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 2022
Year ended September 30, 2022

Printed in Japan using environment-friendly ink and paper.

Business Model

Fiscal 2022 Sales by Segment

Segment Information

Cosmetics

76.9 %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

18.7%

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, along with
Noevir’s own retail stores,
operate in regions nationwide• 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

4.4 %

The Other segment encompasses
apparel and aircraft sales andleasing.

Channels• Face-to-face Sales• 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 by Group
companies, which handle cosmetics, pharmaceuticals andfood, to expand the scope of research activities and topromote the ongoing development of unique productsthat fully leverage the Group’s diverse
R&D capabilities and assets• Stepping up joint research with external business corporations
as well as governmental and academic institutions• Implementing thoroughgoing quality control
while operating environment-friendly manufacturing systems

Other

4.4

Pharmaceuticals& Health Food

18.7

%

¥2,703 million%¥11,408 million

Cosmetics

76.9%¥47,032 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 eightregions overseas:• China• Taiwan• South Korea• Hong Kong
• Singapore• Thailand• The United States• Canada

ANNUAL REPORT 2022

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

Noevir Co., Ltd.

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

1.

Pursue innovationand continuous profit
generation in thedomestic market

5.

Promote a management
approach that is responsive
to changes in thebusiness environment

Enhanceour brand value

4.

2

ANNUAL REPORT 2022

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

1971

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

1978

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

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

1985

Nov Co., Ltd. established1986

Sana Co., Ltd. established

1988

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

1991

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

1993

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

1994

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

1996

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

2001

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

2002

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

2004

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

2005

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

2007

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

2011

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

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

2012

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

2022

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

Five policies

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

Consolidated Earnings
Forecasts for Fiscal 2023

2.

Noevir Holdings
Co., Ltd.

1964

3.

Accelerate efforts todiversify human resourcesand our corporate structure¥61,600 million
Operating income ¥10,700 million
Net Sales

ANNUAL REPORT 2022

3

Management Report

Striving to Satisfy Diversifying Customer
Needs to Achieve Stable Growth
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 2022 Business Results
During fiscal 2022 (October 1, 2021 to September 30, 2022),
economic trends remained uncertain, mainly due to the continuing
impact of the novel coronavirus (COVID-19) pandemic, althoughsome signs of recovery were observed.
Against this backdrop, the Noevir Group has striven toaccommodate ever-diversifying customer needs in the face of the
COVID-19 pandemic, to this end taking an agile approach to
management decision making. For example, we updated existingproduct lines while introducing new products with superior
functionalities via the use of findings from cutting-edge R&D activities.
In addition, we continued with stringent efforts to streamline selling,
general & administrative (SG&A) expenses and otherwise endeavoredto achieve higher profitability even amid the COVID-19 pandemic.
As a result, consolidated net sales came to ¥61,143 million, while
operating income totaled ¥10,115 million. Net income attributableto owners of the parent stood at ¥7,589 million, with the operating
income margin amounting to 16.5%. In fiscal 2022, the Group
adopted the Accounting Standard for Revenue Recognition. If
operating results for fiscal 2021 were to be retrospectively recalculated
in accordance with said standard, consolidated net sales andoperating income would increase by 4.1% and 16.3%, respectively.

NOEVIR SALON DE SPECIALE OMOTESANDO

4

ANNUAL REPORT 2022

Our Fiscal 2022 Initiatives
In fiscal 2022, our Cosmetics business saw increases in both revenues andprofit compared with the previous fiscal year when fiscal 2021 operating
results are retrospectively recalculated using the revised accounting
standards. (Hereinafter, the above recalculation of fiscal 2021 operating
results applies to all year-on-year comparisons of operating results.) In
face-to-face channel cosmetics, sales of Noevir SERUMUNE aging-careserum, which was released in November 2021, were consistently
robust, thanks to the growing consumer trend toward incorporating
special skincare solutions into day-to-day skincare routines. This trend
similarly supported continued strong sales of Noevir BIOSIGN BLANC
BEAUTÉ, a medicated skin-brightening serum released in May 2022.
Also during the year, we provided customers with counseling and beauty
lessons while implementing preventive measures against COVID-19
infection. In these and other ways, we strove to motivate purchasing while
increasing opportunities for contacts with customers. Consequently, revenues
from face-to-face channel cosmetics edged down only slightly amid fallout
from the COVID-19 pandemic, with existing customers supporting sales.
In self-selection cosmetics, sales of skincare products were consistently
firm. In particular, strong showings of Nameraka Honpo brand products
contributed to sales in a significant way, with the Moisture skincare line
sold under this brand being updated in February and August 2022.
Sales were also buoyed by the release of updated products in the
NOV III skincare line as well as by the launch of NOV L&W Lift Essence,
which supports skin elasticity, as part of the L&W skincare line known forfunctionality in providing highly moisturizing aging care for sensitive skin.
On the other hand, although there were signs of recovery in sales of
makeup products on the back of the relaxation of pandemic-related
movement restrictions, these products were still affected by ongoing fallout
from market shrinkage induced by the COVID-19 pandemic. However,we were able to secure sales in the excel makeup line on par with thelevel recorded in the previous fiscal year, reflecting efforts undertaken in
conjunction with the release of new products under this line to enhancebrand recognition by implementing SNS-based campaigns, holding livecommerce events and displaying digital advertising signage at beauty salons.
The Pharmaceuticals & Health Food business saw decreases in both revenues and profit despite strong sales of Min Min Da Ha functional drinks andNanten Nodo Ame cough drops, due to stagnant sales of nutrient tonic drinks.
The Other business segment, which encompasses apparel- and­aircraft-related operations, recorded increases in both revenues and profit.
This was attributable to a rise in sales from aircraft-related operations.

Noevir BIOSIGNBLANC BEAUTÉ

Future Outlook

Our Policy regarding Shareholder Returns

With regard to face-to-face channel cosmetics in the Cosmetics­business, we will strive to enhance our face-to-face sales capabilities,
to this end reinstating our focus on a traditional sales approach
involving attracting customers to physical shops, visiting customers
and providing them with face-to-face counseling. In self-selection
cosmetics, we will continue with the timely provision of productsthat accurately meet customer needs.
Reflecting factors, our consolidated performance forecasts for­fiscal 2023 (from October 1, 2022 to September 30, 2023) comprise
net sales of ¥61,600 million, operating income of ¥10,700 million
and net income attributable to owners of the parent of ¥7,700 million.
While looking to seize opportunities arising from market recovery, we
will stay focused on securing profitability and strive to live up to ourearnings forecasts via, for example, efficient cost management.

We have positioned the return of profit to our shareholders as 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. The above undertakings are backed byefforts to maximize corporate value and improve profitability. In linewith this policy, we decided to raise year-end dividends for fiscal
2022 by ¥5 per share from the previous dividend forecast, thereby
bringing full-year cash dividends to ¥215 per share. As a result, weachieved an 11th consecutive annual increase in dividends, with thedividend payout ratio amounting to 96.8%.
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.

An example of astorefront display of
the Moistureskincare line soldunder the Nameraka
Honpo brand
ANNUAL REPORT 20225

Face-to-face Channel Cosmetics

Noevir SPECIALE skincare line

Main Brands

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 2022, we released two beauty serums: Noevir SERUMUNE,a new anti-aging serum developed through the application of ourexpertise in botany and dermatology, fields in which we pursued
R&D for many years, and Noevir BIOSIGN BLANC BEAUTÉ, a
medicated serum incorporating two types of active ingredient that
directly address mechanisms causing dark patches to appear on theskin and thereby support skin brightening. Amid the COVID-19
pandemic, we have also tackled product development aimed at
responding to growing skincare needs, especially those associatedwith skin troubles arising from the new practice of wearing a maskfor prolonged periods.
Aiming to enrich our face-to-face channel cosmetics brands, we are
fully leveraging our distinctive strengths in R&D, thereby maintaining
a constant stream of new products with superior functionality.

The Noevir Group markets its face-to-face channel cosmetics brands
mainly through face-to-face sales channels backed by beauty studios
while also offering them through retail stores operated by Noevir
Co., Ltd. These retail stores form a network that serves major cities
across Japan, securing contact points with potential customers andenhancing brand recognition. In addition, the Group has enhanced
its sales capabilities by introducing an in-house system that certifies
those NOEVIR Beauty Studios that demonstrate service quality andtechniques that meet strict standards. As of September 30, 2022,
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 offeredalternative counseling methods, even as we continued to employ
face-to-face sales as our mainstay method for customer engagement.
Furthermore, as we did in fiscal 2021, we provided customers with
free-of-charge online makeup lessons by leveraging the platform
afforded by our NOEVIR Beauty Academy, which offers makeup clinics
in which external specialists deliver lectures and is usually available
only to sales representatives for a charge. Going forward, we will
strive to constantly deliver these lessons so that the platform serves
as a helpful tool for both our customers and sales representatives.
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.

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

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7

Self-Selection Cosmetics, Pharmaceuticals & Health Food

Product Strategy
Constituting another pillar of the Noevir Group’s Cosmetics business,
our self-selection cosmetics boast Nameraka Honpo—our mainstay
brand—which comprises affordably priced products incorporating
skincare ingredients that have gained growing customer interest. This
brand is the market leader* in terms of soymilk-based skincare products.
In February and August 2022, we updated the Moisture skincare line
sold under this brand, thereby achieving the steady expansion of ourcustomer base through the enhancement of our lineup designed toaddress diverse skin issues. We have also updated two lines under our
hypoallergenic NOV brand, which similarly enjoys considerable market
share in Japan. Specifically, we released the new NOV III skincare line
focused on bolstering and supplementing the skin barrier function
while launching NOV L&W Lift Essence, which supports skin elasticity, as
part of the L&W skincare line, which is known for the functionality of
its aging-care serums as well as its superior ability to enhance the skin’s
moisture retention. By meeting their evolving needs amid the COVID-19
pandemic, these offerings won the support of our customers. Moreover,
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 Nanten Nodo Ame—
long-selling cough drops classified as pharmaceutical products—as wellas Min Min Da Ha functional drinks and GRONVITER nutritional drinks.
*B ased on the storefront sales of self-selection skincare products
incorporating soymilk ingredients calculated from POS data gleaned by fiveretailers throughout 2021

Sales Strategy
As for the marketing channels for self-selection cosmetics, the Grouputilizes such general retailers as general merchandise stores, drugstoresand specialty goods stores. With regard to pharmaceuticals, the Groupmarkets a variety of products, including functional drinks and cough drops,
through such outlets 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.

Nameraka Honpo skincare brand lineup

Amid the COVID-19 pandemic, which has
made it difficult to proactively carry out
storefront promotional campaigns, we havebeen implementing ongoing sales promotion
initiatives through SNSs, for example,
livestreaming on YouTube and Instagram, in
addition to holding live commerce events, forthe mainstay Nameraka Honpo cosmetics
brand and the excel makeup line. At the sametime, we have been reaching out to medical
institutions around Japan, especiallydermatology clinics, as part of efforts to win
a greater number of users for the hypoallergenic
NOV brand. These initiatives are designed
to communicate product information in a waythat evokes a sense of intimacy and trust.
In addition, the Group undertakes thecontract manufacturing of cosmetics andnutritional drinks on an OEM basis.

Main Brands• Nameraka Honpo• excel• NOV• Pore Putty• New Born
• Nanten Nodo Ame• Min Min Da Ha• GRONVITER• VITACAdvertising featuring a popular TV personality greatly contributed
to sales of the Moisture skincare line, one of our mainstay Nameraka
Honpo cosmetics brand lines.

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©2022 SANRIO CO., LTD. APPROVAL NO. L630328

8

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9

Research and Development, Quality Assurance

Corporate Governance1. 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 Tokyo Research Laboratory, Suzuka Alpine Plants
Research Center, Minami Daito Island Marine Research Center and Hokkaido Shokanbetsu
Mountain Pilot Farm. These facilities engage in basic research on such subjects as native plantsthat thrive in extreme climates.
In addition, we have long been focused on creating synergies by engaging in external
collaboration with a range of partners and by rallying the Group’s R&D resources, including
those of Noevir Co., Ltd. and TOKIWA Pharmaceutical Co., Ltd. Through these and 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.
To enhance our competitiveness, we are also striving to earn solid evaluations for our active
ingredients with regard to effectiveness and compliance with safety standards. For example, wehave registered our “Soymilk Isoflavones” under the International Nomenclature of Cosmetic
Ingredient (INCI) system, a cosmetics ingredient labeling system maintained by the U.S. Personal
Care Products Council. “Soymilk Isoflavones” developed by the Noevir Group and incorporated
in its mainstay Nameraka Honpo brand line products, thus became the first soy-based cosmetics
ingredients in the world to bear an INCI label.
Striving to swiftly accommodate evolving consumer mindsets and needs influenced by the
fallout from the COVID-19 pandemic, we will promote R&D activities aimed at exploring new
possibilities of cosmetics, pharmaceuticals and food, harnessing their potential to enhancecustomers’ quality of life (QOL).

Quality Assurance

The Mie Factory

10

ANNUAL REPORT 2022

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 2022

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 Corporate and Legal Affairs

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 2022

11

Corporate Social Responsibility

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

Initiatives to Protect the Environment

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 support a project headed by alpinist Ken Noguchi. This
project is aimed at promoting forest rehabilitation as well as raisingmoney for school construction in villages at the foot of Manaslu, asteep summit in the Himalayas, and otherwise providing educational
support of the region’s children. As we are in full agreement with
Mr. Noguchi’s aspiration to support education and thereby help local
communities thrive, we will encourage a growing number of Group
members to take part in social contribution activities of this kind.

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

In 2022, the Noevir Group established the “Environment Committee,”with a membership consisting of directors and other officers in chargeof departments involved in the identification of risks and opportunities
arising from climate change. Through this committee, we deliberatebusiness challenges we are now confronting in connection withenvironmental issues, including climate change, and determine what to
do to take on such challenges. To this end, we are rallying the strengthof the entire Group to reduce our environmental footprint by, forexample, developing products designed to address environmental
concerns and curbing CO2 emissions attributable to our operations.
In the course of developing containers and packaging for cosmetics
and other products, we use eco-friendly materials, such as bioplastics,
which are plant-based plastics, and FSCcertified paper. Moreover, as part of ourefforts to cut back on the volume ofplastic waste deriving from our products
and thus improve their environmental
friendliness, in July 2022 we renewed
the packaging specifications for theNoevir SPECIALE skincare line with
Noevir SPECIALE skincare line.
renewed, eco-friendly packaging

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.
Against this backdrop, the Noevir Group has been pushing ahead withthe diversification of employee work styles in order to empower
employees to utilize their time more effectively and achieve higher
productivity while expanding the scope of employees eligible to choose
unconventional work styles. As in fiscal 2021, we offered our fiscal 2022
education programs for new hires and managers online. Looking ahead,
we will continue to help employees fully realize their individualcompetencies even as they work with confidence and strike a balance
between their job and family duties or other 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.
At present, our aim is to raise the overall ratio of managerial positions
held by women to 30% or more by December 2025. As such, the Group12

ANNUAL REPORT 2022

is striving to promote gender equality in terms of weight of tasks andresponsibilities assigned to employees while ensuring equal opportunities
for career development. As of September 30, 2022, the representationof women in the Noevir Group’s workforce by position is as follows.

During fiscal 2022 (October 1, 2021 to September 30, 2022), economic
trends remained uncertain, mainly due to the continuing impact of
COVID-19, although some signs of recovery were observed.
Against this backdrop, the Company worked to realize the concept
of its medium-term management plan: “Realizing steady corporate
growth by securing sustainability in every Group business segment.”
As a result, net sales for the fiscal year ended September 30, 2022
came to ¥61,143 million. This includes the impact of the adoption of the
Accounting Standard for Revenue Recognition, etc., in said fiscal year,
which resulted in an increase of 7,603 million. Similarly, if the operating
results for the previous fiscal year were retrospectively recalculated inaccordance with this standard, that year’s net sales would be 4.1%
higher. The cost of sales amounted to ¥19,050 million and as a percentageof net sales was 31.2%. Selling, general and administrative (SG&A)

Segment Information

Cosmetics

Pharmaceuticals & Health Food

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.

The Group develops, produces and sells such flagship items as the longselling Nanten Nodo Ame cough drop brand, the Min Min Da Ha
functional drink brand lineup, and other OTC pharmaceuticals, including
cold remedies and digestive aids, as well as nutritional supplements,
health food and other products featuring high-quality natural ingredients.

Overview

Overview

Fiscal 2022 Results
Sales in the Cosmetics segment totaled ¥47,032 million, and segment
income came to ¥10,814 million. These results represent increases inboth revenues and profit compared with the previous fiscal year whenfiscal 2021 operating results are retrospectively recalculated using therevised accounting standards. (Hereinafter, the above recalculation of
fiscal 2021 operating results applies to all year-on-year comparisons ofoperating results.) While face-to-face channel cosmetics saw a slightdecrease in revenues, self-selection cosmetics performed robustly. This
was thanks to the updating of skincare product lines as well as higher
sales of makeup products on the back of the relaxation of pandemicrelated movement restrictions.

• Total number of Group employees:
1,398, including 667 men and 731 women

Fiscal 2022 Results
Sales in the Pharmaceuticals & Health Food segment totaled ¥11,408
million, and segment income came to ¥1,157 million. Compared withthe previous fiscal year, this segment thus saw decreases in bothrevenues and profit. Despite robust sales of functional drinks and coughdrops, the latter of which are classified as pharmaceutical products,
stagnant sales of energy drinks led to the decline in segment revenues.

Other

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

Fiscal 2022 Results
Sales in the Other segment came to ¥2,703 million, while segment
income came to ¥381 million. Growth in sales from aircraft-related
operations led to increases in segment revenues and profit.

• Individuals in team leader or other supervisory positions:
365, including 97 women (26.6%)• Managerial employees in assistant manager or higher positions:
174, including 54 women (31.0%)

expenses were ¥31,977 million and as a percentage of net sales were
52.3%. This reflects the inclusion, due to changes in accounting
standards, of some sales promotion fees that previously had been
deducted from net sales into SG&A expenses, leading to an increase
despite the Group’s efforts to streamline advertising and sales promotion
costs. As a result, operating income was ¥10,115 million, and net income
attributable to owners of the parent came to ¥7,589 million. The Group
has thus seen increases in both revenues and profit. The operating income
margin stood at 16.5%, suggesting consistently high profitability.
The full impact of the COVID-19 pandemic and thus the businessoutlook remains uncertain. However, the Company’s consolidated
forecast for the fiscal year ending September 30, 2023 is for net salesof ¥61,600 million, operating income of ¥10,700 million, and net
income attributable to owners of the parent of ¥7,700 million.

Assets, Liabilities and Net Assets

Cash Flows

Total assets on a consolidated basis as of September 30, 2022 stood at¥76,781 million, a decrease of ¥3,667 million from the previous fiscal
year-end. The main changes were decreases of ¥1,354 million in cash
and cash equivalents, ¥1,349 million in property, plant and equipment,and ¥646 million in investment securities.
Total liabilities came to ¥24,397 million, a decrease of ¥3,818 million
from the previous fiscal year-end. This was mainly due to a decrease of¥5,016 million in net defined benefit liability and an increase of ¥796
million in other accounts payable.
Net assets came to ¥52,384 million, an increase of ¥151 million fromthe previous fiscal year-end. This was primarily attributable to an increase
in total accumulated other comprehensive income of ¥186 million.
As a result, the equity ratio stood at 67.8%, up 3.3 percentage points
from the previous fiscal year-end, and net assets per share stood at¥1,524.05, an increase of ¥3.78.

Cash and cash equivalents on a consolidated basis as of September 30,
2022 stood at ¥29,530 million, a decrease of ¥1,310 million comparedwith the previous fiscal year-end.
Net cash provided by operating activities amounted to ¥5,845 million.
The main item increasing cash was ¥11,161 million in income before
income taxes, and the main item decreasing cash was a ¥4,056 million
decrease in net defined benefit asset and liability.
Net cash used in investing activities came to ¥255 million.
The principal cash outflow was ¥546 million for purchase of property,
plant and equipment.
Net cash used in financing activities came to ¥7,380 million. This was
mainly due to the payment of ¥7,166 million in dividends.

ANNUAL REPORT 2022

13

Five-Year Summary

Financial Highlights(Millions of yen)

2018

2019

2020

2021

2022

Period/Item

October 1, 2017–
September 30, 2018

October 1, 2018–
September 30, 2019

October 1, 2019–
September 30, 2020

October 1, 2020–
September 30, 2021

October 1, 2021–
September 30, 2022

Net sales¥   57,828¥  59,252¥  51,841¥  51,272¥  61,143

Fiscal Year

Operating income

11,343

11,992

8,060

8,557

Net Sales

Operating Income / Operating Income Margin(¥ million)
80,000(¥ million)
20,00060,00057,82859,252

10,115

Net income attributable to owners of the parent

7,842

7,226

5,618

6,383

7,589

Total assets

82,80983,33080,05280,44876,781

Net assets

51,99852,94652,24352,23352,384

Capital expenditures

1,375

1,994

1,456

539

605

Depreciation

1,850

1,808

1,668

1,463

1,420

R&D expenses*

1,046

1,097

1,065

1,041

1,063

Cash dividends per share (yen)¥  180.00¥  200.00¥  205.00¥  210.00¥  215.00

Earnings per share (yen)**¥   228.56¥  211.57¥  164.48¥  186.88¥  222.20

Net assets per share (BPS) (yen)¥1,517.61¥1,543.72¥1,521.77¥1,520.27¥1,524.05

ROE (%)

14.1%

13.8%

10.7%

12.3%

14.6%

Equity ratio (%)

62.6%

63.3%

64.9%

64.5%

67.8%

Number of employees (consolidated)

1,531

1,530

1,507

1,453

1,398

61,143
51,841

(%)
24

19.6

51,27240,00010,00020,0005,000

11,3438,060

Segment income¥  45,175¥  38,742¥  38,325¥  47,032

12,155

13,183

9,505

9,600

10,814FY2018FY2019FY2020

FY2021

11,273

11,117

11,408Segment income

1,309

1,312

1,261

1,442

1,157

2,013

2,041

1,825

1,828

2,703

135

70

10

156

381

12

FY2019FY2020

FY2021

FY2022Equity Ratio
(%)
20

(%)
72

14.1

15

14.6

13.8
10.7

10

69

67.8

12.3
66

63

5

0

64.9
62.6

63.3

64.5

60

FY2019FY2020

FY2021FY2018FY2022FY2019FY2020

FY2021

FY2022Equity ratio

ROE

12,036

10,11518

0

FY2018FY2022

ROE

Pharmaceuticals & Health Food
13,199

8,557

16.5

Operating income
Operating income margin

FY2018Net sales

16.7

6

Cosmetics¥  42,616

11,99215.5

00

Net sales

Net sales

20.2

15,000Other
Net sales
Segment income* The total of R&D expenses recorded as part of SG&A expenses and those recorded as part of production costs during the fiscal year under review.
** The calculation of earnings per share takes into account the annual average of total number of stocks outstanding, excluding treasury stock.
Note: A bove figures for the fiscal year ending September 30, 2022 are based on “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29: March 31,2020), etc., adopted at the beginning of said fiscal year.

Earnings per Share

Cash Dividends per Share / Payout Ratio
(¥)
400

(¥)
280

210

228.56222.20211.57164.48

240

140
160

0

FY2018
Earnings per share

14

ANNUAL REPORT 2022

FY2019FY2020

FY2021

FY2022

112.4

94.5

320

186.88

70

124.6

78.8
180.00200.00205.00210.00

(%)
125

96.8
215.00

100

75

50

80

25

0

0

FY2018FY2019FY2010

FY2021

FY2022

Cash dividends per share
Payout ratio

ANNUAL REPORT 202215

Principal Consolidated Subsidiaries (As of September 30, 2022)

Name

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

6-13-1 Minatojima-nakamachi
Chuo-ku
Kobe 650-8521
Japan¥4,301

Location

Noevir Co., Ltd.

TOKIWA
Pharmaceutical Co., Ltd.

Board of Directors and Auditors (As of December 8, 2022)

100.00

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-the-counter(OTC) pharmaceuticals and quasi-drugs

Chairman and Representative Director
Hiroshi Okura

Profiles of Outside Directors

President and CEO
Takashi Okura

Ryo Tsuchida

Outside director of UPR Corp.
Professor of Sophia Law School
Attorney-at law, Frontier Law Firm

Managing Director
Ikkou Yoshida

Sanae Tanaka

Representative of Sanae Tanaka Law OfficeOutside director of PILOT CORPORATION
Outside director of Shochiku Co., Ltd.

Directors
Yasuo Kaiden
Masataka Nakano

Maho Kinami

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

Emima Abe

Attorney-at Miyamasuzaka the Firm Law &Accounting OfficeOutside director of B-R 31 Ice Cream Co., Ltd.

Mari Ishimitsu

Attorney-at-law, Mikan Law Office

Haruhi Kuroda

Attorney-at law, Homma & Partners

Outside Directors
Ryo Tsuchida*
Sanae Tanaka*
Maho Kinami*
Emima Abe*
Mari Ishimitsu*
Haruhi Kuroda*

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

¥98

¥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¥100

100.00

Provision of aircraft flight training* Independent directors** Independent Audit & Supervisory Board members

Nihon Flight Safety
Co., Ltd.

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

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

Investor Information (As of September 30, 2022)

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

Noevir Aviation, Inc.

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

US$1,350 thousand

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

NT$31,000 thousand

100.00Noevir Taiwan, Inc.

8th Fl.-2, No. 111 Songjiang
Road, Zhongshan District
Taipei City 10486
TaiwanSale of cosmetics, makeup products,
toiletries and food products

TOKIWA Medical Service
Co., Ltd.

5,000 thousand
Chinese yuan

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

26,000 euro

100.00Principal Business100.00100.0050.00

100.00

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

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

Audit & Supervisory Board Member
Takashi Oyama
Outside Audit & Supervisory Board Members
Kazuya Sugimoto**
Kayo Sato**

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 (Prime Market) [Ticker:4928]
Transfer Agent and Registrar
Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku, Tokyo 100-8233, Japan

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 director of ISB Corporation(Audit and Supervisory Committee member)

Major Shareholders
Name

Number of
Shares Held(thousands)

Percentage ofShareholding(%)

NII Co., Ltd.

12,382

36.25

Takashi Okura

3,700

10.83

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

2,390

7.00

Hiroshi Okura

1,000

2.93

Sumitomo Mitsui Banking Corporation

900

2.63

Custody Bank of Japan, Ltd.
(Trust Account)

762

2.23

JAPAN POST INSURANCE Co., Ltd.

481

1.41

Noevir Holdings Employees
Shareholdings Scheme

386

1.13

Nihon Kolmar Co., Ltd.

310

0.91

Sumitomo Life Insurance Company

300

0.88

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

Forward-Looking Statements
Statements in this annual report with respect to Noevir Holdings’ plans, strategies, projected financial results and beliefs as well as other statements that are 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 2022

ANNUAL REPORT 202217