This document has been translated from the Japanese original (as submitted to the Tokyo Stock Exchange) for reference purposes only. Olympus

Corporation assumes no responsibility for direct, indirect or any other forms of damages caused by misunderstanding from the translation.

Consolidated Financial Results

for the Three Months

of the Fiscal Year Ending March 31, 2021

August 5, 2020

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:

August 5, 2020

Scheduled date to commence dividend payments:

-

Presentation of supplementary material on quarterly financial results: Yes

Holding of quarterly financial results presentation meeting:

Yes (for analysts and institutional investors)

(Figures are rounded off to the nearest million yen)

1. Consolidated Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021 (From April 1, 2020 to June 30, 2020)

(1) Consolidated Results of Operations (cumulative)

(% indicate changes from the same period of the previous fiscal year)

Revenue

Operating profit

Profit before tax

Profit

Three months ended

(¥ million)

%

(¥ million)

%

(¥ million)

%

(¥ million)

%

June 30, 2020

142,403

(21.7)

1,190

(91.9)

209

(98.5)

(2,732)

-

June 30, 2019

181,885

0.7

14,736

-

13,607

-

8,643

-

Profit attributable to

Total comprehensive

Basic earnings per share

Diluted earnings per share

owners of parent

income

Three months ended

(¥ million)

%

(¥ million)

%

(¥)

(¥)

June 30, 2020

(2,736)

-

(9,840)

-

(2.13)

(2.13)

June 30, 2019

8,637

-

(773)

-

6.32

6.32

(2) Consolidated Financial Position

Equity attributable to

Ratio of equity attributable

Total assets

Total equity

to owners of parent

owners of parent

to total assets

As of

(¥ million)

(¥ million)

(¥ million)

%

June 30, 2020

1,099,081

361,955

360,910

32.8

March 31, 2020

1,015,663

371,958

370,747

36.5

2. Dividends

Annual dividends

First quarter

Second quarter

Third quarter

Year-end

Total

(¥)

(¥)

(¥)

(¥)

(¥)

Fiscal year ended

-

-

-

10.00

10.00

March 31, 2020

Fiscal year ending

-

March 31, 2021

Fiscal year ending

March 31, 2021

-

-

-

-

(Forecast)

Notes: 1. Revisions of the forecast most recently announced: No

2. The forecast dividend for the fiscal year ending March 31, 2021 is yet to be determined due to the difficulties of making a reasonable calculation of the forecast of financial results at the current point in time because of the impact of the spread of novel coronavirus disease (COVID-19).

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2021 (From April 1, 2020 to March 31, 2021)

The forecast of consolidated financial results for the fiscal year ending March 31, 2021 had not been determined at the current point in time due to the difficulties of making a reasonable calculation because of the impact of COVID-19. We intend to promptly disclose such information when the forecast of consolidated financial results can be calculated.

* Notes

  1. Changes in significant subsidiaries during the three months under review (changes in specified subsidiaries resulting in the changes in scope of consolidation): No
  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)

As of June 30, 2020

1,370,914,963 shares

As of March 31, 2020

1,370,914,963 shares

  1. Total number of treasury shares at the end of the period

As of June 30, 2020

85,328,967 shares

As of March 31, 2020

85,329,780 shares

  1. Average number of shares during the period (cumulative from the beginning of the fiscal year)

Three months ended June 30, 2020

1,285,578,396 shares

Three months ended June 30, 2019

1,365,683,992 shares

  • 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 contained in these materials are based on information currently available as of the date of release of these materials and on certain assumptions deemed to be reasonable. Actual business and other results may differ substantially due to various factors.

Attached Material

Contents

1. Qualitative Information Regarding Settlement of Accounts for the Three Months .....................................

2

(1)

Explanation of Results of Operations......................................................................................................

2

(2)

Financial Position ....................................................................................................................................

4

(3)

Cash Flows ..............................................................................................................................................

5

(4)

Explanation of Forecast of Consolidated Financial Results and Other Forward-looking Statements.....

5

2. Condensed Consolidated Financial Statements and Significant Notes Thereto ...........................................

6

(1)

Condensed Consolidated Statements of Financial Position.....................................................................

6

(2)

Condensed Consolidated Statements of Profit or Loss ...........................................................................

8

(3)

Condensed Consolidated Statements of Comprehensive Income ...........................................................

9

(4)

Condensed Consolidated Statements of Changes in Equity ..................................................................

10

(5)

Condensed Consolidated Statements of Cash Flows.............................................................................

11

(6)

Notes to Condensed Consolidated Financial Statements ......................................................................

13

(Notes on premise of going concern) ....................................................................................................

13

(Reporting entity) ..................................................................................................................................

13

(Basis of preparation) ............................................................................................................................

13

(Significant accounting policies) ...........................................................................................................

13

(Significant accounting estimates and associated judgments)...............................................................

13

(Segment information) ..........................................................................................................................

14

1

Olympus Corporation (7733) Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021

1. Qualitative Information Regarding Settlement of Accounts for the Three Months

  1. Explanation of Results of Operations

Overall

(Millions of yen)

Three months ended

Three months ended

Increase (Decrease)

Increase (Decrease)

June 30, 2019

June 30, 2020

ratio (%)

Revenue

181,885

142,403

(39,482)

(21.7)

Operating profit (loss)

14,736

1,190

(13,546)

(91.9)

Profit (loss) attributable to

8,637

(2,736)

(11,373)

-

owners of parent

Exchange rate (Yen/U.S. dollar)

109.90

107.62

(2.28)

-

Exchange rate (Yen/Euro)

123.49

118.48

(5.01)

-

Exchange rate (Yen/Renminbi)

16.07

15.17

(0.90)

-

While economic activities are gradually reopening after shutdowns due to the global spread of COVID-19, the global economy faced extremely challenging conditions in the three months ended June 30, 2020. The Japanese economy also faces similar challenging conditions as the global economy as corporate earnings continue to deteriorate due to COVID-19.

Under such circumstances, the Olympus Group announced its business transformation plan "Transform Olympus" in January 2019, aiming to develop itself as a truly global medtech company, and a medium- and long-term management strategy based on "Transform Olympus." The management strategy indicates the long-term direction of the Company, and we are promoting initiatives toward sustainable growth.

The Olympus Group's overall revenue for the three months ended June 30, 2020 decreased to ¥142,403 million (down 21.7% year on year) due to the decline in revenue in all our businesses due to factors such as limits on sales promotion activities because of COVID-19. Regarding operating profit (loss), we recorded ¥1,190 million (down 91.9% year on year), due to decreased revenue in all our businesses, despite a reduction in selling, general and administrative expenses. Moreover, despite a decrease of finance costs, loss attributable to owners of parent totaled ¥2,736 million (compared with profit attributable to owners of parent of ¥8,637 million in the same period of the previous fiscal year) due to the recording of income taxes.

Furthermore, we have recognized an impact on the Company's consolidated results in the three months ended June 30, 2020 due to COVID-19 of approximately ¥34,000 million in revenue and approximately ¥11,000 million in operating profit.

Regarding foreign exchange, the yen appreciated against the U.S. dollar, the euro and the renminbi compared to the previous fiscal year. The average exchange rate during the period was ¥107.62 against the U.S. dollar (¥109.90 in the same period of the previous fiscal year), ¥118.48 against the euro (¥123.49 in the same period of the previous fiscal year) and ¥15.17 against the renminbi (¥16.07 in the same period of the previous fiscal year) which caused revenue and operating profit to down by ¥5,381 million and ¥1,732 million, respectively, year on year.

2

Olympus Corporation (7733) Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021

Endoscopic Solutions Business

(Millions of yen)

Three months ended

Three months ended

Increase (Decrease)

Increase (Decrease)

June 30, 2019

June 30, 2020

ratio (%)

Revenue

95,410

79,198

(16,212)

(17.0)

Operating profit (loss)

21,918

14,631

(7,287)

(33.2)

Consolidated revenue in the Endoscopic Solutions Business amounted to ¥79,198 million (down 17.0% year on year), while operating profit amounted to ¥14,631 million (down 33.2% year on year).

In April 2020, in Europe and Asian, we introduced the new flagship endoscopic system "EVIS X1", but due to the impact of the COVID-19, postponement or discontinuation of gastrointestinal endoscopy was recommended by each academic society, the number of procedures decreased, and there were restrictions on sales promotion activities such as restriction of visits to medical institutions or postponement/cancellation of business negotiations. As a result, revenue in the Endoscopic Solutions Business declined.

Operating profit in the Endoscopic Solutions Business decreased mainly due to lower sales as a result of the pandemic despite the progress in cost efficiency.

Therapeutic Solutions Business

(Millions of yen)

Three months ended

Three months ended

Increase (Decrease)

Increase (Decrease)

June 30, 2019

June 30, 2020

ratio (%)

Revenue

52,056

38,100

(13,956)

(26.8)

Operating profit (loss)

5,676

1,449

(4,227)

(74.5)

Consolidated revenue in the Therapeutic Solutions Business amounted to ¥38,100 million (down 26.8% year on year), while operating profit amounted to ¥1,449 million (down 74.5% year on year).

Due to the impact of the COVID-19, postponement of surgery and procedures was recommended by each academic society, the number of procedures decreased, and there were restrictions on sales promotion activities such as restriction of visits to medical institutions or postponement/cancellation of business negotiations. As a result, revenue in the Therapeutic Solutions Business declined.

Operating profit in the Therapeutic Solutions Business decreased mainly due to lower sales as a result of the pandemic despite the progress in cost efficiency.

Scientific Solutions Business

(Millions of yen)

Three months ended

Three months ended

Increase (Decrease)

Increase (Decrease)

June 30, 2019

June 30, 2020

ratio (%)

Revenue

22,613

17,757

(4,856)

(21.5)

Operating profit (loss)

1,644

(1,604)

(3,248)

-

Consolidated revenue in the Scientific Solutions Business amounted to ¥17,757 million (down 21.5% year on year), while operating loss amounted to ¥1,604 million (compared with an operating profit of ¥1,644 million in the same period of the previous fiscal year).

The electrical component and semiconductor markets in China have been on a recovery trend. However, overall, in addition to a reduced desire for capital investment in the aviation and automotive industries, restrictions on sales promotion activities including restrictions on visits to clients and delays and cancellations of business negotiations due to COVID-19 led to decreased sales in the Scientific Solutions Business.

Operating profit in the Scientific Solutions Business decreased mainly due to lower sales as a result of the pandemic despite the progress in cost efficiency.

3

Olympus Corporation (7733) Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021

Imaging Business

(Millions of yen)

Three months ended

Three months ended

Increase (Decrease)

Increase (Decrease)

June 30, 2019

June 30, 2020

ratio (%)

Revenue

10,189

6,024

(4,165)

(40.9)

Operating profit (loss)

(2,341)

(2,746)

(405)

-

Consolidated revenue in the Imaging Business amounted to ¥6,024 million (down 40.9% year on year), while operating loss amounted to ¥2,746 million (compared with an operating loss of ¥2,341 million in the same period of the previous fiscal year).

A harsh operating environment due to the rise of smartphones, etc. in addition to a decrease in customers at physical stores because of the impact of COVID-19 led to a decline in revenue in the Imaging Business.

Operating loss in the Imaging Business expanded mainly due to the decrease in revenue, despite the advancement of improved cost-effectiveness.

Others

(Millions of yen)

Three months ended

Three months ended

Increase (Decrease)

Increase (Decrease)

June 30, 2019

June 30, 2020

ratio (%)

Revenue

1,617

1,324

(293)

(18.1)

Operating profit (loss)

(646)

(438)

208

-

Consolidated revenue in other businesses amounted to ¥1,324 million (down 18.1% year on year), while operating loss amounted to ¥438 million (compared with an operating loss of ¥646 million in the same period of the previous fiscal year).

Due to the impact of COVID-19, revenue decreased in the animal-related business and the imaging component business following restrictions on sales promotions activities.

Operating profit (loss) in other businesses improved due to cost reductions following the completion of some development themes in the imaging component business.

  1. Financial Position

As of the end of the first quarter under review, total assets increased by ¥83,418 million compared to the end of the previous fiscal year to ¥1,099,081 million. This is primarily because cash and cash equivalents increased ¥108,012 million and inventories increased ¥15,722 million, despite trade and other receivables decreasing ¥31,060 million and retirement benefit asset decreasing ¥13,848 million as a result of the impact of implementing a pension buy-in for the primary pension plan for the Olympus Group's subsidiaries located in the U.K. in the three months ended June 30, 2020. Due to the pension buy-in, a portion of plan assets held have been contributed to the insurance company, and the Olympus Group concluded an insurance agreement with the insurance company that ensures the receipt of an amount of money equivalent to pension benefits for pensioners in the future.

Total liabilities increased in comparison to the end of the previous fiscal year by ¥93,421 million to ¥737,126 million. This is primarily because of a ¥30,926 million increase in bonds and borrowings in current liabilities in addition to a ¥84,079 million increase in bonds and borrowings in non-current liabilities due to the impact of financing through long-term borrowings in order to secure on-hand liquidity in light of the impact of COVID-19 on business results, despite a ¥11,687 million decrease in trade and other payables.

Total equity decreased in comparison to the end of the previous fiscal year by ¥10,003 million to ¥361,955 million. This is primarily because of a ¥11,348 million decrease in retained earnings due to the recording of loss attributable to owners of parent and the impact of implementing a pension buy-in for the primary pension plan for the Olympus Group's subsidiaries located in the U.K. in the three months ended June 30, 2020.

As a result of the foregoing, equity attributable to owners of parent to total assets decreased from 36.5% as of the end of the previous fiscal year to 32.8%.

4

Olympus Corporation (7733) Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021

  1. Cash Flows

Cash and cash equivalents at the end of the first quarter under review reached ¥270,671 million, an increase of ¥107,954 million compared to the end of the previous fiscal year. The following is the cash flows for the three months ended June 30, 2020.

Cash flows from operating activities

Net cash provided by operating activities for the three months ended June 30, 2020 was ¥8,388 million (compared with ¥28,406 million provided for the three months ended June 30, 2019). The main sources of cash included an adjustment for noncash items of ¥15,378 million in depreciation and amortization, and a decrease in trade and other receivables of ¥31,566 million. The main uses of cash included ¥15,196 million increase in inventories, ¥10,092 million decrease in trade and other payables, and ¥5,786 million of income taxes paid.

Cash flows from investing activities

Net cash used in investing activities for the three months ended June 30, 2020 was ¥12,291 million (compared with ¥15,513 million used for the three months ended June 30, 2019). The main uses of cash included ¥8,569 million in purchase of property, plant and equipment and ¥4,068 million in purchase of intangible assets.

Cash flows from financing activities

Net cash provided by financing activities for the three months ended June 30, 2020 was ¥111,818 million (compared with ¥11,285 million used for the three months ended June 30, 2019). Increasing factors mainly included ¥16,128 million in increase in short-term borrowings and commercial papers and ¥99,180 million in proceeds from long-term borrowings. Regarding proceeds from long-term borrowings, this was because financing was carried out through long-term borrowings in order to secure on-hand liquidity in light of the impact of COVID-19 on business results.

  1. 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, 2021 has not been determined at the current point in time due to the difficulties of making a reasonable calculation because of continuing uncertainties regarding when the COVID-19 crisis will be over, the responses of each country and region, market trends and economic trends that will be affected by those impacts, and because there have fundamentally been no changes to those factors since the submission of the "Consolidated Financial Results for the Fiscal Year Ended March 31, 2020" on May 29, 2020. We intend to promptly disclose such information when the forecast of consolidated financial results is able to be calculated.

5

Olympus Corporation (7733) Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021

2. Condensed Consolidated Financial Statements and Significant Notes Thereto

  1. Condensed Consolidated Statements of Financial Position

(Millions of yen)

As of March 31, 2020

As of June 30, 2020

ASSETS

Current assets

Cash and cash equivalents

162,494

270,506

Trade and other receivables

143,062

112,002

Other financial assets

3,424

2,369

Inventories

167,596

183,318

Income taxes receivable

3,521

4,405

Other current assets

20,336

25,700

Subtotal

500,433

598,300

Assets held for sale

6,274

6,100

Total current assets

506,707

604,400

Non-current assets

Property, plant and equipment

202,134

201,297

Goodwill

98,328

97,373

Intangible assets

74,792

75,120

Retirement benefit asset

31,111

17,263

Investments accounted for using equity method

2,267

2,244

Trade and other receivables

19,685

19,592

Other financial assets

27,266

29,962

Deferred tax assets

51,156

49,753

Other non-current assets

2,217

2,077

Total non-current assets

508,956

494,681

Total assets

1,015,663

1,099,081

6

Olympus Corporation (7733) Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021

(Millions of yen)

As of March 31, 2020

As of June 30, 2020

LIABILITIES AND EQUITY

Liabilities

Current liabilities

Trade and other payables

59,557

47,870

Bonds and borrowings

81,018

111,944

Other financial liabilities

20,188

21,980

Income taxes payable

11,276

8,629

Provisions

20,598

21,982

Other current liabilities

136,912

127,912

Subtotal

329,549

340,317

Liabilities directly associated with assets held for sale

4,221

4,093

Total current liabilities

333,770

344,410

Non-current liabilities

Bonds and borrowings

199,897

283,976

Other financial liabilities

30,733

32,119

Retirement benefit liability

49,607

50,120

Provisions

7,281

6,764

Deferred tax liabilities

13,147

8,469

Other non-current liabilities

9,270

11,268

Total non-current liabilities

309,935

392,716

Total liabilities

643,705

737,126

Equity

Share capital

124,643

124,643

Capital surplus

91,157

91,140

Treasury shares

(98,135)

(98,111)

Other components of equity

(22,751)

(21,247)

Retained earnings

275,833

264,485

Total equity attributable to owners of parent

370,747

360,910

Non-controlling interests

1,211

1,045

Total equity

371,958

361,955

Total liabilities and equity

1,015,663

1,099,081

7

Olympus Corporation (7733) Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021

  1. Condensed Consolidated Statements of Profit or Loss

(Millions of yen)

Three months ended

Three months ended

June 30, 2019

June 30, 2020

Revenue

181,885

142,403

Cost of sales

65,175

55,149

Gross profit

116,710

87,254

Selling, general and administrative expenses

101,074

84,634

Share of profit (loss) of investments accounted for using

92

28

equity method

Other income

336

917

Other expenses

1,328

2,375

Operating profit

14,736

1,190

Finance income

528

344

Finance costs

1,657

1,325

Profit before tax

13,607

209

Income taxes

4,964

2,941

Profit (loss)

8,643

(2,732)

Profit (loss) attributable to:

Owners of parent

8,637

(2,736)

Non-controlling interests

6

4

Profit (loss)

8,643

(2,732)

Earnings per share

Basic earnings (loss) per share

¥6.32

¥(2.13)

Diluted earnings (loss) per share

¥6.32

¥(2.13)

8

Olympus Corporation (7733) Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021

  1. Condensed Consolidated Statements of Comprehensive Income

(Millions of yen)

Three months ended

Three months ended

June 30, 2019

June 30, 2020

Profit (loss)

8,643

(2,732)

Other comprehensive income

Items that will not be reclassified to profit or loss

Financial assets measured at fair value through other

(371)

1,754

comprehensive income

Remeasurements of defined benefit plans

(381)

(8,612)

Total of items that will not be reclassified to profit or loss

(752)

(6,858)

Items that may be reclassified to profit or loss

Exchange differences on translation of foreign operations

(8,762)

(295)

Cash flow hedges

98

65

Share of other comprehensive income of associates

-

(20)

accounted for using equity method

Total of items that may be reclassified to profit or loss

(8,664)

(250)

Total other comprehensive income

(9,416)

(7,108)

Comprehensive income

(773)

(9,840)

Comprehensive income attributable to:

Owners of parent

(779)

(9,844)

Non-controlling interests

6

4

Comprehensive income

(773)

(9,840)

9

Olympus Corporation (7733) Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021

  1. Condensed Consolidated Statements of Changes in Equity Three months ended June 30, 2019

(Millions of yen)

Equity attributable to owners of parent

Non-

Other

Capital

Treasury

Retained

controlling

Total equity

Share capital

components

Total

surplus

shares

earnings

interests

of equity

Balance at April 1, 2019

124,606

91,310

(4,764)

(8,234)

238,275

441,193

1,194

442,387

Profit

8,637

8,637

6

8,643

Other comprehensive

(9,416)

(9,416)

(9,416)

income

Comprehensive income

-

-

-

(9,416)

8,637

(779)

6

(773)

Purchase of treasury shares

(1)

(1)

(1)

Disposal of treasury shares

(2)

2

0

0

Dividends from surplus

(10,243)

(10,243)

(125)

(10,368)

Transfer from other

components of equity to

381

(381)

-

-

retained earnings

Share-based payment

(56)

(56)

(56)

transactions

Equity transactions with

(158)

(158)

158

-

non-controlling interests

Total transactions with

-

(216)

1

381

(10,624)

(10,458)

33

(10,425)

owners

Balance at June 30, 2019

124,606

91,094

(4,763)

(17,269)

236,288

429,956

1,233

431,189

Three months ended June 30, 2020

(Millions of yen)

Equity attributable to owners of parent

Non-

Other

Capital

Treasury

Retained

controlling

Total equity

Share capital

components

Total

surplus

shares

earnings

interests

of equity

Balance at April 1, 2020

124,643

91,157

(98,135)

(22,751)

275,833

370,747

1,211

371,958

Loss

(2,736)

(2,736)

4

(2,732)

Other comprehensive

(7,108)

(7,108)

(7,108)

income

Comprehensive income

-

-

-

(7,108)

(2,736)

(9,844)

4

(9,840)

Disposal of treasury shares

(24)

24

0

0

Dividends from surplus

-

(170)

(170)

Transfer from other

components of equity to

8,612

(8,612)

-

-

retained earnings

Share-based payment

7

7

7

transactions

Total transactions with

-

(17)

24

8,612

(8,612)

7

(170)

(163)

owners

Balance at June 30, 2020

124,643

91,140

(98,111)

(21,247)

264,485

360,910

1,045

361,955

10

Olympus Corporation (7733) Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021

  1. Condensed Consolidated Statements of Cash Flows

(Millions of yen)

Three months ended

Three months ended

June 30, 2019

June 30, 2020

Cash flows from operating activities

Profit before tax

13,607

209

Depreciation and amortization

17,427

15,378

Interest and dividend income

(520)

(350)

Interest expenses

1,031

987

Share of loss (profit) of investments accounted for using

(92)

(28)

equity method

Decrease (increase) in trade and other receivables

17,770

31,566

Decrease (increase) in inventories

(10,829)

(15,196)

Increase (decrease) in trade and other payables

(3,976)

(10,092)

Increase (decrease) in retirement benefit liability

166

762

Decrease (increase) in retirement benefit asset

1,203

928

Other

(1,428)

(9,491)

Subtotal

34,359

14,673

Interest received

280

171

Dividends received

240

179

Interest paid

(1,033)

(849)

Income taxes paid

(5,440)

(5,786)

Net cash provided by operating activities

28,406

8,388

Cash flows from investing activities

Purchase of property, plant and equipment

(11,004)

(8,569)

Proceeds from sale of property, plant and equipment

60

108

Purchase of intangible assets

(4,339)

(4,068)

Payments for acquisition of business

(220)

-

Other

(10)

238

Net cash used in investing activities

(15,513)

(12,291)

11

Olympus Corporation (7733) Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021

(Millions of yen)

Three months ended

Three months ended

June 30, 2019

June 30, 2020

Cash flows from financing activities

Net increase (decrease) in short-term borrowings and

29,446

16,128

commercial papers

Repayments of lease liabilities

(3,334)

(4,004)

Proceeds from long-term borrowings

-

99,180

Repayments of long-term borrowings

(28,000)

-

Dividends paid

(10,243)

-

Dividends paid to non-controlling interests

(125)

(170)

Other

971

684

Net cash used in financing activities

(11,285)

111,818

Effect of exchange rate changes on cash and cash

(2,426)

39

equivalents

Net increase (decrease) in cash and cash equivalents

(818)

107,954

Cash and cash equivalents at beginning of period

114,563

162,717

Cash and cash equivalents at end of period

113,745

270,671

12

Olympus Corporation (7733) Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021

  1. Notes to Condensed 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 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 manufacture and sales of endoscopic, therapeutic and scientific, imaging and other products. Details of each business are as described in Note "Segment information."

(Basis of preparation)

  1. Statement of the condensed consolidated financial statements' compliance with IFRS
    The condensed consolidated financial statements of the Olympus Group have been prepared in accordance with IAS 34. Since the requirements for "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 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, 2019.
    These condensed consolidated financial statements were approved by Director, Representative Executive Officer, President and CEO Yasuo Takeuchi, and Executive Officer and CFO Chikashi Takeda on August 5, 2020.
  2. Basis of measurement
    The Olympus Group's condensed 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 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 consolidated financial statements of the Olympus Group for the three months ended June 30, 2020 are the same as those applied for the fiscal year ended March 31, 2020.

(Significant accounting estimates and associated judgments)

In preparing IFRS-based consolidated financial statements, the management is required to make judgment, 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 consolidated financial statements are unchanged from the contents described in the consolidated financial statements for the previous fiscal year.

Furthermore, as described in the consolidated financial statements for the previous fiscal year, the effects of the spread of COVID-19 differ by region, but overall, are expected to gradually disappear from the third quarter of the current consolidated fiscal year. We have assumed that the Company's sales activities will also begin to normalize at that point, and there have been no changes to that assumption.

13

Olympus Corporation (7733) Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021

(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 five basic segments: Endoscopic Solutions Business, Therapeutic Solutions Business, Scientific Solutions Business, Imaging Business, and Others. The Olympus Group has established comprehensive strategies and engages in business activities for the products and services it handles both in Japan and overseas.
    Accordingly, the Olympus Group has the abovementioned five businesses as reportable segments.

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, endoscopy systems, repair service

Therapeutic Solutions Business

Endo-therapy devices, energy devices, urology, gynecology and ENT products

Scientific Solutions Business

Biological microscopes, industrial microscopes, industrial endoscopes, non-destructive testing

equipment

Imaging Business

Digital cameras, voice recorders

Others

Biomedical materials

  1. Revenue and business results for reportable segments
    Revenue and business results of each reportable segment of the Olympus Group are as follows. The accounting method used for reportable segments is the same as the accounting policies of the Olympus
    Group that are described in "Significant accounting policies."
    Three months ended June 30, 2019

(Millions of yen)

Reportable Segment

Amount on

Adjustment

condensed

consolidated

Endoscopic

Therapeutic

Scientific

Imaging

Others

Total

(Note 2)

financial

statements

Revenue

Revenue from

95,410

52,056

22,613

10,189

1,617

181,885

-

181,885

outside customers

Revenue among

-

-

20

-

97

117

(117)

-

segments (Note 1)

Total revenue

95,410

52,056

22,633

10,189

1,714

182,002

(117)

181,885

Operating profit (loss)

21,918

5,676

1,644

(2,341)

(646)

26,251

(11,515)

14,736

Finance income

528

Finance costs

1,657

Profit before tax

13,607

Other items

Share of profit (loss)

of investments

117

(25)

-

-

-

92

-

92

accounted for using

equity method

Depreciation and

8,507

4,581

1,782

413

171

15,454

1,973

17,427

amortization

Impairment losses

-

-

-

545

-

545

-

545

(non-financial assets)

Notes:

  1. Revenue among segments is based on actual market prices.
  2. Adjustment for operating profit (loss) is corporate expenses that consist of elimination of transactions among segments as well as general and administrative expenses and fundamental research expenses etc. that are not attributable to reportable segments.

14

Olympus Corporation (7733) Financial Results for the Three Months of the Fiscal Year Ending March 31, 2021

Three months ended June 30, 2020

(Millions of yen)

Reportable Segment

Amount on

Adjustment

condensed

consolidated

Endoscopic

Therapeutic

Scientific

Imaging

Others

Total

(Note 2)

financial

statements

Revenue

Revenue from

79,198

38,100

17,757

6,024

1,324

142,403

-

142,403

outside customers

Revenue among

-

-

0

1

30

31

(31)

-

segments (Note 1)

Total revenue

79,198

38,100

17,757

6,025

1,354

142,434

(31)

142,403

Operating profit (loss)

14,631

1,449

(1,604)

(2,746)

(438)

11,292

(10,102)

1,190

Finance income

344

Finance costs

1,325

Profit before tax

209

Other items

Share of profit (loss)

of investments

30

(2)

-

-

-

28

-

28

accounted for using

equity method

Depreciation and

8,361

3,081

1,699

237

145

13,523

1,855

15,378

amortization

Impairment losses

-

-

-

209

-

209

-

209

(non-financial assets)

Notes:

  1. Revenue among segments is based on actual market prices.
  2. Adjustment for operating profit (loss) is corporate expenses that consist of elimination of transactions among segments as well as general and administrative expenses and fundamental research expenses etc. that are not attributable to reportable segments.

15

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Olympus Corporation published this content on 05 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 August 2020 06:06:13 UTC