[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2016: Reference

Financial Results for the First Half of the Fiscal Year Ending March 31, 2016: Reference

Analysis of Business Performance
1. Overview of Financial Results for the First Half of the Fiscal Year Ending March 31, 2016
(1) Overview of Consolidated Business Results
During the first half of the current fiscal year (from April 1 to September 30, 2015), the following major trends
prevailed in the global healthcare industry. In China, some investments in medical capital equipments, including
devices, were negatively impacted by a slowdown in the country’s macro economy. Meanwhile, in the UnitedStates, demand for medical care is growing, owing in part to an increase in the number of insured people thanks toObamacare. In Japan, the government announced its Basic Policy on Economic and Fiscal Management andReform 2015, which in part aims at trimming back healthcare costs, including goals for the share of generics,
based on volume, in the total pharmaceuticals market. Moreover, in September, the HeartSheet, an autologous
skeletal myoblast sheet developed by Terumo, received conditional approval. Terumo submitted the HeartSheetfor regulatory approval as a regenerative medical product under the Act on Pharmaceuticals and Medical Devices,which was enacted in 2014.

Amid this environment, the Terumo Group is pursuing its goal of “becoming a company with a global presence,”
and in line with its business-led management structure, Terumo is promoting management that aims to achievesustainable and profitable growth.

The following are highlights of performance at each company during the first half of the current fiscal year.
● In the Cardiac & Vascular Company, sales grew substantially in the overseas interventional systems andneurovascular intervention businesses. Sales of the "Ultimaster", a drug-eluting stent, also continued to grow inEurope, Asia, and Latin America.
● In the General Hospital Company, the company focused on enhancing profitability through the expansion ofhigh-margin businesses, including the Drug and Device business, and by improving manufacturing costs.
● In the Blood Management Company, in addition to an increase in sales of therapeutic apheresis systems andcell processing systems, sales were also strong for automated blood component collection system mainly inemerging countries.

A partial revision was made to the management of earnings at Terumo’s overseas subsidiaries. Accordingly,
starting October 1, 2014, earnings at consolidated subsidiaries Harvest Technologies Corporation and Harvest
Technologies GmbH are being posted under the Blood Management Company reporting segment, as opposed to
the Cardiac & Vascular Company. Segment information for the first half of the fiscal year ended March 31, 2015
was revised to reflect reporting segments after the revisions.

Financial results for the first half of the fiscal year ending March 31, 2016 are as follows:-1-[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2016: Reference

Net sales
Net sales totaled 259.2 billion yen, an increase of 11.1% compared with the same period in the previous fiscalyear.

In Japan, net sales totaled 90.3 billion yen, a growth of 1.0% in contrast with the same period a year earlier,partially reflecting improved sales performance in the General Hospital Company owing in part to a wind down innegative impact from fluctuating demand triggered by a change in the market environment, including theconsumption tax hike in FY2014. Meanwhile net sales overseas came to 168.8 billion yen, a rise of 17.3% owing
to a substantial expansion in sales of interventional systems and neurovascular intervention businesses in theUnited States, Europe, and Asia, and an expansion in sales in the Blood Management Company mainly inemerging countries.

Gross profit
Gross profit totaled 139.4 billion yen, a growth of 13.4% in contrast with the same period a year earlier, owing tocontribution from an expansion in sales of high-value-added products abroad.

Operating income
Operating income totaled 39.1 billion yen, an expansion of 18.5% versus the same period a year earlier, as theincrease in gross profit outpaced the rise in selling, general and administrative expenses.

Ordinary income
Ordinary income was 35.8 billion yen, an increase of 5.1% in comparison with the same period a year earlier,owing to the growth in operating income despite foreign exchange losses reflecting a weaker yen.
Profit attributable to owners of parent
Profit attributable to owners of parent came to 27.0 billion yen, an increase of 23.5% in contrast with the same
period in the previous year, partly attributable to extraordinary gain on the sale of noncurrent assets.
Net sales results by company are as follows:
Cardiac & Vascular Company
In the interventional systems business in Japan, sales declined 2.9% year-on-year. This reflected a decline in salesof coronary and peripheral stents due to a temporary change in the market such as competitive environment.
Meanwhile, in overseas markets, sales of the "Ultimaster", a drug-eluting stent, continued to expand in Europeand other markets. In the United States, sales of products for transradial coronary intervention (TRI: a techniqueusing a catheter to approach the coronary artery from an artery in the wrist) increased and in June, sales ofperipheral stents were off to a smooth start. Sales in the neurovascular intervention business grew sharply in all
regions, including the United States, Europe, and China.
Consequently, sales in the Cardiac & Vascular Company totaled 125.5 billion yen, a growth of 17.5% incomparison with the same period in the previous fiscal year.
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General Hospital Company
In Japan, sales rose 3.5% year-on-year, owing in part to an expansion in sales of high-value-added products,including infusion systems and prefilled syringes. Overseas sales were up 1.9% reflecting measures that focusedon an expansion in sales of high-value-added products and to scale back low-margin businesses.
Accordingly, sales in the General Hospital Company came to 80.8 billion yen, an increase of 3.1% in contrast withthe same period a year earlier.

Blood Management Company
In Japan, blood donation numbers continued downward. In light of this, sales declined due to negative impact todemand for related products used when collecting blood. Meanwhile, overseas sales expanded for therapeutic
apheresis systems and cell processing systems, which are high-value-added products. Sales were strong forautomated blood component collection systems, mainly in emerging countries. Moreover, sales in the UnitedStates outpaced initial plans, in part due to a delay in a transition to new prices.
Consequently, sales in the Blood Management Company amounted to 52.8 billion yen, a growth of 9.8% in
contrast with the same period in the previous fiscal year.
(2) Overview of Consolidated Balance SheetsTotal Assets
As of September 30, 2015, total assets came to 973.2 billion yen, a decrease of 18.8 billion yen compared withMarch 31, 2015.
Current assets were 417.6 billion yen, an increase of 5.2 billion yen owing in part to an increase in cash anddeposits.
Non-current assets totaled 550.6 billion yen, a decrease of 25.2 billion yen. Property, plant and equipment
increased 700 million yen, intangible assets decreased 13.8 billion yen due to factors such as goodwill
amortization, and investments and other assets decreased 12.1 billion yen, owing in part to the sale of investment
securities.

Total Liabilities
Liabilities totaled 395.9 billion yen, a decline of 22.7 billion yen, partly attributable to a decrease in income taxes
payable and trade payable.

Total Net Assets
Net assets totaled 577.3 billion yen, an increase of 3.8 billion yen. This was primarily attributable to an 11.0
billion yen decrease owing to share buybacks and an increase of 27.0 billion yen in profit attributable to owners ofthe parent.
Accordingly, the company posted an equity ratio of 59.3%, an increase of 1.5 points versus March 31, 2015.

(3) Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2016-3-

[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2016: Reference

The business environment is likely to remain murky going forward, including changes in the business climate for
medical devices. However, Terumo is reiterating its consolidated financial forecasts.

Amid this business environment, to achieve its goals, the Terumo Group aims to introduce and expand sales ofhigh-value-added products that contribute to the improvement of healthcare economics. Furthermore, theCompany plans to embark on the reduction of manufacturing costs and the full-fledged implementation of SG&A
cost efficiency measures.

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