nihonkohden

Vision & Strategy

Management Philosophy

We contribute to the world by fighting disease and improving health with advanced technology, and create a fulfilling life for our employees.

BEACON 2030: Long-term Vision toward 2030

Create a better future for people and healthcare by solving global medical issues.

In an ever-changing medical environment, we will strive to become the beacon that lights the path forward to the future of people and healthcare with the philosophy we have upheld since our founding.
With strong passion in our hearts, we have created our new long-term vision, BEACON 2030.

Prologue  Vision Statement  Value Creation Compass  Vision for the Future
Three Transformations  Three Phases  Management Index  Core Values




Three-year Business Plan (FY2021 - FY2023)

Based on its management philosophy, a three-year business plan, BEACON 2030 Phase I, has been designed with the twin aims of achieving a sustainable society and enhancing the corporate value of the Company.

1. Basic Policy

・Embrace sustainability across business and corporate activities
・[Management] Ensure strict compliance and strengthen group governance
・[Business] Improve the profitability of existing businesses and obtain the resources to invest strategically for sowing seeds of new growth
・[Operations] Establish global SCM and strengthen core functions of operations to lay a foundation for global growth

2. Embrace sustainability

The Nihon Kohden Group defined 12 material issues to be addressed through business and corporate activities in accordance with the UN Sustainable Development Goals. In our business activities, we will address 8 issues aimed at realizing the 5 visions for the future which we designated in BEACON 2030. In corporate activities, we will address 4 issues of Human rights/Human resources, Quality, Governance, and Environment. In order to address these issues, the Company will strengthen and combine human machine interface* technologies, digital technologies, and green technologies to reduce its environmental footprint.

* Human machine interface is the user interface that connects human and machine. For Nihon Kohden, this refers to sensor technology, signal processing technology, and data analysis technology.
12 Material Issues in Sustainability 
Material issues to be addressed through business 
BEACON 2030

5 visions for the future

・Accessbile
・Intelligent
・Patient oriented
・Connected
・Optimized
i. Improve resuscitation rates by expanding access to AEDs
ii. Provide educational opportunities for medical professionals in emerging nations
iii. Automatic control of medical equipment
iv. Develop and provide sensors which are gentle on the patient
v. Create a peaceful patient environment with advanced alarm technology
vi. Contribute to care for patients with heart failure, brain disorders and infection
vii. Improve product utilization rate by remote monitoring
viii. Eliminate health disparities by telemedicine
Material issues to be addressed through corporate activities 
Human rights/Human resources ix. Foster a corporate culture of pride in contributing to healthcare
Quality x. Pursue the highest level of quality in the world across the value chain
Governance xi. Ensure strict compliance and strengthen group governance
Environment xii. Contribute to realizing a carbon-free society

3. Six key strategies

(1) [Management] Ensure strict compliance and strengthen group governance
・Reorganize the Legal Department into the Compliance & Legal Department in the Global Corporate Administration Operations
・Newly establish the Compliance Department in the Sales Operations which controls domestic sales branches
・Enhance compliance training at each workplace to prevent corruption
・Establish and promote global management policy, strengthen internal control over domestic sales

(2) [Business] Improve the profitability of existing businesses
The Company aims to improve the profitability of existing businesses such as Patient Monitor Business, Treatment Equipment Business, Diagnostic Equipment Business, and Consumables and Services Business, through creating high customer value, enhancing productivity, and timely launch of new products.

(3) [Business] Strengthen strategies in global business
Nihon Kohden focuses on Japan, the U.S., and China, and establishes Global Quad-Polar Organization together with Europe & Emerging markets.
[Japan] Enhance solution proposals that contribute to improving quality of medical care and addressing medical issues
[U.S.] Expand business in the U.S. by integration and unification of six local subsidiaries
[China] Maximize customer value by utilizing local R&D, production, and sales functions
[Europe & Emerging markets] Expand sales to new customer base and promote solution proposals

(4) [Business] Create new customer value by digital health solutions
・Establish a vital sign data platform for integration and analysis of data, and develop clinical support applications for improving patient outcomes and economy of medical care

(5) [Operations] Promote corporate digital transformation
・Establish a global information system and communication system in order to promote work-style reforms and improve operating efficiency

(6) [Operations] Establish global supply chain management
・Realize supply chain data visualization by DX and reform operational processes in procurement, production, and logistics

4. Human resource development and corporate culture reform

In accordance with its Core Values, Nihon Kohden will introduce a new personnel system and enhance its global human resource development programs to foster corporate culture in which employees take pride in contribution to healthcare and mission.

5. Targets for FY2023 ending March 2024 (consolidated)

In FY2021, which is the first year of BEACON 2030 Phase I, Nihon Kohden will focus on minimizing the negative impact in reaction to special demand related to COVID-19. The Company will consistently implement six key strategies set out above to achieve the targets and embrace sustainability across its business and corporate activities.
 
 ¥billion FY2019 actual FY2020 forecast FY2023 target 
Sales 185.0 190.5 197.0
   - Domestic sales 134.3 129.0 134.0
   - Overseas sales 50.6 61.5 63.0
Gross profit margin 48.3% 49.7% Over 50%
Operating income
Operating income margin
15.5
8.4%
20.0
10.5%
20.0
10.2%
Income attributable to owners of parent 9.8 11.8 13.8
ROE 8.3% 10%

Breakdown of overseas sales by region 
  FY2019 actual FY2020 forecast FY2023 target 
Americas 24.7 29.6 32.0 
Europe 9.0 12.7 10.0 
Asia & Other 16.8 19.2 21.0 
Exchange rate assumptions: 102 yen to the U.S. dollar, 124 yen to the euro


[Reference] Investment plan for growth
The total amount of R&D costs and capital investments are planned to be about 20.0 billion yen and 14.0 billion yen respectively over three years.
The Company will undertake R&D investments for developing digital health solutions which the Company defines as new business and capital investments for promoting corporate digital transformation and establishing global SCM.

6. Basic policy on distribution of profits and dividends

 Nihon Kohden applies a basic policy on distribution of profits and dividends that prioritizes i) investment necessary for future business expansion used in R&D investments, capital investments, M&A or alliances, and development of human resources, ii) dividends, and iii) share buybacks. With stable and continuous dividends as its basic policy, the Company sets a target consolidated dividend payout ratio of 30% or more. Share buybacks are considered in a flexible manner, taking into account comprehensively the Company’s future business developments, investment plans, retained earnings, and stock price level.

Measures in FY2020

In FY2020, Nihon Kohden conducts its business activities in accordance of its basic policies: (1) Health and safety of employees as the top priority. (2) Fulfilling its responsibility as a medical device maker. Challenges to be addressed are as follows:

1. Improve profitability of existing businesses
  • Launch new products on schedule
  • Achieve further growth in overseas business
  • Enhance customer value proposition in domestic business
2. Consolidate corporate fundamentals to grow as a global company
  • Strengthen governance and business management structure
  • Improve supply chain management using IT 
Nihon Kohden continues to contribute to achieving a sustainable society and enhancing the corporate value of the Company through addressing the challenges of medical care through technological development.

Review of TRANSFORM 2020 covering the fiscal years 2017 to 2019

Nihon Kohden implemented its three-year medium-term business plan, TRANSFORM 2020 with the aim of achieving the transformation to a highly profitable structure through creating high customer value and improving productivity within the organization. In line with this plan, the Company implemented key strategies such as strengthening business expansion by region and achieving further growth in core businesses. The Company launched a series of new value-added products: midrange bedside monitors, the Company's first spot check monitors and bedside monitors for emerging markets in the past three years. One of the greatest achievements is the launch of two models of the Company's first in-house ventilators as ventilator business has the potential to become a new business pillar of the Group. In Japan, Nihon Kohden absorbed 11 domestic sales subsidiaries for the purpose of executing a unified sales strategy and improving the operational efficiency of the Group. The Company also strengthened its marketing and service capabilities creating customer value. Internationally, in the U.S. which is the prime focus market for the Company, the enhanced local R&D capability enabled us to provide large-scale monitoring network systems to the U.S. top hospitals and strengthen Nihon Kohden's presence in the patient monitoring market. In accordance with its basic policy "Improve productivity within the organization", the Company established the Eastern Japan Logistics Center with the aim of reducing logistics costs and also worked on ICT-driven business process reform. While the results of the efforts made in the past three years are expected to appear after FY2020, at present, measures to improve efficiency were insufficient in all of the Company's operations from development, production and delivery to sales, services and administration. The Company still has a long way to go before achieving an improvement of productivity within the organization. As a result, the financial results for the fiscal year ended March 31, 2020, which was the last year of TRANSFORM 2020, were below the Company's targets for consolidated sales, operating income and ROE. This was also due to the delayed launches of new products and the Company’s upfront investment burden. The improvement of profitability remains as an issue to be solved.
 
 ¥100 million Actual Results in FY2019 Target in FY2019 
Sales 1,850 1,900
   - Domestic sales  1,343 1,350
   - Overseas sales 506 550 
Operating income 155 200 
 ROE 8.3%  12.0% 



Long-term Vision Materials

Press Release [PDF/180KB/2page]    (September 1, 2020)
Presentation [PDF/2.8MB/20page]    (September 1, 2020) 

Three-year Business Plan Materials

Disclaimer

The contents of this document are based on the Company’s best judgments at the time it was prepared and do not constitute a guarantee or promise that the Company will achieve its numerical targets or implement the measures described therein.