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/

ANNUALREPORT

2019

Year ended September 30, 2019

Printed in Japan using environment-friendly ink and paper.

Business Model
Segment Information

Fiscal 2019 Sales by Segment

Cosmetics

76.2%

The Group develops, produces and sells a versatilecollection of products under well-regarded brandnames, including Noevir high-performance functional
face-to-face channel 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
the contract manufacturing of cosmetics.

20.3%

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 featuring highquality natural ingredients.

Other

The Other segment encompasses apparel andaircraft sales and leasing.

Pharmaceuticals& Health Food

3.5%

Other

Channels

3.5%• Face-to-face Sales• Drugstores• Specialty Goods Stores• GMS (General Merchandise Stores)• Supermarkets• Online Stores• Noevir’s Own Retail Stores• Convenience Stores• Contract Manufacturing¥2,041 million

Channels• Face-to-face Sales• Convenience Stores• Drugstores• GMS (General Merchandise Stores)• Supermarkets• Online Stores• Contract Manufacturing

Channels• Face-to-face Sales

Cosmetics

76.2%

Pharmaceuticals& Health Food

20.3%

¥45,175 million¥12,036 million

Sales in the Cosmetics Business by Sales Route

Luxury Line

Standard Line

Face-to-face Channel Cosmetics
Cosmetics principally
represented by prestige
products sold throughface-to-face sales channels• Approximately 1,900 NOEVIR Beauty Studios operate
in regions around the country, while Noevir’s own
retail stores cover mainly metropolitan areas• These sales outlets engage in face-to-face sales
employing consulting to both propose skincare
products and provide facials• Our high-end skincare products have garnereda solid reputation due to their superior antiaging and skin-brightening functionalities

Self-selection Cosmetics
A Unique Approachto R&D and Robust
Manufacturing Systems
Capable of Achieving
both High Quality andEnvironmental Friendliness• Expanding the scope of R&D and applying our expertisein botanical research, a field in which we have been
engaged since our founding, as well as brain science,
genetics and neuroscience to deliver a constant stream ofunique products, with the Noevir Group ResearchLaboratory serving as a core facility• 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

Cosmetics principally
represented byaffordably priced
products soldthrough generalretailers• Sold mainly through drugstores, specialty goods
stores and general merchandise stores• 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

Overseasbusiness
Sales of face-to-facechannel cosmetics andself-selection cosmetics innine regions overseas:
China, Taiwan, South
Korea, Hong Kong,
Singapore, Thailand,
the United States,
Canada and Russia

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

ANNUAL REPORT 20191

Medium-Term Management Plan

History of the Noevir Group

Medium-term Management Plan Concept:

Noevir Co., Ltd.

“Realizing steady corporate growthby securing sustainability
in every Group business segment”
Having established a medium-term management plan with its final year set at fiscal 2022, the Noevir Group is striving tobest accommodate ever changing and increasingly diverse market needs. In addition to executing the following five
policies aimed at steadily achieving the objectives of the plan, we have positioned net sales, operating income and returnon equity (ROE) as key management indicators, thereby maximizing our corporate value and enhancing profitability.

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
Bonanza Co., Ltd. established, initiating the OEM of cosmetics

2001
2002

Five policies

2004

1. Pursue innovation and continuous profit generation in the domestic market

2005

2. Enhance our brand value

2007
2011

3. Accelerate efforts to diversify human resources and our corporate structure

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
Noevir Co., Ltd. made TOKIWA Pharmaceutical Co., Ltd. its subsidiary, entering the pharmaceutical business
TOKIWA Pharmaceutical Co., Ltd. merged with Nov Co., Ltd. and Sana Co., Ltd.
Noevir stock listed on the JASDAQ Securities Exchange
Noevir Europe s.r.l. established in San Marino
Shanghai Noevir Co., Ltd. established as a joint venture
Noevir stock listed on the Second Section of the Tokyo Stock Exchange
Noevir Holdings Co., Ltd. established, with Noevir Co., Ltd. delisting its stock and becoming the former’s subsidiary

Noevir Holdings Co., Ltd.

4. Strengthen our competitiveness by stepping up the diversification of our
R&D, production and logistics systems

2011
2012

5. Promote a management approach that is responsive to changes
in the business environment

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

Numerical Achievements and Targets(Millions of yen)

Net sales

OperatingincomeROE

Fiscal 2019
results¥59,252¥11,992

13.8%

Fiscal 2020

¥59,800¥12,300

15%(¥ million)(%)

14,00011,992

12,30012,60013,00015

10,500

15.0

15.0

15.0

7,000

14

13. 8
3,500

Fiscal 2021

¥60,400¥12,600

13

15%
0

Fiscal 2022

¥61,000¥13,000

15%

12

FY2019FY2020Operating income

2

ANNUAL REPORT 2019

16

FY2021

FY2022ROE

ANNUAL REPORT 20193

Management Report

We Are Meeting Rapidly Evolving Market Needs
via the Combined Application of Our Latest R&D Findings
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 self-selection 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 steady corporate growth by securing sustainability in every Group businesssegment,” we have endeavored to strengthen our competitiveness, to this end enhancing our brand value, 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 2019 Business Results
In fiscal 2019, the Japanese economy continued to register amodest but steady recovery, mainly due to further improvements
in corporate earnings and the employment situation. However,
future economic trends remained uncertain due to such factors asincreasing volatility in economies overseas. Nevertheless, in thedomestic cosmetics market a growing number of quasi-drugs havebeen introduced to meet anti-aging solution needs, while makeup
awareness among young adults has become stronger than ever.
Thanks to these factors, the market continued to grow in size.

Against this backdrop, the Noevir Group took full advantage
of findings from its cutting-edge R&D activities to upgrade
existing lines and maintain a stream of new products. As a result,consolidated net sales came to ¥59,252 million, while operating
income totaled ¥11,992 million. Net income attributable toowners of the parent amounted to ¥7,226 million. The operating
income margin was 20.2%, up 0.6 of a percentage pointcompared with the previous fiscal year. The Group has thusachieved a fifth consecutive year of record-high operating income.

Our Fiscal 2019 Initiatives
Our medium-term management plan, aimed at helping us
realize more profitable business management, places ongoingemphasis on the efficient utilization of management resources
and sets forth initiatives for earning customer loyalty.
In November 2019, we updated the plan’s five policies inlight of the latest market trends. Please refer to page 2 fordetails regarding our management targets.
In fiscal 2019, our Cosmetics business achieved increases inboth revenues and profit. With regard to face-to-face channel
cosmetics, strong showings of high-end cosmetic products
contributed to segment sales. In particular, the inclusion of
makeup products in the lineup of our most prestigious skincare
line, Noevir SPECIALE, helped us acquire new customers andexpand sales. We also opened NOEVIR SALON DE SPECIALE
GINZA, adding yet another luxury-oriented outlet to the
network of our own retail stores, in line with our aim ofenhancing brand capabilities and recognition. Furthermore,
we released Noevir Enrich 77 anti-aging serum. Thanks to theapplication of the Noevir Group’s expertise in botanical researchand the latest findings in dermatology, this product garnered asolid reputation in the market for functional skincare products.
Showings of our self-selection cosmetics also remainedrobust. In particular, the excel brand makeup line succeeded in

4

ANNUAL REPORT 2019

introduction of new products and an increase in the number of
distribution outlets. We also expanded the lineup of ourmainstay skincare brand, Nameraka Honpo, in an effort tobroaden the range of customers.
The Pharmaceuticals & Health Food business saw a decrease
in revenues and an increase in profit. Nanten Nodo Ame coughdrops, our flagship pharmaceutical brand, continued to earnsolid customer support thanks mainly to the release of offerings

with specially designed packages aimed atcelebrating its 50th anniversary as well as
the introduction of new products.
The Other business segment, which
encompasses apparel- and aircraft-related
operations, recorded an increase inrevenues and a decrease in profit.
Noevir Enrich 77

Future Outlook
In the Cosmetics business, consumer expectations for highly
functional cosmetics are growing due to R&D advances affecting
efficacy and user experience. With this in mind, we will continue
to promote face-to-face channel cosmetics with strong
profitability, thereby seizing opportunities arising from future
growth in market demand. In particular, we have positioned
beauty serums as a mainstay product category and intend todevelop a constant stream of products offering anti-aging
functions and capable of providing users with a superior
skincare experience. By doing so, we will expand our customer
base for the various skincare lines.
In addition, we will improve the service quality and sales
capabilities of NOEVIR Beauty Studios, our primary points ofcontact with customers, in order to attract additions to andnurture our existing loyal customer base. To increase sales ofself-selection cosmetics, we will endeavor to capture an evenbroader range of customers by introducing new products inthe mainstay Nameraka Honpo, excel and hypoallergenic NOV
brand lineups. We will also focus on storefront promotional
activities aimed at evoking a sense of intimacy andcommunicating the quality of our products to shoppers in aneffort to draw in and win over a diverse range of customers.

Taking these factors into account, our consolidated
performance forecasts for fiscal 2020 (from October 1, 2019
to September 30, 2020) comprise net sales of ¥59,800 million,
operating income of ¥12,300 million and net income
attributable to owners of the parent of ¥8,500 million.

A sales promotion event for the excel makeup line

Our Policy regarding Shareholder Returns
NOEVIR SALON DE SPECIALE GINZA

securing an even broader customer base as we introduced new
products, which, in turn, contributed to sales, while raising thenumber of distribution outlets handling this line. In addition tosales of the New Born and Pore Putty brand makeup lines
growing, sales of the NOV brand skincare line rose due to theWe have positioned the return of profit to our shareholders as
an important management issue. In line with our basic policy of
ensuring stable shareholder returns, we have implemented suchmeasures as the cancellation of treasury stock via the repurchaseof shares while giving due consideration to the latest trends in
the Group’s operating results. As for full-year cash dividends forfiscal 2019, we decided to pay out ¥200 per share. Not only is
this amount ¥20 higher than ¥180 per share paid as full-year
cash dividends for fiscal 2018, it is our eighth consecutive annual

increase in dividends. Reflecting this move, our dividend payout
ratio came to 94.5%. For fiscal 2020, we plan to pay ¥200 per share.
Striving to contribute to health and beauty, the Noevir
Group has long been helping people maintain and improvetheir quality of life through its business operations. Thanks tothis dedication, the Group has won the trust of society. Looking
ahead, we will continue to enhance our corporate value whileboosting our ability to quickly and flexibly accommodate market
changes and diversifying needs.

ANNUAL REPORT 20195

Face-to-face Channel Cosmetics

Main Brands• Noevir SPECIALE• Noevir 99 Plus
• Noevir 505• Noevir 105• Noevir 80 pure
• Noevir EXTRA• Noevir TOUT BLANC• Noevir BIOSIGN

Product Strategy

Sales Strategy

Our face-to-face channel cosmetics brand portfolio consists mainlyof 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 of which are periodically expanded andrenewed to reflect our latest R&D accomplishments.
In fiscal 2019, we released Noevir Enrich 77, an anti-aging
serum created through the application of botanical researchexpertise and the latest findings in dermatology—a field in which
our knowledge is deep and longstanding—to draw on thebeneficial effects of retinol on certain skin conditions. We also
released Noevir MOISTURE LIFT, another anti-aging serum.
This serum employs Q10 coenzyme and five different peptides
that together vitalize the skin and improve its moisture retention
and elasticity. In addition, we strove to expand the makeup line
under our most prestigious skincare brand, Noevir SPECIALE.
Specifically, we released attractive point makeup* products
designed to entice a growing number of customers into choosing
this brand’s skincare products.
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 withsuperior functionality.

The Noevir Group markets its face-to-face channel cosmetics
brands mainly through face-to-face sales channels backed bybeauty studios while also offering them through Noevir’s own
retail stores. 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 andtechniques that meet strict standards. As of September 30, 2019,
approximately 1,900 salons have been certified.
With regard to its retail stores, Noevir’s network has been up
and running in major cities across Japan since 2007. In August
2019, Noevir augmented this network with the opening of
NOEVIR SALON DE SPECIALE GINZA, an outlet that provides
customers with the trial use of the Noevir SPECIALE lines.
Furnishing contact points with potential customers, this network
now consists of 10 outlets, including eight NOEVIR Style storescovering metropolitan areas as well as two NOEVIR SALON DE
SPECIALE outlets designed to offer high-end services in luxury
settings. Through the operation of its own retail stores, Noevir
strives to enhance customer understanding of the importance ofconsulting, stimulate purchasing and promote brand recognition.

* Products for eyes, cheeks and lips

Noevir MOISTURE LIFT

6

ANNUAL REPORT 2019Noevir SPECIALE skincare line

Noevir 505 skincare line

Noevir 99 Plus skincare line

ANNUAL REPORT 20197

Self-Selection Cosmetics, Pharmaceuticals & Health Food
Product Strategy

Sales Strategy

With regard to self-selection cosmetics targeting the general retailmarket, Nameraka Honpo—our mainstay brand of affordable
skincare products—is the market leader* in terms of soymilk-basedskincare products, while the hypoallergenic NOV brand enjoys
considerable market share in Japan. We have been enriching these
two brands, both of which boast lines with distinctive functionalfeatures, and steadily expanded our customer base.
In addition, the Noevir Group’s unique product planning strategies
have helped the popular excel brand makeup line garner a solid
reputation among consumers in Japan and other Asian countries,
and the line’s large number of loyal customers cover a broad age range.
At the same time, our Pharmaceuticals & Health Food segmentprovides an array of unique products, including the long-selling
Nanten Nodo Ame cough drops, Min Min Da Ha functional drinks
and GRONVITER nutritional drinks.

As for the marketing channels for self-selection cosmetics, theGroup utilizes such general retailers as general merchandise
stores, drugstores and specialty goods stores. With regard topharmaceuticals, the Group markets a variety of products,
including functional drinks and cough drops, through suchoutlets as drugstores and convenience stores in addition toemploying face-to-face sales channels to secure contracted
households and companies to which products are delivered on
regular basis.
Looking to enhance brand recognition and anunderstanding of our products among the general public, weare engaged in ongoing sales promotion initiatives via social
networking services (SNSs). In particular, we are working tocapture new customers for the Nameraka Honpo skincare brandand the excel brand via storefront promotional campaigns
aimed at making a lasting impression. At the same time, we aim
to boost sales of NOV brand hypoallergenic cosmetics by* Based on the storefront sales of self-selection skincare products incorporating
soymilk ingredients calculated from POS data gleaned by five retailers fromJanuary to June 2019

Nameraka Honpo skincare brand lineup

stepping up collaboration with medical institutions. These
initiatives are designed to communicate product information in
a way that evokes a sense of intimacy and trust.
In addition, the Group undertakes the contract
manufacturing of cosmetics and quasi-drugs on an OEM basis.

Main Brands• Nameraka Honpo• excel• Pore Putty• New Born
• NOV• Nanten Nodo Ame• Min Min Da Ha• GRONVITER• VITACA display at an overseas sales outlet carrying the excel brand makeup line

Nameraka Honpo skincare brand lineup

excel brand makeup lineup

Pore Putty makeup brand lineup

New Born makeup brand lineup

NOV brand lineup

Nanten Nodo Ame cough drop brand lineup

Min Min Da Ha functional drink brand lineup
GRONVITER nutritional drink brand

NOV hypoallergenic
cosmetics displayed
at a retail store in Taiwan

8

ANNUAL REPORT 2019

ANNUAL REPORT 20199

Research and Development, Quality Assurance

Corporate GovernanceContinually striving to expand the scope of its R&D activities, the Noevir Group has built a wealth of expertise in brain
science, genetics and neuroscience in addition to its strengths in botanical research—a field in which it has been
engaged in since its founding. Moreover, the Group is rallying its overall strengths to take on the challenge of entering
new R&D fields as it strives to enhance the market competitiveness of its products. Also, we are actively engaged incollaboration with universities, medical institutions and other external research organizations with the aim of creating
unique products that are insulated from price competition.

1. Fundamental Concepts of Corporate GovernanceResearch and Development
With the Noevir Group Research Laboratory in Shiga
Prefecture serving as the core, our robust network of
R&D facilities includes the Suzuka Alpine Plants
Research Center, Minami Daito Island Marine ResearchCenter and Hokkaido Shokanbetsu Mountain Pilot
Farm. These facilities engage in basic research on such
subjects as native plants that thrive in extreme climates.
In 2016, the Noevir Group began helping the
University of Tokyo’s Department of Immunology
provide an endowed course on osteoimmunology,
and the second round of this course has been ongoingsince May 2019. In addition to collaborating with
universities, medical institutions and other external
research organizations, we are rallying R&D resources
across the Group, including those of Noevir Co., Ltd.
and TOKIWA Pharmaceutical Co., Ltd., to createsynergies that will yield cutting-edge research findingsthat can be applied to the development of cosmetics
and such health foods as nutritional supplements.

Quality Assurance

10

ANNUAL REPORT 2019

To deepen the understanding of its stakeholders and ensure
their appropriate evaluation, Noevir Holdings voluntarily andconsistently discloses important information pertaining to theGroup in a fair, timely and appropriate manner. To disseminate
investor relations (IR) information, Noevir Holdings established a
dedicated division, appointed a director to be in charge of IR, andregularly holds briefings for analysts and institutional investors in
addition to updating IR information posted on its website.

2. Corporate Governance Structure Overview
Type of governance model

A company with auditors

Number of directors(of whom, outside directors)

8 (3)Number of corporate auditors(of whom, outside corporate auditors)

3 (2)Number of independent directors andcorporate auditors (within outside
directors and corporate auditors)

5 (3:2)

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 201912

The establishment of
an internal audit department

Yes

Adoption of an executive
officer system

Yes

Advisory body supportingpresident’s decision making

Group Executive Council

The establishment of anomination and compensation
advisory committee

Chair: Outside director; Committee
members: President and CEO and an
outside corporate auditor

Accounting auditor

Deloitte Touche Tohmatsu LLC

Systems for supporting outside
directors and corporate auditors

Persons in charge of support are
appointed from Corporate Affairs
Department

3. Fundamental Concepts of Internal Control System
To ensure the appropriate and sound execution of its Group
operations, Noevir Holdings undertakes the storage,
management and streamlining of information associated withthe execution of directors’ duties while endeavoring to maintainclarity in its risk management structure as well as to strengthen
and promote its compliance structure under the Corporate

Governance Policy and the Noevir Group Code of Conduct. With
the aim of securing a structure for reporting to a board ofauditors and conducting effective audits and reliable financial
reporting, Noevir Holdings continues to further enhance its
internal control and compliance systems in order to ensure strict
adherence to laws, regulations and its articles of incorporation.

4. Corporate Governance Organizational Structure
General Meeting of Shareholders
Appoint/Dismiss

Oversight

The Noevir Group Research Laboratory

Independent Auditor

Confirm
ReportBoard of Corporate Auditors:
Audit
Standing Corporate Auditor, Outside Auditors

Noevir Holdings Board of Directors:
Directors and Outside Directors
Supervision

Appoint/
Dismiss

Confirm

President and CEO

Accounting audit
ReportConfirm

Internal Audit Department

Nomination andCompensation
Advisory Committee

Thorough supervisionand compliancewith policies

Group Executive
Council

Decide/Approve

Decide/Approve
Internal audit
ReportManagement guidance/
Approval for important matters
Internal Audit

The Mie Factory

Consult/
AdviseLegal Counsel

The Noevir Group provides high-quality products capableof satisfying stringent safety standards designed to live up
to customer expectations. The Shiga Factory has establisheda management system in conformity with the technicalrequirements stipulated in Good Manufacturing Practice (GMP)
guidelines for the manufacture and quality control of cosmetics
alongside its in-house manufacturing management system
encompassing all its production lines. Moreover, this factory
has acquired certification for compliance with ISO 22716:
Cosmetics—Good Manufacturing Practices (GMP)—Guidelines
on Good Manufacturing Practices.
The Mie Factory, meanwhile, was certified by Mie Prefecture
in August 2018 as a food manufacturing facility satisfying Hazard
Analysis and Critical Control Point (HACCP) standards forvoluntary hygiene management, while maintaining compliancewith Standards for Manufacturing Control and Quality Control
for Drugs and Quasi-drugs (pharmaceutical GMP based on aministerial ordinance). Having put in place ever more sophisticatedquality assurance systems, this factory is engaged in the productionof such offerings as energy drinks and other health foods.

To realize the ongoing enhancement of corporate value andmaintain the trust of all of its stakeholders, including shareholders,the Noevir Group has positioned corporate governance as a key
management issue. Accordingly, the Group has developed arobust management structure while strengthening auditing
functions to ensure strict compliance with laws, regulations andcorporate 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.

Noevir Holdings’ divisions

ReportingOperating Companies

ANNUAL REPORT 201911

Corporate Social Responsibility

Management’s Discussion and Analysis

Basic Philosophy

Overview

Fiscal 2019 Results

Working toward the realization of high quality of life for all stakeholders, the Noevir Group is engaged in thecreation of beauty and health. In addition to pursuing further business growth, we have clearly defined the
responsibilities we are called on to fulfill as a good corporate citizen and are implementing proactive initiatives
aimed at contributing to sound social development under five themes: customers and business partners;
shareholders; employees; society; and the environment.

During fiscal 2019 (October 1, 2018 to September 30, 2019),
the Japanese economy continued to register a modest but
steady recovery, mainly due to further improvements in corporate
earnings and the employment situation. However, future
economic trends remained uncertain due to such factors asincreasing volatility in economies overseas.
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,
2019 came to ¥59,252 million. The cost of sales amounted to¥21,039 million and as a percentage of net sales was 35.5%.
Selling, general and administrative (SG&A) expenses were¥26,220 million and as a percentage of net sales came to 44.3%.
Accordingly, the ratio of cost of sales to net sales and the ratioof SG&A expenses to net sales improved year on year by 0.1 of apercentage point and by 0.5 of a percentage point, respectively.
Operating income was ¥11,992 million, and net income
attributable to owners of the parent came to ¥7,226 million.
Of these, operating income was record high.

In the Pharmaceuticals & Health Food segment, the Group saw adecrease in sales of functional drinks and nutritional
supplements from fiscal 2018. However, segment income grew
year on year thanks mainly to initiatives to enhance theefficiency of SG&A expenses.
As a result, segment sales came to ¥12,036 million, while
segment income was ¥1,312 million.

Ongoing Fundraising via Noevir Green Charity

Noevir’s Work Style Reform Initiatives

Since 2010, Noevir Co., Ltd. has been engaged in an ongoingfundraising campaign via Noevir Green Charity, setting aside a
portion of proceeds from designated items sold during biannual
skincare product fairs for donation to the Manaslu fund. Headedby alpinist Ken Noguchi, this fund aims to raise money for school
construction at the foot of the Himalayas and for the provision ofother support of the region’s children. As we are in full agreementwith Mr. Noguchi’s aspiration
to support education andthereby help local
communities thrive, we willencourage a growing numberof Group members to takepart in social contribution
activities of this kind.

The Noevir Group constantly endeavors to enable all of its
employees to strike an optimal balance between their work andfamily duties or other private activities while helping them fully
realize their potential as individuals. In particular, we strive toensure that the career development paths of all individuals in
our workforce are unconstrained by such events as childbirth,child rearing or nursing care. We encourage employees to fully
utilize annual paid leave while striving to minimize overtime.
Moreover, we have implemented various initiatives, including
letting eligible personnel work at locations other than the office
via a telecommuting system, enhancing childcare leave plans,
allowing those engaged in child rearing or nursing care to shorten
their working hours and introducing nursing care leave plans.
In addition, we have formulated concrete action plans and set
numerical targets with an eye to pushing forward initiatives that
support women aiming forcareer success.
Furthermore, we provide
assistance to employees’
health promotion efforts,taking a management
approach that places greatemphasis on ensuring
employee health.

Social contribution activity undertaken
at the foot of the Himalayas(©KEN NOGUCHI OFFICE)

Forest Preservation
at the Rokko Mountain Range
In 2008, as part of its environmental preservation activities, Noevir
Co., Ltd. began engaging in forest preservation at the Rokko
mountain range in Hyogo Prefecture. Noevir Green Foundation
took over the management of this initiative in 2013, and we wereable to celebrate its eleventh anniversary in 2019. With the aim ofreconstructing areas affected by the Great Hanshin-Awaji
Earthquake Disaster, the foundation is currently engaged in tasks
associated with forest administration, including tree trimming,on a quarterly basis. By doing so, it helps protect and nurture agreen belt that safeguards communities from landslides.
As the Noevir Group is tasked with the creation of cosmetics,
pharmaceuticals and health food that incorporate the blessings ofnature, it aspires to pass down an abundant natural environment
to future generations. To thisend, we are focused on
helping conserve a living
environment surrounded byrich nature in addition tomaintaining a robust forestthat functions as a bulwark
against disaster.
Participants in one of the forest preservation
activities undertaken in 201912

ANNUAL REPORT 2019

Segment Information

Cosmetics
Overview
The Group develops, produces and sells a versatile collection of
products under well-regarded brand names, including Noevir
high-performance functional face-to-face channel skincare
products; various popular products for the self-selection
cosmetics market, including the Nameraka Honpo skincare
brand and the excel brand; and the NOV brand. The Group also
undertakes the contract manufacturing of cosmetics.

Fiscal 2019 Results
Proportion of Male and Female Employees in the Noevir GroupMale

headcount

Female52.2%

798

headcount

732

47.8%

headcount

99

25.6%

Pharmaceuticals & Health Food
Overview

Proportion of Male and Female Managers in the Noevir Group

FemaleSales of face-to-face channel cosmetics were solid due to strong
showings of high-end product lines. In self-selection cosmetics,
sales of new and existing product lines were robust.
As a result, the Cosmetics segment saw growth in bothrevenues and profit, with segment sales and income totaling¥45,175 million and ¥13,183 million, respectively.

Maleheadcount

287

74.4%

The Group develops, produces and sells such flagship items as thelong-selling Nanten Nodo Ame cough drop brand, functional
drinks, such as 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 andother products featuring high-quality natural ingredients.

Other
Overview
The Other segment encompasses apparel and aircraft sales
and leasing.

Fiscal 2019 Results
Sales in the apparel-related business and the aviation-related
business performed strongly. As a result, sales in the Other
segment came to ¥2,041 million, while segment income cameto ¥70 million.

Assets, Liabilities and Net Assets
Total assets at the fiscal 2019 year-end stood at ¥83,330 million,
an increase of ¥520 million from the previous fiscal year-end.
This was mainly due to an increase in cash and cash equivalentsof ¥1,964 million.
Total liabilities came to ¥30,383 million, a decrease of ¥427
million from the previous fiscal year-end. This was mainly due toa decrease in guarantee deposits received of ¥503 million.
Net assets came to ¥52,946 million, an increase of ¥947 million
from the previous fiscal year-end. This was primarily attributable toa net increase in retained earnings of ¥1,078 million, reflecting thepayment of ¥6,148 million in year-end dividends for the previous
fiscal year and the recording of net income attributable to ownersof the parent totaling ¥7,226 million.
As a result, the equity ratio stood at 63.3%, up 0.7 of apercentage point from the previous fiscal year-end, and net
assets per share stood at ¥1,543.72, an increase of ¥26.11.

Cash Flows
Cash and cash equivalents on a consolidated basis as of
September 30, 2019 stood at ¥30,448 million, an increase of¥1,746 million compared with the ¥28,701 million at theprevious fiscal year-end.
Net cash provided by operating activities amounted to¥10,191 million. The main item increasing cash was the postingof ¥11,033 million in income before income taxes.
Net cash used in investing activities came to ¥2,067 million.
The principal cash outflow was ¥1,832 million for the purchaseof property, plant and equipment.
Net cash used in financing activities came to ¥6,287 million.
This was mainly due to the payment of ¥6,147 million in dividends.

(As of September 30, 2019)

ANNUAL REPORT 201913

Five-Year Summary

Financial Highlights(Millions of yen)

Net Sales

Fiscal Year

2015

2016

2017

2018

2019

Period/Item

October 1, 2014–
September 30, 2015

October 1, 2015–
September 30, 2016

October 1, 2016–
September 30, 2017

October 1, 2017–
September 30, 2018

October 1, 2018–
September 30, 2019

Operating Income / Operating Income Margin(¥ million)
60,000Net sales¥  49,387¥  51,180¥   54,473¥   57,828¥  59,252

Operating income

7,588

7,706

9,986

11,343

11,992

Net income attributable to owners of the parent

4,890*

5,049

7,077

7,842

7,226

Total assets

87,34889,70993,56782,80983,330Net assets

54,59855,90859,36551,99852,946

Capital expenditures

3,225

2,506

1,497

1,375

1,994

Depreciation

1,237

1,654

1,845

1,850

1,808

R&D expenses**

1,106

1,185

1,134

1,046

1,097

Cash dividends per share (yen)¥  100.00¥  120.00¥  150.00¥  180.00¥  200.00

Earnings per share, basic (yen)¥  136.79¥  142.44¥   199.64¥   228.56¥  211.57

Net assets per share (BPS) (yen)¥1,536.84¥1,573.50¥1,669.18¥1,517.61¥1,543.72

8.9%

9.2%

12.3%

14.1%

13.8%

ROE (%)
Equity ratio (%)

62.4%

62.2%

63.2%

62.6%

63.3%

Number of employees (consolidated)

1,674

1,609

1,560

1,531

1,530

Cosmetics
Net sales

49,387¥  36,031¥  39,197¥  42,616¥  45,175

8,705

9,537

11,002

12,155

13,18359,252

Net sales

13,456

13,243

13,48813,19912,036

Segment income

1,012

170

745

1,309

1,312

Net sales

1,918

1,905

1,788

2,013

2,041

Segment income

(241)

(63)

128

135

70

11,99230,0006,000

15,000

3,000

7,706
50

15.4

15.1

18.3

19.6

20.2

FY2015FY2016FY2017FY2018FY201900FY2015FY2016FY2017

(%)
100

75

7,588

FY2018FY2019Net sales

250Operating income
Operating income margin

ROE

Equity / Equity Ratio(%)(¥ million)
60,000

20

14.1

15

12.3
8.9

13.8

9.2

54,48355,783

62.4

62.2

(%)
100

59,17551,83652,72862.6

63.3

45,00063.2

50

15,00025

00FY2015FY2016FY2017FY201875

30,0000

Pharmaceuticals & Health Food

11,3439,986

5Segment income(¥ million)
12,0009,000

45,00010¥  34,013

54,47351,18057,828FY2015FY2019ROE

FY2016FY2017FY2018FY2019EquityEquity ratio

Other* Net 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.

Earnings per Share, Basic

Cash Dividends per Share / Payout Ratio

(¥)

(¥)
200

300

200.00180.0084.2
228.56225

150

199.64136.79211.57150

120.00142.44100

94.5

150.00

73.1

(%)
100

75.1

75

78.8

100.00

50

75

50

25

0

0

0

FY2015
Earnings per share, basic

FY2016FY2017FY2018FY2019FY2015FY2016FY2017FY2018FY2019Cash dividends per share
Payout ratio

14

ANNUAL REPORT 2019

ANNUAL REPORT 201915

Principal Consolidated Subsidiaries (As of September 30, 2019)

Name

LocationIssued Share Capital(millions of yen,
except asotherwise stated)

Board of Directors and Auditors (As of December 5, 2019)

Direct or Indirect
Ownershipby the Company(percent)

6-13-1 Minatojimanakamachi, Chuo-ku
Kobe 650-8521
Japan¥7,319¥4,301TOKIWA
Pharmaceutical Co., Ltd.

6-13-1 Minatojimanakamachi, Chuo-ku
Kobe 650-8521
Japan

¥98

TOKIWA Medical Service
Co., Ltd.

6-13-1 Minatojimanakamachi, Chuo-ku
Kobe 650-8521
Japan

¥10

Bonanza Co., Ltd.

6-13-1 Minatojimanakamachi, Chuo-ku
Kobe 650-8521
Japan

Noevir Aviation Co., Ltd.

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

¥35

100.00

Air transportation and provision ofcharter flights, ground handlingservices 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 Holdingof America, Inc.

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

US$7,250
thousand

100.00Noevir U.S.A., Inc.

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

US$5,900
thousand

100.00Noevir Canada, Inc.

7360 River Road, RichmondBritish 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 andvessels as well as aviation-related
operations

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

NT$31,000
thousand

5,000
thousand
Chinese yuan

50.00

Shanghai Noevir
Co., Ltd.

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

Noevir Europe s.r.l.

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

26,000euro

100.00Noevir Co., Ltd.

Noevir Taiwan, Inc.

100.00Principal Business100.00100.00100.00100.00

Production and sale of cosmetics,
toiletries and food products as well aspurchase and sale of makeup items
and apparel
Production and sale of cosmetics,
toiletries and food products as well aspurchase and sale of makeup items/
Production and sale of over-thecounter (OTC) pharmaceuticals andquasi-drugs
Sale of cosmetics, toiletries and foodproducts as well as purchase and saleof makeup items/Production and saleof over-the-counter (OTC)
pharmaceuticals and quasi-drugs
Production and sale of cosmetics andtoiletries as well as purchase and saleof makeup items

Holding company for two U.S.
subsidiaries and one Canadiansubsidiary
Sale of cosmetics, makeup products,
toiletries and food products

Sale of cosmetics, makeup products,
toiletries and food products

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

Chairman and Representative Director
Hiroshi Okura

Profiles of Outside Directors

President and CEO
Takashi Okura

Sanae Tanaka

Directors
Ikkou Yoshida
Yasuo Kaiden
Masataka Nakano

Representative of Sanae Tanaka Law OfficeOutside director of PILOT CORPORATION
Outside director of Shochiku Co., Ltd.
Outside director of Kintetsu World Express, Inc.

Maho Kinami

Representative of Kinami Law OfficeOutside director of Advanex Inc.

Emima Abe

Attorney-at-law, Max General Law Firm

Outside Directors
Sanae Tanaka*
Maho Kinami*
Emima Abe*
Standing Corporate Auditor
Masayuki Hamaguchi
Outside Corporate Auditors
Kazuya Sugimoto**
Ryo Tsuchida**

Profiles of Outside Corporate Auditors
Kazuya Sugimoto

Representative of Sugimoto CPA Office

Ryo Tsuchida

Professor of Law, Senshu University
Attorney-at-law, Frontier Law Firm
Outside director of UPR Corp.

* Independent directors** Independent corporate auditors

Investor Information (As of September 30, 2019)
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

Major Shareholders
Percentage
Number ofof Total
Shares Held
Shares lssued(thousands)(percent)Name

NII Co., Ltd.

7,972

23.34

Hiroshi Okura

5,410

15.84

Takashi Okura

3,699

10.83

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

1,250

3.66

Headquarters• Kobe6-13-1 Minatojima-nakamachi, Chuo-ku
Kobe 650-8521, Japan

Japan Trustee Services Bank, Ltd. (Trust Account)

942

2.76

Sumitomo Mitsui Banking Corporation

900

2.63

• Tokyo
7-6-15 Ginza, Chuo-ku
Tokyo 104-8208, JapanNORTHERN TRUST CO. (AVFC)
RE IEDU UCITS CLIENTS NON LENDING 15 PCT
TREATY ACCOUNT

560

1.64

Noevir Holdings Employees Shareholdings Scheme

397

1.16

Japan Trustee Services Bank, Ltd. (Trust Account 5)

382

1.12

Japan Trustee Services Bank, Ltd. (Trust Account 9)

335

0.98

Stock Listing
Tokyo Stock Exchange, First Section (Ticker: 4928)
Transfer Agent and Registrar
Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku, Tokyo 100-8233, Japan

Note: The shareholding ratio is calculated excluding treasury stock (56 shares)
and is rounded off to two decimal places.

Market research in Europe

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.

16

ANNUAL REPORT 2019

ANNUAL REPORT 201917

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/

ANNUALREPORT

2019

Year ended September 30, 2019

Printed in Japan using environment-friendly ink and paper.