Stock Exchange Code: 6407

Automation Technology for the FutureInterim Newsletter to Shareholders
for the 99th Fiscal Year
From April 1, 2018 to September 30, 2018

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 wouldbe possible.
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 the99th fiscal year of the Company (from April 1, 2018 to September 30, 2018).

Business reviewPresident Kazunori Kajimoto

The Japanese economy gradually improved in the six months ended September 30, 2018, driven by a solid volume of personal
consumption resulting from continued improvements in employment conditions and income environment. Strong domestic demandand gradual increase in exports led to an improvement in corporate income, which was used for greater capital investment toimprove productivity, streamline operations, and save labor.
In terms of overseas economies, employment in the USA remained favorable, resulting in strong personal consumption thatenabled expansion of production activities. European economies showed recovery as a result of measures such as monetary easing.
In China, personal consumption provided a foundation for strong results despite the slowdown in infrastructure investment due togovernment restrictions, and the impact of the trade dispute with the USA.
Against this backdrop, the CKD Group’s net sales in the six months ended September 30, 2018 came to ¥60,455 million (up11.5% YoY), while operating income was ¥2,979 million (down 49.0% YoY), ordinary income was ¥2,988 million (down 49.3% YoY),
and net income attributable to owners of parent reached ¥2,235 million (down 47.6% YoY).
Full-year earnings forecasts announced on May 14, 2018 have now been revised to net sales of ¥116,000 million, operating
income of ¥6,700 million, ordinary income of ¥6,700 million, and net income attributable to owners of parent of ¥4,800 million inconsideration of the performance of the CKD Group over the six months ended September 30, 2018 and recent trends in orders
influenced by the slowdown of semiconductor memory capital investments and decrease in automation investment in China.
The interim dividend has been set at ¥20 per share, and we expect the annual dividend to be ¥40 per share. As we move forward,
we humbly request the further support and encouragement of our shareholders.

Business results
Net sales(Millions of yen)

115,700
94,012

42,94397th FY

Operating income / Ordinary income /Operating income ratio / Ordinary income ratio

Net income attributable to ownersof parent / Net income margin

Operating income
Ordinary income (Millions of yen, %)Operating income ratio
Ordinary income ratio
10.8 10.8
10.4

Net income attributable to owners of parent
Net income margin(Millions of yen, %)10.2

54,23360,4559,580 9,771

4,151 4,056

98th FY

99th FY interim

97th FY

12,472 12,469

4.9
5,845 5,896
2,979 2,988

98th FY

7.4

4.9

99th FY interim

7.9
9,142

3.7

6,958
2,801

97th FY

4,268

98th FY

2,235

99th FY interim

Profit and loss

Assets, liabilities, and net assets(Millions of yen)

Net sales Cost of sales

60,455

Assets45,505

Total assets

Total assets

Selling,
general andadministrative
expenses

Current assets

Current assets

11,970Noncurrent assets

Noncurrent assets

End of 98th FY

End of 99th FY interim

83,726

Operating Non-operating
incomeincome2,979

9Ordinary
income2,988

Extraordinary
income2

Net income
Incomeattributable totaxes owners of parent

734

2,235

99th FY interim

47,160Total liabilities
and net assets(Millions of yen)
Total liabilities
and net assets

Current liabilities

Current liabilities

132,991

130,887
43,074(Millions of yen)

Cash and cash
equivalents at
beginning of period

Liabilities and net assets(Millions of yen)

130,887

Cash flows

14,799Net cash byoperating
activities(318)

132,991

8,423

42,515

Noncurrent liabilities 7,754 Noncurrent liabilities 9,386

82,200Cash and cash
equivalents at
end of period

Net assets

Net assets

Net cash ininvestingactivities(6,802)End of 98th FY

End of 99th FY interim

99th FY interim

80,05850,79081,089Net cash infinancing
activities
674

Results by segment
Automatic machinery
There was a decrease in the sales of automatic

packaging systems for pharmaceutical products.

Industrial machinery, meanwhile, saw an increasein sales for both 3D solder paste inspection machines
and lithium ion battery production systems.

As a result, sales for this segment were ¥7,106

million (down 3.7% YoY), and the segment loss

Net sales¥53,348 million

Down 3.7% YoY

Up 13.9% YoY

18,380

million in the same period of the previous year) due
as well as strategic order taking from overseas withNet sales¥7,106 million

16,344

came to ¥99 million (the segment income of ¥391
to tough conditions regarding domestic order prices

Component products

7,107

7,376

97th FY

98th FY 99th FY interim

99,355Automaticmachinery

75,631

11.8％

35,83546,856an eye to the future.

Automatic packaging systems
Pharmaceutical products packaging

Net sales

60,455¥
Food packaging

97th FYmillion

98th FY 99th FY interim

In the domestic market, sales increased for semiconductor production equipment parts due to ongoing
capital investments mainly in memory, and for machine
tool parts due to steady domestic demands.
In overseas markets, sales increased mainly in Eastand Southeast Asian countries, though a slowdown ininvestment in semiconductor facilities was observed
as was in the domestic market.
As a result, sales for this segment were ¥53,348
million (up 13.9% YoY), and segment income cameto ¥5,473 million (down 28.7% YoY) due to theincrease in costs arising from capital investment
and production staff reinforcement to cope with theincreased sales, and the slowdown of semiconductor
memory capital investments from the second quarter
ended September 30, 2018.

Fine system devices

Fluid control components

Electric actuators

Pneumatic control systems

Componentproducts

88.2％

Winding machines for lithium-ion batteries

3D solder paste inspection machines

Labor-saving componentsCompany profile (as of September 30, 2018)

Shareholder memoName

CKD Corporation

Fiscal year

EstablishedApril 2, 1943

Capital stock¥11,016,380,748

Head office

250, Ouji 2-chome, Komaki, Aichi, 485-8551, Japan
Phone: +81-568-77-1111

From April 1 of each year to March 31 of thefollowing year

Annual General Meeting Held in June each yearof Shareholders
Record dates

Annual General Meeting of Shareholders: March
31st of each year
Year-end dividend: March 31st of each year
Interim dividend: September 30th of each year
Also held as necessary on other dates, as set
and publically announced in advance

Method of public
noticeTo be made public on the Company website.
(https://www.ckd.co.jp/japanese/ir/bspl.htm)

Number of employees 2,497 (Consolidated: 4,627)
Main businesses

Directors
President
Director
Director
Director
Director
Director
Director

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

Number of shares of one unit 100Officers (as of September 30, 2018)

Stock exchange listing Tokyo Stock Exchange and Nagoya Stock ExchangeFirst Section (stock exchange code: 6407)

Executive Officers

Kazunori Kajimoto
Katsuhito Okuoka
Masafumi Kokubo
Shinji Yuhara
Junichi Kagawa
Noriko Asai
Kazumasa Uemura

WebsiteManaging Executive Officer Katsuhito Okuoka
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer

Audit & Supervisory Board Members

Executive Officer

Standing Audit &Supervisory Board Member Shigeru Ohmori

Executive Officer

Audit & Supervisory Board
Koichi Hayashi
MemberExecutive Officer
Executive Officer

Audit & Supervisory Board
Naotaka Nanya
MemberExecutive Officer

Audit & Supervisory Board
Takeshi Sawaizumi
MemberExecutive Officer

Masafumi Kokubo
Shinji Yuhara

Tatsuya Nishio

Yoshinori Nozawa
Takuya Takahashi

Yoshikazu Yamauchi
Noriaki Ichimura

Number of shareholders

Kiyoshi Fukui

28.50%

25.99%

Individuals

22.33%(Mailing address)

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

Kazuhide Okada

0120-782-031
https://www.smtb.jp/personal/agency/index.html

Katsunori Hayashida[Notifications and inquiries regarding changes of address, etc., in relation to shares]
Shareholders who have an account with a securities company are requested
to direct inquiries and notifications regarding changes of address, etc., tothe securities company at which the account is held.
Shareholders who do not have an account with a securities company arerequested to use the telephone number for inquiries given above.

233,000,000
68,909,449
13,105

Securities
Corporations companies

10.36%

15-33, Sakae 3-chome, Naka-ku, Nagoya
Stock Transfer Agency Business Planning Department
Sumitomo Mitsui Trust Bank, Limited(Telephone inquiries)

Katsuhiro Niidera[Special accounts]
For shareholders who were not using JASDEC (Japan Securities Depository
Center, Incorporated) before the introduction of the electronic sharecertificate system, we have opened an account (referred to as a“specialaccount”) at the administrator of shareholder registry, the above-mentioned
Sumitomo Mitsui Trust Bank, Limited. Please direct inquiries regarding
special accounts to the telephone inquiries number given above.

Breakdown by shareholder type

Financial
Foreigninstitutions corporations, etc.

Administrator ofshareholder registryand handling office

Toru Iwata

Stock information (as of September 30, 2018)
Total number of authorized shares
Total number of issued shares

https://www.ckd.co.jp/english/

Administrator of shareholder 1-4-1, Marunouchi, Chiyoda-ku, Tokyo
Sumitomo Mitsui Trust Bank, Limited
registry and accountmanagement institution for
special account

2.68%

Treasurystock10.14%

Information on shareholders returns
Shareholder benefits program

Dividends(Yen)

In order to express our gratitude for the continuing support ofshareholders, and to further increase the investment appealof the Company’s shares, we have introduced a shareholder
benefits program with the goal of increasing the number ofinvestors holding positions in our shares over the mediumand long-term.

3730
1614

■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.

■Timing of presentation of benefits■Details of shareholder benefits

Details of benefits

100 or more but less than 500 shares

QUO gift card

500 or more but less than 1,000 shares

QUO gift card 1,000 yen value1,000 shares or more

QUO gift card 2,000 yen value

CKD Corporation

250, Ouji 2-chome, Komaki, Aichi, Japan+81-568-77-1111

20

17

20

98th FY

99th FY

Dividend policy

Dispatch of benefits is planned in late June each year.

Number of shares held

97th FY20

Full-year forecasts
40

500 yen value

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

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