 Notes for shareholders
Securities code

7716

Fiscal year

From January 1 to December 31

Annual general meetingof shareholders

March

Shareholder registration
date

Record date for the exercise of voting rights at the annual general meeting of shareholders

December 31

Record date for year-end dividends

December 31

Record date for interim dividends

June 30

Shareholder registryadministrator and special
account management
institution

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

Contact 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
NoticeTokyo Stock Exchange JASDAQ Standard 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 the shareholder register.

Notice regarding the termination of the mailing of the business report
The Company has been sending the business report by postal mail. However, in consideration of the global environment, we will nolonger mail the paper version of the report starting with this issue and decided to post the report on our website(https://www.nakanishi-inc.jp). We hope that we can continue to count on your understanding and support.

Cover: NSK STUDIO
We have created NSK STUDIO to enable more people around the world to learn about
Nakanishi's aspirations: We want to protect teeth and the global environment, which are
beautiful and irreplaceable. Enjoy the 3-D computer animations by Atsushi Makino, aworld-class video artist.
https://japan.nsk-dental.com/brand/nsk_studio/

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

BUSINESS REPORT
71st Fiscal Year January 1, 2022 to December 31, 2022

NAKANISHI INC.

MESSAGE[To Our Shareholders]

I would like to take this oppor tunity to express my gratitude to ourshareholders for your continued support.
Both sales and income in 2022 rose year on year in all segments, namely
the Dental, Surgical and Industrial segments, on the back of firm demand
worldwide. Consolidated results achieved record highs for the second
consecutive year.
When the COVID-19 pandemic began, competitors ceased operations one
after another. Meanwhile, the Company decided to continue operations. We
continued to commit ourselves to our customers, while paying close attention
to infections. As a result, we have built immense credibility. This has been amajor driving force behind the rapid expansion of our business to date.
We have received many orders from around the world in each of the
Dental, Surgical and Industrial segments, but we have not been able toproduce products to fulfill the orders chiefly due to prolonged parts
shor tages and a chronic lack of production personnel because of
COVID-19. As a result, delivery lead times have been longer than usual. To
live up to customers' expectations in a timely fashion, we are earnestly
taking steps to increase production.
At A1+, a new factory completed last year, we have started to increase theproduction of precision parts and increase automation. We will start to build
M1, a new assembly factory, on the site of the headquarters in April thisyear. A factory in China will start to assemble knock-down kits this spring.
In this way, we will appropriately respond to the Buy China policy whichfavors domestic products.
We are steadily developing a management base for sustainable growth. We
will seize opportunities to achieve further growth. All employees of the
NAKANISHI Group around the world will work as one team to progress
toward the realization of VISION 2030, the long-term vision, and achieve
rapid growth going forward.
We hope that we can continue to count on your support as we achieve
further growth.
President & Group CEO

Eiichi Nakanishi

BUSINESS SUMMARY
We steadily tapped into firm global demand, and as aresult, both sales and income increased year on year in all
segments: Dental, Surgical and Industrial. Consolidated
results achieved record highs for the second consecutive
year. The results were elevated by the weaker JPY against
the major transaction currencies, particularly the U.S.
dollar and the euro. Eliminating the effect of exchange
rates, results remained roughly flat from the previous fiscal
year, whose results were record highs. Amid the prolonged
parts shortages due to the disruption of supply chains, we
minimized the effects of the parts shortages by purchasing
parts on the market and replacing unavailable parts withparts that were easy to procure (design changes), and thisresulted in the record-high results.
Net sales

48.6

B of JPY

First half

12.5
10.0

11.9
11.3

Full year

B of JPY
First half

7.2

5.0

44.8

23.0

20.0

24.4

13.6
2020

11.3

11.6

0

1Q
(Jan-Mar)

8.5

6.3

2Q
(Apr-Jun)

3Q(Jul-Sep)

2021

2022

0

4Q
(Oct-Dec)

Profit attributable to owners of parents

12.4

YoY

+11.9%

B of JPY

First half

Full year

13.7

15.3

YoY

+23.4%
Full year

12.5

12.4

10.0

10.1

8.5

7.5

7.6

8.1

5.0
2.5

10.7

10.4

B of JPY
15.0

12.5

7.5

12.5

11.6

10.0

33.0

2022

2.5

15.0

48.6

12.4

2021

7.5

B of JPY
17.5

40.0

10.0

15.3

+8.5%

50.0

30.0

2020

B of JPY
15.0

Operating profit

YoY

B of JPY
60.0

001 BUSINESS REPORT

Trends in quarterly net sales

Operating results in FY2022

5.0

6.4

5.3

6.7

2.5

2.3
2020

2021

2022

0

1.8
2020

2021

2022

02

BUSINESS SUMMARY

The reporting segments changed at the beginning of FY2022.

Dental Business

Trends in net sales in Dental Business
B of JPY

Engages in the development,
manufacture, and sale of dental
equipment for a range of dental
treatment, including restorative
dentistry, periodontics, mobile
dental care, and oral surgery.

40.9

30.0
20.0
Oral surgery system
Surgic Pro2

Oral hygiene system
Varios Combi Pro

AutoclaveiClave mini2

10.00

Surgical Business

38.2
28.0
19.8

20.5

2021

2022

11.2
2020

Trends in net sales in Surgical Business
B of JPY

Engages in the development,
manufacture, and sale of drills forbone cutting for surgery that areused in medical fields such asneurosurgery, spine surgery, andorthopedics surgery.

First half

Full year

4.0
3.0

2.7
2.0
Total surgical system
Primado2
Control Unit

Slim motor
P200-SMH Series

Attachment
P300 Attachment Series

Surgical burs
Attachment burs

1.0
0

Industrial Business

2.1
0.9
2020

1.3
2021

3.1
1.6

B of JPY

First half

Full year

6.0
5.0
4.0
3.0
2.0
Industrial spindles
E-4000 Series

Industrial spindles
Air-Speed Series

Micro grinder
EmaxEVOlution

Ultrasonic polisher
Sheenus ZERO

1.0

3.8
2.9
1.4
2020

1.7
2021

Japan

Sales trend
YoY

There was a bottoming out of demand, which declined due to thetermination of government grants, and sales rose in the second half.

EuropeSales trend
YoY

Sales particularly in the U.K., northern Europe and Spain remained
strong.

North
America

Sales trend
YoY

Sales of the Company's own products grew. Market share rose to arecord high.

Asia

Sales trend
YoY

Sales remained flat from a year ago, reflecting lockdowns and thezero-COVID policy in China.

Other

Sales trend
YoY

Sales in Australia and the Middle East were firm. Sales in South Americarose significantly.

Business summary in FY2020
Japan

Sales trend
YoY

New customers were gained due to a stable supply of disposable
products.

EuropeSales trend
YoY

Demand slowed, but sales were firm in Germany etc. Overall sales
remained flat from the previous year.

North
America

Sales trend
YoY

The products were highly rated, and sales continued to increase. An
expansion of cooperation with other companies boosted sales significantly.

Asia

Sales trend
YoY

In China, sales rose sharply after the end of lockdowns. Overall sales
remained flat from the previous year.

Other

Sales trend
YoY

Sales were weak in the Middle East, but sales increased significantly inSouth America.

2022

Trends in net sales in Industrial Business

0

03 BUSINESS REPORT

Full year

40.0

Dental hand piece
Ti-Max Z Series

Engages in the development,
manufacture, and sale of spindles
and hand grinders used in
micromachining and precision
processing in a wide range ofmanufacturing fields such as theautomobile, aircraft, and precisionequipment industries.

First half

50.0

Business summary in FY2020

4.5

2.2
2022

Business summary in FY2020
Japan

Sales trend
YoY

Due to parts shortages, production continued to fall short of being able tofulfill orders which were strong.

EuropeSales trend
YoY

The Company successfully publicized case studies, and products of theCompany were purchased as replacements.

North
America

Sales trend
YoY

Orders increased due to the strengthening of the sales system. Sales
rose as a result of successful transactions.

Asia

Sales trend
YoY

Longer delivery lead times became commonplace due to parts
shortages. Sales declined, reflecting a decrease in shipments.

Other

Sales trend
YoY

Sales were firm in South America, but fell in Australia and other regions.

04

TOPICS[Factory A1+, Factory in China][Mid-Term Management Plan]

Progress in Mid-Term Management Plan NV2025+

Factory A1+ completed

The Company saw the adversity of the COVID-19 pandemic as an opportunity to steadily expand its business.
Demand for the Company's products in the market remained strong. The base line for global sales of the Company's
products has risen significantly. The Company is taking steps to appropriately respond to increasing demand andexpand capacity.

A1+ was completed in September 2022 and has started 24-hour operations.
There is room to expand the production area, and the Company plans to
expand facilities in response to the expansion of the scale of business. A
new production line for improving production efficiency has been built. The
Company is considering the horizontal development of the existingproduction lines to improve the productivity of the entire factory.

Mid-Term Management Plan "NV2025+"

Progress in FY2022

Basic policies, priority measures▲ Factory A1+

Performance results reached record highs
for two consecutive fiscal years.
● Sales rose significantly and market share
increased in the United States.
● Established a factory for knockdown
production in China●

1. Strategic expansion of the dental business in the global
market2. Development of new businesses to respond to needs ina rapidly aging society
3. Building a management base for speedy development
and by far the strongest cost competitivenessPreparation for increased parts production
and automation at A1+● Advanced the plan to build the new M1
assembly factory●

Mid-Term Management Plan NV2025+ 2020 to 2025
▲ The precision parts production area

Net sales (B of JPY)

55.0

Operating profit (B of JPY)

48.6

44.8
36.5

34.3

9.4

35.4

9.7

A China factory established

33.0

9.2

13.7

16.5

15.3

8.5

2017

2018

2019

2020

2021

2022

2023

2024

＞ 11.0

(%)

12.4

11.7

10.2

8.7

12.7

14.4

Total payout ratio

(%)

30.7

35.4

36.6

40.3

43.5

51.5

50.0

12.3

12.1

14.1

16.0

13.5

11.1

＜ 12.005 BUSINESS REPORTTo ensure sustainable growth in China, which is a key market, the Company has established a factory to assemble
knock-down kits of precision parts manufactured at the headquarters, NSK Dental Manufacturing Co., Ltd., in Ziyang,
Sichuan province. The factory will commence production this spring. The establishment of the factory is in line with China's
Buy China policy, which favors domestic products, and the Company aims to expand sales in the Chinese market.

2025

ROE

Cash & marketable (months)
securities to monthly
sales ratio▲ A new line handling four processes

The China factoryin Ziyang, Sichuan

06

TOPICS[Sustainability][New Factory M1, Acquisition of Jäger]Progress of the construction plan for the new factory, M1

FY2022 sustainability topics

The factory A1+ was completed, and the Company is increasing its parts machining capacity. Now the Company isworking hard to implement a plan to build M1, which will have an assembly factory and warehouses for parts andfinished products and engage in the following stages of manufacturing. The Company aims to increase production andimprove efficiency in addition to shortening lead time. Meanwhile, the Company will strive to introduce energy-saving
equipment and improve the working environment. The Company aims to make M1 a state-of-art factory that will
increase production, reduce costs, and achieve a high level of sustainability.

We are implementing the Mid-Term Management Plan and striving to realize important sustainability themes toenhance corporate value.

Environment
Achieved the carbon neutralityof the A1 factory and theheadquarters factory(GHG Protocol scopes 1 and 2)

2021

May Calculated GHG emissions
August Announced Green Plan 2030
December 100% renewable energy at the headquarters and A1 factories*Achieved scope 2 carbon neutrality

2022

September Purchased J-credits derived from a forest absorption project*Achieved scope 1 carbon neutrality

October Achieved third-party carbon neutrality certification

Social
Won an excellent business site
award (president's effort award)
for the employment of people
with disabilities(Tochigi Prefecture's award for the employmentof people with disabilities)

Acquisition of Alfred Jäger GmbHThe Company acquired Alfred Jäger GmbH, a manufacturer specializing the production of industrial spindles, in Germany
in December 2022. Like the Company's Industrial Business, Jäger engages in the development, manufacturing, and saleof industrial spindles. However, the two companies have different product lines, major applications and core markets. The
Company aims to generate business synergy through the cross-selling of both companies products.
Established: 1967 Incorporated: 2000 Location: Germany
Main products: high frequency spindles Number of employees: Approx.120

Governance

Chair

Members: Yukiko Araki (Independent Outside Director)

Established Nomination andRemuneration Committee(voluntary advisory body to the Boardof Directors)

Rating

Activities

MSCI

Raised ESG rating agency scores▲ Headquarters, motor factory

07 BUSINESS REPORT▲ Spindle factory▲ Product line

▲ Main application
Dental CAD/CAM(MSCI • Sustainalytics): Eiichi Nakanishi (President & Group CEO)

Members : Yuji Nonagase (Independent Outside Director)

Sustainalytics

July 1

Established the committee

August-December

Held four committee meetings(online and face-to-face)

2020

B

2021

BB

2022

BBB

2020

High Risk

2021

High Risk

2022

Medium Risk

08

TOPICSSTOCK INFORMATION[Shareholder Returns]

Shareholder returns

Stock information (as of December 31, 2022)

 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 make 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%.

 Number of shares issued................. 94,259,400 shares Dividends for FY2022

We use the total payout ratio as an indicator of shareholder returns, and we aim for a total payout ratio of 50%. Basedon the results in FY2022, we increased dividends as described above and purchased treasury shares three times during
the fiscal year. We purchased a total of 1,010,500 shares valued at JPY 2,499 million.
 FY2023 dividends forecast

We expect that uncertainty over the future of the economy will increase in FY2023, but that demand will remain firm.
Taking this expectation into consideration, we will pay interim dividends of JPY 24 per share and year-end dividends of
JPY 24 per share in FY2023. Annual dividends will thus be JPY 48 per share (the consolidated dividend payout ratio willbe 37.2%).
 Transition of shareholder return(Note) 3-for-1 stock split in April 2018

51.5%

Total amount of treasury stock acquisition (B of JPY)

35.4%

36.6%

40.3%

Japanese securities companies 33

9.7%

2.3%

14.0%

Foreign investors
and individuals 264

Japanese financial institutions 13

37.7%

Japanese individuals and others 5,269

Corporate Profile
Company name
Established
Representative
Capital stock
Number of
employees
Headquarters
Domestic offices

2.4
1.1
3.1

3.9

2020 Results

2021 Results

2022 Results

0.0

0.0

2.6

2.5

2.5

2018 Results

2019 Results

Annual dividends
4.0 B of JPY
2023 Forecast

31.00

30.00

30.00

37.00

46.00

48.00

35.4

36.6

40.3

31.7

31.6

37.2

35.4

36.6

40.3

43.5

51.5

−

Number ofshares held

Shareholding
ratio

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

7,896 thousand

9.3%

Nakanishi E&N Inc.

4,530 thousand

5.3%

Custody Bank of Japan, Ltd. (Trust accounts)

4,514 thousand

5.3%

JP MORGAN CHASE BANK 385632

3,618 thousand

4.2%

Office Nakanishi Inc.

3,120 thousand

3.7%

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

3.3%

SSBTC CLIENT OMNIBUS ACCOUNT

2,581 thousand

3.0%

Name

17.5%

Major subsidiary
and associate

43.5%

Total payout ratio

09 BUSINESS REPORT

Treasury stock

18.8%

 Purchase of treasury shares in FY2022

Annual dividends(JPY)
Dividend payout ratio (%)(consolidated)
Total payout ratio(%)(consolidated) Shareholder distribution

Other Japanese companies 50

We will pay year-end dividends of JPY 24 per share, JPY 4 more than the initial forecast, for FY2022.
We have paid interim dividends of JPY 22 per share, and annual dividends will be JPY 46 per share.

Total annual dividends (B of JPY)

 Number of shareholders....................................... 5,630

 Principal shareholders (top 10 )Main banks(as of December 31, 2022)

NAKANISHI INC.
February 1951
Eiichi Nakanishi, President & Group CEO
JPY 867,948,542
1,478 (Consolidated)
700 Shimohinata, Kanuma, Tochigi
Headquarters, factoryTokyo OfficeOsaka 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)
Alfred Jäger GmbH (Germany)
The Ashikaga Bank, Ltd., Mizuho Bank, Ltd.,MUFG Bank, Ltd., Sumitomo Mitsui
Banking Corporation(Notes) 1. NAKANISHI INC. holds 9,105 thousand shares of treasury stock, but we do not include itin the list of principle shareholders.
2. Treasury stock is excluded in the calculation of shareholding ratios.

Board Members(as of March 30, 2023)

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

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

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

10