FREUND CORPORATION(Securities code: 6312)

Results of Operations
for the Third Quarter of the Fiscal
Year Ending February 28, 2023
January 18, 2023

Copyright(C) 2023 Freund Corp. All rights reserved.

Consolidated Financial Summary for Q3 of FY2/23

Copyright(C) 2023 Freund Corp. All rights reserved.

Consolidated Financial SummarySales increased while earnings decreased YoY. Turned into profit from deficit in Q2.

Net sales increased YoY, mainly driven by the chemicals business where both
pharmaceutical excipients and food preservatives sales were favorable; sales of themachinery business grew slightly too.

Operating profit decreased YoY, mainly affected by a decline in the machinery business;at the U.S. subsidiary, significant delays in shipments of machinery continued due to theprolonged procurement of parts/materials and the increasing cost of raw materials
caused by rapid inflation. The ordinary profit and profit dropped as well, but by a smaller
margin than that of operating profit due to a foreign exchange gain.
(Millions of yen)

Net sales

FY2/22

FY2/23Q3Q3ActualActualYoY Change
Amount%11,988

12,504+516+4.3

Operating profit

459

45(413)(90.1)

Ordinary profit492

132(360)(73.1)

Profit2701(269)(99.6)

16.13

0.06(16.07)(99.6)

Depreciation

436

410(25)(5.8)

R&D expenses

455

463

+8+1.8

Earnings per share (yen)Copyright (C) 2023 Freund Corp. All rights reserved.

2

Machinery Business: Overview
 Net sales
 Basically no change in net sales YoY.
 Net sales in Japan decreased YoY because shipments of products continued tobe delayed by the prolonged lead times for procurement of parts/materials
including semiconductors.
 Net sales at the U.S. subsidiary increased YoY partly due to the yen s
depreciation, offsetting the sales decline in Japan.
 Operating profit
 The U.S. subsidiary remained to be in deficit because of: Continuing delays in the procurement of parts/materials caused by tightlabor supply and supply chain disruptions; and Decrease in profit margin due to higher cost of raw materials caused by rapid
inflation.
 Orders received and order backlog
 Orders remained strong, mainly in Japan, and the order backlog increased toan all‐time high.
(Millions of yen)

Net sales

FY2/22

FY2/23Q3

Q3

YoY change%

7,740

7,783+43+0.6

Operating profit

262(263)(526)－Orders received

10,612

11,655＋1,043+9.8

Order backlog

9,626

15,365＋5,738＋59.6

Copyright (C) 2023 Freund Corp. All rights reserved.

3

Machinery Business: Group Company Performance (Sales/Operating Profit) Freund Corporation: Sales and earnings in Japan were down as a result of delays inshipments and sluggish overseas sales.
 Freund‐Vector:
Despite the year‐on‐year increase in sales, big operating loss
was recorded due to a decline in profit margin caused mainly
by delayed shipments and soaring raw material prices.
 Freund‐Turbo:
Big increase in sales but only a small change in operating profit
because of lower sales of products with high profit margins.
 Cos.Mec:
Sales and earnings increased significantly as this company
continues to grow.
(Millions of yen)

Net sales

FY2/22

FY2/23Q3

Q3

YoY change
%

7,740

7,783+43+0.6

FREUND CORPORATION

4,431

3,354(1,077)(24.3)

FREUND‐VECTOR2,021

2,843+821+40.6

FREUND‐TURBO

1,066

1,229+163+15.3

561791+230+41.0262(263)

(526)

－

459

66(392)(85.5)

FREUND‐VECTOR

(113)

(343)

(229)

－

FREUND‐TURBO

5049(1)

(2.7)

(70)

9+79－

Cos.Mec
Operating profit
FREUND CORPORATION

Cos.Mec* Machinery sales and operating profit by group companies are before elimination of intracompany transactions.
Copyright (C) 2023 Freund Corp. All rights reserved.
4

Machinery Business: Group Company Performance (Orders Received/Order Backlog)
 Freund Corporation: The order backlog increased to an all‐time high due to thereceipt of large orders from generic drug companies.
 Freund‐Vector:
A big decline in orders compared to one year earlier, inwhich a large order was received, but the order backlog
remains high.
 Freund‐Turbo:
Large volume of orders and order backlog, mainly for thechemical industries.
 Cos.Mec:
Orders received and order backlog increased to the levelexceeding the previous fiscal year.
(Millions of yen)Orders received

FY2/22

FY2/23Q3

Q3

YoY change%

10,612

11,655+1,043+9.8

FREUND CORPORATION

4,750

7,252+2,501+52.7

FREUND‐VECTOR

4,7482,988(1,760)(37.1)

FREUND‐TURBO

908

1,147+239+26.3

Cos.Mec

390421+30+7.8

Order backlog

9,626

15,365+5,738+59.6

FREUND CORPORATION

4,980

9,084+4,104+82.4

FREUND‐VECTOR

3,768

4,725+956+25.4

FREUND‐TURBO

524756+231+44.2

Cos.Mec

506924+417+82.4* Orders received and order backlog by group companies are before elimination of intracompany transactions.
Copyright (C) 2023 Freund Corp. All rights reserved.

5Machinery Business: Sales by Region
 Japan:Sales decreased YoY as the prolonged lead times for procurement
and shipment, and other situations remains unchanged.

 Overseas:

Sales increased driven by higher sales in the U.S. subsidiary toCentral and South America and Asia.
In Central and South America, sales in Brazil were strong.
And, in Asia, sales in China and India were strong.
Also benefited from the yen s depreciation, recorded a big YoY increase.
Asia

Europe876

558

11%

Others
249

130
1,340

3%

17%

7%
Central andFY2/22South America

Q3 ActualJapan535¥7,740 million

4,5297%
Overseas
3,21041％

USA

2%

590

FY2/237%

Q3 Actual

3,716¥7,783 million

48%

937

59%

12%

990

Overseas

13%

4,067
52％

1,068
14%
Copyright (C) 2023 Freund Corp. All rights reserved.

6

Machinery Business: Quarterly Results(Millions of yen)

5,000

20.0%

Net sales (Left axis)
Operating profit margin (Right axis)

15.0%
4,000
10.0%
3,000
5.0%

0.0%

2,000(5.0)%
1,000(10.0)%
0Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
FY2/18(1,000)

FY2/19FY2/20FY2/21

FY2/22(15.0)%

FY2/23(20.0)%
Copyright (C) 2023 Freund Corp. All rights reserved.

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

18,000Order backlog
Net sales

15,000Orders received

12,000

9,000

6,000

3,000

0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
FY2/18

FY2/19FY2/20FY2/21

FY2/22

FY2/23Copyright (C) 2023 Freund Corp. All rights reserved.

8Chemicals Business: OverviewNet sales
Pharmaceutical excipients: Sales remained strong in Japan and other countries and are
growing at a pace that is expected to result in fiscal year sales
that surpass the prior fiscal year s all‐time high.
Food preservatives:
Higher sales driven by increasing demand in the confectionery
and e‐commerce bread sales categories.
As well as pharmaceutical excipients, sales at a level that isexpected to exceed the prior fiscal year s all‐time high.
Dietary supplement:
Sales declined following the termination of a contract from amajor customer.
Export:Strong sales to customers in Europe and India.
Operating profit:
Increased because of sales growth and higher profitability asmeasures to raise efficiency offset the rising cost of raw materials(Millions of yen)

FY2/22 Q3AmountNet sales
Pharmaceutical Excipients
Food Preservatives

FY2/23 Q3YoY change (%)

4,248
2,352

(3.0)
+10.3

AmountYoY change (%)

4,721
2,623+11.1+18.5(41.1)+11.5

1,645250(70.6)

1,950147

227+44.6

269+18.5

602+48.7*1: Sales to Europe, India, South Korea, China and Taiwan, etc.

742+23.2

Dietary Supplement Products(Export sales)*1

Operating profit+17.9

Copyright (C) 2023 Freund Corp. All rights reserved.

9Chemicals Business: Quarterly Results (by Product Field)
Net sales

Operating profit margin(Millions of yen)

20.0%

2,500
Pharmaceutical Excipients
Food Preservatives
Dietary Supplement Products

2,000Operating profit margin

15.0%

1,500
10.0%
1,000

5.0%
5000Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
FY2/18FY2/19

FY2/20FY2/21

FY2/22

FY2/230.0%

Copyright (C) 2023 Freund Corp. All rights reserved.

10Analysis of Change in Consolidated Operating Profit
 Big negative impact of lower gross profit caused by rising cost of raw materials andother expenses.
 SG&A expenses increased 330 million yen primarily because of higher overseas
expenses due to the yen s depreciation and an increase in promotional expenses as
the pandemic continues.
(Millions of yen)

Profit increase dueto higher sales+171
Positive factors(254)
Sales

Depreciation+18459(23)

Decrease ingross profit due

Advertising

to lower profit margin

expensescommission

(29)

(31)

Entertainment
expenses

Traveling
expenses(54)

Personnelexpenses(98)

Other(114)45
FY2/22 Q3

FY2/23 Q3Copyright (C) 2023 Freund Corp. All rights reserved.

11Summary of Consolidated Balance Sheet Inventories and short‐term loans payable increased mainly because of delays inshipments at the U.S. subsidiary caused by the prolonged procurement ofparts/materials.
 Contract liabilities (advances received) increased at Freund Corporation and theU.S. subsidiary because of the large volume of orders, especially at Freund
Corporation.
(Millions of yen)

(Millions of yen)

FY2/22-End
Current assets
Cash and depodits
Accounts receivable
Inventories
Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets
Total assets

FY2/23 Q3Change15,004

15,818+813

4,145

3,370(774)5,2284,251(977)

5,090

7,323+2,233

7,269

7,686+417

4,562

4,616+53

1,434

1,681+246

1,271

1,388+116

22,27323,504+1,230

FY2/22-End
Current liabilitiesAccounts payable
Short‐term loans payable
Contract liabilities(Advances received)
Non‐current liabilities

Total liabilities
Total net assets
Total liabilities and net assets

FY2/23 Q3Change7,035

7,861+825

2,743

2,164(578)27813+786

2,805

3,779+973

883

884+1

7,919

8,746+827

14,354

14,758+403

22,27323,504+1,230

Copyright (C) 2022 Freund Corp. All rights reserved.

12

Consolidated Earnings and Dividend Forecasts for FY2/23

Copyright(C) 2023 Freund Corp. All rights reserved.

Summary of Consolidated Forecasts
Upward revision for sales forecast and downward revision for profit forecast because of thecurrent economic situation and the business environment (announced January 12, 2023)
Sales:Upward revision to sales due to higher‐than‐planned sales in the chemicals
business and the positive effect of the yen s depreciation on sales at overseas
subsidiaries

Profit:Downward revision to profit due to significant delays in shipments at the U.S.
subsidiary, lower profit margin caused by higher cost of raw materials due to rapid
inflation, difficult operating environment in Japan because of the sharp rise in raw
material prices, prolonged lead times for procurement of parts/materials andshipment
FY2/23
FY2/22(Actual)

Net sales

Revised
Forecast(1/12/23)

Forecast(4/13/22)

AmountYoY change

17,632

18,50019,500＋1,000＋1,867

Operating proﬁt

981

700

150(550)(831)

Ordinary proﬁt

1,032

720

200(520)(832)

Proﬁt (loss) attributableto owners of parent

543

450100(350)(443)

Earnings per share (yen)

32

27

6(21)

(26)

Copyright (C) 2023 Freund Corp. All rights reserved.

14

Summary of Dividend Forecasts
 No change in the 20 yen dividend forecast because of the basic policy oflong‐term dividend stability.
％

Dividend per share (yen)

350

20.0

335.0

Dividend payout ratio(%)
20.0

20.0

20.0

20.0

20.0

20.0

300
90

12.5

12.5

87.8

12.5
39.9

300

27.4

FY2/1437.2
22.4

FY2/15

FY2/1632.4

FY2/17

10.0

34.5

23.3

FY2/18

20.0

15.0

61.6

60

25.0

5.0

FY2/19FY2/20Note: 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.

FY2/21

FY2/22

FY2/23(Forecast)

Copyright (C) 2023 Freund Corp. All rights reserved.

150.0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) 2023 Freund Corp. All rights reserved.

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