Consolidated Financial Results
for the Nine Months Ended DECEMBER 31, 2024
(Under Japanese GAAP)
February 12, 2025 | |||
Company name: | SEIKO GROUP CORPORATION | Listing: Tokyo | |
Securities code: | 8050 | URL: https://www.seiko.co.jp/en/ | |
Representative: | Shuji Takahashi, President | ||
Inquiries: | Masanobu Minami, General Manager, Accounting Department | Telephone: +81-3-3563-2111 |
Scheduled date to commence dividend payments | - |
Preparation of supplementary material on quarterly financial results | Available |
Holding of quarterly financial results briefing: | Scheduled (for institutional investors and analysts) |
(Yen amounts are rounded down to millions, unless otherwise noted.) |
1. Consolidated financial results for the nine months ended December 31, 2024 (from April 1, 2024 to December 31, 2024)
(1) Consolidated operating results (cumulative) | (Percentages indicate year-on-year changes.) | |||||||||||||||||
Net sales | Operating profit | Ordinary profit | Profit attributable to | |||||||||||||||
owners of parent | ||||||||||||||||||
Nine months ended | Millions of yen | % | Millions of yen | % | % | Millions of yen | % | |||||||||||
December 31, 2024 | 232,514 | 13.1 | 20,798 | 47.1 | 20,784 | 35.7 | 12,935 | 21.5 | ||||||||||
December 31, 2023 | 205,672 | 4.2 | 14,143 | 13.6 | 15,321 | 20.5 | 10,643 | 31.3 | ||||||||||
Note: Comprehensive income | For the nine months ended | December 31, 2024: | 19,162 | million | [14.2%] | |||||||||||||
For the nine months ended December 31, 2023: | 16,781 million | [22.3%] | ||||||||||||||||
Basic earnings | Diluted earnings | |||||||||||||||||
per share | per share | |||||||||||||||||
Nine months ended | Yen | Yen | ||||||||||||||||
December 31, 2024 | 316.88 | - | ||||||||||||||||
December 31, 2023 | 257.96 | - | ||||||||||||||||
(2) Consolidated financial position | ||||||||||||||||||
Total assets | Net assets | Equity-to-asset ratio | ||||||||||||||||
As of | Millions of yen | Millions of yen | % | |||||||||||||||
December 31, 2024 | 397,650 | 166,824 | 41.4 | |||||||||||||||
March 31, 2024 | 376,262 | 151,334 | 39.6 | |||||||||||||||
Reference: Equity | As of | December 31, 2024: | 164,613 million | |||||||||||||||
As of March 31, 2024: | 149,100 million | |||||||||||||||||
2. Cash dividends | ||||||||||||||||||
Annual dividends per share | ||||||||||||||||||
First quarter-end | Second quarter-end | Third quarter-end | Fiscal year-end | Total | ||||||||||||||
Fiscal year ended | Yen | Yen | Yen | Yen | Yen | |||||||||||||
March 31, 2024 | - | 37.50 | - | 42.50 | 80.00 | |||||||||||||
Fiscal year ending | - | 45.00 | - | |||||||||||||||
March 31, 2025 | ||||||||||||||||||
Fiscal year ending | 50.00 | 95.00 | ||||||||||||||||
March 31, 2025 | ||||||||||||||||||
(Forecast) | ||||||||||||||||||
Note: Revisions to the forecast of | cash dividends most | recently announced: Reviced | ||||||||||||||||
Refer to (3) Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2025 (FY2024), 1. Business Results, for detail. | ||||||||||||||||||
3. Consolidated financial forecast for the fiscal year ending March 31, 2025 (From April 1, 2024 to March 31, 2025) | ||||||||||||||||||
( Percentages indicate year-on-year changes.) | ||||||||||||||||||
Net sales | Operating profit | Ordinary profit | Profit attributable to | Basic earnings | ||||||||||||||
owners of parent | per share | |||||||||||||||||
Fiscal year ending | Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | Yen | |||||||||
March 31, 2025 | 306,000 | 10.5 | 20,000 | 35.7 | 20,000 | 25.8 | 12,500 | 24.4 | 306.17 | |||||||||
Note: Revision to the financial | forecast most recently announced: Revised | |||||||||||||||||
Refer to (3) Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2025 (FY2024), 1. Business Results, for detail. |
* Notes
(1) Sinificant Changes in the scope of consolidation during the period: Not applicable
Newly included: Not applicable | Excluded: Not applicable |
- Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: Not applicabl
- Changes in accounting policies, changes in accounting estimates, and restatemen
i) Changes in accounting policies due to revisions to acounting standards and other regulations | : Applicable |
ii) Changes in accounting policies due to other reasons | : Not applicable |
iii) Changes in accounting estimates | : Not applicable |
iv) Restatement | : Not applicable |
(Note) Refer to Changes in accounting policies, (3) Notes to Quarterly Consolidated Financial Statements, 2. Quarterly Consolidated Financia Statements and Major Notes, for detail
- Number of issued shares (common shares)
- Total number of issued shares at the end of the period (including treasury shares
As of December 31, 2024 | 41,404,261 | shares / | As of March 31, 2024 | 41,404,261 | shares | |
ii) Number of treasury shares at the end of period | 559,349 | 639,870 | ||||
As of December 31, 2024 | shares / | As of March 31, 2024 | shares | |||
iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year | ||||||
Nine months ended December 31, 2024 | 40,820,139 | shares | ||||
Nine months ended December 31, 2023 | 41,261,132 | shares |
(Note) For the purpose of calculating the number of treasury shares at the end of period and the average numbers of shares outstanding during the period, treasury shares held in the Board Benefit Trust (BBT) are included in the treasury shares deducted in the calculation.
- Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation
- Proper use of earnings forecasts, and other special matter
(Cautionary statements with respect to financial forecast
The financial forecasts which appear in this report have been prepared based solely on the information which was available to the Company as of the date on which the report was released and the Company does not in any way guarantee the achievement of the forecasts. Actual results may differ significantly from the forecasted figures due to a number of factors. For assumptions used in the financial forecasts and instructions to use the financial forecasts, refer to (3) Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2025 (FY2024), 1. Business Results, for detail.
SEIKO GROUP CORPORATION
Consolidated Financial Statements: 9M FY2024
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Contents
1. Business Results
(1) | Overview | 4 |
(2) | Financial Condition | 6 |
(3) | Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2025 | |
(FY2024) | 7 |
2. Quarterly Consolidated Financial Statements and Major Notes
(1) | Quarterly Consolidated Balance Sheets | 9 |
(2) | Quarterly Consolidated Statements of Income and Comprehensive Income | 12 |
(3) | Notes to Quarterly Consolidated Financial Statements | 14 |
(Going concern assumption) | 14 | |
(Significant changes in shareholder's equity) | 14 | |
(Changes in accounting policies) | 14 | |
(Segment information) | 15 | |
(Consolidated Statement of Cash Flows) | 16 |
SEIKO GROUP CORPORATION
Consolidated Financial Statements: 9M of FY2024
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1. Business Results
(1) Overview
During the quarterly (nine-month) accounting period ended December 31, 2024, the Japanese economy has shown a moderate recovery trend in personal consumption despite inflationary pressures, and demand from inbound tourists has also continued to recover steadily.
In the overseas economy, the United States has maintained steady growth driven primarily by consumption, while Europe has been gradually recovering due to the easing of inflation and the Paris Olympics. China faces challenges with sluggish consumer demand and adjustments in the real estate sector.
(Millions of yen)
9M FY2022 | 9M FY2023 | 9M FY2024 | Variance | Variance | |
(a) | (b) | ① | ① - (a) | ① - (b) | |
Net sales | 197,459 | 205,672 | 232,514 | 35,054 | 26,841 |
Operating profit | 12,446 | 14,143 | 20,798 | 8,351 | 6,655 |
% | 6.3% | 6.9% | 8.9% | 2.6pt | 2.0pt |
Ordinary profit | 12,716 | 15,321 | 20,784 | 8,068 | 5,463 |
% | 6.4% | 7.4% | 8.9% | 2.5pt | 1.5pt |
Profit attributable to owners of parent | 8,104 | 10,643 | 12,935 | 4,830 | 2,291 |
% | 4.1% | 5.2% | 5.6% | 1.5pt | 0.4pt |
Exchange rate (v. JPY) | |||||
USD | 136.5 | 143.3 | 152.6 | 16.2 | 9.3 |
EUR | 140.6 | 155.3 | 164.9 | 24.3 | 9.6 |
Amid these circumstances, in the Emotional Value Solutions Business, the Watches Business for the Japanese domestic market and the Wako business have significantly increased sales, driven by robust personal consumption and the inbound tourists demand. The Watches business for overseas markets also grew, particularly with the Seiko brands among the Global Brands, resulting in net sales significantly exceeding those of the same period previous fiscal year. The Device Solutions Business has been recovering from an adjustment phase for some products since the fourth quarter of the previous fiscal year, with net sales surpassing the same period previous fiscal year. The System Solutions Business continued to benefit from diversification and the expansion of stock businesses, achieving higher net sales year on year.
As a result, the Group's consolidated net sales for the quarterly (nine-month) accounting period ended December 31, 2024, were 232.5 billion yen (a 13.1% increase year on year). Domestic net sales totaled
124.5 billion yen (a 17.6% increase), while overseas net sales were 107.9 billion yen (a 8.2% increase), with overseas net sales accounting for 46.4% of the total net sales.
SEIKO GROUP CORPORATION
Consolidated Financial Statements: 9M of FY2024
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Advertising and promotion expenses for the quarterly (nine-month) period ended December 31, 2024, increased by more than 10% year on year, and selling, general, and administrative expenses increased by 6.6 billion yen year on year. Operating profit, driven by the Emotional Value Solutions Business, increased by 6.6 billion yen to 20.7 billion yen (a 47.1% increase year on year). Non-operating income and expenses deteriorated due to foreign exchange losses resulting from significant fluctuations in the yen exchange rate, leading to ordinary profit of 20.7 billion yen (a 35.7% increase year on year), which is 5.4 billion yen higher than the same period of the previous fiscal year. Extraordinary income and losses included 0.9 billion yen from gain on sale of non-current assets as extraordinary income, and
1.7 billion yen from impairment losses and business restructuring expenses as extraordinary losses. Profit attributable to owners of parent increased by 2.2 billion yen to 12.9 billion yen (a 21.5% increase year on year), mainly due to a increase in income taxes in conjunction with the improvement of revenue.
The average exchange rates for the nine-month period ended December 31, 2024 were 152.6 yen per US dollar and 164.9 yen per euro.
Results by Segment
Results for each segment are as follows:
a. Emotional Value Solutions Business (EVS Business)
Net sales in the EVS Business increased by 16.0 billion yen, or 11.3%, year on year to 158.6 billion yen.
In the domestic watch market, all Global Brands, including Grand Seiko, performed strongly, leading to a significant increase in sales compared to the same period of the previous fiscal year. Overseas, Seiko Presage led the growth, resulting in increased net sales compared to the same period of the previous fiscal year. Additionally, the external sales of watch movements grew steadily, resulting in increased net sales year on year.
Net sales in the Wako business increased year on year, supported by continued strong inbound tourists demand. However, net sales in the Clock and Sports & Facility businesses decreased compared to the same period of the previous fiscal year.
Operating profit increased by 5.5 billion yen year on year to 21.5 billion yen (a 34.8% increase).
b. Devices Solutions Business (DS Business)
The DS business recorded net sales of 45.5 billion yen (a 7.8% increase year on year) and operating profit of 1.8 billion yen (a 96.1% increase year on year).
Net sales of micro batteries significantly increased, driven by the continued strong performance of silver oxide batteries for medical equipment. Additionally, net sales of quartz crystals, which have been recovering from an adjustment phase since around the fourth quarter of the previous fiscal year, and high-performance metals for semiconductor production equipment, which had been sluggish until
SEIKO GROUP CORPORATION
Consolidated Financial Statements: 9M of FY2024
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the previous fiscal year, increased, leading to higher net sales and operating profit year on year. Furthermore, impairment losses was recorded of 1.4 billion yen on business assets in businesses with decreased profitability.
c. Systems Solutions Business (SS Business)
The SS business recorded net sales of 35.4 billion yen (a 23.8% increase year on year) and operating profit of 3.6 billion yen (a 5.1% increase year on year).
The IoT-related business saw steady growth due to the expansion of the telematics business. Additionally, the security-related business has expanded as a result of the synergy effects from the M&A conducted in the fourth quarter of the previous fiscal year. Consequently, the SS business achieved year on year increases in both net sales and operating profit for the 35th consecutive quarter, compared to the same quarter of the previous fiscal year.
- Financial Condition -Assets-
At the close of the nine-month period ended December 31, 2024, total assets amounted to 397.6 billion yen, a increase of 21.3 billion yen compared to the previous fiscal year-end, including the impact of exchange rates.
In current assets, cash and deposits increased by 15.7 billion yen, resulting in a total increase of 18.3 billion yen from the end of the previous fiscal year to 193.0 billion yen. In non-current assets, property, plant and equipment decreased by 2.0 billion yen, while investments and other assets increased by 5.0 billion yen, resulting in a total increase of 3.0 billion yen from the end of the previous fiscal year to 204.5 billion yen.
-Liabilities-
Regarding liabilities, short-term borrowings decreased by 1.8 billion yen, while long-term borrowings increased by 4.1 billion yen, bringing the total borrowings to 120.8 billion yen. Provisions for bonuses decreased by 1.3 billion yen, while notes and accounts payable - trade increased by 4.0 billion yen, and electronically recorded obligations - operating decreased by 1.4 billion yen. As a result, total liabilities increased by 5.8 billion yen from the previous fiscal year-end to 230.8 billion yen, including the impact of exchange rates.
-Net assets-
Regarding net assets, shareholders' equity increased by 9.5 billion yen, the valuation difference on available-for-sale securities increased by 2.2 billion yen, and the foreign currency translation adjustment increased by 3.6 billion yen. As a result, total net assets increased by 15.4 billion yen from the end of the previous fiscal year to 166.8 billion yen.
SEIKO GROUP CORPORATION
Consolidated Financial Statements: 9M of FY2024
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- Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2025 (FY2024) During the nine-month period ended December 31, 2024, the EVS Business achieved significant increases in both net sales and operating profit compared to the same period of the previous fiscal year, while the DS and SS businesses also performed steadily. Accordingly, the Company has revised its consolidated financial forecast and its forecasted results by segment as described below.
■ Forecast for the consolidated business results for the year ending March 31, 2025 (FY2024)
(Percentages indicate year-on-year changes.) | ||||||
Profit | ||||||
Net sales | Operating | Ordinary | attributable | Earnings | ||
profit | profit | to owners | per share | |||
(Billions of yen) | ||||||
of parent | ||||||
Previous forecast (A) | 306.0 | 18.0 | 18.0 | 11.5 | 281.68 yen | |
(as of Nov. 12, 2024) | ||||||
Current forecast (B) | 306.0 | 20.0 | 20.0 | 12.5 | 306.17 yen | |
(as of Feb. 12, 2025) | ||||||
Year-on-year change (B-A) | - | 2.0 | 2.0 | 1.0 | 24.49 yen | |
Year-on-year change (%) | - | 11.1 | 11.1 | 8.7 | 8.7 | |
■ Forecasted results by segment for the year ending March 31, 2025 (FY2024)
Net Sales | Operating Profit | |||
(Billions of yen) | Current | Previous | Current | Previous |
Emotional Value Solutions Business | 204.0 | 202.0 | 21.8 | 207 |
Devices Solutions Business | 63.0 | 63.0 | 2.5 | 2.5 |
Systems Solutions Business | 48.0 | 49.0 | 5.1 | 5.1 |
Total for reported segments | 315.0 | 314.0 | 29.4 | 28.3 |
Others | 1.0 | 1.0 | 0.2 | 0.1 |
Consolidated total | 306.0 | 306.0 | 20.0 | 18.0 |
Note: Consolidated total represents figures after consolidation adjustment such as the elimination of inter-segment sales.
SEIKO GROUP CORPORATION
Consolidated Financial Statements: 9M of FY2024
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The Company's basic policy for profit allocation is to enhance internal reserves to strengthen its management foundation and to focus on allocating stable profits to shareholders. In addition, the Company returns profits to shareholders primarily through dividends and will maintain for a consolidated payout ratio of 30% or above.
As announced today, since the consolidated financial forecast for the current fiscal year is expected to exceed the previous forecast, the Company has revised the year-end dividend forecast for the current fiscal year to 50.0 yen per share, which is an increase of 5.0 yen per share compared to the previous forecast.
Accordingly, the annual dividend for the current fiscal year, including the interim dividend of 45.0 yen, which has already been paid, will be 95.0 yen per share.
■ Dividend forecast | ||||||
Annual dividends per share | ||||||
Record date | 2nd quarter-end | Fiscal year-end | Total (annual) | |||
Previous forecast (as of Nov. 12, 2024) | - | 45.00 yen | 90.00 yen | |||
Current forecast (as of Feb. 12, 2025) | - | 50.00 yen | 95.00 yen | |||
Fiscal year ended March 31,2025 | 45.00 yen | - | - | |||
Fiscal year ended March 31,2024 | 37.50 yen | 42.50 yen | 80.00 yen |
The forecasted results which appear in this report have been prepared based solely on the information which was available to the company as of the date on which the report was released. As a result, actual results may differ from the forecasted figures due to a number of factors, such as changes in the business environment in the future.
SEIKO GROUP CORPORATION
Consolidated Financial Statements: 9M of FY2024
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2. Quarterly Consolidated Financial Statements and Major Notes
(1) Quarterly Consolidated Balance Sheets
(Millions of yen) | |||||
As of March 31, | As of December 31, | ||||
2024 | 2024 | ||||
Assets | |||||
Current assets | |||||
Cash and deposits | 32,683 | 48,478 | |||
Notes and accounts receivable - trade, and | 45,496 | 46,872 | |||
contract assets | |||||
Inventories | 84,382 | 85,823 | |||
Accounts receivable - other | 4,377 | 3,613 | |||
Other | 9,173 | 9,840 | |||
Allowance for doubtful accounts | (1,419) | (1,572) | |||
Total current assets | 174,694 | 193,056 | |||
Non-current assets | |||||
Property, plant and equipment | |||||
Buildings and structures | 82,230 | 83,433 | |||
Machinery, equipment and vehicles | 91,948 | 95,060 | |||
Tools, furniture and fixtures | 42,617 | 44,304 | |||
Other | 15,609 | 17,294 | |||
Accumulated depreciation | (172,067) | (180,400) | |||
Land | 54,144 | 52,717 | |||
Construction in progress | 1,553 | 1,580 | |||
Total property, plant and equipment | 116,037 | 113,990 | |||
Intangible assets | |||||
Goodwill | 8,029 | 6,951 | |||
Other | 10,159 | 11,270 | |||
Total intangible assets | 18,189 | 18,222 | |||
Investments and other assets | |||||
Investment securities | 56,374 | 60,875 | |||
Deferred tax assets | 1,984 | 2,050 | |||
Other | 9,131 | 9,590 | |||
Allowance for doubtful accounts | (148) | (135) | |||
Total investments and other assets | 67,341 | 72,381 | |||
Total non-current assets | 201,568 | 204,593 | |||
Total assets | 376,262 | 397,650 | |||
SEIKO GROUP CORPORATION
Consolidated Financial Statements: 9M of FY2024
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(Millions of yen) | |||
As of March 31, | As of December 31, | ||
2024 | 2024 | ||
Liabilities | |||
Current liabilities | |||
Notes and accounts payable - trade | 21,500 | 25,553 | |
Electronically recorded obligations - operating | 8,085 | 6,671 | |
Short-term borrowings | 64,350 | 62,486 | |
Current portion of long-term borrowings | 21,727 | 22,581 | |
Accounts payable - other | 15,291 | 11,322 | |
Income taxes payable | 4,678 | 4,711 | |
Provision for bonuses | 5,097 | 3,795 | |
Other provisions | 1,030 | 1,083 | |
Asset retirement obligations | 647 | 492 | |
Other | 23,050 | 26,206 | |
Total current liabilities | 165,460 | 164,905 | |
Non-current liabilities | |||
Long-term borrowings | 31,674 | 35,782 | |
Deferred tax liabilities | 6,912 | 8,168 | |
Deferred tax liabilities for land revaluation | 3,614 | 3,614 | |
Other provisions | 732 | 877 | |
Retirement benefit liability | 6,135 | 6,180 | |
Asset retirement obligations | 494 | 539 | |
Other | 9,903 | 10,756 | |
Total non-current liabilities | 59,467 | 65,919 | |
Total liabilities | 224,927 | 230,825 | |