For Institutional Investors/Analystssts

Consolidated Financial Results
for the First Half of the Fiscal Yearending March 2019

Nobember 6, 2018
KAGA ELECTRONICS CO., LTD.
TSE 1st section 8154

■ 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.

Summary of Financial Results for the Second Quarter Ended September 30, 2018

FY2019/3 2Q

Results

 At ¥115.3 billion, net sales by and large maintained the same level year-on-year,
driven by EMS business.

 Operating income and net profit both declined, which had been factored in at thebeginning of the period.
* Causes of the decreases: production adjustments resulting from model switching at major
customers, upfront expenses of new overseas sites at their start-up phase, etc.

Overview of themain business

本日のサマリーsegments

 Electronic components business: EMS business for medical equipment was slow, but thatfor automotive and air conditioning devices maintained steady performance.
Components sales business remained sluggish.
 Information equipment business: PC-related business was sluggish but sales of housingrelated home electric appliances and commercial facilities-related LED installation
business continued to show robust growth.
 Net sales ¥290 billion, ordinary income ¥8 billion, profit ¥7.3 billion, ROE 9.9%.

Forecast forFY2019/3

 Along with the acquisition of Fujitsu Electronics, consolidation is scheduled to beeffective from the forth quarter.
 Expected to achieve net sales and ROE targets in the final fiscal year of the Mediumterm Management Plan.
 Aiming to achieve record profit in 14 years with 7.3 billion yen profit projection
including negative goodwill related to the acquisition.

Shareholder
return Commemorative dividend (dividend increase) to be paid, in celebration of the 50 thanniversary.
 Interim dividend of ¥35 per share, consisting of ordinary dividend of ¥30 andcommemorative dividend of ¥5.

© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

2

Financial Highlights(Million Yen)FY2018/3

FY2019/3

2Q Results

2Q Results

YoYNet sales

116,582

115,383-1,199Gross profit

16,21816,023

-195

13.9%

13.9%

‐SG&A

11,824

12,251

427

Operating income

4,394

3,772-622

Ordinary income

4,703

4,049-654

Profit attributableto owners of parent

3,516

2,750-766

EPS (Yen)

128.16100.25-27.91

Gross profit margin© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

3

Financial Highlights by Business Segment（Net Sales/Segment Income）（Million yen）

Net Sales
116,582
6,0751,142
23,446

115,383
9,379
1,404
21,143

Segment income

TotalTotal

YoY： -1,199

OthersYoY：＋3,304

YoY：

4,394
198

111
SofwareYoY：+262

Others3,772
216

1,116-622

143

YoY ： + 18

Software
YoY： ＋ 31

864
Information equipment

Information equipment

YoY： -2,302

85,918

YoY ： -252

83,455
Electronic component

2,893

YoY： -2,463

2018/3
2Q Results

2019/3
2Q Results

2018/3
2Q Results

Electronic componetnt

2,474

YoY ： -419

2019/3
2Q Results

Note: Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).
© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

4

Financial Highlights: Electronic Component Segment（Million yen）

Net sales/Segment income

900 0085,918/Net Sales/Segment Income

83,455YoY
500 0

 Net Sales-2,463million yen 2.9％down

 Segment Income -419million yen 14.5％down
450 0

400 0800 00

EMS business for automotive and airconditioning devices maintained a steady
performance.

350 0700 00

2,893

300 02,474
600 00250 0Components sales business remained sluggish,notably for home electric appliances from theeffect of production adjustments at majorcustomers.

200 0500 00

150 0400 00

100 0300 00

500

2018/32QResults© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

2019/32QResults

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Financial Highlights: Information Equipment Segment（Million Yen）

Net sales/Segment income/24,00 0/

23,446

YoY Net Sales

Nets Sales
200 0Segment Income-2,302million yen 9.8％down

 Segment Income -252million yen 22.6％down

180 021,143

22,00 0160 020,00 0

140 0

Sales of housing-related home electric appliancesand commercial facilities-related LED installation
business showed robust growth.

18,00 01,116

120 0

Sales of PCs and PC peripherals were slow.

16,00 0100 0864
14,00 0800

12,00 0600

10,00 0400

8,000200

2018/3
2Q Results© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

2019/3
2Q Results

6

Net Sales by Region(Million Yen)

Net sales
116,582

YoY
 Japan

115,383

73,789Japan

4.7％down

 North America-593 million Yen 12.9％down

 Europe＋241 million Yen 13.6％up

 East Asia
70,288-3,500 million Yen＋2,653 million Yen7.3％up

Japan: PC sale , amusement machine businessand golf equipment sales were sluggish.
Overseas:East Asia and Europe also increased due tosteady growth in EMS business.

4,580
1,779

3,987
2,020

North America

Europe36,43339,0862018/3
2Q Results

2019/3
2Q Results© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

East Asia

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Balance Sheet Main Items(Million Yen)

Total assets
125,751

128,755

Total liabilities and net assets

130,811
126,376

125,751

59,819128,755

58,123

126,376

57,369130,81157,564
Total liabilities

Current assets103,684

104,069

103,178

104,264

65,932

70,63169,00673,247

Non-current assets

22,067

24,68523,19826,5472017/3

2018/32017/92018/9Total net assets

2017/3

2018/32017/92018/9Note: “Partial Amendments to Accounting Standard for Tax Effect Accounting” etc. (Accounting Standards Board ofJapan (ASBJ) Statement No. 28, February 16, 2018) have been adopted from the beginning of the first quarterof the fiscal year ending March 31, 2019. Accordingly, deferred tax assets are presented under investments8© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved. and other assets, while deferred tax liabilities are presented under non-current liabilities section.

Balance Sheet Main Items(Million Yen)

Inventories

Accounts receivable/Accounts payable
50. 0

（Day）

40.7

30, 000

36.0

34.9

34.9

40. 0

83.6
80, 000

77.1

78.5

76.7

（Day）
80. 0

Inventory turnover

A/R turnover

70, 000

70. 0

25, 000

30. 0
60, 000

A/P turnover

69.9
65.3

64.8

65.2

60. 0

20, 000

50, 000

20. 0

50. 0

Notes and A/R

40, 000

15, 000
40. 0

10. 0

30, 000

22,076
10, 000

19,325

19,455

19,13630. 0

52,009Inventories
0.0

20, 000

37,55349,841
36,39250,02435,512

Notes and A/P

48,35335,38120. 0

5,0 00-10.0

10, 000
10. 0

00

0.0-20.0

2017/3

2018/32017/92018/9© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

2017/3

2018/32017/92018/99Cash and Deposits/Interest Bearing Debt/Cash Flows（Million Yen）

Cash and deposits
35, 000

0.15

0.13

0.14

0.13

Cash flows

0.2 0D/E ratio
30, 000

0.0 0

25, 000

10,746-0.20

Cash flows fromoperating activities

10,07720, 000

5,875
-0.40

30,80315, 00030,393

30,412

Cash and deposits

26,423

1,898
▲ 258

▲ 1,345-0.60▲ 4,173

10, 000▲ 1,265▲ 4,938

Cash flows frominvesting activities▲ 6,118-0.80

5,0 00

9,805

8,900

9,573

9,5540-1.00

2017/3

2018/32017/92018/9© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

▲ 685▲ 2,811

Interest bearing debts

2017/3末

2017/3

2018/3末

2018/3

2018/9期

2017/9Cash flows fromfinancing activities

2018/9期

2018/910

Forecast for the Fiscalyear ending march 2019
（Million Yen）

2018/3Results

2019/3
Forecasts

Medium-TermManagement PlanTarget

YoY

Net sales

235,921290,000

54,079290,000

Gross profit

32,49835,500

3,002

‐

13.8%

12.2%

-1.6pt‐SG&A

24,37927,8003,421‐

Operating income

8,119

7,700-419‐

Ordinary income

8,740

8,000-740

10,000

Profit attributableto pwners of parent

6,490

7,300

810

‐

EPS（Yen）

236.58266.04

29.46

‐

9.5

9.9+0.4pt

8.0%

Gross profit margin

ROE© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

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Forecasts by Business Segment for Fiscalyear ending march 2019
（Million Yen）

2018/3

2019/3ResultsForecasts

YoY

172,248

227,200

54,95232%

Sgment income

5,312

5,200-112-2%

Information Net Sales
Equipment
Sgment income

47,58242,000-5,582

-12%

2,202

1,700-502

-23%

2,568

2,800

232

9%

172300128

74%

13,52218,000

4,478

33%

308

500

192

62%

ElectronicComponent

Software

OthersNet Sales

Net Sales
Sgment income
Net Sales
Sgment income

Note: Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).
© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

12Financial Highlights by Business Segment①（Net Sales）(Million Yen)

Net Sales

56,1742,872
448

60,4083,202
694
12,314

11,132

Total

61,873
57,465
2,627
399
11,2994,819
1,027
12,83659,88955,493
4,103
465
10,417

YoY ：-518
QoQ： ＋4,396

5,276
939
10,725

OthersYoY ： ＋2,073
QoQ : ＋1,173

SoftwareYoY ：QoQ：+245+474

Information equipment

41,721

44,197

43,13943,19040,50742,948

YoY ： ▲1,588
QoQ :+308

Electronic component
YoY ： ▲1,249
QoQ： ＋2,440

2018/3
1Q Results

2018/3
2Q Results© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

2018/3
3Q Results

2018/3
4Q Results

2019/3
1Q Results

2019/3
2Q Results

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Financial Highlights by Business Segment②（Segment Income）(Million Yen)

Segment Income
2,305
2,088

46112

2,282

37135

Total
YoY ：
QoQ :

▲23＋792

162

152
0358

2,219543
757

Others

1,506
7280

1,489547

YoY ：
QoQ :

80＋89＋54

Software
YoY :
QoQ :

317＋49+181

543
Information equipment

1,539

1,616
1,402

1,353
1,071

2018/3
3Q Results

YoY :＋49

QoQ：+330▲ 19▲ 202018/32Q Results▲210＋229

Electronic component

802

2018/3
1Q Results

YoY ：
QoQ :

2018/3
4Q Results

2019/3
1Q Results

2019/3
2Q Results

Note: Figures of each segment income are not inter-segment adjusted.
Total amount is inter-segment adjusted (operating income).
© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

14

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

Forex
Assumption
for 2H(yen)FY2018/3
2Q Results

FY2019/3
2Q Results（Yen）

（Yen）

USD

111.06110.2613514110.00

THB

3.28

3.40

1085

3.40

RMB

16.3917.09

70

4

17.00

HKD

14.24

14.05

84

214.00© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

Net salesOrdinary
income15

(Reference) Products and Services by Business Segment

Electroniccomponents• Sale of semiconductors (general-purpose products and customizedproducts)• Sale of electronic components (transformers, condensers, cables,connectors, and switches, etc.), LED, and storage devices• Development, manufacture and sales related to EMS (airconditioning, office equipment, automotive devices, industrial
equipment, amusement machines, communication equipment,
medical equipment, etc.)

Informationequipment• Sales of PCs and PC peripherals, home electric appliances/lighting
fixtures, photograph and imaging products, original brand products,etc.)

Software• Production of computer graphics, planning and development ofamusement products, and other activities

Others• Repair and supports for electronics equipment, manufacture andsales of amusement equipment, and wholesale/retail of sports goods,etc.)© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

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＜ｍemo＞

17

＜ｍemo＞

18

＜ｍemo＞

19

＜ｍemo＞

20

＜ｍemo＞

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“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© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

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