2021 - 2022

Management Briefing Material

KAGA ELECTRONICS
TSE Prime Market 8154

March, 2023

INDEX Introduction

P- 3 ~ 8

 Corporate Profile

P-11 ~ 18

 Medium Term Management Plan 2024

P-21 ~ 28 Electronic components Business

P-30 ~ 32

 EMS Business

P-34 ~ 45

 Medium- to Long-Term
Sustainability Management Plan

P-47 ~ 49 References

P-51

Introduction

Today’s messages

1 Sustainable profit growth
2 Profit-focused management
3 Management focusing on capital efficiency
4 Proactive return to stakeholders
5 Form fair value and enhance corporate value
3

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

585,000
495,827443,615422,365

13.6

60,00012.1

65,296
195,000

46,5356.0

2019/3

13.7

10.6
6.8

149,455

200,584

14.5

11.3
7.8

2020/3

243,8972021/3

12.2
9.8
6.5

131,932

243,03114.9

5.1

281,075

2022/3330,000

2023/3
Forecasts

47,01647,945

13,7082,365
10,30732,13533,29835,273

2019/32020/32021/335,546
3,411

15.5

13.0
10.5
7.5

(million yen)

76,00060,54757,090235,689(%)■EXCEL■EXCEL

292,779■Total■KAGA ELECTRONICS

4,247

4,500
20,50014,69041,7672022/351,0002023/3
Forecasts

4

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)

585,000
495,827

13,902

422,365

43,466

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

Operating income / Operating income margin

12,552
39,61615,00039,000140,000■Total
(%)

5.6
4.3

4.5
4.3

3.0

3.9

2.6

117,828

1.6

99,599

2.3
1.2

5.1

6.2
5.3

4.2
3.4

2.7
1.1

391,000
292,905

325,830

387
2,482

4,015

5,539

2,278

3,553

3,056

2019/32020/32021/3

554
1,906
2,667

145,042

2020/32021/32022/32023/3
Forecasts

11,467

623
1,707

7,570

262,318

10,014

6.8
5.3

5.1

5.0

4.4

3.2

2.0

20,915
255
2,085

89,481

2019/3■Electronic Component
■EMS
■CSI
■Others(million yen)

29,500
800
2,000
9,500

7,356
17,20011,2162022/32023/3
Forecasts

5

Management focusing on capital efficiency
KAGA Electronics practices business management
focusing on the cost of equity and capital efficiency.
※ROE:18.0% ＞ Cost of Equity:7~8%
ROIC:11.5% ＞ WACC:5~6%

ROE

ROIC・ROA■ROE(%)

13.5

10.9

15.7

18.0

■ROIC (%)■ROA (%)■Total asset turnover

7.6

11.5

■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

2021/32022/33.62023/3
Forecasts

6.9
7.4
6.1
5.1

4.7

2.7

2.7

2.1

2.8
2019/32020/32021/32022/32023/3
Forecasts

6

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

54.4

■ Rent expense■ Depreciation
80,000■

60.0

5,800

Total amount of dividends
50.0

Operating Income

73,150Labor share

40.0

60,51760,00046,78740,00033,595
29,13522,377

Operating
Income30,487

34,571

39,700

20.0

Payroll

20,00010.0

2020/32021/32022/32023/3
Forecasts

2,195

2,197

1,921

¥220
(Up ¥100 per share)

0.0

¥120
¥80

(Up ¥10 per share)

¥70

¥80

(Up ¥40 per share)(Up ¥10 per share)

5
5（Down ¥10 per share）

10

20

70

60

60

2019/32020/32021/3

7000
5000

3,149

30.0

Added
Value

43,742

2019/3(million yen)

■ Ordinary dividend(million yen)

■ Payroll09000■ Commemorative dividend

(%)

57.1

100,000■ Tax and dues

■ Extraordinary dividend

70
10

40

3000
1000
-1000
-3000

140
80

-5000
-7000

2022/32023/3
Forecasts

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

5,000
Volume4,500,000

Changes in PER
30.0
25.0

Price
4,000

TOPIX

Wholesales trade(times)

KAGA

20.0
15.0

4,000,000

3,000

3,500,000(stock)2,000

3,000,000

10.0
5.0
0.0
Mar-18
Nov-18 Apr-19
Jul-19Apr-18Mar-20Nov-20
Apr-20Jul-21
Apr-21

Mar-22
Nov-22
Apr-221,000
2,500,000(yen)

Changes in PBR

02,000,000-1,0001,500,000-2,0001,000,000(times)TOPIX

Wholesale trade

KAGA

1.50
1.00

-3,000500,000
0

2.00

Apr-18Apr-19Apr-20

Apr-21

Apr-22-4,0000.50
0.00
Mar-18
Nov-18Apr-18

Jul-19Apr-19Mar-20Nov-20
Apr-20Jul-21
Apr-21

Mar-22
Apr-22Nov-22

8

Note

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, 2022）
Group Companies:
Number of
Employees:

Founder & CEO
Isao TSUKAMOTO

President & COO
Ryoichi KADO

7,959 （FY ended March 2022 ）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
Net sales exceed¥250 billion

Net sales exceed

Net sales exceed¥10 billion¥750 billion

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

Arrival of Space
Established at SotoKanda,
Invaders games boom
Chiyoda-ku, Tokyo, withcapital of ¥1 million

2025 2028

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

10,000Net Sales

2.6%

8,000

6,000

2.5%

2.0%

3.2%

3,000

3.0%

(million yen)
2,551

2,453

2,272

2,359

1,000
0

51

2014

2015

77

2016

4
3
2

5,850

4,223

-1
295

2,927

1
0

4,958
4,436

-2
-3

209

-4

2,000
63

7,500

3.4%

Acquisition of
Fujitsu Electronics(currently Kaga FEI)

2,578

2.3%

2.7%

Acquisition of
EXCEL

5,000
4,000

5

4.2%

Operating income marjin

7,000

6

5.0 %

Operating income

(%)

68

81

2017

2018

75

100

114

-5
-6

2019

2020

2021

2022

2025
2028
2023
(Forecasts) (Target) (Target)-7

15

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

EMS

Sales agent activities for general electronic

Providing total support for design, development,

components and semiconductors for customers

and manufacture of products ranging from semi-in Japan and worldwide

finished to finished products

Information Equipment

New Businesses

Supplying PCs and peripherals to domestic andDevelopment, manufacture, and sale ofinternational distribution channels, and serving

amusement-related products and software

the network solutions field
16

The Group’s Strength‐②：Global Network
Global EMS production system with 21 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,
BostonThe 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 SOLUTIONSANKOH Engineering

KAGA SOLUTION NETWORKKAGA AMUSEMENTAD DEVICE

DIGITAL MEDIA LAB

KAGA TECHKAGA SPORTS

EXCEL

EXCEL

KAGA AMUSEMENTKAGA EMS TOWADA/Kyokuto Electric
KAGA FEI(former:Fujitsu Electronics)
KAGA 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

Note

KAGA’s Growth Scenario

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

Review of Medium-Term Management Plan 2021：
Management Targets
Predict for exceeding operating income and ROE targets by executing “profit-focused management”,
despite unmet net sales target due to losses of major commercial rights
Net sales
Operating income

Opareting income margin

ROE

JPY443.6bn
10.9%

JPY292.7bn

JPY495.8bn

JPY422.3bn
13.5%

7.6%

JPY10.0bn

JPY500bn

JPY20.9bn
15.7％

JPY13bn8%

JPY11.4bn

JPY7.5bn
4.2％

Net sales
Operatingincome
ROE

2.6％

2.3％

2.7%

FY2018Results

FY2019Results

FY2020Results

FY2021Results

FY2021
Management
Targets

JPY292.7bn

JPY443.6bn

JPY422.3bn

JPY495.8bn

JPY500bn

JPY7.5bn

JPY10.0bn

JPY11.4bn

JPY20.9bn

JPY13bn

10.9％

7.6％

13.5％

15.7％

８％ or higher

Medium-Term Management Plan 2021
21

Medium-Term Management Plan 2024： Management Targets
Realize sustainable growth by organic growth and further M&A challenges

FY2021 Results

Net Sales

JPY 495.8 bn

Operating
IncomeJPY 20.9 bn

FY2024 Management Targets
Organic growth

Including new M&As

JPY 600 bn

JPY 750 bn

JPY 20 bn

With cost of shareholders’ equity (7–8%) in mind,
ROE

15.7 %

stable8.5 % or higher

22

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)

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

Electronic Componens

EMS

1,000

CSI

Others（Excluding new M&A）
Net sales：8.1%

50

CAGR

45

JPY750bn

800
Net sales：20％

Initial plan
600

CAGR

Net Sales：18％
JPY443.6bn
13.9

400

200

Net Sales：16％
Operating Income： 5％

JPY292.7bn
13.9
44.3
89.5 JPY7.5bn

43.5; Operating income：20％

Operating income：32％
JPY422.3bn
12.1

JPY495.8bn
12.5

48.4

93.3

39.6
JPY20.9bn

New M&As
150.0
16.0
54.0
150.0
JPY20bn

117.8

99.6

JPY10.0bn
292.9

35
30
25
20
15

JPY11.4bn

262.3

145.0

40

325.8

380.0

10
5

0

0
FY2018Results

FY2019Results

FY2020Results

FY2021Results

Medium-Term Management Plan 2021

FY2024
Management Targets
Medium-Term Management
Plan 2024

24

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
25

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

26

A Sound Financial Foundation to Support Growth Strategies
Borrowing capacity▲ Net D/E ratio: 0.04 times▲ Cash position: JPY 40.1 bn▲ Commitment line: JPY 15 bn*End of September 2021

Capital efficiency▲ ROE: 13.5% ＞ Cost of shareholders’equity 7.6%

Cash generation ability▲ Total 3-year operating cash flow: JPY 30.8 bn*FY2018–FY2020▲ Use of cash: ① Growth investments② Shareholder returns③ Repayment of borrowing

Stability and credit rating▲ Equity ratio :*End of September 2021

Assumptions for calculations①Risk-free interest rate ：0.02%/10-year Japanese
government bond, five-year average②Market risk premium：6.3%/TOPIX yield③β (beta)：1.2%/Five-year, weekly*FY2020 results

39.6%▲ Bond rating :A-(Stable)A→(Stable)* November 24, 2022

*Japan Credit Rating Agency, Ltd. (JCR)27

Shareholder ReturnBasic Policy on
Dividends ofSurplus

25.5%

25.6%





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.

28.6%

29.6%
24.1%

32.8%

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

35%

27.5%

27.4%

(Forecast)25%■ Ordinary dividend■ Commemorative
dividend

19.3%

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

20.8%

※Including negative goodwill
about JPY8 bn■ Special dividend

JPY35
5
30

JPY40
10
30

FY2013Results

FY2014
Results

JPY120
JPY55

JPY60

15

20

40

40

FY2015Results

FY2016
Results

10

JPY80
5
5

60
FY2017
Results

JPY70

JPY70

JPY80

10

20

70

60

60

FY2018Results

FY2019Results

FY2020Results

JPY220
70
10

40
140
80
FY2021Results

FY2022
Forecasts

28

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

30

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

31Portfolio by Industry in Electronic Component Business
JPY325.8bn
JPY262.3bn

5%
11%
14％
19%

8％
telecommunication 6％
OthersAmusement

15％

consumer

16%

In-vehicle

20％

Industrial

35%

19％
32%
2021/32022/332

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
34

Major Production Bases: China
Kaga Electronics (Shenzhen)

Kaga Technology (Suzhou) Electronics

Established

１９９９

Established

２００９

Number of
Employees

1180

Number of
Employees

417

Products

Automotive-related units, industrial
equipment, OA equipment,
amusement equipment,
communications equipment.

Products

Automotive-related units, medical
equipment, industrial equipment,
residential equipment, electronic
musical instruments,
communications equipment＜ Shenzhen Factory＞＜Suzhou First Factory (For Export)＞35

Major Production Bases: ASEAN
KAGA ELECTRONICS (THAILAND)KAGA ELECTRONICS (VIETNAM)

Established

２００２

Established

２０１７

Number of
Employees

975

Number of
Employees

122

Products

Automotive-related units, OA
equipment, air conditioning
equipment, industrial equipment

Products

Automotive-related units, airconditioning equipment, businessequipment, medical equipment<Thailand Factory>＜ Vietnam Factory＞
36

Major Production Bases: Europe and the Americas
KD TECTAXAN MEXICO

Established

２００９

Established

２０１７

Number of
Employees

104

Number of
Employees

324

Products

Air conditioning equipment.

Products

Automotive-related units,business equipment, industrial
equipment.

＜ Czech Factory＞＜Mexico Factory＞
37

Major Products: In-vehicle ProductsElectrical
Compressor UnitsLighting Units for
Automotive

AC Inverter Units

Automotive Navigation
SystemIn-vehicle Auxiliary
Battery Packs
38

Major Products: HVAC and Industrial Equipment

Air Conditioner Unit

Products for Electrical Tools

39

Major Products: Medical related Equipments

Medical Equipment

Medical Examination
Equipment<Reagent Testing Equipment>＜Automated Medication Dispensing Cabinet＞<Blood Flow Testing Equipment>40

Major Products: Consumer Electrical Equipment
and Office Equipment
Washing Toilet

Substrate for Office
Equipment

41

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.

150bn

JPY

JPY117.8bn
11％
5％

7％
9％

17％
17％
34％
FY21 Result

1.3times

Others5％

Office / Communication Equipment

5％

consumer5％

Medical10％

Air conditioning

15%

Industrial

20％

In-vehicle40%

FY24 Projections
42

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

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

Operation start date

Operation start date

October 2022

June 2023

43

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： 290【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 201944

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
testing45

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
we play 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.
47

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 helping48

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

49References

5-Year Financial Summary（billion yen）

（billion yen）

Net Sales
443.6 422.3
235.9

495.8

20.9
8.7
8.1

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

7.8
7.5

10.0

213.7 207.6
128.7
70.6

84.2

86.2

95.0

236.58

11.4

2018/3 2019/3 2020/3 2021/3 2022/3（％）

Net Assets

576.46

11.2

10.1（billion yen）

237.0

EPS
21.4

292.7

Total Assets（yen）Operating Income
Ordinary Income

ROE

292.07

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

213.21

2018/3 2019/3 2020/3 2021/3 2022/3（billion yen）

CF from Operating activities
Free Cash Flow

272.1

105.8

415.07

22.4

9.5

10.9

13.5

18.7

15.7

7.6

10.1

9.9

5.9

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

7.5

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

(1.5)

(8.4)

(1.5)

(8.3)

51

Note

Note

Other IR Information●Investor Relations Website
https://www.taxan.co.jp/en/ir/●Integrated Report 2022
https://www.taxan.co.jp/en/ir/ir_librar
y/library_05.html● IR Information Services

https://www.taxan.co.jp/en/ir/irmail/index.html

“Everything we do isfor our customers
20 Kandamatsunagacho, Chiyoda-ku, Tokyo 101-8629
Contact: Investor Relations & Public Relations Office
TEL:+81-3-5657-0106
FAX:+81-3-3254-7133
E-mail： webmaster@taxan.co.jp
https://www.taxan.co.jp■ Forward-looking statements in these materials are based on information available to management
at the time this report was prepared and assumptions that management believes are reasonable.
Actual results may differ significantly from these statements for a number of reasons.
■ Display method in this material
Number : Truncated less than the display unit.
Ratio: After calculation in yen units, Round down one digit of Display unit.