Financial Results for the First Quarter
Fiscal Year Ending December 2017
Investor Relations Presentation Materials

ISEKI & CO., LTD.
Shirou Tomiyasu,
Director & Executive Vice President
May 19, 2017

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

Index

1. Outline of Financial Results for the First Quarter
Fiscal Year Ending December, 2017
2. Recent Development in Domestic and Overseas
Markets
3. Performance Forecast for the Fiscal YearEnding December, 2017

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

21.Outline of Financial Results of the First QuarterFiscal Year Ending December, 2017
(Billions of yen)

Net Sales【Restatedbasis】
ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

*Points of First Quarter Business Performance Sales from the consolidated sales companies
showed signs of recovery
 Contract basis: 107% year on year

Manufacturing subsidiary in Indonesia, which hadrecorded losses since its founding, turned profitableProfitability in an equity-method affiliate in China
improved substantially.

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

4Outline of First Quarter Business Performance(JPY bn,%)

1Q of FY ended
Dec.16

1Q of FY ending
Dec.17yoychange

Diff.
(Target/Actual)

Actual％Actual％Net Sales

37.7

100.0

36.7

100.0

( 1.0 )

( 0.1 )

(Domestic)

28.2

74.8

28.5

77.7

0.3

( 0.3 )

(Overseas)

9.5

25.2

8.2

22.3

( 1.3 )

0.2

Operating Income( 0.4 )

(1.1)

( 0.3 )

(0.8)

0.1

0.5

Ordinary Income( 0.7 )

(1.9)

( 0.4 )

(1.1)

0.3

0.5

Profit (Loss) attributableto owners of parent( 0.6 )

(1.6)

( 0.6 )(1.6)-0.4

Exchange

US$117.3

113.7( 3.6 )

( 1.3 )

rateEuro

128.1

121.5

( 6.6 )

1.5

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

5Breakdown of Domestic Sales(JPY bn,)
1Q of FY ended
Dec.16

1Q of FY ending
Dec.17

ActualActualyoychangeNote

Diff.
(Target/Actual)

7.6( 0.1 ) Tractors :(0.1)

Planting Machinery

2.4

1.9

( 0.5 )

Harvesting &Processing Machinery

3.03.0-

0.1

13.1

12.5

( 0.6 )

-Farming Implements

4.4

4.70.3-Spare parts

2.72.7--

Repair fees

1.01.0--8.1

8.40.3-

Total

21.2

20.9

( 0.3 )-

Construction of Facilities

2.12.80.7-

Others

4.94.8( 0.1 )

( 0.3 )

Total

28.2

28.5

0.3

( 0.3 )

Agricultural Machinery

7.7

Agricultural Machinery Related

Cultivating &Mowing Machinery

Total

Total

Rice trans planters:(0.4)

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials( 0.1 )
-6

Breakdown of Overseas Sales(JPY bn,)
1Q of FY ended
Dec.16

1Q of FY ending
Dec.17

ActualActualyoychange
Note

Diff.
(Target/Actual)

0.1

North America

2.5

1.0

( 1.5 ) Tractors:(1.4)

Europe3.1

1.9( 1.2 ) Lawn mowers:(0.6)

China

1.5

1.7

0.2

Rice transplanters:0.3

0.1

ASEAN

0.7

1.3

0.6

Combineharvesters:0.6

0.6

Others

1.0

1.3

0.3

Tractors:0.2

Product Sales Total

8.8

7.2

( 1.6 )

( 0.2 )

Parts & Others

0.7

1.0

0.3

0.4

Total

9.5

8.2

( 1.3 )

0.2

Tractors:(0.6)( 1.0 )-※The subsidiary in France only adopts the end of September as its fiscal year end. (The results from Oct. to Dec. are posted for the 1st quarter.)
ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

7

Operating Income(JPY bn, %)科 目

1Q of FY
1Q of FY
endedending
16/12期Dec.16
1Q 17/12期Dec.17
1Q
Actual実 績Actual実 績

Diff.
(Target/Actual)

前期比

計画比増 減増 減

37736.7 (1.0)△377＋0Gross Profit
売上総利益10.5105

10.1 △105(0.4)

(0.1)
＋0

粗利率
MarginGross Profit

27.8%
27.8%

27.5%

(0.3%)(0.2%)

販管費

10910.9

10.4 △109(0.5)＋0(0.6)＋0(0.2)＋0(0.3)＋0＋0＋4＋0Net Sales

売上高

S.G&A.Expenses

人件費
Personnel
expenses

その他経費等
Otherexpenses

営業利益

OperatingIncome

37.7

yoyChange

6.3
4.6

△46.1
4.3

(0.3)

( 0.4 ) ( 0.3 ) 0.1【Factors of YoY change(JPYbn,)】

Operating Income
＋0.1

(0.1)

(0.3)
0.5

Operating
Income(0.4)

Decrease ingross profit

Reduced
SG&A

(0.4)

0.5

OperatingIncome(0.3)

1Q of FY
endingDec.17

1Q of FY
ended
Dec.16【Effects of forex move(JPYbn,)】
Net sales

Cost ofsales

S.G&A.
Expenses

OperatingIncome

(0.2)

0.2

00

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

8Ordinary Income and Net Income(JPY bn,)
1Q of FY
ended
Dec.16

1Q of FY
endingDec.17

ActualActualOperating Income(0.4)

Balance of Financial Income

yoyChangeDiff.
(Target/Actual)

(0.3)

0.1

0.5

(0.2)

(0.2)

--

Other Non-operating Income

(0.1)

0.1

0.2-

Ordinary Income

(0.7)

(0.4)

0.3

0.5

Extraordinary Income0.4-(0.4)-----

Income before
Income Taxes

(0.3)

(0.4)

(0.1)

0.5

Taxes, Deferred Taxes

(0.3)

(0.2)

0.1

(0.1)

Profit(Loss) attributableto owners of parent

(0.6)

(0.6)

-

0.4

Extraordinary Losses【 Factors of YoY change(JPYbn,)】Non-operating Income
Decrease in foreign exchange losses

0.1

Upturn in the share of profit or lossof entities using the equity method

0.1

Extraordinary Income
Lack of gain on sales of investment
securities recorded in the prev. FY

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

(0.4)

9

Balance Sheet(JPY bn,)

As ofMar.16As(単位：億円)
ofyoychange
Mar.17(6.5) Accounts Payables

41.2

44.5

3.3

33.2

2.5

Interest Bearing Liabilities

80.0

77.1

(2.9)

49.3

54.2

4.9

（loans payable）

71.0

69.2

(1.8)

（Merchandise and finished goods）

42.2

46.5

4.3

Other Liabilities

24.4

23.4

(1.0)

Other Current Assets

4.6

4.9

0.3

145.6

145.0 (0.6)

Total Current Assets

99.8

101.0

1.2

Net Assets

Non-current Assets

98.1

97.4

(0.7)

66.0

65.9(0.1)

Investments and other assets

13.7

12.5(1.2) (Retained earnings)

12.6

13.1

0.5

1.1

1.1-1.1

0.8(0.3)

As of
Mar.16

As ofMar.17

Cash & Deposits

15.2

8.7

Accounts Receivables

30.7

Inventories

6.1

yoychange(0.3)

Total Liabilities(Valuation difference on
available-for-salesecurities)(Investment securities)

6.4

Total Non-current Assets

111.8

109.9 (1.9) translation adjustment)

Total Assets

211.6

210.9 (0.7)(Foreign currency

Total Liabilities and Net
Assets

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

211.6

210.9 (0.7)
102.Recent Development in Domestic andOverseas Markets

Rice transplanter with straight-travel assist system(To be released in Dec. 2017)
ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

Trend of Domestic Market
Agricultural machinery demand [Industry shipment](9 principal machinery, moving annual total)(JPY bn,)
400

4th emission gas regulation

3rd emission gas regulation▼102-177PS ▼76-102PS ▼50-76PS(13/Nov.)(14/Apr.)(14/Nov.)▼26-50PS(15/Sep.)

・102-177PS
・76-102PS▼(17/Sep.)

350

300
Last-minute demand- Emission gas reg.

250

0200

- Consumption tax hike

Reactionary decline fromlast-minute demandMar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep.
2013
2014
2015
2016
2017

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

12Industry Shipments and Sales Result
Growth rate of 9 principal products(year-on year) our estimate(%)

Mar.14Mar.15Mar.16

Mar.17

IndustryShipment value

12767

98

101

ISEKI

Sales Value

11773

107

91

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

13

Our Commitments for domestic market
Enhance proposals for growing market“Changes in agricultural structure”
Large-scalefarming

Advancedtechnologies

Crop conversion<Growth rate of sales amount of large machinery and vegetable machinery(Jan.-Mar.)>Tractors(75hp or above)

Vegetable machinery

１４０％

１５４％

2016

2017

2016

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

2017
14

Our commitments to “new agricultural era”
To realize “dreamful” =profitable farming
1. Launching products with basic features & low-price

2. Reducing production material costs
3. Mechanization of vegetable farming machinery
4. Application of advanced technologies

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

15

Launch products / basic features & low price〇 2-line configuration<Ex. tractors>
Basic Line

Large
sized

TJX Series

TJV3 Series

77 PS

 78 PS

Approx. 1.66
million yen

8,791 (thou yen)
NTA3 Series

NT3 Series

 34 PS

34 PS
4,157 (thousand yen)

Small
sized

Price diff.

(19％)

7,128 (thousand yen)

Midsized

Std./Premium Line(12%)

4,707 (thou yen)

Z15TM5 Series

15 PS 16 PS

1,220 (thousand yen)

Approx. 0.55
million yen

Approx.0.41
million yen(25％)

1,633 (thou yen)

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

16Tsukuba-Mirai office opened in March
Dream Agricultural
Research Institute(Yume-Soken)

Vegetable farming
exhibit space

Advanced agri-businesstechnologies

Vegetablefarming

Recently opened

ISEKI Global Training
Center (IGTC)

Technicalservices

Propose & Support “New agriculture era”
ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

17Recent Market Trend in Overseas（JPY bn）

3530

FY Dec.17 Forecast(Announced on Feb. 14)
JPY 33.6 billion

2520
FY Dec./16 Actual15

JPY 28.2 billion

10Orders*

50
Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec.
※FY ending Dec.17 Orders(Jan.-Jul):The results of “Parts & Others” are not included.

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

18Market Trend (North America)
1. Trend in the market
Category(PTO HP)(Unit: 1000)

Utility Tractors(PTO 40HP or above, 100HPor below)
USA

CanadaJan-Mar,2016

121Jan-Mar,201711Growth rate

96%

Compact Tractors(PTO 40HP or below)
USA

Canada132322511226229117%

98%

114%

140%

116%

2. Situation of AGCO (OEM partner)
Unit sales (17/ Jan. -Mar. ): higher than last year
Utility tractors
Compact tractors : higher than last year

Net Sales in North America(ISEKI AGCO)

3. Our situation(Actual: 10.7)

Change in businessterms with AGCO(Forecast)

Order & shipment (17/ Jan. – Jul.) : lower than the plan
We expect orders to be increased in the 2nd half due torobust sales of compact tractors.
ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

19Market Trend (Europe)
1. Trend in the market
Landscaping market: weather is favorable. Demand for garden products is expected
to grow

2. Situation of distributors
Net Sales in Europe

 Unit sales

Change in sales
method• Distributors (Jan.-Mar.): higher than last year

(Forecast )(Actual: 9.3)

• ISEKI France S.A.S. (Jan.-Mar.) : higher than last year
(Consolidated subsidiary) (Oct.-Mar.): in line with the prev. year

3. Our situation
Order & shipment (17/ Jan.-Jul.) : lower than the plan

•Sales in the 1st qtr. declined as the method of recording sales changed in France.
•Sales in distributors remain robust. We expect orders to be increased in the 2nd half.

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials*Sales from ISEKI to distributors(Jan.-Mar.)and those from French subsidiary(Oct,Dec.) are consolidated in the 1st qty.

20

Market Trend (ASEAN: Thailand)
1. Trend in the market
Rice price has been sluggish. Situation surrounding farmers remains harsh.

2. Situation of ISEKI (Sales) Thailand(Mitsubishi Corporation 80%, ISEKI 20% invested)

ASEAN strategy tractors• Unit sales (17/ Jan.-Mar.): higher than last year

•Acquired dealers are launching sales of ISEKI
tractor in the 2nd half.
•We will expand sales of all-purpose combine
harvesters which we introduced last year.

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

21Market Trend (ASEAN: Others)
1. Situation by country
Indonesia
Market trend: government has supported the introduction of agricultural machinery since 2015.
Our situation: the number of orders for all-purpose combine harvesters launched last year remain favorable.

VietnamMarket trend: demand expected to rise as agricultural machinery prevails in the market.
Our situation: the number of orders for all-purpose combine harvesters exceeded the plan and the previous year.

2. ASEAN summary

Trend of our sales (ASEAN)(Actual:3.0)(Forecast)Demand expected to grow
ISEKI THAILAND (local subsidiary) starts
operations of spare parts center from the end ofMay
Strengthen after-sales servicesISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

22Market Trend (China)
1. Trend in Chinese Market
Large-scale, high-efficient and advanced machinery have been subsidized more.
(Yuan bn)Government subsidy
2012

2013

2014

2015

2016

2017

21.5

21.8

23.8

23.8

23.7

18.6
Trend of sales of Dongfeng Iseki(Yuan base)

2. Situation of Dongfeng Iseki（Yuan milion）

Sales of Dongfeng Iseki (17/Jan.-Mar.)
２．当社の状況Rice transplanters (ride-on): higher than last year

400（Actual:622）

350

315

300
250
200
150

Combine harvesters: higher than last year

192

153
103

1005150* Excluding export to Southeast Asia from China

01Q

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

2Q
3Q
16/Dec.

4Q

1Q
17/Dec.

23

3.Performance Forecast For the Fiscal
Year Ending December, 2017High horsepower tractor for Chinese market

T954
ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

Performance Forecast for FY ending Dec.17
Performance forecast(JPY bn)

FY ended Dec.16
ActualFY ending Dec.17
Forecastyoy
Change2Q

Full year

2Q

Full year2Q

Full year

Net Sales

81.0

153.1

81.2

161.5

0.2

8.4

Operating Income

1.7

2.5

1.9

3.5

0.2

1.0

Ordinary Income

1.3

1.6

2.2

3.7

0.9

2.1

Profit attributableto owners of parent

0.6

0.9

1.3

2.7

0.7

1.8

*Forex rate assumption:¥115 to the US$,¥120 to the Euro

Foreign exchange sensitivity (Operating Income)FY ending Dec.17
US$13Euro

18(JPY million)

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

25

Notes on the Future Forecast• The objective of this presentation document is to provide information and never intends to induce
any action.
• The document was created by ISEKI with currently available information and it involves potential
risks and uncertainties. The forecast may not be consistent with actual results depending on
fluctuation of the economic situation and market trends.
• In using this information, investors are expected to depend on their own judgment. ISEKI is notliable for any losses incurred by investment decision made utilizing the business forecast or
targets given in this document.

ISEKI group is a promotional partner of FOOD ACTION NIPPON.

ISEKI Group joins the nationwide action called “COOL CHOICE”
run by the Ministry of the Environment Government of Japan,
which promotes to make ”smart choices” for the global warming.
As a proposal of “smart choices”, we develop and deliverenvironmental-friendly products like “eco products”.

ISEKI 1Q of FY ending Dec.17 Investor Relations Presentation Materials

26