Nikon : Consolidated Financial Results of the Third Quarter Ended December 31, 2021 (IFRS)

February 3, 2022

Consolidated Financial Results of the Third Quarter Ended December 31, 2021 (IFRS)

Corporate Name: NIKON CORPORATION

Securities code number: 7731Stock exchange listings: Tokyo

Representative: Toshikazu Umatate, Representative Director, President

Contact: Tetsuya Okumura, General Manager of Finance & Accounting Division

TEL: [phone]URL: https://www.nikon.com

Date for the filing of the Quarterly Securities Report: February 3, 2022

Preparation of supplementary materials for quarterly financial results: Yes

Information meeting for quarterly financial results to be held: Yes (for institutional investors and analysts)

(Amounts are rounded to the nearest millions of yen)

1. Consolidated Results of the Third Quarter ended December 31, 2021 (From April 1, 2021 to December 31, 2021)

(1) Consolidated Operating Results

(Percentage represents year-on-year changes)

Profit (Loss)

Total

Revenue

Operating

Profit (Loss)

Attributable

Comprehensive

Profit (Loss)

before Tax

to Owners

Income for the

of Parent

Period

Millions

%

Millions

%

Millions

%

Millions

%

Millions

%

of yen

of yen

－

of yen

－

of yen

－

of yen

Nine months ended December 31, 2021

406,345

24.5

46,951

52,556

39,073

56,881

472.3

Nine months ended December 31, 2020

326,258

(26.6)

(36,762)

－

(27,931)

－

(23,434)

－

9,938

(56.7)

Basic Earnings

Diluted Earnings

per Share

per Share

Yen

Yen

Nine months ended December 31, 2021

106.41

105.82

Nine months ended December 31, 2020

(63.83)

(63.83)

(2) Consolidated Financial Position

Equity Attributable

Ratio of Equity

Attributable to

Total Assets

Total Equity

to Owners of

Owners of Parent

Parent

to Total Assets

Millions of yen

Millions of yen

Millions of yen

%

As of December 31, 2021

1,021,349

586,150

583,710

57.2

As of March 31, 2021

989,737

538,726

537,585

54.3

2. Dividends

Dividend per Share

First quarter

Second quarter

Third quarter

Year-end

Annual

ended

ended

ended

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2021

－

10.00

－

10.00

20.00

Year ending March 31, 2022

－

20.00

－

Year ending March 31, 2022

20.00

40.00

(Planned)

(Note) Revision of cash dividend forecast from the latest announcement: None

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3. Consolidated Financial Forecasts for the Year ending March 31, 2022 (From April 1, 2021 to March 31, 2022)

(Percentage represents year-on-year changes)

	Revenue		Operating Profit	Profit before		Profit Attributable to	Basic earnings
		Taxes		Owners of Parent	per Share
	Millions of		%	Millions of	%	Millions of		%	Millions of	%	Yen
	yen			yen		yen			yen
Full year	550,000		21.9	47,000	－	53,000		－	39,000	－	106.21

(Note) Revision of forecast from the latest announcement: Yes

4. Others

(1) Changes in Significant Subsidiaries during the Nine Months Ended December 31, 2021: None

(Note) This refers to the presence or absence of specified subsidiaries, which accompany changes in the scope of consolidation in the period under review.

1. Changes in Accounting Policies and Changes in Accounting Estimates
2. 1. Changes in accounting policies required by IFRS: None
   2. Changes in accounting policies other than the above: None
   3. Changes in accounting estimates: None
3. Number of shares issued (ordinary shares)
4. 1. Number of shares issued as of the term end (including treasury shares):

As of December	31, 2021	378,336,521	shares
As of March 31,	2021	378,336,521	shares

2. Number of treasury shares as of the term end:

As of December	31, 2021	11,115,866	shares
As of March 31,	2021	11,147,773	shares

3. Average number of shares during the term (Quarterly total):

Nine months ended December 31, 2021	367,199,869	shares
Nine months ended December 31, 2020	367,136,028	shares

※This report is out of scope of the quarterly review procedure by certified public accountants or auditing firms.

※Appropriate use of business forecasts; other special items

Performance forecasts and other forward-looking statements included in this report are based on information currently available and on certain assumptions deemed rational at the time of this report's release. Due to various circumstances, however, actual results may differ significantly from such statements.

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Attached Material

Contents

1. Performance and Financial Position ..……………………………………………………………………………… 4

(1)	Qualitative Information on Consolidated Operating Results	…..………..……………………………………	4
(2)	Qualitative Information on Consolidated Financial Position	…..………..……………………………………	5

1. Qualitative Information on Consolidated Financial Forecasts ….………..…………………………………… 5

2. Quarterly Condensed Consolidated Financial Statements …….…………………………………………………… 6

(1)	Quarterly Condensed Consolidated Statements of Financial Position ….……………………………………	6
(2)	Quarterly Condensed Consolidated Statements of Profit or Loss and Comprehensive Income.….….…………	8

1. Quarterly Condensed Consolidated Statements of Changes in Equity .…..…………………………………… 10
2. Quarterly Condensed Consolidated Statements of Cash Flows ….…………………………………………… 12

(5) Notes to Quarterly Condensed Consolidated Financial Statements ….…….………………………………… 13

(Going Concern Assumption) ………………………….…………………………………………………………… 13

(Segment Information) ……..………………………….…………………………………………………………… 13

(Contingent Liabilities) ……..………………………….…………………………………………………………… 15

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1. Performance and Financial Position

1. Qualitative Information on Consolidated Operating Results

During the nine months ended December 31, 2021 (from April 1, 2021 to December 31, 2021), in the Imaging Products Business, the supply problem became apparent mainly due to the shortage of semiconductors. As a consequence, the digital camera market had difficulty securing the sufficient supply of products. In the Precision Equipment Business, capital investments in the field related to FPDs, including both large-size panels and mid-to-small size panels, remained solid. Meanwhile, capital investments in the fields related to semiconductors were on an expansionary trend. In the Healthcare Business, the life science solutions and eye care solutions markets largely remained strong. In the Components Business, the Digital Solutions Business continued a solid trend in the markets related to optical parts & components and encoders. In the Customized Products Business, the EUV-related markets remained brisk.

Under these circumstances, during the nine months ended December 31, 2021, revenue increased 80,087 million yen (24.5%) year on year to 406,345 million yen, operating profit amounted to 46,951 million yen (compared to operating loss of 36,762 million yen in the same period of the previous fiscal year), profit before income tax amounted to 52,556 million yen (compared to loss before income tax of 27,931 million yen in the same period of the previous fiscal year), and profit attributable to owners of parent amounted to 39,073 million yen (compared to loss attributable to owners of parent of 23,434 million yen in the same period of the previous fiscal year).

Performance by segment is as follows.

As stated in "2. Quarterly Condensed Consolidated Financial Statements (5) Notes to Quarterly Condensed Consolidated Financial Statements (Segment Information)," the reportable segments have been changed since the three months ended June 30, 2021. Accordingly, the operating results for the previous fiscal year used in the year-on-year comparisons below have been reclassified in line with the change in the segment structure.

In the Imaging Products Business, the Group launched Z 9 full-frame mirrorless camera, the first flagship model for the Nikon Z Series, and received favorable recognition. The Group also sought to expand sales of mid- to high-end products to professionals and hobbyists by enhancing the lineup of interchangeable lenses for mirrorless cameras. As a result, the business segment recorded year-on-year increases in both revenue and profit partly because of favorable foreign exchange rates, despite some constraints in supply caused mainly by the shortage of semiconductors.

In the Precision Equipment Business, the FPD lithography systems field recorded year-on-year increases in both revenue and profit for the nine months ended December 31, 2021 due to the smooth progress of installations despite some adverse effects of travel restrictions on the business amid the spread of COVID-19 and increased unit sales of the systems for both large-size and mid-to-small size panels. The semiconductor lithography system field recorded an increase in profit from the same period of the previous fiscal year during which it recorded loss on disposal and write-down of inventories. This was because of increases in unit sales of refurbished systems and in profit from the service business, despite a decrease in unit sales of new systems. As a result, the business segment as a whole recorded a significant year-on-year increase in profit.

In the Healthcare Business, the life science solutions and eye care solutions fields continued to recover from the impact of the COVID-19 and recorded significant increases in both revenue and profit.

In the Components Business, the Digital Solutions Business recorded increases in both revenue and profit as sales of optical parts & components and encoders remained brisk. The Customized Products Business also recorded increases in both revenue and profit, backed by a significant growth in sales of the EUV-related components.

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(2) Qualitative Information on Consolidated Financial Position

The balance of total assets as of December 31, 2021 increased 31,612 million yen from the end of the previous fiscal year to 1,021,349 million yen. This was mainly because increases were seen in cash and cash equivalents by 15,566 million yen and in property, plant and equipment, right-of-use assets, goodwill and intangible assets collectively by 13,810 million yen as well as in trade and other receivables by 7,598 million yen, while a decrease was seen in inventories by 3,455 million yen.

The balance of total liabilities as of December 31, 2021 decreased 15,811 million yen from the end of the previous fiscal year to 435,199 million yen. This was primarily because decreases were seen in advances received by 33,698 million yen and in retirement benefit liability by 4,235 million yen despite increases in income taxes payable by 12,125 million yen, and in other financial liabilities included in current and non-current liabilities collectively by 9,111 million yen due mainly to an increase in lease liabilities.

The balance of total equity as of December 31, 2021 increased 47,424 million yen from the end of the previous fiscal year to 586,150 million yen. This was mainly because retained earnings increased by 38,965 million yen primarily as a result of posting profit attributable to owners of parent, other components of equity increased by 6,991 million yen due mainly to an increase in market value of shares held; and non-controlling interests increased by 1,299 million yen as a result of making Morf3D Inc. a subsidiary, etc.

During the nine months ended December 31, 2021, for the cash flows from operating activities, net cash of 17,467 million yen was provided (compared to net cash provided of 11,554 million yen in the same period of the previous fiscal year). This is mainly attributable to the recording of profit before tax of 52,556 million yen and depreciation and amortization of 18,366 million yen as well as a decrease in inventories, despite a decrease in advances received, an increase in trade and other receivables, and payment of income taxes.

For the cash flows from investing activities, net cash of 7,025 million yen was provided (compared to net cash used of 1,078 million yen in the same period the previous fiscal year). This is mainly attributable to proceeds of 20,459 million yen from sale of investment securities and of 5,000 million yen from sale of property, plant and equipment, despite purchases of property, plant and equipment and intangible assets in addition to purchase of investment securities.

For the cash flows from financing activities, net cash used in financing activities was 13,688 million yen (compared to net cash provided of 7,044 million yen in the same period the previous fiscal year). This is mainly attributable to repayments of lease liabilities and payment of dividends despite an increase of 3,444 million yen in short-term borrowings.

In addition, the effect of exchange rate changes on cash and cash equivalents increased by 4,761 million yen.

As a result of the above, the balance of cash and cash equivalents as of December 31, 2021 increased by 15,566 million yen from the end of the previous fiscal year to 367,364 million yen.

(3) Qualitative Information on Consolidated Financial Forecasts

Regarding the business environment for the fiscal year ending March 31, 2022, for the Imaging Products Business, the digital camera market will continue to suffer supply problems due in part to the shortage of semiconductors. In the Precision Equipment Business, capital investments in the field related to FPDs, including both large-size panels and mid-to-small size panels, are expected to remain solid. Capital investments in the semiconductor field are expected to continue expanding, supported by the buoyant semiconductor market. In the Healthcare Business, the life science solutions and eye care solutions fields are expected to remain on a recovery track, although the logistics bottleneck will likely affect the business segment. In the Components Business, target markets for the Digital Solutions Business, including the semiconductor market and the factory automation market, are expected to remain solid. The Customized Products Business is expected to see growing demand from EUV-related markets.

The consolidated financial forecast for the fiscal year ending March 31, 2022 is as stated in the "Notice Regarding the Revision of the Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2022" announced on February 3, 2022.

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