Ryobi Limited
Semiannual Report (Unaudited)
For the six months ended 30th September 2003

2003

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 with
innovative, top-quality products and services, andthereby become an indispensable company.

SOUND MANAGEMENT PLAN
We are advancing our four-year Sound ManagementPlan, which began in the fiscal year ended 31st March
2001, with the aim of building a high-earnings structure by optimizing the scale and reinforcing the structure of each of our businesses. Although our operating
environment has changed significantly, becoming
more challenging, since the inception of the plan,
Ryobi has continued to implement measures in linewith the plan, and is producing results by restructuring its businesses and reducing interest-bearing debt
and personnel. Ryobi returned to a retained earnings
position on a consolidated basis for the fiscal year ended 31st March 2003 and on a non-consolidated basis
for the six-month period ended 30th September 2003.
We are committed to redoubling our efforts to ensure a more stable high-earnings structure and to raise
the Company’s earnings capacity even further. Specific efforts by business segment are as follows.
1) Die Casting Business
Ryobi aims to strengthen and expand relationships
with automobile manufacturers by utilizing our knowhow as a world-leading die casting manufacturer andour three-region structure of Japan, the United Statesand Europe. Our aluminum die castings are lightweight, have excellent durability and are superior interms of recyclability. In addition to the automobilefield, these die castings have attracted attention infields such as electronics and communications as aneffective technology for the protection of the envi-1

RYOBI LIMITED SEMIANNUAL REPORT 2003

ronment, including the conservation of energy andresources.
2) Printing Equipment Business
The Company is striving to increase the precision ofmulticolor rendering, offer increasingly advanced
functionality, and further consolidate its reputation
in world markets. To achieve these goals, Ryobi ispressing forward with the development of new products, the enhancement of production capacity and thestrengthening of marketing capabilities. Through thedevelopment of products in response to advancements
in information technology (IT) and digitization, as
well as creating environmentally friendly products, weare working to expand our product lineup in line withmarket needs.
3) Power Tools Business(1) We have carried out a sweeping review of operations in our power tools business and our lawn andgarden equipment business, including the sale of subsidiaries in North America, Europe and Oceania. InJapan, we have raised profitability through such measures as strengthening our cross-sectional Group management, streamlining our organization, reducing
staff and consolidating and eliminating models. In addition, we aim to further strengthen competitivenessby focusing efforts on bolstering product development
and marketing capabilities and improving the productivity of a manufacturing subsidiary in Dalian, China.
(2) In our builders’ hardware business, we produce
door closers—a mainstay product—at our manufacturing subsidiary in Dalian and affiliate in Taiwan. We
aim to improve profitability by focusing on developing unique products, reducing costs through productivity enhancements, and reinforcing pricecompetitiveness.

PERFORMANCE
During the six-month period ended 30th September
2003, consolidated net sales declined 0.5% comparedwith the same period of the previous fiscal year to¥75,894 million, with domestic net sales up 2.8% to¥53,300 million, and overseas net sales down 7.7% to¥22,594 million.
Operating income for the period increased 28.7%
to ¥4,566 million, and net income surged 694.6% to¥10,202 million.
Despite an increase in sales in the printing equipment business both in Japan and overseas, overall net
sales fell slightly, impacted by a drop in sales in thedie casting business at our U.S.-based subsidiary.
Profitability improved owing to the increase insales in the printing equipment business, positive effects from the Sound Management Plan, and cost reductions. In addition, the Company enjoyed a gainon sales of investments in certain securities (announced on 19th September, 2003), posting a record
net income for the period, the third consecutive sixmonth period in which earnings have increased.
By segment, sales in the die casting business weredown 2.0% to ¥51,501 million and operating income
dropped 5.5% to ¥2,592 million, resulting in a ratioof operating income to sales of 5.0%, compared with
5.2% from the same period last year. Although sales
to truck manufacturers in Japan increased, overallsales fell slightly due to the drop in automobile exports to North America and the decline in sales toU.S.-based automobile manufacturers. These problems were exacerbated by intense pressure to reduce
prices, which more than offset our efforts to reduce
costs, resulting in a drop in profits. Against this backdrop, Ryobi worked diligently to expand the range ofapplications for die casting products in such non-automotive products as frames of plasma televisions andslot machines. We believe demand for die castingproducts will grow in the future as an effective tech-nology that contributes to environmental protection
as well as resource and energy conservation, which
are important global concerns.
Sales in the printing equipment business rose 8.0%
to ¥11,728 million and operating income jumped
954.8% to ¥899 million, resulting in a ratio of operating income to sales of 7.7%, compared with 0.8% fromthe previous corresponding period. Sales in Japan andoverseas grew, particularly of medium-size offset printing presses (B2 and A2 paper sizes). The Company
enjoyed a significant improvement in earnings due
to increased sales volume and successful efforts to curtail costs such as reduced production lead times. Ryobi will continue to actively develop products that fully
consider user needs and to enhance marketing efforts
with the aim of increasing earnings still further.
Sales in the power tools business fell 0.6% to¥12,309 million while operating income climbed
41.9% to ¥1,101 million, resulting in a ratio of operating income to sales of 8.9%, compared with 6.3%
from the same period last year. Due to the prolonged
slump in housing construction in Japan, sales were
essentially on par with the corresponding period of
the previous fiscal year. Earnings on the other handcontinued to improve, buoyed by the positive effects
realized from business restructuring carried out under the Sound Management Plan, efforts to reduce
costs and to improve production and sales efficiency.
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 2003

Hiroshi Urakami
President

RYOBI LIMITED SEMIANNUAL REPORT 2003

2

Consolidated Balance Sheets
Ryobi Limited and Consolidated Subsidiaries(As at 30th September and 31st March 2003) (Unaudited)
Millions of Yen
30th September
31st March2003
2003

Thousands ofU.S. Dollars*
30th September2003

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

¥ 20,183
2,580
35,287
27,8382,609
88,497¥ 17,845
2,636
35,47829,1694,058
89,186$ 181,420
23,191
317,187
250,229
23,451
795,478

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

55,47355,779498,634

8,12710,709

73,052

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 .......................................................

322
1,729
5,051
2,605
17,834¥161,804

313
1,794
4,913
2,793
20,522¥165,4872,894
15,54245,402
23,416160,306$1,454,418¥ 24,612
10,81531,692
3,953
523
6,309
77,904¥ 28,088
13,50535,284
4,145
658
6,509
88,189$ 221,231
97,214
284,872
35,533
4,701
56,710700,261Long-term liabilities
Long-term debt .............................................................................
Accrued severance indemnities ....................................................
Other long-term liabilities .............................................................
Total long-term liabilities ...................................................

25,8136,625
3,783
36,221

28,5195,912
3,867
38,298232,027
59,551
34,004
325,582

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

663

634

5,959

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

18,472
23,517
10,566626
2,247(7,732)(680)
47,016¥161,804

18,472
23,517
365
626
3,666
(7,843)(437)
38,366¥165,487

166,040
211,389
94,975
5,627
20,198(69,501)(6,112)422,616$1,454,418*U.S. dollar amounts in this report, solely for the convenience of the reader, are translated from yen at the rate of ¥111.25 = US$1, the exchange rate
prevailing on 30th September 2003.

3

RYOBI LIMITED SEMIANNUAL REPORT 2003

Consolidated Statements of Operations
Ryobi Limited and Consolidated Subsidiaries(Six months ended 30th September 2003 and 2002)(Unaudited)
Millions of Yen
30th September
30th September2003
2002

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

Thousands of
U.S. Dollars*
30th September
2003¥75,894
60,81915,075
10,5094,566¥76,30961,78914,52010,9733,547$682,193
546,687
135,506
94,46341,043

157
8,213
818
9,188

138
3705
846

1,411
73,825
7,353
82,589

557
—527
1,084
12,6702,434
34¥10,202

750
568
604
1,9222,471
1,195(8)¥ 1,284

5,007—4,737
9,744
113,888
21,879306$ 91,703

Millions of Yen
30th September
30th September
2003
2002

Thousands ofU.S. Dollars*
30th September
2003

Consolidated Statements of Cash Flows
Ryobi Limited and Consolidated Subsidiaries(Six months ended 30th September 2003 and 2002) (Unaudited)

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 ............................
Other .............................................................................................
Net cash provided by (used in) investing activities ..........
Financing activities
Proceeds from long-term debt ......................................................
Repayments of long-term debt ......................................................
Decrease in short-term borrowings, net .......................................
Other .............................................................................................
Net cash used in financing activities .................................
Foreign currency translation adjustments on cash and cash
equivalents .......................................................................................
Net increase (decrease) in cash and cash equivalents .....................
Cash and cash equivalents at beginning of year ..............................

¥ 4,558¥ 4,222$ 40,971(1,995)
186
8,490
208
6,889

(2,032)508
33
245(1,246)(17,932)
1,672
76,315
1,869
61,924

3,170(8,440)(3,468)(382)(9,120)6,719(9,782)(36)(200)(3,299)28,494(75,865)(31,173)(3,434)(81,978)

11
2,338
17,845(51)(374)
13,87999
21,016
160,404

Cash and cash equivalents at end of year ........................................

¥ 20,183¥ 13,505$ 181,420

Additional cash flow information
Interest paid ..................................................................................

¥¥

$584

783

5,249

RYOBI LIMITED SEMIANNUAL REPORT 2003

4

Industry Segment Information(Six months ended 30th September 2003 and 2002)
Millions of Yen
2003
Power tools
OtherDie castings

Printing equipment

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

¥51,501
128¥11,728—¥12,3095

Eliminations

Consolidated

¥356—

¥ —
(133)

¥75,894—

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

51,62911,72812,314356(133)

75,894

Operating costs and expenses .......

49,037

10,829

11,213382(133)

71,328Operating income (loss) ................

¥ 2,592¥¥ 1,101¥ (26)¥¥ 4,566

899

Millions of Yen
2002
Power tools
OtherDie castings

Printing equipment

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

¥52,562122¥10,859—¥12,384
40

Eliminations

Consolidated

¥504
—

¥ —
(126)

¥76,309—76,309Total ............................................

52,684

10,85912,388504(126)

Operating costs and expenses .......

49,94010,774

11,612562(126)

72,762

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

¥ 2,744¥¥¥(58)¥¥ 3,547

85

Die castings

Printing equipment

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

$462,930
1,151$105,420—

776

0Thousands of U.S.dollars*
2003
Power tools
OtherEliminations

Consolidated$110,643
45$—(1,196)$682,193—$3,200—Total ............................................

464,081

105,420

110,688

3,200(1,196)682,193

Operating costs and expenses .......

440,782

97,339100,791

3,434(1,196)

641,150

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

$ 23,299$ 8,081$ 9,897$ (234)$$ 41,043

5

RYOBI LIMITED SEMIANNUAL REPORT 2003

0Geographical Segment Information(Six months ended 30th September 2003 and 2002)

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

Japan

North America

Millions of Yen
2003
Other overseas¥61,257
1,372¥ 11,168—¥3,4692,220

Eliminations

Consolidated¥¥ 75,894——(3,592)

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

62,629

11,1685,689(3,592)75,894

Operating costs and expenses ....

59,430

10,485

5,017(3,604)

71,328Operating income .......................

¥ 3,199

683

¥ 672

12

¥ 4,566

Eliminations

Consolidated¥—(4,175)¥ 76,309
—

¥

Japan

North 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

13,2085,168(4,175)76,309Operating costs and expenses ....

59,27812,918

4,697(4,131)

72,762

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

¥ 2,830

290

¥ 471

(44)

¥ 3,547

Eliminations

Consolidated¥¥

JapanNorth America

Thousands of U.S.dollars*
2003
Other overseas

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

$550,624
12,333$100,387—$31,182
19,955$—(32,288)$682,193—

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

562,957

100,387

51,137(32,288)682,193

Operating costs and expenses ....

534,202

94,24745,097(32,396)641,150

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

$ 28,755

6,140$ 6,040$$ 41,043$108

Export Sales and Sales by Overseas Subsidiaries(Six months ended 30th September 2003 and 2002)

2003

2002

Thousands ofU.S. dollars*
2003

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

¥13,361
6,634
2,599

¥15,451
6,661
2,364

$120,099
59,631
23,362

17.6%
8.7%
3.5%

20.3%
8.7%
3.1%

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

¥22,594¥24,476$203,092

29.8%

32.1%

Millions of Yen

Percentage against
consolidated net sales
2003
2002

RYOBI LIMITED SEMIANNUAL REPORT 2003

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, Japan
Telephone: 81-3-3501-0511

http://www.ryobi-group.co.jp/

Shareholder Information
1.

NUMBER OF SHARES ISSUED:
171,230,715 Shares

2.

LISTING:
Common Stock—Tokyo

3.

TRANSFER AGENT:The Mitsubishi Trust and Banking Corporation
4-5, Marunouchi 1-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 2003