Financial Results for the First Quarter
Fiscal Year Ending December 31, 2021

Investor Relations Presentation Materials

ISEKI & CO., LTD.
May 13, 2021
President Shirou Tomiyasu

Index
1. Outline of Financial Results for the First Quarter
Fiscal Year Ending December, 2021
2. Domestic and Overseas Markets
3. Performance Forecast for the Fiscal Year Ending
December 31, 2021
4. Topics
Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

2

1. Outline of Financial Results
for the First Quarter Fiscal
Year Ending December,
2021

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

Key Points on Financial Results for the First Quarter＜First Quarter Financial Results＞
A Great Start to the First Year of the Mid-termManagement Plan
・In a typical year, the first quarter, the off-demand season, has deficit in Operating
income and others
・YoY increases to both sales and profit in current period(Results Breakdown)
Domestic:
Overseas:

Earnings:

 Recovery from the reactionary decline after the consumption tax hike
 Support from government subsidies to agricultural business continuity
 Increased sales in North America and Europe Impact from last year’s accounting period unification of consolidated
subsidiaries in France* Gross profit buoyed by increased sales＜Full-year Forecast＞

1Q Net Sales(JPY bn)

36.6

36.8

40.4
33.3

31.9
Domestic

22.2%

22.9%

23.8%

21.6%

1Q Operating Income(0.2)

・ Uncertainties remain with the Novel Coronavirus (COVID-19) containment situationand demand trends in and outside of Japan
Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

Overseas

FY2017/12 FY2018/12 FY2019/12 FY2020/12 FY2021/12
1Q
1Q
1Q
1Q
1Q

(JPY bn)*Impact of unifying accounting period of
consolidated subsidiaries in France
・ Sept. accounting period unified to Dec.
・ Consolidated 1Q of previous year of Oct.-Dec.
(off-demand season), consolidated current
quarter of Jan.-Mar. (demand season)

Consolidated Results Forecast Unchanged from Initial Estimates

30.2%

1.4

(0.5)

(0.7)
(1.1)

FY2017/12 FY2018/12 FY2019/12 FY2020/12 FY2021/12
1Q
1Q
1Q
1Q
1Q

4

Business Environment

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

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Outline of Consolidated Business Performance(January 1, 2021 to March 31, 2021)(JPY bn, %)FY2019/12

FY2020/12

FY2021/12

1Q Actual%

1Q Actual%

1Q Actual%

YoY
ChangeNet Sales

33.3

100.0

31.9

100.0

40.4

100.0

8.5

(Domestic)

25.3

76.2

25.0

78.4

28.2

69.8

3.2

(Overseas)

7.9

23.8

6.8

21.6

12.2

30.2

5.3

Operating Income

(0.7)

(2.2)

(1.1)

(3.5)

1.4

3.7

2.5

Ordinary Income

(1.1)

(3.3)

(1.2)

(4.0)

2.1

5.3

3.4

Profit (Loss) Attributableto Owners of Parent

(0.4)

(1.4)

(0.4)

(1.5)

1.9

4.8

2.3

Average
Exchange
Rate (JPY)

US$

110.5

109.6

104.4

(5.2)

Euro

126.3

120.8

126.8

6.0

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

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Domestic Sales
YoY¥3.2 billion(JPY bn)

Agricultural machinery and farming implements recovered from the reactionary decline following the consumption tax hike,and increased sales with demand underpinned by government subsidies for agricultural business continuity. Construction offacilities’ sales declined on completion of large-scale projects in the previous year, although domestic sales increased overall.
FY2019/12

FY2020/12

FY2021/12

1Q Actual

1Q Actual

1Q ActualYoY Change

5.7

6.6

0.8

Tractors: 0.6

Planting Machinery

2.2

1.7

2.5

0.8

Rice
Transplanters: 0.5

Harvesting &Processing
Machinery

2.7

2.0

2.4

0.3

CombineHarvesters: 0.3

Subtotal

11.7

9.5

11.6

2.0

Farming Implements

4.8

4.1

5.9

1.8

Spare Parts

2.7

2.9

3.0

0.1

Repair Fees

1.0

1.1

1.1

0.0

8.6

8.2

10.2

1.9

20.4

17.8

21.8

4.0

Construction of Facilities

0.5

2.6

1.4

(1.2)

Others

4.4

4.6

5.0

0.4

25.3

25.0

28.2

3.2

Agricultural Machinery

6.7

Agricultural Machinery Related

Cultivating &Mowing Machinery

Subtotal
Total

Total

Main factors of YoY changes

Notes

✔

Sales of agricultural machinery and farming implements rose,
having recovered from the post-consumption tax hike slump
and underpinned by demand owing to government subsidies
for agricultural business continuity.

✔

YoY easing of the impact of exhibition cancellations andshrinking scale on account of COVID-19✔

Spare parts sales and repair fee revenues remained strong✔

Construction of facilities sales declined due to the completionof a large-scale facility in the same period of the previous
fiscal year✔

Overall domestic sales increased substantially compared to
the year before lastFinancial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

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Overseas Sales
YoY¥5.3 billion(JPY bn)

Net sales in North America and Europe increased on higher sales, as well as the impact of unifying the accounting period of
the consolidated subsidiaries in France*.
In Asia, sales in South Korea and Taiwan declined, and Thailand experienced increased sales owing to making a distributor aconsolidated subsidiary
FY2019/12

FY2020/12

FY2021/12

1Q Actual

1Q Actual

1Q ActualYoY Change

North America

2.8

2.3

3.9

1.5

Tractors: 1.5

Europe

2.9

2.4

5.9

3.4

Tractors: 0.5
Lawn mowers: 2.1

Asia

2.0

2.0

2.2

0.2

Tractors: 0.2

OthersTotal Sales

0.0

7.9

0.0

6.8

0.0

12.2

Main factors of YoY changes

Notes

0.0

5.3

✔

North
America:

Sales increased against the backdrop of afavorable compact tractor market
Shortage of containers for marinetransportation led to unfulfilled shipments
and other backorder generation✔

Europe:In addition to the impact of unifying
accounting period of consolidated
subsidiaries in France in the previous fiscal
year*, sales increased owing to sales tostay-at-home consumers

✔

Asia:

Sales declined in South Korea and Taiwan,
while in Thailand, sales increased due tomaking a distributor into a consolidated
subsidiary at the end of the previous year

*Impact of unifying accounting period of consolidated subsidiaries in France
・ Sept. accounting period unified to Dec.
・ Consolidated 1Q of previous year of Oct.-Dec. (off-demand season), consolidated current
quarter of Jan.-Mar. (demand season)

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

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Operating Income
YoY¥2.5 billion

In addition to increased gross profit buoyed by higher sales, operating income
increased owing to special factors, including the absence of a loss on valuation ofparts inventory recorded in the previous fiscal year.
[Breakdown on YoY Change]
FY2019/12

FY2020/12

1.6

FY2021/12(JPY bn, %)0.1

YoY Change
1Q Actual

1Q Actual

1Q Actual

33.3

31.9

40.4

8.5

Gross Profit

9.6

9.0

11.7

2.7

Gross Profit
Margin

28.9%

28.2%

29.1%

0.9%

SG&A Expenses

10.3

10.1

10.3

0.1

Net Sales

0.8

1.4

Personnel
Expenses

6.1

6.0

6.0

0.0

Other Expenses

4.2

4.0

4.2

0.1

Operating Income

(0.7)

(1.1)

1.4

2.5

(1.1)
FY2020/12
1Q

Increased grossprofit due tohigher revenue

Special factors*

Decreased
SG&A expenses,
etc.

FY2021/12
1Q*Special Factors
・Increased revenue on unifying accounting period of consolidated subsidiaries in France
・Absence of loss on valuation of parts inventory included in the previous fiscal year
・Decline in depreciation in line with posting an impairment loss in the previous
fiscal year

0.4
0.3
0.1

[Effect of FOREX Fluctuations (JPY bn)]
Net Sales

Cost of Sales

SG&A
Expenses

Operating
Income0.18(0.04)(0.13)

0.01

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

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Ordinary Income and Profit
Ordinary Income
YoY¥3.4 billion

In addition to a favorable shift in foreign exchange gain (loss), increased profit on oneoff posting of non-operating income
FY2019/12

FY2020/12

FY2021/12

1Q Actual

1Q Actual

1Q Actual

Operating Income

(0.7)

(1.1)

1.4

2.5

Foreign exchange gain (loss)¥0.3 billion

Balance of Financial
Income

(0.1)

(0.1)

(0.1)

(0.0)

Settlement received¥0.4 billion

Other Non-Operating
Income

(0.1)

0.0

0.8

0.8

Ordinary Income

(1.1)

(1.2)

2.1

3.4

Extraordinary Income

0.0

0.1

0.0

(0.1)

(JPY bn)

Extraordinary Losses

0.0

0.0

0.0

(0.0)

(JPY bn)

YoY Change

Income Before Income Taxes

(1.1)

(1.1)

2.0

3.2

Income Taxes - Deferred

0.7

0.7

(0.1)

(0.8)

Profit (Loss) Attributable to
Owners of Parent

(0.4)

(0.4)

1.9

2.3

Non-operating Income (YoY Change)(Reference) Related to Equity Method
FY2020/12
1Q Actual

FY2021/12
1Q Actual

Share of profit (loss) of entities
accounted for using the equity
method (non-operating)(0.07)

0.01

0.08

Gain (loss) on change in equity(extraordinary)

0.12

-

(0.12)

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

Change10Balance Sheet (Consolidated)
YoY Change:

Inventories, interest-bearing liabilities continue to contract
As of Mar.
31, 2020

As of Mar.
31, 2021

YoY
ChangeAs of Mar.
31, 2020

As of Mar.
31, 2021

YoY
ChangeCash & Deposits

5.9

9.0

3.0

Accounts Payable - Trade

38.3

40.1

1.7

Accounts Receivable - Trade

25.6

28.9

3.3

Interest-bearing Liabilities

79.8

71.2

(8.5)

Inventories

59.4

53.4

(5.9)

(Loans Payable)(71.6)

63.2

(8.3)

(Merchandise & Finished Goods)(51.4)(45.8)(5.6)

Other Liabilities

19.7

17.6

(2.0)

Other Current Assets

4.0

4.5

0.5

(Deferred Tax Liabilities for Land
Revaluation)

(5.7)

（4.0）

(1.6)

Total Current Assets

95.0

96.1

1.0

Total Liabilities

137.9

129.0

(8.8)

Property, Plant and Equipment

97.9

85.8

(12.1)(Land)(50.8)(44.6)(6.2)

Net Assets

67.2

64.8

(2.3)

(Machinery, Vehicles, Leasing)(17.0)(12.7)(4.2)

Intangible Assets

1.3

2.0

0.6

(Retained Earnings)(15.8)(16.4)

0.5

Investments and other Assets

10.7

9.8

(0.8)

(Valuation Difference on Available-for-Sale
Securities)

(0.3)

(0.3)

0.6

Total Non-current Assets

110.0

97.8

(12.2)(Revaluation Reserve for Land)(12.6)

(8.8)

(3.7)

Total Assets

205.1

193.9

(11.2)

Total Liabilities and Net Assets

205.2

193.9

(11.2)(JPY bn)

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

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2. Domestic and Overseas Markets

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

Domestic Agricultural Machinery Market Trends
Domestic
Agricultural
Machinery
DemandIn 2020, industry-wide stagnation existed due to the reactionary decline in demand after the consumption
tax rate increase and the impact of COVID-19. Currently, recovery in demand is delayed due to theprolonged impact of COVID-19, despite the present situation of demand underpinned by government
subsidies for agricultural business continuity.

■ Agricultural machinery demand (shipments in the industry)
Oct. 2019(9 principal machinery, moving annual total)
Consumption tax
increase(JPY bn)

280.0
260.0
240.0
220.0
200.0

Mar.

Jun.

Sep.

2017

Dec.

Mar.

Jun.

Sep.

2018

Dec.

Mar.

Jun.

Sep.

Dec.

Mar.

2019

Jun.

Sep.

2020

Dec.

Mar.
2021

*9 principal machinery: Tractors, combine harvesters, rice transplanters, tillers, drying machines, rice huskers, binders, harvesters, treatment
Source: Estimated by ISEKI from statistics provided by the Japan Agricultural Machinery Manufacturers Association
Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

13

Domestic Agricultural Machinery Shipments and ISEKI’s
Sales Performance
ISEKI’s Sales
Performance

・In January to March, ISEKI’s sales performance rose above that of the rest of theindustry owing to the effect of offering new rice transplanter products and the
support given by government subsidies for agricultural business continuity

YoY growth rate for 9 principal machinery categories (moving annual total)(%)

Apr. 2018Mar. 2019

Apr. 2019Mar. 2020

Apr. 2020Mar. 2021

Jan.-Mar.,
2021

Industry(Amount ofshipment)

104%

97%

86%

104%

ISEKI

(Salesamount)

99%

91%

101%

123%

*ISEKI estimates*9 principal machinery: Tractors, combine harvesters, rice transplanters, tillers, drying machines, rice huskers,
binders, harvesters, treatment
Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

14Market Trends (North America, Europe)
North America
１．Market Trends

Europe(1,000 units, %)Jan. to Mar. cumulative

Category (PTO HP)
2019

2020

2021

Differences

40 HP and lower(Compact tractors)

32

29

47

166%

40-100 HP(Utility tractors)

12

12

16

136%

100 HP and above

4

4

5

118%

(Source: Statistics provided by AEM)

2. Situation of AGCO
(OEM partner)

1. Market Trends
・ Many distributors remained open for business despite
another lockdown due to a resurgence in COVID-19, as
landscaping and other equipment are essential
・While the consumer business was firm, the outlook forbusiness tenders to local authorities was uncertain

2. Local Sales• Unit sales (Jan.-Mar., 2021)
 Local distributors: YoY 114%

Unit sales (Jan.-Mar., 2021)
 Compact tractors: YoY 176%

3. Shipments and Orders
at ISEKI

3. Shipments and Orders at ISEKI
157%
From year before last 175%

Shipments and Orders YoY(Jan.-Jun., 2021):

・Unfulfilled shipments due to shortage of containers for marine transportation

Shipments and Orders (Jan.-Jun., 2021):

YoY
From year before last

212%
152%

・Unfulfilled shipments due to shortage of containers for marine transportation

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

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Market Trends (Asia)
ThailandIndonesia, Myanmar

1. Market Trends
There were signs that the downward trend in farmers’
incomes, due to last year’s drought and the impact of
COVID-19, had bottomed out, although the agricultural
machinery market remained anemic.

1. Market Trends

2. Situation of the Local Distributor, IST Farm Machinery

2. Orders at ISEKI

Number of Units Sold (Jan.-Mar., 2021)
 ASEAN Strategy Tractor: YoY 69%
・ Following consolidation as the Company’s subsidiary,
rebuilding profit structure (increasing sales, reducing
costs) to improve corporate structure.
3. Shipments and Orders at ISEKI
Shipments and Orders (Jan.-Jun., 2021)

YoY:

282%

From Year Before Last: 268%

＜Indonesia＞ ・Sales decreased on COVID-19 countermeasures,
despite government tenders＜Myanmar＞ ・Sales outlet activities substantially constrained
due to the coup d'état. Concerns of prolonged
government instability＜Indonesia＞ ・Decreased YoY due to a decline in the volume oftenders＜Myanmar＞ ・ Significant YoY decline on the impact of the coup d'état

3. PT. ISEKI Indonesia (Manufacturing Subsidiary)
2020(Units, JPY bn)

2021

Actual

1Q ActualPlan

1Q Actual

Production
Volume10,7602,800

14,6304,300

Operating
Income

0.3

0.1

0.4

0.1

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

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Market Trends (Asia)
China

South Korea, Taiwan

1. Trends in the Agricultural Machinery Industry by Product Type(YoY Change in Units, %)Jan.-Mar., 2019

Jan.-Mar., 2020

Jan.-Mar., 2021

Rice Transplanters (Riding)

68.4%

121.1%

217.9%

Combine Harvesters (Allpurpose, Auto-threshing)102.3%

46.2%

118.5%

Tractors(Medium- to Large-sized)

92.8%

85.5%

165.9%

Source: China Association of Agricultural Machinery Manufacturers

2. National Government Subsidy(RMB Bn)

2015

2016

2017

2018

2019

2020

202１

23.8

23.7

18.6

18.6

18.0

17.0

19.0

3. Situation of Dongfeng Iseki．(Number of Units Sold, Jan.-Mar., 2021)
 Rice transplanters (riding): YoY 192%
 Tractors, combine harvesters: Significant increase YoY

1. Market Trends＜South Korea＞
・Needs are continuing to rise for large-sized, highefficiency agricultural machinery in line with agriculturalindustry restructuring and moves toward large-scale farming＜Taiwan＞
・A reactionary decline is expected following subsidies forthe purchase of large-sized agricultural machinery
2. Shipments and Orders at ISEKI＜South Korea＞
・Shipments of tractors fell due to inventory adjustments at
distributors. Growth is expected for combine harvesters that
address needs for large-sized, high-performance agricultural
machinery.
＜Taiwan＞
・The impact of a reactionary decline following subsidies isleading to a YoY decrease in shipments, although this isessentially as planned.

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

17

3. Performance Forecast for the
Fiscal Year Ending December
31, 2021

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

Forecast of Consolidated Financial Results for the Fiscal
Year Ending December 31, 2021
Consolidated
Financial
Results
Forecasts

Initial consolidated financial results forecasts remain unchanged.
⇒ Uncertainties exist concerning the containment of COVID-19 and demand trends
in and outside of Japan
FY2019/12

FY2020/12

FY2021/12*
YoY Change(JPY bn)

ActualNet Sales%

Actual%Forecast

%

149.8

100.0

149.3

100.0

153.5

100.0

4.1

(Domestic)

117.7

78.5

115.9

77.6

117.9

76.8

1.9

(Overseas)

32.1

21.5

33.3

22.4

35.6

23.2

2.2

Operating Income

2.7

1.8

2.0

1.4

3.6

2.3

1.5

Ordinary Income

1.1

0.7

1.7

1.1

3.5

2.3

1.7

Profit Attributable to Ownersof Parent

0.7

0.5

(5.6)

-

2.4

1.6

8.0

Average
Exchange Rate
(JPY)

US$

109.3

107.0

105.0

(2.0)

Euro

121.6

121.5

123.0

1.5

*Forecast for year ending Dec. 2021: Forecast announcement on Feb. 15, 2021
Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

19

4. Topics

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

Topics■ Signing of Collaboration Agreement with Kisarazu City to Promote CuttingEdge Agricultural Technology and Organic Agriculture＜Collaboration Agreement Details＞•

Consulting and guidance based on the aggregation, analysis andverification of information put to use in planning and proposals for
smart and organic agriculture.

・Promoting “organic community development” in Kisarazu City・Enhancing production technology, cutting costs, and securing methods ofcultivation to produce high-quality agricultural products, with the aim of

Promotion ofsustainableagriculture

Environmental
preservation

realizing sustainable agriculture.

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

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Topics■ISEKI’s Activities to Support Women in Agriculture in the
spotlight with METI’s “FY2020 Report on the Nadeshiko Brands”•

ISEKI’s efforts to contribute to the success of women in agriculture through the NOGYOJOSHI (female farmer)
Project have been showcased in this report as a “Noteworthy Enterprise” for its characteristic corporate initiatives topromote the active roles of women.

＜NOGYOJOSHI OEN Project Overview＞
・Approximately 40% of Japan’s agricultural workers are women, and they play animportant role in farming and community activities

・To offer even more support for women in agriculture, ISEKI Group participates in the“NOGYOJOSHI Project,” under the auspices of the Ministry of Agriculture, Forestry
and Fisheries (MAFF), and holds seminars and other activities across Japan toeducate on how to handle agricultural machinery・ Development of “Simple Manual of Agricultural Machinery”
・ Development of agricultural machinery that is easy to operate for everyone

Support of women’s
activities in agriculture

・ Holding of online seminars during the COVID-19 pandemic
Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

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Topics■Addressing electrification needs
In 2022, ISEKI will commence trial sales of compact electric tractor More for the European market, and plans to begin
mass production by 2024

■Establishment of “Green Innovation Promotion Section” (As of May 1, 2021)
With a view to realizing a de-carbonized society, the Company newly established this entity within the Development &Production Division to promote commercialization of zero-emission products and propose new R&D topics for mid- tolong-term strategies for technology so as to bring about such products based on electrification or the use of hydrogen.

■Tobe Office (Ehime), switching to renewable energy
As part of the Company’s efforts at environmental management, from April 2021, the Tobe Office, a base for R&D at theCompany, will switch to relying on renewable energy for roughly 80% of its power needs in its efforts to reduce CO₂
emissions.

■DBJ Environmental Rating – highest rating 15 consecutive times
The Development Bank of Japan Inc. has appraised ISEKI as one of the “Companies doing
environment-friendly business activities progressively,” its highest rating.
*Please see News Releases on the ISEKI website for further information on the above https://www.iseki.co.jp/news/

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

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Notes on the Future Forecast• The objective of this presentation document is to provide information and never intends to induce any action.
• The document was created by ISEKI with currently available information and it involves potential risks anduncertainties. The forecast may not be consistent with actual results depending on fluctuation of the economic
situation and market trends.
• In using this information, investors are expected to depend on their own judgment. ISEKI is not liable for any
losses incurred by investment decision made utilizing the business forecast or targets given in this document.

ISEKI Group joins the nationwide action called “COOL CHOICE”
run by the Ministry of the Environment Government of Japan,
which promotes to make ”smart choices” for the global warming.
As a proposal of “smart choices”, we develop and deliverenvironmental-friendly products like “eco products”.

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2021

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