financial results for the quarter ended sep 30, 2015...q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3...

Copyright © 2015 KITO CORPORATION All rights reserved. 1

Financial Resultsfor the Quarter

ended Sep 30, 2015

KITO CORPORATIONTSE 1st Section: 6409

November 12, 2015


FY2015 2nd Quarter Financial Results

FY2015 Forecast


Summary

Sales ： JPY 25,809 million + 40.3% YoY

Op Income ： JPY 1,505 million + 76.0% YoY

Net Income ： JPY 568 million + 12.7% YoY

Sales and Op income up 40.3%, 76.0% respectively

Japan, with stable demand, and Americas, with Peerless M&A,

have contributed to overall performance

Japan Economic recovery continues, with stable private-sector capital investment

Americas Sales boosted by Peerless, and business in North America is stable,though demand softens among energy related sectors

China Economic slowdown pushes down demand, and uncertainty grows

Asia Chinese economy affects regional economies, slows investment growth

(Apr-Sep 2015)


FY2015 2nd Quarter Financial Highlights

Note: Exchange Rate (FY2014-Q2 -> FY2015-Q2) :USD/JPY 103.0 -> 121.8 CAD/JPY 94.6 -> 96.1 EUR/JPY 138.9 -> 135.1 RMB/JPY 16.7 -> 19.3

JPY in million

FY2014 Q2 (Apr-Sep) FY2015 Q2 (Apr-Sep)

% of

Sales

YoY

Change

% of

Sales

YoY

Change

Sales 18,400 100.0% 4.2% 25,809 100.0% 40.3%

OperatingIncome

855 4.6% (26.7%) 1,505 5.8% 76.0%

OrdinaryIncome

892 4.8% (25.6%) 1,194 4.6% 33.7%

Net Income 504 2.7% (32.2%) 568 2.2% 12.7%

Copyright © 2015 KITO CORPORATION All rights reserved.

17,099

14,468

8,430

9,969

6,591

8,4137,801

10,477

7,430

8,5758,295

11,201

7,996

9,96110,136

14,062

12,122

13,686

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Sales (JPY in million)

Op Margin

7.1%

4.4%3.3%

13.9%

8.0%8.4%

4.5%

12.7%

4.1%

7.1%

1.9%

8.4%

5.7%5.4%

-1.7%

5.8%6.8%

9.1%

5

Net Sales and Operating Margin

OpIncome

FY2014Net Sales 49,968Op Income 3,395



139 609 343

FY2015 ForecastNet Sales 60,000Op Income 5,500

1,419 360 806 809 2,030 280 575 987 1,553

Sales and Op Income up 40.3% and 76.0% respectively,boosted by stable demand in Japan and sales growth from M&A in Americas

538(117) 454 443 878


966


Net Sales by Region

JPY in millionFY2013 Q2 (Apr-Sep) FY2014 Q2 (Apr-Sep) FY2015 Q2 (Apr-Sep) YoY Change

% share % share % shareAmount

Change

%

Change

Total 17,657 100.0% 18,400 100.0% 25,809 100.0% 7,409 40.3%

Japan 5,002 28.3% 5,182 28.2% 5,520 21.4% 338 6.5%

Americas 5,579 31.6% 6,151 33.4% 12,853 49.8% 6,701 108.9%

China 3,853 21.8% 4,073 22.1% 4,159 16.1% 85 2.1%

Asia 2,068 11.7% 1,796 9.8% 2,082 8.1% 285 15.9%

Europe 753 4.3% 891 4.8% 843 3.3% (48) (5.4%)

Others 399 2.3% 304 1.7% 350 1.4% 46 15.3%

3 2 %2 2 %

4 %2 %1 2 %2 8 %

Japan

Americas

China

Asia

Europe

Others49.8%

16.1%

3.3%

1.4%

8.1% 21.4%

78.6 % fromNON-JP market

71.8 % fromNON-JP market

FY2015

Q2

Globally diversified portfolio with almost 80% of non-Japanese sales

33 .4%

22 .1%

4 .8%1 .7%

9 .8%28 .2%

Note: Exchange Rate (FY2014 Q2 -> FY2015 Q2) : USD/JPY 103.0 -> 121.8 CAD/JPY 94.6 -> 96.1 EUR/JPY 138.9 -> 135.1 RMB/JPY 16.7 -> 19.3

FY2014Q2


Net Sales by Region (Japan)

JPY in million

3,018

2,501

2,042

3,096

2,541

3,270

2,460

3,235

2,567

3,417

2,306

2,696 2,840

3,782

2,256

2,926

2,738

3,781


- Private-sector capital investment has been stable

- Demand among construction concerns expected to grow in 2nd half

FY2015 Forecast12,800

FY201110,949

FY201211,679

FY201311,624

FY201411,702


22,97224,939

26,903

38,146

29,456 29,16128,023

35,705

28,71628,035

32,631

41,589

28,83731,587

71,443 69,291

50,538

55,000


USD in thousand

The graph shows the total of sales in the US, Canada and Latin America(converted to USD in thousand).


FY2011112,960

FY2012122,345

FY2013130,971

Net Sales by Region (Americas)

FY2014201,158

- Sales were boosted by Peerless, consolidated in Oct 2014

- Business excluding Peerless is in good condition

- Demand among energy-related and

exporting companies is softening


130,813

105,923

135,467

121,062

138,085

158,368

142,675

174,583

127,252

163,980

147,982

155,473

143,920

136,236

144,526

114,222115,090

170,473


RMB in thousand

Fiscal year of China starts in January and ends in December


FY2011646,099

FY2012571,478

FY2013563,071

Net Sales by Region (China)

FY2014508,836

- Economic slowing continues, with growing uncertainty

- Our products are rated highly, boosting market share despite slowing


940

2,579

1,300

1,014

782

2,884

1,216

1,366

702

1,977

1,131

907

611

1,717

577

739

575

1,141


The fiscal year of Thailand and Korea beginsin January and ends in December

JPY in million


FY20113,608

FY20124,626

FY20136,168

Net Sales by Region (Asia)

FY20145,676

- The Chinese economy affects other regional economies,

slowing equipment investments growth

- Enhancing crane service business and hoist sales

- Strengthen administrative operations

to improve profit management

Copyright © 2015 KITO CORPORATION All rights reserved.

Operating Income Comparison

1,358(1,805)

1,020

(132)

209

1,505855

Apr-Sep 2014

CurrencyImpact

Increase inSales Volume

Increase inSales Price

Increasein SGA (JPY in million)

Apr-Sep 2015

UnrealizedProfit

757 from Peerless, which wasconsolidated from Dec quarter 2014

162 from amortization of goodwill fromconsolidation of Peerless

476 fromcurrency impact

11


FY2015 2nd Quarter Consolidated Balance Sheet

JPY in millionMar2015

Sep2015

Change

Current Assets 40,478 39,569 (908)

Cash 9,792 9,400 (391)

Account receivables 12,593 10,372 (2,221)

Inventories 15,105 16,628 1,522

Others 2,986 3,167 181

Fixed Assets 22,703 22,708 4

Tangible fixed assets 12,161 12,817 656

Intangible fixedassets

9,009 8,335 (674)

Investment & otherassets

1,532 1,555 22

Deferred assets 1 0 (1)

Total assets 63,183 62,278 (905)

JPY in millionMar2015

Sep

2015Change

Current Liabilities 17,093 16,309 (783)

Account payable 6,113 6,589 476

Short-term debt 4,319 4,772 452

Others 6,660 4,947 (1,713)

Fixed Liabilities 20,464 20,160 (303)

Long-term debt 16,025 15,469 (556)

Others 4,438 4,691 252

Total net assets 25,626 25,808 181

Total liabilities andnet assets

63,183 62,278 (905)


Consolidated Cash Flows

JPY in millionApr-Sep

2014Apr-Sep

2015Change

Cash flows fromoperating activities

1,353 1,878 524

Cash flows frominvesting activities

(7,816) (744) 7,071

Cash flows fromfinancing activities

9,028 (1,470) (10,498)

Effect of exchangerate changes on cashand cash equivalents

(774) (45) 729

Net increase(decrease) in cash andcash equivalent

1,790 (381) (2,171)

Cash and cashequivalents at endof period

8,126 9,395 1,269

[Cash flows from operating activities]Income before income taxes: 1,194

Decrease in account receivable 2,286

Increase in inventories 1,608

Payment of income tax 864

[Cash flows from investing activities]

Payment for the acquisition of

tangible fixed assets 603

Payment for the acquisition of

intangible fixed assets 158

[Cash flows from financing activities]

Increase in long term debt 1,000

Payment of long term debt 1,400

Payment of bond 1,000

Major Items for Apr-Sep 2015


FY2015 2nd Quarter Financial Results

FY2015 Forecast


FY2015 Forecast

JapanJapan

AmericasAmericas

Market- Economic recovery from previous FY continues, andprivate-sector investment is growing moderately

- Demand is increasing in infrastructure sectorInitiatives- Develop sales network with crane builders- Expand product offerings for new business areas,such as theatrical hoists for entertainment concerns

Market- Economic recovery from previous FY continues, andprivate-sector investment is growing moderately

- Demand is increasing in infrastructure sectorInitiatives- Develop sales network with crane builders- Expand product offerings for new business areas,such as theatrical hoists for entertainment concerns

Market- Continuing demand in broader industries- Softening demand in resources and energy sectorsInitiatives- Strengthen competitive position in the marketswith broader product offerings

- Expand local manufacturing for efficient supply chain


FY2015 Forecast

ChinaChina

AsiaAsia

Market- Slowdown continues, pushing down overall demandInitiatives- Focus on cost and profit management to ensurehigh margin

- Expand local production and product offering forhigher market share

Market- Slowdown continues, pushing down overall demandInitiatives- Focus on cost and profit management to ensurehigh margin

- Expand local production and product offering forhigher market share

Market- Slowdown of Chinese economy affects Asian regions,slowing equipment investments

- Regional uncertainty is needed to be closely monitoredInitiatives- Enhance service business for crane users- Strengthen administrative operation to improve profitmanagement


FY2015 Forecast / Net Sales by Region

JPY in million

FY2014

(ended Mar 2015)

FY2015 Forecast(ending Mar 2016)

YoY Change

% share % share Amount % Change

Total 49,968 100.0% 60,000 100.0% 10,031 20.1%

Japan 11,702 23.4% 12,800 21.3% 1,097 9.4%

Americas 21,888 43.8% 30,500 50.8% 8,611 39.3%

China 8,198 16.4% 8,300 13.8% 101 1.2%

Asia 5,676 11.4% 5,700 9.5% 23 0.4%

Europe 1,823 3.7% 1,900 3.2% 76 4.2%

Others 677 1.4% 800 1.3% 122 18.0%

2 7 %2 5 %

4 %3 %7 %3 4 %

Japan

Americas

China

Asia

Europe

Others

21.3%

50.8%

13.8%

9.5%

3.2%1.3

%

Mar 2016Forecast

43.8%

16.4%

3.7%1.4%

11.4% 23.4%

Mar 201576.6% fromNON-Japanese market

78.7% fromNON-Japanese market

Note: Exchange Rate (FY2014 -> FY2015) :USD/JPY 109.9 -> 115.0 CAD/JPY 96.5 -> 95.0 EUR/JPY 138.8 -> 130.0 RMB/JPY 17.2 -> 18.8


FY2015 Forecast

1,505

3,395

5,500

855

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

25,809

60,000

49,968

18,400

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000 JPY in million JPY in million

FY2014 FY2015

1H Full 1H Full (FCST)

FY2014 FY2015

1H Full 1H

Op IncomeOp Margin

4.6％

5.8％

6.8％

9.2％

Americas and Japan will lead overall growth to JPY 60 billionscovering slowdown in China and Asia

Net Sales Operating Income, OP margin

Full (FCST)


FY2015 Forecast

JPY in million

FY2014 (ended Mar 2015) FY2015 Forecast (ending Mar 2016)

% ofSales

YoYchange

% ofSales

YoYchange

Net Sales 49,968 100.0% 19.4% 60,000 100.0% 20.1%

Operating Income 3,395 6.8% (15.2%) 5,500 9.2% 62.0%

Ordinary Income 3,423 6.8% (16.4%) 5,000 8.3% 46.0%

Net Income 2,026 4.1% (14.2%) 3,000 5.0% 48.0%

EPS JPY 77.52 - - JPY114.36 - -

ROE 8.9% - - ≒12.2% - -

CAPEX 1,408 - - 2,200 - -

Depreciation 1,311 - - 2,000 - -

Improvement in EPS and ROE

Note: Exchange Rate FY2014 -> FY2015：USD/JPY 109.9 -> 115.0 CAD/JPY 96.5 -> 95.0 EUR/JPY 138.8 -> 130.0 RMB/JPY 17.2 -> 18.8


- Transform into a global company- Expand global sales to JPY 100 billion

Mid-termTarget

Estimated sales and targetsJPY in billion Expand global sales to JPY 100 billion

Transform into a global company

There will be a golden opportunity in the next fiveyears for KITO to expand its scale and become the“Truly global No.1 hoist manufacturer.” KITO willchange a Japan-centric operation to a globallyintegrated operation utilizing resources and skillsof the KITO group worldwide.

Increase sales to JPY 58 billion through theorganic growth and achieve further growthby M&A to achieve JPY 100 billion sales.

Mid-term Management Targets (2011 – 2015)

Assumption in 2011

28

58

0

200

400

600

800

1,000

FY2010 Actual FY2015Target

M&As

Organic growth


Progress of Mid-term Management Plan

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FCST

Net sales target is JPY 60 billion for the last year of Mid-term planWith organic growth and M&A, CAGR will reach 20%

Operating Margin(Actual)Operating Margin(Actual)

2832

3337 36

43 42

50

58

6.8%

9.6%

7.1%

5.0%4.0%

60

50

JPY in billion


Our mission is to become the “truly global No. 1 hoistmanufacturer” by adding value to our customers thatsurpasses their expectations and maximizes the value ofthe KITO brand on the market.

financial results for the quarter ended sep 30, 2015...q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3 q4 q1 q2 q3...

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