Slide 1: FY2024 Investor Briefing
1/39 FY2024 Investor Brief ing —Challenge, Creativity, Solutions SMK Corporation (6798) May 23, 2025
Slide 2: Agenda
Agenda 2/39 1. Outline of FY2024 Financial Results pp. 03-13 and FY2025 Forecast 2. Progress of Medium-Term Business Plan “SMK Next100” pp. 14-29 and Structural Reform Program 3. Growth strategies for CS, SCI, and Innovation Center pp. 30-38
Slide 3: Outline of FY2024 Financial Results and FY2025 Forecast
3/39 Outline of FY2024 Financial Results and FY2025 Forecast Itaru Kitahira Vice President and CFO
Slide 4: FY2024 Financial Results
FY2024 Financial Results 4/39 Net sales were ¥48 billion, a slight increase of 3.3% YoY. Operating loss was ¥220 million, mainly due to weaker demand in the ICT market and retirement benefit expenses at the Mexico subsidiary. Ordinary Profit reached ¥549 million, supported by real estate-related g
Slide 5: FY2024 Results | by Segment
FY2024 Results | by Segment 5/39 CS: Strong performance in the car electronics, home appliance, and industry markets led to higher sales and profits YoY. SCI: Sales were flat YoY, but operating loss narrowed due to pricing optimization and cost reduction. (Note: Approx. ¥684 million in inventory
Slide 6: FY2024 Quarterly Results | by Segment
FY2024 Quarterly Results | by Segment 6/39 1H: Strong performance in tablet, smartphone, and renewable energy-related businesses in CS Division drove overall growth. 2H: The slowdown in ICT market-related business in CS Division led to low sales and operating profit. ( ): YoY Unit: ¥ millions FY
Slide 7: FY2024 Results | Sales by Market
FY2024 Results | Sales by Market 7/39 Home appliance: Growth driven by strong sales of remote controls and connectors for amusement equipment. Industry: Expansion supported by strong demand for connectors related to renewable energy. ICT: Decline due to weaker demand for smartphone-related con
Slide 8: FY2024 Results (YoY) | Changes in Operating Profit
FY2024 Results (YoY) | Changes in Operating Profit 8/39 Excluding currency impact, operating profit declined due to lower sales, but operating loss narrowed YoY thanks to yen depreciation, improved variable cost ratio from product mix, and fixed cost reductions. Unit: ¥ millions Operating Profit＋
Slide 9: Major Components of Extraordinary Losses and Income Taxes
Major Components of Extraordinary Losses and Income Taxes 9/39 Unit: ¥ millions Extraordinary Losses Description Amount Expenses related to domestic workforce optimization under the “structural reform Business structure program” announced on March 25. 869 reform expenses (Extra retirement payments,
Slide 10: FY2025 Forecast | FY2024-FY2025
FY2025 Forecast | FY2024-FY2025 10/39 Sales are projected to decline, but operating profit is expected to improve through the acceleration of the structural reform program. Unit: ¥ millions FY2024 Result FY2025 Forecast YoY Net Sales 48,051 46,000 △4.3％ Operating Profit △220 500 ー (Operating profi
Slide 11: FY2025 Forecast (YoY) | Changes in Operating Profit
FY2025 Forecast (YoY) | Changes in Operating Profit 11/39 Fixed cost reductions and improved variable cost ratio under the structural reform program are expected to offset the impact of yen appreciation and lower sales, resulting in an operating profit of ¥500 million. Unit: ¥ millions Operating P
Slide 12: Appendix: Cash Position
Appendix: Cash Position 12/39 Unit: ¥ millions March 2024 March 2025 Difference A B B–A Assets 58,444 57,684 △759 Cash and cash equivalents 10,258 10,475 ＋216 Accounts receivable 13,222 13,935 +713 Inventories 9,257 7,673 △1,584 Fixed assets 24,619 24,535 △84 Liabilities 26,300 28,462 ＋2,162 Account
Slide 13: Appendix: Cash Flow Position
Appendix: Cash Flow Position 13/39 Unit: ¥ millions FY2023 FY2024 Cash flow from operating activities 3,719 2,439 Working capital 1,610 245 Profit before taxes △53 △963 Depreciation 2,451 2,347 Others △289 809 Cash flow from investing activities △1,617 △2,216 Free cash flow 2,102 222 Cash flow from
Slide 14: Progress of Medium-Term Business Plan SMK Next100 and Structural Reform Program
14/39 Progress of Medium-Term Business Plan “SMK Next100” and Structural Reform Program Yasumitsu Ikeda President, CEO and COO
Slide 15: Positioning of the Medium-Term Business Plan (Unchanged)
Positioning of the Medium-Term Business Plan (Unchanged) 15/39 SMK’s Vision —Challenge, Creativity, Solutions Previous Medium-Term Medium-Term Business Plan Long-Term Vision Business Plan FY2021-FY2023 FY2024-FY2026 FY2035 SMK 100th Anniversary in April 2025 What SMK should be Accelerating structura
Slide 16: Basic Policy (Unchanged) Improving Corporate Value
Basic Policy (Unchanged) 16/31 In preparation for great progress in the next 100 years, we will accelerate structural reforms for sustainable growth. Based on the promotion of sustainable management, we will work to achieve sustainable growth in sales and profits, advance the sophistication of o
Slide 17: Progress of SMK Next100 | Sales and Profit by Segment
Progress of SMK Next100 | Sales and Profit by Segment 17/39 FY2024 targets missed due to 2H market downturn; tough conditions to continue in FY2025. We will enhance competitiveness by accelerating structural reforms through the program announced in March 2025. FY2026 total target unchanged, bu
Slide 18: Progress of SMK Next100 | FY2025 Target vs. Forecast
Progress of SMK Next100 | FY2025 Target vs. Forecast 18/39 <Reasons for missing sales target> CS: Growth in car electronics, e-bike, and amusement markets, but weakness in ICT market. SCI: Prolonged inventory adjustment in housing equipment and car electronics markets, and delays in commercializ
Slide 19: Sales by Region | Impact of U.S. Additional Tariffs
Sales by Region | Impact of U.S. Additional Tariffs 19/39 Direct impact is limited. Indirect effects from market deterioration remain uncertain and are not reflected in this forecast. Taking appropriate actions, including price optimization negotiations with key customers and supply chain opti
Slide 20: Structural Reform | Implementation of the Structural Reform Program
Structural Reform | Implementation of the Structural Reform Program 20/39 Medium-Term Accelerate structural reforms for sustainable growth Business Plan Invest resources and reform cost structure to return to a growth trajectory in sales and profit. “SMK Next100” Strengthen management base throu
Slide 21: Structural Reform | Overview of the Structural Reform Program
Structural Reform | Overview of the Structural Reform Program 21/39 Acceleration of business strategies Review business structure and shift to growth areas. for growth => pp.22-23 Optimize domestic workforce. Streamline domestic operations. Restructuring of (close Ibaraki Sales Office, reorgan
Slide 22: Structural Reform | Acceleration of Business Strategies for Growth
Structural Reform | Acceleration of Business Strategies for Growth 22/39 Company-wide Strategy Considering the expanding applications of electronics and the growing market potential, we designate CS Division as a key growth area and increase resource investment. SCI Division Innovation Center Revi
Slide 23: Structural Reform | Strategies by Segment
Structural Reform | Strategies by Segment 23/39 Segment Management Policy Initiatives Expand orders focusing on the highest priority market: Car Electronics Aim for growth that outperforms - xEV, e-bike, 4-wheel, 2-wheel competitors. Expand businesses in the ICT and renewable energy CS Divisio
Slide 24: Advancing Structural Reform Program | Optimization of Talent Portfolio
Advancing Structural Reform Program | Optimization of Talent Portfolio 24/39 1. Maximize individual potential through talent strategy and human capital investment aligned with business strategy. 2. Improve organizational strength by shining a spotlight on each employee and fostering a culture of lea
Slide 25: Toward Management Conscious of Cost of Capital and Stock Price
Toward Management Conscious of Cost of Capital and Stock Price 25/39 Strengthen initiatives to address key factors behind low PBR: (1) Weak sales and profit and uncertainty in growth potential (2) High profit volatility (3) Low ROE and operating profit margin Gradually enhance efforts to improve
Slide 26: ESG & Sustainability Management
ESG & Sustainability Management 26/39 Challenge Initiatives Strengthen corporate governance. • Appoint female outside director. (scheduled for June 24, 2025) New board structure: 2 → 3 outside directors, 4 → 3 inside directors Promoting Established and revised policies. (April 2025) ESG & • Esta
Slide 27: News – 1 | Website Renewal
News – 1 | Website Renewal 27/39 Launch: May 2025 https://www.smk.co.jp/en Completely redesigned layout and structure – Improve navigation for easier access to the right information for each visitor Enhanced product and investor relations content – Provide useful information for all stakeholders
Slide 28: News – 2 | SMK TEXPO 2025
News – 2 | SMK TEXPO 2025 28/39 Date: July 2 to 4, 2025 10:00 to 18:00 (until 17:00 on the final day) Venue: Tokyo International Forum Hall E2 (2,000m2) Theme: Turning Electronic Components into Solutions □ Showcasing SMK’s 100-year journey and cutting-edge components, technologies, and soluti
Slide 29: News – 3 | Opening of India Office
News – 3 | Opening of India Office 29/39 We aim to further expand into the Indian market through the establishment of a representative office. Location Delhi Delhi Opening December 2025 Target Markets and Customers Car electronics market: Local two-wheeler and four-wheeler customers
Slide 30: CS Division (Connection System)
CS Division (Connection System) 30/39 [Major Products] Connectors Information & Home Appliance & Car Electronics Communication Technology Industry/Others High frequency High-current FPC/FFC connectors Coaxial FAKRA Connectors for board to board small board to board with locking feature connectors ph
Slide 31: CS Division | FY2024 Result – FY2026 Target
CS Division | FY2024 Result – FY2026 Target 31/39 FY2024 Result Full-year sales were ¥22.2 billion, 4% below forecast; operating profit was ¥1.5 billion, 14% below forecast. Sales fell short of forecast in the car electronics, ICT, and industry markets, except for home appliances. FY2025 Forecast
Slide 32: CS Division | Growth Strategy
CS Division | Growth Strategy 32/39 Car Electronics Strengthen product development for xEV and BMS • Expand sales of connectors for EV batteries → Active business negotiations ADAS, Infotainment • Automotive camera connectors Growing demand due to increased applications and number of automotive came
Slide 33: SCI Division (Sensing, Communication & Interface)
SCI Division (Sensing, Communication & Interface) 33/39 [Major Products] Switches, automotive cameras, wireless modules, remote controls, touch sensors SW - Switch - CU - Composite Unit - HCF Mini 1-Dome switches Automotive Milweb HarvestLoop Rubber push Top push camera modules (Millimeter wave (Sel
Slide 34: SCI Division | FY2024 Result – FY2026 Target
SCI Division | FY2024 Result – FY2026 Target 34/39 FY2024 Result Net sales exceeded the forecast by 4% at ¥25.6 billion; operating profit fell short by ¥222 million. Strong performance in the home appliance and industry/other markets drove sales, but higher costs due to continued yen depreciation
Slide 35: SCI Division | Growth Strategy
SCI Division | Growth Strategy 35/39 Clarify “Core Business,” “Strategic Focus,” and “Discontinued Business” 1. Secure revenue For home appliances, housing equipment, and by maintaining and expanding sales car electronics markets: Core of remote controls, switches, and • Leverage existing technolo
Slide 36: Innovation Center | Mission
Innovation Center | Mission 36/39 The mission of Innovation Center remains unchanged under the structural reform program, but we will strengthen our focus and selection. Missions of Innovation Center 1. Create solution businesses addressing social challenges. 2. Create the next pillars of revenue th
Slide 37: Innovation Center | FY2024 Result – FY2026 Target
Innovation Center | FY2024 Result – FY2026 Target 37/39 FY2024 Result Net sales were ¥251 million, 9% below forecast; operating loss narrowed by ¥41 million. Delays in the launch of the fall detection system and a well-being app that visualizes head health through speech analysis. FY2025 Forecast
Slide 38: Innovation Center | Growth Strategy
Innovation Center | Growth Strategy 38/39 Sales Target Unit: ¥ millions Business Selection and Focus Speech-based Head Health Analysis Technology FY2025 FY2026 FY2027 1. Allocate resources to priority businesses - Speech-based head health Target Fields and Sales Strategy 41 123 257 analysis techno
Slide 39: Notice
Notice 39/39 All information in this material concerning the forecast of business achievements, projections of general business conditions and our business strategies is dependent on our conclusion made to a normally foreseeable extent applying information reasonably accessible to us at the time of