During the first year of Phase 1 of the Value Creation Plan, we advanced three key initiatives to build a foundation for growth.
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Key Initiative 1: Structural Reform to Strengthen the Profit Base
Key Initiative 1: Structural Reform to Strengthen the Profit Base aims to deliver improvements of JPY 8.0–12.0 billion over the three years from fiscal year 2025 through fiscal year 2027. We are implementing this initiative with a focus on cost optimization through process improvements and supply chain optimization as well as personnel optimization through consolidation of sites and organizations. In fiscal year 2025, we achieved benefits of JPY 3.1 billion and expect benefits of JPY 3.6 billion in fiscal year 2026, with both figures net of structural reform costs. The structural reform costs were JPY 1.0 billion in fiscal year 2025 and are expected to be JPY 0.4 billion in fiscal year 2026, with cost efficiency expected to improve progressively.
| Assumptions in the Value Creation Plan |
Progress |
|
Impact of Measures*
(Improvement Amount in FY27 Compared to FY24) |
FY25 Result |
FY26 Forecast |
| Cost Optimization |
Cost Optimization Including Process Improvement and Supply Chain Optimization |
+8-12 billion JPY |
approx.
JPY 3.1 billion |
approx.
JPY 3.6 billion |
| Optimization of Locations and Organizations |
Optimization of Personnel Numbers Through the Consolidation of Bases and Organizations |
|
Breakdown by Segment |
|
Key Initiatives |
FY25 Result |
FY26 Forecast |
| Diabetes Management |
- Optimization of Supply, Cost, and Operational Structures
-
- Lower packaging and procurement costs through insourcing and consolidation of operations sites
- Efficiency improvements through consolidation of logistics and warehouse networks
- Improved efficiency and reduced costs through product and platform consolidation
|
approx.
JPY 0.9 billion |
approx.
JPY 1.3 billion |
| Healthcare Solutions |
- Improvement of Procurement and Fixed Cost Structures
-
- Reduction of material and outsourcing costs through supplier changes and consolidation
- Reduction of fixed costs through site consolidation, relocation, and structural reforms
|
approx.
JPY 0.6 billion |
approx.
JPY 0.4 billion |
| Diagnostics & Life Sciences |
- Optimization of Procurement and Production Structures
-
- Reduction of procurement costs through supplier changes, consolidation, and increased local sourcing rates
- Improvement of costs and productivity through insourcing and process enhancement
- Rationalization of fixed costs and organizational structure
|
approx.
JPY 1.6 billion |
approx.
JPY 1.9 billion |
| Others/Group-Wide |
Reorganization of Corporate Functions Group-Wide Cost Reduction (Smart Spend Program) |
* Excluding the effects of inflation and FX rates, after deducting related costs
Key Initiative 2: Improve Portfolio Management
Key Initiative 2: Improve Portfolio Management involves assessing our entire business portfolio based on two factors: return on invested capital (ROIC) and growth potential. We then organized each business into four quadrants: growth, nurture, foundational, and restructuring. We are advancing the strategic allocation of management resources based on the positioning of each business. In fiscal year 2025, we enhanced business value across the portfolio by continuing to invest in PHCbi, a growth business; transferring the CGM business, a nurture business; strengthening the competitiveness of the foundational BGM and WEMEX businesses; and strengthening the business foundations of the restructuring businesses LSIM and Mediford. We also strengthened working capital management through the introduction of ROIC and will begin full-scale use of ROIC as an internal management metric at the business-unit level starting in fiscal year 2026.
* Divestiture of CGM was completed in FY26.
| Lead as a Future Growth Driver |
PHCbi |
Continued investment in the CGT and life sciences areas to build a foundation for medium- to long-term growth through reorganization and enhanced R&D. |
| Shift to Growth Businesses With Strategic Investments |
CGM |
Divestiture |
| Epredia |
Improved profitability through structural reforms and optimized manufacturing footprints, and invested in digital pathology, a key growth area. |
| IVD |
Integrated with PHCbi to improve capability and efficiency, and reviewed profitability and growth potential by product. |
| Generate Stable Cash Flow |
BGM |
Enhanced cash generation through sales in Europe and the U.S., and achieved cost reductions through improved operational efficiencies. |
| WEMEX |
Integrated with WHS and restructured, captured demand in Healthcare DX, and launched new cloud-based products. |
| Prioritize Improving Profitability |
LSIM |
Regained ISO certification and implemented initiatives including pricing to improve profitability. |
| Mediford |
Enhanced bookings, increased pricing in focused areas, and strengthened high-value-added segments. |
Initiatives for Introducing ROIC
| FY2025 |
- Established Internal Infrastructure for Operation
- Developed calculation and management methodologies
Promoted internal understanding and established a collaborative framework across business units
|
FY2026 |
- Started Operations to Ensure Adoption
- Adjust management metrics to align more closely with business conditions
Conduct periodic monitoring
|
Key Initiative 3: Focus on Diagnostics & Life Sciences
In fiscal year 2025, with a primary focus on strengthening our business foundation, we enhanced operational efficiency and competitiveness by optimizing manufacturing sites, streamlining sales organizations, and reorganizing business units. At the same time, we began to strengthen R&D in preparation for the next phase of growth. We established the Core Technology Laboratory and developed and launched the LiCellGrow™ automated cell expansion system for the cell and gene therapy field, thereby building a technology foundation for creating future domain solutions and expanding into new businesses. From fiscal year 2026 onward, we will move into full-scale implementation of growth initiatives.
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