C I T I Z E N W A T C H
Consolidated Financial Statements for the Year Ended March 31, 2024
These financial statements have been prepared for reference only in accordance with accounting principles and practices generally accepted in Japan. All figures in these statements which are less than 1 million yen have been rounded down. (English translation)
May 13, 2024 | |
CITIZEN WATCH CO., LTD. | Listings: Prime section of Tokyo Stock Exchange |
Code No.: 7762 | (URL https://www.citizen.co.jp/global) |
Representative: Toshihiko Sato, President and CEO |
Contact: Toshiyuki Furukawa, Managing Director, In charge of Public & Investor Relations Department
Tel: +81 -42-468-4934
Scheduled ordinary general meeting of shareholders: June 25, 2024
Scheduled start of dividend payment: June 26, 2024
Scheduled release of fiscal 2023 Business Report: June 26, 2024
1. Results for the Year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
- Consolidated operating results
(Millions of yen; Percentages represent changes over the previous fiscal year) | ||||||||||
Net sales | Operating profit | Ordinary profit | Profit attributable to | |||||||
owners of parent | ||||||||||
March 31, 2024 | 312,830 | 3.8% | 25,068 | 5.7% | 30,810 | 5.9% | 22,958 | 5.1% | ||
March 31, 2023 | 301,366 | 7.1% | 23,708 | 6.4% | 29,096 | 6.4% | 21,836 | (1.4%) | ||
Note: Comprehensive income: | ||||||||||
As of March 31, 2024: ¥ 45,736 million | (43.6%) | As of March 31, 2023: ¥ 31,852 million | ((15.3%)) | |||||||
Earnings per share | Fully diluted | Ratio of Ordinary | Ratio of Operating | |||||||
earnings per share | Return on equity | |||||||||
(Yen) | (Yen) | profit to total assets | profit to net sales | |||||||
March 31, 2024 | 93.60 | - | 9.7% | 7.7% | 8.0% | |||||
March 31, 2023 | 75.25 | - | 9.6% | 7.4% | 7.9% | |||||
Reference: Equity in earnings of unconsolidated subsidiaries and affiliates: | ||||||||||
As of March 31, 2024: ¥ 1,361 million | As of March 31, 2023: ¥ 1,248 million |
- Consolidated financial position
(Millions of yen) | ||||
Net assets per | ||||
Total assets | Net assets | Equity ratio | share | |
(Yen) | ||||
March 31, 2024 | 415,445 | 256,134 | 59.6% | 1,015.74 |
March 31, 2023 | 389,982 | 232,775 | 57.5% | 866.68 |
Reference: Shareholders' Equity: | ||||
As of March 31, 2024: ¥ 247,659 million | As of March 31, 2023: ¥ 224,179 million |
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- Consolidated cash flows
(Millions of yen) | ||||
Cash and cash | ||||
Cash flows from | Cash flows from | Cash flows from | equivalents at end | |
operating activities | investing activities | financing activities | of term | |
March 31, 2024 | 34,564 | (12,697) | (26,994) | 80,338 |
March 31, 2023 | 16,576 | (13,526) | (40,062) | 79,201 |
2. Dividends
Dividends per share (Yen) | Total | |||||||
dividends | Dividends to | |||||||
First | Second | Third | Year- | Full | paid | Pay-out ratio | ||
consolidated | ||||||||
(annual) | (Consolidated) | |||||||
quarter | quarter | quarter | end | year | (Millions of | net assets | ||
yen) | ||||||||
March 31, 2023 | - | 15.00 | - | 19.00 | 34.00 | 9,315 | 45.2% | 4.2% |
March 31, 2024 | - | 20.00 | - | 20.00 | 40.00 | 9,761 | 42.7% | 4.2% |
March 31, 2025 (E) | - | 22.50 | 22.50 | 45.00 | 50.0% |
3. Projected Consolidated Results for the Year ending March 31, 2025
(Millions of yen) | |||||||||
(Percentages represent changes over the corresponding period of the previous fiscal year) | |||||||||
Earnings | |||||||||
Net sales | Operating profit | Ordinary profit | Net income | per share | |||||
(Yen) | |||||||||
Interim term | 151,000 | (1.3%) | 11,000 | (18.8%) | 12,200 | (30.0%) | 12,500 | (6.6%) | 51.27 |
Full term | 310,000 | (0.9%) | 23,000 | (8.3%) | 25,500 | (17.2%) | 22,000 | (4.2%) | 90.23 |
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4. Others
- Important changes of subsidiaries during the term (change of specified subsidiaries that lead to a change in the scope of consolidation): None
- Adoption of simplified accounting method and special accounting methods: None
- Changes in principles, procedures and classifications of accounting standards associated with the preparation of consolidated financial statements.
- Changes associated with revised accounting standards: None
- Changes other than those in (i)above: None
- Changes in accounting estimate: None
- Restatements: None
- Number of shares issued and outstanding (common stock)
shares | shares | ||||
(i) | Number of shares issued and | 294,000,000 | |||
outstanding at the end of term | March 31, 2024 | 246,000,000 | March 31, 2023 | ||
(including treasury stock) | |||||
(ii) | Number of treasury stock at the | March 31, 2024 | 2,178,601 | March 31, 2023 | 35,334,190 |
end of term | |||||
(iii) Average number of common | March 31, 2024 | 245,277,690 | March 31, 2023 | 290,183,268 | |
stocks | |||||
- The consolidated financial statements are not included in the scope of the audit.
- Explanation about the proper use of financial forecasts and other important notes
Statements above relating to financial forecasts are based on information available to the Company and certain assumptions the Company considers reasonable as of the date of the announcement of these statements. Actual results may differ materially from these forecasts, depending on a variety of factors.
Please refer to the attached "1. ANALYSIS OF OPERATIONG RESULTS, (4) Prospects for the Year ending March 31, 2025" on page 7 for assumptions underlying the above forecasts and precautions regarding their use.
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(Attached Documents) | ||
○INDEX | ||
1. ANALYSIS OF OPERATIONG RESULTS | 5 | |
(1) | Fiscal Year End Operating Results | 5 |
(2) | Assets Outstanding at Fiscal Year End | 6 |
(3) | Cash Flows at Fiscal Year End | 6 |
(4) | Prospects for the Year ending March 31, 2025 | 7 |
2. FUNDAMENTAL VIEWS ON SELECTING ACCOUNTING STANDARDS | 8 | |
3. CONSOLIDATED FINANCIAL STATEMENTS AND PRIMARY NOTES | 9 | |
(1) | Consolidated Balance Sheet | 9 |
(2) | Consolidated Statement of Income and Consolidated Statement of Comprehensive Income | 11 |
Consolidated Statement of Income | 11 | |
Consolidated Statement of Comprehensive Income | 12 | |
(3) | Consolidated Statements of Changes in Equity | 13 |
(4) | Consolidated Statement of Cash Flow | 15 |
(5) | Notes on the Consolidated Financial Statements | 16 |
(Notes related to of going concern assumptions) | 16 | |
(Change in presentation method) | 16 | |
(Segment information) | 16 | |
(Per Share Information) | 18 | |
(Significant Subsequent Events) | 19 |
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1. ANALYSIS OF OPERATIONG RESULTS
- Fiscal Year End Operating Results
During the consolidated fiscal year under review, the Japanese economy continued to experience a moderate recovery in consumer spending, reflecting the normalization of economic activity. In North America and Europe, consumer spending remained firm due partly to increases in wages and employment, despite growing concern over an economic recession linked to inflation and rising interest rates. The Chinese economy experienced a sluggish recovery following the resumption of normal economic activity. Meanwhile, recoveries in other Asian regions were only moderate due to the lack of momentum in exports and weak demand for capital spending.
In this environment, the Citizen Group's consolidated results for the fiscal year under review showed increases in sales and profits, with net sales of 312.8 billion yen (up 3.8% year on year) and operating profit of 25.0 billion yen (up 5.7 year on year). These results were driven mainly by strong performance in Watches. Ordinary profit increased to 30.8 billion yen (up 5.9% year on year), while profit attributable to owners of parents came to 22.9 billion yen (up 5.1% year on year).
Watches
In the domestic market, sales of Citizen brand watches increased with the support of the strong performance of men's watches such as ATTESA and PROMASTER and the recovery of inbound tourism-related demand, despite a decline in consumer confidence linked to price increases.
Looking at overseas markets, the North American market showed signs of weakness in sales for distribution such as jewelry chain stores and department stores amid an increase in budget-minded consumers in response to the CPI remaining high. Even so, sales increased, reflecting the strong performance of online sales and sales for travel distribution. Even so, sales increased, chiefly reflecting the strong performance of online sales. The European market suffered price increases. Despite this, sales climbed due to the strong performance recorded mainly in the UK and Italy, as well as a steady increase in new retailers selling Citizen watches in France. In Asia, countries such as India and Singapore showed signs of a recovery, while sales varied by region. Sales grew in the Chinese market thanks to the success of collaboration merchandise and new initiatives using social media.
Sales of Bulova brand watches rose. This was attributable to, in the mainstay North American market, the cultivation of new sales channels including sales for tourism-related distribution, offsetting weak sales for main distribution channels such as jewelry chain stores.
Sales of movements climbed due to solid sales of mechanical movements, which offset slow sales of analog quartz movements due to concerns about a recession in the North American and European markets.
As a result, notwithstanding concerns about a decline in consumer confidence linked to the long-term price increases occurring globally, thanks to the progress made in initiatives for the enhancement of sales of global brands, premium brands and mechanical watches, the watches segment as a whole posted an increase in sales, with net sales of 162.2 billion yen (up 10.8% year on year). Operating profit increased 19.4% year on year, to 19.8 billion yen, given an increase in net sales and ongoing efforts to improve profitability.
Machine Tools
Sales declined in the domestic market with the continuation of a generally cautious stance regarding capital expenditures, sluggish growth in shipments of automobile-related products and a slump in the semiconductor equipment and pneumatic equipment markets. As for overseas markets, sales primarily of medical products remained strong in the European and American markets. However, this was offset by the ongoing sluggishness of markets in China and other Asian countries, which resulted in a decrease in sales.
As a result, the machine tools segment as a whole posted a decrease in sales, with net sales of 81.6 billion yen (down 5.3% year on year). Operating profit decreased to 9.0 billion yen (down 26.0% year on year), due mainly to rises in raw material prices and transportation expenses.
Devices and Components
Sales of automotive parts increased with the easing of shortages of parts supplies that had been caused by semiconductor shortages, together with a recovery in production at car manufacturers. Sales of small motors rose,
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reflecting market recoveries in a broad range of areas including medical products. However, sales of crystal devices decreased, reflecting sluggish demand growth in demand in the personal computer and IoT markets. Sales of opto-devices decreased due to sluggish demand.
As a result, the devices and components segment overall recorded a decrease in sales and an increase in profit, with net sales of 42.4 billion yen (down 5.0% year on year) and operating profit of 0.4 billion yen (compared to operating loss of 0.8 billion yen in the same period of the previous fiscal year).
Electronic and Other Products
In information equipment, the recovery of demand was weak due to the deterioration of the market environment outlook, resulting in the sluggish growth of POS printers and bar code printers. Even so, sales increased, reflecting strong sales of photo printers due to the growth of demand. Sales of healthcare equipment decreased given ongoing weakness in demand for thermometers and sales of blood pressure monitors, which fell short of sales in the previous year despite a recovery trend.
As a result, the electronic and other products segment overall recorded an increase in both sales and profits with net sales of 22.5 billion yen (up 10.0% year on year) and operating profit of 1.5 billion yen (up 38.7% year on year).
(2) Assets Outstanding at Fiscal Year End
As of the end of the consolidated fiscal year under review, total assets had increased by 25.4 billion yen from the end of the previous consolidated fiscal year, to 415.4 billion yen. Current assets increased by 8.0 billion yen, mainly reflecting rise of 4.0 billion yen and 7.5 billion yen in notes and accounts receivable - trade and inventories, more than offsetting a 1.1 billion yen decrease in cash and deposits and inventories. Non-current assets increased by 17.3 billion yen, reflecting an 8.4 billion yen increase in total property, plant and equipment and a 7.5 billion yen increase in investment securities.
Liabilities had increased by 2.1 billion yen from the end of the previous consolidated fiscal year, to 159.3 billion yen. This was primarily due to increases of 1.6 billion yen in electronically recorded obligations - non-operating and 2.7 billion yen in lease liabilities, which was partly offset by a decrease of 3.8 billion yen in electronically recorded obligations - operating.
Net assets increased by 23.3 billion yen from the end of the previous consolidated fiscal year, to 256.1 billion yen, primarily reflecting a 15.8 billion yen increase in foreign currency translation adjustment and a 6.4 billion yen increase in valuation difference on available-for-sale securities.
(3) Cash Flows at Fiscal Year End
For the cash status of the Citizen Group, cash provided from operating activities was 34.5 billion yen an increase of 17.9 billion yen in income from the previous fiscal year. This was attributable primarily to factors of increase such as 29.3 billion yen in profit before income taxes and 12.3 billion yen in depreciation, which more than offset factors of decrease such as a decrease of 8.6 billion yen in trade payables and 6.2 billion in income taxes paid.
Cash used in investing activities was 12.6 billion yen, a decrease of 0.8 billion yen in expenditure from the previous fiscal year. This was due to factors including 1.9 billion yen in purchase of property, plant and equipment, which more than offset factors such as proceeds from the sale of investment securities of 2.7 billion yen.
Cash used in financing activities was 26.9 billion yen, a decrease of 13.0 billion yen in expenditure from the previous fiscal year. This resulted chiefly from factors such as 12.8 billion yen in purchase of treasury shares, and 9.8 billion yen in dividends paid.
As a result, cash and cash equivalents increased 1.1 billion yen year on year to total 80.3 billion yen at the end of the fiscal year under review.
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- Prospects for the Year ending March 31, 2025 Year ended March 31,
Millions of yen | 2024 | 2025 |
Net sales | 312,830 | 310,000 |
Operating profit or | 25,068 | 23,000 |
loss | ||
Ordinary profit or loss | 30,810 | 25,500 |
Profit or loss attributable | 22,958 | 22,000 |
to owners of parent | ||
Breakdown of sales by segment | ||
Year ended March 31, | ||
Millions of yen | 2024 | 2025 |
Watches | 166,205 | 171,500 |
Machine Tools | 81,629 | 73,000 |
Devices and | 42,487 | 42,500 |
components | ||
Electronic and Other | 22,507 | 23,000 |
Products | ||
Total net sales | 312,830 | 310,000 |
Breakdown of operating profit by segment | ||
Year ended March 31, | ||
Millions of yen | 2024 | 2025 |
Watches | 19,851 | 20,500 |
Machine Tools | 9,029 | 6,600 |
Devices and | 463 | 800 |
components | ||
Electronic and Other | 1,588 | 1,500 |
Products | ||
Eliminations or | (5,864) | (6,400) |
general corporate | ||
Total Operating profit | 25,068 | 23,000 |
or loss | ||
Year-on-year
change%
(2,830) (0.9%)
(2,068) (8.2%)
(5,310) (17.2%)
- (4.2%)
Year-on-year | |
change | % |
+5,295 | +3.2% |
(8,629) | (10.6%) |
+13 | +0.0% |
+493 | +2.2% |
(2,830) | (0.9%) |
Year-on-year
change%
+649 +3.3%
(2,429) (26.9%)
+337 +72.8%
- (5.5%)
- ₋
(2,068) (8.2%)
The Group anticipates weakness in certain sectors of the economy as the post-pandemic recovery in demand runs its course. The economy will still continue to recover moderately. The Group projects that consumer demand and inbound tourism-related demand will recover to a certain degree in Japan, while overseas, consumer spending will remain firm despite concerns about uncertain market conditions.
Taking this situation into account, the Group forecasts net sales of 310.0 billion yen (down 0.9% year on year), operating profit of 23.0 billion yen (down 8.2% year on year), ordinary profit of 25.5 billion yen (down 17.2% year on year) and profit attributable to owners of parent of 22.0 billion yen (down 4.2% year on year) for consolidated financial results for the next fiscal year.
The foreign exchange rates are assumed to be 145 yen against the U.S. dollar and 155 yen against the euro.
Actual foreign exchange rates were 144 yen against the U.S. dollar and 156 yen against the euro in the
consolidated fiscal year under review.
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2. Fundamental Views on Selecting Accounting Standards
The Citizen Group will continue to compile its consolidated financial statements using Japanese standards for the foreseeable future, as they enable comparison of fiscal years in the consolidated financial statements as well as a comparison among companies.
The Group has the policy of appropriately dealing with the application of IFRS, by taking into consideration circumstances in Japan and overseas.
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C I T I Z E N W A T C H
3. Consolidated Financial Statements and Primary Notes
(1) Consolidated Balance Sheet
( | ) | ||
Millions of yen | |||
As of March 31, | As of March 31, | ||
2023 | 2024 | ||
Assets | |||
Current assets | |||
Cash and deposits | 82,490 | 81,312 | |
Notes and accounts receivable - trade | 53,718 | 57,754 | |
Electronically recorded monetary claims - operating | 2,081 | 3,056 | |
Merchandise and finished goods | 58,604 | 64,977 | |
Work in process | 24,291 | 26,472 | |
Raw materials and supplies | 25,595 | 24,600 | |
Consumption taxes refund receivable | 3,052 | 2,659 | |
Other | 10,907 | 8,178 | |
Allowance for doubtful accounts | (1,099) | (1,272) | |
Total current assets | 259,642 | 267,741 | |
Non-current assets | |||
Property, plant and equipment | |||
Buildings and structures, net | 41,808 | 43,146 | |
Machinery, equipment and vehicles, net | 15,868 | 18,634 | |
Tools, furniture and fixtures, net | 3,899 | 4,477 | |
Land | 10,367 | 10,529 | |
Leased assets, net | 5,134 | 7,722 | |
Construction in progress | 2,443 | 3,477 | |
Total property, plant and equipment | 79,521 | 87,987 | |
Intangible assets | |||
Software | 3,951 | 4,368 | |
Other | 799 | 837 | |
Total intangible assets | 4,751 | 5,206 | |
Investments and other assets | |||
Investment securities | 39,021 | 46,602 | |
Long-term loans receivable | 163 | 182 | |
Deferred tax assets | 5,581 | 6,058 | |
Other | 1,675 | 1,979 | |
Allowance for doubtful accounts | (236) | (313) | |
Allowance for investment loss | (138) | - | |
Total investments and other assets | 46,066 | 54,510 | |
Total non-current assets | 130,340 | 147,703 | |
Total assets | 389,982 | 415,445 |
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C I T I Z E N W A T C H | ( | ) | |
Millions of yen | |||
As of March 31, | As of March 31, | ||
2023 | 2024 | ||
Liabilities | |||
Current liabilities | |||
Notes and accounts payable - trade | 18,889 | 18,712 | |
Electronically recorded obligations - operating | 13,325 | 9,482 | |
Notes payable - facilities | 18 | 115 | |
Electronically recorded obligations - non-operating | 384 | 2,057 | |
Short-term borrowings | 3,787 | 10,077 | |
Current portion of bonds payable | 10,000 | - | |
Income taxes payable | 2,179 | 2,315 | |
Accrued expenses | 10,997 | 12,252 | |
Provision for bonuses | 6,156 | 6,548 | |
Provision for bonuses for directors (and other officers) | 303 | 328 | |
Provision for product warranties | 1,244 | 1,264 | |
Provision for loss on reorganization | 110 | 104 | |
Other | 11,918 | 12,381 | |
Total current liabilities | 79,317 | 75,641 | |
Non-current liabilities | |||
Bonds payable | - | 10,000 | |
Long-term borrowings | 51,328 | 42,433 | |
Deferred tax liabilities | 3,628 | 5,334 | |
Provision for loss on reorganization | 6 | 5 | |
Retirement benefit liability | 16,572 | 16,777 | |
Lease liabilities | 4,679 | 7,380 | |
Other | 1,673 | 1,737 | |
Total non-current liabilities | 77,889 | 83,668 | |
Total liabilities | 157,206 | 159,310 | |
Net assets | |||
Shareholders' equity | |||
Share capital | 32,648 | 32,648 | |
Capital surplus | 33,740 | 33,739 | |
Retained earnings | 150,483 | 124,466 | |
Treasury shares | (28,581) | (1,698) | |
Total shareholders' equity | 188,290 | 189,156 | |
Accumulated other comprehensive income | |||
Valuation difference on available-for-sale securities | 10,161 | 16,561 | |
Foreign currency translation adjustment | 25,659 | 41,558 | |
Remeasurements of defined benefit plans | 67 | 382 | |
Total accumulated other comprehensive income | 35,888 | 58,502 | |
Non-controlling interests | 8,596 | 8,475 | |
Total net assets | 232,775 | 256,134 | |
Total liabilities and net assets | 389,982 | 415,445 |
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Citizen Watch Co. Ltd. published this content on 13 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 May 2024 09:06:07 UTC.