Kanematsu : Supplementary Material of Consolidated Financial Results for the Fiscal Year Ended March 31, 2024 (IFRS) TSE

Supplementary Material

Fourth Quarter Results for FY2024

Disclaimer:

The forward-looking statements, including results forecasts, provided in this document (and its appendix) are based on information obtained by Kanematsu Corporation (the Company) and certain reasonable assumptions made by the Company. The Company does not guarantee their achievement, and actual results may differ from forecasts due to various factors. This information is subject to change without prior notice, and users are advised to utilize this document alongside information acquired through other sources and exercise their own discretion. The Company bears no liability or responsibility for any loss or damage resulting from the use of this material Additionally, as the figures presented are rounded off to the nearest 1 billion yen, the total may not precisely match the sum of each item.

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Earnings Summary

• In the final year of the "future 135" medium-term vision, both operating profit and net profit attributable to owners of the parent reached a record-high profit.
• The net profit for the fiscal year ending March 2025 is expected an increase of 1.8 billion yen,

reaching a total of 25.0 billion yen.

Earnings Results							Forecast
								FY2024	FY2025
(Unit: JPY Bn)	FY2023	FY2024	YoY	Growth		(Unit: JPY Bn)	(actual)	(forecast)	YoY
Revenue	911.4	986.0		+74.6	+8%		Revenue	986.0	1,100.0	+114.0
Operating profit	38.9	43.9		+5.0	+13%
Net profit1)	18.6	23.2		+4.6	+25%		Operating profit	43.9	42.5	(1.4)
CF from operating activities	(0.3)	35.6		+35.9			Profit before tax	23.2	25.0	+1.8
CF from investing activities	(16.7)	(12.4)		+4.3
	End of	End of					Annual dividend per share	90 Yen	100 Yen	+10 Yen
	Mar 2023	Mar 2024	YoY
Net D/E ratio2)	1.15x	1.00x		(0.15x)			Dividend payout ratio	32.4%	33.4%
Equity ratio3)	19.0%	22.0%		+3.0%
ROE	12.9%	16.1%		+3.2%
ROIC	5.6%	6.4%		+0.8%
1) Net profit = Profit attributable to owners of the parent			3) Equity ratio ＝ Shareholders' equity ÷ total assets
2) Net D/E Ratio ＝ Net interest-bearing debt ÷ total equity attributable to owners of the parent	4) Assumptions for the forecast: Exchange rate assumed at USD 1＝ JPY 135, with no anticipated changes in interest rates in

	Japan and expected decreases in interest rates overseas.	1
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Profit and Loss

Earnings Results

(Unit: JPY Bn)	FY2023	FY2024	YoY	Growth
Revenue	911.4	986.0	74.6	+8%

Gross profit	130.9	142.6	11.7	+9%
Selling, general and	(96.3)	(106.2)	(9.9)	-
administrative expenses
Other income (expenses)	4.3	7.5	3.2	-

• Revenue

Revenue increased by 74.6 billion yen primarily driven by growth in the Electronics & Devices and Steel, Materials & Plant segments.

Progress

	FY2024	FY2025
(Unit: JPY Bn)	(actual)	(forecast)	YoY
Revenue	986.0	1,100.0	+114.0
Operating profit	43.9	42.5	(1.4)

Operating profit

Interest income (expenses)

Dividend income Other finance income (costs)

Finance income (costs)

Share of profit (loss) of investments accounted for using the equity method, and impairment loss on equity method investments

Profit before tax

38.9 43.9 5.0 +13%

(3.4)	(5.0)	(1.6)	-
1.1	1.3	0.3	-
(0.3)	(0.4)	(0.1)	-
(2.7)	(4.1)	(1.4)	-

(0.5)	(2.6)	(2.0)	-
35.7	37.2	1.5	+4%

• Operating profit

Operating profit increased by 5.0 billion yen as a result of the revenue growth.

• Profit before tax

Despite increases in interest payments and impairment losses related to equity method investments, there was an increase of 1.5 billion yen due to the rise in profit from operating activities.

• Profit attributable to owners of

Profit before tax	37.2	38.0	+0.8
Profit attributable to	23.2	25.0	+1.8
owners of the parent

Profit attributable to owners of the parent
23.2	25.0
18.6

Income tax expense	(11.0)	(12.7)	(1.7)	-
Profit for the year	24.7	24.6	(0.1)	(1%)
Profit attributable to	18.6	23.2	4.6	+25%
owners of the parent

the parent

Achieved a record-high profit of 23.2 billion yen. See page 4 for more details.

FY2023

FY2024

FY2025 (forecast)

1) Assumptions for the forecast: Exchange rate assumed at USD 1＝ JPY 135, with no anticipated changes in interest rates in Japan and expected decreases in interest rates overseas.

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Segment Information

(Unit: JPY Bn)	FY2023	FY2024
Electronics & Devices
	Revenue	282.5	328.6
	Operating profit	20.3	22.8
	Net profit1)	8.8	14.8
Foods, Meat & Grain
	Revenue	340.4	341.7
	Operating profit	4.1	8.0
	Net profit	2.2	3.5
Steel, Materials & Plant
	Revenue	193.4	213.7
	Operating profit	12.3	9.4
	Net profit	6.7	2.6
Motor Vehicles & Aerospace
	Revenue	81.3	90.5
	Operating profit	1.5	3.1
	Net profit	0.8	1.7
Other (Including adjustment)
	Revenue	13.7	11.6
	Operating profit	0.7	0.6
	Net profit	0.1	0.5
Total
	Revenue	911.4	986.0
	Operating profit	38.9	43.9
	Net profit	18.6	23.2

1) Net profit = Profit attributable to owners of the parent

YoY Growth

+46.1 +16%

+2.5 +12%

+6.1 +69%

+1.2 +0%

+3.9 +96%

+1.3 +59%

+20.3 +11%

(2.9) (24%)

(4.1) (61%)

+9.1 +11%

+1.6 +108%

+0.9 +114%

(2.1) (16%)

(0.1) (16%)

+0.4 +398%

+74.6 +8%

+5.0 +13%

+4.6 +25%

Revenue

Operating profit

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Net Profit Breakdown

Profit attributable to owners of the parent

■ Electronics & Devices ■ Foods, Meat & Grain ■ Steel, Materials & Plant ■ Motor Vehicles & Aerospace ■ Other (Including adjustment)

(Unit: JPY Bn)

Electronics & Devices

increased 6.1 billion yen

• ICT Solution: The increase was primarily driven by the acquisition of all shares of Kanematsu Electronics, as well as solid performance in network and security-related businesses, reflecting the growing demand for security measures and DX.
• Mobile: The Increase was driven by the effects of store restructuring and increase in sales volume.

Foods, Meat & Grain

increased 1.3 billion yen

0.8

8.8

2.2

6.7

+6.1

+1.3

(4.1)

14.8

3.5

2.6

• Foods: The increase was mainly driven by robust sales of frozen fruits and beverage ingredients, as well as the overseas processed food business.
• Meat Products: Despite the sluggish domestic markets, profit increased compared to the underperforming previous year, partly due to sales contributions from Uruguayan beef.
• Grain, Oilseeds & Feedstuff: Major grain prices remained weak, leading to a decrease in profits compared to the previous year, which had performed well.

Steel, Materials & Plant

decreased 4.1 billion yen

• Steel: The decrease in profit primarily attributed to impairment losses on equity method investments.
• Energy: The decrease in profits from the previous year, which had performed well, was mainly due to a decline in domestic demand.

Motor Vehicles & Aerospace increased 0.9 billion yen

0.1

FY2023

+0.9

1.7 0.5

FY2024

• Aerospace: Profit increased due to robust transactions of aircraft/vessel related parts.
• Motor Vehicles & Parts: Profit increased due to the improved market conditions.

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Segment Outlook（based on new segment)

• The ICT Solution business formerly categorized within the Electronics & Devices segment, has now been reclassified as the ICT Solution segment.
• The Machine Tools & Industrial Machinery business and Kanematsu Sustech's businesses, have been reclassified to different segments.

Previous segment				New segment
classification (FY2024)			reclassification (FY2025)
Electronics & Devices		ICT Solution
	ICT Solution		Electronics & Devices
Foods, Meat & Grain
	Foods, Meat & Grain
Steel, Materials & Plant
	Steel, Materials & Plant
	Machine Tools & Industrial
	Machinery				Environment

		FY2024	FY2025
(Unit: JPY Bn)	(actual)	(forecast)	YoY
ICT Solution
	Revenue	88.9	90.0	+1.1
	Operating profit	13.8	13.7	(0.1)
	Net profit1)	9.2	9.6	+0.4
Electronics & Devices
	Revenue	236.3	280.0	+43.7
	Operating profit	8.8	8.7	(0.1)
	Net profit	5.4	5.3	(0.1)
Foods, Meat & Grain
	Revenue	341.7	410.0	+68.3
	Operating profit	8.0	7.7	(0.3)
	Net profit	3.5	3.3	(0.2)
Steel, Materials & Plant
	Revenue	211.7	195.0	(16.7)
	Operating profit	8.5	7.4	(1.1)
	Net profit	2.0	3.8	+1.8
Motor Vehicles & Aerospace
	Revenue	105.4	120.0	+14.6
	Operating profit	4.9	5.0	+0.1
	Net profit	2.9	3.0	+0.1
Other(Including adjustment)

Growth

+1%

(1%)

+4%

+19%

(1%)

(3%)

+20%

(3%)

(5%)

(8%)

(13%)

+94%

+14%

+3%

+2%

Motor Vehicles & Aerospace

Other (Inc. adjustment)

Ground inspection, wood processing, etc.

Motor Vehicles & Aerospace

Machine Tools & Industrial

Machinery

Other (Inc. adjustment)

	Revenue	2.0	5.0	+3.0
	Operating profit	0.03	0.00	(0.03)
	Net profit	0.16	0.00	(0.16)
Total
	Revenue	986.0	1,100.0	+114.0
	Operating profit	43.9	42.5	(1.4)

+154%

-

-

+12%

(3%)

1)	Net profit = Profit attributable to owners of the parent	Net profit	23.2	25.0	+1.8
2)	Assumptions for the forecast: Exchange rate assumed at USD 1＝ JPY 135, with no anticipated changes in interest rates in Japan and expected decreases in interest rates overseas.

+8%

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Cash Flows

• Cash flows from operating activities

The cash inflow of 35.6 billion yen was primarily due to the accumulation of operating revenue.

• Cash flows from investing activities

The cash outflow of 12.4 billion yen was mainly due to the execution of new business investments, while there was cash inflow from the sale of property, plant and equipment.

• Cash flows from financing activities

The cash outflow of 50.1 billion yen was primarily due to the repayment of short-term borrowings obtained for the tender offer for Kanematsu Electronics, and payments for the acquisition of its shares to make it a wholly owned subsidiary.

(Unit: JPY Bn)	FY2023	FY2024	YoY			FY2023			FY2024
			35.6
CF from operating activities	(0.3)	35.6		+35.9
CF from investing activities	(16.7)	(12.4)		+4.3				4.8
Free cash flows	(17.0)	23.2		+40.1	(0.3)	(12.4)
	(16.7)
CF from financing activities	4.8	(50.1)		(54.9)
									(50.1)
Operating cash flows (adjusted)1)	30.2		33.2		+3.0			CF from operating activities			CF from investing activities		CF from financing activities

1）Operating cash flows (adjusted) ＝ Operating cash flows ± Change in working capital - Repayment of lease liabilities

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Financial Position

• Total assets

The increase of 47.8 billion yen was primarily due to the increase in trade receivables, reflecting the rise in commodity prices and the depreciation of the yen.

• Net interest-bearing debt

The increase of 11.5 billion yen was primarily due to the rise in operating capital, despite repaying debts.

• Shareholders' equity

The increase of 30.8 billion yen was mainly from the accumulation of profit attributable to owners of the parent and other equity components, driven by the yen depreciation and rising share prices. The equity ratio reached 22.0%, with a net D/E ratio of 1.00x.

	End of	End of			677.6		725.3			159.4
(Unit: JPY Bn)	Mar 2023 Mar 2024	YoY					147.9	159.3
Total assets	677.6	725.3	+47.8					128.5
Net interest-bearing debt	147.9	159.4	+11.5			22.0%	1.15x
19.0%
Shareholders' equity1)	128.5	159.3	+30.8					1.00x
		159.3
Equity ratio2)	19.0%	22.0%	+3.0%	128.5
Net D/E ratio3)	1.15x	1.00x	(0.15x)	End of Mar 2023	End of Dec 2023	End of Mar 2023	End of Dec 2023
PBR4)	1.08x	1.37x	+0.29x	Total assets	Shareholders' equity	Equity ratio	Net interest-bearing debt	Shareholders' equity
Net D/E ratio
1) Shareholders' equity = Total equity attribute to owners of the parent		3) Equity ratio ＝ Shareholders' equity ÷ total assets
2) Net D/E ratio ＝ Net interest-bearing debt ÷ total equity attributable to owners of the parent	4) PBR = Market cap at the end of the period (end stock price x number of issued shares) ÷ Equity capital

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Annual Net Profit

• Achieved the 20 billion yen target of the revised medium-term vision, "future 135."
• The net profit1) for the fiscal year 2025 is expected to be 25.0 billion yen.

		Net profit attributable to owners of the parent
					23.2	25.0
(Unit: JPY Bn)
16.6			16.0	18.6	16.1%
14.4
13.8%	13.3		12.9%
	11.2%	10.5%
	9.7%
6.4%	5.3%	4.9%	5.6%	5.6%	6.4%
FY2019	FY2020	FY2021	FY2022	FY2023	FY2024	FY2025
		Annual	ROE	ROIC		(forecast)

1. Net profit = Profit attributable to owners of the parent
2. Assumptions for the forecast: Exchange rate assumed at USD 1＝ JPY 135, with no anticipated changes in interest rates in Japan and expected decreases in interest rates overseas.

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Dividends

• An annual dividend of a minimum of 90 yen, with progressive dividends.
• With a target total return ratio of 30-35%, the policy is to increase dividends in accordance with the growth of net profit1).
• The annual dividend per share for the fiscal year 2025 is expected to increase by 10 yen, reaching 100 yen.

(Unit: JPY)					90	100
			65	75		Minimum
60	60	60
			of 90 yen
		37.6%
	34.8%		34.0%	33.7%		33.4%
			32.4%
30.3%
F2019	F2020	F2021	F2022	F2023	FY2024	F2025

Dividend per share		Dividend payout ratio

1) Net profit = Profit attributable to owners of the parent

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