I will now explain our results for the 1st quarter of the fiscal year ending March 31, 2018.

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First, an overview of the results.
Double-digit sales growth overseas drove our achievement of strong growth in bothsales and profit.
In all overseas markets, sales grew in double digits, with overseas growth of 19%; bycompany, all four businesses of the Cardiac and Vascular Company achieved doubledigit growth, driving sales growth at 12% for the group as a whole.
In operating income, as you know, the result of the 1st quarter of the previous year,
FY2016, was an unusually high figure. Nevertheless, operating income in this 1st quarter
exceeded the previous year, growing 9%. That growth was 17% when excluding FXimpacts.
There was an FX loss of 5.5 billion yen in the same quarter of 2016, but without that loss
this year, we saw major growth in both ordinary and net income. Net income increased
61% year
year-on-yearon year to 16.3
16 3 billion yenyen. Sales,
Sales gross profit
profit, operating income
income, ordinary
income, and net income figures all represented our highest-ever of any 1st quarter incompany history.
In addition to the good overseas Cardiac and Vascular performance, recent acquisitions
also made large contributions to sales.
When excluding these acquisition contributions, sales grew 4%, and operating income
grew 15%.

2Here is the Operating Income Variance Analysis.
The largest positive factor driving gross profit was the increase in sales, which accounted for 8.1
billion yen. Up to last fiscal year, we showed the factors of business mix and reduced costs
separately in the variance analysis; we have combined these starting this year. Positive impact
from volume increase is the 8.1 billion yen, and impact from margin improvement is next. In otherwords, the two gross profit factors are separated here.
Up to last year we had large cost reduction factors here; for example, the Ultimaster DES, orquality management system improvements related to the consent decree, or the US medical
device tax. With those kinds of large factors, we had a separate bar, but without such factors thisyear, we have combined the two into a single gross margin improvement bar.
P i erosionPrice
i was llargelyl as expected.
t dWithin SG&A, we have begun showing the portion representing salaries and wages; in thisquarter, from the total of 3.5 billion yen, the salary and wage amount was 2.1 billion yen; otherSG&A items accounted for 1.4 billion yen.
The R&D cost increase and increase of goodwill, etc. are also included here.
Negative FX impact here was 1.5 billion yen. There were no major fluctuations in yen rates
against the dollar or euro between this and the previous 1st quarters, except small amount of 300
million yen. As you may remember, though, the yen appreciated strongly at the end of 1st quarterof last fiscal year
ear with
ith the announcement
anno ncement of Brexit;
Bre it without
itho t that kind of appreciation this year
ear anegative year-on-year impact of 1.2 billion yen of reduction by unrealized inventory profit occurred,bringing the overall impact to minus 1.5 billion.
All of these variances brought operating income from 21.4 billion yen in the 1st quarter of last fiscal
year to 23.4 billion yen in this one.
There is a note on the upper right of the slide regarding operating income impact of acquisitions
when excluding amortization and the amount of amortization, respectively.
In FY17 guidance, positive operating income impact of acquisition without amortization over theyear was forecast at 3 billion yen
yen, but reached 1
1.4
4 billion in the 1st quarter,
quarter largely owing to salesof Angio-Seal and other acquired products being very good. The 1st quarter amortization number
was 2.6 billion yen, or about one-fourth of the annual guidance of 10 billion yen. However, please
be aware that the numbers here remain tentative, pending the completion of the PPA process.

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Next is net sales by region.
As I mentioned, overseas markets grew very well; this brought the percentage of sales fromJapan down four points year‐on‐year, from 36% to 32%.
In Japan, Cardiac and Vascular sales grew positively, but negative growth for the General
Hospital Company resulted in slightly minus growth overall.
With the main factor of strong growth in Cardiac and Vascular, sales as a whole overseas grew indouble digits.
There was little FX impact this quarter, so the numbers in parentheses are fairly close to theactual ones.
In addition, not only Cardiac and Vascular, but all companies in China grew in double digits.
In Asia an others, Blood Management also grew in the double digits.
In the Americas last fiscal year, FX rates and Blood Management were major negative factors,
pand Blood Managementgwas ppositive. This meant that
but this yyear there was little FX impact,
the strong Cardiac and Vascular performance was reflected as‐is in the overall results.

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Next is sales by company.
The first thing I would like to point out here is the percentage of Terumo Group sales accounted for by theCardiac and Vascular Company; a year previously it was 51%, but that share grew six points to 57% in this
1st quarter.
In our Mid‐ to Long‐term growth strategy that began April this year, we planned for organic growth alone
to increase over a span of five years with Cardiac and Vascular accounting for 55%.
In the first year of the plan, though, we have already reached 57%, due to the impact of acquisitions; thishas contributed to improved gross margin.
New acquisitions of the Cardiac and Vascular Company have started out very strongly. Its existing corebusinesses have maintained their good performance as well, leading to double‐digit growth for all thebusinesses in that company.
Specifically,py, yearyon year,y , the TIS business grew
g24%,, the neurovascular business 35%,, the CV business
12%, and vascular business 44%.
For the General Hospital Company, the main factors of a distributor inventory adjustment andconservative buying of pump in Japan led to minus 4% year‐on‐year growth; I will explain this in further
detail later.
In the Blood Management Company, FY15 and FY16 saw price erosion in the US blood center business;those pprices have now largely
g y stabilized. In the emerging
g g markets of Asia and Latin America,, sales haveincreased, as have those of therapeutic apheresis; these contributed to 4% year‐on‐year sales growth.

5In the Cardiac and Vascular Company, new acquisitions, to primarily the TIS and vascular businesses,
contributedt ib t d greatly
tl tto sales,
l tto ththe ttune off 99.5
5 billibillion yen. TIS access ddevicesiremaini strong.
tIn the neurovascular business, sales of coils improved, after becoming somewhat flat in the previous year,
to go along with the strong non‐coil products. This was due to introducing new hydrogel coil products, andto good results of a clinical study showing superiority of hydrogel coils over bare coils. These factors led tolarge growth in the neurovascular business. I mentioned earlier that the neurovascular business grew
35%; even without the Sequent Medical acquisition that number was 27%.
The CV business has emerged from the consent decree, resuming sales of the CDI sensor last fiscal year
and the heart‐lung machine in June. Disposables are also selling well, contributing to double‐digit growth.
Those are the factors behind the strong sales growth.
The business profit amount increased due to higher sales volume.
Business profitability decreased year‐on‐year, owing to the very high 31% figure from the same period ofprevious year. Accounting for about half of this decline was FX impact, and other factors included priceerosion and the currently lower gross margin of Bolton products.
That is why business profit margin was 26% for the 1st quarter. Over the previous year it was 25%, and ourmid‐ to Long‐term growth strategy sets it at what we consider to be a very healthy 25%.

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In the General Hospital Company, sales grew negatively; however, the plan for the 1st quarter actually anticipated this.
As you see here, the phasing out of low
low‐profitability
profitability pharmaceuticals, nutrition, and healthcare products contributed
to the decline.
In the Alliance business, the FY16 1st quarter sales results included samples provided to pharmaceutical companies;
the same products will be instead sold in the 4th quarter of this fiscal year. This timing difference between fiscal years
resulted in a year‐on‐year decrease, but was anticipated and included in our plan.
That said, the sales decrease was slightly larger than what was in the plan, due to general hospital products.
One factor behind this larger decrease than expected was distributor inventory build‐up at the end of March, which
led to less purchasing in April. The subsequent months May and June are looking normal, but the decline in April has
yet to be absorbed.
There were two factors related to pumps; one was that hospitals were struggling with their budgets, leading
especially in the 1st quarter to less purchasing of capital goods.
Another reason for the decline was that, as we announced yesterday, we will release a new vertically‐positioned
pump in August; anticipation of this new pump influenced some customers to hold off on purchasing pumps in the 1stquarter.
However, the Alliance businesses and pumps, were originally expected to increase into the 2nd half of the year, andwe expect to see results to return to planned levels.
In business profit, we saw continued improvement to the business profitability on which we have made efforts thelast two or three years.
Business mix improvement and expense control combined for business profit improvement of 500 million yenyen.

7Next is Blood Management Company.
As you can see, Blood Management has returned to a growth pattern.
US prices have stopped eroding and nearly flattened out, and sales grew in double digits inemerging markets, Latin America, and Asia, and therapeutic apheresis grew as well; this resulted
in 4% year‐on‐year growth.
In business profit, sales expansion led to better margin through higher production volume forblood center products, and highly profitable therapeutic apheresis showed strong growth todrive a large increase.

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The next slide lists major topics for the quarter.
The main topic for the first quarter was the start of our new management team. In April, ourChairman, Mr. Mimura, and President, Mr. Sato, began their roles leading the new management
team. They were also introduced at the last earnings announcement.
In individual company news, I want to touch on the establishment of the new TIS Mastery Centeron our Ashitaka Factory sitesite. Last year,year we announced the new Innovation Center for TIS
development in Southern California, and now we are adding the TIS Mastery Center in Ashitaka.
Through these facilities, we plan to strengthen our internal development capabilities.

9This next slide shows our FY2017 new product pipeline. The products listed here are eachprogressing in development
d landd we dod not anticipate any major delays.
d lThis concludes my explanation of the earnings announcement for the 1st quarter of the fiscal
year ending March 2018.

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