創 造andと 挑Ambition
戦
Creativity
先進エレクトロニクスで未来を創造する
A solution design company
ソリューションデザインカンパニー
that is creating
the future through advanced electronics

Financial Results Presentation Material
for the Year Ended March 31, 2023
HAGIWARA ELECTRIC HOLDINGS CO., LTD.
(TSE Prime Market & NSE Premier Market: 7467)

June 2, 2023
FY23/3 Financial Results Presentation Material

Highlight
Financialresultssummary for
FY2023/3

Net sales, operating profit, ordinary profit, and profit reached record highs• Net sales reached a record high at ¥186 billion, up 17.4% YoY.
Grew both in Japan and overseas due to encouraging production on the clientside and weakening yen effects.
• On the profit side, gross profit increased due to increased sales, leading to
the highest ever operating profit at ¥6.7 billion, up 54.4% YoY.

Aim at net sales of ¥213 billion, a record highEarnings
forecasts for
FY2024/3

Progress in themedium-term
management
plan• Net sales are expected to grow in both the Electronic Devices Business andthe Technology Solutions Business.
• On the profit side, operating profit is expected to be ¥6.3 billion, incorporating
growth investment, decline due to foreign exchange fluctuations in theprevious fiscal year and spot projects, which is a special factor, etc.

The management targets for the final fiscal year were achieved one
year earlier than scheduled• The management targets for the final fiscal year (FY2024/3) were achieved in
FY2023/3, and new management targets were announced.
(New management targets) Net sales ¥213 billion, operating profit ¥6.3 billion,
ROE 8% or higher

FY23/3 Financial Results Presentation Material

1Our characteristics (main businesses)◼ We focus on semiconductor business for automobiles and digitalsolution business for customers mainly in the manufacturing industry.
Electronic Devices BusinessTechnology Solutions Business• Sale of semiconductors and electronic
components mainly for automobile-relatedcompanies• Technological support including support
for development of embedded softwareand hardware• Sale of IT and measurement devices, andproposal of building IT platform
infrastructures• Design, development, manufacturing andsale of FA systems and industrial
computers

Technology Solutions Business

14.5%
Electronic Devices Business

FY2023/3
Sales ratio

85.5%
FY23/3 Financial Results Presentation Material

2Our characteristics (sales trends)
Expansion of business
operations such as installationof public facility equipment andsale of electronic components

We developed as a solution design
company that is creating the future
through advanced electronics

Large growth taking advantage
of automotive electronization

Net sales(Billions of yen)

200

180
160
Listed on Tokyo andNagoya Stock Exchanges

16-bit HPU1600 developed

140

Holding company
system120
First overseas subsidiaryestablished

100
80

First micro computer HPU12
developed
Stock offering

60
40 Foundation
20
0

1948

1980

1985

FY23/3 Financial Results Presentation Material

1990

1995

Accounting
period changed

2000

2005

2010

2015

2023

3

Financial results summary for FY2023/3

Earnings forecasts for FY2024/3

Progress in the Medium-Term Management Plan
and Efforts to Enhance Corporate Value

FY23/3 Financial Results Presentation Material

4

Financial results for FY2023/3■ Net sales, operating profit, ordinary profit, and profit all reached record
highs.
(Unit: Millions of yen)

FY2022/3

FY2023/3
YoY

AmountRatio

AmountRatio

Net sales

158,427100%

186,001100%＋27,573+17.4%

Gross profit

14,612

9.2％

18,2149.8%＋3,601+24.6%

Selling, general andadministrative expenses

10,255

6.5%

11,4896.2%＋1,233+12.0%

Operating profit

4,356

2.8%

6,725

3.6%

+2,368+54.4%

Ordinary profit

4,335

2.7%

6,417

3.5%

+2,081+48.0%

Profit attributable toowners of parent

2,876

1.8%

4,912

2.6%

+2,036+70.8%

325.07－554.71－+229.64－

Earnings per share (Yen)FY23/3 Financial Results Presentation Material

5Positive factors for net sales■ Net sales increased by ¥27.5 billion, or 17.4% YoY.
■ There were positive effects of the weak yen and business expansion
through M&A in addition to increased orders due to encouraging
production on the client side and launch of new operations.
Net sales(Billions of yen)

＋13.9

Increase indevice sales(Japan)・Increased
production
・ Launching new
operations
・ Weak yen （＋2.0）

1８６

Increase insolution sales

＋10.3
1５８.４

＋３.２

Increase indevice sales(overseas)
・Increased
production
・ Transfer oftransaction flows
・ Weak yen （＋6.7）

・Increase inembeddedsolutionsbusinesses
・M&A

6
FY23/3 Financial Results Presentation MaterialChanging factors for operating profit■ Operating profit increased by ¥2.3 billion, or 54.4% YoY.
■ Operating profit margin increased by 0.8 points through curbing theincrease rate of selling, general and administrative expenses in
addition to increased sales and increased gross profit due to foreignexchange fluctuations.
Operating profit(Billions of yen)

＋0.９

(１.２)

＋２.８
Increase ingross profit
due to otherfactors（81.9%）

４.3
Increase ingross profit
accompanied
by increased
sales
FY23/3 Financial Results Presentation Material

６.７

Increase in
selling, generaland administrative
・Foreign exchange expenses

・Increase in labor costs
fluctuations
・Spot projects, etc. ・Increase in
distribution costs, etc.
accompanied withincreased sales
7Electronic Devices Business: Financial results summary■ There were positive effects of the weak yen on sales in addition toincrease in the automobile production volume, launch of new adopted
products and deployment of vehicles.
■ Profit margin increased by 0.8 points partly due to a lower rate of selling,
general and administrative expenses.
(Unit: Millions of yen)
FY2022/3
AmountNet sales

FY2023/3

Ratio

AmountRatio

134,661100%

158,974100%+24,313+18.1%

2,663

2.0%

4,491

2.8%

+1,827+68.6%

Segment profit

Segment profit and segment profit margin

Net sales%

Millions of yen

Millions of yen
180,000

158,974

150,000

134,661

120,000
95,692

5,000

4,491

4,000

103,700 105,905

3,000
2,000

60,000

2,870
3.0

2,663

2,674

4.0

2,164
2.6

2.0

2.8

2.0
2.0

1,000

30,000

19/3

20/3

21/3

FY23/3 Financial Results Presentation Material

22/3

23/3

0

8.0

6.0

90,000

0

YoY

19/3

20/3

21/3

22/3

23/3

0.0

8

Electronic Devices Business: Net sales by client (YoY)■ Most sales to major customers increased.
(Unit: Millions of yen)

(Unit: Millions of yen)

158,974
FY2022/3

FY2023/3

134,661
AmountRatio

Amount

Ratio

YoY

DENSO
CORPORATION

75,68556.2%

81,78951.４%+6,104

+8.1%

TOKAI
RIKA CO.,
LTD.

4,293

3.2%

5,44８

3.4%

+1,155+26.9%

Others21,47315.9%

24,60５

15.６%+3,131+14.6%

Overseasclients

33,20824.7%

47,132

29.6%+13,923+41.9%

Total

134,661ー

１５８,９７４ー+２４,３１３+１８．１%

81,78975,685

5,448
4,293

24,605

21,47347,132

33,20822/3

23/3

FY23/3 Financial Results Presentation Material

9Electronic Devices Business: Net sales by region (YoY)■ Sales grew in all areas.
■ Overseas, the transfer of transaction flows and the weak yen had large
positive effects on sales, leading to significant growth of +41.9% YoY.
(Unit: Millions of yen)

(Unit: Millions of yen)

FY2022/3

47,132

33,20823,974

15,553

FY2023/3

AmountRatio

Amount

Ratio

YoY

Japan

101,45375.3%

111,84270.４%+10,389+10.2%

Asia

15,553

11.6%

23,97415.１%+8,421+54.1%

UnitedStates

14,173

10.5%

19,361

１２.２%+5,187+36.6%

Europe

3,480

2.6%

3,795

2.４%

+314

+9.0%

Overseas(total)33,20824.7%

47,132

２９.６%+13,923+41.9%

Total

134,661－

１５８,９７4

ー +２４,３１３+１８．１%

19,361
14,173

3,480

3,795

22/3

23/3

Note: Region names represent business locations (excluding intragroup transactions)
FY23/3 Financial Results Presentation Material

10Technology Solutions Business: Financial results summary■ Sales increased due to encouraging embedded solutions businesses
and addition of subsidiaries through M&A.
■ Sales of embedded solutions, or a high profitability business, increased
and contributed to increased segment profit margin by 1.2 points.
(Unit: Millions of yen)

FY2022/3
AmountNet sales

FY2023/3

Ratio

Ratio

100%

27,026100%+3,260+13.7%

1,692

7.1%

2,234

8.3%

+541

+32.0%Net sales

Segment profit and segment profit margin%

Millions of yen

Millions of yen
30,00027,02623,32824,50521,924

2,500

2,234

15.0

23,7662,000
1,692

20,000
1,500

1,449

1,000

10,000

10.0

1,498
1,303

15,000

7.1

6.2

6.1

5.9

19/3

20/3

21/3

8.3
5.0

500

5,000
0

YoY

23,766

Segment profit

25,000

Amount

19/3

20/3

21/3

FY23/3 Financial Results Presentation Material

22/3

23/3

0

22/3

23/3

0.0

11

Technology Solutions Business: Net sales by business (YoY)■ Sales of the embedded field significantly increased mainly due toencouraging production on the client side engaging in the businesses
related to carriers and semiconductor facilities.
■ HAGIWARA ENGINEERING, which became a subsidiary, contributed toincrease in sales of measurement and FA products.
(Unit: Millions of yen)
(Unit: Millions of yen)

FY2022/3

27,02623,766

Amount8,017

FY2023/3
Ratio

Amount

Ratio

YoY

7,646

13,918
11,815

4,304

IT

7,646

32.2%

８,０１7

29.7%

＋371

+4.9％

Embedded

11,81549.7%

１３,９１851.5%＋2,103＋17.8％

Measure
-ment

4,304

18.1%

5,090

18.8%

＋785

＋18.2％

23,766－27,026－+3,260＋13.7％

5,090

Total
22/3

23/3

IT: Sale of IT devices, development of apps, development of IoT systems, security measures, etc.
Embedded: Development and manufacturing of industrial computers, sale of industrial embedded computers for machinery, etc.
Measurement & FA: Sale of measurement devices, inspection equipment and FA devices, development, manufacturing and sale of various automated and labor-saving manufacturing equipment.

FY23/3 Financial Results Presentation Material

12Technology Solutions Business: Net sales by industry (YoY)■ Sales of factory automation (FA) and industrial equipment wereencouraging mainly in the fields related to carriers and semiconductor
facilities.
(Unit: Millions of yen)

(Unit: Millions of yen)

27,026FY2022/3

FY2023/3

23,766
Amount

8,515

Ratio

Amount

Ratio

YoY

8,147

14,057
10,760

4,857

4,453

22/3

23/3

Automotive

8,147

34.3%

8,515

31.5%

+367

+4.5%

FA &
Industrial
equipment

10,76045.3%

14,05752.0%＋3,296+30.6%

Others

4,857

20.4%

４,453

16.５%

(403)

(8.3)%

Total

23,766－

２７,０２６－+3,260＋13.7％

13
FY23/3 Financial Results Presentation Material

Financial results for FY2023/3■ Net sales, operating profit, ordinary profit, and profit all reached record
highs.
■ Annual dividend per share increased by ¥55 YoY to ¥155. (Unit: Millions of yen)
FY2022/3

FY2023/3

AmountRatio

AmountRatio

Net sales

158,427100%

186,001

100% ＋27,573+17.4%

Gross profit

14,612

9.2％

18,2149.8%＋3,601+24.6%

Selling, generaland administrative
expenses

10,255

6.5%

114,896.2%＋1,233+12.0%

Operating profit

4,356

2.8%

6,725

3.6%

+2,368+54.4%

Ordinary profit

4,335

2.7%

6,417

3.5%

+2,081+48.0%

Profit attributableto owners ofparent

2,876

1.8%

4,955

2.7%

+2,025+69.1%＋55－

Annual dividends per
share (Yen)FY23/3 Financial Results Presentation Material

100

Dividend
payout ratio

30.8％

155

Dividend
payout ratio

YoY

27.9％

14

Financial results summary for FY2023/3

Earnings forecasts for FY2024/3
Progress in the Medium-Term Management Plan
and Efforts to Enhance Corporate Value

FY23/3 Financial Results Presentation Material

15

Earnings forecasts for FY2024/3■ Net sales are expected to grow by 14.5% to ¥213 billion due to growthin both the Electronic Devices Business and the Technology Solutions
Business.
■ Operating profit is expected to be ¥6.3 billion, down 6.3%, incorporating
growth investment, profit decline due to foreign exchange fluctuations in
the previous fiscal year and spot projects, etc.
(Unit: Millions of yen)
FY2023/3

FY2024/3

AmountRatio

AmountRatio

１８６,００１

100%

213,000

100%+26,998+14.5%

Operating profit

６,７２５

3.6%

6,300

3.０%

(425)

(6.3)％

Ordinary profit

６,４１７

3.5%

6,000

２.８%

(417)

(6.5)%

Profit attributableto owners ofparent

４,912

2.6%

3,９00

1.８%

(1,012)(20.6)%

５５４．７１－

４３７．０２－(117.69)－

Net salesInterim dividends per
share (Yen)FY23/3 Financial Results Presentation Material

YoY

16

Return to shareholder■ For FY2024/3, the annual dividend is planned to be ¥145, including amemorial dividend for the 10th year anniversary of listing on the Tokyo
and Nagoya Stock Exchanges of ¥10, in the year-end dividend.
■ Setting a basic policy of stable payment aiming at a dividend payout
ratio of around 30%
Annualdividend

Trends in dividends and dividend ratio
Yen

Dividend
payout ratio

180

155

160

Inc. anniversary
dividend of ¥10

％
50

145
(Forecast)

140
Inc. anniversary
dividend of ¥5

120

95

100
80

Inc. anniversary
dividend of ¥5

60

70

0

15/03

16/03

FY23/3 Financial Results Presentation Material

18/03

30.6

19/03

33.2

30.8

30.6

17/03

100

34.2

29.7

27.2

40

105
80

32.8

30.4
20

105

80

60
40

Inc. anniversary
dividend of ¥5

20/03

21/03

(Forecast)

30

27.9

22/03

23/03

24/03

20

17

Financial results summary for FY2023/3

Earnings forecasts for FY2024/3

Progress in the Medium-Term Management Plan
and Efforts to Enhance Corporate Value

FY23/3 Financial Results Presentation Material

18Medium-Term Management Plan (from FY2022/3 to FY2024/3)
Key Strategies◼ Maximize corporate value by creating value through innovation andbolstering the management base
Key measures(1)-1 Electronic Devices Business[Expand key businesses](1)-2 Technology Solutions Business[Expand key businesses]⚫ Expand onboard System-on-Chip ⚫ Deliver value in the digital(1) Expand corebusinesses(SoC) business⚫ Establish software engineeringtransformation (DX) and factory
integration service market(1)-3 Expand global businesses(2) Create new andhigh value-added
businesses⚫ Activities to promote business innovation planning⚫ Bolster engineering businesses⚫ Promote digital transformation (DX) through company-wide project(3) Bolster
business base(4) Enhance
corporate value

activities└ Reform supply chain management⚫ Develop professional human resources⚫ Enhance employee engagement⚫ Seek to optimize the group operation⚫ Promote SDGs/ESG management⚫ Strengthen capital policy and financial strategies⚫ Enhance stakeholder engagement

FY23/3 Financial Results Presentation Material

19Medium-Term Management Plan (from FY2022/3 to FY2024/3)
Progress of KPIs
■ The management targets for the final fiscal year were achieved one
year earlier than scheduled, and we set new management targets
exceeding the initial targets.
Medium-Term Management Plan
Make New Value 2023
(Unit: Millions of yen)

FY2021/3

Net sales

FY2022/3

127,830 158,427

Initial target
values for
FY2024/3, thefinal fiscal year

Target values for
FY2024/3, thefinal fiscal year

186,001 170,000

213,000

FY2023/3

FY２０２１/３
ratio-＋23.9％＋45.5％＋33.0％＋66.6％

Operatingprofit

3,468

4,356

6,725

5,000

6,300

FY２０２１/３
ratio-＋25.6％＋93.9％＋44.1％＋81.6％

6.8％

8.0％

12.5％

8.0％

ROE

FY23/3 Financial Results Presentation Material

8.0%
or higher
20

Bolster engineering businesses■ Engaged in the M&A schemes targeted at the companies holding
cutting-edge engineering technologies as part of the measures tobolster the engineering business toward implementing the key
measures “Create new and high-value-added business”.
Actual process of onboard cells(Cell and module assembly)

Widespread use ofelectronic vehicles

Expandingsemiconductor
demand that
underpins
sophisticatedtechnologies

Technology
related tolithium-ion
secondarycells

Semicondu
ctorrelated
equipment

Proprietary
technologies of
HAGIWARA
ENGINEERING

Semicondu
ctorrelated
equipment

Establishment of
production facilities
leveraging thedevelopment of newtechnologies

Design, control, and electric
technologies
Image processing technology
High-precision assembly
technology
Cleaning technology

Sophistication of
medical equipment
FY23/3 Financial Results Presentation Material

Medicalrelated
equipment

Robotsystems

Labor saving andautomation by
deploying robots

21

Promote SDGs/ESG management■ We started disclosure based on TCFD recommendations in July 2022.
■ We announced the support for TCFD recommendations and joined theconsortium in April 2023.
（ Group greenhouse gas emissions ）（ Major risks and opportunities related to climate changes ）Category

FactorBusiness impact

Time

Impact

frame

level

Our company has supply chains related to trading-company functions, andthese include semiconductor manufacturing and other types ofmanufacturing
Orders and regulations

If the introduction of carbon taxes and other changes to various laws andregarding production

regulations have negative effects within these supply chains regarding thePolitical

and services for

supply of materials, material prices, and so on, the purchasing costs of ourmeasures,automobile-relatedcompany will increase due to a sharp rise in cost prices.

laws, andcustomers

Decrease in sales and profit due to the phenomenon related to the quantity

regulations

Mediumtermof gasoline vehicle-related parts and changes in the parts structure, as

Medium-automobile-related customers shift to EVs in response to stricter policies for

term

Large

Mediumthe automobile industry

Main risks

Technologies

Strengthening ofPressure on profits due to higher logistics and transportation costs resulting

Medium-emission regulations

from higher freight and transportation costs

term

Replacement of

Increase in capital investment costs due to expansion of in-house power

Medium-existing products withgeneration infrastructure such as solar power generation facilities

term

MediumMediumlow-carbon
technologies, failure toinvest in new

Increase in investment costs for the development of environmentally friendly Medium-

technologies, etc.

in-house products (industrial computers, inspection equipment, etc.)

term

Small

Possibility of insufficient response to environmental information disclosure
Reputation

Our measures to reduce
gas emissions
・Shift to company-owned
eco-vehicles
・Promote shift to LED in facilities, etc.

Changes in investor
and customer behavior

needs (stricter ESG assessment standards, expansion of areas requiring
disclosure) resulting in withdrawal of investment in the company, decline inshare price, impact on human resource acquisition, and risk of human

term

Large

resource outflow
Acute physical Intensification of
risks

abnormal weather

Increased severity and frequency of extreme weather events, such as
typhoons and floods, increases in the risk of supply chain disruptions andprolonged infrastructure outages (which would reduce sales)

Longterm

MediumRising temperatures increasing the cost of energy used for air-conditioning
in the company's offices, and the cost of renovation and rent increasing dueLong-to energy-saving renovations of buildings for coping with rising temperatures term
Chronic

Rise in average

physical risks

temperatures

Popularization andexpansion of electricvehiclesservices

Rising temperatures increasing energy costs for our suppliers, which in turnLong-will increase our purchasing costs due to rising costs

term

accompanying shift to
EV and energy-savingMainmeasuresopportunities

MediumIncrease in opportunities for proposals due to changes in the composition ofcomponents related to electric vehicles (motors, inverters, batteries, etc.),

Medium-and increased business opportunities in software verification and

term

Large

development
inverter-related production equipment in the EV market as a result ofBusiness changes

Smalland relocations to properties with higher environmental performance

Expanded business opportunities regarding battery monitoring and motor &Products andWe will work on reduction in supply chain
emissions in collaboration with related companies

Medium-policies to promote electric vehicles

Mediumterm

Large

Expanded opportunities in the IT solutions business (cutting-edge IT, DX
promotion, cloud computing, etc.) and industrial equipment business(devices, infrastructure, IoT, control/analysis, etc.) for improving the

Medium-efficiency, productivity and energy-saving performance of customers'

term

Large

manufacturing processes, as a result of growing awareness regarding
environmental impact and resource conservation
Markets

Changes to markets
and trends

Increased opportunities to create innovations that contribute to solving

Mediumsocial issues, such as carbon neutrality compliance, and participation in new to longbusinesses and wider domains

Mediumterm

Promotion of activities to reduce the company's internal environmental
Resilience

Promotion of energysaving measures

impact, increased use of environmentally friendly products such as fixtures,and improved environmental awareness among employees, resulting in an
improved corporate reputation and a positive reputation regarding attracting

Shortterm

Smallassets

FY23/3 Financial Results Presentation Material

22Strengthen capital policy and financial strategies[Increased demand for funds based on the Group’s growth strategies]• It is urgent to build a structure to respond to sophistication and higher
functionality of automotive and support stability of global supply chains• Actively invest in DX and human resources for sales growth and businessrestructuring◼ Implement various fundraising schemes in order to maintain andstrengthen healthy financial structure that allows active
investment
ESG management support
private placement bonds

Issuance of rights to subscribe
for new shares (April 2023)(January 2023)

Raised amount as of May 31:¥589 million (execution rate 18.1%)

Raised amount: ¥10 billion

FY23/3 Financial Results Presentation Material

23

Highlight
Financialresultssummary for
FY2023/3

Net sales, operating profit, ordinary profit, and profit reached record highs• Net sales reached a record high at ¥186 billion, up 17.4% YoY.
Grew both in Japan and overseas due to encouraging production on the clientside and weakening yen effects.
• On the profit side, gross profit increased due to increased sales, leading to
the highest ever operating profit at ¥6.7 billion, up 54.4% YoY.

Aim at net sales of ¥213 billion, a record highEarnings
forecasts for
FY2024/3

Progress in themedium-term
management
plan• Net sales are expected to grow in both the Electronic Devices Business andthe Technology Solutions Business.
• On the profit side, operating profit is expected to be ¥6.3 billion, incorporating
growth investment, decline due to foreign exchange fluctuations in theprevious fiscal year and spot projects, which is a special factor, etc.

The management targets for the final fiscal year were achieved one
year earlier than scheduled• The management targets for the final fiscal year (FY2024/3) were achieved in
FY2023/3, and new management targets were announced.
(New management targets) Net sales ¥213 billion, operating profit ¥6.3 billion,
ROE 8% or higher

FY23/3 Financial Results Presentation Material24

創 造andと 挑Ambition
戦
Creativity
先進エレクトロニクスで未来を創造する
A solution design company
ソリューションデザインカンパニー
that is creating
the future through advanced electronics

We sincerely ask for your continued
support and encouragement
Earnings forecasts in this material are decided based on the information currently available.
Forecasts include various uncertain factors, and actual business results may differ significantly from these forecasted figures.