Kanematsu Electronics : Highlights of Consolidated Financial Results for the Fiscal Year Ended March 31, 2022

[Supplementary Materials]

April 28, 2022

Kanematsu Electronics, Ltd.

Highlights of Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 [Japanese GAAP]

• Net sales, operating profit, ordinary profit, and profit attributable to owners of parent all increased.

♢Net sales	71,331 million yen	8.8 %
♢Ordinary profit	12,784 million yen	15.8 %
♢Profit attributable to owners of parent	8,785 million yen	19.0 %
♢ROE (Return on equity)	14.9 ％	1.4 pt

(% indicates change from the previous corresponding period)

					Status of Income					主な増減要因
												■ Net sales
									FY Mar 2023 full-
				FY Mar							Net sales increased ¥5,788 million to ¥71,331
					FY Mar 2021	Year-on-		year
		2022			Percentage	million (up 8.8% year-on-year) as a result of
			Full-year	year change	Percentage	forecast
				Full-year		change from	efforts to further expand the robust sales of
							change (%)		previous year
	(Million yen)									(%)		service-oriented business centered on "3Ks*1,
	Net sales			71,331	65,542	5,788	8.8	72,000	0.9		in addition to the construction of environments
												for virtual desktop infrastructure (VDI), as
	Gross profit	22,089	19,946	2,143	10.7	-	-		part of measures taken to reform work styles
												and preventing COVID-19, and security
												solutions in line with the era of Zero Trust
	Selling, general and administrative	(9,401)	(9,075)	(326)	3.6	-	-
	expenses		Network.
	Operating profit			12,687	10,870	1,817	16.7	12,750	0.5		■ Profit
	Non-operating income	97	172	(74)	(43.2)	-	-		Operating profit increased ¥1,817 million to ¥
												12,687 million (up 16.7% year-on-year).
	Non-operating expenses	(1)	(1)	0	22.7	-	-		Ordinary profit increased ¥1,742 million to ¥
												12,784 million (up 15.8% year-on-year). Profit
	Ordinary profit			12,784	11,041	1,742	15.8	12,800	0.1		attributable to owners of parent increased ¥
												1,402 million to ¥ 8,785 million (up 19.0%
	Extraordinary income	185	2	183	8467.3	-	-		year-on-year).
	Extraordinary loss	(19)	(107)	88	(82.3)	-	-		*1 "3Ks" means the service business
												comprising "KEL Briefing Center (KBC),"
	Profit before income taxes			12,951	10,936	2,014	18.4	-	-		"KEL Customer Cloud (KCC)," and "KEL
												Managed Service (KMS)."
	Income taxes	(4,177)	(3,553)	(624)	17.6	-	-

Profit	8,773	7,383	1,390	18.8	-	-
Profit attributable to	8,785	7,382	1,402	19.0	8,600	(2.1)
owners of parent

Basic earnings per share (yen)		307.07	258.11	48.96	19.0

Status of assets, liabilities and net assets
	As of March	As of March	Year-on-year		■ Assets
	Percentage	Current assets increased ¥6,050 million (8.8%) from the end of the
	31, 2022	31, 2021	change
(Million yen)	previous fiscal year, mainly due to increases of ¥2,790 million in cash
			change (%)
Total Assets	82,446	75,164	7,281	9.7	and deposits and ¥1,590 million in notes and accounts receivable-trade.
Non-current assets increased ¥1,231 million (19.9%) from the end of the
Current assets	75,031	68,981	6,050	8.8	previous fiscal year, mainly due to an increase of ¥1,857 million in
investment securities.
Non-current assets	7,415	6,183	1,231	19.9	■ Liabilities
Liabilities	20,518	18,749	1,768	9.4	Current liabilities increased ¥1,663 million (10.2%) from the end of the
					previous fiscal year, mainly due to increases of ¥746 million in income
Current liabilities	17,966	16,303	1,663	10.2	taxes payable and ¥465 million in notes and accounts payable-trade.
Non-current liabilities increased ¥105 million (4.3%) from the end of
Non-current liabilities	2,551	2,446	105	4.3	the previous fiscal year, mainly due to an increase of ¥109 million in
retirement benefit liability.
Net assets	61,928	56,415	5,513	9.8	■ Net assets
					Net assets increased ¥5,513 million (9.8%) from the end of the previous
Equity (Note 1)	61,885	56,361	5,524	9.8	fiscal year, mainly due to an increase from recording ¥8,785 million in
					profit attributable to owners of parent and a decrease from the
Equity ratio (Note 2)	75.1%	75.0%	0.1pt	-	payment of ¥4,148 million in dividends.
					As a result, the equity ratio stood at 75.1%.

(Note 1) Equity = "Total shareholders' equity" + "Total accumulated other comprehensive income" of net assets

(Note 2) Equity ratio = Equity capital / Total assets

	Cash flows							Dividends
					■ CF from operating activities			FY March 2022	FY March
			FY Mar 2022	FY Mar 2021 Cash inflow of ¥7,999 million,				2021
			Full year	Full year	mainly due to an increase in	Interim dividend	75.00		65.00
		(Million yen)			operating revenue and the collection	(Yen)
					of trade receivables.
CF from operating activities		7,999	8,610		Year-end dividend
				80.00		70.00
					■ CF from investing activities	(Yen)
CF from investing activities		-1,074	-884Cash outflow of ¥1,074 million,
					mainly due to the purchase of	Annual dividend
Free cash flows		6,924	7,725investment securities, property, plant	155.00		135.00
					and equipment, and intangible assets.	(Yen)
CF from financing activities		-4,149	-3,863■ CF from financing activities
Net increase (decrease) in cash and cash			Cash outflow of ¥4,149 million,	Equity (Million yen)	61,885		56,361
equivalents			2,790	3,867mainly due to payment of dividends.
Cash and cash equivalents at end of	49,668	46,877				Payout ratio (%)	50.5		52.3
period
Trends in ordinary profit and ordinary profit		Million yen	Trends in Profit and ROE
Million yen		to total assets
					10,000					30.0%
14,000						30.0%
							9,000
12,000				12,784	25.0%				8,785	25.0%
					8,000
10,000		10,999	11,041				7,000		7,387	7,382
10,125								20.0%
			17.9%	20.0%		6,739
				6,000
			16.8%
8,000								14.9%
15.0%	15.3%						14.2%	14.5%

Segment Information

				Net sales			Segment profit
			FY Mar	FY Mar 2021	Year-on-	FY Mar	FY Mar 2021	Year-on-
		2022	2022
		Full-year	year change	Full-year	year change
	(Million yen)		Full-year	Full-year
	IT Systems Business	50,914	46,697	4,217	8,530	7,103	1,426
	Services and Support Business	20,899	19,616	1,283	4,032	3,739	292
	Total		71,814	66,313	5,500	12,562	10,842	1,719
	Other (including adjustments)	(482)	(770)	288	125	27	97

Total

71,331

65,542

5,788

12,687

10,870

1,817

■ IT Systems Business

Net sales increased ¥4,217 million year-on-

year (up 9.0% year-on-year), mainly due to strong performance in the storage-related business and the network security-related business.

■ Services and Support Business

Net sales increased ¥1,283 million year-on- year (up 6.5% year-on-year), mainly due to increases in sales related to the system operation business and cloud services.

6,000								15.0%	5,000				13.5%			15.0%
						4,000									10.0%
							10.0%
4,000								3,000
							5.0%	2,000									5.0%
2,000
							1,000
0								0.0%	0									0.0%
							FY Mar 2019 FY Mar 2020 FY Mar 2021 FY Mar 2022
		FY Mar 2019 FY Mar 2020 FY Mar 2021 FY Mar 2022
			Ordinary profit		Ratio of ordinary profit to total assets				Profit (Full year)			ROE (Full year)

*The financial results outlook and other forward-looking statements herein are based on information currently available to the Company and on certain assumptions deemed reasonable, and do not represent a promise by the Company to achieve them. Actual results may differ significantly from these forecasts due to a wide range of factors.