Nihon Kohden (6849): FY2025 Results Summary — Overseas Sales Up 13.1% but Operating Income Down 9.5%; Operating Income Forecast to Rise 25.4% in FY2026

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Nihon Kohden Corporation labels the fiscal year ended March 31, 2026 as “FY2025” and the year ending March 31, 2027 as “FY2026”; the text and tables below follow the company’s labels. For FY2025, Nihon Kohden reported consolidated net sales of 235,099 million yen, up 4.3% year on year, with domestic sales down 0.6% and overseas sales up 13.1%, driven by double-digit growth in North America. Operating income decreased 9.5% to 18,745 million yen as domestic sales decreased and SG&A expenses increased due to wage increases and R&D investments as well as higher depreciation caused by M&A and capital investments, while ordinary income rose 10.7% to 22,544 million yen and income attributable to owners of parent rose 2.9% to 14,513 million yen. For FY2026 the company forecasts net sales of 232,500 million yen (down 1.1%), reflecting the discontinuation of Abbott products, and operating income of 23,500 million yen (up 25.4%). The full-year dividend forecast is 32 yen for FY2025 and 33 yen for FY2026.

Consolidated Results (Full-Year Actual)

Consolidated net sales for FY2025 were 235,099 million yen, compared with 225,424 million yen in FY2024 (up 4.3%). Domestic sales were 144,406 million yen (down 0.6%) and overseas sales were 90,693 million yen (up 13.1%; up 14% on a local currency basis, and up 8% on a local currency basis excluding the impact of the consolidation of Ad-Tech). According to the company, domestic sales increased excluding lower sales of locally purchased products and Abbott products; sales of AEDs decreased due to inventory adjustment at distributors, while sales of diagnostic information systems and clinical information systems achieved double-digit growth and sales of in-house consumables and services also increased. Overseas sales increased in all regions. Gross profit was 121,726 million yen (up 3.9%) with a gross margin of 51.8% (52.0% in FY2024), and SG&A expenses were 102,981 million yen (up 6.8%) with an SG&A ratio of 43.8% (42.8%). Operating income was 18,745 million yen (down 9.5%) and the operating margin was 8.0% (9.2%). Ordinary income was 22,544 million yen (up 10.7%), with foreign exchange gains/losses swinging from 0.9 billion yen of losses to 3.4 billion yen of gains. Income attributable to owners of parent was 14,513 million yen (up 2.9%) after extraordinary losses including extra payments for early retirements of 2.4 billion yen. The average exchange rate was 150.5 yen per U.S. dollar and 174.2 yen per euro (152.4 yen and 163.5 yen in FY2024).

Item (millions of yen)	FY2025	FY2024	YoY (%)
Net sales	235,099	225,424	4.3
— Domestic sales	144,406	145,237	– 0.6
— Overseas sales	90,693	80,187	13.1
Gross profit	121,726	117,157	3.9
(Gross margin)	51.8%	52.0%
SG&A expenses	102,981	96,444	6.8
(SG&A ratio)	43.8%	42.8%
Operating income	18,745	20,713	– 9.5
(Operating margin)	8.0%	9.2%
Ordinary income	22,544	20,373	10.7
Income attributable to owners of parent	14,513	14,098	2.9

In the breakdown of operating income, the decrease from 20,713 million yen in FY2024 to 18,745 million yen in FY2025 reflects an increase in gross profit from the sales increase of +4,486 (of which the impact of Ad-Tech was approx. 60%), the impact of selling prices and cost of +834, an increase in SG&A of -6,729 (impact of Ad-Tech less than 50%) and a currency effect of -559. The main items of increase in SG&A expenses were salaries (+2.71 billion yen), amortization of goodwill (+0.93 billion yen), depreciation (+0.87 billion yen) and R&D expenses (+0.62 billion yen). In the fourth quarter alone, net sales were 71,086 million yen (up 6.2%), operating income was 9,610 million yen (down 1.7%), ordinary income was 10,661 million yen (up 55.3%) and income attributable to owners of parent was 8,104 million yen (up 36.0%).

On the balance sheet, total assets were 256,538 million yen at the end of FY2025 (down 1,737 million yen), net assets were 179,824 million yen (down 1,470 million yen) and the equity ratio was 70.1% (69.5%). Short-term interest-bearing debt decreased by 25.9 billion yen while long-term borrowings increased by 22.3 billion yen, reflecting refinancing of short-term borrowings into long-term borrowings; property, plant and equipment increased as buildings and structures rose by 6.3 billion yen with the start of operations at the Tsurugashima Production Center. Net cash flows from operating activities were 21,055 million yen (15,286 million yen), net cash flows from investing activities were -8,285 million yen (-25,138 million yen), free cash flows were 12,770 million yen (-9,852 million yen), and cash and cash equivalents at end of period were 45,637 million yen. ROE was 8.1% (7.8%). Capital investment was 7,807 million yen (9,519 million yen), depreciation was 4,757 million yen (4,067 million yen) and R&D expenses were 7,453 million yen (6,826 million yen).

Sales by Product Category and Region

Domestic sales by product category were: Physiological Measuring Equipment 36,824 million yen (up 1.6%), Patient Monitors 45,927 million yen (down 0.6%), Treatment Equipment 28,912 million yen (down 6.0%) and Other Medical Equipment 32,742 million yen (up 2.2%), for total domestic sales of 144,406 million yen (down 0.6%); for reference, domestic Medical Devices were 58,664 million yen (down 2.4%) and Consumables and Services 85,742 million yen (up 0.7%). By market in Japan, sales of AEDs decreased in the PAD market mainly due to inventory adjustment at distributors and sales in the public hospital market also decreased, while sales in the university, private hospital and clinic markets increased. Sales of Abbott’s ablation catheters decreased, sales of ventilators increased favorably, mainly intubated-type ventilators, and sales of installation and maintenance services for medical devices increased favorably.

Overseas sales by product category were: Physiological Measuring Equipment 16,812 million yen (up 58.2%; up 58% on a local currency basis), Patient Monitors 38,331 million yen (down 1.1%; down 1%), Treatment Equipment 27,373 million yen (up 22.1%; up 23%) and Other Medical Equipment 8,175 million yen (down 2.3%; down 1%), for total overseas sales of 90,693 million yen (up 13.1%; up 14%); overseas Medical Devices were 57,332 million yen (up 7.8%) and Consumables and Services 33,361 million yen (up 23.6%). By region, sales rose 19% in North America (up 20% on a local currency basis), 4% in Latin America (up 6%), 9% in Europe (up 4%) and 6% in Asia & Other (up 9%). Sales of neurology products including Ad-Tech increased significantly, and sales of ventilators increased significantly in North America, Europe and Latin America, while sales of patient monitors in North America and Europe decreased compared to the strong growth in FY24. The overseas sales ratio rose to 38.6% from 35.6%. On a consolidated basis, total sales by category were Physiological Measuring Equipment 53,636 million yen (up 14.4%), Patient Monitors 84,258 million yen (down 0.8%), Treatment Equipment 56,286 million yen (up 5.8%) and Other Medical Equipment 40,918 million yen (up 1.3%); Medical Devices were 115,996 million yen (up 2.4%) and Consumables and Services 119,103 million yen (up 6.2%).

Product category (millions of yen)	Domestic FY2025	Domestic YoY (%)	Overseas FY2025	Overseas YoY (%)	Total FY2025	Total YoY (%)
Physiological Measuring Equipment	36,824	1.6	16,812	58.2	53,636	14.4
Patient Monitors	45,927	– 0.6	38,331	– 1.1	84,258	– 0.8
Treatment Equipment	28,912	– 6.0	27,373	22.1	56,286	5.8
Other Medical Equipment	32,742	2.2	8,175	– 2.3	40,918	1.3
Total sales	144,406	– 0.6	90,693	13.1	235,099	4.3
(Reference) Medical Devices	58,664	– 2.4	57,332	7.8	115,996	2.4
(Reference) Consumables and Services	85,742	0.7	33,361	23.6	119,103	6.2

FY2026 Forecast

For FY2026, the company forecasts net sales of 232,500 million yen (down 1.1%), with domestic sales of 133,500 million yen (down 7.6%) and overseas sales of 99,000 million yen (up 9.2%; up 9% on a local currency basis). The company states that net sales would be up 8% on a comparable basis excluding the impact of the discontinuation of Abbott products and the consolidation of DOWELL; sales of Abbott products are expected to decline by 21.3 billion yen to 2.3 billion yen from 23.6 billion yen, while the hospital and clinic markets are expected to grow by 9.7 billion yen by focusing on ventilators and DHS products and AEDs by 0.7 billion yen as inventory adjustment at distributors was settled down. Gross profit is forecast at 129,000 million yen (gross margin 55.5%), SG&A expenses at 105,500 million yen (SG&A ratio 45.4%), operating income at 23,500 million yen (up 25.4%; operating margin 10.1%), ordinary income at 23,500 million yen (up 4.2%) and income attributable to owners of parent at 15,000 million yen (up 3.4%). The overseas sales ratio is projected at 42.6%, and the assumed exchange rates are 150 yen per U.S. dollar and 175 yen per euro. Gross margin is expected to improve supported by a favorable product mix, while SG&A expenses are expected to increase due to wage increases and higher depreciation related to investments in internal IT systems. The company incorporates negative factors worth 1.8 billion yen for sales and 1.2 billion yen for operating income caused by conflicts in the Middle East. Overseas sales by region are forecast at 56,300 million yen in North America (up 13.0%), 6,200 million yen in Latin America (up 10.4%), 13,800 million yen in Europe (up 1.1%) and 22,700 million yen in Asia & Other (up 5.0%). By product category, sales are forecast at 41,200 million yen for Physiological Measuring Equipment (down 23.2%), 92,300 million yen for Patient Monitors (up 9.5%), 54,900 million yen for Treatment Equipment (down 2.5%) and 44,100 million yen for Other Medical Equipment (up 7.8%). Estimated exchange rate fluctuations for the full fiscal year are 0.52 bn yen in sales and 0.18 bn yen in operating income per yen for the U.S. dollar, and 0.06 bn yen and 0.02 bn yen for the euro. Capital investment is planned at 6,000 million yen, depreciation at 6,000 million yen and R&D expenses at 7,700 million yen.

Item (millions of yen)	FY2026 Forecast	FY2025 Actual	YoY (%)
Net sales	232,500	235,099	– 1.1
— Domestic sales	133,500	144,406	– 7.6
— Overseas sales	99,000	90,693	9.2
Gross profit	129,000	121,726	6.0
(Gross margin)	55.5%	51.8%
SG&A expenses	105,500	102,981	2.4
(SG&A ratio)	45.4%	43.8%
Operating income	23,500	18,745	25.4
(Operating margin)	10.1%	8.0%
Ordinary income	23,500	22,544	4.2
Income attributable to owners of parent	15,000	14,513	3.4
Overseas sales ratio	42.6%	38.6%

Shareholder Returns

Under its capital policy, the company aims to increase dividends in a stable manner in line with growth in business performance and to consider share buybacks in a flexible manner, taking into account comprehensively its future business deployment, investment plans, retained earnings and stock price level, with a target consolidated total return ratio of 35% or more. The full-year dividend forecast is 32 yen for FY25 (consolidated dividend payout ratio 35.9%) and 33 yen for FY26 (consolidated dividend payout ratio 35.4%). Share buybacks in FY25 were 5.0 billion yen, bringing the consolidated total return ratio to 70%. The number of treasury stock is 10,980k shares including ESOP (6.4% as of end March 2026). For Phase II (FY2024–FY2026), the company plans shareholder returns of 28 billion yen or more and states it is considering additional shareholder returns depending on the progress of future investment plans; shareholder returns in FY2024–FY2025 amounted to 25.3 billion yen, with 6.0 billion yen planned in FY2026.

Item	FY25	FY26 (Forecast)
Full-year dividend per share	32 yen	33 yen
Consolidated dividend payout ratio	35.9%	35.4%
Share buybacks	¥5.0 bn	—
Consolidated total return ratio	70%	Target: 35% or more

Medium-Term Plan and Topics

Under its long-term vision BEACON 2030, the company targets an operating margin of 15% and an overseas sales ratio of 45% for FY2029, and the current Three-year Business Plan (Phase II: Invest for growth, April 2024 to March 2027) sets three indicators: a sales CAGR of 5% for FY2023–FY2026, an operating income margin of 15% in FY2026 and ROE of 12% in FY2026. In FY2025, the second year, sales growth was 4.3%, the operating margin was 8.0% and ROE was 8.1%. The company reports a 220 bps year-on-year improvement in operating margin in FY25 from the reform of the profit structure (a cumulative improvement of 300 bps versus the target of 5%pt by FY2026, with 450 bps expected in FY2026), and the cash conversion cycle remained at 215 days compared to 225 days in FY24 and a forecast of 190 days. Against the FY2026 targets of net sales of 256.0 billion yen, operating income of 38.5 billion yen (15%) and income attributable to owners of parent of 25.0 billion yen, the FY2026 forecast is 232.5 billion yen, 23.5 billion yen (10.1%) and 15.0 billion yen, respectively; the company attributes the net sales gap of 23.5 billion yen to domestic sales (Abbott products down 24.8 billion yen, locally purchased products down 2.9 billion yen and in-house products up 4.2 billion yen), with overseas sales flat, and the operating income gap of 15 billion yen to gross profit due to the shortfall in sales (down 7.1 billion yen), COGS including tariffs and higher raw material prices (up 4.6 billion yen), SG&A expenses including wage and price inflation (up 1.0 billion yen) and costs related to M&A (up 4.1 billion yen).

Among topics, the transfer of operations for Abbott products was completed approx. 65% as of March 31, 2026 and is planned to be approx. 90% complete as of September 30, 2026; the company consolidated DOWELL as a subsidiary in February 2026 and Ad-Tech as a wholly owned subsidiary. The Tsurugashima Production Center started operations in March 2026 (total investments approx. 11.0 billion yen), and PLM/MES systems started operation in September and November 2025. In North America, the company states it holds the No. 1 market share for mask-type ventilators at 40% or more in 2025 (company’s estimate), and DHS products accounted for 16% of Patient Monitors sales in FY2025. For the reform of the profit structure, measures in FY2026 include reviewing pricing policies such as raising selling prices in Japan and internationally, reviewing the product line-up, restraining the increase of headcount through improving productivity by utilizing generative AI (improved operational efficiency of 1,990k hours/year in FY25, with a target of over 2.5 mil hours/year in FY26), introducing a new CRM, and promoting Value Engineering at factories in Japan, the U.S. and China.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.