Makita Corporation
Consolidated Financial Results
for the year ended March 31, 2019
(IFRS Financial Information)(English translation of "KESSAN TANSHIN"
originally issued in Japanese)

CONSOLIDATED FINANCIAL RESULTS
FOR THE YEAR ENDED MARCH 31, 2019 (Unaudited)
April 26, 2019

Makita Corporation
Stock code: 6586
URL: http://www.makita.co.jp/
Munetoshi Goto, President, Representative Director

1. Summary operating results of the year ended March 31, 2019 (From April 1, 2018 to March 31, 2019)(1) CONSOLIDATED OPERATING RESULTS
Yen (millions)
For the year ended
For the year ended
March 31, 2018
March 31, 2019%
Revenue .......................................................................
477,298
490,578
2.8
Operating profit ...........................................................
80,23178,305(2.4)
Profit before income taxes ...........................................
79,86579,9190.1
Profit............................................................................
55,45956,191
1.3
Profit attributable to owners of the parent ...................
54,94355,7501.5
Comprehensive income ...............................................
64,40235,592(44.7)
Yen
Profit attributable to
Owners of the parent per share(Basic) .....................................................................
202.39205.37(Diluted) ..................................................................
202.37205.34
Ratio of profit attributable to owners of the parent tototal equity attributable to owners of the parent ..........
10.4%
9.9%
Ratio of profit before income taxes to total assets .......
12.7%
12.0%
Ratio of operating profit to revenue ............................
16.8%
16.0%
Notes:
1. Amounts of less than one million yen have been rounded.
2. The table above shows the changes in the percentage ratio of revenue, operating profit, profit before income
taxes, profit attributable to owners of the parent, and comprehensive income against the corresponding period of
the previous year.
(2) SELECTED CONSOLIDATED FINANCIAL POSITION
Yen (millions)

Total assets ..................................................................
Total equity ..................................................................
Total equity attributable to owners of the parent .........
Ratio of equity attributable to owners of the parent tototal assets (%) ............................................................

As ofMarch 31, 2018
654,841
558,439554,046

As ofMarch 31, 2019
680,250
577,222572,748

84.6%

84.2%
Yen

Equity attributable to owners of the parent per share ..

2,040.93

2,109.83(3) CONSOLIDATED CASH FLOWS
Yen (millions)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
Net cash provided by operating activities....................
Net cash used in investing activities ............................
Net cash used in financing activities ...........................
Cash and cash equivalents, end of the fiscal year ........

English Translation of "KESSAN TANSHIN" originally issued in Japanese

34,191(15,708)(17,743)
147,320

23,155(15,329)(8,231)
146,5121

2. Dividend Information
Yen

Cash dividend per share:
Interim ....................................................................
Year-end ..................................................................
Total ........................................................................

For the year
ended March 31,
2018

For the year
ended March 31,
2019

For the year
ending March
31, 2020(Forecast)

10.00
51.00
61.00

10.00
52.00
62.00

10.00
(Note)(Note)Yen (millions)
Total cash dividend ......................................................
16,56016,831Dividend payout ratio (%) ...........................................
30.1%
30.2%
Ratio of equity attributable to owners of the parent tototal assets (%) ............................................................
3.0%
3.0%
Note: While the Corporation has set forth under the Articles of Corporation of the Corporation that the record date forthe payment of dividend shall be the last day of a relevant period, at the present time, the projected amount ofdividends as of the said record date has not been determined yet. For further details, refer to “(5) Basic policy
regarding profit distribution and cash dividend” on page 7.
3. Consolidated Financial Performance Forecast for the year ending March 31, 2020
(From April 1, 2019 to March 31, 2020)
Yen (millions)
For the year ending
March 31, 2020
Revenue..................................................................................................
Operating profit ......................................................................................
Profit before income taxes......................................................................
Profit attributable to owners of the parent ..............................................

500,000
72,00072,70050,000

%
1.9
(8.1)
(9.0)
(10.3)

Yen
Profit attributable to owners of the parent per share ..............................

English Translation of "KESSAN TANSHIN" originally issued in Japanese

184.182

4. Others(1) Changes in important subsidiaries for the fiscal year (Changes in specified subsidiaries accompanied by changes inscope of consolidation): None
(2) Changes in accounting policies:
1. Changes in accounting policies required by IFRS: None
2. Changes in accounting policies other than 1: None
3. Changes in accounting estimate: None
(3) Number of shares outstanding (common stock)
1. Number of shares issued (including treasury stock):
2. Number of treasury stock:
3.Average number of shares outstanding:

As of March 31, 2019:
As of March 31, 2018:
As of March 31, 2019:
As of March 31, 2018:
For the year ended March 31, 2019:
For the year ended March 31, 2018:

280,017,520
280,017,520
8,550,463
8,549,592
271,467,574
271,465,951

Makita’s earnings releases (KESSAN TANSHIN) are not subject to an audit.
Explanation regarding proper use of business forecasts, and other significant matters
Regarding the assumptions for the forecasts and other matters, refer to “(4) Outlook for the fiscal year ending
March 31, 2020” on page 6. The financial forecast given above is based on information as available at the present
time, and includes potential risks and uncertainties. As a consequence of the factors above and other, actual results
may vary from the forecasts provided above.

English Translation of "KESSAN TANSHIN" originally issued in Japanese31. Overview of operating results(1) Overview of operating results for the fiscal year ended March 31, 2019
We have adopted International Financial Reporting Standards (hereinafter “IFRS”) instead of accounting
principles generally accepted in the United States of America (hereinafter “U.S. GAAP”) from the beginning of the
fiscal year ending March 31, 2019. In addition, financial figures for the year ended March 31, 2018, which was
prepared in accordance with U.S. GAAP in the reporting of those previous periods, are also reclassified inaccordance with IFRS and used in the comparative analysis.
Looking at the global economic situation for the year ended March 31, 2019, the economy gradually expanded,supported by a strong employment and income situation and robust business performance in developed countries,
principally the U.S. However, there were growing concerns over the slowing global economy and uncertainties
about the future because of escalating tensions between the U.S. and China over trade and a decline inemerging-country currencies.
Under these circumstances, on the development side, the Makita Group concentrated its efforts on expanding
lithium-ion battery product lines, such as cordless tools with equal or better work efficiency than AC-powered ones,
and cordless gardening equipment, such as grass cutters or steel deck-type lawnmowers with performance equal toengine-powered products. Moreover, we established a technology development base in South Korea to enhance ourcapability to develop electrical technologies and accelerate development speed.
On the production side, we continued to implement measures including the promotion of multi-polarized global
production, cost reduction through local procurement of components, and introduction of labor-saving or unmanned
facilities.
On the sales side, we focused on expanding the sales of lithium-ion battery products, such as cordless gardening
equipment. Furthermore, we worked hard to strengthen our community- and customer-based sales network by
increasing sales and after-sales service bases.
Our consolidated revenue for this period increased by 2.8% from the previous year to 490,578 million yen,record-high sales, due to robust sales primarily in Japan, although the value of overseas net sales translated into yen
was eroded by a fall in emerging-country currencies. Operating profit decreased by 2.4% to 78,305 million yen(operating profit ratio: 16.0%), owing to the deterioration of the cost-of-sales ratio due to the impact of the exchange
rate, although net sales increased. Meanwhile, profit before income taxes increased by 0.1% to 79,919 million yen(profit before income taxes ratio: 16.3%) and profit attributable to owners of the parent increased by 1.5% to 55,750
million yen (ratio of profit attributable to owners of the parent: 11.4%).
Consolidated revenue by region are as follows:
Consolidated revenue in Japan increased by 11.6% to 92,129 million yen compared to the previous year. This was
because sales of power tools and gardening equipment, particularly lithium-ion battery products, continued to bestrong.
Consolidated revenue in Europe increased by 5.5% to 213,238 million yen, supported by solid demand for power
tools in almost all areas and steady sales growth of cordless products, although sales of gardening equipment
stagnated due to an extremely hot summer and droughts.
Consolidated revenue in North America decreased by 1.8% to 72,508 million yen, although we tried to expand
sales, mainly lithium-ion battery products, amid intensifying competition.
Consolidated revenue in Asia decreased by 7.2% to 40,909 million yen. This was due to sluggish sales in countries
other than China and India where the sales were robust.
Consolidated revenue in Central and South America decreased by 0.4% to 27,801 million yen. This was due to a
sharp depreciation in each country’s currency against the yen compared to the same period of the previous year,
although sales in almost all countries remained robust.
In Oceania, sales continued growing at a level as high as the previous year, although the housing market, which had
been overheated, showed signs of slowing down. However, consolidated revenue declined by 3.4% to 30,222 million
yen due to the yen’s appreciation against local currencies.
Consolidated Revenue in the Middle East and Africa decreased by 11.1% to 13,771 million yen. This was due topoor sales amid political and economic turmoil in the Middle East.

English Translation of "KESSAN TANSHIN" originally issued in Japanese4(2) Overview of financial situation for the fiscal year ended March 31, 2019
Total assets as of the end of the year increased by 25,409 million yen to 680,250 million yen compared to theprevious year. The increase was mainly due to the increase in “Inventories”.
Total liabilities increased by 6,626 million yen to 103,028 million yen compared to the previous year. This increase
was mainly due to the increase in “Borrowings”.
Total equity increased by 18,783 million yen to 577,222 million yen compared to the previous year. This increase
was due to the increase in “Retained earnings”.
(3) Overview of cash flow situation for the fiscal year ended March 31, 2019
Total cash and cash equivalents amounted to 146,512 million yen, decreased by 808 million yen compared to theend of the previous year.
Net cash provided by operating activities amounted to 23,155 million yen (34,191 million yen in the previousyear), down 11,036 million yen over the previous year.
Net cash used in investing activities amounted to 15,329 million yen (15,708 million yen in the previous year),down 379 million yen over the previous year, due to a decrease in payments into time deposits, despite an increase inpurchase of non-current assets.
Consequently, free cash flows (the sum of cash flows from operating activities and investing activities)
amounted to 7,826 million yen (18,484 million yen in the previous year), down 10,658 million yen over the previous
year.
Net cash used in financing activities amounted to 8,231 million yen (17,743 million yen in the previous year),down 9,512 million yen over the previous year, due to an increase in proceeds from loans payable.

English Translation of "KESSAN TANSHIN" originally issued in Japanese5(4) Outlook for the fiscal year ending March 31, 2020
In the future, the Makita Group expects that the prospect for the global economy, including markets where it haspresence, will continue to be uncertain, as the international political situation is likely to remain deadlocked.
Meanwhile, the Group believes that demand for products and services that contribute to the solution of social
problems, such as the labor shortage and environment conservation, will increase further.
To cope with these assumed conditions, Makita will:・ Strengthen its R&D and product development capabilities, mainly rechargeable batteries and motors, to takethe initiative in expanding the market of cordless products;
・ Position cordless gardening tools as a future pillar of its business after power tools and focus its efforts on thedevelopment and sales expansion of new products;
・ Implement measures to strengthen and improve the efficiency of production, procurement and distribution,
while further upgrading global production organizations; and・ Strive to raise its brand power by promoting the establishment of a sales and after-sales service network tooffer community-based and fine-tuned response to needs of customers around the world.
On the basis of these factors, the Group will strive to maintain a solid presence in the industry as a global
supplier of power tools used in home-building and in everyday life.
Consolidated Financial Performance Forecast for the Year Ending March 31, 2020.
Yen (millions)
For the year ending
March 31, 2020
Revenue .....................................................................................................
Operating profit ..........................................................................................
Profit before income taxes .........................................................................
Profit attributable to owners of the parent..................................................

500,000
72,00072,70050,000[Preconditions]
The above forecast is based on the assumption of exchange rates of 110 yen to the U.S. dollar, 125 yen to the euro
and 16.3 yen to the renminbi.
[Reference]
The actual exchange rate for the year ended March 31, 2019 was 110.92 yen to the U.S. dollar, 128.44 yen to the euro
and 16.54 yen to the renminbi.
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements based on Makita's own projections and estimates. The power
tools market, where Makita is mainly active, is subject to the effects of rapid shifts in economic conditions, demandfor housing, currency exchange rates, changes in competitiveness, and other factors. Due to the risks anduncertainties involved, actual results could differ substantially from the content of these statements. Therefore, thesestatements should not be interpreted as representation where such objectives will be achieved.

English Translation of "KESSAN TANSHIN" originally issued in Japanese6(5) Basic policy regarding profit distribution and cash dividend for the fiscal 2019 and 2020
Makita's basic policy on the distribution of profits is to maintain a consolidated dividend payout ratio of 30% or
greater, with a lower limit on annual cash dividends of 10 yen per share. However, in the event special
circumstances arise, computation of the amount of dividends will be based on consolidated net income attributable
to Makita Corporation after certain adjustments. With respect to repurchases of its outstanding shares, Makita aims
to implement a flexible capital policy, augment the efficiency of its capital employment, and thereby boost
shareholder profit. Also Makita continues to consider execution of own share repurchases in light of trends in stock
prices.
Makita intends to maintain a financial position strong enough to withstand the challenges associated withchanges in its operating environment and other changes and allocate funds for strategic investments aimed at
expanding its global operations.
Our forecast for dividends is as follows;
For the year ended
March 31, 2019
(Result and Forecast)

For the year ending
March 31, 2020
(Forecast)

Cash dividend per share:
Interim ......................................................................

10.00 yen

10.00 yen

Year-end ....................................................................

52.00 yen

(Note)(Note)
Total ..........................................................................
62.00 yen
Note: The Board of Directors plans to meet in April 2020 for a report on earnings for the year ending March 31, 2020.
At such time, in accordance with the basic policy regarding profit distribution mentioned above, the Board of
Directors plans to propose a dividend equivalent to at least 30% of profit attributable to owners of the parent.
The Board of Directors will submit this proposal to the General Meeting of Shareholders scheduled for June
2019. However, if certain special circumstances arise, computation of the amount of dividends will be based on
consolidated net income attributable to Makita Corporation after certain adjustments.

The consolidated dividend payout ratio is calculated as annual dividends per share divided by consolidated
net income attributable to Makita Corporation per share (after adjustments for special circumstances) andmultiplied by 100.
2. Basic Rationale for Selection of Accounting Standards
Makita will voluntarily adopt International Financial Reporting Standards (IFRS) from the first three-month periodof the year ending March 31, 2019.

English Translation of "KESSAN TANSHIN" originally issued in Japanese74. Consolidated Financial Statements (Unaudited)(1) Consolidated Statement of Financial Position
As of April 1, 2017
Composition ratio

Yen (millions)
As of March 31, 2018

As of March 31, 2019

Composition ratio

Composition ratio

ASSETS
CURRENT ASSETS:
Cash and cash equivalents ..............................

142,181

147,320

146,512Trade receivables and other receivables .........

67,262

78,98879,450Inventories ......................................................

167,523

196,454219,938

Other financial assets......................................

50,11248,03737,828Prepaid expenses and other current assets ......

6,682

8,663

9,401

Total current assets ......................................

433,760

72.3%

479,46273.2%

493,129

72.5%

NON-CURRENT ASSETS:
Property, plant and equipment, at cost ............

95,488100,813

112,441

Goodwill and intangible assets .......................

6,637

6,991

8,039

Other financial assets......................................

43,80045,561

43,566Retirement benefit asset .................................

8,382

9,729

9,541

Deferred income taxes ....................................

9,169

10,049

9,342

Other non-current assets .................................

2,317

2,236

4,192

Total non-current assets...............................

165,79327.7%

175,37926.8%

187,121

27.5%

Total assets ............................................................

599,553

100.0%

654,841100.0%

680,250

100.0%English Translation of "KESSAN TANSHIN" originally issued in Japanese8As of April 1, 2017
Composition ratio

Yen (millions)
As of March 31, 2018

As of March 31, 2019

Composition ratio

Composition ratio

LIABILITIES AND EQUITY
LIABILITIESCURRENT LIABILITIES:
Trade payables and other payables .................

33,46035,02438,904

Borrowings .....................................................

6,564

3,361

11,799Other financial liabilities ................................

284

429

220

Income taxes payable .....................................

7,264

10,071

7,153

Provisions .......................................................

3,412

2,928

3,040

Other current liabilities ...................................

24,89929,29429,678

Total current liabilities ................................

75,883

12.7%

81,107

12.4%

90,794

13.3%

NON-CURRENT LIABILITIES:
Retirement benefit liabilities .............................

3,161

3,206

3,231

Other financial liabilities ................................

18

133

256

Provisions .......................................................

1,440

1,352

1,293

Deferred income taxes ....................................

10,738

10,388

7,236

Other non-current liabilities ...........................

234

216

218

Total non-current liabilities .........................

15,591

2.6%

15,295

2.3%

12,234

1.8%

Total liabilities.......................................................

91,47415.3%

96,40214.7%

103,028

15.1%

EQUITY
Common stock................................................

23,80523,80523,805Additional paid-in capital ...............................

45,50145,53145,571Retained earnings ...........................................

427,999469,232

508,622

Treasury stock, at cost ....................................

(11,623)(11,617)(11,681)

Other components of equity ...........................

18,55727,095

6,431

Total equity attributable to owners of the parent ...

504,23984.1%

554,046

84.6%

572,748

84.2%

NON-CONTROLLING INTEREST.....................

3,840

0.6%

4,393

0.7%

4,474

0.7%

Total equity ...........................................................

508,07984.7%

558,43985.3%

577,22284.9%

Total liabilities and equity .....................................

599,553

100.0%

654,841100.0%

680,250

100.0%English Translation of "KESSAN TANSHIN" originally issued in Japanese9(2) Consolidated Statements of Profit or Loss and Consolidated Statements of Comprehensive Income
Consolidated Statements of Profit or Loss
Yen (millions)
For the year ended
For the year ended
March 31, 2019
March 31, 2018
Composition ratio

Composition ratio

REVENUE ..............................................................................

477,298 100.0%

490,578 100.0%

Cost of sales ............................................................................

(301,392) (63.1%)(313,356) (63.9%)

GROSS PROFIT .....................................................................

175,906

177,222

Selling, general, administrative and others, net .......................

(95,675) (20.1%)(98,917) (20.1%)

OPERATING PROFIT ............................................................

80,23178,305

Financial income .....................................................................

3,180

2,680

Financial expenses...................................................................

(3,546)(1,066)

PROFIT BEFORE INCOME TAXES .....................................

79,865

Income tax expenses................................................................

(24,406)

PROFIT ...................................................................................

55,45911.6%

56,191

11.5%

Owners of the parent ...............................................................

54,943

11.5%

55,75011.4%

Non-controlling interests .........................................................

516

0.1%

441

0.1%

36.9%
16.8%

16.7%

36.1%
16.0%

79,91916.3%(23,728)

Profit attributable to:Consolidated Statements of Comprehensive Income
Yen (millions)
For the year ended
For the year ended
March 31, 2019
March 31, 2018
55,45956,191Remeasurement of defined benefit plans.................................

(1,098)(7,889)Equity financial goods measured at fair value through othercomprehensive loss .................................................................

188

(87)

Total of items that will not be reclassified to loss .......................

(910)(7,976)

Exchange differences on translating foreign operations ..........

9,853(12,623)

Total of items that may be reclassified to profit (loss) ................

9,853(12,623)

Total other comprehensive income (loss), net of tax ...................

8,943(20,599)

COMPREHENSIVE INCOME ...................................................

64,40235,592

Owners of the parent ...............................................................

63,66935,286

Non-controlling interests .........................................................

733

306

INCOME .....................................................................................
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX

Items that will not be reclassified to income (loss)

Items that may be reclassified to profit or loss

Comprehensive income attributable to:English Translation of "KESSAN TANSHIN" originally issued in Japanese10

(3) Consolidated Statement of Changes in Equity
Yen (millions)
For the year ended March 31, 2018
Equity attributable to owners of the parent

Balance at April 1, 2017

Commonstock

Additional
paid-in
capital23,80545,501Retainedearnings

Profit for the period

Other
componentsof equity

Treasurystock

427,999(11,623)--

Comprehensive income
Dividends paid

54,943-

Disposal of treasury stock(11)

Share-based paymenttransaction

41

Transfer from othercomponents of equity toretained earnings

188

Other increase or decrease(53)

Total amounts of transactions
with owners

Total
equity3,840

508,079

54,943516

55,459

8,726

8,726

217

8,943

8,726

63,669733

64,402(13,845)(180)(14,025)(13,845)

Purchase of treasury stockTotal

504,239

54,943

Other comprehensive income

Balance at March 31, 2018

18,557

NonControllinginterest

(5)

(5)

(5)

11

0

0

41

41

-

-

(53)

(53)

(188)

-

30

(13,710)6(188)(13,862)(180)(14,042)

23,80545,531

469,232(11,617)

27,095554,046

4,393

558,439

Yen (millions)
For the year ended March 31, 2019
Equity attributable to owners of the parent

Balance at April 1, 2018

Commonstock

Additional
paid-in
capital23,80545,531Retainedearnings

Profit for the period

Other
componentsof equity

Treasurystock

469,232(11,617)--

Dividends paid

55,750

Disposal of treasury stock0

Share-based paymenttransaction

40

Transfer from othercomponents of equity toretained earnings

558,439

55,750441

56,191(20,464)(20,464)(135)(20,599)(20,464)

35,286306

35,592(16,560)(225)(16,785)

(4)

(4)

(4)

0

0

0

40

40

-

-

(60)

(60)

200

(200)
(60)

Other increase or decrease

Balance at March 31, 2019

4,393

(16,560)

Purchase of treasury stock

Total amounts of transactions
with owners

-

Total
equity554,046

55,750

Other comprehensive income
Comprehensive income

27,095

NonControllinginterest

Total

-

40

(16,360)

(64)

(200)

(16,584)(225)(16,809)23,80545,571

508,622(11,681)

6,431

572,748

4,474

577,222

English Translation of "KESSAN TANSHIN" originally issued in Japanese11(4) Consolidated Statements of Cash Flows
Yen (millions)
For the year ended
For the year ended
March 31, 2019
March 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:Profit.....................................................................................................

55,45956,191

Depreciation and amortization .............................................................

10,783

11,271

Income tax expenses.............................................................................

24,40623,728Financial income and expenses ............................................................

366(1,614)

Loss (gain) on sales and retirement of property, plant and equipment .

18

113

Decrease (increase) in trade receivables and other receivables ............

(11,187)(2,085)

Increase in inventories ..........................................................................

(24,289)(30,455)

Increase (decrease) in trade payables and other payables.....................

2,495

2,581

Increase in retirement benefit assets and liabilities ..............................

(1,433)395

Increase in guarantee deposits ..............................................................

-(8,990)

Other.....................................................................................................

(3,103)(4,487)

Subtotal ..........................................................................................

53,51546,648Dividends received ...............................................................................

497

643

Interest received ...................................................................................

2,409

2,004

Interest paid ..........................................................................................

(43)

(47)

Income taxes paid .................................................................................

(22,187)(26,093)

Cash flows from operating activities ..............................................

34,191

23,155Purchase of non-current assets .............................................................

(15,045)(23,867)

Proceeds from sales of non-current assets ............................................

496

382

Purchase of investments .......................................................................

(8,743)(12,745)

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sales and redemption of investments ...............................

16,193

5,634

Payments into time deposits .................................................................

(51,010)(31,902)

Proceeds from withdrawal of time deposits .........................................

42,37447,758Other.....................................................................................................

27

(589)

Cash flows from investing activities ..............................................

(15,708)(15,329)

CASH FLOWS FROM FINANCING ACTIVITIES:Net increase (decrease) in short-term borrowings ..............................

(3,667)

8,704

Purchase and sales of treasury stock, net..............................................

(5)

(4)

Cash dividends paid .............................................................................

(13,845)(16,560)

Other.....................................................................................................

(226)

(371)

Cash flows from financing activities ..............................................

(17,743)(8,231)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS.......................................................................

4,399

(403)

NET CHANGE IN CASH AND CASH EQUIVALENTS ..................

5,139

(808)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR .......

142,181

147,320

CASH AND CASH EQUIVALENTS, END OF YEAR .....................

147,320

146,512English Translation of "KESSAN TANSHIN" originally issued in Japanese12

5. Notes to Consolidated Financial Statements
Notes on the assumptions for a going concern: None
Segment Information
Yen (millions)
For the year ended March 31, 2018
North
Asia
Total
Other area
America

Eliminations

Consolidated

65,6101,560(426,283)

477,298-

836,411

67,170(426,283)

477,298

77,697

5,483(2,949)80,231

Yen (millions)
For the year ended March 31, 2019
North
Asia
Total
Other area
America

Eliminations

Consolidated

Japan

Europe(2) Inter-segment ........

106,862
202,827

202,364
4,811

76,324
4,388

26,138
212,697

411,688424,723

Total .................

309,689

207,175

80,712

238,835

Operating profit .............

31,671

19,211

2,250

24,565

Revenue:(1) Externalcustomers ................

Japan

Europe(2) Inter-segment ........

112,143
220,111

213,903
5,902

74,854
3,941

26,414
220,999

427,314450,953

63,264806(451,759)

490,578-

Total .................

332,254219,805

78,795

247,413878,267

64,070(451,759)

490,578

Operating profit .............

32,33018,424267

23,094

74,115

5,715(1,525)78,305

Revenue:(1) Externalcustomers ................

Revenue by product categories
Yen (millions)
For the year ended
For the year ended
March 31, 2018
March 31, 2019
Composition ratio

Finished goods.............................................................
Parts, repairs and accessories ......................................
Total revenue...........................................................

399,240
78,058477,298

English Translation of "KESSAN TANSHIN" originally issued in Japanese

83.6
16.4
100.0

Composition ratio

408,165
82,413
490,578

83.2
16.8
100.0

Increase(Decrease)
(%)

2.2
5.6
2.8

13

Information per share
Yen

Equity attributable to owners of the parent per
share ..........................................................................

As ofMarch 31, 2018

As ofMarch 31, 2019

2,040.93

2,109.83
Yen

For the year ended
March 31, 2018
Profit attributable to owners of the parent per share(Basic) .......................................................................
(Diluted) ....................................................................

202.39202.37For the year ended
March 31, 2019
205.37205.34

Note: Profit attributable to owners of the parent per share (Basic) is calculated on the basis of the average number ofshares outstanding during the year. Average number of shares outstanding is as follows:
For the year ended March 31, 2018: 271,465,951
For the year ended March 31, 2019: 271,467,574
Profit attributable to owners of the parent per share (Diluted) is calculated by adjusting for all dilutive potential
ordinary shares having a dilutive effect.
Significant Subsequent Events: None

English Translation of "KESSAN TANSHIN" originally issued in Japanese14First-time Adoption of IFRSThe Makita Group has disclosed quarterly consolidated financial statements prepared in accordance with IFRS
from the three-month period ended June 30, 2018. The Group prepared the latest consolidated financial statements
prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”)
for the year ended March 31, 2018. The IFRS transition date is April 1, 2017.
(1) Exemptions of Retrospective Adoption of IFRS 1IFRS 1 “First-time Adoption of International Financial Reporting Standards” (“IFRS 1”) requires an entity that
adopts IFRS for the first time to prepare a complete set of financial statements based on IFRS retrospectively to priorperiods. However, IFRS 1 provides mandatory exceptions and voluntary exemptions from full retrospective application.
The effects of applying these provisions are adjusted in retained earnings or other components of equity on thetransition date.
The main exemptions adopted by the Company are as follows:・Business combinations
IFRS 1 allows an entity not to apply IFRS 3 “Business Combinations” (“IFRS 3”) retrospectively to businesscombinations that occurred prior to the transition date.
The Makita Group chose not to apply IFRS 3 retrospectively to business combinations that occurred prior to thetransition date. Consequently, the Group recognized goodwill arisen from business combinations that occurred prior to
the transition date at book value based on U.S. GAAP. Makita performed impairment tests on the goodwill at thetransition date regardless of whether there was any indication that the goodwill may be impaired.
・Exchange differences on translating foreign operations
IFRS 1 allows an entity to choose to deem the cumulative amount of the exchange differences on translating
foreign operations to be zero as of the transition date. The Makita Group deemed the cumulative amount of theexchange differences on translating foreign operations to be zero on the transition date.
・Designation of financial instruments recognized prior to the IFRS transition date
IFRS 1 allows an entity to designate financial instruments valued at fair value through other comprehensive incomein accordance with IFRS 9 “Financial Instruments,” based on facts and circumstances that existed as of the transition
date. The Makita Group designated its financial instruments based on the circumstances as of the transition date.
(2) Mandatory Exceptions of Retrospective Adoption of IFRS 1IFRS 1 prohibits an entity from retrospectively applying IFRS with respect to “Accounting estimates,”“Derecognition of financial assets and liabilities,” “Non-controlling interest,” and “Classification and measurement offinancial assets.” The Makita Group has applied the relevant IFRSs to these transactions prospectively from thetransition date.

English Translation of "KESSAN TANSHIN" originally issued in Japanese15

(3) Reconciliation
In preparing the consolidated financial position statement on the IFRS transition date, the Makita Group hasreconciliated amounts in consolidated financial statements prepared based on U.S. GAAP.
The effects of the transition from U.S. GAAP to IFRS on the Group’s financial position, financial results, and cash
flow position are presented in the following table:
Reconciliation of equity on the transition date (April 1, 2017)
Yen (millions)

Presentation under U.S.GAAP

U.S.
GAAP

Reclassification

Difference
betweenrecognition
andmeasurement

IFRS

Note

ASSETSASSETS
CURRENT ASSETS:

CURRENT ASSETS:
Cash and cash equivalents
Time deposits
Short-term investments
Notes
Accounts
Less- Allowance for doubtfulreceivables

Inventories
Deferred income taxes
Prepaid expenses and othercurrent assets
Total current assets

Presentation under IFRS

142,181
34,32923,441
1,199
67,08634,329)23,441)
1,199)
67,086)-142,181-

1,137)

1,137

-

-

167,398
4,723

67,26250,112
4,723)

125-

67,262
167,523
50,112-

13,349452,569

183)
12,450)6,484)
6,359)

6,682
433,760

Cash and cash equivalents

Trade receivables and otherreceivables
Inventories

E
E
D

Other financial assets
Prepaid expenses and othercurrent assets
Total current assets
NON-CURRENT ASSETSPROPERTY, PLANT AND
EQUIPMENT, AT COST:Land
Building and improvements
Machinery and equipment
Construction in progressLess-Accumulated
depreciation andamortization
Total net property, plant andequipment
INVESTMENTS AND OTHERASSETS:
Investments
Goodwill
Other intangible assets, net

Deferred income taxes
Other assets
Total assets

22,35894,92791,493
5,531

22,358)94,927)91,493)5,531)--

119,802)

119,802---

94,507981

95,48834,004721
3,641

34,004)721)
3,641)--

650
11,157
144,680
597,249

3,735
42,982
8,385
4,723
8,703)
12,756
306

2,902
818
3)
3,796
137)
8,357
1,998

6,637
43,800
8,382
9,169
2,317
165,793599,553

English Translation of "KESSAN TANSHIN" originally issued in Japanese

Property, plant andequipment

A
E
B
D,E

Goodwill and intangible
assetsOther financial assets
Retirement benefit asset
Deferred income taxes
Other non-current assets
Total non-current assets
Total assets

16Yen (millions)

Presentation under
U.S.GAAP

U.S. GAAP

Reclassification

Difference
betweenrecognition
andmeasurement

IFRS

Note

LIABILITIESLIABILITIESCURRENT LIABILITIES:CURRENT LIABILITIES:
Short-term borrowings
Trade notes and accounts
payableOther payables
Accrued expenses
Accrued payroll
Income taxes payable
Deferred income taxes
Other liabilities
Total current liabilities
LONG-TERM
LIABILITIES:Long-term indebtedness
Accrued retirement andtermination benefits

Deferred income taxes
Other liabilities
Total long-term liabilities
Total liabilities

6,579

(15)

-

6,564

26,347
7,122
10,537
9,431
6,944
3,134
8,178
78,272

7,113(7,122)(10,537)(9,431)284
320(3,134)
3,412
16,273(2,837)448
448

33,460
284
7,264
3,412
24,89975,883

18

(18)

-

-

3,161
8,313

18
1,440
3,143

(718)

3,161
18
1,440
10,738

1,674
13,16691,438(1,440)
3,143
306

(718)
(270)

234
15,591
91,474

Borrowings
Trade payables and otherpayablesE

Additional paid-in capital
Legal reserve
Retained earnings
Treasury stock, at cost
Accumulated othercomprehensive income(loss)
Total Makita Corporation
shareholders’ equity
NON-CONTROLLINGINTEREST
Total equity
Total liabilities and equity

Other financial liabilities
Income taxes payable

E
Provisions
Other current liabilities
Total current liabilities
NON-CURRENT
LIABILITIES:
Retirement benefit
liabilities

E

Other financial liabilities
Provisions

E

Deferred tax liabilities
Other non-current
liabilities
Total non-current liabilities
Total liabilities

EQUITYMAKITA CORPORATIONSHAREHOLDERS’
EQUITY:
Common stock

Presentation under IFRSEQUITY

23,80545,501
5,669
456,546(11,623)(5,669)(29,516)-969-

23,80545,501
427,999(11,623)(17,728)

34,986

1,299

18,557502,170

(199)

2,268

504,2393,641
505,811597,249

199
306

2,268
1,998

3,840
508,079
599,553

English Translation of "KESSAN TANSHIN" originally issued in Japanese

Common stock
Additional paid-in capital

A,B,C,D

Retained earnings
Treasury stock, at cost

B,C

Other components of equity

C

Total equity attributable toowners of the parent
NON-CONTROLLINGINTEREST
Total equity
Total liabilities and equity

17

Reconciliation of equity as of March 31, 2018
Yen (millions)

Presentation under
U.S.GAAP

U.S. GAAP

Reclassification

Difference
betweenrecognition
andmeasurement

IFRS

Note

ASSETS

CURRENT ASSETS:

CURRENT ASSETS:
Cash and cash equivalents
Time deposits
Short-term investments
Notes
Accounts
Less- Allowance for
doubtful receivables

Inventories
Prepaid expenses andother current assets
Total current assets

Presentation under IFRSASSETS

147,320
43,013
14,782
1,343
79,09243,013)
14,782)
1,343)
79,092)-

147,320-

1,340)

1,340

-

-

196,217-78,98848,037237-

78,988
196,454
48,037

16,150496,577

43)
9,908)

7,444)
7,207)

8,663
479,462

Cash and cash equivalents

Trade receivables and otherreceivables
Inventories

E
D

Other financial assets
Prepaid expenses and othercurrent assets
Total current assets
NON-CURRENT ASSETSPROPERTY, PLANT AND
EQUIPMENT, AT COST:

22,626

22,626)--

98,64898,868
6,027

98,648)98,868)6,027)--

126,305)

126,305---

99,864949

100,813

Goodwill

33,815721

33,815)721)--

Other intangible assets, net

3,944

3,944)--

3,975
12,135
154,454
651,031

4,033
44,621
9,564
9,755)
9,983
75

2,958
940
165
6,074
144)
10,942
3,735

6,991
45,561
9,729
10,0492,236
175,379
654,841

Land
Building andimprovements
Machinery and equipment
Construction in progressLess-Accumulated
depreciation andamortization
Total net property, plant andequipment
INVESTMENTS AND
OTHER ASSETS:
Investments

Deferred income taxes
Other assets
Total assets

English Translation of "KESSAN TANSHIN" originally issued in Japanese

Property, plant andequipment

A
E
B
D

Goodwill and intangible
assetsOther financial assets
Retirement benefit asset
Deferred income taxes
Other non-current assets
Total non-current assets
Total assets

18

Yen (millions)

Presentation under
U.S.GAAP

U.S. GAAP

Reclassification

Difference
betweenrecognition
andmeasurement

IFRS

Note

LIABILITIESLIABILITIESCURRENT LIABILITIES:CURRENT LIABILITIES:
Short-term borrowings
Trade notes and accounts
payableOther payables
Accrued expenses
Accrued payroll
Income taxes payable
Other liabilities
Total current liabilities
LONG-TERM
LIABILITIES:
Accrued retirement andtermination benefits

Deferred income taxes
Other liabilities
Total long-term liabilities
Total liabilities

3,411

50)

-

3,361

28,156
7,131
11,952
10,731
9,720
9,497
80,5986,868
7,131)
11,952)
10,731)
429
351
2,928
19,36375434
434

35,024429
10,071
2,928
29,294
81,107

3,206
9,391

133
1,352
-

997

3,206
133
1,352
10,3881,703
14,30094,898

1,485)
75

2)
995
1,429

216
15,29596,402

Borrowings
Trade payables and otherpayablesE

Additional paid-in capital
Legal reserve
Retained earnings
Treasury stock, at cost
Accumulated othercomprehensive income(loss)
Total Makita Corporation
shareholders’ equity
NON-CONTROLLINGINTEREST
Total equity
Total liabilities and equity

Other financial liabilities
Income taxes payable
Provisions
Other current liabilities
Total current liabilities
NON-CURRENT
LIABILITIESRetirement benefit
liabilities

E

Other financial liabilities
Provisions
Deferred tax liabilities
Other non-current
liabilities
Total non-current liabilities
Total liabilities

EQUITYMAKITA CORPORATIONSHAREHOLDERS’
EQUITY:
Common stock

Presentation under IFRSEQUITY

23,80545,531
5,669
497,456
11,617)

5,669)
29,044)-820-

23,80545,531
469,232
11,617)

8,905)

34,514

1,486

27,095551,939

199)

2,306

554,046

4,194
556,133
651,031

199
75

2,306
3,735

4,393
558,439
654,841

English Translation of "KESSAN TANSHIN" originally issued in Japanese

Common stock
Additional paid-in capital

A,B,C,D

Retained earnings
Treasury stock, at cost

B,C

Other components of equity

C

Total equity attributable toowners of the parent
NON-CONTROLLINGINTEREST
Total equity
Total liabilities and equity

19

Reconciliation of profit and loss for the year ended March 31, 2018 (April 1, 2017 to March 31, 2018)
Yen (millions)

Presentation under
U.S.GAAP

U.S. GAAP
477,298(302,173)
175,125

Reclassification
159
159

95,363)79,762Difference
betweenrecognition
andmeasurement

IFRS
477,298(301,392)
175,906

Note

622
622

B

Cost of sales

(563)
(404)

251
873

95,675)80,231A,B

GROSS PROFIT
Selling, general, administrativeand others, net

2,919
43)

3,218
3,302)
2,919)
43

38)
244)
-

3,180
3,546)-

FF

3,235)

3,235

-

-

Valuation losses on securities

299
24)

299)
24

-

-

INCOME BEFORE INCOME
TAXES

79,678(404)

591

79,865(24,943)536(24,407)
55,271

404
404
-

(948)
545
403
188

(25,487)
1,081(24,406)
55,459NET SALES
Cost of sales
GROSS PROFIT
Selling, general, administrativeand others, net
OPERATING INCOME
OTHER INCOME(EXPENSE):

Interest and dividend income
Interest expense
Exchange losses on foreign
currency transactions, net
Realized gains on securities,
net

Presentation under IFRSREVENUEOPERATING PROFIT

Financial income
Financial expenses

PROFIT BEFORE INCOME
TAXES

Income tax expense:
Current
Deferred
NET INCOME

D

Income tax expenses
PROFIT
Profit attributable to:

NET INCOME
ATTRIBUTABLE TO
MAKITA CORPORATION
Less-Net income attributable
to the non-controllinginterest

54,755-

188

54,943

516

-

-

516

English Translation of "KESSAN TANSHIN" originally issued in Japanese

Owners of the parent

Non-controlling interests

20

Reconciliation of comprehensive income for the year ended March 31, 2018 (April 1, 2017 to March 31, 2018)
Yen (millions)

Presentation under
U.S.GAAPNET INCOME
OTHER COMPREHENSIVEINCOME (LOSS), NET OF
TAX

U.S. GAAP
55,271

Reclassification-

Difference
betweenrecognition
andmeasurement

188

IFRS
55,459Note

Presentation under IFRSINCOMEOTHER COMPREHENSIVEINCOME (LOSS), NET OF
TAX

Unrealized holding expense
on available-for-salesecurities

1,364)-

266

1,098)

Pension liability adjustment

544

-

356)

188

Items that will not bereclassified to profit (loss)
Equity financial assets
measured at fair value
through othercomprehensive loss
Remeasurement of defined
benefit pension plans

820)

-

90

910)

Total of items that will not bereclassified to loss
Items that may bereclassified to profit
Exchange differences ontranslating foreign
operations

Foreign currency translation
adjustment

Total other comprehensive
incomeCOMPREHENSIVE INCOME

COMPREHENSIVEINCOMEATTRIBUTABLE TO
MAKITA CORPORATION
Less-Comprehensive income
attributable to thenon-controlling interest

9,860

-

7

9,853

9,860

-

7

9,853

9,040
64,311

-

97
91

8,943
64,402

63,578-91

63,669

733

-

-

733

English Translation of "KESSAN TANSHIN" originally issued in Japanese

Total of items that may bereclassified to profit
Total other comprehensive
income, net of tax
COMPREHENSIVE INCOME
Comprehensive income
attributable to:

Owners of the parent

Non-controlling interests

21Notes to Reconciliation
A. Intangible assets
As some development costs, which are a part of expenditures related to R&D that were expensed under U.S. GAAP,
meet the requirements to be capitalized under IFRS, they are recognized as intangible assets in its consolidated
financial position statement and amortized over its expected useful lives on a straight-line basis.
Due to the above-mentioned differences in the accounting standards, the unamortized balance of capitalized
development costs of 2,902 million yen, and 2,958 million yen, respectively, were recorded as intangible assets on thetransition date, at March 31, 2018, respectively. Consequently, retained earnings after deducting the adjusted deferred
tax of 876 million yen, and 893 million yen on the transition date, at March 31, 2018, respectively, increased by 2,026
million yen, and 2,065 million yen, respectively.
B. Employee benefits
Under U.S. GAAP, regarding post-employment benefits under defined benefit pension plans, service cost, interest
cost, and expected return on plan assets were recognized in profit or loss. The portion of actuarial differences arisingfrom the relevant plans and past service cost incurred that was not recognized as expenses for the period wasrecognized in the amount net of tax in accumulated other comprehensive income (loss), and the amount recognized inaccumulated other comprehensive income (loss) was subsequently recognized in income or loss over the averageremaining service years of employees.
Under IFRS, regarding post-employment benefits under defined benefit pension plans, current service cost and past
service cost are recognized in profit or loss, and the amount calculated by multiplying net defined benefit liability(asset) by the discount rate is recognized as interest expense (income) in profit or loss. Remeasurements of the net
defined benefit liability (asset) are recognized in other comprehensive income, and transferred from other componentsof equity directly to retained earnings, not through profit or loss.
Due to the above-mentioned differences in the accounting standards, actuarial differences of 8,869 million yen (loss)
and past service liability of 2,455 million yen (profit) on the transition date are transferred to retained earnings.
C. Exchange differences on translating foreign operations
IFRS allows an entity to choose to deem the full cumulative amount of the exchange differences on translating
foreign operations to be zero on the transition date.
Consequently, the exchange differences on translating foreign operations of 28,572 million yen out of accumulated
other comprehensive income on the transition date are transferred to retained earnings.
D. Income taxes
Under U.S. GAAP, regarding tax effect from the elimination of unrealized gains on intercompany transactions,income taxes paid by the seller were recorded as prepaid income taxes. Under IFRS, regarding the said tax effect, adeferred tax asset is recorded using the effective tax rate of the buyer as a temporary difference of assets held by thebuyer.
Due to the above-mentioned differences in the accounting standards, on the transition date, at March 31, 2018, othercomprehensive income, net of tax decreased by 6,484 million yen, and 7,444 million yen, respectively, deferred tax
assets increased by 5,730 million yen, and 6,420 million yen, respectively, while retained earnings declined by 754
million yen, and 1,024 million yen, respectively.
E. Reclassification of items in consolidated statement of financial position
Although some items are reclassified in the consolidated statement of financial position to conform with IFRS
provisions, there is no effect on consolidated statements of income, consolidated statements of comprehensive income,and retained earnings. The following items represent major items that are reclassified in the consolidated statement offinancial position.
(i) In accordance with the presentation provisions under IFRS, financial assets and financial liabilities are presented
on an individual basis.
English Translation of "KESSAN TANSHIN" originally issued in Japanese22

(ii) Under U.S. GAAP, deferred tax assets and deferred tax liabilities were presented separately in current
assets/liabilities and non-current assets/liabilities. However, since they are not allowed to be presented in current
assets/liabilities under IFRS, they are reclassified as non-current assets/liabilities.
(iii) Other reclassifications have been made by aggregating or separating presentation under U.S. GAAP to beconsistent with the presentation under IFRS.
F. Reclassification of items in consolidated statements of profit or loss
Although some items are reclassified in the consolidated statements of profit or loss to conform with IFRS
provisions, there is no effect on retained earnings. The following items represent major items that are reclassified in the
consolidated statements of profit or loss.
(i) In accordance with the presentation provisions under IFRS, financial income and financial expenses are presented
on an individual basis.
Reconciliation of consolidated cash flows for the year ended March 31, 2018
There is no material difference between consolidated statements of cash flows disclosed in accordance with U.S.
GAAP and those disclosed in accordance with IFRS.

English Translation of "KESSAN TANSHIN" originally issued in Japanese

23

SUPPORT DOCUMENTATION (CONSOLIDATED)
1. Consolidated Financial Results and Forecast
Yen (millions)
For the year ended
For the year ended
March 31, 2019
March 31, 2018
(%)

(%)

Revenue .....................................................................................................
Domestic ...............................................................................................
Overseas................................................................................................
Operating profit .........................................................................................
Profit before income taxes .........................................................................
Profit attributable to owners of the parent .................................................
Profit attributable to owners of the parent per share (Yen) .......................
Number of Employees ...............................................................................

477,298
82,575
394,723
80,231
79,86554,943202.3916,137-490,578
2.8
92,12911.6
398,449
0.9
78,305(2.4)
79,9190.1
55,7501.5
205.37
16,424
Yen (millions)
For the year ending
March 31, 2020
(Forecast)(%)

Revenue ....................................................................................................................................
500,000
1.9
Domestic ..............................................................................................................................
95,000 3.1
Overseas...............................................................................................................................
405,000 1.6
Operating profit ........................................................................................................................
72,000 (8.1)
Profit before income taxes ........................................................................................................
72,700 (9.0)
Profit attributable to owners of the parent ................................................................................
50,000 (10.3)
184.18
Profit attributable to owners of the parent per share (Yen) .....................................................
Number of Employees ..............................................................................................................
Notes:
1. Please refer to 1. Overview of operating results Section 4 “Outlook for the fiscal year ending March 31, 2020”
on page 6.
2. The table above shows the changes in the percentage ratio of revenue, operating profit, profit before income
taxes, and profit attributable to owners of the parent compared to the corresponding period of the previous year.
3. The percentage changes from results for the year ended March 31, 2017 based on U.S. GAAP have been
omitted.

English Translation of "KESSAN TANSHIN" originally issued in Japanese24

2. Consolidated Revenue by Geographic Area
Yen (millions)
For the year ended
For the year ended
March 31, 2019
March 31, 2018
(%)

(%)

Japan ................................................................
82,575
92,12911.6
213,238
5.5
Europe .............................................................
202,054
North America .................................................
73,87372,508(1.8)
Asia .................................................................
44,09440,909(7.2)
27,801(0.4)
Central and South America..............................
27,922
Oceania............................................................
31,28430,222(3.4)
The Middle East and Africa.............................
15,496
13,771(11.1)
490,578
2.8
Total.................................................................
477,298
Notes:
1. The table above sets forth Makita's consolidated revenue by geographic area based on the customer’s location
for the periods presented. Accordingly, it differs from “Segment Information” on page 13.
2. The table above shows the changes in the percentage ratio of revenue compared to the corresponding period of
the previous year.
3. The percentage changes from results for the year ended March 31, 2017 based on U.S. GAAP have been
omitted.

3. Exchange Rates
Yen
For the year ended
March 31, 2018

For the year ended
March 31, 2019

For the year ending
March 31, 2020
(Forecast)110.85129.6616.74

110.92
128.44
16.54

110
125
16.3

USD/JPY .................................................
EUR/JPY .................................................
RMB/JPY ................................................

4. Production Ratio (unit basis)

Domestic .....................................................................
Overseas ......................................................................

For the year ended
March 31, 2018

For the year ended
March 31, 2019

Composition ratio

Composition ratio

9.3%
90.7%

9.5%
90.5%

5. Consolidated Capital Expenditures, Depreciation and Amortization, and R&D cost
Yen (millions)
For the year
For the year ended
ending
For the year ended
March 31, 2019
March 31, 2020
March 31, 2018
(Forecast)
Capital expenditures ...................
Depreciation and amortization ...
R&D cost ....................................

15,045
10,783
10,92423,867
11,271
11,258English Translation of "KESSAN TANSHIN" originally issued in Japanese

38,00012,80012,00025