November 15, 2019
KYB Corporation
Stock Code: 7242; First Section of Tokyo Stock Exchange

Meeting Material 1H of FY2019 Briefing—Question and Answer Session
Date:Friday, November 15, 2019
KYB panel: Masao Ono, Representative Director, President Executive Officer
Takaaki Kato, Representative Director, Executive Vice President Executive Officer

1. Completion rate for bringing seismic isolation/mitigation dampers up to conformity
Q. Could you give us a breakdown of the completion rate for bringing dampers up to conformity,
separated by isolation units and mitigation units?
A. As of November 14, we have completed work on 236 buildings (approximately 24%).
Seismic isolation: 206 buildings (Approximately 24% for isolation units), Seismic mitigation: 30
buildings (Approximately 22% for mitigation units).
2. Breakdown of product guarantee countermeasures costs
Q. About the product guarantee countermeasures costs listed in the calculations under theFY2019 performance, please provide an itemization of the ¥5.0 billion listed in the 1H.
A. A breakdown would be ¥2.0 billion for manufacturing and replacement costs, ¥500 million forstructure recalculation costs, and ¥2.2 billion for personnel expenses and outsourcing costs.
3. Progress rate for seismic mitigation
Q. Are the cost calculations for seismic mitigation in accordance with the construction work, andwhen will you have an outlook on the entire project?
A. With seismic mitigation, it is necessary to deal with each unit on an individual basis. As such, anestimate based on a uniform calculation would not apply, so it is not possible to make areasonable calculation like we can with seismic isolation. We should be able to calculate anoutlook for the amount around the 1H of FY2020.
4. Changes in 1H profit composition (compared to the previous period) in AC Operations
and forecast for the next period
Q. Please explain the changes in 1H profit composition (compared to the previous period) in AC
Operations and forecast for the next period (such as the situation with the EPS business).
A. An increase in volume due to the launch of new car models in North America and increased
shipments to the Middle East market contributed to a rise in segment profits. However, in future
trends, there is uncertainty regarding the overall automobile market, so we will monitor thesituation with caution. In the EPS business, production has shifted from within Japan to China,
and is trending toward a reduced deficit.
5. Main cause of the increase in 1H segment profits in AC Operations
Q. Please explain the main cause of the increase in 1H segment profits (¥3 billion compared to theinitial plan for the period).
A. In addition to an increase in shipping volumes due to the launch of new car models, the maincause was that we made progress with improving profitability at unprofitable businesses.
6. Reorganization of the automotive industry
Q. Please tell us about your policies going forward amidst the progressing reorganization of theindustry.
A. We are placing highest priority on completing our work to bring seismic isolation/mitigation
dampers up to conformity and regaining trust.
Regarding our policies going forward, we are currently working on our next medium-termbusiness plan (for FY2020 to FY2022), and aiming to improve profits with our core businessesof AC and HC Operations as the pillar.
7. HC Operations’ China strategy (competition environment / sales prices)
Q. Please tell us about the competition environment with Chinese local manufacturers in themarket and changes to sales prices.
A. While Chinese local manufacturers in the market have emerged, there have been no majorchanges regarding sales prices. In the future, it is possible that demand across the entire
market may decline and price competition may become severe.
Q. Will there be any impact from the increase in local construction manufacturers?
A. We provide motor and pump products for customers in the China market. Therefore, weconsider the increase in share of local manufacturers in China to be a positive factor for KYB.