TO OUR SHAREHOLDERS

Thank you for your continued support of Noritsu Koki.
I would like to update you on the Group’s business activities and performance in FY12/2020, a nine-month transitional fiscal period from April 1 to December 31, 2020.

Representative Director and CEO
sign_Ryukichi Iwakiri

Review of FY2020

In FY2020, a nine-month transitional period from April to December, revenue and profits both rose sharply compared with the same period in FY2019. However, growth was mainly driven by the addition of the audio equipment/peripherals business to the Manufacturing Segment after the consolidation of AlphaTheta in April 2020.
Excluding the Healthcare Segment’s medical testing business, which saw a drop in testing volumes as people stayed away from clinics during the pandemic, revenue and operating EBITDA in all the Group’s businesses exceeded guidance revised on November 13, 2020. The audio equipment/peripherals business was a strong outperformer, supported by firm sales of new premium products launched in the Oct-Dec quarter.
Despite costs related to the acquisition of AlphaTheta and financial expenses arising from forex effects on euro-denominated loans, operating profit and gains on the sale of discontinued operations as part of business portfolio realignment supported a large increase in profit attributable to owners of parent.

Growth strategy after portfolio realignment

We have now completed the realignment of our business portfolio, in line with the schedule and objectives of the Medium-Term Management Plan.
We are now turning our attention to research and development, capital expenditure and other appropriate steps to enhance the Group’s service innovation and technical capabilities, focusing on the Manufacturing Segment. In the case of Teibow, we plan to further strengthen its metal injection molding (MIM) business using cashflow generated by the mainstay writing instruments (pen nibs) and cosmetics (nibs and brushes) businesses. With AlphaTheta, which already has a strong international presence, our goal is to expand the company’s economic reach further using overseas business sites. We aim to kickstart a cycle of self-generating growth by moving into more areas of the entertainment industry and by developing new business fields, including both product- and experience-based businesses. We will also channel investment into building a solid business foundation for the Group, such as upskilling and increasing human resources in the Manufacturing Segment and upgrading our management structure to support the next phase of growth. In the Healthcare Segment, we will pursue business opportunities through JMDC, now a listed company, and through NK Medico, which has started IPO preparations.
The entire management team of Noritsu Koki remains committed to increasing the Group’s corporate value over the medium and long term. I hope we can count on your continued support as we work towards our objectives.

March 2021