Good evening, good afternoon, good morning. I'm Chikashi Takeda. Thank you very much for taking time out of your tight schedule to participate in the conference call for the financial results for the first quarter and full-year forecast for fiscal 2022. I'd like to give you the overview of the financial results for the first quarter, as well as our full-year forecast. Please turn to slide three. Here you can see the highlights of the consolidated financial results for the first quarter of fiscal 2022. First, our revenue. Reflecting the market recovery, revenue grew significantly by over 40%, driven by medical. The revenue was well above the pre-pandemic fiscal 2020 level, 11% increase. In addition to higher revenue, we continued to optimize SG&A expenses and achieved an operating margin of 14.4%, leading to record highs in terms of both amount and ratio in the first quarter. Next, full-year forecast. In light of the first quarter performance and market recovery, we have revised upward our forecast for revenue and operating profit. Compared with fiscal 2021, we now expect a 14% increase in revenue with an operating margin of about 17%, an improvement of 5.7 percentage points. Consolidated financial results and business review for the first quarter are as follows. Please turn to slide five. Consolidated revenue totaled JPY 191.5 billion. Driven by market recovery, revenue increased across all businesses, particularly medical, resulting in a growth of over 40%. Revenue was well above the pre-pandemic fiscal 2020 level, up 11%. Gross profit was JPY 123.3 billion, with gross margin improving 2 percentage points, driven by higher revenue and improved factory operation rates. SG&A expenses totaled JPY 95.8 billion, with SG&A ratio improving 8.8 points. With relaxation of restrictions on sales activities, strengthening of our operational infrastructure, and measures to improve profitability, SG&A expenses increased in amount, but we managed to keep SG&A ratio at 50%, with strong contribution of higher revenue. Operating profit was JPY 27.6 billion with an operating margin of 14.4%, an improvement of 11.7 points. These results represent record highs in terms of amount and ratio for the first quarter since fiscal 2009, when we began disclosing quarterly report. Profit attributable to owners appearing was JPY 18.7 billion, up JPY 21.4 billion year-on-year. Please turn to slide six. To facilitate a better understanding of business conditions, we have been enhancing disclosures on our product pipeline and others since last fiscal year. Previously, we shared business division-based information such as growth rate and qualitative information, with a focus on ESD and TSD. Starting from this fiscal year, we will provide additional information on each sub-segment of the three business divisions. In addition, starting from this fiscal year, bronchoscopes, which were classified in the GI endoscope segment of ESD, have been transferred into the respiratory segment of TSD with the aim of strengthening operations in the respiratory field. Last fiscal year's actuals have also been restated in the same manner to allow comparisons. For FY 2020, the figures are not restated. In the ensuing presentation, when we compare to the results of fiscal year ending March 2020, they are based on the managerial basis for your information. Please keep that in mind when you compare the figures. Slide seven. A look at details of each business segment. First, the ESD, Endoscopic Solutions Division. Revenue totaled JPY 100 billion, up 35% compared with the same period of the previous year, which was heavily impacted by COVID-19. Revenue grew significantly across all sub-segments on market recovery. We don't have the restated figures for ESD and TSD for FY 2020 due to the changes in disclosure classification as I described earlier. For your information, we achieved 9% growth compared with the FY 2020 on a representing a significant growth over the pre-pandemic level. In GI endoscope, revenue grew across the regions with notable strength in Japan, Europe, and North America. By product, GI endoscopy system, including EVIS X1 and various scopes such as gastroscopes and colonoscopes, contributed to sales increase. In surgical endoscope, VISERA ELITE II surgical endoscopy system recorded strong sales driven by ongoing switch to VISERA ELITE II in Japan and North America. In medical service, we have been enjoying a stable revenue based on service contracts, including maintenance service. The number of repairs increased across regions, a rebound from pandemic-related decline last year. Operating profit was JPY 22.7 billion with an operating margin of 22.7%. Expenses increased due to relaxation of restrictions on sales activities. We also recorded an impairment loss of JPY 1.7 billion associated with the equity method investment in an equity method affiliate in Europe. These expenses were offset by revenue recovery and the continuing cost control, resulting in a significant improvement in operating margin. Slide eight. The Therapeutic Solutions Division revenue totaled JPY 63.6 billion, up 48%. In the same period of last year, the number of procedures declined significantly due to COVID-19, the number has recovered since the beginning of this fiscal year, resulting in significant growth across all sub-segments. Compared with the pre-pandemic fiscal 2020 level, we achieved 8% growth on a managerial basis. For your information. In GI endotherapy, recovery in the number of procedures resulted in growth across all regions and product groups. Performance was particularly strong in North America, where vaccination has progressed and the number of procedures is on the rise. With notable momentum in sampling products such as biopsy forceps for tissue sampling and screening endoscopy, as well as product for ESD and EMR procedures. Urology achieved significant growth driven by North America and Europe, where the number of procedures has recovered. Performance was particularly strong in North America, where the number of procedures has returned to pre-pandemic levels, led by resection electrodes for benign prostatic hyperplasia and Focus, SuperPulsed laser system, a lithotripsy solution for urinary stones. In respiratory, growth was driven by North America on market recovery. Revenue from Veran Medical Technologies and strong momentum in bronchoscope and endotherapy product for EBUS- TBNA made all the contributions. In other therapeutic areas, we saw strong performance in energy devices, gynecology, and ENT. In particular, THUNDERBEAT, a surgical tissue management system, and ENT scopes contributed to sales increase. Operating profit was JPY 14.1 billion, with an operating margin of 22.1%. Despite an increase in expenses due to relaxation of restrictions on sales activities, the operating margin improved substantially due to significant sales increase coupled with ongoing cost control, as well as a gain of JPY 2.8 billion in other income associated with the phased acquisition of Medi-Tate. Slide nine. The Scientific Solutions Division. Revenue is JPY 24.8 billion, up 40%. Compared with fiscal 2020, 8% growth on a managerial basis, exceeding the pre-pandemic level. For your information. In life science, growth achieved across all regions on market recovery and improved budget execution at research institutions and universities. In particular, biological microscopes in North America, where market conditions remarkably rebounded due to relaxation of restrictions on sales activities contributed to growth. In industrial, we achieved growth in all fields driven by market recovery, led by improved CapEx sentiment. In China, there was strong momentum in industrial microscopes due to 5G-related electronic component and semiconductor markets. Increased sales of nondestructive testing instruments also contributed to growth in relation to market recovery. X-ray fluorescence analyzers were also strong, boosted by high gold prices and strong recycling market of precious metals. Operating profit was JPY 1.9 billion with an operating margin of 7.5%, representing a considerable improvement from last year's operating loss, due mainly to revenue recovery and improved factory operation rates. Slide 10. Financial position as of June 30th. Goodwill and intangible assets increased due to the acquisition of Medi-Tate and others. The equity ratio rose 1.7 percentage points to 35% from the end of March due to a decline in interest-bearing debt. Please note that approximately 72 million treasury shares were canceled in June. Please turn to slide 11. This is the status of the cash flows. Cash flow from operating activities was JPY 23.7 billion, up 182% year-over-year. While operating cash flow increased significantly due to improved profit, there was a one-off expenditure of about JPY 9 billion on the reversal of provision for the Career Support for External Opportunity Program. Cash flow from investment activities declined JPY 21.2 billion year-over-year to - JPY 33.5 billion, due in part to an expenditure of about JPY 21 billion associated with the acquisition of Medi-Tate. Free cash flow remained positive if the expenditures for the reversal of the provision for the Career Support for External Opportunity Program and for the acquisition of Medi-Tate are added back. Cash flow from financing activities declined JPY 150.8 billion to - JPY 39 billion, due mainly to borrowing repayments and dividend payments. In the last fiscal year, there was a large amount of financing to deal with COVID-19. As a result, cash and cash equivalents as of June 30th, 2021, stood at JPY 168.7 billion, a decrease of JPY 102 billion. I would like to explain about the full year forecast for fiscal year 2022. Please turn to page, excuse me, slide 13. Our full year forecast for fiscal year 2022, which was originally announced in May, have been revised upwards in light of our first quarter performance and market recovery. Revenue was revised by JPY 24 billion and operating profit by JPY 14 billion. We now forecast revenue to grow 14% year-over-year to JPY 830 billion and expect operating profit of JPY 140 billion with an operating margin of 16.9% and improvement of 5.7 points. We also forecast profit attributable to owners of parent of JPY 101 billion. Please note that this represents record highs for all lines. Compared with pre-pandemic fiscal year 2020, these forecasts represent 10% growth in revenue, 52% growth in operating profit, and 4.7 percentage points improvement in operating margin. We plan to pay a dividend of JPY 14 per share for this fiscal year, unchanged since announced in May. The forecast assumptions are JPY 108 per dollar and JPY 130 per euro. The intergroup reorganization of the Scientific Solutions Business is currently under consideration, and expenditures related to this are not included in this forecast. Please turn to page slide 14. This is the forecast by business segment. Our forecast for both revenue and operating profit have been revised upwards across all business segments. In particular, Medical Business, including ESD and TSD, is expected to grow 10% in revenue and 25% in operating profit compared with pre-pandemic fiscal year 2020, and is expected to achieve record highs in both revenue and operating profit. We are pleased to announce that we resumed shipment of EVIS X1 endoscope from July, from which we voluntarily suspended shipments last October. As the resumption of shipments is in line with the original schedule, there is no significant impact on business performance forecast. We believe that expanding sales of EVIS X1 will help us achieve this revised forecast. Lastly, I would like to highlight some of the initiatives we are pursuing to become a truly global med-tech company. Please turn to slide 16. This is the product pipeline for ESD. There are no major changes from the previous quarter, in response to relaxation of restrictions on sales activities as well as the resumption of endoscope shipments, we will focus on expanding sales of EVIS X1 in Europe, Japan, and some parts of Asia where we have already launched the product. We will also aim to launch it in regions where we haven't launched it yet. Regarding VISERA ELITE II surgical endoscopy system, we will actively promote 3D and IR system through demonstrations in North America to further expand sales. Please turn to slide 17. This is the product pipeline for TSD. In GI endotherapy, we are committed to steadily expanding and growing the product lineup, including products developed in-house and those procured externally. In urology, as I mentioned in the page for TSD results, we are seeing strong momentum in our SOLTIVE SuperPulsed laser system, a new lithotripsy solution for urinary stones. We'll also strengthen our solutions for BPH by promoting resection electrodes, a growth driver, and iTind, a minimally invasive therapeutic device from Medi-Tate, for which we just completed the acquisition. In respiratory, we have transferred bronchoscope, which were previously classified under the GI endoscope segment in ESD to the respiratory segment in TSD, adding the lineup of bronchoscope and ultrasound bronchoscope to the pipeline. We aim to create synergies between the product portfolios of Olympus and Veran Medical and expand our lung cancer portfolio. Please turn to slide 18. Our theme for fiscal year 2022 is to further strengthen our position as a global med tech company. We are working to continue and establish the corporate transformation we carried out last year. We are steadily promoting measures to transform it to becoming a global med tech company, such as commencement of consideration of inter-group organization of SSD, promoting global business services in each region, and making Medi-Tate a subsidiary. Regarding GBS, the global business service, we established Olympus Asia Pacific Business Management Services in Dalian in China, and have begun to integrate and transfer some indirect operations in Japan, China, and some parts of Asia. We will continue to pursue these initiatives and plan to roll them out globally. Please turn to slide 19. This is our last slide. We plan to hold Investor Day 2021 on December 7th for the first time in three years. Details, including topics on how to participate, will be provided once this is finalized. We look forward to your participation. This concludes my presentation. Thank you for your attention. Thank you. We will now take questions. My first question is on the full year forecast for ESD and TSD. Could you elaborate on the reason for the upward revisions for ESD, if possible? Can you speak per product area? For ESD, compared to an upward revision amount of revenues, looks like the upward revision amount of operating profit is not large. Are you expecting some one-off expenses to be incurred? Thank you for your question. Mainly, ESD is where we made the upward revision. Majority, although we are not disclosing that far, mostly in relation to GI endoscopy, the GI business unit. At the last briefing, we had some discussion on this, and I think I indicated that we are taking a rather cautious view. Looking at the results over the past three months, we felt that there is a room for upside or upward revision. It was with that in mind that we said we are taking a rather cautious view three months ago. Now, after three months, for example, in Japan, compared to other regions, three months ago, some said that the business is weaker. It was based on that assumption that we put together our forecast three months ago. Looking at more recent results, the momentum that we started to see last year were confirmed to be continuing. That is about Japan. Even in other regions, we see similar room for upward revision. It is based on that we made the upward revision to our forecast, mainly on ESD. I can't single out any product or product area, but rather it is more generic condition warranting an upside. Hold on. Thank you for waiting. The other question that you asked. Looking at the ESD profit upward revision in forecast. In the first quarter, we recognized the impairment loss in relation to the equity method subsidiary, the affiliate. Other than that, there are no special factors to note. Was that helpful? Yes. Thank you. Yes. Thank you. I have a follow-up question about endoscope. Shipment in April were the assumptions that were already included. Back in May, I think you said that you were taking a cautious view because you weren't sure if the shipments could be made or not. Could you clarify that? Regarding the endoscope, the root cause had been identified, and we were able to work on the issue. It was a program issue, and what took time was the documentation and other matters. The shipment of endoscope. I don't think I said it is uncertain whether we could make the shipment. Maybe there was miscommunication. That was true back in May and also back in February. I don't think I said that there are uncertainties regarding the actual timing of the shipment. There are various steps that we had to go through, and therefore, we decided not to disclose that information very proactively. From the mid to late July, the shipments were made. The schedule itself, although it was not included in communication with you, but it was nearly in line with the assumption that we used in our previous forecast. It's not just the timing of the endoscope shipment that triggered the upward revision in the EPS. I hope that explains. Yes. Thank you. Just one more clarification. About the SG&A expenses that increased in the first quarter, could you give us the breakdown, like what is the foreign exchange, what is the sales and marketing? Are you asking me the first quarter or the full year? I mean the first quarter. First quarter results. About JPY 15 billion increase, I think. Yes. Basically, the sales activities became more active due to the relaxation of restrictions. Overall, expenses increased, especially compared to the same period of the previous year. The sales promotion and travel expenses increased in a much smaller rate. That's the general overview. Foreign exchange, about JPY 4 billion. The Forex impact, JPY 4 billion or so. This is a quarterly spend, so it's going to be very detailed, but as we've been saying, the IT-related investment and the operational infrastructure enhancement, and for the future benefit, we made various investments in preparation for the future, amounting to JPY 4 billion-JPY 5 billion. R&D expenses also went up. Foreign exchange and some new initiative-related expenses, I think, would be the specific factors. I see. Thank you. This time around, the ESD. In terms of the bronchoscope, you have reclassified to TSD, and then you have given us some information about that. The year-over-year comparison is meaningless. I would like to have a two years before the figures for March 2020 to some retrospective adjustments included. Compared to two years ago, how much has this grown? I would like to hear about that. This year, ESD and TSD for this year's forecast, compared to March 2020, how much this is going to grow? You're talking about ESD and TSD, how much it has grown compared to March 2020. Again, to March 2020 figures. We have no official reclassification, but we have some managerial numbers that we can give you. Based on that internal number, compared to March 2020, ESD and TSD, in total it's 5.8% for ESD. For TSD, 9.3% growth. Thank you. Based on the information, I would like to continue our discussion. On page seven of the presentation, on the very bottom, you show that ESD in first quarter compared to two years ago, 9% growth. If you look at the next page for TSD, compared to two years ago, first quarter, 8% growth. The growth of ESD compared to TSD is stronger for the first quarter. I think that was a bit of a surprise to me. The number of procedures in line with that, the TSD's numbers go up. Compared to capital intensive ESD, even compared to two years ago, it was a bit low. Can you give me the reason behind this? TSD's growth has been higher. Sorry, I just lost the logic. TSD, 9.3%. These are ESD 5.8%, that's for the full year. For the first quarter, ESD plus 9% and TSD plus 8%. I think you have explained in that manner. Against the full year, I think the trend is reversed for the first quarter. The TSD's growth in the first quarter maybe is not as strong as you're expecting. Can you give us the reason behind this? Would you hold on a bit? We'll discuss it. Let me come back to you afterwards. Understood. As a follow-up question, this is page two under the financial data page to the number of employees. In terms of TSD quarter-on-quarter, 300 people has declined, about 200 in overseas. I think there was a substantial decline of the number of employees. I think basically the system they have for the extra opportunities for the domestic employees. The overseas TSD decline employees, is it intentional? Is it going to continue to decline? Let me confirm. Excuse me. Again, let me get back to you later. Maybe in the latter half of this earnings session, I would like to get back to you about this. Understood. Thank you. My question is this. For the first quarter, TSD, ESD, both very strong. Compared to your peers, you did extremely well, and the profit margin improved. The question is whether this is sustainable or not. Your peers say that maybe it's going to end in Q3, and others say that the assurance push is going to wear out as well, not only in Japan, but China as well. First quarter results, because of the infection pandemic, I think lots of subsidies, lots of the deep pocket on the part of the hospitals. What about Q2? What is your projection for Q2 compared to Q1? The question is whether the momentum that we saw in Q1 could be sustained in Q2, Q3, Q4. In other words, on a full year basis. I think that's your question. We do have the guidance for the full year, but simply put, multiplied by four or larger is the full year forecast that we have compared to the 1st quarter. Since the latter half of last fiscal year, we are seeing the year-on-year improvement continuing, especially with the less impact of COVID-19. In other words, the procedures increasing in number and also the budget being implemented for the capital products. These are the favorable factors within Olympus. As I briefly mentioned in my presentation, it's not the type of product that will generate a big sale with one unit, but the new launches that we made in recent years are maintaining sales contribution. In light of all those factors, we believe that this momentum will be maintained to a certain extent and the revised guidance, we believe that revenue forecast would be achieved. I hope that answers your question. Yes. Thank you. A follow-up question. Japan, China, and North America, EVIS X1 and EXERA, the high price tag products. Is it the case that the hospital demand for those high price products is increasing? Your question was kind of choppy, but I take it that you are suspecting that there is a stronger demand for high-end, high price tag products. Yes, because they have the budget for that. That's my question. Thank you for your clarification. I can't speak on behalf of the customers, but our products basically, compared to our competition, do have added value. We have the differentiated features, which I think is resulting in what you described. I think that's a valid view. Thank you. That's very helpful. Thank you for taking my question. In terms of the TSD, the first quarter profitability has been quite high. What has been the highest contributor to the high profitability of TSD? Excuse me, I think this is about the connection. I'm just assuming that you're asking this question for the TSD, this quarter's operating profitability has been quite high, and you're asking the major reasons behind it. I assume that that was your question. First of all, as extraordinary factor in this quarter, in this TSD segment, there has been one major factor here. We have acquired a company called Medi-Tate, and with this, there is a JPY 2.8 billion of gains from a phase acquisition gains. Medi-Tate, before we acquired them, we had 18%-19% of equity in Medi-Tate. Through this transaction, it means that our equity holdings in Medi-Tate has been accounted for a new value and the gains from accounting methodology, it has to be categorized as other gains. Because of this, JPY 2.8 billion of gains in the first quarter has been accounted for with the TSD segment. Now, that was the one major plus factor. Even putting this aside, in terms of the numbers compared to the past, we have been able to achieve a high level of margin. I think this is a combination of various factors. Well, in a nutshell, through the top line growth and the cost and expenses, we have strictly controlled our spending. I think that summarizes the whole situation. That's all for me. Thank you. A follow-up question. From the second quarter onwards, when you look at the margins, there may be some positive factors, negative factors, or some risks that you have reflected. Can you talk about that? The first quarter, I think basically you said that the gains coming from the higher utilization and the second quarter onwards, how this is going to come out. Can you follow up on this point as well? I think your question is asking about whether there are further extraordinary factors that you will have to account for TSD going forward. In our forecast, this phase, the acquisition gains or those type of major factors are not reflected. I think this can be said overall for our business, but towards Q4, there is a trend that the expense is going to increase even in TSD. When we come to the end of the year and close the books, basically, we will be operating quarter by quarter so that we can achieve our forecast. Thank you. One question. Let's focus on China. Looking at the supplementary material, page four, on a local currency basis, the region-by-region results. For ESD China, first quarter, 8% increase year-on-year, TSD, +1%. I get the impression this is rather low. ESD, TSD, why is it so low, is the question? For example, for ESD, there are policies to enhance endoscopy. Prior to COVID, 20%-30% revenue increase was achieved. In the fourth quarter of last fiscal year, you had a similar figure. In Q1, it went down again. Now, 1% growth for TSD. This is rather low when we think of the increase in procedures. Can you talk about the reason why the revenue growth for ESD and TSD in China is kept as single digit? Thank you for your question. For China, the impact of COVID-19 was felt ahead of other regions. I wouldn't say it was a result, but improvement or recovery was observed ahead of other regions as well. There is a timing gap between China and other regions. Relatively speaking, for Q1, the growth rate appeared to be low. That's the big picture. For this year, generally speaking, compared to other regions, the growth rate is lower. Still, certain growth is expected. You talked about government policies. They're not having major impact on our business. This is nothing new. It's been talked about for some time. For example, concentrated procurement by China policy. These are being promoted in China. Regarding TSD, it is considered as part of the risk factor. We don't take a view that they are having a major impact on the figures. We have from ESD, Kawano-san and Kuramoto-san from TSD. Maybe they can make some additional comments. Kawano from ESD. Thank you for your question. Q1 results for China, you're correct. Single-digit growth. The market itself is not slowing down significantly? No. The biggest factor is the Buy China policy as a guidance. It was announced in May, the budget execution is slightly slowing down. That's what happened during the first quarter. Once the budget execution resumes, we believe that we will again see the double-digit growth. That is the answer that I can provide. Thank you. This is Kuramoto from TSD. I also would like to add comments regarding China. Like ESD, the Buy China policy is having an impact, especially the bronchoscope, which has a high profit margin within TSD. In particular, regarding RE, there was special demand last year that we enjoyed in relation to COVID-19. Because it was brought under control earlier than others in China, and therefore, that procurement amount declined somewhat year-on-year. On the other hand, in some parts of China, there is still the COVID-19 infection, and so procurement is still active. There are some uncertainties, and we believe that is one of the reasons why the growth rate is kept at single digits. I see. Thank you. I have a follow-up question. The Buy China policy that has been mentioned several times, for ESD and TSD, are you seeing the local players gaining the market share, winning the market share from you? I think you have made the upward revision to both ESD and TSD on a full year basis, on a company-wide basis, and I'm wondering whether China is one factor for the revision. Thank you for your question. Regarding ESD, the Buy China, is the guideline by the national government. Depending on some provinces, whether to honor that or not, whether to implement that immediately or not, they're all different, which is complicating the situation. In terms of the ESD products, for endoscopes, of course, there are Chinese manufacturers of endoscopes. The doctors prefer Japanese brands, including Olympus. We don't expect much impact. The surgical imaging, there are many local products. Going forward, we expect competition. Again, situation varies from province to province and also depending on the price category. The situations vary as to the quota that is being imposed on by China. We are dealing on a province by province basis. Overall, in accordance with the upward revision, we are asking our Chinese business people to make efforts so as to increase their sales as well. For TSD, similar trend, no additional information. Understood. Thank you. That's all from me. Thank you. I entered the conference in the midst, maybe some person asked the same question. This is a very simple question. ESD and TSD, and thank you very much for discussing, having these subsegments shown. This is very useful because you don't know what's happening in each of these businesses. In terms of the GI endoscope, well, maybe I wasn't listening to what was explained. It's going to recover. That's okay. 9% of growth compared to March 2023 seems to be quite strong. Is there a difference by region? Can you give me some color on that? Thank you for your question. Well, actually, a similar question was asked. We are looking into this, so please hold on. Well, actually, I will get back to you later. Is that okay with you about this question? Oh, what should I do? If you have another question, maybe we can answer that first. Okay. The second question is the urology. It seems to have grown a lot. Inside this, for instance, cystoscopes, electrodes, resection electrodes in terms of the urine stones, I think maybe BPH will be higher. With lithotripsy as well. If your BPH increases, I think the margin there should be quite high. I think, assume, that this is contributing to your improvement of the margin. In terms of the SOLTIVE SuperPulsed, you have shown this here. What has been the driver of the improvement of the urology? In terms of these, lithotripsy and electrodes, these are growing. Within urology, these two stand out as contributors. Which is the high contributors or in terms of the values? We are not disclosing about that, the reason for TSD is improving. The major reasons are these two: urology, BPH, and stone management. SOLTIVE, I don't have that data. In terms of Holmium laser, it's the number one in the world. Structurally, I think hypothetically or theoretically, it has a high benefit. It's strange. I find it very interesting that it's selling a lot already. In terms of the Holmium laser, is that in itself a benefit, or you do already have some clinical data about that? Can you elaborate on that point? Today, from TSD, we have Kuramoto, and from ESD, Kawano. The top of each of the businesses are here with us. Kuramoto-san will explain. Yes, this is Kuramoto speaking. As you have pointed out, the growth driver, BPH, the plasma electrodes, is the major contributor. The reason behind this is that due to COVID-19, in terms of basically these procedures, I think this has been held back and then has restarted, and I think that has contributed to high growth in terms of these sites, as BPH plasma electrodes is the major contributor. SOLTIVE, the doctors seem to highly appreciate this, and gradually the sales is going up. In terms of consumables, margins are good, and we are expecting further growth. Actually, in SOLTIVE, the Holmium laser, in the stones, it can make them into very small pieces. For instance, shorter treatment time, no blocking the view, that has been the benefit of this product. Yes, SOLTIVE, it is a laser that absorbs the water wavelength. I think the evidence is very, very visible because people, the doctors looking at the endoscope, and they can actually see that the stones are more finer. I think in that sense, that is already your competitive edge. Yes, that's what we think. The Holmium laser you have developed, I mean, Holmium laser, it's only you, right? You are collaborating with a laser company to develop this, meaning that other companies will not be able to develop this. Yes, that's correct. Well, Kohtani-san, you asked a similar question with another person. Your question is similar to another question. This is homework for us, so let us get back to you later, and let us move on. I have a very similar question to the question asked by Nishimura-san. A very rudimentary question, I have to apologize. The profitability, I think, has been about 18% since the third quarter of last fiscal year, excluding the special factors. 2018, 2019, the sales were around JPY 210 billion, and operating margin was 12%. Whereas this time, if you exclude the restatement, JPY 250 billion. No, JPY 230 billion sales revenue. 18% since the latter half of last fiscal year. Is that sustainable? Is the first part of my question. Increase from 12%- 18%, is it because of revenue increase and transfer from Olympus initiative effect and others? If you look at those different factors, how much coming from what? Thank you for your question. First, whether this is sustainable or not, I'm afraid I have to repeat what I said earlier. If you look at the full year guidance, that should be the answer to your question. Generally speaking, there is a special factor amounting to JPY 2.8 billion, but excluding that, it fits within the figure mentioned. The answer simply would be yes, it is sustainable. In my response earlier to the question, there's something that I forgot to mention. The bronchoscope respiratory system scope is included. That, to a certain extent, is contributing to improved profitability. In any event, the answer to your question would be yes. Compared to maybe two years ago, even on the pre-restatement basis, maybe 6% improvement. Can you break those into different sectors? No. Just two or three years ago, compared to two or three years ago, improvement of 5%-6%. Can you give us the factors? Yes. If we could go back the history, the write-off of the intangible asset related to Gyrus. That being behind us, the profit margin is improving. That's one special factor that I can point to. I see. Thank you. Sorry for asking rather stupid question. I take it that within the supplement that you disclosed, the profitability is improving and TSD overall is seeing an improvement in profitability. I was wondering if you could give us the factors behind that. Yes, revenue increase and the COGS ratio improvement. As mentioned earlier, we have a very strict cost control measures being implemented. Those factors combined are improving the profitability, is all I can say. Got it. Thank you. The full year operating profit, how should I think about it? 16.9% is the new outlook, and the first quarter is 14% level. In terms of progress, I think it's just 20% against the full year. Going forward, is there any quarter, it's not a quarter that the top line is going to go up, this JPY 200 billion, multiply by four JPY 800 billion plus. Is there a quarter that the margin is going to go up substantially? So, i n terms of how the expense is going to come out by each quarter is different. From the following three quarters, maybe that is one of the reasons that the margin may be different quarter by quarter. Maybe to high level. Maybe you want more details? Oh, okay. In the first quarter, you have this phase, some acquisition profit, but I think basically you have the extraordinary factors, but on that basis is zero. For the extraordinary gains, the plus or minus, are there any other factors that will push up the operating profit in the remaining nine months? There are no major factors that will push up the operating profit according to our plan currently. In the remaining nine months. Go ahead. In the remaining nine months, so the extraordinary losses will contribute. Rather than that, the actual core operating profit will improve, and as a result, the 16.9% of operating margin will be achieved. That is what you're saying? Yes. There are some individual factors that I can point out, but overall, in the following nine months, up until the SG&A line, we'll be seeing improvements. Thank you. One follow-up question. At the beginning of the year, the U.S. growth, you were not forecasting that strong growth. After the first quarter closed, have you changed your outlook about the U.S.A.? Well, basically, there has been no new events. Our outlook is not changed about the U.S. The assumptions, the market, it has not changed from your initial outlook? Yes, that's true. Until the end of scope business, may be some upside, but fundamentally, no changes this year. I think this year will be the market that we will struggle the most because Matsu-san has explained about that previously, because the new products, unfortunately this year, we cannot launch new products here. We have to do with the existing products. Of course, in terms of scopes, there are some new products, but in terms of the sales coming from these new scopes, we'll be striving to achieve the target for the U.S. Understood. Thank you. You said that the market situation hasn't changed much, but in terms of the number of procedures, I have a question. In urology I think there was a pent-up demand. In first quarter, in what sub-segment did you observe the pent-up demand? What was the size of that impact? For example, in the U.S., da Vinci, their earnings report say that in Q2, there's still the pent-up demand. What is your view regarding this pent-up demand for Q2? We apologize, but we had some technical communication issue. Maybe it is our problem, but we only got 40% of your question. 60%, the connection was choppy. If you could just summarize your question, we'd appreciate it. The ESD and TSD, in what sub-segment did you see the impact of the pent-up demand relative to the number of procedures? That's my first question. Regarding Q2, if you expect pent-up demand, do you expect this to continue into Q2, is my question. Thank you. Koda from ESD. Let me take up that question relative to ESD. In ESD, as you're aware, basically, it's the capital business. The decrease in number of procedures don't directly impact our business. Of course, the budgets of the hospital, whether it will be executed or not, might be impacted, depending on the number of procedures, because the fewer procedures meaning less income. It's going to be only indirect impact. We don't expect the recovery to be 100% prior to the pre-COVID-19, and maybe another several months or even a year before the number to recover to the pre-COVID level. Situation varies from country to country. In some countries, they are already back in the pre-COVID-19 state, and others, no. We are looking at each country on a specific basis. Kuramoto from TSD. Let me also answer that in terms of sub-segments, as mentioned earlier. As for the elective procedures, urology and the GI and respiratory, the devices related to this have that tendency. In terms of number of units, as was mentioned earlier, the situation varies from country to country. The Delta variant. That infection is really getting serious globally. There still is uncertainty what the situation is going to be going forward. Thank you. I have a follow-up question. In ESD, for surgical endoscopy, you're not seeing impact of pent-up demand? Because in some of the hospital facilities, expecting a recovery from COVID-19, we hear the orders being placed for capital products ahead. I was wondering if that's the case with you also. By region, as of the end of this fiscal year, what is the level of the COVID brought under control? What is the assumption that you have for different regions? Thank you for your question. The first part of your question, the surgical imaging, it's a capital product. What I mentioned earlier applies. When the number of procedures recover, the budget at the hospital, the facilities would see their income go up. Of course, in some of the hospitals, they are placing orders ahead of others. We do see that, but on a limited level. The general trend is, unless the income on the part of the hospitals go up, the orders would not be placed. Be it GI or surgical endoscopes, the situation would be the same. The second part of the question, for FY 2022, as of the end of March FY 2022, to what extent do we expect the COVID situation to be brought under control? Well, that's really hard to say. We are doing what needs to be done. We do have the figures on the best assumption, best case assumption. Expecting, we're hoping that situation will turn out to be better COVID-19 wise. That is the basis of our assumption. Understood. Thank you. This is about ESD, and I would like to ask Kawano-san to respond. By each region, each client from the second quarter onwards, in terms of how the sales is going to grow, I mean by the market outlook and the new product acceptance situation, or in the U.S., you don't have new products. I think there's some conventional products sold well even before new products were released. Can you give us some color, qualitative information about that? Hoya, in terms of the semiconductor procurement, the endoscope processors supply, there is a risk. Hoya has explained about that situation. How about Olympus, about how you take the situation? Yes, thank you for assigning me. I'm Kawano from ESD. I will answer your question. Broadly speaking, EVIS X1, there are countries that use that and do not use that. In terms of Europe, Japan, and Asia, and some Asian countries. When I say some Asian countries, say Hong Kong, India, now since Jakarta is going to introduce and Australia is going to use this. About 75% in Asia, X1 can be introduced. Takeda-san was talking about the issue about ED scope has been resolved, and the shipment has been resumed. Japan, Europe, and Asia, for these markets, including the ED scope, the EVIS X1 sale is going to proceed as planned. In these three regions, as ESD overall, we hope that these will be drivers and then go about our business. For the United States, the X1 introduction will be March 2023. This fiscal year, we'll be struggling, to be frank. Other regions are using this. I think the U.S. doctors are aware of that, and they're holding back of buying the product, and I think that's one risk. To offset that, in terms of the IF2 system, for the PCF, that is the colonoscope, and for the TJF- 190, that is the duodenoscope. By selling these two products, we are hoping that we can offset this holding back of the procurement for the U.S. OER-Elite, we have introduced that. Utilizing these type of products, we want to boost the figures in the U.S. In China, once the market recovers, then the market sales will increase as well. We want to ride the tide, so to speak. However, X1, I think it will take some time to introduce that to the Chinese market. EVIS LUCERA, the conventional model, we would like to sell this model into China, and by doing so, we would want to maintain the double-digit growth of sales that we have been able to have. Of course, there is a COVID-19 risk, at a challenging number, this will be our target, we are determined that we want to grow in China as well. Thank you. A follow-up question, if I may. You asked about the semiconductor issue. Yes, please do so. Currently, in terms of the supply of semiconductors, that is a huge challenge globally. Our procurement division is doing their best to procure the components and parts. Currently, in terms of this year's sales, there will be no impact in terms of the bottleneck of supply. Well, there is a risk of course, but I think basically we'll be able to achieve our targets without any bottlenecks in the supply and everyone in that company doing their best to avoid this current situation. Thank you. One follow-up question from me. ESD and TSD. In terms of how you manage these divisions in your current organization, maybe it's difficult to answer. Under this current organization system, ESD and TSD have co-heads. There are Kawano-san, Kuramoto-san, who basically focus on Japan, and there are some heads that focus on the overseas markets. You have the co-head structure. You have Japanese heads, and we have two people who I assume are foreign people. In terms of ESD and TSD, how does the division of roles work? Because you have co-heads. When you manage these divisions, are there any things that you are looking at or take care of? As far as I can answer, I would like to. This is Kawano, ESD. We have Frank Drewalowski, he's German, and we are the co-heads, myself and Frank. We are managing the business. Actually, with Frank, I have more than 20 years of relationship with him. I think I met him first in 1999, and through various businesses in this company, I have been working with him very closely. I think this co-head system isn't uncomfortable at all. Initially, I thought that maybe we should divide the roles, but in any case, we decided that we two should look over the business. We have different strengths. Naturally, without any explicitly, there is a division of roles. Frank will look at this side, and I will look at this side. It's a natural division of roles. I think there is no debate in terms of who is going to preside over what. I think this co-head system is working very smoothly. Thank you very much for asking. Kuramoto-san, what's your take on TSD? This is Kuramoto from TSD. Yes. Gabriella is a co-head, and she is in the United States. We are managing the division. I have worked in the U.S. for a long period of time in terms of the U.S. market, in terms of the business therapeutic solution, business market condition. I understand that fully. With Gabriella, I feel quite comfortable with working with her. I work from Japan, and I think we can leverage that as a benefit. In terms of the TSD, we have the manufacturing site in Aomori. In terms of the bronchoscope, it's in Aizu. This development and the manufacturing sites are communicating closely. I may be the right person to look over that because I physically work here. We divide our responsibility that way. It's only three months plus that we have been working this way, but I think we have been able to smoothly operate this business. Aside from your question that you asked. From my side, I answered about the Thulium laser. Sorry, I gave you some misinformation. I said that we, Olympus, is the only company, but actually, there's one company in Europe, Quanta System Fiber Dust, is it? Quanta System Fiber Dust, they produce a Thulium laser. We were ahead in North America. We are the only company that provides a Thulium laser. Because we have this sales capability and we are ahead of this technology, we want to monopolize this market. Correction, if you may. In TSD, the business development in TSD, that is mainly led by the United States? That's a follow-up. Yes. In the U.S., there are new technologies and new movements that they come out ahead in the United States. Business development, more or less, is led by the United States. Thank you. Sakurai from IR. I would like to respond to the earlier questions. Koike-san from UBS and Kohtani-san from Nomura asked a question about ESD, TSD results compared to FY 2020. We don't have enough data to answer that question, and also the question from Koike-san about the number of employees for TSD, ESD. We would like to get back to you on that later, maybe by next Wednesday, we'd like to respond to that. We will be uploading the Q&A from this earnings briefing on our webpage. Please refer to that QA document that we'll be uploading for the answers, please, because we don't have the sufficient information to answer your question. Looks like there are no further questions, and therefore, we will end the QA session here. With this, we conclude the conference call of Olympus Corporation. Thank you very much for attending this conference call.