Due to strong sales in Europe and Asia, despite decline in the U.S. For a breakdown of Life Sciences revenue by traditional segment, please see page 24.

Operating income increased due to improved profitability driven by price adjustments, cost-cutting measures, and the impact of U.S. tariff refunds.

Here are the sales figures by region. Thanks to favorable exchange rates, revenue increased in all regions.

Japan saw a slight increase in revenue due to higher sales of Healthcare Solutions. Europe was steady in revenue, even without positive impact of foreign exchange rates, driven by strong sales in diabetes management.

North America posted revenue increase due to increased sales volume in the U.S. for BGM, diabetes management products.

Revenue in other regions increased significantly by 19.2% due to growth in diabetes management in emerging markets and robust sales of diagnostics and life sciences products in Asia. Page 16, there are details of adjustments made to operating income so that we can have adjusted EBITDA.

Depreciation and amortization totaled 6.7 billion yen, which was about the same as in the previous year. In adjustments to adjusted EBITDA, we recorded restructuring-related expenses of 370 million yen last year and 140 million yen this year.

Next, I would like to explain the major assets and liabilities on the consolidated balance sheet. The balance of goodwill was 123.4 billion yen.

There was no change on a local currency basis, but it increased by 1.9 billion yen due to effects of foreign exchange rates. Interest-bearing debt repaid a net 6.0 billion yen, but the figure decreased by 5.3 billion yen with foreign exchange impact.

The ROE increased from 0.3% to 2.0%, primarily due to rise in the profit attributable to owners of parent company. The net leverage ratio decreased from 3.7 to 3.2 times, as a result of an increase of adjusted EBITDA and a decrease in net interest-bearing debt.

Operating cash flow totaled 14.3 billion yen, reflecting strong performance. Investing cash flow resulted in an outflow of 3.3 billion yen, including 2.7 billion yen in capital expenditure.

Financing cash flow resulted in an outflow of 10.0 billion yen, including 6.0 billion yen in debt repayment and 2.5 billion yen in dividend payments. Cash and cash equivalents at the end of the term increased by 1.5 billion yen from the previous term.

We are beginning to see results of our efforts to improve profitability and strengthen cash generation. We intend to continue making steady progress in these areas.

Next, our full-year earnings forecast for the fiscal year ending March 2027. For now, we are maintaining our full-year forecast, including assumptions of exchange rates.

Although our internal targets for revenue and operating income was significantly exceeded, we anticipate potential risks, such as the fact that the demand for equipment in diagnostics and life sciences has not yet recovered, as well as the risk of rising prices due to the situation in the Middle East and increasing supply chain disruptions for semiconductor-related products such as servers and PCs. Current exchange rates show that the yen has appreciated due to currency fluctuations.

Compared to assumed exchange rate of 165 yen to euro and 145 yen to dollar, the yen is currently weaker, therefore having a positive impact on revenue and operating income. However, compared to the average exchange rates for the first quarter, the yen is slightly stronger.

If this level continues, the positive impact of exchange rates will diminish. In light of these circumstances, we have decided to closely monitor the business environment and exchange rates and will maintain our full-year forecast for the time being.

Next, I would like to provide some supplementary explanation on the foreign exchange gains and losses. In the first quarter, we recorded a foreign exchange loss of 600 million yen, which is a significant improvement on last year's loss of 4.4 billion yen.

Based on sensitivity assumptions of 183 yen to euro and 160 yen to dollar at the end of previous fiscal year, a 1 yen appreciation would result in a positive impact of 400 million yen for the euro and a negative impact of 40 million yen for the dollar. Therefore, based on these sensitivity estimates, we expect to record financial income at the current exchange rates.

There are no changes to the amount and breakdown of our earnings forecast for this fiscal year. However, we have adjusted the actual figures for the previous fiscal year to reflect the impact after reorganization.

This concludes my explanation.

Thank you, I'm Wakao, JPMorgan. My first question is regarding the full-year forecast.

As you explained, in the first quarter, you didn't make any revisions, and I understand the reasons behind that. When you have better visibility over variables, then the timing for potential revision, can we consider it to be in the second quarter?

After diagnostics and life sciences forecast in the U.S. or the costs are also one of the variable factors, we understand it.

Looking at the progress of OP, I think currently progress rate is 40% in the full-year forecast. Therefore, usually considering this result, and I think that on a net basis, there will be revisions upward.

Can we consider that way?

Thank you. I'd like to answer to your questions.

In May, we announced our full-year forecast, and back then, BGM, if it goes above the expectation, we may potentially make an upward revision. I think we discussed that way.

The way of our thinking is that we closely monitor the situations in the first half and, as I discussed, about potential risk factors, we would like to look into the situations and verifying the situations what's going on and come back to make a decision. At this point in time, we cannot make any promises, and having that upgrade revision, but in the first quarter, we had strong performance.

Therefore, in the second quarter, in the second half, I think the major point is how risk factors will show up. We need to monitor and verify how the things will be going in Q2 and beyond.

Thank you very much, understood. My second question is that diabetes management performed very well.

I have a question. In the first quarter, emerging markets performed very well.

If I look at my numbers on Excel, I also thought that performance in Europe was also good. I couldn't really understand emerging markets.

Could you give us more details about the actual of the first quarter? Of course, momentum in the first quarter, whether or not it will be continuing in the second quarter?

I think diabetes management is a bigger factor for you to look at overall performance, and is there any risk? Please also let us know.

Thank you for your question. Sato would like to answer your question.

In the first quarter, performance was strong, including Europe and the U.S., we could expand market share. That's the first element.

Emerging markets, as Yamagishi mentioned, in Algeria, once again, we re-entered into the market, and also in the Middle East, which showed some decline in the previous year, now we see recovery there. These are the good factors in the emerging markets.

Also, India, Australia, compared to the last year, they are growing. We have mixed situations, but mainly we have been expanding market share in R&D and developed markets.

That's the main contributor. What our forecast is for the second quarter and beyond, I believe that the first quarter momentum would be able to be maintained, and we don't see any major changes.

Regarding the margin, as you make progress in restructuring, I think situation is quite favorable. From the second quarter and beyond, is there any reason that it's showing any decline in the margin?

In the first quarter results, about 70% is a volume growth, but 30% is a profitability. That's effective, and I believe that they will continue to contribute on the profitability or margin.

If I supplement to that, in the first quarter, we had a strong results, and the growth rate, other numbers were big, but in the second quarter and the third quarter, in terms of the rate, it will be more gradual in our view. Rather than having any particular risks, the overall, it's growing larger, and there are some impact on the seasonality.

Therefore, the growth itself won't be continued, but it will be more gradual. Also, this time, margin was 33%, it was very good as the first quarter.

In terms of the composition mix, Europe and the U.S. were very strong, but don't expect any sudden decline in those businesses, but it will be probably becoming a more gradual.

Talking about phasing, how much is the amount of phasing?

It is difficult to identify how much, but in the Q4, mainly in Western countries, in the U.S., last year, we got the deals, and they are delivering in this full year. There was a big deal that last year, but that produced results in Q1.

That's the European case. That's producing results for this full year for Europe.

There are some other areas, and also they are inventories, and our inventory is, the adjustments or shipments, they are coordinated. The result of Q1, because the distributor's inventory level was relatively low, and the sales shipment was also strong.

Therefore, how much is quite difficult to say accurately, but that is overall situation.

Understood. Thank you very much.

Thank you. Tokai Tokyo Intelligence Lab, my name is Yoshida.

Thank you for the opportunity. I'd like to ask my first question.

You said that BGM is doing well. Next time, could you please explain the competitive situation?

LifeScan issued Chapter 11 bankruptcy protection, and were there any changes since then? What about the margin?

When you sell the equipment, the profit margin could be lower, I'm talking about the BGM. Was that not the case, or was that part of the reason of the brisk BGM results?

Thank you for your question. Regarding competitive situations, as I have mentioned, LifeScan filed Chapter 11 bankruptcy protection, that's in the United States.

As a result of that, commercial contracts are coming to us, and that's one favorable factor. Another thing, we have Roche, our competitor, they are selling CGM, and they are shifting resources from BGM to CGM.

Things like, they used to sell Eversense and BGM, but the resources, they're not spending anymore and shifting that to BGM, therefore, increasing the share, particularly in Germany and Italy. As I have mentioned, LifeScan, we are gaining the share from LifeScan.

In terms of profit margin, meters, we are continuing to evaluate meters, which is the introduction. We try to maximize the reactions from the customers, profit margin does not change throughout a year.

Thank you. That is internal situation, external situation, both are favorable.

What about the external environment, other than LifeScan, you mentioned Roche, which is shifting resources from BGM to CGM, but what about the other competitors? What are they doing?

Roche is withdrawing from BGM, that's my assumption, but is that true?

With regard to competitive situation, there are only a limited number of players in BGM. LifeScan was BGM-only company, but they filed Chapter 11.

Roche has both, BGM and CGM, but they are shifting towards CGM. We are BGM, we have focused our resources on BGM.

Increasing the share in our strong market, that's what we are seeing right now.

Thank you. The second question, electronic medical records, you said that e-prescription sales was up.

This may not be appropriate for a question, but what about electronic medical records, was that lapsed in Q4? There may be a cloud which may be small, but what about the situation there?

Also, cloud standardization is being progressed by Japanese government by this summer to present some policies. What about the latest situations?

Thank you. With regard to electronic medical records, we have pharmacy and medical market.

With regard to pharmacies, our share is increasing, and there is smooth introduction to this market. The government is struggling to offer subsidies.

High cost of introducing the system, which is more than they receive in the form of subsidy, that is why the clinic introduction is slower than the pharmacies. It's not that introduction is slowing down, that's why we are doing the promotions so that we can get the more market share.

The second question regarding cloud situations. Some have introduced, and we have just presented custom-tailored to make sure that we can get market share.

Compared to the budget, we are a little bit behind. We are capturing new customers as well as existing customers, so that we can get our competing customers so that we can get more market share.

The last question that you made, the Kishida government, medical DX policies include medical DX and cloud-native, which are relevant to us. This is government policy, which will decide the market, we have medical policy team within the company, and of course we are part of the discussion.

Still the government has not come up with clear policy, under what rule, clear method. As soon as the government is ready to present the policies, we are ready to our measures.

Thank you, and that's all from me.

I would like to give a supplement. With regard to numbers, with regard to EMR, compared to the second half last year, the current figure is up.

In June, with the points, and we have seen the demand, but just as Sato mentioned, dispensing pharmacies versus clinics, the introduction speed is a bit different. With regard to the cloud standardization, 100% cloud does not, that's not the case.

They are considering 100% and also, there are systems to be presented to be presented, but these are not clear. We want to make sure that we are compliant.

The 100% into the on-premise and cloud systems combined. This is all I have to say.

Thank you. Those were the questions that I wanted to ask.

Hello, Hayashi, Morgan Stanley Securities. Can you hear me okay?

Thank you. I would like to ask questions regarding discrepancies from your original plan.

I'd like to ask several questions for each segment. First, about BGM.

In Europe and U.S., looking at the numbers, I understand that. Obviously, in this fiscal year, the plan was the decline in BGM, but thinking about the situation, problem with Chapter 11, we could anticipate that at the time that you developed a plan.

It's visible, but you planned a negative growth, but actually you had a growth. What are the reasons behind differences in Europe and the U.S.?

What are the points that you saw there were some differences between your plan and the actuals?

Thank you for your question. Especially talking about Europe, the differences from our planning, talking about developed countries, in Germany, Italy, and the U.K., compared to the initial planning numbers, we saw some strong growth.

Regarding CGM, we needed to support CGM, and how much we need to continue to support was unclear, to some degree, when we developed the plan. Including the salespeople, they made a shift of resources well, and results are, as I mentioned earlier, we could increase the market share.

That has relatively big impact.

Thank you. If I make a supplement, because this is the first quarter, differences are large.

As I mentioned earlier, in terms of the market, Europe and the U.S. markets overall are declining.

That's a situation of the market. Talking about the U.S., last year, we could get the deal, and as time passes by, we could produce results.

That showed up as a larger differences in the Q1. Regarding Europe, with the delay from the Q4 and also overall market has been shrinking, but we are taking the share.

That's the results that came up with larger number in the Q1. In the full year, BGM in the Western situations, we could cover, overall the market has been shrinking, and how it will be progressing in the second half of this year, there are risks, and incorporating that into our plan, that is the situation.

Therefore, the reimbursement risks that we have been talking about, there are still risks in this regard. For the fiscal year this year, it's not too high, including that, we have internal discussions and developed the plan.

As I mentioned earlier, for the entire year, this will be smoothed, and therefore in Q1, the results showed up as a large difference, but it will be more gradual. Overall, rather than our expectations, performance was positive, more positive than we expected.

We are taking the shares, and also the market, the view is also positive than the original expectations.

Thank you. My second question is about diagnostics and life sciences, and I'd like to see if there's any discrepancy from the plan.

Basically, Europe and the U.S., I think the performance was lower than expected. Japan and Asia performance was good.

Japan and Asia, this is the first time that we see, or I don't remember seeing Japan and Asia highlighted in this segment of diagnostics and life sciences. Could you give us more explanations?

Regarding diagnostics and life sciences, whether or not the U.S. and Europe demand are weak, that's true.

Diagnostics and life sciences are clinical pathology and life science, freezer instrument, these are two major components of the business. Basically speaking, Europe and America, weights are heavier, basically affected by the market situation.

Second question is that in Japan, not much activities, but in Japan, we also, in-house products, but also we are purchasing cells and CGT-related instruments, and they are performing so. Also before moving to digital pathology, there are analog pathology instruments, and there are research institutions which are taking large scale orders.

There are a steady, constant business, and therefore Japan and Asia maybe, that contributed to good performance in Japan and Asia. Also in Asia, talking about China, as government has taken the localized production and sales, and it's the case for some years now.

Produce overseas, but now it's being internalized in China, and that's contributing to our biomedical performance in China.

Talking about numbers, Western countries, in local currency basis, were below the plan. Europe, the second half of the last fiscal year, saw some recovery, but April and May of this year, that was slow, but it's coming back, and the July is pretty solid.

I think it's started a bit slow, but overall, I think it's not much different from our original plan. The U.S., tariffs impact or subsidies impact are still there, but the pharmaceutical customers, deals are coming up, but academia or public sectors, they are still slow.

Overall, it's in-line or a bit below our plan. That's about the biomed life sciences.

China, Eguchi mentioned, China is a bit, better than our plan, and Asia better. This is continuing from the second half of last fiscal year, it's getting better, and they are continuing.

During the first quarter, results are, the market hasn't changed to a degree that we need to change our forecast. Overall, regional mix is that Western markets are weaker and Asia better.

Those are contributing factors in overall performance.

Thank you very much. I could understand.

This is Yamaguchi, Citi. Hear me okay?

I have two quick questions. In the, compared to the budget, Q1 will be, in Q1 was high, Q1 was a weak and gradually stronger in Q2, Q3, Q4.

This fiscal year, Q1 is stronger. What about the Q2, Q3, Q4?

Will it going to be even stronger than last year or how is it going to be?

Last year, there was a big peak, that compared to last year, this year's Q1 is very much stronger. We need to monitor the situation in Q2, but we do not believe that we will have the same peak this year as we had last year.

Including all of these, we would like to monitor the situation in Q2 and so that we can announce in Q2 and beyond.

You may not be able to give us the numbers, but in the past, Q1 was 4 to 5 billion yen and the rest is 60 or 70. Considering the Q1 by itself, is it double the budget, assuming?

Our assumption was almost the same as consensus.

What about the U.S. tariff refund?

What about the forecast for the whole year?

Q1, $2 million for the whole year and full year, it will be in Q2, the refund will arrive, probably $10 million.

Is it included in the original company plan?

That's not included in the original company plan. Thank you.

Thank you.