Terumo Corporation · TSE:4543

Terumo — H1 FY2013 Earnings Presentation

31 slides from Terumo's earnings presentation, Nov 6, 2013

1. Slide 1: Financial Results for the First Half of the Fiscal Year Ending March 31, 2014

   Financial Results for the First Half of the Fiscal Year Ending March 31, 2014 (FY2013) Terumo Corporation November 6, 2013

2. Slide 2: Highlights in 1H

   Highlights in 1H  Both sales and profit in line with forecast Corporate  Improved profitability from Q1  Interventional Systems marked continuous double digit growth in EU and U.S.  Sustained great domestic sales of Misago stent, growth Cardiac & driver in peripheral intervention field Vascular

3. Slide 3: Consolidated 1H Result: Marks Increase in Sales and Profit

   Consolidated 1H Result: Marks Increase in Sales and Profit (billion of yen) 1H FY2012 1H FY2013 YoY% Net Sales 191.8 226.0 +18% Gross Profit 100.5 (52.4%) 117.2 (51.8%) +17% SG&A Expenses 59.9 (31.2%) 71.4 (31.5%) +19% R&D Expenses 12.4 (6.5%) 15.3 (6.8%) +23% Operating Income 28.2 (14.7%) 30.5 (13.

4. Slide 4: 1H FY2013 Net Sales and Growth by Region

   1H FY2013 Net Sales and Growth by Region Interventional Systems marks continuous double digit growth in EU and U.S. (billion of yen) Outside Business Japan of Japan Asia & G. Total Segment Total Europe Americas China Others General 62.7 18.4 5.6 4.4 0.6 7.9 81.2 Hospital (3%) (2%) (-10%) (1%) (-16%)

5. Slide 5: SG&A Expenses

   SG&A Expenses Efficient management of SG&A within the range of increase in sales Devote R&D to focus business area (billion of yen) 1H FY2012* 1H FY2013 YoY YoY% General Administrative Total 68.9 71.4 +2.5 +4% R&D Expenses 13.8 15.3 +1.5 +11% SG&A Expenses Total 82.7 86.7 +4.0 +5% * Excluding Foreig

6. Slide 6: Operating Income Variance Analysis

   Operating Income Variance Analysis Expanded sales in Cardiac & Vascular and Blood Management Improved plant productivity 1.8 (billion of yen) 4.6 Lowered 2.4 plant productivity Price 0.8 SG&A G/P in Q1 erosion Device 1.4 increment tax in US 2.5 by sales Effect of 8.1 increase R&D temporary factors 1

7. Slide 7: Quarterly Consolidated Results: Improved Profitability

   Quarterly Consolidated Results: Improved Profitability (billion of yen) Q2 Q3 Q4 Q1 Q2 FY2012 FY2012 FY2012 FY2013 FY2013 (Jul - Sep) (Oct - Dec) (Jan - Mar) (Apr - Jun) (Jul - Sep) Net Sales 96.0 103.9 106.5 111.1 114.9 Gross 48.8 52.9 52.2 57.0 60.1 Profit (50.9%) (50.9%) (49.0%) (51.3%) (52.3%) S

8. Slide 8: Gross Profit, SG&A Expenses, Operating Income

   Gross Profit, SG&A Expenses, Operating Income Steadily improve profitability even without FX (%) 51.9 51.1 52.0 Gross Profit 48.9  Improve plant productivity 39.2 39.3 37.3 36.9 SG&A Expenses  Manage within the range of sales increase 15.0 14.7 9.7 11.8 Operating Income  Increase 2.9% points from

9. Slide 9: 1H Results: In Line with Forecast

   1H Results: In Line with Forecast (billion of yen) 1H Forecast 1H Results Variance Vs. Fcst Net Sales 222.0 226.0 +4.0 102% Operating Income 30.0 (13.5%) 30.5 (13.5%) +0.5 102% Ordinary Income 28.5 (12.8%) 29.6 (13.1%) +1.1 104% Net Income 19.0 (8.6%) 19.5 (8.6%) +0.5 103% Average Exchange Rate Fore

10. Slide 10: Operating Cash Flow

    Operating Cash Flow Operating Cash Flow Breakdown 37.6 Allocation 37.6 4.6 (billion of yen) Increase in 3.6 3.0 4.3 working 18.9 capital Contribution Refund of Others of securities corporate Capital to retirement taxes investment benefit trust resulting Depreciation from the & 25.2 28.2 Amortization

11. Slide 11: Key Initiatives in 1H and 2H

    Key Initiatives in 1H and 2H 2013/11/6 ©Terumo Corporation 11/31

12. Slide 12: Steady Growth of IVUS in JP (2.8 BJPY in 1H, 30% market share)

    Steady Growth of IVUS in JP (2.8 BJPY in 1H, 30% market share)  Support PCI treatment strategy by providing accurate image information  Launched new IVUS catheter (sensor located closer to catheter tip) • Enables to capture the image of lesion which was difficult to detect in the past  Expand sal

13. Slide 13: Occlusion Balloon for Liver Cancer (300 MJPY in 1H)

    Occlusion Balloon for Liver Cancer (300 MJPY in 1H)  Balloon occluded transarterial chemotherapy (B-TACE) technique is becoming widespread  Smaller tip profile of the system provides better accessibility to smaller peripheral arteries, being highly evaluated by physicians Occlusion micro balloon (

14. Slide 14: New Products Drives Blood Management Business (6% growth in 1H)

    New Products Drives Blood Management Business (6% growth in 1H)  Develop market with the automated blood component processing system  Saves time/labor/space and increases output/consistency/quality  Provides viable solution to the existing processing methods worldwide Improve output and efficienc

15. Slide 15: Steady Progress within Mid-term New Product Pipeline

    Steady Progress within Mid-term New Product Pipeline Segment Product FY13 Q1 Q2 Peripheral Stent (above the knee/SFA) JP ● Flow-diverting stent EU ● Neuro Occlusion balloon JP ● OFDI (Intravascular imaging system) JP ● Coronary Slenderized introducer sheath for TRI US ● Renal sympathetic denervation

16. Slide 16: Slenderized Sheath for TRI: Glidesheath Slender (GSS)

    Slenderized Sheath for TRI: Glidesheath Slender (GSS)  Allow women with small artery as well as elderly patients to undergo TRI  Slenderized outer diameter while maintaining identical inner diameter  Lowers risk in damaging on intravascular wall and shortens hemostasis time  Target the sales of

17. Slide 17: Key Initiatives in 2H FY2013

    Key Initiatives in 2H FY2013  Expand sales of both new and existing products  Launch mid-term new product pipeline on time  Boost sales of existing products • Cardiac & Vascular: sustain sales expansion of access devices by introducing TRI-related technologies • General Hospital: promote Smart Pu

18. Slide 18: New Products to Be Launched in 2H

    New Products to Be Launched in 2H Segment Product Region Balloon (below the knee) EU Peripheral PTCA Balloon Stent (below the knee) EU (Hiryu Plus) Neuro Coil assist stent China New PTCA balloon catheter JP Coronary Slenderized introducer sheath for TRI JP Needleless System Automated blood component

19. Slide 19: PTCA Balloon Catheter (Hiryu Plus)

    PTCA Balloon Catheter (Hiryu Plus)  Differentiate by introducing the most advanced technologies to matured market  Three-layer construction enables higher balloon pressure resistance while achieving excellent flexibility  Improved catheter shaft delivers better maneuverability  Target the sales

20. Slide 20: Maintain FY2013 Forecast

    Maintain FY2013 Forecast (billion of yen) FY2013 YoY% Forecast Net Sales 460.0 +14% Operating Income 70.0 (15.2%) +32% (Excl. Amortization) 85.0 (18.5%) +27% Ordinary Income 67.5 +31% Net Income 42.0 -11% US$ 95 yen Average Exchange Rate EUR 123 yen 2013/11/6 ©Terumo Corporation 20/31

21. Slide 21: Reference

    Reference 2013/11/6 ©Terumo Corporation 21/31

22. Slide 22: Net Sales by Region

    Net Sales by Region * (billion of yen) Consolidated: +19% (+5%) 1H 1H FY2012 FY2013 ( ) Excluding Foreign Exchange Japan Outside of Japan * Excluding Home Therapy +3% * +33% 34.4 (+6%) Europe +33% (+3%) 45.6 Americas +31% 41.4 (+5%) 54.1 90.0＊ 93.2 100.2 132.9 +39% 8.0 China (+11%) 11.2 Asia & +34%

23. Slide 23: Net Sales by Business Segment

    Net Sales by Business Segment (billion of yen) +7% +25% 1H * 1H (+2%) (+6%) FY2012 FY2013 ( ) Excluding Foreign Exchange * Excluding Home Therapy +28% (+6%) * 75.6 81.2 80.4 100.8 34.3 44.1 General Cardiac & Blood Hospital Vascular Management 2013/11/6 ©Terumo Corporation 23/31

24. Slide 24: Q2 FY2013 Net Sales and Growth by Region

    Q2 FY2013 Net Sales and Growth by Region (billion of yen) Business Outside of Japan Japan Total Asia & G. Total Segment Europe Americas China Others General 32.0 9.7 2.8 2.3 0.3 4.2 41.7 Hospital (2%) (3%) (-12%) (-2%) (-8%) (20%) (2%) Cardiac & 12.0 38.6 13.8 16.1 4.6 4.2 50.6 Vascular (8%) (7%) (7

25. Slide 25: Gross Profit Variance Analysis

    Gross Profit Variance Analysis 1.1 (%) 2.2 Lowered 0.5 plant Price 0.3 productivity Device erosion 0.9 FX tax in US Effect of temporary 52.4% factors occurred in 1H Mar. 2013 51.8% (inventory re- evaluation, etc) 1H 1H FY2012 FY2013 <Reference> Q1 Results 53.9% +1.8 -2.2 -0.4 -0.3 -1.5 51.3% 2013/11

26. Slide 26: SG&A Expenses

    SG&A Expenses (billion of yen) 1H FY2012 1H FY2013 YoY YoY% Salaries & Wages 25.4 31.3 +5.9 +23% Sales Promotion 5.7 7.0 +1.3 +24% Logistical Costs 5.0 5.4 +0.4 +8% Depreciation & Amortization 8.6 10.9 +2.3 +27% Others 15.2 16.8 +1.6 +10% General Administrative Total 59.9 (31.2%) 71.4 (31.5%) +11.5

27. Slide 27: Gross Profit, SG&A Expenses, Operating Income

    Gross Profit, SG&A Expenses, Operating Income (%) Gross Profit 50.9 51.3 52.3 50.9 49.0 SG&A Expenses 37.6 37.0 39.1 39.3 37.4 9.9 12.0 Operating Income 13.3 13.9 14.9 Q2 Q3 Q4 Q1 Q2 FY2012 FY2013 2013/11/6 ©Terumo Corporation 27/31

28. Slide 28: CAPEX, R&D Expenses

    CAPEX, R&D Expenses (billion of yen) FY2012 FY2013 1H FY2013 Result Forecast Result CAPEX*1 32.2 45.0 25.2 (56%) Depreciation & Amortization*2 32.6 37.0 18.9 (51%) R&D Expenses 27.1 30.0 15.3 (51%) *1 CAPEX: acquisition basis *2 Including intangibles %: Progress to forecast 2013/11/6 ©Terumo Corpora

29. Slide 29: Foreign Exchange Sensitivity

    Foreign Exchange Sensitivity (billion of yen / year) US$ EUR Net Sales 1.8 0.7 Operating Income 0.3 0.4 2013/11/6 ©Terumo Corporation 29/31

30. Slide 30: Changes of Quarterly Average Exchange Rates

    Changes of Quarterly Average Exchange Rates JPY 129 131 130 122 EUR (FY2013) 105 110 103 EUR (FY2012) 98 90 99 99 US$ (FY2013) 92 US$ (FY2012) 80 79 81 70 Q1 Q2 Q3 Q4 2013/11/6 ©Terumo Corporation 30/31

31. Slide 31: IR Contact

    IR Contact Terumo Corporation Corporate Communication (IR) Dept. E-mail: kouhou_terumo01@terumo.co.jp Among the information that Terumo discloses, the forward-looking statements including financial projections are based upon our assumptions using information available to us at the time and are not i

Terumo — H1 FY2013 Earnings Presentation on 6ix