Consolidated Financial Results for the Fiscal Year
ended March 2019

Kaga Electronics Co., Ltd.
Managing Director

Eiji Kawamura0

For Institutional Investors/Analystss

Kaga Electronics Co.,Ltd.
Financial Results Briefing Material
for the Fiscal Year ended March 2019

May 23, 2019
KAGA ELECTRONICS CO., LTD.
TSE 1st section 8154

Index FY2019/3 Full-Year Financial Results
Summary
Financial Highlights /Financial Highlights by Business Segment
Balance Sheet Main Items/Cash Flows
Forecast for the Fiscal Year ending march 2020

P- 3
P- 4〜10
P-11〜15
P-16〜20

Summary of Financial Results for the Fiscal Year Ended March 31, 2019

Results forFY2019/3

 Fujitsu Electronics consolidated from 4Q
 Operating income and ordinary income did not meet forecasts, but net sales and net
profit exceeded forecasts.
 Net income reaching a record-high level for the first time in 13 years, in part due tothe negative goodwill and tax reduction.
 Despite negative factors such as product adjustments resulting from model switching,upfront expenses for the start-up of new overseas factories, supply/demandpressures on some parts and materials, and lower demand due to a slowdown in
China’s economy, results were generally passable.

Overview ofthe mainbusinesssegments

 Electronic components: Solid results in the EMS business for automotive and air
conditioning devices; the component sales business was sluggish.
 Information equipment: In PC sales, although sales were low in the housing-related
home electric appliance business, the commercial facilities-related LED installation
business was robust.

Shareholder
return Dividend policy: make stable dividend payments while securing a
consolidated dividend payout ratio of 25% to 35%
 Year-end dividend of ¥45, which includes an extraordinary dividend of ¥5.
Annual dividend of ¥80 representing a ¥10 increase.

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

3

Financial Highlights（million yen）

FY2018/3

FY2019/3

FY2019/3

Results

Previous Forecast

Results

YoY

vs Forecast

Net sales

235,921290,000

292,779

24.1%

1.0%

Gross profit

32,49835,50035,546

9.4%

0.1%

13.8%

12.2%

12.1%

SG&A

24,37927,80027,976

14.8%

0.6%

Operating income

8,119

7,700

7,570

-6.8%

-1.7%

Ordinary income

8,7408,000

7,859-10.1%-1.8%

Profit attributableto owners of parent

6,490

7,300

8,014

23.5%

9.8%

EPS (Yen)

236.58266.04292.07ーー9.5

9.9

10.9

14.7%

10.1%

Gross profit margin

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

4

Financial Results by Business Segment（miillion yen）

FY2018/3

FY2019/3

FY2019/3

Results

Previous Forecast

ResultYoY

vs Forecast

Net Sales
Electronic
Component Segment income

172,248

227,200

225,598

31.0%

-0.7%

5,312

5,200

4,761

-10.4%-8.4%

Information Net Sales
Equipment Segment income

47,58243,00044,344

-6.8%

3.1%

2,202

1,700

1,906

-13.4%

12.1%

2,568

2,800

2,876

12.0%

2.7%

172

300

247

43.6%

-17.7%

13,522

17,00019,959

47.6%

17.4%

308

500

490

59.1%

-2.0%

235,921290,000

292,779

24.1%

1.0%

8,119

7,700

7,570

-6.8%

-1.7%

Software

OthersTotal

Net Sales
Segment income
Net Sales
Segment income
Net Sales
Segment 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.

5Financial Highlights by Business Segment(Million Yen)

Net Sales
290,000

235,921

Segment Income

292,779

17,0002,800

19,95943,00044,344

2,876

13,522
2,568
47,582

Total

Total

YoY：＋56,858
vs Forecast：＋2,779

OthersOthersYoY：+182
vs Forecast：▲9YoY：＋308
vs Forecast： ＋76

225,598

172,248

FY2018/3
FY2019/3
FY2019/3
Result Previous Forecast Result

Information equipment
YoY：▲3,237
vs Forecast：＋1,344
Elecronic Compornent
YoY：＋53,350
vs Forecast：▲1,601

8,119308
172
2,202

5,312

7,700
500
300
1,7005,200

7,570490247
1,906

4,761

Software
YoY：+74vs Forecast： ▲52Information equipment
YoY：▲296vs Forecast： ＋206
Elecronic Compornent
YoY：▲550vs Forecast： ▲438

FY2018/3
FY2019/3
FY2019/3
Result Previous Forecast Result
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.

▲549
▲129

YoY ：＋6,436
vs Forecast ：＋2,959

Software227,200

YoY：vs Foreca :6Effect of Fujitsu Electronics conversion to subsidiary(million yen)

Net Sales

Gross profit / Gross profit margin

Fujitsu Electronics consolidated from 4Q, sales increased
Significantly.

Gross profit margin declined on a consolidated basis, but flaty-o-y on a non-consolidated basis
5 00 00

235,921235,689

57,090292,779

5 0. 00 %4 50 00

4 00 00

3 50 00

32,49835,546

3,411

32,1353 5. 00 %3 0. 00 %2 50 00

2 5. 00 %

13.8%

13.6%

1 50 00

12.1%

6.0%

1 00 00

KagaElectoronics

FY2018/3

Fujitsu
ConsolidatedElectronics
富士通エレクトロニクス

1 5. 00 %5 .0 0%02 01 8

連結FY2019/3

2 0. 00 %1 0. 00 %5 00 0加賀電子

4 0. 00 %3 00 00

2 00 00

2 01 84 5. 00 %Fujitsu
ConsolidatedElectronics

加賀電子

富士通エレクトロニクス

KagaElectoronics

FY2018/3

0 .0 0%連結

FY2019/3

Operating income

Profit attributable to owners of parent

Consolidation of Fujitsu Electronics could not offset decreasein Kaga Electronics’ operating income

Incorporating “negative goodwill” arising from the consolidationand special factor relating to tax consolidation

8,119

242

7,328

7,570

2,403
7,859

614

1,597

8,014

Negative goodwill2,164

2 01 8FY2018/3

加賀電子

KagaElectoronics

Fujitsu
ConsolidatedElectronics
富士通エレクトロニクス

FY2019/3© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

連結

経常利益

Ordinaryincome

特別利益

特別損失

法人税等

親会社株主にProfit
ExtraordinaryExtraordinary Income
incomeloss
taxes attributable to
帰属する当期純利益

owners ofparent

7

Financial Highlights: Electronic Component Segment（million yen）

Net sales/Segment income
227,200

225,598

58,00057,090

YoY＋53,350 million Yen 31.0％up
 Segment Income ▲550 million Yen 10.4％down
 Net sales

FujitsuElectronics

172,248

vs Forecast
 Net sales▲1,601 million Yen Segment Income

KagaElectronics

172,248

169,200

5,312

168,508

5,200
100

4,761
242

5,312

5,100

4,519

FY2018/3利益
売上売上2019/3利益

売上2019/3利益

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

▲438 million Yen

0.7％down
8.4％down

・ Significant increase in net sales resulting fromconversion of Fujitsu Electronics to subsidiary
・ Steady performance of EMS business forautomotive and air conditioning devices.
・ Sluggish components sales business, notably forhome electric appliances, from the effect ofproduction adjustments at major customers.

Result8Financial Highlights: Information Equipment Segment（million yen）

Net sales/Segment income

YoY

6 00 00

7 00 0 Net sales

6.8％down▲296 million Yen 13.4％down▲3,237 million Yen Segment Income
5 50 00

6 00 0

5 00 00

47,582

 Net sales

44,34443,0004 50 00

vs Forecast

5 00 03.1％up＋206 million Yen 12.2％up＋1,344 million Yen Segment Income

4 00 00

3 50 00

4 00 0

3 00 00

3 00 02 50 00

2,202
2 00 00

1,700

1,906
2 00 0・ The commercial facilities-related LED installation
business showed robust growth.
・ The housing-related home electric appliancebusiness declined due to delivery date adjustments
by customers. Although sales of PCs to individuals
were solid, sales of PCs to corporate customers wereslow.

1 50 00

1 00 00

1 00 0FY2018/3
Result

FY2019/3
Previous Foreast© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

FY2019/3
Result9

Net Sales by Region（million yen）

Net sales

YoY＋31,281million yen 21.0％up
 North America ＋4,449million yen 51.6％up＋5,869million yen145.5％up
 Europe＋15,258million yen 20.6％up
 Asia Japan

290,000

292,779

235,921Japan

180,000

180,306

vs Forecast
 Japan North America

149,024

 EuropeNorth America

8,628

13,0006,000

13,0789,903

Europe91,00089,492Asia

FY2019/3
Previous Forecast

FY2019/3
Result Asia＋306million yen＋78million yen

0.2％up
0.6％up＋3,903million yen 65.1％up▲1,508million yen 1.7％down

4,034
74,234FY2018/3
Result© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

10Balance Sheet Main Items（Million Yen)

Total assets

Total liabilities and net assets

213,761

213,761

Total liabilities

Current assets

125,751

Kaga Electronics
101,058

128,755
182,396

Fujitsu Electronics
81,338125,751

59,819103,684

128,755

129,501

Kaga Electronics
81,665
Fujitsu Electronics
47,835

58,123104,069
Non-current assets

Total net assets

Kaga Electronics
28,081
Fujitsu Electronics
3,282

22,067

24,68531,364FY2017/3

FY2018/3

FY2019/3© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

65,932

70,631FY2017/3

FY2018/3

84,259Kaga Electronics
74,490Fujitsu Electronics
9,768

FY2019/3

11Balance Sheet Main Items（Million Yen, Day)

Inventories

Accounts receivable/Accounts payable

40.7 Kaga Electronics
36.0

34.9

81.7 Fujitsu Electronics

160,00 0

83.6

80.0

A/R turnover

40.0

Inventory turnover

50,00077.1

77.0 Kaga Electronics

140,00 0

70.0

29.1 Fujitsu Electronics

71.4 Fujitsu Electronics

30.0

40,02669.9
65.3

120,00 0

40,00020.0

A/P turnover

63.3 Kaga Electronics
60.0

101,507
100,00 050.0

17,347 Fujitsu Electronics

Notes and A/R

10.0

77,88430,00080,00040.0

0.0

Notes and A/P

51,80220,00019,325

19,45560,000-10. 0

Inventories
40,00052,00937,55349,841

42,561 Fujitsu Electronics
30.0

36,39220.0-20. 0

22,678 Kaga Electronics

10,00049,70420,000-30. 010.0

35,323 Kaga Electronics
0-40. 0FY2017/3

FY2018/3

FY2019/3

注：Inventory turnover ＝ Inventories ÷ Cost of Sales × 365（day）© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

00.0

FY2017/3

FY2018/3

FY2019/3

notes：・Notes and A/R are amounts including Electronically recordedmonetary claims-operating
・A/R turnover ＝ Notes and A/R ÷ Net sales × 365（day）
・A/P turnover ＝ Notes and A/P ÷ Cost of sales × 365（day）

12

Cash and Deposits/Interest Bearing Debt/Cash Flows（million yen

Cash and deposits
0.43

45,000

0.15

0.50

0.13

-0.25

（times）

D/E rtaio-0.03

40,000Cash flows

0.00

-0.31

Net D/E ratio

35,000Cash flows fromfinancing activities-0.5 030,00010,746-1.0 011,684

10,07725,00020,000-1.5 035,00330,80315,00026,423

Cash and deposits▲ 258

32,851▲ 6,118-2.0 0▲ 1,547▲ 4,173▲ 6,860

10,000▲ 2,811-2.5 05,000

9,805

8,900-3.0 0

FY2017/3

FY2018/3

FY2019/3

Cash flows frominvesting activities

Interest bearing debts

FY 2 01 7/30

Cash flows fromoperating activities

FY2017/3

2018/3末FY2018/3

2019/3末FY2019/3

note：D/E ratio＝ Interest bearing debts ÷ Shareholder’s equity
Net D/E ratio ＝（Interest bearing debts - Cash and deposits） ÷ Shareholder’s equity© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

13

Supplementary information on cash flow
Although in FY2019/3, cash flow in operating activities recorded a temporary increase in outflow
due the conversion of Fujitsu Electronics to subsidiary, reaction to this is anticipated in FY2020/3.

FY2018/3

FY2019/3

 other9,300－2,076△226△1,101
1,087△1,0599,649△2,164△1,152△2,145△6,746△207
1,218

Net cash provided by (used in) operating activities

10,077△1,547Main variation items

Cash flows
fromoperating
activities

Main factors

 Profit before income taxes
 Gain on negative goodwill
 Decrease (increase) in notes and accounts receivable - trade Decrease (increase) in inventories
 Increase (decrease) in notes and accounts payable - trade Decrease (increase) in accounts receivable - other① Gain on negative godwill② Increase in notes and accounts
receivable -trade③ Increase in inventories④ Decrease in notes and accounts
receivable -trade© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

・・・①・・・②・・・③・・・④➞ Due to the acquisition of Fujitsu Electronics 70% stock➞ of which, - 1,040 due to consolidation of Fujitsu Electronics➞ Mainly in response to customer inventory adjustment and sales increase in EMS➞ of which, - 5,192 due to consolidation of Fujitsu Electronics

14Major Business Indicators（million yen）

Equity ratio
52.4%
52.40

ROE

54.8%
54.80

10.9%

260,00 0

9.5%

10.9%

35.8%
35.80
40.00

210,00 0

20.00

Total assets
160,00 0

3.1

0.00

2.7

Net profit margin

2.8

Financial leverage

1.4

総Total asset turnover

2.8-20. 00

213,761

110,00 0

Shareholders’ equity

128,755
60,000

1.8

1.8

1.9

1.8

FY2017/3

FY2018/3-40. 00

125,751
65,87276,60470,556-60. 00

10,000-80. 00

FY2017/3

FY2018/3

FY2019/3-40, 000

FY2019/3-100 .00© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

15

Summary of Forecast for the Fiscal Year ending March 31, 2020

Forecast forFY2020/3

 The Group overall is conservative in its projections due to uncertain domestic andoverseas conditions going forward.
 In the case of Fujitsu Electronics, we expect a risk of the cancellation of large-lotcommercial rights and thus forecast lower sales and income.
 We predict a reactionary decline in net income due to the negative goodwill posted in
the previous fiscal year and the loss of the tax effect.

Perception ofEnvironmentfor the MainSegments

 Electronics Components Business: Slowdown in China-related business isa concern, but sales is likely to continue expanding led by “automotivedevices.
 EMS business: Growth of demand is expected for automotive and air
conditioning devices in the new overseas factories.
 CSI business: Decline in demand is likely to continue in housing-related
home electric appliances business.

Shareholder
return We shall perform stable dividends, while securing a consolidated
dividend payout ratio of 25 to 35%.
 In light of current performance forecast, annual dividend of 60 yen isplanned (dividend ratio of 32.9%)© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

16

Segment disclosure associated with the start of 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 businessElectroniccomponents

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

EMS business Electronic equipment
manufacture contracting
services

Informationequipment

 Sales of PCs and PCperipherals
 Sales of home electric
appliances and lighting fixtures
 Sales of photograph andimaging products

Software Production of CG video andsoftware

Others Sales of amusement
equipment Repair and support forelectronics equipment
 Sales of sports goods© 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved.

Electronic
components

 Sales of semiconductors
 Sales of general electronic
components
 Sales of various devices

EMS

 Electronic equipment manufacturecontracting services

CSI Sales of PCs and PC peripherals
 Sales of home electric appliancesand lighting fixtures
 Sales of photograph and imaging
products

Others Production of CG video andsoftware
 Sales of amusement equipment
 Repair and support for electronics
equipment
 Sales of sports goods
17Forecast for the Fiscal Year ending march 2020
（million yen）

FY2019/3

FY2020/3

Results

Forecast

YoY

Net sales

292,779

430,000

46.9%

Gross profit

35,54646,500

30.8%

12.1%

10.8%

SG&A

27,97639,50041.2%

Operating income

7,570

7,000

-7.5%

Ordinary income

7,859

7,000

-10.9%

Profit attributableto owners of parent

8,014

5,000

-37.6%EPS（Yen）

292.07182.1710.9

6.4

Gross profit margin

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

-18

Forecasts by Business Segment for the Fiscal Year ending march 2020

Electronic
Component
EMS

CSI

OthersTotal

Net Sales
Segment income
Net Sales
Segment income
Net Sales
Segment income
Net Sales
Segment income
Net Sales
Segment income

FY2019/3

FY2020/3

Results

Forecast（million yen）

YoY

145,042

282,000

94.4%

2,278

2,200-3.4%

89,481

95,000

6.2%

2,667

2,800

5.0%

44,34440,000

-9.8%

1,906

1,500

-21.3%

13,912

13,000

-6.6%

554

500

-9.7%

292,779

430,000

46.9%

7,570

7,000

-7.5%

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.

19Effect of Fujitsu Electronics conversion to subsidiary (FY2020/3 Forecast)
Net Sales

Gross profit / Gross profit margin

Prudent projection for net sales in view of uncertainty in thefuture business environment

Gross profit margin to be flat y-o-y for Kaga Electronics, up
1 pt for Fujitsu Electronics(468,995)

195,000

430,000

5 00 00(46,725)

235,000

14,590Kaga
Electronics

7 0. 00 %6 5. 00 %6 0. 00 %13.8%

5 0. 00 %7.2%

32,13510.8%

4 5. 00 %4 0. 00 %3 5. 00 %3 0. 00 %2 5. 00 %2 0. 00 %1 5. 00 %

6.3%
Kaga
Electronics

FY2019/3

FujitsuElectronics
富士通エレクトロニクス

連結

0FY2020/3

13,500

5 .0 0%Kaga
Electronics

FujitsuElectronics
富士通エレクトロニクス

0 .0 0%連結

Consolidated

FY2020/3

Operating income / Operating income marjin
Fujitsu Electronics’ contribution to income to remain limited

5 00 00(37,998)

1 0. 00 %加賀電子

FY2019/3

Expenses to increase for both companies due notably tolaunch of new facilities and IT-related spending
4 00 00

2 01 9Consolidated

SG&A / SG&A ratio
39,500(8,727)

1 00 00

FujitsuElectronics

1,399

8 00 03 50 00

3 00 00

8 0. 00 %1 00 00

加賀電子

FujitsuElectronics 13,191

8 5. 00 %5 5. 00 %13.6%

3 00 00

Kaga 235,689
Electronics

4 50 00

9 0. 00 %32,5002 00 00

2 01 99 5. 00 %46,5007 5. 00 %FujitsuElectronics
4 00 00

Fujitsu 233,306
Electronics

14,000

1 00 .0 0%

26,000

6,500

500

7,000

6 00 03.1%

2 50 00

2 00 00

10.5%

11.1%

1 50 00

Kaga 24,807
Electronics

6.9%

9.2%

Kaga
Electronics

1 00 00

5 00 02 00 05.6%

02 01 9Kaga
Electronics
加賀電子

FY2019/3

Fujitsu
Consolidated
Electronics
富士通エレクトロニクス

FY2020/3

連結

2.8%
1.6%

4 00 0

7,328

0.3%

0.6%

0
2 01 9FY2019/3

KagaElectronics
加賀電子

Fujitsu
Consolidated
Electronics
富士通エレクトロニクス

FY2020/3※In million yen, figures in ( ) are simple sums

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

連結20＜ｍemo＞

21

“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

■ 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.