Kito Corporation
FY2020 Interim Business Report
April 1, 2020

TSE: 6409

September 30, 2020

To Our Shareholders

As a result of thorough cost control and continuous compression of fixed
costs, we were able to increase profit by more than our initial target. We also
increased market share through greater customer-service effort in all markets,
while preparing our main production bases in Japan, the US and China to better
handle demand fluctuations, following a slow period caused by the pandemic.
Currently demand varies somewhat by region and industry, but we passed
the worst of the crisis in early spring and are moving on a gentle recovery path.
On the strength of our business portfolio, which is diverse by both region andindustry, we expect that earnings will gradually recover from the dip in the firsthalf of fiscal 2020.

Yoshio Kito,

President and CEO

The pandemic triggered a major shift not only in our lifestyles but the business environment as well, and the changes in society will likely accelerate in thefuture. But even in this environment Kito anticipates growth in operations byFirst let me express my heartfelt gratitude for your strong support of Kito. Sooncontinuing to offer solutions to the universal human need to be free from gravi-

after the beginning of fiscal 2020 we saw a substantial decline in economic ac-ty. Through our products that excel in safety and durability, waste-free, clean

tivity worldwide as a consequence of the Covid-19 pandemic. Despite the un-processes for producing and distributing them, and after-sale services based on

certain business environment, the Kito Group has been working to maintainmutually trusting relationships with our customers, Kito makes workplaces safer,stable operations, undertaking the following initiatives:

reduces environmental impact and contributes to society in broad ways.

- Active institution of a telework program with priority on employee safety and health- Across-the-board enhancement of cost control to secure profit- Enhanced control of order profitability and pursuit of added value while avoiding

Scan the QR code and watch the webcast archive ofFY2020 second-quarter financial results.

price-competition

0102

Business Highlights

Six months resultsJPY in million

ActualIR forecast onAug. 6, 2020

ChangeSales

22,041

21,000+5.0%

Operating income

1,247   650+91.8%Net income attributable to ownersof parent   166

   (500)-First half

Second half

JPY in billion

87.2

7.0

7.8

12

JPY in million(forecast)

Revised on
Oct. 16, 2020

Aug. 6, 2020

ChangeSales

50,00049,000+2.0%

Operating income

3,600

3,000+20.0%

Net income attributable to ownersof parent

1,700

1,100+54.5%- Tightly control costs and cash flow to secure profit, regardless of changes in demand.
- Maintain stable operations at production bases in Japan, the US, China and elsewhere to respondflexibly to demand fluctuations.

412.6

12.4(forecast)

6

9.5

5.6

Initiatives for Second Half of FY2020

03

Regional sales   

14.8

Full year forecast

Projections for FY2020 by Region

3.6
6

2020.32021.3

Japan32020.32021.3The Americas

3.1

3.2

3.1 (forecast)2020.32021.3China

Market-specific initiatives
In Japan we are seeing signs of recovery in demand related to infrastructure. We
will continue to invest in equipment for higher productivity while continuing action
to reduce fixed costs and reinforce earnings.
In the Americas, where orders are gradually recovering, we are working to expand
market share by continuously providing quality services.
In China, which was first to overcome the impact of the pandemic and resume
economic activity, we will secure equipment-investment demand in performingindustries.

04

Let’s Get to Know Kito Vol.3

Effort to achieve UN SDGs

The United Nations Sustainable Development Goals (SDGs), consisting of 17 goals

and 169 targets, demand active effort by corporations to address social concerns.
By maintaining the long-term view in its operations, Kito continuously works tomeet these needs.

Reducing Use ofOrganic Solvents

Hoist-Chain Production
at US Subsidiary

By changing our coatingprocesses, we have reduced
our use of organic solvents byroughly 80% relative to the2012 peak. We have been
making steady progress in
shifting to powder-coating,anticipating further reductionin organic-solvent use.

As an industry leader in North
America, Kito subsidiary Peerless
Industrial Group produces chain
used mainly for lifting and holding
loads. Recently it has started
producing chain for integration
into Kito hoists sold in North
America. The shift reduces leadtimes and cost for transportationfrom Japan.

Safety Training
Kito offers training programs forcustomers and distributors on how tooperate and maintain our products
correctly. Correct operations and regular
maintenance increase the life of alreadyhighly durable products while reducing
industrial waste.

New Heat-Processing Line
Reduces Energy Demand
We h a v e al s o in t ro duc e d avacuum-carburizing furnace to our
new heat- processing line tor e du c e t h e r i s k o f f ir e an deliminate the consumption ofenergy otherwise wasted for heatretention. The equipment bothmakes a safer workplace andhelps preserve the environment.

05

Prayer ceremony for safe operation of
the new vacuum-carburizing furnace

Special training program for overhead-crane
operations held at SEED Co., Ltd.

06

Kito Products Spotted!

Widely used in a broad
range of industries

Kito products evoke the image of hard work in manufacturing plants and on construction
sites. Below are actual examples of their service in a jet engine maintenance plant, a Finnish
water recycling facility, and at Japanese rental industry leader R&R.

■ Jet-Engine Maintenance Plant■ “ Rental demand resists the pandemic.”

Maintenance is essential for safe flights

There are 2,500-3,000 rental companies in Japan,every day. Here Kito cranes are used toand R&R rents chain hoists and other construction

move entire engines. The photo wasand industrial machinery to those rental firms. Until

taken during a load test. The load

the Covid-19 pandemic started affecting the econo-

hangs in a high-capacity Kito fabricmy, industrial machines were in full operation every-

sling introduced in 2019, which is light

where in Japan, as demand related to the Tokyoand easy to handle, winning positive

Olympic Games and energy-related construction

customer reviews for easier hoisting

peaked and transportation infrastructure was devel-operations.

oping. At that point private-sector equipment in-R&R
Senior Managing Director
Hideo Harada

vestment began to slow, postponing new construction projects and events related do
the Olympics. That said, we think the impact of the pandemic on the rental industry will
be relatively light. Now that power-plant construction has begun in metro Tokyo and theTokai region, many Kito products are back at work.

■ Water Recycling Facility
The water recycling facility chose Kito's low-headroom electric chain hoists to maintain this giant
pump. The unique structure of the hoist, with lessdead space, makes it particularly powerful forwork in narrow spaces and close to ceilings. Nickel-coating enhances its rust-resistance.

0708

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 productsand Group activities, as well as stories of wider investor interest.

Aug 11, 2020 13:13

Sep 18, 2020 10:10

Q

Could you tell me about the online briefing for FY2020-Q1,
held on August 20 ?

AWe highlighted that the Chinese business is recovering rapidly, the Japanese andUS markets are gradually moving toward a recovery phase, and that there seems
almost no impact on the KITO Group's supply chain. The archived video andtranslated summary of Q&A session are available at; https://kito.com/irS o c i a lm e d i aQ

What listed issuers are comparable with Kito?

ADemand for Kito’s core products, hoists, comes primarily from manufacturing
plants and private-sector equipment investment for urban development and thelike, as well as government investment in roads, bridges and other infrastructure.
This leads some investors to compare Kito with industrial machine manufacturers, others with construction machine makers. Comparison with other Japanesehoist makers is difficult because Kito is the only hoist maker listed on the Japanese stock market. Without depending on any specific industry or industrial demand, Kito has an exceptionally broad customer base and production and sales
bases worldwide. Many investors take those points into consideration and favor
our widely risk-hedged operations in their investment decisions.

Kito-Group companies regularly share information on their activities and hardworking employees via Facebook, Twitter and Instagram. Here are some hot articles thatappeared in the second half of FY2020.

Kito’s global website shows Kito from various angles,
through examples of the products used near us, on themanufacturing frontline and in employee minds.
Kito 360 https://kito.com/news/stories
We’ve added new content as well, including articles on Kito environmental policy, green procurement and Yamanashi Main Plant
action to protect the environment.
ESG/CSR https://kito.com/csr
Kito’s official account

Do Kito products have seven “faces?!” How are thelight-pink hoists used?

09

Theatrical hoists help set the stages for concerts andother performing arts. In black, the hoists never getin the way of stage directions.

10

ーC o l u m n ーKito by the Numbers

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

6= Number of non-Japanese
executive officers as of
September 2020.

Of the 15 executive officers in the Kito Group, six (40%) are from outside Japan.

Diverse human resources, who know their respective markets inside and out,
are well placed for optimal results.

■ About the Cover Photo

Safe, Comfortable Flights
The jet-maintenance plant in the picture uses over 100 systemcranes. Transfer cranes can move jet engines continuously, never touching the floor. Hoists with built-in servomotors help raise
the efficiency and precision of engine-part assembly.

Shareholder Memo
Annual shareholders meeting: March 31
Year-end dividend payment: March 31
Interim dividend payment: September 30

Record Dates

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