2023
2021 - 2023

Financial Results Briefing Materialfor the First Half of theFiscal Year Ending March 2024
KAGA ELECTRONICS CO., LTD.
TSE Prime Market 8154

November 24, 2023

Management Topics
Representative Director,President & COO

Ryoichi KadoFY2024/3 2Q Financial Results:
Review of the First Half and Outlook for the Second Half
Incorporated “impact of inventory adjustments” and “disappearance ofspot demand” in the electronic components business(1) Disappearance of spot demand: as anticipated
Progress in 2Q (2) Impact of inventory adjustments: impact emerged partiallybut not as much as anticipated→ Net sales and operating income decreased year on year, but both exceeded theinternal plan, by 15.0 billion yen and 3.8 billion yen, respectively

Assumptions

Initial forecast
assumptions andprogress up to 2Q●Main factors behind 2Q net sales decrease in electronic components business
FY2023/3
Increase/decrease
factors in 2Q
in electroniccomponents
business268.4 billion yen

FY2024/3
242.5 billion yen：(25.9) billion yen(15.5) billion yen: Spot sales(13.0) billion yen: Excel’s sales to a major customer＋2.5 billion yen●Sales status with the top 20 customers by sales

Group in adjustment process: industrial equipment, medical, air-conditioning, etc. ・・・ (13.0) billion yen
Group with solid sales: in-vehicle, amusement, consumer-related, etc.
・・・ ＋17.0 billion yen


FY 2024/3
2H outlookUpside: better-than-expected performance to be maintained as alternative sales andnew transactions originating from spot sales continue
Downside: possibility that impact of inventory adjustment would linger to the secondhalf
In addition, uncertainty is rising amid heightening geopolitical risks and other situations.
In light of such management environment, upward revision to earnings forecast is heldoff at this time.
2FY2024/3 2Q Financial Results: Inventory Reduction
Aim for 50 billion yen or less in inventory amount and inventory turnover period of 30 days
towards the end of FY2024/3■Inventory amount (manufacturing business)■Inventory amount (trading company business)－Inventory turnover (consolidated)

900

JPY 78.8 bn

800
700

JPY 62.6 bn

84.0

27.1

89.0

30.1

30.4
80.1

200
1000

JPY 63.5 bn

JPY 56.2 bn76.7

27.0
78.1

25.6

100

JPY

50.0 bnor less

46.1

34.3

43.3

31.4

43.7

32.6

35.4

40.8

40.8

2022/32022/62022/9

47.9

26.8

33.7

38.9

48.5

2022/12

43.5

23.4

29.3

2023/3

60

46.6
37.3

2023/6

80

76.0

65.5

400
300

120

JPY 70.5 bn

30.3

140

－Inventory turnover (trading company business)

JPY 71.2 bn
JPY 71.0 bn

600
500

－Inventory turnover (manufacturing business)

42.3
32.5

30days37.9

2023/94020

2024/30（Targets）

3

EMS Business: Construction of a New Factory in Mexico<Purposes>
 To meet the growing production demand that is expected for North and Latin Americanmarkets
 To promote highly efficient and environmentally friendly manufacturing operation byintroducing the latest energy-saving equipment
 In future, set up an integrated production base that includes component molding, sheet
metal processing, and finished product assembly, in addition to unit assembly and circuitboard assembly

TAXAN MEXICO S.A. DE C.V.
Outline of the New Factory
Location：Parque Industrial
Millenium, Arroyos,
San Luis Potosí

Number ofEmployees ：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

4

EMS Business: Strengthen Competitive Strength &Increase Production Capacity

In addition to construction of new factories overseas (Malaysia and Turkey), enhance
production facilities in domestic factories
Enhance production capacity globally and in Japan to strengthen ability to respond todiversifying customer needs

Malaysia Factory（Relocation）

Turkey Factory（Relocation）

Business Content

Business Content

Various power supply
products and PCBA for
sanitary equipment,
industrial equipment,
and Consumer product

Electrical units for air
conditioners and PCBA
for electric tools,
Automotive equipment
substrates

Enhancement details

Enhancement details

Addition of SMT andDIP lines, expansionof floor area

Addition of assembly line
2024: Installation of new
SMT line

KAGA EMS TOWADA (Facility enhancement)

Kyokuto Electric (Facility enhancement)

Business Content

Business Content

Automotive, Medicaldevice, Consumer
product and industrial
equipment, foodprocessing equipment
related, etc.

Automotive related,
PCBA for Consumer
product andindustrial equipment
relatedEnhancement details

Enhancement details

Addition of SMT lineand automatic
assembly line

Addition of 2 SMTlines

5

EMS Business: Background of Production Capacity Enhancement,
Changes in Business Environment
Capture the tailwinds provided by increasingly complex business environment andensuing changes in customer needs, and flexibly enhance production capacity inoverseas and domestic factories
External environment

Shift in customer needs

U.S.-China trade friction“De-risking” from China

Country risk

Local production for local
consumption

Exchange fluctuation risk

Reshoring of production

Enhance production capacity inoverseas and domestic factories
6

EMS Business: Vision of Growth
Aim for net sales of 300 billion yen or more in 5 years by focusing on “mobility,”“industrial equipment,” “medical,” and other growth fields as identified in MediumTerm Management Plan 2024
Net Sales of EMS Business(billion yen)

Growth fields

Aim forJPN 300 bn or morein net sales

Factoryautomation

産業機器

Automotive

Medical andhealthcare

149.889.4

93.3

99.5

2019/32020/32021/3117.8

2022/32023/35 years later（vision）

7Human Capital-Related Initiatives
Ratio of women in management positions, although on par with the industry average,
remains at 6.1%

No record of male employees who took childcare leave
Ratio of women in management
positions
9.4%

Company A

8.4%

Company B

7.5%

Company C

6.1%

KAGA Electronics

4.3%

Company D
Company E

2.2%

Ratio of male employees taking childcare
leave
38.0%

Company B

33.3%

Company C

27.3%

Company E
KAGA Electoronics

0.0%

Company D

No applicable person

Company A

Not disclosed

Aim for improving positioning within the industry(Notes)- FY2023/3- Kaga Electronics figures are non-consolidated(Source)

According to research by Kaga Electronics
based on the respective companies’ annual
securities reports

8

Human Capital-Related Initiatives
Number of male employees taking
childcare leave

Ratio of women among managers
25(%)

Consolidated
20

Parent company

16.5
13.3

1560
50
40

Number of employees(persons、Female）
Number of employees(persons、Male）
Ratio of employees(%, Male）
18.2
9.1
6.3
0301052.7

3.7

4.2

6.1

4.00

2019/32020/32021/32022/32023/3<Major initiatives>•••

Enrich training programs for managers
Switch from general office employee positions tocareer-track positions
Focus on strengthening recruitment of female newgraduates for career-track positions

20

1710

1700

2019/323
22
1

2020/31716
12021/3

22
2022022/3

50
40
30
20
0

10

19-10

190

2023/30-20-30-40-50<Major initiative>• Revised “Special childcare leave” system as ofApril 1, 2023, from the point of view ofencouraging male employees to take childcare
leave（Reference）

Ratio of Women among new graduates hired as career-track employees
Medium-termtargets
Long-term
targets

2023: 30%
2028: 40%

Results

2021: 5.8%
2022: 6.2%
2023: 18.0%
2024: 21.7% (Plan)

Key contents of the revision
When leave
can be taken
Number ofdays that canbe taken

At the time spouse gives birth → At the time spousegives birth or for care of a child under the age of 2
2 days → 7 days (may be taken in installments)

9“Everything we do isfor our customers
20 Kandamatsunagacho, Chiyoda-ku, Tokyo 101-8629
Contact: Investor Relations & Public Relations Department
TEL:+81-3-5657-0106
FAX:+81-3-3254-7133
E-mail： webmaster@taxan.co.jp
https://www.taxan.co.jp/en/

■ Forward-looking statements in these materials are based on information available to management
at the time this report was prepared and assumptions that management believes are reasonable.
Actual results may differ significantly from these statements for a number of reasons.
■ Display method in this material
Number : Truncated less than the display unit.
Ratio: After calculation in yen units, Round down one digit of Display unit.