- Kito’s Business Structure- MTP Progress

May 20, 2019
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Expanding Customer Base

Clean energy

Solar power

Wind power
Transportation
Clean room
Ship building

Construction

MiningEntertainment
Manufacturing
Aviation

Naturalresources

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2

Initiatives by products

Overhead Cranes

Jan. 2018
Acquired ERIKKILA of Finland, manufacturer oflight weight cranes.
Started selling light crane products in Japan.

HoistsApr. 2018
Van Leusden of the Netherlands joined Kito,
specializing anti-corrosion and spark-proof
treatment for hoists.
May 2019
Starts selling Wire Rope Hoist in Americas.

Below Hook
Devices

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Aug. 2014
Acquired Peerless,the largest chain manufacturer in N-America.
Feb. 2016
Acquired Kito Chain Italia,manufacturing chain related products.
3Evolution of product portfolio- In addition to organic growth, M&A initiatives in the US, Europe
and Australia since 2014 have expanded our product portfolio.
- Hoist peripherals have been added to increase productdiversity.

Service Others
7%
6%
Crane
19%

FY 2018FY 2013
MCH25%

Chain/BHD
21%

MCH
22%

Others 6%
Service 6%

WRH18%
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ECH25%

ECH25%

WRH
Crane 11%9%4

Sales growth in overseas markets- Growth in overseas markets helped build a business portfoliowith good regional balance.
- Stable growth without depending on demand in any particularregion
Asia 7.7%
Americas
JPY in billion

18.7%

70

Japan 73.6%

6050

FY2018 JPY61.2 billion

FY2010 JPY28.0 billion

FY2000 JP22.7 billion

Europe Others
4.2% 3.9%
Asia
6.4%
Japan33.7%
China
25.5%
Americas26.1%

Europe Others
5.1% 4.0%
Asia 8.6%
Japan
26.3%
China
10.7%
Americas
45.2%

Japan
Logistic system business
Non-Japan

4030
201001987

1989

1991

1993

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1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017 20185

Growth in overseas markets (Chinese operation)- We've explored the needs of growth industries despite concern
about the nation's economic slowdown.
- Market share has grown due to increasing consciousness ofsafety and quality in the market.
- Reliably high levels of profit achieved: operating profit has
averaged 10.8% over the past seven years.
- Over 90% of made-in-China products are sold in the domesticmarket.
Jiangyin Kito (since 1995)

Shanghai Kito (since 2004)

Products

Local production and sales,
mainly of wire-rope hoists

Import sales of made-in-Japan chainhoists

TargetManufacturers in China ingeneral

Japanese and other foreign firms, andleading Chinese firms% in total

80〜85％

15〜20％

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6Kito's growth power- Kito overachieves key economical index
with diversified portfolio
300

400

Japan

Kito (Consolidated sales)

350

Americas

Kito(Sale in Americas)

250
300
200

Kito(Consolidated sales)

250

Kito (Sales in Japan)

150

200
150

10050

Blue: Private-sector machinery orders,
excluding ships and electric power companies
Green: Public demand machinery orders

100Orders for non-defense capital goods

50

LTM, Oct-Dec 2009 = 100
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7

Kito's growth power- Solid profit growth built on a well-balanced portfolio
in terms of region and industry- Striking profit growth relative to the rest of the industry
800

Kito

700
600500Net Income(LTM, Jan-Mar 2012 = 100)

400
300

Competitor
in EuropeCompetitor
in USA

20010002012

2013

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2014

2015

2016

2017

2018

8

Management Goals
Achieve the Three Management Goals to Double the Profitability
１ Return to a high margin business structure- Renew production equipment- Concentrate on high-margin business
Financial Target( EBITDA )２ Growth through product portfolio expansion- Develop new products- Expand product offerings through M&A- Expedite sales in new markets
３ Evolve into a Globally Integrated Enterprise

JPY 13 billion

JPY 7.4 billion- Recruit and develop global HR- Integrate ERP systems at HQ and primary subsidiaries- Build a unified marketing database for the entire GroupFY2015 FY2020

Shift from Phase 1 (Create Strong Platform)
to Phase 2 (Leverage Platform to Grow)

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9

EBITDA trend in MPT Phase 1 (Create Strong Platform)- Completion of the IT investment for a stronger platform,
from stable operation to higher operational efficiency- Shift from Phase 1 (Create Strong Platform) toPhase 2 (Leverage Platform to Grow)
JPY in million
Increase inmaterial costs
Increase insales volume

1,935

1,897(736)

Increase insales price

Increase in SGA- Includes JPY 680 million for
newly acquired subsidiaries(1,085)(231)
FX impact

9,201

7,421
FY2015
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Includes JPY 680 million of SGA
for newly acquired subsidiaries

FY201810

Measures to achieve MTP goals
Increase insales volume

Investment
for growth
Streamlining
effects

EBITDA(JPY in million)

M&A Synergy
13,000Win more growth opportunities
Newin the global market.
Product - Introduce new products, expand customer baseOrganicgrowth

9,201

for existing products.
- Enhance approaches to growth industries inleading markets.
- Respond to changes in China's industrial structure.
- Maximize the positive effects of mergers in Europe.

Increase profit through higher productivity
and rationalization- Begin reform at the Yamanashi Plant for higher productivity.
- Make efficient use of the IT infrastructure.

Rationalize supply chains by building
a global production system

FY2018- Shift hoist production to Thailand and US.
- Make efficient use of chain-production facilities and equipment.

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FY2020〜11Copyright © 2019 KITO CORPORATION All rights reserved.