I am the CAFO, Muto. I will now explain the third quarter results for the fiscal year
ending March 2020.

1First, the overall results. As you can see in the title, our year‐to‐date sales revenue andadjusted operating profit for the 3rd quarter were our best‐ever results.
Continuing from the first half, sales revenue grew positively for all three companies.
Among these, the TIS and Neurovascular businesses of the Cardiac and VascularCompany achieved double‐digit growth, driving the Terumo Group as a whole to 6%growth.
Thanks to maintaining strong sales across the group, adjusted operating profit grew indouble digits when excluding FX impact, and operating profit grew in double digits evenwhen including FX impact. Our profit variance analysis is a comparison to the previous
fiscal year, when we were seeing a strong recovery from the shipping delay. Therefore,
although the profit growth was not as big as it was in the first half, we feel it is a strong
result.
Profit before taxes grew 14% year‐on‐year, due to far less FX loss than the same periodof the previous fiscal year.
Excluding FX impact, sales grew 9%, and operating profit grew 18%, to keep a positive
trend going.

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Next is the adjusted operating profit variance analysis, compared to the previous fiscal year.
Gross profit increment by sales increase is getting less affected by the shipping delay. Compared to our annualguidance of 33 billion yen, 25 billion yen actually represented progress as planned.
The 6 billion yen of gross margin came in above our annual guidance of 4.8 billion yen.
There was no variation from the amount of the first half, but because it is a comparison with the abnormally highgross margin we saw coming out of the shipping delay, we consider this to be expected progress. In addition toimprovement to the Cardiac and Vascular company business mix, our efforts to find better production costs wasanother factor that contributed to our results coming in above guidance.
In price erosion, the reimbursement price revision had about the impact we expected. Other price erosion was better
than we expected, which had a positive impact on profit.
Our guidance included expenses for preparing for the EU MDR transition at 3.2 billion yen, so the result of 1 billion
yen may seem to indicate slow spending on that expense, but work is going as planned. A lot of system audits will beconcentrated in the 4th quarter, so we expect the spending will increase as the result. And, we also expect the annualspending level will increase in the next fiscal year.
SG&A increase was 7.3 billion yen, down from our annual guidance of 12.5 billion yen. In the first half, recovery costfrom previous TIS shipping delay and cost for US WEB introduction were not spent. In the second half, we will notspend recovery cost from the shipping delay as planned, but we will have expenses for US WEB introduction andother SG&A as planned.
"R&D expense" was 3.8 billion yen, progressing according to plan against the annual guidance of 5.7 billion yen.
The 600 million yen called "others" is primarily the amount of difference resulting from the Blood Management
Business receiving grants last fiscal year, but not this one.
"FX" was a much higher 6.4 billion yen, up from 2.3 in the first half. I will explain why in the next slide.

3The 2.3 billion yen FX impact from the first half grew to 6.4 billion year‐to‐date in the 3rdquarter—an increase of 4.1 billion yen. I will explain what it includes.
First, a 2.3‐billion‐yen impact occurred in the 3rd quarter from flow — yen appreciation
against the euro, yuan, and emerging‐market currencies.
Next, from stock: Because the yen depreciated temporarily on the last day of December
as FX rates moved, our inventory asset evaluation amount increased; this resulted inunrealized profit and negative impact on profit. Also, because fluctuation happened in
the opposite, positive direction the same time the previous fiscal year, the year‐on‐year
difference was even more pronounced, causing a 1.8‐billion‐yen impact in the 3rdquarter.
This flow and stock totaled to be a 4.1‐billion‐yen increase in FX impact.

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Next is revenue by region.
In the Cardiac and Vascular business in Japan, the rebound following the shipping delayin the previous fiscal year has largely passed, and growth is stable. General Hospital andBlood Management both maintained steady growth according to plan.
Outside Japan, there was a very strong rebound and recovery following the shipping
delay in the 3rd quarter of the previous fiscal year. That is why the year‐to‐date growthrate as of the 3rd quarter seems to show a milder increase, compared to the first half.
However, we are still having high‐single‐ or double‐digit growth when excluding FX
impact.
Next slide, please.

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Next is revenue by company.
The TIS and Neurovascular businesses of Cardiac and Vascular maintained double‐digitgrowth, driving that company as a whole. In addition, the CV business is building
momentum going into the second half, with good sales of oxygenators.
General Hospital continued double‐digit growth in the Alliance business, holding steadyas a company, according to plan.
Blood Center component collection systems drove the Blood Management company as awhole.
I will give more detail by company in the next slides.

6Here is Cardiac and Vascular Company.
Sales revenue was high in the 3rd quarter of the previous fiscal year due to the reboundafter the shipping delay recovery, and yet sales still grew in the double‐digits whenexcluding FX impact.
TIS continued to drive double‐digit growth outside Japan.
The new WEB and other stroke‐related products drove the Neurovascular businessglobally, continuing that business's double‐digit growth.
CV enjoyed easier business with the return of heart‐lung machines, and oxygenator sales
were strong, increasing momentum overall.
The Vascular business is seeing steady results as its transition to direct sales in Japan andrealignment continue to progress.
Growth of highly profitable TIS and Neurovascular products contributed to profit overall.
Also, with good sales results and less spending on shipping delay recovery in TIS, andless spending on the WEB launch in the United States, profit grew a double‐digit 18%
year‐on‐year.
Next slide, please.

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The General Hospital Company saw progress according to plan in both sales and profit.
In sales revenue, after FX impact and a temporary drop in demand outside Japan, themedical device business is now seeing signs of recovery, for which we have strong
expectations.
In Pharmaceuticals, pain management and adhesion barrier products drove the overallbusiness. Alliance business grew at double‐digit growth as planned, despite somefluctuation in orders along the way.
Coupled with profit, this result meant the company progressed as planned.
Next slide, please.

8Next is Blood Management Company.
In sales revenue, the Blood Center business is seeing a sales increase through its
introduction of new software for the component collection system Trima, as well as byimproving component collection efficiency, leading to both machines and disposables
increasing in sales.
There was a slowdown in developed nations for therapeutic apheresis after thetransition to a new model, but emerging markets grew in the double digits.
Profit was driven down greatly by FX impact, but when excluding FX impact, growth issteady and approximately according to plan.
Next slide, please.

9Now I will explain our second‐half outlook.
To begin, first‐half sales revenue progressed approximately according to plan. However,there was a further rise in operating profit due to shipping delay recovery costs and US
WEB launching costs that we expected to spend but didn't, bringing the increase to 7
billion yen.
This first‐half rise will trend out to 5 billion yen across the full year. I will now explain thegap between our initial plan and our outlook for the second half.
First, sales in the second half, despite the harsh situation of the reimbursement pricerevision, are expected to steadily progress. In addition, natural price erosion will be lessthan expected, which is having the effect of pushing up gross profit.
SG&A expenditure is expected to occur as planned in the second half.
R&D shows the same trend it did in the first half, so the expectation is that it will bespent as planned.
As for FX impact, there was a 500‐million‐yen negative impact in the first half, but weanticipate that the euro, yuan, and emerging‐market currencies will trend further toward10depreciating against the yen, which will result in a greater negative impact than
anticipated in the second half plan.
The result of these positive and negative impacts will be that the rise from the first‐half 7billion yen will end up at 5 billion yen for the year.
Now I will address the Terumo situation amid the novel coronavirus outbreak that isoccurring. First, we began sales operations at the Hong Kong and Taiwan locations at theend of January. The start of sales operation in mainland China is scheduled for February
10, next Monday. In production, the Hangzhou Factory has already begun operations onFebruary 3, and we will watch to see if its progress happens as planned. Regarding supply
chain including transportation company and customs operation level, we expect that
there will be some delays.
In other words, we expect some negative impacts, but they won't be impactful enough toprevent a 5 billion yen rise at the end of the fiscal year. In any case, we aren't yet able toquantify the impact, so we have decided not to revise our guidance.

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Next, the major topics from the quarter.
As a company, we received a Good Design Award for the 24th year in a row.
On the business side, we want to improve our business expansion speed to seize themany opportunities we see to grow current business drivers and launch new products or
acquire new technologies that will drive us further.
Next slide, please.

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Some products will be launched next fiscal year intead of this one, but overall we seeproduct launches are happening according to plan.
This concludes my explanation. Thank you.

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