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

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159.97M

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Earnings call · FY2026 Q4

Nihon Kohden Corporation (NHNKF) Q4 2026 Earnings Call Transcript

Concluded May 15, 2026

May 15, 2026 0 turns

Period: FY2026 Q4
Runtime: —
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Consolidated Financial Highlights for FY2025 ended March 31, 2026

Consolidated Financial Results for FY2025
Forecast for FY2026
Business Strategy

(Securities Code: 6849) May 15, 2026

Consolidated Financial Results for FY2025

1) Executive Summary FY2025

Increased sales / Decreased income YoY

Overall sales +4.3%; Domestic sales -0.6%, Overseas sales +13.1%, Operating income -9.5%  Sales: Domestic sales increased excluding lower sales of locally purchased products and Abbott products. Sales of AEDs decreased due to inventory adjustment at distributors. Sales of diagnostic information systems and clinical information systems achieved double-digit growth. Sales of in-house consumables and services also increased Overseas sales increased in all regions driven by double-digit growth in North America. 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 investments as well as higher depreciation caused by M&A and capital investments FY2023

Overseas Sales Ratio Consumables and Services Sales Ratio In-house Sales Ratio Gross Profit Margin SG&A Ratio (Ref.) OP/employee

FY2024

35.9% 35.6%

 Favorable growth in North America, Impact of consolidation of Ad-Tech

 Impact of consolidation of Ad-Tech  Lower sales of locally purchased products and Abbott products in Japan, 73.5% 73.6% Impact of consolidation of Ad-Tech  Increase in cost including tariffs, 50.2% 52.0% Increase in inventory devaluation  Increased due to sales falling short of 41.4% 42.8% forecasts, wage increases, R&D investments, and higher depreciation ¥3.33 mil ¥3.48 mil

47.9% 49.7%

FY2025

FY2026 Targets

38.6%

38.7%

50.7%

50%

75.2%

75%

51.8%

53%

43.8%

38%

¥3.11 mil1 1.5 times or more2

*1 Excluding DOWELL’s employees. *2 Compared to FY2023.

 Overall sales increased and operating income decreased year-on-year in FY2025.  Domestic sales decreased, due to lower sales of locally purchased products and Abbott products. Sales of in-house products increased, as sales of IT systems achieved double-digit growth and sales of consumables and services also increased.  Overseas sales achieved double-digit growth, as sales in all regions increased favorably. Overseas sales also increased favorably excluding the impact of the consolidation of Ad-Tech, thanks to favorable sales in North America.  Operating income decreased, as domestic sales decreased and SG&A expenses increased.  Overseas sales ratio, consumables and services sales ratio, and in-house sales ratio were above the Company’s target, mainly due to the impact of the consolidation of Ad-Tech.  Improving profitability through top-line growth remained an issue, as SG&A ratio increased due to sales falling short of forecasts.

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

FY2024

FY2025

YoY (%)

Net sales

225,424

235,099

4.3

66,947

71,086

6.2

Domestic sales

145,237

144,406 - 0.6

44,083

44,213

0.3

Overseas sales

80,187

90,693 13.1

22,863

26,872 17.5

Gross profit

117,157

121,726

34,725

36,640

(Gross margin)

52.0%

51.8%

51.9%

51.5%

SG&A expenses

96,444

102,981

24,947

27,029

(SG&A ratio)

42.8%

43.8%

37.3%

38.0%

Operating income

20,713

18,745 - 9.5

9,778

9,610 - 1.7

(Operating margin)

9.2%

14.6%

13.5%

Ordinary income

20,373

6,866

10,661 55.3

5,961

8,104 36.0

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

14,098 152.4/163.5

3.9

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

6.8

8.0%

22,544 10.7 14,513

FY2024 FY2025 YoY (%) 4Q 4Q

2.9

Foreign exchange gains/losses: ¥0.9 bn losses → ¥3.4 bn gains Extraordinary losses: Extra payments for early retirements ¥2.4 bn

150.5/174.2

153.5/160.2

5.5 8.3

155.0/184.1

 The operating results for FY2025 and the 4th quarter of FY2025 are shown above.

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

Impact of Ad-Tech: approx. 60%

FY2024 20,713

Increase in gross profit from sales increase +4,486

Impact of selling prices and cost +834

Main reasons for gross margin changes • Increase in cost including tariff impact -0.9 pt • Increase in inventory devaluation -0.6 pt • Higher selling prices of +0.8 pt in-house products • Higher gross margin of IT systems +0.4 pt and services in Japan • Favorable product mix +0.2 pt

Impact of Ad-Tech: less than 50%

Increase in SG&A* -6,729

Currency effect -559

Items of increase/decrease in SG&A expenses* +¥2.71 bn • Salaries • Amortization of goodwill +¥0.93 bn • Depreciation +¥0.87 bn • R&D expenses +¥0.62 bn

FY2025 18,745

Benefit from the reform of the profit structure

Approx. 2.2%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 the decrease in operating income for FY2025 is shown above.  Increase in gross profit from sales increase was ¥4.4 billion, of which, around 60% was due to the impact of the consolidation of Ad-Tech.  Gross margin decreased year-on-year due to higher costs and increased inventory devaluation, while a favorable product mix and higher selling prices of in-house products partially offset the decline.  Due to wage increases and R&D investment, as well as higher depreciation caused by M&A and capital investments, SG&A expenses were a negative factor worth ¥6.7 billion, of which, less than 50% 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 4Q (Amounts of less than ¥1 million are rounded down)

Impact of Ad-Tech: approx. 40%

FY2024 4Q 9,778

Impact of selling prices and cost Increase in +220 gross profit from sales increase +1,348

Main reasons for gross margin changes • Increase in cost including tariff impact -1.6 pt • Increase in inventory devaluation -1.5 pt • Favorable product mix +1.3 pt • Higher selling prices of in-house products +0.8 pt • Higher gross margin of IT systems and services in Japan +0.5 pt

Impact of Ad-Tech: more than 50%

Increase in SG&A* -1,727

Currency effect -9

FY2025 4Q 9,610

Items of increase/decrease in SG&A expenses* +¥1.12 bn • Salaries • Depreciation +¥0.31 bn • R&D expenses +¥0.30 bn • Amortization of goodwill +¥0.24 bn

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 4th quarter of FY2025 was the same as for the full year .

4) Domestic Sales

Sales of in-house/ third-party products

Sales by market

Sales by product category (Sales, millions of yen)

(¥100 million)

FY2024

FY2025

Physiological Measuring Equipment

36,247

36,824

1.6

Patient Monitors

46,194

45,927

Treatment Equipment

30,766

28,912

Other Medical Equipment

32,028

32,742

2.2

Total sales

145,237

144,406

Medical Devices

60,099

58,664

Consumables and Services

85,137

85,742

0.7

YoY(%)

(Reference)

[ Markets ]

Sales of AEDs decreased in the PAD market mainly due to inventory adjustment at distributors. Sales in the public hospital market also decreased. 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 consumables and services increased, while sales of in-house medical devices decreased slightly. Physiological Measuring Equipment: Sales of diagnostic information systems achieved double-digit growth and sales of neurology products also increased favorably. Sales of ECGs and polygraphs for cath lab decreased. Patient Monitors: Sales of telemetry systems and transmitters decreased. Sales of clinical information systems achieved doubledigit growth. Sales of bedside monitors also increased. Treatment Equipment: Sales of Abbott’s ablation catheters decreased. Sales of AEDs and defibrillators also decreased. Sales of ventilators increased favorably, mainly for intubated-type ventilators. Other Medical Equipment: Sales of installation and maintenance services for medical devices increased favorably and sales of hematology instruments and reagents also increased. Sales of locally purchased products decreased. © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

 Domestic sales decreased due to restraining sales of locally purchased products and lower sales of Abbott’s products.  Sales of AEDs in the PAD (public access defibrillation) market decreased mainly due to inventory adjustment at distributors. Sales in the public hospital market also decreased, while sales in the university, private hospital, and clinic markets increased.  Sales of third-party products decreased, while sales of our in-house consumables and services increased.  Sales of Treatment Equipment and Patient Monitors decreased, while sales of Physiological Measuring Equipment and Other Medical Equipment increased.  In Physiological Measuring Equipment, sales of diagnostic information system achieved double-digit growth and sales of neurology products increased favorably. Sales of ECGs and polygraphs for cath lab decreased.  In Patient Monitors, sales of telemetry systems and transmitters decreased. Sales of clinical information systems achieved double-digit growth and sales of bedside monitors also increased.  In Treatment Equipment, sales of Abbott’s ablation catheters decreased. Sales of AEDs and defibrillators also decreased. Sales of ventilators increased favorably, mainly for intubated-type ventilators.  In Other Medical Equipment, sales of installation and maintenance services for medical devices increased favorably and sales of hematology instruments and reagents also increased. © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

5) Overseas Sales

Overseas sales ratio

Overseas sales: YoY +13%

FY2024

(on a local currency basis：+14%, on a local currency basis excluding consolidation of Ad-Tech: +8%)

Sales by region

35.6%

Sales by product category

(¥100 million)

YoY

Local currency basis

Asia & Other

+6%

+9%

Europe

+9%

+4%

Latin America

+4%

+6%

North America

+19%

+20%

FY2025

38.6%

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

FY2024

FY2025

YoY (%)

Physiological Measuring Equipment

10,627

16,812

58.2

Patient Monitors

38,771

38,331

-1

Treatment Equipment

22,417

27,373

22.1

Other Medical Equipment

8,371

8,175

-1

Total sales

80,187

90,693

13.1

Medical Devices

53,204

57,332

7.8

Consumables and Services

26,982

33,361

23.6

(Reference)

[ Region ]

Sales increased in all regions driven by double-digit growth in North America. Sales increased favorably on a local currency basis excluding the impact of the consolidation of Ad-Tech. [ Products ] Physiological Measuring Equipment: Sales of neurology products including Ad-Tech increased significantly. Treatment Equipment: Sales of ventilators increased significantly in North America, Europe, and Latin America. Patient Monitors: Sales in North America and Europe decreased compared to the strong growth in FY24, while sales in Asia & Other achieved double-digit growth. Sales increased favorably in FY25 4Q. © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

 Overseas sales achieved double-digit growth, as sales in all regions increased favorably. Overseas sales also increased on a local currency basis excluding the impact of the consolidation of Ad-Tech.  The overseas sales ratio increased to 38.6%.  Sales of Physiological Measuring Equipment increased significantly, driven by neurology products including Ad-Tech. In Treatment Equipment, sales of ventilators increased significantly in North America, Europe, and Latin America. Sales of Patient Monitors decreased in North America and Europe compared to the strong growth in FY2024, while sales in Asia & Other achieved double-digit growth. In the 4th quarter, sales of Patient Monitors increased favorably.

5.1) Sales in North America  Double-digit growth on yen basis / local currency basis excluding impact of consolidation of Ad-Tech  Significant growth of Physiological Measuring Equipment and Treatment Equipment, Decline in sales of Patient Monitors compared to strong growth in FY24, while double-digit growth in FY25 4Q YoY +19% (Local currency basis +20%) (¥100 million)

498

500

400

370 43

419 50

300

200

218

255

100

102

103

FY2023

FY2024

103

[ 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

244

 Patient Monitors: low-single-digit decline Decline in medical devices, while double-digit growth in consumables such as sensors. Double-digit growth in FY25 4Q driven by delivery and installation of medical devices

138

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

0 FY2025

 Sales in North America achieved double-digit growth both on a yen basis and on a local currency basis excluding the impact of the consolidation of Ad-Tech.  Sales of Physiological Measuring Equipment increased significantly, 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 compared to the strong growth in FY2024. Sales of medical devices decreased, while sales of consumables such as sensors increased favorably. In the 4th quarter, sales achieved double-digit growth driven by delivery and installation of medical devices.  In Treatment Equipment, sales of ventilators increased significantly and sales of AEDs also achieved double-digit growth. 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  Increased on yen basis / local currency basis in FY25 thanks to double-digit growth in 4Q. Steady growth mainly in Paraguay and Peru

(¥100 million)

YoY +4% (Local currency basis +6%)

[ Product Category ] * YoY on a local currency basis

60 4

 Physiological Measuring Equipment: high-teen decline Decline in sales of neurology products. Favorable growth of ECGs

50 40

53 5 20

56 4

 Patient Monitors: Decline mainly in Mexico and Brazil

 Treatment Equipment: low-30% growth Significant growth of ventilators thanks to large orders in Paraguay. Strong growth of AEDs  Other Medical Equipment: mid-teen growth Growth of maintenance services for medical devices in Mexico

30 20

FY2023

FY2024

FY2025

low-teen decline

 Sales in Latin America increased both on a yen basis and on a local currency basis due to double-digit growth in the 4th quarter. Sales increased mainly in Paraguay and Peru.  Sales of Treatment Equipment and Other Medical Equipment increased favorably, while sales of Patient Monitors and Physiological Measuring Equipment decreased.

5.3) Sales in Europe  Increased favorably, especially in Turkey, the U.K., and Italy

YoY +9% (Local currency basis +4%) (¥100 million)

140

131

120

125 19

136 25

 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

100 80

60 40

FY2023

FY2024

FY2025

20 0

[ Product Category ] * YoY on a local currency basis

high-single-digit decline

 Treatment Equipment: mid-teen growth Significant growth of ventilators and defibrillators  Other Medical Equipment: mid-teen decline Decline in sales of hematology instruments and reagents

 Sales in Europe increased favorably, especially in Turkey, the U.K, and Italy.  Sales of Physiological Measuring Equipment and Treatment Equipment achieved double-digit growth. Sales of Patient Monitors and Other Medical Equipment decreased.

5.4) Sales in Asia & Other  Increased favorably, especially in Southeast Asia such as Thailand and Vietnam, in India, and in the Middle East & Africa such as Morocco and Israel  FY25 4Q: Increased YoY, compared to decline in 3Q when it took time to comply with laws and regulations YoY +6% (Local currency basis +9%) (¥100 million)

250

200

150

234 42 74

203 30 61

216 34

[ Product Category ] * YoY on a local currency basis  Physiological Measuring Equipment: mid-teen growth Double-digit growth of neurology products. Favorable growth of ECGs

 Patient Monitors: low-20% growth Received large orders in Morocco. Favorable growth in Southeast Asia and India

 Treatment Equipment: mid-single-digit growth Double-digit growth of defibrillators and ventilators

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

FY2023

FY2024

FY2025

100

 Sales in Asia & Other increased favorably, especially in Southeast Asia, India, and the Middle East & Africa. Sales in the 4th quarter increased year-on-year, while sales in the 3rd quarter decreased mainly due to delays in complying with laws and regulations.  Sales of Patient Monitors and Physiological Measuring Equipment achieved double-digit growth. Sales of Treatment Equipment also increased. Sales of Other Medical Equipment decreased.

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

Physiological Measuring Equipment Patient Monitors Treatment Equipment Other Medical Equipment Total sales

FY2024

FY2025

YoY(%)

46,874

53,636

14.4

(43%)

(45%)

84,965

84,258

(65%)

(64%)

53,184

56,286

(44%)

40,400

40,918

(45%)

(47%)

225,424

235,099

(52%)

Physiological Measuring Equipment

4.3

Treatment Equipment

Consumables and Services

78%

115,996

(54%)

112,119

119,103

(50%)

2.4

Total

75.2%

24.8%

Medical Devices

81%

Physiological Measuring Equipment

Total

Third-party products

58%

54%

46%

61%

39%

34%

66%

49.3%

Medical Devices

(50%)

30%

42%

Treatment Equipment Other Medical Equipment

19%

70%

In-house products

6.2

22% 32%

Patient Monitors

113,304

12%

68%

Consumables and Services

(Reference)

Medical Devices

42% 88%

Other Medical Equipment

5.8 1.3

58%

Patient Monitors

50.7%

Consumables and Services

*The figures in parentheses in the table are gross profit margins.

 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 (Sales, millions of yen) FY2024

FY2025

YoY (%)

Neurology Products

10,544

16,273

54.3

ECGs (Electrocardiographs)

6,280

6,230

Polygraphs for Cath Lab

17,841

17,521

Diagnostic Information Systems

6,343

7,116

12.2

Other Physiological Measuring Equipment *

5,864

6,494

10.7

Physiological Measuring Equipment

46,874

53,636

14.4

*Includes products of other companies.

FY2024

Patient Monitors Clinical Information Systems

FY2025

FY2024

FY2025

YoY (%)

Defibrillators (for Hospital and Ambulance) AEDs (Automated External Defibrillator) Pacemakers / ICDs Ventilators Other Treatment Equipment

8,335 24,451 2,446 9,688 8,263

9,093 24,390 2,445 13,190 7,166

9.1

0.3
0.0 36.1
13.3

Treatment Equipment

53,184

56,286

5.8

（Ref.）AED Unit Sales (units) Domestic Unit Sales (units)

117,000 63,800

115,400 57,900

FY2024

FY2025

YoY (%)

84,965

84,258

Hematology Instruments

13,217

12,799

5,585

6,337

13.5

Imaging Systems and Others *

27,182

28,119

3.4

Other Medical Equipment

40,400

40,918

1.3

*Includes consumables, installation and maintenance services which are not part of other categories.

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

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

FY2024

FY2025

Change

Current assets

183,085

177,808

5,276 Current liabilities

Inventories

56,174

55,992

Property, plant & equipment

29,270

32,250

2,979 Non-current liabilities

Intangible assets

27,653

27,222

Investments & other assets

18,266

19,256

989 Net assets

Total assets

258,276

256,538

6.2

5.9

Inventory turnover (months)

Interest-bearing debt Interest-bearing debt

1,737 Total liabilities & net assets

[Reasons for decrease of current assets] Notes and accounts receivable decreased by ¥1.3 bn. [Reasons for increase of property, plant & equipment ] Buildings and structures increased by ¥6.3 bn. The Tsurugashima Production Center started operations

Equity ratio

FY2025

Change

72,296

49,428 - 22,867

26,030

50 - 25,980

4,685

27,286

22,601

ー

22,388

181,294

179,824

1,470

258,276

256,538

1,737

69.5%

70.1%

[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 ¥22.3 bn. *Refinancing of short-term borrowings into long-term borrowings © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

 Property, plant & equipment increased as the Tsurugashima Production Center started operations.

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

FY2024

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 ROE

FY2025

Change

15,286

21,055

5,768

25,138
8,285

16,853

9,852

12,770

22,622

2,550

11,599 - 14,149

485

1,405

919

6,816

2,576

9,392

43,061

45,637

2,576

7.8%

8.1%

(Billions of yen) FY2024 FY2025 Change Income before income taxes 21.5 19.9 -1.6 Decrease (increase) in accounts receivable 0.7 3.3 +2.6 Income taxes paid -9.7 -7.6 +2.1 FY2024 FY2025 Change Purchase of property, plant and equipment -7.1 -5.7 +1.3 Purchase of shares of subsidiaries resulting in change in scope of consolidation -18.8 -0.5 +18.3 FY2024 FY2025 Change Net increase (decrease) in short-term borrowings 25.3 -25.9 -51.3 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 ¥45.6 billion.

8) Capital Investment and R&D Expenses (Amounts of less than ¥1 million are rounded down)

FY2024 Actual

FY2025 Original forecast announced May 13

Revised forecast announced Nov 10

Actual

Change

FY2026 Plan

Change

Capital investment

9,519

9,400

7,807

1,711

6,000

1,807

Depreciation

4,067

4,900

5,000

4,757

690

6,000

1,243

R&D expenses

6,826

7,200

7,400

7,453

626

7,700

247

 FY2026 capital investment plan Molds for new products, measuring equipment and jigs, products for demonstration, production equipment, and introduction of new CRM1 PLM/MES2 systems Capital Investments: approx. ¥3.0 bn

Tsurugashima Production Center Total investments: approx. ¥11.0 bn

FY22: ¥0.3 bn, FY23: ¥0.5 bn, FY24: ¥0.9 bn FY25: ¥0.9 bn, FY26 : ¥0.3 bn ~

PLM: Started operation in Sep. 2025 MES: Started operation in Nov. 2025

FY22: ¥2.3 bn (Acquisition of the site) ~FY24: ¥4.1 bn, FY25: ¥2.9 bn (Building and facilities) FY26: ¥0.3 bn (Facilities) ~

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

*1 CRM: Customer Relationship Management including Sales Force Automation function *2 PLM: Product Life-cycle Management, MES: Manufacturing Execution System © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

 Capital investments and depreciation fell short of the Company’s forecasts due to a delay in investment in molds for new products, while PLM/MES systems and the Tsurugashima Production Center started operations.  R&D expenses were in line with the schedule.  In FY2026, the Company will undertake capital investments such as expanding production equipment at the Tsurugashima Production Center. To further the implementation of corporate DX, the Company will add functions to PLM/MES systems, as well as introducing new CRM systems in Japan.

Forecast for FY2026

1) Business Environment The global economic outlook is expected to remain uncertain due to geopolitical risks and policy trends in the U.S., as well as higher oil prices and difficulties in procuring parts and components

Japan Securing medical staff and promoting reforms in their work style Medical service fees will rise by 3.09% in June 2026. Responses to price and wage inflation. Urgent measures to address deterioration of medical institutions’ business environment

Transformation to a more efficient, higherquality healthcare system. Establishing integrated community care systems Funds for securing comprehensive medical and long-term care in the community: FY2026 budget ¥96 bn for medical care

Deterioration of medical institutions' business due to price and wage inflation Subsidy program for improving operational efficiency and workplace environment by introducing ICT in medical institutions and for addressing price and wage inflation

International U.S. • Future policy trends such as tariffs and proposed budget cuts to public health insurance should be monitored carefully

Emerging countries • China: Enforced new standards and preferential treatment for domestically produced products • Middle East & Africa, Southeast Asia: Concerns about the impact of conflicts in the Middle East • Moves to protectionism and tightening of laws and regulatory requirements for medical devices in each country

 Amid prolonged uncertainty caused by geopolitical risks and policy trends in the U.S., there are concerns about higher oil prices and difficulties in procuring parts and components due to conflicts in the Middle East.  In Japan, the business environment is expected to recover gradually, as the Japanese Government has implemented support for medical institutions through supplementary budgets and revision of medical treatment fees.  Internationally, in the U.S., capital investment by medical institutions is expected to remain steady, while future policy trends such as tariffs and public health insurance should be monitored carefully. In the Middle East and Southeast Asia, there are concerns about the impact of conflicts in the Middle East.  Medical equipment companies are required to respond to such changes in the global business environment more quickly and flexibly than before.

2) Forecast for FY2026 FY2025

FY2026

YoY

Actual

Forecast

(%)

Net sales

235,099

232,500

Domestic sales

144,406

133,500

Overseas sales Gross profit

90,693 121,726

99,000 129,000

9.2 6.0

51.8%

55.5%

102,981

105,500

43.8%

45.4%

Operating income

18,745

23,500

(Operating margin)

8.0%

10.1%

Ordinary income

22,544

23,500

4.2

Income attributable to owners of parent

14,513

15,000

3.4

(Gross margin)

SG&A expenses (SG&A ratio)

Overseas sales ratio Average exchange rate (yen) 1 USD/1 EUR

38.6% 150.5/174.2

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

+8% on a comparable basis excluding impact of discontinuation of Abbott products and consolidation of DOWELL +9% on a local currency basis

2.4

Overseas sales by region FY2025 Actual

FY2026 Forecast

North America

49,808

56,300

13.0

Latin America

5,613

6,200

10.4

Europe

13,649

13,800

1.1

Asia & Other

21,621

22,700

5.0

Total

90,693

99,000

9.2

25.4

42.6% 150/175

YoY (%)

 The Company expects that both sales and income for FY2026 will increase, excluding temporary factors.  Both domestic sales and overseas sales are expected to record high-single-digit growth, on a comparable basis excluding the impact of the discontinuation of Abbott products and the consolidation of DOWELL Co., Ltd.

3) Highlights of Forecast for FY2026 Domestic sales [ down ¥10.9 bn ]

Net sales [ down ¥2.5 bn YoY ]

Overseas sales [ up ¥8.4 bn ]

Operating income [ up ¥4.8 bn ]

Ordinary income [ up ¥1.0 bn ]

Net income

• +8% on a comparable basis excluding impact of discontinuation of Abbott products and consolidation of DOWELL Focusing on providing in-house products, consumables, and services Abbott products: Decline by ¥21.3 bn to ¥2.3 bn from ¥23.6 bn Hospital / clinic markets: Growth by ¥9.7 bn by focusing on ventilators and DHS products AEDs: Growth by ¥0.7 bn as inventory adjustment at distributors was settled down

• +9% on a yen basis, +9% on a local currency basis • Aiming at sales growth in all regions North America: Focusing on sales recovery of patient monitors, Sales growth of ventilators and neurology products Latin America, India: Steady demand for medical equipment Middle East & Africa, Southeast Asia: Concerns about the impact of conflicts in the Middle East

• Gross margin is expected to improve supported by a favorable product mix, while sales will decrease due to the discontinuation of Abbott products • SG&A expenses are expected to increase due to wage increases and higher depreciation related to investments in internal IT systems • Continuing implementation of measures in three key areas of the reform of the profit structure

[ up ¥0.5 bn ] *The Company incorporates negative factors worth ¥1.8 bn for sales and ¥1.2 bn for operating income caused by conflicts in the Middle East into its full-year forecast, reflecting anticipated lower sales and higher shipping costs, respectively. © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

(Ref.) Analysis of FY2026 Forecast (¥100 million)

Sales 2,500 2,400 2,300 2,200 2,100 2,000 1,900 1,800 1,700 1,600 1,500

FY2025 2,350

Increase in sales Increase in AED sales in Japanese in Japan hospital and +7 clinic market Currency ¥23.6bn  ¥2.3bn +97 Actual increase effect Impact of Abbott in overseas sales -1 DOWELL: products +85 more than 10% -213

FY2026 2,325

AED unit sales in Japan FY25: 57,900 units  FY26: 61,400 units

Operating Income 300 250 200 150 100 50 0

FY2025 187

Increase in Impact of selling prices other SG&A Increase in Depreciation such as and cost Impact of and R&D Personnel +78 increase/decrease expenses expenses in sales -16 -15 +2 Impact of

Including negative impact of discontinuation of Abbott products and positive impact of consolidation of DOWELL

DOWELL: more than 50%

Currency effect -1

FY2026 235 Benefit from the reform of the profit structure

Approx. 1.5%pt

 In Japan, capital expenditure by medical institutions is expected to recover moderately, while there is the impact of the discontinuation of Abbott products. Sales of AEDs are expected to recover as inventory adjustment at distributors has settled down.  Internationally, the Company aims to increase sales in all regions. In North America, sales of Patient Monitors are expected to recover. We will also focus on expanding sales of ventilators and neurology products. In the Rest of World, demand for medical equipment is expected to remain steady in Latin America and India. In India, the Company aims to achieve sales growth by starting local production of medical devices for the Indian market. On the other hand, in the Middle East and Southeast Asia, there are concerns about the impact of conflicts in the Middle East.  Gross margin is expected to improve, because the Company will discontinue providing Abbott products and focus on selling in house products. SG&A expenses are expected to increase due to wage increases and higher depreciation related to investments in internal IT systems. The Company will focus on improving productivity through its reform of the profit structure of the entire Group.

(Ref.) Consolidated Forecast for FY2026 by Product Category / Effect of Exchange Rates FY2025 Actual

FY2026 Forecast

Composition ratio (%)

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

Physiological Measuring Equipment

53,636

41,200

17.7 - 23.2  +6% excl. impact of discontinuation of Abbott products

Patient Monitors

84,258

92,300

39.7

9.5  +8% excl. impact of consolidation of DOWELL

Treatment Equipment

56,286

54,900

23.6

2.5  +10% excl. impact of discontinuation of Abbott products

Other Medical Equipment

40,918

44,100

19.0

7.8

Total

235,099

232,500

100.0

Medical Devices

115,996

126,500

54.4

9.1

Consumables and Services

119,103

106,000

45.6 - 11.0  +7% excl. impact of discontinuation of Abbott products

(Reference)

Estimated Exchange Rate Fluctuations for Full Fiscal Year Sales

US Dollar EURO

Operating Income

Business Strategy

Long-term Vision and Three-year Business Plan We contribute to the world by fighting disease and improving health with advanced technology, and create a fulfilling life for our employees.

Management Philosophy

Long-term Vision Three-year Business Plan Core Values

Create a better future for people and healthcare by solving global medical issues Targets for FY2029

Operating Margin

15%

Overseas Sales Ratio

45%

Apr. 2027 - Mar. 2030

PhaseⅢ: Realize BEACON 2030

Apr. 2024 - Mar. 2027

PhaseⅡ: Invest for growth

Apr. 2021 - Mar. 2024

PhaseⅠ: Strengthen foundation

Core values are shared by Nihon Kohden staff worldwide, helping to connect them and contributing to the promotion of our Management Philosophy, Long-term Vision, and Three-year Business Plan.

 In its Long-term Vision, BEACON 2030, Nihon Kohden aims to create a better future for people and healthcare by solving global medical issues.

Three Transformation for BEACON 2030 1 • Promote overseas business strategies emphasizing high growth and improved profitability • Develop sophisticated value propositions and cultivate new businesses areas in domestic business • Create new business models by utilizing our global business foundation

2 • Create a business model that helps solve medical issues • Realize a value creation model that creates value from data, by utilizing our core strength in Human Machine Interface* technology

3 • Establish an organizational and governance system in line with our corporate strategy • Establish a development, production and sales system based on Global Supply Chain Management • Strengthen global business deployment capabilities by establishing a Center of Excellence

Human machine interface is the user interface that connects human and machine. For Nihon Kohden, this refers to sensor technology, signal processing technology, and data analysis technology. © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

 While global trends are drastically changing, we believe that the importance of these three transformations outline in our Long-term Vision is increasing.

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

 In the final year of BEACON 2030 Phase II, the Company will implement the reform of the profit structure and make investments in growth areas, and work on our transformation into a global MedTech company.

Review of the 2nd year - 6 Key Measures

Growth

Sales growth 4.3% in FY2025

Profitability

OPM 8.0%

Capital efficiency

in FY2025

ROE 8.1% in FY2025

Enhance product competitiveness

Implement the reform of the profit structure

Introduce Nihon Kohden’s own ROIC formula

Launched new high-value-added products and services

Achieved YoY 220 bps improvement in operating margin in FY25 Accelerating implementation of measures in three key areas toward 500 bps improvement in operating margin (FY26 vs FY23)

Visualizing NK’s own ROIC in each R&D, production, sales, and administration division, and providing feedback for improvement in profitability and efficiency Promoting monitoring of ROIC/CCC at North American subsidiaries

Focus on growth of North America Business

Advance global supply chain management

Reduce cash conversion cycle

Significant growth in sales of ventilators through continuing to sign new contracts with major IDNs/GPOs*1 Achieved double-digit sales growth and recorded operating income

Started production of transport monitors at Defibtech Started operation of PLM/MES systems*2 Started operations at Tsurugashima Production Center Preparing for production of medical equipment in India

Increased inventories of finished goods temporarily in preparation for starting operation of PLM/MES systems and Tsurugashima Production Center CCC remained at 215 days compared to 225 days in FY24 and forecast of 190 days

• Fully automatic AED • Transmitters • On-site alarm analytics software • Admission and discharge management software • AlarmSense alarm solution

*1 IDN: Integrated Delivery Network, GPO: Group Purchase Organization *2 PLM: Product Life-cycle Management, MES: Manufacturing Execution System © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

 The progress of six key measures in the 2nd year is shown above.  While we have been steadily strengthening our business structure for mid-to long-term growth, there are gaps between our actual performance and our numerical targets for all three indicators: growth, profitability, and capital efficiency.

Target and Forecast for the Last Year of FY2023 Actual FY2026 Target FY2026 Forecast CAGR

Net sales

¥221.9 bn

¥256.0 bn

¥232.5 bn

+2%

Domestic sales Overseas sales

¥142.3 bn

¥157.0 bn

¥133.5 bn

-2%

¥79.6 bn (35.9%) ¥99.0 bn (38.7%) ¥99.0 bn (42.6%)

+8%

(Overseas sales ratio)

Consumables and services sales ratio

47.9%

50%

In-house sales ratio

73.5%

75%

Solution sales ratio

11%

Gross profit margin

50.2%

53%

Operating income

¥19.5 bn (8.8%)

Income attributable to owners of parent

¥17.0 bn

¥25.0 bn

ROIC

4.0%

12%

ROE

9.8%

12%

(Operating income margin)

Average exchange rate (yen) 1 USD/1 EUR

143.9/156.8

45.6%

55.5%

¥38.5 bn (15%) ¥23.5 bn (10.1%)

140/150

Solution business, software/program, and maintenance services are included.

+6%

¥15.0 bn

Sales by region Net sales

150/175

FY23 Actual

FY26 Target FY26 Forecast

CAGR

¥142.3 bn ¥37.0 bn ¥6.0 bn ¥13.1 bn ¥23.4 bn

¥157.0 bn ¥50.0 bn ¥6.0 bn ¥14.0 bn ¥29.0 bn

¥133.5 bn ¥56.3 bn ¥6.2 bn ¥13.8 bn ¥22.7 bn

-2% +15%

Japan North America Latin America Europe Asia & Other

+1% +2% -1%

 Differences between numerical targets and forecasts for the last year of BEACON 2030 Phase II are shown above.

Difference b/w Target and Forecast in FY2026 Domestic sales [ down ¥23.5 bn ]

Net sales [ down ¥23.5 bn ]

Overseas sales [ flat ] down ¥6.3 bn in actual sales / up ¥6.3 bn in currency effect

Operating Income [ down ¥15 bn ]

 Abbott products:

Down ¥24.8 bn

 Locally purchased products:

Down ¥2.9 bn

 In-house products:

Up ¥4.2 bn

Contributing to gross margin improvement

including consolidation of DOWELL and raising selling prices

 Latin America, Southeast Asia, India: Generally in line with plan  China: Prolonged economic slowdown and anti-corruption campaign ⇒ Promoting partnerships with local companies  Middle East & Africa, Europe: Geopolitical risks and delays in complying with laws and regulations ⇒ Generally completed complying with laws and regulations, The impact of conflicts in the Middle East should be monitored  North America: Customers are cautious about decision-making in patient monitor negotiations ⇒ Recovery trend in orders, Focusing on delivery and installation. Creating synergies with Ad-Tech

• Gross profit due to shortfall in sales: • COGS including tariffs / higher raw material prices: • SG&A expenses including wage and price inflation: • Costs related to M&A:

Down ¥7.1 bn Up ¥4.6 bn Up ¥1.0 bn Up ¥4.1 bn

Steady sales growth Continuing the reform of the profit structure

Difference b/w Target and Forecast in FY2026 Sales

(¥100 million)

Target 2,560

Discontinuation of Locally Abbott products purchased products

-248

-29

Domestic sales

+42

• Consolidation of DOWELL • Higher selling prices

Japan -235

Operating Income Target 385

Increase in in-house products in Japan

-55

China -50 Middle East & Africa -29 Europe -18

Gross profit -117

+63

Forecast

2,325

International ±0

Overseas -46 sales • Tariffs shortfall • Higher raw

-37

Currency effect

-63

Increase in Increase in SG&A COGS expenses

+21

Discontinuation of Abbott products

Actual overseas sales

-10

• Wage increases material prices • Inflation

M&A costs

-41

Currency effect

+18

Forecast

235

 In Japan, sales of in-house products are expected to exceed the target, supported by the impact of the consolidation of DOWELL and raising selling prices, while there will be an impact from the discontinuation of Abbott products and fasterthan-expected reduction in sales of locally purchased products. As a result, gross margin is expected to improve.  Internationally, sales in China, the Middle East & Africa, and Europe are expected to fall short of the targets, while sales will be affected by greater-than-expected depreciation of the yen. In China, the sluggish demand for medical equipment has been prolonged. We will reorganize our business structure by promoting partnerships with local companies. In the Middle East & Africa and Europe, the impact of geopolitical risks and intensifying price competition should be monitored carefully. We have generally completed compliance with laws and regulations by the end of March, 2026. In North America, orders for patient monitors are showing a recovery trend, while the decision-making process for business negotiations has been cautious.  Operating income is expected to fall short of the target. Gross profit is expected to be lower due to a shortfall in sales, and costs of goods sold are expected to increase due to tariffs and higher raw material prices. SG&A expenses are also expected to increase due to wage and price inflation as well as costs related to M&A.  In response to rapid changes in the business environment that were not anticipated at the time of planning, we will pursue further business growth and improve our profit structure. We will also strengthen our organizational structure and capabilities in preparation for the final year of Phase II and the next Medium-term Business Plan. © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

Growth

Enhance product competitiveness

New products and services in FY2025/FY2026 Contributing to easing medical staff workload

Improving hospital bed occupancy rate Reducing length of hospital stays

Optimizing hospital management Improving economics of medical care

Solution Business (ITS＋DHS) On-site alarm analytics software • Analyzing real-time alarm status and causes for each patient

Launched in Japan in FY2025 4Q

AlarmSense alarm solutions Launched in the U.S. in FY2025 2Q Planned to launch in Europe in FY2026

• Analyzing and displaying alarm trends across the hospital • Reducing alarm fatigue for medical staff for each patient on-site Visualizing andand analyzing real-time alarm status and causes Admission discharge

management software

• Automatically acquiring, Launched in Japan in FY2025 4Q aggregating, and visualizing information necessary for hospital bed management, including information on admission, discharge, and transfer

Patient Monitoring Business Transmitters ZS-730/720P

Launched in Japan in FY2025 3Q

Next generation central monitor Planned to launch in the U.S in FY2026

 To enhance product competitiveness, we will focus on proposals for new products and services as shown above.  We introduced alarm analytics software, and admission and discharge management software as part of our line-up of digital health solution products that utilize data obtained from medical devices in Japan. We also started to provide a locally developed alarm solution in the U.S.  In our Patient Monitoring Business, we expect a sales contribution from transmitters, which are compact and lightweight, and offer longer time battery life compared to existing models. We also plan to launch a nextgeneration central monitor in the U.S.  By accelerating our transition to solution-based business models both in Japan and internationally, we aim to contribute to resolving global healthcare challenges, such as easing the workload of medical staff and improving hospital management.

Growth

Focus on stable growth in Japan

Market growth rate Approx.1~2%

Phase II sales target CAGR 3%

(¥100 million)

FY2016 - FY2025 10-year sales CAGR

In-house products +4.1%

+1.6%

(Ratio of consumables and services: 55%, FY25)

Medical devices +2.5% Consumables & services +5.6%

Purchased products +1.8%

Locally purchased products -20%

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

Abbott products ¥23.6 bn → ¥2.3 bn

+8% YoY excluding impact of Abbott products and consolidation of DOWELL

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

Established Domestic Business Headquarters Strengthening domestic business structure

Consumables and services

Promoting crossdepartmental transformation

Creating new growth business

Solution Business (ITS＋DHS)

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

• Promoting medical DX* and contributing to improving quality and economy of medical care • Consolidated DOWELL as a subsidiary (Feb. 2026)

[ Transfer of operations for Abbott products ] Completed approx. 65% as of Mar. 31, 2026 and planned to complete approx. 90% as of Sep. 30, 2026

 In Japan, looking back over the past 10 years, sales of in-house products including consumables and services have steadily increased. The profitability of our domestic business has also improved, thanks to our pricing policies such as raising selling prices.  To strengthen of structural foundation in Japan, the Company established the Domestic Business Headquarters in April 2026. We will crossdepartmentally promote reforming our business processes by using new CRM, as well as strengthening of our domestic business structure, transition to solution business models, and creating new growth businesses.  Following the discontinuation of Abbott products, we will use human resources with advanced clinical expertise to strengthen our initiatives in growth areas such as ventilators, DHS products, and neuromonitoring. We will enhance our customer experience by building a customer-centric value creation model.

Growth

Focus on higher growth in North America

Market growth rate mid-single digit

Phase II sales target CAGR 11%

FY2016 - FY2025 10-year sales CAGR

+13%

Treatment Equipment +20%

(¥100 million) ■Physiological Measuring Equipment ■Patient Monitors ■Treatment Equipment ■Other Medical Equipment

Physiological Measuring Equipment* +14%

Patient Monitors +10%

Consolidated Ad-Tech in FY2025

No.1 market share for mask-type ventilator

40% or more +13% YoY on a local

FY2025 DHS products = 16% (Sales composition in Patient Monitors)

in 2025 (Company’s estimate)

currency basis

Increasing number of business negotiations for intubated-type ventilators

// Ventilators

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

Digital Health Platform RemoteSense AlarmSense

Physiological Measuring Equipment

Patient Monitors

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

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

 In North America, we have achieved a sales CAGR of 13% over the past 10 years. Notably, the Treatment Equipment Business has been rapidly expanding after the launch of ventilators. We have continued to sign new contracts with major IDNs/GPOs. We estimate that our market share of mask-type ventilators in the U.S. was 40% or more in 2025, leading to expanding business negotiations for intubated-type ventilators.  In our Patient Monitoring Business, we have enhanced our solution capabilities by expanding our line-up of DHS products. We aim at gaining market share for patient monitors by developing new customers who have installed our ventilators and introducing a next-generation central monitor in FY2026.  As for neurology products, we have enhanced our solution capabilities in the neuromonitoring area by creating synergies with Ad-Tech. We are also focusing on expanding sales of home sleep recorders, a product for which demand is increasing.

Profitability FY2026 Target

Implement the reform of the profit structure

OPM improvement 5%pt

Improvement: 80 bps in FY2024  300 bps (YoY +220 bps) in FY2025 Expected 450 bps (YoY +150 bps) in FY2026 Continuing to implement measures in three key areas to improve profitability

Target

Reform of profit structure

FY2023 OPM 8.8%

Cost increases Sales growth and -4.9% optimization of inventories +6.1%

Product mix Apx. +2%

Productivity Apx. +2%

FY2023 OPM 8.8%

Sales growth / changes in COGS ratio +2.1%

Cost increases -5.3%

FY2026 OPM Target

15%

+Restraining of cost increase pressure

Delay in implementation of Value Engineering measures

+Increase of in-house products +Wage increases in Japan

Discontinuation of
Discontinuation of Abbott Abbott products products
Career Change
Overseas sales shortfall Support Program
Increase in COGS

Forecast

Supply chain Apx. +1%

Product mix Apx. +2%

Productivity Apx. +2%

Supply chain Apx. +0.5%

FY2026 OPM Forecast

10.1%

 Through the reform of the profit structure of the entire Company, we expect 450 bps improvement in operating income by the end of FY2026.  In terms of product mix, we see the effects of reviewing selling prices of inhouse products and restraining sales of locally purchased products with lower profitability in the domestic business.  In terms of improving personnel productivity, we are able to limit increases in headcount and overtime hours by utilizing generative AI. We also see the effects of reducing other expenses through the relocation or consolidation of domestic offices and the review of contracts and usage fees related to internal IT systems.  In terms of supply chain, we see certain results such as restraining cost increase pressures, while the effects of measures have been delayed due to higher-than-expected inflation.  We continue to aim at a 500 bps improvement in operating income through strengthening the implementation of each measure in the reform of the profit structure. We expect the effects will arise in FY2026 and beyond.

Profitability FY2026 Target

Implement the reform of the profit structure

OPM improvement 5%pt

Area

Measures in FY2026

Theme

Details of measures

Sale pricing

 Reviewing pricing policies both in Japan and overseas

Review of product line-up

 Reviewing and optimizing the number of products  Increasing in-house sales ratio

Product mix

Productivity

Improvement: 80 bps in FY2024  300 bps (YoY +220 bps) in FY2025 Expected 450 bps (YoY +150 bps) in FY2026 Continuing to implement measures in three key areas to improve profitability

 Reviewing pricing policies such as raising selling prices in Japan and internationally  Reviewing product line-up

 Improving operational efficiency by introducing Improving personnel generative AI: 1.4 mil hours per year productivity,  Focusing on core jobs and reallocating resources: 900 k hours per year including by utilizing  Reducing the increase of headcount and generative AI overtime hours Reducing other expenses

 Reducing infrastructure costs such as utility costs, rent, and communication expenses, and reviewing traveling costs

Optimizing parts Supply chain procurement

 Refining price negotiations with suppliers  Promoting Value Analysis/Value Engineering

 Restraining increase of headcount through improving productivity by utilizing generative AI Improved operational efficiency: 380k hours/year in FY24 ⇒ 1,990k hours/year in FY25 Target: over 2.5 mil hours/year in FY26  Introducing new CRM* / Enhancing call center functions to improve productivity  Reviewing license fees, contracts for company vehicles and parking facilities  Continuing price negotiations and reviewing suppliers under inflation  Promoting Value Engineering at factories in Japan, U.S., and China

 The main measures in the reform of the profit structure in FY2026 are shown above.

Capital efficiency

Introduce Nihon Kohden’s own ROIC formula  Visualizing NK’s own ROIC in each R&D, production, sales, and administration division, Providing feedback for improvement in profitability and efficiency  Promoting monitoring of ROIC and CCC at subsidiaries in North America  Cost of capital: approx. 8%, calculated by CAPM and WACC  Adopted NPV and IRR as investment decision criteria, Target IRR of 12% in Phase II. Investment decisions are made based on business strategies and the Three-year Business Plan. The Board of Directors verifies the progress and effectiveness of investment projects beyond a certain amount every year Consolidated ROIC = NOPAT ÷ Invested capital

Invested capital・・・interest-bearing liabilities ＋shareholders’ equity

Nihon Kohden’s own ROIC calculation formula Operating income Invested capital (future investment* + accounts receivable

inventory + property, plant and equipment - accounts payable)

R&D costs and personnel expenses in last three years

Consolidated ROIC / NK’s own ROIC 15% 10%

7.8%

8.0%

6.8% 4.0%

0% FY2022

FY2023

6.4%

6.3%

6.4%

5.6%

FY2024

FY2025

Reduce cash conversion cycle  Securing inventories of parts and components to ensure stable supply of in-house products and consumables, in response to shortages of memory components, higher oil prices, and procurement difficulties

7.4%

Consolidated ROIC Nihon Kohden’s own ROIC

FY2026 Forecast

Phase II target

~175 days

FY2026 target

~195 days

Mid-term target

 As an action on cost of capital-conscious management, we continue to improve the profitability and capital efficiency to achieve ROE of 12%.  We started introducing and utilizing Nihon Kohden’s own ROIC formula and have provided feedback to each department for improvement in profitability and capital efficiency.  We currently estimate that the cost of capital is around 8%.  The cash conversion cycle remained at 215 days in FY2025, which was shorter than FY2024. Currently, we need to secure inventories due to shortages of memory components, higher oil prices, and difficulties in procuring parts and components. In FY2026, we aim to achieve a cash conversion cycle of 195 days by strengthening inventory control and accelerating receivables collection.  To build organizational resilience that can respond promptly to changes in the global business environment, the Company established the Production & Logistics Operations, which manages the global supply chain including multi-plant production, in April 2026.

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 • Consolidated Ad-Tech as a wholly owned subsidiary, DOWELL as a subsidiary

Phase II :

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

R&D Investments

Capital Investments

Human Resource Development

M&A and Alliance

Dividends

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

Share buyback

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

(Consolidated total return ratio: 70%)

*Considering additional shareholder returns depending on the progress of future investment plans

Target: Consolidated Total Return Ratio of 35% or more

Number of treasury stock: 10,980k shares including ESOP

Sound financial foundation

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

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

Full-year dividends forecasts:

FY25: 32 yen (Consolidated dividend payout ratio: 35.9%) FY26: 33 yen (Consolidated dividend payout ratio: 35.4%)

Share buybacks: FY25: ¥5.0 bn

(6.4% as of end March 2026)

 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.  In FY2025, the total return ratio will be 70%, as the Company acquired ¥5 billion of its own shares, following ¥10 billion in FY2024.  In consideration of business performance, the full-year dividend for FY2026 will be increased 1 yen to 33 yen per share and the payout ratio will be 35.4%.

Cash allocation policy and progress Cash + Debt

Cash + Debt

FY2021-FY2023

Operating cash flow

FY2024-FY2026 Operating cash flow

¥80 bn

Phase II Plan

Growth investments / M&A: ¥30.0 bn or more Capital investments: Apx. ¥25.0 bn

or more

¥38.7 bn

Progress in FY2024-FY2025

Shareholder returns: ¥28.0 bn or more

Cash

Debt ¥26.0 bn Operating cash flow ¥36.3 bn

(Ref.) R&D investment: Apx. ¥23.5 bn

Fundraising policy Necessary cash and deposits

Plan in FY2026

Growth investments ¥24.6 bn

Exploring areas which have synergies with existing businesses

Capital investments ¥17.3 bn

¥6.0 bn

Shareholder

¥5.3 bn

returns

¥25.3 bn ¥14.2 bn

¥7.7 bn

• Using its own funds as the Group’s main source of working capital and capital expenditure. • Considering borrowing as an effective means of raising funds, when fundraising becomes necessary, such as for M&A and new businesses and optimizing the weighted average cost of capital, which also takes into account the cost of debt. • The level of cash and deposits on hand necessary for stable operations is approx. three months of monthly sales. © Copyright NIHON KOHDEN CORPORATION All Rights Reserved

 The cash allocation policy and its progress are shown above.  We make investments for future business expansion and enhance shareholder returns by utilizing cash and borrowings.  For growth investments and M&A, we consolidated Ad-Tech in the U.S. and DOWELL in Japan as subsidiaries. We continue to explore opportunities in areas which have synergies with our existing businesses.  In terms of capital investments, we have established the Tsurugashima Production Center and introduced PLM/MES systems. We also plan to introduce a new CRM system in Japan.  We expect that shareholder returns will exceed ¥30 billion over three years.

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.

 The global business environment is changing rapidly and there are some impacts on our business from unforeseen external factors. However, we believe that the transformation toward realizing our Long-term Vision is steadily progressing and that growth momentum is increasing.  To respond to recent changes, we will reinforce our organizational structure and capabilities, leading to make a leap forward in the next Medium-term Business Plan.

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Nihon Kohden Corporation (NHNKF) Q4 2026 Earnings Call Transcript

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