Briefing Material for 1st quarter ended Mar. 31, 2026 (with Script)

I am Suzuki, Corporate Vice President & Group CFO. Thank you for joining the conference call.

Without further ado, I would like to start with the briefing.

Surgical Business

Development, production and sales of bone grinding and cutting drills which can be used in areas of neurosurgery,

spine surgery and orthopedic surgery.

2

Tools

Ultrasonic cutter

Speed-increasing spindle

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Controller & Spindle

Development, production and sales of

spindles which can be used in high-precision processes in wide range of industrial areas such as automobile and

precision parts industries.

Industrial Business

Perforator (Disposable)

Bur (Disposable)

Surgical motor & Attachment

Console

Dental Business

Dental parts

Dental cabinet

Dental chair

Presenting results of DCI, acquired in

2023, as an independent segment. Development, production and sales of dental chairs and related equipment for

the North American market.

DCI Business

Business Segment and Product Lineup

Clinical micro motor

Oral hygiene system

Implant motor

Handpiece

Development, production and sales of

wide range of dental equipment, which cover such as restorative dentistry, periodontics, oral surgery, mobile

dental care, etc.

Performance Highlights

A

chieved double-digit sales growth across all segments; Dental, DCI, Surgical, and

Industrial. In particular, sales grew in Dental-Japan and Surgical businesses.

Consolidated net sales increased by 21% YoY, and by 15% even excluding forex impact.

*The Q1 financial results do not include the performance of the two acquired companies (Acra Cut and Intech). They are expected to be consolidated from Q2 onward.

A

lthough increased production at factories led to an improvement in the standalone

gross margin, the consolidated gross margin declined by 2 percentage points due to

the impact of unrealized profits and U.S. tariffs. In addition to profit growth driven by

higher revenues, the partial underspending of certain R&D plan resulted in consolidated EBITDA increasing by 23.6% YoY.

I

n addition to operating profit growth driven by business expansion, improvements in

foreign exchange gains and losses and the absence of the previous year's impact of

prior-period income taxes led to a significant increase in quarterly profit attributable to

owners of parent.

© 2026 NAKANISHI INC.

3

About the performance highlights, we delivered very strong results. All businesses and regions performed well, with broadly solid performance rather than reliance on any specific area.

When formulating our full-year forecast, our market assumption was that demand would gradually recover as the post-COVID pullback in demand came to an end. In the actual first quarter, demand was essentially flat, with little change compared to the same period last year.

I will now explain the key factors behind our strong performance against this market environment.

4

Consolidated P/L

FY2026Q1

FY2025Q1

YoY comparison

owners of parent

＊ EBITDA = Operating profit + Depreciation + Amortization

Forex impact: Net sales +1,031M of JPY (vs FY2025Q1 Actual), +1,050M of JPY (vs FY2026 Forecast)

© 2026 NAKANISHI INC.

There are two main points to highlight in the income statement, along with one supplementary point.

The first point is that the consolidated gross profit margin declined by 2 percentage points YoY.

While net sales increased by 21%, which would normally lead to an improvement in gross margin, cost of sales rose by approximately 500 million yen due to the impact of U.S. government tariff policies. As there was no such impact in the same period last year, this led to a decline in gross margin YoY.

The second point is that quarterly net income increased by approximately 3.5 billion yen. Breaking this down on a YoY basis: operating profit growth contributed +1.3 billion yen; an improvement in foreign exchange results (from a foreign exchange loss in the previous-year period to a gain in the current period) contributed +1.6 billion yen; and an improvement in extraordinary items (reflecting the absence of previous-year adjustments for prior-year corporate taxes, partially offset by an increase in income taxes due to higher pre-tax income) contributed +0.6 billion yen. Each of these factors drove the increase in net income.

As a supplementary point, I would like to touch on foreign exchange rates. The

U.S. dollar has not changed significantly compared to either our assumed rate or the rate in the previous-year period. In contrast, the euro has appreciated significantly against the yen. The first-quarter average rate was 184 yen, representing a significant deviation from our assumed rate of 170 yen, which provided an uplift to our results.

© 2026 NAKANISHI INC.

Change in Net Sales by Business Segment

+ 3,946

+21.3%

FY2025Q1 FY2026Q1

Change

Actual

A

Actual

B

of which:

forex impact

B/A-1

22,488

+353

Industrial

Dental 11,323 13,199 +805 +16.6%

+431

+1,285

Surgical

+37.1%

+23.4%

DCI

+28.3%

+1,875

18,542

Dental

+16.6%

FY2025Q1

Net sales

FY2026Q1

Net sales

Let me now turn to net sales by business segment.

As you can see, all businesses delivered strong double-digit growth in net sales. While foreign exchange provided some uplift, net sales still increased significantly even excluding this effect.

Sales growth in the Dental and Surgical businesses is sustainable, and we expect this strong momentum to continue for the time being. In contrast, for the DCI and Industrial businesses, we need to carefully monitor whether this momentum can be maintained or will moderate.

For the DCI business, top-line growth includes pre-purchase demand ahead of price increases. This surge coincided with organic growth driven by the expansion of our sales network, which we have been strengthening since last year. It is important to note that in the first quarter, a significant portion of the sales increase was attributable to higher shipment volumes driven by this temporary demand ahead of price hikes. We anticipate a pullback in demand from the end of the second quarter through the third quarter; however, this will be partially offset by the positive impact of higher unit prices following the price increases. The extent to which these factors offset each other will be a key point. We will work to mitigate the post-price-hike demand decline by strengthening sales to private clinics and expanding transactions with government institutions and universities.

In the Industrial business, sales growth was driven not only by NSK products but also by Jäger products. That said, Jäger is still in the process of turnaround, and uncertainty remains regarding the outlook for its product sales.