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.

[Summary] Consolidated Financial Results for the 1st Quarter of the Fiscal Year Ending March 31, 2023 (Japan GAAP)

Prime Market, Tokyo Stock Exchange

Hirokazu Ogino, Representative Director, President

Fumio Izumida, Operating Officer, General Manager, Corporate Strategy Division

(URL https://www.nihonkohden.co.jp)

(Amounts are rounded down to the nearest million yen)

1. Consolidated Financial Highlights for the 1st Quarter of FY2022 (From April 1, 2022 to June 30, 2022)

Note: Percentages indicate increase/decrease over the corresponding period in the previous fiscal year.

FY2022 1Q: 5,124 million yen (-5.8%)

Note: Revise of dividends forecast: None

Note: Breakdown of year-end dividends for FY2021:

3. Consolidated forecast for FY2022 (From April 1, 2022 to March 31, 2023)

Note: Revise of consolidated forecast: None

(2) Changes in accounting policies, changes in accounting estimates, and restatement

(i) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes

(ii) Changes in accounting policies due to other reasons: None

(iii) Changes in accounting estimates: None

(3) Number of issued shares (common shares)

(i) Total number of issued shares at the end of the period

(ii) Number of treasury shares at the end of the period

(iii) Average number of shares outstanding during the period

* This summary of financial result is not subject to audit procedures.

* In domestic sales of the Nihon Kohden group, sales to public medical institutions (which include national hospitals, national universities, public agencies, and municipal hospitals) account for a relatively high percentage of total sales. Therefore, the bulk of orders tend to be concentrated in September and March due to these hospitals' budget executions. In particular, sales and income are highly concentrated in the fourth quarter of the fiscal year.

* Earnings forecasts and other forward-looking statements in this release are based on information currently available and certain assumptions that the Company believes are reasonable. Therefore, they do not constitute a guarantee that they will be realized. Actual results may differ from such estimates due to unforeseen circumstances.

During the term under review (April 1, 2022 to June 30, 2022), social and economic activity showed signs of recovery due to the benefits of economic measures and infection control measures taken by each country. However, the global economic outlook remained uncertain due to the Ukraine crisis and the Shanghai lockdown, in addition to the continued shortage of semiconductors, higher prices of components and resources, and supply chain disruption. In Japan, healthcare systems to respond to emerging infectious diseases were being established and work style reforms for medical staff were also promoted according to the medical treatment fee revision in April 2022. Medical equipment companies were strongly required to provide solutions which contribute to infection control measures as well as improving the quality and efficiency of medical care. Internationally, there were concerns about an economic slowdown due to tight monetary policy in the U.S. and Europe. However, overall demand for medical equipment which contributes to improving the quality and efficiency of medical care was steady.

Under these circumstances, Nihon Kohden implemented its three-year business plan, BEACON 2030 Phase I. The Company formulated the basic policies of the plan as follows: i) Embracing sustainability across business and corporate activities,

Japan: Nihon Kohden concentrated on enhancing sales activities which match each market; the acute care hospital market, the small and mid-sized hospital market, and the clinic market. The Company also focused on consumables and services business as well as strengthening its marketing and service capabilities, creating customer value which contributed to improving medical safety, patient outcomes, and operating efficiency. Demand for Physiological Measuring Equipment, hematology instruments, and IT system solutions was favorable as the number of testing and surgical procedures showed a recovery trend and capital expenditure by medical institutions resumed. Overall, domestic sales decreased, as there was a reactionary decline in demand mainly for Patient Monitors which were installed to treat COVID-19 patients in the same period of the previous fiscal year. Sales in the university hospital and clinic markets increased favorably, while sales in the public hospital and private hospital markets decreased compared to the strong performance in the same period of the previous fiscal year. Sales of AEDs in the PAD market also decreased. Sales of Physiological Measuring Equipment achieved double-digit growth. Sales of Other Medical Equipment also increased favorably, as sales of hematology instruments and installation and maintenance services for medical devices showed strong growth. Sales of Patient Monitors and Treatment Equipment decreased compared to the strong growth in the same period of the previous fiscal year. As a result, domestic sales decreased 1.3% over the first quarter of FY2021 to ¥28,971 million.

International: Sales in all regions decreased, mainly due to a reactionary decline in sales of Patient Monitors. In the same period of the previous fiscal year, sales of Patient Monitors were favorable due to large orders in the U.S. and strong demand in some regions where the spread of COVID-19 had resurged. In the Americas, sales in the U.S. decreased. Sales in Latin America also decreased, mainly in Brazil and Peru where sales doubled in the same period of the previous fiscal year. Sales in Europe decreased, especially in France and Turkey, while sales in Germany and the U.K. increased favorably. Sales in Asia & Other decreased, especially in China, while sales in Korea and Indonesia showed strong growth. Sales of Patient Monitors, Physiological Measuring Equipment, and Treatment Equipment decreased, while sales of Other Medical Equipment increased. As a result, international sales decreased 13.6% over the first quarter of FY2021 to ¥15,391 million.

As a result, overall sales during the term under review decreased 6.0% over the first quarter of FY2021 to ¥44,363 million. Operating income decreased 71.7% over the first quarter of FY2021 to ¥1,817 million due to the decrease in sales. This was also because of a lower gross profit margin due to an unfavorable product mix, and increased SG&A expenses, mainly due to the strengthening of human resources and the normalization of sales and service activities. Ordinary income decreased 18.7% to ¥5,481 million and income attributable to owners of parent decreased 18.9% to ¥3,679 million over the first quarter of FY2021, reflecting foreign exchange gains.

5. Consolidated Sales Results by Product Category

The first quarter performance was better than the Company's forecast because foreign exchange gains were recorded as non- operating income. As future exchange rate fluctuations are uncertain, the Company reaffirms its forecast for the first half of FY2022 and FY2022, previously announced on May 13, 2022. The assumed exchange rates from the second quarter of FY2022 also remain 117 yen to the U.S. dollar and 130 yen to the euro.

The earnings forecasts are based on information currently available and certain assumptions that the Company believes are reasonable. The operating results and financial position of the Nihon Kohden Group could be potentially affected by uncertainties such as product supply issues due to the shortage of semiconductors, and increases in component prices, utility costs and logistics costs. The Company will immediately announce further revisions to its forecasts if necessary.

Notes and accounts receivable - trade

Other investments and other assets

Total investments and other assets

Notes and accounts payable - trade

Valuation difference on available-for-sale securities

Remeasurements of defined benefit plans

Total accumulated other comprehensive income

Total liabilities and net assets

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Nihon Kohden Corporation published this content on 03 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2022 06:31:13 UTC.