Financial Results for the Third Quarter of theFiscal Year Ending March 31, 2016 (FY2015)
Terumo Corporation
Senior Executive Officer,
Investor Relations, Corporate Communication Dept.
Kazuaki Kitabatake
February 4, 2016

Overview: Highly profitable product in C&V Droves Substantial Growth in Profit(billion yen)

Gross Profit

FY14
Q3YTD
363.2
190.7 (52.5%)

FY15
Q3YTD
396.0
214.6 (54.2%)

SG&A
Expenses

116.9 (32.1%)

Net Sales

R&D Expenses

Operating Income(Excl. Amortization)

Ordinary Income
Net Income
Average Exchange Rate

YoY%

YoY%
(Excl. FX)

+9%
+13%

+5%
+9%

127.2 (32.1%)

+9%

+4%

20.9 ( 5.8%)
52.9 (14.6%)
65.8 (18.1%)
58.7 (16.2%)
33.4 ( 9.2%)

23.3 ( 5.9%)
64.1 (16.2%)
79.4 (20.1%)
61.0 (15.4%)
43.5 (11.0%)

+11%
+21%
+21%
+4%
+30%

+5%
+23%
+19%

US$

107 yen

122 yenEUR

140 yen

134 yen Sales: Sustain solid performance. Cardiac & Vascular, especially global interventional system business, drove thecorporate growth Operating income: G/P growth driven by sales expansion of highly profitable Cardiac & Vascular products
 Ordinary income: Posted a FX loss of 2.4 BJPY in FY15/Q3YTD, but posted gain of 8.1 BJPY in FY14/Q3YTD
 Net income: Gain through the sales of fixed asset of Shibuya, Tokyo
2/23

Extraordinary Gains & Losses, Income Taxes(Billion yen)
FY14
Q3YTD

FY15
Q3YTD

Non-operating income
and loss

5.8-3.1

Ordinary Income

58.7

61.0

YoY%: +4%

FX

FY14
FY15+8.1-2.4

Extraordinary
Gains & Losses-6.4+4.3

FY14
Cost for restructuring -6.4
FY15Gain through the sales offixed asset (Q2)+4.4

Income before Income
Tax

52.3

65.3

YoY%: +25%

Income Taxes Total
Tax Rate (%)

-18.9
36%

-21.9
33%

Tax system revision

Net Income

33.4

43.5

YoY%: +30%

+1.8

3/23

Operating Income Variance Analysis
1.0
7.8
G/P
improveBusiness ment bymix
cost
Improve- reduction,
ment
etc
2.5

11.5

52.9

G/P
incrementby salesincrease

FY14 Q3YTD(billion yen)

Increaseof R&D

4.2

SG&A
4.5
Increasedue to sales
Priceforce
expansion erosion
in US Interventional
Systemsand Neurovasculardivisions

0.9FX

64.1

FY15 Q3YTD
4/23

Operating Income Variance Analysis
Cardiac &VascularGeneral
Hospital

BloodManagement
2.0

8.6

52.9

1.20.5(billion yen)

1.9
1.9
2.4

G/P Increase inDecrease Increment operating Others
Increase inin operating
Increase
22.2 investment
expenses
G/P
expenses
infor sales Increment
goodwill
expansionamortization
G/P
Increment

FY14 Q3YTD

64.1

FY15 Q3YTD
5/23

FY15 Q3YTD: Impact of FX
Average exchange rate in Q3YTD
FY14FY15US$107 yen
122 yenEUR
140 yen
134 yen
CNY
17.3 yen
19.3 yen(+ 15 yen) Depreciated by 14%(- 6 yen) Appreciated by 4%(+ 2 yen) Depreciated by 12%(Billion yen)

Sales

Operating Income

US$+14.5- 0.8

EUR- 2.0- 1.6

CNY+ 3.0+ 1.8

Other currencies inemerging countries

- 0.5

- 0.3

Total

+15.0

- 0.9

Impact on goodwill amortization and others-1.8
Impact on net sales+3.0

Impact on COGS at Hangzhou factory-1.26/23

Net Sales by Region
Outsideof Japan(billion yen)

255.6
+14% (+7%)

Consolidated+9% (+5%)

140.4+1%76.478.4Europe-3% (+1%)

108.790.9

Americas

35%Japan

FY15 Q3YTDFY14 Q3YTD( ) Excluding FX

65%+20% (+6%)

China+53% (+37%)

Asia & Others+17% (+9%)

26.0
16.9

44.4
38.0

 Japan: Cardiac & Vascular, especially “Ultimaster”, drove increase in overall sales
 Europe: Pursue portfolio restructuring in General Hospital. For Blood Management, negative effect ofweaker EUR against US$ Americas: Continuous increase in sales for Interventional Systems and Neurovascular business China: newly realigned local distribution network enabled us to cover inland customers wider
7/23

Net Sales by Business Segment
FY15 Q3YTDFY14 Q3YTD( ) Excluding FX(billion yen)

BloodManagement
20%Cardiac & Vascular
Cardiac &Vascular
49%General
Hospital
31%

193.2
165.9

+16% (+10%)

General Hospital+0% (-1%)

Blood Management+7% (+3%)

122.8
122.5
80.0
74.8

 Cardiac & Vascular: Performance of overseas Interventional Systems and Neurovascular businessremains strong. “Ultimaster” also drove growth, realizing double-digit growth even when excluding FX.
 General Hospital: Pursue portfolio restructuring
 Blood Management: Continued growth in therapeutic apheresis, along with solid performance of blood
center business in developing market
8/23

Cardiac & Vascular:

In Addition to Strong Overseas Interventional Systemsand Neurovascular Business, Japan Grew Substantially(Billion yen)
FY14Q3YTD

FY15Q3YTD

YoY%

YoY%
(Excl. FX)

Sales

165.9

193.2

+16%+10%

Business Profit (%)

34.2 (21%)

47.8 (25%)

+40%

+26%

<Sales> Increase in sales for overseas Interventional Systems and Neurovascular businesses(mainly in US)+ 15.7 BJPY

 China: newly realigned local distribution network enabled us to cover inland customers wider + 7.6 BJPY<Business Profit> Increase profit and improve portfolio mix through the expansion of “Ultimaster” global sales,overseas Interventional Systems and Neurovascular businesses

9/23

General Hospital: Profitability Back on Recovery Track(Billion yen)
FY14
Q3YTD

FY15
Q3YTD

YoY%

YoY%
(Excl. FX)

Sales

122.5

122.8+0%- 1%

Business Profit (%)

16.5 (13%)

18.2 (15%)

+11%

+12%

<Sales> Japan: Peritoneal dialysate and pain control drugs business continuously expand the sales + 1.7 BJPY Japan: Increase in sales for DM products including glucose monitor and “Nanopass” needle +0.4 BJPY
 Progress in portfolio restructuring in EU- 2.1 BJPY<Business Profit> Continuous cost reduction initiatives at plants and decline in raw material cost due to low oil prices
improved profitability

10/23

Blood Management:

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

FY14
Q3YTD

FY15
Q3YTD

YoY%

YoY%
(Excl. FX)

Sales

74.8

80.0+7%+3%

Business Profit (%)

14.2 (19%)

14.3 (18%)+1%+8%<Sales> Continue to grow therapeutic apheresis and cell processing systems+ 3.3 BJPY Increase sales for Blood Center business in developing countries+ 2.9 BJPY<Business Profit> Negative impact of price declines, especially in the US
 Profit from the products manufactured in US and sold in EU is negatively affected by weaker EUR
against USD.

11/23

Q3 Topics
 Revised upward interim dividend and year-end dividend forecast for FY15 (Nov 5)
 Enacted “TERUMO Corporate Governance Guideline” (Nov5)
 Received FY2015 Good Design Award for three products (Oct 8)

CorporateIV cath needle“Surflo V3”

Needleless system“SurPlug AD series”

Aspiration catheter“Eliminate Plus”

 The 17th Nikkei Global Management Forum:speech about “Innovation” by Mr. Shintaku (Nov 10)

 In Japan, launched new DES, “Ultimaster” (Oct 1)

Business Reimbursement price determined by government for “HeartSheet” autologous
skeletal myoblast sheets (Nov 18)
12/23

New Product Pipeline for FY2015
BusinessProductDES(Ultimaster)

Region Launch◎◎★

JPCoronary

Peripheral

Neuro★

USQ1

PTA balloon(above the knee)

EU, USQ2

PTA balloon(below the knee)

JPFY16Stent (Misago)

ProductApproved
CVin Q2
Launch inOct 1BloodEU,Latin A, FY15Q4
Asia

New aspiration catheter

Business

Embolic particles(beads)

★

EUQ1

Coil assist stent◎

JP

Q1

Liquid embolic glue

★

EUQ1

Disposable centrifugal pump(for PCPS)
Automated blood
component processing
Management system

Region Launch★

JPFY15Q4JPFY16

New DES (Ultimaster)Oct 1, launched in Japan

Distal protection device★

EUFY15Q4◎ Item with large contribution to sales and profit★ Item with highly innovative technology

13/23

Revision of FY15 Guidance Revised FY15 guidance upward to reflect strong Q3(Billion yen)

Net Sales

Operating Income

Ordinary Income

Net Income

Previous Forecast (Sep)

525.0

76.0

73.0

48.5

Revised Forecast

525.0

80.0

75.0

50.0

Change in Amount

-+4.0

+2.0

+1.5

 Ordinary and net income could change depending on FX

 Forecast Q4 performance Expect unchanged strong momentum in overseas Interventional Systems andNeurovascular businesses Uncertainness in Q4;
 A new DES was just launched by a competitor in Japan
 Price compression for Blood Management business (transition to new pricing
is nearly completed and will fully affect on Q4 result) Depreciation of currencies in emerging countries
14/23

50 BJPY Stock Repurchase Program (Feb 5, 2016 – Mar 31)
 Purpose: improve capital efficiency
 A part of agile capitalization strategy in line with TERUMO Corporate
Governance Guideline Direction in capitalization strategy
 Prioritize growth strategy as ever Aggressively implement technological acquisition. Keep exploring opportunities ofother types of M&A as well

 Further consider with balance between growth investment and cash on hand
Reference: Historical ROENet Income
600
6,000

24.2

(BJPY)

47.0

ROE

400
4,000

7.0%

2,000
200

34.1

38.5

12.0%

11.9%
7.2%

7.3%

Equity

08.0%
4.0%
0.0%

FY11

FY12

FY13

FY1415/23

Reference

16/23

FY15 Q3YTD Net Sales and Growth by Region(Billion yen)
Outside of Japan

BusinessSegment

Japan

Cardiac &Vascular

37.8 (+5%) 155.5(+12%) 49.6 (+4%) 67.1(+11%) 20.5(+41%) 18.3(+12%) 193.2(+10%)

Out of C&V
Interventional
Systems*

29.0 (+5%) 122.8(+15%) 39.7(+4%) 49.0 (+16%) 19.5(+43%) 14.6(+16%) 151.9(+13%)

GeneralHospital

94.3 (+1%)

28.5 (-6%)

7.1 (-21%)

BloodManagement

8.4 (-9%)71.6 (+4%)

19.8 (+4%) 35.1 (-1%)

G. Total

140.4 (+1%) 255.6 (+7%) 76.4 (+1%) 108.7 (+6%) 26.0 (+37%) 44.4 (+9%) 396.0 (+5%)

Subtotal*Including Neurovascular business

Europe Americas China

6.5 (-4%)

Asia

G. Total

1.5 (+18%) 13.5 (+3%) 122.8 (-1%)

4.0 (+24%) 12.7 (+14%)80.0 (+3%)(YoY%): Excluding foreign exchange
17/23

Operating Expenses(Billion yen)
FY14
Q3YTD

FY15
Q3YTD

YoY

YoY%

Salaries & Wages

52.157.5+5.4+10%+5%

Sales Promotion11.6

12.6+1.0+9%+5%

Logistical Costs

8.2

8.3+0.1+1%-0%

Depreciation &Amortization

18.4

21.0+2.6+14%+4%Others26.6

27.8+1.2+5%+1%

SG&A Expenses Total

116.9 (32.1%)

127.2 (32.1%)+10.3+9%+4%

R&D Expenses

20.9 (5.8%)

23.3 (5.9%)+2.4+11%+5%Operating Expenses Total

137.8 (37.9%)

150.5 (38.0%)+12.7+9%+4%YoY%(Excl. FX)(%) Against net sales
18/23

Quarterly Results(Billion yen)
FY14 Q3(Oct-Dec)

Q4(Jan-Mar)

FY15 Q1(Apr-Jun)

Q2(Jul-Sep)

Q3(Oct-Dec)

Net Sales

129.9

126.3

128.7

130.5

136.8

Gross Profit

67.8 (52.2%)

65.4 (51.7%)

69.0 (53.7%)

70.4 (53.9%)

75.3 (55.0%)

SG&A Expenses

40.5 (31.2%)

42.4 (33.5%)

41.7 (32.5%)

42.7 (32.7%)

42.9 (31.3%)

R&D Expenses

7.4 ( 5.7%)

8.4 ( 6.7%)

7.9 ( 6.1%)

8.0 (6.1%)

7.4 (5.4%)

Operating Income

19.9 (15.3%)

14.6 (11.5%)

19.4 (15.1%)

19.7 (15.1%)

25.0 (18.3%)(Excl. Amortization)

24.5 (18.8%)

19.4 (15.3%)

24.5 (19.1%)

24.8 (19.0%)

30.1 (22.0%)

Average

US$115 yen

119 yen

121 yen

122 yen

121 yenExchange RateEUR

143 yen

134 yen

134 yen136 yen

133 yen

19/23

CAPEX, R&D Expenses
FY2015
Guidance

FY15 Q3YTDResult(Billion yen)
Progress toGuidance

CAPEX

29.0

21.3

73%

Depreciation &Amortization *45.0

33.2

74%

R&D Expenses

35.0

23.3

67%

Depreciation & Amortization: Including intangibles
CAPEX: Acquisition basis<Downward revision in FY15 CAPEX guidance to 29 BJPY from 36 BJPY>
1. Through reviewing the timing of investments, reduced by 3.0 BJPY
2. Through downsizing the amount of investments, reduced by 2.0 BJPY

20/23

Cash Flow
Operating CF
+51.6
33.2
Depreciation &Amortization

65.3(Billion yen)

Investing and Financing CF
-44.8

34.4

Corpo12.5
rate tax
andIncreaseothers in working
capitalandothers

21.3
CAPEX

10.8
Sale ofinvestment
securities

11.0
Acquisition ofown
shares13.2
Dividend

10.1
Others129.7*
Cash at endof FY2014

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

136.5

*Cash at end
FY15 Q3
21/23

Foreign Exchange Sensitivity(Billion yen)

US$

EUR

Net Sales

1.80.7

Operating Income

0.10.2

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

22/23

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 andare 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 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 independent
research.

23/23