KAGA ELECTRONICS
CO., LTD.

For Institutional Investors/Analystss

Financial Results Briefing Material
for the First Half of the
Fiscal Year ending March 2021
KAGA
ELECTRONICS CO., LTD.
加賀電子株式会社
November 26, 2020
TSE 1st section 8154

INDEX FY2021/3 First Half Financial Results

P-2～

Summary/Financial Highlights/
Effect of M&A/
Financial Highlights by Business Segment/
Balance Sheet/Cash Flows Management Topics

P-27～

Response to the Spread of covid-19 Infection/
Acquisition of Kyokuto Electric /Progress of PMI・・Fujitsu Electoronics・Kaga EMS Towada・Excel
Sustainability(SDGs) initiatives
 Refelence

P-36～

Consolidated Financial Results
for the First Half of the Fiscal Yearending March 2021
Managing Director
KAGA ELECTRONICS CO., LTD.

Eiji Kawamura

2

Summary of Financial Results
for the First Half Ended September 30, 2020
FY2021/ 2Q
Results



Overview ofthe mainsegments

Revised
Forecast for
FY2021/3
Shareholder
ReturnAlthough PC sales grew due to the growing utilization of remote work during thecoronavirus outbreak, net sales fell as a result of a significant impact from changes
in commercial rights and commercial distribution with major business partners.
Both operating income and ordinary income declined, despite efforts to reduce
SG&A expenses in line with lower sales.
Net income increased due to a gain on bargain purchase following a M&A.

Electronic
Components

・ Net sales were down in the components sales business because,
although Excel was consolidated in April 2020, the termination of
Fujitsu Electronics’ sales agency agreement with Cypress
Semiconductor pushed sales down sharply.
・ The EMS business maintained a steady performance in the medical
equipment area, but sales fell for automotive and air conditioning
devices due to the impact of the partial suspension of operations
at overseas plants during the lock downs.

Information
Equipment

・ Sales rose in the PC sales business due to an increase in remote
work and online classes.
・The house-related home electric appliances business continued to post
lower sales.



There are signs of a gradual recovery from the pandemic in some manufacturingindustries, moreover, 2Q earnings results surpassed internal plans. Given thesefactors, we have raised our forecasts for net sales, operating income and ordinary
income upward from the previous forecasts (released on August 6). No change infinal profit due to uncertainty in the second half.

Interim dividend was decided to be 30 yen per share as initially announced..
Year-end dividend will remain unchanged at the initial forecast of 30 yen per share.
3

Financial Highlights（million yen）

FY2020/3
2Q Results

FY2021/3
2Q Results

230,630

188,859

Gross Profit

23,771 10.3%

SG&A

18,531

Operating income

Progress
rate

FY2021/3
Forecasrt

YoY-18.1%

40,00021,641 11.5%

-9.0%

ー

ー

ー

8.0%

17,206

9.1%

-7.1%

ー

ー

ー

5,239

2.3%

4,434

2.3%

-15.4%

5,000

1.3%

88.7%

Ordinary income

5,546

2.4%

4,338

2.3%

-21.8%

4,500

1.1%

96.4%

Profit attibutable toowners of parent

3,502

1.5%

10,7725.7%

207.3%

10,0002.5%

107.7%

127.62－392.30－－364.18－－108.63－106.92

－

-1.71

－

ー

Net Sales

EPS（yen）
Exchange Rate

USD

47.2%

4

Financial Results by Business Segment for FY2021/3 2Q（million yen）

FY2020/3

FY2021/3

2Q Results

2Q Results

Net sales
Electronic
Component Segment income

199,818

Information Net sales
Equipment Segment income

19,968

Software

OthersTotal

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

4,238
618

156,887
2.1%

3.1%

3.5%

1,160
86

2.7%

36

5.0%

4,434

87.8%
-4.3%

6.8%

84.0%
-21.1%

0.5%

188,859
2.3%-27.3%
16.1%

7,505

230,630
5,239

2.0%

1,274

9,510
259

3,083

-21.5%

23,192

1,332
46

YoY

-86.1%-18.1%

2.3%-15.4%

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 2Q Results)（million yen）

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.

230,630-8,880-51,494＋18,604

188,859

Although income was down for both Kaga Electronics
and Fujitsu Electronics, the gross profit margin
improved due to better sales mix.
23,771

-494

13.7%

14.3%

Kaga
FujitsuElectronics Electronics

Excel

2021/3 2QResults

2021/32Q

2020/32Q+1,0098.0%

6.7%
2020/3
2Q-2,633Kaga
FujitsuElectronics Electronics

5.4%
Excel

2021/3 2QResults

21,64111.5%
2021/3
2Q

SG&A / SG&A ratio

Operating income / Operating income marjin

At Fujitsu Electronics, impact of sales decline sosignificant that SG&A ratio rises despite efforts to curb
expenses.

Despite of sales declining during the pandemic,
Kaga Electronics increased both operating income andthe margin.

18,531-1,104-1,27810.4%
5.5%
2020/32Q+1,05817,206

10.2%
8.1%
Kaga
FujitsuElectronics Electronics

5.7%
Excel

2021/3 2QResults

5,239

+667

3.3%

4.2%

-1,370
-106

9.1%

2.3%

1.2%
2021/32Q

2020/3
2Q

4,434

Kaga
FujitsuElectronics Electronics

Excel

2021/3 2QResults

2021/3
2Q

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 -5million yen, and operating income came to 5 million yen.

6

FY2021/3 2Q results by company（million yen）

Kaga
Electronics

FujitsuElectronics

Excel

Net sales
Gross Profit
operating income
Net sales
Gross Profit
operating income

2021/3

2Q Results

2Q Results

119,415
16,347
3,952
111,214
7,418
1,286

13.7%
3.3%
6.7%
1.2%

Net sales－－

Gross Profit－－

operating income－－

Net sales
Total

2020/3Gross Profit
operating income

230,630
23,771
5,239

110,535
15,853
4,619
59,7204,784-84
18,604
1,009-106
188,859
21,641
4,434

YoY
-7.4%
14.3%

-3.0%

4.2%

16.9%
-46.3%

8.0%-35.5%

-0.1%

－
－

5.4%

－

-0.6%

－
-18.1%

11.5%

-9.0%

2.3%

-15.4%(note) With respect to gross profit and operating income, figures presented above are before consolidation adjustments.

between the three companies.

7

Financial Highlights: Electronic Component Segment（Million Yen）

Net sales/Segment income- 42,931million yen 21.5％Down
 Segment income - 1,155million yen 27.3％Down
 Net Sales

199,818

156,887

・The components sales business benefited from theeffect of Excel’s consolidation, but sales fell due tothe termination of Fujitsu Electronics’ sales agency
agreement with Cypress Semiconductor and otherfactors.

4,238
3,083

2020/3
2Q

YoY

・The EMS business continued to perform well in the
medical equipment area, but was sluggish in theareas of automotive and air conditioning devices.
・The company was affected by partial suspension ofoperations and production adjustments at overseas
plants due to the pandemic.

2021/32Q

8

Financial Highlights: Information Equipment Segment（Million Yen）

Net sales/Segment income
24000

YoY
5000

23,1924500

 Net Sales+3,223million yen 16.1%Up

 Segment income +542million yen 87.8%Up

22000

4000

19,968
20000
3500

3000

18000

2500

16000

2000

1,160

14000

・Sales of PCs and PC peripherals to home appliancestores, schools and educational facilities were strong
during the coronavirus outbreak due to the increase
in remote work and online classes.
・The house-related home electric appliances businessremained sluggish.

1500

1000

618

12000

500

10000

0

2020/32Q

2021/32Q

9

Financial Highlights （3months）（million yen）

FY2020/3
2QResults

FY2021/3
1QResults

FY2021/3
2QResults

YoY

QoQ

-13.5%

24.5%

-8.4%

16.5%

121,066

84,130104,729

12,708 10.5%

9,997 11.9%

11,643 11.1%

SG&A

9,319

7.7%

8,341

9.9%

8,864

8.5%

-4.9%

6.3%

Operating income

3,389

2.8%

1,656

2.0%

2,778

2.7%

-18.0%

67.8%

Ordinary income

3,500

2.9%

1,533

1.8%

2,804

2.7%

-19.9%

82.9%

Profit attibutable toowners of parent

2,152

1.8%

8,643 10.3%

2,128

2.0%

-1.1%

-75.4%EPS（yen）

78.42－

314.77

77.53

ー

－

－

Net Sales
Gross Profitー10Financial Results by Business Segment for FY2021/3
2Q(3months)（million yen）

Electronic
Component
Information
Equipment

Software

Others

Net sales

FY2021/3

FY2021/3

2QResults

1QResults

2QResults

105,230

Segment income

2,617

Net sales

9,842

68,1962.5%

1,185

88,6901.7%

12,5372.1%

10,654QoQ-15.7%

30.1%-27.5%

60.0%

8.2%

-15.0%

34.6%

-0.9%

429

Net sales

895

491

783

-12.5%

59.2%

Segment income

108 12.2%-44 -9.1%

131 16.8%

20.5%

－

-9.8%

58.4%

-26.2%－-13.5%

24.5%-18.0%

67.8%

Net sales

Net sales
Segment income

4.4%

5,097
186

4.7%

2,904
3.7%

121,066
3,389

583

1,897

YoY

Segment income

Segment income

Total

FY2020/3-101 -3.5%
1,656

5.4%

4,600

84,130
2.8%

577

137

3.0%

104,729
2.0%

2,778

2.7%

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

11Effect of M&A (FY2021/3 2Q Results, 3months）（million yen）

Net Sales

Gross profit / Gross profit margin

Fujitsu Electronics continued to heavy drop in sales
due to loss of large commercial rights.

Kaga Electronics improved sales mix and grossprofit declined limitedly.

121,066▲3,702▲28,773＋16,139

104,729

12,708

▲130

13.8%

14.5%
8.0%

7.0%
2020/3
2Q

Kaga
FujitsuElectronics Electronics

Excel

2021/3 2Q Results

2021/32Q

2020/3
2Q▲1,712

Kaga
FujitsuElectronics Electronics

+779

4.8%
Excel

2021/3 2QResults

11,64311.1%
2021/3
2Q

SG&A / SG&A ratio

Operating income / Operating income marjin

At Fujitsu Electronics, impact of sales decline
so significant that SG&A ratio remained highdespite efforts to curb expenses.

Despite of sales declining during the pandemic,
Kaga Electronics increased both operating income
and the margin.

9,319

▲510
▲598

10.1%
5.2%
2020/3
2Q

655

8,864

9.8%

3,389

Kaga
FujitsuElectronics Electronics

4.1%
Excel

2021/3 2Q results

8.5%
2021/3
2Q▲1,123
+91

3.8%
8.2%

+413

4.7%
0.6%

1.8%
2020/3
2Q

2,778

Kaga
FujitsuElectronics Electronics

Excel

2021/3 2Q Results

2.7%
2021/3
2Q

note :With respect to gross profit and operating income, figures presented above are before consolidation
12
adjustments between the two companies. For reference, after consolidation adjustments,
gross profit stood at -2million yen, and operating income came to 3million yen.

FY2021/3 2Q results by company（３months）（million yen）

Kaga
Electronics

FujitsuElectronics

Excel

FY2020/3

FY2021/3

FY2021/3

2QResults

1QResults

2QResults

61,7448,540 13.8%

52,4937,442 14.2%

58,0418,410 14.5%

3.8%

Gross Profit

2,335
59,322
4,168

1,870
29,1722,328

2,749
30,5482,455

operating inc

1,057

1.8%

Net sales－－

Gross Profit－－

operating inc－－

Net sales
Gross Profit
operating inc
Net sales

Net sales
Total

Gross Profit
operating inc

7.0%

121,066
12,708 10.5%
3,389

2.8%

YoY

QoQ

ー6%

10.6%

ー1.5%

13.0%

17.7%

47.0%

ー48.5%

4.7%

8.0%

ー41.1%

5.5%-65 -0.2%
16,139779 4.8%－－－

554.9%－

238.6%-198 -8.0%
91 0.6%
104,729
84,13011,643 11.1%
9,997 11.9%－－

ー13.5%

24.5%

ー8.4%

16.5%

ー18.0%

67.8%

3.6%
8.0%

-18 -0.1%
2,464
230 9.3%

1,656

2.0%

2,778

4.7%

2.7%

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

between the three companies.

13

Financial Highlights: Electronic Component
Segment(3months）（million Yen）

Net sales/Segment income/

120000/105,230

YoY

Net Sales
Segment income

 Net Sales

8000- 16,539million yen 15.7％Down

 Segment income - 720million yen 27.5％Down
7000

10000088,6906000

QoQ+20,494million yen 30.1％Up
 Segment income +711million Yen 60.0％Up

80000

 Net Sales

68,196

5000

60000

4000

2,617

3000

40000

1,897

2000

1,185

20000

1000

0

0

2020/32Q

2021/3
1Q

2021/32Q

14

Financial Highlights: Information Equipment Segment（3months）（million yen）

Net sales/Segment income

16000

YoY
 Net Sales＋811million yen/

Net Sales/

Segment Income  Segment income ＋148million yen

4000

8.2％Up
34.6％Up

3500

14000

12,537QoQ
3000- 1,882million yen 15.0％Down- 5million yen 0.9％Down
 Segment income
 Net Sales

12000

10000

10,654

9,842

2500

2000

8000

1500

6000

1000

4000

429

583

577
500

2000

0

2020/32Q

2021/3
1Q

2021/32Q

15

Balance Sheet Main Items（million Yen）

Total assets

214,475

207,638

Total liabilities and net assets

214,475

209,908

207,638

209,908

Total liabilities
Current assets

182,133

174,331129,008

121,388

113,745

172,376

32,34133,30637,532

2019/92020/32020/985,46686,2502019/92020/396,163

Total net assets

Non-current assets

2020/916

Balance Sheet Main Items（millon yen, day）

Inventories

Accounts receivable/Accounts payable
89.0

160,000

90.0

50,000

27.6

26.3

36.6

77.4
50.0

Inventory turnover

70.0

120,000

40,00037,72934,792

A/R turnover

75.2

140,000

68.9

67.0

A/P turnover

61.1
50.0

97,5100.0

100,000

91,371

31,90891,86430.0

30,00080,00074,69670,188

-5
0. 0

10.0

Notes and A/R

54,60560,00020,000Inventories

-1
0. 0

Notes and A/P

40,000-100. 0

10,000-3
0. 0

20,000

0

-5
0. 0

-1
50. 0

0

2019/92020/32020/9

note：Inventory turnover ＝ Inventories ÷ Net Sales ×365(2020/9:183)（day）

2019/92020/32020/9notes：・Notes and A/R are amounts including Electronically recorded monetary claims-operating
・A/R turnover ＝ Notes and A/R ÷ Net sales × 365(2020/9:183)（day）
・A/P turnover ＝ Notes and A/P ÷ Total purchase of goods ×365(2020/9:183) （day）

17

Cash and Deposits/Interest Bearing Debt/Cash
FlowsBalance（ Million Yen）

Cash and Deposits/Interest Bearing Debt
0.45
60,000-0.11
50,0000.37

0.44（times）
0.50

D/E ratio

0.04
-0.19

Cash flows

0.00

Net D/E ratio

22,406-0. 50

40,000-1. 00

Cash and deposits

11,68430,000-1. 50

20,00042,931

43,384

39,179-2. 00

35,55434,570Interest bearing debts-1,547-6,860-3,651-7,54428,736

10,000-7,017-2,996

Cash flows fromoperating activities
Cash flows frominvesting activities

-2
. 50

-855
2019/302020/3

Cash flows fromfinancing activities

2020/9-3. 00

2019/92020/32020/92019/32020/32020/9

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

18

Supplementary information on cash flow
Cash flow from operating activities recorded a temporary increase in outflow in FY2020/9 due tothe acquisition of Excel, loss of large commercial rights and the impact of COVID-19,
but is expected to reverse within FY2021/3.

Main variation items

FY2019/9

 Profit before income taxes

Cash flows
fromoperatingactivities

 Gain on negative goodwill
 Decrease (increase) in notes and accounts receivable - trade Decrease (increase) in inventories
 Increase (decrease) in notes and accounts payable - trade Decrease (increase) in accounts receivable - otherNet cash provided by (used in) operating activities

Main factors

FY2020/9

5,302

12,126－-7,963

2,979

10,547・・・②

4,784-2,095

1,835-21,540

・・・④

-497

1,607

12,913-5,242① Gain on negative goodwill➞ Due to the acquisition of Excel② Decrease in notes and accounts
receivable -trade③ Increase in inventories➞ Excel reduced inventories related to China operation④ Decrease in notes and accounts
receivable -trade

・・・①
・・・③

➞ Fujitsu Electronics decreased 9,375 due to sales
decline related to loss of large commercial rights➞ Fujitsu Electronics decreased 13,851 due to loss oflarge commercial rights and COVID-19

19

Forecast for the Fiscal Year ending March, 2021
（Million Yen）

FY2020/3
Results
Net sales

FY2021/3
Initial forecast

FY2021/3
Current forecast

ChangesYoY（announced on August 6, 2020）

443,615400,000

410,000

2.5%

-7.6%

Operating income

10,014

2.3%

5,000

1.3%

7,500

1.8%

50.0%

-25.1%

Ordinary income

10,137

2.3%

4,500

1.1%

7,500

1.8%

66.7%

-26.0%

5,852

1.3%

10,0002.5%

10,000

2.4%

ー

70.9%
70.8%

Profit attributable toowners of parent
EPS（Yen）
ROE

213.21364.18364.18

ー

7.6

11.8

11.8

ー

+4.2pt20

Breakdown of revised forecasts for FY2021/3
Previous forecast（million yen）

 Kaga Electronics
 Fujitsu Electronis
Net Sales ExcelBeforeCOVID-19
Pandemic
450,000

 Risks due to COVID-19
Total
 Kaga Electronics
 Fujitsu Electronics
 ExcelOperating
Income240,000-5,000235,000

160,000-35,000

125,000

50,000-50,000

50,000（-40,000）

400,000 Change：＋10,000
BeforeCOVID-19
Pandemic
8,500

 Risks due to COVID-19

-500

1,000

0

0
-1,000＊Lost gross profit due to lower sales: -5,000-4,000＊Profit recovery:＋1,500＋3,0005,000

Change： ＋2,500

 Gains on negative goodwill
 Restructuring cost, others Income Taxes

410,000
8,000

7,500

-3,500

Total
Profitattributableto owners ofparentRevised forecast

8,000

7,500
7,963

-1,500-3,000-1,500with コロナ 収益目線
10,000-2,50010,00021

Reference

Segment disclosure associated of 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

EMS

 Sales of semiconductors
 Sales of general electronic
components
 Sales of various devices
 Electronic equipment manufacture
contracting services
 Sales of PCs and PC peripherals

CSI*

Others Sales of home electric appliancesand lighting fixtures
 Sales of photograph and imaging
products
 Production of CG video andsoftware Sales of amusement equipment
 Repair and support for electronics
equipment
 Sales of sports goods*CSI: Consumer & System Integrator

22

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.
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.

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CSI

Others

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23

Reference

Financial Highlights by Business Segment of
the Medium-Term Management Plan
（Million Yen)

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

2Q Results

2Q Results

156,803
2,127

117,287
1.4%

46,945
2,100

4.5%

3.1%

2,265
1,160

4.6%

88

5.3%

4,434

7.9%
16.1%

5.0%

87.8%
-21.3%

1.6%

188,8592.3%-60.0%
-8.5%

5,438

230,630
5,239

0.7%

23,192

6,912
316

851

-25.2%

42,94019,968618

YoY-72.2%-18.1%

2.3%-15.4%

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

24Reference

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

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

2Q Results

2Q Results

84,698
1,651

67,5472.0%

22,425
830

3.7%

4.4%

1,181
577

10.5%

177

5.1%

2,778

42.3%
8.2%

5.4%

34.6%
-16.9%

5.2%

104,7292.8%-51.1%
3.1%

3,406

121,066
3,389

1.2%

10,654

4,099
430

807

-20.2%

23,120

9,842
429

YoY

-58.9%-13.5%

2.7%-18.0%

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

25Forecasts by Business Segment of
the Medium-Term Management Plan（million yen）

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

Forecasts

264,000

292,905
3,553

1.2%

4.3%

3.9%

4.5%

3.5%

2,300
200

2.3%

7,500

-25.3%
15.0%

4.6%

34.7%
-20.9%

1.8%

410,000

443,615
10,0143,000-43.7%-8.9%

11,00013,902623

0.8%

50,00043,466
1,707

2,000

-9.9%

85,00093,3404,015

YoY-67.9%-7.6%

1.8%-25.1%

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

26

Management Topics
President & Representative Director
KAGA ELECTRONICS CO., LTD.

Ryoichi Kado

27

Response to the Spread of Novel Coronavirus Infection
・We continued with marketing activities while implementing safety measures in Japan andoverseas, such as telework and staggered work times, in line with guidance from the central
and local governments.

Sales bases
Officeattendance
rate

Apr.

May

June

July

Aug.

Sept.

Number of
COVID-19 cases

Kaga
Electronics

29.4％

27.0％

42.4％

46.8％

37.3％

48.6％

1

Group
companies

35.4％

30.3％

51.4％

55.8％

46.9％

54.1％

1

・We are continuing to operate with a minimum number of people while implementing

safety measures in accordance with the guidance of the central government and regional
governments. Overseas, some sites suspended operations during lockdowns.
Number of
COVID-19 cases

Status of suspended operations following increase in COVID-19 cases
Feb.

Mar.

Thai・Indonesia・
TurkeyProduction
bases

Hubei, China

Apr.

May

June

July

Aug.

Sept.

No suspension of operations
０

Feb.1～Mar.15

Suzhou, China

Feb.1～Feb.9

０

Shenzhen, China

Feb.1～Feb.13

０

Malaysia
VietnamMar.18～Apr.20
Apr.1～Apr.15

India
Czech
Mexico００Mar.25～May31
Apr.7～Apr.9

０1

Apr.1～May30
Operation suspension period228Acquisition of Kyokuto Electric
Name

Outline of
KyokutoElectric Co.,
Ltd.

Acquisition
schemeRepresentative

・ Kyokuto Electric Co., Ltd.
・ Representative Director and Chairman : Motonori Toshinari（Director, Division Manager of EMS Business Division of
KAGA ELECTRONICS）
・ Representative Director and President : Yasuhiro Sawada（present position）

Address

・ 6-2-1 Shinmori, Asahi-ku, Osaka-shi, Osaka

Business
description

・Manufacture of safety breakers, power leakage
circuit breakers, and DC switching device
・Electronic equipment EMS Business April 28, 2020: Kyokuto Electric petitioned the Osaka District Court for theapplication of the Civil Rehabilitation Act
 August 31, 2020: Kaga Electronics concludes agreement to sponsor thecivil rehabilitation of Kyokuto Electric November 2, 2020: Kyokuto Electric is divided, Kaga Electronics acquires
100% of the shares of the newly established Kyokuto Electric and the newcompany becomes a consolidated subsidiary on the same day.

Purpose of
acquisition

 Continue to supply Kaga Electronics’ automotive product EMS customers
 Build an EMS site in western Japan to enhence domestic production capability
 Contribute to Group revenue by strengthening competitiveness of Kyokuto
Electric’s unique products*

Effect on
earnings

 The effect on earnings in the fiscal year ending in March 2021 is expected
to be minimal.

*Products for which Kyokuto Electric has a 75–100% market share, such as earth leakage plugs,
earth leakage relays, power leakage circuit breakers, and DC switching devices.

29

Progress of PMI at Fujitsu Electronics

EMS
initiatives

 Obtained orders for development, experimental production and mass
production from five companies, including automotive equipment
manufacturers and electronics manufacturers
84 companies/new visits ➡ 40 companies/currently in sales talks<Focus point>
Results from activities in first half of fiscal year were in line with results inthe previous year; first order for overseas mass production was Obtained

Cross-selling
initiatives

 Strengthened sales of Kaga Electronics’ influential products to large andimportant clients<Focus point>
Large-scale sales talks are underway in several fields, including
information equipment, infrastructure equipment and home electronics

New productinitiatives

 Expanded products and services in a wide range of fields, such as
semiconductors, electronic parts and unit modules<Focus point>
New products handled: 79 companies; estimated sales in current fiscal
year: 14.7 billion yen (10.4 billion yen in previous fiscal year)

Consolidationof sales bases

Japan
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(spring 2021)
・Sales companies in Korea of both company are also underconsideration [Spring /2021]*Abbreviations: Kaga Electronics ➔ KG, Fujitsu Electronics ➔ FEI

Others Company name will be changed to Kaga FEI Co., Ltd. effective December
28, 202230

Progress of PMI at Kaga EMS Towada(Former Towada
Pioneer ）Bring in new
customers①Collaboration
with Kaga
Electronics

Bring in new
customers②Own efforts

Initiatives as
EMS motherfactory

Automotive

・ Start of mass production of electronic boards for Japanesetier-1 companies (from July 2020)
・ Mass production orders of electronic boards for Japanesetier-1 companies (from November 2021)

Officeequipment

・ Mass production orders of electronic boards for major
Japanese office equipment manufacturer (from 2021)

Electronics

・ Acquired “certified factory” accreditation from major Japaneseelectronics manufacturer

Medicalequipment

・ Contract manufacturing of sensors for Japanese medical
equipment manufacturer (from December 2020)
・ Contract manufacturing of units for Japanese medical
equipment manufacturer (from May 2022)

 Expansion of tools that incorporate IT into production (management
software, facilities) developed by Kaga EMS Towada to manufacturingbases within Group Sharing standardization expertise on manufacturing Support for overseas manufacturing bases, deployment of humanresources stationed overseas Accelerate training of human resources in quality management andmanufacturing technology
 Promotion of IT from a manufacturing perspective (quality management,materials, factory operations, accounting)31

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 is currently underway*Orders for two EV buses were confirmed in H1

Cross-selling
initiatives

 Strengthen sale of products held by Kaga Electronics to major customers<Focus point>
A Group Synergy Promotion Office has been set up within EXL to strengthen
the collaboration.
Moreover, a Special Sales Marketing Division has been set up, and it iscurrently expanding the handling of products other than electronic parts.

Consolidationof sales bases

・ EXL merged with ADS (on October 1, 2020)
・ EXL’s headquarters will be moved to Kaga Electronics’ headquarters(Akihabara) [around spring 2021]
・ EXL’s Nagoya branch will be moved to KG’s Nagoya sales office[around spring 2021]
・ Changes for other sites in Japan are currently being considered・ EXL Singapore will be liquidated and business moved to Kaga
Singapore [around winter 2020]
・ ADS Hong Kong will be liquidated and business moved to EXL Hong
Kong [around winter 2020]
・ Changes for other overseas sites are being consideredJapan

Overseas*Abbreviations: EXCEL➔EXL

Advanced Display Solutions（ EXL’s subsidiary ）➔ADS

32

Kaltech’s photocatalytic sanitizer/deodorizer

Wall Mounted typePortable air purifier(hanging type）※カルテック社ホームページより※From Kaltech’s website

About Kaltech Co., Ltd.

Kaltech’s photocatalytic technology

 Kaltech is a venture company set up by
a former Sharp engineers in 2018.
 The company works onsanitizer/deodorizer equipped withphotocatalytic technology developed by
Kaltech.
 EXL has invested in this company andexpanded its relationship, signing abasic agreement to collaborate on sales
and parts procurement in the Groupoverall. EMS development is being
considered for the future.

 By radiating visible LED at a
photocatalytic filter coated withtitanium oxide using Kaltech’s
proprietary technology, viruses andharmful substances that attach to thefilter are broken down into water andcarbon dioxide.
 An evaluation of the functions carriedout jointly by Riken and Nihon
University School of Medicine foundthat the machine deactivated 99.9%
of covid-19 in 20 minutes.
33

Sustainability initiatives
New businesses
Helicopter business・Disaster prevention
applications for publicagencies

Outside collaborations
Venture investment
・Resolution of social issues
Collaboration
between businessand academia
・Development of energy-saving devices

Medical equipment
business
・CT scanners/CT

Conventional businesses
Parts business・Devising andencouraging
applications related
to SDGs

EMS business・Devising andencouraging
applications related
to SDGs

Completedproducts business・Sales of PCs to
educational
institutions

Renewablebusiness
・PC reuse andrecycling34

New Initiatives: Sustainability
Medical equipment × QOL

Wearable Device and Support ofPeople with Disabilities

Breast cancer CT scanner

Mobile CT scanner

Care Support System“Watch-Over” System in an Aging
Society

ONTENNA

Green Capacitor

Breakthrough × Next-generation
battery storage devices
35

Refelence36

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

Net
売上高
Sales
Total

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

5,097
895
9,842

108,170
4,185
455
9,820

104,813

104,729

6,085
990

4,600
783
10,654

13,677

84,1302,904
491

105,230

93,708： -16,336： +20,599

YoY

：

-497

QoQ ：

+1,696

Othe

Software

12,537

94,587

YoY
QoQ

YoY
QoQ

：
：

Information equipment

88,69084,06068,196

YoY
QoQ

：
：

2020/3
2QResults

2020/3
3QResults

2020/3
4QResults

2021/3
1QResults＋811-1,882

Electronic equipment
YoY ：
QoQ ：

2020/3
1QResults

-112
+291

-16,539+20,4942021/3
2QResults

37

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

Segment Income

Total

3,389
186
108
429

1,850

2,492
105

2,282

236

87

72
188
2,617

2,778

1,656

853

583

2,180

2020/3
1QResults-37
2020/3
2QResults

2020/3
3QResults

577

-610
+1,122

YoY
QoQ

：
：

Other
-48
+239

Software
YoY
QoQ

：
：

＋22
＋176

Information equipment

1,897
1,084

：
：

131

226

1,621

-61

137

YoY
QoQ

YoY
QoQ

：
：

+148
-5

Electronic equipment

1,185

YoY
QoQ

：
：

-720
+711

-44
-101
2020/3
4QResults

2021/3
1QResults

2021/3
2QResults

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

38

Net Sales by Region（million yen）

Net Sales

YoY- 15,227million yen 20.8％Down
 North America - 2,777million yen 42.1％Down- 1,431million yen 23.4％Down
 Europe Japan

121,066
104,729＋3,099million yen

 Asia

8.9％Up84,13073,370［60.6%］
58,143 [55.5%]

Japan

53,334 [63.4%]
3,827 [3.7%]

6,604 ［5.5%］

4,687 [4.5%]

6,119 ［5.0%］

34,971［28.9%］

Europe7,419 [8.8%]
1,894 [2.3%]

38,070 [36.3%]

21,482 [25.5%]
2020/3
2QResults

North America

2021/3
1QResults

QoQ Japan＋4,809million yen 9.0％Up
 North America - 3,591million yen 48.4％Down
 Europe＋2,793million yen 147.5％Up
 Asia＋16,587million yen 77.2％Up

Asia

2021/3
2QResults

39

Exchange Rate/FOREX Sensitivity（Reference）

Effect of 1% change（million yen）

Forex
assumption
for FY2021/3

FY2020/3
2Q Results

FY2021/3
2Q Results

Net Sales

USD

108.63106.92649

19105.50

THB

3.49

3.38

90

2

3.50

RMB

16.20

15.39

524

3

15.00

HKD

13.86

13.80

482

2

13.50

（yen）

（yen）

Ordinary
income(yen)

40

＜memo＞

41

＜ memo ＞

42

＜memo＞

43

＜ memo ＞

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/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.