Message from the Management

SOUNDMANAGEMENT
PLAN

Following the announcement of its Sound Management Plan in March 2000, Ryobi Limited
has made Companywide efforts to fulfill its objectives. Through a sweeping review thatconsiders curtailing and withdrawing from unprofitable businesses, the plan aims to build
a stable, high earnings structure by concentrating management resources to the fullest
extent possible in such fields of expertise as die casting and printing equipment. The focusof the review is on the power tool business in North America, the power tool businessoutside North America and the fishing tackle business. At this time, we are roughly onschedule to complete the plan.
The objectives and status of the Sound Management Plan are as follows:
1) Plans called for transferring to third parties the North America power tool and lawn
and garden equipment businesses. Transfer of the North America power tool business to
TechTronic Industries Co., Ltd. (Hong Kong) was completed in August 2000. Transfer ofthe North America lawn and garden equipment business to MTD Products Inc (U.S.A.)
was completed in June 2000.
2) In the power tool business outside North America, the Company is proceeding tostrengthen cross-sectional management of the Group while streamlining the organizational
structure and reducing personnel. In addition, Ryobi Limited aims to improve profitability
and strengthen competitiveness by transferring production to a subsidiary in Dalian, China,
which has lower manufacturing costs, and by unifying and eliminating models.
3) A sweeping review was conducted in the fishing tackle business. Due to continued challenges in achieving profitability, however, the business was transferred to Johshuya Co.,
Ltd. (Japan) in September 2000.
4) In the die casting business, Ryobi Limited is focusing efforts on the expansion of relationships with customers, especially automobile manufacturers, and on bolstering its threeregion structure of Japan, the United States and Europe to maintain the Company’s position
as a world-leading die casting manufacturer.
5) In the printing equipment business, we will further enhance our high acclaim on theworld market by pursuing high-precision multicolor and advanced functions. The Company
aims to expand from small-size to medium-size printing presses and provide total printing
systems from prepress to press.

PERFORMANCE

During the six months ended 30th September 2000, consolidated net sales totaled ¥99,157million, with domestic net sales of ¥58,764 million accounting for 59.3% and overseas netsales of ¥40,393 million making up 40.7% of the total.
Operating income amounted to ¥6,640 million. Owing to an extraordinary loss recorded in accordance with losses on the sale of the North America lawn and garden equipment business and fishing tackle business, a net loss of ¥410 million was registered.

1RYOBI LIMITED SEMIANNUAL REPORT 2000

By segment, sales of the die casting business were ¥53,317 million, or 53.8% of consolidated net sales, and operating income totaled ¥4,721 million, or 71.1% of consolidated
operating income. As a result, the ratio of operating income to net sales for the segment
was 8.9%. Sales increased on the back of favorable exports of domestic automobile manufacturers to North America and Asia.
Sales of the printing equipment business amounted to ¥11,676 million, accounting for11.8% of consolidated net sales. Operating income was ¥526 million, or 7.9% of consolidated operating income, resulting in a ratio of operating income to net sales of 4.5% forthe segment. In addition to a reduction in exports to Europe due to the strong yen and theweak euro, price competition spurred by European manufacturers intensified in Europeand Japan.
Sales of the power tool business totaled ¥32,080 million, or 32.4% of consolidated netsales. Operating income was ¥1,761 million, representing 26.5% of consolidated operating
income. The ratio of operating income to net sales was 5.5%. Net sales declined due to theexclusion of sales of the North America power tool business from the interim period underreview. Although sales of the North America lawn and garden equipment business wereincluded, they will be excluded from the six-month period ending 31st March 2001, in linewith the sale of the business.
Sales of other business amounted to ¥2,084 million, representing 2.1% of consolidated
net sales. An operating loss of ¥372 million was recorded. Sales of fishing tackle fell sharply
owing to a drop in domestic demand. As previously mentioned, the fishing tackle business
was transferred to Johshuya Co., Ltd. in September 2000.
Conditions in the Japanese economy are expected to remain severe, owing to lackluster
consumer spending, intensified price competition and the stronger yen compared withthe euro. In addition, worries of deceleration of growth in the U.S. economy and rising oil
prices represent unclear and unstable signs of the future.
Under these circumstances, Ryobi Limited will concentrate efforts on adjusting thescale of each business, strengthening the management structure and enhancing results
based on the Sound Management Plan.
Ryobi Limited will make every effort to be a “Sound and Dynamic Corporation” tomeet the expectations of its shareholders, customers and business associates. Thank you
for your continued support.
December 2000

Hiroshi Urakami
President
RYOBI LIMITED SEMIANNUAL REPORT 2000

2

Consolidated Balance Sheets
Ryobi Limited and Consolidated Subsidiaries (Unaudited)

Millions of Yen
30th September
31st March
2000
2000

Thousands ofU.S. Dollars*
30th September
2000

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

¥ 30,547
10,631—50,05037,9194,421
133,568¥ 23,082
2,453
629
51,66144,873
4,952
127,650$ 282,843
98,435—
463,426
351,10240,935
1,236,741

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

62,11472,353575,130

12,480

6,697

115,555

612
2,565
8,853
24,510—¥220,192790
12,06910,449
30,005
8,072¥238,080

5,667
23,75081,972226,944—$2,038,815¥ 50,337
11,36749,082
6,192
531
1,526
6,598
125,633¥ 61,581
13,27343,437
6,371
285
12,625
6,367
143,939$ 466,083
105,250
454,463
57,333
4,917
14,13061,093
1,163,269

58,928
4,072
3,511
66,511

53,3403,897
2,696
59,933545,630
37,70432,509615,843

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

982

848

9,092

Shareholders’ equity
Common stock, par value ¥50 per share:
Authorised: 500,000,000 shares
Issued: 171,230,715 shares .........................................................
Additional paid-in capital ..............................................................
Deficits ...........................................................................................
Valuation reserve of available-for-sale securities ...........................
Adjustments on foreign currency statement translation ..............
Treasury stock ................................................................................
Total shareholders’ equity .................................................
Total ..................................................................................

18,472
23,517(8,969)3,025(8,902)(77)
27,066¥220,192

18,472
23,517(8,555)——(74)
33,360¥238,080

171,037
217,750(83,046)
28,009(82,426)(713)
250,611$2,038,815

Investments and other assets
Investments in securities ...............................................................
Investments in and advances to unconsolidated subsidiaries
and affiliates ..................................................................................
Intangible fixed assets ...................................................................
Other .............................................................................................
Total investments and other assets ....................................
Adjustment on foreign currency statement translation ...................
Total ..................................................................................
LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilities
Short-term borrowings ..................................................................
Current portion of long-term debt ...............................................
Notes and accounts payable ..........................................................
Accrued expenses ..........................................................................
Income taxes payable ....................................................................
Accrued loss on disposal of business segment ..............................
Other current liabilities .................................................................
Total current liabilities .......................................................
Long-term liabilities
Long-term debt .............................................................................
Accrued severance indemnities ....................................................
Other long-term liabilities .............................................................
Total long-term liabilities ...................................................

* U.S. dollar amounts in this report, solely for the convenience of the reader, are translated from yen at the rate of ¥108.00=US$1, the exchange rate
prevailing on 29th September 2000.

3RYOBI LIMITED SEMIANNUAL REPORT 2000

Consolidated Statement of Operations
Ryobi Limited and Consolidated Subsidiaries(Six months ended 30th September 2000) (Unaudited)

Millions of Yen

Thousands ofU.S. Dollars*

Net sales ...........................................................................................
Cost of sales .....................................................................................

¥99,157
75,741$918,120
701,305

Gross profit ..................................................................................
Selling, general and administrative expenses ..................................

23,416
16,776

216,815
155,333

Operating income .......................................................................
Other income
Interest and dividends ...................................................................
Other .............................................................................................

6,640

61,482

213
757

1,972
7,009

Total other income ......................................................................
Other expenses
Interest ...........................................................................................
Loss on disposal of business segment ...........................................
Other .............................................................................................

970

8,981

1,981
4,615
919

18,34342,731
8,509

Total other expenses ...................................................................

7,515

69,583

Income before income taxes and other items .................................

95880

Income taxes ....................................................................................

431

3,991

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

(74)

(685)

Net loss .............................................................................................

¥ (410)$ (3,796)

RYOBI LIMITED SEMIANNUAL REPORT 2000

4

Consolidated Statement of Cash Flows
Ryobi Limited and Consolidated Subsidiaries(Six months ended 30th September 2000) (Unaudited)

Millions of Yen

Thousands ofU.S. Dollars*

Net cash provided by operating activities ........................................

¥ 10,556$ 97,741

Investing activities
Payments for purchase of property, plant and equipment ..........
Proceeds from sale of property, plant and equipment .................
Increase in deposit ........................................................................
Proceeds from sale of business segment .......................................
Payment for sale of business segment ...........................................
Other, net ......................................................................................

(3,506)328(8,179)17,632(874)
33(32,463)
3,037(75,731)
163,259(8,093)306

Net cash provided by investing activities ..........................

5,434

50,315

Financing activities
Proceeds from long-term debt ......................................................
Repayments of long-term debt ......................................................
Decrease in short-term borrowings ...............................................
Other .............................................................................................

13,700(10,176)(11,843)(157)

126,852(94,222)(109,657)(1,454)

Net cash used in financing activities .................................

(8,476)(78,481)

Effect of exchange rate changes on cash
and cash equivalents ........................................................................

(49)

(454)

Net increase in cash and cash equivalents .......................................

7,465

69,121

Cash and cash equivalents at beginning of period ..........................

23,082

213,722

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

¥ 30,547$ 282,843

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

¥ (2,256)$ (20,889)

5

RYOBI LIMITED SEMIANNUAL REPORT 2000

Industry Segment Information(Six months ended 30th September 2000)(Millions of Yen)
Die castings

Printing equipment

Power tools

OtherEliminations

Consolidated

Unaffiliated customers ...............
Intersegment ..............................

¥ 53,317
238¥ 11,676—¥ 32,080
39¥ 2,084
—

¥

—
(277)

¥ 99,157—

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

53,555

11,67632,119

2,084

(277)

99,157

Operating costs and expenses .......

48,834

11,15030,358

2,456

(281)

92,517

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

4,721

526

1,761

(372)

46,640Net sales(Thousands of U.S. Dollars*)
Die castings

Printing equipment

Power toolsOtherNet sales
Unaffiliated customers ...............
Intersegment ..............................

Eliminations

Consolidated$ 493,676
2,204$ 108,111—$ 297,037
361$ 19,296—$—(2,565)$ 918,120—

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

495,880

108,111297,398

19,296(2,565)918,120

Operating costs and expenses .......

452,167

103,241

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

43,7134,870

281,092

22,740(2,602)856,638

16,306(3,444)37

61,482

Geographical Segment Information(Six months ended 30th September 2000)(Millions of Yen)

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

JapanNorth America

Other overseas¥ 66,919
2,686¥ 24,829850¥ 7,4092,449

Eliminations

Consolidated¥¥ 99,157——(5,985)

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

69,60525,6799,858(5,985)99,157

Operating costs and expenses ....

65,44823,864

9,119(5,914)92,517

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

4,157

1,815

739

(71)

6,640
(Thousands of U.S. Dollars*)

JapanNorth America

Other overseas

Eliminations

Consolidated

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

$ 619,620
24,871$ 229,898
7,870$ 68,602
22,676$—(55,417)$ 918,120—

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

644,491

237,768

91,278(55,417)918,120

Operating costs and expenses ....

606,000

220,963

84,435(54,760)

856,638

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

38,491

16,805

6,843

(657)

61,482

Export Sales and Sales by Overseas Subsidiaries(Six months ended 30th September 2000)
Millions of Yen

Thousands ofU.S. Dollars*

Percentage against
consolidated net sales

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

¥27,757
12,636$257,009
117,000

28.0%
12.7%

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

40,393374,009

40.7%

RYOBI LIMITED SEMIANNUAL REPORT 2000

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, engine tools, etc.)• Builders’ hardware (door closers, hinges, etc.)• Sporting goods (golf equipment, etc.)
HEAD OFFICE, BRANCH:• HEAD OFFICE• TOKYO BRANCH• TOKYO BRANCHTORANOMON OFFICE

762, 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

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

Shareholder Information
1.

NUMBER OF SHARES ISSUED:
171,230,715 Shares

2.

LISTINGS
Common Stock—Tokyo, Osaka
Continental Depositary Receipts—Frankfurt

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 2000