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17/17 Breakdown of revised forecasts for FY2021/3

These are the factors behind the increases in the earnings forecasts. I will explain them briefly. When we previously forecast annual net sales at JPY400 billion, we estimated sales at the conventional Kaga Electronics Group at JPY240 billion, those at FEI at JPY160 billion, and those at Excel at JPY50 billion. These totaled JPY450 billion, which was the estimate before the COVID-19 pandemic, and we estimated the risk to slash sales at JPY50 billion, leading to the previous forecast of net sales at JPY400 billion. Following the financial results for the first half, we newly estimated sales at the conventional Kaga Electronics Group at JPY235 billion, down JPY5 billion from the initial projection, those at FEI at JPY125 billion, down JPY35 billion, and those at Excel at JPY50 billion, unchanged from the previous estimate. As a result, we came up with the total net sales forecast of JPY410 billion, up JPY10 billion. In terms of operating income, we previously estimated the value for the conventional Kaga Electronics Group to be JPY7.5 billion and that for FEI to be JPY1 billion, and that for Excel to break even, prior to the pandemic. Then we added a risk of gross profit decrease due to the impact of COVID-19 worth JPY5 billion, and the effect of efforts to recover profits worth JPY1.5 billion, leading to a net decrease of JPY3.5 billion, and resulting in the total operating income forecast of JPY5 billion. In response to the results in the first half, we estimated a gross profit decrease at JPY4 billion and the effect of recovery efforts at JPY3 billion, leading to a net decrease JPY1 billion. As a result, we revised our operating income forecast upward by JPY2.5 billion to JPY7.5 billion. Regarding profit attributable to owners of parent, we initially estimated extraordinary profit worth JPY8 billion from gains on negative goodwill by the acquisition of Excel, and extraordinary loss worth JPY1.5billion due to restructuring cost, business risks and others. In addition, we estimated income taxes at JPY1.5 billion, leading to JPY10 billion in profit. This time, we estimated extraordinary loss to be JPY3 billion and income taxes to be JPY2.5 billion, leaving the forecast unchanged at JPY10 billion. As described above, we are pursuing our businesses in an extremely challenging environment, and our full-year results are expected to incur YoY falls in both sales and profits. However, we would like to do our utmost to improve our business performance of the whole Group, and we appreciate your support. Thank you for your listening.