2021 - 2022

Financial Results Briefing Material

for the Fiscal Year ended March 2023

KAGA ELECTRONICS CO., LTD.

TSE Prime Market 8154

May 25, 2023

INDEX

FY2022/3 Financial Results

P-3〜

Summary/Financial Highlights

Financial Highlights by Business Segment/

Balance Sheet/Cash Flows/Forecasts

Management Topics

P-27〜

Alternative Proposal / Alternative Sales Inventory Reduction

Updates of the Medium-Term Management targets Direction of Increase/Decrease Factors

on Operating Income / Concept of ROE Progress of medium- to long-term sustainability targets / Shareholder Return

Reference

P-39〜

Consolidated Financial Results

for the Fiscal Year ended March 2023

Director,

Managing Executive Officer

Eiji Kawamura

My name is Kawamura with KAGA ELECTRONICS. Thank you very much for your continued patronage.

I would like to provide an overview of the financial results for the fiscal year endingMarch 2023.

Summary of Financial Results for FY2023/3

Results for FY2023/3

  • Net sales increased by 112.2 billion yen or 22.6%, year on year to 608.0 billion yen. The electronic components business achieved significant growth both in the component sales business and the EMS business. Supply shortages and extended lead times were generally resolved, and sales to a wide range of industries were high.
  • Operating income increased by 11.3 billion yen or 54.2%, year on year to 32.2 billion yen. Operating income increased significantly due to improved gross profit margin resulting from higher sales and improved sales mix.
  • All metrics, from net sales to net income for the fiscal year, achieved record highs.

FY2024/3

earnings forecast

  • Forecast assumptions: Although a gradual recovery is expected, the outlook is uncertain partly due to rising commodity prices and financial system instability. While supply shortages and extended lead times were generally resolved, demand is expected to temporarily decline due to a backlash from increased demand amid the COVID-19pandemic and inventory adjustments by customers.
  • The electronic components business is expected to post decreases in net sales and profit, considering the business environment and market conditions carefully.
  • Net sales of 545.0 billion yen (down 10.3%) and operating income of 25.0 billion yen (down 22.3%) are expected.

Shareholder

Return

  • FY2023/3: The year-end dividend will be 120 yen per share (70 yen ordinary dividend + 10 yen commemorative dividend + 40 yen extraordinary dividend) as previously announced. The annual dividend including the interim dividend amounts to 220 yen per share (140 yen ordinary dividend + 10 yen commemorative dividend + 50 yen extraordinary dividend), an increase of 100 yen from the previous fiscal year.
  • FY2024/3: Although a temporary decrease in profit is expected, the dividend forecast for the next fiscal year will remain unchanged from the previous year, with priority on stable dividend payouts (220 yen per share, consisting of 110 yen for both interim and year-end).

3

First, here is a summary.

Net sales were JPY608 billion, up JPY112.2 billion from the previous year. This was due to significant growth in both component sales and EMS in the electronic components business. Operating profit increased JPY11.3 billion from the previous year to JPY32.2 billion. All items, from net sales to net profit, have reached record highs.

I will continue with our forecast for the fiscal year ending March 2024.

As a premise for the outlook, although the economic situation is expected to show a gradual recovery, the future is uncertain due to the soaring prices of various commodities and financial system instability. As for industry trends, although shortages and long delivery times for semiconductors and electronic components have been largely resolved, we expect a temporary decline in demand due to the impact of inventory adjustments by customers and a rebound from the increase in demand for coronavirus disasters.

Based on a cautious view of the domestic and overseas business environment and market conditions, we are forecasting lower sales and profits in the electronic components business,

with net sales of JPY550 billion and operating profit of JPY25 billion. For the fiscal year ended March 2023, we have decided to pay a full-year dividend of JPY220 per share by adding a special dividend of JPY70 to the initial dividend of JPY150, consisting of an ordinary dividend of JPY140 and a commemorative dividend of JPY10, due to our robust performance.

Although we expect a decrease in profit for the fiscal year ending March 2024, we have decided to pay a dividend of JPY220, the same as in the previous fiscal year. The Company plans to pay interim and year-end dividends of JPY110 per share.

Financial Highlights for FY2023/3

（million yen）

FY2022/3

FY2023/3

YoY

FY2023/3

vs

Previous Forecasts

Results

Results

Forecasts

(Revised on February 7, 2023)

Net sales

495,827

608,064

22.6%

585,000

3.9%

Gross Profit

60,547

12.2%

78,514

12.9%

29.7%

ー

ー

ー

SG&A

39,632

8.0%

46,265

7.6%

16.7%

ー

ー

ー

Operating income

20,915

4.2%

32,249

5.3%

54.2%

29,500

5.0%

9.3%

Ordinary income

21,456

4.3%

32,739

5.4%

52.6%

30,000

5.1%

9.1%

Profit attributable to

15,401

3.1%

23,070

3.8%

49.8%

21,000

3.6%

9.9%

owners of parent

EPS (yen)

576.46

ー

878.65

ー

ー

799.78

ー

ー

ROE

15.7%

ー

19.6%

ー

3.9pt

18.0%

ー

1.6%

Note: 1. The effect of exchange rates on the conversion into yen is approximately 38,483 million yen on net sales

and 1,782 million yen on operating income.

2. "x. x% " represents the profit margin.

4

Next, the key highlights of our financial results.

Net sales totaled JPY608.064 billion, up 22.6% from the previous year. Gross profit totaled JPY78.514 billion, up 29.7% from the previous year. Gross profit margin improved significantly to 12.9%.

SG&A and other general administrative expenses totaled JPY46.265 billion, up 16.7%from the previous year. Operating income was JPY32.249 billion, up 54.2% from the previous year. Ordinary income was JPY32.739 billion, up 52.6% from the previous year. Net profit attributable to owners of the parent was JPY23.07 billion, up 49.8% from the previous year. EPS was JPY878.65 and ROE was 19.6%.

Compared to the figures announced on February 7, 2023, as shown on the far right side of this table, there is an upward revision in all items.

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Disclaimer

Kaga Electronics Co. Ltd. published this content on 25 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 June 2023 11:00:20 UTC.