Policy of making business portfolio restructuring the top priority

「Under the previous medium-term management plan, we pursued a broad range of areas to create and develop new businesses. Based on the strengths and challenges identified through these efforts, under the current medium-term management plan we will concentrate management resources on businesses with competitive advantages and seek to drive the growth of the businesses selected.」

「We transferred the R&D business for semiconductor wafer-bonding technology held by the company and recognised a gain on the transfer of business of ¥2,978 million in the Precision Equipment business.」

「In response to lower-than-expected earnings in fiscal 2024, we have been optimising our structure through multiple structural reforms and organisational integrations. At the same time, we are strengthening the selection and concentration of growth investments. We intend to limit the allocation of resources to projects that require time to achieve scale and focus growth investment on three areas: professional video cameras, next-generation lithography equipment and metal additive manufacturing.」

「From the current interim consolidated accounting period, we integrated the Industrial Equipment Business Division and the Digital Solutions Business Division to establish the Industrial Solutions Business Division.」

「For strategic investments to accelerate growth, we made SLM a wholly owned subsidiary in September 2023 and RED a wholly owned subsidiary in April 2024. Accordingly, we will treat large-scale M&A as a completed phase and reduce the amount from the initial plan by ¥110 billion, while increasing R&D and capital investment by a combined ¥80 billion to pursue organic growth.」

「There was an outlay of ¥7,847 million to acquire interests in subsidiaries from non-controlling interests in connection with the conversion of SLM and other companies into wholly owned subsidiaries.」

「To strengthen the business, we established Nikon Advanced Manufacturing, Inc. in the United States to oversee the AM business in Japan, the United States and Europe. We aim to expand the business from a US base and help realise a prosperous, sustainable society.」

「From the cumulative first quarter of the current fiscal year, we established the Advanced Manufacturing Business Division to strengthen the additive manufacturing business.」

「From the fiscal year ended March 2024, the Group established Digital Manufacturing Business as a new reporting segment. It consolidates the divisions and subsidiaries engaged in the AM business, including businesses previously included in Industrial Equipment and Other, such as the Industrial Equipment Business and SLM, part of the AM Business previously included in the Component Business, and part of the Next-Generation Project Headquarters previously included in unallocated corporate profit and loss.」

「Based on these agreements, we conducted a voluntary tender offer, subsequently obtained clearance under foreign investment regulations in the relevant countries, and completed the acquisition of the shares effective 27 January 2023.」

「In strategic businesses such as healthcare and components, we pursued the expansion of solutions, new fields and contract businesses to create new value in promising markets expected to grow. We also worked on M&A and alliances, including entering into an agreement to acquire SLM Solutions Group AG, thereby expanding earnings.」

「In the Component Business, which became a new reporting segment from April 2021, optical components and EUV-related components expanded and grew into an earnings pillar.」

「From the first quarter of the current fiscal year, we established the Component Business as a new reporting segment to promote the businesses designated as long-term growth areas, digital manufacturing and vision systems/robotics. We transferred to it the Digital Solutions Business, Custom Products Business and Glass Business, which had previously been included in Industrial Equipment and Other.」

「The Component Business, which became a new reporting segment from April 2021, comprises optical components and EUV-related components. Following the fruition of our efforts to date, it is expected to transition to the earnings-generation phase from the fiscal year ending March 2022.」

「As part of strengthening the profitability of existing businesses, we are restructuring the imaging business through more extensive structural reforms. In our principal businesses, in addition to reviewing the production and sales structures, we are working to improve profitability through cost reforms including logistics reforms and further streamlining of administrative and indirect operations.」

「Effective 1 April 2020, we transferred businesses with the aim of expanding the peripheral business related to semiconductor lithography systems.」

「Toward the target of ¥18 billion in total cost reductions over the Plan period, we are systematically advancing measures including supply chain optimization, streamlining of administrative and indirect functions, and the reorganization of our global sales and production structures.」

「To strengthen the profitability of existing businesses, we further reviewed the production and sales structures and advanced selection and concentration in the three principal businesses of imaging, FPD equipment and semiconductor equipment.」

「Specifically, while advancing the shift to portfolio management, we worked to embed ROE and ROIC, established as management indicators emphasizing capital efficiency, throughout each organization and among individual employees.」

「Specifically, we promoted the establishment and steady operation of mechanisms to embed portfolio management, while working to roll out across the Company business operations based on management indicators that emphasize capital efficiency.」

「As a company-wide initiative, we launched portfolio management, reviewed our management structure and management processes around management indicators such as ROE and ROIC, and worked to strengthen our governance framework.」

「Effective 29 June 2017, we established a new Healthcare Division by integrating the Microscope Solutions Business, which had previously been included in the Instruments Business, and the Medical Business. The aim was to quickly integrate and optimize the organization and functions, create business synergies, strengthen existing businesses and accelerate the creation and development of new businesses in the health, medical and biotechnology fields, where growth is expected.」

「Implemented company-wide "selection and concentration" to improve and enhance profitability」

「To strengthen profitability and improve the corporate structure with a view to enhancing corporate value across the Group, we will review the business strategies of the semiconductor equipment and imaging businesses, optimize our global production, sales and R&D structure, and optimize our organization and workforce, including the head office functions.」

「The Group continues to position business portfolio restructuring as its top priority. Along with strengthening the competitiveness and improving the corporate structure of existing businesses, we will develop the medical business and expand the microscope solutions and industrial equipment businesses, advancing the transformation into a corporate group growing through a six-business portfolio.」