Hello, good morning. I am Deguchi, President and the CEO. Today, we will explain the summary of the first quarter results for the fiscal year ending March 2026 and the full year forecast. I will explain the executive summary, and CFO Yamaguchi will explain the summary of the first quarter results and the full year forecast. Here are the first quarter financial result highlights. Revenue was JPY 83.9 billion. Compared to the same quarter last year, the exchange rate of the yen was strong against the euro and the dollar during the period, resulting in a 1.6% decrease in revenue year- on- year. However, excluding the impact of exchange rates, revenue increased by 1.4%. Overall, revenue in developed countries was strong in the BGM segment, which continued shrinking so far, offsetting the decline in revenue in the diagnostics and life science instruments segment.
In healthcare solutions, although sales related to electronic prescriptions declined, sales related to electronic medical records and medical receipts compensated for this decline, resulting in a slight increase in revenue. Operating profit increased by JPY 1.8 billion year- on- year to JPY 3.8 billion. The high margin BGM revenue increase in developed countries contributed significantly, exceeding the internal plan. Profit attributable to the owners of the parent was JPY -2.3 billion, reporting a foreign exchange loss of JPY 4.4 billion due to the yen's depreciation against the euro at the end of June. This represents an improvement of JPY 0.8 billion year- on- year. The full year forecast for the current fiscal year remains unchanged from the initial forecast. Going forward, we will closely monitor and evaluate the market conditions for diagnostics and life science instruments, the business environment for electronic prescriptions, and the trends in tariffs and exchange rates, among other factors.
Therefore, at this point, we maintain the dividend forecast at JPY 42 for the full year, as previously announced.
I will now explain BGM's strategy, which is the growth strategy in the United States. In the Value Creation Plan announced last year, we stated that BGM sales will decline at an annual rate of 7.5% from fiscal 2021 and will decline at an annual rate of 2.4% for the three years from 2025 to 2027. The key to reducing this decline is to stabilize performance in the United States. In the first quarter, while the overall market continued to shrink in the United States, we achieved year-on-year growth of over 5% in local currency terms. The main reason for the decline in our sales in the United States has been the impact of the termination of sales partnerships. At present, the decline has been limited to a few hundred million yen, and we expect it to come to an end.
With the impact of the termination of sales partnerships decreasing, efforts to stabilize performance and shift to growth have contributed to results from the first quarter. First, we are working to increase sales prices and margins. In the United States, the OTC channel, or cash segment, is growing. This channel is growing because it offers convenience to purchases, as products can be purchased at a lower price than the insurance co-payment and do not require a prescription. Furthermore, because it is not affected by insurance systems, prices and margins are relatively good. Our company has long been the national brand leader with number one share in the OTC channel, and we will continue to grow our share in this growing market. In addition, we have withdrawn from channels that have not been sufficiently profitable and launched new competitively priced products, Contour Plus, in low-priced channels.
In this way, we are working to increase sales prices and profitability. This Contour Plus led to the acquisition of a new preferred partnership agreement with a major U.S. insurance company in July. This is expected to result in an expansion of market share in the United States in the future. The stabilization of revenue from BGM, which is positioned as a foundation business in the Value Creation Plan, is progressing steadily. Next, I will explain LSI Medience response to the precision control chart issue and recent efforts to improve quality and restore trust. Although the impact on business performance has been limited to less than initially anticipated, we recognize the importance of ensuring quality and continuing to monitor measures to prevent recurrence. LSI Medience designated June 5th, the date on which we received the final report from the External Investigation Committee, as Quality Awareness Day.
On this day, we held a company-wide meeting to confirm the measures taken so far and the issues to be addressed for improvement and prevention of recurrence, as well as the future direction, and renewed our determination to take action with a sense of ownership. Additionally, we are promoting cultural reform through cross-departmental project initiatives. We undergo mock audits by third parties to ensure compliance with certifications and standards, and continue to make improvements. The CAP certification from the American College of Pathologists will have received certification for renewal in June. Furthermore, regarding ISO certification for the Central Laboratory, we have already applied for re-certification and are currently working toward its re-acquisition. Our company and LSI Medience will continue our efforts to improve quality and restore trust. On the right side, you will find several recent external evaluations of our group. Wemex nationwide customer service is one of its strengths.
Wemex call center has received the title of HDI Seven- Star Certified Center Title. This is the first time that a company in the healthcare industry has been given this honor. This is an example of how our group's strengths, precision technology, is being utilized not only in development and manufacturing, but also in services. We also made progress in our ESG initiatives. In June, we obtained SBTi certification for GHG emissions reduction targets for 2030. We are also steadily promoting the sustainability strategy set out in our Value Creation Plan. This concludes my presentation. I will now hand over to CFO Yamaguchi.
Thank you. First, I will explain the results for the first quarter, followed by the full year forecast. First, here is an overview of the first quarter results. Revenue decreased by 1.6% due to the impact of yen appreciation during the period. Excluding the impact of foreign exchange, there was a slight increase in revenue. Operating profit increased by 89.6% year-on-year, exceeding the internal plan. I will explain the details of revenue and operating profit later for each segment. Although there are differences from segment to segment, we think that our business as a whole made a good start. Financial expenses included interest payments of JPY 1.5 billion and foreign exchange valuation losses of JPY 4.4 billion, resulting in a pre-tax profit JPY -2 billion that improved by JPY 800 million year-on-year.
The foreign exchange valuation loss was primarily due to the yen weakening from JPY 161 per euro at the end of the previous fiscal year to JPY 169 at the end of the quarter. For details, please refer to page 26 of the presentation materials. Profit attributable to owners of the parent was a loss of JPY 2.3 billion. EBITDA increased by JPY 1.2 billion year-on-year. The difference between the increase in operating profit of JPY 1.8 billion and the increase in EBITDA is due to a decrease in depreciation and amortization, including the foreign exchange effect. Adjusted EBITDA, which adjusts for one-time revenues and expenses, increased by JPY 1.4 billion. The exchange rate applied to the P&L for the first quarter was JPY 164 to the euro and JPY 144 to the U.S. dollar. Both were stronger yen rates than in the same period last year.
Page 10 shows the quarterly trend in revenue and operating profit. Due to the nature of our business, both revenue and profits tend to increase in the second half of the fiscal year. As we have previously reported, the progress rate of the first quarter results against the full year forecast is typically low. For the current quarter, revenue decreased slightly year-on-year due to the impact of the yen appreciation. Excluding the exchange rate impact, revenue increased. Operating profit exceeded the performance of the previous year's first quarter, driven by increased sales of high-margin BGM products. Page 11 explains revenue by segment and business unit. Diabetes management revenue declined by 0.4% year-on-year due to the impact of the yen appreciation. Excluding the impact of foreign exchange, revenue increased by 4.3%.
This is the first time since the company went public that the diabetes management revenue showed positive growth year-on-year, which is due to strong BGM revenue in Europe and the U.S. Healthcare solutions slightly increased year-on-year. Despite a decrease in sales related to electronic prescriptions, healthcare IT solutions increased 6.2% year-on-year, with strong sales of electronic medical records and medical receipts offsetting the decline in CRO binder sales. Sales in diagnostics and life sciences decreased by 7.1% year-on-year, partly due to the appreciation of the yen. Excluding the impact of foreign exchange, the pathology business slightly increased, but this was not sufficient to offset the decline in sales of Biomedical and IVD. I will provide a detailed explanation of each segment later. The bridge chart on page 12 shows the year-on-year changes. The graph above shows revenue.
The foreign exchange rate had a negative impact of JPY 2.5 billion, but excluding the impact, it was 1.4% growth. In addition to the diabetes segment and healthcare IT solutions, other segments saw higher than expected revenue from contract manufacturing at the Indonesian plant, resulting in increased revenue. The graph below shows operating profit, which was significantly contributed by a substantial increase in profits from diabetes management. Starting this fiscal year, we have reviewed our head office functions and transferred some of the roles to the business unit. As a result, compared to the previous year, headquarters and other expenses decreased, while expenses for businesses increased. Details, including the impact of the full year performance, are explained on page 23. In this graph, the impact of the headquarters functional review is reflected as a JPY +400 million for headquarters and others, and a JPY -300 million for diagnostics and life sciences.
The impact on diabetes management and healthcare solutions was minimal in the first quarter. Next, I will explain each segment. First, diabetes management. Revenue decreased 0.4% year-on-year. Excluding the impact of foreign exchange, revenue increased and operating profit increased significantly by 136.7%. The profit margin improved by 10 points year-on-year to 17.1%. BGM saw no major changes in the market environment, such as market contraction or a shift to low-price channels in developed countries. However, growth strategies in the U.S. were effective, strong performance in Canada continued, and some phasing effects in Europe contributed to very strong performance in developed countries. Excluding foreign exchange effects, revenue increased by 4.3% year-on-year, as the previous year's results were lower than expected due to distributor inventory levels. CGM increased in revenue year-on-year, although it didn't reach its target due to sales of 365-day product.
Operating profit increased significantly due to the strong performance of developed countries with high margins, which significantly boosted the overall profit margin, as well as the decrease in costs, including foreign exchange impact and a decrease in amortization costs. Next is healthcare solutions. Sales were on par with the same period last year, but operating profit decreased by JPY 400 million. LSIM saw a slight increase due to the impact of revenue declines caused by the inappropriate cases being less than assumed, as well as an increase in the number of tests in the genetic field. Healthcare IT solutions saw a slight decline in demand for electronic prescriptions, but strong performance in foundation businesses related to electronic medical records and medical receipt systems resulted in a JPY 700 million increase in revenue.
This offset the decline in revenue of CRO business, which was negative due to the absence of completion of large-scale tests. Operating profit for this segment was 2.8%. The decline in revenue from high-margin electronic prescription sales was offset by increased revenue from electronic medical records and medical receipt systems, as well as higher personnel and other costs. However, this was not enough to offset the decline in revenue from the CRO business, resulting in a JPY 400 million decrease in profit. Finally, we have diagnostics and life sciences. Sales in this segment decreased by 7.1%, including the impact of the strong yen. The pathology business performed well in Europe, thanks to large orders for digital pathology products. Demand for consumables remained favorable globally, offsetting a decline in revenue due to stagnant demand for equipment in North America and China.
However, revenue declined due to the strong yen, but excluding the impact of foreign exchange, revenue was on par with the previous year. Biomedical is seeing a recovery in Europe, but demand remains sluggish due to the impact of U.S. policies. The IVD business saw a decline in revenue due to a decrease in demand for reagents for China and Russia, and a decline in demand for electronic infusion systems, which had been strong in the same period of the previous year. Operating profit decreased by JPY 600 million, but this includes special factors such as the impact of tariffs of JPY 200 million and the impact of review of corporate functions of JPY 300 million. The pathology business continues to lower costs and improve profitability, but this has not been sufficient to offset the impacts of tariffs on Biomedical and the decline in revenue from the IVD business.
In addition, as part of restructuring reforms, we are currently accepting early retirement applications in this segment in the first quarter. Page 16 shows revenue by region. Japan saw a decline, mainly due to the impact of lower sales in diagnostics and life sciences. Europe was affected by the negative impact of strong yen, but BGM and pathology business performed well, and Biomedical also showed signs of recovery, resulting in a 5.6% increase in revenue. In North America, although BGM grew, revenue declined due to the impact of foreign exchange rates and continued stagnation in demand for diagnostics and life sciences. Other regions continue to be affected by the slowdown in the Chinese market, but saw a slight increase in revenue due to growth in other sales in Indonesia.
On page 17, as items adjusted from operating profit to adjusted EBITDA, depreciation and amortization, and one-time income and expenses included in the operating profit are shown. Depreciation and amortization decreased by JPY 700 million due to the completion of amortization of certain intangible assets and the impact of yen appreciation. In adjustments from EBITDA to adjusted EBITDA, we appropriated JPY 400 million as one-time restructuring cost. Next, we have the consolidated balance sheet. Here is a brief explanation of our major assets and liabilities. The balance of goodwill was JPY 207.8 billion, an increase of JPY 1.3 billion. This was due to foreign exchange effects, and there was no change in local currency terms. Interest bearing debt was repaid by JPY 6.6 billion, but due to foreign exchange effects, the balance decreased by JPY 3.9 billion to JPY 251.4 billion.
In addition, borrowings, which will mature in June 2026, have been reclassified to current liabilities as of the end of the first quarter. This loan was structured on the assumption that it would be refinanced, and discussions with financial institutions were continued. ROE calculated based on profits from the most recent 12-month period was 7.9%, reflecting an improvement in profits attributable to owners of the parent. Cash and cash equivalents decreased by JPY 4.8 billion from the end of the previous fiscal year. Operating cash flow was JPY 5.4 billion, while capital expenditure was JPY 2.2 billion. However, financial cash flow, including repayment of borrowings and dividend payments, resulted in an outflow of JPY 10.6 billion. This has been an explanation of financial results. Next, I will discuss full year forecasts. We are maintaining a full year forecast at this point.
Although operating income exceeded internal plans in the first quarter, we would like to make a cautious judgment in light of the business environment, including the phasing of some BGM sales, trends in demand for electronic prescriptions, and the expected recovery in demand for the diagnostics and life science instruments, as well as the impact of tariffs and exchange rate trends. This is the update on the impact of tariffs. The impact on the first quarter results was approximately JPY 200 million. We are proceeding as planned with the review of production systems as mitigation measures and have minimized logistics between China and the United States, which are most affected. The tariffs imposed on steel-derived products in June and the new tax tariff rates that took effect on 7th August are expected to have an additional impact of up to JPY 1 billion.
However, in addition to price increases already implemented in July, we are considering additional measures, and at this point, we are maintaining our assumption of an annual impact of tariffs to JPY 1- JPY 1.5 billion. Page 23 summarizes the impact of the corporate function review mentioned earlier. For the full year, expenses of JPY 2 billion will be borne by each business segment, resulting in a JPY 2 billion improvement in the headquarters and a JPY 2 billion deterioration in each business segment. The impact of first quarter results was JPY 400 million. The next page shows the revised segment forecasts. There are no changes to total forecasts and breakdown of revenue. The only segment breakdown of operating profit and adjusted EBITDA has been changed. This concludes my presentation.