Financial Results for the First Quarter ofFiscal Year Ending March 31, 2021 (FY2020)

August 6, 2020

Naoki Muto
Chief Accounting and Financial Officer
Terumo Corporation

Despite The COVID-19 Impact on Cardiac & Vascular,
The Overall Impact Was Mitigated by Other Companies(billion JPY)

FY19 Q1

FY20 Q1

YoY%

YoY%
(FXN)

Revenue

152.5

131.3

-14%

-11%

Gross Profit

85.2 (55.8%)

68.9 (52.5%)

-19%

-15%

SG&A Expenses

44.5 (29.2%)

40.1 (30.5%)

-10%

-8%

R&D Expenses

11.8 ( 7.8%)

11.2 ( 8.5%)-6%-4%

Other Income and Expenses

0.40.5--Operating Profit

29.2 (19.1%)

18.1 (13.8%)

-38%

-31%

Adjusted Operating Profit

33.9 (22.3%)

21.7 (16.5%)

-36%

-30%

Profit before Tax

28.8 (18.9%)

17.9 (13.6%)-38%

Profit for the Year22.8 (14.9%)

14.0 (10.7%)-39%

110 JPY
123 JPY

108 JPY
119 JPY

Average Exchange Rate

USD
EUR

Revenue: Although there was the COVID-19 impact on Cardiac and Vascular, the impact onGeneral Hospital as well as Blood and Cell Technologies was minor
Adjusted Operating Profit: Year-on-year negative growth due to the revenue decrease. While the control on
R&D Expenses was limited, SG&A Expenses was controlled below the previous year level©TERUMO CORPORATION

2 /24

Adjusted Operating Profit Variance Analysis(billion JPY)
4.7
9.1

33.9
29.2

2.8
G/P
decrement
Grossby sales
decrease margin

0.4
1.4

0.7

Price
MDR
-0.3
-0.4
JP
IT
Reimburseinvestment
ment-1.1-0.3

FY19 Q1 FY19 Q1
Operating AdjustedProfit
OperatingProfit©TERUMO CORPORATION

3.4

R&D
decrease

2.0

FX 2.7

3.6

SG&A
decrease
21.7
18.1

FY20 Q1 FY20 Q1
Adjusted OperatingOperatingProfitProfit3 /24

Revenue by Region
Revenue

FY20 Q1
FY19 Q1

Year-on-Year Revenue Comparison
billion JPY

100% = 131.3 B JPY

YoY%Comments( ) FXNJapan: Although C&V was impacted by theCOVID-19, there was increased demand for

34%

44.3

Japan

46.0-4%

thermometers and antiseptic hand gel in GH
Europe: Double digit year-on-year decline
in C&V. Stable growth in GH and TBCT by

25.5
30.0Europe-15%

high single digit to double digit(-12%)

Americas: Although double digit year-on-19%
36.3

Americas

28%
China

8%

Asia and11%

Others©TERUMO CORPORATION

46.0
10.2
13.6-21%(-18%)

China: While showing overall quick recovery,
Neurovascular was negatively impacted by(-21%)

timing issue for order from distributors

(-7%)
4 /24

digit growth driven by Latin America-25%-11%

15.1
16.9

year decline in C&V, GH made near-double

Asia and Others: The COVID-19 impact
level was lower for all companies
compared with Europe and Americas

Revenue by Business Segment
RevenueYear-on-Year Revenue Comparison
billion JPY

100% = 131.3 B JPY

YoY%( ) FXN51%

FY20 Q1
FY19 Q1

CardiacandVascular

67.3

-24%
88.5

GeneralHospital(-21%)

39.2-1%39.8(-0%)

Comments
There was decrease in demand due topostponement of elective procedures.
Observing recovering momentum in theperformance from June
In addition to double digit growth inAlliance business, increased demand forthermometers and antiseptic hand gel
mitigated the overall sluggish
performance due to decreased demand

30%

19%

Bloodand Cell
Technologies©TERUMO CORPORATION

24.7+2%

24.2

(+7%)
5 /24

Although there was impact by decreasein the number of therapeutic apheresis,
stably grew driven by automated bloodcollection system

Cardiacand Vascular: The COVID-19 Impact Was within the Assumed Range(billion JPY)

FY19 Q1

FY20 Q1

YoY%( ) FXN

88.5
67.3

-24%

Revenue

AdjustedOperatingProfit(%)(-21%)

24.5-49%(-45%)©TERUMO CORPORATION

Impact

TIS: Impact of the decreased demand wasobserved among all product categories-14.0

Neurovascular: Decline in the procedural
volume of aneurysm treatments-4.4

Cardiovascular: Impact of the decreased
demand mitigated by the increased revenueof hardware in Japan-1.8

Vascular graft: Decreased demand for both
surgical grafts and stent grafts-1.0

Decreased due to the revenue decline.
12.4

(28%)

Major Topics(18%)

Decrease in profit was partially mitigated by
the effect of manufacturing cost reduction
due to increased inventories for the purposeof stable supply
6 /24

GeneralHospital: Maintained Profitability by Expense Control(billion JPY)

FY19 Q1

FY20 Q1

YoY%

Major Topics

ImpactGeneral hospital products: Impact of limited
number of medical examinations-1.5

Pharmaceutical: declined sales of IVsolutions mitigated by solid sales of painmanagement products-0.2

DM Healthcare: Increased demand forthermometers etc. in Healthcare products+0.5

Alliance: Continued double digit growth
driven by sales outside Japan+0.7( ) FXN

39.8

39.2-1%Revenue

Adjusted
OperatingProfit
(%)

(-0%)

5.2

5.2

(13%)

(13%)

©TERUMO CORPORATION

-1%
(+1%)

Despite the revenue decline and also theimpact of lower operation level in a factory
outside Japan due to lockdown, maintained
profitability by expense control
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Blood and Cell
Technologies: Increase in Both Revenue and Profit(billion JPY)

FY19 Q1

FY20 Q1YoY%

Major Topics

Impact( ) FXN

24.2

24.7+2%

Revenue

Adjusted
OperatingProfit(%)(+7%)

2.6(11%)©TERUMO CORPORATION

3.9+48%(+71%)

Blood center solutions: Driven by software
update for automated blood collection system.
Increase in collection demand for theCOVID-19 convalescent plasma therapy+1.6

Therapeutic solutions: Decreased demand
due to postponement of elective procedures-0.7

Large growth due to expense control in addition togross profit increase by better product mix

(16%)
8 /24

Major Topics in FY20 Q1Corporate

Donated 2.4 M USD in cash and products to support COVID-19
pandemic relief efforts worldwide
Received the first certificate under EU-MDR

CardiacandVascularGeneral
Hospital

Bloodand CellTechnologies

Stented device
for complex
aortic arch repair“Thoraflex Hybrid”

US FDA Breakthrough Device Designation granted for“Thoraflex Hybrid” stented device for complex aortic arch repair
CE Mark received for “BioPearl”
biodegradable drug-eluting microsphere
US FDA approval for “TREO”
stent graft for abdominal aortic aneurysm

Biodegradable drug-elutingmicrosphere“BioPearl”
Stent graft for abdominalaortic aneurysm“TREO”

Launched thermometer designed in considerationof easier sanitization

Thermometerwith open-type sheath

Obtained Japanese GMP certification for contract manufacturingof a biosimilar drug of Adalimumab in Yamaguchi D&D factory
Apheresis system approved in US for emergency use in cytokine
Apheresis system
reduction“Optia”
Pathogen reduction shown efficacy against virus causing COVID-19©TERUMO CORPORATION

9 /24

Pathogenreductionsystem“Mirasol”

FY20 New Product Pipeline
Category

Products
Steerable sheath

CoronaryImaging
Oncology

PTCA balloon(manufactured by EssenTechnology)
IVUS catheter

CardiovascularChinaJP
EU

Peripheral embolization plug

USBalloon guide catheter
Carotid stentGeneral
hospital
Launched products
PharmaceuticalJP

Oxygenator

JP

Launched

Heart lung machine (re-launch)JP

Launched

GlobalJP, US,
Asia
Launched©TERUMO CORPORATION

Products

10 /24

Region Launch

Stent graft for abdominal aortic
aneurysm

US

Syringe pumpJP

Safety IV catheter

JP

Syringe pump for open TCI

EU,AsiaEU
Launched

JP

Launched

Strong opioid analgesic(Fentanyl citrate tape for 1 day use)
Continuous glucose monitoringsystem

JP, US Launched DM andconsumer Blood glucose monitoring systemEUhealthcare
ThermometerJP

Intrasaccular aneurysm
treatment device (WEB)

Surgical stabilizer

Category
Vasculargraft

JP

Biodegradable drug-eluting
microsphere

Flow diverter
NeurovascularRegion Launch

JPJP
JP

Launched

Key Assumptions of FY20 GuidanceExpect revenue to bottom out in Q1 and return to recovering
momentum in the second half. Since the impact of the “secondwaves” is uncertain, it is not incorporated into the guidance
While controlling SG&A Expenses to an extent, also plan to invest
appropriately based on the business performance to achieve rapid
recoveryIn principle, continue to invest in R&D not to slow down its activity
level
Adjust the operating level of production from Q2 and optimize
inventory level, which was increased in Q1 for the purpose of BCP©TERUMO CORPORATION

11 /24

FY20 Guidance(billion JPY)

Revenue
Operating Profit
Adjusted Operating Profit
Profit for the Year
Average Exchange Rate

USD
EUR

FY19Actual

FY20Guidance

YoY%
(FXN)

628.9

600.0

110.6

85.0

-23%

(17.6%)(14.2%)(-20%)

125.0

103.0

-18%

(19.9%)(17.2%)(-14%)

85.265.0-24%(Actual)
109 JPY
121 JPY(Predicted)
105 JPY
120 JPY-5%(-2%)

No revision for the FY20 annual dividend proposal disclosed in the financial announcementin May 2020
©TERUMO CORPORATION

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FY20 Guidance(billion JPY)

RevenueAmountComments
YoY%( ) FXN

CardiacandVascular

FY20 Guidance

322.0

FY19 Actual

GeneralHospital

Bloodand Cell
Technologies©TERUMO CORPORATION

350.6

172.0
171.0

106.0
107.2

-8%(-5%)

Despite demand decline due to the postponement of elective procedures, expect it to show
recovering momentum from the second half

The negative impact of limited number of+1%(+1%)

medical examinations to be mitigated by
growth in Alliance business etc. Stable sincevarious products are for chronic diseases

-1%
(+2%)
13 /24

Sales decline of blood bags to be mitigatedby sales expansion of automated bloodcollection system

FY20 Guidance: Quarterly Trend of the Revenue
Expect revenue to bottom out in Q1 and return to positive year-on-year
growth trajectory in the second half
110%

FY19 Actual (*)

100%

90%

(*) FXN

80%
Q4

Q1Q2

FY19©TERUMO CORPORATION

Q3

FY20

14 /24Q4

Reference©TERUMO CORPORATION

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FY20Q1 Revenue and Growth by Region(billion JPY)

Business
Segment

Japan

Cardiac andVascular

10.9 (-10%)

Out of C&V
Interventional
Systems*

Overseas
Subtotal

Total

Europe Americas

China

Asia

56.4 (-23%)

16.7 (-21%)

24.4 (-25%)

8.0 (-28%)

7.3 (-14%)

67.3 (-21%)

7.8 (-15%)

46.2 (-24%)

13.6 (-22%)

19.2 (-26%)

7.4 (-30%)

6.0 (-15%)

54.0 (-23%)

GeneralHospital

30.8 (-1%)

8.4 (+3%)

2.3 (+10%)

2.1 (+20%)

0.4 (-19%)

3.5 (-6%)

39.2 (-0%)

Bloodand CellTechnologies

2.5 (-0%)22.2 (+8%)

6.4 (+17%)

9.8 (-0%)

1.7 (+38%)

4.3 (+7%)

24.7 (+7%)

Total

44.3 (-4%)

87.0 (-15%)

25.5 (-12%)36.3 (-18%)

10.2 (-21%)

15.1 (-7%)

131.3 (-11%)*Including Neurovascular business©TERUMO CORPORATION(YoY%): FXN
16 /24

Operating Expenses(billion JPY)

FY19 Q1

FY20 Q1

YoY

YoY%

YoY%
(FXN)

Salaries & Wages

21.9

22.4+0.5+2%+5%Sales Promotion

4.9

2.0-2.8

-58%

-57%

Logistical Costs

3.5

3.3-0.2-5%-2%

Depreciation &Amortization4.5

4.6+0.1+1%+4%

Others9.7

7.8-2.0-20%-19%

SG&A Expenses Total

44.5 (29.2%)

40.1 (30.5%)-4.4-10%-8%

R&D Expenses

11.8(7.8%)

11.2 (8.5%)-0.7-6%-4%

Operating Expenses
Total

56.4 (37.0%)

51.3 (39.0%)-5.1-9%-7%©TERUMO CORPORATION

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Quarterly Results(billion JPY)

FY19 Q1

Q2Q3

Q4FY20 Q1(Apr-Jun)(Jul-Sep)(Oct-Dec)(Jan-Mar)(Apr-Jun)

Revenue

152.5

154.8

162.9

158.8

131.3

Gross Profit

85.2 (55.8%)

86.3 (55.8%)

87.2 (53.5%)

85.3 (53.7%)

68.9 (52.5%)

SG&A Expenses

44.5 (29.2%)

45.1 (29.1%)

47.2 (29.0%)

47.7 (30.1%)

40.1 (30.5%)

R&D Expenses

11.8 (7.8%)

12.5 (8.1%)

12.7 (7.8%)

13.6 (8.6%)

11.2 (8.5%)

Other Incomeand Expenses

0.4

1.3

-0.2

0.4

0.5

Operating Profit

29.2 (19.1%)

30.0 (19.4%)

27.1 (16.6%)

24.4 (15.3%)

18.1 (13.8%)

Adjusted
Operating Profit

33.9 (22.3%)

33.1 (21.4%)

31.4 (19.3%)

26.6 (16.7%)

21.7 (16.5%)

USD

110 JPY

107 JPY

109 JPY109 JPY

108 JPY

EUR

123 JPY

119 JPY

120 JPY

120 JPY

119 JPY

Average
ExchangeRate©TERUMO CORPORATION

18 /24

Adjusted Operating Profit: Adjustments(billion JPY)

FY19 Q1

FY20 Q1

29.2

18.1

Adjustment 1. Amortization of acquired
intangible assets+4.0+3.5

Adjustment 2. Non-recurring profit or loss

+0.8+0.1 *33.9

21.7

Operating Profit

Adjusted Operating Profit<General examples of adjustment items>• Acquisition related cost
• Lawsuit settlement* FY20 Q1 main items inAdjustment 2. Non-recurring profit or lossAmount• Impairment loss

Business reorganizing cost+0.2• Restructuring loss

Others-0.1• Nonlife insurance income• Loss on disaster• Other one-time profits & losses©TERUMO CORPORATION

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CAPEX, Depreciation and R&D Expenses
CAPEX & Depreciation
89.5

Amortization of acquired
intangible assets
60.8
43.6 42.0(billion JPY)

44.0

85.0

14.5

14.6

15.7

CAPEX
27.6

29.4

32.0

Depreciation

R&D Expenses
41.3

47.7

52.5

47.7

15.7
15.7
16.1 12.1
3.9
8.2

36.8

©TERUMO CORPORATION

FY18

Further promote R&D
activities mainly for TIS,
Neurovascular and TBCT

48.0

Capitalized R&D expenses
are included in CAPEX

50.6

FY19

Expand investment inproduction capacity andspace as well as IT in
FY20

CAPEX = C.i.P. record basis

11.2
FY17

Lease depreciation(IFRS16) is not included
in FY19, FY20 Q1 resultsand FY20 Guidance

FY20 Q1
20 /24

FY20 Guidance

FY18:

2.4

FY19:

4.8

FY20 Q1:

1.3

FY20 Guidance: 5.4

Cash Flows
Operating CF+17.4

Investing & Financing CF+27.7(billion JPY)

10.0
Redemption 10.4of bonds
Dividends70.0

1.7
13.3
17.9
Profitbefore tax

Depreciation
andamortization

Incometaxes

5.8
Others12.1
Workingcapitalincrease

16.1
CAPEX Long-termdebt

212.0

166.9

Cash at theend of FY19
©TERUMO CORPORATIONCAPEX = C.i.P. record basis
Cash at the end of each period is equal to “cash and cash equivalents” on B/S

21 /24

Cash at theend of FY20 Q1

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

USD

EUR

CNYRevenue

1.7

0.8

2.4

Adjusted Operating Profit

0.0

0.5

1.3

<Reference> Impact when JPY is depreciated by 10%
North
Latin
America America

Adjusted Operating Profit©TERUMO CORPORATION

-0.1

1.0

EMEA

Asia

EUROthers

CNYOthers

6.5

1.3

2.0

3.6

22 /24

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

Number of sharesrequired to be issued
for conversion

CouponConversion
Price(JPY)

Contingent
conversion price(JPY)

50.0

0.0%

1,912

2,486

Approx. 26 M sharesDec. 2021

50.0

0.0%

1,912

2,486

Approx. 26 M shares

Total

100.0

Maturity

Aggregateprincipal amount(billion JPY)

Dec. 2019

Approx. 52 M shares

The status of conversion (as of Jul. 31, 2020)
Amount of shares issued for conversion(% against the total amount of bonds)

Number of shares issued for conversion(% against total number of issued shares)

Convertible bonds
due Dec. 201950.0 B JPY (100.0%)

26 M shares (3.4%)

Convertible bonds
due Dec. 2021

46.2 B JPY (92.4%)

24 M shares (3.2%)

Total

96.2 B JPY (96.2%)

50 M shares (6.6%)

Bonds

Allocated treasury shares to the shares issued for conversion• Status of treasury shares: 5 M shares(at the end of Jul. 2020, treasury stock cost per share: 1,949 JPY, % against total number of issued shares: 0.7%)©TERUMO CORPORATION

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IR Contact
Terumo Corporation
Investor Relations 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 thetime 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 variousfactors. Factors affecting to actual results include, but are not limited to, changes in economic
conditions surrounding Terumo, fluctuations of foreign exchange rates, and state ofcompetition.
The market share information in this presentation is partly derived from our own independentresearch.

©TERUMO CORPORATION

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