"Financial Results for the First Half of FYE 3/2022"（with note）(1.0 MB)

Financial Results for the First Half of

Fiscal Year Ending March 31, 2022 (FY2021)

November 4, 2021

Naoki Muto

Chief Accounting and Financial Officer

Terumo Corporation

I am the CAFO, Muto. I will now explain the 2nd-quarter results for the fiscal year ending March 2022.

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Safe Harbor for Forward-Looking Statements and Use of Document

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 intended to be guarantees of future events or performance. Accordingly, it should be noted that actual results may differ from those forecasts or projections due to various factors. Factors affecting to actual results include, but are not limited to, changes in economic conditions surrounding Terumo, fluctuations of foreign exchange rates, and state of competition.

The market share information in this presentation is partly derived from our own independent research.

Information about products (including products currently in development) which is included in this material is not intended to constitute an advertisement or medical advice.

Terumo Corporation

Investor Relations Dept.

E-mail: [e-mail]

©TERUMO CORPORATION

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Highlights

FY21 Q2/Q2 YTD results

Revenue: Highest-ever quarterly and half-year revenue. Steady recovery in demand for Cardiac & Vascular and the revenue increased in the other two companies as well

Adjusted Operating Profit: Highest-ever Q2 and half-year adjusted operating profit. Although there were some negative factors as expected, the revenue increased in all companies. Expenses utilized as planned in Q2

FY21 guidance

The current guidance is reiterated. The annual dividend forecast per share increased by 2 JPY to 32 JPY

Continuous recovery in healthcare demand, including the number of procedures anticipated. Although some risks remain such as supply chain interruption, increase in the cost of raw materials, shipping and freight, we aim to achieve the current guidance by expense control

©TERUMO CORPORATION

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First, the highlights from the quarter.

Sales and profit were both our highest ever.

In sales revenue, demand for Cardiac and Vascular Company products made a significant recovery from COVID-19 impact. Although that company was somewhat affected by a repeated wave of COVID due to the Delta variant, the other two companies covered that impact.

In adjusted operating profit, a recovery in sales and product mix improvement both contributed. Expenses including SG&A, which rose slowly in the 1st quarter, progressed as planned in the 2nd quarter.

There is no change in the guidance for the full fiscal year, but we will raise the dividend to 32 yen from the previous 30 yen.

We anticipate a continued recovery of demand for procedures in the 2nd half, which will bring our results into a growth pattern. However, amid what is expected to become a more concerning situation of higher freight costs due to supply chain difficulties, and rising materials costs for things including oil and natural gas, we plan to carefully monitor conditions while controlling costs and striving to achieve our guidance.

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P&L Results

Revenue: Highest-ever quarterly and half-year revenue. Steady recovery in demand for Cardiac & Vascular, especially for TIS. Despite the negative impact on Cardiac & Vascular from the COVID-19 resurgence mainly in US and EU in Q2, the revenue increased in all companies

Adjusted Operating Profit: Highest-ever Q2 and half year adjusted operating profit. The negative impacts of volume-based procurement (VBP) in China and lowered production level were as expected and the profit increased in all companies. In accordance with eased movement restrictions due to the spread of vaccines mainly in US and EU, expenses utilized as planned in Q2

	100 M JPY	FY20 Q2 YTD	FY21 Q2 YTD	YoY%	YoY% (FXN)		FY20 Q2	FY21 Q2	YoY%
	Revenue	2,833	3,446	22%	17%		1,520	1,729	14%
	Gross Profit	1,505	1,862	24%	18%		816	920	13%
	(Gross Profit%)	(53.1%)	(54.0%)				(53.7%)	(53.2%)
	SG&A Expenses	859	955	11%	7%		458	490	7%
	(SG&A Expenses%)	(30.3%)	(27.7%)				(30.2%)	(28.4%)
	R&D Expenses	231	247	7%	4%		119	130	9%
	(R&D Expenses%)	(8.2%)	(7.2%)				(7.8%)	(7.5%)
	Other Income and Expenses	4	-2	-	-		-1	-3	-
	Operating Profit	418	659	57%	47%		238	296	25%
	(Operating Profit%)	(14.8%)	(19.1%)				(15.6%)	(17.1%)
	Adjusted Operating Profit	513	741	45%	36%		296	339	15%
	(Adjusted Operating Profit%)	(18.1%)	(21.5%)				(19.5%)	(19.6%)
	Profit before Tax	407	653	61%			228	293	28%
	(Profit before Tax%)	(14.4%)	(18.9%)				(15.0%)	(16.9%)
	Profit for the Year	318	500	57%			178	221	24%
	(Profit for the Year%)	(11.2%)	(14.5%)				(11.7%)	(12.8%)
	Average Exchange Rate(USD/EUR)	107JPY/121JPY	110JPY/131JPY				106JPY/124JPY	110JPY/130JPY
©TERUMO CORPORATION			4 / 24

Here are the P&L results for the 2nd quarter.

The numbers second from left, our year-to-date revenue, was 344.6 billion yen, a 22% increase year-on-year for the same period.

Adjusted operating profit was 74.1 billion, or a 45% increase. The numbers second from right are our 2Q standalone results. Revenue was

172.9 billion yen, a 14% year-on-year increase. Adjusted operating profit was 33.9 billion, or a 15% increase. Expenses such as sales promotion activities and R&D progressed as planned in the 2nd quarter.

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Adjusted Operating Profit Variance Analysis (Q2 YTD)

							(100 M JPY)	G/P increment by sales increase:
		Gross								The revenue increased in all companies
									compared with FY20 Q2 YTD impacted by
		margin							COVID-19
			Price
			-20				FX			Gross margin:
			JP NHI	SG&A		R&D			Positive impact of product mix improvement
			-1		MDR	Others				from sales increase of Cardiac & Vascular,
					0					especially of TIS
					IT
			Production
		G/P	0					Price:
		Adjustment
		increment						Decline mainly due to VBP in China for TIS
		by sales								products
		increase								SG&A:
										Large increase compared with FY20 Q2 YTD
										in which expense usage was slow due to
										COVID-19
										FX:
										Positive impact from flow mainly by EUR and
										CNY. Small impact from stock
FY20	FY20					FY21	FY21
Q2 YTD	Q2 YTD					Q2 YTD	Q2 YTD
OP	Adj. OP					Adj. OP	OP
©TERUMO CORPORATION					5 / 24

This is the adjusted operating profit variance analysis compared to the previous year.

Gross profit increment by sales increase was 27.6 billion yen. Increased revenue from the Cardiac and Vascular Company had a large effect, but revenue growth from the other two companies also contributed.

Price declines due to TIS product tenders in China and planned production adjustments were downward factors, but they were absorbed primarily by improved product mix due to increased TIS product sales.

SG&A were higher than the previous year, when activities were affected by COVID-19, but those activities have normalized as planned and are reflected in these SG&A results.

R&D costs and other expenses including those associated with starting the source plasma business are reflected as proceeding according to plan.

FX impact was a positive 4.6 billion yen, primarily due to flows between the euro and Chinese yuan. The impact on stock is minor.

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