NHNKF $9.80

NHNKF · Nihon Kohden Corporation

Track NHNKF — free

$9.80 At close · Sep 21 Q1 2027 earnings call transcript

Rebalance outlook locked

Market Cap

$1.57B

159.97M

Volume · Sep 21 250 Avg daily vol (3 sessions) 233

All webcasts

Earnings call · FY2026 Q3

Nihon Kohden Corporation (NHNKF) Q3 2026 Earnings Call Transcript

Concluded Feb 5, 2026

Feb 5, 2026 0 turns

Period: FY2026 Q3
Runtime: —
Sources: 1 artifact

Executive readout · one minute

Webcast research workspace

Read the call alongside every captured source. Transcript stays in one workspace.

Overseas growth 103 Operating income decline 44 Patient Monitors 43 Domestic sales weakness 40 Capital expenditure and capex investments 20 Full-year forecast revision 19

Management tone

Cautious

Net tone -25 · moderate hedging

Grounding quotes

“Domestic sales are revised downward by ¥5 bn. Aiming to secure 4Q sales at the same level as FY24 4Q”
“It is very regrettable that we need to revise downward the full-year forecast, as domestic sales and overseas sales fell short of the forecasts due to both external and internal factors in the 3rd quarter.”
“Operating income decreased as domestic sales decreased and SG&A expenses increased due to wage increases and R&D investment”

Research coverage

1 live source

Open each available source without leaving this research workspace.

Research materials

Open the source you need; every reader stays inside this workspace.

Company webcastOpen the original investor-relations page

Quarter detail

How the reported period landed and where the business moved.

Capital returned

Dividend / share: $0.10

Read the call

Transcript

Open the complete stored earnings-call transcript.

Free MCP server

Let your AI read this transcript

Connect Equibles to ChatGPT, Claude, or your chatbot so it can read this transcript and answer questions with the underlying financial data.

Connect Equibles

Consolidated Financial Highlights for the Third Quarter of FY2025 ending March 31, 2026 Consolidated Financial Results for FY2025 3Q Forecast for FY2025 Toward Enhancing Corporate Value over the Medium- to Long-term

(Securities Code: 6849) February 5, 2026

1) Executive Summary FY2025 3Q YTD

Increased sales / Decreased income YoY Overall sales +3.5%; Domestic sales -0.9%, Overseas sales +11.3%, Operating income -16.5%

 Sales: Domestic sales decreased mainly in the public hospital market, as capital expenditure in medical institutions was more cautious than expected in 3Q. Sales of AEDs also decreased due to inventory adjustment at distributors Overseas sales achieved double-digit growth thanks to favorable sales in North America, Europe, and Asia & Other. Sales also increased favorably on a local currency basis excluding the impact of the consolidation of Ad-Tech  Operating income decreased as domestic sales decreased and SG&A expenses increased due to wage increases and R&D investment  Net income Extra payments for early retirements of ¥2.4 bn were recorded as extraordinary losses

FY2025 Forecast  Sales: Revised downward by ¥5 bn to ¥235 bn Domestic sales are revised downward by ¥5 bn. Aiming to secure 4Q sales at the same level as FY24 4Q by focusing on consumables and services business as well as delivery and installation of IT system solutions toward the end of the fiscal year Overseas sales are reaffirmed on a yen basis and revised downward on a local currency basis in North America / Asia & Other  Operating income is revised downward by ¥4 bn to ¥20 bn, reflecting lower-than-expected sales and gross margin. Aiming to secure gross margin of 52% or more by focusing on selling in-house products as well as restraining the increase of SG&A expenses in 4Q © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

 Overall sales increased and income decreased year-on-year in the nine months of FY2025.  Domestic sales decreased, as capital expenditure in medical institutions was more cautious than expected in the 3rd quarter. Sales of AEDs in the PAD (public access defibrillation) market also decreased due to inventory adjustment at distributors.  Overseas sales achieved double-digit growth thanks to favorable sales in North America, Europe, and Asia & Other. Sales also increased favorably on a local currency basis excluding the impact of the consolidation of Ad-Tech.  Operating income decreased as domestic sales decreased and SG&A expenses increased.  Based on the results for the nine months of FY2025 and recent performance trends, the Company revised its FY2025 full-year forecasts for overall sales to ¥235 billion and operating income to ¥20 billion. Overall sales and gross margin are expected to be lower than the Company’s previous forecasts.

2) Consolidated Operating Results for the 3rd Quarter of FY2025 (Amounts of less than ¥1 million are rounded down)

FY2024 FY2025 3Q YTD 3Q YTD

YoY (%)

Net sales

158,476 164,013

3.5

55,692

55,892

0.4

Domestic sales

101,153 100,192

34,909

33,312

Overseas sales

57,323

63,820

11.3

20,782

22,580

8.7

Gross profit

82,431

85,086

3.2

30,525

28,287

(Gross margin)

52.0%

51.9%

54.8%

50.6%

SG&A expenses

71,496

75,952

24,704

25,895

(SG&A ratio)

45.1%

46.3%

44.3%

46.3%

Operating income

10,935

9,134 - 16.5

5,820

2,392

(Operating margin)

6.9%

10.5%

4.3%

Ordinary income

13,506

11,366

5,150

54.7

7,674

1,884

75.4

149.4/162.0

152.2/178.1

Income attributable to owners of parent Average exchange rate (yen) 1 USD/1 EUR

152.0/164.7

+13% on a local currency basis (+7% on a local currency basis excluding impact of consolidation of Ad-Tech)

6.2

5.6%

11,882 - 12.0

8,137

FY2024 FY2025 3Q 3Q

6,408 - 21.2 148.6/170.9

Foreign exchange gains: ¥2.0 bn → ¥2.4 bn Extraordinary losses: Extra payments for early retirements ¥2.4 bn

YoY (%)

4.8

58.9

 The operating results for the nine months and the 3rd quarter of FY2025 are shown above.

3.1) Breakdown of Operating Income for FY2025 3Q YTD (Amounts of less than ¥1 million are rounded down)

Improved excluding currency effect

Impact of Ad-Tech: approx. 70%

FY24 3Q YTD 10,935

Change in gross margin +613

Increase in gross profit from sales increase +3,138

Impact of Ad-Tech: more than 40%

Increase in SG&A* -5,002

Main reasons for gross margin changes FY23 50.1%FY24 52.0%FY25 51.9% • Increase in cost including tariff impact -0.7 pt • Increase in inventory devaluation -0.3 pt • Unfavorable product mix -0.3 pt • Higher selling prices of in-house products +0.7 pt • Higher gross margin of IT systems and services in Japan +0.2 pt

Currency effect -550

Items of increase/decrease in SG&A expenses* +¥1.59 bn • Salaries • Amortization of goodwill +¥0.69 bn • Depreciation +¥0.56 bn • R&D expenses +¥0.32 bn • Legal welfare expenses +¥0.22 bn

FY25 3Q YTD 9,134

Benefit from the reform of the profit structure

Approx. 2.0%pt

*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. © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

 The analysis of the reasons for a decrease in operating income for the nine months of FY2025 is shown above.  Increase in gross profit from sales increase was ¥3.1 billion, of which, around 70% was due to the impact of the consolidation of Ad-Tech.  Gross margin was 10 bps lower than the same period of FY2024; however, excluding the negative currency effect, it improved due to higher selling prices of in-house products as well as higher gross margin of IT systems and services in Japan.  Due to wage increases and R&D investment, SG&A expenses were a negative factor worth ¥5.0 billion, of which, more than 40% was the impact of the consolidation of Ad-Tech, including amortization of goodwill.  Currency effect had a negative impact of ¥0.5 billion.

3.2) Breakdown of Operating Income for FY2025 3Q FY24 3Q 5,820

FY23 3Q 3,023

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

FY24 FY25 1Q 47.3  52.6％ 2Q 53.1  52.5％ 3Q 54.8  50.6％

Decrease in gross profit from actual decrease in sales -277 Deterioration Decreased in gross domestic sales margin -2,234

Increase 1Q +¥2.2 bn YoY in SG&A* 2Q +¥1.7 bn YoY -944  3Q +¥0.9 bn YoY

Main reasons for gross margin changes FY23 49.9%FY24 54.8%FY25 50.6% • Increase in cost including tariff impact -1.5 pt • Increase in inventory devaluation -1.4 pt • Unfavorable product mix -0.9 pt • Higher selling prices of in-house products +0.5 pt

Impact of Ad-Tech: less than 80%

Currency effect +27

Items of increase/decrease in SG&A expenses* • Salaries +¥0.37 bn • Depreciation +¥0.25 bn • Amortization of goodwill +¥0.22 bn

FY25 3Q 2,392

 The analysis of the reasons for a decrease in operating income for the 3rd quarter of FY2025 is shown above.  The decrease in gross profit from actual decrease in sales was a negative factor worth ¥0.2 billion, primarily due to decreased domestic sales.  Deterioration in gross margin was a negative factor worth ¥2.2 billion, due to an increase in cost, an increase in inventory devaluation, and unfavorable product mix. Although the gross margin fell short of the same period of FY2024 of 54.8% and our internal plan of 52% or more, initiatives such as raising selling prices both in Japan and internationally continue to be effective.  We could restrain the increase of SG&A expenses, excluding the impact of the consolidation of Ad-Tech.

4) Domestic Sales

Sales of in-house/ third-party products

Sales by market (¥100 million)

Sales by product category (Sales, millions of yen)

(¥100 million)

FY2024 3Q YTD

FY2025 3Q YTD

YoY (%)

Physiological Measuring Equipment

25,383

26,123

2.9

Patient Monitors

32,087

30,695

Treatment Equipment

22,375

21,239

Other Medical Equipment

21,306

22,134

3.9

Total sales

101,153 100,192

Medical Devices

38,735

35,757

Consumables and Services

62,417

64,435

3.2

(Reference)

[ Markets ]

Sales in the public hospital market decreased. Sales of AEDs in the PAD market decreased due to inventory adjustment at distributors. Sales in the university, private hospital, and clinic markets increased. [ Products ] In-house/third-party products: Sales of locally purchased products and ablation catheters decreased. Sales of in-house medical devices decreased, while sales of in-house consumables and services increased. Physiological Measuring Equipment: Sales of polygraphs for cath lab increased favorably. Sales of neurology products and diagnostic information systems also increased. Sales of ECGs decreased. Patient Monitors: Sales of telemetry systems and transmitters decreased compared to the strong growth in FY24 3Q YTD. Sales of bedside monitors increased. Treatment Equipment: Sales of ablation catheters, ventilators, and AEDs decreased. Other Medical Equipment: Sales of installation and maintenance services for medical devices, and hematology instruments and reagents increased favorably. Sales of locally purchased products decreased. © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

 Domestic sales decreased as capital expenditure in medical institutions was cautious, while sales of consumables and services increased.  Sales in the public hospital market decreased. Sales of AEDs in the PAD (public access defibrillation) market also decreased due to inventory adjustment at distributors. Sales in the university, private hospital, and clinic markets increased.  Although sales of both our in-house products and third-party products decreased, sales of our in-house products remained above the levels achieved in the same period of FY2023.  Sales of Patient Monitors and Treatment Equipment decreased, while sales of Physiological Measuring Equipment and Other Medical Equipment increased.  In Physiological Measuring Equipment, sales of polygraphs for cath lab increased favorably. Sales of neurology products and diagnostic information systems also increased.  In Patient Monitors, sales of telemetry systems and transmitters decreased compared to the strong growth in the same period of FY2024. Sales of bedside monitors increased.  In Treatment Equipment, sales of ablation catheters, ventilators, and AEDs decreased.  In Other Medical Equipment, sales of installation and maintenance services for medical devices, and hematology instruments and reagents increased favorably. © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

5) Overseas Sales

Overseas sales ratio

Overseas sales: YoY +11%

FY2024 3Q YTD

(on a local currency basis：+13%, on a local currency basis excluding consolidation of Ad-Tech: +7%)

Sales by region

36.2%

Sales by product category

(¥100 million)

YoY

Local currency basis

Asia & Other

+6%

+10%

Europe

+10%

+8%

Latin America

-5%

-0%

North America

+16%

+18%

FY2025 3Q YTD

38.9%

(Sales, millions of yen) Local currency basis (%)

FY2024 3Q YTD

FY2025 3Q YTD

YoY (%)

Physiological Measuring Equipment

7,569

12,443

64.4

Patient Monitors

28,491

26,848

-4

Treatment Equipment

15,162

18,762

23.7

Other Medical Equipment

6,099

5,766

-3

Total sales

57,323

63,820

11.3

Medical Devices

38,311

39,919

4.2

Consumables and Services

19,012

23,901

25.7

(Reference)

[ Region ]

Sales achieved double-digit growth thanks to favorable sales in North America, Europe, and Asia & Other. Sales also increased on a local currency basis excluding the impact of the consolidation of Ad-Tech. [ Products ] Sales of Physiological Measuring Equipment increased significantly driven by neurology products including Ad-Tech. Sales of Treatment Equipment also increased significantly driven by strong sales of ventilators and double-digit growth of AEDs. Sales of Patient Monitors decreased compared to the strong growth in FY24 3Q YTD mainly in North America and Europe, while sales in Asia & Other achieved double-digit growth. © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

 Overseas sales achieved double-digit growth thanks to favorable sales in North America, Europe, and Asia & Other. Sales also increased on a local currency basis excluding the impact of the consolidation of Ad-Tech. The overseas sales ratio increased to 38.9%.  Sales of Physiological Measuring Equipment increased significantly, driven by neurology products including Ad-Tech. Sales of Treatment Equipment also increased significantly driven by strong sales of ventilators and double-digit growth of AEDs. Sales of Patient Monitors decreased compared to the strong growth in the same period of FY2024 mainly in North America and Europe, while sales in Asia & Other achieved double-digit growth.

5.1) Sales in North America  Double-digit growth on yen basis / local currency basis, High-single-digit growth on local currency basis excluding impact of consolidation of Ad-Tech  Strong growth of Physiological Measuring Equipment and Treatment Equipment, Decline in sales of Patient Monitors compared to double-digit growth in FY24 3Q YTD YoY +16% (Local currency basis +18%) (¥100 million)

351

350 300

303 265

250

[ Product Category ] * YoY on a local currency basis  Physiological Measuring Equipment: over 100％ growth Double-digit growth on local currency basis excluding impact of consolidation of Ad-Tech. Strong growth of home sleep recorders  Patient Monitors: high-single-digit decline Decline in 1H/3Q compared to double-digit growth in FY24 1H/3Q due to cautious stance in decision-making process for business negotiations. Favorable growth of consumables such as sensors

200 150 100

 Treatment Equipment: high-30% growth Strong growth of ventilators and AEDs: Strong growth of mask-type / intubated type ventilators, Expanded market share of AEDs

50 0 FY23 3Q FY24 3Q FY25 3Q YTD YTD YTD

 Sales in North America achieved double-digit growth both on a yen basis and on a local currency basis. Sales also showed a high-single-digit growth on a local currency basis excluding the impact of the consolidation of Ad-Tech.  Sales of Physiological Measuring Equipment achieved double-digit growth, excluding the impact of the consolidation of Ad-Tech. Sales of home sleep recorders increased significantly due to the withdrawal of competitors.  Sales of Patient Monitors decreased in the 1st half and 3rd quarter compared to double-digit growth in the same period of FY2024. This is attributable to medical institutions taking a more cautious approach to decision-making in business negotiations due to uncertainty regarding proposed budget cuts to public health insurance. Sales of consumables such as sensors increased favorably.  In Treatment Equipment, sales of ventilators and AEDs increased significantly. Both the mask-type and the intubated-type ventilators increased favorably. We also successfully gained market share for AEDs in the U.S.

5.2) Sales in Latin America  FY25 3Q YTD: Decreased mainly in Mexico  FY25 3Q: Double-digit growth on yen basis / local currency basis thanks to large orders in Paraguay YoY -5% (Local currency basis -0%) (¥100 million)

45 40

30 25

[ Product Category ] * YoY on a local currency basis  Physiological Measuring Equipment: mid-teen decline Decline in sales of neurology products. Favorable growth of ECGs  Patient Monitors: Decline mainly in Mexico

mid-teen decline

 Treatment Equipment: low-20% growth Significant growth of ventilators thanks to large orders in Paraguay. Double-digit growth of AEDs

20 15 10 5 0 FY23 3Q YTD

FY24 3Q YTD

FY25 3Q YTD

 Other Medical Equipment: mid-single-digit growth Growth of maintenance services for medical devices in Mexico

 Sales in Latin America decreased, mainly in Mexico. In the third quarter (three months), sales in Latin America increased year-on-year both on a yen basis and on a local currency basis due to large orders in Paraguay. We also expect double-digit growth in the 4th quarter.  Sales of Patient Monitors and Physiological Measuring Equipment decreased, while sales of Treatment Equipment increased favorably.

5.3) Sales in Europe  FY25 3Q YTD: Increased favorably, especially in Italy, Turkey, and the Netherland

YoY +10% (Local currency basis +8%)

[ Product Category ] * YoY on a local currency basis

(¥100 million)

100

 Physiological Measuring Equipment: mid-20% growth Favorable growth of neurology products on local currency basis excluding impact of consolidation of Ad-Tech  Patient Monitors: Decline mainly in Germany

mid-single-digit decline

 Treatment Equipment: high-20% growth Strong growth of ventilators and defibrillators. Double-digit growth of AEDs

40 20

 Other Medical Equipment: high-teen decline Decline in sales of hematology instruments and reagents

0 FY23 3Q FY24 3Q FY25 3Q YTD YTD YTD

 Sales in Europe increased favorably, especially in Italy, Turkey, and the Netherlands.  Sales of Treatment Equipment and Physiological Measuring Equipment increased significantly. Sales of Patient Monitors and Other Medical Equipment decreased.

5.4) Sales in Asia & Other  FY25 3Q YTD: Increased favorably, especially in Southeast Asia such as Thailand, Vietnam, and the Middle East & Africa such as Morocco, South Africa  FY25 3Q: Decreased due to taking time to comply with laws and regulations YoY +6% (Local currency basis +10%)

[ Product Category ] * YoY on a local currency basis

(¥100 million)

180 160 140

171 144

153

 Physiological Measuring Equipment: low-teen growth Favorable growth of neurology products and ECGs  Patient Monitors: low-20% growth Received large orders in Morocco. Favorable growth in Southeast Asia and India

120 100 80

 Treatment Equipment: high-single-digit growth Favorable growth of defibrillators. Steady growth of AEDs

60 40

 Other Medical Equipment: mid-single-digit decline Decline in sales of hematology instruments. Favorable growth of reagents

20 0 FY23 3Q FY24 3Q FY25 3Q YTD YTD YTD

 Sales in Asia & Other increased favorably, mainly in Southeast Asia and the Middle East & Africa. In the third quarter (three months), sales in Asia & Other decreased year-on-year mainly due to taking time to comply with laws and regulations, mainly in the Middle East & Africa.  Sales of Patient Monitors and Physiological Measuring Equipment achieved double-digit growth. Sales of Treatment Equipment also increased favorably. Sales of Other Medical Equipment decreased.

(Ref.) Sales / Gross Margin by Product Category (Sales, millions of yen)

FY2024 3Q YTD Physiological Measuring Equipment Patient Monitors Treatment Equipment Other Medical Equipment Total sales

32,953

FY2025 3Q YTD

YoY (%)

38,566

(41%)

(44%)

60,579

57,543

(65%)

(64%)

37,538

40,001

(44%)

27,405

27,901

(47%)

(48%)

158,476

164,013

(52%)

77,046

75,677

17.0

(FY2024 3Q YTD  FY2025 3Q YTD)

Medical Devices 48.6 ⇒ 46.1%

6.6 1.8

Consumables and Services

(54%)

(53%)

81,430

88,336

(50%)

(51%)

Third-party products 27.5 ⇒ 26.4%

1.8 8.5

Sales

¥164.0

3.5

(Reference)

Medical Devices

Sales composition by product category

billion In-house products 72.5 ⇒ 73.6% Consumables and Services 51.4 ⇒ 53.9%

 Sales and gross margin by product category are shown above.  Both in-house sales ratio and consumables and services sales ratio increased.

(Ref.) Breakdown of Sales by Product Category (Billions of yen)

FY2024 3Q YTD

FY2025 3Q YTD

Neurology Products

7.4

11.6

ECGs (Electrocardiographs)

4.5

Polygraphs for Cath Lab

FY2024 3Q YTD

FY2025 3Q YTD

Defibrillators (for Hospital and Ambulance)

5.8

6.0

4.4

AEDs (Automated External Defibrillator)

17.1

18.1

13.1

14.1

Pacemakers / ICDs

1.8

1.9

Diagnostic Information Systems

3.5

3.7

Ventilators

6.4

8.1

Other Physiological Measuring Equipment *

4.1

4.7

Other Treatment Equipment

6.2

5.6

FY2024

FY2025

Physiological Measuring Equipment

Treatment Equipment

*Includes products of other companies.

Patient Monitors

3Q YTD

Patient Monitors

60.5

57.5

Clinical Information Systems

2.9

3.0

FY2024

FY2025

3Q YTD

Hematology Instruments

9.5

9.4

Imaging Systems and Others *

17.8

18.4

Other Medical Equipment

 A breakdown of sales by product category is shown above.

6) Financial Position (Amounts of less than ¥1 million are rounded down) FY2024

FY2025 3Q YTD

Current assets

183,085

170,128 - 12,957

Inventories

56,174

62,033

5,858

Property, plant & equipment

29,270

31,798

2,527

Intangible assets

27,653

25,526

2,127

Investments & other assets

18,266

19,309

1,042

Total assets

258,276

246,762 - 11,513

Inventory turnover (months)

6.2

Change

6.7

[Reasons for decrease of current assets] • Notes and accounts receivable decreased by ¥13.7 bn. • Inventories increased by ¥5.8 bn. Inventories of finished goods temporarily increased by ¥4.3 bn in preparation for starting operation of PLM/MES* systems and new plant in Tsurugashima.

FY2024

Current liabilities Interest-bearing debt Non-current liabilities

FY2025 3Q YTD

Change

72,296

46,717 - 25,579

26,030

50 - 25,980

4,685

27,511

22,826

―

22,950

Net assets

181,294

172,534

8,760

Total liabilities & net assets

258,276

246,762 - 11,513

Interest-bearing debt

Equity ratio

69.5%

69.9%

[Reasons for decrease of current liabilities] Interest-bearing debt (short-term borrowings) decreased by ¥25.9 bn. [Reasons for increase of non-current liabilities] Interest-bearing debt (long-term borrowings) increased by ¥22.9 bn.

 Inventory turnover was 6.7 months, as inventories of finished goods temporarily increased in preparation for starting operation of PLM/MES systems and the new plant in Tsurugashima.

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

FY2024 3Q YTD

Ⅰ. Net cash flows from operating activities Ⅱ. Net cash flows from investing activities Free cash flows Ⅲ. Net cash flows from financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at end of period

FY2025 3Q YTD

Change

6,291

12,477

6,185

23,233
6,472

16,760

16,941

6,004

22,945

4,585

7,038 - 11,624

536

1,062

526

11,818

11,847

38,058

43,089

5,030

(Billions of yen) FY24 3Q YTD FY25 3Q YTD Change Income before income taxes 13.2 9.8 -3.3 Decrease (increase) in accounts receivable 10.0 15.4 +5.4 Income taxes paid -9.6 -7.5 +2.0 FY24 3Q YTD FY25 3Q YTD Change Purchase of property, plant and equipment -3.5 -4.6 -1.1 Purchase of shares of subsidiaries resulting in change in scope of consolidation -18.8 ― +18.8 FY24 3Q YTD FY25 3Q YTD Change Net increase (decrease) in short-term borrowings 25.2 -25.9 -51.2 Proceeds from long-term borrowings ― 25.5 +25.5 Decrease (increase) in deposits paid -7.6 7.2 +14.9 Purchase of shares of subsidiaries not resulting in change in scope of consolidation ― -7.4 -7.4

 Cash and cash equivalents at the end of the period were ¥43 billion.

8) Capital Investment and R&D Expenses FY2024 3Q YTD

FY2025 3Q YTD

Change

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

FY2025

FY2024 Actual

Original forecast announced May 13

Revised forecast announced Nov 10

Capital investment

4,984

5,853

868

9,519

9,400

Depreciation

2,959

3,393

434

4,067

4,900

5,000

R&D expenses

4,948

5,271

322

6,826

7,200

7,400

 FY2025 capital investment plan Molds for new products, measuring equipment and jigs, products for demonstration, and production equipment Introduction of PLM/MES* systems Capital Investments: approx. ¥3.0 bn

FY2022: ¥0.3 bn, FY2023: ¥0.5 bn, FY2024: ¥0.9 bn FY2025: ¥0.8 bn, FY2026~: ¥0.5 bn PLM: Started operation in Sep. 2025 MES: Started operation in Nov. 2025

Establishment of new plant in Tsurugashima City Total investments: approx. ¥11 bn

FY2022: ¥2.3 bn (Acquisition of the site) ~FY2024: ¥4.1 bn, FY2025: ¥3.2 bn (Building and facilities) FY2026~ : ¥1.4 bn (Facilities)

Construction: Started in July 2024 Completed in Oct. 2025 Operation: Planned to start in Mar. 2026

 There are no changes to our forecasts for full-year capital investments, depreciation, and R&D expenses, respectively.

9) Forecast for FY2025 (Amounts of less than ¥1 million are rounded down)

FY2025

FY2024 Actual

YoY

Original forecast announced May 13

Revised forecast announced Nov 10

Revised forecast announced Feb 5

(%)

Net sales

225,424

240,000

235,000

4.2

Domestic sales

145,237

149,800

149,400

144,400

Overseas sales Gross profit

80,187 117,157

90,200 126,000

90,600 126,100

90,600 122,100

13.0 4.2

52.0%

52.5%

52.0%

SG&A expenses

96,444

102,000

102,100

(SG&A ratio)

42.8%

42.5%

43.4%

Operating income

20,713

24,000

20,000

(Operating margin)

9.2%

10.0%

8.5%

Ordinary income

20,373

24,000

22,000

Income attributable to owners of parent

14,098

15,000

12,500

12,500 - 11.3

Overseas sales ratio

35.6%

37.6%

37.8%

38.6%

(Gross margin)

Average exchange rate (yen) 1 USD/1 EUR

152.4/163.5

140/156

146/167

+14% on a local currency basis +8% on a local currency basis excluding impact of consolidation of Ad-Tech

5.9

3.4 8.0

150/174

 Based on the results for the nine months of FY2025 and recent performance trends, the Company revised its forecast for FY2025.  The FY2025 full-year forecasts for overall sales, domestic sales, and overseas sales were revised to ¥235,000 million, ¥144,400 million and ¥90,600 million, respectively.

10) Reasons for Revisions  Revised downward by ¥5 bn, ¥0.8 bn YoY decline

Domestic sales

Net sales

[ down ¥5 bn ]

[ down ¥5 bn from previous forecast ]

Overseas sales [ unchanged ]

Operating income [ down ¥4 bn ]

Ordinary income [ down ¥2 bn ]

Net income [ unchanged ]

• Hospital / clinic market: Greater-than-expected restrictions and delays in budgets Revised downward by ¥3.9 bn to ¥0.2 bn growth from ¥4.1 bn growth • AED: Inventory adjustment at distributors *FY24: 63,800 units → FY25: 58,100 units Revised downward by ¥1.1 bn to ¥1.0 bn decline from ¥0.1 bn growth

 4Q: Aiming to secure sales at the same level as FY24 4Q by focusing on consumables and services business as well as delivery and installation of IT system solutions toward the end of the fiscal year • Making every effort for shipping, delivery, and installation by the end of the fiscal year, while decision-making process for business negotiations for patient monitors has become more cautious in North America and it also takes time to comply with laws and regulations mainly in Asia & Other

• Revised downward reflecting lower-than-expected sales and gross margin. Reaffirmed SG&A expenses • 4Q: Aiming at sales/income growth by securing gross margin of 52% or more and restraining the increase of SG&A expenses through focusing on selling in-house products and implementing the reform of the profit structure



In Japan, budget executions of universities and public hospitals are usually concentrated at the end of the fiscal year. However, in FY2025, there were greater-than-expected postponements of and restraints on their spending due to deterioration of their business sentiment. Domestic sales are expected to fall short of the Company’s previous forecast, due in part to lower-than-expected sales of AEDs caused by inventory adjustment at distributors. The Company aims to secure sales in the 4th quarter at the same level as in the same period of FY2024 by continuing to expand sales of consumables and services as well as by strengthening sales activities and securing orders for medical equipment and IT systems that contribute to improving the quality and efficiency of medical care. Sales of Patient Monitors are expected to increase year-on-year in the 4th quarter.



Overseas sales will be affected by greater-than-expected depreciation of the yen in currency translation. The entire Group makes every effort to complete shipping, delivery, and installation by the end of the fiscal year, while the decision-making process for business negotiations for patient monitors has become more cautious in North America and the Company needs to comply with laws and regulations, mainly in Asia & Other. Sales of Patient Monitors in North America are expected to increase year-on-year in the fourth quarter, as orders are above the same period of FY2024.



Because overall sales and gross margin are expected to be lower than the Company’s previous forecasts, operating income is expected to be ¥20,000 million. The Company strives to restrain the increase of SG&A expenses through the reform of the profit structure of the entire Group. Ordinary income is expected to be ¥22,000 million, reflecting foreign exchange gains. Income attributable to owners of parent remains unchanged at ¥12,500 million.

(Ref.) Analysis of FY2025 Sales Forecast (¥100 million)

Original forecast FY2024 2,254

Revised forecast in Nov. FY2024 2,254

Revised forecast in Feb. FY2024 2,254

Sales increase in Japanese hospital and clinic market +47 Lower-than-expected sales of locally purchased products

AED unit sales in Japan FY24 63,800 units FY25 original 60,000 units Nov. revised 63,600 units

Sales increase in Japanese hospital and clinic market +41 Greater-than-expected restrictions and delays in budgets

Decrease in AED sales in Japan -1

Increase in AED sales in Japan +1

Actual increase in overseas sales +160

Currency effect -60

FY2025 2,400

Impact of Ad-Tech: approx. 30%

North America: Unchanged Asia & Other/Europe/Latin America: Downward

Actual increase in overseas sales +134

Currency effect -30

FY2025 2,400

Impact of Ad-Tech: approx. 35%

Latin America/Europe: Unchanged Inventory adjustment North America: Downward reflecting cautious stance in decisionat distributors making process for business negotiations for patient monitors Feb. revised 58,100 units Asia & Other: Downward due to taking time to comply with laws and regulations mainly in the Middle East & Africa and Southeast Asia

Sales increase in Japanese hospital and clinic market +2

Decrease in AED sales in Japan -10

Actual increase in overseas sales +112

Currency effect -8

FY2025 2,350

Impact of Ad-Tech: 40% or more

(Ref.) Analysis of FY2025 Operating Income Forecast (¥100 million)

Original forecast Higher GPM Increase in Increase in +25 other SG&A Depreciation Increase in Amortization FY2024 Increase in sales such as Personnel and R&D of goodwill expenses +109 207 expenses -57 -15 Impact of Ad-Tech: -12 less than 30% Impact of Ad-Tech: approx. 30%

Currency effect -17

FY2025 240

Currency effect -7

FY2025 240

Revised forecast in Nov.

FY2024 207

Higher GPM +19 Increase in sales +89

Impact of Ad-Tech: more than 30%

Lower domestic sales / overseas Revised forecast in Feb. actual sales

Increase in other SG&A

Increase in Increase in Depreciation Amortization such as Personnel and R&D of goodwill expenses expenses -38 -15 -15

Impact of Ad-Tech: approx. 35%

Unfavorable product mix Increase in cost Impact of consolidation of Ad-Tech • OP before amortization of goodwill +15 • Amortization of goodwill -15

GPM change Increase in Increase in +4 FY2024 Increase in sales other SG&A Depreciation Increase in Amortization +49 such as Personnel and R&D 207 of goodwill expenses expenses Impact of Ad-Tech: approx. 50% -15 -28 -15 © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

Currency effect -2

FY2025 200

(Ref.) Consolidated Forecast for FY2025 by Region/Product Category Effect of Exchange Rates Overseas sales by region Actual

North America

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

FY2025

FY2024

YoY

Original forecast announced May 13

Revised forecast announced Nov 10

47,500

49,500

41,900

Revised forecast announced Feb 5

49,500

(%)

18.1

Latin America

5,388

5,900

5,700

5.8

Europe

12,554

13,400

13,200

5.1

Asia & Other

20,344

23,400

22,200

9.1

Total

80,187

90,200

90,600

13.0

Sales by product category FY2025

FY2024 Actual

Original forecast Revised forecast announced May 13 announced Nov 10

Revised forecast announced Feb 5

Composition ratio (%)

YoY (%)

Physiological Measuring Equipment

46,874

53,200

54,600

54,100

23.0

15.4

Patient Monitors

84,965

89,000

86,600

85,600

36.4

0.7

Treatment Equipment

53,184

56,600

58,100

55,300

23.5

4.0

Other Medical Equipment

40,400

41,200

40,700

40,000

17.1

Total

225,424

240,000

235,000

100.0

4.2

Medical Devices

113,304

120,800

117,600

114,700

48.8

1.2

Consumables and Services

112,119

119,200

122,400

120,300

51.2

7.3

Estimated Exchange Rate Fluctuations for Full Fiscal Year

(Reference)

Operating Income 0.42 bn yen 0.11 bn yen 0.06 bn yen 0.02 bn yen Sales

US Dollar EURO

Toward Enhancing Corporate Value over the Medium- to Long-term

3 Indicators and 6 Key Measures Implement the reform of the profit structure and make investments in growth areas, and accelerate our transformation into a global MedTech company

Growth

Sales CAGR

Profitability

FY2023 - FY2026

Operating income margin

Capital efficiency

ROE

in FY2026

15%

12%

Enhance product competitiveness

Implement the reform of the profit structure

Introduce Nihon Kohden’s own ROIC formula

Focus on growth of North America Business

Advance global supply chain management

Reduce cash conversion cycle

Practice of Sustainability Management

Medical issues

Environmental issues

Social issues

 We have previously mentioned that the Company’s growth momentum is increasing through the implementation of our initiatives in our Long-term Vision and Three-year Business Plan. In particular, demand for medical DX is growing around the world. Additionally, the withdrawal of competitors is creating increased demand for ventilators and neurology products.  On the other hand, we recognize that one of our current issues is the significant quarterly performance volatility caused by the trend of capital expenditure in medical institutions and budget executions by the Government in each country, despite our ongoing efforts to transition from a business model centered on capital expenditure to a solution based business or recurring business focused on consumables, services, and DHS products.  Due to external and internal factors, overall sales fell short of expectations, which has hindered the improvement in SG&A expense ratio and cash conversion cycle. This inability to quantitatively assess the effects of the reform of the profit structure is also considered a factor that lowers the predictability of profitability improvement.  Therefore, to enhance the Company’s corporate value in the Medium- to Long term, it is essential to focus on Growth as a priority among the three indicators in the Three-year Business Plan, and to effectively combine sustainable sales growth with realizing the effects of the reform of the profit structure.

Growth

Focus on stable growth in Japan

Market growth rate Approx.1~2%

Phase II sales target CAGR 3%

(¥100 million)

FY2015 - FY2024 10-year sales CAGR

In-house products +3.5%

+1.8%

(Ratio of consumables and services: 54%, FY24)

Medical devices +1.8% Consumables & services +5.3%

Locally purchased products -14%

Purchased products +2.5%

■In-house medical devices ■ In-house consumables and services ■Purchased products ■Locally purchased products

1,500

1,000

Aiming for stable sales growth of in-house products

500

0 FY2015

FY2016

FY2017

Medical devices • Maintaining and expanding higher market share of each product by capturing replacement demand steadily

FY2018

FY2019

FY2020

FY2021

FY2022

Consumables and services • Improving CX* and medical safety by promoting genuine consumables and expanding maintenance services plans

FY2023

FY2024

FY2029

ITS＋DHS • Promoting medical DX* and contributing to improving quality and economy of medical care • Planned to consolidate DOWELL, Co., Ltd. as a subsidiary (as of Feb. 2026)

CX: Customer experience, DX: Digital transformation.

 In Japan, capital expenditure in medical institutions has been more restrained than expected. However, we were able to achieve stable sales growth over the past 10 years and improve our profitability through increasing sales of inhouse products, consumables, and services.  We will further increase sales of in-house products by utilizing the resources made available by the discontinuation of Abbott products.  We will continue to maintain and expand our high market share in medical devices, while expanding our consumables and services business. Additionally, we aim to enhance customer experience and achieve sustained stable growth through strengthening our IT and digital health solutions business, which is essential for medical DX.

Growth

Focus on higher growth in North America

Market growth rate mid-single digit

Phase II sales target CAGR 11%

FY2015 - FY2024 10-year sales CAGR

+10%

Treatment Equipment +13%

Physiological Measuring Equipment* +3%

Patient Monitors +10%

Consolidated Ad-Tech in FY2025

(¥100 million)

■Physiological Measuring Equipment ■Patient Monitors ■Treatment Equipment ■Other Medical Equipment

600

Aiming for sustained higher sales growth in North America

300

0 FY2015

FY2016

FY2017

FY2018

FY2019

Physiological Measuring Equipment

• Creating synergies b/w Neurology & Ad-Tech products with high market share • Increasing demand for home sleep recorders

FY2020

FY2021

FY2022

Ventilators

FY2023

• Signing new contracts with major IDNs/GPOs* • Expanding market share

FY2024

FY2029

Patient Monitors

• Achieving differentiation by enhancing DHS products • Expanding market share • Proposals to facilities that have installed our ventilators

 In North America Business, which is our growth driver, we aim for sustained higher growth.  We have achieved a sales CAGR of 10% over the past 10 years in North America. Notably, the Treatment Equipment Business has been rapidly expanding after the launch of ventilators.  Demand for neurology products is also increasing due to the withdrawal of competitors in addition to the effects from the acquisition of Ad-Tech.  We have enhanced our solution capabilities for patient monitoring systems for major IDNs by expanding our line-up of DHS products. We aim at a sustained increase in market share for patient monitors, as the development of new customers triggered by ventilators is also progressing, while there is a cautious stance in the decision-making process for business negotiations at this moment.

Profitability

Implement the reform of the profit structure OPM

 80 bps improvement in FY2024, Expected 250 bps (YoY +170 bps) in FY2025  Completed development of most of the measures and current estimates suggest 70% of the target is expected to be realized by the end of FY2026 Further accelerate implementation of measures in three key areas to improve profitability

FY2026 FY2026 Target improvement Target

5%pt

Improve personnel productivity

Streamlining translation of technical documents for licensing applications in each country  Developed in-house generative AI translation tools to improve business workflows

Approx. 7,300 h/m

Reduced by approx. 3,600 hours per month

Reduced by Approx. Approx. approx. 300 3,700 h/m hours per month 3,400 h/m

Present

Conventional

Reducing other expenses

Relocation or consolidation of domestic offices

(Sales & Logistics)

5 floors 80 offices

 Introduced trade business cloud service to visualize logistics

Approx. 3,700 h/m

Conventional

 Tokorozawa Office  Domestic Offices

Streamlining international logistics operations

4 floors 77 offices

Present

Reducing IT costs Reducing

¥0.2 bn/year

 Optimizing contracts for servers and telecom carriers  Reducing internal IT system development costs  Reviewing cloud usage fees

Reducing

¥0.1-0.2 bn/year

 In the reform of the profit structure aiming for improving profitability, we confirm that steady effects are beginning to emerge in the area of improving personnel productivity and reducing other expenses.  In terms of improving personnel productivity, we have achieved the results shown above by streamlining the translation work required for licensing applications in each country as well as by improving the efficiency of international logistics operations.  In terms of reducing other expenses, we have achieved cost savings of several hundred million yen through the relocation or consolidation of domestic offices and the review of contracts and usage fees related to internal IT systems.  We continue to aim at a 500 bps improvement in operating income through the reform of the profit structure, while there are gaps between sales target and results as well as impacts from price and wage inflations more than expected.

Capital Policy Make investments for future business expansion and enhance shareholder returns as well as securing a sound financial foundation. 1)

Investment necessary for future business expansion

• R&D investments in patient monitors, ventilators, and Digital Health Solutions • Capital investments for establishing a new plant in Tsurugashima, promoting corporate digital transformation such as PLM/MES systems and generative AI, and enhancing global supply chain management • Ad-Tech became a wholly owned subsidiary. Planned to consolidate DOWELL (as of Feb. 2026)

Phase II︓

R&D investments Apx. ¥23.5 bil Capital investments Apx. ¥25.0 bil Growth investments M&A ¥30 bil or more

Enhancement of shareholder returns Phase II︓ ¥28 bil or more

We consider additional shareholder returns depending on the progress of future investment plans.

Sound financial foundation

R&D Investments

Capital Investments

Human Resource development

M&A and Alliance

Full-year dividends forecasts: 32 yen in FY2025

Dividends

Number of treasury stock: Increase dividends in a stable manner in 4,084k shares performance line with growth in business

Share buybacks

Consider in a flexible manner, taking into account comprehensively our future business deployment, investment plans, retained earnings, and stock price level

(Consolidated dividend payout ratio: 41.8%)

Target: Consolidated Total Return Ratio of 35% or more

Share buybacks: ¥5.0 bn (~Mar. 2026) out of ¥1.1 bn (~Dec. 2025) Number of treasury stock: 8,571k shares including ESOP (5.0% as of Dec. 2025)

Maintain a strong financial foundation to ensure a stable supply of medical equipment

 Our capital policy is shown above.  Nihon Kohden recognizes that returning profits to shareholders is one of management’s most important tasks. The basic policy on distribution of profits and dividends is to make investments for future business expansion and enhance shareholder returns as well as securing a sound financial foundation.  The Company plans to acquire up to ¥5 billion of its own shares in FY2025.  It is very regrettable that we need to revise downward the full-year forecast, as domestic sales and overseas sales fell short of the forecasts due to both external and internal factors in the 3rd quarter. However, we aim to recover in the 4th quarter and continue the momentum to the final year of the Three-year Business Plan.

Disclaimer: The contents of this document are based on the Company’s best judgments at the time it was prepared and do not constitute a guarantee or promise that the Company will achieve its numerical targets or implement the measures described therein. Information on products (including products under development) in this document is not intended to make any advertisement or promotion. These documents have been translated from Japanese originals for reference purposes only. In the event of any discrepancy between these translated documents and the Japanese originals, the originals shall prevail.

Read transcripts like this one from Claude, ChatGPT or your own code with the earnings call transcript API →