開示日時：2022/02/04 15:00:00
損益
| 決算期 | 売上高 | 営業益 | 経常益 | EPS |
| 2018.03 | 78,649,700 | 8,107,600 | 8,107,600 | 41.69 |
| 2019.03 | 79,386,200 | 2,767,800 | 2,767,800 | 5.96 |
| 2020.03 | 79,741,100 | 8,298,400 | 8,298,400 | 39.36 |
| 2021.03 | 73,054,400 | 8,139,000 | 8,139,000 | 10.04 |
※金額の単位は［万円］
株価
| 前日終値 | 50日平均 | 200日平均 | 実績PER | 予想PER |
| 2,392.0 | 2,539.94 | 2,366.15 | 30.28 | 23.65 |
※金額の単位は［円］
キャッシュフロー
| 決算期 | フリーCF | 営業CF |
| 2018.03 | 3,173,700 | 9,514,600 |
| 2019.03 | 547,700 | 6,694,300 |
| 2020.03 | 6,761,500 | 13,354,400 |
| 2021.03 | 6,489,500 | 12,412,200 |
※金額の単位は［万円］
▼テキスト箇所の抽出
Consolidated Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 February 4, 2022 Company Name: Olympus Corporation Code Number: 7733 (URL: https://www.olympus.co.jp/) Stock Exchange Listing: First Section of Tokyo Stock Exchange Representative: Yasuo Takeuchi, Director, Representative Executive Officer, President and CEO Contact: Takayuki Aoyagi, Vice President, Accounting Department Phone: 03-3340-2111 Scheduled date to submit the Quarterly Securities Report: Scheduled date to commence dividend payments: Presentation of supplementary material on quarterly financial results: Yes Holding of quarterly financial results presentation meeting: February 4, 2022 – Yes (for analysts and institutional investors) (Figures are rounded off to the nearest million yen) 1. Consolidated Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022(From April 1, 2021 to December 31, 2021)(1) Consolidated Results of Operations (cumulative)(% indicate changes from the same period of the previous fiscal year)Revenue Operating profit Profit before tax Nine months ended December 31, 2021 December 31, 2020 (¥ million) 629,757 513,584 % 22.6 (8.5) (¥ million) 108,910 64,734 % 68.2 (23.6) (¥ million) 103,635 61,918 % 67.4 (23.1) Profit (¥ million) 87,849 1,645 % – (97.2) Profit attributable to owners of parent (¥ million) 87,667 1,624 Total comprehensive income Basic earnings per share Diluted earnings per share Nine months ended December 31, 2021 December 31, 2020 (¥) 68.16 1.26 Note: The Imaging Business has been classified as a discontinued operation from the second quarter of the fiscal year ended March 31, 2021. Due to this, for the nine months ended December 31, 2020, the amounts presented for revenue, operating profit and profit before tax are the amounts from continuing operations from which the discontinued operation has been excluded. The amounts presented for profit and profit attributable to owners of parent are aggregates of continuing operations and discontinued operations. (¥ million) 101,950 (3,247) (¥) 68.19 1.26 % – (97.3) % – – (2) Consolidated Financial PositionTotal assets Total equity Equity attributable to owners of parent Ratio of equity attributable to owners of parent to total assets (¥ million) 1,292,967 1,183,453 (¥ million) 480,294 395,480 (¥ million) 479,146 394,326 % 37.1 33.3 As of December 31, 2021 March 31, 2021 2. DividendsFirst quarter Second quarter Third quarter Year-end Total Annual dividends (¥) – – (¥) 12.00 (¥) 12.00 14.00 14.00 (¥) – Fiscal year ended March 31, 2021 Fiscal year ending March 31, 2022 Fiscal year ending March 31, 2022 (Forecast) Note: Revisions of the forecast most recently announced: No – (¥) 0.00 0.00 3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2022 (From April 1, 2021 to March 31, 2022) (% indicate changes from the same period of the previous fiscal year) Revenue Operating profit Profit before tax Profit attributable to owners of parent (¥ million) 862,000 % 18.0 (¥ million) 144,000 % 75.6 (¥ million) 139,000 % 81.0 (¥ million) 109,000 % 743.8 Full year Note: Revisions of the forecast most recently announced: Yes * Notes (1) Changes in significant subsidiaries during the nine months under review (changes in specified subsidiaries resulting in the changes in scope of consolidation): No Basic earnings per share (¥) 84.96 (2) Changes in accounting policies and changes in accounting estimates 1) Changes in accounting policies required by IFRS: No 2) Changes in accounting policies due to other reasons: No 3) Changes in accounting estimates: No (3) Total number of issued shares (common stock) 1) Total number of issued shares at the end of the period (including treasury shares) 2) Total number of treasury shares at the end of the period As of December 31, 2021 As of March 31, 2021 As of December 31, 2021 As of March 31, 2021 Nine months ended December 31, 2021 Nine months ended December 31, 2020 1,299,294,333 shares 1,370,914,963 shares 14,342,456 shares 85,279,921 shares 1,285,570,532 shares 1,285,599,237 shares 3) Average number of shares during the period (cumulative from the beginning of the fiscal year) * Quarterly financial results reports are exempt from quarterly reviews conducted by certified public accountants or an audit corporation. * Proper use of the forecast of financial results, and other special matters (Caution concerning forward-looking statements) The forward-looking statements, including forecast of financial results, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Accordingly, the Company cannot make promises to achieve such forecasts. Actual business and other results may differ substantially due to various factors. Please refer to the section of “Explanation of Forecast of Consolidated Financial Results and Other Forward-looking Statements” on page 7 of the attached material for the conditions that form the assumptions for the forecast and cautions concerning the use thereof. Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022Attached Material Contents 1. Qualitative Information Regarding Settlement of Accounts for the Nine Months ………………………………… 2 (1) Explanation of Results of Operations ………………………………………………………………………………………… 2 (2) Financial Position …………………………………………………………………………………………………………………… 6 (3) Cash Flows ……………………………………………………………………………………………………………………………. 7 (4) Explanation of Forecast of Consolidated Financial Results and Other Forward-looking Statements ….. 7 2. Condensed Quarterly Consolidated Financial Statements and Significant Notes Thereto ……………………… 8 (1) Condensed Quarterly Consolidated Statements of Financial Position ……………………………………………. 8 (2) Condensed Quarterly Consolidated Statements of Profit or Loss ………………………………………………… 10 (3) Condensed Quarterly Consolidated Statements of Comprehensive Income ………………………………….. 11 (4) Condensed Quarterly Consolidated Statements of Changes in Equity ………………………………………….. 12 (5) Condensed Quarterly Consolidated Statements of Cash Flows …………………………………………………… 13 (6) Notes to Condensed Quarterly Consolidated Financial Statements ……………………………………………… 15 (Notes on premise of going concern) ………………………………………………………………………………………. 15 (Reporting entity) …………………………………………………………………………………………………………………. 15 (Basis of preparation) ……………………………………………………………………………………………………………. 15 (Significant accounting policies) …………………………………………………………………………………………….. 15 (Significant accounting estimates and associated judgments) ……………………………………………………… 15 (Segment information) ………………………………………………………………………………………………………….. 16 (Bonds and borrowings) ………………………………………………………………………………………………………… 17 (Per-share data)…………………………………………………………………………………………………………………….. 18 (Business combinations) ………………………………………………………………………………………………………… 21 (Equity and other equity items) ………………………………………………………………………………………………. 31 (Cash flow information) ………………………………………………………………………………………………………… 32 (Discontinued operations) ……………………………………………………………………………………………………… 33 (Additional information) ……………………………………………………………………………………………………….. 34 (Important subsequent events) ………………………………………………………………………………………………… 37 1 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 1. Qualitative Information Regarding Settlement of Accounts for the Nine Months (1) Explanation of Results of Operations Trends in overall business results The global economy saw signs of recovery in the nine months ended December 31, 2021, as the challenging conditions created by the global spread of the novel coronavirus disease (COVID-19) gradually eased. Although vaccinations are progressing and economic activities are recovering, highly uncertain conditions continue including trends of renewed spread in certain regions. The spread of COVID-19 has also affected the supply chains of certain countries and regions, and both the spread of COVID-19 and trade friction between the United States and China have led to a global semiconductor shortage and surging resource prices. The Japanese economy saw a similar recovery as the global economy, as the challenging conditions caused by COVID-19 were easing. Even under such circumstances, the Olympus Group are promoting initiatives toward sustainable growth according to its business transformation plan “Transform Olympus” announced in January 2019, aiming to develop itself as a truly global medtech company, and the medium- and long-term management strategy announced in November 2019 based on “Transform Olympus.” Business results Business results of continuing operations are presented in (1) to (7), and business results of the sum of continuing and discontinued operations are presented in (8) below. Due to the transfer of the Imaging Business to OJ Holdings, Ltd., a special purpose company established by Japan Industrial Partners, Inc. in the previous fiscal year, the profit (loss) of the Imaging Business is presented in discontinued operations. Nine months ended December 31, 2020 Nine months ended December 31, 2021 Increase (Decrease) (Millions of yen) Increase (Decrease) ratio (%) (8,583) (9,310) (727) (1) Revenue (2) Cost of sales (3) Selling, general and administrative expenses (4) Share of profit (loss) of investments accounted for using equity method/Other income/Other expenses (5) Operating profit (6) Finance income (loss) (7) Income taxes (8) Profit attributable to owners of parent Exchange rate (Yen/U.S. dollar) Exchange rate (Yen/Euro) Exchange rate (Yen/Renminbi) (1) Revenue 513,584 190,090 250,177 64,734 (2,816) 7,986 1,624 106.11 122.38 15.44 629,757 217,918 293,619 108,910 (5,275) 15,786 87,667 111.10 130.62 17.25 116,173 27,828 43,442 44,176 (2,459) 7,800 86,043 4.99 8.24 1.81 22.6 14.6 17.4 68.2 97.7 – – – – – – Revenue increased by ¥116,173 million year on year to ¥629,757 million. This increase was due to an increase in revenue in all business of the Endoscopic Solutions Business, Therapeutic Solutions Business, Scientific Solutions Business and other businesses. Details are as described in “Analysis of the performance by segment” below. (2) Cost of sales Cost of sales increased by ¥27,828 million year on year to ¥217,918 million. The cost-to-sales ratio improved 2.4 percentage points year on year to 34.6%. In the previous fiscal year, factory utilization rates have declined as a result of reduced production volume because of the impact of COVID-19. Furthermore, approximately ¥5,800 million in expenses were recorded associated with the voluntary recall of bronchoscopes and 2 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 cholangioscopes in both the Therapeutic Solutions Business and the Endoscopic Solutions Business. On the other hand, sales increased and operating capacity improved in the current period, leading to improvement in the cost-to-sales ratio. (3) Selling, general and administrative expenses Selling, general and administrative expenses increased by ¥43,442 million year on year to ¥293,619 million. In the previous fiscal year, the spread of COVID-19 led to restrictions mainly on sales activities, which caused a decline in travel and transportation expenses, advertising and promotion expenses, etc. However, in the current period, the easing of restrictions mainly on sales activities that is accompanying the spread of COVID-19 led to an increase in expenses such as outsourcing expenses and personnel expenses. (4) Share of profit (loss) of investments accounted for using equity method/Other income/Other expenses The sum of share of profit (loss) of investments accounted for using equity method, other income, and other expenses amounted to a loss of ¥9,310 million, and the profit or loss deteriorated by ¥727 million year on year. Other income increased due to factors such as recording of approximately ¥2,800 million in gain on step acquisition associated with the acquisition of Medi-Tate Ltd. and approximately ¥1,400 million in gain on sale of fixed assets. Details on the gain on step acquisition of Medi-Tate Ltd. are as described in the note (page 27) related to (Business combinations). On the other hand, other expenses increased due to factors such as the recording of approximately ¥4,100 million in expenses associated with the spin-off from the Scientific Solutions Business, approximately ¥1,600 million in impairment losses on development assets in the Endoscopic Solutions Business, and an increase of approximately ¥1,400 million in costs related to the promotion of the business transformation plan “Transform Olympus,” compared with the recording of approximately ¥5,300 million in expenses associated with the establishment and transfer of a new company due to the divestiture from the Imaging Business in the previous fiscal year. (5) Operating profit (6) Finance income (loss) (7) Income taxes operations) Reflecting the factors stated above, operating profit increased by ¥44,176 million year on year to ¥108,910 million. Finance loss, which reflects finance income and finance costs, deteriorated ¥2,459 million year on year to ¥5,275 million. The deterioration in finance loss was due mainly to the increase of foreign exchange losses. The increased profit before tax led income taxes to increase by ¥7,800 million year on year to ¥15,786 million. (8) Profit attributable to owners of parent (the aggregate of continuing operations and discontinued In addition to the factors stated above, profit attributable to owners of parent increased by ¥86,043 million year on year to ¥87,667 million due to loss of discontinued operations recorded in the previous fiscal year. (Impact of foreign exchanges rates) Compared to the same period of the previous fiscal year, the yen depreciated against the U.S. dollar, euro, and renminbi. The average exchange rate during the current period was ¥111.1 against the U.S. dollar (¥106.11 in the same period of the previous fiscal year), ¥130.62 against the euro (¥122.38 in the same period of the previous fiscal year) and ¥17.25 against the renminbi (¥15.44 in the same period of the previous fiscal year), which caused revenue and operating profit to increase by ¥35,210 million and ¥6,799 million, respectively, year on year. 3 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 Analysis of the performance by segment In the first quarter ended June 30, 2021, to strengthen business in the respiratory field, we transferred bronchoscopes from the Endoscopic Solutions Business to the Therapeutic Solutions Business. Segment information for the nine months ended December 31, 2020, has been reclassified and restated based on the new reporting segment classifications. Endoscopic Solutions Business Nine months ended December 31, 2020 Nine months ended December 31, 2021 276,679 73,918 333,701 91,600 Increase (Decrease) (Millions of yen) Increase (Decrease) ratio (%) 57,022 17,682 20.6 23.9 Revenue Operating profit (loss) Consolidated revenue in the Endoscopic Solutions Business amounted to ¥333,701 million (up 20.6% year on year), while operating profit amounted to ¥91,600 million (up 23.9% year on year). The gastrointestinal endoscopes field recovered from the impact of COVID-19 to show positive year-on-year growth in all regions, and in particular, sales in North America and Japan rose. By product, sales of the new “EVIS X1” series were strong, while demand for the prior-generation upper and lower gastrointestinal scopes was also firm, contributing to increased sales. The ratio of the “EVIS X1” series to total sales also gradually increased. In the surgical endoscopes field, recovery from the effects of COVID-19 resulted in positive year-on-year growth. Especially, sales increased in North America and Europe, where sales of the surgical endoscopy system “VISERA ELITE II” were strong. In the medical services field, all regions showed positive year-on-year growth due to stable sales of existing service contracts including maintenance services, an increase in new contracts, and an increase in the number of repairs from the recovery in the effects of COVID-19. Operating profit in the Endoscopic Solutions Business recorded an impairment loss of approximately ¥1,600 million on development assets in the Endoscopic Solutions Business but increased due mainly to a large increase in revenue with the recovery from the effects of COVID-19. Therapeutic Solutions Business Revenue Operating profit (loss) Nine months ended December 31, 2020 Nine months ended December 31, 2021 163,952 23,167 203,714 43,845 Increase (Decrease) 39,762 20,678 (Millions of yen) Increase (Decrease) ratio (%) 24.3 89.3 Consolidated revenue in the Therapeutic Solutions Business amounted to ¥203,714 million (up 24.3% year on year), while operating profit amounted to ¥43,845 million (up 89.3% year on year). In the GI-endotherapy field, the number of procedures is on a trend of recovery, and all regions and product groups saw positive growth. In particular, sales in Europe and North America, where the number of procedures has been increasing, were favorable amid socioeconomic activities returning to normal as vaccinations progressed. Furthermore, sales increased due to the sampling of biopsy forceps, etc., which are used for collecting tissue for screening examinations, product groups for ERCP (Endoscopic Retrograde Cholangio Pancreatography), which are used in endoscopic diagnoses and treatment of pancreatic duct, bile duct, etc., and product groups for ESD (Endoscopic Submucosal Dissection) and EMR (Endoscopic Mucosal Resection), which are used in lesion resection. The urology field saw significant positive growth, particularly in North America and Europe, where the number of procedures has been recovering. In particular, the expansion of sales of resection electrodes for BPH (Benign Prostatic Hyperplasia) and lithotripsy machine for kidney stones “SOLTIVE SuperPulsed” Laser System was successful as sales in North America, where the number of procedures has been recovering toward levels prior to the spread of COVID-19, were favorable. 4 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 The respiratory field saw progressive recovery from the impact of COVID-19, experiencing large growth centered on North America. The sale of Veran Medical Technologies, Inc., which became a subsidiary in December 2020, contributed to increased revenue, and sales of the devices, bronchoscopes, etc. mainly used for EBUS-TBNA (Endobronchial Ultrasound-guided Transbronchial Needle Aspiration) were favorable. In other therapeutic areas, sales were favorable in rhinology/otology, energy devices and gynecology. In particular, sales of endoscopes for ENT and “THUNDERBEAT” contributed. Operating profit in the Therapeutic Solutions Business increased significantly. In the previous fiscal year, approximately ¥5,600 million in expenses were recorded associated with the voluntary recall of bronchoscopes in the Therapeutic Solutions Business. However, the recovery from the effects of COVID-19 in the current period led to a large increase in revenue, and a gain of approximately ¥2,800 million was recorded related to the step acquisition of Medi-Tate Ltd. Details on the gain on step acquisition of Medi-Tate Ltd. are as described in the note (page 27) related to (Business combinations). Scientific Solutions Business Revenue Operating profit (loss) Nine months ended December 31, 2020 Nine months ended December 31, 2021 66,941 2,956 82,854 11,361 Increase (Decrease) 15,913 8,405 (Millions of yen) Increase (Decrease) ratio (%) 23.8 284.3 Consolidated revenue in Scientific Solutions Business amounted to ¥82,854 million (up 23.8% year on year), while operating profit amounted to ¥11,361 million (up 284.3% year on year). In the life science field, recovery from the effects of COVID-19 resulted in positive year-on-year growth. Contributing factors included the progress of budget deployment at research institutes and universities and the expansion of sales of biological microscopes in Asia Pacific and North America, whose market environment is seeing remarkable recovery, due to the relaxation of restrictions on sales activities. For the industrial field, in the wake of the overall recovery in market conditions, the capital investment situation of customers improved, and all fields showed positive year-on-year growth. Especially in China, industrial microscopes performed well due to the brisk market for 5G-related electronic components and semiconductors, and in North America, non-destructive testing equipment, whose market is expected to recover, also contributed to the increase in sales. Operating profit in the Scientific Solutions Business significantly increased due to a significant increase in revenue as a result of the recovery from the effects of COVID-19. 5 Others Revenue Operating profit (loss) Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 Nine months ended December 31, 2020 Nine months ended December 31, 2021 Increase (Decrease) (Millions of yen) Increase (Decrease) ratio (%) 6,012 (1,531) 9,488 (1,488) 3,476 43 57.8 – In other businesses, the Olympus Group conducts R&D and exploratory activities for new businesses in addition to engaging in development, manufacturing, and sales of biomedical materials, such as synthetic bone filler, and orthopedic equipment. Consolidated revenue in other businesses amounted to ¥9,488 million (up 57.8% year on year), while operating loss amounted to ¥1,488 million (compared with an operating loss of ¥1,531 million in the same period of the previous fiscal year). Revenue significantly increased supported by revenue of approximately ¥3,200 million from FH ORTHO SAS, which became a subsidiary in November 2020. Operating loss for other businesses was flat due to the increase of expenses related to FH ORTHO SAS, despite increased revenue. (2) Financial Position In the nine months ended December 31, 2021, the Olympus Group retroactively adjusted the consolidated statements of financial position as of the end of the previous fiscal year due to the adjustment of the fair value of assets acquired and liabilities assumed of Veran Medical Technologies, Inc. and Quest Photonic Devices B.V., which were acquired in December 2020 and February 2021, respectively. Details regarding this retroactive adjustment are as described in the note (pages 29 to 30) related to (Business combinations). [Assets] [Equity] As of the end of the third quarter under review, total assets increased by ¥109,514 million compared to the end of the previous fiscal year to ¥1,292,967 million. This was mainly because cash and cash equivalents increased by ¥57,612 million due mainly to the issuance of foreign bonds, goodwill increased by ¥27,258 million due mainly to the impact of the acquisition of Medi-Tate Ltd., and intangible assets increased by ¥11,517 million.[Liabilities] Total liabilities increased by ¥24,700 million from the end of the previous fiscal year to ¥812,673 million. This was mainly because bonds and borrowings increased from the issuance of foreign bonds and income taxes payable increased by ¥11,176 million, even though trade and other payables decreased by ¥15,783 million mainly due to a decrease in trade payable and a decrease in other payable as a result of the payment of a special additional payment associated with implementing the career support for external opportunity. Total equity increased by ¥84,814 million from the end of the previous fiscal year to ¥480,294 million. This was mainly due to recording profit attributable to owners of parent of ¥87,667 million while paying dividends from retained earnings. At the meeting of the Board of Directors held on May 7, 2021, the Company resolved the cancellation of treasury shares as provided for under Article 178 of the Companies Act and concluded the disposal on June 4, 2021. The impact of this cancellation is that treasury shares decreased by ¥82,340 million (contraction of negative stated amount in equity), and capital surplus decreased by ¥82,340 million. The amount of the above cancellation was deducted from other capital surplus in capital surplus, but the amount that exceeds other capital surplus was deducted from retained earnings. As a result of the foregoing, equity attributable to owners of parent to total assets increased from 33.3% as of the end of the previous fiscal year to 37.1%. 6 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 (3) Cash Flows Cash and cash equivalents at the end of the third quarter under review reached ¥275,090 million, an increase of ¥57,612 million from the end of the previous fiscal year. The following are the cash flows for the nine months ended December 31, 2021. Cash flows from operating activities Net cash provided by operating activities for the nine months ended December 31, 2021 was ¥115,256 million (compared with ¥89,022 million provided for the nine months ended December 31, 2020). This was mainly due to the recording of ¥103,635 million in profit before tax due to strong sales, and adjustment for depreciation and amortization of ¥47,993 million, despite an increase in inventories of ¥6,802 million and a decrease in trade and other payables of ¥12,815 million, which includes the payment of ¥11,181 million for a special additional payment associated with implementing the career support for external opportunity. Cash flows from investing activities Net cash used in investing activities for the nine months ended December 31, 2021 was ¥57,124 million (compared with ¥115,010 million used for the nine months ended December 31, 2020). The main factor is ¥21,587 million for payments for the acquisition of Medi-Tate Ltd. In addition, uses of cash included purchase of property, plant and equipment, such as manufacturing equipment, of ¥29,956 million and purchase of intangible assets, such as R&D assets, of ¥16,717 million. Cash flows from financing activities Net cash used in financing activities for the nine months ended December 31, 2021 was ¥9,313 million (compared with ¥51,971 million provided for the nine months ended December 31, 2020). This was due mainly to ¥56,161 million procured from the issuance of foreign bonds, despite payments of ¥5,356 million for repayments of short-term borrowings, ¥15,006 million for repayments of long-term borrowing, payment for purchase of treasury stock of ¥1,801 million and an increase in deposits for the purchase of treasury stock of ¥13,199 million, in addition to the payment of ¥15,428 million for dividends. (4) Explanation of Forecast of Consolidated Financial Results and Other Forward-looking Statements The forecast of consolidated financial results for the fiscal year ending March 31, 2022 has been revised from the forecast announced in the “Consolidated Financial Results for the Six Months of the Fiscal Year Ending March 31, 2022,” which was released on November 5, 2021. Although the results for the first nine months ended December 31, 2021 were generally in line with the assumptions made in the previous forecast, the Company has revised upward its forecast for net sales due to the weaker yen against foreign currencies compared to the previous forecast. However, the forecasts for operating profit, profit before tax, and net income have been left unchanged due to the expected increase in expenses. Foreign exchange rates for the fiscal year ending March 31, 2022, which are a precondition for the forecast, are expected to be ¥112.08 per U.S. dollar, ¥130.47 per euro and ¥17.44 per renminbi. Revenue Operating profit Profit before tax Previous Forecast (A) Revised Forecast (B) Increase (Decrease) (B-A) Increase (Decrease) ratio (%) 856,000 862,000 6,000 0.7 144,000 144,000 0 0.0 Profit attributable to owners of parent 109,000 109,000 0 0.0 139,000 139,000 0 0.0 (Millions of yen) Basic earnings per share ¥84.78 ¥84.96 – – 7 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 2. Condensed Quarterly Consolidated Financial Statements and Significant Notes Thereto (1) Condensed Quarterly Consolidated Statements of Financial Position (Millions of yen) As of March 31, 2021 As of December 31, 2021 ASSETS Current assets Cash and cash equivalents Trade and other receivables Other financial assets Inventories Income taxes receivable Other current assets Subtotal Assets held for sale Total current assets Non-current assets Property, plant and equipment Goodwill Intangible assets Retirement benefit asset Investments accounted for using equity method Trade and other receivables Other financial assets Deferred tax assets Other non-current assets Total non-current assets Total assets 217,478 157,920 10,268 158,895 10,425 24,970 579,956 117 580,073 239,166 127,384 104,810 22,677 3,128 24,577 23,350 56,720 1,568 603,380 1,183,453 275,090 161,334 21,505 166,958 6,136 26,308 657,331 – 657,331 238,194 154,642 116,327 22,848 1,499 24,843 14,221 61,284 1,778 635,636 1,292,967 8 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 (Millions of yen) As of March 31, 2021 As of December 31, 2021 LIABILITIES AND EQUITY Liabilities Current liabilities Trade and other payables Bonds and borrowings Other financial liabilities Income taxes payable Provisions Other current liabilities Total current liabilities Non-current liabilities Bonds and borrowings Other financial liabilities Retirement benefit liability Provisions Deferred tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities Equity Share capital Capital surplus Treasury shares Other components of equity Retained earnings Total equity attributable to owners of parent Non-controlling interests Total equity Total liabilities and equity 69,870 31,529 21,873 10,736 33,412 160,971 328,391 323,735 60,197 42,446 5,676 13,103 14,425 459,582 787,973 124,643 90,835 (98,048) (1,347) 278,243 394,326 1,154 395,480 1,183,453 54,087 51,582 25,334 21,912 29,835 150,537 333,287 341,518 57,917 43,098 5,961 13,214 17,678 479,386 812,673 124,643 91,058 (17,454) 9,748 271,151 479,146 1,148 480,294 1,292,967 9 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 (2) Condensed Quarterly Consolidated Statements of Profit or Loss Nine months ended December 31, 2020 Nine months ended December 31, 2021 (Millions of yen) Continuing operations Revenue Cost of sales Gross profit Selling, general and administrative expenses Share of profit (loss) of investments accounted for using equity method Other income Other expenses Operating profit Finance income Finance costs Profit before tax Income taxes Profit from continuing operations Discontinued operations Loss from discontinued operations Profit Profit attributable to: Owners of parent Non-controlling interests Profit Earnings per share Basic earnings (loss) per share Continuing operations Discontinued operations Basic earnings per share Diluted earnings (loss) per share Continuing operations Discontinued operations Diluted earnings per share 513,584 190,090 323,494 250,177 207 4,251 13,041 64,734 836 3,652 61,918 7,986 53,932 (52,287) 1,645 1,624 21 1,645 41.93 (40.67) 1.26 41.91 (40.65) 1.26 629,757 217,918 411,839 293,619 577 8,228 18,115 108,910 973 6,248 103,635 15,786 87,849 – 87,849 87,667 182 87,849 68.19 – 68.19 68.16 – 68.16 10 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 (3) Condensed Quarterly Consolidated Statements of Comprehensive Income Nine months ended December 31, 2020 Nine months ended December 31, 2021 (Millions of yen) Profit Other comprehensive income Items that will not be reclassified to profit or loss Financial assets measured at fair value through other comprehensive income Remeasurements of defined benefit plans Total of items that will not be reclassified to profit or loss Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations Cash flow hedges Share of other comprehensive income of associates accounted for using equity method Total of items that may be reclassified to profit or loss Total other comprehensive income Comprehensive income Comprehensive income attributable to: Owners of parent Non-controlling interests Comprehensive income 1,645 3,051 (7,098) (4,047) (872) 129 (102) (845) (4,892) (3,247) (3,268) 21 (3,247) 87,849 (619) (166) (785) 15,000 (265) 151 14,886 14,101 101,950 101,768 182 101,950 11 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 (4) Condensed Quarterly Consolidated Statements of Changes in Equity Nine months ended December 31, 2020 Equity attributable to owners of parent (Millions of yen) Share capital Capital surplus Treasury shares Other components of equity Retained earnings Total Non-controlling interests Total equity Other components of equity related to disposal group held for sale Balance at April 1, 2020 124,643 91,157 (98,135) (22,751) – 275,833 370,747 1,211 371,958 1,624 1,624 21 1,645 (4,892) (4,892) Comprehensive income – – – 1,624 (3,268) 21 (3,247) Purchase of treasury shares Disposal of treasury shares (29) (12,856) (12,856) (170) (13,026) 5,865 (5,865) 122 31 (1) 0 153 – – – 93 59 5,790 (18,721) (12,704) (170) (12,874) 124,643 91,250 (98,076) (21,853) 258,736 354,775 1,062 355,837 – – – – – – 75 75 75 – – – – – (1) 29 – – – – – – 6 (4,892) (4,892) (75) – – – – – – 4 – – – (1) 0 153 – – – – – – – – – 4 – – – Nine months ended December 31, 2021 Equity attributable to owners of parent Share capital Capital surplus Treasury shares Other components of equity Retained earnings Total Balance at April 1, 2021 124,643 90,835 (98,048) (1,347) 278,243 394,326 (Millions of yen) Non-controlling interests 1,154 182 Total equity 395,480 87,849 14,101 – 87,667 87,667 14,101 14,101 14,101 87,667 101,768 182 101,950 (1,802) (1,802) (15,428) (15,428) (188) (15,616) (1,802) 50 (46) (82,340) 82,340 82,337 (82,337) (3,006) 3,006 272 – 278 278 223 80,594 (3,006) (94,759) (16,948) (188) (17,136) 124,643 91,058 (17,454) 9,748 271,151 479,146 1,148 480,294 Profit Other comprehensive income Dividends from surplus Transfer from other components of equity to retained earnings Share-based payment transactions Transfer to other components of equity related to disposal group held for sale Total transactions with owners Balance at December 31, 2020 Profit Other comprehensive income Comprehensive income Purchase of treasury shares Disposal of treasury shares Cancellation of treasury shares Dividends from surplus Transfer from retained earnings to capital surplus Transfer from other components of equity to retained earnings Share-based payment transactions Total transactions with owners Balance at December 31, 2021 – – – – – – – – – – – 12 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 (5) Condensed Quarterly Consolidated Statements of Cash Flows Nine months ended December 31, 2020 Nine months ended December 31, 2021 (Millions of yen) Cash flows from operating activities Profit before tax Profit (loss) before tax from discontinued operations Depreciation and amortization Loss (gain) on step acquisitions Interest and dividend income Interest expenses Loss on sale of Imaging Business Share of loss (profit) of investments accounted for using equity method Decrease (increase) in trade and other receivables Decrease (increase) in inventories Increase (decrease) in trade and other payables Increase (decrease) in retirement benefit liability Decrease (increase) in retirement benefit asset Increase (decrease) in provisions Other Subtotal Interest received Dividends received Interest paid Income taxes paid Net cash provided by operating activities Cash flows from investing activities Payments into time deposits Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Purchase of intangible assets Payments for loans receivable Collection of loans receivable Proceeds from sales of investments Purchase of investments in associates Payments for acquisition of subsidiaries Proceeds from sale of subsidiaries Proceeds from sale of businesses Other Net cash used in investing activities 61,918 (52,083) 44,491 – (865) 3,050 44,656 (207) 15,114 (2,179) (10,582) 1,896 (2,739) 8,136 644 111,250 530 335 (2,448) (20,645) 89,022 (40,004) (26,976) 1,540 (14,261) (451) 696 3,543 (1,078) (40,075) – 2,122 (66) (115,010) 103,635 – 47,993 (2,826) (860) 3,031 – (577) (343) (6,802) (12,815) 271 (281) (3,633) (4,542) 122,251 699 161 (2,492) (5,363) 115,256 – (29,956) 2,178 (16,717) (129) 889 7,747 – (21,587) 724 – (273) (57,124) 13 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 Nine months ended December 31, 2020 Nine months ended December 31, 2021 (Millions of yen) Cash flows from financing activities Net increase (decrease) in short-term borrowings and commercial papers Repayments of lease liabilities Proceeds from issuance of bonds Proceeds from long-term borrowings Repayments of long-term borrowings Dividends paid Dividends paid to non-controlling interests Payments for purchase of treasury shares Change in deposits due to the purchase of treasury shares Other Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period (71,968) (12,096) 49,757 99,180 – (12,856) (170) (1) – 125 51,971 (1,014) 24,969 162,717 187,686 (5,356) (12,801) 56,161 – (15,006) (15,428) (188) (1,801) (13,199) (1,695) (9,313) 8,793 57,612 217,478 275,090 14 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 (6) Notes to Condensed Quarterly Consolidated Financial Statements (Notes on premise of going concern) No items to report (Reporting entity) Olympus Corporation (hereinafter, the “Company”) is a joint stock company located in Japan. The address of its registered head office is Hachioji-shi, Tokyo. The Company’s condensed quarterly consolidated financial statements comprise the Company and its subsidiaries (hereinafter, the “Olympus Group”) and interests in the Company’s associates. The Olympus Group is principally engaged in the manufacturing and sales of endoscopic, therapeutic, scientific and other products. Details of each business are as described in Note “(Segment information)” on page 16. (Basis of preparation) (1) Statement of the condensed quarterly consolidated financial statements’ compliance with IFRS The condensed quarterly consolidated financial statements of the Olympus Group have been prepared in accordance with IAS 34. Since the requirements for a “Specified Company of Designated International Accounting Standards” set forth in Article 1-2 of the “Regulation on Terminology, Forms, and Preparation Methods of Quarterly Consolidated Financial Statements” are satisfied, the Olympus Group adopts the provisions of Article 93 of the same Regulation. The condensed quarterly consolidated financial statements do not include all the information and disclosures required in the annual consolidated financial statements and should be used in conjunction with the Olympus Group’s annual consolidated financial statements as of March 31, 2021. These condensed quarterly consolidated financial statements were approved by Director, Representative Executive Officer, President and CEO Yasuo Takeuchi, and Executive Officer and CFO Chikashi Takeda on February 4, 2022. (2) Basis of measurement The Olympus Group’s condensed quarterly consolidated financial statements have been prepared on an acquisition cost basis, except for specific financial instruments measured at fair value. (3) Functional currency and presentation currency The Olympus Group’s condensed quarterly consolidated financial statements are presented in Japanese yen, which is also the Company’s functional currency, and figures are rounded off to the nearest million yen. (Significant accounting policies) The significant accounting policies adopted for the condensed quarterly consolidated financial statements of the Olympus Group for the nine months ended December 31, 2021 are the same as those applied for the fiscal year ended March 31, 2021. (Significant accounting estimates and associated judgments) In preparing IFRS-based consolidated financial statements, the management is required to make judgments, estimates and assumptions that affect the adoption of accounting policies and the amounts of assets, liabilities, revenues and expenses. Actual results may differ from such estimates. The estimates and underlying assumptions are reviewed on an ongoing basis and the effect is recognized in the period in which the estimates are revised and in future periods. The details of significant accounting estimates and associated judgments in the condensed quarterly consolidated financial statements are unchanged from the contents described in the consolidated financial statements for the previous fiscal year. Although the impact of the spread of COVID-19 differs by region, the impact is currently expected to continue diminishing overall as vaccinations become available worldwide, and we have assumed that the Company’s sales activities will also begin to normalize. 15 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 (Segment information) (1) Overview of reportable segments The reportable segments of the Olympus Group are the units for which separate financial information is available and according to which reporting is periodically conducted to decide how to allocate management resources and assess business performance. The Olympus Group has established strategies and engages in business activities for the products and services based on four segments: “Endoscopic Solutions,” “Therapeutic Solutions,” “Scientific Solutions,” and “Others.” Reportable segments are determined in line with these segments. From the three months ended June 30, 2021, bronchoscopes, which were previously included in the Endoscopic Solutions segment, were transferred to the Therapeutic Solutions segment, for the purpose of strengthening business in the respiratory area. Therefore, segment information for the nine months ended December 31, 2020, has been reclassified and restated based on the new reporting segment classifications. Due to the transfer of the Imaging Business to OJ Holdings, Ltd., a special purpose company established by Japan Industrial Partners, Inc. in the previous fiscal year, the profit (loss) of the Imaging Business is presented in discontinued operations. For details on discontinued operations, please see Note “(Discontinued operations)” on page 33. The principal products and services of each reportable segment are as follows. Reportable Segment Principal products and services Endoscopic Solutions Business Gastrointestinal endoscopes, surgical endoscopes, medical service Therapeutic Solutions Business Gastroenterology devices, urology products, respiratory products, energy devices, ENT products, gynecology products Scientific Solutions Business Biological microscopes, industrial microscopes, industrial endoscopes, non-destructive testing equipment, X-ray fluorescence (XRF) analyzer Others Biomedical materials, orthopedic equipment (2) Revenue and business results for reportable segments Revenue and business results of each reportable segment of the Olympus Group are as follows. The accounting treatment used for reportable segments is as described in Note “(Significant accounting policies)” on page 15. Nine months ended December 31, 2020 Reportable Segment Endoscopic Solutions Therapeutic Solutions Scientific Solutions Others Total (Millions of yen) Amount on condensed quarterly consolidated financial statements Adjustment (Note 2) Revenue 276,679 163,952 66,941 6,012 513,584 – 513,584 – – 166 170 (170) – 276,679 73,918 163,952 23,167 66,945 2,956 6,178 (1,531) 513,754 98,510 (170) 513,584 (33,776) 64,734 Revenue from outside customers Intersegment revenue (Note 1) Total revenue Operating profit (loss) Finance income Finance costs Profit before tax Other items Share of profit (loss) of investments accounted for using equity method Depreciation and amortization Impairment losses Notes: 4 – – 242 (35) 65 401 1. Revenue among segments is based on actual market prices. 16 – 521 – 207 466 – – 836 3,652 61,918 207 466 21,933 10,497 5,480 38,431 5,685 44,116 Revenue from outside customers Intersegment revenue (Note 1) Total revenue Operating profit (loss) Finance income Finance costs Profit before tax Other items Share of profit (loss) of investments accounted for using equity method Depreciation and amortization Impairment losses Notes: (Bonds and borrowings) (1) Bonds Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 2. Adjustment for operating profit (loss) is corporate expenses that mainly consist of elimination of transactions among segments, as well as general and administrative expenses and fundamental research expenses that are not attributable to reportable segments. Nine months ended December 31, 2021 Reportable Segment Endoscopic Solutions Therapeutic Solutions Scientific Solutions Others Total Revenue 333,701 203,714 82,854 9,488 629,757 – 629,757 (Millions of yen) Amount on condensed quarterly consolidated financial statements Adjustment (Note 2) (316) (316) (36,408) – – 629,757 108,910 973 6,248 103,635 577 4,654 47,993 862 3,177 – – 25 291 316 333,701 91,600 203,714 43,845 82,879 11,361 9,779 (1,488) 630,073 145,318 624 (47) 24,840 1,898 12,438 5,204 417 – – – 857 – 577 43,339 2,315 1. Revenue among segments is based on actual market prices. 2. Adjustment for operating profit (loss) is corporate expenses that mainly consist of elimination of transactions among segments, as well as general and administrative expenses and fundamental research expenses that are not attributable to reportable segments. During the nine months ended December 31, 2020, the Company issued the 26th unsecured corporate bonds of ¥25,000 million (interest rate 0.25%, due July 18, 2025) and the 27th unsecured corporate bonds of ¥25,000 million (interest rate 0.47%, due July 19, 2030) in view of the impact the spread of COVID-19 on financial results, as business funds and long-term working capital. During the nine months ended December 31, 2021, in order to promote diversification of funds procurement methods, the Company issued US dollar-denominated straight corporate bonds of US$500 million (interest rate of 2.143%, due December 8, 2026) as business funds. (2) Borrowings During the nine months ended December 31, 2020, in view of the impact the spread of COVID-19 on financial results, the Company procured borrowings (loans) as business funds and long-term working capital of: ¥50,000 million (interest rate 0.32% (fixed rate), due April 30, 2025), ¥40,000 million (variable interest rate (based on TIBOR + spread), due May 31, 2024), and ¥10,000 million (variable interest rate (based on TIBOR + spread), due May 15, 2024). There were no significant transactions during the nine months ended December 31, 2021. 17 ¥68.19 ¥– ¥68.19 ¥68.16 ¥– ¥68.16 ¥19.66 ¥– ¥19.66 ¥19.65 ¥– ¥19.65 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 (Per-share data) (1) Basic earnings per share and diluted earnings per share Nine months ended December 31, 2020 (April 1, 2020 – December 31, 2020) Nine months ended December 31, 2021 (April 1, 2021 – December 31, 2021) Third quarter ended December 31, 2020 (October 1, 2020 – December 31, 2020) Third quarter ended December 31, 2021 (October 1, 2021 – December 31, 2021) Basic earnings (loss) per share Continuing operations Discontinued operations Basic earnings per share Diluted earnings (loss) per share Continuing operations Discontinued operations Diluted earnings per share Basic earnings (loss) per share Continuing operations Discontinued operations Basic earnings per share Diluted earnings (loss) per share Continuing operations Discontinued operations Diluted earnings per share ¥41.93 ¥(40.67) ¥1.26 ¥41.91 ¥(40.65) ¥1.26 ¥21.82 ¥(2.90) ¥18.92 ¥21.81 ¥(2.90) ¥18.91 18 The weighted average number of shares of common stock used to calculate basic earnings per share and diluted earnings per share Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 (2) The basis for calculating basic earnings per share and diluted earnings per share Nine months ended December 31, 2020 (April 1, 2020 – December 31, 2020) Nine months ended December 31, 2021 (April 1, 2021 – December 31, 2021) (Millions of yen) Profit (loss) used to calculate basic earnings per share and diluted earnings per share Profit attributable to owners of parent Profit not attributable to common shareholders of parent Profit (loss) used to calculate basic earnings per share Continuing operations Discontinued operations Adjustment to profit Profit (loss) used to calculate diluted earnings per share Continuing operations Discontinued operations The weighted average number of shares of common stock Increase in number of shares of common stock Subscription rights to shares relating to stock options Common stock relating to subsequent grant-type restricted share-based remuneration Average number of shares of diluted common stock during the period 1,624 – 1,624 53,911 (52,287) – 1,624 53,911 (52,287) 87,667 – 87,667 87,667 – – 87,667 87,667 – 1,285,599 thousand shares 1,285,571 thousand shares 542 thousand shares 492 thousand shares 63 thousand shares 192 thousand shares 1,286,204 thousand shares 1,286,255 thousand shares 19 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 Third quarter ended December 31, 2020 (October 1, 2020 – December 31, 2020) Third quarter ended December 31, 2021 (October 1, 2021 – December 31, 2021) Profit (loss) used to calculate basic earnings per share and diluted earnings per share Profit attributable to owners of parent Profit not attributable to common shareholders of parent Profit (loss) used to calculate basic earnings per share Continuing operations Discontinued operations Adjustment to profit Profit (loss) used to calculate diluted earnings per share Continuing operations Discontinued operations The weighted average number of shares of common stock Increase in number of shares of common stock Subscription rights to shares relating to stock options Common stock relating to subsequent grant-type restricted share-based remuneration Average number of shares of diluted common stock during the period 24,326 – 24,326 28,059 (3,733) – 24,326 28,059 (3,733) 25,270 – 25,270 25,270 – – 25,270 25,270 – 1,285,614 thousand shares 1,285,424 thousand shares 538 thousand shares 479 thousand shares 94 thousand shares 236 thousand shares 1,286,246 thousand shares 1,286,139 thousand shares The weighted average number of shares of common stock used to calculate basic earnings per share and diluted earnings per share 20 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 (Business combinations) Nine months ended December 31, 2020 (April 1, 2020 – December 31, 2020) (Acquisition of Arc Medical Design Limited) (1) Outline of business combination 1) Name and description of acquired business Name of acquired business Description of business 2) Primary reason for business combination Arc Medical Design Limited (hereinafter “Arc Medical Design”) Development and manufacturing of auxiliary devices for diagnoses and treatment using gastrointestinal endoscopes To further strengthen the Company’s core competencies in early detection and minimally invasive therapies, beyond our proprietary development, by acquiring optimal partners, we are working to expand our lineup of devices to treat digestive disorders and to develop auxiliary devices for the diagnosis and treatment of colorectal cancer. Through this acquisition, the Company has obtained full rights to Arc Medical Design’s innovative medical products. The Company already has exclusive distribution rights in the European market for Arc Medical Design’s core product, ENDOCUFF VISION™, and will now be responsible for the design, manufacturing, sales, and business strategy of the entire ENDOCUFF product group. Through the acquisition of this product group, we will further contribute to reducing treatment costs and improving patients’ QOL. 3) Percentage of voting equity interest acquired 100% 4) Acquisition date August 7, 2020 5) How we obtained control of the acquiree Cash consideration for the acquisition of shares (2) Acquisition-related expense The acquisition-related expense of ¥67 million has been booked in “Selling, general and administrative expenses.” 21 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 (3) Fair value of consideration paid, assets acquired, and liabilities assumed as of the acquisition date (Millions of yen) Amount Fair value of consideration paid Cash Contingent consideration Total Fair value of assets acquired and liabilities assumed Cash and cash equivalents Property, plant and equipment Intangible assets Other assets Deferred tax liabilities Other liabilities Fair value of assets acquired and liabilities assumed, net Goodwill Total 3,472 488 3,960 79 0 1,296 5 (246) (74) 1,060 2,900 3,960 Based on the fair value of consideration paid on the acquisition date, we have allocated the assets acquired and liabilities assumed. Furthermore, the allocation of consideration paid has been completed in the previous fiscal year, and there is no material change in the amount from the initial provisional amount. Goodwill mainly represents a rational estimate of the expected future excess earning power. Furthermore, the amount of goodwill recognized does not include the amount that is expected to be deductible for tax purposes. (4) Contingent consideration The contingent consideration is the royalties paid over certain future period to former shareholders of Arc Medical Design for sales of Arc Medical Design’s products, and its fair value is calculated considering future sales forecasts and the time value of money. Furthermore, there is no limit on the amount of payment of the royalties. In terms of hierarchical level, the fair value of the contingent consideration is level three. The amount of change in fair value of the contingent consideration includes the recording of the part based on changes in the time value of money as “Financial costs” and the part based on changes other than the time value of money as “Other income” or “Other expenses.” (5) Impacts on the Olympus Group The Company omits making a description concerning profit and loss information of the said business combination on and after the acquisition date as well as profit and loss information under the assumption that the said business combination was conducted at the beginning of the fiscal year under review. This is because the amount of impact on condensed quarterly consolidated statements of profit or loss due to such information is not material. 22 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 (Acquisition of FH ORTHO SAS) (1) Outline of business combination 1) Name and description of acquired business Name of acquired business FH ORTHO SAS (hereinafter, “FH ORTHO”) Description of business Development, manufacturing, and sales of orthopedic equipment 2) Primary reason for business combination The Company has been developing an orthopedic business in Japan that manufactures and sells bone substitutes, high tibial osteotomy (HTO) plates, and other related products through its subsidiary Olympus Terumo Biomaterials Corporation. Furthermore, in order to support more precise and safer fragmentation and excision of bodily tissue (bone), the Company has developed the first ultrasound device indicated for arthroscopic surgery. Through this acquisition, the Company will enhance its portfolio of products, which are innovative and contribute to enhanced patients’ QOL, used in ligament reconstructive surgery, foot arthrodesis, trauma surgery, etc. Furthermore, in addition to developing the Company’s orthopedic surgery products through the global sales routes owned by FH ORTHO, by selling some of FH ORTHO’s core products in Japan, we will expand the Olympus Group’s sales channels and grow our business. By introducing more products and solutions that contribute to minimally invasive therapies and by expanding sales channels for them, the Company will further enhance its position as a global medtech company. 3) Percentage of voting equity interest acquired 100% 4) Acquisition date November 2, 2020 5) How we obtained control of the acquiree Cash consideration for the acquisition of shares (2) Acquisition-related expense The acquisition-related expense of ¥403 million has been booked in “Sales, general and administrative expenses.” 23 5,776 194 5,970 122 618 3,445 1,099 1,271 2,232 617 (727) (3,055) (460) (723) (206) (847) (356) 3,030 2,940 5,970 Olympus Corporation (7733) Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2022 (3) Fair value of consideration paid, assets acquired, and liabilities assumed as of the acquisition date (Millions of yen) Amount Fair value of consideration paid Cash Contingent consideration Total Fair value of assets acquired and liabilities assumed Cash and cash equivalents Trade and other receivables Inventories Other current assets Property, plant and equipment Intangible assets Deferred tax assets Trade and other payables Bonds and borrowings (current) Provisions Other current liabilities Retirement benefit liability Deferred tax liabilities Other non-current liabilities Fair value of assets acquired and liabilities assumed, net Goodwill Total Based on the fair value of consideration paid on the acquisition date, we have allocated the assets acquired and liabilities assumed. Furthermore, the allocation of consideration paid has been completed in the previous fiscal year, and the value of the assets and liabilities on the acquisition date have been revised from the initial provisional amounts. The major adjustments made comprise an increase in inventories of ¥1,251 million, an increase in intangible assets of ¥1,
