[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2018: Reference

Financial Results for the First Half of the Fiscal Year Ending March 31, 2018: Reference

Analysis of Business Performance
1. Overview of Financial Results for the First Half of the Fiscal Year Ending March 31, 2018
(1) Overview of Consolidated Business Results
In the first half of the current fiscal year (from April 1 to September 30, 2017), the global healthcare market was
highlighted by the following trends. Amid the ongoing movement in developed countries to curb medical
expenditures, lawmakers in the United States moved forward with discussions to revision to the affordable careact, which was introduced for the purpose of lowering the uninsured rate. In Japan, the government continued toexamine the introduction of cost-benefit analysis for pharmaceuticals and medical devices as an approach toachieving a more focused and efficient allocation of fiscal resources.

Amid this backdrop, as a global corporation with unique excellence, the Terumo Group continued to work toward
its Mid- to Long-term Vision of becoming recognized by medical professionals worldwide as a top brand and atrusted manufacturer. To this end, we are focused on earning 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, 2018 are as follows:

Net sales
Net sales totaled 284.6 billion yen, an increase of 16.1% compared with the same period of the previous fiscalyear.
(million yen)
1H

1H

FYE3/2017

FYE3/2018

Growth (%)

Growthexcluding
impact of forex
translations (%)

Net sales

245,110284,610

16.111.8

Gross profit

134,974

159,713

18.3

14.9

Operating income

39,37047,89921.7

20.2

Ordinary income

30,601

46,971

53.5-

Profit attributable to owners of20,423

32,967

61.4-parent[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2018: Reference(million yen)
Regional sales

1H

1H

FYE3/2017

FYE3/2018

Growth (%)

Growthexcluding
impact of forex
translations (%)

Japan

91,80392,5020.8

0.8

Europe45,451

55,336

21.7

14.4

Americas64,652

83,62929.4

21.9

Asia and others

43,20353,14123.0

17.2

Overseas total

153,306

192,107

25.3

18.3

Total

245,110284,610

16.1

11.8

In Japan, overall sales in the region rose year on year. In the Interventional Systems (TIS) business in the Cardiac
and Vascular Company, sales were brisk for access devices, including vascular closure devices, the VISICUBE,
an intravascular ultrasound system, and AltaView, an intravascular ultrasound catheter. The sales growth posted
in the Cardiac and Vascular Company offset the sales decline in the General Hospital Company and the BloodManagement Company.

Meanwhile, overseas sales rose compared with a year earlier. In the TIS business in the Cardiac and VascularCompany, sales were brisk for the access devices, including vascular closure devices, and the Ultimaster, a drugeluting stent. Sales in the neurovascular business also grew substantially, owing in part to brisk sales for products
such as coils for the embolization of cerebral aneurysms. Furthermore, in the Blood Management Company, sales
grew to blood centers and in the field of therapeutic apheresis systems.

Gross profit
Gross profit totaled 159.7 billion yen, a rise of 18.3% compared to the same period of the previous fiscal year.
This mainly reflects contribution from an expansion in sales at the Cardiac and Vascular Company, which boasts ahigh profit margin.

Operating income
Operating income came to 47.9 billion yen, an increase of 21.7% year on year. The increase in selling, general andadministrative expenses was absorbed by a growth in gross profit.

Ordinary income
Ordinary income stood at 47.0 billion yen, a growth of 53.5% year on year. This reflects the increase in operating
income as well as the gain on foreign exchange translations posted in the first half versus a loss on foreignexchange translations in the same period a year earlier.

Profit attributable to owners of parent
Profit attributable to owners of parent came to 33.0 billion yen, a rise of 61.4% year on year, owing to an increase[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2018: Reference

in ordinary income and also in part attributable to a reduction in tax rate.

Net sales results by company are as follows:(million yen)Segment

1H

1H

FYE3/2017

FYE3/2018

Growth (%)

Growth excluding
impact of forex
translations (%)

Cardiac andNet sales

121,540

157,572

29.6

23.6

Vascular Company(Japan)

24,50026,365

7.6

7.6(Overseas)

97,039131,206

35.2

27.6

General Hospital

Net sales

78,24277,705

(0.7)

(1.9)

Company(Japan)61,48560,651

(1.4)

(1.4)

(Overseas)

16,756

17,0531.8(3.9)

Blood

Net sales

45,22749,2148.8

3.6

Management(Japan)

5,717

5,378

(5.9)

(5.9)

Company(Overseas)

39,51043,83510.9

4.9

Cardiac and Vascular Company
In Japan, sales in the TIS business rose year on year underpinned by strong sales of access devices, including
vascular closure devices, the VISICUBE, an intravascular ultrasound system, and AltaView, an intravascularultrasound catheter.

Meanwhile in the TIS business overseas, sales trended briskly for access devices, including vascular closure
devices, and the Ultimaster, a drug-eluting stent. In the neurovascular business, sales were robust for coils for theembolization of cerebral aneurysms, which use hydrogel, and suction catheters. We also posted sales growth in
the CV business, owing to rapid sales of oxygenators. Accordingly, overseas sales in this company rose
substantially overall.

In light of this performance, net sales in the Cardiac and Vascular Company totaled 157.6 billion yen, a growth of29.6% year on year.

General Hospital Company
In Japan, sales in the second quarter trended toward recovery for infusion line products, including needlelessinfusion systems, and infusion and syringe pumps. However, in the first quarter, there was negative impact due to
distributor inventory adjustments and refrained purchasing of infusion and syringe pumps. Other negative
catalysts included the termination of the supply of some pharmaceutical and healthcare products and downsizing
related accounts to improve profit margins.

Reflecting these factors, net sales in the General Hospital Company were 77.7 billion yen, a decrease of 0.7%
versus the same period a year earlier.

[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2018: Reference

Blood Management Company
Sales were strong to blood centers in Latin America and Asia. Also therapeutic apheresis system sales grew,
mainly in North America.

Consequently, net sales in the Blood Management Company totaled 49.2 billion yen, a rise of 8.8% year on year.

(2) Overview of Consolidated Balance Sheets
Total Assets
As of September 30, 2017, total assets stood at 1,073.5 billion yen, an increase of 52.1 billion yen compared toMarch 31, 2017. Current assets amounted to 406.4 billion yen, an increase of 57.2 billion yen, primarilyattributable to an increase in cash and deposits.

Non-current assets came to 663.5 billion yen, a decrease of 4.6 billion yen. Property, plant and equipment
increased 5.2 billion yen, intangible assets were down 9.9 billion yen, and investments and other assets rose 200
million yen.

Total Liabilities
Liabilities came to 545.5 billion yen, an increase of 13.7 billion yen.

Current liabilities totaled 122.8 billion yen, a decline of 125.6 billion yen primarily attributable to the repaymentof short-term loans payable.

Non-current liabilities were 422.7 billion yen, an increase of 139.2 billion yen, owing in part to a rise in long-termloans payable.

Total Net Assets
Total net assets totaled 528.0 billion yen, a growth of 38.4 billion yen.

Terumo’s equity ratio stood at 49.1%, a rise of 1.2 percentage points compared with March 31, 2017.

(3) Forecasts, including the Consolidated Financial Results for the Fiscal Year Ending March 31, 2018
We are reiterating our consolidated financial forecasts for the first half and full year, which we released on
October 19, 2017. Terumo Puerto Rico LLC, which produces vascular closure devices, has suspended its
production activities since September 20, 2017 due to the impact of Hurricane Maria. Though the impact of thedisaster on Terumo's business performance of second-half is being examined, at this moment, we are not changing
the full-year results forecast, since we anticipate achieving the full-year forecast even with the potential impact
taken into account.