Financial Results for the First Quarter
Fiscal Year Ending December 31, 2022

Investor Relations Presentation Materials

ISEKI & CO., LTD.
May 13, 2022

INDEX

1. Outline of Financial Results for the First Quarter
Fiscal Year Ending December 31, 2022
2. Domestic and Overseas Markets
3. Performance Forecast for the Fiscal Year Ending
December 31, 2022
4. Topics
Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

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1. Outline of Financial Results for the First Quarter
Fiscal Year Ending December 31, 2022

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

3

Key Points<First Quarter Financial Results>
Strong sales overseas, but domestic sales decreased due to the impact of a pullback
effect with withdrawal of subsidies and falling rice prices.

1Q Net Sales(JPY bn, %)36.8
Domestic:

Pullback effect with withdrawal of government subsidies forbusiness continuity, etc., which had stimulated demand in thesame period of the previous year.
Decrease in purchasing power due to falling rice prices

Overseas:

Sales increase in all regions
Strong sales in North America and Europe due to lifestyle changes

Earnings:

Decrease in gross profit due to lower sales
Soaring raw material prices put pressure on earnings
Maintained profitability below ordinary income, despite theusual deficit in the first quarter due to a period of low demand.

33.3

31.9

38.7
Domestic

41.4% Overseas
22.9% 23.8% 21.6% 30.2%
FY20181Q

FY20191Q

FY20201Q

FY2021
1Q

FY2022
1Q

1Q Operating Income, Ratio(JPY bn, %)(0.5)<Full-year Forecast>

40.4

1.4

(0.7)

[Operating Margin]

No revision to the initial forecast
Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

(0.2)
(1.1)

(1.6)% (2.2)% (3.5)%

3.7% (0.6)%

FY20181Q

FY2021
1Q

FY20191Q

FY20201Q

FY2022
1Q

4

Market & Business Environments in the First Quarter[Legend]  = Market environment = Business environment

Market & Business Environments
 Continued spread of COVID-19<Overall> Supply chain disruption (shortage of containers for marine transportation, delayed procurement of parts for production)
 Soaring raw material prices<Domestic>

 Impact on sales activities, including exhibition cancellations
 Pullback effect with withdrawal of government subsidies for business continuity, which had stimulated demand in thesame period of the previous year.

<Overseas> Increased demand due to lifestyle changes in North America and Europe

 Falling domestic rice prices (March 2020: ¥14,740/60kg ⇒ March 2021: ¥12,777/60kg)*1<Domestic> Decrease in farmers' willingness to buy

 Russia’s invasion of Ukraine<Overall> Sales: No direct impact as we do not conduct sales activities in this region.
 Purchasing: Supply chain disruption, concern that raw material prices will soar further Yen depreciation<Overall> Minor impact on operating income*1 Relative trading price (average of all grades) Source: Monthly Report on Rice, Ministry of Agriculture, Forestry and Fisheries
Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 20225

Outline of Consolidated Business Performance(January 1, 2022 to March 31, 2022)(JPY bn, %)FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12

1Q Actual

1Q Actual

1Q Actual

1Q Actual

1Q Actual

YoY
ChangeNet Sales

36.8

33.3

31.9

40.4

38.7

(1.7)

(Domestic)(Overseas)

28.4
8.4

25.3
7.9

25.0
6.8

28.2
12.2

22.7
16.0

(5.5)
3.8

Operating Income

(0.5)

(0.7)

(1.1)

1.4

(0.2)

(1.7)

Operating Margin(1.6)%(2.2)%(3.5)%

3.7%(0.6)%(4.3)%

Ordinary Income

(0.9)

(1.1)

(1.2)

2.1

0.0

(2.0)

Profit (Loss) Attributableto Owners of Parent

(0.3)

(0.4)

(0.4)

1.9

0.2

(1.6)

US$

110.1

110.5

109.6

104.4

114.8

10.4

Euro

134.3

126.3

120.8

126.8

130.1

3.3

Average
Exchange
Rate (JPY)

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

6

Domestic Sales
YoY
Pullback effect with withdrawal of government subsidies for business continuity, etc., which had
JPY5.5 billion stimulated demand, and decreased willingness to buy due to falling rice prices
Maintenance revenues maintained
decrease
FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12

1Q Actual

1Q Actual

1Q Actual

1Q Actual

1Q Actual

Cultivating &Mowing
Machinery

7.2

6.7

5.7

6.6

5.8

(0.7)

Planting
Machinery

2.1

2.2

1.7

2.5

1.6

(0.8)

Harvesting &Processing
Machinery

2.8

2.7

2.0

2.4

2.0

(0.3)

Subtotal

12.2

11.7

9.5

11.6

9.6

(1.9)

Farming
Implements

4.8

4.8

4.1

5.9

4.0

(1.9)

Spare Parts

2.6

2.7

2.9

3.0

2.9

(0.0)

Repair Fees

0.9

1.0

1.1

1.1

1.1

(0.0)

Subtotal

8.5

8.6

8.2

10.2

8.1

(2.0)

20.7

20.4

17.8

21.8

17.7

(4.0)

Construction of Facilities

2.7

0.5

2.6

1.4

0.7

(0.7)

Others

4.8

4.4

4.6

5.0

4.2

(0.7)

28.4

25.3

25.0

28.2

22.7

(5.5)

Agricultural Machinery

Agricultural Machinery Related(JPY bn)

Total

Total

YoY Change

Main factors of YoY changes✔

Sales of agricultural machinery and farming
implements declined due to decreased
willingness to buy caused by falling rice
prices, in addition to a pullback effect withwithdrawal of government subsidies forbusiness continuity, etc., which had
stimulated demand.

✔

Although revenues from machinery andfarming implements declined,
maintenance revenues, such as spare parts
sales and repair fee revenues,
maintained the same level year on year.

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

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Overseas Sales
YoY
JPY3.8 billion

Sales increased in all regions due to sales promotion that meets market needs
FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12

1Q Actual

1Q Actual

1Q Actual

1Q Actual

1Q Actual

YoY
ChangeNorth
America

2.6

2.8

2.3

3.9

4.6

0.6

Europe

2.8

2.9

2.4

5.9

7.8

1.9

Asia

2.7

2.0

2.0

2.2

3.5

1.2

Others

0.0

0.0

0.0

0.0

0.1

0.0

Total Sales

8.4

7.9

6.8

12.2

16.0

3.8

(JPY bn)

Main factors of YoY changes✔ NorthAmerica:

Sales increased due to active sales
promotion by AGCO against the
backdrop of a favorable compact
tractor market accompanying
lifestyle changes✔ Europe：

Sales increased due to strong sales,
mainly to consumers
accompanying lifestyle changes, aswell as increased sales toprofessionals in line with arecovery in demand forlandscaping.

✔ Asia：Sales increased due toconcentration of shipments in thefirst half of the year due to Stage 5
emission standards in South Korea

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

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Operating Income
YoY
JPY1.7 billion
decrease

Decrease in gross profit due to lower sales and the impact of higher raw material prices
Increase in SG&A expenses due to deterioration of distribution cost ratio, etc.
[Breakdown of YoY Change]
FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12

1Q Actual

1Q Actual

1Q Actual

1Q Actual

1Q Actual

YoY
ChangeNet Sales

36.8

33.3

31.9

40.4

38.7

(1.7)

Gross Profit

9.9

9.6

9.0

11.7

10.8

(0.9)

Gross Profit
Margin

27.0%

28.9%

28.2%

29.1%

27.9%

(1.2)%

SG&A Expenses

10.5

10.3

10.1

10.3

11.0

0.7

Personnel
Expenses

6.2

6.1

6.0

6.0

6.4

0.3

Other Expenses

4.3

4.2

4.0

4.2

4.6

0.3

Operating Income

(0.5)

(0.7)

(1.1)

1.4

(0.2)

(1.7)

(1.6)%(2.2)%(3.5)%

3.7%(0.6)%(4.3)%(JPY bn, %)OperatingMarginDecrease in gross profit: (0.9)

(0.6)

(0.6)

0.3

(0.2)

(0.5)

(0.2)

1.4

FY2021/12
1Q

Decreasedgross profit
due to lower
sales(including
effect of
FOREX
fluctuations)

Impact ofsoaring raw
material
pricesResponse tosoaring raw
material
prices, etc.

Increased
logistics
expenses

Increased
SG&A
expenses

FY2022/12
1Q[Effect of FOREX Fluctuations (JPY bn)]
Net Sales

Cost of Sales

SG&A
Expenses

Operating
Income

0.5

(0.6)

(0.0)

(0.1)

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 20229

Ordinary Income & Profit
Ordinary income
YoY
JPY2.0 billion
decrease

Maintained profitability in ordinary income despite the absence of one-time nonoperating income recorded in the same period of the previous year
FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12

1Q Actual

1Q Actual

1Q Actual

1Q Actual

1Q Actual

YoY
ChangeOperating Income

(0.5)

(0.7)

(1.1)

1.4

(0.2)

(1.7)

Balance of Financial
Income

(0.1)

(0.1)

(0.1)

(0.1)

(0.1)

0.0

Other Non-operating
Income

(0.1)

(0.1)

0.0

0.8

0.4

(0.3)

Ordinary Income

(0.9)

(1.1)

(1.2)

2.1

0.0

(2.0)

Extraordinary Income

0.0

0.0

0.1

0.0

0.0

(0.0)

Extraordinary Losses

0.0

0.0

0.0

0.0

0.0

0.0

Income Before Income
Taxes

(0.9)

(1.1)

(1.1)

2.0

0.0

(2.0)

Income Taxes Deferred

0.5

0.7

0.7

(0.1)

0.2

0.4

Profit (Loss) Attributableto Owners of Parent

(0.3)

(0.4)

(0.4)

1.9

0.2

(1.6)

(JPY bn)Non-operating Income (YoY Change)

Absence of settlement
received, etc.

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

(0.4)

10

Balance SheetYoY Change

Inventories of work in progress increased due to supply chain disruptions, despite
progress in reducing inventories of finished goods
Interest-bearing liabilities continue to contract
As of Mar.
31, 2021

As of Mar.
31, 2022

YoY Change

As of Mar.
31, 2021

As of Mar.
31, 2022

YoY
ChangeCash & Deposits

9.0

10.4

1.3

Accounts Payable - Trade

40.1

41.4

1.3

Accounts Receivable - Trade

28.9

30.1

1.1

Interest-bearing Liabilities

71.2

67.9

(3.3)

Inventories

53.4

54.6

1.2

(Loans Payable)

63.2

60.8

(2.4)

(Merchandise & Finished Goods)

45.8

45.1

(0.7)

Other Liabilities

17.6

20.0

2.4

(Work in Progress)

6.4

8.2

1.8

Other Current Assets

4.5

3.5

(1.0)

(Short-term Loans Receivable)

1.6

0.0

(1.6)

Total Current Assets

96.1

98.7

2.6

Total Liabilities

129.0

129.4

0.4

Property, Plant and Equipment

85.8

84.6

(1.1)
Net Assets

64.8

66.2

1.3

Intangible Assets

2.0

2.3

0.2

Investments and other Assets

9.8

9.8

(0.0)

(Retained Earnings)

16.4

17.3

0.8

Total Non-current Assets

97.8

96.8

(0.9)

Total Assets

193.9

195.6

1.7

Total Liabilities and Net Assets

193.9

195.6

1.7

(JPY bn)

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

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2. Domestic and Overseas Markets

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

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Domestic Agricultural Machinery Market Trends
Domestic
Agricultural
Machinery
DemandModerate pace of recovery from the pullback effect with withdrawal of government subsidies
for business continuity, etc., which had stimulated demand, and the pullback effect with thedecreased willingness to buy due to falling rice prices, etc. after the consumption tax increase.

■ Agricultural machinery demand (shipments in the industry)
Oct. 2019(9 principal machinery, moving annual total)

Consumption tax increase(JPY bn)

280
260
240
220
200
Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar.
2017

2018

2019

2020

2021

2022

*9 principal machinery: Tractors, combine harvesters, rice transplanters, tillers, drying machines, rice huskers, binders, harvesters, treatment
Source: Estimated by ISEKI from statistics provided by the Japan Agricultural Machinery Manufacturers Association
Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 202213

Domestic Market Trends (Situation of ISEKI)
January to March
1. Actual Sales by Domestic Distributors

Amount of Agricultural Machinery Products(Jan. to Mar. 2022)
 Sales: YoY 82%, From year before last 102%
 Contracts: YoY 86%, From year before last 108%
*Partial backlog of orders due to production delays

2．Retail and Service Activities
・Events were generally canceled in Jan. and Feb. due to
COVID-19.
From March onward, some events will be scaled down.
・WEB LIVE demonstration held (Mar. 25)
Utilized the Internet, including simultaneous video
streaming on YouTube.

Future Expansion, etc.
・From April onward, the Company is promoting demonstrationsof tractors and rice transplanters, as well as other activities in
response to the current spring work season.
→ The demonstrations is streamed on "Amoni."
・Promotion of smart agricultural machinery
Strengthen promotion of models subject to the Smart
Agriculture Demonstration Project, etc.
✓ Human-monitored robot agricultural
machinery(Tractors, rice transplanters)✓ Tractors with straight-travel assistance✓ Rice transplanters with straight-travel &turning assistance✓ Variable fertilizer rice transplanters

Human-monitored robot
rice transplanter・Price revision of our agricultural machinery products in
response to soaring raw material prices✓Price revision: from Jun. 2022

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

14Market Trends (North America, Europe)
EuropeNorth America
1. Market Trends(1,000 units, %)Jan. to Mar. cumulative

1. Market Trends

2020

2021

2022

Differences

40 HP and lower(Compact tractors)

29

47

43

90%

40-100 HP(Utility tractors)

12

16

15

95%

・Consumer demand remains strong due to lifestylechanges∙ Professional demand recovered to the level seen before
the COVID-19 pandemic as governments in various
countries eased restrictions in place due to COVID-19

100 HP and above

4

5

6

113%

2. Local Sales

Category (PTO HP)

2. Situation of AGCO
(OEM partner)(Source: Statistics provided by AEM)

Unit sales (Jan.-Mar. 2022)
Compact tractors: YoY 88%

3. Shipments and Orders at ISEKI

3. Shipments and Orders at ISEKI• Shipments and Orders(Jan.-Jun. 2022):

Unit sales (Jan.-Mar. 2022)
 Local distributors: YoY 97%

YoY 187%(Including order backlog from the previous fiscal year)
・ A shortage of containers for marine transportation led to unfulfilled shipments, etc.

• Shipments and Orders(Jan.-Jun. 2022):
Significant increase YoY(Including order backlog from the previous fiscal year)
・ A shortage of containers for marine transportation led to unfulfilled shipments, etc.

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 202215

Market Trends (Asia)
Thailand
1. Market Trends

Indonesia, Myanmar
1. Market Trends

Demand remained at the same level YoY, mainly forfield crops

2. Situation of the Local Distributor, IST Farm Machinery•Unit sales (Jan.-Mar. 2022)
 ASEAN Strategy Tractor: YoY 108%

3. Shipments and Orders at ISEKI
Shipments and Orders (Jan.-Jun. 2022): YoY 145%

<Indonesia> Budget for government tenders is shrinking as funds
are diverted to COVID-19 prevention measures.
<Myanmar> Sales activities of sales outlets were affected by achaotic domestic situation due to the coup d'état

2. Shipments and Orders at ISEKI(Jan.-Jun, 2022)<Indonesia> Received orders amid shrinking budget for tenders<Myanmar> Sales activities stagnated as the chaos due to thecoup d'état became prolonged

3. PT. ISEKI Indonesia (Manufacturing Subsidiary)(Units, JPY bn)（単位：台、億円）

2021
Actual2022
1Q ActualPlan

1Q Actual

Production
Volume15,6804,300

17,1703,500

Operating
Income

0.3

0.1

0.3

0.0

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

16Market Trends (Asia)
South Korea, Taiwan

China

1. Market Trends

1. Market Trends◆ National Government Subsidy(RMB Bn)

2016

2017

2018

2019

2020

2021

2022

23.7

18.6

18.6

18.0

17.0

19.0

Not
published◆ Trends in the Agricultural Machinery Industry by Product Type(YoY Change in Units, %)Jan.-Mar., 2020

Jan.-Mar., 2021

Jan.-Mar., 2022

Rice Transplanters (riding)

121.1%

217.9%

86.2%

Combine Harvesters (allpurpose, auto-threshing)

46.2%

118.5%

206.9%

Tractors(medium- to large-sized)

85.5%

165.9%

136.1%

Source: China Association of Agricultural Machinery Manufacturers

2. Situation of Dongfeng Iseki．(Unit sales, Jan.-Mar., 2021)

 Rice transplanters (riding): YoY 76%
 Tractors, combine harvesters: YoY 115%

<South Korea> In line with moves toward large-scale farming,
demand for large-sized, high-performance
agricultural machinery heightened amidst a
declining and aging farming population<Taiwan>Demand for tractors and combine harvesters
decreased significantly due to a pullback
effect with withdrawal of subsidies

2. Shipments and Orders at ISEKI(Jan.-Jun., 2022)<South Korea> Increased shipments due to higher sales ofrice transplanters and concentration of
shipments of tractors and combine harvesters
in the first half of the year due to Stage 5
emission standards<Taiwan>
Shipments decreased YoY. Promoted byholding exhibitions, etc.

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

17

3. Performance Forecast for the Fiscal Year Ending
December 31, 202218

Consolidated Performance Forecast
Although the impact of COVID-19 remains both in Japan andoverseas, we assume that the Omicron variant will be undercontrol by the end of the first half of the year, and that socialand economic activities will be on a gradual recovery trend(same as initial forecast)
Soaring raw material prices, continued supply chain
disruptions, Russia's invasion of Ukraine, and yen
depreciation

No revision to earnings forecast,despite lingering uncertainty about the future
Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

19

Forecast of Consolidated Financial Results for the Fiscal YearEnding December 31, 2022
Consolidated
Financial Results
Forecasts

No revision to initial forecast
YoY sales increase, increase in operating income, year-end dividend of 30 yen(単位：億円)(JPY bn, %)FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12

ActualActualActualActualForecast*

YoY Change

155.9

149.8

149.3

158.1

166.5

8.3

(Domestic)

122.8

117.7

115.9

117.3

119.0

1.6

(Overseas)

33.1

32.1

33.3

40.7

47.5

6.7

Operating Income

3.1

2.7

2.0

4.1

4.7

0.5

2.0%

1.8%

1.4%

2.6%

2.8%

0.2%

Ordinary Income

2.6

1.1

1.7

4.6

4.6

(0.0)

Profit Attributable to Owners of
Parent

1.0

0.7

(5.6)

3.1

3.1

(0.0)

Net Sales

Operating Margin

US$

110.2

109.3

107.0

109.0

110.0

1.0

Euro

130.9

121.6

121.5

129.8

130.0

0.2

Year-end Dividend (JPY)

30

30

0

30

30

0

Average Exchange
Rate (JPY)* FY2022/12 Forecast: announced on Feb. 15, 2022
Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

20

4. Topics

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

21

Topics■ DBJ Environmental Rating – highest rating 16 times in a row
The Development Bank of Japan Inc. has appraised ISEKI as one of
the “Companies doing environment-friendly business activities
progressively,” its highest rating.

■Selected as a 2022 Certified Health & Productivity Management
Outstanding Organization (Large Enterprise Category )ISEKI will maintain and improve the health of each and every employee throughthe implementation of measures based on the three pillars of health (physical,
mental, and lifestyle health) to increase
engagement and achieve sustainable growth for
the Group.
*For details, please refer to the News Release page on the Iseki Agricultural Machinery website. https://www.iseki.co.jp/news/
Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

22

Topics■ PT. ISEKI Indonesia (Manufacturing Subsidiary)
Establishment of production increase system (plant expansion, transfer of
production from Japan)[Production Volume]
Production
modelsTractors (For North America, Europe, ASEAN)

Compact tractor(For North America)

1,100
2014

3,900
2015

Compact tractor(For ASEAN)

7,300

Lawn mowers,
mowers, collectors

Sub-compact tractor Sub-compact tractor(For Europe)(For North America)

8,400

9,700

12,600Riding mower(For Europe)

15,680 17,170

10,760 Plant expansion (to 22,000 units) Production transfer(lawn mowers, mowers, collectors)

 Plant expansion (to 18,000 units)
2016

2017

2018

2019

2020

19,400

2021

2022
Plan

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 2022

2025
Mid-term Management Plan

23

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 anduncertainties. 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 not liable for any
losses incurred by investment decision made utilizing the business forecast or targets given in this document.

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”.

Financial Results Briefing for the First Quarter of the Fiscal Year Ending December 31, 202224