Establishment of the healthcare business and expansion of high-performance mask products and sales channels

「Beginning with the first quarter of the current consolidated fiscal year, in view of the healthcare business's impact on consolidated results, we will disclose it as part of the construction-equipment filter business. Accordingly, the reporting segments have changed from the previous three segments, "Construction-Equipment Filter Business," "Air Filter Business" and "Healthcare Business," to "Construction-Equipment Filter Business" and "Air Filter Business."」

「Beginning with the first quarter of the current consolidated fiscal year, in view of the healthcare business's impact on consolidated results, we will disclose it as part of the construction-equipment filter business. Accordingly, the reporting segments have changed from the previous three segments, "Construction-Equipment Filter Business," "Air Filter Business" and "Healthcare Business," to "Construction-Equipment Filter Business" and "Air Filter Business."」

「In the healthcare business, the recognition of an impairment loss of ¥919 million as an extraordinary loss as part of fundamental business-structure reforms to address major changes in the business environment resulted in a substantial full-year decline in revenue and profit. In the fourth quarter, however, the company reviewed its distribution channels and restructured unprofitable products, securing operating profit.」

「In the healthcare business, future demand is extremely uncertain due to major changes in the market environment and other factors, making business continuity extremely difficult. Accordingly, we recognized an impairment loss of ¥919 million on all property, plant and equipment invested in the business as an extraordinary loss. Through this action, we will rapidly implement fundamental business-structure reforms to improve profitability in the healthcare business, while urgently improving profitability across the Group.」

「Meanwhile, in the medical mask market following DS2 certification, obtaining the required US and European certifications (Note 1) is taking time. As overseas-made N95 masks remain overwhelmingly dominant, we will continue developing this market from a long-term perspective.」

「Regarding the mass-production system for masks, which is a challenge for the profitability of the business, the Company expects to achieve substantial cost reductions through production rationalization by introducing a fully automated line scheduled to begin operation in the second quarter. Since imported N95 masks are overwhelmingly dominant in the medical-use mask market following DS2 certification, the Company will pursue development of this market from a long-term perspective.」

「Beginning in the second quarter, the Company gradually started selling the “Ultimate YAMASHIN Filter Mask” and “Ultimate YAMASHIN Filter Sheet,” using its proprietary synthetic polymer nanofiber technology, through its official online shop, major drugstore chains, major e-commerce sites and other channels. Leveraging technology cultivated over 70 years as a filter specialist since its founding, the Company also began selling “Zexeed” (ゼクシード) from November 2020, a flagship consumer model that achieves at a medical-use level the 3 key performance criteria required for high-performance masks: ① filtration performance, with a collection efficiency of at least 95% (Note 2), based on the performance standard for N95 masks (Note 1), one of the standards of NIOSH (the National Institute for Occupational Safety and Health); ② sealing performance, with a face-to-mask fit rate of at least 90% while worn (Note 2); and ③ breathability, including ease of breathing during extended wear.」

「The Company commercialized YAMASHIN original masks and replacement inner sheets using its proprietary synthetic polymer nanofiber technology, began selling them through its e-commerce site in May 2020, and gradually began sales through major drugstore chains and other channels in September of the same year. As a result, their importance to the performance of the Group increased, and the Company decided to disclose segment information under a new “Healthcare Business” segment in addition to the existing “Construction Equipment Filter Business” and “Air Filter Business” segments.」