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 2021
Year ended September 30, 2021

Printed in Japan using environment-friendly ink and paper.

Business Model

Fiscal 2021 Sales by Segment

Segment Information

Cosmetics

74.7%

The Group develops, produces and sells a
versatile collection of products under wellregarded 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 the contract
manufacturing of cosmetics.

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

Pharmaceuticals & Health Food

21.7%

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.

Channels

Luxury Line
Face-to-face Channel Cosmetics

Cosmetics principally
represented by prestige products
sold through face-to-facesales channels• Approximately 2,000 NOEVIRBeauty Studios operate in regions
around the country, while Noevir’s
own retail stores cover mainly
metropolitan areas• These sales outlets engage inface-to-face sales employing
consulting to both propose skincare
products and provide facials• Our high-end skincare products
have garnered a solid reputation
due to their superior anti-aging andskin-brightening functionalities

Other

Other

3.6 %

The Other segment encompasses
apparel and aircraft sales andleasing.

Channels• Face-to-face Sales

3.6

Pharmaceuticals& Health Food

21.7

¥1,828 million%¥11,117 million

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

A Unique Approach to R&D
and Robust Manufacturing
Systems Capable of Achieving
both High Quality andEnvironmental Friendliness• Employing multiple research facilities run byGroup companies, which handle cosmetics,
pharmaceuticals and food, to expand the scopeof research activities and to promote theongoing development of unique productsthat fully leverage the Group’s diverse
R&D capabilities and assets• Stepping up joint research with external businesscorporations as well as governmental andacademic institutions• Implementing thoroughgoing quality control
while operating environment-friendly
manufacturing systems

%

74.7

%

¥38,325 million

Standard Line
Self-selection Cosmetics

Cosmetics principally
represented by affordably priced products
sold through general retailers• Sold mainly through drugstores, specialty goods
stores and general merchandise stores• Boasting a robust sales structure backed
by storefront promotional campaigns
as well as advertising utilizingSNSs and other media• Product planning capabilities that help
create trendsetting items and uniqueofferings aimed ataddressing specialized
customer needs

OEM(Original Equipment
Manufacturing)
The contract manufacturingof cosmetics and quasidrugs on an OEM basis,
utilizing the Group’s knowhow in both fields

Overseas Business
Sales of face-to-facechannel cosmetics and selfselection cosmetics in nine
regions overseas:• China• Taiwan• South Korea• Hong Kong
• Singapore• Thailand• The United States• Canada• Russia

ANNUAL REPORT 2021

1

Medium-term Management Plan

History of the Noevir Group

Medium-term Management Plan Concept:

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

1.

Pursue innovationand continuous profit
generation in thedomestic market

5.

Promote a management
approach that is responsive
to changes in thebusiness environment
Consolidated Earnings Forecasts
for Fiscal 2022
Net Sales¥58,500 million
Operating income¥9,200 million

Noevir Co., Ltd.

4.

2.

Enhanceour brand value

Five policies

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

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 subsidiary3.

Accelerate efforts todiversify human resourcesand our corporate structure

Noevir Holdings Co., Ltd.
2011

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

Note: A bove figures are based on “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29: March 31, 2020), etc.,
adopted at the beginning of the fiscal year ending September 30, 2022.

2

ANNUAL REPORT 2021

ANNUAL REPORT 2021

3

Management Report

Exercising an Agile Management Approach
Evolving Customer Needs Shaped by New
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 andFiscal 2021 Business Results
In fiscal 2021, the Japanese economy was largely affected by thenovel coronavirus (COVID-19) pandemic, with a murkier economic
outlook than ever before.
Against this backdrop, the Noevir Group has striven to accommodate
new customer needs arising from changes in lifestyle norms, to thisend 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. Furthermore, we enhanced the content
of online services offered to our customers in order to expand pointsof contact with them. In addition, we continued with stringent
efforts to streamline selling, general & administrative (SG&A)
expenses and otherwise endeavored to achieve higher profitability
even amid the COVID-19 pandemic. As a result, consolidated net
sales came to ¥51,272 million, while operating income totaled¥8,557 million. Net income attributable to owners of the parent
amounted to ¥6,383 million. Although net sales represented a slightdecrease of 1.1% year on year, operating income rose 6.2% from theprevious fiscal year, with the operating income margin improving
1.2 percentage point to 16.7%.

Store display of the NOV skincare line

4

ANNUAL REPORT 2021

Our Fiscal 2021 Initiatives
In fiscal 2021, our Cosmetics business saw a slight decrease in revenues
and an increase in profit. In face-to-face channel cosmetics, the needfor special skincare solutions grew stronger as the new norms under
the COVID-19 pandemic prompted a growing number of consumers
to reconsider their day-to-day skincare. Buoyed by this trend, Noevir
BIOSIGN INNER TREATMENT LIPOSOME, a functional serum released in
May 2021, sold firmly. In addition, sales of the Noevir SPECIALE high-end
skincare line remained virtually unchanged despite fewer opportunities
for face-to-face marketing amid growing calls for preventive measuresagainst COVID-19 infection. This product line’s sales were supported
mainly by existing customers as we offered online counseling aimed atmotivating purchases.
For customers, we began utilizing Instagram Live to keep them
updated on products while providing them with online skincare
troubleshooting beauty lessons that include tips on how to address
seasonal skin issues. In addition, we continued to offer online beauty
counseling along with specialized webinars featuring lectures byexternal experts. For sales representatives, we promoted Noevir
Support, a web-based ordering system that helps improve convenienceand thus bolsters their operations. We also held online briefings on
new products to help them achieve even higher service levels.
In self-selection cosmetics, sales of makeup products were affectedby pandemic-induced market stagnation, while sales of skincare
products were solid. Given these circumstances, we endeavored toenhance the brand recognition of the excel makeup line by, forexample, distributing makeup proposals via SNSs and live commerce
events with an eye to securing an advantageous position in
anticipation of a post-pandemic boom in market competition.
Meanwhile, immediately after its renewal in September 2021, theAging Care line of Nameraka Honpo skincare products enjoyed firmsales. Also, the NOV AC ACTIVE skincare line specializing in
hypoallergenic anti-acne products was updated in May 2021 andcontributed to sales on the back of the growing customer need forsolutions designed to address skin troubles arising from new lifestylenorms, such as the practice of wearing a mask for prolonged periods.
The Pharmaceuticals & Health Food business saw a slight decrease
in revenues coupled with an increase in profit. Showings of Noevir
WEIGHT BALANCE, a product registered as a food with functional

While Closely Assessing
Lifestyle Norms
claims due to the incorporation of functional substances that help
reduce visceral fat, have been quite strong and contributed to sales
thanks to rising public health awareness.
The Other business segment, which encompasses apparel- andaircraft-related operations, recorded increases in both revenues and profit.

Future Outlook
In the Cosmetics business, we will promote face-to-face channel
cosmetics and, to this end, continue to take advantage of face-to-facesales, our mainstay sales method. At the same time, we will proactively
utilize online counseling sales and e-commerce to secure a robust
structure for sales assistance. In self-selection cosmetics, we willcontinue with the timely provision of products that accurately meetcustomer needs.
Taking these factors into account, our consolidated performance
forecasts for fiscal 2022 (from October 1 2021, to September 30, 2022)
comprise net sales of ¥58,500 million, operating income of ¥9,200
million and net income attributable to owners of the parent of ¥6,500
million. We will stay focused on securing profitability and strive to live
up to our earnings forecasts via, for example, efficient cost management.
In light of the new listing categories defined by the Tokyo Stock
Exchange, Inc. (TSE) and set for introduction in April 2022, Noevir
Holdings Co., Ltd. has chosen to be listed in the “Prime Market”* basedon the results of primary screening undertaken by TSE with regard to
the Company’s conformity with listing requirements.
* Of the three new categories, the Prime Market is oriented to companies that
center their business on constructive dialogue with global investors.

Our Policy regarding Shareholder Returns
We have positioned the return of profit to our shareholders as animportant management issue. Accordingly, our basic policy is todeliver a stable stream of dividends to our shareholders even as we
secure internal reserves for supporting our endeavors to achieve
medium- to long-term business development and strengthen ourmanagement structure. In line with this policy, we decided to raise
year-end dividends for fiscal 2021 by ¥5 per share from the previous
dividend forecast, thereby bringing full-year cash dividends to ¥210
per share. As a result, we achieved a 10th consecutive annual increasein dividends, with the dividend payout ratio amounting to 112.4%.
Striving to contribute to health and beauty, the Noevir Group haslong been helping people maintain and improve their quality of life
through its business operations. Thanks to this dedication, theGroup 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.

Noevir BIOSIGN INNER
TREATMENT LIPOSOME

ANNUAL REPORT 2021

5

Face-to-face Channel Cosmetics

Noevir SPECIALE skincare line

Main Brands

6• Noevir SPECIALE• Noevir 99 Plus
• Noevir 505• Noevir 105• Noevir 80 pure
• Noevir EXTRA• Noevir TOUT BLANC• Noevir BIOSIGNANNUAL REPORT 2021

Noevir 505 skincare line

Noevir 99 Plus skincare line

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 2021, we released two beauty serums: Noevir WRINKLESERUM, the first medicated anti-wrinkle serum to be marketed by
Noevir Co., Ltd., and Noevir BIOSIGN INNER TREATMENT LIPOSOME,
which leverages the permeation effect afforded by liposomes(spherical vesicles with one or more lipid bilayers, a structure similar
to that of skin cells). These two serums have been created throughthe application of our expertise in botany and dermatology, fields inwhich we pursued R&D for many years. Amid the COVID-19
pandemic, we have also tackled product development aimed at
responding to urgent calls for solutions capable of accommodating
recent changes in skincare needs, especially those associated withskin troubles arising from the new practice of wearing a mask forprolonged periods.
Aiming to enrich our face-to-face channel cosmetics brands, weare 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. In addition, the Group has enhanced its sales capabilities byintroducing an in-house system that certifies those NOEVIR Beauty
Studios that demonstrate service quality and techniques that meetstrict standards. As of September 30, 2021, approximately 2,000
salons have been certified. With the aim of maintaining robust
customer communications despite the effects of the COVID-19
pandemic, we have also introduced alternative counseling methods,
including online counseling.
In fiscal 2021, we offered online makeup lectures to customers
who hope to learn the best makeup techniques for looking beautiful
while wearing a mask. These lectures were delivered free of charge
by leveraging the platform afforded by our NOEVIR Beauty
Academy, which offers skincare and makeup clinics in which
external specialists deliver lectures and is usually available only tosales representatives for a charge.
The network of retail stores operated by Noevir Co., Ltd. serves
major cities across Japan, securing contact points with potential
customers and enhancing brand recognition.
In addition, we strive to accommodate diversifying consumer
needs by enhancing 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.

NoevirWRINKLE SERUM

ANNUAL REPORT 2021

7

Self-Selection Cosmetics, Pharmaceuticals & Health Food

Product Strategy

Sales Strategy

Main Brands

Constituting another pillar of the Noevir Group’s Cosmetics business,
our self-selection cosmetics boast Nameraka Honpo—our mainstay
brand of affordable skincare products and the market leader* in termsof soymilk-based skincare products, with its Aging Care line being
updated in September 2021. In addition, we updated the anti-acneskincare line marketed under the hypoallergenic NOV brand, whichenjoys considerable market share in Japan. We have been enrichingthese two brands, releasing new products designed to meet changes
in customer needs amid the COVID-19 pandemic and strengthening
their lines with distinctive functional features, in order to bolster thesteady expansion of our customer base. 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.
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, the lineup ofwhich was updated in April 2021, and GRONVITER nutritional drinks.

As for the marketing channels for self-selection cosmetics, the Grouputilizes such general retailers as general merchandise stores, drugstores andspecialty 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 secure contracted households
and companies to which products are delivered on regular basis.
Amid the COVID-19 pandemic, which makes it difficult to proactively
carry out storefront promotional campaigns, we have been employing
SNSs to implement ongoing sales promotion initiatives for the excel
makeup brand. For example, we have livestreamed the unveiling of new
products via Instagram while beginning to stream live commerce
events from July 2021. At the same time, we have been working to boost
sales of NOV brand hypoallergenic cosmetics by 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 ofcosmetics and nutritional drink on an OEM basis.

• Nameraka Honpo• excel• NOV• Pore Putty• New Born
• Nanten Nodo Ame• Min Min Da Ha• GRONVITER• VITAC

Nameraka Honpo skincare brand lineup

Examples of excel eye
makeup looks thatcomplement different
mask colors* B ased on the storefront sales of self-selection skincare products incorporating soymilk
ingredients calculated from POS data gleaned by five retailers throughout 2020

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 2021

ANNUAL REPORT 2021

9

Research and Development, Quality Assurance

Corporate Governance1. Fundamental Concepts of Corporate GovernanceResearch and Development
With the Noevir Group Research Laboratory in Shiga Prefectureserving as the core, our robust network of R&D facilities includes the
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 nativeplants that thrive in extreme climates.
In addition, we have long been focused on creating synergies byengaging 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. For example, we have been
helping the University of Tokyo’s Department of Immunology
provide an endowed course on osteoimmunology since 2016, andfindings acquired through this initiative led to the commercializationof a product incorporating immune-related proteins. Through theseand other efforts, we are expanding our R&D fields as we endeavor
to remain on-trend with increasingly complex value systems
characterizing the highly mature cosmetics market in Japan.
Striving to swiftly accommodate evolving consumer mindsets andneeds influenced by the fallout from the COVID-19 pandemic, we will
promote R&D activities aimed at exploring new possibilities of cosmetics,
harnessing their potential to enhance customers’ quality of life (QOL).

Quality Assurance

The Mie Factory

10

ANNUAL REPORT 2021

Type of governance model

A company with auditors

Number of directors (of whom, outside directors)

11 (6)

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

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

8 (6;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 2021

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 and Audit & 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 and outside Audit & Supervisory Board members

Persons in charge of support are appointed from the Legal Affairs Department

3. Fundamental Concepts of Internal Control System
With the aim of securing a structure for reporting to the Audit &Supervisory Board 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 tolaws, regulations and its articles of incorporation.

To ensure the appropriate and sound execution of its Group operations,Noevir Holdings undertakes the storage, management and streamliningof information associated with the execution of directors’ duties while
endeavoring to maintain clarity in its risk management structure aswell as to strengthen and promote its compliance structure under the
Corporate Governance Policy and the Noevir Group Code of Conduct.

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

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

Audit

Noevir Holdings Board of Directors:
Directors and Outside Directors

Supervision

Accounting audit

Appoint/
Dismiss

President and CEO

Internal Audit Department

Decide/ApproveGroup Executive Council

ReportConfirm

Thorough supervisionand compliancewith policies

Nomination andCompensation
Consult/ Advisory Committee
AdviseInternal audit
ReportManagement guidance/
Approval for important matters
Internal Audit

Legal Counsel

The Noevir Group Research Laboratory

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 technicalrequirements stipulated in Good Manufacturing Practice (GMP)
guidelines for the manufacture and quality control of cosmetics.
Also, this factory undergoes annual examinations conducted by athird-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
and Quality Control for Drugs and Quasi-drugs (pharmaceutical GMP
based on a ministerial ordinance). Having put in place ever moresophisticated quality assurance systems, this factory is engaged in the
production of such offerings as energy drinks and other health foods.

2. Corporate Governance Structure Overview

Independent Auditor

The Noevir Group is taking full advantage of R&D capabilities and assets in place at research facilities run by Group
companies, which handle cosmetics, pharmaceuticals and food, to expand the scope of its research activities and topromote the ongoing development of products with distinctive strengths. The Group is thus rallying its overall resources
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 in collaboration with universities, medical institutions and other external researchorganizations with the aim of creating unique products that are insulated from price competition.

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

To realize the ongoing enhancement of corporate value and maintainthe trust of all of its stakeholders, including shareholders, the Noevir Grouphas positioned corporate governance as a key management issue.
Accordingly, the Group has developed a robust management structure
while strengthening auditing functions to ensure strict compliancewith laws, regulations and corporate ethics as well as its articles ofincorporation. Moreover, the Group has set up internal control andrisk management systems, both of which are constantly upgraded.

Decide/Approve

Noevir Holdings’ Divisions

ReportingOperating Companies

ANNUAL REPORT 2021

11

Corporate Social Responsibility

Management’s Discussion and Analysis

Basic Philosophy

Overview

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 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.

Ongoing Fundraising
via Noevir Green Charity

Noevir WATERY OIL SERUM Wins an Award
under the 2021 Glass Bottle Award Program

Since 2010, Noevir Co., Ltd. has been engaged in an ongoing fundraising
campaign via Noevir Green Charity, setting aside a portion of proceedsfrom designated items sold during biannual skincare product fairs for
donation to the Manaslu fund. Headed by alpinist Ken Noguchi, this fundaims to raise money for school construction at the foot of the Himalayas
and for the provision of other support of the region’s children. As we arein full agreement with Mr. Noguchi’s aspiration to support education andthereby help local communities thrive, we will encourage a growing numberof Group members to take part in social contribution activities of this kind.

Noevir WATERY OIL SERUM was chosen to receive a judges’ award underthe 2021 Glass Bottle Award program sponsored by the Japan Glass
Bottle Association. This program, which commends glass bottles createdwith an eye to superior design, functionality and eco friendliness, marked
its 17th round in 2021. Over the course of its history,
the program’s selection criteria have evolved toincorporate environmental considerations based on
the perspective of resource recycling along with anappreciation of aesthetic form, reflecting theaccelerating trend toward across-the-board efforts
to facilitate the United Nations Sustainable
Development Goals (SDGs).
In addition to its beauty, the Noevir
WATERY OIL SERUM bottle was highly
evaluated for its recycling-oriented
structure, which enables users to easily
separate the plastic cap and shoulder
parts from the glass bottle.

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

The Noevir Group’s Work Style Reform Initiatives
Amid the ongoing repercussions of the COVID-19 pandemic,
businesses are facing growing calls to gear up efforts to promote work
style reforms. Since April 2015, the Noevir Group has been pushingahead with the diversification of employee work styles by, for example,
furnishing employees with mobile phones and laptops that allow
them to work remotely as well as by introducing a location-free officeplatform and a work-at-home scheme. These endeavors are, in turn,
expected to empower employees to utilize their time more effectively
and achieve higher productivity. We have also expanded the scope of
employees eligible to choose unconventional work styles while taking
our fiscal 2021 education programs for new hires and beauty

12

ANNUAL REPORT 2021

consultants online. Looking ahead, we will continue to help employees
fully realize their individual competencies even as they work withconfidence and strike a balance between their job and family duties orother private activities.
Also, we strive to ensure that the career development paths of all
individuals in our workforce are unconstrained by such events aschildbirth, child rearing or nursing care. We encourage employees tofully utilize annual paid leave while endeavoring to minimize overtime.
Moreover, we have implemented various initiatives, including
enhancing childcare 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 for career success.
Furthermore, we provide assistance to support employees’ healthpromotion efforts, taking a management approach that places greatemphasis on ensuring employee health.
As of September 30, 2021, the number of Noevir Group employees
totaled 1,453 with a male to female composition of 684 to 769 thatsuggests that women are serving as key players. Of the 388 Group
employees in team leader or other supervisory positions 102, or 26.3%, arewomen. Moreover, of the 201 managerial employees in assistant manager
or higher positions, 48, or 23.9%, are women. At present, our aim is toraise the overall ratio of managerial positions held by women to 30%
or more by December 2022. As such, the Group is striving to promote
gender equality in terms of weight of tasks and responsibilities assigned
to employees while ensuring equal opportunities for career development.

In fiscal 2021 (October 1, 2020 to September 30, 2021), the Japanese
economy was affected by the COVID-19 pandemic, with economic
trends becoming increasingly uncertain due to continuously harshconditions for corporate earnings and employment.
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, 2021
came to ¥51,272 million. The cost of sales amounted to ¥18,241
million and as a percentage of net sales was 35.6%. Selling, generaland administrative (SG&A) expenses were ¥24,473 million and as apercentage of net sales were 47.7%, as the Group strove to streamline
advertising and sales promotion costs.
Operating income was ¥8,557 million, and net income attributable toowners of the parent came to ¥6,383 million. In sum, despite a decline
in revenues, the Company achieved profit growth compared with theprevious fiscal year, with the operating income margin standing at
16.7%, up 1.2 percentage points year on year.
Although the outlook is expected to remain unclear as the extent of
the impact of the COVID-19 pandemic is still uncertain, the Company’s
consolidated forecasts for the fiscal year ending September 30, 2022
include net sales of ¥58,500 million, operating income of ¥9,200 million,
and net income attributable to owners of the parent of ¥6,500 million.
In addition, at the beginning of the fiscal year ending September 30,
2022, the Company adopted the “Accounting Standard for Revenue
Recognition” (ASBJ Statement No. 29: March 31, 2020), etc. Reflecting
this, some items that had been subtracted from net sales are now
treated as expenses. If these and other changes arising from theabovementioned adoption are retrospectively applied to the calculationof operating results for the fiscal year ended September 30, 2021, net
sales would be up 0.3% year on year. On the other hand, the impact ofthese changes on operating income, ordinary income and net income
attributable to owners of the parent are expected to be minor.

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 excel makeup brand; and the NOV brand.
The Group also undertakes the contract manufacturing of cosmetics.

Fiscal 2021 Results
The Cosmetics segment saw a slight decrease in revenues and anincrease in profit, with segment sales and income totaling ¥38,325­million and ¥9,600 million, respectively. The slight year-on-year
decrease in net sales is attributable to sluggish showings of makeup
products due to the COVID-19 pandemic. However, sales of mainstay
skincare products were robust, contributing to growth in profit.

Pharmaceuticals & Health Food
Overview

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 and digestive aids, aswell as nutritional supplements, health food and other products
featuring high-quality natural ingredients.

Fiscal 2021 Results
The Pharmaceuticals & Health Food segment similarly saw a slightdecrease in revenues and an increase in profit, with segment sales
and income totaling ¥11,117 million and ¥1,442 million, respectively.
Due to the COVID-19 pandemic, sales of flagship energy drinks werestagnant. However, showings of nutritional supplements, which boast
high profitability, were robust. As a result, segment profit was up
14.3% year on year.

Other

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

Fiscal 2021 Results
The Other segment recorded segment sales of ¥1,828 million and segment
income of ¥156 million, with both revenues and profit increasing year
on year due to the solid performance of the apparel related-business.

Assets, Liabilities and Net Assets
Total assets at the fiscal 2021 year-end stood at ¥80,448 million, an
increase of ¥396 million from the previous fiscal year-end. This result was
mainly due to increases of ¥1,645 million in cash and cash equivalentsand ¥714 million in investment securities, as well as decreases of ¥982
million in property, plant and equipment, ¥651 million in merchandiseand finished goods, and ¥196 million in other receivables.
Total liabilities came to ¥28,215 million, an increase of ¥406 million
from the previous fiscal year-end. This result was mainly due to anincrease of ¥540 million in income tax payable.
Net assets came to ¥52,233 million, a decrease of ¥10 million fromthe previous fiscal year-end. This was primarily due to a decrease of¥621 million in retained earnings, which reflected the payment of¥7,002 million in year-end dividends for the previous fiscal year despite
the posting of ¥6,383 million in net income attributable to owners of
the parent, as well as an increase of ¥493 million in net unrealized gainon other securities.
As a result, the equity ratio stood at 64.5%, down 0.4 of apercentage point from the previous fiscal year-end, and net assets per
share stood at ¥1,520.27, a decrease of ¥1.50.

Cash Flows
Cash and cash equivalents on a consolidated basis as of September 30,
2021 stood at ¥ 30,841 million, an increase of ¥1,641 million comparedwith the previous fiscal year-end.
Net cash provided by operating activities amounted to ¥9,063
million. The main item increasing cash was the posting of ¥8,966
million in income before income taxes.
Net cash used in investing activities came to ¥416 million. The
principal cash outflow was ¥376 million for the purchase of property,
plant and equipment.
Net cash used in financing activities came to ¥7,181 million. This was
mainly due to the payment of ¥7,002 million in dividends.

ANNUAL REPORT 2021

13

Five-Year Summary

Financial Highlights(Millions of yen)

2017

2018

2019

2020

2021

Period/Item

October 1, 2016–
September 30, 2017

October 1, 2017–
September 30, 2018

October 1, 2018–
September 30, 2019

October 1, 2019–
September 30, 2020

October 1, 2020–
September 30, 2021

Net sales¥   54,473¥   57,828¥  59,252¥  51,841¥  51,272

9,986

11,343

11,992

8,060

8,557

Fiscal Year

Operating income
Net income attributable to owners of the parent

7,077

7,842

7,226

5,618

6,383

Total assets

93,56782,80983,33080,05280,448

Net assets

59,36551,99852,94652,24352,233

Capital expenditures

1,497

1,375

1,994

1,456

539

Depreciation

1,845

1,850

1,808

1,668

1,463

R&D expenses*

1,134

1,046

1,097

1,065

1,041

Cash dividends per share (yen)¥  150.00¥  180.00¥  200.00¥  205.00¥  210.00

Earnings per share, basic (yen)¥   199.64¥   228.56¥  211.57¥  164.48¥  186.88

Net assets per share (BPS) (yen)¥1,669.18¥1,517.61¥1,543.72¥1,521.77¥1,520.27

ROE (%)

12.3%

14.1%

13.8%

10.7%

12.3%

Equity ratio (%)

63.2%

62.6%

63.3%

64.9%

64.5%

Number of employees (consolidated)

1,560

1,531

1,530

1,507

1,453

¥  39,197¥  42,616¥  45,175¥  38,742¥  38,325

11,002

12,155

13,183

9,505

9,600

Net Sales(¥ million)
60,000Operating Income / Operating Income Margin
54,47357,828(¥ million)
20,00059,252
51,841

51,27245,00015,00030,00010,00015,000

5,000

(%)
24

19.6

18.3

9,986

11,34320.2
11,992

15.5
8,060

16.7

18

8,557

12

6

0

0

FY2017FY2018FY2019FY2020

FY20210

FY2017FY2018FY2019FY2020

FY2021

Operating income
Operating income margin

Net sales

ROE

Equity / Equity Ratio(%)
80(¥ million)
100,000

(%)
20

15

12.3

14.1

13.8
10.7

10

12.3

75,00063.2
59,17550,000

62.6

63.3

64.9

51,83652,72851,97864.5
60

51,92640

Cosmetics
Net sales
Segment income

50FY2018FY2019FY2020

FY2021ROE

Net sales
Segment income

13,48813,19912,036

11,273

11,117

745

1,309

1,312

1,261

1,442

1,788

2,013

2,041

1,825

1,828

128

135

70

10

156

0

0

FY2017

Pharmaceuticals & Health Food20

25,000FY2017FY2018FY2019FY2020

FY2021EquityEquity ratio

Other
Net sales
Segment income

Earnings per Share, Basic

Cash Dividends per Share / Payout Ratio
(¥)
400

(¥)
300

* 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.
225

199.64228.56164.48186.88

240

160
75

0

FY2017
Earnings per share, basic

14

ANNUAL REPORT 2021

FY2018FY2019FY2020

FY2021

112.4

94.5

320

211.57

150

124.6

75.1
150.00100

78.8
180.00200.00(%)
125

205.00210.00

75
50

80

25

0

0

FY2017FY2018FY2019FY2020

FY2021

Cash dividends per share
Payout ratio

ANNUAL REPORT 2021

15

Principal Consolidated Subsidiaries (As of September 30, 2021)

Board of Directors and Auditors (As of December 6, 2021)

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

Direct or Indirect
Ownership by theCompany (percent)6-13-1 Minatojima-nakamachi
Chuo-ku
Kobe 650-8521
Japan¥7,319100.00¥4,301TOKIWA
Pharmaceutical Co., Ltd.

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

¥98

TOKIWA Medical Service
Co., Ltd.

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

¥10

Bonanza Co., Ltd.

6-13-1 Minatojima-nakamachi
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 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 Holdingof 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, 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

NT$31,000 thousand

Noevir Taiwan, Inc.

8th Fl.-2, No. 111 Songjiang
Road, Zhongshan District
Taipei City 10486
Taiwan5,000 thousand
Chinese yuan

Shanghai Noevir Co., Ltd.

Room 605, HongwellInternational Plaza A
No.1600, Zhongshan West Rd.
Xuhui District, Shanghai 200235
China
Via Tre Settembre, 99 (3°-#116)
47891 Dogana
Republic of San Marino

26,000 euro

Name

Location

Noevir Co., Ltd.

Noevir Europe s.r.l.

100.00100.00100.00100.00100.0050.00

100.00Principal Business

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-the-counter(OTC) pharmaceuticals and quasi-drugs
Sale of cosmetics, toiletries and foodproducts as well as purchase and sale of
makeup items/Production and sale ofover-the-counter (OTC) pharmaceuticals
and quasi-drugs
Production and sale of cosmetics andtoiletries as well as purchase and sale of
makeup items

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

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

Market research in Europe

Chairman and Representative Director
Hiroshi Okura

Profiles of Outside Directors

President and CEO
Takashi Okura

Sanae Tanaka

Managing Director
Ikkou Yoshida

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 OfficeDirectors
Yasuo Kaiden
Masataka Nakano

Emima Abe

Attorney-at-law, Max General Law Firm

Ryo Tsuchida

Outside director of UPR Corp.
Professor of Sophia Law School

Mari Ishimitsu

Attorney-at-law, Mikan Law Office

Haruhi Kuroda

Attorney-at law, Homma & Partners

Outside Directors
Sanae Tanaka*
Maho Kinami*
Emima Abe*Ryo Tsuchida*
Mari Ishimitsu*
Haruhi Kuroda*
Audit & Supervisory Board Member
Masayuki Hamaguchi

Profiles of Outside Audit & Supervisory Board Members
Kazuya Sugimoto

Representative of Sugimoto CPA Office

Kayo Sato

Representative of LAW OFFICE TAITO
Outside Audit & Supervisory Board member ofAdvanced Media, Inc.

Outside Audit & Supervisory Board Members
Kazuya Sugimoto**
Kayo Sato*** Independent directors** Independent Audit & Supervisory Board members

Investor Information (As of September 30, 2021)
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• Kobe6-13-1 Minatojima-nakamachi, Chuo-ku
Kobe 650-8521, Japan• Tokyo
7-6-15 Ginza, Chuo-ku
Tokyo 104-8208, Japan
Stock Listing
Tokyo Stock Exchange, First Section (Ticker: 4928)
Transfer Agent and Registrar
Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku, Tokyo 100-8233, Japan

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

NII Co., Ltd.

12,382

36.25

Takashi Okura

3,699

10.83

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

2,338

6.85

Hiroshi Okura

1,000

2.93

Sumitomo Mitsui Banking Corporation

900

2.63

Custody Bank of Japan, Ltd.
(Trust Account)

661

1.94

JAPAN POST INSURANCE Co., Ltd.

466

1.36

Noevir Holdings Employees
Shareholdings Scheme

397

1.16

NORTHERN TRUST CO. (AVFC)
RE IEDU UCITS CLIENTS NON TREATYACCOUNT 15.315 PCT

345

1.01

Nihon Kolmar Co., Ltd.

310

0.91

Note: The shareholding ratio is calculated excluding treasury stock(235 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 nothistorical 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 2021

ANNUAL REPORT 2021

17