OCPNF - Olympus Corporation (OLYMY) Q4 2024 Earnings Call Transcript

2024-05-10 22:31:04 ET

Olympus Corporation (OLYMY)

Q4 2024 Earnings Call Transcript

May 10, 2024 02:00 AM ET

Company Participants

Stefan Kaufmann - President & Chief Executive Officer

Tatsuya Izumi - Chief Financial Officer

Frank Drewalowski - Executive Officer and Endoscopic Solutions Division Head

Boris Shkolnik - Executive Officer and Chief Quality Officer

Takaaki Sakurai - Vice President, Investor Relations

Seiji Kuramoto - Executive Officer and Therapeutic Solutions Division Head

Presentation

Stefan Kaufmann

Hello everyone. I am Stefan Kaufmann, CEO of Olympus Corporation. I would like to thank you all for participating in this conference. Fiscal year 2024 provided us with numerous challenges. In this environment, our organization and people have proven to be resilient, our business model to be robust and our relationship with our customers to be stable. For fiscal year 2025, we are confident that we will see a strong recovery, bolstered by the significant potential of our strong business model and our grown self confidence to overcome obstacles. Our purpose and refreshed core values, the three strategic guiding principles of patient safety and sustainability, innovation for growth, and productivity, and the four value pools, build the foundation and define the direction for sustainable growth in the future.

As introduced in our company strategy and in relation to our first priority, Patient Safety and Sustainability, we are implementing numerous initiatives to strengthen our QA/RA system, processes and capabilities over three years from fiscal year 2024 to fiscal year 2026. So far, we have made great progress. To give you a few tangible examples: In fiscal year 2024, we undertook several initiatives to improve our ability to perform Root Cause Analysis, which is central to our efforts to create the most effective Corrective and Preventive Actions. We have also improved our complaint-handling effectiveness, resulting in more consistent Medical Device Reporting and even quicker responses to patient safety signals. Also, our regulatory compliance functions have enhanced their operational impact significantly. The Elevate program will help to unleash Olympus’ full potential, improving our sustainability and creating a strong backbone for future innovations

We have successfully put in place stepping stones for future growth. A solid pipeline of growth drivers in our defined clinical focus areas is in place and we are leveraging our value pools. With those and our proven business model, we anticipate a strong recovery and more stable operations overall in fiscal year 2025. We identified strong opportunities across our value pools. With its release in the US, our flagship EVIS X1 sees a very high demand. In addition, our broader GI portfolio shows significant growth momentum in North America. The emerging markets show relevant growth opportunities and high future demand. Also, our pipeline also features relevant care pathway extensions. For example, we are very proud of the recent clearance for our first single-use ureteroscope RenaFlex, and there is more to come. We are excited that our Intelligent Endoscopy Ecosystem should start to see its first releases in Europe in the second half.

Let’s now have a look at those value pools in more detail. Since the introduction of EVIS X1 in the US last October, our GI Endoscopy business gained strong momentum and grew 20% year-over-year in North America, after FX adjustment. The latest order situation is very favorable, and we expect high growth in fiscal year 2025. As you might be aware, the North American market accounts for about 35% of our total sales in the GI Endoscopy segment. Also our GI EndoTherapy business has been a strong performer. North America accounts for about 25% of our total sales in this segment and has been growing at a double-digit year-on-year rate for the last two years. We had strong growth from all three core clinical areas: colorectal cancer detection, colorectal cancer treatment, and HPB diseases. The colonoscope distal end attachment ENDOCUFF VISION, and the hemostasis powder EndoClot are two of our uniquely differentiated products that are high growth drivers, especially in the US. ESD knives and ERCP devices, such as Multi-3V plus extraction balloons, show repeated double-digit growth. We will continue to focus on these business areas and capture further global expansion opportunities. ...

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