Results Briefing for Fiscal Year Ended
January 31, 2022

March 11, 2022

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

Copyright 2022 © Ryoyo Electro Corporation

AgendaOverview of Fiscal Year Ended January 31, 2022
Business Plan for Fiscal Year Ending
January 31, 2023
New Three-Year Business Plan
(February 2022 – January 2025)

Shareholder Returns
Corporate Governance1

Copyright 2022 © Ryoyo Electro Corporation

Overview of Fiscal Year
Ended January 31, 2022

2

Copyright 2022 © Ryoyo Electro Corporation

Intentions for the annual business plan at beginning ofyear and subsequent changes
Intentions at beginning the year

Actual changes

Overall market conditions

Overall market conditions are expected to recovercompared to FY2021/1, although COVID-19 effects are
expected to remain in some areas, among themcorporate IT-related investment..

As initially expected, the recovery trend from theprevious year is more apparent in a wide range of fields.

Impact of semiconductor supply shortages
No significant impact was seen at the beginning of theyear, and with uncertainty regarding future prospects,
impact was not factored into the plan.

Semiconductors & devices were supported by robust
demand, with procurement of some ICT & solutions
products impacted.

Semiconductors & devices
Despite an expected decrease in orders for TVs, which
had been strong in the previous fiscal year, a slight YoY
increase is forecasted for the fiscal year due to thenormalization of production activities and contributions
from new orders..

Orders for TVs, which were expected to decrease,increased due to the development of new customers,
and favorable demand amid the aforementioned
semiconductor supply shortage also contributed to theincrease.

ICT & solutions
Ryoyo will capture demand related to the online
eligibility verification system using IC chips for the
Individual Number Cards which will start this fiscal year.
In addition, the business environment is expected togradually improve toward the end of the fiscal year.

Introduction of the online eligibility verification system
was postponed, and projects overall were postponed(some were carried over to the next fiscal year). Other
projects, with the exception of software-related projects,
were relatively steady.

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Copyright 2022 © Ryoyo Electro Corporation

Profit/Loss: Results➢ Sales and income were up both YOY and vs. initial plans.
➢ Increase in ordinary profit and profit attributable to owners of parent expanded, mainly due to theabsence of non-operating expenses allocated in the previous year (expenses related to the buybackof treasury stock: ¥490 million).
➢ ROE improved significantly due to growth in profits and adjustment of capital structure. (→High levels
reached for the first time in 20 years)
FY2021/1*(Billion yen)

ResultFY2022/1*
InitialTargetYoY Change

ResultCompared to Initial Target%%

Net sales

95.8

100.0

112.1

+16.3

+17.0%+12.1+12.1%

Gross profit

9.19

10.10

10.73

+1.54

+16.7%

+0.63

+6.3%

(%)
Selling, general and administrative
expenses
Operating profit

9.6%

10.1%

9.6%

7.93

8.10

8.47

+0.55

+6.9%

+0.37

+4.6%

1.27

2.00

2.26

+0.99

+78.2%+0.26+12.9%

(%)

1.3%

2.0%

2.0%

Ordinary profit

0.91

1.95

2.40

+1.50 +165.2%+0.45+23.1%

Profit attributable to owners of parent

0.81

1.35

1.87

+1.07 +132.4%+0.52+38.8%

ROE

1.6%

4.7%

* FY2021/1: Fiscal year ended January 2021, FY2022/1: Fiscal year ended January 2022

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Copyright 2022 © Ryoyo Electro Corporation

Factors impacting sales change➢ In semiconductors & devices, in addition to significant growth in products for TVs and other digitalconsumer electronics, overall sales were supported by robust demand amid semiconductor supply
shortages.
➢ In ICT & solutions, sales of software for PCs declined (reaction to special demand up to the first halfof the previous fiscal year), but sales of other items were generally firm.
ICT & solutions(Net sales by product)

Semiconductors & devices(Net sales by application)
Year-on-year change: Up ¥13.9 billion

Year-on-year change: Up ¥2.4 billion(Billion yen)

PCs &Digital peripherals
consumer+2.7
electronics+9.9

Embedded
devices& others+2.7

Industrials & Vehicle
installation
others+0.2+1.2

Communication-0.2

PC/server/
network+1.5

I/O
equipment+1.0

Software
-2.9

112.1

95.8
FY2022/1
Results

FY2021/1
Results5

Copyright 2022 © Ryoyo Electro Corporation

Supplement: Net sales by productSemiconductors & devices
FY2022/1
Results

ICT & solutions(Billion yen)

48.3 (43.1%)

112.1

63.8 (56.9%)+28.0%FY2021/1
Results+5.2%

49.9 (52.0%)45.9 (48.0%)

95.8

ICT & solutions

Semiconductors & devices
Net sales by product

49.9

63.8

6.3

5.0
49.9

24.0
2.1

Other electronic
devices

FY2021/1
Results

5.9

I/O equipment

6.9

19.2

Software16.4

Embedded devices& others

13.9

17.6

Logic
semiconductors

6.9

11.2

27.6
Digital consumer
electronics

35.5

PC/server/network

9.6

5.2

8.8

3.7
2.7
3.9

48.3
45.9

Communication

Analog & power
semiconductors

Memorysemiconductors
RF & opticalsemiconductors
LCDs

Net sales by productNet sales by application

63.8

5.3

10.2

Vehicleinstallation

2.3

PCs &
peripherals

12.9

Industrials &others

16.0

11.2

FY2022/1
Results

FY2021/1
Results

3.1
4.6
14.8

9.0
FY2022/1
Results

FY2021/1
Results

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FY2022/1
Results

Copyright 2022 © Ryoyo Electro Corporation

Quarterly trends➢ Semiconductors & devices and ICT & solutions both grew in the fourth quarter of FY2022/1,
with quarterly net sales exceeding ¥30 billion.
➢ Quarterly operating profit has been increasing compared to the previous quarter since Q4 of
FY2021/1. In Q4, the operating margin rose to 2.4% as sales expanded and gross profit also
improved.
Special demand due to theend of support for Win7

0.59
0.44

0.51

0.51
0.23

27.6

(Billion yen)

0.75

0.62
OperatingprofitCOVID-19 impacts
in full swing

26.7

27.1

0.46 0.49

26.1

26.5

25.8

Q4

Q1

Q2

31.6

0.10

27.2

25.0

Net Sales

0.42

0.56

28.2

24.0
20.6

Q1

Q2

Q3

FY2020/1
20.1期

Q4

Q1

Q2

Q3

FY2021/1
21.1期
7

Q3

Q4

22.1期
FY2022/1
Copyright 2022 © Ryoyo Electro Corporation

Financial position: YoY comparison➢ Trade receivables, inventories, and trade payables increased as sales increased, andborrowings were also increased in order to fund working capital requirements.
➢ Non-current assets decreased, mainly due to sale of investment securities.
➢ Net assets increased due to procurement of funds through warrant issues.
Note: Procurement of funds through warrant issues overlapped fiscal years and wascompleted at the end of February, with a total of ¥6 billion procured.

AssetsCash and deposits

January 31, 2022

9.2

January 31, 2021

7.6

Trade receivables

Inventories

32.2

19.6

25.5

11.8

2.5

11.9

Other
current Non-current
assetsassets2.0

9.7(Billion yen)

72.7

59.3

Liabilities & Net Assets
January 31, 2022

January 31, 2021

14.7
11.3
Trade
payables

11.8
6.7

3.9

42.3

3.4

38.0

Borrowings Otherliabilities

72.7
59.3

Net assets

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Copyright 2022 © Ryoyo Electro Corporation

Business Plan for Fiscal YearEnding January 31, 2023

9

Copyright 2022 © Ryoyo Electro Corporation

Intentions of the business plan for fiscal year
ending January 2023
Ryoyo had originally planned to postpone the achievement of the targets in the previous
three-year business plan (net sales: ¥110 billion, operating profit: ¥3 billion) by one year,
to the fiscal year ending January 31, 2023. However, the Company adjusted the targets
downward, mainly due to changes in the business environment for large projects.

Semiconductors & devices➢ The impact of semiconductor supply shortage remains severe and is expected tocontinue until the latter half of the fiscal year.
➢ Meanwhile, sales for TVs, the company’s mainstay products, remains high, but thesense of overheating is expected to subside.
ICT & solutions➢ Business related to online qualification verification is expected to peak in the fiscal year,with some projects sliding from the previous fiscal year.
➢ Change in forms of transaction for some large projects is expected to have an impact
from the second half of the fiscal year.
Other➢ The impact on net sales of the Accounting Standard for Revenue Recognition, which was
adopted in the fiscal year ending January 2023, is insignificant.
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Copyright 2022 © Ryoyo Electro Corporation

Profit/Loss: Annual targets➢ Net sales are expected to decrease in both semiconductors & devices and ICT & solutions.
➢ Operating profit is expected to increase slightly YoY due to improvement in profit margins fromchanges in sales composition and expansion of high-profitability products and services.
➢ Ordinary profit and profit attributable to owners of parent are expected to decline due to the absenceof foreign exchange gains and gains on sale of investment securities that were recorded in FY2022/1.

FY2022/1* FY2023/1*(Billion yen)

ResultYoY Change

Target%Net sales

112.1

100.0

-12.1 -10.8%

Gross profit

10.73

10.80

+0.07

+0.6%

(%)

9.6%

10.8%

Selling, general and administrative expenses

8.47

8.50

+0.03

+0.3%

Operating profit

2.26

2.30

+0.04

+1.9%

(%)

2.0%

2.3%

Ordinary profit

2.40

2.20

-0.20

-8.4%

Profit attributable to owners of parent

1.87

1.53

-0.34 -18.3%

ROE

4.7%

3.6%

* FY2022/1: Fiscal year ended January 2022, FY2023/1: Fiscal year ending January 2023

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Copyright 2022 © Ryoyo Electro Corporation

Factors impacting sales change➢ Semiconductors & devices sales are expected to decline mainly due to a lull in overheating of orders
for TVs.
➢ In ICT & solutions, although some software-related orders are expected to be affected by a review offorms of transaction, sales of other items are expected to remain strong.
ICT & solutions(Net sales by product)

Semiconductors & devices(Net sales by application)
Year-on-year change: Down ¥8.5 billion

Year-on-year change: Down ¥3.6 billion
Embedded
devices
I/O equipment& others
PC/server/
+1.2
+0.5
network+2.5

Industrials
Vehicle& others installation-0.2-0.5 Communication PCs &peripherals
-0.9
-1.4

112.1

Digitalconsumerelectronics-5.5(Billion yen)

Software
-7.9

100.0

FY2022/1
Results

FY2023/1
Results

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Copyright 2022 © Ryoyo Electro Corporation

Supplement: Net sales by product
ICT & solutions

Semiconductors & devices
FY2023/1
Targets

44.7 (44.7%)-13.3%-7.5%

63.8 (56.9%)

48.3 (43.1%)

FY2022/1
Results

Semiconductors & devices
Net sales by product

63.8
6.3

(Billion yen)

55.3 (55.3%)

Analog & power
semiconductors

55.3

100.0
112.1

ICT & solutions

Net sales by application
63.8
5.0

Net sales by product
48.3

44.7

55.3

Communication

4.1

6.6

PC/server/
network

11.2

13.7

27.6 Digital consumer
35.5

electronics

Logic
semiconductors

22.1

I/O equipment

27.0

5.3
3.1
4.6

Memorysemiconductors
RF & opticalsemiconductors
LCDs

9.0

Other electronic
devices

FY2022/1
Results

6.9
8.1

2.3

Vehicleinstallation

1.8

12.9

PCs &
peripherals

11.5

16.0

Industrials& others

4.9
3.0
4.5

16.4

15.8

13.9

FY2023/1
Targets

FY2022/1
Results

Software8.5

Embedded
devices& others

14.4

9.3

FY2023/1
Targets

FY2022/1
Results

13

FY2023/1
Targets

Copyright 2022 © Ryoyo Electro Corporation

New Three-Year Business Plan
(February 2022 – January 2025)

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Copyright 2022 © Ryoyo Electro Corporation

The external environment aroundelectronics 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

Current main risk factors
Stagnant market inJapan

Semiconductor supply
shortages

Concerns over repeat of
COVID-19 spread

Electronics trading company

Required functions and roles are changing
Dependence
Business modelon productcentered oncompetitiveness product sales

Deep considerationof client needs

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Creation of
new value

Copyright 2022 © Ryoyo Electro Corporation

Ryoyo’s initiatives to date
➢ In the previous three-year business plan, the company was on the verge of an operating loss, and it
proceeded to rebuild. The plan showed a certain degree of recovery in business performance.
However, profits fell short of targets, leaving issues to be addressed for future growth.

Reform Phase 1

Reform Phase 2

Preparatory stage
Recorded declines inboth sales and profits
contrary to industry
competitors

Previous three-year business plan

Restored
performance to someextent throughmanagement reform

Recorded increase inboth２期連続のsales and profits
for twoconsecutive
増収増益
years

Performance
declined due to
COVID-19

2.26

2.16
Operating profit

92.2(Billion yen)

1.26

0.25

108.5

1.27

112.1

95.8

93.8

Initial Targets
Net sales: ¥110 billion
Operating profit: ¥3 billion

Net Sales

FY2018/1

Three-year business
plan:
Achieved net sales
targets, but operating
profit fell short

FY2019/1

FY2020/1

16

FY2021/1

FY2022/1
Copyright 2022 © Ryoyo Electro Corporation

Ryoyo’s vision
Ryoyo’s Core Promise

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

Expand into similarmarkets where strengths
can be leveraged

Feedback for customer
information

Know the issues
shared by markets

Increase ongoingcustomer engagement

Provide the bestsolutions in a
faster and better
manner thananyone else

Identify andunderstandcustomers’ issues
and problems

Accumulate proprietary
expertise

Narrow down customer
issues and problems
Give assistance that
resolves customer
issuesDevelop strengths andexpertise

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Copyright 2022 © Ryoyo Electro Corporation

Strategic framework
Ryoyo’s Core Promise

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

New Three-Year Business Plan
(February 2022 – January 2025)

1. Expand and deepen
customer engagement

2. Pursue uniquenessMaximize management resources
to expand business base

Combine products and services toprovide unique solutions

3. Increase productivity
Promote the building of a framework to strengthen the businessfoundation, and increase operating profit per employee (1.4x)

Although it will depend on the situation going forward, given that certain
reforms have been made, Ryoyo will also consider leveraging growth
opportunities including alliances.
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Copyright 2022 © Ryoyo Electro Corporation

Strategy 1. Expand and deepen customer engagement➢ Expand the business base by maximizing management resources (superior products and customer
relations) cultivated over Ryoyo’s long history.

Ryoyo
Factors that still have issues
and/or weaknesses• Human resources• Marketing• Sales

Products(Suppliers)

End-users Further strengthen the mechanism to acquire, share, and utilize customer information to expand
the range of each individual's business and proposals.
Product
lineupCurrent
statusRyoyo
employee

Current
statusCustomers

 Develop and establish strong fields by continuing product development and focusing on
promising products and products for which Ryoyo can leverage its technical capabilities andexpertise.
Semiconductors & devices

ICT & solutions

Power devices Communication Microcontroller unit
devices(MCU), clock (CLK),
othersVideo

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Printing

AI, image processing,othersCopyright 2022 © Ryoyo Electro Corporation

Strategy 2. Pursue uniqueness➢ Promote value-added business that provides unique solutions by combining products (conventional
business of product sales) and services.
For the time being, Ryoyo will focus on the following three fields
Services businessIn addition to the conventional hardware product sales,
Ryoyo also handles, on behalf of its customers, installation,
kitting, and maintenance of equipment -- troublesome
processes that customers would rather leave to someone
else.

IoT platform
Ryoyo provides packages of sensors, platforms, andapplications according to diverse IoT needs to support
quick, inexpensive, and easy start-up in manufacturing andother businesses.

Technical services

Ryoyo provides the best solutions for its customers’ issues,
problems, and visions by using technologies including
proprietary AI and resources in and outside Japan andtaking on tasks from hardware and software design tomanufacturing.
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Copyright 2022 © Ryoyo Electro Corporation

Strategy 3. Increase productivity➢ In order to support preceding two strategies (i.e. “expand and deepen customer engagement” and“pursue uniqueness”), Ryoyo will work on productivity improvement in five themes to strengthen its
business foundation.

Sales productivity
Organize sales team that will
improve the reproducibility ofsuccesses

Increased Productivity

Digital transformation

Business processes
Create processes to focus onproviding value to customers

Build a system that coordinate
all information supporting thecompany’s business model

Increase earnings per
Ryoyo employee
Operating profit per employee
FY2022/1 (result): ¥3.2 million ⇨FY2025/1 (target): ¥4.6 million

Standardization

Remote work

Build a mechanism that quickly
identifies business issues andimplements specific measures

Create an environment where
employees can work anywhere

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Copyright 2022 © Ryoyo Electro Corporation

Numerical targets of the new three-year business plan

Net Sales

Operating profit(Operating Margin)

ROE

FY2025/1
Targets¥110 billion¥3.3 billion (3.0%)

5.5%

Reference:
FY2022/1
Results¥112.1 billion¥2.26 billion (2.0%)

4.7%

Intentions of Numerical Targets➢ Net Sales
Even factoring in the negative impact (about ¥18 billion) of anticipated changes in thebusiness environment in future, Ryoyo will expand its business base through expandedcustomer engagement and new products and services.
➢ Operating profit
Ryoyo aims at transforming profit structure to achieve operating margin over 3% bypromoting value-added business that combines products and services and productivity
improvement initiatives.
➢ ROE
Ryoyo aims at achieving ROE that exceeds the cost of capital stock recognized by theCompany (approx. 5%) by implementing various measures to improve profit levels.
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Copyright 2022 © Ryoyo Electro Corporation

Shareholder Returns

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Copyright 2022 © Ryoyo Electro Corporation

Shareholder returns➢ Ryoyo will maintain its dividend policy of 5.0% DOE under the new three-year business plan.
→ The Company plans to pay an annual dividend of ¥100 per share for FY2023/1 (a decrease of ¥20
yen per share from FY2022/1).
Dividend per Share (Yen)FY2023/1*

FY2022/1*

InterimYear-End

Full Year

Dividend
Payout Ratio

Forecast

50

50

100

129.7%

4.8%

Target―60

120

115.4%

5.6%

Result

60

―

―

―

―

*FY2023/1: Fiscal year ending January 2023,

DOE

FY2022/1: Fiscal year ended January 2022

Trends in Dividend per Share, Dividend on Equity Ratio (DOE), and Payout Ratio
Dividend
Payout Ratio:

100.0%

1.2%

119.2%

1.5%

691.0%
2.3%

144.2%

150.8%

2.3%

3.2%

DOE:

Dividend per
Share (Yen):

30

40

60

DOE: 5%

DOE: 3%

Total Return Ratio: 100%Return Policy

8060

511.5%
7.6%

115.4%

129.7%

5.6%

4.8%

180
60
(Commemorative
dividend)

120

100

60
120
60

FY2016/1
Results

FY2017/1
Results

FY2018/1
Results

FY2019/1
Results

24

FY2020/1
Results

FY2021/1
Results

FY2022/1
Targets

FY2023/1
Forecasts

Copyright 2022 © Ryoyo Electro Corporation

Corporate Governance25

Copyright 2022 © Ryoyo Electro Corporation

Corporate Governance (Highlights)➢ Ryoyo continues to enhance governance system with the purpose of improving management
effectiveness and transparency.
Inside25%
Outside50%

Directors
取 締 役

Inside50%

Audit &
Supervisory
監 査 役
Board
Outside Members
75%

Women
25%
Officers
役 員(Directors &(取締役・監査役)
Auditors) Men
75%

Organizational Structure of the Company

Company with Audit & Supervisory Board

Chairperson of the Board of Directors*

Outside Director

Number of Directors*

8 (including 4 outside directors)

Number of Auditors

4 (including 3 outside Audit & Supervisory Board Members)

Number of Independent Officers*

4 outside Directors and 3 outside Audit & Supervisory Board Members

Voluntary Advisory Committee to the Board of
Directors

Nominating and Compensation Committee

Structure of Compensation for Directors

Fixed compensation (basic compensation)
Performance-linked compensation (monetary)
Medium- to long-term performance-linked compensation(restricted stock compensation)*Includes items to be formally decided upon approval of the agenda at the Annual General Meeting of Shareholders to be held on 4/26

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Copyright 2022 © Ryoyo Electro Corporation

Reference: Ryoyo's transition in corporate governanceFiscalYear

2022/1

Board of Directors

Nomination and Compensation

Others●Executive Officer System revised(delegated executive officer
system introduced)●Director term of office shortened●Number of directors reduced●Performance-linked compensation(monetary) introduced●Ratio of independent outside
directors increased to 50% (Ratio ofoutside officers: 58%)

●Number of independent outside●Outside officers account for a
directors increased to 4
majority of Nomination and●Number of women in the Board ofCompensation Committee
Directors increased to 2

2021/1

2020/1

Officers●An outside Director assumes
chairmanship of the Board of
Directors●Nomination and Compensation
Committee established (chairedby an outside Director)

2019/1

2018/1

2017/1

2016/1●Begins evaluating effectiveness of
the Board of Directors●Number of independent outside
Audit & Supervisory Board
Members increased to 3

●Legal counsel added as areporting contact in the internalreporting system●Number of independent outside
Directors increased to 2
●A woman appointed as a board
member●Electronic voting platform
established●Exercise of voting rights via theInternet enabled

2015/1
2014/1● An independent outside Director ●Standards of independence forappointed
outside officers established2013/127

Copyright 2022 © Ryoyo Electro Corporation

Summary

Overview of Fiscal Year Ended January 31, 2022
➢ Sales and income were up both YOY and vs. initial plans.
➢ ROE improved significantly due to growth in profits and adjustment of capital structure. (High levels
reached for the first time in 20 years)
Target for Fiscal Year Ending January 31, 2023
➢ Net sales is expected to decrease YoY mainly due to changes in the business environment for large
projects.

➢ Operating profit is expected to increase slightly YoY due to improvement in profit margins from factors
including changes in sales composition.
New Three-Year Business Plan
➢ Establish the strategic framework of “expand and deepen customer engagements,” “pursue uniqueness,”and “improve productivity,” to provide the best solutions for our customers’ issues and problems in a
faster and better manner than anyone else.
➢ Net sales target in FY2025/1 remains the same level as in FY2022/1, factoring in the anticipatednegative impact in future with an unchanged plan. However, Ryoyo aims at transforming profit structure
to achieve operating margin over 3%.
Shareholder Returns➢ Ryoyo pays dividends based on its conventional dividend policy of 5.0% DOE.

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Copyright 2022 © 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