Ryoyo Electro : アニュアルレビュー2023

ANNUAL REVIEW 2023

Fiscal year ended January 31, 2023

Connect Everything.

With Technology. With Ideas.

About the RYOYO Group

About the RYOYO Group

Vision

To provide the best solutions for our customers' issues and problems in a faster and better manner than anyone else.

Corporate Slogan	Action guideline
Connect Everything.	VALUE and PRIDE
With Technology. With Ideas.

End-to-end business domain covering the entire supply chain, from upstream to downstream

Device Network Platform

Semiconductors	5G/LPWA
Sensors			Cloud
Wi-Fi
Electronic Devices			On-premises
LAN/WAN

"Only RYOYO" indicates a high-value-added business, a business in which we offer unique solutions by adding to our wealth of products the value that only we can identify, drawing Only RYOYO on the solid relationships we have with our customers. We provide new value by clarifying the issues our customers face and supporting them all the way through to a swift solution

by means of our unique technologies and services.

Semiconductors & Devices

In the constantly changing semiconductor market, we have evolved into a trusted business partner with a long track-record of achievements. Drawing on solid relationships with the world's leading suppliers, we offer optimal proposals to customers.

Strength

#1

We propose solutions that leverage the latest information we gain by working closely with the world's leading vendors.

#2

Beyond just selling individual products, we propose optimal solutions for customer and market needs by combining multiple products and developing original solutions.

#3

We actively seek out and supply cutting-edge,high-added-value products from in and outside of Japan.

01

Ryoyo Electro Annual Review 2023

About the RYOYO Group

Ryoyo Electro Corporation was founded as a semiconductor distributor of Mitsubishi

Electric Corporation in 1961, at the dawn of the semiconductor industry. Since our

establishment, we have expanded our business lines in tandem with the growth of

the electronics industry, guided by a management philosophy of "Creating value in tune with

the times." Today, as an electronics trading company engaged in both the Semiconductors

& Devices and ICT & Solutions businesses, the Ryoyo Group will engage not only in

the traditional business centered on the sale of goods, but also promote business that helps

to solve issues by extending our focus to include our customers' customers (end-users).

In doing so, our goal is to transform and realize our new image of a trading company that

can become the No. 1 in customer satisfaction. We will continue to refine our unique added

value and provide it to even more customers.

Solution

IoT

AI

Business

Management Tools

ICT & Solutions

Helping to Solve the Social Issues Faced by Customers

We identify various problems and issues that affect

our customers and their end-users, and then

combine the products we offer as an

electronics trading company with our own original technologies to provide ideal solutions faster and in a superior way than other companies.

We are drawing on knowledge cultivated in the Semiconductors & Devices and ICT & Solutions businesses not only to bring various ICT products to market, but also to expand the business by integrating consulting, deployment, maintenance, and operation functions. We support the creation of business solutions and innovative business models that reflect the needs not only of our customers but also their end-users.

Strength
#1	#2	#3
Our sector and	We propose optimal	We bring proven experience
domain-specific	solutions by combining	and expertise to support
specialists can provide	the world's leading	our customers' IT life cycle
broad product and	products and services	(planning, development, operation).
technology solutions,	to solve the
from edge to cloud.	customer's issues.

Ryoyo Electro Annual Review 2023

02

To Our Shareholders

To Our Shareholders

Vision for Ryoyo Electro

Ryoyo Electro has a vision "To provide the best solutions for our customers' issues and problems in a faster and better manner than anyone else." Electronics trading companies operate at a low level of profitability, and their performance is highly vulnerable to changes in the external environment. Factors such as market stagnation, semiconductor supply shortages, cataclysmic events like the pandemic, heightened geopolitical risk, and trends in foreign exchange rates all have a major impact. In this context, the functions and roles demanded of electronics trading companies are changing. We see it as critical to move away from a conventional business centered on product dependent on product competitiveness and toward an approach involving an in-depth understanding of customer needs and the creation of new value to meet those needs. By fully leveraging the relationships we have cultivated with customers over many years of history and on our products, solutions, and other management resources, we are striving to realize our vision for the Company by focusing on initiatives that help address fundamental issues, with a view not only to our customers but to their end-users as well.

Environment for Electronics Trading Companies

Suppliers					Customers
(Electronic component, IT equipment manufacturers)				(Manufacturers of assembled products, end-users)
Scale expansion through M&A, narrowing down of focus areas	COVID-19 giving impetus to digital	transformation throughout society
Accelerated revision of distributor and commercial rights				Changing, diversifying	customer needs
			Major risk factors in recent years
	Sluggishness in domestic market	Geopolitical risks			Impact of COVID-19
		Semiconductor supply shortages	Exchange rates
	Earnings structure with low profitability, highly vulnerable to changes in external environment
			Electronics trading companies
		Shift in functions and roles demanded
Dependence on	Business model				In-depth	Creation of
	product	centered on	Conventional	Current	understanding of
	new value
competitiveness	product sales				customer needs

Creating a Winning Pattern

To guide us in achieving this vision, the Ryoyo Group has set out three core strategies in our current three-year business plan: to expand and deepen customer engagement, to pursue uniqueness, and to increase productivity. Since we engage in the Semiconductors & Devices and ICT & Solutions business, our company has a broad network of contacts both upstream and downstream in the

03

Ryoyo Electro Annual Review 2023

To Our Shareholders

supply chain for electronic devices. Armed with insights into market needs gained from end-users (downstream), we will seek to expand engagement with electronic device manufacturers (upstream), combining products, technologies, and services to offer unique solutions. We aim to build a new business model that is resilient to changes in the environment by pursuing these three strategies organically in concert, tapping into the distinctive features of our businesses. By doing so, we seek to become a key player in creating a business (information and value) cycle across the entire supply chain.

A Cyclical Model for Business

Contact points with customers	Contact points with end-users
Manufacturers of assembled products, system integrators, etc.

Planning	Design	Development	Purchase	Manufacturing	Sale	Installation	Operation	Maintenance
RYOYO
Reinforce engagement		Previous business			Where market needs
with customers		model				are identified
	Semiconductor products		ICT products			Services

Strategy
1	Expand engagement with customers armed with information on market needs
Strategy	Pursue uniqueness	Technical services	Hardware, software	Original services
2	Product, service combinations that meet market needs
Strategy	Increase productivity	Sales productivity	Standardization	Business process reform
3	Establish framework to support Strategies 1 and 2	Remote work	Digital transformation

Alliance with Ryosan

We have been exploring investments and acquisitions for the purpose of acquiring the elemental technologies that will lead to the formation of unique added value and for augmenting the functions of the Group. We are also exploring alliances with a view to establishing a robust management base and capturing further growth opportunities.

In this vein, we recently entered into an alliance with Ryosan Co., Ltd. to further expand the scope of our business. There is very little overlap between Ryoyo Electro and Ryosan in terms of customer relationships, products, and solutions, which are key management resources for an electronics trading company. As such, we expect collaboration between our two companies to generate significant qualitative and quantitative synergies. Through close collaboration, we aim to realize a new image of an electronics trading company that helps resolve the issues and problems facing customers and the market as a whole.

Alliance with Ryosan

Ryoyo Electro

Business structure,

products handled

Information Technology Customer segments

	Ryosan
Acceleration of new value	Little overlap between	Collaboration in existing
creation through	the two comapanies	business areas
product-service combinations			(cross-selling, etc.)
Pursuit of qualitative	Build-up of synergies	Pursuit of quantitative
synergies			synergies

Ryoyo Electro Annual Review 2023 04