KYB Corporation

Annual Report 2018

Financial Review

parent was ¥15.2 billion.

absorbers for automobiles increased 7.6% to ¥162.5 billion.

electric power steering and hydraulic pumps. Sales of otherTotal equity increased ¥16.9 billion to¥186.7 billion mainly

14.5

12.8

-3.2

0.0

2014 2015 2016 2017 2018
(IFRS)(IFRS)(IFRS)

2014 2015 2016 2017 2018

(IFRS)(IFRS)(IFRS)(IFRS)

2014 2015 2016 2017 2018

(IFRS)(IFRS)(IFRS)(IFRS)(IFRS)

because of an increase in retained earnings.

products, mainly ATV (all-terrain vehicle) equipment, were

The ratio of equity attributable to owners of the parent¥4.9 billion. As a result, sales in the automotive components

increased 0.6 percentage point from one year earlier tosegment totaled ¥242.6 billion, segment profit was ¥9.5

43.7% at the end of March 2018 due to an increase in net

R&D Expenses

Capital Expenditure

Depreciation and Amortization

billion and the segment profit margin was 3.9%.

assets.

(Billions of yen)(Billions of yen)(Billions of yen)

¥8.5 billion. As a result, hydraulic components segment sales

Net cash from operating activities decreased 6.1% towere ¥122.6 billion, segment profit was ¥11.1 billion and the¥29.3 billion. The main reasons for this decline were profit

segment profit margin was 9.1%.

before tax of ¥20.9 billion, depreciation and amortization of

In the other segment, the primary activities are special-¥17.0 billion, and payment for income taxes of ¥4.9 billion.

purpose vehicles, aircraft components, system products andNet cash used in investing activities decreased 23.2%

electronic components. Sales of special-purpose vehicles,to ¥16.4 billion. This was mainly due to payments of ¥14.4

mainly concrete mixer trucks, increased 11.8% to ¥9.6 billion

billion for purchases of property, plant and equipment.

due to a sales increase in India. Sales of hydraulic equipment

Net cash used in financing activities was ¥4.5 billion. Therefor aircraft decreased 17.8% to ¥6.4 billion. Sales of systemwere payments of ¥13.4 billion for the repayment of long-products and electronic components decreased 3.2% toterm borrowings and ¥3.6 billion for dividends. Major sources¥11.3 billion. As a result, segment sales were ¥27.2 billion,of cash inflow were proceeds of ¥9.4 billion from long-term

segment profit was ¥10.3 billion and the segment profit

borrowing and a net increase of ¥3.4 billion in short-term

margin was 3.8 %.

borrowings.

As a result, consolidated net sales increased ¥37.1 billion
to ¥392.4 billion.

17.0

15.9

17.1

15.2

17.3
21.0

30.1

29.9

7.6

7.8

8.1

20.6

in cash and cash equivalents to ¥42.7 billion.

21.3

active systems and shock absorbers, increased 10.9% to0.02014 2015 2016 2017 2018
(IFRS)(IFRS)(IFRS)

2014 2015 2016 2017 2018

(IFRS)(IFRS)(IFRS)(IFRS)

Ratio of Equity Attributable to
Owners of the Parent / Equity Ratio(Billions of yen)

(%)

387.9

2014 2015 2016 2017 2018

(IFRS)

Total Equity and Total Assets /Total Assets

412.5

foreign exchange rates, there was an increase of ¥8.7 billion(IFRS)(IFRS)(IFRS)(IFRS)

Return on equity attributable toowners of the parent /Return on Equity (ROE)
(%)

41.2

43.6

41.3

43.1

43.7
9.7

9.3

8.8

5.1

186.7

markets. Sales of other components, mainly railway semi-

381.3¥4.5 billion. After a deduction of ¥0.3 billion for changes in

169.8

with small-sized and mini excavators in the Europe and U.S.

359.0

¥12.9 billion and net cash used in financing activities was

153.4

particularly in the Chinese market, and favorable performance

387.9

Net cash flows from operating and investing activities was

175.3

due to continued stable growth in large-sized excavators,

6.9

Cash Flows

361.1

machinery, surged 28.7% to ¥114.1 billion. The increase was154

hydraulic components, which are used mainly in construction

39.2

8.9

In the hydraulic components segment, sales of industrial

16

20.9

4.3

Total liabilities increased ¥14.3 billion to ¥225.8 billion
mainly because of an increase in trade and other payables.

8.0

and other receivables, and property, plant and equipment.

19.2

India. Sales of hydraulic equipment for automobiles, which

14.5

mainly due to an increase in cash and cash equivalents, trade

18.2

because of strong sales in the core markets of China andtransmissions were steady, however, sales decreased for(Billions of yen)

392.4

Financial Condition
Total assets increased ¥31.2 billion to ¥412.5 billion. This was¥45.7 billion. Sales of vane pumps for continuous variable(Billions of yen)

Profit (Loss) Attributable to Ownersof the Parent / Net Income

24.1

motorcycle shock absorbers increased 3.5% to ¥29.5 billion

is used mainly for power steering, decreased 1.7% to(Billions of yen)

355.3

and European markets were generally strong. Sales ofOperating Profit

355.3

Sales declined in the United States, but the Japan, Chinese,

Net Sales

15.2

taxes was ¥20.9 billion and profit attributable to owners of

370.3

In the automotive components segment, sales of shock

Operating profit was ¥20.9 billion, income before income

352.7

Summary0.0

2014 2015 2016 2017 2018
(IFRS)(IFRS)(IFRS)(IFRS)

2014 2015 2016 2017 2018
(IFRS)(IFRS)(IFRS)(IFRS)

2014 2015 2016 2017 2018
(IFRS)(IFRS)(IFRS)(IFRS)

Total Equity / Total Net Assets
Total Assets

17Annual Report 2018

KYB Corporation

Financial Statements
Consolidated Statements of Financial Position

Consolidated Statements of Income

KYB Corporation and its Consolidated Subsidiaries
March 31, 2017 and 2018

KYB Corporation and its Consolidated Subsidiaries
Years ended March 31, 2017 and 2018
Millions of yen

ASSETS

Millions of yen

2017

2018

Net sales
Cost of sales   Gross profit
Selling, general and administrative expenses
Equity in earnings of affiliates
Other income
Other expenses   Operating profit
Finance income
Finance costs   Profit before taxes   Income tax expenses    Profit for the year

¥355,316
282,886
72,43053,806
1,016
2,036
2,430
19,247593
988
18,852
3,774¥15,078¥392,394
312,810
79,58357,983
173
2,665
3,553
20,885973
977
20,881
5,096¥15,786

Profit attributable to:
Owners of the parent
Non-controlling interests    Profit for the year

¥14,544533
15,078¥15,202584
15,7862018

Current assets:
Cash and cash equivalents
Trade and other receivables
Inventories
Other current financial assets
Other current assets   Total current assets¥ 33,988
92,65349,6401,039
3,641
180,962¥ 42,702
103,881
54,001
1,066
9,904
211,554

Non-current assets:
Property, plant and equipment
Goodwill
Intangible assets
Investments accounted for using the equity method
Other non-current financial assets
Other non-current assets
Deferred tax assets   Total non-current assets   Total assets

158,990
283
5,850
5,438
23,169500
6,132
200,364¥381,326

161,886
268
6,692
4,342
24,731532
2,487
200,938¥412,493

LIABILITIESCurrent liabilities:
Trade and other payables
Borrowings
Income tax payables
Other current financial liabilities
Provisions
Other current liabilities   Total current liabilities

18

2017

Yen

¥ 72,137
50,983
1,536
18,274
3,754
1,001
147,684¥82,695
57,0981,944
22,7605,438
1,708
171,643

Earnings per share
Basic earnings per share¥569.32¥595.09

Consolidated Statements of Comprehensive Income
KYB Corporation and its Consolidated Subsidiaries
Years ended March 31, 2017 and 2018

Millions of yen

Non-current liabilities:
Borrowings
Liability for retirement benefits
Other non-current financial liabilities
Provisions
Other non-current liabilities
Deferred tax liabilities   Total non-current liabilities   Total liabilities

39,962
11,589
2,405
2,127
56
7,732
63,871¥211,555

34,986
9,592
2,255
2,189
21
5,156
54,198¥225,841

EQUITY
Equity attributable to owners of the parent:
Share capital
Capital surplus
Retained earnings
Treasury shares
Other components of equity    Total equity attributable to owners of the parent   Non-controlling interests   Total equity    Total liabilities and equity¥ 27,648
29,414
100,995(587)
6,829
164,299
5,472
169,771¥381,326¥27,648
29,414
114,363(598)
9,398
180,2256,426
186,651¥412,493

Profit for the year
Other comprehensive income:Items that will not be reclassified to profit or loss:  Net change in financial assets measured at fair value throughother comprehensive income   Remeasurements of defined benefit plans  Share of other comprehensive income of investments
accounted for using the equity method   Total
Items that may be reclassified to profit or loss:  Exchange differences on translation of foreign operations  Effective portion of the change in the fair value of cash flow hedges  Share of other comprehensive income of investments
accounted for using the equity method   Total    Total other comprehensive income
Comprehensive income for the year
Comprehensive income for the year attributable to:
Owners of the parent
Non-controlling interests
Comprehensive income for the year

2017

2018

¥15,078¥15,786

3,342
1,705

1,206
1,698

17
5,064

(27)
2,876

(1,509)
(85)

1,333
(71)

(203)
(1,797)
3,267¥18,345

191
1,453
4,329
¥20,115¥17,708636¥18,345¥19,445670¥20,115

19

KYB Corporation

Annual Report 2018

Financial Statements

Consolidated Statements of Changes in Equity
KYB Corporation and its Consolidated Subsidiaries
Years ended March 31, 2017 and 2018

Millions of yen
Other components of equity

Balance at April 1, 2016
Comprehensive income for the year:
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners: Contributions by and distributions to owners
in their capacity as owners:   Acquisition of treasury shares   Disposal of treasury shares   Dividends of surplus   Changes of scope of equity method   Changes due to business combination   Transfer to retained earnings  Total contributions by and distributions to owners
in their capacity as owners
Changes in equity interest of subsidiaries:   Change of non-controlling interests   Dividends of surplus   Total changes in equity interest of subsidiaries
Total transactions with owners
Balance at March 31, 2017
Comprehensive income for the year:
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners: Contributions by and distributions to owners
in their capacity as owners:   Acquisition of treasury shares   Disposal of treasury shares   Dividends of surplus   Change of scope of equity method   Changes due to business combination   Transfer to retained earnings  Total contributions by and distributions to owners
in their capacity as owners
Changes in equity interest of subsidiaries:   Change of non-controlling interests   Dividends of surplus   Total changes in equity interest of subsidiaries
Total transactions with owners
Balance at March 31, 201820

TreasurysharesNet change infinancial assets
measured at fairvalue throughRemeasurements
other comprehenof defined
sive income
benefit plans

Exchangedifferenceson translationof foreign
operations

Effective
portion of
the change inthe fair value ofcash flow hedges

Total
other
componentsof equity

Comprehensive
income for theyear attributableto ownersof the parent

Noncontrollinginterests

Total
equitySharecapitalCapitalsurplusRetainedearnings¥27,648¥29,414¥86,393¥(579)¥4,967¥    —¥275¥160¥5,402¥148,278¥5,103¥153,381

—
—
—

—
—
—

14,544—
14,544

—
—
—

—
3,342
3,342

—
1,702
1,702

—
(1,796)(1,796)

—
(83)
(83)

—
3,164
3,164

14,544
3,164
17,708

533
103
636

15,0783,267
18,345

—
—
—
—
—
—

—
—
—
—
—
—

—
—
(2,810)
1,175
(45)
1,737

(8)
—
—
—
—
—

—
—
—
—
—
(35)

—
—
—
—
—
(1,702)

—
—
—
—
—
—

—
—
—
—
—
—

—
—
—
—
—
(1,737)(8)—(2,810)
1,175
(45)
—

—
—
—
—
—
—

(8)
0
(2,810)
1,175
(45)
—

—

—

57

(8)

(35)

(1,702)——(1,737)(1,687)—(1,687)————27,648————29,414———57
100,995

—
—
—
(8)
(587)

—
—
—
(35)
8,274

—
—
—
(1,702)—————(1,521)

—
—
—
—
77

—
—
—
(1,737)
6,829

—
—
—
(1,687)
164,299

—
(267)
(267)
(267)
5,472

—
(267)
(267)
(1,955)
169,771

—
—
—

—
—
—

15,202—
15,202

—
—
—

—
1,206
1,206

—
1,675
1,675

—
1,433
1,433

—
(71)
(71)

—
4,243
4,243

15,202
4,243
19,445584
87
670

15,786
4,329
20,115

—
—
—
—
—
—

—
0
—
—
—
—

—
—
(3,576)
—
69
1,674

(11)
0
—
—
—
—

—
—
—
—
—
1

—
—
—
—
—
(1,675)

—
—
—
—
—
—

—
—
—
—
—
—

—
—
—
—
—
(1,674)(11)
0(3,576)
—
69
—

—
—
—
—
—
—

(11)
—
(3,576)
—
69
—

—

0

(1,834)(11)

1(1,675)——(1,674)(3,518)—(3,518)————¥27,648———
0¥29,414———(1,834)¥114,363

—
—
—
(11)
¥(598)———
1¥9,480———(1,675)
¥ —

—
—
—
—
¥(88)

—
—
—
—
¥6

—
—
—
(1,674)¥9,398———(3,518)¥180,225

541
(257)
284
284
¥6,426

541
(257)
284
(3,235)¥186,651

21

KYB Corporation

Annual Report 2018

Financial Statements

Consolidated Statements of Cash Flows

Segment InformationKYB Corporation and its Consolidated Subsidiaries
Years ended March 31, 2017 and 2018

KYB Corporation and its Consolidated Subsidiaries
Years ended March 31, 2017 and 2018
Millions of yen

Cash flows from operating activities:
Profit before tax
Depreciation and amortization
Impairment loss
Increase (decrease) in assets and liabilities for retirement benefits
Increase (decrease) in provision for product warranties
Finance income
Finance costs
Equity in (earnings) losses of affiliates
Loss on sales of investments accounted for using the equity method(Increase) decrease in trade and other receivables(Increase) decrease in inventories
Increase (decrease) in trade and other payables
Provision for loss on cancellation of joint venture agreement
Loss associated with the Anti-Trust law
Other   Subtotal
Interest received
Dividends received
Interest paid
Income taxes paid
Payments of loss associated with the Anti-Trust law   Net cash from operating activities2018¥18,852
15,922147
149(1,495)(593)
988(1,016)—(5,052)(1,889)
6,640
—
700
2,209
35,562
94
1,072(1,003)(3,815)(757)
31,153¥20,881
16,988
383
422
351
(973)
977
(173)
367
(9,820)(3,874)
9,745
1,189

FY2016 (April 1, 2016–March 31, 2017)—(3,065)33,399131
1,593(1,012)(4,859)—29,252(Millions of yen)
Reportable segment

Net sales:
Outside customer
Intersegment sales and transfers  TotalSegment profit (Note 3)
Equity in earnings of affiliates
Other income and expenses (net)Operating profit
Finance income and costs (net)Profit before taxes
Depreciation and amortization
Impairment loss
Increase of non-current asssets(Note 4)

Automotive
components

Hydrauliccomponents

Subtotal

Other(Note 1)

Total

Adjustment(Note 2)¥231,025
577
231,601
10,997639(315)
11,321¥96,327
2,336
98,663
6,615
377
(120)
6,872

¥327,352
2,913
330,265
17,612
1,016(436)
18,193¥27,964481
28,445
941
—
42
983

¥355,316
3,393
358,70918,553
1,016(394)
19,175¥    —(3,393)(3,393)
71
—
—
71

9,987
81

5,158
42

15,145123783
23

15,928147(6)—¥355,316—
355,316
18,624
1,016(394)
19,247(395)
18,852
15,922
147

14,794

3,751

18,545

2,030

20,575

4

20,578

Consolidated

Notes: 1. “Other” includes “Special-purpose Vehicles,” “Aircraft Components” and “System Products and Electronic Equipment” that are not included in
the two of reportable segment.
2. ¥71 million of adjustment of segment profits are the elimination of intersegment transactions.
3. Segment profit is calculated by deducting cost of sales and selling, general and administrative expenses from net sales.
4. Non-current assets do not include investments accounted for using the equity method, other other non-current financial assets and deferred tax assets.

FY2017 (April 1, 2017–March 31, 2018)(Millions of yen)
Reportable segment

Cash flows from investing activities:
Payment into time deposits
Proceeds from withdrawal of time deposits
Payment for purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payment for purchases of other financial assets
Proceeds from sale of other financial assets
Proceeds from sale of investments accounted for using the equity method
Other    Net cash flows from investing activities

(237)
255
(19,734)
31
(1)
178
—
(1,830)(21,337)(203)
136(14,402)
99
(24)
8
286
(2,287)(16,386)

Cash flows from financing activities:
Net increase (decrease) in short-term borrowings
Repayments of lease obligations
Proceeds from long-term borrowings
Repayment of long-term borrowings
Proceeds from non-controlling interests
Payments for purchase of treasury shares
Proceeds from sales of treasury shares
Dividends paid
 Dividends paid to non-controlling interests    Net cash flows from financing activities

5,207
(456)
15,294(17,928)—(8)—(2,810)
(267)
(969)

3,408
(589)
9,388
(13,386)541(11)
0(3,576)(257)(4,482)

(160)
8,687
25,296288
8,672
33,988

5¥33,98842¥42,702

Effects of changes in foreign exchange rates
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting
from merger with unconsolidated subsidiaries
Cash and cash equivalents at end of period

22

2017

Net sales:
Outside customer
Intersegment sales and transfers  TotalSegment profit (Note 3)
Equity in earnings (losses) of affiliates
Other income and expenses (net)Operating profit
Finance income and costs (net)Profit before taxes
Depreciation and amortization
Impairment loss
Increase of non-current asssets(Note 5)

Automotive
components

Hydrauliccomponents

Subtotal

Other(Note 1)

Total

Adjustment(Note 2)

¥242,560
771
243,331
9,256
(207)
(490)
8,559

¥122,603
1,363
123,966
11,021
380(238)
11,163¥365,163
2,134
367,297
20,277173(729)
19,722¥27,231488
27,719
1,004
—
(160)
844

¥392,394
2,622
395,016
21,281
173(888)
20,566¥    —(2,622)(2,622)
320
—
—
320

10,936
301

5,230
57

16,166358

828
25

16,994383(6)—¥392,394—
392,394
21,600173(888)
20,885(4)
20,881
16,988383

14,114

5,489

19,603

1,402

21,005(48)

20,956

Consolidated

Notes: 1. “Other” includes “Special-purpose Vehicles,” “Aircraft Components” and “System Products and Electronic Equipment” that are not included in
the two of reportable segment.
2. ¥320 million of adjustment of segment profits are the elimination of intersegment transactions.
3. Segment profit is calculated by deducting cost of sales and selling, general and administrative expenses from net sales.
4. Non-current assets do not include investments accounted for using the equity method, other other non-current financial assets and deferred tax assets.

Changes in reportable segments
In this fiscal year, due to the change in the management method of some domestic affiliated companies, we reexamined the

Financial information for the previous fiscal year has beenrevised to reflect this change.

"Electronic Equipment" business, etc. which had been includedin "Hydraulic components" and "Others." And we disclose partof it into "Automotive components" and "Hydrauliccomponents."

23