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

Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2021: Reference
Analysis of Business Performance
Analysis of Business Performance
1. Overview of Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2021
(1) Overview of Consolidated Business Results
In the first quarter of the current fiscal year (from April 1 to June 30, 2020), in the healthcare market there was adecline in demand from postponement of elective procedures, the decline in exams and diagnostics, and the decline
in the number of days of hospitalizations, etc. for various clinical departments, especially in April and May due tothe major impacts of the COVID-19 pandemic. The Company saw impacts emerge in Cardiac and VascularCompany, but impacts on General Hospital Company and Blood and Cell Technologies Company were minimal.
Also, demand increased for certain products. Financial results for the first quarter indicate the entire company wasable to mitigate the impacts of the COVID-19 pandemic to a certain degree.
Financial results for the first quarter 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 the owners of
the parent

Q1
FYE3/2020

Q1
FYE3/2021

Growth (%)

152,526
85,16933,94929,16828,84422,751

131,298
68,873
21,685
18,073
17,885
13,971(13.9)(19.1)(36.1)(38.0)(38.0)(38.6)

22,791

14,002(38.6)(million JPY)
Growth excluding
impact of FX
translations (%)(11.4)(15.4)(30.2)(31.2)－－－

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

Q1
FYE3/2020

Q1
FYE3/2021

Japan

45,95444,334

(3.5)

(3.5)

Europe30,03725,464(15.2)(11.9)

Americas46,02536,288(21.2)(17.8)

Asia and others

30,50925,211(17.4)(13.2)

Overseas total

106,572

86,963(18.4)(14.8)

Total

152,526

131,298(13.9)(11.4)

RegionGrowth (%)

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

RevenueRevenue totaled 131.3 billion JPY, a decrease of 13.9% versus the same period in the previous fiscal year.
In Japan, overall revenue decreased by 3.5% year on year. The impacts of the COVID-19 pandemic on Cardiac andVascular Company were smaller than other regions, and there was increased demand for certain products, such as
thermometers and hand sanitizer in General Hospital Company.
Revenue overseas declined by 18.4% in comparison with a year earlier. The impacts of the COVID-19 pandemicon 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.
Gross profit
Gross profit came to 68.9 billion JPY, a decrease of 19.1% 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 quarter under review, adjusted operating profit came to 21.7 billion JPY, a decrease of 36.1% 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 to18.1 billion JPY, a decrease of 38.0% year on year, owing to the decrease in adjusted
operating profit.
Profit before tax
Profit before tax was 17.9 billion JPY, a decrease of 38.0% versus the same quarter 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 14.0 billion JPY, a decrease of 38.6% year on year,
driven by the decrease in profit before tax.

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

Revenue results by company are as follows:
Furthermore, 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 thesegment information. The name of reportable segment for the first quarter of the fiscal year ended March 31, 2020
was also revised as “Blood and Cell Technologies Company”.

Q1
FYE3/2020

Q1
FYE3/2021

Growth (%)

Revenue

88,502

67,315(23.9)(21.5)(Japan)12,148

10,911(10.2)(10.2)(Overseas)

76,35456,403(26.1)(23.3)

Revenue

39,75639,183

(1.4)

(0.3)

(Japan)31,20730,821

(1.2)

(1.2)

(Overseas)

8,548

8,362

(2.2)

3.1

Revenue

24,212

24,733

2.2

7.1(Japan)

2,543

2,535(0.3)(0.3)(Overseas)

21,66922,1972.4

8.0

Segment

Cardiac andVascularCompanyGeneral HospitalCompany
Blood and CellTechnologies
Company(million JPY)
Growthexcluding
impact of FX
translations(%)

Cardiac and Vascular Company
In Japan, sales were driven by extracorporeal membrane oxygenation (ECMO) systems in the Cardiovascularbusiness, but revenue declined because of the significant impacts of the COVID-19 pandemic on other businesses.
Overseas, the same impacts were significant particularly on TIS business (interventional devices) in the Americasand Europe. Accordingly, revenue in Cardiac and Vascular Company totaled 67.3 billion JPY, a decrease of 23.9%
year on year.
General Hospital Company
In Japan, the COVID-19 pandemic impacted many products, but sales were driven by narcotic analgesic,
thermometers, UV light robots, hand sanitizer, etc., in the Hospital Systems business. Overseas, the B2B businesswith pharmaceutical companies in the Alliance business grew. Reflecting these, revenue in General HospitalCompany was 39.2 billion JPY, a decrease of just 1.4% versus the period a year earlier.
Blood and Cell Technologies CompanyIn Japan, sales of blood center products declined slightly due to the slowdown in demand for blood preparations
caused by the impacts of the COVID-19 pandemic. Overseas, therapeutic apheresis systems saw a slowdown indemand for the same reasons, but sales were driven by new software for blood component collection systems andthere was an increase in collection demand for COVID-19 convalescent plasma therapy. Consequently, revenue inBlood and Cell Technologies Company totaled 24.7 billion JPY, a rise of 2.2% year on year.

[Terumo Corporation] Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2020: Reference(2) Overview of Consolidated Balance Sheets
Total assets stood at 1,286.6 billion JPY, an increase of 45.3 billion JPY. This was mainly owing to an increase in
cash and cash equivalents of 45.1 billion JPY caused by long-term borrowings, as well as an increase in property,
plant and equipment of 5.2 billion JPY from investments in manufacturing facility. In contrast, goodwill andintangible assets declined by 5.3 billion JPY due to the impacts of the stronger yen against the US dollar related toforeign exchange rates (FX) from the end of the previous year.

Total liabilities came to 528.6 billion JPY, an increase of 42.2 billion JPY. This was mainly attributable to thepartial conversion of convertible bond-type bonds with subscription rights, while bonds and borrowings increased
55.2 billion JPY due to long-term borrowings and other current liabilities declined 8.1 billion JPY due to thepayment of bonuses.

Total equity was 758.0 billion JPY, an increase of 3.1 billion JPY. This mainly reflects an increase from posting
profit for the period attributable to owners of the parent of 14.0 billion JPY and an increase from allocatingtreasury stock for the conversion of convertible bond-type bonds with subscription rights to shares of 3.6 billion
JPY, compared to a decrease of 10.5 billion JPY due to the payment of dividends from retained earnings, while
the booking of other comprehensive income associated with the impacts of yen strength in FX resulted in a 4billion 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-19
pandemic (second wave), and risks posed by a drop in demand and supply chain interruptions caused by a secondwave. Nevertheless, we plan to pour energies into the introduction and expansion of high added-value productsthat will boost the quality and efficiency of healthcare, along with further improvement to manufacturing costs,
and effective use of selling, general and administrative expenses.