KAGA ELECTRONICS
CO., LTD.

For Institutional Investors/Analystss

Financial Results Briefing Material
for the Fiscal Year ended March 2022

加賀電⼦株式会社

KAGA ELECTRONICS CO., LTD.
TSE Prime Market 8154

May 26, 2022

INDEX FY2022/3 Financial Results

P-3〜

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

 Management Topics

P-29〜

Response to the Spread of Novel
Coronavirus Infection/
Review of the Previous Medium-termManagement Plan/
Outline, Management policies,
Management Targets of new medium-term
management plan/
Medium- to long-term sustainability targets/
Shareholder Return/ Reference

P-42〜

Consolidated Financial Results
for the Fiscal Year ended March 2022

Director,
Managing Executive Officer

Eiji Kawamura

Summary

Results for
FY2022/3

FY2023/3
earnings
forecasts

Net sales: Driven by the core electronic components business, robust demand continued
as production activities recovered in manufacturing industries both in Japan and overseas. Net
sales grew significantly, achieving a record high for the first time in two years.



Operating income: Increased significantly as a result of increased gross profit due to higher
sales and an improved profit margin, as well as continued efforts toward workstyle reforms andcost reductions amid the COVID-19 pandemic, achieving a record high for the third
consecutive fiscal year.



Net income: Despite the absence of the 7.96 billion yen “gain on bargain purchase” posted
as extraordinary income in the previous fiscal year, net income increased significantly
thanks to expanded revenue in core businesses, achieving a record high for the second
consecutive fiscal year.

Economic situation: The business outlook remains cloudy both in Japan and overseas
due to factors such as the renewed spread of COVID-19 due to variant strains, the future
situation in Ukraine, and rising prices of crude oil and other resources.
Industry trends: Although the supply of semiconductors and electronic parts remains tight for
the foreseeable future, demand for automobiles, communication equipment, and home
appliances is expected to continue to grow.
Companyʼs outlook: Maintain the momentum of growth in net sales and operating
income by focusing on expanding revenue in key areas such as the automotive, industrial
equipment, and medical fields.







Shareholder
Return

FY2022/3: The year-end dividend was revised upward to 75 yen per share due to theaddition of a 10-yen “extraordinary dividend” to the previous forecast of 65 yen (40 yen in
ordinary dividends + 25-yen extraordinary dividend).
*The full-year dividend is 120 yen per share, a 40-yen increase from the previous fiscal
year.
FY2023/3: Ordinary dividends were increased by 20 yen to 140 yen per share (70 yen forboth the interim and year-end dividends). In addition, a 10-yen “55th anniversarycommemorative dividend” will be paid as a year-end dividend. Accordingly, the full-year
dividend is planned to be 150 yen per share, an increase of 30 yen.

3

Financial Highlights for FY2022/3（million yen）

FY2021/3
Results

FY2022/3
Results

FY2022/3
Previous Forecasts

YoY

vsForecasts(announced on Feb. 3, 2022)

422,365

495,82717.4%

475,000

4.4%

Gross profit

47,936 11.3%

60,547 12.2%

26.3%

ー

ー

SG&A

36,469

8.6%

39,632

8.0%

8.7%

ー

ー

Operating income

11,467

2.7%

20,915

4.2%

82.4%

17,500

3.7%

19.5%

Ordinary income

11,241

2.7%

21,456

4.3%

90.9%

18,000

3.8%

19.2%

Profit attributable toowners of parent

11,3992.7%

15,401

3.1%

35.1%

12,000

2.5%

28.4%

EPS（Yen）

415.07576.46ーー

449.13ーーNet sales

4Financial Results by Business Segment for FY2022/3（million yen）

FY2021/3

FY2022/3

Results

Results

FY2022/3

YoY

Previous Forecasts

vsForecasts(announced on Feb. 3, 2022)

Net sales
Electronin
Component 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

433,852
2.3%

5.1%

9.0%

5.3%

-26

-1.0%

19,5902.7%

422,365
11,467

2,085
2,767

17,589474

4.2%

39,616

2,932
263

18,107626

3.2%

495,827
2.7%

20,915

4.2%

22.7%

414,000

122.1%

14,800-18.1%

40,000-16.0%

2,000

-5.6%

3,000

ー

200

11.4%

18,000

32.0%

500

17.4%

475,000

82.4%

17,500

4.8%
3.6%

22.4%
-1.0%

5.0%

4.3%
-7.8%

6.7%

ー
8.8%

2.8%

25.2%
4.4%

3.7%

19.5%

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

5Financial Results by Company for FY2022/3（million yen）

FY2021/3

FY2022/3

Results

Results

FY2022/3

YoY

Previous Forecasts

vsForecasts(announced on Feb. 3, 2022)

Kaga
Electronics

Net sales
Gross Profit
Operating income
Net sales

Kaga FEI

Gross Profit
Operating income
Net sales

Excel

Gross Profit
Operating income
Net sales

Total

Gross Profit
Operating income

243,897
281,075
35,273 14.5% 41,767 14.9%
11,083 4.5% 15,461 5.5%
131,932
149,455
10,307 7.8% 14,690 9.8%
362 0.3%
3,654 2.4%
46,53565,2965.1%
2,365
4,247 6.5%
0.0%
61,937 3.0%
422,365
495,827
47,936 11.3% 60,547 12.2%
11,467 2.7% 20,915 4.2%

15.2%
18.4%
39.5%
13.3%
42.5%
907.2%
40.3%
79.5%
ー
17.4%
26.3%
82.4%

265,000
38,300 14.5%
13,000 4.9%
145,000
13,500 9.3%
2,600 1.8%
65,0004,200 6.5%
1,900 2.9%475,000
56,000 11.8%
17,500 3.7%

6.1%
9.1%
18.9%
3.1%
8.8%
40.5%
0.5%
1.1%
2.0%
4.4%
8.1%
19.5%

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

6Effect of M&A for FY2022/3（million yen）

＊ EXCEL's actual results for FY2021/3 do not include results of overseas subsidiariesʼ FY2021/Jan-Mar period.

Net Sales

Gross profit / Gross profit margin

There was a significant increase in net sales in all threecompanies, driven by the electronic components business.

422,365+37,177+17,523+18,760

Profit grew for all three companies thanks to improved profit
margins and increased gross profit in line with higher sales.

495,827+73,462+6,49447,936+4,382+1,88160,547+12,610

14.9%
14.5%
7.8%
5.1%
FY2021/3
ResultKaga
Electronics

KagaFEI

Excel

FY2022/3

FY2022/3
ResultSG&A / SG&A ratio+2,26036,469
9.5%
10.0%
8.6%
7.5%

Kaga
Electronics

Kaga
Electronics+3,162

7.2%

8.0%
3.3%

KagaFEI

Excel

12.2%

6.5%

KagaFEI

Excel

FY2022/3

FY2022/3
ResultHigher expenses were absorbed by the increase in grossprofit, maintaining increased income. Operating income
margins also increased significantly.
20,915+1,930+9,448+3,291+4,378

11,4674.8%
FY2021/3
Result39,632-54

FY2021/3
Result9.8%

Operating income / Operating income marjin

Although expenses increased with growth in sales, SG&A
ratios fell.

+956

11.3%

FY2022/3
Result

5.5%

4.5%

2.4%

3.0%

KagaFEI

Excel

4.2%

2.7%

0.3%
0.0%
FY2021/3
ResultKaga
Electronics

FY2022/3
ResultFY2022/3
FY2022/3(note) With respect to gross profit and operating income, figures presented above are before

7
consolidation adjustments between the two companies. For reference, after consolidation
adjustments, gross profit stood at -157million yen, and operating income came to -137 million yen.

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

Net sales/Segment income//

500000Net sales
Segment income

433,852

450000

YoY

50000

400000353,45440000

35000030000030000

・Strong sales continued in the components sales businessthroughout the period as a result of previously capturing
demand from customers in a wide range of industries.
・Despite supply shortages of some parts, the Company
utilized the strengths of its procurement network as anindependent trading company to maintain widespread sales
quantities, which also boosted performance.
・Steady progress in PMI at acquired companies including
Kaga FEI and EXCEL contributed to profit growth.

25000020000018,10720000

150000100000＋80,398million Yen 22.7％Up＋9,956million Yen 122.1％Up
 Segment Income
 Net sales

8,151

10000

・Sales in the EMS business were solid, especially of
automotive/medical products and industrial equipment.
・Despite prolonged lockdowns to combat the renewed
spread of COVID-19 and part shortages, efforts weremade to minimize their impact by implementing thoroughprocess control under close cooperation with customers.

50000

0

0

FY2021/3
Results

FY2022/3
Results

8

Financial Highlights: Information Equipment（Million Yen)

Net sales/Segment income
/
/

55000

50000

YoY

Net sales Net sales
Segment income
8000 Segment Income

48,389-8,772million Yen 18.1％Down-396million Yen 16.0％Down

7000

45000

6000

39,616
40000

・Although sales of PCs to educational institutions and PC
peripherals such as security software were robust, sales of PCs tocorporations were subdued as a result of the abatement of
remote working and product supply difficulties.

5000

35000

4000

30000

25000

2,482

・The LED installation business struggled due to extensionsof construction periods caused by difficulty procuring
materials/equipment and delivery delays.

3000

2,085
2000

20000

1000

15000

10000

0

FY2021/3
Results

FY2022/3
Results9

Financial Highlights for FY2022/3（million yen）

FY2021/3
Results

FY2022/3
Results

FY2022/3
Previous Forecasts

YoY

vsForecasts(announced on Feb. 3, 2022)

422,365

495,82717.4%

475,000

4.4%

Gross profit

47,936 11.3%

60,547 12.2%

26.3%

ー

ー

SG&A

36,469

8.6%

39,632

8.0%

8.7%

ー

ー

Operating income

11,467

2.7%

20,915

4.2%

82.4%

17,500

3.7%

19.5%

Ordinary income

11,241

2.7%

21,456

4.3%

90.9%

18,000

3.8%

19.2%

Profit attributable toowners of parent

11,3992.7%

15,401

3.1%

35.1%

12,000

2.5%

28.4%

EPS（Yen）

415.07576.46ーー

449.13ーーNet sales

10Financial Results by Business Segment for FY2022/3（million yen）

FY2021/3

FY2022/3

Results

Results

FY2022/3

YoY

Previous Forecasts

vsForecasts(announced on Feb. 3, 2022)

Net sales
Electronin
Component 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

433,852
2.3%

5.1%

9.0%

5.3%

-26

-1.0%

19,5902.7%

422,365
11,467

2,085
2,767

17,589474

4.2%

39,616

2,932
263

18,107626

3.2%

495,827
2.7%

20,915

4.2%

22.7%

414,000

122.1%

14,800-18.1%

40,000-16.0%

2,000

-5.6%

3,000

ー

200

11.4%

18,000

32.0%

500

17.4%

475,000

82.4%

17,500

4.8%
3.6%

22.4%
-1.0%

5.0%

4.3%
-7.8%

6.7%

ー
8.8%

2.8%

25.2%
4.4%

3.7%

19.5%

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

11

Financial Results by Company for FY2022/3（million yen）

FY2021/3

FY2022/3

Results

Results

FY2022/3

YoY

Previous Forecasts

vsForecasts(announced on Feb. 3, 2022)

Kaga
Electronics

Net sales
Gross Profit
Operating income
Net sales

Kaga FEI

Gross Profit
Operating income
Net sales

Excel

Gross Profit
Operating income
Net sales

Total

Gross Profit
Operating income

243,897
281,075
35,273 14.5% 41,767 14.9%
11,083 4.5% 15,461 5.5%
131,932
149,455
10,307 7.8% 14,690 9.8%
362 0.3%
3,654 2.4%
46,53565,2965.1%
2,365
4,247 6.5%
0.0%
61,937 3.0%
422,365
495,827
47,936 11.3% 60,547 12.2%
11,467 2.7% 20,915 4.2%

15.2%
18.4%
39.5%
13.3%
42.5%
907.2%
40.3%
79.5%
ー
17.4%
26.3%
82.4%

265,000
38,300 14.5%
13,000 4.9%
145,000
13,500 9.3%
2,600 1.8%
65,0004,200 6.5%
1,900 2.9%475,000
56,000 11.8%
17,500 3.7%

6.1%
9.1%
18.9%
3.1%
8.8%
40.5%
0.5%
1.1%
2.0%
4.4%
8.1%
19.5%

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

12Reference

Effect of M&As (3months)（million yen）

Net Sales

Gross profit / Gross profit margin

There was a significant increase in net sales in all threecompanies, driven by the electronic components business.

128,099+9,630+3,826+1,586

143,143+15,043

Profit grew for all three companies thanks to improved profit
margins and increased gross profit in line with higher sales.

14,289+1,589

14.5%

14.7%

7.8%
4.5%
FY2021/3
4QResult

Kaga
Electronics

KagaFEI

Excel

FY2022/3
4QResult

11.2%

FY2021/3
4QResult

Kaga
Electronics

FY2022/3

KagaFEIFY2022/3

Excel

12.4%

7.3%

KagaFEI

Excel

FY2022/3
4QResult

Operating income / Operating income margin

Expenses increased with growth in sales,in addition to seasonal factors such as bonus reserves
in 4Q.
11,529+27+614+1,189+546
10,339
9.5%
10.0%
7.2%
8.1%
8.1%
6.3%
3.4%
3.5%
Kaga
Electronics

10.2%+3,496FY2022/3

SG&A / SG&A ratio

FY2021/3
4QResult

17,786+559+1,355

FY2022/3
4QResult

Higher expenses were absorbed by the increasein gross profit. Income increased significantly for all threecompanies.
6,257
+534
+2,307+728+1,055

3,950

5.3%

4.6%
3.1%

1.3%
0.8%
FY2021/3
4QResult

Kaga
Electronics

2.9%

3.7%

KagaFEI

Excel

4.4%

FY2022/3
4QResult

FY2022/3(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 -5 million yen, and operating income came to -0 million yen.

13

Reference

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

Net sales/Segment income//

140000117,005

120000YoY

Net Sales
Segment Income

14000

122,440

 Net sales
 Segment
Income＋15,690million Yen 14.7％Up＋2,372million Yen 86.8％Up

12000

106,750

QoQ

100000

10000

80000

8000

5,878
5,105

60000

40000

 Net sales
 Segment
Income＋5,435million Yen 4.6％Up-772million Yen 13.1％Down

6000

4000

2,732
20000

2000

0

0

FY2021/3
4QResults

FY2022/3
3QResults

FY2022/3
4QResults

14

Reference

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

Net sales/Segment income
/
/

18000

YoY

Net Sales
Segment Income

4000

16000

3500

14,451
13,315

14000

3000

12000

2500

10000

2000

7,587

8000

 Net sales
 Segment
Income-1,135million Yen 7.9％Down＋140million Yen 19.2％Up

QoQ
 Net sales
 Segment
Income＋5,728million Yen 75.5％Up＋563million Yen 184.2％Up

1500

6000

4000

869

728
305

2000

1000

500

0

0

FY2021/3
4QResults

FY2022/3
3QResults

FY2022/3
4QResults

15

Reference

Changes from Previous forecast（announced on February 3, 2022)（million yen）

Operating income

Net sales< by Business Segment >+19,852

-383

-232

+1,590495,827+20,827

17,500+3,307

+85

-226

+126

Software

Others

20,915+3,415475,000

FY2022/3 Electronic Information
Forecast components equipment

Software

Others

FY2022/3
ResultFY2022/3 Electronic Information
Forecast components equipment

FY2022/3
ResultNote: Figures of each segment income are not inter-segment adjusted. Total amount is inter-segment
adjusted (operating income).

<by company>+4,455+296+16,075

495,827+20,827

17,500+2,461+1,054+37

Kaga
Electronics

Kaga FEI

Excel

20,915+3,415475,000

FY2022/3
Forecast

Kaga
Electronics

Kaga FEIFY2022/3

Excel

FY2022/3
ResultFY2022/3
Forecast

FY2022/3

FY2022/3
ResultNote︓With respect to gross profit and operating income, figures presented above are before consolidation.
adjustments between the three companies.

16Reference

Segment disclosure associatedwith 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

Software

Others Sales of PCs and PC
peripherals
 Sales of home electric
appliances and lighting fixtures
 Sales of photograph andimaging products
 Production of CG video andsoftware 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

 Production of CG video andsoftware

Others Sales of amusement equipment
 Repair and support for electronics
equipment
 Sales of sports goods
17Reference

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

FY2021/3

FY2022/3

Results

Previous Forecasts(*)

FY2022/3
Results

YoY

vsForecasts(announced on Feb. 3, 2022)
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

262,318
2,961

313,000
1.1%

99,599
5,539

5.6%

5.1%

5.8%

2,000

3.2%

400

5.0%

17,500

7,356

6.2%

2,085

5.3%

12,5523.3%

475,000
2.7%

3.4%

39,616

12,000422,365
11,467

6,400

11,094
117,828

40,00012,057387

2.8%

110,000

48,389
2,482

8,700

325,830255

2.0%

495,827
3.7%

20,9154.2%+24.2%+4.1%+274.6%+27.5%+18.3%+7.1%+32.8%+14.9%-18.1%-1.0%-16.0%

+4.3%

+4.1%

+4.6%

-34.0%-36.0%+17.4%+4.4%+82.4%+19.5%

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

18Reference

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

Net sales
Electronic
Componens
Segment income
EMS

CSI

OthersTotal

FY2021/3

FY2022/3

FY2022/3

4QResults

3QResults

4QResults

80,405
1,304

88,0791.6%

29,383

Net sales
Segment income

1,649

Segment income

728

5.6%

Segment income

261

5.0%

Segment income

3,950

6.9%

305

6.8%

64

4.0%

6,357

1,893

5.7%

869

6.5%

3,634
2.3%

129,675
3.1%

3.6%

13,315

2,865

128,099

Net sales

2,140

3,321
33,232

7,587

3,858

Net sales

4.3%

31,142

14,451

Net sales

3,824

92,960126

3.5%

143,143
4.9%

6,257

4.4%

YoY

vs
Forecasts+15.6%+5.5%+154.6%-13.1%+13.1%+6.7%+14.8%-11.6%-7.9%+75.5%+19.2%+184.2%-5.8%+26.8%-51.5%+95.1%+11.7%+10.4%+58.4%-1.6%

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

19Balance Sheet Main Items（million yen）

Total assets

Total liabilities and net assets

272,139

272,139+35,135+35,135

237,004

237,004
207,638

207,638
166,339

Total liabilities+24,397

233,984+33,805

141,942

Current assets

121,388

200,179
174,331

33,30636,825

FY2020/3

FY2021/3

38,15586,25095,062

FY2020/3

FY2021/3

105,800

Total net assets+10,737

Non-current assets+1,329FY2022/3

FY2022/3

20

Balance Sheet Main Items（million yen,day）

Inventories

Accounts receivable/Accounts payable
93.7

100,000
180,000

46.1

90.0

Inventory turnover

90,00026.3

160,000

79.8

32.8

70.0

68.6

140,000
30.0

64.6

62,607

A/P turnover

120,948+12,553+24,658

70,000A/R turnover

75.2

50.0

80,00089.0

50.0

120,000

108,394

10.0

Notes and A/R

60,000100,000

91,37150,00079,85486,49330.0+6,639‐10.0

37,94840,00080,00070,18810.0

31,908‐30.0
30,000Inventories

Notes and A/P

60,000‐10.0

40,00020,000

‐50.0

‐30.0

20,00010,000

‐70.0

0

‐50.0

0

2020/3末

2021/3末

2022/3末

FY2020/3

FY2021/3

FY2022/3

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

21

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

Cash and deposits /Interest bearing debts
0.37

0.42

Cash flows（times）

0.48
0.50

D/E ratio
70,000

-0.19

-0.08

0.10
0.00

Net D/E ratio

60,00051,171+12,910‐0.50

50,00043,38445,63638,26140,000Interest bearing debts

41,051-4,58522,406

Cash flows fromfinancing activities

‐1.00

9,999
30,0001,155

28,736‐1.50

Cash and deposits-3,651-2,453-1,554-6,772‐2.00

20,000-6,851-7,544

Cash flows fromoperating activities

Cash flows frominvesting activities‐2.50
10,0002020/3末0‐3.00

FY2020/3

FY2021/3

2022/3

FY2020/3

202/3末FY2021/3

2022/3末

FY2022/3

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

22

Major Business Indicators（million yen）

Equity ratio
350,000

300,000

ROE
0.400

37.7%

38.4%

13.5%

38.8%

272,139+35,135

15.7%

7.6%
0.350

237,004

250,000

207,6380.300

200,000

Total assets

1.3

2.7

3.1
Net profit margin

150,000

0.250

2.7

105,680
100,000

78,28490,967

2.6

2.6

Financial leverage

2.1

1.9

1.9

Total asset turnoverFY2020/3

FY2021/3

FY2022/3+14,713

0.200

Shareholdersʼ equity
50,0000

0.150

FY2020/3

FY2021/3

FY2022/323

Forecasts for FY2023/3

Forecasts for FY2023/3（million yen）

FY2022/3
Results
Net sales

FY2023/3
Forecasts

495,827

YoY

510,000

2.9%

Operating income

20,915

4.2%

21,2004.2%

1.4%

Ordinary income

21,456

4.3%

21,200

4.2%

-1.2%

Profit attributable toowners of parent

15,401

3.1%

14,500

2.8%

-5.9%

EPS（Yen）

576.45552.42

ROE

15.7%

13.0%

-

25

FY2022/3 vs FY2023/3 Factors of Increase/Decreasein Operating Income

Personnel costs
Packing/shipping+2,320+863（million yen）

+4,753+4,100-3,163

20,915+8,511
Spot sales-3,100-1,368Spot sales
Sales volumes

SG&A

21,200

SG&A

11,467
Sales volumes

Income increase: 9,448

2021/3Results

Income increase: 285

2022/3Results

2023/3
Forecasts
26

Forecasts for FY2023/3 by Segment（million yen）

FY2022/3

FY2023/3

Results

Forecasts

Net sales
Electronic
components Segment income

433,852

Information Net sales
equipment Segment income

39,616

Software

OthersTotal

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

18,1072,085

447,000
4.2%

5.3%

0.1%

2,000
100

3.2%

600

5.1%

21,200

-4.1%
44.5%

2.5%

ー
2.1%

3.0%

510,000
4.2%

2.2%
-1.6%

20,000495,827

20,915

4.1%

4,000

19,590626

18,5003.0%

39,000

2,767
-26

YoY

-4.2%
2.9%

4.2%

1.4%

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

27

Management Topics

Representative Director,
President & COO

Ryoichi Kado

Response to the Spread of Novel Coronavirus Infection︓
Sales bases in Japan
Office attendance rate and number of infections
FY2022/3 H1

FY2022/3 H2

FY2022/3 H1 plan

Number of
COVID-19 cases（FY2022/3）

KagaElectronics

41.5％

45.8％

40％

47

Group
companies

47.3％

51.6％

(Different foreach company)

104

Group overall

44.4%

48.7%

―

151

Infection prevention measures
Do not bring the virus towork or spread it

Thermometers
were set up

Partitions within offices

Thorough antiviral and antibacterial
measures were taken

Antiviral coating wasappliedPhotocatalytic sterilizing
deodorizers were set up

29Response to the Spread of Novel Coronavirus Infection︓
Overseas Production Bases
Status of factory operation and number of infections
︓Operationsuspension
periodFY2022/3 H1

FY2022/3 H2

China

FY2022/3 H1
3/14〜20:Shenzhen

Thai
Indonesia
Malaysia

7/15〜26

Vietnam

7/22〜9/27

India
Czech
TurkeyNumber of
COVID-19 cases（FY2022/3）
China

0

Asia

113

Europe2

America18

MexicoInfection prevention measures
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

Partitions in thefactory cafeteria

30

Review of the Previous Medium-term Management Plan:
Results of management policiess
Basic policy

Enhancement of
Revenue BasePriority themes▶ Focus on markets andareas in which high growthand profitability are expected

Main results〇 Revenue increase effect throughacquisition of companies︓about ¥215 bn〇 Growth of EMS business︓about ¥28 bn〇 KAGA FEI: Gross profit margin

Stabilization ofManagement
Base▶ Swift recovery of theGroupʼs management
efficiency and financial
soundness after weakness
caused by acquisition ofcompanies

6.3% (FY18 results) ➔ 9.8% (FY21 results)〇 Kaga Electronics: Consolidated SG&A ratio

9.5% (FY18 results) ➔ 8.0% (FY21 results)〇 Kaga Electronics: Equity ratio
35.8% (end/Mar 2019 results)➔ 38.8% (end/Mar 2022 results)〇 Venture investments︓19 projects executed

Creation of New
Businesses▶ Enhancement of resiliency(investments in 42 companies)
to changes in the external△ Social issues solutions-oriented business︓
environment, actively
leveraging in-house
Entry into disaster-readiness helicopter andresources, and M&A
EV bus mobility business, preparation forentry into medical device business

31

Review of the Previous Medium-term Management Plan:
Results of management figures（billion yen）

Net sales<Management Targets>▶ Fell slightly short▶ Largely absorbed
unexpected impacts such as
those from loss of major<Results>
commercial rights and
JPY495.8bn COVID-19
JPY500bn

Operatingincome<Management Targets>

JPY13.0bn<Results><Results>

15.7％

200.0

292.8

443.6

422.4

495.8

FY2019FY2020

FY2021

0.0
FY201825.0
20.0▶ Greatly exceeded▶ Achieved record profits
over 3 successive fiscal years

20.9

15.0

13.0

10.0
5.0

7.6

10.0

11.5

FY2019FY20200.0
FY2018ROE
8％ or higher

500.0
400.0

（billion yen）

JPY20.9bn<Management Targets>

600.0

20%

▶ Exceeded stable ROE of
8% from the second year of
the medium-term plan

15%

13.5%

10.9%

FY2021

15.7%

7.6%

10%

8.0%

5%
0%
FY2018FY2019FY2020

FY202132

Outline of the new medium-term management plan
JPY 1 tn

Aim to become a competitive “World classcompany”
Aim to be “Japanʼs No. 1
corporate group in the industry”

Organic
growth+Further M&A
Challenges

Expansion of
trading company business

Increased
Sales

JPY

750 bnGrowth fields

Increased
ProfitRatio

Mobility
Communications
Environment

will lead to
growth of the EMS business
Quantitative
expansion of trading
company businessIndustrial
equipment
MedicalQualitative improvement
through EMS business

Reinforcement and expansion of overseas business, EMS business

Health care

（Net Sales）

Medium-Term Management Plan 2024
Further reinforcement of
profitability

Reinforcement ofmanagement baseCreation of new businesses

Promotion of SDGs
management“CHALLENGE 1.60"
Sales of ¥1 tn in year of
60th anniversary offounding

33

Management Policies of the new medium-term management plan

Basic policy

Priority themes▶ Focus on markets
Furtherwith potential for
Reinforcement ofhigh growth andProfitability
profitability▶ Transformation toa Group management
Reinforcement offoundation worthy ofManagement"Japanʼs No. 1
Base
corporate group in
the industry"

Creation of New
Businesses

Promotion of
SDGs
Management▶ Active use of venture
investments andM&As▶ achieve solutions tosocial issues andsustainable growth as
a company

Major initiatives• Selection and concentration in growth fields:
Mobility, Communications, Environment,
Industrial equipment, Medical/Health care
• Reinforcement and expansion of EMS businessand overseas business• Reinforcement of corporate governance• Efficient Group management• Investments in human capital• Initiatives in new fields• Promotion of open innovation through venture
investments• M&A efforts aimed at discontinuous growth• Promotion of group-wide sustainability
management(See “Medium- to long-Term Sustainability
Management Plan” for details)
34

Management Targets of the new medium-term management plan
There was pressure from special factors that were not predicted when formulating the plan, leading to profit levels
that exceeds the medium-term management target of 20 billion yen. We will conduct a revision as appropriate
given the actual state of affairs, focusing on the progress of performance as of the 1H of FY2022.
(Net Sales)

1,000Electronic Componens

EMS

CSI

50

Others

CSI: Consumer & System Integrator

45(Net Sales)

JPY750.0bn

800

600

JPY470.0bn

JPY495.9bn

12.0
400

200

0

40
110

JPY15.0bn

12.0

12.5
40

JPY20.9bn

JPY21.2bn

39

New
M&As

40
35

150
54

12.0
(Operating Income)

150 JPY20.0bn

25

15
10

380

334

5

FY2021 Forecasts
At the time ofplan formulation

FY2021Results

FY2022
Forecasts

FY2024
Management
Targets

Net sales

JPY475.0bn

JPY495.8bn

JPY510.0bn

JPY750.0bn

Operatingincome15.0bn20.9bn21.2bn20.0bn

9.7％

15.7％

13.0％

8.5％ or higher

ROE

30

20

125

118

326

308

JPY510.0bn(Operating
Income)035

Sustainability Policy
Under our corporate philosophy of "Everything we do is for our customers," the Kaga Electronics
Group seeks to achieve both a sustainable society and sustainable growth of the Group.
Toward this purpose, we will respect dialogue with customers, business partners, shareholders,investors, employees, local communities, and all other stakeholders, based on our Basic CSR Policy,
Environmental Policy, and Action Guidelines. We will work to increase our corporate value as weplay an active role in achieving a sustainable society.

1 We will tackle environmental issues through our business activities
Through our business activities, we will take action to cut CO2 emissions, reduce waste, andpromote reuse. At the same time, by providing environmentally considerate products and services,
we will contribute to bringing about a society that values the global environment.

2 We will respect human rights and develop human resources
We will respect the human rights of all stakeholders, regardless of gender, age, nationality, social
status, disabilities, or other personal attributes. We will develop work environments in which
diverse employees can work in safety and health, both physically and mentally, and will develop
personnel systems and education and training systems that allow these employees to maximize
their individual abilities. We will further work to develop human resources who will take on thechallenge of innovation.

3 We will work to build mutual trust with society
We will work to be a company that earns the trust of society by observing laws and regulations,by strengthening our governance structure, and by sincerely engaging in fair competition, theprovision of high-quality products and services, timely and appropriate information disclosure,and other corporate activities.
36

Materiality
The Kaga Electronics Group is committed to seriously addressing a variety of issues relevant not
only to itself but also communities around the world and thereby living up to the expectations ofsociety. In line with this commitment, the Group has employed four perspectives̶ Environmental(E), Social (S), Governance (G) and Business (B)̶to identify priority issues that are deemed toexert significant impact on its business operations, as listed below. Through its efforts to tackle themateriality of these issues, the Group will practice corporate activities aimed at contributing to therealization of a sustainable society, with the aim of further improving its corporate value.
Changes in the socio-economic
environment

Our initiatives

E

Create a clean
globalenvironment• Growing seriousness of global warming
and other environmental problems• Urgent call for carbon neutrality• Provide products and services designed tohelp resolve environmental and energy
issues• Continue initiatives to reduce theenvironmental burden

S

Create aninclusive company
as well as anaffluent society• Changes in social structure as we movetoward the popularization of the newnormal• Human resource shortages attributable
to a low birthrate and an aging
population• Promote workforce diversity andinnovative work styles to better adapt to
the new normal• Develop human resources by passing
down and updating KAGA-ism

G

Createa sustainable
management base

• Public calls for more robust corporate
governance• Growing need for business resilienceagainst changes in the operating
environment• Further strengthen corporate governanceand compliance• Thoroughly practice a profit-focusedmanagement approach

Realizesustainablebusiness growth• Progress in digital transformation• Coming of a “super-smart” society due
to the popularization of ICT, such as
IoT and AI• Intensification of global competition• Provide products and services that
contribute to the transition to a digitaldriven society• Create new businesses aimed at helping

Materiality

B

Related SDGs

37

Medium- to long-term sustainability targets and major KPIs
Key themesE

Achievement of shift to100% renewable energy

Issues to address and issues to
examine• Adoption of renewable energy atdomestic sales offices• Adoption of renewable energy atdomestic manufacturing sites• Adoption of renewable energy atoverseas manufacturing sites

Shift to electricity for• Switch to electric vehicles for domestic
sales vehicles (EV, HV, PHV, FCV)
company-owned vehicles

Long-term targets

2024: 40% (1%)
By 2024: Information
gathering/analysis and determinationof policy
・In-house power generation/external
procurement
・Solar panel/biomass power
generation/renewable energy
businesses

2030: 100%
2030: 50%
2050: 100%

2024: 85% (78.5%)

2030: 100%

Diversity and humanresource management• Ensuring diversity in core humanresources (Women, foreign
nationals, mid-career hires)• Initiatives to employ elderly workers
and persons with disabilities

Percentage of female newgraduates in general positions
2023: 30% (5.8%)
Percentage of women in
management positions
2024: 15% (13.3%)

Work–life management
and enhancement of
productivity• Enhancement of programs such as
childcare/family-care and telework• Acquisition of certification as a Healthand Productivity Management
Organization

2022: Implementation of review
2023: Certification

Restructuring thegovernance structure in
response to the revision of
the CG Code and thereorganization of TSE• Independent Outside Directors: atleast 1/3
• Establishment of Nomination andCompensation Committee

Performed in June 2021

Further strengthening
the supervisory andoversight functions of
top management overbusiness execution• Diversification of the Board of
Directors• Full compliance with Corporate
Governance Code for Prime Market• Adoption of delegation-based
executive officer structure• Transition to structure of company
with committees

S

G

Medium-term targets

By June 2022: Determination ofpolicyPerformed in November 2021

2030: 30%
2050: 100%

Percentage of female
new graduates ingeneral positions
2028: 40%
Percentage of women in
management positions
2029: 17%2025: Certification byoutside party
2024 onward:
Continuation ofcertification

Setting of targets inline with next CG Coderevision

April 2022: Enactment
By March 2023: Determination ofpolicy*Numbers in parentheses represent current values

38Medium- to long-term sustainability targets:
Main activities and progress
Key themesE

Achievement of shift to100% renewable energy

Issues to address and issues to
examine• Adoption of renewable energy atdomestic sales offices

 Measured the electricity usage (approx. 4.42 million KWh).
Started study of when to purchase renewable energy.

• Adoption of renewable energy atdomestic manufacturing sites

 Measured the electricity usage (approx. 6.72 million KWh).
Solar panels, onsite/offsite PPA, etc., are under consideration.

Shift to electricity for• Switch to electric vehicles for domestic
sales vehicles (EV, HV, PHV, FCV)
company-owned vehicles

Diversity and humanresource management

S
Work–life management
and enhancement of
productivity
Restructuring thegovernance structure in
response to the revisionof the CG Code and thereorganization of TSE

G

Further strengthening
the supervisory andoversight functions of
top management overbusiness execution

Main activities and progress in FY2021

 80.8% complete (as of March 31, 2022).

• Ensuring diversity in core humanresources (Women, foreign
nationals, mid-career hires)

 Formulated an action plan based on the Act on Promotion of
Womenʼs Participation and Advancement in the Workplace.
Started hiring activities in accordance with the plan.
 Informed group companies to improve percentage of womenin management positions. Started setting targets for numberof women in management positions at each group company.

• Initiatives to employ elderly workers
and persons with disabilities

 Employment of persons with disabilities is 100% of the legally
mandated rate (as of March 31, 2022).

• Enhancement of programs such as
childcare/family-care and telework

 Regulations and rules are being revised to make telework apermanent system.

• Acquisition of certification as a Healthand Productivity Management
Organization

 Prepared information to be disclosed on the website with aneye to acquisition of certification.

• Independent Outside Directors: atleast 1/3
• Establishment of Nomination andCompensation Committee Implemented from June 2021.

• Diversification of the Board of
Directors

 Activities underway to elect female directors in June 2023.

• Full compliance with Corporate
Governance Code for Prime Market

 TCFD-compliant information to be disclosed from June 2022.

• Adoption of delegation-based
executive officer structure Implemented from April 2022.

• Transition to structure of company
with committees

 Policy to be determined in FY2022.
*Numbers in parentheses represent current values

39

Shareholder ReturnBasic Policy on
Dividends ofSurplus

We shall perform stable dividends, while securing a consolidated dividend payout
ratio of 25 to 35%.
We shall use funds for business investments, capital investments, and M&A, etc.
in order to contribute to future growth.
Decisions on the acquisition of treasury shares shall be made appropriately,in consideration of capital efficiency and share price, etc.

25.5%

■ Commemorative
dividend■ Special dividend

JPY35
5

JPY40

30

30

FY2013Results

FY2014
Results

10

35%

27.2%

(Forecast)

25.6%■ Ordinary dividend

32.8%

29.6%

28.6%

Total return trend︓44.3%
Acquisition of treasury shares(JPY 3,674 mil)

24.1%

27.4%

20.8%
19.3%
※Including negative goodwill
about JPY8 bn

Total return trend︓45.4%

Acquisition of treasury shares(JPY 1,499 mil)

JPY55

JPY60

15

20

40

40

FY2015Results

FY2016
Results

JPY70

JPY120
JPY80

10

5
5

60

70

FY2017
Results

FY2018Results

JPY70

JPY80

10

20

60

60

FY2019Results

FY2020Results

25%
JPY150
10

40
140
80

FY2021Results

FY2022
Forecasts

40

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

Net
売上⾼
Sales
143,143
128,099

129,675

5,969

104,729
84,1302,904
491
12,5374,600
783
10,654105,406
4,114
730
10,745927
14,451

117,059
105,949
4,120
568
10,636

4,530
669
8,077

4,478
603
7,587

6,460
926
13,315

Total
YoY
QoQ

88,69090,62489,816

YoY

︓

+490

QoQ ︓

+1,981

Software103,782

117,005

122,440

︓
︓

-1
+322

Information equipment
YoY
QoQ

68,196︓︓-1,135+5,728

Electronic equipment
YoY ︓
QoQ ︓

2021/3
1QResults+15,043+13,467

Other

YoY
QoQ

106,750︓︓

2021/3
2QResults

2021/3
3QResults

2021/3
4QResults

2022/3
1QResults

2022/3
2QResults

2022/3
3QResults+15,690+5,4352022/3
4QResults

42

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

Segment Income
6,357

6,276

152

152
83

305

869

4,452

3,082
2,778
137

1,656

131
577

112
20
592

3,950

217

3,848

325

568

103

728

5,878
5,124
3,699

583
1,897

2,335

2021/3
2QResults

2021/3
3QResults

︓
︓

YoY
QoQ

︓
︓

YoY
QoQ

︓
︓

Other
-172
+0

-73
+83

Information equipment
YoY
QoQ

︓
︓

+140
+563

Electronic equipment
YoY
QoQ

2021/3
4QResults+2,326
-81

3,423

2,732

1,185
-44
-101
2021/3
1QResults

YoY
QoQ

Software

342

156

Total

-67

-42

-0

2022/3
1QResults

2022/3
2QResults

2022/3
3QResults︓︓+2,372-772

2022/3
4QResults

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

43

Net Sales by Region（million yen）

Net Sales
Total

143,143

105,949
72,14258,14353,334
3,827
4,687
7,419
1,894

6,175
3,573

38,07039,0382021/3
2QResults

2021/3
3QResults

61,266

68,56278,484

55,101

56,6195,276
3,467

47,212

YoY
QoQ

︓
︓

+15,043+13,467Japan

117,059

84,130︓︓

129,675

128,099
104,729 105,406

YoY
QoQ

7,454
3,915

8,721
4,301

39,47742,7702022/3
1QResults

2022/3
2QResults

8,675
3,938

9,249
4,718

48,49850,6902022/3
3QResults

2022/3
4QResults+6,342+9,921

North America
YoY
QoQ

︓
︓

YoY
QoQ

︓
︓

+3,972+573

Europe+1,251
+779

Asia
YoY
QoQ

︓
︓

+3,477+2,192

21,4822021/3
1QResults

2021/3
4QResults

44

Exchange Rate/FOREX Sensitivity（Reference）

Effect of 1% change（Million Yen）

Net sales

OperatingincomeForex
Assumptionfor2023/3(yen)112.381,573

46116.00

15.48

17.03

242

9

18.00

THB

3.42

3.44

251

14

3.50

HKD

13.68

14.44

208

6

14.50

EUR

123.70130.50100130.00

FY2021/3
Results

FY2022/3
Results

（Yen）

（Yen）

USD

106.06

RMB

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/en/

■ 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.