Mid Term Management Plan
Rolling Plan

NV2025+
August 9, 2022
NAKANISHI INC.

Disclaimer
The information presented in these materials contains forward-looking statements
about future business performance. These statements by definition involve risks anduncertainties and are not intended to guarantee future performance. Actual results inthe 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.

© 2022 NAKANISHI INC.

Background of Formulation of Rolling Plan NV2025+
Global share increasing further since the COVID-19 outbreakatest performance results are above plans
Yen weakening against almost all transaction currencies
ignificant changes to performance target assumptions

Mid Term Management Plan Rolling Plan

NV2025+
1. No changes to the policy and strategy set out in the previous plan
NV2025
2. Sales and profit targets updated based on latest performance results
and exchange rates
3. Established new KPIs such as ROE and cash allocation© 2022 NAKANISHI INC.

2NoChange

Surgical“Medical” was replaced with “Surgical” in accordance with reporting segment change as of FY2022 Q1.

© 2022 NAKANISHI INC.

3

NoChange“Medical” was replaced with “Surgical” in accordance with reporting segment change as of FY2022 Q1.

© 2022 NAKANISHI INC.

4

NoChange© 2022 NAKANISHI INC.

5

NV2025 Conditions

No
ChangeDental /Surgical

Dental and Surgical“Medical” was replaced with “Surgical” in accordance with reporting segment change as of FY2022 Q1.

© 2022 NAKANISHI INC.

6

NV2025

No
ChangeSurgical“Medical” was replaced with “Surgical” in accordance with reporting segment change as of FY2022 Q1.

© 2022 NAKANISHI INC.

7

Ke y a r e a s i n D e n t a l b u s i n e s s© 2022 NAKANISHI INC.

NoChange8

Product strategy in Handpiece© 2022 NAKANISHI INC.

NoChange9

Product strategy in Implant related© 2022 NAKANISHI INC.

NoChange10

Product strategy in Oral Hygiene© 2022 NAKANISHI INC.

No
Change11

Portfolio expansion in Surgical business“Medical” was replaced with “Surgical” in accordance with reporting segment change as of FY2022 Q1.

© 2022 NAKANISHI INC.

No
Change12

Portfolio strategy in Industrial business© 2022 NAKANISHI INC.

NoChange13

Global R&D/Production Location
NSK Dental Nordic (formerlyNSK Dental Italy (formerly Dental X)

Product development for Osseointegration measuring device

Development and production forautoclaves (high-pressure steamsterilizers)IDS)

NSK Dental Nordic

NSK Dental Italy( Integration Diagnostics Sweden )( Dental X )NAKANISHI INC. Headquarters and Plants (RD1, A1, A1+, M1)
Products based on NAKANISHI’s core technologies (ultra
high-speed rotating technology, ultrasonic technology, andultra precise micromotor technology) are all developed andmanufactured in KANUMA

R&D Center RD1 in Headquarters© 2022 NAKANISHI INC.

Parts processing plants A1 and A1+(under construction)

Assembly plant M1 (underconstruction)

14

R&D / Production Base for Mid / Long term growth© 2022 NAKANISHI INC.

NoChange15

New Production Bases for Mid/Long Term Growth

A1+ New parts processing plant
New plant

A1To transform production operations to ones able to effectively meet globally
growing product demand, aim to increase “parts processing” capacitythat was previously a bottleneck
Location: 990 Fukahodo, Kanuma, Tochigi (on the premises of the A1 plant)
Total floor area: Approx. 5,500 m2
Investment: Approx. 1.8 billion yen
Construction: Began construction in Nov. 2021; scheduled for completion in Aug. 2022

M1 New assembly plant and parts and finished goods warehouse
New plant

Determined to construct a new plant to increase capacity for the “assembly process”
following the parts processing process that we are working to expand, andsecure warehouse space to respond to production scale expansion

M1

Location: 700 Shimohinata, Kanuma, Tochigi (in the premises of Headquarters)
Total floor area: Approx. 17,500 m2
Investment: Approx. 6.2 billion yen
Construction: Scheduled to begin construction in Apr. 2023 with completion in Jan. 2024
for phase 1 and Oct. 2024 for phase 2© 2022 NAKANISHI INC.

16

NV2025+ Sales and Profit Target
Net sales: 55.0 B JPY +10% over previous plan
Operating profit: 16.5 B JPY +18% over previous plan
Operating margin: 30% +2pts over previous plan

60.0

Net sales
55.0 B 30.0
JPY

50.0

25.0
Net sales (Left)

44.8

Operating profit (Right)

Operatingprofit
16.5 B
JPY40.0

13.7

30.0

20.0

15.0

20.0

10.0

10.0

5.0

0.0

0.0

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Assumed exchange rates for 2022 to 2025: 1USD=124JPY; 1EURO=131JPY© 2022 NAKANISHI INC.

17

Factor Analysis of Changes to Sales and Profit Targets
Changes to Top Line

Changes to Profit Structure

Revised exchange rate assumptions on which to base sales target
Reflected market growth realized after the COVID-19 outbreak
Reflected the effects of delays in new product development

No significant changes to profit structure (composition)
Reflected the effects of sales increases and weaker yen* As we have prioritized measures to meet Medical Device Regulations (MDR) as well
as design changes and other initiatives to prevent production disruptions due to parts
supply shortages, new product development has been delayed.
[Net sales]+5.0 B JPY (+10%)

140

100%

44.8 B
JPY

50.0 BJPY

55.0 B
JPY

39%

40%

38%

30%

32%

32%

31%

28%

30%

ActualFY2021

Previous plan
NV2025

Rolling Plan
NV2025+90%
120+4.0100

55.0[Cost of sales] 80%
70%

Delayednew productlaunches

8060-2.050.0+3.0

60%Marketgrowth after
COVID-19
outbreak50%[Selling, generaland administrative40%
expenses]

30%

Revisedexchangerageassumptions

4020[Operatingprofit]

20%

10%

0%

0Previous plan
NV2025

Rolling Plan
NV2025+© 2022 NAKANISHI INC.

18

Establishment of Additional KPIs
In Rolling Plan NV2025+, in addition to updating the sales and profit target sets in the previous
plan NV2025, we have added a “capital efficiency indicator” and a “cash allocation indicator” tomake our PL, BS, and CFS management policy clearer

Evolve from PL-oriented management to one that also prioritizes
capital efficiency at the same time
Allocate cash by considering the balance of growth investments,
shareholder returns, and resilience to risk
Previous plan

NV2025

Rolling Plan

NV2025+Net sales

50.0 BJPY

Net sales

55.0 BJPY

OperatingprofitOperatingmarginJPY

28 %14.0 B

OperatingprofitOperatingmarginJPY

30

16.5 BROE+© 2022 NAKANISHI INC.

11+

Total payout
ratio

50+

Cash &marketablesecurities tomonthly sales
ratio

1219Financial Strategy
Allocate cash by using cash flows we generate and considering (1) investments
in businesses to achieve sustained growth, (2) enhancement of shareholder
returns, and (3) the balance of resilience to risk and capital efficiency with theaim of further enhancing corporate value
Investments in businesses
to achieve sustained growth

Strategic
investments
Capitalinvestments

Enhancement ofshareholder returns

Achievement of resilience
to both risk and capitalefficiency

Explore and implement strategic investments forstrengthening our core businesses (M&As) toensure sustained growth
Implement capital investments for establishingand maintaining a robust business foundation tocontinue winning in global competition

Dividends

Seek to ensure a steady and continuous increaseof dividends as an essential shareholder returnmeasureTotal payout

Seek to achieve a total payout ratio of 50% as a
mid-term standard by flexibly implementing treasury
stock acquisitions and other measures

Capital efficiency

Seek to achieve, maintain, and exceed ROE of 11%
through appropriate balance sheet management

Cash &marketablesecurities tomonthly sales
ratio

Make the 12-month cash & marketablesecurities to monthly sales ratio a standard tomaintain our resilience to changes in the businessenvironment and clarify our financial discipline© 2022 NAKANISHI INC.

20

Cash Allocation

Cash allocation for FY2021
Cash-inOperatingCF

50.0 B JPY

Cash-out
Capitalinvestments
20.0 B JPY
Strategic
investments
15.0 B JPY
Shareholder
returns

20.0 B JPY
Cash andmarketablesecurities

45.0 B JPY

FY2025

Increase inworking
capital+Cash andmarketablesecurities
40.0 B JPY

Growth investments

Implement capital investments for strengthening a business foundationthat supports our core businesses and carry out strategic investments foraccelerating the growth of our core businesses (M&As) while also
investing in intangible assets for digital transformation (DX) and R&D, etc.,
to enhance our management foundation and thereby establish business
operations that can win in global competition.

Shareholder returns

Make a total payout ratio of 50% our mid-term standard by striving to ensure
a steady and continuous increase of dividends while also agilely
implementing treasury stock acquisitions.

Financial position
Maintain a financial position that enables us to respond to changes in thebusiness environment and secure resilience to risk while balancing these
efforts with capital efficiency. Make the 12-month cash & marketablesecurities to monthly sales ratio our standard and implement disciplined
cash allocation.

© 2022 NAKANISHI INC.

21

Reference: Cash & Marketable Securities to Monthly Sales Ratio—Trend Projections and Benchmarking

Trend projections

Benchmarking

Cash & Marketable Securities to Monthly Sales
Ratio = (Cash + Marketable
Securities)/(Monthly Sales)
Assume that no strategic investments (M&As)
will be implemented
Assume a total payout ratio of 50%

Prepared using information published by listedcompanies
Benchmarked against peer companies with ahigh shareholder equity ratio (medical device
and precision device manufacturers) in termsof the cash & marketable securities to monthly
sales ratio

14.0

20.0

13.0

12.3

12.5

12.2

12.1

11.7

12.0

Cash & marketablesecurities tomonthly sales ratio

17.5
15.0

Our standard:

12.5

12.0 months

10.0

12.8

12.6

12.5

12.0

11.1

7.5

11.0

5.0
2.5

0.0

10.0

2021

2022

2023

2024

Company A(Precisiondevices)2025© 2022 NAKANISHI INC.

Company B NAKANISHI NAKANISHI(Presicion (FY2022 est.) (Standard)
devices)Company C(Medicaldevices)22