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

Financial Results for the First Half of the Fiscal Year Ending March 31, 2020: Reference
Analysis of Business Performance
1. Overview of Financial Results for the First Half of the Fiscal Year Ending March 31, 2020
(1) Overview of Consolidated Business Results
In the first half of the current fiscal year (from April 1 to September 30, 2019), the ongoing trend in various
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 to achieve 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 Corporation withUnique Excellence,” aims to become recognized by medical professionals worldwide as a top brand and a trusted
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 half 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

1H
FYE3/2019

1H
FYE3/2020

Growth (%)

284,997
154,588
55,29647,582
44,52734,389307,278
171,463
67,044
59,15058,06545,621

7.8
10.9
21.2
24.3
30.4
32.7

34,45445,711

32.7(million yen)
Growth excluding
impact of forex
translations (%)
10.8
14.2
27.1
28.9
－－－(million yen)
Growth excluding
impact of forextranslations (%)

1H
FYE3/2019

1HFYE3/2020

Japan

91,07695,921

5.3

5.3

Europe56,23758,271

3.6

10.2

Americas84,30092,6239.9

12.5

Asia etc.

53,38260,461

13.3

18.4

Overseas total

193,921

211,356

9.0

13.4

Total

284,997

307,278

7.8

10.8

Regional revenue

Growth (%)

Revenue
Revenue totaled 307.3 billion yen, a growth of 7.8% versus the same period in the previous fiscal year.

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

In Japan, overall revenue increased year on year. Revenue trended briskly in the TIS business (interventiondevices) and the vascular graft business of the Cardiac and Vascular Company, in the General Hospital Company
owing in part to demand in the surgical product domain, and in the alliance business with other pharmaceuticalcompanies.
Revenue overseas climbed in comparison with a year earlier. Performance was driven by brisk revenue in the TISbusiness (intervention devices) and the neurovascular business of the Cardiac and Vascular Company, and thealliance business in the General Hospital Company.
Gross profit
Gross profit amounted to 171.5 billion yen, an increase of 10.9% compared with the previous fiscal year, reflecting
an increase in revenue as well as an increase in sales of high-margin products and improved cost structure, among
other factors.
Adjusted operating profit
In the period under review, adjusted operating profit came to 67 billion yen, an increase of 21.2% year on year.
This was attributed to an increase in gross profit along with slower progress in some selling, general andadministrative 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 totaled 59.2 billion yen, an increase of 24.3% year on year, owing to the rise in adjusted operating
profit.
Profit before tax
Profit before tax was 58.1 billion yen, an increase of 30.4% versus the same period a year earlier. This reflects theforex translation loss declining from 2.8 billion yen in same period of the previous year to 1.1 billion yen.
Profit for the period attributable to owners of the parent
Profit for the period attributable to owners of the parent totaled 45.7 billion yen, an increase of 32.7% year on year,driven by the increase in profit before tax.

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

Revenue results by company are as follows:

1H
FYE3/2019

1H
FYE3/2020

Growth (%)

Revenue

153,464

172,597

12.5

16.4

(Japan)22,32624,752

10.9

10.9(Overseas)

131,137

147,844

12.7

17.3

Revenue

81,22882,815

2.02.7(Japan)

62,83464,981

3.4

3.4(Overseas)

18,394

17,833(3.0)

0.1

Revenue

50,17351,7563.2

7.3(Japan)

5,806

6,077

4.7

4.7(Overseas)

44,36645,6783.0

7.6

Segment

Cardiac andVascular Company

General HospitalCompany
Blood
Management
Company(million yen)
Growthexcluding
impact of forex
translations (%)

Cardiac and Vascular Company
In Japan, sales were driven by stent graft, which we began selling on our own in the vascular graft business, while
overseas, sales were propelled by WEB, a new type of cerebral aneurysm embolization device, in the neurovascularbusiness. In addition, sales in the TIS business (intervention devices) were brisk globally. Accordingly, revenue in
the Cardiac and Vascular Company totaled 172.6 billion yen, a growth of 12.5% year on year.
General Hospital Company
The hospital systems business saw brisk sales of infusion and syringe pumps, AdSpray, a spray type adhesion
barrier, and Acelio, an antipyretic analgesic. In addition, there was an expansion in B2B business withpharmaceutical companies in the alliance business. Consequently, in the General Hospital Company revenue
amounted to 82.8 billion yen, an increase of 2.0% versus the period a year earlier.
Blood Management Company
In Japan, revenue increased amid brisk sales of products aimed at blood centers. Overseas, sales of products forblood centers were solid, and in emerging markets we won a competitive bid which resulted in strong sales.
Consequently, revenue in the Blood Management Company totaled 51.8 billion yen, an increase of 3.2% year onyear.

[Terumo Corporation] Financial Results for the First Half of the Fiscal Year Ending March 31, 2020: Reference(2) Overview of Consolidated Balance Sheets
Total assets stood at 1,148.4 billion yen, an increase of 27.6 billion yen. This increase was mainly attributable toan increase in property, plant and equipment of 40.2 billion yen from the application of IFRS 16 Leases, capital
expenditures to increase production, and construction of a new building by Terumo Yamaguchi Corporation,
despite a decline in cash and cash equivalents of 5.6 billion yen due to the payment of dividends and decline ingoodwill and intangible assets of 10.9 billion yen, in part reflecting the impact from an appreciation in the yen’svalue versus the US dollar compared with March 31, 2019.

Liabilities totaled 429.6 billion yen, an increase of 7 billion yen. This was mainly attributable to an increase inother financial liabilities of 31.2 billion yen from the application of IFRS 16 Leases, despite a 12.8 billion yen
decline in bonds and borrowings due to the conversion of convertible bonds.

Equity was 718.8 billion yen, an increase of 20.7 billion yen. This was mainly attributable to a decline in othercomponent of equity of 25 billion yen, which reflects a decline in exchange differences on translation of foreign
operations, owing to an appreciation in the yen’s value, while retained earnings increased 35.1 billion yen andtotal equity increased 10.4 billion yen because treasury stock was allocated for the conversion of convertible
bonds described above.

(3) Forecasts, including the Consolidated Financial Results for the Fiscal Year Ending March 31, 2020
There are no changes to our consolidated forecast announced on May 9, 2019. We anticipate an ongoing murkybusiness environment including changes in the environment surrounding the medical device and pharmaceuticals
industries, and forex rate trends. However, to achieve our group goals, we plan to pour energies into thedevelopment of high added-value products that will boost the quality and efficiency of healthcare, sales
expansion, continuous improvement to manufacturing costs, and effective use of selling, general andadministrative cost.