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, We have started 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 from FY2021.

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 FY2020 actual FY2023 target 
Sales 199.7 197.0
   - Domestic sales 137.2 134.0
   - Overseas sales 62.4 63.0
Gross profit margin 51.2% Over 50%
Operating income
Operating income margin
27.0
13.6%
20.0
10.2%
Income attributable to owners of parent 18.2 13.8
ROE 14.0% 10%

Breakdown of overseas sales by region 
  FY2020 actual FY2023 target 
Americas 30.2 32.0 
Europe 13.1 10.0 
Asia & Other 19.0 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.

Review of the fiscal year 2020

As the business environment had changed significantly due to the COVID-19 pandemic, Nihon Kohden conducted its business activities in FY2020 in accordance with the basic policies of: (1) Ensuring the health and safety of its employees as the top priority. (2) Fulfilling its responsibilities as a medical device maker. The Company addressed challenges such as improving profitability of existing businesses and consolidating corporate fundamentals to grow as a global company. The Company also ramped up production of patient monitors and ventilators at the Tomioka Production Center, Shanghai Kohden (China), and Nihon Kohden OrangeMed (U.S.) to meet demand, which was boosted by the growing number of COVID-19 patients. As a result, the Company was able to acquire new customer base. One of the greatest achievements is that the ventilator business has grown to a certain scale driven by the Company’s two types of in-house ventilators launched in FY2019. In Japan, the Company strived to sell in-house products for creating customer value. The Company also focused on the following proposals: a solution that enables medical staff to view patients’ conditions remotely on mobile terminals from out of ward, the cloud-based service named LAVITA that enables management of medical data for COVID-19 patients in accommodation facilities, and disposable consumables. Internationally, the Company has positioned the U.S. and China as growth markets and established the US Operations and the China Operations headquarters in April 2020. In the U.S., the Company strengthened its business operations and enhanced the collaboration among its six subsidiaries. The Company also started a program to respond to COVID-19, NKHealthProtect. In China, the Company enhanced its local R&D and production capabilities to meet the local customer needs. Furthermore, the Company has continued to give top priority to the support of medical workers by maintaining supply of products and services, while implementing thorough measures to prevent infection in all regions. The Company also started providing online seminars and training programs. As a result of these developments, the Company posted record highs both in sales and profits in FY2020.

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.