Kaga Electronics : Earnings Presentation FY2024/3

2023

2021 - 2023

Consolidated Financial Results

for the Fiscal Year ended March 2024

KAGA ELECTRONICS CO., LTD.

TSE Prime Market 8154

May 9, 2024

Summary of Financial Results for FY2024/3

	 Net sales decreased by 65.3 billion yen or 10.8% year on year to 542.6 billion yen.
	The electronic components business was affected by full-scaleimpact of inventory
	adjustment from 3Q, in addition to disappearance of spot demand and diminution of
	transactions with a major customer of a Group company.
	 Operating income decreased by 6.4 billion yen or 19.9% year on year to 25.8
Results for	billion yen.
The decrease primarily reflected a decrease in gross profit due to lower net sales,
FY2024/3	despite efforts to reduce SG&A expenses.
	 Net income decreased by 2.7 billion yen or 11.8% year on year to 20.3 billion yen.
	1.4 billion yen in gain on sale of investment securities and 0.4 billion yen in gain on
	bargain purchase associated with a corporate acquisition were posted.
	 Compared with the Company plan, net sales fell slightly short of the plan, but
	incomes exceeded the plan.
	 Sales assumptions: Although there is no change to the medium- to long-term growth
	scenario for the electronics-related markets with the automotive area as one of the
	major drivers, full-fledged demand recovery is not expected until the second half
FY2025/3	of FY2025/3 given that full-scale inventory adjustment observed since the second half
of FY2024/3 will continue for some time.
earnings	 Income assumptions: Increase in expenses due to salary increases, etc. are factored
forecast	in, in addition to prolonged inventory adjustment.
	 Earnings forecast: In light of the above, [net sales of 550.0 billion yen (up 2.3%),
	operating income of 26.0 billion yen (up 0.6%), and net income of 18.0 billion
	yen (down 11.5%)] are projected.

Shareholder

Return

• FY2024/3: The year-end dividend will be 110 yen per share as previously forecast on May 11, 2023. The annual dividend including interim dividend amounts to 220 yen per share, unchanged from the previous fiscal year.
• FY2025/3: Despite a projected decrease in final income, the previous fiscal year's 220 yen per share will be maintained.

1

Financial Highlights for FY2024/3

（million yen）

FY2023/3

Results

FY2024/3

Results

YoY

FY2024/3

Forecasts

(Announced on May 11, 2023)

Progress

rate

Net sales

608,064

542,697

-10.8%

550,000

-1.3%

Gross Profit

78,514 12.9%

70,452 13.0% -10.3%

• ー

ー

SG&A

46,265 7.6%

44,607 8.2%

-3.6%

• ー

ー

	Operating income	32,249	5.3%	25,845	4.8%	-19.9%	25,000	4.5%	3.4%
	Ordinary income	32,739	5.4%	25,976	4.8%	-20.7%	25,000	4.5%	3.9%
	Profit attibutable to	23,070	3.8%	20,345	3.7%	-11.8%	18,000	3.3%	13.0%
	owners of parent
	EPS (yen)	878.65	ー	774.61	ー	ー	685.42	ー	ー
	ROE		19.6%	ー	14.5%	ー	-5.1pt	13.3%	ー	1.2pt
	Exchange Rate yen / USD		135.47	ー	144.62	ー	ー	135.00	ー	ー
	Note: 1. The effect of exchange rates on the conversion into yen is approximately 12,539 million yen on net sales
			and 420 million yen on operating income.
	2.	"x. x% " represents the ratio to net sales.
										2

Results by Business Segment for FY2024/3

				（million yen）
FY2023/3	FY2024/3		FY2024/3	Progress
YoY	Forecasts
Results	Results	rate
			(Announced on May 11, 2023)

Electronic	Net sales	539,342		472,583		-12.4%	471,500		0.2%
Component	Segment income	28,314	5.2%	20,887	4.4%	-26.2%	20,700	4.4%	0.9%
Information	Net sales	43,680		44,305		1.4%	45,000		-1.5%
Equipment	Segment income	2,449	5.6%	2,924	6.6%	19.4%	2,500	5.6%	17.0%
Software	Net sales	2,998		2,567		-14.4%	4,500		-42.9%
Segment income	286	9.6%	370	14.4%	29.0%	300	6.7%	23.4%
Others	Net sales	22,044		23,241		5.4%	29,000		-19.9%
Segment income	1,101	5.0%	1,555	6.7%	41.2%	1,500	5.2%	3.7%
Total	Net sales	608,064		542,697		-10.8%	550,000		-1.3%
Segment income	32,249	5.3%	25,845	4.8%	-19.9%	25,000	4.5%	3.4%

Note: 1. Figures of each segment income are not inter-segment adjusted. Total amount is inter-segment adjusted (operating income).

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

3

Results by Company for FY2024/3

（million yen）

FY2022/3

Results

FY2023/3

Results

FY2024/3

Results

YoY

VS

FY2022/3

Kaga	Net sales	281,075		348,034		315,404		-9.4%	12.2%
Gross Profit	41,767	14.9%	53,123	15.3%	47,373	15.0%	-10.8%	13.4%
Electronics
	15,461		21,899		19,580
	Operating income	5.5%	6.3%	6.2%	-10.6%	26.6%
	Net sales	149,455		199,548		190,684		-4.4%	27.6%
Kaga FEI	Gross Profit	14,690	9.8%	20,913	10.5%	19,218	10.1%	-8.1%	30.8%
	Operating income	3,654	2.4%	8,103	4.1%	4,413	2.3%	-45.5%	20.8%
	Net sales	65,296		60,481		36,608		-39.5%	-43.9%
Excel	Gross Profit	4,247	6.5%	4,443	7.3%	3,834	10.5%	-13.7%	-9.7%
	Operating income	1,937	3.0%	2,072	3.4%	1,653	4.5%	-20.2%	-14.6%
	Net sales	495,827		608,064		542,697		-10.8%	9.5%
Total	Gross Profit	60,547	12.2%	78,514	12.9%	70,452	13.0%	-10.3%	16.4%
	Operating income	20,915	4.2%	32,249	5.3%	25,845	4.8%	-19.9%	23.6%

Note: 1. With respect to gross profit and operating income, figures presented above are before consolidation adjustments between the three companies.

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

4

Effect of M&A for FY2024/3

Net Sales

Net sales decreased both at Kaga Electronics and Kaga FEI due partly to disappearance of spot demand. Excel saw a decrease in sales to a major customer.

608,064	-32,630	-8,863	-23,872	542,697
				-65,367
2023/3	Kaga	Kaga FEI	Excel	2024/3
Result	Electronics	FY2024/3	Result
	SG&A	/ SG&A ratio

SG&A expenses decreased in Kaga Electronics and Excel, reflecting cost- cutting efforts. Kaga FEI's expenses increased due partly to the provision of allowance for doubtful accounts and allocation of head office expenses.

46,265	-2,366	+921	-213	44,607
-1,657
9.1%		9.3%	7.0%		8.2%
7.6%	5.4%
6.3%
3.6%
2023/3	Kaga	Kaga FEI	Excel	2024/3
Result	Electronics	FY2024/3	Result

（million yen）

Gross profit / Gross profit margin

All three companies recorded a gross profit decrease due to lower net sales. At Excel, gross profit margin improved due to improved sales mix.

78,514	-5,749	-1,695	-608	70,452
			-8,062
15.3%		15.0%	10.1%		13.0%
10.5%	12.9%	10.5%
7.3%
2023/3	Kaga	Kaga FEI	Excel	2024/3
Result	Electronics	FY2024/3	Result

Operating income / Operating income Operating income / Operating income margin marjin

All three companies recorded an operating income decrease.

At Excel, operating income margin improved due to improved sales mix

32,249	-2,319	-3,690	-419	25,845
				-6,404
6.3%	5.3%	6.2%		4.5%	4.8%
4.1%			2.3%
3.4%
2023/3	Kaga	Kaga FEI	Excel	2024/3
Result	Electronics	FY2024/3	Result

Note :With respect to gross profit and operating income, figures presented above are before consolidation	5
adjustments between the two companies. For reference, after consolidation adjustments, gross profit
stood at 25million yen, and operating income came to 198million yen.

Financial Highlights: Electronic Component Segment

Net sales/Segment income

（million yen）	/	Net Sales
	/	Segment income
539,342
	472,583
28,314
		20,887
5.2%
		4.4%
FY2023/3		FY2024/3
Results		Results

YoY

 Net Sales

-66,759millionyen 12.4％Down

• Segment income -7,427millionyen 26.3％Down
• Both net sales and income decreased in the component sales business due to the impact of inventory adjustment taking place on a full-scale since 3Q, in addition to disappearance of spot demand that had contributed to earnings until the previous fiscal year, given easing of supply shortages of semiconductors and electronic components, and diminution of transactions with a certain major client of Excel.
• Kaga FEI's SoC (System on a Chip) products continued to enjoy robust sales.
• In the EMS business, net sales and income declined due partly to the impact of inventory adjustments at key customers in applications related to medical, industrial and air-conditioning equipment, despite sales growth in the automotive sector resulting from improved supply and demand balance of semiconductors and electronic components.

Note: "x. x% " represents the profit margin.

6

Financial Highlights: Information Equipment Segment

Net sales/Segment income		YoY
（million yen）	/		Net Sales		Net Sales	+625million yen	1.4	％	Up
				+474million yen
	/		Segment income	 Segment income	19.4	％
						Up

43,680	44,305
2,449	2,924
	6.6%
5.6%
FY2023/3	FY2024/3
Results	Results

• Although sales of PCs for mass retailers struggled due to weak demand, sales of PCs for educational institutions remained firm, with an increase in the number of accounts.
• Sales of security software and PC peripheral products were also solid.
• • The LED installation business enjoyed contribution from sales of large-scale projects that the Group has been pushing forward on a full scale since the previous fiscal year.

Note: "x. x% " represents the profit margin.

7

Financial Highlights for FY2024/3 (3months)

FY2023/3 4Q Results

FY2024/3 3Q Results

FY2024/3 4Q Results

（million yen）

YoY

QoQ

Net sales		155,843		131,413		136,239		-12.6%	3.7%
Gross Profit		18,630	12.0%	17,091	13.0%	18,200	13.4%	-2.3%	6.5%
SG&A		12,387	7.9%	10,475	8.0%	12,846	9.4%	3.7%	22.6%
Operating income		6,242	4.0%	6,615	5.0%	5,353	3.9%	-14.2%	-19.1%
Ordinary income		6,121	3.9%	6,365	4.8%	5,664	4.2%	-7.5%	-11.0%
Profit attibutable to		4,017	2.6%	4,587	3.5%	4,353	3.2%	8.4%	-5.1%
owners of parent
EPS (yen)		152.99	ー	174.65	ー	165.73	ー	ー	ー
Note: 1. The effect of exchange rates on the conversion into yen is approximately 2,842 million yen on net sales
		and 90 million yen on operating income.
2.	"x. x% " represents the ratio to net sales.
									8

Results by Business Segment for FY2024/3 (3 months)

（million yen）

FY2023/3 4Q Results

FY2024/3 3Q Results

FY2024/3 4Q Results

YoY

QoQ

Electronic	Net sales	133,733		115,229		114,788		-14.2%	-0.4%
Component	Segment income	4,972	3.7%	5,363	4.7%	3,738	3.3%	-24.8%	-30.3%
Information	Net sales	14,540		9,551		14,038		-3.4%	47.0%
Equipment	Segment income	949	6.5%	641	6.7%	1,002	7.1%	5.6%	56.2%
Software	Net sales	922		591		750		-18.6%	27.0%
Segment income	151	16.4%	149	25.3%	107	14.3%	-29.1%-28.2%
Others	Net sales	6,647		6,041		6,660		0.2%	10.2%
Segment income	129	2.0%	436	7.2%	495	7.4%	281.9%	13.6%
Total	Net sales	155,843		131,413		136,239		-12.6%	3.7%
Segment income	6,242	4.0%	6,615	5.0%	5,353	3.9%	-14.2%	-19.1%

Note: 1. Figures of each segment income are not inter-segment adjusted. Total amount is inter-segment adjusted (operating income).

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

9