Financial Results for the First Quarter ofFiscal Year Ending March 31, 2024 (FY2023)

August 9, 2023

Naoki Muto

Chief Accounting and Financial Officer
Terumo Corporation

Forward-Looking Statements and Use of Document
Among the information that Terumo discloses, 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 of future
events or performance. Accordingly, it should be noted that actual results may
differ from those forecasts or projections due to various factors. Factors affectingto actual results include, but are not limited to, changes in economic conditions
surrounding Terumo, fluctuations of foreign exchange rates, and state ofcompetition. Information about products (including products currently indevelopment) which is included in this material is not intended to constitute anadvertisement or medical advice.
©TERUMO CORPORATION

2 / 13

Highlights
Revenue
Strong global demand continued for highest-ever quarter
C&V and TBCT grew in double digits to drive the Group overall

Operating profit-1% YoY growth excluding FX. Steady progress toward annual guidance
Effects of profitability improvement accrued (price policy and cost reduction)

Shareholder return
Will execute 20B JPY share repurchase this fiscal year

©TERUMO CORPORATION

3 / 13

P&L
Revenue: Strong global demand continued; Double-digit growth by TIS, Blood center business,
Vascular graft to drive the Group overall
Operating profit: Price policy revision and cost reduction effects accrued. Expanded OPEX for therapeutic devices
100M JPY

FY22 Q1

FY23 Q1

YoY%

YoY% (FXN)

9%
8%

5%
5%

15%

10%

10%

6%

1,973
1,016

2,153
1,098（%）(51.5%)(51.0%)

566

651（%）(28.7%)(30.2%)

141

154（%）(7.1%)(7.2%)-63--304

296-3%-1%（%）(15.4%)(13.8%)

359

345-4%-4%（%）(18.2%)(16.0%)

297

298（%）(15.0%)(13.8%)

Revenue
Gross profit
SG&A Expenses
R&D Expenses
Other Income and Expenses
Operating Profit
Adjusted Operating Profit
Profit before Tax
Profit for the Year（%）
Average exchange rate (USD/EUR)©TERUMO CORPORATION

224

225

(11.4%)
130JPY/138JPY(10.5%)
137JPY/150JPY

4 / 130%1%

Margin Ratio Recovery from FY22 Q4
C&V: Cardiac and Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies

Quarterly Adjusted Operating Profit Trend
24.9%

23.5%

( ) FY23 Annual Guidance
Adjusted Operating Profit%

20.6%

C&V

14.3%
13.8%

TBCT
（8.1%）
Terumo*（15.5%）

6.4%

TMCS

(23.9%）

17.5%
11.8%
9.7%
8.6%

（10.3%）

4.9%

-5.1%

FY22 Q3©TERUMO CORPORATION

Q4

FY23 Q1
5 / 13* Operating profit% for Terumo

Operating Profit Variance Analysis(100M JPY)

PriceGross
G/P+13increment marginbyReimbur- SG&Asalessement
increasepriceR&D

G/P increment by sales increase
C&V and TBCT were drivers
Gross marginAbsorbed some inflation increase from
FY22 2H by cost reduction, productmix improvement

FXPrice
Global price policy revision progress

+7

SG&A
Strengthened investments for US
therapeutic devices sales expansion

FY22 Q1 FY22 Q1
OP
Adj. OP©TERUMO CORPORATIONFY23 Q1 FY23 Q1
Adj. OPOP

6 / 13

FX impact
1.4B JPY flow impact and -1.5B JPY
stock impact cancelled out one
anotherProfitability Improvements Included in FY23 Annual Guidance(100M JPY)©TERUMO CORPORATION

7 / 13

Price (= 1 Price policy)+12.0B

Gross margin+5.8B
Inflation-2.5B

Product mix improvement+1.7B

Temporary expense return tonormal+3.0B

2 VC2+3.6B

Profitability Improvement Progress
Q1 progress

1 Price policy

2 VC2 impact

2H2H

12.0B JPY Q2

Q1results
Revision©TERUMO CORPORATION

Q1 progress

3.6B JPY Q2

Reimbursement price revision
positive impact, along with
global price policy revision

Costa Rica transfer
cost reduction impact

Further impact through automation,

Expand to more products, regions
continuous impact expected

optimization and operations
improvement in Japan factories

8 / 13

Revenue by Region
C&V: Cardiac and Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies,
TIS: Interventional Systems, PS: Pharmaceutical Solutions

Revenue (100M JPY)
FY23 Q1
Regional
breakdown

34%

22%

21%
9%
14%

AmericasFY21
FY22
FY23544662740

FY23 Q1
YoY%( ) FXN

12%(6%)

Japan492499
475-5%Europe

345
386
444

15%(7%)

China

155
194
2003%(3%)

Asia andOthers

18223329426%(22%)©TERUMO CORPORATION9 / 13

Comments
TIS, Neurovascular, Vascular graft of C&V grew indouble digits as drivers. TBCT also grew in highsingle-digits
TIS, Vascular graft of C&V were drivers. TBCT even
YoY. TMCS saw temporary sales reduction due tosell-off of nutrition business, and PS delivery
fluctuations
All companies grew, with TIS and TBCT Bloodcenter business leading
Neurovascular saw sales reduction due to inventory
adjustment. TIS and TBCT were drivers
TBCT Blood center business won tenders for largesales increase. C&V, TMCS kept strong

C&V:

EU, US drove strong sales; profit progress as planned(100M JPY)

(C&V: Cardiac and Vascular, TIS: Interventional Systems)

Q1

Comments( ) FXN

1,168
Revenue

Segment
ProfitProfit %©TERUMO CORPORATION

1,306996
+12%
(+7%)

294

280

TIS:

Number of procedures in Japan recovered gradually;
overseas grew in double digits led by EU and US.
Steady China COVID recovery+94

Neurovascular:

US kept strong double-digit growth.
China impacted by distributor inventory adjustment+7

CardioVascular:

Global double-digit growth. In Japan hardware sales
returned to normal, but stayed strong in EU and Asia

+16

Vasculargraft:New hybrid product sales stayed strong in US.
Stent graft sales continued expansion+20

Profit:Revenue growth and profitability improvement offsetinflation. Strengthened SG&A investments for US
therapeutic devices sales expansion269-4%
(-3%)

FY21

FY22

FY23

29%

24%21%Q1
YoY

10 / 13

TMCS:

Sell-off of nutrition business, PS delivery fluctuations impacts.
Reduced sales, profit; however, progress as planned toward annual guidance(100M JPY)

(TMCS: Medical Care Solutions)

Q1

Comments( ) FXN

438

460

RevenueSegment
Profit

437-5%(-6%)

6445

Profit %©TERUMO CORPORATION

HCS:
Hospital
CareSolutions

Minus YoY due to sell-off of nutrition business.
Double-digit growth by infusion sets and adhesion barrierin Japan. Asia, Latin America grew in double digits todrive the business overall

-1

LCS:
LifeCareSolutions

Thermometer, blood pressure monitor demand returned
to normal. Blood glucose self-measurement productsales decreased in Japan due to severe competition-5

PS:
PharmaceuticalSolutions

Decreased sales in Japan and overseas even YoY due todelivery fluctuations. Production investment toward midto long-term growth progressed steadily-17Profit:

Impact of decreased sales and Japan electricity costinflation from FY22 2H was partially absorbed by pricepolicy positive impact

28-37%(-43%)

FY21

FY22

FY2315%

10%6%

Q1
YoY

11 / 13

TBCT:

Large profit increase driven by solid sales to blood centers(100M JPY)

(TBCT: Blood and Cell Technologies)

Q1

Comments( ) FXN

Revenue283

345

409+19%(+14%)

60

Profit %©TERUMO CORPORATION

Blood CenterSolutions:

Strong global sales of component collection systems
and whole blood products, led by Asia and US+59

TherapeuticSolutions:

Cell collection demand expanded, especially in US.
Blood therapy products for hospitals strong in Asia

+14

Cell Therapy
Technologies:

Minus YoY due to sell-off of part of business.
Expanded investments into cell therapies maintained
steady sales of cell processing systems-8Profit:

Large profit increase due to increased sales.
Positive impacts of price policy and Costa Rica transfer
began

59
36Segment
Profit+62%(+76%)FY21

FY22FY2321%

10%

14%

Q1YoY12 / 13

20B JPY Share Repurchase Decision by the Board, as of Aug 9thShareholder return policy: Continue stable dividend increase, aim for total return ratio of 50% in GS26 period
This decision brings projected FY23 total return ratio to 52%
Plan to cancel the shares after repurchase
600

Share repurchase (100M JPY)

Total return ratio

100%

90%

80%

52%

400

200

25%

25%

28%

29%

500

40%

2000

FY18

©TERUMO CORPORATION

FY19

FY20

FY21
13 / 13

FY2260%

FY23 Guidance

20%0%Reference©TERUMO CORPORATION

14 / 13

Revenue by Segment and Region©TERUMO CORPORATION

15 / 13

Revenue and Operating Profit Quarterly TrendRevenue:

FY23 Q1 YoY +9%, QoQ +6%

OP

FY23 Q1 YoY -3%, QoQ +24%:

(100M JPY)

2,153

2,147

2,060

1,973

1,788

1,729

1,717

2,022
1,798

TBCT Revenue
TMCS Revenue
C&V Revenue
Terumo OP

362304296296

FY21 FY22 FY23Q1©TERUMO CORPORATION

286255

FY21 FY22 FY231Q2375215

FY21 FY22 FY231Q316 / 13238

FY21 FY22 FY231Q41Margin Ratio Recovery from FY22 Q4C&V: Cardiac and Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies

Quarterly Adjusted Operating Profit Trend
24.9%

23.5%

22.9%**
20.6%
C&V

17.5%

( ) FY23 Annual Guidance
Adjusted Operating Profit%(23.9%）

15.4%**
14.3%
TBCT（8.1%）
13.8% Terumo*（15.5%）

11.8%
9.7%

6.4%

8.6%

TMCS

（10.3%）

4.9%

-5.1%

FY22 Q3©TERUMO CORPORATION

Q4

FY23 Q1
17 / 13* Operating profit% for Terumo** Excluding FX impact to stockP&L (QoQ)(100M JPY)

FY22 Q1

Q2

Q3

Q4FY23 Q1
2,153(Apr-Jun)(Jul-Sep)(Oct-Dec)(Jan-Mar)

Revenue

1,973

2,060

2,147

2,022

Gross Profit

1,016 (51.5%)

1,054 (51.1%)

1,114 (51.9%)990 (49.0%)

1,098 (51.0%)

SG&A Expenses

566 (28.7%)605 (29.4%)

615 (28.6%)

597 (29.5%)

651 (30.2%)

R&D Expenses

141 (7.1%)

157 (7.6%)

159 (7.4%)

160 (7.9%)

154 (7.2%)-3735

Other Income and Expenses-65(Apr-Jun)

3

Operating Profit

304 (15.4%)

255 (12.4%)375 (17.5%)

238 (11.8%)296 (13.8%)

Adjusted Operating Profit

359 (18.2%)

345 (16.8%)

392 (18.2%)

284 (14.1%)

345 (16.0%)

130JPY138JPY138JPY
139JPY

142JPY
144JPY132JPY
142JPY

137JPY
150JPY

Quarterly
Average Rate©TERUMO CORPORATION

USD
EUR

18 / 13

SG&A (QoQ)(100M JPY)
FY22 Q1(Apr-Jun)

298
46
44
56
123
566

Labor
Promotion
Logistics
Depreciation
OthersSG&A total

Q2(Jul-Sep)

Q3(Oct-Dec)

312
44
47
59
142
605

316
52
4960
138
615

Q4(Jan-Mar)

307
45
44
58
143
597

FY23 Q1(Apr-Jun)

336
49
4758
161
651（%）(28.7%)(29.4%)(28.6%)(29.5%)(30.2%)（%）(7.1%)(7.6%)(7.4%)(7.9%)(7.2%)（%）(35.8%)(37.0%)(36.0%)(37.4%)(37.4%)

141

R&D

706

Total

157
761

159
774

160
757

154
805

Quarterly

USD

130JPY138JPY

142JPY132JPY

137JPY

Average Rate

EUR

138JPY

139JPY

144JPY

142JPY

150JPY©TERUMO CORPORATION

19 / 13

SG&A (YoY)(100M JPY)
FY22 Q1

FY23 Q1

YoY

YoY%

YoY%
excluding FX
impactSalaries & Wages
Sales Promotion
Logistics Costs
Depreciation & Amortization
OthersSG&A Expenses Total
（%）

298
46
4456
123566(28.7%)336
494758161
651(30.2%)

3834239
85

13%
6%
8%
3%
31%
15%

8%
2%
4%
0%
27%
10%

R&D Expenses（%）

141(7.1%)

154(7.2%)

1410%

6%

SG&A Expenses Total（%）

706(35.8%)

805(37.4%)

99

14%

9%

©TERUMO CORPORATION

20 / 13

Adjusted Operating Profit: Adjustments(100M JPY)
FY22 Q1

FY23 Q1

Operating Profit
Adjustment 1. Amortization of acquired
intangible assets
Adjustment 2. Non-recurring profit or loss

304296464692Adjusted Operating Profit

359345<General examples of adjustment items>• Acquisition related cost

• Nonlife insurance income• Lawsuit settlement• Loss on disaster• Impairment loss

• Other one-time profit & losses• Restructuring loss
Adjustment 2. Major Non-recurring profit or loss

©TERUMO CORPORATIONFY23 Q1

Restructuring loss

2Others

21 / 13

CAPEX, Depreciation and R&D Expenses(100M JPY)

FY20

FY21

FY22FY23 Q1

FY23(100MGuidanceJPY)

CAPEX

772

692

758

135

800

Depreciation
Amortization ofacquired intangible assets
Others484

532635163675146

161

188

46

175

338

371447117500

CAPEX = C.i.P. record basis excluding lease. Lease depreciation (IFRS16) is not included in Depreciation

FY23 Q1(13.5B JPY): Continued investment mainly for TIS, Neurovascular, PS, TBCT in production
capacity, Plasma Innovations, R&D as well as IT infrastructure (SAP). Investment on construction ofa new plant building in the premises of the Kofu Factory to strengthen production system for CDMO
business etc.
FY23 Guidance ROE 8.5%, ROIC 7.0%
FY20R&D Expenses©TERUMO CORPORATION491

FY21518

FY2261622 / 13FY23 Q1

FY23Guidance

154

650

Cash Flows (Q1)
Investing & Financing CF-387

Operating CF+114

180298(100M JPY)

176

Depreciation Incomeandtaxes, etc.
amortization

Profitbefore tax

188

Workingcapitalgains andlosses

135

CAPEX

1,873

100

Redemptionof bonds

154
143
Dividend

3

Others
1,601

Cash at the endof FY22 Q4©TERUMO CORPORATIONCAPEX = C.i.P. record basis
Aligned with period-end account balance "Cash and cash equivalents" on B/S23 / 13

Cash at the endof FY23 Q1

FY23 Q1 FX Impact Breakdown (Flow, Stock)
FX impact vs. FY22 Q1 -0.1B JPY
Flow +1.4B JPY: EUR, CNY appreciation positive impact
Rate (JPY)FY22 Q1
Average rate

FY23 Q1
Average rate

Variation

EUR

138

15011CNY

19.6

19.6-0Stock -1.5B JPY: FX impact from elimination of unrealized profit on inventory assets• Rapid JPY depreciation in June, variation between average rate and quarter-end rate resulted in negative impact

Rate (JPY)FY22
End of MarchFY23End of June

Variation

USD

134

145

11EUR

146

158

12©TERUMO CORPORATION

24 / 13Foreign Exchange Sensitivity
Annual impact of 1 JPY depreciation (Flow)(100M JPY)

USD

EUR

CNYRevenue

221139Adjusted Operating Profit

0523USD

EUR

CNY-2.5-0.6-2.0

Impact of 1 JPY depreciation (Stock)
Adjusted Operating Profit©TERUMO CORPORATION

25 / 13

Product Pipeline
Major Product Launch, Approval Status
Segment
Therapeutic (TIS)

Therapeutic (TIS)

General Name

Product NameTo FY22

FY23 Target

Drug-eluting coronary stent

Ultimaster Nagomi

JP launched

EU launch

Peripheral coil system

AZUR Family

Hydro Coil, Framing CoilCX, Soft3D(JP)Vascular Plug(US)launched*

Hydro Coil, CX
China launch

Stent graft (Vascular graft)Thoracic aorta stent graft

Relay Series

RelayPro US launched,
JP indication extended

Sales expansion in US
by indication extended

Infusion access (HCS)

I. V. catheter

Surflo ZEROJP launched

Sales expansion in JP

Diabetes (LCS)

Continuous glucose monitor G6

JP NHI
coverage expanded

Sales expansion in JP

Cell therapy technologies

Cell expansion system

Globally launched

Global sales expansion

Quantum Flex

TIS: Interventional Systems, HCS: Hospital Care Solutions, LCS: Life Care Solutions*Hydro Coil, Framing Coil and CX globally launched excluding China©TERUMO CORPORATION

26 / 13Nagomi

AZUR

RelayProSurflo ZERO

G6Quantum Flex