“Initiatives towards Sustainable Growth”“Integration of Assets Acquired in FY 2016”
Terumo Corporation
President and CEO
Shi ji SSatoShinjirotNovember 99, 2017

Key Initiatives towards Sustainable Growth

Strengthen Global Operations

A l t St
Accelerate
Strategict i DDevelopmentlt

Leverage Group’s Comprehensive Strength© Terumo Corporation

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Strengthen Global Operations
 Strengthen production capacity in growing arena
 TIS*: Yamaguchi, Vietnam (Hanoi), MV: Southern CA, Costa Rica, Alliance: Yamaguchi Optimize production among TIS factories on a global basis Promote integration of closure device production (Puerto Rico, US, Costa Rica) Expandd productiond i basebini US forf peripherali h l interventionii productsd
 Realign production portfolio and increase the number of engineers at Ashitaka factory Optimize production on a global and group basis
 Promote to mutually utilize space and technology among factories/companies
 Hold first “Global Production Management Meeting” beyond the frame of each company

 Quality management system accommodating US‐FDA well secured a foothold amongthe entire group
 InI 1H,1H FDA inspected
it d fi
five ffactoriest i andd completedl t d themthwith
ith no major
j observationsbti(Cardiac and Vascular 3, General Hospital 1, Blood Management 1)
 Among the above, the first inspection post lift of CD* at Ann Arbor factory, US also
completed with no major observations (Sep)*TIS: Terumo Interventional Systems, MV: MicroVention, CD: Consent Decree© Terumo Corporation

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Accelerate Strategic Development
 Formed new organization “Corporate R&D Center” at Shonan Center Opened “MicroVention Worldwide Innovation Center” in Southern CA, US Establish “TIS Mastery Center” at Ashitaka Factory
 Expand the R&D base in Southern CA: Lab to incubate in‐house early technologies
 Enhance
E hproductdandd system portfolio
f li forf regenerative
i medicine
di i andd immunotherapyih Accelerate innovative R&D after M&A
 WEB from Sequent Medical (become the first player launching a new type of aneurysm
embolization system into US) Vado from Kalila Medical (expand the product portfolio of steerable sheath for ablation)
 TAA stent graft from Bolton Medical (develop pipeline following existing products)© Terumo Corporation

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Leverage Group’s Comprehensive Strength New product development and sales expansion through collaboration amongcompanies
 ExpandEd sales
l forf carotid
id artery stent system “Roadsaver”“R d” andd peripherali h l embolizationb li i coilil“AZUR”
 Reinforce the product line‐up for interventional oncology (bioresorbale drug‐eluting beads)
 Stay on track for clinical trial of peripheral drug coated balloon “Kanshas” , expecting tolaunch within FY17

 Rotation of human resource beyond the frame of organization and company
 Japan: Cross‐rotation of company’s sales force between Cardiac and Vascular and General
Hospital Promote collaborative initiatives among companies (R&D, Production, Sales) Invigorate global meetings led by CXO: cross‐organizational activities are in full swing inTerumo group
 Initiate disease‐oriented projects beyond the frame of each company
 Cancer, Regenerative/Cell therapy, Foot care (Diabetic foot problem), Surgery and others© Terumo Corporation

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Integration
gof Assets acquiredqin FY 2016

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Successful Track Record of M&A
M&A iin US andM&As
d EEurope are ththe M
Maini D
Driversi
off SSalesl GGrowththBolton (US) Mar, FY16

SalesSaes in BJPY
JAngio‐Seal (US) Jan, FY16
Sequent (US) Jun, FY16

CAGR
(FY99‐FY16)

7%d (US)( S)
Fogarty Venture Fund

M&A

Harvest (US)30%

CaridianBCT (US)MicroVention (US)
Vascutek (U.K.)

Organic
growthCardiovascular Div. of 3M (US)70%

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Evolution on Integration Know‐how The First Phase (‐2006)
 Acquired completely new technology Terumo never owned before (Heart‐lung machine,vascular ggraft,, neurovascular embolizarion coil,, and others))
 Retained existing management team and kept the acquired company as a subsidiary Principles of autonomous management

 TheTh SSecondd Ph
Phase (2007‐2015)(2007 2015)
 Acquired the company in the arena where Terumo also had business (Blood Transfusion)
 Reverse integration: Merged Terumo business into the acquired one
 Designated TBCT’s president Mr. Perez as a member of BOD of the Group. Positioned TBCTas a global HQs of Blood Management Company The Tertiary Phase ((2016‐)
0 6)
 Conducted three M&As in a year (+10 BJPY/case) Integrate acquired assets into existing overseas entities and manage there(Sequent→MV Bolton→VAK(Sequent→MV,Bolton→VAK*)) Based on each circumstance, select the most appropriate one from the diversified
integration patterns
 Implemented large
large‐sized
sized acquisition (vascular closure device)*VAK: Vascutek© Terumo Corporation

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Sequent Medical: Complete and Quick Integration into MV
 Decided not to hold Sequent as a entity, and integrated itcompletely into neurovascular business of MicroVention
 Promoted unity and invigoration of organization
designatingkeyy p
persons as executives
gg Sequent’s
qof MicroVention (e.g. R&D, Clinical Development)

throughCurrent
Status Has expandedpsales territoryy and shown strongg sales
 After acquisition, widened the application of WEB
by adding smaller size into line‐up Clinical development has been proceeding well toward
US approval in FY19

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Closure Devices: Integrated into Operation in TIS, US Asset acquisition: existing sales force specialized for access devices
sells closure devices under TIS in US Improve customers satisfaction by TIS’s specialty “training andeducation” coupled with products modification
CurrentStatus

 Sales surpassed the plan by increasing number of customer accounts in US
 Factory in Puerto Rico: Integration was on track…
 Damages to the exterior by hurricane are limited
 Partially resume production owing to generator in place Electricity
El t i it supply
l resumed
d on Nov
N 5,5 yett it isi stilltill unstablet bl

Strive to releaseproducts within
Dec, 2017 For mid‐term period, optimize production system through combining
Maryland factory,factory US© Terumo Corporation

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Bolton Medical: New US Entity for Vascular Graft Business Maximized complementary both in region‐wise and product‐wise. Incorporated Bolton into
vascular graft business in Vascutek
HQs

U.S.

EU, Asia

JPAAA

B
B

B
VB
B

Vascular Graftand others

VVV

Stent
G ftGraft

TAA

Current
Status Good momentum mainly in sales of TAA stent graft “RELAY PLUS”
 Structuring sales force specialized for stent graft, capable of training as wellas clinical development activities
up, and start Japan: have both TAA and AAA stent grafts in product line
line‐up,direct sales from FY19
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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 actualresults include, but are not limited to, changes in economic conditions surrounding Terumo, fluctuationsof foreign exchange rates, and state of competition.
Th market
Thek sharehinformationi f
i in
i thishi presentation
i iis partly
l dderivedi d fromf
our own iindependentddresearch.
h© Terumo Corporation

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