Financial Results for the First Half ofthe Fiscal Year Ending March 31, 2015 (FY2014)
Terumo Corporation
Senior Executive Officer, Investor Relations
Kazuaki Kitabatake

November 5, 2014

Highlights in 1H
Corporate

Cardiac &VascularGeneralHospital Secured increase both in sales and profit while absorbing reimbursement
price cut in Japan
 Grew overseas IS and Neurovascular businesses at double digit whileabsorbing declined domestic sales due to reimbursement price cut in JP Launched Ultimaster (new DES) in Asian and Latin American countries aswell as Europe
 In Japan, on top of recoil reduction in demand following the consumption
tax increase, the effect of restrained consultation due to revision of public
insurance system has seen Reduced manufacturing cost of General Hospital Products
 Sustained increase in sales and profit under the challenging market
environment

Blood
Management  Achieved continuous sales growth in overseas automated blood
component processing system and therapeutic apheresis© Terumo Corporation

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Increase in Sales and Profit: Operating Income Up by 8%(Billion yen)

1H FY2013

1H FY2014

YoY%

YoY%
(Excl. FX)Net Sales

226.0233.3+3%+0%Gross Profit

117.2 (51.8%)

122.9 (52.7%)+5%+1%

SG&A Expenses

71.4 (31.5%)

76.3 (32.8%)+7%

R&D Expenses

15.3 ( 6.8%)

13.6 ( 5.8%)-11%

Operating Income

30.5 (13.5%)

33.0 (14.1%)+8%+3%(Excl. Amortization)

38.5 (17.0%)

41.3 (17.7%)

+7%

+3%

Ordinary Income

29.6 (13.1%)

34.0 (14.6%)+15%

Net Income

19.5 ( 8.6%)

21.9 ( 9.4%)+12%

Average exchange rate

US$EUR

99 yen
130 yen103 yen139 yen© Terumo Corporation

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Operating Income Variance Analysis1.8
1.1
2.4
1.7

30.5

FX

G/P
incrementby salesincrease

Productmix
Improvement(Billion yen)

0.6

G/P
improvement bycost
reduction

SG&A
increase(-2.6)

3.9

Decreaseof DuraJP
heart
ReimburseR&D,
ment
Etc.
(-2.3)(+2.0)
Price
erosion(-1.6)

1H FY1333.0

1H FY14© Terumo Corporation

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Net Sales by Region
Overseas with strong performance, China under local distributors re-arrangement(Billion yen)

Consolidated: +3% (+0%)

1H
1H
FY2013 FY2014( ) Excluding Foreign Exchange

Japan Outside of Japan-4%+8% (+3%)

143.9

45.6
58.0

Americas+7% (+3%)

38%
62%
89.4

50.7

Europe+11% (+4%)

China-5% (-8%)
Asia & Others+11% (+8%)© Terumo Corporation

54.1
10.7
11.2
24.5
21.9
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Net Sales by Business Segment(Billion yen)

Cardiac & Vascular
General Hospital
Blood Management

20%47%
33%

Cardiac & Vascular reached 47%(44.6% at end of 1H, FY13)1H
1H
FY2013 FY2014( ) Excluding Foreign Exchange

108.9

Cardiac &Vascular+8% (+4%)

100.8
78.4

GeneralHospital-3% (-4%)
BloodManagement+4% (+1%)

81.2
46.0
44.1

© Terumo Corporation

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Operating Profit by Business Segment(Billion yen)

1H FY2013

1H FY2014

YoY%

YoY%(Excl. FX)

20.1 (20%)

21.5 (20%)+7%-1%

10.9 (13%)

9.6 (12%)

-12%

-13%

BloodManagement

8.9 (20%)

9.3 (20%)+4%+0%

Others*-1.4

0.9--38.5 (17%)

41.3 (18%)+7%+3%

Cardiac &VascularBusiness General
ProfitHospital

Operating Income(Excl. amortization)* Others: profit unrelated to any business segments
1H FY13: R&D for Duraheart and others, 1H FY14: profit increase by reduction of corporate related expense and others© Terumo Corporation

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Cardiac & Vascular: Increase in Sales and Profit(Billion yen)
YoY%
(Excl. FX)

1H FY2013

1H FY2014

YoY%Sales

100.8108.9+8% +4%

Business Profit (%)

20.1 (20%)

21.5 (20%) +7%-1%<Sales> Increase in overseas IS business and neurovascular intervention products (stent, etc.)+6.8 BJPY CV business: oxygenators and monitoring system grew mainly in EU and U.S.

+1.7 BJPY

 Reimbursement price cut in Japan- 1.9 BJPY<Business Profit> Reduced manufacturing cost mainly for IS business+ 0.6 BJPY Launched Ultimaster (new DES) in Asian and Latin American countries as well as Europe© Terumo Corporation

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General Hospital
Decrease in Sales and Profit Due to Changing Market Environment(Billion yen)
YoY%
(Excl. FX)

1H FY2013

1H FY2014 YoY%

Sales

81.2

78.4

Business Profit (%)

10.9 (13%)

9.6 (12%) -12% -13%-3%-4%<Sales> Japan: recoil reduction in demand following the consumption tax increase and the effect of restrained
consultation due to revision of public insurance system- 1.7 BJPY
 Americas: trimmed unprofitable accounts business for general hospital products- 0.7 BJPY

 Reimbursement price cut in Japan- 0.4 BJPY Europe: grew business-to-business with pharmaceutical companies at double digit+ 0.5 BJPY<Business Profit> Reduced manufacturing cost mainly for general hospital products© Terumo Corporation+ 0.5 BJPY
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Blood Management: Sustained Increase in Sales and Profit(Billion yen)
YoY%
(Excl. FX)

1H FY2013

1H FY2014 YoY%Sales

44.1

46.0Business Profit (%)

8.9 (20%)

9.3 (20%) +4% +0%+4% +1%<Sales> Achieved double digit growth in overseas therapeutic apheresis+ 0.9 BJPY Automated blood component processing system globally grew at double digit+ 1.3 BJPY US: on the back of constraints of healthcare expenditure, price pressure is increased - 0.4 BJPY<Business Profit> Controlled SG&A within the range of sales growth© Terumo Corporation

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Progress in 1H New Product Pipeline
BusinessProductRegion

EU, Latin A,Coronary New DES (developed in house) ◎◎Asia★

Central implantable venousaccess system
Peripheral
Occlusion microballoon
for B-TACE
Renal sympathetic denervation
system (RSD)

JPNew DES(Ultimaster)★

Asia &Latin A
Asia &Latin AAblation

RSD for TRI technique

NeuroInfusion
SystemNutrition

JP

Carotid stent★

EU

Needleless system◎JP★Great conformability and ★Through control of plaqueproprietary drug coating

dislodgement, reduction ofstroke is expected

Occlusion microballoon

Closed infusion system foranticancer drug
Liquid formula (anti-reflux)

Carotid stent (CASPER)

JP★

JP(Attendantnexus)

Liquid formula (Mermed)★Enables further selective★Semi-solidified once

B-TACE

introduced into stomach,reduction of reflux isexpected◎ Item with large contribution to sales and profit★ Item with highly innovative technology© Terumo Corporation

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Key Initiatives in 2H FY2014© Terumo Corporation

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Key Initiatives in 2H FY2014
Continuously reinforce initiatives for profitability improvement
Catch up with sales guidance Cardiac & Vascular: continue the launch of new products for IS and Neurovascularbusiness and sustain the expansion of existing products (access devices, etc.)
 General Hospital: expand pumps and infusion solutions sales, and accelerate test tip
expansion by the leverage of new blood glucose monitor launch Blood Management: continue expansion of automated blood component processing
system and therapeutic apheresis

In response to performance, move on SG&A expenditure andaccelerate R&D activities© Terumo Corporation

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New Product Pipeline for 2H
Business
Coronary

Product
New PTCA balloon

Region◎

PTA balloon

Peripheral

Neuro

Stroke device (clot retriever)
Liquid embolic glueInfusion
SystemDM

JP, EU, US(above and below the knee)
Stent for small vessel (Misago)Coil assist stentEU◎◎★
★

◎

Automated blood component
collection system (plasma)

BloodManagement

Automated blood component
processing system

USStroke device (ERIC)EU★ Interlinked cage system

EUfor efficient clot retrieval

Asia

Needleless system
Blood glucose monitor (color LCD)

EU, Asia,
L America

JP
JP

★

JP

Therapeutic apheresis system(Bone marrow stem cell andUS
polymorphonuclear leukocyteapplication)◎ Item with large contribution to sales and profit★ Item with highly innovative technology

Liquid embolic glue (PHIL)★ The world first ready-to-use
prefilled syringe© Terumo Corporation

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Net Income Guidance Revised Due to Subsequent Event(Billion yen)

Net IncomePrevious
FY14 Guidance

Modified
FY14 Guidance

YoY

YoY%

37.5

33.5

-4.0-10.7%

Average exchange rate: US$ = 100 yen, EUR = 140 yen<Reason>
Extraordinary loss of 6.4 billion yen due to subsequent event “Terumo transforms
product portfolio of Hospital and Laboratory Business in Europe”, announced in Oct
23, 2014, will be posted in 3Q of FY2014.

© Terumo Corporation

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Reference© Terumo Corporation

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1H Net Sales and Growth by Region(Billion yen)
Outside of Japan

BusinessSegment

Japan

Cardiac &Vascular23.5 (-3%) 85.4 (6%) 31.7 (6%) 35.6 (8%) 8.3 (-9%) 10.0 (15%) 108.9 (4%)

Out of C&V
Interventional
Systems*

18.1 (-4%) 63.4 (7%) 25.0 (7%) 23.2 (11%) 7.7 (-10%) 7.6 (11%) 81.6 (4%)

GeneralHospital

59.9 (-4%) 18.5 (-4%)

BloodManagement

6.0 (-4%) 40.0 (1%) 13.1 (2%) 18.7 (-1%) 1.7 (-8%)

G. Total

89.4 (-4%) 143.9 (3%) 50.7 (4%) 58.0 (3%) 10.7 (-8%) 24.5 (8%) 233.3 (0%)

Subtotal*Including Neurovascular businessEurope

6.0 (1%)

Americas

ChinaAsia

G. Total

3.7 (-19%) 0.7 (19%) 8.0 (-1%) 78.4 (-4%)
6.5 (10%) 46.0 (1%)

(YoY%): Excluding foreign exchange© Terumo Corporation

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SG&A Expenses(Billion yen)

1H FY2013

1H FY2014

YoY

YoY%

Logistical Costs

31.3
7.0
5.4

33.9
7.6
5.3+2.6
+0.6
-0.1

+8%
+8%
-2%

Depreciation &Amortization

10.9

11.9+1.0+8%

Others

16.8

17.6+0.8+6%

GeneralAdministrative Total

71.4 (31.5%)

76.3 (32.8%)+4.9+7%

R&D Expenses

15.3 (6.8%)

13.6 (5.8%)-1.7-11%

SG&A Expenses Total

86.7 (38.3%)

89.9 (38.6%)+3.2+4%

Salaries & Wages
Sales Promotion(%) Against net sales© Terumo Corporation

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SG&A Expenses(Billion yen)

1H FY2013*

1H FY2014

YoY

YoY%

GeneralAdministrative Total

73.7

76.3+2.6+4%

R&D Expenses

15.6

13.6

-2.0-13%

SG&A Expenses
Total

89.3

89.9+0.6+1%* Value adjusted by excluding FX impact© Terumo Corporation

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Quarterly Results(Billion yen)

Q2

Q3Q4Q1 FY14

Q2(Jul-Sep)(Oct-Dec)(Jan-Mar)(Apr-Jun)(Jul-Sep)

122.1

Net Sales

114.9

119.2

Gross Profit

60.1 (52.3%)

61.5 (51.6%) 63.3 (51.9%) 60.7 (52.8%)

62.3 (52.6%)

SG&A Expenses

43.0 (37.4%)

43.7 (36.7%) 46.3 (37.9%) 44.6 (38.8%)

45.4 (38.3%)

Operating Income

17.1 (14.9%)

17.8 (14.9%) 17.0 (14.0%) 16.1 (14.0%)

16.9 (14.3%)

US$Average
Exchange RateEUR

99 yen

100 yen103 yen

102 yen104 yen131 yen

137 yen141 yen

140 yen138 yen

114.9© Terumo Corporation

118.4

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Profit Ratio, SG&A Expenses Ratio
(%)

52.3

51.6

37.4

36.7

14.9

14.9

51.9

52.8

52.6

37.9

38.8

38.3

14.0

14.0

14.3

FY13

Q2

Gross
MarginSG&AExpenses
Ratio
OperatingMarginFY14Q3Q4Q1

Q2© Terumo Corporation

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CAPEX, R&D Expenses(Billion yen)

FY2014
Guidance

1H
Results

Progress toguidance

CAPEX

42.0

21.2

50%

Depreciation &Amortization

41.0

19.6

48%

R&D Expenses

31.0

13.6

44%

Depreciation & Amortization: Including intangibles
CAPEX: Acquisition basis© Terumo Corporation

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Cash Flow
Despite corporate tax burden in Q1, operating CF at end 1H recovered well.
CAPEX has progressed as planned.
SB of 40 BJPY will be redeemed in March, 2015.

Investing and Financing CF-19.3

Operating CF
+27.7
19.6

34.1
Incomebeforetax

Depreciation &Amortization(Billion yen)

19.8
Corporate tax
andothers

6.2
Increase
inworkingcapitalandothers

21.2
2.8
CAPEX

Debt
finance

5.5

4.6

Dividend

Others104.0

95.6
Cash at endof FY13

Cash at endof Q2 FY14
© Terumo Corporation

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Foreign Exchange Sensitivity(Billion yen/year)

US$EURNet Sales

1.80.7

OperatingIncome

0.30.4© Terumo Corporation

2014/11/524/26

Quarterly Average Exchange Rates Trend
EUR (FY2014)

140

140

138
137

120

129

141

131
USD (FY2014)

102

104

100
99

99

100

Q1

Q2

Q3

10380

© Terumo Corporation

Q4

2014/11/525/26

IR Contact
Terumo Corporation
Corporate Communication (IR) Dept.
E-mail: kouhou_terumo01@terumo.co.jp

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 be guarantees of future events or performance. Accordingly, it should be notedthat actual results may differ from those forecasts on projections due to various factors. Factors
affecting to actual results include, but are not limited to, changes in economic conditions
surrounding Terumo, fluctuations of foreign exchange rates, and state of competition.
The market share information in this presentation is partly derived from our own independentresearch.

© Terumo Corporation

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