Seiko Holdings Corporation
1Q21 Consolidated Results Presentation
Summary of Q&A

Date:

Wednesday, August 11, from 3:00-4:00 p.m.

Place:<Web conference>Respondent:

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

Summary of Q&A :<Watches Business>
Q1. Given the delay in the recovery of the domestic market, what strategy will
you adopt to aim at making a recovery?
A1. In terms of products by price range, high-priced products tend to berelatively favorable. As such, we will promote the Global Brand strategy
focused mainly on Grand Seiko. Furthermore, we will enhance digitalmarketing, including one-to-one marketing.

Q2. I understand that the profit margin for the Watches Business in 1Q21 wasrather low. Can you tell us the factors behind this trend and the profit
margin forecast?
A2. If domestic market conditions, which have been slow to recover, make arecovery, the profit margin will also recover. Although we believe that harshconditions will persist in the domestic market in 2Q21 due to the current
spread of the infection, we hope to return to normal levels, excluding
inbound sales, from 3Q21 onward as vaccinations progress.

Q3. Investments in advertising were kept down based on the judgment that
4Q20 was not the time to make investments. What was the situation in
1Q21?
A3. Overseas, we actively conducted investment activities in line with therecovery in market conditions. However, in Japan, advertising expenses
were rather restrained, because the market environment had not recovered,1mainly due to the prolonged impact of the infection.
If we see signs of a recovery from the infection, we will promptly makeinvestments and respond to a return of pent-up demand.

Q4. Sales in China were strong in FY20 as well. Is this strength continuing inFY21?
A4. Sales continued to show strong growth, increasing by roughly 1.5-fold year
on year in 1Q21.

Q5. In the U.S. and China, where sales are growing, which distribution channel
is showing sales growth: e-commerce or physical stores?
A5. In the U.S., sales through e-commerce grew in FY20, and the level ofgrowth has not changed considerably from this level in 1Q21. Similarly, thee-commerce ratio in China has not changed substantially from FY20.
Although sales at physical stores also grew, we believe that we can further
increase sales at physical stores, if the impact of the infection is reduced as
vaccinations and other measures progress.

Q6. Although the resale market is vital for nurturing Grand Seiko as a high-end
watch, I think that Grand Seiko still lags behind European high-end brands.
What initiatives are you considering, going forward?
A6. We consider the resale market to be an important issue that needs to beaddressed over the medium to long term. We will further reinforce high-unit
price products and launch products with resale value.

Q7. Can you tell us about the initiatives of the GS9 Club?
A7. Having recently exceeded 20,000 members, the GS9 Club holds various
events. Given the current difficulty in holding in-person events, the GS9Club offered online tours of Grand Seiko Studio Shizukuishi anddemonstrations of craftsmanship, and is stepping up activities even amidst
the coronavirus pandemic.
The GS9 Club also exists in the U.S. and China, and is scheduled to soon
be launched in Europe, as well.

<Electronic Devices Business>
Q8. Can you tell us the businesses that performed well with respect to theplan?
2

A8. In 1Q21, inkjet printheads performed better than expected. In addition,
high-performance metals and quartz crystals also performed well. Since
the business for automobiles is stable and easy to forecast, it progressed
as planned.

Q9. Is the improvement in the profit margin mainly due to withdrawal from
unprofitable businesses?
A9. Profitability improved as a result of growth in net sales and an improvementin the product mix.
Amidst a shortage of raw materials and components, there are someproducts that appear to be overheated. The impact has been factored in, byassuming that some of these products will be adjusted during FY21.

<Financial Forecast>
Q10. How much impact do you think risk factors, such as a spread of theinfection and a decline in manufacturing activities due to soaring prices
and a shortage of raw materials, will have?
A10. Regarding the risk of a spread of the infection, we believe that it will bedifficult for consumption to recover in 2Q21 as well, due to recent signs of
the spread of the delta variant, etc. in Japan. Although this risk exists
overseas as well, we are not assuming a further deterioration, either inJapan or overseas due to the progress of vaccinations, and expect a
prolongation of the present situation. Although there was a delay in therecovery of some manufacturing operations, the situation improved from
August onward.
Although risks such as shortages of raw materials and semiconductors
had a slight impact on the Electronic Devices Business in 1Q21, webelieve that the impact on 2Q21 will be more substantial. However, weexpect such impact to be resolved from the latter half of 3Q21 to 4Q21.

***3