I will now explain the results for the third quarter of the fiscal year ending March 2016.

1

First, please refer to page 2, which contains the results overview. We maintained goodresults
l iin theh fi
first andd second
d quarters, andd theh third
hi d quarter was a goodd result
l as well.
ll
As of the end of the third quarter, the year-to-date revenue, operating income, ordinary
income, and net income are all our best results ever.
The actual numbers are as follows: Revenue is at 396 billion yen, for a 9% increase.
Gross profit is 214.6 billion, for a 13% year-on-year increase. The primary factors behindgross profit outpacing revenue in growth were Neurovascular and Interventional Systems
b ibusinesses.
O
Operatingti iincome expanded
d d 21% tto 64
64.1
1 billibillion yen. Wh
When excluding
l digoodwill amortization, operating income was 79.4 billion yen, or 20.1% of revenue. Thismeans we made solid progress toward our goal of 20% operating margin, excluding
goodwill amortization. As of the third quarter, we have achieved that 20% operating
margin level.

2In ordinary income, we saw a smaller rate of growth, at 4%, and this was due to foreignexchange
hrate iimpact. IIn theh third
hi d quarter off 2014
2014, we posted
d FX gain
i off 8
8.1
1 billibillion yen.
This fiscal year, we posted a 2.4-billion-yen FX loss, or a total swing of over 10 billionyen.
On the other hand, our extraordinary gains and losses have swung the opposite
direction: Last fiscal year, we recorded an extraordinary loss of 6.4 billion yen forexpenses incurred transforming the Europe business portfolio, but during the secondquartert thisthi fiscal
fil year we had
h d an extraordinary
tdigaini off 4.4
4 4 billion
billi yen ffrom th
the salel off
land in Hatagaya, Tokyo, amounting to a positive 10-billion-yen swing.
In the area of taxes, Japan’s corporate tax rate was revised, resulting in our tax burden
decreasing from 36% to 33%. These factors I have explained combined for a 30% higher
net income of 43.5 billion yen.

3I will now discuss operating income. Similar to the second quarter result, the growth ofgross profit
fi throughhh revenue expansion
i was theh llargest contributing
ib i ffactor. IImprovementof gross profit also increased through cost reduction. There were three main factors
behind cost reduction: First, increased Ultimaster sales. Second, reduced raw material
cost due to low oil prices. Third, the effects of increased production. These threeaccounted for 7.8 billion yen in positive effect. Increases in SG&A due to strengthened
sales organization and lower prices remain as we reported in the first half.

4This shows our operating income variance by company. We created this to illustrate how
theh current T
Terumo strategy iis playing
l i out.
Cardiac & Vascular is the company that drives our growth, and is expanding its grossprofit significantly. We are investing resources in a way that supports this growth-driverrole, and faster than any of our companies.
The General Hospital Company strategy is currently focused most on improving
operating profitability by increasing gross profit and controlling SG&A.
We are also allocating resources—an increase of 1.9 billion yen—to the BloodManagement Company, especially for the new field of cell therapy.

5Next, regarding foreign exchange: The yen depreciated against the dollar butappreciatedi d againstitheh euro. IIn emerging
i country currencies,itheh yen ddepreciatedi dagainst the yuan but appreciated against currencies of Latin America. This unevencurrency situation has made it difficult to understand foreign exchange effects.
In revenue, we saw improvement from yen depreciation against the dollar. Yen
appreciation against the euro had a negative effect on revenue, but operating income
was more affected by the dollar in areas such as goodwill amortization. Excluding thiseffect,
ff t we saw an approximatei t increasei
off 1 billion
billi yen, bbutt whenh counting
ti it
it, we hhadda
more negative 800 million yen. Alone, appreciation against the euro had a 1.6-billion-yen
negative effect. Depreciation against the yuan led to a total of 1.8 billion yen in positiveeffect, reflected across revenue and manufacturing. Emerging market currencies,
especially those of Latin America, had a 300-million-yen negative effect. All told, thesecurrency effects totaled 900 million yen in negative effect.

6

Next, revenue by region. The patterns we saw in the first and second quarters remainunchanged,hd though
hh JJapan saw a smallll iincrease. R
Regionsi
outsideid JJapan grew iin ddoublebldigits. Europe was negative, due to the effects of business portfolio transformation andforeign exchange. Other regions outside Japan achieved large, double-digit growth.

7Next, revenue by company. This, too, remains generally unchanged from the first twoquarters. Cardiac
C di & VVascularl grew even more, reachinghi a 10% growthh rate.
From slide nine onward, I will give an overview of each company.

8

I will now discuss the individual companies.
The Cardiac & Vascular Company saw large increases in revenue, business profit, andbusiness profitability. Growth continued in revenue especially, with Interventional
Systems products outside Japan and Neurovascular products in North America serving
as drivers, in addition to the China market. The TRI interventional products in particulargrew significantly in North America.
To explain a little further, we have focused on TRI and a key growth factor for Terumo inNorth America. Up to last fiscal year, though, it had stalled some after reaching 25%
penetration. However, during this fiscal year TRI penetration has begun to rise once
again, reaching approximately 40% recently.
As we have announced, we undertook drastic improvements in our China distribution
network As a result,network.
result we have expanded our reach from the previous focus area of Class
3 hospitals in coastal cities to more inland-city Class 3 hospitals and coastal-city Class 2hospitals. This is a major factor behind the positive China results we are seeing thisfiscal period.
In income, the Ultimaster launched on October 1st in Japan and has started out well,while it also continues to grow globally. The Neurovascular business also grew, leading
to major growth in business profitability—fromprofitability from 21% to 25%.
25%

9

Next, about the General Hospital Company: Revenue declined slightly in Europe due totheh bbusinessi
portfolio
f li transformation
fi we undertook
dk there,hwhichhi h lled
d to greatlyl iimproved
dprofitability but virtually flat revenue growth. This focus led to improvement of operating
profitability from 13% to 15%. Cost reduction measures at plants and the lower material
costs that come with dropping oil prices also contributed to the improvement we saw inbusiness profitability.

10The decline in prices that we mentioned at the beginning of the fiscal year was more orl
lesscompletedl ddduringi theh third
hi d quarter, so we will
ill see theh ffullll effects
ffoff thosehllower
prices during the fourth quarter.
However, sales of automated blood component collection and whole blood collection
products in developing countries grew in double digits, as did therapeutic apheresis andcell processing worldwide, contributing greatly to revenue. That concludes the companyspecific information.

11

Now, for other topics.
In the third quarter we revised our interim dividend, and then period-end dividend
forecast, form 16 yen to 19 yen.
In November we established the Terumo Corporate Governance Guideline.
We also had three products receive the Good Design Award.
Our new drug-eluting stent, Ultimaster, launched in Japan in October. Our HeartSheet
was approved for sale in the second quarter, and its reimbursement price wasdetermined in the third quarter.

12

Next, I will discuss our FY15 new product pipeline. Ultimaster, the biggest contributor
ffrom
theh pipeline,i lillaunchedh d iin JJapan one monthh earlierli thanh expected.
d13

Another item is that we have adjusted our year end guidance, with a press release today.
As you may know, we revised our guidance upward in September, but kept guidance
numbers for the second half unchanged at that time. Now, we have revised our guidance
further upward to reflect the third quarter results. However, we have maintained ourguidance of 525 billion yen in revenue while revising the operating income, ordinary
income, and net income 4 billion, 2 billion, and 1.5 billon yen, respectively. Please keep
in mind that ordinary income and net income may change due to foreign exchange rate
fluctuations.
Our expectations for the fourth quarter are that the fundamentally positive trends forInterventional Systems products outside Japan, and Neurovascular products, will remainunchanged. However, we do not expect the same high levels of performance in thefourth quarter that we saw in the third. One reason is that Ultimaster, which we launchedon October 1st, will see its first competitor hit the market in the fourth quarter, which will
have an impact that prevents a repeat of Ultimaster’s very high performance in the thirdquarter.
In addition, the Blood Management Company will see its first entire quarter with the full
effects of reduced prices, which completed their transition downward in the third quarter,
leading to the company experiencing less advantageous numbers in the fourth quarter.
We also anticipate effects from depreciating emerging country currencies.
Those are the factors we are considering in our fourth-quarter expectations.

14Finally, regarding the repurchase of our own shares, which was announced today. Between
February 5th and March 31st, we plan to repurchase 50 billion yen worth of our own stock.
The purpose of this is to improve capital efficiency, and we have discussed this matter internally
under our Corporate Governance Guideline.
This slide shows our ROE trend. Our net income has grown at a CAGR of 17%, from 24.2 billion
yen to 38.5 billion yen, but ROE has only increased slightly, from 7.0% to 7.2%.
Thoughg net income have ggrown, our equity
q y has drasticallyy increased. One factor behind this is thatyen depreciation combined with the dollar-denoted goodwill amortization created through ouracquisition of CaridianBCT has reduced profits. In addition, we have seen an increase in foreignexchange translation adjustment amounts due to yen depreciation. This was the result ofexpansion in the value of dollar-based assets obtained in the Caridian BCT acquisition as the yendeclined.
Our discussions therefore recognized the need to sufficiently take into account not only profits, butalso capital when considering ROE and EPS. As one part of that consideration, we made thedecision to repurchase 50 billion yen in shares.
However, our basic policy of prioritizing growth investment remains unchanged. Looking at thepast three years, we have proactively invested in acquiring technology and in ventures, to the tuneof 10 billion yen across five major deals. As announced in our recent press release, we are further
investing in the Dutch firm, and we will continue to invest in growth going forward.
As CAPEX decrease, we may see an accumulation of cash. We will maintain a balance between
growth investment and cash-on-hand as we further consider our capitalization strategy.
This concludes the results announcement explanation for the third quarter of the period ending
March 2016. Thank you.

15

16

17

18

19

20

21

22

23