Consolidated Financial Results of the First Half Ended September 30, 2021 (IFRS)

November 4, 2021

Consolidated Financial Results of the First Half Ended September 30, 2021 (IFRS)

Corporate Name: NIKON CORPORATION

Securities code number: 7731Stock exchange listings: Tokyo

Representative: Toshikazu Umatate, Representative Director, President

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

TEL: [phone]URL: https://www.nikon.com

Date for the filing of the Quarterly Securities Report: November 4, 2021

Date for the commencement of dividend payments: December 1, 2021

Preparation of supplementary materials for quarterly financial results: Yes

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

(Amounts are rounded to the nearest millions of yen)

1. Consolidated Results of the First Half ended September 30, 2021 (From April 1, 2021 to September 30, 2021)

(1) Consolidated Operating Results

(Percentage represents year-on-year changes)

Profit (Loss)

Total

Revenue

Operating

Profit (Loss)

Attributable

Comprehensive

Profit (Loss)

before Tax

to Owners

Income for the

of Parent

Period

Millions

%

Millions

%

Millions

%

Millions

%

Millions

%

of yen

of yen

of yen

of yen

of yen

First half ended September 30, 2021

273,049

55.5

32,105

－

35,913

－

26,464

－

39,894

－

First half ended September 30, 2020

175,647

(39.7)

(46,635)

－

(38,896)

－

(31,537)

－

(8,911)

－

Basic Earnings

Diluted Earnings

per Share

per Share

Yen

Yen

First half ended September 30, 2021

72.07

71.68

First half ended September 30, 2020

(85.90)

(85.90)

(2) Consolidated Financial Position

Equity Attributable

Ratio of Equity

Attributable to

Total Assets

Total Equity

to Owners of

Owners of Parent

Parent

to Total Assets

Millions of yen

Millions of yen

Millions of yen

%

As of September 30, 2021

1,000,292

576,460

573,986

57.4

As of March 31, 2021

989,737

538,726

537,585

54.3

2. Dividends

Dividend per Share

First quarter

Second quarter

Third quarter

Year-end

Annual

ended

ended

ended

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2021

－

10.00

－

10.00

20.00

Year ending March 31, 2022

－

20.00

Year ending March 31, 2022

－

20.00

40.00

(Planned)

(Note) Revision of cash dividend forecast from the latest announcement: None

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3. Consolidated Financial Forecasts for the Year ending March 31, 2022 (From April 1, 2021 to March 31, 2022)

(Percentage represents year-on-year changes)

	Revenue		Operating Profit	Profit before		Profit Attributable to	Basic earnings
		Taxes		Owners of Parent	per Share
	Millions of		%	Millions of	%	Millions of		%	Millions of	%	Yen
	yen			yen		yen			yen
Full year	535,000		18.6	34,000	－	39,000		－	29,000	－	78.98

(Note) Revision of forecast from the latest announcement: None

4. Others

(1) Changes in Significant Subsidiaries during the First Half of the Current Fiscal Year: None

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

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

As of September 30, 2021	378,336,521	shares
As of March 31, 2021	378,336,521	shares
2. Number of treasury shares as of the term end:
As of September 30, 2021	11,136,937	shares
As of March 31, 2021	11,147,773	shares

3. Average number of shares during the term (Quarterly total):

First half ended September 30, 2021	367,192,174	shares
First half ended September 30, 2020	367,130,227	shares

※This report is out of scope of the quarterly review procedure by certified public accountants or auditing firms.

※Appropriate use of business forecasts; other special items

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

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Attached Material

Contents

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

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

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

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

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

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

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

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

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

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

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1. Performance and Financial Position

1. Qualitative Information on Consolidated Operating Results

During the first half ended September 30, 2021 (from April 1, 2021 to September 30, 2021), economic conditions generally showed a trend to recovery from the COVID-19 driven slowdown. In spite of some lingering effects of COVID-19, such factors as the rollout of vaccinations and fiscal stimulus in various countries contributed to continued recovery, mainly in the United States and China.

By the business segment, in the Imaging Products Business, demand saw recovery due to a reduced impact of the spread of COVID-19, but supply problems surfaced mainly due to the shortage of semiconductors. In the Precision Equipment Business, capital investments in the field related to FPDs, including both large-size panels and mid-to-small size panels, remained solid. Meanwhile, capital investments related to semiconductors were on an expansionary trend. In the Healthcare Business, the life science solutions market largely remained on a recovery path, despite some differences among regions, and the eye care solutions market remained strong in each region. In the Components Business, the Digital Solutions Business continued a solid trend in the markets related to optical parts & components and encoders. In the Customized Products Business, EUV-related markets remained brisk.

Under the medium-term management plan announced in May 2019, the Group focused on a range of measures to achieve sustainable growth in corporate value over the medium to long term.

First, besides a further restructuring of the Imaging Products Business, the Group sought to improve its earning capacity through efforts such as expanding the service businesses and peripheral businesses in the Precision Equipment Business. The Group also focused its efforts on scaling up the Components Business and pursued the exploration of growth areas. Among the Components Business, the Material Processing Business-one of the areas the Group focused on during the period of the medium-term management plan-has started to receive orders of a subtractive processing machine that enables high-precision surface finishing and micro fabrication as well as a metal processing machine equipped with functions of additive manufacturing and measurement.

Furthermore, the Group remained committed to enhancing corporate governance through such measures as to improve the effectiveness of the Board of Directors and strengthen risk management.

Under these circumstances, during the first half ended September 30, 2021, revenue increased 97,402 million yen (55.5%) year on year to 273,049 million yen, operating profit amounted to 32,105 million yen (compared to operating loss of 46,635 million yen in the same period of the previous fiscal year), profit before income taxes amounted to 35,913 million yen (compared to loss before income taxes of 38,896 million yen in the same period of the previous fiscal year), and profit attributable to owners of parent amounted to 26,464 million yen (compared to loss attributable to owners of parent of 31,537 million yen in the same period of the previous fiscal year).

Performance by segment is as follows.

As stated in "2. Quarterly Condensed Consolidated Financial Statements (5) Notes to Quarterly Condensed Consolidated Financial Statements (Segment Information)," the reportable segments have been changed from the three months ended June 30, 2021. Accordingly, the operating results for the previous fiscal year used in the year-on-year comparisons below have been reclassified in line with the change in the segment structure.

1. Imaging Products Business

In July 2021, the Group launched the Z fc mirrorless camera adopting a heritage design of the NIKON FM2 camera and received favorable recognition. The Group also sought to expand sales of mid- to high-end products to professionals and hobbyists by enhancing the lineup of interchangeable lenses for mirrorless cameras, leading to an increase in sales volume.

As a result, in the Imaging Products Business segment, the Group recorded revenue of 89,251 million yen (up 38.6% year on year), and operating profit of 12,574 million yen (compared to operating loss of 27,834 million yen in the same period of the previous fiscal year).

1. Precision Equipment Business

In the FPD lithography system field, the Group recorded significant increases in both revenue and profit compared to the same period last year during which installed systems were limited. In the period under review, the smooth progress of installations contributed to the higher revenue and profit, despite some adverse effects of travel restrictions on the business amid the spread of COVID-19.

In the semiconductor lithography system field, unit sales declined for new systems but increased for refurbished systems.

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Thus, profit increased from the same period last year during which the Group recorded loss on disposal and write-down of inventories.

As a result, in the Precision Equipment Business segment, the Group recorded revenue of 119,289 million yen (up 86.9% year on year), and operating profit of 21,735 million yen (compared to operating loss of 7,455 million yen in the same period of the previous fiscal year).

1. Healthcare Business

In the life science solutions field, the Group recorded a year-on-year increase in revenue, despite some differences among regions, compared to the same period last year during which the spread of COVID-19 adversely affected sales. In the eye care solutions field, a significant increase in revenue was recorded due to the recovery of market conditions in each region.

As a result, in the Healthcare Business segment, the Group recorded revenue of 33,057 million yen (up 28.6% year on year), and operating profit of 939 million yen (compared to operating loss of 2,358 million yen in the same period of the previous fiscal year).

1. Components Business

The Digital Solutions Business recorded increases in both revenue and profit as sales of optical parts & components and encoders remained brisk.

The Customized Products Business recorded increases in both revenue and profit, backed by strong sales growth of EUV- related components.

As a result, in the Components Business segment, the Group recorded revenue of 16,779 million yen (up 60.0% year on year), and operating profit of 3,493 million yen (compared to operating loss of 932 million yen in the same period of the previous fiscal year).

1. Industrial Metrology and Others

The Industrial Metrology Business recorded an increase in revenue and a decrease in loss due to a continued recovery in capital investments in the fields of electronic components, semiconductors, and automotive-related.

As a result, in the Industrial Metrology and Others segment, the Group recorded revenue of 14,672 million yen (up 30.6% year on year), but incurred operating loss of 1,625 million yen (compared to operating loss of 597 million yen in the same period of the previous fiscal year) partly due to the recording of loss on disposal and write-down of inventories at some manufacturing subsidiaries.

1. Qualitative Information on Consolidated Financial Position

The balance of total assets as of September 30, 2021 increased 10,555 million yen from the end of the previous fiscal year to 1,000,292 million yen. This was mainly because increases were seen in cash and cash equivalents by 17,366 million yen and in property, plant and equipment, right-of-use assets, goodwill and intangible assets collectively by 11,687 million yen as well as in other financial assets included in non-current assets by 4,549 million yen due mainly to an increase in market value of shares held, while decreases were seen in inventories by 13,113 million yen, in other current assets by 5,690 million yen due mainly to a decrease in accounts receivable, and in trade and other receivables by 2,342 million yen.

The balance of total liabilities as of September 30, 2021 decreased 27,179 million yen from the end of the previous fiscal year to 423,832 million yen. This was primarily because decreases were seen in advances received by 40,842 million yen and in trade and other payables by 7,902 million yen despite increases in income tax payables by 11,021 million yen, in other financial liabilities included in current and non-current liabilities collectively by 8,440 million yen due mainly to an increase in lease liabilities, and in bonds and borrowings by 4,347 million yen.

The balance of total equity as of September 30, 2021 increased 37,734 million yen from the end of the previous fiscal year to 576,460 million yen. This was mainly because retained earnings increased by 34,866 million yen primarily as a result of posting profit attributable to owners of parent of 26,464 million yen, transfer from other components of equity to retained earnings of 12,074 million yen, and net of appropriation of dividends from retained earnings of 3,672 million yen; other components of equity increased by 1,414 million yen due mainly to an increase in market value of shares held; and non- controlling interests increased by 1,332 million yen as a result of making Morf3D Inc. a subsidiary, etc.

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