%)

11.2 (8.5%)

11.9 (7.8%)

Other Incomeand Expenses

1.3-0.2

0.5-0.1

Operating Profit

30.0 (19.4%)

27.1 (16.6%)

24.4 (15.3%)

18.1 (13.8%)

23.8 (15.6%)

Adjusted
Operating Profit

33.1 (21.4%)

31.4 (19.3%)

26.6 (16.7%)

21.7 (16.5%)

29.6 (19.5%)

USD

107 JPY

109 JPY

109 JPY

108 JPY

106 JPY

EUR

119 JPY

120 JPY

120 JPY

119 JPY

124 JPY

Revenue

Average
ExchangeRate©TERUMO CORPORATION

0.417 /22

Adjusted Operating Profit: Adjustments(billion JPY)

1H FY19

1H FY2059.2

41.8

Adjustment 1. Amortization of acquired
intangible assets+7.8+7.2

Adjustment 2. Non-recurring profit or loss

+0.0+2.3 *

67.0

51.3

Operating Profit

Adjusted Operating Profit<General examples of adjustment items>• Acquisition related cost
• Lawsuit settlement* 1H FY20 main items inAdjustment 2. Non-recurring profit or loss

Amount• Impairment loss

Business reorganizing cost+0.3• Restructuring loss

Others+1.9• Nonlife insurance income• Loss on disaster• Other one-time profits & losses©TERUMO CORPORATION

18 /22

CAPEX, Depreciation and R&D Expenses

CAPEX & Depreciation

89.5

85.0

Amortization of acquired
intangible assets
60.8
43.6 42.0

44.0

14.5

14.6

CAPEX
27.6

29.4

15.7
15.7

35.3
24.1
7.7

32.0

Depreciation

36.8

16.4
CAPEX = C.i.P. record basis

R&D Expenses
41.3

52.5

47.715.7(billion JPY)

47.7

50.6

48.0

23.1

FY17©TERUMO CORPORATION

FY18FY19

1H FY2019 /22

FY20 Guidance

Lease depreciation(IFRS16) is not included in
FY19, 1H FY20 results andFY20 Guidance
Expand investment inproduction capacity andspace, R&D as well as IT
in FY20
Further promote R&D
activities mainly for TIS,
Neurovascular and TBCTCapitalized R&D expenses
are included in CAPEX
FY18:

2.4

FY19:

4.8

1H FY20:

2.9

FY20 Guidance: 5.4

Cash Flows

Operating CF+41.6

Investing & Financing CF+1.1(billion JPY)

10.0
10.5
26.8

40.7

Profitbefore tax

Depreciation
andamortization

Incometaxes

Redemptionof bonds

15.4
Workingcapitalincrease

10.5
Dividends

70.0

13.1
Others35.3
CAPEX Long-term
debt

209.6

166.9

Cash at theend of FY19
©TERUMO CORPORATIONCAPEX = C.i.P. record basis
Cash at the end of each period is equal to “cash and cash equivalents” on B/S

20 /22

Cash at theend of 1H FY20

Foreign Exchange Sensitivity
Annual impact of 1 JPY depreciation(billion JPY)

USD

EUR

CNY

Revenue

1.70.82.4

Adjusted Operating Profit

0.0

0.5

1.3

<Reference> Impact when JPY is depreciated by 10%North
Latin
America America

Adjusted Operating Profit©TERUMO CORPORATION

-0.1

1.0

EMEA

Asia

EUROthers

CNYOthers

6.5

1.3

2.0

3.6

21 /22

The Status of Convertible Bonds
Detail of the bonds (issued in Dec. 2014)
Maturity

Aggregateprincipal amount(billion JPY)

Dec. 2019*After two-for-one stock split implemented in Apr. 2019

CouponConversion
Price(JPY)

Contingent
conversion price(JPY)

50.0

0.0%

1,912

2,486

Approx. 26 M sharesDec. 2021

50.0

0.0%

1,912

2,486

Approx. 26 M shares

Total

100.0

Number of sharesrequired to be issued
for conversion

Approx. 52 M shares

The status of conversion (as of Oct. 31, 2020)
Amount of shares issued for conversion(% against the total amount of bonds)

Number of shares issued for conversion(% against total number of issued shares)

Convertible bonds
due Dec. 201950.0 B JPY (100.0%)

26 M shares (3.4%)

Convertible bonds
due Dec. 2021

48.7 B JPY (97.4%)

25 M shares (3.3%)

Total

98.7 B JPY (98.7%)

51 M shares (6.8%)

Bonds

Allocated treasury shares to the shares issued for conversion• Status of treasury shares: 4 M shares(at the end of Oct. 2020, treasury stock cost per share: 1,949 JPY, % against total number of issued shares: 0.7%)©TERUMO CORPORATION

22 /22