115The

To Our Shareholders

th Fiscal Year Business Report

April 1, 2023 ▶ March 31, 2024

Stock Exchange Code: 6623

To Our Shareholders
We are pleased to extend
our greetings to our shareholders in presenting our115th annual report for the
fiscal year ended March
31, 2024 (“FY2023”).

Overview of business
During the period under review, despite acontinuing moderate recovery in conditions, theoutlook remained clouded due to factors suchas a slowdown in overseas economies and theprolonged conflict in Ukraine. Our Group faceda difficult environment for orders in the Motor
Products Group, with a slump in the air conditioning market due to the Chinese real estate
downturn and the backlash from stay-at-homedemand, as well as sluggish growth caused by
the adjustment phase in the semiconductor
market.

Net sales 110.5 billion yen
Electric Power Products Group

60

110.5

75.6

0

82.8

77.0

65.9

7.0

6
5
4

47.7

4.1

3
2
27.8

28.4

31.3

33.5

112th

113th

114th

115th

(FY2020)

1

7.5
6.6

7

40
20

(Billions of yen)

8

94.3

100
80

Operating income 7.0 billion yen

Motor Products Group
114.2(Billions of yen)

Under such circumstances, in the final fiscal
year of “the 2023 medium-term management
plan -Create the future with reliable technologyInnovation and Challenge”, our Group strove toachieve the management targets of 100.0 billion
yen in net sales, 6.0 billion yen in ordinary income and ROA of 6.0%, while promoting activities for sustainable growth. The Electric Power
Products Group worked to create new products
and businesses, including next generation digital control equipment and hydropower generation systems, while also striving to enhance
productivity through TPS improvement activities. The Motor Products Group worked on enhancing production capacity for motors for car
air-conditioner compressors, which is a growtharea, and on establishing a new factory for
package board cores (printed wiring boards).
With regard to the consolidated performancefor the fiscal year ended March 31, 2024, bothsales and income decreased compared with theprevious fiscal year, due to a decline in orders formotors for building air-conditioner compressors(FY2021)(FY2022)(FY2023)

1
0

112th

(FY2020)

113th(FY2021)114th(FY2022)

115th(FY2023)

in the Motor Products Group, despite strong
performance in the Electric Power ProductsGroup. Net sales decreased by 3.2% to 110,595
million yen, operating income decreased by
5.9% to 7,059 million yen, ordinary income decreased by 5.5% to 8,312 million yen, and net
income attributable to owners of parent decreased by 0.3% to 5,937 million yen. Nevertheless, we achieved all the management targets
set out in the medium-term management plan.
Dividend
Our year-end dividend was 80 yen per
share. Combined with the interim dividend, thetotal dividend was 160 yen per share.
Future prospects
The business conditions surrounding ourGroup are currently seeing an adjustment phasein the air conditioning market. However, due tochanges in the social environment, such as atrend toward decarbonization and the progressof digital transformation, in the medium and long

Ordinary income 8.3 billion yen
8.7(Billions of yen)

7.9

8

term, we expect to see increased demand forrenewable energy-related electric power products, expansion of the heat pump market, further
spread of electrified vehicles, and expanded
demand, advancing and multi-layering for semiconductor package boards.
In order to quickly respond to these environmental changes, we have formulated a new fiveyear plan, “2028 medium-term managementplan”, which ends in FY2028. In this plan, we
aim to enhance trust and quality, achieve sustainable growth, and improve corporate value
through the basic policies of “discovering anddeveloping new products and businesses”,“strengthening manufacturing capabilities”, and“strengthening the management base”.
We appreciate your continued understanding and support.

June 2024
President

Net income attributable to owners of parent 5.9 billion yen
8.3(Billions of yen)

8

7

7

6

6

5

4.7

5.9

5.9

5

4

4

3

3

2

2

1
0

5.5

3.3

1

112th

(FY2020)

113th(FY2021)114th(FY2022)

115th(FY2023)

0112th(FY2020)

113th(FY2021)114th(FY2022)

115th(FY2023)2

Performance at Each Group■Electric Power Products GroupNet sales 33.5 billion yen
Sales ratio

Business description
This Group is engaged in the design, manufacture and sale of electric
power equipment such as different types of transformers, protection andcontrol devices, equipment related to renewable energy, and industrial
equipment such as powder processing machines, as well as designingand executing the construction of receiving and transforming substationsin Japan and overseas.
Overview of FY2023
Sales ratio
Compared with the previous year, net sales
increased by 6.9% to 33,560 million yen while
segment income increased by 46.7% to 3,887
30％and income increased
million yen. Both sales
due to steady sales of voltage regulators for
power distribution companies and transformers
for general industries among medium transformers,
as well as an increase in domestic substation
construction.

30％

Net sales trend (Billions of yen)

31.3

28.4

113th

(FY2021)114th(FY2022)

33.5

115th

(FY2023)

Main products

Pole-mounted “TOP RUNNER” lowtransformers
loss transformers

3

Digital-type observation,
protection and control
devices

Bi-directional power
A2-TVR
A2-STATCOM
flow type SVR
Automatic voltage regulators

Hydropower turbine,
generator and control panels

Receiving and transforming
substation construction

On-load tap-changing
transformers (LRT)

Powder processing
machines

■Motor Products GroupNet sales 77.0 billion yen
Sales ratio

Business description
This Group supplies products that facilitate daily living, such as various
small motors including hermetic motors for air-conditioner compressors,
printed wiring boards, linear actuators for electric beds, shutter operators,
etc.

Overview of FY2023
Sales ratio
Compared with the previous year, net sales decreasedby 7.1% to 77,034 million yen and segment income
decreased by 24.5% to 5,075 million yen. Sales ofprinted wiring boards and motors for car airconditioner compressors
increased compared with70％
the previous year, but both net sales and segment
income decreased due to a significant drop in
domestic and overseas sales of motors for building
air-conditioner compressors.

70％

Net sales trend (Billions of yen)
82.8

77.0

65.9

113th

(FY2021)114th(FY2022)

115th(FY2023)

Main products

Hermetic motors for airconditioner compressors

Motors for submersible
pumps

Printed wiring boards

Shutter operators

Linear actuators
Controllers and handsets for linear actuators

Fans for cattle farms

Inverters
4

Financial Report
Consolidated Balance Sheets
Assets

FY2023

FY2022

86,66847,67836,436600
10,641

84,66038,71827,707517
10,493(As of March 31, 2024) (As of March 31, 2023)

Current assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets

Total assets

134,347

123,378(Millions of yen)

Liabilities andNet assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

Consolidated Statements of Income

FY2022

41,05818,762
59,821

39,58015,28454,865

68,1104,924
1,492
74,526
134,347

63,6833,425
1,404
68,513
123,378(Millions of yen)

FY2023

FY2022(From April 1, 2023
to March 31, 2024)(From April 1, 2022
to March 31, 2023)

Net sales

110,595

114,286

Cost of sales

94,954

98,118Gross profit

15,64016,167

Selling, general and administrative expenses

8,580

8,663

Operating income

7,059

7,504

Non-operating income

1,562

1,559

Non-operating expenses
Ordinary income

309

270

8,312

8,793

Extraordinary income

259

66

Extraordinary losses

30

364

Income before income taxes

8,541

8,494

Income taxes-current

2,343

2,452

Income taxes-deferred
Net income

5

FY2023(As of March 31, 2024) (As of March 31, 2023)

243

18

5,955

6,023

Net income attributable to non-controlling interests

1769

Net income attributable to owners of parent

5,937

5,954

Non-Consolidated Balance Sheets
Assets

FY2023

FY202245,052
29,4209,985
70
19,36447,45527,911
9,059
84
18,766(As of March 31, 2024) (As of March 31, 2023)

Current assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets

Total assets

74,47375,367(Millions of yen)

Liabilities andNet assets

FY2023

FY2022

15,708
7,454
23,163

20,393
6,672
27,06649,542
1,766
51,30974,47347,241
1,059
48,30075,367(As of March 31, 2024) (As of March 31, 2023)

Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Valuation and translation adjustments
Total net assets
Total liabilities and net assets

Non-Consolidated Statements of Income(Millions of yen)

FY2023

FY2022(From April 1, 2023
to March 31, 2024)(From April 1, 2022
to March 31, 2023)

Net sales

60,26160,797

Cost of sales

52,684

53,128Gross profit

7,576

7,669

Selling, general and administrative expenses

4,883

4,847

Operating income

2,692

2,821

Non-operating income

2,215

1,507

Non-operating expenses

69

88

4,839

4,239

Extraordinary income

224

23

Extraordinary losses

8

341

5,055

3,921

Income taxes-current

945

868

Income taxes-deferred

298

132

3,811

2,920

Ordinary income

Income before income taxes

Net income

6Topics
Management
Launch of 2028 medium-term management plan
We have formulated a new medium-term management plan for the five years from FY2024 toFY2028, and began activities in April of this year.
Our basic policies are “discovering and developing new products and businesses”, “strengthening
manufacturing capabilities”, and “strengthening the management base”, and we aim to achieve
consolidated net sales of 150.0 billion yen, consolidated operating income of 10.0 billion yen and ROIC
of 6% or more by FY2028.

Aichi Electric Group

2028 Medium-term Management Plan
Basic Polices
Enhance trust and quality, achieve sustainable growth and improve
corporate value by discovering and developing new products and businesses,
strengthening manufacturing capabilities and the management base.
Discovering and Developing New Products and Businesses
Actively propose new products, expand business domain, strengthen relationshipsof trust with customers and business partners, promote business development in
new markets, and discover and develop new products and businesses.

Discovering andDeveloping
New Products andBusinesses

Strengthening Manufacturing Capabilities
Establish global production bases and systems that respond to market and customer
needs, promote digitalization and automation of design, manufacturing and inspection
operations, and strengthen our manufacturing capabilities as a manufacturer.

Strengthening the Management BaseStrengthening
Manufacturing
Capabilities

Strengthening
the Management
Base

Secure and develop human resources, create an environment in which they candemonstrate their abilities to the fullest, optimize corporate governance, andstrengthen compliance and risk management.

Management Targets
FY2028 targets:

Consolidated net sales

Consolidated operating income

ROIC*

150.0 billion yen

10.0 billion yen

6% or more

Profit distribution: Our basic policy is to distribute profits in line with performance
while maintaining stable dividends, aiming for a consolidated
payout ratio of 30% or more.
*ROIC (Return on Invested Capital) = Operating income after tax ÷ (Shareholders’ equity + Interest-bearing debt)

7

Management
Completion of a new factory for package board cores
AIKOKIKI MFG. CO., LTD., our consolidated subsidiary, hasbegun production at a new production base, Shibata factory(Shibata city, Niigata prefecture), where it has been proceedingwith the installation of a manufacturing line for package board
cores.
Package board cores are expected to experience demand
growth in the medium and long term, with the accelerating spreadof high-speed communications, generative AI and IoT, as well as
the progress of digital transformation. AIKOKIKI MFG. CO., LTD.
Exterior of Shibata factoryhas been manufacturing package board cores at its head office
factory (Kasugai city, Aichi prefecture), and with the addition of
Shibata factory, production capacity will increase by approximately 25%.
In addition, we are continuing with the fourth phase expansion at Shibata factory. Our Group will
strive to further expand the package board core business.

Electric Power Products Group
Development of signal line transformer panel
We have developed a signal line transformer panel that can be fixed at thebottom of utility poles at a height that allows operation from the ground.
Traditionally, railway companies have placed high-voltage cutouts* and signal
line transformers separately at the top of utility poles.
In recent years, there has been a trend towards introducing transformers
mounted on the ground (hereinafter “pad-mounted transformers”) that store highvoltage cutouts and signal line transformers inside a box. However, there exist
narrow locations, such as elevated railways, where it is difficult to find a foundation
for installing pad-mounted transformers.
This device can be installed in such locations, improving maintainability. Thisis expected to improve the efficiency of maintenance work.
*A high-voltage cutout is a type of switch that disconnects high-voltage equipment from a circuit.

Signal line transformer
panel (mounted on a pole)

Electric Power Products Group
Development of an automatic voltage regulator (A2-STATCOM) with added
constant power factor control function
This device regulates the voltage of power distribution systems by continuously
and rapidly controlling reactive power. By adding a function to the device that
controls the power factor to a constant level, it is possible to further enhance thequality of power distribution systems. This also makes it easier to improve thepower factor of renewable energy generation equipment that uses induction
generators.
In recent years, expectations have been growing for small hydropower
generation, biomass power generation, and biogas power generation, which arerenewable energy sources that can provide a stable supply of electricity. As aresult, orders for this device have been increasing.
We will continue to develop products that contribute to a stable supply ofelectricity and that accurately capture customer needs.

Automatic voltage
regulator (A2-STATCOM)

8

Motor Products Group
50th anniversary of SHIROTORI ENA AICHI ELECTRIC CO., LTD.
Our consolidated subsidiar y, SHIROTORI ENA AICHIELECTRIC CO., LTD., celebrated its 50th anniversary.
This company is an important production base for motors andapplied equipment. In response to global market growth inelectrified vehicles, the company continued to strengthen its
production facilities in FY2023, including through the introductionof a press machine, in order to increase production of motor
cores for cars.
We will continue to strive for further development of the motor
business, including motors for cars.

Press machine

IR Activities
Just as we did last fiscal year, we participated in “the Nagoya Stock Exchange IR EXPO”. We also held afinancial results briefing for institutional investors, and explained our new medium-term management plan.
We will continue to actively engage in IR activities.

Participation in “the Nagoya Stock Exchange IR EXPO 2023”

Our booth at the event

Financial results briefing for institutional investors

The financial results briefing

An image from our website
The event venue

9

URL：https://www.aichidenki.jp/ir/briefing.html

Outline of the Company, Board of Directors and Auditors, and Status of Shares
Corporate Data (As of March 31, 2024)

Status of Shares (As of March 31, 2024)
Total number of shares authorized to be issued 23,912,200 shares
Total number of shares issued	Established:

May 27, 1942

Capital:4,053 million yen

Number of Employees: 1,090 (Consolidated: 2,805)
Head Office:

Major shareholders (top ten shareholders)

1, Aichi-cho, Kasugai city, Aichi pref.,Number of shares Shareholding ratio (%)(thousand shares)

486-8666, JAPAN
Phone +81-568-31-1111

Board of Directors and Auditors(As of June 27, 2024)

9,500,000 shares
12,650 persons

Number of shareholders

Chubu Electric Power Co., Inc.

2,326

24.4

Furukawa Electric Co., Ltd.

565

5.9

TSUCHIYA CORPORATION

500

5.2

BBH FOR FIDELITY LOW — PRICED STOCKFUND(PRINCIPAL ALL SECTOR SUBPORTFOLIO)

360

3.7

President

Kazuo Kobayashi

MUFG Bank, Ltd.

312

3.2

Managing Director

Shinobu Kato

Custody Bank of Japan, Ltd.
(trust account 4)

303

3.1

Managing Director

Masaki Kakihara

Kawaguchi Kosan Co., Ltd.

200

2.1

Director

Hisashi Tajima

Director

Yoshikazu Suda

Meiji Yasuda Life Insurance
Company

175

1.8

Director

Yukinari Yokote

164

1.7

Director

Hirotsugu Shibayama

Tokio Marine & Nichido Fire
Insurance Co., Ltd.
SWCC Corporation

129

1.3

Director

Fujio Nakaseko

Director (Outside)

Keiichiro Urakami

Director (Outside)

Hideshige Seo

Auditor

Hideki Hosoe

Auditor (Outside)

Shinji Furuta

Auditor (Outside)

Wataru Hashimoto

Note 1	Numbers of shares are rounded down to the nearest
thousand shares.
Note 2	The shareholding ratio is calculated excluding treasury
shares (2,539 shares).

Distribution of shares by shareholder
Foreigninvestors
8.5%

Individual
investors
30.8%

Domestic
investors
91.5%
Other companies, Financial institutions
and securities firms
etc.
15.8%
44.9%

10

Information on SharesBusiness Year

April 1 to March 31 of the following year

Ordinary General Meeting Juneof Shareholders

We have a program that enables shareholders to sellowned fractional shares less than one unit back to theCompany or make additional purchases from theCompany. Interested shareholders should contact the“Contacts for various procedures” below.

Record date for shareholder March 31
rights for the Ordinary General
Meeting of Shareholders
Record date for year-end March 31
dividend
Record date forinterim dividend

September 30

Contacts for various procedures

Stock Transfer Agent andSumitomo Mitsui Trust Bank, Limited
Account Management
1-4-1, Marunouchi, Chiyoda-ku, Tokyo, JAPANInstitution for Special Accounts
Handling Office

Stock Transfer Agency Business
Planning Department, Sumitomo Mitsui
Trust Bank, Limited
3-15-33, Sakae, Naka-ku, Nagoya,
JAPAN

Mailing Address
Stock Transfer Agency Business(Telephone Inquiries) Planning Department, Sumitomo Mitsui
Trust Bank, Limited
2-8-4, Izumi, Suginami-ku, Tokyo
168-0063, JAPAN
Telephone +81-120-782-031 (toll-freein Japan)
Reception hours: 9:00 a.m. to 5:00 p.m.
(excluding weekends and holidays)
Public Notices

Information regarding the share buyback
and additional purchase program for
fractional shares less than one unit
(fractional shares less than 100 shares)(Changes in name or address, buyback and additionalpurchase of fractional shares less than one unit)
For shareholders who have an account with asecurities company
Please contact your securities company.
For shareholders who do not have an account with asecurities company
P lease contact Sumitomo Mitsui Trust Bank,
Limited.

Concerning outstanding dividend payments
Please contact Sumitomo Mitsui Trust Bank, Limited.

Public notices shall be madeelectronically.
Public notice URL:
https://www.aichidenki.jp
If electronic notice is impossible due toaccidents or other unavoidable
circumstances, the notice shall be
posted in the Chunichi Shimbun which is
published in Nagoya city.

https://www.aichidenki.jp/english