Management Team(As of June 25, 2020)

Directors

Yasusuke Nakajima1

Masao Ono1

Takaaki Kato1

Keisuke Saito1

Director, Chairman

Representative Director, President
Executive Officer

Representative Director, Executive Vice
President Executive Officer

Member of the Board of Directors,
Executive Vice President Executive Officer

Rokurou Tsuruta1, 3Shuhei Shiozawa1, 3Masakazu Sakata1, 3

Member of the Board of Directors (Outside)

Member of the Board of Directors (Outside)

Member of the Board of Directors (Outside)

Audit & Supervisory Board Members

Tomoo Akai2

Junichi Tanaka2, 3

Eiji Hisada2

Masahiko Sagara2, 3

Audit & Supervisory Board Member(Full Time)

Audit & Supervisory Board Member(Full Time) (Outside)

Audit & Supervisory Board Member(Full Time)

Audit & Supervisory Board Member(Full Time) (Outside)

Notes: 1. Term of ofﬁce: One year from the conclusion of the Ordinary General Meeting of Shareholders held on June 25, 2020.
2. Term of ofﬁce: Four years from the conclusion of the Ordinary General Meeting of Shareholders held on June 25, 2020.
3. Members of the Board of Directors Rokurou Tsuruta (Outside), Shuhei Shiozawa (Outside) and Masakazu Sakata (Outside), and full-time Audit & Supervisory Board Members
Junichi Tanaka (Outside) and Masahiko Sagara (Outside) are independent ofﬁcers as prescribed in Rule 436-2 of the Securities Listing Regulations of the Tokyo Stock Exchange.

Please refer to the “Notice of the 98th Ordinary General Meeting of Shareholders” on our Company website for more detailed information, including brief career histories.
▶https://www.kyb.co.jp/english/ir/stock_meeting.html

Executive Officers
Masao Ono
Representative
Director, President
Executive Officer
Takaaki Kato
Executive Vice
President Executive Keisuke Saito
Officers

Senior Managing
Executive Officers

Hiroshi Ogawa
ToshihikoHatakeyama
Hitoshi Nitta

Managing
Executive
Officers

Masahiro Kawase In charge of Global Production (Automotive Components Operations

General Manager, Seismic Isolation/
Mitigation Correspondence Operations
In charge of European Operations; President,
KYB Europe GmbHIn charge of Technology and Quality

In charge of Cost Planning; General Manager,
Production Division; Deputy General Manager, Seismic
Isolation/Mitigation Correspondence Operations
General Manager, Engineering Division; General
Ikuo Inagaki
Manager, Engineering Planning Department
In charge of North, Central & South American Operations
Hajime Sato
(Automotive Components Operations Relations); General
Manager, Automotive Components Operations; General
Manager, Motorcycle Headquarters
Kenji Yamanouchi President, KYB Americas Corporation
Hideki Nonoyama In charge of Purchasing; Deputy General Manager,
Seismic Isolation/Mitigation Correspondence Operations;
General Manager, Promotion Headquarters
Osamu Kunihara General Manager, Finance & Accounting Division

Kazuaki Shoji

Takashi Tezuka
Ryuji Uda

In charge of Global Corporate Finances

In charge of Special Purpose Vehicle Division; General
Manager, General Affairs & Human Resources Division

Minoru Ishikawa
Ichio Nemoto

Takashi Saito

Executive
Officers

Koji Yamamoto
Takashi Kondo
Kimiro Sudo
Tomoki Takaoka
Ukuru Tsuchida
Shozo Amano
Minoru Tamai
Toshimichi Izeki

Relations); General Manager, Suspension Headquarters; General
Manager, Steering Headquarters, Automotive Components Operations
General Manager, Quality Division
In charge of China; Chairman & President, KYB (China) Investment Co.,
Ltd.; Chairman, KYB Industrial Machinery (Zhenjiang) Ltd.; Chairman,
Wuxi KYB Top Absorber Co., Ltd.
General Manager, CSR & Safety Control Division
In charge of Global Corporate Planning and Domestic AffiliatedCompanies; In charge of Aircraft Components Divisions; General
Manager, Corporate Planning Division; General Manager, Corporate
Planning Department
In charge of auditing; In charge of President’s Office
General Manager, Gifu South Plant, Hydraulic Components Operations
Deputy General Manager, Seismic Isolation/Mitigation Correspondence
Operations; Deputy General Manager, Customer Correspondence
Headquarters
In charge of India; General Manager, Chennai (India) Branch
General Manager, Purchasing Division
General Manager, Special Purpose Vehicles Division
General Manager, Hydraulic Components Operations
General Manager, Sagami Plant, Hydraulic Components Operations
Deputy General Manager, Engineering Division; General Manager,
Basic Technology R&D Center; Curator, KYB Museum

KYB Group Report 2020

41

Risk Information

This section explains the major risk factors relevant to the KYB Group’s operating results and ﬁnancial condition
that may have a signiﬁcant effect on decisions by investors. The KYB Group’s Risk Management Committee reports
to the Board of Directors. Based on the Risk Management Rules, it identifies material risks the Group must address
and the business units responsible for managing them, and also addresses large-scale natural disasters throughGroupwide BCP initiatives. Business units are responsible for managing their risk exposure while the Risk
Management Committee monitors their actions.
Forward-looking statements in this section represent the judgments of the KYB Group (KYB and its consolidated
subsidiaries) as of March 31, 2020.

1. Nonconforming Acts in the Inspection Process
for Seismic Isolation/Mitigation Oil Dampers
The Company and its subsidiary Kayaba System Machinery Co.,
Ltd. manufacture and sell seismic isolation/mitigation oil dampers
for buildings. Some did not conform to performance evaluation
standards certiﬁed by the Minister of Land, Infrastructure,
Transport and Tourism (the “Minister”),* or to the standards ofcustomers, because of falsiﬁcation of performance inspection
record data (the “Incident”). We reported the Incident to the
Ministry of Land, Infrastructure, Transport and Tourism (MLIT) andannounced the status of our response on October 16, 2018.
* There is no Minister’s certiﬁcation system for seismic mitigation oil dampers.

Since July 5, 2019, we have announced the status and progressof measures to prevent recurrence and countermeasures
regarding this issue once every three months on the following
website of the Company. For details, please refer to Progress of
Measures to Prevent Recurrence on page 20.
Status and progress of measures to prevent recurrence:https://www.kyb.co.jp/company/progress/prevent.html(Japanese only)
Status of countermeasures:https://www.kyb.co.jp/company/progress/exchange_progress.html(Japanese only)

Also related to the Incident, the Company records provisions
for product warranties for seismic isolation/mitigation oil dampers
using information and facts currently available and considered
reliable. Provisions have been recorded in our accounts for costs
to produce seismic isolation/mitigation oil dampers, to replace
seismic isolation/mitigation oil dampers, to make structural
modiﬁcations, and to cover compensation expenses. At this point,
however, no provision has been recorded for litigation costs
related to this matter, for which a reliable and reasonableestimate is difficult. Therefore, additional provision recorded as aresult of future events could have a significant impact on thebusiness results of the Group.

2. Important Events Related to Going
Concern Premise
The Company recorded a significant operating loss for FY2019,
which resulted in a breach of the financial covenants of the
syndicated loan agreements that the Company has with all

42

KYB Group Report 2020

applicable financial institutions. To resolve this situation, theCompany negotiated with the applicable financial institutions,which have agreed not to demand immediate redemption due tothe default event pursuant to a breach of financial covenants.
Based on the above, the Company has determined that any
significant uncertainty regarding the premise of its standing as agoing concern is not justified.

3. Risk Due to the COVID-19 Pandemic
Due to the global COVID-19 pandemic, national and local
governments worldwide have implemented measures that include
lockdowns and restrictions on movement. Adverse effects on theGroup’s business performance have included suspension ofoperations and production adjustments due to production cutsby major customers. In addition, the future remains difficult topredict due to the possibility of secondary and tertiary outbreaks
even in areas where life is returning to normal. As a result, thepandemic could have a significant impact on the KYB Group’s
operating results and financial position.
Given these circumstances, the Group will promote flexible
measures such as ensuring liquidity and expanding local
production for local consumption. In addition, to prevent the
spread of COVID-19, each Group company is implementing
measures that include thorough hygiene management, restricting
domestic and overseas business trips, and expanding telecommuting
and web conferencing in accordance with the requests andguidelines of national and local governments worldwide.

4. Risks in Business Operations
4-1. Demand Trends
Sales of the KYB Group’s Automotive Components and HydraulicComponents Operations segments depend heavily on the global
production volume of automobiles and construction machinery.
The Group’s main products are components supplied to
manufacturers of automobiles, construction machinery andindustrial vehicles. A decline in demand for these products due toa global economic downturn could have a signiﬁcant impact on
operating results. The KYB Group sells most of its systemproducts, aircraft components, special-purpose vehicles andelectronics components in Japan. In particular, demand for theKYB Group’s special-purpose vehicles, which are primarily
concrete mixer trucks, can ﬂuctuate signiﬁcantly due to changes
in the amount of construction activity, which is closely correlatedwith the economic outlook.

4-2. Prices and Quality
The KYB Group’s products are subject to intense pricecompetition in both domestic and international markets.
Customers regularly request cost cuts and lower prices. Quality
is also critical. The Group supplies vital automotive components,
such as shock absorbers that maintain vehicle stability and power
steering systems. For construction machinery and commercial
vehicles, the Group supplies key functional components suchas motors and hydraulic cylinders that drive the main unit.
Consequently, the Group may incur substantial expenses,
including the payment of damages demanded by customers, if it
supplies defective products. Furthermore, sales volume and prices
for aftermarket automotive shock absorbers are subject to theimpact of regional economic conditions and competition.

4-3. Procurement of Materials and Components
The KYB Group purchases materials and components from alarge number of suppliers. Prices of these items are closely linked
to prices on international commodity markets. The KYB Groupmay not be able to fully reﬂect an increase in the cost of materials
or components in its selling prices, or to reduce prices of materials
and components sufﬁciently to reﬂect a reduction in selling prices,which could have a signiﬁcant impact on operating results.

4-4. Funding
The KYB Group obtains loans mainly from ﬁnancial institutions inJapan and other countries to fund capital expenditures and tosecure working capital. The Group obtains these loans while
carefully monitoring ﬁnancial markets. However, it may be unable
to procure funds when needed at favorable terms due to events
including a broad decline in the prices of the Group’s products,
an economic recession, a credit crunch, or a decline in theGroup’s credit rating, which could affect the Group’s ﬁnancial
condition and operating results.

5. Risks Associated with Natural Disasters,
Accidents, Etc.
An earthquake, wind and flood damage, fire, conflict, act ofterrorism or other event in Japan or an area outside of Japan
where the KYB Group has a plant could cause a substantial
decline in the Group’s production capacity. In Japan, many plantsof the KYB Group and many of its suppliers are located in the
Chubu area. A major earthquake, wind and flood damage orother event in this area that prevents these plants from operating
could cause a substantial decline in the Group’s production
capacity. In addition, many plants of the KYB Group produce
hydraulic products that utilize the properties of oil. In addition,some plants have coating equipment that uses organic solvents,and storage tanks for hydraulic oil, chemicals and other substances.
A ﬁre or hazardous substance leak could temporarily shut down
manufacturing activity.

6. Risks Associated with Fluctuations in Exchange
Rates and Interest Rate Increases
With an overseas sales ratio of 55.2%, the KYB Group relies
heavily on markets outside of Japan. As a result, ﬂuctuations inforeign exchange rates have a signiﬁcant impact on the Group’s
exports from Japan and the performance of Group companies inother countries. An increase in interest rates in Japan or othercountries could have a signiﬁcant impact on the KYB Group’s
operating results.

7. Risks Associated with Significant Lawsuits or
Other Legal Action
If the KYB Group is the defendant in a lawsuit and the outcome isunfavorable, the resulting payment and other demands may havea signiﬁcant impact on the Group’s operating results.

4-5. Business Downturn
Bankruptcy at KYB Group overseas production or sales bases
caused by factors including a decline in orders or proﬁtability
could signiﬁcantly impact the Group’s operating results.

4-6. Counterparty Credit Risk
The KYB Group sells its products to automobile and construction
machinery manufacturers and many other customers. An
unexpected problem involving customer credit could affect theGroup’s operating results.

KYB Group Report 202043

Financial and Non-Financial Highlights

FY

2009

2010

2011

2012

Accounting standards applied

JGAAP

JGAAP

JGAAP

JGAAP

Net sales

252,020

320,082

337,158

305,752

1

—

—

—

—

Operating profit

3,896

24,152

21,538

10,473

Profit before tax[Income (loss) before income taxes andminority interests]

1,671

24,44021,76012,994661

17,014

13,898

7,789

Capital expenditures

10,082

8,916

27,17339,215

Depreciation and amortization

15,31813,427

13,50814,554R&D expenses

2,817

3,218

4,035

5,468

Cash flows from operating activities

22,65535,433

17,39918,984

Cash flows from investing activities(12,828)(7,233)(20,000)(36,125)

Cash flows from financing activities(6,646)(16,968)(3,455)

8,529

Cash and cash equivalents at end of period

37,664

48,12342,01035,215

Total assets

269,361

285,134

301,349

327,912Segment profit

Profit (loss) attributable to owners of the parent[Net income (loss)]

98,14581,64180,51895,33878,48989,964

102,762

116,435

Basic earnings per share [Net income (loss) per share] 3 (Yen)

3.03

77.54

62.87

35.24

Cash dividends per share applicable to the year (Yen)

2.50

8.00

9.00

8.00

Return on equity attributable to owners of the parent[Return on equity] (ROE; %)

0.9

21.1

14.8

7.3

Ratio of equity attributable to owners of the parent[Equity ratio] (%)

27.3

30.6

33.2

34.5

P/E ratio (Times)

113.9

8.6

8.0

13.1

Number of employees

10,977

11,44011,97512,306

Interest-bearing debt

2

Total equity [Total net assets]

3

KYB Corporation and Consolidated Subsidiaries
Notes: 1. Segment proﬁt is calculated by deducting cost of sales and selling, general and administrative expenses from net sales.
2. Interest-bearing debt = Short-term borrowings + Current portion of long-term borrowings + Current lease obligations + Long-term debt + Non-current lease obligations +Guarantee deposits received
3. The Company carried out a 1-for-10 reverse stock split effective October 1, 2017.
Items in brackets are Japanese Generally Accepted Accounting Principles (JGAAP) line item names applied prior to the year ended March 31, 2015 (FY2014).
*JGAAP

Environment-related Data
CO2 Emissions(t-CO2)150,000
1.31
100 000

92,7091.26
96,5451.34
101,289(t-CO2/million yen)
1.5
1.43
1.30
97,41996,74550 000

Energy Consumption

(km3)
2,000

(kℓ)
80,000
1,633

1 500
1,243

1,251

1,604

0.689

0.713

0.704

0.684

48,66450,76453,081

51,031(kℓ/million yen)
0.80
0.750

60,0001,331

0.60
50,5971,000

40 0000.40

500

20,000

0.20

0.5

0

0
2015

2016

■ Emissions (Left scale)

44

1.0

Water Usage

2017

2018

2019

Basic unit (Right scale)KYB Group Report 2020

(FY)

0

0
2015

2016

2017

2018

2019

(FY)

0
2015

2016

■ Consumption (Left scale)

2017

2018

2019

(FY)

Basic unit (Right scale)(Millions of yen)

2013

2014

2015

2016

2017

2018

2019

JGAAP

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

352,710370,327355,320355,316

393,743

412,214

381,584—

15,506

17,58818,62422,94922,01017,575

18,17014,461

4,327

19,247

20,885(28,496)(40,298)

21,032

14,892

2,825

18,852

20,881(29,510)(41,419)

12,761

8,036(3,161)

14,544

15,202(24,757)(61,879)

29,90830,087

21,30020,578

20,95625,34523,347

17,294

15,191

17,075

15,922

16,98817,581

20,6156,917

8,910*

7,760

7,621

8,102

6,750

6,312

28,78822,335

19,95831,15329,252

17,047(4,999)(36,078)(30,658)(20,320)(21,337)(16,386)(13,616)(21,505)

5,709

(555)

(3,395)(969)(4,482)

10,41822,57638,13230,51025,29633,98842,70256,09250,423361,083

387,877

359,002381,326

412,493441,074

410,454

88,81392,44891,68593,563

94,641

108,634

154,608

153,997

175,256

153,381

169,771

186,651

155,643

79,815

55.25

31.45

(12.37)56.93

595.09(969.18)(2,422.53)

9.00

12.00

11.00

12.00

150.00

0.00

0.00

9.7

5.1

(2.0)

9.3

8.8

(15.0)(55.4)

41.2

43.6

41.3

43.1

43.7

33.9

18.1

7.9

14.0

—

10.2

8.5

—

—

13,033

13,732

13,796

14,35014,754

15,427

15,439Energy Consumption forTransportation*

Waste Emissions

(kℓ)
2,500

(t)
25,000
2,171

2,000
1,756
1,500

1,946

1,961

20,00010,000

500

5,000

3,506

0 539

0
2015

2016

19,31915,0001,000* Amount as crude oil

20,36419,755

17,931

16,998

1,673

2017

2018

2019

(FY)

2015

■ General waste

2016

504

515

597

2017

■ Metal scrap

3,557

3,827

3,539

3,469

504

2018

2019

(FY)

■ Industrial waste

KYB Group Report 2020

45

Global Network(As of August 1, 2020)

JAPAN★ Regional Headquarters● Production Base

◆ R&D Base ■ Sales Base/Other Services

KYB Corporation★ KYB Head office● KYB Trondule Co., Ltd.

● Kumagaya Plant● KYB-YS Co., Ltd.

● Sagami Plant● KYB Kanayama Co., Ltd.

● Aikawa Plant● Gifu North Plant● KYB Motorcycle Suspension Co., Ltd.
● Kayaba System Machinery Co., Ltd.

● Gifu South Plant● KYB Stage Engineering Co., Ltd.

● Gifu East Plant● Takako Industries, Inc.

◆ Basic Technology R&D Center■ KYB Engineering and Service Co., Ltd.

◆ Production Technology R&D Center◆ Machine Tools Center◆ Developmental Experiment Center■ Hamamatsu■ Nagoya■ Osaka■ Hiroshima■ Japan Analysts Co., Ltd.
■ Kensiyuu Co., Ltd.
■ KYB Logistics Co., Ltd.
■ KYB Systemerit Co., Ltd.
■ Chikuyo Seiki Kogyo Co., Ltd.

■ Fukuoka

46

EUROPEASIA★ ◆ KYB Europe GmbH★ KYB (China) Investment Co., Ltd.

★ KYB Europe GmbH
(Navarra Branch)■ KYB Europe GmbH
(Düsseldorf Branch)■ KYB France■ KYB Iberia■ KYB Italy■ KYB Poland■ KYB Romania■ KYB Turkey■ KYB UK■ KYB Ukraine● KYB Suspensions Europe, S.A.U.
● KYB Steering Spain, S.A.U.
● KYB Advanced Manufacturing
Spain, S.A.U.
● KYB Manufacturing Czech, s.r.o.
● KYB CHITA Manufacturing
Europe s.r.o.
■ LLC KYB Eurasia■ KYB Eurasia Vladivostok■ KYB Middle East FZE● KYB Industrial Machinery(Zhenjiang) Ltd.
■ KYB Industrial Machinery(Zhenjiang) Ltd.
(Shanghai Branch)● ■ Wuxi KYB Top AbsorberCo., Ltd.
● Changzhou KYB Leadrun Vibration
Reduction Technology Co., Ltd.
● Hubei Henglong & KYB
Automobile Electric Steering
System Co., Ltd.
● CHITA KYB Manufacturing(Zhenjiang) Co., Ltd.
● KYB Manufacturing Taiwan Co., Ltd.
● KYB Steering (Thailand) Co., Ltd.
● KYB (Thailand) Co., Ltd.
● KYB Manufacturing Vietnam
Co., Ltd.
● Takako Vietnam Co., Ltd.
● PT. KYB Hydraulics Manufacturing
Indonesia

KYB Group Report 2020

AMERICAS● PT. Kayaba Indonesia● PT. Chita Indonesia● KYB-UMW Malaysia Sdn. Bhd.
● KYB Motorcycle Suspension India
Pvt. Ltd.
● KYB-Conmat Pvt. Ltd.
■ KYB Asian Pacific Corp. Ltd.
■ KYB Asian Pacific Corp. Ltd.
(Amata Nakorn Branch)■ Kayaba System MachineryCo., Ltd. Taiwan Office■ KYB Corporation
Chennai Branch★ ● KYB Americas
Corporation (Indiana)■ KYB Americas
Corporation (Chicago)■ KYB Americas
Corporation (Detroit Branch)■ KYB Americas
Corporation (Greenwood)● Takako America Co., Inc.
● KYB Mexico S.A. de C.V.
● KYB Manufacturing do Brasil
Fabricante de Autopeças S.A.
■ KYB International America, Inc.
■ KYB Latinoamerica, S.A. de C.V.
■ Comercial de Autopeças KYB do
Brasil Ltda.

Corporate Information/Shareholder Information(As of March 31, 2020)

Corporate Information
Company NameKYB Corporation

Date of Establishment

March 10, 1935

Head OfficeWorld Trade Center Bldg.,
4-1, Hamamatsu-cho 2-chome,
Minato-ku, Tokyo 105-6111, Japan
TEL: +81-3-3435-3511
FAX: +81-3-3436-6759
URL: https://www.kyb.co.jp/english/

Fiscal Year

April 1 to March 31

Paid-in Capital¥27,647.6 million

Number of Employees

15,439 (Consolidated basis)

Securities Traded

Tokyo Stock Exchange (First Section)

Shareholder Information
Major Shareholders

Common Stock Issued

25,748,431

Number of
Shareholders

14,965

Transfer Agent andRegistrar

Mizuho Trust & Banking Co., Ltd.
2-1, Yaesu 1-chome, Chuo-ku,
Tokyo 103-8670, Japan

Name

Composition of Shareholders
Financial institutions
7,910 thousand (31%)

Treasury shares
205 thousand (1%)
Other domestic companies
5,491 thousand (21%)

Foreign companies
5,668 thousand (22%)

Individuals and others
6,474 thousand (25%)

Shareholdings Percent of Total(Thousands) Shares Issued (%)

Toyota Motor Corporation

1,965

7.7

The Master Trust Bank of Japan, Ltd.
(Trust Account)

1,258

4.9

Meiji Yasuda Life Insurance Company

1,004

3.9

Hitachi Construction Machinery Co., Ltd.

892

3.5

KYB suppliers’ stock ownership

825

3.2

Trust & Custody Services Bank, Ltd.
as trustee for Mizuho Bank, Ltd.
Retirement Benefit Trust Accountre-entrusted by Mizuho Trust andBanking Co., Ltd.

611

2.4

Ogaki Kyoritsu Bank, Ltd.

591

2.3

Government of Norway

499

2.0

Mizuho Bank, Ltd.

490

1.9

Japan Trustee Services Bank, Ltd.
(Trust Account 5)

455

1.8

Notes: 1. The shareholding ratio is calculated after the deduction of own shares(205,222 shares).
2. The number of shares held has been rounded down to the nearest
thousand shares.

Monthly Stock Price Range (Tokyo Stock Exchange)
Stock price (¥)

Stock price (Left scale)

Trading volume (Shares)■ Trading volume (Right scale)

8,000

800,000,000

6,000

600,000,000

4,000

400,000,000

2,000

200,000,000

00FY2015FY2016FY2017FY2018FY2019High (¥)

4,710

6,460

7,380

5,660

3,695

Low (¥)

2,630

2,980

4,705

2,312

1,712

At year-end (¥)

3,330

5,800

5,050

2,718

2,069

Note: The Company carried out 1-for-10 reverse stock split on the effective date of October 1, 2017. Numbers for the prior ﬁscal years are as recorded after the reverse stock split.

KYB Group Report 202047

Contact

General Affairs Headquarters, General Affairs & Human Resources Div.
World Trade Center Bldg.,
4-1, Hamamatsu-cho 2-chome,
Minato-ku, Tokyo 105-6111, Japan
TEL: +81-3-3435-3545
FAX: +81-3-3436-6759