Kaga Electronics Co., Ltd. · TSE:8154

Kaga Electronics — H1 FY2020/3 Earnings Presentation

56 slides from Kaga Electronics's earnings presentation, Nov 28, 2019

  1. Slide 1: Financial Results Briefing Material for First Half FY Ending March 2020

    For Institutional Investors/Analystss Kaga Electronics Co.,Ltd. Financial Results Briefing Material for the First Half of the Fiscal Year Ending March 31, 2020 November 28, 2019 KAGA ELECTRONICS CO., LTD. TSE 1st section 8154

  2. Slide 2: Index

    Index  Consolidated Financial Results for the 1H of the Fiscal Year ending March 2020 Summary P- 3 Financial Highlights / Financial Highlights by Business Segment P- 4〜15 Balance Sheet Main Items/Cash Flows P-16〜19 Forecast for the Fiscal Year ending march 2020 P-20〜21  <Reference> Segment disclos

  3. Slide 3: Consolidated Financial Results for the First Half of FY ending March 2020

    For Institutional Investors/Analystssts Consolidated Financial Results for the First Half of the Fiscal Year ending March 2020 Six months: April 1, 2019 – September 30, 2019 KAGA ELECTRONICS CO., LTD. Managing Director Eiji Kawamura

  4. Slide 4: Summary of Financial Results for the First half Ended September 30, 2019

    Summary of Financial Results for the First half Ended September 30, 2019 ● Close to twofold increase in net sales with contribution from the conversion of Fujitsu Electronics to a subsidiary. ● Income increases at all income levels, from operating income to profit; FY202020/3 2Q operating income and

  5. Slide 5: Financial Highlights (6 months)

    Financial Highlights（ 6 months） （ Million yen ） Progress 2Q Results 2Q Results YoY Forecasts Rate Net sales 115,383 230,630 99.9% 430,000 53.6% Gross profit 16,023 23,771 48.4% 46,500 51.1% Gross profit margin 13.9% 10.3% -3.6pt SG&A 12,251 18,531 51.3% 39,500 46.9% Operating income 3,772 5,239 38.9

  6. Slide 6: Financial Highlights by Business Segment (6 months)

    Financial Highlights by Business Segment（ 6 months） （Million yen ) Net Sales Segment income 230,630 Total Total YoY︓＋115,247 YoY︓ +1,467 9,510 ＋99.9% ＋38.9% 1,332 19,968 Others Others YoY ︓ ＋131 YoY ︓ +42 ＋1.4% +19.6% Sofware Sofware YoY ︓ -72 YoY ︓ -96 115,383 -5.1% -67.2% 9,379 5,239 Information e

  7. Slide 7: Financial Highlights: Electronic Component Segment (6 months)

    Financial Highlights: Electronic Component Segment （6 months） （ Million yen ） Net sales/Segment income YoY  Net sales ＋116,363million Yen 139.4％UP 199,818  Segment +1,764million Yen 71.3％UP Income Steady performance of the EMS business led by medical equipment and automotive devices The components

  8. Slide 8: Financial Highlights: Information Equipment segment (6 months)

    Financial Highlights: Information Equipment segment （6 months） （ Million yen ） Net sales/Segment income YoY 300 00 500 0  Net sales -1,174million Yen 5.6％Down  Segment -246 million Yen 28.5％Down 280 00 450 0 Income 260 00 400 0 PCs and PC peripherals for individuals, schools, and educational insti

  9. Slide 9: Effect of Fujitsu Electronics conversion to subsidiary (FY2020/3 2Q Results)

    Effect of Fujitsu Electronics conversion to subsidiary (FY2020/3 2Q Results) ※In million yen, figures in ( ) are simple sums. Actual figures of Fujitsu Electronics for the previous period are for reference only. Net Sales Gross profit / Gross profit margin Fujitsu Electronics contributes to consolid

  10. Slide 10: Net Sales by Region (6 months)

    Net Sales by Region （6 months） （Million Yen) Net sales YoY  Japan +64,925million Yen 92.4％UP 230,630  North America +9,833million Yen 246.6％UP  Europe +10,092million Yen 499.5％UP  Asia +30,395million Yen 77.8％UP 135,214 [58.6%] Japan 115,383[100.0%] 13,821 [6.0%] North America 70,288 [60.9%] 12,

  11. Slide 11: Financial Highlights (3 months)

    Financial Highlights （3 months） （million Yen） 2019/3 2020/3 2020/3 2Q Results 1Q Results 2Q Results YoY QoQ Net sales 59,889 109,564 121,066 102.1% 10.5% Gross profit 8,381 11,062 12,708 51.6% 14.9% Gross profit margin 14.0% 10.1% 10.5% -3.5pt 0.4pt SG&A 6,098 9,212 9,319 52.8% 1.2% Operating income

  12. Slide 12: Financial Highlights by Business Segment① (Net Sales)

    Financial Highlights by Business Segment①（Net Sales） （Million Yen) Net Sales 121,066 Total 118,997 YoY ︓ +61,176 (102.1％) 5,097 QoQ ︓ ＋11,501 ( 10.5％) 5,388 109,564 895 933 4,412 9,842 Others 11,970 437 YoY ︓ -178 ( -3.4％) 10,126 QoQ ︓ 685 ( 15.5％) Software YoY ︓ -44 ( -4.7％) QoQ ︓ + 457 ( 104.5％) 5

  13. Slide 13: Financial Highlights by Business Segment② (Segment Income)

    Financial Highlights by Business Segment②（Segment Income） （Million Yen) Segment Income Total 3,389 YoY ︓ +1,106 ( 48.5％) QoQ ︓ +1,538 ( 83.1％) 186 108 Others YoY ︓ + 51 ( 37.5％) 429 QoQ ︓ + 114 (158.2％) 2,282 Software 1,976 YoY ︓ -53 ( -32.9％) 135 1,850 162 1,821 QoQ ︓-170 ( - %) 198 72 1,489 547 75

  14. Slide 14: Financial Highlights: Electronic Component Segment (3 months)

    Financial Highlights: Electronic Component Segment （ 3 months） （Million Yen) Net sales/Segment income YoY 120 000 / Net Sales 800 0  Net sales 62,282million Yen 145.0％UP / Segment income 105,230  Segment 1,214million Yen 86.6％UP 700 0 Income 100 000 94,587 QoQ 600 0 800 00 500 0  Net sales 10,642

  15. Slide 15: Financial Highlights: Information Equipment Segment (3 months)

    Financial Highlights: Information Equipment Segment（3 months） （Million Yen) Net sales/Segment income YoY / Net sales  Net sales -883million Yen 8.2％Down Segment income  Segment -117million Yen 21.5％Down 300 0 / 120 00 Income 10,725 250 0 10,126 100 00 9,842 QoQ 200 0  Net sales -283million Yen 2.

  16. Slide 16: Net Sales by Region (3 months)

    Net Sales by Region （3 months） （Million Yen) Net sales YoY  Japan ＋36,511million Yen 99.1％UP 121,066  North America ＋4,545million Yen 220.7％UP 109,564  Europe ＋5,199million Yen 565.3％UP  Asia ＋ 14,920million Yen 74.4％UP 73,370 [60.6%] Japan 61,843 [56.4%] QoQ 59,889  Japan ＋11,527million Yen 18

  17. Slide 17: Balance Sheet: Main Items

    Balance Sheet: Main Items （Million Yen) Total assets Total liabilities and net assets 214,475 214,475 213,761 213,761 Current assets Total liabilities 129,501 129,008 128,755 128,755 182,396 182,133 58,123 104,069 84,259 85,466 Total net assets 70,631 Non-current assets 24,685 31,364 32,341 FY2018/3

  18. Slide 18: Balance Sheet: Main Items

    Balance Sheet: Main Items （Million Yen) Inventories Accounts receivable/Accounts payable 50, 000 40.7 （ Day） （Day） 40. 0 77.1 77.0 77.4 80. 0 45, 000 34.9 Inventory turnover 120 ,000 A/R turnover 30.8 66.1 70. 0 40, 000 63.3 A/P turnover 30. 0 100 ,000 65.3 60. 0 35, 000 50. 0 Notes and A/R 20. 0 30

  19. Slide 19: Cash and Deposits/Interest Bearing Debt/Cash Flows

    Cash and Deposits/Interest Bearing Debt/Cash Flows （Million Yen) Cash and deposits Cash flows 0.43 0.45 （times） 0.5 0 0.13 D/E ratio -0.03 50, 000 -0.11 0.0 0 -0.31 Net D/E ratio 40, 000 Cash flows from operating activities -0.50 Cash and deposits 11,684 12,242 30, 000 -1.00 10,077 -1.50 42,931 1,89

  20. Slide 20: Major Business Indicators

    Major Business Indicators （Million Yen) Equity ratio ROE 54.8 10.9% 9.5% （Forecast） 260 ,000 6.4% 35.8 36.2 40. 0 210 ,000 20. 0 Total assets 2.7 Net profit margin 160 ,000 213,761 2.8 0.0 (20.0) 214,475 110 ,000 Financial leverage 1.8 2.8 (40.0) 128,755 60, 000 Shareholders’ equity 70,556 76,604 77

  21. Slide 21: Forecast for the Fiscal Year ending March 2020

    Forecast for the Fiscal Year ending March 2020 (announced on May 14, 2019) （million yen） FY2019/3 FY2020/3 Results Forecasts YoY Net sales 292,779 430,000 46.9% Gross profit 35,546 46,500 30.8% Gross profit margin 12.1% 10.8% SG&A 27,976 39,500 41.2% Operating income 7,570 7,000 -7.5% Ordinary incom

  22. Slide 22: Effect of Fujitsu Electronics conversion to subsidiary (FY2020/3 Forecast)

    Effect of Fujitsu Electronics conversion to subsidiary (FY2020/3 Forecust) Net Sales Gross profit / Gross profit margin Prudent projection for net sales in view of uncertainty in the Gross profit margin to be flat y-o-y for Kaga Electronics, up future business environment 1 pt for Fujitsu Electronic

  23. Slide 23: (Ref) Segment disclosure associated with the start of the Medium-Term Management Plan

    (Ref) Segment disclosure associated with the start of the Medium-Term Management 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 S

  24. Slide 24: (Ref) Business segments of Parent company and Group companies

    (Ref) Business segments of Parent company and 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 ● ● (●) ● Strategic Custome

  25. Slide 25: (Ref) Financial highlights by Segment of Medium-Term Plan, 2Q (6 months)

    (Ref) Financial highlights by Business Segment of Medium-Term Management Plan for the FY2020/3 2Q（6 months） （Million Yen) 2019/3 2020/3 2Q Results 2Q Results YoY Electronic Net Sales 44,216 156,803 254.6% Component Segment income 899 2,127 136.6% Net Sales 43,031 46,945 9.1% EMS Segment income 1,624

  26. Slide 26: (Ref) Financial highlights by Segment of Medium-Term Plan, 2Q (3 months)

    (Ref) Financial highlights by Business Segment of Medium-Term Management Plan for the FY2020/3 2Q（3 months） （Million Yen) 2019/3 2020/3 2Q Results 2Q Results YoY Electronic Net Sales 23,208 84,698 265.0% Component Segment income 635 1,651 160.0% Net Sales 21,927 22,425 2.3% EMS Segment income 786 83

  27. Slide 27: (Ref) Forecasts by Business Segment of Medium-Term Management Plan

    (Ref) Forecasts by Business Segment of Medium-Term Management Plan for the FY2020/3 （million yen） FY2019/3 FY2020/3 Results Forecast YoY Electronic Net Sales 145,042 282,000 94.4% Component Segment income 2,278 2,200 -3.4% Net Sales 89,481 95,000 6.2% EMS Segment income 2,667 2,800 5.0% Net Sales 44

  28. Slide 28: (Ref) Exchange Rate/FOREX Sensitivity

    (Ref) Exchange Rate/FOREX Sensitivity （Half a Year basis） FY2020/3 Effect of 1% change(million Yen) 2019/3 2020/3 Forex 2QResults 2QResults Ordinary Assumption Net sales （Yen） （Yen） income (yen) USD 110.26 108.63 927 20 110.00 THB 3.40 3.49 124 7 3.40 RMB 17.09 16.20 103 4 17.00 HKD 14.05 13.86 113

  29. Slide 29: About Kaga Electronics' EMS Business

    About Kaga Electronics’ EMS Business Overview and Growth Strategy of EMS Business KAGA ELECTRONICS CO., LTD. Director Motonori Toshinari 28

  30. Slide 30: The Strengths of Kaga Electronics' EMS (1): Convenience Store EMS

    The Strengths of Kaga Electronics’ EMS (1): Convenience Store EMS Kaga Electronics globally deploys a “Convenience Store EMS” that is convenience and valuable for its customers. Japanese EMS vs Taiwanese / Asian EMS Convenience Store EMS vs GMS EMS Focus is on Substrate Installation ＜KAGA ELECTRONIC

  31. Slide 31: The Group's Strength-(2): One Stop

    The Group’s Strength-(2)︓One Stop Not just contract manufacturing but offer one-stop service from sales to after-sales support Planning/Design/ Components EMS/Contract Support/ Development Procurement/Kitting manufacturing Sales/Distribution After-sales service KAGA ELECTRONICS KAGA TECHNO SERVICE K

  32. Slide 32: The Group's Strength-(3): Global Network

    The Group’s Strength-(3)︓Global Network Global EMS production system with 19 bases in 10 countries to respond swiftly and flexibly to customer needs. ∎ Expand sales to local Chinese companies ∎ Installed mounting ∎ Expand sales to European and the U.S. companies equipment in Czech and ∎ Expand sales

  33. Slide 33: Introduction to Main Production Bases: China

    Introduction to Main Production Bases: China Kaga Electronics (Shenzhen) Kaga Technology (Suzhou) Electronics Established １９９９ Established ２００９ Number of Number of ９５０ ３６０ Employees Employees Automotive-related units, industrial Automotive-related units, medical equipment, OA equipment, equipment, i

  34. Slide 34: Introduction to Main Production Bases: ASEAN

    Introduction to Main Production Bases: ASEAN KAGA ELECTRONICS (THAILAND) KAGA ELECTRONICS (VIETNAM) Established ２００２ Established ２０１７ Number of Number of ６９０ １２０ Employees Employees Automotive-related units, OA Automotive-related units, air Products equipment, air conditioning Products conditioning

  35. Slide 35: Introduction to Main Production Bases: Europe and the Americas

    Introduction to Main Production Bases: Europe and the Americas KD TEC TAXAN MEXICO Established ２００９ Established ２０１７ Number of Number of １２０ １６０ Employees Employees Automotive-related units, Products Air conditioning equipment. Products business equipment, industrial equipment. ＜ Czechia Factory＞ ＜M

  36. Slide 36: Main Products: Various Substrates

    Main Products: Various Substrates Substrate for Office L Size Substrate for Equipment Communications Equipment Power Supply Substrate LED-related Substrate 35

  37. Slide 37: Main Products: Automotive-related Units

    Main Products: Automotive-related Units Lighting Units for Automotive AC Inverter Units 36

  38. Slide 38: Main Products: Various Units

    Main Products: Various Units FA Equipment Touch Panel Air Conditioner Unit Monitor 37

  39. Slide 39: Main Products: Various Finished Products

    Main Products: Various Finished Products Automotive-related Products Medical Equipment ＜Automotive Navigation System＞ ＜Automated Medication Dispensing Cabinet＞ 38

  40. Slide 40: EMS Business Growth Scenario

    EMS Business Growth Scenario Driven by the growth of in-vehicle, air conditioning, industrial machinery, and medical/healthcare, we shall aim for drastic growth of business size of 1.5x that of FY2018 140 billion yen Points Fujitsu Electronics, M&A 11％ 1.5x Consumer, Communication etc. 10％ Organic F

  41. Slide 41: Key Topics for EMS Business Growth

    Key Topics for EMS Business Growth In parallel with the EMS shift of leading European and American customers of Fujitsu Electronics, strengthening volume, quality, and cost, and comprehensively increasing business competitiveness in comparison with competitors. Increasing of Production Capacity Stre

  42. Slide 42: Major Initiatives

    Major Initiatives Enhancing of Production ・ Capturing increased demand in conjunction with the Capacity return to domestic production ・ Sharing of production know-how and excellent Acquisition of Strengthening of Manufacturing Capabilities production personnel Towada Pioneer ・ Mother plant for subst

  43. Slide 43: Overview of Acquisition of Towada Pioneer

    Overview of Acquisition of Towada Pioneer Towada Pioneer Headquarters Factory Acquisition Format Conversion to group company through acquisition of Towada Pioneer shares from Pioneer on October 1, 2019. Name After Acquisition KAGA EMS TOWADA CO., LTD. Address Towada City, Aomori Prefecture Business

  44. Slide 44: Construction of New Fukushima Factory

    Construction of New Fukushima Factory Fukushima Factory Name KAGA MICRO SOLUTION CO., LTD. Fukushima Factory Address Sukagawa City, Fukushima Prefecture Scheduled Launch October 2019 Business Content Manufacture, repair, reuse, and recycling of communications equipment, PCs, and PC peripherals Numbe

  45. Slide 45: Construction of Thailand 2nd Factory

    Construction of Thailand 2 nd Factory Amata Nakhon 2 nd Factory Name KAGA ELECTRONICS (THAILAND) CO., LTD. Amata Nakhon 2 nd Plant Address Amata Nakhon Industrial Estate, Chon Buri, Thailand Scheduled Launch December 2019 Business Content Installation of substrates for multifunction devices, printer

  46. Slide 46: Own Development of Production Equipment(1)

    Own Development of Production Equipment(1) “HATTEN” Solder Bath Company Establishment Scheme October 2018: Establishment of a joint venture by JT*,a Chinese production equipment manufacturer and group company Kaga Technology (Suzhou) Electronics Co., Ltd. Name of Joint Venture SUZHOU HATTEN INTELLIG

  47. Slide 47: Own Development of Production Equipment(2)

    Own Development of Production Equipment(2) "HATTEN" Substrate Installation Company Establishment Scheme Automation Equipment Line December 2019: Establishment of a joint venture by FAROAD*, a leading Chinese manufacturer of substrate installation equipment, and group company Kaga Technology (Suzhou)

  48. Slide 48: Positioning of Medium Term Management Plan 2021

    Positioning of “Medium Term Management Plan 2021” JPY1 trillion Organic Growth Aim to become a competitive “World class + company” Further M&A Further Challenges expansion of Towards the realization of JPY500 billion the EMS “Japan’s No. 1 corporate group in business the industry” Enhancement Kaga I

  49. Slide 49: Memo

    @ KAGA ELECTRONICS CO.,LTD. 48

  50. Slide 50: Memo

    <memo> @ KAGA ELECTRONICS CO.,LTD. 49

  51. Slide 51: Memo

    @ KAGA ELECTRONICS CO.,LTD. 50

  52. Slide 52: Memo

    @ KAGA €LECTRONICS CO.,LTD. 51

  53. Slide 53: Memo

    @ KAGA ELECTRONICS CO.,LTD. 52

  54. Slide 54: Memo

    <memo> KAGA €LECTRONICS CO.,LTD. 53

  55. Slide 55: 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 © 2017 KAGA ELECTRONICS CO.,LTD All Rights Reserved. 54

  56. Slide 56: Forward-looking statements and display method

    ■ 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 — H1 FY2020/3 Earnings Presentation on 6ix