FREUND CORPORATION(Securities code: 6312)

Results of Operations for the Fiscal
Year Ended February 29, 2024
April 12, 2024

Copyright(C) Freund Corp. All rights reserved.

Contents⚫ Consolidated Financial Summary for FY2/24

・・・ P.02⚫ Consolidated Earnings and Dividend Forecasts for FY2/25

・・・ P.13⚫ Topics

・・・ P.16

Supplementary Materials

・・・ P.18

Copyright (C) Freund Corp. All rights reserved.

1

Consolidated Financial Summary for FY2/24

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Summary of Consolidated Statement of Income⚫ Sales increased to a record high, resulting in a big increase in sales and earnings.
⚫ Orders received and order backlog also reached record-highs.
⚫ New systems related expenses were deferred to the next fiscal year but SG&A
expenses rose due to wage increases and other factors.

⚫ Profit significantly increased despite a loss on retirement of some new systems.
(Millions of yen)

FY2/23
AmountFY2/24Composition
ratio

AmountYoY change

Composition
ratio

Amount％Net sales

19,658100.0

22,903

100.0

3,245

16.5%

Gross profit

5,993

30.5

7,043

30.8

1,050

17.5%

5,541

28.2

5,773

25.2

232

4.2%

Operation profit

451

2.3

1,270

5.5

818

181.3%

Ordinary profit

559

2.8

1,285

5.6

726

129.9%

Profit before income taxes

(406)

(2.1)

1,101

4.8

1,507

－

Profit

(538)

(2.7)

764

3.3

1,303

－

ROE

(3.8)%

－

5.3%

－

－

－

SG&A expenses

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3

Analysis of Change in Consolidated Operating Profit⚫

Operating profit significantly increased because sales increased in all segments(especially machinery business in Japan and U.S. subsidiaries) and the earnings ratio
improved at the U.S. subsidiaries.

⚫

Selling, general and administrative (SG&A) expenses rose due to higher personnel
expenses and higher sales commissions. However, the operating profit significantly
increased YoY because of a decrease in goodwill amortization and sales growth.

(Millions of yen)

Positive factors
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4

Machinery Business: Group Company Performance (Sales/Operating Profit)
Freund Corporation

Sales in Japan significantly increased due to activities for using
partner companies to deliver products quickly despite difficulty ofprocuring some parts/materials.

Freund-Turbo

Sales increased YoY and earnings remained firm.

Freund-Vector

Returned to profitability as we moved past unprofitable projects
from previous periods.

Cos.Mec

Sales up and earnings down YoY; performance was as planned.

(Millions of yen)
Before elimination for consolidation

FY2/23

YoY change

FY2/24％

13,44816,157

2,708

20.1%

Freund Corporation

5,634

6,904

1,270

22.5%

Freund-Turbo

1,600

1,761

161

10.1%

Freund-Vector

5,348

6,169

820

15.3%

Cos.Mec

1,714

1,755

41

2.4%

59

924

865

1456%

421

659

237

56.4%

Freund-Turbo

50

81

30

61.5%

Freund-Vector

(410)

86

497

－

95

80

(15)

(16.1)%Net sales

Operating profit
Freund Corporation

Cos.Mec

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5

Machinery Business: Group Company Performance (Orders Received/Order Backlog)
FreundCorporation

Orders increased YoY with the support of the substantial
investments in large-scale equipment by generic drug manufacturers
and the order backlog was a record-high 11.0 billion yen at the endof FY2/24.

Freund-Turbo

Large projects decreased. Order backlog remained flat.

Freund-Vector

Orders received was a record high and order backlog remained highas in the previous fiscal year.

Cos.Mec

Orders received and order backlog decreased on a Euro basis.

(Millions of yen)

Before elimination for consolidation

Orders received

FY2/23

FY2/24

YoY change％

14,63018,600

3,969

27.1%

Freund Corporation

8,157

9,960

1,803

22.1%

Freund-Turbo

1,517

1,201

(315)

(20.8)%

Freund-Vector

3,645

6,065

2,420

66.4%

Cos.Mec

1,310

1,469

159

12.1%

Order backlog

12,826

15,842

3,016

23.5%

7,835

11,067

3,232

41.3%

Freund-Turbo

839

607

(232)

(27.7)%

Freund-Vector

3,173

3,479

305

9.6%

977

841

(136)

(13.9)%

Freund Corporation

Cos.Mec

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6

Machinery Business: Sales by Region
Japan

The overseas sales ratio decreased due to a significant increase insales in Japan.

Overseas

A weaker yen partially contributed to strong sales in USA and Latin
America. Higher sales in Others include those in emerging markets,particularly in the Middle East and Africa.

Asia
2,193
16%
Europe833
6%
Latin
America
2,506
19%Overseas
7,603
57％

Others353
3%

FY2/23¥13,448 million

USA
1,716
13%

Japan
5,845
43%

OthersAsia 853
1,630 5%
10%
Europe1,261
8%
FY2/24¥16,157 million
Latin
America
2,867
18%
USA
2,009
Overseas
12%
8,620
53％

Japan
7,533
47%

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7

Machinery Business: Quarterly Results (Net Sales/Orders Received/Order Backlog)(Millions of yen)

(Millions of yen)

20,0008,000

Net sales (left axis)
7,000

18,000Orders received (right axis)
Order backlog (right axis)

16,0006,000

14,0005,000

12,00010,000

4,000

8,000

3,000

6,000
2,000

4,000
1,000

2,000
0

0

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
FY2/19FY2/20FY2/21

FY2/22

FY2/23

FY2/24

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8

Chemicals Business: Overview
Net sales
Sales were steady and exceeded the previous fiscal year’s record high.
Pharmaceutical excipients: Sales increased to a record high as sales of major products
remained strong.
Food preservatives: A record-high sales despite a slowdown in the growth of demand forbread preservatives

Operating profit
Operating profit increased YoY due to sales growth.

(Millions of yen)

FY2/23

FY2/24

YoY change
％

6,209

6,745

536

8.6%

Pharmaceutical Excipients

3,600

4,105

505

14.0%

Food Preservatives

2,609

2,640

31

1.2%

976

1,044

67

7.0%

Net sales

Operating profit

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9

Chemicals Business: Quarterly Results (by Product Field)
Operatingprofit margin

Net sales(Millions of yen)

Food Preservatives (left axis)
Operating profit margin (right axis)

2,000

Pharmaceutical Excipients (left axis)

20.0%

1,500

15.0%

1,000

10.0%

500

5.0%

0

0.0%

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
FY2/19FY2/20FY2/21

FY2/22

FY2/23

FY2/24

Copyright (C) Freund Corp. All rights reserved.

10Summary of Consolidated Balance Sheet⚫ Accounts receivable significantly increased due to strong sales recorded in 4Q⚫ Accounts payable and contract liabilities increased due to a high level of orderbacklog
AssetsLiabilities and Shareholders' Equity(Millions of yen)

(Millions of yen)

FY2/23

FY2/24

Change15,87018,537

2,667

Cash and depodits

3,917

4,736

819

Accounts receivable

5,535

7,058

1,522

Inventories

5,586

5,815

229

Other assets

831

926

Non‐current assets

6,888

7,252

Current assets

Total assets

22,75825,789FY2/23

FY2/24

Change

7,815

9,920

2,105

2,730

3,881

1,150

896

515

(381)

Contract Liabilities

2,913

3,932

1,019

95

Other liabilities

1,275

1,592

316

363

Non‐current liabilities

826

845

18

Total net assets

14,11715,023906

Total liabilities and net assets

22,75825,789

3,030

3,030

Current liabilities
Accounts payable
Short-term loans payable

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11Summary of Consolidated Statement of Cash Flows(Millions of yen)

Cash flows from operating activities

FY2/23

FY2/24

(196)

2,368

Profit before income taxes

(406)

1,101

Depreciation

565

539

Impairment loss

933－

Decrease (increase) in notes and accounts receivable ‐ trade(171)(1,380)

Increase (decrease) in notes and accounts payable ‐ trade

(78)

1,085

Increase (decrease) in contract liabilities

(356)

887

Income taxes paid

(412)

(267)

(666)

(739)

Purchase of property, plant and equipment

(269)

(348)

Purchase of intangible assets

(330)

(391)

451

(874)

852

(450)

(333)

(333)

Cash flows from investing activities

Cash flows from financing activities
Net increase (decrease) in short-term loans payable

Cash dividends paid
Net increase (decrease) in cash and cash
equivalen
Cash and cash equivalents at end of period

(228)

819

3,917

4,736

Free cash flow

(862)

1,628

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12

Consolidated Earnings and Dividend Forecasts for FY2/25

Copyright(C) Freund Corp. All rights reserved.

Summary of Consolidated Forecasts⚫

Forecast higher sales in Japan mainly in the machinery business⚫

Forecast higher sales and earnings due to the end of unprofitable projects in the U.S.
subsidiaries⚫

Anticipate a decline in operating profit due to rising SG&A expenses, which are attributed
to participation in overseas exhibitions, costs associated with upgrading our new systems,
wage increases, and other related expenses(Millions of yen)

FY2/24

FY2/25

ActualForecast

YoY change％

Net sales

22,90323,500596

2.6%Gross profit

7,043

7,650

606

8.6%

Operating profit

1,270

1,100

(170)

(13.4)%

Ordinary profit

1,285

1,100

(185)

(14.4)%

764

770

5

0.7%

45.46

45.76

0.30

0.7%

143.22140.00－－

ProfitEarnings per share(yen)
Yen/dollar rate

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14

Summary of Dividend Forecasts⚫

50

Our basic policy is to maintain stable dividends over the long term. However, for FY2/25,
Freund plans to pay a dividend of 25 yen per share, which includes a commemorative
dividend of 5 yen for its 60th anniversary.

87.8

Dividend payout ratio

100

61.6

45
40
35

22.4

32.4

44.0

39.9
23.3

Dividend per share

5.0

15
10

5

12.5

20.0

60

20

34.5

20

80

40

30
25

54.6

5.0
20.0

20.0

20.0

20.0

20.0

20.0

20.0

15.0

0
-20
-40
-60

-80

0

-100
FY2/16

FY2/17

FY2/18

FY2/19FY2/20FY2/21

FY2/22

FY2/23

FY2/24

FY2/25（Forecast）

Ordinary year‐end dividend (Yen)Commemorative dividend (Yen)Dividend payout ratio (%)（Note: Dividend payout ratio for FY2/23 is not available due to loss attributable to owners of parent.
Freund conducted a 2‐for‐1 common stock split on March 1, 2016. The dividends per share for FY2/16 and earlier have been adjusted
to reflect the stock split.
Commemorative dividends were paid in FY2/17 for the 20th anniversary of the exchange
listing of Freund stock.
Copyright (C) Freund Corp. All rights reserved.
15

Topics

Copyright(C) Freund Corp. All rights reserved.

Notice of Changes in Company Name of Consolidated Subsidiaries⚫ As Freund marks its 60th anniversary in April this year, Freund will rename
two overseas subsidiaries to consolidate the FREUND brand globally.
⚫ Activities will continue with the goal of strengthening the FREUND brand in
markets worldwide by further increasing collaboration and synergies amonggroup companies.

Current name

New name

Planned date ofname change

FREUND-VECTOR CORPORATION

Freund Inc.

June 3, 2024

Cos.Mec S.r.l.

Freund S.r.l.

March 29, 2024

Copyright(C) Freund Corp. All rights reserved.

17

(Supplementary Materials)• Company Overview• Segment Information

Copyright (C) Freund Corp. All rights reserved.

Company Overview●Company name

： Freund Corporation●Established： April 1964

●Representative： Iwao Fusejima, President & CEO●Location： 6‐25‐13 Nishi‐shinjuku, Shinjuku‐ku, Tokyo, Japan●Paid‐in capital： 1,035,600,000 yen (As of February 29, 2024)●Sales：22,900 million yen (Fiscal year ended February 29, 2024,
consolidated)●Number of employees ： 468 (As of February 29, 2024, consolidated)●Business： Machinery business‐ Manufacturing and sales of granulation andcoating equipment and others
Chemicals business‐ Manufacturing and sales of pharmaceutical
excipients, food preservatives, and others●Group companies： Freund‐Vector Corporation *1,
Freund‐Turbo Corporation,
Cos.Mec s.r.l.*2,
Parle Freund Machinery Private Limited,
Freund‐Chineway Pharmaceutical Technology Center Co., Ltd.
*1. The company name will be changed to Freund Inc. on June 3, 2024.
*2. The company name was changed to Freund S.r.l. on March 29, 2024.
Copyright(C) Freund Corp. All rights reserved.

19

The Freund Group and R&D Facilities
Using innovative technologies for rapid growth outside Japan

*2
*2

*1

*1
*1

*1. The company name will be changed to Freund Inc. on June 3, 2024.
*2. The company name was changed to Freund S.r.l. on March 29, 2024.
Copyright (C) Freund Corp. All rights reserved.

20

The Freund Group and R&D Facilities

Using innovative technologies
for rapid growth outside Japan
FreundCorporation
Freund-Turbo
Corporation
Yokosuka, Kanagawa*1Tokyo, Osaka, Shizuoka, Aichi*2*2

Cos.Mec s.r.l.

Freund-Vector
Corporation*1

Iowa, USA

Milan, Italy

Research and Development
Laboratory(Hamamatsu, Shizuoka)

Domestic
users

Marion Laboratory (Iowa, USA)

Sales of machineryand chemical products

Sales of machineryand chemical products

Parle Freund (India)

Milan Laboratory (Italy)

Overseasusers*1. The company name will be changed to Freund Inc. on June 3, 2024. *2. The company name was changed to Freund S.r.l. on March 29, 2024.
Copyright (C) Freund Corp. All rights reserved.
21

Our “Pen” (Machinery) and “Ink” (Chemicals) Business Model
1. Machinery Business Segment
⚫

⚫

⚫

Pen

Manufacturing and sales of granulation and coating
equipment for the pharmaceutical, food, and fine chemicalindustries.
For coating equipment, Freund is ranked first in Japan andsales growth is accelerating in Asia and in Freund-Vector’s
US and European operations. Freund is the only company
in the world that has expertise both in drug formulation
technologies and the associated machinery.
Aiming to increase sales of industrial machinery too byintegrating granulating and coating technologies withmilling and sieving technologies.

Composition of Net Sales
and Profit by Segment
Chemicals

29%

53%
2. Chemicals Business Segment
⚫
⚫

⚫

⚫

FY2/2447%

Ink

Manufacturing and sales of pharmaceutical excipients,
food preservatives, nutritional supplements, and others.
Freund uses Good Manufacturing Practice (GMP)
compliant equipment for the production ofpharmaceutical excipients.
Freund’s food preservatives contribute to ensuring thesafety of food by maintaining the quality of various
products.
Through the utilization of its granulating and coating
technologies, Freund collaborated with customers todevelop and commercialize nutritional supplements andseamless mini-capsules.

Operating profit

利益

71%

Net sales
売上高

Machinery
Consolidated sales: ¥22.90 billion
Consolidated operating
profit:¥1.27 billion
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22

Freund Group’s Business Fields⚫

FREUND Group’s business fields based upon pharmaceutical products manufacturing
processes

FREUND Group Business Fields*1*2*1. The company name will be changed to Freund Inc. on June 3, 2024. *2. The company name was changed to Freund S.r.l. on March 29, 2024.
Copyright (C) Freund Corp. All rights reserved.
23

The Freund Group Disclosure Policy
1. Basic disclosure policy
Freund positions the transparency of management as an important responsibility in order to be a company that can be atrusted member of society. To maintain this transparency, we always disclose information about the company in a mannerthat is fair and timely from the standpoint of all stakeholders.
2. Standard for disclosure
Freund discloses information in compliance with the Companies Act, Financial Instruments and Exchange Act, and otherapplicable laws and regulations. Disclosure also complies with the timely disclosure rules of securities exchanges where thecompany’s stock is traded.
In addition, Freund discloses information that is not covered by these laws and regulations and exchange rules in cases
where the information is believed to be necessary for investment decisions.
3. Disclosure methods
Freund discloses information by using the Timely Disclosure network (TDnet) of the Tokyo Stock Exchange. To ensure thetimeliness and fairness of information announced using TDnet, this information is posted promptly on Freund’s website.
In addition, press releases and other information are promptly posted on Freund’s website and made available in otherways to ensure disclosure fairness and speed. Furthermore, information in Japanese is supplied in English as much as
possible to make information available to a large number of stakeholders.
4. Prevention of insider trading
For the prevention of insider trading, Freund’s internal rules include provisions concerning basic items that must be
observed regarding the proper management of internal information, Freund stock transactions and other matters. There
are also activities for ensuring that Freund personnel understand insider trading restrictions and for overseeing stock andother transactions.
5. Silent period
To prevent leaks of information about earnings announcements, as well as to comply with laws and regulations and ensure
the fairness of these announcements, Freund has a “silent period” that begins on the day following the end of each fiscal
year quarter and ends on the day of the earnings announcement for that quarter. Freund will not reply to any questions
concerning results of operations during this period. However, in the event of the possibility that results of operations will
differ significantly from the forecast, Freund may disclose this information in accordance with timely disclosure rules.
6. Forward-looking statements
Information disclosed by Freund may contain information about the future other than sales and earnings forecasts, such as
information about strategies and business plans. This information is based on the decisions of management by using
information that was available at that time. As a result, actual performance may differ significantly from forward-looking
statements due to changes in the economy and market conditions and other reasons.
(Established on March 27, 2017)24

Investor Relations Policy
Policy concerning constructive dialogues with shareholders and other investors
Freund has a strong commitment to conducting constructive dialogues with shareholders and other investors in order
to contribute to the company’s sustained growth and mid- to long-term growth in corporate value. By providing clear
explanations of management policies, business operations and the corporate culture, Freund aims to earn theunderstanding of shareholders and other investors in order to continue to receive their support as “Freund fans.”
1. Investor relations framework – The Corporate Planning Division responsible for investor relations oversees
dialogues with shareholders and other investors under the direct supervision of Executive Officer and a General
Manager of Corporate Administration Division.
To support these dialogues, Freund departments involved with dialogues cooperate, such as by preparing andchecking disclosure materials and, as needed, sharing information, so that information is disclosed with fairness
and speed.
2. Stakeholder dialogues – Freund holds information meetings about results of operations and other subjects
following the end of the second quarter and fiscal year. Small meetings are held after the first and third quarters.
Information provided at these meetings is posted on Freund’s website. When a medium or long-term management
plan is established, the company provides a clear explanation of strategic goals and business plans. In addition,
Freund frequently visits institutional investors to explain its goals and performance. Freund also participates ininvestor forums held by securities companies, holds information meetings for individual investors, and conducts
other activities for stakeholder dialogues.
The FREUND Integrated Report and other IR documents are distributed to shareholders and posted on Freund’s
website. This publication contains business and financial information as well as about the company’s strengths that
do not appear in the financial statements. By providing more information about the Freund Group, this publication
aims to help the public understand the true corporate value of the group.
3. Feedback of shareholder/investor opinions – Opinions and other statements by shareholders and otherinvestors at dialogues are passed on to the president, directors and others and the information is shared as needed.
4. Management of insider information – There are no shareholder/investor dialogues during each silent period,
which begins on the day following the end of each fiscal year quarter and ends on the day of the earnings
announcement for that quarter. Freund handles insider information strictly in compliance with internal rules
concerning the management of internal information and restrictions on transactions by Freund personnel.

25Inquiries:

Freund Corporation
Corporate Administration Division
Finance & Accounting Department
Email: ir@freund.co.jp

IR website: https: //www.freund.co.jp
This presentation contains forward-looking statements involving plans, outlooks, strategies andpolicies. These statements reflect the judgments of management and assumptions based on
information available at the time of this presentation. Actual results of operations may differ
from these statements for a number of reasons. Consequently, forecasts and other forwardlooking statements are not guarantees about future performance. Although Freund has checked
this presentation carefully, there is still a possibility of errors in this information.

Copyright (C) Freund Corp. All rights reserved.

26