Meeting Materials for FY2018
May 17, 2019
KYB Corporation(Stock Code: 7242; First Section of Tokyo Stock Exchange)1Regarding a Series of Improper Actions

In October 2018, it has come to light that some of our seismic
isolation/mitigation oil dampers products that do not conform to performance
evaluation standards approved by the Ministry of Land, Infrastructure,
Transport and Tourism (MLIT), or the standards of our customers where
installed in buildings through falsification of performance inspection record
data.

Also, in January of 2019, we reported the fact that we made inappropriate
claim to Japan’s Ministry of Defense for a contract relating to defense
equipment.
We express our deepest apologies for having caused great concern andinconvenience for all those involved.

2

Contents

1. About nonconforming acts in the inspection process forseismic isolation/mitigation oil dampers for buildings

2. Business situation

3. Financial Information

3

Contents

1. About nonconforming acts in the inspection process forseismic isolation/mitigation oil dampers for buildings

2. Business situation

3. Financial Information

4

Outline of Nonconforming Acts
How the incident happened
For some seismic isolation/mitigation oil dampers, coefficients were falsified, or measurement
results were arbitrarily increased or decreased by adjusting the starting point and made tovary so as to fall within the intended range. Due to this improper act, products that did notconform to the standards set by Japan’s Ministry of Land, Infrastructure, Transport andTourism, or did not meet the standard values set by customers, were installed in buildings.

Number of nonconforming and unknown products as well as affected buildings(As of March 15)
Nonconforming products *1(1) Nonconforming tocertification by Minister(2) Out ofcustomer standards(1)-(3) Total

Seismic isolation oil
damper246 buildings

371 buildings

241 buildings

858 buildings

1,058 units

3,056 units

3,426 units

7,540 units

Seismic mitigation oil
damper―30 buildings

110 buildings

140 buildings―

244 units

4,569 units

4,813 units

246 buildings

401 buildings

351 buildings

998 buildings

1,058 units

3,300 units

7,995 units

12,353 units

Total*1 There is no minister certification system for seismic mitigation oil dampers.

5(3) Unknown

Progress
Response progress (As of May 15)
Number of affectedbuildings

Progress

Explanation to owners

998 buildings

950 buildings (95% complete)

Confirmed structure
safety809 buildings

731 buildings (90% complete) confirmed bythird-party agency

Brought up to
conformity

998 buildings

60 buildings (6%) conformity work completed
129 buildings (13%) conformity work underway

Change in production volumes(Unit)
Production capacity for new products

600
500
400
300
200
100

April onward: Commence production of conforming products
for completed buildings (Moved forward one month)

Until Sept. 2020
Finish producing products for completed buildings

0

6

'19/4

'19/5

'19/6

'19/7

'19/8

'19/9

'19/10 '19/11 '19/12

'20/1

'20/2

'20/3

'20/4

'20/5

'20/6

'20/7

'20/8

'20/9

Prevention Policies
Cause Analysis

Prevention Policies

1. Lack of compliance awareness2. Corporate culture looks away frominconvenient truths

Strictly build an complianceawareness, reform
corporate culture

Establish compliance management
Change in thinking for all directors and executives

3. Management focused on receiving orders
Balanced business operation system
4. Lack of inspections
5. Lack of nonconforming act preventions in
inspection machines

Evaluate business feasibility,
revise our business
operation systems as well as
information sharing systems

Carry our personnel rotations

Establish information absorption/feedback system
6. Incomplete information sharing system
7. Monopolization of important business

8. 1) Deficient quality inspections
2) Lack of inspections for similar
nonconforming instances related toquality

9. Problems related to commercialization

7

Improve inspection systems
Improve inspection
systems/methods
Prevention measures for inspection machines

Strengthening internal
audits/regulation systems

Strengthen internal quality inspection system
Strengthen subsidiary management system

Contents

1. About nonconforming acts in the inspection process forseismic isolation/mitigation oil dampers for buildings

2. Business situation

3. Financial Information

8

FY2018 Financial Summary
IFRS(¥ Billion)

FY2017

Previous
periodPrevious
forecast

412.2

18.5

(3.8)

21.3

22.0

(0.9)

0.7

(10.0)(24.8)(40.0)(14.8)

ActualForecast(Feb. 13, 2019)

Net Sales

393.7

416.0

Segment profits*

22.9

Profit (loss) attributableto owners of the parent

15.2*Segment profits correspond to operating income in JGAAP

9

Differences

FY2018ActualProgress with the 2017 Medium-term Management
Plan (Looking back on the past two years)
Positive factors

 Value-added products for automobiles introduced to themarket Goal completion in sight for transfer of control andconcentration of product lines for construction machinery
Negative factors

 Delay in structural reforms of unprofitable business
operations
 Production delays cased by far greater growth inconstruction machinery demand than expected Occurrences of improper acts in non-core business10

Progress withthe 2017 Medium-term Management Plan
IFRS(¥ Billion)

FY2017
Actual

FY2019Forecast

FY2019 Target(Announced May 2017)

Net Sales

393.7

412.2

410.0

398.0

Segment profits*

22.9

22.0

20.6

26.0

(Segment profits ratio)

5.8%

5.3%

5.0%

6.5%

ROE

8.8%

―

8.4%

10.0%

*Segment profits correspond to operating income in JGAAP11

FY2018ActualBasic Policy for FY2019
Efforts to focus on in FY 2019

 Compliance awareness and thoroughly ensure that safety
has maximum priority to entrenched in the corporate
culture Quickly respond to incident of seismic isolation/mitigation
oil dampers
 Policy decisions including withdrawing from unprofitablebusinesses/plants, collective reorganization, andspecialization in core business Develop new competitive product lines and promote
innovative monozukuri

 Overcome reforms that may be painful, shift to abusiness constitution that generates profits
12

Ideal Status: Next Mid-term Management Plan
High profitability
Railroad
Construction
machinery

Railroad

Construction
machineryBusiness environment =Market share × Market growthBusiness environment
downturn

SA
ＳＡ（市販）(Aftermarket)

CVT
Motorcycle

Special-purpose
vehiclesBusiness environment
upswingEPS

SA (OE)
Aircraft
Motorcycle
EPS

13

Low profitability

SA: Shock Absorber2017 Mid-term Plan Initiatives (AC Operations)Mid-term PolicyPlan long-term growth trajectory by reorganizing plants/companies to match the shifts incustomer demand areas and development and sales promotion of value-added products

Key Initiatives
Accomplish drastic structural reforms
 Optimized layout that brings together market, customer, and business strategies
・ Reorganization in Europe: Carry out business reorganizations at each plant and office to achieve maximum
profits in Europe
・ Motorcycle Business: Concentrate operations in optimum production base, aiming for global profit
maximization.
・ EPS Business: Carry out business reorganizations to improve profits(Cooperative industry with Chenlong)

Stabilize revenue base
 Global specification integration for volume sale shock absorbers
 Increase productivity through innovative shock absorber monozukuri (Aftermarket production line)

Sustainable growth14 Secure orders / promote sales for value-added products Secure orders / promote sales for products for SUVs, EVs, and pickup trucks, which areshowing an expansion trend

Development of Value-added Products

1
2
3
4

15

Electronic Control Suspension
Toyota Project Award, Engineering Division
By applying electronic modulated suspension to the independently
variable orifice , this new product achieves both increased damping forthe control band and noise reduction. Really not sure about this wholeparagraph. I did some research but we should check with the client.

DHS (Double Hydraulic Stop)
PSA Supplier Awards
By attenuating energy at the suspension stroke’s maximum extension or
retraction, the DHS allows for a comfortable ride on any road surface
without sacrificing maneuverability.

Swing Valve (ultra-low velocity valve )Toyota Project Award, Engineering DivisionThis world-first non-seated swing valve applies oil pressure from an
extremely low operation speed of only 2 mm per second, allowing it toadjust to minor unevenness in road surfaces. It offers the very best in
ride comfort.

Prosmooth (Sliding part improvement )Toyota Project Award, Engineering Division
KYB developed a sliding part used for suspension that applies theappropriate amount of frictional force in response to the lateral load. It
raises maneuverability and ride feel to a whole new level.

June 27, 2018

Toyota Project Award
Awarded for Electronic Control
Suspension for Toyota Crown
Evaluations from motor journalists

A: The ride feel is improved in subtle
ways that can’t simply bemeasured with instruments. (Swing
valve)
B: The ride feel is like walking on an
expensive carpet . (Swing valve)
C: There’s nothing in the same class.
It makes a normal car ride like aluxury vehicle. (Prosmooth)
D: This newly developed,
groundbreaking oil shock absorberdelivers an incredible ride feel
(Prosmooth)Sales Expansion Plan for Value-added Products

Premium Segment

SUV / EV

SUV / minivan

SUV / EV

Current sales promotions in Japan,
Europe, the United States, and China
Note: Number of customers targeted

1. Electronic Control Suspension
Received Project Award for Toyota Crown

2. DHS (Double Hydraulic Stop)
Received PSA Supplier Award

12

3

Mass
production

North America

Receiveorders

Japan

Trial
production

China

Proposal

Europe1. Electronic Control Suspension

2

11

2.DHS (Compression Stop)

2(Citroen C4 Cactus / C5 Aircross)

3. Swing Valve (ultra-low velocity valve )Received Project Award for Lexus ES

4.

(Sliding part improvement)
Received Project Award for Toyota Corolla

16

3.Swing Valve

12

1

11

2

1
1

1

2.DHS (Rebound Stop)
4. Prosmooth(Bearing bush/piston band)

Expanding to reach outside of Japan to secure a global position—aiming to increase orders

Increase productivity through innovative
shock absorber monozukuri
Innovative monozukuri road map
1st term

2nd term

3rd term

Final term
Full automation

Red: IoT related technology

Autonomous driving / IoT-optimizing control (AI: 2 step) ★
Overseas expansion
AI control ★
IoT Cloud / communication control ★

Overseas expansion

Tech. Items★ IoT equipment predictive control (AI: 1step)★ IoT remote control★ Detect defects (basic AI)★ IoT monitoring control

30% decrease inprocessing cost

加工費 30％減

Overseas expansion
Domestic expansion
Development of innovative line

★ Robot control

Development line (BM)17

BM personnel rate -35%

BM personnel rate -70%

Increase level of automation toward full automation

Full無人化
automation

2017 Mid-term Plan Initiatives (HC Operations)Mid-term Policy
Stable sales unaffected by market changes, ensure profits
Strengthen sales promotions for growth markets which we were not active while staying based in excavators

Key Initiatives
Accomplish drastic structural reforms / Stabilize revenue base Transfer of medium-sized excavator control valves—complete transfer scheduled for October 2019
 Concentration of motor products: Reorganization layout determined, including China plant, work
started on establishing operations
Sept. 2020: Reorganization to achieve concentration scheduled to be completed[ Efficiency by transferring and concentrating ]• Forecast of 47% increase in sales and 55% increase in profits for targeted products (FY2021)• Increase volume/productivity by building an integrated casting and machining/assembly line, end
transport between plants, results from returning loaned plants• Shorten development periods by integrating production and development facilities, improve productstrength Also for products used in mini and large-sized excavators, we are working to build a businessconstitution that can remain unaffected by market fluctuations.

Sustainable growth Promote sales activities for non-production machinery products
18

Stabilize revenue base: Sales Promotions for
Regional Chinese and Non-Japanese Makers
Together with rapid progress being made by regional Chinese and non-Japanesemakers in the Chinese market, KYB’s orders are increasing.
Trends in sales for the Chinese market

Trends in the Chinese excavator market(Thousand units)
250

Japanese
日系
Non-Japanese
外資系
Regional Chinese
中国地場系
Regional Chinese Ratio (%)
中国地場比率（%）

60%(¥ Billion)
20
200Japanese
日系

200

Non-Japanese
外資系

150
15

中国地場系
Regional Chinese

40%
150
10
100
100

20%
505

50

0
(CY) 2010 2011 2012 2013 2014 2015 2016 2017 2018

19

0%

0
FY2014FY2015FY2016FY2017FY2018

Stabilize revenue base:Mini and Ultra-Large-Sized Excavators
Maintain a high share in mini and ultra-large-sized excavators, for which stabledemand is forecast to continue, through increasing volume
Number of Cylinder Production per Day
for Mini and Ultra-Large Sized Excavators

Global Demand for Hydraulic Excavators(Thousand
万台 units)

千(Hundred百台
units)

40
400

32

12

ミニショベル（左軸）
Mini (left scale)(Units/month)
本/月Ultra-large-sized (right scale)
超大型（右軸）1030030Mid-to-large (left scale)

8

25
250
100 tons over (right scale)

20
200
15
150

4

10
100

Share
55% or more

120

28
100
26

24

Share
40% or more

80
60
40

Mini (left scale)

2

5
50
0
FY2014

6

160
140

30

350
35

20

(Thousand
千本/月
units/month)

22
20

0
FY2015FY2016FY2017FY2018FY201920

0

Contents

1. About nonconforming acts in the inspection process forseismic isolation/mitigation oil dampers for buildings

2. Business situation

3. Financial Information

21

FY2018 Financial Highlights
Consolidated performance Looking at net sales in FY2018, there was a year on year increase insales due to higher volumes, especially for products for construction
machinery and automotive shock absorbers. Segment profits declined
slightly year on year. With the extraordinary loss triggered by thenonconforming acts related to seismic isolation/mitigation oil dampers,
net loss for the year was ¥24.8 billion.
AC Operations

 In FY2018, sales increase due to rising volumes, focused on theEuropean region. However, our consolidated subsidiary in Brazil was indeficit, causing a year on year decrease in segment profits.
HC Operations
 In FY2018, the construction machinery market was favorable, driving
sales higher year on year. Segment profits increased year on year
despite the impact of an increase in costs triggered by a production
increase.
22

FY2018 Financial Summary
IFRS(¥ Billion)

FY2017

Differences

FY2018Previous
periodPrevious
forecast

412.2

18.5

(3.8)

21.3

22.0

(0.9)

0.7

5.8%

5.1%

5.3%

(0.5)%

0.2%

Operating profit

20.9(12.0)△28.5(49.4)(16.5)

Profit (loss) attributable toowners of the parent

15.2(10.0)△24.8(40.0)(14.8)

ROE

8.8%

―

―

―

―

Dividend (¥)

150

―

0

(150)

―

110.85129.70109.61127.86110.91128.40

ActualForecast(Feb. 13, 2019)

Net Sales

393.7

416.0

Segment profits*

22.9(Segment profits ratio)

ActualFOREX(Average) (¥)

JPY/ US$JPY/ EUR*Segment profits correspond to operating income in JGAAP23

FY2018 Changes in Operating Profits(¥ Billion)(0.9)(41.2)

20.9(28.5)(4.3)

FY20172017年度Operating
営業利益
profit（実績）(actual)24

Provisions for
Segment
Lossesproduct
warranties
セグメント
免震・制振用
米国独占
profitrelated torelated
to
利益
オイル
禁止法
U.S.
nonconforming
ダンパー
関連損失
Antitrustacts for seismic
Law
不適切行為
isolation/mitigation
violation
oilに関する
dampers,
製品保証引当Product
金繰入額・製
guarantee
countermeasure
品保証
costs
対策費

(2.2)

(7.6)

6.2

Provision on Gain on sales
Impairment
減損損失 防衛装備品関
固定資産
of fixed
allowance forloss（戻入益(Including 連損失引当金
売却益
assetslosses related
profit
from
含む）
to繰入額
defensereversal )equipment

0.6

Other
その他
expenses

FY20182018年度Operating
営業利益
profit（実績）(actual)Impact of Nonconforming Acts Related to Seismic
Isolation/mitigation Oil Dampers on Performance(¥ Billion)

Items
Replacement
manufacturing
expense

Details

Provision for
product
guarantee

FY2018ActualManufacturing costs for isolation dampers
Replacement costs for isolation dampers
Manufacturing costs for mitigation dampers

1.2

20.6

21.8

Compensation costs

―

8.0

8.0

1.7

1.2

2.9

Construction period insurance fees

0.8

3.0

3.8

Outsourcing costs

0.3

2.0

2.3

Other

―

0.4

0.4

travel expenses, etc.)

2.0

―

2.0

Total

6.0

35.1

41.1

本件による業績への影響
Repairs costs
Structure recalculation costs

Costs forcountermeasuresagainst this issue
Other (personnel expenses,

25

Product
guarantee
countermeasurecosts

FY2018 Net Sales and Segment Profits(¥ Billion)ACHC

SV, A&S

Total(IFRS)FY2017
Actual

FY2018ActualNet Sales

243.7

245.8

2.1

Segment Profits

10.6

9.8

(0.8)

Net Sales

122.8

140.6

17.8

Segment Profits

11.3

11.9

0.6

Net Sales

27.2

25.8

(1.4)

Segment Profits

1.0

0.3

(0.7)

Net Sales

393.7

412.2

18.5

Segment Profits

22.9

22.0

(0.9)

AC: Automotive Components
HC: Hydraulic Components
SV, A&S: Special-purpose vehicles, hydraulic equipment for aircraft, and system product and electronic components

26

Differences

FY2018 Net Sales by Region(¥ Billion)

Differences
Previous period

393.7

412.2

53.3
29.9
34.3
36.3

52.3
31.7
40.1
36.7

61.3

66.8

178.7

184.7

FY20172017年度Actual実績

FY20182018年度Actual
実績

Overseas Sales Ratio
54.6%  55.2%
27

その他
Other

(1.9)%

東南アジア
Southeast Asia

6.1%

中国
China

16.9%

米国
America

1.0%

Europe
欧州

9.0%

Japan
日本

3.4%

Financial Forecast for FY2019
IFRS(¥ Billion)

Differences

FY2019FY2018ActualForecast

Previous period

Net Sales

412.2

410.0

(2.2)

Segment profits*

22.0

20.6

(1.4)

(Segment profits ratio)

5.3%

5.0%

(0.3)%

Operating profit(28.5)

19.4

47.9

Profit (loss) attributable toowners of the parent(24.8)

14.0

38.8

ROE

―

8.4%

―

Dividend (¥)

0

―

―

110.91128.40105.00122.00FOREX(Average) (¥)

JPY/ US$JPY/ EUR*Segment profits correspond to operating income in JGAAP28

If costs occur due to the nonconforming acts in the inspection process for seismic isolation/mitigation
oil dampers, it is possible they will have a major impact on consolidated performance.

FY2019 Changes in Operating Profits Forecast(¥ Billion)

7.6
38.7

4.3

(6.2)

2.6

2.3
19.4

(28.5)(1.4)
FY20182018年度Operatingprofit
営業利益(actual)（実績）

29

Provisions for
Segment
LossesImpairment Provision on
warranties 米国独占
related to loss
セグメント
免震・制振
減損損失
profit product(Including 防衛装備品関allowance forrelated
to
U.S.
利益
オイル
禁止法
（戻入益含む）profit from 連損失引当金
losses related
nonconforming
Antitrustreversal )
ダンパー
関連損失
to繰入額
defenseacts for seismic
Law violationequipment
不適切行為
isolation/mitigation
oilに関する
dampers,
製品保証引当Product
guarantee
金繰入額・製
countermeasure
品保証
costs
対策費

Gain on sales
固定資産
of fixed
売却益
assetsOther
その他
expenses

FY20192019年度Operating
営業利益
profit（見通し）(forecast)FY2019 Net Sales and Segment Profits Forecast(¥ Billion)AC(IFRS)

SV, A&S

Total

30

FY2019Forecast

Differences

245.8

240.5

(5.3)

9.8

8.4

(1.4)

Net Sales

140.6

142.3

1.7

Segment Profits

11.9

11.6

(0.3)

Net Sales

25.8

27.2

1.4

Segment Profits

0.3

0.6

0.3

Net Sales

412.2

410.0

(2.2)

Segment Profits

22.0

20.6

(1.4)

Net Sales
Segment ProfitsHC

FY2018Actual

AC: Automotive Components
HC: Hydraulic Components
SV, A&S: Special-purpose vehicles, hydraulic equipment for aircraft, and system product and electronic components

Segment Profits
In FY2017 onward, transition to a stable situation where segment profits
exceed the ¥20 billion level.
(¥ Billion)

22.9

31

17.6

18.6

2015年度FY2015
Actual実績

2016年度FY2016
Actual実績

2017年度FY2017
Actual
実績

21.3

22.0

2018年度FY2018
Forecast
見通し（2月時点）

2018年度FY2018Actual
実績(Feb. 2019)20.6

2019年度FY2019Forecast
見通しCautionary Statement

This report contains forward-looking statements, including KYB’s plans
and strategies, as well as statements that report historical results.
Forward-looking statements involve such known and unknown risks anduncertainties as economic conditions; currency exchange rates; laws,
regulations, and government policies; and political instability in principal
markets.
For further information, please contact to:Investor Relations Sect., Finance Dept.
Tel: +81-3-3435-3580
32

Appendix

Seismic isolation/mitigation
Seismic isolation/mitigation
Seismic isolation

Seismic
isolation layer

Support material

Seismic
motion地震動

Damping material

Seismic mitigation

Damping
material

33

Seismic motion

Structure that prevents transmission of undergroundvibrations by establishing a seismic isolation layer andconnecting the building to the ground using support materials
and assisting damping materials.
Support materials made of laminated rubber, etc. prevent thetransmission of power to the building by being deformed by
the power of the ground and moving horizontally.
Depending on the scale and structure of a building, damping
materials such as oil dampers are added to support materials,
thereby curtailing vibration and excessive deformation of theseismic isolation layer.

Structure that mitigates vibration of the building by wind or
earthquake through the placement of damping materials oneach floor.
Damping materials such as oil dampers mitigate vibration byabsorbing power from the wind or an earthquake, therefore
curtailing the deformation of each floor of the building.

Appendix

Progress with preventive measure policies
Category

Item

Improve inspection systems

・Started quality inspections by the Quality Assurance
Dept. in December 1, 2018.
・Continued 100% on-site inspections by third party
organizations (Isolation products: From September 28,
2018; Mitigation products: From November 29, 2018)

Prevention measures forinspection machines

・Established rules for in-house process for software
updates of the oil damper inspection machines
・Considering automation of inspection process(Currently, raw data and laboratory test results for all
shipped items are collated by the person in charge of
quality assurance)

Strengthen internal quality
inspection system

・Commence monthly onsite quality inspection for KSM
by KYB’s Quality Div. (Audit on March 26-27, April 19)

Strengthen subsidiarymanagement system

・Established internal controls department
・Completed establishment of Special Audit Committee
for Non-Compliance Risks
・Held discussions on detecting and preventing
improper acts at the Domestic Affiliated Company
Management Committee

Improveinspection
systems/methods

Strengthening
internal
audits/regulation
systems

34

Major item to implement or status

Appendix

Prevention Policies:

Strengthen Internal Control systems
Impartial organization

Managing Executives Organization

Independentof Managing
Executives

Board of Directors

SupervisionNon-compliance risk selection/proposal of measures

Non-compliance risk
KYB President

Non-compliance risk selection responsibility
Investigation directions

Chair

Committee Member(Outside director)(Chairman / President)

Audit Dept.

Progress report

Board of Executives

The Special Audit Committee for
Non-Compliance Risks

Committee Member

Secretariat(Outside Director)(Audit Dept.)

Non-compliance risk investigation
Committee Member(Audit Control Officer)

Chief Compliance Officer

Risk/compliance management

Observer
(Auditor)

Risk Management Committee
Business operations

Head Office
Function Depts.

Each Div. office (HQ)Group companies

Compliance officer

35(CSR & Safety Control
Div. GM)

Secretariat: Internal Controls Dept.

Details, evaluation, andmanagement of risks

Compliance key person

Committee Member

Internal Controls
Dept.
Strengthening
supportconcerningcompliance /governance(In the future, consider
expansion of / transition
to standing Compliance
Committee)

Support asneededJ-SOX
officeSupport as needed

Outside Specialist

Outside Directors / Outside Auditors

Newly established in April 1, 2019

Appendix

Demand Forecast
Automobile Production Forecast(Million units)

95
3
3
13

17

6 tons and over
95

96

2
3

2
4

3
4

13

13

93

17

17

13

16

99
3
4
14

Middle East, Africa
中東・アフリカ

ASEAN, India
ASEAN・インド
North America
北米

17

26

28

28

27.5
21.5

9
FY17

36

22

10
FY18

22

10
FY19

22

9
FY20

34.3

33.8

7.1

7.1

18.7

17.8

33.8

7.1

5.9
7.9

Europe
欧州

2.9
2.5
2.3

3.0
2.7
2.6

3.1
3.1
2.3

3.1
3.5
2.3

FY16

FY17

FY18

FY19

30

22

9
FY21

Source: IHS (the end of Mar. 2019)

Other emerging

他新興国
economies
China
中国
Europe欧州
North America
北米
Japan
日本

12.2

China
中国

FY20

Less than 6 tons

13.6

22

(Ten thousand units)South America
南米

Japan
日本

28

Demand for Hydraulic Excavators Forecast

1.7
1.2

17.0

17.1

14.8

2.0

1.9

2.0
2.0

3.0

2.8

4.7

4.7

4.2

4.2

3.2

3.3

4.0

4.4

3.3

3.4

3.4

3.5

FY16

FY17

FY18

FY19

17.1

Other emerging
他新興国
economies
中国
China
Europe欧州
North America
北米
Japan
日本

FY20

Source: KYB’s forecast, based on customer data

Appendix

FY2018 Net Sales and Segment Profits
FY2017
Actual

FY2018ActualNet Sales

243.7

245.8

Shock absorbers for automobiles

163.1
30.0
45.7
4.9

169.7
29.1
42.1
5.0

10.6
122.8

9.8
140.6

114.3
8.5

132.3
8.3

11.3
27.2

11.9
25.8

9.6
6.4

9.1
5.6

2.1
6.6
(1.0)
(3.6)
0.1
(0.8)
17.8
18.0
(0.2)
0.6
(1.4)
(0.4)
(0.7)

11.3

11.0

(0.3)

1.0
393.7
22.9

0.3
412.2
22.0

(0.7)
18.5
(0.9)

(¥ Billion)

AC

IFRS

Shock absorbers for motorcycles
Hydraulic equipment for automobiles
OthersSegment ProfitsHC

Net Sales
Hydraulic equipment for industrial use

OthersSegment Profits

SV, A&S

Net Sales
Special-purpose Vehicles
Hydraulic equipment for aircraft
System products and electronic
components, etc.

Segment Profits

Total

Net Sales
Segment Profits

37

AC: Automotive Components
HC: Hydraulic Components
SV, A&S: Special-purpose vehicles, hydraulic equipment for aircraft, and system product and electronic components

Differences

Appendix

Financial Forecast for FY2019(¥ Billion)

AC

IFRS

240.5

Shock absorbers for automobiles

169.7
29.1
42.1
5.0

173.0
28.8
32.9
5.9

9.8
140.6

8.4
142.3

132.3
8.3

134.1
8.2

11.9
25.8

11.6
27.2

Hydraulic equipment for aircraft

9.1
5.6

10.7
6.1

(5.3)
3.3
(0.3)
(9.2)
0.8
(1.4)
1.7
1.8
(0.2)
(0.3)
1.4
1.6
0.5

System products and electronic
components, etc.

11.0

10.4

(0.7)

0.3
412.2
22.0

0.6
410.0
20.6

0.3
(2.2)
(1.4)

OthersSegment Profits
Net Sales
Hydraulic equipment for industrial use
OthersSegment Profits
Net Sales
Special-purpose Vehicles

Segment Profits

Total

Net Sales
Segment Profits

38

Differences

245.8

Hydraulic equipment for automobiles

SV, A&S

FY2019Forecast

Net Sales
Shock absorbers for motorcycles

HC

FY2018Actual

AC: Automotive Components
HC: Hydraulic Components
SV, A&S: Special-purpose vehicles, hydraulic equipment for aircraft, and system product and electronic components

Appendix

Financial Data
Adoption of IFRS since FY2015
Capital Expenditure, Depreciation(￥ billion)
FY2012FY2013

FY2014FY2015FY2016FY2017FY2018

Capital Expenditure

39.22

29.91

29.79

21.30

18.20

18.49

22.67

Depreciation Exp.

14.55

17.29

16.49

17.08

15.92

16.99

17.58

"Capital expenditure"and "Depreciation exp."= invested and depreciated in property, plant and equipment

FY201910.00 (*1）
18.40
(Est.)(*1）The estimation of "Capital Expenditure in FY2018 Total" is on order basis. Actual figures were calculated on inspection basis.

Interest-bearing Debt(￥ billion)
FY2012
Interest-bearing Debt

92.95

FY201388.81

FY2014FY2015

92.45

91.69

FY201693.56

FY201794.64

FY2018108.63

R&D Expenses(￥ billion)
FY2012
R&D Expenses

5.47

FY2013
6.92

FY20148.91

FY20157.76

FY2016
7.62

FY20178.10

FY2018FY20196.75

6.80(Est.)

Number of Employees
FY2012
Number of Employees

12,306FY2013
13,033

FY2014
13,732FY2015
13,796FY2016
14,350FY2017
14,754FY201815,427

Foreign Exchange Rate
FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019Average FOREX Rate - JPY/USD

83.11

100.24109.93120.15108.38110.85110.91105.00

Average FOREX Rate - JPY/EUR

107.14134.37138.77132.57118.79129.70128.40122.00

Average FOREX Rate - JPY/CNY

13.22

16.40

17.73

18.85

16.10

16.74

16.53

15.50

Average FOREX Rate - JPY/THB

2.70

3.19

3.38

3.44

3.08

3.35

3.43

3.25

Average FOREX Rate - JPY/RUB

2.82

3.03

2.53

1.91

1.72

1.91

1.71

39

1.60
(Est.)

Appendix

Net Sales by Region(￥ billion)

AC
Japan

1st Half
2nd Half
Total
Europe1st Half
2nd Half
Total
America 1st Half
2nd Half
Total
China
1st Half
2nd Half
Total
South East 1st HalfAsia
2nd Half
Total
Others
1st Half
2nd Half
Total
Total
1st Half
2nd Half
Total

40

35
39
74
28
28
55
15
14
29
8
9
18
13
14
27
20
20
40
120
124
244

FY2017
HC
Others
40
10
43
12
83
22
3
0
3
0
6
0
3
0
4
0
7
1
7
0
10
0
17
0
1
0
1
0
3
0
4
2
4
3
8
5
57
12
65
15
123
27

Total
85
94
179
30
31
61
18
18
36
15
19
34
15
15
30
26
27
53
189
204
394

AC
36
37
73
30
28
59
14
14
28
9
9
18
14
15
29
20
19
40
124
122
246

FY2018HC
Others
44
9
48
11
91
21
4
0
4
0
8
0
4
0
4
1
7
1
11
0
12
0
22
0
1
0
1
0
3
0
4
2
4
2
9
4
67
12
73
14
141
26

Total
89
96
185
34
33
67
18
18
37
20
20
40
15
17
32
26
26
52
203
209
412

Appendix

Total equity attributable to owners of the parent
Total equity attributable to owners of the parent
親会社の所有者に帰属する持分(¥ Billion)

41

148.3

164.3

180.2

2015年度FY2015
実績
Actual2016年度FY2016
実績
Actual2017年度FY2017
実績
Actual149.3

2018年度FY2018
実績
Actual