I, Kitabatake, will now explain our financial results for the period ended March 31, 2018.
First, financial results are expressed on an IFRS basis beginning with this period.

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The increase and decrease percentages shown are IFRS‐based. The next slide explainsdifferences between IFRS and JGAAP figures; here I will explain our results on an IFRS basis.
The earnings overview is that we achieved our highest‐ever results in revenue and all profit
categories.
In revenue, all businesses of the Cardiac & Vascular Company grew in double digits. Both newlyacquired and existing businesses grew significantly.
In profit, we will be following as our main profit indicator “Adjusted Operating Profit,” rather
than the previous “operating income.” Our variance analysis will also be based on adjusted
operating profit. In profit, we see a large increase in R&D spending for year‐on‐year growth of28%, and other expenses have increased a lot as well, but revenue increased even more
drastically, bringing operating profit up by double‐digits.
The FY17 profit for the year number also includes a one‐time positive impact of 15.3 billion yen
resulting from the United States tax reform. The profit amount rose even more as a result of that,making the year‐on‐year profit growth an extremely high 66%.
Therefore, the overall FY17 earnings result can be summarized this way: In addition toimprovement of existing business, the integration of acquired businesses went smoothly, andshowed in positive numbers.

2Here we have organized the main impacts on Terumo of the differences between JGAAP andIFRS. There is a lot of detail here, but there are two main impacts.
One is the handling of expenses; you can see this represented by the green arrows. A part ofthese is the shift toward the cost of sales. The result of the change to IFRS is that grossprofitability is worse than it was in JGAAP.
However, when operating profit is calculated, it returns to the previous level. The operating
profit does not change, but the gross profitability does appear worse. Another factor shown
here is represented by the dotted green lines.
This expresses non‐amortization of goodwill. This has a positive impact on profit. It is also thelargest impact.
Another part is shown here as grants related to R&D; this changes under IFRS to "other incomeand expenses."
In JGAAP, this was handled by subtracting from the amount of R&D spending, but changes underIFRS to other income and expenses. As a result, the new R&D spending amount increases. Thisis because the previous subtraction does not happen to account for grants. However, theoperating profit number returns to the same amount. Next is business taxes. Business taxes go
into the income tax expenses shown at the bottom.
This results in a positive impact on operating profit, but it is only a miniscule amount, so you canthink of the impact as inconsequential. In this period, the profit for the year number therefore
appears the same as previously. That is the expense‐related group of changes.
The other group, shown in blue here, is non‐operating income and expenses, and extraordinary
income and expenses; this comes above the operating profit in IFRS. Under JGAAP previously,3

we handled one‐time or non‐operating income/expenses and extraordinary income or expenses
after calculating operating income, but under IFRS most of these will come up to be included in
the operating profit number. This means that operating profit will be impacted by one‐timeoccurrences, and simply looking at operating profit may be insufficient to truly see the strength ofthe business. Some non‐operating income and expenses such as financial income and costs will
be calculated after IFRS operating profit. One of these is FX gains and losses. Therefore, FX
impacts will be handled after operating profit as was done previously. These are the major waysin which the handling of non‐operating and extraordinary income and expenses will be handled.
These two areas I have explained have a lot of impact. Of course there are many smaller itemswith impact.
However, these major two are the ones I would like you to remain aware of.

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On this slide you can see Adjusted Operating Profit. As I mentioned, IFRS operating profit
includes a great deal of what were non‐operating and extraordinary income and expenses underJGAAP. Therefore, when a major one‐time event occurs going forward, it may have the effect ofdistorting the actual strength of the business.
For this reason, we will be following as our main profit indicator this Adjusted Operating Profit. Itis quite similar to the "operating income excluding goodwill amortization" that we have used as
an indicator previously. They can be thought of as essentially the same.
There is a difference in just one item. Specifically, IFRS operating profit includes the amortizationof intangible assets obtained through acquisitions, although it does not include goodwill, which isexcluded. We will also be excluding from adjusted operating profit the one‐time income andexpenses that were included in non‐operating and extraordinary income and expenses underJGAAP. The specific FY16 and FY17 numbers are shown here.

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As I mentioned, this profit variance analysis is a breakdown of adjusted operating profit I justdescribed.
The increase in gross profit and price erosion are the same, and unchanged from ones withJGAAP. However, we do have some differences in gross profitability, increased sales investment
cost, and increased R&D cost; Regarding these: First, acquisition‐related costs are handled
differently and therefore excluded here. Next, goodwill and acquired intangible assets arehandled differently. There are also more detailed items that move when comparing IFRS andJGAAP, so there is a one‐time transition of these items that results in differences.
However, in terms of seeing the ongoing earnings power of the business, looking at this analysis
will still provide the same understanding as before. With that, we see in the FY17 overview thatgross profit increased due chiefly to increased revenue. However, when we compare thisnumber with that of the 3rd quarter, it increased slightly less in the 4th quarter than it did in the3rd. This is because we began including AngioSeal revenue starting in the 4th quarter last fiscal
year, and with 4th‐quarter AngioSeal revenue somewhat the same this year as the previous year,
the upward impact is less. That is the source of the revenue growth slowdown that one might
sense here.
On the other hand, sales force investment and R&D spending increased significantly in the 4thquarter. As you can see in the quarterly numbers in the back, this has increased.
As I have mentioned previously, the portion of spending that was slow to happen in the first halfshows up in the 4th quarter numbers.

5The previous pattern of revenue by region is unchanged.
Japan had a slight increase and regions outside Japan posted double‐digit growth. One point I
would like to mention is the impact of AngioSeal revenue: It might be asked why AngioSeal
strongly pushed up revenue, but there was only a slight increase in Japan. The reason is thatAngioSeal has been primarily used in Europe and the United States, whereas the usual treatment
in Japan is TRI. Femoral treatment, with which AngioSeal is used, accounts for a mere 10% oftreatments in Japan, so its contribution there is small.

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The numbers by company show that, as usual, the Cardiac & Vascular Company is growing
rapidly. Blood Management also grew in double digits. General Hospital grew slightly.

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Cardiac & Vascular Company saw strong growth in both its existing and acquired businessrevenue, which resulted in a large increase in operating profit.
The operating profit is expressed here as adjusted operating profit, as I have explained. This canbe viewed as essentially the same as the business profit that we previously tracked.
All four divisions are growing in the double digits, and the highest growth is actually in Vascular,
where the acquisition of Bolton had the effect of a 50% year‐on‐year revenue increase.
In FY18 we anticipate that the TIS and Neurovascular businesses will continue their high growth,
while CV and Vascular, will of course not grow at the same rate they did in FY17, but instead
slow down.

8Here is General Hospital Company.
General Hospital revenue was anticipated to grow 1% in the guidance; that number came inslightly lower, but profit ended up growing 9%, strongly outperforming the guidance of 3%.
One other thing I want to mention regarding General Hospital earnings is that the operating
profitability is up to 17%. As you are aware, the General Hospital Company saw its operating
profitability drop to a low 13% in 2013, and the company focused thereafter on improving
profitability. Those efforts have resulted in a gradual increase, and our current mid‐term plan
includes continuation of that improvement, with a target of around 17%.
However, since the 17% profitability target has been realized early in this past fiscal year, we will
pivot to doing some investment in growing the top‐line revenue in the General HospitalCompany as has been done in other companies, while also continuing to work on further
improving profitability.
In recent years, General Hospital has sacrificed some revenue in order to improve profitability,
so the timing is right to now grow revenue as well.

9In Blood Management, revenue is growing well, but there is one point to explain, in adjusted
operating profit.
As you can see here, in the previous fiscal year operating profitability was 16%, and then 14% in
FY17. Despite that apparent decrease, the headline is "gaining back momentum." The reasonsfor the apparent drop are two: The transition to IFRS is the first.
The reason lies in capitalization of R&D spending. In IFRS, some R&D spending turned into anasset. Between FY16 and FY17, the amount capitalized is quite different, with the FY16 amountmuch larger. That portion did not impact the Japanese accounting, but in IFRS that expense
amount drops. With that large decrease and this small decrease, the FY16 number comes out
much better than the FY17 one. However, if we view this under JGAAP accounting, both arearound 14% profitability. In other words, a major factor in this change from FY16 was thedifference in capitalization amount.
One other item to explain is that FY17 looks good under JGAAP up to the 3rd quarter. While it
was higher by 1% point under JGAAP, we now see it as the same. The reason for this is a one‐time expense in the 4th quarter. It involves the transfer of production from an American factoryto the Vietnam factory. A project was begun to reduce costs and raise efficiency. In the 4thquarter, consulting fees, inventory amortization, and similar expenses occurred as one‐timecosts, resulting in this one‐point loss of profitability.
These reasons—the IFRS transition and one‐time expenses in the 4th quarter—are why we say
the business is actually still gaining momentum.

10Next, we have the major topics from FY17; in the 4th quarter we had some items which fit
Terumo well.
We were selected for the 4th straight year as a Health & Productivity Stock. We won two awards
for our internal program to provide employment support for cancer patients, from the Ministryof Health and the Tokyo Metropolitan Government.
Some topics in businesses are about the strengthening of production development that Mr. Satomentioned is happening under his new management team.

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Here is the FY17 new product pipeline. Some items moved into FY18, but on the whole we feelthat progress is steady.

12Our guidance for FY18 is 3% top‐line growth, 5‐point operating profitability growth, and 3%
adjusted operating profit growth.
These numbers are much lower than the previous fiscal year. One major factor behind this is thelack of acquisition effect that we saw in FY17. Another factor is that there is an reimbursement
price revision this fiscal year in Japan.
From a revenue perspective, the reimbursement price revision has an impact of more than 5billion yen. This is approximately a 1% change. An appreciating yen results in an approximately
2% impact. Therefore, when adjusting for the reimbursement price revision and FX impacts, this
3% becomes 6.4%. Our view of revenue growth, in other words, is that it will grow 6.4%
organically.
In profit, we anticipated operating profit to grow at 11% and adjusted operating profit at 8%,
when excluding the reimbursement price revision and FX impacts.
Further, there is a decrease in profit for the year, but this is because the previous year's amountincluded the one‐time 15.3 billion‐yen boost from the United States tax reform; when that isexcluded, profit for the year grows 10%.
That is why, when we exclude the aforementioned factors, we feel that we will be growing on anorganic basis.
Also, the two‐year period of FY17 and FY18 within our mid‐term plan represent in our view a13

period of large business growth.

13Here is the profit variance analysis.
One thing I can say about the variance analysis is that the main factor behind FY18 operating
profit growth will be increased revenue. In other words, gross profit growth due to increasedrevenue. This is the largest factor.
Price erosion is especially large due to including the 5‐billion‐yen impact of the Japan
reimbursement price revision.
In addition, we are anticipating significant increases in SG&A, sales investment, and R&D
spending in this fiscal year.
For example, the increased investment in sales will include strengthening the sales force
required to sell the WEB product we acquired in the Sequent Medical purchase in FY16, and thestent graft product of Bolton.
In R&D spending, we have various trials underway, for which we anticipate significant cost
increases. This expected increase is similar in size to that of FY16, so you can view thesenumbers accordingly.

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Commenting by company, one point is that Cardiac & Vascular revenue growth is 5%. That iswith most of the 5‐billion‐yen impact of the reimbursement price revision hitting the Cardiac &Vascular Company. The FX impact, and, as I mentioned, the slowdown of the CV and Vascularbusinesses are also included in that 5%.
Regarding General Hospital, operating profitability drops two points. The factor behind this is thebeginning of amortization of the Yamaguchi factory expansion, which we have undertaken tomeet the demand of the Alliance Business. R&D spending is increasing for businesses such asAlliance and DM, and up‐front investments for these are included in the guidance. We areconfident that the revenue resulting from these investments will cover the costs going forward.
In Blood Management, we anticipate a two‐point improvement in operating profitability, as I
explained earlier. In revenue, the FX impact, and temporary replacement demand for next
generation therapeutic apheresis in FY17 will result in a slight revenue decrease.

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Here is our FY18 product pipeline. This fiscal year, the new DES Ultimaster Tansei will come out
in the 2nd half.
Also, the peripheral products that were slightly delayed last year will come out this fiscal year.
We will launch a next‐generation oxygenator this fiscal year as well.
As you can see, we have a lot of new products coming this year. Not all will have immediate
impact, but we are confident in launching a robust pipeline of products going forward.

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We announced this week that we have acquired the exclusive distribution rights to the Dexcom
CGM product in Japan, and this will contribute to revenue starting in the second half of this year.
In this DM business we previously sold single products such as the SMBG, and the very narrow
Nanopass needle for treatment; last year we obtained Japanese regulatory approval for thepatch pump.
In addition to these, we then added this CGM product of Dexcom's. Going forward, we are
studying a collaboration to integrate the CGM with pump products as a system solution.
This is all to illustrate that the DM business of the General Hospital Company is shifting from amodel of single‐product revenue to becoming a total solutions provider. To do so, the businesswill strengthen its product development and sales force across the mid‐term.

17Finally, regarding dividends: we initially announced a dividend of 22 yen for the interim dividendand 22 yen for year end. However, at the time of the interim dividend, we increased these to 23
yen and 23 yen, respectively.
Taking into account factors including the jump in results we saw for FY17, we have raised theyear‐end dividends to 27 yen.
Regarding this FY18, due to the bar being raised, and although the net income guidance isactually a decrease, we do see that decrease being the result of the previous fiscal year's one‐time occurrences, so we have increased the dividend guidance to 27 yen and 27 yen, for a totalof 54 yen.
Thank you for your attention. This concludes my explanation.

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