Seiko Holdings Corporation
FY2017 Consolidated Results Presentation
Summary of Q&A

Date: Monday, May 14, 2018, from 11:00 a.m. -12:00 p.m.

Place: Keidanren Hall, 2F Keidanren Kaikan



Summary of Q&A:

Q1. The plan for the Watches Business for FY2018 deviates from the 6th Mid-TermManagement Plan. Has the strategy been revised?
A1. When the 6th Mid-Term Management Plan was created in FY2015, the watch
industry had been expanding for six consecutive years. However, there was areactionary downturn worldwide starting in the second half of FY2015. Most recently,in FY2017, statistics from Switzerland and Japan indicate a halt in the decline for thetime being, but sales of affordable-priced watches continue to decrease, and thesituation varies considerably depending on price range or distribution channel. In
these circumstances, naturally we will accelerate and strengthen the shift to priceranges and distribution channel that are growing.

Q2. While sales of high-end watches are growing, net sales for the Watches Business inFY2018 are expected to remain at the same level as in FY2017. I think that isbecause the low- to mid-priced products are impeding performance. When will theWatches Business as a whole, including low- to mid-priced products, start to seegrowth?
A2. Our understanding is that such products are in an adjustment period, so under thepresent circumstances it is difficult to say clearly in which fiscal year the Watches
Business will return to a growth trajectory.

Q3. Although FY2018 net sales in the Watches Business are expected to be flat year onyear, you are forecasting an increase in operating income. Why is that?

A3. The slight decrease resulting from production adjustments carried out in FY2017 will
improve in FY2018, and we expect to see the effects of structural reforms conductedin FY2017. In addition, although we are assuming a stronger yen in FY2018 than in
the previous fiscal year, we are expecting an increase in sales to make up for thedecline in sales owing to the impact of foreign exchange.

Q4. How are the five global brands (Grand Seiko, Astron, Prospex, Presage andPremier) and the high-end watch business progressing compared to the 6thMid-Term Management Plan?
A4. Among the global brands, three brands in particular are performing extremely well:the high-end Grand Seiko, the sports watch series Prospex, and the mechanicalwatch series Presage.

Q5. How far are you hoping to raise the ratio of global brands in the future?
A5. The share of net sales accounted for by global brands differs considerably fromregion to region. In Japan, global brands already account for more than half of net
sales, but the level is not yet that high in overseas markets. For now, our target is toraise the ratio of global brands in overseas markets to over 50%, as it is in Japan.

Q6. As the ratio of global brands increases, how do you view the balance between
improving margins and increasing expenses to enhance brand value in the mediumterm?
A6. In Japan, our priority will be to improve profitability. On the other hand, we willemphasize growth overseas, mainly in Asia, while carefully balancing expenses withprofitability in each market.

Q7. You are forecasting an increase in real income (excluding the impact of the exclusionof the semiconductor business from consolidation) in the Electronic Devices
Business for FY2018. What is the reason for that?

A7. The first reason is that we will steadily secure growth in businesses that are currently
performing strongly. Businesses such as those relating to semiconductor facilities
and the printer business are presently robust. In addition to measures such as
developing new series and enhancing the product lineup, we will of course reinforce
sales in order to ensure income in these businesses. Secondly, we will steadily
improve product groups that have unfavorable earnings. We aim to increase income
by implementing these measures in combination.

Q8. How will you prioritize allocation of capital investment and R&D investment tostrengthen the businesses after the semiconductor business is gone?
A8. We will prioritize capital investment in areas that are growing. In particular, theSystems Solutions Business has grown significantly, and will naturally be a priority
for investment.
As for R&D, We cannot say specifically, but we will invest both in current businesses
and in development for the future.

End