Citizen Watch : REPORT (Integrated Report) 2025 for viewing （ ）

INTEGRATED REPORT

CITIZEN REPORT 2025

CITIZEN WATCH CO., LTD.

https://www.citizen.co.jp/global

Front Cover Visual Concept

The design symbolizes the CITIZEN Group's diverse values converging as one-advancing together in harmony to craft a new tomorrow.

2025.11

Introduction

History of the CITIZEN Group

Rooted in watchmaking. Evolving into a Group that serves society at large.

From its origins in watchmaking, CITIZEN has continued to leverage its micro-precision technologies to take on new challenges across diverse fields.

Its relentless pursuit of innovation led to the creation of new businesses-such as machine tools and devices-which grew into standalone companies and eventually formed today's CITIZEN Group.

As society has evolved, CITIZEN has responded to the needs of the times, shaping the Group we know today.

1910

2030

Founder of Citizen Watch Co., Ltd.

Kamekichi Yamazaki

Watches Business

Founded in 1918 by Kamekichi Yamazaki

1918

Established Shokosha Watch Research Institute, predecessor of

Citizen Watch Co., Ltd.

1924

CITIZEN's first pocket watch

1931

CITIZEN's first wristwatch: CITIZEN F

1952

Japan's first wristwatch with a calendar function:

Calendar

1959

Japan's first

fully waterproof watch: Parawater

1956

Japan's first

1970

World's first titanium wristwatch:

X-8 Cosmotron Chronometer

1976

World's first

solar-powered analog watch: Crystron Solar Cell

1993

World's first multi-band

radio-controlled watch: Cal.7400

2008

2011

World's first

satellite-synchronized watch: Eco-Drive Satellite Wave

2012

Acquired shares of Prothor Holding SA

2021

Mechanical model with

new mechanical movement: The CITIZEN

with a strong desire to create Japanese-made timepieces at a time when Swiss and American pocket watches dominated the market; developed in-house machinery to improve accuracy and established a watchmaking school to train skilled technicians; the first product was named "CITIZEN" by Count Shinpei Goto, then Mayor of Tokyo, with the

1936

Began in-house

production of watchmaking precision machinery:

AL-1

shock-resistant watch movement: Parashock

1961

Began external sales of machine tools

Acquired shares of Bulova Corporation

2011

2016

World's thinnest

light-powered watch with a 1mm movement:

Eco-Drive One

Acquired shares of Frederique Constant

2024

100th anniversary of the first CITIZEN pocket watch

Special Limited Edition Pocket Watch

hope that it would be "loved by citizens

for years to come."

The first pocket watch bearing the

Machine Tools

Developed in-house precision machinery as an alternative to expensive

1957

Cam-operated automatic lathe

1970

World's first

automatic NC lathe: D16

1986

Long-selling

1996

First network-compatible NC automatic lathe: L20

Citizen Machinery Co., Ltd., and Miyano Machinery Inc. merged

2018

Friction bonding technology

2022

Total solution models combining machines

name "CITIZEN"

In the U.S. middle-range market

Top-tier share

In movement sales

A global leader

Swiss-made machines; began external sales in 1961.

In small and mid-sized CNC automatic lathes

Top-tier global market share

Devices and Components

Applied precision processing and micro-precision technologies

1964

Entered office equipment sector

NC automatic lathe with a sliding headstock: L16

1997

2011

2013

Multi-station machining cell: MC20

Low Frequency Vibration-Cutting (LFV) Technology

and peripheral devices

Devices and

Electronics and Other Products 24.9

8％

Europe

Other 3.2

1%

Japan

cultivated through watch assembly.

1976

1983

World's first

IC sensor‒equipped electronic thermometer: CT-20

Home-use ultrasonic cleaner: SW1500

High-efficiency LED lighting: COB Series

2013

2017

Industry's smallest class in height and width thermal printer: CT-S255

2023

Components 40.4

13％

FY2024

66.7

21%

25%

80.4

Started production of crystal oscillators

1990

Applied watch component

Compact linear motor galvanoscanner:

Receipt printers:

CT-S801III / CT-S851III

23％

Consolidated Net Sales 316.8

billion yen

5G%

Watches 177.1

FY2024

Overseas Sales Ratio 75%

(tuning-fork type) for CITIZEN watches

processing technologies to manufacturing automotive parts

2007

Dye-sublimation thermal transfer

GVM Series

2021

Ultra-compact ceramic fluid dynamic bearing

Machine Tools 74.3

U.S. 91.8

29%

24%

Asia 74.4

digital photo printer:

CX Series

(billion yen) (billion yen)

Value Creation Story

Inputs

Business Activities and Management Foundation

Outputs Outcomes

Financial Capital

Total assets

JPY 415.5 billion

Net assets

JPY 264.1 billion

Intellectual Capital

Number of patents owned by the Group

Over 3,000

Number of trademarks owned by the Group

Over 4,000

Manufacturing Capital

Capital expenditures

JPY 20.9 billion

Production structures mainly in Japan, China, and Thailand

Responding to Climate Change and Contributing to a Recycling-Oriented Society

P

r

o

d

u

Research & development

Materiality

s

c

ti

v

it

i

e

s

B

u

s

i

n

e

s

A

p

r

o

v

e

n

c

y

Contributing to Better Quality of Life

Im

e

m

c

t

i

o

n

E

f

fi

c

i

Product planning

Miniaturization

Citizen

Providing Solutions in the Industrial Sector

e

n

t

t

h

r

o

u

g

h

D

X

Design

Value Provided

Providing Sustainable Products

Watches Providing products and services

that help customers express themselves and their thoughts

Machine Tools Providing globally pioneering

Giving customers impressive value and high satisfaction, solutions to customers' problems, and contribution to their business success

Customers

Business activities reducing environmental impact

Environment

Peace of Mind

Mutual improvement through business activities and achievement of sustainable growth

Corporate Philosophy

Loved by citizens, working for citizens.

The CITIZEN Group's Long-term Vision

Crafting a new tomorrow

Suppliers

Social Capital

Globally expanded supply chain network

Sales & after-sales services

Automation Technology

Group's Technologies

Low Power Consumption

Precision Processing

Procurement

solutions for production innovation

Employees

Providing growth

Impressive Trust Value

Local communities

Solutions to

Human Capital

Number of employees 14,452

Sales

Responding to Climate Change and Contributing to a

Logistics

Production

Fulfilling Social Responsibility

Devices and Components

Providing key devices that support industries and people's lives around the world

opportunities, increasing job satisfaction, and creating a comfortable work environment

Shareholders

Increase of shareholder value

social issues, local community

development, and job creation

Natural Capital

Total energy consumption

1,084 thousand GJ

Water withdrawal

1,692 thousand ㎥

Recycling rate

92.6%

(As of March 2025)

Recycling-Oriented Society

Enhancing Job Satisfaction and Developing Human Resources

e

m

e

g

a

n

a

M

n

o

ti

a

d

n

u

o

F

nt

Corporate Governance

Realizing the Sustainable Factory Concept

Management Strategies for Enhancing Corporate Value

• Message from the President & CEO

Crafting a new tomorrow

United in a single team across the Group, we strive to realize our corporate philosophy.

Citizen Watch Co., Ltd. President & CEO

Yoshitaka Oji

Sustainability Strategy

Strengthening the Management Foundation

Corporate Data

as a whole fell short of the targets. Nonetheless, we succeeded in achieving our ROE target over the full three-year period of the plan, thanks to efforts to improve shareholder returns and optimize asset holdings.

Overall, we believe that we steadily executed the strategies set forth in the plan over these three years. At the same time, we recognize that certain results did not meet expectations and need to be addressed. In the Watches Business, performance in Asia-particularly in China-was weaker than anticipated, and this remains a challenge. In the Machine Tools Business, we recognize the need to strengthen our sales capabilities and service infrastructure in order to remain competitive, even amid the inevitable cyclical fluctuations of the market. In the Devices and Components Business, profitability has been under pressure, and a shift toward a structure capable of generating stable profits is essential. We will continue identifying issues in each business and steadily implement the measures outlined over the next three years.

Advancing toward the Medium-term Management Plan 2027

Upon Assuming the Role of President

In April 2025, I assumed the role of President and CEO of Citizen Watch Co., Ltd. Drawing on my past experience, I am committed to achieving the targets outlined in our Medium-term Management Plan 2027, while also taking a medium- to long-term perspective in enhancing corporate value and driving the CITIZEN Group's continued growth toward realizing our Group Vision 2030.

Since joining the Company in 1986, I have gained broad experience in the Watches Business-from planning and sales to launching overseas factories and promoting product development. Having long been involved in watchmaking, I have a simple yet

enduring desire-to create better products. It is true that enhancing the value of brands and companies through marketing is essential, but I would like to emphasize that this value is built on trustworthy and safe products.

In corporate management, what I value most is teamwork-everyone in the organization united in working toward a common goal. The capacity of each individual is limited, but I believe that when we work together, we can achieve far greater things.

To steadily implement our Medium-term Management Plan 2027, which began in FY2025, we will work as one under the banner of "CITIZEN," guided by our corporate philosophy: "Loved by citizens, working for citizens."

Our Commitment to the Corporate Philosophy

True to its name, CITIZEN has placed its corporate philosophy-"Loved by citizens, working for citizens"-at the core of its management since its founding. This philosophy has consistently served as a guiding principle for the Group's sustained growth. Our roots lie in the B2C Watches Business, and the technologies we have developed there have driven our expansion into a wide range of B2B fields, including the Machine Tools and Devices and Components businesses. We believe that all of our businesses ultimately deliver end products that contribute to people's lives. Upon

assuming the role of president, I was reminded of the profound value of this philosophy. Going forward, we remain committed to embodying it by delivering highly reliable products and services that continue to earn the trust of our customers.

Review and Evaluation of the

Medium-term Management Plan 2024

Under the CITIZEN Group Vision 2030, which sets forth the goal of "Crafting a new tomorrow," the Medium-term Management Plan 2024 focused on building a solid foundation for growth through proactive investment.

In FY2024, the final year of the plan, we set numerical targets of 320.0 billion yen in net

sales, an operating profit margin of 8.0%, and an ROE of at least 8.0%. In the Watches Business, favorable exchange rates provided a tailwind. More importantly, however, improvements in product mix across regions led to higher unit sales prices. A strong performance in the North American and European markets also contributed to meeting our targets. The Machine Tools Business achieved its sales target in the first year. However, due to a cyclical slowdown in orders, sales and profit declined from FY2023 onward, and we ultimately fell short of our overall targets. In the Devices and Components Business, we were affected by the slowdown in the Chinese economy. As a result, consolidated net sales and the operating profit margin for the CITIZEN Group

The Medium-term Management Plan 2027, launched in FY2025, marks the second phase toward realizing the CITIZEN Group Vision 2030. Building on the growth foundation established during the first phase, we will pursue further growth and enhanced profitability to improve our corporate value.

In the Watches Business, the core segment for the Group's growth, we will focus on enhancing brand value to drive growth and improve profitability. We need to manufacture high-value-added products with greater emotional value. In the Machine Tools Business, we have enhanced the production system and are nearly prepared to leap forward. We will now implement key strategic initiatives centered on reinforcing sales capabilities and creating customer value, with a goal of achieving 100.0 billion yen in net sales during this medium-term period. In the Devices and Components Business, we need to press ahead with selection and concentration and allocate more resources to growth businesses to transform them into profitable businesses that will grow steadily.

As society undergoes rapid transformation, both organizations and individuals must enhance their resilience. By staying flexible and responding to change with sound judgment, we aim to achieve our FY2027 targets.

Sustainable Management

In response to a rapidly changing business environment, the CITIZEN Group has conducted a comprehensive review of the materiality assessment of social issues and identified five key material issues based on their significance and impact: (1) responding to climate change and contributing to a recycling-oriented society, (2) contributing to a better quality of life, (3) providing solutions in the industrial sector, (4) enhancing job satisfaction and developing human resources, and (5) fulfilling social responsibility. While these five material issues remain unchanged from the previous Medium-term Management Plan, we have updated our initiatives based on climate scenario analyses and evolving internal and external conditions.

We have defined products and services that help address social issues related to the first three material issues and support business

growth as sustainable products. We have also established a new target for their sales ratio as a percentage of the Group's consolidated net sales.

While delivering high-quality products is essential, we believe it is equally important to pursue responsible manufacturing practices that minimize environmental impact and respect human rights and labor conditions-and to ensure the continued implementation of these practices. We will continue to strengthen our efforts across the entire value chain.

The CITIZEN Group has also expressed support for the disclosure recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD),*1 and in April 2025, we registered as a TNFD Adopter.*2 Since March 2023, we have been participating in the TNFD Forum,*3 and we plan to begin nature-related disclosures aligned with the TNFD recommendations in FY2026.

Through our CITIZEN Group Biodiversity Vision, we recognize the critical roles that biodiversity and ecosystem services play, as well as the impact our business activities have on them. We are committed to conserving biodiversity in collaboration with local communities. By contributing to the development of the TNFD's disclosure framework and promoting appropriate disclosures related to natural capital, we aim to build stronger relationships with stakeholders-including shareholders and investors-while continuing to bolster our long-term corporate value.

*1 Taskforce on Nature-related Financial Disclosures (TNFD): An international initiative established to develop a framework for businesses to manage and disclose nature-related risks

*2 TNFD Adopter: A company or organization that has expressed its intention to adopt and disclose information in line with the TNFD recommendations

*3 TNFD Forum: An international group of stakeholders providing expertise and support to the TNFD initiative

Switched the dials of light-powered Eco-Drive watches to recycled polycarbonate made from 100% recycled materials

Donated accessible wristwatches to graduates of a school for the visually impaired in Thailand

Human Resources Strategy

As part of the previous Medium-term Management Plan, the CITIZEN Group articulated its Group Human Resources Vision 2030: "Each employee feels a sense of pride in working at CITIZEN as they contribute to the realization of its long-term vision." To achieve this vision, we are focusing on three key initiatives: enhancement of job satisfaction, development of human resources, and DEI (Diversity, Equity & Inclusion).

In terms of job satisfaction, our aim is to achieve sustainable corporate growth alongside employee well-being by strengthening engagement and advancing health and

productivity management. For human resource development, we are not only cultivating transformative leaders but also securing and nurturing talent essential for business continuity. To support this, we are standardizing talent and skill management systems across the Group to facilitate the transfer of knowledge and skills and to improve visibility into our human capital. In promoting the active participation of diverse human resources, we are advancing our DEI initiatives. As part of this effort, we are systematically developing and promoting female candidates for managerial positions.

As it becomes increasingly difficult to recruit talent, we recognize the importance of strengthening not only our compensation systems and work-life balance policies but also initiatives that make CITIZEN an attractive place to work. To this end, we aim to foster a greater sense of unity by encouraging communication within the Group-across all positions, age groups, and genders. Our goal is to nurture as many vibrant, inspiring employees as possible-those who are admired by their colleagues.

Digital Transformation Strategy

Under the new Medium-term Management Plan, we have set a clear policy of transforming our business processes to become more efficient and customer-centric by leveraging data and digital technologies. Key initiatives include standardizing design and driving process innovation through the use of 3D CAD data, as well as promoting the use of generative AI. We are also working to build a robust data management framework, foster digital talent, and utilize digital tools to facilitate the transfer of technological expertise and skills.

In the Watches Business, we are already seeing results in North America, where closer engagement with users has led to significant growth in direct-to-consumer e-commerce sales. Going forward, we will expand these successful initiatives to other regions to further drive sales.

Medium-term Management Plan 2027

Review of the Medium-term Management Plan 2024

Under the Medium-term Management Plan 2024, we formulated the CITIZEN Group Vision 2030 with the goals of "Crafting a new tomorrow" and laying the foundation for our growth by proactively investing to realize our vision. In the plan, we set quantifiable targets, including net sales of 320.0 billion yen, an operating profit margin of 8.0%, and an ROE of 8.0% or higher.

In FY2024, the final year of the plan, we achieved net sales of 316.8 billion yen and an operating profit margin of 6.5%, falling short of the targets. However, in the Watches Business, the product mix improved in all regions, leading to a steady increase of unit sales prices. As a result, we exceeded our Watches Business targets, 160.0 billion yen in net sales and a 9.0% operating profit margin, one year ahead of schedule. In the Machine Tools Business, although we were affected by a cyclical slowdown of orders, we steadily enhanced production capacity in preparation for the next phase of the recovery. Regarding ROE, thanks to our efforts to enhance shareholder returns and optimize the assets we hold, we have successfully met our ROE targets set in the Medium-term Management Plan for three consecutive years.

Results by Business

Machine Tools

The Medium-term Management Plan 2024 net sales target of

86.0 billion yen was reached early-in FY2022.

Both sales and profit declined starting FY2023 due to cyclical market fluctuations, but we steadily strengthened the foundation of our business by expanding production capacity.

14.2%

11.1%

7.6%

2022

2023

2024 (FY)

Watches

Net sales increased for the third consecutive year, supported by the continued growth of the North American and European markets and the recovery of the domestic market. The operating profit margin also remained at a high level exceeding 10%.

11.1%

11.9%

10.1%

150.0

2022

166.2

2023

177.1

2024 (FY)

Previous Medium-term Management Plans

Medium-term Management Vision

Aiming to be a Solid Global Company

-A business group with speed and dynamics

Innovation for the next Sense the Time and Create an

Impression for the Future

CITIZEN Group Vision 2030 Crafting a new tomorrow

400

350

300

250

200

150

100

50

0

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

(FY)

10

7.6%

8.5%

8.7%

6.9%

7.8%

7.0%

7.9%

7.9%

8.0%

6.5%

2.2%

309.9 328.4 348.2 312.5 320.0 321.6

278.5

206.6

281.4

301.3 312.8 316.8

(4.6%)

8

6

4

2

0

（2）

（4）

（6）

Review of Key Measures by Business

Devices and Components

The business struggled due to the impact of the Chinese economy and sluggish demand in the automotive parts market. However, efforts were made to improve profitability.

1.1%

1.2%

(1.8%)

2022

4

2023

4

2024 (FY)

Electronics and Other Products

Although the healthcare business was sluggish due to adverse exchange rates and weak sales, the performance of the photo printer business was strong as it was backed by robust demand, and it contributed to overall profitability.

5.6%

7.1%

11.1%

20.4

2022

22.5

2023

24.9

2024 (FY)

Net sales (billion yen)

Operating profit margin

. Laying the foundation for growth through thorough structural reforms and the strengthening of the

. organization

.

.

Proactively investing to drive the growth of performance

of the Group's growth

Developing the Machine Tools Business into a second key pillar, following the Watches Business

Repositioning the Watches Business as the core engine

. Achieving growth again in the Watches

.

Business

. Machine Tools Business

Further accelerating the growth of the

.

Advancing digital transformation

(SDGs)

Promoting sustainable management

. Positioning t he Watches and Machine Tools businesses as the Group's core growth drivers and pursuing the continued expansion

.

of the businesses

E x plori ng and launchi ng new business in domains with growth potential

Strategies

Watches Business: Improve profitability and achieve sustainable growth

Net sales (billion yen)

Operating profit margin (%)

Machine Tools Business: Achieve further growth

* ROE = Profit attributable to owners of parent / Equity capital (average of amounts at beginning and end of fiscal year)

Introduction

Management Strategies for Enhancing Corporate Value

Medium-term Management Plan 2027

Business Strategies

Sustainability Strategy

Strengthening the Management Foundation

Corporate Data

Medium-term Management Plan 2027 FY2025-FY2027

Positioning of the CITIZEN Group Vision 2030 and the Medium-term Management Plan 2027

The CITIZEN Group has formulated CITIZEN Group Vision 2030 as the Group's long-term vision reflecting various future environmental changes that are predicted to occur down the road. The Medium-term Management Plan 2027 builds on the growth foundation established during the three years of the Medium-term Management Plan 2024, and its goals are the continued growth and development of each business and the enhancement of overall profitability.

Toward realization of Group Vision 2030

Medium-term Management Plan 2030

Medium-term Management Plan 2027

Corporate Philosophy

Loved by citizens, working for citizens

CITIZEN Group Vision 2030

Crafting a new tomorrow

Medium-term Management Plan 2024

We will build on the growth foundations we have laid to achieve further growth and development and increase our earning capacity.

Group Values

We will actively invest to improve business profitability and strengthen our capabilities, and lay the foundations for growth for the next Medium-term Management Plan.

Sustainable growth

Through sustainable business activities, we will achieve both economic value and social value and fulfill our responsibilities to stakeholders.

New challenges

In changing times, we will stay ahead of the curve by taking on new challenges.

Improving quality

and empathizing

We will empathize with each individual's wish for a better future and will individually improve the quality of the work we do and pursue initiatives that create a better tomorrow.

Connecting and

being connected

We will cooperate with players within the Group and also build relationships through which we will contribute to society in the long term.

Responsibility,

pride and joy

We will go about our day-to-day work responsibly and with a sense of pride. We will find joy in our work by helping the people we deal with.

Materiality

* EcoBalance Machine: A selection of machine tools that meet our company's internal standards and are part of our environmentally friendly product and technology product group, launched in FY2024

Numerical Targets for FY2027

Business Portfolio

Net Sales 360.0 billion yen

Operating profit margin 9.0 %

ROE* 9.0 % or higher

CITIZEN Group Basic Policy

* ROE = Profit attributable to owners of parent / Equity capital (average of amounts at beginning and end of fiscal year)

Net sales (billion yen)

9.0%

7.9%

7.9%

8.0%

6.5%

278.5

206.6

(4.6%)

316.8

360.0

2.2%

Operating profit margin

With the Watches Business and the Machine Tools Business positioned as the Group's core businesses, we aim for further growth and development while also focusing on improving profit margins and capital efficiency and achieving sustainable improvement in corporate value.

Drive business growth and enhance profitability by elevating the value of our brands.

2019 2020 2021 2022 2023 2024 ••••

2027

••••

2030

Devices and Components

billion yen

70.0

FY2027

Net sales target

Machine Tools

360.0

billion yen

Watches

190.0

billion yen

billion yen

100.0

Demonstrate the true value of "manufacturing and sales innovation" and drive the sales expansion and customer development in the global market, aiming to achieve net sales target of 100 billion yen.

Develop into steadily expanding, highly profitably business through implementation of product selection and concentration strategy and increased investment of resources in growth businesses.

(FY)

Impact of COVID-19 from Q4 of FY2019 Actively invest to improve business

profitability and strengthen our capabilities, and lay the foundations for growth

Build on the growth foundations we have laid to achieve further growth and development and increase our earning capacity

Maximize business growth and corporate value and realize CITIZEN Group Vision 2030

• Management and Financial Strategy

Strategically investing to drive the increase of

corporate value

Senior Managing Director

Toshiyuki Furukawa

Shareholder Return Policy

In the Medium-term Management Plan 2027, we have introduced a new indicator for dividends: dividend on equity (DOE).* Targeting a DOE of 5.0% or higher, we aim to consistently provide stable dividends, taking into account our history of paying dividends. We will consider the flexible acquisition of treasury stock, taking into account a range of factors, including our business performance, capital structure, investment plans, and overall market conditions, including stock prices.

We will also continue to manage our balance sheet appropriately, with a clear focus on the cost of capital.

For FY2025, we forecast our annual dividend to be 47 yen per share, an increase of 2 yen from the previous year. This is based on a comprehensive assessment of our stability and the performance of our businesses.

* DOE = Total amount of dividends / Shareholders' equity (average of amounts at beginning and end of fiscal year)

Annual Dividend per Share and DOE

Annual dividend per share (yen) DOE (%)

4.7%

40

45

50 5.2% 5.6% 6

40 5

30 4

3

20 2

10 1

0 2022 2023 2024 2025 0

(Forecast) (FY)

Financial Strategy

At our overseas subsidiaries, we are working

Numerical Targets for the Medium-term Management Plan 2027

Capital Policy under the Medium-term Management Plan 2027

to build a cash management system. By controlling the funds of overseas subsidiaries at the head office, we are working to make effective use of the funds by our overseas subsidiaries, improve capital efficiency within the CITIZEN Group, and consolidate funds at the head office.

We are also continuing to reduce our cross-shareholdings and will continue working

9.0%

7.9%

8.0%

6.5%

301.3

312.8

316.8

360.0

Net sales (billion yen)

Operating profit margin

Continuing from the previous Medium-term Management Plan 2024, we will position the Watches and Machine Tools businesses as the Group's core growth drivers. By strategically allocating resources to these areas, we aim to further accelerate growth.

In terms of cash allocation, we plan to invest a total of 80.0 billion yen in growth and rationalization during the three-year period

and increase the added value of our entire product lineup. Through these efforts, we will continue to invest in growth to enhance our brand value while also pursuing rationalization investments to reinforce profitability. In the Machine Tools Business, we will build on the production infrastructure established under the

Cash Allocation

previous plan while focusing our investments on the enhancement of sales networks, the development of next-generation models, and upgrading systems to improve operational processes. We will also invest in the creation of data-driven user value and advancing the digital transformation (DX) of manufacturing.

actively to reduce them.

FY2024 Results and FY2025 Outlook

2022 2023 2024

2027 2030

(FY)

from FY2025 to FY2027, exceeding the amount invested during the previous plan. These

investments will be focused primarily in three

Total amounts in the three years from FY2025 to FY2027

Optimization of assets owned

Operating cash flow

95.0 billion yen

Creation of operating profit

Maintenance of inventories at a reasonable level

Cash inflow Cash outflow

In FY2024, consolidated net sales exceeded expectations, although operating profit fell

and an ROE of at least 9.0% or more in FY2027. Regarding ROE, we recognize the importance

areas: the Watches Business, the Machine Tools Business, and digital transformation (DX). As with the previous plan, we expect to allocate more than 70% of the total amount we are investing to the core businesses. However, as our investment of capital in the Machine Tools Business, mainly to enhance production capacity, was largely completed in the past three years during the previous Medium-term Management Plan, in and after FY2025 we will shift our focus to intensifying our investment in the Watches Business.

In the Watches Business, we will advance our global strategy, strengthen initiatives in the North American market (our largest market)

Level will exceed the Medium-term

Management Plan 2024 level due to generation of operating profit through growth of Watches and Machine Tools businesses and improvement in profitability of Devices and Components Business.

Steadily executing measures centered on reduction of cross-shareholdings.

Policy of investment for growth and rationalization

Investment for growth and rationalization

80.0 billion yen

Shareholder returns

35.0 billion yen or more

More than 70% of investment is investment in core businesses (Watches and Machine Tools)

Watches Business…Expansion of production capacity and improvement of productivity for mechanical watches, renewal of outdated manufacturing lines, and distribution investment to strengthen market presence (stores and e-commerce)

Machine Tool Business…Investment in sales bases especially in India, sales expansion of Miyano brand, development of next-generation models, work flow improvement, and effective system operation

DX investment…Promotion of manufacturing DX, labor-saving and automation in manufacturing processes and indirect operations

Shareholder return policy

Aim for a dividend on equity ratio (DOE) of 5.0% or higher. Emphasis on continued payment of stable dividends, taking previous dividends into consideration.

Acquisition of treasury stock to be judged flexibly depending on the situation, taking into account business performance, capital composition, investment plan, stock price, and other market conditions.

short of the target. In the Watches Business, an improved product mix across regions led to higher unit sales prices. Although impacted by a cyclical decline in orders, the Machine Tools Business steadily expanded its production capacity in preparation for a full recovery. Thanks to initiatives, including shareholder return initiatives and initiatives to optimize our asset portfolio, we achieved an ROE exceeding 8.0% for the third consecutive year, meeting the target set in the Medium-term Management Plan 2024.

Under the Medium-term Management Plan 2027, we aim to achieve net sales of 360.0 billion yen, an operating profit margin of 9.0%,

of maintaining an ROE of 9.0% or higher on an ongoing basis to consistently exceed our cost of capital, even amid changing conditions.

In FY2025, we are operating in an environment of heightened uncertainty due to U.S. tariff policies and exchange rate fluctuations. Although we forecast a slight decline in the Group's overall consolidated profit in FY2025, sales and profit are expected to grow in our core businesses, Watches and Machine Tools. We will remain focused on executing the strategies set forth in the Medium-term Management Plan 2027 and will continue to promote our continued growth and profitability.

Business Results (Operating Profit / ROE)

Operating profit (billion yen) ROE (%)

30 9.6% 9.7% 9.5% 10

20.0

25

20

15 5

10

5

0 2025 0

(Forecast) (FY)

Develop movements for the realization of high-value-added products.

Further step up initiatives in the North American market.

Enhance value provided by brands through global strategy.

Key Strategies

190.0 billion yen

12.0 %

Operating profit margin

Net sales

Drive business growth and enhance profitability by elevating the value of our brands.

FY2027 Financial Targets

Policy in the Medium-term Management Plan

Business Strategies

• Watches

As a world-class manufacturer, we deliver the timeless value of

watches and craft a new tomorrow.

President and CEO

Yoshitaka Oji

Key Strategy: Enhance value provided by brands through global strategy.

Review of the Medium-term Management Plan 2024

In the final year of the Medium-term Management Plan 2024, the targets of the Watches Business were net sales of 160.0 billion yen, operating profit of 14.5 billion yen, and an operating profit margin of 9.0%. Over the three-year period beginning in FY2022, we steadily improved our product mix across all regions, resulting in higher unit sales prices. This enabled us to achieve our targets in and after FY2023. We achieved continued growth in North America and Europe, and the recovery of the domestic market also contributed to three consecutive years of sales growth. The operating profit margin

increased domestic points of sale for The CITIZEN and began the global expansion of Series 8 with launches in Europe and North America.

Medium-Term Management Plan 2027

Launched in FY2025, the Medium-term Management Plan 2027 outlines a strategic direction: Drive business growth and enhance profitability by elevating the value of our brands. The plan sets financial targets of net sales of 190.0 billion yen and an operating profit margin of 12.0% in FY2027. The watches market is expected to continue growing

Forecast Trends in the Watch Market

modestly, with shipping quantity declining gradually but shipment value increasing due to rising unit prices reflecting a higher ratio of mechanical watches. Based on this outlook, we have defined three key strategies and are committed to their steady implementation.

One of our core strengths lies in our portfolio of brands, CITIZEN, BULOVA, and FREDERIQUE

CONSTANT, which are rooted in Japan, the United States, and Europe, respectively, and in our ability to develop and manufacture movements in both Japan and Switzerland. In addition to expanding sales, we will focus on generating synergies throughout our manufacturing operations.

Under the new Medium-term Management Plan, we will leverage our sub-brands to further accelerate enhancement of value provided by the CITIZEN brand. We will expand sales of PROMASTER, CITIZEN L, and Series 8 watches through continued implementation of our global strategy.

We plan to start the global rollout of ATTESA from FY2025 and The CITIZEN in FY2027. We aim to increase the percentage of total CITIZEN brand

Already driving growth globally as a professional sports watch brand.

sales that are sales of global sub-brands from just above 20% in FY2024 to a target of 35% by FY2027, thereby enhancing the CITIZEN brand image and expanding total sales.

By clarifying the role of each of our five sub-brands, we will improve our product mix and increase added value, thereby driving up average unit prices and promoting the sustained growth of sales. PROMASTER and CITIZEN L will continue to focus on increasing

Commenced full-scale global launch from FY2023 as sustainable ladies watch brand.

unit sales prices within our core strength price range of $400 to $1,500. ATTESA and Series 8 will aim to capture market share in the

$1,500 to $3,000 range-a segment that has emerged as a gap in the market due to Swiss brands increasing their prices. Meanwhile, The CITIZEN will continue to cultivate its brand identity as the pinnacle of the CITIZEN brand over the medium to long term.

Launched in Europe in 2023 and in North America in 2024, as part of the global launch implemented.

remained above the 10% threshold throughout the period.

Source: Estimates of CITIZEN based on Hong Kong trade statistics and data of the Federation of the Swiss Watch Industry

(million US$) (US$)

Looking back on our key initiatives, the global brand strategy drove the steady growth of the sales of our global sub-brands, PROMASTER and CITIZEN L, contributing to higher unit sales prices. Recognizing the need to further increase the percentage of total sales that are sales from global sub-brands, we will continue to drive the expansion of their sales under the new Medium-term Management Plan. Under the premium brands and mechanical watches strategy, we

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

2019 2020 2021 2022 2023 2024 2025 2026 2027

CITIZEN's forecast

2030

500

450

400

350

300

250

200

150

100

50

0

Switzerland mechanical

Switzerland Analog quartz

Mechanical (non-Swiss)

Analog quartz (non-Swiss)

Average unit price (US$)

Pushing ahead with the global rollout of the ATTESA brand, previously exclusively available in Japan.

Expand sales in overseas markets mainly through direct distribution channels as well as increased handling by jewelry chains and other retailers.

Aiming to commence a global rollout of The CITIZEN brand, previously available in Japan only, in 2027 during the period of the Medium-term Management Plan 2027.

Expand through our flagship store in North America.

Key Strategy: Further step up initiatives in the North American market.

In North America, which is our largest market, we will add the FREDERIQUE CONSTANT brand to our CITIZEN and BULOVA brands, and expand the D2C channel. In FY2024, we positioned our growing direct-to-consumer (D2C) channels e-commerce platform as a digital flagship store. Designed to deliver a premium user experience, communicate brand value, and achieve high profitability, the platform continues to play a key role in driving the expansion of our business.

Founded in New York in 1875, BULOVA celebrates its 150th anniversary in 2025. We plan to capitalize on this milestone through media

engagement and the launch of limited-edition models, further enhancing brand value. On the product front, through expansion of our lineup of mechanical watches, we will enhance added value and aim to become a top brand in the $1,000-$2,000 price range, which is a step up from the previous price range. In addition to reinforcing our strong brand presence in North America, we are working to elevate our image in Latin America. By renewing our partnership with the Latin Grammy Awards and pursuing other regional initiatives, we aim to expand our market share in the broader Americas.

Key Strategy: Develop movements for the realization of high-value-added products.

We will use Japanese and Swiss development and production technologies to develop high-end mechanical movements for The CITIZEN and upgrade our product lineup. Furthermore, in addition to Series 8, PROMASTER will increasingly focus on mechanical models, and movements made by La Joux-Perret will be featured in FREDERIQUE CONSTANT watches. The goal of these efforts to innovate in the area of movements is to enhance the overall value of our finished products.

Multi-brand Expansion

"Manufacture La Joux-Perret," a movement manufacturing company based in La Chaux- de- Fonds, Switzerland, produces a wide range of products, from simple mechanical movements such as manual and automatic winding to complicated ones like tourbillons. They supply these high-quality movements to both internal brands within the Group as well as external brands.

BULOVA was founded by Joseph Bulova in New York in 1875. With its advanced technological capabilities, the brand has long been a leader in the watch market. Over the years, BULOVA has created many world firsts, including the world's first tuning fork watch.

In 1988, "FREDERIQUE CONSTANT" was

established in Geneva, Switzerland. Founded on the mission of providing classical Swiss-made luxury watches at fair prices.

ARNOLD & SON bears the name of John Arnold, an English watchmaker who made a name for himself in the 18th century. Inspired by his work, the brand continues to create watches using traditional watchmaking techniques.

19 20

ATTESA: A Titanium Watch Symbolizing CITIZEN's Technology

ATTESA takes its name from the Italian word meaning anticipation or expectation.

Since its debut in 1987, this next-generation timepiece brand has embodied CITIZEN's titanium-processing expertise, and it has continued to evolve through the incorporation of world-first innovations that live up to its name. Originally a local brand for the Japanese market, the global rollout of ATTESA will begin in FY2025.

With more than 35 years of history, the brand remains committed to

innovation as it steps into a new era.

1. Super Titanium™ - Incredibly light and highly resistant to rust

What materials are best suited for watches that are worn every day? In 1970, when titanium was gaining attention as a space-grade material, CITIZEN launched the world's first titanium-cased wristwatch.

Through years of refinement, we developed Super Titanium™, a proprietary material that is highly resistant to scratches, lightweight, gentle on the skin, and rustproof.

ATTESA also offers models treated with Duratect DLC, marketed as the Black Titanium™ Series. Duratect DLC is known for its versatile tone, which is suitable for both formal and casual wear.

2. Eco-Drive - Runs continuously on any light source

Eco-Drive is CITIZEN's proprietary technology that converts sunlight and even the faintest indoor light into energy to keep the watch running.

It requires no regular battery replacement and can run for more than six months on a single full charge.

CITIZEN launched the world's first light-powered analog watch in 1976. It has since led the way in this field, pioneering new possibilities.

3. Satellite Wave GPS - Precise time, wherever you are

No matter where you are on Earth or how far you travel, as long as there is open sky above, ATTESA quickly receives signals from GPS satellites.

There's no need to manually adjust the time.

Satellite Wave GPS receives location and time data from GPS satellites orbiting 20,000 kilometers above the Earth and automatically updates the watch's time and calendar. When outdoors with minimal obstructions, such as buildings or trees, simply point the dial toward the sky to adjust the watch to the correct time.

ATTESA Special Website:

https://citizen.jp/attesa/special/index.html

Expand market share through creation of customer value.

Implement global sales strategy for the Miyano brand

(medium and large machines).

Key Strategies

Implement region-specific strategy for net sales of 100 billion yen.

100.0 billion yen

15.0 %

Operating profit margin

Net sales

Demonstrate real value of "manufacturing and sales innovation", for achievement of net sales of 100 billion yen

FY2027 Financial Targets

Policy in the Medium-term Management Plan

• Machine Tools

We strive to be a trusted partner that grows together

with our customers.

Senior Operating Officer

Hideo Ina

Key Strategy: Implement region-specific strategies for net sales of 100.0 billion yen

Review of the Medium-term Management Plan 2024

The three years of the Medium-term Management Plan 2024 were defined by a focus on laying a solid business foundation through proactive capital investment, in line with our stated policy of achieving further growth. In FY2022, the first year of the plan, we achieved record-high sales, which were driven by strong order volume. However, beginning in FY2023, the business faced headwinds as orders began to decline due to cyclical market fluctuations. While we had initially anticipated that orders would fully recover by the latter half of FY2024, the persistent uncertainty of the market has meant its rebound has been more delayed than expected. We recognize that the market conditions have remained challenging.

as of FY2023 was 40% greater than in FY2021. We also enhanced our service and engineering capabilities, most notably through the establishment of the Global Training Center. This contributed to the development of a robust business foundation supporting the achievement of our goals.

Medium-term Management Plan 2027

The machine tools market is highly sensitive to economic cycles. Looking toward 2030, we expect the trend in the market to be one of moderate long-term growth, despite short-term fluctuations. At the same time, the global manufacturing industry is facing a labor shortage and the aging of its workforce. This has led to increasing demand for automation and labor-saving technologies in many

industries, including the automotive sector. This creates a favorable environment for our business. However, the number of new players in the market, in India and China, for example, are growing rapidly. To compete not on price but on the value we provide, we must continue to enhance the performance of our products and our competitiveness.

In the Medium-term Management Plan 2027, we set financial targets of net sales of 100.0 billion yen and an operating profit margin of 15.0% for FY2027. Building on the robust business foundation established under the previous plan, we will now implement key strategic initiatives centered on reinforcing our sales capabilities and creating customer value-fully leveraging our manufacturing and innovative sales methods to achieve our targets.

To achieve our FY2027 target, we will focus on five core regions-Europe, the Americas, Asia, China, and Japan-clarifying our region-specific strategies to drive the expansion of sales.

In Europe, we will strengthen sales not only in existing markets but also in emerging areas, such as Eastern Europe. In the Americas, we aim to meet the needs of local customers quickly by enhancing our ability to develop peripheral equipment and reinforcing our distributor network. In Asia, where it is

Sales by Region

100.0+ α

100.0

81.0

86.1

81.6

74.3

58.5

46.7

120

100

80

60

40

20

0

expected that growth will accelerate, we will proactively invest in sales bases and related infrastructure. In India, a market with particularly strong growth potential, we will rapidly develop our sales infrastructure, including the establishment of a local subsidiary. Similarly in China, we will reinforce our sales structure to support the growth of sales. In Japan, we will revisit and refine our target segments to capitalize on the strengths of our proprietary technologies and products, aiming to increase differentiation and the

strength of our promotional initiatives. To mitigate the impact of economic fluctuations, we will also pursue the development of new markets.

We believe that the keys to achieving net sales of 100.0 billion are the strengthening of our sales capabilities and the maintenance of the speed and agility of our execution of business. Building on the business foundation established under the previous Medium-term Management Plan, we will continue to execute our regional strategies and expand sales.

(billion yen)

Despite this prolonged stagnation, we worked to strengthen both our manufacturing and sales capabilities to ensure that we are fully prepared to capture the next upturn in demand, keeping our sales target of 100.0 billion yen in sight. On the manufacturing front in particular, we carried out major expansions of our capacity. We relocated and expanded our factory in China, increased the floor space of our factory in Thailand, built a new building at our Karuizawa Headquarters factory, and expanded our

Machine Tools Market Forecast

2,500

1,759

1,541

1,486 1,500

1,750

Europe

1,229

Americas

Asia

901

China

Japan

2,000

1,500

1,000

500

(billion yen)

2,000

2019

2020

2021

2022

2023

2024

2027

Target

2030

(FY)

Kitakami site. As a result, production capacity

0

2019

2020

2021

2022

2023

2024

2027

Estimate

2030

Estimate

(FY)

Precision Machining Plant, Karuizawa Headquarters Factory

Thai Factory China Factory

21 22

Key Strategy: Implement a global sales strategy for the Miyano brand.

CITIZEN provides two brands of CNC automatic lathes. Cincom is known for its strengths in the area of small-diameter, long-part machining, and Miyano excels in the area of medium-diameter, short-part machining. We supply highly reliable and durable machines to industries, including the automotive component, construction machinery, and hydraulic and pneumatic instrument industries, and we have earned a strong reputation in both Japan and Europe. Under the new Medium-term Management Plan, we aim to increase a broader range of customers' awareness of Miyano's strengths by implementing a global sales strategy.

In Japan, we aim to provide comprehensive solutions that address customers' automation and labor efficiency needs by strengthening our promotion of not only Miyano's large machines but also chucking machines and peripheral equipment. In Europe, we will increase our focus on expanding into non-automotive sectors, including aviation and watchmaking. In the United States, where sales are currently led by Cincom models, we will build and strengthen a locally driven sales network as we move toward 2030. In China, we plan to enhance our technical support for distributors and our showroom functions. In other emerging markets, we will introduce entry-level models to allow more customers to experience the strengths of the Miyano brand.

Global Sales Target of Miyano

25.0

22.7

18.7

20.8

18.5

35

30

25

20

15

10

5

0

Miyano ABX Series: Fixed Headstock Type CNC Automatic Lathe

The highly efficient and productive flagship model of the Miyano brand is equipped with twin spindles for simultaneous front and back

(billion yen)

2021

2022

2023

2024

2027

Target

2030

(FY)

machining and up to three turrets. Completely redesigned, four new models in this series of products were launched in October 2024, including a model that is capable of machining bars with diameters up to 80 mm.

Key Strategy: Expand market share through creation of customer value.

In our customers' manufacturing workflows, there are many processes both upstream and downstream of component machining. Rather than simply supplying machine tools, our goal is to provide products and services that support their entire production flow, providing new value and promoting the innovation of manufacturing workflows.

We work together with customers to address their operational challenges leveraging the products we offer, such as our FA Friendly robotic systems that support factory automation, the alkapplysolution solution service leveraging the latest ICT technologies, and our core strength, our low-frequency vibration cutting (LFV) technology. LFV, CITIZEN's proprietary control technology, is able to break apart chips during machining, enabling around-the-clock unstaffed operations when implemented in equipped machines and contributing significantly to the automation of customer facilities and labor efficiency. Under the new Medium-term Management Plan, our target is for 32% of all units shipped to be LFV-equipped machines, and we will continue our efforts to increase this percentage.

Looking ahead, we are also exploring the use of AI technologies in the development of next-generation models while promoting the creation of environmentally conscious, sustainable products under the EcoBalance Machine brand. We recognize that, beyond the scope of the new plan, it will be necessary to continually advance technology in line with the needs of the market.

Customer Statement

I Am Truly Impressed by This Outstanding Technology!

I first learned about LFV technology at a trade show promotional event. At the time, I honestly thought, can it really do that? We had just taken on a copper machining job, but no matter how we adjusted the conditions, the chips kept getting tangled up. It was completely unmanageable.

That's when I remembered LFV technology and decided to try a

Cincom machine. As soon as I started using it, I was blown away. I

had no idea something this amazing existed! Up to that point, we could only manage about 12 hours of operation at a time, but with LFV, it just keeps cutting smoothly even after 24 hours. It felt like I was machining brass, not copper. I was genuinely impressed!

Conventional chips

Chips broken into pieces with the LFV technology

23 24

INNOVATION FOR WORK FLOW

CITIZEN's Machine Tools Business aims for a sustainable society by innovating manufacturing workflows with an eye not only on issues our customers currently have but also on challenges they will face in the future. With the "Cincom" and "Miyano" brands at the core, we provide total solutions that revolutionize our customers' workflows through the use of our proprietary technologies such as LFV (low-frequency vibration cutting), the "FA Friendly" robot system,

and the ICT technology-based "alkapplysolution."

Advanced technological development for optimized parts machining proposals

Cincom is a sliding headstock type CNC automatic lathe that excels in high-precision, high-speed machining and has an established reputation for ease of use. We continue to provide highly operable automatic lathes that incorporate state-of-the-art control technology with the small-diameter, high-precision machining technology and miniaturization technology we have cultivated through our experience in watch component manufacturing.

Globally praised for its "strength"

Miyano's flagship product is its highly rigid fixed headstock type CNC automatic lathe, which has earned high praise from customers around the world for the "strength" it offers. We continue to respond effectively to diverse manufacturing needs by providing reliable and durable machines for our customers' production lines, primarily in the fields of automotive parts, construction equipment, and hydraulic and pneumatic instruments.

Advanced technological development for optimized parts machining proposals

We provide products that aid automation at our customers' plants, such as machines, devices, and functions to promote automation and reduce labor, with a focus on on-cart and on-machine robot systems.

A new era of machining technology with further improvements in productivity

We developed LFV (low-frequency vibration cutting) technology to solve problems caused by the chips that are unavoidably produced during turning. Our ongoing research and development will continue to provide machining technologies that help our customers further improve productivity.

Total solutions using the latest network technology and our wealth of machining technology

alkapplysolution is a manufacturing solution service that utilizes ICT technology. It provides an array of services that include technician training and skill improvement, tools to manage production operation information, and more.

• Devices and Components

  The Devices and Components Business applies CITIZEN's core miniaturization, precision processing, and low power consumption technologies that were cultivated in watch manufacturing to provide a wide range of components and products that support society and people's everyday lives. Under the Medium-term Management Plan 2027, we integrated the former Devices and Components Business into the Electronics and Other Products Business to form the new consolidated Devices and Components Business. In the new plan, we have identified four product categories that will be growth drivers and we will strategically allocate resources to generate profit.

  Renowned for its advanced precise metal part machining technologies, CITIZEN supplies functional automotive components to manufacturers around the world. We pursue medium-term growth by developing new products related to electric vehicles (EVs). Small motors are essential components in home appliances, medical devices, and other equipment. We are working to expand our product lineup to capture new projects and enter new markets, aiming to secure a global leadership position in our niche and maintain a highly profitable business structure. We have established an integrated ceramic component production system that includes all of the stages of production from raw material formulation and granulation to molding, firing, and processing. We are working to enhance the performance of products and promote labor-reducing initiatives while expanding sales by entering the submount market and increasing competitiveness by increasing productivity. We position photo printers as a key growth product and are working to ensure stable profitability while making forward-looking investments for the future by providing high-quality high-performance models. In a business environment that demands constant evolution, and where people are seeking stable, healthy, and peaceful lives, our Devices and Components Business remains closely attuned to the needs of people and society. We are pursuing new value and greater convenience through its products.

  CITIZEN's device and component products are used in a wide range of everyday applications.

  
  
  

  Automotive components

  Brake components
  
  
  Engine components
  
  
  Suspension components
  
  

  Small motors

  
  
  

  Production equipment

  Inspection systems

  Barcode printers

  Projectors

  Sample analysis Medical devices

  Thermometers

  Blood pressure monitors

  Streetlights Stadium lighting

  Home appliances

  Photo printers POS printers

  Smartphones

  Wrist watches

  Automobiles Motorcycles

  
  
  
  Electronic locks, production equipment, inspection systems
  
  
  Radiation therapy devices,
  
  

  dental anesthesia systems, medical pumps

  Logistics
  
  
  Home appliances
  
  
  
  
  

  Ceramics

  Sample holding plates for analytical instruments
  
  
  Thin-film submounts (used in home appliances, lighting equipment, and automobiles)
  
  
  Jewel bearings
  
  

  (used in smartphones and wristwatches)

  Printers

  
  
  
  Photo printers
  
  
  POS printers
  
  
  Barcode printers
  
  

  Key strategies

  Expand sales of new EV-related products and products in existing domains such as engines and brakes.

  Further strengthen competitiveness of submount products for optical communication, etc.

  Gain high levels of customer satisfaction through technologies and quality that meet market needs.

  Generate stable profit chiefly from photo printers and continue to invest for the future.

  Printers

Sustainability Strategy

Sustainable Management

Sustainability

https://www.citizen.co.jp/global/sustainability/index.html

Identification of the Materiality

To continue being a company that is needed and loved by people all over the world, the CITIZEN Group must not only deliver products and services that respond to the changes in society but also ensure that the procurement and production processes behind the products and services and the Company's underlying attitude are aligned with the expectations of society. We believe that sustainable management involves more than simply providing good products and services. It means earning the trust of stakeholders by addressing social issues through our business operations, such as issues related to human rights and the global environment. By doing so, we will drive the growth of our business and enhance our corporate value. This is what sustainable management means for the CITIZEN Group.

Materiality (Key issues)

The CITIZEN Group has identified five material issues that are essential to both its business activities and management foundation. We aim to realize both sustainable products and sustainable factories as a result of our sustainability initiatives.

Solving social issues through business

Contributing to better quality of life

• Contribution to diverse lifestyles

• Contribution to medical care and healthcare

Providing solutions in the industrial sector

• Provision of labor-saving and automation solutions

• Contribution to mobility

Responding to

climate change and services that help reduce

Provision of products and

contributing to a recycling-oriented society

environmental impact

Reduction of the

en

vironmental impact of

the value chain

Enhancing job satisfaction and developing human resources

• Improved job satisfaction

• Human capital development

• Diversity, equity, and inclusion

Fulfilling social responsibility

• Strengthening of risk management

• Enhancing of quality compliance

• Respecting for human rights and labor practices

• Promoting of sustainable procurement

Strengthening the management base / Solving social issues through business processes

Input

Financial capital

Intellectual capital

Manufacturing capital

Social capital

Human capital

Natural capital

Output

Sustainable Products*

Sales ratio in FY2027:

30% or more

Sustainable Factories*

To be achieved throughout CITIZEN Group by FY2030

Structure for Promoting Sustainable Management

In April 2020, the CITIZEN Group established the Sustainability Committee, which is chaired by the President and CEO of Citizen Watch and is composed of the Company's full-time directors and the presidents of major domestic Group companies. The committee meets quarterly to deliberate material issues, monitor the progress of subcommittees, and host study sessions with external experts. A summary of the committee's activities is reported to the Board of Directors on a semiannual basis.

Sustainability promotion organizations at each operating company

Materiality (Key issues)

Sustainability Promotion Structure

Positioning of the CITIZEN Group Vision 2030 and Materiality

Draw up a vision of how The CITIZEN Group could be

(CITIZEN Group Vision 2030) from a long-term perspective and redefine materiality* using the backcasting method.

* Key issues for improvement of sustainable corporate value

Responding to climate change and

contributing to a recycling-oriented society

Corporate Philosophy

"Loved by citizens, working for citizens"

Contributing to better quality of life

Providing solutions in the industrial sector

Enhancing job satisfaction and developing human resources

CITIZEN Group Vision 2030

"Crafting a new tomorrow"

Fulfilling social responsibility

Medium-term Management Plan 2027

2022

Identify management issues from a medium-term perspective and develop business strategies in a medium-term management plan.

KPIs and Targets by Materiality

*Sustainable products: Products and services that contribute to business growth while helping solve social issues linked to the CITIZEN Group's materiality.

A sustainable factory: A sustainable production facility or business site with operational processes that are designed in comprehensive consideration of human rights, the environment, labor practices, compliance, business continuity planning (BCP), and productivity improvement throughout the entire supply chain.

Sustainable Products

Sustainable Products are products and services that contribute to business growth by contributing to the resolution of social issues linked to the CITIZEN Group's materiality. The CITIZEN Group has set the target of raising the proportion of sustainable products to 30% or more of total consolidated sales by FY2027.

Group Consolidated Sales and Sustainable Products Sales Ratio

CITIZEN L, a Brand Embodying Our Commitment to Sustainability and Manufacturing

What added value must globally appealing beautiful watches have?

Planning Section 2,

Product Planning Department, Product Planning Center

Kana Maeda

She joined the Company in 2003. After working as a designer for overseas and other in-house brands, she was transferred to the Product Planning Department. She has been in charge of planning for the CITIZEN L since 2014.

In 2012, the CITIZEN L brand was launched in the hope of creating women's watches that appeal worldwide. Discussions between product planners and designers reached the conclusion that we should create beautiful watches with appeal that transcends national borders and nationalities. The keyword was "nature." In 2013, we launched the first

Sustainable Products Certification Criteria

50

0

2023

2024 2027

(Target)

5

0

(FY)

CITIZEN L products that represented wabi-sabi natural beauty, but unfortunately the public reaction to them was weaker than expected. I thought that the watches had to have some additional value. One day, our team was having discussions about what the CITIZEN L should be like. When we shared with each other ideas on who would be vivid examples of beautiful persons, several people mentioned Princess

the brand would reach perfection by focusing on "inner beauty." However, watches themselves could not be engaged in social

The certification criteria are structured around contributing factors associated with the Group's materiality. To qualify, a product or service must address at least one of the three materiality related to business activities. In establishing the criteria, alignment with the Group's business strategy and the product's or service's uniqueness or competitive advantages were also considered. Incorporating input from external experts, these standards were formulated through discussions within the Sustainability Committee and finalized by approval of the Group Management Committee in 2023.

Certification Criteria

Examples of Sustainable Products

Watches Watches Watches Watches Watches

Diana and Audrey Hepburn, both of whom were dedicated to social contribution activities. That was a great inspiration to me. I realized that

Gears meshed together perfectly, driving us to find the seeds of "inner beauty"

One day, I saw a staff member of the CSR Department next to the Product Planning Department wearing a UN T-shirt. I was a Girl Scout when I was a child, so the T-shirt inspired me to talk to that person for the first time, and we had an exciting conversation. During that conversation, I asked that staff member: "I'm considering what 'inner beauty' is for the CITIZEN L. Do you have any good ideas?" The answer I

got then, "Yes, I do," excited me! That was in the era of the MDGs (Millennium Development Goals) before the adoption of the resolution on the SDGs. The UN T-shirted peer taught me about the approach of making social contribution by selling products, including cause

Sustainability as added value making the CITIZEN L shine more brilliantly

For the CITIZEN L's rebranding in 2016, we had architect Sosuke Fujimoto as our design advisor from the world of architecture, which was a pioneer field in sustainability initiatives. Mr. Fujimoto designed watches in the hope of materializing time, which is something invisible, into watches while maintaining its vagueness, creating new CITIZEN L watches while actively incorporating sustainable traditional craftwork, such as Nishijin-ori textiles and lacquered beads. These watches feature not only Eco-Drive, CITIZEN's proprietary technology that uses any kind of light to power a watch, but also the use of select people- and Earth-friendly materials that do not victimize anyone or anything. For example, the minerals used to produce the

contribution activities. We were at a loss what to do to achieve inner beauty with watches.

marketing. At the time, we used the word "ethical" to refer to such matters. The two of us were in sync concerning the possibility of achieving the inner beauty that we aimed at by adopting this approach in the product development and manufacturing processes. It was the moment when the gears meshed together perfectly. I also visited people outside the Company to seek their views before I completed a proposal focusing on sustainability. As that was the first attempt of its kind for the Company, things did not go smoothly, but the CSR Department staff member patted me on the back, saying, "It would be a waste to give up!" We presented our idea to the executives and were finally able to obtain their understanding and approval, leading to the Company moving forward. That was the starting point for the rebranding of the CITIZEN L.

CITIZEN L are procured from sources unrelated to conflicts between armed forces, child labor, or other problems. In addition, recycled materials are actively used to produce bands and dials. As seen by these examples, the CITIZEN L

watches are sustainable watches that feature both outer and inner beauty. However, we value ensuring that their external designs appeal to people first.

Movements made in Japan

Movements made in

Switzerland Machine Tools

Creating beautiful watches while embracing a beautiful cause and creativity

Currently, the CITIZEN L is positioned as a contributor to the growth of the Group's businesses. Team L, which is committed to the CITIZEN L, always comprises seven to nine members, including product planners, designers, and PR staff. I have fostered the brand while putting trust in us and, in a sense, retaining intuitive decisions as one of my options. I believe it is necessary to always have flexible but strong

determination. I hope to continue to foster the CITIZEN L while embracing a beautiful cause and creativity. A past line of advertising copy for the CITIZEN L is still engraved in my mind. It reads, "Brave is Beautiful." This is my favorite catchphrase. I hope to hand down the cause embodied in this phrase to my team members.

29 30

Sustainable Factories

A sustainable factory is a sustainable production facility or business site with operational processes that are designed in comprehensive consideration of human rights, the environment, labor practices, compliance, business continuity planning (BCP),* and productivity improvement throughout the entire supply chain.

We aim to establish sustainable factories throughout the Group by 2030.

Miyota Saku Factory Tokyo Works

*Business Continuity Plans (BCPs) are proactive plans developed during normal operations to ensure the continuity of the supply of products and services in the event of a major disruption, such as a natural disaster, or a speedy recovery following the disruption. BCPs outline the systems, roles, and response procedures that would be necessary in an emergency before the emergency occurs.

Compliance Training and Internal Auditing

To increase all employees' compliance awareness, the CITIZEN Group conducts regular training sessions on the CITIZEN Group Code of Conduct and the CITIZEN Group Anti-Corruption Policy. In FY2024, 99.8% of employees participated in these training programs. We also conduct internal surveys to assess employees' awareness of the Code of Conduct and adherence to compliance policies, and the results of these surveys are disclosed both internally and externally.

Anti-Corruption Initiatives

The CITIZEN Group has established the CITIZEN Group Anti-Corruption Policy, which prohibits all forms of corrupt practices, including bribery, and the Group provides training to all of its employees. We also request that our business partners understand and cooperate with the policy,

Sustainable Factory Key Indicators and Progress

Thorough Compliance

Since April 2005, the CITIZEN Group has been a participant in the UN Global Compact, supporting its 10 principles in four areas. Based on our corporate philosophy, "Loved by citizens, working for citizens," we have established the CITIZEN Group Code of Conduct to ensure legal compliance and uphold the highest ethical standards in all our actions. In April 2020, we formulated the CITIZEN Group Anti-Corruption Policy to reinforce our commitment to our responsibilities to society in line with the UN Global Compact's 10th principle. Employees are expected to maintain their strong awareness of compliance and establish sound relationships with stakeholders.

asking them to acknowledge and agree to the standards when new contracts are signed or contracts are renewed.

Each department of Citizen Watch conducts internal audits once a year. These include self-checks based on audit checklists and unannounced spot audits, which are used to drive improvements.

Compliance Hotline (Internal Whistleblowing System)

To prevent and detect violations of laws and misconduct at an early stage, we have established a compliance hotline. This system enables people to anonymously report issues and consult with the hotline's staff. It is operated in accordance with the guidelines issued by Japan's Consumer Affairs Agency as well as the Corporate Governance Code. It ensures strict confidentiality and prohibits any disadvantageous treatment of whistleblowers. It also allows former employees to submit reports to the hotline within one year of their resignation. In FY2023, a QR code-based reporting channel was introduced.

In FY2024, a total of 39 reports were received (31 via internal channels and eight via external channels). All reports were investigated, and corrective measures were taken where necessary. No serious violations of human rights or breaches of the Anti-Corruption Policy were identified. We remain dedicated to reinforcing our compliance framework.

Response to Antisocial Forces

Recognizing that any association with antisocial forces poses a serious risk to the credibility of the corporation, we take a firm stance against such entities. We have established systems for completely severing ties with such entities, including contract clauses that prohibit relationships with organized crime groups. We also collaborate with local businesses and law enforcement agencies to eliminate antisocial forces from our operating environment.

Compliance Policy

Our compliance policy, stated in our Group Code of Conduct as well, is based on the following

Training Sessions on the Act against Delay in Payment of Subcontract Proceeds, etc., to Subcontractors

To promote fair subcontracting practices, we provide employees with foundational knowledge regarding the Subcontract Act through on-the-job training, guidebooks, and e-learning programs. We strive to build win-win relationships with clients and subcontractors by encouraging improved transaction practices. Citizen Watch has also endorsed the Ministry of Economy, Trade and Industry's Declaration of Partnership Building and is working to establish new partnerships with suppliers throughout the supply chain that promote collaboration and mutual prosperity.

Compliance System

The Group Legal Compliance Committee is chaired by a director responsible for compliance. Together with the Group Security and Trade Committee and the Group Subcontracting Fairness Committee, it leads the Group's compliance efforts. The Management Committee and the Board of Directors oversee the development and implementation of Company-wide policies. Each committee consists of heads of the legal departments of Group companies and is responsible for developing initiatives, monitoring their implementation, and providing training and education. In addition, the Group Quality Compliance Committee plays a key role in addressing quality misconduct and other business-related issues. It is composed of directors that are responsible for quality compliance activities at Group companies. The independent internal audit department regularly audits the compliance framework and reports its results to the Management Committee and the Board of Directors.

Tax Compliance

Guided by our corporate philosophy, "Loved by citizens, working for citizens," we have established a tax policy to ensure taxes are properly paid and information is transparently disclosed, thereby fulfilling our responsibilities to society as a corporation. In FY2024, we conducted a tax training program for all employees that 92.5% of employees participated in to increase awareness of tax matters and promote tax compliance throughout the organization.

Environment

Responding to Climate Change

Climate change is one of the most serious global environmental risks. The CITIZEN Group is working across the organization to reduce greenhouse gas (GHG) emissions by promoting energy-saving activities and introducing renewable energy at its factories and offices.

To express its commitment to mitigating climate change, the Group participates in the Japan Climate Initiative, and in 2020, announced its support for the TCFD recommendations. In 2022, we revised our CO2emission reduction targets for Scope 1, Scope 2, and Scope 3, and in 2023, obtained Science Based Targets (SBT) certification. In 2025, we also joined RE100 with the goal of sourcing 100% of the electricity used in our business activities from renewable energy.

Indicators and Targets

The CITIZEN Group has set the following targets regarding climate change.

The CITIZEN Group has set cost reductions through the promotion of energy conservation as an indicator for climate-related opportunities and the amount of capital investment in energy conservation and renewable energy as an indicator for capital

GHG Emissions (Scope 1 + 2)

In FY2024, total GHG emissions amounted to 95,551 t-CO2, a 47% reduction compared with FY2018. This achievement reflects our continuing energy-saving initiatives and proactive adoption of renewable energy.

GHG Emissions (Scope 1 + 2)

Scenario Analysis

Recognizing that climate-related risks and opportunities could significantly impact its business strategy, the CITIZEN Group has used the following process to identify these risks and opportunities. Led by the Secretariat of the Sustainability Committee, the Group conducted an analysis using the 1.5 °C and 4 °C scenarios to assess the materiality of the risks and opportunities the Group is facing.

allocation. We will continue to monitor these indicators.

Indicator Target for FY2030

GHG Emissions

(t-CO2)

200,000

150,000

100,000

50,000

180,784

166,906

76,180

66,768

136,740 148,314

123,156 111,152

58,454

64,307

95,551

8,795

39,190

104,605 100,138

7

2,357 56,361

6,753 6

6

84,007

6,403 4

5

0

Japan Outside Japan

Process of Identifying Climate-Related Risks and Opportunities

Initiatives for Biodiversity Conservation

2018

2019

2020

2021

2022 2023 2024

(FY)

Classification

Significant*1 risk/opportunity

1.5OC

4OC

Impact on CITIZEN

Time Horizon*2

Short Medium Long term term term

Scenario Analysis Results

* 1 The results of the assessment of risks that have been determined to be "small" based on both the 1.5°C and 4°C scenarios are not listed.

*2 "Short term" spans up to three years, "medium term" spans more than three years and up to six years from now (which roughly corresponds with the period for Citizen Group Environmental Goals 2030), and "long term" spans more than six years from now (which roughly corresponds with the period for CITIZEN Group Environmental Vision 2050).

Financial Impact Analysis

Based on the results of the scenario analysis, we have identified financial impacts for the following two items that could significantly affect The CITIZEN Group's finance.

Through the introduction of ICP, we will promote appropriate low-carbon investment and raise awareness among employees.

Recognizing the importance of the ecosystem services provided by biodiversity and the impact of our business activities on biodiversity, the CITIZEN Group has established The CITIZEN Group Biodiversity Vision and is working together with local communities to conserve biodiversity.

Endorsement of the TNFD and Registration as a TNFD Adopter

In April 2025, the CITIZEN Group registered as a TNFD Adopter, endorsing the disclosure recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD). Since March 2023, we have participated in the TNFD Forum. Moving forward, we plan to identify and assess our impact, dependencies, risks, and opportunities related to nature and biodiversity with the goal of disclosing relevant information in line with the TNFD recommendations.

CITIZEN Forest Recognized by MLIT as the First TSUNAG-Certified Green Space

The CITIZEN Forest located at Citizen Watch's Tokyo Works was certified as the first site under the Ministry of Land, Infrastructure, Transport and Tourism's TSUNAG program, a certification system for quality green space preservation plans.

The forest serves not only as a workplace amenity for employees but also as a habitat for diverse species and a venue for community interaction. Ongoing initiatives include phased tree management based on long-, medium-, and short-term plans, the monitoring of environmental effects, such as CO2absorption, biodiversity monitoring, and environmental education for employees. These efforts are helping the CITIZEN Forest continue to thrive. In this urban setting surrounded by a residential area, the forest has been recognized as a rich corporate green space with multifunctional value.

Other Biodiversity Initiatives

Since 2020, Citizen Watch has been implementing the Eco Tree ACTION program, through which the Company donates one mangrove seedling through the international NGO NICE each time a customer chooses to forgo a watch box when purchasing a CITIZEN brand timepiece.

We have also endorsed the Ministry of the Environment's 30by30 initiative, which is targeting the conservation of at least 30% of Japan's land by 2030. In FY2023, we joined the 30by30 Alliance. Both the Citizen Machinery and Citizen Finedevice nature reserves have been designated as Nature Symbiosis Sites by the Ministry of the Environment.

Stakeholder and Supply Chain Engagement

CITIZEN Group Stakeholders

Customers

Aiming to further improve customer satisfaction, we continue striving to incorporate feedback from customers in all businesses.

Main method of engagement

Response to inquiries and requests received at customer contact points

The CITIZEN Group aims to contribute to a sustainable society and achieve growth for the Group through the realization of its corporate philosophy. In developing our business, we practice CSR with the participation of all employees based on the Group Code of Conduct, which is in the spirit of the UN Global Compact. In addition, to maximize the value we provide to society, it is important to incorporate the demands and expectations of our diverse stakeholders into our management. Therefore, we aim to realize our corporate philosophy by building strong relationships of trust through close communication with our stakeholders and by conducting business activities that meet their requests and expectations.

Government

We carry out fair and upright business activities in accordance with laws, regulations, and social norms with each and every individual in the organization taking actions as a good member of society.

Main method of engagement

Compliance with laws, ordinances, and regulations/ Alliance in biodiversity conservation activities

Shareholders

To reliably reward the trust and meet the expectations of shareholders and investors, we strive to carry out proactive dialogue and timely, accurate, and appropriate information disclosure.

Main method of engagement

General meeting of shareholders/ Financial results briefing

The CITIZEN OF THE YEAR award was established in 1990 to recognize outstanding citizens who have inspired society or contributed to its development, happiness, and appeal. At that time, civic engagement was gaining attention, but there were few awards that honored citizens from a broad and inclusive perspective. Inspired by our name, CITIZEN, we launched this program to highlight these citizens.

Since its inception, the award has been presented annually to Japanese citizens and foreign residents of Japan who have inspired society or meaningfully contributed to its development, happiness, and appeal. Last year, 2024, was the 35th year the program has been implemented.

Through this initiative, the CITIZEN Group will continue to shine a light on citizens who inspire society, celebrate their moving contributions, and extend its wholehearted support. Guided by our corporate philosophy, "Loved by citizens, working for citizens," we are committed to addressing social issues through our business activities and contributing to the realization of a better society.

FY2024 Recipients

NGOs and NPOs

We build partnerships based on taking actions in each other's area of specialization through dialogue with NGOs and NPOs

Main method of engagement

Alliance in social contribution operations/ Holding discussions

Suppliers

We strive to realize fair and transparent transactions to realize growth and progress together with our suppliers, who are also our business partners.

Main method of engagement

Holding briefings concerning sustainable procurement for partners

Local Community

We promote various social contribution activities in harmony with local communities and the international community based on our corporate philosophy.

Main method of engagement

Conducting community contribution activities/ Participation in local events/Acceptance of plant tour participants/Exchanges through table tennis, the Company's designated sport

Employees

We strive to build environments in which everybody can work in comfort and with peace of mind through respect for individuals and diversity.

Main method of engagement

Survey of employee satisfaction/Interviews with superiors/ Labor-management consultations/Delivering and sharing information through our intranet

Toward a Society Where People with Dementia Can Live with Security and Authenticity: Breaking Down Misunderstanding and Prejudice

From Truancy to Support: A Mother-Daughter Counseling Team Empowering Families with Empathy

A "Japanese Mother" Supporting Children with Pediatric Cancer in Vietnam for

20 Years

Promoting Sustainable Procurement

The CITIZEN Group aims to contribute to a sustainable society by realizing sustainable factories that not only consider the operations within CITIZEN's own production sites but also emphasize sustainability across the entire manufacturing process.

As part of our efforts to identify risks related to CSR procurement, we have conducted supplier assessments since FY2019 using both a Self-Assessment Questionnaire (SAQ) and our proprietary supplier fact-finding survery. We have also introduced a risk classification system based on suppliers' overall SAQ radar chart scores, enabling us to identify suppliers with higher procurement risks from their responses and assessment results.

Human Rights Due Diligence

The CITIZEN Group identifies human rights risks within its supply chains in each of its businesses. In the Watches Business, significant human rights risks have been identified in relation to conflict minerals and the labor conditions of raw material suppliers.

For conflict minerals, we are advancing due diligence efforts on smelters for each of the 3TG minerals (tin, tantalum, tungsten, and gold). Regarding labor conditions, we conducted on-site visits to five suppliers in China in FY2023 and FY2024 using our proprietary Health, Safety, and Labor Management Checklist. These visits were aimed at verifying concerns and implementing preventive measures against potential human rights risks. In FY2025, we plan to revise the checklist and further strengthen

Japan Dementia Working Group (JDWG)

Dementia is a life-altering condition that can affect anyone, not just older adults. However, deep-rooted prejudice and misunderstandings persist. Led by individuals living with dementia, the Japan Dementia Working Group (JDWG) is engaged in nationwide efforts to build a society where people with dementia can live with hope and dignity. In 2018, the JDWG held a press conference at the Ministry of Health, Labour and Welfare to announce its Declaration of Hope for Living with Dementia. This declaration was later reflected in the Basic Act on Dementia to Promote an Inclusive Society, which was enacted in 2024 to help build a society where all individuals can live with dignity.

Hono Ozawa Chie Ozawa

Hono Ozawa once struggled with truancy, and her mother Chie Ozawa, stood by her daughter during that time. Now, they work together as a mother-daughter counseling team. They support other families facing similar challenges, listening attentively to the feelings of both children and parents. Their initiative, Jibunrashisa Shoten, reflects their belief that the goal is not whether a child attends school, but that both the child and the parent are able to be true to themselves. Through their work, they encourage parents and children to express their own thoughts and, in doing so, rediscover their individual identities. They also organize lectures and free consultation sessions for single parents. Over the past two years, more than 80 parent-child pairs have sought their support.

Kazuyo Watanabe

Twenty years ago, pediatric cancer was an incurable disease in Vietnam. The disease claimed many children's lives at that time. Since 2005, Kazuyo Watanabe has provided free support for pediatric cancer care across Asia, focusing primarily on Hue Central Hospital, a national hospital in Hue, Vietnam. That same year, she founded the NPO Asian Children's Care League in 2005, and through the NPO she has provided comprehensive and attentive support to children and their families, addressing both medical and social welfare needs. These activities have borne fruit: the five-year survival rate for children diagnosed with acute lymphatic leukemia has improved to about 70% from around 10% when the activities first started.

risk evaluations through on-site inspections.

On-site inspection at a supplier facility in China

Responsible Minerals Procurement

The CITIZEN Group recognizes that procuring 3TG (tin, tantalum, tungsten, and gold) minerals from conflict-affected and high-risk areas (CAHRAs), including the Democratic Republic of the Congo and neighboring countries, is a serious international concern, as such minerals might fund armed groups and contribute to conflict, human rights abuses, and environmental destruction. Accordingly, we support the principles of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and implement initiatives aligned with its framework.

In line with this guidance, we disclose the percentage of smelters that are certified Conflict-Free Smelters (CFSs) for each mineral and take corrective actions where necessary from a human rights risk perspective. Through these efforts, the CITIZEN Group is working collectively to eliminate conflict minerals from its supply chain.

They have taken a stand and continually displayed their positive attitude toward life as people with dementia. This has helped society as a whole begin to gradually change its view of dementia.

"The happiest moment," says Hono, "is when a child I've counseled is able to make decisions on their own." Her mother, Chie, dreams of publishing a book based on her experience.

Watanabe stays overnight at the hospital to be with the children. "There's no greater joy," she says, "than seeing them again after they've completed treatment and grown up."

CITIZEN OF THE YEAR

https://www.citizen.co.jp/global/coy/index.html

35 36

Human Resources Strategy

The CITIZEN Group sees its employees as valuable human capital. We recognize that unlocking their full potential is key to the achievement of sustainable growth and the maximization of the value we provide to society. Our Group Human Resources Vision is: "Each employee feels a sense of pride in working at CITIZEN as they contribute to the realization of its long-term vision." Guided by this vision, each Group company leads the promotion of three key initiatives-enhancement of job satisfaction, development of human resources, and DEI (Diversity, Equity & Inclusion)-with the goal of aligning human resources and business strategies.

Enhancement of Job Satisfaction

Diversity, Equity and Inclusion

The CITIZEN Group believes that a core responsibility of management is creating an environment where every employee is respected and where diversity is valued and embraced. We are committed to supporting our diverse workforce and fostering organizations where our diverse talent, the source of our competitive strengths, can fully realize their potential and build long-term careers, thereby enhancing corporate value. The director of Citizen Watch in charge of these initiatives signed the joint declaration of the Tokyo Women's Future Forum in FY2024, reaffirming the commitment of top management to the reform of our organizational culture,

As part of our efforts to enhance job satisfaction, four CITIZEN Group companies-Citizen Watch, Citizen Machinery, Citizen Finedevice and Citizen Systems-conduct regular engagement surveys.

The FY2024 survey response rate at Citizen Watch was 99%. The overall score improved by one point from the previous year, and career development opportunities, a targeted area, improved by three points. To strengthen relationships with supervisors and build confidence in the

Human Capital Development

At the CITIZEN Group, we are committed to developing the human capital needed to promote our management and the transformation of our Group and its individual companies in line with our management strategy. Our goal is to realize the growth of both our employees and the Company. This commitment is reflected in initiatives, such as Group-wide tiered training programs led by Citizen Watch, as well as training programs conducted by the individual Group companies. To further increase

Human Capital Development Road Map

evaluation process, we have expanded self-directed career development programs, introduced more comprehensive reskilling opportunities for managers, and conducted training for evaluators. We also encourage each division to hold workshops based on the results of the surveys and promote both Company-wide and division-specific initiatives. By fostering the sharing of information across the Group, we aim to enhance engagement throughout the organization.

collaboration in talent development areas, we have launched the Group Transformation Promotion Training and Basic Management Training programs. Some components of Group Transformation Promotion Training are conducted in collaboration with Citizen Watch's Reskilling Training for managers. We are also focused on cultivating the next generation of leaders who will shape the future of the Group, including cross-company talent rotation programs that transcend organizational boundaries.

the development of female managers, and the creation of a more inclusive workplace as part of our management strategy. In FY2024, we also provided supervisors of female managers with opportunities to increase their understanding of the background behind and purpose of our DEI initiatives, increase their awareness of the importance of developing talented women, and learn practical methods for supporting women in the growth of their careers. One-on-one meetings with women managers were made mandatory. We also held follow-up events, including talks presented by role models, to facilitate women managers' networking activities and provide them with ongoing learning opportunities. In addition, we participated in an intercompany cross-mentoring initiative to further support women's career development activities.

KENKO Investment for Health Stock Selection

As part of its commitment to health and productivity management, Citizen Watch was certified as among the Outstanding Organizations of KENKO Investment for Health (Large Enterprise Category, White 500) for the second consecutive year, following its initial selection in 2024. The Company was also selected for the 2025 KENKO Investment for Health Stock Selection receiving top-tier evaluations on par with the industry's leading companies for its solid foundation in the implementation of health and productivity management. In FY2024, to increase health literacy and encourage regular exercise habits, we introduced the ASICS Health Care Check program. We also began bone density testing as part of our efforts to address women's health issues such as osteoporosis, and held unconscious bias training sessions for management. To promote communication, we organized lunch gatherings and team-building events at the CITIZEN Forest. Looking ahead, we will continue to promote health and productivity management through a top-down approach led by the president and the director in charge of these initiatives in collaboration with the health insurance association and other relevant departments.

Group discussion as part of the cross-mentoring program

From the perspective of enhancing employee wellbeing, we regard both indoor spaces and outdoor landscapes as integral parts of the workplace.

Supporting Autonomous Career Development

Citizen Watch aims to develop professional talent from an early stage by promoting both Company-led and self-directed employee initiatives supporting the growth of both individuals and the organization. To encourage employees to independently develop their careers, we offer optional career seminars and have expanded our elective training

departments. Combined with the previously introduced external side job system, these initiatives give employees the opportunity to pursue experiences aligned with their aspirations. In addition, we have officially introduced an internal open transfer system that enables departments in need of talent to call for applicants internally, leading to transfers that

Respect for Human Rights

The CITIZEN Group Code of Conduct, which serves as behavior guidelines for all Group employees, stipulates that business activities must be conducted with due consideration for human rights, and this commitment extends to include our business partners. In line with this, we have proactively worked to increase awareness of human rights throughout the organization. With the launch of the Medium-term Management Plan 2021 in April 2019, we reaffirmed our commitment to Group-wide sustainable management and to contributing to the achievement of the SDGs through our business activities. At the same time, we established the CITIZEN Group Human Rights Policy to clearly express our stance on respecting human rights.

This policy expresses the Group's commitment to respecting the dignity and rights of all stakeholders involved in our operations, to avoiding any involvement in human rights violations, and to taking prompt action to address and remedy any adverse impact on human rights that the Group might be connected to.

Building a Human Rights Due Diligence Framework

CITIZEN Group Human Rights Policy

system that allows employees to choose from various courses organized by job level and topic according to their own development needs. We have also introduced an in-house side job system, which allows employees to spend approximately 20% of their working hours on roles outside their primary duties. This program provides employees with opportunities to gain knowledge and skills not available through regular work, build internal networks, and bring diverse perspectives into existing

better reflect employee preferences and career goals. In department-level human resource development activities, we utilize 360-degree feedback and follow-up training to enhance employee development and managerial capabilities. In our talent management efforts to foster a diverse workforce, we support employees' efforts to develop their own careers while building a Company-wide framework for strengthening and optimizing our human resources.

To ensure the human rights of all stakeholders involved in its business activities are respected, the CITIZEN Group has a number of communication and training initiatives aimed at increasing awareness and ensuring that its policies and regulations are instilled in the Group's employees and suppliers. In FY2024, we conducted data collection and risk analysis to identify potential ways that our business activities might be associated with matters that adversely impact human rights. Using the Human Rights Due Diligence Questionnaire developed referencing the ILO Declaration on Fundamental Principles and Rights at Work, the Caux Round Table, and the UN Global Compact standards, we conducted human rights risk surveys at 13 domestic and 47 overseas Group companies. We focus on the management of working conditions, occupational health and safety, and non-discrimination activities in particular, as there is the potential for human rights risks to develop in these areas.

Strengthening the Management Foundation

Corporate Governance

Basic Views on Corporate Governance

Loved by citizens, working for citizens-This is the sentiment from which Citizen Watch Co., Ltd. ("the Company"), derives its name and which it has made its Corporate Philosophy. The Company works to contribute to society and increase its corporate value through sustainable corporate activities, in harmony with the local community and the global environment. To continue to promote its aims, the Company believes it is important to ensure transparency in management and multifaceted management oversight. Accordingly, the Company is striving to expand and enhance its corporate governance.

CITIZEN has implemented all the principles set forth in the Corporate Governance Code revised in June 2021.

Corporate Governance https://www.citizen.co.jp/global/ir/governance.html

Officer Compensation System

Compensation for Directors of the Company (excluding Directors who are Audit & Supervisory Committee Members and Outside Directors) consists of fixed compensation and performance-linked compensation. Our policy for setting the payout ratio of these two types of compensation is based on a level that will increase motivation to produce good business performance and enable the Company to attract and retain talent and that will be effective in increasing motivation to contribute to improving business performance and enhancing corporate value in the medium to long term, considering factors such as changes in the business environment, external data, general compensation levels, and the business situation.

Compensation for Directors who are Audit & Supervisory Committee Members and Outside Directors consists only of fixed compensation.

Composition of Compensation for Directors

Corporate Governance Framework

The Company holds meetings of the Management Committee, consisting of full-time Directors and other members, to make prompt management decisions and maintain transparency of management. The Committee holds thorough discussions and conducts prior reviews on matters to be decided by the Board of Directors and other important management issues.

Fixed compensation

The Company sets the amount of fixed compensation at a level that will motivate Directors to fully demonstrate their qualities and abilities and to strive for sustainable growth based on the Company's corporate philosophy, and that will enable it to attract and retain talent, while considering changes in the business environment, external data, general compensation levels, and the

Performance-linked compensation

The ratio of performance-linked compensation exceeds 50% of individual compensation, and performance-linked share-based compensation accounts for approximately 20% of that. Performance-linked compensation may not be paid as a result of the performance evaluation or other factors.

1. Bonuses

   The Company's policy is to determine bonus amounts based on financial evaluation criteria (e.g.,

   The Board of Directors of the Company

   consists of four Directors (excluding Directors who are Audit & Supervisory Committee Members) who preside over the corporate group and execute major business operations, three Outside Directors (excluding Directors who are Audit & Supervisory Committee Members) who check and oversee management from an independent standpoint, leveraging abundant experience as corporate managers and broad insight, and three Audit & Supervisory Committee Members, including two Outside Directors, who have

   The main duties of the Nomination Committee

   include deliberating on matters regarding the selection and/or dismissal of Representative Directors, the President and CEO, and/or the Chairperson of the Board of Directors, and offering its proposals to the Board of Directors.

   Compensation Committee Chairperson: Outside Director

The main duties of the Compensation Committee include deliberating on matters relating to policies and standards for compensation, etc., received by Directors (excluding Directors who are Audit & Supervisory Committee Members) and making

Audit & Supervisory Committee Members conduct

strict audits of the execution of duties by Directors in accordance with the audit policy and audit plan established by the Audit & Supervisory Committee, by attending meetings of the Board of Directors, the Management Committee, and individual meetings by business category; making reports on the state of execution of duties by Directors, etc.; viewing important approval documents; and investigating the status of operations and assets. They also receive reports on accounting audits from Nihombashi Corporation, cooperate with the accounting auditor to carry out efficient audits

business situation. As a general rule, the Compensation Committee, which is delegated authority by resolution of the Board of Directors, determines the amounts of fixed compensation at meetings of the Compensation Committee held in June each year (or in a timely manner in the case of a change in positions of Directors), within the limits stipulated in the Directors' Monthly Basic Compensation Standards. Fixed compensation is paid in cash every month.

Total Amount of Compensation, etc., Officer Category,

net sales, operating profit) and non-financial evaluation criteria (e.g., global situation, disasters, M&A) stipulated in the Directors' bonus payment standards. As a general rule, the Compensation Committee, which is delegated authority by resolution of the Board of Directors, determines the amounts of bonuses in June every year. Bonuses are paid in cash in July each year.

1. Performance-linked share-based compensation

   The Company operates a performance-linked share-based compensation system in which shares of the Company are acquired through a trust funded by amounts of Directors' compensation contributed by the Company according to position, and shares of the Company or cash in the amount equivalent to the conversion value of the shares are delivered or paid ("delivered, etc.") according to the level of achievement of business targets. The amount, number, or method of calculation of this compensation is determined by a resolution of the Board of Directors based on the recommendation of the Compensation Committee, in accordance with the Share Delivery Regulations for the Officer Compensation BIP Trust.

   extensive knowledge of and broad insight into corporate legal affairs, accounting, etc.

   recommendations to the Board of Directors.

   of the Company and its subsidiaries, and work to further enhance corporate governance.

   Total Amount by Type of Compensation, etc., and Number of Eligible Officers (140th fiscal period)

   Corporate Governance System Schematic Diagram

   Officer category	Total amount of compensation, etc. (millions of yen)	Amount of fixed compensation out of all compensation, etc. (millions of yen)			Number of officers
   		Fixed compensation	Bonuses	Performance-linked share-based compensation
   Directors (Excluding Outside Directors)	290	134	93	62	6
   Audit & Supervisory Board Member (Excluding Outside Audit & Supervisory Board Members)	19	19	ー	ー	1
   Outside Officers	61	61	ー	ー	5

   The performance-linked share-based compensation of 62 million yen for Directors (excluding Outside Directors and non-residents in Japan) is the amount posted as expenses for the fiscal year under review.

   General Meeting of Shareholders

   Selection/ Dismissals

   Selection/ Dismissals

   Selection/ Dismissals

   Nomination Committee

   Proposal

   Report

   The Board of Directors

   Audit Supervision

   Audit & Supervisory Committee

   Teamwork

   Independent Auditors

   Compensation Committee

   Recommendation

   Report

   Appointment/ Removal Supervision

   Accounting Audits

   Direction/Orders

   Reporting

   Teamwork

   Management Committee meetings

   Report

   Direction/Orders

   President

   Audit Division

   Reporting

   Direction Internal Auditing

   Supervision

   Each department/industrial company

Evaluation of Effectiveness

CITIZEN aims to continuously improve its governance system and function effectively through analysis and evaluation of the effectiveness of its Board of Directors.

FY2024 Initiatives

We conducted online training in which participants choose necessary themes and take classes online as training for all Directors and Audit & Supervisory Committee Members. Outside Officers were also provided with dedicated tablets to further improve the efficiency and security of document distribution for meeting materials.

Surveys Conducted

From February to March 2025, we conducted a questionnaire survey of the Board of Directors for all Directors and Audit & Supervisory Board Members through an external organization using tools to evaluate effectiveness.

Evaluation of Effectiveness

Directors and Audit & Supervisory Board Members generally gave high grades, and it was confirmed that the Board of Direct functioned effectively.

Challenges for FY2026

We will continue working to increase corporate value by improving upon the issues raised in this effectiveness evaluation and increasing effectiveness.

Sales and communication abilities are the key

Let's maximize our potential to

grow to the next level

Citizen Watch Co., Ltd. Outside Director

Yoshio Osawa

• Message from an Outside Director

Group Risk Management

The CITIZEN Group engages in sustainable management and has established a Group-wide risk and crisis management system to consolidate and quickly address risks across the entire Group, ensuring sustainable growth and the achievement of Group-wide business objectives. This system includes various committees that address legal and compliance issues, information security, disasters, and other risks, as well as subcommittees of the Sustainability Committee that address operational risks and related ESG risks during normal business operations.

Cross-Shareholdings

The Company maintains shareholdings when it is judged, comprehensively, to contribute to the maintenance and enhancement of

The CSR Department of Citizen Watch Co., Ltd., which plays a central role in Group risk and crisis management, works together with various departments within Citizen Watch and Group companies both in Japan and overseas to strengthen Group governance, implement measures to enhance quality compliance, check progress in addressing important Group risks, and identify and respond to new risks.

ESG risks and material risks, like other important risks, require action to ensure the Group's continued existence. For this reason, the

rationality and necessity of such cross-shareholdings every year considering factors such as the relationships between business

Sustainability Committee leads discussions on the impact of such risks on the Group and corresponding response measures. It also works to foster risk awareness throughout the Group, according to the unique risks at each Group company. It also holds discussions on preventive measures and other responses to emerging risks that could have significant medium-term impacts on the Group, including cyberattacks, data breaches, and changes in overseas regulations.

Number of Cross-Shareholdings

37 34

31

Evaluation of the Medium-term Management Plan 2024

The Medium-term Management Plan 2024 was a period during which we focused on strengthening our business foundation to overcome the deterioration in performance caused by the COVID-19 pandemic and move toward achieving Group Vision 2030. As an Outside Director responsible for supervising and reviewing the execution of management, I emphasized the importance of expanding production capacity and improving productivity in the Machine Tools Business, which is particularly susceptible to cyclical market influences, with a view to achieving a full-scale recovery in orders. I engaged in in-depth discussions with management on these issues. As a result, we steadily advanced expansions in capacity at each Machine Tools manufacturing site, achieving a 40% increase in production capacity compared with FY2021.

brand value will also be key. In addition to the CITIZEN brand, the Company owns other well-established brands with a long history, such as BULOVA, which has a strong presence in the North American market. We also have

become Directors who are Audit & Supervisory Committee Members, and their voting rights at Board of Directors meetings will help to energize Board discussions. It is also very pleasing that the ratio of Outside Directors has increased and

the Group's medium- to long-term business relationships, the smooth operation of the Company's business operations, and business development. Regarding verification of individual cross-shareholdings, the Board of Directors follows a basic policy of verifying the

Compliance

Basic Philosophy Regarding Compliance

partners and the Group and the possibility of mutual enhancement of corporate value, and strives to reduce shareholdings of shares for which the significance of continued retention has been diluted.

(FY)

29

2018 2019 2020 2021

28

2022

27

2023

26

2024

While advancing the Medium-term Management Plan 2024 strategies to improve performance and build a solid business foundation, we also recognized that the price-to-book ratio (PBR) falling below 1 was a significant challenge. After thorough discussions, we implemented two share buybacks to improve management indicators. In particular, the second share buyback was significantly large. Following its announcement in 2023, it not only improved capital efficiency but also led to an increase in PBR, earning us a certain level of recognition from the stock market. While continued

advanced technologies such as Eco-Drive, GPS satellite radio-controlled watches, and titanium processing, which are world-class, but I feel that a lot more still needs to be done to promote them. To help customers understand the value of our products, we need to strengthen marketing efforts using social media and e-commerce, and communicate the emotional value and stories behind our watches.

The same applies to the Machine Tools Business, where we have achieved an increase in production capacity under the previous Medium-term Management Plan. By engaging

the ratio of female directors has reached 30%, further strengthening the Company's corporate governance system.

As an Outside Director, I will continue to contribute to the management of CITIZEN by leveraging the experience and know-how that I have accumulated in areas such as business management, investment decisions (including M&A), and human resources development. I will also remain mindful of the perspectives of minority shareholders and continue to provide active input at Board meetings and other meetings.

The CITIZEN Group has been a participant in the UN Global Compact since April 2005. We not only endorse the four areas and 10 principles of the Global Compact and engage in ongoing efforts to achieve them but also have established the corporate philosophy of "Loved by citizens, working for citizens." Furthermore, we have established the CITIZEN Group Code of Conduct as a set of concrete action guidelines, and strive to always think and act in ways that

align with the responsibilities of a good corporate citizen. Article 3 of the CITIZEN Group Code of Conduct states that we will "Engage in business practices that are fair, transparent, open to competition, and responsible." We strive not only to comply with laws and regulations but also to act with a high sense of ethics. Given the increasing complexity of our global business operations, we also established the CITIZEN Group Anti-Corruption Policy in April

2020 to systematically outline the Group's stance and approach toward corruption, including fraud and bribery, with the aim of thoroughly eliminating all forms of corruption. Based on this policy, we strive to ensure that every employee maintains a high level of compliance awareness, and work to build healthy relationships and trust with stakeholders, including customers and business partners.

improvement in PBR remains necessary, I believe that implementing and verifying this approach as one method toward improving CITIZEN's management indicators was meaningful.

In addition, with calls for the enhancement of corporate governance and the role of Outside Directors within companies becoming increasingly important, improving the ratio of Outside Directors on the Board of Directors was a key challenge. I also feel that it was a significant achievement that I was able to engage in

in key initiatives focused on strengthening sales capabilities, we aim to effectively capture the upcoming wave of order recovery, thereby achieving our sales target of 100 billion yen for FY2027, and making a significant contribution to the achievement of the Group's consolidated numerical targets.

From a management perspective, we recognize that improving PBR is essential. To communicate the Company's growth potential to the stock market, we must communicate CITIZEN's strengths and positive attributes to the

Expectations for the CITIZEN Group

Companies with more than 100 years of history, like CITIZEN, tend to become overly reliant on precedent. Given that the environment and conditions today are different from those of the past, it is crucial for every CITIZEN Group employee to focus on both the present and the future, and continuously review and improve the Group's management and various systems. In the Watches Business, CITIZEN is one of

Board of Directors

Management Meetings

Sustainability Committee

Chair

CITIZEN WATCH President and CEO

Group Legal/Compliance Committee

Chair

CITIZEN WATCH Director responsible

Group Quality Compliance Committee

Chair

CITIZEN WATCH Director responsible

Group Security and Trade Committee

Group Subcontracting Fairness Committee

Legal affairs department of Group companies in Japan

CITIZEN Group Corporate Governance System

thorough discussions with management regarding the establishment of a framework for the Medium-term Management Plan 2027.

Medium-term Management Plan 2027

Under the new Medium-term Management Plan, the sales target for FY2027 is 360 billion yen, which represents growth of more than 10% compared with the results for FY2024. The key to achieving this target is sales capabilities. To translate the solid business foundation we built under the previous Medium-term Management Plan into results, we must focus our efforts on sales.

In the Watches Business, alongside capital investments, strategies aimed at enhancing

outside world more than ever before. Continuous improvement of ROE is also important. At the same time as enhancing sales capabilities, improving productivity through automation of manufacturing sites and the advancement of digital transformation (DX) will also be key points.

Enhancing Corporate Governance

As of June 2025, the Company has transitioned to a company with an Audit & Supervisory Committee structure. This was achieved through active discussions during the previous Medium-term Management Plan period, as mentioned earlier. Under the new structure, Audit & Supervisory Board Members have

a handful of manufacturers around the world capable of integrated in-house watch manufacture, of everything from individual parts to completed products. Going forward, I hope that the Company will strive to communicate the value of these manufacturing capabilities, which cannot be achieved overnight. The Group's core technologies-centered on precision processing techniques cultivated through watch manufacturing-are also highly regarded, and the CITIZEN Group has great potential. How can we communicate and express these strengths to the world and monetize them? If the Company can achieve this, I expect it to lead to significant growth for the CITIZEN Group in the future.

Corporate Data

Financial and Non-financial Highlights

Historical Financial Data

https://www.citizen.co.jp/global/ir/chart1.html

Financial Data

Nonfinancial Data

* End of fiscal year data for all six main Group companies

(Citizen Watch, Citizen Watch Manufacturing, Citizen Machinery, Citizen Finedevice, Citizen Systems, and Citizen Electronics)

Net Sales (Millions of yen)

316,885

Operating Profit (Millions of yen)

Operating Profit Margin (%)

Net Assets (Millions of yen)

Equity Ratio (%)

ROE（%） ROA（%）

Percentage of Female Employees in Management Positions (%)

CO2 Emissions (t-CO2)

Total Energy Consumption (TJ)

Water Withdrawal (1,000 m3)

5.7 5.7

6.1

4.8

312,830

301,366

7.9 7.9

8.0

25,068 6.5

23,708

22,273 20,592

238,673

264,147

256,134

10.2

9.6 9.7

9.5

148,314

1,258

1,192

1,860

1,783 1,674 1,692

281,417

58.1

232,775

59.6 61.6

57.5

5.8

5.6 5.7

5.7

123,156 111,152

95,551

1,114 1,083

(FY)

2021

2022

2023

2024

(FY)

2021 2022

2023

2024

(FY)

2021 2022

2023

2024

(FY)

2021 2022

2023

2024

(FY)

2021 2022

2023

2024

(FY)

2021 2022

2023 2024

(FY)

2021 2022

2023

2024

(FY)

2021 2022

2023 2024

Introduction

Management Strategies for Enhancing Corporate Value

Medium-term Management Plan 2027

Business Strategies

Sustainability Strategy

Strengthening the Management Foundation

Corporate Data

Management Team

Directors Directors and Audit & Supervisory Committee Members

President & CEO

Yoshitaka Oji

［ Career Summary ］

Senior Managing Director

In charge of Corporate Planning Division, IT Management Department and Devices and Components Business

Toshiyuki Furukawa

［ Career Summary ］

Director and Full-time Audit & Supervisory Committee Member

Kazunori Yanagi

［ Career Summary ］

Outside Director and Audit & Supervisory Committee Member Independent

Yaeko Ishida

［ Career Summary ］

Outside Director and Audit & Supervisory Committee Member Independent

Noriko Yamanaka

［ Career Summary ］

1986 Joined the Company

2005 Assigned to Marketing Department, Watch Business Division of the

1986 Joined the Company

2009 Manager of Investor and Public Relations Department of the Company

1986

2007

Joined the Company

General Manager of Accounting Department, Administration Division of Citizen Watch Co., Ltd.

2000

2007

2016

Registered as an attorney-at-law

Judicial Commissioner of Tokyo Summary Court Conciliation Commissioner of Tachikawa Branch of

1998

2002

2004

Joined Asahi & Co. (Currently KPMG AZSA LLC) Registered as a certified public accountant

Joined Criminal Investigation Division, Securities and

2011

2015

Company (assigned to Singapore)

General Manager of Business Administration Department, Administration Division of Citizen Watch Co., Ltd.

General Manager of Corporate Planning Division of the Company

2011

2015

2015

General Manager of Corporate Planning Division of the Company Director of Citizen Watch Co., Ltd.

General Manager of Management Planning Division and in charge of Accounting Department of Citizen Watch Co., Ltd.

2011

2012

2014

2014

General Manager of Accounting Department of Citizen Watch Co., Ltd.

Executive Officer of Citizen Jewelry Co., Ltd. Director of ROYAL TIME CITI CO., LTD.

Representative Director and President of ROYAL TIME

2019

2021

2023

Tokyo Family Court

Outside Audit & Supervisory Board Member of the Company

Outside Director of Inageya Co., Ltd. (present)

Outside Director of Shindengen Electric Manufacturing

2006

2012

2022

Exchange Surveillance Commission, Financial Services Agency

Joined AZSA & Co. (Currently KPMG AZSA LLC) Joined Suntory Holdings Limited

Auditor of Pronto Corporation

2022 Senior General Manager of Watch Business Division of the Company 2025 President and CEO of the Company (present)

2022 Managing Director of the Company

2025 Senior Managing Director of the Company (present)

2025 In charge of Devices and Components Business of the Company (present)

2025

Director and Full-time Audit & Supervisory Committee Member of the Company (present)

Ms. Yaeko Ishida uses the name Yaeko Kitadai in her profession as an attorney-at-law.

Based on his experience in implementing business strategies for the Group's Watches Business and his track record in driving product development for the Company's watches, Yoshitaka Oji will continue to play a leading role in enhancing the Group's corporate value by driving the execution of the Medium-term Management Plan 2027 as President and CEO. Assumed current role in 2025.

Managing Director

In charge of Group Risk Management, Personnel Division, General Affairs Division and CSR Department

Yoshiaki Miyamoto

［ Career Summary ］

After serving as head of Public & Investor Relations, where he was involved in investor dialogues and PR strategies, Toshiyuki Furukawa gained experience and expertise as General Manager of the Corporate Planning Department, responsible for formulating Group management strategies, and as a Director in charge of Corporate Planning and Accounting. Assumed current role in 2025.

Director

In charge of Public & Investor Relations Department, Sustainability Development Department, Development Division and Intellectual Property Division

Keiichi Kobayashi

［ Career Summary ］

Skill Matrix

The Company has specified the knowledge, experience, and skills needed to fulfill the roles and duties of the Board of Directors effectively for achieving business strategies and discloses the skills matrix as an indicator of the overall balance of knowledge, experience, and skills, and diversity of its Board of Directors as a whole.

The skills possessed by each Director are as follows.

1990 Joined the Company

1992

Joined Citizen Trading Co., Ltd.

2009 Deputy General Manager of Business Administration Department, Administration Division of Citizen Watch Co., Ltd.

2005 Assigned to Marketing Department, Watch Business Division of the Company (assigned to United States of America)

2007 Assigned to CB Business Division of Citizen Watch Co., Ltd. (assigned to United States of America)

2017

Senior Operating Officer of the Company

2016

2017

Deputy General Manager of Switzerland of Global Marketing Division of the Company

President of Citizen Watch Europe GmbH

2017

2017

2018

2019

2019

General Manager of General Affairs Division of the Company

In charge of Group Risk Management and Personnel Division of the Company (present) Director of the Company

In charge of Environmental Management Department of the Company In charge of CSR Department of the Company (present)

2022 Operating Officer of the Company

2022 General Manager of Corporate Planning Division of the Company 2025 Senior Operating Officer of the Company

2025 In charge of Public & Investor Relations Department, Sustainability Development Department, Development Division and Intellectual Property

2025 Managing Director of the Company (present)

2025 In charge of General Affairs Division of the Company (present)

After being involved in the start-up of new plants at Group overseas subsidiaries engaged in watch and clock manufacturing, Yoshiaki Miyamoto managed overseas subsidiaries responsible for watch and clock sales. He also has a track record as Director with responsibility for Group risk management, general affairs, and personnel. Assumed current role in 2025.

Division of the Company (present) 2025 Director of the Company (present)

Keiichi Kobayashi has experience managing overseas subsidiaries responsible for the Group's watch sales, as well as a proven track record in formulating Group management strategies as General Manager of the Corporate Planning Division. Assumed current role in 2025.

Outside Director Independent

Toshiko Kuboki

［ Career Summary ］

Outside Director Independent

Yoshio Osawa

［ Career Summary ］

Note: This does not represent all of the knowledge and experience possessed by each director.

Outside Director Independent

Katsuhiko Yoshida

［ Career Summary ］

1987

2002

2012

2015

2015

2016

2019

2023

2023

Registered as an attorney-at-law

Conciliation commissioner of Tokyo Family Court (present) Visiting Professor of Graduate School of Law, Chuo University (present)

Outside Director of Qol Co., Ltd. (Currently Qol Holdings Co., Ltd.) (present)

Outside Auditor of Kyodo News (present)

Outside Audit & Supervisory Board Member of the Company Outside Director of the Company (present)

Vice President of Tokyo Medical and Dental University Outside Director and Audit and Supervisory Committee

2003

2005

2007

2008

2008

2011

Corporate Officer and General Manager of Network Division of Sumitomo Corporation

Executive Officer and General Manager of Network Division of Sumitomo Corporation

Executive Officer and General Manager of Media Division of Sumitomo Corporation

Managing Executive Officer and General Manager of Media, Network & Lifestyle Retail Business Unit of Sumitomo Corporation Representative Director and Managing Executive Officer of Sumitomo Corporation

Representative Director and Senior Managing

2007

2012

2014

2015

2019

2022

2022

Executive Officer of Kao Corporation

Managing Executive Officer of Kao Corporation Representative Director, Managing Executive Officer of Kao Corporation

Representative Director, Senior Managing Executive Officer of Kao Corporation

President of Japan Childcare Support Association (present)

Outside Director of Kawasaki Heavy Industries, Ltd. (present)

Outside Director of the Company (present)

Senior Operating Officers

2024

2025

Member of Asahi Yukizai Corporation (present)

Vice President of Institute of Science Tokyo (present) Audit Commissioner of Chuo-ku, Tokyo (present)

2013

Executive Officer of Sumitomo Corporation Representative Director, President and Chief Operating Officer of SCSK Corporation

Senior Operating Officer

In charge of Machine Tools Business

Hideo Ina

Senior Operating Officer

In charge of Accounting Department

Mitsunori Morita

Senior Operating Officer

In charge of Watch Manufacturing

Hiroshi Utsunomiya

"Citizen Watch Co., Ltd." mentioned above in the career summary refers to the subsidiary that was newly incorporated in an incorporation-type split on April 2, 2007, and dissolved through being merged with the Company on October 1, 2016.

Dialogue with Shareholders and Investors Corporate Information

Policy for Constructive Dialogue with Shareholders

The Company holds a medium-term management plan briefing, a quarterly financial results briefing, and other conferences. The President and the Directors in charge of operations attend such dialogues with these shareholders.

In addition, the Company regularly communicates its messages through the General Meeting of Shareholders, various briefings and other meetings, websites and other channels, and media. Opinions and other comments received from the shareholders are shared among the top management and the related departments. The IR department and the related departments of the Company also liaise with each other and share the opinions of the

shareholders for arguments.

Company Overview (As of March 31, 2025)

Corporate name Citizen Watch Co., Ltd.

Established May 28, 1930

Headquarters 6-1-12, Tanashi-cho, Nishi-Tokyo-shi, Tokyo 188-8511, Japan

Representative Yoshitaka Oji, President and CEO

Capital ¥32,648 million

Employees 14,452 (consolidated)

Status of Main Dialogue Results in FY2024

Business description

Manufacturing and sale of watches and their components, and as a holding company, planning and implementation of Group management strategies, Group business auditing, development of Group technologies, intellectual property management, and other administrative operations.

Main responders: President & CEO, Director in charge of IR, Directors, Department in charge of IR

*The number of companies is the total.

Works

• Headquarters, Tokyo Works

• Tokorozawa Works

  Overseas Group

  EUROPE

• CITIZEN WATCH IBÉRICA, S.A.U.

• CITIZEN WATCH EUROPE G.M.B.H.

  Domestic Group

• CITIZEN MACHINERY CO., LTD.

• CITIZEN FINEDEVICE CO., LTD.

• CITIZEN SYSTEMS JAPAN CO., LTD.

• CITIZEN ELECTRONICS CO., LTD.

• CITIZEN WATCH MANUFACTURING CO., LTD.

• CITIZEN RETAIL PLANNING CO., LTD.

• CITIZEN T.I.C. CO., LTD.

• CITIZEN WATCH (CHINA) CO., LTD.

• CITIZEN WATCHES (H.K.) LTD.

• CITIZEN WATCHES (INDIA) PVT. LTD.

• TOKYO BIJUTSU CO., LTD.

• CITIZEN MICRO CO., LTD.

• CITIZEN CHIBA PRECISION CO., LTD.

• FUJIMI CORPORATION

• CITIZEN ELECTRONICS TIMEL CO., LTD.

• CITIZEN CUSTOMER SERVICE CO., LTD.

• CITIZEN LOGISTICS SERVICE CO., LTD.

• CITIZEN FINEDEVICE PHILIPPINES CORP.

• CITIZEN ELECTRONICS (CHINA) CO., LTD.

• C-E (HONG KONG) LTD.

  Main Themes and Concerns of the Dialogue

  • Medium- to long-term growth strategy of the Watches Business

  • Expansion of orders and production system in the Machine Tools Business

  • Concept of investing in growth and rationalization together with shareholder returns

  Stock Information (As of March 31, 2025)

  Shareholder Composition

  Total number of authorized shares	959,752,000
  Total number of shares issued	246,000,000
  Number of shareholders	98,384

  Treasury shares

• CITIZEN WATCH ITALY S.P.A.

• CITIZEN WATCH UNITED KINGDOM, LTD.

• MANUFACTURE LA JOUX-PERRET S.A.

• FREDERIQUE CONSTANT HOLDING SA

• CITIZEN MACHINERY EUROPE G.M.B.H.

• CITIZEN MACHINERY UK LTD.

• CITIZEN MACCHINE ITALIA S.R.L.

• CITIZEN MACHINERY FRANCE S.A.S.

• EGASCA, S.A.

• C-E (DEUTSCHLAND) G.M.B.H.

• CITIZEN SYSTEMS EUROPE G.M.B.H.

• CITIZEN WATCHES (MALAYSIA) SDN. BHD.

• CITIZEN WATCHES AUSTRALIA PTY LTD.

• GUANGZHOU MOST CROWN ELECTRONICS LTD.

• ROYAL TIME CITI CO., LTD.

• SUNCITI MANUFACTURERS LTD.

• CITIZEN WATCH MANUFACTURING (THAILAND) CO., LTD.

• CIVIS MANUFACTURING LTD.

• CITIZEN (CHINA) PRECISION MACHINERY CO., LTD.

• CINCOM MIYANO TAIWAN CO., LTD.

• CITIZEN MACHINERY ASIA CO., LTD.

• CITIZEN MACHINERY VIETNAM CO., LTD.

• JIANG XING ELECTRONICS LTD.

• FIRSTCOME ELECTRONICS LTD.

• CITIZEN SYSTEMS (H.K.) LTD.

• CITIZEN SYSTEMS (JIANGMEN) CO., LTD.

• CITIZEN SYSTEMS (DONGGUAN) CO., LTD.

  NORTH AMERICA, SOUTH AMERICA

• CITIZEN DE MEXICO, S. DE R. L. DE C. V.

• CITIZEN LATINAMERICA CORPORATION

• CITIZEN WATCH COMPANY OF AMERICA, INC.

• CITIZEN WATCH CANADA, LTD.

  Securities code 7762

  Individuals and others

  1%

  24%

  ASIA, OCEANIA

  • CITIZEN (SHANGHAI) TRADING CO., LTD.

  • CITIZEN MACHINERY PHILIPPINES INC.

  • MASTER CROWN ELECTRONICS (WUZHOU) LTD.

  • CITIZEN SEIMITSU (THAILAND) CO., LTD.

  • MIYOTA DEVELOPMENT CENTER OF AMERICA INC.

  • CECOL, INC.

  • CITIZEN SYSTEMS AMERICA CORP.

Stock exchange listing

Tokyo Stock Exchange Prime Market

Distribution of shareholders by

45%

Institutional investors in

Date of listing May 1949

Number of shares constituting one unit 100 shares

Overseas institutional investors

15%

shareholder type

13% 2%

Japan

Ratings

Status of Major Shareholders (As of March 31, 2025)

Business corporations, etc.

Securities companies

For more details, please refer to the following rating agency's website.

Rating and Investment Information, Inc. (R&I) https://www.r-i.co.jp/en/index.html

Note: Shareholding is calculated after deducting 1,731,920 treasury shares.

Major Social Recognition

FINANCIAL DATA FY2024

Analysis of Operating Results

Fiscal Year-End Operating Results

During the consolidated fiscal year under review, the

payments amounting to 7.6 billion yen.

(Millions of yen)

Business Risks

Of the matters regarding business and accounting situations, etc., described in the financial statements in security reports, the main risks that the operator recognizes as having the possibility of significantly impacting the financial condition, business performance, or cash flow condition of consolidated companies are as follows.

The Group's operating results might be affected by a variety of factors in addition to the above, including changes in social infrastructure and market competition as a result

of rapid advances in technology, changes in the Group's financial or managerial situation as a result of ongoing restructuring initiatives, trading restrictions in major markets in Japan or overseas, international taxation risk including the transfer pricing taxation system, or substantial changes in stock or bond markets.

Consolidated Balance Sheets

Citizen Watch Co., Ltd., and Consolidated Subsidiaries March 31, 2024 and 2025

(Millions of yen)

As of March 31, 2024 As of March 31, 2025

Consolidated Statements of Income

Citizen Watch Co., Ltd., and Consolidated Subsidiaries March 31, 2024 and 2025

(Millions of yen) (Millions of yen)

As of March 31, 2024 As of March 31, 2025

Year ended March 31, 2024

Year ended March 31, 2025

Consolidated Statements of Comprehensive Income

Citizen Watch Co., Ltd., and Consolidated Subsidiaries March 31, 2024 and 2025

Consolidated Statements of Changes in Equity

Financial year ended March 31, 2024

(Millions of yen)

Year ended March 31, 2024

(Millions of yen)

Year ended March 31, 2025

Share of other comprehensive income of entities accounted for using equity method

772 (152)

Total other comprehensive income * 22,930 * (5,237) Comprehensive income 45,736 18,567 Comprehensive income attributable to

Financial year ended March 31, 2025

(Millions of yen)

Consolidated Statements of Cash Flows

Citizen Watch Co., Ltd., and Consolidated Subsidiaries March 31, 2024 and 2025

Year ended March 31, 2024

(Millions of yen)

Year ended March 31, 2025