KAGA ELECTRONICSCO., LTD.

For Institutional Investors/Analystssts

Consolidated Financial Results
for the First Quarter of theFiscal Year ending March 2021
KAGA
ELECTRONICS CO., LTD.
加賀電子株式会社
August 6, 2020

TSE 1st section 8154

Summary of Financial Results
for the First Quarter Ended June 30, 2020
FY2021/ 1QResults Decrease in net sales due notably to impact of COVID-19 pandemic andtermination of Fujitsu Electronics’ sales agency agreement with Cypress.
 Decreases in both operating income and ordinary income despite efforts toenhance operational efficiency and curb SG&A.
 Increase in profit reflecting “gain on bargain purchase” associatedwith acquisition of EXCEL, recognized as extraordinary income.

Overview ofthe mainsegments

・ In EMS business, steady performance of medical equipment
business. Automotive and air-conditioning devices facing
sluggish sales due to suspension of operations at someElectronic
overseas plants and customers’ production adjustments due
Components to COVID-19.
・ Decline of sales in component sales business due in part totermination of sales agency agreement with Cypress.
・ Strong sales of PCs driven by expansion of remote working
Information and online learning.
Equipment ・ Housing-related home electric appliances businessremaining sluggish.

Forecast for
FY2021/3

 Growth of IT-related demand expected, led by PCs and tablets. However,net sales, operating income and ordinary income all likely to fall below
the previous year’s levels due to consumption decline and customers’
production cutbacks caused by COVID-19, combined with dissolution oflarge commercial rights and other causes.
 Projected profit increase due to recognition of “gain on bargain purchase”
associated with acquisition of EXCEL.
 With annual dividend of 60 yen per share, payment of regular dividend
planned at same amount as in previous fiscal year, or 30 yen for bothinterim and year-end dividends.

1Financial Highlights(million yen)

FY2020/3
1Q Results

FY2021/3
1Q Results

YoY

84,130-23.2%Net Sales

109,564

Gross Profit

11,062

10.1%

9,997

11.9%

-9.6%

SG&A

9,212

8.4%

8,341

9.9%

-9.4%

Operating income

1,850

1.7%

1,656

2.0%

-10.5%

Ordinary income

2,045

1.9%

1,533

1.8%

-25.0%

Profit attibutable toowners of parent

1,350

1.2%

8,643

10.3%

540.0%EPS（yen）

49.20

314.77109.90107.62

Exchange Rate

USD

-2.28

2

Financial Results by Business Segment for FY2021/3 1Q（million yen）

FY2020/3

FY2021/3

1Q Results

1Q Results

YoY

Net sales
Electronic
Component Segment income

94,587

68,196-27.9%

Information Net sales
Equipment Segment income

10,126

Software

Others

Total

1,621
188

Net sales

437

Segment income-61

Net sales
Segment income
Net sales
Segment income

1.7%

1.9%

583

-14.2%

-44

4.7%

-101

-9.1%

1,656

ー
-34.2%-3.5%

84,1301.7%

208.8%
12.4%

2,904
1.6%

-26.9%
23.8%

491

109,564
1,850

1.7%

12,537

4,412
72

1,185

ー
-23.2%

2.0%-10.5%

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

3

Financial Highlights by Business Segment①（Net Sales）（million yen）

Net
売上高
Sales
109,564
4,412
437
10,126

121,066
5,097
895
9,842

108,170
4,185
455
9,820

Total
YoY
QoQ

104,813
6,085
990
13,677

84,1302,904
49112,537： -25,434： -20,683

Other
YoY ：

-1,508QoQ ：-3,181

Software
YoY ：
QoQ ：

94,587105,230

93,708

Information equipment
YoY ：
QoQ ：

84,06068,196FY2020/3
2Q Results

FY2020/3
3Q Results

FY2020/3
4Q Results＋2,411-1,139

Electronic equipment
YoY ：
QoQ ：

FY2020/3
1Q Results＋54-498-26,391-15,864

FY2021/3
1Q Results

4

Financial Highlights by Business Segment②（Segment Income）（nullion yen）

Segment Income

Total
YoY
QoQ

3,389
186
108429

1,850

105

2,282

23687

1882,6171,656853583

2,180
1,084

FY2020/3
1Q Results-37
FY2020/32Q Results

YoY
QoQ

226

1,621-61

FY2020/3
3Q Results-194-626

Information equipment

2,492

72：
：

FY2020/3
4Q Results＋394-270

Electronic equipment
YoY
QoQ

：
：

YoY
QoQ

：
：

-435+101

Software1,185-44-101：：＋17-271

Other
YoY
QoQ

：
：

-174-189

FY2021/3
1Q Results

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

5Effect of M&A (FY2021/3 1Q Results)※million yen. . FY2021/3 1Q results of EXCEL do not include results of group companies whose accounting period ends in December.

Net Sales

Gross profit / Gross profit margin

Sales decline at Kaga Electronics due to COVID-19.
Fujitsu Electronics records heavy drop in sales due to lossof large commercial rights. EXCEL consolidated from 1Q.

Both Kaga Electronics and Fujitsu Electronics see
improvement in gross profit margin despite decline
in income.
-364
11,062

109,564-5,177-22,720＋2,464-921

84,130
13.6%

14.2%

6.3%
2020/3
KagaFujitsu1Q Results Electronics Electronics

Excel

2021/3 1Q Results

2021/3
1Q Results

SG&A / SG&A ratio

10.7%
5.8%

+403

8,341

2020/3
KagaFujitsu
1Q Results Electronics Electronics

16.4%

2020/3
KagaFujitsu
1Q Results Electronics Electronics

Excel

2021/3 1Q Results

9.3%
Excel

2021/3 1Q Results

11.9%

2021/3
1Q Results

Kaga Electronics secures income growth evenin the face of COVID-19 pandemic, withimprovement in income margin.
-247
+254
1,850
198
1,656
2.8%

10.7%
8.0%

8.0%

9,997

Operating income / Operating income marjin

At Fujitsu Electronics, impact of sales decline sosignificant that SG&A ratio rises sharply despite
efforts to curb expenses.
-594
9,212-679

+230

9.9%
2021/3
1Q Results

3.6%
2.0%

0.4%
2020/3
KagaFujitsu
1Q Results Electronics Electronics

Excel

2021/3 1Q Results

2021/3
1Q Results

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 -3million yen, and operating income came to 2 million yen.

6

FY2021/3 1Q results by company(million yen )KagaElectronics

FujitsuElectronics

Excel

Total

2020/32021/3

1Q Results

1Q Results

YoY

52,493

Net sales

57,671Gross Profit

7,806

13.5%

7,442

14.2%

-4.7%

operating income

1,616

2.8%

1,870

3.6%

15.7%

-9.0%

29,172

Net sales

51,892Gross Profit

3,250

6.3%

2,328

8.0%

-28.3%

228

0.4%

-18

-0.1%

ー

Net sales

ーー

2,464

Gross Profitーー

230

9.3%

ー

operating income

ーー

-198

-8.0%

－operating income-43.8%

ー

84,130Net sales

109,564

Gross Profit

11,062

10.1%

9,997

11.9%

-9.6%

1,850

1.7%

1,656

2.0%

-10.5%

operating income-23.2%(note) 1.With respect to gross profit and operating income, figures presented above are before consolidation adjustments

between the three companies.
2. FY2021/3 1Q results of EXCEL do not include results of group companies whose accounting period ends in December.

7

Financial Highlights: Electronic Component Segment（million yen）

YNet sales/Segment income//
100 000

94,587

YoY Net Sales-26,391million Yen 27.9％Down
Net Sales
Segment…  Segment income -435million Yen 26.9％Down
500 0450 084,060

400 0800 00

350 068,196
300 0600 00

250 0

200 0400 00

1,621
1,084

1,185

150 0

EMS business for medical equipment shows
steady performance, while that for
automotive and air-conditioning devices
records sales decline due to suspension ofoperation at some of the Company’s plants,
customers’ production adjustments and otherimpacts of COVID-19 pandemic.
Components sales business sees decline insales due to termination of Fujitsu Electronics’sales agency agreement with Cypress anddecrease in customer demand caused by
COVID-19 pandemic.

QoQ-15,864million Yen18.9％Down
9.3％UP Segment income +101million Yen
 Net Sales
100 0200 00

50000

FY2020/3
1Q Results

FY2020/3
4Q Results

FY2021/3
1Q Results8

Financial Highlights: Information Equipment Segment（million yen）

Net sales/Segment income//13,677

140 00YoY Net Sales+2,411million yen
Net Sales
Segment income  Segment income +394million yen
300 012,537

208.8％Up

250 0120 00

10,126200 0100 00

150 0800 0853600 023.8％Up

100 0

Sales decline in housing-related homeelectric appliances business.
QoQ-1,139million yen 8.3％Down
 Segment income -270million yen 31.7％Down
 Net Sales

583
500

400 0188
200 0PCs and PC peripherals enjoy strong
sales driven by expansion of remote
working and online learning.

0FY2020/3
1Q Results

FY2020/3
4Q Results

FY2021/3
1Q Results

9Net Sales by Region（million Yen）

Ney Sales
109,564

YoY
 Japan-8,509million Yen 13.8％Down

 Asia-13,028 million Yen 37.8％Down

2.8％Up North America ＋ 202 million Yen-4,099 million Yen 68.4％Down
 Europe

104,81384,13061,843［56.4%］
69,610 [66.4%]
53,334 [63.4%]

Japan

7,216 ［6.6%］
5,993 ［5.5%］

34,510［31.5%］

FY2020/3
1Q Results

North America

7,077 [6.8%]
3,468 [3.3%]

7,419
1,894

[8.8%][2.3%]

24,657 [23.5%] 21,482 [25.5%]

FY2020/3
4Q Results

EuropeQoQ
 Japan-16,276 million Yen 23.4％Down

 North America ＋ 341 million Yen 4.8％Up-1,573 million Yen 45.4％Down
 Europe-3,174 million Yen 12.9％Down Asia

Asia

FY2021/3
1Q Results

10Balance Sheet Main Items(Million Yen)

Total assets
213,761

207,638

Total liabilities and net assets

214,097

213,761

207,638

214,097

Total liabilities
Current assets

182,396

174,331

129,501

121,388

119,753

178,165

31,36433,30635,932

2019/32020/32020/6

84,25986,2502019/32020/3

94,344

Total net assets

Non-current assets

2020/6

11

Balance Sheet Main Items（million Yen,day）（million Yen）

Inventories

Accounts receivable/Accounts payable(Excluding EXCEL)

50.0

40.7

50. 029.4

60, 000

160 ,000（Day）

Inventory turnover

77.0

83.5

(Excluding EXCEL)
90. 0

A/R turnover

75.2

140 ,000

70. 0

120 ,000

50, 000

40,026

63.3

64.6

70.5

101,507

0.0

39,489100 ,000

50. 0

91,37140, 000

31,908A/P turnover

30. 0

80, 000

77,884-50.0

70,188 74,918

Notes and A/R

30, 000

10. 0

55,66260, 000

Inventories

20, 000-10.0

40, 000

Notes and A/P-100.010, 000-30.0

20, 000

0-150.0-50.002019/32020/32020/6

note：Inventory turnover ＝ Inventories ÷ Cost of Sales × 91（day）

2019/32020/3

2020/6

notes：・Notes and A/R are amounts including Electronically recordedmonetary claims-operating
・A/R turnover ＝ Notes and A/R ÷ Net sales × 91（day）
・A/P turnover ＝ Notes and A/P ÷ Cost of sales × 91（day）

12

Balance Sheet Main Items（million yen）

Cash and Deposits/Interest Bearing Debt
0.43
60, 000-0.03
50, 000

0.37

0.43（times）
0.5 0

D/E ratio

0.01
-0.19

0.0 0Net D/E ratio-0.50

40, 000-1.00

Cash and deposits

30, 000-1.50

43,38420, 000

35,00332,851
10, 000

37,22336,404-2.00

Interest bearing debts

28,736-2.50

0-3.002019/32020/32020/6

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

13Forecast for the Fiscal Year ending March（単位：百万円）

FY2020/3
Results

FY2021/3
Initial forecast

FY2021/3
Current forecast

Changes(Announced May 21, 2020)

Net sales

443,615ー

400,000-9.8%

Operating income

10,014

2.3%

ー

5,000

1.3%

-50.1%

Ordinary income

10,137

2.3%

ー

4,500

1.1%

-55.6%

5,852

1.3%ー

10,000

2.5%

70.9%

213.21

ー

364.18

ー

7.6－

11.8

+4.2ptProfit attributable toowners of parentEPS（Yen）
ROE

14

Breakdown of earnings forecasts for FY2021/3（million yen）

FY2020/3

FY2021/3

240,000
243,031
 Kaga Electronics
160,000
 Fujitsu Electronics
200,584* Decrease due to changes in commercial rights： About -60,000
Net Sales

Operating
Income ExcelBeforeCOVID-19
50,000 Pandemic(Reference: 53,373)

Simple Total
443,615450,000
 Risk of sales decrease due to the spread ofAbout -50,000
COVID-19：
with COVID-19
400,000
 Kaga Electronics
 Fujitsu Electronics
 Excel

7,927
2,086

7,500
1,000
BeforeB/E COVID-19(Reference: -695)

Simple Total

10,014
 Lost gross profit due to lower sales -5,000+ Profit recovery＋1,500：

8,500
About -3,500

with COVID-19
Profitattributableto owners ofparent

 Extraordinary income
 Extraordinary loss Income Taxes

Gains on negative goodwill・・・
Restructuring costs, others ・・・
with COVID-19

Pandemic

5,000
8,000-1,000-1,500
10,00015

Exchange Rate/FOREX Sensitivity（Reference）

Effect of 1% change（million yen）
Ordinary
incomeForex
Assumption
for2021/3(yen)20011108.00

3.37

101

3.50

16.33

15.60

44

1

15.50

14.02

13.89

32

0

14.00

FY2020/3
1Q Results

FY2021/3
1Q Results

Net Sales

USD

109.90107.62

THB

3.48

RMB

HKD

（yen）

（yen）

16

Reference

Segment disclosure associated with the start of theMedium-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-TermManagement Plan

Current segments

Segments in Medium-Term Management Plan

Legal financial accounting

Management Accounting

Components sales businessElectroniccomponents

 Sales of semiconductors
 Sales of general electroniccomponents
 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

Electroniccomponents

 Sales of semiconductors
 Sales of general electroniccomponents
 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

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

Business segments of Parent company andGroup companies

KAGA ELECTRONICS CO., LTD.

ElectronicComponents

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.
FUJITSU ELECTRONICS INC.
KAGA EMS TOWADA CO., LTD.
EXCEL 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

●●●
●

(●)

●

●
(●)

(●)
●

(●)
●

(●)
●
●

(●)
●

●

(●)

●
●
●
●

●
●

●
●
●●(●)
●
●
●
●
(●)
●
●
●

(●)

18

Reference

Financial Highlights by Business Segment ofthe Medium-Term Management Plan（million yen）

Net sales
ElectronicComponens
Segment income
EMS

CSIOthers

Total

Net sales
Segment income
Net sales
Segment income

FY2020/3

FY2021/3

1Q Results

1Q Results

1,269
188

Segment income

-114

5.2%

0.1%

1,083

1.9%

583

5.5%

-89

4.7%

1,656

208.8%-27.8%-4.4%

84,1301.7%-14.7%
23.8%

2,031
-4.1%

-90.6%-19.2%

12,537

109,5641,850

44-31.0%

19,82010,1262,812

Segment income

0.7%

24,520Net sales

Net sales

49,74072,105475

YoYー-23.2%

2.0%-10.5%

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

19

＜ｍemo＞

20

＜ｍemo＞

21

“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.