Financial Results for the First Quarter ofFiscal Year Ending March 31, 2020 (FY2019)

Terumo Corporation
Chief Accounting and Financial Officer
Naoki Muto
August 8, 2019

Profit Above the Guidance with Double Digit Growth
FY18 Q1
Revenue
Gross Profit

FY19 Q1(billion JPY)

YoY%

YoY%
(FXN)

143.0

152.5

+7%

+9%

79.9 (55.8%)

85.2 (55.8%)+7%+9%

SG&A Expenses

43.5 (30.4%)

44.5 (29.2%)+2%+4%

R&D Expenses

11.3 ( 7.9%)

11.8 ( 7.8%)+5%+4%

Other Income and Expenses

0.80.4--

Operating Profit

25.9 (18.1%)

29.2 (19.1%)

+13%

+17%

Adjusted Operating Profit

30.5 (21.4%)

33.9 (22.3%)

+11%

+18%

Profit before Tax
Profit for the Year

23.4 (16.4%)

28.8 (18.9%)+23%

18.1 (12.6%)

22.8 (14.9%)+26%

Average Exchange Rates

USD
EUR

109 JPY
130 JPY

110 JPY
123 JPY Revenue : Cardiac and Vascular Company returned to double digit growth driving
overall growth Adjusted operating profit : Slightly behind the plan in expenses especially in SG&A
 Profit before tax : FX loss decreased from 2.3 B JPY in FY18 Q1 to 0.3 B JPY in FY19 Q1
2/21

Adjusted Operating Profit Variance Analysis

7.20.1

0.6

GrossmarginPrice(billion JPY)
0.4
MDR
1.2-0.2
0.7
SG&A
IT
increase
R&D
investincrease
ment-0.2

0.0
Others

1.0
FX
4.7

4.6

30.5

G/P
incrementby salesincrease

33.9

29.2
25.9
FY18 Q1 FY18 Q1
Operating Adjusted
Profit Operating
Profit

FY19 Q1 FY19 Q1
Adjusted Operating
Operating
ProfitProfit3/21

Revenue by Region
RevenueYear-on-Year Revenue Comparison
billion JPY

100% = 152.5 B JPY

30%

20%

46.0
44.0Japan
Europe30%
China9%11%Asia andOthers

13.6
10.9
16.9
15.7

Comments( ) FXN

Japan : TIS business in Cardiac and VascularCompany returned to double digit growth.
All companies achieved positive growth
Europe : Cardiac and Vascular Company
covered the negative growth in BloodManagement Company+4%(+6%)46.0
42.8

Americas

YoY%

+1%

30.0
29.6

FY19 Q1
FY18 Q1+8%(+8%)+25%(+31%)+7%(+11%)

Americas : Driven by double digit growth inboth Cardiac and Vascular Company andGeneral Hospital Company. Neurovascularbusiness grew >30% with the effect of newproduct launch
China : Driven by >30% growth in Cardiac
and Vascular Company including Essen DES
Asia and Others : Double digit growth inCardiac and Vascular Company covered thenegative growth in General HospitalCompany4/21

Revenue by Business Segment
RevenueYear-on-Year Revenue Comparison
YoY%

billion JPY

100% = 152.5 B JPY

FY19 Q1
FY18 Q1

Comments( ) FXN

58%Cardiac
andVascular

88.5
79.5

39.8

GeneralHospital

38.8

+11%

(+14%)

Driven by TIS business returning todouble digit growth as well as
Neurovascular business with 30%growth+2%

Driven by Alliance business continuing>30% growth worldwide-2%

Negative FX impact and recoil from thebrisk sales in FY18 Q4(+3%)

26%

16%BloodManagement

24.224.6(+1%)

5/21

Cardiac andVascular: Double Digit Growth in Revenue and Profit
FY18 Q1

FY19 Q1

YoY%(billion JPY)

Major Topics

ImpactTIS : Returned to double digit growth in/outside JP+6.0( ) FXN

79.5

88.5

+11%

Revenue(+14%)

Neurovascular : 30% growth with solid start of WEB
in US+2.8

CV : Affected by recalculation of JP reimbursement
0.0

prices in Jan. 2019
Vascular graft : Smooth transition to direct sales ofstent grafts in JP

Adjusted
OperatingProfit(%)

19.9

24.5

+23%(+29%)
(25%)

+0.2

Sales growth with improved product mix in TIS andNeurovascular. SG&A expenses slightly behind the plan

(28%)
6/21

GeneralHospital : A Start Largely in Line with the Guidance
FY18 Q1

FY19 Q1

YoY%(billion JPY)

Major Topics

Impact( ) FXN

General hospital products : Impact of the financial
challenge in Indonesian national health insurance
38.8

39.8+2%(+3%)

Revenue-0.3

Pharmaceutical and nutrition : Solid growth inPain management products & adhesion barrier
covered negative growth in I.V. solutions

0.0

DM Healthcare : Temporary sales drop before
launching a new blood pressure monitor-0.1

Alliance : Good momentum in/outside JP.
Continuing >30% growth
Adjusted
OperatingProfit
(%)

6.2
(16%)

5.2
(13%)

-16%

(-15%)+1.3

YoY% affected by depreciation cost of Terumo Yamaguchi
D&D due to production started in FY18. Increased expenses
as planned in FY19 Q1
7/21

Blood: Revenue Slightly Behind the Plan,
Management Profit as Planned
FY18 Q1

FY19 Q1(billion JPY)

Major Topics

YoY%

Impact( ) FXN

24.6

24.2

Revenue-2%(+1%)

Blood center products : Recoil from the brisk
sales in FY18 Q4 mainly in overseas
Therapeutic apheresis : Recoil of replacementwith the latest version of consoles in FY18 Q1
Cell processing : double digit growth in EU & Asia

Adjusted
OperatingProfit(%)

3.4(14%)-24%

2.6(-12%)

-0.4
-0.1
+0.2

Huge negative impact of FX. Slightly ahead of theplan in R&D expenses, still a start as planned ingeneral(11%)
8/21

Major Topics in FY19 Q1 Pursued work style reform through introducing a staggered working hours andCorporate

improving telework system (Apr) Established new group identity: newly instituted "Core Values" (Apr) Introduced restricted stock remuneration plan (Jun) Launched a full-scale sales of intrasaccular aneurysm
treatment device “WEB” in US (Apr)Business Launched stentriever “Tron FX” in Japan (Apr) Secured exclusive global rights to Orchestra BioMed'sVirtue® Sirolimus-Eluting Balloon (Jun)
9/21New Products Pipeline in FY19
Category
AccessCoronary

Products
Closure device for distal
radial approach

JP

PTCA balloon

EU,Asia

Peripheral Stent (TRI)
Intrasaccular aneurysm treatment
device (WEB)Distal access catheter
NeuroCV
VasculargraftRegion Launch

Generalhospital
Pharmaceutical

JP, USUS(Sofia EX)

EU, US

Mini balloon

EU, US

Aspiration catheter

JP

Stentriever

JP

Next generation of oxygenator

JP

Heart lung machine (re-launch)JP

Large-bore vascular graft(Triplex Advanced)

JP

Category

Launched

Products
Next generation of syringe pumpJP

Narcotic analgesic for
postoperative pain management(Fentanyl injection)

JP

Adhesion barrier (AdSpray mini)

JPContinuous glucose monitoringsystem

JPBlood glucose monitoring system

JPDM andconsumer Insulin patch pump
healthcare
Next version of blood pressuremonitor
Next version of thermometer

Launched

BloodManagementRegion Launch

Fill and finish system for cell therapy
processing (FINIA)

Launched

JPJP
JP
Global Launched

10/21

Enhances Coronary Interventional Product Portfolio
Secured exclusive global rights to Orchestra BioMed'sVirtue® Sirolimus-Eluting Balloon (released on June 13th)
 The first and only non-coated drug-eluting angioplasty balloon that delivers a proprietarybioabsorbable, sustained-release formulation of sirolimus, the gold standard drug forpreventing restenosis following a percutaneous interventional procedure US FDA granted Virtue SEB Breakthrough Device Designation for treatment of coronary
in-stent restenosis in Apr 2019
 A one-time, up-front payment of 30 million USD and an equity commitment of 5 million
USD + milestone payments and royalties payment on sales
 Initiate a US registration trial within year 2020, and seek to make Virtue SEB the first drugeluting balloon approved for coronary use in the US in the next few years. Globally expand
the business later on
11/21

Reference

12/21

FY19 Q1 Revenue and Growth by Region(billion JPY)

BusinessSegment

Japan

Cardiac andVascular

12.1

Out of C&V
Interventional
Systems*

Overseas
Subtotal

EuropeAmericas

China

Asia

Grand
Total

(+8%)

76.4

(+15%)

22.1

(+9%)

33.7

(+11%)

11.7(+36%)

8.8(+21%)

88.5(+14%)

9.2

63.2

18.0

26.7

11.1

7.4

72.4

(+9%)

(+17%)(+10%)(+14%)(+37%)(+21%)(+16%)

GeneralHospital

31.2

(+3%)

8.5

(+1%)

2.2(+8%)

1.9(+12%)0.6(-1%)

3.9(-6%)

39.8

BloodManagement

2.5

21.7(+1%)

5.8(-2%)10.4(-1%)

1.3(+9%)4.2(+9%)

24.2

46.0

106.6

30.0

46.0

13.6

16.9

152.5

Grand Total(+2%)(+4%)*Including Neurovascular business(+10%)

(+6%)

(+8%)

(+31%)(+11%)

(+3%)

(+1%)

(+9%)

(YoY%): FXN
13/21

Operating Expenses(billion JPY)

FY18 Q1

FY19 Q1

YoY

YoY%

YoY%

Salaries & Wages

21.7

21.9+0.2+1%+3%

Sales Promotion

4.5

4.9+0.4+9%+11%

Logistical Costs

3.2

3.5+0.2+7%+9%Depreciation &Amortization

3.4

4.5*+1.1+32%+33%

Others10.743.5-1.0-9%-8%(30.4%)

9.7*
44.5(29.2%)+1.0+2%+4%

11.3(7.9%)

11.8(7.8%)+0.5+5%+4%

54.8

56.4+1.6+3%+4%

SG&A Expenses Total
R&D Expenses
Operating Expenses
Total(38.3%)(37.0%)(FXN)*Reclassification between Depreciation & Amortization and Others due to IFRS 16 (Lease Accounting)

14/21

Quarterly Results(billion JPY)

FY18 Q1(Apr-Jun)

Q2(Jul-Sep)

Q3(Oct-Dec)

Q4(Jan-Mar)

FY19 Q1(Apr-Jun)

Revenue

143.0

142.0

158.6

155.9

152.5

Gross Profit

79.9

74.7

87.6

84.3

85.2

SG&A Expenses(55.8%)(52.6%)(55.2%)(54.1%)(55.8%)

43.5

43.5

45.0

46.7

44.5

(30.4%)(30.5%)(28.4%)(29.9%)(29.2%)

R&D Expenses

11.3

12.4

12.3

11.6

11.8

Other Incomeand Expenses

0.8

2.9

0.6

2.1

0.4

25.9

21.7

30.9

28.2

29.2

Operating Profit
Adjusted
Operating Profit
Average
Exchange
Rates(7.9%)(8.8%)(7.7%)(7.5%)(7.8%)(18.1%)(15.3%)(19.5%)(18.1%)(19.1%)

30.5

24.8

35.9

30.9

33.9

(21.4%)(17.4%)(22.6%)(19.9%)(22.3%)USD

109 JPY

111 JPY

113 JPY

110 JPY

110 JPY

EUR

130 JPY

130 JPY

129 JPY

125 JPY

123 JPY
15/21

Adjusted Operating Profit : Adjustments(billion JPY)

FY18 Q1

FY19 Q1

Operating profit

25.9

29.2

Adjustment 1. Amortization of acquired
intangible assets+3.8+4.0

Adjustment 2. Non-recurring profit or loss

+0.9+0.8*

Adjusted operating profit

30.533.9<General examples of adjustment items>
 Acquisition related cost  Nonlife insuranceincome Lawsuit settlement
 Loss on disaster Impairment loss Other one-time Restructuring loss
profits & losses* FY19 Q1 main items inAdjustment 2. Non-recurring profit or loss
Business reorganization cost

Amount+0.3

16/21

CAPEX and R&D Expenses
Amortization ofacquired
intangible assets
and goodwill
39.1

CAPEX

45.4

20.8

24.6

Amortizationof acquired
intangible
60.8
assets43.6 42.0
14.5

75.0

14.7

14.6
18.3

27.6

29.4

41.3

50.0

11.8
FY17

JGAAP <- -> IFRS

FY18

 Expand investment inproduction capacity andspace as well as IT in FY19
 Under IFRS since FY17
 Depreciation includesamortization of nonacquired intangible
assets & depreciation ofcapitalized R&D
expenses

11.4
4.0
34.3
7.4
CAPEX = C.i.P. record basis  Further promote R&D

47.7

R&D
Expenses
FY1649.0

44.0

Depreciation

33.6(billion JPY)

FY19 Q1

FY19Guidance

activities mainly for TIS,
Neurovascular & BloodManagement Company Capitalized R&D expenses
are included in CAPEX
FY18: 2.4
FY19 Q1: 1.2
FY19 guidance : 3.2
17/21

Cash Flows
Operating CF+19.2
12.5
Depreciation
andamortization

28.8

123.0

ProfitbeforetaxInvesting & Financing CF-32.4(billion JPY)

8.4
Incometaxes

13.7
Workingcapitalincrease

18.3

CAPEX

10.0
Dividends

Others4.0
109.8

Cash at theend of FY18

CAPEX = C.i.P. record basis
Cash at the end of each fiscal year is equal to “cash and cash equivalents” on BS

Cash at theend of FY19 Q1
18/21

Foreign Exchange Sensitivity
Annual impact of 1 JPY depreciation(billion JPY)

USD

EUR

CNY

Revenue

1.7

0.8

2.2

Adjusted OperatingProfit

0.0

0.5

1.2

<Reference> Impact when JPY is depreciated by 10%Adjusted
OperatingProfitNorth
Latin
America America
-0.1

1.0

EUR

6.5

EMEA

Others

CNY

1.3

1.9

Asia

Others3.6

19/21

The Status of Convertible Bonds
 Detail of the bonds (issued in Dec. 2014)*After two-for-one stock split implemented in Apr. 2019

Maturity

Aggregateprincipal amount(billion JPY)

Dec. 2019

50.0

0.0%

1,919

2,495

approx. 26 M sharesDec. 2021

50.0

0.0%

1,919

2,495

approx. 26 M shares

Total

100.0

Conversion price(JPY)

CouponContingent
conversion trigger
price (JPY)

Number of sharesrequired to be issuedfor conversion

approx. 52 M shares Status of conversion (as of Jul. 31, 2019)
Amount of shares issued for conversion

Number of shares issued for conversion

Convertible Bonds
due Dec. 201950.00 B JPY (100.0%)

25.9 M shares (3.4%)

Convertible Bonds
due Dec. 2021

25.24 B JPY (50.5%)

13.1 M shares (1.7%)

Total

75.24 B JPY (75.2%)

39.0 M shares (5.1%)

Bonds(% against the total amount of bond)(% against total number of issued shares)

Allocated treasury shares to the shares issued for conversion•

Status of treasury shares: 16.3 M shares(at the end of Jul. 2019, treasury stock cost per share : 1,949 JPY, % against total number of issued shares : 2.2%)

20/21

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 notintended 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, fluctuationsof foreign exchange rates, and state of competition.
The market share information in this presentation is partly derived from our own independent research.

21/21