Olympus Corporation

FY26 guidance trimmed (constant-currency revenue down ~2%); main near-term drag is “ship holds” (SIS) and smaller GI disruption; management calls it largely one-off - The company revised revenue guidance down ~2% on a constant-currency basis (per Page 9 reference in Q&A). - SIS impact: a significant ship hold/voluntary recall is cited as “dramatic” and explains much of the earnings/guidance pressure. - GI impact: ship holds occurred in GI too but “not nearly as significant”; GI is expected to recover as products are released. - Gross margin pressure: gross margin was revised down, attributed less to lasting mix change and more to COGS impacts from ship-hold-related actions (inventory/corrective actions/disposal/recall-related costs).

Q3 execution miss in the U.S. (GI): problem is commercial execution—pipeline not converted—not product competitiveness - Management explicitly said they are not satisfied with U.S. Q3 performance. - Keith Boettiger: sales execution/pipeline conversion was the root cause—they had a pipeline but didn’t convert it. - They stressed competitiveness/clinician engagement remains strong; the issue was execution discipline in the U.S. - Confidence for Q4 U.S. growth returning is tied to tighter conversion oversight and process controls (citing China as an example of tightening go-to-market + pipeline governance leading to growth after declines).

FDA inspection observations: still an open matter; patient-safety product holds already released partially, with remediation ongoing - FDA inspections occurred at 8 facilities across the U.S., Europe, and Japan; some resulted in observations. - Management emphasized: - Some observations predated Elevate (Elevation integration work), others relate to advancing maturity/consistency of integrated quality systems. - FDA evaluation is still ongoing (open matter). - Proactive patient-safety actions led to product ship holds; ~70% of impacted products were released, ~30% still being remediated. - Costs/expense framing: management said related costs are expected to be handled largely within SG&A (not treated like Elevate-related restructuring costs). - Forward-looking risk: guidance ranges do not assume additional ship holds; they’re mainly to reflect timing/dynamic release of currently held products.