[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2019: Reference[IFRS] Financial Results for the First Half of the Fiscal Year Ending March 31, 2019: Reference
Analysis of Business Performance
1. Overview of Financial Results for the First Half of the Fiscal Year Ending March 31, 2019(1) Overview of Consolidated Business Results
In the first half of the current fiscal year (from April 1 to September 30, 2018), the global healthcare market wasunderscored by measures to curb medical expenditures in each country. Amid this environment, NHI
reimbursement prices in Japan underwent revisions in April. And as has been the case, there continues to berising demand, chiefly in developed countries, for better healthcare economics to achieve a more focused andefficient allocation of fiscal resources.
Amid this backdrop, in line with the Mid- and Long-term Vision, the Terumo Group, as a “Global Corporationwith Unique Excellence,” aims to become recognized by medical professionals worldwide as a top brand and atrusted manufacturer by winning a high level of trust globally for our total quality (which includes the total
quality of its products, supply, and services).
Financial results for the first half of the fiscal year ending March 31, 2019 are as follows:(million yen)

FYE3/2019

Growth(%)

Growthexcluding
impact of forex
translations (%)

1H

1H

FYE3/2018

Revenue

284,610

284,997

0.1

0.4

Gross profit

155,409

154,588

(0.5)

(0.4)

Adjusted operating profit

64,79855,296(14.7)(14.7)

Operating profit

57,17547,582(16.8)(16.2)

Profit before tax

56,76544,527(21.6)－Profit for the period

41,11534,389(16.4)－

41,171

34,454(16.3)－Profit for the period attributable toowners of the parent-1-

[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2019: Reference(million yen)

FYE3/2019

Growth(%)

Growthexcluding
impact of forex
translations (%)

92,502

91,076

(1.5)

(1.5)

Europe55,33656,237

1.6

0.3

Americas83,62984,3000.8

2.3

Asia, outside Japan

53,141

53,3820.5

0.7

Overseas total

192,107

193,921

0.9

1.3

Total

284,610

284,997

0.1

0.4

Regional sales

1H1H

FYE3/2018

JapanRevenue
Revenue totaled 285.0 billion yen, an increase of 0.1% versus the same period in the previous fiscal year.
In Japan, overall revenue declined year on year. Revenue trended briskly in the General Hospital Company owing
in part to demand in the pain management and surgery product domains, and in the alliance business with otherpharmaceutical companies. Nonetheless, in the Cardiac and Vascular Company, there was negative impact from
NHI reimbursement price revisions and shipping delays of certain products from the Ashitaka factory.
Meanwhile, overseas revenue grew in comparison with a year earlier. Although there was negative impact
from shipping delays at the Ashitaka factory, performance was driven by brisk revenue in the neurovascularbusiness in the Cardiac and Vascular Company and the alliance business in the General Hospital Company, aswell as by demand for blood center products in the Blood Management Company.
Gross profit
Gross profit amounted to 154.6 billion yen, a decline of 0.5% compared with the previous fiscal year. This
mainly reflects negative impact from revisions to NHI reimbursement prices.

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[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2019: Reference

Adjusted operating profit
In the period under review, adjusted operating profit totaled 55.3 billion yen, a decline of 14.7% year on year,
due to an increase in selling, general and administrative expenses and, in particular, research and development
expense.
That being said, adjusted operating profit factors out amortization expense for intangible assets obtained duringacquisitions and one-off income and expenses from operating profit. In addition, adjusted operating profit isconsistent with segment profit. We are disclosing adjusted operating profit as we are using it as an earnings
management indicator.
Operating profit
Operating profit totaled 47.6 billion yen, a deterioration of 16.8% year on year due to the decline in adjusted
operating profit.
Profit before tax
Profit before tax was 44.5 billion yen, a decrease of 21.6% versus the same period a year earlier. This reflects theposting of a forex translation loss, versus a forex translation gain in the same period a year earlier.
Profit for the period attributable to owners of the parent
Profit for the period attributable to owners of the parent totaled 34.5 billion yen, a drop of 16.3% year on year.
Although corporate income tax outlays declined due to a reduction in the federal corporate income tax rate
subsequent to the tax reform in the United States, decline in profit before tax hit profit for the period
attributable to owners of the parent
Revenue results by reporting segment are as follows:(million yen)

FYE3/2019

Growth(%)

Growth excluding
impact of forex
translations (%)

157,572

153,464

(2.6)

(2.5)

(Japan)26,36522,326(15.3)(15.3)(Overseas)

131,206

131,137

(0.1)

0.0

Revenue

77,705

81,2284.54.6(Japan)

60,651

62,834

3.6

3.6(Overseas)

17,053

18,394

7.9

8.3

Revenue

49,21450,1731.9

2.8(Japan)

5,378

5,806

8.0

8.0

1H

1H

FYE3/2018
RevenueSegment
Cardiac andVascularCompany
General HospitalCompany

Blood
Management-3-[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2019: ReferenceCompany(Overseas)

43,83544,366

1.2

2.2

Cardiac and Vascular Company
Revenue in the Cardiac and Vascular Company totaled 153.5 billion yen, a reduction of 2.6% year on year.
Although sales were brisk in the neurovascular business, there was negative impact from revisions to NHI
reimbursement prices and from shipping delays at the Ashitaka factory.
General Hospital Company
In the General Hospital Company revenue amounted to 81.2 billion yen, an increase of 4.5% versus the same
period a year earlier. This reflects brisk demand for products in the pain management domain, including Acelio—an acetaminophen antipyretic analgesic, and AdSpray, a spray type adhesion barrier. In addition, there was anexpansion in the alliance business with pharmaceutical companies.
Blood Management Business
Revenue in the Blood Management Company totaled 50.2 billion yen, a rise of 1.9% year on year. This isattributable to strong sales to blood centers, mainly in Japan and the Americas. In addition, revenues grew in thefield of therapeutic apheresis system in Europe.
(2) Overview of Consolidated Balance Sheets
Total assets at the end of the first half stood at 1,134.9 billion yen, an increase of 56.0 billion yen versus March
31, 2018. This is mainly attributable to an increase of 31.7 billion yen in property plant and equipment along withgoodwill and intangible assets mainly due to yen’s depreciation against the US dollar compared with March 31,2018 as well as investment for production capacity and new IT system.
Total liabilities totaled 456.9 billion yen, a decrease of 71.7 billion yen. This was mainly attributable to a 58.3
billion yen decline in bonds and borrowings due to the conversion of convertible bonds.
Total equity stood at 678.1 billion yen, an increase of 127.6 billion yen. This was mainly attributable to anincrease of 64.6 billion yen stemming from impact owing to (a decline in treasury stock allocated to) theconversion of convertible bonds, and an increase of 37.5 billion yen reflecting forex translation gains at overseas
sales offices, owing to impact mainly from the forex market.

(3) Forecasts, including the Consolidated Financial Results for the Fiscal Year Ending March 31, 2019
We are reiterating the consolidated financial forecasts we released on August 8, 2018. We anticipate an
ongoing murky business environment including changes in the environment surrounding the medical device
and pharmaceuticals industries, and forex rate trends. However, to achieve our group goals, we plan to pourenergies into the development of high added-value products that will boost the quality and efficiency ofhealthcare, sales expansion, continuous improvement to manufacturing costs, and effective use of selling,
general and administrative cost.

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