[Terumo Corporation] Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2018: Reference

Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2018: Reference

Analysis of Business Performance
1. Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2018:Reference(1) Overview of Consolidated Business Results
In the first three quarters of the current fiscal year (from April 1 to December 31, 2017), the global
healthcare industry exhibited the following characteristics. In December 2017, the Japanese government
settled on the 2018 NHI revision to the reimbursement system for medical services. A negative revision
rate is to be implemented for drug prices and special treatment materials (also referred to as designatedinsured medical materials). Meanwhile, in the United States, Congress approved a tax reform bill. In
addition to cutting the federal corporate tax rate, the bill will repeal the mandatory insurance requirement
for all people which was set forth under the Affordable Care Act.

Amid this backdrop, as a global corporation with unique excellence, the Terumo Group continued to work
toward its Mid- to Long-term Vision of becoming recognized by medical professionals worldwide as a top
brand and a trusted manufacturer. To this end, we are focused on earning a high level of trust globally forour 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, 2018 are as follows:

Net sales
Net sales totaled 437.0 billion yen, an increase of 16.7% compared with the same period in the previous
fiscal year.
(million yen)
Q1-Q3

Q1-Q3

FYE3/2017

FYE3/2018

Growth (%)

Growth excluding
impact of forex
translations (%)

Net sales

374,394436,955

16.7

12.2

Gross profit

203,712244,705

20.1

14.6

Operating income

58,904

72,37422.9

14.4

Ordinary income
Profit attributable to ownersof parent

52,20470,66335.4-31,822

63,48599.5--1-

[Terumo Corporation] Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2018: Reference(million yen)
Regional sales

Q1-Q3

Q1-Q3

FYE3/2017

FYE3/2018

Growth (%)

Growth excluding
impact of forex
translations (%)

Japan

139,591

142,872

2.4

2.4

Europe68,327

86,11926.0

16.5

Americas98,934

126,290

27.7

21.6

Asia etc.

67,541

81,671

20.9

14.6

Overseas total

234,803

294,082

25.2

18.1

Total

374,394436,955

16.7

12.2

In Japan, overall sales increased year on year, reflecting brisk sales in the Interventional Systems (TIS) business in
the Cardiac and Vascular Company for products including access devices, the VISICUBE, an intravascularultrasound system, and AltaView, an intravascular ultrasound catheter.
Meanwhile, overseas sales expanded in contrast with a year earlier. In the TIS business in the Cardiac andVascular Company, access device sales trended briskly. At our production subsidiary in Puerto Rico, which is aterritory of the United States, production of the Angio-Seal, a vascular closure device, had been suspended since
September 20, 2017 due to the impact of Hurricane Maria. Production was resumed in November 2017 andshipments were recommenced in January 2018. In the neurovascular business, sales increased owing to solid sales
for products including coils for the embolization of cerebral aneurysms. Furthermore, in the Blood ManagementCompany, sales grew to blood centers and in the field of therapeutic apheresis systems.

Gross profit
Gross profit amounted to 244.7 billion yen, a rise of 20.1% compared with the same period in the previous fiscalyear. This mainly reflects contribution from an expansion in sales at the Cardiac and Vascular Company, whichboasts a high profit margin, and a reduction in manufacturing costs at the General Hospital Company.

Operating income
Operating income came to 72.4 billion yen, a growth of 22.9% year on year. The growth in gross profit offset anincrease in selling, general and administrative expenses.

Ordinary income
Ordinary income stood at 70.7 billion yen, a growth of 35.4% year on year. This reflects the increase in operating
income as well as a decrease in non-operating expense given that the loss on foreign exchange translations posted
in the same period a year earlier were not incurred in the first three quarters of the current fiscal year.

Profit attributable to owners of parent
Profit attributable to owners of parent totaled 63.5 billion yen, a rise of 99.5% year on year. This is attributable toan increase in ordinary income and also a one-off decline, mainly in the corporate tax, owing mainly to the-2-

[Terumo Corporation] Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2018: Reference

revaluation of deferred tax assets and liabilities due to the tax reform in the United States.

Net sales results by company are as follows:(million yen)Segment

Q1-Q3

Q1-Q3

FYE3/2017

FYE3/2018

Growth (%)

Growth excluding
impact of forex
translations (%)

Cardiac andNet sales

186,570

240,038

28.7

22.6

Vascular Company(Japan)

37,34540,5488.6

8.6(Overseas)

149,225

199,490

33.7

26.1

General Hospital

Net sales

118,979

120,2311.1(0.3)

Company(Japan)93,515

93,7930.3

0.3(Overseas)

25,464

26,438

3.8

(2.3)

Blood

Net sales

68,692

76,510

11.4

5.7

Management(Japan)

8,577

8,368

(2.4)

(2.4)

Company(Overseas)

60,114

68,141

13.4

6.8

Cardiac and Vascular Company
In Japan, overall sales increased year on year, reflecting brisk sales in the TIS business for products such as accessdevices, the VISICUBE, an intravascular ultrasound system, and AltaView, an intravascular ultrasound catheter.
Meanwhile, overseas in the TIS business, access device sales trended briskly. At our production subsidiary in
Puerto Rico, which is a territory of the United States, production of the Angio-Seal, a vascular closure device, hadbeen suspended since September 20, 2017 due to the impact of Hurricane Maria. Production was resumed in
November 2017 and shipments were recommenced in January 2018. In the neurovascular business, sales weresolid for coils for the embolization of cerebral aneurysms, which use hydrogel, and suction catheters.

Accordingly, net sales in the Cardiac and Vascular Company totaled 240.0 billion yen, a growth of 28.7% year onyear, reflecting double-digit sales expansion in the overseas segment.

General Hospital CompanyIn Japan, we launched the TERUFUSION Infusion Pump Type 28 in August 2017. And sales of pain management
and peritoneal dialysis products also grew. Reflecting this, net sales in the General Hospital Company were 120.2
billion yen, an increase of 1.1% versus the same period a year earlier.

Blood Management Company
Sales were strong to blood centers in Latin America and Asia. Also therapeutic apheresis system sales grew,
mainly in North America, reflecting replacement demand.
Consequently, net sales in the Blood Management Company totaled 76.5 billion yen, a rise of 11.4% year on year.
-3-[Terumo Corporation] Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2018: Reference(2) Overview of Consolidated Balance Sheets
Total Assets
As of December 31, 2017, total assets stood at 1,085.4 billion yen, an increase of 64.0 billion yen compared with
March 31, 2017.
Current assets amounted to 421.2 billion yen, an increase of 72.0 billion yen, primarily attributable to an increasein cash and deposits.
Non-current assets came to 660.9 billion yen, a decrease of 7.2 billion yen. Property, plant and equipment
increased 7.1 billion yen, intangible assets were down 15.5 billion yen, and investments and other assets rose 1.2
billion yen.

Total Liabilities
Liabilities came to 531.4 billion yen, a decrease of 500 million yen.
Current liabilities totaled 123.6 billion yen, a decline of 124.8 billion yen primarily attributable to the repaymentof short-term loans payable.
Non-current liabilities were 407.8 billion yen, an increase of 124.3 billion yen, owing in part to a rise in long-termloans payable.

Total Net Assets
Total net assets totaled 554.0 billion yen, a growth of 64.5 billion yen.
Terumo’s equity ratio stood at 51.0%, a rise of 3.1 percentage points compared with March 31, 2017.

(3) Forecasts, including the Consolidated Financial Results for the Fiscal Year Ending March 31,
2018
We upwardly revised our full-year consolidated financial forecasts for net sales, operating income, ordinary
income and profit attributable to owners of parent. In addition to brisk earnings performance in each businesssegment, the yen is depreciating in value in contrast with our forex rate forecast at the start of the fiscal year.
Moreover, this factors in a one-off decline, mainly in the corporate tax, owing mainly to the revaluation ofdeferred tax assets and liabilities due to the tax reform in the United States.
For details refer to the “Terumo Revises the Full-Year Results Forecast for FY 2017” which we released onFebruary 8, 2018.

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