TERUMO CORPORATION

The Terumo Group, which handles medical devices and pharmaceuticals, is subject to pharmaceutical regulations and quality standards in Japan, the United States, Europe, and other countries around the world. If regulatory changes occur or approval acquisition is delayed or denied, this could lead to suspension of product sales or delays in market launch. The company continuously monitors regulatory trends in each country and maintains response systems based on its Group Risk Management Regulations.

If quality defects or safety issues occur in medical devices, product recalls or sales suspensions may become necessary, resulting not only in financial losses but also significant impact on the corporate brand. Since these are products used in medical settings, there is also a risk of health damage to patients, which could develop into litigation and liability claims. The company seeks to reduce risk through strengthening its quality control system and continuous product monitoring activities.

The Terumo Group generates more than half of its net sales in overseas markets, with numerous transactions denominated in foreign currencies including the US dollar and euro. During periods of yen appreciation, the yen-converted value of overseas sales decreases, directly and adversely affecting consolidated business results. The company utilizes financial measures such as hedging transactions while also pursuing natural hedging through the promotion of local production and local procurement.

In the medical device market, competition is intensifying with major Western manufacturers and companies from emerging countries, creating a risk that market share could be eroded through price competition and accelerating technological innovation. In particular, the launch of new products or price reductions by competitors in flagship product categories could affect Terumo's profitability. The company aims to maintain and strengthen its competitiveness through continuous R&D investment and product differentiation strategies.

In the medical device industry, the pace of technological innovation, including digital health, robotics, and AI utilization, is rapid, creating a risk that existing products and technologies could become obsolete in a short period of time. If the company falls behind in responding to new technologies, this could lead to loss of competitive advantage and missed market opportunities. The company seeks to improve its technological capabilities through strengthening its R&D system and open innovation.

If confidential data such as customer information, technical information, and personal information is leaked due to cyberattacks or unauthorized access, this could disrupt business continuity and result in legal liability or loss of credibility. Cyberattacks on software embedded in medical devices also pose risks directly linked to patient safety. The company continuously strengthens its IT security measures and conducts employee training.

The Terumo Group actively pursues M&A and strategic investments to expand its business, but there is a risk that failure of the post-acquisition integration process (PMI) or failure to realize expected synergies could lead to impairment of goodwill and increased financial burden. There is also a possibility that potential legal risks or off-balance-sheet liabilities of acquired companies could become apparent. The company manages this risk through thorough due diligence and the establishment of PMI systems.

In the procurement of raw materials and components necessary for manufacturing medical devices, if supply shortages, price surges, or dependence on specific suppliers occur, this could result in stagnation of production activities and increased costs. Supply chain disruptions due to geopolitical risks or natural disasters could also affect business continuity. The company seeks to strengthen its supply chain through building a multi-vendor procurement system and optimizing inventory management.

There is a risk that medical device sales prices could be reduced due to healthcare cost containment policies and revisions to medical fee schedules and drug prices by governments in Japan and other countries. In particular, in the Japanese market, periodic reviews of insurance reimbursement prices are conducted, placing continuous downward pressure on profitability. The company aims to maintain profitability through cost reduction efforts and a shift toward high-value-added products.

For the Terumo Group, which operates globally, securing and retaining R&D personnel with advanced expertise and global talent is an important management issue. If competition in the labor market intensifies due to the declining birthrate and aging population, or if excellent talent leaves the company, this could lead to a decline in technological capabilities and competitiveness. The company seeks to secure and retain talent through enhancing talent development programs and improving working conditions.