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Operating Results and Forecast

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Consolidated Operating Results for the Fiscal Year Ended March 31, 2018

(1) Overview


In the fiscal year ended March 31, 2018, the Japanese economy continued to gradually improve due mainly to an upturn in corporate earnings and employment as well as recovery in consumer spending. Overseas, the U.S. economy showed steady recovery, while the European and Asian economies saw modest but constant improvement.

Under these circumstances, the Ryobi Group has been promoting proactive marketing and the development of new products to meet user needs while taking various measures to reduce costs, improve productivity and streamline business operations.

As a result, the Company's performance over the period included increases in net sales and operating income compared with the previous fiscal year. However, profit attributable to owners of the parent decreased year on year, reflecting such factors as an increase in tax expenses associated with the Ryobi Group's U.S.-based subsidiary.


Consolidated Earnings
Fiscal year ended
March 31, 2017
Fiscal year ended
March 31, 2018
Change
Millions of
yen
% of
net sales
Millions of
yen
% of
net sales
Millions of
yen
%
Net sales 241,251 247,192 5,940 2.5%
Operating income 12,624 5.2% 13,212 5.3% 588 4.7%
Profit attributable to
owners of parent
8,348 3.5% 7,844 3.2% -503 -6.0%


(2) Performance by Industry Segment


The Die Castings Business recorded increases in both revenues and earnings compared with the previous fiscal year. Although revenues grew both in Japan and overseas, sales growth in China and Thailand served as the primary contributor to the overall increase in segment sales. Segment profit also grew due to increases in earnings from Ryobi's Chinese and Thai operations.

The Power Tools and Builders' Hardware Business recorded decreases in both revenues and earnings compared with the previous fiscal year. Despite continued growth in revenues throughout the course of the first nine months, segment sales for the 12 months ended March 31, 2018 were down year on year due to the impact of the transfer of Ryobi's power tools business to Kyocera Corporation dated January 10, 2018. Segment profit was also down, albeit an insignificant amount, as the aforementioned transfer of the power tools business slightly impacted earnings.

The Printing Equipment Business saw decreases in revenues and earnings compared with the previous fiscal year. Segment revenues declined due mainly to decreases in exports for Europe and Asia. Segment profit fell due to a decrease in the number of products sold for export.


Net Sales by Industry Segment
Fiscal year ended
March 31, 2017
Fiscal year ended
March 31, 2018
Change
Millions of
yen
% of
consolidated
net sales
Millions of
yen
% of
consolidated
net sales
Millions of
yen
%
Die Castings 186,377 77.3% 196,377 79.4% 10,000 5.4%
Power Tools and
Builders' Hardware
26,174 10.8% 23,113 9.4% -3,061 -11.7%
Printing Equipment 28,459 11.8% 27,473 11.1% -985 -3.5%

Operating Income by Industry Segment
Fiscal year ended
March 31, 2017
Fiscal year ended
March 31, 2018
Change
Millions of
yen
% of
segment
net sales
Millions of
yen
% of
segment
net sales
Millions of
yen
%
Die Castings 9,761 5.2% 10,561 5.4% 799 8.2%
Power Tools and
Builders' Hardware
1,481 5.7% 1,466 6.3% -14 -1.0%
Printing Equipment 1,360 4.8% 1,177 4.3% -182 -13.4%

Consolidated Financial Statements for the Fiscal Year Ended March 31, 2018 < PDF 70KB >



Forecasts for the Transitional Fiscal Period Ending December 31, 2018

(As of May 14, 2018)

(1) Consolidated Performance Forecasts


Ryobi Limited intends to change its fiscal year-end for the Company and its domestic Group subsidiaries from March 31 to December 31 based on the premise that its Board of Directors' proposal with regard to the partial amendment of Ryobi's Articles of Incorporation to that effect will be approved at the upcoming 106th Annual General Meeting of Shareholders scheduled for June 2018. Reflecting the change in fiscal year-end, Ryobi' latest operating results forecasts extend only to the transitional fiscal period ending December 31, 2018.

In addition, Ryobi's plans call for changing the depreciation method used by the Company and its domestic Group subsidiaries in connection with their property, plant and equipment (including machinery, equipment, tools, furniture, fixtures and metal dies) from the declining-balance method to the straight-line method. With an eye to better adapting to the advancing globalization of the Die Castings Business, this change will be applied to operating results for the transitional fiscal period ending December 31, 2018. Having estimated the impact of this change, the Company believes that the adoption of the straight-line method will lead to an approximately ¥2 billion decrease in depreciation of property, plant and equipment for the fiscal period compared with amounts calculated using the previous method.

Going forward, the Japanese economy is expected to enjoy modest but continued recovery thanks to such factors as robust corporate earnings, improving employment and higher wages along with the positive effects of a variety of government-led economic policies. Overseas, the U.S. economy is likely to stay on a stable recovery track. The European and Asian economies are also expected to show gradual recovery.

Taking these factors into account, Ryobi has made operating results forecasts for the period ending December 31, 2018. In a straight-on comparison with the operating results for the fiscal year ended March 31, 2018, net sales and operating income are expected to be lower because of the absence of three months of results for the Company and its domestic Group subsidiaries due to the change in fiscal year-end. However, a comparison with adjusted results for the fiscal year ended March 31, 2018 (calculated by deducting the operating results for the commensurate three-month period of January through March 2018), reveals that both revenues and earnings are expected to increase.

For the transitional fiscal period ending December 31, 2018, the Company has set the assumed exchange rates of the Japanese yen against U.S. dollar, GBP, Chinese yuan and Thai baht, at ¥105, ¥150, ¥16.5 and ¥3.4, respectively.

A performance forecast for the power tools business is not included in Ryobi's operating results forecasts, as these operations were transferred to Kyocera Corporation on January 10, 2018.


Consolidated Performance Forecasts
Fiscal year ended
March 31, 2018
Transitional fiscal period ending
December 31, 2018 (forecast)
Millions of
yen
% of
net sales
Millions of
yen
% of
net sales
Net sales 247,192 215,000
Operating income 13,212 5.3% 12,700 5.9%
Profit attributable
to owners of parent
7,844 3.2% 9,800 4.6%

Note: Year-on-year changes are not presented due to differences between the fiscal year ended March 31, 2018 and the period ending December 31, 2018 in terms of timeframe subject to calculation.


Reference
Forecasts of year-on-year changes in performance are based on adjusted results for the fiscal year ended March 31, 2018 (calculated by deducting the operating results for the commensurate three-month period of January through March 2018).


Consolidated Performance Forecasts
Fiscal year ended
March 31, 2018 (adjusted)
Transitional fiscal period
ending December 31, 2018
(forecast)
Change
Millions of
yen
% of
net sales
Millions of
yen
% of
net sales
Millions of
yen
%
Net sales 210,893 215,000 4,106 1.9%
Operating income 11,758 5.6% 12,700 5.9% 941 8.0%
Profit attributable
to owners of parent
7,784 3.7% 9,800 4.6% 2,015 25.9%

(2) Performance Forecasts by Industry Segment


Looking at operating results forecasts by segment, Ryobi made the following forecasts based on the premise that operating results for the fiscal year ended March 31, 2018 have been adjusted using the method described in (1) above to provide more accurate year-on-year comparisons between operating results for said fiscal year and performance forecasts for the transitional period ending December 31, 2018.

In the Die Castings Business, the Company expects growth in revenues in Japan and overseas. In particular, sales are expected to increase in the United States, Europe, China and Thailand. Segment earnings are also likely to grow in Japan and overseas, reflecting the expected increase in revenues.

In the Power Tools and Builder's Hardware Business, the Company forecasts that revenues will decrease due to the transfer of the power tools business. The Company also anticipates a decline in earnings that reflects both the impact of the transfer of the power tools business and a rise in distribution costs associated with the builders' hardware business.

In the Printing Equipment Business, the Company expects an increase in revenues and a decrease in earnings. Buoyed by rising sales in China and other Asian countries as well as Europe, segment sales are expected to grow. On the earnings front, however, the Company anticipates a decrease in segment profit as it expects the appreciation of the yen and a rise in expenses for exhibition and other activities, despite sales growth being expected to contribute to profit.


Net Sales Forecasts by Industry Segment
Fiscal year ended
March 31, 2018
(adjusted)
Transitional fiscal period
ending December 31, 2018
(forecast)
Change
Millions of
yen
% of
consolidated
net sales
Millions of
yen
% of
consolidated
net sales
Millions of
yen
%
Die Castings 171,416 81.3% 187,000 87.0% 15,583 9.1%
Power Tools and
Builders' Hardware
20,580 9.8% 8,000 3.7% -12,580 -61.1%
Printing Equipment 18,695 8.9% 20,000 9.3% 1,304 7.0%

Operating Income Forecasts by Industry Segment
Fiscal year ended
March 31, 2018
(adjusted)
Transitional fiscal period
ending December 31, 2018
(forecast)
Change
Millions of
yen
% of
consolidated
net sales
Millions of
yen
% of
consolidated
net sales
Millions of
yen
%
Die Castings 9,578 5.6% 12,000 6.4% 2,421 25.3%
Power Tools and
Builders' Hardware
1,396 6.8% 300 3.8% -1,096 -78.5%
Printing Equipment 749 4.0% 400 2.0% -349 -46.6%


Operating Results for Fiscal 2017