KITO CORPORATION ( TSE 1 st Section:6409)

Transcription

1 Nov 26, 2010 Results of Operations 1st Half Year Ended September 30, 2010 KITO CORPORATION ( TSE 1 st Section:6409)

2 First Half of FY 2010 Financial Results 2

3 First Half of FY2010 : Financial Highlights ( in millions) FY st Half Year FY st Half Year Pct. Of sales YoY Pct. Of sales YoY N e t s a l e s 11, % 33.7% 12, % 13.0% Operating income % 94.8% % 191.8% Ordinary income % 95.2% % 10.2% N e t i n c o m e 4 0.0% 99.5% % 516.4% E P S % % Note:Exchange rate(fy2009 1H FY2010 1H) USD CAD EUR RMB Most of the market expect Japan showed recovery. As a result, consolidated net sales were 12.5 billion, up 13% YoY. Operating income improved due to the increased volume, but ordinary income stayed due to high JPY. Half Year Business Results ( in millions) Net sales Operating income 25,000 FY 2008 FY 2009 FY ,000 16,790 15,815 15, % 11,127 10,000 12,798 12, % 5, % 0.8% 2.0% 0 1H 2H 1H 2H 1H 3

4 Consolidated Net Sales by Region ( in millions) FY st H.Y. FY st H.Y. YoY Share Share Difference Pct. change Consolidated net sales 11, % 12, % 1, % J a p a n 4, % 4, % % North America 2, % 3, % % c h i n a 2, % 3, % % A s i a % % E u r o p e % % % O t h e r s % % % Note:Exchange rate(fy2009 1H FY2010 1H) USD CAD EUR RMB Sales Composition - Overseas 63.6% China 24.0% Europe 6.4% Others 3.3% Asia 3.7% Japan 36.4% FY st H.Y. North America 26.0% Overseas 65.6% Asia 4.5% China 27.0% Europe 4.4% Others 3.8% FY st H.Y. North America 25.9% Japan 34.4% 4

5 Net sales by Region (Japan) Factory demand showed certain recovery supported by the improving capacity utilization lead by auto-industry. Construction and civil engineering demands remained sluggish. Despite signs of a recovery after hitting the bottom, uncertainty looms over the future due to a sharp appreciation of the yen. 3,851 ( in millions) 3,242 3,114 3,415 2,849 2,509 1,964 2,091 2,012 1,816 Apr-Jun Jul-Sept Oct-Dec Jan-Mar Apr-Jun Jul-Sept Oct-Dec Jan-Mar Apr-Jun Jul-Sept Oct-Dec Jan-Mar FY08 Net sales : 13,622 million FY09 Net sales : 8,916 million FY10 Net sales (e) : 9,950million 5

6 Net sales by Region (North America) Sales increased 19% YoY supported by the increasing demand in wide range of industries. Increasing opportunity in Power industries Uncertainty still remains, but less possibility of second-dip. (USD in thousands) 21,455 19,612 18,097 19,858 19,732 13,277 12,386 14,368 15,708 15,210 Apr-Jun Jul-Sept Oct-Dec Jan-Mar Apr-Jun Jul-Sept Oct-Dec Jan-Mar Apr-Jun Jul-Sept Oct-Dec Jan-Mar FY08 Net sales : $79,022 thousand FY09 Net sales :$ 59,763 thousand FY10 Net sales (e) :$ 71,367 thousand The graphs represent net sales in the US market 6

7 Net sales by Region (China) Domestic capital investment demands remained strong. Nuclear power plant also contributed to sales. Cost of materials, which was initially a concern, increased slightly and margins remained favorable. 144,533 (RMB in thousands) 96, , ,741 87,629 90, , , , ,661 Jan-Mar Apr-Jun Jul-Sept Oct-Dec Jan-Mar Apr-Jun Jul-Sept Oct-Dec Jan-Mar Apr-Jun Jul-Sept Oct-Dec FY08 Net sales : 404,867 thousand RMB FY09 Net sales : 408,970thousand RMB FY10 Net sales (e) : 554,643 thousand RMB China s fiscal year begins in January and ends in December. 7

8 Comparisons of Quarterly Net Sales and Operating margin Quarterly net sales and operating margin ( in millions) Net sales 7,993 8,796 8,138 7,678 5,224 5,902 5,574 Operating margin 7,225 5,863 6, % 8.5% 5.3% 6.2% 3.5% -0.4% 1.8% 0.2% 3.5% -1.7% Apr-Jun Jul-Sept Oct-Dec Jan-Mar Apr-Jun Jul-Sept Oct-Dec Jan-Mar Apr-Jun Jul-Sept Operating income FY2008: Net sales 32,605 million Operating income 2,366 million FY2009: Net sales 23,925 million Operating income 437 million FY2010 (e): Net sales 28,000 million Operating income 1,100 million 8

9 Comparisons of Operating income Factor for 165 million increase in operating income ( in millions ) Increase in sales Rise in product prices 68 Increase in material costs 70 Increase in SG&A expenses 259 Exchange FY2009 1H 250 FY2010 1H 9

10 First Half of FY2010 Consolidated Balance Sheet ( in millions) FY 2009 FY H Difference FY 2009 FY H Difference Current assets 16,652 17, Current liabilities 6,916 6, Cash & deposits 5,361 6,732 1,371 Notes and accounts payable 3,385 3, Note & accounts receivable 4,568 3,405 1,163 Short-term debt 1, Inventory assets 5,648 5, Accrued liabilities Fixed assets 9,034 8, Fixed liabilities 2,998 4,308 1,310 Tangible fixed assets 7,024 6, Bond 900 1, Intangible fixed assets Long-term debt Investment & other assets Total assets 1,345 25,700 1,453 26, Total net assets Total liabilities and net assets 15,786 25,700 15,097 26, Major increase and decrease(assets) Major increase and decrease (Liabilities and assets) Cash & deposits 1,371 million Notes and accounts payable 544 million Note & accounts receivable - 1,163 million Short-term debt million Bond 850 million Long-term debt 480 million 10

11 First Half of FY2010 Consolidated Cash Flows FY H FY H ( in millions) <FY H Results > 6,732 Major items of cash flows from operating activities ( 1,571 million) Income before income taxes 101million 4,162 Depreciation cost Decreased trade receivable 491million 1,023million Decrease inventories - 350million ,571 1, Decrease accounts payable 688million Major items of cash flows from investing activities (- 511 million) Acquisition of plant assets - 439million Major items of cash flows from financing activities ( 530 million) Operating CF Investing CF Financing CF Cash and cash equivalents, end of year (or period) Free CF Increase short-term dept Increase Long-term dept Increase bond issue Dividends paid - 733million 600million 1,000million - 121million 11

12 FY2010 2H Business Strategy and Forecast 12

13 Future Business ~Product Strategy~ Full-scale entry into the RH market Expanded in product lines Purchased Hoist business in Japan from KONECRANES Start production and development of self-developed product in China MHS KONECRANES Co., Ltd. One of the nation s most popular Rope Hoist maker No. of employees:54 Sales:1.6 billion yen (FY2009) Improve Product lines Full-scale entry To Japan, North America And Other regions Enhance selection of periphery equipments of RH and Crane Future expand in other products Expand into environmental energy-related, food, etc Attract demands for existing customer s upgrading and maintenance 13

14 Future Business Policy ~Regional Strategy~ Grad growing Market opportunities China Thailand Strengthening of product supply system: Expand Jiangyin factory to strengthen production capacity 2010 Production capacity 40,000units/year 60,000 units annually within a few years Capture the increasing demands from foreign investment Full-scale entry India Armsel Major location:bangalore Customers:Over 400 companies in India Business:Sell highly-value added cranes Customer base:infrastructurerelated, mining, Manufacturing sector Acquire all shares of Armsel, a local crane manufacturer, and start full- scale business operations in the future Combine Armsel and KITO s technologies, networks, knowhow, etc. to further expand operations in the local markets Develop local markets and also focus on expanding sales for local Japanese manufacturers Brazil Indonesia Vietnam Russia Now taking actions toward a full-scale entry for the future 14

15 FY2010 Business Forecast ( in millions) FY2009 FY2010 (Forecast) Pct. Of sales YoY Pct. Of sales YoY Net sales 23, % 26.6% 28, % 17.0% Operating income % 81.5% 1, % 151.3% Ordinary income % 76.9% % 69.5% Net income % 89.7% % 266.9% Note) Exchange rate(fy09 FY10): USD CAD EUR RMB nd Half Year assumed rate : USD 82.0 CAD 80.0 EUR RMB 13.0 A full-scale entry into the WRH market in Japan, North America and other regions Expansion of production capacity in China, Jiangyin factory Expand sale in China and supply globally with RH products Supply chain optimization Assembly in China and North America 15

16 FY2010 Net sale by Region(Forecast) Consolidated net sales J a p a n North America C h i n a A s i a E u r o p e O t h e r s 23,925 8,916 6,414 5,510 1,284 FY Share 100.0% 37.3% 26.8% 23.0% 4.0% 5.4% 3.5% 28,000 FY2010 9,950 7,100 7,100 1,700 1,150 1,000 Share 100.0% 35.5% 25.4% 25.4% FY2009 YoY change 26.6% 34.5% 28.5% 5.4% 33.3% 19.4% 27.2% Note) Exchange rate(fy09 FY10): USD CAD EUR RMB nd Half Year assumed rate : USD 82.0 CAD 80.0 EUR RMB 13.0 Asia 4.0% Europe 5.4% Others 3.5% - Sales Composition - Europe 4.1% Asia 6.1% Others 3.6% ( in millions) FY % 11.6% 10.7% 28.9% 78.5% 10.5% 17.8% Overseas 62.7% China 23.0% FY 2009 Japan 37.3% Overseas 64.5% China 25.4% FY 2010(e) Japan 35.5% North America 26.8% North America 25.4% 16

17 Comparison of Operating income (Forecast) Factor for 663 million increase in operating income ( in millions) Increase in sales Rise in product prices 285 Increase in material costs 168 Increase in SG&A expenses 726 Exchange 1, , FY2009 FY2010(E) 17

18 Policy on Distribution of Profits to Shareholders Record date Interim Dividends per share Year-end Annual total Dividend payout ratio FY08 (results) 3,000 1,500 4, % FY09 (results) 1,000 1,000 2, % FY10 (forecast) 1,000 1,000 2, % 18

19 We will continue providing values beyond customer expectations and maximize KITO brand in the market to aim to become the world s best and genuine hoist manufacturer. 19

20 Reference Materials 20

21 Corporate Profile Corporate name KITO CORPORATION Founded November 1932 Head office Listing Representative Business Employees Affiliate company Capital Shares outstanding 2000, Tsuijiarai, Showa-cho, Nakakoma-gun, Yamanashi August 9, 2007 (TSE 1 st Section : Stock code:6409) Yoshio Kito, CEO Manufacture and sale of hoists, cranes, etc. Consolidated 1,552 Non-consolidated consolidated subsidiaries 3,976 million 135,241 shares (Including own shares 13,537 ) No. of shareholders :7,430 Major shareholders Shareholders No. of shares held Ownership 1 KONECRANES FINANCE CORPORATION 29, % 2 CARLYLE JAPAN PARTNERS, L. P. 23, % 3 The Master Trust Bank of Japan Trust Account 5, % 4 Yoshio Kito 3, % 5 Sumitomo Mitsui Banking 3, % 6 GOLDMAN SACHS INTERNATIONAL 2, % 7 Japan Trustee Services Bank, Ltd.(Account) 2, % 8 CREDIT SUISSE SECURITIES(USA) LLC-SPCI. FOR EXCL. BENE 2, % 9 THE CHASE MANHATTAN BANK 2, % 10 KITO owner's stockholding 2, % Each date is as of September 30,

22 Product line Product category Manual products Electric products Crane Others Manual chain hoist Standard product Specialized product Specialized product Others Standardized product for general customers needs Share of sales:73% Originally designed & manufactured products for customers various needs Share of sales:19% After-sales services, etc. Lever block Electric chain hoist Rope hoist Saddle crane components Manual chain hoist (100t) Light crane Overhead travelling crane System crane Manipulator Provision of various components, maintenances, etc. Sling products Share of sales:8% =KITO s Major Products 22

23 Product Development to Meet the Diversified Needs Offer products for a diversity of industrial fields in Japan and overseas. Deal quickly with customer s needs. Holds a dominant share in Japan (established KITO brand). Wind power generation Environmental energy related Solar power generation Transportation Mining Construction & engineering Clean room Entertainment Shipbuilding Airline industry Manufacturing Natural resources 23

24 KITO Global Network KITO Group overseas subsidiaries and sales agent network in over 50 countries JIANGYIN KITO CRANE CO., KITO EUROPE GmbH LTD. (Germany) (China) KITO KOREA CO., LTD. (Korea) SHANGHAI KITO TRADING Established in in November 2008 CO., LTD. Dusseldorf (China) Armsel MHE Pvt. Ltd. (India) Beijing Tianjin Tokyo Jiangyin Yamanashi Shanghai Bangalore Bangkok Laguna Vietnam Began operation in in January 2009 KITO CORPORATION (Japan) Domestic network Domestic sales offices: Over 600 authorized sales agents Over 100 service offices KITO PHILIPPINES, INC. SIAM KITO CO., LTD. (Philippines ) (Thailand) Overseas network Vancouver Corona Toronto Manheim KITO CANADA INC. (Canada) Domestic sales agent :about60 HARRINGTON HOISTS, INC. (U.S.A) Domestic sales agent :about90 Including 2 subsidiaries in North America, 1 in Philippines, 1 in Thailand Overseas manufacturing subsidiaries Overseas sales subsidiaries KITO and overseas subsidiaries: 12 Overseas subsidiaries branches, etc.: 3 Overseas representative office: 2 Overseas sales agent in over 50 countries 24

25 Cautions regarding these materials These materials are prepared for the purpose of providing information concerning KITO and are not intended as a solicitation to purchase securities issued by KITO. These materials are based on information as of September 30, 2010 unless indicated otherwise. All opinions, forecasts and other forward-looking statements reflect the judgments of KITO when these materials were prepared. KITO provides no guarantee that this information is accurate or complete. Furthermore, forward-looking statements are not promises concerning future performance and may be revised at any time without prior notice. 25