2023
2021 - 2023

Financial Results Briefing Material
for the Fiscal Year ended March 2024

KAGA ELECTRONICS CO., LTD.
TSE Prime Market 8154

May 23, 2024

I am Kado, President of KAGA ELECTRONICS.
Thank you for your continued support and cooperation in our IR activities.
I would now like to present our management topics for the fiscal year ended March2024.

Management Topics
Representative Director,
President & COO

Ryoichi Kado

The main topics are; summary of the fiscal year ended March 31, 2024, progress of
Medium-Term Management Plan, progress of sustainability medium- to long-term
management plan, etc.

Summary of FY2024/3 Results
In the Electronic Component segment, the impact of ‘inventory adjustment by
Initialcustomers’ and ‘disappearance of spot demand’ was factored into our forecast forforecast
lower net sales and operating income.


FY2024/3
Summary
Results‘Spot demand’ made no contribution to earnings as expected.
The impact of inventory adjustment by customers on 1H results appeared lessthan initially expected, and both net sales and operating income returned
above the internal plan.
The impact of inventory adjustment by customers began on a full scale in 2H
and the upward swing gradually narrowed, but the full-year plan exceeded thetarget.
1Q

2Q

3Q

4Q

Operation margin

6.9 bn13.8 bn

20.4 bn

25.8 bn

Progress rate

28.0％

55.5％

82.0％

103.4％vs InternalPlan＋2.0 bn＋3.8 bn＋2.0 bn＋0.8 bn(billion yen)

Outlook for
FY2025/3



Upside: Medium- to long-term market growth scenario, especially in the automotive
sector, remains unchanged.
Downside: Inventory adjustment by customers continue for some time, and a fullfledged recovery is expected in 2H of FY2025/3.
Salary increase: Decided to increase salaries to invest in human capital contributing tofuture growth
Even after factoring in the impact of 1.5 billion yen, we aim to return to an upward
trend of higher net sales and operating income.
2

The first topic is the summary of the financial results for the fiscal year ended March 31, 2024.
Our forecast for the year ended March 31, 2024, was 'lower net sales and operating income,'reflecting the two major factors in the electronic components segment: 'impact of inventory
adjustment by customers' due to the easing of supply and demand for semiconductors andelectronic components, and 'disappearance of spot demand' that contributed to earnings growthin the past two fiscal years.
Looking back at the previous year, the disappearance of spot demand was as expected, but the
impact of inventory adjustment by customers in the first half of the year turned out to be lessthan our expectation at the beginning of the year, and therefore both net sales and operating
income exceeded the internal plan.
Meanwhile, as we entered in the second half, the impact of inventory adjustment by customers
eventually began in full swing. As a result, the upward swing in operating income gradually
narrowed. In the end, we were able to exceed the target, albeit by 0.8 billion yen.
Looking ahead to the year ending March 2025, there will be no change in the scenario in which
we anticipate medium- to long-term market growth, centered on the automotive market.
However, we need to be prepared that inventory adjustment by customers continues for thetime being and a full-fledged recovery in demand is not expected until the second half of 2025.
In addition, we decided to increase salaries across the Group to invest in human capital
contributing to future growth. This will bring in a 1.5 billion yen increase in personnel expenses,
but even after factoring in the impact of this increase, we hope to make the current fiscal year ayear of ‘returning to an upward trend of higher net sales and operating income.’

Factors behind Changes in Operating Income
for FY2025/3
Operating Income（billion yen）

25.8bn+1.6△1.5

Sales Volume
Personnel
Sales mix
expenses+0.1

26.0bnCost increase factors incorporated
into FY2025/3 forecasts⑴ Salary increases 1.0 bn
・ Kaga Electronics: Up 25,000 yen /month across the board(average rise of 7.8%)・ Group companies: rise of 2.0% to 7.5%

Other
expenses⑵ New graduate salary, regularsalary increases, etc.
0.5 bnIncome Increase:around 0.2 bn
2024/3Results*Operating income forecast:+1.6 billion yen (+6.4%) in real terms,
excluding the effects of the above factors
2025/3Results
3

This graph illustrates the factors behind the changes in operating income for the year
ending March 2025 that I just mentioned.
A 1.5 billion yen increase in personnel expenses, including salary increases, salaries for
new graduates and regular salary increases, was factored in our forecast.
The graph shows an increase in operating income of approximately 0.2 billion yen, but
on a real basis, excluding the effects of these increase factors, it is +1.6 billion yen(+6.4％).

Inventory Reduction
Inventory amount / Inventory turnover days
■Inventory amount (manufacturing business)■Inventory amount (trading company business)
140

900

－Inventory turnover (consolidated)

JPY 78.8 bn－Inventory turnover (manufacturing business)

JPY 71.2 bn

800

JPY 70.5 bn

JPY 71.0 bn
700

JPY 62.6 bn

30.3

600

500

84.0

27.1

89.0

30.1

30.4
80.1

200

100

JPY 56.2 bn

27.0
78.1

27.0

100

25.6

JPY 54.7 bn
70.9days

79.0

74.8

65.5

46.1

34.3

35.4

43.3

43.7

47.9

26.8

31.4

32.6

40.8

2022/62022/9

48.5

46.6

33.7

38.9

40.8

120

JPY 66.4 bn

JPY 63.5 bn

76.7

400

300

－Inventory turnover (trading company business)

37.3

43.5

23.4

24.2

80

60

45.0
42.3
31.5

36.4

36.8days
36.0

40.8

29.3

26.6days

40

20

30.4
0

0
2022/32022/122023/32023/62023/92023/122024/3

4

The next topic is ‘changes in inventory’, which is one of our most important management
issues that we are paying constant attention.
This graph shows our consolidated inventory, broken down into the ‘manufacturing’business, mainly EMS, and the ‘trading company’ business, mainly component sales.
In the year ended March 2024, inventories hovered around 70.0 billion yen during theperiod, but the year-end inventory stood at 54.7 billion yen, allowing us to reduce ourinventory position from the beginning of the period.
That said, we have yet to reach our target of ‘50.0 billion yen or less,’ and recognize thatfurther reduction is necessary.
Going forward, we will continue efforts to achieve the target of ’50.0 billion yen or less’and ‘inventory turnover of 30 days.’『Medium-Term Management Plan 2024』
Progress of Management targets


The Company formulated the three-year Medium-Term Management Plan 2024 in November 2021. Excluding the
new M&A element, management targets for all the three KPIs of net sales, operating income, and ROE set
for the final year of the Plan were achieved in the fiscal year ended March 31, 2023, the first year of thePlan. Based on the results of the first year, the Company updated its earnings forecast for the final year, andpresented them as the “latest outlook.”The earnings forecast for the fiscal year ending March 31, 2025, announced at this time deviates from the “latest
outlook” partly due to unexpectedly prolonged inventory adjustment and impact of salary increases.
Accordingly, the Company has positioned earnings forecast as “commitment” and the latest outlook as“challenging targets,” and will work toward accomplishment of the Plan in the final year.
First-year
results

Initial plan
(Announced on November 25, 2021)

FY2023/3

Latest outlook(Announced on May 11, 2023)

Second-year
results

Final-year
earnings forecast

FY2024/3

FY2025/3

750.0 bn

JPY

Net Sales

Organic growth :JPY 600.0 bn
Including new M&As:

JPY

608.0 bn

542.6 bn

JPY

25.8 bn

JPY[No change]

JPY

30.0 bn or higher

JPY

555.0 bn

JPY 150.0 bn

Operating
IncomeROE

JPY

20.0 bn
Stable8.5% or higher

JPY

32.2 bn

19.6％

JPY

stable10.0% or higher

14.5％

26.0 bn

11.5％
5

I now move on to the progress of the Medium-Term Management Plan 2024.
In November 2021, the Company formulated and announced the three-year MediumTerm Management Plan 2024.
In the year ended March 2023, the first year of the plan, we were able to achieve all the
KPIs of net sales, operating income, and ROE, excluding the new M&A element, twoyears ahead of schedule.
Based on the first year’s results, we updated its earnings forecast for the final year andpresented it as the "Latest Outlook“ on May 11, 2023.
The operating income forecast of 26 billion yen announced in the Consolidated Financial
Results for the Fiscal Year ended March 31, 2024, on May 9 still leaves a gap from the ‘30billion yen or more’ in the Latest Outlook.
This is attributable to the lingering effects of inventory adjustment by customers and theeffects of salary increases, both of which were not incorporated in the Latest Outlook ayear ago. With this in mind, we position these earnings forecast as "commitment" to ourstakeholders, and the Latest Outlook as "challenging targets" that I have set for myself
and will work to accomplish the plan in the final year.

Medium-Term Management Plan 2024 - Progress ofManagement Measures Overall, we expect to achieve initial targets through efforts on key issues as per our basic policy.
key issues
Further
Reinforcement ofProfitability• Selection and concentration in
growth fields• Reinforcement and expansionof EMS business and overseas
business

Reinforcement ofManagement Base

• Reinforcement of corporate
governance• Efficient Group management• Investments in human capital

Major outcome

Evaluation• Started operation of a new plant in
Mexico (April 2024)○• Established a special leave system formale employees to take parental leave
Utilization rate of 73.7% (FY2024/3)• Group-wide salary increase decided○(March 2024)

Creation of New
Businesses• Initiatives in new fields• Promotion of open innovation
through venture investments• M&A efforts aimed at
discontinuous growth

Promotion of SDGs
Management*See the Progress of the Sustainability Medium- to Long-term Management Plan in thefollowing page.

• Investment in start-up companies
through CVC (5 cases in FY2023/3, 1
case in FY2024/3)△

6

I move on to the progress of the management measures in the medium-term
management plan.
Our basic measures are; further strengthening profitability, strengthening ourmanagement foundation, creating new businesses, and promoting SDGs management.
This chart summarizes the progress on each key issue. As shown here, overall, we aremaking headway in line with our initial plan.
First, looking at further strengthening profitability, we were able to launch a new plant in
Mexico on April 2024, in an effort to strengthen and expand our EMS business andoverseas business.
To strengthen our management foundation, we actively invested in human capital, suchas encouraging male employees to take parental leave and increasing salaries that I
explained earlier.
However, in terms of creating new businesses, investment in start-up companies throughCVC is currently underway, but we have not been able to bring any new M&A to fruition,
so at this point we have rated this as "ー"(unfavorable).
For details on "promoting SDGs management," I will discuss in the following slide.

Started a New Factory in Mexico to expand EMS Business In April 2024, the new Mexico plant began operation as initially planned.
 Aiming for ‘sales of 50 billion yen’ over the next 5 years to meet the growing production
demand that is expected for North and Latin American markets
 Launched "TAXAN-SWE MEXICO," a finished product assembly plant adjacent to the new plantin Mexico
We will establish an integrated production base that encompasses component molding, andsheet metal processing, in addition to circuit board assembly.

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

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

7

Let me touch on our new plant in Mexico, which I mentioned earlier.
Since its establishment in 2017, our subsidiary TAXAN MEXICO has operated in an EMS
business, primarily in the assembly of lighting units for 4-wheeled vehicles for the U.S.
market. To meet the expected increase in production demand for the North and Latin
American markets, we constructed a new plant at a nearby industrial area, which began
operation as planned this April.
Further, we launched another plant "TAXAN-SWE MEXICO," a finished product assemblyplant adjacent to the new plant.
Going forward, we will establish an integrated production base in Mexico thatencompasses component molding, sheet metal processing, in addition to circuit board
assembly. We will achieve ‘sales of 50 billion yen’ over the next five years.

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

2024: 40% (1%)
By 2024: Information
gathering/analysis and determinationof policy
・In-house power generation/external
procurement
・Solar panel/biomass power
generation/renewable energy
businesses
2024: 85% (78.5%)

Diversity and humanresource management• Ensuring diversity in core humanresources (Women, foreign
nationals, mid-career hires)• Initiatives to employ elderly workers
and persons with disabilities

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

S

G

Medium-term targets

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
2030: 100%
2030: 50%
2050: 100%
2030: 30%
2050: 100%

2030: 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 values at the time of planning: Nov. 2021

8

Here I discuss the progress we made during the second year of our sustainability
medium-term management plan.
This slide shows the mid- and long-term targets for each theme set under thesustainability medium-term management plan.
I will brief on the progress in ESGs for each category in the following pages.
Today, let me focus on the highlights in fiscal 2023, as we covered the outcomes in fiscal
2022 at the briefing a year ago.

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

Issues to address and issues to examine

Main activities and progress in FY2022 / FY2023
FY2022: (1) Introduced 1.2% of total electricity
from renewable sources (2) Study on measures to‘achieve 40% in FY2024’• Adoption of renewable energy at domestic
sales offices

Achievement of shift
to 100% renewableenergyE• Adoption of renewable energy at domestic
manufacturing sites• Adoption of renewable energy at overseas
manufacturing sites

FY2023: (1) Introduced 5.1% of total electricity
from renewable sources (2) Decided to purchasenon-fossil certificates to achieve target of ‘40%
renewable energy in 2024’, and to quantify
greenhouse gas emissions and set a reduction
target in FY2024
FY2022:Calculated power generation to installsolar panels at sites in Aomori, Fukushima, andTottori. Started the detailed design.
FY2023:Installed solar power generation system in
Towada factory (December 2023) and Fukushima
factory (February 2024)
FY2022: Started to introduce renewable energyderived electricity using solar panels at sites in
China (Hubei) and Vietnam. Expected to cover
30%-50% of annual electricity usage at each site.
FY2023: Installed solar panels in Mexico newfactory (April 2024)

Shift to electricity for• Switch to electric vehicles for domestic sales
company-owned
vehicles (EV, HV, PHV, FCV)
vehicles

FY2022: The ratio of electric vehicles increased by
1.2pt year on year to 82.0% (as of March 31,2023).
FY2023: The ratio of electric vehicles increased by
3.0pt year on year (as of March 31, 2024)

9

Let me begin with the “E” of Environment.
The Group are making headway to ‘achieve 100% renewable energy.’
Our major progress in fiscal 2023 is the installation of renewable energy facilities withsolar panels at our domestic manufacturing sites, KAGA EMS TOWADA and KAGA MICROSOLUTION Fukushima Business Office.
Also, solar panels have been installed at our overseas manufacturing bases, the newplant in Mexico, which I introduced earlier, in addition to the Hubei Factory in China andthe Vietnam Factory.

Introduction of Renewable Energy Solar power generation facilities will be installed step by step to achieve 100% renewable energy.
 We continue to proactively install facilities for environmentally sustainable business growth.

KAGA EMS TOWADA CO.,LTD.

写真

KAGA MICRO SOLUTION CO., LTD.
Fukushima Factory

Generating capacity

Generating capacity

Annual energy
production

Annual energy
production

289,444kWh

Renewable energy
ratio

写真

10～20％

20～30％

Instruction period

Instruction period

December, 2023

February, 2024

Hubei Factory

Vietnam factory

写真158,761kWh

Renewable energy
ratio

Generating capacity

Generating capacity

Annual energy
production

Annual energy
production

747,934kWh

Renewable energy
ratio

写真

70～80％

1,086,118kWh

Renewable energy
ratio

30～40％

Instruction period

Instruction period

November, 2022

April, 2022

Note: Renewable energy ratio indicates the projected percentage of renewable energy
in total consumption at each site.

10

Here are representative sites that use renewable energy.
Generation capacity and other details for each site are listed here. Most of the factories
cover several tens of percent of their annual electricity consumption.
In particular, the Vietnam factory, the largest of all, is expected to cover more than 70%
of its electricity needs.
We are committed to sustainable business growth while giving consideration to theenvironment, as we continue to proactively install power generation facilities.

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

Diversity andhuman resource
management

Issues to address and issues to examine

 Ensuring diversity in core humanresources (Women, foreign nationals,
mid-career hires) Initiatives to employ elderly workers andpersons with disabilities

FY2022: Employment of persons with disabilities is100% of the legally mandated rate (as of March 31,2023)
FY2023: Employment of persons with disabilities is100% of the legally mandated rate (as of March 31,2024) Enhancement of programs such as
childcare/family-care and telework

FY2022: Revised regulations and rules to maketelework a permanent system
FY2023: The new rules took effect in April 2023.

 Acquisition of certification as a Healthand Productivity Management
Organization

FY2022: Certified in March 2023
FY2023: Certified for two consecutive years in
March 2024

S

Work–life
management
and enhancementof productivity

Main activities and progress in FY2022 / FY2023
 Percentage of female new graduates in general
positions based on hiring activities as per the
Action Plan
FY2022: 4 females out of 22 new graduates ingeneral positions, up 12.3pt year on year to 18.1%
FY2023: 5 females out of 23 new graduates ingeneral positions, up 3.6pt year on year to 21.7%.
Fell below the target of 30%, despite a 3.6-pt
year-on-year increase to 21.7%
 Discussions held within the group to improve
percentage of women in management positions
and set targets for the number of women in
management positions at each group company.
FY2022: 16.5%, up 3.2pt year on year
FY2023: 17.4%, up 0.9pt year on year

11

Next is the “S” of Society.
Our ultimate goal is to develop and promote women to officers and boards from among
our human resources, and we are working to increase the ratio of female new graduatesin general positions and the ratio of female career-track employees.
In fiscal 2023, in comparison with the previous year results, the ratio of female newgraduates in general positions was up 3.6 points to 21.7% and the ratio of female careertrack employees rose 0.9 points to 17.4%.
The ratio of female new graduates in general positions has not yet reached the target of
30% but has increased by 15.9 points in the last two years.
In the area of work-life management, we were certified as a "Health & Productivity
Management Outstanding Organization" for two consecutive years.

Progress of medium- to long-term sustainability targets:
GovernanceKey themes

Restructuring thegovernance structure
in response to therevision of the
Corporate
Governance Codeand thereorganization ofTokyo Stock
Exchange

G

Issues to address and issues to examine Independent Outside Directors: at least
1/3
 Establishment of Nomination andCompensation Committee Diversification of the Board of Directors

 Full compliance with Corporate
Governance Code for Prime Market

Main activities and progress in FY2022 / FY2023
FY2022: Effective June 2023, 6 directors(including three outside directors), with a majorityof directors being outside directors. Establishedthe Nomination and Compensation Committee.
FY2023: Adopted a 6-director structure (including
3 outside directors) at the June 2023 generalshareholders' meeting
FY2022: Decided to nominate a female candidate
as a new outside auditor. Continued to work to
appoint a female director.
FY2023: Appointed a female outside director at
the June 2023 meeting. Deferred a proposal toappoint a female director at the June 2024
meeting
FY2022: TCFD-compliant information to bedisclosed from June 2022.
FY2023: CG Code not revised
FY2022: Implemented from April 2022.

Furtherstrengthening thesupervisory andoversight
functions of top
management overbusiness execution

 Adoption of delegation-based executive
officer structure

FY2023: Decided to expand the membership of
the Group management committee to adelegation-based executive officer structure
effective in April 2024
FY2022: Continue the company-with-auditors
system, but shorten the term of directors from thecurrent 2 years to 1 year (in June 2023).

 Transition to structure of company withcommittees

FY2023: Continued the company-with-auditors
system. Discussed to move to a company-withaudit and supervisory committee structure, given
the need for speedy management andappointment of female directors

12

Finally, the "G" of Governance.
First theme is ‘restructuring of the governance structure.’
To enhance management transparency and speedy execution of business operations, atlast year's General Meeting of Shareholders, we changed the number of directors to a
total of 6 (3 internal and 3 external) and appointed a female outside auditor.
Second one is ‘further strengthening the supervisory and executive functions ofmanagement,’ we decided to expand the membership of the Group management
committee to a delegation-based executive officer structure, which became effective in
April 2024.
In terms of the appointment of female directors, we were unable to submit a female
candidate for the Board of Directors at this year's General Meeting of Shareholders, andwe will consider this as an ongoing issue for consideration in the coming year.

“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/

That concludes my presentation.
Thank you very much.

■ 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.