[Terumo Corporation] Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2020: Reference

Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2020: Reference
Analysis of Business Performance
1. Overview of Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2020
(1) Overview of Consolidated Business Results
In the first three quarters of the current fiscal year (from April 1 to December 31, 2019), the ongoing trend invarious countries in the global healthcare market was to cut back medical expenditures. Amid this environment,there continues to be growing demand, mainly in developed countries, for better healthcare economics toachieve a more focused and efficient allocation of fiscal resources.

Amid this backdrop, in line with the Mid- and Long-term Vision, the Terumo Group, as a “Global Corporationwith Unique Excellence,” aims to become recognized by medical professionals worldwide as a top brand and atrusted manufacturer by winning a high level of trust globally for our total quality (which includes the total
quality of its products, supply, and services).
Financial results for the first three quarters of the fiscal year ending March 31, 2020 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

Q1-Q3
FYE3/2019

Q1-Q3
FYE3/2020

Growth (%)

443,609242,159
91,17978,47475,00856,395

470,144258,635
98,41986,25085,487
66,762

6.0
6.8
7.9
9.9
14.0
18.4

(million yen)
Growth excluding
impact of forex
translations (%)
9.2
11.2
16.7
17.7－－56,495

66,893

18.4－(million yen)
Regional revenue

Q1-Q3
FYE3/2019

Q1-Q3
FYE3/2020

Growth (%)

Growth excluding
impact of forex
translations (%)

Japan

142,245

147,8423.9

3.9

Europe88,16988,7380.6

7.4

Americas129,677

141,561

9.2

12.5

Asia, etc.

83,51792,002

10.2

15.0

Overseas total

301,364

322,302

6.9

11.7

Total

443,609

470,144

6.0

9.2

[Terumo Corporation] Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2020: Reference

Revenue
Revenue totaled 470.1 billion yen, a growth of 6.0% versus the same period in the previous fiscal year.

In Japan, overall revenue increased year on year. Revenue trended briskly in the pain management business ofthe General Hospital Company, in the alliance business with other pharmaceutical companies, and in the TIS
business (intervention devices) and the neurovascular business of the Cardiac and Vascular Company.

Revenue overseas climbed in comparison with a year earlier. Performance was driven by brisk revenue in theTIS business (intervention devices) and the neurovascular business of the Cardiac and Vascular Company, andblood center products in the Blood Management Company.
Gross profit
Gross profit amounted to 258.6 billion yen, an increase of 6.8% compared with the previous fiscal year,
reflecting an increase in revenue.

Adjusted operating profit
In the period under review, adjusted operating profit came to 98.4 billion yen, an increase of 7.9% year on year.
This was attributed to an increase in gross profit.

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 withsegment profit. We are disclosing adjusted operating profit as we are using it as an earnings management
indicator.

Operating profit
Operating profit totaled 86.3 billion yen, an increase of 9.9% year on year, owing to the rise in adjusted
operating profit.

Profit before tax
Profit before tax was 85.5 billion yen, an increase of 14.0% versus the same period a year earlier. This reflects
the forex translation loss declining from 3.2 billion yen in same period of the previous year to 0.8 billion yen.

Profit for the period attributable to owners of the parent
Profit for the period attributable to owners of the parent totaled 66.9 billion yen, an increase of 18.4% year onyear, driven by the increase in profit before tax.

[Terumo Corporation] Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2020: Reference

Revenue results by company are as follows:

Q1-Q3
FYE3/2019

Q1-Q3
FYE3/2020

Growth (%)

Revenue

240,957

263,473

9.3

13.5(Japan)35,37338,1787.9

7.9(Overseas)

205,584

225,294

9.6

14.5

Revenue

125,869

127,786

1.5

2.2(Japan)

97,753

100,4742.8

2.8(Overseas)

28,11627,311(2.9)

0.3

Revenue

76,59178,717

2.8

7.1(Japan)

8,950

9,022

0.80.8(Overseas)

67,64069,6953.0

8.0

Segment

Cardiac andVascular Company

General HospitalCompanyBloodManagement
Company(million yen)
Growthexcluding
impact of forex
translations (%)

Cardiac and Vascular Company
In Japan, sales were driven by the TIS business (intervention devices), mainly in the imaging domain, andproducts for the treatment of acute ischemic stroke in the neurovascular business, while overseas, sales werepropelled by WEB, a new type of cerebral aneurysm embolization device in the neurovascular business. Inaddition, sales in the TIS business (intervention devices) were brisk. Accordingly, revenue in the Cardiac andVascular Company totaled 263.5 billion yen, a growth of 9.3% year on year.
General Hospital Company
The hospital systems business saw brisk sales of AdSpray, a spray type adhesion barrier and Fentanyl injection,
the narcotic analgesic. In addition, there was an expansion in B2B business with pharmaceutical companies in
the alliance business. Consequently, in the General Hospital Company revenue amounted to 127.8 billion yen,
an increase of 1.5% versus the period a year earlier.

Blood Management Company
In Japan, revenue increased amid brisk sales of products aimed at blood centers. Overseas, sales were brisk,
driven by the introduction of new software for blood component collection systems, but forex rates in Europe
and emerging markets had a negative impact on earnings. Consequently, revenue in the Blood Management
Company totaled 78.7 billion yen, an increase of 2.8% year on year.
(2) Overview of Consolidated Statements of Financial Position
Total assets stood at 1,184.6 billion yen, an increase of 63.8 billion yen. This increase was mainly attributable toan increase in property, plant and equipment of 51.2 billion yen from the application of IFRS 16 Leases, capital
expenditures to increase production, construction of a new building by Terumo Yamaguchi Corporation, alongwith an increase in trade receivables and inventories from an increase in sales revenues and raising productstock level, despite a decline in cash and cash equivalents of 10.0 billion yen due to the payment of dividends.

[Terumo Corporation] Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2020: Reference

Liabilities totaled 433.1 billion yen, an increase of 10.4 billion yen. This was mainly attributable to an increase inother financial liabilities of 31.5 billion yen from the application of IFRS 16 Leases, despite a 17.9 billion yen
decline in bonds and borrowings due to the conversion of convertible bonds.

Equity was 751.5 billion yen, an increase of 53.4 billion yen. This mainly reflects an increase from posting
profit for the period of 66.8 billion yen and an increase from allocating treasury stock for the conversion ofconvertible bonds described above of 16.9 billion yen, compared to a decrease of 20.5 billion yen due to thepayment of dividends from surplus.

(3) Forecasts, including the Consolidated Financial Results for the Fiscal Year Ending March 31, 2020
The forex rates for the euro, renminbi and emerging currencies have veered in the direction of a stronger yen
compared to the initial outlook, but the performance of each business trended briskly. As a result, adjusted
operating profit exceeds the initial forecast. However, we will leave our consolidated forecast announced on
May 9, 2019 unchanged given the difficulty at the present time of quantifying the impacts on our operations
from the novel coronavirus outbreak that occurred in China.