2nd Quarter Financial Results for FYE Mar. 2010: Reference
Qualitative information – Financial Statements
Even though positive signs could be seen in some indices, the global economic trend during
the total period of consolidation in the second quarter still continued with a weak economy
and an increased sense of uncertainty about the future, including foreign exchange trends.
From the viewpoint of environmental changes in relation to healthcare, unprecedented majorchanges have been seen as China has started toward a universal national health insurance
system by strongly pushing the establishment of a medical infrastructure driven by thegovernment, while in the US a bill to cover more than 45 million uninsured people by healthinsurance reforms is introduced. In Japan, also, discussions and examinations have takenplace with respect to reforms to address and solve many challenges such as chronic deficit
operations around public hospitals and working conditions of medical service providers.
We are engaged in business to provide products and services to enhance the quality ofhealthcare and promote efficiency, and, during the current period, continued to work on theseoperations. Furthermore, under such business environment, we also addressed to enhance ourmanagement structure and expansion of business domains in view of the future changes in
the global market where the healthcare economy will increase in importance.
Our performance in the total period of consolidation in the second quarter is as follows:
1. Net Sales
For the six months ended September 30, 2009, consolidated net sales increased by 8% inJapan and 9% outside of Japan on a local currency basis. We overcame the impact of theappreciation of the yen, and our total sales reached 158.1billion yen or a 1% increase whencompared with the same period in the previous year.
Geographic segments(Unit: 1 millions yen)Area

Six months ended

Six months ended

Changes %Changes%

September 30, 2008

September 30, 2009Japan

81,33087,7747.9%

7.9%

Europe30,73627,216(11.5%)

9.1%

Americas28,941

28,137(2.8%)

8.0%

Asia and others

16,002

14,934(6.7%)

9.6%

Total of Outside of Japan

75,68170,289(7.1%)

8.8%

Total

157,011

158,0630.7%

8.3%-1-(Local currency basis)

[Terumo Corporation] 2nd Quarter Financial Results for FYE Mar. 2010:Reference

In Japan, prefilled syringes saw a good increase in sales, as was the case with the first quarter.
In addition, new products of PTCA balloon catheter used for treatment of Angina Pectoris
and other diseases enjoyed good sales, increasing the total sales amount of interventionalsystems. Greater demand for digital thermometers driven by the swine Flu, the impact of thenew products launch of digital blood pressure monitors, and other factors resulted in asignificant increase in consumer healthcare product sales.
Outside of Japan, we achieved a nearly two-digit growth in sales on a local currency basis.
Though the postponement of purchasing large-scale equipment used for heart operations still
happened, sales around interventional systems increased in Europe, North and SouthAmerica and Asia in a balanced manner.
Business segments(Unit: 1 millions yen)
Business Segment

Six months ended

Six months ended

Changes %Changes%

September 30, 2008

September 30, 2009

General Hospital Products

75,21975,191(0.0%)

3.6%

Cardiac & Vascular Products

66,611

67,412

1.2%

13.3%

Blood Transfusion Products

12,58611,791(6.3%)

3.2%

Consumer Health Care Products

2,593

3,668

41.4%

44.0%

157,011

158,063

0.7%

8.3%

Total

(Local currency basis)

In relation to cardiac & vascular products, interventional systems served as the mainstay ofgood sales increases both in Japan and outside Japan, compensating for the impact of theappreciation of the yen. Digital thermometers served as the driving force of sales for
consumer healthcare products, resulting in a good increase.
At the same time, among general hospital products, pharmaceutical products such asprefilled syringes or I.V. solutions enjoyed a favorable sales increase in Japan. Total sales ingeneral hospital products category remained nearly flat when compared with the same period
in the previous year, due to the impact of the yen appreciation. Blood transfusion products
depended much on sales outside of Japan, and as they were strongly influenced by theappreciation of the yen, the growth rate decreased.
2. Gross Profit and Operating Income
Even though gross profit saw improvements thanks to such factors as production increase in
the Vietnam factory and other Asian countries, cost reduction through improved production
efficiency, decrease in material prices and the shift to highly profitable products, the impactof foreign exchange was so large that our gross profit rate dropped by 1points to 52.7% whencompared with the same period in the previous year. On the other hand, it was improved
from the gross profit rate of the second half of fiscal 2008 by 2points to 50.7%.
Looking at SG&A expenses, while the research and development expending increased, a-2-

[Terumo Corporation] 2nd Quarter Financial Results for FYE Mar. 2010:

Reference

thorough efficient use of general administrative expenses enabled an improvement in theSG&A expenses rate to 32.1% or 1.6 point improvement when compared with the sameperiod in the previous year.
As a result, operating income made a recovery from the substantial drop in the second half oflast year, and the operating income rate was 20.6%, or a 0.6 points increase when comparedwith the same period in the previous year, with operating income at 32.6 billion yen.
3. Ordinary Income
Exchange gain 0.6 billion yen was recorded for the six months ended September 30, 2008,
but for the same period this year, exchange loss 0.8 billion yen was recorded.
As the result, ordinary income has decreased by 1.8% to 32.2 billion yen.
4. Net Income
Net income for the six months ended September 30, 2009, has decreased by 9.7% to 20.8
billion yen compared with the same period last year. This is mainly due to tax exemption
effect of dividend received from overseas subsidiaries
5. Forecast
We have reviewed assumption of the foreign exchange rates in second half of this fiscal year
such as 1USD =85 yen and 1Euro =130 yen and revised upward full year forecast of eachprofit. It continuously persists in the efficiency operation that centers on generaladministrative expenses while the growth investments of the research and development
spending and the sales promotion expense and others are positively dropped aiming at
promotion of the global expansion of a new product development in this latter six months ofthe term, and it tries to strengthen profitability.
(Full-year)(Unit: 1 millions yen)
Operating
IncomeNet sales
Forecast announced
last time
Forecast announced
this time

Ordinary
IncomeNet Income

Net Income
per Share (yen)315,000

56,00056,00037,500197.47315,000

63,00061,00040,000210.64

Changes

-

7,000

5,000

2,500

13.17

Changes (%)

-

12.5%

8.9%

6.7%

6.7%

302,746

54,03952,58036,878191.86

Previous year results-3-