Overview of FY2020/3 Results Financial Highlights Outline of Segments

Net sales (millions of yen) Operating income (millions of yen) Profit attributable to owners of the parent / Earnings per share ■■ 1 株当たり当期純利益■■ 1 株当たり当期純利益（円） （円） Electronic components （百万円） （百万円） （百万円） Profit attributable to owners of the parent (millions of yen) （円） Earnings per share (yen) （百万円） （百万円） 292,779 443,615292,779 300000 300000 10,014 8,014 292.07 6,975 7,788 8,119 225000 225000 7,570 6,490 292,779 6,879 5,852 % 5,437 249.43 213.21 85.1 245,387 236.58 227,209 235,921 2020/3 192.43 150000 150000

Net sales Segment income 75000 75000 (millions of yen) (millions of yen)

Business description Up 67.4% Up 57.6% 2016/3 2017/3 2018/3 2019/3 2020/3 2016/3 2017/3 2018/3 2019/3 2020/3 2016/3 2017/3 2018/3 2019/3 2020/3 Development, manufacture and sale of semiconductors, general 377,587 0 0 electronic components and other products, EMS, and other activities 7,503 15 16 17 1518 1619（年度）17 18 19（年度）2015/3 2016/3 2017/32015/32018/32016/32019/32017/3 2018/3 2019/32015/3 2016/3 2017/32015/32018/32016/32019/32017/3 2018/3 2019/3

Review of FY2020/3 performance 225,598 4,761 Return on equity (ROE) (%) Cash flows from operating activities / Equity ratio (%) 450000 10000 Free cash flow The electronic components business saw solid performance in both 377,587 （百万円） components sales and EMS as well as an increase in 7,503 （%） （%） Cash flows from operating activities (millions of yen) revenue with the addition of Fujitsu Electronics to the Group. As a result, 15 15 Free cash flow (millions of yen) 225,598 net sales increased 67.4% year on year to ¥377,587 million and segment225000 5000 4,761 2019/3 2020/3 2019/3 2020/3 22,406 income was up 57.6% to ¥7,503 million. 12 12 10.9 10.9 10.9 10.9 18,754

0 0 54.8 2019/3 2020/3 2019/3 2020/3 9 9 9.5 52.4 Business overview and opportunities/risks 9.0 9,546 10,746 10,077 49.7 7.6 10,487 Electronic parts and semiconductor business EMS business 8,283 5,904 37.7 6 6 Business overview Business overview 35.8 In the electronic parts and semiconductor business, sales The EMS business maintained solid performance of LED products for automotive devices and consumer throughout the year, particularly in the medical devices and 3 3 –1,547 electronics were strong while the acquisition of Fujitsu automotive sectors. Operations were suspended in China Electronics led to the addition of a new revenue base, and Malaysia from February to March 2020 due to those 2015/3 2016/3 2017/32015/32018/3–8,4082016/32019/32017/3 2018/3 2019/32015/3 2016/3 2017/32015/32018/32016/32019/32017/3 2018/3 2019/3 primarily from the automotive sector. Furthermore, the governments’ measures to halt the spread of COVID-19, but 0 0 15 16 172016/315 2017/318 16 2018/319（年度）17 2019/3182020/3 19（年度）2016/3 2017/3 2018/3 2019/3 2020/3 2016/3 2017/3 2018/3 2019/3 2020/3 termination of a sales contract with U.S.-based Cypress the impact was limited. Semiconductor (announced on October 10, 2019), a major supplier for Fujitsu Electronics, resulted in one-off revenue. Opportunities • Increase in the number of fabless and rising Net sales by segment and composition Net sales by region and composition Opportunities demand for outsourcing Software Others North America Europe • Increasingly high performance of smartphones with the full • Growing needs for further automation and efficiency introduction of 5G and the expansion of the data center market ¥2,778 million ¥19,781 million ¥26,894 million ¥20,019 million • Growth of new business combining the IoT with AI Risks 0.6% 4.5% 6.1% 4.5% • Progress in the application of electronic components • Shortage of human resources both in Japan and AI in cars, as with CASE (Connected, Autonomous, and overseas Net sales Net sales Shared & Services, Electric) • Suspension of factory operations due to earthquake or other disaster, the spread of infectious diseases, and ¥ ¥ 443,615 443,615 Risks million million external political and economic factors • Decline in demand and greater restrictions on economic Information Electronic activity due to the COVID-19 pandemic equipment components Asia Japan • Diluted significance of trading business under a ¥43,466 million ¥377,587 million ¥126,115 million ¥270,585 million global economy 9.8% 85.1% 28.4% 61.0% • Loss of commercial rights due to changes in commercial 2020/3 2020/3 distribution by customers and suppliers

24 KAGA ELECTRONICS CO.,LTD. Integrated Report 2020 25 Overview of FY2020/3 Results Outline of Business Segments

Information equipment Software

9.8% 0.6% 2020/3 2020/3

Net sales Segment income Net sales Segment income (millions of yen) (millions of yen) (millions of yen) (millions of yen)

Business description Down 2.0% Down 10.4% Business description Down 3.4% Down 4.3% Sale of PCs, PC peripherals, home electric appliances, photograph and Production of computer graphics, planning and development of 44,344 2,876 imaging products, and finished products such as original 43,466 1,906 amusement products, and other activities 2,778 1,707 247 236 Review of FY2020/3 performance Review of FY2020/3 performance 55000 2400 3600 350 In the information equipment business, sales to electronics mass In the software business, orders declined in particular for production 44,344 43,466 1,906 2,876 2,778 retailers were solid on the back of replacement demand prior to the 1,707 of computer graphics animation due mainly to contracting business 247 236 consumption hike while sales in the housing-related sector were from customers. As a result, net sales decreased 3.4% year on year to

weak. As a result, net sales decreased 2.0% year on year to ¥43,466 27500 1200 ¥2,778 million and segment income was down 4.3% to ¥236 million. 1800 175 million and segment income was down 10.4% to ¥1,707 million. 2019/3 2020/3 2019/3 2020/3 2019/3 2020/3 2019/3 2020/3

0 0 0 0 Business overview and opportunities/risks 2019/3 2020/3 2019/3 2020/3 2019/3 2020/3 2019/3 2020/3 Others PCs and PC peripherals sales Home electric appliances sales

Business overview Business overview The PC and PC peripherals sales business captured The housing-related home electric appliances sales business replacement demand prior to the consumption tax hike and remained weak due to adjustments made to delivery demand associated with the upgrade to Windows 10, and dates by customers. The commercial facilities-related sales to electronics mass retailers, schools and educational LED installment business was impacted by a pause in 4.5% institutions were also strong. replacement demand by major customers. 2020/3 Opportunities Opportunities • Increased demand for PCs and PC peripherals as the • Growth of energy-saving and eco markets number of people teleworking grows • Increased speed of proliferation of IoT-enabled devices • Heightened demand in the field of education due to Risks Net sales Segment income progress in the Global and Innovation Gateway for All (millions of yen) (millions of yen) (GIGA) school concept • Contraction of domestic home appliances and housing equipment markets Business description Down % Down % Risks 0.9 7.8 Repair and supports for electronics equipment, manufacture and sales • Loss of commercial rights and product procurement 19,959 19,781 of amusement equipment, and sales of sports goods, and other activities 490 routes due to changes in the distribution policy of buyers 452 and suppliers Review of FY2020/3 performance • Intensifying due to lower price and more new 25000 700 In the Others segment, sales of game equipment for the amusement entrants 19,959 19,781 remained strong while sales of golf supplies were sluggish. 490 452 As a result, net sales decreased 0.9% year on year to ¥19,781 million and segment income was down 7.8% to ¥452 million. 12500 350 2019/3 2020/3 2019/3 2020/3

0 0 2019/3 2020/3 2019/3 2020/3 26 KAGA ELECTRONICS CO.,LTD. Integrated Report 2020 27