Notes for Shareholders
Securities code

7716

Fiscal year

From January 1 to December 31

Annual general meeting ofshareholders

March

Shareholder registration date

Record date for the exercise of voting rights
at the annual general meeting of shareholders
Record date for year-end dividends
Record date for interim dividends

70th Fiscal Year
NAKANISHI INC.
December 31
December 31
June 30

Shareholder registryadministrator and special
account management institution

Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku,
TokyoContact details

2-8-4 Izumi, Suginami-ku, Tokyo
Stock Transfer Agency Business Planning Dept., Sumitomo Mitsui Trust Bank
0120-782-031 (toll-free)

Method of public notice

Public notices are posted on the Company's website. If the Company cannot
publish electronic public notices due to unavoidable circumstances, it will publish
public notices in the Nihon Keizai Shimbun.

Share unit

100 shares

Stock exchange listing

Tokyo Stock Exchange, JASDAQ Standard

Notice• Change of address, request for purchase of fractional shares
Inquire with a securities company where you have your account.
If you do not have an account at any securities company and have opened a
special account, please inquire with Sumitomo Mitsui Trust Bank, which
manages special accounts.
• Payment of accrued dividends
Please inquire with Sumitomo Mitsui Trust Bank, the administrator of theshareholder register.

NAKANISHI INC.

700 Shimohinata, Kanuma, Tochigi 322-8666 TEL +81-289-64-3380 FAX +81-289-62-5636

January 1, 2021 to December 31, 2021

[To Our Shareholders]

I would like to take this opportunity to express my gratitude to our shareholders
for your continued support.

Operating results in FY2021

Both the Dental Products business and Industrial Products business performed
well in FY2021, backed by strong global demand. Net sales stood at JPY 44.8
billion (up 35.7% year on year), exceeding JPY 40.0 billion for the ﬁrst time since
our founding. Operating income, ordinary income, and income attributable toowners of parents all hit record highs.

In FY2021, net sales, operating income, ordinary income,and income attributable to owners of parents all hit
record highs. In the ﬁrst half, net sales rose signiﬁcantly
from a year earlier, when net sales were adversely
affected by COVID-19. Net sales exceeded theyear-earlier level also in the second half due to ﬁrm
overseas markets, although the domestic market
slowed.

Amid the COVID-19 pandemic, dental clinics worldwide stepped up their efforts
against infectious disease. Sterilizing instruments after every treatment has
become commonplace. Demand for dental handpieces picked up worldwide,
reﬂecting the increased frequency of sterilization cycles. This upward trend iscontinuing. As a leading global manufacturer of dental equipment, NAKANISHI
will fully tap into rising demand through active sales and marketing and pursue
growth. Meanwhile, we are facing a number of challenges, including disruptions
in supply chains and increases in raw materials prices and transportation costs.
These issues have begun to affect the production of certain products. To
minimize the impact of parts shortages, we are continuing activities outside theexisting framework for the procurement of parts.
Despite increasing uncertainty chieﬂy due to the situation in Ukraine and highcrude oil prices, we will steadily implement the basic policies and priority
initiatives developed under the mid-term management plan "NV2025", which weare executing now. In 2022, we will steadily ramp up operations at a new factory,
A1+, and increase production capacity. We will enhance the lineup of dental
handpieces, dental implant instruments, and preventive dentistry products andwill strengthen sales capabilities and our brand power to consolidate our position
as the manufacturer with the largest share of the market.
All employees will work as one in striving to realize VISION2030, our long-term
vision, and achieve sustainable growth. We hope that we can continue to counton your support as we achieve further growth.

President & Group CEO

B of JPY
14.0
12.0

Net sales

B of JPY

First half

11.6

10.7

6.0

7.2

4.0

8.5
6.3

2.0
0.0

(Jan-Mar)(Apr-Jun)

Full year

13.7

B of JPY

First half

YoY

+61.0 %
Full year

10.1

B of JPY

B of JPY

15.0

15.0

30.0

35.4

10.0

33.0

7.5

23.0

20.0
10.0
0.0

13.6

13.7

12.5

0.0

+56.5 %
Full year

12.5
10.0

9.2

8.5

5.0
2.5

B of JPY

First half

B of JPY

44.8(Oct-Dec)

Income attributable to owners of parents

50.0
40.0

(Jul-Sep)

YoY+35.7%

11.3

10.4

8.0

Operating income

YoY

44.8

11.3

10.0

In the Dental Products segment, we steadily expanded
our business in the U.S. and Chinese markets, which are
positioned as priority markets in the mid-term
management plan "NV2025". In the Industrial Products
segment, sales increased signiﬁcantly in the domestic
and Chinese markets. Sales rose also in Europe, where
markets recovered.

17.2

Eiichi Nakanishi

Trends in consolidated net sales

7.6

5.0

4.0
2.3

10.1

7.5

2.5
0.0

7.1
3.0

6.4

1.8

5.3

Overview of Industrial Products business

Overview of Dental Products businessNet sales rose in all market segments of the Dental Products business.
Dental clinics worldwide are stepping up their efforts against infections. A
sterilization cycle is run after every treatment, and as a result, demand for
handpieces was ﬁrm. We fully tapped into demand. Our share of the global
market expanded, and the base line for global sales rose.

Net sales in
Dental Products business
YoY

39.6

B of JPY

First half[Europe][Japan]Net sales in the European market increased 39.0% year
on year, to JPY 13.2 billion. Both private brand items andOEM items sold well. We won projects for dental
university hospitals that had gone to other companies formany years. Consequently, our market share increased.
Net sales in the domestic market rose 10.2% year on
year, to JPY 7.4 billion. Sales were strong in the ﬁrst half
due to a government grant. In the second half, the grant
was discontinued, and sales declined.

+36.6%
Full year

B of JPY

50.0
40.0

30.0

39.6
30.6

29.0

20.0
10.0

20.5
14.7

Net sales inIndustrial Products businessIn the Industrial Products business, we won
many projects related to active capital investEurope
ment at manufacturers, and net sales inJapan14%
creased. Capital expenditures for automation
at production sites are ﬁrm worldwide. Exam32%
North
ples of the introduction of applications ofAmerica
motor spindles of the Company, which excels
25%
in ultraprecision processing, increased steadiAsia
ly. In the domestic market, we won a number
29%
of projects related to capital investment in thesemiconductor manufacturing industry, andsales consequently increased. In the AsianFY2021market, there were a number of inquiries, particularly in China. We won many 5G-related Breakdown by region of net sales
in Industrial Products businessprojects, and sales rose.

YoY

3.6

First half
5.0
4.0

2.7
2.0

Net sales in other areas climbed 33.1% year on year, to
JPY 5.9 billion. Sales rose signiﬁcantly in South America.
Sales were ﬁrm in Russia, the Middle East, and Oceania.

1.7

1.0

1.4

1.6

0.0

Forecast for FY2022 Performance
Other[Other]

3.6

3.3

3.0

11.6

[North America] Net sales in the North American market climbed 70.7%
year on year, to JPY 7.1 billion. Sales of both private
brand items and OEM items increased, reﬂecting demandfor electric motors. Our market share also expanded.
Net sales in the Asian market increased 43.1% year on
year, to JPY 5.9 billion. Sales were weak in Southeast
Asia, which is still affected by COVID-19, but sales rosesigniﬁcantly in China and South Korea.

Full year

B of JPY

0.0[Asia]+33.7%

B of JPY

15%
Asia

15%
North
America

18%

Europe

33%
Japan

19%

FY2021
Breakdown by region of net sales
in Dental Products businessNet sales are expected to decline in the ﬁrst half, reﬂecting
a reduction in the production of certain products due todifﬁculty in the procurement of parts.

41.2 B of JPY

YoY

-8.1%

Demand is at a high level in both in the Dental Products
business and Industrial Products business. We plan toincrease net sales to the year-earlier level in the second halfby minimizing the impact of parts shortages and expanding
sales of new products.

Operating income 10.6 B of JPY

YoY-22.3%

Ordinary income 11.1 B of JPY

YoY-20.3%

The forecasts are based on the assumption that one US
dollar is JPY 109 and one euro is JPY 123.

owners of parents

YoY-22.5%Net sales

Income attributable to

7.8 B of JPY

Assumed exchanged rates
1 US dollar

JPY 109

1 EUROJPY 123

[Mid-Term Management Plan, New Factory][Dental Trade Shows, New Products]

Net sales in the period of Mid-Term Management Plan "NV2025"
We forecast that net sales will decline from a year earlier, to JPY 41.2
billion in 2022 due to the absence of special demand in the previous year
and a reduction in the production of certain products due to difﬁculty inthe procurement of parts. The forecast net sales are roughly on a par withthe target in the mid-term management plan "NV2025".

Factors for2022
forecast

Order backlog at a record highReduction in production due to difﬁculty in the
procurement of parts
Absence of special demand seen in previous year

Mid-Term
Management
Plan"NV2025"

Strategic expansion of the dental business in the
global market
Development of new businesses to respond toneeds in a rapidly aging society
Building a management base for speedy development and by far the strongest cost competitiveness

NV2025
Sales target

2021
Sales result

44.8

B of JPY

50.0

2022
Sales forecast

41.2

36.5
34.3
31.8

B of JPY

Resuming face-to-face sales activities, including trade shows and product training
Amid the COVID-19 pandemic, dental trade shows and other events have started to be held again, primarily overseas. We
have also resumed face-to-face sales activities, including dental trade shows and product training sessions, paying close
attention to preventing infections among our employees.

B of JPY

35.4
33.0

DentalEXPO DENTAL 2021
(Italy)2021/09

Dental2021/09
International Dental Show 2021
(Germany)

DentalADA 2021(USA)

2021/10

Medical2021/10MAYO Clinic Hospital
Hands-on course (USA)New factory "A1+" under construction Increasing production capacity to achieve NV2025 targets

Expanding sales of new products

We are building a new factory "A1+" to achieve business growth planned in the mid-term management plan. The factory isplanned to be completed in August this year. The production area of the existing factory "A1" is 12,000 m². The area of"A1+", 5,500 m², will be added, and the production area will increase 1.5-fold. Production capacity is planned to increase
1.8-fold due to an increase in production efﬁciency and automation.

Demand in both the Dental Products business and the Industrial Product business are in an expansion phase. We will
strive to expand sales of new competitive products and fully tap into strong demand, increasing sales and market share.

DentalDentalMedicalTitanium dental
hand piece

Dental implant
equipment

Attachment device
for brain surgeries

Ti-Max Z micro

Surgic Pro2

P300 Attachment

Launched in
Sep. 2021

Launched inFeb. 2021

Launched in
Apr. 2020

Industrial

Industrial

Industrial

Ultrasonic cutter

Coolant throughspindleElectro-static
discharge spindle

CTS-3030

NR33-6000ATC-ESD

Launched inJuly 2021

Launched inJuly 2020

Sonic Cutter ZERO
Launched inAug. 2021

A1+ rendering

A1+ construction site[Sustainability][Branding]

Sustainability at NAKANISHI

Actively making branding efforts

While providing solutions to social issues through business activities, we will take steps with a focus on the eightmaterialities for sustainability below.

To gain the support and respect of dental professionals and become a preferred brand, we are taking two approaches toeffectively convey to them our branding slogan, "Create it", which we have been using in the dental business.

NAKANISHI's materiality
1. Providing innovative and safe products
Contributing to health, welfare and industry throughproducts and services

2. Providing product knowledge and thebest clinical knowledge
Disseminate and share advanced clinical technologies
through NSK academy activity

3. Extending product life through expanded
service structure
Reliable and durable quality to extend the product lifecycle

4. Developing human resources for advanced
manufacturing
Focusing on people as our most importantmanagement resources

NSK STUDIO series

Concept series
5. Promoting occupational safety and health& health and productivity management
Designing workplaces that create innovative products

We communicate to our customers in a convincing way
the appeal of NSK, focusing on six themes, using text andimages to gain trust.

6. Creating workplaces where diverse humanresources can grow
Implementing diversity & inclusion

7. Respecting our business partners aroundthe world
Fair and honest corporate activities

8. Responses to climate change andcontributions to a recycling-oriented
society

Six themes:
trust, partnerships, precision, sustainability,
innovation, a healthier future

Reducing the environmental impact through products,
services, and business processes
Listening to the voices of each and every
dental healthcare professional across theworld and creating high quality dental
equipment. We consider both ideals toppriorities.
We are always eager to hear your thoughts
and experiences.

Sustainability initiatives

No matter what your unique needs andchallenges may be, we are committed tolistening to your voice and answer throughthe creation of new products and quality

1. Providing innovative and safe
products
Our own infection prevention system

We have developed the world's ﬁrst infection prevention system. For more than 30 years, we havebeen developing products that enable dentists andpatients to give or receive dental treatment withoutworry.

8. Responses to climate change andcontributions to a recycling-oriented
society
Eco-friendly packaging

We have changed the material of product packages
from plastic to recycled paper and made them small
and lightweight. We strive to reduce waste plastic
and environmental impact in transportation.

services.
We are NSK.

We can achieve greater precision in dental
treatment by minimizing noise and vibration
to the best of our ability.

2. Providing product knowledge and thebest clinical knowledge
Product training

We provide product training to deepen users' understanding of our products and enable them to makefull use of the functions of our products. The product training contributes to increasing customer satisfaction and enhancing dental care technologies.

8. Responses to climate change andcontributions to a recycling-oriented
society
Zero CO2 manufacturing

We have changed the power used at headquarters andA1 factory of NSK to 100% renewable energy power(solar power and wind power). We are promoting bothbusiness activities and responses to climate change.

Creating highly accurate contra-angles
requires cutting-edge, high-precision
machining technology and many years oftechnical experience.
Our products are assembled with accuracy
at micron levels by skilled craftsmen who
ensure quality is prioritised through theirﬁnely honed senses and skills.
Every day, we strive to achieve
world-leading levels of accuracy.
We are NSK.

We have created 3D computer graphics animations thatpeople will enjoy watching regardless of gender and age
to earn recognition for the NSK brand by as many people
around the world as possible and make more familiar tothem.

[Shareholder Returns]

Shareholder Returns

Stock information (as of December 31, 2021)

Shareholder returns policy

Total number of authorized shares 375,000,000 shares

We regard returning proﬁts to our shareholders as one of our most important management issues, and set our basic policy
as enhancing the business foundation and promoting investment in growth areas properly and proactively as well as
returning proﬁts to shareholders in a well-balanced manner.
We endeavor to perform the ﬂexible acquisition of treasury stock and stable and continuous dividend increases, considering
retained earnings required for investment in future growth, and setting the standard for medium-term proﬁt return as a total
payout ratio of 50%.

Dividends for FY2021
We will pay year-end dividends of JPY 20 per share, JPY 5 more than the initial forecast, for FY2021.
We have paid interim dividends of JPY 17 per share, and annual dividends for FY2021 will be JPY 37 per share.

Purchase of treasury shares
Based on the standard for the medium term, a total payout ratio of 50%, we considered what steps to take for shareholder
returns, based on the proﬁt forecast for FY2022. We have decided to purchase up to JPY 0.5 billion in treasury stock, as
announced on February 9, 2022.

Transition of shareholder return
Total amount of treasury
stock acquisition(billion yen)

Medium-term standard for total payout ratio

Total annual
dividends(billion yen)

Total payout ratio

1.1

Treasury stockacquisition

Number of shares issued

94,259,400 shares

Number of shareholders

4,734

Shareholder Distribution
Treasury stock
8.6%
Other Japanese companies
60
14.0%

0.9
1.4
0.3
0.7

2.6
0.9

0.0

0.0

2.5

2.5

JPY 0.5 billion

3.1

2.2

Japanese individuals and others
4,368
18.1%

Company name
Established
Representative
Capital stock
Number of employees
Headquarters
Domestic ofﬁces
Major subsidiary andassociate(as of February 9, forecast)

JPY 40 per share

1.3

Main banks

Forecast

Number ofshares held

Shareholding
ratio

Nakanishi E&N Inc.

4,530 thousand

5.3%

Custody Bank of Japan, Ltd. (Trust accounts 9)4,161 thousand

4.8%

JP MORGAN CHASE BANK 385632

3,895 thousand

4.5%

The Master Trust Bank of Japan, Ltd. (Trust accounts)

3,421 thousand

4.0%

Custody Bank of Japan, Ltd. (Trust accounts)

3,390 thousand

3.9%

Ofﬁce Nakanishi Inc.

3,120 thousand

3.6%

The NSK Nakanishi Foundation

3,021 thousand

3.5%

Eiichi Nakanishi

2,814 thousand

3.3%

Kensuke Nakanishi

2,806 thousand

3.3%

Takasuke Nakanishi

2,781 thousand

3.2%

Chiyo Nakanishi

2,781 thousand

3.2%

Name

(Notes) 1. NAKANISHI INC. holds 8,094 thousand shares of treasury stock, but we do not include it in thelist of principal shareholders.
2. Treasury stock is excluded in the calculation of shareholding ratios.

Corporate Profile (as of December 31, 2021)

Annual dividends

1.7

Foreign investors
and individuals
264
40.2%

Japanese ﬁnancial
institutions 18
18.0%(as of February 9, maximum)

0.0Japanese securities companies
23
1.1%

Principal shareholders (top 10)

Board Members
NAKANISHI INC.
(As of March 30, 2022)
February 1951
Eiichi Nakanishi, President & Group CEO
JPY 867,948,542
1,239 (Consolidated)
700 Shimohinata, Kanuma, Tochigi
Headquarters, factoryTokyo Ofﬁce
Osaka Ofﬁce
NSK-America Corp. (USA)NSK Europe GmbH (Germany)
NSK France S.A.S. (France)
NSK United Kingdom Ltd. (United Kingdom)
NSK Nakanishi Dental Spain S.A. (Spain)
NSK Oceania Pty. Ltd. (Australia)
NSK Shanghai Co.,Ltd. (China)
NSK Dental Italy S.r.l. (Italy)
NSK Dental Korea Co.,Ltd. (South Korea)
NSK America Latina Ltda. (Brazil)
NSK Dental Nordic AB (Sweden)
NSK RUS LLC (Russia)
The Ashikaga Bank, Ltd., Mizuho Bank,
Ltd., MUFG Bank, Ltd., Sumitomo Mitsui
Banking Corporation

President & Group CEO
Executive Vice President & COO
Executive Vice President
Director
Director
Full-time Corporate Auditor
Corporate Auditor
Corporate Auditor

Eiichi Nakanishi
Kensuke Nakanishi
Masataka Suzuki
Yuji Nonagase
Yukiko Araki
Hideki Toyotama
Yuji Sawada
Yoshihiro Maki

(Notes) 1. Directors Yuji Nonagase and Yukiko Araki are Outside Directors.
2. Corporate Auditors Hideki Toyotama, Yuji Sawada, and Yoshihiro
Maki are Outside Corporate Auditors.