Kito Corporation
FY2019 Business Report
April 1, 2019

TSE: 6409

March 31, 2020

To Our Shareholders

nomic activity worldwide. Its influence is reportedly deeper than any past recession. Kito is no exception, facing falling demand everywhere, but fortunately ourplants in Japan, the US and China have been operating normally, as are oursupply chains, from material purchases to final product supplies to customers.
Even in countries and regions where national or regional governments are restricting corporate operations, our operations are considered essential, to people's lives and therefore allowed to continue under certain restrictions. Our customer-service systems also remain close to normal in most regions.
The influence of the Covid-19 pandemic on global markets, prospects forrecovery and the approximate time that may happen vary significantly by industry and business sector. It is difficult to reasonably assess the impact on Kito's
overall operations at this time, so we decided to postpone our announcement

Yoshio Kito,

President and CEOof projected results and dividend for FY2020. We plan to do so in August instead, when we announce first-quarter results.
The pandemic triggered major changes in economic activity and people'slives. It's possible that after this is over a new society, different from any that hasFirst let me express my heartfelt gratitude for your strong support of Kito. The
fiscal year ended March 31, 2020 was one in which anxiety over the future ofinternational relationships and world economy grew from the beginning andwe've been seeing more caution about capital investment, especially in the automotive industry. In this environment, Kito operations remained strong, supported by demand in industries related to infrastructure, food and entertainment. In addition to slowing in Japan and other Asian markets since autumn andthe effect of the stronger yen, many markets worldwide were affected by theCovid-19 pandemic toward the end of the fiscal year. As a result, to my regret,existed before, may begin to form. Kito will continue to meet the universal need
to be free of gravity, responding flexibly to social change and demand trends invarious markets, and grow our operations. With our products of peerless safetyand durability, the waste-free, clean production and supply processes that create them, and after-sale services based on relationships of mutual trust we will
also continue to undertake a broad range of social contributions, not limited tobuilding safe work environments and our reducing environmental footprint.
In concluding, let me express my sincere wish that the Covid-19 pandemic
will end as soon as possible and those infected recover quickly.

Kito ended the year with year-on-year decreases in both sales and profit.
Spreading quickly around the globe, Covid-19 significantly depressed eco-01

Scan the code and watch the webcast archive of FY2019 financial results.

02

Business Highlights

FY2019 Financial Results

FY2019 Dividend(Unit: JPY in hundred million)

FY2019FY2018YoY change

The dividend for the year ended March 2020 is 24 yen per

Sales

587.2

612.3

(4.1%)

share, as we initially planned, and for the entire year it will

Operating Income

54.7

64.1

(14.6%)Net Income Attributable to Ownersof Parent

32.0

40.6

(21.2%)be 48 yen, up 4 yen year-on-year.

Annual Dividend (Payout Ratio)

44 JPY(22.1％)

Summary(30.6％)

24

Full year

24

InterimEarnings were down due to the chilling of the Japanese market since autumn andthe continuing appreciation of the yen.
48 JPY

24

Tire-chain demand at the US subsidiary dipped toward the end of the fiscal year
due to warm winter weather worldwide.
Because the effects of the Covid-19 pandemic began to show only in mid-March,
its affect on the FY2019 results are small.
Sales growth by market

20

Net sales ratio by region(Unit: JPY in hundred million)

03

10 JPY

Europe 5.9%

March 2020

March 2019

YoY changeJapan151.7

161.6(6.1%)

The Americas

273.3

276.6(1.2%)

China

68.2

65.3

4.3%

Asia

37.2

52.3(28.8%)

Europe

34.6

32.0

8.2%

Others21.9

24.3(9.6%)

Others 3.7%

Asia
6.4%

China
11.6%

March 2013

March 2019 March 2020

Japan
25.8%
March2020

The Americas
46.6%
Non Japanesemarkets 74.2%

We have not announced the dividend for FY2020 due to economic uncertainty at this time. We will set that amount with a comprehensive view basedon our consolidated earnings and financial health, maintaining our commitment to achieve 20% or higher payout ratio.

04

Let’s Get to Know Kito Vol.2

Manufac turing Reform at Kito
The Yamanashi Plant is the origin of Kito manufacturing.
Designating 2019 as Manufacturing Reform Year 1, the plantis enhancing our foundations of production, raising efficiency, advancing our production technologies and environmental awareness, and actively training our people. Theplant aims for a level of flexibility such that it can easily
respond to production increases and turn profits even when
production volume goes down.

05

1 | Higher productivity

3 | Production technology

The Yamanashi Plant pursues higher productivity by identifying and completely eliminating waste under an initiative to streamline internal transportation, produce parts in-house and conserve labor in our production processes. It reliably produces products of uniformly high performance in five
key criteria: quality, cost, delivery, safety, and environmental awareness.

The Yamanashi Plant is expanding its processing capabilities by introducing
state-of-the-art processes ands equipment on the core lines for heat-processing, aluminum processing and gear processing. By brushing up our production methods, we work to better respond to customer needs and market requirements.

2 | Pro-environment action

4 | Personnel training

The Yamanashi Plant is working on three themes: reduc tion of energy
consumption and CO2 emissions, reduction of environmentally hazardous
substances, and the establishment of safe workplaces. We have madesubstantial results by switching to energy-efficient equipment and reducing our use of organic solvents. While we work to reduce use of hazardous substances, we are also eliminating substances that carry risks of fire,explosion and other accidents. In this way we're building safe workplaces
where anyone can work with peace of mind.

We aim to be an organization where every employee can feel a sense of accomplishment, fulfillment and something to live for in his or her work, evenwhen it's hard. We offer our employees specialized technical training, applying the unique methods and processes of Kito manufacturing. To make theplant a school for engineers, we are improving both the work environment
and training programs. In this way the next generation of key manufacturingpersonnel are trained, creating a pool of professionals unparalleled in the industry.

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Kito Products Spotted!

Widely Used in a Variety ofIndustries
Assembly process of a Doctor-Heli

Kito products are thought to be mostly used at manufacturing floor and construction sites.
This time we would like to introduce you our products at three different locations where you
may feel a little surprised.

High Field Laboratory for Super-

A helicopter hangar was recently built on the premises of Mt. Fuji Shizuoka Airport, andconducting Materials

two Kito cranes, one rated for 2.8 tons and the other for 6 tons, were purchased toThe Tohoku University High Field Labora-maintain, repair and remodel helicopters there. The Doctor-Heli in the picture was thefirst assembled in the new hangar.

tory for Superconducting Materials is oneof the few open research facilities in theworld, and the only one in Japan,
equipped with more than 15 high-Tc
based field magnets. A Kito hoist is used
to lift the container holding the material
to be measured and the liquid helium in
it, and place it into a 52-millimeter holewhere the magnetic field is generated.

Manufacturing process of Denshupremier sake

A Kito light crane moves the ingredients formaking Denshu premier sake in the processof making moromi (pre-filtered fermentedrice mash) from shubo, which is steamed
rice mixed with koji (aspergillus), more rice
and water. With a little pull of the crane, capable of three-dimensional motion, the ingredients easily move into the neatly arranged brewing tanks. A wireless option
has increases the freedom of operation.

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 products and group activities, as well as those of wider investor interest.

Oct 17, 2019 10:53

Jan 30, 2020 09:12

Q

Tell us about Kito’s European operations.

Q

Tell us about the characteristics and advantages of Kito products.

AKito established its first European sales base in 2006. As a latecomer to this major international market, with its many competitors, we had to build out our product lines
while raising the profile of the Kito brand there. To be a provider of one-stop solutions in materials-handling, from core hoist products to cranes and accessories, wehave been adding local companies with strengths in these areas to the Group since2016. That effort has built a strong foundation in terms of products and customer
service, lately demonstrating new synergy with our four European subsidiaries. Taking advantage of these strengths, we are enhancing our European operations.

AKito products respond to the universal, never-ending need to lift, move and holdheavy loads, cutting across international and industry lines. We put the customer's
safety first, and provide durable products that can be as compact and light as they
can be. We are also strong in custom-built and high-performance products to suitspecific user environments and purposes, drawing very positive user evaluations
for their quality and ease of operation. By delivering products that our customers
can rely on over the long term with safety and confidence, Kito helps them control
cost while reducing industrial waste and other kinds of environmental impact.

S o c i a lm e d i a

Kito-Group companies regularly share information on their activities and hardworkingemployees on Facebook, Twitter and Instagram.
Here are some hot articles that appeared in second half of FY2019.

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 Plant action
to protect the environment.
ESG/CSR https://kito.com/csr
Kito's official account

Chain as long as Tokyo Tower is high! The chain forthis product is as long as 300 meters.

09

Technical exchange with engineers of the US groupcompany. The language barrier is overcome withheart-to-heart communication!

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ーC o l u m nーKito by the Numbers

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

6.77 %= Proportion of handicappedpeople in total workforce(as of June 2020)

Believing that the job opportunities a corporation offers are an important partof its social contribution, Kito puts special effort into hiring people with disabilities. Our basic labor policy is to build a culture and work environment in which

all people, with different personalities, abilities and disabilities, find it easy towork. Based on this we continually make workplace improvements as a concerted effort groupwide. Handicapped employees make up 6.77% of our total
workforce as of June 2020, far above the legal mandate of 2.2%.

■ About the Cover Photo

Introducing Bridge Cranes
The gantry crane runs on rails laid in the floor. It has two legs, aheavier "rigid" leg (left in the photo) and a thinner "swing" legwith a different structure. The two bridge cranes are used toload and unload 25-meter rails.

Shareholder Memo
Record Dates

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

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