General Surgery Business Unit (GSBU) Strategy
Tomohisa Sakurai
Head of General Surgery Business UnitOlympus Corporation
March 30, 2016

Todayʼs Agenda

1. Business Overview
2. Recognition of Current Conditions
3. Market Trends
4. Business Strategies
5. Targets and Indicators
2

2016/3/30

No data copy / No data transfer permitted

Todayʼs Agenda

1. Business Overview
2. Recognition of Current Conditions
3. Market Trends
4. Business Strategies
5. Targets and Indicators
3

2016/3/30

No data copy / No data transfer permitted

Positioning of GS Business within Olympus

Aggressively allocating management resources to grow GS
business into 2nd core business after GI
Main growth driver in Medical Business, achieves sales growth
exceeding market growth rates

4

2016/3/30

No data copy / No data transfer permitted

Sales Distribution and Product Portfolio
FY2016 Net Sales (Forecast)
4K SurgicalEndoscopy SystemET
72.0

Surgical Imaging
3D SurgicalVideoscope

医療事業

SurgicalDevices*
205.6

Medical Business2016年3⽉期売上⾼FY2016 Net Sales（⾒通し）（Forecast）¥615.0 billion

THUNDERBEAT

GI
337.4

6,150億円* The figure for surgical devices net sales (¥205.6 billion)
includes net sales of the General Surgery Business Unit(GSBU).

5

2016/3/30

EnergyNo data copy / No data transfer permitted

PK Technology Device
Advanced Bipolar andUltrasonic Integrated
Energy SystemOR SystemsIntegration

OR Systems Integration

Major Products：Surgical Imaging
Surgical Imaging
3D Surgical Videoscope

4K SurgicalEndoscopy SystemProductFeature

6

2016/3/30

 3D visualization of operation areas
provides easier understanding of thedepth of field Worldʼs first 3D surgical videoscopewith deflectable tip

No data copy / No data transfer permitted

 Provides better surgical visualization
with 4 times more pixels thanconventional full HD Wider color gamut helps support
identification of small tissue andvessel structure with better color
reproduction
 Technology developed by Sony
Olympus Medical Solutions

Major Products：EnergyEnergy
THUNDERBEATPK Technology Device

ProductFeature7

2016/3/30

 Worldʼs first integrated system ofadvanced bipolar energy, for better
vessel sealing, and ultrasonic energy, forbetter tissue dissection and cutting Increasing efficacy of surgery without
exchanging device for vessel sealing,tissue dissection and cutting Additional line up for open surgery
available (not available in Japan)

No data copy / No data transfer permitted

 Allows better vessel sealing,tissue dissection and coagulation
with advanced bipolar technology
 Compatible with the same energy
platform as THUNDERBEATTodayʼs Agenda

1. Business Overview
2. Recognition of Current Conditions
3. Market Trends
4. Business Strategies
5. Targets and Indicators
8

2016/3/30

No data copy / No data transfer permitted

Recognition of Current Conditions
Review of Medium-Term Vision Period (FY2013~)（１）Strategy

Individual Measures and Evaluation

Expand share in
surgical imaging field◎ Introduced 3D system, 4K camera systems and other
differentiated products Increased sales of flexible endoscopes in the OR◎

 Strengthened energy device technology development,
launched THUNDERBEAT worldwide and expanded sales
 Completed energy platform with integrated PK
technology
 Expanded device lineup to open surgery and other areasand increased sales

Establish energy
device business

92016/3/30

No data copy / No data transfer permitted

Recognition of Current Conditions
Review of Medium-Term Vision Period (FY2013~)（１）Strategy

Strategic investment
for long-term surgicalbusiness growth

Individual Measures and Evaluation
 Enhanced sales force mainly in the US market○  Achieved THUNDERBEAT annual sales growth rate of
24% in the US market (by February 2016)
 Made progress in sales force enhancement in China

Strengthen operating
foundations in Asiaand emerging
countries○ Improved regulatory approval period bystrengthening RA functions in each country
 Achieved sales growth rate of CAGR 14% in GS fieldof Chinese market (April 2012 – March 2016)

102016/3/30

No data copy / No data transfer permitted

Recognition of Current Conditions
Issues for further business growth
Respond to Market Environment Changes
Accelerated trend of group purchasing through GPOs and IDNs
(North America market)



Expanded application of minimally invasive treatments and surgicalprocedures for reducing overall medical cost

Grow GS Business11

2016/3/30

Expand surgical imaging business market shareExpand product portfolio for energy business

Shifting toward procedure-based business model from capital-basedbusiness

Execute sales strategy with strengthened sales force by strategic
investments

No data copy / No data transfer permitted

Todayʼs Agenda

1. Business Overview
2. Recognition of Current Conditions
3. Market Trends
4. Business Strategies
5. Targets and Indicators
12

2016/3/30

No data copy / No data transfer permitted

Market Trends： Surgical imaging
Market Trends(Operating Environment)

Field

Surgicalimaging【4 Major markets (JP, US, EU, and China)】 Decelerated market growth in capital
equipment due to growing pressure on
medical expenditures
 Market invigoration with 4K launch bymajor competitors
 Expectations for improved performanceof 3D endoscopy system【Emerging countries】
 Expectations of market expansion inconjunction with trend toward minimallyinvasive surgery (shift from open surgery
to laparoscopic surgery)13

2016/3/30

No data copy / No data transfer permitted

Market Scale(GrowthForecasts)¥260 billion~¥290 billion
CAGR：2〜4%

GlobalShare*Competitors

STORZ:

Germany

20~
Stryker: U.S.
25%
R. WOLF: Germany
Arthrex:* Source: Olympus Corporation

U.S.

Market Trends：Energy devices
Field

EnergydevicesMarket Trends(Operating Environment)【4 major markets (JP, US, EU, and China)】 Increased trend in number of minimallyinvasive procedures Market participation by new companies
with value energy products
 Changes in purchasing processes due toexpanding presence of group purchasingorganizations

Market Scale(GrowthForecasts)¥160 billion~¥180 billion
CAGR：3〜5%

GlobalShare*

18〜20％

Competitors

ETHICON:

U.S.

Medtronic:

U.S.

AppliedMedical: U.S.

【Emerging countries】
 Expectations of market expansion inconjunction with trend toward minimallyinvasive surgery (shift from open surgery
to laparoscopic surgery)14

2016/3/30

No data copy / No data transfer permitted* Source: Olympus Corporation

Todayʼs Agenda

1. Business Overview2. Recognition of Current Conditions
3. Market Trends
4. Business Strategies
5. Targets and Indicators15

2016/3/30

No data copy / No data transfer permitted

Business Strategies

Establish new de facto standard in surgical imaging
marketSecure No. 3 position in energy device market andencroach upon No. 2 and No. 1 positions
Establish disposable device business model
Fully leverage Olympusʼ strength in GI field

16

2016/3/30

No data copy / No data transfer permitted

Priority Measure

17

Strategy

Priority Measure

１

Establish new de facto
standard in surgical imaging
market1. Complete 4K/3D imaging chains
2. Propose 4K worlds through OR system integration

２

Secure No. 3 position inenergy device market and3. Broaden energy product portfolio and shorten theproduct development cycle
encroach upon No. 2 and No. 1positions

３

Establish disposable device
business model

4. Refine CRM and enhance sales approach based onprocedures
5. Promote clinical and economic value of Olympus
products

４

Fully leverage Olympusʼ
strength in GI field

6. Promote flexible endoscope utilization in the ORand develop new minimally invasive treatmentwith flexible endoscope

2016/3/30

No data copy / No data transfer permitted

P.M.１. Complete 4K/3D Imaging Chains Merge SONY electric imaging technology with OLYMPUS opticaltechnology and medical instrument development experience
High luminancelight sources

Low-chromaticaberration opticallenses

High-resolution
imaging sensors

High-speed
signaltransmission

Signal analysis
algorisms

High-resolution
monitors

55inch18

2016/3/30

No data copy / No data transfer permitted

P.M.2. 4K world, OR Systems Integration
 Provide 4K solution in all related imaging chains

4K camera control
units

4K monitors

4K recorders

4K camera heads

4K compatible
rigid endoscopes

4K content
management systems

4K IP converters

19

2016/3/30

No data copy / No data transfer permitted

P.M.3. Energy Device Portfolio Expansion

Next Generation
THUNDERBEATPK Device
for Gynecology

EnergyPlatform Device development for procedures- Laparoscopic surgery, open surgery- Ultrasonic, bipolar, combined
 Speedier development utilizing
simulation technology and modular
designPK Device forOpen Surgery

THUNDERBEAT
for Head & NeckSurgery

New Device forOpen Surgery

THUNDERBEAT forOpen Surgery

THUNDERBEATFor OpenSurgery
For LapSurgery

2013

2014

2015

2016

2017

2018

2019

2020

Sales History and Projection of Energy Device (US and EU market)

20

2016/3/30

No data copy / No data transfer permitted

 Collaborate with the R&D andmanufacturing facilities in the US & EU

P.M.4. Refine CRM and enhance sales approach Purchasing cycle for disposable devices is totally different
from capital products⁃ Wide variety of devices are used for various procedures with different
HCPs⁃ Purchasing decisions made for each case
⁃ Need to refine CRM system and enhance sales approach21

2016/3/30

Customer Information

Sales Cycle

Capital productInstallation & renewal
history

３〜５years

Disposable device

Daily procedure # ineach specialty

Daily procedures

No data copy / No data transfer permitted

P.M.5. Promote clinical and economic value
THUNDERBEAT
THUNDERBEAT
THUNDERBEAT Product Specifications
 Clinical efficacy
 Economic benefit
22

2016/4/19

Wet lab.
evaluation

THUNDERBEAT
THUNDERBEAT
THUNDERBEAT
VAC
VACPACKPACKVAC PACKVAC：Value Analysis Committee

Vessel sealing
durability
Cutting speed
evaluation
Thermal spread
evaluation
22

2016/3/30

No data copy / No data transfer permitted

P.M.6. Expand endoscope application in OR
 Expand endoscope application for surgical procedure Enhance procedure development for minimally invasive treatment

Enhance R&D realizing new
minimally invasive treatment withflexible endoscope
Per-Oral Endoscopic Myotomy

Sales of Flexible Endoscope for OR(US market)
23

2016/3/30

No data copy / No data transfer permitted

Confirm Anastomosis inColorectal Surgery

Development of Endoscopic
Treatment Assistance System

Todayʼs Agenda

1. Business Overview
2. Recognition of Current Conditions
3. Market Trends
4. Business Strategies
5. Targets and Indicators
24

2016/3/30

No data copy / No data transfer permitted

Targets and Indicators

Total GS : CAGR of 11%

Surgical imaging: CAGR of 10%
Energy : CAGR of 14%

25

2016/3/30

No data copy / No data transfer permitted

Disclaimer

This presentation is for your general knowledge and background only.
Olympus makes no representations warranties or other expressed or
implied warranties or guarantees regarding the accuracy, reliability orcompleteness of the information. Proper attribution should be provided forany use of the information contained in this presentation. Under nocircumstance shall Olympus or its employees, consultants, agents orrepresentatives be liable for any costs (whether direct, indirect, special,incidental, consequential or otherwise) that may arise from or be incurredin connection with the information provided or any use thereof.

27

2016/3/30

No data copy / No data transfer permitted