Citizen Watch : Presentation with script

Earning Presentation

for Three months ended June 30, 2021

August 13, 2021

This presentation contains forward looking statements that are based on current expectations and assumptions.

Actual results could differ materially due to risks and uncertainties, which includes, but not limited to, currency fluctuation and competitive activity.

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Financial Results for 1Q of FY 2021

My name is Toshiyuki Furukawa, in charge of the Public & Investor Relations Department.

I will outline the results for the first quarter (Q1) of FY2021.

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Key Notes

Financial Results for 1Q of FY 2021

• Sales and profit increased, exceeding the initial forecast, mainly in the mainstay Watches and Machine Tools segments.
• All businesses achieved to operating profitability due to the recovery of net sales following the resumption of economic activity.

FY 2021 Forecasts

• Based on actual results for Q1 of FY2021, the forecast for the financial results for H1 has been revised upward.
• Net Sales 268.0 billion yen(Change from previous forecast: +8.0 billion yen)
  Operating profit 13.8 billion yen(Change from the forecast made last year: +3.8 billion yen)

Dividends Forecasts

• (Change from previous forecast: +4.0 yen) (Interim +2.0 yen, year-end +2.0 yen)

Increased dividend 18.0 yen (Interim 9.0 yen, year-end 9.0 yen)

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Let me begin the presentation by explaining the key points of our financial results for the fiscal year ended March 31, 2022.

Although the COVID-19 pandemic continues to impact the Company, consumption has recovered mainly in North America and other overseas markets. Regarding Q1 results, both sales and profit increased due to improved business performance mainly in the mainstay businesses of Watches and Machine Tools.

We returned to profitability following the loss posted in the first quarter of the previous year, and achieved profitability in all business segments, with the operating profit margin recovering to 6.4%.

In addition, we have revised our full-year forecasts due to the significant upturn in Q1 results.

We forecast net sales of JPY 268.0 billion, up JPY 8.0 billion from the previous forecast, and operating profit of JPY 13.8 billion, up JPY 3.8 billion from the previous forecast.

Moreover, in line with the upward revision of the earnings forecast, we have also raised the dividend forecast.

The forecast annual dividend per share is 18.0 yen, an increase of 4.0 yen from the previous forecast.

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Financial Results for 1Q of FY 2020

	FY2020	FY2021	YoY Change
（Unit︓billion yen)	Q1 Result	Q1 Result	Amount	％
Net sales	36.8	65.7	+28.9	+0.8
Operating profit	▲ 5.6	4.2	+9.8	-
Operating margin	▲15.3%	6.4%	-	-
Ordinary Profit	▲ 4.9	5.0	+9.9	-
Profit attributable to owners	▲ 6.7	4.3	+11.1	-
of parent
Exchange rate	¥108/USD	¥109/USD	-	-
¥118/EUR	¥131/EUR

 Posted a gain on sales of land and buildings : 0.8 billion yen (Extraordinary profit)

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Next, let me share the consolidated financial results for Q1 of FY2021.

Net sales totaled JPY 65.7 billion, an increase of JPY 28.9 billion, or 78%, from the previous fiscal year.

Operating profit was JPY 4.2 billion, an increase of JPY 9.8 billion year on year, and ordinary profit was JPY 5.0 billion, an increase of JPY 9.9 billion year on year.

Profit attributable to owners of parent was JPY 4.3 billion, an increase of JPY 11.1 billion year on year, due in part to an extraordinary income of JPY 0.8 billion from the sale of land and buildings.

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1Q21 Result by Business Segments

		Net sales	FY2020		YoY change
		FY2021
		（Unit: billion yen）	Q1 Result	Q1 Result	Amount	％
	■ Watches	12.0	29.0	+16.9	+141.0%
	■ Machine Tools	10.0	18.6	+8.5	+85.2%
	■ Devices and Components	10.4	13.1	+2.6	+25.7%
	■	Electronic and Other Products	4.2	4.9	+0.6	+15.0%
		Consolidated Total	36.8	65.7	+28.9	+78.4%
		Operating Profit
	(Unit: billion yen, %:operating margin)
	■ Watches	▲ 3.8	1.4	+5.3	-
	(▲31.8%)	(5.2%)
	■ Machine Tools	0.3	2.6	+2.3	+618.6%
	(3.7%)	(14.3%)
	■ Devices and Components	▲ 0.7	0.9	+1.6	-
	(▲7.3%)	(7.1%)
	■	Electronic and Other Products	▲ 0.3	0.3	+0.6	-
	(▲7.2%)	(7.4%)
		Eliminations or general corporate	▲ 1.1	▲ 1.2	▲ 0.1	-
		Consolidated Total	▲ 5.6	4.2	+9.8	-
		(▲15.3%)	(6.4%)
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Results for Q1 by segment are as shown.

The Watches segment posted a 141% increase in sales and a JPY 5.3 billion increase in operating profit.

The Machine Tools segment posted a 85% increase in sales and a JPY 2.3 billion increase in operating profit.

The Devices segment posted a 25% increase in sales and a JPY 1.6 billion increase in operating profit, and all businesses, including other businesses, posted an operating profit.

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