2Toshihiko Osada
General Manager,
Strategic Planning Department© Terumo CorporationCorporateStrategy
Dec 12, 2016

Outlook: Medtech Industry
Global medtech market: Forecast to grow at a CAGR of 5-6%
for the next 10 years, with market size of 60 trillion JPY
Environment changes

Market Size(Trillion Yen)

• Increase in demand,
focus on efficiency

16• Tighter regulation,
intensified competition7• Aging population,
fiscal constraints

3• Healthcare as growthstrategy for the economy2• Growth with tiers% to marketat 2025

2016
2025

Expected
Growth %40%

4.9%17%

4.7%

46%

3.2%

58%

9.9%

2%

9.1%

24100.51

Source: Espicom, IMF, Statistics of Production by Pharmaceutical Industry, Terumo analysis© Terumo Corporation

Dec 12, 2016

1/10

Healthcare Reform
Environment Change

Healthcare Reform

Increased healthcare demand• Aging society• Chronic diseases

Volumeto value

Financial pressure• Control of healthcare expenditure,
increased price pressure• Emphasis on value and efficiency
Technological advancements• Digital technology, new entrants
from other industries• Regenerative medicine anddiagnostic technologies

Integratedhealthcare© Terumo Corporation• Quantify value• Improve efficiency inhospital management• Align within and acrosshospitals• Improve diagnostic
and service efficacy
Dec 12, 2016

2/10

Turn to Industry Consolidation as a Growth Opportunity
Global Trend

Growth Opportunities

Concentrated, oligopolized
mega-markets

Greater opportunities in themedium-scale segments

Mega-competitors focused ontherapeutic products bundling

Provide comprehensive
treatment process solutions

Divestiture of businessthrough mega-mergers

Potential M&A opportunities© Terumo Corporation

Dec 12, 2016

3/10

Terumo Strategy: Win in Selected Strategic Markets
Offer specialized and superior products• Technologies to develop cutting-edge products

Competitive• Create and expand “Must Have”
Advantage Interventional access products and devices for pharma companies

Strategy

Select growing segments and segments where Terumo
owns a competitive advantage
Concentrate on interventional, neurovascular, D&D, andtherapeutic apheresis© Terumo Corporation

Dec 12, 2016

4/10

Terumo Strategy: Offer Comprehensive Value in Japan
Deliver a diversified product portfolio• Collaborative effort of engineering, production and salesCompetitive• Wide range of access to Japan’s healthcare needsAdvantage• Established distribution network

Strategy

Leverage leading position and pursue growth opportunities© Terumo Corporation

Dec 12, 2016

5/10

Terumo Strategy: Accelerate Innovation
Collaborative effort between in-house engineering and open Innovation• Globally spread innovation centers
Competitive • Wide range of core technologies such as coating andmicrofabrication
Advantage• Shift to the new way of engineering (Biodesign, etc.)

StrategyContribute to future of healthcare with significant social impact
Advance core technologies and gain new technologies© Terumo Corporation

Dec 12, 2016

6/10

Mid- to Long-term Growth Strategy

Win in Selected
Strategic Market

Select growing segments
and segments whereTerumo owns acompetitive advantage

Offer
Comprehensive
Value in Japan

Accelerate
Innovation

Leverage the leading
position and pursue
growth opportunities

Contribute to future ofhealthcare withsignificant social impact© Terumo Corporation

Dec 12, 20167/10

Growth by Transforming Portfolio and Globalizing
Business Sales Breakdown
7%

Plan FX rate: USD=105 JPU, EUR=115 JPY

Blood Management
18%

20%
36%

57%

49%
31%

Cardiac and Vascular
55%
General Hospital
27%

Regional Sales Breakdown
40%
60%

Japan30%

36%64%

FY05FY15© Terumo Corporation

Outside Japan
70%

FY21
Dec 12, 2016

8/10

Achieve Profitable and Sustainable GrowthManagement Indicators for the next 5 years
Plan FX rate: USD=105 JPY, EUR=115 JPY

GrowthProfitabilityEfficiency

Faster revenue growththan market growth

Faster profit* growththan revenue growth

Maintain
ROE 10%+***High single-digit
GrowthDouble-digit
GrowthAdjusted EPS** 270 – 300 Yenby FY21

*Adjusted operating income (IFRS)**Adjusted items: Intangible asset derived from acquisition, one time acquisition expense, impairment, gain/ loss from sales of stocks and others*** Excluding foreign currency translation adjustment balance related to the assets from acquisition included in net assets.
© Terumo Corporation

Dec 12, 20169/10

Cash Allocation
CAPEX
200 - 250 B JPY

Accumulated
Operating Cash Flow
(FY17-21)

Dividend
100- 150 B JPY

500 - 600 B JPY

Financial arrangement© Terumo Corporation

M&As andshareholder returns
200+ B JPY
Dec 12, 201610/10

© Terumo Corporation

Disclaimer
The information that Terumo discloses and 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 offuture events or performance. Accordingly, it should be noted that actual
results may differ from those forecasts on projections due to various factors.
Factors affecting actual results include, but are not limited to, changes in
economic conditions surrounding Terumo, fluctuations of foreign exchange
rates, and state of the competition.
The market share information in this presentation is partly derived from ourown independent research.

© Terumo Corporation

Dec 12, 2016