[Terumo Corporation] Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2011: Reference

Financial Results for the Third Quarter of the Fiscal Year Ending March 31,
2011: Reference
Analysis of Business Performance<1> Overview of the Third Quarter of the Fiscal Year Ending March 31, 2011[1] Overview of Business Results
The global economy in the consolidated period during the third quarter (from April 1,2010 to December 31, 2010), displayed trends of a slow recovery driven by China andother Asian regions. However, uncertainty has persisted because of credit uncertainty
in European countries triggered by the financial crisis and the prolonged foreignexchange rate trend of the appreciation of yen.
Under such economic conditions, healthcare services around the world are now in aperiod of great transition. In emerging countries, improvement of the healthcare
infrastructure is in progress, driven by economic development, and an expansion indemand is anticipated in healthcare-related fields. Advanced countries, on the otherhand, face major challenges of securing financial resources for healthcare and thereduction of healthcare costs, as illustrated by harsher disputes in relation to thehealthcare reform in the U.S. Congress.
Under such drastically changing conditions, our group has paid attention to market
changes and developed business with unique products and services that can contributeto the “healthcare economics” by improving the quality of healthcare service andpromoting efficiency.
As a result, our performance in the consolidated period of the third quarter of thisfiscal year is as follows:< Net Sales >Though affected by the revision of drug and reimbursement prices, sales in Japan
reached 133.9 billion yen or a 0.6% increase compared with the same period theprevious year. Overseas experienced effect by the appreciation of yen: however, thenet sales increased by 15.1% on the constant currency basis compared with the same
period the previous year, resulting in double-digit growth in each region, including
Europe, the US, and Asia.
As a result, the consolidated sales in Japan and overseas were 244.2 billion yen, or a
2.2% increase.

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Geographic segments(Unit: millions of yen)Area

Q3 YTD Mar. 2010

Changes %Q3 YTD Mar. 2011
Changes%Results(Constant currency basis)

ResultsJapan

133,134

133,891

0.6%

0.6%

Europe41,98941,079(2.2%)

14.2%

Americas39,82542,041

5.6%

13.8%

Asia and others

23,94827,229

13.7%

18.9%

Total of Overseas

105,763

110,349

4.3%

15.1%

Total

238,897244,241

2.2%

7.0%

<Gross Profit>
Such negative factors as the revision of drug and reimbursement prices and theimpact of the appreciation of yen exceeded the positive factors, including the shift tohighly profitable products, increase in the amount of products and cost reductions. Thegross profit rate dropped by 0.7 points to 52.1% compared with the same period theprevious year. Gross profit increased by 1.1 billion yen, thanks to the increase in theamount of products sold, and resulted in 127.2 billion yen.
<Operating Income>We efficiently controlled general administrative expenses in general, but as we
proactively made investments for growth including R&D expenses, SG&A expenses
increased by 3.0 billion yen compared with the same period the previous year, andoperating income was 48.1 billion yen with a 1.9 billion yen decrease compared withthe same period the previous year.
<Ordinary Income>Ordinary income was greatly affected by foreign exchange losses with the appreciationof yen and was 42.9 billion yen or a 14.8% decrease compared with the same period
the previous year.
<Net Income>Net income was a 13.7% decrease compared with the same period the previous year,
resulting in 27.5 billion yen.

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[Terumo Corporation] Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2011: Reference

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

Business Segments

Q3 YTD

Q3 YTD

Mar. 2010

Mar. 2011

Results

Results

Changes %Changes% (Constantcurrency basis)

Net Sales

114,515

115,669

1.0

2.7(Japan)91,86793,427

1.7

1.7(Overseas)

22,64822,241(1.8)

7.0

Net Sales

101,317

106,785

5.4

13.7(Japan)29,44029,791

1.2

1.2(Overseas)

71,87776,993

7.1

18.8

Net Sales

17,921

18,4382.9

8.5(Japan)

7,195

7,784

8.2

8.2

(Overseas)

10,725

10,654(0.7)

8.8Net Sales

5,142

3,347

(34.9)(34.5)(Japan)

4,630

2,888

(37.6)(37.6)(Overseas)

511

459

(10.2)(6.0)

General HospitalBusiness

Cardiac & VascularBusiness

Blood Transfusion
Business

Consumer Healthcare
Business(Note): The amounts of the same period in the previous year in this table are
rearranged to compare with the results of this period.
<General Hospital Business>
In Japan, we enjoyed good sales of infusion devices with added value for theprevention of medical accidents and infection risk reduction in addition to new blood
glucose monitors. The effect of development in the chronic care market, which we
started to address this year has gradually emerged, and our key product, semi-solid
nutritious food had a large increase in sales.
Overseas, syringes, infusion sets, and other general hospital products sold well,increasing the total amount of sales.
As a result, sales of the General Hospital Business resulted in 115.7 billion yen or
1.0% increase compared with the same period the previous year.
<Cardiac & Vascular Business>
In Japan, intravascular ultrasound imaging catheters used in the treatment of Angina
Pectoris, “ViewIT,” and PTCA balloon catheters, “Tazuna,” continued to enjoy goodsales, and a new product jointly developed with Olympus, “VisiGlide,” continued tohave an increase in sales ever since its launch in April 2010.
Overseas, sales increased, in mainly interventional systems. Drug-eluting coronary-3-

[Terumo Corporation] Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2011: Reference

artery stent, “Nobori” enjoyed positive sales in Europe, Asia, and other regions, whileinterventional systems used for TRI (Trans-Radial coronary Intervention) increased
sales in the U.S. In China, interventional systems continued to sell well to drive sales,
and we saw a double-digit sales on a constant currency basis in all regions including
Europe, the U.S, and Asia and others.
As a result, sales in the Cardiac & Vascular Business increased by 5.4% comparedwith the same period the previous year and were 106.8 billion yen.
<Blood Transfusion Business>
Sales of blood bags increased in Japan, while blood separators enjoyed increased salesin Europe. Our automated centrifuge & separator integration system “TACSI” that
contributes to the improvement of operational efficiency at blood centers steadily
expanded its area of sales.
As a result, sales of the Blood Transfusion Business increased by 2.9% compared withthe same period the previous year to reach 18.4 billion yen.
<Consumer Healthcare Business>
Last fiscal year in Japan, there was an increase in demand for digital thermometers dueto the pandemic of the new H1N1 flu, but this year we were affected by its backlash,and sales in the Consumer Healthcare Business reduced by 34.9% to result in 3.3billion yen.
<2> Forecast for the Fiscal Year Ending March 31, 2011
Forecast for the fiscal year ending March 31, 2011 is on hold.

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