Financial Results for the 2nd Quarter (First Half) ofFiscal Year Ending March 31, 2023 (FY2022)

November 10, 2022

Naoki Muto

Chief Accounting and Financial Officer
Terumo Corporation

Safe Harbor for Forward-Looking Statements and Use ofDocument
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 not intended to be guarantees
of future events or performance. Accordingly, it should be noted that actual
results may differ from those forecasts or 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. Information about products (including products
currently in development) which is included in this material is not intended toconstitute an advertisement or medical advice.

©TERUMO CORPORATION

2 / 25

FY22 Q2 Results Highlights
RevenueFirst time exceeding 200 billion yen; highest-ever revenue
Number of procedures and healthcare demand recovered, all regions outside Japan grew
year-on-year even when excluding FX
Plasma Donation System “Rika” sales began

Operating Profit
Despite cost increases due to inflation, gross profit grew year-on-year in double digits
Portfolio alignment (A part of Cell Therapy Technologies in TBCT)
Adjusted operating profit bounced back to increase year-on-year©TERUMO CORPORATION

3 / 25

P&L Results
Revenue was 400 billion yen, gross profit exceeded 200 billion yen for highest-ever result
Operating profit includes 3.5 billion yen loss from sale of autologous cell preparation business In adjusted operating profit, Q2standalone returned to year-on-year increase
FY 21
Q2 YTD

FY 22
Q2 YTD

3,446
1,862

4,033
2,070（%）(54.0%)(51.3%)

955

1,171（%）(27.7%)(29.0%)

247

297（%）(7.2%)(7.4%)-2-42-

659

560

-15%

（%）

(19.1%)(13.9%)

741

704（%）(21.5%)(17.5%)

653

546（%）(18.9%)(13.5%)

500

403（%）(14.5%)(10.0%)

100M JPY
Revenue
Gross Profit
SG&A Expenses
R&D Expenses

Other Income andExpenses
Operating Profit
Adjusted Operating Profit
Profit before Tax
Profit for the Year©TERUMO CORPORATION

Change vs.
FY21 Q2
17%11%
23%
20%-5%-16%-19%

4 / 25

Changeexcluding FX
impact5%2%

FY21Q2FY22Q2

Change vs.
FY21 Q2

1,729
920

2,060
1,054

(53.2%)(51.1%)

490

605(28.4%)(29.4%)

130

157(7.5%)(7.6%)

--3

-37

--16%

296

255

-14%

(17.1%)(12.4%)

339

345(19.6%)(16.8%)

293250(16.9%)(12.1%)

221

179(12.8%)(8.7%)

9%
8%

-10%

19%
15%
23%
20%

2%
-15%-19%

Operating profit variance analysis (Q2)
(100M JPY)
G/P increment by sales increase:Stability increase same amt. as Q1
Gross margin:

FX impact

R&D spend increase

SG&A increase:

Price increase,reimbursement price revision

Gross margin:

G/P increment bysales increase+5Inflation impact increases, but mix steadily
improving, impact was similar as Q1

255

SG&A, R&D increase:
Within plan; control while spending asnecessary in 2nd half
FX:
Yen depreciation more than Q1-7
FY21 Q2 FY21 Q2
Operating Adjusted
OperatingProfit
Profit©TERUMO CORPORATION

Price:
Price increase impact more than Q1

FY22 Q2 FY22 Q2Adjusted Operating
OperatingProfit
Profit5 / 25Operating profit variance analysis (Q2 YTD)
(100M JPY)
G/P increment by sales increase:
Increased C&V and TBCT demand led to steadyincrease©TERUMO CORPORATION

Price:FX impact

FY21
FY21
YTD
YTD
Operating Adjusted
Profit Operating
19.1% Profit

R&D spend increase-14

SG&A increase:

Price increase,reimbursement price revision

Gross margin:

G/P increment bysales increase+7

Gross margin:
Inflation impact increases, but increased sales ofC&V with mix improvement
Expanded price increase impact by QoQ
SG&A, R&D increase:
Within plan; control while spending as necessary
in 2nd half
FX:
FY22
FY22YTD
YTD
Adjusted Operating
Operating Profit
Profit
13.9%6 / 25

Yen depreciation more than Q1

Revenue by Region(C&V: Cardiac & Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies, PS: Pharmaceutical Solutions, TIS: Interventional Systems)

FY22 Q2
YTDRegional
breakdown

25%

19%

34%

10%
12%

FY 22 Q2 YTDYoY change

Revenue (100M JPY)

Japan

FY20
FY21
FY22Europe

Americas

China

Asia andOthers©TERUMO CORPORATION

Q2 YTD( ) FXN935
1,024
1,012

-1%Q2（Q1）

492
532
514

301 555
683
338
772
386
462

825
519
719

1,063

1,381

101 203147 301
190 384
165
315
374
193484251

7 / 25

Comment(C&V: Cardiac and Vascular; MCS: Medical Care Solutions;
TBCT: Blood and Cell Technologies)

All three companies affected by 7th COVID wave
impact on demand However, 3% revenue increased
QoQ, new products ex. RelayPro grew

13%(5%)

Due to recovery from COVID, all companies grew,
driven by TIS, Blood Center, others TA,
Neurovascular, Pharmaceutical Solutions all grew indouble digits. QoQ,performance, impact of seasonal
factors led to same level result as Q1

30%
(7%)

All companies continued double-digit growth, led by
C&V, where number of procedures is recovering. FX
led sales increase Overall growth driven by TIS,
Blood Center QoQ as well.

27%
(8%)

All companies continued double-digit growth, led byTIS.
QoQ, TIS and Blood Center Solutions saw slightseasonal decreases but saw no lockdown impact

29%
(14%)

TIS and Blood Center businesses led acceleration ofdemand recovery; double-digit growth even excluding
FX QoQ as well, demand recovery led to growth in allcompanies, driven by TIS, Hospital Care Solutions,and Blood Center Solutions

C&V:

6% growth when excluding FX.Number of procedures returned to growth trend including
U.S. Segment profit remains impact of FX and inflation(100M JPY)
Q2

YTD

Comment( ) FXN

1,943
Revenue

2,354

1,494
+21%
(+6%)

821

948

TIS:

Excluding FX, 7% growth overseas in YTD Q2; Number ofprocedures returned to growth trend, Oncology andPeripheral intervention drove. Begun new products sales,
microcatheter and guidewire for coronary in U.S.

Neurovascular:

Even excluding FX, EU/US continued double-digit growth
WEB for aneurysm expanded further in North America,
while new product impact grew similarly with FREDCV:

Steady along with recovery in number of proceduresTA:

Thoracic stent graft RelayPro strong.
Thoraflex Hybrid expanded in EU/US+26

Adj. OP:

Profit grew although inflation impact continued. % sakes
declined due to Yen decpreciation

+38

1,186
+25%

508
Segment
ProfitOP%

320

529+4%(-3%)

196

214

249
+16%

FY20 FY21 FY22

FY20 FY21 FY2221%24%©TERUMO CORPORATION

26%YTD
YoY%

22%

23%

21%8 / 25+275+71

TMCS:

Sales declined in Q2 due to the seventh COVID wave, Sales increase YTD Q2
Segment Profit; Decrease by inflation and FX impact by storong CNY
Q2

YTD

Comment( ) FXN

818

920

Revenue

938+2%
(-1%)

426

482

478-1%

117134
81Segment
ProfitOP%

6570-47%

FY20 FY21 FY22

FY20 FY21 FY2214%

15%©TERUMO CORPORATION

15%9%

15%

YTD
YoY%HCS
Hospital CareSolutions:

Although sales declined in Japan due to 7thCOVID wave, overseas covered with impact
by Yen depreciation. Excluding FX, sales
ddeclined a little.

+8LCSLife CareSolutions:

Demand for thermometers, blood pressure
monitors decreased after extraordinary
demand in previous year Japan price ofblood glucose self-measurement dropped
amid stiff competition-12

PS
PharmaceuticalSolutions:Pharmaceutical container was sales strong,
especially outside Japan, for steady 15%
revenue growth YTD+22Adj. OP:In addition to materal cost inflation after 2nd
half in FY21, utility cost inflation increased.
As well. FX negative impact by CNY
continued

37-39%(-33%)(100M JPY)

8%
9 / 25

TBCT:

Sales grew with double digit and profit declined because of Plasma Donation SystemBegan Plasma donation “Rika” sales(100M JPY)
Q2

YTD

Comment( ) FXN
Blood Centers:

740
520

582

Revenue+27%(+12%)

272

299

395
+32%

89

118

Segment
ProfitOP%

5058

FY20 FY21 FY22

FY20 FY21 FY2217%

18%©TERUMO CORPORATIONAs the need for cell therapy expands, there issteady demand for cell processing
instruments. This includes autologous
preparation business, the sell-off of whichconcluded in October.

Adj. OP:

Declined profit due to the investment
advanced for Plasma Innovation as well asinflation.

55-5%

12%

19%

Steady demand increase along withexpansion of cell therapy procedures. Even
excluding FX, high growth of 9%

Cell Processing:

91-23%(-24%)

20%

Apheresis:

Global recovery in transfusion demand. In
EU/US, automation innovation in whole bloodcollection contributed to increased sales.
Component collection also contributed tosales growth in EU/US, China, etc. Plasma
donatuon system “Rika” sales began

14%10 / 25

YTD
YoY%+119+28+10

Action Ahead
For 2nd half
Implementation of price increase more in 2nd half
To squeeze SG&A expenses control

For Mid. & Long
Anti-inflation in Logistics cost

Selection of freight & air, restructuring of global
logistics network

Anti-inflation in Material Cost

Creation of global optimal procurement route

Anti-inflation in Wage

Stable production & speed-up global optimal
production as in Costa Rica, Vietnam

VC2

Began GBS in Europe & U.S.A. as of Nov 1st©TERUMO CORPORATION

11 / 25

Dividend guidance revision
Continue to increase dividend in a stable manner with the mid-term aim of 30%
dividend payout ratio
FY22 annual dividend of 38 yen (2 yen above previous guidance)

Dividend / share(yen)Dividend payout
ratio

Previous guidance

Current guidance

34.0 yen38.0 yenInterim 17 yen
Period end 17 yenInterim 19 yen
Period end 19 yen

26.9%

28.4%

*FY21 guidance Profit for the year: 92 billion yen; EPS: 122 yen*Interim dividend set according to “Terumo Revises Interim Dividend Distribution and Year-End Dividends Forecast” communication released November
4, 2021.

©TERUMO CORPORATION

12 / 25

Product Pipeline and Major Topics*C&V: Cardiac and Vascular, TMCS: Medical Care Solutions, TBCT: Blood and Cell Technologies,
TIS: Terumo Interventional Systems; HCS: Hospital Care Solutions; LCS: Life Care Solutions

Major Product Launch, Approval Status

Field
TIS

GeneralDrug-eluting coronary stent

Neurova
Flow diverter stentscular
TAHCS

LCS

TBCT

product name
Ultimaster Nagomi
FRED X
Relay Series

General infusion pump

Terufusion infusion pump 18
model

Cell expansion system

To FY21FY22FY23 and beyond

Japan sales

EU launch

Asia, Latin AmericalaunchBegun

Thoracic aorta stent graft

Patch insulin pumpComplete

Medisafe WITH series

Quantum Flex

EU, US sales

US sales expansion, regional expansion

EU sales,US, Japananeurysm indication
approval

In US, dissection andtrauma; in Japan,
dissection indication
approved Comp

Additional models,
RelayBranchclinical trials conductedJapan sales

EU, Latin America
launchAsia launch

Current model
Japan, EU sales
Quantum
global sales

FRED X

lete

Diabeloop Company
AID system
Improved model
collaboration,
Japan launch
regional expansion
considered
Cell processing business
Launch Quantum Flex
aims for double-digit
additional model
growthRelayPro

Major Topics• Group:(1) Announced “Terumo’s Purpose” to Enhance Joint Value Creation with Diverse Stakeholders(2) Three products of WEB, Dexcom G6, and Nagomi received 2022 Good Design Awards (WEB won Good Design Gold Award, which is the Minister of Economy Award)• C&V: R2P (radial approach to peripheral) clinical trial results announced at US academic conference; results indicated efficacy including safety and early discharge• TMCS: Product developed jointly with Kyowa Kirin “G-Lasta® subcutaneous injection 3.6mg BodyPod” approved for manufacture• TBCT: First plasma collections from donors completed using source plasma collection system “Rika”©TERUMO CORPORATION

13 / 25

Reference©TERUMO CORPORATION

14 / 25

Revenue by Segment and Region©TERUMO CORPORATION

15 / 25

Quarterly Trend of Revenue and Operating Profit
Revenue: Q2 results were 19% growth YoY, highest-ever for a quarter. 4% growth QoQOperating profit: Q2 results were 14% decrease YoY, 16% decrease QoQ(100MJPY)

2,060

1,973

1,788

1,729

1,717

1,798
1,652

1,653

1,520

TBCT (Sales)
TBCT（売上）

1,313

TMCS (Sales)
TMCS（売上）
C&V (Sales)
C&V（売上）Consolidated (OP)
全社（営業利益）

181362304238

FY20 FY21 FY22Q1©TERUMO CORPORATION

296334255

FY20 FY21 FY221Q2286231

FY20 FY21 FY221

Q316 / 25215

FY20 FY21 FY221

Q41

P&L (QoQ)(100M JPY)

Revenue

FY21 Q2(Jul-Sep)

Q3(Oct-Dec)

Q4(Jan-Mar)

FY22 Q1(Apr-Jun)

Q2(Jul-Sep)

1,729

1,788

1,798

1,973

2,060

Gross Profit

920 (53.2%)

926 (51.8%)905 (50.3%)

1,016 (51.5%)

1,054 (51.1%)

SG&A Expenses

490 (28.4%)

507 (28.4%)

528 (29.4%)

566 (28.7%)605 (29.4%)

R&D Expenses

130 (7.5%)

128 (7.2%)

144 (8.0%)

141 (7.1%)

157 (7.6%)

Other Income andExpenses-3-5-18-6-37

Operating Profit

296 (17.1%)

286 (16.0%)

215 (12.0%)304 (15.4%)

255 (12.4%)

Adjusted OperatingProfit

339 (19.6%)

330 (18.5%)

273 (15.2%)

359 (18.2%)

345 (16.8%)

Quarterly

USD

110 JPY

114 JPY

116 JPY

130 JPY

138 JPY

Average
RateEUR

130 JPY

130 JPY

130 JPY

138 JPY

139 JPY©TERUMO CORPORATION

17 / 25

SG&A (QoQ)(100M JPY)
FY21 Q2（7-9月）
Salaries & Wages
Ssales Promotion
Logistics
Depreciation
OthersSG & A total

249
40
3950
112
490

Q3（10-12月）

255
44
3951
118
507

Q4（1-3月）

256
45
41
54
132
528

FY22 Q1（4-6月）

298
46
4456
123
566

Q2（7-9月）

312
44
47
59
142
605

（%）

(28.4%)(28.4%)(29.4%)(28.7%)(29.4%)（%）(7.5%)(7.2%)(8.0%)(7.1%)(7.6%)（%）(35.9%)(35.5%)(37.3%)(35.8%)(37.0%)

130

R & D total

621Total

128
635

144
672

141
706

157
761

Quarter

USD

110Yen114Yen116Yen130Yen138YenAverage ratio

EUR

130Yen130Yen130Yen138Yen139Yen©TERUMO CORPORATION

18 / 25

SG&A (YoY)

Salaries & Wages
Sales Promotion
Logistical Costs
Depreciation andamortization
OthersSG&A Expenses Total（%）

R&D Expenses（%）

SG&A Expenses Total（%）©TERUMO CORPORATION

FY 21 Q2 YTD

FY 22 Q2 YTD+/-498
7077

610
90
91

112
20
1498

115

211
955

265
1,171

(27.7%)(29.0%)

247

297(7.2%)(7.4%)

1,202

1,468(34.9%)(36.4%)

Change Change
vs. FY21 excluding
Q1FX impact(100M JPY)
FY21 Q2

FY22 Q2+/-Change
vs. FY21
Q222%
28%
18%

6%
16%
7%

249
4039

312
444763481717%

8%

50

59

918%

53
215

25%
23%

14%
9%

112
490

142
605

30
114

27%
23%

(28.4%)(29.4%)

130

157

2620%

(7.5%)(7.6%)

62176114123%(35.9%)(37.0%)

50266

20%

22%

19 / 25

8%

8%

25%
10%
21%

Adjusted Operating Profit amountFY 21 Q2 YTD FY 22 Q2 YTD

Operating Profit(100M JPY)

FY21 Q2659560

79954049449340741704339345

FY 21 Q2 YTD

FY 22 Q2 YTD

Restructuring loss
Loss on goodwill related to sale of ABbusiness

410-35Others-4Adjustment 1. Amortization ofacquired intangible assets
Adjustment 2. Non-recurring profit
or loss

Adjusted
OperatingProfit<General examplesof adjustment
items>

296

FY22 Q2255• Acquisition related cost
• Nonlife insuranceincome• Lawsuit settlement• Loss on disaster• Impairment loss
• Restructuring loss

• Other one-time profits &losses
Adjustment 2. Major one-time profits &losses©TERUMO CORPORATION

20 / 25

CAPEX, Depreciation and R&D Expenses
FY19FY20FY21

FY22 Q2(100M JPY)

FY22(100M JPY)

CAPEX

895

772

692

328

Guidance
900

Depreciation
Amortization ofacquired intangible
assetsOthers

477

484

532

310

635

157

146

161

95

173

320

CAPEX = C.i.P. record basis, lease depreciation (IFRS16) is not included in
Depreciation
338
371
215
462

FY22 Q2 (32.8B JPY):
Continued investment mainly for TIS, Neurovascular, PS, andBlood & Cell Technologies in production capacity, source plasma collection, R&D, as
well as IT infrastructure (SAP)FY22 guidance (90 billion yen): Executing appropriately in light of FY22 results
FY19R&D Expenses©TERUMO CORPORATION

506

FY20491

FY21518

21 / 25

FY22 Q2297

FY22Guidance580

Cash flow (Q2 YTD)

147328

134
144
136

Cash at the endof FY21

CAPEX = C.i.P. record basis
Aligned with period-end account balance "Cash and cash equivalents" on B/S©TERUMO CORPORATION

22 / 2578Others

Dividends

Stock buyback expenditure

CAPEX

Operating capital gains
and losses

Profitbeforetax

2,053

Depreciation
andamortization

546

140

Corporate
taxes, etc.

344

(100M JPY)

Investing & Financing CF-530

Operating CF
+603

2,126

Cash at the endof FY22 Q1

Cash Flows
Investing & Financing CF (100M JPY)
-340

Operating CF+370
40

144

4Others

144

Stock buyback
expenditure

2,096

200

CAPEX

Operating capital gains
and losses

Profitbeforetax

Depreciation
andamortization

250

Corporate
taxes, etc.

177

17

Cash at the endof FY22 Q1

CAPEX = C.i.P. record basis
Aligned with period-end account balance "Cash and cash equivalents" on B/S©TERUMO CORPORATION

23 / 252,126

Cash at the endof FY22 Q1

FY22 FX Impact Breakdown (Flow, Stock)
FX impact vs FY21 +3.4BJPY
Flow Annual +6.4B JPY: EUR, CNY appreciation positive impact
Rate (JPY)EUR
CNY

FY22 Q2 YTD
FY21 Q2 YTD
Variati
Average rate during Average rate during
onperiod
period
131
1398
17.0

19.9

2.9

Stock Annual -3.0B JPY: FX impact from elimination of unrealized profit on inventory
assets• Rapid JPY depreciation in September, expansion of variation between average rate and quarter-end rate resulted
in negative impact
FY22 Q2 YTD
FY22 End
VariatiRate (JPY) Average rate during
Septemberonperiod
USD
13414511EUR©TERUMO CORPORATION

139

142
24 / 254Foreign Exchange Sensitivity
Annual inpact of 1 JPY depreciation(100M JPY)

USD

EUR

CNY

Revenue

20938

Adjusted Operating Profit

1516<Reference> Impact when JPY depreciation 10%North
America
Adjusted Operating Profit©TERUMO CORPORATION

7EuropeLatin
America EUR Zone Others
1074

1325 / 25Asia
CNYOthers
3136