2023
2021 - 2023

Management Briefing Material

KAGA ELECTRONICS
TSE Prime Market 8154

November, 2023

INDEX Introduction

P- 3 ~ 9

 Corporate Profile

P-11 ~ 18

 Medium Term Management Plan 2024 P-20 ~ 26 Electronic components Business

P-28 ~ 30

 EMS Business

P-32 ~ 40

 Medium- to Long-Term
Sustainability Management Plan

P-42 ~ 47

 Consolidated Financial Results
for the First Half of the
Fiscal Year ending March 2024

P-49 ~ 65

 Forecasts for FY2024/3

P-67 ～ 69 References

P-70 ～ 73

Introduction

Sustainable profit growth
KAGA Electronics will realize “sustainable profit growth”
with “organic growth + strategic M&As + PMI” as growth drivers,
anticipating further industry consolidation.
Net sales (by Company)

Gross profit / Gross profit margin(million yen)

■KAGA ELECTRONICS■KAGA FEI■KAGA FEI

■EXCEL■EXCEL

608,064
60,481495,827443,615422,365

65,29613.6

12.1
199,548

6.0

13.7

10.6
6.8

200,584

7.8

2020/39.8

243,8972021/3

281,075

2022/32023/335,546
3,411

13,70847,9452,365
10,30732,13533,29835,273

2019/32020/32021/3

(%)

15.3

12.9
10.5
7.3

(million yen)

78,51460,54747,016

243,03112.2

6.5

131,932

348,034

2019/3

11.3

14.9

149,455

57,090235,689

14.5

5.1

46,535

292,779■Total■KAGA ELECTRONICS

4,247

4,443
20,913

14,69041,7672022/353,1232023/3

3

Profit-focused management
KAGA Electronics is not just an electronic components trading company.
It is a general electronics trading company engaged in high value-added businesses,
including EMS, based on “profit-focused management.”
Net sales（by Segment）■Electronic Component
■EMS
■CSI
■Others443,615

292,779(million yen)

608,064

495,827

13,902

422,365

43,466

12,057
48,38993,34013,912
44,344

Operating income / Operating income margin

12,552
39,616

15,73943,6804.3
3.0

149,862

2.6
1.6

117,828

4.5
4.3
3.9

2.3
1.2

5.3

5.1

4.2

(%)

6.4
5.6

5.3
4.9

4.2

3.2
3.4

2.7

2.0

1.1

20,91599,599(million yen)

32,249
663
2,449
9,563

255
2,085

398,783

89,481
292,905

325,8302021/32022/32023/3

11,467
387
2,482

4,015

5,539

2,278

3,553

3,056

2019/32020/32021/3

554
1,906
2,667

2020/3

10,014
623
1,707

7,570

262,318

145,042

2019/3■Electronic Component■Total
■EMS
■CSI
6.2
■Others
5.6

7,356
19,475
11,2162022/32023/3

4

Management focusing on capital efficiency
KAGA Electronics practices business management
focusing on the cost of equity and capital efficiency.
※ROE：19.6% ＞ Cost of Equity：8.1%
ROIC：13.0% ＞ WACC：5~6%

ROE

ROIC・ROA■ROE(%)

19.6
13.5

10.9

■ROIC (%)■ROA (%)

15.7

13.0

■Total asset turnover

7.6■Financial leverage

10.4■Net profit margin

1.9

1.4
2.1
2.8

2.6

1.9
2.6

2019/3

1.3
2020/3

2.4

5.8

6.3

2.7

3.1

2021/32022/33.82023/3

6.9

8.3
6.1

5.1

4.7

2.7

2.7

2.2

2.8
2019/32020/32021/32022/32023/35

Proactive return to stakeholders
Inheriting the founder’s spirit that “profits are to be shared,”
KAGA Electronics implements profit distribution and return to stakeholders proactively.

Labor share
120,000

66.6

66.6

Dividend per share & Total dividends

65.2

70.0

(%)

57.1

■ Tax and dues

100,000■ PayrollLabor share

40.0

60,51760,000Operating
Income46,78730,487

34,57140,050

20.0

Payroll

20,00010.0

2019/32020/32021/32022/32023/3

2,195

2,197

1,921

0.0

(Up ¥10 per share)

5
5

¥70

¥80

(Up ¥40 per share)(Up ¥10 per share)（Down ¥10 per share）

10

20

70

60

60

2019/32020/32021/3¥220(Up ¥100 per share) 3000

¥120
¥80

7000
5000

3,149

30.0

Added
Value

43,7420

5,777

Total amount of dividends

77,91650.0

80,000■ Operating Income

33,595
29,13522,377(million yen)

■ Ordinary dividend(million yen)

■ Depreciation

40,0009000■ Commemorative dividend

57.1 60.0■ Rent expense■ Extraordinary dividend

70
10

40

-1000
-3000

140
80
2022/31000

2023/3

-5000
-7000

6

Industry Positioning
2019/3

Net Sales

Operating Income（million yen）

（million yen）
A Company

1,029,263

KAGA ELECTRONICS

487,129

E Company
C Company

A Company

61,646KAGA ELECTRONICS

608,064

B Company

2023/3

417,621
325,657

32,249C Company

15,423B Company

14,423

D Company

14,227Net Income

ROE
（％）

（million yen）
A Company

41,030KAGA ELECTRONICS

23,070

D Company

25.5

A Company

22.2

C Company

9,224

KAGA ELECTRONICS

F Company

8,929

G Company

17.5

D Company

8,778

H Company

17.0

19.6

Note: DAITRON figures for FY ended December 2018
and FY ended December 2022

7

Form fair value and enhance corporate value
KAGA Electronics actively engages in IR activities, aiming at formation of fair value andfurther enhancement of corporate value.

Changes in stock price/trading volume
5,000,000

8,000
Volume4,500,000

Changes in PER
30.0
25.0

Price

TOPIX

Wholesales trade(times)

KAGA

20.0

6,000

4,000,000

15.0
10.0

3,500,000(stock)4,000

3,000,000
2,500,000

5.0
0.0
Apr-18Apr-19

2,000
(yen)

1,500,000

Apr-21

Apr-22

Apr-23

Changes in PBR

2,000,0000Apr-20

2.00(times)TOPIX

Wholesale trade

KAGA

Apr-21

Apr-231.50

1,000,000-2,000500,000
0

1.00
0.50

Apr-18Apr-19Apr-20

Apr-21

Apr-22-4,000

Apr-230.00
Apr-18Apr-19Apr-20

Apr-228

Shareholders Information
Number of individual shareholders

Shareholder Composition（％）
treasury stock
Foreign Corporations
Other Japanese Corporations
Financial Instruments Business Operators
Financial Institutions
Individuals

4.42

4.36

4.33

4.28

19.02

18.60

19.09

16.06

29.28

29.18

27.38

1.29

0.53

1.07

26.37

26.59

19.62

20.74

27.27

8.54

22.88

21.70

14.28

0.86

26.62

30.89

30.43

21.51

20.38

19.65

9,227

6,600

8.49

18.82

1.12

（Persons）

5,795

5,961

5,857

2019/32020/32021/3

2.02
29.39

22.94

2018/3 2019/3 2020/3 2021/3 2022/3 2023/3

2022/32023/39

Corporate Profile

Corporate Outline
An independent trading company for general electronics with
one-stop services
Company Name:KAGA ELECTORONICS CO., LTD.

Representatives:

Founder & CEO: Isao TSUKAMOTO
President & COO: Ryoichi KADO

Head Office:20 Kanda matsunagacho,
Chiyoda-ku Tokyo 101-8629, Japan

Established:

September 12, 1968

Paid-in Capital:

JPY12,133 million

Stock listing:Prime Market, Tokyo Stock Exchange（securities code: 8154)

Number of
63 Companies（as of April 1, 2023）
Group Companies:
Number of
Employees:

Founder & CEO
Isao TSUKAMOTO

President & COO
Ryoichi KADO

8,092 （FY ended March 2023 ）11

Corporate Philosophy“Everything we do is for our customers” – Since Kaga Electronics was founded,by intently listening to the voices of our customers and earnestly catering totheir needs, we have expanded our business domain to include our EMS
business, which includes everything from kitting to processing andmanufacturing electronic components and semiconductors, and our
information equipment business, which conducts sales of finished products.
Going forward, we will continue to aim to be Japan’s No. 1 corporate group in
the industry and become a competitive World-Class company.

Corporate
Philosophy

VisionEverything we do is for our customers
Aim to be “Japan’s No.1 corporate group in the industry”
Aim to become a competitive “World Class Company”“F.Y.T.” : Flexibility, Young at heart, Try

Action Guidelines“3G” : General, Global, Group“KAGA-ism”: Management mindset,
Sales mindset,
Readiness as a member of society
12KAGA-ism（Behavior Guideline）
There have been many sayings supported by the experiences of the founder and our forebears
since the company’s foundation, and these should be treated as treasures. They are our DNA
that we will carry into the future as a foundation for our actions to overcome daily competition.

Three Pillars

Basic Principle

1. Mindsets as a manager

1-1. Be a manager with a grand dream and a strong will

Behavior with the awarenessof “being one of the
managers”

2. Mindsets as a salesperson

Awareness and behavior asa “trading company employee
or businessman”

3. Mindsets as a memberof society

Awareness and behavior inproceeding with business asa member of society

1-2. Cultivate a hungry spirit to continue
challenging yourself in everything that you do
1-3. Act first with high ambition
2-1. Make TAXAN (much) effort to gain TAXAN (a large)
profit, and become TAXAN (very) happy
2-2. Personal connections are intangible assets
2-3. Always be curious
3-1. Self-improvement
3-2. Reward good work and punish bad work
3-3. Be fair and upright13

HISTORY
New technologies. New products.
Always listening to the voice of the times.
We grew together with the electronics industry.
Kaga Electronics has continued to grow, driven by our keen ability to rapidly sense changes in the times. This ability has ensured
our consistent growth in an era of accelerating technological innovation. In more recent years, we have been proactive in efforts
to create new businesses. With the information-gathering ability and sales network that we have cultivated over our long history
as our foundation, we will continue to evolve towards unlimited possibilities, pushed ahead by unique ideas and unrestricted byour existing businesses.
Aiming for sales exceeding（billion yen）

1,200
1,100
1,000
900
800
700
600
500
400
300
200
100
0

¥1 trillion
Aiming for sales exceeding¥750 billion

Net sales exceed¥250 billion

Net sales exceed

Net sales exceed¥10 billion

Transitioned to the Prime Market of the TSE.

Net sales exceed¥50 billion ¥100 billion

Stock listed on the TSE 2nd Section

Promoted to the TSE 1st Section

1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2028

Arrival of Space
Established at Soto-Kanda,
Chiyoda-ku, Tokyo, with Invaders games boom
capital of ¥1 million

Launch of KG-12,
an own brand monitor
for Apple

Commencement ofhome video gamebusiness

Establishment of the firstown factory
KAGA (SHENZHEN)

Establishment of
KAGA (THAILAND)

Establishment of
TAXAN MEXICO

Completion of KAGA MICROSOLUTION’s
Fukushima Factory

１９６８

１９７８

１９８１

１９８３

１９９９

２００２

２０１７

２０１９

１９７３

１９８１

１９８３

１９９２

２０００

２００９

２０１９

２０２８

Arrival of
CB transceiver boom

Establishment of
TAXAN USA

Launch of TAXAN RGB
VISION,an own brand monitor

Establishment of
KAGA (H.K.)

Establishment of
KAGA COMPONENTS(MALAYSIA)

Establishment of
KD TEC in the
Czech Republic

KAGA FEI(former FujitsuElectronics) becomesconsolidated subsidiary

Aiming for sales
exceeding ¥1 trillion

14

Earnings Trends Over Past 10 Years
Management with an emphasis on profit has taken root in the Group since 2014, resulting in
an improvement in both operating income and the operating income margin.
The Company has aggressively carried out M&A since 2016, shifting to a growth trajectory.
We aim for an ongoing increase in revenue.

10,0009,000

1,000.0

Net Sales

5.3 %Operating income
2.6%

8,000
7,000
6,000

2.5%

2.0%

3.2%

3,000

3.0%

(billion yen)
255.1

245.3

1,000
0

5.1

2014

6.3

2015

7.7

6.8

8.1

0

495.8
30.0

422.3

or higher

32.2

-3

20.9

7.5

10.0

-1
-2

25.0

2,000

3

1

550.0

443.6

4

2

608.0

292.7

235.9

227.2

750.0

3.4%

Acquisition of
Fujitsu Electronics(currently Kaga FEI)

257.8

2.3%

5

4.5

2.7%

Acquisition of
EXCEL

5,000
4,000

6

4.2%

Operating income marjin

(%)

-4

11.4

-5
-6

2016

2017

2018

2019

2020

2021

2022

2023
2024
(Forecasts)

2025
2028
(Target) (Target)-7

15

The Group’s Strength‐①：Business Domain
Electronic part and Semiconductors

EMS

Sales agent activities for general electronic
components and semiconductors for customers
in Japan and worldwide

Providing total support for design, development,
and manufacture of products ranging from semifinished to finished products

Information Equipment

New Businesses

Supplying PCs and peripherals to domestic andinternational distribution channels, and serving
the network solutions field

Development, manufacture, and sale ofamusement-related products and software

Sales composition ratio

2.6%
65.6%

24.6%

7.2%
16

The Group’s Strength‐②：Global Network
Global EMS production system with 20 bases in 10 countries to respond swiftly andflexibly to customer needs.
∎ Production base：Shengzhen, Shanghai, Suzhou, Hubei∎ Sales base：Hong Kong, Shanghai, Dalian∎ Production： Czech, Turkey

China∎ Sales： Germany

Europe∎ Production base：Towada, Yamagata, Fukushima,
Niigata, Tokyo, Tottori∎ Sales base
：Tokyo, Nagoya, Osaka, etc

GermanySuzhouDalian
Korea
Dongguan
Shengzhen
ShanghaiHong Kong
TaiwanIndia Thailand Vietnam
Philippines
Malaysia
Hubei

TurkeySan Jose

ASEAN
Production base

ChicagoBostonMexicoIndonesia

Sales base

∎ Sales base
：San Jose, Chicago,
Boston, Los Angeles

The Americas

Japan

Czech

∎ Production base：Mexico∎ Production base：Thailand, Malaysia,
Indonesia, Vietnam, India∎ Sales base
：Korea, Taiwan, Hong Kong,
Singapore, Thailand, India
17

The Group’s Strength‐③：One-Stop Service
Not just contract manufacturing but offer one-stop service from sales toafter-sales support
Planning/Design/
Development

Components
Procurement/Kitting

EMS/Contract
manufacturing

Sales/Distribution

KAGA ELECTRONICS

Support/After-sales service

KAGA TECHNO SERVICE

KAGA DEVICES

KAGA MICRO SOLUTION
KAGA SOLUTION NETWORKKAGA AMUSEMENTAD DEVICE

DIGITAL MEDIA LAB

KAGA TECHKAGA SPORTS

EXCEL

EXCEL

KAGA AMUSEMENTKAGA EMS TOWADA/Kyokuto Electric

KAGA AEROSYSTEMSKAGA FEIKAGA FEI AMERICAKAGA (TAIWAN)
KAGA FEI (DALIAN)

TAXAN MEXICOKAGA COMP(MALAYSIA)KAGA (Shanghai) / KAGA (H.K.)
KAGA (THAILAND)/KAGA(VIETNAM)
KAGA (SINGAPORE)

KAGA（INDIA)KDTEC（Czech）/ KDTEC（Turkey）
18

KAGA’s Growth Scenario

Medium Term Management Plan 2024
(Extract from materials published on November 25, 2021)

Medium-Term Management Plan 2024：Summary
JPY 1 tn

Aim to become a competitive “World classcompany”
Aim to be “Japan’s 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

Qualitative improvement
through EMS business

Reinforcement and expansion of overseas business, EMS business

MedicalHealth care

（Net Sales）

Medium-Term Management Plan 2024
Further reinforcementof profitability

Reinforcement ofmanagement basePromotion of new
businesses

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

20

Medium-Term Management Plan 2024 : Targets
Initial plan

Latest outlook(Announced on November 25, 2021)（Announced on May 11, 2023）

FY2022~FY2024
JPY 750 bn

Organic growth: JPY 600 bn

Including new M&As: JPY 150 bn

JPY 20 bn

stable8.5% or higher

Planned year

[No change]

Net Sales[No change]

Operating
IncomeJPY

ROE

stable30 bn or higher
10% or higher
21

Medium-Term Management Plan 2024: Basic Policy
Basic policy and key issues/actions

Further
Reinforcementof Profitability

Predicting the era to focus on markets
with potential for high growth andprofitability

Reinforcementof Management
Base

Pursuit of further efficiency andsoundness, and transformation toa Group management foundation
worthy of "Japan’s No. 1 corporategroup in the industry"

Creation of New
Businesses

Active use of venture investments andM&As to create new businesses andstrengthen resistance to change inthe external environment

Promotion of
SDGs
Management

Promotion of management that seeks toachieve solutions to social issues andsustainable growth as a company• Selection and concentration in growth fields:
Mobility, Communications, Environment,
Industrial equipment, Medical/Health care
• Reinforcement and expansion of EMS
business and overseas business• Reinforcement of corporate governance• Efficient Group management• Investments in human capital• Initiatives in new fields• Promotion of open innovation throughventure investments• M&A efforts aimed at discontinuous growth(See “Medium-Term Sustainability Management
Plan” for details)

22Medium-Term Management Plan 2024：Business Portfolio*CSI: Consumer & System Integrator

Electronic Componens

EMS

CSI

Others（Excluding new M&A）
Net sales：7%

1,000

CAGR

Initial plan

CAGR

Net sales：20％
Net Sales：19％

JPY443.6bn
13.9
400

200

60

JPY750bn

800

600

Net Sales: 15％
Operating Income: 13％

70

JPY292.7bn
13.9

43.5

; Operating income：20％

Operating income：41％
JPY422.3bn
12.1

JPY495.8bn
12.5

48.4

93.3

99.6

44.3
JPY10.0bn
JPY7.5bn 292.9

89.5
145.0

JPY11.4bn
262.3

39.6
117.8
JPY20.9bn

325.8

New M&As
150.0

50

16.0
54.0

40

150.0
JPY30bnor higher

30
20

380.0
10

0

0
FY2018Results

FY2019Results

FY2020Results

FY2021Results

Medium-Term Management Plan 2021

FY2024
Management Targets
Medium-Term Management
Plan 2024

23

Basic Strategy for Four Major Businesses
FY2024 sales targets

Electronic
Components
Business

EMS
Business

CSI
Business

Other
Business

JPY 380 bn

JPY 150 bn
JPY 54 bn
JPY 16 bn

Priority measures• Expansion of industrial equipment business• Rollout of new products in vehicular markets• Enhancement of products in communications
field• Reinforcement and expansion of customer base• Shift in value chain to high value-added areas• Reinforcement of business base• Acquisition of new products/suppliers and newsales channels• Promotion of collaboration within Group andintegration of overlapping organizations• Review of unprofitable businesses• Creation of new businesses through venture
investments and M&As
24

A Sound Financial Foundation to Support Growth Strategies
Borrowing capacity▲ Net D/E ratio:▲ Cash position:- 0.08 times

JPY 52.6 bn▲ Commitment line: JPY

15 bn*End of March 2023

Capital efficiency▲ ROE: 19.6% ＞ Cost of shareholders’equity 8.1%

Cash generation ability▲ Total 3-year operating cash flow: JPY 39.0 bn*FY2020–FY2022▲ Use of cash: ① Growth investments② Shareholder returns③ Repayment of borrowing

Stability and credit rating▲ Equity ratio :*End of March 2023

Assumptions for calculations①Risk-free interest rate ：0.5%/10-year Japanese
government bond
②Market risk premium ：5.4%/TOPIX yield③β (beta)：1.4%/Five-year, monthly

45.3%▲ Bond rating :A (Stable)*Japan Credit Rating Agency, Ltd. (JCR)*FY2022 results

25

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%

25.6%

32.8%

29.6%

28.6%
24.1%

■ Commemorative
dividend

Acquisition of treasury shares(JPY 3,674 mil)

20.8%

19.3%

Total return trend：45.4%
Acquisition of treasury shares(JPY 1,499 mil)

※Including negative goodwill
about JPY8 bn

25.0%

25%

JPY220 JPY220
70■ Special dividend

JPY35 JPY40

32.1%(Forecast)

27.4%

Dividend payout ratio■ Ordinary dividend

35%

Total return trend：44.3%

JPY55

JPY60

5
30

10
30

15
40

20

FY2013Results

FY2014
Results

FY2015Results

FY2016
Results

40

JPY70

JPY80

60

5
5
70

FY2017
Results

FY2018Results

10

JPY70

JPY80

10

20

60

60

FY2019Results

FY2020Results

JPY120

10

40

220

140
80
FY2021Results

FY2022
Results

FY2023
Forecasts

26

KAGA ELECTRONICS’
Electronic Components Business

The Strengths of Kaga’s Electronic Components Business
Our strengths are our independence, meaning that we are not affiliated with any othermanufacturer, our global reach, which extends around the world, and the professional skillsof our technical teams.
As an independent
comprehensive trading
company, we have access to avast range of parts. We haveearned our customers’ trustand developed vast expertisein our 50 years of business.

• Kaga Electronics trades directly with more than
2,000 suppliers in Japan and abroad and morethan 4,000 customer businesses (7,000
accounts).
• As an independent trading company, we are notlimited in the goods that we carry. We use thisadvantage and our worldwide network to connect
large numbers of suppliers and customers andensure that customers get the optimal product in
the ideal form.

The power of a
global network

We utilize our ability to gather
information to foresee thefuture, as well as the power ofa Group working in a wide
range of fields.

• Kaga Electronics boasts a global network of morethan 60 companies around the world, including
North America, Europe, and Asia. Our Grouppower enables us to rapidly gather and deliver
the latest knowledge and unpublished informationthat is unavailable to our competitors.
• We also offer full support through our local
subsidiaries. We provide the solutions you need,
wherever you need them.

Technical
support system

Our experienced technicalteams can be counted on.
Our dependable system today
is the product of years ofearning trust.

• Our technical teams include field applicationengineers (FAEs) who are experts in the latest
technologies. We offer not only optimal products,
but also a sense of trust backed up by our trackrecord.
• This gives our customers peace of mind evenwhen using products developed by cutting-edge
venture companies that are not yet well known.

The advantage
of an
independent
trading company

28

Business Flow of the Electronic Components BusinessWe provide optimal solutions to customers through our cutting-edge
information network and our component procurement system, which leverage
the Group’s network.

Over 2,000

Over 4,000

Worldwide suppliersWith over 60 affiliatedcompanies
In the world

Japanese venders
Western venders

Customers

Collect the latest
information

The latest Information

RequestSelection

Parts selection to satisfy
customer’s needs

Order

ProcureProcure the best parts

Delivery

Asian venders

29

Portfolio by Industry in Electronic Component Business
Net Sales: JPY398.7bn
Others8％

consumer11%

telecommunication

11％

Amusement

21％

In-vehicle

21％

Industrial

28%

2023/330

EMS Business

The Strengths of Kaga’s EMS：Convenience Store EMS
Kaga Electronics globally deploys a “Convenience Store EMS” that is convenienceand valuable for its customers.
Japanese EMS vs Taiwanese / Asian EMS

Focus on High
Reliability

Focus is on Substrate
Installation
Strong areas ofJapanese EMS
SIIX
UMC
Kaga Electronics, etc

High Volume

Foxconn、
Pegatron、
Flextronics, etc.

Focus on Cost
Competitiveness

Strong areas of Taiwanese/ Asian mega EMS

Low Volume

Convenience Store EMS vs GMS EMS＜KAGA ELECTRONICS＞
・ Low initial investment(Land and buildings rented,
Standardized interior construction)
・ Capable high mix, low volume
production
・ Local production for local
consumption modelVS＜Japanese Major Competitors ＞
・ Large scale investment
・ Mass production type
Export model

Focus is on the
Assembly ofFinished Products
32

Introduction to Main Production Centers
With global production plants located in China, ASEAN, Europe, and the Americas, wehave the capacity for local production that meets the needs of customers. We provide
comprehensive support, including product design and development as well as highmix low-volume production, so that we can flexibly accommodate everything fromsemi-finished to finished products.
CHINA：KAGA(SHENZHEN)ELECTRONICS
OutlineEstablished：1999
Number of
employees：998

ASEAN：KAGA ELECTRONICS (THAILAND)
OutlineEstablished：2002
Number of
Employees：979

Production Items

Production Items

Automotive, Industrial,
OA, Amusement andcommunicationequipment

Automotive, OA, Air
conditioning andIndustrial equipment

AMERICA：TAXAN MEXICO
OutlineEstablished：2017
Number of
employees：478

EURO：KD TEC TURKEY
OutlineEstablished：2023
Number of
employees：163

Production Items

Production Items

Automotive, OA andIndustrial equipment

Electrical units for air
conditioners andSubstrates for electric
tools, Automotive
equipment substrates

33

Construction of New Factory in Mexico:
Strengthening and Expanding the EMS Production Base
We are proceeding with the construction of a new factory due to increasing orders
from existing customers, as well as the expected acquisition of new customers.
The aim is to capture local production demand for products intended for the U.S.
market, where opportunities are expected to increase in the future, and turn the
Mexican operation into the largest EMS business base in the Group, with net sales of
50 billion yen and approximately 2,000 jobs to be created within five years from thestart of operation.
TAXAN MEXICO S.A. DE C.V.
Outline of the New Factory
Location：Parque Industrial
Millenium, Arroyos,
San Luis Potosí

Nomber of
Employees ：700（at start）
Land area ：80,000㎡
Floor area ：20,000㎡
Expected Investment Amount：total around 5 billion yen
over the next five years.
（includes the landpurchase and buildings）
Items produced
Assembly of automotive lighting
units and circuit boards for airconditioning equipment, etc.
Start of operation
Scheduled for April 2024

34

Major Products: In-vehicle Products
AC Inverter UnitsLighting Units for Automotive

Electrical Compressor Units

Automotive Navigation System

35

Major Products: HVAC, Industrial, Medical related and Office Equipment
Air Conditioner Unit

Products for Electrical Tools

Medical Equipment

Substrate for Office Equipment＜Automated Medication Dispensing Cabinet＞
36

Portfolio by Industry in EMS BusinessWe are aiming for dramatic growth that is 1.3 times higher than FY2021 levels
with a strategy prioritizing reinforcement and expansion of the customer
foundation, a shift in the value chain to high value-added areas, andreinforcement of the business foundation.

Net Sales: JPY150bn
Others
Office / Communication Equipment

5％5％consumer5％

Medical10％

Air conditioning

15%

Industrial

20％

In-vehicle40%

FY24 Projections

37

Measures to Increase Competitiveness ‐①：
Increasing of Production Capacity
We will respond flexibly and nimbly to the movement to shift production out of China
due to the prolonged trade tensions between the US and China and the movement torestore domestic production to avoid exchange rate fluctuations and increasing labor
expenses.
Fukushima Factory

Amata Nakhon 2 nd Factory
Business Content

Business Content

Manufacture, repair,reuse, and recycling ofcommunications
equipment, PCs, andPC peripherals

Installation of substrates
for multifunction devices,
printers and automotive
related units

Operation start date

Operation start date

October 2019

December 2019

Malaysia Factory（Relocation）
Business Content
Various power supply
products and sanitaryequipment, industrial
equipment, andelectrical equipment
substrates for
consumer electronics
Operation start date
October 2022

Turkey Factory（Relocation）
Business Content
Electrical units for air
conditioners andSubstrates for electric
tools, Automotive
equipment substrates
Operation start dateJune 2023

38

Measures to Increase Competitiveness ‐②：Strengthening Manufacturing Capabilities
Through the acquisition of Towada Pioneer Corporation (currently KAGA EMS TOWADA
CO., LTD.), we will further improve the quality level of the EMS business and improve
our competitive advantage compared to other competitors, by sharing the tangible
and intangible assets developed through many years as a specialist electronics
manufacturer, such as manufacturing know-how, exceptional production personnel
and equipment, jig design, and quality assurance systems.
We will also designate KAGA EMS TOWADA as the “mother factory” of the EMS
business, connect with overseas sites, promote overall
optimization, strengthen the
ものづくり力の強化
management framework, and improve business efficiency.
KAGA EMS TOWADA
Factory Outline
Address：15-1, MOTOMACHI HIGASHI 1-CYOME,TOWADA-SHI, AOMORI, JAPAN
Number of employees： 195【1st Factory】【2nd Factory】
7,201m2
Site area
22,363m2 Site area
Building area 10,719m2 Building area 2,545m2

Main production items
Circuit board mounting and electronic equipment
assembly and inspection◆Automotive related◆Medical device related◆Consumer product and industrial equipment
related, food processing equipment related, etc.

Acquisition date
October 201939

Measures to Increase Competitiveness ‐③：In-house Development of Manufacturing Equipment
We will provide customers with total substrate mounting solutions with overwhelming
cost competitiveness, high quality, and high reliability, by merging with major Chineseequipment manufacturers and developing, designing, and producing manufacturing
equipment.

Introduction of HATTEN Equipment
Modularsoldering baths
Product lineup①1-head unit ISF-300②2-head unit ISF-450-II③4-head unit ISF-450D④4-head unit ISF-4504H
Modular high-speed
soldering bath
⑤Modular flux applicator

SurfaceMounting
Equipment

Product lineup①CPM H2
Chip component mounting②CPM F2
Non-standard component
mounting③CPM/FH
Miniature chip component
mounting④HATTEN line
*Mass production
underway by Kaga in
Jiangsu

Testing
Equipment
Product lineup①3D SPI
Cream solder testing②Post-SMT AOI equipment
Visual inspection ofmounted components③Pre-soldering bath S-AOI
Inspection of handinserted components④Post-soldering bath AOISolder-lifting inspection
Component float inspection

Vertical Hightemperature
Furnaces

Product lineup①Coating hardening
furnace
After coating final
hardening②Potting hardening furnace
After potting final hardening③High temperature
deterioration testing
furnace
Product deterioration
testing40

Medium- to Long-Term Sustainability
Management Plan
(Extract from materials published on November 25, 2021)

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.
42

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 perspectives— 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.
Materiality

E

Create a clean
globalenvironment

S

Create aninclusive company
as well as anaffluent societyG

Createa sustainable
management base

B

Realizesustainablebusiness growth

Related SDGs

Changes in the socio-economic
environment• Growing seriousness of global warming
and other environmental problems• Urgent call for carbon neutrality• Changes in social structure as we movetoward the popularization of the newnormal• Human resource shortages attributable
to a low birthrate and an aging
population• Public calls for more robust corporate
governance• Growing need for business resilienceagainst changes in the operating
environment• 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

Our initiatives• Provide products and services designed tohelp resolve environmental and energy
issues• Continue initiatives to reduce theenvironmental burden• Promote workforce diversity andinnovative work styles to better adapt to
the new normal• Develop human resources by passing
down and updating KAGA-ism• Further strengthen corporate governanceand compliance• Thoroughly practice a profit-focusedmanagement approach• Provide products and services that
contribute to the transition to a digitaldriven society• Create new businesses aimed at helping

43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

2030: 100%

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

2030: 50%
2050: 100%

2024: 85% (78.5%)

2030: 100%

Diversity and humanresource management

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 the• Independent Outside Directors: atgovernance structure in
least 1/3
response to the revision of
the Corporate Governance • Establishment of Nomination and
Code and the reorganization
Compensation Committeeof Tokyo Stock Exchange

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

Long-term targets

2024: 40% (1%)• Ensuring diversity in core humanresources (Women, foreign
nationals, mid-career hires)• Initiatives to employ elderly workers
and persons with disabilities

S

G

Medium-term targets

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

Performed in June 2021

By June 2022: Determination ofpolicyPerformed in November 2021

Setting of targets inline with next
Corporate Governance
Code revision

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

44Progress of medium- to long-term sustainability targets：
Environmental
Key themesE

Achievement of shift
to 100% renewableenergyShift to electricity forcompany-owned
vehiclesIssues to address and issues to examine

Main activities and progress in FY2022• Adoption of renewable energy at domestic
sales offices

 Introduced 1.2% of total electricity from renewableenergy sources. Continue study to achieve 40% in
FY2024.

• Adoption of renewable energy at domestic
manufacturing sites

 Calculated power generation to install solar panels atsites in Aomori, Fukushima, and Tottori. Started thedetailed design.

• Adoption of renewable energy at overseas
manufacturing sites

 Started to introduce renewable energy-derived
electricity using solar panels at sites in China (Hubei)
and Vietnam. Expected to cover 30%-50% of annual
electricity usage at each site.

• Switch to electric vehicles for domestic sales
vehicles (EV, HV, PHV, FCV) The ratio of electric vehicles increased by 1.2pt year
on year to 82.0% (as of March 31, 2023).

Solar panels installed on the roof
of Head Office

Solar panels installedat Vietnam factory45

Progress of medium- to long-term sustainability targets：Social
Key themes

Diversity andhuman resource
management

S
Work–life
management
and enhancementof productivity

Issues to address and issues to examine

Main activities and progress in FY2022

 Ensuring diversity in core humanresources (Women, foreign nationals,
mid-career hires) Percentage of female new graduates in general
positions increased by 12.3pt year on year to 18.1%
as a result of hiring activities based on the Action Plan.
 Discussions held within the group to improve
percentage of women in management positions andset targets for the number of women in management
positions at each group company. As of April 2023,
the percentage of women in management positions
has increased by 3.2pt year on year to 16.5%.

 Initiatives to employ elderly workers andpersons with disabilities

 Employment of persons with disabilities is 100% of
the legally mandated rate (as of March 31, 2023)

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

 Revised regulations and rules to make telework apermanent system Acquisition of certification as a Healthand Productivity Management
Organization

 Certified in March 2023

46

Progress of medium- to long-term sustainability targets：
GovernanceG

Key themes

Issues to address and issues to examine

Main activities and progress in FY2022

Restructuring thegovernance structure
in response to therevision of the
Corporate
Governance Codeand thereorganization ofTokyo Stock
Exchange Independent Outside Directors: at least
1/3
 Establishment of Nomination andCompensation Committee Effective June 2023, 6 directors (including threeoutside directors), with a majority of directors beingoutside directors. Established the Nomination andCompensation Committee.

 Diversification of the Board of Directors

 Decided to nominate a female candidate as a newoutside auditor. Continued to work to appoint a
female director.

 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 withcommittees

 Continue the company-with-auditors system, but
shorten the term of directors from the current 2
years to 1 year (planned in June 2023).

Furtherstrengthening thesupervisory andoversight
functions of top
management overbusiness execution

Enhancement of the Board of
Directors’ functions
InsideDirector

11
Outside Director

InsideDirector

6

Outside Director

Adoption of Delegation-based
Executive Officer Structure
Outline: Management (conventionally, directors)
with roles (e.g., Founder & CEO, President & COO,
senior managing executive officer, managing executive
officer, and senior executive officer)
Inside directors concurrently serve as delegatedexecutive officers.
Term of office: 1 year
Nomination: Deliberated by the Nomination Committee
and resolved at the Board of Directors meeting.
47

Consolidated Financial Results
for the First Half of the
Fiscal Year ending March 2024

Summary of Financial Results for FY2024/3 2Q
Net sales decreased by 23.7 billion yen or 7.9% year on year to 275.0 billion yen.
The decrease, despite sales growth in the information equipment business and theothers business, reflected disappearance of spot demand and emergence of some
impact of inventory adjustments by customers in the electronic components
business, the Group’s core business.

Operating income decreased by 4.4 billion yen or 24.4% year on year to 13.8 billion yen.
Lower income is attributable partly to provision of allowance for doubtful accounts
recorded in 1Q associated with a business partner’s filing for insolvency, in addition to
decline in gross profit due to lower sales.
Excluding disappearance of spot demand and the one-off factor related toallowance for doubtful accounts, “earning power” in real terms maintained theprevious year’s level.

Net income decreased by 2.0 billion yen or 15.0% year on year to 11.4 billion yen.
Gain on sales of investment securities and gain on bargain purchase associatedwith a corporate acquisition were posted as extraordinary income.



Upward momentum in 1Q was maintained in 2Q. Net sales and operating income
exceeded the internal plan, by 15.0 billion and 3.8 billion yen, respectively.

While an upward revision is in mind as better-than-expected performancecontinues, supporting first-half earnings momentum, earnings forecast revision
is held off at this time to carefully assess the future demand trend, in light of amanagement environment that poses growing uncertainty about the outlook.

FY2024/3
2Q results

FY2024/3
earnings
forecast

Net Sales
FY2024/3 Forecasts(Announced on May 11, 2023)

2Q Progress rate

Operating income

Net income

JPY 550.0 bn

JPY 25.0 bn

JPY 18.0 bn

50.0%

55.5%

63.4%
49

Financial Highlights for FY2024/3 2Q（million yen）

FY2023/3
2Q Results

FY2024/3
2Q Results

YoY(Announced on May 11, 2023)

275,044

Net sales

298,760

Gross Profit

40,001

13.4%

35,160

SG&A

21,639

7.2%

Operating income

18,361

Ordinary income

FY2024/3
Forecasts

Progress
rate

-7.9%

550,000

12.8%-12.1%―

ーー

21,284

7.7%

-1.6%

―

ー

ー

6.1%

13,876

5.0%-24.4%

25,000

4.5%

55.5%

18,932

6.3%

13,945

5.1%-26.3%

25,000

4.5%

55.8%

Profit attibutable toowners of parent

13,412

4.5%

11,4044.1%-15.0%

18,000

3.3%

63.4%

EPS (yen)

510.88ー

434.23ーー

685.42ーー

133.97ー

141.00ーー

135.00ーー

Exchange Rateyen / USD

50.0%

Note: 1. The effect of exchange rates on the conversion into yen is approximately 6,072 million yen on
net sales and 194 million yen on operating income.
2. "x. x% " represents the ratio to net sales.

50

Results by Business Segment for FY2024/3 2Q（million yen）

FY2023/3
2Q Results
Electronic
Component
Information
Equipment

Software

OthersTotal

Net sales

16,617

Net sales

19,597

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

965

6.2%

4.9%

7.3%

1,280

6.2%

112

9.2%

10,539
7.0%

623

5.9%

275,044298,760
18,361

4.9%

1,225

9,392
658

(Announced on May 11, 2023)

20,715

1,307
95

11,785

6.1%

13,876FY2024/3
Forecasts

YoY

242,564

268,464

Segment income

Segment income

FY2024/3
2Q Results

5.0%

-9.6%

471,500-29.1%

20,7005.7%

45,000

32.7%

2,500

-6.3%

4,500

18.2%

300

12.2%

29,000

-5.3%

1,500

-7.9%

550,000-24.4%

25,000Progress
rate
51.4%

4.4%

56.9%
46.0%

5.6%

51.2%
27.2%

6.7%

37.7%
36.3%

5.2%

41.5%
50.0%

4.5%

55.5%

Note: 1. Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).
2. "x. x% " represents the profit margin.

51

Results by Company for FY2024/3 2Q（million yen）

FY2023/3
2Q Results

Kaga
Electronics

Kaga FEI

156,408

168,400

Gross Profit

26,73415.9%

23,651

15.1%-11.5%

Operating income

12,235

7.3%

10,5686.8%-13.6%Net sales

98,757Gross Profit

11,301

11.4%

9,632

9.8%

-14.8%

5,214

5.3%

2,422

2.5%

-53.5%-7.1%

98,7660.0%

19,869Net sales

31,602Gross Profit

1,991

6.3%

1,925

9.7%

-3.3%

866

2.7%

865

4.4%

-0.1%

Operating income

Total

YoY

Net sales

Operating income

Excel

FY2024/3
2Q Results-37.1%

275,044

Net sales

298,760

Gross Profit

40,001

13.4%

35,16012.8%-12.1%

Operating income

18,361

6.1%

13,876

5.0%-24.4%-7.9%

Note: 1. With respect to gross profit and operating income, figures presented above are before consolidation
adjustments between the three companies.
2. "x. x% " represents the profit margin.

52

Effect of M&A for FY2024/3 2Q（million yen）

Net Sales

Gross profit / Gross profit margin

Kaga Electronics posted a sales decrease due partly todisappearance of spot demand. Excel saw a decrease in sales
to a major customer.

Kaga Electronics and Kaga FEI both recorded a gross profit decrease
due partly to disappearance of spot demand. Improved sales mix
helped Excel to maintain profit at nearly the same level as last year.

298,760 -11,992-11,732+9275,044

40,001-3,082

15.9%
11.4%

-1,669

15.1%

13.4%

35,160

-66

12.8%

9.8%

9.7%

6.3%
2023/3
2Q

Kaga
Electronics

Kaga FEI

Excel

FY2024/3

2024/32Q

2023/3
2Q

Kaga
Electronics

Kaga FEI

Excel

FY2024/3

2024/3
2Q

SG&A / SG&A ratio

Operating income / Operating income marjin

SG&A expenses declined in both Kaga Electronics and Excel due tolower sales. Kaga FEI’s expenses increased due partly to theprovision of allowance for doubtful accounts.

Kaga Electronics and Kaga FEI recorded a decrease in operating
income. Excel secured last year’s income level with improved
operating income margin.

-837

21,639

8.8%

8.7%
6.0%

7.2%

+553
6.5%

-70

4.9%

21,284

7.7%

KagaElectronics-1,666

7.3%
5.3%

6.1%

Kaga FEI

Excel

FY2024/3

2024/32Q

2023/3
2Q-2,791

6.8%

2.7%

3.3%
2023/3
2Q

18,361-1

13,876

4.4%

5.0%

Excel

2024/3
2Q

2.5%
Kaga
Electronics

Kaga FEIFY2024/3

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 53
stood at -47million yen, and operating income came to 19million yen.

Financial Highlights: Electronic Component Segment
Net sales/Segment income（million yen）//

350 000

Net Sales

YoY
350 00

Segment income

300 000

 Net Sales Segment income-25,899million yen

9.6％Down-4,831million yen 29.1％Down

300 00268,464
242,564

250 000

250 00200 000

・ Both net sales and income decreased in the component sales
business due to partial emergence of the impact of customers’
inventory adjustments, in addition to disappearance of spot
demand that had contributed to earnings until the previous
fiscal year, given easing of supply shortages of semiconductors
and electronic components.

200 0016,617150 000

150 0011,785100 000

100 00500 00500 0

0・ In the EMS business, net sales and income declined due partly
to the impact of inventory adjustments at key customers inapplications related to medical and industrial equipment,
despite sales growth in the automotive sector resulting from
improved supply and demand balance of semiconductors andelectronic components.

0

FY2023/3
2Q Results

FY2024/3
2Q Results

54

Financial Highlights: Information Equipment Segment
Net sales/Segment income（million yen）

/ Net Sales

YoY
 Net Sales
400 0/ Segment income

 Segment income+1,118million yen

5.7％Up+315million yen

32.7％Up

250 00350 0

200 00・ Sales of PCs to educational institutions remained firm, withan increase in the number of accounts.

20,715

19,597300 0・ Sales of security software and PC peripheral products werealso solid.

250 0

150 00

200 0

1,280

100 00・ The LED installation business enjoyed contribution from salesof large-scale projects that the Group has been pushing
forward on a full scale since the previous fiscal year.

150 0

965
100 0

500 0

500

0

0

FY2023/3
2Q Results

FY2024/3
2Q Results

55

Financial Highlights for FY2024/3 2Q (3 months)

Reference（million yen）

FY2023/3
2Q Results

FY2024/3
1Q Results

FY2024/3
2Q Results

QoQ

137,350

-8.1%

-0.3%

Net sales

149,458

Gross Profit

20,163

13.5%

17,553

12.7%

17,607

12.8% -12.7%

0.3%

SG&A

11,621

7.8%

10,5597.7%

10,725

7.8%

-7.7%

1.6%

Operating income

8,541

5.7%

6,994

5.1%

6,882

5.0%

-19.4%-1.6%

Ordinary income

9,073

6.1%

6,909

5.0%

7,035

5.1%

-22.5%

1.8%

Profit attibutable toowners of parent

6,427

4.3%

5,767

4.2%

5,636

4.1%

-12.3%-2.3%

244.79ー

219.63ー

214.60ーーーEPS (yen)

137,694

YoY

Note: "x. x% " represents the ratio to net sales.

56

Results by Business Segment for FY2024/3 2Q (3 months) Reference（million yen）

FY2023/3
2Q Results
Electronic
Component
Information
Equipment

Software

OthersTotal

Net sales

134,986

Segment income

7,599

Net sales

8,449

Segment income

400

Net sales

808

Segment income

129

Net sales
Segment income
Net sales
Segment income

FY2024/3
1Q Results

5.6%

5,922

4.9%

4.7%

746

6.2%

-4

-0.8%

291

5.8%

6,994

6.2%

117

18.1%

331

6.0%

137,350

137,694
5.7%

533

5.1%

6,882

YoY

QoQ

-9.2%

2.1%

-22.9%-1.0%

2.5% -28.1%

5,488

5,050
7.8%

4.8%

647

577
16.0%

5,862
8,664

12,050149,458
8,541

122,549

120,0155,213
408

FY2024/3
2Q Results

5.0%

33.4% -28.5%-19.9%

12.3%

-9.0%

－

5.3%

8.7%

-18.9%

13.8%

-8.1%

-0.3%

-19.4%-1.6%

Note: 1. Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).
2. "x. x% " represents the profit margin.

57

Results by Company for FY2024/3 2Q (3 months)

Reference（million yen）

FY2023/3
2Q Results

Kaga
Electronics

Kaga FEI

Excel

FY2024/3
2Q Results

77,792

QoQ

-7.5%

-1.0%
-5.3%

84,061Gross Profit

13,69316.3%

12,14615.5%

11,50414.8%-16.0%

5,983

7.1%

5,663

7.2%

4,905

6.3%

-18.0% -13.4%

Operating income

78,615YoY

Net sales

50,631

Net sales

51,005Gross Profit

5,516

10.8%

4,379

9.1%

5,252

Operating income

2,173

4.3%

797

1.7%

1,625

48,135

-0.7%

5.2%

10.4%

-4.8%

19.9%

3.2%

-25.2% 103.9%

8,925

Net sales

14,392Gross Profit

1,004

7.0%

1,014

9.3%

910

10.2%

-9.3% -10.2%

403

2.8%

485

4.4%

379

4.3%

-6.0% -21.8%

Operating income

Total

FY2024/3
1Q Results

10,943

137,350

Net sales

149,458

Gross Profit

20,163

13.5%

17,553

12.7%

17,607

8,541

5.7%

6,994

5.1%

6,882

Operating income-38.0% -18.4%

137,694

-8.1%

-0.3%

12.8%

-12.7%

0.3%

5.0%-19.4%-1.6%

Note: 1. With respect to gross profit and operating income, figures presented above are before consolidation
adjustments between the three companies.
2. "x. x% " represents the profit margin.

58

Effect of M&A for FY2024/3 2Q (3 months)

Reference（million yen）

Net Sales

Gross profit / Gross profit margin

All three companies recorded a decrease in net sales
due to a sales decrease in the electronic components business.

-6,268

149,458-373-5,466Gross profit decreased in all three companies due to a sales decrease.

20,163-2,188

16.3%

14.8%

137,350

13.5%

-264

-93

17,607
12.8%

10.4%

10.2%

10.8%
7.0%
2023/3
2Q

Kaga
Electronics

Kaga FEI

Excel

FY2024/3

2024/32Q

2023/3
2Q

Kaga
Electronics

Kaga FEI

Excel

FY2024/3

2024/3
2Q

SG&A / SG&A ratio

Operating income / Operating income margin

SG&A expenses decreased in Kaga Electronics and Excel due toa sales decrease.

Operating income decreased in both Kaga Electronics and Kaga FEI.
Excel secured last year’s income level with improved operating
income margin.

-832

11,621
9.3%
6.4%

9.0%

7.8%

+9

-73

6.5%

5.4%

10,725

7.8%

KagaElectronics-1,078

7.1%
4.3%

5.7%

Kaga FEI

Excel

FY2024/3

2024/32Q

2023/3
2Q

-548

6.3%

-24

6,882

4.3%

5.0%

Excel

2024/3
2Q

3.2%

2.8%

3.8%
2023/3
2Q

8,541

Kaga
Electronics

Kaga FEIFY2024/3

Note :With respect to gross profit and operating income, figures presented above are before consolidation 59
adjustments between the two companies. For reference, after consolidation adjustments, gross profit
stood at -60million yen, and operating income came to -28million yen.

Financial Highlights: Electronic Component Segment(3 months）
Net sales/Segment income（million yen）//

180 000

YoY Net Sales

Net Sales
Segment income

 Segment income-12,437million yen

9.2％Down-1,736million yen 22.9％Down

250 00160 000

140 000

Reference

134,986
120,015

122,549

200 00

QoQ

120 000

 Net Sales
100 000

150 00 Segment income+2,533million yen-60million yen

2.1％Up
1.0％Down

800 00100 00600 00400 00

7,599
5.6%

5,922

5,862

4.9%

4.8%

500 0

200 000

0

FY2023/3
2Q Results

FY2024/3
1Q Results

FY2024/3
2Q Results
Note: "x. x% " represents the profit margin.

60

Financial Highlights: Information Equipment Segment(3 months）
Net sales/Segment income（million yen）

140 00

Reference

YoY/

Net Sales/

Segment income

200 0 Net Sales+215million yen

 Segment income+133million yen 33.4％Up

2.5％Up

180 012,050160 0

120 00

140 0

QoQ

100 00

8,664

8,449

120 0

 Net Sales Segment income

800 0-3,385million yen 28.1％Down-212million yen 28.5％Down

100 0

746

600 0

400 0

200 0

400
4.7%

800

533
6.2%

6.2%

600

400

200

0

0

FY2023/3
2Q Results

FY2024/3
1Q Results

FY2024/3
2Q Results
Note: "x. x% " represents the profit margin.

61

Factors of Increase / Decrease in Operating Income
vs Internal Plan

YoY
（million yen）

Effect of
Exchange rates(+548)

18,361

Effect of
Exchange rates(+219)▲1,247(▲1,795) ▲3,592

Sales volume
Sales mix

+354(+708)

Spot sales
Effect of
Exchange rates(▲354)（million yen）

SG&A

Effect of
Exchange rates(▲147)

13,876+194+3,161

Effect of
Exchange
Rates
（net）

10,000 (+2,942)

+0

+715
(+862)

Spot sales SG&A

Sales volume
Sales mix

+72

13,876

Effect of
Exchange
Rates
（net）

Including 400 in provision for loss associatedwith a business partner’s filing for insolvency

Including 400 in provision for loss associatedwith a business partner’s filing for insolvency

Income Decrease: 4,485

Upside: 3,876

FY2023/3
2Q Results

FY2024/3
2Q Results

FY2024/3
2Q Plan

FY2024/3
2Q Results
62

Balance Sheet Main Items
Total assets

Total liabilities and net assets（million yen）

272,139

286,217290,328+4,110272,139

286,217

156,479

290,328+4,110146,720-9,758

Total liabilities

166,339
233,984

245,572

252,337+6,765Current assets

105,800
38,15540,6452022/32023/337,990-2,6542023/9（million yen）

129,737

143,607+13,869

Total net assets

Non-current assets
2022/32023/32023/963

Balance Sheet Main Items
Inventories

Accounts receivable/Accounts payable
110 .090,00 046.1
33.7

80,00 042.3

（ million Yen, day）
50.0

Inventory turnover

89.0
200 ,0 00

68.6

30.0

63,58170,00 0+7,37562,607

Inventories

78.3

A/R turnover
60.0

55.8

A/P turnover

59.6

10.0

150 ,0 00

56,20560,00 077.5

（ million Yen, day）

10.0

-10.0

120,948

50,00 0129,099

Notes and A/R

117,752-11,346

-30.0
-40.0

100 ,0 00

40,00 0-50.086,493

79,23277,353

Notes and A/P-1,879-90.0

30,00 0-70.0

50,00 020,00 0-90.0

-140.010,00 0-110.0-130.002022/32023/32023/9Note： Inventory turnover ＝ Inventories ÷ Net Sales × 183（day）

0-190.02022/32023/32023/9Notes：1. ・Notes and A/R are amounts including Electronically recorded monetary claims-operating
2. ・Notes and A/P are amounts including Electronically recorded obligations - operating
3. ・A/R turnover ＝ Notes and A/R ÷ Net sales × 183（day）
4. ・A/P turnover ＝ Notes and A/P ÷ Total purchase of goods × 183（day）

64

Balance Sheet Main Items
Cash and Deposits/Interest Bearing Debt
90,00 00.48
0.10

Cash flows（million yen, times）

0.32

0.30

-0.08

-0.14

80,00 0

0.50

0.00

D/E ratio
Net D/E ratio-0.50

30,56970,00 062,487+9,886

-1.00

9,551

1,155

60,00 051,17152,600Cash flows fromoperating activities

Cash and deposits-1,554-6,772-1.50-4,805-797-4,194

Cash flows fromfinancing activities

50,00 041,051

41,93842,510

-2.00

+571

-15,549

Interest bearing debts

Cash flows frominvesting activities

40,00 0-2.50

2022/3末

30,00 0-3.00

2022/32023/32023/9Note：1. D/E ratio＝ Interest bearing debts ÷ Shareholder’s equity
2. Net D/E ratio ＝（Interest bearing debts - Cash and deposits） ÷

FY2022/3

2023/3末

FY2023/3

2023/9末

FY2023/9

Shareholder’s equity

65Forecasts for FY2024/3

Forecasts for FY2024/3（million yen）

FY2024/3
Forecasts

FY2023/3
Results
Net sales

YoY(Announced on May11, 2023)

550,000

608,064-9.5%

Operating income

32,2495.3%

25,0004.5%-22.5%

Ordinary income

32,7395.4%

25,0004.5%-23.6%

Profit attibutable toowners of parent

23,0703.8%

18,0003.3%-22.0%EPS (yen)

878.65685.42

－

ROE

19.6%

13.3%

-6.3ptAnnual dividend (yen)220.00Ordinary dividend
140.00Commemorative dividend 10.00
Extraordinary dividend
70.00

220.00Ordinary dividend

220.00ー

Note: "x. x% " represents the profit margin.

67

Forecasts by Business Segment for FY2024/3（million yen）

FY2024/3
Forecasts

FY2023/3
Results
Electronic
Component
Information
Equipment

Software

OthersTotal

Net sales

28,314

Net sales

43,680

Segment income

2,449

Net sales

2,998

Segment income
Net sales
Segment income
Net sales
Segment income(Announced on May11, 2023)

471,500

539,342

Segment income

286

5.2%

5.6%

4.4%

2,500

9.6%

300

5.6%

1,500

6.7%

25,000

4.6%
31.6%

5.2%

550,000
5.3%

2.1%
50.1%

29,0005.0%-26.9%
3.0%

4,500

608,064
32,24920,700-12.6%

45,00022,044
1,101

YoY

36.1%
-9.5%

4.5%

-22.5%

Note: 1. Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).
2. "x. x% " represents the profit margin.

68

Latest 5 years Financial Trends
Operating Income

Net Sales （billion yen）
1H

443.6
230.6

1H

Full-year

422.3
188.8

2020/32021/3

608.0
495.8

223.0

2022/3

298.7

20.9
10.0
5.2

2023/32024/3（forecasts）

4.4

415.0713.8
213.21

8.3

2020/3 2021/3 2022/3 2023/3 2024/3（forecasts）

Equity（billion yen, ％）

30.5
37.3

38.4

ROE

Equity ratio

38.8

45.3

49.4

9.5
8.7

2020/3 2021/3 2022/3 2023/3 2023/9
-1.5
-8.3

78.2

90.9

105.6

129.6

143.4

2020/3 2021/3 2022/3 2023/3 2023/9

Cost of Equity（％, times, turns）■Total asset turnover■Financial leverage■Net profit margin

7.6
9.9
7.5

685.42576.4618.3（forecasts）（billion yen）

25.7

22.4
18.7

11.4

（yen）

878.6525.0

2020/3 2021/3 2022/3 2023/3 2024/3

CF from Operating activities
Free Cash Flow

32.2

Full-year

550.0

275.0

EPS

（billion yen）

6.6
1.3

13.5

15.7

19.6

8.1

7.5

8.1

1.9

1.9

2.2

2.7

2.6

2.6

2.1

2.7

3.1

2.4
3.8

13.3
10.0
1.9
2.1
3.3

2020/3 2021/3 2022/3 2023/3 2024/3（forecasts）

69

Segment disclosure associated with the Medium-Term
Management Plan

ReferenceContinuous 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

Others Production of CG video
and software
 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
 Sales of PCs and PC peripherals
 Sales of home electric appliancesand lighting fixtures

CSI

 Sales of photograph and imaging
products
CSI: Consumer & System Integrator
 Production of CG video and software

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

70

Financial Highlights by Business Segment of
the Medium-Term Management Plan

Reference（million yen）

FY2022/3
2Q Results
Electronic
Component

EMS

CSI

OthersTotal

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

144,790
3,948

2.7%

6.2%

4.9%

7.6%

965

1.1%

369

4.9%

18,361

4,143

1,280

5.4%

375

6.7%

13,876-22.0%
5.7%

6.2%

32.7%
15.1%

4.8%

275,044
6.1%-31.5%-10.6%

7,837

298,760
3.7%

4.3%

20,715

6,809

223,009
8,300

5,311

8,002

YoY
-9.1%

62,122

19,597

6,052
64

5.8%

69,486

18,713910

11,689FY2024/3
2Q Results

184,368

202,867

53,4533,322

FY2023/3
2Q Results

1.6%
-7.9%

5.0%

-24.4%

Note: 1. Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).
2. "x. x% " represents the profit margin.

71

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

Reference（million yen）

FY2022/3
2Q Results
Electronic
Component

EMS

CSI

OthersTotal

Net sales
Segment income
Net sales

101,422
5,148

2,698

Net sales

8,449

Segment income
Net sales
Segment income
Net sales
Segment income

5.1%

400

7.6%

2,433

4.7%

746

7.7%

81

6.2%

6,994

1,709

5.6%

533

2.2%

294

6.2%

6,882

QoQ

-7.1%

4.6%

-16.3%

16.6%-14.8%-4.5%-36.7% -29.8%

33.4% -28.5%
2.9%

7.2%

137,350
5.1%

YoY

2.5% -28.1%

4,083

137,694
5.7%

4.6%

8,664

3,754
7.3%

4,307
30,34812,050149,458
8,541

4.1%

31,773

3,967
289

3,695

FY2024/3
2Q Results

94,253

90,11535,619Segment income

FY2024/3
1Q Results

5.0%

8.8%

1.6% 262.7%
-8.1%

-0.3%

-19.4%-1.6%

Note: 1. Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).
2. "x. x% " represents the profit margin.

72

Exchange Rate/FOREX Sensitivity

Reference（Reference）

FY2023/3
2Q Results（Yen）

FY2024/3
2Q Results（Yen）

Effect of 1% change（Million Yen）

Net sales

OperatingincomeForex
Assumptionfor2024/3(yen)USD

133.97141.001,088

17135.00

RMB

18.94

19.45

151

12

19.50

THB

3.79

4.05

140

9

3.80

HKD

17.07

18.00

92

2

17.00

EUR

138.73

153.3940.1

140.0073

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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.
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