Kito Corporation
FY2021–Q2 Business Report
April 1, 2021

TSE: 6409

September 30, 2021

To Our Shareholders

Strong demand continues in Europe as well, despite the recent resurgenceof the pandemic as a cause for concern in some countries. The links between
our four subsidiaries with different functions are gradually strengthening, building a foundation that differentiates Kito from our competitors. We have begun
North American introduction of the products of our Finnish and Dutch subsidiaries, helping the Kito Group strengthen North American operations.
The Japanese market has been on a recovery path since the beginning of
the fiscal year. Because the state of emergency lasted so long, however, it is still
not as strong as the North American and European markets. There is rising hope

Yoshio Kito,President and CEO

that manufacturers here will resume investing in equipment, motivated by risingoverseas demand. Investment demand related to infrastructure is also graduallyincreasing.
Celebrating our 90th anniversary in 2022, we want the Kito Group to remain

We made a good start on our fiscal year ending March 2022, supported bystrong recovery of demand in our North American and European markets. On
September 29 we announced a revision of our results for the second quarterand the year as a whole, both upward. The strong demand has carried forward
into October and onward, and I’m seeing brisk resumptions of shipments in aessential to society. For that we will continue producing safe, durable products,making our production and supply processes clean and efficient, and providing
after-sale services based on mutual trust with our customers, so we can contribute to society in various ways beyond creating safe workplaces and reducing
our environmental impact.

broad range of industries.
At the same time the effects of steeply rising prices for steel and other materials and supply-chain confusion, particularly in marine transportation, havebeen gradually increasing. So we are working hard company-wide to ensure
uninterrupted product supplies and quality care and services to our customers.
Let me explain the current demand situation in each market and our future
prospects. In the North American market, demand started trending upward in

Watch the webcast archive of our FY2021–Q2 financial results.

the fall of 2020. It gives me hope for continuous strong demand going forward,
despite challenges like labor shortages and supply chain issues.

0102

Business Highlights

Earnings for the First Half of FY2021
ActualInitial plan

FY2021 Forecast

Revisions to the consolidated business forecast on September 29, 2021
JPY in billion

JPY in billion

ChangeSales

28.29

25.0+3.29

Operating income

2.45

1.6+0.85

Quarterly net income attributableto owners of parent

1.67

1.0+0.67

Sales
1H

Operating income

Full year

1H

Full year

59.00
51.80


Favoredby strong demand in North America and Europe, we are continuing toincrease production.
Demandrecovery is so far only gentle in Japan and Asia, but investment demand
related to infrastructure is gradually rising.

55.00

5.50

(initial)(revised)

5.00

4.45

3.60

(initial)(revised)

28.29
22.04

3.20

2.34

2.45


Effectsof surging prices for materials, delayed part supplies and confused marinetransportation.

1.24(initial)

1.67
0.16

March 202103

Full year(revised)

Overview

Regional Sales

1H

Quarterly net income
attributable toowners of parent

March 2022

March 2021

March 2022March 2021

March 2022

Major initiatives

JPY in billion

FY2020Apr-Sep

FY2021
Apr-Sep

YoYchangeJapan

5.66

6.32+11.7%

Americas

9.52

12.90

+35.6%

China

3.15

3.99+26.7%

Asia

1.38

1.53

+10.7%

Europe1.41

2.44+73.1%

Others0.90

1.08+19.8%

Europe 8.6%

Others 3.8%

Asia
5.4%

China
14.1%

Japan
22.4%
FY20211HThe Americas
45.7%

Activeequipment investment continues at our three production bases in Japan, theUS and China.
Oureffort is focused on stable product supplies and quality customer services
despite confusion in the supply chain.
Buildingsynergy through stronger linkage among four European subsidiaries andintroduction of European products in the North American market.

Non Japanesemarkets 77.6%

04

Let’s Get to Know Kito Vol.5

A Plant that Never Stops

Upward Elasticity,
Downward Flexibility

Natural disasters like earthquakes and flooding, as well as unpredictable risks likethe Covid pandemic, pose substantial threats to our businesses and daily lives.
Manufacturers are particularly vulnerable, facing the growing issues of shrinking
working populations, the recent surge in prices for materials, and confused

We work to be a plant withupward elasticity, meaning
keeping up with demand
surges and production increases by maintaining highproductivity and performance,and downward flexibility,
which means dealing withdips in demand or production
volume by applying efficientmanufacturing and flexibility
to secure profits.
There are three primary means to these ends. The first is enhancing our production
capacity, which help ensure upward elasticity. Second is the promotion of automation
and reduction of labor, raising the efficiency of our work and making best use of the limited number of people available for a given task. Third is optimization of our productand part inventories, which help cushion fluctuations in demand.

distribution. Despite these challenges the Kito Group boldly strives to be the plantthat never stops, mobilizing all the wisdom of its firms operating worldwide.

Imagining Another Great East Japan Earthquake
The Great East Japan Earthquake of 2011 was of a magnitude we had never experienced. The Yamanashi Main Plant fortunately escaped major structural and systemic
damage, but we remember struggling to adjust work days for planned power outages
and maintain supplies from part makers. Since then we’ve completed most of the work
to make our facilities in the six plant buildings related to utilities, including water, electricity and gas as well as lighting and plumbing, more earthquake-resistant.
We have made our work environment safer, for example by testing over 200 production machines for vibration-resistance and implementing measures to prevent themfrom falling. We undertook an extensive risk-simulation with a major earthquake in theTokai region in mind to project its impact on the plant in terms of production and supply
and the time needed for recovery of distribution and utility systems, and built a recovery
plan from those projection.

05

Distribution ofProduction Bases
We have begun a project totransfer production of twocore Kito products, CX manual chain hoists and LX lever
hoists, from Japan to our Thaiplant. Although we fell behind schedule due to pandemic-related travel restrictions on our engineers, wesuccessfully made the first
shipment to Japan in August.

06

Kito Products Spotted!

Widely used in arange of industries

Kito products are used in every industry. As we watched Olympians and Paralympians inheated competition in Tokyo this summer, we spotted many Kito products in the venues forswimming, cycling, fencing and more. Here we feature the dome where bicycle racing took
place and a rail-maintenance center as examples.

■ A black body is never an eyesore!

■ Auto-controlled crane crystallizes Kito technologies

In the recently completed Chiba JRF Dome, 34

For a smoother ride, railroad rails are welded together in the production facility, joining

TNER theatrical hoists hold up the large monitor atas many as six standard rails to extend up to 150 meters. Kito cranes are used to load

its center. The picture shows how the hoists werethe long rails on the cargo train. Using control technology to synchronize the operations

installed. The TNER is specialized for setting up

of six cranes and twelve hoists, the rails are transported safely. Installed outdoors, thelighting and audio equipment in theatres and oth-cranes are exposed to various weather factors, so parts that resist sunlight and rain wereer event venues. Its black case prevents it being vi-chosen, and a device to prevent runaways was installed as well.

sually obtrusive to audiences, and it uses a lubricant that helps keep the venue clean.

0708

Kito Media

Kito actively uses its website and social media to disseminate information on products andGroup activities, as well as stories of wider investor interest.

Ask an IR Officer!

Our answers to questions from investors and shareholders

Scan me!

Fifth Place in Japan for Ratio of Disabled Employees

Aug. 27, 2021, 10:15

QA

While the world economy is rapidly recovering, there are global
concerns, like a shortage of intermodal containers, delays in shipping
and a steep rise in transportation costs. How are these issues affecting
Kito operations?
Kito maintains an exclusive consignment agreement with a leading transporter,
so we have enough containers for our exports. Our exports have been stable as aresult of expanded shipping routes to North America. In the US, our top export
destination, local distribution has sometimes stalled due to confusion in theports. This is causing short inventories of some parts, but with effective use ofcargo flights we are working to continue satisfying customer needs and building
our market share. Responding to rising transportation costs, we are transferring
them into prices to minimize impact on profits for the entire Group.

Oct. 04, 2021, 10:34

QThe recent financial crisis of the Evergrande Group in China is a major
concern for the world economy. How will it affect Kito operations,particularly in China?

A

About 80% of Kito's China operations are related to the production and sale ofwire-rope hoists. These products are generally needed for equipment investment in plants, rather than on temporary worksites related to construction or civilengineering, and this market is not directly affected by Evergrande real-estatedevelopment. That said, some impact on the Chinese economy as a whole may
be inevitable, and we are keeping an eye on the situation.

Toyo Keizai magazine announced its ranking of the top 100 companies in terms of ratioof disabled people in total workforce. Kito ranked fifth, hiring 36 disabled people, 7.09%
of total employees. Kito scored high for its master plan for employing people with dis-abilities, positioning such employees based on their uniqueness rather than kind of disability, and its effort to help them maintain their jobs in cooperation with their familiesand supporters.

Awards for Excellent Employees with Disabilities
The Japan Organization for Employment of the Elderly, Persons with Disabilities and Job

Seekers awarded two Kito employees the “Chairman's Effort Prize" for excellence
among employees with disabilities. With new ambition to rise to the challenges of vari-

ous jobs, both are working hard on every task they are given and becoming strong forces in the workplace.

‘A’ Grade for ESG Management
Kito’s exceptional ESG-focused manage-ment has won an ‘A’ rating from Mitsubishi
UFJ Research and Consulting, supported by
the Japan Credit Agency.

Read more about ESG-oriented
Kito management practices.

09

10

ーC o l u m n ーWe're celebrating the tenth anniversary of the EQ electric hoist as acustomer favorite.
The sleek, innovative case is integrated with the motor frame,
making it light and compact. Highly durable and offering a longproduct life, the EQ is packed with Kito commitment inside andout. Since its debut in 2011 it has enjoyed a very high reputation,
especially among European customers.

■ About the Cover Photo

Railway track stretches beyond the horizon.
Safe, environment-friendly railroads are an important support for social
infrastructure. Six Kito cranes are used to load 150-meter rails on freightcars.

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