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

Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2020: Reference
Analysis of Business Performance
Analysis of Business Performance
1. Overview of Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2020
(1) Overview of Consolidated Business Results
In the first quarter of the current fiscal year (from April 1 to June 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 andefficient 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 quarter 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 the owners ofthe parent

Q1
FYE3/2019

Q1
FYE3/2020

Growth (%)

143,020
79,85730,54425,87523,406
18,059152,526
85,16933,94929,16828,84422,751

6.6
6.7
11.1
12.7
23.2
26.0

18,091

22,791

26.0(million yen)
Growth excluding
impact of forex
translations (%)
8.5
8.8
17.8
16.8
－－－(million yen)
Growth excluding
impact of forex
translations (%)

Q1
FYE3/2019

Q1FYE3/2020

Japan

44,01045,9544.4

4.4

Europe29,60530,037

1.5

6.3

Americas42,76346,0257.6

7.9

Asia etc.

26,64030,50914.5

18.8

Overseas total

99,009106,572

7.6

10.4

Total

143,020

152,526

6.6

8.5

Regional revenue

Growth (%)

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

Revenue
Revenue totaled 152.5 billion yen, a growth of 6.6% versus the same period in the previous fiscal year.
In Japan, overall revenue increased year on year. Revenue trended briskly in the General HospitalCompany owing in part to demand in the surgical product domain, in the alliance business with otherpharmaceutical companies, and in the TIS business (catheters) and the vascular business of the Cardiac andVascular Company.
Revenue overseas climbed in comparison with a year earlier. Performance was driven by brisk revenue in thealliance business in the General Hospital Company, the TIS business (catheters) and the neurovascular business ofthe Cardiac and Vascular Company.
Gross profit
Gross profit amounted to 85.2 billion yen, an increase of 6.7% compared with the previous fiscal year, reflecting anincrease in revenue.
Adjusted operating profit
In the quarter under review, adjusted operating profit came to 33.9 billion yen, an increase of 11.1% year on year.
The rise in selling, general and administrative expenses, including R&D expenses, was offset by the increase ingross profit.
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 29.2 billion yen, an increase of 12.7% year on year, owing to the rise in adjusted operating
profit.
Profit before tax
Profit before tax was 28.8 billion yen, an increase of 23.2% versus the same quarter a year earlier. This reflects theforex translation loss declining from 2.3 billion yen in same period of the previous year to 0.3 billion yen in thefirst quarter.
Profit for the period attributable to owners of the parent
Profit for the period attributable to owners of the parent totaled 22.8 billion yen, an increase of 26.0% year on year,driven by the increase in profit before tax.

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

Revenue results by company are as follows:

Q1
FYE3/2019

Q1
FYE3/2020

Growth (%)

Revenue

79,53588,502

11.3

13.6(Japan)11,296

12,1487.5

7.5(Overseas)

68,23976,354

11.9

14.6

Revenue

38,81239,756

2.4

3.0(Japan)

30,16531,207

3.5

3.5(Overseas)

8,646

8,548

(1.1)

1.2

Revenue

24,59524,212(1.6)

1.0(Japan)

2,494

2,543

1.9

1.9(Overseas)

22,10021,669(2.0)

0.9

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 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 (catheters) were brisk globally. Accordingly, revenue in the Cardiac
and Vascular Company totaled 88.5 billion yen, a growth of 11.3% year on year.
General Hospital Company
The hospital systems business saw brisk sales of Acelio, an antipyretic analgesic, and for AdSpray, a spray typeadhesion barrier. In addition, there was an expansion in B2B business with pharmaceutical companies in thealliance business. Consequently, in the General Hospital Company revenue amounted to 39.8 billion yen, anincrease of 2.4% versus the period a year earlier.
Blood Management Company
In Japan, revenue increased amid brisk sales of products aimed at blood centers. Overseas, despite strong sales ofcell processing products, we experienced adverse effects from foreign exchange rates in Europe and emerging
markets and a drop in sales of products for blood centers compared to the strong results from the previous year end.
Consequently, revenue in the Blood Management Company totaled 24.2 billion yen, down 1.6% year on year.

[Terumo Corporation] Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2020: Reference(2) Overview of Consolidated Balance Sheets
Total assets stood at 1,127 billion yen, an increase of 6.2 billion yen. This increase was mainly attributable to anincrease in property, plant and equipment of 26.5 billion yen from the application of IFRS 16 Leases, despite adecline in cash and cash equivalents of 13.1 billion yen due to the payment of dividends and decline in goodwill
and intangible assets of 10.9 billion yen, in part reflecting the impact from an appreciation in the yen’s value
versus the US dollar compared with March 31, 2019.

Liabilities totaled 435.7 billion yen, an increase of 13 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 decline of 5.1
billion yen in other current liabilities due to the payment of bonuses and a decline of 3.5 billion yen in current tax
liabilities from the payment of income tax.

Equity was 691.3 billion yen, a decrease of 6.8 billion yen. This was mainly attributable to a decline in othercomponent of equity of 20.1 billion yen, which reflects a decline in exchange differences on translation of foreign
operations, owing to an appreciation in the yen’s value versus the US dollar compared with March 31, 2019,
offsetting an overall increase in retained earnings of 12.7 billion yen reflecting the posting of profit for the period
attributable to owners of the parent while dividend payments detracted from retained earnings.

(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.