Restar : FY 2022 (Apr 2022 – Mar 2023) Consolidated Financial Summary

Note: This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

Consolidated Financial Results

for the Year Ended March 31, 2023

[Japanese GAAP]

May 12, 2023

Company name: Restar Holdings Corporation

Stock exchange listing: Tokyo

Code number: 3156

URL: https://www.en.restargp.com/

Representative:

Tomoharu Asaka

Representative Director

Contact:

Atsuki Ishida

Corporate Officer

Phone: [phone]

Scheduled date of Annual General Meeting of Shareholders: June 29, 2023

Scheduled date of commencing dividend payments: June 30, 2023

Scheduled date of filing annual securities report: June 30, 2023

Availability of supplementary briefing material on annual financial results: Yes

Schedule of annual financial results briefing session: Yes (For analysts and institutional investors)

(Amounts of less than one millions of yen are rounded down.)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2023 (April 1, 2022 to March 31, 2023)

(1) Consolidated Operating Results

(% indicates changes from the previous corresponding period.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Millions of

Millions of

Millions of

Millions of

Fiscal year ended

yen

%

yen

%

yen

%

yen

%

March 31, 2023

487,129

21.9

14,423

90.1

12,043

79.4

7,085

18.9

March 31, 2022

399,590

23.4

7,588

21.6

6,711

18.0

5,957

46.9

(Note) Comprehensive income:

Fiscal year ended March 31, 2023:

¥

7,075 million

[

16.6%]

Fiscal year ended March 31, 2022:

¥

6,068 million

[

23.5%]

Basic earnings per

Diluted earnings per

Rate of return on

Ordinary profit to

Operating profit to

share

share

equity

total assets ratio

net sales ratio

Fiscal year ended

Yen

Yen

%

%

%

March 31, 2023

235.64

234.73

8.9

4.7

3.0

March 31, 2022

198.12

197.31

7.9

3.1

1.9

(Reference) Equity in earnings (losses) of affiliated companies: Fiscal year ended March 31, 2023:

¥

118 million

Fiscal year ended March 31, 2022:

¥

192 million

(2) Consolidated Financial Position

Total assets

Net assets

Capital adequacy ratio

Net assets per share

As of

Millions of yen

Millions of yen

%

Yen

March 31, 2023

267,754

85,095

30.2

2,686.31

March 31, 2022

241,958

81,657

32.1

2,580.33

(Reference) Equity:

As of March 31, 2023:

¥

80,772

million

As of March 31, 2022:

¥

77,586

million

(3) Consolidated Cash Flows

Cash flows from

Cash flows from

Cash flows from

Cash and cash

equivalents at the end

operating activities

investing activities

financing activities

of period

Fiscal year ended

Millions of yen

Millions of yen

Millions of yen

Millions of yen

March 31, 2023

(664)

(5,304)

3,713

31,984

March 31, 2022

(26,625)

(16,167)

34,488

33,438

―1―

2. Dividends

			Annual dividends					Payout	Dividends
						Total	to net
									ratio
		1st	2nd	3rd					dividends	assets
			Year-end	Total		(consolidated)
	quarter-end	quarter-end	quarter-end				(consolidated)
Fiscal year ended		Yen	Yen	Yen		Yen	Yen		Millions of	%	%
			yen
March 31, 2022		-	45.00	-		55.00	100.00		3,006	50.5	4.0
March 31, 2023		-	40.00	-		75.00	115.00		3,457	48.8	4.4
Fiscal year ending
March 31, 2024		-	55.00	-		60.00	115.00			49.4
(Forecast)
(Note) Breakdown of the 2nd quarter-end dividend for the fiscal year ended March 31, 2022 :
Ordinary dividend		40.00 yen
Commemorative dividend	5.00 yen
Breakdown of the year-end dividend for the fiscal year ended March 31, 2023 :
Ordinary dividend		45.00 yen
Special dividend		10.00 yen

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 to March 31, 2024)

(% indicates changes from the previous corresponding period.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings per
		owners of parent	share
	Millions			Millions		Millions		Millions
	of yen		%	of yen	%	of yen	%	of yen	%	Yen
Full year	500,000		2.6	10,000	(30.7)	7,000	(41.9)	7,000	(1.2)	232.80

* Notes:

1. Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): No

New	-	(Company name:	)
Exclusion:	-	(Company name:	)

1. Changes in accounting policies, changes in accounting estimates and retrospective restatement
2. 1. Changes in accounting policies due to the revision of accounting standards: Yes
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
3. Total number of issued shares (common shares)
4. 1. Total number of issued shares at the end of the period (including treasury shares):

March 31, 2023: 30,072,643 shares

March 31, 2022: 30,072,643 shares

1. Number of treasury shares at the end of the period: March 31, 2023: 4,568 shares
   March 31, 2022: 4,317 shares
2. Average number of shares outstanding during the period: Fiscal Year ended March 31, 2023: 30,068,248 shares Fiscal Year ended March 31, 2022: 30,068,405 shares

―2―

(1) Overview of Operating Results for the Fiscal Year under Review

During the consolidated fiscal year under review, the Japanese economy experienced a gradual recovery in economic activities that were suppressed by COVID-19. On the other hand, the economy has been affected by various factors, such as soaring electricity prices and rising prices of commodities due to high resource prices resulting from the Russia-Ukraine issue, sharp fluctuations in exchange rates, and changes in monetary ease policy. In the business environment surrounding our company, the future remains uncertain, as the production adjustment phase due to the shortage of semiconductor components at the beginning of the period has turned into an inventory glut in the second half of the period due to the easing of the supply-demand crunch.

Under these circumstances, in order to promote new business creation, we are pursuing initiatives such as business matching services, seeking business opportunities and strengthening collaboration with various partners. We are also focusing on one of our materialities, "Creating an environmentally friendly society," and are undertaking initiatives such as expanding the installation of solar power plants through green financing. Furthermore, we are focusing on providing IoT solutions for social issues faced by local governments, such as crime prevention, disaster prevention, and business continuity planning (BCP), by utilizing communication and image analysis technology. In order to achieve sustainable growth in the future, we will promote various initiatives and strive to expand our business operations.

(Overview of Consolidated Operating Results)

(Million yen)	Fiscal year ended March 31,	Fiscal year ended March 31,	Change (%)
2022	2023
Net sales	399,590	487,129	21.9%
Operating profit	7,588	14,423	90.1%
Ordinary profit	6,711	12,043	79.4%
Profit attributable to owners of	5,957	7,085	18.9%
parent

・Performance Highlights

Consolidated net sales for the fiscal year increased. This was due to the strong performance in the Semiconductor and Electronic Components Business and the Procurement business mainly owing to firm demand for industrial equipment and in-vehicle equipment despite continued unsteady demand-supply conditions for semiconductors. Operating profit increased mainly owing to an increase in gross profit due to the depreciation of the yen and sales growth. Ordinary profit grew despite interest expenses of ¥1,795 million due to rising interest rates and a foreign exchange loss of ¥1,129 million due to the strong yen in the latter half of the period. Net profit attributable to shareholders of the parent company increased despite the following factors.

1. Recording of ¥1,936 million in extraordinary income as gain on bargain purchase relating to the consolidation of PALTEK CORPORATION and its affiliates in the same period of the previous fiscal year did not exist.
2. Recording of ¥1,876 million in extraordinary losses, such as ¥423 million in special survey costs, etc., and ¥370 million in loss on valuation of investment securities, and ¥892 million in extraordinary losses from impairment losses in the vegetable factory business for the fiscal year.
   As a result, net sales for the fiscal year were ¥487,129 million, up 21.9% year-on-year, operating profit was ¥14,423 million, up 90.1% year-on-year, ordinary profit was ¥12,043 million, up 79.4% year-on-year, and profit attributable to owners of parent was ¥7,085 million, up 18.9% year-on-year, all of which are the best results ever achieved since the business integration in fiscal 2019.

―3―

(Operating Results by Reportable Segment)

The Group has four reportable segments for the allocation of management resources and evaluation of business performance. These four segments are the Semiconductor and Electronic Components Business, the Procurement business, the Electronic Equipment Business, and the Environmental Energy Business.

1) Semiconductor and Electronic Components Business

Reportable Segment	Business			Business Description
			Sales of semiconductors, electronic components, and related products in Japan and
			overseas; system proposals with a variety of line card combinations; provision of high-
Semiconductor and	Devices		value-added solutions and technical support that liquid crystal systems and overseas
Electronic			products; design and manufacturing; LSI design development and support; and
Components			reliability test service
Business
		Electronics manufacturing service for electronic components, modules, etc., with
	EMS		cutting-edge technology, procurement, production management and quality assurance
			at our factories
(Million yen)		Fiscal year ended March 31,	Fiscal year ended March 31,	Change (%)
	2022	2023
Net sales		288,078	339,544	17.9％
Devices		263,702	318,838	20.9％
EMS		24,375	20,705	(15.1％)
Segment profit		7,883	12,657	60.6％

・Performance Overview

In the devices business, although consumer products and other products entered an adjustment phase, sales for industrial equipment and in-vehicle equipment remained firm. Sales also increased due to sales growth at PALTEK CORPORATION and progress in the development of new products and customers. In the EMS business, despite the expandability of the new business for in-vehicle related products, sales declined due to the sluggishness in the mainstay smartphone business. Segment profit increased mainly due to sales growth in the depreciation of the yen and the device business, despite a decrease in profit in the EMS business.

As a result, the Semiconductor and Electronic Components Business recorded net sales of ¥339,544 million, up 17.9% year-on- year, and segment profit of ¥12,657 million, up 60.6% year-on-year.

2) Procurement business

Reportable Segment	Business			Business Description
Procurement	Procurement		Establishment of optimal supply chain management through global
business		procurement/trading for electronics and entrustment service for related operations
(Million yen)			Fiscal year ended March 31,	Fiscal year ended March 31,	Change (%)
		2022	2023
Net sales			81,527	108,632		33.2％
Segment profit			798	2,447		206.7％

・Performance Overview

In the procurement business, sales increased due to the continued expansion of new transactions both for the Panasonic Group and for companies other than the Panasonic Group. Segment profit increased owing to the curbing of the depreciation of the yen and the increase in sales, as well as SG&A expenses.

As a result, the Procurement business recorded net sales of ¥108,632 million, up 33.2% year-on-year, and segment profit of ¥2,447 million, up 206.7% year-on-year.

―4―

3) Electronic Equipment Business

Reportable Segment	Business			Business Description
			Video, audio, communications, and measurement solutions, design and construction,
	Electronic		and maintenance engineering in various fields such as broadcasting, business,
	equipment		education, medical care/life sciences, public facilities, factory automation, security,
Electronic			and electronic measuring instruments
Equipment Business
		Development and manufacture of cashless payment terminals that combine our basic
	System equipment	digital and communications technologies with near-field communication (NFC)
	technologies and sales of overseas made payment terminals; application development;
			development, manufacture, sales of Individual Number authentication related devices
(Million yen)		Fiscal year ended March 31,	Fiscal year ended March 31,	Change (%)
		2022	2023
Net sales			20,546	23,835		16.0％
Electronic equipment		18,140	18,997		4.7％
System equipment			2,405	4,837		101.1％
Segment profit			426	579		36.0％

・Performance Overview

In the electronic equipment business, although equipment procurement difficulties continued due to a shortage of semiconductors, sales increased due to a gradual recovery in market conditions, including sales of ICT-related equipment and LED vision systems as a result of office relocations and renovations. In the system equipment business, sales increased due to the increase in sales of overseas made payment terminals resulting from the consolidation of CARDSERVICE INC. and higher demand for Individual Number authentication related devices and access control terminals for offices. Segment profit increased mainly due to higher sales.

As a result, the Electronic Equipment Business recorded net sales of ¥23,835 million, up 16.0% year-on-year, and segment profit of ¥579 million, up 36.0% year-on-year.

4) Environmental Energy Business

Reportable Segment	Business		Business Description
			Community coexistence-based operation and management services for the introduction
	Energy	and popularization of renewable energy from our own solar power stations (in Japan
			and overseas) and wind power stations, etc.
Environmental	Power producer	Electric power supply to public facilities and private-sector companies primarily using
renewable energy, and	electric power consulting including	local production and
Energy Business	and supplier (PPS)
consumption of the power for community revitalization
			Production and sale, as well as system consulting, of vegetables made in completely
	Vegetable factory	closed vegetable factories to commercial and retail markets including convenience
			stores, supermarkets, and food service chains
(Million yen)		Fiscal year ended March 31,	Fiscal year ended March 31,		Change (%)
		2022	2023
Net sales			9,437	15,117		60.2％
Energy			3,989	4,337		8.7％
Power producer and supplier (PPS)		4,248	9,615		126.3％
Vegetable factory			1,199	1,163		(3.0％)
Segment profit			236	397		67.8％
・Performance Overview

In the energy business, sales increased due to growth in power generation from new solar and wind power stations in Japan

―5―