Seiko Holdings Corporation
FY2017 2nd Quarter Consolidated Results Presentation
Summary of Q&A

Date:

Wednesday, November 15, 2017, from 3:00-3:50 p.m.

Place:Seiko Holdings Corporation, Head OfficeSummary of Q&A :Q1. What kind of market conditions exist for watches?
A1. The Japanese domestic market improved in the 2nd quarter compared to
the 1st quarter. Stock prices have risen as well, and market conditions
have gotten better. The U.S. market has been unstable, with conditions
varying from month to month, but we expect growth during the Christmas
shopping season. In addition, Internet distribution in China has performed
strongly.

Q2. How is the watch market in terms of price range?
A2. In the watch market both in Japan and overseas, high-end Swiss products
are said to be performing steadily, and our high-end products have seen
firm sales as well. Mid-priced products had a slow start in the 1st quarter but
have recovered since the 2nd quarter.

Q3. The Grand Seiko was independently branded in this fiscal year. What were
the trends in the 2nd quarter for this brand, and what are your initiatives forthe 2nd half?
A3. We are expanding the price range for Grand Seiko after the independent
branding by raising prices further for its high-end products. We are actively
developing the brand by expanding the range of models, including luxury
and sports models, in addition to the existing standard model for practicaluse.
We have focused on sales in Japan so far but are gradually increasing
sales overseas in the U.S. and in Asia as well.

Q4. How much investment are you planning for the 2nd half and for the next
fiscal year in the Watches Business?

A4. We intend to maintain the current level of investment for increasing theSeiko brand value.
We will strengthen advertising investment for products depending on net
sales growth.

Q5. What are the current market conditions in the watch movements business,
and what developments are planned for the 2nd half?
A5. Sales increased year on year up to the 1st half, but sales to the U.S. havebeen sluggish when looked at by region. However, we anticipate growth insales to China, where the watch market has been active mainly throughe-commerce. While demand varies by product, we do not believe growth
will be as strong in the 2nd half.

Q6. How are conditions in the Electronic Devices Business, apart from thesemiconductor business?
A6. Sales have been solid, maintaining their level from the 4th quarter of theprevious fiscal year. Geopolitical risks had been factored into our plan, but
the foreign exchange fluctuations we feared did not occur in the 1st half,
which contributed to better results than expected.

Q7. What businesses will be the focus of growth in the Electronic Devices
Business after the semiconductor business becomes an entity accountedfor using equity method?
A7. We intend to focus on the printer-related business. We are implementing
improvements in unprofitable businesses and overall cost cuts. We believethat businesses other than the semiconductor business are seeing steady
improvement in profitability and firm growth during this fiscal year.

Q8. Are you going to allocate the results of structural reforms carried out in thisfiscal year in the form of investment?
A8. A portion will be allocated for investment, but we will basically use theresources resulting from structural reforms to improve profitability.

Q9. The net balance of interest bearing debt was 93.0 billion yen as ofSeptember 30. How do you plan to achieve your target of 75.0 billion yen orless by the end of the next fiscal year?
A9. As of September 30, we are still a long way from our target. However, inaddition to improvements expected to be achieved by our business in the2nd half, we have factored in a decrease in net interest bearing debt owing
to the semiconductor business, which is expected to become an entity
accounted for using equity method from the 4th quarter.
We will make further cuts during operations in the next fiscal year as well.

End