Nikon : Third Quarter Financial Results

February 9, 2023

Consolidated Financial Results of the Third Quarter Ended December 31, 2022 (IFRS)

Corporate Name: NIKON CORPORATION
Securities code number: 7731	Stock exchange listings: Tokyo

Representative: Toshikazu Umatate, Representative Director, President

Contact: Tetsuya Okumura, General Manager of Finance & Accounting Division

TEL: [phone]

URL: https://www.nikon.com

Date for the filing of the Quarterly Securities Report: February 9, 2023

Date for the commencement of dividend payments: -

Preparation of supplementary materials for quarterly financial results: Yes

Information meeting for quarterly financial results to be held: Yes (for institutional investors and analysts)

(Amounts are rounded to the nearest millions of yen)

1. Consolidated Results of the Third Quarter ended December 31, 2022 (From April 1, 2022 to December 31, 2022)

(1) Consolidated Operating Results												(Percentage represents year-on-year changes)
																		Profit	Total
	Revenue	Operating Profit	Profit before Tax			Attributable	Comprehensive
			to Owners	Income for the
																		of Parent	Period
	Millions		%			Millions		%			Millions	%			Millions	%	Millions			%
	of yen					of yen				of yen			of yen	of yen
Nine months ended December 31, 2022	456,097		12.2			50,623		7.8		52,314	(0.5)		39,456	1.0	46,922	(17.5)
Nine months ended December 31, 2021	406,345		24.5			46,951		-		52,556	-			39,073	-	56,881	472.3
	Basic Earnings	Diluted Earnings
	per Share			per Share
			Yen					Yen
Nine months ended December 31, 2022		109.21			108.61
Nine months ended December 31, 2021		106.41			105.82
(2) Consolidated Financial Position
													Equity Attributable		Ratio of Equity
														Attributable to
	Total Assets			Total Equity		to Owners of
					Owners of Parent
														Parent
																to Total Assets
	Millions of yen		Millions of yen		Millions of yen				%
As of December 31, 2022		1,058,720				610,390				608,789				57.5
As of March 31, 2022		1,039,566				599,967				597,681				57.5
2. Dividends
										Dividend per Share
	First quarter		Second quarter		Third quarter				Year-end		Annual
	ended				ended				ended
			Yen						Yen					Yen						Yen					Yen
Year ended March 31, 2022			-			20.00					-				20.00		40.00
Year ending March 31, 2023			-			20.00					-
Year ending March 31, 2023																		20.00		40.00
(Planned)
(Note) Revision of cash dividend forecast from the latest announcement: None

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3. Consolidated Financial Forecasts for the Year ending March 31, 2023 (From April 1, 2022 to March 31, 2023)

(Percentage represents year-on-year changes)

	Revenue		Operating Profit	Profit before	Profit Attributable to	Basic Earnings
		Tax		Owners of Parent	per Share
	Millions of		%	Millions of	%	Millions of		%	Millions of	%	Yen
	yen			yen		yen			yen
Fiscal year	630,000		16.8	55,000	10.1	57,000		(0.2)	42,000	(1.6)	116.71

(Note) Revision of forecast from the latest announcement: Yes

4. Others

(1) Changes in Significant Subsidiaries during the Period: Yes

(Note) This refers to the presence or absence of specified subsidiaries, which accompany changes in the scope of consolidation in the

period under review.

Newly included:	1 company (Nikon AM. AG)
Excluded:	-

1. Changes in Accounting Policies and Changes in Accounting Estimates
2. 1. Changes in accounting policies required by IFRS: None
   2. Changes in accounting policies other than the above: None
   3. Changes in accounting estimates: None
3. Number of Shares Issued (Ordinary Shares)
4. 1. Number of shares issued as of the period end (including treasury shares):

As of December	31, 2022	377,928,086	shares
As of March 31,	2022	378,336,521	shares

2. Number of treasury shares as of the period end:

As of December	31, 2022	25,445,409	shares
As of March 31,	2022	11,062,646	shares

3. Average number of shares during the period (cumulative total):

Nine months ended December 31, 2022	361,289,170	shares
Nine months ended December 31, 2021	367,199,869	shares

• This report is out of scope of the quarterly review procedure by certified public accountants or auditing firms.
• Appropriate use of business forecasts; other special items

Performance forecasts and other forward-looking statements included in this report are based on information currently available and on certain assumptions deemed rational at the time of this report's release. Due to various circumstances, however, actual results may differ significantly from such statements.

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Attached Material

Contents

1. Performance and Financial Position ..……………………………………………………………………………… 4

(1)	Qualitative Information on Consolidated Operating Results	…..………..……………………………………	4
(2)	Qualitative Information on Consolidated Financial Position	…..………..……………………………………	5

1. Qualitative Information on Consolidated Financial Forecasts ….………..…………………………………… 6

2. Quarterly Condensed Consolidated Financial Statements …….…………………………………………………… 7

(1)	Quarterly Condensed Consolidated Statements of Financial Position ….……………………………………	7
(2)	Quarterly Condensed Consolidated Statements of Profit or Loss and Comprehensive Income.….….…………	9

1. Quarterly Condensed Consolidated Statements of Changes in Equity .…..…………………………………… 11
2. Quarterly Condensed Consolidated Statements of Cash Flows ….…………………………………………… 13

(5) Notes to Quarterly Condensed Consolidated Financial Statements ….…….………………………………… 14

(Going Concern Assumption) ………………………….…………………………………………………… 14

(Segment Information) .….……..………………………….……………………………………………… 14

(Contingent Liabilities) …..……..………………………….……………………………………………… 16

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1. Performance and Financial Position

(1) Qualitative Information on Consolidated Operating Results

During the nine months ended December 31, 2022 (from April 1, 2022 to December 31, 2022), in the Imaging Products Business, shipped quantities of products showed a recovery trend as the digital camera market saw an improvement in problems with procurement of components due in part to the shortage of semiconductors. In the Precision Equipment Business, capital investments in the field related to FPDs showed a diminishing trend both for mid-to-small size panels and large-size panels. In addition, capital investments in the fields related to semiconductors started to show signs of being in a correction phase and remained unchanged. In the Healthcare Business, the life science solutions and eye care solutions markets largely remained strong. In the Components Business, the Digital Solutions Business continued a solid trend in the markets related to optical parts & components and encoders. In the Customized Products Business, the EUV-related markets remained solid.

Under these circumstances, during the nine months ended December 31, 2022, revenue increased 49,752 million yen (12.2%) year on year to 456,097 million yen, and operating profit also increased 3,672 million yen (7.8%) year on year to 50,623 million yen. While profit before tax decreased 242 million yen (0.5%) year on year to 52,314 million yen, profit attributable to owners of parent increased 383 million yen (1.0%) year on year to 39,456 million yen.

Performance by segment is as follows.

As stated in "2. Quarterly Condensed Consolidated Financial Statements (5) Notes to Quarterly Condensed Consolidated Financial Statements (Segment Information)," the reportable segments have been changed since the three months ended June 30, 2022. Accordingly, the operating results for the previous fiscal year used in the year-on-year comparisons below have been reclassified in line with the revised business segments.

In the Imaging Products Business, the Group focused on expanding sales of mid- to high-end products and interchangeable lenses to professionals and hobbyists. Sales of the flagship model, Z 9 full-frame mirrorless camera remained strong. As a result, the business segment recorded year-on-year increases in both revenue and profit partly because of higher average unit selling prices and the positive effects of the yen depreciation.

In the Precision Equipment Business, the FPD lithography systems field recorded decreases in both revenue and profit due to decreased unit sales of the systems for both mid-to-small size panels and large-size panels. The semiconductor lithography system field recorded increases in both revenue and profit owing to increased unit sales of new systems, despite deferred sales of some systems. As a result, the business segment as a whole recorded year-on-year decreases in both revenue and profit.

In the Healthcare Business, the life science solutions and eye care solutions fields received strong orders, and there were the positive effects of the yen depreciation. As a result, the business segment as a whole recorded significant year-on-year increases in both revenue and profit.

In the Components Business, the Digital Solutions Business recorded increases in both revenue and profit as sales of optical parts & components and encoders remained brisk. The Customized Products Business recorded increases in both revenue and profit, backed by continuous solid sales of EUV-related components. As a result, the business segment as a whole recorded year-on-year increases in both revenue and profit.

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(2) Qualitative Information on Consolidated Financial Position

The balance of total assets as of December 31, 2022 increased by 19,154 million yen from the end of the previous fiscal year to 1,058,720 million yen. This was mainly due to increases of 41,116 million yen in inventories, 11,978 million yen in property, plant and equipment, right-of-use assets, goodwill and intangible assets, 9,793 million yen in trade and other receivables, and 5,521 million yen in deferred tax assets, despite a decrease of 56,755 million yen in cash and cash equivalents primarily as a result of purchasing treasury shares.

The balance of total liabilities as of December 31, 2022 increased by 8,730 million yen from the end of the previous fiscal year to 448,330 million yen. This was mainly due to increases of 7,687 million yen in income taxes payable, 3,948 million yen in other financial liabilities, 3,029 million yen in trade and other payables, and 3,003 million yen in bonds and borrowings, despite a decrease of 9,480 million yen in advances received.

The balance of total equity as of December 31, 2022 increased by 10,424 million yen from the end of the previous fiscal year to 610,390 million yen. This was mainly due to increases of 8,277 million yen in other components of equity primarily as a result of an increase in exchange differences on translation of foreign operations and 24,590 million yen in retained earnings primarily as a result of the recording of profit attributable to owners of parent, despite an increase of 20,753 million yen in treasury shares primarily as a result of purchasing treasury shares.

During the nine months ended December 31, 2022, for the cash flows from operating activities, net cash of 9,263 million yen was provided (17,467 million yen provided in the same period of the previous fiscal year). This was mainly attributable to the recording of profit before tax of 52,314 million yen, and depreciation and amortization of 20,645 million yen, despite an increase of inventories, a decrease of advances received, and payment of income taxes.

For the cash flows from investing activities, net cash of 31,736 million yen was used (7,025 million yen provided in the same period of the previous fiscal year). This was mainly attributable to purchase of investment securities of 10,653 million yen and purchase of property, plant and equipment and intangible assets of 22,122 million yen.

For the cash flows from financing activities, net cash of 41,704 million yen was used (13,688 million yen used in the same period of the previous fiscal year). This was mainly attributable to purchase of treasury shares of 21,952 million yen and cash dividends paid of 14,364 million yen.

In addition, the effect of exchange rate changes on cash and cash equivalents increased by 7,422 million yen.

As a result of the above, the balance of cash and cash equivalents as of December 31, 2022 decreased by 56,755 million yen from the end of the previous fiscal year to 313,522 million yen.

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