In our Diabetes Management domain, we deliver innovative solutions for managing diabetes, including through the development, manufacturing, and sales of blood glucose monitoring (BGM) systems. Leveraging highly accurate measurement technology with seamless data connectivity and digital diabetes management tools, our products help people with diabetes to accurately monitor their blood glucose levels so they can better manage their condition and enhance their quality of life.

Fiscal Year 2025 Results

Revenue

Despite the market contraction in BGM, revenue grew YoY due to solid sales in Europe and the U.S., favorable FX impact against the EUR, and increased CGM sales.

• Share gains in developed markets
• ASP increase / sales volume growth initiatives in the U.S.
• Favorable FX impact of JPY against EUR
• Progress on localization in Algeria
• Increased sales of CGM (up to Q3)

• Market decline in developed countries
• Market shifts to low price channel

Operating Profit

Operating profit increased significantly, driven by strong BGM sales, cost-reduction initiatives, and lower amortization expenses. CGM also contributed to profit growth through increased revenue up to Q3 and reduced losses following the business transfer in Q4.

• Strong performance in profitable developed countries
• Profitability improvement initiatives in the U.S.
• Cost improvement effects
• Decreased amortization costs
• Reduced losses due to CGM business transfer

• JPY 300M impact from corporate function transfer

Operating profit margin: 19.8%

Domain Strategy

Koichiro Sato

Senior Executive Vice
President,
Representative Director,
COO, CSO,
Head of Diabetes
Management Domain,
PHC Holdings Corporation

Maintain and Improve Profitability

BGM: Strengthen focus segments
and improve profitability through cost optimization

Operating profit margin improvement:
2.5% (Fiscal Years 2024-2027)

Transition to a New Structure to Continue Supporting People
With Diabetes Worldwide

In the Diabetes Management Domain, the business has been helping people with diabetes monitor their condition for over 80 years. Today our products are used in more than 90 countries and regions around the world.

In fiscal year 2025, our BGM business delivered steady progress despite market contraction. Strong performance was particularly evident in developed markets. In the U.S., we achieved sales growth, supported in part by the launch of new products, and acquired contracts with approximately 50 commercial and government payers, while maintaining our No. 1 market share^* as a national brand in the OTC channel. In Europe, we further strengthened our market-leading positions across key markets. Additionally, we began sales of locally manufactured products in Algeria.

Beyond these efforts, we made two major strategic decisions in fiscal year 2025. The first was the transfer of the continuous glucose monitoring (CGM) business. Alongside our BGM business, we also previously offered implantable CGM systems through our partnership with Senseonics, the maker of Eversense. As this business continued to grow, however, it increasingly evolved away from our core BGM business model. Recognizing the need for an integrated business structure, we concluded that unifying development, manufacturing, and distribution under Senseonics would best position the CGM business to accelerate growth and realize its full potential, and we therefore decided to transfer the business back to Senseonics. The decision also aligns with our Value Creation Plan 2027, which identifies improved portfolio management as a key priority. Following the CGM transfer, we expect the overall profitability of this domain to improve significantly.

The second strategic decision was a change in leadership for Ascensia Diabetes Care, which is responsible for the BGM business. After leading both organizations, I handed over these responsibilities to Peter Bodlund in April 2026. Peter has over two decades of senior leadership experience in the healthcare industry and had served as Chief Operating Officer of Ascensia since 2022. We are confident that his wealth of experience and proven leadership will drive further growth and advancement of our Diabetes Management business.

Fiscal year 2026 marks our inaugural year under this new leadership structure. As a leading company in diabetes management, we will continue to dedicate ourselves to improving quality of life for people with diabetes.

* Source: Data on file

Diabetes Management Business^*

• * The organization name was changed from the BGM Business Unit effective April 1, 2026.
  For details, see the PHC Group Organizational Chart.

Market Environment & Outlook

BGM Market Trends

Source: In-house research

Market Environment

• Patients with high testing frequency are transitioning from BGM to CGM, primarily in mature markets.
• BGM remains an important diabetes management tool for many people, used alongside CGM. In emerging markets, demand for BGM continues amid a growing population of people with diabetes, where affordability and access remain key considerations.
• In some markets, downward pricing pressure is limiting growth in value terms.

Outlook

• While CGM adoption will continue to expand, we expect BGM declines to moderate further.
• We expect average pricing to erode as 1) high-price markets decline and low-price markets grow, and 2) inflation in healthcare costs puts pressure on pricing.

Key Products & Services

CONTOUR^®

CONTOUR^® products enable highly accurate, easy-to-use blood glucose monitoring for people with diabetes. Sold in more than 90 countries, CONTOUR^® solutions are used by an estimated 10 million people worldwide.

Source: In-house research

Strategy & Target

Business Strategy

Peter Bodlund

Corporate Officer,
PHC Holdings Corporation
President & CEO, Ascensia
Diabetes Care Holdings AG

The blood glucose monitoring (BGM) business is pursuing a focused strategy to sustain profitability. Based on a combination of market profitability, trends, and our strengths, we prioritize key markets and ensure resources are deployed toward opportunities with the highest ROI. We also tailor our go-to-market approach based on market environments. In high-margin markets where we have a strong presence, gaining market share is our priority. In lower-margin markets, operational efficiency and selective participation across channels and segments are most important to maintain a sustainable business model.

While the overall BGM market is still expected to decline, we believe the pace of decline will be moderate. In addition, our outlook is strengthened by the growth trend of the over-the-counter business in the U.S., as well as our re-entry into Algeria via localized manufacturing at the end of fiscal year 2025. Despite pricing pressure from inflation and shifting payer priorities, the business aims to maintain a solid foundation, outpacing the market, and targets a -3% revenue CAGR for fiscal years 2024–2027.