[Terumo Corporation] Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2012: Reference

Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2012:
Reference
Analysis of Business Performance<1> Overview of the Financial Results for the First Quarter of the Fiscal YearEnding March 31, 2012[1] Overview of Business Results
The global economy in the first quarter of consolidated financial results (April 1,2011 to June 30, 2011) showed a gradual recovery trend, led by the economic growthof China and other emerging countries. At the same time, in Japan, the Pacific Ocean
Earthquake that occurred in March had a serious impact on the Japanese economy, andwhich was worsened by the appreciation of the yen, making business conditions ratheradverse for Terumo Group.
Though there was concern about our production activities due to the earthquake, we
made all-out efforts to promote restoration, and by early April were able to recoverfactory operations to a standard prior to the earthquake. However, with partnercompanies damaged by the earthquake and decreased factory operation rates caused byrolling power outages, the influence upon sales persisted as the supply shortage ofsome products of General Hospital Business such as I.V. solutions occurred.
Looking at the global healthcare market, high market growth has been seen in
emerging countries where improvement of the medical infrastructure has drasticallymade progress, driven by economic development and demand for medical device hasincreased. In advanced countries, while a reduction of medical cost has beenstrengthened, demand for the healthcare economics has further been increased inaddition to treatment results and QOL (quality of life) of patients. As can be seen, inthe drastically changing global market, new opportunities for growth where we cantake advantage of Terumo Group strengths have been expanding.
Based on this, Terumo Group set a target of GP1 “1 trillion Global Presence” where
we achieve one trillion yen net sales by the Fiscal Year ending March, 2021 andbecome a strong presence in the world under the new management team. We launcheda mid-term management plan, “GP1: Change and Growth 2013” starting in the Fiscal
Year ending March 2012. The major growth strategies include not only strengtheningpotential for internal growth through increasing global development capabilities butalso targeting drastic growth by fully taking advantage of mutual reciprocity of the twocompanies obtained from the integration with CaridianBCT that we acquired in April-1-[Terumo Corporation] Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2012: Reference

2011. We will also take risk measures, improve profitability, and improve financial andother standings. By steadily putting these strategies into practice, we will continuously
achieve double-digit annual growth.
As a result, our performance in the consolidated period of the first quarter of thisfiscal year is as follows:< Net Sales >Net sales were 95.6 billion yen or a 17.7% increase from the same period of last year.
The existing business excluding CaridianBCT and Harvest Technologies we acquired
this year (“existing business”) was affected by the appreciation of the yen and resulted
in a 2.6% increase to 83.4 billion yen when compared with the same period of lastyear.
Geographic segments(Unit: millions of yen)Area

Q1 FYE Mar. 2011

Changes %Q1 FYE Mar. 2012
Changes %Results(Constant currency basis)

Results

Japan

42,54444,2544.0

4.0

Europe13,956

15,555

11.5

12.0

Americas14,763

13,326(9.7)

1.6

Asia and others

9,968

10,234

2.7

10.1

Total of Overseas

38,68939,115

1.1

7.5

TOTAL

81,234

83,3702.6

5.7(Note) The results of BCT and Harvest are excluded.

In Japan, I.V. solutions and other products of General Hospital Business whose
supply fell short, affected by the earthquake, experienced difficulties. Drug-eluting
coronary stent, “Nobori” that we launched in May 2011 favorably increased its market
share and sales. Consequently, domestic net sales were 44.3 billion yen, representing a
4% increase when compared with the same period of last year.
Outside of Japan, interventional systems served as the driving force of sales. We
achieved a 32.4% increase in China on a constant currency basis to contribute to total
sales, but strongly affected by the appreciation of the yen, outside of Japan net sales
were 39.1 billion yen or a 1.1% increase when compared with the same period of lastyear.

-2-[Terumo Corporation] Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2012: Reference(Unit: millions of yen)
Q1 FYE Mar. 2011

Changes %Q1 FYE Mar. 2012
Changes%Results(Constant currency basis)

Results

Net Sales

81,234

83,3702.6

5.7

Gross Profit

42,33643,012

1.6

6.2

Operating Income

15,946

16,964

6.4

13.1

Ordinary Income

12,554

16,40530.7-

Net Income

8,792

10,38918.2-(Note) The results of BCT and Harvest are excluded.

<Gross Profit>
Gross profit increased to 50.8 billion yen or a 20.1% growth when compared with thesame period of last year. Though we experienced negative factors such as the effect of
the appreciation of the yen and price reductions in existing business, thanks to the shift
to highly profitable products and the effect of increased production, the result was 43
billion yen or a 1.6% increase when compared with the same period of last year.
<Operating Income>Through new depreciation of goodwill through M&As, operating income was 17.4
billion yen or a 9% increase when compared with the same period of last year. For
existing business, we saw a 6.4% increase when compared with the same period of lastyear, and the result was 17 billion yen of operating income by efficient use of SG&A
expenses and the control of R&D expenses.
<Ordinary Income>Though impacted by the interest payment due to increased short-term loans alongwith acquisitions, ordinary income was 16.9 billion yen, an increase of 34.4% whencompared with the same period of last year. Existing business experienced a similar
impact, but ordinary income was 16.4 billion yen or a 30.7% increase when comparedwith the same period of last year.
<Net Income>
Affected by the tax payment for goodwill depreciation, net income in the quarterremained at 9.8 billion yen, an 11.1% increase when compared with the same period oflast year. For existing business, the figure was 10.4 billion yen, an increase of 18.2%
when compared with the same period of last year.

-3-[Terumo Corporation] Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2012: Reference

Next, net sales results by business segments are as follows:Business Segments(Unit: millions of yen)
Q1 FYE Mar. 2011

Q1 FYE Mar. 2012

ChangesResults

Results%Business Segments

Changes %(Constantcurrency basis)

Net Sales

37,12036,498

(1.7)

(0.7)

(Japan)29,75329,117(2.1)(2.1)(Overseas)

7,367

7,381

0.2

4.9

Net Sales

36,51339,6358.6

13.8(Japan)

9,562

11,92324.7

24.7(Overseas)

26,951

27,7122.8

9.9

Net Sales

6,455

6,103(5.5)(2.0)(Japan)2,588

2,338(9.7)(9.7)(Overseas)

3,866

3,765(2.6)

3.2

Net Sales

803

1,133

41.0

42.5

(Japan)64187536.5

36.5(Overseas)

162257

58.5

66.2

General HospitalBusinessCardiac & VascularBusiness

Blood Management
Business

Consumer Healthcare
Business(Note) The results of BCT and Harvest are excluded.

<General Hospital Business>
In Japan, semi-solid nutritious foods, our major product in the chronic care market,
and contract manufacturing business in the field of Drug & Device (D&D) contributed
to an increase in sales. On the other hand, sales of some products including I.V.
solutions dropped, due to the earthquake, and total sales decreased when comparedwith the same period of last year.
Outside of Japan, infusion pumps and syringes enjoyed favorable sales in Latin
America, showing an increase in sales.
As a result, net sales of General Hospital Business decreased by 1.7% to 36.5 billion
yen when compared with the same period of last year.
<Cardiac & Vascular Business>
In Japan, drug-eluting coronary stent, “Nobori,” launched in May 2011 favorably
gained market share, and intravascular imaging catheter, “ViewIT,” sold well.
Outside of Japan, “Nobori” that has already been marketed in Europe, Asia, and Latin
America steadily increased its market share and sales, and in North and Latin America,
thanks to wider use of TRI (interventional system technique to approach the coronary
artery from the blood vessels at the wrist), interventional systems favorably drove
sales.
Consequently, net sales in Cardiac & Vascular Business for existing business-4-

[Terumo Corporation] Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2012: Reference

increased by 8.6% when compared with the same period of last year to 39.6 billion
yen.
<Blood Management Business>
In Japan, sales of blood bags resulted in a 9.7% decrease when compared with thesame period of last year.
Outside of Japan, “TACSI,” our automated centrifuge & separator integration system,
saw favorable growth in Europe.
As a result, net sales of Blood Management Business in existing business decreased
by 5.5% to 6.1 billion yen when compared with the same period of last year.
<Consumer Healthcare Business>
In Japan the repercussion of the increased demand for digital thermometers due to thepandemic of the H1N1 flu two years ago ended, and net sales increased to 1.1 billion
yen, representing a 41.0% increase when compared with the same period of last year.
<2> Forecast for the Fiscal Year Ending March 31, 2012
Incorporating CaridianBCT and Harvest Technologies whose acquisitions werecompleted in April 2011 into estimated consolidated results and as yearly prospects
such as accounting associated with the integration and the impact of new products
upon financial results have become clear. We have revised “Forecast of theconsolidated financial results for the Fiscal Year ending March 2012,” which weannounced on May 11, 2011, as follows:
Forecast for the fiscal year ending March 31, 2012
(Full year)(Unit: millions of yen)
Revised Forecast

Net Sales

332,000

390,000

58,00018.8

Operating Income

65,00067,0002,0007.0

Operating Income Rates

19.6%

17.2%

－

－

Operating Income

66,50074,600

8,100

16.2

20.0%

19.1%

－－

Ordinary Income

63,00065,000

2,000

14.2

Net Income

40,00038,500(1,500)

19.1

Net Income Rates

12.0%

9.9%

－

－

Net Income

41,50046,100

4,600

35.9

12.5%

11.8%

－－

Excl. Amortization of Goodwill

Operating Income Rates
Excl. Amortization of Goodwill

Excl. Amortization of Goodwill

Net Income Rates
Excl. Amortization of Goodwill-5-

Changes

Changes (%)
year on year

Previous Forecast

[Terumo Corporation] Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2012: Reference<3> Summary of Statements of Cash Flows for the First Quarter of the Fiscal
Year Ending March 31, 2012
(Unit: millions of yen)
Q1 FYE Mar. 2011

Q1 FYE Mar. 2012

Results

Results

Net Cash Provided by (Used in) Operating Activities

4,220

8,534

Net Cash Provided by (Used in) Investing Activities(3,128)(223,957)

1,091(215,423)

Net Cash Provided by (Used in) Financing Activities(13,097)

216,497

Effect of exchange rate change on cash and cash equivalents(3,349)(962)

Net increase (decrease) in cash and cash equivalents(15,354)

111

Cash and cash equivalents at beginning of period

84,877

82,660Cash and cash equivalents at end of period

69,52282,771

Free Cash Flow

This English translation has been prepared for general reference purposes. The Company is not responsible for any
consequence resulting from the use of the English translation in place of the original Japanese text. In any legal
matter, readers should refer to and rely upon the original Japanese text of the tanshin (Financial Results) dated asof July 28, 2011-6-