Earning Presentationfor Six months ended September 30, 2023

November 13, 2023

1

Financial Results for 2Q of FY 2023

2

My name is Toshiyuki Furukawa, in charge of the Public & Investor Relations Department.
I will provide an explanation on the financial results for the second quarter of fiscal 2023.

2

Financial Results for 1H (Apr-Sep) of FY 2023

（Unit︓billion yen)

FY2022

FY2023

1H(Apr.-Sep.)

1H(Apr.-Sep.)

ResultResultYoY Change
Amount％Net sales

147.6

152.9

+ 5.2

＋ 3.5%

Operating profit

12.3

13.5

+ 1.1

＋ 9.6%

Operating margin

8.4%

8.9%

-

-

Ordinary Profit

16.8

17.4

+ 0.6

＋ 3.7%

12.6

13.3

+ 0.7

＋ 5.9%¥131/USD¥139/USD¥138/EUR¥152/EUR

Profit attributable toowners of parent

Exchange rate Net sales

Sales increased, reflecting continuing growth in the mainstay
Watches segment

 Operating
profitProfit increased, mainly driven by the Watches segment
3

This is the outline of the statement of income for the first half.
Net sales increased 3.5% to JPY 152.9 billion, reflecting strong performance mainly in
the Watches segment.
Operating profit rose 9.6% to JPY 13.5 billion due partly to the effects of a weak yen.
The operating profit margin stood at 8.9%.
Ordinary profit and profit attributable to owners of parent climbed 3.7% and 5.9%
respectively, to JPY 17.4 billion and JPY 13.3 billion.

3

Result by Business Segments for 1H (Apr-Sep) of FY 2023
Net sales(Unit︓billion yen)

FY2022

FY2023

1H(Apr.-Sep.)

1H(Apr.-Sep.)

ResultResultYoY Change
Amount％Watches

73.3

78.5

+ 5.1

＋ 7.0%

Machine Tools

40.9

41.4

+ 0.5

＋ 1.3%

Devices and Components

22.9

22.1

( 0.7 )

( 3.2% )Electronic and Other Products

10.4

10.7

+ 0.3

＋ 3.0%

Consolidated Total

147.6

152.9

+ 5.2

＋ 3.5%+ 1.3＋ 15.9%( 0.3 )

( 5.5% )+ 0.3＋ 1,708.2%( 0.0 )

( 9.3% )( 0.2 )-

+ 1.1

＋ 9.6%

Operating Profit(Unit: billion yen, %:operating margin)

Watches
Machine Tools
Devices and Components
Electronic and Other Products
Eliminations or general corporate

Consolidated Total

8.8

10.2

12.0%

13.0%

5.5

5.2

13.5%

12.6%

0.0

0.4

0.1%

1.8%

0.7

0.6

7.1%

6.3%

( 2.7 )

( 2.9 )

12.3

13.5

8.4%

8.9%

4

This list shows financial results by business segment.
The Watches segment continued to perform strongly, achieving an 7.0% year-on-yearincrease in net sales and an 15.9% year-on-year increase in operating profit, or theoperating margin of 13.0%.
The Machine Tools segment posted a 1.3% increase in net sales, but posted a 5.5%
decrease in operating profit largely due to the impact of the higher cost of purchasedmaterials.
Devices and Components segment recorded a dip in net sales, but profit rose slightly.
Electronics and Other Products segment posted an increase in net sales.

4Financial Results for 2Q (Jul-Sep) of FY 2023

（Unit︓billion yen)

FY2022

FY2023

2Q(Jul.-Sep.)

2Q(Jul.-Sep.)

ResultResultYoY Change
Amount％Net sales

76.3

80.2

+ 3.8

＋ 5.1%

Operating profit

6.7

8.0

+ 1.2

＋ 18.3%Operating margin

8.9%

10.0%

-

-

8.2

9.4

+ 1.1

＋ 14.2%

5.3

7.1

+ 1.7

＋ 32.0%¥137/USD¥144/USD¥140/EUR¥157/EUR

Ordinary Profit
Profit attributable toowners of parent

Exchange rate5

Next, I will describe the consolidated financial results for the second quarter.
Net sales increased 5.1% to JPY 80.2 billion. Operating profit climbed 18.3% to JPY 8.0
billion, with an operating margin of 10.0%.
Ordinary profit and profit attributable to owners of parent rose 14.2% and 32.0%,
respectively, to JPY 9.4 billion and JPY 7.1 billion.

5

Result by Business Segments for 2Q (Jul-Sep) of FY 2023
Net sales(Unit︓billion yen)

FY2022

FY2023

2Q(Jul.-Sep.)

2Q(Jul.-Sep.)

ResultResultYoY Change
Amount％Watches

38.2

41.4

+ 3.1

＋ 8.4%

Machine Tools

20.9

21.9

+ 0.9

＋ 4.6%

Devices and Components

11.9

11.3

( 0.6 )

( 5.2% )Electronic and Other Products

5.2

5.5

+ 0.3

＋ 6.6%

Consolidated Total

76.3

80.2

+ 3.8

＋ 5.1%+ 0.8＋ 16.8%+ 0.0＋ 2.0%+ 0.2＋ 385.6%+ 0.1＋ 32.4%+ 0.0-( 1.2 )

＋ 18.3%Operating Profit(Unit: billion yen, %:operating margin)

Watches
Machine Tools
Devices and Components
Electronic and Other Products
Eliminations or general corporate

Consolidated Total

4.8

5.6

12.7%

13.7%

2.8

2.8

13.5%

13.1%

0.0

0.3

0.6%

3.1%

0.3

0.5

7.6%

9.4%

( 1.3 )

( 1.4 )

6.7

8.0

8.9%

10.0%

6

Results by business segment for the second quarter are shown here.
All segments achieved growth in net sales and in operating income.
I will provide an overview of each business in the next slide.

6

Watches （Operating Performance)
2Q (Jul-Sep)
 Finished watch
sales

A trend toward recovery was seen in the domestic market. Additionally, sales increased as theEuropean market remained brisk.

 Movement sales

Sales increased due to solid sales of mechanical movements despite sluggish growth of analog
quartz movements

Net sales (billion yen)

Operating profit (billion yen)

■FY2022 ■FY2023■FY2022 ■FY2023

7
7

Slide 8>7 shows the results for the Watches segment.
In finished watches sales, the domestic market trended toward recovery and theEuropean market continued to perform strongly. As a result, net sales increased.
In sales of movements, analog quartz movements did not grow as expected. Even so, net
sales increased because mechanical movements remained firm.

7

Watches Net sales growth rate by region
Rate of change year on year

* The rate of change in total sales of CITIZEN brand watches and BULOVA
brand watches only for North America. For other regions, the rate of change
only in sales of CITIZEN brand watches.
* Rate of change based on local currency

Sales remained at the year-ago level in Japan andAsia (except China).

The strong performances of North America and Europe contributed to a rise in overall sales,
offsetting a significant decline in China.


Japan

Attesa and Promaster led the overall business. In addition, inbound demand continued to recover.



China

Consumer confidence continued to be weak.

Asia (except China)

Inbound demand was firm in Singapore, among other countries, but sales in Hong Kong were sluggish.

America

The attitude of jewelry chains, department stores and others was clearly cautious, but e-commerce
performed strongly.

EuropeItaly maintained their strong performance, and the number of new dealers rose in France.

8

Next, I would like to talk about year-on-year changes in net sales by region on a local
currency basis.
The chart on the left shows year-on-year changes for the second quarter alone.
The red bar shows Japan, where net sales increased because core brands such as ATTESA
led the overall business and inbound demand continued to trend toward recovery.
Light yellow is China, where net sales decreased slightly due to continued weak
consumer confidence.
In Asia, shown in light green, net sales fell due to weak performance in Hong Kong inparticular, despite strong inbound demand in Singapore, among other countries.
In North America, the region indicated by the light blue bar, jewelry chains, department
stores and others showed a cautious attitude toward purchases. Still, net sales increased
due to strong e-commerce sales.
Europe, indicated by the light purple bar, recorded an increase in net sales due to acontinued rise in sales in France, coupled with the strong performance maintained in
Italy, among other countries.

8

Watches: Premium brands
Launched a limited-edition model watch with a washi (traditional Japanese paper)
face featuring platinum leaves falling like snow.
Incorporates highly accurate solar power-based eco-drive movements that have a variation of +/- 5
seconds per year.
The model with a Tosa washi face decorated with platinum leaves will be sold in limited quantities.

Release date: November 2023
Recommended retail price: 451,000 yen (tax included)
Quantity: 500 units worldwide

9

Next, I would like to introduce our new premium brand products.
We launched a new model in The CITIZEN line this month. The model, which will be soldin limited quantities, is equipped with a highly accurate solar power-based eco-drive
movement, which has a variation of +/- 5 seconds per year, and a new platinum leafdecorated version of the well-received Tosa-Washi paper-inspired face.

9Watches: Enhancement of global model collections
The TSUYOSA collection gaining popularity for its rich color options.


A popular model known overseas for its TSUYOSA Collection nickname.
Mechanical watches whose neat design appeals thanks to their vividly colored faces
featuring combination with simple and basic hands.

Recommended retail price: 63,800 yen - 66,000 yen (tax included)10

This slide shows a group of mechanical watches nicknamed the TSUYOSA Collection.
They are hero products that have achieved the largest sales quantities among the
CITIZEN-branded global models this year.
These watches were initially sold under the TSUYOSA nickname in France and gained
popularity quickly in Europe. Subsequently, we launched them in North America andstarted to sell them in Japan as well in September.

10

Watches: Limited-edition ATTESA model
Launched the Power of Neptune, a limited-edition model featuring the concept of the Neptune, an ice giant.
Equipped with the F950 top-end movement from the eco-drive GPS satellite atomic watches from CITIZEN
Attesa's ACT Line.
The Power of Neptune, a specially colored limited-edition model with a sapphire glass bezel.

Release date: November 2023
Recommended retail price: 308,000 yen (tax included)
Quantity: 1,900 units worldwide

11

Regarding the ATTESA lineup, we launched the Power of Neptune, a limited edition
model featuring the concept of Neptune, this month, continuing on from the Power ofAntares launched in June.
Despite its high price of JPY 300,000 as a ATTESA-branded watch, we have received
many pre-orders for the Neptune model as well.

11

Watches: Trends in unit sales price

Increase brand presence to heighten unit sales price In Japan, the unit sales price was on a rising trend, helped by the strong performance of ATTESA and PROMASTER.
 In North America, the unit sales price rose after introduction of high value-added products and price increases under the
CITIZEN and BULOVA brands.

Changes in unit sales price in Japan* Percent change in unit sales price of CITIZEN brand products in Japan fromFY2020Changes in unit sale prices in North America(on a local currency basis)* Percent changes in the unit sales prices of CITIZEN and BULOVA
brand products in North America from those in FY2020 (on a local
currency basis)

12

Moving on, I will now explain the increase of unit sales prices, which is a policy in theMedium-Term Management Plan.
In Japan, unit sales prices increased 15% compared with FY2020, with sales driven by
products of core brands including ATTESA and PROMASTER and the product mix
continued to improve.
In North America, unit sales prices rose 30% compared with levels in FY2020 after the
introduction of high value-added products and price increases in all CITIZEN- or BULOVAbranded products.
We will continue to promote these premium brands and mechanical watches in hopesthat they will better resonate with more customers and become their preferred brand.

12

Machine Tools （Operating Performance)
2Q (Jul-Sep)

Domestic sales Sales increased, reflecting steady sales for the construction machinery and medical
equipment industries, among other industries, despite the spread of a cautious stance on capital
expenditures.
Overseas sales Results remained at the level of the previous year while the Chinese and Asian markets
remained sluggish, the European and Americas markets remained strong

Net sales (billion yen)

Operating profit (billion yen)

■FY2022 ■FY2023■FY2022 ■FY2023

13

This slide shows operating performance for the second quarter in the Machine Tools
segment.
Net sales increased 4.6% year on year to JPY 21.9 billion. Operating profit rose 2.0％
year on year to JPY 2.8 billion.
Sales increased in Japan, reflecting steady sales in the construction machinery andmedical equipment industries, among other industries, despite the increase in thenumber of companies taking a cautious stance on capital expenditures.
Looking overseas, net sales were at the level of the previous year, reflecting solid
performance in Europe and the Americas, despite sluggish sales in China and Asia.
Operating profit rose only 2.0%, partly reflecting an increase in materials costs anddepreciation expenses.

13

Machine tools

Changes in monthly orders received (units) Rate of change year on year (three-month moving average of the numbers of units in orders received)

Rate of change year on year for 2Q (Quarterly number of units in orders received)● Total▲48%

Orders remained in an adjustment phase although a recovery is anticipated.

● Japan▲45%

Market conditions remained weak overall, reflecting the spread of a cautious
stance on capital expenditures..

● Asia▲43%

Market conditions continued to be in a slump due to growing uncertainty
about the future.

● America▲59%

The number of orders continued to trend downward, reflecting risingconcerns about a recession.

● Europe▲58%

The appetite for capital investment was limited due to factors such asconcerns about inflation and recession and soaring energy prices.
14

This slide shows the status of orders received by region.
The line graph shows the three-month moving average of orders received and thepercentage change year on year.
The table under the graph shows the rates of change year-on-year in the second quarter.
Orders received in total decreased 48% year on year due to adjustments continuing
overall.
In Japan, orders received decreased 45% year on year, reflecting the continuation ofgenerally weak market conditions due to the increase in the number of companies
taking a cautious stance on capital expenditures.
Orders received fell 43% year on year in Asia because the market continued to slump
amid growing uncertainty about the future.
In the Americas, orders received declined 59% year on year. They were trending toward
a slowdown due to rising concerns about an economic recession.
In Europe, the appetite for capital investment was limited due to factors such asconcerns about inflation and recession and soaring energy prices, and orders received
declined 58% year on year.
It appears that we have reached the bottom in the second quarter in terms of thedecline of orders received. Despite this, with orders received expected to remain at low
levels in general, the situation will be unpredictable throughout the second half.

14

Devices and Components（Operating Performance)
2Q (Jul-Sep)Precision components
Sales of auto components climbed, given a recovery in automotive production of automakers.
Sales of small motors increased with the recovery in market conditions across a broad range of areas, including healthcare.
Sales of precision components decreased overall, affected by slow sales of other components including crystal devices.



Opto-devices
Sales of opto-devices decreased, mainly due to a drop in sales of illumination LEDs.

Net sales (billion yen)

Operating profit (billion yen)

■FY2022 ■FY2023■FY2022 ■FY2023

Note: FY2022 1Q operating loss 2Q return to profitability
FY2023 1Q return to profitability

15

I will explain the Devices and Components segment.
Net sales were JPY 11.3 billion, down 5.2% year on year, but operating profit increased
to JPY 0.3 billion.
Sales of auto components climbed, given a recovery in automotive production of
automakers.
Sales of small motors remained strong and increased year on year, with orders received
in a broad range of areas including healthcare.
Meanwhile, sales of precision components decreased overall, affected by slow sales ofother components including crystal devices.
In opto-devices, net sales decreased year on year mainly because sales of illumination
LEDs did not recover.

15

FY 2023 Forecasts

16

16

FY 2023 Forecasts
FY 2023 Forecasts
YoY Change
FY2023 5/12 E（Unit︓billion yen)

2H(Oct.-Mar.)

Full YearFY2023 11/13 E
2H(Oct.-Mar.)

Full Year

Amount％1H

Full Year

1H

Full YearNet sales

157.0

310.0

157.1

310.0

+ 0.1

+ 0.0

＋ 0.1%＋ 0.0%

Operating profit

12.4

25.0

11.4

25.0

( 1.0 )

+ 0.0

( 8.1% )＋ 0.0%

Operating margin

7.9%

8.1%

7.3%

8.1%

-

-

-

-

Ordinary Profit

13.3

26.0

11.0

28.5

( 2.2 )

+ 2.5

( 16.7% )＋ 9.6%

10.3

20.0

7.6

21.0

( 2.6 )

+ 1.0

( 26.1% )＋ 5.0%¥130/USD¥130/USD¥145/USD¥142/USD¥140/EUR¥140/EUR¥155/EUR¥153/EUR

Profit attributable toowners of parent

Exchange rate

Exchange rate impact(1 weaker yen, Annual)

USD

EUR

Net sales

+0.9

+0.4

Operating profit

+0.25

+0.2

(Unit︓billion yen)17

We have made partial revisions to the consolidated results forecasts.
We have changed the assumed exchange rates for the second half, setting them at JPY
145 to the US dollar and JPY 155 to the euro, while also conducting a review by factoringin the most recent situation of each business.
For the fiscal year ending March 31, 2024, we have left sales and operating profit
unchanged, but revised ordinary profit and profit attributable to owners of parent
upward to JPY 28.5 billion and JPY 21.0 billion, respectively.

17

FY2023 Forecast by Business Segment

Net sales(Unit︓billion yen)

FY2023 Forecast

FY2023 Forecast(5/12 E)

(11/13 E)

2H(Oct.-Mar.)

Full Year

2H(Oct.-Mar.)

ChangeAmountFull Year％

1H

Full Year

1H

Full Year

Watches

80.0

155.0

87.4

166.0

+ 74.0+ 110.0＋ 9.4%＋ 7.1%

Machine Tools

42.5

87.0

37.5

79.0

( 49.0 )( 80.0 )( 11.6% )( 9.2% )Devices and Components

24.2

47.5

19.8

42.0

( 43.0 )( 55.0 )( 18.2% )( 11.6% )Electronic and Other Products

10.3

20.5

12.2

23.0

+ 19.0+ 25.0＋ 18.9%＋ 12.2%

Consolidated Total

157.0

310.0

157.1

310.0

+ 1.0

+ 0.0

＋ 0.1%＋ 0.0%+ 11.0+ 27.0＋ 14.4%＋ 15.9%( 21.0 )( 33.0 )( 34.8% )( 26.4% )( 7.0 )

( 5.0 )-

( 71.4% )+ 7.0+ 11.0＋ 144.8%＋ 137.5%( 1.0 )

+ 0.0

-

-

( 10.0 )+ 0.0( 8.1% )＋ 0.0%

Operating Profit(Unit: billion yen, %:operating margin)

Watches
Machine Tools
Devices and Components
Electronic and Other Products
Eliminations or general corporate

Consolidated Total

8.3

17.0

9.4

19.7

(10.4%)(11.0%)(10.9%)(11.9%)

6.1

12.5

3.9

9.2

(14.4%)(14.4%)(10.6%)(11.6%)

0.5

0.7

▲ 0.2

0.2

(2.1%)(1.5%)(▲1.0%)(0.5%)

0.5

0.8

1.2

1.9

(4.9%)(3.9%)(10.0%)(8.3%)

▲ 3.0

▲ 6.0

▲ 3.1

▲ 6.0

12.4

25.0

11.4

25.0

(7.9%)(8.1%)(7.3%)(8.1%)

18

I will provide an additional explanation related to the results forecasts for the second
half by segment.
For Watches segment, we have revised the results forecast upward, assuming a slight
downturn in movements sales, this reflects the effect of a weak yen.
In Machine Tools segment, we have hit the bottom earlier than expected in the declineof orders received and have decided to adjust the forecast for the second half
downwards.
In Devices and Components segment, sales of automotive parts increased as projected.
However, with sales of other components such as opto-devices and crystal devices
expected to remain sluggish, we have decided to make a downward adjustment.
Regarding Electronic and Other Products segment, we have revised the results forecast
upward, assuming an increase in sales of photo printers in particular, reflecting theelimination of a backlog of orders accumulated due to semiconductor shortages.

18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 andcompetitive activity.

That concludes my presentation.
Thank you for your attention.

19

Reference

Capital expenditures/ Depreciation(billion yen)

Capex

25

Depreciation
23.0

23.7

20

21.1

15
13.9

17.4

15.4

10

13.0

11.5

10.7 11.1

11.2

FY2020

FY2021

FY202210.9

50
FY2018FY2019FY2023E

Accelerate investment in rationalization of Watches business and growth of Machine Tools businessbased on "Medium-term Management Plan 2024”

Image of investment distribution: Watches segment + Machine Tools segment over 70%
20

20

Reference

Shareholder returns
Medium-term Management Plan 2024

Dividends forecasts for FY2023

Dividend policy for FY2022 to FY2024

Emphasis on continued payment of stable
Dividends
A dividend payout ratio of around 50％
Acquisition of treasury stock: to be judged
flexibly depending on the situation(billion yen)

Dividends per share 40.0 yen (Full year)（Second quarter 20.0yen /Year-end 20.0yen）

Total
dividends
paid Total
Total
acquisition
cost(Resolution)
Total
dividends
paid
acquisition
cost(Resolution)

2020

1515

1010
6.36.355

00

9.39.310.3
9.7

FY2022
FY2022

FY2023E
FY2023E

10.0
10.0
5.55.53.73.73.03.0FY2018FY2018FY2019FY20191.51.5

FY2020
FY2020

FY2021
FY202121

21