Olympus Corp.

Overview Key strengths Key risks Solid position in niche areas global medical device markets through differentiated core endoscope products Substantial reliance on endoscope-related businesses, which account for about 80% of consolidated EBITDA About 70% share of global gastrointestinal endoscope market thanks partly to ties with health care professionals Product lineup in mainstay therapeutic solutions business smaller than those of major overseas peers Continued market expansion for its focused endoscopic and therapeutic solutions amid a global push toward early diagnosis and minimally invasive therapies Significant time and cost required to enhance the overall quality assurance and regulatory affairs (QARA) structure to a sufficient level for global regulators Likelihood of debt to EBITDA remaining around 1x . A robust increase in sales

...QARA-related costs will continue to lower Olympus' profitability over the next one to two years, in our view. A robust increase in sales of its new endoscopes in North America will help improve profitability, in S&P Global Ratings' view. The company began to strengthen its QARA framework in fiscal 2023 (ended March 2024) in response to warning letters issued by the U.S. Food and Drug Administration (FDA) regarding quality control system at its factories, bringing Ñ31.5 billion of related costs that year. Such expenses are likely to reach Ñ32 billion in fiscal 2024...

Full Report