10-Year
VisionGlobal FA Total SupplierInterim Newsletter to Shareholders
for the 100th Fiscal Year
From April 1, 2019 to September 30, 2019CKD Corporation
Stock Exchange Code: 6407

To our shareholders
First, we would like to express our appreciation for your continued support.
Without our shareholders, none of what we have and will accomplish would bepossible.
We would now like to take this opportunity to give you an overview of thebusiness, and report on the settlement of accounts for the first six months of the100th fiscal year of the Company (from April 1, 2019 to September 30, 2019).

President Kazunori Kajimoto

Business review
The Japanese economy has slowed down in the six months ended
September 30, 2019, despite achieving strong results from continued

As for the earnings forecasts for the full year, although ourcomponent products segment is being affected by the prolonged USA-improvements in employment conditions and income environment.
Corporate profits were sluggish in the manufacturing industry due tosuch factors as the stagnation in exports to China, and there some
corporate capital investment were postponed.

China trade dispute, we expect an increase in net sales and profits
due to the resumption of part of the semiconductor capital investmentthat had been postponed. Full-year earnings forecasts announced on
August 6, 2019 have now been revised to net sales of ¥99,500 million,

In overseas economies, despite a decrease in exports from the USA

operating income of ¥2,500 million, ordinary income of ¥2,460 million,

to China and other countries due to the impact of tariff increases inboth countries, domestic demand remained firm, underpinned byand net income attributable to owners of parent of ¥1,720 million inconsideration of the fact that the Group’s net sales, operating income,employment and income conditions. On the other hand, in China,ordinary income, and net income attributable to owners of parent all

growth slowed due to decline in exports to the United States, as well
as a delay in recovery of domestic demand due to the government's

are expected to exceed the previous forecast due to an expected
increase in profits in our automatic machinery segment throughrestraint on investment, etc. In Europe, the manufacturing industry
continued on a stagnation trend due to decline in exports.

improved profitability which we have been working on.
The interim dividend has been set at ¥5 per share, and we expect

Against this backdrop, the CKD Group’s net sales in the six months
ended September 30, 2019 came to ¥47,382 million (down 21.6% YoY),
while operating income was ¥1,130 million (down 62.0% YoY), ordinary

the annual dividend to be ¥11 per share.

income was ¥1,087 million (down 63.6% YoY), and net income
attributable to owners of parent reached ¥683 million (down 69.4% YoY).

encouragement of our shareholders.

As we move forward, we humbly request the further support andBusiness results
Operating income /Operating income ratio

Net sales(Billions of yen)

115.7

54.2

115.7

60.5

Operating income
Operating income ratio

47.4

12.5

99th FY

100th FY interim

98th FY

Net income attributable to owners of parent
Net income margin(Billions of yen, %)

7.9

10.8

5.9
98th FY(Billions of yen, %)Net income attributable to ownersof parent / Net income margin

9.1
4.7
4.3

3.0

2.4
1.1

99th FY

100th FY interim

98th FY

5.4

4.1
4.81.42.20.799th FY

100th FY interim

Results by segment

TopicsAutomatic machinery

14.0％Net sales¥6,626 million
Down 6.8% YoY(Billions of yen)

16.3

16.0

Component products

Automatic packaging systems
registered increased sales for
replacement parts, while industrial
machinery, saw a decrease insales for both lithium-ion battery
production systems and 3D solder
paste inspection machines.
A s a re s u l t , s a l e s f o r t h i ssegment were ¥6,626 million(down 6.8% YoY), and the income
came to ¥1,057 million (thesegment loss of ¥99 million in thesame period of the previous year)
due to improved profitability andcost reductions.

86.0％

Net sales

40,755¥
million
Down 23.6% YoY(Billions of yen)

99.3

99.6

7.3

7.1

46.8

53.3

98th FY

99th FY 100th FY interim

98th FY

99th FY 100th FY interim

Automatic packaging systems

Fine system devices

Enhancement of the CKD-USA Technical CenterIn the domestic market, sales
s i g n i f i c a n t l y d e c re a s e d f o rs e m i c o n d u c t o r p ro d u c t i o nequipment parts due to thepostponement of capital
investment, as well as for machine
tool parts due to the slowdown in
the Chinese economy.
In the overseas market, as inJapan, sales declined due to thepostponement of semiconductor
capital investment, as well as dueto the slowdown in automation
investment in China.
A s a re s u l t , s a l e s f o r t h i ssegment were ¥40,755 million( d o w n 2 3 . 6 % Yo Y ) , a n d t h e
income came to ¥2,084 million(down 61.9% YoY) due to decline
in sales, etc.

Fluid control components

Labor-saving components

Pharmaceutical products packaging Food packaging

We have established an integrated system in the UnitedStates of after-sales services for fluid control components, etc.

CKD-USA Technical Center(Santa Clara, California, USA)

■Development function
・We enhanced our customer response capabilities byincreasing the number of development staff and establishing

Proportional vacuum pressure
control systems (VEC)

a new laboratory.
■Maintenance function
・We expanded the function by introducing maintenanceequipment for the proportional vacuum pressure control
systems (VEC) used in semiconductor production equipment.
■Assembly function
・We expanded the assembly function by installing a clean
room and introducing measuring instruments for inspection.

Maintenance equipment

Clean room

Good Design Award 2019
PowerArm PAW Series
・A power assist device that seamlessly follows movement even when held with one
hand, reduces the burden on the operator.
・Implements excellent design as a collaborative product for human beings that pays

Winding machines for lithium-ion batteries

3D solder paste inspection machines

Electric actuators

Pneumatic control systems

great attention to safety and security.
・Received “Machine and Robot Parts Award” in the grand “Ultra” Monozukuri Parts
award 2019.

Nitrogen gas extraction units NS Series
・Nitrogen gas used to prevent oxidation in food packaging can be easily extracted from

Consolidated Financial Data
Assets, liabilities, and net assets
Assets136,961

Current
assets83,447

Total assets

131,807
Current
assets79,435

Noncurrent
assetsNoncurrent
assets99th FY

100th FY interim

53,513Current liabilities

Noncurrent liabilities

Noncurrent liabilities

37,332

17,693

Net assets

99th FY

100th FY interim

79,444・Provides a comfortable working environment for employees with small children.

(1,966)

・In order to promote diversity, we adopted a business model and design methodthat expresses the world without boundaries in a circle.
Cash and cash
equivalents
at endof period

Cash and cash
equivalents
at beginningof period

Although cash and deposits increased, notes
and accounts receivable - trade, inventories andincome taxes receivable decreased.

Liabilities

Accounts payable - trade and loans payable
decreased

Shareholders’ equity ratio

60.2%, a 1.6 point increase compared with the endof the previous fiscal year

・Received the 13th “Kids’ Design Award”

14,723

12,02852,371

Total assets

In-house nursery “Ohana nursery school”

Net cash infinancing activities

34,669Net assets

80,444(2,744)

7,656

131,807

Current liabilities

19,183

Net cash byoperatingactivities

Total liabilities
and net assets

136,961(Millions of yen)

Net cash ininvesting activities(Millions of yen)
Total liabilities
and net assets

・Implements a modularized all-in-one design with pneumatic equipment.

Cash flows

Liabilities and net assets(Millions of yen)
Total assets

compressed air.
・Addresses food loss reduction and supports long shelf life.

Net cash by operating activities

Income before income taxes of ¥1,067 million,depreciation and amortization of ¥2,816 million,
decrease in notes and accounts receivable trade of ¥2,263 million, decrease in inventoriesof ¥1,758 million, increase in funds resulting fromincome taxes refund of ¥1,099 million, decreasein funds resulting from decrease in notes andaccounts payable - trade of ¥2,316 million

Integration report “CKD Report 2019” issued

100th FY interim

・With the aim to let all our stakeholders understand the complete picture of CKD, we issued thisNet cash in investing activities

Purchase of property, plant and equipment of¥2,281 million

Net cash in financing activities

Repayment of long-term loans payable of ¥1,790
millionSearch here for
IR information

booklet containing information about medium- to long-term management strategies, value
creation, financial information such as business performance, governance, as well as information
not related to finances, such as relationship with the environment and society.
・Going forward, we will utilize this report as a communication tool with our stakeholders andwork to contribute to society through our business and achieve a sustainable society, as well as

CKD IR

Searchraise corporate value.
(Available on our website)

Information for Shareholders
Information on shareholders returns
Shareholder benefits program

Dividends

In order to express our gratitude for the continuing supportof shareholders, and to further increase the investment
appeal of the Company’s shares, we have introduced ashareholder benefits program with the goal of increasing
the number of investors holding positions in our shares overthe medium- and long-term.

1720

98th FY

99th FY

3 years or more

116
5100th FY

Dividend policy■ Details of shareholder benefits

less than 3 years

8Full-year forecasts■ Timing of presentation of benefits
Dispatch of benefits is planned in early June each year.
Number of shares held
100 or more but less than 500 shares
500 or more but less than 1,000 shares
1,000 shares or more
100 or more but less than 500 shares
500 or more but less than 1,000 shares
1,000 shares or more28

20■ Eligible shareholders
Shareholders listed in the shareholders registry as of March 31 each year, and those
who own at least 100 shares (one unit) of the Company, are eligible.

Number of years owned(Yen)37

Details of benefits
QUO gift card 500 yen value
QUO gift card 1,000 yen value
QUO gift card 2,000 yen value
QUO gift card 1,000 yen value
QUO gift card 3,000 yen value
QUO gift card 5,000 yen value

With regard to returning profits to shareholders, thebasic policy of the Company is to raise corporate
value by enhancing the business foundation, and tofurther expand the business through implementing
capital investment and investments in research anddevelopment, etc., while in relation to shareholder
returns, paying a stable dividend.

Company profile (as of September 30, 2019)

Stock information (as of September 30, 2019)Name

CKD Corporation

Total number of authorized shares

233,000,000

Established

April 2, 1943

Capital stock¥11,016,380,748

Total number of issued shares

68,909,449

Head office2-250 Ouji, Komaki City, Aichi 485-8551, Japan
Phone: +81-568-77-1111

Number of employees

2,550 (consolidated: 4,586)

Main businesses

Development, manufacture, sale and export ofautomation machinery, labor-saving components,
pneumatic control components, drive components,
pneumatic auxiliary components, fine systemcomponents and fluid control components

Officers (as of September 30, 2019)
Directors
President

Director and Executive
Shinji Yuhara
Officer
Director and Executive
Katsunori Hayashida
Officer

DirectorJunichi Kagawa
Noriko Asai
Kazumasa Uemura

Audit & Supervisory Board Members
Standing Audit & Supervisory Board Member
Audit & Supervisory Board Member
Audit & Supervisory Board Member
Audit & Supervisory Board Member

Shigeru Ohmori
Koichi Hayashi
Naotaka Nanya
Takeshi Sawaizumi

Shareholder memo
Fiscal year

We would like to use this opportunity to thank ourshareholders for answering the questionnaire on-site in June2019 at the Annual General Meeting of Shareholders and online.
Your responses will be utilized in our future management
and IR activities.
Here is a report of part of the questionnaire results.

Holding period

Important aspects consideredat the time of purchaseTechnical Fellow

Director and Managing
Masafumi Kokubo
Executive Officer

DirectorTatsuya Nishio
Executive Officer Yoshinori Nozawa
Executive Officer Takuya Takahashi
Executive Officer Noriaki Ichimura
Executive Officer Toru Iwata
Executive Officer Katsuhiro Niidera
Executive Officer Kazuhide Okada
Executive Officer Shigeru Kawamura

From April 1 of each year
to March 31 of the following year

Annual General Meeting Held in June each yearof Shareholders
Record date for
year-end dividend:

March 31

Record date forinterim dividend:

September 30

Administrator of shareholder Sumitomo Mitsui Trust Bank, Limitedregistry and account1-4-1, Marunouchi, Chiyoda-ku, Tokyo
Mailing address

2-8-4 Izumi, Suginami-ku, Tokyo 168-0063
Stock Transfer Agency Business Planning Department
Sumitomo Mitsui Trust Bank, Limited(Telephone inquiries)

0120-782-031 (toll-free)

12,385

Shareholder Questionnaire Results

Executive Officers

Kazunori Kajimoto

Director and Senior
Managing Executive Officer Katsuhito Okuoka

Director

Number of shareholders

6%
19%

6%
35%

5655

Future prospects

21%

13%

■ 10 years or more
■ 5 years or more, less than 10 years■ 3 years or more, less than 5 years■ 1 year or more, less than 3 years■ less than 1 year
■ Unknown

Line of businessStability
Dividends
Profitability

2319181110
Management policy
5Familiarity
3
Shareholder benefits
Other(Persons)Opinions and requests received from our shareholders (excerpt)‌Keep improving the performance in a coordinated effort●
involving all employees‌Make a product that will increase customer satisfaction●even while your business performance is not good‌We want the Company to become society-oriented and●value its employees more than ever before, even duringthese difficult conditions around the world▪Website

We provide on our website various
information such as latest news, IR
information, as well as other Special
Contents.

https://www.ckd.co.jp/english/CKD Corporation
2-250 Ouji, Komaki City, Aichi 485-8551, Japan+81-568-77-1111