Olympus Corp Ord

Hello, everyone. I am Takeuchi, Representative Executive Officer. I'd like to thank you all for participating in this conference. There were numerous challenges in FY 2025, including supply chain disruptions due to the Noto Peninsula earthquake, a difficult business environment in China, and unexpected departure of our former CEOs. Despite these headwinds, our business performance remained solid, driven by strong sales of Avis X1 GI endoscopy system in North America throughout the year. Revenue achieved close to the forecast announced in February. Adjusted operating profit was 188.5 billion yen, and adjusted operating margin was 18.9%, both exceeding the forecasts. Our quality and regulatory transformation project, Elevate, is continuing to progress well to meet our commitments to the U.S. FDA. We expect to complete all commitments to the FDA by the end of fiscal year 2026. Our three strategic guiding principles of patient safety and sustainability, innovation for growth, and productivity presented in our company strategy are progressing steadily. We made great progress with Elevate, building a solid foundation and further strengthening our corporate culture to achieve quality management that truly prioritizes patient safety. For FY2026, revenue is expected to grow steadily by 4% after FX adjustment. Adjusted OP is expected to be 175 billion yen with an adjusted operating margin of 17.5%. This is due to strategic investments to strengthen our organizational structure for future sustainable growth and improved profitability. The impact of U.S. tariff policy is not included in our forecast due to the fluidity of the situation. we will continue to take measures to mitigate the impact while prioritizing the continuous provision of our products and services to the medical field. As for FY2026 dividend, we plan to pay 30 yen per share up 10 yen from the previous year. As a result of our transformation over the past few years, we have become a pure medtech player. Stable cash generation is expected. In light of this, we have decided to significantly increase the dividend level. We have also decided to undertake a share buyback of 50 billion yen. Finally, I am pleased to name Bob White, our new representative executive officer, president and CEO, effective June 1st. In addition, Bob is a candidate for our VOD at Olympus General Meeting of Shareholders, scheduled to be held in June this year. I am confident that Bob's wealth of experience, exceptional leadership, and deep expertise in the medtech industry will help Olympus unlock its potential to cultivate innovation and drive further growth, benefiting, rather befitting, a global leader in the industry. Next, I will discuss the key strategies for each business segment for FY26. As explained at Q3 earnings goal, from April, we aligned our divisional structure to be more efficient and patient and customer-centric. As part of this evolution, the ESD and TSD transitioned into the new divisions of the Gastrointestinal Solutions Division, GSGIS, and the Surgical and Intervention Solutions Division, SIS. We will continue to invest mainly in three focus areas, GI, urology, and respiratory. First, in GIS, we are focusing on accelerating global market penetration and revenue growth with EVIS-X1 GI endoscopy, as well as expanding intelligent endoscopy ecosystem with Odisense, our new sub-brand for our primary cloud-based integrated suite of endoscopic applications and solutions. In GI endoscopy as part of Phase 2 of the EV6-1 US launch, we plan to launch a flagship monoscopes of the EV6-1 GI endoscopy equipped with EDOF, technology in FY2026. But we work to shorten the lead time with the aim of bringing them to market as soon as possible. In emerging markets, we promote initiatives to expand the market share sustainably, while in China, we accelerate preparation for local production of GI endoscopy. We also drive the expansion of endoscopic ultrasound platform market. Additionally, we plan to launch the first CAD AI products of all these scents in Europe and U.S. I will provide details later. In GI endotherapy, we continue to expand clinically differentiated product offerings in key areas of focus, ERCP, ESD, metal stent, and hemostasis devices. We aim to launch more than 10 new products regionally, including key markets of U.S., Europe, and Japan. In medical service, we are committed to delivering industry-leading services that meet customer needs in areas such as uptime, budget security, and operational support.

As noted earlier, expanding our intelligence in that scope ecosystem with the ODI system platform is a key pillar of our GIS strategy. Let me walk you through what we focus on in the fiscal year 2026. The first analysis in the portfolio to launch will be CAD-AI software applications designed to detect, characterize, and analyze lesions in the upper and lower GI tracts, following the MIX 2025 CAD-E guidelines and recommendations from the ESG-E. AGA, and BMJ, we are confident in our unique approach. Our AI-powered cloud-based design allows us to frequently improve the performance of our algorithms and continuously add new capabilities of the gastroenterologists that AI police Detection algorithm of the CAD-DE was trained on the sessile serrated lesions, SSLS, and the larger polyps that are open-missed and more likely to progress to cancer. Initial trial data shows Olicense-assisted colonoscopies significantly improved that detection of the the clinically relevant lesions without increasing unnecessary resections. Currently, the Olisense Hub and the CAD AI products are being piloted in the selected U.S. and EU hospitals. They're receiving positive feedback at DDW and ESGE days. So I don't know that from the relevant events there. We anticipate the strong long-term potential enhancing the customer engagement and recalling revenues and in the market share that the phase of the rollout of all the sensors in the CAD AI begins and that the second half of fiscal year 2026 with subscription model. Next, the SIS developed endoscope the laparoscopy, the basic ecosystem for the procedures in the urology, respiratory, and surgery. To build the leading ecosystems, we will actively manage our portfolio and scale major innovations into our core markets. In urology, we expand the leadership in the BAPH through the eye-tying market development while increasing the penetration of the core visualization and plasma technologies. I would like to introduce that the solutive superposed laser system for urinary tract store management, which drives that laser to clip C, the growth, and the next slide. In respiratory, we continue to focus on the driving adoption of EBIS-X1, the bronchial Coscopy, the platform and the drug growth and the lung cancer diagnosis and the staging with the stronger emphasis around the updated EBUS-TDNAF ring. In surgical endoscopy, we aim to introduce the Viscera N83 surgical endoscopy system in the U.S. and China to improve market competitiveness. Among them, And today I would like to highlight the two products that we expect to be growth drivers for this fiscal year, along with the target diseases that we are focusing on. First, urinary stones are a condition in which the substances contained in the urine crystallize over some reason and coalesce in the form of a stone. And the prevalence of this condition has been rising in recent years with an estimated 40% of the patients experiencing the recurrence within five years. For that treatment of the urinary stones, we have a compelling and market-leading portfolio of solutions. Olympus has a fast company to launch now the new saline fiber lasers for the laser trippancy, and we command that top market share in this category for both the laser systems as well as the applications. that's consumable fiber. The selective super positive laser system is already available in the U.S. and Europe and in APEC and achieved double-digit growth in these regions during fiscal year 2025. We plan to launch the system in Japan and expect it to contribute further to our sales. Next, lung cancer. This is the disease with an estimated more than 4 million patients and the highest mortality rate among all cancers worldwide. When detected at an early stage, lung cancer is highly treatable by surgery. Our market-leading endobronchial ultrasound scopus contributed to and decided that treatment policy by supporting the diagnosis of lung cancer type and staging in combination with other diagnosis results. Our new, the SLIM-EBUS scopes extended this capability to the peripheral regions of the lung, supporting visualization and real-time sampling of lymph node and lesion. We aim to launch the scopes in Europe, APEC, and Oceania, and in Japan in this fiscal year. And finally, I would like to briefly introduce our new CEO, Mr. Bob White. So that's in the magnetic industry, and Mr. Bob White has been, and also for the globally and for the regionally, have that very good experience and expertise. And Mr. Bob White, until April 24th, has been, worked as the executive vice president and the president of medical surgical portfolio for Medtronic. And before then, she was a senior vice president and president of Medtronic Asia Pacific based in Singapore, where he had a responsibility for APEC as well as Japan. So that's why he has experience in Asia. And his proven track record spans large, the multinational organizations, as well as the entrepreneurial ventures in which he consistently delivered exceptional results. And Mr. White has seen the numerous innovation programs set, and also for that, and revitalizing Medtronic's respiratory and monitoring portfolios, advancing his GA portfolio, and spearheading his robotics program and led to several R&D initiatives and M&A transactions. to drive strategic growth and the value creation. His close engagement with the market and the customers enabled him to maintain a strong understanding of the physician needs. Planned to join Medtronic, Bob held leadership positions at the GE Healthcare and Merge Healthcare and the Healthcare Division at IBM. Throughout his career and in the Medtech industry, he has played a pivotal role in improving the lives of patients around the world through their transformation of healthcare delivery. I'm truly pleased that he is bringing his extensive industry knowledge and insights to Olympus with him. We aim to achieve sustainable growth and enhance the corporate value by continuing to deliver innovative medical value that only we can provide. Okay. Okay. With that introduction, I would like to hand it over to CFO, Mr. Andy Izumi, and he will lead you through our detailed financials for fiscal year 2025.

Hello, everyone. I am Izumi, CFO. I would like to provide a consolidated financial results and business review for FY 2025. FY 2025 faced some challenges due to the external environment and others, but compared to the February forecasts, Although the yen appreciated, the revenue achieved roughly the forecast level, and both operating profit and adjusted operating profit exceeded the forecasts. Consolidated revenue increased by 8% year-on-year to 997.3 billion yen, with weaker yen serving as a tailwind. Revenue reached a record high for both the single quarter and the full year. The revenue growth was driven by North America, which achieved double-digit growth in all three focus areas, GI, urology, and respiratory, led by sales of the EVX1 GI endoscopy system. On the other hand, in China, competitive involvement has intensified due to the Buy China policy and others, resulting in the tough results for the full year. But Q4, we achieved a growth of 12% year-on-year. The business environment remains uncertain, but we will continue to closely monitor the situation and accelerate preparation for the local production in China. Operating profit increased year-on-year to 162.5 billion yen due to the decrease in losses related to Verum medical technologies, which were recorded in the previous fiscal year and the tailwind from FX. Assisted OP increased by 25% year-on-year to 188.5 billion yen. with an adjusted operating margin improving 2.6 points to 18.9%. Profit attributable to owners of the parent was 117.9 billion yen due to stable earning space with EPS of 103 yen. We plan to issue an year-end dividend for FY25 of 20 yen per share up to 2 yen year-on-year. unchanged from the forecast previously announced. Now let me look at each segment. First is the ESD. Revenue grew 8% year-on-year. Adjusted OP, excluding other income and expenses, increased year-on-year to 158.8 billion yen, with an adjusted operating margin of 25%, an improvement from the last fiscal year. Now looking at each sub-segment in GI endoscopy, Cells in North America grew 27% led by strong cells of EVIS-X1 GI endoscopy system. On the other hand, cells declined in China with its competitive environment intensifying due to the impact of by China policy and others. In surgical endoscopy, cells decreased in China while they increased in North America and APAC. Growth was driven by strong performance primarily in North America led by new products associated with OR system integration. In medical service, we saw steady growth across all regions, especially in Europe and North America, due to stable revenue streams based on service contracts, including the manufacturing maintenance service, rather, and increase in new accounts. Next, in therapeutic solutions division, revenue grew 7% year-on-year. AOP, excluding other income and expenses, increased year-on-year to 69.8 billion, with an adjusted ovary margin of 19.3%, an improvement similar to ESD. Moving on to the performance for each sub-segment, all three focus areas, GI, endotherapy, urology, and respiratory, grew primarily in North America and Europe. In GI, endotherapy, cells increased in HPV-related products and others. In urology, the growth was led by resection electrodes for BPH treatments and SOTIV, a super pulse laser system for urinary tract cell management. In respiratory, we saw strong performance in the EVAS scopes. Therapeutic devices mainly used for EVAS TBNA. Next is balance sheet at the end of March 25. Total assets decreased 101.4 billion yen from the end of previous fiscal year. The main reason for this was a decrease in cash and cash equivalents due to the share buyback and repayment of debts. Equity decreased slightly due to share buyback and dividend payouts, while an increase in profit was posted as a positive factor. The equity ratio rose to 52.5%, up 3.1 points from the end of the previous fiscal year.