This is Kitabatake and I will now explain the financial results for the fiscal year
ended March, 2016 and the guidance for the fiscal year ended March 2017.

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First, the overview of our results: As president Shintaku just mentioned, we achieved
significant increases in both sales and profit.
profit All of our net sales,
sales operating income
income,ordinary income, and net income turned out to be our highest‐ever results.
Regarding sales, we achieved the double‐digit growth globally in Interventional System
and Neurovascular businesses with growth of 5% in sales even when excluding foreignexchange effects.
In gross profit, we improved it by two percent points mainly due to expansion of sales ofhighly profitable products and improvement of manufacturing costs in the Cardiac and
Vascular Company, bringing gross profit margin up to 54.3%. When excluding foreignexchange effects, year‐on‐year growth also reached up to 10%.
In SG&A, our FY15 R&D expenses was 33.1 billion yen with 9% of year‐on‐year increase
when excluding foreign exchange effects, meaning that we made much stronger growthinvestments. However, as for operating income, we still achieved growth of 25% since
we were still able to absorb this higher level of investment with gross profitability
improvement.
We had most recently revised our FY15 operating income guidance upward to 80 billion
yen, but the final result ended up 1.7 billion yen above the guidance, reaching up to 81.7
billion yen. For the rest of the items on this slide, I will go into more detail on the next
page.

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In non‐operating income and loss, foreign exchange was the largest factor. In
particular, while we saw a positive foreign exchange impact in FY14, we were
negatively impacted in FY15. The negative effect was somewhat present throughthe third quarter, but especially large in the fourth quarter. The negative impact
through the third quarter was 2.4 billion yen, while the final result was minus‐
7.5‐billion‐yen.
Consequently, ordinary income was a modest 3% improvement year‐on‐year, but
extraordinary gains and losses were the opposite; after a large extraordinary loss
in FY14 due to the cost for EU restructuring, we experienced a large positive
impact in FY15 as a result of selling off land. Therefore, income before income tax
grew 20% positively year‐on‐year.
In net income, reduced tax burdens resulting from the revised tax code
contributed to a result of 50.7 billion yen, or 32% growth year‐on‐year. Our latest
revised forecast was 50 billion yen, but that increased by 700 million yen.

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This slide shows the positive and negative impacts on operating income. The
same pattern was evident through the third quarter. The largest positive impact
was the increase in gross profit due to an increase in sales. Others were cost
reductions and improvement of portfolio mix.
Regarding the foreign exchange impacts, we saw a small 0.9 billion yen ing
impactp throughg the third q
quarter,, but then the impact
p ggrew to 2.9 billion
negative
yen in the fourth. I will explain more about this later.

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This is the operating income variance analysis by company. This is also from thethird quarter, and shows the Cardiac and Vascular Company growing significantly
while also increasing expenditures. For other companies, with the aim of
improving profitability, we also controlled SG&A .

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I will now explain the impacts of foreign exchange on operating income. The upper part of this slide shows the currency sensitivities’
trend.
First, regarding the dollar, since our dollar‐denominated expenses increased, overall foreign exchange impact was more or lessneutral. In addition, our amortization is also in dollars, so when the yen appreciates it has a positive impact on operating income;this is opposite from the euro’s impact.
Regarding the euro, we downsized production there, but saw an increase in euro‐denominated sales, resulting in escalation ofsensitivity.
The largest impact came from emerging countries’ currencies. In those countries we saw increased sales and recent significant
depreciation of local currencies.
The actual numbers are as follows: From the first through third quarters, the dollar appreciated while the yen depreciated. Despite
the depreciation of yen, we only had a small negative impact of 0.8 billion yen. In the fourth quarter, however, the dollar
depreciated while the yen appreciated, resulting in a positive impact of 1.1 billion yen.
Throughout FY15, the euro depreciated while the yen appreciated, and we saw a similar pattern in the first through third, and thenfourth quarters, resulting in a negative impact of 2.5 billion yen.
Regarding the Chinese yuan, the yen depreciated through the third quarter, and then appreciated in the fourth quarter against theyuan. The first three quarters saw 1.8 billion yen in positive impact, and the fourth saw negative 1.1 billion yen, for a total of 0.7‐
billion‐yen positive impact.
Another example of emerging country currency is the Thai baht, which you see here; it showed a similar pattern, with yen
depreciating against the baht in the first and second quarters, and then appreciating thereafter.
Overall the first three quarters had relatively little impact. However, due to an overall depreciation of currencies, the fourth wasmuch more significant with negative impact of 2.0 billion yen.
This same pattern is evident throughout this fiscal year’s guidance, and I will touch on it again later in the presentation.

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This next slide shows sales by region. The trend is steady through the third
quarter. Japan ended up at plus 2%. Cardiac and Vascular and General Hospitalwere positive, while Blood Management was negative.
Excluding Europe, non‐Japan sales grew in double digits. Our reduction in
European business and euro depreciation were negative impacts.

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Looking by company, we see that similar to previous results, the Cardiac and
Vascular Company was the largest driver.

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The Cardiac and Vascular Company followed its usual pattern, with strong growthin overseas Interventional Systems and Neurovascular business, Sales grew as
well, business profitability improved four points year‐on‐year, from 21% to 25%
mainly due to the sales expansion of “Ultimaster”.

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In the General Hospital Company, the downsize of low profit business I havementioned had a 3.5‐billion‐yen negative impact.
However, in the Japan, China, and other Asia markets, infusion system sales grewsignificantly, bringing overall company results back to approximately the samelevel as the previous year.
Profitability, on the other hand, increased partly with a decline in raw material
costs due to low oil price.

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In Blood Management, we have previously explained the large negative impact ofprice declines from the first quarter, particularly in the United States market. That
impact was small through the second quarter, but hit the company fully in the
fourth quarter. Sales grew 4% overall, but the price decline had a negative impactof 1.8 billion yen. Business margin also declined from 18% in the previous year to
16% in FY15.
Explained simply, this 2% point year‐on‐year business margin decline resulted
from 2% point in lowered price impact, 1% point of weaker euro impact, and thenother factors combining for a 1% point positive impact, adding up to a total ofminus 2% point.

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Next, I will discuss some topics from FY15.
Regarding corporate topics, in June, we established an audit/supervisory committee.
In February and August, we executed 61 billion yen of share buyback in total, and doing
so resulted in significant positive impact on ROE. I will later explain this in more detail.
We were also selected as the “The Health & Productivity Stock” and “Nadeshiko Brand”.
Our hollow‐fiber typed oxygenator won the “Okochi Memorial Prize”, which is thehighest of its kind.
Regarding business topics, these are products that we successfully launched in FY15, andwhich had significant business impacts.
impacts For example,
example “Misago”
Misago was the first Japanese
product gain a US PMA. “HeartSheet” was the first regenerative medicine product of its
kind to receive regulatory approval in Japan. We also launched “Ultimaster” in Japan,
and it has already had a large impact on income. There was also the intradermal
injection device receiving regulatory approval in Japan.

12New products in the pipeline are as shown, and most products listed have beenlaunched as scheduled.

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I will now explain our FY16 performance guidance.
Our FY16 sales plan is 517 billion yen, or minus 2% from FY15. Operating income
is 75 billion yen, or minus 8%. However, net income is 52.5 billion yen, or plus 4%
year‐on‐year. This increase in net income is due to a lighter tax burden that will
be realized at the end of FY16.
These planned numbers constitute negative growth in sales and profit. However,as I have explained, it is largely due to the expected negative impact of foreignexchange. Negative FX impact on sales is projected to be 31 billion yen, and 8.5
billion yen on operating income. Excluding FX impact, FY16 sales would be 548
billion yen, or plus 4%, and operating income would be 83.5 billion yen, or plus
2%.
Also regarding operating income, another factor that was not present in FY15 is
the 1.5 billion yen negative impact of the group pension fund, which is occurring
due to recent negative interest policies. Without these impacts, the operating
income would be 85 billion yen.

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These numbers are the FY16 guidance for each company, excluding FX impacts.
Cardiac and Vascular Company sales and business profit are projected tocontinue growing, with Interventional Systems and Neurovascular businesses
outside of Japan remaining the chief drivers.
The G
Th
Generall H
Hospital
i lC
Company will
ill continueiiits iimprovement off profitability.
fi bili
When the pension fund cost increase I just mentioned is excluded, 22.6 billion
yen in operating income rises to 23.5 billion or to 15% of business margin.
In Blood Management, the price declines in US started giving us the fullest
negative impact at the end of FY15, and FY16 will be the year in which thecompany feels the most negative impact. In the next fiscal year and beyond,growth in therapeutic apheresis and businesses in emerging countries is
expected to fully absorb that price decline impact.

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These are the variance analysis for FY16 operating income guidance. The increase in sales is expected tobe the biggest positive factor. Cost reduction and product mix portfolio will be other upward factors.
Negative factors will include price declines, including the Japan reimbursement price revision, which will
have a 5.2 billion yen negative impact. We will also have the negative effect of increased investment forsales force expansion in Interventional Systems and Neurovascular sales.
In FY17, we will begin implementation of a new mid‐ to long‐term plan. We think of FY16 as a launching
pad for realizing those plans.
When we exclude the effects of foreign exchange, we expect a continuation of good results, so rather
than greatly changing anything, we plan to maintain the positive momentum this year.
At the same time, we intend to make necessary investments this year toward the mid‐ to long‐term plan.
One part of this will be further expansion of sales force in Interventional Systems and Neurovascularbusiness, particularly in Europe and the United States, as well as by increasing field clinical staffs.
Another area of investment will be the Ashitaka Plant in Japan, which is the center of our new productdevelopment activities. There, we will increase the number of engineers by around 100.
One other area will be increased R&D expenses of interventional products for the Cardiac and VascularCompany.
With these activities we feel that we are planning a robust amount of investment in new productdevelopment.

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In FY15, the dollar and euro each had differing impacts against the yen. However,in FY16, we anticipate yen appreciation against all currencies. We anticipate 110
yen to the dollar, and 125 yen to the euro.
As I mentioned before, when we exclude goodwill amortization, the dollar impact
is approximately neutral, and when goodwill is included, the appreciating yenp
g income positively.
py Therefore,, as you
y can see here,, theactuallyy affects operating
respective dollar and euro depreciation impacts are expected to roughly offset
one another.
The larger impact will come from the Chinese yuan and other emerging countries
currencies. In total, we forecast a total negative foreign exchange impact of 8.5
billion yen onto operating income in FY16.

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The next slide explains our measure against foreign exchange fluctuation.
The area we watch most regarding foreign exchange impact is in specific markets andthe effect on profitability of yen appreciation. In other words, we will confirm whether itmakes sense from a profit standpoint to do business in a particular market in light of the
impact a strong yen can have against that market’s currency.
The specific measure to take in such markets is a shift toward high‐profitability
businesses. In the case of Europe, we have lessened our focus on General HospitalCompany products and placed more focus on Cardiac and Vascular products. This can beseen in the proportion of sales becoming more weighted toward Cardiac and Vascular
starting in FY14.
We will not only improve the overall business portfolio, but also continue working to
improve profitability in individual business areas that are currently less profitable. For
example, in the Latin America General Hospital Product business, we plan to shift from
low‐profit
lowprofit products to higher ones
ones. Compared with the FY14
FY14, FY16 guidance include 35%
decline in sales, but a 35% increase in profit, or a 13%‐point improvement of margin.
That is how we plan to mitigate foreign exchange impacts: By considering andimplementing the various improvement measures we can make in specific businesses.
We consider this to be most important key.

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Next, regarding ROE: This shows the ROE trend beginning in FY11. From FY11 to
FY14, we saw net income grew from 24.2 billion yen to 38.5 billion yen. However,ROE remained relatively static, going from 7.0% to 7.2% over that period.
The biggest factor behind that was increase in equity. There were two reasons forthe increase in equity: First, of course, is the increase in income, but second isgthat our dollar‐denominated asset of ggoodwill amortization had become larger
due to yen depreciation; this has grown over time. We decided in FY15 to takeaction on this, by conducting share buyback of total 61 billion yen.
This resulted in significant increase in ROE as well as a decrease in equity,
bringing ROE to 9.3%. Our forecast for FY16 is that net income will grow, equity
will decrease and ROE will increase to 10% since our dollar‐denominateddollar denominated asset
adjustment will decrease due to yen appreciation.

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Regarding dividends and earnings per share (EPS): In FY12, EPS was high due to a
special tax benefit, but excluding that anomaly, EPS has steadily increased. We
have made efforts to set the dividend payout ratio consistently near 30%, andthat has led to dividend per share also steadily growing.
Regarding dividend per share on FY15, We had planned to issue a 16‐yen
per share in both the first and second halves for an annual total of 32
dividend pyen, but with the good results of the first half, we decided to issue dividends per
share of 19 yen in the first and second halves, for a total of 38 yen. Eventually, in
response to the good results of the second half, we raised its dividend per shareto 20 yen, making for a final annual total of 39 yen.
As for dividend per share in FY16, with the net income projected to increase in
FY16, we are planning for a total annual dividend per share of 41 yen.

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The last slide shows the FY16 new product pipeline, and I will forego that
explanation.
That concludes my remarks.

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