FY2020 First Half Financial Results
Ken Shido, President & COO

This is an internal English translation of the YOROZU FY2020 First-half Financial
Report issued in the Japanese language and is provided solely for the convenienceof English speaking readers. In case of discrepancy the Japanese version prevails.

The first section of the Tokyo Stock Exchange (Securities Code: 7294)© YOROZU CORPORATION. 2020 All Rights Reserved.

Contents
Ⅰ. FY2020 First Half Financial Performance
Ⅱ. Operational Status and Tendency of Demand
Ⅲ. FY2020 Annual Forecast
Ⅳ. Recent Activities and Achievements
Ⅴ. Shareholder Return© YOROZU CORPORATION. 2020 All Rights Reserved.

2

1

Ⅰ. FY2020 First Half Performance

Ⅱ. Operational Status and Tendency of Demand
Ⅲ. FY2020 Annual Forecast
Ⅳ. Recent Activities and Achievements
Ⅴ. Shareholder Return

3© YOROZU CORPORATION. 2020 All Rights Reserved.

Consolidated Financial Summary for 1H FY2020 (Year on Year)
Millions of yen

1H FY19

1H FY20

Difference

Old Forecast for1H FY20 *2(Year on Year)Sales

78,20443,930Operating Income

264

Ordinary Income
Net Income *1

Exchange Rate Applied toConsolidated Statements(against forecast)- 34,274

44,000- 4,160- 4,424- 4,700

+ 540

- 432

- 3,615- 3,183- 4,200

+ 585

- 832

- 3,234- 2,402- 4,000+ 766

1H FY19A
Net Income per Share

Difference fromOld Forecast(-43.8%)1H FY20
B

Difference
B-A(-0.2%)- 70

Percentage of
Change- 35.04 yen- 135.40 yen- 100.36 yen―%

110.06 yen/$108.23 yen/$- 1.83 yen/$- 1.7%*1 Net income attributable to parent company shareholders*2 Estimated figures disclosed on August 7, 2020 (1Q)

Sales: Significant decline due to impact of the novel corona virus outbreak (COVID-19)
Operating income: Our continuous efforts to improve profits could not completely cover the production losses
arising from the pandemic, resulting in operating loss
Ordinary income: Loss eased by employment adjustment subsidies and exchange loss turning to gains
Net income: Loss reduced despite extraordinary loss*3 from COVID-19 thanks to negative corporate tax(tax effect) and non-controlling loss
*3 COVID-19 related loss
© YOROZU CORPORATION. 2020 All Rights Reserved.

42

Consolidated Sales by Customer（1H FY19 vs. 1H FY20)
Millions of yen
100,000
90,000Millions of yen

78,20480,00070,000Toyota60,00043,930Honda

50,000-867(-23.3%)40,000ToyotaHonda

30,000-4,736（-37.6％）

1H 2019(%)

1H 2020(%)

Nissan Gr *51,28465.6%

26,996

61.5%

Honda Gr

12,593

16.1%

7,857

17.9%

Toyota Gr

3,723

4.8%

2,856

6.5%

Isuzu

2,605

3.3%

1,710

3.9%

Mazda

2,587

3.3%

1,091

2.5%

Kubota

1,248

1.6%

873

2.0%

VW

1,224

1.6%

530

1.2%

Suzuki

883

1.1%

417

0.9%

Daimler

275

0.4%

361

0.8%

-24,288
GM Gr（-47.4％）

30

0.0%

26

0.1%

Others

1,752

2.2%

1,213

2.7%

Total

78,204100.0%

Nissan20,000

Customer

Nissan10,00043,930 100.0%* Includes sales to Renault

0
1H
2019
2019.2Q

1H 2020
2020.2Q

COVID-19 Impact: Significant decline in sales because of
production reduced at all customer plants© YOROZU CORPORATION. 2020 All Rights Reserved.

5

Analysis of Impact on Consolidated Operating Income(1H FY19 vs. 1H FY20)

Millions of yen
4,000

2,000

1H FY19
Results
264

Sales decrease(COVID-19 impact)

1H FY20
Results0- 2,000

970- 4,000

2,397
Sales decrease(other factors)
Consolidation
adjustment- 6,000- 8,000-7,552-667- 10,000-549

Cost-saving
efforts

637

Depreciation

95

245

Profit from
-4,160die equipment
Exchange rate
effectExtraordinary loss
on fixed costs for
COVID-19- 4,424 Decrease in profits
Loss is due to impact of COVID-19 on sales. Amid the pandemic, the group’s efforts
centering on emergency profit kaizen activities are gradually producing positive results.
© YOROZU CORPORATION. 2020 All Rights Reserved.

63

Sales and Operating Income by Region (Before Consolidation Adjustment, 1H FY19 vs. 1H FY20)◆Sales- 17,294- 50.5％- 9,702- 38.9％Millions of yen

40,00034,21624,935

0

FY19

FY20

FY19

FY20

16,346FY19FY20◆Operating Income

Japan

Americas

Asia

Millions of yen- 1,557- 1,165- 1,332

3,000

Difference% ofChange25,25016,922

15,23320,000- 8,904- 35.3％593

392
0- 3,000- 1,165

- 926

FY20

FY19

FY19

Japan

- 739
- 2,091
FY20

FY19

FY20

Asia

Americas

Direct impact of COVID-19 on a global scale: Operating loss in Japan, the Americas, and Asia
Japan: Sharp drop in customer production volume and overseas royalty income
Americas: Plant temporary shutdowns and production reduced by customers in the U.S., Mexico, and Brazil
Asia: 1Q operations suspended in China, lockdown in India, production reduced in Thailand and Indonesia
7© YOROZU CORPORATION. 2020 All Rights Reserved.

Consolidated Balance Sheet Summary 1H FY2020
Millions of yen

Current Assets

Mar 2020

Sep 2020

Difference

58,38649,735-8,651

Cash & bank deposit+2,599Tangible fixed assets-5,672

Notes and acc’ts receivable -9,538
Electronically recorded monetaryclaims-769
Inventories-748
Other current assets-206

81,31376,841-4,472

139,700

126,577-13,123

Current Liabilities

37,55036,192-1,358Fixed Liabilities

27,59823,638-3,96065,14959,830-5,319Accounts payable-3,168

Shareholders’ Equity

67,67764,322-3,355-8,068-10,580-2,512

Quarterly net loss
Dividend payment-3,234-309

Other Accumulated
Comprehensive Income
Non-controlling interest, etc.

14,941

13,003-1,938Fixed Assets
Total Assets

Total Liabilities

Total Net Assets
Total Liabilities and Net Assets

74,55066,746-7,804

139,700

126,577-13,123

Valuation difference+581
Foreign currency translation
adjustment-3,083

The group have steadily secured liquidities while assets and liabilities declined due to the COVID-19 pandemic.
© YOROZU CORPORATION. 2020 All Rights Reserved.

84

Ⅰ. FY2020 First Half Performance
Ⅱ. Operational Status and Tendency of Demand
Ⅲ. FY2020 Annual Forecast
Ⅳ. Recent Activities and Achievements
Ⅴ. Shareholder Return

9© YOROZU CORPORATION. 2020 All Rights Reserved.

Operation at Major Production Sites (Countries)
Country

Operating Status

FY
End

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Details

Japan

Mar

Since late March, operation suspended orlines reduced to align with customer

U.S.

Dec

March 23 – May 10 Shutdown
Operation currently aligns with customer

MexicoDec

March 30 – May 31 Shutdown
Operation currently aligns with customer

BrazilMar

March 25 – May 17 Shutdown
Operation currently aligns with customer

Thailand

Dec

Since early April, operation suspended orlines reduced to align with customer

India

Mar

March 24 – May 10 Shutdown
Operation currently aligns with customer

Indonesia

Mar

April 10 – June 1 Shutdown
Operation currently aligns with customer

Guangzhou

China

Guangzhou: Feb 5-16 Shutdown
Wuhan: Feb 5-Mar 10 Shutdown
Plant running as usual as of this date

Dec
Wuhan
Shutdown

Temporary shutdown or partial operation

Normal operation

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5

Tendency of Demand under Coronavirus Outbreak
Sales (Parts) by Region (excluding impact of foreign exchange, Year on year based on previous year as 100%）
Global
125%
100%

Japan

Americas125%
Sales YoY

100%

75%

75%

50%

50%

25%

25%

Sales YoY0%0%

1月 2月 3月 4月 5月 6月 7月 8月 9月

1月 2月 3月 4月 5月 6月 7月 8月 9月

1月 2月 3月 4月 5月 6月 7月 8月 9月

1H: Sharp fall in production due to COVID-19
・China: February to March
・Americas: April to May
・Japan/Asia: April to June
2H: China will recover well above the level in thefirst half of the previous year, while in otherareas, recovery from the first half low is expected
but not likely to reach the previous year level.

125%
100%

China

Asia (other than China)
Sale YoY

75%
50%
25%
0%
1月 2月 3月 4月 5月 6月 7月 8月 9月

1月 2月 3月 4月 5月 6月 7月 8月 9月© YOROZU CORPORATION. 2020 All Rights Reserved.

11

Ⅰ. FY2020 First Half Performance
Ⅱ. Operational Status and Tendency of Demand
Ⅲ. FY2020 Annual Forecast
Ⅳ. Recent Activities and Achievements
Ⅴ. Shareholder Return© YOROZU CORPORATION. 2020 All Rights Reserved.

126

Consolidated Financial Forecast Summary for FY2020◆Profit and Loss (Year on Year)
FY2019Results
Sales

FY2020
Forecast

Difference

Old Forecast for
FY2020 *2

Difference fromOld Forecast- 42,680

107,000＋8,000- 4,906- 4,700＋2,000(Year on Year)

157,680

115,000

2,206- 2,700770- 1,900- 2,670- 4,200＋2,300- 12,933- 2,500＋10,433- 4,000＋1,500Operating Income
Ordinary Income
Net Income *1

Millions of yen(-27.1%)FY2019 Results

FY2020 Forecast

Net Income per Share- 544.05 yen- 104.54 yen

Difference＋439.51 yen% of Changes＋80.8%

Exchange Rate Applied toConsolidated Statements

109.03 yen/$

106.00 yen/$- 3.03 yen/$- 2.8%*1 Net income attributable to the parent’s shareholders*2 Estimated figures disclosed on August 7, 2020

Group Performance under the Impact of COVID-19 Pandemic
Sales: While the group expect sales to decline by 27% this year (← down 43.8％ in 1H), China will see growth, andrecovery is expected to accelerate in the Americas and Japan.
Operating income: Though the group expect to post an operating loss , the amount will be smaller thanks to better
performance (in 1H), sales recovery (in 2H), and ongoing emergency profit kaizen efforts . (Will turn profits in 2H)
Upward revision from the old forecast
13© YOROZU CORPORATION. 2020 All Rights Reserved.

Consolidated Sales by Customer (FY19 Results vs. FY20 Forecast)Millions of yen

Millions of yen
180,000
160,000

Customer
Nissan Gr *Honda Gr
115,000
Toyota Gr
Isuzu
-951
Mazda
(-11.6%)
ToyotaKubota-5,164
Honda （-20.7％） VW
Daimler-31,936（-30.6％） Suzuki
GM Gr
NissanOthersTotal

157,680140,000

Toyota120,000

Honda

100,000
80,00060,000

Nissan40,00020,0000

FY19 Results

104,453
24,935
8,185
4,917
4,705
2,259
2,596
667
1,851
86
3,026
157,680(%) FY20 Forecast (%)
66.2% 72,517 63.1%
15.8% 19,771 17.2%
5.2%
7,234
6.3%
3.1%
3,958
3.4%
3.0%
2,807
2.4%
1.4%
2,011
1.8%
1.6%
1,479
1.3%
0.4%
1,428
1.2%
1.2%
1,062
0.9%
0.1%
38
0.0%
2.0%
2,695
2.4%
100.0% 115,000 100.0%* Includes sales to Renault

FY19 Results

FY20 Forecast© YOROZU CORPORATION. 2020 All Rights Reserved.

Net income will decline but recovery is seen from 1H FY2020
while each customer has its own pace of recovery

14

7

Analysis of Impact on Consolidated Operating Income(FY19 Results vs. FY20 Forecast)Millions of yen
4,000

Sales
decrease
Sales
decrease
amid(COVID-19pandemic
impact)COVID-19

2,206
2,000

FY20
Forecast0- 2,000

FY19
Results

233

970
1,350

- 4,000

Sales
decrease(other Profit from die
factors)
equipment
Consolidation
adjustment- 6,000- 8,000-9,361-513- 10,000-177

Depreciation

Cost-saving
efforts-91-2,700

2,683
Exchange rate
effectExtraordinary loss on
fixed costs for COVID-19- 4,906 Decrease in profits
Prospect of posting a loss is not likely to change because of the significant decline in sales due tothe impact of COVID-19. However, the group will continue its efforts in emergency profit kaizen
activities and is expected to post a narrower loss in the second half. (Turn profits in 2H)
15© YOROZU CORPORATION. 2020 All Rights Reserved.

Sales and Operating Income by Region (Before Consolidation Adjustment, FY19 Results vs. FY20 Forecast)◆Sales-11,294-22.6％

Millions of yen

100,000

50,00049,9770

5,000

67,571
43,37038,683FY19◆Operating Income
Millions of yen-24,201-35.8％

FY20

FY19

FY20

-9,216-17.5％
52,563FY1943,347

FY20

Japan

AmericasAsia-2,076-1,133-1,842
2,186

1,755

Changes% ofChange

344

0
-321

- 5,000

FY19

FY20

Japan

-1,900FY19-3,033FY20

Americas

FY19

FY20

Asia

1H FY2020 suggests upwards from the previously-announced forecast despite of sales and profit fall in all segments
year on year due to the impact of COVID-19 pandemic
Japan: Cost-saving efforts brought great recovery in earnings though part sales and royalty falls will make a net loss
Americas: Nissan and Mexico getting back on the right track will reduce the loss that was announced previously
Asia: Sudden recovery in China in the second half of FY2020 will turn the bottom line back to black© YOROZU CORPORATION. 2020 All Rights Reserved.

168

Capital Investment and Depreciation
Capital Investment by Region

Depreciation by Region

Millions of yen
30,000Japan
25,000Americas

Japan

Asia

AmericasAsia

24,64320,01320,00015,451
15,00012,20011,216

11,915

12,075

12,522

10,592

10,20010,000

5,000

0
FY16

FY17

FY18

FY19

FY20
(Forecast)

FY16

FY17

FY18

© YOROZU CORPORATION．2020 All Rights Reserved.

FY19

FY20
(Forecast)

17

Ⅰ. FY2020 First Half Performance
Ⅱ. Operational Status and Tendency of Demand
Ⅲ. FY2020 Annual Forecast

Ⅳ. Recent Activities and Achievements
Ⅴ. Shareholder Return© YOROZU CORPORATION. 2020 All Rights Reserved.

18

9

Emergency Profit Kaizen
Recent Business Impact Factors
・Trade friction between U.S. and China (since 2H 2019)
・COVID-19 impact on sales decline (2020 onwards)
・Close monitoring of major customers’ production volume

We’ll work as One Team to improve profits

Given the situation

Active involvement in Emergency Profit Kaizen Activities that began in 2019
・Achieve efficiency by turning to 1 shift production instead of 2 (reduce costs)
・Achieve efficiency through temporary closure and remote working (reduce commuter
costs, overtime labor)・Reduce directors’ remuneration
・Save expenses by “won’t buy, won’t use” (e.g. save business travel expenses)
・Reduce expenses through centralized purchasing (e.g. purchasing of PPE)
Reduction of fixed costs
・Encourage re-use and review priority of capital investment
Reduction of loss costs
・Ensure visual control of loss (productivity, quality, equipment) at the sites
19© YOROZU CORPORATION. 2020 All Rights Reserved.

Yorozu Monozukuri Strengths
The strengths come from our strong commitment to simultaneous engineering activities involving all engineering
departments otherwise separately engaged in designing, development of new technology & methods, designing of
the production process, dies and welding equipment, ensuring quality, or making dies and plant facilities.

Established product-specific groups across the engineering departments
Suspension Member Group

Suspension Link Group

Swift and Continuous
Simultaneous Engineering
Activities without Barriers

Product Engineering Dept.
R&D Dept.
Mfg. Engineering Dept.
Quality Assurance Dept.
Yorozu Engineering Corp.

Pedal GroupOur Monozukuri Team continues to inspire the Japanese auto parts industry with its awesome new technology
1.8mm
2.6mm
2.6mm
1.8mm

1.8mm

1.8mm
2.9mm
2.9mm

Mujinka Assembly Line

Full-curl Method (tubular formingof steel sheets)© YOROZU CORPORATION. 2020 All Rights Reserved.

Forming of High Tensile 780MPa
Steel Sheets

Tailored Blanking Method

20

10

Yorozu Strengths in Development of Parts - 1
Our strength in the development of suspension parts is built on the foundation of our unique total production
system. The entire designing process takes place at Yorozu - from market research, concept planning, designing,
analysis, trials, and final testing - allowing Yorozu to quickly supply light-weight and sturdy parts at low price .
★Yorozu total production system★Strong ties with world carmakers★

Only Yorozu in JapanDAIMLER
VW
RENAULTISUZUNISSANMAZDA
SUBARUHINOTOYOTAHONDADAIHATSUMITSUBISHISUZUKI

GM
FORD★100% independent development★

★Market research benchmarking★

Only Yorozu in Japan

21© YOROZU CORPORATION. 2020 All Rights Reserved.

Yorozu Strengths in Development of Parts - 2
Yorozu has a unique product development system unlike other competitors. Some of our design engineers are
deployed full-time at carmakers’ R&D centers as a “guest engineer” to jointly work on research and development.
★Yorozu sends its engineers to carmakers around the world for joint development work★
1985

1990

1995

2000

2005

2010

2015

2020

NISSAN (JPN)NISSAN (USA)HONDA(JPN)
HONDA(USA)
MAZDA

MAZDA

ISUZU

ISUZU
DAIHATSUDAIHATSUMITSUBISHI
GM

GM

FIAT

Yorozu has an R&D center in Tennessee allowing for designing and testing of parts around the clock by taking
advantage of the time difference between Japan and the U.S. The speed with which we respond to customer
requirements and requests for development has received high reputation from carmakers around the world.
© YOROZU CORPORATION. 2020 All Rights Reserved.

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Recent Topics on Awards - 1
2020 NISSAN Global Innovation Award●Monozukuri Innovation: Tack & Main Weld
- World’s first method adopted globally●Less investment cost strengthens cost competitiveness Flexible and open to changes in models and volume
 Jigs used for prototyping are adoptable to mass
production
 Versatile and reusable lines that gain significant
cost savings
New method: Tack & Main Weld
Tack weld
Weld all around

Main
weld
Short welds

Existing Method: Sequential

Jig change
23

Recent Topics on Awards - 2
Award for VE (Value Engineering) Activities from Daihatsu Motor
Yorozu received the award for its cost cutting method suggesting “Structure Change” of rearsuspensions. The idea has been adopted to the new SUV models and reduced the part cost by 55%.
Award Details
Daihatsu

OEM

Model

Daihatsu
ROCKY

ToyotaRAIZE

Rear・Suspension(Beam Type)

Reason for
Winning

Original structureof beam section© YOROZU CORPORATION. 2020 All Rights Reserved.

Proposed to change the
red-circled area to havethe structure as shown
below to improve costcompetitivenessYorozu’s proposal

24

12

Recent Topics on Awards - 3
Appreciation Award for Contribution to Development from Nissan Shatai Co., Ltd.
We received the award for contributions to extreme cost-cutting in logistics by immediate transfer
of production from overseas to Japan of the suspension links that are mounted on large SUVs.
Award Details
Nissan Shatai

OEM

INFINITI
QX80

Model

Suspension・Link

Reason for
WinningNissanARMADA

Contributed toreducing logistic
costs by shifting
to domestic
production in ashort time25

© YOROZU CORPORATION. 2020 All Rights Reserved.

Quality Awards from Customers (January - July 2020)
NISSANTOYOTADAIHATSU

2019 Supplier Award from
Nissan Motor Tochigi Plant

Appreciation Award for Quality Activities
from Toyota Motor East JapanJDP 2019 IQS Award
from Daihatsu

HINO

HINO

Excellent Quality Management Award
from Hino Motors

Quality Management Award
from Hino Motors (YAT)© YOROZU CORPORATION. 2020 All Rights Reserved.

GM

Supplier Quality Excellence Award
from GM（YTC）

26

13

Americas

U.S.

MexicoNissan SENTRA

Nissan ROGUE
Honda TLXRADIUS ROD

MBR ASSY-RR SUSPFR SUSP MEMBERFR SUSP MEMBERRR SUSP LWR LINK FRRR SUBFRAME
LINK COMPL-RR SUSP
LWR,RRRR SUSP LWR LINK RR
RR SUSP MEMBER

Asia

ThailandJapan

TRANSV LINK

LINK COMPL-RR SUSP
LWR,FR

Daihatsu ROCKY/Toyota RAIZE

Nissan ROOX

Nissan KICKS

Mitsubishi ekX・ekspace

Daihatsu TANTORR SUSP BEAM

RR SUSP BEAM

TRANSV LINKFR SUSP MEMBERRR BEAM

Honda FITRR BEAMFR SUSP MEMBERFR SUBFRAME

27© YOROZU CORPORATION 2020 All Rights Reserved.

Reshaping Work Style

Working Style

Traditional Style

Goal

Commute to work
Business travel(domestic & overseas)
Face-to-face meeting

Yorozu’s New Style
Work from home (flexible work environments
for all, including CAD operators)
Technical support remotely given
Flexibility in time and place

50% of HQ employees (YC and YGTC) can work remotely

Expected Effects
・Increase motivation and productivity with lower workload
・Reduce office space (cancel new office building construction)
・Make good use of vacant space (renting for satellite offices, etc.）
・Reduce the risk of coronavirus infection© YOROZU CORPORATION. 2020 All Rights Reserved.

28

14

Ⅰ. FY2020 First Half Performance
Ⅱ. Operational Status and Tendency of Demand
Ⅲ. FY2020 Annual Forecast
Ⅳ. Recent Activities and Achievements
Ⅴ. Shareholder Return© YOROZU CORPORATION. 2020 All Rights Reserved.

29

Shareholder Return•FY2020 Dividends
Yorozu has decided to forgo payment of annual dividend forthe fiscal year ending March 31, 2021 due to a net loss
forecasted for the year and the potential impact of ongoing
COVID-19 pandemic on our business. This was a toughdecision for all of us but we are striving ourselves muchharder and working cross-functionally on profit-focusedkaizen activities to resume dividend payment as quickly as
possible. We appreciate your continued support.

© YOROZU CORPORATION．2020 All Rights Reserved.

30

15

Financial Results
First Half FY2020
Thank you for your attention

Yorozu Website

http://www.yorozu-corp.co.jp© YOROZU CORPORATION. 2020 All Rights Reserved.

31

Disclaimer and Copy Rights- Please note that this document contains our business forecast,estimation, and future strategies that are based on the information wereasonably obtained and the judgment we made from normallyanticipated assumptions and beliefs. Unfortunately, such forward-looking
statement does not guarantee the future results and involves risks,
uncertainties, and other factors which may cause material differences infuture performance expressed herein.
We aim to proactively provide fair disclosure of accurate and necessary
information to investors, but you should not place undue reliance on thebusiness forecast and estimation herein to make any decisions.
- Any unauthorized reproduction or distribution of this document isstrictly prohibited regardless of your intention.
For more information, please contact:
AKIRA SASO, Vice President (CEVP&CFO)
orYOSHITAKE TAKAHASHI, Manager, Finance Dept.
Yorozu Corporation
TEL 045-543-6802 FAX 045-543-4915© YOROZU CORPORATION．2020 All Rights Reserved.

16