ANNUAL REPORT

2023
Year ended September 30, 2023

Noevir Holdings Annual Report 2023

Business Model
Segment Information

Other

Pharmaceuticals &Health Food

Pharmaceuticals &Health Food

19.2%

Cosmetics

77.0%

Fiscal 2023
Sales by Segment¥11,985 million¥48,175 million

Cosmetics

The Group develops, produces and sells a versatilecollection of products under well-regarded brand names,
including Noevir high-performance functional face-to-facechannel skincare products; various popular products for the
self-selection cosmetics market, including the Nameraka
Honpo skincare brand and excel makeup brand; and the
NOV hypoallergenic brand. The Group also undertakes thecontract manufacturing of cosmetics.

The Group develops, produces and sells suchflagship items as the long-selling Nanten Nodo
Ame cough drop brand, the Min Min Da Ha
functional drink brand lineup and other OTC
pharmaceuticals, including cold remedies anddigestive aids, as well as nutritional supplements,
health food and other products featuringhigh-quality natural ingredients.

Other

Channels

3.8%• Face-to-face Sales• Convenience Stores• Drugstores• GMS (General Merchandise Stores)• Supermarkets• Online Stores• Contract Manufacturing¥2,391 million

The Other segment encompasses appareland aircraft sales and leasing.
Channels• Face-to-face Sales

Channels• Face-to-face Sales• Drugstores• Specialty Goods Stores• GMS (General Merchandise Stores)• Supermarkets• Online Stores• Noevir’s Own Retail Stores• Convenience Stores• Contract Manufacturing

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Noevir Holdings Annual Report 2023

A Unique Approach to R&D and
Robust Manufacturing Systems
Capable of Achieving both High Quality
and Environmental Friendliness

Face-to-faceChannelCosmetics

Luxury Line

Cosmetics principally represented
by prestige products sold throughface-to-face sales channels• Employing multiple research facilities run by Group companies,
which handle cosmetics, pharmaceuticals and food, to expand
the scope of research activities and to promote the ongoingdevelopment of unique products that fully leverage theGroup’s diverse R&D capabilities and assets• Stepping up joint research with external business corporations
as well as governmental and academic institutions• Implementing thoroughgoing quality control while
operating environment-friendly manufacturing systems• Approximately 2,000 NOEVIR Beauty Studios,along with Noevir’s own retail stores,
operate in regions nationwide(Original Equipment
Manufacturing)

The contract manufacturing of cosmetics andquasi-drugs on an OEM basis, utilizing theGroup’s know-how in both fields

Standard Line
Cosmetics principally represented
by affordably priced products
sold through general retailers• Boasting a robust sales structure backed bystorefront promotional campaigns as well as
advertising utilizing SNSs and other media• Product planning capabilities that help create
trendsetting items and unique offerings aimed
at addressing specialized customer needs• Our high-end skincare products have garnereda solid reputation due to their superior anti-aging
and skin-brightening functionalities

OEM

Self-selection
Cosmetics• Sold mainly through drugstores, specialty goods
stores and general merchandise stores• These sales outlets engage in face-to-face sales
employing consulting to both propose skincare
products and provide facials

Overseas
Business

2

Sales of face-to-face channel cosmetics andself-selection cosmetics in eight regions overseas:
China, Taiwan, South Korea, Hong Kong,
Singapore, Thailand, The United States, Canada

Noevir Holdings Annual Report 2023

Medium-term Management Plan
Medium-term Management Plan Concept:

Realizing steady corporate growth by securing
sustainability in every Group business segment
The Noevir Group is striving to best accommodate ever changing and increasingly diverse market
needs. To this end, in addition to executing the following five policies, we have positioned net
sales, operating income and return on equity (ROE) as key management indicators, thereby
maximizing our corporate value and enhancing profitability.

Consolidated Earnings Forecasts for Fiscal 2024

¥63,000 million
Operating income ¥11,200 million
Net Sales

Five policies

1

Pursue innovation andcontinuous profit
generation in thedomestic market

2
Enhance our brand value

3

Accelerate efforts todiversify humanresources and our
corporate structure

4

Strengthen ourcompetitiveness by steppingup the diversification of our
R&D, production andlogistics systems

5

Promote a management
approach that is
responsive to changes inthe business environment3

Noevir Holdings Annual Report 2023

History of the Noevir Group

Noevir Co., Ltd.

Noevir Holdings
Co., Ltd.

1964

J.H. Okura & Co., Ltd. established, initiating the import and sale of aircraft parts, medical equipment and commodities

1971

J.H. Okura & Co., Ltd. reorganized as a limited liability company, initiating the import and sale of natural cosmetics incorporating herbal extracts

1978

Company name changed to Noevir Co., Ltd. and the full-scale manufacture and marketing of cosmetics in Japan initiated1979

Noevir, Inc. (now Noevir U.S.A., Inc.) established in the United States

1985

Nov Co., Ltd. established1986

Sana Co., Ltd. established

1988

Noevir stock registered on the over-the-counter (OTC) market of the Japan Securities Dealers Association

1991

Noevir U.S.A., Inc. made Noevir Canada, Inc. its subsidiary

1993

Noevir International Corporation (now Noevir Aviation, Inc.) established in the United States

1994

Noevir Co., Ltd. made Japan Air Trust Co., Ltd. (now Noevir Aviation Co., Ltd.) its subsidiary, entering the aviation transport business

1996

Noevir Co., Ltd. made Noevir Taiwan, Inc. its subsidiary

2001

Bonanza Co., Ltd. established, initiating the OEM of cosmetics
Noevir Holding of America, Inc. established in the United States, making Noevir Aviation, Inc., Noevir U.S.A., Inc. and Noevir Canada, Inc. its subsidiaries

2002

Noevir Co., Ltd. made TOKIWA Pharmaceutical Co., Ltd. its subsidiary, entering the pharmaceutical business

2004

TOKIWA Pharmaceutical Co., Ltd. merged with Nov Co., Ltd. and Sana Co., Ltd.
Noevir stock listed on the JASDAQ Securities Exchange

2005

Noevir Europe s.r.l. established in San Marino

2007

Shanghai Noevir Co., Ltd. established as a joint venture
Noevir stock listed on the Second Section of the Tokyo Stock Exchange

2011

Noevir Holdings Co., Ltd. established, with Noevir Co., Ltd. delisting its stock and becoming the former’s subsidiary2011

Noevir Holdings Co., Ltd. established, listing its stock on the Second Section of the Tokyo Stock Exchange
Acquired equity in three subsidiaries (TOKIWA Pharmaceutical Co., Ltd., Bonanza Co., Ltd. and Noevir Aviation Co., Ltd.) of Noevir Co., Ltd.

2012

Noevir Holdings Co., Ltd. listed on the First Section of the Tokyo Stock Exchange

2022

Transitioned to the Tokyo Stock Exchange’s Prime Market
Transferred shares in Noevir Aviation Co., Ltd. to Noevir Co., Ltd.
Transferred shares in Bonanza Co., Ltd. to Noevir Co., Ltd.

4

Noevir Holdings Annual Report 2023

5Management Report

Winning the Hearts of a Wide-Range of Customers
by Delivering Quality Products
Designed to Meet Their Diverse Needs
The Noevir Group has strengths in diverse product spectrums, including prestige face-to-face channel cosmetics available primarily through face-to-face sales and affordable selfselection cosmetics sold through retailers. Our highly functional products created through extensive R&D targeting both these fields boast significant market presence in Japan.
In the course of our medium-term management plan, we focused on innovation in the domestic market. To better embody the plan’s concept of “Realizing steadycorporate growth by securing sustainability in every Group business segment,” we have endeavored to strengthen our competitiveness, to this end enhancing our brandvalue, developing our organizational structure and pursuing R&D. In these ways, we have striven to secure sustainable sources of profit.

The Operating Environment and Fiscal 2023 Business Results
During fiscal 2023 (October 1, 2022 to September 30, 2023), economic trends remained
uncertain, although some signs of gradual recovery were observed.
Against this backdrop, the Noevir Group has striven to accommodate ever-diversifying
customer needs in the aftermath of the COVID-19 pandemic, to this end taking an agile
approach to management decision making. For example, we updated existing product lines
while introducing new products with superior functionalities via the use of findings fromcutting-edge R&D activities. In addition, we continued with stringent efforts to streamline
selling, general & administrative (SG&A) expenses to achieve higher profitability.
As a result, consolidated net sales came to ¥62,552 million, while operating income totaled¥11,024 million. Net income attributable to owners of the parent stood at ¥7,673 million, withthe operating income margin amounting to 17.6%.

Our Fiscal 2023 Initiatives
In fiscal 2023, our Cosmetics business saw increases in both revenues and profit compared withthe previous fiscal year. In face-to-face channel cosmetics, although overall sales of skincare
products decreased, sales were robust for Noevir HUKKULA SERUM, which was released in
November 2022 and incorporates collagen, as were sales for existing Noevir SPECIALE skincare
line. The popularity of these particular products was due to the growing trend toward taking

off one’s mask when going outdoors, which, in turn, invigorated customer needs for products
designed to make their skin appear beautiful. Also, the release of Noevir Dewdrop Glow Serumin May 2023 contributed to sales, as this beauty serum boasts superior functionalities that help
enhance the skin’s ability to retain moisture.
In self-selection cosmetics, sales increased, buoyed by the robust performance of skincare
products. Sales of the Nameraka Honpo brand line remained firm, thanks in part to the updatingof the Moisture skincare line in the previous fiscal year and the inclusion of the Wrinkle
Brightening series products into the Aging-Care Line of this brand lineup in August 2023. The
release of updated versions of mainstay NOV III series skincare line products similarly contributed
to sales. Meanwhile, demand for makeup products got on a recovery track due to the lifting of
pandemic-related movement restrictions and resulting recovery in shopper traffic, supporting
the ongoing robustness of sales of base makeup products sold under the Pore Putty brand.
Having released new products in the excel makeup line, we also implemented sales promotion
initiatives through SNSs and held a variety of collaborative events with partner companies fromdifferent sectors to expand new customer contact points.
The Pharmaceuticals & Health Food segment saw increases in both revenues and profit, withstrong showings of Min Min Da Ha (functional drinks) and nutritional supplements, as well as
the release of new products, contributing to sales. The Other business segment, which­encompasses apparel- and aircraft-related operations, recorded decreases in both revenues
and profit. This was attributable to a decline in sales from aircraft-related operations.

Noevir Holdings Annual Report 2023

6

Future Outlook

Our Policy regarding Shareholder Returns

With regard to face-to-face channel cosmetics in the Cosmetics business, we will strive toenhance our sales capabilities, to this end focusing on providing customers with treatment andcounseling services at physical shops and otherwise engaging in face-to-face sales activities. By
doing so, we will expend contact points with customers. In self-selection cosmetics, we will­continue with the timely provision of products equipped with superior market competitivenessand designed to accurately meet customer needs.
Taking these factors into account, our consolidated performance forecasts for fiscal 2024
(from October 1, 2023 to September 30, 2024) comprise net sales of ¥63,000 million, operating
income of ¥11,200 million and net income attributable to owners of the parent of ¥7,800­million. Looking ahead, we will stay focused on securing profitability and strive to live up to ourearnings forecasts via, for example, efficient cost management.

We have positioned the return of profit to our shareholders as an important management
issue. Accordingly, our basic policy is to deliver a stable stream of dividends to our shareholders
even as we secure internal reserves for supporting our endeavors to achieve medium- to longterm business development goals and strengthen our management structure. The above
undertakings are backed by efforts to maximize corporate value and improve profitability.
In line with this policy, we decided to raise year-end dividends for fiscal 2023 by ¥5 per sharefrom the previous dividend forecast, thereby bringing full-year cash dividends to ¥220 per
share. As a result, we achieved a 12th consecutive annual increase in dividends, with thedividend payout ratio amounting to 97.9%.
Striving to contribute to health and beauty, the Noevir Group has long been helping people
maintain and improve their quality of life through its business operations. Thanks to thisdedication, the Group has won the trust of society. Looking ahead, we will continue to enhance
our corporate value while boosting our ability to quickly and flexibly accommodate market
changes and diversifying needs.

Concepts on Sustainability

Working toward the realization of high quality of life for all stakeholders, the Noevir Group is
engaged in the creation of beauty and health. In addition, we are implementing proactive
initiatives aimed at contributing to the realization of a sustainable society under five themes:
customers and business partners; shareholders; employees; society; and the environment.
For more details, please visit our corporate website.

https://www.noevirholdings.co.jp/english/csr/index.htm

Wrinkle Brightening series products sold under the Nameraka Honpo brandNoevir HUKKULA SERUM

Noevir Holdings Annual Report 2023

Face-to-face Channel Cosmetics

Main Brands• Noevir SPECIALE• Noevir 505• Noevir EXTRA• Noevir 99 Plus
• Noevir TOUT BLANC• Noevir 105• Noevir 80 pure
• Noevir BIOSIGNNOEVIR Dewdrop Glow Serum7

Noevir Holdings Annual Report 2023

Product Strategy

Sales Strategy

Our face-to-face channel cosmetics brand portfolio consists
mainly of prestige skincare products, which boast strengths
as anti-aging and skin brightening solutions and provide
users with a superior skincare experience, as well as beauty
serums and other functional cosmetics, the lineups ofwhich are periodically expanded and renewed to reflect
our latest R&D accomplishments.
In fiscal 2023, we released two beauty serums: Noevir
HUKKULA SERUM, which contributes to the firmness andelasticity of the skin through a unique combination ofcollagen and other ingredients developed through theapplication of our expertise in botany and dermatology,
fields in which we have pursued R&D for many years, andNOEVIR Dewdrop Glow Serum, which enhances the skin’s
ability to retain moisture due to the incorporation of plant
extracts identified through our proprietary research. In lightof the growing trend toward taking off one’s mask whengoing outdoors, we have also tackled product development
aimed at responding to strong needs among customers
for products designed to make their skin appear beautiful.
Aiming to enrich our face-to-face channel cosmetics
brands, we are fully leveraging our distinctive strengths in
R&D, thereby maintaining a constant stream of new
products with superior functionality.

The Noevir Group markets its face-to-face channel cosmetics brands
mainly through face-to-face sales channels backed by beauty studios
while also offering them through retail stores operated by Noevir Co.,
Ltd. These retail stores form a network that serves major cities acrossJapan, securing contact points with potential customers and enhancing
brand recognition. In addition, the Group has enhanced its sales
capabilities by introducing an in-house system that certifies those
NOEVIR Beauty Studios that demonstrate service quality and techniquesthat meet strict standards. As of September 30, 2023, more than 2,000
salons have been certified.
In fiscal 2023, we continued to employ face-to-face sales as ourmainstay method for customer engagement. By doing so, we strove toachieve even higher customer satisfaction among existing customers
while winning new customers through the provision of finely tuned
counseling to meet individual needs. Furthermore, we leveraged ouronline platform to deliver beauty lessons and follow-up counseling forpurchasers of our products. In these and other ways, we endeavored toensure that the platform serves as a helpful tool for both our customers
and sales representatives in the post-COVID-19 environment.
In addition, we strive to accommodate diversifying consumer needs byenhancing the content of services offered via NOEVIR Style, an online
shopping website aimed at winning loyal customers. We also provide
NOEVIR Support, an online ordering system specializing in supporting
our sales representatives.

Noevir SPECIALE skincare line

Noevir 505 skincare line

Noevir 99 Plus skincare line8

Noevir Holdings Annual Report 2023

Self-Selection Cosmetics,
Pharmaceuticals & Health Food

Product Strategy
Our self-selection cosmetics brands include the mainstay Nameraka
Honpo brand line, which is the market leader* in terms of soymilk-basedskincare products. In 2023, we enhanced the Aging-Care Line of thisbrand by releasing the Wrinkle Brightening series products. For the firsttime in 12 years, we also updated flagship NOVIII series products
marketed under our hypoallergenic NOV brand, which enjoys a similarly
considerable market share in Japan. Moreover, the Noevir Group’s
unique product planning strategies have helped the popular excel
brand makeup line garner a solid reputation among consumers inJapan and other Asian countries, and the line’s large number of loyal
customers cover a broad age range.
In addition, base makeup products sold under the Pore Putty brandhave continued to garner extremely favorable customer reviews, alongwith the New Born brand specializing in eye makeup, since the periodof the COVID-19 pandemic. Recently, we also released the esorani
skincare brand line designed for Direct-to-Consumer (D2C) marketing.
At the same time, our Pharmaceuticals & Health Food segmentprovides an array of unique products, including Nanten Nodo Ame—
long-selling cough drops classified as pharmaceutical products—as wellas Min Min Da Ha functional drinks and GRONVITER nutritional drinks.
*B ased on the storefront sales of self-selection skincare products incorporating soymilk
ingredients calculated from POS data gleaned by five retailers throughout 2022

Main Brands• Nameraka Honpo• excel• NOV• Pore Putty• New Born

• Nanten Nodo Ame• Min Min Da Ha• GRONVITER• VITAC9

Noevir Holdings Annual Report 2023

Sales Strategy
As for the marketing channels for self-selection cosmetics brands, theGroup utilizes such general retailers as general merchandise stores,
drugstores and specialty goods stores. With regard to pharmaceuticals,
the Group markets a variety of products, including functional drinks
and cough drops, through such outlets as drugstores and convenience
stores in addition to employing face-to-face sales channels to securecontracted households and companies to which products are delivered
on regular basis.
We have been implementing ongoing sales promotion initiatives
through SNSs, for example, livestreaming and live commerce events, forthe mainstay Nameraka Honpo cosmetics brand and the excel makeup
line. We have also held a variety of collaborative events with partnercompanies from different sectors to expand new customer contact
points. At the same time, we have continued to reach out to medical
institutions around Japan, especially dermatology clinics, as part ofefforts to promote the hypoallergenic NOV brand.
In addition, the Group undertakes the contract manufacturing ofcosmetics and nutritional drinks on an OEM basis.

Advertisement for excel powder eyebrow color available in a range of versatile palettes tocomplement individual skin colors and achieve preferred looks

10Noevir Holdings Annual Report 2023

11

Sustainability
Working toward the realization of a high quality of life for all stakeholders,the Noevir Group is engaged in the creation of beauty and health. In addition
to pursuing further business growth, we are implementing proactive initiatives
aimed at contributing to the realization of a sustainable society under fivethemes: customers and business partners; shareholders; employees; society; andthe environment.

E

S

G

Environmental Activities

Initiatives to Protect the Environment

Ongoing Fundraising via Noevir Green Charity

The Noevir Group established the “Environment Committee,” with a membership consisting of
directors and other officers in charge of departments involved in the identification of risks andopportunities arising from climate change. This move reflects management’s intention to pushahead further with the Group’s ongoing initiatives aimed at reducing environmental burden
throughout its operations. Through this committee, we consolidate challenges the Group is now
confronting in connection with climate change and other environmental issues, as well as actions
to be taken to address such challenges, while delivering reports on these matters to the Board of
Directors in a timely manner. In these ways, we are rallying the strength of the entire Group to
reduce our environmental footprint by, for example, developing products designed to addressenvironmental concerns and curbing CO2 emissions attributable to our operations.
As part of our initiatives to address climate change, which calls for an urgent response, we have calculated
the volume of CO2 emissions from our Group operations, striving to reduce this volume in phases.

Since 2010, Noevir Co., Ltd. has been engaged in an ongoing fundraising campaign via Noevir
Green Charity, setting aside a portion of proceeds from designated items sold during biannual
skincare product fairs for donation to support a project headed byalpinist Ken Noguchi. This project is aimed at promoting forest
rehabilitation as well as raising money for school construction invillages at the foot of Manaslu, a steep summit in the
Himalayas, and otherwise providing educational support of
the region’s children, who are the future of these villages. As
we are in full agreement with Mr. Noguchi’s aspiration to
support education and thereby help local communities thrive,
Social contribution activity undertaken
we will encourage a growing number of Group members toat the foot of the Himalayastake part in social contribution activities of this kind.
(©KEN NOGUCHI OFFICE)

For more details, please also visit our corporate website.

https://www.noevirholdings.co.jp/english/csr/environment/index.htm

Scope 3CO2 emissions of the Noevir Group (Scope 3 details are shown by category)
Scope 1 ............ 4.1%
Scope 2 ............ 2.9%

15 Investments ......................................................... 0.0%
12 End-of-life treatment of sold products......... 1.7%
11 Use of sold products ....................................... 18.2%
9 Transportation and delivery (downstream) ... 7.8%
8 Leased assets (upstream) ................................. 0.2%
7 Employee commuting....................................... 0.4%
6 Business travel ..................................................... 0.2%
5 Waste generated in operations...................... 0.2%

CO2 emissionsof the Group

109,335 t-CO2

4 Transportation and delivery (upstream) ...... 2.2%
3 Fuel and energy related activities .................. 1.4%
2 Capital goods ...................................................... 1.3%
1 Purchased goods and services ..................... 59.5%

Scope of calculation: Japan
Period subject to calculation:
October 2021 to September 2022

A Manufacturing Approach That Gives Due Consideration to the Environment
We have been promoting the development of eco-friendly products based on the “Noevir ECO
Package Guidelines.”
Released in June 2023, updated versions of Noevir Tokara Sea
Mineral Series products include those with simplified packaging,those bearing barcode labels made of FSC-certified paper,and those whose containers are made of plant-based biomass
plastics. Not only do we ensure that our new products areenvironmentally friendly, we strive to update existing productsthat have long been loved by our customers in line with theNoevir Tokara Sea Mineral Series products
aforementioned guidelines. By doing so, we endeavor tousing eco-friendly packaging
reduce the environmental footprint of our products.
and containers

Noevir Holdings Annual Report 2023

E

S

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12

Social Activities

Signing a Sponsorship Agreement with Figure Skater Mao Shimada andMaintaining Our Existing Agreement with Wakaba Higuchi
As a company striving to create beauty and health through the provision of products
incorporating and celebrating the rich blessings of nature, Noevir supports up-and-coming
figures in various related fields. In particular, we are an enthusiastic sponsor of athletes
pursuing their dreams. In figureskating, for example, we signed asponsorship agreement with Wakaba
Higuchi in April 2015 that we havecontinued to maintain. And, in May
2023, we newly signed a sponsorshipagreement with Mao Shimada.
Looking ahead, we will strive forthe promotion of sports activities byassisting athletes in their efforts totake on challenges on the global
stage. In this way, we will enhancethe value of the Noevir Group brand.
Wakaba Higuchi

Mao Shimada

Participation in Government-Private Collaboration
under the “Healthy Immune Project”
TOKIWA Pharmaceutical Co., Ltd. is a participant in the “Healthy Immune Project,” a governmentprivate collaboration project launched by Kirin Holdings Company, Limited in May 2023 with theaim of raising public awareness of immune-related healthcare. To help ensure that everyone can stayhealthy and enjoy their daily lives, TOKIWA Pharmaceutical Co., Ltd. is engaged in such activities as
hosting on-demand classes at elementary schools nationwide to help students raise their literacy on
how to keep their immune systems robust, distributing leaflets at pharmacies, and otherwise
working in collaboration with other participant corporations and partner municipalities.
Currently, a total of 25 entities are participating in thisproject (as of November 2023).
This project involves collaboration with Kanagawa
Prefecture, the Smart City Strategy Department of Osaka
Prefecture and other like-minded partner municipal
bodies aiming to play their part in raising public awarenessof immune care. As such, TOKIWA Pharmaceutical Co.,
Ltd. also intends to assist these municipalities in their
Key project members who gathered toefforts to improve the health of their citizens.
announce the “Healthy Immune Project”

Development of a Working Environment Supportive of Diverse Working Styles
The Noevir Group is developing an employee-friendly working environment that ensuresrespect for diversity and empowers employees with diverse backgrounds to fully realize theirindividual competencies. Specifically, we strive to enable employees to choose from diverse
workstyle options free of constraints regarding time and location so that they can confidently
exercise their creativity, be more productive and realize innovation. We also aim to ensure thatevery employee is allowed to pursue ongoing career development even if they give birth to achild, engage in child rearing or have to take on the nursing care of family members. To this end,
we have developed various measures to help employees strike a balance between work andprivate life. Furthermore, we provide assistance to support employees’ health promotion efforts,taking a management approach that places great emphasis on ensuring employee health.
At present, our aim is to ensure that the representation of men and women among those inmanagerial positions is equal across the Group. As such, the Group is proactively striving to offer
equal opportunities for career development irrespective of employee gender. As of September
30, 2023, the representation of women in the Noevir Group’s workforce by position is as follows.
Total number of Group employees

Male-female ratio among managers

1,368, including 648 men and 720 women

7 male : 3 femaleNoevir Holdings Annual Report 2023

E

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13

Governance

Basic Concepts of Corporate Governance and an Overview of Our Governance Structure
To realize the ongoing enhancement of corporate value and maintain the trust of all of its
stakeholders, including shareholders, the Noevir Group has positioned corporate
governance as a key management issue.
Noevir Holdings Co., Ltd. is equipped with an Audit & Supervisory Board consisting of one
full-time member and two outside members. Meanwhile, the Company’s Board of Directors
consists of 13 directors, with seven outside directors making up the majority to ensure thatbusiness execution is robustly overseen from a fair and neutral standpoint. The Company
has thus strengthened its supervisory functions over the Board of Directors.
In addition, the Nominating and Compensation Committee is in place as a non-mandatory
body with a majority membership consisting of outside directors. This committee provides

advice to the Board of Directors in order to secure the fairness, transparency and objectivityof the processes used to determine director compensation and nominate officers.
The Nomination and Compensation Committee is chaired by Outside Director Ryo
Tsuchida, with Outside Director Maho Kinami, Outside Director Emima Abe and President &CEO Takashi Okura serving as its members.
The Group has developed a robust management structure while strengthening auditing
functions to ensure strict compliance with laws, regulations and corporate ethics as well as
its articles of incorporation. Moreover, the Group has set up internal control and risk
management systems, both of which are constantly upgraded.

Corporate Governance Organizational Structure
A company with auditors

Number of directors (of whom, outside directors)

13 (7)

Number of Audit & Supervisory Board members(of whom, outside members)

3 (2)Number of independent directors and Audit & Supervisory
Board members (within which, outside directors andoutside Audit & Supervisory Board members)

9 (7;2)

Directors’ term

One year

Frequency of Board of Directors’ meetings

Monthly (plus extraordinary meetings convened
on an as-needed basis)

Number of Board of Directors’ meetings held during fiscal 2023

12

The establishment of an internal audit department

Yes

Adoption of an executive officer system

Yes

Advisory body supporting president’s decision making

Group Executive Council

Remuneration systems for directors andAudit & Supervisory Board members

Directors: Determined based on individual
contributions to annual operating results
Audit & Supervisory Board members:
Determined based on comprehensive assessments
of individuals’ auditing skills and track records

Accounting auditor

Deloitte Touche Tohmatsu LLC

Systems for supporting outside directors andoutside Audit & Supervisory Board members

Persons in charge of support are appointed
from Corporate and Legal Affairs

General Meeting of Shareholders
Appoint/Dismiss

Oversight
Confirm
ReportAudit & Supervisory Board:
Audit & Supervisory
Board Member,
Outside Audit &Supervisory Board Members
Confirm

Accounting
auditSupervision
President and CEO

Appoint/
Dismiss

Internal Audit Department

Nomination andCompensation
Advisory
Committee

Thorough supervisionand compliancewith policies

Group Executive Council

Decide/Approve

Decide/Approve

ReportConfirm

Consult/
AdviseNoevir Holdings
Board of Directors:
Directors andOutside Directors

AuditInternal audit
ReportManagement guidance/
Approval for important matters
Internal Audit

Operating Companies

Noevir Holdings’ Divisions

Reporting

Legal Counsel

Type of governance model

Independent Auditor

Corporate Governance Structure Overview

Noevir Holdings Annual Report 2023

14

Research and Development, Quality Assurance
The Noevir Group is taking full advantage of R&D capabilities and assets inplace at research facilities run by Group companies, which handle cosmetics,
pharmaceuticals and food, to expand the scope of its research activities andto promote the ongoing development of products with distinctive strengths.
The Group is thus rallying its overall resources to take on the challenge ofentering new R&D fields as it strives to enhance the market competitivenessof its products. Also, we are actively engaged in collaboration with universities,
medical institutions and other external research organizations with the aim ofcreating unique products that are insulated from price competition.

Research and Development

Quality AssuranceWith the Noevir Group Research Laboratory in Shiga Prefecture serving as the core, our robust
network of R&D facilities includes the Tokyo Research Laboratory, Suzuka Alpine Plants
Research Center, Minami Daito Island Marine Research Center and Hokkaido Shokanbetsu
Mountain Pilot Farm. These facilities engage in basic research on such subjects as native plantsthat thrive in extreme climates.
In addition, we have long been focused on creating synergies by engaging in external
collaboration with a range of partners and by rallying the Group’s R&D resources, including
those of Noevir Co., Ltd. and TOKIWA Pharmaceutical Co., Ltd. In March 2023, the Hokkaido
Shokanbetsu Mountain Pilot Farm succeeded in developing a novel type of Echinacea purpurea
extract. This extract enhances the positive effects of acylceramides, naturally occurring
substances that play an important part in the skin barrier function. We have thus promoted thedevelopment of skincare products via the application of this research finding.
Recently, consumer awareness regarding skincare and makeup has grown in step with therelaxation of protocols on wearing masks. With this in mind, we will promote R&D activities
aimed at exploring new possibilities of cosmetics, pharmaceuticals and food, harnessing theirpotential to enhance customers’ quality of life (QOL).

The Noevir Group provides high-quality products capable of satisfying stringent safety
standards designed to live up to customer expectations. The Shiga Factory maintains an
in-house manufacturing management system encompassing all its production lines in addition
to a management system established in conformity with the technical requirements stipulated
in Good Manufacturing Practice (GMP) guidelines for the manufacture and quality control ofcosmetics. Also, this factory undergoes annual examinations conducted by a third-party
certification body to determine its conformity with ISO 22716: Cosmetics—Good
Manufacturing Practices (GMP).
The Mie Factory, meanwhile, is certified by Mie Prefecture as a food manufacturing facility
satisfying Hazard Analysis and Critical Control Point (HACCP) standards for voluntary hygiene
management, while maintaining compliance with Standards for Manufacturing Control andQuality Control for Drugs and Quasi-drugs (pharmaceutical GMP based on a ministerial
ordinance). Having put in place ever more sophisticated quality assurance systems, this factoryis engaged in the production of such offerings as energy drinks and other health foods.

The Noevir Group Research Laboratory

The Mie Factory

Noevir Holdings Annual Report 2023

15

Management’s Discussion and Analysis

Overview
During fiscal 2023 (October 1, 2022 to September 30, 2023), economic trends remained
uncertain, although some signs of gradual recovery were observed.
Against this backdrop, the Company worked to realize the concept of its medium-term
management plan: “Realizing steady corporate growth by securing sustainability in every
Group business segment.”
As a result, net sales for the fiscal year ended September 30, 2023 came to ¥62,552
million. The cost of sales amounted to ¥19,988 million and as a percentage of net sales was
32.0%. Selling, general and administrative (SG&A) expenses were ¥31,540 million and as apercentage of net sales were 50.4%, reflecting the Group’s efforts to streamline advertising

Segment Information
Cosmetics

Pharmaceuticals & Health Food

Sales in the Cosmetics segment
totaled ¥48,175 million, and segment
income came to ¥11,867 million.
These results represent increases inboth revenues and profit comparedwith the previous fiscal year. In faceto-face channel ­cosmetics, overall
revenues from skincare products
declined despite robust sales of theNoevir Speciale skincare line.
However, self-selection cosmetics
enjoyed favorable results thanks to
the updating of skincare product lines
as well as higher sales of makeup
products on the back of the March2023 lifting of pandemic-related
movement restrictions and resulting
recovery in shopper traffic.

Sales in the Pharmaceuticals & Health
Food segment totaled ¥11,985 million,
and segment income came to ¥1,185
million. Compared with the previous
fiscal year, this segment thus saw
increases in both revenues and profit.
While sales of functional drinks andnutritional supplements remainedrobust, the release of new products
contributed to sales, leading tohigher revenues.
Other
Sales in the Other segment came to¥2,391 million, while segment income
came to ¥260 million. A decline in sales
from aircraft-related operations led todecreases in segment revenues and profit.

and sales promotion costs. As a result, operating income was ¥11,024 million, and net
income attributable to owners of the parent came to ¥7,673 million. The Group has thus
seen increases in both revenues and profit. The operating income margin stood at 17.6%,
suggesting consistently high profitability.
Although a gradual economic recovery is anticipated, the outlook is expected to remain
uncertain because of such factors as the risk of downward pressure on consumer spending
due to rising prices. However, the Company’s consolidated forecast for the fiscal year ending
September 30, 2024 is for net sales of ¥63,000 million, operating income of ¥11,200 million,
and net income attributable to owners of the parent of ¥7,800 million.

Assets, Liabilities and Net Assets

Cash Flows

Total assets on a consolidated basis as of September 30, 2023
stood at ¥77,246 million, an increase of ¥464 million fromthe previous fiscal year-end. The main changes were an
increase of ¥1,524 million in notes and accounts receivable
and a decrease of ¥864 million in cash and cash equivalents.
Total liabilities came to ¥24,040 million, a decrease of ¥356
million from the previous fiscal year-end. This was mainly due
to a decrease of ¥418 million in long-term ­guarantee deposits.
Net assets came to ¥53,205 million, an increase of ¥820
million from the previous fiscal year-end. This was primarily
attributable to an increase of ¥329 million in retained earnings
and an increase of ¥329 million in net unrealized gain onother securities, the former of which reflects the recording of
net income attributable to owners of the parent of ¥7,673
million, with these positive factors partially offset by the­payment of ¥7,343 million in dividends at the previous fiscal
year-end.
As a result, the equity ratio stood at 68.3%, up 0.5 of a­percentage point from the previous fiscal year-end, and net
assets per share stood at ¥1,545.54, an increase of ¥21.49.

Cash and cash equivalents on a consolidated
basis as of September 30, 2023 stood at¥26,166 million, a decrease of ¥3,364 million
compared with the previous fiscal year-end.
Net cash provided by operating activities
amounted to ¥7,624 million. The main item
increasing cash was ¥11,298 million inincome before income taxes, and the main
item decreasing cash was income tax paidof ¥1,979 million.
Net cash used in investing activities cameto ¥3,544 million. The principal cash outflows
were ¥2,717 million in expenditure fordeposit to time deposits and ¥736 million
for the purchase of property, plant andequipment.
Net cash used in financing activities cameto ¥7,493 million. This was mainly due tothe payment of ¥7,341 million in dividends.

Noevir Holdings Annual Report 2023

16

Five-Year Summary(Millions of yen)

2019

2020

2021

2022

2023

Period/Item

October 1, 2018–
September 30, 2019

October 1, 2019–
September 30, 2020

October 1, 2020–
September 30, 2021

October 1, 2021–
September 30, 2022

October 1, 2022–
September 30, 2023

Net sales¥  59,252¥  51,841¥  51,272¥  61,143¥  62,552

Operating income

11,992

8,060

8,557

10,115

11,024

Net income attributable to owners of the parent

7,226

5,618

6,383

7,589

7,673

Total assets

83,33080,05280,44876,781

77,246

Net assets

52,94652,24352,23352,38453,205

Capital expenditures

1,994

1,456

539

605

974

Depreciation

1,808

1,668

1,463

1,420

1,189

R&D expenses*

1,097

1,065

1,041

1,063

1,029

Cash dividends per share (yen)¥  200.00¥  205.00¥  210.00¥  215.00¥  220.00

Earnings per share (yen)**¥  211.57¥  164.48¥  186.88¥  222.20¥  224.66

Net assets per share (BPS) (yen)¥1,543.72¥1,521.77¥1,520.27¥1,524.05¥1,545.54

ROE (%)

13.8%

10.7%

12.3%

14.6%

14.6%

Equity ratio (%)

63.3%

64.9%

64.5%

67.8%

68.3%

Number of employees (consolidated)

1,530

1,507

1,453

1,398

1,368

¥  45,175¥  38,742¥  38,325¥  47,032¥  48,175

13,183

9,505

9,600

10,814

11,867

Net sales

12,036

11,273

11,117

11,408

11,985

Segment income

1,312

1,261

1,442

1,157

1,185

2,041

1,825

1,828

2,703

2,391

70

10

156

381

260

Fiscal Year

Cosmetics
Net sales
Segment income
Pharmaceuticals & Health Food

Other
Net sales
Segment income* The total of R&D expenses recorded as part of SG&A expenses and those recorded as part of production costs during the fiscal year under review.
** The calculation of earnings per share takes into account the annual average of total number of stocks outstanding, excluding treasury stock.
Note: Above figures for the fiscal year ended September 30, 2022 are based on “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29: March 31, 2020), etc., adopted at the beginning of said fiscal year.

Noevir Holdings Annual Report 2023

17

Financial Highlights
Net Sales

Operating Income / Operating Income Margin(¥ million)
80,000(¥ million)
20,00060,00059,252

61,143
51,841

62,55220.2
15,00051,272

15.5

11,992
10,00040,000

8,060

8,557

16.5
10,115

17.6
11,0245,000

20,0000

0FY2019FY2020

FY2021

FY2022

FY2023

FY2019FY2020

FY2021

FY2022Equity Ratio

67.8

66

64.9

68.3

210

222.20211.57164.48224.66186.88

10

6

5

0

0
FY2019FY2022

FY2023

FY2020

320

124.6

14.6

14.6

FY2022

FY202312.3

FY2021205.00

(%)
125

112.4

94.5

200.000
FY2021

10.7

240

64.5

60

Equity ratio

12

13.8

(¥)
400

70

FY2020

15

140

63.3

FY201918

Cash Dividends per Share / Payout Ratio

(¥)
280

69

(%)
20

ROE

Earnings per Share

(%)
72

(%)
24

FY2023Operating income
Operating income margin

Net sales

63

16.7

ROE

210.0096.8

97.9

215.00220.00

FY2020Earnings per share

FY2021

FY2022

FY2023

75

160

50

80

25
0

0
FY2019100

FY2019FY2020Cash dividends per share
Payout ratio

FY2021

FY2022

FY2023

Noevir Holdings Annual Report 2023

18

Principal Consolidated Subsidiaries (As of September 30, 2023)

Name

LocationIssued Share Capital(millions of yen,
except as otherwise stated)

Direct or Indirect
Ownership by theCompany (percent)Principal Business

Noevir Co., Ltd.

6-13-1 Minatojima-nakamachi, Chuo-ku,
Kobe 650-8521, Japan

¥7,319100.00

Production and sale of cosmetics, toiletries and food products as well aspurchase and sale of makeup items and apparel

TOKIWA Pharmaceutical Co., Ltd.

6-13-1 Minatojima-nakamachi, Chuo-ku,
Kobe 650-8521, Japan

¥4,301100.00

Production and sale of cosmetics, toiletries and food products as well aspurchase and sale of makeup items/Production and sale of over-the-counter(OTC) pharmaceuticals and quasi-drugs

TOKIWA Medical Service Co., Ltd.

6-13-1 Minatojima-nakamachi, Chuo-ku,
Kobe 650-8521, Japan¥98

100.00

Sale of cosmetics, toiletries and food products as well as purchase and sale of
makeup items/Production and sale of over-the-counter (OTC)
pharmaceuticals and quasi-drugs

Bonanza Co., Ltd.

6-13-1 Minatojima-nakamachi, Chuo-ku,
Kobe 650-8521, Japan¥10

100.00

Production and sale of cosmetics and toiletries as well as purchase and sale of
makeup items

Noevir Aviation Co., Ltd.

2-12 Yao Airport, Yao, Osaka 581-0043, Japan

¥35

100.00

Air transportation and provision of charter flights, ground handling services
and hangar rental

Nihon Flight Safety Co., Ltd.

Tokyo Heliport
4-7-44 Shinkiba, Koto-ku, Tokyo 136-0082, Japan

¥100

100.00

Provision of aircraft flight training

Noevir Holding of America, Inc.

1095 Main Street, Irvine, California 92614, U.S.A.

US$7,250 thousand

100.00Holding company for two U.S. subsidiaries and one Canadian subsidiary

Noevir U.S.A., Inc.

1095 Main Street, Irvine, California 92614, U.S.A.

US$5,900 thousand

100.00

Sale of cosmetics, makeup products, toiletries and food products

Noevir Canada, Inc.

7360 River Road,
Richmond, British Columbia V6X 1X6, Canada

C$1,131 thousand

100.00

Sale of cosmetics, makeup products, toiletries and food products

Noevir Aviation, Inc.

200 West Grand Avenue, Montvale,
New Jersey 07645, U.S.A.

US$1,350 thousand

100.00Purchase and sale of aircraft and vessels as well as aviation-related operations

Noevir Taiwan, Inc.

8th Fl.-2, No. 111 Songjiang Road,
Zhongshan District, Taipei City 10486, Taiwan

NT$31,000 thousand

100.00

Sale of cosmetics, makeup products, toiletries and food products

Shanghai Noevir Co., Ltd.

Room 605, Hongwell International Plaza A,
No.1600, Zhongshan West Rd., Xuhui District
Shanghai 200235, China

5,000 thousand
Chinese yuan

50.00

Sale of cosmetics, makeup products and toiletries as well as procurement andsale of sales promotion goods for the Noevir Group

Noevir Europe s.r.l.

Via Tre Settembre, 99 (3°-#116) 47891 Dogana,
Republic of San Marino

26,000 euro

100.00Market research in Europe

19Noevir Holdings Annual Report 2023

Board of Directors and Auditors (As of December 8, 2023)

Name

Chairman and
Representative Director

Hiroshi Okura

President and CEO

Takashi Okura

Managing Director

Ikkou Yoshida

Directors

Audit & Supervisory
Board Member

Outside Audit &Supervisory Board
Members**—
CEO of Noevir Holding of America, Inc.
—

Yasuo Kaiden

President and CEO of Noevir Co., Ltd.

Masataka Nakano

Representative Director, Chairman and President of
TOKIWA Pharmaceutical Co., Ltd.

Takeshi Okura

Outside Directors*

Profiles—Ryo Tsuchida

Outside Director of UPR Corporation
Professor of Sophia Law School
Attorney-at law, Frontier Law Firm

Maho Kinami

Representative of Kinami Law OfficeOutside Audit & Supervisory Board member ofSourcenext Corporation

Emima Abe

Attorney at Miyamasuzaka the Firm Law & Accounting OfficeOutside Director of B-R 31 Ice Cream Co., Ltd.
Outside Director (Audit and Supervisory Committee Member)of Lifenet Insurance Company

Mari Ishimitsu

Attorney-at-law, Mikan Law Office

Haruhi Kuroda

Attorney-at law, Homma & Partners
Outside Director of Saison Information Systems Co., Ltd.

Emi Kanagasaki

Representative of Jujo Oji Law Office

Mari Tomita

Attorney-at law, Shiroyama Tower Law Office

Takashi Oyama—

Kazuya Sugimoto

Representative of Sugimoto CPA Office

Kayo Sato

Representative of LAW OFFICE TAITO
Outside Audit & Supervisory Board member ofAdvanced Media, Inc.
Outside Director of ISB Corporation(Audit and Supervisory Committee member)* Independent directors** Independent Audit & Supervisory Board members

Investor Information (As of September 30, 2023)
Name

Noevir Holdings Co., Ltd.

Date of
Establishment

March 22, 2011 (Noevir Co., Ltd. was founded in April 1964.)

Paid-in Capital¥7,319 million

Headquarters

Kobe

6-13-1 Minatojima-nakamachi, Chuo-ku, Kobe 650-8521, Japan

Tokyo

7-6-15 Ginza, Chuo-ku, Tokyo 104-8208, Japan

Stock Listing

Tokyo Stock Exchange (Prime Market) [Ticker:4928]

Transfer Agentand Registrar

Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku, Tokyo 100-8233, Japan

Number of
Shares Held(thousands)

Percentage ofShareholding(%)

NII Co., Ltd.

12,382

36.25

Takashi Okura

3,700

10.83

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

2,461

7.21

Hiroshi Okura

1,000

2.93

Sumitomo Mitsui Banking Corporation

900

2.63

Custody Bank of Japan, Ltd. (Trust Account)

821

2.41

JAPAN POST INSURANCE Co., Ltd.

502

1.47

Noevir Holdings Employees Shareholdings Scheme

369

1.08

Nihon Kolmar Co., Ltd.

310

0.91

Sumitomo Life Insurance Company

300

0.88

Name

Major
Shareholders

Note: The shareholding ratio is calculated excluding treasury stock (270 shares) and is rounded off to two decimal places.

Forward-Looking Statements
Statements in this annual report with respect to Noevir Holdings’ plans, strategies, projected financial results and beliefs as well as other statements that are not historical facts are forward-looking statements based on information currently available, and such statements
involve risks and uncertainties that could cause actual results to differ substantially from expectations.

7-6-15 Ginza, Chuo-ku, Tokyo 104-8208, Japan
Phone: +81-3-5568-0305 Fax: +81-3-5568-0441

https://www.noevirholdings.co.jp/english/