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 long-term vision, BEACON 2030.

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. Realize 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)

¥billion

FY2022 actual

FY2023 target

Sales

206.6

197.0

  - Domestic sales

135.7

134.0

  - Overseas sales

70.8

63.0

Gross profit margin

51.3%

Over 50%

Operating income

Operating income margin

21.1

10.2%

20.0

10.2%

Income attributable to owners of parent

17.1

13.8

ROE

10.6%

10%

Breakdown of overseas sales by region

FY2022 actual

FY2023 target

Americas

36.8

32.0

Europe

12.3

10.0

Asia & Other

21.7

21.0

Exchange rate assumptions for FY2023 target : 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 2022

In FY2022, which was the second year of this plan, the Company worked on continuing to supply products globally by implementing reforms to its supply chain management and promoting collaboration across all divisions such as R&D, procurement, production, logistics, and sales, to respond the product supply issues due to the shortage of semiconductors and the Shanghai lockdown. In Japan, demand for medical devices, that had decreased over the past two years due to the COVID-19 pandemic, recovered. Demand for consumables also increased favorably as the number of testing and surgical procedures recovered. Domestic sales decreased due to a reactionary decline of COVID-19-related demand but exceeded its original forecast, because the Company focused on consumables and services business as well as creating customer value propositions. Internationally, there were loss of business opportunities and delays in supplying new models due to the product supply issues in the first half of FY2022. In the second half of FY2022, sales recovered thanks to the launch of new mid-range beside monitors and a mask-type ventilator in the U.S. and yen depreciation. The Company also received orders related to strengthening healthcare system especially in Europe, Latin America, and India. Compared to its original forecast, full-year sales exceeded on a yen basis but were behind on a comparable basis, because of the negative impact of delays in supplying new models in the U.S. and the Shanghai lockdown. As a result, Nihon Kohden posted record highs in sales in FY2022. Operating income exceeded its original forecast, due to the increase in sales and higher gross profit margin compared to its forecast.

 

Long-term Vision Materials

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.