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Results presentation6849NIHON KOHDEN CORPORATIONElectrical and Precision Instruments

Financial Results Briefing Materials for the Second Quarter of the Fiscal Year Ending March 2027

Revenue and operating profit declined in the first half due to the discontinuation of Abbott products and lower domestic sales, while the gross profit margin improved on a better product mix. The full-year forecast was lowered by ¥4 billion for revenue and ¥6.5 billion for operating profit, reflecting cautious domestic capital investment, supply delays and higher component prices.

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Scale
-65
¥100 million (full-year operating income forecast revision)
Wording
Conditional
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Contents of this document

Results presentationSecond quarter of the fiscal year ending March 202714 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales103,369 Millions of yen-4.4%
Operating profit4,013 Millions of yen-40.5%
Ordinary income3,032 Millions of yen-55.0%
Net income1,976 Millions of yen-56.3%
Selling, general and administrative expenses53,155 Millions of yen
Gross Profit Margin
Rate55.3%
Year on year against the same period last year+2.8 percentage points
Operating profit margin
Rate3.9%
Year on year against the same period last year-2.3 percentage points
Results for the three months of the current quarter
Net Sales
55,963 Millions of yen-3.7%
Operating profit
4,996 Millions of yen-6.5%
Ordinary income
3,371 Millions of yen-46.1%
Net income
2,732 Millions of yen-37.7%
Gross Profit Margin56.7%
Operating profit margin8.9%
Selling, general and administrative expenses
26,712 Millions of yen
SG&A-to-sales ratio47.8%
Full-year earnings forecast
Net Sales
228,500 Millions of yen
Operating profit
17,000 Millions of yen
Ordinary income
16,000 Millions of yen
Net income
10,500 Millions of yen
Domestic revenue
126,000 Millions of yen
Overseas revenue
102,500 Millions of yen
Gross profit
125,000 Millions of yen
Selling, general and administrative expenses
108,000 Millions of yen
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
First-half plan missed
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
First-half operating profit
Decrease in gross profit following the discontinuation of Abbott products-1,761
Increase in gross profit from growth in underlying revenue1,276
Selling price and cost impact-2,054
Increase in SG&A expenses-1,245
Foreign exchange impact1,056
Main factors affecting selling prices and costs
Cost increases / indirect costs-1,360
Tariff impact (net)500
Increase in inventory write-downs-320
Improved product mix730
Higher selling prices for own products140
Lower selling prices for third-party products-530
2Q operating profit
Decrease in gross profit following the discontinuation of Abbott products-931
Increase in gross profit from growth in underlying revenue1,170
Selling price and cost impact-809
Increase in SG&A expenses-619
Foreign exchange impact844
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
Average exchange rate¥158 per US dollar / ¥181 per euro
Impact of the situation in the Middle EastA ¥1.8 billion decrease in revenue and a ¥1.2 billion decrease in operating profit have already been factored into the initial full-year forecast
Second-half sales outlookMid-single-digit growth excluding foreign exchange, Ad-Tech's fiscal year-end change and the Abbott impact
Second-half operating profit outlookHigh-single-digit growth, with a gross profit margin in the 54% range
New initiatives
  • Reassign employees who worked in the Abbott business to growth areas such as ventilators and DHS products
  • SEEG electrodes scheduled for launch in the third quarter of the fiscal year ending March 2027
  • AI/ML-equipped sleep analysis module scheduled for launch in the third quarter of the fiscal year ending March 2027
  • Launch of a central monitor that received FDA approval in the United States
  • Introduce Nihon Kohden ROIC to visualize profitability and efficiency by division
  • Improving operational efficiency through generative AI and bringing software development in-house
Key KPIsA metric the company considers important as a management benchmark.
  • Overseas revenue ratio46.1%
    Year on year against the same period last yearUp from 38.1%
  • AED units sold56,100 Machines
    Year on year against the same period last year-6.7%
  • AED units sold in Japan30,700 Machines
    Year on year against the same period last year-8.6%
  • Number of employees6,070 People
    Year on year against the same period last year6,138 people in the year-earlier period
  • Overtime hoursDown 10.5% year on year
    Year on year against the same period last year-10.5%
  • Operational Efficiency Through Generative AI65 10,000 hours/month
Medium-term management plan targets
Revenue CAGR5% (FY2024–FY2027)
Operating profit margin15% (FY ending March 2027)
ROE12% (FY ending March 2027)
Net Sales¥256 billion (FY ending March 2027)
Operating profit¥38.5 billion (FY ending March 2027)
Financial targets
ROIC
Target12%
Actual results4.0% (FY ended March 2024), 6.3% forecast for FY ending March 2027
ROE
Target12%
Actual results9.8% (FY ended March 2024)
Equity ratio
Actual results72.2% (end of the first half of FY ending March 2027)
Risk amount incorporated into the outlookThe amount representing the range of variation the company expects in its forecast.
Impact of the situation in the Middle East
Net Sales-18 Hundreds of millions of yen
Operating profit-12 Hundreds of millions of yen
Market Size / Share
Market growth rate: approximately 1–2% in Japan and mid-single digits in North America
Number of employees
Number of Employees6,070 People
Change during the periodDown 46 from end-March 2026
Capital expenditures
¥6,000 million full-year forecast
Annual Dividend
Annual dividend per share¥33 (forecast)
Payout ratio
50.3% (consolidated payout ratio, forecast)
Acquisition of treasury shares
To be implemented flexibly, taking comprehensive account of future business development, investment plans, retained earnings levels and share-price trends, among other factors
Contents of this document
ItemDetails
Document typeResults presentation
Fiscal Period CoveredSecond quarter of the fiscal year ending March 2027
Net Sales103,369 Millions of yen (YoY -4.4%)
Operating profit4,013 Millions of yen (YoY -40.5%)
Ordinary income3,032 Millions of yen (YoY -55.0%)
Net income1,976 Millions of yen (YoY -56.3%)
Gross Profit MarginRate 55.3% / Year on year against the same period last year +2.8 percentage points
Operating profit marginRate 3.9% / Year on year against the same period last year -2.3 percentage points
Selling, general and administrative expenses53,155 Millions of yen
Results for the three months of the current quarterNet Sales 55,963 Millions of yen (YoY -3.7%) / Operating profit 4,996 Millions of yen (YoY -6.5%) / Ordinary income 3,371 Millions of yen (YoY -46.1%) / Net income 2,732 Millions of yen (YoY -37.7%) / Gross Profit Margin 56.7% / Operating profit margin 8.9% / Selling, general and administrative expenses 26,712 Millions of yen
Full-year earnings forecastNet Sales 228,500 Millions of yen / Operating profit 17,000 Millions of yen / Ordinary income 16,000 Millions of yen / Net income 10,500 Millions of yen / Domestic revenue 126,000 Millions of yen / Overseas revenue 102,500 Millions of yen / Gross profit 125,000 Millions of yen / Selling, general and administrative expenses 108,000 Millions of yen
Self-assessment against the planFirst-half plan missed
Breakdown of Factors Affecting the ChangeFirst-half operating profit Decrease in gross profit following the discontinuation of Abbott products -1,761 / Increase in gross profit from growth in underlying revenue 1,276 / Selling price and cost impact -2,054 / Increase in SG&A expenses -1,245 / Foreign exchange impact 1,056 / Main factors affecting selling prices and costs Cost increases / indirect costs -1,360 / Tariff impact (net) 500 / Increase in inventory write-downs -320 / Improved product mix 730 / Higher selling prices for own products 140 / Lower selling prices for third-party products -530 / 2Q operating profit Decrease in gross profit following the discontinuation of Abbott products -931 / Increase in gross profit from growth in underlying revenue 1,170 / Selling price and cost impact -809 / Increase in SG&A expenses -619 / Foreign exchange impact 844
Key KPIsIndicator name Overseas revenue ratio / Value 46.1% / Year on year against the same period last year Up from 38.1%, Indicator name AED units sold / Value 56,100 Machines / Year on year against the same period last year -6.7 Machines, Indicator name AED units sold in Japan / Value 30,700 Machines / Year on year against the same period last year -8.6 Machines, Indicator name Number of employees / Value 6,070 People / Year on year against the same period last year 6,138 people in the year-earlier period, Indicator name Overtime hours / Value Down 10.5% year on year / Year on year against the same period last year -10.5 %, Indicator name Operational Efficiency Through Generative AI / Value 65 10,000 hours/month / Year on year against the same period last year Not disclosed
Number of employeesNumber of Employees 6,070 People / Change during the period Down 46 from end-March 2026 / Hiring plan Not disclosed
Assumptions Underlying the Business OutlookAverage exchange rate ¥158 per US dollar / ¥181 per euro / Impact of the situation in the Middle East A ¥1.8 billion decrease in revenue and a ¥1.2 billion decrease in operating profit have already been factored into the initial full-year forecast / Second-half sales outlook Mid-single-digit growth excluding foreign exchange, Ad-Tech's fiscal year-end change and the Abbott impact / Second-half operating profit outlook High-single-digit growth, with a gross profit margin in the 54% range
Risk amount incorporated into the outlookImpact of the situation in the Middle East Net Sales -18 Hundreds of millions of yen / Operating profit -12 Hundreds of millions of yen
Medium-term management plan targetsRevenue CAGR 5% (FY2024–FY2027) / Operating profit margin 15% (FY ending March 2027) / ROE 12% (FY ending March 2027) / Net Sales ¥256 billion (FY ending March 2027) / Operating profit ¥38.5 billion (FY ending March 2027)
Financial targetsROIC Target 12% / Actual results 4.0% (FY ended March 2024), 6.3% forecast for FY ending March 2027 / ROE Target 12% / Actual results 9.8% (FY ended March 2024) / Equity ratio Actual results 72.2% (end of the first half of FY ending March 2027)
Annual DividendAnnual dividend per share ¥33 (forecast) / Interim and Year-End Breakdown Not disclosed
Payout ratio50.3% (consolidated payout ratio, forecast)
Acquisition of treasury sharesTo be implemented flexibly, taking comprehensive account of future business development, investment plans, retained earnings levels and share-price trends, among other factors
Capital expenditures¥6,000 million (full-year forecast)
Market Size / ShareMarket growth rate: approximately 1–2% in Japan and mid-single digits in North America
New initiativesReassign employees who worked in the Abbott business to growth areas such as ventilators and DHS products, SEEG electrodes scheduled for launch in the third quarter of the fiscal year ending March 2027, AI/ML-equipped sleep analysis module scheduled for launch in the third quarter of the fiscal year ending March 2027, Launch of a central monitor that received FDA approval in the United States, Introduce Nihon Kohden ROIC to visualize profitability and efficiency by division, Improving operational efficiency through generative AI and bringing software development in-house
Items this document does not state (6)
Progress against full-year forecastSegment resultsUnit price and quantity metricsNumber of stores and locationsOrders received and order backlogKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

The full-year forecast reflects cautious spending on medical equipment in the first half, supply delays for third-party products, the discontinuation of Abbott products, higher component prices and price competition for domestic consumables. The operating profit revision reflects expectations that revenue and the gross profit margin will fall below the initial forecast.

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Financial Results Briefing Materials for the Second Quarter of the Fiscal Year Ending March 2027 | NIHON KOHDEN CORPORATION (6849) timely disclosure | Komori