My name is Kawamura with KAGA ELECTRONICS. Thank you verymuch for your continued patronage.
I would like to provide an overview of the financial results for the fiscal
year endingMarch 2023.

First, here is a summary.
Net sales were JPY608 billion, up JPY112.2 billion from the previous year. This wasdue to significant growth in both component sales and EMS in the electronic
components business. Operating profit increased JPY11.3 billion from the previous
year to JPY32.2 billion. All items, from net sales to net profit, have reached record
highs.
I will continue with our forecast for the fiscal year ending March 2024.

As a premise for the outlook, although the economic situation is expected to show a
gradual recovery, the future is uncertain due to the soaring prices of various
commodities and financial system instability. As for industry trends, although
shortages and long delivery times for semiconductors and electronic components
have been largely resolved, we expect a temporary decline in demand due to theimpact of inventory adjustments by customers and a rebound from the increase indemand for coronavirus disasters.
Based on a cautious view of the domestic and overseas business environment andmarket conditions, we are forecasting lower sales and profits in the electronic
components business,with net sales of JPY550 billion and operating profit of JPY25 billion. For the fiscal
year ended March 2023, we have decided to pay a full-year dividend of JPY220 per
share by adding a special dividend of JPY70 to the initial dividend of JPY150,
consisting of an ordinary dividend of JPY140 and a commemorative dividend of
JPY10, due to our robust performance.
Although we expect a decrease in profit for the fiscal year ending March 2024, wehave decided to pay a dividend of JPY220, the same as in the previous fiscal year.
The Company plans to pay interim and year-end dividends of JPY110 per share.

Next, the key highlights of our financial results.
Net sales totaled JPY608.064 billion, up 22.6% from the previous year. Grossprofit totaled JPY78.514 billion, up 29.7% from the previous year. Gross profit
margin improved significantly to 12.9%.
SG&A and other general administrative expenses totaled JPY46.265 billion, up
16.7%from the previous year. Operating income was JPY32.249 billion, up
54.2% from the previous year. Ordinary income was JPY32.739 billion, up
52.6% from the previous year. Net profit attributable to owners of the parent
was JPY23.07 billion, up 49.8% from the previous year. EPS was JPY878.65
and ROE was 19.6%.
Compared to the figures announced on February 7, 2023, as shown on the far
right side of this table, there is an upward revision in all items.

Here is a summary of each business segment.
The electronic components business recorded JPY539.342 billion, up
24.3%fromthe previous year. Segment income was JPY28.314 billion, up 56.4%
YoY.
Next is information equipment. Sales of JPY43.68 billion, up 10.3% fromtheprevious year. Segment income was JPY2.449 billion, up 17.4%.
Software sales were JPY2.998 billion, up 8.3% from the previous year.
Segment income was JPY286 million.
Sales of other products totaled JPY22.044 billion, up 12.5% from the previous
year. Segment income was JPY1.101 billion, up 76% from the previous year.

This is followed by the performance by company.
KAGA ELECTRONICS posted sales of JPY348.034 billion, up 23.8% from theprevious year. Operating income was JPY21.899 billion, up 41.6%.
Kaga FEI posted sales of JPY199.548 billion, up 33.5% from the previous year.
Operating income totaled JPY8.103 billion, up 121.8% from the previous year.
Excel posted sales of JPY60.481 billion, down 7.4% from the previous year.
Operating income was JPY2.072 billion, up 7% from the previous year.

Here is a graphic presentation of the impact of M&A.
As explained earlier, sales of KAGA ELECTRONICS and Kaga FEI increased
significantly, but this was mainly driven by the electronic components
business.
Gross profit increased both in terms of profit amount and profit margin. In
particular, gross profit margin increased 0.7% YoY to 12.9%, of which KAGAELECTRONICS increased 0.4% to 15.3%, FEI increased 0.7% to 10.5%, andExcel increased 0.8% to 7.3%.
As for the SG&A ratio, SG&A expenses increased in line with sales growth,
butthe SG&A ratio decreased.
As for the operating income/operating income margin, the increase in grossprofit absorbed the increase in expenses, resulting in an increase in profit
and an improvement in the profit margin.

These are the results of the electronic components business.
Compared to the previous year, net sales increased by JPY105.489 billion, or
24.3%. Segment income increased by JPY10.206 billion, or 56.4%.
This was due to the component sales business, which enjoyed an elevatedlevel of demand from a wide range of industries given improved supply anddemand conditions from H2, resulting in a significant increase in sales.
Although supply shortages continued in the automotive-related market,
wewereable to secure sales volume by taking advantage of our procurement
capabilitiesasan independent trading company. In parallel with spot sales, theGroup was also active in proposing alternative parts.
In the EMS business, sales to the automotive industry grew significantly,
while sales to the medical equipment and office equipment industries
remained strong.

Next is the information equipment business.
Net sales increased by 10.3%, or JPY4.063 billion. Segment income increasedby JPY363 million, or 17.4%.
Factors contributing to this result included solid sales of personal computers
to corporate and educational institutions, especially for high-priced products.
PC peripherals, such as security software, also remained strong.
In the LED installation business, the installation of large-scale nationwide
projects, which had been delayed due to material shortages, progressedsmoothly, and contributed significantly to business earnings.

The table shows the results of the previous year by segment of the mid-term
management plan.
In the electronic components business, net sales were JPY398.783 billion, up
22.4%from the previous year. Segment income was JPY19.475 billion, up
75.5%.
EMS sales were JPY149.862 billion, up 27.2% from the previous year. Segment
income was JPY9.563 billion, up 30%.
For CSI, net sales were JPY43.68 billion, up 10.3% from the previous year.
Segment income was JPY2.449 billion, up 17.4%.
Others posted sales of JPY15.739 billion, up 25.4% from the previous year.
Segment income was JPY663 million, up 159.4%.

Next, I will explain the analysis of core operating profit.
Operating income, which was JPY32.249 billion in the previous year, marked asignificant increase.
The first thing I would like to mention is the sales volume and sales mix which
contributed to the increase of JPY17.538 billion. Spot sales accounted for
JPY429 million. SG&A expenses were the main reason for the JPY6.633 billion
decrease. The foreign exchange impacted favorably to add JPY1.782 billion in
profit.
Given the circumstances we increased JPY11.334 billion in profit.
For the fiscal year ending March 2024, operating income is expected to be
JPY25 billion. We expect to lose JPY4.883 billion in profit due to the decreasein sales volume and sales mix, and a JPY4.631 billion decrease in spot sales.
The decrease in SG&A expenses is expected to increase to JPY2.265 billion.
As a result, the Company forecasts a decrease of JPY7.249 billion comparedto the same period of the previous fiscal year.

Next, I will explain the balance sheet.
Total assets amounted to JPY286.217 billion, an increase of JPY14.077 billion
from the same period last year.
Current assets totaled JPY245.572 billion, an increase of JPY11.587 billion.
Non-current assets totaled JPY40.645 billion, an increase of JPY2.490 billion.
As for liabilities and net assets, total liabilities amounted to JPY156.479
billion, a decrease of JPY9.859 billion.
Net assets totaled JPY129.737 billion, an increase of JPY23.937 billion.

Next, I would like to review inventories.
Inventories totaled JPY56.205 billion, a decrease of JPY6.401 billion. Inventory
turnover was 33.7 days.
The balance of trade receivables was JPY129.099 billion, an increase of
JPY8.151 billion. The balance of trade payables was JPY79.232 billion, adecrease of JPY7.260 billion.
Both the accounts receivable turnover and accounts payable turnoverdecreased to 77.5 days and 55.8 days, respectively.

Next, I will review cash and cash equivalents and interest-bearing debt.
Cash and deposits totaled JPY52.6 billion, an increase of JPY11.549 billion.
Interest-bearing debt totaled JPY41.938 billion, a decrease of JPY9.232 billion.
As a result, both the D/E ratio and net D/E ratio decreased to 0.32 andnegative 0.08, respectively.
As for cash flow, operating cash flow provided JPY30.569 billion, investing
cash flow used JPY4.805 billion, and financing cash flow used JPY15.549
billion.

I would like to explain about stability and efficiency.
Total assets stood at JPY286.217 billion, an increase of JPY14.077 billion.
Shareholders' equity totaled JPY129.608 billion, an increase of JPY23.928
billion.
As a result, the equity ratio improved significantly to 45.3%.
Next is ROE. We are at 19.6%.
The breakdown is as follows: total asset turnover of 2.2, financial leverage of
2.4, and net profit margin of 3.8.

I would like to continue by explaining our earnings forecast for the fiscal year
ending March 2024.
We have decreased net sales to JPY550 billion, operating income to JPY25
billion, ordinary income also to JPY25 billion, and net profit attributable toowners of the parent company to JPY18 billion.
As a result, EPS and ROE are JPY685.42 and 13.3%, respectively.

We have broken down this forecast by segment.
In the electronic components business, net sales were JPY471.5 billion, down
12.6%from the previous year. Segment profit was JPY20.7 billion, down 26.9%
fromthe previous year.
Information equipment posted sales of JPY45 billion, up 3%. Segment income
increased by JPY2.5 billion, or 2.1%.
Software sales were JPY4.5 billion, up 50.1%. Segment income increased by
JPY0.3 billion, or 4.6%.
Others posted sales of JPY29 billion, up 31.6%. Segment income increased by
JPY1.5 billion, or 36.1%.

I am Kado, the President of KAGA ELECTRONICS. Thank you for yourcontinuedsupport and cooperation in our IR activities.
I will now present our management topics for FY2022. The three main topics
are: financial results, the medium-term management plan, and thesustainability mediumterm management plan.

First, I would like to discuss two points regarding FY2022 financial results.
The first is regarding alternative proposals and alternative sales. In previous
financial results briefings, we have said that spot sales are a one-timerevenue stream and in parallel, we would propose and sell alternative
products that lead to sustainable earnings. This page summarizes how many
alternative sales there have been.
In FY2022, we made alternative sales to 88 customers. Of these, 71 wereexisting customers and 17 were new. Total sales amounted to approximately
JPY7 billion. In
FY2023, we expect to sell approximately JPY7.5 billion to approximately thesame number of customers.
The graph on the right shows what products were sold and to what
industries. By product, power semiconductors, FPGAs, and analog ICs
accounted for the majority of the total. By industry, industrial equipment,
consumer electronics, and automotive, in that order, are expected to growsignificantly in FY2023.

The second is inventory reduction.
In my presentation at the previous financial briefing, I mentioned thatinventory reduction is an urgent management issue. Global shortages ofsemiconductors and electronic components and longer lead times. In
addition, many manufacturers have been reviewing their procurement policies
against the backdrop of disruptions in international logistics networks, andhave been building up parts inventories over the past year or two.
We are no exception, and in our component sales business, we have had tosecure the number of goods as a result of prior and overlapping orders fromour customers. In addition, the EMS business experienced an increase inwork in the process due to difficulties in procuring some parts and materials,
as well as the securing of safety stock as a BCP.
As a result, inventories, which were JPY62.6 billion at the beginning of
FY2022, built up to JPY71.2 billion at the end of September and JPY78.8
billion at the end of December.
Unfortunately, the inventory at the end of this fiscal year did not reach
reduction target, which I said we would normalize to below JPY50 billion, but
we were still able to reduce it by over JPY20 billion, bringing it back to JPY50
billion range.
In this graph, our consolidated inventory is broken down into ourmanufacturing business, mainly EMS, and our trading company business,
mainly component sales. As you can see, the trading company business is not
hard to hand off, so we were able to drop our position quickly since the end of
December. However, the manufacturing business is still somewhat heavy
with some work-in-process inventory. We hope to achieve our overall goal of
30 days of turnover by the end of this quarter.

Next, I will discuss three points in the medium-term management plan.
The first is the latest forecast of the medium-term management plan, which
was announced on May 11, at the same time as the financial results.
At the previous meeting, I stated that the revision of the operating profit
target for the medium-term management plan would be disclosed in theannouncement of financial results in May. The reasons cited were to
determine the final landing of FY2022 earnings, which are expected to behigher, and to improve the accuracy of the FY2023 forecast, which isconcerned about downward pressure on earnings due to the elimination of
spot sales, inventory adjustments, and other factors.
Based on these upside and downside factors, we have announced this latest
outlook for our management targets for FY2024, the final year of the plan.
The plan period remains unchanged from FY2022 to FY2024, a three-year
plan. There is no change to the original forecast of achieving JPY600 billion insales through autonomous growth, and JPY750 billion in reflecting new M&A
challenges.
Operating income was revised to exceed JPY30 billion or higher. ROE was set
at a stable 10% or higher, in line with the revision of operating profit.
On the next page, we will discuss the concepts of operating profit and ROE inmoredetail.

Operating profit was set at more than JPY30 billion, based on the expectationthat operating profit will decline once from the highest profit level in FY2022
to FY2023, and then return to the growth phase in FY2024.
As the main indicators on which these assumptions are based, we haveindicated the direction of each fiscal year for each of the following factors -sales volume, spot sales, EMS business expansion, PMI, and humaninvestment -- with blue arrows indicating factors for increased profits and red
arrows indicating factors for decreased profits.
Operating profit forecast for the components sales business and the EMS
business, which had led the Company to four consecutive years of record
profits through FY2022, is lower in FY2023 due to recession risk, the impact
of temporary inventory adjustments, and a drop-off in spot sales. After
FY2024, there is no change in the medium-term business expansion scenario,
such as EVs, 5G, IoT, and AI.

On the other hand, we expect the improvement in profitability of acquiredcompanies to continue. In addition, we will continue to invest in humanresources, including salaries and bonuses.

This page is a graphical representation of ROE trends broken down into its
three components.
The bottom line is a net profit margin of 3% to 3.5%, based on an operating
profit margin of about 5%.
We believe that the key factor in improving ROE is to maintain a high profit
margin.
Second, financial leverage is 2 to 2.5 times, based on an equity ratio in therange between 40% and 50%.
If we assume the third factor, total asset turnover, to be around the current
two times, we believe that ROE will be stable around 12% to 15%.
Based on these estimates, we have now revised our ROE target to a stable
10% or higher.
We recognize that our cost of equity is roughly 7% or 8%, so our message
here is to maintain ROE at 10% or higher to consistently exceed that level.

Next, I will discuss the progress made in the first year of the sustainability
mediumterm management plan.
This page is related to prominent issues of our group, but I have alreadydiscussed them previously, so I will omit them here.

This page shows the medium-term and long-term targets for each theme
established in the sustainability medium-to long-term management plan.
From the following pages, I will report on the progress in ESGs per category.

First, the “E” of Environment.
In this category, we are working to achieve 100% renewable energy.
As for major progress in FY2022, we have started designing for the
installation ofsolar panels at our manufacturing sites in Japan.
In addition, at our overseas manufacturing bases, the Hubei Plant in China
and the Vietnam Plant have begun to install renewable electricity from solar
panels.
These sites are expected to cover 30% to 50% of their annual electricity use.

Next is the “S” of Society.
The key theme here is diversity.
Our ultimate goal is to develop and promote women to officers and boards,
and as a start, we started working to increase the ratio of female managers
and the ratio of
female career-track employees.
Progress in FY2022 was as follows: the ratio of female career-track positions
increased by 12.3pt from the previous year to 18.1%, and the ratio of female
managerial positions increased by 3.2pt from the previous year to 16.5%.
One of our achievements in FY2022 as work-life balance management was
the certification of Health & Productivity Management Outstanding
Organizations we
received in March of this year.
In addition, remote work, which took root during the pandemic, did not go
away even in the post-COVID-19 period; instead, it was institutionalized as
one of the normal work styles. We estimate the rate of remote workers to be
40% to 60%.

Finally, the “G” of Governance.
An important theme here is the restructuring of the governance structure.
As for the results for FY2022, we will review the number of directors, andfrom June of this year, the number of directors will be reduced from seveninternal and four external, for a total of 11; to three internal and threeexternal, for a total of six. The purpose is to clarify the supervisory andexecutive functions of management to enhance management transparency
and speedy execution of business operations.
On the other hand, with respect to the diversification of the Board of
Directors, unfortunately, we were unable to submit a female candidate for the
Board of Directors
at this year's General Meeting of Shareholders, but we have decided to
introduce a female outside corporate auditor with the future transition to acompany with an
Audit Committee System in mind.

In connection with the medium-term management plan, I would like tomention a few things about shareholder returns.
The dividend for FY2022 was JPY220 per share, which, like our businessperformance, is a record high. Despite the forecasted decrease in profit for
FY2023, the dividend forecast remains unchanged at JPY220 per share.
As discussed earlier, although single-year operating results will fluctuatefrom FY2022 to FY2024, with both increases and decreases, due to therapidly changing business environment, we have decided that it is desirable
to maintain the dividend level for shareholders who will hold our shares forthe long term.
In February of this year, we resumed our overseas IR activities for the firsttime in three years, and met with investors and 11 companies in the UK. In
the discussion with them, we were asked what we think of the dividends.
There were also discussions among shareholders and new investors alikethat dividend cuts are fatal to long-term investors. This real feedback was
helpful.
We hope the investors will hold our stocks for the long term with peace ofmind, and that is the message we embed here.

Finally, we have prepared a list of exchange rates for your reference.
Regarding the foreign currency exchange rate for the previous fiscal year,theUS dollar is the main currency used in our financial figures, and the annual
exchange rate for the US dollar was JPY135.47, which you can see is a
depreciation of about JPY23 compared to the previous fiscal year.
We estimate that a 1% change in the US dollar will have an impact of
JPY1.218 billion on net sales and JPY50 million on operating profit.
I have now presented an overview of the Company's financial results for the
fiscal year ending March 2023.

Thank you very much for your attention.