Worth reading
52Recurring
0–100. This measures how worthwhile something is to read, not how good or bad the company is.Direction
Deterioration
Direction inferred from the company’s description.Scale
-1244
¥ million (year-on-year decrease in operating profit)Wording
Conditional
How definitive the wording is.Contents of this document
Presentation on financial resultsSecond quarter (interim period) of the fiscal year ending March 20278 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥10,437 million-10.1%
Operating profit¥-1,036 million
Ordinary income¥-1,161 million
Net income¥-1,749 million
Selling, general and administrative expenses¥6,836 million; SG&A as a percentage of sales: 65.5%
Gross Profit Margin55.6%; year-on-year change not disclosed
Operating profit margin△9.9%; year-on-year change not disclosed
Full-year earnings forecast
Net Sales
¥21,700 million
Operating profit (loss)
¥-1,500 million
Ordinary profit or loss
¥-1,750 million
Net income (loss) for the current fiscal year
¥-2,500 million
What the company explained in this material
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
- Gross profit contraction due to lower revenue¥-930 million
- Deterioration in manufacturing costs¥-390 million
- SG&A expense control¥350 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
- Second-half assumed exchange rates¥158 /US$
- Full-year assumed exchange rate¥159 /US$
- Foreign-exchange sensitivity¥8 million impact on second-half operating income from a ¥1 appreciation of the yen
- Impact of reimbursement price reductions¥100 millions year on year
- Cost of sales ratio43.3 %
New initiatives
- Elimination of 51 positions at ODEV and fixed-cost reductions
- Outsourcing the development of certain products
- Recruitment of a CFO from outside the company (planned for January 2027)
- Review of procurement sources and the development and manufacturing structure by SAICO2
- Concentration of management resources on 4 priority areas in Japan
- Rebuilding the U.S. sales distributor network
- Expansion into the perioperative nutritional support business (launch planned for spring 2027)
Key KPIsA metric the company considers important as a management benchmark.
- U.S. sales (US$)31,007 Thousand US dollarsYear on year against the same period last year-13.4%
- Proprietary products revenue¥8,335 millionYear on year against the same period last year-10.5%
- U.S. artificial knee sales18.5 Million of dollarsYear on year against the same period last year-23.2%
- U.S. artificial hip sales12.4 Million of dollarsYear on year against the same period last year+8.0%
Segment results
Domestic sales in Japan
¥5,475 million-13.9%
US sales
¥4,962 million-5.4%
Artificial Joints (Japan)
¥1,947 million-19.5%
Bone Fixation Materials (Japan)
¥1,885 million-9.7%
Spinal Fixation Devices (Japan)
¥1,497 million-14.1%
Artificial Joints (U.S.)
¥4,962 million-5.3%
Market Size / Share
U.S. artificial knee market forecast: 1.9 in 2026, 2.2 in 2027, 2.4 in 2028, 2.6 in 2029, 2.9 in 2030, 3.2 in 2031, and 3.5 in 2032 (US$ billion). The cementless share is estimated to rise from 25% in 2026 to 34% in 2032Number of employees
51 positions to be eliminated at ODEV. To be implemented in phases from October 2026Annual Dividend
¥0.00 (year-end; previous forecast: ¥17.00; previous fiscal year: ¥17.00)| Item | Details |
|---|---|
| Document type | Presentation on financial results |
| Fiscal Period Covered | Second quarter (interim period) of the fiscal year ending March 2027 |
| Net Sales | ¥10,437 million (YoY -10.1%) |
| Operating profit | ¥-1,036 million |
| Ordinary income | ¥-1,161 million |
| Net income | ¥-1,749 million |
| Gross Profit Margin | 55.6%; year-on-year change not disclosed |
| Operating profit margin | △9.9%; year-on-year change not disclosed |
| Selling, general and administrative expenses | ¥6,836 million; SG&A as a percentage of sales: 65.5% |
| Full-year earnings forecast | Net Sales ¥21,700 million / Operating profit (loss) ¥-1,500 million / Ordinary profit or loss ¥-1,750 million / Net income (loss) for the current fiscal year ¥-2,500 million |
| Segment results | Domestic sales in Japan ¥5,475 million (YoY -13.9%) / US sales ¥4,962 million (YoY -5.4%) / Artificial Joints (Japan) ¥1,947 million (YoY -19.5%) / Bone Fixation Materials (Japan) ¥1,885 million (YoY -9.7%) / Spinal Fixation Devices (Japan) ¥1,497 million (YoY -14.1%) / Artificial Joints (U.S.) ¥4,962 million (YoY -5.3%) |
| Breakdown of Factors Affecting the Change | Gross profit contraction due to lower revenue ¥-930 million, Deterioration in manufacturing costs ¥-390 million, SG&A expense control ¥350 million |
| Key KPIs | U.S. sales (US$) 31,007 Thousand US dollars, Proprietary products revenue ¥8,335 million, U.S. artificial knee sales 18.5 Million of dollars, U.S. artificial hip sales 12.4 Million of dollars |
| Number of employees | 51 positions to be eliminated at ODEV. To be implemented in phases from October 2026 |
| Assumptions Underlying the Business Outlook | Second-half assumed exchange rates ¥158 /US$, Full-year assumed exchange rate ¥159 /US$, Foreign-exchange sensitivity ¥8 million (impact on second-half operating income from a ¥1 appreciation of the yen), Impact of reimbursement price reductions ¥100 millions (year on year), Cost of sales ratio 43.3 % |
| Annual Dividend | ¥0.00 (year-end; previous forecast: ¥17.00; previous fiscal year: ¥17.00) |
| Market Size / Share | U.S. artificial knee market forecast: 1.9 in 2026, 2.2 in 2027, 2.4 in 2028, 2.6 in 2029, 2.9 in 2030, 3.2 in 2031, and 3.5 in 2032 (US$ billion). The cementless share is estimated to rise from 25% in 2026 to 34% in 2032 |
| New initiatives | Elimination of 51 positions at ODEV and fixed-cost reductions, Outsourcing the development of certain products, Recruitment of a CFO from outside the company (planned for January 2027), Review of procurement sources and the development and manufacturing structure by SAICO2, Concentration of management resources on 4 priority areas in Japan, Rebuilding the U.S. sales distributor network, Expansion into the perioperative nutritional support business (launch planned for spring 2027) |
Items this document does not state (13)
Results for the three months of the current quarterProgress against full-year forecastSelf-assessment against the planUnit price and quantity metricsNumber of stores and locationsRisk amount incorporated into the outlookMedium-term management plan targetsFinancial targetsPayout ratioAcquisition of treasury sharesCapital expendituresOrders received and order backlogKey points of the Q&A
These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.
The reasons the company gives
The company's own explanation, not something inferred from the numbers.The main reasons were declining sales in Japan and the United States, increased manufacturing fixed-cost burden due to low utilization at the U.S. subsidiary, higher manufacturing costs from tariffs and labor costs, higher import procurement costs due to the weaker yen, and increases in R&D and other expenses. The full-year forecast was also revised due to expectations that sluggish sales would continue and delays in the launch of new products scheduled for the second half.
How to read this page
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