COMPANY RESEARCH AND ANALYSIS REPORT

Nagaileben Co., Ltd.
7447
Tokyo Stock Exchange Prime Market

23-May-2022
FISCO Ltd. Analyst

Noboru Terashima

FISCO Ltd.
https://www.fisco.co.jp

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. FY8/22 1H results........................................................................................................................................

01

2. FY8/22 forecasts. . .................................. ......................................................................................................

01

3. Mid-term management plan. . .......................................................................................................................

02■Company profile---------------------------------------------------------------------------------------------------------------------------------------------------------- 03■Business overview---------------------------------------------------------------------------------------------------------------------------------------------------- 04
1. Sales breakdown.........................................................................................................................................

04

2. Sales channels and production status... ......................................................................................................

06

3. Characteristics and strengths......................................................................................................................

06

4. Company policy (initiatives for CSR)............................................................................................................

07■Results trends--------------------------------------------------------------------------------------------------------------------------------------------------------------- 09
1. Summary of FY8/22 1H consolidated results. ..............................................................................................

09

2. Financial position.........................................................................................................................................

11

3. Cash flow situation.. ............................... ......................................................................................................

12■Business outlook-------------------------------------------------------------------------------------------------------------------------------------------------------- 13● FY8/22 consolidated earnings outlook........................................................................................................

13■Medium- to long-term growth strategy------------------------------------------------------------------------------------------------ 16
1. Mid-term management plan. . .......................................................................................................................

16

2. Future business strategies..................... ......................................................................................................

16■Shareholder return policy---------------------------------------------------------------------------------------------------------------------------------- 19

We encourage readers to review our complete legal statement on “Disclaimer” page.

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/█ Summary
FY8/22 1H results were in line with expectations despite lower
profits due to elimination of special demand for MHLW products.
In the mid-term management plan, is targeting operating profit of¥5.4bn in FY8/24
1. FY8/22 1H results
Nagaileben Co., Ltd. <7447> (hereafter, also “the Company”) is the leading manufacturer in Japan of medical gowns,
which is one of its core markets*1, with a domestic market share of over 60%, and it has both a high profit margin
and a sound financial condition. In the FY8/22 1H consolidated results, net sales decreased 3.1% year on year (YoY)
to ¥7,817mn, operating profit decreased 10.5% to ¥2,035mn, recurring profit decreased 10.3% to ¥2,084mn andnet profit attributable to the owners of the parent company decreased 10.1% to ¥1,433mn*2. Net sales decreased
due to the elimination of special demand for the Ministry of Health, Labour and Welfare (MHLW) products (infection
prevention products) in FY8/21 1H and the adoption of the Accounting Standard for Revenue Recognition and otherrelevant standards from FY8/22. However, net sales increased 1.2% YoY on an actual basis, after excluding these
special factors. In terms of profits, although operating profit decreased YoY due to the effect of exchange rates(weakening of the yen) and the rise in domestic processing fees and logistics costs (use of air transport), we feel
this is not cause for concern given that the downturn was in line with expectations.
*1	In the new categories introduced from FY8/21, among its domestic markets, the core markets are those markets in which
the Company has comparatively high shares. They correspond to healthcare wear, doctors’ wear, utility wear, shoes andother products, and infection prevention products. There are three markets in the new categories: the core markets, theperipheral markets (patient wear and surgery wear) and the overseas markets.
*2	E ffective from FY8/22, the Company applies the Accounting Standard for Revenue Recognition and other relevant
standards. In addition, year-on-year comparisons have been calculated on the basis of figures prior to adoption of theaccounting standard given that its application has a negligible effect on earnings results.

2. FY8/22 forecasts
For the FY8/22 consolidated results*, the Company is holding to its initial forecasts given that its 1H results werelargely as expected. It accordingly forecasts net sales to increase 0.8% YoY to ¥17,700mn, operating profit todecrease 3.8% to ¥5,013mn, and recurring profit to decline 4.1% to ¥5,090mn. However, due to an extraordinary
profit (¥300mn) expected to be recorded in 2H from the sale of some strategic shareholdings, the Company has
upwardly revised its net profit attributable to the owners of the parent company to ¥3,700mn (a 1.5% increase YoY)
from its initial forecast of ¥3,500mn. Despite efforts to expand sales of mainstay products, net sales are forecast
to increase only slightly due to the elimination of MHLW products (infection prevention products) (¥315mn) andapplication of the Accounting Standard for Revenue Recognition and other relevant standards (forecast to decrease
net sales by ¥20mn). Meanwhile, operating profit is forecast to decrease due to the effect of exchange rates (weakening of the yen) and the rise in domestic processing fees and logistics costs. With regard to the reviewed market
categories introduced by the Tokyo Stock Exchange (TSE), the Company shifted its listing to the Prime Market.
*	The earnings results forecasts have been calculated subsequent to application of the Accounting Standard for Revenue
Recognition and other relevant standards adopted by the Company in FY8/22. As the impact on business performanceis forecast to be negligible, the YoY comparison is based on figures before application of the accounting standard.

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01 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/

Summary

3. Mid-term management plan
In conjunction with its FY8/21 financial results announcement, the Company released its mid-term management plan
extending through the plan’s final year of FY8/24. The plan’s numerical targets are net sales of ¥18.5bn and operating
profit of ¥5.4bn in FY8/24. On the other hand, there has been no change to its approach for returning profits toshareholders and for FY8/21, it paid an annual dividend of ¥60, and plans to pay the same amount for FY8/22. The
Company proactively engages in share buybacks and in April 2022 acquired 480,000 treasury shares (¥976mn)
with the objective of enhancing capital efficiency and to respond to the changing management environment. The
Company’s consistent return to shareholders in this manner is worthy of recognition.
Key Points
In FY8/22 1H, operating profit is forecast to decrease, but this is in line with expectations. Mainstay items to be
steady• In FY8/22, operating profit is forecast to decrease 3.8% YoY, unchanged from the initial forecast, but theforecast for net profit attributable to the owners of the parent company has been upwardly revised to anincrease of 1.5% YoY due to the recording of extraordinary profit• In the mid-term management plan, is targeting operating profit of ¥5.4bn in FY8/24. Is also actively returning
profits to shareholders•

Trends in net sales and operating profit (consolidated)
Net sales (left)(¥mn)
20,0005,242

Operating profit (right)

5,264

4,937

4,918

5,212

(¥mn)
6,000

5,013

15,0004,500

10,0003,000

17,017

17,144

16,785

17,066

17,563

17,700

5,000

1,500

0

0
FY8/17

FY8/18FY8/19FY8/20FY8/21

FY8/22 (E)Note: The earnings results forecasts have been calculated subsequent to application of the Accounting Standard for Revenue
Recognition and other relevant standards adopted by the Company in FY8/22
Source: Prepared by FISCO from the Company's financial results

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02 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/█ Company profile
In its core markets, is the leading manufacturer of medical gowns
with a domestic market share of over 60%
The Company is a specialist manufacturer of medical gowns for nurses, doctors, patients and others. Establishedin 1915 as Nagai Shoten, the Company has a rich history. Since then, the Company says it has now expanded
its operations nationally to become a leading domestic manufacturer that boasts an annual supply of more than 6
million medical gowns a year and a market share of over 60% in one of its core markets of medical gowns for nurses.
History
1915

Mitsuji Nagai started Nagai Shoten, a privately owned business specializing in medical gowns, in Kanda-Jinbocho, Chiyoda-ku, Tokyo.

1941

Ended private business, established Tokyo Eisei Hakui Co. Ltd. together with seven stores in the same industry

1950

Liquidated Tokyo Eisei Hakui Co., Ltd. Mitsuji Nagai and Tatsuro Sawanobori jointly established Nagai Shoten Co., Ltd.

1969

Established a subsidiary, NAGAI UNIFORM INDUSTRY co., Ltd., in Akita Prefecture to expand the medical gowns manufacturing
division. Tatsuro Sawanobori was appointed President. Shifted focus of manufacturing and sales business specialization frommultipurpose white gowns to medical gowns.

1977

Built second product center in Kameido, Koto-ku, Tokyo. Established a partnership with a US company, G.D. Searle & Company, andestablished Japan Surgical Apparel Co., Ltd. in Hiroshima City to expand sales of new surgical apparel products for hospitals.
Established technology partnerships with Angelica Corp (US) and Toray Industries, Inc. <3402>. Developed and released medical
gowns made with a new fabric for leasing.

1979

Changed name to Nagai Co., Ltd.

1980

Opened a sales office in Takamatsu, Kagawa Prefecture. Concluded a license agreement with designer Kansai Yamamoto.

1982

Concluded a license agreement with designer Yukiko Hanai.

1988

Established Emit Co., Ltd. as a spin-off from Nagai Co., Ltd. Thereafter, the two companies exchanged their names, with Emit Co., Ltd.
becoming a group management company, and Nagai Co., Ltd. becoming a group headquarters for sales.

1989

Newly built Nagai Luminous, a manufacturing plant for high-grade products, in Akita Prefecture. Started overseas production toward
the global division of labor.

1994

Changed name from Nagai Co., Ltd. to Nagaileben Co., Ltd. Built a new logistics center in Akita Prefecture.

1995

Started over-the-counter trading of the Company’s stock. Started development and sales of a second pillar product to respond to theaging of society. Vice President Ichiro Sawanobori appointed President.

1996

Concluded a license agreement with French designer Andre Courreges.

1999

Opened a sales office in Nagoya, Aichi Prefecture. Concluded a license agreement with designer Atsuro Tayama.

2001

Listed on the Second Section of the Tokyo Stock Exchange.

2002

Established a technology partnership with Standard Textile Company, Inc. (US) and Toray Industries, Inc. for surgical textiles. Raised thestatus of the Nagoya sales office to a branch.

2004

Acquired ISO 9001 certification. Listed on the First Section of the Tokyo Stock Exchange. Absorbed Hokkaido Nagai Co., Ltd. andestablished the Hokkaido branch.

2005

Acquired ISO 14001 certification. Concluded a license agreement with designer Keita Maruyama.

2006

Concluded a brand agreement with designer Minako Yokomori.

2014

Relocated to a new head office building in Kajicho, Chiyoda-ku, Tokyo.

2015

Held a ceremony to commemorate its 100th anniversary.

2016

Transitioned to a company with an Audit & Supervisory Committee.

2017Concluded a joint development agreement with Shiseido Company, Ltd. <4911>.

2018

Constructed a new sewing center in Daisen City, Akita Prefecture.

2020

Delivered 600,000 articles of PPE garments from protection from COVID-19.

2022

Shifted listing to the Tokyo Stock Exchange Prime Market

Source: Prepared by FISCO from the Company's website and securities report

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03 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/█ Business overview
Focusing on expanding sales of highly functional, high-value-added
products
1. Sales breakdown
All of the Company’s products are medical gowns and related products. The sales composition by item for FY8/22
1H is 53.6% from healthcare wear, 14.3% from doctors’ wear, 1.9% from utility wear, 1.8% from shoes and otherproducts, 0.0% from infection prevention products*, 17.8% from patient wear, 9.1% from surgery wear, and 1.6%
from overseas markets.
*	The Company added the new category of “infection prevention products” from FY8/20.

Healthcare wear mainly refers to products for nurses, and utility wear covers aprons, cardigans, and other garments
worn on top of medical gowns and such. While profitability does not vary much among the various items, shoes andother purchased products have relatively low margins. Also, infection prevention products, which were separated into
a new segment from FY8/20, are mainly MHLW products, so their profit margin is slightly lower than the average.

Net sales composition by item (FY8/22 1H)
1.8%

0.0%
1.6%
Healthcare wear

9.1%

Doctors’ wear
Utility wear
Patient wear
17.8%

Surgery wear
Shoes and other products
53.6%

Infection prevention products
Overseas

1.9%
14.3%

Source: Prepared by FISCO from the Company's results briefing materialsAlso, in the new categories introduced from FY8/21, the markets are divided into three categories: the core markets
where the Company has comparatively high market shares domestically (healthcare wear, doctors’ wear, utility wear,
shoes and other products, and infection prevention products), the peripheral markets where there is plenty of room
to grow in the future (patient wear and surgery wear), and the overseas markets. Regarding the composition of total
net sales in FY8/22 1H, the core markets provided 71.5%, the peripheral markets 26.9%, and the overseas markets
1.6%. Net sales were previously disclosed by region, but following the establishment of the new categories, they
will no longer be disclosed by region.

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04 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/

Business overview

Net sales composition by market (FY8/22 1H)
Overseas markets 1.6%

Peripheral markets
26.9%Core markets
71.5%

Source: Prepared by FISCO from the Company's results
 briefing materials
The composition of total net sales by product (function) for FY8/22 1H is 7.0% from high-end products, 57.9% fromhigh-value-added products, 31.1% from value-added products, 4.0% from mass products and 0.0% from MHLW
products. On looking at the approximate price-band classifications in nurse wear, mass products are ¥5,000 or
less, value-added products are ¥5,000 to ¥7,500, high-value-added products are ¥7,500 to ¥10,000, and high-end
products are ¥10,000 or more. The tendency is for higher prices to achieve greater profit margins, so the Company
is focusing on expanding sales of high-end products and high-value-added products.

Net sales composition by product (FY8/22 1H)
0.0%
4.0%

7.0%

High-end products
High-value-added products

31.1%

Value-added products

Mass products
MHLW products

57.9%

Source: Prepared by FISCO from the Company's results briefing materials

We encourage readers to review our complete legal statement on “Disclaimer” page.

05 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/

Business overview

2. Sales channels and production status
The Company’s end users include nurses and doctors, with the purchasers of the products mainly being medical
facilities such as hospitals, nursing care facilities, and other such facilities. However, the Company does not conduct
direct sales, with 100% of sales being agency sales via wholesalers that sell to these medical and other facilities. As
a result, sales expenses are kept down, but the Company is still able to understand customers’ needs as the sales
staff is constantly in contact with large hospitals and other facilities.
In the past, medical gowns were laundered in-house by the hospitals themselves in most cases, but in recent years,
they have been switching to leasing alongside the spread in laundry outsourcing. The lease term is typically four
years. Because this generates lease renewal demand every four years, it seems to stably support the Company’s
earnings. However, the lease renewal cycle does not necessarily occur in the same time period as the previous
time and there are cases of it being slightly before or after, so sometimes a slight shifting occurs for the net sales(YoY) for each quarter.
Looking at the Company’s production structure, based on FY8/21 results (non-consolidated), internal production
and at partner plants constitute an aggregate of 98.8% (48.1% domestically and 50.7% overseas), with purchased
products accounting for 1.2%. Overseas production takes place in Indonesia, Vietnam, and China, but the Company
owns no plants and the goods are produced at the plants of its local partners, which mitigates investment risk andreduces costs.
3. Characteristics and strengths
The Company is a specialized manufacturer of medical gowns, and one of its strengths is that it has in place anintegrated system to undertake every aspect of this business, from planning through to raw material procurement,
manufacturing, and sales. In its product planning, it can accurately understand customer needs and reflect themin its products. Specifically, the Company sells products that are easy to work in (easy to move around) while
incorporating antistatic, antibacterial (restricting the spread of bacteria), and other functions, as well as featuring
excellent designs, and they have earned excellent reputations among their users. At the same time, it deals directlywith major synthetics manufacturers and textiles traders, including Toray Industries, Inc. <3402>, with which it is
jointly developing materials, so it is able to secure optimal materials and produce at low costs while selling them atappropriate margins.
Furthermore, in addition to its large number of affiliated plants, the Company has the necessary financial resources
to be able to constantly maintain product item inventories that extend into the thousands of varieties and respond toneeds for made-to-order products. It has established a quick response (QR) system of rapid production and sales
that delivers the desired product on a specified day in response to a broad range of users. This has also helped inearning the strong trust of its customers. On the sales side, the Company has a network of close to 1,000 agentsnationwide, and while its sales capabilities are robust, the Company itself keeps sales expenses as low as possible.
As a result, the Company’s share in one of its core markets of medical gowns, the domestic market for medical gowns exceeds 60%, and it maintains a firm position as the leading medical gown manufacturer in Japan.
Additionally, it is maintaining high profitability with a gross profit margin of 45.9% (actual results for FY8/21). The factthat it is both highly profitable and has a high market share demonstrates that most of its customers are satisfied
with its products and services, which is the Company’s greatest strength.

We encourage readers to review our complete legal statement on “Disclaimer” page.

06 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/

Business overview

By concentrating its business resources in the niche market of medical gowns, the Company can efficiently manage
every aspect of its business, from planning through to manufacturing and sales. Although it is a niche market, there
remains room for further development, as the Company has relatively low shares of the peripheral markets for patient
wear, surgery wear, and other items. The Company has explicitly stated that the medical gown business could growfor some time and that it will take active steps to develop the peripheral markets.
4. Company policy (initiatives for CSR)
The Company commemorated its centennial in 2015 by cultivating “Nagaism,” the company spirit, which is focusedon realizing interpersonal harmony, generating profits, and contributing to society. It has undertaken the following
specific initiatives for CSR.
“We want to become the power of life” at the core of initiatives(1) Expanding women’s roles: Supporting industries led by women
Many of the Company’s products are for women working on the front lines at hospitals and nursing care facilities,
and its production facilities have many women involved in sewing work. The Company’s business operations create
many opportunities to expand the roles of women from a variety of life stages, which connects to supporting
working women.
(2) Contributing to communitiesa) Lending of historical gowns
Together with the changes to gowns, the Company lends gowns free of charge, such as to the events of medical
facilities, with the objective of understanding the history of nurses.
b) Contributing to communities through production sites
The Company is creating employment and contributing to regional economies through its production operations
in Akita Prefecture in Japan, and in China, Indonesia, Vietnam, and elsewhere overseas.
c) Medical kids projectThis project started from the idea of deepening interaction between hospitals and local communities and enablingchildren to attend hospitals or undergo hospitalization with ease of mind. Child-sized medical gowns resembling
those worn by doctors and nurses are lent to hospitals and people dressed as characters make hospital visits.
(3) Contributing to customersa) Opened the ITONA gallery, an oasis for nurses
The ITONA gallery, Japan’s first communication space for nurses, was opened in 2015 to celebrate the Company’s
100th anniversary and as a gesture of gratitude to nurses, the Company’s main end users.
b) Beauty courses for nurses
With the cooperation of Shiseido Japan Co., Ltd., the Company is providing practical courses, including learning
about make-up and personal behavior that are suitable for nurses in the medical industry.
c) Remake of student nurses’ uniforms
The Company has deconstructed the training uniforms of student nurses at Okayama University and remade theminto pochettes, so that they can use them even after starting work at medical facilities.

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07 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/

Business overview

Social responsibility initiatives(4) Environmenta) Reducing environmental burden through business
Many of the Company’s products use materials derived from depletable resources and it believes that by planning,
manufacturing and selling products that can be use repeatedly and for a long time is effective use of limited
resources, which will lead to reducing environmental burden. Specifically, the Company acquired ISO 14001
certification in 2005, and carries out initiatives such as using cutting wastage from raw materials for roofing
processing and other purposes. The Company has also developed and sells COMPELPACK, a reusable infection
prevention product for use on surgical front lines. By providing wear that can be repeatedly washed and sterilized,
converting it to reusable products instead of being disposable, it is contributing to the reduction of medical waste.
Other initiatives include introducing hybrid vehicles for use as sales vehicles and installing solar power generating
panels on the headquarters building.
b) Response to climate change problems
The Company plans mitigation and adaption initiatives for climate change problems, identification of opportunities
and risks, etc., and implementation of a decision-making process toward scenario analysis as a climate change
disclosure in accordance with the TCFD (Task Force on Climate-related Financial Disclosure).
(5) Social contributiona) Donations of new infection prevention products to medical entities and others
In the fight against COVID-19, the Company donated 40,000 reusable masks and 10,000 reusable isolation
gowns. It is also continuously conveying messages of support to medical personnel and the Company regularly
publishes a poetry collection for nurses, which are given free of charge to hospitals and nurses.
b) Promotion of the employment of persons with disabilities
Subsidiary nagai uniform industry Co., Ltd. was awarded by the Minister of Health, Labour and Welfare in
September 2016 after being selected as an excellent business that contributes to the active employment andpromotion of persons with disabilities.
c) Disaster support activities
The Company has provided monetary donations, medical gowns, masks, wheelchairs and other items through theJapanese Nursing Association and the Japanese Red Cross Society following the outbreak of SARS and natural
disasters including the Indonesian earthquake, the Great Hanshin Earthquake, the Great East Japan Earthquake,
the Kumamoto earthquakes, and the COVID-19 pandemic.
d) Published in Future Class
The Company’s initiatives are introduced in Future Class, which is a teaching material used in classes on SDGs
(Sustainable Development Goals) that is distributed to elementary and junior high schools nationwide.
e) Other assistance
The Company supports the United Nations’ World Food Programme (WFP), an entity that provides food assistance.
Additionally, it supports the Minamisanriku Reconstruction Sakura Tree Planting effort and is cooperating withvolunteers from Minamisanriku Town (Miyagi Prefecture), an area affected by the Great East Japan Earthquake,on the “Forest of Life with a View of the Ocean” initiative to plant sakura (cherry blossom) trees at the locationthat tsunami waters reached. Representative Director and President Ichiro Sawanobori is serving as the Industrial
Ambassador for Misato Town (Akita Prefecture).

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08 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/█ Results trends
In FY8/22 1H, operating profit is forecast to decrease, but this is inline with expectations. Mainstay items to be steady
1. Summary of FY8/22 1H consolidated results
In FY8/22 1H consolidated results, net sales declined 3.1% YoY to ¥7,817mn, operating profit decreased 10.5% to¥2,035mn, recurring profit decreased 10.3% to ¥2,084mn, and net profit attributable to the owners of the parent
company decreased 10.1% to ¥1,433mn.
In the corresponding period of the previous fiscal year, the Company significantly increased sales by 14.4% dueto the delivery of products delayed by COVID-19, capture of new large projects and special demand for MHLW
products (infection prevention products). In addition, as the Company has applied the Accounting Standard for
Revenue Recognition and other relevant standards from FY8/22, it caused a decrease in sales of ¥26mn for FY
8/22 1H. As a result, sales decreased YoY, but if the aforementioned factors are excluded, sales increased 1.2% inreal terms. In terms of profit and loss, operating profit decreased due to the effect of exchange rates (weakening of
the yen) and the rise in domestic processing fees and logistics costs (use of air transport), we feel this is not cause
for concern given that the downturn was in line with expectations.
Summary of FY8/22 1H consolidated results(¥mn)
FY8/21 1H
ResultFY8/22 1H% of total

ResultChange% of total

AmountPercentage

Net sales

8,069

100.0%

7,817

100.0%

-252

-3.1%

Gross profit

3,718

46.1%

3,491

44.7%

-226

-6.1%

SG&A expenses

1,442

17.9%

1,456

18.7%

13

0.9%

Operating profit

2,275

28.2%

2,035

26.0%

-239

-10.5%

Recurring profit

2,322

28.8%

2,084

26.7%

-238

-10.3%Net profit attributable to theowners of the parent company

1,595

19.8%

1,433

18.3%

-161

-10.1%

Note: F igures presented for FY8/22 1H have been calculated subsequent to application of the Accounting Standard for Revenue Recognition andother relevant standards adopted by the Company in FY8/22. Moreover, comparative information has been calculated using numerical values
prior to application of such accounting standards when it comes to respective figures for the same period of the previous fiscal year as well as
increases and decreases
Source: Prepared by FISCO from the Company's financial results and results briefing materials

In the market environment, medical frontline operations that have not fully recovered yet have regained calm after
having emerged from a period of disruption. Furthermore, with the authorities having increased medical fees by
0.43% and decreased drug prices by 1.35% per their revision of medical fees effective from April 2022, yet are
unlikely to substantially affect orders of the Company’s products.
Regarding net sales, projects scheduled for renewal and new projects have been ensured in the mainstay coremarkets. Focus has been placed on expanding sales of strongly performing patient wear in peripheral markets, andan acquisition of large-scale projects in Taiwan, etc. in overseas markets. As a result, although there was a decreasein sales YoY, results were 1.3% higher than forecast.

We encourage readers to review our complete legal statement on “Disclaimer” page.

09 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/

Results trends

In profits, the gross profit margin decreased 1.4pp YoY to 44.7%, and gross profit decreased 6.1% to ¥3,491mn.
The YoY downturn in the gross profit was due to factors amounting to ¥116mn in sales and ¥110mn in production.
Further analyzing the changes in production factors shows that the impact of exchange rates caused a decrease of¥72mn (¥104.6 to US$1 in FY8/21 1H→¥111.2 to US$1 in FY8/22 1H), the effect of rising processing fees caused
a decrease of ¥20mn, the influence of increased overseas logistics costs (cost of sales) due to using air mail totransport some materials, etc., in response to a customer request amid a time when logistics is disrupted globally,
which led to a decrease of ¥35mn, and an increase of ¥14mn due to the effect of increasing the ratio of overseas
production (49.6% in FY8/21 1H→¥111.2 to 49.8% in FY8/22 1H).
On the other hand, SG&A expenses were 3.4% below forecasts due to a reduction in other expenses and unusedplanned expenses despite an increase in travel and transportation costs. As a result, operating profit decreased
10.5% YoY to ¥2,035mn, but was 4.4% higher than forecast. Furthermore, capital investments were ¥63mn (¥8mn inbuilding-related investments, ¥14mn in IT equipment, ¥25mn in logistics facilities and ¥14mn in production facilities)
and depreciation costs were ¥142mn.
(1) Net sales forecasts by item
In net sales by item, healthcare wear decreased 0.4% YoY to ¥4,186mn, doctors’ wear increased 0.5% to¥1,114mn, utility wear decreased 15.5% to ¥151mn, shoes and other products decreased 8.1% to ¥137mn,
infection prevention products decreased 99.6% to less than ¥1mn, patient wear increased 14.1% to ¥1,389mn,
surgery wear decreased 8.1% to ¥711mn, and overseas markets increased 60.9% to ¥124mn.
Net sales by item(¥mn)
FY8/21 1H
ResultFY8/22 1H
YoY

ResultYoY

Healthcare wear

4,201

7.8%

4,186

Doctors’ wear

1,109

5.7%

1,114

0.5%

Utility wear

179

12.6%

151

-15.5%

Shoes and other products

149

3.0%

137

-8.1%

Infection prevention products

359

-

1

-99.6%

Patient wear

1,218

24.2%

1,389

14.1%

Surgery wear

773

8.8%

711

-8.1%

Overseas markets

77-27.8%

124

60.9%

8,069

14.4%

7,817

-3.1%

Total

-0.4%

Source: Prepared by FISCO from the Company's results briefing materials(2) Net sales by market
In net sales by market, the core markets decreased 6.8% YoY to ¥5,591mn, the peripheral markets increased
5.5% to ¥2,101mn, and the overseas markets increased 60.9% to ¥124mn.
Net sales by market(¥mn)
FY8/21 1H
ResultFY8/22 1H
YoY

ResultYoYCore markets

6,000

14.2%

5,591

Peripheral markets

1,991

17.8%

2,101

5.5%

Overseas markets

77-27.8%

124

60.9%

8,069

14.4%

7,817

-3.1%

Total

-6.8%

Source: Prepared by FISCO from the Company's results briefing materials

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10 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/

Results trends(3) Net sales by productIn sales by product, the Company forecasts are sales of ¥543mn of high-end products (up 5.8% YoY), ¥4,528mn
of high-value-added products (up 10.5%), ¥2,430mn of value-added products (down 13.2%), ¥314mn of mass
products (down 8.8%), and ¥0mn of MHLW (Japan) (down 100%).
Net sales by product(¥mn)
FY8/21 1H
ResultFY8/22 1H
YoY

Result

YoY

513

4.1%

543

5.8%

High-value-added products

4,097

7.3%

4,528

10.5%

Value-added products-13.2%

High-end products

2,798

16.2%

2,430

Mass products

345

3.8%

314

-8.8%

MHLW products

315

-

0

-100.0%

8,069

14.4%

7,817

-3.1%

Total

Source: Prepared by FISCO from the Company's results briefing materials

Financial position remains sound given a high level of cash anddeposits on hand at ¥25.8bn, and an equity ratio of 90.8%
2. Financial position
The Company's financial position remains stable. At the end of FY8/22 1H, total assets had decreased by ¥899mn
to ¥45,529mn compared to the end of the previous fiscal year. Current assets decreased by ¥706mn to ¥36,616mn,
mainly due to a decrease in cash and deposits of ¥2,060mn, a decrease in notes and accounts receivable including
electronically recorded claims of ¥488mn, and an increase in inventories of ¥725mn. The increase in inventories
is a positive factor due to the intentional buildup of inventories for Q3, the busy season. Meanwhile, fixed assets
decreased by ¥193mn to ¥8,912mn, mainly due to a decrease in tangible fixed assets of ¥112mn from depreciation
and a decrease in investments and other assets of ¥84mn.
Total liabilities were ¥4,178mn, down ¥220mn compared to the end of the previous fiscal year. This was largely
attributable to an increase of ¥267mn in notes and accounts payable and a decrease of ¥239mn in income taxes
payable. Net assets decreased ¥678mn to ¥41,351mn, mainly due to a ¥577mn decrease in retained earnings as aresult of the Company having paid out dividends. As a result, the equity ratio was 90.8% at the end of FY8/22 1H,
up 0.3pp compared to the end of the previous fiscal year.

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11 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/

Results trends

Summary of the consolidated balance sheet(¥mn)
End of FY8/21

End of
FY8/22 1H

ChangeCash and deposits

27,87925,818-2,060Notes and accounts receivable(including electronically recorded claims)

4,775

5,263

488

Inventories

4,615

5,340

725

Current assets

37,322

36,616-706

Tangible fixed assets

7,489

7,377

-112

Intangible fixed assets

43

47

3

1,572

1,488

-84

Investments and other assets
Fixed assets

9,106

8,912

-193

Total assets

46,42845,529

-899

1,290

1,558

267

945

705

-239

Notes and accounts payable
Income taxes payable

4,399

4,178

-220

Retained earnings

43,276

42,698-577

Treasury shares-5,913-5,9058

Net assets

42,02941,351-678

Total liabilities and net assets

46,42845,529-899

Total liabilities

Source: Prepared by FISCO from the Company's financial results

3. Cash flow situation
In FY8/22 1H, net cash used in operating activities was ¥56mn. The main increase factors were the recording of
profit before income taxes of ¥2,077mn, depreciation of ¥142mn and an increase in trade payable of ¥267mn,
while the main decrease factors were payments of income taxes paid of ¥911mn, increases in trade receivable of¥696mn and increase of inventory assets of ¥725mn. Net cash provided by investing activities was ¥2,462mn. The
main item being proceeds from (net) surplus income from withdrawal of time deposits of ¥2,500mn. Net cash usedin financing activities was ¥1,970mn, with the main item being dividends paid of ¥1,970mn. As a result, cash andcash equivalents during the period increased ¥439mn and the balance of cash and cash equivalents at the end of
the period was ¥6,118mn. The Company has no interest-bearing debt and owns treasury shares worth ¥5,905mn(5,363,117 shares), so as before, it possesses ample net cash on hand.
Summary of the cash flow statement(¥mn)
FY8/21 1H
Cash flows from operating activities
Profit before income taxes

FY8/22 1H

480

-56

2,313

2,077

Depreciation

157

142

Decrease (increase) in trade receivables

-162

-696

Decrease (increase) in inventories

-519

-725

Increase (decrease) in trade payables

-106

267

356

2,462

Cash flows from investing activities
Purchase of property, plant and equipment

-134

-48

Net decrease (increase) in time deposits

500

2,500

-1,971-1,970-1,970-1,970Cash flows from financing activities
Dividends paid

-0-0

Net increase (decrease) in cash and cash equivalents-1,126439

Cash and cash equivalents at end of period

5,320

6,118

Purchase of treasury shares of subsidiaries

Source: Prepared by FISCO from the Company's financial results

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12 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/█ Business outlook
In FY8/22, operating profit is forecast to decrease 3.8% YoY,
unchanged from the initial forecast, but the forecast for net
profit attributable to the owners of the parent company has been
upwardly revised to an increase of 1.5% YoY due to the recording ofextraordinary profit• FY8/22 consolidated earnings outlook
For the FY8/22 consolidated results, the Company is holding to its initial forecasts given that its 1H results werelargely as expected, forecasting net sales to increase 0.8% YoY to ¥17,700mn, operating profit to decrease 3.8% to¥5,013mn and recurring profit to decline 4.1% to ¥5,090mn. However, regarding net profit attributable to the ownersof the parent company, the Company has upwardly revised its forecast from the initial ¥3,500mn to ¥3,700mn(up 1.5% YoY) due to the prospect of recording extraordinary gain of ¥300mn from the sale of some strategic
shareholdings.
Despite efforts to expand sales of mainstay products, net sales are forecast to increase only slightly due to theelimination of MHLW products (infection prevention products) (¥315mn) and application of the Accounting Standard
for Revenue Recognition and other relevant standards (forecast to decrease net sales by ¥20mn). Meanwhile,
operating profit is forecast to decrease due to the expected weakening of the yen and that SG&A expenses(advertising, travel and transportation, etc.) are expected to return to pre-COVID-19 levels.
FY8/22 consolidated earnings outlook(¥mn)
FY8/21

FY8/22

ChangeResult% of total

Forecast% of total

AmountNet sales

17,563100.0%

17,700100.0%

136

Percentage
0.8%

Gross profit

8,058

45.9%

7,894

44.6%

-164

-2.0%

SG&A expenses

2,846

16.2%

2,880

16.3%

33

1.2%

Operating profit

5,212

29.7%

5,013

28.3%

-199

-3.8%

Recurring profit

5,306

30.2%

5,090

28.8%

-216

-4.1%

Net profit attributable to theowners of the parent company

3,647

20.8%

3,700

20.9%

52

1.5%

Note: T he earnings results forecasts have been calculated subsequent to application of the Accounting Standard for Revenue Recognition and otherrelevant standards adopted by the Company in FY8/22
Figures for FY8/21 are before the application of the relevant accounting standards, while YoY comparisons have been calculated on the basis of
figures prior to adoption of the relevant accounting standards.
Source: Prepared by FISCO from the Company's financial results and results briefing materials

Regarding net sales, the Company has introduced new products with new concepts into core markets, striving toenergize the market and increase share by ensuring receipt of orders for renewal projects. In peripheral markets, inaddition to patient wear, which is forecast to continue to see significant sales growth, COMPELPACK is expected topenetrate markets and increase sales in surgery wear. These increases will cover the elimination of MHLW products(infection prevention products), and the overall forecast is for record high net sales up 0.8% YoY to ¥17,700mn.

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13 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/

Business outlook

Exchange rates have been shaken by the greater than expected weakening of the yen, and forecasts are for agross profit margin of 44.6% (45.9% in the previous period) and for gross profit to decrease ¥164mn YoY, with sales
growth being an increase factor of ¥61mn and production being a decrease factor of ¥225mn. Breaking down the
production factors, gross profit is forecast to decrease ¥180mn due to the effect of exchange rates (weakening of
the yen from ¥104.3 to US$1 in FY8/21 to around ¥113 to US$1 in FY8/22, which is covered by forward contracts),
to decrease ¥50mn due to the increase in processing fees at domestic plants, and to increase ¥60mn because of
the rise in the overseas production ratio (from 50.7% FY8/21 to 51.9% in FY8/22).
The impact of COVID-19 is expected to subside and the market moved toward stabilizing. Sales activities are to acertain extent expected to return to normal, so the forecasts are for travel and transportation costs to rise ¥31mn
and SG&A expenses are forecast to increase 1.2% YoY to ¥2,880mn. As a result, operating profit is expected todecrease 3.8% YoY to ¥5,013mn. The Company is forecasting capital investment of ¥249mn and depreciation of¥285mn, which are within the normal ranges.
(1) Net sales forecasts by item and market
In net sales by item, sales of healthcare wear are forecast to increase 1.0% YoY to ¥9,660mn, doctors’ wear toincrease 1.9% to ¥2,650mn, utility wear to decrease 7.4% to ¥330mn, shoes and other products to decrease
8.7% to ¥300mn, infection prevention products to decrease 86.2% to ¥50mn, patient wear to increase 12.1% to¥2,820mn, and surgery wear to increase 2.5% to ¥1,680mn. By market, net sales are forecast to decrease 1.6%
to ¥12,990mn in the core markets, to increase 8.4% to ¥4,500mn in the peripheral markets, and to increase 3.4%
to ¥210mn in the overseas markets.
Net sales forecasts by item(¥mn)
FY8/21

FY8/22

ResultYoY

Forecast

YoY

Healthcare wear

9,560

8.2%

9,660

Doctors’ wear

2,600

6.1%

2,650

1.9%

Utility wear

356

-3.6%

330

-7.4%

Shoes and other products

328

-4.9%

300

-8.7%

Infection prevention products

361-67.7%

50-86.2%

Patient wear

2,514

22.0%

2,820

12.1%

Surgery wear

1,638

-3.0%

1,680

2.5%

203

0.9%

210

3.4%

17,5632.9%

17,7000.8%

Overseas markets
Total

1.0%

Source: Prepared by FISCO from the Company's results briefing materials

Net sales forecasts by market(¥mn)
FY8/21ResultFY8/22
YoY

Forecast

YoY

Core markets

13,2070.7%

12,990-1.6%

Peripheral markets

4,152

10.8%

4,500

8.4%

Overseas markets

203

0.9%

210

3.4%

17,5632.9%

17,700

0.8%

Total

Source: Prepared by FISCO from the Company's results briefing materials

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14 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.

23-May-2022

7447 Tokyo Stock Exchange Prime Market

https://www.nagaileben.co.jp/ir-en/

Business outlook

Trend in net sales of peripheral markets and ratio of total sales
Net sales (left)(¥mn)

Ratio of total sales (right)

6,000

30.0%
25.4%

5,000
20.8%

23.6%

22.0%

21.5%

25.0%

4,000

20.0%

3,000

15.0%

2,000

3,572

4,500

4,152

3,749

3,601

10.0%

1,000

5.0%

0

0.0%
FY8/18FY8/19FY8/20FY8/21

FY8/22 (E)Source: Prepared by FISCO from the Company's results
 briefing materials
For the mainstay healthcare wear and doctors’ wear, the Company is aiming to strongly increase sales by steadilyacquiring orders for renewal projects through market launches of new concept products against a backdrop ofa stable market. In patient wear, it plans to continue to increase sales from the growth of demand in the market
and by increasing its market share. In surgery wear, it will focus on market penetration of COMPELPACK, fromtheir advantage of being reusable, and sales are expected to increase. In infection prevention products, it does
not expect sales of MHLW products and reusable masks, and it plans to market only reusable isolation gowns.
For overseas markets, the Company will continue to advance its business model in Taiwan.
(2) Net sales forecasts by productIn sales by product, the Company forecasts are sales of ¥1,280mn of high-end products (up 5.1% YoY),¥10,190mn of high-value-added products (up 9.5%), ¥5,500mn of value-added products (down 7.8%), ¥730mn
of mass products (down 4.5%), and ¥0mn of MHLW (Japan) (down 100%).
Net sales forecasts by product(¥mn)
FY8/21

FY8/22

ResultYoY

Forecast

YoY

High-end products

1,218

13.6%

1,280

High-value-added products

9,302

7.0%

10,190

5.1%
9.5%

Value-added products

5,963

6.5%

5,500

-7.8%

Mass products

764

1.1%

730

-4.5%

MHLW products

315-66.7%

0-100.0%17,5632.9%

17,700

0.8%

Total

Source: Prepared by FISCO from the Company's results briefing materials

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15 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/

Business outlook

In high-end products, the Company focused on market stimulation by strengthening the lineup of new products(healthcare wear and doctors’ coats). In high-value-added products, it is aiming to improve added value withadditional functionality and enhanced design and thereby ensure recruitment of renewal projects. In value-added
products, although sales are forecast to decrease due to having delivered a new, large-scale project in the previous
fiscal year, it will move forward on the capture of other company’s projects and the shift from mass-market tovalue-added products.

█ Medium- to long-term growth strategy
Has announced the mid-term management plan and is targeting
operating profit of ¥5.4bn in FY8/24
1. Mid-term management plan
Before the COVID-19 pandemic, the Company announced the mid-term management plan for the next three years
based on the results of the previously completed fiscal period. But when it announced its FY8/20 financial results,
it decided to postpone the announcement of numerical targets for the mid-term management plan, as it concluded
that it would be difficult to calculate them amid the ongoing disruption at medical facilities. However, having since
deemed it possible rationally calculate such targets particularly amid improvement in the market environment
outlook, the Company accordingly released its mid-term management plan extending through the plan’s final year
of FY8/24 in conjunction with its FY8/21 financial results announcement. The plan’s numerical targets are net salesof ¥18.5bn and operating profit of ¥5.4bn in FY8/24*. Although these plans and targets had not been revised as of
the announcement of the Company’s FY8/22 1H consolidated financial results, the Company has stated that “there
is a possibility of another review at the end of FY8/22.”*	Assumes an exchange rate of ¥110 (fixed).

2. Future business strategies
The COVID-19 pandemic is currently affecting the Company’s business environment, but could be a medium- tolong-term tailwind. According to data released by the Ministry of Health, Labour and Welfare among others, thenumber of nurses in Japan is projected to increase from 1.68 million in FY2019 to a maximum of 2.02 million in
FY2025. Moreover, the number of demanded nursing care professionals is forecast to increase from 1.86 million in
FY2020 to 2.45 million in FY2025.

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16 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/

Medium- to long-term growth strategy

Forecasts for future demand forc a r e w o r ker s

Forecasts for future demand for nurses(thousand)(thousand)

2,500

3,000
2,020

2,450

2,500

2,000
1,680

2,000

1,860

1,500
1,500
1,000

1,000
500

500
0

0

FY2019(results)

FY2020(results)

FY2025(forecast)

FY2025(forecast)

Source: Prepared by FISCO from the following materials (English titles have been translated from Japanese)
FY2019 Actual Number of Nursing Professionals from “Statistical Data on Nursing Service in Japan” (JapaneseNursing Association)
FY2025 Estimated Number of Nursing Professionals from “Study Group on Supply and Demand of Medical
Personnel” Materials (Ministry of Health, Labour and Welfare)
FY2020 Actual Number of Nursing Care Professionals from “Survey of Institutions and Establishments for Long-TermCare” (Ministry of Health, Labour and Welfare)
FY2025 Estimated Number of Nursing Care Professionals from “7th Nursing Care Insurance Business Group Plan”(Ministry of Health, Labour and Welfare)In this sort of business environment, the Company plans to achieve growth in the medium term through the following
three strategies: (1) market strategy to expand sales, (2) product strategy to stabilize profitability, (3) and production
strategy to improve the profit margin.
(1) Market strategy to expand sales
As its market strategy, the Company is aiming to expand sales not only in its core markets in which it hascomparatively high shares, but also by further deepening its businesses in the peripheral markets that still haveplenty of room to grow in the future. For the overseas markets, the Company is developing markets, mainly inSouth Korea and Taiwan, by utilizing the business model that is one of its strengths. By implementing thesestrategies, it forecasts that the net sales composition by market in FY8/24 will be 72% from the core markets(compared to 78% in FY8/18), 26% from the peripheral markets (21%), and 2% from the overseas markets (1%).

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17 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/

Medium- to long-term growth strategy

Forecasts for net sales composition by market
Core markets
100%

Peripheral markets

1%

90%

Overseas markets
2%

1%

21%

24%

26%

78%

75%

72%

FY8/18(result)

FY8/21(result)

FY8/24(forecast)

80%
70%

60%
50%

40%
30%
20%
10%
0%

Source: Prepared by FISCO from the Company's results
 briefing materials(2) Product strategy to stabilize profitability
As its product strategy, the Company will aim to progress sales growth of high-end products and high-value-added
products, and at the same time make an effort to increase sales of mass products and value-added products.
Its policy is to stabilize profitability even further. As a result, it is forecasting that the composition of net sales byproduct in FY8/24 will be 9% from high-end products (compared to 7% in FY8/18), 55% from high-value-added
products (51%), 33% from value-added products (36%), and 3% from mass products (5%).

Forecasts for net sales composition by productHigh-end products
Mass products
100%

High-value-added products
MHLW products

Value-added products

7%

7%

9%

51%

53%

36%

34%

5%

4%

FY8/18(result)

FY8/21(result)

90%
80%
70%

55%

60%
50%

40%
30%
20%

33%

10%

0%



3%

2%
FY8/24(forecast)

Source: Prepared by FISCO from the Company's results briefing materials

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18 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.

23-May-2022

7447 Tokyo Stock Exchange Prime Market

https://www.nagaileben.co.jp/ir-en/

Medium- to long-term growth strategy(3) Production strategy to improve the profit margin
As its production strategy, the Company intends to improve the profit margin by raising the overseas production
ratio through shifting production overseas, while keeping down exchange rate-related risk. In Japan, its policy is tomaintain a high profit margin by strengthening its ability to respond to requests for QR and multiple-product, smalllot production runs. By implementing these strategies, it is forecasting that the composition of total production
in FY8/24 will be 53% from overseas production (compared to 49% in FY8/18), 46% from domestic production(50%), and 1% from purchased products (1%).

Forecasts for the composition of production
Overseas production
100%

Domestic production

1%

Purchased products
1%

1%

90%
80%
70%

50%

48%

46%

49%

51%

53%

FY8/18(result)

FY8/21(result)

FY8/24(forecast)

60%

50%
40%
30%
20%
10%
0%

Source: Prepared by FISCO from the Company's results briefing materials█ Shareholder return policy
Pledges a dividend payout ratio of 50% or higher (non-consolidated
basis) and forecasts an annual dividend of ¥60 per share
The Company’s equity ratio reached 90.5% at the end of FY8/21 and it is financially stable. Additionally, considering
the Company’s business conditions, it seems highly unlikely that its profits will rapidly deteriorate, so continued
stable earnings are expected. As a result, if its distribution of earnings outside the Company (particularly dividend
payments) is low, profits will accumulate in shareholders’ equity each year, and return on equity (ROE) will decline;
which is to say, capital efficiency will decline. But in addition to paying dividends commensurate with the growth inprofits, the Company actively and comprehensively returns profits to shareholders, including through share buybacks,
and as a result has maintained a high ROE (8.9% in FY8/21).

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19 20

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Nagaileben Co., Ltd.
7447 Tokyo Stock Exchange Prime Market

23-May-2022
https://www.nagaileben.co.jp/ir-en/

Shareholder return policy

The Company has pledged a dividend payout ratio of 50% or higher on a non-consolidated basis. In FY8/17, it
increased the annual dividend from ¥50 to ¥60, and paid an annual dividend of ¥60 each year from FY8/18 to
FY8/21. The Company has already announced an annual dividend of ¥60 per share for FY8/22 as well, which would
give it a dividend payout ratio of 54.1% (non-consolidated) if it achieves forecast profits. In addition, in April 2022
the Company acquired 480,000 treasury shares (¥976mn) to execute an agile capital policy with the objective ofenhancing capital efficiency and to respond to the changing management environment. In addition to the Company’s
strong financial position, this consistent return to shareholders is worthy of recognition.
Trends in the dividend payout ratio* and the total return ratio*(¥mn)
Total dividend
amountShare buybacks

Dividend payout
ratio*

Total return ratio*

FY8/01

475

0

27.4%

27.4%

FY8/02

475

0

29.3%

29.3%

FY8/03

530

1,697

29.7%

124.6%

FY8/04

744

0

36.5%

36.5%

FY8/05

1,117

0

56.9%

56.9%

FY8/06

1,117

0

53.4%

53.4%

FY8/07

1,117

0

53.1%

53.1%

FY8/08

1,083

1,077

56.6%

111.2%

FY8/09

1,040

1,220

57.3%

122.2%

FY8/10

1,127

0

51.4%

51.4%

FY8/11

1,205

226

52.0%

61.7%

FY8/12

1,205

0

55.1%

55.1%

FY8/13

1,541

229

51.3%

58.7%

FY8/14

1,712

0

54.4%

54.4%

FY8/15

3,324

1,500

107.5%

153.8%

FY8/16

1,662

0

52.5%

52.5%

FY8/17

1,994

0

55.2%

55.2%

FY8/18

1,994

0

55.2%

55.2%

FY8/19

1,995

0

58.0%

58.0%

FY8/20

1,971

1,031

57.9%

87.9%

FY8/21

1,971

0

55.0%

55.0%

FY8/21 (E)

1,960

976

54.1%

81.1%

* On a non-consolidated basis
Note: The Company executed 1:2 stock splits in FY8/04 and FY8/11
Source: Prepared by FISCO from the Company's results briefing materials

We encourage readers to review our complete legal statement on “Disclaimer” page.

20 20

Disclaimer
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◾ For inquiry, please contact: ◾

FISCO Ltd.
5-13-3 Minami Aoyama, Minato-ku, Tokyo, Japan 107-0062
Phone: 03-5774-2443 (IR Consulting Business Division)
Email: support@fisco.co.jp