April 13, 2022

Consolidated Financial Results for the Fiscal Year Ended February 28, 2022
[Japanese GAAP]
Listing: Tokyo Stock Exchange
Freund Corporation
6312
URL: https://www.freund.co.jp
Iwao Fusejima, President & CEO
Masao Wakai, Managing Director, Division Director, Corporate Planning Division
Tel: +81-3-6890-0750
Scheduled date of Annual General Meeting of Shareholders:
May 27, 2022
Scheduled date of filing of Annual Securities Report:
May 30, 2022
Scheduled date of payment of dividend:
May 30, 2022
Preparation of supplementary materials for financial results:
Yes
Holding of financial results meeting:Yes
Company name:Securities code:
Representative:
Contact:(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended February 28, 2022
(March 1, 2021 – February 28, 2022)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Million yen

Fiscal year ended Feb. 28, 2022
Fiscal year ended Feb. 28, 2021
Note: Comprehensive income%

Million yen

Profit attributable toowners of parent

Ordinary profit%

Million yen%

Million yen%

17,6325.2
981 (11.6)
1,032 (21.1)
543 (44.0)
16,765
(0.0)
1,111
99.0
1,308 124.5
970 154.4
Fiscal year ended Feb. 28, 2022:
830 million yen(down 12.6%)
Fiscal year ended Feb. 28, 2021:
949 million yen(up 189.0%)
Net income per
Diluted net
Ordinary profit Operating profit
Return on equity
share
income per shareon total assets
on net sales
Yen

Fiscal year ended Feb. 28, 2022
Fiscal year ended Feb. 28, 2021
Reference: Equity in earnings of affiliates

%

%

%

32.46
3.9
57.96
7.2
Fiscal year ended Feb. 28, 2022: - million yen
Fiscal year ended Feb. 28, 2021: - million yen

Yen

4.8
6.7

5.6
6.6

(2) Consolidated financial position
Total assets

Net assets

Million yen

Equity ratio

Million yen

Net assets per share%Yen

857.28
As of Feb. 28, 2022
22,273
14,35464.4
827.67
As of Feb. 28, 2021
20,575
13,85867.4
Reference: Equity capital
As of Feb. 28, 2022: 14,354 million yen
As of Feb. 28, 2021: 13,858 million yen
Note: The provisional accounting treatment for a business combination with Cos.Mec S.r.l. was finalized as of February 28, 20 22
and figures as of February 28, 2021 reflect the finalized content of the provisional accounting treatment.

(3) Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of the period

Million yen

Million yen

Million yen

Million yen

701
2,280

(680)
(1,726)

(427)
(371)

4,145
4,498

Fiscal year ended Feb. 28, 2022
Fiscal year ended Feb. 28, 2021

2. Dividends
Dividend per share
1Q-endFiscal year ended Feb. 28, 2021
Fiscal year ended Feb. 28, 2022
Fiscal year ending Feb. 28, 2023
(forecast)

2Q-end3Q-end Year-end

Total

Yen

Yen

Yen

Yen

-

0.00
0.00

-

20.00
20.00

20.00
20.00

-

0.00

-

20.00

20.00

Total
dividends

Dividend
Dividend on
payout ratio
equity(consolidated) (consolidated)

Yen Million yen

334
334

%

%

34.5
61.6

2.5
2.4

74.4

3. Consolidated Forecast for the Fiscal Year Ending February 28, 2023 (March 1, 2022 – February 28, 2023)
Net sales
Full year

Operating profit(Percentages represent year-on-year changes)
Profit attributable to
Net income perowners of parent
share

Ordinary profit

Million yen%

Million yen%

Million yen%

Million yen%

Yen

18,5004.9

700(28.7)

720(30.3)

450(17.2)

26.87

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
Newly added: -Excluded: -(2) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others:None2) Changes in accounting policies other than 1) above:None3) Changes in accounting-based estimates:

None4) Restatements:

None(3) Number of outstanding shares (common stock)1) Number of shares outstanding at the end of the period (including treasury shares)
As of Feb. 28, 2022:

18,400,000 shares

As of Feb. 28, 2021:

18,400,000 shares

As of Feb. 28, 2021:

1,655,480 sharesFiscal year ended Feb. 28, 2021:

16,744,520 shares

2) Number of treasury shares at the end of the period
As of Feb. 28, 2022:

1,655,480 shares

3) Average number of shares outstanding during the period
Fiscal year ended Feb. 28, 2022:

16,744,520 shares

Reference: Summary of Non-consolidated Financial Results
Non-consolidated Financial Results for the Fiscal Year Ended February 28, 2022
(March 1, 2021 – February 28, 2022)(1) Non-consolidated results of operations
Net sales
Fiscal year ended Feb. 28, 2022
Fiscal year ended Feb. 28, 2021

(Percentages represent year-on-year changes)
Ordinary profit
ProfitOperating profit

Million yen%

Million yen%

Million yen%

Million yen%

12,661
12,432

1.8
4.4

1,198
898

33.4
68.0

1,316
951

38.4
61.5

779
661

17.8
83.3

Net income per share Diluted net income per share
Fiscal year ended Feb. 28, 2022
Fiscal year ended Feb. 28, 2021

Yen

Yen

46.55
39.53

-

(2) Non-consolidated financial position
Total assets
Million yen

As of Feb. 28, 2022
As of Feb. 28, 2021
Reference: Shareholders’ equity

Net assets

Equity ratio

Million yen

17,366
13,312
17,244
12,850
As of Feb. 28, 2022: 13,312 million yen

Net assets per share%

Yen

795.0276.7
767.4274.5
As of Feb. 28, 2021: 12,850 million yen

This financial report is not subject to audit by certified public accountants or auditing firms.
Cautionary statement with respect to forecasts of future performance and other special items
Forecasts regarding future performance in these materials are based on certain assumptions judged to be valid and information
currently available to the Company. Actual performance may differ significantly from these forecasts for a number of reasons.
Please refer to the section “1. Overview of Results of Operations (4) Outlook” on page 4 of the attachments regarding
preconditions or other related matters for forecasts shown above.

Freund Corporation (6312) Financial Results for FY2/22

Contents of Attachments
1. Overview of Results of Operations

2(1) Results of Operations

2(2) Financial Position

3(3) Cash Flows3(4) Outlook

4(5) Basic Policy for Profit Distribution, and Dividends in the Current and Next Fiscal Years5

2. Basic Approach to the Selection of Accounting Standards

5

3. Consolidated Financial Statements and Notes

6(1) Consolidated Balance Sheet

6(2) Consolidated Statements of Income and Comprehensive Income

8(3) Consolidated Statement of Changes in Equity

10(4) Consolidated Statement of Cash Flows

12(5) Notes to Consolidated Financial Statements

14

Going Concern Assumption

14

Changes in Accounting Policies

14

Additional Information

14

Business Combinations

14

Segment and Other Information

15

Per Share Information

18

Subsequent Events18

4. Others

18

Orders and Sales

18

1Freund Corporation (6312) Financial Results for FY2/22

1. Overview of Results of Operations(1) Results of Operations
There was significant downward pressure on the Japanese economy mainly due to sluggish consumer spending
during the current fiscal year due to more declarations of states of emergency and other pandemic safety measuresagainst the emergence of new variants of the virus that causes COVID-19. Restrictions due to the pandemic havebeen gradually lifted as more people are vaccinated and actions are taken t o live with this virus. However, theeconomic recovery has been slow because of the increasing number of infections caused by new variants andshortages of semiconductors and many types of materials.
In other countries, economies are recovering as pandemic restrictions are eased as more people are vaccinated,
mainly in developed countries. In some regions, there are signs of another increase in infections. In addition,
there are widespread logistics and supply chain disruptions. In addition, there are concerns about the impact on
the global economy of sanctions imposed on Russia following its February 2022 invasion of Ukraine. As a result,the outlook for the global economy is unclear.
In the pharmaceutical industry, which is the primary source of demand for Freund Group products, companies
need to deal with the challenges of the rising cost of R&D programs and increasing measures to hold down
healthcare expenditures. In Japan, drug prices will be affected as the national health insurance drug pricerevisions will be implemented annually instead of once every two years as in prior years. In the generic drug
market, the growth rate of sales is expected to decrease as the benefits of actions by the Japanese government toincrease the use of these drugs decline. Due to problems involving manufacturing operations at some companies,
there is a need to build a sound infrastructure for ensuring the quality and supply reliability of generic drugs.
The Freund Group is taking many actions based on the Eighth Medium-term Management Plan covering thethree-year period ending February 2023. This plan is centered on the themes of customers, new products, a global
perspective and growth. In addition, the plan has the following seven goals.
1.

Group collaboration

2.

Putting clients’ views first3.

Emphasis on innovation

4.

Global management

5.

Execution of growth strategy

6.

Business process reengineering and working style reforms

7.

Emphasis on compliance and corporate governance

While focusing on these goals, the overall objective is to structure business operations so that performance is notvulnerable to a change in conditions in any particular market where the Freund Group operates. During thecurrent fiscal year, all group companies worked on reaching the consolidated targets of sales of 18,500 million
yen and an operating profit of 1,100 million yen.
Net sales increased 5.2% year-over-year to 17,632 million yen, operating profit decreased 11.6% to 981 million
yen, ordinary profit decreased 21.1% to 1,032 million yen, and profit attributable to owners of parent decreased
44.0% to 543 million yen.
In the machinery business, there was a large volume of orders but the performance of this business was severely
impacted by difficulties procuring parts and materials at overseas subsidiaries because of supply chain disruptions.
The result was a big downturn in shipments.
In Japan, an extraordinary loss was recorded due to an impairment charge for equipment that is no longer
expected to be used, a payment involving litigation concerning a copyright infringement, and other items.
In the fiscal year that ended in February 2021, operating profit, ordinary profit and profit attributable to owners ofparent increased at U.S. subsidiary Freund Vector Corporation due to the receipt of a pandemic subsidiary of
about 200 million yen from the U.S. government and there were other one-time items that affected earnings,
including insurance income of about 100 million yen. In the fiscal year that ended in February 2022, consolidated
operating profit and ordinary profit were about the same as in the prior after excluding the contribution of these
one-time items
2

Freund Corporation (6312) Financial Results for FY2/22

Results by business segment were as follows.
Machinery Business Segment
Granulating and coating equipment are the main products of this segment. The recent consolidation of Italiansubsidiary Cos.Mec S.r.l. contributed to sales growth. As was explained earlier, the volume of orders was high but
shipments of products were delayed by supply chain disruptions, mainly at companies outside Japan . In addition,
the receipt of a pandemic subsidy by U.S. subsidiary Freund-Vector Corporation contributed to earnings in theprevious fiscal year. For these reasons, the operating profit of this segment decreased.
As a result, net sales increased 6.0% year-over-year to 11,836 million yen and segment profit decreased 40.5% to623 million yen.
Chemicals Business Segment
Sales and operating profit of pharmaceutical excipients increased because of the strong performance of thisbusiness sector in Japan and other countries and cost reduction measures.
As in the previous fiscal year, sales and earnings of food preservatives were impacted by sluggish sales ofconfectionery products at department stores and theme parks because of the pandemic. However, sales and theoperating profit were higher than one year earlier due to an increase in sales of confectionery products at
supermarkets and convenience stores as well as to cost reductions.
Sales of health food products fell sharply because of the completion of a con tract for manufacturing products fora high-volume customer. However, there was only a small decline in operating profit because this contract had asmall profit margin.
As a result, net sales increased 3.6% year-over-year to 5,795 million yen and segment profit increased 62.0% to884 million yen.
(2) Financial Position
Total assets increased 1,698 million yen from the end of the previous fiscal year to 22,273 million yen at the endof the current fiscal year. This mainly reflected increases of 932 million yen in work in process and 815 million
yen in raw materials and supplies.
Total liabilities increased 1,202 million yen from the end of the previous fiscal year to 7,919 million yen at theend of the current fiscal year. This mainly reflected an increase of 1,635 million yen in advances received, while
there was a decrease of 235 million yen in electronically recorded obligations-operating.
Net assets increased 495 million yen from the end of the previous fiscal year to 14,354 million yen at the end of
the current fiscal year.
(3) Cash FlowsThe balance of cash and cash equivalents at the end of the current fiscal year was 4,145 million yen, down 353
million yen over the end of the previous fiscal year (this compares with an increase of 184 million yen in theprevious fiscal year).
The cash flow components during the current fiscal year and the main reasons for changes are as described below.
Cash flows from operating activities
Net cash provided by operating activities was 701 million yen (compared with net cash provided of 2,280 million
yen in the previous fiscal year). Although there were negative factors including an increase in inventories of
1,430 million yen, there were positive factors including an increase in advances received of 1,565 million yen anddepreciation of 570 million yen.
Cash flows from investing activities
Net cash used in investing activities was 680 million yen (compared with net cash used of 1,726 million yen in
the previous fiscal year). There were negative factors including purchase of property, plant and equipment of 460
3Freund Corporation (6312) Financial Results for FY2/22

million yen and purchase of intangible assets of 236 million yen.
Cash flows from financing activities
Net cash used in financing activities was 427 million yen (compared with net cash used of 371 million yen in theprevious fiscal year). This was mainly the result of dividends paid of 335 million yen.
(4) Outlook
Although we expect that the new variants of COVID-19will continue to have an effect on the Japanese and global
economies, we anticipate a decline in the pandemic’s impact as restrictions on economic activity are lifted,
mainly in affluent countries, along with progress with vaccinations and COVID-19 drugs. We forecast acontinuation for the time being of supply chain turmoil and shortages of semiconductors and many types of partsand materials. In addition, economic sanctions on Russia in response to its invasion of Ukraine are likely to affect
the global economy. Due to many events that may cause an economic downturn, the outlook for the economy willremain uncertain.
In the pharmaceutical industry, which is the primary source of demand for Freund Group products, sales are
expected to continue to decrease very slowly in Japan. This outlook is based on the positive effect of rising sales
volumes as Japan’s population ages and the expected recovery in sales as pandemic-related medical examination
restrictions end along with the negative effect of measures to hold down drug prices, such as by revising national
health insurance drug prices every year. In Japan’s generic drug market, we forecast slowing growth because of
the end of benefits of government actions to increase the use of these drugs and the effects of supply limitations
caused by manufacturing problems at some generic drug producers. To end limitations on the supply of thesedrugs, several companies, primarily large generic drug manufacturers, plan to enlarge factories and take othersteps to raise production capacity.
The global pharmaceutical market as well has been impacted by the reluctance o f people to see physiciansbecause of the COVID-19 crisis. Nevertheless, global pharmaceutical sales are expected to continue to grow as
the populations of affluent countries age while in emerging countries populations and the quality of medical careincrease.
Due to the current business climate, the Freund Group is currently implementing the Eighth Medium-termManagement Plan, which covers the three-year period ending in February 2023. Further strengthening sales
capabilities in the machinery and chemicals businesses is one goal of the new plan. Another goal is building an
infrastructure for utilizing the Freund Group’s technologies for meeting customers’ most important needs. All ofthese initiatives will create a sound base for even more aggressive product development and sales activities
worldwide. To accomplish the goals of this plan, we are building a global infrastructure centered on five locations
by adding operations in three regions in addition to the existing bases in Japan and the United States. We
established operations in India in 2019, Italy in 2020 and will start work on establishing a base of operations in
China in 2022.
The fiscal year ending in February 2023 is the final year of the Eighth Medium -term Management Plan. When
this plan was established, the targets for the final year were consolidated sales of 20,100 million yen andoperating profit of 1,400 million yen.
In the machinery business, we believe that orders will be consistently high because of orders carried over fromthe previous fiscal year and expenditures by Japanese generic drug manufacturers for factory expansions andpurchases of production machinery.
However, we foresee a continuation of the negative effects of supply chain disruptions outside Japan and theassociated delays in the procurement of various parts and materials. In Japan as well, there are difficulties
involving the procurement of semiconductors and other parts and materials and there are still no signs of when
this situation will improve. Furthermore, we are raising selling prices as much as possible to pass on the higher
cost of raw materials, but we expect a gap between the increase in expenses and the benefit of higher selling
prices. Consequently, our forecasts for the fiscal year ending in February 2023 refle ct a cautious stance about thebusiness climate.
Based on this outlook, we expect sales to increase 4.9% year-over-year to 18,500 million yen and operating profit,

4

Freund Corporation (6312) Financial Results for FY2/22

ordinary profit, and profit attributable to owners of parent to decrease 28.7%, 30.3% and 17.2% to 700 million
yen, 720 million yen, and 450 million yen, respectively.
This forecast is based on the premise that the impact of the COVID-19 crisis will slowly decline and finally cometo an end by February 2023.
For the performance of foreign subsidiaries, we assume an average exchange rate of 120 yen to the U.S. dollar
and 130 yen for the euro during the fiscal year.
(5) Basic Policy for Profit Distribution, and Dividends in the Current and Next Fiscal Years
Maximizing shareholder value is the highest priority of Freund. Our policy is to use the benefits of higher
shareholder value for earnings distributions to shareholders while retaining earnings for making the company
stronger in order to adapt swiftly and accurately to changes in the operating environment.
The basic policy for the distribution of earnings is to make distributions based on results of operations. The target
for the annual consolidated dividend payout ratio is 30%. We will maintain stable distributions while taking into
account the need for retained earnings in order to build a stronger base of operations and take actions aimed at
growth.
For the fiscal year that ended in February 2022, we plan to pay an ordinary year-end dividend of 20 yen per share,
which is the same as for the previous fiscal year. Although earnings decreased, we are basing the dividend on ourpolicy of paying a consistent and stable dividend. As a result, the payout ratio will be 61.6%, which is higher thanour target of 30%.
For the fiscal year ending February 2023, we plan to pay an ordinary year-end dividend of 20 yen per share.
We will use retained earnings in the fiscal year ended February 28, 2022 for making our operations stronger,
entering new business domains and other activities that contribute to future growth.
2. Basic Approach to the Selection of Accounting Standards
The Freund Group has a policy of preparing its consolidated financial statements using Japanese GAAP to permit
comparisons with other fiscal years as well as comparisons with the performance of other Japanese companies.

5

Freund Corporation (6312) Financial Results for FY2/22

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet(Thousands of yen)
FY2/22(As of Feb. 28, 2022)

FY2/21(As of Feb. 28, 2021)
AssetsCurrent assets
Cash and deposits

4,498,482

4,145,207

Notes and accounts receivable-trade

4,659,895

4,902,513

Electronically recorded monetary claims-operating

210,221326,231

Securities

212,500-

Merchandise and finished goods

798,624

667,070

Work in process

1,457,682

2,390,278

Raw materials and supplies

1,217,155

2,032,755

Prepaid expenses

151,597

211,030

Other

362,421341,948

Allowance for doubtful accounts(10,342)(12,624)

13,558,237

15,004,411

3,940,707

4,103,299

Accumulated depreciation(1,924,716)(2,088,393)

Buildings and structures, net

2,015,990

2,014,906

Machinery, equipment and vehicles

2,474,831

2,725,284(1,647,906)(1,859,522)

826,924865,761

1,159,307

1,141,676

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

Accumulated depreciation
Machinery, equipment and vehicles, net
LandConstruction in progress

349,369

177,492

1,522,699

1,621,454(1,139,664)(1,258,329)

383,035

363,125

4,734,626

4,562,962

Goodwill

658,901

643,241

Software24,13831,945-224,080

Customer-related assets

533,084

472,554

Other

75,65963,008

1,291,783

1,434,830

Investment securities

334,321592,710

Business insurance funds

269,227

269,227

Deferred tax assets

187,885

235,394

Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets

Software in progress

Total intangible assets
Investments and other assets

Retirement benefit asset

1,251

429

Other

203,302179,337

Allowance for doubtful accounts(5,400)(5,400)Total investments and other assets
Total non-current assets
Total assets

6

990,588

1,271,699

7,016,998

7,269,492

20,575,235

22,273,904

Freund Corporation (6312) Financial Results for FY2/22

FY2/21(As of Feb. 28, 2021)(Thousands of yen)
FY2/22(As of Feb. 28, 2022)

Liabilities
Current liabilities
Notes and accounts payable-trade

1,754,454

1,767,452

Electronically recorded obligations-operating

1,212,083

976,189

Short-term borrowings

55,793

27,180

Income taxes payable245,299

256,087

Accrued expenses

379,357

340,643

Advances received

1,170,091

2,805,781

258,586

252,662

43,15629,918

698,606

579,858

5,817,429

7,035,774

Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Other
Total current liabilities
Non-current liabilities
Long-term accounts payable-other

34,68936,314

Lease obligations

394,370

376,253

Retirement benefit liability

280,598

316,216

Asset retirement obligations
Provision for retirement benefits for directors (andother officers)
Other

46,472

67,13023,697

6,591

118,991

80,847

Total non-current liabilities
Total liabilities

898,820883,353

6,716,249

7,919,127

1,035,600

1,035,600

Net assets
Shareholders’ equity
Share capital
Capital surplus

1,289,513

1,289,513

Retained earnings

12,600,004

12,808,681

Treasury shares(773,363)(773,363)

Total shareholders’ equity

14,151,755

14,360,432

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

7

22,14939,688(330,648)(37,972)

15,729(7,371)(292,769)(5,655)

13,858,986

14,354,776

20,575,235

22,273,904

Freund Corporation (6312) Financial Results for FY2/22(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income

Net sales

FY2/21(Mar. 1, 2020 – Feb. 28, 2021)
16,765,389(Thousands of yen)
FY2/22(Mar. 1, 2021 – Feb. 28, 2022)
17,632,243

11,126,271

11,620,336

Cost of sales
Gross profit

5,639,118

6,011,906

Selling, general and administrative expenses

4,528,057

5,030,033

Operating profit

1,111,060

981,872

Interest income

3,667

824

Dividend income

7,023

7,210

Technical support fee income

9,881

12,979Non-operating income

Rental income

1,297

1,285

Insurance claim income
Foreign exchange gains

152,876

3,357-

16,568Other

33,364

22,127

Total non-operating income

208,11164,353

Interest expenses

2,008

10,672Compensation expenses

1,199

-

Foreign exchange losses

5,782

-

Other

1,858

2,774

Non-operating expenses

Total non-operating expenses

10,84813,446

1,308,323

1,032,779

25,748

2,083

-

1,298

25,7483,381

Loss on retirement of non-current assets

36,396

4,558

Loss on sale of non-current assets

7,546

795

Impairment losses

3,631

75,353-

126,984

47,574

207,692

Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses

Settlement-related costs
Total extraordinary losses
Profit before income taxes

1,286,497

828,469

Income taxes-current

315,532

376,098

Income taxes-deferred369(91,196)

Total income taxes

315,902

284,902

Profit970,595

543,566

Profit attributable to owners of parent

970,595

543,5668

Freund Corporation (6312) Financial Results for FY2/22

Consolidated Statement of Comprehensive Income
FY2/21(Mar. 1, 2020 – Feb. 28, 2021)(Thousands of yen)
FY2/22(Mar. 1, 2021 – Feb. 28, 2022)

970,595

543,566

8,469

17,538(31,899)

290,668

2,761(23,101)-

2,007

ProfitOther 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 ofparent9(20,667)

287,114949,927

830,680

949,927

830,680

Freund Corporation (6312) Financial Results for FY2/22(3) Consolidated Statement of Changes in Equity
FY2/21 (Mar. 1, 2020 – Feb. 28, 2021)(Thousands of yen)
Shareholders’ equity
Share capital
Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

Capital surplus

1,035,600

1,289,513

Retained earnings

Treasury shares

Total shareholders’equity11,964,299(773,363)

13,516,050-

1,035,600

1,289,513

11,964,299(773,363)

13,516,050

Changes during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period(334,890)(334,890)

970,595

970,595---

635,705-

635,705

1,035,600

1,289,513

12,600,004(773,363)

14,151,755(Thousands of yen)

Accumulated other comprehensive income
Valuation
Total accumulated
Foreign currency Remeasurements
difference onothertranslationof defined benefit
available-for-salecomprehensive
adjustment
plans
securities
incomeBalance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

13,680(298,749)

12,967(272,101)

Total net assets

13,243,948-

13,680(298,749)

12,967(272,101)

13,243,948

Changes during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period(334,890)
970,595
8,469(31,899)

2,761(20,667)(20,667)

8,469(31,899)

2,761(20,667)

615,037

22,149(330,648)

15,729(292,769)

13,858,986

10Freund Corporation (6312) Financial Results for FY2/22

FY2/22 (Mar. 1, 2021 – Feb. 28, 2022)(Thousands of yen)
Shareholders’ equity
Share capital
Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

Capital surplus

1,035,600

1,289,513

Retained earnings

Treasury shares

Total shareholders’equity12,600,004(773,363)

14,151,755-

1,035,600

1,289,513

12,600,004(773,363)

14,151,755

Changes during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period(334,890)(334,890)

543,566

543,566---

208,676-

208,676

1,035,600

1,289,513

12,808,681(773,363)

14,360,432(Thousands of yen)

Accumulated other comprehensive income
Valuation
Total accumulated
Foreign currency Remeasurements
difference onothertranslationof defined benefit
available-for-salecomprehensive
adjustment
plans
securities
incomeBalance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

22,149(330,648)

15,729(292,769)

Total net assets

13,858,986-

22,149(330,648)

15,729(292,769)

13,858,986

Changes during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period(334,890)
543,566
17,538292,676(23,101)

287,114287,114

17,538292,676(23,101)

287,114495,790

39,688(37,972)(7,371)(5,655)

14,354,776

11

Freund Corporation (6312) Financial Results for FY2/22(4) Consolidated Statement of Cash Flows
FY2/21(Mar. 1, 2020 – Feb. 28, 2021)(Thousands of yen)
FY2/22(Mar. 1, 2021 – Feb. 28, 2022)

1,286,497
461,891
3,631
16,5791,199(152,876)
20,963

828,469
570,385
75,35374,180(3,357)
126,984(7,613)37,127(13,788)250(10,691)
2,008
1,091
(18,202)36,396
674,520(112,902)
190,585(340,684)
110,119
83,116(10,467)

1,668(8,035)
10,672(12,185)(1,287)(1,298)4,558(299,214)(1,430,220)
17,908(154,909)
1,565,469(150,896)
130

Subtotal

2,280,153

1,192,973

Interest and dividends received
Interest paid
Proceeds from insurance income
Income taxes refund
Income taxes paid
Settlement-related costs paid
Other, net
Net cash provided by (used in) operating activities

10,691(2,008)152,876
7,121(174,019)
5,659
2,280,475

8,035(10,672)
3,357
10,146(394,188)(110,721)
3,000
701,930(1,106,137)-(4,700)(469,320)
88,986(460,797)
22,191(4,410)(2,068)(8,321)(3,558)(28,729)
21,695(236,970)(232,927)
7,883
(984)
410

-

222,980

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment losses
Amortization of goodwill
Payment compensation costs
Insurance claim income
Settlement-related costs
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for
directors (and other officers)
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sale of property, plant and equipment
Loss (gain) on sale of investment securities
Loss on retirement of property, plant and equipment
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in other assets
Increase (decrease) in trade payables
Increase (decrease) in advances received
Increase (decrease) in other liabilities
Other, net

Cash flows from investing activities
Expenditures for acquisition of equity in subsidiaries
resulting in change in scope of consolidation
Payments for asset retirement obligations
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
Proceeds from sale of investment securities
Payments of guarantee deposits
Proceeds from refund of guarantee deposits
Proceeds from withdrawal of negotiable certificates ofdeposit
Payments into negotiable certificates of deposit
Net cash provided by (used in) investing activities

12(211,950)-(1,726,445)(680,282)

Freund Corporation (6312) Financial Results for FY2/22

FY2/21(Mar. 1, 2020 – Feb. 28, 2021)(Thousands of yen)
FY2/22(Mar. 1, 2021 – Feb. 28, 2022)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings(27,470)(30,039)

Proceeds from long-term borrowings-

25,982

Repayments of long-term borrowings-(7,477)(9,141)(39,759)-(41,224)(333,793)(335,128)

Repayments of lease obligations
Purchase of shares of subsidiaries not resulting inchange in scope of consolidation
Dividends paid
Other, net(1,560)-Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents(371,966)(427,646)

2,296

52,724

184,359(353,274)

Cash and cash equivalents at beginning of period

4,314,123

4,498,482

Cash and cash equivalents at end of period

4,498,482

4,145,20713

Freund Corporation (6312) Financial Results for FY2/22(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Changes in Accounting Policies
Not applicable.
Additional Information
Effect of COVID-19 on accounting estimates
The Freund Group uses information that is available when the consolidated financial statements are prepared forthe determination of accounting estimates for the impairment of non -current assets and other items. Predicting theseverity of the pandemic and when this crisis will end are impossible at this time. Our current assumption is thatthe severity of the pandemic will slowly decline during the fiscal year ending in February 2023 and that theeffects of the pandemic on our operations will not be significant.
There are still many uncertainties concerning the pandemic. If there is an increase in the number of infections that
restricts economic and social activities resulting in an unexpectedly challenging business climate, there may be aneffect on the Freund Group’s financial position and results of operations.
Business Combinations
Finalization of provisional accounting treatment for business combinations
A provisional accounting treatment was used at the end of the previous fiscal year for the Freund Group’s
acquisition of Cos.Mec S.r.l on November 5, 2020, and this treatment was finalized in the current fiscal year.
Based on the finalization of this provisional accounting treatment, a material review has been reflected in the
allocated amount of the acquisition cost in the comparative information included in the consolidated financial
statements for the current fiscal year as follows.
Goodwill prior to this review includes an adjustment due to an additional payment associated with the finalizationof the acquisition payment with conditions that was recorded in the first quarter of the current fiscal year.
Revisions to allocations(Thousands of yen)

Goodwill (before adjustment)

1,131,631

Intangible assets (Customer-related assets)(568,698)

Deferred tax liabilities

136,487

Total adjustments(432,210)

Goodwill (after adjustment)
Goodwill amortization method and period:

699,420
10 years using the straight-line method

Weighted average amortization period for the total amount allocated to intangible assets other than goodwill andmajor categories
Intangible assets (Customer-related assets)

15 years

Intangible assets (Order backlog)

0.5 years

Total

13 years

14

Freund Corporation (6312) Financial Results for FY2/22

Segment and Other Information
Segment information
1. Overview of reportable segment
The reportable segments of the Freund Group are components for which discrete financial information isavailable and whose operating results are regularly reviewed by the Board of Directors to make decisions about
resource allocation and to assess performance.
The primary business activities of the Freund Group are the manufacture and sale of machinery and chemical
products. Consequently, the Freund Group has two reportable business segments: the Machinery Business and theChemicals Business.
Main products and services of each reportable segment
Machinery Business:

Granulating devices; construction of granulating machinery plants; measuring
instruments and parts; and outsourced granulation of synthetic resins

Chemicals Business:

Pharmaceutical excipients and dietary supplements; food preservatives; R&D,
formulation studies and other projects for pharmaceuticals, food, chemicals andother products; and development and technology licensing of new dosage forms ofpharmaceutical products

2. Calculation method for net sales, profit or loss, assets, liabilities, and other items for each reportable segment
The accounting methods used for reportable segments are generally the same as those adopted for preparation of
the consolidated financial statements.
Segment profit (loss) for reportable business segments is based on operating profit (loss).
Inter-segment sales are based on prices used for third-party transactions.
3. Information related to net sales, profit or loss, assets, liabilities, and other items for each reportable segment
FY2/21 (Mar. 1, 2020 – Feb. 28, 2021)(Thousands of yen)

Reportable segment
Machinery
Chemicals
Business
BusinessAmounts shown on
consolidated financial
statements (Note 2)

Adjustment(Note 1)Total

Net sales
External sales
Inter-segment sales andtransfers

11,171,415

5,593,974

16,765,389-

16,765,389

-

-

-

-

-

11,171,415

5,593,974

16,765,389-

16,765,389

Segment profit

1,047,726

546,112

1,593,838(482,777)

1,111,060

Segment assets

11,688,980

4,234,078

15,923,059

4,652,176

20,575,235

Total

Other items
Depreciation
307,242
148,937
456,179
5,711
461,891
Increase in property, plant and954,984
203,940
1,158,925
11,407
1,170,332
equipment and intangible assets
Notes: 1. Adjustments include the following items.
(1) The negative adjustment of 482,777 thousand yen to segment profit is corporate expenses that are notallocated to any of the reportable segments. Corporate expenses mainly consist of general and administrative
expenses that are not attributable to any of the reportable segments.
(2) The 4,652,176 thousand yen adjustment to segment assets is corporate assets that are not allocated to any of
the reportable segments. Corporate assets mainly consist of Freund’s surplus funds (cash and deposits),
long-term investment funds (investment securities and insurance funds), and assets of the administrative
operations of Freund.
(3) The 5,711 thousand yen adjustment to depreciation is mainly depreciation of corporate assets that are notallocated to any of the reportable segments.
(4) The 11,407 thousand yen adjustment to increase in property, plant and equipment and intangible assets ismainly the sum of corporate assets that are not allocated to the reportable segments.
2. Segment profit is adjusted to be consistent with operating profit recorded in the consolidated statement ofincome.

15

Freund Corporation (6312) Financial Results for FY2/22

3. Segment information for FY2/21reflects the revision of the information in “Finalization of provisional
accounting treatment of business combinations” in “(5) Notes to Consolidated Financial Statements (Business
Combinations).”
FY2/22 (Mar. 1, 2021 – Feb. 28, 2022)(Thousands of yen)

MachineryBusiness

Reportable segment
Chemicals
BusinessAmounts shown on
consolidated financial
statements (Note 2)

Adjustment(Note 1)Total

Net sales
External sales
Inter-segment sales andtransfers
Total

11,836,513

5,795,729

17,632,243-

17,632,243

-

-

-

-

-

11,836,513

5,795,729

17,632,243-

17,632,243

Segment profit

623,434

884,892

1,508,326(526,454)

981,872

Segment assets

13,630,268

4,707,537

18,337,806

3,936,098

22,273,904

Other items
Depreciation
421,367
143,884565,251
5,133
570,385
Investment in equity-method
236,218
236,218
236,218
affiliate
Increase in property, plant and
338,721
190,059
528,780
43,024
571,805
equipment and intangible assets
Notes: 1. The adjustment includes the following items.
(1) The negative adjustment of 526,454 thousand yen to segment profit is corporate expenses that are notallocated to any of the reportable segments. Corporate expenses mainly consist of general and administrative
expenses that are not attributable to any of the reportable segments.
(2) The 3,936,098 thousand yen adjustment to segment assets is corporate assets that are not allocated to any of
the reportable segments. Corporate assets mainly consist of Freund’s surplus funds (cash and deposits),
long-term investment funds (investment securities and insurance funds), and assets of the administrative
operations of Freund.
(3) The 5,133 thousand yen adjustment to depreciation is mainly depreciation of corporate assets that are notallocated to any of the reportable segments.
(4) The 43,024 thousand yen adjustment to increase in property, plant and equipment and intangible assets ismainly the sum of corporate assets that are not allocated to the reportable segments.
2. Segment profit is adjusted to be consistent with operating profit recorded in the consolidated statement ofincome.

Related information
FY2/21 (Mar. 1, 2020 – Feb. 28, 2021)
1. Information by product or service
This information is omitted because the same information is presented in segment information.
2. Information by region(1) Net sales(Thousands of yen)

Japan

US

Latin America

12,089,840

1,571,995

Asia

Europe642,0031,304,285

702,471

Other
454,793

Note: 1. Classification of net sales is based on the location of the client and categorized by country or region.

(2) Property, plant and equipment
Japan2,988,811

US
1,158,830(Thousands of yen)
Italy

Total

586,985

4,734,626

3. Information by major client
Not applicable.

16

Total
16,765,389

Freund Corporation (6312) Financial Results for FY2/22

FY2/22 (Mar. 1, 2021 – Feb. 28, 2022)
1. Information by product or service
This information is omitted because the same information is presented in segment information.
2. Information by region(1) Net salesJapan
12,503,682(Thousands of yen)

US

Latin America

1,388,615

EuropeAsia

1,009,661

1,516,878

882,062

Other
331,342

Total
17,632,243

Note: 1. Classification of net sales is based on the location of the client and categorized by country or region.

(2) Property, plant and equipment
Japan2,790,103

US
1,186,308(Thousands of yen)
Italy

Total

586,550

4,562,962

3. Information by major client
Not applicable.
In FY2/22, net sales included in “Other” in prior periods were reclassified into “Asia” and “Other” in association
with revisions to administrative segments. For consistency with these changes, figures presented in “2.
Information by region, (1) Net sales” for FY2/21 have been revised.
As a result, “Other” of 1,759,078 thousand yen previously presented in information by region (net sales) for
FY2/21 is reclassified and divided into “Asia” of 1,304,285 thousand yen and “Other” of 454,793 thousand yen.
Information related to impairment losses on non-current assets for each reportable segment
FY2/21 (Mar. 1, 2020 – Feb. 28, 2021)
There was no impairment loss allocated to reportable segments. The amount of impairment losses related to
non-current assets that was not allocated to these segments was 3,631 thousand yen.
FY2/22 (Mar. 1, 2021 – Feb. 28, 2022)
The Company has recognized impairment losses related to non-current assets of 25,658 thousand yen in the
Machinery Business segment and 49,694 thousand yen in the Chemicals Business segment.
Information related to goodwill amortization and the unamortized balance for each reportable segment
FY2/21 (Mar. 1, 2020 – Feb. 28, 2021)
Goodwill amortization of 16,579 thousand yen was recorded in the Machinery Business segment. Unamortizedbalance of this goodwill was 658,901 thousand yen.
FY2/22 (Mar. 1, 2021 – Feb. 28, 2022)
Goodwill amortization of 74,180 thousand yen was recorded in the Machinery Business segment. Unamortizedbalance of this goodwill was 643,241 thousand yen.
Information related to gain on bargain purchase for each reportable segment
Not applicable.

17Freund Corporation (6312) Financial Results for FY2/22

Per Share Information(Yen)
FY2/22(Mar. 1, 2021 – Feb. 28, 2022)
857.28

FY2/21(Mar. 1, 2020 – Feb. 28, 2021)
827.67

Net assets per share

57.96
32.46
Net income per share
Notes: 1. Diluted net income per share is not presented since the Company has no outstandi ng dilutive shares.
2. The basis of calculating the net income per share is as follows:(Thousands of yen)
FY2/21
FY2/22(Mar. 1, 2020 – Feb. 28, 2021) (Mar. 1, 2021 – Feb. 28, 2022)
970,595
543,566
Profit attributable to owners of the parent
Amounts not attributable to common shareholders
Profit attributable to common shareholders of parent
Average number of common shares outstanding during
the period (Thousand shares)--

970,595

543,566

16,744

16,744

Subsequent Events
Not applicable.
4. Others
Orders and Sales(1) Orders received
Operating segment

FY2/21(Mar. 1, 2020 – Feb. 28, 2021)
AmountYear-on-year (%)(Thousands of yen)
FY2/22(Mar. 1, 2021 – Feb. 28, 2022)
AmountYear-on-year (%)

Machinery Business
12,386,712
121.1
15,621,186
126.1
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.
3. Orders received do not include consumption taxes.

(2) Order backlog
Operating segment

FY2/21(Mar. 1, 2020 – Feb. 28, 2021)
AmountYear-on-year (%)(Thousands of yen)
FY2/22(Mar. 1, 2021 – Feb. 28, 2022)
AmountYear-on-year (%)

Machinery Business
6,615,881
140.9
10,574,211
159.8
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. Order backlog does not include consumption taxes.

(3) Sales
Operating segment
Machinery Business

FY2/21(Mar. 1, 2020 – Feb. 28, 2021)(Thousands of yen)
FY2/22(Mar. 1, 2021 – Feb. 28, 2022)

AmountAmountComposition (%)

11,171,415

66.6

11,836,513

Composition (%)
67.1

Chemicals Business

5,593,974

33.4

5,795,729

32.9

Total

16,765,389

100.0

17,632,243

100.0

Notes: 1. Sales are based on selling prices; inter-segment transactions have been eliminated.
2. Sales do not include consumption taxes.
This 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 of readers
who prefer an English translation.

18