Financial Results for the First Half ofthe Fiscal Year Ending March 31, 2016 (FY2015)
Terumo Corporation
S i ESenior
Executiveti OffiOfficer,
Investor Relations, Corporate Communication Dept.
Kazuaki Kitabatake
November 55, 2015

Overview: Double Digit Growth Both in Sales and Profit
Net Sales
Gross Profit
SG&A Expenses
R&D Expenses

Operating Income(Excl. Amortization)

Ordinary Income
Net Income
Average Exchange Rate

1H FY14

1H FY15

YoY%

233.3
233
3
122.9 (52.7%)
76.3 (32.8%)
13.6 ( 5.8%)
33.0 (14.1%)
41.3 ((17.7%))
34.0 (14.6%)
21.9 ( 9.4%)

259.2
2592
139.4 (53.8%)
84.4 (32.6%)
15.9 ( 6.1%)
39.1 (15.1%)
49.3 ((19.0%))
35.8 (13.8%)
27.0 (10.4%)+11%+13%+10%+17%+19%+19%+ 5%+23%

US$EUR103 yen139 yen(billion yen))(billiYoY%(Excl. FX)+5%+8%+3%+8%+20%+16%122 yen
135 yen Sales: sustain solid performance for all companies. Overseas IS and neurovascular, especially in US,
drove the corporate growth Operating income: the gross profit growth driven by sales expansion exceed the expense growth Ordinary income: posted a FX loss of 2.4 BJPY in FY15 1H, while posted a gain of 2.5 BJPY in FY14 1H
 Net income: gain through the sales of fixed asset of Shibuya, Tokyo. Lowered corporate tax burden ratio
due to tax system revision
2/19

Operating Income Variance Analysis(billion yen)
1.1
43
4.3
G/P
improveB i
Businessment bymix
cost
Improve- reduction,mentetc

1.5

7.6

33 0
33.0

1H FY14G/P
incrementby salesincrease

Increaseof R&D

232.3

SG&A
3.4
Increasedue to sales Price
forceerosion
expansionin US InterInterventionalSystemsand Neurovasculardivisions

0.5
FX

39.1

1H FY153/19

Net Sales by Region
FY15 1H
FY14 1H

Outsideof Japanp(billion yen)( ) Excluding FX

168.8+17% (+7%)-1% (+1%)

35%

65%

58.0

+24% (+6%)

11% (+5%)

90.3
+1%

72.0

Americas

Consolidated

Japan50.3
50350.7

EuropeChina+62% (+38%)

Asia & Ohters+19% (+8%)

17.3
10.7
29.2
24 5
24.5

 Japan: General Hospital drove increase in overall sales.
 Europe: increase in sales for Cardiac & Vascular
Vascular. Pursue portfolio restructuring in General Hospital
Hospital. Effect ofappreciation of yen against Euro for all businesses
 Americas: increase in sales for IS and Neurovascular businesses. For US Blood Management business,certain anticipated price declines had not taken hold yet with some blood center groups
 China: driven by completion of realignment of local distribution network
4/19

Net Sales by Business Segment
FY15 1H
FY14 1H( ) Excluding FX(billion yen)

BloodManagement
20%

Cardiac &Vascular
49%

GeneralHospital
31%

125.5

Cardiac & Vascular

106.8+18% (+8%)
80.8

General Hospital

78.4+3%3% ((+1%)1%)

Blood Management+10% (+3%)

52.8
48 1
48.1

 Achieve increase in sales for all companies, even without FX support
 Cardiac & Vascular and Blood Management businesses achieve double digit growth due tostrongt
overseas sales.
l5/19

Business Drove Double-digit Growth inCardiac & Vascular: Overseas
Sales and Profit(Billion yen)

Sales
Business Profit ((%))

1H FY14

1H FY15

YoY%

YoY%((Excl.
c FX))

106.8
21.5 ((20%))125.5
29.3 ((23%))

+18%
+36%

+8%+21%<Sales> Increase in sales for overseas IS and Neurovascular businesses (mainly in US)+ 12.5 BJPY In China, complete local distributors realignment and expand customer coverage+ 5.3 BJPY Sales of Ultimaster continued to expand in EU and Asia. Gained its regulatory approval in JP<Business Profit> Increase profit and improve portfolio mix through the sales expansion of overseas IS andNeurovascular businesses

6/19

General Hospital: Profitability is Recovered by Cost Improvement(Billion yen)

Sales
Business Profit (%)

1H FY14

1H FY15

YoY%

YoY%((Excl. FX))

78.4

80.8+3%+1%

9 6 (12%)
9.6

11 7 (15%)
11.7+22%+25%<Sales> Japan: D&D, especially peritoneal dialysate and pain control drugs, expand the sales + 1.4 BJPY Japan: recovery in sales for daily use items such as general hospital products and DM products+ 0.7 BJPY
 Progress in portfolio restructuring in EU and Americas- 1.2 BJPY<Business Profit> Cost improvement both at Japanese and overseas plants+ 0.8 BJPY

7/19

Blood Management:

Businesses in Emerging Countries andTherapeutic Apheresis Continuously Drives Growth(Billion yen)

Sales
Business Profit (%)

1H FY14

1H FY15

YoY%

YoY%((Excl. FX))

48.1

52.8+10%+3%

9 3 (19%)9.3

10 0 (19%)
10.0+8%+16%<Sales> Continue to grow therapeutic apheresis and cell processing systems+ 2.7 BJPY Increase sales for blood component collection mainly in developing countries+ 1.2 BJPY<BusinessB iPProfit>
fit Certain anticipated price declines in the US had not taken hold yet with some blood center groups. (thenegotiation with customers for the longer term contract with increasing volume takes longer time thanexpected.) Profit from the products, which are manufactured in US and sold in EU, are negatively affected byweaker EUR against US$US$.

8/19

Q2 Topics
 Acquired the company’s own shares valued at 11 BJPY (dissolution of crossshareholding)Corporate Co-established “KENKO Commitment Companies Association” with other 14 firms
which declare keeping their employees healthy Received approval for the manufacturer and sale of HeartSheet autologous skeletal
myoblast sheets in Japan (Sep 18)
 Received approval for Ultimaster DES in Japan (Aug 10)

Business

 Gained FDA approval for peripheral PTA balloon co-developed with Kaneka
 Made an equity investments in Dutch venture company for the radioembolization
treatment of liver cancer
 Gained approval for the manufacturer and sale of the intradermal injection device(excluding drug) in Japan
9/19

New Product Pipeline for FY2015
Business

ProductDES(Ultimaster)◎◎★

RegionLaunchJPApproved
in Q2
Launch in
Oct 1

CoronaryEU,
Latin A,Asia

New aspiration catheter
Stent (Misago)★

Stent for small vessel(Misago)

NeuroCVProductRegion Launch

Disposable centrifugal pump(for PCPS)

Blood
Automated blood component★
Management processing system

JPJP

Q1

EUPeripheral PTA balloon(above the knee)
PTA balloon(below the knee)
Embolic particles(beads)

USBusiness

EU, USQ2

JP★

EUQ1

Coil assist stent◎

JP

Q1

Liquid embolic glue★

EU

Distal protection device

★

EUQ1

New DES (Ultimaster)

PTA Balloon (Metacross RX)

Approved in JP

Co-developed with Kaneka

Launched in Oct 1

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

10/19

Reference11/19

1H FY15 Net Sales and Growth by Region(Billion yen)
Outside of Japan

BusinessSSegment
tJapanpCardiac &Vascular

22.8 (-3%) 102.8(+11%) 32.5 (+3%)

44.5(+12%)

13.5(+40%) 12.3(+13%) 125.5(+8%)

Out of C&V
Interventional
Systems*

17.2 (-5%)

81.1 (+16%) 26.1 (+5%)

32.3(+18%)

12.8(+42%) 9.9 (+19%) 98.3 (+11%)

GeneralHospital

62.0 (+3%)

18.8 (-6%)

4.8 (-18%)

4.2 (-5%)

1.1 (+25%)

8.7 (-1%)

80.8 (+1%)

BloodManagement

5.6 (-8%)47.2 (+4%)

13.0 (+4%)

23.3 (-1%)

2.7 (+37%) 8.2 (+12%)52.8 (+3%)

G. Total

90.3 (+1%) 168.8 (+7%) 50.3 (+1%)

SSubtotal*Including Neurovascular business

Europe Americas

CChinaAsia

G. Total

72.0 (+6%) 17.3 (+38%) 29.2 (+8%) 259.2 (+5%)(YoY%): Excluding foreign exchange
12/19

Operating Expenses(Billi yen))(BillionYoY%

1H FY14

1H FY15

YoY

YoY%

Salaries
Sl i &Wages

33.9

38.2+4.3+13%

Sales Promotion

7.6

8.1+0.5+7%

Logistical Costs

5.3

5.5+0.2+3%

Depreciation &A
Amortization
ti ti

11.9

14.0+2.1
2.1+18%18%

Others17.6

18.6+1.0+5%

SG&A Expenses
Total76.3 (32.8%)

84.4 (32.6%)+8.1+10%+3%

R&D Expenses

13 6 (5.8%)
13.6(5 8%)

15 9 (6.1%)
15.9(6 1%)+2 3+2.3+17%+8%OperatingExpenses Total

89.9 (38.6%) 100.3 (38.7%)+10.4+11%+4%(Excl. FX)(%) Against net sales
13/19

Quarterly Results(Billi yen))(BillionFY14 Q2(Jul-Sep)

Q3(Oct-Dec)

Q4(Jan-Mar)

FY15 Q1(Apr-Jun)

Q2(Jul-Sep)

Net Sales

118.4

129.9

126.3

128.7

130.5

GGrossProfit
P fit

62 3 (52.6%)
62.3

67 8 (52.2%)
67.865 4 (51.7%)
65.4

69 0 (53.7%)
69.0

70 4 (53.9%)
70.4

SG&A Expenses

38.5 (32.5%)

40.5 (31.2%)

42.4 (33.5%)

41.7 (32.5%)

42.7 (32.7%)

R&D Expenses

6.9 ( 5.8%)

7.4 ( 5.7%)

8.4 ( 6.7%)

7.9 ( 6.1%)

8.0 ( 6.1%)

O
Operatingti IncomeI

16 9 (14.3%)
16.9

19 9 (15.3%)
19.9

14 6 (11.5%)
14.6

19 4 (15.1%)
19.4

19 7 (15.1%)
19.7(Excl. Amortization)

21.1 (17.8%)

24.5 (18.8%)

19.4 (15.3%)

24.5 (19.1%)

24.8 (19.0%)

US$

104 yen

115 yen119 yen

121 yen

122 yenExchange Rate EUR

138 yyen

143 yyen

134 yyen

134 yyen

136 yyen

Average

14/19

CAPEX, R&D Expenses
FY2015Guidance

1H FY2015
Result(Billion yen)
Progress toGuidance

CAPEX

36.0

14.9

41%

Depreciation
Di ti &Amortization *45.0

22.0

49%

R&D Expenses

35 0
35.0

15 9
15.9

45%

Depreciation & Amortization: Including intangibles
CAPEX: Acquisition basis<Downward revision in FY15 CAPEX guidance to 36 BJPY from 42 BJPY>
Delay in construction of new R&D facility in southern California
Change of building design. No delay in R&D projects

3 BJPYDecrease in CAPEX into Terumo Yamaguchi Corp. (plant) 2 BJPY Prioritize new products of which manufacturing effectively utilize the existingproduction lines
15/19

Cash Flow
Operating CF
+34.7
22.0
Depreci
Depreciation &Amortization

40.4(Billi yen))(Billion

Investing and Financing CF
-23.6

21.0
Corpo
Corpo67
6.7
rate tax
andIncreaseothers in working
capitalandothers

14.9
CAPEX

10.8

11.0

Sale ofinvestment
securities

Acquisition ofownshares

6.1
Dividend

2.4
Others129.7*
Cash at endof FY2014

Incomebeforetax*Cash at end of each period is consistent with “Cash and deposits” on B/S.

140.8
*

Cash at endof 1H FY1516/19

Foreign Exchange Sensitivity(Billion yen)

US$EURNet Sales

1.80.7

Operating Income

0.10.2

 For US$,
US$ sales expansion in U
U.S.
S drove higher FX sensitivity at sales
sales. However
However,the increase in overseas production ratio since acquisition of Caridian BCT
resulted in less impact of yen depreciation against US$ at operating income.
 Impact of depreciation in currencies in emerging countries on operating income
pof EUR.
was offset byy depreciation

17/19

1H FY15: Impact of FX
Average exchange rate in 1H
FY14
FY15
US$103 yen
122 yen ((+ 19 yen)) Depreciated
Di t dbby 18%
EUR
139 yen
135 yen (- 4 yen) Appreciated by 3%
CNY
16.6 yen
19.5 yen (+ 3 yen) Depreciated by 17%(Billion yen)

Sales

Operating Income

US$+13.0- 0.7

EUR- 1.2-1.0

Impact on goodwill amortization andothers-1.5

Profit increment by sales increase +2.0

CNY+2.9+1.0

Other currencies inemerging countries

+ 0.3

+0.2

Total

+15.0
15.0- 0.5

Impact on COGS at Hangzhou factory-1 0-1.0

18/19

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
j ti
are b
based
d upon our assumptions
tiusing
i iinformation
fti available
il bl tto us att th
the titime anddare not intended to be guarantees of future events or performance. Accordingly, it should be
noted that actual results may differ from those forecasts on projections due to various factors.
Factors affecting
g to actual results include,, but are not limited to,, changes
g 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.

19/19