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FY2023
Investor Brief ing—Challenge, Creativity, Solutions

SMK Corporation (6798)
May 23, 2024

2/19Agenda

1. Outline of FY2023 Financial Results

p. 03 – 13

2. FY2024 Forecast

p. 14 – 18

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1. Outline of FY2023 Financial Results

4/19

1‐1 FY2023 Results

Significant sales and profit decline due to prolonged inventory adjustments and decreased stay-at-homedemand following COVID-19. Increased operating loss due to inventory write-downs.

Slight positive ordinary profit due to foreign exchange gains.

Net loss due to impairment losses.
Unit: Million yen

FY2022 Result

FY2023 ResultYoYNet Sales

54,842

46,522△15.2%

Operating Profit(Operating profit margin)

1,128(2.1%)△1,243(△2.7%)－

Ordinary Profit

2,503226△91.0%Net Profit

1,334

△489

－

Earnings per share (yen)209.12△75.00－

Dividend per share (yen)100.00100.00Exchange rate (1US$=)*100 (Final)*50/50 (Interim/Final)¥135.53¥144.56

5/19

1‐2 FY2023 Results | by Quarter

1Q started slow, turned profitable in 2Q, but lost momentum in 3Q.
In 4Q, sales recovered to over 12 billion yen, and operating profit nearly broke even, but a 684-million-yen
inventory write-down resulted in an operating loss.

Net Sales
20,000

Unit: Million yen

FY2023
1Q

2Q

11,0383Q

12,037

11,168

Profit4Q12,27910,0002,500

1,500520
6940208490
424△ 385500

187△ 379

△ 173
△ 687

△ 1,079△ 1,326△10,000

Net Sales

Operating Profit

Ordinary Profit△500△1,500Net Profit

6/19

1‐3 FY2023 Results | by Segment
CS : Despite a decrease in tablet-related demand post-COVID-19, solid performance in camera-related
products and robust sales to Chinese smartphone customers led to a YoY increase in sales and profit.

SCI: Significant YoY sales decline in housing equipment and car electronics markets, coupled with inventory
write-downs, resulted in an increased operating loss.
Unit: Million yen

FY2022
Result

CS Division

SCI Division

R&D CenterOthers

TOTAL

Net Sales

YoY

FY2023ResultDifference%

19,997

20,586

589

＋2.9%

894

1,095

201

＋22.5%

34,482

25,536△8,945△25.9%

Operating Profit393△2,145△2,539－Net Sales33938748＋14.2%△160△184△23－

Net Sales

2311△11△50.1%

Operating Profit

1△9△10－Net Sales

54,842

46,522△8,320△15.2%

Operating Profit

1,128△1,243△2,371－

Operating Profit
Net Sales

Operating Profit

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1‐4 FY2023 Results | Operating Expenses

Material cost ratio improved by 1.1% due to factors such as product mix.

Labor and expense ratio increased by 5.9% due to sales decrease.

60,000

Unit: Million yen

FY2022

FY202353,714[97.9%]

47,765[102.7%][ ]: Sales Ratio
Material costs
Amount paid to subcontractors

50,00040,00030,00020,00010,0000Operating
Profit26,671
1,099
17,329
5,902
2,713
1,128
[2.1%]

Labor costs
48.6%
2.0%
31.6%
10.8%
4.9%

22,397 48.1%
641△1,243[△2.7%]

Depreciations

1.4%

16,815 36.2%
5,635
2,277

Expenses•

Improved by 1.1%
in ratio of material costs &amount paid to subcontractors

12.1%
4.9%

50.6% → 49.5%•Raised by 5.9%
in ratio of labor costs & expenses
42.4% → 48.3%

previous
8/19
1‐5 FY2023 Results | Changes in Operating Profit vs.corresponding
periodSignificant decrease in operating profit due to sales decline resulting from inventory adjustments in the home
appliance and car electronics markets, coupled with inventory write-downs.

Despite efforts to reduce variable cost ratios and fixed costs, unable to offset the impact of declining sales,
resulting in an operating loss.

［ FY2022 vs. FY2023 ］

1,900
1,500
1,100700300△100

After adjusting impact of foreign exchange rates

Operatingprofit forprevious term

1,128

Average exchange rate

FY2022

FY2023

USD/JPY

135.53144.56USD/RMB

6.88

7.18

Impact offoreignexchange rates

Operating loss
for this term

(weak yen & RMB)

281

△1,243
Decrease in
fixed costs

△500
△900

Inventory
write-down△1,300△1,700△2,100△2,500△684

Total△2,371 million yen

Unit: Million yen

Decrease insales amount△3,066(labor costs/expenses/depreciations)

Decrease invariable costratio

5785201‐6 FY2023 Results | Changes in Operating Profit vs. initial forecast

9/19



Significant decrease in operating profit due to sales decline resulting from inventory adjustments in the home
appliance and car electronics markets, coupled with inventory write-downs.

Despite reducing fixed costs, significant operating loss recorded.

［ Initial forecast (announced on Apr. 28, 2023) vs. FY2023 ］

3,000

2,000

1,0000After adjusting impact of foreign exchange rates
Initial forecastof operating
profitAverage exchange rate

Initial forecast

FY2023

USD/JPY

130.00144.56

USD/RMB

6.67

7.18

1,100
Impact offoreignexchange rates(weak yen & RMB)

Operating loss
for this term
Decrease infixed costs

732
Inventory
write-down△1,000△684△2,000△3,000

Unit: Million yen

Decrease insales amountTotal△2,343 million yen △3,575(labor costs/expenses/depreciations)

Increase invariable costratio

△184

1,368

△1,243

10/191‐7 FY2023 Results | Non-operating Profit and Loss

FY2023 benefited from foreign exchange gains due to a weaker yen and revenues from real estate.

2,000

1,500

1,000

FY2022

FY2023

1,375[2.5%]

1,469[3.2%]

431

Revenue from and expenditure
to real estate
Foreign exchange gain/loss

406

OthersFinancial account balance720

Gain/loss on investments in investment
partnerships

1,089500

Foreign exchange profit 720 → 1,089

5460△263△500

OrdinaryProfit

2,503[4.6%]

Unit: Million yen[ ]: Sales Ratio

Financialaccountbalance△ 5976△112

Financialaccountbalance10226[0.5%]

Exchange rates at the beginning
vs. at the end of the term
USD/JPY
USD/RMBFY2022

FY2023

Yen weakened

Yen weakened

Yuan weakened

Yuan weakened

by 11.14
by 0.53

by 17.88
by 0.39

11/191‐8 FY2023 Results | Extraordinary Profit and LossGains on sales of real estate and investment securities contributed to profits, while recognizing impairment
losses on fixed assets and extra retirement payments due to organizational restructuring at U.S. sites.

600

FY2022

FY2023△597△280
Gain on salesof fixed assets

400

182000△200△517△400△600△ 76

△800

Loss onvaluation ofinvestment
securities△25

Unit: Million yen[ ]: Sales Ratio

183

Gain on sales of fixed assets

273

Gain on sales of investment securities△102△562

Loss on disposal of fixed assets
Impairment loss
Loss on valuation of investment securities△ 72

Profit before taxes

1,906

△53

Income taxes

△571

△435

Net Profit

1,334

△489

[2.4%][1.1%]

Extra retirement payments

12/191‐9 FY2023 Results | Cash Position

Unit: Million yen

Mar. 2023

Mar. 2024

Differential(Ａ)

(Ｂ)

(Ｂ－Ａ)

56,36558,444

2,079

Cash and cash equivalents

8,969

10,2581,289

Accounts receivable

13,176

13,22246

Inventories

10,073

9,257

△816

Fixed assets

23,113

24,6191,506

24,09026,3002,210

Accounts payable and accrued expenses

6,652

6,503

△149Interest-bearing debt

12,817

14,365

1,548

32,27432,143△1317,996

7,996

－

57.3％

55.0％

△2.3％

AssetsLiabilities

Net assets
Common stock

Capital adequacy ratio

13/19

1‐10 FY2023 Results | Cash Flow Position

Unit: Million yen

FY2022

FY2023

3,591

3,719

Working capital

△758

1,610

Profit before taxes

1,906

△53

Depreciation

2,884

2,451

Others△441△289△1,944△1,617

Free cash flow

1,647

2,102

Cash flow from financing activities△862△478

△422

1,005

△1△498△438△984

Initial balance

8,5058,915

Final balance

8,915

10,197

Cash flow from operating activities

Cash flow from investing activities

Increase/decrease in interest-bearing debt
Increase/decrease in treasury stockDividends paid

14/192. FY2024 Forecast

15/192‐1 FY2024 Forecast


Slight increase in sales amid an uncertain market environment.

Significant YoY improvement in operating profit, but continued losses expected;
we will actively pursue additional sales expansion and expense reductions.
Unit: Million yen

FY2023 ResultNet Sales
Operating Profit(Operating profit margin)
Ordinary ProfitNet ProfitEarnings per share (yen)Dividend per share (yen)Exchange rate (1US$=)YoY

FY2024 Forecast

46,52250,000＋7.5%△1,243(△2.7%)△200(△0.4%)－226200△11.6%△4890－△75.000.00－

100.00100.00*50/50 (Interim/Final)*50/50 (Interim/Final)¥144.56¥150.00

16/192‐2 FY2024 Forecast | Sales and Profit by Segment
CS : Growth in connectors for tablets due to new model effects.
Solid performance in automotive connectors.

SCI: Continued weakness in remote controls and units for air conditioners and housing equipment.
Unit: Million yen

FY2023Result

CS Division

SCI Division
Innovation
Center (R&D)
OthersTOTAL

YoY

FY2024
Forecast

Difference%

Net Sales

20,58623,4202,833＋13.8%

Operating Profit

1,095965△130△11.9%

Net Sales

25,536

26,283746＋2.9%

Operating Profit△2,145△709

1,436－

387297△90△23.4%△184△456△271－

Net Sales

110△11－

Operating Profit△909－

Net Sales

46,52250,0003,477＋7.5%

Operating Profit△1,243△2001,043－

Net Sales
Operating Profit

17/192‐3 FY2024 Forecast | Sales by Market

Ongoing uncertain market conditions in 1H due to inventory adjustments in certain productsin the home appliance (particularly housing equipment) and car electronics markets.

Market recovery expected from H2, despite varying demand across markets.

Environment

FY2023ResultFY2024
Forecast

YoY


ICT

7,908

9,000+14％
Home
Appliance

CarElectronics

17,50016,59918,00017,500

Unit: Million yen

+3％

+5％

Industry/Others

4,513

5,500

+22％

TOTAL

46,52250,000+7%

1US$=¥144.56¥150.00

Sales recovery is expected due to the contribution of newtablet models of main customers.
Connectors for smartphones: Solid.
Remote controls and units for housing equipment: Holding
flat due to continued inventory adjustments.

Remote controls for sanitary: Robust.

E-Bike-related: Improving due to reduced market inventory.



Camera modules and camera connectors: Solid.

Connectors for EVs: Expanding.

Touch sensors: Decreasing due to End-of-Life.



Remote controls and units for photovoltaic modules andconnectors for battery storage systems: Solid.

18/192‐4 FY2024 Forecast | Changes in Operating Profit

Increase in sales from market recovery in 2H and reduction in inventory write-downs recorded in the previous
term, leading to a smaller operating loss.
Unit: Million yen

After adjusting impact of foreign exchange rates

1,000

Decrease in variable
cost ratio

5000(Reduction in inventory
write-down)

Operatingloss forprevious term

619

△1,243△200

Increase insales amount

720
△500

△1,000△1,500Initialforecast for
operatingloss

Increase in
fixed costs

Impact offoreignexchange rates(weak yen)(labor costs/expenses/depreciations)

△514

218

Total+1,043 million yen

Average exchange rateFY2023

FY2024USD/JPY

144.56150.00Notice
All information in this material concerning the forecast of business achievements,
projections of general business conditions and our business strategies is dependent on
our conclusion made to a normally foreseeable extent applying information reasonably
accessible to us at the time of preparation of this material.
However, the reality is that it contains risks and uncertainties which may cause result tomaterially differ from business projections, stated or implied, due to situations which areunforeseeable under normal conditions, or of results which are beyond a reasonably
foreseeable outcome at that time.
Despite our active efforts to disclose information which is considered to be important toinvestors of our company, total dependence on the business projections in this material,stated or implied, must be refrained from when decisions of any kind are made regarding
our company.

19/19