[Terumo Corporation] Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2016: Reference

Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2016: Reference
Analysis of Business Performance
1. Overview of Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2016
(1) Overview of Consolidated Business Results
In the first three quarters of the current fiscal year (from April 1 to December 31, 2015), trends in the global
healthcare market were as follows. In the United States, healthcare demand increased, mainly underpinned by a risein enrollment in Obamacare. In China, although there is growing concern of a slowdown in the economy, the overall
healthcare market expanded. In Japan, the government is continuing to implement measures to curtail healthcare
expenditure. Reimbursement price revisions are expected to be negative both for drugs and medical devices in 2016.
Meanwhile, owing to the Pharmaceutical and Medical Device Act (PMD Act) enacted in 2014, companies arebriskly carrying out initiatives to commercialize regenerative medicine. Terumo was the first to receive rapid
approval with certain conditions and time restrictions under this act for its HeartSheet, an autologous skeletal
myoblast sheet to treat severe heart failure caused by ischemic heart disease. The product was approved for coverage
under national healthcare insurance in November 2015.
Amid this environment, the Terumo Group is pursuing its goal of “becoming a company with a global presence,”
and in line with its business-led management structure, Terumo is promoting management that aims to achievesustainable and profitable growth.
The following are highlights of performance at each company during the first three quarters of the current fiscalyear.
●In the Cardiac & Vascular Company, sales continued to trend steadily in the Interventional Systems (TIS) andNeurovascular intervention businesses.

●In the General Hospital Company, the company focused on enhancing profitability through the expansion ofhigh-margin businesses, including the Drug and Device business, and by transforming its business portfolio.

●

In the Blood Management Company, in addition to an expansion in sales of therapeutic apheresis systems andcell processing systems, sales of products to blood centers, mainly in emerging countries, were also solid.

A partial revision was made to the management of earnings at Terumo’s overseas subsidiaries. Accordingly, starting
October 1, 2014, earnings at consolidated subsidiaries Harvest Technologies Corporation and Harvest Technologies
GmbH are being posted under the Blood Management Company reporting segment, as opposed to the Cardiac &Vascular Company. Segment information for the first half of the fiscal year ended March 31, 2015 was revised toreflect reporting segments after the revisions.
Financial results for the first three quarters of the fiscal year ending March 31, 2016 are as follows:
Net sales
Net sales totaled 396.0 billion yen, an increase of 9.0% compared to the same period in the previous fiscal year.

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Q1-Q3

Q1-Q3

FYE 3/2015

FYE 3/2016

Growth excluding
Growth (%)

impact of forex
translations (%)

Net sales

363,201

395,991

9.0

4.8

Gross profit

190,678

214,648

12.6

9.1

Operating income

52,86964,11521.3

22.9

Ordinary income

58,68960,977

3.9－33,426

43,484

30.1－Profit attributable toowners of parent(million yen)

Regional sales

JapanQ1-Q3

Q1-Q3

FYE 3/2015

FYE 3/2016

Growth excluding
impact of forex

Growth (%)

translations (%)

138,922

140,433

1.1

1.1

Europe78,39776,420(2.5)

1.0

Americas90,884

108,732

19.6

6.0

Asia, outside Japan

54,99670,40428.0

17.8

Overseas total

224,278

255,558

13.9

7.1

Total

363,201

395,991

9.0

4.8

In Japan, net sales totaled 140.4 billion yen, an increase of 1.1% compared to the same period of the previous fiscalyear. Although sales to blood centers decreased, sales in the TIS business rose. Meanwhile, overseas, net sales
reached 255.6 billion yen, a growth of 13.9%, reflecting ongoing brisk sales in the TIS business in the United Statesand Asia, mainly China, and in the Neurovascular intervention business.

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[Terumo Corporation] Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2016: Reference

Gross profit
Gross profit rose 12.6% to 214.6 billion yen compared to the same period of the previous fiscal year. This reflects
contribution from an expansion in sales of high-value-added products both in Japan and abroad.
Operating income
Operating income came to 64.1 billion yen, up 21.3% year on year. The increase in gross profit outpaced the risein selling, general and administrative expenses.
Ordinary income
Ordinary income increased 3.9% to 61.0 billion yen year on year, primarily owing to an increase in operating income
despite foreign exchange losses.
Profit attributable to owners of parent
Profit attributable to owners of parent rose 30.1% year on year to 43.5 billion yen.
Net sales results by company are as follows:(million yen)
GrowthSegment

Q1-Q3

Q1-Q3FYE 3/2015

FYE 3/2016

Growth (%)

excluding
impact of forex
translations (%)

Cardiac & VascularCompany

General HospitalCompany

Blood Management
Company

Net sales

165,890

193,241

16.5

10.1

(Domestic)

35,99537,7654.9

4.9(Overseas)

129,894

155,476

19.7

11.5

Net sales

122,466

122,777

0.3

(1.0)

(Domestic)

93,716

94,257

0.6

0.6(Overseas)

28,74928,520

(0.8)

(6.0)

Net sales

74,844

79,9726.9

2.6(Domestic)

9,210

8,410

(8.7)

(8.7)

(Overseas)

65,63471,561

9.0

4.2

Cardiac & Vascular CompanyIn Japan, sales rose underpinned by sales growth in the TIS business. Outside Japan, sales remained brisk for
products used in transradial coronary intervention (TRI: a technique using a catheter to approach the coronary arteryfrom an artery in the wrist) in the United States. In addition, sales rose in Asia, mainly in China. In the Neurovascularintervention business, sales grew substantially in the United States and in Asia, mainly China.
Reflecting this, net sales in the Cardiac & Vascular Company totaled 193.2 billion yen, a growth of 16.5% year onyear.
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General Hospital Company
In Japan, sales increased for high-value-added products, mainly in the Drug and Device business. Meanwhile,
outside Japan, the company moved forward with transformation to its business portfolio, including downsizing lowprofit businesses.
In light of this, net sales in the General Hospital Company came to 122.8 billion yen, a rise of 0.3% year on year.
Blood Management Company
Sales in Japan decreased year on year as the decline in the number of blood donations impacted demand for related
products used during blood collection. Outside Japan, as a transition to new prices made progress in the UnitedStates, although slightly behind initial plans,

the growth in sales of products to blood centers slowed. However,

the expansion in sales was solid for therapeutic apheresis systems and cell processing systems, as well as sales ofproducts to blood centers, mainly in emerging countries.
Accordingly, net sales in the Blood Management Company were 80.0 billion yen, up 6.9% year on year.

(2) Overview of Consolidated Balance Sheets
Total Assets
As of December 31, 2015, total assets totaled 982.0 billion yen, down 10.0 billion yen compared to March 31, 2015.
Current assets stood at 422.3 billion yen, an increase of 9.9 billion yen, primarily attributable to a rise in cash anddeposits.
Non-current assets stood at 554.1 billion yen, a decline of 21.7 billion yen. Property, plant and equipment declined
100 million yen, intangible assets decreased 17.3 billion yen, and investments and other assets shrunk 4.3 billion
yen.
Total Liabilities
Total liabilities came to 390.7 billion yen, a decrease of 27.8 billion yen, partly attributable to a decrease in income
taxes payable and trade payable.
Total Net Assets
Net assets were 591.3 billion yen, an increase of 17.8 billion yen.
Consequently, the company’s equity ratio was 60.2%, an increase of 2.4 percentage points compared to March 31,
2015.

(3) Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2016
Terumo revised its forecast of consolidated financial results for the fiscal year ending March 31, 2016, which it
released on September 24, 2015. This reflects the progress made during the first nine months of the current fiscal
year. The operating income forecast was raised from 76.0 billion yen to 80.0 billion yen, the ordinary income
forecast was raised from 73.0 billion yen to 75.0 billion yen, and the forecast for profit attributable to owners of-4-

[Terumo Corporation] Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2016: Reference

parent was raised from 48.5 billion yen to 50.0 billion yen. Please refer to the “Revision to Full-Year Results
Forecast for FY2015,” which is to be announced today.

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