FREUND CORPORATION(Securities code: 6312)

Results of Operations
for the First Quarter of the Fiscal YearEnding February 28, 2023
July 15, 2022

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Consolidated Financial Summary for the First Quarter of FY2/23

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Consolidated Financial Summary
 Sales and earnings down YoY with losses at all levels.
 The chemicals business performed well but the machinery business was impacted by delays in therecognition of certain sales due to prolonged procurement of parts and materials, mainly in the U.S.
 There were losses in 1Q FY2/20 and 1Q FY2/21. Although there was a profit in 1Q FY2/22, the 1Q
FY2/23 returned to a loss.

(Millions of yen)

Net sales

FY2/22

FY2/23Q1

Q1

YoY Change

FY2/23
Forecasts

%

3,957

3,535(421)(10.6)

18,500Operating profit

157

(104)

(261)

−

700

Ordinary profit

168

(43)

(212)

−

720

Profit

119

(45)

(165)

−

450

Earnings per share (yen)

7.15(2.73)(9.88)−

26.87

Depreciation

167

133

(33)

(20.2)－R&D expenses

152

143

(8.0)

(5.9)

－－－－−

20.00

Dividend

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2

Machinery Business: Overview
 Net Sales
Sales were down because of the recognition of some sales in Japan was delayed. The long timeneeded to procure semiconductors and other parts also affected sales.

Outside Japan, there was a big decrease in sales at the U.S. subsidiary because of the U.S. labor
shortage and the effect of supply chain disruption on procuring parts.

 Operating profitThere was an operating loss mainly because of the sluggish sales and loss at a U.S. subsidiary.

 Orders received and order backlog
Orders were strong, mainly in Japan, and the order backlog increased to an all-time high.

(Millions of yen)

FY2/22

FY2/23

Q1

Q1

YoY change%

2,651

2,080(570)(21.5)

Operating profit

75(156)(232)－Orders received

3,132

4,043＋910+29.1

Order backlog

7,175

13,026＋5,850＋81.5

Net sales

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

Sales and earnings in Japan were down resulting from delays in some projects.

 Freund-Vector:

The loss increased as sales declined significantly due to prolonged lead timecaused by shortages of parts and late deliveries of the parts from vendors;
sales were insufficient to cover fixed expenses.

 Freund-Turbo:

Sales were the same as one year earlier and operating profit increased due
to higher sales of high-margin products; the loss decreased as a result.

 Cos.Mec:

Sales increased. Turned into profitable led by improved profit margins mainly
by better capacity utilization.

(Millions of yen)

Net sales

FY2/22

FY2/23

Q1

Q1

YoY change

FY2/23
Forecasts

%

2,651

2,080(570)(21.5)

12,7001,645

1,189(455)(27.7)－

FREUND‐VECTOR

605

446

(158)

(26.2)－

FREUND‐TURBO

311

323+12+3.9－

Cos.Mec165

269+104+62.9－

75(156)

(232)

－

－

FREUND CORPORATION

170(13)

(183)

－

－

FREUND‐VECTOR

(25)

(185)

(159)

－－

FREUND‐TURBO

(11)

(1)

+10－

－

Cos.Mec(20)

47+67－－

FREUND CORPORATION

Operating profit

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

Large order backlog as generic drug companies increase
production capacity.

 Freund-Vector:

Strong orders from customers in North and South Americancountries, especially Brazil.

 Freund-Turbo:

Large volume of orders and order backlog, mainly for the chemicaland pharmaceutical industries.

 Cos.Mec:

Big increase in the order backlog to the level exceeding sales in
the previous fiscal year.

(Millions of yen)Orders received

FY2/22

FY2/23

Q1

Q1

YoY change%

3,132

4,043

+910

+29.1

1,688

2,359+670+39.7

FREUND‐VECTOR

973

1,005+31+3.3

FREUND‐TURBO

251613+362+144.0

Cos.Mec

228191(37)(16.3)

Order backlog

7,175

13,026+5,850+81.5

FREUND CORPORATION

4,704

6,399+1,694+36.0

FREUND‐VECTOR

1,300

4,712+3,411+262.2

FREUND‐TURBO

489

1,024+534+109.3

Cos.Mec727

1,152+424+58.4

FREUND CORPORATION

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Machinery Business: Sales by Region
 Japan:Sales down mainly because of a delay in the recognition of some sales.

 Overseas:Sales in the U.S. decreased because shipment delayed at Freund-Vector due to theprolonged procurement of parts and materials caused by supply chain disruptions.
Slight decrease in overseas sales as a whole, although Cos.Mec sales in Europe andSouth America recovered.

(Millions of yen)

FY2/22

FY2/23

Q1

Q1

YoY change%

Net sales

2,651

2,080(570)(21.5)

Japan

1,684

1,175(508)(30.2)

Overseas

966

905

(61)

(6.4)

USA41289(322)(78.2)

Latin America

99363+263+263.5

Europe80

133+53+66.8

Asia

297

289

(7)(2.6)

Others7729(48)(62.5)

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Machinery Business: Quarterly Results
Net sales

Operating profit margin(Millions of yen)
5,000

20.0%

Net sales
Operating profit margin

15.0%
4,000

10.0%

3,000
5.0%

0.0%

2,000(5.0)%
1,000(10.0)%

0Q1Q2Q3

FY2/18(1,000)

Q4

Q1

Q2Q3

FY2/19Q4

Q1

Q2Q3

FY2/20Q4Q1Q2Q3

FY2/21Q4Q1Q2Q3

FY2/22Q4Q1

Q2(15.0)%

FY2/23(20.0)%

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

10,000Order backlog
Net sales
Orders received

8,000

6,000

4,000

2,000

0Q1

Q2

Q3

FY2/18

Q4Q1

Q2

Q3

FY2/19

Q4

Q1Q2

Q3

FY2/20

Q4

Q1

Q2Q3

FY2/21

Q4

Q1

Q2

Q3

FY2/22Q4Q1Q2

FY2/23Copyright (C) 2022 Freund Corp. All rights reserved.

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Chemicals Business: Overview
 Net Sales Pharmaceutical excipients: Sales increased both in Japan and overseas.
 Food preservatives:
Higher sales driven by increasing demand in theconfectionery and e-commerce bread sales categories.
 Dietary supplement:
The size of this business declined following thethe termination of a contract from a major customer.
Strong sales to customers in Europe and India.
 Export:
 Segment Profit:(Millions of yen)

Net sales

No change from one year earlier because of delays in therecognition of sales of high-margin products in the field ofpharmaceutical excipient.
FY2/22

FY2/23

Q1

Q1

YoY change%

FY2/23
Forecasts

1,305

1,455＋149＋11.4

5,800Pharmaceutical Excipients

677

779+101+15.0－

Food Preservatives

528620+92+17.5－

Dietary Supplement Products

9955(44)(44.8)－(Export sales)*1

37

107+70+188.7－

Operating profit

193

192+0(0.4)－*1: Sales to India, South Korea, China, Europe, etc.

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9Chemicals Business: Quarterly Results (by Product Field)
Net sales
Operating profit margin(Millions of yen)
2,500

20.0%

Pharmaceutical Excipients
Food Preservatives
Dietary Supplement Products

2,000Operating profit margin
15.0%

1,500

10.0%

1,0005.0%
50000.0%
Q1Q2Q3

FY2/18Q4Q1Q2Q3

FY2/19Q4Q1Q2Q3

FY2/20Q4Q1Q2Q3

FY2/21Q4Q1Q2Q3

FY2/22Q4Q1Q2

FY2/23Copyright (C) 2022 Freund Corp. All rights reserved.

10Analysis of Change in Consolidated Operating Profit
 The lower gross profit caused by lower sales was the primary reason for the decrease inoperating profit.
 Higher SG&A expenses e.g., increases in personnel expenses and traveling expenses further
depressed operating profit.
(Millions of yen)

Positive factorsCopyright (C) 2022 Freund Corp. All rights reserved.

11Inquiries:

Freund Corporation
Corporate Planning Department
Corporate Planning Division
Tel: +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) 2022 Freund Corp. All rights reserved.

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