Watts Co., Ltd.
(2735; Tokyo Stock Exchange Prime Market)

Operating Results for the Fiscal Year
Ended August 2023 and Business
Forecasts for the Fiscal Year Ending
August 2024
Friday, October 13, 2023
Fumio Hiraoka,

President and CEO

Contents
Financial
Overview

Operating Results for the Fiscal Year
Ended August 2023

P2 – P6

By Business

Status of Each Business for the
Fiscal Year Ended August 2023

P8 – P14

Business Plan

Business Forecasts for the Fiscal
Year Ending August 2024 andEfforts toward Each Business

P16 – P23

Reference

P25 – P32
1

Financial
Overview

Consolidated Operating Results for the Fiscal Year
Ended August 2023
(Millions of yen)
FY8/22Financial highlights

FY8/23 (Current period)
Ratio tosales

Ratio to
sales

YoY

Ratio toforecast

Sales

58,347-59,309-101.6％

100.5％

Gross profit

22,281

38.2％

22,45437.9％

100.8％-

Selling, general and administrative
expenses

21,282

36.5％

21,83236.8％

102.6％-EBITDA

1,690

2.9％

1,369

2.3％

81.0％

-

Operating profit

998

1.7％

621

1.0％

62.3％

155.4％

Recurring profit

1,148

2.0％

648

1.1％

56.5％

162.2％

781

1.3％

250

0.4％

32.1％

167.1％--Net income attributable to owners ofparent
Net income per share (Yen)

57.83

18.46

✓

Sales increased by 1.6% YoY, supported by more than 200 new store openings, despite the slower
same-store sales growth at 100-Yen shops.
➡P9,10✓Although the higher sales proportion of products priced above 100 yen partially reduced the cost-of-sales
ratio, the gross margin decreased by 0.3ppt. In addition, the operating profit was 62.3% of theprevious fiscal year, primarily due to rising utility and transportation costs.
➡P4,5

✓

Meanwhile, sales reached 100.5% of the plan due to the ongoing recovery in same-store sales since
July. Operating profit far exceeded the target at 155.4%, as we were able to mitigate the impact ofhigher procurement costs and utility expenses, etc.

2Financial
Overview

Sales by Business Type(Millions of yen)
FY8/22

Sales by Business TypeFY8/23 (Current period)
Ratio tosales

Ratio to sales

YoY

Directly managed

51,82988,8％52,99689.4％

102.3％

100-Yen shops Wholesale, Other

2,126

3.6％

2,013

3.4％

94.7％

53,95592.5％

55,01092.8％

102.0％

304

0.5％

226

0.4％

74.4％

1,123

1.9％

987

1.7％

87.9％

1,428

2.4％

1,214

2.0％

85.0％

2,963

5.1％

3,084

5.2％

104.1％

58,347100.0％

59,309100.0％

101.6％

Subtotal
Directly managed

Overseas
Business

Wholesale
Subtotal

Domestic
Other
Business

Buona Vita
RealTokino:ne

Total

etc.

✓ Overseas sales have continued to be lower than pre-COVID levels, with its proportion of
total sales decreasing by 0.4ppt. Meanwhile, the sales proportion of domestic 100-Yen
shops increased by 0.3ppt, reflecting the increase of directly-managed shops.
3

Financial
Overview

13,726

Quarterly Changes in Gross Margin

Sales

Gross profit

14,78014,96914,871

Decrease in gross profit margin
due to the acquisition of Ontsu
F･RETAIL co.,ltd, which has ahigh proportion of food sales

14,69914,851

38.2%

5,610

FY8/22
Q1

FY8/22Q2

5,723

FY8/22
Q3

14,8775,644

FY8/22
Q4

38.4%

38.0%

38.0%
37.6%

5,303

14,880Due to higher procurement
costs and increase in overseas
wholesale sales, etc.

38.6%
38.0%

(Millions of yen)

Gross margin

37.4%

5,525

5,644

FY8/23
Q1

FY8/23Q2

5,570

FY8/23Q3

5,714

FY8/23Q4
4

Financial
Overview

Factors for Changes in Operating Profit(Millions of yen)

Gross margin decreased by 0.3ppt,
with gross profit increasing by 0.8%
YoY.

Increase ingross profit

173

Increase in
rent

268

Impact of increased social insurance
premiums, etc. due to expanded social
insurance coverage for non-regular
employees

Increase inpersonnel
expenses

119
Operatingprofit998

Increased as our power provider(PPS) withdrew from its business andelectricity prices rose

Increase inequipment cost17

81
Increase inutility bill

54

8

Increase in
freight costs Increase/decreasein other expenses

OperatingprofitDecreased by 376 million yen 62.3％ YoYPrevious
period

前期

621

Current
period当期

5

Financial
Overview

Consolidated Balance Sheet andConsolidated Cash Flows(Millions of yen)

Consolidatedbalance sheet✓ Shareholders' equity ratio was

FY8/23(Current period)

FY8/22

Pct. change

46.9%, up by 0.3ppt from the end of
the previous period.

Pct. change

Cash and deposits

6,687

Up 8.4%

5,646

Down 15.6%

Merchandise and finished goods

8,734

Up 17.5％

9,719

Up 11.3％

Other current assets

3,139

Up 28.2％

3,553

Up 13.2％

Tangible fixed assets

2,155

Up 38.9％

2,011

Down 6.7％

Other fixed assets

4,883

Up 30.6％

4,557

Down 6.7％

Total assets

25,600Up 20.0％

25,489Down 0.4％

Liabilities

13,669Up 35.1％

13,524

Down 1.1％

Net assets

11,931

Up 6.3%

11,964

Up 0.3%✓Merchandise and finished goods
increased by 985 million yen, while
cash and deposits decreased by
1,041 million yen.

✓

The increase in other current
assets was due to a 233 million
yen increase in deposits held withtrust banks in connection with theacquisition of treasury stock.

✓

The decrease in cash flows fromoperating activities was due to a
638 million yen decrease inincome before income taxes andan increase in inventories andaccounts payable reflecting an
increase in sales of products
priced above 100 yen.

(Millions of yen)

Consolidated cash flows

FY8/23(Current period)

FY8/22

Pct. change
Net cash provided by (used in)operating activities
Net cash provided by (used in)investing activities
Net cash provided by (used in)financing activities
Effect of exchange rate change on cash
and cash equivalents
Cash and cash equivalents at end of
periodFree cash flows

Pct. change

1,721

1,343

221

△1,500

△975

△196

△667

307

△328

△276

△633

△304

101

70

38

△62

6,687

518

5,646

△1,041

746

1,146

△446

△1,193

6

Contents
Financial
Overview

Operating Results for the Fiscal Year
Ended August 2023

P2 – P6

By Business

Status of Each Business for the
Fiscal Year Ended August 2023

P8 – P14

Business Plan

Business Forecasts for the Fiscal
Year Ending August 2024 andEfforts toward Each Business

P16 – P23

Reference

P25 – P32
7

By Business

Topics by Business

Domestic 100-Yen Shop BusinessOpening/closing

Compared to the full-year plan of opening 236 shops and closing 90 shops,
we opened 228 shops and closed 100 shops. The total number of shops
was 1,769 at the end of the fiscal year.
➡P10

Watts brand shops

Increased by 218 shops to 1,247 shops through openings and renovations.
The share of Watts brand shops to the total number of 100-Yen shops was
70.5%.

M&A

OFR absorbed into Watts East Japan Sales Co., Ltd. and Watts West Japan
Sales Co., Ltd. in September 2022. The post-merger integration process has
been completed.

Overseas Business
Overseas shops

The number of shops selling WATTS products was 39 in the Group, down 16
from the end of the previous fiscal year. The new shop brand “Watts.up+”
was launched.
➡P12

Domestic Other Business
Buona Vita

A lifestyle goods shop offering a comfortable and joyful life. Operate 15
shops, and the same-store sales performed well at 112.2% YoY.
➡P13

Real

Community-based discount shop. Operate 5 shops at the end of
August 2023. Aim to create synergies with 100-Yen shop business.
➡P14

8

By Business

Status of 100-Yen Shop Business (1)－Changes in same-store sales YoY

105.0%
FY8/23 (Current period)

FY8/22 (Previous period)

101.0%

100.0%
100.0%

98.7%

100.8%

98.9%

98.8%

98.0%
97.1%

98.6%
95.0%

95.6%

Sep

Full year

Oct

95.8%

97.0%

95.2%

Nov

Sales

Dec

No. ofcustomers

Jan

Feb

97.9％

96.5％

100.3％

Current period

98.5％

97.6％

101.4％

97.3%

Due to temporary
closures of 247 shops,
mainly in the Kinki
region, caused bymultiple typhoons

96.2%

Sharp drop in demand
for masks

Mar

Apr

May

Jun

Jul

Aug

✓

The same-store sales slightly fell below the YoY
figure at 98.5%, as many of our resources wereallocated to mass shop openings and productreplacement due to product discontinuation causedby soaring costs.

✓

On the other hand, sales of WATTS branded shops
were 99.9% of the previous fiscal year.

Spending per
customerPrevious period

98.6%

98.3%

Nationwide cold
weather and snowfall

90.0%

100.3%

97.6%

97.5%
96.6%

99.7%

99.7%

99.3%

9

Status of 100-Yen Shop Business (2)By Business―Number of shops (opening/closing plan and results)
Opening
Closing
No. of shops at the end of period

Acquisition of
Ontsu F･RETAIL

1,641

1,240

1,769 1,787

228

1,364

Opening/closing plan and results

236

Opening plan
236 shops→ Opened 228 shops

Closing plan
90 shops→ Closed 100 shops

193
165

129

✓ Net increase of 128 shops vs. the planned 146
shops.

100

81
41
FY8/20FY8/2190✓

The breakdown of new shop openings includes 22
tenant-type shops and 206 consignment-type
shops, with the majority of openings being
consignment-type shops.

FY8/23(Plan)✓Out of the total 1,769 shops, we have 1,247
WATTS brand shops (a net increase of 218 shops).

61

FY8/22

FY8/23(Result)10

By Business

Status of 100-Yen Shop Business (3)―Number of tenant-type shops introduced higher price products and its sales mix
18.0%

Sales of higher-priced products (tenant-type shops)

Proportion of sales of higher-priced products (tenant-type shops)

15.5%

2,000

16.0%

14.0%

11.0% 11.4%

1,500

8.1%

8.1%

8.6%

9.0%

9.8%
8.3%

8.3%

12.0%

9.9%

8.6%

10.0%

1,000
8.0%

6.0%

500
4.0%

2.0%

0

0.0%

FY8/21
Q1

FY8/21
Q2

FY8/21
Q3

FY8/21
Q4

FY8/22
Q1

FY8/22
Q2

FY8/22
Q3

FY8/22
Q4

FY8/23
Q1

FY8/23
Q2

FY8/23
Q3

FY8/23
Q4✓ We currently have 3,275 higher-priced products.

✓ We will continue to make efforts to increase the product lineups of higher-priced
products, aiming for these product sales to account for 20.0% of total sales (it was
16.2% in August alone).

11

By Business

Status of Overseas Business
Sales from directly-managed shops
Wholesale sales(Millions of yen)
300 0

2,715
2,297

250 0

200 0

1,881

2,476
1,756

1,616

1,505

1,714

1,371
150 0

1,428

1,174

1,214

1,311
100 0

1,231
500

707

925

1,098

762

444

1,123

987

274

304

226

FY8/21

FY8/22

FY8/230

FY8/16

FY8/17

FY8/18FY8/19FY8/20Country

FormatThailandNo. ofshops(FY8/23)

Opening

Closing

FC

-

12

25

China

FC

-

-

４

Peru

Directlymanaged

１

５

10

１

17

39

Total

✓ In Thailand, there are currently 25 shops,
decreased by 12 shops YoY. We havelaunched a new shop brand, Watts.up+,
primarily focusing on offering higher-priced
products.

✓ In Peru, sales decreased due to a challenging
external economic environment.

✓ Overall, overseas sales have decreased
Watts.up+ Central Rama 2 (Thailand)because international shipment volumes have
not yet fully recovered to pre-COVID levels.
12

By Business

Status of Buona Vita

Opening
Closing
No. of shops at the end of period

21

21

23
18
15
Buona Vita Grand Emio Tokorozawa (Saitama)✓ As of September 1, 2022, Watts Connection, the
5
3
4

5

FY8/20FY8/21

operator of Buona Vita, was merged into Watts East
Japan Sales.

4

3 1
FY8/222
FY8/23(Result)✓ 15 shops as August 31,2023.
3

FY8/23(Plan)*Excluding 6 consignment shops in our 100-Yen
shops.

✓ The same-store reached 112.2% of the previous
fiscal year, driven by robust sales of apparel, bags,
and other items, reflecting increased demand for13
outings.

By Business

Status of Real and Tokino:ne✓ Offer a wide range of value-formoney products, leveraging ourrobust procurement capabilities.

✓ We also run collaborative shopswith our 100-Yen shops to createsynergistic effects.

✓ Operate 5 shops as of August 31,
2023.

✓ Operate 2 “Tokino:ne” shops, ahousehold items brand.
✓ The store layout is divided into zones formorning, noon, evening, and night. It
offers a collection of products necessaryfor each time zone, allowing customers toenjoy their shopping experience whileenvisioning their daily routines.
✓ Expanded its product offerings in 200 of
our 100-Yen shops."
14

Contents
Financial
Overview

Operating Results for the Fiscal Year
Ended August 2023

P2 – P6

By Business

Status of Each Business for the
Fiscal Year Ended August 2023

P8 – P14

Business Plan

Business Forecasts for the Fiscal
Year Ending August 2024 andEfforts toward Each Business

P16 – P23

Reference

P25 – P32
15

Business Plan

Business Forecasts for FY8/24(Millions of yen)
FY8/22Business forecasts

FY8/23

Ratio tosales

FY8/24 (Forecast)

Ratio to
sales

YoY

Ratio to
sales

YoY

YoY

Sales

58,347-115.1％

59,309-101.6％

59,100-99.6％

Gross profit

22,281

38.2％

113.5％

22,45437.9％

100.8％

-

-

-

SG&A

21,28236.5％

118.4％

21,83236.8％

102.6％---

Operating profit

998

1.7％

59.8％

621

1.0％

62.3％

500

0.8％

80.4％

Recurring profit

1,148

2.0％

72.4％

648

1.1％

56.5％

400

0.7％

61.7％

781

1.3％

80.9％

250

0.4％

32.1％

270

0.5％

107.8％Net income attributable toowners of parent
Net income per share (yen)

57.83

-

18.46

-

20.05

-

ROE

6.7%

-

2.1%

-

2.3％

-

✓ We anticipate a modest decrease in sales as we intend to✓ 100-Yen shop opening/closing plan
【Opening】 160 【Closing】 120
Net increase: 40 shops✓✓ 100-Yen shop same-store sales are
expected to be 100.6% YoY for the fullyear.

✓

proactively close unprofitable shops.
Operating profit and recurring profit are also expected to decline.
This is attributed to the increased expenses associated with store
closures, as well as renovations of large-scale shops, theintroduction of full-function self-checkout registers, and systemrelated investments.
Conversely, net income attributable to the owners of the parent
company is projected to remain on par with the previous year.

16Business Plan

Efforts to improve the Price-to-Book (P/B) ratio

FY8/21

FY8/22

FY8/23

PBR

1.06x

0.82x

0.69x

ROE

8.9％

6.7％

2.1％

Stock
price

¥887

¥717

¥616

Operatingprofitmargin

3.3％

1.7％

1.0％

*Stock price on the record date of the settlement ofaccounts.

【Current status】✓ The cost of equity isperceived to be 4-5%.

✓ The Return on Equity (ROE)is below the cost of equity【Our efforts】 (FY8/24)✓ Improve profit margin

・Improve profit margin by increasing the proportion of
products priced above 100 yen.
・Improve operating profit margin by primarily opening
consignment-type shops, while proactively closing
unprofitable shops (plan to open 150 consignment-type
shops in FY8/24)
・ Sustain the optimal SG&A spending ratio through theintroduction of self-checkout registers and automaticordering systems.

✓ Enhance shareholder returns

・Plan to enhance shareholder returns through dividend
payments and the acquisition of treasury stock(Plan to acquire 440,000 shares of treasury stock
between July 2023 and March 2024, with the intention ofcanceling these shares after the acquisition)✓ Deepen interactions with shareholders

・ Information disclosure via Timely Disclosure Systemand our websites
・Hold briefings for individual investors
17

Business Plan

Growth vision with the trinity of our businessContinue to pursue
Structure to Sell
Better Products at
Lower Prices

Develop shops
collaborated with otherbusiness formats✓ Low-cost opening and closing ofshops✓ Low-cost operation✓ Best value-for-money dailyuse household items✓ Utilize POS system and promote
the introduction of automatedordering system✓ Further improvement of the“Watts” and "Watts with" shop
opening model✓ Create group synergies byleveraging other businessformats✓ Consider M&A for further growth

100-Yen Shop business

Establish businessmodel for eachcountry✓ Further growth of existing
businesses under COVID-19
environment✓ Start joint businesses withoverseas partners✓ Collaboration with otherindustries utilizing existing
management resources

Overseasbusiness

Otherbusinesses

Expand business andenlarge source of
earnings✓ Fundamentally strengthen
the Group's e-commercechannels✓ Capture new opportunities
including M&A

18

Business Plan

Initiatives for the 100-Yen Shop Business (1)Offer higher-priced products✓

Increase the number of higher-priced products (price ranges above 100 yen)
to expand the product range and keep the sales floor attractive .

✓Actively introduce these items to consignment-type shops, leading to an
improvement in gross margin for the entire group.

✓

We currently have 3,275 items as of August 31, 2023. Plan to reach 20.0%
of sales proportion with 4,500 lineups as early as possible.

Intra-group collaboration✓ Collaboration with lifestyle product brand Buona
Vita and a household items brand Tokino:ne tocreate synergies within the group.

19

Business Plan

Initiatives for the 100-Yen Shop Business (2)Renovation of FLET'S brandshops into WATTS✓✓✓

Change floor layouts and increase the numberof lifestyle products
In some shops, the renovation has yielded
positive effects such as an increase in the
proportion of lifestyle product sales, leading tosignificant overall sales growth.
Apply the successful cases for more shops toimprove profitability for large-scale street-level
shops

20

Business Plan

Initiatives for the 100-Yen Shop Business (3)Introduction of self-checkout register✓ Full-function self-checkout registers accepting both cash andcashless payments were introduced in 14 shops as of August
31, 2023. (including cashless-only self-checkout machines,
these are available in 96 shops). In FY8/24, we plan to
introduce them in an additional 100 shops.
✓ These machines are designed to enhance in-store productivity
by streamlining the purchasing process and reducing labor
requirements; use spare resources to improve customer
satisfaction.
✓ Reduce waiting time to minimize peak-time queue(Reduce opportunity losses)

POS data analysis✓ To enhance the freshness of our sales floor products, we are actively
reducing slow-moving items and replacing them with popular and new
products✓ Utilize POS data for data analysis, creating store models that align with thespecific shop location and customer demographics.
✓ Automatic ordering systems are introduced to nearly all tenant-type shops;
currently, 70% of all shops place orders automatically. Further improvements
are underway to enhance efficiency.

21

Business Plan

Initiatives for the 100-Yen Shop Business (4)Online Shop

Social Media・Watts official YouTube channel✓ To further expand the in-store pick-up service,
we relaunched our online shop on September
1, 2023 (initially introducing the service in 180
shops).
✓ Handling not only 100-Yen shop items but also
the group-wide brand items.

✓ Increase our brand awarenessthrough these media
22

Business Plan

Initiatives for Overseas and Other Businesses【Overseas Business】⚫ Implement structural reforms for the Thailand business and measures for
the Peruvian business. These measures include the closure of unprofitable
shops and cost reduction initiatives, all aimed at achieving profitability.
⚫ Expand our new overseas brand, Watts.up+.
⚫ Explore new markets and revitalize existing markets.
【Buona Vita】⚫ Plan to open 1 new shop, with a target of 99.5% same-store sales YoY.
⚫ Enhance the product sections within our 100-Yen shops to increase theirappeal to customers.
⚫ Optimize store layouts using POS data analysis.
【Real】⚫ Plan to open 1 new shop, which is renovated from the FLET’S branddirectly-managed shop.
⚫ Enhance collaboration with our 100-Yen shops, aiming to improve thegross margin through optimization of sales balance between 100-yen
items and Real’s items.
【Nippan】⚫ Ensure a consistent inventory supply for core products, especially for
medical institutions, to prevent opportunity losses.
23

Contents
Financial
Overview

Operating Results for the Fiscal Year
Ended August 2023

P2 – P6

By Business

Status of Each Business for the
Fiscal Year Ended August 2023

P8 – P14

Business Plan

Business Forecasts for the Fiscal
Year Ending August 2024 andEfforts toward Each Business

P16 – P23

About Watts GroupP25 – P32

Reference24Reference

Brands of Watts Group

Domestic 100-Yen shop business

Overseasbusiness

Other domestic
business25

Reference

Overview of Other Businesses

Buona Vita, a variety store
that promotes a comfortable
lifestyle. Operate 15 shops
as of August 31, 2023.
Tokino:ne, a household
items shop under the themeof “time”. Operates 2 shops.

Community-based
small discount shop.
Operate 5 shops as ofAugust 31, 2023.
Collaboration shop between
100-Yen shop and grocery

26

Reference

Company Profile

Establishment

February 22, 1995 (Currently the 29th business term)

Meaning of the Company’s name

Derived from “Wa! tto ikou”(Japanese catch cry to “go forth energetically”)

Market listing

Tokyo Stock Exchange Prime Market(Securities code: 2735)

Capital stock

440 million yen

Head office

Main business

Number of employees
Number of shops

5F,Sumitomo OBP Plaza Building, 4-70,
Shiromi 1-chome, Chuo-ku, Osaka-shi, Osaka Prefecture

Wholesale and retail of daily-use and household items(Mainly operation of 100-Yen shops)
3,492 employees (as of August 31, 2023) *Part-time workers included
1,831 shops (as of August 31, 2023) *Other shops included27

Reference

Corporate History✓ 2022 Transition to the Prime Market

2021
Acquired
Ontsu F RetailCo., Ltd.

✓ 2011 Advanced to Hokkaido（Opened shops in 47 prefecture）

2014
Exceeded
1,000 shops

2009
Started overseas business
Advanced to Thailand
2007✓ 1997 Established distribution
Integrated
with
Ohthree Co., Ltd.
center in Shiga Prefecture
Exceeded 700 shops✓ 1995 Established in Chuo-ku,
Osama , as a successor of
Hisamatsu Co., Ltd.

2002
¥10b in sales
Went OTC

FY8/23

1998
Exceeded 100 shops
for 4 years
after establishment

1995
Established
Consolidated sales

Sales¥59.3bn

No. ofshops

1,831 shops

No. of Group shops at the end of period28Reference

Sustainability/ESG Initiatives
Environmental Initiatives✓ Develop sustainable products made fromenvironmentally friendly recycled materials

Human Resources
Initiatives✓ 【Diversity】
Promote diversity by appointing
personnel based on their abilities
and aptitudes, regardless of gender,
nationality, etc. Female managers
accounted for 9.9% (FY8/23).

✓ 【Work-Life Balance】
Encourage employees to take paid
holidays and male childcare leave,and create a comfortable work
environment.

Governance✓ Established the Sustainability Committee to address sustainability, including climate-related
issues. The Committee is chaired by the President, facilitating the decision-making and reporting
process to the Board of Directors, as well as the integration of climate-related issues into
management.
29

Reference

Shareholder Composition

Individual and others

Other companies

Foreign companies and others

Financial institutions

Securities companies

Treasury stock

0.83%
FY8/2262.43%

FY8/2357.76%

24.71%

24.74%

9.47% 2.32%

11.28%
1.58%

Total number ofshares issued
Number ofshareholders

FY8/21

FY8/22

FY8/23

13,958,800

13,898,800

13,898,800

sharessharesshares

22,29023,70418,504

YoY

0.21%

3.10%

1.51%

✓ The number of shareholders,-△5,200mainly individual
shareholders, decreased by
5,200 from the end of thesame period last year (thepercentage of individual
shareholders decreased by
4.67ppt.)△4.67P+0.03P ✓ The acquisition of treasury
stock increased the
4.25%
0.83%
1.58%
+0.75P
Company's shareholding
Financial institutions
12.98%
9.47%
11.28%+1.81P
ratio by 0.78ppt. (theacquisition is still ongoing in
Securities companies
0.08%
0.21%
1.51%
+1.30P
the current period)
Treasury stock
3.58%
2.32%
3.10%
+0.78P
30(Note) The figures are rounded to the third decimal place and may not add up to 100% when adding the ratios of each section.
Individuals and others
Other domestic
companies
Foreign companies
and others

54.49%
24.60%

62.43%
24.71%

57.76%
24.74%

Reference

Dividend Policy

The Company’s policy is “to maintain a stable dividend payment,”
considering the return of profits to shareholders.

Net income per share

Dividend per share

ROE（Return on Equity）

DOE（Dividend on Equity）

FY8/22

FY8/23

Net income per share (Yen)¥72.09¥57.83¥18.46¥20.05

Dividend per share (Yen)¥22.00¥15.00¥15.00¥15.00

Dividend payout ratio

30.5％

25.9％

81.2％

74.8％

Dividend yield

2.5％

2.1％

2.4％

2.4％

ROE (Return on Equity)

8.9％

6.7％

2.1％

2.3％

DOE (Dividend on Equity)

2.7％

1.7％

1.7％

1.7％

Dividend payout ratio

74.8%
81.2%

30.5%
25.9%

8.9％

6.7％

1.9%

2.7％

¥22.00FY8/21

2.1％
1.7%

2.3％

FY8/24(forecasts)

FY8/211.7％¥15.00¥15.00¥15.00FY8/22

FY8/23

FY8/24(Forecast)*The dividend payout ratio for each fiscal year is calculated based on thestock price of the accounting date.
*The payout ratio for FY8/24 is calculated based on the stock price on
August 31, 2023.)

31

Reference

Transition to the Standard Market[Status of compliance with the continued listing criteria for the Prime Market]
No. ofShareholders

No. of Tradable
SharesTradable Share
Market Cap

Tradable ShareRatio

Our status(As of Aug. 31, 2023)

18,504

67,955 units¥4.51 billion

48.9％

Continued Listing Criteria for
the Prime Market

800

20,000 units¥10.00 billion

35.0％Compliance status

Fulfilled

Fulfilled

Unfulfilled

Fulfilled✓ We did not meet only the "Tradable Share Market Cap" criterion among the Prime
Market listing maintenance criteria. Following the clarification of the end date forthe relaxation of the Prime Market maintenance criteria, we reconsidered our
position. As a result, we have decided to move to the Standard Market. Thisdecision was made because we believe it is optimal to ensure an environment inwhich our shareholders can hold and trade our shares with confidence. (Themarket change will be effective as of October 20, 2023).
✓ Furthermore, our company complies with all the listing maintenance criteria of theStandard Market, and even after the transition, we will continue our efforts toenhance our corporate value."32

The data and future forecasts presented in this material are based on information that
was available at the time this material was released. Changes in circumstances canoccur due to a range of factors and the Company gives no guarantee regarding
achievement of objectives and forecasts, or future operating results. Information
contained herein may change without forewarning. When using this data and referencematerials, please verify and confirm details against information that you have obtainedby other methods and exercise your discretionary judgment. Watts Co., Ltd. will in noway be held liable for any loss resulting from the use of this material.

Please contact us if you have any inquiry regarding this material.
Inquiries:
Hidehito Mori
(Executive Managing Director, Head of Corporate Planning Office), Watts Co., Ltd.

e-mail： ir@watts-jp.com
TEL ： +81-6-4792-3280