3Shinjiro Sato
President,Cardiac and Vascular Company

Cardiac andVascularCompany© Terumo Corporation

Business Overview: Cardiac and Vascular Company
FY15 SalesTIS
CardiacandVascularCompany(C&V)

NeurovascularCVVascular

FY14 to 15
Major Products
Growth177 B JPY

15%

• DES
• PTCA Balloon• Access Devices

26 B JPY

26%• Coil• Flow Diverter• Aspiration Catheter

42 B JPY

7%• Oxygenator• Heart Lung Machine• Blood Parameter Monitoring

14 B JPY

4%• Grafts• Frozen Elephant Trunk Device• AAA Stent Graft

259 B JPY

13%

© Terumo Corporation

Dec 12, 20161/22

Mid- to Long-term Vision
Recognized globally as a“Top brand”
among cardiac and vascularcompanies

 Be within the top three players ineach market where we participate
 Gain world-class trust from customers foroverall quality (in product, supply, andservice)© Terumo Corporation

Dec 12, 20162/22

Market Dynamics and Opportunities
環境変化

MarketIndustry

Market Environment:
Headwind

Business Opportunities
成長機会

Slowing demand indeveloped markets

US as a new frontier for C&V

Price pressure

Strong demand in emerging markets

Evidence-driven

Improved treatment efficacy bydevices with high quality and usability

Consolidation

Niche market, less competition

Tighter quality
regulations

Highly valued, world-class QMS

Shifting business model

Opportunities to differentiate strategy© Terumo Corporation

Dec 12, 2016

3/22

Mid- to Long-term Growth Strategy: C&V Company
Key initiatives to execute the strategy
Evolve a balanced “Advanced andPlatform” model
Further develop global frontiersMarket dynamics
andC&V’s strengths

Recognized globally as a

Leverage synergies across fourbusinesses
Gain a competitive edge throughinnovation“Top brand”
among cardiac and vascularcompanies

Strengthen operational capabilities
and infrastructure© Terumo Corporation

Dec 12, 2016

4/22

Competitive Advantage #1

Evolve “Advanced and Platform”

Uniquely positioned with a differentiated portfolio(achieving a balance between therapeutic and platform products)
Therapeutic
DevicesAdvanced devices,
embolics, etc.

Stent
Graft

Coil andStent

DES

DCB

Advanced(Therapeutic)

TRI
Support Devices

Platform(Differentiated)

Embolicbeads

Differentiatedones to maximize
efficacy ofadvanced therapy

Guidewire

SheathOxygenator

Vascularclosure
IVUS

Little to no focus oncommoditized segments© Terumo Corporation

Dec 12, 2016

5/22

Competitive Advantage #2

Evolve “Advanced and Platform”

Our focus: Provide a vertically integrated solution for vascular intervention

Advanced(Therapeutic)

Platform(Differentiated)

VascularIntervention

VascularIntervention,
Interventional
Oncology

Value

Products

Enables effective andcost-efficient therapy

Coil
Stent
Embolic Beads

Pretreat lesion andBalloon
Lesion Access deliver Rx devices toGuiding Catheter
Management enhance treatment
Guidewire
outcome (TRI compatible) IVUS
Entry Site Enables lessManagement

invasive therapy© Terumo CorporationSheath
TR Band
Vascular Closure

Dec 12, 2016

6/22

Optimize Portfolio

Evolve “Advanced and Platform”

Achieve balanced growth in the Advanced and Platform products portfolio
 DES: Selective expansion
and life cycle management

Advanced
 Comprehensive
neurovascular
products offering Peripheral: Comprehensive
products offering andleverage TRI approach Expand Interventional
Oncology products lineupPlatform

Strong No.1 in access segment
No.1 in oxygenator market share© Terumo Corporation

Dec 12, 2016

7/22

Strategic Expansion of DES

Evolve “Advanced and Platform”

Product pipeline
Improvingdeliverability

MetalDES“Ultimaster Tansei”

Advancing Ultimaster:Renewing stent design

Next metallic DES

Optimizing complex lesion treatment

Bioresorbable

Regional
Targets

Next generation DES

Concurrent development while assessing market trends
Target segments: Simple lesion and younger patients

Japan
No.1
market share

EuropeEmerging
MarketDouble theshare

Double theshare© Terumo Corporation

China
Expandtherapeuticsegment

BRS

US
Selectively abstain
from metallic DESmarket
Dec 12, 2016

8/22

Expand Peripheral and IO businesses
Peripheral
Expand the product offering•••

Offer products from access to stentDevelop a variety of therapeutic devices
Complement with strategic partnerships

Major upcoming product:Drug Coated Balloon

Evolve “Advanced and Platform”

Interventional Oncology (IO)
Expand further comprehensive offerings••

Offer access and therapeutic devices
Offer a range of therapeutic options

Pursue RAVI approach (TRI)

Pursue R2P approach (TRI)

CA-IS : US R&D for vascular interventional products located in California
Leverage MicroVention technologies (drug coating and polymer)© Terumo Corporation

Dec 12, 2016

9/22

Offer Full Range of Neurovascular Products

Evolve “Advanced and Platform”

Total Neurovascular Company: Expand non-coil and stroke devices
Flow Diverter

AdvancedCoils

Stent
CoilBalloonCarotid Stent

Clot Retriever

New Aneurysm
Embolization Device

Stroke Devices
Aspiration Catheter© Terumo Corporation

Dec 12, 201610/22

Prioritize Investment

Further develop
the global frontiersSignificant growth opportunities in large markets such as US, China, andemerging markets

US Enter and expand therapeutic product offerings in peripheral andneurovascular markets
 Extend access product line and get further TRI approach penetration
 Expand R&D and manufacturing capabilities

China Expand therapeutic product offerings in peripheral, interventional
oncology and cardiovascular surgery markets
 Launch a new renal denervation catheter Improve capability for regulatory requirements and optimize thesupply chain Achieve balanced expansion of advanced and platform products (incl. DES)

Emerging Markets

 Pursue strategic investment for long-term growthIndia: Market with demographic dividend Explore opportunities in 1) middle tier markets, and 2)
specialized products for emerging markets© Terumo Corporation

Dec 12, 2016

11/22

Create Synergies across Four Businesses

Leverage synergies acrossfour businesses

1) Share best practices, 2) Utilize technologies and sales channels, 3) Optimize
R&D and production, 4) Collaborate on projects in adjacent markets
Core technologies

TIS

Neurovascular
Metal processing
Blading
Polymer

C&V
HQOpportunities to leverage synergies

Plastic molding
CoatingProduction technology

R&D

Production

CVCA-IS

Ashitaka
Vietnam
MarylandVascularPump
Hollow Fiber
X CoatTextileSealing technology
Ring stent© Terumo Corporation

Costa Rica

Sales &Marketing

JapanUSDec 12, 2016

12/22

Leverage Our Technologies and Channels to Gain Opportunities
That Arise from Expanding Less Invasive Treatments
Leverage synergies acrossfour businesses

Expand application of vascular interventionLess invasive

Cardiology

RDNMCSInterventionalApproach

LAAPTCA

TAVR

CABG

Vascular

Ablation

PTAAAACAS
Coil

Peripheralembolization

Cardiovascular

Valvuloplasty

TMVRRadiology

Neurovascular

TAA

Stroke

CEAGI

Clip

Neurosurgery

SurgicalApproach

Greater opportunities inadjacent segments© Terumo Corporation

Dec 12, 2016

13/22

Accelerate Innovation Globally (TIS)

Gain a competitive edge
through innovation

Faster development, closer to the market, by the organization with thecore technology

TCSC Interventional Oncology, Microcatheter

Platform and Stent
DES, Peripheral Stents
Platform Products

AshitakaCalifornia

Imaging and Drug
OFDI and IVUS
Next generation DESPartnership
PTA Balloons (Kaneka)
Renal Denervation (AngioCare)
Radioembolic Beads (Quirem)

ShonanCA-IS (New markets)
Embolic Beads
Carotid Stent
DCB
Atherectomy

AccessMarylandThird Party© Terumo Corporation

Micro-access
Large bore sheath
Guiding sheathDec 12, 2016

14/22

Upcoming Innovative Products

Gain a competitive edge
through innovation

Expected to achieve first-to-market in the US
Aneurysm Embolization Device

Frozen Elephant Trunk Device

New oxygenator(MicroVention)(Vascutek)(CV)

A hybrid device combining a
conventional vascular graft anda stent graft for thoracic aortasurgery

An oxygenator featuring theworld’s smallest priming
volumeWEB

New aneurysm embolization
device along with conventional
coil products
Single and quick deployment
shortens procedure time
Expanded indication forcomplex procedures

Thoraflex HybridThoraflex hybrid enables two
separate surgeries to be
combined into one surgery© Terumo CorporationNX

Cost-competitive product
Potentially lowers the risk ofinfection
Dec 12, 2016

15/22

Optimize R&D and Production Site

Strengthen operational
capability and infrastructure

Define roles for each factory as R&D driven, mass production, andcategory focused to achieve stable supply and cost competitiveness
California
Ashitaka
Glasgow

R&D and production for
vascular grafts and stent grafts

R&D and production for TIS
and CV products

Yamaguchi

Production for TIS

Clinical Supply Co., Ltd.

Production for Interventional
Oncology

Vietnam Factory

Mass production for TIS
and Vascular

R&D and production for Neurovascular
R&D for peripheral intervention
products (CA-IS)

Ann Arbor:

R&D and production forHeart Lung Machine

Maryland:

Production for TIS and CV

Costa Rica

Mass production forNeurovascular

Advance production technologies© Terumo Corporation

Dec 12, 2016

16/22

Establish the Platform to Accelerate the Growth

Strengthen operational
capability and infrastructure

Pursue strategic
investment

Strengthen Organizational
Capabilities

R&D: 130+ B JPY

Strengthen HQ•••

Invest in intervention products
development in US
Leverage US and Japan strengths
Launch Ashitaka Innovation Center(tentative name)• Strengthen a TIS global HQ function• Develop clinical capabilities including
medical affairs• Hire, develop and promote global talent

CAPEX: 80+ B JPY•••

Expand US R&D

Expand Yamaguchi factory
Expand Costa Rica factory
Expand Vietnam production capability• Launch a full clinical affair team• Transfer some R&D function to Marylandfactory• Develop a new imaging system at theMichigan site
© Terumo Corporation

Dec 12, 2016

17/22

Establish World Class Quality

Product• Quality of Products• Quality of QMS• Quality for patients• Usability for customers

Supply• Stability in supply• Size Variation• Speed to launch new products

Service• Clinical support• Customer centric sales• Enrich clinical evidence© Terumo Corporation

Strengthen operationalcapability and infrastructure

Establish
Quality BrandDec 12, 2016

18/22

Product Pipeline
Long Term Pipeline
Long-term
New products
contributing toBeyond
FY20
growth beyond
2020

Mid-term
FY17 to FY19TIS• New Ultimaster• New PTCA Balloon• PTCA Balloon for US market• Radioembolic beads• Peripheral therapeutic devices for radial access• Drug Coated Balloon• Next generation DES• New imaging system• New closure device• Renal denervation catheter• Atherectomy• Devices for structural heart disease

aneurysm embolization device “WEB”
Neuro- •• New
Flow diverter “FRED”
vascular • Stroke devices• Advanced “WEB”• Advanced Coil• Coated stentCV• New generation oxygenator NX• Next generation blood gas
parameter monitoring “CDI”• Next generation stent graft “Anaconda LP”• Frozen Elephant Trunk device“Thoraflex Hybrid”

Vascular • New vascular graft “Triplex Advanced”© Terumo Corporation

Dec 12, 2016

19/22

Sales and Operating Income Targets toward FY21
Sales

Operating Income*Revenue growth to lead
Terumo group

Profit growth faster thanrevenue growth

Near double-digit
growthDouble digits
growthMaintain 25%+ adjusted operating margin*

Plan FX rate: USD=105 JPY, EUR=115 JPY*Adjusted operating income (IFRS)
Adjusted items: Intangible asset derived from acquisition, one-time acquisition expense, impairment, gain/loss from sales of stocks and others

FY10

FY16

FY21

FY10© Terumo Corporation

FY16

FY21
Dec 12, 201620/22

Growth Drivers
Neurovascular, Peripheral and IO lead the growth, andCV and Vascular improve their profitability
FY15
Revenue

Growth rate
(FY15-21)

Neurovascular
TIS- Peripheral, IO
Vascular
TIS- Cardiology
CV
TIS- Access© Terumo Corporation

Dec 12, 201621/22

Beyond FY21
Mastery inIntervention

StrokeIntegrated solution（Leveraging TRI） Heart Failure

Mastery in
Globalization

Expand USAchieve dominant Establish multiinfrastructuresite R&D andpresence inand productemerging markets production
offerings

Mastery inQuality andManufacturing

World-Class
Achieve No.1
Evolution ofproduction cost QA, RA, and CA business model

Artery-to-Vein

AF© Terumo Corporation

Diversify
therapeutictechnologies

Dec 12, 2016

Globalbranding

22/22

© Terumo Corporation

Disclaimer
The information that Terumo discloses and the forward-looking statements
including financial projections are based upon our assumptions using
information available to us at the time and are not intended to be guarantees offuture events or performance. Accordingly, it should be noted that actual
results may differ from those forecasts on projections due to various factors.
Factors affecting actual results include, but are not limited to, changes in
economic conditions surrounding Terumo, fluctuations of foreign exchange
rates, and state of the competition.
The market share information in this presentation is partly derived from ourown independent research.

© Terumo Corporation