TADANO : Consolidated Financial Results (Comprehensive) For Second Quarter of FY 2018

Consolidated Financial Results (Comprehensive) For Second Quarter of FY 2018

(April 1, 2018 through September 30, 2018)

Notes:

• 1) Tadano Ltd. provides this comprehensive financial results report in order to supplement the previously released quantitative report with qualitative information concerning business results for the period under review. Unless otherwise stated, no amendments have been made to the quantitative information herein.

• 2) Forward-looking statements contained in this report are based on information available as of the date this report was prepared. A variety of factors may cause actual results to differfrom projections.

November 7, 2018

¥13,021 million

[Stock shares]

Shares issued: 129 million

Number of shareholders: 8,524 (as of September 30, 2018)

¥173,703 million (FY 2017)

Consolidated: 3,384; non-consolidated: 1,439 (as of September 30, 2018)

[Subsidiaries]

11 subsidiaries in Japan:

18 subsidiaries and 2 affiliates outside Japan:

Tadano IMES Ltd.

Tadano ILEC Ltd. Tadano S-TEC Ltd. Tadano Engineering Ltd. Tadano Techno East Co., Ltd. Tadano Techno West Co., Ltd. Tadano Kyoshu Center Ltd. Tadano Butsuryu Ltd. Tadano Systems Inc.

Tadano Faun GmbH, Tadano Faun Stahlbau GmbH [Germany] Tadano UK Ltd [U.K.]

Tadano France SAS [France] Tadano Nederland B.V.[Netherlands] Tadano Belgium B.V.B.A.[Belgium]

Tadano America Holdings, Inc., Tadano America Corporation, Tadano Mantis Corporation [U.S.A.]

Tadano Chile SpA [Chile]

Tadano Business Support Ltd. Toda Kiko Shokai Ltd.

Tadano Brasil Equipamentos de Elevacao Ltda. [Brazil] Tadano (Beijing) Ltd. [China]

Tadano Korea Co., Ltd. [South Korea]

Tadano (Thailand) Co., Ltd., Tadano Italthai Co., Ltd. [Thailand] Tadano Asia Pte. Ltd. [Singapore]

Tadano India Pvt. Ltd. [India] Tadano Oceania Pty Ltd

BQ-Tadano (Beijing) Crane Co., Ltd. [China] Taiwan Tadano Ltd [Taiwan]

[Corporate name]	Tadano Ltd. (established August 24, 1948); founder: Masuo Tadano
Developed Japan's first hydraulic Truck Crane in 1955
[Representative]	Koichi Tadano, President and C.E.O., Representative Director
[Head office]	Ko-34 Shinden-cho, Takamatsu, Kagawa, Japan
[Major lines of business]	Production and distribution of Mobile Cranes, Truck Loader Cranes, and Aerial Work Platforms
[Sites]	Tokyo Office [Sumida-ku], Takamatsu Plant [Takamatsu], Shido Plant [Sanuki],
Tadotsu Plant [Tadotsu], Chiba Plant [Chiba]
[Other facilities]	Japan: 10 branch offices, 23 sales offices;
Outside Japan: Beijing Office [China], Middle East Office [UAE], Moscow Office [Russia]
[Paid-in capital]
[Net sales]
[Number of employees]

[FY2018 Management Policy]

(i) Pursue the Tadano Group's Core Values (Safety,

(Unit: millions of yen)

Quality, Efficiency)

• (ii) Engage in second-year activities of the Mid-Term Management Plan (17-19)

• (iii) Focus on the Tadano Red Arrow, and engaging in Tadano Yellow Arrow activities

• (iv) Prepare for and respond to Tadano Blue Arrow changes and escalating competition

• ◆ Second quarter revenues and profits declined for the third consecutive year

• ◆ Sales inside Japan decreased, and sales outside Japan increased

  ⇒Net sales in Japan: ¥47.8 billion  ¥44.4 billion (-7.3%)

  Sales of Mobile Crane remained unchanged, sales of Truck Loader Cranes and Aerial Work Platforms decreased.

  ⇒Net sales outside Japan: ¥34.9 billion  ¥37.8 billion

  * Figures for capital investments include leased assets.

  (+8.2%)

  * The exchange rates given above are average rates for the period from January to June.

  (Subsidiaries outside Japan undertake their settlement of accounts in June.)

  Sales in the Middle East decreased, sales in the Europe and North America increased.

⇒ Capital investment of the first half of FY2018 includes5,035 millon related to the new plant construction.

◆ Outside Japan sales ratio : 42.2%  46.0%

◆ Income decreased. Operating income ratio: 10.3%  7.0%

FY2017 First Half		FY2018 First Half		Percent change
Amount	Percentage	Amount	Percentage
Net sales	82,880	100.0%	82,272	100.0%	-0.7%
Operating income	8,548	10.3%	5,743	7.0%	-32.8%
Ordinary income	8,386	10.1%	5,673	6.9%	-32.4%
Net income attributable to Owners of the parent	5,969	7.2%	4,081	5.0%	-31.6%

FY2017 First Half	FY2018 First Half
Capital investment	¥1,220 million	¥6,595 million
Depreciation	¥1,360 million	¥1,432 million
Exchange rate (USD)	¥112.37	¥108.68
Exchange rate (EUR)	¥121.64	¥131.64

Operating income:	¥8.5 billion  ¥5.7 billion
Ordinary income:	¥8.3 billion  ¥5.6 billion
Net income:	¥5.9 billion  ¥4.0 billion

FY 2017 First Half		FY 2018 First Half		Increase/ Decrease
Amount	Percentage	Amount	Percentage
Net sales	82,880	100.0%	82,272	100.0%	-607
Cost of sales	59,120	71.3%	60,382	73.4%	1,261
Gross profit on installment sales	27	0.0%	121	0.1%	93
Gross profit	23,786	28.7%	22,011	26.8%	-1,775
Selling, general, and administrative expenses	15,238	18.4%	16,267	19.8%	1,029
Operating income	8,548	10.3%	5,743	7.0%	-2,804
Non-operating income and loss	-161	-0.2%	-70	-0.1%	91
Ordinary income	8,386	10.1%	5,673	6.9%	-2,713
Extraordinary income and loss	4	0.0%	-3	-0.0%	-8
Income before income taxes	8,391	10.1%	5,669	6.9%	-2,721
Corporate taxes	2,400	2.9%	1,569	1.9%	-831
Net income attributable to noncontrolling interests	21	0.0%	19	0.0%	-1
Net income attributable to owners of the parent	5,969	7.2%	4,081	5.0%	-1,888

◆ COGS ratio: 71.3%  73.4%

•  Despite the efforts to maintain appropriate sales prices and cost reductions, the COGS ratio went up by 2.1% from the same period of the previous fiscal year, because of COGS increasing and changes in the composition of sold cranes.

◆ Selling, general, and administrative expenses: ¥1,029 million increase

 Variable costs:	+	¥127 million
 Personnel costs:	+	¥432 million
 Other expenses:	+	¥469 million

• ◆ Non-operating income and loss:

  •  Non-operating income: ¥192 million  ¥178 million

  •  Non-operating loss: ¥354 million  ¥249 million

• ◆ Extraordinary income and loss:

  •  Extraordinary income: ¥33 million  ¥6 million

  •  Extraordinary loss: ¥29 million  ¥9 million

FY 2017 Year-End		FY 2018 First Half		Increase/ Decrease
Amount	Percentage	Amount	Percentage
Cash deposits	86,854	35.4%	78,680	31.5%	-8,173
Accounts receivable	45,501	18.6%	39,215	15.7%	-6,286
Inventories	54,552	22.2%	62,480	25.0%	7,928
Other current assets	1,779	0.7%	3,700	1.5%	1,920
Total current assets	188,687	76.9%	184,076	73.7%	-4,611
Tangible fixed assets	41,747	17.0%	46,499	18.6%	4,752
Intangible fixed assets	1,187	0.5%	1,499	0.6%	312
Investment and other assets	13,879	5.6%	17,698	7.1%	3,819
Total fixed assets	56,814	23.1%	65,697	26.3%	8,883
Total assets	245,501	100.0%	249,774	100.0%	4,272

Accounts payable	36,727	15.0%	38,663	15.5%	1,936
Interest-bearing debt	33,750	13.7%	35,842	14.4%	2,091
Other liabilities	24,978	10.2%	24,289	9.7%	-689
Total liabilities	95,457	38.9%	98,795	39.6%	3,337
Total equity	150,044	61.1%	150,979	60.4%	934
Total liabilities and equity	245,501	100.0%	249,774	100.0%	4,272

◆ Accounts receivable decreased: ¥45.5 billion → ¥39.2 billion ⇒ The receivable turnover period ameliorated.

(FY2017 First Half: 96.0days, FY2017: 95.6days)

→ FY2018 First Half: 87.2days

◆ Inventories increased: ¥54.5 billion → ¥62.4 billion

(¥62.4 billion total includes ¥19.8 billion at TFG.) ⇒ The inventory turnover period deteriorated.

(FY2017 First Half: 128.4days, FY2017: 114.6days)

→ FY2018 First Half: 139.0days

◆ Interest-bearing debt increased: ¥33.7 billion → ¥35.8 billion ⇒ Short-term: increased by ¥2.9 billion

Long-term: decreased by ¥0.8 billion

A reclassification has been made for the Balance

Sheet, in accordance with Partial Amendments to

the Japanese Accounting Standard for Tax Effect

Accounting.

Net Sales by Product

Mobile Cranes

(Unit: millions of yen)

Truck Loader Cranes

Aerial Work Platforms

(Millions of yen)

Other

100,000

82,880

82,272

80,000 15,008

60,000

12,117 10,074

40,000

45,679

20,000

0

9,208 9,605

14,943

FY 2017 First Half		FY 2018 First Half		Increase / Decrease
Amount	Percentage	Amount	Percentage	Amount	Percentage
Mobile Cranes	45,679	55.2%	48,515	59.0%	2,836	6.2%
Truck Loader Cranes	10,074	12.2%	9,605	11.7%	-469	-4.7%
Aerial Work Platforms	12,117	14.5%	9,208	11.2%	-2,909	-24.0%
Other	15,008	18.1%	14,943	18.1%	-65	-0.4%
Total	82,880	100%	82,272	100%	-607	-0.7%

◆Outside Japan sales ratio:

42.2% → 46.0%

48,515

Breakdown of Mobile Crane sales Inside and Outside Japan

Japan	18,160	17,915	-244	-1.3%
Outside Japan	27,519	30,600	3,080	11.2%

FY 2017 First Half FY 2018 First Half

9

7

(Millions of yen)

120,000

Sales grew 8.2% compared to the same quarter of the previous fiscal year. Sales grew 23.8% in Europe, 20.7% in North America and 8.6% in Asia, but fell 58.1% in Middle East.

100,000

80,000

60,000

40,000

20,000

0

Europe

North America

11,435 2,671

9,754 2,739

10,893 2,755

11,978 3,402

12,000 4,547

Caribbean, Central and

948

586

287

457

866

South America

Asia

Middle East

4,225 2,142

Other

956

Total

Outside Japan Sales Ratio Exchange rate (USD)

22,379 23.8%

4,368 3,098 1,524 22,072 25.0%

5,362 3,602 2,066 24,968 30.1%

5,185 5,663 3,696 30,384 31.4%

4,888 7,347 4,634 34,285 33.7%

16,292 9,798 1,721 4,749 8,507 5,790 46,859 38.8%

19,170 12,324 2,420 7,861 11,708 7,409 60,894 42.1%

25,566 18,342 2,542 12,069 13,878 9,158 81,557 46.8%

29,630 20,145 2,722 10,954 15,836 10,063 89,354 54.9%

19,196 15,301

9,680 5,948 5,177 56,191 53.9%

107.83 121.54 125.35 115.99 108.24 110.21 116.38 117.84 103.46

582 6,183 2,556 4,041 37,864 46.0% 93.57 87.81 79.84 79.82 97.65 105.85 121.05 108.84 112.19 112.37 108.68

887

12,739 6,616 1,691 6,603 6,686 3,939 38,277 42.6%

11,643 13,938 3,012 9,190 7,432 7,654 52,872 46.3%

12,510 20,406 2,201 10,982 10,090 9,970 66,160 49.1%

16,844 27,782 2,449 16,923 18,167 13,320 95,487 52.5%

20,211 36,836 3,475 16,383 17,052 9,576

22,844 39,127

826

17,083 17,680 6,881

20,701 25,438 1,513 13,694 10,375 5,683

16,849 29,428 1,014 12,089 9,699 7,069

7,694 12,404

9,528 14,973

445

5,694 6,095 2,650

103,535104,444

77,406

76,152

34,984

50.7%

49.9%

43.1%

43.8%

42.2%

Exchange rate (EUR)

99.63 130.2 116.39 111.12 102.63 129.68 140.42 134.31 120.33 126.67 121.64 131.64

108.8 118.41 131.03 134.47 136.92 146.14 161.24 152.44

Notes • Other markets comprise Oceania, Africa, and the CIS.

• • The exchange rates indicated above are average rates over each period. (Since the fiscal year of subsidiaries outside Japan ends in December, full-year rates are averages for January-December; interim rates are averages for January-June.)

• • Euro figures for FY 2001 and earlier have been converted from Deutsche Mark.

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