KAGA ELECTRONICS
CO., LTD.

For Institutional Investors/Analystss

Financial Results Briefing Material
for the First Half of the
Fiscal Year ending March 2022
KAGA
ELECTRONICS CO., LTD.
加賀電⼦株式会社
November 25, 2021
TSE 1st section 8154

I am Kawamura from KAGA ELECTRONICS CO., LTD. Thank you very much for yourcontinued support.
I will now provide an overview of our financial results for the second quarter of the fiscal
year ending March 2022.

Summary of Financial Results for FY2022/3 2Q

FY2022/3
1H results

 Net sales increased, driven by the electronic components business that benefited
from recovery in demand.
 Operating income increased significantly, achieving a record high for the first
half, a result of higher gross profit reflecting higher sales, as well as facilitation of
remote working, online conferencing and other tools, and efforts to curb expenses.
 Net income for the quarter decreased due to the absence of the 7.96 billion
yen "gain on bargain purchase" resulting from the acquisition of EXCEL, which wasposted as extraordinary income.

Electronic

Overview ofthe mainsegments

Components

Information
Equipment• In the components sales business, the tight supply/demand balance ofelectronic components continued but volume could be secured byleveraging strength in procurement capabilities. Net sales
increased, driven by robust demand.
• In the EMS business, sales in the automotive, industrial equipment,
and medical product areas were solid.
• PCs to educational institutions and PC peripheral equipment suchas security software maintained the strong 1Q sales trend.
• Net sales declined due to the impact of a reactionary drop in the sale ofPCs for remote work as well as extensions of construction periods in the
LED and network device installation business caused by delayed deliveryof products and materials.

FY2022/3
earnings
forecast While taking note of the steady progress in the first half that exceeded initial plans,
forecasts for the 3Q and beyond carefully incorporate the effects of risks such asopportunity loss arising from tight supply/demand balance of electronic components
and soaring distribution costs.
 Forecast for net sales remains unchanged. Forecast for operating income is raisedby 2 billion yen, targeting another record high for the third consecutive fiscal year.

Shareholder
return Interim and year-end dividends will both be increased by 5 yen from the initial
forecast, to 45 yen per share.
 Full-year dividend will be 90 yen per share, an increase of 10 yen from 80 yen
paid in the previous fiscal year.
1

First of all, net sales increased, driven by the Electronic Components business on the back of recovering
demand.
Operating income increased substantially due to an increase in gross profit resulting from higher sales, aswell as efforts to promote the use of telework and online meetings, and to control expenses. This is arecord high for the second quarter.
Profit attributable to owners of parent decreased because the gain on negative goodwill of JPY7.960
billion, which was recorded as extraordinary income in the previous fiscal year due to the acquisition of acompany, has been eliminated.
The following is an overview of the main segments.
In the Electronic Components business, the components sales business took advantage of its strength inprocurement to secure product volume amid the continued tightening of demand for electronic
components, and sales increased on the back of strong demand. In the EMS business, sales for automotive,
industrial equipment and medical products were strong.
Next is the Information Equipment business. Sales of PCs to educational institutions and sales of PC
peripheral equipment such as security software continued to be strong from the first quarter. However, areactionary decline in sales of PCs for remote work and delays in the delivery of product materials in the
LED and network device installation business caused the construction period to be extended, resulting in adecrease in net sales.
This is the forecast for the fiscal year ending March 2022.
Based on the steady progress up to 2Q, which exceeded the initial plan, we have cautiously factored in therisk of opportunity loss due to tight supply and demand for electronic components and the impact ofsoaring logistics costs from 3Q onward. As a result, net sales will remain unchanged, while operating
income will increase by JPY2 billion, aiming for a third consecutive year of highest profits.
Regarding shareholder returns, we have revised the interim and year‐end dividends to JPY45 per share, anincrease of JPY5 from the beginning of the fiscal year. The annual dividend of JPY90 per share represents
an increase of JPY10 from the previous year’s actual dividend of JPY80 per share.

FY2022/3 2Q Financial Highlights（million yen）

FY2021/3
2Q Results

FY2022/3
2Q Results

Progress
rate

FY2022/3
Forecasrt

YoY（announced on May 13, 2021）

188,859

223,00918.1%

470,000

Gross Profit

21,641 11.5%

27,133 12.2%

25.4%

ー

ー

ー

SG&A

17,206

9.1%

18,832

8.4%

9.4%

ー

ー

ー

Operating income

4,434

2.3%

8,300

3.7%

87.2%

13,000

2.8%

63.9%

Ordinary income

4,338

2.3%

8,452

3.8%

94.8%

12,000

2.6%

70.4%

Profit attibutable toowners of parent

10,772

5.7%

5,624

2.5%

-47.8%

8,000

1.7%

70.3%

EPS（yen）

392.30－207.39ー－

291.20－－106.92－109.80ー－

110.50－ー

Net Sales

Exchange Rate

USD

47.4%

Note: The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. wasapplied from the beginning of FY2022/3 1Q.
As a result, compared to the previous method, in this 2Q, net sales decreased by 2,358million yen.
Operating income, ordinary income, and profit before income taxes also decreased by 15million yen each.

2

Actual net sales for the second quarter of the fiscal year ending March 2022 were
JPY223.009 billion, up 18.1% YoY.
Gross profit was JPY27.133 billion, up 25.4% YoY. Gross profit margin was 12.2%, an
improvement of 0.7 percentage point from the previous year. Selling, general andadministrative expenses totaled 18.832 billion, an increase of 9.4% from the previous
year.
Operating income increased by 87.2% YoY to JPY8.3 billion. Ordinary income totaled
JPY8.452 billion, up 94.8% YoY. Profit attributable to owners of parent was JPY5.624
billion, a decrease of 47.8% from the previous year. This resulted in an EPS of 207.39.
In comparison with the earnings forecast for the fiscal year ending March 2022, which
was announced on May 13, the progress rate is 47.4% since we had announced net salesof JPY470 billion. As for operating income, we had announced JPY13 billion, so theprogress rate is 63.9%.
We had announced ordinary income of JPY12 billion, so the progress rate is 70.4%. We
had announced profit of JPY8 billion for the quarter, so the progress rate is 70.3%.

FY2022/3 2Q Results by Business Segment（million yen）

FY2021/3

FY2022/3

2Q Results

2Q Results

YoY

FY2022/3

Progress

Forecast

rate（announced on May 13, 2021）

Net sales
Electronic
Component Segment income

156,887
3,083 2.0%

7,123 3.7% 131.1%

9,900 2.5%

Information Net sales
Equipment Segment income

23,192

18,71345,000Software

OthersTotal

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

1,160 5.0%
1,274
86 6.8%7,505
36 0.5%
188,859
4,434 2.3%

194,406

23.9%-19.3%

910 4.9%
1,237
-109

ー

8,651

8,300 3.7%

48.1%
72.0%
41.6%

-21.6%

2,300 5.1%

39.6%

-2.9%

3,000

41.3%

ー
15.3%

320 3.7% 787.3%
223,009404,000

18.1%
87.2%

300 10.0%
18,000500 2.8%
470,000
13,000 2.8%

ー
48.1%
64.1%
47.4%
63.9%

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

3

I will now explain the results by segment.
In the Electronic Components business, net sales totaled JPY194.406 billion, up 23.9%
YoY. Segment income was JPY7.123 billion, an increase of 131.1%.
Sales of Information Equipment decreased by 19.3% to JPY18.713 billion. Segment
income was JPY910 million, a decrease of 21.6%.
In Software, net sales were JPY1.2 billion, down 2.9% YoY to JPY37 million. Segment
income was a loss of JPY109 million.
In Others, net sales totaled JPY8.651 billion, up 15.3% YoY. Profit was JPY320 million, up
787%.
The Electronic Components business accounts for 87% of the total sales, and theInformation Equipment business accounts for 8.4%, accounting for 95% of the total sales.

Effect of M&A (FY2022/3 2Q Results)＊ EXCEL's actual results for FY2021/3 2Q do not include results of overseas subsidiariesʼ FY2021/Jan-Mar period.

Net Sales

Gross profit / Gross profit margin
Income increased for all three companies, owing tohigher sales that led to higher income and improved
profit margin.

Sales increased for all three companies. In FY
2021/3, EXCEL's overseas subsidiaries were notconsolidated for the January-to-March period.*
188,859 ＋14,737（million yen）

＋8,520 ＋10,891

223,009+2,997＋1,540

15.1%

14.3%

8.0%
5.4%
Kaga
Electronics

Kaga FEI

Excel

2022/32Q

2021/3
2Q

Kaga
Electronics

2022/3 2QResults

SG&A / SG&A ratio

17,206
10.2%
9.1%
8.1%
5.7%
2021/3
2Q

+310

+15

Kaga FEI

7.1%

Excel

2022/32Q

2022/3 2QResults

Operating income / Operating income marjin

Although expenses increased with growth in sales,
the SG&A ratio improved for all three companies.
+1,29927,133

12.2%
9.3%

11.5%

2021/3
2Q+1,094

21,641

18,832Significant improvement in profit margin at Kaga
Electronics. Both Kaga FEI and EXCEL returned to theblack.
+1,782

10.1%+1,152+1,072

8,300

4,434
7.6%

8.4%

2.3%

3.6%
Kaga
Kaga FEI
Excel
Electronics 2022/3 2QResults

5.1%

4.2%

2022/32Q

2021/3
2Q

Kaga
Electronics

1.6%

Kaga FEI

3.3%
Excel

2022/3 2QResults

3.7%
2022/3
2Q

note :With respect to gross profit and operating income, figures presented above are before consolidation
4
adjustments between the two companies. For reference, after consolidation adjustments,
gross profit stood at -146million yen, and operating income came to -135 million yen.

I would like to explain the impact of our M&A activities with respect to the results forthe second quarter.
Net sales totaled JPY34.15 billion, a YoY increase, of which JPY14.737 billion generated
by the original Kaga Electronics Group companies, JPY8.52 billion by Kaga FEI, and
JPY10.891 billion by Excel.
Profits increased by JPY5.492 billion, of which JPY2.997 billion came from the original
Kaga Electronics Group, JPY1.54 billion from Kaga FEI, and JPY1.094 billion from Excel.
As for the profit margin, the overall gross profit margin was 12.2% for the Group, an
improvement of 0.7 percentage points compared to the same period last year. Of thistotal, the original Kaga Electronics Group accounted for 15.1%, an increase of 0.8
percentage points from the same period last year. The Kaga FEI was 9.3%, an increase of
1.3 percentage points. Excel was 7.1%, an increase of 1.7 percentage points. Therefore,
the profit margin improved for all of them.
As a result, operating income increased by JPY3.866 billion, which consisted of anincrease of JPY1.782 billion for the original Kaga Electronics Group, an increase of
JPY1.152 billion for Kaga FEI, and an increase of JPY1.072 billion for Excel.

FY2022/3 2Q Results by Company（million yen）

Kaga
Electronics

Kaga
FEI

Excel

2022/3
2Q Results

YoY

Net sales

110,535

Gross Profit

15,85314.3%

18,850

15.1%

18.9%

4,619

4.2%

6,402

5.1%

38.6%

operating income

125,272

13.3%

Net sales

59,720Gross Profit

4,784

8.0%

6,325

9.3%

32.2%

-84

-0.1%

1,067

1.6%

ー

2,103

7.1%

108.4%

966

3.3%

operating income

68,240Net sales

18,604Gross Profit

1,009

5.4%

-106

-0.6%

operating income
Total

2021/3
2Q Results

14.3%

29,495

58.5%

188,859

Gross Profit

21,641

11.5%

27,133

12.2%

25.4%

4,434

2.3%

8,300

3.7%

87.2%

operating income

223,009ーNet sales

18.1%(note) With respect to gross profit and operating income, figures presented above are before consolidation adjustments.

between the three companies.

5

On the next page, page 5, you can see a comparison of gross profit and operating
income of the 3 companies, Kaga Electronics, Kaga FEI, and Excel.

Financial Highlights: Electronic Component Segment（Million Yen）

Net sales/Segment income

YoY Net Sales+ 37,519million yen 23.9％Up
 Segment income +4,040million yen 131.1％Up

194,406

156,887
7,123

・ In the components sales business, tightsupply/demand balance of semiconductors andelectronic components persisted, but by leveraging
strength in procurement capabilities as anindependent trading company, sales increased driven
by robust demand from a broad range of industries.

・ Adjustments in the financial periods of the overseas
subsidiaries of EXCEL, acquired in the previous
fiscal year, had the effect of boosting sales.

3,083

・ The EMS business remained firm in categories suchas automotive, industrial equipment, and medical
products.

2021/32Q

2022/3
2Q

6

I will continue with an overview of the Electronic Components business.
In the Electronic Components business, net sales increased by JPY37.519 billion andincome increased by JPY4.040 billion.
This is due to the fact that while the supply and demand for semiconductors andelectronic components continues to be tight, we have been able to take advantage ofour procurement capabilities as an independent trading company to increase sales,
driven by strong demand from a wide range of industries. There was also an increase insales related to the adjustment of the fiscal year end of the overseas subsidiary of Excel,
which was acquired in the previous fiscal year.
In the EMS business, sales of products for in‐vehicle applications, industrial equipment,
and medical products continued to be strong.

Financial Highlights: Information Equipment Segment（Million Yen）

Net sales/Segment income

YoY
5000

24000

23,1924500

 Net Sales-4,478million yen 19.3%Down
 Segment income -250million yen 21.6%Down

22000

4000

20000

3500

18,713
3000

18000

2500

・ PCs to educational institutions and PC peripheral
equipment such as security software continued tosee strong sales.
・ Sales of PCs to corporate users were slow, as
remote work-related demand had run its course;
product supply problems caused by a shortage ofelectronic components also had an effect.

16000

2000

1500

1,160

14000

910
1000

・ In the LED lighting and network device installation
business, net sales declined due to extensions ofconstruction periods resulting from delayed deliveryof products and materials caused by a shortage ofcomponents.

12000

500

10000

0

2021/32Q

2022/32Q

7

Next is the Information Equipment.
Net sales decreased by JPY4.478 billion and segment income decreased by JPY250
million.
The reason for this is that sales of PC peripheral equipment, including PCs and security
software for educational institutions, remained strong. Sales of PCs to corporate
customers were sluggish, affected by a lull in demand for remote work and difficulties insupplying products due to a shortage of electronic components.
Sales in the LED lighting equipment and network device installation business declined
due to extended construction periods caused by delays in the delivery of products andmaterials due to parts shortages.

Reference

FY2022/3 2Q Financial Highlights（3months）（million yen）

FY2021/3
2QResults

FY2022/3
1QResults

FY2022/3
2QResults

YoY

QoQ

11.8%

10.5%

16.7%

0.2%

104,729

105,949

117,059

11,643 11.1%

13,550 12.8%

13,582 11.6%

SG&A

8,864

8.5%

9,098

8.6%

9,733

8.3%

9.8%

7.0%

Operating income

2,778

2.7%

4,452

4.2%

3,848

3.3%

38.5%

-13.6%

Ordinary income

2,804

2.7%

4,566

4.3%

3,885

3.3%

38.5%

-14.9%

Profit attibutable toowners of parent

2,128

2.0%

2,872

2.7%

2,752

2.4%

29.3%

-4.2%

EPS（yen）

77.53

ー

104.55ー

102.48ー－－

Net Sales
Gross Profit

8Reference

FY2022/3 2Q Results by Business Segment (3months)（million yen）

Electronic
Component

Information
Equipment

Software

Others

Net sales
Segment income

Net sales

FY2022/3

FY2022/3

1QResults

2QResults

88,6901,897

90,6242.1%

10,654

3,699

103,782
4.1%

10,636

3.3%

8,077

577

Net sales

783

568

669

Segment income

131 16.8%-67 -11.8%-42 -6.3%

Net sales

Net sales
Segment income

5.4%

4,600
137

5.3%

4,120
3.0%

104,729
2,778

568

3,423

Segment income

Segment income

Total

FY2021/3
2QResults

217

4,452

4.2%

4,530
5.3%

105,949
2.7%

342

103

2.3%

117,059
4.2%

3,848

3.3%

YoY

QoQ

17.0%

14.5%

80.5%

-7.5%

-24.2%-24.1%-40.8%-39.8%-14.5%

17.8%

ー

ー

-1.5%

9.9%

-25.0%-52.4%

11.8%

10.5%

38.5%

-13.6%

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

9Reference

Effect of M&A (FY2022/3 2Q Results) (3months）（million yen）

Net Sales

Gross profit / Gross profit margin

EXCEL was flat year on year but Kaga Electronics
and Kaga FEI drove growth in net sales

Income increased for all three companies, owing tohigher net sales and improved profit margin+ 5,547-332

117,059+7,115

11,643
14.5%

104,729

+860

+851
14.2%

9.2%

11.1%
8.0%
4.8%
2021/3
2Q

Kaga
Electronics

Kaga FEI

Excel

2022/3 2QResults

2022/3
2Q

SG&A / SG&A ratio

8,864
9.8%
8.5%
8.2%
4.1%
2021/3
2Q

+34

-122

8.3%
3.4%

Kaga FEI

Excel

2022/3 2QResults

Excel

2022/3 2QResults

9,733

10.2%

Kaga
Electronics

Kaga FEI

11.6%
6.5%

2022/3
2Q

Kaga FEI returned to the black. Income increased,
as the profit margin continued to improve.
+787
2,778

7.1%

Kaga
Electronics

13,582

Operating income / Operating income marjin

Despite cost increases due to higher sales at Kaga
Electronics, the consolidated SG&A ratio declined+956

2021/32Q+245

2022/3
2Q

4.7%

4.1%

2.0%

2.9%

Kaga
Electronics

Kaga FEI

Excel

2.7%
0.6%
2021/3
2Q

+367

3,848

-66

2022/3 2QResults

3.3%

2022/3
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 -20million yen, and operating income came to -14 million yen.

10

Reference

FY2022/3 2Q Results by Company (3months）（million yen）

Kaga
Electronics

Kaga FEI

2022/3
2QResults

60,11565,157

YoY

QoQ

12.3%

8.4%

Gross Profit

8,410 14.5%

9,588 16.0%

9,261 14.2%

10.1%

-3.4%

operating income

2,749

3,719

2,683

-2.4%

-27.9%

18.2%

12.3%

4.7%

6.2%

32,145

4.1%

Net sales

30,548Gross Profit

2,455

8.0%

3,009

9.4%

3,316

9.2%

35.0%

10.2%

-65

-0.2%

346

1.1%

721

2.0%

ー

108.0%

-2.1%

15.5%

16,139Net sales
Gross Profit
operating income
Gross Profit
operating income

36,095

13,68815,807

779

4.8%

1,079

7.9%

1,024

6.5%

31.5%

-5.1%

91

0.6%

507

3.7%

458

2.9%

401.6%

-9.6%

11.8%

10.5%

104,729

Net sales
Total

2022/3
1QResults

58,041

Net sales

operating income
Excel

2021/3
2QResults

105,949

117,059

11,643 11.1%

13,550 12.8%

13,582 11.6%

2,778

4,452

3,848

2.7%

4.2%

3.3%

16.7%

0.2%

38.5%

-13.6%

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

11Refelence

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

Net sales/Segment income/

120000/YoY

Net Sales
Segment income
103,782

 Net Sales+15,091million yen
 Segment income +1,526million yen
8000

17.0％Up
80.5％UP

7000

10000090,62488,6906000

QoQ

 Net Sales+13,158million yen 14.5％Up
 Segment income -276million Yen 7.5％Down

80000

5000

3,699

60000

4000

3,423
3000

40000

1,897
2000

20000

1000

0

0

2021/32Q

2022/3
1Q

2022/32Q

12

Refelence

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

Net sales/Segment income

16000

YoY
 Net Sales-2,577million yen 24.2％Down-235million yen 40.8％Down/

Net Sales/

Segment Income  Segment income

4000

3500

14000

QoQ
3000

-2,558million yen 24.1％Down
 Net Sales Segment income -226million yen 39.8％Down

12000

10,654

10,636

2500

10000

2000

8,077
8000

1500

6000

1000

577

568
342

4000

2000

500

0

2021/32Q

2022/3
1Q

2022/3
2Q

13

Pages 8 to 13 show a side‐by‐side comparison of the actual results for the second
quarter and the first quarter on a 3‐month basis. The leftmost figure is for the same
period of the previous year.

Balance Sheet Main Items（million yen）

Total assets
237,004

Total liabilities and net assets
237,004

233,461

207,638

233,461

207,638

200,179

196,245

Current assets

141,942

136,843

95,062

96,6182021/32021/9Total liabilities

121,388

174,331

86,25033,30636,82537,2152020/32021/32021/9Total net assets

Non-current assets

2020/314

Please go to page 14 and I will explain the balance sheet.
Total assets amounted to JPY233.461 billion, a decrease of JPY3.543 billion compared tothe previous fiscal year ended March. Current assets totaled JPY196.245 billion, adecrease of JPY3.924 billion. Fixed assets totaled JPY37.215 billion, an increase of
JPY390 million.
Liabilities and net assets. Total liabilities amounted to JPY136.843 billion, a decrease of
JPY5.099 billion. Net assets were JPY96.618 billion, an increase of JPY1.556 billion.

Balance Sheet Main Items（millon yen, day）

Inventories

Accounts receivable/Accounts payable
160,000

93.7
42.0

70,00026.3

A/R turnover

50.0

32.8

90.0

Inventory turnover

140,000

79.3

75.2
79.8

60,00070.0

A/P turnover

120,000

51,16964.6

0.0

108,394

100,000

91,37150.0

79,85437,94840,00061.4

96,65250,00030.080,00031,90870,48670,188Notes and A/R‐50.0

30,00010.0

60,000Inventories

Notes and A/P‐10.0

20,00040,000‐100.0‐30.0
10,00020,000‐50.0

00‐150.02020/32021/32021/9

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

2020/32021/32021/9notes︓・Notes and A/R are amounts including Electronically recorded monetary claims‐operating
・A/R turnover ＝ Notes and A/R ÷ Net sales × 365(2021/9:183)（day）
・A/P turnover ＝ Notes and A/P ÷ Total purchase of goods ×365(2021/9:183) （day）
15

The next item is inventories.
The balance at the end of September was JPY51.169 billion, a significant increase of
JPY13.221 billion in inventories compared to the previous fiscal year ended March.
The main reason for this was the buildup of inventory at EMS’s overseas factories,
mainly due to the shortage of electronic components. As a result, the inventory turnovertime has been extended by about 10 days to 42 days.
Next, accounts receivable and accounts payable. The balance of notes and accounts
receivable‐trade at the end of September was JPY96.652 billion, a decrease of JPY11.742
billion compared to the previous fiscal year ended March.
Notes and accounts payable‐trade totaled JPY70.486 billion, a decrease of JPY9.368
billion from the previous fiscal year ended March.
As you can see in the line graph above, the turnover period for accounts receivable was
79.3 days and that for accounts payable was 61.4 days, both of which decreased
significantly compared to the previous fiscal year ended March and have returned tonormal.

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

Cash and Deposits/Interest Bearing Debt
0.37

0.42

（times）

0.48
0.50

D/E ratio

0.04

60,000-0.19

Cash flows

-0.08

0.00

Net D/E ratio

50,00043,38445,63644,223‐0.50

40,191
38,26140,000Interest bearing debts

22,406

Cash and deposits

Cash flows fromfinancing activities

9,999

‐1.00

28,73630,000529‐1.50-3,651

20,000-2,453‐2.00-7,544-6,851-2,013-3,699Cash flows fromoperating activities
Cash flows frominvesting activities

10,000
‐2.50

‐3.00

0

2020/32020/32021/32021/9

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

2020/32021/32021/32020192021/9

Shareholderʼs equity

16

Next, I will explain about cash and deposits and interest‐bearing liabilities.
The balance of cash and deposits at the end of September was JPY40.191 billion. The
total amount of interest‐bearing debt was JPY44.223 billion.
As a result, the net D/E ratio turned positive at the end of September. However, thenumber is almost 0. Interest‐bearing debt and the debt‐to‐equity ratio were 0.48.
Next is the statement of cash flows.
Operating cash flow was JPY2.013 billion. In the explanation of the financial results, it isstated that corporate tax burden, but in reality, the profit has turned into an expenditure
due to the increase in inventory that I mentioned earlier.
As for investment cash flow, JPY3.699 billion was used for the purchase of tangible andintangible fixed assets.
As for financial cash flow, we earned JPY529 million. This is due to an increase in loans
payable, repurchase of treasury stock, and payment of dividends.

Forecast for the Fiscal Yearending March 2022

17

Forecast for FY2022/3（million yen）

FY2021/3
Results

FY2022/3
Initial Forecast

FY2022/3
Current Forecast

Management
YoY

Targets FY2022/3

ー

11.3%

500,000

Changes（announced on May 13, 2021）

Net sales

422,365

470,000

470,000

Operating income

11,4672.7%

13,0002.8%

15,000

3.2%

15.4%

30.8%

13,0002.6%

Ordinary income

11,241

2.7%

12,0002.6%

14,500

3.1%

20.8%

29.0%

ー

ー

Profit attributable toowners of parent

11,399

2.7%

8,000

1.7%

9,000

1.9%

12.5%

-21.1%

ーー

EPS

415.07291.20336.84ーー-18.8%

ー

ー

ROE

13.5%

8.5%

9.7%

ー

1.2pt

-3.8pt8.0%
or higher

Note: The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. isapplied from the beginning of FY2022/3 1Q, and thus the above consolidated earnings forecasts are
figures after this accounting standard, etc. has been applied.

18

Next, I would like to explain our earnings forecasts for the fiscal year ending March 2022.
Based on the results for this second quarter, we have revised our year‐end earnings
forecast.
Net sales will remain unchanged at JPY470 billion. Operating income has been revised
upward by about JPY2 billion to JPY15 billion.
Ordinary income has been revised upward by JPY2.5 billion to JPY14.5 billion. We havealso revised upward our profit attributable to owners of parent by about JPY1 billion to
JPY9 billion.
As a result, EPS was JPY336.84, and we also announced a dividend increase of JPY5 eachfor the second quarter and year‐end. Based on this forecast, ROE is expected to be 9.7%.

Forecast for FY2022/3
Upward Revision of Operating Income（million yen）

Risk factors inearnings fluctuations+1,80013,000+700

KagaFEI
Kaga
Electronics

First-half upside
3,000
InitialForecast

+500

Excel

<Upside risks>- Robust demandenvironment- Favorable earnings
momentum<Downside risks>- Opportunity loss due
to tight components
supply- Surge in crude oil
prices, rise intransportation costs

Not incorporated

15,000-1,000

Second-half downside risk
-1,000Current
Forecast

19

As for the breakdown of the upward revision of the operating income forecast, theupward revision for the first half includes JPY1.8 billion for Kaga Electronics Group,
JPY700 million for Kaga FEI, and JPY500 million for Excel, for a total upward revision of
JPY3 billion for the first half.
However, due to the severe shortage of components, we have factored in about JPY1
billion in downside risks in the second half of the fiscal year, such as opportunity losses,
soaring crude oil prices, and rising transportation costs, resulting in an upward revisionof JPY2 billion in operating income.

Forecast for FY2022/3 by Business Segment（million yen）

FY2021/3

FY2022/3

FY2022/3

Results

Initial Forecast

Current Forecast

Net sales
Electronic
components Segment income

353,454

Information Net sales
equipment Segment income

48,389Software

OthersTotal

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

8,151
2,482

（announced on May 13, 2021）

404,000

2.3%

5.1%

9.0%

2,000

5.1%

300

2.7%

500

200

10.0%

13,0006.7%

18,000500

2.8%

470,000
2.7%

5.0%

3,000

18,000422,365
11,467

2,300

3.0%

40,0003,000

17,589474

12,3002.5%

45,000

2,932
263

9,900

409,000

2.8%

470,000
2.8%

15,0003.2%

Changes

YoY

1.2%

15.7%

24.2%

50.9%

-11.1%-17.3%-13.0%-19.4%

ー

2.3%-33.3%-24.0%

ー

2.3%

ー

5.5%

ー

11.3%

15.4%

30.8%

Note: 1. Figures of each segment income are not inter-segment adjusted. Total amount is inter-segment
adjusted (operating income).
2. The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. isapplied from the beginning of FY2022/3 1Q, and thus the above consolidated earnings forecasts are
figures after this accounting standard, etc. has been applied.

20

Finally, here is a breakdown of the forecast by segment.
In the Electronic Components business, we had previously announced that sales would
be JPY404 billion, but we have revised this upward by JPY5 billion to JPY409 billion. As
for segment income, we have revised it upward by JPY2.4 billion from JPY9.9 billion to
JPY12.3 billion.
As for the Information Equipment, we have revised sales downward by JPY5 billion to
JPY40 billion based on the results of the first half of the fiscal year. Segment income isexpected to be JPY2 billion, down JPY300 million.
As for the Software, sales are expected to remain unchanged, but the profit forecast has
been revised downward by JPY100 million to JPY200 million. As for the Others, there will
be no changes.
As a result of the above, net sales are expected to remain unchanged at JPY470 billion,
and income is expected to increase by JPY2 billion to JPY15 billion.
With this, we will conclude the presentation on the financial results for the second
quarter of the fiscal year. Thank you very much.

Appendix

21

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

 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
22Reference

Business segments of Parent company andGroup companies
Electronic
Components

EMS

CSI

Others

●
●
●
●

(●)

●

●
(●)

(●)
●

(●)
●

(●)
●
●

(●)
●

●

(●)

●
●
●
●

KAGA ELECTRONICS CO., LTD.
Electronics Business Division
EMS Business Division
Communication Network Sales Division
Specific Industry Business Division
Sales Promotion Division

●
●
●
●

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

●
●
●

●
●
●
●
●

Major Affiliates 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.

(●)

●
●
(●)
●
●
●
●

●
●
●
●
(●)
●
●
●
●
(●)
●
●
●

(●)

23

Reference

FY2022/3 2Q Results 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

FY2021/3

FY2022/3

2Q Results

2Q Results

117,287851

1,160

Net sales

5,438

Net sales
Segment income

0.7%

88

5.3%

2.7%

3,322

5.0%

910

6.2%

64

4.9%

8,300

-21.6%
11.3%

1.1%

223,009
2.3%

46.6%-19.3%

6,052
1.6%

363.4%
24.5%

18,713

188,859
4,434

3,948

23.4%

53,45323,192

Segment income

Segment income

144,790

42,9402,265

YoY-26.8%
18.1%

3.7%

87.2%

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

24Reference

FY2022/3 2Q Results 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

2Q Results

1Q Results

2Q Results

67,547807

Net sales

23,120

Segment income

1,181

Net sales

10,654

Segment income

577

66,124
1.2%

Segment income

177

5.1%

Segment income

2,778

2,060

5.4%

568

7.8%

14

5.3%

4,452

1,262

4.7%

342

4.2%

3,198
0.5%

105,949
2.7%

2.8%

8,077

2,854
5.2%

2,172
27,118

10,636

104,729

Net sales

2.7%

26,334

3,406

Net sales

1,775

78,66549

1.6%

117,059
4.2%

3,848

3.3%

YoY

QoQ

16.5%

19.0%

169.2%

22.4%

17.3%

3.0%

6.8%

-38.7%-24.2%-24.1%-40.8%-39.8%

-6.1%

12.0%

-71.8%

245.0%

11.8%

10.5%

38.5%

-13.6%

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

25Quarterly Net Sales Trends by Business Segment（million yen）

Net
売上⾼
Sales
Total

128,099

104,729
84,1304,600
783
10,654105,406

5,969
927
14,451

4,114
730
10,745

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

4,530
669
8,077

2,904
491
12,537

YoY
QoQ

︓ +12,330
︓ +11,110

Othe
YoY ︓

-70

QoQ ︓

+409

Software
YoY
QoQ

106,750
88,690103,782
90,62489,816

68,196︓︓Information equipment
YoY
QoQ

︓
︓

-2,577-2,558

Electronic equipment
YoY ︓
QoQ ︓

2021/3
1QResults

-113
+101

2021/3
2QResults

2021/3
3QResults

2021/3
4QResults

2022/3
1QResults+15,091+13,1582022/3
2QResults

26

Quarterly Segment income Trends by Business Segment（million yen）

Segment Income

4,606

3,950
325

3,082
2,778
137
131

1,656

112
20

4,452

103

217

342

568

+1,850
+176

YoY
QoQ

︓
︓

Other

728

-34
-113

Information equipment

577

4,203
3,699

2,335

︓
︓

156

592

583

Total
YoY
QoQ

YoY
QoQ

︓
︓

-235
-226

Electronic equipment

2,732

YoY
QoQ

︓ +2,306
︓
+503

YoY
QoQ

︓
︓

1,897
Software

1,185
-44
-101

2021/3
1QResults

2021/3
2QResults

2021/3
3QResults

2021/3
4QResults

-67

-42

2022/3
1QResults

2022/3
2QResults

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

-173
＋25

27

Quarterly Net Sales Trends by Region（million yen）

Net Sales
128,099
117,059
104,729

105,406

105,949
Total

84,130

YoY
QoQ

︓
︓

+12,330+11,110

YoY
QoQ

︓
︓

72,14258,143

55,101

61,266

56,619Japan+3,122+6,164

North America

53,334
3,827
4,687
7,419
1,894

38,070

6,175
3,573

39,038

5,276
3,467

47,212

7,454
3,915

39,4778,721

2021/3
2QResults

2021/3
3QResults

2021/3
4QResults

2022/3
1QResults

︓ ＋4,894
︓ ＋1,266

YoY
QoQ

︓
︓

YoY
QoQ

︓ +4,699
︓ +3,292

4,301
Europe42,77021,4822021/3
1QResults

YoY
QoQ

-386
+386

Asia

2022/3
2QResults

28

Exchange Rate/FOREX Sensitivity（Reference）
Effect of 1% change（million yen）

Forex
assumption
for FY2022/3

FY2021/3
2Q Results

FY2022/3
2Q Results

Net Sales

USD

106.92109.80588

18110.50

THB

3.38

3.42

115

7

3.50

RMB

15.39

16.66

112

4

17.00

HKD

13.80

14.13

107

3

14.00

（yen）

（yen）

Ordinary
income(yen)

29

“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.