[Terumo Corporation] Financial Results for the First Quarter of Fiscal Year Ending March 31, 2013: Reference

Financial Results for the First Quarter of Fiscal Year Ending March 31, 2013: Reference

Analysis of Business Performance<1> Overview of financial results for the quarter[1] Overview of consolidated financial results
Looking at an overview of the global medical market in the current quarter
consolidated cumulative period (between April 1 and June 30, 2012), in the U.S., while
the healthcare reform law introduced by the current administration was judged“constitutional” by the Federal Supreme Court, the Republican Party has said thatthrough the presidential election, it will demand the withdrawal of the judgment. InEurope, R&D bases where universities, national research institutes, corporations,
hospitals, etc. cooperate together have been established one after another toward theearly realization of regenerative medicine. Under tough financial conditions, individual
governments in Europe are focusing on subsidizing researches and supporting businessstartups. In Japan, there was also the reduction of drug & reimbursement prices.
Looking at emerging countries, we can anticipate the continuous growth of medical
device markets, as illustrated by the fact that at the Fifth Session of the 11th National
People’s Congress at the end of 2011, Wen Jiabao, Prime Minister of China, set “fullyextending the medical insurance to cover eight diseases such as uremia (end-stagerenal disease)” as one of its major missions. In Mexico, a bilateral agreement tomutually recognize regulatory approval systems as equivalent was extended to Japan,
and they promulgated a ministerial ordinance to make medical device approved andcertified in Japan subject to quick reviewing.
As shown above, the environment surrounding the medical market is changing globally,and new opportunities for growth to take advantage of our strengths have beenexpanding.
In our group, the interventional systems business has steadily improved performanceon a local currency basis not only in emerging countries, where the number of cases
are increasing thanks to improved medical standards, but also in the U.S. and Europe,
where the economic slowdown persists. In this business, sales of guidewires and otherbasic interventional products were favorable, furthermore high value added products
such as neurovascular embolization coils and self-expanding stents for peripheral
blood vessels have shown high growth rates.
Our group is currently heralding a target of “becoming a company with global
presence by 2020” and has been promoting the three-year mid-term management plansince last year, and our major initiatives in the current quarter consolidated cumulative-1-

[Terumo Corporation] Financial Results for the Fiscal Year Ended March 31, 2012: Reference

period are as follows:● Based on future growth strategy and to respond to increases in demand anticipatedin the medium and long-term, we have decided to newly build and expand production
bases in Vietnam and the Philippines respectively.
● To expand business in Europe, we have established a sales branch in Austria. In
this market, we previously conducted all sales activities through distributors, but going
forward, we will directly sell our products, in particular, ones of interventional
systems.
● We launched OFDI intravascular imaging systems in Europe. It was used in live
demonstration cases performed at the world’s leading cardiovascular intervention
course, drawing a considerable amount of interest among numerous physicians.
● We launched new neurovascular embolization coils in Japan. By adding twoproducts, we can now cover a wide range of coiling procedures and can offer coils
optimal for each treatment strategy.

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[Terumo Corporation] Financial Results for the Fiscal Year Ended March 31, 2012: Reference

As a result, our performance in the consolidated period of the first quarter of thisfiscal year is as follows:(Unit: millions of yen)
Q1 FYE Mar. 2012

Q1 FYE Mar. 2013

Changes %Changes %ResultsResults(Constant currency basis)

Net Sales

95,63095,8670.2

3.1

Gross Profit

50,842

51,692

1.7

6.1

Operating Income

17,37815,481(10.9)(2.5)

Ordinary Income

16,86812,981(23.0)－Net Income

9,772

8,159(16.5)－< Net Sales >Net sales were 95.9 billion yen or a 0.2% increase compared with the same period of
the previous fiscal year.
Geographic segments(Unit: millions of yen)Area

Q1 FYE Mar. 2012

Q1 FYE Mar. 2013

Changes %Changes %Results

Results(Constant currency basis)Japan

44,67545,5161.9

1.9Europe

19,483

17,729(9.0)

0.4

Americas19,917

20,4922.9

4.9

Asia and others

11,55312,1295.0

9.2

Total of Outside of Japan

50,95450,351

(1.2)

4.1

Total

95,63095,867

0.2

3.1

Though affected by the reduction in drug & reimbursement prices, net sales in Japan
increased to 45.5 billion yen, representing a 1.9% increase from the same period of theprevious year. At the same time, the interventional systems business was steadyoutside of Japan, maintaining good business on a local currency basis. Affected by theappreciation of the yen, however, outside of Japan, net sales dropped to 50.4 billion
yen, or a 1.2% decrease from the same period of the previous year.
<Gross Profit>
In spite of adverse factors such as the effect of the appreciation of the yen and pricereduction, gross profit increased to 51.7 billion yen or 1.7% increase compared withthe same period of the previous year, due to the shift to highly profitable products andincreased production.
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[Terumo Corporation] Financial Results for the Fiscal Year Ended March 31, 2012: Reference<Operating Income>With SG&A expenses and R&D costs increased, including planned growthinvestments, operating income decreased by 10.9% to 15.5 billion yen.
<Ordinary Income>
Affected by foreign exchange loss due to the appreciation of the yen, ordinary income
decreased to 13 billion yen or a 23% decrease from the same period of the previousyear.
<Net Income>Quarterly net income decreased by 16.5% from the same period of the previous year,
to 8.2 billion yen.
Net sales by business segments are as follows:
Please note that from this first quarter of the consolidated financial period, we havechanged the conventional four segments, namely, “General Hospital Business,”“Cardiac & Vascular Business,” “Blood Management Business” and “ConsumerHealthcare Business” to three segments of “General Hospital Business” integrating
the “Consumer Healthcare Business,” “Cardiac & Vascular Business,” and “BloodManagement Business.”
Business Segments(Unit: millions of yen)
Business

Q1 FYE Mar. 2012

Q1 FYE Mar. 2013

Changes

Changes %Segments

Results

Results%(Constant currency basis)

GeneralNet Sales

37,632

38,182

1.5

2.8

Hospital(Japan)

29,992

31,233

4.1

4.1

Business(Overseas)

7,640

6,948

(9.1)

(2.7)

Cardiac &Net Sales

39,95541,0562.8

7.2

Vascular(Japan)

11,923

11,707

(1.8)

(1.8)

Business(Overseas)

28,031

29,349

4.7

11.0

Blood

Net Sales

18,042

16,628

(7.8)

(5.2)

Management(Japan)

2,758

2,574

(6.7)

(6.7)

Business(Overseas)

15,283

14,053

(8.0)

(4.9)

This English translation has been prepared for general reference purposes. The Company is not responsible for any
consequence resulting from the use of the English translation in place of the original Japanese text. In any lega lmatter, readers should refer to and rely upon the original Japanese text of the tanshin (Financial Results) dated asof July 31, 2012.

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