OLBA HEALTHCARE HOLDINGS, INC.

Business Details

The medical equipment sales business is operated by six companies: Kawanishi Co., Ltd., Sansei Iki Co., Ltd., Nikko Medical Instruments Co., Ltd., Kawanishi Barkmed Co., Ltd., Olseed Co., Ltd., and THAI OLBA Healthcare Co., Ltd. Its main customers are medical institutions such as hospitals and clinics, and it handles a wide range of surgery-related consumables, orthopedic consumables, cardiovascular consumables, and equipment and fixtures. Consumables account for approximately 87.1% of sales (cumulative for the current 3rd quarter), forming a stable revenue base. The company is strengthening its sales base with a focus on the Kansai region, and is also pursuing new technology areas such as robotic surgery and arrhythmia treatment.

Recent Overview

Consumables were solid, up 3.7%, but operating income fell 7.6% due to difficulty passing on procurement cost increases and rising SG&A expenses.

For the cumulative 9-month period of FY2026 (ending March 2026) (July 2025 to March 2026), net sales of the Medical Equipment and Materials Business were ¥90,480 million (up 3.5% year on year). Consumables were solid at ¥80,048 million (up 3.7% year on year), driven by orthopedics (up 6.1% year on year) and cardiovascular (up 4.7% year on year). On the other hand, gross profit growth was sluggish as increases in consumables procurement prices could not be fully passed on to selling prices, and SG&A expenses exceeded the previous year due to wage increases, staff reinforcement, and investment in the OLBA-DX system, resulting in operating income of ¥1,064 million (down 7.6% year on year).

Key Products

Growth Drivers

• Expansion of orthopedic consumables: Increased demand for artificial joint products (up 5.2% year on year) and spine-related products (up 11.9% year on year) driven by full-scale operation of facilities acquired in the previous period and the spread of robotic surgery
• Expansion of cardiovascular consumables: Active acquisition of facilities in new technology areas such as catheter ablation-related products (up 7.4% year on year) and arrhythmia-related implants (up 9.9% year on year)
• Strengthening the sales base in the Kansai region: Elevating Kawanishi Co., Ltd.'s Kobe Sales Office to a Kansai Branch to accelerate customer acquisition in the priority area
• Overseas expansion based on VISION2030: Advancing the establishment of a business foundation in Thailand through THAI OLBA Healthcare Co., Ltd.
• Cultivating new businesses: Expanding contracts for the clinic-oriented automated payment machine "Temasack®" and building the market expansion foundation for "OLSTECH®" through Olseed Co., Ltd.
• Expectations of an improved management environment for medical institutions due to the significant increase in the base portion of the April 2026 fee schedule revision

Risks

• Difficulty passing on rising procurement costs: Continued global inflation-driven increases in medical equipment procurement prices have been difficult to fully pass on to selling prices, pressuring gross margin
• Restrained capital investment by medical institutions: Amid labor shortages and inflation, medical institutions continue to take a cautious stance toward capital investment, with equipment and fixtures sales down 0.5% year on year
• Increase in SG&A expenses: Continued increases in human capital and IT investment, including wage increases, staff reinforcement, and investment in the OLBA-DX system, are pressuring profits
• Fee schedule revision risk: Revisions to medical treatment fees and reimbursement prices could directly affect product demand
• Sales concentration on major customers: High dependence on specific customers poses a risk that changes in transaction terms could affect performance