KAGA ELECTRONICS
CO., LTD.

For Institutional Investors/Analystss

Financial Results Briefing Material
for the Fiscal Year ended March 2021
KAGA
ELECTRONICS CO., LTD.
加賀電子株式会社
TSE 1st section 8154

May 27, 2021

INDEX FY2021/3 Financial Results

P-3～

Summary/Financial Highlights
Financial Highlights by Business Segment/
Balance Sheet/Cash Flows/Forecasts
 Management Topics

P-29～

Overview of FY2021/3/ Targets of theMedium-Term Management Plan/
Progress of PMI at KAGA FEI・EXCEL/
Response to the Spread of Novel
Coronavirus Infection/
Strengthening the Governance System/
SDGs Committee Reference

P-39～

Consolidated Financial Results
for the Fiscal Year ended March 2021
Managing Director

Eiji Kawamura

Summary of Fiscal Year Ended March 2021
Net sales fell short of the previous year’s levels due to the lingering effect of the termination ofsales agency contracts with major suppliers. When excluding this special factor, however, theGroup overcame the effects of COVID-19 and sales trended firm overall.
 Operating income and ordinary income surpassed previous forecasts and reached a record
high for the second fiscal period in a row.
 Although the Group priced in impairment losses and other, a “gain on bargain purchase”
was posted, resulting in a significant increase in net income.
 Income surpassed forecasts due to sales growth as demand recovered rapidly in Q4 andselling, general and administrative expenses were curtailed and reduced. Sales and income
reversed direction and turned upward.
 Fiscal year-end dividends will be 50 yen per share, with an extraordinary dividend of 10 yen
added to the 40 yen (30 yen ordinary dividend + 10 yen extraordinary dividend) previously
forecast.
※Including the 30 yen interim dividend, the full-year dividend will be 80 yen per share (70yen in the previous fiscal year)


Results for
FY2021/3

Overview of themain segments

FY2022/3
earnings forecasts
and Medium-Term
Management Plan
targets

Electronic
components

・ Although the impact of the termination of the sales agency agreement with
Cypress continued to affect the components sales business, the business took
advantage of the recovery in demand from Q3 and brought in solid results.
・ In the EMS business, sales in the medical and automotive areas were solid
throughout the year.

Informationequipment

・ The PC sales business grew as it attracted demand spurred by teleworking andonline learning.
・ Anti-viral and sterilizing products for companies and commercial facilities were
solid performers.

In this final year of the Medium-Term Management Plan, net sales are still far from the MediumTerm Plan target, but we have not lowered this target. We aim for record-high operating
income for a third straight fiscal year and to achieve our plan targets.

We forecast 80 yen per share in same dividends with FY2021/3.

3

Financial Highlights for FY2021/3＊announced on February 4, 2021

FY2020/3

FY2021/3

Results

Previous Forecasts

FY2021/3

422,365

10.6%-

47,93637,001

8.3%-

Operating income

10,014

2.3%

9,000

Ordinary income

10,137

2.3%

5,852

1.3%

443,615Gross profit

47,016

SG&A

Profit attributable to owners ofparentEPS（Yen)ROE

YoY

Results

415,000

Net sales（million yen）

vs Forecast

-4.8%

1.8%

11.3%

2.0%

ー

36,469

8.6%

-1.4%

ー

2.2%

11,467

2.7%

14.5%

27.4%

8,500

2.0%

11,241

2.7%

10.9%

32.2%

10,5002.5%

11,399

2.7%

94.8%

8.6%

213.21

382.30415.07

ー

ー

7.6%

12.7%

13.5%

5.9pt

+0.8pt4

Breakdown of extraordinary gains/losses for FY2021/3（million yen）

7,963

159
Gain on salesof investment
securities, etc

11,241Gain onbargainpurchase

Extraordinary income
8,122
Ordinary
incomeincome2,230
1,893
Bad debts
losses・Provision ofallowancefor doubtful
accounts

562
Impairm
ent loss

Loss on salesof investment
securities・
Loss onvaluation of
investment
securities

205
Other

14,472Extraordinary
income/loss(net)
3,230

Extraordinary loss
4,892
ProfitProfitbeforeincometaxes
beforeincometaxes
5Financial Results by Business Segment for FY2021/3（million yen）

FY2020/3

FY2021/3

Results

Results

Net sales
Electronic
Component Segment income

377,587

Information Net sales
Equipment Segment income

43,466

Software

OthersTotal

Net sales
Segment income
Net sales
Segment income
Net sales
Segment income

7,503
1,707

353,454
2.0%

3.9%

8.5%

2,482
263

2.3%

474

5.1%

11,467

45.3%
5.5%

9.0%

11.4%
-11.1%

2.7%

422,365
2.3%

8.6%
11.3%

17,589443,615
10,014

2.3%

2,932

19,781
452

8,151

-6.4%

48,389

2,778
236

YoY

4.9%
-4.8%

2.7%

14.5%

Note: Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).

6Changes from Previous forecast（announced on February 4, 2021)（million yen）

Net sales

Operating income< by Business Segment >+7,455-1,611-1,068+2,589422,365+7,3659,000

415,000

FY2021/3 Electronic Information
Forecast components equipment<by company>+8,897

Software

Others

Kaga
Electronics

+37

+274

Software

Others+307

FY2021/3 Electronic Information
Forecast components equipment+2,467

FY2021/3
ResultNote: Figures of each segment income are not inter-segment adjusted. Total amount is inter-segment adjusted (operating income).

＋1,932-3,464

415,000

FY2021/3
Forecast

FY2021/3
Result+1,942

11,467

Kaga FEI

Excel

422,365+7,3659,000+1,783

FY2021/3
ResultFY2021/3
Forecast

Kaga
Electronics

＋462

+206

Kaga FEI

Excel

11,467+2,467

FY2021/3
Resultnote：With respect to gross profit and operating income, figures presented above are before consolidation.
adjustments between the three companies.

7

Financial Highlights: Electronic Component 2020年3月（Million Yen)

Net sales/Segment income//

Net sales
Segment income

YoY Net sales
 Segment Income

377,587
353,4547,503

FY2020/3
Results-24,133million Yen 6.4％Down+647million Yen 8.6％Up・ The components sales business was solid due to its
response to the recovery in demand from the second
half of the fiscal year, in addition to the effect ofhigher sales resulting from the consolidation of EXCEL.
・ However, results undercut levels in the previous year
due to the lingering effect of the termination of Kaga
FEI's sales agency agreement with Cypress
Semiconductor Corporation and other factors.
8,151

・ The EMS business hit bottom in Q1, when it was hurt
by the lockdown of some overseas plants during the
COVID-19 pandemic.
・ Demand recovered rapidly from the middle of the
fiscal year, particularly in the automotive andindustrial equipment sectors, due to the resumptionof economic activity.

FY2021/3
Results

8

Financial Highlights: Information Equipment（Million Yen)

Net sales/Segment income//

55 00080 00

 Net sales
 Segment Income

48,38950 00045 000Net sales
Segment income

YoY

70 00

43,46660 00

40 00050 00+4,922million Yen 11.3％Up+774million Yen 45.3％Up・ The increase of telework and online learning led to
growth in the sale of PCs, PC peripheral equipment
and security software to electronics retail stores andschools and other educational institutions.

35 00040 00

30 0002,482

25 000

1,707

30 00

・ Sales of thermography equipment for temperaturechecks and sterilizing deodorizers with antiviralfunctions were solid as products aimed at countering
COVID-19.

20 00

20 000

10 00

15 000

10 0000

FY2020/3
Results

FY2021/3
Results

9

Effect of M&A（million yen）

Net Sales

Despite the impact of COVID-19, sales increased for Kaga
Electronics; sales fell sharply for Kaga FEI due to the loss ofmajor commercial rights; EXCEL was consolidated from Q1
443,615-68,651+866
422,365＋46,535-21,249

Gross profit / Gross profit margin
Although income fell for Kaga FEI, income was sharply
up for Kaga Electronics, and the profit margin improvedfor both companies.
47,016+1,974-3,400

10.6%

7.8%

6.8%
Kaga
Electronics

KagaFEI

Excel

FY2021/3
ResultFY2021/3

FY2020/3
Result47,936
+920

14.5%

13.7%

FY2020/3
Result+2,365

Kaga
Electronics

KagaFEI

11.3%

5.1%
Excel

FY2021/3

FY2021/3
ResultSG&A / SG&A ratio

Operating income / Operating income marjin

Both Kaga Electronics and Kaga FEI endeavored to cut
operating expenses, and absorbed the impact of the
new consolidations.

Even during the COVID-19 outbreak, Kaga Electronics
recorded higher income and the profit margin also
improved significantly.

37,001-1,011

10.4%

10.0%

-1,750+2,230

FY2020/3
Result

8.6%
7.5%

Kaga
Electronics-532

10,014+3,155

KagaFEI

2.3%

0.3%

1.0%

4.8%
Excel

-1,723

FY2021/3
ResultFY2020/3
Result+6

11,467+1,452

4.5%

3.3%

8.3%
5.8%

36,469Kaga
Electronics

KagaFEI

2.7%

0.0%
Excel

FY2021/3
ResultFY2021/3
FY2021/3(note) With respect to gross profit and operating income, figures presented above are before

consolidation adjustments between the two companies. For reference, after consolidation
adjustments, gross profit stood at -19million yen, and operating income came to 13 million yen.

10

FY2021/3 results by company（million yen）

Kaga
Electronics

Kaga FEIFY2020/3

FY2021/3

Results

Results

Net sales

243,031

243,897

Gross Profit

33,29813.7%

35,273

14.5%

+5.9%

7,927

3.3%

11,0834.5%+39.8%

operating income

Total

+0.4%

Net sales

200,584

Gross Profit

13,7086.8%

10,3077.8%-24.8%

2,086

1.0%

362

0.3%

-82.6%Net sales－－

46,535Gross Profit

－

－

2,365

5.1%

－

operating income

－

－

6

0.0%

－

operating income
Excel

YoY

131,932-34.2%－Net sales

443,615422,365

Gross Profit

47,016

10.6%

47,936

11.3%

+2.0%

operating income

10,014

2.3%

11,467

2.7%+14.5%-4.8%(note) With respect to gross profit and operating income, figures presented above are before consolidation adjustments.

between the three companies.

11Reference

Financial Highlights (3 months)（million yen）

FY2020/3
4Q Results

FY2021/3
3Q Results

FY2021/3
4Q Results

128,099

QoQ

22.2%

21.5%

Net sales

104,813Gross profit

11,77011.2%

12,005

11.4%

14,289

11.2%

21.4%

19.0%

SG&A

9,488

9.1%

8,923

8.5%

10,339

8.1%

9.0%

15.9%

Opearating income

2,282

2.2%

3,082

2.9%

3,950

3.1%

73.0%

28.2%

Ordinary income

2,161

2.1%

2,892

2.7%

4,010

3.1%

85.5%

38.7%

927

0.9%

1,956

1.9%

-1,329

-1.0%

ー

ー

ー

ー

Profit attributable to owners ofparentEPS

33.78

105,406

YoY

71.23

-48.3812

Reference

financial Results by Business Segment (3 months)（million yen）

FY2020/3

FY2021/3

FY2021/3

4Q Results

3Q Results

4Q Results

Net sales
Electronic
Components
Segment income

84,060Information Net sales
Equipment
Segment income

13,677

Software

Others

Total

1,084
853

Net sales

990

Segment income

226

Net sales
Segment income
Net sales
Segment income

1.3%

6.2%

2.6%

592

22.9%

20

5.5%

112

2.8%

3,082

728

5.0%

156

16.9%

5,969
2.7%

325

5.5%

128,099

105,406
2.2%

2.6%

927

4,114
1.4%

2,732
14,451730

104,813
2,282

2,335
10,745

6,085
87

106,750

89,816

2.9%

3,950

3.1%

YoY

QoQ

27.0%

18.9%

151.9%

17.0%

5.7%

34.5%

-14.6%

23.1%

-6.3%

27.1%

-31.0%

662.0%

-1.9%

45.1%

270.3%

188.1%

22.2%

21.5%

73.0%

28.2%

Note: Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).

13Reference

Effect of M&As (3months)（million yen）

Net Sales

Gross profit / Gross profit margin

Sales increased significantly for Kaga Electronics, however the loss ofmajor commercial rights continued to impact Kaga FEI.

Income rose substantially for Kaga Electronics, and began to increase
for Kaga FEI as well, with both companies seeing an improvement intheir profit margin.

+9,511

104,813-2,389＋16,163

128,099+23,285

11,770+1,752

13.9%

14.5%

+31

7.8%

11.2%
Kaga
Electronics

KagaFEI

Excel

FY2021/3
4QResult

FY2020/3
4QResult

Kaga
Electronics

FY2021/3+2,518

11.2%

4.5%

7.2%
FY2020/3
4QResult

14,289+733

KagaFEI

Excel

FY2021/3
4QResult

FY2021/3

SG&A / SG&A ratio

Operating income / Operating income margin

Kaga Electronics saw its expenses rise, but efforts to curb
operating costs paid off and selling, general and administrative
expenses improved.

All three companies generated higher income, and profit margins
improved significantly for Kaga Electronics and Kaga FEI.

+468

9,488
10.8%

9.1%

10,339
+851

2,282

10.0%

6.4%
FY2020/3
4QResult

-185

+568

KagaFEIFY2021/3

3.5%
Excel

8.1%

+167

3,950

+128

+1,667

4.6%

3.1%
6.3%

Kaga
Electronics+1,361

2.2%

1.3%

3.1%

0.8%

0.8%
FY2021/3
4QResult

FY2020/3
4QResult

Kaga
Electronics

KagaFEI

Excel

FY2021/3
4QResult

FY2021/3(note) With respect to gross profit and operating income, figures presented above are before

consolidation adjustments between the two companies. For reference, after consolidation
adjustments, gross profit stood at 3 million yen, and operating income came to 10 million yen.

14

Reference

FY2021/3 results by company（３months）（million yen）

Kaga
Electronics

Net sales
Gross Profit
operating income
Net sales

Kaga FEI

Gross Profit
operating income

Excel

FY2021/3

FY2021/3

4QResults

3QResults

4QResults

YoY

QoQ

62,91260,93872,423+15.1%+18.8%

8,736 13.9%
1,942 3.1%

8,931 14.7%
3,158 5.2%

10,488 14.5%+20.1%+17.4%+70.1%+4.6%

41,901
3,032
339

32,7002,458 7.5%
-59 -0.2%

39,511-5.7%+20.8%

7.8%

+1.0%

+24.6%

1.3%+49.3%－

11,767

16,163－+37.4%

7.2%
0.8%

3,304
3,064
506

4.6%

Net sales－

Gross Profit

－

－

623

5.3%

733

4.5%

－

+17.7%

operating income

－

－

-14

-0.1%

128

0.8%

－

－

+22.2%+21.5%+21.4%+19.0%+73.0%+28.2%Net sales
Total

FY2020/3

Gross Profit
operating income

104,813

105,406

128,099

11,770 11.2%
2,282 2.2%

12,005 11.4%
3,082 2.9%

14,289 11.2%
3,950 3.1%

(note) With respect to gross profit and operating income, figures presented above are before consolidation adjustments
between the three companies.

15

Reference

Financial Highlights: Electronic Component (3 months）（Million Yen)

Net sales/Segment income
/
/

YoY

Net Sales
Segment Income

12 0000

80 00

106,750

 Net sales
 Segment
Income+22,689million Yen 27.0％Up＋1,648million Yen 151.9％Up

70 00

10 0000

89,816

84,06060 00

80 00050 00

60 000QoQ Net sales
 Segment
Income+16,933million Yen 18.9％Up+397million Yen 17.0％Up

40 00

2,335

40 000

2,732

30 00

20 00

20 000

1,084
10 00

0

0

FY2020/3
4QResults

FY2021/3
3QRresults

FY2021/3
4QResults

16

Reference

Financial Highlights: Information Equipment（3 months）（Million Yen)

Net sales/Segment income
/
/

YoY

Net Sales
Segment Income

40 00

16 000

14 00014,451

13,677

 Net sales
 Segment
Income＋774million Yen

5.7％Up- 124million Yen 14.6％Down

35 00

30 00

12 00010,74525 00

10 00020 00

QoQ
 Net sales
 Segment
Income＋3,705million Yen 34.5％Up＋136million Yen 23.1％Up

80 00

15 00

60 00

853
592

728

10 00

40 00
50 0

20 00

0

FY2020/3
4QResults

FY2021/3
3QRresults

FY2021/3
4QResults

17

Balance Sheet Main Items（million yen）

Total assets

Total liabilities and net assets
237,004

237,004+29,366＋29,366

213,761

213,761

207,638

207,638

141,942
129,501

200,179+25,847

182,396+20,553

Total liabilities

95,062

Total net assets

121,388

Current assets

174,331

31,36433,306

2019/32020/336,825+3,5182021/384,25986,2502019/32020/3+8,812

Non-current assets

2021/318

Balance Sheet Main Items（million yen,day）

Inventories

Accounts receivable/Accounts payable

49.9

93.7

160, 000

90. 0

77.0

40. 0

50, 000

26.3

32.8
140, 00030. 0

40,02637,94840, 000+6,04031,90879.8

Inventory turnover
120, 000

20. 0

63.3

101,507100, 000

10. 0

30, 000

80, 000

A/R turnover

75.2

77,8840. 0

64.6

70,188A/P turnover

108,394+17,023

91,371

70. 0

50. 0

Notes and A/R

79,85430. 0+9,665

10. 0

60, 000

20, 000- 10.0Notes and A/PInventories- 10.040, 000- 20.010, 000- 30.0- 30.020, 000- 40.000

2019/32020/32021/3- 50.02019/32020/32021/3notes：Inventory turnover ＝ Inventories ÷ Net Sales × 365（day）notes：・Notes and A/R are amounts including Electronically recorded monetary claims-operating
・Notes and A/P are amounts including Electronically recorded obligations - operating
・A/R turnover ＝ Notes and A/R ÷ Net sales × 365（day）
・A/P turnover ＝ Notes and A/P ÷ Total purchase of goods × 365（day）

19

Cash and Deposits/Interest Bearing Debt/Cash Flows（million yen）

Cash and deposits
0.43

0.37

0.42

（times）
0. 50

D/E ratio

70, 000

-0.03

-0.19

-0.08
0. 00

Net D/E ratio

60, 000

45,63650, 000

43,384- 0.5035,00332,85130, 000

Cash and deposits

11,68438,261+9,52428,736

Cash flows fromoperating activities

22,406+2,251- 1.0040, 000

Cash flows

9,999- 1.50-1,547-3,651-6,860- 2.0020, 000

Interest bearing debts-7,544-2,453

Cash flows fromfinancing activities-6,851

Cash flows frominvesting activities- 2.5010, 000

2019/3末- 3.000

2019/32020/32021/3

FY2019/3

2020/3末

FY2020/3

2021/3末

FY2021/3

note：D/E ratio＝ Interest bearing debts ÷ Shareholder’s equity
Net D/E ratio ＝Interest bearing debts - Cash and deposits） ÷ Shareholder’s equity

20Major Business Indicators（million yen）

Equity ratio
350, 000

300, 000

ROE
0. 400

35.8%

37.7%

10.9%

38.4%

13.5%
7.6%

0. 350237,004+29,366

250, 000

213,761

207,638

2.7

0. 300200, 000

1.3

2.7

Net profit margin

Total assets

150, 000

0. 2502.7

90,967100, 000

76,60478,284

2.8+12,682

2.6

Financial leverage

0. 200Shareholders’ equity

50, 000

1.4
0

0. 1502019/32020/32021/3

FY2019/3

2.1

FY2020/3

1.8

Total asset turnoverFY2021/3

21

Forecasts for FY2022/3（million yen）

FY2021/3
Results
Net sales

FY2022/3
Forecasts

470,000

422,365*Management

YoY

Targets FY2022/3

11.3%

500,000

Operating income

11,4672.7%

13,000

2.8%

13.4%

13,000Ordinary income

11,241

2.7%

12,000

2.6%

6.7%

ー

Profit attributable toowners of parent

11,399

2.7%

8,000

1.7%

-29.8%ーEPS（Yen）

415.07291.20

ー

ー

ROE

13.5%

8.5%

-5.0pt8.0%

or higher*Medium-term Management Plan 2021
Management Targets
Note:Beginning with the start of the fiscal year ending on March 31, 2022, the “Accounting Standard for Revenue
Recognition” (Business Accounting Standards No. 29), etc. will be adopted, and thus the above consolidated
earnings forecasts are figures after this accounting standard, etc. has been applied.

22

Forecasts for FY2022/3 by Segment（million yen）

FY2021/3

FY2022/3

Results

Forecasts

Net sales
Electronic
components Segment income

353,454

Information Net sales
equipment Segment income

48,389Software

OthersTotal

Net sales
Segment income
Net sales
Segment income
Net sales
Segment income

8,151
2,482

404,000
2.3%

5.1%

9.0%

2,300
300

2.7%

500

5.1%

13,000

-7.3%
2.3%

10.0%

13.9%
2.3%

2.8%

470,000
2.7%

21.5%
-7.0%

18,000422,365
11,467

2.5%

3,000

17,589
474

9,900

14.3%

45,000

2,932
263

YoY

5.4%
11.3%

2.8%

13.4%

Note: Figures of each segment income are not inter-segment adjusted. Total amount is inter-segment
adjusted (operating income).

23

Reference

Segment disclosure associated with the Medium-Term Management
Plan

Continuous disclosure based on current segmentation according to legal financial accounting,along with voluntary disclosure based on segmentation in line with the new Medium-Term
Management Plan

Current segments

Segments in Medium-Term Management Plan

Legal financial accounting

Management Accounting

Components sales businessElectronic
components

 Sales of semiconductors
 Sales of general electronic
components
 Sales of various kinds ofdevices

EMS business Electronic equipment
manufacture contracting
services

Informationequipment

 Sales of PCs and PC
peripherals
 Sales of home electric
appliances and lighting fixtures
 Sales of photograph andimaging products

Software Production of CG video andsoftware

Others Sales of amusement
equipment Repair and support forelectronics equipment
 Sales of sports goods

Electronic
components

 Sales of semiconductors
 Sales of general electronic
components
 Sales of various devices

EMS

 Electronic equipment manufacture
contracting services

CSI

 Sales of PCs and PC peripherals
 Sales of home electric appliancesand lighting fixtures
 Sales of photograph and imaging
products

CSI: Consumer & System Integrator

Others Production of CG video andsoftware Sales of amusement equipment
 Repair and support for electronics
equipment
 Sales of sports goods
24Reference

Business segments of Parent company andGroup companies

KAGA ELECTRONICS CO., LTD.

Electronic
Components

Electronics Business Division
EMS Business Division
Communication Network Sales Division
Specific Industry Business Division
Sales Promotion Division●

KAGA TECH CO., LTD.
KAGA DEVICES CO., LTD.
KAGA SOLUTION NETWORK CO., LTD.
AD DEVICE CO., LTD.
KAGA MICRO SOLUTIONCO., LTD.
DIGITAL MEDIA LAB., INC.
KAGA SPORTS CO., LTD.
KAGA AMUSEMENT CO., LTD.
KAGA TECHNOSERVICE CO., LTD.
KAGA FEI CO., LTD.(former:FUJITSU ELECTRONICS INC.)
KAGA EMS TOWADA CO., LTD.
EXCEL CO., LTD.
KYOKUTO ELECTRIC CO.,LTD.

●●

Major Affiliates in Japan

●
●
●

●

●
●

Major Affiliates Overseas

KAGA TAXAN (SUZHOU) ELECTRONICS CO., LTD.
KAGA (SHANGHAI) ELECTRONICS CO., LTD.
KAGA (SHENZHEN) ELECTRONICS CO., LTD.
KAGA (H.K.) ELECTRONICS LIMITEDKAGA DEVICES (H.K.) LIMITEDKAGA (TAIWAN) ELECTRONICS CO., LTD
KAGA ELECTRONICS (THAILAND) COMPANY LIMITEDKAGA COMPONENTS (MALAYSIA) SDN.BHD.
KAGA ELECTRONICS INDONESIA, PT
KAGA ELECTRONICS (VIETNAM) CO., LTD.
KAGA (SINGAPORE) ELECRONICS PTE LTD
KAGA ELECTRONICS (USA) INC.
TAXAN MEXICO S.A. de C.V.
KD TEC s.r.o.

(●)
●
●
(●)
●
●
●
●

EMS

CSI

Others

●
●
●
●

(●)

●

●
(●)

(●)
●

(●)
●

(●)
●
●

(●)
●

●

(●)

●
●
●
●

●
●
●
●
●
●
●
(●)
●
●
●
●
(●)
●
●
●

(●)

25

Reference

Financial Highlights by Business Segment of
the Medium-Term Management Plan＊announced on February 4, 2021

Net sales
Electronic
Componens
Segment income
EMS

CSI

OthersTotal

Net sales
Segment income
Net sales
Segment income
Net sales
Segment income
Net sales
Segment income

FY2020/3

FY2021/3

Results

Previous Forecasts(*)

292,905
3,553

267,000
1.2%

93,340
4,015

4.3%

3.9%

2,300

4.5%

200

4.6%

9,000

2,961

1.1%

5,539

5.6%

48,389
4.6%

2,482

5.1%

12,057
1.8%

387

3.2%

422,365

415,000
2.3%

YoY

99,59911,000443,615
10,0140.9%

50,00013,902623

4,000

FY2021/3
Results

262,318

87,00043,466
1,707

2,500

（million yen）

2.2%

11,467

2.7%

vs Forecasts-10.4%-1.8%-16.7%+18.5%+6.7%+14.5%+38.0%+38.5%+11.3%-3.2%+45.3%+7.9%-13.3%+9.6%-37.8%+93.9%

-4.8%

+1.8%

+14.5%+27.4%

Note : Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).

26

Reference

Financial Highlights by Business Segment of
the Medium-Term Management Plan (3months)（million yen）

Net sales
Electronic
Componens
Segment income
EMS

CSI

Others

FY2020/3

FY2021/3

FY2021/3

4QResults

3QResults

4QResults

64,221614

1.0%

22,618Net sales
Segment income

559

Segment income

853

2.5%

Segment income

225

1.2%

1,625

6.2%

592

6.0%

38

1.6%

1,649

5.6%

14,451
5.5%

728

5.0%

3,858

2,760
5.2%

1,304
29,383

10,745

4,296

Net sales

805
27,275

13,677

Net sales

80,40564,625

1.4%

261

6.8%

YoY

vs Forecasts+25.2%+24.4%+112.2%+62.1%+29.9%+7.7%+194.6%

+1.5%

+5.7%

+34.5%-14.6%+23.1%-10.2%+39.8%+16.0%+574.3%Note : Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).

27

Management Topics

President & Representative Director

Ryoichi Kado

Today’s Key Message
Overview of
FY2021/3
Progress with
Medium-Term
Management
Plan
PMI ofacquiredcompanies
Coronavirus
countermeasures
Strengthening
governance
and
SDGs







Operating income at highest level for second fiscal year in a row.
Operating income exceeding 10 billion yen was steadily generated due to progresswith our profit-generating capability.
Progress was generally in line with the plan. Although net sales are still far from thetarget, we expect operating income to reach the target.
Within FY2022/3, we plan to release the next medium-term management plan.
We aim to continue setting new records for income.

Progress was generally in line with plans, including the consolidation of sales bases.
In FY2021/3, operating income was in the black, and the companies will begin tocontribute to income from FY2022/3.



We are managing the Group with employee safety and peace of mind as our top
priority both in Japan and overseas.

We have decided to increase the number of outside directors so that they account for
one-third or more of the board members, and set up a Nomination andCompensation Committee.
The SDGs Committee was established under the President and will address ESG issues
throughout the Group.

29

Overview of FY2021/3:
Progress in Profit-Generating Capability（million yen）

Kaga Electronics consolidated
Net Sales

OP Margin

GP Margin

SG&A ratio

・ Operating income reached a record high fora second straight year, following FY2020/3.
・ The gross profit margin, which had been in a
decline since the acquisition of FEI, has begun
to improve after bottoming in FY2020/3.
・ We have made progress in creating a profit
structure that can consistently generate over
10 billion yen in operating income.

Kaga Electronics alone

・ Operating income exceeded 10 billion yen,which was a first for Kaga Electronics alone,
the core of the Group. The operating income
margin was 4.5%.
・ The gross profit margin, which is the sourceof income, continues to rise, inching up fromthe 12% range to the 13% range and thenthe 14% range.
・ The SG&A ratio was kept down to levels
below 10%.
30

Targets of the Medium-Term Management Plan:
Changes from the Time of Planning（million yen）

Makeup when plan
was established（2018/Autumn)

Kaga
Electronics

Net sales

Segment income

500,000

13,000Kaga Electronics：260,000

Kaga Electronics：10,000

Kaga FEI：240,000

255,000

loss of majorcommercial rights

KagaFEI

145,000 95,000

Excel

70,000

FY2022/3
Forecasts

Kaga FEI

3,000

11,250

1,000

2,000

750

Challenge goals

470,000

30,00013,00031

Progress of PMI at KAGA FEI（formerly Fujitsu Electronics）

EMS
initiatives

Cross-selling
initiatives

New productinitiatives

 Obtained orders for development, experimental production and mass
production from five companies, including automotive equipment
manufacturers and electronics manufacturers
124 companies/new visits ➡ 74 companies/currently in sales talks<Focus point>
The EMS/E2MS Business Division was established, and the number of new orders
exceeded levels in the previous year despite COVID-19.
Affiliations were formed with EMS factories within the Group for mass-production orders.

 Continue to expand sales of Kaga Electronics’ influential products to large
and important clients<Focus point>
Large-scale sales talks are underway in several fields, including auto solutions, network
solutions, system equipment, infrastructure equipment, home appliances and other.

 Expanded products and services in a wide range of fields, such as
semiconductors, electronic parts and unit modules<Focus point>
New products handled: 90 companies、sales are expected to total about 20 billion yen in
FY2022/3（Sales were 12.6 billion yen in the previous fiscal year.)Japan
Consolidationof sales bases

Overseas

・Relocation of FEI Osaka Office to KG Kansai Sales Office[December/2020]＊Nagoya, Hiroshima and Niigata have already completed integration

・ KG US sales company to integrate with FEI US sales company[January 2021]
・Kaga Electronics’ sales company in South Korea and KFEI’s sales
company in South Korea are under consideration (target date of
H1 FY2021)*Abbreviations ：KAGA FEI ➔ KFEI

32

Progress of PMI at EXCELNew businessInitiatives

 Expanded sales of photocatalytic sanitizer/deodorizer* manufactured by
Kaltech Co., Ltd.
 Expanded sales of EV buses manufactured by China’s Alfabus Co., Ltd.

<Focus point>
Utilization and full-scale deployment of networks owned by Kaga Electronics and EXL iscurrently underway※ EV bus sales: 2 buses introduced in FY2021, finalized orders for 2 buses for FY2022

 Strengthen sale of products held by Kaga Electronics to major customers

Cross-selling
initiatives<Focus point>
The Group Synergy Promotion Office was set up to strengthen ties with Kaga Electronics.
In addition, the Special Sales Marketing Division was set up, and the range of products
other than electronic components that are handled is being expanded.

Japan
Consolidationof sales bases
Overseas

・ EXL merged with ADS (on October 1, 2020)
・ EXL’s headquarters will be moved to Kaga Electronics’ headquarters(Akihabara) [March 2021]
・ EXL’s Nagoya branch will be moved to KG’s Nagoya sales office [April
2021]
・ Changes for other sites in Japan are currently being considered・ EXL Singapore will be liquidated and business moved to Kaga Singapore[December 2020]
・ ADS Hong Kong’s business was transferred to EXL Hong Kong [20年12月]
・ Changes for other overseas sites are being considered*Abbreviations: EXCEL➔EXL

Advanced Display Solutions（ EXL’s subsidiary ）➔ADS
33

Response to the Spread of Novel Coronavirus Infection
Sales bases

We continued operating with an emphasis on safety measures, such as telework andstaggered commuting times, in line with directions from the national and local
governments. We curbed the flow of people with a target of 20% of employees coming
into work when the government declared a state of emergency.

Officeattendance rate


H1

H2

Number of
COVID-19 cases

Kaga
Electronics

39.1％

46.5％

2

Group
companies

46.2％

52.7％

14

In Japan, we continued operations with an emphasis on safety measures, in line withguidance from the national and local governments. Overseas, some bases suspended
operations due to lockdowns in H1 of FY2021/3. Operations have continued since then.
Status of suspended operations following increase in COVID-19 cases
H1

Production
bases

Thai・Indonesia・
TurkeyHubei, China

No suspension of operations
Feb.1～Mar.15 *H2

Number of COVID19 cases(region)(China)Suzhou, China

Feb.1～9 *0Shenzhen, China

Feb.1～13 *(Asia)

Malaysia

Mar.18～Apr.20

Vietnam

Apr.1～15

India
Czech
MexicoMar.25～May31
Apr.7～90名(Europe)30(American)

Apr.1～May30* H2 of FY2020/3

25

Operation suspension period34

Response to the Spread of Novel Coronavirus Infection
Sales bases in Japan
Do not bring the virus towork or spread it

Thermometers
were set up

Partitions within offices

Thorough antiviral andantibacterial measures were taken
Antiviral coating wasappliedPhotocatalytic sterilizing
deodorizers were set up

Overseas production bases
Do not bring the virus towork or spread it

Temperature taken
when arriving at work

Goggles and masks worn

Social distancing wasstrictly enforced

Production lines

Commuting to workon company-owned bus

35

Strengthening the Governance SystemWe have decided to increase the number of independent outside directors by one, so that they accountfor one-third or more (June 29, 2021).
We are setting up a Nomination and Compensation Committee as a voluntary advisory body (June 29, 2021).
The SDGs Committee was established to promote sustainability management across the Group (April 1, 2021).

General Meeting of Shareholders
Nomination andCompensation Committee

Board of Directors

Board of Auditors

Audit

Audit

collaboration

President & COO※Newly formed

SDGs
Committee

CSR Promotion
Committee

The Group Management
Headguarters Meeting

Environment
Working group
Society
Working group
GovernanceWorking group

Compliance Committee
Risk Management
Committee

Management Meeting

Information Disclosure
Committee
Personal Information
Management Committee

Audit

Accounting
Auditors

Founder & CEO

Collaboration

Proposals,consultation

Appointments,
dismissals

Appointments, dismissals

Appointments,
dismissals※Newly formed※Increase inoutside directors

Audit Officecollaboration
Audit

Divisions,Group companies

36

SDGs Committee

Basic stanceon SDGs

System forpromotingSDGs
internally

We established the SDGs Committee with the aim of deepening our response to CSR
and ESGs, which we have been working on, and pursuing sustainability
management across the Group.

We will contribute to the creation of a sustainable society in line with our corporate
philosophy of “everything we do is for our customers” by resolving social issues andachieving sustainable growth as a company.



The SDGs Committee is chaired by the President, and consists of each division’s chief
officers, among others. Working groups on the environment, society andgovernance are set up under this committee to establish guidelines, measures andobjectives for the ESG issues, as well as to monitor progress and perform otherfunctions.
This committee is under the direct control of the President, and with the commitmentof top management, the committee will work closely with the business divisions andGroup companies to expand SDG initiatives on an ongoing basis.

Environment
ESG issues toaddress・ We will address the aggressive use of reusable energy at theGroup’s offices in Japan and factories overseas to help achieve a
decarbonized society, among others.

Society

・ We will promote diversity, as well as work-style reforms andhealth management adapted to COVID-19 conditions, to contributeto a sustainable society in which the company and employees
cooperate and the quality of life is improved.

Governance・ We will build a governance system aimed at strengthening ourcompetitiveness in line with our corporate philosophy andcommitment to legal compliance so that we continue to be avaluable company for all stakeholders.
37ReferenceFinancial Highlights by Business Segment（million yen）

Net Sales
443,615
19,781
2,778
43,466

Segment Income

422,365
17,5892,932
48,389

YoY ：
QoQ

Total

-21,249-4.8%

10,014

Others

YoY ：
QoQ :

-2,192-11.1％

Software

YoY ：
QoQ ：

377,587

353,454

+153
+5.5％

263
2,482

+1,452+14.5%

Others

YoY ：
QoQ ：

+22
+4.9%

Software

1,707

YoY ：
QoQ ：

+26
+11.4％

Information equipment

YoY ：
QoQ ：

YoY ：
QoQ ：

YoY ：
QoQ ：

FY2021/3
Results

452
236

474

Total

Information equipment＋4,922+11.3％

Electronic equipment

FY2020/3
Results

11,467

YoY ：
QoQ ：

7,503

8,151

-24,133-6.4％

Electronic equipment
YoY ：
QoQ ：

FY2020/3
Results+774+45.3％+647+8.6％

FY2021/3
Results

Note: Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).

39

Financial Highlights by Business Segment <Net Sales>（million yen）

Net Sales
128,099

121,066
109,564
4,412
437
10,126

5,097
895
9,842

108,170
4,185
455
9,820

104,813
6,085
990

13,677

84,1302,904
491
12,537

104,729

105,406

4,600
783
10,654

4,114
730
10,745

5,969
927
14,451

YoY ：
QoQ ：

Total

＋23,285＋22,692

Others
YoY ：
QoQ ：

-115
＋1,855

Software

YoY ：
QoQ ：

-62
＋197

Information equipment

94,587105,230

93,708

106,750
88,69084,06089,816FY2020/3
2QResults

FY2020/3
3QResults

FY2020/3
4QResults

FY2021/3
1QResults

YoY ：
QoQ ：

FY2021/3
2QResults

FY2021/3
3QResults＋774＋3,705

Electronic component

68,196FY2020/3
1QResults

YoY ：
QoQ ：

+22,689+16,933

FY2021/3
4QResults

40

Financial Highlights by Business Segment < Segment Income >（million yen）

Segment Income

3,950
3,389
186
108
429

1,850

2,492
105
236

72
188
2,617

2,778
2,282

137
131

87
226

1,656

853

583

2,180
1,185

FY2020/3
4QResults-44-101
FY2021/3
1QResults-37-61
FY2020/3
1QResults

1,084

FY2020/3
2QResults

FY2020/3
3QResults

3,082

156

112
20

728

YoY
QoQ

592
YoY
QoQ

577

1,897

1,621

325

YoY
QoQ

2,335

2,732

Total

： ＋1,667：+867

Others
：
：

＋237
+212

Software
：
：

-70
＋136

Information equipment
YoY
QoQ

：
：

-124
+136

Electronic component
YoY
QoQ

FY2021/3
2QResults

FY2021/3
3QResults： +1,648：+397

FY2021/3
4QResults

Note: Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).

41

Net Sales by Region（million yen）

Net sales

YoY Japan443,615

 North America

422,365

 Europe Asia270,585 [61.0%]

240,240 [56.9%]-30,345million yen 11.2％Down-4,195million yen 15.6％Down-6,396million yen 32.0％Down＋19,688million yen 15.6％UP

Japan

North America

26,894 [6.1%]
20,019 [4.5%]

126,115 [28.4%]

FY2020/3
Results

22,698
13,622[5.4%][3.2%]

145,804 [34.5%]

EuropeAsia

FY2021/3
Results

42

Net Sales by Region （3 months）（million yen）

Net sales

YoY Japan

128,099

104,813

 North America
 Europe

105,406

 Asia72,142 [56.3%]

Japan

QoQ

56,619 [53.7%]
69,610 [66.4%]

North America

6,175 [5.9%]
3,573 [3.4%]
7,077 [6.8%]
3,468 [3.3%]
39,038 [37.0%]

5,276
3,467

[4.1%][2.7%]

47,212 [36.9%]+2,532million Yen 3.6％UP- 1,800million Yen 25.4％Down
0.0％Down- 0million Yen+22,554million Yen 91.5％UP

EuropeAsia＋15,522million Yen 27.4％UP- 898million Yen 14.5％Down
 North America- 106million Yen 3.0％Down
 Europe Japan Asia+8,174million Yen 20.9％UP

24,657 [23.5%]
FY2020/3
4QResults

FY2021/3
3QResults

FY2021/3
4QResults

43

Exchange Rate/FOREX Sensitivity（Reference）

Effect of 1% change（Million Yen）
Ordinary
Net sales
incomeForex
Assumptionfor2022/3(yen)FY2020/3
Results

FY2021/3
Results

USD

108.74106.061,558

35

110.50

THB

3.52

3.42

223

11

3.50

RMB

15.78

15.48

165

9

15.50

HKD

13.91

13.68

150

3

14.00

（Yen）

（Yen）

44

＜ｍemo＞

45

“Everything we do isfor our customers
20 Kandamatsunagacho, Chiyoda-ku, Tokyo 101-8629
Contact: Investor Relations & Public Relations Office
TEL:+81-3-5657-0106
FAX:+81-3-3254-7133
E-mail： webmaster@taxan.co.jp
https://www.taxan.co.jp

■ Forward-looking statements in these materials are based on information available to management
at the time this report was prepared and assumptions that management believes are reasonable.
Actual results may differ significantly from these statements for a number of reasons.
■ Display method in this material
Number : Truncated less than the display unit.
Ratio: After calculation in yen units, Round down one digit of Display unit.