Financial Results for the Third Quarter ofthe Fiscal Year Ending March 31, 2015 (FY2014)
Terumo Corporation
Senior Executive Officer,Investor Relations, Corporate Communication Dept.
Kazuaki Kitabatake

February 3, 2015

Highlights
Corporate Secured increase both in sales and profit while absorbing reimbursement
price cut in Japan
 In Q3, sales in Japan increased
 Achieved continuous double-digit sales growth in overseas IS and
Neurovascular businesses

Cardiac &VascularGeneralHospital In Japan, mainly IS business sales recovered in Q3 compared to 1H
 Expanded sales of Ultimaster (new DES) steadily
 Increased sales of DM & Consumer Healthcare and D&D (Drug & Device)businesses in Q3
 Increased business profit ratio by improving product mix
 Strengthened cost control, foreseeing more challenges in market
environment

Blood
Management  Achieved continuous sales growth in overseas automated blood
component processing system and therapeutic apheresis© Terumo Corporation

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Increase in Sales and Profit(Billion yen)

Q3 YTD
FY2013Q3 YTD
FY2014

YoY%

YoY%(Excl. FX)Net Sales

345.3363.2+5%+1%

Gross Profit

178.7 (51.7%)

190.7 (52.5%)

+7%

+2%

SG&A Expenses

108.0 (31.2%)

116.9 (32.1%)+8%

R&D Expenses

22.4 ( 6.5%)

20.9 ( 5.8%)-7%

Operating Income

48.3 (14.0%)

52.9 (14.6%)+10%+5%(Excl. Amortization)

60.4 (17.5%)

65.8 (18.1%)

+9%

+4%

Ordinary Income

49.9 (14.5%)

58.7 (16.2%)+18%

Net Income

36.9 (10.7%)

33.4 ( 9.2%)-9%Average exchange rates

US$EUR

99 yen132 yen107 yen
140 yen© Terumo Corporation

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Operating Income Variance Analysis(Billion yen)
1.4

2.4
2.15.32.2

48.3

FX

G/P
incrementby salesincrease

Productmix
Improvement

G/P
improvement bycost
reduction

SG&A
increase(-3.6)

6.0

Decreaseof DuraJP
heart
ReimburseR&D,
ment
Etc.
(-3.5)(+2.2)
Price
erosion(-2.5)Q3 YTDFY13

52.9

Q3 YTD
FY14© Terumo Corporation

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Net Sales by Region(Billion yen)

Consolidated: +5% (+1%)

Q3 YTD Q3 YTD
FY2013 FY2014( ) Excluding Foreign Exchange

Japan Outside of Japan-2%+10% (+4%)

224.3

70.2

90.9

Americas+11% (+4%)

38%
62%
138.9

78.4

Europe+12% (+5%)

China-2% (-8%)
Asia & Others+13% (+7%)© Terumo Corporation

82.0
16.9
17.3
38.0
33.7
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Net Sales by Business Segment(Billion yen)
Cardiac & Vascular

Q3 YTD
FY2013General Hospital
Blood Management

Q3 YTD
FY2014( ) Excluding Foreign Exchange

168.0

Cardiac & Vascular

20%

152.8

+10% (+4%)

46%

122.5

General Hospital
123.9-1% (-2%)

34%
72.7

Blood Management+6% (+1%)© Terumo Corporation

68.5

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Profit by Business Segment(Billion yen)

Q3 YTD
FY2013Q3 YTD
FY2014

YoY% (Excl. FX)

32.0 (21%)

34.1 (20%)

+6%

-3%

16.2 (13%)

16.5 (13%)+2%+1%

BloodManagement

13.8 (20%)

14.2 (20%)+3%+1%

Others*-1.6

1.0--60.4 (17%)

65.8 (18%)+9%+4%

Cardiac &VascularBusiness GeneralProfit
Hospital

Operating Income(Excl. amortization)

YoY%* Others: profit unrelated to any business segments
Q3 YTD FY13: R&D for Duraheart and others
Q3 YTD FY14: profit increase by reduction of corporate related expense and others© Terumo Corporation

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Cardiac & Vascular: Increase in Sales and Profit(Billion yen)

Q3 YTD
FY2013Q3 YTD
FY2014YoY%

YoY%(Excl. FX)

Sales

152.8

168.0

+10% +4%

Business Profit (%)

32.0 (21%)

34.1 (20%)+6%-3%<Sales> Increase in overseas IS business and neurovascular intervention products (stent, etc.)+ 12.5 BJPY Sales of CV products grew mainly in U.S. and Asia

+ 2.5 BJPY

 Reimbursement price cut in Japan- 2.8 BJPY Sales of Ultimaster (new DES) continued to expand steadily<Business Profit> Reduced manufacturing cost mainly for IS business+ 0.9 BJPY

© Terumo Corporation

2015/2/38/23

General Hospital: Increase in Profit due to Growth of High Margin Products(Billion yen)

Q3 YTD
FY2013Q3 YTD
FY2014

YoY%

YoY% (Excl. FX)

Sales

123.9

122.5-1%-2%

Business Profit (%)

16.2 (13%)

16.5 (13%)+2% +1%<Sales> Japan: effects of changes in the healthcare market environment in 1H- 1.2 BJPY

 Reimbursement price cut in Japan- 0.7 BJPY Increased sales of DM & Consumer Healthcare and D&D (Drug & Device)businesses in Q3+ 1.5 BJPY<Business Profit> Improved product mix© Terumo Corporation

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Blood Management: Increase in Sales and Profit(Billion yen)

Q3 YTD
FY2013Q3 YTD
FY2014

YoY%Sales

68.5

72.7+6% +1%

Business Profit (%)

13.8 (20%)

14.2 (20%) +3% +1%

YoY%(Excl. FX)<Sales> Increased sales both in whole blood collection and blood component collectionin Latin America and Asia

+ 2.0 BJPY

 Achieved double digit growth in overseas therapeutic apheresis+ 1.7 BJPY Automated blood component processing system globally grew at double digit+ 1.1 BJPY EU and U.S.: on the back of constraints of healthcare expenditure,
price pressure is increased- 0.6 BJPY<Business Profit> Controlled SG&A within the range of sales growth© Terumo Corporation

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Quarterly Results(Billion yen)

Q3Q4

Q1 FY14

Q2

Q3(Oct-Dec)(Jan-Mar)(Apr-Jun)(Jul-Sep)(Oct-Dec)

114.9

Net Sales

119.2

122.1

Gross Profit

61.5 (51.6%)

63.3 (51.9%) 60.7 (52.8%) 62.3 (52.6%)

67.8 (52.2%)

SG&A Expenses

43.7 (36.7%)

46.3 (37.9%) 44.6 (38.8%) 45.4 (38.3%)

47.9 (36.9%)

Operating Income

17.8 (14.9%)

17.0 (14.0%) 16.1 (14.0%) 16.9 (14.3%)

19.9 (15.3%)

Average Quarterly US$
Exchange Rates

100 yen103 yen

102 yen104 yen

115 yen

137 yen141 yen

140 yen138 yen

143 yen

EUR

118.4

© Terumo Corporation

129.9

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Profit Ratio, SG&A Expenses Ratio
(%)

51.6

51.9

36.7

37.9

14.9

52.6

52.2
Gross
Margin14.0

FY13Q3

52.8

38.8

38.3

14.0

14.3

36.9

SG&AExpensesRatio

15.3
OperatingMargin

FY14Q4Q1

Q2

Q3© Terumo Corporation

2015/2/3

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New Product Pipeline for 2HBusinessCoronary

Peripheral

NeuroProduct
New PTCA balloon

Region◎EU,L. America,
Asia

PTA balloon (above the knee)

JP, US

PTA balloon (below the knee)
Stent for small vessel (Misago)
Coil assist stent
Stroke device (clot retriever)
Liquid embolic glue

EUEUUS
EU
EU

Infusion
SystemNeedleless system

DM

Blood glucose monitor(color LCD)

◎◎★
★

Blood
Management Therapeutic apheresis system(Bone marrow stem cell andpolymorphonuclear leukocyte
application)

DoneDoneDone◎JP

PTA balloon,
below the knee(Tercross)

Coil assist stent(LVIS)

Non-compliant and semi-Asia

Automated blood component
collection system (plasma)
Automated blood component
processing system

LaunchDonecompliant balloon,
catheter shaft withgood maneuverability

Superior deliverability
and easy stent
deployment

JP★

JPUS

◎ Item with large contribution to sales and profit★ Item with highly innovative technology

Stroke device(ERIC)Interlinked cage
system for efficient
clot retrieval© Terumo Corporation

Blood glucose monitor(MEDISAFE Fit Smile)
Voice guided navigationand easily viewable color
LCD
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Reference© Terumo Corporation

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Q3 YTD Net Sales and Growth by Region(Billion yen)
Outside of Japan

BusinessSegment

Japan

Subtotal

EuropeAmericas

Cardiac &Vascular

36.0 (-2%) 132.0 (6%)

48.8 (6%)

54.8 (9%)

Out of C&V
Interventional
Systems*

27.6 (-3%)

99.8 (7%)

38.8 (8%)

36.9 (13%) 12.1 (-12%) 11.9 (14%) 127.4 (5%)

GeneralHospital

93.7 (-2%)

28.7 (-4%)

9.3 (2%)6.0 (-16%)

1.1 (19%)12.3 (-3%) 122.5 (-2%)

BloodManagement

9.2 (-5%)

63.5 (2%)

20.2 (3%)

30.2 (-1%)

2.9 (1%)

10.2 (10%)

72.7 (1%)

G. Total

138.9 (-2%) 224.3 (4%)

78.4 (5%)

90.9 (4%)

16.9 (-8%)

38.0 (7%)

363.2 (1%)*Including Neurovascular business

ChinaAsia

G. Total

12.9 (-12%) 15.5 (15%) 168.0 (4%)(YoY%): Excluding foreign exchange© Terumo Corporation

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SG&A Expenses(Billion yen)

Q3 YTD
FY2013Q3 YTD
FY2014

YoY

YoY%

Logistical Costs

47.2
10.6
8.1

52.1
11.6
8.2+4.9+1.0+0.1

+10%
+9%
+1%

Depreciation &Amortization

16.7

18.4+1.7+10%

Others25.4

26.6+1.2+5%

108.0 (31.2%)

116.9 (32.1%) +8.9+8%

22.4 (6.5%)

20.9 (5.8%)-1.5-7%130.4 (37.7%) 137.8 (37.9%)+7.4+6%

Salaries & Wages
Sales Promotion

GeneralAdministrative Total
R&D Expenses

SG&A Expenses Total(%) Against net sales© Terumo Corporation

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SG&A Expenses(Billion yen)

Q3 YTD
FY2013*Q3 YTD
FY2014YoY

YoY%

GeneralAdministrative Total

113.3

116.9+3.6+3%

R&D Expenses

23.1

20.9-2.2-10%

SG&A Expenses
Total

136.4

137.8+1.4+1%* Value adjusted by excluding FX impact© Terumo Corporation

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Non-operating Income & Expenses, Extraordinary Gains & Losses, Income Taxes(Billion yen)

Q3 YTD
FY2013Q3 YTD
FY2014

Operating Income

48.3

52.9

Non-operating
Income & Expenses+1.7+5.8

FX gains

Exchange rates End of Mar. 2014 End of Dec. 2014
US$
102.9 yen
120.6 yenEUR
141.7 yen
146.5 yen

ExtraordinaryGains & Losses+4.6-6.4

Income Taxes Total-17.6-18.9

Tax Rate (%)

32%

36%

Net Income36.9

33.4© Terumo Corporation+8.1

Difference(+17.7)(+4.8)

Transformation of productportfolio in EU-6.4
Impairment loss -1.5
Others
+1.5Elimination of effect resulted
from reorganization of TBCTin FY12

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CAPEX, R&D Expenses(Billion yen)

FY2014
Guidance

Q3 YTD
FY2014Progress toguidance

CAPEX

42.0

30.8

73%

Depreciation &Amortization

41.0

30.1

73%

R&D Expenses

31.0

20.9

67%

Depreciation & Amortization: Including intangibles
CAPEX: Acquisition basis© Terumo Corporation

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Cash Flow
Financed 100 BJPY by CB, invested 90 BJPY in short-term financial asset
Despite corporate tax burden in Q1 and Q3, operating CF recovered well.
SB of 40 BJPY will be redeemed in March, 2015.

Operating CF+42.4

30.1

52.3
Incomebeforetax

95.6

Depreciation &Amortization

Investing and Financing CF
-18.3

28.7
Corporate tax
andothers(Billion yen)

90.0
11.3
Increase
inworkingcapitalandothers

103.2
30.8

Negotiable 11.0
certificatesof deposit Dividend

CAPEX

10.3
OthersIssuanceof CB
andothers

Cash at end
of FY13

119.7

Cash at endof Q3 FY14
© Terumo Corporation

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Foreign Exchange Sensitivity(Billion yen/year)

US$EURNet Sales

1.80.7

OperatingIncome0.30.4© Terumo Corporation

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Quarterly Average Exchange Rates Trend
EUR (FY2014)

JPY

140
140

143

138
137

120

129

131

USD (FY2014)

102

141

115

104

100
99

99

100

Q1

Q2

Q3

103

80

© Terumo CorporationQ4
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IR Contact
Terumo Corporation
Corporate Communication (IR) Dept.
E-mail: kouhou_terumo01@terumo.co.jp

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 notedthat actual results may differ from those forecasts on projections due to various factors. Factors
affecting to actual results include, but are not limited to, changes in economic conditions
surrounding Terumo, fluctuations of foreign exchange rates, and state of competition.
The market share information in this presentation is partly derived from our own independentresearch.

© Terumo Corporation

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