Financial Analyst Meeting

Fiscal Year Ended March 31, 2008 (136th Business Year) Financial Analyst Meeting May 27, 2008 Contents of Today s s Presentation Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 Future Business Environment and Medium-and Long-term Business Strategies Director/President Katsuya Ohta 1

Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 Future Business Environment and Medium-and Long-term Business Strategies 2 Summary of Business Performance (i) Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 Positive factors Negative factors P/L Sales of new products decreased due to the fact that no large-scale new products were introduced in this period and the effect of the Three-Year Rule (the company s s internal definition of a new product: a product that has been in the marketplace for more than three years is no longer considered to be a new product). <Sales of new products: 1,270 million yen or 9.7% of non-consolidated sales> Domestic sales decreased by 1.8% due to a decline in sales of artificial teeth and abrasives. Overseas sales increased by 2.1% thanks to steady sales in China as well as in the U.S., Europe and Asia offsetting the negative effects of foreign exchange fluctuations. (Overseas sales ratio: 27.1%) [Record high] Total sales decreased by 0.8% to 15,212 million yen. Operating profit declined by 0.8% to 1,468 million yen due to an increase in expenses related to active research and development activities, despite the ratio of cost to sales improving by 0.3% thanks to a decrease in retirement benefits expenses and cost reduction effects. Ordinary profit increased by 6.3% to 1,513 million yen due to an increase in non-operating operating income such as an increase in interest received. Current term net profit increased by 5.3% to 910 million yen due to extraordinary profit at overseas subsidiaries (refund of customs duty) offsetting an extraordinary loss (loss from revaluation of securities). [Record high] 3

Summary of Business Performance (ii) Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 Positive factors Negative factors B/S Cash and deposits decreased by 3,128 million yen due to the acquisition of Nail Labo Japan, Inc. (1,097 million yen including a capital increase) and the company s s own shares (2,402 million yen). The valuation difference of securities decreased by 1,609 million yen due to falling securities prices. Transferable deposit of 1,300 million yen was transferred to securities from cash and deposits. Net worth decreased by 3,051 million yen due to the acquisition of the company s s own shares and a decrease in the valuation difference of securities. C/F Cash flow from operating activities: Net cash flow from operating activities amounted to 1,264 million yen due to posting net income before income taxes and a decrease in trade accounts receivable and inventory. Cash flow from investing activities: Net cash obtained from investing activities amounted to 43 million yen due to the acquisition of Nail Labo Japan, Inc. (including the increase of capital), the acquisition of land for Tokyo Branch, disposal of securities and investment securities and the cancellation of time deposits. Cash flow from financing activities: Net cash used for financing activities amounted to 2.803 million yen due to the acquisition of the company s s own shares. 4 Summary of Business Performance (Comparison with Previous Period) Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 Sales decreased but ordinary and net profits increased (operating profit decreased) compared to the previous period. 2007 2008 Amount (% of sales) Amount (% of sales) Unit: Millions of yen, % Change from the previous period Amount (%) Sales 15,332 (100.0) 15,212 (100.0) -119 (-0.8) (Domestic sales) 11,294 (73.7) 11,090 (72.9) -204 (-1.8) (Overseas sales) 4,037 (26.3) 4,122 (27.1) 84 (2.1) Operating profit 1,480 (9.7) 1,468 (9.7) -12 (-0.8) Ordinary profit 1,424 (9.3) 1,513 (10.0) 89 (6.3) Net profit 865 (5.6) 910 (6.0) 45 (5.3) Net profit per share 54.49 yen 57.83 yen Return on equity 4.37% 4.93% 5

Sales by Product Category (Comparison with Previous Period) Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 2007 Results Unit: Millions of yen Figures in parentheses represent percentage changes, Unit: % 2008 Results Change from the previous period Domestic Overseas Artificial teeth 2,922 2,950 28 ( 1.0) -102 130 Abrasives 3,839 3,705-133 ( -3.5) -71-62 Metal products 469 475 6 ( 1.4) 6 0 Chemical products 2,864 2,923 58 ( 2.1) -18 77 Cements and others 1,698 1,661-36 ( -2.2) -33-3 Equipment and others 3,538 3,495-42 ( -1.2) 14-57 Total 15,332 15,212-119 ( -0.8) -204 84 Overseas sales decreased by 239 million yen due to the effect of foreign currency fluctuations. (US dollar, euro, pound sterling, renminbi) i) 6 Summary of Business Performance (Comparison with Forecast) Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 Sales and profits decreased compared with the forecast. 2008 Forecast Amount (% of sales) 2008 Results Amount (% of sales) Unit: Millions of yen, % Change from the forecast Amount (%) Sales 15,445 (100.0) 15,212 (100.0) -233 (-1.5) (Domestic sales) 11,409 (73.9) 11,090 (72.9) -319 (-2.8) (Overseas sales) 4,036 (26.1) 4,122 (27.1) 86 (2.1) Operating profit 1,774 (11.5) 1,468 (9.7) -305 (-17.2) Ordinary profit 1,708 (11.1) 1,513 (10.0) -195 (-11.4) Net profit 1,062 (6.9) 910 (6.0) -151 (-14.3) Net profit per share 66.92 yen 57.83 yen Return on equity 5.24% 4.93% The forecast for 2008 in the above table was initially announced on May 15, 2007. On March 19, 2008, a revised performance forecast was announced. 7

Sales by Product Category (Comparison with Forecast) Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 Fiscal March 2008 Forecast Unit: Millions of yen Figures in parentheses represent percentage changes, Unit: % 2008 Results Change from the forecast Domestic Overseas Artificial teeth 2,925 2,950 25 ( 0.9) -48 73 Abrasives 3,866 3,705-160 ( -4.1) -77-83 Metal products 467 475 7 ( 1.7) 6 1 Chemical products 3,006 2,923-83 ( -2.8) -133 50 Cements and others 1,687 1,661-25 ( -1.5) -93 68 Equipment and others 3,492 3,495 2 ( 0.1) 27-24 Total 15,445 15,212-233 ( -1.5) -319 86 The forecast for 2008 in the above table was initially announced on May 15, 2007. On March 19, 2008, a revised performance forecast was announced. Overseas sales increased by 14 million yen due to the effect of foreign currency fluctuations. (US dollar, euro, pound sterling, renminbi) 8 Domestic Sales Positive factors Negative factors Existing products The company focused on the expansion of recently introduced new products such as the glass ionomer resin cement Hy-Bond Resiglass and the composite resin filler for esthetic dental treatment Beautifil II. Sales of artificial teeth and abrasives, the company s s mainstay products, decreased by 5.3% and 3.2%, respectively. Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 11,294 1,408 12.5 Unit: Millions of yen 11,090 1,158 10.4 Sales of new products decreased. Sales of new products decreased due to the effect of the Three-Year Rule (the hard resin for crowns CERAMAGE and other products that have been in the market place for more than three years are no longer considered to be new products). New products introduced in the period 2007 2008 Self-curing acrylic resin Provinice Fast Digital camera for dental use Eye Special C-I C 9,885 Existing products Ratio of new products (%) (relative to domestic sales) 9,931 New products New products in the graph have been introduced in the last three years. 9

Overseas Sales Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 North America and Latin America Sales of abrasives and artificial teeth (porcelain powder), the company s s mainstay products, were steady. Sales increased by 6.6% on a local currency basis. Europe Sales were generally steady except for equipment. Sales increased by 4.8% on a local currency basis. Asia and Oceania Sales in China grew favorably and sales in Vietnam and Cambodia continued to expand. Sales increased by 14.4% on a local currency basis. Sales in China increased from 316 million yen to 394 million yen. Foreign exchange rates: The U.S. dollar: 100.19 yen (118.05 yen in the previous period) The Euro: 158.19 yen (157.33 yen in the previous period) Overseas sales ratio Positive factors 27.1% (26.3% in the previous period) (28.2% after adjustment for foreign currency translation) Unit: Millions of yen, Figures in parentheses represent component t ratio (%) Negative factors 4,037 4,122 1,105 1,271 (27.4) 1,626 1,661 (40.3) 4,362 1,265 1,705 1,305 1,189 1,391 (32.3) 2007 (30.8) (40.3 0.3) (28.9) 2008 (29.0) (39.1) (31.9) 2008 after adjustment for foreign currency translation Asia and Oceania Europe North America and Latin America 10 Segment Information by Region Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 Unit: Millions of yen, Figures in parentheses represent the percentage to sales and percentage changes, Unit: % 2007 2008 Changes from the previous period Amount (% to sales) Amount (% to sales) Amount (%) Japan Americas Europe Asia Overseas total Total before consolidation adjustment Consolidation Sales 13,388 13,484 95 (0.7) Operating profit 1,308 (9.8) 1,378 (10.2) 69 (5.3) Sales 1,280 1,167-113 (-8.9) Operating profit 36 (2.8) 49 (4.2) 13 (36.1) Sales 1,824 1,823 0 (-0.0) Operating profit 62 (3.4) 91 (5.0) 29 (46.7) Sales 421 544 123 (29.4) Operating profit 3 (0.8) 67 (12.4) 64 (1931.5) Sales 3,526 3,535 9 (0.3) Operating profit 101 (2.9) 207 (5.9) 106 (104.6) Sales 16,914 17,020 105 (0.6) Operating profit 1,409 (8.3) 1,585 (9.3) 176 (12.5) Sales 15,332 15,212-119 (-0.8) Operating profit 1,480 (9.7) 1,468 (9.7) -12 (-0.8) 11

Contributors to change in Operating Profit Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 Operating profit for 2007 (i) Increase in sales (in quantity) (ii) Decrease in the ratio of cost to sales (iii) Decrease in personnel costs (sales and general administrative expenses) (iv) Increase in research and development expenditures (v) Increase in depreciation and amortization expenses (vi) Increases in other expenses (vii) Effects of foreign currency translation adjustments Operating profit for 2008-30 -32-145 -45 44 76 121 1,480 Revision of accounting system 1,468 Unit: Millions of yen Decrease in retirement benefits expenses Increase in patent application expenses Expenses related to patent litigation overseas Increase in expenses for temporary employees Increase in expenses for internal control system - Operating profit of overseas subsidiaries: (-)( ) 8 million yen - Individual imports: (-)( ) 37 million yen Figures in items from (i) to (vi) are calculated excluding the effect e of foreign currency fluctuations. 12 Financial Condition: Major Accounts in Balance Sheet Fiscal March 2007 2008 Changes Cash and deposits 6,653 3,525-3,128 Notes and bills receivable, Trade accounts receivable 2,738 2,758 20 Inventory 3,007 2,966-41 Securities, Investment securities 7,066 5,162-1,903 Others 5,723 6,940 1,216 Assets 25,189 21,353-3,835 Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 Major contributors to changes, Special notes Unit: Millions of yen Acquisition of Nail Labo Japan, Inc. and a capital increase Acquisition of the company s own shares Decrease in the valuation difference of securities Disposal of investment securities (bonds) Long-term and short-term borrowings 1,025 1,020-5 Reserve for retirement benefits and directors retirement benefits 557 604 46 Others 3,590 2,765-824 Liabilities 5,173 4,389-783 Decrease in the valuation difference of securities Disposal of investment securities (bonds) Net worth 20,015 16,963-3,051 Total liabilities and net worth 25,189 21,353-3,835 Increase in the holding of company s own shares: 2,402 million yen Decrease in the valuation difference of securities: 978 million yen Capital adequacy ratio 79.5% 79.4% Net worth per share 1,231 yen 1,188 yen 13

Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 Future Business Environment and Medium-and Long-term Business Strategies 14 Summary of Business Performance for the Next Fiscal Year (i) Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 Positive factors Negative factors P/L Sales of new products are expected to be limited in the next year r because of the lack of large-scale new products in the pipeline. However, the company will make its utmost efforts to ensure that recently introduced new products in the areas of chemical products, cements and equipment penetrate the market fully. <Sales of new products: 1,232 million yen, or 9.2% of non-consolidated sales> In the field of chemical products, the company will hold academic c events and conduct sales promotion for the GIOMER product line, which the t company developed by utilizing its original PRG technology, domestically and internationally. The company expects to see sales increase by 1,456 million yen as a result of its full-scale entry into the nail care business. The company expects to see favorable sales growth in each overseas market: 4.5% growth on a local currency basis. The company estimates that the Japanese yen will depreciate against the U.S. dollar in the next fiscal year. <Effects on overseas sales: 156 million yen> Sales are expected to increase by 12.9% to 17,177 million yen. Operating profit is expected to decrease by 6.2% to 1,378 million n yen due to an increase in expenses for strategic investments including amortization of goodwill related to the acquisition of Nail Labo Japan, Inc., active research and development, sales promotion and the introduction of a company-wide integrated main system, despite some favorable effects of an increase in domestic sales. Ordinary profit is expected to decrease by 13.5% to 1,309 million n yen and net profit is expected to decline by 7.8% to 839 million yen due to a decrease in both operating profit and interest received. 15

Summary of Business Performance for the Next Fiscal Year (ii) Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 Positive factors Negative factors B/S C/F The company will relocate its sales offices in Sendai and Osaka in order to upgrade the domestic sales network and to improve and enhance customer services. Capital expenditures: 552 million yen The company will conduct an intensive study on the outsourcing of the distribution of medical and pharmaceutical products (implemented in 2008), the integration of the logistics division in Osaka sales office with that of the headquarters and the relocation of the logistics division in Tokyo branch (creation of East Japan Logistics Center) in order to overhaul its logistics system. Capital expenditures: 662 million yen Integrated main system (Non-consolidated basis) The company will promote the completion of a company-wide integrated main system by April 2009. Capital expenditures: 398 million yen 16 Comparison of Major Statistics Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 2009: Increase in sales but still end up with a decline in profit Unit: Millions of yen, % 2008 Amount (% of sales) 2009 Forecast Amount (% of sales) Changes Amount (%) Sales 15,212 (100.0) 17,177 (100.0) 1,965 (12.9) (Domestic sales) 11,090 (72.9) 12,714 (74.0) 1,624 (14.7) (Overseas sales) 4,122 (27.1) 4,463 (26.0) 340 (8.3) Operating profit 1,468 (9.7) 1,378 (8.0) -90 (-6.2) Ordinary profit 1,513 (10.0) 1,309 (7.6) -204 (-13.5) Net profit 910 (6.0) 839 (4.9) -71 (-7.8) Net profit per share 57.83 円 58.83 円 Return on equity 4.93% 4.82% The consolidation of Nail Labo Japan, Inc. is expected to boost sales (domestic sales) by 1,456 million yen in 2009. 17

Sales by Product Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 Unit: Millions of yen Figures in parentheses represent component ratio and percentage changes, Unit: % 2008 Results 2009 Forecast Changes from Fiscal March 2008 Results Domestic *1. The figure for Equipment and others in 2008 includes the sales of the Nail care business (256 million yen). *2. The figure for Abrasives in 2008 includes the sales s of others (industrial use abrasives) (93 million yen). Overseas Artificial teeth 2,950 3,018 68 ( 2.3) -12 80 Abrasives 3,705 3,701-4 ( -0.1) -119 114 Metal products 475 472-3 ( -0.6) -3 0 Chemical products 2,923 3,026 102 ( 3.5) 67 35 Cements and others 1,661 1,753 91 ( 5.5) 13 77 Equipment and others 3,495 3,350-144 ( -4.1) -112-31 Dental business total 15,212 15,322 110 ( 0.7) -166 276 Nail care business *1 1,760 1,760 ( ) 1,696 64 Others *2 94 94 ( ) 94 0 Total 15,212 17,177 1,965 ( 12.9) 1,624 340 The consolidation of Nail Labo Japan, Inc. is expected to boost sales (domestic sales) by 1,456 million yen in 2009. Overseas sales are expected to increase by 156 million yen due to foreign currency fluctuations. (US dollar, euro, sterling pound, renminbi) 18 Domestic Sales Summary Sales of new products are expected to be limited in the next year because of the lack of large-scale new products in the pipeline. Sales of new products are expected to account for 8.6% of total sales. The company will endeavor to ensure that recently introduced new products full penetrate the market. The company expects to see sales increase by 1,456 million yen as a result of its full-scale entry into the nail care business. Major products recently introduced: Filling and restorative materials Beautifill II, FL-BOND II Cement systems Hy-Bond Resiglass, ResiCem Micro-implant implant system for orthodontic use Abso Anchor Acrylic resin for various dental uses Provinice Fast Digital camera for dental use Eye Special C-I C Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 Unit: Millions of yen 11,090 1,158 1,094 10.4 9,931 12,714 1,696 8.6 9,923 2008 2009 Forecast Existing products New products Nail care products Ratio of new products (%) (relative to domestic sales) * New products in the graph have been introduced in the last three years. 19

Oversea Sales Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 Summary The company expects to have favorable sales growth in each market. Growth rate on a local currency basis North America and Latin America: 3.6% Europe: 1.8% Asia and Oceania: 8.7% Total overseas sales: 4.5% Foreign exchange rates U.S. dollar: 115.00 yen (100.19 yen in the previous period) (Effect: 172 million yen) Euro: 150.00 yen (158.19 yen in the previous period) (Effect: (-)( ) 30 million yen) Overseas sales ratio 26.0% (27.1% in the previous period) (25.3% after foreign currency translation adjustments) Unit: Millions of yen, Figures in parentheses represent component t ratio (%) 4,122 1,271 (30.8) 1,661 (40.3 0.3) 1,189 (28.9) 2008 4,463 4,306 1,395 (31.3) 1,662 (37.2) 1,381 1,692 1,404 1,232 (31.5) 2009 Forecast * 2009 forecast after adjustment of foreign currency translation is calculated based on the same foreign exchange rates used for the 2008 results. (32.1) (39.3) (28.6) 2009 Forecast after adjustment of foreign currency translation Asia and Oceania Europe North America and Latin America 20 Contributors to Change in Operating Profit Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 Operating profit for 2008 (i) Increase in sales (in quantity) (ii) Decrease in the ratio of cost to sales 125 255 1,468 Unit: Millions of yen There will be a positive effect from the absence of unrealized gain and loss that affected consolidated earnings in the previous period (57 million yen). (iii) Increase in personnel costs (sales and general administrative expenses) (iv) Increase in advertising expenses and research and development expenditures (v) Increases in other expenses (vi) Increase in the number of subsidiaries -102-152 -132-78 Expenses for the integrated main system, implant business, relocation of sales offices in Osaka and Sendai and outsourcing of the distribution of medical and pharmaceutical products Increase in auditing expenses Depreciation of goodwill: 89 million yen (vii) Effects of exchange rate fluctuations Operating profit for 2009-5 1,378 - Operating profit of overseas subsidiaries: 3 million yen - Individual imports: (-)9( million yen Figures in items from (i) to (vi) are calculated excluding the effect e of foreign currency fluctuations. Figures in items from (i) to (v) are calculated excluding the effect fect of consolidation of Nail Labo Japan, Inc. 21

Financial Condition: Major Accounts in Balance Sheet Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 Fiscal March 2008 2009 Changes Unit: Millions of yen Major contributors to changes, Special notes Cash and deposits 3,525 4,316 791 Notes and bills receivable, Trade a 2,758 2,362-396 Acceleration of cash flow-back Inventory 2,966 2,901-65 Securities, Investment securities 5,162 4,193-969 Appropriation for capital investment fund Others 6,940 8,743 1803 Capital investment: 1,984 million yen Assets 21,353 22,517 1164 Long-term and short-term borrowings 1,020 1,020 0 Reserve for retirement benefits and directors retirement benefits 604 661 57 Others 2,765 2,975 209 Liabilities 4,389 4,657 267 Net worth 16,963 17,859 896 Total liabilities and net worth 21,353 22,517 1164 Capital adequacy ratio 79.4% 79.3% Net worth per share 1,188 yen 1,251 yen 22 Sales Trend[s] for New Products Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 Ratio of sales of new products to total sales (in- house developed products or goods purchased) (Non-consolidated basis) 13.1 Unit: % 11.9 8.5 8.5 8.1 7.1 7.9 6.6 9.1 5.4 11.3 6.5 8.1 9.8 7.5 9.9 9.3 11.6 10.0 9.7 7.9 9.2 8.4 4.8 4.8 1.4 0.4 1.3 3.7 3.2 2.3 0.5 1.5 1.9 1.8 0.9 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Products developed in-house Goods purchased New products total Major goods purchased: Johnson & Johnson products, EMS ultrasonic c scaler and root canal treatment equipment (reamer and file) 23

Trend of Gross Profit Margin Rate 56.4 55.1 55.8 53.9 52.6 52.0 In April 2003, copayment rate applied to persons paying medical insurance premiums raised to 30%. 51.7 Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 52.7 53.4 Unit: % 54.8 55.1 55.1 52.2 52.0 51.7 In September 1997, copayment rate applied to persons paying medical insurance premiums raised to 20%. 1999 1998 2000 48.5 47.4 46.3 The gross profit margin rate has been rising since 2005 thanks to the introduction of products developed in-house and cost- reduction measures. 2001 2002 2003 45.7 2004 46.2 2005 47.0 2006 47.6 47.7 47.9 2007 Consolidated Non-consolidated 2008 2009 Forecast 24 Trend of Overseas Sales and Overseas Sales Ratio 19.1 2,795 Overseas sales (Millions of yen) Overseas sales ratio (%) 18.0 17.5 2,490 2,436 19.1 2,704 20.7 2,901 21.4 21.4 3,069 3,021 22.3 22.5 3,173 Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 3,299 26.3 The contribution to profits has become greater with the expansion n of sales. 4,037 27.1 4,122 26.0 4,463 1998 1999 2000 2001 2002 2003 Fiscal April 2004 2005 2006 2007 2008 2009 Forecast 25

Operating Profit by Geographic Segment Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 Amount of operating profit 74 1,729 9 1,540 49 1,854 153 68 50 70 1,099 973 1,093 Unit: Millions of yen 1,041 1,124-21 207 34 101 196 1,299 1,308 1,378 1,178 Operating profit ratio 12.9 3.5 12.1 0.5 14.4 2.8 7.4 8.6 7.7 8.4 8.1 8.7 3.0 Japan Unit: % 9.9 9.8 10.2 7.7 5.9 5.1 2.2 3.1 2.9 1.3 Overseas 1998 2000 2002 2004 2006 (Note) Figures are before consolidation adjustment. 2008 1998 1999 2000 2001 2002 2003 2004-0.9 2005 2006 2007 2008 2009 Forecast 26 Summary of Consolidated Business Performance for Fiscal Year Ended March 31, 2008 Forecast of Consolidated Business Performance for Fiscal Year Ending March 31, 2009 Future Business Environment and Medium-and Long-term Business Strategies 27

Perception of Business Environment Business Environment, Medium-term and Long-term Business Strategies Demand Aging population Changes in dental disease The aging of society has not led to increased demand. Growing interest in aesthetic dentistry, preventive dental care and oral hygiene and expansion of the market. Policies Markets Measures to curb medical expenditures Tighter safety regulations Industry-wide structure marked by oversupply Globalization of markets Continuation and enhancement of measures to curb medical expenditures Tighter regulations to improve the quality of medical services Difference in levels of quality assurance becoming increasingly visible Oversupply of manufacturers, distributors, dental clinics and dental technicians has led to intense competition. Widening gap between successful dental clinics and those that are struggling Increased competition on a global scale Direct entry into the Japanese market by overseas manufacturers 28 Response to Business Environment Business Environment, Medium-term and Long-term Business Strategies Aging population Development of products that meet the needs of elderly persons Changes in dental disease Development and creation of demand in the field of aesthetic dentistry, preventive dental care and oral hygiene Measures to curb medical expenditures Entry into a market not covered by health insurance Enhancement of fairness and individuality Creation of products and services that help rein in medical expenditures Market structure characterized by oversupply Measures to expand demand for regular checkups and maintenance of dental health Development of products that aim to improve the efficiency of treatment and raise customer satisfaction More stringent safety regulations Global-scale measures to absorb safety costs A certain level of market size Globalization High growth is expected in the field of dental equipment Development of products geared to both the domestic market and overseas markets. 29

Expectations regarding Dental Care Healthy and long life The people Improvement in QOL The 国民 people Improvement in QOL Significance of dental care To maintain oral functions and ensure basic human activities such as eating and speaking Preventive medical care to keep the entire body in a healthy condition and reduce the risk of developing disease Medicine is a life-supporting service. Dentistry is a daily-life life-supportive service that helps people to live their everyday lives comfortably. There is an expectation that long-term measures will be implemented to lower the nation s s medical expenditures to reasonable levels 30 For Improvement of People s s Health and Development of the Dental Industry Business Environment, Medium-term and Long-term Business Strategies The people (patients and customers) Promotion of health Communicate The importance of dental care What dental care can do Expectations for dental care Health of teeth and the entire body Prevention of systemic diseases and improvement in QOL Measures to meet these expectations Dispelling negative images such as scary or painful, painful, conventionally associated with dental treatment, and encouraging people to receive dental care more often Enhancement of trust in dental care Continuous innovation of dental care techniques The government (The Ministry of Health, Labour and Welfare) Making proposals for policy- making The dental community (clinicians, academic institutions and industry) 31

Overall Prospects Growth in the elderly population Decrease in tooth loss (increase in the number of remaining teeth) due to progress in preventive dental care and oral hygiene Business Environment, Medium-term and Long-term Business Strategies Promisin g market with high growth potential Increase in demand for regular care and maintenance With oral health steadily attracting increasing public attention, demand is expected to rise in the fields of aesthetic dentistry, preventive dental care and oral hygiene (fields not covered by health insurance). Increase in demand for dental care as a means of preventing systemic diseases Overall prospects: Increase in opportunities to receive dental care; c improvement of the quality of dental care; expansion of the entire dental market through enhancement of the value of dental care 32 Tasks to Be Addressed by Dentistry Business Environment, Medium-term and Long-term Business Strategies Development of advanced, high functional products Responsibilities Coping with people s s interests in health and aesthetic dentistry Exploration of regenerative medicine Acceleration of integration and alliance to enhance competitiveness Improvement of efficiency in logistics and enhancement of the quality guarantee system Upgrading diagnosis, prevention and maintenance in treatments Making proposals to reform the legal system, on which everything is based and improvement of the system Role as a manufacturer Preparation of environment for clinical trials Source: Fiscal 2007 s s Dental Equipment Industry Vision Cooperation and alliance 33

Business Environment, Medium-term and Long-term Business Strategies Matters to Be Addressed by the Company Business Environment, Medium Long Functions that need strengthening Quality competitiveness Marketing power Price competitiveness Company-wide goals Creating new markets and expanding market share by developing new products and technologies Expanding overseas business Four numerical targets Overseas sales ratio: 30% 20% cost reduction Increase of market share in New product sales ratio: 15% the domestic market Restoring consolidated operating profit margin to 10% Aiming to achieve a 15% consolidated operating profit margin over r the long term 34 Specific Efforts Research and Development Business Environment, Medium-term and Long-term Business Strategies 1,600 Expenditures on research for industrialization (Millions of yen) Research and development expenditures (Millions of yen) Ratio of R &D expenses to sales (%) Quality competitiveness 1,400 1,200 6.5 6.4 6.8 6.6 7.5 7.6 7.1 7.1 7.1 7.0 6.6 6.9 6.7 1,000 Marketing power Price competitiveness 800 600 400 200 Active investment in R & D is continuing. 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Plan Provide value to customers Create demand Speed up and strengthen network Maintain and enhance profitability and financial resources Research and development is the source of competitiveness for manufacturers. 35

Specific Efforts Production Business Environment, Medium-term and Long-term Business Strategies Succession and continuous improvement of production technology Pass on technologies to the next generation and work out labor-saving measures in order to cope with an increasing number of employees reaching retirement age. Enhancement of efficiency in production and logistics and improvement of customer service Enhance efficiency in production and logistics through the introduction of new production systems Establish a system to ensure traceability in compliance with the Revised Pharmaceutical Affairs Law Cost reduction Promote a cost-reduction project in each workplace Effect of cost-rate reduction initiatives (actual reduction achieved in 2003 through 2008) In-house production cost rate lowered by 7.1% or 539 million yen Strengthening quality competitiveness Strengthening price competitiveness Cost reduction Cutting the cost of in-house production by 20% 36 Specific Efforts Domestic Business Business Environment, Medium-term and Long-term Business Strategies Expansion of market share in existing product categories Artificial teeth Abrasives Filling and restorative dental materials Hard resin for crowns Luting and bonding materials Hold academic events and conduct sales promotion for the GIOMER product line, which the company developed by utilizing its original PRG technology, domestically and internationally Market creation in new fields Aesthetic dentistry (example) Tooth whitening, orthodontic dentistry Raise awareness of customer orientation Enhance marketing power Preventive dentistry, oral hygiene (example) PMTC Regenerative medicine (example) Commercialization of bone repairing ing materials Periodontal disease-related fields (example) Diagnostic kit for periodontal disease Commitment to implant business Sales related to PMTC (materials and equipment): 437 million yen (521 million yen) Sales related to tooth whitening: 179 million yen (195 million yen) y * PMTC (Professional Mechanical Tooth Cleaning) Figures represent actual sales in 2008. Figures in the parenthesis represent sales in the previous period. Implement flexible and efficient sales tactics 37

Specific Efforts Overseas Business Business Environment, Medium-term and Long-term Business Strategies U.S.A. Develop a new market for exports Brazil and Mexico Enhance efforts to work with dental equipment evaluation organizations. Enhance marketing functions Europe Asia Enter the artificial teeth (resin teeth) market Develop a new market in Eastern Europe Efforts to expand market share in China Production: Commence export of artificial teeth and abrasives Increase the number of production items Sales: Increase the number of items for sale Conduct strategic activities with the aim of rolling out new products Commence efforts to open up a market in India and Vietnam Hold academic events and conduct sales promotion for the GIOMER product line, which the company developed by utilizing its original PRG technology, domestically and internationally [Key products] - Porcelain powder - Hard resin for crowns - Filling and restorative dental materials 38 Medium-Term erm Plan Business Environment, Medium-term and Long-term Business Strategies Management has suspended the implementation of its medium-term plan announced last year for the following reasons and will formulate the next three-year plan (from FY2009 to FY2011) during 2008 (including a change from the rolling method to the fixed-term method). Management finds it necessary to reexamine its capital policy, such s as the acquisition of the company s s own shares and increased capital requirements. Due to the company s s full-scale entry into the nail care business, management finds it necessary to restructure its business strategies including conducting cting a review of its targeted management index and determining its management policy regarding the nail care business, which includes collaboration with the dental business. [For your reference only: The medium-term plan (from FY2007 to FY2009) announced last year] Record Record-high Unit: Millions of yen March 2007 Results March 2008 March 2009 March 2010 Sales 15,332 15,445 15,753 16,147 Operating profit 1,480 1,774 2,049 2,288 Ordinary profit 1,424 1,708 1,984 2,222 Net profit 865 1,062 1,262 1,425 39

Dividend Policy 40 yen 35 yen 30 yen 25 yen 20 yen 72.6 40.6 42.4 38.8 53.0 37.1 41.1 36.5 31.7 34.4 Target dividend payout ratio: More than 30% Average consolidated dividend payout ratio since listing: 34.6% (Weighted average from 1990 to March 2008) Commemorative dividend of 5 yen [per share] for the listing on the Osaka Securities Exchange 62.3 53.5 49.9 28.6 30.4 36.7 25.5 28.0 37.0 31.9 26.4 23.5 26.7 22.8 72.9 35.5 64.7 Including a commemorative dividend of 5 yen [per share] for the listing on the Tokyo Stock Exchange Business Environment, Medium-term and Long-term Business Strategies 96.3 31.9 46.4 67.4 45.5 37.6 36.4 66.8 45.9 59.7 53.7 34.6 30.6 15 yen 10 yen 5 yen Commemorative dividend Ordinary dividend Consolidated dividend payout ratio Non-consolidated dividend payout ratio 0 yen 10 yen 10 yen 10 yen 10 yen 12 yen 12 yen 12 yen 12 yen 15 yen 18 yen 18 yen 18 yen 18 yen 18 yen 18 yen 18 yen 18 yen 18 yen 18 yen 18 yen Fiscal Mar. 1990 Fiscal Mar. 1991 Fiscal Mar. 1992 Fiscal Mar. 1993 Fiscal Mar. 1994 Fiscal Mar. 1995 Fiscal Mar. 1996 Fiscal Mar. 1997 Fiscal Mar. 1998 Fiscal Mar. 1999 Fiscal Mar. 2000 Fiscal Mar. 2001 Fiscal Mar. 2002 Fiscal Mar. 2003 Fiscal Mar. 2004 Fiscal Mar. 2005 Fiscal Mar. 2006 Fiscal Mar. 2007 Fiscal Mar. 2008 Fiscal Mar. 2009 Forecast 40 Growth Cycle Business Environment, Medium-term and Long-term Business Strategies Market share increase in the domestic market Expansion of overseas business Increase in the sales of new products Cost reduction and improvement in price competitiveness Increase in R&D investment Improvement in profitability Instead of becoming a giant company that provides a wide range of o f products ( mega firm ), SHOFU Inc. will strive to evolve into a company oriented toward new product development ( specialty( firm ) that gains international recognition in the field in which it excels. 41

Forecasts in this document are based on information and data available at the time of release as well as on assumptions concerning uncertain factors that might affect the company s s future business performance. Depending on various factors, actual business performance could differ substantially from the forecasts contained in this document. SHOFU INC. 11 Kamitakamatsu-cho, Fukuine, Higashiyama-ku, Kyoto 605-0983, 0983, Japan Phone: +81-75 75-561-11121112 Fax: +81-75 75-561-12271227 URL: http://www.shofu.co.jp E-mail: ir@shofu.co.jp Contact: Corporate Planning Department 42

The pages below are provided only for your reference. The information on these pages will not be covered in the financial analysis meeting. SHOFU and Its Operations (Summary of the Company Profile and Its Businesses) 44 Summary of the Company Profile Summary of the Company Profile and its Businesses Company name: SHOFU INC. Representative: Director/President Katsuya Ohta Address: 11 Kamitakamatsu-cho, Fukuine, Higashiyama-ku, Kyoto 605-0983, 0983, Japan Date of establishment: May 15, 1922 Capital: 4,474,646,614 yen Listing markets: Second Section of Tokyo Stock Exchange (Date of listing: February 15, 2007) Second Section of Osaka Securities Exchange (Date of listing: November 9, 1989) Number of employees: 420 (Entire group: 762 including 191 in overseas subsidiaries) Business: Manufacture and sale of dental materials and equipment Main customers: Dental institutions (via sales agencies) Number of group companies: 12 (Four in Japan, eight overseas) 45

Main Products Summary of the Company Profile and its Businesses The company manufactures and markets a wide range of dental materials and equipment. Artificial teeth Chemical products Porcelain teeth, porcelain powder, resin teeth Synthetic resins Impression materials Waxes Abrasives Abrasives Diamond abrasive Carborundum abrasive Silicon polisher Other carving and polishing materials Industrial grinding and polishing materials Metal products Metal products Alloys for casting, silver alloys Other metals Cements Dental cements Dental stones and investments Equipment and appliances Dental equipment Products for oral care and infection prevention Orthodontic materials Health and beauty equipment Other equipment and appliances The company s s products are designed for use in dental care and treatment. Please refer to Product Profiles attached to this document. 46 Corporate History Summary of the Company Profile and its Businesses 1922: Shofu Dental Manufacturing Co., Ltd. founded and commenced the manufacture m and sale of Japan s s first artificial teeth. 1963: Shofu shares listed on the over-the the-counter market. 1971 1978: Established sales subsidiaries in the U.S. and West Germany. Started overseas production (in Taiwan). Established Shiga Shofu Inc. as a manufacturing facility for resin teeth. 1983 Changed the company name to SHOFU Inc. Commenced management reforms. rms. 1989: SHOFU s s shares listed on the Second Section of the Osaka Securities Exchange (in November). 1990 1997: Purchased a British research & development and manufacturing company. Founded a sales subsidiary in the U.K. Obtained the UK GMP (Good Manufacturing Practice) Certificate. Acquired a CE marking certificate. 1996: Founded Promech Inc. Established Liaison Office in Shanghai, China. 1997: Established the industry s s largest research facility as a part of a project to commemorate SHOFU s s 75th anniversary. 2002-2003: Celebrated the company s s 80th anniversary (in May 2002). Established Liaison Office in Beijing, China. Obtained ISO 14001 (Environmental Management System) certification (both for the headquarters and all group companies). 2004: Established Shanghai Shofu Dental Materials Co., Ltd., a production facility in China. 2005: Acquired full ownership of Shoken Inc. by exchange of shares (in February). Established Shofu Dental Supplies (Shanghai) Co., Ltd., a sales subsidiary in China (in August). 2006: Training Center designed to promote customers service completed (in August). 2007: SHOFU s s shares listed on the Second Section of the Tokyo Stock Exchange e (in February). 2008: Acquired and turned Nail Labo Japan, Inc. into a subsidiary. Acquired 1.6 million of the company s s own shares in accordance with the purchase of the company s s own shares scheme in the J-NET J market of the Osaka Securities Exchange. 47

Corporate History Sales Trend Summary of the Company Profile and its Businesses 160 140 120 100 80 60 40 20 0 (Unit: 100 million yen) Fiscal 1959 1970s Expanded operation overseas (the U.S., West Germany and 1960s Taiwan) Era of high growth due to the prevalence of the universal-coverage health insurance system Fiscal 1961 Fiscal 1963 Fiscal 1965 Fiscal 1967 Fiscal 1969 Fiscal 1971 1980s - The government undertook measures to reduce medical expenditures, which resulted in low rates of growth in the medical industry. - Implementation of 10% medical expense copayment system for policyholders (in 1984) Fiscal 1973 Fiscal 1975 Fiscal 1977 Fiscal 1979 Management reforms (in 1983) Became the first company in the industry to list its shares on the stock exchange (in 1989). Fiscal 1981 Fiscal 1983 Fiscal 1985 Fiscal 1987 Fiscal 1989 Fiscal 1991 Fiscal 1993 Copayment imposed on health insurance policy holders increased. - In 1997: from 10% to 20% - In 2003: from 20% to 30% Fiscal 1995 Fiscal 1997 Fiscal 1999 Enforcement of Revised Pharmaceutical Affairs Law (in 2005). Listed on the Second Section of the Tokyo Stock Exchange (in 2007). Fiscal 2001 Fiscal 2003 Fiscal 2005 Figures shown in the graph are non-consolidated sales. Fiscal 2007 48 Group Profile Summary of the Company Profile and its Businesses SHOFU Dental GmbH Russia (110,000) Shiga Shofu Inc. Shoken Inc. Europe (278,000) Other Asian countries (74,000) China (68,000) Promech Inc. Nail Labo Japan, Inc. North America (166,000) including U.S.A. (150,000) U.S.Nail Labo India (26,000) Advanced Healthcare Ltd. SHOFU Dental Products Ltd. SHOFU Dental Corporation Nail Labo Inc. Shanghai Shofu Dental Materials Co., Ltd. Shofu Dental Supplies (Shanghai) Co., Ltd. Africa (30,000) Figures in parentheses indicate the number of dentists (surveyed by the Japan Dental Association). Oceania (10,000) Production subsidiary Sales subsidiary Subsidiaries for nail care business BRIC s Latin America (156,000) including Brazil (63,000) 49

Group Profile Production subsidiary Shiga Shofu Inc. Inc. Promech Inc. Inc. Shoken Inc. Inc. SHANGHAI SHOFU Dental Material Co.,Ltd. (China) Advanced Healthcare Ltd. (U.K.) SHOFU Inc. Summary of the Company Profile and its Businesses Outlets at home and abroad Home: One branch and and five five sales offices Abroad: One outlet (in (in Singapore) Sales company SHOFU Dental Corporation (U.S.) SHOFU Dental GmbH. (Germany) SHOFU Dental Products Ltd. (U.K.) Sales company for nail care business SHOFU Dental Supplies (Shanghai)Co.,Ltd. (China) Nail Labo Japan, Inc. Inc. Nail Nail Labo Inc. Inc. (U.S.) U.S. U.S. Nail Nail Labo (U.S.) Transactions with the company Transactions among subsidiaries 50 Sales Channels Summary of the Company Profile and its Businesses Domestic SHOFU Inc. (20.4 0.4%) (74.8 4.8%) (4.8%) (62.2%) Wholesale agents Agents Orthodontic materials Overseas North America, Latin America, Europe, China Asia, Oceania Local sales subsidiaries (37.8%) Dealers Distributors in each country Dental institutions, schools Dental treatment and services Patients and customers Figures in parentheses represent each sales channel as percentage e of total sales (Non-consolidated figures as of 2008). 51

Market share by product category Summary of the Company Profile and its Businesses 8.1% 51.2 % 50.8 % 4.2% All categories (138,300 million yen) Artificial teeth (4,350 million yen) Abrasives (4,940 million yen) Metal products (12,470 million yen) 11.9 % 13.4 % 10.8 % 4.7% All categories II (94,000 million yen) Chemical products (20,380 million yen) Cements (12,610 million yen) Equipment and appliances (39,260 million yen) All categories includes gold-silver-palladium alloy and machines and equipment for dental clinics. All categories II and other categories do not include gold- silver-palladium alloy and machines and equipment for dental clinics. Source: Production Statistics issued by the Pharmaceutical Industry (Manufacturers shipment values), Ministry of Health, Labour and Welfare (Domestic data, Calendar Year 2005) Figures in parentheses represent market size. 52 Reference < Dentistry Data> 53

Reference < Dentistry Data> Long-term Trend of Dentistry-Related Statistics Trend of national healthcare expenditures, the percentage of the population aged 65 and older, dental treatment expenditure as a percentage of total national healthcare expenditures 60 and manufacturers shipment value of pharmaceutical production as a percentage of total dental treatment expenditures (from 1962 to 2005) 50 40 30 20 10 0 '62 Dental treatment expenditure as a percentage of total national healthcare expenditures (right scale) '64 '66 '68 '70 '72 '74 '76 Dental treatment expenditure (index) (1962=1.00) '78 Percentage of the population aged 65 and older (right scale) '80 '82 '84 '86 '88 '90 Manufacturers shipment value of pharmaceutical production as a percentage of total dental treatment expenditures '92 '94 '96 National healthcare expenditures (index) (1962 = 1.00) '98 '00 '02 '05 '04 24 22 20 18 16 14 12 10 8 6 4 2 0 Source: Summary of National Healthcare Expenditures in Fiscal 2005, Production Statistics issued by the Pharmaceutical Industry (Manufacturers shipment values), (Year Book for each year), released by the Ministry of Health, Labour and Welfare 54 Trend of the Number of Dentists and Dental Treatment Expenditure Reference < Dentistry Data> 35,000 30,000 Dental treatment expenditure per dentist (Unit: 1,000 yen, left scale) 100,000 90,000 25,000 80,000 20,000 15,000 10,000 Number of dentists in practice (Unit: Person, right scale) Dental treatment expenditures (Unit: 100 million yen, left scale) 70,000 60,000 50,000 40,000 5,000 30,000 0 '62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 Source: Summary of National Healthcare Expenditures in Fiscal 2005 and Survey on Doctors, Dentists and Pharmacists in Fiscal 2006 released by the Ministry of Health, Labour and Welfare '86 '88 '90 '92 '94 '96 '98 '00 '02 '05 '04 20,000 55

Healthcare Expenditures by Age Group (Component Ratio) People aged 65 years and older tend to place less importance on dental treatment than general medical treatment. Reference < Dentistry Data> General treatment 46.3 47.8 49.2 50.8 50.2 51.3 51.1 52.2 53.1 53.4 Dental treatment Unit: % 30.9 30.3 29.4 28.2 27.9 27.7 27.2 27.1 26.8 26.0 34.7 34.1 32.7 30.5 37.9 38.2 37.1 37.0 37.0 36.3 34.5 35.4 34.1 33.7 29.7 29.8 31.4 30.0 29.6 29.7 19.7 20.8 22.3 24.6 25.2 26.4 28.9 26.2 27.0 28.8 16.3 15.7 15.3 14.5 15.1 14.6 15.2 14.4 14.1 14.0 6.5 6.3 6.2 6.5 6.8 6.4 6.6 6.3 6.0 6.6 7.8 7.0 7.9 7.9 8.0 7.5 7.9 7.5 7.3 7.7 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 0 14 years old 15 44 years old 45 64 years old 65 years old and older Source: Summary of National Healthcare Expenditures in Fiscal 2005 released by the Ministry of Health, Labour and Welfare 56 Comparison of Healthcare Expenditures by Age Group Dentistry, Ophthalmology and Orthopedics Reference < Dentistry Data> 11,000 10,000 (Unit: 100 million yen) Dentistry Ophthalmology Orthopedics 10,065 (Source: National Healthcare Expenditures in 2004) 9,000 8,000 7,522 8,659 7,331 8,211 7,000 6,000 5,000 4,000 3,000 2,000 1,000-1,865 844 317 1,814 1,942 0 14 years old 15 44 years old 45 64 years old 65 years old and older 2,024 4,346 5,161 4,987 4,196 70 years old and older (Reprint) 2,786 2,868 5,584 75 years old and older (Reprint) (Reprinted from material distributed at the time of lecture given by Dr. Okubo, President of the Japan Dental Association, on October 3, 2007) 57

Trend of Dental Treatment Expenditures (i) Reference < Dentistry Data> Amount paid by dental health insurance (combined amount of Social Insurance and National Health Insurance) and annual 2,500 percentage change (from January 1996 to December 2007) Annual % change (Unit: %, right scale) 5 0 2,000-5 -10 1,500 Actual amount (Unit: 100 million yen, left scale) Medical expense copayment rates for insurance policyholders raised to: September 1997: 20% April 2003: 30% -15-20 -25-30 -35 1,000 January Fiscal '96 July January July Fiscal '97 January Fiscal '98 July January July Fiscal '99 January July Fiscal '00 January Fiscal '01 July January July Fiscal '02 January July Fiscal '03 January Fiscal '04 July January July Fiscal '05 January July Fiscal '06 (Source: Social Insurance Medical Fee Payment Fund and Trend of National Health Insurance Expenditures issued by the All-Japan Federation of National Health Insurance Organizations) January Fiscal '07 July -40 58 Trend of Dental Treatment Expenditures (ii) Reference < Dentistry Data> Amount paid by dental health insurance in a year-on on-year comparison (moving average deviation over 12 months) (from December 1997 to December 2007) 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% Medical expense copayment rates for insurance policyholders raised to: September 1997: 20% April 2003: 30% -4.0% -6.0% -8.0% Social Insurance National Health Insurance Total of Social Insurance and National Health Insurance Largest-ever curtailment of remuneration for medical treatment (in April 2006) '07/12 '07/6 '06/12 '06/6 '05/12 '05/6 '04/12 '04/6 '03/12 '03/6 '02/12 '02/6 '01/12 '01/6 '00/12 '00/6 '99/12 '99/6 '98/12 '98/6 '97/12 (Source: Social Insurance Medical Fee Payment Fund and Trend of National Health Insurance Expenditures issued by the All-Japan Federation of National Health Insurance Organizations) 59

Trend of Shipment Value of Pharmaceutical Industry Production Reference < Dentistry Data> 1,561 1,562 1,512 1,493 1,469 1,564 Shipment value, Unit: 100 million yen 1,479 1,437 1,375 1,383 1,060 1,053 1,015 933 841 895 912 895 942 940 152 291 350 145 346 134 422 145 496 173 459 169 397 163 331 165 203 306 198 303 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 Gold-silver palladium alloy Unit Others Total Production Statistics issued by the Pharmaceutical Industry (Manufacturers shipment values), (Year Book for each year), released by the Ministry of Health, Labour and Welfare 60 Reference < Dentistry Data> The 8020 Movement and Changes in Dental Diseases The primary target of 20% of the population achieving 8020 was reached in 2006. (%) 100 90 80 70 60 50 40 98.0 95.0 88.9 Percentage of people with 20 or more of their own teeth 82.3 70.3 57.1 42.3 Causes of tooth loss No responses, 0.1% Others, 12.6% Orthodontic treatment, 1.2% Fracture, 11.4% Invalid responses, 0.6% Caries (tooth decay), 32.4% 30 20 10 27.1 21.1 8.3 Periodontal disease, 41.8% 0 40~ 45~ 50~ 55~ 60~ 65~ 70~ 75~ 80~ 85~ (Age) (Survey by the 8020 Promotion Foundation in 2005) (Source: Survey of Dental Diseases in 2005 released by the Ministry of Health, Labour and Welfare) 61

Perception of Dental and Oral Health Source: Fiscal 2007 s Dental Equipment Industry Vision (References) Reference < Dentistry Data> Are you satisfied with your physical health? Are you satisfied with your oral health? Don t care 2.1% Not satisfied 7.8% Fully satisfied 6.0% Not satisfied 11.8% Fully satisfied 1.8% Not very satisfied 22.9% Fairly satisfied 61.3% Not very satisfied 42.2% Fairly satisfied 44.2% Do you think it necessary to receive regular dental care (checkup and cleaning) at a dental clinic? Don t know 15.6% Do you actually receive regular dental care? No 74.1% Yes 25.9% No 5.2% Yes 79.2% Potential demand 62 Trend in Percentage of Dental Clinic Visits Consultation rate Reference < Dentistry Data> 14 12 10 Percentage of those who visit a dental clinic: Percentage of those who receive dental treatment (or checkup) once a month (12 times per year) 10.5 10.6 10.6 10.7 11.0 11.0 11.4 11.7 8 6 4 The percentage of those who visit a dental clinic has been leveling off at around 10%. 2 0 Fiscal 1998 Fiscal 1999 Fiscal 2000 Fiscal 2001 Fiscal 2002 Fiscal 2003 Fiscal 2004 Fiscal 2005 (Source: Data in Medical Information Analysis System (MEDIAS) released by the Ministry of Health, Labour and Welfare) 63

Trend in the North American Market The public developed the habit of paying regular visits to dental clinics. Shortage of dentists Percentage of those who make regular visits to dental clinics Number of dentists (per 1,000 persons) North America 54% 0.6 person Increase in regular visits to dental clinics Solution to the problem of oversupply of dentists Japan 16% 0.7 person Reference < Dentistry Data> Population (per dentist) 1,670 person 1,430 person [WHO says that one dentist per 2,000 persons is the appropriate ratio. Appropriate ratio of dentist to population according to WHO: 1:2,000 ] Source: * Health and Welfare Survey in 1999 conducted by the Ministry of Health, Labour and Welfare and a survey conducted by Colgate-Palmolive Company * Consulted an article titled Reasons for the Success of the Canadian Dental Community (DH Style, September 2007) by Ken Yaegaki DDS Ph.D., Professor and head of the Department of Oral Health, Nippon Dental University School of Life Dentistry) 64 Systemic Diseases Caused by Caries and Periodontal Disease Reference < Dentistry Data> Dental and oral diseases Entire body Pregnancy-related related problems Diseases of the digestive and respiratory systems Diseases of the circulatory system Skin diseases Diseases related to metabolic disorder Septicemia, Headache, Stiff shoulders, Malfunction of internal organs, Nutrition disorder Premature birth, Delivery of low birth weight babies Gastritis, Gastric ulcer, Aspiration pneumonia Endocarditis, Myocarditis, Arteriosclerosis Dermatitis Diabetes (Reprinted from the Archive of the 8020 and Enjoy Healthy Life issued by Social Insurance Research Institute) 65

Number of Dentists in the World Europe (278,000) Intensified competition with global players Reference < Dentistry Data> Russia (110,000) Japan (93,000) China (68,000) North America (166,000) (including 150,000 in U.S.A.) India (26,000) Africa (30,000) Other Asian countries (74,000) Oceania (10,000) Latin America (156,000) (including 63,000 in Brazil) Source: Number of dentists Guide to Dental Health Care in the World: How to Provide and Receive Dental Care in Other Countries (Japan Dental Association) Estimated market size Dental Equipment Industry Vision in Fiscal 2007 (Council for Compiling Dental Equipment Industry Vision) Number of dentists in the world: Approx. 1 (one) million Estimated market size: Approx. 2 (two) trillion yen 66