Kaga Electronics Co., Ltd. · TSE:8154

Kaga Electronics — FY2021/3 Earnings Presentation

48 slides from Kaga Electronics's earnings presentation, May 27, 2021

1. Slide 1: KAGA ELECTRONICS Financial Results Briefing Material for FY ended March 2021

   For Institutional Investors/Analystss KAGA ELECTRONICS Financial Results Briefing Material for the Fiscal Year ended March 2021 加賀電子株式会社 KAGA ELECTRONICS CO., LTD. CO., LTD. TSE 1st section 8154 May 27, 2021

2. Slide 2: INDEX

   INDEX  FY2021/3 Financial Results P-3～ Summary/Financial Highlights Financial Highlights by Business Segment/ Balance Sheet/Cash Flows/Forecasts  Management Topics P-29～ Overview of FY2021/3/ Targets of the Medium-Term Management Plan/ Progress of PMI at KAGA FEI・EXCEL/ Response to the Spread of N

3. Slide 3: Consolidated Financial Results for the Fiscal Year ended March 2021

   Consolidated Financial Results for the Fiscal Year ended March 2021 Managing Director Eiji Kawamura

4. Slide 4: Summary of Fiscal Year Ended March 2021

   Summary of Fiscal Year Ended March 2021  Net sales fell short of the previous year’s levels due to the lingering effect of the termination of sales agency contracts with major suppliers. When excluding this special factor, however, the Group overcame the effects of COVID-19 and sales trended firm o

5. Slide 5: Financial Highlights for FY2021/3

   Financial Highlights for FY2021/3 ＊announced on February 4, 2021 （million yen） FY2020/3 FY2021/3 FY2021/3 Results Previous Forecasts Results YoY vs Forecast Net sales 443,615 415,000 422,365 -4.8% 1.8% Gross profit 47,016 10.6% - 47,936 11.3% 2.0% ー SG&A 37,001 8.3% - 36,469 8.6% -1.4% ー Operating i

6. Slide 6: Breakdown of extraordinary gains/losses for FY2021/3

   Breakdown of extraordinary gains/losses for FY2021/3 （million yen） 7,963 159 2,230 Gain on sales 1,893 of investment securities, etc Bad debts 562 losses・ 205 14,472 Provision of Impairm Extraordinary Loss on sales Other 11,241 allowance ent loss of investment income/loss(net) 3,230 for doubtful sec

7. Slide 7: Financial Results by Business Segment for FY2021/3

   Financial Results by Business Segment for FY2021/3 （million yen） FY2020/3 FY2021/3 Results Results YoY Electronic Net sales 377,587 353,454 -6.4% Component Segment income 7,503 2.0% 8,151 2.3% 8.6% Information Net sales 43,466 48,389 11.3% Equipment Segment income 1,707 3.9% 2,482 5.1% 45.3% Net sal

8. Slide 8: Changes from Previous forecast

   Changes from Previous forecast （announced on February 4, 2021) （million yen） Net sales Operating income < by Business Segment > 422,365 -1,611 11,467 +7,455 +2,589 +7,365 -1,068 +1,942 +307 +37 +274 +2,467 9,000 415,000 FY2021/3 Electronic Information Software Others FY2021/3 FY2021/3 Electronic Inf

9. Slide 9: Financial Highlights: Electronic Component

   Financial Highlights: Electronic Component 2020年3月 （Million Yen) Net sales/Segment income YoY / Net sales / Segment income  Net sales -24,133million Yen 6.4％Down  Segment Income +647million Yen 8.6％Up 377,587 353,454 ・ The components sales business was solid due to its response to the recovery in

10. Slide 10: Financial Highlights: Information Equipment

    Financial Highlights: Information Equipment （Million Yen) Net sales/Segment income YoY / Net sales / Segment income  Net sales +4,922million Yen 11.3％Up 55 000 80 00 50 000 48,389 70 00  Segment Income +774million Yen 45.3％Up 45 000 43,466 ・ The increase of telework and online learning led to grow

11. Slide 11: Effect of M&A

    Effect of M&A （million yen） Net Sales Gross profit / Gross profit margin Despite the impact of COVID-19, sales increased for Kaga Although income fell for Kaga FEI, income was sharply Electronics; sales fell sharply for Kaga FEI due to the loss of up for Kaga Electronics, and the profit margin impro

12. Slide 12: FY2021/3 results by company

    FY2021/3 results by company （million yen） FY2020/3 FY2021/3 YoY Results Results Net sales 243,031 243,897 +0.4% Kaga Electronics Gross Profit 33,298 13.7% 35,273 14.5% +5.9% operating income 7,927 3.3% 11,083 4.5% +39.8% Net sales 200,584 131,932 -34.2% Kaga FEI Gross Profit 13,708 6.8% 10,307 7.8%

13. Slide 13: Financial Highlights (3 months)

    Reference Financial Highlights (3 months) （million yen） FY2020/3 FY2021/3 FY2021/3 YoY QoQ 4Q Results 3Q Results 4Q Results Net sales 104,813 105,406 128,099 22.2% 21.5% Gross profit 11,770 11.2% 12,005 11.4% 14,289 11.2% 21.4% 19.0% SG&A 9,488 9.1% 8,923 8.5% 10,339 8.1% 9.0% 15.9% Opearating incom

14. Slide 14: Financial Results by Business Segment (3 months)

    Reference financial Results by Business Segment (3 months) （million yen） FY2020/3 FY2021/3 FY2021/3 YoY QoQ 4Q Results 3Q Results 4Q Results Electronic Net sales 84,060 89,816 106,750 27.0% 18.9% Components Segment income 1,084 1.3% 2,335 2.6% 2,732 2.6% 151.9% 17.0% Information Net sales 13,677 10,

15. Slide 15: Effect of M&As (3 months)

    Reference Effect of M&As (3months) （million yen） Net Sales Gross profit / Gross profit margin Sales increased significantly for Kaga Electronics, however the loss of Income rose substantially for Kaga Electronics, and began to increase major commercial rights continued to impact Kaga FEI. for Kaga F

16. Slide 16: FY2021/3 results by company (3 months)

    Reference FY2021/3 results by company（３months） （million yen） FY2020/3 FY2021/3 FY2021/3 YoY QoQ 4QResults 3QResults 4QResults Net sales 62,912 60,938 72,423 +15.1% +18.8% Kaga Electronics Gross Profit 8,736 13.9% 8,931 14.7% 10,488 14.5% +20.1% +17.4% operating income 1,942 3.1% 3,158 5.2% 3,304 4.6

17. Slide 17: Financial Highlights: Electronic Component (3 months)

    Reference Financial Highlights: Electronic Component (3 months） （Million Yen) Net sales/Segment income YoY / Net Sales  Net sales +22,689million Yen 27.0％Up / Segment Income 12 0000 80 00  Segment ＋1,648million Yen 151.9％Up 106,750 Income 70 00 10 0000 89,816 QoQ 84,060 60 00 80 000  Net sales +1

18. Slide 18: Financial Highlights: Information Equipment (3 months)

    Reference Financial Highlights: Information Equipment（3 months） （Million Yen) Net sales/Segment income YoY / Net Sales  Net sales ＋774million Yen 5.7％Up / Segment Income  Segment - 124million Yen 14.6％Down 40 00 16 000 Income 14,451 35 00 14 000 13,677 30 00 QoQ  Net sales ＋3,705million Yen 34.5％

19. Slide 19: Balance Sheet Main Items

    Balance Sheet Main Items （million yen） Total assets Total liabilities and net assets 237,004 237,004 ＋29,366 +29,366 213,761 213,761 207,638 207,638 141,942 +20,553 Total liabilities 200,179 129,501 121,388 +25,847 Current assets 182,396 174,331 95,062 Total net assets 84,259 86,250 +8,812 36,825 No

20. Slide 20: Balance Sheet Main Items

    Balance Sheet Main Items （million yen,day） Inventories Accounts receivable/Accounts payable 49.9 160, 000 93.7 90. 0 40. 0 77.0 A/R turnover 50, 000 32.8 75.2 26.3 140, 000 79.8 30. 0 Inventory turnover 70. 0 40,026 A/P turnover 64.6 108,394 37,948 120, 000 63.3 +17,023 40, 000 +6,040 20. 0 50. 0 10

21. Slide 21: Cash and Deposits/Interest Bearing Debt/Cash Flows

    Cash and Deposits/Interest Bearing Debt/Cash Flows （million yen） Cash and deposits Cash flows （times） 0.43 0.37 0.42 0. 50 70, 000 D/E ratio -0.03 -0.08 -0.19 0. 00 60, 000 Net D/E ratio - 0.50 45,636 Cash flows from +2,251 22,406 50, 000 operating activities 43,384 - 1.00 Cash and deposits 40, 000

22. Slide 22: Major Business Indicators

    Major Business Indicators （million yen） Equity ratio ROE 350, 000 0. 400 13.5% 10.9% 38.4% 300, 000 35.8% 37.7% 7.6% 0. 350 237,004 250, 000 +29,366 213,761 207,638 2.7 0. 300 2.7 1.3 Net profit margin 200, 000 Total assets 150, 000 0. 250 2.7 Financial leverage 2.6 90,967 2.8 100, 000 +12,682 76,60

23. Slide 23: Forecasts for FY2022/3

    Forecasts for FY2022/3 （million yen） FY2021/3 FY2022/3 *Management YoY Results Forecasts Targets FY2022/3 Net sales 422,365 470,000 11.3% 500,000 Operating income 11,467 2.7% 13,000 2.8% 13.4% 13,000 Ordinary income 11,241 2.7% 12,000 2.6% 6.7% ー Profit attributable to owners of parent 11,399 2.7% 8

24. Slide 24: Forecasts for FY2022/3 by Segment

    Forecasts for FY2022/3 by Segment （million yen） FY2021/3 FY2022/3 Results Forecasts YoY Electronic Net sales 353,454 404,000 14.3% components Segment income 8,151 2.3% 9,900 2.5% 21.5% Information Net sales 48,389 45,000 -7.0% equipment Segment income 2,482 5.1% 2,300 5.1% -7.3% Net sales 2,932 3,00

25. Slide 25: Segment disclosure associated with the Medium-Term Management Plan

    Segment disclosure associated with the Medium-Term Management Reference Plan Continuous disclosure based on current segmentation according to legal financial accounting, along with voluntary disclosure based on segmentation in line with the new Medium-Term Management Plan Current segments Segments i

26. Slide 26: Business segments of Parent company and Group companies

    Business segments of Parent company and Reference Group companies Electronic EMS CSI Others Components KAGA ELECTRONICS CO., LTD. Electronics Business Division ● ● (●) ● EMS Business Division ● Communication Network Sales Division ● ● ● (●) Specific Industry Business Division ● ● (●) ● Sales Promoti

27. Slide 27: Financial Highlights by Business Segment of the Medium-Term Management Plan

    Financial Highlights by Business Segment of Reference the Medium-Term Management Plan ＊announced on February 4, 2021 （million yen） FY2020/3 FY2021/3 FY2021/3 YoY vs Forecasts Results Previous Forecasts(*) Results Electronic Net sales 292,905 267,000 262,318 -10.4% -1.8% Componens Segment income 3,55

28. Slide 28: Financial Highlights by Business Segment of the Medium-Term Management Plan (3 months)

    Financial Highlights by Business Segment of Reference the Medium-Term Management Plan (3months) （million yen） FY2020/3 FY2021/3 FY2021/3 YoY vs Forecasts 4QResults 3QResults 4QResults Electronic Net sales 64,221 64,625 80,405 +25.2% +24.4% Componens Segment income 614 1.0% 805 1.2% 1,304 1.6% +112.2

29. Slide 29: Management Topics

    Management Topics President & Representative Director Ryoichi Kado

30. Slide 30: Today's Key Message

    Today’s Key Message Operating income at highest level for second fiscal year in a row. Overview of   Operating income exceeding 10 billion yen was steadily generated due to progress FY2021/3 with our profit-generating capability. Progress with  Progress was generally in line with the plan. Althou

31. Slide 31: Progress in Profit-Generating Capability

    Overview of FY2021/3: Progress in Profit-Generating Capability （million yen） Kaga Electronics consolidated Net Sales OP Margin GP Margin SG&A ratio ・ Operating income reached a record high for a second straight year, following FY2020/3. ・ The gross profit margin, which had been in a decline since th

32. Slide 32: Targets of the Medium-Term Management Plan: Changes from the Time of Planning

    Targets of the Medium-Term Management Plan: Changes from the Time of Planning （million yen） Net sales Segment income 500,000 13,000 Makeup when plan Kaga Electronics Kaga FEI Kaga Electronics Kaga FEI was established ：260,000 ：240,000 ：10,000 3,000 （2018/Autumn) Kaga 255,000 11,250 Electronics loss

33. Slide 33: Progress of PMI at KAGA FEI

    Progress of PMI at KAGA FEI（formerly Fujitsu Electronics）  Obtained orders for development, experimental production and mass production from five companies, including automotive equipment manufacturers and electronics manufacturers EMS 124 companies/new visits ➡ 74 companies/currently in sales talk

34. Slide 34: Progress of PMI at EXCEL

    Progress of PMI at EXCEL  Expanded sales of photocatalytic sanitizer/deodorizer* manufactured by Kaltech Co., Ltd. New business  Expanded sales of EV buses manufactured by China’s Alfabus Co., Ltd. <Focus point> Initiatives Utilization and full-scale deployment of networks owned by Kaga Electronic

35. Slide 35: Response to the Spread of Novel Coronavirus Infection

    Response to the Spread of Novel Coronavirus Infection  We continued operating with an emphasis on safety measures, such as telework and staggered commuting times, in line with directions from the national and local governments. We curbed the flow of people with a target of 20% of employees coming i

36. Slide 36: Response to the Spread of Novel Coronavirus Infection

    Response to the Spread of Novel Coronavirus Infection Sales bases in Japan Do not bring the virus to Thorough antiviral and work or spread it antibacterial measures were taken Thermometers Partitions within offices Antiviral coating was Photocatalytic sterilizing were set up applied deodorizers were

37. Slide 37: Strengthening the Governance System

    Strengthening the Governance System  We have decided to increase the number of independent outside directors by one, so that they account for one-third or more (June 29, 2021).  We are setting up a Nomination and Compensation Committee as a voluntary advisory body (June 29, 2021).  The SDGs Commi

38. Slide 38: SDGs Committee

    SDGs Committee  We established the SDGs Committee with the aim of deepening our response to CSR and ESGs, which we have been working on, and pursuing sustainability Basic stance management across the Group. on SDGs  We will contribute to the creation of a sustainable society in line with our corpo

39. Slide 39: Reference

    Reference

40. Slide 40: Financial Highlights by Business Segment

    Financial Highlights by Business Segment （million yen） Net Sales Segment Income 443,615 422,365 19,781 Total Total 2,778 17,589 YoY ： -21,249 YoY ： +1,452 QoQ -4.8% 11,467 QoQ ： +14.5% 43,466 2,932 48,389 10,014 474 Others Others YoY ： -2,192 263 YoY ： +22 QoQ : -11.1％ 452 QoQ ： +4.9% 236 2,482 Soft

41. Slide 41: Financial Highlights by Business Segment <Net Sales>

    Financial Highlights by Business Segment <Net Sales> （million yen） Net Sales Total 128,099 121,066 YoY ： ＋23,285 5,969 QoQ ： ＋22,692 109,564 5,097 927 895 108,170 104,729 105,406 Others 14,451 4,412 9,842 4,185 104,813 YoY ： -115 437 4,600 4,114 455 6,085 QoQ ： ＋1,855 10,126 9,820 783 730 990 84,130

42. Slide 42: Financial Highlights by Business Segment <Segment Income>

    Financial Highlights by Business Segment < Segment Income > （million yen） Segment Income 3,950 Total YoY ： ＋1,667 3,389 325 QoQ ： +867 3,082 156 186 Others 2,778 112 108 2,492 728 YoY ： ＋237 20 QoQ ： +212 429 2,282 137 105 592 131 1,850 87 Software 236 577 YoY ： -70 226 1,656 72 QoQ ： ＋136 188 853 5

43. Slide 43: Net Sales by Region

    Net Sales by Region （million yen） Net sales YoY  Japan -30,345million yen 11.2％Down 443,615 422,365  North America -4,195million yen 15.6％Down  Europe -6,396million yen 32.0％Down  Asia ＋19,688million yen 15.6％UP 270,585 [61.0%] 240,240 [56.9%] Japan North America 26,894 [6.1%] 22,698 [5.4%] 13,6

44. Slide 44: Net Sales by Region (3 months)

    Net Sales by Region （3 months） （million yen） Net sales YoY  Japan +2,532million Yen 3.6％UP 128,099  North America - 1,800million Yen 25.4％Down  Europe - 0million Yen 0.0％Down 104,813 105,406  Asia +22,554million Yen 91.5％UP 72,142 [56.3%] Japan 56,619 [53.7%] QoQ 69,610 [66.4%] North America  J

45. Slide 45: Exchange Rate/FOREX Sensitivity

    Exchange Rate/FOREX Sensitivity （Reference） Effect of 1% change Forex FY2020/3 FY2021/3 （Million Yen） Assumption Results Results Net sales Ordinary for （Yen） （Yen） income 2022/3(yen) USD 108.74 106.06 1,558 35 110.50 THB 3.52 3.42 223 11 3.50 RMB 15.78 15.48 165 9 15.50 HKD 13.91 13.68 150 3 14.00 4

46. Slide 46: memo

    <memo> KAGA ELECTRONICS 45

47. Slide 47: Everything we do is for our customers

    “Everything we do is for our customers 20 Kandamatsunagacho, Chiyoda-ku, Tokyo 101-8629 Contact: Investor Relations & Public Relations Office TEL:+81-3-5657-0106 FAX:+81-3-3254-7133 E-mail： webmaster@taxan.co.jp https://www.taxan.co.jp

48. Slide 48: Forward-looking statements

    ■ Forward-looking statements in these materials are based on information available to management at the time this report was prepared and assumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number of reasons. ■ Display method in th

Kaga Electronics — FY2021/3 Earnings Presentation on 6ix