Explanatory Materials for
Financial Results
Fiscal Year Ended March 31, 2023
IWATSU ELECTRIC CO., LTD. | May 15, 2023

Table of Contents

1

Financial Highlights/Progress of Medium-term Management Plan

2

Results for the Fiscal Year Ended March 31, 2023

3

Forecast for the Fiscal Year Ending March 31, 2024

© 2022 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

2

1

Financial
Highlights/Progress of
Medium-termManagement PlanFinancial Highlights
The external environment surrounding the Group and the major impacts on the Company’s business are as follows.

External
Environment

Major
Impacts on
Business

Results forthe fiscal
year ended
March 31,2022

Results forthe fiscal
year ended
March 31,
2023

Revenue

231.8

229.0

Operatingprofit5.0(9.8)(14.8)

Ordinary profit

5.9

(9.1)

(15.0)

Profitattributable toowners ofparent5.9(11.8)(17.8)

2.4%(4.8%)(7.2%)

 The transition to living with COVID-19 progresses, and there are signs ofrecovery in social and economic activities.
 The ongoing situation of the prolonged Russia-Ukraine conflict, the impact ofthe depreciation of the yen on the rise of fuel prices, and the persistent
shortages of parts supply have led to an uncertain outlook that continues.

Business
communication
systems

The impact of rising fuel prices and persistent tightness in parts
supply continue, and risks to the business remain.

Printing systems

The overall printing market is experiencing a stagnation trend andstruggling.
Meanwhile we are creating new businesses by focusing on productsthat apply chemical technology cultivated in the printing business.

Test and measurement
equipment

Revenue has been steadily growing due to the increased backlog oforders for electronic components resulting from difficulties inprocurement.

Property leasing

Occupancy rates in properties for lease have been improving, so it
has been operating at a steady pace.

© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

(¥100 million)

ROE

Change fromprevious
term

(2.8)
[(1.2%)]

[-]

[-]

[-]

4

Major Medium-term Measures Implemented in Fiscal Year 2022
Medium-term Tier 1: Review of printing business operations
 Established Iwatsu Chemical Cross Co., Ltd.
In order to expand the business domain by transitioning to businesses applying
chemical technology that has been cultivated in operational cost reduction in theprinting business, Iwatsu Chemical Cross Co., Ltd. was established in October2022.

Medium-term Tier 1: Improved efficiency of production system
 Transfer of shares of Iwatsu (Malaysia) Sdn. Bhd.
• The transfer of all shares of our manufacturing subsidiary (consolidated
subsidiary) located in Malaysia will be completed by the end of July 2023. We
will proceed with domestic consolidation of production bases and aim to
improve production efficiency.
• We will expand electronic component procurement from the corporate group towhich the shares are being transferred, aiming to stabilize the supply chain andexplore synergistic business collaborations.

Medium-term Tier 2: Business communication systems
Strengthen cloud-based services
To accelerate the strengthening of the subscription business in Tier 2 of themedium-term plan, REBORN, the following measures will be implemented.

 Capital and business alliance with Nextgen(hereinafter referred to as NG Company)
By integrating NG Company’s cloud infrastructure with our technology, we havecreated the Iwatsu Cloud Communication Platform, which specializes intelecommunication for call centers and office environments.

 Release of Cloud Communication Platform Blue Commpaas
By providing a platform for operators of voice-based
infrastructure, we contribute to improving customer
experience and addressing labor shortages throughautomation.

Structure of Iwatsu Cloud Communication Platform
Application

Parts/Components

Development

Contact Center

Platform

OfficeCommunication

Medium-term Tier 2: Strengthen profitability of property leasing business Acquisition of property leasing through anonymous
association investment
In March 2023, a special purpose company (SPC) was established and an
anonymous association was consolidated as a subsidiary. Acquired three newly
built rental apartment properties in the 23 special wards of Tokyo throughanonymous association investment.
© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

5

Progress of Medium-term Management Plan

Tier 1

Thorough reduction of fixed costs

As mentioned earlier, the measures implemented in the first year of the medium-term plan have been progressing
smoothly.
Major measures
Theme

Cost reduction of
Kugayama
Headquarters

Contents
 Reduction of property maintenance costs for

Kugayama Headquarters, etc.
 Improved efficiency of indirect operations(Review of operations through the introduction of
ERP, etc.)
 Improved efficiency of production system with

Improved efficiency of
production

multiple locations
 Improvement of product organization and purchasing
methods
 Improved production efficiency through factory DX,
etc.

Details of implementation(fiscal year ended March 31, 2023)

Effect amount (total)

The implementation of the new ERP will
be promoted as planned, and it will start
operation in May 2023.

¥0 million

Decided to transfer all shares of Iwatsu(Malaysia) (a manufacturing subsidiary).
The production of business
communication systems was
consolidated into domestic factories.

¥0 million

Each measure to improve development
efficiency has generally progressed asplanned.

¥10 million

 Reduction of obsolete parts support

Improved efficiency ofdevelopment

Review of businessprofitability Commonization of multiple business phonearchitectures, etc.
 Reduction of outsourcing costs by increasing
inhouse production

 Review of printing business operations© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

As a foothold for reviewing businessprofitability, Iwatsu Chemical Cross Co.,
Ltd. was established in October 2022.

¥0 million

6Progress of Medium-term Management Plan

Tier 1

Thorough reduction of fixed costs

Improvement in Operating Income

Fiscal year ending
March 31, 2024

Fiscal year ended March 31, 2023
Theme
Initial plan

Result (A)Rate ofachievement

Forecast

Fiscal year ending
March 31, 2026
(Final year of themedium-term
management plan)

Rate of progress(A/B)

Plan (B)

Cost reduction of
Kugayama
Headquarters¥0 million¥0 million-%¥0 million¥470 million-%

Improved efficiency
of production¥40 million¥0 million-%¥70 million¥410 million-%

Improved efficiency
of development¥0 million¥10 million-%¥0 million¥200 million

5.0%

Review of businessprofitability¥0 million¥0 million-%¥0 million¥100 million-%© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

7

Progress of Medium-term Management Plan

Tier 2

Promote growth strategies through businessselection and concentration and alliances

As mentioned earlier, the measures implemented in the first year of the medium-term plan have been progressing
smoothly.
Major measures
Theme

Contents

 Accelerate overseas expansion (China, Europe,

Growth of test andmeasurement equipment

America) with a focus on instrumentation in the powerelectronics-related field Expand lineup of power electronics-related

products

 Strengthen subscription business

Growth of business
communication systems••

Strengthen the business of promoting DX in the office
Shift to cloud-based services for contact center systems

 Strengthen contract production business Initiatives in advanced technologies such as 5G-related

technologies, energy, healthcare, materials, etc.
 Expansion of IoT business through integration of

New area development

information and communication technology andelectronic measurement technology
 Create new markets by applying chemical technology

Details of implementation(fiscal year ended March 31, 2023)

Effect amount (total)

To facilitate overseas expansion preparations,
efforts are being made to strengthen
relationships with collaborative partners (suchas expanding sales in Europe, entering theNorth American market, enhancing local
support in China, and engaging in joint
development).

¥0 million• Capital and business alliance with NG
Company to strengthen subscription
business• Release of Iwatsu Cloud Communication
Platform (April 2023)• Other measures are currently being exploredfor potential alliances.

¥0 million• Local 5G-related technologies are being
tested and demonstrated within the Group.
• For the application of chemical technologies
in areas such as electric printing, element
evaluations are being conducted at Iwatsu
Chemical Cross Co., Ltd.

-

cultivated in the printing business© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

8

Progress of Medium-term Management Plan

Tier 2

Promote growth strategies through businessselection and concentration and alliances

Fiscal year
endingMarch 31, 2024

Fiscal year ended March 31, 2023
Theme

Initial plan

Result (A)Growthof test andmeasurement
equipment¥30 million¥0 million

Growth ofbusiness
communication
systems¥0 million¥0 million© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

Improvement in Operating Income

Rate ofachievement

Fiscal year
endingMarch 31, 2026
(Final year of themedium-term
management plan)

Rate ofprogress(A/B)

Forecast

Plan (B)-%¥190 million¥310 million-%-%¥0 million¥130 million-%

9Reclassification into the Standard Market Segment
In light of the changes in the business environment, it is determined that ensuring reliable compliance with the maintenance criteria of thePrime Market until the expiration of the Tokyo Stock Exchange’s transitional measures is uncertain. Taking into consideration overall factors,
including the interests of existing shareholders, an application has been made to select the Standard Market. Scheduled to transition on
October 20, 2023.
● Non-compliant items in the Prime Market (as of December 31, 2022)
Market Capitalization of
Outstanding Shares

Daily Trading Volume

Future Direction

Listing MaintenanceCriteria¥10 billion¥20 million

 No change to the Plan for Compliance with Prime Market
Listing Maintenance Criteria submitted in December 2021

The Company’s
Status¥4.49 billion*1¥8 million*2

 Continue to strive to be a company suitable for the Prime
Market, focusing on maintaining high governancestandards and actively disclosing information.

● Compliance status of the Standard Market (as of December 31, 2022)
Market Capitalization of Average Monthly Trading
Outstanding Shares
VolumeListing MaintenanceCriteria
The Company’s
Status¥1 billion¥4.49 billion*1© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

 No change to the medium-term management plan,
REBORN. We aim to enhance corporate value throughthe achievement of our medium-term plan.

10 units
1,398 units*3*1 The stock price calculated by the Company is the average value of the closing prices from July 1st to theend of September 2022.
*2 The figure calculated by the Company for the period from January 1st to December 31st, 2021.
*3 The average monthly trading volume calculated by the Company is the average value for the period fromJanuary to the end of June 2022.

10

2

Results for the
Fiscal Year Ended
March 31, 2023

Results for the Fiscal Year Ended March 31, 2023
Despite signs of a recovery in social and economic activities, a decrease in revenue and profit compared to the same period lastyear was observed due to the increase in fuel prices, prolonged shortages of parts supply, and the increase in valuation losses oninventories for which advance arrangements were made.
Results for the
fiscal year ended
March 31, 2022

Results for the
fiscal year ended
March 31, 2023

231.8

229.0

Operating profit

5.0

(9.8)

(14.8)

Ordinary profit

5.9

(9.1)

(15.0)

Profit attributable toowners of parent

5.9(11.8)(17.8)

2.4%(4.8%)(7.2%)(¥100 million)

Revenue

ROE

Forecast for the
fiscal year ended
March 31, 2023*

Change fromprevious term

(2.8)[(1.2%)]

[-]

[-]

[-]

Compared toprevious forecast

230.0

(1.0)
[(0.4%)]

(9.9)

0.1

(8.8)

(0.3)

(8.8)

(3.0)

(3.6%)(1.3%)

[-]

[-]

[-]

※ Announced on February 10, 2023
© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

12

Analysis of Change in Operating Profit from Previous Term(¥100 million)

Main causes of change Increase in loss from inventory
valuation: -¥480 million
Increased inventory valuation and losses bydisposal due to advanced arrangements andconvergence in preparation for difficulties in
obtaining parts

 Impacts of decrease in revenue:-¥360 million
Sales revenue decreased due to difficulty inprocuring parts, postponement or cancellationof projects, and structural changes in revenue

 Increase in selling, general andadministrative expenses:-¥330 million
Personnel costs decreased by ¥120 million,
but expenses increased by ¥450 million,
mainly due to expenses related to themedium-term management plan measures Foreign exchange impact andincrease in raw material prices:-¥320 million
Cost of sales deteriorated due to thedepreciation of the yen, difficulty in obtaining
parts, and fuel price hikes© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

13

Analysis of Change in Operating Profit Compared to the Forecast at the Beginning of the Term(¥100 million)

Main causes of change Decrease in selling, general andadministrative expenses: +¥320 million
Decreased due to lower personnel costs andexpense containment

 Foreign exchange impact and increasein raw material prices: -¥330 million
Cost of sales deteriorated due to thedepreciation of the yen, difficulty in obtaining
parts, and fuel price hikes

 Increase in loss from inventory
valuation: -¥320 million
Increased inventory valuation and losses bydisposal due to advanced arrangements andconvergence in preparation for difficulties in
obtaining parts

 Impacts of decrease in revenue:-¥230 million
Sales revenue decreased due to difficulty inprocuring parts, postponement or cancellationof projects, and structural changes in revenue© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

14

Segment Overview: Business Communication Systems● Revenue, Segment Profit/Loss(¥100 million)

Reference

200

160

120

Main causes of change

184.1

179.2

176.3

23.8

27.3

22.0

17.1

13.7

16.0

14.5

115.9

119.8

 Revenue(¥100 million)

30

26.8
23.0
20

Segment profit/loss (right axis)

16.0
80
12.0

119.6

10

Revenue (left axis)
Other

40

7.6

Contract production
Cloud solution

0

0
FY ended
March 2022

FY ended
March 2023

© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

FY ended
March 2023
(company plan)

Business phone

Despite the increase in large-scale
contract projects for cloud services andsubsidiaries, revenue decreased to¥17.63 billion due to a decrease inproduction from contract production bysubsidiary companies and difficulties inparts supply for business phones
caused by postponement or cancellationof projects. The change from previous
term was a decrease by 1.6%.

 Segment profit/loss
Segment profit was ¥760 million, adecrease by 52.5% year on year, due tothe increased inventory valuation andlosses by disposal due to advanced
arrangements and convergence inpreparation for increasing fuel price ordifficulties in obtaining them.

15

Segment Overview: Printing Systems● Revenue, Segment Profit/Loss(¥100 million)

20

Reference(¥100 million)

Main causes of change

3

18.5
15.3

 Revenue

15.4
2

10
1
0.2

Revenue (left axis)

00
FY ended
March 2022

Segment profit/loss (right axis)

FY ended
March 2023
-1.7

-10
© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

FY ended
March 2023
(company plan)

-1

-1.3

Due to a decrease in domestic
consumables sales in reaction to alast-minute rush of demand before
the price revision at the end of theprevious fiscal year amid a stagnant
market trend in the overall market,
revenue was ¥1.53 billion, adecrease of 17.1% year on year.

 Segment profit/loss
With the increase in the disposal of
inventories due to businessrestructuring, segment profit was ata loss of ¥170 million, a decrease of¥190 million year on year.

-2
16

Segment Overview: Test and Measurement Equipment● Revenue, Segment Profit/Loss(¥100 million)

Reference40

30(¥100 million)

Main causes of change

4

29.5

31.9

32.2

14.8

12.0

 Revenue
Revenue was ¥3.19 billion, an
increase of 8.0% year on year,
due to the increased backlog oforders of electronic components,
caused by global procurement
difficulties.

3

12.5

20

2.4
2.2

20.2

2

 Segment profit/loss

17.1

17.0
10

Segment profit/loss (right axis)

1

1.2

Revenue (left axis)
Electronic components

00FY ended
March 2022

FY ended
March 2023

© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

FY ended
March 2023
(company plan)

Test and measurement
equipment

Segment profit was ¥120 million,a decrease of 43.4% year on
year, due to increased inventory
valuation and losses by disposal
due to advanced arrangements
and convergence in preparation
for difficulties in obtaining parts.

17Segment Overview: Property Leasing● Revenue, Segment Profit/Loss(¥100 million)

Reference

6

5

5.5

(¥100 million)

Main causes of change

2
5.3

 Revenue
Due to improved occupancy rates inproperties for lease, revenue was¥550 million, an increase of 19.2%
year on year.

1.6

4.6

1.4
4
1.0
1

3

2
Segment profit/loss (right axis)

 Segment profit/loss
Due to the increase in revenue,
segment profit was ¥160 million, an
increase of 52.8% year on year.

1
Revenue (left axis)

00
FY ended
March 2022

FY ended
March 2023

© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

FY ended
March 2023
(company plan)

18

Consolidated Balance Sheet(¥100 million)

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

Change fromprevious year

Current assets

172.3

168.8

(3.5)

Non-current
assets

192.0

184.4

(7.7)

364.4

353.2

(11.2)

Current
liabilities

42.8

41.3

(1.5)

Non-current
liabilities

68.0

70.1

+2.0

110.8

111.4

+0.6

Total assets

Total liabilities
Net assets
Total liabilities andnet assets© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

253.6
364.4

241.8
353.2

(11.8)(11.2)

Main causes of change Current assets: -¥350 million
Cash and deposits: -1040
Accounts receivable-trade: -440
Raw materials and supplies: +650
Work in process: +370
Other: +100 etc.

 Non-current assets:-¥770 million
Property, plant and equipment: -550
Intangible assets: -410
Investments and other assets: +190

 Current liabilities: -¥150 million
Accounts payable - other: -220
Notes and accounts payable-trade: -180
Contractual liabilities: +260
Other: -0 etc.

 Non-current liabilities:+¥200 million
Retirement benefit liability: +130
Other: +70 etc.

 Net assets: -¥1180 million
Retained earnings: -1430
Unrealized securities valuationdifferences: +180, etc.

19Consolidated Statement of Cash Flows
Cash and cash equivalents were ¥4.67 billion, down ¥1.09 billion from the end of the previous fiscal year.

Fiscal year
ended March 31,
2022

Fiscal year
ended March 31,
2023

Change fromprevious term

Cash flows fromoperating activities

13.1

(4.4)

(17.6)Cash flows frominvesting activities

(5.4)

(4.7)

+0.8

7.6

(9.1)

(16.8)(¥100 million)

Free cash flows

Cash flows fromfinancing activities
Cash and cash
equivalents© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

(4.0)

57.5

(2.1)

46.7

+2.0

(10.9)

Major breakdown items
 Cash flows from operating
activities: -¥440 million
Loss before income taxes: -1160
Depreciation: +1060
Impairment loss: +270
Decrease in trade receivables: +600
Increase in inventories: -1040
Decrease in trade payables: -200, etc.

 Cash flows from investment
activities: -¥470 million
Purchase of property, plant and equipment:-290
Expenditure on time deposits: -190, etc.

 Cash flows from financing
activities: -¥210 million
Dividends paid: -250, etc.

20

3Forecast for the
Fiscal Year Ending
March 31, 2024

Forecast for the Fiscal Year Ending March 31, 2024
Anticipating recovery of social and economic activities and gradual recovery in the parts supply environment,
increases in revenue and profits are expected considering production and sales of inventories, which incurred
valuation losses in the current fiscal term.

(¥100 million)

Results for the
fiscal year
ended March
31, 2023

Forecast for
the fiscal year
ending March
31, 2024

229.0

236.0

Revenue(9.8)

Operating profit(9.1)

Ordinary profit

5.0

6.0

Profit attributableto owners ofparent(11.8)

5.0

ROE(4.8%)

2.0%© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

Change fromprevious term(%)

Revenue Anticipating the recovery of socialand economic activities, increase inrevenue is expected.

+7.0[+3.1%]

+14.8
[-]

+15.1
[-]

+16.8
[-]

OperatingprofitOrdinary
profitProfit Anticipating a gradual recovery ofparts supply, increases in revenue
and profits are expected considering
production and sales of inventories
that incurred valuation losses in thecurrent fiscal term.
 This includes the expected effects of
the review of parts procurement
methods implemented in the current
fiscal term and improvement in profit
and loss from price transfer.

+6.8%
22

Forecast for the Fiscal Year Ending March 31, 2024: By Segment(¥100 million)

Business
communication
systems
Printing
systems
Test andmeasurement
equipment
Property
leasing

Adjustment
amountTotal

Results for the
fiscal year ended
March 31, 2023

Forecast for the fiscal
year ending March 31,
2024

Change fromprevious term

Main causes of change

Revenue

176.3

179.6

+3.3

Segment
profit/loss

7.6

16.4

+8.8

Revenue

15.3

15.4

+0.1

Segment
profit/loss

(1.7)

(0.5)

+1.2

Revenue

31.9

33.3

+1.5

Segment
profit/loss

1.2

4.1

+3.0

Revenue

5.5

7.8

+2.3

Segment
profit/loss

1.6

1.9

+0.3

-

-

-

Selling,
general andadministrative
expenses(18.5)(17.0)+1.5

Revenue

229.0

236.0

+7.0

Operatingprofit

(9.8)

5.0

+14.8

© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

Increased revenue and profit are expected, based on adecrease in loss from inventory valuation due toimprovement in the parts supply environment and theeffects of price transfer.
In the process of business transformation centered on
chemical technology, revenue is expected to be nearlyin line with the previous fiscal year, and profit isexpected to improve due to the effects of restructuring.
Increased revenue and profit are expected due to an
expected increase in demand mainly for powerelectronics related products.
An increase in revenues is expected due to leasing
income from anonymous associations.

Expected effects from cost containment-

23

Analysis of Change in Operating Profit(¥100 million)

Main causes of change Decrease in loss from inventory valuation:+¥790 million
Decreased due to the production and sales ofinventories that incurred valuation losses in thecurrent fiscal term.
 Foreign exchange impact and effect of raw
material prices: +¥360 million
Progress is expected in yen depreciation andthe gradual resolution of the parts supply
shortage.
 Effects of increase in revenue:+¥340 million
Expected increase is due to revenue increases
mainly in the Business communication systems
segment and the impact of structural changes,
as well as the effects of price transfer.
 Increase in selling, general andadministrative expenses: -¥10 million
The expected increase is nearly in line with theprevious fiscal year due to an increase in
selling, general and administrative expenses
resulting from an increase in revenue, against adecrease in expenses associated with therestructuring of the printing business and adecrease in expenses related to the mediumterm management plan.

© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

24

Dividend Forecast
Through a scheduled 25 yen per share dividend for the fiscal year ending March 31, 2024 as part of our efforts to achieve themedium-term management plan, the Company will make concerted group-wide efforts to further enhance corporate value andstrengthen shareholder returns.
(Yen)

50

60%

40.0

40

50.0%

50%

41.7%
40%

36.8%
30

25.0

25.0
24.1%

30%

20
20%
10

10.0

10.0

0.0%
0.0%

10%

7.6%

0.0

0.0

0
FY ended
March 2018

© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

FY ended
March 2019

FY ended
March 2020

FY ended
March 2021

FY ended
March 2022

FY ended
March 2023

0%
FY endingMarch 2024
(forecast)25

Forecasts of Capital Investment/R&D Expenses/Depreciation● Capital Investment● R&D Expenses

Tangible
Intangible, others(¥100 million)

10(¥100 million)

20

7.1
0.3

5.7
5

1.1

Test and measurement equipment
Printing systems
Business communication systems

4.2

3.8

3.9

5

10.7

FY ended
March 2022

FY ended
March 2023

11.6

10

1.2

6.8

4.7

10.8

1.2

10

0.3

15

15.0

1.5

3.7

(¥100 million)

16.5

16.0
15

● Depreciation

10.7

9.8

FY ended
March 2022

FY ended
March 2023

11.2

5

3.4

0

0
FY ended
March 2022

FY ended
March 2023

FY endingMarch 2024
(forecast)Fiscal year ended March 31, 2023
 Decrease in tangible mainly due to lower capital

investment
 Decrease in intangible, others due to no
development of main products

Fiscal year ending March 31, 2024
 Tangible, intangible and others forecast to

increase ¥350 million compared to the previous
fiscal year
© 2023 IWATSU ELECTRIC CO., LTD. All Rights Reserved.

0
FY endingMarch 2024
(forecast)Fiscal year ended March 31, 2023
 Results to decrease ¥100 million compared to

FY endingMarch 2024
(forecast)Fiscal year ended March 31, 2023
 Generally in line with the previous fiscal term

the previous fiscal year

Fiscal year ending March 31, 2024

Fiscal year ending March 31, 2024

 Forecast to increase ¥150 million compared to the Forecast to increase ¥90 million compared to theprevious fiscal year

previous fiscal year due to increased capital
investment
26

Caution Regarding Forward-Looking Information
Statements in this document regarding future plans, forecasts, strategies and other future information of the Company and the Group are based on certain
assumptions that the Company determines to be reasonable based on information available at the time this document was prepared, and actual results may differ
significantly from these assumptions. These statements regarding forward-looking information involve a variety of risks and uncertainties, the principal ones arelisted below, but this list is not exhaustive.
 Trends at major customers

 Litigation and other legal proceedings

 Bias towards second-half performance Natural disasters, etc.

 Intensifying market competition with competitors Information leaks

 Deterioration in business performance ofbusiness partners, etc.

 Spread of infectious disease

The statements contained herein do not constitute a public offering of securities.

 Procurement risks (e.g., supply shortages due to rapidchanges in international conditions and increasing procurement
prices) Economic trends