KAYABA Group Report 2022
April 1, 2021 – March 31, 2022

Introduction
Introduction

Corporate Statement

Our Precision, Your Advantage
Becoming a corporate group that delivers total satisfaction to our stakeholders.
Through the provision of products with reliable quality in manufacturing, Kayaba strives to contribute to theadvancement of customers, shareholders, business partners, and society. And with a strong awareness of ourcorporate social responsibility, we plan to raise our corporate value in order to continue being an exemplar thatis trusted by people around the world.
We believe it is our purpose to build a core of value creation. By returning to the spirit of originality that we haveinherited from our founder, we will continue building a history of focusing on a prosperous future for all.

VISION
What the Kayaba brand offers the world

Monozukuri (manufacturing skill) that brings happiness
Kayaba’s aim is to support the development of society through the joy of monozukuri, and make people happier as a result.

MISSION
The mission of the Kayaba brandMonozukuri that goes the extra mile
Kayaba will remain an enterprise that delivers value to clients and markets by making use of
the reliable technical expertise we have built up over the years.
Through our efforts, we provide monozukuri that goes the extra mile to offer our clients new values
and greater satisfaction than they have ever known.

VALUE
Value the Kayaba brand creates

Technology for comfortable living
Value we can feel: Comfortable living, the joy of monozukuri
Value we can use: Reliable quality

The value Kayaba promises toits end users:
A higher level of comfortable living
through our creative technology
and dedication to productdevelopment.

01

KAYABA Group Report 2022

The value Kayaba promises to
its clients:
Reliable quality that comes fromthinking of end users as our clients.

The value Kayaba promises toits employees:“The joy of monozukuri” thatcomes from knowing
they are changing the world.

01 Corporate Statement
03 The Origin of Kayaba
05 Kayaba Performance Highlights
06 Kayaba: Driving Toward the Future

Strategy
07 Message from the President
13 Value Creation Process
15 Business Outlook for the Kayaba Group		

17 Automotive Components Operations		

19 Hydraulic Components Operations		

21 Special-Purpose Vehicles Division		 22 External Assessments (FY2021)

Strategy09 FY2020-2022 Medium-Term Management Plan

Reporting Period
FY2021 (April 1, 2021 to March 31, 2022)
Note: Includes some activities and information fromoutside the above reporting period.
Scope
The report covers KYB Corporation and subsidiaries
and affiliates in Japan and around the world.
Note: Environmental data is for KYB Corporation(Sagami Plant, Kumagaya Plant, Gifu North
Plant, Gifu South Plant and Gifu East Plant, andMie Plant) unless otherwise annotated.

23 Monozukuri
27 ESG Management		

30 Corporate Governance		

37 Environmental Initiatives		

42 Social Initiatives

Value CreationDate of Issue
November 2022

Value Creation

Forward-Looking Statements
This report includes plans and forecasts as of theissue date, and estimates based on our businessplans and management policies. Forward-looking
statements are based on information available at thetime of report preparation, and actual results may
differ depending on changes in relevant conditions.

Data

Company Data
51 Financial Highlights
53 Kayaba in Globe
55 Corporate Information
56 Shareholder Information

Introduction

Introduction

Editorial Policy
The Kayaba Group has issued this integrated reportsince FY2019 to communicate its management
policies, business strategies and CSR activities toshareholders, investors and all other stakeholders.
We hope to create new opportunities for dialogue by
covering business performance, management
strategies and other financial information, as well as
the environment, society, governance (ESG) andother non-financial information in order to inform
readers about our efforts to increase corporate value
over the medium to long term. For a better reading
experience, we will continue to improve the reportbased on stakeholder feedback. We welcome yoursuggestions.

Corporate Statement

Contents

Cover Design
We created the design based on the combined flowof all the kinds of technology that underpin Kayaba’s
core technologies of vibration and power control. It
expresses the spirit in which the Company wasestablished—one of being inspired by the mysteriesof the universe—and our intention to bring our
founder’s the imaginative power and drive to “investigate technology” into the future.

KAYABA Group Report 202202

Introduction

The Origin of Kayaba

The Spirit of Originality—
Kayaba’s origin in manufacturing skill,
and the key to creating the future
The history of hydraulics traces back to Europe at the start of the 1900s. The shift from mechanical systems
made from combinations of wires and gears towards hydraulics was progressing, and it entered the stage as agroundbreaking new technology. At that time, Japan was seen as being about 20 years behind large countries
that were more advanced in technology, such as Germany and Britain. Shiro Kayaba (our founder) becameaware of hydraulics from a description in lecture notes for the University of Tokyo’s Arms Manufacture Faculty,
and the technology immediately captured his interest.
“Everything in use is still developing, a legacy from the past. The world continuously seeks that which isnew. The unique ability of humankind to progress lies in its constant search for perfection.” Shiro Kayaba leftthese words behind, and they are the key to our future. Kayaba is returning to our origin as a company rooted
in the craftsmanship of manufacturing in order to contribute to the creation of a prosperous future throughingenuity and constant improvements and the lasting development of society. And from there, we will keep
moving forward.
For details, see “KYB History” on the websitehttps://www.kyb.co.jp/english/company/history.html

1919~

1945~

It started from our founder’screative approach

Entering new fields with creative technologies

In 1919, Shiro Kayaba founded
Kayaba Research Center at theyoung age of 21. He invented
and proposed a great deal ofhigh-performance hydraulicproducts that surpassed thosefrom Germany and Britain,
reaching up to 100 patents thatwould support the continuationof the ensuing company. The
DNA of this extraordinary
inventor who contributed tothe development of hydraulictechnology in Japan was thestart of everything that led up
to the present day.

[The origin of Automotive Components (AC) Operations]
Directly following WWII in the latter half of 1946, the Company
started research and development on a new product called a shock
absorber (SA) in collaboration with automobile manufacturers. TheCompany would receive an order for 4,000 SA for use in the jeepsof the U.S. forces. Following that, the growing popularity of automobiles would cause the share of the product to expand.
[The origin of Hydraulic Components (HC) Operations]
In 1951, The Company began development of oil dampeners forrailways cars in collaboration with Japanese National Railways (nowthe Japan Railways Group). We have established a strong customer
base with a variety of partners including automobile manufacturers,motorcycle makers and construction machinery companies.

[The origin of Special-Purpose Vehicles Division]
In 1953, the Company began assembling and mounting the highlow type concrete mixers imported by Fuji Bussan Co., Ltd. from
CTM in the United States onto trucks. This was the start of the shift
to domestic production of concrete mixer trucks. In 1959, production began on the ground-breaking “tilting mixer truck,” which has adrum portion that could rotate, thereby using gravitational pull toagitate fresh concrete.

03

KAYABA Group Report 2022

1990~During Japan’s prolonged economic
downturn, we actively expanded
overseas, with the goal of becoming“No. 1 Globally.” Further, we implemented a total cost-cutting program
Company-wide, and continued tostrengthen our operations in an effort
to reduce lead time by half. In 2006,
we gathered engineers from overseas
for training to increase their understanding of monozukuri (Japanesemanufacturing expertise), safety, andquality, thereby enhancing humanresource development.
We established the Digital
Transformation Improvement
Department in 2019, and it is utilizing
various digital technologies to supportthe creation of new ideas and businesses, as well as to improve quality andproductivity, while building Kayaba’s IT
systems in line with global standards.

Value Creation

1980~

In the 1990s, Japan’s bubble economy
collapsed and the times changed
drastically. Kayaba stated that it wasaiming for a slim and resilient management structure, and focused its
efforts on transforming its businessstructure and strengthening its
financial position.
Harnessing the power of the Group,
we developed new products andcreated new businesses, in addition
to enhancing productivity throughout
our operations by promoting total
productive maintenance (TPM; anapproach that engages all employees
in production maintenance andproduction management) and total
quality control (TQC).

Driving toward further growth

Strategy

In the 1960s, hydraulic excavator
technology was introduced to Japan,
and its history is essentially one withthe history of the evolution of
Kayaba’s hydraulic products. In 1984,
we started production of the“Hydraulic Cylinder KCH,” overcoming
simple but challenging issues such as
stopping leaks, rust, and brakeage. It
would go on to become a flagshipproduct. Starting in the mid-1980s,
Kayaba stayed ahead of our competitors by turning our focus to computerassisted engineering (CAE). The data
accumulated then continues to be
used as big data now with the introduction of digital transformation (DX)technology.

Improvement of management
structure and productivity gains

2000~

Data

2020~
Further evolution through core and digital technologies[The Evolution of AC Operations]
We are moving ahead with the development of products that willcontribute to a decrease in the consumption of electric power
and fuel in an electric vehicle society, such as fully active suspension systems and next-generation hybrid suspension systems
that employ electronic controls and electrification technology.
p. 18, 24
Heritage oforiginality

Introduction

The Origin of Kayaba

High value-added products[The Evolution of HC Operations]
We are working on product development that can contribute to asustainable society, such as adding electronic control functions
that respond to the needs for remote/automatic operation,
increased high efficiency, and improved operability. In addition,
we are expanding load sensing system devices and optimizing
breakdown prediction and predictive maintenance.
p. 20, 25

Into thefuturenality[The Evolution of HC Operations]
We have started accepting orders for e-mixer III, which inaddition to providing the conventional environmental performance, has a touch panel monitor installed which improves
convenience by indicating the state of the drum and the operation condition history while also having a maintenance information
notification function. These features increase ourp. 21
customers’ safety and security.

KAYABA Group Report 202204

Introduction

Kayaba Performance Highlights

Financial
Net Sales

Segment Profit(¥ million)(¥ million)

50０,０００393,743

412,21440０,０００3０,０００388,360

381,584

22,949328,037

17,5752０,０００30０,０００
20０,０００

24,71322,01013,325

1０,０００10０,００００

2017

2019

2018

2020

2021

(FY)

■

Operating Profit (Loss)

０(FY)
2019
2017
2020
2018
2021
Note: Segment profit is calculated by deducting cost of sales and selling, general■and administrative expenses from net sales.

Profit (Loss) Attributable to Owners of the Parent(¥ million)(¥ million)

5０,０００8０,０００30,001

20,885

18,2974０,０００0（百万円）■
50０,０００

2018

2020

2021

(61,879)

393,743

412,214

2019

2020

2021

(FY)388,360

381,584

40０,０００(¥ million)

22,576

17,047

20,826(4,482)(4,999)(6,281)-2０,０００
０(16,386) (13,616)
2017
2018

(21,505)
2019

2020

2017

2019

2018

2018

2019

17,575
13,325

43.7

35.3

33.9

40
1０,００
０25.9

2020

CF from investing activities

20(32,711)
2021
2021

(FY)

24,713(10,871)0
10０,０００5０,CF００from０ operating activities（百万円）■
3０,０００2017（%）
2０,０００60

24,247

1,146

10,418-8０,０００

22,949Ratio of Equity
Attributable
22,010 to Owners of the Parent

328,037
29,2522０,０００
20
０,０００

■
-4０,０００（百万円）

22,549(24,757)-4０,０００(40,298)
2017

Cash Flows (CF)4０,０００30０,０００17,0870(28,496)-5０,０００

15,202

０

（年度）
(FY)

CF from financing activities■０（百万円）

2017

2018

18.1
2019

2020

2021

（年度）

2017

2018

2019

2020

2021

(FY)

8０,０００30,001
20,885

18,2974０,０００Non-financial
040
００
-5０,
０,０
０
００0.6872021

174,115

169,557

154,462
29,252

22,57642,92838,433
17,047
96,944
91,271

10０,０００
20,００００0.740 △40,2980.778
20192020
2018

173,288■０,０００
30
（百万円）
2040
０,０, ００24,757
Average Number of△PaidHolidays, Days Actually Taken and-4０,０００
Rateof Usage△28,4960.674
2017

2018

20,82632,12333,68924,247

77,934

81,2102020 1,146

10,418
2019

2021

（t）

(Days)

0.800（年度）-8０,０００0.600

25

■68.1
2018

12.90

13.32

△61,879
71.7

2019

62.8
2020

2015（%）

0.400

60
100.200

5(FY) ０66.4
2017

40

０14.01

76.9

(%)

2021

80
（年度）

15.19

60

12.29
4043.72017

2033.9
2018

35.3

2019

2020
25.9

(FY) ０2021

０Basic unitssubsidiaries ■ Overseasc subsidiaries■ KAYABA ■ Domestic△4,482△4,999△10,871
Note: The scope is the six plants of Kayaba,
five domestic△6,281 subsidiaries, and 17
overseas△subsidiaries
16,386 △13,616-20,０００△21,505■ Average number of paid holidays actually taken per employee■■

Number of Employees (Consolidated)

Disabled Employment Rate / Legal Employment Rate of０Persons
with2017
Disabilities
2019
2020
2018
2021

-40,０００2017(Person)
20営業活動によるCF,０００

14,7542018

2019

投資活動によるCF

15,427

15,439△32,7112020

2021（年度）

財務活動による CF

14,718

20（%）
2.5

2.3

14,4722.2

1０,０００

2.2

2 .0

1.97

2017

2018

■KAYABA Group Report 2022

201920202021(FY)

25
1 .566.4
201720
Disabled
Employment Rate

（年度）

2.36
2.3

2.11
1.88

1.86

68.1
2018

71.7
2019

（日）
０Usage rate

18.1

2.005

22,5490Total CO2 Emissions: Scope 1 + Scope 2（t）

17,087

15,202

76.9
2020
62.8

2021

Legal Employment Rate of Persons with Disabilities

15.19
14.01
Note: The scope of the paid13.32
vacation anddisabled employee rates is for KYB
12.901512.29
Corporation.

（%）
80(FY)
60

4010Introduction

Kayaba: Driving Toward the Future

Introduction

Kayaba Performance Highlights

Strategy

Kayaba: Driving Toward the Future

Published March 16, 2022, in the Nihon Keizai Shimbun (Nationwide edition)

Value Creation

Returning to our origin
in the craftsmanship of manufacturing
to launch forward into the future
In October 2018, we announced nonconforming acts of rewriting performance
inspection results data for some of our seismic isolation/mitigation oil dampers.
We saw the valuable trust that we’d built disappear in just an instant. That was

Datafour years ago. Since then, we’ve focused all our strength on building a corporate
culture of total compliance and open, transparent communication.
We have adopted a common name for the Company to clarify our spirit and origin,which have been rooted in the craftsmanship of manufacturing since our establishment, and for all employees to turn toward the future together. For those reasons,
we proudly restore the name “Kayaba.”
Each employee will return to our origin, extensively share their ideas with eachother while strengthening their understanding, and strive toward a sustainable
future with the spirit of Kayaba’s manufacturing craftsmanship.

KAYABA Group Report 202206