The two speakers will give you explanation, and we will have a Q&A session at the very end. Thank you, Miyazaki.
Good afternoon, I am Miyazaki, President and CEO. Today, myself and our CFO, Fred Reidenbach, will present the results of Q1 FY23. Also, we will go over the forecast as well. This is the content of today's presentation. Our revenue in Q1 was JPY 81.3 billion, which partly due to the positive impact of FX, remained at the same level as in the previous year when there was a positive impact of special demand from COVID-19. Excluding impact of FX, revenue decreased by JPY 2.5 billion year-on-year. The Diabetes Management sales fell by JPY 2.1 billion, impacted by a slowdown in the market and the termination of a sales collaboration in the United States, despite growth in the IVD business and strong sales in emerging countries for BGM.
Operating profit fell by JPY 300 million year-on-year, mainly due to lower profits in the Diabetes Management business and the impact of a decline in the number of PCR tests, despite lower one-off costs. The main reasons for the change, excluding FX and the impact of COVID-19, were the following: decrease in restructuring and other costs in the headquarters from the first quarter of the previous year, which had a positive impact of JPY 4.5 billion, a negative impact of JPY 3.7 billion due to a decrease in BGM and one-off costs in Diabetes Management, increased costs from strengthening sales of CGMs, JPY 400 million decline in profit in Healthcare Solutions and Diagnostic Life Sciences, respectively. Profit attributable, attributable to the parent company on a cash basis was minus JPY 1.1 billion.
As the warrant in Senseonics is measured at fair value through other comprehensive income, the change in the share price of Senseonics has no impact on the company's profit. Revenue and operating profit for Q1 have landed above the internal plan, including currency effects. For the full year, we have not changed our foreign exchange assumptions and have maintained our initial forecasts with a revenue of JPY 355.5 billion, operating profit of JPY 29.3 billion, and cash-based profit of JPY 23.4 billion. The annual dividend is maintained at the JPY 72 per share, as indicated at beginning of the financial year. The details of these numbers will be explained later by our CFO. This is a slide that we used in the earnings call in May.
It shows the position of the fiscal 2023, which expected to be a turning point for growth, with an increase in costs due to strength investment and the reduced positive impact of COVID-19, while firmly promoting growth measures in each business for further growth from 2024 onwards. Today, we would like to update you on this concept. On this slide, I would like to explain the BGM and the CGM plans actions in diabetes management. First of all, I will start with BGM. Our policy for this year is to maintain profitability by strengthening sales to emerging countries while implementing organizational streamlining and in response to market contraction and lower margins. As for progress to date, BGM was affected by price declines, particularly in developed countries, and slowdown in the market, particularly in Europe, but sales were strong in emerging countries.
Revenues in emerging countries increased by approximately 8% year-on-year, outpacing market growth. One-off costs were recorded in the first quarter as a result of the implementation of organizational changes, and the benefits of this are expected to be felt from the second quarter onwards. Next, I would like to discuss the CGM initiatives. It's been a little over a year since we launched Eversense E3, a 180-day product in the United States in April last year, after receiving approval from FDA. The company will continue to accelerate investment and sales expansion to increase the number of users.
This year, we will strengthen sales and marketing, increase the network of practitioners for sensor insertion, and expand medical insurance coverage. In the first quarter, the number of users worldwide has increased, of which the number of users in the United States has increased 2.2 times compared to the end of June last year. In terms of CGM sales and marketing, direct sales through social media and websites, and the dedicated CGM sales team in the United States are expanding, with a sales area covering 45 regions within the United States. With regard to practitioners network, we have partnered with the nurse practitioner group to offer CGM insertions in clinics and homes in more than 30 U.S. cities.
As for medical insurance, the network is already covered by major insurers in the USA, such as Medicare, which has favorable reimbursement terms and newly became covered by UnitedHealthcare in July this year, increasing the number of people covered in the United States from approximately $250 million to $300 million. In addition, the PASS program was expanded in May this year to include insurance companies that do not insure Eversense E3 in the program, allowing those with private insurance in the United States to purchase the product at a discount rate, regardless of whether they have Eversense E3 insurance coverage or not. Under the new program, the first and up to the second unit can be purchased for $99 each, and we are talking about 180-day type product here.
The company aims to further increase the number of users through the expansion of this program. As for the future pipeline of Eversense CGM products, to reiterate the content of the Eversense CGM presentation in March, we plan to submit data to the FDA for approval for 365 day type product by middle of our 2024. For the iCGM, we are currently conducting safety and accuracy evaluation studies.
Next, using this slide, I will explain Epredia's earning improvement initiatives. As we indicated at the beginning of the fiscal year, in FY 2023, we will capture growth in existing markets while focusing on growth of digital pathology, with the formation of a dedicated team to expand sales. We will also continue our efforts to improve profit margin by efficiently managing the supply chain through multiple sourcing and further improving operational efficiency. As for the progress in the first quarter, we strengthened commercial activities to capture market growth, and together with improvement in supply chain issues, revenue of core instruments continued to grow. We formed a dedicated team for digital pathology sales activities, capturing market growth with digital pathology revenue up approximately 24% year-over-year. In terms of improving manufacturing efficiency, we have switched from outsourced manufacturing to our own Shanghai factory for some of our products.
This enabled us to improve margins and shorten production lead times. We also continued to reduce costs by reviewing our transportation measures. Through these initiatives, it produced overall revenue increase by approximately 16% year-over-year, together with profit margin improvement. Next, I would like to explain the progress of our major initiatives to achieve the goals of our midterm plan. First, Healthcare Solutions. In April, Wemex launched Medicom-HRf Hybrid Cloud, an electronic medical record system with cloud features integrated with medical affairs. This is a location-free and device-free system, mainly for clinics, with the ability to immediately switch over from on-premise server to the cloud server in the event of system failure or natural disaster. In addition, Wemex and Octawell formed a capital and business alliance in July.
Wemex system to support outsourced clerical services for health checkups and specific health guidance in partnership with over 2,800 health checkups and medical institutions nationwide. Octawell's operational efficiency tools for health guidance with ICT and its nationwide network of registered dieticians will be combined to strengthen the business and expand the customer base in the specific health guidance field. In the Diagnostics and Life Sciences business in June, we acquired the remaining 30% stake in SciMed Asia, a sales and service subsidiary, making it a wholly owned subsidiary. SciMed has a broad customer base, encompassing universities, government agencies, hospitals, and pharmaceutical companies, covering the segments of our group's target customers. Going forward, we will continue to strengthen our sales and marketing structure in Southeast Asia, India, and in Oceania, where high growth is expected in the life science market.
PHCbi launched FrostLess, a negative 85 degrees non-CFC, ultra-low temperature freezer. This product significantly reduces frost deposition on the inner door and its peripheral areas, a problem faced by the research fields, as it was time-consuming to remove. We will first launch the product here in Japan, and then expand it to North America and Europe. We will continue to promote growth measures to achieve the goals of our midterm plan. On this slide, I would like to explain the enhancement of growth areas and business restructuring as defined in our midterm plan. On June 26th, we announced the integration related to the IVD business and drug development businesses.
Both are scheduled to take place within the PHC Group as of November first, aimed at strengthening the IVD business in the personalized testing and diagnostic solutions, and the drug development business in the advanced therapy development solutions, growth areas of the midterm plan by fostering synergies. To explain each of these in detail, in IVD, PHC's IVD business and LSI Medience diagnostic business will be integrated. PHC's IVD business develops and manufactures BGM products and provides various medical equipments that support early detection and effective treatment of diseases based on its strengths in manufacturing, such as motorized drug delivery devices and POCT equipments. LSI Medience diagnostic business is engaged in clinical specimen testing, as well as in the development of PCT devices and latex-based reagents used in research, providing world-standard, high-speed, high-precision in vitro diagnostic testing equipment and test reagents.
Revenues from both IVD businesses totaled JPY 18.5 billion in fiscal year 2022. Through this integration, we will foster synergy by strengthening each company's technology development capabilities and leveraging PHC's Monozukuri manufacturing capabilities. By bringing together the strengths of both organization, we will provide solutions to meet the unmet needs of our customers. Next, in drug development, LSI Medience' clinical trial business and the non-clinical business of LSSI, LSIM Safety Science Institute, a subsidiary of LSI Medience, will be integrated, and LSSI will become a subsidiary of PHC Holdings. LSI Medience' clinical trial business supports drug development by providing bioanalysis services with advanced analytical technologies, such as biomarker and drug concentration measurement through clinical development stage, and central laboratory services throughout the study process, from preparation of collection kits to sample collection, measurement, and results reporting.
LSIM provides non-clinical testing services such as pharmacology, pharmacokinetics, and safety for the development and marketing of pharmaceuticals, regenerative medicine, and other products, including agrochemicals, chemical substances, and cosmetics. Sales revenue of both drug development businesses totaled JPY 11 billion in FY22. Through this integration, the two companies will pursue significant business opportunities, such as responding to global drug development needs and the development of advanced therapies, and strengthening analytical technology capabilities in diversified modalities. In addition, we have chosen the name Mediford for our new drug development company, intended to mean moving forward towards the evolution of medical care. The clinical testing business of LSI Medience will continue to provide industry-leading clinical testing services while focusing on advanced and specialized testing, aligned with the clinical testing business strategy set forth in the midterm plan.
Through the restructuring described above, we will further accelerate our growth by realizing synergies, allocating resources to priority areas in a focused and efficient manner, and accelerating strategic decision-making and execution by making LSSI a subsidiary of PHC Holdings. Finally, I would like to explain our ESG initiatives. In our midterm plan announced last November, we explained that we would accelerate the reinforcement of ESG management. Since the formulation of the plan, we have held numerous discussions within the group to identify material issues or materiality appropriate for the group and set quantitative KPIs. We have now identified 11 areas of materiality that the group will address globally and set KPIs as indicators for each. In the area of environment, we will focus on the three global environmental issues of tackling climate change, environmentally friendliness through preservation of natural resources, and promoting a circular economy society.
In the area of society, we will contribute to society based on the characteristics and strengths of our products and services. In the area of governance, we will strengthen our corporate governance, risk management, and cybersecurity. We will continue to be aware of ever-changing social issues, continuously updating key issues and targets, and publicize our efforts in a proactive manner. Thank you very much for your attention. Fred, please.
Thank you, Miyazaki-san. In the next few slides, I will walk you through the keys to the performance for the quarter, and then I will review our forecast for this fiscal year, which we have not changed from our initial forecast. On slide 13, we have included on the left side, our first quarter results from fiscal 2022, and on the right side, our results for the first quarter of fiscal year 2023. For Q1 FY23, our revenue was JPY 81.3 billion. This is a decrease of JPY 200 million from JPY 81.5 billion reported in the prior year. I'll go through the reasons for the change by segment later in this presentation. Operating profit decreased by JPY 300 million to JPY 1.7 billion.
The drop was mainly due to lower earnings in our BGM business, in the Diabetes Management segment, and the impact of a decrease in the volume of PCR tests in our Healthcare Solutions segment. By segment, we saw operating profit decrease in our Diabetes Management segment, mainly due to the impact of one-time costs incurred to restructure and streamline the BGM business, a deterioration in the profit margin due to a product mix change, and an increase in expenses to enhance CGM sales. Operating profit in our Healthcare Solutions segment decreased, mainly due to the impact from the reduction in medical reimbursement rates on a lower volume relative to prior year of PCR testing in Japan within our LSI Medience business. Lastly, our Diagnostics and Life Sciences segment's operating profit was mostly flat.
Within the segment, margin improvement was seen in our Epredia business due to increased year-on-year revenue and implemented margin improvement initiatives. This increase was offset with a drop in operating profit in our biomedical business, principally due to lower ULT sales related to COVID. Our profit before tax and our profit attributable to owners of the parent company both came in negative, at JPY 3.6 billion and JPY 3.2 billion, respectively. The gap between operating profit and profit before tax had two main causes. First, we recorded in financing costs an unrealized JPY 3.3 billion FX valuation loss on intercompany loans, principally due to the strengthening of the euro against the yen. This was worse, a JPY 1.1 billion loss recorded in Q1 of the prior year. Secondly, we recorded interest expense this year of about JPY 2.3 billion.
This is up from JPY 1.1 billion booked in the same period last year, due to higher interest rates on our US dollar and euro-denominated loans. On the business side, our EBITDA decreased by JPY 1.2 billion year-on-year to JPY 8.4 billion. After adding back one-time charges, our adjusted EBITDA decreased by JPY 2.4 billion to JPY 10 billion. Our cash-based net profit came in at a loss of JPY 1.1 billion, a decrease of JPY 800 million relative to prior year. Lastly, you can see that the average exchange rates for our Q1 FY23 were about 150 yen to the euro and 137 yen to the US dollar.
That's up from JPY 138 to the EUR and JPY 130 to the US dollar in the prior year. Slide 14 shows the quarterly trend of our revenue and operating profit. Until now, we have used adjusted EBITDA as the key indicator for profit, but from this quarter onwards, we will focus on operating profit as our main indicator, with adjusted EBITDA shown for reference purposes on some of the slides. As I have 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, as spending from U.S. and European customers typically gain momentum starting in July, reaching their peak during the October to December quarter.
With Japanese-based customer spending accelerating from our third quarter with significant growth in our- Slide five shows our revenue performance across the five business units within our three segments. Our Diabetes Management segment reported revenue down 4.1% year-on-year to JPY 25.4 billion. Our Healthcare Solutions segment reported a 0.8% year-on-year decrease in revenue to JPY 30.8 billion. Within this segment, our Healthcare IT Solutions business, whose name was changed from this year to Wemex, reported a 23.3% year-on-year increase in revenue to JPY 10 billion. This was offset by a 9.3% decrease in LSI Medience's revenue to JPY 20.8 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 4.8% year-on-year to JPY 24.5 billion. Within this segment, our Epredia business reported revenues up 23.4% year-on-year to JPY 12.4 billion. Much of this growth was offset by a 9.2% year-on-year decrease in our biomedical business, which saw sales come in at JPY 12.1 billion, mainly due to the lower COVID-related ULT sales. I will go over each segment in more detail from slide 17. On slide 16, we have provided bridge charts to explain the change in our Q1 fiscal '21 revenue and operating profit versus prior year. In the top chart, you can see that our revenue, excluding a net positive COVID headwind of JPY 1.3 billion, was down 1.5% year-on-year.
The underlying growth in our Healthcare IT Solutions and our Epredia businesses was not enough to offset weakness seen in our Diabetes Management segment and our LSI Medience and biomedical business units. In the bottom chart, you can see that our operating profit, excluding a net positive COVID impact of JPY 200 million, decreased 0.3% year on year. The result was due to savings in headquarter costs, offset by a drop in Diabetes Management's operating profit. The drop in headquarters spend was related to the early retirement programs offered in Japan and the downsizing of our U.S. headquarters during Q1 of the previous fiscal year. From here, I will explain the breakdown of revenue and operating profit by segment for Q1 in fiscal '23. First, Diabetes Management.
The Diabetes Management segment revenue decreased 4.1%, with operating profit down 70.5% year-on-year. As can be seen on the slide, the segment's overall revenue of JPY 25.4 billion did benefit from positive FX impacts of JPY 1 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 for all of the prior fiscal year. And our IVD business reported growth in sales in PLCT and motorized drug devices. The segment's operating profit margin decreased to 6.4%, and operating profit declined 70.5% year-on-year from JPY 5.5 billion in the prior year to JPY 1.6 billion. The decline was mostly due to four factors.
First, one-time expenses of JPY 1.4 billion were incurred to further restructure and streamline the BGM business. Secondly, planned investments were made to reinforce the sales force for CGM product. Thirdly, the business continued to see a change in the BGM sensor channel mix from developed to developing markets. 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 4.9 billion in the quarter. This is down from JPY 8.1 billion reported in the same period of last year. Our Healthcare Solutions segment's revenue decreased by 0.8%, and its operating profit decreased 42.4% when compared to the prior year.
Two notes about this 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 impact on the unit's IBD business due to the ongoing war between Ukraine and Russia. Secondly, our Healthcare IT Solutions business' 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 quarter. This business unit also experienced demand resulting from the start of e-prescription operations, and it continued to report increases in software sales for receipt computers and dispensing systems from large pharmacy chains.
The 42.4% drop in the segment's operating profit from JPY 2 billion- JPY 1.2 billion caused its operating profit margin to drop to 3.8%. This drop was in LSI Medience's business, which saw a decrease in the volume and profitability of its PCR testing, and an increase in expenses related to the organizational restructuring in this segment, which Miyazaki reported on upfront. The drop was partially offset by positive impacts on operating profit due to the revenue increase reported by our Healthcare IT Solutions business unit. For your reference, as you can see at the bottom of the slide, the segment's adjusted EBITDA came in at JPY 4 billion. This was down from JPY 4.8 billion reported in the same period of the prior year.
Lastly, our Diagnostics and Life Sciences segment's revenue increased 4.8%, but its operating profit decreased 6.8% year-on-year. The segment reported revenue of JPY 24.5 billion. This included a positive FX benefit of JPY 1.3 billion. Excluding this benefit, the segment's revenue came in at JPY 23.2 billion, a slight decrease of 0.9% when compared to the prior year. Within the segment, our biomedical business unit continued to see increasing sales for products unrelated to COVID-19 from their life science research clients. However, these were not able to offset lower demand for COVID-19 related ULT shipments when compared to what we saw in the prior year. Our Epredia business unit saw a strong rebound from lost sales due to the factory lockdown in Shanghai in the previous year.
This rebound, coupled with the impact of sales price increases, inorganic revenue from M&A transactions, as well as an increase in sales of digital pathology products, drove the business's growth. During the quarter, 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-19 demand for higher margin ULT freezers as compared to the prior year, drove down the segment's operating profit by 6.8%. Again, for your reference, as you can see at the bottom of the slide, the segment's adjusted EBITDA increased to JPY 3.2 billion when compared to the JPY 2.9 billion reported in the previous year. Slide 20 shows revenue by region.
Japan, our largest market, reported revenue of JPY 34.7 billion, almost flat versus prior year. The EU region reported revenue of JPY 19.2 billion. That is a year-on-year decrease of 7.7%. The drop in sales was mostly due to weaker sales in Diabetes Management's mature markets in the EU region. The North American region reported revenue of JPY 17.9 billion. That is down 1.6% year-on-year. In North America, sales decreases were seen in our Diabetes Management segment, as well as our Diagnostics and Life Sciences segment. Lastly, sales in other regions, which include APAC, rose to JPY 9.6 billion, an increase of 13.6% year-on-year in this region.
In the region, we saw strength in Diabetes Management in Australia and China, one of our targeted emerging markets, and we saw a strong rebound in our Apria business from the lost sales due to the factory lockdown in Shanghai in the previous year. Slide 23 provides a reconciliation between operating profit and adjusted EBITDA and a conversion of IFRS-reported profit attributable to owners of the parent to a cash basis. On the top half of the slide, you can see, like in prior periods, the only material item between operating profit and EBITDA is depreciation. Depreciation continues to decrease year-on-year as capitalized intangible assets in our Diabetes Management segment become fully amortized. Between EBITDA and adjusted EBITDA, I would like to point out that there was a JPY 1.4 billion charge related to the restructuring in the Diabetes Management segment, which I noted previously.
This is a one-time expense incurred due to organizational streamlining within the BGM segment. Other than this cost, there were no other material one-time items to report on. On the bottom of the slide, we have disclosed the profit attributable to owners of the parent company on a cash basis. The only adjustment from the IFRS presentation is the amortization expense of M&A-related intangible fixed assets of approximately JPY 2.6 billion. After adjusting for this item and its related tax benefits of about JPY 600 million, our cash-based result for the quarter came in at a loss of approximately JPY 1.1 billion. This loss is due to the unrealized FX losses, which I mentioned earlier, as these losses are not included as add-backs in the calculation of cash-based profit.
Related to the Senseonics note, which we used to include in this bridge, it is important to understand, as Miyazaki-san mentioned, that from April 1 of this year, due to the exchange of the convertible note to warrants, that the mark-to-market valuation of this investment no longer affects our profit and loss statement, as it is measured through other comprehensive income based on IFRS. Overall, there were no material changes in our consolidated balance sheet as of June 30 versus March 31. On the asset side, other than a JPY 6.9 billion decrease in cash to JPY 54.1 billion and a JPY 11.5 billion increase in goodwill, there were no other material changes in total current or non-current assets. A bridge explaining the decrease in cash is provided on slide 23.
In summary, operations generated cash of about JPY 8.2 billion. This is up from JPY 1.9 billion reported in the same period last year. About JPY 3.5 billion of this was reinvested in the business, of which JPY 3.5 billion was used to finance CapEx. The drop in cash was principally due to debt repayment of, I'm sorry, JPY 5.9 billion and JPY 4.2 billion used to fund our year-end dividend. The JPY 11.5 billion increase in goodwill was due to FX, as much of our goodwill is denominated in euros and U.S. 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 current and long-term portions of loans payables changed from JPY 292.6 billion to JPY 295.3 billion. Most of the increase in the carrying value of the loans is due to currency translation. In the quarter, to help lower interest expense, we did refinance our US dollar loans to yen. Lastly, you can see that the decrease in our trailing twelve months adjusted EBITDA versus prior year, coupled with the larger net loan balances due to FX and decreases in cash, resulted in our net leverage ratio rising from 3.6x at the end of March to 3.9x at the end of Q1. Slide 23 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 when we get into the Q&A section of this presentation. From here, I would like to explain briefly the forecast for fiscal 2022. Our fiscal '23 outlook, including the full year dividend forecast, remains unchanged from the forecast we provided in May, as we have decided at this point to not change the FX assumptions for the full year. As explained in May, it is important to understand that our fiscal 2023 forecast expects no impact from COVID on either revenue or adjusted EBITDA. Also, the impact of the electronic medical record and medical receipt systems related business, which we agreed to acquire from FUJIFILM Healthcare Systems, is not included. We will look to include changes to both of these assumptions when we report Q2 results.
Slide 26 shows our forecasted revenue by business unit. Similar to what was explained in a previous slide, this has not changed since May. Finally, on slide 27, we have included a summary FX sensitivity guide. Again, this has also remained unchanged since the May presentation. Like in prior years, 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. For every 1 JPY of depreciation, we have an increase of approximately JPY 500 million in revenue for both the euro and the dollars, and an increase of JPY 50 million versus the euro and JPY 40 million versus the U.S. dollar in operating profit.
I do, though, want to point out that when calculating any estimates, it is important to understand that we report year-to-date results on a yearly average basis, which means for each 1 JPY movement in the average real rates in Q2-Q4, we will only have a 75% flow-through due to the fact that we are currently one quarter of the way through our fiscal year. I will end my presentation here and turn the floor back to Machiue-san, but I do look forward to answering any questions you may have in the upcoming Q&A session. Thank you.