Results Briefing for Fiscal Year Ended
January 31, 2023

March 10, 2023

Ryoyo Electro Corporation
Prime Market, Tokyo Stock Exchange (Ticker Code: 8068)
https://www.ryoyo.co.jp/en/

Copyright 2023 © Ryoyo Electro Corporation

Overview of Fiscal Year Ended
January 31, 2023

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Copyright 2023 © Ryoyo Electro Corporation

Intentions for the annual business planat beginning of year and changes through the year
Intentions at the beginning of the year

Main factors

Changes through the year

The impact of the component supply shortage was
Semiconductor
severe at the beginning of the fiscal year and wasMarket Conditions
expected to continue until the latter half of the fiscal year.

While the temporary increase in demand exceeded
our initial expectations, a gradual balancing of supply
and demand is beginning to be seen in some fields.

Although sales for TVs were expected to remain
Semiconductor
relatively high, overheating was expected to subside
Business for TVs
following the rapid expansion up through last fiscal year.

Along with the absence of any big decline, newprojects contributed to the results, and the year
ended with a YoY increase in sales.

The contribution was expected to peak in this fiscal
year, with some projects sliding from the previous fiscal
year.

OnlineEligibility
Verification
Business

This business expanded as initially expected, and an
extension of government subsidies is also expected
to have a positive impact for the next fiscal year.

Change in forms of transaction for some large-lot
business was expected to have an impact from thesecond half of the fiscal year.

SoftwareBusiness

Since large-lot business did not come to an end, theimpact of this factor on the current fiscal year is
expected to be minor.

Exchange Rate
Trends

A rapid depreciation of the yen drove up profitability.

(Not factored in at the beginning of the period)

Although sales are expected to decline
mainly due to changes in the businessenvironment for large-lot business,
estimated operating profit increased slightly
YoY due to improved profit margins resulting
from changes in sales composition.

The earnings forecast was revised upward
twice during the period, so sales and profits are
expected to significantly exceed the initial plan.
(Operating profit reached a record level for the
first time in 21 years)
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Copyright 2023 © Ryoyo Electro Corporation

Profit/loss: Results➢ While net sales were initially expected to decline at the beginning of the fiscal year, they continued toincrease due to strong demand amid component shortages.
→Net sales of semiconductors & devices and ICT & solutions both grew year on year.
➢ Operating profit doubled YoY, and the operating margin greatly surpassed 3%. Operating profit
exceeded ¥4 billion for the first time since the fiscal year ended January 31, 2002 (21 years ago).
➢ With the rise in the profit level, ROE improved significantly to 7.0%, marking the first time it has
exceeded 5% since the year ended January 2001.
FY2022/1*(Billion yen)

FY2023/1*
Aug.
Nov.
Revised Revised
Target Target

YoY Change

ResultInitialTargetNet sales

112.1

100.0

113.0

123.0

129.9

+17.8

+15.9%

Gross profit

10.73

10.80

12.35

13.10

13.58

+2.85

+26.6%(%)

9.6% 10.8% 10.9% 10.7% 10.5%

Selling, general and administrative expenses

8.47

8.50

8.75

8.90

8.89

+0.42

+4.9%

Operating profit

2.26

2.30

3.60

4.20

4.69

+2.44

+107.9%

(%)

2.0%

2.3%

3.2%

3.4%

3.6%

Ordinary profit

2.40

2.20

3.40

4.00

4.48

+2.08

+86.5%

Profit attributable to owners of parent

1.87

1.53

2.35

2.80

3.06

+1.18

+63.1%

ROE

4.7%

3.6%

5.4%

6.4%

7.0%

Result%FY2022/1: Fiscal year ended January 2022, FY2023/1: Fiscal year ended January 2023

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Copyright 2023 © Ryoyo Electro Corporation

Factors impacting sales change➢ Semiconductors & devices: Amid component shortages and stronger-than-expected demand, sales
increased YoY for all applications, including industrials and PCs & peripherals.
➢ ICT & solutions: Sales of embedded products increased significantly, including AI and Deep Learning
products, and sales of each item remained at a high level.
(Billion yen)

Semiconductors & devices

ICT & solutions(Net sales by application)(Net sales by product)

Year-on-year change: Up ¥15.4 billion

Year-on-year change: Up ¥2.5 billion

Vehicleinstallation
Digitalconsumer Communication +1.7

Industrials &others+6.1

PCs & electronics+2.7
peripherals
+2.7

+2.3

Embedded
I/O
PC/server/
devicesequipment
network& others
+0.3
+0.7
+2.5
​

​

​

Software
-1.1

​
​

129.9

​
​

​

112.1

FY2022/1
22.1期
Results
年間

4

FY2023/1
23.1期
Results
年間

Copyright 2023 © Ryoyo Electro Corporation

Supplement: Net sales by productSemiconductors & devices

ICT & solutions

79.2 (60.9%)

50.8 (39.1%)

FY2023/1
Results+24.1%

48.3 (43.1%)

112.1

Semiconductors & devices
Net sales by product

63.8

ICT & solutions

Net sales by application

79.2

79.2

8.8

7.2
63.8 Communication

Analog & power
semiconductors

Net sales by product

50.8
48.3

11.2

PC/server/network

6.9

I/O equipment

16.4

Software

11.9

5.0

6.3

Digital consumer
electronics

39.9
Logic

30.3

7.2

27.6

35.5 semiconductors

Vehicleinstallation

2.3
5.3
3.1
4.6

Memorysemiconductors
RF & opticalsemiconductors
LCDs

7.9
4.1
6.2

9.0

Other electronic
devices

12.3

FY2022/1
22.1期
Results
年間

129.9

+5.1%

63.8 (56.9%)

FY2022/1
Results(Billion yen)

FY2023/1
23.1期
Results
年間

12.9
16.0

PCs &
peripherals

3.9
15.8

21.9
Industrials &others

FY2022/1
22.1期
Results
年間

FY2023/1
23.1期
Results
年間

5

15.3

devices13.9 Embedded& others

FY2022/1
22.1期
Results
年間

16.4

FY2023/1
23.1期
Results
年間

Copyright 2023 © Ryoyo Electro Corporation

Our Medium-Term Initiatives
and Alliance with Ryosan

6

Copyright 2023 © Ryoyo Electro Corporation

External environment for electronics trading companies
Suppliers

Customers

Manufacturers of electronic components
and/or IT equipment

Manufacturers of assembled products & end users

Expanding scale through mergers andacquisitions, focusing on specific fields

Digital transformation of society on the whole,fueled partly by COVID-19

Further review of agency and commercial rights

Changing and diversifying customer needs

Main risk factors in recent years
Stagnant market inJapan

Geopolitical risk

Semiconductor
supply shortages

COVID-19 impact

Exchange rate
trendsLow-profitability structure, and susceptibility to changes in the business environment

Electronics trading companies

Required functions and roles are changing
Dependence on Business model
product
centered oncompetitiveness product sales

Deep considerationof client needs

7

Creation of
new value

Copyright 2023 © Ryoyo Electro Corporation

Ryoyo’s vision
Ryoyo’s Vision
To provide the best solutions for our customers’ issues andproblems in a faster and better manner than anyone else.

Building a strong business foundation that is resilient tochanges in the business environment

Alliance with
Ryosan Company, Limited

To create winning models thatorganically combine each strategy

Strategic framework of thethree-year business plan

1. Expand and deepen
customer engagement

Explore new growth
opportunities, including
alliances with other companies

2. Pursue uniqueness3. Increase productivity

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Copyright 2023 © Ryoyo Electro Corporation

Creating winning models: A circular business model
By utilizing the information on market needs obtained by engaging with end
users, Ryoyo will become a key player in creating a business model leveraging
the circulation of information and value throughout the supply chain, thereby
providing the best solutions for our customers’ issues and problems.
Engagement with Customers

Engagement with End Users

Manufacturers of assembled products,
system integrators (SIers), etc.
Planning

DesignDevelopment

Purchasing

Manufacturing

Sales

Installation

Operation

Maintenance

Places to uncovermarket needs

Ryoyo
Semiconductor
products

Serviceproducts

ICT products

Expanding engagement with customers byleveraging information on market needs

Strategy 1

Pursue uniqueness: Combinations that meet market needs
Strategy 2

Technical
services

New hardware/
softwareOriginal services

Increase productivity: Establishing mechanisms to support Strategies 1 & 2Strategy 3

Sales
productivity

Standardization

Business
process reform

9

Remote work

Digitaltransformation
Copyright 2023 © Ryoyo Electro Corporation

Alliance with Ryosan
Strengthening and expanding the alliance in stages to deliver new
growth opportunities for both companies

Spring 2022
Started discussions on potential business synergies

Announcement on February 7, 2023
Acquired 18.71% of Ryosan shares (percentage of voting rights)

Announcement on March 9, 2023
Acquiring additional shares of Ryosan, to make it an equity-method affiliate (planned)

Continuing to accelerate discussions and initiatives to realize synergies
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Copyright 2023 © Ryoyo Electro Corporation

Alliance with Ryosan
Working to make the most of both companies’ various management resources:
Outstanding relationships with customers, products and solutions
Business Structure &Products Handled

Customer BaseRyoyo Electro
Information

Technology

RyosanMinimal overlap by both
Acceleration of new value
creation by combining products
and services

Potential synergies
Large

Pursuit of quality

Collaboration inexisting business areas(cross-selling, etc.)
Pursuit of quantity

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Copyright 2023 © Ryoyo Electro Corporation

Business Plan for Fiscal YearEnding January 31, 2024

12

Copyright 2023 © Ryoyo Electro Corporation

Intentions of the business plan for fiscal year ending
January 2024
Outlook for the fiscal year ending January 2024

Adjustment fromsemiconductor market
boom

Reduction of marginal
gains due to exchange
rate fluctuations

Ending oflarge-lot businessA severe business environment is assumed due to changes inexternal factors and factors unique to Ryoyo
This fiscal year will show the results of past reforms and various measures.

Semiconductors & devices

ICT & solutions➢ Contribution by new products and newcommercial rights➢ Further enhancement of service business➢ Focus on the medical field

Communications equipment, power and display devices,and sensors, etc.

Support for everything from manufacturing to kitting andequipment installation➢ Active cultivation of business outside Japan

Promotion of a circular business model for semiconductors,
ICT devices, and services
Creation of unique solutions for last-mile delivery(Voice recognition, IoT platforms, etc.)
Pursuing business synergies with Ryosan
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Copyright 2023 © Ryoyo Electro Corporation

Profit/loss: Annual targets➢ Net sales are expected to decrease in both semiconductors & devices and ICT & solutions.
➢ Gross profit margin is expected to improve mainly thanks to changes in sales composition, while
operating profit margin is expected to remain at the 3% level.
➢ Gain on bargain purchase: ¥3.1 billion (provisional figure) is included in non-operating profit, andordinary profit and net profit attributable to owners of parent are expected to increase significantly.
* Share of profit/loss of entities accounted for using equity method was not factored into the plan at the beginning of
the fiscal year
FY2023/1* FY2024/1*
ResultTarget(Billion yen)

YoY Change%

Net sales

129.9

120.0

-9.9

-7.6%

Gross profit

13.58

12.80

-0.78

-5.8%

(%)

10.5%

10.7%

Selling, general and administrative expenses

8.89

9.20

+0.31

+3.5%

Operating profit

4.69

3.60

-1.09 -23.3%

(%)

3.6%

3.0%

Ordinary profit

4.48

6.50

+2.02 +45.2%

Profit attributable to owners of parent

3.06

5.50

+2.44 +79.9%

ROE

7.0%

12.1%

* FY2023/1: Fiscal year ended January 2023, FY2024/1: Fiscal year ending January 2024

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Copyright 2023 © Ryoyo Electro Corporation

Factors impacting sales change➢ Semiconductor & devices: Will likely benefit from the startup of mobile device projects, but will be
impacted by an adjustment from the market boom in the previous fiscal year, and a decline in TV
sales.
➢ ICT & solutions: Software is expected to decline due to the ending of large-lot business, but sales ofother items are expected to remain at a high level.
Semiconductors & devices

ICT & solutions(Net sales by application)(Net sales by product)

Year-on-year change: Down ¥3.5 billion

Year-on-year change: Down ¥6.5 billion

Industrials
Communication & others
+0.6
+4.4
Vehicleinstallation-1.3(Billion yen)

Embedded
devices
PC/server/&othersnetwork
I/O equipment
+0.1
+0.6
+1.3

PCs &
peripherals-1.8
Digitalconsumerelectronics
-5.3

129.9

Software
-8.5

120.0

FY2023/1
Result15

FY2024/1
TargetCopyright 2023 © Ryoyo Electro Corporation

Supplement: Net sales by productSemiconductors & devices

ICT & solutions

75.7 (63.1%)

44.3 (36.9%)

FY2024/1
24.1期
Targets(計画)-4.4%
FY2023/1
23.1期(実績)
Results

50.8 (39.1%)

Semiconductors & devices
Net sales by application

79.2

79.2

Analog & power
semiconductors

7.2
11.7

75.7
Communication

11.6

7.9
4.1
6.2
12.3

25.0

Vehicleinstallation

15.8

PCs &
peripherals

14.0

18.9

21.9

Industrials& others

22.5

FY2024/1
24.1期…
Targets

23.1期…
Results

Other electronic
devices

5.8
4.8
5.3

2.6

24.1期…
Targets

16

44.3
11.9

PC/server/
network

7.2
I/O equipment

15.3
Software

FY2024/1

FY2023/1

50.8

8.6

3.9
Memorysemiconductors
RF & opticalsemiconductors
LCDs

FY2023/1
23.1期…
Results

electronics

29.2

Logic
semiconductors

Net sales by product12.5

30.3 Digital consumer
39.9

129.9

ICT & solutions

Net sales by product

8.8

120.0

-12.7%

79.2 (60.9%)75.7(Billion yen)

Embedded
devices& others

16.4

FY2023/1
23.1期…
Results

6.8

16.5

FY2024/1
24.1期…
Targets

Copyright 2023 © Ryoyo Electro Corporation

Shareholder returns➢ Dividend policy: Aim for a dividend on equity (DOE) of 5%.
Dividend per Share (Yen)InterimYear-End

Full YearFY2024/*(Plan)

60

60

120

FY2023/1*(Plan)

50

60

110

FY2022/1*

Result

60

60

120

* FY2024/1: Fiscal year ending January 2024
FY2022/1: Fiscal year ended January 2022

Increase
dividend by¥10

FY2023/1: Fiscal year ended January 2023

Expected indicators based on performance forecast and dividend forecast
ROE

Dividend
Payout Ratio

DOE(FY2023/1 Results)

7.0%

72.6%

5.1%

(FY2024/1 Targets)

12.1%

44.1%

5.2%

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Copyright 2023 © Ryoyo Electro Corporation

Three-Year Business Plan (FY2023/1 – FY2025/1)➢ Fiscal year ended January 2023 exceeded targets of the three-year plan ending January 2025
ahead of schedule.
→ Due to future uncertainty, the numerical targets for the three-year plan remain unchanged.
➢ By seizing new growth opportunities, including the alliance with Ryosan, we will pursue synergies toimprove product quality and quantity.
→ Target for the three-year plan may be reviewed as necessary according to future trends.
Currently
Recorded declines inboth sales and profit,
unlike industry
competitors

Operating Profit

0.25(0.3%)

Restored performance withmanagement reform

1.26(1.3%)

2.15(2.0%)

Some reform results⇩
Seeking new growth
opportunities

4.69(3.6%)
2.26(2.0%)

1.27(1.3%)(Operating Margin)

3.60(3.0%)

Initial Plan+
Synergy

Enhancement/
expansion
Improvement

3.30 (Billion yen)
(3.0%)

129.9

92.2

93.8

FY2018/1
18.1期(Results)
(実績)

19.1期
FY2019/1(実績)(Results)

120.0

112.1

108.5
Net Sales

Onward to thenext stage

110.0

95.8
FY2020/1
20.1期(Results)(実績)

FY2021/1
21.1期(Results)(実績)

18

FY2022/1
22.1期(Results)(実績)

FY2023/1
23.1期(Results)(実績)

FY2024/1
FY2025/1
24.1期
25.1期
(Finaltargets of(Targets)(計画)(3ヶ年最終)the three-year plan)
Copyright 2023 © Ryoyo Electro Corporation

Summary
Overview of Fiscal Year Ended January 31, 2023
➢ Results for sales and profits significantly exceeded the initial plan, and operating profit
reached a 21-year record high. ROE also improved substantially to 7.0%.
➢ In addition to significant growth in semiconductors & devices thanks to favorable market
conditions and component shortages, ICT & solutions also maintained strong performance.

Medium-term initiatives➢ Electronics traing companies have a low-profitability structure and are susceptible tochanges in the business environment.
➢ Ryoyo aims to pursue quality and quantity by creating a winning model and an alliance with
Ryosan.
Target for Fiscal Year Ending January 31, 2024
➢ With a challenging business environment in the forecast, we expect sales and operating
profit to decrease YoY. However, Ryoyo will pursue various initiatives during the year thatwill demonstrate the results of its reforms and various other measures.

➢ Ordinary profit and net profit attributable to owners of parent are expected to increase YoY.
This is due to a gain on negative goodwill associated with making Ryosan an equitymethod affiliate.
➢ The annual dividend forecast for the fiscal year ending January 2024 is ¥120 per
share, an increase of ¥10 from the previous year.
19

Copyright 2023 © Ryoyo Electro Corporation

About this report

Note
The business results and forecasts for the future contained in this presentation
are based on certain assumptions deemed reasonable at the time of release.
Actual results may differ from the original forecasts due to economic conditionsand various other factors.

Contact

Public Relations Dept., Corporate Planning Div.
Ryoyo Electro Corporation
Tel: +81-3-3546-6331
E-mail: irmanager@ryoyo.co.jp

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Copyright 2020 © Ryoyo Electro Corporation