Ryobi Limited
Semiannual Report (Unaudited)
For the six months ended 30th September 2002

2002

Message from the Management
Guided by its corporate philosophy, “Create a soundand dynamic corporation through technology, trustand challenge,” Ryobi Limited seeks to respond to
the needs of its customers and society at large withinnovative, top-quality products and services, andthereby become an indispensable company.

SOUND MANAGEMENT PLAN
Ryobi announced its Sound Management Plan in
March 2000, and has since made a concerted effort
to optimize the scale and reinforce the structure ofeach of its businesses to create a high-earnings structure. Although the operating environment has turned
considerably harsher since the formulation of thisplan, we have implemented it, and have achieved positive results from business restructuring and reductions in interest-bearing debt. Specific efforts bybusiness segment and the corresponding progress ofthe plan are as follows.
1) Die Casting Business
Ryobi is expanding and strengthening its relationships
with automobile manufacturers by providing timely,
accurate and global responses through its threeregion structure of Japan, the United States andEurope, and by drawing on its know-how as a worldleading die casting manufacturer. Our aluminum die
casting products, already used by automobile manufacturers for their light weight, durability and recycling ease, are drawing much attention frombusinesses operating outside such automotive fields
as electronics and communications, as an effective
technology that is both energy-efficient and environmentally friendly.
2) Printing Equipment Business
Ryobi is bolstering new product development in thepursuit of high-precision multicolor printing and sophisticated functionality, and increasing manufactur-1

RYOBI LIMITED SEMIANNUAL REPORT 2002

ing capacity and sales capabilities to further reinforce
its solid reputation in world markets. We are also expanding the field of small to medium-size printingpresses and responding to advancements in information technology (IT) and digitization.
3) Power Tools Business(1) We have undertaken a sweeping restructuring ofthe power tools business and the lawn and garden
equipment business, selling subsidiaries in North
America, Europe and Oceania. In Japan, we have improved lateral management among Group companies,
while streamlining the organization, reducing personnel and unifying and eliminating models to improve
profitability and strengthen competitiveness. We arealso taking steps to build a more competitive production structure, notably by accelerating the transfer of
production to our manufacturing subsidiary in Dalian,China.
(2) In the builders’ hardware business, such mainstay
products as door closers are now produced mainly by
our subsidiary in Dalian, China, and an affiliated company in Taiwan. By taking advantage of the merits ofoverseas manufacturing to produce price-competitive
products and develop distinctive new ones, Ryobi ismaking moves toward greater profitability.
4) Other Businesses
The fishing tackle business has been sold, and we haveceased manufacturing and marketing of sporting
goods (golf clubs).

PERFORMANCE
During the six-month period ended 30th September
2002, consolidated net sales declined 4.5% to ¥76,309
million, with domestic net sales down 0.9% to ¥51,833
million and overseas net sales down 11.5% to ¥24,476
million, compared with the same period of the previous fiscal year.

Operating income increased 13.1% from the same
period last year to ¥3,547 million, and net income rose
57.5% to ¥1,284 million.
Although die casting business increased due toimproved sales to U.S. and Japanese automobile manufacturers, the sale of four overseas sales subsidiaries
in the power tools business led to an overall decline
in net sales. Profitability improved owing to positiveeffects realized from cost reductions and business restructuring carried out under the Sound Management
Plan. This is the second consecutive six-month
period in which earnings have increased.
By segment, sales in the die casting business wereup 4.3% to ¥52,562 million and operating income
dropped 0.5% to ¥2,744 million, resulting in a ratioof operating income to sales of 5.2%, compared with
5.5% from the same period last year. Although sales
increased to U.S. and Japanese automobile manufacturers, intense pressure from these manufacturers toreduce prices led to flat earnings. In the automotive
field, we redoubled our marketing efforts for cylinder blocks. We also found new, diverse applications
for die casting products in such non-automotive products as office furniture, plasma televisions and lighting for expressways. With environmental preservation,
resource conservation and reduced energy use increasingly becoming worldwide priorities, die castingproducts are expected to grow as the operative technology to realize these goals.
Sales in the printing equipment business fell 6.7%
to ¥10,859 million and operating income declined
65.5% to ¥85 million, resulting in a ratio of operating
income to sales of 0.8%, compared with 2.1% fromthe previous corresponding period. The main reasonsfor the decline were a slowdown in capital investment
due to sluggish economies both in Japan and internationally, and to intensification of price competition.
By product, sales of medium-size offset printingpresses (B2, A2 and B3 paper sizes) are on an upward

trend, while small offset printing presses (A3 size paper) are on a downward one. Ryobi will continue towork to create demand with proposals that fully consider user needs, and by actively conducting demonstrations.
Sales in the power tools business fell 27.3% to¥12,384 million and operating income jumped 2.4
times the amount from the corresponding previous
period to ¥776 million, resulting in a ratio of operating income to sales of 6.3%, compared with 1.9% fromthe same period last year. Although sales declined
owing to the sale of four overseas sales subsidiaries
during the previous fiscal year and a decline in housing construction in Japan, improvement in earnings
was the result of the positive effects realized frombusiness restructuring carried out under the Sound
Management Plan. We will take advantage of the merits of overseas manufacturing to produce pricecompetitive products and develop distinctive new ones.
Sales in other businesses dropped 44.5% to ¥504
million and an operating loss of ¥58 million was posted,compared with an operating loss of ¥196 million in
the same period last year. The decline in sales was due
to our ceasing manufacturing and marketing of sporting goods (golf clubs) during the previous fiscal year.
Ryobi will continue its efforts to optimize the scaleand reinforce the structure of each of its businesses
based on the Sound Management Plan, and focus on
improving performance.
We thank you for your continued support.
December 2002

Hiroshi Urakami
President

RYOBI LIMITED SEMIANNUAL REPORT 2002

2Consolidated Balance Sheets
Ryobi Limited and Consolidated Subsidiaries (Unaudited)
Millions of Yen
30th September
31st March2002
2002

Thousands ofU.S. Dollars*
30th September
2002

ASSETS
Current assets
Cash and cash equivalents .............................................................
Time deposits ................................................................................
Notes and accounts receivable, less allowances ............................
Inventories .....................................................................................
Prepaid expenses and other ..........................................................
Total current assets ............................................................

¥ 13,505
2,568
32,28629,563
3,178
81,100¥ 13,879
2,715
33,09930,026
3,006
82,725$ 110,155
20,946263,344
241,134
25,922
661,501

Net property, plant and equipment .................................................

56,19358,629458,344

10,906

10,876

88,956

Investments and other assets
Investments in securities ...............................................................
Investments in and advances to unconsolidated subsidiaries
and affiliates ..................................................................................
Intangible fixed assets ...................................................................
Deferred tax assets .........................................................................
Other .............................................................................................
Total investments and other assets ....................................
Total ..................................................................................
LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilities
Short-term borrowings ..................................................................
Current portion of long-term debt ...............................................
Notes and accounts payable ..........................................................
Accrued expenses ..........................................................................
Income taxes payable ....................................................................
Other current liabilities .................................................................
Total current liabilities .......................................................

309
1,895
6,444
2,922
22,476¥159,769

342
2,109
7,594
3,126
24,047¥165,401

2,520
15,45752,561
23,834
183,328$1,303,173¥ 28,224
20,67130,358
3,988
335
6,272
89,848¥ 28,963
22,29731,449
5,392
205
7,122
95,428$ 230,212
168,605
247,618
32,5292,733
51,158732,855

Long-term liabilities
Long-term debt .............................................................................
Accrued severance indemnities ....................................................
Other long-term liabilities .............................................................
Total long-term liabilities ...................................................

25,466
5,758
3,743
34,967

27,202
5,111
3,658
35,971

207,716
46,96630,530285,212

Minority interests .............................................................................

582

623

4,747

Shareholders’ equity
Common stock
Authorised: 500,000,000 shares
Issued: 171,230,715 shares .........................................................
Capital surplus ...............................................................................
Deficits ...........................................................................................
Land revaluation reserve ...............................................................
Unrealised gain on available-for-sale securities ............................
Adjustments on foreign currency statement translation ..............
Treasury stock ................................................................................
Total shareholders’ equity .................................................
Total ..................................................................................

18,472
23,517(2,822)610
2,671(7,999)(77)
34,372¥159,769

18,472
23,517(4,106)610
2,641(7,689)(66)
33,379¥165,401

150,669
191,819(23,018)
4,976
21,786(65,245)(628)
280,359$1,303,173* U.S. dollar amounts in this report, solely for the convenience of the reader, are translated from yen at the rate of ¥122.60 = US$1, the exchange rate
prevailing on 30th September 2002.

3

RYOBI LIMITED SEMIANNUAL REPORT 2002

Consolidated Statements of Operations
Ryobi Limited and Consolidated Subsidiaries(Six months ended 30th September 2002 and 2001) (Unaudited)
Millions of Yen30th September
30th September
2002
2001

Net sales ...........................................................................................
Cost of sales .....................................................................................
Gross profit .........................................................................
Selling, general and administrative expenses ..................................
Operating income ..............................................................
Other income
Interest and dividends ...................................................................
Gain on sales of investment in securities ......................................
Other .............................................................................................
Total other income ............................................................
Other expenses
Interest ...........................................................................................
Early retirement benefits ...............................................................
Loss on disposal of business segment ...........................................
Other .............................................................................................
Total other expenses ..........................................................
Income before income taxes and other items .................................
Income taxes ....................................................................................
Minority interests .............................................................................
Net income .......................................................................................

Thousands ofU.S. Dollars*
30th September
2002¥76,30961,78914,52010,973
3,547¥79,943
64,477
15,466
12,331
3,135$622,423
503,989
118,434
89,50328,931

138
3
705
846

198
351
691
1,240

1,126
24
5,751
6,901

750
568
—
604
1,922
2,471
1,195
8
¥ 1,284

1,314
551
113
909
2,887
1,488
966
293
¥ 815

6,117
4,633
—
4,927
15,677
20,1559,747
65$ 10,473

Consolidated Statements of Cash Flows
Ryobi Limited and Consolidated Subsidiaries(Six months ended 30th September 2002 and 2001) (Unaudited)
Millions of Yen
30th September
30th September2002
2001

Net cash provided by operating activities ........................................
Investing activities
Purchase of property, plant and equipment .................................
Proceeds from sale of property, plant and equipment .................
Proceeds from sale of investments in securities ............................
Increase (decrease) in deposit ......................................................
Proceeds from sale of business segment .......................................
Payments for sale of business segment .........................................
Other, net ......................................................................................
Net cash used in investing activities .................................
Financing activities
Proceeds from long-term debt ......................................................
Repayments of long-term debt ......................................................
Decrease in short-term borrowings ...............................................
Other .............................................................................................
Net cash used in financing activities .................................
Effect of exchange rate changes on cash and cash equivalents ......
Net decrease in cash and cash equivalents ......................................
Cash and cash equivalents at beginning of year ..............................
Cash and cash equivalents at end of year ........................................
Additional cash flow information
Interest paid ..................................................................................

Thousands ofU.S. Dollars*
30th September
2002¥ 4,222¥ 3,842$ 34,437(2,032)
508
33
146
—
—
99
(1,246)(2,131)
370
553
(206)
731
(102)
(546)
(1,331)(16,574)
4,144
269
1,191
—
—
807
(10,163)

6,719(9,782)(36)(200)(3,299)(51)(374)
13,879¥13,5052,000(5,004)(2,671)(181)(5,856)211(3,134)
18,669¥15,535

54,804(79,788)(294)(1,631)(26,909)(416)(3,051)
113,206$110,155¥¥ 1,413

$

783

6,387

RYOBI LIMITED SEMIANNUAL REPORT 2002

4

Industry Segment Information(Six months ended 30th September 2002 and 2001)
Millions of Yen
2002
Power tools
OtherDie castings

Printing equipment

Net sales
Unaffiliated customers ...............
Intersegment ..............................

¥52,562122¥10,859—¥12,384
4

Eliminations

Consolidated

¥ 504
—

¥ —
(126)

¥76,309—

Total ............................................

52,684

10,85912,388504(126)76,309Operating costs and expenses .......

49,94010,774

11,612562(126)

72,762

Operating income (loss) ................

¥ 2,7440¥ 3,547

¥

85

¥

776

Millions of Yen
2001
Power tools
Other

Die castings

Printing equipment

Net sales
Unaffiliated customers ...............
Intersegment ..............................

¥50,373232¥11,638—¥17,023
5

Total ............................................

50,605

11,638Operating costs and expenses .......

47,84911,391

Operating income (loss) ................

¥ 2,756¥

247¥ (58)¥

Eliminations

Consolidated

¥ 909
—

¥ —(237)¥79,943—

17,028909(237)

79,943

16,703

1,105

(240)

76,808¥¥ (196)¥¥ 3,135

325

3

*

Thousands of U.S. dollars
2002Power tools
Other

Eliminations

Consolidated$ —(1,028)$622,423—

Die castings

Printing equipment

Net sales
Unaffiliated customers ...............
Intersegment ..............................

$428,728
995$ 88,573—$101,011
33$ 4,111—

Total ............................................

429,723

88,573101,044

4,111(1,028)622,423

Operating costs and expenses .......

407,341

87,88094,715

4,584(1,028)593,492

Operating income (loss) ................

$ 22,382

693$ 6,329$ (473)$$ 28,931

5

RYOBI LIMITED SEMIANNUAL REPORT 2002

$0

Geographical Segment Information(Six months ended 30th September 2002 and 2001)

JapanNorth America

Millions of Yen
2002
Other overseas

Net sales
Unaffiliated customers ............
Intersegment ...........................

¥60,288
1,820¥ 13,208—¥2,813
2,355

Total .........................................

62,108

13,208Operating costs and expenses ....

59,278Operating income .......................

¥ 2,830¥Eliminations

Consolidated¥—(4,175)¥ 76,309—

5,168(4,175)76,30912,918

4,697(4,131)

72,762

290

¥ 471

(44)

¥ 3,547

Eliminations

Consolidated¥—(4,127)¥ 79,943
—

¥

Japan

North America

Millions of Yen
2001
Other overseas

Net sales
Unaffiliated customers ............
Intersegment ...........................

¥ 60,104
2,191¥ 10,7642¥ 9,075
1,934

Total .........................................

62,295

10,766

11,009(4,127)

79,943Operating costs and expenses ....

60,208

10,521

10,410(4,331)76,808Operating income .......................

¥ 2,087

245

¥ 599

204

¥ 3,135

Eliminations

Consolidated$—(34,054)$622,423—

Net sales
Unaffiliated customers ............
Intersegment ...........................

¥JapanNorth America

Thousands of U.S. dollars*
2002
Other overseas$491,746
14,845$107,732—$22,945
19,209¥Total .........................................

506,591

107,732

42,154(34,054)622,423

Operating costs and expenses ....

483,508

105,367

38,312(33,695)

593,492

Operating income .......................

$ 23,083$$ 3,842$$ 28,931

2,365

(359)

Export Sales and Sales by Overseas Subsidiaries(Six months ended 30th September 2002 and 2001)

2002

2001

Thousands ofU.S. dollars*
2002

North America ............................
Europe .........................................
Other ...........................................

¥15,451
6,661
2,364

¥13,927
9,433
4,288

$126,028
54,331
19,282

20.3%
8.7%
3.1%

17.4%
11.8%
5.4%

Total .............................................

¥24,476¥27,648$199,641

32.1%

34.6%

Millions of Yen

Percentage against
consolidated net sales
2002
2001

RYOBI LIMITED SEMIANNUAL REPORT 2002

6Company Outline
MAJOR PRODUCTS:• Die casting products• Printing equipment (offset printing presses, prepress systems, etc.)• Power tools (electric power tools, lawn and garden equipment, etc.)• Builders’ hardware (door closers, hinges, architecture hardware, etc.)
HEAD OFFICE, BRANCH:• HEAD OFFICE• TOKYO BRANCH• TOKYO BRANCHTORANOMON OFFICE762, Mesaki-cho, Fuchu, Hiroshima 726-8628, Japan
Telephone: 81-847-41-1111
5-2-8, Toshima, Kita-ku, Tokyo 114-8518, Japan
Telephone: 81-3-3927-5541
Toranomon Central Building 4th Floor, 1-7-1, Nishi-Shinbashi, Minato-ku, Tokyo 105-0003, JapanTelephone: 81-3-3501-0511

http://www.ryobi-group.co.jp/Shareholder Information
1.

NUMBER OF SHARES ISSUED:
171,230,715 Shares

2.

LISTINGS
Common Stock—Tokyo, Osaka

3.

TRANSFER AGENT:The Mitsubishi Trust and Banking Corporation
11-1, Nagata-cho 2-chome, Chiyoda-ku,
Tokyo 100-8212, Japan

4.

RELAYING OFFICES:
All domestic branches of The Mitsubishi Trust and Banking Corporation

PRINTED IN JAPAN©RYOBI LIMITED 2002