Seiko Holdings Corporation
3Q21 Consolidated Results Presentation
Summary of Q&A

Date:

Wednesday, February 9, from 3:00-4:00 p.m.

Place:<Web conference>Respondent:

Shimesu Takizawa, Executive Director and CFO
Hiromi Nakagawa, General Manager, Corporate
Planning Department

Summary of Q&A :<General>Q1. What is the background behind the high consolidated gross profit margin
during 3Q21?
A1. Net sales of overseas subsidiaries tend to increase in this quarter of theyear in the Watches Business, and it is easier for profit margins to improve
during this period compared to other quarters. Furthermore, our efforts toimprove profitability progressed in every business, and exchange rates
were also favorable. As a result, the profit margin improved.

Q2. Could you please explain the direction that will be taken with respect to thenext Mid-Term Management Plan, to the extent possible?
A2. We do not plan to make any major changes in the direction of the Watches
Business. As our current strategy is producing results for the Electronic
Devices Business as well as the Systems Solutions Business, we do notplan to make any major policy changes. However, we would like to explain
what other needs to be integrated into the Mid-Term Management Plan inorder to achieve greater sustainability.

<Watches Business>
Q3. Please explain the situation over the three months of 3Q21 on a
year-on-year comparison, by region. Please discuss China in particulardepth.
A3. Domestic businesses fell slightly below the previous year’s levels. The1

business in the U.S. performed steadily. Europe’s results were generally inline with those of the previous year. Results for Asia and other regions fellslightly year on year. Chinese business struggled, and sales wereparticularly disappointing for W11 (Singles’ Day) in November.
Q4. Please tell us about the monthly trends in Japan during 3Q21.
A4. The recovery following the lifting of the declaration of a state of emergency
in October was slower than expected. However, consumption trends
improved in November, and store business was lively in December.

Q5. What was behind the weakness of the Chinese market performance? Whatmeasures, such as e-commerce, are you considering and how do you see
the market environment?
A5. We believe that the Chinese government’s “common prosperity” measures
to reduce wealth disparities, together with relatively harsh measures aimed
at foreign products, are the major factors. While the outlook appears dim,
we do not expect to see any sudden changes.

Q6. Please tell us about the situation for Global Brands (GB) up through 3Q21,
as well as the growth measures for 4Q21 and FY22.
A6. In the domestic watch market, high-end products showed favorable
performance through 3Q21. Sales of high-priced products also grew at ourcompany. The same trend was also evident overseas, and we believe
there is great room for growth for Grand Seiko (GS).
GS products have been well received, with the white birch dial model
winning the Men’s Watch Prize at the Grand Prix d’Horlogerie de Genève inNovember. It was also decided that GS will participate as the first Asian
brand in the “Watches and Wonders” watch exhibition in Switzerland, which
will take place from the end of March to April. We would like to further
expand sales through high-end stores in the U.S. and Europe.
We do not plan to change our policy of providing products with a strong
storyline, primarily GS, in FY22 and onward.

Q7. The operating profit margin of the Watches Business has deteriorated year
on year, and the forecast for 4Q21 is for an increase in revenue, but adecrease in profits. Were there any changes to your approach toinvestments in advertising in 3Q21?
A7. The actual net sales figures for 3Q21 include an increase in net sales
2resulting from the application of Accounting Standard for Revenue
Recognition. (Note that even without this factor, revenue would haveincreased.) One of the reasons for the decrease in profits was the decline
in sales in China. Otherwise, there were no major changes, and both net
sales and the scale of our activities were in line with those of the previousyear.

Q8. GS and GB net sales have achieved significant growth overseas. What istheir situation by region? What are the factors behind those results?
A8. GB net sales grew by an even greater amount in North America. Due tochanges in the Chinese market, the amount of growth in Asia, including
China, was limited.
Our measures in the U.S. are proving successful, and we believe there iseven further room for growth.

Q9. Is distribution expanding for GB and GS outside of the U.S.?
A9. The number of stores carrying GB has grown not only in the U.S., but alsoin Europe and Asia.

Q10. Are there differences in profitability between domestic and overseas
markets?
A10. The greater the GB ratio, the higher the profitability. While the recovery inJapan has been slow, there is a growing trend of profitability
improvements overseas.

Q11. Tell us about the results for watches other than GB, and your future policy
with regard to these watches.
A11. In Japan, there are brands other than GB with enduring popularity. Goingforward, we will continue to use efficient marketing to produce constantsales and profits for these products. Overseas, the brand ratios of thoseother than the SEIKO brand are falling.

< Time Creation, WAKO and other Businesses >Q12. During 3Q21, the Company posted an operating profit of 600 million yen
in the Time Creation, WAKO and other Businesses. What was behind thisstrong performance?
3A12. Similar to the domestic Watches Business, WAKO sales rose significantly
in December. Furthermore, as we recently announced, under the “SeikoHouse Ginza Plan,” we reinforced our digital communications, changed
the positioning and role of the Wako building to be more focused onproviding a space for SEIKO brand communications, and changed ourapproach to how selling, general and administrative expenses are borne.
As a result, profits improved by roughly 200 million yen.

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