I will now explain the first half results for the period ending March 31, 2016.

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First, the overall results.
We continued
Wid theh positivei i results
l off theh firstfi quarter, seeing
i double‐digitd bl di i growthh year on year iin
sales and operating income. Each company posted good sales, with the interventional systems
and neurovascular businesses making an especially large contribution on the strength of overseas
markets, particularly the United States.
Operating income grew 19% year on year thanks to increased gross profit from expanded sales
and good SG&A control.
Even when excluding the effects of foreign exchange rates, the year‐on‐year sales, gross profit,
andd operatingti incomeigrowthth rates
t forf th
the fifirstt hhalf
lf were att approximately
i t l ththe llevell off ththose ffrom
the first quarter.
Ordinary income increased 5% year on year. This growth rate was less than that of operating
income, but the difference was due to foreign exchange losses. In the first half of previous fiscalyear we realized 2.5 billion yen in foreign currency gains, but was followed by 2.4 billion yen insimilar losses for the first half of this fiscal year, or a 5‐billion‐yen negative swing year on year.
Net profit increased 23% year on year due to 4.4 billion yen resulting from our sale of land in
H t
Hatagaya,
T kTokyo.
In September we revised our guidance for both the first half and entire period upward, but thefirst half sales result came out 4.2 billion yen for sales and 2.1 billion yen for operating income,ahead of even that revised forecast. Ordinary income and net income were approximately asexpected. First‐half results for sales, operating income, ordinary income, and net income were all
best ever.
In response to the positive first‐half results, we have also revised our dividend forecast upward.
W hWehave iincreasedd theth forecasted
ft d didividends
id d ffor b
both
th th
the fifirstt hhalf
lf andd periodi d endd byb 3 yen per
share to 19 yen. This results in a 38‐yen total per‐share dividend for the period, or an increase of
6 yen from the initial forecast.

2Here is our analysis of positive and negative impacts on the operating income result.
Operating income for the first half increased 6.1 billion yen from 33 billion the previousyear, for a result of 39.1 billion yen.
The largest positive impact came from a 7.6‐billion‐yen increase in gross profit that
positive contributions came from improvement
pto
resulted from increased sales. Other p
our business portfolio mix and cost‐reduction efforts that improved gross profit.
Negative factors included increased R&D expenses, strengthening of sales force in theEuropean Interventional Systems and neurovascular businesses, price declines, andforeign exchange. Foreign exchange was a positive factor in the first quarter, but cameout as a negative one for the half. Later I will discuss why.

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The regional composition of sales changed little from the first quarter.
The General Hospital Company drove growth in Japan for a 1% year‐on‐year increase.
Outside Japan, sales saw double‐digit growth, or a 17% increase. Sales increased notably
in the U.S., China, Asia, and other areas excluding Europe. The sales decrease in Europeprestructuringg made to the General
was influenced byy havingg less sales after portfolio
Hospital business there, and by yen appreciation against the euro; when excluding
foreign exchange, sales actually increased.

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Next, sales by company.
Sales increased 18% for the Cardiac & Vascular Company, and 10% for the BloodManagement Company—double‐digit growth for both companies.
When excluding foreign exchange impact, all companies saw positive sales growth.
Sales composition was the same as the first quarter.

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I will now discuss more details for each company.
Sales for the Cardiac & Vascular Company increased 18% year on year on the strength ofsales growth for Interventional Systems and neurovascular businesses, especially in theNorth America.
psales difficultyy after realigningg g distribution networks in
Last fiscal yyear, we experienced
China. With realignments complete, we saw growth of over 20% in the first half of thisfiscal year for an increase in sales of 5.3 billion yen more than the previous year.
Ultimaster is being sold in steadily more regions—now including Europe, Asia, andCentral and South America—following its launch last year, and its sales are growing well.
We also obtained approval to manufacture and sell Ultimaster in Japan, and began sales
i October.
inO t b It hash startedt t d outt well.
llThe growth of high‐profitability products has been a particular factor in the large
increase in business profit. Business profitability also drastically increased from 20% to23%.

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The General Hospital Company saw a 3% year‐on‐year increase in sales, and achieved
business profit increase of 22%. Business profitability was restored from 12% in theprevious first‐half period to 15%.
The high‐profitability D&D (Drug and Device) business and DM (diabetes‐management)
business both had sales growth, but the contributions of steady cost‐reduction activities
at factories inside and outside Japan were also significant. As a result, the businessprofitability was restored to its proper level.
level

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The Blood Management Company continues to see large growth in its sales oftherapeutic apheresis and cell‐processing systems. In addition, the blood component
collection system grew, especially in emerging countries.
Starting in the second quarter, the price declines in business for U.S. blood centers
gradually took effect and business profitability sank from 21% in the first quarter to 17%
in the second quarter.
However, as we explained in the first quarter, the price declines happened later thanexpected and therefore are having less effect than initially thought. We are negotiating
to maintain prices and increase sales volume long term instead of accommodating one
time price decline this time. Reaching a quick agreement will not benefit our company,
so we continue to negotiate.

8I will now introduce the main topics of interest from the second quarter.
One topic is that we dissolved a cross‐shareholding arrangement and used the resulting
11 billion yen to acquire our own shares. We had already repurchased 3 billion yen incompany stock the previous fiscal year.
In recent years the concept of “KENKO‐KEIEI” in which a company makes employee
health and wellness maintenance a top management priority, has garnered attention.
Terumo has become one of the leader corporations in this movement by becoming a co‐establishing company in the KENKO Commitment Companies Association, in which
companies declare a commitment to keeping their employees healthy. Other firms areshowing great interest in the program, and the number of participants has grown to 25companies.
The next topic is business‐related.
On September 18th, we received approval in Japan to manufacture and sell HeartSheet.
O AugustOn
ugust 100th, wee aalso
so received
ece ed appapprovalo a to manufacturea u actu e aandd sesell U
Ultimastert aste in Japa
Japan,,
stand sales began on October 1 .
In the United States, the peripheral stent Misago obtained regulatory approval during
the first quarter, as did the PTA balloon in the second quarter, which is a product co‐
developed with Kaneka. Our peripheral product lineup is steadily expanding.
In the field of interventional oncology, we made a venture capital investment in a Dutchcompany.
The General Hospital Company received approval in Japan to manufacture and sell an
intradermal injection device (excluding drug).

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Products in the FY2015 pipeline are being launched as scheduled.
Thank you.

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