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 Six Months Ended September 30, 2023
HAGIWARA ELECTRIC HOLDINGS CO., LTD.
(TSE Prime Market & NSE Premier Market: 7467)

December 4, 2023
FY24/3 Financial Results Presentation Material

Highlight
FY2024/3 Q2 recorded increases in both net sales andprofit for three consecutive periods, renewing record highs

・Net sales reached a record high at ¥108 billion, up 25.0% YoY.
Financialresultssummary for
FY2024/3 Q2

Earnings
forecasts for
FY2024/3

Sales increased due to increased demand as a result of therecovery of automobile production volume, use in additional
vehicle models and other factors, as well as due to capturing IT
investment, capital investment, etc. of customers.
・Operating profit increased 71.8%, YoY to ¥4.5 billion and ordinary
profit increased 58.9%, YoY to ¥4.6 billion, both of which achieved
record highs, due to an increase in gross profit that exceeded theincrease in selling, general and administrative expenses.
・Despite the disappearance of recording a gain on bargain
purchase of ¥670 million on M&A as an extraordinary income inthe same period of the previous fiscal year, profit attributable toowners of parent increased 16.5% YoY to ¥3.0 billion, posting a
new record high.

Revised the initial earnings forecasts upward andforecasting record highs for three consecutive periods

・Considering actual results until FY2024/3 Q2 and recent

FY24/3 Financial Results Presentation Material

performance trends, revised the initial forecasts upward andforecasting record highs for the third straight quarter.
1

Financial results summary for FY2024/3 Q2

Earnings forecasts for FY2024/3

Measures to realize management that is conscious of cost ofcapital and the Company’s share price (current situation analysis)

Topics

FY24/3 Financial Results Presentation Material

2Financial results for FY2024/3 Q2■ Net sales, operating profit, ordinary profit and profit saw increases inboth net sales and profit for three consecutive periods, and all reachedrecord highs in Q2.
(Unit: Millions of yen)
FY2023/3 Q2

FY2024/3 Q2AmountRatio

AmountRatio

Net sales

86,412100%

108,013100%+21,601+25.0%

Gross profit

8,087

9.4%

10,4529.7%+2,365+29.2%

Selling, general andadministrative expenses

5,416

6.3%

5,863

5.4%

+447

+8.3%

Operating profit

2,671

3.1%

4,589

4.2%

+1,917+71.8%

Ordinary profit

2,909

3.4%

4,623

4.3%

+1,713+58.9%

Profit attributable toowners of parent

2,606 *1

3.0%

3,036

2.8%

+429

+16.5%

ー

326.01ー+31.64ー*2
Earnings per share (Yen)294.37

YoY*１

As of FY2023/3 Q2, provisional accounting treatment had been applied to the gain on bargain purchase associated with M&A,
however since it was finalized at the end of the previous fiscal year, the figures presented in this material reflect the finalized
value of gain on bargain purchase of ¥670 million.

*2

The number of issued shares increased YoY due to the exercise of share acquisition rights. The average number ofshares during the period was 8,854,055 shares in FY2023/3 Q2 and 9,313,675 shares in FY2024/3 Q2.

FY24/3 Financial Results Presentation Material

3

Positive factors for net sales■ Net sales increased by ¥21.6 billion, or 25.0% YoY.
■ Sales in the Electronic Devices Business were encouraging mainly inJapan due to the recovery of automobile production volume, use of
adopted products in additional vehicle models and other factors, inaddition to sales being encouraging in the Technology Solutions
Business due to capturing IT investment, capital investment, etc. of
customers.
108＋2.1
Net sales＋1.8(Billions of yen)
＋17.5
Increase in
Increase indevice sales(overseas)・ Differenceby areasolutionsales
・ Increased
demand・M&A

86.4
Increase indevice sales(Japan)・Increased
demandFY24/3 Financial Results Presentation Material

4Changing factors for operating profit■ Operating profit increased by ¥1.9 billion, or 71.8% YoY.
■ While gross profit significantly increased mainly due to increased net
sales and weak yen, an increase in selling, general and administrative
expenses was curbed, leading to increased operating profit. Operating
profit margin increased by 1.1 points.
Operating profit(Billions of yen)

＋0.6

▲0.4

4.5

＋1.7
Increase ingross profit
due to otherfactors

2.6
Increase ingross
profit（81.9%）
accompanied
by increased
sales

FY24/3 Financial Results Presentation Material

・Foreign exchange
fluctuations
・Spot projects, etc.

Increase in
selling,
general andadministrative
expenses・ Increase in flow
control costs due
to increased sales

5Electronic Devices Business: Financial results summary■ Sales were encouraging due to factors such as the recovery of
automobile production volume and use of adopted products in additional
vehicle models and weak yen.
■ Segment profit increased by 1.4 points mainly due to curbing selling,
general and administrative expenses.
(Unit: Millions of yen)
FY2023/3 Q2AmountNet sales
Segment profit

FY2024/3 Q2

Ratio

YoY

100%

94,078100%+19,426+26.0%

1,728

2.3%

3,511

3.7%

+1,782+103.1％

Segment profit and segment profit margin

Millions of yen
100,000%

Millions of yen
94,07880,00074,651

4,000

15.0
3,511
12.0

3,000

61,13850,8249.0

43,2922,000

40,000

1,728
1,406

1,000

20,0000

Ratio

74,651

Net sales

60,000

Amount20/3/2Q

21/3/2Q

22/3/2Q

FY24/3 Financial Results Presentation Material

23/3/2Q

24/3/2Q0

2.8

20/3/2Q

916

1,188

3.7
2.3

2.1

1.9

21/3/2Q

22/3/2Q

23/3/2Q

6.0
3.0

24/3/2Q

0.0

6

Electronic Devices Business: Net sales by client (YoY)■ Sales were encouraging, mainly for domestic sales with respect tomajor customers, due to new applications and use in additional vehicle
models, together with the increase in activity of customers’ production
due to the easing of the semiconductor shortage and expansion in thefield of vehicle electrification.
(Unit: Millions of yen)
(Unit: Millions of yen)

94,078FY2023/3 Q2AmountFY2024/3 Q2

Ratio

AmountRatio

YoY

74,65150,731

38,911DENSOCORPORAT
ION

38,91152.1％

50,731

53.9％＋11,819 ＋30.4％

TOKAI RIKA
CO., LTD.

2,507

3.4％

3,032

3.2％

+525 ＋20.9％

Others

11,23815.0％

16,44617.5％+5,208 ＋46.3％

Overseas *1
clients

21,99529.5％

23,86925.4％+1,874

Total

74,651

ー

94,078

ー

3,032
2,507

16,446

11,23821,995+8.5％

23,86923/3/2Q 24/3/2Q＋19,426 ＋26.0％*1 Sales to the overseas offices of major customers, including DENSO CORPORATION, have been
included in Overseas clients.
7

FY24/3 Financial Results Presentation MaterialElectronic Devices Business: Net sales by region (YoY)■ Sales, mainly sales in Japan, increased as automobile production
volume was encouraging. Overseas sales were uneven by region.
(Unit: Millions of yen)
(Unit: Millions of yen)

FY2023/3 Q2

FY2024/3 Q2

23,869Amount

Ratio

Japan

52,65670.5%

70,208

74.6%+17,552＋33.3％

Asia

11,672

15.6%

11,006

11.7%

▲666

▲5.7%

UnitedStates

8,494

11.4%

10,64211.3%+2,148＋25.3％

Europe

1,827

2.4%

2,220

2.4%

+393

+21.5%

Overseas(total)21,99529.5%

23,86925.4%+1,874

＋8.5％

Total

74,651

ー

94,078ー +19,426+26.0%*1

21,995

AmountRatio

YoY

11,006
11,672

10,642
8,494

1,827

2,220

23/3/2Q 24/3/2Q*1 Region names represent the Group’s business locations (excluding intragroup transactions).
Financial results included in FY2024/3 Q2 are figures from January 2023 to June 2023 as the
fiscal year-end for the Group’s bases in Singapore, China and the United States is December.

FY24/3 Financial Results Presentation Material

8Technology Solutions Business: Financial results summary■ Sales increased by capturing demand for IT investment aimed at
automation and efficiency improvement.
■ The segment profit margin declined 0.3 points due to changes in sales
composition by business.
(Unit: Millions of yen)
FY2023/3 Q2AmountNet sales

FY2024/3 Q2

Ratio

Ratio

100%

13,935100%+2,175+18.5%

942

8.0%

1,077

7.7%

+135

+14.3%Net sales

Segment profit and segment profit margin

Millions of yen

Millions of yen

15,00013,935
11,512

11,760

9,519

10,000

%

1,200

1,077
942

1,000

10,466

7,500

10.0

600

5,000

400

2,500

5.5

21/3/2Q

22/3/2Q

FY24/3 Financial Results Presentation Material

23/3/2Q

24/3/2Q

0

8.0

566
8.0

463

200
20/3/2Q

14.0
12.0

800

636

0

YoY

11,760

Segment profit

12,500

Amount

4.9

7.7

5.4

6.0

4.0
2.0

20/3/2Q

21/3/2Q

22/3/2Q

23/3/2Q

24/3/2Q

0.0

9

Technology Solutions Business: Net sales by business (YoY)■ Although there was a temporary move to curb capital investment,
the Technology Solutions Business captured demand for IT investment
aimed at automation and efficiency improvement, etc.
■ HAGIWARA ENGINEERING, which became a subsidiary in September
2022, contributed to increase in sales of FA Solutions.
(Unit: Millions of yen)
(Unit: Millions of yen) 13,935

FY2023/3 Q2

11,760
4,575
3,338

7,043
6,733

*5

1,688

2,316

23/3/2Q

24/3/2Q*1

AmountFY2024/3 Q2

Ratio

AmountRatio

YoY

SystemSolutions

3,338

28.4%

4,575

32.8%

+1,237＋37.1％

Embedd
ed

6,733

57.3%

7,043

50.5%

+310

＋4.6％

FA
Solutions

1,688

14.4%

2,316

16.6%

＋627

＋37.2％

Total

11,760ー

13,935ー+2,175＋18.5％The names of the previous IT, Embedded, and Measurement & FA were changed to the System Solutions, Embedded and the FA Solutions fromFY2024/3. The details of each business are as follows.

System: 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.
FA: Sale of measurement devices, inspection equipment and FA devices, development, manufacturing and sale of various automated and labor-saving manufacturing equipment.

FY24/3 Financial Results Presentation Material

10Technology Solutions Business: Net sales by industry (YoY)■ Aggressively working to capture IT investment and capital investment of
automobile-related companies. Sales increased by capturing demandfor IT investment aimed at automation and efficiency improvement.
(Unit: Millions of yen)

(Unit: Millions of yen)

13,935

FY2023/3 Q2
11,760

Amount4,695

FY2024/3 Q2

Ratio

Amount

Ratio

YoY

3,574

7,118

Automotive

3,574

30.4%

4,695

33.7%

+1,120+31.4%

FA &Industrial
equipment

6,318

53.7%

7,118

51.1%

+800

+12.7%

Others

1,867

15.9%

2,121

15.2%

＋253

＋13.6%

Total

11,760ー

13,935ー+2,175+18.5%

6,318

1,867

2,121

23/3/2Q

24/3/2Q

FY24/3 Financial Results Presentation Material

11

Financial results for FY2024/3 Q2■ Recorded foreign exchange gains of ¥0.12 billion in the non-operating
income item. Despite the disappearance of recording a gain on bargain*1purchase of ¥670 million on M&A as an extraordinary income in thesame period of the previous fiscal year, profit attributable to owners ofparent increased, posting a new record high.
■ Increased initial forecasts by ¥35 to pay an interim dividend per share(Unit: Millions of yen)of ¥95.
FY2023/3 Q2

FY2024/3 Q2AmountRatio

AmountRatio

86,412100%

108,013

100% +21,601+25.0%

Operating profit

2,671

3.1%

4,589

4.2%

+1,917+71.8%

Ordinary profit

2,909

3.4%

4,623

4.3%

+1,713+58.9%

2,606

3.0%

3,036

2.8%

+429

+16.5%

60

ー

95

ー

+35

ー

Net sales

Profit attributableto owners ofparentInterim dividends per
share (Yen)
*1

*1

YoY

As of FY2023/3 2Q, provisional accounting treatment had been applied to the gain on bargain purchase associated with M&A,
however since it was finalized at the end of the previous fiscal year, the figures presented in this material reflect the finalized valueof gain on bargain purchase of ¥670 million.

FY24/3 Financial Results Presentation Material

12Financial results summary for FY2024/3 Q2

Earnings forecasts for FY2024/3
Measures to realize management that is conscious of cost ofcapital and the Company’s share price (current situation analysis)

Topics

FY24/3 Financial Results Presentation Material

13

Earnings forecasts for FY2024/3■ Considering actual results until FY2024/3 Q2 and recent performancetrends, revised the initial forecasts upward and forecasting record
highs for three consecutive periods.
(Unit: Millions of yen)
FY2023/3

FY2024/3

Actual (A)Revisedforecast (C)(Nov 10)

Change(C-B)

186,001

213,000

227,500+14,500＋41,498 ＋22.3％

Operating profit

6,725

6,300

8,350

+2,050＋1,624 ＋24.2%

Ordinary profit

6,417

6,000

8,200

+2,200＋1,782 ＋27.8%

Profit attributableto owners ofparent

4,912

3,900

5,300

+1,400

＋387

＋7.9%

554.71437.02549.93+112.91▲4.78

ーNet sales

YoYchange(C-A)

YoYchangeratio(C-A)/A

Initialforecast (B)(May 15)*1

Earnings per share
(Yen)
*1

The number of issued shares has increased compared to the same period of the previous fiscal year due to the exercise ofshare acquisition rights, and earnings per share is calculated taking into account the increase in the number of issued sharesat the time of each announcement. The exercise of all share acquisition rights was completed on October 6, 2023, bringing theCompany’s total number of issued shares to 10,118,000 shares as of the release of this document.

FY24/3 Financial Results Presentation Material

14Medium-Term Management Plan (from FY2022/3 to FY2024/3)
Progress of KPIs
■ We set new management targets for the final fiscal year. The newtargets are measurably 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,
the final fiscal
year（Nov 10）

186,001 170,000

2２７,５00

FY2023/3

FY２０２１/３
ratio-＋23.9％＋45.5％＋33.0％＋７８．０％

Operatingprofit

3,468

4,356

6,725

5,000

８,3５0

FY２０２１/３
ratio-＋25.6％＋93.9％＋44.1％＋１４０．８％

6.8％

8.0％

12.5％

8.0％

ROE

FY24/3 Financial Results Presentation Material

10.0%
or higher
15

Return to shareholder■ Setting a basic policy of stable payment aiming at a dividend payout
ratio of around 30%.
■ Planning to increase dividends by ¥40 from initial forecasts backed byencouraging business results, resulting in an annual dividend of ¥185.
Interimdividend

Trends in dividends and dividend ratio

Yen
300
250

30.4

27.2

29.7

30.6

32.8

Dividend
payout ratio

Year-end
dividend

％

33.6

34.2
30.6

30.8

(Forecast)

27.9 Inc. anniversary 30
dividend of ¥10200
Inc. anniversary
dividend of ¥5
Inc. anniversary
dividend of ¥5

150
100
50
0

Inc. anniversary
dividend of ¥5

35
25
15/03

90
95

55

55

35

45

35

35

40

50

16/03

17/03

18/03

19/03

FY24/3 Financial Results Presentation Material

55

50
20/03

50

40

21/03

22/03

(Forecast)

10

60

30

20

95
60

(Actual)

0
23/03

24/03
16

Financial results summary for FY2024/3 Q2

Earnings forecasts for FY2024/3

Measures to realize management that is conscious of cost ofcapital and the Company’s share price (current situation analysis)

Topics

FY24/3 Financial Results Presentation Material17

【Current situation analysis】 Measures to realize managementthat is conscious of cost of capital and the Company’s share price■ The P/B ratio and market capitalization are on an upward trend due tothe Company’s efforts to grow its business and increase its corporate
value by implementing management strategies based on its MediumTerm Management Plan.
Recent the P/B ratio and Market Capitalization
時価総額（億円）
Market Capitalization(Billions of yen)

0.95
1.00

0.80

0.66

0.68

The P/B ratio
PBR

Medium-Term Management Plan
Make New Value 2023

0.87
0.59

0.67

0.60

0.71
0.48

0.40

0.20

16.2

17.5

27.4

27.2

19.4

23.2

17.9

0.83

800

700

600

500

29.5

39.2

400

300

200

100

0.00

0

16/03

17/03

18/03

19/03

20/03

21/03

22/03

23/03

23/09

＊ The P/B ratio is calculated based on the closing share price and BPS at the end of the period.
FY24/3 Financial Results Presentation Material18

【Current situation analysis】 Measures to realize managementthat is conscious of cost of capital and the Company’s share price*1■ Although the Company’s recent ROE is higher than its cost of equity,
its P/B ratio is below 1x.
■ In addition to improving profitability, the Company needs to strengthen
its efforts to improve its evaluation in the stock market.
Current situation analysis
ROE
9.3%

✓ The P/B ratio is
below 1x
PBR
0.87
0.59

0.67

0.71
0.48

19/03 20/03 21/03 22/03 23/03

8.4%

8.0%

19/03 20/03 21/03 22/03 23/03✓ Low growth
expectations fromthe stock market
PER
9.64

10.04
7.15

6.21 5.99

19/03 20/03 21/03 22/03 23/03*2

Target ROE

10.0% or higher

Cost of
Shareholders' equity

7.0～8.0%

FY24/3 Financial Results Presentation Material✓ Business portfolio
management withappropriate risk taking,
2.6%
2.4%
2.1%
system development,
1.8% 1.8%
and strengthening of
profitability.
19/03 20/03 21/03 22/03 23/03✓ Reduction in cost ofequity throughimplementation of
Total assets turnover
financial and non2.03
1.97 1.95
financial measures.
1.97
1.81
✓ Fostering growth
expectations andimproving stakeholder
19/03 20/03 21/03 22/03 23/03
engagement throughdialogue with the stock
market and enhanced
Financial leverage
information disclosure.
Net profit margin

12.5%
6.8%

Recognition of Issues

2.01

2.04

2.08

2.16

2.40

*1
19/03 20/03 21/03 22/03 23/03＊1 Calculated by the Company based on
CAPM. Figures are subject to change
due to changes in the environment.
＊2 This is the target figure for the final
year of the Medium-Term
Management Plan (21/4 - 24/3). 19

【The plans】 Measures to realize managementthat is conscious of cost of capital and the Company’s share price■ Specific initiatives based on the current situation analysis will beannounced in conjunction with the next Medium-Term Management Plan.

Current
situation
analysisPlanning
and Disclosure

Execution

FY24/3 Financial Results Presentation Material・ Accurately understand the Company’s cost of capital and returnon capital.
・ The Board of Directors will analyze and evaluate the current
situation with regard to the details and market evaluation.
To be announced together
with the next Medium-Term Management Plan
・ The Board of Directors will consider and formulate policies,
targets, plan period, and specific initiatives for improvement.
・ The details of the plan will be disclosed to investors in aneasy-to-understand manner, along with an evaluation of thecurrent situation.

・ Based on the plan, promote management that is consciousof the cost of capital and the Company’s share price.
・ Proactively engage in dialogue with investors based on
disclosure.
20

Financial results summary for FY2024/3 Q2

Earnings forecasts for FY2024/3

Measures to realize management that is conscious of cost ofcapital and the Company’s share price (current situation analysis)

Topics

FY24/3 Financial Results Presentation Material

21Strengthen new business areas
through collaboration with partners■ HAGIWARA ELECTRONICS has developed an in-vehicle payment
demonstration system for next-generation parking based on location
information, based on technology from a U.S. startup company, with invehicle native software and a smartphone application jointly developedwith a major Japanese Tier 1 company. The system was exhibited at theJapan Mobility Show 2023 and was well received.
Automatic billing mechanism and the world to be realized
Fees are charged by identifying users based on their vehicle location(1) Highly accurate location information isalways stored in the cloud using GPS
information + Sheeva technology(2) Vehicles (users) receiving services
can be identified by referring to thecloud (API)No cash required, no need to show card or QR code.
By using the in-car payment service, payment is completed simply byleaving the facility in your vehicle.
Parking lot / Car sharing

Toll road / Ferry

Drive‐throughOrder pickup

FY24/3 Financial Results Presentation Material

Gas Stations / Charge Stations

Amusement (Camping, etc.)【 Next Generation Parking In-vehicle
Payment Demonstration System 】
A feature of this system is that it can be used as aparking lot for spaces without parking facilities (e.g.,
entry/exit gates, vehicle stopper apparatus, etc.) by
setting attributes for usage conditions (parking
availability and billing methods) on the cloud.
The in-vehicle device is equipped with algorithms to
obtain accurate location information and software thatcan communicate with the cloud, and charges are
made according to the attributes of any parking space.

● The space can be converted into a parking lot
without installing parking facilities.
● Rates can be easily designed to improve utilization
rates and revenues based on the day of the week,time of day, and whether events are being held.

22

Strengthen new business areas
through collaboration with partners■ HAGIWARA TECHNO SOLUTIONS has strengthened its strategic
partnership with Trend Micro Inc. to promote integrated cyber security inthe manufacturing industry, where the IT and OT (operational technology)
domains are increasingly merging. The company aims to expand its
solutions nationwide through partner collaboration and knowledge gained
from its track record as a technology trading company.

IT/OT integrated security
infrastructure for consistentvisibility, defense, and response
・XDR
・SOC (security operations center)
operational support

Head of Security
Conduct IT/OT
security assessment
by dedicated teamfor construction

Diagnosis

Construction of XDR(extended detection andresponse) system using
IT and OT sensors

Construction＊Joint press release with Trend Micro Inc. announced on November 20, 2023
FY24/3 Financial Results Presentation Material

Provide managed
services for
integrated IT/OT
security operations

Operation

23

Establishment of HAGIWARA ELECTRONICS
Hong Kong subsidiary・A new China (Hong Kong) subsidiary was established by our
subsidiary to strengthen the business base and expand business.
Together with the existing China (Shanghai) subsidiary, the newsubsidiary will work to provide a stable supply of products to the
production bases of our major customers and contribute to thestabilization of the global supply chain.
【Summary】
Trade Name

萩原電氣香港有限公司（planned）（Hagiwara Electronics Hong Kong Limited（planned））

Location

Hong Kong Special Administrative Region, People’s
Republic of China

Fiscal year end

December-end

Major shareholder andownership ratio

HAGIWARA ELECTRONICS CO., LTD. 100％

Date of Establishment

December 2023 （planned）

Scheduled start ofoperations

February 2024 （planned）

Business Operations

Sale of electronic equipment and manufacture and sale of
FA equipment

FY24/3 Financial Results Presentation Material

24

Exercise of 3rd series of share acquisition rights completed
・The Company conducted this financing in order to establish astable global supply system for the Group, given the urgent need tostabilize supply chains in the automotive industry, a major
customer of the Company.
・The exercise of all share acquisition rights was completed on
October 6, 2023, and the amount of funds raised was ¥3,464 million.
【Summary】
Brand Name
Publication date
Number of share acquisitionrights units (no. of shares)
Allottees andallotment method
Exercise completion date
Total number ofissued shares
FY24/3 Financial Results Presentation Material

HAGIWARA ELECTRIC HOLDINGS CO., LTD.
Third series of share acquisition rights (with exercise
price revision clause)
April 24, 2023
11,000 units (1,100,000 shares)

Third-party allotment to SMBC Nikko Securities
All completed on October 6, 2023
10,118,000 shares (As of the end of October 6th 2023)
25

Creativity and Ambition
A solution design company
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.