November 9, 2023
KYB Corporation
Stock Code: 7242 (Tokyo Stock Exchange)

Meeting Material 1H of FY2023 Briefing—Question and Answer Session
Date:Thursday, November 9, 2023

KYB panel: Masahiro Kawase, Representative Director, and President Chief Operating
Officer (COO)
Takashi Saito, Member of the Board of Directors, Senior Managing Executive
Officer, and Chief Financial Officer (CFO)

1．FY2023 First Half Performance, Forecast for Entire Fiscal YearQ.

As the forecast for FY2023 remains unchanged, the second-half profit increase islarger compared to the first-half performance. Please provide further details on this. In
particular, I’d like to know if cost increases in the United States are to improve in thesecond half, or if inflation costs are being passed on to sales prices.

A. ・We have already confirmed that the rate of quality defects we’ve faced in the UnitedStates will improve in the second half.
In our quality defect countermeasures going forward, we have decided to establish adamping force control center like the one in Japan at our overseas plants, including
our U.S. location.
・Regarding the equipment breakdowns in Mexico, a personnel responsible for
equipment was dispatched from Japan, and improvements are already underway. Inthe first half, we incurred temporary express delivery costs to address delays in orderfulfillment due to equipment breakdowns. However, this issue has been resolved as ofearly October, and it will essentially have no impact on the second half.
・Regarding passing on inflation costs to sales prices, we have had favorable progressin AC Operations, but have seen delays in negotiations with the quality defects related
to our U.S. location. However, for the most part, the prospects for passing on costs tosales prices in the second half look hopeful. Also, in HC Operations, the impact ofdelays in collections in the second half is not as large as in the first half of theprevious fiscal year, and we believe collections will be accomplished successfully.

Q.

In regards to the quality defects at the U.S. location, are there any retroactive impacts,
looking into the past? Also, have you received any complaints from customers forproducts that have already been sold?

A. ・It happened in the first half, so there are no retroactive effects on our pastperformance.
・As we are performing a 100% quality check in the final process of manufacturing
shock absorbers and can recognize defects, defective products are not sent to clients.
We have been delivering products of good quality to customers, and therefore have
not received complaints.

2．Activity for PBR improvement over 1x
Q.

We’d like to hear about the details of recent discussions regarding PBR improvement
over 1x.

A. ・We are conducting an analysis on the present condition of PBR falling below 1x, andhave made the second report to the Board of Directors. We are in the process ofdiscussing future measures for PBR improvement over 1x.
・Regarding return to shareholders, our first priority is to pay a stable dividend. Also, wewill consider conducting future share buybacks, as we did this fiscal year.
・Regarding cross-shareholdings, we are discussing gradually reducing and using themas cash for effective future investing.