Nihon Kohden : FY2023 First Quarter Consolidated Financial Results presentation

Consolidated Financial Highlights

for the First Quarter of FY2023

(From April 1, 2023 to June 30, 2023)

1) Financial Results	7） Topics
2） Highlights	8） Capital Investments and R&D Costs
3） Breakdown of Operating Income	9） Forecast for FY2023
4） Domestic Sales	[Ref] Sales Forecast by Product Category/Effect of Exchange Rate
5） Overseas Sales	[Ref] COVID-19-Related Demand (Estimated)
6） Sales by Product Category
[Ref] Breakdown

(Ticker Code: 6849) August 3, 2023

1) Consolidated Financial Results for the 1st Quarter of FY2023

		FY2022	FY2023	YoY (%)
		1Q	1Q
	Net Sales	44,363	48,728	9.8
	Domestic Sales	28,971	30,154	4.1
	Overseas Sales	15,391	18,574	20.7
	Gross Profit	21,811	24,352	11.7
	(Gross Profit Margin)	49.2%	50.0%
	Operating Income	1,817	2,205	21.3
	(Operating Income Margin)	4.1%	4.5%
	Ordinary Income	5,481	5,794	5.7
	Income Attributable to	3,679	3,787	2.9
	Owners of Parent

(Amounts of less than ¥1 million are rounded down)

+11% on a local currency basis

(±0% on a local currency basis excluding impact of change in fiscal term of Defibtech*)

In-house	FY2022 1Q	FY2023 1Q
sales ratio:	70.8%	→ 73.3%
SG&A Ratio:	45.1%	→ 45.5%

Foreign exchange gains:

¥3.55 bil → ¥3.53 bil

Average Exchange Rate	(2022/6)	(2023/6)
1 US Dollar	124.6 yen	135.4 yen
1 EURO	136.8 yen	147.9 yen

*Defibtech, LLC changed its fiscal term from end on December 31 to end

on March 31, according to the reorganization of U.S. subsidiaries. In FY2023 1Q ended June 30, 2023, Nihon Kohden consolidated the 6 months of Defibtech's operating results from January 1, 2023 to June 30, 2023.

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2) Highlights of FY2023 1Q

Net Sales : +9.8%

• Japan：Sales increased because the Company focused on its consumables and services business. Sales in the private hospital and clinic markets increased favorably, while sales in the university and public hospital markets decreased.
• International：Sales showed double-digit growth, as there was an impact of change in the fiscal term of Defibtech, LLC according to the reorganization of subsidiaries in the U.S. Strong sales were also seen in China because patient monitors were installed due to the COVID-19 resurgence.

Operating Income : +21.3%

• Operating income increased due to the increase in sales and higher gross profit margin thanks to a favorable product mix, offsetting the increase of SG&A expenses such as personnel expenses.

Ordinary Income : +5.7%

• Foreign exchange gains were recorded.

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3) Breakdown of Operating Income

(Amounts of less than ¥1 million are rounded down)

FY2021

30,992

FY2022 1Q
1,817	Increase in

Currency	gross profit
from sales
effect
increase
+301
+556

Gross margin
improvement	Increase
+1,184
Increase in COGS due to	in SG&A*
higher prices of components	-1,653
	and utility costs
	¥0.4 bil
	Items of increase/decrease
	in SG&A expenses*
	・Salaries		+¥1.18 bil
	・Legal welfare expenses	+¥0.22 bil
	・Provision for bonuses	+¥0.17 bil

FY2023 1Q

2,205

*Increase in SG&A indicates the amount as a factor of increase/decrease of operating income excluding the currency effect.

Items of increase/decrease in SG&A expenses indicate major components of increased/decreased SG&A expenses on a yen basis.

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4) Domestic Sales

(¥100 million)

300

250

200

150

100

50

0

Sales by Market

289	301
40
37
40
38
73	83

84 82

56 55

FY2022 1Q

FY2023 1Q

Other

Clinics

Private hospitals

Public hospitals

Universities

Sales by Product Category

(Sales, millions of yen)

	FY2022	FY2023	YoY (%)
	1Q	1Q
Physiological Measuring Equipment	7,897	8,262	4.6
Patient Monitors	9,203	9,818	6.7
Treatment Equipment	5,648	6,048	7.1
Other Medical Equipment	6,222	6,024	-3.2
Total Sales	28,971	30,154	4.1

【Markets】 As the number of testing and surgical procedures in medical institutions continued to recover and the Company focused on its consumables and services business, sales in the private hospital and clinic markets increased favorably. Sales in the university market decreased compared to the strong performance in FY2022 1Q when capital expenditure by medical institutions resumed. In the public hospital market, sales of locally purchased products decreased.

【Products】 Physiological Measuring Equipment: Sales of diagnostic information systems achieved double-digit growth. Sales of ECGs increased favorably. Sales of EEGs and polygraphs for cath lab also increased.

Patient Monitors: Sales of clinical information systems and telemetry systems achieved double-digit growth. Sales of consumables such as sensors also increased favorably.

Treatment Equipment: Sales of AEDs and pacemakers / ICDs achieved double-digit growth due to a recovery in demand. Sales of defibrillators also increased.

Other Medical Equipment: Sales of locally purchased products decreased, as the Company focused on selling in-house products. Sales of hematology instruments increased favorably.

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