My name is Eiji Kawamura, and I’m Head of the Administration Headquarters.
Thank you for your ongoing support.
I also appreciate your attending today’s briefing on our financial results.
With that, I will begin our explanation of Kaga Electronics’ financial results in thefiscal year ended
in March 2021.

I will start with a summary of financial results in the fiscal year ended in March 2021.
First, net sales fell short of the previous year’s levels because of the lingering effect of
the termination of sales agency contracts with major suppliers. However, whenexcluding this special factor, we overcame the effect of COVID‐19, and results were solid
overall. Operating income and ordinary income both exceeded our previous forecasts,
and we set new records for the second fiscal year in a row. Although we priced in
impairment losses and other, net income increased significantly thanks in part to theposting of a “gain on bargain purchase.”
In the January–March quarter, sales increased as demand recovered rapidly, and wecurtailed and reduced SG&A expenses. Results came in above forecasts, and we wereable to reverse direction and bring in higher sales and income. Fiscal year‐end dividends
will be 50 yen per share, which includes our previous forecast of 40 yen (30 yen ordinary
dividend plus a 10 yen extraordinary dividend) and an additional 10 yen extraordinary
dividend. Including the 30 yen interim dividend, the full‐year dividend will be 80 yen per
share. Full‐year dividends in the previous fiscal year were 70 yen per share.
Moving on to an overview of the main segments, in the electronic components business,
the termination of the sales agency agreement with Cypress continued to have an
impact on the components sales business, but the business took advantage of therecovery in demand from Q3 and results were solid.
In the EMS business, sales in the medical and automotive areas were firm throughout
the year.
In the information equipment business, the PC sales business grew as it pulled intelework and online demand. The sale of anti‐viral and sterilizing products for companies
and commercial facilities were robust.
The fiscal year ending in March 2022 will be the final year of the Medium‐TermManagement Plan, and although net sales are still far from the plan’s target, we have notlowered this target. We aim for record‐high operating income for the third straight fiscal
year. We expect dividends to be 80 yen per share, which is the same as in 2021.

Now I would like to explain the financial highlights for the fiscal year ended in
March 2021.
Net sales totaled 422,365 million yen, down 4.8% over the previous year. Thiswas 1.8% over the forecast. Gross profit was 47,936 million yen, up 2.0% over theprevious year. The gross profit margin amounted to 11.3%, 0.7% higher than in
the previous year. SG&A expenses were down 1.4% over the previous year, at
36,469 million yen. Operating income increased 14.5% over the previous year to
11,467 million yen, which was 27.4% higher than the forecast. Ordinary income
was 11,241 million yen, up 10.9% over the previous year and 32.2% higher thanforecast. Net income attributable to owners of parent came in at 11,399 million
yen, which was 94.8% higher than the previous year and 8.6% above forecast. As
a result, EPS (net income per share) was 415.07 yen. ROE was 13.5%.

In the ended in March 2021, we posted large amount of extraordinary gains andextraordinary losses, so I will explain their breakdown.
Excel became a Group subsidiary, resulting in a gain on bargain purchase of 7,963
million yen. However, COVID‐19 had an impact, and we also incurred losses on
bad debts to major suppliers, as well as a 2,230 million yen loss due to the caseof fraud at our US subsidiary announced in February. In addition, we posted a
1,893 million yen impairment loss on an overseas subsidiary’s manufacturing
facilities and a 562 million yen loss on sales of investment securities and loss on
valuation of investment securities. These key losses added up to an extraordinary
loss of 4,892 million yen. As a result, we posted 3,230 million yen in extraordinary
gains.

Next, we will look at financial results by business segment.
The electronic components business posted net sales of 353,454 million yen,down 6.4% over the previous year. Income in this business totaled 8,151 million
yen, up 8.6% over the previous year. In the information equipment business, net
sales totaled 48,389 million yen, up 11.3% over the previous year. Segment
income amounted to 2,482 million yen, up 45.3% over the previous year. In thesoftware business, net sales were 2,932 million yen, up 5.5% over the previous
year. Income totaled 263 million yen, up 11.4% over the previous year. In the
Others business, net sales were down 11.1% to 17,589 million yen. Segment
income was up 4.9% year‐on‐year to 474 million yen.

This slide shows changes in segment results from the forecasts previously
announced in February. Net sales were 7,455 million yen higher than this forecastin the electronic components business, 1,611 million yen lower in theinformation equipment business, 1,068 million yen lower in the software
business, and 2,589 million yen higher in the Others business. Operating income
was 1,942 million yen higher than the forecast in the electronic components
business, 307 million yen higher in the information equipment business, 37
million yen higher in the software business and 274 million yen higher in the
Others business. Operating income exceeded forecasts for all businesses.
By company, Kaga Electronics’ net sales came in 8,897 million yen above forecast,Kaga FEI’s sales were 1,932 million yen higher, and EXCEL’s sales were 3,464
million yen lower than forecast. Kaga Electronics’ operating income was 1,783
million yen higher than the forecast, Kaga FEI’s was 462 million yen higher andExcel’s operating income was 206 million yen higher.

I will now explain the performance of the electronic components business bysegment.
I just explained the factors pushing up net sales and segment income, but not
only did the consolidation of Excel raise income for the components sales
business; this segment also adapted to the recovery in demand from the second
half of the fiscal year and performed well. However, Kaga FEI continued to beaffected by the termination of its sales agency agreement with Cypress, andresults fell short of the previous year’s levels.
The EMS business hit its lowest point in Q1, when it was affected by the
lockdown of some overseas plants during the COVID‐19 pandemic. Demand
recovered rapidly from the middle of the fiscal year, particularly in theautomotive and industrial equipment sectors, as economic activity picked up
again.

In the information equipment business, net sales and segment income all rose,primarily because the increase of telework and online learning led to higher salesof PCs, PC peripherals and security software to electronics retail stores andschools and other educational institutions.
Sales were strong for thermography equipment for temperature checks andsterilizing deodorizers with antiviral functions, which were sold as products
aimed at countering COVID‐19.

Moving on to the status of M&As, Kaga Electronics was affected by COVID‐19, but
sales increased by 866 million yen. Sales were down 68,651 million yen for Kaga
FEI due to the loss of major commercial rights. The addition of 46,535 million insales from Excel was unable to fully compensate for the decline at Kaga FEI, and
the Group’s sales overall fell 21,249 million yen.
Gross profit increased 1,974 million yen for Kaga Electronics, and fell 3,400
million yen for Kaga FEI. Excel, the new subsidiary, contributed 2,365 million yen,so that gross profit rose 920 million yen for the Group overall.
The gross profit margin increased from 13.7% to 14.5% for Kaga Electronics andfrom 6.8% to 7.8% for Kaga FEI. With the addition of a 5.1% gross profit margin
from Excel, the Group’s overall gross profit margin increased from 10.6% in theprevious year to 11.3%.

Next, we have SG&A expenses. Both Kaga Electronics and Kaga FEI endeavored to
cut costs and absorbed the impact of the new consolidation. Kaga Electronics
reduced SG&A expenses by 1,011 million yen and Kaga FEI cut them by 1,750
million yen. SG&A expenses increased by 2,230 million yen for Excel, the newly
consolidated company. In the Kaga Electronics Group, Towada Pioneer (currently
Kaga EMS Towada), which joined the Group in the previous fiscal year, andKyokuto Electric, which joined the Group last autumn, pushed up SG&A expenses,
so when discounting for these new additions, the Kaga Electronics Group actually
reduced SG&A expenses by more than 1,011 million yen.

Next, we have operating income. During the COVID‐19 outbreak, operating
income increased for Kaga Electronics, and the operating income margin
improved significantly. Kaga Electronics’ operating income increased by 3,155
million yen, Kaga FEI’s operating income fell by 1,723 million yen, and Excel’s
operating income increased by 6 million yen. This boosted the Group’s overall
operating income by 1,452 million yen.
The operating income margin increased from 3.3% in the previous year to 4.5%
for Kaga Electronics. Kaga FEI’s operating income was 1% in the previous year, so
unfortunately it decreased to 0.3%. In the Group overall, the operating income
margin increased from 2.3% in the previous year to 2.7%.

This table shows the results for each company that I just explained. Pages 10 to
15 explain earnings in each quarter, so please take a look.

Page 16 explains the financial status.
Starting with assets, total assets amount to 237,004 million yen, which is up
29,366 million yen compared with the previous fiscal year. Of this, current assets
total 200,179 million yen, up 25,847 million yen. Non‐current assets are 36,825
million yen, up 3,518 million yen.
Moving on to liabilities and net assets, liabilities total 141,942 million yen, up
20,553 million yen. Net assets amount to 95,062 million yen, up 8,812 million yen.

Starting with assets, total assets amount to 237,004 million yen, which is up
29,366 million yen compared with the previous fiscal year. Of this, current assets
total 200,179 million yen, up 25,847 million yen. Non‐current assets are 36,825
million yen, up 3,518 million yen.
Moving on to liabilities and net assets, liabilities total 141,942 million yen, up
20,553 million yen. Net assets amount to 95,062 million yen, up 8,812 million yen.

Next, we have inventories. Inventories total 37,948 million yen, up 6,040 million
yen. Inventory turnover was 32.8 days. Notes and accounts receivable were
108,394 million yen, up 17,023 million yen. Notes and accounts payable were
79,854 million yen, which is a 9,665 million yen increase. The A/R turnover was
93.7 days and the A/P turnover was 79.8 days.

Next, I would like to explain cash and deposits, interest‐bearing debt and cash
flows. Cash and deposits totaled 45,636 million yen, up 2,251 million yen.
Interest‐bearing debt was 38,261 million yen, up 9,524 million yen.
Cash flow from operating activities provided 9,999 million yen, cash flow frominvesting activities used 2,453 million yen, and cash flow from financing activities
used 6,851 million yen.

Continuing on to the equity ratio, total assets were 237,004 million yen, up
29,366 million yen, and shareholders’ equity was 90,967 million yen, up 12,682
million yen. As a result, the equity ratio was 38.4%.
The ROE increased significantly to 13.5%. The net profit margin was 2.7%, double
compared with the previous year. Financial leverage was almost unchanged at 2.6,
and the total asset turnover deceased to 1.8.

Finally, I would like to explain our full‐year earnings forecasts for the fiscal year
ending in March 2022.
We expect net sales to increase 11.3% over the previous year to 470,000 million
yen. We forecast 13,000 million yen in operating income, up 13.4% over theprevious year. Ordinary income is expected to increase 6.7% over the previous
year to 12,000 million yen. We expect profit attributable to owners of parent todecrease 29.8% over the previous year to 8,000 million yen. As a result, EPS
would be 291.20 yen and ROE would be 8.5%.

If we look at forecasts by segment, we expect net sales in the electronic
components business to be 404,000 million yen and segment income to total
9,900 million yen. This amounts to a 14.3% increase in net sales over theprevious year and a 21.5% increase in segment income.
In the information equipment business, we expect a 7% decrease in net sales to45,000 million yen, and a 7.3% decrease in segment income, to 2,300 million yen.
In the software business, we forecast 3,000 million yen in net sales, up 2.3%, and
300 million yen in segment income, up 13.9%. In the Others business, we forecast
18,000 million yen in net sales, up 2.3%, and 500 million yen in segment income,up 5.4%.
As the final year of the Medium‐Term Management Plan 2021, the entire Groupwill work together to achieve its initial operating income target of 13,000 million
yen. We ask for your ongoing support.
Thank you for your attention.

My name is Ryoichi Kado, and I am the President and COO of Kaga Electronics.
Thank you for your ongoing support and cooperation with our IR activities.
I would like to report on Kaga Electronics’ important management issues in thefiscal year ended in March 2021, entitled “Management Topics.”

This slide provides a summary of today’s briefing. There are five themes.
The first is an overview of financial results in the fiscal year ended in March 2021.
Operating income reached a record high for the second year in a row.
I am particularly impressed with the progress the Company has made with its ability togenerate income. I think we have reached the point at which we can consistently
generate over 10 billion yen in operating income.
The second theme is our progress with the Medium‐Term Management Plan, which isin line with our income targets.
The fiscal year ending in March 2022 is the final year of the plan, and the year in which
we will not only wrap up the current plan, but also prepare for the next medium‐termplan. As a result, we plan to announce our next medium‐term plan during this fiscal year.
Our third theme concerns the post‐merger integration (PMI) of the companies wehave acquired recently.
Progress is generally in line with plans for Kaga FEI and EXCEL. Both companies managed
to post operating income in the black, and will begin to contribute to income from thefiscal year ending in March 2022.
The fourth theme is COVID‐19 countermeasures, and we are operating with the safety
and security of our employees as our main priority.
Our final theme is strengthening governance and SDGs. We increase the number ofoutside directors so that they comprise one‐third or more of the directors, and also set
up a Nomination and Compensation Committee. We also started the SDGs Committee topursue sustainability management.
I will now explain each of these themes more fully.

As a means of summarizing the fiscal year ended in March 2021, I will explain the progress wemade in building up our ability to generate income. This ability is the capacity to create
operating income, and we posted record‐high operating income for two straight years, following
the previous fiscal year, as I will now explain.
If you look at the two graphs on the left, you will see that the upper one shows the Group’s
consolidated operating income over 10 years as a bar graph, and the line graph shows the grossprofit margin, SG&A ratio, and operating income margin for the same period.
Kaga FEI became a Group company in the fiscal year ended in March 2019, which is represented
by the third line from the right. Bringing a company with a lower margin than Kaga Electronics
into the Group brought the gross profit margin down for two straight years, to 12.1% and then
10.6%, but it began to improve after bottoming out in the fiscal year ended in March 2020.
As a result, we have achieved a revenue structure capable of consistently generating operating
income over 10 billion yen in the fiscal years ended in March 2020 and 2021.
The lower graph, which shows the same 10‐year period for Kaga Electronics on a parent basis,
allows us to delve into this a little deeper. The gross profit margin rose from the 12% range 10
years ago to the 13% range and then gradually but steadily rose, reaching the 14.5% range in thefiscal year ended in March 2021. The SG&A ratio rose from the 11% range to the 12% range 10
years ago, but since I took current position, it was consistently kept down in the 10% range, andwe were finally able to bring this ratio below 10% in the fiscal year ended in March 2021. This
may sound picky, but while the graph shows 10%, in reality the ratio was 9.99%.
As a result, Kaga Electronics’ operating income margin was 4.5% on a parent basis. We havegone through several M&As, including the acquisition of Kaga FEI and EXCEL, but we have notrelaxed our grip on Kaga Electronics’ approach to management with an emphasis on income. We
will continue our M&As to become a company worth 1 trillion yen net sales, but as long as Kaga
Electronics’ own revenue base does not change, the Group’s income growth will be sustainable.

Next, I will discuss the new fiscal year, which ends in March 2022.
The fiscal year ending in March 2022 is the last year of the three‐year Medium‐
Term Management Plan 2021. The management targets for this plan were 500
billion yen in net sales and 13 billion yen in operating income. Respective
earnings forecasts, which were released on May 13, are 470 billion yen and 13
billion yen. While we expect to achieve the plan’s target for operating income,net sales are still some ways from the target.
The plan was established three years ago, in summer to autumn 2018. During thisperiod, there were no major changes for Kaga Electronics itself, but in the Group,
Kaga FEI’s major sales agency agreements were terminated, resulting in the lossof nearly 100 billion yen in sales. This was offset to some extent with theacquisition of EXCEL, but about 30 billion yen could not be covered. At this point,
however, we have no plans to lower our management targets in the medium‐
term plan, and will work hard to cover this 30 billion yen over the next year as myown “challenge” goal.
Operating income has changed in substance from three years ago, but as Kaga
Electronics’ own ability to generate income has improved, we think this target
can be achieved.

I would like to explain our progress with the post‐merger integration (PMI) of
Kaga FEI, which we acquired in January 2019.
Starting with our EMS initiatives, as I explained previously, in April 2019 weestablished the EMS/E2MS Business Division within Kaga FEI as a sales teamdedicated to EMS, and this division has worked with Kaga Electronics’ EMS
Division on sales activities targeting our major customers. In the fiscal year ended
in March 2021, the division approached 124 companies and brought in 11 orders
from eight companies for development, experimental production and mass
production, and we expect them to begin posting sales from this fiscal year. Last
year we approached 90 companies and received orders from four, showing that
EMS marketing has really picked up over the past year.
The next key point is initiatives with new products. We have already explained
the loss of major sales agency agreements with Cypress and others, and new
business is essential to fill this hole. Kaga FEI has aggressively worked to develop
new products for five years now, and has initiated new business with a total of 90
companies to date. Net sales generated by these new products totaled 12 billion
yen in the fiscal year ended in March 2021, and we expect about 20 billion yen insales in this fiscal year.
We worked hard to consolidate and close the sales bases and organizations thatthese two companies have in Japan and overseas. Our work on this is generally
finished in Japan, and overseas, we are working on consolidation in South Korea.

Next, I will explain the status of our progress with PMI for EXCEL, which we acquired in
April 2020. As I explained before, I will discuss new business and the consolidation andclosure of bases.
In the first new business, we expanded sales of photocatalytic sanitizer/deodorizers
manufactured by Kaltech Co., Ltd. Sales were expanded by making full use of not only
EXCEL’s sales channels, but also those of Kaga Electronics Group. The product line‐up
expanded from personal products worn around the neck to wall‐mounted products
suitable for a 16‐mat room and a stationary type for a 60‐mat room. These products
meet companies’ needs for coronavirus countermeasures.
Now let's move on to EV buses. As the sales agent for Alfabus Co., Ltd., an EV bus
manufacturer in China, EXCEL established Alfabus Japan in 2019, where the company isworking to expand sales of eco‐friendly EV buses. Alfabus China was established in 1999
and collaborated with a Swedish bus manufacturer on vehicle manufacturing and with aJapanese battery manufacturer on the battery to produce a large, 12‐meter class EV bus.
As the top runner in China, which is particularly advanced in EV bus manufacturing,
Alfabus EV buses operate in Shanghai, Chengdu, Wuxi and other cities, and are also
running through major cities in Spain and Italy. In Japan, the company received orders
from local governments and delivered two buses in the fiscal year ended in March 2021,
with two additional confirmed orders for the fiscal year ending in March 2022. EV buses
use clean energy with no exhaust gas emissions, making this a business that gives backto society in line with SDGs.
In regards to the consolidation and closure of sales bases, we are steadily implementing
structural reforms, such as liquidating subsidiaries, consolidating offices in Japan andoverseas with Kaga Electronics’ offices, and moving the headquarters to Kaga
Electronics’ headquarters building.

We reported on COVID‐19 at the previous briefing in November, and will now provide an
update on conditions since then.
Our sales bases continue with marketing activities with safety as our top priority,
primarily achieved with telework and staggered working times in line with guidancefrom the central and local governments in Japan and overseas.
This table summarizes the office attendance rate in Japan, showing that the rate was
39% for Kaga Electronics on a parent basis and 46% for Group companies in H1; in H2,
the respective rates were 46% and 52%. Until now, we have tried to operate with an
office attendance rate below 30% when the government has declared states of
emergency and 40‐50% when they've been lifted. We have further endeavored torestrict the flow of people even more with an office attendance rate of 20% in responseto the most recent third state of emergency declaration.
In Japan, two employees contracted COVID‐19 at Kaga Electronics’ headquarters and 14
at Group companies. Luckily, none of the cases were severe, and all have returned towork in good health.
None of our production bases in Japan, Thailand and Indonesia suspended operations
even once, and have continued manufacturing activity, however our bases in China,
Malaysia, Vietnam and other countries temporarily suspended operations in H1 in linewith the lockdowns ordered by their governments, as shown here.
Overseas, 30 employees developed COVID‐19 in Europe and 25 in the Americas. All ofthese cases were due to the rise in cases caused by variants from the second half of2020. There were no cases in China or other parts of Asia.

This slide shows measures to prevent the spread of COVID‐19 at our offices inJapan and overseas. The top four photos show offices in Japan, including ourheadquarters, and the bottom four show EMS plants overseas.
With the goal of not bringing the virus into work and not passing it on, we have
set up thermography machines at office entrances, and all employees and visitors
have their temperature taken when they arrive and also disinfect their hands. We
have also set up partitions in the rooms to prevent airborne droplets, andantiviral coatings are applied within rooms, with Kaltech’s photocatalytic
sanitizer/deodorizer demonstrating our exhaustive antiviral and antibacterial
measures.
At EMS plants overseas, temperatures are taken when entering the building,masks and goggles are worn within, and social distancing measures are enforced
on production lines and in the buses used for commuting to work.
We are also taking measures to prevent the spread of COVID‐19, including hand‐washing, gargling, and disinfecting with alcohol, as well as partitions set up in thedisinfecting showers and employee cafeteria to prevent contact between
employees at plants. To date, infections have been singular events, with mostoccurring within the home; there have been zero clusters of outbreaks in theworkplace.

I will now explain efforts to strengthen our governance system.
We decided to rebuild our governance system so that it can adequately meet thedemands made upon it, in line of the revisions to the Corporate Governance
Code this year and the changes that the Tokyo Stock Exchange is making to its
market segments next year.
The first change is to increase our number of outside independent directors by
one, from three to four. We have seven internal directors, so outside directors
will make up more than one‐third of the Board of Directors.
We also set up a Nomination and Compensation Committee as a voluntary
advisory council. Needless to say, this is intended to raise the transparency of thedecision‐making process for officers’ nominations and compensation. An outside
director will serve as chairperson.
These two changes will be implemented following the general meeting ofshareholders to be held in June, but before this, we established the SDGs
Committee with the aim of deepening our initiatives on ESG issues from April.
The decision to make outside directors comprise one‐third of the board and theformation of a Nomination and Compensation Committee are both part of thiseffort.

In closing, I will explain the SDGs Committee that we launched in April.
Our basic stance on SDGs is that it is important to intensify our response to CSR and ESG that wehave developed thus far and implement sustainability management. We established the SDGs
Committee as a means of promoting these efforts throughout the Group in hopes of balancing
solutions to social issues with ongoing growth as a company while contributing to the creation ofa sustainable society.
The SDGs Committee is chaired by myself, with each division’s chief officers and others serving
as members. Working groups on the environment, society and governance are set up under thiscommittee to establish and implement guidelines, measures and objectives for these ESG issues.
Since this committee is under the direct supervision of the president, all business divisions andGroup companies will be involved with the commitment of top management as we expand SDGs
initiatives.
Finally, we will explain the ESG issues that each working group needs to address.
・ The Environment Working Group will consider ways to aggressively utilize renewable energy at
offices in Japan and overseas to contribute to the realization of a decarbonized society. If
possible, we would like to aim for RE100.
・ The Society Working Group will work on promoting diversity, including the active participation
and utilization of women, and workstyle reforms and health management, among other issues.
・ The Governance Working Group will consistently address the Corporate Governance Code,which will be revised regularly from this point, helping to ensure that Kaga Electronics cancontinue to be a valuable company for all stakeholders, beginning with our shareholders.
We will organize the output of these activities in a Medium‐term Sustainability Plan this fiscal
year as a roadmap and report back to all of you, together with a new medium‐term business
plan.
This concludes my briefing.
Thank you for your attention.

ご静聴ありがとうございました。

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