Let me introduce today's presenters, Shoji Miyazaki, President and CEO, and Frederick Reidenbach, CFO. After their presentations, we will have time for questions and answers. Now, Miyazaki-san, floor is yours.
Good afternoon. This is Miyazaki, President and CEO. Today, together with Frederick Reidenbach, CFO, I'd like to present our second quarter financial results for fiscal year ending March 31, 2024, and the forecast. This is what we will be covering today. Despite the positive impact of foreign exchange rates, revenue year to date declined 2.2% year-on-year to JPY 166.8 billion, due to lower sales of BGM, lower revenue of PCR testing, and lower special demand for ultra-low temperature freezers.
Operating profit was down 60.3% year-on-year to JPY 4.2 billion, despite a one-time gain of JPY 2.7 billion from the sale of shares in affiliate Lunaphore, due to the impact of a lower revenue in the higher margin BGM and PCR testing businesses, structural reform expenses Diabetes Management, increased investment in the CGM Business, and JPY 2.1 billion impairment loss at Epredia. So, the foreign exchange rate assumptions have been revised for our yen depreciation. We maintain our initial revenue forecast at JPY 355.5 billion.
Although we expect a favorable impact from the revision of FX assumptions and an increase in revenue from the completion of the acquisition of the electronic medical record and receipt-related business of Fujifilm Healthcare Systems, we have left the full year forecast unchanged, because we expect some downside risks in each business in the second half of the fiscal year. Specifically, we have factored in the impact of market contraction in the BGM business, the risk of lower than expected CGM business, and the impact of the deteriorating market environment in the diagnostic life sciences. Operating profit is projected at JPY 27.1 billion.
After factoring in the results of the first half of the fiscal year, the favorable impact of FX, the realization of structural reform FX Diabetes Management, and improved margins in the Diagnostic and Life Sciences, are expected to offset the impact of the decline in revenue. Cash-based profit is maintained at JPY 23.4 billion. The forecast remains unchanged due to the tax adjustments and other factors, although foreign exchange difference up to the first half of the fiscal year and future increases in interest expenses will be factored in. Accordingly, we maintain an annual dividend forecast of JPY 72 per share. The details of the figures will be explained later by the CFO.
This slide is the same one presented at the announcement of financial results in May, in which I explained that we positioned fiscal year 2023 as a turning point for growth for the company by firmly promoting growth measures in each businesses for further growth in fiscal year 2024 and beyond. I will give an update on each of the measures today. This slide explains the measures of BGM and CGM Diabetes Management. first, let me talk about BGM. Our policy for this fiscal year is to maintain profitability by strengthening sales in emerging countries, while implementing organizational streamlining to cope with shrinking markets and deteriorating margins. As for the progress to date, we have increased sales in emerging countries, but were affected by price declines, mainly in developed countries and market contractions, mainly in Europe.
We continue to streamline our organization in response to market contraction in the second quarter, following the first quarter, and recorded one-time expenses totaling approximately JPY 3 billion in the first half of the year. In addition, there are some regions where revenue have declined more than expected in the process of structural reforms, and we will consider individual measures to leverage these areas in the second half of the year and beyond. Next, I would like to discuss CGM measures. We continue to implement measures to increase the number of users and expand sales. As for progress in the second quarter, although the number of users is increasing, growth from the beginning of this fiscal year has been below expectations.
For this reason, we plan to further strengthen sales and marketing in the second half of the fiscal year, and have launched a new CGM for real-life campaign in the U.S. in October. Regarding the CGM product pipeline, Senseonics also announced that it completed a safety and accuracy evaluation study for iCGM, and submitted the application to the FDA in August, and that it completed the enhanced clinical trial for the 365-day sensor for adults in September. This slide shows the details of the CGM campaign that started in October. We will use this campaign to increase the number of leads, prospective customer information through digital advertising, SNS, and other means. Next, I will explain the goodwill impairment loss recorded and the progress in improving Epredia's profitability.
In the second quarter of this fiscal year, we recorded a goodwill impairment loss of JPY 2.1 billion at Epredia. Although we have been seeing a certain degree of business performance improvement through price increases, cost reductions, et cetera, taking into consideration the divergence between performance and the business plan, the rise in the risk-free rate, which is a basis for calculating the discount rate used in impairment testing and other factors, we judged that, there were signs of impairment and conducted an impairment test, and as a result, an impairment loss was recognized. The following slides illustrate Epredia's efforts to improve profitability.
In fiscal year 2023, we will continue to improve our profitability while capturing growth in existing markets and digital pathology. In the first quarter of this fiscal year, we saw sales growth in core products sales compared to the same period last year, when there was a lockdown impact in China due to aggressive sales activities and improved supply chain issues. But in the second quarter, sales declined 4% year-on-year in U.S. dollar terms, mainly due to the impact of restrained buying of the economic downturn in the U.S. As a result, sales for the first half of the year increased only about 5% from the same period of the previous year. The company has been streamlining its organizations since the end of the second quarter, and we'll continue to review transportation methods and reduce costs through multiple purchasing.
As for Digital Pathology, sales increased approximately 15% year-on-year in the first half of the fiscal year. We are continuing to strengthen sales by launching a new digital scanner, P480, both in Japan and overseas. Next, I'd like to explain our acquisition of the electronic medical record and receipt-related business from Fujifilm Healthcare Systems Corporation, and the growth of the business after the acquisition. We agreed to acquire this business in March of this year, and completed the acquisition procedures in October. We changed the company name to Wemex Healthcare Systems, and developed electronic medical record, receipt-related business as a subsidiary of Wemex, providing development, sales, and maintenance services of electronic medical record and medical receipt, and electronic drug history systems for medical insurance pharmacies and dentists in Japan.
This acquisition will add 16,000 users to the existing user base of approximately 40,000, bringing the company's customer base to approximately 56,000, and will increase our market share to over 30% for both clinics and pharmacies. In terms of business performance, we expect it to contribute approximately JPY 5 billion in revenue in the second half of the current fiscal year. Going forward, we will expand our existing business and provide services that respond to medical DX. Especially, we will strengthen and expand our existing product business by integrating our development know-how, strengthening our product lineup, and creating synergies, enhancing our ability to respond to healthcare policies, and developing new products and creating new services. Furthermore, we will accelerate our growth strategy in the digital health solutions area by multiplying our expanded customer base with expansion of the peripheral services through API collaboration.
In this slide, I'd like to explain about our Diagnostics Business and Drug Development Business, which were reorganized on November 1st, as part of our efforts to strengthen the growth areas defined in our midterm business plan. This business reorganization was announced in June this year, and aims to strengthen the Diagnostics Business in the personalized testing and Diagnostic Solutions, and the Drug Discovery Support Business in the advanced therapeutic development solutions in the growth areas of the midterm management plan by fostering synergies. In IVD, PHC, and LSI Medience, we will strengthen their technological development capabilities and foster synergies by leveraging manufacturing capabilities. Then, by bringing together the strengths of both organizations, we will provide solutions to meet the unmet needs of our customers.
Next, in Drug Development, the integration will allow us to pursue significant business opportunities, such as responding to global drug discovery development needs and the development of advanced therapies, while also strengthening our analytical technology capabilities in diversified modalities. Next, I'd like to explain the progress of major measures to achieve the goals of our midterm business plan. First, Diabetes Management, we have agreed to a business alliance with Cyfuse in the field of regenerative and cell medicine. We will promote a joint development with a view to commercialization. In addition, we launched GROWJECTOR Duo, a motorized injector exclusively for GROWJECT, a human growth hormone preparation co-developed with JCR Pharmaceuticals. This product, with its simple appearance and a pen-like ease of use, reduces the burden of injections by automatic injection, thereby expanding the treatment options available to patients.
Next, in the area of healthcare solutions, we signed a contract with Konica Minolta REALM for GenMineTOP Cancer Genome Profiling System Testing, and began accepting orders for testing from medical institutions. Genome Profiling, a test using a GenMineTOP , will be used as an adjunct to diagnosis and treatment decisions for patients with solid tumors. Next, Wemex is promoting API collaboration with other companies' services. Since the launch of the Cloud Connect API, as the third collaboration, Wemex has started linkage with SymView, a web-based medical interview system from Layered, and the fourth one is Yakushimaru Kenta, a prescription entry support service for dispensing pharmacies from NeoX. SymView, a web-based medical interview system, automatically reflects basic information and subjective symptoms entered by patients in online medical interviews into electronic medical records and medical computers.
Yakushimaru Kenta automatically reflects the contents of prescriptions in our pharmacy system for insurance pharmacies by simply scanning any type of a prescription. By expanding our services through this kind of API collaborations, we will strive to develop services that can contribute to improving the operational efficiency of healthcare professionals and the quality of medical services. In addition to these initiatives, we will continue to promote growth measures to achieve our midterm management plan. That's all from me. I'd like to hand it over to Fred.
Thank you, Miyazaki-san. In the next few slides, I will cover the same key areas I normally review. First, I will walk you through the keys to the performance for our first half results, and then I will review our forecast for this fiscal year, which we are updating from our initial forecast. On slide 16, we have included on the left side, our first half results for fiscal 2023, and the right side, our results for the second quarter. Both are compared to the same period of the prior year. For the first half in fiscal 2023, our revenue was JPY 166.8 billion. This is a decrease of JPY 3.8 billion from JPY 170.6 billion reported in the prior year.
The average exchange rates for the first half were about JPY 153 to the euro and JPY 141 to the U.S. dollar. Those are up from JPY 139 to the euro and JPY 134 to the U.S. dollars in the same period of the prior year. The weakening of the yen resulted in a favorable foreign exchange revenue impact of JPY 5.4 billion. However, this benefit was offset by revenue decreases seen in several key business units. I will go over the reasons for the change by segment later in this presentation. Our operating profit decreased by JPY 6.4 billion to JPY 4.2 billion.
The drop was mainly due to lower earnings in Diabetes Management segment, the impact of a decrease in the volume of PCR tests in our Healthcare Solution segment, and a small impairment loss in our Epredia Business. This drop was despite a profit earned on the sale of our investment in Lunaphore, in our Diagnostics and Life Sciences segment. Our profit before tax and our profit attributable to owners of the parent company both came in negative at JPY 3 billion and JPY 2.5 billion, respectively. The gap between operating profit and profit before tax had two causes. First, we reported financing costs, an unrealized JPY 3.9 billion FX valuation loss on intercompany loans, principally due to the strengthening of the euro against the yen. Most of this was recorded in Q1.
Secondly, we recorded higher interest expense this year relative to prior year, due to higher interest rates on our U.S. dollar loans through the refinancing and our remaining euro-denominated loans. After adding back one-time charges, our adjusted EBITDA decreased by JPY 8.7 billion to JPY 21.1 billion. Lastly, our cash-based net profit came in at JPY 3.8 billion, a decrease of JPY 4.6 billion relative to prior year. Slide 17 shows a quarterly trend of our revenue and operating profit. Like in the Q1 report, we are focusing here on operating profit as our main indicator, but to help with comparison, we have included adjusted EBITDA on the segment-specific slides. As I explained in previous quarters, Q1 tends to be our slowest quarter, and the numbers tend to increase from the second quarter to the end of the year.
Spending from U.S. and European customers typically gains momentum starting in July, reaching its peak during the October to December quarter, with Japan-based customer spending accelerating from our third quarter, with the most significant growth occurring in our fourth quarter. In the second quarter of this fiscal year, both revenue and profit increased compared to Q1, but the level of increase was lower than the previous year, mainly because of drops in Diabetes Management and healthcare solution segments. Slide 18 shows our revenue performance across the five business units within our three segments. Diabetes Management segment reported revenue down 4.7% year-on-year to JPY 52.8 billion. Our healthcare solutions segment reported a 4.6% year-on-year decrease in revenue to JPY 61.8 billion.
Within this segment, our Healthcare IT Solutions Business, whose name was changed from this fiscal year to Wemex, reported a 14.4% year-on-year increase in revenue to JPY 19.3 billion, but this was offset by an 11.3% decrease in LSI Medience's revenue to JPY 42.6 billion. A portion of the change within the segment was due to the transfer of LSI Medience's health checkup support business to Wemex. Lastly, our Diagnostics and Life Sciences segment's revenue increased 3.6% year-on-year to JPY 51.5 billion. Within this segment, our Epredia business reported revenues up 10.3% year-on-year to JPY 25.5 billion.
But this growth was partially offset by a 2.4% year-over-year decrease in our biomedical business's revenue, which also came in at JPY 25.5 billion. This drop was mainly due to lower COVID-related ULT sales. I will go over each segment in more detail later in my presentation. But first, on slide 19, we have provided bridge charts to explain the change in revenue and operating profit in the first half of fiscal 2023 relative to the prior year. In the top chart, you can see that our revenue, excluding a net positive COVID headwind of JPY 3.8 billion, was down 3.2% year-over-year. The underlying growth in our healthcare IT solutions business was not enough to offset the weakness seen in Diabetes Management and life science, I'm sorry, LSI Medience Business units.
In the bottom chart, you can see that our operating profit, excluding a net positive COVID impact of JPY 1.5 billion yen, decreased 57.6% year-on-year. The result was due to a combination of factors. First, we did see savings of about JPY 4.1 billion yen in our headquarters costs, most of which relates to the early retirement program offered in Japan and the downsizing of our U.S. headquarters during Q1 of the previous fiscal year. The Diagnostics and Life Sciences segment was mostly flat, but this included the profit on the sale of Lunaphore, offset by the impairment on Epredia, which Miyazaki-san covered earlier. These positives were offset, though, by drops in Diabetes Management and healthcare solutions operating profit. From here, I will explain a breakdown of revenue and operating profit by segment for the first half of fiscal 2023.
First, on slide 20, in Diabetes Management segment, revenue decreased 4.7% year-on-year, with operating profit down 60.6% year-over-year. The segment's overall revenue of JPY 52.8 billion did benefit from positive FX impacts of JPY 2.7 billion. On the BGM side, the decline in sales continued due to shrinking developed markets as well as the termination of the alliance in the U.S., which we have been reporting on during the previous fiscal year. In our IVD business, we reported growth in sales of both POCT and motorized drug devices. The segment's operating profit came in at 9% due to the 60.6% decline in operating profit year-over-year, from JPY 12 billion in the prior year to JPY 4.7 billion. This decline was mostly due to four factors.
First, one-time expenses of JPY 3 billion were incurred to further restructure and streamline the BGM business. Second, investments were made to reinforce the sales force and marketing of CGM product. Third, the business continued to see a change in the BGM sensor channel mix from developed to developing markets. And lastly, there was a change in product mix as we saw increased sales of lower margin IVD and CGM product, and reduced sales of higher margin BGM product. For your reference, as you can see at the bottom of the slide, the segment's adjusted EBITDA was JPY 11.3 billion in the first half, down from JPY 17.5 billion reported in the prior year. On slide 21, you can see our healthcare solutions segment's revenue decreased by 4.6%, and its operating profit decreased 68% when compared to the prior year.
Two notes about the segment. First, our LSI Medience business saw an increase in revenue from non-COVID-19 tests and COVID-19 antigen test kits. However, these positives were offset by reduced COVID test counts and a negative IT business impact on the unit's IVD business due to the ongoing war between Ukraine and Russia. Secondly, our healthcare IT solutions business's revenue continued to benefit from the Japanese government's increased pressure on the industry to complete the rollout of the online eligibility check system, which was again a tailwind for us in the first half. This business unit also experienced demand from the start of the e-prescription operations, and it continued to report increases in software sales for receipt computers and dispensing systems from large pharmacy chains.
The 68% drop in the segment's operating profit from JPY 5.3 billion to JPY 1.7 billion caused its operating profit margin to drop to 2.7%. The drop came in our LSI Medience business, which saw a decrease in the volume and profitability of its PCR testing. And but unlike in prior periods, the drop was not offset by the healthcare IT solutions business as we increased SG&A costs in this business to accelerate investments in new products such as cloud services. Again, for your reference, you can see the segment's adjusted EBITDA was JPY 7.3 billion. This is down from JPY 11.2 billion reported in the prior year. Lastly, our Diagnostics and Life Sciences segment revenue increased 3.6%, but its operating profit decreased 6.8% year-on-year.
The segment's reported revenue of JPY 51.1 billion included a positive FX benefit of JPY 2.9 billion. Excluding this benefit, the segment's revenue came in at JPY 48.2 billion, a slight decrease when compared to prior year. Within the segment, our biomedical business unit continued to see increasing sales for products unrelated to COVID from its life science research clients. However, these were not able to offset lower demand for COVID-19 related ULT shipments, the restraint of capital spending by our customers, and inventory adjustments we made mainly in the United States. Finally, our Epredia business unit continued to see a rebound from lost sales due to the factory lockdown in Shanghai in the previous year. In addition to this rebound, the business unit sales were positively affected by FX tailwinds and inorganic revenue from M&A transactions.
The operating profit of this business segment in the first half was JPY 2.5 billion. Included in this amount is a JPY 2.7 billion profit recorded on the sale of our investment in Lunaphore, and an impairment loss of JPY 2.1 billion on our Epredia business unit, both of which were recorded in the second quarter. During the year, both our Epredia and Biomedical Businesses continued to work to pass on increased costs to their product selling prices. Both businesses were able to offset some, but not all, of the cost increases with higher prices. This increase in cost, coupled with lower COVID demand for higher margin ULT freezers as compared to the prior year, drove down the segment's operating profit, excluding one-time profits and losses.
Again, for your reference, the segment's adjusted EBITDA increased to JPY 6.7 billion from JPY 6.4 billion when compared to the prior year. Slide 23 shows the revenue breakdown by region. In Japan, reported revenue of JPY 70.1 billion, down 2.5% versus prior year, mainly because of the decline in PCR testing. The EU region reported revenue of JPY 40.2 billion, a year-on-year decrease of 5.4%. The drop in sales was mostly due to weaker sales Diabetes Management's mature markets in the EU region. The North America region reported revenue of JPY 36.3 billion, down 2.9% year-on-year. In North America, sales decreases were seen in Diabetes Management segment, as well as our Diagnostics and Life Sciences segment.
Lastly, sales in other regions, which include APAC, rose to JPY 20.3 billion, an increase of 7.4% year-on-year. In this region, we continued to see strength Diabetes Management in emerging markets such as China and Russia, and we saw a rebound in our Epredia business from the lost sales due to the factory lockdown in Shanghai in the previous year. Slide 24 provides a reconciliation between operating profit and adjusted EBITDA, and a conversion of IFRS-related profit attributable to owners of the parent to a cash basis. On the top half of the slide, you can see that the only material items between operating profit and EBITDA are depreciation and impairment. Depreciation continues to decrease year-on-year as capitalized intangible assets in Diabetes Management segment continue to become fully amortized.
In Q2, we took a JPY 2.1 billion impairment on our investment in Epredia. Between EBITDA and adjusted EBITDA, I would like to point out two large items. First, there was a JPY 3 billion charge recorded in the restructuring, in Diabetes Management. secondly, there was a profit of JPY 2.7 billion booked in the Diagnostics and Life Sciences segment on the sale of our investment in Lunaphore. Other than these items, there were no other material one-time items to report on in the first half of fiscal 2023. On the bottom of the slide, we've disclosed the profit attributable to owners of the parent company on a cash basis.
Adjustments from the IFRS presentation include amortization expense of M&A-related intangible fixed assets of approximately JPY 5.3 billion, and the JPY 2.1 billion impairment charge recorded on our Epredia business unit. After adjusting for these two items and the related tax benefit, our cash-based profit for the first half came in at approximately JPY 3.8 billion, lower than the JPY 8.4 billion reported in the previous fiscal year. The lower cash-based profit is mainly due to the unrealized FX losses recorded, as these losses are not included in the add backs when calculating cash-based profit. Overall, there was no material changes in our consolidated balance sheet as of September 30 versus March 31.
On the asset side, other than a JPY 500 million increase in cash to JPY 61.4 billion, and a JPY 11.7 billion increase in goodwill, there were no other material changes in our total current or non-current assets. A bridge explaining the increase in cash is provided on slide 26. In summary, operations generated cash of about JPY 22.7 billion. Of this, about JPY 2.1 billion was reinvested in the business, and JPY 23.6 billion was used in financing activities, of which JPY 13.3 billion was used to repay debt and JPY 4.5 billion to fund our fiscal 2022 year-end dividend. CapEx came in at JPY 6.9 billion , but this was offset in investing activities by proceeds from the sale of our investment in Lunaphore.
Goodwill decreased by the impairment, but this drop was offset by an increase due to FX, given that much of our goodwill is denominated in euros and US dollars. Like on the asset side of the balance sheet, there were next to no changes in our total current or non-current liabilities other than the change seen in our total loan payables. The long-term portions of loans payables changed from JPY 262.4 billion to JPY 259.7 billion. This was due to the refinancing of the U.S. dollar loans to yen in Q1, repayments of borrowings, and an increase in the carrying value of the loans, mainly due to currency translation.
Lastly, you can see that the decrease in our trailing 12 months adjusted EBITDA versus prior year resulted in our net leverage ratio rising from 3.6x at the end of March 2023, to 4x at the end of Q2. Our gross leverage ratio rose from 4.5x to 5.1x . Slide 26 includes a bridge explaining the changes in cash. In the interest of time, I will not review this in detail, but I will be happy to answer questions later. From here, I would like to explain the forecast for fiscal 2023. Our fiscal 2023 outlook for revenue, EBITDA, adjusted EBITDA, cash-based profit, and the full-year dividend remains unchanged from the forecast we provided in May.
Regarding exchange rates, we are raising our annual average assumption for the euro to 155, and the U.S. dollar to 144. These are up from the 138 for the euro and the 133 for the dollar used in our previous forecast. On slides 29 and 30, we have provided bridge charts to explain the breakdown of the movement in our revenue and operating profit between our May and our revised forecasts. I will go over these in a few minutes. Profit before tax decreased by JPY 6.6 billion to JPY 16.8 billion. The decrease is made up of three items. First, we have adjusted for the FX valuation loss of JPY 3.9 billion on intercompany loans, again, most of which was reported in Q1.
Secondly, we are raising our interest expense by about JPY 800 million. Most of the raise is related to the increase in rates in our euro-denominated debt in Q2. Lastly, we are updating the forecast for the JPY 2.1 billion impairment charge we took in Q2 on our investment in Epredia. We are taking down our profit attributable to owners of the parent by JPY 1.9 billion. This takedown is comprised of the above decrease in profit before tax, offset by the corresponding tax on these adjustments and lower tax expense due to estimated positive full-year tax impacts from our loan refinancing. Lastly, our forecast for cash-based profit remains unchanged, and given that, we have decided to keep our full-year dividend forecast at JPY 72 per share. Slide 29 shows a bridge chart which explains the change in revenue.
Our forecast for fiscal 2023 remains unchanged at JPY 355.5 billion, but you can see on this slide that the revised forecast includes a positive FX impact of JPY 16.6 billion. In the businesses, we are seeing growth in healthcare solutions, but drops Diabetes Management and Diagnostics and Life Sciences. Healthcare Solutions growth is driven by the impact of the acquisition of the Fujifilm Healthcare Systems, electronic medical records and medical receipt systems-related business. As Miyazaki-san noted earlier, we expect this business to contribute approximately JPY 5 billion in the second half of fiscal 2023. The takedown of JPY 8.6 billion Diabetes Management is driven by declines we are seeing in developed BGM markets, coupled with lower than expected growth in CGM.
Lastly, our Diagnostics and Life Sciences segment is forecasted to be down by JPY 10.9 billion, as the segment continues to be affected by market softness due to reduced capital spending by our customers. On the left side of slide 30, we have provided a bridge for operating profit, and on the right side, a bridge for profit attributable to owners of the parent. We are forecasting a JPY 2.2 billion drop in operating profit from JPY 29.3 billion to JPY 27.1 billion, and a drop in profits attributable to owners of the parent from JPY 15.6 billion to JPY 13.7 billion. FX neutralized, our operating profit gap would be JPY 2.6 billion, as the overall drop of JPY 2.2 billion includes a positive forecasted FX impact of JPY 400 million.
In Diabetes Management segment, operating profit is forecast to be mostly flat, as low margin, I'm sorry, as loss margin on the flow-through of reduced sales is being offset by the positive impact from restructuring in the first half. The JPY 2.1 billion drop in operating profits we are forecasting in the healthcare solutions segment is driven by three factors. First, we are seeing lower margins in our LSI Medience Business Unit as COVID testing, which carries higher margins and clinical testing, are forecast to come in lower than planned. Secondly, we are planning to make investments in our Healthcare IT Solutions Business Unit to accelerate the rollout of new products.
Lastly, depreciation is now forecast to come in higher than originally planned, as purchase price assets acquired as part of the acquisition of the EMR business from Fujifilm Healthcare Systems will begin to be amortized from October 1. Lastly, the JPY 200 million rise in our Diagnostics and Life Sciences segment's forecasted operating profit is due to an expanding gross profit margin in the segment, coupled with profit realized on the sale of our investment in Lunaphore. These benefits, though, were offset by lost margin on the flow-through of reduced sales and the JPY 2.1 billion impairment recorded on our investment in Epredia. I will skip detailed explanations for the right side of the bridge, but I will be happy to answer any questions during the Q&A session. On slide 21, we have provided forecast by segments.
As this is similar to what was explained on the previous slides, I will skip this page in the interest of time. Finally, on slide 32, we have included a Summary FX Sensitivity Guide. This also has remained unchanged since the May presentation. However, I do want to point out that this analysis is based on our original budget, which has differed from actual results, especially as it relates to the US dollar operating profit movement. Like, for every JPY 1 of depreciation, we continue to see an increase of approximately JPY 500 million versus the euro and US dollar in revenue, and an increase of JPY 50 million versus the euro and JPY 40 million versus the dollar in operating profit.
Like in prior reports, we have listed only U.S. dollars and euros, since these with yen make up approximately 85% of the group's revenue and 90% of the group's operating profit. Also, please remember that when calculating any estimate, we report year-to-date results on a yearly average basis, which means for each 1 yen movement in the average real rates in Q3 and Q4, we will only have a 50% flow-through since we are currently halfway through our fiscal year. I will end my presentation here and turn the floor back to Makise-san, but I do look forward to answering any questions you may have in the upcoming Q&A session. Thank you.
Now, we would like to start the Q&A session. COO Koichiro Sato and CSO Kaiju Yamaguchi will join this session. If you'd like to ask a question, please, click Raise My Hand button at the bottom of your screen, and the microphone setting will change. Please name yourself and name your affiliation and ask your question. Please keep your question to one to two questions and make it as simple as possible. Please raise your hand if you'd like to ask a question. I will call out the names in order of the people with their hands up. Mr. Ueda, please.
This is, Ueda from Goldman Sachs Securities. I'd like to ask a question about the gross profit, trend. From the first quarter to the second quarter, the gross profit rate had deteriorated. Of course, the one-time factors like impairment can be understood and is included in others, so why was it deteriorated this much? Are you expecting improvement for the full- year? That is my question.
Yeah, I think in the first quarter, as I mentioned. All right, the operating profit walk across the slide that we have, the real weakness that we're seeing really is coming in Diabetes Management segment. That rev that was taken down roughly about JPY 8.9 billion in the first half. We saw in the second quarter an acceleration of the decline, principally in the European markets. In addition to that, we are seeing a shrinking in the LSI Medience Business, as revenue is coming in a little bit lower than what we had expected. That is a couple factors.
The main factor driving the lower margin really is we had in the forecast estimated COVID test counts. Unfortunately, they are coming in almost 50% of what we had initially estimated in the plan, so that is driving down the bottom line. As it relates to the forecast, as I said in the forecast, overall, with the exception of the adjustments, we are expecting to meet what we had initially stated in the plan. The forecasted adjustments are the ones that I just went through.
Thank you very much. My second question is about the forecast of the adjusted EBITDA going forward. Toward the second half in each business segment, I think that you plan to see the improvement. Looking back, your performances so far, I think that your businesses are not really seasonal. Therefore, we haven't seen in the past any major improvement in the second half compared to the first half. However, for each business segment, what could be the factors that will achieve improvement in the second half?
I think going through the various BUs, in order for us to hit the forecast, a couple things really have to happen. First, in the BGM Business, we are expecting to continue to see sales growth in the emerging markets and in the OTC market in the United States. In addition to that, though, we do have to see a slowdown of lost sales that we are seeing in the European markets. Now, as it relates to the bottom line in that BU, we do expect, with the cost cuts that we've put in place, that we will be able to hold bottom line. In the CGM, we have factored into the revised forecast, the takedown of what we are seeing.
So I don't think we have to worry at this point in time about that. Within the Healthcare Solutions, LSI Medience's first half numbers were low. We're expecting those to start to rebound, and we are seeing those in the first month of the third quarter. To buffer, though, the bottom line, we will continue to look at cost reductions. Also, Wemex, we are expecting to see an uptick in e-prescriptions in the second half, that will help us support that segment. And lastly, in Diagnostics and Life Sciences, in the Apria Business Unit, what we really need to focus on is building the order book.
We took down the backlog in the first half of the year, but we need to continue to focus on building the order book. And PHCbi, we need to focus on securing large-scale domestic Japan product projects. Plus, in the EU and in Europe, we need to work really on building the order book going into next year. I hope that answered your question. I know it was a long answer, but I wanted to hit all of the BUs.
Thank you very much. That is all the questions from myself. Thank you.
Thank you very much. Next? Mr. Ryotaro Hayashi, please unmute yourself. Thank you very much. From Morgan Stanley MUFG Securities.
Can you hear me?
Yes, we can hear you.
I would like to ask, general question about, medical device industry. In summer, in China, we had the anti-corruption topic, and the stock price is moving a lot. And what is the impact to your company? I think it was mentioned before, but what is your impact on your performance? What is your thought on this, is what I'd like to know. Thank you very much.
Thank you very much for your question. About your first, question about China, there was about a 3% impact on the revenue. So I'd like to talk about, that, framework. In China, "China for China" is the national policy taken in China, and accordingly, within China, we do have a plant in Shanghai. Therefore, we are going to increase the lineup of production so that we'll be able to follow the policy of the Chinese government. I think we'll move into that direction further, so we'd like to take measures accordingly.
And as about the GLP-1, in the U.S., there is a lot of impact, especially in the U.S. In the CGM business, the diabetes insulin injection, even if it's limited, the insurance coverage has expanded. So not just Type 1, but we hope we'll be able to capture demand in Type 2 diabetes. That is how we expanding marketing. That is the measures that we are taking at the moment. Thank you very much.
Additionally, in China, with anti-corruption, in some of the hospitals, the bid for capital equipment is being delayed, but with your products, you are not affected with such a delay. Is that correct? As for GLP-1, it will bring a positive impact, but we don't have to worry about the negative impact to BGM. Is that correct?
As for the anti-corruption in China, of course, we are seeing impact in the delay of bidding. So for our diabetes business, there may be delays in tenders and maybe delay in tender for life science business. But as I mentioned at the beginning, this is within the 3%, so I think the impact to the whole business is very small. As for GLP-1, there is impact on CGM.
However. When it comes to BGM business, there is no significant impact. Thank you very much. That is all.
Thank you. We are running out of time, so, we'd like to limit, the, number of persons asking a question to two who are raising their hands. So Hidemaru Yamaguchi-san, please.
Can you hear me?
Yes, we can.
Thank you. I'm Hidemaru Yamaguchi, Citigroup. I have one question. Regarding the CGM, you have commented in various ways, and in Q1, it's a bit weak and also Q2. And as a result, in the full- year forecast, you made a down revision. What about the marketing situation and the competition? And also, as you are implementing the campaigns, how much a decline in terms of numbers and number of patients? I think 3,000, 6,000, 7,000, those were discussed. So could you also tell us a little bit more about your KPIs?
Thank you for your question. Regarding our initiatives, right now, we have started our campaigns, and we are trying to increase the lead of the customers. And from that lead, we'd like to enhance the conversion from lead to the actual customers. Starting from October, we'll be also starting the TV commercials. Comparing before the start of campaign, the number of lead is more than triple now. However, what we have been making efforts right now is to enhance the conversion rate of those increased number of leads. The conversion has been slow compared to our original estimate. Therefore, more specifically speaking, the cycle time to deliver to the customer, that is still long.
Therefore, we'd like to use more telemedicine, and also we'd like to introduce the systems so as to facilitate the documentation-related procedures.
The number of patients administered, what about any changes in the sales activities?
Well, regarding those, we cannot disclose anything substantial. However, the number of patients, that's, again, the actually is a little behind us on our plan.
I see. Thank you very much.
Thank you very much. Mr. Seiji Wakao, please. Please unmute yourself.
This is Seiji Wakao from JP Morgan. Thank you very much. I'd like to ask 2 questions. My first question, page 29 and page 30, the change from the original plan. That is what I'd like to ask about. As for revenue, I do understand the reasons why you changed it, but why did you change the operating profit? I wasn't really sure about why you had to change, especially for Diabetes and Management, structural restructuring and one-time revenue you mentioned. But what does that one-time revenue mean? And as for Diagnostic, it went up by JPY 10.9 billion, but it was up by JPY 200 million as well. So I didn't really understand the balance between the two. From the second quarter, you are working to slim down the business, so what is the impact brought by that measure? That is my question. Thank you.
First, as it relates to the revenue, as you do know, on the first page, there was an JPY 8.6 billion take Diabetes Management. you would expect normally, the GP margin in this business is normally around average of about 70%. So you would have expected to see a flow through of roughly JPY 5 billion. But you'll see, as you pointed out, we're flat. The reason why we're flat is because of the cost, almost all because of the cost saves that we put in place. I have to apologize because you caught me off guard with the one time. That was the old script, and I think the translators included in the old script.
There will be potentially a small one-time benefit that we are expecting at this point in time. But the bulk of the saves really is coming from the cost-cutting exercises, 'cause we are starting to see those cost saves flow through to the P&L. We expect that to accelerate in the second half, because most of them were made in the latter half of the second quarter. The overall takedown in operating profit from JPY 29.3 billion to JPY 27.1 billion, it's plus and minus across, but really equals to roughly the JPY 2.1 billion impairment. If it were not for that impairment, we would have really held the numbers firm.
Although there are plus and minuses going up and down between the various P&Ls. I hope that answers the question. If not, feel free to ask a follow-on.
はい、大丈夫です。あの、コスト削減と理解しました。二つ目、あの、CGMについて確認させて頂きたいんですけど、えっと、製品.
I'd like to confirm about CGM, about the product, pipeline. So you have submitted to FDA for approval. When are you expecting approval so that it will contribute to sales? That is my question. And, 365-day sensor. So it says the trial has been completed, but, when will we be able to see the data? That is my question.
はい、はい、ありがとうございます。あの、iCGMのところについてですね.
Thank you very much. As for iCGM, yes, you are correct, we have filed, and within the year, we hope to be able to have approval, so by the end of the fiscal year. And as for the 365-day sensor, when the data will be available, at the moment, we are not sure. We have not been able to confirm. Therefore, as soon as we find out, at the earnings call, we hope to give you additional information.
Thank you very much. If the data is positive, you'll be able to file next year. Is that correct?
Well, yes. Looking at the data so far, I think, it's going to be positive, so that is our understanding. You can see on the screen, bottom left, this is disclosed information from Senseonics and from iCGM.
Of course, these are the information that has been disclosed. It says FDA submission, and this is a timeline that we expect going forward.
And as for 365 sensor, you do not know the content of the data, right?
Well, the study has been completed, so we are preparing for submission at the moment.
Understood. Thank you very much.