Kito Corporation
FY2020 Business Report
April 1, 2020

TSE: 6409

March 31, 2021

To Our Shareholders

while enhancing our governance, and I feel strongly that the organizational
structure for that purpose is now functioning well.

At the same time, challenges remain. Due to large external factors, despite

our effort to achieve an ambitious quantitative goal of 13B yen our EBITDA has

unfortunately been decreasing for two years running following a peak in fiscal
2018 at 9.2B yen. Qualitatively, there is a lag in post-integration management of

the European firms we recently acquired and new-product launches for busi-ness expansion. We will continue working to boost capital efficiency, which
eroded with these scale-oriented acquisitions.

To resolve these issues and better prepare for the external changes we canforesee, we have begun groupwide discussion on the direction of Kito businessand Kito’s social purposes.

To determine direction for the next medium-term plan, I am focused on sev-Yoshio Kito,

President and CEOeral initiatives. Qualitative improvement of management and enhancement of
global strategies come first. As social expectations rise for sustainable corpo-

rate operations, we will redefine the ways in which Kito makes its operations
essential for society into the future and contributes to society through its opera-

Thank you very much for your continuing support.

Fiscal 2020 was the final period in our most recent five-year medium-term

Kito up as an organization characterized by rich diversity.

The next initiative will raise the value of the Kito brand for our customers. In

business plan. We usually begin assembling the new plan in April, at the start ofaddition to differentiating our products, we will improve user support across theand economies in general, however, we decided to start the new plan in April

itive user experiences, specifically through better training programs, e-com-

the new fiscal year. Because of the current great uncertainty in terms of demand
2022, designating this fiscal year as a preparatory period.

The previous plan was an ambitious one, with both quantitative and qualita-

tive goals. While we sought a scale expansion, we invested in personnel andworked to grow into a truly global organization. Our quantitative achievements

during the five-year effort were increases in operating cash flow (up 50%), oper-ating profit and ROE. We worked to integrate and apply the respective specialties and strengths of our foreign subsidiaries to benefit the entire Kito Group

01tions. As part of this, we will tighten links among foreign subsidiaries and buildboard, ranging from quote-making to after-sale services. We will maximize pos-merce for greater convenience, and the application of digital technology inproducts and services, and make innovations happen ahead of changes in theindustry.

Focusing on these initiatives, I want to build operations that will help push

the total market value of Kito above 100B yen.

For FY2020 results webcast.

02

Fiscal 2021 Forecast

Dividend for FY2021

JPY in billion

FY2021

FY2020Year-on-year
difference

In our planning we have followed the growth trends sinceSales

55.0

51.80

+6.2%

late last year, and project to pay 22 yen per share both at

Operating profit

5.0

4.45

+12.2%Net profit

3.22.34+36.5%

midterm and end-of-term.
JPY 44(28.2%)

Annual Dividend (Payout Ratio)We
are working toward business recovery to pre-pandemic levels by securely seizing
the opportunities presented by recovering economic activity and increasing demand
related to infrastructure expansion in various countries.

We will continue investing in equipment for higher productivity and to build anenvironment-friendly supply chain.
JPY 1003

FY2012

JPY in billion

FY2021

FY2020Year-on-year
differenceJapan

14.0

13.01

+7.6%

Americas

24.5

23.40

+4.7%

China

6.9

6.59

+4.6%

Asia

3.7

3.54

+4.3%

Europe3.5

3.32+5.2%Others

2.4

1.91

+25.5%

Europe 6.4%
Asia
6.7%

China
12.5%

221812Regional Sales

22Interim(26.2%)

Full year

JPY 30Overview

FY2020

FY2021Others 4.4%
Japan
25.5%
FY2021
Americas44.5%

Non Japanesemarkets 74.5%04

Let’s Get to Know Kito Vol.4

Kito Manufacturing Reform

A flexible produc tion sys tem

Product lines to suit the times

Since fiscal 2019, our Year One for manufacturing reform, we have beenworking to raise productivity and strengthen our manufacturing foundations,such as technologies for production and environmental conservation, along withpersonnel training at the Yamanashi Main Plant, the origin of Kito manufacturing.

In the term we released two new products, the Kito Electric Chain Balancer
and the Kito Porta Gantry Crane. The Kito Electric Chain Balancer excels infunctionality and operability, and the Kito Porta Gantry is light, portable
and can be set up in most any place. The two help increase work efficiency.

New aluminumprocessing line

The Kito Electric Chain Balancer has two

Working together, robots andswitchable operating modes to best fit

processes of parts-processing,

move the load using just hands, making it

to optimize and expedite thesitioning.

Kito Auto Crane automate thethe specific purpose. The operator cansaving labor. We are working

perfect for work that requires precise po-machining process with thelatest equipment, jigs andtools.

New heat-processing line
We have introduced a furnace capable of carburizing heat-treatment
in vacuum. In addition to greater
safety and quality, it reduces standby energy demand and conservesenergy.

T he K i to Por t a G an t r y i smade of aluminum, light andcompact, needing only one

person to set up. It’s been
the choice of many customers since it hit the market.

For Yamanashi Plant video. Only in Japanese.
Development Team05

06

Kito Products Spotted!

Widely used in a range ofindustries

The public image of Kito products is generally associated with manufacturing plants andconstruction sites, but their uses are not limited to those arenas. Here they are at work on
the Shirase, an Antarctic icebreaker-turned-museum, an apple-processing plant, and anengine-production plant in India.

Chain hoists carry apples
In the processing plant of an apple

orchard in the city of Hirosaki, Aomori,the prefecture with the top apple

production in Japan, special Kito
hoists for the food industry carryapples to the de-aeration device. The

process prevents the apples frommelting down and maintains theirfresh flavor and texture. Food plants

are required to maintain rigorous hygiene control as well as safety control of the equip-ment and machines they use. To keep foreign matter out, the hoist comes with a dustpan.

First Order for the PRO Light Crane System in India
Kito India recently wrote its firstorder for the PRO light Crane

System for a local joint venture
related to a Japanese heavy-in-dustrial-machine maker. It is
used to transport the diesel en-gines produced there. The firm

previously used a steel crane,

Chain hoists for the gangway

ness and easy operability of theKito electric chain hoists are set up on the exterior of the former Antarctic icebreakeraluminum crane led to the order.

stored without changing the state of its last use, and guided tours are offered to theconstruction on several power

Shirase to position the gangway and load cargo. The interior of the ship has been regeneral public. Tours are currently suspended due to the pandemic, but we hope they
will resume soon.

07

and our emphasis on the light-

With the recent beginning ofstations in India, many Kito
products are at work there.

08

Kito MediaAsk IR Officers!

Our answers to questions from investors and shareholders

Scan me!

Kito actively uses its website and social media to disseminate information on its products
and Group activities.

Dec. 22.2020 13:04

Feb. 02.2021 15:10

Q

Looking at your results up to the second quarter, I am aware of youreffort focused on generating profit. What are your specific methods forachieving this?

AIn the first quarter we turned an operating profit despite a 24% decrease in sales,
resulting in an upward revision of result forecast for the first half of fiscal 2020.
We attribute that profit mainly to across-the-board effort to enhance our control
of costs and SGA expenses. In sales we succeeded in effectively communicating
to customers the added value of Kito products and avoided being sucked into
the price war in the market fluctuations caused by the pandemic. In production,
our ERP system, introduced in 2017, made production processes more visible,encouraging our people on the production floors to be more cost-conscious,
resulting in broad waste-reduction and higher productivity.

S o c i a lm e d i a

Read the featured articles forthe second half of fiscal 2020!

Customer safety is our top priority.

09

Q

What are the defining characteristics of Kito's social contribution?

A

Kito addresses the universal problem of gaining freedom from the constraints ofgravity through highly durable products that support maximum safety on the job.
They are used as human-assist machines in all industries for a broad variety ofpurposes, from manufacturing to building social infrastructure. Through clean,waste-free production and supply processes, Kito works to reduce its impact on
the environment and contributes widely to society.

PickupKito'sofficial
account

Equipped with permanent magnets, a single unit isenough for safe, reliable handling of both flat andround steel.

MOVIE

We pick up the latest featured videos.

A Kito Porta Gantry Crane (RAPIDE type) is assembled in just 90 seconds.

10

ーC o l u m n ーKito by the Numbers

The characteristics and evolution of Kito operations are illustrated in numbers.

Advantages of the2.8 d pitch'Pitch' in chain parlance refers to the internal length of a chain link. Where theindustry standard is 3d (length three times the wire diameter), Kito makes its
links shorter at 2.8d, the optimal size for lever hoists and electric chain hoists. Ashorter pitch allows for a smaller load sheave, which winds the chain, making amore compact hoist. A smaller hoist is easier for the operator to handle, makingthe work safer.

■ About the Cover Photo

Former Antarctic observation vessel Shirase
Shirase was the third-generation Japanese Antarctic observation
vessel. During its service, the ship made 25 roundtrips between
Japan and the Antarctic continent. The ship has been permanently
docked at the Port of Funabashi, its name now painted in Roman
characters on the hull in addition to the original Japanese hiragana.

Kito Corporation

Corporate Communication Department
Kito IR

Search https://kito.com/irTokyo
Shinjuku NS Building 9F, 2-4-1
Head Ofﬁce Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-0809, Japan
Tel: +81-3-5908-0161

Yamanashi 2000, Tsuijiarai, Showa-cho, Nakakoma-gun,
Head Ofﬁce Yamanashi 409-3853, Japanand Factory Tel: +81-55-275-7521