Briefing Material
for the year ended Dec. 31, 2022
Feb. 9, 2023
NAKANISHI INC.

Disclaimer
T h e i n f or m at i on p r e s en t ed i n t h es e m at er i al s c o n t ai n s fo r w a r d - l o o k i n g s t at e m en t s ab o u t fu t u r ebusiness performance. These statements by definition involve risks and uncertainties and are not intended to guarantee
future performance. Actual results in the future may differ from expectations and the projections presented in thesematerials due to changes in the global economy and fluctuations in foreign currency exchange rates and so on. NSChanges in reporting segments
Key changes

1. “Surgical Business” was separated from the previous reporting segment “Dental Products” andindividually established
2. Abolition of the previous reporting segment “Others (mainly included repair services)”, which will beincluded in each new reporting segments

Previous reporting segments

New reporting segments
RenameDental Products

Dental BusinessSeparate

Surgical Business

RenameIndustrial Products

Industrial Business

OthersAbolition© 2023 NAKANISHI INC.

＊Starting from FY2022 Q1Development, production and sales ofwide range of dental equipment, which
cover such as restorative dentistry,
periodontics, mobile dental care, oral
surgery etc.
Development, production and sales ofbone grinding and cutting drills which canbe used in areas of neurosurgery, spine
surgery and orthopedic surgery.

Development, production and sales ofmotors and spindles which can be used inhigh-precision processes in wide range ofindustrial areas such as automobile,
aircraft, precision parts industries.

2Product lineup

DentalBusiness
Dental hand pieceOral surgery system

Oral hygiene system

ConsoleSlim motor

Attachment

Controller

SpindleMicro grinder

Clinical micromotor

SurgicalBusinessBur

IndustrialBusiness© 2023 NAKANISHI INC.

Ultrasonic grinder3

Consolidated financial result for FY2022

4

Performance highlights of FY2022● Achieved record-high performance for the past two consecutive years by capturingstrong global demand. Maintained the same performance level as the previous fiscal
year, even excluding the boosted effect of the depreciation of Japanese yen.
● Due to the successful parts purchasing and design changes, we could minimize impact
on production. Promoted precision parts production and productivity improvement
measures at new factory “A1 +”.
● Parts prices remained high while quantitative shortages eased toward the end of thefiscal year. Delivery dates are prolonged due to slow digestion of backlog of orders,exposing the competitive risk.

© 2023 NAKANISHI INC.

5

Consolidated P/L
M of JPY

FY2022

FY2021YoY Comparison

FY2022 Forecast

ActualActualAmountRatio

Upward revisionon Nov. 11Net sales

48,67144,857+3,813+8.5 %

48,588+0.2 %Gross profit

31,221

27,295+3,926+14.4 %

30,942+0.9 %

64.1 %

60.8 %+3.3 pt—

15,38913,750+1,638+11.9 %

31.6 %

30.7 %+1.0 pt—

17,646

13,951+3,694+26.5 %

36.3 %

31.1 %+5.2 pt—

12,471

10,102+2,368+23.4 %

Ratio to net sales

25.6 %

22.5 %+3.1 pt—

25.9 %—（JPY）

145.48116.73——146.47ー- Against the US dollar（JPY）

130.77109.84+20.93－124.00+6.77- Against the EURO（JPY）

137.90130.08+7.82－

131.00+6.90Ratio to net sales

Operating profit
Ratio to net sales

Ordinary profit
Ratio to net sales

Profit attributable toowners of parent

EPS

63.7 %

14,91830.7 %

18,02437.1 %

12,573

vs. Forecast—+3.2 %—

-2.1 %—-0.8 %

Currency rate

・Forex impact :Net sales +3,342M of JPY （vs FY2021 Actual), +1,629M of JPY（vs FY2022 Forecast）

・Forex sensitivity :Fluctuation in annual net sales due to the depreciation of the yen (per one yen)
Against USD: Increase of 90M of JPY
Against EURO: Increase of 78M of JPY© 2023 NAKANISHI INC.

6

Transition of earnings structure
M of JPY

Composition ratio

Amount60,000[ Net sales ][ Net sales ]50,00044,857[ COGS ]48,671

17,56244,857

48,671
COGS%
YoY

100%

+3,813+8.5%

17,44940,000Net sales
YoY-3.3 pt90%

Excluding the forex impact,
net sales increased slightly
year on year80%

[ COGS% ]

39.2%

35.9%

30.2%

32.5%

Costs of overseas sales
were decreased due to thedepreciation of yen

70%

60%
30,00050%[ SGA ]
20,00013,544

15,832[ SGA% ]
40%OP
YoY

SGA%
YoY

30%

+1,63810,000[ OP ]

13,75015,3890

FY2021
ActualFY2022
Actual+2.3 pt+11.9%

20%

Increase of SGA wasoffset by increase ofgross profit led by thedepreciation of yen[ OP margin ]© 2023 NAKANISHI INC.

30.7%

31.6%

FY2021
ActualFY2022
Actual

10%0%

Global marketing
activities went back to
the level of before theCOVID-19 pandemic

7

Change in net sales by business segment
M of JPY+ 3,813

24,000+ 8.5%
22,000+398
20,00044,857+2,669

Surgical+14.4%+745

48,671

FY2021
ActualFY2022
ActualChangeDental

38,25740,926+7.0 %

Surgical

2,761

3,160

+14.4 %

Industrial

3,839

4,584

+19.4 %

44,857

48,671+8.5 %

Industrial+19.4%

18,000Dental+7.0%
16,00014,000Total

12,000Forex impact+ 3,342 M of JPY（+7.5%）

10,000

FY2021
ActualFY2022
Actual© 2023 NAKANISHI INC.

8Change in operating profit by segment
M of JPY+ 1,638

7,300

+268
Surgical+20.6%

6,800+305-402

Industrial+22.2%

Corporate
expenses

15,389

+1,4676,300

5,800FY2021
ActualFY2022
ActualChangeDental

15,556

17,024+9.4 %Surgical

1,303

1,571+20.6 %Industrial

1,377

1,683+22.2 %Corporate
expenses-4,487-4,890－

Total

13,75015,389+11.9 %

+ 11.9%7,800

13,750Dental
+9.4%

5,300

4,800

4,300

3,800

Forex impact+2,565 M of JPY（+18.7%）

3,300

FY2021
ActualFY2022
Actual© 2023 NAKANISHI INC.

9

Change in operating profit
Exchange rate

M of JPY

FY2021
Average+ 1,638

USD

JPY 109.84→

JPY 130.77

EURO

JPY 130.08→

JPY 137.90+ 11.9%8,000

FY2022Average

15,3897,000

6,00013,750+ 286
Increasein demand

5,000+ 297-378

Product mix-199

Increase in
Increase inselling expenses
personnelexpenses

4,000+ 2,565-933
Increase inForex impact
other expenses

3,000

2,000

1,000

Based on forex as of FY2021

0

FY2021
ActualFY2022
Actual© 2023 NAKANISHI INC.

10

OP profit and profit attributable to owners of parent
M of JPY

15,389Operating profit

Non-operating profit

2,629

Non-operating expenses

372

Ordinary profit

17,646Extraordinary income70419Extraordinary losses

17,297

Profit before income taxes

Non-operating
profit・Dividends income
・Equity in earnings of affiliates
・Foreign exchange gain

638
812
610

Non-operating
expenses・ Loss on investments inmoney held in trust

282

Extraordinary
income・ Gain on sales of non-current assets

70

Extraordinary
losses・ Impairment losses

374

4,823

Total income taxes

12,471

Profit attributable to owners of parent
300

2,300

4,300

6,300

8,300

10,300© 2023 NAKANISHI INC.

12,30011

Consolidated balance sheet
M of JPY

As of Dec. 31,2022

As of Dec. 31,2021

Change102,154

94,460+7,69334,992
6,106
16,28435,984
5,348
11,733-991+757+4,551

11,131

11,541-409

・Account payable - trade
・Income taxes payable
・Other current liabilities

+526
+234
-1,604480

100+380

・Long-term borrowings+358

91,022

82,919+8,10393,62884,765+8,863Return on equity (ROE)

14.4 %

12.7 %+1.7 pt

Return on assets (ROA)

18.0 %

15.8 %+2.2 pt

FY2022
ActualFY2021
ActualChangeCapital investments

4,058

2,415+1,642

Depreciation expenses2,049

1,807+241

Total assets- Cash and deposits- Notes and accounts receivable - trade- Inventories

Liabilities- Loans payable

Net assets- Retained earnings© 2023 NAKANISHI INC.

Note・Buildings and structures+2,680・Merchandise and finished goods +1,344
・Work in process+1,512・Raw materials and supplies+1,694・Treasury shares-2,500・Foreign currency translation reserve+2,131

Note
・New factory “A1+”・Information system

1,469
276

12

Consolidated statements of cash flows
M of JPY
25,000Ca sh flows fromoperating activities

23,000Ca sh flows frominvesting activities

Ca sh flows fromfinancing activities

Effect of exchange
rate change

21,000-6,31419,000+7,76417,00015,00034,887

13,000Purchase of non-current
assets-3,984
Profit before
income taxes+17,297

Depreciation+2,049

Income taxes paid -5,328

11,000

Increasein inventories

Purchase of investments
in subsidiaries resulting
in change in scope ofConsolidation-3,606

31,648+1,418-3,6659,000

Free cash flows-1,4507,000-6,107

Dividends paid

-3,607Purchase oftreasury shares-2,5005,000

Cash and cash equivalents at
beginning of period2022/01

Cash and cash equivalents at
end of period2022/12© 2023 NAKANISHI INC.

13

Consolidated financial forecast
for FY2023

14

Consolidated financial forecast for FY2023
M of JPY

FY2023

FY2022

Forecast

ActualNet sales

52,272

48,671+3,601+7.4 %

Gross profit

33,96531,221+2,743+8.8 %

65.0 %

64.1 %+0.8 pt—

15,07015,389-318-2.1 %

28.8 %

31.6 %-2.8 pt—

15,836

17,646-1,810-10.3 %

30.3 %

36.3 %-6.0 pt—

10,976

12,471-1,494-12.0 %

21.0 %

25.6 %-4.6 pt—

128.91145.48——

Capital investments

5,750

4,058+1,692—

Depreciation expenses

2,221

2,049+172—

Ratio to net sales

Operating profit
Ratio to net sales

Ordinary profit
Ratio to net sales

Profit attributableto owners of parent
Ratio to net sales

EPS(JPY)

ChangeAmount

Ratio

Note

New factory “M1”, etc.

Currency rate
- Against the US dollar（JPY）

125.00130.77-5.77—

Forex sensitivity: 94Mof JPY- Against the EURO（JPY）

135.00137.90-2.90—

Forex sensitivity: 98Mof JPY© 2023 NAKANISHI INC.

15

Consolidated financial forecast for FY2023
Change in net sales by business segment
M of JPY+ 3,601+ 7.4%

15,00014,000+2,357

FY2023
Forecast

ChangeDental

40,92643,516+6.3 %

Surgical

3,160

3,137

-0.7 %

Industrial

4,584

6,942

+51.4 %−-1,324-2.7 %48,671

52,272+7.4 %

52,272-22

13,000Surgical Industrial

12,000+2,59011,00010,000-1,324

FY2022
Actual-0.7%+51.4%

48,671
Dental

9,000

+6.3%
Forex
impact8,000

7,0006,000

Total

5,000

FY2022
ActualFY2023
Forecast© 2023 NAKANISHI INC.

16

Consolidated financial forecast for FY2023
Change in operating profit
Exchange rate

M of JPY

FY2022
Actual- 318
11,000USD

JPY 130.77→

JPY 125.00

EURO

JPY 137.90→

JPY 135.00- 2.1%

10,000

9,000

8,000

7,000

FY2023
Forecast+ 908-890

Product mix

Increase in
selling expenses-2,104+ 3,159

15,389
Increasein demand

6,000-426
Increase inpersonnel
expenses

Increase inother expenses-966

15,070Forex impact

5,000

4,000

3,000

Based on forex as of FY2022
2,000

FY2022
ActualFY2023
Forecast© 2023 NAKANISHI INC.

17