2021 - 2022

Consolidated Financial Results
for the First Half of the
Fiscal Year ending March 2023

KAGA ELECTRONICS CO., LTD.
TSE Prime Market 8154

November 24, 2022

My name is Kawamura, Kaga Electronics. Thank you very much for your continued
support. I would also like to thank you for your participation in today's financial results
briefing.

0Consolidated Financial Results
for the First Half of the
Fiscal Year ended March 2023
Director,
Managing Executive Officer

Eiji Kawamura

I would like to present an overview of our financial results for Q2 of the fiscal year ending
March 31, 2023.

Summary of Financial Results for FY2023/3 2Q

FY2023/3
1H results

Net sales increased by 75.7 billion yen or 34.0%, year on year to 298.7 billion
yen. In the core electronic components business、demand remained robust in a wide
range of areas, particularly automotive and industrial equipment-related applications.



Operating income increased by 10.0 billion yen or 121.3%, year on year to18.3 billion yen. Improved gross profit margin attributable to higher sales andsales mix resulted in a substantial increase in gross profit.

All metrics from net sales to ordinary income for the quarter achieved record
highs for a second quarter.

Net sales and operating income both exceeded internal plans, by approximately
23.7 billion yen and 4.8 billion yen, respectively.

As the conditions in the semiconductor market, COVID-19, the conflict in Ukraine, andexchange rate volatility make it difficult to predict the outlook, upward revisions only
take into account the upward deviations in Q2. The initial forecasts for the period
from Q3 have not been changed.

FY2023/3
earnings
forecast

Shareholder
return(billion yen)

Net Sales

Operating income

Net income

Previous forecasts

540.0

24.0

16.0

Revised forecasts

570.0

28.0

20.0



The annual dividend was revised to 200 yen per share, up 50 yen from theprevious forecast of 150 yen (100-yen interim dividend/100-yen year-end dividend).

This amounts to an increase of 80 yen in the annual dividend from the previous
fiscal yearʼs 120 yen per share.
1

Summary.
Net sales increased JPY75.7 billion, or 34%, from the previous year to JPY298.7 billion. In themainstay electronic components business, sales grew in a wide range of fields, particularly inthe automotive and industrial equipment-related sectors.
Operating income increased JPY10 billion, or 121.3%, from the previous year to JPY18.3
billion. Gross profit increased significantly due to an increase in sales and an improvement in
the gross profit margin resulting from a better sales mix.
All items from net sales to quarterly net income reached record highs for Q2. Net sales andoperating income exceeded the internal plan by JPY23.7 billion and JPY4.8 billion,
respectively.
The forecast for FY2023/03 has been changed. The outlook for the semiconductor market,
the situation of COVID-19 and Ukraine, and exchange rate fluctuations are unpredictable. So
the upward revision reflects only the upward swing in Q2. The forecast at the beginning of
the period remains unchanged from Q3 onward.
As a result, net sales are revised upward to JPY570 billion, JPY30 billion more than theprevious forecast of JPY540 billion; operating income is revised upward from JPY24 billion to
JPY28 billion; and net income is revised upward from JPY16 billion to JPY20 billion.
Next, shareholder returns.
The annual dividend has been revised to JPY200 per share, up JPY50 from the previous
forecast of JPY150 per share. We plan to pay an interim dividend of JPY100 and a year-end
dividend of JPY100. This is an increase of JPY80 per share over the previous year's dividendof JPY120 per share.

Financial Highlights for FY2023/3 2Q（million yen）

FY2022/3
2Q Results

FY2023/3
2Q Results

Net sales

223,009

Gross Profit

27,13312.2%

40,001

SG&A

18,832

8.4%

Operating income

8,300

Ordinary income
Profit attibutable toowners of parent
EPS (yen)Exchange Rateyen / USD

FY2023/3
Forecasts

YoY(Revised on August. 4, 2022)

298,760

Progress
rate

34.0%

540,000

13.4%

47.4%

―

ー

ー

21,639

7.2%

14.9%

―

ー

ー

3.7%

18,361

6.1% 121.2%

24,000

4.4%

76.5%

8,452

3.8%

18,932

6.3% 124.0%

24,500

4.5%

77.3%

5,624

2.5%

13,412

4.5% 138.5%

16,000

3.0%

83.8%

207.39ー

510.88ーー

609.58ーー

109.80ー

133.97ーー

116.00

ー

ー

55.3%

Note: 1. The effect of exchange rates on the conversion into yen is approximately 19.4 billion yen on net sales
and 0.9 billion yen on operating income.
2. "x. x% " represents the profit margin.

2

Here are the financial highlights for Q2.
Net sales, as I mentioned earlier, were JPY298,760 million. Gross profit amounted to
JPY40,001 million, up 47.4% from the previous year. Gross margin was 13.4%, an improvementof 1.2% from the previous year.
SG&A expenses totaled JPY21,639 million, and here, SG&A expenses increased slightly in linewith the increase in sales. As a result, operating profit was JPY18,361 million, up 121.2% fromthe previous year, ordinary profit was JPY18,932 million, up 124.0%, and net income
attributable to owners of the parent was JPY13,412 million, up 138.5%.
As a result, net income per share was JPY510.88. The dollar exchange rate was JPY133.97
to the US dollar, which represents a depreciation of about JPY24 from the previous year.
Compared to the previously announced forecasts, the progress rate of net sales, operating
profit, and parent company net income is 55.3%, 76.5%, and 83.8%, respectively.

Results by Business Segment for FY2023/3 2Q（million yen）

FY2022/3
2Q Results
Electronic
Component
Information
Equipment

Software

OthersTotal

Net sales
Segment income
Net sales

194,406
7,123

910

Segment income

1,237

Segment income-109

Net sales

8,651
320

Segment income

Segment income

3.7%(Reviseed on August. 4, 2022)

16,617

6.2%

19,597
4.9%

965

4.9%

1,307
ー

95

7.3%

9,392
3.7%

223,0098,300

YoY

268,464

18,713

Net sales

Net sales

FY2023/3
2Q Results

658

7.0%

298,760
3.7%

18,361

FY2023/3
Forecasts

6.1%

38.1%

477,000

133.3%

21,3004.7%

39,000

6.0%

2,000

5.6%

4,000

ー

100

8.6%

20,000105.2%

600

34.0%

540,000

121.2%

24,000Progress
rate
56.3%

4.5%

78.0%
50.2%

5.1%

48.3%
32.7%

2.5%

95.6%
47.0%

3.0%

109.7%
55.3%

4.4%

76.5%

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.

3

This is segment information for Q2.
Electronic components accounted for 90% of total sales, and its electronic components
business recorded sales of JPY268,464 million, up 38.1% from the previous year, and segment
profit of JPY16,617 million, up 133.3%.
You can see that all other segments, including Information Equipment, software, and others,
are also profitable.

Effect of M&A for FY2023/3 2Q（million yen）

Net Sales

Gross profit / Gross profit margin

All three companies achieved significant increases in net
sales, driven by the electronic components business.

Kaga Electronics and Kaga FEI posted
substantial increases in gross profit+43,127

223,009+30,517+2,106

298,760+7,883+4,97627,13315.1%
9.3%

40,001
-111

15.9%

12.2%

13.4%

11.4%

6.3%

7.1%
2022/3
2Q

Kaga
Electronics

Kaga FEI

Excel

FY2023/3

2023/32Q

2022/3
2Q

Kaga
Electronics

Kaga FEI

Excel

FY2023/3

2023/3
2Q

SG&A / SG&A ratio

Operating income / Operating income marjin

The SG&A ratio fell, although SG&A expenses rosedue to higher sales.

Higher gross profit absorbed an increase in operating
expenses and resulted in a significant increase in operating
income for Kaga Electronics and Kaga FEI. The operating
income margin also improved.

+2,082

18,832
10.1%
7.6%

-26

8.4%

8.7%

3.3%

3.6%
2022/3
2Q

Kaga
Electronics

7.2%

6.0%

Kaga FEI

Excel

FY2023/3

2023/3
2Q

18,361+4,146

21,639+751+5,832
8,300

7.3%

5.1%
3.7%
3.3%
1.6%
2022/3Kaga
2Q
Electronics

-99
5.3%

Kaga FEI

6.1%
2.7%

Excel

FY2023/3

2023/3
2Q

Note :With respect to gross profit and operating income, figures presented above are before consolidation
adjustments between the two companies. For reference, after consolidation adjustments, gross profit
stood at -26million yen, and operating income came to 45million yen.

4

Here is a graphic representation of the impact of M&A.
Net sales are shown separately for the existing Kaga Electronics Group, Kaga FEI, which
joined the Group three years ago, and Excel, which joined the Group two years ago.
Net sales of all three companies increased significantly, driven by the electronic components
business. The breakdown is JPY43.1 billion increase for Kaga Electronics and JPY30.5 billion
increase for FEI.
As for gross profit, KAGA Electronics and KAGA FEI reported significant increases. Grossprofit margin also improved. The breakdown is JPY7.8 billion increase for Kaga Electronics
and JPY 4.9 billion increase for FEI. The gross margin ratio increased from 15.1% to 15.9% forKaga Electronics and from 9.3% to 11.4% for FEI. There is a slight decline for Excel.
As for SG&A expenses and the expense ratio, SG&A expenses increased in line with sales
growth, but the expense ratio was reduced.
Finally, operating profit. As a result, operating income increased JPY5.8 billion at Kaga
Electronics and JPY4.1 billion at FEI, which were the major factors behind the overall
increase in income.

Results by Company for FY2023/3 2Q（million yen）

FY2022/3
2Q Results

Kaga
Electronics

Net sales

125,272

Gross Profit
Operating income

Kaga FEI

Excel

YoY

168,400

34.4%

18,85015.1%

26,734

15.9%

6,402

5.1%

12,235

7.3%

Net sales

68,240Gross Profit

6,325

9.3%

11,301

Operating income

1,067

1.6%

5,214

Net sales

29,495Gross Profit
Operating income

Total

FY2023/3
2Q Results

98,757

2,103
966

3.3%

91.1%
44.7%

11.4%

78.7%

5.3% 388.3%

31,602
7.1%

41.8%

7.1%

1,991

6.3%

-5.3%

866

2.7%

-10.3%Net sales

223,009

Gross Profit

27,13312.2%

40,001

13.4%

8,300

3.7%

18,361

6.1% 121.2%

Operating income

298,760

34.0%
47.4%

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.

5

Financial Highlights: Electronic Component Segment

Net sales/Segment income（million yen）//

350000Net Sales

YoY
35000

Segment income

30000030000

268,464
25000025000

194,406
20000020000

16,61715000015000

10000010000

 Net Sales Segment income+74,057million yen

38.1％Up+9,493million yen 133.3％Up・ In the component sales business, supply/demand conditions
began to ease for some materials, and the Company wasable to achieve significant growth in sales through early
efforts to capture demand from customers in a broad range
of industries.
・ Both Kaga Electronics and Kaga FEI worked on spot sales
with automotive and industrial equipment-related customers
still facing supply shortages, which also contributed to
growth in sales/profit.
・ In parallel with these efforts, the Company proactively
proposed alternative products.
・The EMS business was a strong performer, especially in
automotive and medical equipment applications.

7,123
50000

5000

0

0

FY2022/3
2Q Results

FY2023/3
2Q Results

6

7

Financial Highlights: Information Equipment Segment 2020年

Net sales/Segment income（million yen）

YoY

/ Net Sales

25000

 Net Sales
3000/ Segment income

20000

19,597

18,7132500

 Segment income+883million yen

4.7％Up+54million yen

6.0％Up・ Sales of PCs to corporations and educational institutions
were solid, particularly high-priced products.
・ Sales of PC peripherals such as security softwareremained strong.

2000

・ In the LED installation business, large projects that had
been delayed due to shortages of materials resumed,which contributed to earnings.

15000

1500

10000

910

965
1000

5000

500

0

0

FY2022/3
2Q Results

FY2023/3
2Q Results

78Reference

Financial Highlights for FY2023/3 2Q (3 months)（million yen）

FY2022/3
2Q Results

FY2023/3
1Q Results

FY2023/3
2Q Results

149,458

QoQ

27.7%

0.1%

Net sales

117,059

Gross Profit

13,582

11.6%

19,83813.3%

20,163

13.5%

48.5%

1.6%

SG&A

9,733

8.3%

10,018

6.7%

11,621

7.8%

19.4%

16.0%

Operating income

3,848

3.3%

9,820

6.6%

8,541

5.7% 121.9% -13.0%

Ordinary income

3,885

3.3%

9,858

6.6%

9,073

6.1% 133.5%-8.0%

Profit attibutable toowners of parent

2,752

2.4%

6,984

4.7%

6,427

4.3% 133.5%-8.0%

102.48ー

266.10ー

244.79EPS (yen)

149,302

YoY

ー

ー

ー

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

8

Here is a side-by-side view of the most recent three-month results, Q1 and Q2.
As you can see, sales were almost flat in both Q1 and Q2.
As you can see, the gross profit margin improved by 0.2 points compared to Q1.
As you can see, compared to the same period last year, net sales increased significantly andthe gross profit margin improved by more than 1.5%.

Results by Business Segment for FY2023/3 2Q (3 months) Reference（million yen）

FY2022/3
2Q Results

103,782

Electronic
Component

Net sales
Segment income

3,423

Information
Equipment

Net sales

8,077

Software

Others

Total

Segment income

342

Net sales

669

Segment income-42

Net sales
Segment income
Net sales
Segment income

FY2023/3
1Q Results

133,477
3.3%

6.8%

564

7,599

400

-6.3%

-33

2.3%

249

3.3%

9,820

1.1%

17.0% -29.1%
62.3%

ー

ー

5,213

15.1%

24.8%

408

7.8% 295.6%

64.1%

149,458

27.7%

0.1%

129

6.0%

6.6%

30.1%

20.8%

-6.7%

149,302

QoQ

4.6% -24.2%
4.7%

808

4,178

YoY

5.6% 122.0% -15.7%

8,449
5.1%

498

117,059
3,848

9,018

134,986

11,147
4.2%

4,530
103

FY2023/3
2Q Results

8,541

16.0%

5.7% 121.9% -13.0%

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.

9

This chart shows Q1 and Q2 results by segment, side by side.
You can see that electronic components increased significantly in both Q1 and Q2 comparedto the previous year.

Reference

Effect of M&A for FY2023/3 2Q (3 months)（million yen）

Net Sales

Gross profit / Gross profit margin

Kaga Electronics and Kaga FEI achieved significant increases
in net sales, driven by the electronic components business.

117,059+18,904

Gross profit increased significantly for Kaga Electronics andKaga FEI. Profit margins also improved.

149,458+14,909+4,431
13,582-1,414

14.2%
9.2%
6.5%
2022/3
2Q

Kaga
Electronics

Kaga FEI

Excel

FY2023/3

2023/3
2Q

-19

16.3%

11.6%

2022/3
2Q

20,163+2,200Kaga
Electronics

13.5%

10.8%
7.0%
Kaga FEI

Excel

FY2023/3

2023/3
2Q

SG&A / SG&A ratio

Operating income / Operating income marjin

Although SG&A expenses increased due to higher sales,
the SG&A ratio fell.

Kaga Electronics and Kaga FEI contributed significantly toincreases in operating income. The operating income margin
also improved.
8,541+1,452+1,155
9,733
10.2%
7.1%

9.3%

8.3%

+711

+20

11,621+3,300

7.8%

6.4%

4.1%
2.9%
2.0%

3.8%

3.4%
2022/3
2Q

Kaga
Electronics

Kaga FEI

Excel

FY2023/3

2023/32Q

3.3%

2022/3
2Q

-54

7.1%

3,848

Kaga
Electronics

5.7%

4.3%

2.8%

Kaga FEI

Excel

FY2023/3

2023/3
2Q

Note :With respect to gross profit and operating income, figures presented above are before consolidation 10
adjustments between the two companies. For reference, after consolidation adjustments, gross profit
stood at -52million yen, and operating income came to -19million yen.

Reference

Results by Company for FY2023/3 2Q (3 months)（million yen）

FY2022/3
2Q Results

Kaga
Electronics

Kaga FEI

Net sales

65,157Gross Profit

9,261

4.1%

84,061

13,040

15.5%

6,251

7.4%

QoQ

29.0%

-0.3%

13,693

16.3%

47.9%

5.0%

5,983

7.1%

123.0%

-4.3%

41.3%

6.8%

Operating income

2,683
36,095Gross Profit

3,316

9.2%

5,784

12.1%

5,516

10.8%

66.4%

-4.6%

721

2.0%

3,040

6.4%

2,173

4.3%

201.4%-28.5%Net sales

15,807Gross Profit
Operating income

Total

84,33914.2%

YoY

Net sales

Operating income

Excel

FY2022/3
2Q Rwsults

FY2023/3
1Q Results

47,75251,005

17,209

1,024

6.5%

458

2.9%

14,392

986

5.7%

462

2.7%

149,302-9.0%-16.4%

1,004

7.0%

-1.9%

1.9%

403

2.8%

-11.9%-12.7%

27.7%

0.1%

Net sales

117,059

149,458

Gross Profit

13,582

11.6%

19,83813.3%

20,163

13.5%

48.5%

1.6%

Operating income

3,848

3.3%

9,820

6.6%

8,541

5.7%

121.9%-13.0%

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.

11

The following are the results by company for Kaga Electronics, FEI, and Excel.
As you can see, Kaga Electronics was flat in Q1 and Q2, but its sales increased significantly
compared to the previous year.
As for FEI, you can see that it increased in Q2 compared to Q1.
As for Excel, sales in Q2 were slightly lower than in Q1.

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

180000

Reference

YoY

Net Sales Net Sales+31,203million yen

Segment income

 Segment income+4,175 million yen 122.0％Up

30.1％Up

25000

160000133,477

140000134,98620000

QoQ

120000103,782
10000015000

1.1％Up

 Net Sales+1,508million yen

 Segment income-1,418million yen 15.7％Down

80000

9,018

10000

7,599

60000

40000

3,423

5000

20000

0

0

FY2022/3
2Q Results

FY2023/3
1Q Results

FY2023/3
2Q Results

1213Financial Highlights: Information Equipment Segment(3 months）
Net sales/Segment income（million yen）

14000

Reference

YoY Net Sales/

Net Sales/

Segment income+372million yen

4.6％Up2000

 Segment income+58million yen 17.0％Up

1800

11,147

12000

1600

1400

QoQ

10000

 Net Sales

8,449

8,077

1200

 Segment income

8000-2,697million yen 24.2％Down-164million yen 29.1％Down

1000

6000

800

564
600

400

4000

342

400

2000

200

0

0

FY2022/3
2Q Results

FY2023/3
1Q Results

FY2023/3
2Q Results

13

14

Factors of Increase / Decrease in Operating Income

vs Internal Plan

YoY
（million yen）

+2,911（million yen）

-2,807+1,27918,361+9,957-839+4,421

Spot sales SG&A

Spot sales

18,361

SG&A

13,500
Sales volume
Sales mix

8,300
Sales volume
Sales mix

Income Increase: 10,060

FY2022/3
2Q Results

FY2023/3
2Q Results

Upside: 4,861
FY2023/3
2Q Plan

FY2023/3
2Q Results
14

Here is a graph showing the factors that caused operating income to fluctuate in Q2.
Operating profit increased JPY10.06 billion over the previous year.
Here is a breakdown of the profit increase.
JPY9.9 billion from an increase in sales mix and sales volume, JPY2.9 billion from spot sales,
and JPY2.8 billion from an increase in SG&A expenses.
Compared to the internal plan, this is an upward revision of more than JPY4.8 billion.
The increase in sales volume and sales mix was JPY4.4 billion, JPY1.2 billion was due to spot
sales, and JPY0.8 billion was due to an increase in SG&A expenses.

Balance Sheet Main Items
Total assets

Total liabilities and net assets（million yen）

（million yen）

290,923

290,923+18,783+18,783

272,139

272,139

237,004

237,004
165,995-344

166,339251,765
233,984+17,780

Current assets

Total liabilities

141,942

200,179

124,928
95,06236,825

38,1552021/32022/339,158+1,0032022/9105,800+19,1282022/32022/9Total net assets

Non-current assets
2021/315

I would like to explain the main items on the balance sheet.
Total assets amounted to JPY290,923 million, an increase of JPY18,783 million from the endof March.
Current assets totaled JPY251,765 million, an increase of JPY17,780 million.
Fixed assets totaled JPY39,158 million, an increase of JPY1,003 million.
Liabilities and net assets.
Total liabilities amounted to JPY165,995 million, down JPY344 million.
Net assets totaled JPY124,928 million, an increase of JPY19,128 million.

16

Balance Sheet Main Items
Inventories
100,000

46.1

Accounts receivable/Accounts payable（ million Yen, day）

43.7

93.7

50.0
200,000

Inventory turnover

90,000（ million Yen, day）
90.0

89.0

76.3

A/R turnover

79.8

32.8

70.0

80,00071,28668.6

30.0+8,679A/P turnover

59.0

70,00050.0

150,000

62,60710.0

120,948

60,000124,540

Notes and A/R+3,591

30.0

108,394

50,000-10.0

40,000100,000

37,94879,854-30.0

30,00086,49384,968-1,52510.0

Notes and A/PInventories-10.0

50,00020,000

-50.0

-30.0

10,000-70.0

02021/32022/32022/9Note︓ Inventory turnover ＝ Inventories ÷ Net Sales × 183（day）

0

-50.0

2021/32022/32022/9Notes︓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）

16

Inventories are among the major items on the balance sheet.
The total amount was JPY71,286 million, an increase of JPY8,679 million from the end of
March. However, inventories increased by about JPY33.3 billion compared to the end of
March 2021, mainly due to the shortage of electronic components.
However, based on current business volume, an appropriate inventory level would be about
JPY50 billion. As the President will explain later, we plan to shrink this inventory amount by
the end of March next year.
As for notes and accounts receivable and notes and accounts payable, the balance of notes
and accounts receivable was JPY124,540 million, an increase of JPY3,591 million. Accountpayables amounted to JPY84,968 million, a decrease of JPY1,525 million.
You can see that both accounts receivable and accounts payable turnovers have decreased.

17

Balance Sheet Main Items
Cash and Deposits/Interest Bearing Debt
70,000

0.42

0.48

0.42

（million yen, times）
0.50

0.10
-0.08

Cash flows

0.03

D/E ratio
Net D/E ratio

0.00

60,000-0.50

52,504
51,171-1.00-2,453

Interest bearing debts+7,432

45,636

Cash flows fromoperating activities

Cash and deposits+1,33348,48450,00010,650

9,999

1,155
-1,554-1.50-3,492

Cash flows frominvesting activities-3,187

Cash flows fromfinancing activities-6,772-6,85141,051-2.00

40,00038,261-2.50

2021/3末

30,000-3.00

2021/32022/32022/9Note︓1. D/E ratio＝ Interest bearing debts ÷ Shareholderʼs equity
2. Net D/E ratio ＝（Interest bearing debts - Cash and deposits） ÷

FY2021/3

2022/3末

FY2022/3

2022/9末

FY2022/9

Shareholderʼs equity

17

Cash and deposits / cash flow.
Cash and deposits totaled JPY48,484 million, an increase of JPY7,432 million. Interestbearing debt totaled JPY52,504 million, an increase of JPY1,333 million.
As for cash flow, operating cash flow was JPY10.65 billion. Investment cash flow used was
JPY3,492 million. Financing cash flow used was JPY3,187 million.

Forecasts for FY2023/3

19

Forecasts for FY2023/3（million yen）

（announced on August 4, 2022)

FY2022/3
Results
Net sales

FY2023/3
Previous forecasts

495,827

540,000

Diff. fromprevious
forecasts

FY2023/3
Current forecasts

570,000

YoY

5.6%

15.0%

Operating income

20,9154.2%

24,0004.4%

28,000

4.9%

16.7%

33.9%

Ordinary income

21,456

4.3%

24,500

4.5%

29,000

5.1%

18.4%

35.2%

Profit attibutable toowners of parent

15,401

3.1%

16,0003.0%

20,000

3.5%

25.0%

29.9%

EPS (yen)

576.46609.58761.70ー

152.12185.24

ROE

15.7%

14.0%

17.0%

ー

3.0pt

1.3pt

140.00

50.00

80.00

120.00
Annual dividend (yen)150.00200.00Ordinary dividend

80.00

Ordinary dividend

140.00Extraordinary dividend

40.00

Commemorative dividend 10.00

Ordinary dividend

Commemorative dividend 10.00
Extraordinary dividend

50.00

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

19

Here we would like to explain our full-year forecasts for FY2023/03.
As mentioned at the beginning of this report, we have revised our full-year forecasts.
We have revised upward our previous forecast for net sales from JPY540 billion to JPY570
billion, operating profit from JPY24 billion to JPY28 billion, ordinary profit from JPY24.5 billion
to JPY29 billion, and net income attributable to owners of the parent from JPY16 billion to
JPY20 billion.
With this upward revision, net income per share will be JPY761.7 and ROE will be 17.0%. The
annual dividend is JPY200, an increase of JPY50. The dividend payout ratio will be 26.3%.

Forecasts by Business Segment for FY2023/3（million yen）

（announced on August 4, 2022)

FY2022/3
Results
Electronic
Component
Information
Equipment

Software

OthersTotal

Net sales

433,852

Segment income

18,107

Net sales

39,616

Segment income

2,085

Net sales

2,767

Segment income
Net sales
Segment income
Net sales
Segment income

FY2023/3
Previous Forecasts-26

477,000
4.2%

5.3%

4.5%

2,000
100

5.1%

600
24,000

2,000

5.1%

200

2.5%

20,0003.0%

540,000
4.2%

5.0%

4,000
2.5%

20,0003.2%

24,80039,000

4,000
-1.0%

495,827
20,915507,000

39,00019,590626

21,300

FY2023/3
Current forcasts

1,000

3.0%

570,000
4.4%

28,0004.9%

Diff. fromprevious
forecasts

YoY

6.3%

16.9%

18.8%

37.0%

ー

-1.6%

ー

-4.1%

ー

44.5%

ー

ー

ー

2.1%

ー

59.7%

5.6%

15.0%

16.7%

33.9%

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.

20

This is incorporated into the forecast for each segment.
All of the JPY30 billion increase in sales is added to the electronic components business.
As a result, net sales of the electronic components business are expected to increase from
JPY477 billion to JPY507 billion and segment profit from JPY21.3 billion to JPY24.8 billion.

Reference22Segment disclosure associated with the Medium-Term
Management Plan
Continuous disclosure based on current segmentation according to legal financial accounting,along with voluntary disclosure based on segmentation in line with the new Medium-Term
Management Plan
Current segments

Segments in Medium-Term Management Plan

Legal financial accounting

Management Accounting

Components sales businessElectronic
components

 Sales of semiconductors
 Sales of general electronic
components
 Sales of various kinds ofdevices

EMS business Electronic equipment
manufacture contracting
services
 Sales of PCs and PC
peripherals

Informationequipment

 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

 Sales of semiconductors

Electronic
components

 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

22

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

Reference（million yen）

FY2021/3
2Q Results
Electronic
Component

EMS

CSI

OthersTotal

Net sales
Segment income
Net sales
Segment income
Net sales

117,287851

1,160

Net sales

5,438

Net sales
Segment income

88

5.3%

3,322
910

5.0%

6.2%

4.9%

64

1.1%

223,009
2.3%

8,300

3.7%

YOY

202,867

40.1%

11,689

5.8% 196.1%

5,311

30.0%
7.6%

19,5976,052
1.6%

FY2023/3
2Q Results

69,486

18,713

188,859
4,434

3,948

2.7%

53,45323,192

Segment income

Segment income

144,790
0.7%

42,9402,265

FY2022/3
2Q Results

965

59.9%
4.7%

4.9%

6.0%

6,809

12.5%

369

5.4% 473.2%

298,760

34.0%

18,361

6.1% 121.2%

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.

23

The table here shows Q2 results for each segment of the medium-term plan into new
segments.
The past three fiscal years are listed side by side.
You can see that electronic components and EMS have been on a steady rise for the past
three fiscal years.
On a Q2 results basis, electronic components sales totaled JPY202,867 million, up 40.1% fromthe previous year, and segment income totaled JPY11,689 million, up 196.1% from theprevious year.
EMS totaled JPY69,486 million, up 30.0% from the previous year, and segment income totaled
JPY5,311 million, up 59.9%.
These two segments, electronic components and EMS, are the major factors behind theincrease in sales and profit.

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

78,6652,172
1,262

Net sales

8,077

Segment income
Net sales
Segment income
Net sales
Segment income

101,444
2.8%

27,118Segment income

342

4.7%

2,612

7.7%

11,147
4.2%

564

1.6%

79

5.1%

2.8%

149,302
3.3%

9,820

5,148

QoQ

28.9%

-0.0%

35,619

31.3%

5.2%

2,698

7.6% 113.8%

3.3%

400

4.6% -24.2%
4.7%

17.0% -29.2%

3,967

24.1%

289

7.3% 479.4% 262.4%

149,458
6.6%

YoY

5.1% 137.0% -21.3%

8,449

2,842

117,059
3,848

6,541

FY2023/3
2Q Results

101,422
6.4%

33,8673,198
49

FY2023/3
1Q Results

8,541

27.7%

39.6%

0.1%

5.7% 121.9% -13.0%

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.

24

This is a side-by-side presentation of results by mid-term business segment for Q1 and Q2,
with actual results for each three-month period.
Both electronic components and EMS have seen significant increases in sales and profits in
Q1 and Q2 compared to the previous year, but you can see that Q1 and Q2 have been
almost flat.
As for CSI, there is the slight decrease in sales in Q2. This was due to the significant
increase in Q1 with the for new students project and other factors.

Quarterly Net Sales Trends

Net Sales（million yen）

143,143
129,675
117,059
105,949
4,120
568
10,636

4,530
669
8,077

4,478
603
7,587

6,460
926
13,315

149,302

149,458

4,178
498
11,147

5,213
808
8,449

Total
YoY
QoQ

︓ +32,398
︓
+156

Other
YoY ︓

+683

QoQ ︓

+1,035

Software90,624

103,782

117,005

122,440

133,477

134,986

YoY
QoQ

︓
︓

+139
+310

Information equipment
YoY
QoQ

︓
︓

+372
-2,697

Electronic equipment
YoY
QoQ

FY2022/3
1Q Results

FY2022/3
2Q Results

FY2022/3
3Q Results

FY2022/3
4Q Results

FY2023/3
1Q Results

︓ +31,203
︓ +1,508

FY2023/3
2Q Results

25Quarterly Segment Income Trends

Segment Income（million yen）

9,820
249
564

Total

8,541

YoY
QoQ

︓ +4,692
︓ -1,278

YoY
QoQ

︓
︓

YoY
QoQ

︓
︓

408

6,357
152
305

4,452
217

3,848

568

103
342

6,257
152
83
869

Other
+305
+159

Software
+171
+162

9,018
7,599
5,878

3,699

129
400

Information equipment
YoY
QoQ

5,105

3,423

︓
︓

+58
-164

Electronic equipment
YoY
QoQ

-67

-42

-0

FY2022/3
1Q Results

FY2022/3
2Q Results

FY2022/3
3Q Results

︓ +4,175︓ -1,418-33
FY2022/3
4Q Results

FY2023/3
1Q Results

FY2023/3
2Q Results

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

26

Net Sales by Region

Net Sales（million yen）

143,143

149,302

149,458

129,675

Total
YoY
QoQ

︓ +32,398
︓
+156

YoY
QoQ

︓ +17,020
︓ -1,954

117,059
105,949
78,48480,24078,286

Japan

68,562
North America

61,26655,101

7,454
3,915

39,477

FY2022/3
1Q Results

8,721
4,301

42,770

FY2022/3
2Q Results

8,675
3,938

9,249
4,718

48,49850,690

FY2022/3
3Q Results

FY2022/3
4Q Results

11,22812,422

5,849

4,987

51,983

FY2023/3
1Q Results

YoY
QoQ

︓ +3,701
︓ +1,194

YoY
QoQ

︓
︓

YoY
QoQ

︓ +10,991
︓ +1,778

Europe+685-862

53,761Asia

FY2023/3
2Q Results

27

Here are the sales by region.
As of Q2 FY2023/03, sales by region were JPY78,286 million in Japan, which is in the grayarea. The dark blue area at the bottom is Asia, with sales of JPY53,761 million.
Green is for North America, with sales of JPY12,422 million, and orange is for Europe, withsales of JPY4,987 million.

Exchange Rate/FOREX Sensitivity（Reference）
Effect of 1% change（Million Yen）

OperatingincomeForex
Assumptionfor2023/3(yen)

584

27

130.00

18.94

147

4

20.00

3.42

3.79

145

8

3.50

HKD

14.13

17.07

98

3

16.50

EUR

130.90138.735

0

FY2022/3
2Q Results

FY2023/3
2Q Results

（Yen）

（Yen）

USD

109.80133.97

RMB

16.66

THB

Net sales

135.00Note: Forex assumption for2023/3 3Q onwards

28

Finally, the exchange rate.
The applicable exchange rates as of this Q2 were JPY133.97 for the US dollar, JPY18.94 for
Chinese yuan, JPY3.79 for Thai baht, and JPY17.07 for the Hong Kong dollar.
For your reference, the impact of the 1% change in the US dollar exchange rate on sales andoperating profit will be JPY584 million in sales and JPY27 million in operating profit; theimpact of the Chinese yuan will be JPY147 million in sales and JPY4 million in operating
profit; the impact of Thai baht will be JPY145 million in sales and JPY8 million in operating
profit; and the impact of the Hong Kong dollar will be JPY98 million in sales and JPY3 million
in operating profit.
For FY2023/03, our internal plan assumes exchange rates of JPY130 for the US dollar JPY20
for the Chinese yuan, JPY3.5 for Thai baht and JPY16.5 for the Hong Kong dollar.
As of Q2 FY2023/03, the overall foreign currency transactions accounted is just under halfof the total transaction value, and of those foreign currency transactions, just over half weredenominated in US dollars.

29

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

I have now presented an overview of the financial results for Q2 2023. Thank you foryour attention.

30