Challenges Identified in FY13and Roadmap to FY16
Terumo Corporation
President and Representative Director
Yutaro Shintaku
05.08.2014

FY13 Performance• Achieved increase in sales and profit thanks to weaker yen• Gap with the Mid-Term Plan (Profit in particular)
Sales*Operating Profit■Mid-Term Plan
■FY13 Results■ Mid-Term Plan
■ FY13 Results

USD/EUR = 95/123, BJPY

USD/EUR = 95/123, BJPY

-2%-9%*Excl. amortization of goodwill and intangibles withrelated to the acquisition of CaridianBCT

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Actions for Closing the Gap1 Change Operations with “Company-led Management”
2 Complete TCVS Quality System Improvement
3 Reinforce Initiatives for Profitability Improvement
4 Accelerate Shift to Higher-Margin Products
5 Write off Assets of Certain Businesses
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1 Change Operations with “Company-led Management”
Company-led Management (As of April 1st 2014)
Shift from Matrix Management to Company-led Management in orderto globally integrate and align businesses, functions and regions

Operation Changes• Redefine accountability for business performance
Business• Delegate authority to speed up decision-making• Implement corporate strategies
Corporate• Establish global management infrastructure
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3-Company, 9-Division Structure
Matrix Management

Company-led Management
General Hospital

RegionFunction

RegionFunction

General Hospital Products Division
DM and Consumer Healthcare Division

General Hospital

Pharmaceutical and Nutrition Division
D & D Division

Cardiac & Vascular

Cardiac & VascularRegion

FunctionInterventional Systems Division
Neurovascular Division

Blood Management

CV Systems Division
Vascular Graft DivisionCorporate

Blood Management

RegionFunction

Corporate
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2 Complete TCVS Quality System Improvement• Requested corrections to operations andTowards Early
Completionverification of the new system• Already submitted a work plan to FDA• Estimated additional cost of approximately ¥3.0
Billion for re-inspection in FY14

Other• Passed FDA inspections without major issues inManufacturing
the past 3 years
Facilities

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3 Reinforce Initiatives for Profitability Improvement

Challenges

Actions

General HospitalEstablished a team dedicatedfor profitability improvement
 Recover from margin related issues

Cardiac & Vascular Set profitability target
 Improve margin by moving production
abroad (mainly Vietnam)

Must improve profitability
with the core businessesRetain profitable growth

Blood Management

 Expand presence in developing
countries with higher-margin products
 Improve margin by enhancing
production in Asia (India and Vietnam)

Corporate Redefine roles of corporate functions
 Reform supply-chain management
 Established a team dedicated tolowering procurement cost

Slow down of blood transfusion
market in developed countries
Must enhance corporate functions
and improve efficiency

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4 Accelerate Shift to Higher-Margin Products

GeneralHospital• Focus on higher-margin products• Revise regional strategy for basic commodities• Grow portion of highly profitable DM and D&D

Cardiac&Vascular• Coronary: expand presence with the new DES, Ultimaster• Peripheral: develop full product lines and launch globally• Neurovascular: continue to launch new non-coil products

BloodManagement• Focus on therapeutic apheresis, Spectra Optia• Expand automated blood component processing system

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Roadmap to FY16
*OP Target in FY16

• Secure a foothold in FY13-14
 Write off Assets of Certain
Businesses

17.5%• Target OP20% by FY16
• Capital expenditure will peak out Balance investment anddepreciation• Facilitate R&D for the next
growth driver (ART Company)• Continue to look out for M&Aopportunities

FY13
ActualFY14
Forecast

FY16
Forecast

Capital Expenditure and Depreciation(BJPY)

466

Capital Expenditure*420  Depreciation

236

250

322

186

FY12 FY13 FY14

FY16

*Excl. amortization of goodwill and intangibles withrelated to the acquisition of CaridianBCT

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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 not intended to be guarantees of future eventsor performance. Accordingly, it should be noted that actual results may differ fromthose forecasts on 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.
The market share information in this presentation is partly derived from our own
independent research.

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