07.29.15
$4.8 Billion ($6.9B total)
KEY EXECUTIVES:
Yasuyuki Kimoto, Chairman
Hiroyuki Sasa, President & Representative Director
Akihiro Taguchi, President, Medical Group
Frank Drewalowski, Division Manager, Europe, Medical Group
Mitsuhiro Hikosaka, Division Manager, Asia/Oceania, Medical Group
Shinichi Nishigaki, President, Life Science & Industrial Group
Haruo Ogawa, President, Imaging Group
Karl Watanabe, President & Chief Financial Officer, Olympus America Inc.
Rick Harbuck, Group VP, Olympus America Inc.
Hidenao Tsuchiya, President, Scientific Equipment Group, Olympus Corporation of the Americas
Nacho Abia, Interim President, Medical Systems Group, Olympus Corporation of the Americas
NO. OF EMPLOYEES: 18,345 (30,702 total)
GLOBAL HEADQUARTERS: Tokyo, Japan.
Olympus Corp. Chairman Yasuyuki Kimoto’s job has become considerably more difficult with each passing
fiscal year.
When he was hired in April 2012, the company was in chaos, having been shaken to its core by deep-rooted fraud that left the medical equipment/camera maker in need of a capital infusion and at risk of delisting from the Tokyo Stock Exchange. Accused of concealing $1.68 billion in losses over more than a decade through inflated bank deposits and securities holdings, the company had lost both its integrity and professional credibility, as well as public trust.
Kimoto’s first order of business was relatively simple: Restore order. His plan for restoring stability was just as basic, too—cut production/operating costs and grow the company’s medical business through spending on research and development and capital equipment. Under the corporate banner “back to basics,” Kimoto proposed winnowing Olympus’ workforce by 2,700 within two years—equivalent to 7 percent of its global employee base—partly by significantly reducing its manufacturing footprint.
With the blessing of an all-new board (pre-scandal members were fired), Kimoto also revamped the company’s core market sectors into three distinct business units—medical, life science and imaging—and began grooming the medical division for a central role in the company’s long-term success. He set a FY15 sales goal of 570 billion yen, targeting a 25 percent share of the global operating room imaging market through the reinforcement of Olympus’ existing business in gastroenterology endoscopes and a “drastic” expansion of products designed for an aging world population as well as growing demand for minimally invasive surgery and techniques for early disease diagnosis.
Not too intricate a plan.
Kimoto’s relatively simple corporate life was short-lived, however. In his sophomore year at the helm, the former Sumitomo Mitsui Banking Corp. executive faced the more challenging tasks of setting a future course for Olympus’ governance systems, encouraging open communication among employees, and fine-tuning earnings growth plans to accommodate the evolving healthcare and imaging markets.
“We will boldly push forward with aggressive management, paving the road toward meeting the goals of the medium-term vision, and realizing the growth that waits beyond, with strategic measures to overcome the obstacles placed before us,” Olympus President/Representative Director Hiroyuki Sasa said in the company’s FY14 annual report. “Two years ago, Olympus was in a state of crisis on all fronts. The company suffered from issues with its corporate governance systems and its finances and performance were problematic with regard to its low equity ratio, poor balance sheet and lack of profitability. Today, I believe we are receiving fewer complaints with regard to our corporate governance systems...the Medical Business, which has been positioned as a major earnings driver, is making massive contributions to the overall performance of the Group.”
Massive indeed: Medical sales skyrocketed 25 percent to a record 492.3 billion yen ($4.79 billion) in fiscal 2014 (year ended March 31, 2014) and operating income soared 30 percent to 112.7 billion yen ($1.09 billion). Product proceeds achieved double-digit growth, with endoscopes and surgical/endotherapy revenue running about even, posting 25.2 percent and 24 percent increases, respectively, to reach 273.9 billion yen ($2.66 billion) and 218.3 billion yen ($2.12 billion).
Olympus executives attributed the stellar product gains to robust U.S. sales of the Evis Exera III, strong Japanese demand for the Evis Lucera Elite and solid support both domestically and overseas for the Visera Elite surgical platform. The Evis Exera portfolio features better endoscopic visualization through narrow band imaging, dual focus two-stage optical lens technology, and a wider angle field of view, and enhancements such as passive bending, high force transmission and variable stiffness that help improve patient discomfort and operator control during insertion. Likewise, the Visera Elite platform provides for improved surgical scope imaging across multiple specialties through HDTV imaging capability and advanced processing techniques.
Surgical system sales received a boost from a 3-D laparoscopy system launched in Japan, Europe and the United States as well as the Japanese launch of Olympus’ Thunderbeat electrosurgical device in the second half of fiscal 2014. Thunderbeat combines advanced bipolar and ultrasonic energies into a single multi-functional hand instrument that allows surgeons to simultaneously seal and cut vessels up to and including 7 millimeters in size with minimal thermal spread. Additionally, it boasts a fast cutting speed, delivers reliable vessel sealing, and provides high grasping forces at the tip.
Though it’s been well-received in Japan, the Thunderbeat device has yet to be fully accepted in the global market due to several factors, including contract limitations from pre-existing multiyear agreements between hospitals and competitors; physicians’ lack of familiarity with the new technology; and a shortage of compatible disposables to meet all of the needs for surgical applications using energy devices. Olympus executives are hoping to overcome these challenges through training and focusing sales efforts on the most appropriate accounts, customers and procedures. “We are enhancing the specialized sales force formed to approach group purchasing organizations and integrated delivery networks in the United States, one of Thunderbeat’s largest markets,” the FY14 report states.
The Japanese Thunderbeat launch was just one of several product debuts in FY14. Also making their commercial market premiere were the EU-ME2 endoscopic ultrasound center for endoscopic ultrasonography (designed specifically for the digestive and respiratory sectors), the BF-190 bronchoscopes (featuring a rotary function and wider tip angulation to help doctors access previously hard-to-reach areas), a forward-viewing curvilinear ultrasound gastrovideoscope (containing a shorter tip with wider angulation capabilities of 180 degrees up), and the Diego Elite Multibrider, an ENT system that offers both monopolar and bipolar energy blades for hemostasis—as well as traditional standard shaver blades—to providing specialists with an array of surgical options in one device. Applications for the Olympus Diego Elite include sinus surgery, polypectomy, tonsillectomy, adenoidectomy, inferior turbinate reduction, and laryngeal procedures. Olympus claims that procedures powered by the Diego Elite Multidebrider offer significantly shorter surgery times compared to those that use standard blades.
Olympus’ fiscal 2014 medical revenues were divided fairly evenly between Japan, North America and Europe, according to the annual report. North American revenues jumped 27.7 percent to 175.8 billion yen ($1.71 billion), while European proceeds increased 25 percent to 128.6 billion yen ($1.07 billion) and Japanese sales spiked 18.2 percent to 105.8 billion yen ($1.03 billion). Asia/Oceania reported the largest growth, at 28.3 percent.
Despite its success, the company’s Medical business was unable to prevent an overall 4 percent slide in consolidated net sales (to 713.3 billion yen, or $6.93 billion). Executives attributed the dropoff to the “transfer” of its Information & Communication Business to Japan Industrial Partners Inc. in September 2012 for 53 billion yen.
Overall operating income, however, doubled, reaching 73.4 billion yen ($714.3 million) and ordinary income climbed to 50.9 billion yen ($495 million), roughly four times the figure for fiscal 2013. Net income was dragged down by costs associated with the litigation and withdrawal from the biologics business, but it still exceeded the previous year’s level at 13.6 billion yen ($132.2 million).
KEY EXECUTIVES:
Yasuyuki Kimoto, Chairman
Hiroyuki Sasa, President & Representative Director
Akihiro Taguchi, President, Medical Group
Frank Drewalowski, Division Manager, Europe, Medical Group
Mitsuhiro Hikosaka, Division Manager, Asia/Oceania, Medical Group
Shinichi Nishigaki, President, Life Science & Industrial Group
Haruo Ogawa, President, Imaging Group
Karl Watanabe, President & Chief Financial Officer, Olympus America Inc.
Rick Harbuck, Group VP, Olympus America Inc.
Hidenao Tsuchiya, President, Scientific Equipment Group, Olympus Corporation of the Americas
Nacho Abia, Interim President, Medical Systems Group, Olympus Corporation of the Americas
NO. OF EMPLOYEES: 18,345 (30,702 total)
GLOBAL HEADQUARTERS: Tokyo, Japan.
Olympus Corp. Chairman Yasuyuki Kimoto’s job has become considerably more difficult with each passing
fiscal year.
When he was hired in April 2012, the company was in chaos, having been shaken to its core by deep-rooted fraud that left the medical equipment/camera maker in need of a capital infusion and at risk of delisting from the Tokyo Stock Exchange. Accused of concealing $1.68 billion in losses over more than a decade through inflated bank deposits and securities holdings, the company had lost both its integrity and professional credibility, as well as public trust.
Kimoto’s first order of business was relatively simple: Restore order. His plan for restoring stability was just as basic, too—cut production/operating costs and grow the company’s medical business through spending on research and development and capital equipment. Under the corporate banner “back to basics,” Kimoto proposed winnowing Olympus’ workforce by 2,700 within two years—equivalent to 7 percent of its global employee base—partly by significantly reducing its manufacturing footprint.
With the blessing of an all-new board (pre-scandal members were fired), Kimoto also revamped the company’s core market sectors into three distinct business units—medical, life science and imaging—and began grooming the medical division for a central role in the company’s long-term success. He set a FY15 sales goal of 570 billion yen, targeting a 25 percent share of the global operating room imaging market through the reinforcement of Olympus’ existing business in gastroenterology endoscopes and a “drastic” expansion of products designed for an aging world population as well as growing demand for minimally invasive surgery and techniques for early disease diagnosis.
Not too intricate a plan.
Kimoto’s relatively simple corporate life was short-lived, however. In his sophomore year at the helm, the former Sumitomo Mitsui Banking Corp. executive faced the more challenging tasks of setting a future course for Olympus’ governance systems, encouraging open communication among employees, and fine-tuning earnings growth plans to accommodate the evolving healthcare and imaging markets.
“We will boldly push forward with aggressive management, paving the road toward meeting the goals of the medium-term vision, and realizing the growth that waits beyond, with strategic measures to overcome the obstacles placed before us,” Olympus President/Representative Director Hiroyuki Sasa said in the company’s FY14 annual report. “Two years ago, Olympus was in a state of crisis on all fronts. The company suffered from issues with its corporate governance systems and its finances and performance were problematic with regard to its low equity ratio, poor balance sheet and lack of profitability. Today, I believe we are receiving fewer complaints with regard to our corporate governance systems...the Medical Business, which has been positioned as a major earnings driver, is making massive contributions to the overall performance of the Group.”
Massive indeed: Medical sales skyrocketed 25 percent to a record 492.3 billion yen ($4.79 billion) in fiscal 2014 (year ended March 31, 2014) and operating income soared 30 percent to 112.7 billion yen ($1.09 billion). Product proceeds achieved double-digit growth, with endoscopes and surgical/endotherapy revenue running about even, posting 25.2 percent and 24 percent increases, respectively, to reach 273.9 billion yen ($2.66 billion) and 218.3 billion yen ($2.12 billion).
Olympus executives attributed the stellar product gains to robust U.S. sales of the Evis Exera III, strong Japanese demand for the Evis Lucera Elite and solid support both domestically and overseas for the Visera Elite surgical platform. The Evis Exera portfolio features better endoscopic visualization through narrow band imaging, dual focus two-stage optical lens technology, and a wider angle field of view, and enhancements such as passive bending, high force transmission and variable stiffness that help improve patient discomfort and operator control during insertion. Likewise, the Visera Elite platform provides for improved surgical scope imaging across multiple specialties through HDTV imaging capability and advanced processing techniques.
Surgical system sales received a boost from a 3-D laparoscopy system launched in Japan, Europe and the United States as well as the Japanese launch of Olympus’ Thunderbeat electrosurgical device in the second half of fiscal 2014. Thunderbeat combines advanced bipolar and ultrasonic energies into a single multi-functional hand instrument that allows surgeons to simultaneously seal and cut vessels up to and including 7 millimeters in size with minimal thermal spread. Additionally, it boasts a fast cutting speed, delivers reliable vessel sealing, and provides high grasping forces at the tip.
Though it’s been well-received in Japan, the Thunderbeat device has yet to be fully accepted in the global market due to several factors, including contract limitations from pre-existing multiyear agreements between hospitals and competitors; physicians’ lack of familiarity with the new technology; and a shortage of compatible disposables to meet all of the needs for surgical applications using energy devices. Olympus executives are hoping to overcome these challenges through training and focusing sales efforts on the most appropriate accounts, customers and procedures. “We are enhancing the specialized sales force formed to approach group purchasing organizations and integrated delivery networks in the United States, one of Thunderbeat’s largest markets,” the FY14 report states.
The Japanese Thunderbeat launch was just one of several product debuts in FY14. Also making their commercial market premiere were the EU-ME2 endoscopic ultrasound center for endoscopic ultrasonography (designed specifically for the digestive and respiratory sectors), the BF-190 bronchoscopes (featuring a rotary function and wider tip angulation to help doctors access previously hard-to-reach areas), a forward-viewing curvilinear ultrasound gastrovideoscope (containing a shorter tip with wider angulation capabilities of 180 degrees up), and the Diego Elite Multibrider, an ENT system that offers both monopolar and bipolar energy blades for hemostasis—as well as traditional standard shaver blades—to providing specialists with an array of surgical options in one device. Applications for the Olympus Diego Elite include sinus surgery, polypectomy, tonsillectomy, adenoidectomy, inferior turbinate reduction, and laryngeal procedures. Olympus claims that procedures powered by the Diego Elite Multidebrider offer significantly shorter surgery times compared to those that use standard blades.
Olympus’ fiscal 2014 medical revenues were divided fairly evenly between Japan, North America and Europe, according to the annual report. North American revenues jumped 27.7 percent to 175.8 billion yen ($1.71 billion), while European proceeds increased 25 percent to 128.6 billion yen ($1.07 billion) and Japanese sales spiked 18.2 percent to 105.8 billion yen ($1.03 billion). Asia/Oceania reported the largest growth, at 28.3 percent.
Despite its success, the company’s Medical business was unable to prevent an overall 4 percent slide in consolidated net sales (to 713.3 billion yen, or $6.93 billion). Executives attributed the dropoff to the “transfer” of its Information & Communication Business to Japan Industrial Partners Inc. in September 2012 for 53 billion yen.
Overall operating income, however, doubled, reaching 73.4 billion yen ($714.3 million) and ordinary income climbed to 50.9 billion yen ($495 million), roughly four times the figure for fiscal 2013. Net income was dragged down by costs associated with the litigation and withdrawal from the biologics business, but it still exceeded the previous year’s level at 13.6 billion yen ($132.2 million).