Olympus 2015 Annual Report Download - page 12

on the right path, and I am ever grateful for the guidance of
these individuals. Today, those viewing Olympus from the
outside have come to more fully understand the Company’s
corporate culture, the character of its employees, and the
strengths and weaknesses of its business. This understanding
has fostered trust, and as a result the Board of Directors is now
able to go about its duties with relative ease.
Looking at our operations, we are making headway in
the Medical Business, which is steadily generating results,
as demonstrated by the fact that it is progressing ahead of
schedule with regard to business plans. In the Scientific Solu-
tions Business, we have been advancing structural reforms
that are matched to recent trends, and profitability has been
improving smoothly. The Imaging Business, however, is not
doing quite as well. We worked to improve performance in
this business to the best of our ability, but the market changed
to a degree that exceeded expectations. Although we attempted
to respond during the first year of the medium-term vision
by revising targets and instituting subsequent restructuring
measures, the operating environment proved exceptionally
harsh and these measures were unsuccessful. As a manager
at Olympus, I feel that this outcome is most regrettable.
Nakanomyo: I think that Olympus needs to pick up the pace
in its efforts to reform the Imaging Business. I realize this may
not be easy, and that the market is changing to a degree that
is much greater than expected. However, I cannot help but feel
that the recovery of the Imaging Business is taking too much
time. Three years have passed since you, Mr. Sasa, assumed
the role of president. Including the time before you took up this
mantle, the Imaging Business has recorded losses for five
straight years. I believe most would agree that this is too long,
and that investors are hoping for this business to break even
atthe earliest date possible.
Furthermore, even now, you still begin discussions with
talk of corporate governance. I think it is safe to say that the
stock market has already recognized that Olympus has changed
and overcome its past shortcomings. Investors are more inter-
ested in plans for the future, how the Company will develop its
operations going forward with regard to M&A activities, invest-
ments in new businesses, and other such matters. I think that
Olympus should be more clearly communicating its policies on
these matters.
Sasa: Disclosing information about new businesses means
also giving this information to our competitors. For this reason,
it is important to consider the extent to which we reveal our
plans. However, I do realize that, as shareholders choose to
invest in Olympus because they approve of our plans for the
future, it is vital that we release as much information on these
matters as possible.
Yoshihara: In the past, I was responsible for covering the pre-
cision machinery industry. I now cover the medical equipment
sector. Over the past two years, this sector has been under-
going a surprising change. Previously, even relatively expensive
medical equipment would be accepted by the market so long
as the piece of equipment was of superior quality. Now, this
market is changing to the point that expensive equipment will
not be well-received, no matter how superior the quality or
how it excels in other areas. I believe that the merger of
Medtronic, Inc., and Covidien plc is symbolic of this change.
The medical equipment industry was once thought to be
stable. However, we are now witnessing an upset in the form
of a wave of mergers centered around European and U.S.
companies. I think that Olympus needs to give the market
some hint of the strategies it plans to implement in the wake of
this immense change. In listening to teleconferences by Euro-
pean and U.S. medical equipment manufacturers, it is notable
how they employ a method of disclosure that allows investors
to form an impression of their business without giving away
crucial details. These companies are quite skilled at providing
quantitative hints with regard to factors such as market scale.
Masahiro Nakanomyo
Barclays Securities Japan Limited
Hiroyuki Sasa
President and Representative Director
Tomoko Yoshihara
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
Hiroaki Owaki
T. Rowe Price Group, Inc.
Sasa: Upon my appointment as president, it was clear to me
what needed done, so my first step was to incorporate this
thinking into the Company’s medium-term vision. This vision
served as our corporate strategic plan, and it had two main
goals. The first was to regain lost trust by clearly illustrating to
outside stakeholders the systems that would be employed and
the path that would be followed going forward. The second
was to raise motivation by providing those within the Company
with a concrete roadmap describing where we were heading.
After the Company’s scandals came to light, it was
obvious that it would be impossible to recover the trust of our
stakeholders without reconstructing corporate governance
systems. For this reason, the Company replaced all members
of the Board of Directors and instituted a radically different
system to facilitate the new management team’s wholehearted
efforts to regain trust. The newly appointed outside directors
pulled no punches in pointing out the Company’s flaws.
However, I believe it was this stern oversight that kept Olympus
A Look Back at Three Years under President Sasa
It has been three years since the Company instituted its new management team, and Olympus is now prepared to step
onto a new growth stage, with the main proponent of its progress being the Medical Business. What must Olympus
accomplish in order to create new value and achieve further growth?
President Hiroyuki Sasa talked with an investor and analysts about their evaluation of the Company over the past
three years and what type of company they felt Olympus should become in the future, and listened to their earnest
opinions and advice.
(Conversation held on May 20, 2015, in a meeting room of the Company’s head office)
Discussing Olympus’ Ideal Form
—Conversation with an Investor and Analysts
21
OLYMPUS Annual Report 2015
20 OLYMPUS Annual Report 2015
Olympus’ Growth Strategies
Tomoko
Yoshihara
Mitsubishi UFJ Morgan
Stanley Securities Co., Ltd.
Prole
In 2001, Ms. Yoshihara joined
Deutsche Bank AG, where
she was assigned tocover
the technology sector. After
later forays inthe think-tank
and consulting field, she
assumed her current position
at Mitsubishi UFJ Morgan
Stanley Securities in 2014.
Masahiro
Nakanomyo
Managing Director
Barclays Securities Japan
Limited
Prole
Mr. Nakanomyo joined The
Mitsubishi Banking Corp. in
1984, where he undertook a
variety of industry and corpo-
rate research projects over a
25-year period. In 2009, he
joined Barclays Securities
Japan and leads the precision
instrument sector coverage
team in the equity research
section.
Hiroaki Owaki
T. Rowe Price Group, Inc.
Prole
In 2004, Mr. Owaki left his
position at ABN Amro Asset
Management (Asia) Ltd., to
take up a position covering
the Japanese technology
sector at the Tokyo office of
T. Rowe Price Group.