[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2021: Reference

Financial Results for the First Half of the Fiscal Year Ending March 31, 2021: Reference
Analysis of Business Performance
1. Overview of Financial Results for the First Half of the Fiscal Year Ending March 31, 2021
(1) Overview of Consolidated Business Results
In the first half of the current fiscal year (from April 1 to September 30, 2020), in the healthcare market there wasa decline in demand from postponement of elective procedures, the decline in exams and diagnostics, and thedecline in the number of days of hospitalizations, etc. for various clinical departments, especially in April and May
due to the major impacts of the novel coronavirus disease (COVID-19) pandemic. From July to September,demand recovered somewhat as some procedures that had been postponed were performed. The Company saw
impacts emerge from declining demand at Cardiac and Vascular Company, but impacts on General HospitalCompany and Blood and Cell Technologies Company were minimal. Also, demand increased for certain products.
Financial results for the first half indicate the entire company was able to mitigate the impacts of the COVID-19
pandemic to a certain degree.
Financial results for the first half of the fiscal year ending March 31, 2021 are as follows:

Revenue
Gross profit
Adjusted operating profit
Operating profit
Profit before tax
Profit for the period
Profit for the period
attributable to owners of theparent(million JPY)
Growth excluding
impact of FX
translations (%)

1H
FYE3/2020

1H
FYE3/2021

Growth (%)

307,278
171,463
67,044
59,15058,06545,621

283,296
150,463
51,261
41,82440,65931,759(7.8)(12.2)(23.5)(29.3)(30.0)(30.4)(6.4)(9.5)(18.5)(23.9)－－

45,711

31,842(30.3)－

Sales revenue by region for the first half is as follows:(million JPY)
Growth excluding
impact of FX
translations (%)

Region1H
FYE3/2020

1H
FYE3/2021

Japan

95,921

93,508

(2.5)

(2.5)

Europe58,271

55,525

(4.7)

(4.6)

Americas92,62382,481(10.9)(8.0)

Asia and others

60,461

51,780(14.4)(12.0)

Overseas total

211,356

189,788(10.2)

(8.2)

Total

307,278

283,296

(7.8)

(6.4)

Growth (%)

[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2021: Reference

Revenue
Revenue totaled 283.3 billion JPY, a decrease of 7.8% versus the same period in the previous fiscal year.

In Japan, overall revenue decreased by 2.5% year on year. The impacts of the COVID-19 pandemic on Cardiac
and Vascular Company were smaller than other regions, and in General Hospital Company, revenues in thealliance business and of narcotic analgesic were robust, and there was rising demand for products to counter thespread of COVID-19.
Revenue overseas declined by 10.2% in comparison with a year earlier. The impacts of the COVID-19 pandemic
on General Hospital Company and Blood and Cell Technologies Company were small, but these same impacts
were larger for TIS business (interventional devices) in Cardiac and Vascular Company. Meanwhile, in Cardiac
and Vascular Company, some procedures that had been postponed in the first quarter were performed in the secondquarter, which led to a significant recovery in demand.
Gross profit
Gross profit came to 150.5 billion JPY, a decrease of 12.2% compared with the previous fiscal year, reflecting adecline in revenue mainly due to the impacts of the COVID-19 pandemic on Cardiac and Vascular Company.
Adjusted operating profit
In the period under review, adjusted operating profit came to 51.3 billion JPY, a decrease of 23.5% year on year,
due to the decline in gross profit, despite efforts to curtail certain selling, general and administrative expenses.
Adjusted operating profit factors out amortization expense for intangible assets obtained during acquisitions andone-off income and expenses from operating profit. In addition, adjusted operating profit is consistent with segment
profit. We are disclosing adjusted operating profit as we are using it as an earnings management indicator.
Operating profit
Operating profit came to 41.8 billion JPY, a decrease of 29.3% year on year, owing to the decrease in adjusted
operating profit.
Profit before tax
Profit before tax was 40.7 billion JPY, a decrease of 30.0% versus the same period a year earlier owing to thedecrease in operating profit.
Profit for the period attributable to owners of the parent
Profit for the period attributable to owners of the parent totaled 31.8 billion JPY, a decrease of 30.3% year on year,driven by the decrease in profit before tax.

[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2021: Reference

Revenue results by company are as follows:
The segment previously named as “Blood Management Company” was changed to “Blood and Cell Technologies
Company” from the fiscal year ended March 31, 2020. This change in name does not affect the segment information.
The name of reportable segment for the first half of the fiscal year ended March 31, 2020 was also revised as “Bloodand Cell Technologies Company”.
(million JPY)
Growth1H1H
excluding
Segment
Growth (%)
impact of FX
FYE3/2020
FYE3/2021
translations(%)
Revenue
172,597
149,424(13.4)(12.2)
Cardiac and(Japan)
24,752
22,862(7.6)(7.6)
Vascular Company

General HospitalCompany
Blood andCell
Technologies
Company(Overseas)

147,844

126,562(14.4)(12.9)

Revenue

82,81581,791

(1.2)

(0.6)

(Japan)64,98164,825

(0.2)

(0.2)

(Overseas)

17,833

16,966

(4.9)

(2.0)

Revenue

51,756

51,9520.4

3.2(Japan)

6,077

5,693

(6.3)

(6.3)

(Overseas)

45,67846,259

1.3

4.5

Cardiac and Vascular Company
In Japan, sales were driven by extracorporeal membrane oxygenation (ECMO) systems in the Cardiovascularbusiness along with flow diverter and aspiration catheter in the Neurovascular business, but revenue declined
because of the significant impacts of the COVID-19 pandemic on other businesses. Overseas, the same impacts
were significant on TIS business (interventional devices) in the Americas. Additionally, in China, theNeurovascular business was impacted by the order booking timing of distributors. Accordingly, revenue in Cardiacand Vascular Company totaled 149.4 billion JPY, a decrease of 13.4% year on year. Meanwhile, some proceduresthat had been postponed in the first quarter were performed in the second quarter, which led to a significant
recovery in demand overseas in particular.
General Hospital Company
In Japan, the COVID-19 pandemic impacted many products, but sales were driven by narcotic analgesic andproducts for preventing the spread of COVID-19 in the Hospital Systems business. Globally, the B2B businesswith pharmaceutical companies in the Alliance business grew. Reflecting these, revenue in General HospitalCompany was 81.8 billion JPY, a decrease of just 1.2% versus the period a year earlier.
Blood and Cell Technologies CompanyIn Japan, sales of blood center products declined due to the slowdown in demand for blood preparations causedby the impacts of the COVID-19 pandemic. Overseas, therapeutic apheresis systems and cell processing
products saw a slowdown in demand for the same reasons, but sales were driven by new software for blood
component collection systems and there was an increase in collection demand for COVID-19 convalescentplasma therapy. Consequently, revenue in Blood and Cell Technologies Company totaled 52.0 billion JPY, arise of 0.4% year on year.

[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2021: Reference(2) Overview of Consolidated Statement of Financial Position
Total assets stood at 1,292.4 billion JPY, an increase of 51.1 billion JPY. This was mainly owing to an increasein cash and cash equivalents of 42.7 billion JPY caused by long-term loans payable, as well as an increase inproperty, plant and equipment of 10.0 billion JPY from investments in manufacturing facility.

Total liabilities came to 523.1 billion JPY, an increase of 36.6 billion JPY. This was mainly attributed to anincrease in bonds and borrowings of 51.2 billion JPY due to long-term loans payable, despite the redemption
and partial conversion of bonds payable, which offset the decline in trade and other payables of 14.1 billion
JPY due to the payments related to facilities.

Total equity was 769.4 billion JPY, an increase of 14.5 billion JPY. This mainly reflects an increase fromposting profit for the period of 31.8 billion JPY and an increase from allocating treasury shares for theconversion of convertible bond-type bonds with subscription rights to shares of 6.1 billion JPY, compared to adecrease of 10.5 billion JPY due to the payment of dividends from retained earnings, while the booking of othercomprehensive income associated with the impacts of yen strength in FX resulted in a 12.9 billion JPY decline.

(3) Forecasts, including the Consolidated Financial Results for the Fiscal Year Ending March 31, 2021
At present, we must continue to monitor risks such as uncertain developments surrounding the COVID-19pandemic (second and third waves), and risks posed by a drop in demand and supply chain interruptions causedby second and third waves. Nevertheless, we plan to pour energies into the introduction and expansion of highadded-value products that will boost the quality and efficiency of healthcare, along with further improvement tomanufacturing costs, and effective use of selling, general and administrative expenses.