［Code Number: 7979］

Briefing Materials
Financial Results and Forecasts for 2Q
FY March 2024
November 22, 2023

Tetsuo Takami,
President & COO
Page

1

Agenda◼ Consolidated Financial Results for

2Q FY March 2024
◼ Financial Forecasts for FY March 2024
◼ Future Business Environment and Medium

and Long-term Business Strategies◼ Topics

AppendixPage

2

Consolidated Financial Results for
2Q FY March 2024

Page

3

■Consolidated Financial Results for 2Q FY March 2024

Highlights
Financial Results for 2Q FY March 2024
Net sales ￥16,447 mn （Overseaｓ sales ratio 57.6%）
Operating income ￥2,511 mn

【YoY】
➢

Increased due to the launch of next generation digital cameras, sales growth of existingproducts overseas, and forex effects➢

SG&A was expected to increase significantly from the previous year due to upfront
investments in R&D and active recruitment of human resources in Japan and overseas, aswell as strengthened sales and marketing activities, but progress was somewhat slower.

【 Achievement rate compared to FY March 2024 Forecasts 】➢ Full-year forecasts were revised on October 24; expecting record-high sales and income
for the third consecutive year
➢ The achievement rate (vs the initial plan) of sales and operating income for 2Q was +0.2%
and +15.4% respectively.

➢ The achievement rate (vs the revised plan) of sales and operating income for full-year
forecast is 47.1% and 50.0% respectively.
➢ Product supply shortage and order backlogs for chemical products, which had been an
issue since the previous fiscal year, are expected to be resolved by the end of the year.
While accelerating efforts to improve profitability by capturing steady overseas demand,
focus on sales and expansion of new product lineups in the preventive dentistry field inJapan.
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■Consolidated Financial Results for 2Q FY March 2024

Summary of Business Performance for the Current Period
Units: ¥mn, ％2Q FY3/23 Actual

2Q FY3/24 Actual(% of sales)(% of sales)

Change From
Previous Period(% change)

615

Net sales

15,831 ( 100.0)

16,447 ( 100.0)(Domestic sales)

7,260 ( 45.9)(Overseas sales)

Initial planMay 10,2023

Revised plan
October 24, 2023

2Q FY3/24 Forecast

FY3/24 Forecast(% of sales)(% of sales)( 3.9)

16,408 ( 100.2)

34,888 ( 47.1)

6,977 ( 42.4)- 283 ( -3.9)

7,386 ( 94.5)

14,851 ( 47.0)

8,571 ( 54.1)

9,470 ( 57.6)

899 ( 10.5)

9,021 ( 105.0)

20,037 ( 47.3)

Gross profit

9,200 ( 58.1)

9,936 ( 60.4)735( 8.0)

9,720 ( 102.2)

20,614 ( 48.2)（ SG&A expenses ）6,963 ( 44.0)

7,781 ( 47.3)

818 ( 11.8)

7,852 ( 99.1)

16,306 ( 47.7)

Operating income

2,237 ( 14.1)

2,155( 13.1)- 82 ( -3.7)

1,868 ( 115.4)

4,308 ( 50.0)

Ordinary income

2,745 ( 17.3)

2,387 ( 14.5)- 357 ( -13.0)

2,004 ( 119.1)

4,572 ( 52.2)

Net income

2,133 ( 13.5)

1,559- 574 ( -26.9)

1,312

3,204 ( 48.7)( 9.5)

119

Net income per share

119.7787.98-31.7974.17

180.70Return on shareholders'equity

6.3％

4.2％

-2.0P

---

8.8％

7.85
14.72
0.49

130.00140.00
19.00

Forex
USD
EUR
RMB

133.46138.7918.98

141.31153.51
19.47

141.31153.51
19.65* Effect of forex fluctuations 【Change from previous period】: Net sales ＋546
【Change from Forecast】：Net sales +641
* Net income in the table refers to "net income attributable to owners of parent".
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■Consolidated Financial Results for 2Q FY March 2024

Income Structure <YoY Change>
Units: ¥mn, Composition ratio (%)

15,831

16,447

Net sales:+¥615 mn 3.9％

Net sales

Overseas sales growth and forex effects.
6,510
6,631

(41.9%)(39.6%)

Cost of sales

SG&A

Operating income: -82 mn -3.7％
Lower OPM due to higher SG&A,
especially personnel expenses.

6,963(44.0%)

7,781(47.3%)

Cost of sales ratio: -2.3pt
Favorable sales mix and yen depreciation.

SG&A ratio: +3.3pt
Operatingincome

2,237

2,155

(14.1%)(13.1%)

2Q FY3/23
Actual2Q FY3/24
ActualLower cost of sales due to favorable
sales mix and yen depreciation.

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■Consolidated Financial Results for 2Q FY March 2024

Sales by Product Category <YoY Change>
Units: ¥mn

Net sales +615 （+3.9％）

546
271

7

134

41

(+0.5％)(+4.4％)

71(-2.8％)

13(-13.6％)300(-9.1％)(+6.2％)(+3.5％)

16,447
15,831

Dental Business +27 （+0.2％）

2Q FY3/23
ActualArtificial
Teeth
Products

Abrasive
Products

Metal
Products

Chemical
Products

CementProducts

Machinery,
Equipment& Other
Products

Nail Care
Businessand OtherBusiness

Forex
impact2Q FY3/24
Actual✓Efforts underway to completely resolve supply constraints for chemical products.

✓

Special demand for new introduction of CAD/CAM equipment in Japan in the year earlier period ran its
course.

✓Favorable inquiries for new products such as “Eye-Special C-Ⅴ" (in-house product: Machinery,
Equipment & Other Products) which was released in June 2023.
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■Consolidated Financial Results for 2Q FY March 2024

Sales by Region <YoY Change>
Net sales +615 (+3.9%)

Units: ¥mn

546
313
180
284
(-3.9％)

206(+6.1％)

65(+4.0％)(16.8％)(-9.8％)

16,447

15,831

Overseas（local currency basis）+353 （+4.1％）
2Q FY3/23
ActualJapan

North ＆Latin America

EuropeChina

Asia ex-China
Impact of& Oceania exchange rate
fluctuations

2Q FY3/24
Actual✓In North America and Latin America, there was a gap before the launch of next generation digital
cameras (Eye-Special series) and adjustments of distribution inventory for some consumables, butthere were signs of recovery from 2Q onward.

✓

Sales in China grew steadily from 2Q onward following the impact of lockdowns at the beginning of
the year.

✓

Performance in Europe and Asia ex-China & Oceania, was strong from 1Q, contributing to theincrease in overseas sales.
Page

8■Consolidated Financial Results for 2Q FY March 2024

Contributors to Change in Operating Income <YoY Change>
Units: ¥mn

418

173

25
Sales
growthIncrease inpersonnel
Decrease in expenses
cost of sales
ratio

27

96

Increase in Increase in
otherdepreciation
expenses

Increase in
Increase inadvertising
R&D
expenses
expenses

60

86
254

Effects offoreigncurrency
fluctuation

・Commissions: -85

2,237

・Travel expenses: -68

2,155

・Operating income of overseas subsidiaries: ＋103

・Parent imports and exports: ＋140
・Consolidation adjustments: -156

2Q FY3/23
OperatingincomeSG&A expenses +613 (+8.8％)

2Q FY3/24
Operatingincome✓Better cost of sales ratio due to higher overseas sales ratio and favorable sales mix✓

Ongoing upfront investments for growth, such as strengthening personnel and R&D activities toexpand businessPage

9■Consolidated Financial Results for 2Q FY March 2024

Balance Sheet

Units: ¥mn

Total liabilities and net assets

Total assets
43,72743,72745,620

8,354
9,578

Cash anddeposits

9,719

Inventories

10,261

Investment
securities

45,620443

Loans payable

6,893

Other
liabilities

38,283

Net assets

1,189
7,022

8,392

9,049

35,515

16,706

17,284

FY3/23
Actual2Q FY3/24
ActualOther assets

FY3/23
Actual2Q FY3/24
ActualMaintained financial strength and high equity ratio (83.6%)✓

Total assets （＋1,893）： Higher inventories and increase in investment securities due to rising market
prices.

✓Net assets （＋2,767） ： Higher valuation difference on securities and larger foreign currencytranslation adjustment.
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■Consolidated Financial Results for 2Q FY March 2024

Cash Flows

Units: ¥mn

1,180

1,017
Income before
income taxes ＋2,387
Dep

8,830

＋538

Acquisition of
fixed assets -1,165

1,601
Dividends paid -761

Income taxes
paid
-848
Increase ininventories

383

Repaymentof debt

-801

7,775

-848

FCF +162

Opening cash
Operating cash
& cash eqivalents
flow

Investing cash
flow

Financial cash
flow

Forex impact

Closing cash
& cash eqivalents✓

With regard to holding investment securities, confirming capital efficiency and synergy effects on
business as appropriate✓

Actively return profits to shareholders through dividend payments
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Financial Forecasts for
FY March 2024

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■Financial Forecasts for FY March 2024

Summary of Full-Year Forecasts◼ Global dental market expansion, strong demand expected mainly inemerging countries◼ Expansion of overseas business and favorable sales mix→Sales and income to reach a record high for the third consecutive year
◼ To enhance corporate value, aggressive investment in R&D, humanresource development, and facilities◼ Strengthening sales activities following normalization of global
economic activity◼ Higher costs due to rising raw material and energy prices→Continue to invest for future business growth→Measures to address high costs include improving production
and sales efficiency and revising product prices.
◼ The backorders that arose in the previous fiscal year when production
could not cope with the surge in demand are expected to be cleared in thecurrent fiscal year.
→Establish a system to cope with future demand growth and businessrisks.
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■Financial Forecasts for FY March 2024

Comparison of Major Indicators
Units: ¥mn, ％FY3/23 Actual

FY3/24 Forecast(% of sales)(% of sales)

Change From
Previous Period(% change)

Net sales

31,678( 100.0)

34,888( 100.0)

3,209( 10.1)(Domestic sales)

14,282 ( 45.1)

14,851( 42.6)568( 4.0)(Overseas sales)

17,396 ( 54.9) 20,037 ( 57.4)

Gross profit

18,699 ( 59.0)

20,614( 59.1)

1,914( 10.2)（ SG&A

14,874 ( 47.0)

16,306( 46.7)1,431( 9.6)

expenses ）2,641 ( 15.2)

Operating income

3,824( 12.1)4,308( 12.3)483( 12.6)

Ordinary income

4,238 ( 13.4)

4,572( 13.1)333( 7.9)Net income

3,135

3,204

( 9.2)

68( 2.2)Net income per share
Return on shareholders'equity( 9.9)

176.10180.70

4.60

9.2％

8.8％

-0.4P

Forex
USD
EUR
RMB

134.95141.2419.38

141.31153.51
19.65

6.36
12.27
0.27

*Effect of forex fluctuations 【Change from previous period】: Net sales 940*Net income in the table refers to "net income attributable to owners of parent".
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■Financial Forecasts for FY March 2024

Forecast by Segment (Net sales and Operating income)Units: ¥mn

DentalBusiness
Nail Care
Business
Other
Businesses
Total before
consolidation
adjustment
Consolidated

Net sales

FY3/23
Actual

FY3/24
Forecast

Amount(% of sales)

Amount(% of sales)

Operating income

29,238
3,719(Operating income margin)( 12.7)

Net sales
Operating income

2,345
93

(Operating income margin)( 4.0)

Change from
Previous Period

32,325
－

3,087
－

2,460
－

115
－

102
－

2
－

34,888－3,204－

Operating income

31,6783,824

34,888
4,308

3,209
483

(Operating income margin)( 12.1)( 12.3)( 0.3)Net sales
Operating income

1005(Operating income margin)( 5.4)Net sales
Operating income

31,684
3,818(Operating income margin)( 12.1)

Net sales

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■Financial Forecasts for FY March 2024

Sales by Region＜YoY change＞
Units: ¥mn

Net sales +3,209 (+10.1%)
Overseas（local currency basis）+1,701 (+9.8％)

277
728
214

567

(5.3％)

481

940(+8.4％)(18.4％)

34,888(+7.9％)(4.0％)

31,678

FY3/23
ActualJapan

North ＆Latin America

EuropeChina

Asia ex-China& Oceania

Forex
impactFY3/24
forecast✓

Domestic sales to remain solid under stable demand✓

Overseas sales to grow organically (i.e., ex-forex) by ¥1,701 million (9.8%) YoY✓

Demand recovery in China and growth in Europe (including Middle East) contributing to overseas sales
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■Financial Forecasts for FY March 2024

Impact of Forex Fluctuations
FY3/24 Forecast(Units: \mn)

Forex rate

Consolidated
earnings impact

Per yen of yen
strength

FY3/23
Actual

FY3/24
Forecast

USD

134.95141.31

255

132

-40

-17

EUR

141.24153.51

517

221

-42

-17

RMB

19.38

19.65

64

10

-240

-150

Sales

OperatingincomeSales

Operatingincome✓FY3/24 assumption is the 2Q FY3/23 actual rate (USD: ¥6.36 depreciation YoY)✓

Overseas sales ratio is increasing, yen depreciation has a positive impact on earnings
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Future Business Environment andMedium and Long-term Business Strategies

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■ Future Business Environment and Medium and Long-term Business Strategies

Business Environment and Future Prospects
Product superiority × Increased market share in developed
countries × Market formation and growth in emerging countries‖
Continuous business expansion

Potential to create new
business solutions

Emerging Markets
Penetration of dental practiceDeveloped Markets
Existence of a huge market➡Large room for growth on increased
market share

Steady growth

Domestic Market ➡Expansion of esthetic and preventive
fieldsStrong business ➡Creation of services that are not boundby the framework of treatment
foundation➡Formation of new markets➡Regional product development and introduction

Economic growth and improvementof standard of living➡Dentistry approaching developed markets levels➡Increased demand for high value-added dental
treatment materials➡Sufficient recognition➡High reliability of products

Stable market size
➡Improving dental IQ

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■ Future Business Environment and Medium and Long-term Business Strategies

Sources of Competitiveness and Corporate Value

Proprietary technologies and R&D structure
Ratio of R&D expenses to net sales： 5.8％
Ratio of R&D personnel： 18.7％
Number of patents held： 423
Ratio of sales of new products to net sales： 15.7％

Highly-trusted SHOFU brand andworldwide sales network
Competitive product lineup

Corporate Philosophy

Artificial Teeth Products： 37.0％

Contribution todentistry throughinnovative businessactivities

Abrasive Products： 46.3％

Number of countries where our
products are sold/number of
distributors:
Approx. 100 countries/
approx. 1,000 companies# of Shofu Dental Club members:
16,467

Production technology and quality
assurance system

Number of items handled：
Approx. 20,000 items

Number of countries where
pharmaceutical approval has beenobtained： 85countries～ Proven products forbetter dentistry ～Global production network:
4 bases in Japan
5 bases in overseas

Human resources supporting SHOFU
Number of group employees:
663 persons in Japan636 persons overseas
Total number of specialists with expert knowledge（employees qualified as dentists, dental hygienists, dental
technicians, pharmacists and others）：66 persons
Average years of service（parent basis）
17.41 years (men) 15.39 years (women)

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■ Future Business Environment and Medium and Long-term Business Strategies

Vision for Our Company: Medium-to Long-term Basic Policy
Strive to expand the overseas business bysignificantly shifting the allocation ofmanagement resources to overseas markets.

¥50 billion
Group net sales
Group operating income ¥7.5 billion
Operating income margin15％

FY3/12

FY3/13

FY3/14

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21 FY3/22 FY3/23 FY3/24
forecastPage

21

■ Future Business Environment and Medium and Long-term Business Strategies

Fiscal 2021 to 2023 Medium-term Management Plan
Company-wide targets in the fiscal year ending March 2024
Group net sales
Overseas dental sales ratio
Group operating income
Operating profit marginROE¥34.8 billion
58.6%¥4.30 billion
12.3％
8.8％

Key issues to achieve goals+¥3.3 billion *+4.2pt *+¥30 million *+0.3pt *+0.8pt **compared with the target of the Medium-term Management Plan

R＆D

Development and introduction of new
products that match local demand

Production

Reallocation of production sites andexpansion of overseas production

Sales

Improvement of our sales network/
realignment of sales offices
Establishment of domestic and international
academic networks

HR

Development of and securing of global talentFinance

Capital procurement in response to increasing
investment demands

・Synergies from businesstie-up with Mitsui
Chemicals and Sun
Medical・Promotion of M&A
・Establishment of group
governance system

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■ Future Business Environment and Medium and Long-term Business Strategies

Specific Initiatives – R＆D

7.6

7.4

R&D expenses (millions of yen)
7.3

7.2
6.2

✓
✓
✓

As a percentage of sales (%)

6.3

6.2

6.3
6.0

5.9

6.2
5.8

Developing products with a global vision.
Developing new products for local markets’ middle-class and high-volume segments.
Developing products with the goal of creating markets in new fields.

2,035
1,738

1,185

1,219

1,332

1,410

1,431

1,408

1,494

1,492

1,537

5.8

1,846

1,563

Major new products launch
BeautiBond Xtreme
ResiCemEX
EyeSpecial C-4 （～FY3/23）
EyeSpecial C-5 (FY3/24～）

FY3/12

FY3/14

FY3/16

FY3/18

FY3/20FY3/22

FY3/24
forecast

Ongoing R&D, target 20% new product (within 36 months of launch) sales ratio
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■ Future Business Environment and Medium and Long-term Business Strategies

Specific Initiatives – Production
Aiming to strengthen international competitiveness by improving
production and sales efficiency
Domestic production
facilities✓ Continued proactive
capital investment✓ Improve production
and sales efficiency
Status of consideration or implementation

Shiga Shofu(Shiga)◼
◼
◼

Shofu Products Kyoto(Kyoto)Better delivery service to users ◼
Relieving Shofu Headquarters◼
plant production constraints
Reducing production costs◼

Advanced HealthcareLTD.（UK）

Shofu Headquarters（Kyoto）

Reduce high shipping costs forhazardous goods
Avoid impact of currency
fluctuations
Avoid high tariff.

SHOFU Products
Vietnam(Vietnam)

Merz Dental GmbH
（Germany）

Overseas production facilities➢ Expansion of production at the Headquartersplant➢ Transfer of production between domestic bases➢ Transfer of some products/processes overseas➢ Expansion of overseas production

Shanghai Shofu
Dental Materials
Co., Ltd. （China）
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■ Future Business Environment and Medium and Long-term Business Strategies

Specific Initiatives – Sales
Raise awareness of our products in the dental industry inJapan and overseas.
→Expansion sales network & Development of sales base
→Building domestic and overseas academic networks→Holding seminars and participating in various exhibitions

Shofu Digital Denture
Conferences 2023
(Feb. 2023 Tokyo)

IDS 2023(March 2023 Germany)

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■ Future Business Environment and Medium and Long-term Business Strategies

Enhancement of Business and Capital Tie-up
with Mitsui Chemicals and Sun Medical◼ Capitaltie-up◼ Businesstie-up◼ Exchange of
personnel◼ Shofu issued 1,780,000 new shares in a third-party allocation
Mitsui Chemicals (MCI) received these charges (total value of¥2,988 million)◼ MCI’s shareholdings increased from 11.17% to 20.01%(Shofu became an equity-method affiliate)◼ Shofu acquired 20% of MCI’s 70% shareholding in Sun Medical◼ MCI’s shareholding:
70.0％⇒50.0％
Shofu’s shareholding:0.0％⇒20.0％(Sun Medical became Shofu’s equity-method affiliate)◼
◼
◼
◼

New product development
Expansion of product lineup
Use of sales networks in Japan and overseas
Augmentation and sharing of manufacturing functions◼ MCI dispatched one non-executive director to Shofu’s board◼ Shofu dispatched one non-executive director to Sun Medical’s
board

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■ Future Business Environment and Medium and Long-term Business Strategies

Dividend Policy
1623.963.0[Target] Consolidated dividend payout ratio: 30% or more DOE: 1.7%
56.7

49.4

58.8
36.4

38.0

36.2

30.4

30.1

27.2

32.4

26.0

3.0
1.8

1.6

1.5

1.4

1.3

1.5

1.4

1.5

1.7

1.8

2.2
10

2

Consolidated dividend payout ratio (%)
DOE:Dividend on equity ratio (%)
Commemorative dividend (yen/share)
Ordinary dividend (yen/share)
2
2
2
1

18

FY3/1218

18

FY3/1418

18

FY3/1618

18

FY3/18

47

47

37
23

26

FY3/2029

FY3/22

FY3/24(Forecast)

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■ Future Business Environment and Medium and Long-term Business Strategies

Shofu’s Sustainability
Based on its corporate philosophy of “Contribution to dentistry through innovative business activities,”
the Shofu Group, in collaboration with its stakeholders, will work to solve social issues through its corporate
activities and aim to achieve both the medium- to long-term enhancement of its corporate value and therealization of sustainable society.

Key theme
１. Contribution to people’s higher
QOL

Material issues

Related SDGs

■Quality assurance and stable supply of products■Ensuring proper use of products■Providing products and services that solve issues
in dentistry■Providing information for higher dental IQ

2. Promotion of corporate
activities friendly to global
environment■Contribution to a recycling-based society■Addressing climate change and contributing to
a decarbonized society■Preventing environmental pollution

３. Strengthening of the management ■Respecting human rights
base to support corporate value■Enforcing thorough complianceenhancement■Promotion of risk management■Strengthening corporate governance■Disclosing information appropriately and having
dialogue with stakeholders
４. Cultivation of a rewardingorganizational culture anddevelopment of human resources■Enhancing employees’ health and ensuringsafety in work environment■Promotion of human resource development■Promoting diversity and inclusion■Realizing work-life balance
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TOPICSPage

29

■ TOPICS

New Product Information
Toothpaste exclusively sold by dentists “Merssage Self-care”
The series has expanded to seven products with the addition of three new products.

These products focus on self-care to maintain the benefits of professional
dental office careThree new products （Released on October 23, 2023）
For Total Care

Merssage Premium Care

Contains 8 medicated ingredients to provide a totalsolution for problems such as tooth decay, periodontal
disease, bad breath, sensitivity symptoms, and stains.

For Esthetic

Merssage Whitening Care

Lifts stains from the tooth surface, dissolving andremoving stains. Gently removes stains with highcleaning silica by brushing.
For Periodontal Prevention Merssage Perio Care

Medicated ingredients reduce gum inflammation, therisk of periodontal, and inhibit the growth of causative
bacteria that lead to periodontal. Low abrasiveness for
gentle plaque control on tooth surfaces.
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■ TOPICS

Exhibition/Event Information
The 9th WORLD DENTAL SHOW 2023 in YOKOHAMA (September 29 - October 1, 2023)

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31

■ TOPICS

Social Contribution -Advocacy for Oral Health Care-

Launch of “HA-I-KU” a dental education website for parents and children-For future generations and their families-※ Japanese site only

Various information on dental treatment and oral healthcare, including a "Dental Web Picture Book“ for parents
and children to learn together, a "Parents' Guide" that
introduces key points for reading and understanding
picture books, and "Dental Education" on topics such as
tooth decay prevention. In addition, a photo contest on
teeth is held once a year.

Once a year, we invite “HAIKU"
and “SENRYU" about dentistry.
Winning entries will be announced on the"Haiku" website and featured in ads on
train straps in Kyoto City.

※ Japanese site only

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The pages below are provided only for your reference.
The information on these pages will not be covered in
the Financial Analyst Meeting.

Appendix(Summary of the Company Profile and its Businesses)

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■Appendix(Summary of the Company Profile and Its Businesses)

Company Profile(As of March 31, 2023)◼

Company name

SHOFU Inc.

◼

Representative

Tetsuo Takami, President and CEO◼

Address

11 Kamitakamatsu-cho, Fukuine, Higashiyama-ku,
Kyoto 605-0983, Japan◼

Date ofestablishment

May 15, 1922◼

Capital5,968,956,614 yen◼

Listedexchanges

Prime Market of Tokyo Stock Exchange◼

Number of
employees

476 (entire group: 1299, including 636 in overseas subsidiaries)◼

Business

Manufacture and sale of dental materials and equipment◼

Main customers

Dental institutions (via sales agencies)◼

Number ofgroup
companies

Subsidiaries 19 (four in Japan, fifteen overseas)
Affiliates
1 (one in Japan)
Dental Business companies: 17 (four in Japan, thirteen overseas)
Nail Care Business companies: 3 (one in Japan, two overseas)
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■Appendix(Summary of the Company Profile and Its Businesses)

The Origin of Our Company - A Venture Business in the Beginning・Worked at Kyoto Toki Co., Ltd.
Kajo Shofu II (Establishment in 1887)
Kajo Shofu I Ceramist
・Dedicated to the industrialization of pottery
Kiln at the base of the Kiyomizu-zaka
for export
in Kyoto (1830)<The founder>
Kajo Shofu III

・Succeeded in manufacturing
Japan's first high-voltage
insulators (1905)
・Manufacture of ceramics
Establishment offor export
Shofu Porcelain Joint Enterprise ・Manufacture of(1906)
high voltage insulators
・Conversion to a military company
Reorganized and changed
by national policy during the World War Twocompany name
・Dissolved in 1965.
to Shofu Industrial Co., Ltd.
(1917)

Established as a sister company

・Born in Seto City,
Aichi Prefecture (1870)
・Worked at Kyoto Toki Co., Ltd.

SHOFU DENTAL Mfg. Co., Ltd.
(1922)
Change to the current name(1983)・Developed and released"SHOFU Anatorm form porcelain tooth",the first high-quality artificial teeth made in Japan.
・Subsequently, the company expanded its
business domain to related materials,
leading to its current business format.

Page

35

■Appendix(Summary of the Company Profile and Its Businesses)

Corporate History (1)

1963
1971～
1978
1983

Shofu Dental Manufacturing Co., Ltd. founded and commenced the manufacture and sale of Japan’s
first artificial teeth.
Shofu shares listed on the over-the-counter market.
Established sales subsidiaries in the U.S. and West Germany. Started overseas production (in Taiwan).
Established Shiga Shofu Inc. as a manufacturing facility for resin teeth.
Changed the company name to SHOFU Inc. Commenced management reforms.

1989

Shofu’s shares listed on the Second Section of the Osaka Securities Exchange (in November).

1922

1990～
1997
1996
1997
2002～
2003
2005
2006
2007
2008

2009

Purchased a British research & development and manufacturing company.
Founded a sales subsidiary in the U.K. Obtained the UK GMP (Good Manufacturing Practice)
Certificate. Obtained a CE marking certificate.
Founded Promech Inc. Established Liaison Office in Shanghai, China.
Established the industry’s largest research facility as a part of a project to commemorate Shofu’s
75th anniversary.
Celebrated the 80th anniversary of its founding. Established Liaison Office in Beijing, China.
Established Shanghai Shofu Dental Materials Co., Ltd., a production facility in China.
Acquired Shoken Inc. as a wholly owned subsidiary through a share exchange.
Established Shofu Dental Supplies (Shanghai) Co., Ltd., a sales facility in China.
Training Center designed to promote customers service completed (in August).
Celebrated the 85th anniversary of its founding. Shofu’s shares listed on the Second Section of theTokyo Stock Exchange (in February).
Acquired and turned Nail Labo Co., Ltd. Into a subsidiary.
Acquired 1.6 million of the company's own shares in accordance with the purchase of the company's
own shares scheme in the J-NET market of the Osaka Securities Exchange.
Reached basic agreement concerning business and capital partnership with Mitsui Chemicals, Inc.,and Sunmedical Co., Ltd.
Transferred 1.8 million shares of treasury stock to Mitsui Chemicals, Inc., through a third-party
allocation.

Page

36

■Appendix(Summary of the Company Profile and Its Businesses)

Corporate History (2)
2010
2012

2013
2014
2015
2017
2019

2020

Shofu Dental Trading (Shanghai) Co., Ltd., is established in China.
Celebrated the 90th anniversary of its founding. Listed on the First Section of the Tokyo Stock
Exchange.
Promech Inc. is split up, with Shoken Inc. taking over its dental businesses and Nail Labo Co,. Ltd.,
absorbing the company and its remaining operations.
The Singapore Sales Office is incorporated as the local corporation SHOFU Dental ASIA-PacificPte.Ltd.
Established joint venture in Taiwan between Nail Labo Co., Ltd. and a local sales distributor.
Acquired shares and made Merz Dental GmbH. a subsidiary.
Established SHOFU BIOFIX INC.
Established a subsidiary in Brazil
Established a subsidiary in India
New plant for Merz Dental GmbH. Completed
Established a subsidiary in U.S.
Established a subsidiary in Vietnam
Enhancement of business and capital tie-up with Mitsui Chemicals, Inc.,(MCI) and Sun Medical Co.,
Ltd.(SMC)
Shofu issued 1,780,000 new shares in a third-party allocation and MCI received these charges.
Shofu acquired 20% of MCI’s 70% shareholding in SMC.
(Shofu became MCI’s equity-method affiliate. / SMC became Shofu’s equity-method affiliate.)

2022

Celebrated the 100th anniversary of its founding.

2023

Completion of new company building [Ayumi Terrace

Page

37

■Appendix(Summary of the Company Profile and Its Businesses)

Corporate History (3)- Sales
Unit: ￥mn, ％1980s
 The government undertook measures
to reduce medical expenditures, which
resulted in low rates of growth in the
medical industry
 Introduction of 10% copayment borneby policyholders (in 1984)

200

150

 Enforcement of Revised Pharmaceutical
Affairs Law (2005)
 Largest-ever curtailment of remuneration
for medical treatment (2006)
Copayment borne by healthinsurance policyholders raised In 1997: from 10% to 20%
 In 2003: from 20% to 30%

1970s
Expanded operations
overseas (US, West
Germany, Taiwan)

100

1960s
Era of high growth dueto the prevalence of the
50 universal coverage
health insurance system

Management reforms(1983)
Became the first company
in the industry to list its
shares on a stock
exchange (in 1989)

Listed on the First
Section of theTokyo Stock
Exchange (2012)

0

2021

2019

2017

2015

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

1981

1979

1977

1975

1973

1971

1969

1967

1965

1963

1961

1959

(Note) Amounts are non-consolidated (parent) sales.

Page

38

■Appendix(Summary of the Company Profile and Its Businesses)

Group Overview［Domestic & Overseas Bases］
Sales outlets

Consolidated subsidiaries

Dental Businessproduction subsidiaries
Shiga SHOFU Inc.
SHOFU Products Kyoto Inc.

Japan

Asia

Total

SHOFU BIOFIX INC.

Nail Care Businesssubsidiaries

Dental Business

Nail Labo
Corporation[Production・Sales]

Tokyo Branch
SapporoSendai
NagoyaKyoto
Osaka
Fukuoka【Equity-method affiliate】
Sun Medical Co.,SHOFU Dental Corporation
Nail Labo Inc.
Smart Dentistry Solutions Inc.
[Sales]SHOFU Mexico
SHOFU Dental Brasil Comercio
De Produtos Odontologicos Ltda

U.S.A.

EuropeDental Businesssales subsidiaries

Merz Dental GmbH
Digital Dental Service GmbH
Advanced Healthcare Ltd.

SHOFU Dental GmbHSHOFU UK
SHOFU Italy

SHANGHAI SHOFU DENTAL
MATERIAL CO.,LTD.
SHOFU Products Vietnam
Co., Ltd.

SHOFU DENTAL TRADING
Nail Labo Taiwan(SHANGHAI ) CO.,LTD.
[Sales]SHOFU Dental Asia-Pacific Pte. Ltd.
SHOFU Dental India Pvt. Ltd.

SHOFU Taiwan

7 subisidaries＋1 affiliate[Domestic 3, overseas 5]

9 subsidiaries[Domestic 1, overseas 8]

3 subsidiairies[Domestic 1,
overseas 2]
Page

39

■Appendix(Summary of the Company Profile and Its Businesses)

Business Model - Dental Business
Dental professionals
Orthodontic materials and implant

Dental healthcare
institutions(Dental clinic)(University

In-house development
and production(approx. 80%)

Dentaltreatment
andservices

Material
manufacturers

SHOFU INC.

Dental laboratory services

Sales
agent

Dentalmedicalequipment
manufacturers

Productspurchased(Around 20%)

Patients
andcustomers

Dentallaboratory

Dentalhealthcare
educational
institutions
Page

40

■Appendix(Summary of the Company Profile and Its Businesses)

Trends in sales and various income margin

55.1% 55.2% 54.9%

56.3%

57.4%

58.0%

57.3%

59.0%

58.0%
56.2%

57.5%
55.1%

11.4%

Gross profit margin （％）
Group Operating income margin（％）

6.2%

4.5%

5.4%

5.9%

6.8%

8.5%

12.1%

9.3%

7.3%
6.2%

6.2%

31,67028,130Net sales (￥mn)
22,970Operating income（￥mn）

24,03024,91026,10024,68022,30019,68018,25015,98016,020

3,210
990

720

980

1,150

FY3/12

FY3/13

FY3/14

FY3/15

1,560

1,380

1,490

FY3/16

FY3/17

FY3/181,810

FY3/19

2,210

3,820

2,300

FY3/20 FY3/21 FY3/22 FY3/23

Page

41

■Appendix(Summary of the Company Profile and Its Businesses)

Overseas Sales and Overseas Sales Ratios Trends
Overseas sales ratio

Net Sales （¥ mn）
Japan
EuropeAsia ex-China & Oceania【GAGR（FY3/12-FY3/23)】
North & Latin America ： 13.0％
Europe ： 15.6％
China ： 20.2％
Asia ex-Chia & Oceania： 11.7％

54.9%
North & Latin America
China
45.3%
41.4%

24.5%
11.5
8.7

9.8
5.2
12.4
10.5

8.8
6.1
12.6
11.8

121.9

121.0

FY3/12

FY3/13

16.0
15.7

43.2%

44.4%
44.0%

33.0

40.9%
24.0

31.3%
14.6
15.1

28.4%

23.8%

51.8%

13.2
10.8
18.1

40.9

18.2
15.3
15.4
36.7

20.0

17.8

21.9

41.5

42.3

26.4

28.8

20.5

24.3

18.0

39.7

32.8

24.0

61.0
54.6

41.3
42.4
29.0

25.0

34.3

137.3

135.7

40.3

19.5

24.5

23.8

130.7

135.2

134.6

131.9

136.5

136.2

FY3/14

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19 FY3/20 FY3/21 FY3/22 FY3/23

146.1

142.8

Page

42

■Appendix(Summary of the Company Profile and Its Businesses)

Medium-term Management Plan: Main Targets
Unit: ￥mn, ％FiscalMarch
2021(Results)
Net sales

Mid-term Management Plan
FiscalFiscalFiscal March
March
March
2022
2023
2024
(Results)(Forecasts) (Forecasts)（△5.5％）（14.0％）(Domestic sales)

13,733

13,573(Change from Previous Period)（△6.0％）（△1.2％）(Change from Previous Period)（4.2％）（7.5％）（4.5％）（10.1％）

14,282 ★ 14,851（4.6％）（5.2％）（4.0％）

10,946 ★ 14,564 ★ 15,132 ★ 16,669 ★ 17,396 ★ 20,037（33.1％）（3.9％）

Operating income

2,300 ★

3,217

2,732 ★

(Persentage of sales)（9.3％）（11.4％）（9.3％）

Ordinary income

2,523 ★

3,658

2,850 ★

(Persentage of sales)（10.2％）（13.0％）（9.7％）Net income

1,674 ★

2,546

1,975 ★

Dental business
Overseas sales ratio（12.6％）

14,182 ★ 14,840（△4.8％）(Persentage of sales)

FiscalMarch
2024(Forecasts)

24,680 ★ 28,137 ★ 29,314 ★ 31,509 ★ 31,678 ★ 34,888(Change from Previous Period)(Overseas sales)

FiscalMarch
2023(Results)（6.8％）

45.1％（9.1％）★

52.8％（10.2％）

53.1％（12.1％）（12.3％）

3,927 ★ 4,238 ★ 4,572（12.5％）（13.4％）（13.1％）

2,764 ★ 3,135 ★ 3,204（8.8％）★

（15.2％）

3,791 ★ 3,824 ★ 4,308（12.0％）（6.7％）★

（19.4％）

54.4％（9.9％）★

55.9％（9.2％）★

58.6％* ”Mid-term-Management Plan” is the revised budget announced on May 11th, 2022.
Page

43

■Appendix(Summary of the Company Profile and Its Businesses)

Medium-term Management Plan by Segment
Unit: ￥mn, ％FiscalMarch
2021(Results)

Fiscal March
2022(Results)

Fiscal March
2023(Forecasts)

Amout

%

Amout

Amout

Dental business

22,33490.5 25,876 92.0 26,730

Nail care business

2,268

9.2

2,168

7.7

2,479

8.5

2,606

8.3

2,345

7.4

2,460

7.1

Other businesses

81

0.3

92

0.3

104

0.4

120

0.4

95

0.3

102

0.3

Net sales

Fiscal March
2024(Forecasts)

FiscalMarch
2023(Results)

FiscalMarch
2024(Forecasts)

Amout

Amout

Amout

Mid-Term Management Plan%%

91.2 28,782

%

%

%

91.3 29,238 92.3 32,325 92.7

24,685 100.0 28,137 100.0 29,314 100.0 31,509 100.0 31,678 100.0 34,888 100.0

Dental business

2,091

9.4

3,065

11.8

2,598

9.7

3,612

12.6

3,715

12.7

-

-

Nail care business

201

8.9

131

6.1

125

5.1

166

6.4

97

4.2

-

-

Other businesses

2

2.6

14

15.1

7

7.5

12

10.5

5

5.7

-

-

Operating income

2,294

9.3

3,211

11.4

2,732

9.3

3,791

12.0

3,824

12.1

4,308

12.3

* ”Mid-term-Management Plan” is the revised budget announced on May 11th, 2022.
Page

44

■Appendix(Summary of the Company Profile and Its Businesses)

Medium-term Management Plan: Capex, Depreciation, R&D
Unit: ￥mn, ％FiscalMarch
2021(Results)

Mid-Term Management Plan
FicsalMarch
2022(Results)

FicsalMarch2023

FicsalMarch
2024(Forecasts)(Forecasts)

FiscalMarch
2023(Results)

FiscalMarch
2024(Forecast)

Capital investment

1,097

1,100

2,483

1,227

2,319

1,834

Depreciation expenses

955

901

1,014

1,022

971

1,176

R&D expenses

1,563

1,738

1,853

1,834

1,846

2,035

106.17
123.7315.44

112.86131.01
17.03

115.00130.0018.00

115.00130.0018.00

134.95141.31141.2419.38

153.51
19.65

Forex

USD
EUR
RMB

* ”Mid-term-Management Plan” is the revised budget announced on May 11th, 2022.
Page

45

Appendix(Dentistry Data)

Page

46

Trend of the Number of Dentists andDental Treatment Expenditure■Appendix(Dentistry Data)

35,000104,118

Number of dentists in practice（Unit: Person, right scale

28,835 100,000

30,00025,000110,000

Dental treatment
expenditure per dentist(Unit: 1,000 yen, leftscale)

90,00080,00020,00070,00015,00060,000Dental treatment expenditures(Unit: 100 million yen, left scale)

50,00010,00040,00034,163
5,000
2,222
0
'62

Both medical expenses and the number of dentists
are on the rise, although growth rates are slowing.

30,00020,000

'66

'70

'74

'78

'82

'86

'90

'94

'98

'02

'06

'10

'14

'18

Prepared using yearly data from Summary of National Healthcare Expenditures,
Survey on Doctors, Dentists and Pharmacists (Ministry of Health, Labour and Welfare)

Page

47

■Appendix(Dentistry Data)

Long-term Trend of Dentistry-Related Statistics
80
70
60
50
40
30

Trend of national healthcare expenditures, the percentage of the population
aged 65 and older, dental treatment expenditure as a percentage of total
national healthcare expenditures and manufacturers’ shipment value ofpharmaceutical production as a percentage of total dental treatment
expenditures (from 1962 to 2018)

The elderly population in Japan isincreasing, but that has not led to themarket expansion of dental fieldcompared to that of medical.

30

25

National healthcare
expenditures (index)(1962 = 1.00)

20
Percentage of the
population aged 65 andolder (right scale)

Dental treatment expenditure as apercentage of total national
healthcare expenditures (right scale)

15
Dental treatment
expenditure (index)(1962=1.00)

10

20
5
10

Manufacturers’ shipment value ofpharmaceutical production as a percentage of
total dental treatment expenditures

0

0'62 '65 '68 '71 '74 '77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13 '16 '19
Prepared using yearly data from Summary of National Healthcare Expenditures,
Production Statistics issued by the Pharmaceutical Industry (Ministry of Health, Labourand Welfare)

Page

48

■Appendix(Dentistry Data)

Healthcare Expenditures by Age Group (weight)
People aged 65 years and older tend to place less importanceon dental treatment than general medical treatment.
Dental treatment

General treatment
64.2

60.0

50.0

46.3
40.0

39.4
30.0

20.0

19.7
10.0

0.0

'96

'00

'04

'08

0-14 years old

'12

'16

15-44 years old

'99

'03

45-64 years old

'07

'11

'15

'20

65+ years old

Prepared using yearly data from Summary of National Healthcare Expenditures(Ministry of Health, Labour and Welfare)

Page

49

■Appendix(Dentistry Data)

The 8020 Movement and Changes in Dental Diseases

Percentage of people with 20 or more of their own teeth
97.9（％）
100 97.1

95.5
93.0

90

Causes of tooth loss

94.9

2011

89.3

85.7

2022

Impacted tooth
Others
5.0％
7.6％
Orthodontic
treatment
1.9％

81.4
78.4

80

72.1
69.6

70
60

55.8

Fracture
17.8％

52.3
50

47.6

45.6

Caries(tooth decay)
29.2％

38.1

40

28.9

30
20

17.0

Periodontal disease
37.1％

10
0
45～

50～

55～

60～

65～

70～

Survey of Dental Diseases 2011,2022(Ministry of Health, Labour and Welfare)

75～

80～

85～
（age）

(Survey by the 8020 Promotion Foundationin 2018)
Page

50

■Appendix(Dentistry Data)

Dental Clinic Consultation Rates
Dental clinic consultation rates are rising trend.
30,000Consultations (x 10,000)

25,000

13.9

15.2

16.1

14.6

23,58922,101

23,71423,045

22,59522,035

21,737

21,18519,987

19,616

19,01818,66918,516

18,23718,18017,983

17,41016,78916,77815,00011.0 11.0

11.7 11.9 11.9

12.8 13.1

20,50720,000

11.4

12.1 12.2 12.4

13.4

14.9

15.7

24,217

Consultation rate (%)

14.3 14.5

15.7

10,0005,000

0'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22* Consultation rate: ratio of persons receiving monthly dental treatment or examinations (12 times yearly)

Prepared using annual data from "Recent Trends in Healthcare Expenditures (MEDIAS)"Pageissued by the Ministry of Health, Labour and Welfare

51Medical Institutions with Facilities that meet
CAD/CAM Requirements■Appendix(Dentistry Data)[Ratio of dentistry institutions with registration of CAD/CAM
crowns and CAD/CAM inlay to all dentistry institutions byprefecture (as of October 1, 2022)]

80,000

83.2%
79.0%

75.0%

70,000Nationwide fromdomestic
60,000

68.0%
62.4%

%

56,38853,54052.4%

50,00050,842

46.3%

46,08640,00042,29737.6%
35,49530,00031,37027.3%
25,50720,00018,52410,000Areas covered byhealth insurance

PremolarPremolars

Inlay

0

'22
'21
'20
'19
'18
'17
'16
'14（(Prepared'15
by referring to the status of healthcare institutions and insurance pharmacies which submitted a notification regarding
facility standards that was accepted by regional public welfare bureaus (List of healthcare institutions regarding submission andacceptance of notification), compiled by the Ministry of Health, Labour and Welfare)

Page

52

■Appendix(Dentistry Data)

Global Dental Equipment Market Size (amount, weight)
China

Japan

Global Dental Equipment Market’s
CAGR（2017-2022） :7.0％

Asia ex-China

1,769(4.9%)

1,814(5.0%)

Converted to $1 = 145 yen

Global Dental Equipment Market Size

＄35.9 billion＝Approx. 5.2 trillion yen (※)

1,839(5.1%)
771(2.1%)

Dental materials are expected toaccount for about 30% of the total

Middle East
& Africa

Global dental materials market

Europeex-GermanyUSA
16,332(45.4%)

9,176(25.5%)

Dental Business sales（FY3/23）

29.24 billion

Germany(Units：＄mn)$10.7 billion= Approx. 1.6 trillion yen(※)

2,655(7.4%)

1,606(4.5%)

Our current global market
share is about 2%.
（Only dental materials market）

North & Latin America ex-USA（Fitch Solutions 「Worldwide Medical Devices Market Fact Book April 2023 」より作成）

Page

53

■Appendix(Dentistry Data)

Global Dental Market ─ Market Size and Growth Potential
16,332Market size(million dollars)

28.6

Annual average growth・%
3,276

2,655

12.4
10.5

10.4

9.9

8.9 8.8

8.8
7.5

7.5

1,740

5.2

6.0

6.3

5.8

1,839
1,769
4.8

1,453

3.7

1,240

983

1,093

2.5

1.7

824

771
577

473

246

366

166

158

Other
(11 countries)

Taiwan

Korea

India

China

Central/Eastern Europe

Japan

Middle East &Africa(17 countries)

Other(15 countries)

TurkeyWestern Europe

RussiaOther(11 countries)

Italy

UnitedKingdom

FranceGermanyOther(8 countries)

BrazilUSA

North/Latin America

Asia / Oceania◆Source : Fitch Solutions “Worldwide Medical Devices Market Fact Book April 2023 “

Page

54

■Appendix(Dentistry Data)

Global Dental Market ─ Number of Dentists
Number of dentists in the world: Approx. 2.94 million
Number of dentists in Japan: Approx. 100 thousand

88.7
1.26

Number of dentists (Ten thousand)

38.5

Number of dentists per 1000 of the Population

0.90

27.1

0.89

0.86
0.78
0.72

0.71

0.68

0.65

0.62

18.7

0.60
0.51

13.0

0.44 13.4

23.2

20.2

9.8

7.5

10.7
0.32

0.27

0.26

4.6

3.5

5.3

4.6 3.7

0.12

0.6

Other
(11 countries)

Taiwan

Korea

India

China

Central/Eastern Europe

Japan

Middle East &Africa(17 countries)

Other(15 countries)

TurkeyWestern Europe

RussiaOther(11 countries)

Italy

United Kingdom

FranceGermanyOther(8 countries)

BrazilUSA

North/Latin America

1.6 0.12

Asia / Oceania◆Source : Fitch Solutions “Worldwide Medical Devices Market Fact Book April 2023 “

Page

55

Forecasts in this document are based on information and data available
at the time of release as well as on assumptions concerning uncertain
factors that might affect the company’s future business performance.
Depending on various factors, actual business performance could
differ substantially from the forecasts contained in this document.

SHOFU INC.

11 Kamitakamatsu-cho, Fukuine,
Higashiyama-ku, Kyoto 605-0983, Japan
URL: http://www.shofu.co.jp
E-mail: ir@shofu.co.jp
Contact: Corporate Planning Department
Page

56

Page

57