TOKYO, Nov 15 (Reuters) – Japanese medical equipment maker Olympus Corp ( 7733.T ) has largely completed a number of asset sales and is now keen to do deals, particularly in digital technology and robotics, its chief executive said.
“Olympus has tended to do everything by itself, and now we fully recognize that synchronization with third parties is so important,” outgoing CEO Yasuo Takeuchi told Reuters in a joint interview with incoming CEO Stefan Kaufmann.
The company sold its camera and voice recording units to Japan Industrial Partners in 2021. In August, it made its biggest sale to date, selling its microscope unit – the business it was founded on more than 100 years ago – to private equity firm Bain Capital for 428 billion yen (3 billions of dollars).
“Our transformation is not complete,” Kaufmann added. “There’s still a lot we need to do.”
Kaufmann, a German who has spent most of his two decades at Olympus in human resources roles, will from April become one of only a handful of foreign CEOs to lead a major Japanese company.
Olympus, which makes endoscopes, flexible cameras used in medical examinations and other tools that minimize the need for surgery, also wants to expand product sales and research and development to more countries, Takeuchi said.
The company also wants to build its ability to move through inspection processes more quickly and will invest in its quality assurance and inspection team, Takeuchi added. He pointed out that the US Food and Drug Administration is taking a tougher stance than before.
Asset sales have helped the company improve profitability. It posted record half-year earnings last week, although the results fell short of market expectations, sending its shares down 11% on Monday.
Takeuchi said the company had been “overly optimistic” in trying to contain rising input costs amid semiconductor shortages. China’s COVID-related shutdowns are also weighing on sales in a market where profitability is typically “very good,” he added.
Even so, Olympus shares are not far from all-time highs, nearly 30 times their 2011 lows when its first foreign CEO, Michael Woodford, exposed accounting fraud linked to overpaying for takeovers to hide losses.
Woodford was fired soon after his appointment and lost the battle to take control of Olympus. In a memoir about the scandal, he called out Kaufmann for not supporting him at the time.
Kaufmann insists that today’s Olympus is a very different company, with a revamped board structure and stricter governance practices.
The company has accepted proposals from activist investor ValueAct Capital and will bring on one of its partners Robert Hale in 2019 as an outside director – a role he still holds.
“Our company did wrong,” Kaufmann said, referring to the accounting scandal. “Michael Woodford was right to disclose that. As a company we were punished quite harshly, but not unfairly. We accept it and learn from it.”
Reporting by Rocky Swift and Maya Sakoda; Editing by Edwina Gibbs
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