Hello, this is Hagimoto, CFO of Terumo. Let me walk you through the highlights of our financial results.

Thank you very much for your participation today. This is the highlights of our financial results for the third quarter of the fiscal year ending March 2026.

The highlights: strong earnings results exceeding guidance. For revenue, the highest ever results both for the quarter and the quarter third quarter year to date.

We had strong sales led by North America with 9% growth, excluding the FX impact. In particular, revenue reached record highs both for the quarter.

In particular, demand growth in North America remained strong, resulting in a year-on-year increase of 9%, excluding FX impact. In regard to profits, operating profit, adjusted operating profit, and profit for the year all reached record highs on a Q3 year-to-date basis.

Although we recorded certain one-time expenses from the first half of the fiscal year, our globally implemented pricing measures and appropriate cost control enabled us to deliver results that exceeded the pace assumed in our 2025 guidance, fiscal 2025 guidance. Please note that starting from this quarter, the consolidated results include the Leverkusen plant and OrganOx, both of which were acquisitions announced earlier this fiscal year.

Next slide, please. Moving on to our P&L performance, revenue reached a record high of ¥831.6 billion on a Q3 year-to-date basis.

The expansion of global demand continued with the Cardiac and Vascular Company and the Blood and Cell Technologies Company serving as the main drivers. Operating profit and adjusted operating profit also achieved growth exceeding that of revenue, reaching record highs of ¥144.9 billion and ¥173.5 billion, respectively.

While the tariff impact began to materialize partway through the second quarter and continued to affect results in third quarter as anticipated, we were able to offset these impacts through ongoing pricing measures and disciplined cost control, resulting in progress that exceeded our performance forecast. On a standalone Q3 basis, the operating profit margin declined.

This was mainly due to the recognition of one-time expenses in the second half of the year as explained during our Q second quarter earnings announcement. Next slide, please.

This is the year-on-year OP variance analysis for Quarter 3. I will explain the Q3 year-to-date results on the next page.

However, there are two major movements to highlight for Q3. The first is the impact of tariffs.

In this chart, the tariff impact is included within gross margin and pricing. As a breakdown of the gross margin effect, the tariff impact amounted to a negative ¥4.2 billion.

At the same time, pricing measures contributed a positive ¥3.5 billion, partially offsetting the negative impact from tariffs. The second point is the recognition of profit and loss from newly acquired businesses.

The Leverkusen plant recorded a loss of ¥1.6 billion, while OrganOx contributed a profit of ¥0.5 billion. Regarding the Leverkusen plant, we will take a disciplined and cautious approach to capital expenditures for production line preparations and proceed step-by-step as the certainty of customer contracts increases.

Next, this slide shows the Quarter 3 year-to-date OP variance analysis. Overall revenue growth, driven by the continued expansion of demand, made a significant contribution.

The GP increment by sales increase was driven primarily by overseas TIS, mainly in North America, as well as global blood solutions, particularly in the plasma business. With regard to the gross margin pricing, pricing measures in the Cardiac and Vascular Company made a significant positive contribution to profit.

However, as the impact of tariffs became more pronounced, this positive effect was partially offset. While the negative effect from tariffs increased in Quarter 3, on a year-to-date basis, the positive effect from pricing more than offset the tariff impact.

SG&A has increased due to business expansion and remained largely in line with our assumptions. R&D expenses decreased slightly year on year.

This was due not only to the impact of impairment losses on capitalized R&D recorded last year, but also to a review of R&D priorities and a disciplined focus on selected themes. Going forward, we will continue to invest in priority areas.

As for foreign exchange, the impact was negative both on a flow and stock basis compared with the previous year. Next slide, please.

I will now explain the performance by company. First, let me start with C&V, the Cardiac and Vascular Company.

Revenue increased 8% on a local currency basis with strong performance continuing globally, particularly in North America. By business segment, growth was driven by TIS and Terumo Neuro, contributing to revenue growth for the company overall.

TIS was primarily driven by North America with solid performance continuing across all product categories. Volume growth contributed more significantly than pricing measures.

In Terumo Neuro, strong growth continued in both China and Japan. The profit margin improved to 26%, supported by various initiatives, including pricing measures, profitability improvement, and a review of unprofitable regions.

However, due to negative impact from foreign exchange on a stock basis, the profit margin for Q3 on a 3-month basis declined year on year. Next slide, please.

TMCS, Medical Care Solutions Company. Growth in pharmaceutical solutions drove both revenue and profit growth for the company overall.

This was led by domestic CDMO business, as well as the strong performance of PLAJEX overseas. On the other hand, revenue declined in the Hospital Care Solutions and Life Care Solutions businesses.

In Hospital Care, revenue decreased due to the impact of a business transfer in Q1 of the previous year, as well as supply issue affecting a product. This supply issue has now been resolved and the business is on a recovery trend.

In addition, pricing measures implemented since April are progressing steadily. With regards to profit, earnings increased, supported by the efficiencies of pricing measures and disciplined cost control.

Regarding the acquisition of the Leverkusen plant announced in May last year, this has been included in our consolidated results starting from Q3. On this page, figures are presented excluding the acquisition impact to illustrate trends in the existing businesses.

Performance including the Leverkusen plant is shown in the bottom right of the slide. As mentioned briefly in the profit variance analysis section, the P&L impact related to this acquisition in Q3 had no impact on revenue, while the impact on profit was negative ¥1.6 billion.

We are currently working on production line startup and production transfer. Since the acquisition was announced, we have received a significant number of inquiries from pharmaceutical companies overseas, particularly in Europe and the United States, and are actually promoting the business to secure new projects.

Next slide, please. Revenue increased significantly driven by strong growth in Plasma Innovations within Global Blood Solutions.

As the rollout of the Rika to existing consumers has already been completed, our focus in the plasma businesses will shift toward acquiring new customers going forward. In addition, our core business constituted to perform well, supported by the successful award of a tender for the Reveos whole blood collection system in Asia during Q3.

The Global Therapy Innovation, revenue increased as demand for cell collection associated with cell and gene therapy expanded, particularly in North America. Profit increased driven by improved profitability resulting from expanded sales of Rika, as well as ongoing disciplined cost control.

We have implemented production adjustment related to Rika from Q3. However, due to efficient operation in production lines, the impact has been smaller than initially anticipated and profit margin has improved.

Looking ahead to the next fiscal year, production adjustment may be implemented as needed, but we expect the impact on P&L to limited. Next slide.

Following the completion of its acquisition as a wholly owned subsidiary on October 29, 2025, OrganOx has been included in our consolidated results starting from this Q3 earnings announcement. Results from November and December are consolidated with Q3 revenue of ¥2.9 billion and adjusted operating profit of ¥0.5 billion.

This illustrate the growth trend, we are also disclosing Q3 year-to-date performance on year-on-year basis. Revenue increased by 50% year on year and the profit margin improved significantly from 13% to 21%.

This was driven by increase in number of liver transplant procedures, as well as expansion of OrganOx consumer base. Looking ahead, the market for organ preservation using normothermic perfusion or NMP is expected to continue expanding.

Next slide, please. In the Americas, demand continued to expand and we achieved double-digit growth on a local currency basis.

All companies delivered strong growth with TIS, Pharmaceutical Solutions, and Global Blood Solutions serving as key drivers and leading global revenue growth. In Europe, TIS and Terumo Neuro continued to deliver stable growth.

In addition, strong performance of PLAJEX product drove a significant increase in revenue in the Pharmaceutical Solutions business. In Japan, the CDMO business performed well with Pharmaceutical Solutions contributing to revenue growth.

With C&V, Terumo Neuro continued to achieve double-digit growth. In China, revenue increased as Terumo Neuro continued to grow, supported by expanded market access resulting from VBP.

In Asia, strong performance of TIS drove revenue growth in C&V. Next slide.

With less than two months remaining until March, the full-year outlook for the fiscal year is now coming into view. What I would like to reiterate is that our business, based on our existing operation, is steadily progressing toward the achievement of GS26 in the next fiscal year, supported by strength of our underlying fundamentals.

In the current fiscal year, we recorded acquisition-related costs and other one-time expenses. The main items of one-time expenses that can be reasonably anticipated at this point are outlined on the page 18 of this presentation.

These initiatives reflect our commitment to improving profitability as we work toward achieving GS26. The structural reform we believe are necessary.

These measures include initiatives to optimize our workforce overseas, which are expected to result in annualized cost saving of approximately ¥3 billion from the next fiscal year. We position all of these costs as strategic investment aimed at supporting future growth.

We continuously review our business portfolio and conduct strategic reviews to drive growth. While the business environment is constantly evolving, we will actively manage these changes to achieve final year of G26.

That concludes my presentation. Thank you very much for your attention.

This is Kotani from Mizuho Shoken. Can you hear me okay?

Yes. On 18, page 18, you were talking about the amortization.

It says ¥2.6 billion and I think at the beginning of the period it was ¥4 billion. If I look at the related costs in Quarter 3, I think you originally said these were supposed to amortize in the first part of the fiscal year.

That amount seems to has been brought ahead to the fourth quarter for the amortization fees, and so it looks to me for next year, I think the goodwill for next year also taken into consideration. I'm just looking at the evaluation of inventory has changed and the goodwill costs seem to be looked over the long period, seem to be slightly down from what was originally planned, but it seems to me that those costs seem to have swelled slightly.

Kotani-san, thank you very much for your question. As your understanding is correct, this is pre-PPA and these amortization costs for the current fiscal year are ¥4 billion and they had been set provisionally, tentatively.

For the final amortization, depreciation expenses, we used an external organization to reevaluate these and the result of that external evaluation was that they are below our initial expectations. It says at the bottom of here the inventory step-up of inventories.

This was when we made the purchase. The costs were reevaluated under the FRS rules.

They've been distributed across the inventory period, there's no impact on cash flow, but on the PL, they have to be recorded so they are ¥4 billion and ¥7 billion for next year. They will not, however, be from

Thank you. In these two years, these hit fees will occur, but after that, there will be very lower goodwill fees.

It will be in the black in term will beginning closer to being in the black in terms of amortization?

Yes. We had expected it to be ¥9 billion, but it was actually ¥65 billion in terms of those amortization fees that came with the purchase of OrganOx, but we expect that to be lower than previously predicted.

Secondly, a final question, I just wanted to ask about the share of Rika, I think probably will be about ¥50 billion of total revenues and I think there are some supply chain issues. If we look at this now, I think it will be about ¥30 billion, ¥40 billion in terms of the portion of revenues.

Is this the effect of deploying Rika later has had some effect, I think? Could you give me this ¥50 billion that you had previously predicted for Rika, why is that late?

Why is that late to come online? Also, I think Mayumi, a competitor's product, is also delayed in deployment.

Could you just let me know on that front?

Thank you. For Rika, the revenues for Rika, we haven't disclosed those at present.

There wasn't any late deployment of Rika. As I explained last time, it has been extremely efficiently utilized and so the is lower than our initial assumption for the portion of net sales.

There's no delay in the deployment of Rika. We are currently improving the product and deploying promotions to acquire customer take-up.

There's nothing particular to add regarding Rika, but it is proceeding on plan steadily. Comparatively, it is not a particularly large-scale customer in question where we are expanding our promotions.

We are looking forward to further developments. This is one of our main growth pillars and the development is proceeding as planned.

Yes. This is Tokumoto speaking.

I hope you can hear me.

Yes, yes, we do.

Thank you. My first question goes back to slide 12 about your projection on and beyond next financial year.

There are some you are also reducing some cost, also saving some labor cost, personal cost. Can you just once again share any project that you are planning to implement for the next financial year?

Passing the prices over to customers. You talked about that will be implemented, but inflation is not going away.

I think can you talk about is this becoming more difficult? You also talk about profit improvements overseas, but can you share any other projects locally or in any other regions that you can share?

Thank you very much for your question. Let me pick up your question about price point and our programs overseas.

My colleague Hagemoto-san, CFO, may jump in if necessary, but let me just start off. First, on pricing point, we are just passing the prices based on the inflation based on our terms in agreement.

We will continue to do that as we've been doing already and go beyond next financial year. We are also getting some impact from customs and we are actually putting surcharge to absorb the impact of the tariffs.

We will continue to work on those pricing initiatives beyond next financial year. You also asked me about the restructuring in overseas.

We have in Q4, P18, slide 18, as it shows on the QA, we are planning to have ¥1 billion in one-time cost for project reductions of errors of the people. This is one-time cost in FY26 and we are expecting the positive impact to continue beyond FY26.

Let me just add one comment. We, within FY25, we are running several different projects and we are also have some positive impacts from pricing initiatives.

We, of course, are managing that. The price programs, I cannot share disclose any specific numbers, but market is going inflation and we are increasing prices based on if not higher than inflation.

We will be passing our prices because we are delivering added values. As a company, we are just looking at having more values added so that we can increase the prices faster than the inflation.

We'll continue to do that. On the other hand, there are kind of reduction of negatives like restructuring projects.

These are the initiatives that we are running for this year, as well as last year, as one-time costs. Our programs in FY26, the very final year of G26, we are making sure there's not going to be negative ripple effect at the end of the year in FY25 and '26.

All those negatives that we needs to deal with, we needs to consume, including the one-time negative cost, we wanted to have them just done it and done it all at once.

Okay. Thank you.

I just want to clarify about restructuring ¥5 billion in overseas. This is some number that we didn't see in Q4, but you just add it as you have made a decisions to implement?

We've been talking all through about necessity to go through the restructuring, but we have more precise numbers, we decided to post it here.

Understood. I think Germany, Leverkusen, you also mentioned about that, but can you just share what kind of approaches you are getting?

There's going to be some time before the production lines go up running, but after negotiation, what it would be the timing in which you will be starting to recognize revenue from that plant? I think that's one of the assessment points for assessing value for your stock, can you talk a little more about the revenue recognition of Leverkusen plant?

We do have signed NDA with them. We are being discussing with multiple different potential customers.

For PS business, as you can see on this slide, in this financial year, we are just admit 20 two-digit growth. This growth is substantially very good and we have getting good reputation for stable supply, reliability.

For revenue, is that going to be profitable?

We would like to share those perspective and deliver those targets in the next mid-term plans.

Okay. Understood.

Thank you very much. That is all.

Yes, can you hear me? This is Yamaguchi from Citigroup.

For Quarter 3, we look at Quarter 3 alone, the gross profit ratio seems slightly down, but the product mix, the tariffs the biggest impact on the product mix or?

Yes. On the right-hand side, are you referring to our gross profit?

OrganOx, the purchase of OrganOx has also had an impact. The weakening yen in Quarter 3 has also had an impact as well.

One this has affected the gross profit rate by 1 point, I believe. The tariffs, I think these three impacts have been impacting the gross profit ratio.

Understood.

Also, sorry, the CFO was just talking about these one-off costs.

For next it says OrganOx, you've already explained that, but apart from other impacts for these one-off costs, in next year, do you think there will be any other significant one-off costs or one-off losses?

Yes, I think your understanding is largely correct. Of course, including the balance sheet, we having made all the necessary investments, we believe that this is what we can expect to harvest.

We do want to improve profitability. Initiatives for improving profitability will be implemented in this period.

For '26, financial 2026, as the final year of GS 26, we hope to end in a clean manner.

That's all from me. Thank you.

I'm Ms. Yoshihara from UBS Securities.

Thank you. Thank you.

I, too, want to ask a question about Rika. In second half, you are planning to do production adjustment, but the impact was not that big if I understood correctly.

Your customers, if we are hearing your customer's comment, market was soft, market share also shifted quite a bit. It seems like that you are also getting some headwinds and production also, you mentioned about production maybe adjusted next year.

I know this will be very difficult for you to make a comment about your customer, but can you share a little more details about this Rika business and how you see it's going to go? Also, you talked about acquisition of new customers and when this business has just started, you are looking into potentially a very big customers who are not your customer back then.

You also talked about approaching to small to mid-size customers. Have something that changed in terms of the target customer base?

Can you talk about that, please?

Thank you very much for your question. CSL or any other competitors may make some comments, but we will refrain from make any comments about what's represented by the competitors.

We are just competing, making some progress so we can compete with CSL. In next financial year, we are not expecting shrinking revenue from the innovations, we are expecting very stable revenue source.

Your question about expansions of customer base, I'm sorry, maybe this was not clear to you in our explanations. Our approach to big potential customers, nothing has changed.

It'll be incremental on top of it to expand our opportunities working with small to medium-sized customers, that's right, on top.

Thank you very much. My second question is not that directly related maybe to your financial performances, but your fundamental, I think, is quite doing well, but you are also having some challenging time over the last one year.

Can you share examples of contentious discussions you may be having within the top management team? If there's none, that's also fine.

Because that could be an option for you to buy back some of your shares back, can you just talk about that as an option?

Thank you for your question. I will refrain from any comment about share buyback in this meeting, but we are not happy with the stock price of today.

That's how we see it also. Including OrganOx, right, we wanted to send a message that people will hopefully be understanding that we are making investment for the better future.

We will continue to run those programs in the future as well. The share prices are decided with many different factors.

There's no single answer, no solution, one bullet to increase the share prices. I think we can maybe send our messages more clearly, loudly so that we get to have a chance to explain why and what we are doing.

This is actually big topic within our top management meeting because we will be performing well. We'll be hitting the target in GS26, but we'll also needs to good job communicating with the people in the marketplace.

Thank you very much.

Hello. This is Morgan Stanley, Hayashi.

Can you hear me okay?

Yes, we can hear you fine.

Thank you very much. My first question is regarding TBCT and I believe that from your data, I have calculated that in the third quarter the net sales apart from FX impact are about 20% up in terms of revenues.

I think with the Rika production adjustment with that in mind in Quarter 3 that has been taken into account, but your production lines is what I'm talking about are able to absorb that negative impact or are able to manage that negative impact, you were saying. I just would like to hear some more details about that, what kind of response, what kind of effect that's had on how are you going to absorb I think that you have already taken into account the production adjustments, but the Leverkusen plant I think revenues could go up possibly.

Could you give me some color on that, please?

Thanks. In terms of net sales versus revenues, first of all, the Rika has contributed significantly to the increase in revenues, but for the other elements, for other products, Toraymyxin, those are also having favorable sales.

Particularly in Asia, we have secured a tender in Asia which has contributed greatly to increase profits, increase revenues. The effect of those increased revenues and the production adjustment in terms of yield and production, I think will bear out positively in operating profit from now.

I think in November, in your explanation in November, you were saying that the quality was too high and on the business side, you were talking more about the business side. I feel that there's a bit of a disparity with what you explained in November.

In November, what were you predicting? This time now, why is the minus lower?

Is it to do with Rika

mainly? Yes, let me add in to that.

You're referring to the consumables for the Rika business. The net sales and the forecasts, if those come down, then the inventory level, I think we don't need to create that beyond need, we would do some production adjustment.

However, of course, for the actual distribution, the accumulation of inventories, that does bring down profits. In terms of activities to increase productivity, then the production cost, we've able to bring that down.

That's why we didn't have such a big minus in our revenues this time.

Right. The net sales for Rika has gone to plan, but any negative impact on the margin has been brought down to a minimum.

Is that correct?

Yes. What fluctuates if we look at the PSI, then to keep the stock at a certain level, we have adjusted production.

Overall, the structural impact has been absorbed as offset by our higher production efficiency and production adjustment.

Thank you. Understood.

Okay. My second question is to do with OrganOx.

I think there are three companies involved in OrganOx. In the third quarter, then the ¥2.9 billion sales, is that in line with your initial predictions, forecasts?

I think for the full year, ¥9 billion is what you were predicting. In Quarter 4, are you on target in terms of the pace for OrganOx's results?

Yes, well, thank you. In November and December, those two months have passed.

Compared to the previous year, it is a very high level of growth on a year-on-year basis. In what we were initially expecting, in Quarter 3, it's gone down compared to our prediction due to a slowdown in available donors, but the demand remains extremely strong for OrganOx.

I think the growth trend is on target and it was a slight depression in Quarter 3 due to a lack of donors.

In Quarter 4, it'll go back to the original trajectory, is that what you're expecting?

Yes, that is our prediction. It will return to the expected trajectory for Quarter 4.

Thank you.

Hi, can you guys hear me?

Yes, we can hear you well.

Perfect. My question is also about OrganOx on slide number 10.

Based on the data on this slide, I calculated that the revenue increased about 46%, but the adjusted operating profit increased about 136%, more than doubled. Did you do any cost improvement over there?

Did you try to reduce any cost in manufacturing, SG&A or R&D-related expenses there?

Thank you very much for your question. This is a result of their sort of OrganOx organic growth, we did not do any specific approaches at this point in time.

This was all activities that was already planned by OrganOx prior to our acquisition. What we do believe is that as we mentioned earlier, OrganOx's business structure is a very highly profitable structure and as the revenue grows, there is room for profit improvement.

What we want to also materialize is that the overall capabilities that Terumo as a group has by combining those kind of skill sets or the manufacturing capabilities of OrganOx, some of the technologies that we have with Terumo, we do hope that we can also accelerate this kind of growth in the profitability.

It is a matter of growing the revenue base and therefore able to cover the fixed cost?

Yes, exactly.

Perfect. My second one very quickly, just want to go back to the CSL, your customer CSL situation, right?

Obviously, we know that they had a lot of changes this week. Are you foreseeing any future impact because of the changes at your largest blood plasma customer in the US?

Obviously, we cannot comment on CSL's specific situation, but from our point of view, we do believe that the demand for Rika and the disposables, that sort of a revenue stream is not significantly impacted. Our understanding is that we will continue to provide the Rika disposables to CSL.

There may be some discussions about the volume in the future, but at this point in time, we do not see a significant changes in our projections.

Very well. Thank you very much.

This is Mori from Nomura Shoken, Nomura Securities. Can you hear me?

Thank you very much. There's two questions I'd like to confirm.

First is regarding the Rika. The profitability of this compared and the growth trajectory, I would like to know whether that'll change or not.

There is no change to our projections and our initial projections have not been changed for Rika's growth trajectory.

Secondly, in your explanation, you talked about achieving GS26. You made several references to that.

What items need to be achieved for GS20 to be GS26 to be achieved? What are the criteria for achievement in order to fulfill GS26?

Thank you very much for the question. We have our financial objectives, three financial objectives.

These are since these were announced in December 2021, which were to get double-digit growth for revenues in the late top double digits. Secondly, will be the profitability rate, 20% of operating profit ratio of which and the third is ROIC, 10% ROIC.

That is the excluding the impact of M&A, but I think for ROIC of 10%, we want to achieve that as another key pillar. It's not that if one of those is okay, all three of these financial objectives needs to be achieved for us to deem that GS26 has been achieved.

Right. Within segments and the profits within each separate segment, if you want to GS26 needs to be achieved across segments, is that correct?

Yes, depending on the business segment, then there are some variations, but we have a all-company financial targets as a overall which need to be achieved for us to declare GS26 to be achieved.

Sorry about that. My name is Saito from JPMorgan Securities.

I hope you can hear me.

Yes, I do.

Thank you. Sorry about that.

Just wanted to talk about the slide you analyze the operating profit ups and downs. I wanted to ask some detailed questions.

The price and the expected price, revenue, you talked about custom tariffs and prices in details. The other things, the other include the impact from inflation that you discussed back in Q2, you talked about some COGS impact, negative impact because of inflation.

I would say majority of the impact was coming from M&A transaction. Just wanted to see if there are all those details included in this analysis.

Thank you for the question. Depreciation, COGS on depreciation and M&A is adjusted values.

That's 550 ¥591 and 40 ¥139 actually includes M&A adjustment. That's not count that in that 103, which is about the impact from revenue increase.

Revenue increase is also getting impact on tariffs, inflation, product mix are all encompassed within that 103.

Thank you. You also mentioned about product mix.

Is there any specific business that you saw quite a big change in product mix, especially for Life Care and Pharmaceutical Solutions? The factories are using you are using Japanese factories, the margin structure so change or not change?

Can you just add a little more comment about those?

On your question about Life Care, there's not much of the big change on profitability structure. For Pharmaceutical, the revenue is growing and as it goes up, we can just absorb fixed costs as a leverage.

That would be the part in which we are seeing the positive impact. The other this might be way too much in details, but on the plasma business is expected to grow, then the revenue, if you look at 103, the impact will counted on driving that 103 up higher.

If you look at the business structure as a whole, that mix impact will be negative. There's that kind of structural details.

Thank you very much. That is all from me.

Thank you.