FREUND CORPORATION(Securities code: 6312)

Results of Operations
for the Third Quarter of the Fiscal
Year Ending February 29, 2024
January 19, 2024

Copyright(C) 2024 Freund Corp. All rights reserved.

Consolidated Financial Summary for Q3 of FY2/24

Copyright(C) 2024 Freund Corp. All rights reserved.

Consolidated Financial Summary
Net sales
Sales were generally in line with the plan.
⚫ In the machinery business, sales increased as U.S. subsidiary Freund-Vector recovered from the negative
effects of the pandemic and associated delays in deliveries of products.
⚫ In ｔｈｅ chemicals business, sales of pharmaceutical excipients and food preservatives exceeded theprevious year.

Profit⚫

While earnings in the chemicals business were solid, a third quarter loss was incurred because of declining
profitability caused by delivery delays of machinery for orders received at Freund-Vector.
(Millions of yen)

FY2/23Q3Actual

FY2/24
Q3
ActualYoY Change

FY2/24
Forecasts％

12,504

14,170

1,666

13.3%

20,000Operating profit

45118

73

161.5%

700

Ordinary profit

132125(7)(5.1)%

650

15453－450

Earnings per share(yen)

0.06

3.24

3.18－26.87

Depreciation

410

404(6)(1.6)%－R&D expenses

46349128

6.1%－Net sales

ProfitCopyright (C) 2024 Freund Corp. All rights reserved.

2Machinery Business: OverviewNet sales⚫
⚫

Sales in Japan during the first nine months were somewhat slow and, as in prior fiscal years, the largest
percentage of sales will be in the fourth quarter.
Total sales are higher than one year earlier because sales growth outside Japan, mainly due to theongoing recovery of the Freund Vector’s performance, compensated for the decline in domestic sales.

Operating profit⚫

Following the second quarter profit, there was a third quarter operating loss because of unprofitableprojects at Freund-Vector.

Orders received and order backlog⚫
⚫
⚫

Orders received remained strong, driven by the substantial investments in large-scale equipment bygeneric drug manufacturers in Japan.
The receipt of large orders outside Japan also contributed to YoY growth of orders.
A big YoY increase in the order backlog, which remains high.
(Millions of yen)

FY2/23Q3Actual

FY2/24
Q3
ActualYoY Change％

Net sales

7,7839,056

1,273

16.4%

Operating profit

(263)

(76)

186－Orders received

11,655

13,747

2,092

18.0%

Order backlog

15,36518,012

2,647

17.2%

Copyright (C) 2024 Freund Corp. All rights reserved.

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

Somewhat slow sales in Japan in the first nine months but planning on substantial
fourth quarter sales.
Earnings are improving due to higher sales of maintenance services and parts,
which have relatively high margins.

Freund-Turbo

A small sales decrease but earnings remain firm.

Freund-Vector

A third quarter operating loss due to losses on sales of some products, althoughprofitability is recovering from the negative impact in FY2/23 of delays in procuringparts and in shipments of finished products and of the high cost of raw materials.

Cos.Mec

Sales up and earnings down YoY as performance is generally as planned.

(Millions of yen)

Before elimination for consolidation

YoY change

FY2/24
Q3

FY2/23
Q3％

7,783

9,056

1,273

16.4%

Freund Corporation

3,354

2,982(371)(11.1)%

Freund-Turbo

1,229

1,160(69)(5.7)%

Freund-Vector

2,843

4,289

1,446

50.9%

7918738110.3%

(263)

(76)

186－

Freund Corporation

66

72

69.5%

Freund-Turbo

4935(14)(29.2)%

Freund-Vector

(343)

(139)

203－9(56)(66)－Net sales

Cos.Mec
Operating profit

Cos.Mec

Copyright (C) 2024 Freund Corp. All rights reserved.

4

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

Orders increased YoY with the support of the substantial investments in largescale equipment by generic drug manufacturers in Japan and the order backlog
was a record-high 12.8 billion yen at the end of the third quarter.

Freund-Turbo

Orders in the first nine months were lower than one year earlier when there wereseveral large orders. The order backlog remained nearly at the same level as theprevious fiscal year.

Freund-Vector

A big downturn in the order backlog as machinery was delivered but third quarter
orders were strong at 2.2 billion yen.

Cos.Mec

Sales and earnings remain strong with big YoY increases in orders and the orderbacklog due mainly to new orders in emerging countries.

FY2/23
Before elimination for consolidationQ3(Millions of yen)

Net sales

YoY change

FY2/24
Q3％

11,655

13,747

2,092

18.0%

Freund Corporation

7,252

7,775

523

7.2%

Freund-Turbo

1,147919(228)(19.9)%

Freund-Vector

2,988

3,903

915

30.6%

421

1,207

786

186.7%

15,36518,012

2,647

17.2%

9,084

12,803

3,719

40.9%

Freund-Turbo

756

738(17)(2.4)%

Freund-Vector

4,725

3,085

(1,639)(34.7)%

924

1,515

591

64.0%

Cos.Mec
Operating profit
Freund Corporation

Cos.Mec

Copyright (C) Freund Corp. All rights reserved.

5Machinery Business: Sales by Region
JapanSales down YoY but mostly as planned with the largest percentage of sales in thefourth quarter.

Overseas⚫ Sales increased 36% YoY to 5.5 billion yen, with overseas sales accounting forover 60% of the total, similar to the second quarter, partly due to the weak yen.
⚫ Sales growth was driven by Latin America, with contributions from other regions(Middle East/Africa).

Asia
1,340
17%
Europe
590
7%

Latin
America937
12%Overseas
4,067
52％

Others1302%

FY2/23Q3 Actual¥7,783 million
USA
1,068
14%

Asia1,035
11%
Japan
3,716
48%

Europe7288%

Others596
7%

FY2/24Q3 ActualJapan
3,50839%¥9,056 million

Latin
America
1,929
Overseas
21%
5,548
61％

USA
1,259
14%

Copyright (C) 2024 Freund Corp. All rights reserved.

6

Machinery Business: Quarterly Results
Net sales

Operatingprofit margin(Millions of yen)
6,00020%

Net sales（left axis）
Operating profit margin（right axis）

15%

5,000
10%
4,000
5%

3,000

0%-5%
2,000-10%
1,000-15%

0-20%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
FY2/19FY2/20FY2/21

FY2/22

FY2/23

FY2/24

Copyright (C) 2024 Freund Corp. All rights reserved.

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

(Millions of yen)

20,0006,000

Net sales (left axis)
18,000Orders received (right axis)
Order backlog (right axis)

5,000

16,00014,0004,000

12,00010,000

3,000

8,000
2,000

6,000
4,000

1,000

2,000
00Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
FY2/19FY2/20FY2/21

FY2/22

FY2/23

FY2/24

Copyright (C) 2024 Freund Corp. All rights reserved.

8Chemicals Business: Overview
Net sales
Sales were steady and exceeded the previous fiscal year’s record high.
Pharmaceutical excipients: Sales increased as sales of major products remain strong.
Food preservatives: Sales increased despite a slowdown in the growth of demand for breadpreservatives in online sales.
Export: Sales decreased due to lower production by customers for some products.

Operating profit
While gross profit increased, with the gross profit margin nearly unchanged from the previous fiscal year,
operating profit remained flat due to an increase in common expenses.
(Millions of yen)

Net sales

FY2/23 Q3AmountYoY change

FY2/24 Q3Amount

％

4,721

5,113

391

8.3%

Pharmaceutical Excipients

2,771

3,081

309

11.2%

Food Preservatives

1,950

2,032

82

4.2%

（Export sales）

269

202

(67)

(24.9)%

Operating profit

742736(5)(0.7)%

Copyright (C) Freund Corp. All rights reserved.

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

Net sales(Millions of yen)
2,000

Food Preservatives

Pharmaceutical Excipients

Operating profit margin

20.0%

1,500

15.0%

1,00010.0%

5005.0%00.0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
FY2/19FY2/20FY2/21

FY2/22

FY2/23

FY2/24

Copyright (C) 2024 Freund Corp. All rights reserved.

10Analysis of Change in Consolidated Operating Profit⚫

There was a substantial year-on-year increase in operating profit, primarily driven by sales growth, mainly at FreundVector.

⚫

Selling, general and administrative (SG&A) expenses rose due to higher operations consignment expenses andpersonnel expenses at Freund Corporation and higher sales commissions, including those at overseas subsidiaries.
However, the operating profit increased YoY because of sales growth.

⚫

Third quarter earnings were lower than in the second quarter because of losses on sales of some products at FreundVector.

(Millions of yen)

Positive factors
Copyright (C) 2024 Freund Corp. All rights reserved.

11Summary of Consolidated Balance Sheet⚫ Inventories (work in process) increased significantly across all group companies, while
trade receivables were successfully collected.

⚫ Net assets increased only slightly, partly due to dividend payments, yet the equity ratio
remains high at 59.5%.

AssetsCash anddeposits

Accounts
receivable

3,917

Liabilities and Shareholders' Equity
3,229
4,889

5,535

2,730

3,239

Contract Liabilities(Advances received)

2,913
896
1,275
826

3,731
667
1,181
851

Short-term debt
Other liabilities
Non-current
liabilities

14,117

14,187

Net assets

7,525

Inventories

5,586

Other assets

831863

6,888

7,350

FY2/23

FY2/24 Q3

FY2/23

FY2/24 Q3\22,758 million\23,858 million\22,758 million\23,858 million

Non-current
assets

Accounts payable

Copyright (C) 2024 Freund Corp. All rights reserved.

12Topics Pharmaceutical excipient modal shift cuts CO2 emissions 70%

Start of a joint project with MEDICEO
Freund has started a modal shift for the transport of pharmaceutical excipients from the factory in the cityof Hamamatsu to the distribution center in Okayama prefecture, a distance of more than 400 kilometers.
With the start of this joint project with MEDICEO Corporation, excipients are shipped in containers by rail toOkayama with the support of several partners for packing containers, placing containers on rail cars andother logistics tasks. The partners are Japan Oil Transportation Co., Ltd., Japan Freight Railway Company,and Japan Freight Liner Company. Rail transport lowers greenhouse gas emissions and helps deal with theimpact on logistics in Japan of overtime work restrictions beginning in 2024.
Benefits of the modal shift
1.

Lower greenhouse gas emissions
Transporting excipients by truck generates about 8.2 tons of greenhousegases every year. Shifting to rail transport is expected to lower this figure by70%, which is approximately 5.8 tons of emissions.

2.

Better working environment for drivers
Driving time between Hamamatsu and Okayama is long. Overtime restrictions
starting in 2024 will prevent using a single driver for the entire trip. The shift
to rail transport for long distance cargo movements gives drivers a betterworking environment and lowers the cost of transporting excipients.

3.

Prevents accidents and delays
Shifting from trucks to trains greatly reduces risk involving traffic accidents
and delivery delays. The result is better safety and reliability for transport.

Freund is guided by the management vision of contributing to better medicalcare and health for people worldwide and creating and utilizing technologies
for fulfilling lives and food safety. This modal shift is one of sustainability
initiatives at the Freund Group based on this vision. More activities are planned
for achieving more reductions in greenhouse gas emissions associated with thebusiness operations of the Freund Group.

Top: Loading a container
Bottom: A container at the Hamamatsu Factory

Copyright (C) 2024 Freund Corp. All rights reserved.

13Inquiries:

Freund Corporation
Corporate Planning Division
Investor Relations and Public Relations OfficeTel: +81-3-6890-0767
Fax: +81-3-6890-0870
Email: ir@freund.co.jp

IR website: https: //www.freund.co.jp
This presentation contains forward-looking statements involving plans, outlooks, strategies and policies. Thesestatements reflect the judgments of management and assumptions based on information available at the time ofthis presentation. Actual results of operations may differ from these statements for a number of reasons.
Consequently, forecasts and other forward-looking 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) 2024 Freund Corp. All rights reserved.

14