-

October 12, 2023

Consolidated Financial Results
for the Second Quarter of the Fiscal Year Ending February 29, 2024
(Six Months Ended August 31, 2023)
Company name:Securities code:
Representative:
Contact:[Japanese GAAP]
Listing: Tokyo Stock Exchange
URL: https://www.freund.co.jp

Freund Corporation

6312
Iwao Fusejima, President & CEO
Masao Wakai, Director, General Manager, Corporate Administration Division
Tel: +81-3-6890-0750
Scheduled date of filing of Quarterly Report:
October 12, 2023
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results: Yes
Yes
Holding of quarterly financial results meeting:(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Second Quarter (March 1, 2023 – August 31, 2023) of the
Fiscal Year Ending February 29, 2024
(Percentages represent year-on-year changes)(1) Consolidated results of operations
Net sales

Operating profit

Million yen

Six months ended Aug. 31, 2023
Six months ended Aug. 31, 2022
Note: Comprehensive income%

Million yen

Profit attributable toowners of parent

Ordinary profit

Million yen

%

9,583
12.3
177
195 499.9
115
8,534
6.0
(67)
32 (89.6)(17)Six months ended Aug. 31, 2023: 424 million yen(down 39.5%)
Six months ended Aug. 31, 2022: 700 million yen(up 88.5%)
Diluted net income
Net income per shareper share

%

-

Yen

Six months ended Aug. 31, 2023
Six months ended Aug. 31, 2022
Reference: Equity in earnings of affiliates

Million yen

%

Yen

6.91
(1.02)
Six months ended Aug. 31, 2023: (7) million yen
Six months ended Aug. 31, 2022: (9) million yen(2) Consolidated financial position
Total assets

Net assets

Million yen

As of Aug. 31, 2023
As of Feb. 28, 2023
Reference:Equity capital

Equity ratio

Million yen

Net assets per share%

23,067
14,21322,758
14,117
As of Aug. 31, 2023: 14,213 million yen

Yen

61.6
840.9762.0
843.09As of Feb. 28, 2023: 14,117 million yen

2. Dividends
1Q-endDividend per share
3Q-end2Q-endYen

Year-end

Total

Yen

Yen

Yen

Yen

Fiscal year ended Feb. 28, 2023
0.00
Fiscal year ending Feb. 29, 2024
0.00
Fiscal year ending Feb. 29, 2024
(forecast)
Note: Revision to the most recently announced dividend forecast: None

-

20.00

20.00

-

20.00

20.00

3. Consolidated Forecast for the Fiscal Year Ending February 29, 2024 (March 1, 2023 – February 29, 2024)
Net sales
Million yen(Percentages represent year-on-year changes)
Net income per
Profit attributable
Ordinary profit
to owners of parent
share

Operating profit%

Million yen%

Million yen

Full year
20,000
1.7
700
55.0
650
Note: Revision to the most recently announced consolidated forecast: None%

Million yen

%

Yen

16.3

450

-

26.87

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes
in scope of consolidation): None
Newly added: -Excluded: -(2) Application of special accounting methods for presenting quarterly consolidated financial statements: Yes
Note: Please refer to page 10 “(4) Application of Special Accounting Methods for Presenting Quarterly Consolidated
Financial Statements” for details.

(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above:Yes3) Changes in accounting-based estimates:

None4) Restatements:

None(4) Number of outstanding shares (common stock)1) Number of shares outstanding at the end of the period (including treasury shares)
As of Aug. 31, 2023:

18,400,000 shares

As of Feb. 28, 2023:

18,400,000 shares

As of Feb. 28, 2023:

1,655,480 shares

Six months ended Aug. 31, 2022:

16,744,520 shares

2) Number of treasury shares at the end of the period
As of Aug. 31, 2023:

1,498,807 shares

3) Average number of shares outstanding during the period
Six months ended Aug. 31, 2023:

16,757,533 sharesThis financial report is not subject to quarterly review by certified public accountants or auditing firms.
Cautionary statement with respect to forecasts of future performance and other special items
Statements about future performance, including forecasts in this document are based on certain assumptions that theCompany considers to be reasonable and relies on and the information currently available. Actual performance may
significantly differ due to various reasons. Please refer to the section “Explanation of Consolidated Forecast and Other
Forward-looking Statements” on page 3 of the attachments regarding preconditions or other related matters for forecasts
shown above.

Freund Corporation (6312) Financial Results for the Second Quarter of FY2/24

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statements of Income and Comprehensive Income

6(3) Quarterly Consolidated Statement of Cash Flows

8(4) Notes to Quarterly Consolidated Financial Statements

10

Going Concern Assumption

10

Significant Changes in Shareholders’ Equity

10

Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements

10

Changes in Accounting Policies

10

Segment and Other Information

11

Revenue Recognition

13

3. Others

14

Orders and Sales

141

Freund Corporation (6312) Financial Results for the Second Quarter of FY2/24

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
The Japanese economy slowly recovered during the first half of the current fiscal year as economic activity
returned to normal following the government’s decision to downgrade of the legal classification of COVID-19in
May. The recovery includes improvements in the labor market and personal income. There are challenges due to
inflation caused by the Ukraine conflict and other factors and by exchange rate volatility. In addition, monetary
tightening is continuing worldwide and there are signs of slowing economic growth in China. As a result, there isa risk of an economic downturn in Japan and the outlook for the economy remains uncertain.
In June, the Freund Group started operations at a business site in China, which expanded the group’s global
network to five locations: Japan, the United States, India, Italy and China. In Japan, strong demand continues in
the machinery business primarily due to the establishment and expansion of factories by major generic drug
manufacturers. Sales and earnings are also strong in the chemicals business. In this environment, the FreundGroup is dedicated to enhancing its presence in Japan and other countries by actively pursuing and acceleratingsynergy within its Group companies.
In the first half of the fiscal year ending in February 2024, net sales increased 12.3% year-over-year to 9,583
million yen, operating profit was 177 million yen compared with an operating loss of 67 million yen one year
earlier, ordinary profit increased 499.9% to 195 million yen, and profit attributable to owners of parent was 115
million yen compared with loss attributable to owners of parent of 17 million yen one year earlier.
Operating results by segment are as follows
Machinery Business Segment
The order backlog increased to a record-high 16,179 million yen as orders in Japan remained strong, mainly due
to expenditures by generic drug manufacturers to increase production capacity. However, there have been no
improvements in the extended lead times for purchasing certain parts and the increasing delay in delivery offinished products.
In the first half of the previous fiscal year, sales and earnings were negatively impacted by significant shipment
delays due to the tight labor supply in the U.S. and extended lead times for parts/materials procurement causedby supply chain disruptions at the U.S. subsidiary. Performance recovered significantly in the first half of thecurrent fiscal year due to steady progress with shipping products to customers.
As a result, net sales increased 15.2% year-over-year to 6,246 million yen and segment profit was 45 million yen
compared with segment loss of 268 million yen one year earlier.
Chemicals Business Segment
Sales of pharmaceutical excipients in Japan remain very strong, and sales and earnings are on pace to surpass therecord highs of the previous fiscal year.
Growth continued in the food preservatives sector with higher sales and earnings driven mainly by the increasing
demand for preservatives associated with strong e-commerce sales of bread. Sales and earnings are on pace tosurpass the previous year’s performance.
As a result, net sales increased 7.2% year-over-year to 3,337 million yen and segment profit increased 0.2% to479 million yen.

2

Freund Corporation (6312) Financial Results for the Second Quarter of FY2/24(2) Explanation of Financial Position
Total assets increased 308 million yen from the end of the previous fiscal year to 23,067 million yen at the endof the second quarter. This mainly reflected increases of 622 million yen in work in process, 157 million yen inelectronically recorded monetary claims-operating and 196 million yen in software in progress, while there was adecrease of 675 million yen in cash and deposits.
Total liabilities increased 212 million yen from the end of the previous fiscal year to 8,854 million yen at the endof the second quarter. This mainly reflected increases of 638 million yen in contract liabilities and 18 million
yen in lease liabilities, while there were decreases of 306 million yen in notes and accounts payable-trade and
145 million yen in short-term borrowings.
Net assets increased 96 million yen from the end of the previous fiscal year to 14,213 million yen at the end of
the second quarter. This mainly reflected an increase of 291 million yen in foreign currency translation
adjustment and a decrease of 73 million yen in treasury shares, while there was a decrease of 285 million yen inretained earnings.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
There are no revisions to the full year consolidated forecasts for the fiscal year ending February 29, 2024, whichwere disclosed in the Consolidated Financial Results for the Fiscal Year Ended February 28, 2023 dated May 8,
2023.

3

Freund Corporation (6312) Financial Results for the Second Quarter of FY2/24

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet
FY2/23(As of Feb. 28, 2023)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade, and contract assets
Electronically recorded monetary claims-operating
Merchandise and finished goods
Work in process
Raw materials and supplies
Prepaid expenses
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Software
Software in progress
Customer relationship
Other
Total intangible assets
Investments and other assets
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations-operating
Short-term borrowings
Income taxes payable
Contract liabilities
Provision for bonuses
Provision for bonuses for directors (and other officers)
Other
Total current liabilities
Non-current liabilities
Lease liabilities
Retirement benefit liability
Asset retirement obligations
Provision for retirement benefits for directors (and otherofficers)
Other
Total non-current liabilities
Total liabilities

4(Thousands of yen)
Second quarter of FY2/24(As of Aug. 31, 2023)

3,917,128
4,915,548
619,666
760,326
2,717,692
2,108,285
199,546
647,052(15,226)
15,870,019

3,241,974
4,738,333
777,354
913,896
3,340,154
1,938,650
158,999
735,144(17,987)
15,826,521

2,005,809
1,145,522
1,290,121
4,441,453

2,075,940
1,147,349
1,289,358
4,512,649

32,499560,486
324,848
49,621
967,456

26,886756,571347,695
44,2181,175,372

366,398
1,118,946(5,400)1,479,946
6,888,855
22,758,875

407,976
1,150,622(5,400)1,553,198
7,241,220
23,067,741

1,896,836
833,521896,092
130,135
2,913,026
220,553
17,185907,894
7,815,246

1,590,279
790,150
750,673
116,225
3,551,686
212,126
15,800967,6457,994,587

408,206
267,351
67,263426,927
273,211
67,32912,096

16,23371,522
826,439
8,641,685

76,025
859,726
8,854,314

Freund Corporation (6312) Financial Results for the Second Quarter of FY2/24

FY2/23(As of Feb. 28, 2023)(Thousands of yen)
Second quarter of FY2/24(As of Aug. 31, 2023)

Net assets
Shareholders’ equity
Share capital

1,035,600

1,035,600

Capital surplus

1,289,513

1,289,513

Retained earnings

11,899,999

11,614,831

Treasury shares(773,363)(700,172)

Total shareholders’ equity

13,451,750

13,239,772

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

32,992

51,192Foreign currency translation adjustment

612,727

904,004

Remeasurements of defined benefit plans

19,71918,458

Total accumulated other comprehensive income

665,439

973,655

14,117,189

14,213,427

22,758,875

23,067,741

Total net assets
Total liabilities and net assets

5Freund Corporation (6312) Financial Results for the Second Quarter of FY2/24(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Six-month Period)First six months of FY2/23(Mar. 1, 2022 – Aug. 31, 2022)(Thousands of yen)First six months of FY2/24(Mar. 1, 2023 – Aug. 31, 2023)

Net sales

8,534,707

9,583,971

Cost of sales

5,853,465

6,610,082

Gross profit

2,681,241

2,973,889

Selling, general and administrative expenses

2,748,835

2,796,235

Operating profit (loss)(67,593)

177,653

Non-operating income
Interest income

39

805

Dividend income

5,809

6,015

Technical support fee income

9,897

8,982

Foreign exchange gains

95,04427,002Other

11,25916,707

Total non-operating income

122,050

59,513

Interest expenses
Share of loss of entities accounted for using
equity method
Other

9,519

32,427

9,051

7,906

3,219

876

Total non-operating expenses

21,79041,21032,666

195,956

Gain on sale of non-current assets

13,834145

Total extraordinary income

13,834145

Non-operating expenses

Ordinary profit
Extraordinary income

Extraordinary losses
Loss on sale of non-current assets

1,309

-

Loss on retirement of non-current assets

2,442

10,490Loss on valuation of investment securities

1,907

6,240

Total extraordinary losses

5,659

16,73040,841

179,371

Profit before income taxes
Income taxes

57,95363,585

Profit (loss)(17,111)

115,786

Profit (loss) attributable to owners of parent(17,111)

115,7866

Freund Corporation (6312) Financial Results for the Second Quarter of FY2/24

Quarterly Consolidated Statement of Comprehensive Income(For the Six-month Period)First six months of FY2/23(Mar. 1, 2022 – Aug. 31, 2022)(Thousands of yen)First six months of FY2/24(Mar. 1, 2023 – Aug. 31, 2023)(17,111)

115,786(14,785)

18,199714,927

284,211

1,306(1,261)

16,122

7,066

717,571308,215

700,459

424,001

700,459

424,001

Profit (loss)
Other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net oftax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners ofparent7

Freund Corporation (6312) Financial Results for the Second Quarter of FY2/24(3) Quarterly Consolidated Statement of Cash FlowsFirst six months of FY2/23(Mar. 1, 2022 – Aug. 31, 2022)(Thousands of yen)First six months of FY2/24(Mar. 1, 2023 – Aug. 31, 2023)

Profit before income taxes

40,841

179,371

Depreciation

275,968

262,733

Amortization of goodwill

37,849

-

-

7,126

Cash flows from operating activities

Share-based payment expenses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for
directors (and other officers)
Interest and dividend income
Interest expenses

370

1,211

(50,319)(8,805)(12,531)(1,385)(5,849)(6,820)9,519

32,427(97,171)(41,152)

Foreign exchange losses (gains)Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on sale of property, plant and equipment

9,051

7,906

(12,525)(145)

Loss on retirement of property, plant and equipment

2,442

10,490Loss (gain) on valuation of securities

1,907

6,240

Decrease (increase) in trade receivables

884,571

131,164

Decrease (increase) in inventories(717,203)(348,014)

Decrease (increase) in other assets(145,185)(7,969)

Increase (decrease) in trade payables(674,651)(379,640)

Increase (decrease) in contract liabilities(164,103)

509,759

Increase (decrease) in other liabilities(90,700)(11,134)

Other, net

66

274

Subtotal(707,653)

343,638

Interest and dividends received
Interest paid
Income taxes refund

5,849

6,820

(9,519)(32,427)

1,343

19,586

Income taxes paid

(236,301)(112,284)

Net cash provided by (used in) operating activities(946,281)

225,333(130,942)(180,090)

28,941-(3,556)(3,994)(160,411)(179,331)

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for retirement of property, plant andequipment
Purchase of intangible assets
Purchase of investment securities(1,581)(978)

Payments of guarantee deposits(3,509)(1,146)

Proceeds from refund of guarantee deposits
Net cash provided by (used in) investing activities

8

100

652

(270,960)(364,888)

Freund Corporation (6312) Financial Results for the Second Quarter of FY2/24

First six months of FY2/23(Mar. 1, 2022 – Aug. 31, 2022)(Thousands of yen)First six months of FY2/24(Mar. 1, 2023 – Aug. 31, 2023)

900,083(199,592)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings(3,375)(3,543)

Repayments of lease liabilities(20,908)(39,706)

Dividends paid

(334,276)(332,549)

541,523(575,391)

169,026

39,793

Net increase (decrease) in cash and cash equivalents(506,692)(675,153)

Cash and cash equivalents at beginning of period

4,145,207

3,917,128

Cash and cash equivalents at end of period

3,638,515

3,241,974

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents

9Freund Corporation (6312) Financial Results for the Second Quarter of FY2/24(4) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements
The tax expenses are calculated by first estimating the effective tax rate after the application of tax effectaccounting with respect to profit before income taxes during the fiscal year in which the period falls, andmultiplying that rate by the profit before income taxes for the period. However, Freund uses the statutory
effective tax rate to calculate tax expenses for cases in which using the estimated effective tax rate gives a
noticeably irrational result.
Changes in Accounting Policies
Change in valuation method for inventories
Beginning with the first quarter of the current fiscal year, some foreign consolidated subsidiaries have changed
the valuation method for inventories from the lower of cost or market method with cost determined by the firstin first-out method to the lower of cost or market method with cost determined by the gross average method.
This change was made as part of a reexamination of valuation methods that was performed due to a change in IT
system. The new valuation method was not applied retroactively because its monetary effect is negligible.

10Freund Corporation (6312) Financial Results for the Second Quarter of FY2/24

Segment and Other Information
Segment information
I First six months of FY2/23 (Mar. 1, 2022 – Aug. 31, 2022)
1. Information related to net sales and profit or loss for each reportable segment
MachineryBusiness

Chemicals
Business(Thousands of yen)Amounts shown onquarterly consolidated
statement of income(Note 2)Adjustment(Note 1)Total

Net sales(1) External sales(2) Inter-segment sales andtransfers

5,420,924

3,113,783

8,534,707-

8,534,707

-

-

-

-

-

Total

5,420,924

3,113,783

8,534,707-

8,534,707

Segment profit (loss)(268,657)
Notes: 1. Contents of adjustments are as follows.

478,130

209,472(277,066)(67,593)

The negative adjustment of 277,066 thousand yen to segment profit (loss) includes corporate expenses that are notallocated to any of the reportable segments. Corporate expenses mainly consist of selling, general andadministrative expenses that are not attributable to any of the reportable segments.
2. Segment profit (loss) is adjusted to be consistent with operating loss recorded in the quarterly consolidated
statement of income.

2. Information related to impairment losses on non-current assets, goodwill, etc. for each reportable segment
Not applicable.
3. Information by region
Net sales
In addition to the disclosure of information required by the “Accounting Standard for Quarterly Financial
Statements,” the Company provides information by region (net sales) based on the “Accounting Standard forDisclosures about Segments of an Enterprise and Related Information” for the purpose of providing investors
with useful information.
(Thousands of yen)Japan

United States

Latin America

677,661

717,318

5,517,286

Europe380,502

Asia
1,185,629

Other56,307

Notes: 1. Classification of net sales is based on the location of the client and categorized by country or region.
2. Groupings of countries and regions other than Japan are determined by geographic proximity and mutual
operational relationships. Major countries and regions in each geographic segment are as follows.
(1) Latin America:

Brazil, etc.

(2) Europe:

France, Italy, UK, etc.

(3) Asia:

China, India, etc.

(4) Other:

Middle East, etc.

11

Total
8,534,707

Freund Corporation (6312) Financial Results for the Second Quarter of FY2/24

II First six months of FY2/24 (Mar. 1, 2023 – Aug. 31, 2023)
1. Information related to net sales and profit or loss for each reportable segment
MachineryBusiness

Chemicals
Business(Thousands of yen)Amounts shown onquarterly consolidated
statement of income(Note 2)Adjustment(Note 1)Total

Net sales(1) External sales(2) Inter-segment sales andtransfers

6,246,847

3,337,124

9,583,971-

9,583,971

-

-

-

-

-

Total

6,246,847

3,337,124

9,583,971-

9,583,971

45,054
Segment profit
Notes: 1. Contents of adjustments are as follows.

479,191524,245(346,591)

177,653

The negative adjustment of 346,591 thousand yen to segment profit includes corporate expenses that are notallocated to any of the reportable segments. Corporate expenses mainly consist of selling, general andadministrative expenses that are not attributable to any of the reportable segments.
2. Segment profit is adjusted to be consistent with operating profit recorded in the quarterly consolidated statement ofincome.

2. Information related to impairment losses on non-current assets, goodwill, etc. for each reportable segment
Not applicable.
3. Information by region
Net sales
In addition to the disclosure of information required by the “Accounting Standard for Quarterly Financial
Statements,” the Company provides information by region (net sales) based on the “Accounting Standard forDisclosures about Segments of an Enterprise and Related Information” for the purpose of providing investors
with useful information.
(Thousands of yen)Japan

United States

Latin America

Europe

Asia

Other

5,682,109
1,129,711
1,641,569
431,074
515,817
183,689
Notes: 1. Classification of net sales is based on the location of the client and categorized by country or region.
2. Groupings of countries and regions other than Japan are determined by geographic proximity and mutual
operational relationships. Major countries and regions in each geographic segment are as follows.
(1) Latin America:

Brazil, Mexico, etc.

(2) Europe:

France, Italy, UK, etc.

(3) Asia:

China, India, etc.

(4) Other:

Middle East, Africa, etc.

12

Total
9,583,971

Freund Corporation (6312) Financial Results for the Second Quarter of FY2/24

Revenue Recognition
Information of breakdown on revenue from contracts with customers
First six months of FY2/23 (Mar. 1, 2022 – Aug. 31, 2022)(Thousands of yen)
Reportable segments

Machinery BusinessJapan

Chemicals Business

Total

2,574,616

2,942,670

5,517,286

United States

677,541120

677,661

Latin America

717,318-

717,318

Europe275,877

104,625

380,502

Asia

1,119,262

66,367

1,185,629

Other56,307-56,307

Revenue from contracts with customers

5,420,924

3,113,783

8,534,707

External sales

5,420,924

3,113,783

8,534,707

First six months of FY2/24 (Mar. 1, 2023 – Aug. 31, 2023)(Thousands of yen)
Reportable segments

Machinery BusinessJapan

Chemicals BusinessTotal

2,476,338

3,205,770

United States

1,129,711-

1,129,711

Latin America

1,641,569-

1,641,569

Europe390,766

40,307431,074

Asia

427,183

88,634515,817

Other

5,682,109

181,277

2,412

183,689

Revenue from contracts with customers

6,246,847

3,337,124

9,583,971

External sales

6,246,847

3,337,124

9,583,971

13

Freund Corporation (6312) Financial Results for the Second Quarter of FY2/24

3. Others
Orders and Sales(1) Orders received
Operating segment(Thousands of yen)First six months of FY2/23(Mar. 1, 2022 – Aug. 31, 2022)

First six months of FY2/24(Mar. 1, 2023 – Aug. 31, 2023)

AmountAmountYear-on-year (%)

Year-on-year (%)

Machinery Business
8,409,179
109.3
9,246,716
110.0
Notes: 1. No orders received are shown for the Chemicals Business because production is based on sales plans rather thanspecific orders.
2. Orders received are based on selling prices; inter-segment transactions have been eliminated.

(2) Order backlog
Operating segment(Thousands of yen)First six months of FY2/23(Mar. 1, 2022 – Aug. 31, 2022)

First six months of FY2/24(Mar. 1, 2023 – Aug. 31, 2023)

AmountAmountYear-on-year (%)

Year-on-year (%)

Machinery Business
158.0
16,179,335
113.3
14,275,985
Notes: 1. No order backlog is shown for the Chemicals Business because production is based on sales plans rather thanspecific orders.
2. Order backlog is based on selling prices; inter-segment transactions have been eliminated.

(3) Sales
Operating segment(Thousands of yen)First six months of FY2/23(Mar. 1, 2022 – Aug. 31, 2022)

First six months of FY2/24(Mar. 1, 2023 – Aug. 31, 2023)

AmountAmountComposition (%)

Composition (%)

Machinery Business

5,420,924

63.5

6,246,847

65.2

Chemicals Business

3,113,783

36.5

3,337,124

34.8

Total
8,534,707
100.0
9,583,971
Note: Sales are based on selling prices; inter-segment transactions have been eliminated.

100.0This summary report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been
prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience ofreaders who prefer an English translation.

14