I will now give an overview explanation of the financial results for the period
ending March 2015.

1First, the results highlights: There are two for the Group as a whole. The first is that
despite it being a year for reimbursement price cuts in Japan, we were able toabsorb this negative impact and increase both our revenue and income, andachieve our highest-ever operating income. The next highlight explains the main
contributing factors: Sales growth in Cardiac & Vascular, Yen depreciation, andthorough SG&A control under the business-led management. These were the threemain factors.
Next, highlights for the individual companies. In the Cardiac & Vascular Company,
the overseas IS and neurovascular businesses continued to achieve double-digit
growth. This was the main driver of sales growth. Within that area, sales ofUltimaster, a new drug-eluting stent that we launched last year, started in Europe
and have since expanded to Asia and Latin America, contributing greatly to sales
growth. We also plan to launch Ultimaster this year in Japan. The other highlight
regards the TCVS quality system: FDA restrictions have been lifted from the quality
management system as a whole, and from the intraoperative monitoring system. I
will have more details on this later.
In General Hospital Company, the first half of FY14 was particularly difficult in termsof market conditions, but the company was able to maintain profitability at the levelof the pprevious yyear byy improving
pg its p
portfolio mix and downsizing
g low-margingbusinesses.
In Blood Management, we have previously remarked on the difficult market
environment for that company. We have strengthened cost controls, which haveallowed the company to retain close level of profit to previous year. In the area ofsales, the therapeutic apheresis and cell expansion products have grown greatly.
ff2First, sales were 489.5 billion yen, for a 5% year-over-year increase. Grossprofit was 256.1 billion yen, for a 6% year-over-year increase. Gross profit
percentage also moved from 51.8% to 52.3%, an improvement of half apercentage point.
Operating income was 67.5 billion yen, a 3% year-over-year increase.
Ordinary income was 70.7 billion yen, an 11% year-over-year increase. Bothth operatingtheti iincome andd ordinary
diincomeiamounts
t were theth llargestt iincompany history.
Finally, net income was 38.5 billion yen, for a 13% year-over-year increase.
We had initially forecasted net income of 37.5 billion yen, and then revisedthat forecast after the 2nd quarter down to 33.5 billion yen due to thetransformation of portfolio in EEurope.
rope HoHowever,e er net income ended up
p at 3838.5
5billion yen, a 13% increase from the previous year.

3

Next is the operating income variance analysis.
We start on the left of the graph with a positive foreign exchange impact of
2.8 billion yen. Next is an increase in gross profit due to increased sales
volume. Next was product mix improvement, meaning a larger proportion ofhigh-profitability products. Next was the effect of reducing costs, which raisedprofitability.
On the other side, we had an increase of 4.9 billion yen in SG&A due to sales
force expansion for new products in the U.S. Cardiac & Vascular business.
The Japan reimbursement price cut and other price erosion combined tohave 8 billion yen in negative impact.
Those were the factors leading to an increase from 65.3 billion yen in FY13to 67.5 billion yen in operating income in FY14.

4

I now will give some detail on R&D expenses. R&D expenses went down 0.7
billi yen, ffrom 30
billion30.1
1 billibillion yen iin FY13 tto 29
29.4
4 billibillion yen iin FY14FY14. Th
Thebiggest factor behind this was that the 0.9 billion yen used in FY13 for theDuraHeart development was reduced to zero in FY14 due to the sales of its
R&D assets. This led to a decrease year over year.
However, for FY15, we forecast 35 billion yen, or a 19% increase of 5.6
billion yen. This will be driven by ramping up to full-scale operations at ourdevelopment on the West Coast of the United States.
In addition, R&D will not be limited to Cardiac & Vascular; both the General
Hospital and Blood Management companies are expected to increase R&D
expenses in double-digit percentages as well.
F theForth previous
iperiods,i d th
the R&D percentage
toff sales
l hhas bbeen llow att 66.44and 6.0%, but this is forecast to increase to 6.7% in FY15. In fact, since the4th quarter, when the West Coast development facility began operations,R&D expenses have equaled 6.7% of sales, and we expect the same level ofR&D spending throughout FY15.

5

Next is sales by region. The trend was largely uniform throughout this pastfiscal year: Japan reimbursement price revisions led to negative sales
growth, and double-digit growth overseas absorbed the domestic impact toresult in 5% sales growth. Therefore, at the end of FY14, 63% of Terumo
Group sales were from overseas. We anticipate that Japan will continue to beflat while overseas sales grow, leading to an even higher percentage of sales
coming from overseas.
Now, sales by region. A large portion of last year was spent reorganizing ourdistribution channel in China, which led to negative sales growth through the3rd quarter. Things returned mostly to normal in the 4th quarter, leading to a
positive 2% growth for the year. For this fiscal year, we are forecasting
double-digit growth in China.

6I will now explain sales by business segment. Here, the trend has notchanged from previously; Cardiac & Vascular continues to drive growth forthe group.
Cardiac & Vascular increased sales 10% and Blood Management increased
sales 4%. General Hospital, which has its business centered in Japan, saw a
2% decrease.

7

Next is profit by business segment. To put it simply, Cardiac & Vascular drove
profit growth, while General Hospital and Blood Management were at thesame level as the previous year. I’ll now speak about each company
individually.

8

First, in Cardiac & Vascular, we saw a 10% year-over-year increase in sales and a 8% increase inprofit. Overseas IS business and neurovascular intervention pproducts were large
g drivers ofbusiness psales growth. These have shown solid growth in the past few years, and we expect them to continue
growing rapidly in this fiscal year as well. Sales of CV products also grew well globally the past fiscalyear, increasing 3 billion yen. The Japan price reimbursement was the biggest negative impact, but thecompany was able to absorb it and still achieve a large increase in sales.
In business profit, manufacturing cost reductions, especially at the Ashitaka Plant, had a 1.3 billion yen
positive impact.
Regarding the TCVS FDA consent decree, we made a press release on April 17 announcing that theFDA inspection conducted in January determined that the quality management systemsystem—which
which as awhole had been the reason for the original consent decree—had been rebuilt and was found to beadequate. This led to it being removed from the restrictions of the consent decree.
Two product lines were also subject to the consent decree: First, the blood monitor called CDI, which
was also determined to have no problems by the FDA in January. Second was the heart-lung-machine;
this product contains a large number of components, meaning that its validation activities require much
more time. Therefore, our plan is to have the heart lung machine validation activities continue
throughout this year, and then the product line will be re-inspected and approved by the FDA. Thismeans that this portion of the consent decree will remain in place for one more year.
We have previously announced that the expenses associated with the consent decree for last year
were 5 billion yen; 2 billion yen of this was ongoing expenses, with another 3 billion yen in consulting
fees. For this fiscal year, we will have the same ongoing expenses, but due to yen depreciation this is
expected to amount to 2.5 billion yen. For consulting fees, we expect to incur 1.5 billion yen from heartlung machine validation activities. These will therefore amount to 4 billion yen.
The FDA consent decree was lifted for the CDI product line, but we will undertake further improvement
activities there and restart production; these items will cost another 1 billion yen, leading to about thesame amount of total consent decree-related costs as the previous year.

9Next, the General Hospital Company. The first two factors listed here asaffecting sales were explained in our meeting regarding the first half last year
by Hiroshi Matsumura, the head of the General Hospital Company. As iswritten here, these factors were market conditions, and they primarily
affected the company in the first half. While they improved some in thesecond half, they continue to have negative impacts on the company
currently.
While downsizing our low-margin business accounts in the United States andEurope negatively impacted sales, it will also lead to better profitability. On
the other hand, our pharmaceutical firm-oriented B2B segment grew well,leading the shift in the U.S. and Europe toward higher profitability.
We wereere able to retain profitability
profitabilit byb improving
impro ing the prodproductct portfolio mimix andas mentioned, downsizing low-margin business accounts. We expect to see
further improvement by continuing these efforts.

10

Next is the Blood Management Company. Here, the regions of Latin Americaand Asia, and the product lines of therapeutic apheresis and cell expansion
systems have driven growth.
Market conditions have remained very harsh, however, as price pressure is
expected to continue this fiscal year. I will explain this more when I discuss
this year’s plans.

11Here is the new product pipeline for FY14, with the most prominent being
Ultimaster, which had a successful launch.

12

Next is a comparison of our FY14 guidance and actual results. For each ofthe items shown here—Net sales, Operating Income, Ordinary Income, andNet Income—we exceeded guidance.
As I mentioned earlier, our initial net income guidance was 37.5 billion, andthen we revised that down to 33.5 billion, but achieved 38.5 billion. In addition
to operating income, ordinary income had a boost from foreign exchange toiincrease
66.6
6 billibillion yen, andd thesethbothb th contributedt ib t d tto thi
this 3838.5
5 billibillion-yen nett
income that greatly exceeded guidance.

13Now for the FY15 guidance. First, our assumed average foreign exchange rates:
We are assuming 120 yen to the dollar
dollar, up from last year’s assumed rate of 100yen. For the euro, 130 yen to the euro, down from 140 yen last year.
With these assumed foreign exchange rates, our sales guidance is 520 billion yen,or a 6% year-over-year increase. Operating income is forecasted at 70 billion yen,for a 4% increase. Ordinary income guidance is 67 billion yen, for a 5% year-overyear decrease. Net income is forecast at 39.5 billion yen, for a 3% increase.
Regarding operating income, Blood Management is expected to see continued pricedeclines, particularly in the United States. The effects of this are already appearing
in the fourth quarter of FY2014; income is already being impacted and this isexpected to continue throughout the year.
In order to counteract this price decline in blood management business, which iscentered in the United States and Europe,
Europe the company will continue to cut costs
and recover through emerging market growth and introduction of new products. Thisis one major factor that will lead to an estimated 2.7 billion yen negative impact onto
operating income.
Ordinary income is expected to decrease from the previous year, but we did see 6.6billion yen in positive foreign exchange impact last year.

14

Now I will speak about the FY15 new product pipeline. The most prominent
product this year will be the Ultimaster, this time because of its launch inJapan, which is expected to increase sales in Japan.

15

This slide explains the impacts of currencies other than the U.S. dollar or euro. Previously,
we discussed the effects of foreign exchange only in terms of the U.S.
U S dollar and euro,
euro butrecently, we have seen greater fluctuations in other currencies. This has clouded our ability
to predict foreign exchange impacts, as illustrated here.
For US dollar, with yen depreciation we are able to predict a positive sales impact of 16.8billion yen. And while there is some positive impact on operating income as well—we seethat it says “including goodwill amortization: -1.5 billion”—in our acquisition of Terumo BCT,
we took on goodwill that is denominated in dollars. When the yen depreciates, this dollardenominated goodwill has a larger impact, negatively affecting operating income. So we seehere that despite a depreciated yen, the operating income is affected 1.5 billion yen and only
reaches 2 billion yen in positive currency impact.
It is somewhat simpler for the euro: we anticipate yen appreciation, which will mean negative
impacts on sales and operating income.
Against other currencies, we expect an overall depreciation of the yen. This will have apositive impact on sales.
sales However,
However as shown here,
here the impact on operating income is anegative 1.3 billion yen. This is because we have production occurring in Asian countries,
namely China, the Philippines, and Vietnam, all of whose currencies are comparativelystrong. This results in negative impact as product produced in locations with stronger
currency is then sold in markets with weaker currency. This is the 2 billion yen of negative
impact noted, leading netted negative impact on operating income.
Combined together, these foreign exchange impacts amount to an expected total impact ofnegative 1.4 billion yen from foreign currency exchange in FY15. Therefore, forecast of 70
billion yen in operating income for FY15 that I mentioned includes minus 2.7 billion fromBlood Management and minus 1.4 billion from foreign exchange.

16This is the final slide. ROE is a subject of much recent discussion. Terumo’s ROE
as shown on the balance sheet was 7
7.3%
3% in FY13
FY13, and 7
7.2%
2% in FY14
FY14, but we haveincluded two other important factors here on this graph.
First is the one written on top, the influence of goodwill amortization. As you areaware, goodwill is amortized annually within Japanese accounting practices.
However, in IFRS or in GAAP in the United States, goodwill is not amortizedannually. Therefore we are showing here the impact of goodwill amortization, whichwas 3.0% in FY13 and 2.8% in FY14.
In addition to these, another factor is the increase in FX translation adjustment.
Especially in 2011, when we acquired BCT, the exchange rate was 80 yen to thedollar. Since the rate is now 120 yen to the dollar, this swing alone makes theamount 1.5 times larger. This is of course good for the company, but it also
increases the equity calculation and means that the denominator used to calculate
ROE increases.
When calculated for FY14, the FX translation adjustment totals an enormous 89
billion yen meaning a 1.4% impact on ROE. When these factors are calculated in,
we see that ROE for Terumo was 10.9% in FY13 and 11.4% in FY14. We
recommend that these factors be considered when looking at Terumo’s ROE.
That is all from me. Thank you.

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