Paramount Bed Holdings Co., Ltd.
Financial Results Briefing for the First Six Months of the Fiscal Year Ending March 2024
November 7, 2023

Event Summary[Company Name]

Paramount Bed Holdings Co., Ltd.

[Company ID]

7817-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Financial Results Briefing for the First Six Months of the Fiscal Year Ending
March 2024

[Fiscal Period]

FY2024 Semi-annual[Date]

November 7, 2023

[Number of Pages]

30[Time]

16:00 – 16:48(Total: 48 minutes, Presentation: 34 minutes, Q&A: 14 minutes)[Venue]Webcast[Venue Size][Participants][Number of Speakers][Analyst Names]*

3
Tomohiko Kimura
Tatsunori Aiko
Yuichi Naguchi

President and Chief Executive Officer
Corporate Officer, General Manager of
Investor Relations Dept.
General Manager of Budget Planning Dept.

Kazuki Furuyama

Mizuho Securities*Analysts that SCRIPTS Asia was able to identify from the audio who spoke during Q&A or
whose questions were read by moderator/company representatives.

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Presentation
Moderator: Now it is time to begin the financial results briefing of Paramount Bed Holdings Co., Ltd. for Q2of the fiscal year ending March 2024. Thank you very much for taking time out of your busy schedule to join
us today.
The secretariat would like to make a few requests and comments regarding the briefing. A financial reportwill be followed by a question-and-answer session. Please understand that we may not be able to answer allquestions due to time constraints.
Let me introduce today's attendees. This is Tomohiko Kimura, President and Chief Executive Officer. This is
Tatsunori Aiko, Corporate Officer, General Manager of Investor Relations Department. This is Yuichi Naguchi,
General Manager of Budget Planning Department.
President Tomohiko Kimura will now report on the financial results for Q2 of the fiscal year ending March
2024. Mr. Kimura, please start.

Kimura: I am Kimura from Paramount Bed Holdings. Thank you very much for taking time out of your busy
schedule to attend our financial results briefing today.
First, as a summary, I will explain the key points of today's briefing.
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Net sales for Q2 of the fiscal year ending March 2024 increased, driven by growth in the medical care andnursing care businesses. In addition to systems and beds utilizing sensors, which we have been working on formany years, recurring-type proposals, such as resident services, performed well. Factors include the active
promotion of initiatives to improve operational efficiency at medical and nursing care facilities in Japan in
response to reforms in the way physicians work and the shortage of nursing care staff.
On the other hand, in the health promotion business, sales growth was modest due to a lull in demand fordurable consumer goods as the COVID-19 moved to Category 5 and consumer behavior changed, shifting
more toward travel and leisure, as well as a slowdown in the number of customers visiting stores due to thesummer heat wave.
Operating profit increased as an increase in gross profit from higher sales exceeded an increase in expenses.
Both net sales and profits for H1 were record highs. For the full-year plan, we have left the budget at the
beginning of the period unchanged, and there has been no significant change in the market environment. We
will continue to focus on expanding our medical care, nursing care, and health promotion businesses, andplan to achieve record-high net sales and profits for the fourth consecutive fiscal year.

I will now give an overview of the financial results.
First, net sales increased 6.1% YoY and 2.1% over budget to JPY49,720 million.
As for profits, operating profit increased 4.2% YoY and 15.7% over budget to JPY6,480 million. Ordinary profit
increased 2.9% YoY and 33.7% over budget to JPY7,819 million, due in part to foreign exchange gains fromthe valuation of foreign currency-denominated assets as the yen weakened. Net profit attributable to ownersof parent was JPY5,298 million, up 5% YoY and up 32.5% from the budget.

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Next, I will explain the factors behind the increase or decrease in operating profit.
Gross profit increased by JPY1,989 million YoY due to the effect of increased sales resulting from pricerevisions implemented last October as well as an improvement in gross profit margin, despite the negative
impact of increased cost of sales due to higher material prices caused by the weaker yen.
Regarding expenses, increases were in personnel expenses, fee payments, outsourcing expenses, researchand development expenses, and advertising expenses. In the current fiscal year, we are renewing our core
operational system for mid- to long-term growth with a view to expanding our business domain.
Accompanying this initiative, system-related payment fees and outsourcing expenses increased
approximately by JPY500 million YoY.
Total SG&A expenses increased by JPY1,727 million. As a result, operating profit increased by JPY262 million
to JPY6,480 million.

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4The balance sheet is as shown here.
The increase in fixed assets was due to an increase in investment securities and an increase in assets for rental
in connection with the expansion of the recurring business that the Company has now focused on. Net assets
increased by JPY5,551 million.

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Next, I will explain in detail the performance of each of our three business segments: medical care business,
nursing care business, and health promotion business.
First, this page shows the results of the medical care business.
Net sales increased 10% YoY to JPY19,770 million. In Japan, in light of the response to the reform of the way
doctors work that will begin in 2024, the review of operations at medical facilities and the promotion ofgreater efficiency and digitization are urgent issues.
Against this backdrop, the Smart Bed System, a system that improves the efficiency of bedside nursing
operations, as well as other recurring businesses such as rental for hospitals and resident services, performed
well. We continue to receive many inquiries, and we will make proposals that solve problems that are tailoredto the circumstances of each medical institution.
Overseas, although progress varied from country to country, total sales increased 8% YoY, partly due to theeffect of foreign exchange rates.

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In the nursing care business, sales increased 4% YoY to JPY27,767 million.
In the nursing care field, as in the medical field, streamlining and digitization of operations against the
backdrop of a shortage of human resources has become a major issue, and sales of electric beds with a sensor
for the action of getting out of bed, body movement sensors, and Nemuri SCAN increased. Sales of Nemuri
SCAN totaled 13,600 units, with approximately 12,000 units sold in the nursing care business and 1,500 units
sold in the medical care business.
In the area of nursing home products, the three-year anniversary of the launch of the mainstay Rakusho Plus
series and the growing market penetration of this series led to a lull in the upward trend in bed unit sales, but
product sales remained at a high level due to the effect of price revisions and sales of welfare equipment
other than beds.
The rental and wholesale business of PARAMOUNT CARE SERVICE CO., LTD. remained strong, with total sales
up about 3% YoY, despite the return of beds and other equipment rented to the facilities due to the closureof COVID-19-compatible facilities following the shift of COVID-19 to Category 5. The number of rental beds inoperation increased by 8,000 units YoY to approximately 194,000 units.

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Next, net sales in the health promotion business increased modestly YoY to JPY1,282 million.
This is due to a change in consumer behavior after COVID-19 moved to Category 5, including a shift toward
more travel and leisure activities.
Aiming for expansion in H2, a new TV commercial for the INTIME brand began airing in October. To expand
sales of the new INTIME 1000 series models launched in April, we will also strengthen promotion and dealer
support measures, including social media.

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A table of results by business is shown on page 12.
As reference information, we provide sales of the recurring business, which is currently the focus of theCompany's efforts. The medical care business grew 21%, and overall sales increased 7% to JPY16,700 million
in total. The recurring business has shown continued steady expansion from the previous fiscal year.

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3

The next page provides a summary of overseas sales by region.
Consolidated overseas net sales increased 9% YoY to JPY5,283 million. In China, sales expanded significantlyin Q1 due to a rebound from the end of the zero COVID-19 policy, but the economy is currently slowing, andthe outlook is uncertain. We will expand our market share through detailed sales activities tailored to thesituation in each region.
In Indonesia, we have a major government procurement project scheduled for H2. As a recent topic, in Marchof this year, we signed a two-year centralized purchasing agreement with IHH Healthcare, one of the world's
largest private hospital groups, with approximately 80 hospitals and more than 15,000 beds in 10 countries
around the world.
In H1, we have already delivered approximately 500 beds to 22 hospitals. This will be an opportunity for us tofurther strengthen our presence in the IHH Group, which represents the Asian region, by leveraging ourcomprehensive strengths, including sensor technology.

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I will now explain the outlook for the fiscal year ending March 2024.
Consolidated net sales are expected to increase 6.1% YoY to JPY105,000 million, and operating profit isexpected to increase 4.1% to JPY14,000 million. Ordinary profit is projected to increase 2.6% to JPY14,500
million, and net profit attributable to owners of parent is projected to increase 6.3% to JPY9,800 million.
Although the budget at the beginning of the fiscal year remains unchanged, net sales and profits are expected
to reach record highs for the fourth consecutive year.
If, as a result of future progress, we deem it necessary to revise the full-year forecast, we will make anannouncement as soon as possible.

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11Next, I will explain the factors causing changes in operating profit.
Gross profit is expected to increase by JPY3,198 million due to increased sales and improved gross profit
margin.
Regarding expenses, as I mentioned earlier, we are renewing our core operational system this fiscal year.
Although some of the related expenses that were planned for H1 were postponed to Q3, we do not expect
any major changes in the overall amount for the full year.
Overall SG&A expenses are planned to increase by JPY2,651 million. Operating profit is projected to be
JPY14,000 million, up JPY548 million YoY.

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Then, I will explain by business.
Sales in the medical care business are expected to increase 5% YoY to JPY39,119 million.
In Japan, we will continue to expand our current focus on recurring business and promote the Smart Bed
System. Overseas, we will focus on large markets to increase bed sales volume.
Currently, we are working on building a detailed sales strategy that meets the situation and needs of eachcountry, expanding our product lineup, and strengthening our human resources. We will promote both thesecure receipt of orders for projects currently in sight and the expansion of market share and brand strength
over the medium to long term.

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In the nursing care business, we project a 6% YoY increase to JPY60,669 million.
In the domestic nursing home market, as initially expected, the market penetration of mainstay models has
led to a lull in the upward trend in bed sales only, but we will work to increase sales by expanding our productlineup to include non-bed products as well.
For nursing care facilities, we will continue to promote products and services that help nursing care staff work
more efficiently and improve the safety of residents, such as Nemuri CONNECT, a new monitoring support
system launched in October. We will explain this Nemuri CONNECT again later.

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The health promotion business budgets sales of JPY3,500 million, up 39% YoY, and 12,000 beds.
We will promote new brand communication based on the TV commercials launched in October, incooperation with our dealers.

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The slide summarizes the outlook by business.
Domestic recurring sales are expected to increase 7% to JPY34 billion.

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Estimated sales by region are also shown here.
We intend to expand sales in Asia, particularly in Indonesia, China, and India, as we will promote measures toexpand sales by strengthening area strategies.

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17Capital expenditures, depreciation, and R&D expenses are shown in this slide.
Capital expenditures include investments for the review of the core business system, as well as renewal ofpainting facilities at the Indonesian plant and molds for new products.
Depreciation is primarily for assets used in the rental business, such as caring equipment, TV systems for
hospitals, and other equipment. This has increased with the expansion of the recurring business. For reference
information, the amount invested in recurring assets is shown here.

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We plan to increase the annual dividend by JPY3 to JPY62 per share.
Our policy is to pay stable dividends, with a target dividend on equity of 2.7%, and we expect to increase
dividends for the fourth consecutive year in this fiscal year.
In addition, the medium-term management plan will move into the second phase in the next fiscal year. We
are in the process of holding various discussions, taking into account changes in the environment and otherfactors since the time the plan was formulated.
We are constantly reviewing our shareholder return policy, including a review that will lead to further
expansion of corporate value. If we make any changes, we will make another disclosure.

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As topics, I would like to reiterate our strategies and initiatives, as well as the market environment and outlook
for each of our medical care, nursing care, and health promotion businesses.
First, as for the medical care business, the business environment surrounding medical institutions in Japan
continues to be very difficult for earnings, as some hospitals face reduced subsidies due to the change of
COVID-19 to Category 5, and various expenses such as personnel and utilities costs are increasing.
In such a situation, from 2024, there is a demand for more efficient and digitalized medical staff operations inline with the reform of the work style for physicians. Over the years, we have worked to develop products andservices that help nurses and other medical staff work more efficiently and improve the management of
medical institutions.
One of these is the Smart Bed System. ICT devices such as sensors and measuring instruments that measurevital signs are linked to electronic medical records through bedside terminals, preventing input errors andimproving operational efficiency. This system uses the bed as a hub to manage and share a variety of patient
information.
We are proud of this system because it is unique to our company, which has a high market share for hospitalbeds, a product that is paired with hospitalized patients. Depending on the hospital's needs, the system isscalable to accommodate admission/discharge management, TV systems, and in-hospital cashless systems
and has been highly regarded for its ability to improve patient safety and satisfaction.

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When the project was launched in 2016, the high cost burden for introduction was a bottleneck thatprevented its widespread use, but the effectiveness of the Smart Bed Systems is finally gaining acceptanceamid the trend toward greater operational efficiency and digitization in healthcare.
The total number of hospitals that have adopted the system up to the last fiscal year is 32, and about 20 more
hospitals are expected to adopt the system in the current fiscal year alone. Furthermore, businessnegotiations for the next fiscal year and beyond are under way. We are currently in the process of converting
our business from a sell-out business to an ongoing recurring business. Through this Smart Bed System, we
aim to increase the percentage of recurring business.

In overseas markets, which is one of the pillars of the second phase of the medium-term management plan,
we have designated Indonesia, China, and India, which have large populations and are expected to increase
the number of hospital beds and require higher functionality, as our focus areas. In these three countries, weestimate that we already have the top share of the electric bed market. However, we are still in the processof further expanding our market share.
We intend to expand our presence overseas by promoting more detailed area strategies tailored to thesituation in each country.
In India, construction of a new mass production plant started last month to meet the growing demand. The
new plant is being built on more than 20,000 square meters of land in an industrial park located approximately
80 kilometers from Delhi Airport. The project will be completed, and mass production is planned to begin nextyear.
Some of you may have seen today's front-page article in Nikkan Kogyo Shimbun about this new plant in India.
Currently, only the assembly process is performed, but the new plant will include painting facilities and is
expected to double the production capacity.
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As described in the article, India is increasingly favoring domestically produced goods as a matter of policy.
With the new plant in operation, we plan to manufacture more products at our Indian plant. We will strive tofurther expand our business through a lineup that meets the needs of the market.

In the nursing care business sector, the shortage of nursing care staff is a major challenge. In recent years,
due in part to improvements in the labor market in other industries, the outflow of human resources fromthe nursing care sector has become more pronounced, and in 2022, the number of nursing care workers
decreased for the first time.
Meanwhile, the government has designated the medical and nursing care sectors as one of the six priority
reform areas to be tackled as soon as possible in the digital administrative and fiscal reform it has set as a new
key policy. Discussions are currently under way to revise next year's compensation for nursing care and torelax staffing standards for nursing care.
In any case, addressing the shortage of nursing care workers is an urgent issue, so we believe that the use of
sensors, AI, IoT, and other technologies, as well as the digital transformation of nursing care, is essential.
In October, we began offering Nemuri CONNECT, a new cloud-based monitoring support system. It is a systemthat can manage sleep information detected by Nemuri SCAN, a body movement sensor that has sold morethan 160,000 units to date, in the cloud.
For example, in a corporation that operates multiple facilities, it is possible to display and analyze the statusof all residents by facility and unit at the corporate headquarters. This analysis data can be used to improvenursing care programs and examine appropriate staffing for each facility. In addition, application updates canbe completed in the cloud, contributing to DX promotion by facility managers.
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In conjunction with the launch of Nemuri CONNECT, Nemuri SCAN itself underwent a model change. Thismodel change improves expandability and usability, including the addition of an optional sensor that increases
the detection accuracy for the action of getting out of bed. We are committed to promoting the use of Nemuri
CONNECT and the new Nemuri SCAN to further improve the efficiency of nursing care operations and thesafety of residents.

In our current health promotion business, the electric bed technology that helps people get up comfortably
and sensor technology that can detect sleep conditions, both developed in our medical and nursing carebusinesses, have been used by healthy people in general. This helps them lead more lively and energetic daily
lives, which will further extend their healthy life expectancy.
On the other hand, some people have a negative impression of electric beds as something to be used when
one becomes ill or disabled. I have long wanted to change this perception. We want everyone to feel thatusing an electric bed is something that supports them in living a more their own, fulfilling life. Changing thisperception is not something that can be done overnight, but we are now seriously working on restructuring
our brand strategy to achieve this.
As part of this effort, the TV commercials for the INTIME series were renewed for the first time in two and ahalf years and began airing in October. The concept of the new INTIME is an electric bed that gives power toyour life. In line with this new concept, the new commercial video depicts how INTIME moves the body andmind, and how life begins to move.
As the commercial song, we adopted a song by Eiichi Otaki called Kimi wa tennenshoku, which was released
about 40 years ago. It is a famous song that is familiar to people of all ages even today, and we believe that it
is appropriate for INTIME, which gives us power for a richer life.
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While promoting brand communication utilizing this new concept, we aim to expand sales of the INTIME 1000
series, which underwent a model change in April, and promote a change in the perception of electric beds.
The repositioning of electric beds will quickly expand the market for our health promotion business. We arein the process of further examining the restructuring of our brand strategy, which we are working on. We will
share the results of this examination with you in the future.
This concludes my explanation. Thank you very much.

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