Presentation Materials
for the year ended Dec. 31, 2020Feb. 26, 2021
NAKANISHI INC.

Disclaimer
The information presented in these materials contains forward-looking statements about futurebusiness performance. These statements by definition involve risks and uncertainties and are
not intended to guarantee future performance. Actual results in the future may differ fromexpectations and the projections presented in these materials due to changes in the global
economy and fluctuations in foreign currency exchange rates and so on. NSKNSKNSKNSKNSKContents

Consolidated Financial Results for FY2020

3

Consolidated Financial Forecast for FY2021

11

Overviews of Each Segment and Future Initiative

16© 2021 NAKANISHI INC.

2

FY2020
Consolidated Financial Results© 2021 NAKANISHI INC.

3

Consolidated Performance
FY2020
Actual

FY2019ActualFY2020
Forecast

Ratio to the
Forecast

Net Sales

33,05535,418-6.7 %

31,059+6.4 %

Gross Profits

19,731

21,762-9.3 %

18,370+7.4 %

59.7 %

61.4 %-1.7 pt

59.1 %+0.6 Pt

8,542

9,299

-8.1 %

7,208+18.5 %

25.8 %

26.3 %-0.5 pt

23.2 %+2.6 Pt

8,627

9,841

-12.3 %

7,475

+15.4 %

Ratio to net sales

26.1 %

27.8 %-1.7 pt

24.1 %+2.0 Pt

Profit Attributable to Owners

6,455

7,102

-9.1 %

5,879+9.8 %

Ratio to net sales

19.5 %

20.1 %-0.6 pt

18.9 %+0.6 Pt

(JPY)

74.49

81.97

Against the US dollar

JPY

106.67109.37-2.70

105.00+1.67

Against the EUROJPY

122.01122.53-0.52

115.00+7.01

M of JPY

Ratio to net sales

Operating Income
Ratio to net sales

Ordinary Incomeof Parents

EPS

YoY
Comparison

Upward revisionon Nov. 6

67.85

Currency Rate

Forex impact:

Net sales -491M of JPY

vs FY2019 Actual , +590M of JPY

vs FY2020 Forecast

Forex sensibility: Fluctuations in annual sales due to the depreciation of the yen (per one yen)
Against USD: Increase of 58M of JPY
Against EURO: Increase of 66M of JPY© 2021 NAKANISHI INC.

4

Change in net sales by business segment
M of JPY

Net sales by business segment

35,418-1,138
Dental
-3.7%

-622

-110

Industrial
Others-18.4%-7.8%-491

33,055Forex
impact

FY2019FY2020

ActualActualChangeDental30,622

29,484-1,138Industrial

3,381

2,758

-622

Others

1,414

1,304

-110

-491

-491

33,055-2,363Forex
impactBased on forex as of FY 2019

FY2019Net sales

Total

35,418FY2020Net sales© 2021 NAKANISHI INC.

5

Dental segment ; Change in net sales by region
M of JPY

Net sales of Dental segment by region+774

30,622

ActualFY2020
ActualChangeEurope

9,741

9,570

-170

Japan

5,960

6,735

+774

North
America

5,510

4,277

-1,233

Asia

4,364

4,233

-131

Others

5,044

4,667

-377

-458

-458

29,025-1,596FY2019-1,233-170
Europe Japan
-1.8% +13.0%-131

N.America-22.4%

Asia
-3.0%

-377
Others-7.5%-458

29,025Forex
impactForex
impactBased on forex as of FY 2019

FY2019Dental
Net
sales

Total

30,622

FY2020DentalNet
sales© 2021 NAKANISHI INC.

6

Industrial segment ; Change in net sales by region
M of JPY

Net sales of Industrial segment by region

3,381

FY2019ActualFY2020
ActualChange

Japan

1,192

958

-234

North
America

891

722

-168

Asia

690

684

-5

Europe

601

387

-213

Others

5

6

+0

-17

-17

2,740

-640

-234
Japan

-168

-5

-19.7%
N.America Asia
-18.9%

-0.9%

-213

+0

2,740

-17

Europe Others Forex
impact-35.6%

Forex
impactBased on forex as of FY 2019

FY2019Industrial
Net sales

Total

3,381

FY2020Industrial
Net sales© 2021 NAKANISHI INC.

7

Change in operating income
M of JPY<Exchange rate>
Average of FY2019

Average of FY2020

USD : 109.37JPY → 106.67JPY
EURO : 122.53JPY → 122.01JPY

9,299-1,150Decreasein demand

+12

-290
Product
mix

+609

+454

Decrease Decreasein personal in otherexpenses expenses

-394

8,542

Forex
impactDecreasein selling
expenses

Based on forex as of FY2019

FY2019OP income

FY2020OP income© 2021 NAKANISHI INC.

8

Consolidated Balance Sheet
As of
Dec. 31, 2020

As ofDec. 31, 2019

Change82,47077,536+4,933

5,158

5,184

-26

- Inventories

10,604

10,538+66

Liabilities

6,198

5,037

+1,161

100

100

Net Assets

76,272

72,499+3,772- Retained earnings

77,43573,666+3,768Return on Equity

8.7 %10.2 %-1.5 Pt

Return on Assets

10.8 %

13.1 %-2.3 Pt

FY2020
Actual

FY2019ActualChangeCapital Investments

1,163

1,534

-371

Depreciation
Expenses

1,759

1,684

+74

M of JPY

Total Assets- Notes and accounts
receivable-trade- Loans payable© 2021 NAKANISHI INC.

Note
Cash and deposits
Shares of subsidiaries and associates
Investment securities+3,806+2,805-2,000

Income taxes payable+1,187Note

9

FY2020 Net sales figure
M of JPY

DentalJapan

Export
sub total

EuropeNorth
America

Asia

OthersTotal

FY2019 Actual

5,960

24,661

9,741

5,510

4,364

5,044

30,622

FY2020 Actual

6,735

22,289

9,519

4,183

4,147

4,440

29,025

Amount+774-2,371-222-1,327-217-604-1,596

Ratio+13.0%

-9.6%

-2.3%

-24.1%-5.0%-12.0%-5.2%

FY2019 Actual

1,192

2,188

601

891

690

5

3,381

FY2020 Actual

958

1,782

387

704

684

6

2,740

Amount

-234

-406

-213

-186

-5

+0

-640

Ratio

-19.7%-18.6%-35.6%-20.9%

-0.9%

+2.7%

-19.0%FY2019 Actual

826

588

180

250

142

15

1,414

FY2020 Actual

791

497

155

202

124

16

1,289

Amount

-34

-90

-25

-48

-18

+0

-125

Ratio

-4.2%

-15.4%-14.0%-19.3%-12.8%

+5.4%

-8.9%

FY2019 Actual

7,979

27,438

10,522

6,652

5,197

5,065

35,418FY2020 Actual

8,485

24,56910,061

5,090

4,955

4,462

33,055

Amount+505-2,868-461-1,561-241-603-2,363

Ratio

+6.3%

-10.5%-4.4%-23.5%-4.7%-11.9%-6.7%

YoY

Industrial

YoY

Others

YoY

Total(Including forex impact

YoY© 2021 NAKANISHI INC.

10

Consolidated Financial Forecast
for FY2021© 2021 NAKANISHI INC.

11

Consolidated Financial Forecast for FY2021
FY2021

FY2020

Forecast

ActualNet Sales

35,10033,055+6.2 %

Gross Profits

21,033

19,731+6.6 %

59.9 %

59.7 %+0.2 Pt

8,546

8,542

+0.1 %

24.3 %

25.8 %-1.4 Pt

8,879

8,627

+2.9 %

25.3 %

26.1 %-0.8 Pt

6,450

6,455

-0.1 %

Ratio to net sales

18.4 %

19.5 %-1.1 Pt

(JPY)

74.45

74.49

Capital Investments

2,250

1,163

+1,087

Depreciation Expenses

1,781

1,759

+22

M of JPY

Ratio to net sales

Operating Income
Ratio to net sales

Ordinary Income
Ratio to net sales

Profit Attributable to Ownersof Parents
EPS

ChangeNote

Machinery and equipment
IT Related

+650
+360

Assumed Currency Rate
Against the US dollar

JPY

100.00106.67-6.67

Forex sensibility: Annual net sales
73M of JPY/JPY.

Against the EUROJPY

120.00122.01-2.01

Forex sensibility: Annual net sales
66M of JPY/JPY.

© 2021 NAKANISHI INC.

12

Change in net sales by business segment
M of JPY
+180

+586

Others
+14.0%

Industrial+21.4%-805

35,100Forex
impact+2,08433,055
Dental+7.2%

Based on forex as of FY2020

FY2020Net sales
ActualNet sales by business segment
FY2020
ActualFY2021
Forecast

ChangeDental

29,025

31,109+2,084

Industrial

2,740

3,327

+586

Others

1,289

1,469

+180

Forex
impact

-

-805

-805

33,05535,100+2,044Total
FY2021
Net sales
Forecast© 2021 NAKANISHI INC.

13

Change in operating income
M of JPY< Exchange rate >FY2020 Actual

USD :FY2021 Forecast

106.67JPY → 100.00JPY

EURO : 122.01JPY → 120.00JPY+367
Product
mix+1,702

8,542-696
Increasein selling
expenses-429
Increasein personal
expenses

Increasein demand-294
Increasein otherexpenses

-645

8,546

Forex
impactBased on forex as of FY2020

FY2020 OP
IncomeActualFY2021 OP
IncomeForecast© 2021 NAKANISHI INC.

14

Transition of Dividends and Dividends Forecast for FY2021

FY2021
Annual Dividends Forecast:
30JPY per share
Interim dividends

Year-end dividends

Special dividends

30JPY

After adjustment of stock split

15

16

15

15
Forecast

13

14

15

15
Forecast

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

EPS (JPY)

51.96

48.42

53.61

79.33

71.22

61.15

84.75

87.59

81.97

74.49

74.45

Payout ratio (%)

12.8

13.8

14.9

21.0

21.1

32.7

30.7

35.4

36.6

40.3

40.3

© 2021 NAKANISHI INC.

15

Overviews of Each Segment
and Future Initiative© 2021 NAKANISHI INC.

16

History of Consolidated Net Sales
Sharp increase indemand of contraangles in European
market.

Increased demand in Japan due to subsidies
for infection control measures.
Increased demand in the whole world by
enforced measures for infections.

Dental practice wassuspended or performed
with limitation in mostcountries except Japan.

Q1

Q2

Q3

Q4

7.29 B JPY

6.39 B JPY

8.59 B JPY

10.77 B JPY

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

*The market shrank drastically and hit the bottom during Q2 due to lockdown
measures in various cities all over the world.
*Rebound demand and demands relating infection prevention were seen during
Q3, and special demand for sterilizers and handpieces was generated inJapan due to the governmental subsidies for infection control measures.
© 2021 NAKANISHI INC.

17

Business trends in the COVID-19 pandemic

Rise of needs for infection prevention
It became natural for dental clinics to consider taking infection prevention
measures is a “MUST" thing, and perform sterilization for each treatment.
This has led to special demand for sterilizers and additional handpieces all over
the world.

Trend in market share
Achieved obtaining more our customers' trust by not stopping our business operation
including Q2, when lockdown measures were taken in various cities all over the world.
We have kept providing information and taking prompt measures.
Market share of our products was increased by capturing majority of rebound demand which
was generated after lockdowns as well as acquiring big business negotiation which had
been occupied by other companies.

© 2021 NAKANISHI INC.

18

Mid term Management Plan “NV2025” - Progress of FY2020
Mid term management plan “NV2025” (6YearsPlan;FY2020~2025) is being
carried out in order to realize our Long-term vision“To be The Leading Excellent Global Medical Device Company”

Progress of FY2020

Mid term management plan “NV 2025”

1. Decreased s ales and profits affected by the
COVID-19 pandemic

Basic policy and priority measures

2. Profits have increas ed cons iderably in Chinese
market1. Strategic expansion in Dental
global market

3. Increased market s hare of our own brand in the
U.S. market

2. Growing new business forcustomer needs in super
population ageing

4.

3. Establish infrastructure for speedy
product development and leading
cost competitivenessProfit objectives for FY2025

50billion JPY
28

Launched new products in Dental, Medical, andIndus trial areas

5. Res ponded to s harp increas e in demand byincreasing production in the s econd half of theyear

Due to the rapid recovery in 4Q, range of
decrease of sales and profits was considerably
suppressed than it had been expected.
Achieved a significant increase in market sharein Japan, Europe, and the U.S. etc.

© 2021 NAKANISHI INC.

19

Basic strategy of FY2021

Forecast of market trend in 2021➊
Demands for infection
prevention measurescontinue worldwide

Demands relating to implantand preventive dentistry
will recover rapidly

B a si c s t rate gy of F Y 2 0 2 1
Expand sales of main
product handpieces
and sterilizers

Expand sales of
preventive dentistry
products and implant
treatment devices

New Product:

New Product:

M micro turbine
iClave mini2© 2021 NAKANISHI INC.

Surgic Pro2

20

Dental Business Market Status 1/3

Overview of FY2020
Net sales

9.51
EuropeYoY-2.3

Sales halved due to sharp
decrease in OEM business.

Net sales

Demands for sterilizers andadditional handpieces weregenerated rapidly due tothe governmental subsidies for
infection control
measures.

6.73B JPYJapan

Captured rebound demand
which was generated after the
lockdowns from April to May.
Sales of local subsidiaries
exceeded the previous year's.

YoY+13.0%

Launched new sterilizer“iClave mini2” on October 1st.
Sales increased significantly
capturing demand for infection
control.
© 2021 NAKANISHI INC.

Measures for FY2021
Marketoutlook

Promote sales ofhandpieces and products
for re-process (disinfection
and sterilization), focusing
on infection prevention
measures.
Launch and promote a new
implant related product“Surgic Pro2”.

MarketoutlookA reactional decline indemand is assumed afterending the governmental
subsidies.
Promote sales of“iClave mini2”, which has
been highly evaluated in themarket, and “S-Max M
micro”.

21

Dental Business Market Status 2/3

Overview of FY2020
Net sales
North
America

4.18
YoY

-24.1

Net sales

4.14B JPY
Asia

YoY

-5.0%

Sales decreased comparing to theprevious year although the sales of
local subsidiary recovered from thesecond half of the year.

Measures for FY2021
Marketoutlook

There was rapid increase in ourmarket share while others’ sharedecreased.

Aim for further expansion inmarket share of our brand byenhancing collaboration withDCI International (located in
Oregon in the U.S.).

Sales decreased more than 30% of
the previous year due to slow
recovery in OEM business.

Sales increased more than 30% of
the previous year due to smoothtransition for direct sales system by
Chinese subsidiary.
Sales to Asian markets where theeffects of the COVID-19 pandemic
remain moved slow.

© 2021 NAKANISHI INC.

Capture demand of shiftingfrom air turbines to theelectric motors at most.

MarketoutlookFurther enhancements ofthe sales system of Chinese
subsidiary, and promote
developing and expanding
the distributor networks.

Promote sales expansion ofhandpieces and implant
related products looking
ahead to a post-COVID-19
pandemic future.

22

Dental Business Market Status 3/3

Overview of FY2020
MiddleEast

Sales remained low due tospread of the COVID-19
pandemic.

South
Net sales
America

Sales decreased significantly
due to unstoppable spread of
the COVID-19 pandemic.

4.44

YoY

RussiaAustralia-12.0

Sales increased by capturing
rebound demand after
lockdown.
Sales decreased in the firsthalf of the year due tolockdown, but recovered
greatly in Q4.
© 2021 NAKANISHI INC.

Measures for FY2021
Marketoutlook

Promote sales of main
product handpieces andimplant related
products.

Marketoutlook

Promote sales of main
product handpieces andimplant related
products.

Marketoutlook

Solidify the No. 1 share in
the region by localizing
Moscow office andenhancing after-sales
service.

MarketoutlookCapture increased demandof sterilizers and additional
handpieces for infection
control measures.

23

New Product "iClave mini2” - Launch in Oct. 2020 Japanese Market
Autoclave sterilizer

iClave mini2
There was a rapid demand increase forautoclave sterilizer due to the subsidies for
infection prevention measures by thegovernment.

More than 1,000 units have been sold so far.
Receiving favorable feedbacks for its small
body size specialized in handpieces andshort time required for sterilization.

Realizing sterilization power by thegravity displacement autoclave
Maximum capacity of 12 pieces
Adopted LCD panel for the better
visibility and operability.
Improved in safety and useful function© 2021 NAKANISHI INC.

24

New Product "S-Max M micro” - Launch in Nov. 2020 Japanese Market
Dental handpiece (Air Turbine)

S-Max M micro
Mini head and high power

Quick stop function

New product from our middle-range“S-Max M Series”.
Realized high power of 20W(the highest in this class)in mini-head of φ9mm.
Sought maximum usability based on
opinions from dentists.
Re-analyzed inner structure andreduced the number of components
used, which enabled higher costcompetitiveness.

Easily maintained

Mini head and high power
Quick stop function
Cartridges can easily be changed by dentists

Clean head system

Equipped with NSK original clean head system© 2021 NAKANISHI INC.

25

New Product "Surgic Pro2” - Launch in Feb. 2021 European Market
Oral Surgery micromotor system

Surgic Pro2

This is the second generation of ourflagship product “Surgic Pro”,
which dominates the top share in theworld.
Implant market has been recovering
sharply, and it is planned to be marketedin the world market followed by
European market.
Advanced design and higher operability

Lighter and smaller micro-motor
Wireless extensibility

Bluetooth-Foot control that helps user focusing on the treatment-

Osseointegration Monitoring Device
Osseo 100 +-Ultrasonic bone surgery system
Vario Surg3

-

iPads
Traceability data management of procedural details© 2021 NAKANISHI INC.

26

Industrial Business Outline
Overview of FY2020
Sales remained low except Asia (China) due to the COVID-19 pandemic
Sales decreased significantly in Japanese market. Although some recovery were seen
towards the end of the FY, most were shifted to the next year.
Sales decreased in Europe due to lockdown measures. Although some recovery wereseen during the second half of the FY, that was not enough to offset.

Chinese market remained firm due to 5G related investments, and supported sales
decreases of the other Asian countries.

Measures for FY2021
Capture demand from manufacturing industry like car industry, since it
has been recovering sharply.
In response to the "automation / labor saving" needs of production lines, we team up
with system integrators to promote application cases (customer development andhorizontal deployment).
New products:“Sheenus ZERO”“NR33-6000ATC-ESD”

Starting up well. Promote marketing to the U.S. and European markets.
Accelerate promotion activities of spindle to 5G related projects.

© 2021 NAKANISHI INC.

27

Industrial Business New Products*Conducting material is used forthe tip of the spindle*High-speed spindle that realizes
antistatic of static electricity
This product can prevent PCB from getting
damaged by static electricity and can help
improve yield in production when it is usedin production of PCB (split process), mostof which are equipped to electronics.
Demand increase in 5G related area is expected.

*Realized lighter and energy saving
compared to conventional product*Improved visibility and usability
with advanced design
Wide range of processes such as grinding,polishing, and mirror finishing etc. in productionof molds (from aluminum molds to carbide molds)
can be achieved by this unit.

© 2021 NAKANISHI INC.

28

Medical Business Outline

Medical business is included in Dental segment

Overview of FY2020
Sales struggled due to the influence of the COVID-19 pandemic, with which
the number of surgeries around the world has decreased
Japan

Sales remained still by promoting digital marketing under the circumstances of activity
restrictions.

EuropeSales increased by great increase in sales of new product “P300 Attachment Series”.

N. America

Sales decreased due to the large impact of the decrease in the number of surgeries
although sales to general surgery hospitals increased.

Asia

Sales decreased struggling in India and Asian countries although some recovery were seenin Chinese market.

Measures for FY2021
Aim for business recovery mainly with marketing of new products although
the influence of the COVID-19 pandemic remains
Japan

Strengthen relationship with current customers, cultivate new field of medical care,and promote digital marketing.

EuropeFocus on acquiring new large project through enhancement of communication with local
distributors.

N. America

Launch of new product “P300 Attachment Series” and follow up of main customers.

Asia

Enhance distributor network in Chinese market, promote collaboration with KOL, anddevelop Indian market.
© 2021 NAKANISHI INC.

29

Medical Business New Product
P300 Attachment Series

Slim Attachment 300

Electric bone cutting device thatcan be used in neuro, orthopedic
surgeries etc.

Kept rotational stability, which is highly evaluated, of bone cutting drill.
Added functions that contribute improving visibility, operability and safety.

Added attachment lineup that is useful for “Minimal Invasive Surgery”
like endoscopic surgery etc.
Business opportunity was expanded especially due to improved
compatibility to the spinal endoscopy field.

Improved visibility

Improved operability

Improved safety

Visibility is improved with thetapered tip and variable exposure
lengths.

Straight attachment, which enables
surgeons to access a narrow space bysingle rotation, was added to the
product lineup.

Two types of Guards can slide onto theattachment to prevent dragging
surrounding tissue during operation.

Exposure length:

17mm

Exposure length:

11mm© 2021 NAKANISHI INC.

30