[Terumo Corporation] Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2012: Reference

Financial Results for the Third Quarter of the Fiscal Year Ending March 31,
2012: Reference
Analysis of Business Performance<1> Overview of the Financial Results for the Third Quarter of the Fiscal YearEnding March 31, 2012[1] Overview of Business Results
In the third quarter consolidated cumulative period (between April 1, 2011 andDecember 31, 2011,) the global economy generally lacked strength with the worsening
European credit issue, prolonged economic slowdown in Europe and US and stalling
speed of growth in emerging countries. In Japan, affected by both the appreciation of
the yen, which was accelerated by the financial uncertainties of Europe and US, andslowdown in emerging countries’ economies, the pace of economic recovery after theearthquake slowed down, resulting in harsh business conditions for TERUMO Group.
Under such circumstances, looking at the global healthcare market, in developed
nations where the reduction of national healthcare costs is a common policy challenge,
the trend for strictly examining cost effects on the medical efficiency in addition to theimprovement of QOL (Quality of Life) has become stronger, increasing needs forminimally invasive medical devices. On the contrary, in emerging markets, we can see
steady trends of increasing demand for medical devices driven by improving medical
standards, expanding new opportunities for growth for us to take advantage of ourstrengths.
Launching the target of GP1 or becoming “1 trillion Global Presence” by 2020, ourGroup kicked off a three-year mid-term management plan, “GP1: Change and Growth2013,” starting in the fiscal year ending March 2012. The key of the growth strategy is
not only accelerating the globalization of R&D/production bases to strengthen organic
growth but also to take advantage of and accelerate the integration of CaridianBCT
acquired in April 2011 to strive for dramatic growth.
In the globalization process of production bases, while we proactively promote
production technology transfer to bases outside of Japan, we position production basesin Japan as mother factories to develop advanced manufacturing technologies andallow enhancement of technology improvement. At the same time, in the integration
project with CaridianBCT, we will speedily integrate sales bases and plan to promotebusiness as “TerumoBCT” from the next fiscal year.

-1-[Terumo Corporation] Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2012: Reference

TERUMO Group celebrated the 90th anniversary in September, 2011. Dr. ShibasaburoKitasato and others founded the company in 1921, and under our corporate mission of“Contributing to Society through Healthcare,” we have expanded our range ofbusinesses to the promotion of the widespread use of disposable products for medical
safety and the development of medical devices totally supporting advanced medicaltreatment. We shall continue to develop and launch products responding to market
needs and further contribute to the health of people around the world by promoting
global business expansion.
As a result, our performance in the consolidated period of the third quarter of thisfiscal year is as follows:(Unit: millions of yen)
Q3 YTD

Q3 YTDFYE Mar. 2011

FYE Mar. 2012

Results

Results

Changes %Changes %(Constant currency basis)

Net Sales

244,241

288,914

18.3

22.6

Gross Profit

127,164

153,989

21.1

26.8

Operating Income

48,10049,8753.711.0

Ordinary Income

42,89546,3198.0－

Net Income

27,482

21,962(20.1)－(Note) The results of BCT and Harvest are included.

(Unit: millions of yen)
Q3 YTD

Q3 YTDFYE Mar. 2011

FYE Mar. 2012

Results

Results

Changes %Changes %(Constant currency basis)

Net Sales

244,241

253,4643.8

6.6

Gross Profit

127,164

132,256

4.0

8.0

Operating Income

48,10050,376

4.7

10.5

Ordinary Income

42,89547,197

10.0－

Net Income

27,482

24,289(11.6)－(Note) The results of BCT and Harvest are excluded.

< Net Sales >Net sales were 288.9 billion yen or an 18.3% increase compared with the same periodof the previous year. With existing businesses excluding those of CaridianBCT andHarvest Technologies of which we completed acquisition in 2011, sales were 253.5
billion yen, representing a 3.8% increase compared with the same period of theprevious year.
-2-[Terumo Corporation] Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2012: Reference

Geographic segments(Unit: millions of yen)Area

Q3 YTD

Q3 YTDFYE Mar. 2011

FYE Mar. 2012

ResultsResults

Changes %Changes %(Constant currency basis)

Japan

133,891

141,870

6.0

6.0

Europe41,07942,576

3.6

6.6

Americas42,041

39,171(6.8)

2.4

Asia and others

27,22929,845

9.6

16.5

Total of Outside of Japan

110,349

111,593

1.1

7.5(Note) The results of BCT and Harvest are excluded.

In Japan, our drug-eluting stent, “Nobori,” continued to increase its market share anddrove sales, and I.V. solution and other general hospital products that faced difficulties
due to the effect of the earthquake displayed a gradual recovery. Net sales in Japanthus increased by 6.0% to 141.9 billion yen compared with the same period of theprevious year.
Outside of Japan, interventional systems enjoyed favorable sales in all regions. In
particular, in emerging markets such as China and Latin America, more than 30%
growth on a constant currency basis compared with the same period of the previousyear was achieved, pushing up total sales. However, affected by the ongoingappreciation of the yen, net sales outside of Japan was 111.6 billion yen or a 1.1%
growth compared with the same period of the previous year.
<Gross Profit>Gross profit was 154.0 billion yen or 21.1% growth compared with the same period of
the previous year. With existing businesses, in spite of the effect of the appreciation of
the yen, the amount increased to 132.3 billion yen or 4.0% compared with the same
period of the previous year, thanks to the shift to highly profitable products and theeffect of increased production.
<Operating Income>Though affected by new goodwill depreciation due to acquisitions, operating income
increased by 3.7% to 49.9 billion yen compared with the same period of the previousyear. For existing business, it was 50.4 billion yen or a 4.7% increase compared withthe same period of the previous year, thanks to the increase of gross profit and efficient
operation of general and administrative expenses.

-3-

[Terumo Corporation] Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2012: Reference<Ordinary Income>In spite of the rapid yen appreciation and interest payments due to the increase of
short-term loans for acquisitions, ordinary income increased by 8.0% to 46.3 billion
yen compared with the same period of the previous year. Existing business was alsoaffected by the same factors, but the result was 47.2 billion yen or a 10.0% increase
compared with the same period of the previous year.
<Net Income>Net income decreased by 20.1% to 22.0 billion yen compared with the same period of
the previous year, affected by the tax burden from depreciation of goodwill and loss on
valuation of investment securities. For existing business, net income decreased by
11.6% to 24.3 billion yen compared with the same period of the previous year.
Next, net sales results by business segments are as follows:Business Segments(Unit: millions of yen)
Q3 YTD

Q3 YTDFYE Mar. 2011

FYE Mar. 2012

Results

Results

Changes
Business Segments%

Changes %(Constantcurrency basis)

Net Sales

115,540

113,528

(1.7)

(0.8)

(Japan)93,42891,705

(1.8)

(1.8)

(Overseas)

22,112

21,822(1.3)

3.8

Net Sales

106,840

117,404

9.9

14.7(Japan)29,78939,43832.4

32.4(Overseas)

77,051

77,966

1.2

7.8

Net Sales

18,394

19,044

3.5

7.4(Japan)

7,784

7,798

0.2

0.2

(Overseas)

10,610

11,245

6.0

12.8

Net Sales

3,359

3,486

3.8

4.4(Japan)

2,889

2,927

1.3

1.3(Overseas)

470

559

18.9

23.8

General HospitalBusiness

Cardiac & VascularBusiness

Blood Management
Business

Consumer Healthcare
Business(Note) The results of BCT and Harvest are excluded.

<General Hospital Business>
Some products including I.V. solution that had temporarily experienced a decrease insales due to the earthquake showed a recovery trend, while the business of semisolid
nutritious food for the chronic care market and commissioned business in the D&D(Drug & Device) field were favorable, and though sales decreased compared with the-4-[Terumo Corporation] Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2012: Reference

previous year, the amount of the decrease was steadily reduced.
Outside of Japan, business in Asia and Latin America was favorable, increasing sales
on a constant currency basis, but was substantially affected by the appreciation of theyen. As a result, net sales for the General Hospital Business was 113.5 billion yen,decreasing by 1.7% compared with the same period of the previous year.
<Cardiac & Vascular Business>
In Japan, our drug-eluting coronary stent, “Nobori,” favorably continued to increase
sales and increase its share, while intravascular ultrasound imaging catheter, “ViewIT,”
showed favorable sales.
Outside of Japan, “Nobori” enjoyed favorable sales in Europe, Asia, and Latin
America, while in North & Latin America, the increasing popularity of TRI(interventional treatment of approaching the coronary artery from the blood vessels ofthe wrist) resulted in sales expansion of interventional systems.
Consequently, net sales in the Cardiac & Vascular Business increased by 9.9%
compared with the same period of the previous year, and in spite of the effect of theappreciation of the yen, was 117.4 billion yen.
<Blood Management Business>
In Japan, sales of blood bags recovered, and saw an increase in sales compared withthe same period of the previous year.
Outside of Japan, TACSI, automated centrifuge & separator integration system,enjoyed favorable sales in Europe, pushing up the business sales, but affected by theappreciation of the yen, net sales of the Blood Management Business increased by
3.5% to 19.0 billion yen compared with the same period of the previous year.
<Consumer Healthcare Business>Though there was a slowdown in consumption due to the earthquake in Japan, net
sales were 3.5 billion yen, representing a 3.8% increase compared with the same
period of the previous year.

-5-[Terumo Corporation] Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2012: Reference<2> Forecast for the Fiscal Year Ending March 31, 2012
We reported loss on valuation of investment securities whose value conspicuously
dropped without expectation for recovery by impairment, and loss on sales ofinvestment securities. By reflecting their impact upon forecasts, we revised “Forecastfor the Fiscal Year Ending March 2012”, which we announced on October 27, 2011 asfollows.
Forecast for the fiscal year ending March 31, 2012
(Full year)

Net Sales
Operating Income
Operating Income Rates
Operating Income
Excl. Amortization of Goodwill

Operating Income Rates
Excl. Amortization of Goodwill

Ordinary Income
Net Income
Net Income Rates
Net Income
Excl. Amortization of Goodwill

Net Income Rates
Excl. Amortization of Goodwill(Unit: millions of yen)
Revised Forecast

383,000
62,60016.3%
70,000383,000
62,60016.3%
70,000

－－－－

16.7
(0.0)
－
9.1

18.3%

18.3%

－－

58,00032,500
8.5%
39,90057,00026,000
6.8%
33,400(1,000)(6,500)－(6,500)

0.2(19.6)－(1.5)

10.4%

8.7%

－－-6-

Changes

Changes (%)
year on year

Previous Forecast

[Terumo Corporation] Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2012: Reference<3> Summary of Statements of Cash Flows for the Third Quarter of the Fiscal
Year Ending March 31, 2012
(Unit: millions of yen)

Net Cash Provided by (Used in) Operating Activities
Net Cash Provided by (Used in) Investing Activities
Free Cash Flow
Net Cash Provided by (Used in) Financing Activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Q3 YTD

Q3 YTDFYE Mar. 2011

FYE Mar. 2012

Results

Results

25,757(13,625)
12,132(26,311)(5,245)(19,425)
84,87765,45235,981(235,908)(199,926)
193,082(2,724)(9,568)82,66073,091This English translation has been prepared for general reference purposes. The Company is not responsible for any
consequence resulting from the use of the English translation in place of the original Japanese text. In any legal
matter, readers should refer to and rely upon the original Japanese text of the tanshin (Financial Results) dated asof January 30, 2012-7-