Good evening, good afternoon, good morning. I'm Shikesh Takeda. Thank you very much for taking time out of your tight schedule to participate in the conference call for the financial results for the Q1 and full year forecast for fiscal 2020 2, I'd like to give you the overview of the financial results for the Q1 as well as our full year forecast. Please turn to slide 3. Here you can see the highlights of the consolidated financial results for the first over our fiscal 2022.
First of revenue, reflecting the market recovery, revenue grew significantly by over 40% driven by medical. The revenue was well above the pre pandemic fiscal 2020 level, 11% increase. In addition to higher revenue, we continue to optimize SG and A expenses and achieved an operating margin of 14.4%, meetings to record highs in terms of both amount and ratio in the Q1. Next, full year forecast. In light of the Q1 performance and market recovery, we have revised upward our forecast for revenue and operating profit.
Compared with fiscal 2021, we now expect a 14% increase in revenue with an operating margin of about 17%, an improvement of 5.7 percentage points. You can see the detailed financial results and business review for the Q1 are as follows. Please turn to Slide 5. Consolidated revenue totaled 119.1 1,000,000,000 yen or 191,500,000,000 yen driven by market recovery. Revenue increased across all businesses, particularly medical, resulting in a growth of over 40%.
Revenue was well above the pre pandemic fiscal 2020 level, up 11%. Gross profit was 123,300,000,000 yen with gross margin improving 2 percentage points, driven by higher revenue and improved factory operation rates. SG and A expenses totaled $95,800,000,000 with SG and A ratio improving 88.8 points. With relaxation of restrictions on sales activities, strengthening of our operational infrastructure and measures to improve profitability, SG and A expenses increased in amount, but we managed to keep SG and A ratio at 50% with strong contribution of higher revenue. Operating profit was €27,600,000,000 with an operating margin of 14.4 percent, an improvement of 11.7 points.
These results represent record highs in terms of amount and ratio for the Q1 since fiscal 2009 when we began disclosing quarterly report. Profit attributable to owners of parent was JPY 18,700,000,000 up 21,400,000,000 yen year on year. Please turn to Slide 6. To facilitate a better understanding of business conditions, we have been enhancing disclosures on our product pipeline and others since last fiscal year. Previously, we Shared business division based information such as growth rate and qualitative information with a focus on ESP and TSP.
Starting from this fiscal year, we will provide additional information on each subsegment of the 3 business divisions. In addition, starting from this fiscal year, bronchoscopes, which were classified in the GI endoscope segment of ESD have been transferred into the respiratory segment of TSD with the aim of strengthening operations in the respiratory field. Last fiscal year's actuals have also been restated in the same manner to allow comparisons. For FY 2020, The figures are not restated. So in the ensuing presentation, When we compare to the results of fiscal year ending March 2020, they are based on the managerial basis for your information.
So please keep that in mind when you compare the figures. Slide 7. I'll look at details of each business segment. First, the AST The Endoscopic Solutions division revenue totaled JPY 100,000,000,000 up 35% compared with the same period of the previous year, which was heavily impacted by COVID-nineteen. Revenue grew significantly across all subsegments on market recovery.
We don't have the restated figures for ESP and TSD for fiscal 2020 due to the changes in disclosure session as I described earlier. But for your information, we achieved 9% growth compared with the fiscal 2020. And I'm sure this represents a significant growth over the pre pandemic level. In GI endoscope, revenue grew across the regions with notable strength in Japan, Europe and North America. Byproduct, GI endoscopy system including EVIS X1 and various scopes such as gastroscopes and colonoscopes contributed to sales increase.
In surgical endoscope, VICERA ELITE II Surgical Endoscopy System recorded strong sales, driven by ongoing switch to VICERA ELITE II in Japan and North America. In medical service, we have been enjoying a stable revenue based on service contracts, including maintenance service. The number of repairs increased across regions, a rebound from pandemic related decline last year. Operating profit was €22,700,000,000 with an operating margin of 22.7%. Expenses increased due to relaxation of Change on sales activities, we also recorded an impairment loss of 1,700,000,000 yen associated with the equity method investment in an equity method affiliate in Europe.
However, these expenses were offset by revenue recovery and the continuing cost control, resulting in a significant improvement in operating margin. Slide 8, the Therapeutic Solutions division, revenue totaled RMB 63,600,000,000 up 48%. In the same period of last year, the number of procedures declined significantly due to COVID-nineteen, but the number has recovered since the beginning of this fiscal year, resulting in significant growth across all sub segments. Compared with the pre pandemic fiscal 2020 level, we achieved 8% growth on a managerial basis. For your information.
In GI Endotherapy, recovery in the number of procedures resulted in growth across all regions and product groups. Performance was particularly strong in North America where vaccination has progressed and the number of procedures is on the rise. With notable momentum in sampling products such as biopsy forceps for tissue sampling and screening endoscopy as well as product for ESD and EMR procedures. Urology achieved significant growth driven by North America and Europe where the number of procedures has recovered. Performance was particularly strong in North America where the number of procedures has returned to pre pandemic levels led by reception electrodes for benign prostatic hyperplasia and follitive super pulsed laser system, a lithotripsy solution for urinary stones.
In respiratory, growth was driven by North America on market recovery. Revenue from Vera Medical Technologies and strong momentum in bronchoscopes folks and endotherapy product for EBAS TBMA made all the contributions. In other therapeutic areas, we saw strong performance in energy devices, gynecology and ENT. In particular, Thunderbeat, a surgical tissue management system and ENT Scopes contributed to sales increase. Operating profit was JPY 14,100,000,000 with an operating margin of 22.1%.
Despite an increase in expenses due to relaxation of restrictions on sales activities, the operating margin improved substantially due to significant sales increase coupled with ongoing cost control as well as a gain of 2,800,000,000 yen in other income associated with the phased acquisition of Meditate. Slide 9, the Scientific Solutions. Revenue was JPY 24,800,000,000 up 40%. Compared with fiscal 28% growth on a managerial basis, exceeding the pre pandemic level for your information. In Life Science, growth achieved across all regions on market recovery and improved budget execution at research institutions and universities.
In particular, biological microscopes in North America, where market conditions We rebounded due to relaxation of restrictions on sales activities contributed to growth. In Industrial, We achieved growth in all fields driven by market recovery led by improved CapEx sentiment. In China, there was strong momentum in industrial microscopes due to 5 gs related electronic component and semiconductor markets. Increased sales of non destructive testing instruments also contributed to growth in relation to market recovery. X-rayfluorescence analyzers were also strong, boosted by high gold prices and strong recycling market of precious metals.
Operating profit was 1,900,000,000 yen with an operating margin of 7.5%, representing a considerable improvement from last year's operating loss due mainly to revenue recovery and improved factory operation rate. Slide 10. Financial position as of June 30. Goodwill and intangible assets increased due to the acquisition of Meditate and others. The equity ratio rose 1.7 percentage points to 35% from the end of March due to a decline in interest bearing debt.
Also, please note that approximately 72,000,000 treasury shares were canceled in June. Please turn to Slide 11. This is the status of the cash flows. Cash flow from operating activities was yen 3,700,000,000 up 182% year over year. While operating cash flow increased significantly due to improved profit, There was a one off expenditure of about yen 9,000,000,000 on the reversal of provision for the Korea Support for External Opportunity Program.
Cash flow for investment activities declined 21,200,000,000 yen year over year to minus 33,500,000,000 yen due in part to an expenditure of about JPY21 billion associated with the acquisition of Meditate. Free cash flow remained positive if the Expenditures for the reversal of the provision for the Korea Support for external opportunity program and for the acquisition of Medgate are added back. Cash flow from financing activities declined 150,800,000,000 yen to minus 39,000,000,000 due mainly to borrowing payments and dividend payments. In the last fiscal year, there was a large amount of financing to deal with COVID-nineteen. As a result, cash and cash equivalents as of June 30, 2021, stood at 168,700,000,000 yen a decrease of 102,000,000,000 yen Next, I would like to explain about our full year forecast for fiscal year 2022.
Please turn to page excuse me, Slide 13. Our full year forecast for fiscal year 2022, which was originally announced in May, have been revised upward in light of our Q1 performance and market recovery. Revenue was revised by $24,000,000,000 and operating profit by 14,000,000,000 We now forecast revenue to grow 14% year over year to JPY 830,000,000,000 and Expect operating profit of BRL140 1,000,000,000 with an operating margin of 16.9%, an improvement of 5.7 points. We also forecast profit attributable to owners of parent of 1,000,000,000 yen Please note that this represents record highs for all lines. Compared with pre pandemic fiscal year 2020, this forecast represents percent growth in revenue, 52% growth in operating profit and 4.7 percentage points improvement in operating margin.
We plan to pay a dividend of JPY 14 per share for this fiscal year, unchanged since announced in May. The ForEx assumptions are yen 108 per dollar and yen 130 yen per euro. The intergroup reorganization of the scientist Coalitions business is currently under consideration and expenditures related to this are not included in this forecast. Please turn to Page Slide 14. This is a forecast by business segment.
A forecast for both revenue and operating profit have been revised upwards across all business segments. In particular, medical business, including ESG and TSB, is expected to grow 10% in revenue and 25% in Operating profit compared with pre pandemic fiscal year 2020 and is expected to achieve record highs in both revenue and operating profit. We are pleased to announce that we resumed shipment of EVX-one EZOSCOPE from July from which we voluntarily suspended shipments last October. As the resumption of shipments is in line with the original schedule, There's no significant impact on business performance forecast. However, we believe that expanding sales of Ebisikis Fund will help us achieve this revised forecast.
Lastly, I would like to highlight some of the initiatives we are pursuing to become a truly global medtech company. Please turn to Slide 16. This is the product pipeline for ESP. While there are no major changes from the previous quarter, in response to relaxation of restrictions on sales activities as well as the reduction of EDO Coke shipments. We will focus on expanding sales of AVS X1 in Europe, Japan and some parts of Asia where we have already launched the product.
We will also aim to launch it in regions where we haven't launched it yet. Regarding VISUALA-eighty two surgical endoscopy system, we will actively promote 3 d and IR system through demonstrations in North America to further expand sales. Please turn to Slide 17. This is a product pipeline for TSD. In GI Endotherapy, we are committed to steadily expanding and growing the product lineup, including products developed in house and those procured externally.
In urology, as I mentioned in the page for TST results, We are seeing strong momentum in SOLTIVE SuperPulse Laser System, a new Vifeltrip C solution for urinary stones. We also strengthened our solutions of BPH by promoting resection electrodes, a growth driver and ITIN, a minimally invasive therapeutic device from Meditate, 4 weeks we just completed the acquisition. In respiratory, we have transferred bronchoscopes, which were previously classified under the GI endoscope segment in ESD to the respiratory segment in TSD, We're adding the lineup of bronchoscopes and ultrasound bronchoscopes to the pipeline. We aim to create synergies between the product portfolios of Olympus and Veron Medical and expand our lung cancer portfolio. Please turn to Slide 18.
Our theme for fiscal year 2022 is to further strengthen our position as a global med tech company. We are working to continue and establish the corporate transformation we carried out last year. We are steadily promoting measures to transform it becoming a global medtech company such as commenced by the consideration of intergroup organization of SSD, promoting global business services in each region and making Meditate a subsidiary. Regarding GBS, the Global Business Service, we established Olympus Asia Pacific Business Management Services in Dalian in China and began to integrate and transfer some indirect operations in Japan, China and some parts of Asia. We will continue to pursue these initiatives and plan to roll them out globally.
Please turn to Slide 19. This is the last slide. We plan to hold Investor Day 2021 on December 7 for the first time in 3 years. Details, including topics on how to participate, will be provided once this is finalized. We look forward to your participation.
This concludes my presentation. Thank you for your attention. Thank you. We will now take questions. My first question is on the full year forecast For ESD and TSD, could you elaborate on the reason for the upward revisions For ESD, if possible, can you speak per product area?
And for ESP, compared to an upward revision amount of revenues, it looks like the Upward revision amount of operating profit is not large. Are you expecting some one off expenses to be incurred? Thank you for your question. Mainly, our ESD And majority, Although we are not disclosing that far, mostly in relation to GI endoscopy, the GI business unit. At the last briefing, we had some discussion on this.
And I think I indicated that we are taking a rather cautious view. And looking at the results over the past 3 months. We felt that there is a room for upside or upward revision. And it was with that in mind that we said we are taking a rather cautious view 3 months ago. Now after 3 months, for example, in Japan, compared to other regions, Some 3 months ago, some said that the business is weaker.
So it was based on that assumption that we put together our forecast 3 months ago. But looking at more recent results, The momentum that we started to see last year were confirmed to be continuing that is about Japan. But even in other regions, we see similar room for upward revision. So it is based on that that we made the upward revision to our forecast mainly on ASD. I can't single out any product or product area, but rather it is more generic condition, warranting an upside.
And hold on. Thank you for waiting. The other question that you asked, looking at the ASD profit, Upward revision and forecast. In the Q1, we recognized The impairment loss in relation to the equity method subsidiary, the affiliates. Other than that, there are no special factors to note.
Was that helpful? Yes. Thank you. Yes. Thank you.
I have a follow-up question About EDASCO shipments in April were the assumptions that were already included. Back in May, I think you said that you were taking a cautious view because you weren't sure if the shipments could be made or not. So could you clarify that? Regarding the EDAS scope, the root cause had been identified And we were able to work on the issue. It was a program issue.
And what took time was the documentation and other matters. So The shipment of EDASCO, I don't think I said it is uncertain whether we should make this shipment. Maybe there was miscommunication. That was true back in May. And also back in February, I don't think I said that there are uncertainties.
Regarding the actual timing of the shipment, There are various steps that we had to go through and therefore, we decided not to Disclosed that information very proactively. But from the mid to late July, the shipments were made. The schedule itself, although it was not included in communication with you, but It was in line nearly in line with the assumption that we used in our previous forecast. So the it's not just the timing of the EDA scope shipment that triggered the upward revision in the U. S.
I hope that explains. Yes. Thank you. Just one more clarification. About the SG and A expenses that increased in the Q1, could you give us a breakdown like What is the foreign exchange?
What is the sales and marketing? Are you asking me the Q1 or the full year? I mean, the Q1 results, about JPY 15,000,000,000 increase, I think. Yes, basically, the sales activities became more active due to the relaxation of restrictions. So overall expenses increased, especially compared to the same period of the previous year.
But the sales promotion and travel expenses Increased in a much smaller rate, that's a general review. Foreign exchange, about yen 4,000,000,000. The ForEx impact, yen 4,000,000,000 or so. And this is a quarterly event, so it's going to be very detailed. But As we've been saying, the IT related investment and the operational infrastructure enhancement.
And for the future benefit, we made various investments in preparation for the future amounting to JPY 4,000,000,000 to JPY 5,000,000,000 R and D expenses Also, Weng Top. So foreign exchange and some new initiatives related expenses, I think, would be the specific factors. I see. Thank you. So this time around, the ESD, So in terms of the bronchoscope, you have recaliby to TSD.
And then you have given us some information about that. So the year over year comparison is meaningless. So I would like to have a 2 years before the figures for March 2020. Some retrospective adjustments included. So compared to 2 years ago, How much is this going?
I would like to hear about that. So this year, the ESP and TSB for this year's forecast Compared to March 2020, how much is this is going to grow? So You is it so you're talking about ESP and TSB, how much it has grown compared to March 2020? So again, so to March 2020 figures, So official we have no official reclassification, but we have some managerial numbers that we So based on that internal number, so March 2020 compared to March 2020, ESD and TSD For in total, it's 5.8% for ESP. For TSB, 9.3% growth.
Thank you. So based on the information, I would like to continue our discussion. So in Page 7 of the presentation on the very bottom, you saw that ESD in Q1 compared to 2 years ago 9% growth. And if you look at the net base for TSD compared to 3 years ago, Q1 8% growth. So the growth of TSD compared to D is stronger for the Q1.
I think that was a bit of a surprise to me. So the number of procedures in line with that, the TSC's numbers will go up. So the capital intensive Compared to capital intensity, even compared to 3 years ago, it was a bit low. So can you give me the reason behind this? So the TST growth has been higher.
And Sorry, sorry, I just lost what the logic. So TSD, 9.3%. So these are ESD, 5.8%. So that's for the full year. For the Q1, TSD plus 9% and TSD plus 8%.
I think you have explained in that manner. So against the full year, I think the trend is reversed for the Q1. So the TSD's growth in the Q1 maybe is not as strong as you're expecting. So can you Give us the reason behind this. So would you hold on a bit?
We will discuss it. So let me come back to you afterwards. Understood. So as a follow-up question, so this is Page 2, under the top of the financial data number, page 2, the number of employees. In terms of TSB quarter on quarter, A few hundred people have declined.
So about 200 in overseas. So I think there was a substantial decline of the number of employees. So I think basically the system they have for the extra opportunities for the domestic employees. So the overseas The decline in employees, is it intentional? Is it going to continue to decline?
Let me confirm. Excuse me. So again, let me get back to you later. So maybe in the latter half of this presentation, I would like to get back to you about this. Understood.
Thank you. So my question is this. For the 1st quarter, GST, EST both very strong. Compared to your peers, you did extremely well And the profit margin improved. And the question is whether this is sustainable or not.
Your peers say that Maybe the it's going to end in the Q3 and others say that the Assurance push is going to wear out as well, not only in Japan, but China as well. Now, Q1 results because of the infection pandemic, I think lots of subsidies, lots So the deep pocket on the part of the hospitals. So what about Q2? What is your projection for Q2 compared to Q1? The question is whether the momentum that we saw in Q1 could be sustained in Q2, Q3, Q4, in other words, on a full year basis.
I think that's your question. We do have the guidance for the full year. But simply put, Multiply by 4 or larger is the full year forecast that we have compared to the Q1. Since the latter half of last fiscal year, we are seeing the year on year improvement continuing especially with the less impact of COVID-nineteen. In other words, the procedures increasing in number and also the budget being implemented for the capital products.
So these are the favorable factors within Olympus. As I briefly mentioned in my presentation, It's not the type of product that will generate a big sales with 1 unit, but The new launches that we've made in recent years are making sales contribution. So in light of all those factors, we believe that This momentum will be maintained to a certain extent. And the revised guidance, We believe that, that revenue forecast would be achieved. I hope that answers your question.
Yes. Thank you. A follow-up question. Japan, China and North America, EVIS, Axione and Sera, The high price tag products, is it the case that the Hospital demand for those high priced products is increasing. Your question was kind of choppy, But I take it that you are suspecting that there is a stronger demand for high end, high price tag products.
Yes, because they have the budget for that. That's my question. Thank you for your clarification. I can't speak on behalf of the customers, but our products basically compared to our competition We have added value. We have differentiated features, which I think is resulting in what you described.
I think that's a valid view. Thank you. That's very helpful. Thank you for taking my question. So in terms of the TSB, the 1st quarter profitability has been quite high.
So how What has been the highest contributor to the high profitability of TSD? Excuse me, I think this is about the connection. I just assuming that you're asking this question for the TSB, this quarter's Operating profitability has been quite high, and you're asking the major reasons behind this. I assume that, that was your question. So first of all, so as extraordinary factor in this quarter, in this TSD segment.
It has been one major factor here. So we have Acquired a company called Meditate. And with this, so there is a 2,800,000,000 of gains from a phase acquisition gain. So Meditate, before we acquired them, we had 18% to 19% of equity in Meditate. So through this transaction, It means that our equity holdings in Meditate has been accounted for new value And the gains from accounting methodology, it has to be categorized as other gains.
And because of this 2,800,000,000 of gains in this Q1 has been accounted for, for the TSD segment. That was the one major plus factor. But even putting this aside, in terms of the numbers, compared to the past, We have been able to achieve a high level of margin. And I think this is a combination of various factors. Well, in a nutshell, through the top line growth and the cost and expenses.
We have strictly controlled spending. I think that summarizes the whole situation. That's all for me. Thank you. So a follow-up question.
So from the Q2 onwards, When you look at the margins, there may be some deposit factors, negative factors, some risks that you have reflected. Can you talk about that? So the Q1, I think basically you said that The gains coming from the higher utilization in the Q2 onwards, how this is going to come out? Can you follow-up on this point as well? So I think your question is asking about whether there are further or any factors that you have to account for, for TSB going forward.
So in this forecast in our forecast, This phase, the acquisition gains, those type of major factors are not reflected. And I think this can be said overall for our business. But towards Q4, there is a trend that the expense is increase even in TSB. But when we come to the end of the year and close the books, This will so we basically, we will be looking operating quarter by quarter so that we can achieve work. One question.
Let's focus on China. Looking at the supplementary material, Page 4, On a local currency basis, the region by region results for ESP China, 1st quarter, 8% increase year on year TSD plus 1%. And so I get the impression this is rather low. So ESD, TSD, why is it so low is the question. For example, for ESD, There are policies to enhance endoscopy.
So prior to COVID, 20%, 30% Revenue increase was achieved. And in the Q4 of last fiscal year, you had a similar fear, but in Q1, it went down again. Now 1% growth for TSD. This is rather low when we think of the increase in procedures. So can you talk about the reason why the revenue growth for ESP and CMC in China is kept at single digit.
Thank you for your question. For China, the impact of COVID-nineteen was felt ahead of other regions. And I wouldn't say it was results, but improvement Our recovery was observed ahead of other regions as well. So there is a like a timing gap between China and other regions. So relatively speaking, for Q1, the growth rate appears to be low.
That's the big picture. For this year, Certainly speaking. Compared to other regions, the growth rate It's lower. Still, Certain growth is expected. You talked about government policies And they're not having major impact on our business.
And this is nothing new. It's been talked about for some time. For example, concentrated procurement by China policy. These are being promoted in China. And so regarding TST, it is considered as part of the risk Hector.
But we don't take a view that they are having a major impact on the figures. We have from ESD Kawano san and Kuramoto san from GSD. So maybe they can make some additional comments. Kawano from ESD. Thank you for your question.
Q1 results for China, you're correct. Single digit growth. The market itself is not Slowing down significantly? No. The biggest factor is the Buy China policy.
As a guidance, it was issued announced in May. And so the budget execution is slightly slowing down. That's what happened during the Q1. So once the budget execution resumes, we believe that we will again see the double digit growth. That is the answer that I can provide.
Thank you. This is Kuramoto from GESD. I also would like to add comments regarding China. Like ESD, The Bai China policy is having an impact, especially the bronchoscope, which has a high profit margin within GST. In particular regarding RPE, there was special demand last year that we enjoyed in relation to COVID-nineteen.
But because it was brought under control earlier than others in China and therefore that procurement amount declined somewhat year on year. On the other hand, in some parts of China. There's still the COVID-nineteen infection and so procurement is still active. So there So there are some uncertainties and we believe that is one of the reasons why the growth rate is kept at single digit. I say thank you.
I have a follow-up question. The Bai China policy that have been mentioned several times, For ESP and TSP, you seeing the local players gaining the market share winning the market share from you. And I think you have made the upward revision to both ESP and TSD on a full year basis on a company wide basis. And I'm wondering whether China is one factor for the revision. Thank you for your question.
Regarding ESD, by China is the guideline by the national government. But depending on some provinces, whether to honor that or not, Whether to implement that immediately or not, they're all different, which is complicating the situation. In terms of the ESP product For endoscopes, of course, they are Chinese manufacturers of endoscopes, but the doctors prefer Japanese brands, including Olympus. So we don't expect much impact. But the surgical imaging, there are many local products.
So going forward, we expect competition. But again, situation varies from province to province And also depending on the price category, the situations vary as to the quota that is being imposed on by China. So we are dealing on a province by province basis. So overall, in accordance with the upward revision, we are asking our Chinese business people to make efforts to ask to increase their sales as well. And For GSV, similar trend, so no additional information.
Understood. Thank you. That's all for me. Thank you. So I entered the conference in the midst, so maybe some person asked the same question.
So this is a very simple question. So it is the NTSC. And thank you very much for discussing having these sub segments shown. This is very useful because you don't know what's happening in each of these businesses. So in terms of the DI endoscope, maybe I wasn't listening to what was explained.
So it's going to recover. That's okay. So 9% of growth compared to March 2020 seems to be quite strong. So by is there a difference by region? Can you give me some color on that?
Thank you for your question. Well, actually, a similar question was asked. So we are looking into this. So please hold on. Well, actually, I will get back to you later.
So is that okay with you about this question? So if you have another question, maybe we can answer that first. Okay. So the second question is that for urology, it seems to have grown a lot. So inside this, for instance, cystoscopes, those electrodes, resection electrodes In terms of the urine stones, I think maybe BPH will be higher.
So with I guess, vitrosopy as well. So If it be pH increases, I think the margin levels would be quite high. So I think they assume that this is contributing to your improvement of the margin. In terms of the esoter space, you have shown this here. So what has been the driver of the improvement of the neurology.
So in terms of we have these lithospies and electrodes and we have like lithospo Quick piece and these are growing. So within royalty, these 2 stand out as contributors. So which is the high contributors or in terms of the value? We are not disclosing about that, but The reason why GSD is improving, the major reasons are the to virology, BPH and Stone Management. So SALT, I don't have that out there.
So in terms of Turing laser, it's the number 1 in the world. So structurally, I think hypothetically or periodically, it has a high benefit. But And it's strange. I still find it very interesting that it's selling a lot already. So in terms of the TRIM laser, is it is that itself aid benefit, although we do always have some clinical data about that.
Can you elaborate on that point? So today, from TSD, you have Kuramoto. And from ESD, Kawano, the top of the year. Each of the businesses are here with us. Kuramoto san will explain.
So yes, this is Kuramoto speaking. As you have pointed out, so the growth driver for BPH, so the plasma electrodes as the major contributor. The reason behind this is that due to COVID-nineteen, in terms of this, Basically, these procedures, I think, with this kind of have been held back. And then it has restarted. And I think that has contributed to a high growth.
In terms of the size, BPH plus 1, it shows, is the major contributor. And so, Sultiv, The doctors seems to highly appreciate this and gradually the sales is going up. And in terms of consumables margins are good, and we are expecting further growth. And actually, the 3 laser, so in the stones, it can Make them into small pieces, very small pieces. So for instance, shorter treatment time, blocking the view, so that has been the benefit of this product.
So yes, the SALTIF, So it is a laser that absorbs the water wavelength. So I think the evidence is very, very visible because people So that's looking at endoscope, and they can actually see that the stones are more finer. And I think in that sense, that is already your competitive edge. Yes. That's what we think.
So the TRIM laser, you have developed TRIM laser, is it it's only you, right? I think so you are collaborating with a laser company to develop this, meaning that other companies will not be able to Yes, that's correct. So, well, Kotai san, you asked a similar question with another person with another person's question, similar to another question. So we are this is homework for us. So let us get back to you later and let us move on.
I have a very similar question to the question asked by Nishimura san, a very rudimentary question. I have to apologize. But the profitability, I think, has been about 18% since the Q3 of last fiscal year, excluding the special factors. So 2018, 2019, The sales were around yen 210,000,000,000 and operating margin was 12%. For this time, To exclude the restatement, JPY 250,000,000,000 no JPY 230,000,000,000 Sales revenue, so 18% since the latter half of last career.
Is that sustainable is the first part of my question. And increase from 12% to 18%, is it because of revenue increase and Transport Olympus initiative effect in others. But if you Look at those different factors, how much coming from what? Thank you for your question. First, whether this is sustainable or not?
I'm afraid I have to repeat what I said earlier. If you look at the full year guidance, that should be the answer to your question. Generally speaking, there is a special factor amounting to yen 2,800,000,000 yen but excluding that, it fits within the figure mentioned. So the answer simply would be yes, it is sustainable. Now in my Response earlier to the question, there's something that I forgot to mention.
The bronchoscope respiratory System scope is included. And that's, To a certain extent, it's contributing to improved profitability. But in any event, the answer to your question would be yes. So compared to maybe 2 years ago, even on the pre restatement basis, maybe 6% improvement. Can you break those into different sectors?
No, just 2 or 3 years ago, compared to 2 or 3 years ago, improvement of 5% to 6%. Can you give us factors. Yes. If we could go back the history, the write off of the intangible asset related to Gyrus. And that being behind us, The profit margin is improving.
That's one special factor that I can point to. I see. Thank you. Sorry for asking that stupid question. So I take it that Within the supplement that you disclosed, the profit margin is or the profitability is improving.
And TSD overall is seeing an improvement in profitability. And I was wondering if you could give us the factors behind that. Yes, revenue increase and the COGS ratio improvement. And as mentioned earlier, we have a very strict cost control measures being implemented. So those factors combined or improving the profitability is all I can say.
Got it. Thank you. So the full year operating profit, how I should think about it? So 16.9% is the new outlook And the Q1 is 14% level. In terms of progress, I think it's just 20% against the full year.
So going forward, the Is there any quarter? The results it's not a quarter that the top line is going to go up. So this 200,000,000,000 yen so multiply by 4,000,000,000 yen 800,000,000,000 plus. And Is there a quarter that the margin is going to go up substantially? So In terms of the how the expense is going to come out by each quarter is different.
So from the following three quarters, so that maybe that is one of the reasons that the margin will be different quarter by quarter. Maybe to high level, maybe a lot more details. So in terms of the so in the Q1, So you have this phase, some acquisition profit, but I think basically have these extraordinary factors, but on that basis So for the extraordinary gains, a plus or minus, so are there any other Factors that will push up the operating profit in the remaining 9 months. So there are no major factors that will push up the operating profit according to our plan currently. So in the remaining 9 months Go ahead.
So in the remaining 9 months, so the extraordinary losses We'll contribute rather than that, the actual core operating profit will improve. And as a result, The 16.9 percent of operating margin will be achieved. That is what you're saying. Yes. So There are some individual factors that I can point out.
But overall, in the following 9 months in the up until the SG and A line will be seeing improvements. Thank you. So one follow-up question. So at the beginning of the year, the U. S.
Growth, You're not if we're not forecasting that strong growth. So after the Q1 closed, have you changed your outlook about the U. S. A? Well, basically, there has been no new events.
Our outlook has not changed about the United States. So the assumptions, the market You have it has not changed from your initial outlook. Yes, that's true. In terms of the endoscope business, maybe some upside. But fundamentally, no changes.
This year, I think this year will be the market that we will struggle the most because Maso san has explained about that previously because of new products. Unfortunately, this year, we cannot launch new products here. So we have to do with the existing products. And of course, in terms of scope, there are some new products. But In terms of the sales coming from these new scopes, We'll be striving to achieve the targets for the U.
S. Understood. Thank you. You said that the market situation hasn't changed much, but in terms of the number of procedures, I have a question. In urology, I think there was a pent up demand.
So in Q1, in what subsegment did you observe the pent up demand? And what was the size of that impact? For example, in the U. S, Da Vinci, their earnings report say that in Q2, There's still pent up demand. So What is your view regarding this pent up demand for Q2?
We apologize, but We had some technical communication issue. Maybe it is our problem, but we only got 40% of your question, 60%, the connection was choppy. So if you could Just summarize your question, we'd appreciate it. The ASD and TSD, In what sub segment did you see the impact of the pent up demand relative to the number of procedures? That's my first question.
And also regarding Q2, if you expect pent up demand, And do you expect this to continue into Q2 is my question? Thank you. Kawada from ESD. Let me take up the question relative to ESD. In ASD, as you're aware, basically, it's the capital business.
So the number of procedures, The number the decrease in number of procedures don't directly impact our business, of course. The budgets of the hospital, whether it will be executed or not might be impacted depending on the number of procedures because the fewer procedures meaning less income. So it's going to be only indirect impact. And we don't expect the recovery to be 100% prior to the pre COVID-nineteen and maybe another several months or even a year before the number to recover to the pre COVID level. But situation varies from country to country.
In some countries, they are already back in the pre COVID-nineteen state and others know. So we are looking at each country on a specific basis. Koremoto from TST. Let me also answer. In terms of subsegments, as mentioned earlier, As for the elective procedures, urology and the GI and respiratory, The devices related to this have that tendency.
But in terms of number of units, as was mentioned earlier, the situation varies from country to country. And also the delta strain And that infection is really getting serious globally. So there still is uncertainty what the situation is going to be going forward. Thank you. I have a follow-up question.
In ESD, for surgical endoscopy, you're not seeing an impact of pent up demand because in some of the hospital facilities, expecting a recovery from COVID-nineteen, We hear the orders being placed for capital products ahead. So I was wondering if that's the case with you also. And also by region, as of the end of this fiscal year, What is the level of the COVID brought under control? What is the assumption that you have for different regions? Thank you for your question.
The first part of your question, the surgical imaging, It's a capital product. So what I mentioned earlier applies. When the number of procedures We cover then the budget at the hospitals, the facilities would see their income go up. Of course, in some of the hospitals, they are placing orders ahead of others. We do see that, But on a limited level, the general trend is unless the income on the part of the hospitals go up, The orders would not be placed, so be it GI or surgical endoscopes, the situation would be the same.
The second part of the question For FY 'twenty two, as of the end of March FY 'twenty two, To what extent do we expect the COVID situation to be brought under control? Well, that's really hard to say. We are doing what needs to be done. And we do have the figures The best assumption, best case assumption. And we're expecting, we're hoping that situation will turn out to be better COVID-nineteen wise, and that is the basis of our assumption.
Understood. Thank you. So this is about ESG, and I would like to ask Kawano san to respond. So by each client from the Q2 onwards. In terms of how the sales is going to grow, meaning that the I mean by the market outlook and the new product acceptance situation or you guys don't have new products.
So I think there's conventional products sold well even before new products were released. So can you give us some color, qualitative information about that? So Hoya, In terms of the semiconductor procurement, the endoscope processors supply, There is a risk. As Hoya has explained about that situation. What is about Olympus about how do you take this situation?
Yes. Thank you for assigning me. So I'm calling from ESP. I will answer your question. So broadly speaking, so EVX 1 is the very kind of regions that use that and do not use that in terms of Europe, Japan and Asia in some Asia countries.
When I say some Asian countries like Hong Kong, India, National Grid Acha is going to introduce and Australia is going to use this. So about 75% in Asia, X1 can be introduced. And Takeda has I'm talking about the issue of EDOF has been resolved and the shipment has been resumed. So Japan, Europe and Asia for these markets, As we include in the EDOSCOPE, the EVS X1 cell is going to proceed as planned. So in these three regions, as I see overall, we hope that these will be drivers.
And then about the business. For the United States, the X1 introduction will be 2020 March 2023. So this fiscal year, we'll be struggling, to be frank. And other agents are using this. I think the U.
S. Doctors are aware of And they're holding back of buying the product. And I think that's one risk. But to offset that, So in terms of the IF2 system, So for the PCF, that is the colonoscope. And for the TCF-one hundred and ninety, That is the diodesoscope.
So by selling these two products, we are hoping that we can offset this holding back of the procurement for the year. So all your every lead, we have introduced that. So utilizing these type of products, we want to boost the figures in the U. S. In China, the market once the market recovers, then the market Sales will increase as well, so we want to ride the tide, so to speak.
However, X1, I think it will take some time to introduce that to the Chinese market. So if it's Lucila's list of the conventional model, we would like to sell this model into China. And we would like by doing so, we will plan to maintain the ability to grow of sales that we have been able to have. Of course, there is a COVID-nineteen risk. But as a challenging number, this will be a target, but we are determined that we want to grow in China as well.
Thank you. So a follow-up question, if I may. You asked about your semiconductor issue. Yes, please do so. So currently, in terms of the supply of semiconductors, that is a huge challenge globally.
And our procurement division is doing their best to procure the components and parts. And currently, In terms of this year's sales, there will be no impact in terms of the bottleneck of supply. We are not going well, there is a risk, of course, but I think basically, we'll be able to achieve our targets without any burden of expense of supply. And everyone in that company doing best to avoid this current situation. One follow-up question from me.
So ESD and GSD, so in terms of how you manage these divisions in your Maybe it's difficult to answer. So under this current organization system, so ESP and DSP have co heads. So there are Kawasan, Kuromoto san, who basically focus on Japan or and there's some heads that focus on These markets, we have the co head structure. So you have Japanese heads and we have 2 people who I assume are foreign people. So in terms of ESP and TST, how does the division of roles work?
Because you have co heads. And when you manage these divisions, Are there any things that you are looking at or take care of? So as far as I can answer, I would like to so this is Kanfoi We have Frank Duboski, this is German, and we are the co heads, myself and Frank, and we are managing the business. And actually, with Frank, I have more than 20 years of relationship with him. So I think I met him first in 1999 and various businesses in this company.
I have been working with him very closely. So there's no I think this cohort system, is it uncomfortable at all? So in terms initially, I thought that maybe we should divide the role. But well, in any case, you said that decided that this we too should look over the business. But we have a strength different strength.
So naturally, without any Explicitly, there is a kind of division of growth. So Frank will look at this side and I will look at this side. So it's a kind of a natural division of growth. So I think there is no kind of debate in terms of who is going to preside over what. And I think this COVID system is working very smoothly.
Thank you very much for asking. So, Kuramoto san, what's your take on TSB? So this is Kuramoto from TSB. Yes. So Gabriela is a co head, and she is in the United States.
And we are managing the division. So I have Worked in the U. S. For a long period of time in terms of the U. S.
Market, in terms of the business, therapeutic solution business, market conditions. I understand that fully. So it was Gabriela. I feel quite comfortable working with her. So I work for Japan, and I think we can leverage that as a benefit.
So in terms of the TESP, we have the manufacturer site in Aomori. In terms of the bronchoscope, it's in Aizu. So this development and the manufacturing sites are communicating closely. I may be the right person to look over that because I physically work here. So we divide our responsibility that way.
So it's only 3 months plus that we have been working this way. But I think we have been able to smoothly operate this business. And one well, aside from your question that you asked, so from my side, I answered about the TRIM laser. Sorry, I gave you some misinformation. So I said that it's we, Olympics, is the only company, but actually, there's one company in Europe.
Quantum Fiber Dust, is it? Quantum Fiber Dust, they produce a trim laser. But we were ahead in North America. We are the only company that provides a trim later. So because we have this sales capability and we are ahead of this technology, we want to to monetize this market.
So correction, if you may. So the in TSD, The business development, GSD, that is mainly led by the United States. That's a follow-up. Yes. In the U.
S, there are new technologies and new movements as they come out ahead in the United States. So business development more or less is led by the United States. Thank you. Sakurai from IR. I would like to respond to the earlier questions.
Koichi san from UBS and Koichi san from Nomura asked the question about ESD TSD results compared to FY 2020. We don't have enough data to answer that question. And also a question from Koi Iguisa about the and number of employees for TSTEST. We would like to get back to you on that Later, maybe by next Wednesday, we'd like to sponsor. We will be uploading the Q and A from this earnings briefing on our web page.
So Please refer to that QA document that we'll be uploading for the answers, please, if we don't have the sufficient information to answer your questions. Looks like there are no further questions, and therefore, we will end the Q and A session here. So with this, we conclude the conference call of Lindtus Corporation. Thank you very much for attending this conference call.