OLYMPUS CORPORATION

Business Details

Consists of three areas: Gastrointestinal Endoscopy, Gastrointestinal Devices, and Medical Services. Its primary customers are medical institutions in Japan and overseas, with deployment centered on the EVIS X1 Gastrointestinal Endoscopy System across North America, Europe, Asia, and Oceania. Of the FY2026 (ending March 2026) consolidated net sales of ¥1,010,676 million, this segment accounted for ¥697,359 million (approximately 69.0%), serving as the Group's core revenue base. The segment was renamed from the former "Endoscopic Solutions Business" following the organizational restructuring in April 2025.

Recent Overview

Despite increased sales, one-time costs, tariffs, and the Swan investment combined to reduce operating profit by 20.5% year on year

Net sales for FY2026 (ending March 2026) increased 3.5% year on year to ¥697,359 million. Europe, Asia, and Oceania performed steadily, and North America also achieved double-digit growth in the fourth quarter, while China remained sluggish due to intensifying competition and domestic preference policies. Operating profit declined significantly by 20.5% year on year to ¥136,359 million. Main causes included cost ratio deterioration due to the impact of U.S. tariffs and worsening sales mix, approximately ¥44 million in expenses associated with the Swan EndoSurgical investment, approximately ¥141 million in expenses related to global workforce optimization measures, and an approximately ¥34 million increase in impairment losses on development assets. Excluding foreign exchange effects, net sales increased 2.1% year on year, while operating profit decreased 21.4% year on year.

Key Products

Growth Drivers

• Continued steady demand for gastrointestinal endoscopy in Europe, Asia, and Oceania (strong performance in multiple countries including the UK)
• Double-digit fourth-quarter growth in North America driven by sales promotion effects of EDOF technology-equipped scopes and EU-ME3
• Contribution from new products in the Gastrointestinal Devices field (such as GORE VIABIL Biliary Endoprosthesis)
• Steady performance of ERCP-related products across all regions
• Expansion of recurring revenue in the Medical Services field, led by Europe
• Room for margin improvement from the gradual decrease in one-time costs related to the Elevate quality assurance project (a decrease of approximately ¥58 million in the current period)
• Creation of future growth opportunities through strategic investment in endoluminal robotics via Swan EndoSurgical
• FY2027 (ending March 2027) forecast: expansion of net sales to ¥1,055,000 million to ¥1,076,000 million, driven by sustained growth in the Gastrointestinal Endoscopy Solutions Business

Risks

• Continued sales pressure in the Chinese market due to intensifying competition and domestic preference policies
• Deterioration of cost of sales ratio due to the impact of U.S. tariffs (current period cost of sales ratio of 35.3%, a 3.8 percentage point deterioration year on year)
• Burden of additional investment in Swan EndoSurgical (Endoluminal Robotics Joint Venture) (up to USD 206 million for the Company's portion)
• Remaining one-time costs related to the Elevate quality assurance and regulatory compliance project (¥10,781 million recorded in the current period)
• Continued response to the warning letter received from the FDA and costs of addressing findings from FDA inspections of eight sites in the second half of 2025
• Risk to product supply from the FDA import alert (announced June 24, 2025) concerning certain medical devices manufactured by Aizu Olympus
• Recording of expenses associated with global workforce optimization measures (approximately ¥141 million in the Gastrointestinal Endoscopy Solutions Business in the current period)
• Downward pressure on profit margins from increased impairment losses on development assets (¥5,179 million in the current period versus ¥1,704 million in the prior period)
• Loss of sales opportunities due to suspension of shipment of certain products
• Continued budget constraints among hospitals in the Japanese market