Nikon : The Year Ended March 2021 Financial Results/Financial and Business Data

May 13, 2021

Consolidated Financial Results of the Year Ended March 31, 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 annual shareholders' meeting: June 29, 2021

Date for the filing of the Annual Securities Report: June 29, 2021

Date of year-end dividend payout: June 30, 2021

Preparation of supplementary materials for financial results: Yes

Information meeting for 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 Year ended March 31, 2021 (From April 1, 2020 to March 31, 2021)

(1) Consolidated Operating Results

(Percentage represents year-on-year changes)

Operating Profit

Profit (Loss)

Profit (Loss)

Profit (Loss)

Total

Revenue

Attributable

Comprehensive

(Loss)

before Tax

for Year

to Owners

Income for the

of Parent

Year

Millions

Millions

Millions

Millions

Millions

Millions

Year ended

of yen

%

of yen

%

of yen

%

of yen

%

of yen

%

of yen

%

451,223

(23.7)

(56,241)

－

(45,342)

－

(34,509)

－

(34,497)

－

4,168

－

March 31, 2021

Year ended

591,012

(16.6)

6,751

(91.8)

11,864

(86.5)

7,842

(88.2)

7,693

(88.4)

(11,969)

－

March 31, 2020

Basic Earnings

Diluted Earnings

Ratio of Profit (Loss)

Ratio of Profit (Loss)

Ratio of Operating

to Equity

before Tax to Total

Profit (Loss) to

per Share

per Share

Attributable to

Assets

Revenue

Owners of Parent

Yen

Yen

%

%

%

Year ended March 31, 2021

(93.96)

(93.96)

(6.4)

(4.5)

(12.5)

Year ended March 31, 2020

19.93

19.85

1.3

1.1

1.1

(Notes) Share of profit of investments accounted for using equity method:

Year ended March 31, 2021	1,969	million yen
Year ended March 31, 2020	1,816	million yen

(2) Consolidated Financial Position

			Equity Attributable	Ratio of Equity	Equity per Share
			Attributable to
	Total Assets	Total Equity	to Owners of	Attributable to
	Owners of Parent
			Parent	Owners of Parent
			to Total Assets
	Millions of yen	Millions of yen	Millions of yen	%	Yen
As of March 31, 2021	989,737	538,726	537,585	54.3	1,464.06
As of March 31, 2020	1,005,881	541,760	540,652	53.7	1,472.69

(3) Consolidated Cash Flows

	Cash Flows from	Cash Flows from	Cash Flows from	Cash and Cash
	Equivalents
	Operating Activities	Investing Activities	Financing Activities
	at End of Year
	Millions of yen	Millions of yen	Millions of yen	Millions of yen
Year ended March 31, 2021	4,966	18,024	(4,991)	351,798
Year ended March 31, 2020	16,419	(21,281)	(72,739)	324,034

2. Dividends

		Dividend per Share				Ratio of
						Total Cash	Dividend	Dividend to
	First	Second	Third			Equity
			Dividend	Payout Ratio	Attributable to
	quarter	quarter	quarter	Year-end	Annual
	(Annual)	(Consolidated)	Owners of the
	ended	ended	ended
					Parent
								(Consolidated)
	Yen	Yen	Yen	Yen	Yen	Millions of yen	%	%
Year ended March 31, 2020	－	30.00	－	10.00	40.00	15,382	200.7	2.6
Year ended March 31, 2021	－	10.00	－	10.00	20.00	7,355	－	1.4
Year ending March 31, 2022	－	15.00	－	15.00	30.00		68.9
(Planned)

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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
		tax		owners of parent	per share
	Millions			Millions		Millions			Millions
Second quarter ending	of yen		%	of yen	%	of yen		%	of yen	%	Yen
265,000		50.9	15,000	－	16,000		－	12,000	－	32.68
September 30, 2021
Fiscal year	510,000		13.0	20,000	－	22,000		－	16,000	－	43.57

4. Others

1. Changes in Significant Subsidiaries during 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 fiscal year under review.
2. Changes in Accounting Policies and Changes in Accounting Estimates
3. 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
4. Number of shares issued (ordinary shares)

1. Number of shares issued as of the term end (including treasury shares):

Year ended March 31, 2021	378,336,521	shares
Year ended March 31, 2020	378,336,521	shares

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

Year ended March 31, 2021	11,147,773	shares
Year ended March 31, 2020	11,216,862	shares

3. Average number of shares during the term:

Year ended March 31, 2021	367,143,534	shares
Year ended March 31, 2020	386,016,389	shares

(Note) The Company's shares held by the Executive Compensation BIP trust are included in the number of treasury shares.

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(Reference)

1. Non-Consolidated Results of the Year ended March 31, 2021 (April 1, 2020 to March 31, 2021)

(1) Financial Results

(Percentage represents year-on-year changes)

Net Sales

Operating Profit

Ordinary Profit

Net Income

(Loss)

(Loss)

Millions of

%

Millions of

%

Millions of

%

Millions of

%

yen

yen

yen

yen

Year ended March 31, 2021

302,057

(25.6)

(41,646)

－

14,472

(47.1)

60,771

－

Year ended March 31, 2020

406,194

(20.3)

(9,697)

－

27,332

(41.0)

(9,662)

－

Basic Earnings

Diluted Earnings

per Share

per Share

Yen

Yen

Year ended March 31, 2021

165.52

164.67

Year ended March 31, 2020

(25.03)

－

(2) Financial Position

Total Assets

Net Assets

Equity Ratio

Net Assets per

Ordinary Share

Millions of yen

Millions of yen

%

Yen

Year ended March 31, 2021

734,760

342,155

46.3

926.32

Year ended March 31, 2020

679,431

276,848

40.5

748.84

(Reference) Equity:

Year ended March 31, 2021

340,134

million yen

Year ended March 31, 2020

274,915

million yen

This report is out of scope of audit by certified public accountants or auditing firms.

Appropriate use of business forecasts; other special items

Performance forecasts and other forward-looking statements contained in this report are based on information and assumptions at the time of this report's release such as most recent market forecasts and exchange rates. Actual results may differ materially from the forecast due to a variety of risk factors, including, but not limited to the above assumptions. For more information about the Company's business forecasts, please refer to page 7.

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Contents

1. Overview of Consolidated Operating Results and Others ………………………………………………………………5

(1)	Overview of Consolidated Operating Results ………………………………………………………………………	5
(2)	Overview of Financial Position…………………………………………………………………………………………	6

1. 1. Overview of Cash Flows………………………………………………………………………………………………… 7
   2. Future Outlook…………………………………………………………………………………………………………… 7
   3. Shareholder Return Policy and Dividends………..…………………………………………………………………8
   4. Business and Other Risks…………………..…………………………………………………………………………… 8
2. Status of Nikon Group……………………………………………………………………………………………………… 11
3. Basic Policy on Adoption of Accounting Standards…………………………………………………………………12
4. Consolidated Financial Statements…………………………………………………………………………………………… 13
5. 1. Consolidated Statement of Financial Position…………………………………………………………………………13

(2) Consolidated Statement of Profit or Loss and Comprehensive Income ……………………………………………15

1. Consolidated Statement of Changes in Equity…………………………………………………………………………17
2. Consolidated Statement of Cash Flows…………………………………………………………………………………19
3. Notes to Consolidated Financial Statements……………………………………………………………………………20
   (Going Concern Assumption)……………………………………………………………………………………………. 20

(Basis for Preparation of Consolidated Financial Statements) ….……………………………………………………20

(Segment Information)…………………………………………………………………………………………………… 21

(Impairment Losses on Non-Financial Assets) ………………………………………………………………… 25

(Selling, General and Administrative Expenses) …………………………………………………………………27

(Restructuring Costs) …………………………..…………………………………………………………………27

(Land Improvement Costs)………………………………………………………………………………………………… 28

(Earnings per Share)…………………………………………………………………………………………………… 29

(Contingent Liabilities)…………………………………………………………………………………………………… 30

(Significant Subsequent Events)………………………………………………………………………………………… 30

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1. Overview of Consolidated Operating Results and Others

(1) Overview of Consolidated Operating Results

During the fiscal year ended March 31, 2021, the global economy showed signs of picking up in some areas amid the spread of COVID-19 lingering since the previous fiscal year, backed by measures and policies implemented by governments worldwide, vaccine rollouts and other factors. Despite such signs, however, difficult conditions persisted due in part to the second and third waves of COVID-19 and the outbreak of its variants.

By the business segment, in the Imaging Products Business, the digital camera market experienced a temporary plunge in demand under the influence of the spread of COVID-19 but saw a marked recovery from the second half onwards. In the Precision Equipment Business, capital investments related to FPDs including both mid-to-small size and large-size panels remained solid, while capital investments related to semiconductors was on the recovery track. In the Healthcare Business, both the bioscience and ophthalmic diagnosis markets generally remained sluggish amid the rise of COVID-19 cases has shifted to be recovered since the third quarter.

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 the restructuring of the Imaging Products Business, the Group sought to improve its earning capacity and reform the cost structure of existing businesses by reorganizing its production and sales systems, optimizing its workforce, and shifting its resources to growth area. In addition, with the aim of creating new pillars of profit, the Group worked on development and distribution of highly unique optics-based products to expand its Material Processing Business, as well as exploring opportunities for alliance and M&A. Further, as measures to mitigate the impact of COVID-19, the Group worked to localize businesses and digitalize operations. The Company also made efforts to further increase the Board of Directors' diversity and enhance the effectiveness of the board to ultimately strengthen the governance system.

As a result of the above, during the fiscal year ended March 31, 2021, revenue decreased by 139,788 million yen (23.7%) year on year to 451,223 million yen, operating loss amounted to 56,241 million yen (compared to operating profit of 6,751 million yen for the previous fiscal year), loss before tax amounted to 45,342 million yen (compared to profit before tax of 11,864 million yen for the previous fiscal year), and loss attributable to owners of parent amounted to 34,497 million yen (compared to profit attributable to owners of parent of 7,693 million yen).

Performance by segment is as follows.

Note that as stated in "4. Consolidated Financial Statements (5) Notes to Consolidated Financial Statements (Segment Information)," the reportable business segments have been changed from the fiscal year ended March 31, 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 revised business segments.

[Imaging Products Business]

Among the digital camera-interchangeable lens type, sales of full-frame mirrorless cameras Z 7II and Z 6II remained strong. In this business segment, the Group sought to expand sales of mid- to high-end products to professionals and hobbyists by enhancing the lineup of interchangeable lenses for mirrorless cameras.

However, unit sales declined on the back of market shrinkage besides subdued demand amid the spread of COVID-19. As a result, in the Imaging Products Business segment, the Group recorded revenue of 150,218 million yen (down 33.5 % year on year), and operating loss of 35,779 million yen (compared to operating loss of 17,153 million yen for the previous

fiscal year) for the reasons such as the recognition of impairment loss on non-current assets and restructuring costs.

[Precision Equipment Business]

In the FPD lithography system field, the Group resumed installations in July 2020, and as a result, overall unit sales

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